Document:

Amended and Restated Shareholders Agreement

 EXHIBIT 4.3 
 Any text removed pursuant to Portugal Telecom’s 
 confidential treatment request has been
separately 
 filed with the U.S. Securities and Exchange 
 Commission and is marked “[***]” herein. 
 Shareholders’
Agreement 
 relating to 
 Brasilcel N.V. 
 between 
 TELEFÓNICA MÓVILES, S.A., 
 PORTUGAL TELECOM, SGPS, S.A., 
 PT MÓVEIS, SGPS, S.A. 
 And

 Brasilcel N.V. 
 Dated 21 September 2005 

 Contents 
  

					
	  	  	 Section
	  	Page
	 1.
	  	SHARE CAPITAL AND BUSINESS OF THE COMPANY	  	7
			
	 1.1
	  	Share Capital and General Share Premium Reserve	  	7
			
	 1.2
	  	Company Growth Principles	  	7
			
	 1.3
	  	Scope of Business of the Company; Synergies	  	8
			
	 1.4
	  	Actions relating to Company Shares	  	9
			
	 1.5
	  	Exercise of Voting Rights	  	9
			
	 2.
	  	MANAGEMENT OF THE COMPANY	  	9
			
	 2.1
	  	Governance Principles	  	9
			
	 2.2
	  	Managing Board:	  	11
			
	 2.3
	  	Supervisory Board	  	13
			
	 2.4
	  	Officers of the Subsidiaries	  	17
			
	 2.5
	  	Performance of the Officers	  	19
			
	 2.6
	  	Meetings of the Officers	  	19
			
	 2.7
	  	Subsidiary Governance	  	19
			
	 2.8
	  	Effects of Dilution on the Managing Board, Supervisory Board, Officers and Boards of Directors of the Subsidiaries	  	20
			
	 2.9
	  	Representation of the Company	  	23
			
	 3.
	  	SHAREHOLDERS MEETINGS AND RIGHTS	  	23
			
	 3.1
	  	Shareholders Meetings	  	23
			
	 3.2
	  	Call Procedure	  	23
			
	 3.3
	  	Chairing of Shareholders Meetings	  	23
			
	 3.4
	  	Shareholder Decisions	  	24
			
	 3.5
	  	Effects of Dilution	  	24
			
	 4.
	  	CELLULAR CHAIRMEN DEADLOCKS, WISE PERSONS PROCEDURE AND LIQUIDATION	  	26
			
	 4.1
	  	Cellular Chairmen Deadlocks	  	26
			
	 4.2
	  	Wise Persons Procedure	  	27
			
	 4.3
	  	Liquidation of the Company	  	28
			
	 5.
	  	TRANSFER OF COMPANY SHARES	  	29
			
	 5.1
	  	Transfer	  	29
			
	 5.2
	  	Permitted Transferees; Transfers in the Context of Consolidation	  	29
			
	 5.3
	  	Indirect Transfers	  	30

  

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	 5.4
	  	Right of First Refusal	  	30
			
	 5.5
	  	Tag-Along Right	  	34
			
	 5.6
	  	Conditional Put	  	35
			
	 5.7
	  	Pre-emptive Rights	  	36
			
	 5.8
	  	Tax Efficiency	  	37
			
	 5.9
	  	Encumbrance of Company Shares	  	37
			
	 5.10
	  	Transfer restriction in Articles of Association, Exercise of voting rights	  	37
			
	 6.
	  	DILUTION	  	37
			
	 6.1
	  	Dilution	  	37
			
	 6.2
	  	Diluted Interest Between 50% and 40%	  	37
			
	 6.3
	  	Diluted Interest Below 40%	  	38
			
	 6.4
	  	PT Group Put.	  	39
			
	 6.5
	  	Governance and Dilution in the Event of Listing	  	44
			
	 6.6
	  	Listing of Holding Companies	  	44
			
	 7.
	  	FINANCIAL POLICIES	  	44
			
	 7.1
	  	Financial Policies	  	44
			
	 7.2
	  	Business Plan and Financing of the Company	  	45
			
	 7.3
	  	GAAP	  	46
			
	 7.4
	  	Annual Budget	  	46
			
	 7.5
	  	Books of Account	  	46
			
	 7.6
	  	Reasonable Access	  	46
			
	 7.7
	  	Management fees	  	46
			
	 7.8
	  	Financial Services	  	47
			
	 8.
	  	NON-COMPETITION AND BUSINESS OPPORTUNITIES	  	47
			
	 8.1
	  	Non-compete	  	47
			
	 8.2
	  	Wireless Business Opportunities	  	47
			
	 9.
	  	INTERESTS IN NEW ACQUISITIONS AND FURTHER INTERESTS IN WIRELESS PROPERTIES	  	48
			
	 10.
	  	CONFIDENTIALITY	  	48
			
	 10.1
	  	Confidential Information	  	48
			
	 10.2
	  	Use and Disclosure	  	48
			
	 10.3
	  	Duties of the Receiving Party	  	48
			
	 10.4
	  	Exclusions	  	49
			
	 11.
	  	TERMINATION	  	49
			
	 11.1
	  	Termination	  	49
			
	 11.2
	  	Survival of Obligations and Liabilities	  	50
			
	 12.
	  	COVENANTS, REPRESENTATIONS AND WARRANTIES, REGISTRATION	  	50
			
	 12.1
	  	Covenants, Representations and Warranties of the Shareholders and the Company	  	50

  

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	 12.2
	  	Survival of Covenants, Representations and Warranties	  	51
			
	 12.3
	  	Shareholders’ Register	  	51
			
	 12.4
	  	Consent by the Company	  	51
			
	 13.
	  	GOVERNING LAW AND SETTLEMENT OF DISPUTES	  	51
			
	 13.1
	  	Governing Law	  	51
			
	 13.2
	  	Arbitration	  	52
			
	 14.
	  	COMMUNICATIONS	  	53
			
	 15.
	  	MISCELLANEOUS PROVISIONS	  	54
			
	 15.1
	  	Entire Agreement	  	54
			
	 15.2
	  	Modification and Amendment; Indexation	  	55
			
	 15.3
	  	Waiver	  	55
			
	 15.4
	  	Survival of Provisions	  	55
			
	 15.5
	  	Exclusive Benefit of the Parties and the Company	  	56
			
	 15.6
	  	Bona fide	  	56
			
	 15.7
	  	Penalty and delay interest	  	56
			
	 15.8
	  	Counterparts	  	56
			
	 15.9
	  	Language	  	57
			
	 15.10
	  	Period of Time	  	57
			
	 15.11
	  	General Interpretation	  	57
			
	 15.12
	  	No Partnership	  	57
			
	 15.13
	  	Severability	  	58
			
	 15.14
	  	Taxes and Expenses	  	58
			
	 15.15
	  	IPO	  	58
			
	 15.16
	  	Public Announcements	  	58
			
	 15.17
	  	Joint and Several	  	59
			
	 16.
	  	DEFINITIONS	  	59

  

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 Shareholders’ Agreement 
 THE UNDERSIGNED: 
  

	 	(1)	TELEFÓNICA MÓVILES, S.A., a corporation duly organized, existing and established in accordance with the laws of the Kingdom of Spain
(“Spain”), with head offices at Goya 24, Madrid, Spain, represented herein in accordance with its bylaws (“TEM”); 

  

	 	(2)	PORTUGAL TELECOM, SGPS, S.A., a corporation duly organized, existing and established in accordance with the laws of Portugal (“Portugal”), with head
offices at Av. Fontes Pereira de Melo, 40, 11o andar, Lisbon, Portugal, represented herein in accordance with its bylaws (“Portugal Telecom”); 

  

	 	(3)	PT MÓVEIS, SGPS, S.A., a corporation duly organized, existing and established in accordance with the laws of Portugal, with head offices at Av. Fontes Pereira
de Melo, 40, Lisbon, Portugal, represented herein in accordance with its bylaws (“PT Móveis”); 

 and 
  

	 	(4)	BRASILCEL N.V., a limited liability company, duly organized, existing and established in accordance with the laws of the Netherlands, with corporate seat
in Amsterdam, the Netherlands, and address at: 1077 ZX, Amsterdam, the Netherlands, Strawinskylaan 3105 represented herein in accordance with its articles of association (the “Company”). 

 TEM, Portugal Telecom, PT Móveis and the Company together hereinafter also referred to as the “Parties”. 
  

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 Capitalized terms used herein shall have the meaning ascribed to them in Section 16 hereto, elsewhere in this
Agreement or in the Subscription Agreement (as defined below). For the avoidance of doubt, in the event of any conflict between capitalised terms used and defined in this Agreement and capitalised terms defined in the Subscription Agreement, then
for purposes of this Agreement, the definitions in this Agreement shall prevail. Where any term is used in this Agreement, but defined in the Subscription Agreement, the termination of the latter agreement shall not affect such definition.

 WHEREAS: 
  

	 	(A)	Portugal Telecom, PT Móveis and TEM, among others, in accordance with the terms of a Joint Venture Agreement dated January 23, 2001 (the “Joint Venture
Agreement”), entered into a Subscription Agreement dated October 17, 2002 (the “Subscription Agreement”), and agreed to use the Company and to subscribe for all of the Company Shares with all of their properties at
that moment and from that moment on used in connection with the operation of the Wireless Business, including the Interest in Wireless Properties and the Global Telecom Interest, as well as any Interest in New Acquisitions and any Further Interest
in Wireless Properties plus, when applicable, cash and other Liquid Assets, as set forth in the Subscription Agreement; 

  

	 	(B)	the Parties have expressed their desire to promote their mutual interest by agreeing to certain matters, among others relating to the operation and management of the Company
and the disposition of the Company Shares. Therefore, the Parties entered into a shareholders’ agreement dated October 17, 2002 (the “Shareholders’ Agreement”) which together with the Subscription Agreement regulates
the relationship of the PT Group and the TEF Group as shareholders of the Company; 

  

	 	(C)	The Parties realise that certain changes have occurred and, therefore, wish to amend the Shareholders’ Agreement as of the date hereof, whereby this agreement
constitutes the entire Agreement. 

  

	 	(D)	In accordance with the amendment to the Shareholders’ Agreement, the articles of association of the Company need to be amended, by which amendment inter alia a
Supervisory Board shall be installed. 

  

	 	(E)	Upon having obtained the declaration of no objection from the Netherlands Ministry of Justice, a notarial deed shall be executed in order to amend the articles of association
of the Company; the form of the amended articles of association of the Company (the “Articles of Association”) is attached hereto as Exhibit A; 

  

	 	(F)	The Parties commit to comply, and to cause the Company to comply, with this Agreement. 

  

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 It is agreed as follows: 
  

	1.	SHARE CAPITAL AND BUSINESS OF THE COMPANY 

  

	1.1	Share Capital and General Share Premium Reserve 

  

	 	(a)	The issued share capital of the Company, in the amount of EUR 100,000 (one hundred thousand euro) on the date hereof, consists of 100,000 (one hundred thousand) Company
Shares, with a nominal value of EUR 1 (one Euro) each, divided between the Shareholders in the proportion of 50% (fifty percent) to each Group as follows: 

  

	 	(i)	TEM:                                50,000 (fifty thousand) Company Shares;

  

	 	(ii)	PT Móveis:                      49,999 (forty-nine thousand nine
hundred ninety-nine) Company Shares; and 

  

	 	(iii)	Portugal Telecom:          1 (one) Company Share. 

  

	 	(b)	The Company has established a general share premium reserve for the benefit of all Shareholders in proportion to their shareholding interest in the Company at any time (the
“General Share Premium Reserve”). 

  

	 	(c)	The Shareholders shall take such actions under applicable Netherlands law as may be necessary to ensure that the organisational documents of the Company, including the
Articles of Association, at all times conform in all respects with Netherlands law and any other applicable laws and regulations and executed in such a manner so as to permit the Company to fully comply with this Agreement. 

 

	 	(d)	As between the Shareholders, the provisions of this Agreement and the Subscription Agreement take precedence over any provision of the Articles of Association to the extent
such provision conflicts with this Agreement or the Subscription Agreement. 

  

	1.2	Company Growth Principles 

  

	 	(a)	The Shareholders agree that the Company shall be the vehicle used for the development of all the Wireless Business of the Groups in Brazil. Consequently, the Shareholders
undertake to contribute or to procure that the relevant members of their respective Group transfer to the Company, and to procure that the Company acquires their Wireless Properties and any Interest in a New Acquisition acquired directly by either
Group, on the terms and conditions set forth in this Agreement and in the Subscription Agreement. 

  

	 	(b)	The Shareholders also agree: 

  

	 	(i)	not to prevent the Company from acquiring or developing, as the case may be, any new Wireless Business, proposed by any or both Groups, provided that the acquisition
or development of the new business meets some of the following criteria: 

  

	 	(A)	expands footprint in Brazil; 

  

	 	(B)	enhances the Company’s market share or subscriber base; 

  

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	 	(C)	allows for an increase in marketing, technological or operational efficiency; 

  

	 	(D)	enhances the platform for growth and profitability; 

  

	 	(E)	allows for leveraging on management skills and know-how; or 

  

	 	(F)	provides a smooth transition to new products and services; 

 provided that all the new business to be acquired or developed, as the case may be, must enhance shareholder value as demonstrated by an independent analysis from time to time; and 
  

	 	(ii)	that: 

  

	 	(A)	[***]; and 

  

	 	(B)	additional spectrum and licenses, provided that spectrum and licenses enhance shareholders value as demonstrated by an independent analysis, 

are within the Company Growth Principles. 
  

	 	(c)	The Shareholders also agree that the Company’s investments will be funded in accordance with Section 7 hereto. 

  

	1.3	Scope of Business of the Company; Synergies 

  

	 	(a)	The Shareholders confirm their objective to build the leading wireless and mobile telephone venture in Brazil by operating solely through the Company and otherwise to take,
or refrain from taking, any actions in such a manner to permit the Company to fully comply with the Company Growth Principles. 

  

	 	(b)	The Shareholders also agree that one of the main objectives of the joint venture is to achieve synergies by working together for the development of the Wireless Business of
the Company (the “Synergies”). 

  

	 	(c)	In this connection, the Shareholders agree that as long as the [***] holds directly or indirectly [***] in cellular and wireless operators in [***], the Shareholders shall
procure to [***] in the management of the Company of all potential Synergies for those cellular and wireless operators as well as for [***] Brazil, provided that [***] to the Company as a result of such actions. The proposed [***] shall be
submitted by either Group (the “Proposing Party”): (i) to the management team of the Subsidiaries through its CEO, who shall analyse the matter; or (ii) directly to the Supervisory Board. In the event that the management
team of the Subsidiaries or the Supervisory Board determines that the proposal requires further analysis, the cost of preparing such additional analysis shall fall upon the Proposing Party. In the event that the matter is submitted first to the
managing team of the Subsidiaries and, within thirty (30) days following the proposal of the Proposing Party, such management team of the Subsidiaries fails to consider or rejects such proposal, the Proposing Party shall have the right to
submit the proposal (together with such additional analysis considered relevant in order to demonstrate [***] to the Company) directly to the Supervisory Board for final decision by [***]. In the event that, pursuant to the foregoing, a manager
authorised to represent the Subsidiaries approves 

  

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 the proposal or the Supervisory Board approves the proposal, the Shareholders shall use reasonable
efforts [***] by the Company (and relevant Subsidiaries), provided that, in such event, the Proposing Party shall [***] that may [***] to the Company (or any such Subsidiaries) as a result of [***]. 
  

	 	(d)	VIVO is the brand that has been chosen by both Shareholders and that it is currently being used by the Subsidiaries, and may be used by the TEF Group or the PT Group
anywhere. The Parties agree that in the event of [***], the VIVO brand will be [***] (or of the [***] they may agree), but [***]. 

  

	1.4	Actions relating to Company Shares 

 Each
Shareholder agrees and shall procure that all actions taken by it in relation to any Company Shares now or hereafter owned by it (or any of its Affiliates) shall be subject to and taken in accordance with the terms of this Agreement. 
  

	1.5	Exercise of Voting Rights 

 Each Shareholder agrees
to exercise its voting rights on the Company Shares in such a manner as to allow the other Shareholders to exercise their rights and perform their obligations under this Agreement and the Subscription Agreement. The Shareholders in the PT Group
shall always exercise their voting rights on the Company Shares unanimously and the Shareholders in the TEF Group shall always exercise their voting rights on the Company Shares unanimously. Wherever this Agreement or the Subscription Agreement
contains a provision placing an obligation on a Group, the Shareholders which are members of such Group shall be obliged to procure the performance of such obligation. 
  

	2.	MANAGEMENT OF THE COMPANY 

  

	2.1	Governance Principles 

  

	 	(a)	The Shareholders agree that, subject to applicable laws, the Articles of Association and this Agreement, the Company will be managed by the Managing Board under the
supervision of the Supervisory Board. The Shareholders further agree that the Company and the Wireless Business of the Company shall be managed in the spirit of a 50 - 50 (fifty - fifty) joint venture, subject to the exceptions set forth in this
Agreement with respect to the dilution below certain levels of each Group’s Interest in the total issued and outstanding share capital of the Company. The Shareholders agree that the management of the Company and its Subsidiaries shall be
professional, oriented to obtaining results and excellence in the performance of the Company’s activities and in compliance with the Company Growth Principles. 

  

	 	(b)	         

  

	 	(i)	Each Shareholder agrees not to (nominate to) appoint any individual or entity which may directly or indirectly be related to, employed or retained by another
telecommunications operator or any Person who directly or indirectly competes with the Company and the Subsidiaries in Brazil (a “Conflicted Person”) as its representatives for the Shareholders Meeting, the Supervisory Board, the
Managing Board or as its representatives for the corporate bodies of any of the 

  

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 Subsidiaries, or to any managerial or official position in the Company or in any of the Subsidiaries, or
to any other business relationship with the Company or any of the Subsidiaries. 
  

	 	(ii)	The restriction as set forth in Section 2.1(b)(i), above, agreed upon for the benefit of the other Group, will not apply if the other Group has consented in writing to
the Person that would qualify as Conflicted Person being involved in the management of, or having access to information concerning, the Company or the Subsidiaries. 

  

	 	(iii)	Prior to the (nomination for) appointment of each individual or entity to a position referred to in Section 2.1(b)(i), above, the relevant Group shall provide the other
Group with such details of the individual or entity as are reasonably necessary to enable the latter Group to determine whether the individual or entity is, in its reasonable judgement, a Conflicted Person. Unless, within 15 (fifteen) days of
receipt by the latter Group of such details, said Group objects to the appointment of the individual or entity on the grounds that same is a Conflicted Person, the relevant Group may proceed with the (nomination for) appointment of such individual
or entity to the aforementioned position. 

  

	 	(iv)	Notwithstanding Section 2.1(b)(iii), above, in the event that in the reasonable judgement of a Group, any individual or entity appointed (pursuant to the nomination) by
the other Group falls within the definition of a Conflicted Person and therefore is subject to the restriction set forth in this Section 2.1(b)(i), such other Group shall immediately thereafter use its best efforts to procure that the
restrictions are observed, that the Conflicted Person is removed from any position or function being performed and that any other measure is implemented by such other Group and the Company that might be appropriate to prevent access to the
Confidential Information by the Conflicted Person. 

  

	 	(c)	Each of the Shareholders agrees to exercise its voting rights in the relevant Shareholders meeting to appoint the members of the Supervisory Board and/or the Managing Board
nominated by each of the TEF Group and the PT Group in terms of Section 2.2(a) and Section 2.3(a), below. In the event of a vacancy in the Supervisory Board and/or in the Managing Board (including, without limitation, as a result of removal), the
replacement member shall be nominated by binding nomination of the Shareholder’s Group which nominated the Supervisory Director and/or Managing Director being replaced, for the period left to complete the relevant term in office. A Shareholder
may require the suspension, removal or replacement of a Supervisory Director or/and a Managing Director nominated by that Shareholder’s Group at any time and for any reason. Each Shareholder in a Group shall have the right to require the
replacement, suspension or removal of a Supervisory Director and/or Managing Director nominated by the Shareholders in the other Group, provided that this is for Just Cause. The Shareholder requesting the replacement, suspension or dismissal
of a Supervisory Director and/or Managing Director shall deliver a notice to the other Shareholders which shall contain the request to replace, suspend or dismiss the relevant Supervisory Director and/or Managing Director and in the event that such
Supervisory Director and/or 

  

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 Managing Director was nominated by the other Group a description of the relevant Just Cause. Provided
that the Just Cause as stated in such notice is accepted by the other Shareholders, a Shareholders Meeting shall be held within 30 (thirty) days of the receipt of such notice to (resolve on the suspension, replacement or removal of the ) replace
the relevant Supervisory Director and/or Managing Director. Subject to the mandatory provisions of any applicable law, and more particularly Netherlands employment law, each of the TEF Group, the PT Group and the Company, as the case may be, shall
procure that the terms and conditions upon which the Supervisory Director and/or Managing Director are appointed in terms of the provisions of Section 2.2(a) and 2.3(a), shall be such that the Supervisory Directors and/or Managing Directors
will not have the right to indemnification in the event of suspension or removal from their duty as Supervisory Directors and/or Managing Directors. 
  

	2.2	Managing Board:  

  

	 	(a)	Composition of the Managing Board 

  

	 	    	The Managing Board shall be composed of 4 (four) members (the “Managing Directors”, each of them “Managing Director”) each Managing Director having
term in office of 3 (three) years, re-election being permitted. Subject to the provisions of Sections 2.8 and 6 hereto, each of the TEF Group and the PT Group shall have the right to make binding nominations to appoint 2 ( two) Managing Directors,
provided that at least 1 ( one) of each such 2 (two) Managing Directors shall be required to be resident in the Netherlands. 

  

	 	(b)	Meetings of the Managing Board 

  

	 	    	The Managing Board shall hold meetings on a regular basis, and whenever called by the Chairman of the Managing Board or by the Supervisory Board. The quorum for a meeting of the
Managing Board shall be 4 (four) Managing Directors. Managing Directors shall participate at meetings of the Managing Board (i) in person, provided that an absent Managing Director may be represented at any such meeting by proxy granted
by the absent Managing Director to any other Managing Director who was appointed pursuant to a binding nomination of the Group which nominated the absent Managing Director, or (ii) by conference call or video conference, provided that
each participant has the ability to hear and speak to each other participant. 

  

	 	(c)	Place of the Managing Board meetings 

  

	 	    	Meetings of the Managing Board shall be held at the registered office of the Company in the Netherlands or at such other place as agreed among its members. 

 

	 	(d)	Minutes of Managing Board meetings 

  

	 	    	Minutes shall be kept of all matters discussed and actions taken at any Managing Board meeting. Such minutes shall be distributed to all the Managing Directors within the 10 (ten)

  

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 Business Days following each Managing Board meeting, unless agreed otherwise by the Managing Board from
time to time. The minutes shall be signed for approval by all Managing Directors present or represented at such meeting. 
  

	 	(e)	Managing Board decisions 

  

	 	(i)	Subject to the provisions of section 2.8(b)(ii), the Managing Board shall adopt its resolutions by unanimous votes cast. 

  

	 	(ii)	The Managing Board may also adopt resolutions without holding a meeting, provided such resolutions are adopted in writing, by cable, by telex or by telefax and all managing
directors have expressed themselves in favour of the proposal concerned. 

  

	 	(f)	Prior approval of the Supervisory Board 

 The Managing Board shall require the prior approval of the Supervisory Board for the resolutions as referred to in paragraph 2.3(c), below, or for clearly specified resolutions regarding which the Supervisory Board has adopted a resolution
that such clearly specified resolutions require the prior approval of the Supervisory Board. 
  

	 	(g)	The Chairman and the Vice-Chairman of the Managing Board 

  

	 	(i)	The Managing Board shall have a chairman (the “Chairman of the Managing Board”) and a vice-chairman (the “Vice-Chairman of the Managing
Board”). The TEF Group shall designate by binding nomination the Chairman of the Managing Board and the PT Group shall designate by binding nomination the Vice-Chairman of the Managing Board. The Chairman of the Managing Board and the
Vice-Chairman of the Managing Board shall be selected among the Managing Directors then in office, for a term of 3 (three) years (or, if shorter, the selected Managing Director’s remaining term in office as Managing Director), re-election being
permitted. The first election of the Chairman of the Managing Board and Vice-Chairman of the Managing Board shall take place at the first meeting of the Managing Board after its election at a Shareholders Meeting, and such Managing Board meeting
shall occur as soon as practicable after the date of the Shareholders Meeting that so elected the Managing Board. 

  

	 	(ii)	Without prejudice to other matters provided for under Netherlands law, or in the Articles of Association, or expressly established by the Shareholders, or this Agreement, the
Chairman of the Managing Board shall have the following powers and duties: 

  

	 	(A)	to call the Board meetings whenever deemed necessary or at the binding request of any Managing Director and to prepare the list of matters to be discussed at such meetings,
which list shall also include such matters as may be proposed by a Managing Director; 

  

	 	(B)	to ensure that the decisions taken at the Shareholders Meetings and at the Supervisory Board meetings are properly implemented. 

  

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	 	(iii)	In the absence of the Chairman of the Managing Board the Vice-Chairman of the Managing Board shall succeed the Chairman of the Managing Board with regard to the performance
of the powers and duties of the Chairman of the Managing Board as established herein. 

  

	 	(iv)	In the event of a vacancy in the position of Chairman of the Managing Board or Vice-Chairman of the Managing Board (including, without limitation, as a result of removal),
the replacement member shall be nominated by binding nomination of the Group which nominated the Chairman of the Managing Board or the Vice-Chairman of the Managing Board, as the case may be. A Group may require the suspension, removal or
replacement of the Chairman of the Managing Board or Vice-Chairman of the Managing Board nominated by that Group at any time and for any reason by delivering written notice thereof to the other Group. 

  

	 	(v)	Neither the Chairman of the Managing Board nor the Vice-Chairman of the Managing Board shall have a casting vote. 

  

	2.3	Supervisory Board 

  

	 	(a)	Composition of the Supervisory Board 

 The
Company shall have a Supervisory Board composed of 12 (twelve) members each Supervisory Director having a term in office of 3 (three) years, re-election being permitted. Subject to the provisions of Sections 2.6 and 6 hereto, each of the TEF Group
and the PT Group shall have the right to make binding nominations to appoint 6 (six) Supervisory Directors. 
  

	 	(b)	Meetings of the Supervisory Board  

  

	 	(i)	The Supervisory Board shall hold meetings on a regular basis, but at least once every quarter and on extraordinary basis, whenever called by the Chairman of the Supervisory
Board in accordance with the provisions of Section 2.2(g)(ii)(A). The quorum for a meeting of the Supervisory Board shall be 7 (seven) Supervisory Directors. Supervisory Directors shall participate at the Supervisory Board meetings (i) in
person, provided that an absent Supervisory Director may be represented at any such meeting by proxy granted by the absent Supervisory Director to any other Supervisory Director who was appointed pursuant to a binding nomination of the Group
which nominated the absent Supervisory Director, or (ii) by conference call or video conference, provided that each participant has the ability to hear and speak to each other participant. 

  

	 	(ii)	Unless all of the Supervisory Directors are present, or those absent have expressly waived notice, no meeting of the Supervisory Board shall be validly convened unless at
least 3 (three) Business Days prior written notice thereof, specifying the matters to be discussed at the meeting, shall have been given to all of the Supervisory Directors. Notice of such meetings may be given by letter sent by fax or by e-mail.

  

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	 	(c)	Matters that need prior approval by the Supervisory Board  

  

	 	    	The Managing Board shall require the prior approval of the Supervisory Board for the following resolutions regarding: 

  

	 	(i)	Proposals to the Shareholders Meeting, including without limitation: 

  

	 	(A)	Issuance of the Company Shares and determination of the conditions of such issuance, including price, type and class of the shares to be issued; reductions of the
Company’s share capital; 

  

	 	(B)	Reorganisations of the Company and/or its Subsidiaries, such as merger, de-merger or consolidation (where applicable, such proposal to also address the appointment of the COO
of the surviving entity or entities, (as the case may be), as well as appropriate adjustments to be made to the division of assets on Liquidation in terms of Section 4.3 below and the exercise of the Put in the case of a Change of
Control pursuant to Section 5.6 below); 

  

	 	(C)	Proposals to the Shareholders Meeting intended to amend the Articles of Association or to change the corporate nature of the Company; 

  

	 	(D)	Proposals to the Shareholders Meeting to dissolve or liquidate the Company, other than as set forth in Section 4 below; 

  

	 	(E)	Proposal to the Shareholders Meeting to adopt annual accounts, declare and/or pay out dividends or other distributions by the Company or any other decisions regarding the
declaration and/or payment of dividends or other distributions by the Company; 

  

	 	(ii)	Decisions regarding branding and technology of the Company or its Subsidiaries; 

  

	 	(iii)	Decisions regarding Synergies of the Company and/or its subsidiaries, in accordance with Section 1.3 above; 

  

	 	(iv)	Without detracting from Sections 2.4 and 2.5, below, any appointment, amendment to the terms of appointment of or proxies granted to, suspension or removal of the Secretary
of the Company or its Subsidiaries, any Officers or other members of senior management of the Company or its Subsidiaries; 

  

	 	(v)	The acquisition or disposal by the Company, of any material assets, including, without limitation, any Interest in a Subsidiary or a New Acquisition which is not a
Subsidiary, without detracting from the applicable provisions under the Subscription Agreement; 

  

	 	(vi)	Subscription of relevant agreements such as any agreement with an investment bank or any agreement in excess of EUR 1,000,000 (1 Million euro); 

  

	 	(vii)	Adoption of the Company’s financial policies, including the adoption or amendment of the annual Business Plan and the Annual Budget of the Company;

  

	 	(viii)	Any increase or decrease with respect to the borrowing of amounts set forth in the annual Business Plan, the execution of any amendment to any loans or other borrowing
facilities of the Company, and the creation of any security interest on the current and/or future assets of the Company or the granting of any guarantees to any Person whatsoever; 

  

	 	(ix)	In accordance with Section 2.9, below, nomination of representatives of the Company at the corporate bodies of the Subsidiaries, as well as the instructions as

  

 14 / 67 

 to how to exercise the Company’s voting rights at the shareholders meetings and meetings of the
Board of Directors of each Subsidiary (and any other similar corporate bodies thereof); and 
  

	 	(x)	In accordance with Section 2.4, below, nomination of the Officers of the Subsidiaries. 

  

	 	(d)	Supervisory Board Decisions 

  

	 	(i)	Any resolution of, or proposal to the Shareholders Meeting by the Supervisory Board, shall require the affirmative vote of a simple majority of the Supervisory Directors
present or represented at the relevant Supervisory Board meeting, provided that: 

  

	 	(A)	for as long as the PT Group and the TEF Group each hold an Interest of at least 40% (forty percent) in the Company’s total issued and outstanding share capital (except
if such decrease in the participation in the Company derives from a Transfer of Company Shares) and (ii) in the case where a Group’s Interest is diluted to less than 40% (forty percent) due to a capital increase by the Company, during the
6 (six) month period following the occurrence of the relevant Dilution Event Below 40% (forty percent) (subject to Section 2.6(c) below), the affirmative vote shall be required of at least one Supervisory Director nominated by each of the PT
Group and TEF Group, 

  

	 	(B)	for as long as the PT Group and the TEF Group each hold an Interest of at least 10% (ten percent) in the Company’s total issued and outstanding share capital (except if
such decrease in the participation in the Company derives from a Transfer of Company Shares): 

  

	 	(A)	the acquisition by the Company of any Interest in an entity which is not a Wireless Business shall require the affirmative vote of at least 1 (one) Supervisory Director
nominated by each of the PT Group and the TEF Group; 

  

	 	(B)	the execution of any related party agreement between the Company and either of the Groups shall require the approval by an internal audit committee to be created by the
Managing Board, provided that such approval shall not be denied, or withheld in the event that the relevant related party agreement is on arms-length terms and conditions; or 

  

	 	(C)	the proposal to the Shareholders Meeting to adopt a Shareholders ́ resolution for any change in the purpose or scope of business of the Company shall require the
affirmative vote of at least one Supervisory Director nominated by each of the PT Group and the TEF Group, 

 provided
that the PT Group shall have no rights under this Section 2.3(d)(i) during the period commencing on the date on which the PT Group is diluted to holding an Interest of less than 40% (forty percent) in the Company’s total issued and
outstanding share capital and ending on the date on which the PT Group Put is no longer exercisable with respect to such Dilution Event Below 40% (forty percent). 
  

 15 / 67 

	 	(ii)	With respect to matters contemplated in Section 2.3(d)(i), above, it is expressly agreed by the Shareholders that they shall procure that the Supervisory Board, the
Managing Board and the Shareholders Meeting shall affirmatively vote on such matters so as to permit (i) the Company to achieve the Company Growth Principles (provided that, if the Supervisory Directors nominated by a Group vote on a
bona fide basis against the acquisition of an Interest in a New Acquisition and, subsequent thereto, in terms of an arbitration decision pursuant to Section 10 of the Subscription Agreement, it is determined that said acquisition is within the
Company Growth Principles, no penalty (as referred to in Section 15.7 below) shall attach to the relevant Group or the Supervisory Directors who voted against the acquisition, provided further that said Group shall, and shall procure that the
Supervisory Directors nominated by it shall, following the arbitration decision, vote in favour of the transfer to the Company of the relevant Interest in the relevant New Acquisition, if applicable, (ii) a Group to increase its Interest in the
Company’s total issued and outstanding share capital pursuant to Section 6.1, 6.2, and 6.3, below, and (iii) each Shareholder to exercise its rights and perform its obligations set out in this Agreement. 

  

	 	(iii)	Without detracting from the provisions set forth in Sections 6.1, 6.2 and 6.3, below, the non-diluted Group may in its sole discretion decide to grant an additional period to the
diluted Group during which such diluted Group may maintain its corporate governance rights in accordance with this Section 2. 

  

	 	(e)	The Chairman and the Vice-Chairman of the Supervisory Board 

  

	 	(i)	The Supervisory Board shall have a Chairman (the “Chairman of the Supervisory Board”) and a vice-chairman (the “Vice-Chairman of the Supervisory
Board”). The TEF Group shall designate by binding nomination the Chairman of the Supervisory Board and the PT Group shall designate by binding nomination the Vice-Chairman of the Supervisory Board. The Chairman of the Supervisory Board and
the Vice-Chairman of the Supervisory Board shall be selected among the Supervisory Directors then in office, for a term of 3 (three) years (or, if shorter, the selected Supervisory Director’s remaining term in office as Supervisory Director),
re-election being permitted. The first election of the Chairman of the Supervisory Board and Vice-Chairman of the Supervisory Board shall take place at the first meeting of the Supervisory Board after its election at a Shareholders Meeting, and such
Supervisory Board meeting shall occur as soon as practicable after the date of the Shareholders Meeting that so elected the Supervisory Board. 

  

	 	(ii)	Without prejudice to other matters provided for under Netherlands law, or in the Articles of Association, or expressly established by the Shareholders, or this Agreement, the
Chairman of the Supervisory Board shall have the following powers and duties: 

  

	 	(A)	to call the Shareholders Meetings and the Supervisory Board meetings whenever deemed necessary or at the binding request of any Supervisory 

  

 16 / 67 

	 	    	Director and to prepare the list of matters to be discussed at such meetings, which list shall also include such matters as may be proposed by a Supervisory Director;

  

	 	(B)	to ensure that the decisions taken at the Shareholders Meetings and at the Supervisory Board meetings are properly implemented; and 

  

	 	(C)	to chair the Shareholders Meetings and the Supervisory Board meetings. 

  

	 	(iii)	In the absence of the Chairman of the Supervisory Board, the Vice-Chairman of the Supervisory Board shall succeed the Chairman of the Supervisory Board with regard to the
performance of the powers and duties of the Chairman of the Supervisory Board as established herein. 

  

	 	(iv)	In the event of a vacancy in the position of Chairman of the Supervisory Board or Vice-Chairman of the Supervisory Board (including, without limitation, as a result of
removal), the replacement member shall be nominated among the Supervisory Directors by binding nomination of the Group which nominated the Chairman of the Supervisory Board or the Vice-Chairman of the Supervisory Board (as the case may be) such
replacement member being replaced for the period left to complete the relevant term in office. A Group may require the suspension, removal or replacement of the Chairman of the Supervisory Board or Vice-Chairman of the Supervisory Board nominated by
that Group at any time and for any reason by delivering written notice thereof to the other Group. 

  

	 	(v)	Neither the Chairman of the Supervisory Board nor the Vice-Chairman of the Supervisory Board shall have a casting vote in the event of a tie vote at a meeting of the
Supervisory Board. 

  

	 	(f)	Secretary of the Company and Minutes of the Supervisory Board 

  

	 	    	The Supervisory Board shall appoint a secretary of the Company (the “Secretary of the Company”) and shall keep minutes of all matters discussed and actions taken at
any Supervisory Board meeting. Such minutes shall be distributed to all the Supervisory Directors by the Secretary of the Company within the 10 (ten) Business Days following each Supervisory Board meeting unless agreed otherwise by the Supervisory
Board from time to time. The minutes shall be signed for approval by the Chairman of the Supervisory Board, Vice-Chairman of the Supervisory Board and the Secretary of the Company. The Secretary of the Company shall neither be a Supervisory Director
nor a Managing Director of the Company and may or may not be an employee of the Company. 

  

	2.4	Officers of the Subsidiaries 

  

	 	(a)	Without detracting from Section 2.1 above, the Subsidiaries shall be represented on a day to day basis by its Officers, which Officers shall include, at least:
(i) a Chief Executive Officer (“CEO”); (ii) a Chief Financial Officer (“CFO”), (iii) one (1) Chief Operating Officer (“COO”) for each of the Subsidiaries, and (iv) the general counsel of the
Company, who shall be responsible for all legal matters relating to the Wireless Properties and New Acquisitions and will be nominated by the Supervisory Board. The 

  

 17 / 67 

	 	    	Officers shall not be Supervisory Directors or Managing Directors of the Company and may or may not be employees of the Company. The Shareholders agree that, for the positions of
Officers, there shall be necessarily appointed recognized professionals with a background and experience suitable to their duties and, whenever applicable, with proven technical/managerial skills. The appointment, suspension and removal of the
Officers shall take place in accordance with the local laws governing each of the Subsidiaries 

  

	 	(b)	In accordance with Section 2.3(c) the CEO of each Subsidiary shall be nominated by the Supervisory Board upon the binding nomination of the PT Group. The CFO shall be
nominated by the Supervisory Board upon the binding nomination of the TEF Group. 

  

	 	(c)	Each of the COO’s of each Subsidiary (other than Subsidiaries which have not been contributed by one or both of the Groups), shall be nominated as an Officer by the
Supervisory and upon the binding nomination of the Group that transferred the Contribution to the Company or, if the Contribution is transferred to the Company by both Groups, by the Group which controlled such Subsidiary (being the Group holding
the highest voting Interest in the Subsidiary at the time of transfer to the Company of the Contribution, or, if both Group’s have the same voting Interest, the Group which first acquired an Interest in the Subsidiary), the Company and the
Groups undertaking to procure that such nominated person be appointed as COO of the relevant Subsidiary. The COO shall report to the CEO. 

  

	 	(d)	The COO’s (and their replacement from time to time) of each Subsidiary which has not been contributed by one or both of the Groups, shall be nominated by the Managing
Board upon the prior approval of the Supervisory Board. 

  

	 	(e)	Each of the TEF Group and the PT Group may require the suspension or removal of an Officer nominated by that Group at any time and for any reason by delivering written notice
thereof to the Company and the other Group. 

  

	 	(f)	The CEO, the CFO and each COO appointed pursuant to Section 2.4(c), shall be suspended or removed upon the request of the Group that did not nominate it only if a Just
Cause occurs. 

  

	 	(g)	In the event of a vacancy in the position of CEO, the replacement CEO shall be nominated by the Supervisory Board upon the binding nomination of the PT Group. In the event of
a vacancy in the position of CFO, the replacement CFO shall be nominated by the Supervisory Board upon the binding nomination of the TEF Group. In the event of a vacancy in the position of a COO, the replacement COO shall be nominated by the
Supervisory Board upon the binding nomination of the relevant Group referred to in Section 2.4(c) above. In the event of a vacancy in the position of any other Officer, the replacement Officer shall be nominated by the Supervisory Board.

  

	 	(h)	Each of the TEF Group and the PT Group shall procure that each Supervisory Director appointed pursuant to its binding nomination and each representative of the Company at the
Board of Directors of the Subsidiaries appointed pursuant to its binding nomination, shall exercise its voting rights in the relevant meeting to allow each Group to exercise its rights under this Agreement. 

  

 18 / 67 

	2.5	Performance of the Officers 

  

	    	The Officers may be vested with the powers of management and representation of the Company as set forth by the Managing Board in written proxies to be deposited with the relevant
trade registry. The Managing Board shall procure that such powers shall be exercised in accordance with said powers of attorney, the provisions of this Agreement, the provisions of the Subscription Agreement, the resolutions of the Shareholders
Meetings, the Supervisory Board and of the Managing Board meetings, the Business Plan, the Articles of Association and applicable law. 

  

	2.6	Meetings of the Officers 

  

	    	The Officers shall hold meetings, on a regular basis, but at least once every 30 (thirty) days, and, on an extraordinary basis, whenever called by any of the Officers, it being
incumbent upon the CEO to establish the agenda for such meetings. 

  

	2.7	Subsidiary Governance  

  

	 	(a)	Subject to section 2.8(b)(iv), as long as each board of directors of the Subsidiaries consists of 9 (nine) directors, the Company will procure the appointment of 6 (six)
directors as its representatives at the boards of directors of the Subsidiaries (the “Representatives”), being that 3 (three) of these Representatives will be proposed by TEM and 3 (three) of them will be proposed by PT. Should the
board of directors of any Subsidiary consist of more than (9) nine directors, the Company shall procure the appointment of such number of Representatives at the board of directors of such Subsidiary, besides the abovementioned 6 (six)
Representatives, as determined by the Managing Board, upon the prior approval of the Supervisory Board. 

  

	 	(b)	Prior to any meeting of the Board of Directors of the Subsidiaries, the Managing Board will meet and deliberate about all matters included in the Agenda of the meeting of the
Subsidiary’s Board of Directors, upon the prior approval of the Supervisory Board. Each of the TEF Group and the PT Group shall procure that the Representatives (i) vote in accordance with the instructions by the Managing Board, which have
been approved by the Supervisory Board; and (ii) refrain from voting in relation to any matter if the Supervisory Board has not approved the voting instructions for the Representatives in advance. 

  

	 	(c)	In the event that a Representative does not follow the provisions set for in the aforementioned Section 2.7(b) both the Representative and the Shareholder who proposed
him, will be jointly responsible for all damages caused to the Company or to the other Shareholder. In addition, if such breach by a Representative of the provisions of Section 2.7(b) above occurred, the provisions of Section 15.7 below
shall apply. 

  

	 	(d)	The parties agree that (i) New Acquisitions and Wireless Properties shall not be required to be kept and maintained as separate legal entities, and (ii) New
Acquisitions and Wireless Properties may merge, consolidate or amalgamate, either between them or with any other Person, before or after the transfer to the Company of the Interest 

  

 19 / 67 

 acquired in the New Acquisition or Wireless Property, as the case may be, provided that, prior to
any of the same occurring and as a condition precedent thereto, the Supervisory Board shall approve such action in accordance with Section 2.3 above and the Parties, after a non-binding proposal submitted by the Supervisory Board, shall be
required to agree in each specific case on the appropriate adjustments to be made to the division of assets on liquidation of the Company in terms of Section 4.3 below and to the Put in Section 5.6 below). 
  

	2.8	Effects of Dilution on the Managing Board, Supervisory Board, Officers and Boards of Directors of the Subsidiaries 

  

	 	(a)	The Shareholders agree that the right of: 

  

	 	(i)	the TEF Group to nominate by binding nomination: 

  

	 	(A)	6 (six) members of the Supervisory Board; 

  

	 	(B)	2 (two) Managing Directors; 

  

	 	(C)	the CFO of the Subsidiaries; 

  

	 	(D)	the COO of certain subsidiaries as set forth in Section 2.4, above; and 

  

	 	(E)	3 (three) members of the Board of Directors of the Subsidiaries as set for in Section 2.7, and 

  

	 	(ii)	the PT Group to nominate by binding nomination 

  

	 	(A)	6 (six) members of the Supervisory Board; 

  

	 	(B)	2 (two) Managing Directors; 

  

	 	(C)	the CEO of the Subsidiaries; 

  

	 	(D)	the COO of certain subsidiaries as set forth in Section 2.4, above; and 

  

	 	(E)	3 (three) members of the Board of Directors of the Subsidiaries as set for in Section 2.7, 

  

	 	    	subject to Section 2.8(e), below, shall remain in full force until any Group is diluted as a consequence of a capital increase by the Company to an Interest in the Company
lower than 40% (forty percent) of the Company’s total issued and outstanding share capital, and shall continue to apply until an additional period of 6 (six) months has elapsed calculated from the later of (i) the date of such dilution or
(ii) the date that this Section 2.8 becomes effective. 

  

	 	(b)	Should the aforementioned 6 (six) month period elapse and the diluted Group fails to increase its Interest in the Company’s total issued and outstanding share capital,
pursuant to Section 6, below, to a level at or above 40% (forty percent) of the Company’s total issued and outstanding share capital, such diluted Group shall, within 15 (fifteen) days from the delivery of a written notice by the other
Group to the Company and the diluted Group: 

  

	 	(i)	Supervisory Board 

  

	 	    	Cause a proportionate number of the Supervisory Directors nominated by it to the Supervisory Board to resign by having such Supervisory Directors to deliver their resignation
letters to the Company (with a copy to the other Group), in which 

  

 20 / 67 

 case the Shareholder belonging to the diluted Group shall exercise its voting rights in the relevant
Shareholders Meeting to appoint the replacement Supervisory Directors nominated by binding nomination of the non-diluted Group. For purposes of the foregoing, the proportionate number of Supervisory Directors shall be calculated as follows, based on
the percentage of Company Shares which a Group holds in the total issued and outstanding share capital of the Company: 
  

			
	0 % up to 10 % minus 1 share:	  	no Supervisory Directors;
		
	10% up to 20 % minus 1 share:	  	2 (two) Supervisory Directors;
		
	20% up to 40 % minus 1 share:	  	4 (four) Supervisory Directors;
		
	40% up to and including 60%:	  	6 (six) Supervisory Directors;
		
	60 % plus 1 share up to and including 80 %:	  	8 (eight) Supervisory Directors;
		
	80 % plus 1 share up to and including 90%:	  	10 (ten) Supervisory Directors;
		
	90 % plus 1 share up to and including 100%:	  	12 (twelve) Supervisory Directors,
	
	(decimal amounts to be rounded up or down to the nearest whole number);

  

	 	(ii)	Managing Board 

  

	 	(A)	Cause a proportionate number of the Managing Directors nominated by it to the Managing Board to resign by having such Managing Directors to deliver their resignation letters to the
Company (with a copy to the other Group) in which case the Shareholder belonging to the diluted Group shall exercise its voting rights in the relevant Shareholders Meeting to appoint the replacement Managing Directors nominated by binding nomination
of the non-diluted Group. For purposes of the foregoing, the proportionate number of Managing Directors shall be calculated as follows, based on the percentage of Company Shares which a Group holds in the total issued and outstanding share capital
of the Company: 

  

			
	0 % up to 10 % minus 1 share:	  	no Managing Directors;
		
	10% up to 20 % minus 1 share:	  	1 (one) Managing Director;
		
	20% up to 40 % minus 1 share:	  	1 (one) Managing Director;
		
	40% up to and including 60%:	  	2 (two) Managing Directors;
		
	60 % plus 1 share up to and including 80 %:	  	3 (three) Managing Directors;
		
	80 % plus 1 share up to and including 90%:	  	3 (three) Managing Directors;
		
	90 % plus 1 share up to and including 100%:	  	4 (four) Managing Directors,
	
	(decimal amounts to be rounded up or down to the nearest whole number);

  

	 	(B)	Should the 6 (six) month period, as referred to under 2.8(a), above, lapse and the diluted Group fails to increase its Interest in the Company’s total 

 

 21 / 67 

 issued and outstanding share capital, pursuant to Section 6, below, to a level at or above 40%
(forty percent) of the Company’s total issued and outstanding share capital, the Managing Board shall adopt its resolutions by simple majority, in stead of by unanimity. The Shareholders shall procure to amend the Articles of Association
accordingly; 
  

	 	(iii)	Officers 

 Cause the CEO (in the case of the PT
Group) or the CFO (in the case of the TEF Group) (as the case may be), all of the COO’s nominated by the diluted Group, to resign from their offices, in which case the diluted Group agrees to take such action as is
necessary to appoint to those positions new Officers nominated by binding nomination of the non-diluted Group; 
  

	 	(iv)	Representatives 

 Cause a proportionate number of
Representatives nominated by it to the Board of Directors of the Subsidiaries to resign by having such Directors to deliver their resignation letters to the Company (with a copy to the other Group) in which case the Company shall exercise its voting
rights in the relevant corporate bodies of the Subsidiary to appoint the replacement Directors nominated by binding nomination of the non-diluted Group. For purposes of the foregoing, the proportionate number of Directors shall be calculated as
follows, based on the percentage of Company Shares which a Group holds in the total issued and outstanding share capital of the Company: 
  

			
	0 % up to 10 % minus 1 share:	  	no Directors ;
		
	10% up to 20 % minus 1 share:	  	1 (one) Director;
		
	20% up to 40 % minus 1 share:	  	1 (one) Director;
		
	40% up to and including 60%:	  	3 (three) Directors;
		
	60 % plus 1 share up to and including 80 %:	  	5 (five) Directors;
		
	80 % plus 1 share up to and including 90%:	  	5 (five) Directors;
		
	90 % plus 1 share up to and including 100%:	  	6 (six) Directors,
	
	(decimal amounts to be rounded up or down to the nearest whole number);

  

	 	(c)	If the diluted Group increases its Interest in the total issued and outstanding share capital of the Company to 50% (fifty percent) (but not less than 50% (fifty percent),
such diluted Group shall be entitled to restate such corporate governance rights as of the date its Interest in the Company’s total issued and outstanding share capital is so increased. 

  

	 	(d)	The Shareholders agree that this Section 2.8 shall become effective on the earlier of the following: 

  

	 	(i)	after the Balance Closing; and 

  

 22 / 67 

	 	(ii)	without detracting from Section 3.1 (b (i) of the Subscription Agreement, after any of the Balance Capital Contributions have been transferred to the Company by
only one of the Groups, provided that the relevant regulatory constraints have been removed and accordingly all the Balance Capital Contributions could have been transferred by both Groups to the Company. 

  

	 	(e)	Without detracting from the provisions as set forth in Sections 6.1, 6.2 and 6.3, below, the non-diluted Group may at its sole discretion decide to grant an additional period
to the diluted Group during which such diluted Group may maintain its corporate governance rights in accordance with Section 2. 

  

	2.9	Representation of the Company 

 Only (i) the
entire Managing Board acting in accordance with a resolution validly passed by it, and (ii) the Person or Persons duly empowered through a valid power of attorney approved by the Managing Board in writing; will have the authority to represent the
Company. 
  

	3.	SHAREHOLDERS MEETINGS AND RIGHTS 

  

	3.1	Shareholders Meetings 

 Shareholders Meetings shall
take place at the registered office of the Company in the Netherlands or at such other place as permitted by the Articles of Association. The Shareholders agree that an annual Shareholders Meeting shall be held within the 4 (four) months following
the closing of each fiscal year, but in any event prior to the earlier of the annual general meeting of any of the Shareholders following the closing of the same fiscal year, for the discussion, and adoption of the consolidated audited annual
accounts of the Company and for the discharge of the Directors from liability for their management over the last financial year. Furthermore, special Shareholders Meetings may be held following the request of any of the Groups for the replacement of
Supervisory and/or Managing Directors in accordance with Section 2.2.2. and 2.8.2(a), above, and whenever and insofar as the business of the Company so requires. 
  

	3.2	Call Procedure 

 Shareholders Meetings may be called
by the Chairman of the Supervisory Board directly or at the written request of any of the Shareholders. 
  

	3.3	Chairing of Shareholders Meetings 

 The Shareholders
Meetings shall be presided over by the Chairman of the Supervisory Board. In the event of absence or temporary impediment of the Chairman of the Supervisory Board, the Shareholders Meeting shall be presided over by the Vice-Chairman of the
Supervisory Board, and in his absence, by a person elected by the Shareholders in attendance. The secretary to the Shareholders Meetings shall be the person acting as secretary to the Supervisory Board, from time to time and in the absence or the
temporary impediment of such secretary, by a person as elected by the Shareholders in attendance. 
  

 23 / 67 

	3.4	Shareholder Decisions 

  

	 	(a)	Each Company Share shall have attached to it the right to cast one vote. 

  

	 	(b)	In order to maintain the spirit of a 50-50 (fifty-fifty) joint venture, the Shareholders agree that, subject to Section 3.5 below: 

  

	 	(i)	save as otherwise required by applicable law, all shareholders ́ resolutions, including those matters in Section 2.3(d)(i), above, which expressly provide for a
Shareholders ́ resolution or Shareholders ́ approval, shall require the consensual approval by all of the Shareholders; and 

  

	 	(ii)	without detracting from Section 3.4 (b) (i), above, the quorum for a Shareholders Meeting shall be 1 (one) Shareholder from each of the TEF Group and the PT Group,
represented by a duly authorised person, which may include a proxy; 

  

	 	(c)	Each Shareholder shall affirmatively vote so as to permit a Group to increase its Interest in the Company’s total issued and outstanding share capital pursuant to
Section 6.1, 6.2, and 6.3 hereto. 

  

	 	(d)	Each Shareholder shall exercise its voting rights in the corporate bodies of the Company in accordance with the Company Growth Principles, provided that, if the
Shareholders of a Group vote on a bona fide basis against the acquisition of an Interest in a New Acquisition and, subsequent thereto, in terms of an arbitration decision pursuant to Section 10 of the Subscription Agreement, it is determined
that said acquisition is within the Company Growth Principles, no penalty (as referred to in Section 15.7 below) shall attach to the relevant Group or any of the Shareholders within such Group who voted against the acquisition, provided further
that the Shareholders of said Group shall, and shall procure that the Supervisory Directors, Managing Directors of the Company and its Subsidiaries nominated by it shall, following the arbitration decision, vote in favour of the transfer to the
Company of the contribution of the relevant Interest in a New Acquisition, as applicable. 

  

	 	(e)	The Parties agree that each Shareholder shall have pre-emptive rights to subscribe for newly issued Company Shares (or securities convertible into or exchangeable for Company
Shares) in the proportion as may be required in order to maintain the same proportion of the Interest of each Shareholder in the voting and total issued and outstanding share capital of the Company immediately prior to any such issuance of new
Company Shares. 

  

	3.5	Effects of Dilution 

  

	 	(a)	         

  

	 	(i)	The requirement that the matters referred to in Section 3.4 (b) (i) must be approved by consensus and the quorum requirement set out in Section 3.4
(b) (ii) (collectively, the “Consensus Rule”), subject to Section 3.5 (d), below, shall remain in full force until any Group is diluted as a consequence of a capital increase by the Company to an Interest in the
Company lower than 40% (forty percent) of the Company’s total issued and outstanding share capital, and shall continue to apply until an additional period of 6 (six) months has elapsed calculated from the later of (i) the date of such
dilution, or (ii) the date that this Section 3.5 becomes effective. 

  

 24 / 67 

	 	(ii)	Should the diluted Group have failed within the aforesaid 6 (six)-month period to increase its Interest in the Company’s total issued and outstanding share capital
pursuant to Section 6, below, to a level at or above 40% (forty percent) of the Company’s total issued and outstanding share capital, then upon receipt of a written notice from the other Group the Consensus Rule shall no longer apply. In
such event, unless otherwise required by applicable law, (i) the matters referred to in Section 3.4.2(a) shall require the affirmative vote of a simple majority of votes cast, and (ii) the quorum for a Shareholders Meeting will be the
presence (in person or by proxy) of Shareholders representing a majority of the issued and outstanding share capital of the Company. 

  

	 	(iii)	Notwithstanding the provisions of Sections 3.5 (a) (i) and (ii), above, for as long as the PT Group and the TEF Group each hold an Interest of at least 10% (ten
percent) in the Company’s total issued and outstanding share capital (except if such decrease in the participation in the Company derives from a Transfer of Company Shares), any change in the purpose or scope of business of the Company
or any merger with any entity which is not a Wireless Business shall require the affirmative vote of at least 1 (one) Shareholder from each of the PT Group and the TEF Group, provided that the PT Group shall have no rights under this
Section 3.5 (a) (iii) during the period commencing on the date on which the PT Group is diluted to holding an Interest of less than 40% (forty percent) in the Company’s total issued and outstanding share capital and ending
on the date on which the PT Group Put is no longer exercisable with respect to such Dilution Event Below 40%. 

  

	 	(b)	If the diluted Group increases its Interest in the total issued and outstanding share capital of the Company to 50% (fifty percent), such diluted Group shall be entitled to
restate the Consensus Rule as of the date its Interest in the Company’s total issued and outstanding share capital is so increased. 

  

	 	(c)	The Shareholders agree that this Section 3.5 shall become effective on the earlier of the following: 

  

	 	(i)	after the Balance Closing; and 

  

	 	(ii)	without detracting from Section 3.1 (a) (i) of the Subscription Agreement, after any of the Balance Capital Contributions have been transferred to the Company
by only one of the Groups, provided that the relevant regulatory constraints have been removed and accordingly all the Balance Capital Contributions could have been transferred by both Groups to the Company. 

  

	 	(d)	Without detracting from the provisions as set forth in Sections 6.1, 6.2 and 6.3, below, the non-diluted Group may in its sole discretion decide to grant an additional period
to the diluted Group during which such diluted Group may maintain its corporate governance rights in accordance with Section 3. 

  

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	4.	CELLULAR CHAIRMEN DEADLOCKS, WISE PERSONS PROCEDURE AND LIQUIDATION 

  

	4.1	Cellular Chairmen Deadlocks 

  

	 	(a)	If, after (i) the holding of good faith negotiations and (ii) discussions between the Shareholders or the Directors (as the case may be) in at least 2 (two)
different meetings of the corresponding corporate body of the Company, any resolution to be passed or approval to be given by the Shareholders, or any resolution to be passed or proposal to be made by the Supervisory Board or the Managing Board (as
the case may be) constituting a Cellular Chairmen Issue (as defined below), results in a deadlock (a “Cellular Chairmen Deadlock”), which deadlock shall also be considered to occur if the Shareholders Meeting, the Supervisory Board
or the Managing Board cannot take place due to the absence of a quorum, then, at the request of any Shareholder, the Shareholders shall observe the following procedure to resolve such Cellular Chairmen Deadlock (the “Deadlock Resolution
Procedure”): 

  

	 	(A)	Within 15 (fifteen) days from the date the Cellular Chairmen Deadlock occurred, the Shareholders shall refer such Cellular Chairmen Deadlock to the Chairmen of TEM and PT
Móveis (the “Cellular Chairmen”), and shall cause the Cellular Chairmen to meet and hold good faith discussions to attempt to find a solution and to resolve the Cellular Chairmen Deadlock within the 15 (fifteen) days period
thereafter, after consulting with their respective Group nominees in the Supervisory Board. In holding such discussions, the Cellular Chairmen shall always make their determination based on the best interests of the Company in achieving and in
compliance with the Company Growth Principles, and the basic principles underlying the ultimate goals of this Agreement and the Subscription Agreement. 

  

	 	(B)	In the event the Cellular Chairmen are unable to resolve the Cellular Chairmen Deadlock within said 15 (fifteen) days period, the Cellular Chairmen Deadlock will be submitted by the
Shareholders and the Cellular Chairmen to the Chairmen (the “Group Chairmen”) and the Chief Executive Officers (the “Group CEO’s”) of Telefónica, and Portugal Telecom, who shall meet to attempt to find a
final solution and resolve the Cellular Chairmen Deadlock. In their attempt to find a solution for the Cellular Chairmen Deadlock, the Group Chairmen and the Group CEO`s shall always make their determination based on the best interests of the
Company in achieving and in compliance with the Company Growth Principles, and the basic principles underlying the ultimate goals of this Agreement and the Subscription Agreement. 

  

	 	(b)	In the event that, notwithstanding the efforts made by the Shareholders, the Cellular Chairmen, the Group Chairmen and the Group CEO’s, a Cellular Chairmen Deadlock
remains unresolved for 90 (ninety) days calculated from the date on which the occurrence of such Cellular Chairmen Deadlock as set forth in Section 4.1.(a) has been 

  

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 notified by one of the Groups to the other Group, each Group shall be entitled during the 15 (fifteen)
Business Days following the expiration of the aforesaid 90 (ninety) days period to (i) declare the existence of an irreconcilable difference with the Shareholders of the other Group (a “Cellular Chairmen Deadlock Event”), and
(ii) at its option (a) propose in writing to the other Group the dissolution and liquidation of the Company, or (b) submit the Cellular Chairmen Deadlock Event to the Wise Persons in accordance with Section 4.2 below. 

 

	4.2	Wise Persons Procedure 

  

	 	(a)	If one of the Groups proposes to the other Group the dissolution and liquidation of the Company in accordance with Section 4.1 and the other Group so expressly accepts
in writing, then the provisions set forth in Section 4.3 below shall apply. However, if (i) the other Group does not accept in writing the dissolution and liquidation of the Company within 15 (fifteen) Business Days from the receipt of the
notice delivered to it in this respect by the other Group, or (ii) a Group proposes to submit the Cellular Chairmen Deadlock Event to the Wise Persons then, at the request of either Group, the Company shall submit the matter to a committee of 3
(three) persons (the “Wise Persons”) for binding determination between the proposals submitted by the Groups. 

  

	 	    	The Wise Persons shall comprise of three persons, each of whom shall be required to be highly regarded and experienced in the wireless telecommunications industry. The Wise Persons
shall be nominated as follows: 

  

	 	(i)	Each Group shall have the right to nominate one of the Wise Persons, such nomination to be notified to the other Group within 15 (fifteen) Business Days after expiry of the
period referred to in Section 4.1(b), or 4.2(a) above (as the case may be), which notification shall include confirmation by the nominee to act as a Wise Person; 

  

	 	(ii)	If a Group fails to deliver such notification within the aforesaid period, the other Group shall have the right to nominate a Wise Person in lieu of the Wise Person that
would otherwise have been nominated by first mentioned Group; and 

  

	 	(iii)	The two Wise Persons nominated pursuant to this Section 4.2(a), shall, within 10 (ten) Business Days of the last such Wise Person being nominated, by agreement nominate
a third Wise Person. 

  

	 	(b)	The Wise Persons shall make their determination by majority vote, each Wise Person having 1 (one) vote. 

  

	 	(c)	The fees to be charged by the Wise Persons shall be discussed with and agreed to by the Groups in advance. The Wise Persons shall be required to include in their
determination, a ruling on which Group should pay (which portion of) the fees, provided that, to the extent possible, the Wise Persons shall apply the rule that, having regard to the proposal made by each of the Groups and Directors nominated
by such Group, the unsuccessful Group pays the fees. 

  

	 	(d)	The Wise Persons shall be required to act impartially, expeditiously (but in any event within 15 (fifteen) Business Days of being requested to determine the matter), and in

  

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 the best interests of the Company and the Subsidiaries, having due regard to the proposal made by each
of the Groups and Directors and between the proposals submitted to them by the Groups. The Wise Persons shall not have the authority (i) to take any other decision or (ii) to deviate from such proposals, or (iii) to decide that the
Company shall be dissolved and liquidated. 
  

	 	(e)	The Parties agree that the determination of the Wise Persons shall be final and binding on the Parties and each Party shall duly effect and/or procure that such determination
is duly effected by the Company and relevant Subsidiaries. 

  

	 	(f)	The Parties agree that the proposals or resolutions that shall comprise a “Cellular Chairmen Issue” shall only be those proposals or resolutions involving an
amount in excess of Euro [***] provided that, to the extent that any of such decisions relate to the acquisition of an Interest in a New Acquisition, the acquisition of a Further Interest in a Wireless Property, or the increase by a Group of
its Interest in the Company’s total issued and outstanding share capital pursuant to Section 6, the aforesaid Wise Person procedure shall not apply. 

  

	4.3	Liquidation of the Company 

  

	 	(a)	Should a Cellular Chairmen Deadlock Event occur, and should both Groups agree in writing on the dissolution and liquidation (the “Liquidation”) of the
Company as set forth above, all the Shareholders shall take all such corporate actions, including exercising their voting rights in favour of the Liquidation, which may be required or convenient for the implementation thereof.

  

	 	(b)	Subject to applicable laws and subject to any adjustments to the [***] pursuant to Section 1.6.3 of the Subscription Agreement and Sections 2.3(c) and 2.7(d) above, the
Parties shall use their best efforts to procure that each Group receives, as Liquidation distribution: 

  

	 	(i)	In case of a 50% - 50% (fifty -fifty percent) Interest of each Group in the Company at the time of initiating the Liquidation: (a) [***] Interests in Wireless Properties
[***] as well as [***] in any Wireless Property [***] before the date hereof, which was [***] and (b) [***] held by the Company. 

  

	 	(ii)	If the Liquidation is initiated at a time when the Interests of the Groups in the Company are not 50% - 50% (fifty – fifty percent) and the Balance Capital Contributions
have still not been transferred to the Company: the [***] to which the Parties [***] pursuant to the provisions of the preceding Section 4.3(b)(i) shall [***] to each Group. 

  

	 	(iii)	If the Liquidation is initiated at a time when the Interests of the Groups in the Company are not 50% - 50% (fifty – fifty percent), and the Balance Capital
Contributions have been transferred by both Groups to the Company, then: 

  

	 	(A)	[***] in Wireless Properties [***] Group to the Company [***], as well as [***] Interest in any Wireless Property[***]; 

  

	 	(B)	50% (fifty percent) [***] other than those referred to in [***]; 

  

	 	(C)	[***] Interests in [***] the relevant Group to the Company that have [***]; 

  

	 	(iv)	Such [***] of the [***] not referred to in Section [***], as the case may be, as corresponds with such [***]. 

  

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	 	(c)	Any [***] the [***] to each Group pursuant to [***], and [***] in the Company will be [***]. Both the [***] the assets [***] to, and [***] of the Interest [***] the Company
by each Shareholder will be [***] to an [***] made at the time of [***] the [***] in accordance with Sections 1.4 and 1.5 of the Subscription Agreement. 

  

	 	(d)	In addition to the right to a portion of the assets in the Company, the TEF Group will have a call option to purchase 50% (fifty percent) of that portion of the Global
Telecom Interest still not transferred to the Company, as set forth in Section 1.6.1 of the Subscription Agreement. 

  

	 	(e)	The provisions of this Section 4.3 shall apply mutatis mutandis to any other liquidation of the Company. 

  

	 	(f)	Each Group shall fulfil all legal requirements which may be applicable in the event of a liquidation of the Company (including but not limited to any requirements imposed by
regulatory agency, including, ANATEL, CVM, or any other Governmental Authority with jurisdiction over the Company or the Subsidiaries). The Parties undertake to use their reasonable efforts to fulfil any such requirements and to obtain any such
necessary approval as soon as practicable. 

  

	5.	TRANSFER OF COMPANY SHARES 

  

	5.1	Transfer 

 No Shareholder belonging to one Group (a
“Transferring Party”) may Transfer all or part of its Company Shares (the “Offered Shares”), or agree to do so, to a Third Party (a “Third Party Sale”), without first offering such Offered Shares to
the Shareholders belonging to the other Group (collectively the “Non-Transferring Party”), who shall have the option of (i) exercising a right of first refusal to acquire all but not less than all of the Offered Shares (the
“Right of First Refusal”) or (ii) a right to co-sell the Non-Transferring Party’s own Company Shares in the same proportion as the Offered Shares represents to the Transferring Party’s entire Interest in the Company
(the “Tag-Along Right”) (except as provided in Section 5.2 below). Such offer shall be effected in compliance with the procedures set forth in this Section. Any transfer made in violation of the provisions of this
Section 5 shall be null and void and of no effect against the Company or the other Shareholders. 
  

	5.2	Permitted Transferees; Transfers in the Context of Consolidation 

  

	 	(a)	Notwithstanding anything in this Agreement to the contrary, each Shareholder of a Group may freely transfer all or part of its Company Shares to a Permitted Transferee
without the consent of the Shareholders in the other Group and without compliance with the Right of First Refusal provisions hereof and the Tag-Along Right, provided that the Permitted Transferee shall, as a condition for any such transfer,
have agreed in writing to be bound by the terms of this Agreement and the Subscription Agreement, and to be jointly and severally liable for any debt, liability or obligation of the Transferring Party under this Agreement or the Subscription
Agreement, irrespective of whether such obligation, debt or liability arises prior or subsequent to any such transfer. 

  

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	 	(b)	It is acknowledged by the Groups that the trends in the mobile telecommunication sector are for the establishment of global mobile companies. The Parties are willing to
discuss such combinations in the future with third parties, while reserving the right to contribute or not contribute their Company Shares to any combined entity. It is hereby agreed that the Right of First Refusal and Tag-Along Right referred to in
this Section 5 shall not be applicable if the transfer of the Company Shares by either Group has been agreed previously by the Groups and forms part of a consolidation process in the mobile telecommunication industry. 

 

	5.3	Indirect Transfers 

 Each Shareholder acknowledges,
agrees and shall procure that the provisions of Sections 5.1, 5.2, 5.4, 5.7, and 5.9, shall apply, mutatis mutandis, to any Transfer of any Interest held by either Group in any Person (irrespectively whether such Person is also a
Shareholder), the assets of which consist, now or at the time of the transfer, exclusively or virtually exclusively of, directly or indirectly, Company Shares. 
  

	5.4	Right of First Refusal 

  

	 	(a)	Prior to the proposed Third Party Sale, the Transferring Party shall deliver a written notice to the Non-Transferring Party and the Company, indicating the terms of the
irrevocable offer by the Third Party (the “Third Party Offer”) which shall contain, at least, the following: (i) the total number of Offered Shares; (ii) the name, address and nationality of the Third Party and of its
direct and indirect controlling shareholders; (iii) the consideration per Company Share; (iv) the payment conditions, (v) the means of payment, which in any event must be cash and/or marketable securities and/or shares listed on an
internationally recognised stock exchange; and (vi) any other material terms and conditions. This notice (the “Transfer Notice”), shall have the effect of an irrevocable offer to sell and transfer the Offered Shares to the
Non-Transferring Party. 

  

	 	(b)	Within 3 (three) Business Days from the receipt by the Non-Transferring Party of the Transfer Notice, it may deliver a notice to the Transferring Party (the “Initial
Non-Transferring Party Offer”) in which it shall include: 

  

	 	(i)	the payment conditions and the means of payment under which it proposes to exercise its Right of First Refusal, and/or 

  

	 	(ii)	in the event the Third Party Offer and/or the Initial Non-Transferring Party Offer contemplates a total or partial non-cash consideration or a deferred payment, or if the
Non-Transferring Party is willing to exercise its Tag-Along Right a list of 3 (three) internationally recognized investment banks and/or 

  

	 	(iii)	an indication as to whether or not it wishes to transfer to the Third Party the number of Company Shares equal to the number of Offered Shares as a result of the exercise of
the Tag-Along Right in terms of this Section 5.4 (the “Tag Along Shares”), 

 provided that such
Initial Non-Transferring Party Offer shall not be considered as a binding offer and shall not be understood as an exercise of its Right of First Refusal or of the Tag-Along Right. 
  

 30 / 67 

	 	    	The Initial Non-Transferring Party Offer may contain an offer to exercise the Right of First Refusal in (i) cash and/or PT shares in the event the Non-Transferring Party is a
member of the PT Group, or (ii) in cash and/or Telefónica shares and/or TEM shares in the event the Non-Transferring Party is a member of the TEF Group. 

  

	 	(c)	Within 2 (two) Business Days from the receipt of the Initial Non-Transferring Party Offer, the Transferring Party shall communicate in writing (the “Election
Notice”) to the Non-Transferring Party the name of 1 (one) investment bank selected from the list of 3 (three) investment banks included in the Non-Transferring Party Offer, which shall determine, within 10 (ten) Business Days from the
execution of the relevant Mandate Letter: 

  

	 	(A)	in the event the Initial Non-Transferring Party Offer contains an offer for the exercise of the Right of First Refusal: 

  

	 	(i)	whether or not the Third Party Offer and the Initial Non-Transferring Party Offer are [***]; 

  

	 	(ii)	in the event that the Initial Non-Transferring Party Offer [***] than the Third Party Offer, the value [***], and 

  

	 	(iii)	In the event that the Initial Non-Transferring Party Offer [***] Third Party Offer, [***] to the Initial Non-Transferring Party Offer in order to [***] to the Third Party
Offer, which, if the Initial Non-Transferring Party Offer contemplates [***], at the option of the Non-Transferring Party, [***] of the consideration or to the [***] of the consideration; 

  

	 	    	(the report issued by the investment bank with respect to paragraphs (i), (ii) and (iii) above referred to as the “Right of First Refusal Valuation”); and

  

	 	(B)	in the event the Initial Non-Transferring Party Offer contains the intention of the Non-Transferring Party to exercise the Tag-Along Right, the value of the Company as of the
date of delivery of the Transfer Notice (in accordance with the principles and criteria set forth in Exhibit I of the Subscription Agreement) and the percentage that the Third Party Offer, if made with respect to 100% of the total outstanding share
capital of the Company, would represent over the value of the Company in accordance with such valuation (the “Tag-Along Valuation”). 

  

	 	(d)	As soon as practicable, but in no event later than 2 (two) Business Days after the receipt of the Election Notice, the Non-Transferring Party shall execute the relevant
Mandate Letter and shall otherwise correspond with the elected investment bank (the Transferring Party and the other Shareholders of its Group [***] to [***] with [***]). The fees of the elected investment bank shall be paid by the Non-Transferring
Party, but the Transferring Party shall reimburse the Non-Transferring Party such fees. In the event the Transferring Party does not deliver an Election Notice or otherwise fails to 

  

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	 	    	select one investment bank from the list of 3 (three) investment banks included in the Non-Transferring Party Offer within 2 (two) Business Days from the receipt of such Initial
Non-Transferring Party Offer, the Non-Transferring Party shall execute the relevant Mandate Letter with any of the 3 (three) Banks included in the Non-Transferring Party Offer. In any event, the relevant Mandate Letter shall state:

  

	 	(A)	with respect to the Right of First Refusal Valuation, that the investment bank [***] the guidelines and criteria referred to in Section 1.5 of the Subscription
Agreement, but the valuation shall be based [***] and the terms and conditions of the Third Party Offer and of the Initial Non-Transferring Party Offer, and that the same criteria shall be applied to both such offers; 

  

	 	(B)	with respect to the Tag-Along Valuation, an indication to follow the provisions of Section 1.5 of the Subscription Agreement, the [***] and the [***] set forth in [***]
of the Subscription Agreement. 

  

	 	(e)	The Non-Transferring Party may exercise its Right of First Refusal or the Tag-Along Right, by delivery of a written notice to the Transferring Party (the “Acceptance
Notice”), within 3 (three) Business Days following the receipt of the Right of First Refusal Valuation and the Tag-Along Valuation (or if the Non-Transferring Party Offer did not include the list of investment banks in accordance with
Section 5.4.(b)(ii)) (the “Acceptance Period”), provided, however, that the Tag-Along Right may only be exercised by the Non-Transferring Party if the circumstances set forth in Section 5.5 below occur.

  

	 	(f)	In the event the Non-Transferring Party does not deliver the Acceptance Notice within the Acceptance Period, it will be considered that it does not desire to exercise its
Right of First Refusal nor its Tag-Along Right, whether or not it has delivered an Initial Non-Transferring Party Offer. 

  

	 	(g)	In the event of exercise of the Right of First Refusal by the delivery of the Acceptance Notice, the Initial Non-Transferring Party Offer, [***] as set forth above [***] the
Initial Non-Transferring Party Offer [***] Third Party Offer, shall be referred hereinafter to as the “Definitive Non-Transferring Party Offer”. The Acceptance Notice shall be binding and irrevocable. 

  

	 	    	The consummation of any transfer of the Offered Shares pursuant to Section 5.4(g) above shall occur within the period and in accordance with the terms and conditions provided
in the Definitive Non-Transferring Party Offer, provided that the Definitive Non-Transferring Party Offer shall [***] to the Non-Transferring Party of the Third Party Offer, unless the Third Party Offer contemplates a longer period for the
payment, in which event the Definitive Non-Transferring Party Offer may equalize the term contained in the Third Party Offer. 

  

	 	(h)	In the event of exercise of the Tag-Along Right by the delivery of the Acceptance Notice, such Acceptance Notice shall be binding and irrevocable, and the consummation of the
transfer of the Tag-Along Shares pursuant to this Section 5.4(h) shall occur within the period and in accordance with the terms and conditions provided in the Transfer Notice. 

  

 32 / 67 

	 	(i)	If within the Acceptance Period, the Transferring Party has not received the Acceptance Notice in accordance with Section 5.4.(e) above, the Transferring Party shall
transfer all, but not less than all, the Offered Shares to the Third Party in accordance with the terms and conditions of the Transfer Notice. 

  

	 	(j)	If after receipt of an Acceptance Notice in accordance with Section 5.4.(e) above, the Non-Transferring Party fails (other than as a result of force majeure or
the Transferring Party’s own actions or omissions) to (x) consummate the acquisition of the Offered Shares in accordance with the terms and conditions provided for in the Definitive Non-Transferring Party Offer; or (y) consummate the
transfer of the Tag-Along Shares in accordance with the terms and conditions provided for in the Transfer Notice; then the Transferring Party will be free to transfer all, but not less than all, the Offered Shares to the Third Party in accordance
with the terms and conditions of the Transfer Notice. Such transfer of the Offered Shares to the Third Party must be consummated within twenty (20) days from the expiration of the Acceptance Period. 

  

	 	(k)	If the transfer to a Third Party by the Transferring Party is not consummated within the time period set forth in Sections 5.4.(i) and 5.4.(j) above, the Transferring Party
may not transfer any Company Shares without repeating the procedures set out in this Section 5.4. 

  

	 	(l)	Notwithstanding anything to the contrary contained in this Agreement, in no event shall a Transferring Party have any liability (except to reimburse cost in accordance with
this Section) to the Non-Transferring Party in the event that the sale and transfer of the Offered Shares and the Tag Along Shares contemplated pursuant to this Section 5.4 is not consummated provided the Transferring Party has not breached its
obligations under this Section 5.4, and provided further that such Transferring Party has not consummated the Third Party Sale. In any event, if the Third Party decides not to acquire the Tag-Along Shares tendered by the Non-Transferring Party
in exercise of its Tag-Along Right, the Transferring Party shall not Transfer to the Third Party the Offered Shares, and the Transferring Party shall reimburse the Non-Transferring Party for any cost incurred by it in connection with the proposed
sale. 

  

	 	(m)	In the event the Initial Non-Transferring Party Offer [***], such Initial Non-Transferring Party Offer shall include a list of 3 (three) internationally recognized investment
banks, among which the Transferring Party shall elect 1 (one) bank. In the event the Non-Transferring Party exercises its Right of First Refusal, (i) [***] in terms of the Definitive Non-Transferring Party Offer, shall be delivered to [***],
and (ii) any transaction [***] by the Non-Transferring Party [***] exercise of its Right of First Refusal, shall be [***] the aforesaid investment bank in compliance with the terms and conditions, if any, provided for in the Initial
Non-Transferring Party Offer. [***] be borne by the Transferring Party, provided, however, that a [***], to be borne by the Non-Transferring Party, may be agreed between the Non-Transferring Party and the aforesaid investment bank, provided further
that [***] delivered by the Non-Transferring Party as payment for the exercise of its Right of First Refusal, being stable over time 

  

 33 / 67 

	 	(n)	Notwithstanding the periods set forth in this Section 5.4 for the consummation of any transfer of Company Shares (either to a Third Party or to the Non-Transferring
Party), in the event the relevant transfer of shares is subject to the prior (i) fulfilment of legal or regulatory constraints, and/or (ii) approval by any regulatory agency (including, without limitation, ANATEL, CVM or any other
Governmental Authority with jurisdiction over the Company and the Subsidiaries), the time period during which such transfer shall be consummated shall be extended until the expiration of 5 (five) Business Days after such requirements have been
fulfilled and/or all such approvals shall have been received. In connection with the consummation of the transfer as contemplated herein, the involved parties shall deliver to each other all documents reasonably required to be executed in connection
with the transfer of the Offered Shares. 

  

	 	(o)	At the sole and exclusive option of the Non-Transferring Party, the exercising of such option to be notified in writing to the Transferring Party (the
“Notification”) within the Acceptance Period, the validity of a Third Party Sale involving the sale of the entire Interest of one of the Groups in the Company shall be expressly conditional upon the execution of an agreement by the
Third Party by virtue of which the Third Party shall assume all rights and obligations of the Transferring Party under this Agreement and the Subscription Agreement concerning the Transferring Party as a shareholder of the Company (the
“Assignment Agreement”), with the exception of the representations, warranties covenants and indemnities, in which event the provisions set forth in Section 11.1(iii) bellow shall apply, such condition being construed as a
condition precedent, so long as the execution is not evidenced. In the event of a Third Party Sale involving only a portion of the entire Interest of one of the Groups in the Company, the voting rights of both Groups will be immediately and
automatically syndicated and, therefore, both Groups undertake in such event to exercise their voting rights in the Company in accordance with the instructions given by the Group holding a higher number of Company Shares. In this event, this
Agreement will remain in force an effect exclusively between the two Groups, provided that any provisions of this Agreement contrary to the aforementioned syndication of voting rights or which could prevent the effectiveness of such
syndication, shall be considered null and superseded by such syndication of votes. 

  

	5.5	Tag-Along Right 

  

	    	The Tag-Along Right may only be exercised by the Non-Transferring Party if (i) the Offered Shares grant to its holder 50% or more of the voting rights in the Company in
accordance with this Agreement; and (ii) if the Tag-Along Valuation determines that the Third Party Offer (if made with respect to 100% of the total outstanding share capital of the Company) [***]. Notwithstanding the above, in the event of a
series of sales to the same Third Party, to Affiliates of such Third Party or to any other Person acting in concert with such Third Party, such series of sales shall be considered as a single transaction for purposes of Section 5.4 above.

  

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	5.6	Conditional Put 

  

	 	(a)	If there is a Change of Control relating to a Group, the other Group shall have the right to put (the “Put”) all but not less than all of the Company Shares
held by it to any of the Shareholders being part of the Group which is the subject of the Change of Control (the “Target Shareholder”) at a value determined by an Independent Valuation. The payment for the Company Shares under this
Put shall be made, at the option of the Group exercising the Put, either: 

  

	 	(i)	in cash; or 

  

	 	(ii)	subject to the applicable laws and regulations and subject to any adjustments pursuant to Section 1.6.3 of the Subscription Agreement and Sections 2.3(c) and 2.7
(d) above, in kind [***] or 

  

	 	(iii)	in kind, [***] Section 5.6(a)(ii)(A), or (y) [***] in Section 5.6 (a)(ii)(A) and Section 5.6(a)(ii)(B), or (z) [***] Section 5.6(a)(ii)(A),
Section 5.6(a)(ii)(C) and Section 5.6(a)(ii)(D), 

  

	 	    	provided that, in the event that the Put is exercised while the Balance Capital Contributions have not been transferred to the Company due to regulatory restraints, the Group
exercising the Put shall be entitled to receive, under Section 5.6(a)(ii)(B) above, [***] of the [***] solely by any one of the Groups and not balanced by the other Group; and in such case the provisions of Section 5.6(iii) shall be
construed and applied accordingly. 

  

	 	    	Payment of the price defined under Section 5.6(a)(ii) or (iii) above due to the Group exercising the Put will be combined with a cash settlement for the difference between
[***]. The value of the Company and of each of its assets will be determined by an Independent Valuation in accordance with Sections 1.4 and 1.5 of the Subscription Agreement. 

  

	 	(b)	The Target Shareholder acknowledges and expressly agrees that, if it fails to structure otherwise the fulfillment of its obligation hereunder in favour of the Group
exercising the Put, the Target Shareholder [***] the Company, and the Company [***] Target Shareholder, [***]. The Target Shareholder [***]. The Target Shareholder shall indemnify and hold harmless the Company and the Group exercising the Put
against any and all costs and Taxes incurred by the Company or said Group pursuant to this Section 5.6. 

  

	 	(c)	In addition to the settlement of the obligations arising out of the exercise of the Put, TEF Group will have a call option to purchase up to 50% (fifty percent) of that
portion of the Global Telecom Interest still not transferred to the Company as a Contribution, as set forth in Section 1.6.1 of the Subscription Agreement. 

  

	 	(d)	The Put can be exercised by written notice delivered to the Target Shareholder within 6 (six) months from the date on which the other Group becomes aware of the relevant
Change of Control. The consummation of any transfer of the relevant Company Shares pursuant to Section 5.6(a) above shall occur as promptly as practicable but in no event 

  

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	 	    	later than (i) 30 (thirty) days after the delivery of the Independent Valuations in case the Group exercising the Put elected payment in cash, and (ii) 60 (sixty) days
after the delivery of the Independent Valuations in case the Group exercising the Put elected payment in kind, at the time and place as may be agreed upon by the Target Shareholder and the Group exercising the Put; provided that if such
transfer is subject to the prior (i) fulfilment of legal or regulatory requirements, and/or (ii) approval by any regulatory agency (including, without limitation, ANATEL, CVM or any other Governmental Authority with jurisdiction over the
Company and the Subsidiaries), the time period during which such transfer may be consummated shall be extended until the expiration of 5 (five) Business Days after all such requirements have been fulfilled and/or such approvals shall have been
received. In connection with the consummation of the transfer as contemplated herein, the involved parties shall deliver to each other all documents reasonably required to be executed in connection with the transfer of the relevant Company Shares.
The Parties undertake to use their reasonable efforts to fulfil any such requirements and to obtain any such necessary approval as soon as practicable. 

  

	5.7	Pre-emptive Rights 

  

	    	The same rules provided for in this Section 5 shall be applicable mutatis mutandis to transfers, by any Shareholder of a Group, of its pre-emptive rights for the
subscription of new Company Shares, provided that the periods for the exercise of the Right of First Refusal or the Tag-Along Right with respect to the pre-emptive rights for new Company Shares shall be the following: (i) the Transfer
Notice must be delivered to the Non-Transferring Party within 5 (five) Business Days from the approval of the capital increase and must contain the number of Offered Shares subject to the pre-emptive rights, the selling price and the other
conditions of the sale and the name and complete identification of the Third Party and of its direct and indirect controlling shareholders, and the agreement by the Third Party to increase the Third Party Offer so as to permit the Non-Transferring
Party to sell to the Third Party its pre-emptive rights for the subscription of new Company Shares as a result of the exercise of the Tag-Along; (ii) the Acceptance Period shall be 5 (five) Business Days from the effective receipt of the
Transfer Notice, and should the above mentioned period elapse without the Non-Transferring Party expressing its intention in a written notice delivered to the Transferring Party, the offer shall be deemed not to have been accepted; and
(iii) within 3 (three) Business Days from the effective receipt of the Acceptance Notice, the acquisition of all offered pre-emptive rights shall be completed. Any decision taken by the Non-Transferring Party, will be irrevocable and binding
upon such Non-Transferring Party. 

  

	    	Upon the expiration of the period mentioned in Section 5.7(a)(ii) above without the Non-Transferring Party exercising its Right of First Refusal or the Tag-Along Right with
respect to the pre-emptive rights of the offering Shareholder, such rights may be assigned to the Third Party who may exercise them under the same conditions of the offer made to the Non-Transferring Party pursuant to such item until the end of the
term for the exercise of the pre-emptive right established by the relevant Shareholders Meeting. 

  

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	5.8	Tax Efficiency 

  

	    	Any transfer as provided for in this Section 5 shall be made in the most tax efficient manner vis-à-vis the Company and the Non-Transferring Party, or the Group
exercising the Put (as the case may be). 

  

	5.9	Encumbrance of Company Shares 

  

	    	Except with the prior written consent of the Shareholders in the other Group, no Shareholder shall create, or permit the creation of, any lien on, pledge, option, charge, debt,
restriction, security interest, demand or other encumbrances of whatsoever nature and howsoever incurred, whether voluntarily or involuntarily, in respect of any of its or any other Shareholder in its Group’s Company Shares. Without detracting
from the generality of the foregoing, a Shareholder shall not have the right to vest the voting rights in any Company Shares in any pledgee or usufructuary of such Company Shares. 

  

	5.10	Transfer restriction in Articles of Association, Exercise of voting rights 

  

	    	In order to achieve that no transfer of Company Shares is made in breach of any provision of this Section 5, the Shareholders agree that the Articles of Association shall
provide for the unanimous prior approval of the Shareholders being required for any transfer of Company Shares. For the avoidance of doubt it is expressly agreed that each Shareholder shall exercise its voting rights on the Company Shares in such a
manner as to allow the other Shareholders to exercise their rights under this Section 5, provided that such other Shareholders have complied with the relevant provisions of this Section 5. 

  

	6.	DILUTION 

  

	6.1	Dilution 

  

	    	Without prejudice to the provisions of Sections 2 and 3 above concerning the effects of dilution on the corporate governance rights, the provisions of this Section 6 shall only
apply after the Balance Closing. The total direct and indirect Interest of any Group (a “Reduced Shareholder”) in the Company’s total issued and outstanding share capital that does not reach, or is reduced to less than, 50% (fifty
percent) of the Company’s total issued and outstanding share capital as a consequence of a capital increase by the Company will be referred to as the “Diluted Interest”). 

  

	6.2	Diluted Interest Between 50% and 40% 

  

	 	(a)	In the event that as a consequence of a capital increase by the Company the Diluted Interest is less than 50% (fifty percent) but at or above 40% (forty percent) of the
Company’s total issued and outstanding share capital (the “Dilution Event Above 40%”), the Reduced Shareholder shall have the right to transfer Additional Capital Contributions to the Company, so as to cause such Reduced
Shareholder’s total 

  

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	 	    	Interest to be increased to 50% (fifty percent) of the total issued and outstanding share capital of the Company, provided that such Additional Capital Contributions shall be
transferred to the Company not later than 12 (twelve) months from the occurrence of the relevant Dilution Event Above 40%. 

  

	 	(b)	For purposes of determining the total amount of the Additional Capital Contributions required under Section 6.2(a), the Shareholders agree that such total amount will be
equivalent to the value of (that portion of) the Contribution having caused the dilution, as determined in the Contribution Valuation, as set forth in the Subscription Agreement (the “Locked-up Price”), provided that such
Locked-up Price shall only be valid if the increase to the agreed-upon 50% (fifty percent) Interest is consummated within the 6 (six)-month period following the Dilution Event Above 40%. If the increase to the agreed-upon 50% (fifty percent)
Interest is consummated later than 6 (six) months after the Dilution Event Above 40%, but in any event prior to expiry of the period of 12 (twelve) months after the occurrence of such Dilution Event Above 40%, the Shareholders agree that the
Locked-up Price shall be accrued with the Cost of Carrying. 

  

	 	(c)	In any case, if the value of the Additional Capital Contribution transferred to the Company under Section 6.2(a) exceeds the aggregate nominal value of the Company
Shares issued in respect of such Contribution, then such difference shall be credited to the General Share Premium Reserve. 

  

	6.3	Diluted Interest Below 40% 

  

	 	(a)	In the event that as a consequence of a capital increase by the Company the Diluted Interest is less than 40% (forty percent) of the Company’s total issued and
outstanding share capital (the “Dilution Event Below 40%”), the Reduced Shareholder shall have the right to transfer to the Company Additional Capital Contributions at one or more Additional Closings, so as to cause the Reduced
Shareholder’s total Interest to be increased to: 

  

	 	(i)	at least 40% (forty percent) (and not less than forty percent), but in any case to no more than 50% (fifty percent), of the total issued and outstanding share capital of the
Company, in which case such Additional Capital Contributions shall be transferred to the Company no later than 6 (six) months from the occurrence of the Dilution Event Below 40% . In this case, the Shareholders agree that the Reduced Shareholder
shall transfer to the Company as a Contribution an amount equal to the relevant portion of the Locked-up Price in order to return to an Interest of at least 40% (forty percent) of the total issued and outstanding share capital of the Company; or

  

	 	(ii)	in the event that the increase set forth in Section 6.3(a)(i) above shall not occur, 50% (fifty percent) (and not less or more than fifty percent) of the total issued
and outstanding share capital of the Company, in which case such Additional Capital Contributions shall be transferred to the Company within the 6 (six)-month period following the expiration of the period set forth in Section 6.3(a)(i) above
and in no event later than 12 (twelve) months from the occurrence of the Dilution Event 

  

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	 	    	Below 40%. In this case, the Shareholders agree that the Reduced Shareholder shall transfer to the Company as a Contribution an amount equal to the Locked-up Price plus the Cost of
Carrying in order to return to an Interest of 50% (fifty percent) of the total issued and outstanding share capital of the Company. 

  

	 	    	In any case, any difference between the value of the Additional Capital Contribution transferred to the Company under this Section and the aggregate nominal value of the Company
Shares issued in respect of such Contribution, shall be credited to the General Share Premium Reserve. 

  

	6.4	PT Group Put. 

  

	 	(a)	If (i) the PT Group is the Reduced Shareholder as a consequence of a capital increase, (ii) the Diluted Interest is lower than 40% and (iii) the PT Group has
not exercised its right to build up its Interest back to at least 40% of the total issued and outstanding share capital of the Company within the prescribed 6 month time period, then the PT Group shall have the right to sell and transfer all but not
less than all the Company Shares which it owns at the date of delivery of the PT Group Notice, as defined below, (the “PT Group Company Shares”) to TEM at the value resulting from an Independent Valuation (the “PT Group
Put”), such right, subject to the last sentence of this paragraph, to be exercised within the 12 month period (the “PT Group Put Exercise Term”) following the end of the aforementioned 6-month period; provided that
the PT Group Put Exercise Term shall terminate if the PT Group recovers its corporate governance rights as a consequence of increasing its Interest in the Company to 50%, on the date such increase takes place, and provided, further, that the PT
Group Put, subject to Section 6.4.(b) below, may not be exercised at any time after 31 December 2007. In the event the PT Group Put Exercise Term expires due to the PT Group building up its Interest in the Company to 50% and the PT Group
has not exercised the PT Group Put, this will not prevent the exercise of the PT Group Put in the event the PT Group is diluted below 40% and the PT Group has not exercised its right to build up its Interest back to at least 40% of the total issued
and outstanding share capital of the Company within the prescribed 6 month time period. 

  

	 	    	Subject to Section 6.4.(e) below, at the option of TEM, payment for the PT Group Company Shares may be made in (i) cash, (ii) shares in Telefónica and/or
shares in TEM, or (iii) a combination of cash and shares in Telefónica and/or shares in TEM. 

  

	 	    	The acquisition of the PT Group Company Shares shall, at the option of TEM, be performed by one or more members of the TEF Group and/or Telefónica, and/or by one or more
Third Parties (hereinafter, the “Acquirer/s”), provided that in such event the TEF Group shall be jointly and severally liable with the Acquirer/s for the obligation of payment of the PT Group Company Shares in accordance
with this Agreement. 

  

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	 	(b)	If the PT Group wishes to exercise the PT Group Put, it shall deliver a notice to TEM and the Company not later than 5 (five) Business Days prior to the expiry of the PT
Group Put Exercise Term, indicating that it is exercising such PT Group Put and the number of the Company Shares that is then owned by such PT Group (the “PT Group Put Notice”). This notice will have the effect of an irrevocable
exercise of the PT Group Put. 

  

	 	(c)	In the event the PT Group delivers the PT Group Put Notice, an Independent Valuation shall be conducted as set forth in Sections 1.4 and 1.5 of the Subscription Agreement,
which shall take into account the following specific rules: 

  

	 	(A)	The Mandate Letter shall provide that the Investment Banks must complete the Initial Valuations of the Company as of the date the PT Group Put Notice is received by TEM, for
purposes of determining the value in Euros of the PT Group Put. 

  

	 	(B)	The Investment Banks shall prepare neither the Company Shares Exchange Ratio referred to in Section 1.5 of the Subscription Agreement nor the Contribution Valuation.

  

	 	(C)	The Initial Valuations and the Finalized Initial Valuation of the Company shall be based on the equity value of the Company as a going concern, without illiquidity or
minority share discount, and the valuation methodology followed to value the Company will include a discounted cash flow, precedent transactions multiples and trading multiples of comparable companies analysis. 

  

	 	(D)	Each of the TEF Group and the PT Group, to the extent that it is able to do so, shall cause the Company to provide to the Investment Banks and, if applicable, the Third
Investment Bank, reasonable access to the Company management and all information concerning the business, assets, liabilities, operations, financial condition and prospects of the Company and its Subsidiaries which any of the Investment Banks
reasonably request in connection with the preparation of the valuations contemplated by this Section 6.4. All such information shall be complete and accurate and each of the Investment Banks and, if applicable, the Third Investment Bank, shall
be afforded equal access to such information. 

  

	 	(d)	The purchase price to be paid by the TEF Group for the transfer to it (and/or to the Person/s nominated by it) of the PT Group Company Shares owned by the PT Group shall be
determined by multiplying the Finalized Initial Valuation of the Company by the percentage that such PT Group Company Shares represent over the total issued and outstanding share capital of the Company at the time of the delivery of the PT Group Put
Notice. 

  

	 	(e)	The Acquirer/s shall have the option to pay for the PT Group Company Shares with (i) cash, and/or (ii) existing and/or new shares in Telefónica and/or TEM,
provided that the number of such Telefónica and/or TEM shares shall not exceed the total number of TEF and/or TEM shares (as the case may be) traded on the Madrid Stock Exchange and the New York Stock Exchange (ADRs converted into
shares) [***] for the PT Group Company Shares. 

  

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	 	(f)	Within twenty two (22) Business Days following the receipt by TEM of the Independent Valuation, (provided, that exclusively for purposes of this Section 6.4, the
days falling between (i) August 1st and August 30th (both inclusive) and (ii) December 15th and January 15th (both inclusive), shall not be considered Business Days), TEM shall
send a written notice to the PT Group which shall contain: (i) the kind of consideration for the payment of the PT Group Company Shares; (ii) the Person/s appointed by TEM to act as Acquirer/s; (iii) the date of the TEM board meeting
(and/or Telefónica board meeting, if applicable) which decided the kind of consideration for the payment of the PT Group Company Shares; and (iv) the value per share of the TEM shares (and of the shares in Telefónica, if
applicable) calculated in accordance with Section 6.4.(l) below. Failure by TEM to deliver the written notice to the PT Group in accordance with this Section 6.4.(f) will be considered as an election of TEM to pay in cash the PT Group
Company Shares. 

  

	 	(g)	In the event that the Acquirer/s decide to pay all or a portion of the purchase price for the PT Group Company Shares using cash and/or existing shares in Telefónica
and/or TEM, the sale and transfer of the PT Group Company Shares shall take place on the date notified by TEM to the PT Group, provided that such date shall fall within 10 Business Days after the date of the written communication referred to
in Section 6.4.(f) above, and provided further that, in the event of payment in existing shares in Telefónica and/or TEM, such shares shall be credited to a securities account or accounts in Spain designated by the PT Group with the
investment bank selected in accordance with the provision of Section (B) of Exhibit II. In the event such transfer is subject to the prior fulfilment of any requirements and/or to the prior approval by any regulatory agency (including, without
limitation, ANATEL, CVM or any other Governmental Authority with jurisdiction over the Company and the Subsidiaries), the sale and transfer of the PT Group Company Shares shall be extended until the expiration of 5 (five) Business Days after all
such requirements are fulfilled and/or all such approvals shall have been received, provided that in this event, the relevant purchase price for the PT Group Company Shares shall not be increased with any Cost of Carrying. The Parties
undertake to use their reasonable efforts to fulfil any such requirements and to obtain any such regulatory approval as soon as possible. 

  

	 	(h)	In the event that the Acquirer/s decides to pay all or a portion of the purchase price for the PT Group Company Shares using new shares in Telefónica and/or TEM, the
sale and transfer of the PT Group Company Shares shall take place, as defined below, as soon as possible after (A) compliance with applicable law and regulations, and (B) the first annual general meeting of shareholders of
Telefónica (if applicable) and/or TEM, as the case may be, convened on or after the date of the board meetings referred to in Section 6.4.(f) above, provided that such sale and transfer of the PT Group Company Shares shall be
performed and settled no later than [***] after the date of the written communication referred to in Section 6.4.(f) above (taking into account that if an annual general shareholders meeting is not going to be convened on or after the date of
the board meetings referred to in Section 6.4.(f) above and to be held before the expiration of the aforesaid [***], an extraordinary shareholders meeting shall be convened in order 

  

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	 	    	to be held within such [***]), provided further that if such transfer is subject to the prior fulfilment of any requirements and/or to the prior approval by any regulatory agency
(including, without limitation, ANATEL, CVM or any other Governmental Authority with jurisdiction over the Company and the Subsidiaries), the sale and transfer of the PT Group Company Shares shall take place as soon as possible after all such
requirements are fulfilled and/or all such approvals shall have been received, provided that in this event, the relevant purchase price for the PT Group Company Shares shall not be increase with any Cost of Carrying. The proposed date of sale
and transfer shall be notified by TEM (or the Acquirer/s) to the PT Group in writing. In the event the sale and transfer of the PT Group Company Shares in accordance with the provisions of this Section 6.4.(h) does not take place within the
[***] provided for herein, the relevant portion of the PT Group Company Shares shall be purchased and sold, and the relevant portion of the purchase price for the PT Group Company Shares shall then be paid by TEM and/or Telefónica, within 10
(ten) Business Days from the date which is [***] after the date of the written communication referred to in Section 6.4.(f) above, provided that, in such event, the purchase price for the PT Group Company Shares shall be increased in the
Cost of Carrying from the date of the written communication referred to in Section 6.4.(f) above until the date such sale and transfer of the relevant portion PT Group Company Shares takes place, unless the delay in the sale and purchase of the
relevant portion of the PT Group Company Shares is attributable to the PT Group. 

  

	 	    	On the date of sale and transfer, the PT Group shall deliver the number of the PT Group Company Shares equal to all or a portion, as applicable, of the purchase price to be paid in
new shares in Telefónica and/or TEM to a notary and/or to the notaries in Spain selected by TEM and/or Telefónica (if applicable), before whom the capital increase/s will be notarized. Telefónica and/or TEM shall have filed,
prior to the date of sale and transfer, the prospectus for such newly issued shares with the CNMV. 

  

	 	    	Telefónica and/or TEM shall, immediately after the above mentioned delivery by the PT Group, (A) seek to obtain the granting of a Public Deed and/or the Public Deeds
evidencing the increase and/or increases in share capital in an amount equal to the value of the newly issued shares to be delivered and declaring the subscription and disbursement of said shares; (B) file the Public Deed with the Mercantile
Registry of Madrid to register such share capital increase and/or share capital increases; (C) deliver a copy of the Public Deed and/or the Public Deeds to the SCLV and cause the SCLV to credit such shares to a securities account or accounts in
Spain designated by the PT Group with the investment bank selected in accordance with the provision of Section (B) of Exhibit II; (D) deliver a copy of the Public Deed to the CNMV and the Madrid Stock Exchange with a request that such
shares be admitted to listing on the Spanish Stock Exchanges as soon as practicable; and (E) cause such shares to be listed on the Spanish Stock Exchanges. Thereafter, as soon as practicable, Telefónica and/or TEM shall certify to the PT
Group that the foregoing actions have been completed. 

  

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	 	    	In the event TEM (or the Acquirer/s) communicated to the PT Group its intention to pay all or a portion of the PT Group Company Shares using new shares in Telefónica and/or
TEM and (i) the shareholders’ meeting of TEM and/or Telefónica does not resolve to increase their share capital and to issue the new shares in favour of the PT Group in exchange of the PT Group Company Shares, or (ii) such
capital increase cannot take place due to any legal restriction, the relevant portion of the PT Group Company Shares shall be purchased and sold, and the relevant portion of the purchase price for the PT Group Company Shares shall then be paid by
TEM and/or Telefónica in cash and/or existing shares, within 10 (ten) Business Days from the date of the shareholders’ meeting of TEM and/or Telefónica (as the case may be). 

  

	 	(i)	In the event the consideration for the payment of all or a portion of the purchase price for the PT Group Company Shares consist of existing and/or new shares in
Telefónica and/or TEM, certain provisions as set out in the Exhibit II will apply in respect of said shares of Telefónica and/or TEM (as the case may be). 

  

	 	(j)	Unless otherwise agreed by the PT Group and the TEF Group, where payment of all or part of the purchase price for the PT Group Company Shares is made using new shares in
Telefónica and/or TEM, the sale and transfer of the PT Group Company Shares pursuant to this Section 6.4 shall be effected at the registered office of Telefónica in Spain. In any other case, unless otherwise agreed by the PT Group
and the TEF Group, the sale and transfer of the PT Group Company Shares pursuant to this Section 6.4 shall take place at the registered office of the Company in the Netherlands. 

  

	 	(k)	On the date of sale and transfer, the PT Group shall deliver to the TEF Group and/or its nominee or nominees: 

  

	 	(i)	the PT Group Company Shares to TEM and/or the Person/s nominated by TEM, free and clear of any and all encumbrances, by executing the relevant notarial deed of transfer, (if
payment is to be made totally or partially in newly issued shares the corresponding PT Group Company Shares shall be delivered to the notary and/or notaries as set forth in Section 6.4.(h) for granting the corresponding Public Deed of capital
increase), 

  

	 	(ii)	to the extent the purchase price is paid in cash and/or existing Telefónica and/or TEM shares, a receipt for the relevant purchase price payment (to the extent the
purchase price is paid, totally or partially, in new Telefónica and/or TEM shares the corresponding receipt for the purchase price paid in new shares shall be issued upon delivery of such new shares). 

  

	 	(l)	In the event that the Acquirer/s elects to use Telefónica and/or TEM shares to pay all or part of the purchase price for the PT Group Company Shares, those
Telefónica and/or TEM shares shall be valued [***]. 

  

	 	(m)	Upon the consummation of the transfer of the PT Group Company Shares in terms of this Section 6.4, the PT Group shall be prevented from competing in the Wireless

  

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	 	    	Business for a period of one year following such transfer and from hiring any Senior Executive employed by any Wireless Property, the Company or any New Acquisition at any time
during the 12 (twelve) month period prior to the consummation of the transfer and that was not employed by the PT Group before being employed by the Company, any Wireless Property or any New Acquisition. For the purposes of this Section,
“Senior Executive” shall mean any employee who reports directly to the board of directors of the Subsidiaries, the chief executive officer, the chief operating officer, the chief financial officer or any equivalent manager or officer of
the Company, any Wireless Property or any New Acquisition. The consummation of the sale and transfer of the PT Group Company Shares in terms of this Section 6.4 shall constitute full, satisfactory and final compensation to the PT Group for its
participation in the Company and in any New Acquisition. 

  

	 	(n)	In case of a valid exercise of the PT Group Put pursuant to this Section 6.4, the TEF Group will have a call option to purchase up to 100% of that portion of the Global Telecom
Interest still not transferred to the Company. This call right will be governed by the provisions of Section 1.6.1 of the Subscription Agreement, provided that references therein to “up to 50%” will be read as references to
“up to 100%”. 

  

	6.5	Governance and Dilution in the Event of Listing 

  

	    	The Groups will analyse the advisability of applying for the listing of the Company on such stock exchanges they consider convenient. The governance and dilution provisions
contained in this Agreement would in that case remain applicable to the extent legally permissible, comparing the Interest of each Group to the total Interests that the Groups hold (directly or indirectly) in the Company’s total issued and
outstanding share capital from time to time. 

  

	6.6	Listing of Holding Companies 

  

	    	Notwithstanding Section 6.5 above, unless otherwise agreed by the TEF Group and the PT Group, neither Group shall have the right to cause the listing on any stock exchange of
any securities in any entity which holds any Company Shares as its only significant asset and whose operations are primarily centred in Brazil. 

  

	7.	FINANCIAL POLICIES 

  

	7.1	Financial Policies 

  

	    	The Company’s Managing Board, in accordance with Section 2.3(c), shall, from time to time and with the prior approval of the Supervisory Board, adopt, by resolution,
financial policies to support the achievement of the Business Plan and the Synergies and in compliance with the Company Growth Principles. 

  

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	7.2	Business Plan and Financing of the Company 

  

	 	(a)	As between the TEF Group and the PT Group, the Groups undertake to have the Managing Board agree on a medium term business plan up-front which, in any event, must allow the
achievement of the Company Growth Principles and provide the Company with cash through shareholder loans, guarantees from the Groups to institutions lending to the Company (which guarantees may carry a fee to be charged to the Company if agreed by
both Groups), or capital contributions, all as to be resolved by the Managing Board from time to time, to be provided by the Groups from time to time pro-rata to their respective Interests in the Company’s total issued and outstanding share
capital. The contribution of a Reduced Shareholder may be proportionally higher if such Reduced Shareholder so requests to exercise its rights hereunder to build up to 40% (forty percent) or 50% (fifty percent) (as the case may be) in accordance
with Sections 6.2 and 6.3 its Interest in the Company’s total issued and outstanding share capital. 

  

	 	(b)	No Shareholder shall be under any obligation to subscribe for Company Shares to be issued against cash, the effect on the non-subscribing Shareholder being dilution of its
interest in the Company and for the subscribing Shareholder the right to subscribe for all or part of the Company Shares not subscribed for by the other Shareholder. Additionally, no Shareholder will be under the obligation to fund the Company, or
to provide loans or parent guarantees to the Company, as set out in a Business Plan in the event that the Directors appointed upon their nomination voted against such Business Plan. 

  

	 	(c)	The TEF Group and PT Group further agree that: 

  

	 	(A)	Each Group shall use its reasonable efforts to prevent any early repayment obligations or any other adverse consequences in respect of any third party debt, financing, bonds,
debentures, loans, credits or any other kind of indebtedness (“Financing”) being triggered as a result of the execution of and performance by the Parties in terms of this Agreement and the Subscription Agreement;

  

	 	(B)	No early repayment obligations or any other adverse consequences in respect of any inter-company Financing (of any Group to any of the Subsidiaries or vice versa, or of any
of the Subsidiaries to another Subsidiary), whether or not the creditor’s rights under such Financing are assigned or otherwise transferred to a third party, shall be triggered as a result of the execution of and performance by the Parties in
terms of this Agreement and the Subscription Agreement; and 

  

	 	(C)	No agreement entered into after the date hereof in respect of any Financing of the Company or any of the Subsidiaries, shall include a provision that performance by the
parties in terms of this Agreement and the Subscription Agreement (including without limitation the transfer to the Company of the Balance Capital Contributions) shall be a breach of such agreement or trigger an early repayment obligation or any
other adverse consequences in respect of any Financing of the Company or any of the Subsidiaries. 

  

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	7.3	GAAP 

  

	    	Books and records of the Company shall be maintained and financial reports and statements shall be prepared in a manner to comply with the Generally Accepted Accounting Principles
as in force under Netherlands law (“GAAP”). If practicable, such mutually-accepted GAAP shall not affect the ability of the Shareholders to, as permitted by applicable laws, consolidate the Company in their respective year-end
results. Such GAAP principles shall remain in full force and effect until the moment that it will be allowed under Netherlands law to apply the International Accounting Principles (“IAS”) for the books and records of the Company,
after which moment the Company will apply IAS for its books and records. 

  

	7.4	Annual Budget 

  

	    	The Company shall be operated in accordance with an annual budget adopted or amended by the Managing Board in terms of Section 2.6(a)(Y)(x) above. 

  

	7.5	Books of Account 

  

	    	Without detracting from Section 7.3, the Company shall keep and maintain or cause to be kept and maintained books of account and records in accordance with good accounting and
business practice. Such books and records shall be kept at the registered office of the Company. 

  

	7.6	Reasonable Access 

  

	    	Each Shareholder or its representatives shall, at its own expense and subject to the restrictions imposed under Section 10 herein, be entitled to: 

  

	 	(i)	reasonable access at reasonable times to, and the right to inspect and obtain copies of, books and records under the control of the Company as well as of the Subsidiaries, if
any; and 

  

	 	(ii)	reasonable access at reasonable times to, and the right to inspect and observe, the operations of the Company as well as at the Subsidiaries, if any.

  

	7.7	Management fees 

  

	 	(i)	The Shareholders shall share the economic interest in any existing or future management contracts by each Shareholder with any Wireless Property and New Acquisition. For this
purpose, no later than the day that is fifteen days after the termination of each quarter (i.e. on April 15th, July 15th, October 15th and January 15th) of
each year, TEM will send a notice to Portugal Telecom and Portugal Telecom will send a notice to TEM (each, a “Management Notice”), stating the amount in Euros effectively received (and not only accrued or accounted for) up to such
date by the Party delivering the 

  

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	 	    	Management Notice from the Wireless Properties and the New Acquisitions and corresponding to management fees and not already included in previous Management Notices (the
“Management Amount”). 

  

	 	(ii)	In the event TEM or PT disagrees with the Management Amount provided for in the Management Notice, the disputing Party shall provide notice to the other Party within 10
Business Days from the receipt of the Management Notice. In this event, the Management Amount shall be audited by the auditors of the relevant Wireless Property or New Acquisition, at the request of any of the Parties, and their decision shall be
final and binding for the TEF Group and for the PT Group. Such audit shall be finalized no later than 30 days after the dispute has been notified to the auditors, and the TEF Group and the PT Group undertake to provide all the information reasonably
requested by the auditors in order to perform their duty. 

  

	 	(iii)	No later than 5 Business Days after (i) the receipt by the Parties of the Management Notice (if the Management Amount is not disputed) or (ii) after the final
decision of the auditors of the relevant Wireless Property or New Acquisition (if the Management Amount is disputed), the Party which has received the higher of the Management Amounts shall pay in Euros and in immediately available funds to the
other Party fifty per cent (50%) of the difference between the two Management Amounts, to the bank account notified by the recipient Party for that purpose. The Parties will undertake their commercial reasonable efforts to ensure that any
amounts owed to the PT Group and to the TEF Group by any Wireless Properties or New Acquisitions deriving from management agreements entered into with them shall be paid in accordance with the provisions of the relevant agreement.

  

	7.8	Financial Services 

  

	    	The Shareholders shall procure that the Company shall contract from the TEF Group or its Affiliates located in Brazil (subject to the agreement with the relevant member of the TEF
Group or the relevant Affiliate) on arms-length and “most favoured nation” basis the financial and administrative services that are currently provided by the TEF Group or its Affiliates located in Brazil to the TEF Wireless Properties
which both Groups declare to be aware of, and any other financial or administrative services which the CFO may find necessary or advisable in the future. 

  

	8.	NON-COMPETITION AND BUSINESS OPPORTUNITIES 

  

	8.1	Non-compete 

  

	    	Except as otherwise expressly provided for herein or in the Subscription Agreement, each Group shall, as long as any of its members is a shareholder of the Company, refrain from
engaging, directly or indirectly through any Affiliate (other than the Company), in any project in the Wireless Business in competition with the Company. 

  

	8.2	Wireless Business Opportunities 

  

	    	Each Group shall and shall procure that any of their Affiliates shall promptly, fairly and fully disclose and offer to the Company all potential acquisitions within the scope of the
Wireless 

  

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	    	Business which come to their attention, provided that if the Managing Board rejects a proposal for the acquisition of an Interest in a New Acquisition the provisions of
Section 1.6.2 of the Subscription Agreement shall apply. 

  

	9.	INTERESTS IN NEW ACQUISITIONS AND FURTHER INTERESTS IN WIRELESS PROPERTIES 

  

	    	The acquisition (and transfer to the Company) of Interests in New Acquisitions and Further Interests in Wireless Properties shall be done in accordance with the provisions of
Section 1.6 of the Subscription Agreement. 

  

	10.	CONFIDENTIALITY 

  

	10.1	Confidential Information 

  

	    	Each Party acknowledges that, pursuant to this Agreement and the Subscription Agreement, it may have access to certain information (including, without limitation, financial
information and the information contained in this Agreement and the Subscription Agreement) made available by, and concerning the business, operations and prospects of, any of the other Parties (a “Disclosing Party”) which is either
confidential or proprietary in nature (each “Confidential Information”). Each Party acknowledges and agrees that all Confidential Information, is the property of the Disclosing Party and constitutes valuable, special and unique
assets of the business of such Party. 

  

	10.2	Use and Disclosure 

  

	    	Each of the Parties (a “Receiving Party”) agrees in relation to any Confidential Information of any other Party: (i) to use such Confidential Information
solely for the purposes contemplated in this Agreement and the Subscription Agreement, and in facilitating the business objectives of the Company; and (ii) to keep such information confidential and to disclose it only to officers, employees,
consultants and professional advisers and in case of a Third Party Sale as referred to in Section 5.4 to such Third Party who (A) have a need to know (and only to the extent that each has a need to know); (B) are aware that the
Confidential Information should be kept confidential; (C) are aware of the undertakings in relation to such information in terms of this Agreement; (D) have been directed by the Receiving Party to keep the Confidential Information
confidential; and (E) in case of a Third Party Sale as referred to in Section 5.4, has executed a confidentiality agreement on terms and conditions not less favourable than as set out in this Agreement in favour of the Parties.

  

	10.3	Duties of the Receiving Party 

  

	 	(a)	Each Receiving Party shall (i) establish and maintain reasonable security measures to safeguard Confidential Information from access or use not authorised by this
Agreement; (ii) keep the Confidential Information under its control; (iii) use reasonable best efforts to comply with any reasonable direction issued by the owner from time to 

  

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	 	    	time regarding the enforcement of confidentiality requirements including, without limitation, commencing and conducting, enforcement proceedings; and (iv) on ceasing to be one
of the Parties (A) continue to keep confidential the Confidential Information received while a Party; and (B) at each owner’s option, return to that owner or destroy and certify the destruction of that owner’s Confidential
Information. 

  

	 	(b)	Each Receiving Party shall further, in relation to such Confidential Information (i) at its own cost and expense use reasonable efforts to ensure, at all times, that
each Person to whom it discloses such Confidential Information complies with the confidentiality obligations set out in this Agreement; (ii) at its own cost and expense immediately notify the owner of any suspected or actual unauthorised use,
copying or disclosure of Confidential Information of that owner of which the notifying Party becomes aware; and (iii) provide such assistance as may reasonably be requested by any owner of Confidential Information (at such owner’s sole
cost, unless the Receiving Party is in breach of its confidentiality obligations under this Agreement) in connection with any proceedings that the owner may initiate against any recipient or third party for the unauthorised use, copying or
disclosure of such Confidential Information of said owner. 

  

	10.4	Exclusions 

  

	    	The foregoing obligations of confidentiality shall not apply to, nor restrict the use of data or Confidential Information which: (i) was already in the rightful possession or
control of the recipient at the time of disclosure and not subject to an obligation of confidentiality on such party, and of which the recipient has evidence so to prove; (ii) the recipient thereafter develops independently and has evidence of
such development; (iii) was received from a third party who was entitled to disclosure; (iv) was necessary financial and/or other information provided by the Party to prospective financiers and/or investors but only if such information was
given subject to the execution of the appropriate confidentiality agreement(s) with the receiving party(ies); (v) was or became known or available to the public or to the trade without fault of the recipient, except that, even in such instance,
the recipient shall not disclose any correlation between such Confidential Information or techniques and any such unrestricted information; (vi) is required to be disclosed under law or rules applicable to the Party or as a result of a court
order not subject to appeal, provided that insofar as possible the recipient gives the Disclosing Party prior written notice of such disclosure so that the Disclosing Party may intervene in the proceedings to protect the confidential nature
of the Confidential Information. 

  

	11.	TERMINATION 

  

	11.1	Termination 

  

	    	This Agreement shall terminate: 

  

	 	(i)	at any time by mutual written agreement among the Parties, 

  

	 	(ii)	automatically, upon completion of the liquidation of the Company, or 

  

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	 	(iii)	automatically, as a result of only one of the two Groups holding Company Shares, provided that if one of the Shareholders transfers to a third party its interest in
the Company and an Assignment Agreement is executed in accordance with Section 5.4(i) above, (A) such Assignment Agreement shall govern the relationship between the shareholders of the Company and (B) the representations, warranties
and covenants set out in Sections 4, 5, 6, 8 and 9 of the Subscription Agreement, shall apply with the following exceptions: 

  

	 	(x)	the Transferring Party will be liable, indemnify and hold harmless the Non-Transferring Party from and against all Damages asserted against or incurred, directly or
indirectly through the Company or the Subsidiaries, by the Non-Transferring Party as a result of or arising out of any Breach; and 

  

	 	(y)	the representations, warranties and covenants set out in Sections 4, 5, 6, 8 and 9 of the Subscription Agreement will be considered to have been made and given to the Company
and the Non-Transferring Party will be liable, indemnify and hold harmless the Company from and against all Damages asserted against or incurred by the Company as a result of or arising out of any Breach. 

  

	    	Unless terminated in accordance with (i), (ii), or (iii) above, this Agreement shall be in force, valid and binding for the period of 25 (twenty five) years calculated from the
date of the execution hereof. In the event no Shareholder informs the others, by written notice, of its decision not to extend the period of this Agreement, such notice to be delivered at least 1 (one) year in advance, this Agreement shall be
extended for an additional period of 25 (twenty five) years and thereafter, subject to the same notice provision, subsequent periods of 5 (five) years at a time. 

  

	11.2	Survival of Obligations and Liabilities 

  

	    	Any termination of this Agreement, as aforesaid, shall not relieve any Shareholder of any obligations and liabilities accrued prior to the date of termination, and the provisions of
Section 10 shall survive for an indefinite period of time and claims under such Section 10 may be brought at any time irrespective of the termination of this Agreement for any reason whatsoever. 

  

	12.	COVENANTS, REPRESENTATIONS AND WARRANTIES, REGISTRATION 

  

	12.1	Covenants, Representations and Warranties of the Shareholders and the Company 

  

	    	In addition to the representations, warranties and covenants made under the Subscription Agreement, each of the Shareholders hereby covenants, represents and warrants to the other
Parties that: 

  

	 	(A)	It has full power and authority to enter into this Agreement and any agreement or instrument referred to or contemplated by this Agreement and to carry out and perform all of
its obligations and duties hereunder. 

  

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	 	(B)	It has duly obtained all corporate and regulatory authorizations necessary for the execution and performance of this Agreement and any agreement or instrument referred to or
contemplated by this Agreement and such execution and performance and the consummation of the transaction contemplated therein (i) will not conflict with or result in a breach of any covenants or agreements contained in any indenture, agreement
or other instrument whatsoever to which it is a party or by which it is bound and (ii) does not contravene any applicable laws. 

  

	 	(C)	This Agreement has been duly executed by it and is valid, binding and enforceable against it in accordance with the terms of this Agreement. 

  

	12.2	Survival of Covenants, Representations and Warranties 

  

	    	Each of the Shareholders acknowledges and agrees that its covenants, representations and warranties shall survive for as long as this Agreement is in effect and shall be deemed to
have been repeated in full on the date of any Contribution as though made on and as of such date. 

  

	12.3	Shareholders’ Register 

  

	    	The Shareholders and the Company shall procure that the name of each Person owning any Company Shares shall forthwith be entered in the shareholders’ register of the Company
together with the number of Company Shares held by such Person from time to time. 

  

	12.4	Consent by the Company 

  

	    	The Company hereby declares to have knowledge of and to consent to and to be bound by the terms and conditions of this Agreement and the attachments to this Agreement. The Company
undertakes to file and keep one of the counterparts of this Agreement and its attachments filed at its registered office in the Netherlands. 

  

	13.	GOVERNING LAW AND SETTLEMENT OF DISPUTES 

  

	13.1	Governing Law 

  

	    	This Agreement, and any question related to it or to its performance or consequences of any breach of it, shall be governed by and construed in accordance with the laws of the
Netherlands. 

  

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	13.2	Arbitration 

  

	 	(a)	If any dispute arises in relation to this Agreement (and which shall not be submitted to the Wise Persons Procedure in accordance with Section 4.2 of this Agreement),
then at the request of any Party the dispute shall be submitted for final decision by arbitration to be conducted in Amsterdam, the Netherlands under the Rules of Arbitration of the International Chamber of Commerce. Without prejudice of the site of
the arbitration being Amsterdam, the Netherlands and that the award must be issued in that town, hearings and other activities during the arbitration proceeding may be held elsewhere. 

  

	 	(b)	There shall be 3 (three) arbitrators, with each Group appointing 1 (one) arbitrator, who shall accept its appointment within 15 (fifteen) days, and who collectively will
select a third arbitrator as chairman within 15 (fifteen) days from the acceptance of their appointments. If the two appointed arbitrators do not agree on the selection of the third arbitrator, the third arbitrator shall be appointed by the
International Chamber of Commerce. The International Chamber of Commerce will also appoint the arbitrator for one Group if such Group fails to appoint the arbitrator within 30 (thirty) days of the written notification to such Group by the other
Group of the beginning of the arbitration proceeding. The language to be used in the arbitration proceedings shall be English. 

  

	 	(c)	The Parties shall submit irrevocably to the decision of the arbitration tribunal, giving their consent to comply with such decision and waive any other jurisdiction which
could apply. The arbitration tribunal shall apply the laws of the Netherlands. The fees shall be paid by the losing party and shall include any reasonable expenses including without limitation attorneys fees and any expenses related with the
proceeding. 

  

	 	(d)	Consistent with the expedited nature of arbitration, each Party shall, upon the written request of the other Parties, promptly provide the other with copies of documents
relevant to any issue of the claim or counterclaim, save to the extent that such documents are subject to confidentiality restrictions imposed on the first mentioned Party by a third party, or are subject to first mentioned Party’s
attorney-client privilege. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrators, which determination shall be conclusive. 

  

	 	(e)	The Parties shall make their agents and employees available upon reasonable notice at reasonable times at the place of arbitration without the necessity of subpoenas or other
court orders. The arbitrators shall issue subpoenas to compel the attendance of, and the production of documents by, third parties witnesses at depositions or at the hearing. 

  

	 	(f)	Information obtained by either Group or the Company during the arbitration shall be kept confidential and shall not be used except in connection with the arbitration
proceeding, and at the conclusion of the proceeding, the documents disclosed shall be returned to the other Group. 

  

	 	(g)	Any award in an arbitration initiated under this Section may include monetary damages as well as any remedy or any specific performance of the obligations set forth herein.

  

	 	(h)	No details of any arbitration award pursuant to this Section 13 shall made public by any Party or the arbitration tribunal, and the arbitration award shall be subject to
the provisions of Section 10 above. 

  

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	14.	COMMUNICATIONS 

  

	    	For purposes of this Agreement the Shareholders irrevocably establish the following special domiciles, where all notices, consents, requests, instruments, approvals and other
communications provided for herein shall be in writing and shall be deemed validly given when delivered personally or sent by fax, certified mail, return receipt requested, postage prepaid, to the addresses below or at such other addresses as the
Shareholders shall provide by written notice as herein provided: 

  

	    	If to Telefónica Móviles: 

 Attn: Mr Antonio
Hornedo Muguiro 
 General Counsel 
 Goya 24 
 Madrid, Spain 
 Tel: + (34) 91 42 34 054 
 Fax: + (34) 91 42 34 016 
 E-mail: hornedo_a@telefonicamoviles.com 
 If
to Portugal Telecom: 
 Attn: Ana Sequeiros 
 Av. Fontes Pereira de Melo, 40, 11o andar 
 Lisbon, Portugal 
 Tel: +351 21 500 2544

 Fax: + 351 21 500 2195 
 E-mail: ana.c.sequeiros@telecom.pt 
  

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 If to PT Móveis: 
 Attn: Ana Sequeiros 
 Av. Fontes Pereira de Melo, 40, 11o andar 
 Lisbon, Portugal 
 Tel: +351 21 500 2544 
 Fax: + 351 21 500 2195

 E-mail: ana.c.sequeiros@telecom.pt 
 If to the Company: 
 Attn: Managing Director 
 Strawinskylaan 3105 
 1077 ZX Amsterdam 
 The Netherlands 
  

	15.	MISCELLANEOUS PROVISIONS 

  

	15.1	Entire Agreement 

 This Agreement (which includes
the Annexes hereto), substitutes the Shareholders Agreement dated October 17, 2002. This Agreement and the Subscription Agreement 
  

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 supersede all prior arrangements made by the Shareholders with respect with the transactions contemplated
herein prior to the execution of the Shareholders Agreement dated October 17, 2002, including the Joint Venture Agreement, except for the following provisions contemplated in the Joint Venture Agreement: 
  

	 	(a)	the provision named as “Other Considerations”, and 

  

	 	(b)	the last paragraph of the provision named “HoldCo Ownership”, both of which shall remain in full force and effect. 

 No representation or warranty is made by any Party hereto with respect to the subject matter hereof and of the Subscription Agreement, other than as
expressly set forth in any of the aforementioned documents. For avoidance of doubt this Agreement does not affect the validity of any arrangement made by the Shareholders after October 17, 2002. 
  

	15.2	Modification and Amendment; Indexation 

  

	 	(a)	Subject to Section 15.2(b), this Agreement cannot be orally changed, amended or terminated, and no provision or requirement hereof may be orally waived. Any change,
amendment or (save as otherwise expressly provided) termination shall only be by agreement, in writing, signed by the Parties and any waiver shall only be effective if made in writing and signed by the Party waiving its rights.

  

	 	(b)	Where reference to the amounts referred to in Sections 4.2(f) and 15.7(a), such amounts shall be increased (or decreased) on 1 January of each year by the average of the
official general inflation index applicable in the Euro Zone on said date, the first such increase (or decrease) to take place on 1 January 2004. 

  

	15.3	Waiver 

  

	    	Failure or delay on the part of any Party hereto to exercise a right, power or privilege under this Agreement and the Annexes hereto shall not operate as a waiver thereof, nor shall
any single or partial exercise of a right, power of privilege preclude any other future exercise thereof. 

  

	15.4	Survival of Provisions 

 If any term or other
provision of this Agreement shall become invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the extent legally
permissible. 
  

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	15.5	Exclusive Benefit of the Parties and the Company 

 This Agreement is solely and exclusive for the benefit of the Parties and their respective successors and permitted assigns, and this Agreement shall not otherwise be deemed to confer upon or give any third shareholder or any third party
any remedy, claim, liability, cause of action or other right. 
  

	15.6	Bona fide 

 The Parties acknowledge that bona
fide compliance with this Agreement requires, in addition to the fulfilment of the specific undertakings and obligations expressly provided for herein, that all the Parties act in good faith and diligently in executing other actions and
decisions, and refraining from carrying out other actions or decisions, as may be necessary or convenient for a fair, complete, prompt and adequate implementation of all the effects that reasonably follow from (a) the common will and purposes
of the Parties in consideration of which they enter into this Agreement, and (b) the terms used by the Parties to describe their rights and obligations hereunder. The Parties expressly undertake to proceed as appropriate for the bona
fide compliance with this Agreement. 
  

	15.7	Penalty and delay interest 

  

	 	(a)	The Shareholders agree that any significant breach by any Shareholder of any material obligation expressly provided for herein which does not have a specific remedy (other
than damages and/or specific performance) pursuant to this Agreement and which is not remedied within 10 (ten) Business Days after the receipt by the defaulting Shareholder of a written notice by the other Shareholder stating such breach, shall
place the defaulting Shareholder under the obligation to pay the other Shareholder a penalty of Euro [***] in addition to a full indemnification to the non-defaulting Shareholder for the damage and the loss of profit suffered as a consequence of
such breach by the other Shareholder. 

  

	 	(b)	In case of breach of a payment obligation, the Shareholder in breach of its obligations shall pay the non-defaulting Shareholder a delay interest payment calculated at the
reference interest rate applied from time to time by the ECB to the financial institutions having access to the credit facilities of the ECB, for overnight financing in Euro, increased by 2 (two) percentage points. The delay interest will accrue on
a daily basis and shall be paid on the last business day of each calendar month; if not paid, the accrued interest will be added to, and capitalized to become part of the amount then due but unpaid, and will accrue additional delay interest
thereinafter. 

  

	15.8	Counterparts 

 This Agreement will be executed in 5
(five) counterparts, each of which shall be deemed an original and all of which together shall constitute and be considered one and the same Agreement. 
  

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	15.9	Language 

 This Agreement shall be executed in the
English language. 
  

	15.10	Period of Time 

 When calculating the period of time
within which or following which any act is to be done or step taken pursuant to this Agreement, the date which is the reference date in calculating such period shall be excluded. If the last day of such period is not a Business Day, the period in
question shall end on the next Business Day. 
  

	15.11	General Interpretation 

  

	    	In this Agreement, unless otherwise expressly stated: 

  

	 	(a)	The words “herein”, “hereof” and “hereunder” and other similar words for reference purposes refer to this Agreement as a whole and not to any
particular Sections or other subdivision. 

  

	 	(b)	The headings contained in this Agreement are for convenience and reference purposes only and shall not affect in any way the meaning or construction of this Agreement and are
not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof. 

  

	 	(c)	Any reference to a statute includes the regulations made pursuant thereto, all amendments made to such statute or regulations and in force from time to time and any statute
or regulations that may be passed which have the effect of supplementing or superseding such statute or regulation. 

  

	15.12	No Partnership 

 Nothing contained in this Agreement
shall be deemed to constitute either Group, the partner of the other, or to constitute Group, the agent or legal representative of the other or to create any fiduciary relationship between the Groups. It is not the intention of the Shareholders to
create nor shall this Agreement be construed to create any commercial or other partnership. Neither Shareholder shall have any authority to act for or to assume any obligation or responsibility on behalf of the other Shareholders except as otherwise
expressly provided herein. The rights, duties, obligations and liabilities of the Shareholders shall be several and not joint or collective. Each Shareholder shall indemnify, defend and hold harmless each of the other Shareholders, its directors,
officers, employees, agents and attorneys from and against any and all losses, claims, damages and liabilities arising out of any act or any assumption of liability by the indemnifying Shareholder or any of its directors, officers, employees, agents
and attorneys done or undertaken on behalf of the other Shareholder, except pursuant to the authority expressly granted herein or as otherwise agreed in writing among the Shareholders. 
  

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	15.13	Severability 

  

	    	Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is
held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or this Agreement. 

  

	15.14	Taxes and Expenses 

 Except as otherwise provided in
this Agreement or the Subscription Agreement, Taxes and expenses accrued or incurred in connection with this Agreement and its fulfilment will be paid by the Shareholder legally bound to pay the relevant tax or having incurred the relevant expense,
provided that any such Tax or expense which is due or incurred by any of the Subsidiaries shall be paid by such Subsidiaries. 
  

	15.15	IPO 

 In the event of an IPO in respect of any
Company Shares, the Parties shall in good faith negotiate appropriate amendments to this Agreement. 
  

	15.16	Public Announcements 

  

	 	(a)	From the date hereof, except as otherwise mutually agreed in writing by the Groups, no Group shall issue any report, statement or press release or otherwise make any public
statements with respect to this Agreement and the transactions contemplated hereby, except as may be required by law or in connection with any applicable obligations of a publicly-held, exchange-listed company, in which case the language of any such
report, statement or press release shall be mutually agreed to by the Groups. 

  

	 	(b)	With respect to public communications relating to the Company, the following principles shall apply: 

  

	 	(i)	The Company will not have [***] the financial community and [***] Investor Relations (“IR”) team. 

  

	 	(ii)	The Groups will coordinate and communicate any announcement concerning the Company through their respective IR teams and Press Relations (“PR”) teams.

  

	 	(iii)	The Officers will not have regular contacts with investors or analysts. Potential meetings of the Officers with investors and analysts will be agreed among the Groups and
always [***]. The contacts with the media must be known in advance and approved by the Groups. 

  

	 	(iv)	In order to have [***] of the Company, the IR teams of the Groups will elaborate the “equity story” of the Company that will be continuously updated. This
presentation, jointly with a “questions & answers” document, that will be also updated regularly, will be the base for any communication regarding the Company. In order to have the most updated information on the performance of

  

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 the Company, the Groups will maintain a direct and regular contact with the Chief Financial Officer of
the Company or with a member of his team, nominated by the Chief Financial Officer. This contact could be done through a monthly conference call. 
  

	 	(v)	All the press releases, presentations or other type of communications on the Company will be always agreed in writing among the Groups. The Groups will send to each other the
draft of any material communication of their respective Group mentioning the Company (press releases, public announcements, quarterly reports, annual reports, 20-F...). The draft will be sent by each Group to the other Group at least 2 (two)
working days prior to the announcement of the release. However in the event of an annual report, 20-F, prospectus, etc., the draft will be sent by each Group to the other Group at least 5 (five) working days prior to the announcement of the release.

  

	 	(vi)	All the institutional information and official press releases must be submitted by the PR team of the Company to the PR teams of the Groups at least 2 (two) Business Days
prior to the announcement for their eventual correction of the same, and for their prior approval. All institutional and financial information regarding or referring to the Company in the form of official communiqués (press releases),
presentations or rationales which the Company (or the Groups) are obliged to use, must be explicitly approved by the Groups. 

  

	 	(vii)	The IR and PR departments of the Subsidiaries [***] the Company and will [***]. 

  

	 	(viii)	The Groups will decide on the single format and content of future quarterly results releases of the Subsidiaries. 

  

	15.17	Joint and Several 

 The members of a Group shall be
jointly and severally liable for the obligations under this Agreement of the Group of which it is a member. Each member of a Group shall be entitled to the rights under this Agreement of the Group of which they are a member. 
  

	16.	DEFINITIONS 

 In this Agreement the following
capitalised terms shall have the respective meanings ascribed thereto: 
 “Additional Capital Contribution” means any capital
contribution to the Company, including contributions made (i) in cash or (ii) in kind in the form of Liquid Assets (if accepted by the other Group), Interests in New Acquisitions or any Further Interest in a Wireless Property (as the case
may be), (to be) transferred by any of the Groups after the Balance Closing, in such a manner as set forth in this Agreement and the Subscription Agreement. 
 “Additional Closing” means the date on which any Additional Capital Contribution is transferred to the Company. 
 “Affiliate” means, when used with reference to a specified Person, any other Person that directly or indirectly Controls or is Controlled by or is under common Control with the specified Person.

  

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 “Agreement” means this Shareholders Agreement and any and all Exhibits and amendments
hereto and thereto from time to time. 
 “ANATEL” means the Agência Nacional de Telecomunicações,
or any substitute agency, department or regulatory body of the telecommunications industry in Brazil. 
 “Annual Budget” has
the meaning as defined in Section 7.4 of this Agreement. 
 “Articles of Association” means the articles of association
of the Company, as amended from time to time. 
 “Balance Capital Contributions” means (a) those Interests held by each
of the PT Group and the TEF Group in the Wireless Properties and Global Telecom (as specified in Exhibit IV to the Subscription Agreement) and not transferred to the Company at the Initial Closing; and (b), when applicable, the corresponding amount
of cash referred to in Section 3.1.1(b) of the Subscription Agreement, to be transferred to the Company by the Groups in accordance with Section 3 of the Subscription Agreement, and “Balance Capital Contribution” means any
one of them. 
 “Balance Closing” has the meaning set forth in Section 3.1.1(a) of the Subscription Agreement.

 “Brazil” has the meaning set forth in the preamble of this Agreement. 
 “Breach” has the meaning set forth in Section 8.1 of the Subscription Agreement. 
 “Business Day” means a day other than a Saturday, Sunday or statutory holiday in Sao Paulo, Rio de Janeiro, Madrid, Lisbon or Amsterdam.

 “Business Plan” means a description in reasonable detail of the operations to be conducted and objectives to be
accomplished by the Company for a year or any longer period. 
 “Call Right” has the meaning set forth in
Section 1.6.1(a) of the Subscription Agreement. 
 “CEO” has the meaning set forth in Section 2.4(a) of this
Agreement. 
 “Cellular Chairmen Deadlock” has the meaning set forth in Section 4.1(a) of this Agreement. 
 “Cellular Chairmen Deadlock Event” has the meaning set forth in Section 4.1(b) of this Agreement. 
 “Cellular Chairmen Issue” has the meaning set forth in Section 4.2(f) of this Agreement. 
 “CFO” has the meaning set forth in Section 2.4(a) of this Agreement. 
 “Chairman of the Managing Board” has the meaning set forth in Section 2.2(g)(i) of this Agreement. 
 “Chairman of the Supervisory Board” has the meaning set forth in Section 2.3(e)(i) of this Agreement. 
 “Change of Control” means any event or a series of events the result of which is that: 
  

	 	(a)	a percentage of 15% (fifteen percent) or more in the total voting rights in (A) Telefónica is directly or indirectly reached by another telecom operator which is
not acting in concert with Portugal Telecom, or (B) Portugal Telecom is directly or indirectly reached by another telecom operator which is not acting in concert with Telefónica; or 

  

	 	(b)	         

  

	 	(i)	a corporate transaction is effected by any of Telefónica or Portugal Telecom (each in this case a “Target”) by virtue of which a number of shares is issued such
that the voting share capital of such Target is at least doubled at the time of the approval of such transaction; and 

  

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	 	(ii)	as a consequence of such transaction there is a change in the majority of the board members of such Target; or 

  

	 	(c)	in case of any member of a Group or any Affiliate of any of such members (other than Telefónica and Portugal Telecom, but including TEM and PT Móveis) which
directly or indirectly owns an Interest in the Company, a majority of the voting rights in any such Affiliate is directly or indirectly transferred to another telecom operator, and there is a change of the majority of the members of the respective
Board of Directors. 

 “Closings” means the Initial Closing, the Balance Closing and the Additional Closings,
and 
 “Closing” means any one of them. 
 “CNMV” means Comisión Nacional del Mercado de Valores of Spain. 
 “Company” has the meaning set forth in the preamble of this Agreement. 
 “Company Growth
Principles” means the principles set out in Sections 1.2(a), 1.2(b) and 1.2(c) of this Agreement. 
 “Company
Shares” means all issued shares in the share capital of the Company, whether or not of a specific class, and “Company Share” means any one such share. 
 “Company Shares Exchange Ratio” has the meaning set forth in Section 1.5(b)(v)(B) of the Subscription Agreement. 
 “Confidential Information” has the meaning set forth in Section 10.1 of this Agreement. 
 “Conflicted Person” has the meaning set forth in Section 2.1(b)(i) of this Agreement. 
 “Consensus
Rule” has the meaning set forth in Section 3.5(a)(i) of this Agreement. 
 “Contributions” means the Initial
Capital Contributions, the Balance Capital Contributions and the Additional Capital Contributions and “Contribution” means any one of them. 
 “Contribution Valuations” has the meaning set forth in Section 1.5(b)(v)(A)of the Subscription Agreement. 
 “Control”, “Controlled” or “Controlling” in provisions other than those concerning “Change of Control”, means the possession, directly or indirectly, of
(i) at least 51% (fifty-one percent) of the voting stock, and (ii) the power to direct or cause the direction of the management and policies of, a Person or other entity whether by means of voting rights, contracts or otherwise.

 “COO” has the meaning set forth in Section 2.4(a) of this Agreement. 
 “Cost of Carrying” means: 
  

	 	(a)	in respect of Section 3.1.2(i)(C) of the Subscription Agreement and Sections 6.2(b) and 6.3(a)(ii) of this Agreement, the financial cost, determined at the corresponding
Additional Closing, when applicable, that the Company would have paid to raise financing to fund the value of the Contribution having caused the dilution, as determined in the Contribution Valuation, under applicable market financial terms and
conditions, unsecured and without the support of any of the TEF Group or the PT Group. The Cost of Carrying shall be calculated for the period from the date of the transfer to the Company by the relevant Group of the Contribution that caused the
dilution until the Additional Closing removing such dilution; 

  

	 	(b)	in respect of Section 1.5(b)(v)(A) of the Subscription Agreement, the financial cost, 

  

 61 / 67 

 determined at the corresponding Additional Closing, that the Company would have paid to raise financing
to fund the value of the corresponding Interest in a New Acquisition, as determined in the Finalised Initial Valuation, under applicable market financial terms and conditions, unsecured and without the support of any of the TEF Group or the PT
Group. The Cost of Carrying shall be calculated for the period from the Acquisition Date until the Additional Closing at which such Interest in a New Acquisition is transferred to the Company; and 
  

	 	(c)	in respect of Section 6.4(h) of this Agreement, the financial cost, determined at the date of the sale and purchase of the relevant portion of the PT Group Company
Shares, that TEM would have paid to raise financing to fund the value of the corresponding portion of the purchase price for the PT Group Company Shares. 

 “CVM” means the Brazilian Comissão de Valores Mobiliários. 
 “Damages” or “Damage” mean, with respect to any Person, any direct or indirect damage (including consequential damage), loss, out-of-pocket expense, whether or not as a result of, or in relation to, a third
party claim, including, without limitation, all interest, penalties, reasonable attorneys’ fees, all amounts paid or incurred in connection with any action, demand, proceeding, investigation or claim by any third party (including, without
limitation, any Governmental Authority), Taxes, fines or other losses as a result of, or in relation to, any Breach. 
 “Deadlock
Resolution Procedure” has the meaning set forth in Section 4.1(a) of this Agreement. 
 “Diluted Interest” has
the meaning set forth in Section 6.1 of this Agreement. 
 “Dilution Event Above 40%” has the meaning set forth in
Section 6.2 of this Agreement. 
 “Dilution Event Below 40%” has the meaning set forth in Section 6.3 of this
Agreement. 
 “Directors” mean the persons who are from time to time, in accordance with this Agreement, Managing Directors
and “Director” means any one of them. 
 “Disclosing Party” has the meaning as set forth in Section 10.1 of
this Agreement. 
 “ECB” means the European Central Bank. 
 “Euro” or “€” means the European lawful currency. 
 “Finalised Initial Valuations” has the meaning set forth in Section 1.5(b)(ii) or Section 1.5(b)(iii) of the Subscription
Agreement (as the case may be). 
 “Financing” has the meaning set forth in Section 7.2(c)(A) of this Agreement.

 “First Choice Investment Banks” and “First Choice Investment Bank” have the meaning set forth in
Section 1.4(a) of the Subscription Agreement. 
 “Further Interest in Wireless Properties” means all new Interests in
Wireless Properties, which Interests do not form part, directly or indirectly, of the Initial Capital Contributions or the Balance Capital Contributions, and which are directly or indirectly acquired by any of the Groups or by both Groups after the
date hereof, (including, but not limited to, any new shares issued in capital increases and shares acquired from third parties), and “Further Interest in a Wireless Property” means any one of them. 
 “Further Parties” means in respect of a Group, those wholly owned subsidiaries of such Group which are used as intermediate holding
companies for the transfer to the Company of any Interest in any Wireless Property or New Acquisition as a Contribution against an 
  

 62 / 67 

 issuance of Company Shares to such wholly owned subsidiaries, provided that such wholly owned
subsidiaries execute this Agreement and the Subscription Agreement and “Further Party” means any one of them. 
 “GAAP” has the meaning set forth in Section 7.3 of this Agreement. 
 “General Share Premium
Reserve” has the meaning set forth in Section 1.1(b) of this Agreement. 
 “Global Telecom” means the New
Acquisition Global Telecom, S.A. 
 “Global Telecom Interest” has the meaning set forth in Section 1.6.1(a) of the
Subscription Agreement. 
 “Governmental Authority” means (a) the government of Brazil, Spain, Portugal, the
Netherlands, and any state, municipality or subdivision or quasi-governmental authority of any of the same, including but not limited to courts, tribunals, departments, commissions, boards, bureaux, agencies and other instrumentalities; and
(b) any foreign (as to Brazil) sovereign entity and any political subdivision, quasi-governmental authority, or instrumentality of any of the same. 
 “Group CEO’s” has the meaning set forth in Section 4.1(a)(B) of this Agreement. 
 “Group Chairmen” has the meaning set forth in Section 4.1(a)(B) of this Agreement. 
 “Groups”
means the TEF Group and the PT Group and “Group” means any one of them. 
 “IAS” has the meaning set forth in
Section 7.3 of this Agreement. 
 “Independent Valuation” means an independent valuation of (i) Interests in
Wireless Properties, (ii) Interests in New Acquisitions, (iii) the Company and/or (iv) other items, (as may be required in this Agreement or the Subscription Agreement), to be conducted by each of the First Choice Investment Banks
and, when applicable, the Third Investment Bank and to be prepared in the form of an Initial Valuations report, Finalised Initial Valuations report, Contribution Valuations report, and/or a report on the Company Shares Exchange Ratio (as the case
may be), and/or as otherwise may be required in the given circumstances, such independent valuation to be conducted in accordance with Sections 1.4 and 1.5 of the Subscription Agreement and by applying the Independent Valuation Principles and such
other guidelines and criteria set forth in Exhibits I and II to the Subscription Agreement. 
 “Independent Valuation
Principles” means such valuation techniques to be used by the Investment Banks and the Third Investment Bank in performing the Independent Valuations, customary in transactions of this type, including, without limitation (a) discounted
cash flows, (b) publicly available terms of transactions involving companies comparable to the business of the Parties and the consideration paid in such transactions, and (c) to the extent publicly available, multiples on comparable
companies. 
 “Initial Capital Contributions” means the Interests held in Wireless Properties and Global Telecom, to be
agreed to by the Groups in terms of Section 2.1(b) of the Subscription Agreement, to be transferred to the Company by each of the Groups in accordance with Section 2 of the Subscription Agreement. 
 “Initial Closing” means the date on which the transfer to the Company of Initial Capital Contributions is completed, as set forth in
Section 2.1 of the Subscription Agreement. 
 “Initial Valuations” has the meaning set forth in
Section 1.5(b)(i)(A) of the Subscription Agreement. 
  

 63 / 67 

 “Interest” means a direct or indirect (as the case may be) ownership interest of the PT
Group and/or the TEF Group (as the case may be) in the equity securities, whether voting or non-voting, of the relevant Person. 
 “Investment Bank” means each of those reputable internationally recognised investment banks, selected from time to time as First Choice Investment Banks or as a Third Investment Bank in terms of Section 1.4 or
Section 1.5 of the Subscription Agreement (as the case may be), whose Mandate Letters remain effective. 
 “Joint Venture
Agreement” has the meaning set forth in the preamble of this Agreement. 
 “Just Cause” means (a) the wilful
and substantial failure by the Officer or Director, as applicable, after notice thereof, to perform his duties and responsibilities to the Company; (b) disloyalty, gross negligence, wilful misconduct, dishonesty or breach of fiduciary duty to
the Company; (c) the commission of an act of embezzlement or fraud; (d) the deliberate disregard of the rules or policies of the Company which results in a material direct or indirect loss, damage or injury, monetarily or otherwise, to the
Company; or (e) the plea of guilty to, or conviction for, the commission of a felony by the Officer or Director, as applicable, in any jurisdiction. 
 “Liquid Assets” means any equity security or bond or interest-bearing security or any other security listed on an OECD stock exchange or organized securities market to the extent that the foregoing is
expressly accepted, as to the eligibility of such securities as well as to the value to be allocated thereto, by the Group other than the Group transferring the relevant Contribution to the Company. 
 “Liquidation” has the meaning set forth in Section 4.3 of this Agreement. 
 “Locked-up Price” has the meaning set forth in Section 6.2(b) of this Agreement. 
 “Managing Board” means the managing board (“raad van bestuur”) of the Company from time to time. 
 “Managing Directors” mean the persons who are from time to time, in accordance with this Agreement, managing directors (directeur)
of the Company, “Managing Director” means any one of them. 
 “Mandate Letters” has the meaning set forth in
Section 1.4(c) of the Subscription Agreement and “Mandate Letter” means any one of them. 
 “New
Acquisition” means each legal Person which owns or beneficially holds property, rights and other assets (including, but not limited to, licenses, concessions or spectrum), that: 
  

	 	(a)	are primarily used in the operation of a Wireless Business, and 

  

	 	(b)	do not qualify as a Wireless Property, 

 which are
(to be) acquired by either one or both of the Groups or by the Company, including, without limitation, [***]. 
 “Non-Transferring
Party” has the meaning set forth in Section 5.1 of this Agreement. 
 “Offered Shares” has the meaning set
forth in Section 5.1 of this Agreement. 
 “Officers” mean those individuals who, from time to time, are granted written
proxies, to be deposited with the relevant trade registry, to represent the Company in the conduct of its day to day business, and “Officer” means any one of them. 
  

 64 / 67 

 “Parties” means TEM, Portugal Telecom, PT Móveis, the Company and the Further
Parties, and “Party” means any one of them. 
 “Permitted Transferee” means, in the case of a Group, any
Affiliate of said Group. 
 “Person” means any individual, company, corporation, partnership, joint venture, association,
joint stock corporation, trust, unincorporated organisation or Government Authority. 
 “Portugal” has the meaning set forth
in the preamble of this Agreement. 
 “Portugal Telecom” has the meaning set forth in the preamble of this Agreement.

 “PT Group” means Portugal Telecom, PT Móveis, the Further Parties in the PT Group and any Permitted Transferee in
relation to any of the former, if applicable, in accordance with Section 5.2 of this Agreement. 
 “PT Group Put” has
the meaning set forth in Section 6.4 of this Agreement. 
 “PT Móveis” has the meaning set forth in the preamble
of this Agreement. 
 “PT Wireless Properties” means the current Interests in all the Wireless Properties, directly or
indirectly held by the PT Group and which are listed in Exhibit I to this Agreement, together with any Further Interest in a Wireless Property acquired by the PT Group as set forth in Section 1.6.4 of the Subscription Agreement. 
 “Put” has the meaning set forth in Section 5.6 of this Agreement. 
 “Receiving Party” has the meaning set forth in Section 10.2(a) of this Agreement. 
 “Reduced Shareholder” has the meaning set forth in Section 6.1 of this Agreement. 
 “Representatives” has the meaning as set forth in Section 2.7(a) of this Agreement. 
 “Right of First Refusal” shall have the meaning set forth in Section 5.1 of this Agreement. 
 “SCLV” means the Servicio de Compensación y Liquidación de Valores, S.A. 
 “Shareholders” means TEM, Portugal Telecom, PT Móveis, the Further Parties and any Permitted Transferee in relation to any of the
former, if applicable, in accordance with Section 5.2 of this Agreement, and “Shareholder” means any of them. 
 “Shareholders Meeting” means a meeting of the shareholders of the Company held in accordance with the Articles of Association, this Agreement and the Subscription Agreement. 
 “Spain” has the meaning set forth in the preamble of this Agreement. 
 “Subscription Agreement” has the meaning set forth in the preamble of this Agreement. 
 “Subsidiary” means (a) any Person which is under the direct or indirect Control of the Company, (b) any Wireless Property or
New Acquisition in which the Company directly or indirectly holds an Interest, (c) each Person in any chain of Persons holding the aforesaid Interest in such Wireless Property or New Acquisition, and (d) any Person which is under the
direct or indirect Control of the aforesaid Wireless Property or New Acquisition, including, without limitation, the sub-holding companies and the operating companies that own cellular or wireless licenses within Brazil, listed by each of the TEF
Group and the PT Group in Exhibit IV to the Subscription Agreement. 
 “Supervisory Board” means the supervisory board
(raad van commissarissen) of the Company from time to time. 
 “Supervisory Directors” mean the persons who are from
time to time, in accordance with this Agreement, supervisory directors (commissaris) of the Company, “Supervisory Director” means any one of them. 
  

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 “Synergies” has the meaning set forth in Section 1.3(b) of this Agreement. 

“Tag-Along Right” has the meaning set forth in Section 5.1 of this Agreement. 
 “Tax” or “Taxes” mean all taxes, levies, charges or fees, including income, corporation, advance corporation, gross
receipts, transfer, excise, property, sales, use, value-added, license, payroll, pay-as-you-earn, withholding, social security and franchise or other governmental taxes or charges, imposed by the Netherlands, Brazil, Spain or Portugal, or any state,
county, local or foreign government, and such term shall include any interest, penalties or additions to tax attributable to such taxes. 
 [***]. 
 “TEF Group” means TEM, the Further Parties in the TEF Group and any Permitted Transferee in relation to
any of the former, if applicable, in accordance with Section 5.2 of this Agreement. 
 “TEF Wireless Properties” means
all the current Interests in Wireless Properties, directly or indirectly held by the TEF Group and which are listed in Exhibit IV to the Subscription Agreement, together with (a) any Further Interest in a Wireless Property acquired by the TEF
Group as set forth in Section 1.6.4 of this Agreement, and (b) the shares of Telesp Celular Participações, S.A. that the TEF Group will acquire in accordance with Section 1.8 of the Subscription Agreement. 
 “Telefónica” means Telefónica S.A., a corporation duly organized, existing and established in accordance with the laws of
Spain, with head offices at c/ Gran Via, 28, Madrid, Spain. 
 [***]. 
 “TEM” has the meaning set forth in the preamble of this Agreement. 
 “Third Investment Bank” has the meaning set forth in Section 1.5(b)(iii) of the Subscription Agreement. 
 “Third Party” means any prospective purchaser or transferee (other than a Shareholder or a Permitted Transferee) of Company Shares, or
pre-emptive rights to Company Shares, in a bona fide, arm’s length transaction. 
 “Transfer” means any sale,
assignment, transfer (including without limitation by means of a merger, consolidation, amalgamation, spin-off and liquidation) or other form of disposition, whether voluntary or involuntary. 
 “Transferring Party” has the meaning set forth in Section 5.1 of this Agreement. 
 “Vice-chairman of the Managing Board” has the meaning set forth in Section 2.2(g)(i) of this Agreement. 
 “Vice-chairman of the Supervisory Board” has the meaning set forth in Section 2.3(e)(i) of this Agreement. 
 “Wireless Business” means wireless and mobile telephone operations currently or hereafter conducted by any Person in Brazil. 

“Wireless Properties” means the TEF Wireless Properties and the PT Wireless Properties and “Wireless Property” means
any one of them. 
 “Wise Persons” has the meaning set forth in Section 4.2(a) of this Agreement. 
  

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 AGREED AND SIGNED ON 21 SEPTEMBER 2005 IN AMSTERDAM, THE NETHERLANDS BY: 
  

									
		 	TELEFÓNICA MÓVILES, S.A.	 		 	
					
		 		 		 	 /s/ A. P. de Carvalho Viana Baptista
	 	
		 	Name:	 	A. P. de Carvalho Viana Baptista	 		 	
		 	Title:	 	Chairman of the Board	 		 	
				
		 	PORTUGAL TELECOM, SGPS, S.A.	 		 	
				
		 		 	 /s/ C.M. De Lucena e Vasconcellos
	 	
		 	Name:	 	C.M. De Lucena e Vasconcellos	 		 	
		 	Title:	 	Proxy holder	 		 	
				
		 	PT MÓVEIS, SGPS, S.A.	 		 	
				
		 		 	 /s/ C.M. De Lucena e Vasconcellos
	 	
		 	Name:	 	C.M. De Lucena e Vasconcellos	 		 	
		 	Title:	 	Proxy holder	 		 	
				
		 	BRASICEL N.V	 		 	
				
		 		 	 /s/ F. X. Ferreira
	 	
		 	Name:	 	F. X. Ferreira	 		 	
		 	Title:	 	Proxy holder	 		 	
					
	And	 		 		 		 	
					
		 		 		 	 /s/ S. Wine
	 	
		 	Name:	 	S. Wine	 		 	
		 	Title:	 	Proxy holder	 		 	

  

 67 / 67Registration Rights Agreement

 Exhibit 10.1 
 REGISTRATION RIGHTS AGREEMENT 
 THIS REGISTRATION RIGHTS AGREEMENT (this
“Agreement”) dated as of April 18, 2006, is among QC HOLDINGS, INC., a Kansas corporation (the “Company”), DON EARLY (“Early”) and PRIDES CAPITAL FUND I, LP, a Delaware
limited partnership (“Prides”). 
 RECITALS 
 1. The Company and Early are parties to a Registration Rights Agreement dated as of June 22, 2004, which grants to the estate of Early certain registration rights for the common stock of the Company held
by the estate of Early and certain other persons (the “2004 Registration Rights Agreement”). 
 2. Prides, directly
or through its affiliated funds, is the holder of 2,047,607 shares of common stock of the Company, is this day acquiring an additional 500,000 shares of common stock of the Company and may seek to acquire additional shares of common stock of the
Company in the future. 
 3. Effective the date hereof, Kevin A. Richardson II, a Managing Member of the sole general partner of
Prides, has been appointed to the Board of Directors of the Company, and in such capacity, Mr. Richardson will have access, from time to time, to material nonpublic information relating to the Company. 
 4. The Company, Early and Prides desire to provide for the orderly sale of common stock of the Company by Early and Prides from time to time in a
manner that is intended to protect the Company and its other stockholders, and, accordingly, the Company is granting to the Holders described below certain demand and piggyback registration rights with respect to the shares of common stock of the
Company held by the Holders from time to time. 
 NOW, THEREFORE, the parties agree as follows: 
 SECTION 1. GENERAL. 
 1.1 Definitions. As used
in this Agreement the following terms have the following meanings: 
 “Affiliate” of any Person means a Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the first mentioned Person. A Person will be deemed to control another Person if such first Person possesses, directly or indirectly, the
power to direct, or cause the direction of the management and policies of the second Person, whether through the ownership of voting securities, by contract or otherwise. 
 “Common Stock” means (i) the common stock, par value $0.01 per share, of the Company and (ii) any other securities into which or for which any of the securities described in clause
(i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, conversion, sale of assets or otherwise. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  

 -1- 

 “Holder” means Early, Prides, the estate of Don Early, any trust, testamentary or
otherwise, that is funded in whole or in part with shares of Common Stock from Early or the estate of Don Early, and any Affiliate of Early or Prides, or any assignee of Early or Prides in accordance with Section 2.8. 
 “Initiating Holders” means any Holder or Holders who in the aggregate hold not less than 5% of the then outstanding shares of Common
Stock. 
 “Person” means any present or future natural person or any corporation, association, partnership, joint venture,
limited liability, joint stock or other company, business trust, trust, organization, charitable organization, business or government or any governmental agency or political subdivision thereof, including the estate of Early, or any testamentary
trust created by Early that is or becomes a Holder. 
 “Register,” “registered,” and “registration”
refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of the registration statement. 
 “Registrable Securities” means any Common Stock held by any Holder. Registrable Securities do not include any shares of Common Stock
sold by a Person to the public either pursuant to a registration statement or SEC Rule 144 or sold in a private transaction in which the transferor’s rights under Section 2.8 of this Agreement are not assigned. Any reference to a
number of shares of Registrable Securities will be adjusted, as appropriate, to reflect stock splits, stock dividends, combinations, exchanges and other recapitalizations affecting the Common Stock. 
 “Registration Expenses” means all expenses incurred by the Company in complying with Sections 2.1, 2.2 or 2.4, including
all registration and filing fees, printing expenses, escrow fees, fees and disbursements of counsel for and independent accountants to the Company and blue sky fees and expenses, and the fees and expenses of one firm of counsel to all selling
Holders in a registration, not to exceed $20,000 for Holders’ counsel for each registration. 
 “SEC” means the
Securities and Exchange Commission. 
 “Securities Act” means the Securities Act of 1933, as amended. 
 “Selling Expenses” means all underwriting discounts and selling commissions applicable to the sale of Registrable Securities and all
fees and expenses of counsel to any Holder participating in a registration in excess of counsel fees to be paid by the Company as part of the Registration Expenses. 
 SECTION 2. REGISTRATION RIGHTS. 
 2.1 Demand Registration. 
 (a) Subject to the conditions of Section 2.1, if the Company receives a written request (the “Demand Request”) from an
Initiating Holder or Holders that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities then outstanding, then the Company will, within 10 days after the receipt thereof, give written
notice of the Demand Request to all other Holders (the “Demand Notice”), and the other Holders will have 20 days after receipt of the Demand Notice to notify the Company, in writing, of their desire to participate in the requested
registration. Subject to the limitations of this Section 2.1, the Company will use its reasonable efforts to effect, as soon as practicable, the registration under the Securities Act of all Registrable Securities that the Holders request
to be registered. 
  

 -2- 

 (b) The Company will not be obligated to effect any registration, qualification or compliance
pursuant to this Section 2.1: 
 (i) if the Holders propose to sell Registrable Securities for gross
proceeds of less than $15,000,000; 
 (ii) if the Company furnishes to the Holders a certificate signed by a duly
authorized officer of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be detrimental to the Company and its stockholders for the demand registration to be effected at that time, in which event
the Company will have the right to defer the filing of the demand registration statement for a period of not more than 90 days after receipt of the request of the Holders under this Section 2.1; provided, that the right to delay a
request may be exercised by the Company not more than once in any 12-month period; 
 (iii) if the Company has already
effected four registrations for the Holders pursuant to this Section 2.1 or one registration pursuant to this Section 2.1 within the preceding 12 months (counting for these purposes only a registration that has been declared
or ordered effective by the SEC and that is not materially interfered with by any stop order, injunction or other such requirement of the SEC); or 
 (iv) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting the registration, unless the Company is
already subject to service in that jurisdiction. 
 (c) If the Company is required to effect a Demand Registration, the Company will
file a Form S-3 registration statement or another form available for registering Registrable Securities for sale to the public, covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request of
the Holders. 
 (d) If the Initiating Holders intend to distribute the Registrable Securities covered by the Demand Request by means
of an underwritten public offering, they will so advise the Company in the Demand Request, and the Company will include that information in the Demand Notice. The right of any Holder to participate in any registration pursuant to this
Section 2.1 will be conditioned upon that Holder’s participation in the underwritten public offering and the inclusion of that Holder’s Registrable Securities in the underwritten public offering (unless otherwise mutually
agreed to by a majority-in-interest of the Initiating Holders and that Holder) to the extent provided herein. If the Company requests inclusion in the registration of securities being sold for its own account, or if other Persons (as a result of
contractual “piggyback” registration rights, invitation by the Company or otherwise) request inclusion in a Demand Registration pursuant to this Section 2.1, the Initiating Holders will, on behalf of all Holders, offer to
include such securities in the underwritten public offering contemplated by the Demand Request, subject to the cutback provisions of this Section 2.1(d). The Company will (together with all Holders and other Persons requesting inclusion
of securities in any registration pursuant to this Section 2.1) enter into an underwriting agreement in customary form with the underwriter(s) reasonably acceptable to the Company and selected for the underwritten public offering by a
majority in interest of the Initiating Holders. If the underwriter(s) advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be included in the underwritten public offering, (1) the
Company will so advise all Holders who have requested to include Registrable Securities in the registration, and the number of shares of Registrable Securities to be included in the Demand Registration and underwritten public offering will be
allocated among the Holders requesting registration in proportion, as nearly as practicable, to the respective number of shares of Registrable Securities held by each Holder (or in any other proportions as is mutually agreed to by the selling
Holders), and (2) the Common Stock or other and 
  

 -3- 

 the securities requested by other Persons to be included in the Demand Registration as a result of contractual,
“piggyback” registration rights, invitation by the Company, or otherwise, as well as any securities to be offered by the Company for its own account, will be excluded from the Demand Registration prior to the exclusion of any Registrable
Securities held by any Holders. If any Holder who has requested to include Registrable Securities in a Demand Registration does not agree to the terms of any underwritten public offering, that Holder will be excluded therefrom by written notice from
the Company, the underwriter(s), or the Initiating Holders. If, by exclusion of that Holder from the underwritten public offering, a greater number of Registrable Securities held by other Holders may be included in the underwritten public offering,
the Company will offer to all other Holders who have requested to include Registrable Securities in the registration the right to include additional Registrable Securities in proportion, as nearly as practicable, to the respective number of shares
of Registrable Securities held by each participating Holder (or in any other proportions as is mutually agreed to by the selling Holders). Any Registrable Securities, Common Stock or other securities excluded or withdrawn from the underwritten
public offering contemplated by the Demand Request will also be excluded from the corresponding registration statement. 
 (e) Only
two of the four demand registration rights permitted under this Section 2.1 may be exercised by Early, any Affiliates of Early and any assignees of Early in accordance with Section 3.8, in the aggregate, and only two demand
registration rights permitted under this Section 2.1 may be exercised by Prides, any Affiliates of Prides and any assignees of Prides in accordance with Section 2.8, in the aggregate. 
 2.2 Piggyback Registration. 
 (a)
Piggyback Registration Rights. The Company will notify all Holders in writing at least 20 days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including
registration statements relating to secondary offerings of securities of the Company, but excluding registration statements relating to employee benefit plans or with respect to corporate reorganizations or other transactions under SEC Rule 145) and
will afford each Holder an opportunity to include in that registration statement all or part of the Registrable Securities held by the Holder. Each Holder desiring to include in the registration statement all or any part of the Registrable
Securities held by him or it must, within 20 days after the notice from the Company, so notify the Company in writing. The Holder’s notice must state the intended method of disposition of the Registrable Securities by the Holder. If a Holder
decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, the Holder will nevertheless continue to have the right to include any Registrable Securities in any subsequent registration
statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth in this Section 2.2. 
 (b) Underwriting. If the registration statement under which the Company gives notice under this Section 2.2 is for an underwritten
offering, the Company will so advise the Holders. In that event, the right of any Holder to be included in a registration pursuant to this Section 2.2 will be conditioned upon the Holder’s participation in the underwriting and the
inclusion of the Holder’s Registrable Securities to the extent provided in this Section 2.2(b). All Holders proposing to distribute their Registrable Securities through the underwriting will enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for the underwriting by the Company. If the underwriter determines in good faith that marketing factors require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting will be allocated, first, to the Company, second, to the Holders, on a pro rata basis based on the total number of Registrable Securities held by the Holders, and third, to
any other Persons who are to participate in the registration by contractual right or invitation by the Company, on a pro rata basis based on the total 
  

 -4- 

 number of shares of Common Stock held by those Persons. If any Holder disapproves of the terms of any underwriting, the
Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least 10 days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from the underwriting
will be excluded and withdrawn from the registration. 
 (c) Right to Terminate Registration. The Company will have the right to
terminate or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of the registration, whether or not any Holder has elected to include securities in the registration. The Registration Expenses of
the withdrawn registration will be borne by the Company in accordance with Section 2.5. 
 2.3 Expenses of Registration.
Except as specifically provided in this Section 2, all Registration Expenses incurred in connection with any registration will be borne by the Company. All underwriting discounts and selling commissions incurred in connection with
any registrations under this Section 2 will be borne by the holders of the securities registered pro rata on the basis of the number of shares registered, and any other Selling Expenses incurred in connection with any registration
under this Section 2 will be borne by the stockholder incurring them. The Company will not, however, be required to pay for expenses of any registration proceeding begun pursuant to Section 2.1, the request of which is
subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is based upon material adverse information concerning the condition, business or prospects of the Company of which the initiating Holders were not aware at the time of
the request or (b) the Holders of a majority of Registrable Securities agree to forfeit their right to one requested registration pursuant to Section 2.1, in which event the right will be forfeited by all Holders. If the Holders are
required to pay the Registration Expenses pursuant to the preceding sentence, the expenses will be borne by the Holders requesting the registration pro rata on the basis of the number of shares for which registration was requested. If the
Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then the Holders will not forfeit their rights pursuant to Section 2.2 to a demand registration. 
 2.4 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities, the Company will, as expeditiously as
reasonably possible: 
 (a) Prepare and file with the SEC a registration statement with respect to the Registrable
Securities and use all reasonable best efforts to cause the registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep the registration statement effective
until the Holder or Holders have completed the distribution described in the registration statement relating thereto (but for no more than 120 days or such lesser period until all such Registrable Securities are sold) and to comply with the
provisions of the Securities Act with respect to the sale of securities covered by the registration statement for that period; 
 (b) Prepare and file as soon as reasonably practicable with the SEC the amendments and supplements to the registration statement and the prospectus used in connection with the registration statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all securities covered by the registration statement for the period set forth in paragraph (a); 
 (c) Furnish as soon as reasonably practicable to the Holders the number of copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; 
  

 -5- 

 (d) As soon as reasonably practicable use its reasonable best efforts to register
and qualify the securities covered by the registration statement under the state securities or Blue Sky laws as reasonably requested by the Holders; but the Company will not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any state or jurisdiction, unless the Company is already subject to service in such jurisdiction; 
 (e) If any underwritten public offering, enter into an underwriting agreement, in usual and customary form, with the managing
underwriter(s) of the offering and perform its obligations thereunder. Each Holder participating in the underwriting will also enter into and perform its obligations under the underwriting agreement; 
 (f) Immediately notify each Holder covered by the registration statement at any time when a prospectus relating thereto is required
to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in the registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request of any selling Holder, prepare a supplement or amendment to the prospectus so that, as
thereafter delivered to the purchasers of Registrable Securities, the prospectus will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading; 
 (g) Cause all Registrable Securities registered pursuant to this Agreement to be listed on each securities exchange or quotation
system on which similar securities issued by the Company are then listed or quoted; 
 (h) Otherwise use its best
efforts to comply with the securities laws of the United States and other applicable jurisdictions and all applicable rules and regulations of the SEC and comparable governmental agencies in other applicable jurisdictions; 
 (i) Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number for all Registrable Securities, in
each case not later than the effective date of the registration; 
 (j) Use its best efforts to furnish, on the date
that the Registrable Securities are delivered to the underwriters for sale, if the securities are being sold through underwriters, (i) an opinion, dated as of that date, of the counsel representing the Company for the purposes of the
registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, and (ii) a letter dated as of that date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters; and 
 (k) In the event of any underwritten public offering, cooperate with the Holders, the underwriters participating in the offering
and their counsel in any due diligence investigation reasonably requested by the Holders or the underwriters in connection therewith, and participate, to the extent reasonably requested by the managing underwriter for the offering or the Holders, in
efforts to sell the Registrable Securities under the offering that would be customary for underwritten primary offerings of a comparable amount of equity securities by the Company. 
  

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 2.5 Termination of Registration Rights. All registration rights granted under this
Section 2 will terminate and be of no further force, as to each Holder, when that Holder (together with its Affiliates) holds less than 5% of the Company’s then outstanding shares of Common Stock. 
 2.6 Delay of Registration; Furnishing Information. 
 (a) No Holder will have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or
implementation of this Section 2. 
 (b) It is a condition precedent to the obligations of the Company to take any action
pursuant to Sections 2.1 or 2.2 that the selling Holders furnish to the Company any information regarding themselves, the Registrable Securities or Common Stock held by them and the intended method of disposition of the Registrable
Securities or Common Stock as is reasonably required to effect the registration of their Registrable Securities or Common Stock. 
 2.7
Indemnification. If any Registrable Securities or Common Stock are included in a registration statement under Sections 2.1 or 2.2: 
 (a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the Affiliates, partners, stockholders, officers and directors of each Holder, any underwriter (as defined in the
Securities Act) for the Holder and each Person, if any, who controls the Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages (including reasonable attorneys’ fees and expenses
incurred in connection with investigating, defending or settling any claim, loss, liability, or damage), or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law,
insofar as the losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in the registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by the registration statement; and the Company will pay as incurred to each
Holder, partner, officer, director, underwriter or controlling person or other aforementioned person for any legal or other expenses reasonably incurred by them in connection with investigating or defending the loss, claim, damage, liability or
action. The indemnity contained in this Section 2.7(a) will not apply to amounts paid in settlement of any loss, claim, damage, liability or action if the settlement is effected without the consent of the Company, which consent will not
be unreasonably withheld or delayed, nor will the Company be liable in any case for any loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation that occurs solely from reliance upon and in conformity
with written information furnished expressly for use in connection with the registration by a Holder, partner, officer, director, underwriter or controlling person of a Holder. 
 (b) To the extent permitted by law, each Holder will, if Registrable Securities held by the Holder are included in the
registration, severally but not jointly, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act, any underwriter and
any 
  

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 other Holder selling securities under the registration statement or any other Holder’s partners,
directors or officers or any person who controls the Holder, against any losses, claims, damages or liabilities to which the Company or any director, officer, controlling person, underwriter or other Holder, or partner, director, officer or
controlling person of the other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon
any Violation, in each case to the extent (and only to the extent) that the Violation occurs solely from reliance upon and in conformity with written information furnished by the Holder, as applicable, furnished expressly for use in connection with
the registration by a Holder, partner, officer, director, underwriter or controlling person of a Holder, and each Holder will pay as incurred any legal or other expenses reasonably incurred by the Company or any director, officer, controlling
person, underwriter or other Holder, or partner, officer, director or controlling person of the other Holder in connection with investigating or defending the loss, claim, damage, liability or action if it is judicially determined that there was a
Violation of that nature. The indemnity contained in this Section 2.7(b) will not apply to amounts paid in settlement of any loss, claim, damage, liability or action if the settlement is effected without the consent of the Holder, which
consent will not be unreasonably withheld or delayed; and in no event will any indemnity under this Section 2.7 exceed the net proceeds from the offering received by the Holder. 
 (c) Promptly after receipt by an indemnified party under this Section 2.7 of notice of the commencement of any action
(including any governmental action), the indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.7, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party, to assume the defense thereof with counsel mutually satisfactory to the
parties. An indemnified party will have the right to retain its own counsel, with the fees and expenses to be paid by the indemnifying party, if representation of the indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between the indemnified party and any other party represented by counsel in that proceeding. But, in no event will the indemnifying party be responsible for the fees and expenses of more
than one counsel or firm (in addition to counsel to the indemnifying party) for all indemnified parties, as a group. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any action, if
materially prejudicial to its ability to defend the action, will relieve the indemnifying party of any liability to the indemnified party under this Section 2.7 to the extent of such prejudice, but the omission so to deliver written
notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.7. 
 (d) If the indemnification provided for in this Section 2.7 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying the indemnified party hereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by the indemnified party as a result of the loss, claim, damage or liability in the proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in the loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and the indemnified party will be
determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or the indemnified
party and the parties’ relative intent, knowledge, access to 
  

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 information and opportunity to correct or prevent the statement or omission. But, in no event will any
contribution by a Holder hereunder exceed the net proceeds from the offering received by the Holder, as applicable. 
 (e)
To the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, as between the Holders
and the Company the provisions of the underwriting agreement will control. 
 (f) The obligations of the Company,
Holders under this Section 2.7 will survive completion of any offering of Registrable Securities in a registration statement and the termination of this Agreement. No indemnifying party, in the defense of any claim or litigation, may,
except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement that (i) has any ongoing restrictions or covenants pertaining to the indemnified party or (ii) does not include as an
unconditional term thereof the giving by the claimant or plaintiff to the indemnified party of a release from all liability in respect to the claim or litigation. 
 2.8 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee that is
an Affiliate of Early or Prides, if (i) the Holder, within 10 days after the transfer, furnishes to the Company written notice of the name and address of the transferee or assignee and the securities with respect to which the registration
rights are being assigned and (ii) the transferee agrees to be subject to all restrictions set forth in this Agreement. 
 2.9 No
Limitations on Subsequent Registration Rights. Nothing contained in this Agreement will restrict or limit the right of the Company to enter into any agreement with any holder or prospective holder of any securities of the Company that would
allow that holder or prospective holder (a) to include securities in any registration filed under Section 2.1 or Section 2.2, unless under the terms of that agreement, that holder or prospective holder may include
securities in any registration only to the extent that the inclusion of those securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to demand registration of their securities. 
 2.10 “Market Stand-Off” Agreement. Each Holder, if requested by the Company and a managing underwriter, agrees that it will not, without
the prior written consent of the Company and the managing underwriter, during the period commencing on the date of the final prospectus relating to any underwritten public offering of the Company and ending on the date specified by the Company and
the managing underwriter (that period not to exceed 90 days in the case of any underwritten offering) (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock (whether those shares or any other
securities are then owned by the Holder or are thereafter acquired) or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (a) or (b) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing provisions of this Section 2.10 will not apply to the sale of any
shares included in the registration statement filed in connection with the offering, and will only be applicable to the Holders if all executive officers and directors of the Company and all other persons who have registration rights enter into
similar agreements. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in any such offering that are consistent with this Section 2.10 or that are necessary to give further effect
thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such
agreements. 
  

 -9- 

 In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with
respect to the Registrable Securities of each Holder until the end of such period. 
 SECTION 3. MISCELLANEOUS. 
 3.1 Governing Law. This Agreement is governed by and will be construed in accordance with the laws (other than the conflict of laws rules) of the
State of Delaware. 
 3.2 Stock Splits, etc. All references in this Agreement to numbers of shares and per share amounts will be
adjusted to give effect to any stock split, stock dividend, reverse stock split or similar combination or division of the outstanding shares of Common Stock 
 3.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof inure to the benefit of, and are binding upon, the successors, assigns, heirs, executors, and administrators of
the parties and inure to the benefit of and are enforceable by each person who becomes a Holder of Registrable Securities from time to time. Prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities
specifying the full name and address of the transferee, the Company may deem and treat the person listed as the record holder of those shares in the Company’s records as the absolute owner and holder of those shares for all purposes, including
the payment of dividends or any redemption price. 
 3.4 Entire Agreement; Termination of Prior Agreement. This Agreement constitutes
the entire understanding and agreement between the parties with regard to the subjects hereof, and no party will be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set
forth herein. The 2004 Registration Rights Agreement and all obligations of the Company thereunder to register any shares of Common Stock on behalf of Early, his estate, heirs, successors or assigns, are terminated, effective as of the date of this
Agreement. 
 3.5 Severability. If one or more of the provisions of this Agreement should, for any reason, be held to be invalid,
illegal or unenforceable in any respect, that invalidity, illegality, or unenforceability will not affect any other provisions of this Agreement, and this Agreement will be construed as if the invalid, illegal or unenforceable provision had never
been contained herein. 
 3.6 Amendment and Waiver. 
 (a) Except as otherwise expressly provided, this Agreement may be amended or modified upon the written consent of (i) the Company, (ii) Early or the Holders of at least a majority of the Registrable
Securities transferred to those Holders by Early in accordance with Section 2.8, and (iii) Prides or the Holders of at least a majority of the Registrable Securities transferred to those Holders by Prides in accordance with
Section 2.8. Any amendment or modification so approved will be binding upon all Holders of Registrable Securities without regard to whether they have consented to the amendment or modification. 
 (b) Except as otherwise expressly provided, the obligations of the Company and the rights of the Holders under this Agreement may be waived with
the written consent of the Company, (ii) Early or the Holders of at least a majority of the Registrable Securities transferred to those Holders by Early in accordance with Section 2.8, and (iii) Prides or the Holders of at
least a majority of the Registrable Securities transferred to those Holders by Prides in accordance with Section 2.8. Any waiver so made will be binding upon all Holders of Registrable Securities without regard to whether they have
consented to the waiver. 
  

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 3.7 Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to
any Holder, upon any breach, default or noncompliance of the Company under this Agreement will impair any right, power, or remedy, nor will it be construed to be a waiver of any breach, default or noncompliance, or any acquiescence therein, or of
any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any Holder’s part of any breach, default or noncompliance under this Agreement or
any waiver on that Holder’s part of any provisions or conditions of this Agreement must be in writing and will be effective only to the extent specifically set forth in writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Holders, will be cumulative and not alternative. 
 3.8 Notices. All notices required or permitted hereunder must be in
writing and be given: (a) by personal delivery to the party to be notified, (b) by confirmed facsimile during normal business hours of the recipient, (c) by registered or certified mail, return receipt requested, postage prepaid, or
(d) by a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications must be sent to the party to be notified at the address set forth on the signature pages or at any other
address as that party may designate by 10 days advance written notice to the other parties. 
 3.9 Titles and Subtitles. The titles of
the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 
 3.10 Termination of Covenants of the Company. This Agreement (other than the obligations of the Company under Sections 2.3 and 2.7 with respect to any registration effected prior to the termination of this Agreement)
will expire and terminate on the date on which the Common Stock of the Company is no longer registered as a class of equity securities under the Exchange Act. 
 3.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument. 
 [Remainder of this page intentionally left blank] 
  

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 IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed
effective as of the Effective Date. 
  

			
	QC HOLDINGS, INC.
		
	By:	 	 /s/ Darrin J. Andersen

		 	Darrin J. Andersen, President

			
		
	Address:	 	9401 Indian Creek Parkway, Suite 1500
		 	Overland Park, Kansas 66210
	
	 /s/ Don Early

	DON EARLY
		
	Address:	 	9401 Indian Creek Parkway, Suite 1500
		 	Overland Park, Kansas 66210
	
	PRIDES CAPITAL FUND I, LP
		
	By:	 	Prides Capital Partners, LLC
		
	By:	 	 /s/ Murray Indick

	Name:	 	Murray Indick
	Title:	 	Managing Member

			
	Address:	 	44 Montgomery Street, Suite 860
		 	San Francisco, CA 94104

  

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