Document:

Exhibit 4.3 - Shareholders Agreement

					
	 	 	  
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 Exhibit 4.3 
  
 SHAREHOLDERS AGREEMENT 
  
 Dated as of October 17, 2002 
  
 Amended as noted for the purposes of this filing as of December 3, 2004 
  
 By and among 
  
 TELEFÓNICA MÓVILES, S.A., 
  
 PORTUGAL TELECOM, SGPS, S.A., 
  
 PT MÓVEIS, SGPS, S.A., 
  
 and 
  
 BRASILCEL B.V., 
  
 in relation to 
  
 BRASILCEL B.V. 
  

					
	 	 	  
 Any text removed pursuant to Telefónica, S.A.’s confidential treatment request has been separately
filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 TABLE OF CONTENTS 
  

							
	Section

	 	 	 	 	  	Page

	1	 	 	 	SHARE CAPITAL AND BUSINESS OF THE COMPANY	  	6
	 	 	1.1	 	Share Capital and General Share Premium Reserve	  	6
	 	 	1.2	 	Company Growth Principles	  	7
	 	 	1.3	 	Scope of Business of the Company; Synergies	  	8
	 	 	1.4	 	Actions relating to Company Shares	  	8
	 	 	1.5	 	Exercise of Voting Rights	  	9
	2	 	 	 	BOARD OF DIRECTORS	  	9
	 	 	2.1	 	Governance Principles	  	9
	 	 	2.2	 	Composition of the Board of Directors	  	10
	 	 	2.3	 	The Chairman and the Vice-Chairman of the Board of Directors	  	11
	 	 	2.4	 	Meetings of the Board of Directors	  	11
	 	 	2.5	 	Place of the Board of Directors’ Meetings	  	12
	 	 	2.6	 	Board of Directors Decisions	  	12
	 	 	2.7	 	Secretary and Minutes of the Board of Directors	  	14
	 	 	2.8	 	Officers	  	15
	 	 	2.9	 	Performance of the Officers	  	16
	 	 	2.10	 	Meetings of the Officers	  	16
	 	 	2.11	 	Subsidiary Governance	  	16
	 	 	2.12	 	Effects of Dilution on the Provisions of this Section 2	  	17
	 	 	2.13	 	Representation of Company	  	18
	3	 	 	 	SHAREHOLDERS MEETINGS AND RIGHTS	  	18
	 	 	3.1	 	Shareholders Meetings	  	18
	 	 	3.2	 	Call Procedure	  	19
	 	 	3.3	 	Chairing of Shareholders Meetings	  	19
	 	 	3.4	 	Shareholder Decisions	  	19
	 	 	3.5	 	Effects of Dilution on the Provisions of this Section 3	  	20
	4	 	 	 	CELLULAR CHAIRMEN DEADLOCK, WISE PERSONS PROCEDURE AND LIQUIDATION	  	21
	 	 	4.1	 	Cellular Chairman Deadlock	  	21
	 	 	4.2	 	Wise Persons Procedure	  	22
	 	 	4.3	 	Liquidation of the Company	  	23
	5	 	 	 	TRANSFER OF SHARES	  	24
	 	 	5.1	 	Transfer of shares	  	24
	 	 	5.2	 	Permitted Transferees; Transfers in the Context of Consolidation	  	25
	 	 	5.3	 	Indirect Transfers	  	25
	 	 	5.4	 	Right of First Refusal	  	25
	 	 	5.5	 	Tag-Along Right	  	30
	 	 	5.6	 	Conditional Put	  	30
	 	 	5.7	 	Pre-emptive Rights	  	31
	 	 	5.8	 	Tax Efficiency	  	32
	 	 	5.9	 	Encumbrance of Company Shares	  	32
	 	 	5.10	 	Transfer restriction in Articles of Association, Exercise of voting rights	  	32

  

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	 	 	 	 	 	  	Page

	6	 	 	 	DILUTION	  	32
	 	 	6.1	 	Dilution	  	32
	 	 	6.2	 	Diluted Interest Between 50% and 40%	  	33
	 	 	6.3	 	Diluted Interest Below 40%	  	33
	 	 	6.4	 	PT Group Put	  	34
	 	 	6.5	 	Governance and Dilution in the Event of Listing	  	35
	 	 	6.6	 	Listing of Holding Companies	  	35
	7	 	 	 	FINANCIAL POLICIES	  	35
	 	 	7.1	 	Financial policies	  	35
	 	 	7.2	 	Business Plan and Financing of the Company	  	35
	 	 	7.3	 	GAAP	  	40
	 	 	7.4	 	Annual Budget	  	40
	 	 	7.5	 	Books of Account	  	41
	 	 	7.6	 	Reasonable Access	  	41
	 	 	7.7	 	Management Fees*	  	41
	 	 	7.8	 	Financial Services	  	42
	8	 	 	 	NON-COMPETITION AND BUSINESS OPPORTUNITIES	  	42
	 	 	8.1	 	Non-compete	  	42
	 	 	8.2	 	Wireless Business Opportunities	  	42
	9	 	 	 	INTEREST IN NEW ACQUISITIONS AND FURTHER INTERESTS IN WIRELESS PROPERTIES	  	42
	 	 	9.1	 	Acquisition of Interests in New Acquisitions and Further Interests	  	42
	10	 	 	 	CONFIDENTIALITY	  	43
	 	 	10.1	 	Confidential Information	  	43
	 	 	10.2	 	Use and Disclosure	  	43
	 	 	10.3	 	Duties of the Receiving Party	  	43
	 	 	10.4	 	Exclusions	  	44
	11	 	 	 	TERMINATION	  	44
	 	 	11.1	 	Termination	  	44
	 	 	11.2	 	Survival of Obligations and Liabilities	  	45
	12	 	 	 	COVENANTS, REPRESENTATIONS AND WARRANTIES, REGISTRATION	  	45
	 	 	12.1	 	Covenants, Representations and Warranties of the Shareholders and the Company	  	45
	 	 	12.2	 	Survival of Covenants, Representations and Warranties	  	46
	 	 	12.3	 	Shareholders’ Register	  	46
	 	 	12.4	 	Consent by the Company	  	46
	13	 	 	 	GOVERNING LAW AND SETTLEMENT OF DISPUTES	  	46
	 	 	13.1	 	Governing Law	  	46
	 	 	13.2	 	Arbitration	  	46
	14	 	 	 	COMMUNICATIONS	  	47
	 	 	14.1	 	Communications	  	47

	*	Amended for the purposes of this filing as of December 3, 2004 

  

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	15	 	 	 	MISCELLANEOUS PROVISIONS	  	48
	 	 	15.1	 	Entire Agreement	  	48
	 	 	15.2	 	Modification and Amendment; Indexation	  	49
	 	 	15.3	 	Waiver	  	49
	 	 	15.4	 	Survival of Provisions	  	49
	 	 	15.5	 	Exclusive Benefit of the Parties and the Company	  	49
	 	 	15.6	 	Bona fide	  	49
	 	 	15.7	 	Penalty and delay interest	  	50
	 	 	15.8	 	Counterparts	  	50
	 	 	15.9	 	Language	  	50
	 	 	15.10	 	Period of Time	  	50
	 	 	15.11	 	General Interpretation	  	51
	 	 	15.12	 	No Partnership	  	51
	 	 	15.13	 	Severability	  	51
	 	 	15.14	 	Taxes and Expenses	  	51
	 	 	15.15	 	IPO	  	52
	 	 	15.16	 	Public Announcements	  	52
	 	 	15.17	 	Joint and Several	  	53
	16	 	 	 	DEFINITIONS	  	53
	 	 	16.1	 	Definitions	  	53

  

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 THIS AGREEMENT is made as of October 17, 2002 by and among: 
  
 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”); 
  
 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”); 
  
 PT MÓVEIS, SGPS, S.A., a corporation
duly organized, existing and established in accordance with the laws of Portugal, with head offices at Av. 5 de Outubro, 208, 4o andar, Lisbon, Portugal, represented herein in accordance with its bylaws (“PT
Móveis”); 
  
 and 
  
 BRASILCEL B.V., a private company with limited liability duly organized,
existing and established in accordance with the laws of the Netherlands, with corporate seat at Strawinskylaan 3105 (1077 ZX), Amsterdam, the Netherlands, represented herein in accordance with its articles of association (the
“Company”). 
  

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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.

  
 RECITALS 
  

	(A)	WHEREAS, Portugal Telecom, PT Móveis and TEM, among others, in accordance with the terms of a certain Joint Venture Agreement dated January 23, 2001 (the “Joint
Venture Agreement”), entered into a certain Subscription Agreement dated the date hereof (the “Subscription Agreement”), and agreed to use the Company and to subscribe for all of the Company Shares with all of
their properties now or hereafter used in connection with the operation of the Wireless Business, including the Interest in Wireless Properties and the Global Telecom Interest listed in Exhibit I hereto 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)	WHEREAS, the Parties 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; 

  

	(C)	WHEREAS, the Parties commit to comply and to cause the Company to comply with this Agreement; 

  

	(D)	NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the Parties do hereby agree as follows: 

  
 SECTION 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 Euro 18,000 (eighteen thousand) on the date hereof, consists of 18,000 (eighteen thousand) Company Shares, with a nominal
value of Euro 1 (one Euro) each, divided between the Shareholders in the proportion of 50% (fifty percent) to each Group as follows: 

  

	 	(i)	TEM:                 9000 (nine thousand) Company Shares; 

  

	 	(ii)	PT Móveis:                 8999 (eight thousand nine hundred ninety nine) Company Shares; and

  

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

  

	(b)	The Shareholders further agree to procure that the Company establishes 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”). 

  

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	(c)	The Shareholders undertake to take all necessary actions to transform the corporate nature of the Company from a private company with limited liability (besloten
vennootschap) into a limited liability company (naamloze vennootschap) under the laws of the Netherlands. The Shareholders shall further 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: 

  

	 	(X)	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: 

  

	 	(i)	expands footprint in Brazil; 

  

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

  

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

  

	 	(iv)	enhances the platform for growth and profitability; 

  

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

  

	 	(vi)	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 
  

	 	(Y)	that: 

  

	 	(i)	[***]; and 

  

	 	(ii)	additional spectrum and licenses, provided that spectrum and licenses enhance shareholders value as demonstrated by an independent analysis, are within the Company Growth
Principles. 

  

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	(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 [***] holds directly or indirectly [***] in cellular and wireless operators [***], the Shareholders shall procure to [***] in
the management of the Company of all potential [***] 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 Company through its CEO, which management team shall analyse the matter; or (ii) directly to the Board of Directors. In the event that the management team of the
Company or the Board of Directors 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 management team of
the Company and, within thirty (30) days following the proposal of the Proposing Party, such management team 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) to the Board of Directors for final decision by [***]. In the event that, pursuant to the foregoing, a manager authorised to represent the Company approves the proposal or
the Board of Directors 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)	The identification and use of the most appropriate brand will be made by mutual agreement between TEM and PT Móveis and may be used by the TEF Group or the PT Group anywhere.
The Parties agree that in the event of [***], the brand thus identified to be used by the Company 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. 
  

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	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. 
  
 SECTION 2 BOARD OF DIRECTORS

  

	2.1	Governance Principles 

  

	(a)	The Shareholders agree that, subject to applicable laws, the Articles of Association and this Agreement, the Board of Directors shall be responsible for the management of the
Company. 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 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, in the Board of Directors or in the board
of directors of any of the 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 

  

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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. 

  

	2.2	Composition of the Board of Directors 

  

	(a)	The Company shall have a Board of Directors composed of 12 (twelve) members each Director having a term in office of 3 (three) years, re-election being permitted. Subject to the
provisions of Sections 2.12 and 6 hereto, each of the TEF Group and the PT Group shall have the right to make binding nominations to appoint 6 (six) Directors, provided that at least 3 (three) of each such 6 (six) Directors shall be required
to be resident in the Netherlands.  

  

	(b)	Each of the Shareholders agrees to exercise its voting rights in the relevant Shareholders Meeting to appoint the Directors nominated by each of the TEF Group and the PT Group in
terms of Section 2.2(a) above. In the event of a vacancy in the Board of Directors (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 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 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 suspension or removal of a Director nominated by the Shareholders in the other Group, provided that this is for Just Cause. The Shareholder requesting the replacement of
a Director shall deliver a notice to the other Shareholders which shall contain the request to replace the relevant Director and in the event that such 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 replace the relevant 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 Directors are appointed in terms of the
provisions of this Section 2.2, shall be such that the Directors will not have the right to indemnification in the event of suspension or removal from their duty as Directors. 

  

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	2.3	The Chairman and the Vice-Chairman of the Board of Directors 

  

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

  

	(b)	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 shall have the following powers and duties: 

  

	 	(i)	to call the Shareholders Meetings and the Board of Directors meetings whenever deemed necessary or at the binding request of any 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 Director; 

  

	 	(ii)	to ensure that the decisions taken at the Shareholders Meetings and at the Board of Directors meetings are properly implemented; and 

  

	 	(iii)	to chair the Shareholders Meetings and the Board of Directors meetings. 

  

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

  

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

  

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

  

	2.4	Meetings of the Board of Directors 

  

	(a)	The Board of Directors shall hold meetings on a regular basis, but at least once every quarter and, on an extraordinary basis, whenever called by the Chairman in accordance with
Section 2.3(b)(i) above. The quorum for a meeting of the Board of Directors shall be 7 (seven) Directors. Directors shall participate at Board of Directors meetings (i) in person, provided that an absent Director may be represented at any
such meeting by proxy granted by the absent Director to any other Director who was appointed pursuant to a binding nomination of the Group which nominated the absent Director, or (ii) by conference call or video conference, provided that each
participant has the ability to hear and speak to each other participant. 

  

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	(b)	Unless all of the Directors are present, or those absent have expressly waived notice, no meeting of the Board of Directors 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 Directors. Notice of such meetings may be given by letter sent by fax or by e-mail. 

  

	2.5	Place of the Board of Directors’ Meetings 

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

	2.6	Board of Directors Decisions 

  

	(a)	The Board of Directors shall decide on those matters as provided by applicable law, or expressly provided for in the Articles of Association, or expressly determined by the
Shareholders from time to time. Any resolution of, or proposal to the Shareholders Meeting by the Board of Directors, shall require the affirmative vote of a simple majority of Directors present or represented at the relevant Board of Directors
meeting, provided that: 

  

	 	(X)    (i)	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 Director nominated by each of the PT Group and TEF Group,

  

	 	(Y)	subject to Section 2.6(a)(Z) below, the following matters shall require the affirmative vote of at least 7 (seven) Directors: 

  

	 	(i)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for the issuance of Company Shares and the determination of the conditions of such issuance,
including price, type and class of the shares to be issued; 

  

	 	(ii)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for the reduction of the Company’s share capital or for the reorganisation, merger, de-merger or
consolidation of the Company and/or any of the Subsidiaries (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); 

  

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	 	(iii)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for the amendment of the Articles of Association or for a change in the corporate nature of the
Company; 

  

	 	(iv)	any important decision about branding and technology, as adopted by the Company and the Subsidiaries; 

  

	 	(v)	without detracting from Sections 2.8 and 2.9 below, any appointment, amendment to the terms of appointment of or proxies granted to, suspension or removal of the secretary to the
Board of Directors, any Officers or other members of senior management of the Company or any of the Subsidiaries; 

  

	 	(vi)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for adoption of the consolidated annual accounts of the Company and its Subsidiaries;

  

	 	(vii)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for the dissolution or liquidation of the Company, other than as set forth in Section 4 below;

  

	 	(viii) 	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; 

  

	 	(ix)	a proposal to the Shareholders Meeting to adopt a Shareholders’ resolution for the declaration and/or payment of dividends or other distributions by the Company;

  

	 	(x)	adoption or amendment of the annual Business Plan and the Annual Budget; 

  

	 	(xi)	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; and 

  

	 	(xii)	any instruction to the Company’s legal representatives as 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), as necessary to procure compliance with the aforementioned items; and 

  

	 	(Z)	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): 

  

	 	(i)	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) Director nominated by each of the
PT Group and the TEF Group; 

  

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	 	(ii)	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 Board of
Directors, 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 

  

	 	(iii)	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 Director nominated by each of the PT Group and the TEF Group, 

  
 provided that the PT Group shall have no rights under this Section 2.6(a)(Z) 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). 
  

	(b)	With respect to matters contemplated in Section 2.6(a) above, it is expressly agreed by the Shareholders that they shall procure that the Board of Directors 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 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 Directors who voted against the acquisition, provided further that said Group shall, and shall procure that the 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. 

  

	(c)	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.  

  

	2.7	Secretary and Minutes of the Board of Directors 

  
 The secretary to the Board of Directors shall be nominated and appointed by the Board of Directors and shall keep minutes of all matters discussed and
actions taken at any Board of Directors meeting. Such minutes shall be distributed to all the Directors by such secretary within the 10 (ten) Business Days following each Board of Directors meeting unless agreed otherwise by the Board of Directors
from time to time. The minutes shall be signed for 

  

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approval by the Chairman, Vice-Chairman and the secretary to the Board of Directors. The secretary to the Board of Directors shall not be a Director of the
Company and may or may not be an employee of the Company. 
  

	2.8	Officers 

  

	(a)	Without detracting from Section 2.1 above, the Company shall be represented on a day to day basis by the Officers in accordance with Section 2.9, which shall include, at least: (i)
a Chief Executive Officer (“CEO”); (ii) a Chief Financial Officer (“CFO”), (iii) 1 (one) 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 and appointed by the Board of Directors, it being agreed that Mr. Francisco Padinha shall be the
first CEO, Mr Fernando Abella shall be the first CFO and Mr. Evandro P. Kruel shall be the first general counsel of the Company. The Officers shall not be 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.

  

	(b)	The CEO shall be appointed by the Board of Directors upon the binding nomination of the PT Group and shall report to the Board of Directors. The CFO shall be appointed by the Board
of Directors upon the binding nomination of the TEF Group and shall report to the Board of Directors. 

  

	(c)    (i)	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 appointed as an Officer by the Board of
Directors upon the binding nomination of the Group transferring 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’s shall report to the CEO. 

  

	 	(ii)	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 and appointed by the
Board of Directors. 

  

	(d)	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, provided that each first COO appointed pursuant to Section 2.8(c)(i) shall not, within the first 12 (twelve) months from the date on which the respective Contribution is transferred to the Company,
be removed by the Group that nominated it without Just Cause. 

  

	(e)	The CEO, the CFO and each COO appointed pursuant to Section 2.8(c)(i), shall be suspended or removed upon the request of the Group that did not nominate it only if a Just Cause
occurs. 

  

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	(f)	In the event of a vacancy in the position of CEO, the replacement CEO shall be appointed by the Board of Directors upon the binding nomination of the PT Group. In the event of a
vacancy in the position of CFO, the replacement CFO shall be appointed by the Board of Directors 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 appointed by the Board of
Directors upon the binding nomination of the relevant Group referred to in Section 2.8(c)(i) above. In the event of a vacancy in the position of any other Officer, the replacement Officer shall be nominated and appointed by the Board of Directors.
 

  

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

  

	2.9	Performance of the Officers 

  
 The Officers shall be vested with the powers of management and representation of the Company as set forth by the Board of Directors in written proxies to
be deposited with the relevant trade registry. The Board of Directors 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 and of the Board of Directors meetings, the Business Plan, the Articles of Association and applicable law. 
  

	2.10	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.  
  

	2.11	Subsidiary Governance 

  

	(a)	The Company shall procure that, at any shareholders meeting or meeting of the board of directors (or other similar corporate bodies) of the Subsidiaries, each individual acting as
its representative in such meeting votes in accordance with the instructions given by the Board of Directors from time to time. To this effect the Parties shall procure that the Board of Directors duly decides in advance on such instructions to be
given to the representatives. 

  

	(b)	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 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 Board of Directors shall approve such action in accordance with Section 2.6(a)(Y)(ii) above and the Parties, after a non-binding proposal submitted by the Board
of Directors, 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).

  

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	2.12	Effects of Dilution on the Provisions of this Section 2 

  

	(a)	The Shareholders agree that the right of: 

  

	 	(i)	the TEF Group to nominate by binding nomination (A) 6 (six) members of the Board of Directors; (B) the CFO of the Company and (C) the COO’s of certain Subsidiaries as set forth
in Section 2.8 above; and 

  

	 	(ii)	the PT Group to nominate by binding nomination (A) 6 (six) members of the Board of Directors; (B) the CEO of the Company and (C) the COO’s of certain Subsidiaries as set forth
in Section 2.8 above, 

  
 subject to Section
2.12(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 2.12 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)	remove a proportionate number of the Directors nominated by it to the Board of Directors by causing such 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 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 (zero)%-9 (nine) %
	  	 :         no Directors;

	 10 (ten)%-19 (nineteen) %
	  	 :         2 (two) Directors;

	 20 (twenty)%-39 (thirty nine)%
	  	 :         4 (four) Directors;

	 40 (forty)%-60 (sixty) %
	  	 :         6 (six) Directors;

	 61(sixty one)%-80 (eighty) %
	  	 :         8 (eight) Directors;

	 81 (eighty one)%-90 (ninety) %
	  	 :         10 (ten) Directors;

	 91 (ninety one)%-100 (one hundred) %
	  	 :         12 (twelve) Directors,

	
	 (decimal amounts to be rounded up or down to the nearest whole number);

  

	 	(ii)	 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) and 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 

  

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is necessary to appoint to those positions new Officers nominated by binding nomination of the non-diluted Group. 

  

	(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 2.12 shall become effective on the earlier of the following: 

  

	 	(i)	after the Balance Closing; and 

  

	 	(ii)	without detracting from Section 3.1.1(a) 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. 

  

	2.13	Representation of the Company  

  
 Only (i) the Board of Directors 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 Board of Directors in writing; will have the authority to represent the Company. 
  
 SECTION 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 Directors in accordance with Section 2.2.(b) and 2.12.(b)(i) above, and whenever and insofar as the business of
the Company so requires. 
  

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	3.2	Call Procedure 

  
 Shareholders Meetings may be called by the Chairman 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. In the event of absence or temporary impediment of the Chairman, the Shareholders
Meeting shall be presided over by the Vice-Chairman, 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 Board of Directors, 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. 
  

	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 2.6(a) (Y) 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 Directors 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. 

  

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	3.5	Effects of Dilution on the Provisions of this Section 3 

  

	(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. 

  

	 	(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 (X) the matters referred to in Section 3.4(b)(i) shall require the affirmative vote of a simple majority of votes cast, and (Y) 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 

  

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	 	(ii)	without detracting from Section 3.1.1(a) 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. 

  
 SECTION 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 Board of Directors (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 or the Board of Directors 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 Board of Directors. 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 

  

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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 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. 

  

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	(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 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 2.6 (a) (Y) (ii) and 2.11(b) 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. 

  

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	 	(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 [***]; and 

  

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

  

	(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 fulfill any such requirements and to obtain any such
necessary approval as soon as practicable. 

  
 SECTION 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 

  

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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. 

  

	(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.

  

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	(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 whishes 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. 
  
 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, the [***] to the Initial Non-Transferring Party Offer in order 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; 

  

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 (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 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. 

  

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	(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 [***] 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. 

  

	(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 

  

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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. 

  

	(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) fulfillment 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. 

  

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	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.

  

	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 2.6(a)(Y)(ii) and 2.11(b) above,
in kind [***] or 

  

	 	(iii)	in kind, [***], Section 5.6.(a)(ii)(A), or (y) [***] 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 fulfilment 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. 

  

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	(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 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 fulfill 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. 
  

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 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.  
  

	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. 
  
 SECTION 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”). 

 

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	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 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. 

  
 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 

  

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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 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. 
  

	(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 

  

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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 iliquidity 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. 

  

	(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 

  

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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 fulfillment 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 fulfill 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 to be held within such [***]), provided further that if such transfer is
subject to the prior fulfillment 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

  

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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 [***] period 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. 
  
 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 favor 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). 

 

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	(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 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 which reports directly to the board of
directors, 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. 

  

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	(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. 
  
 SECTION 7 FINANCIAL POLICIES 
  

	7.1	Financial Policies 

  
 The Company’s Board of Directors shall, from time to time adopt, by resolution, financial policies to support the achievement of the Business Plan
and the Synergies and in compliance with the Company Growth Principles. 
  

	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 Board of Directors 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 Board of Directors 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. 

  

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	(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. 

  

	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 Board of Directors in terms of Section 2.6(a)(Y)(x) above.

  

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	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* 

  
 The Shareholders shall share the economic interest in any existing or future management contracts signed 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 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”), provided that the first Management Notice shall be delivered by either
Party no later than on December 14th, 2004 and shall include all the amount in Euros effectively received (and not only accrued or accounted for) by the Parties up to such date corresponding to the management fees from January 1st, 2003 until the
date of delivery of such first Management Notice. 
  
 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. 

	*	Amended for the purposes of this filing as of December 3, 2004 

  

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 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. 
  
 SECTION 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 Business which come to their attention, provided that if the Board of Directors 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.  
  
 SECTION 9 INTERESTS IN NEW
ACQUISITIONS AND FURTHER INTERESTS IN WIRELESS PROPERTIES 
  

	9.1	Acquisition of Interests in New Acquisitions and Further Interests 

  
 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. 
  

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 SECTION 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 

  

	(a)	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 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 

  

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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. 
  
 SECTION 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 

  

	 	(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 

  

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	 	(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. 
  
 SECTION 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. 

  

	 	(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 

  

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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. 
  
 SECTION 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. 
  

	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. 

  

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	(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. 

  
 SECTION 14 COMMUNICATIONS

  

	14.1	Communications 

  
 For purposes of this Agreement the Shareholders irrevocably establish the following special domiciles, where all notices, consents, requests, instruments,
approvals and other 

  

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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: 
  
 Av. Fontes Pereira de Melo, 40, 11o andar 
 Lisbon, Portugal 
 Tel: 
 Fax: 
 E-mail: 
  
 If to PT
Móveis: 
  
 Attn: 
  
 Av. 5 de Outubro, 208, 4o andar 
 Lisbon, Portugal 
 Tel: 
 Fax: 
 E-mail: 
  
 If to the Company: 
  
 Attn: General Manager 
 Strawinskylaan 3105

 1077 ZX Amsterdam 
 The
Netherlands 
  
 SECTION 15 MISCELLANEOUS PROVISIONS 
  

	15.1	Entire Agreement 

  
 This Agreement (which includes the Annexes hereto), and the other documents and agreements delivered in connection with this Agreement and the
Subscription Agreement contain the entire agreement among the Shareholders with respect to the transactions 

  

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contemplated herein and therein and supersede all other prior arrangements made by any of them with respect thereto, including the Joint Venture Agreement,
except for the following provisions contemplated in the Joint Venture Agreement: (i) the provision named as “Other Considerations”, and (ii) 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. 
  

	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. 
  

	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 

  

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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 [***] 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. 
  

	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. 
  

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	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, nor to constitute either Group, the agent or
legal representative of the other nor 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. 
  

	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 

  

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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 [***] 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 Group. 

  

	 	(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 “question and 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 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.

  

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	 	(vi)	All the institutional information and official press release 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. 
  
 SECTION 16 DEFINITIONS 
  

	16.1	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.

  
 “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. 
  

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 “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. 
  
 “Board of Directors” means the managing board (“raad van bestuur”) of the Company from time to time. 
  
 “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 2.8.(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 2.8(a) of this Agreement. 
  
 “Chairman” has the meaning set forth in Section 2.3(a) 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 

  

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	(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 

  

	 	(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. 
  

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 “COO” has the meaning set forth in Section 2.8(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, 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, members of the Board of Directors and
“Director” means any one of them. 
  

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 “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 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. 
  

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 “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. 
  
 “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, 

  

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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.  
  
 “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.

  
 “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. 
  

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 “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. 
  
 “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. 
  
 “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. 
  

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 [***] 
  
 “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, spinoff 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” has the meaning set forth in Section 2.3(a) 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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 IN WITNESS WHEREOF, the Parties have duly executed this Agreement as of the day and year first above written.

  

			
	 TELEFÓNICA MÓVILES, S.A.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 PORTUGAL TELECOM, SGPS, S.A.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 PT MÓVEIS, SGPS, S.A.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 
	
	 BRASILCEL B.V.

		
	 By:
	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 62Exhibit 4.4 - Subscription Agreement

					
	 	 	  
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 Exhibit 4.4 
  
 SUBSCRIPTION AGREEMENT 
  
 Dated as of October 17, 2002 
  
 By and among 
  
 TELEFÓNICA MÓVILES, S.A., 
  
 PORTUGAL TELECOM, SGPS, S.A., 
  
 PT MÓVEIS, SGPS, S.A., 
  
 and 
  
 BRASILCEL B.V. 
  
 In relation to 
  
 BRASILCEL B.V. 
  

					
	 	 	  
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 THIS AGREEMENT is made as of October 17, 2002 by and among: 
  
 TELEFÓNICA MÓVILES, S.A., a corporation duly organised, 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”); 
  
 PORTUGAL TELECOM, SGPS, S.A., a corporation duly organised, 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”); 
  
 PT MÓVEIS, SGPS, S.A., a corporation
duly organised, existing and established in accordance with the laws of Portugal, with head offices at Av. 5 de Outubro, 208, 4o andar, Lisbon, Portugal, represented herein in accordance with its bylaws (“PT
Móveis”); 
  
 and 
  
 BRASILCEL B.V., a private limited liability company incorporated in accordance with
the laws of the Netherlands, with corporate seat in Amsterdam and having its address at Strawinskylaan 3105, 1077 ZX, Amsterdam, the Netherlands, represented herein in accordance with its Articles of Association (the
“Company”). 
  
 Capitalised terms used herein shall have
the meaning ascribed to them in Section 16 hereto, elsewhere in this Agreement or if not defined herein, in the Shareholders Agreement (as defined below) unless otherwise provided for in the Shareholders Agreement. 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 Shareholders 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 Shareholders Agreement, the termination of the latter agreement shall not affect such definition. 
  

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 RECITALS: 
  

	(A)	WHEREAS Portugal Telecom, PT Móveis, Telefónica and TEM, among others, have entered into a certain Joint Venture Agreement dated as of January 23, 2001 (the
“Joint Venture Agreement”), by means of which they confirmed their objective to build the leading wireless and mobile telephone venture in Brazil, and to create shareholder value, as a result of expected synergies, enhanced
markets positioning and improved valuation by the financial markets, by gathering their interests in Wireless Properties and New Acquisitions in one sole company; 

  

	(B)	WHEREAS, in accordance with the terms of the Joint Venture Agreement, the PT Group and the TEF Group have agreed to utilise the Company to effect the Contributions and to take any
and all actions necessary to create a joint venture relationship for the operation, ownership and management of their respective Wireless Properties and New Acquisitions, through the Company; 

  

	(C)	WHEREAS, each of TEM, Portugal Telecom, PT Móveis and Further Parties shall subscribe for all of the Company Shares in consideration for contributing ownership interests in
Wireless Properties and New Acquisitions plus, when applicable, cash and other Liquid Assets in accordance with the terms and conditions set forth in this Agreement and in the Shareholders Agreement; 

  

	(D)	WHEREAS, in preparation for the implementation of the joint venture contemplated in the Joint Venture Agreement, the PT Group and the TEF Group shall, prior to the Initial Closing,
agree the value of their respective Initial Capital Contributions and shall, prior to the Balance Closing, agree the value of their respective Balance Capital Contributions, pursuant to which Contributions, the Groups will have equal economic and
voting ownership of the share capital of the Company immediately after the Balance Closing and further agree that, in certain circumstances as described herein, Independent Valuations of, among others, their respective Additional Capital
Contributions and of the Company will be conducted; 

  

	(E)	WHEREAS, the Parties have agreed to enter into this Agreement and a certain shareholders agreement of even date hereof (the “Shareholders Agreement”) to set
forth the terms and conditions under which each of the TEF Group and the PT Group (i) will transfer to the Company its Contributions relating to Wireless Properties and New Acquisitions and, (ii) until the transfer to the Company of all its
Contributions relating to a Wireless Property or New Acquisition, will, to the extent relevant and legally permissible, operate, own and manage such Wireless Property or New Acquisition for the benefit of the joint venture created pursuant to the
Joint Venture Agreement; 

  

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 NOW, THEREFORE, the Parties agree as follows: 
  
 SECTION 1: CERTAIN OBLIGATIONS CONCERNING THE COMPANY, THE WIRELESS PROPERTIES AND NEW ACQUISITIONS 
  

	1.1	Shareholders Agreement, Conversion of the Company and Corporate Documents 

  

	(a)	The Parties shall on the date hereof duly sign the Shareholders Agreement. 

  

	(b)	As soon as possible after the date hereof, but by no later than the Initial Closing, the Shareholders shall exercise their voting rights and the Parties shall co-operate and take
such other action as is necessary to procure the amendment of the Articles of Association in order to change the corporate nature of the Company from a private company with limited liability (besloten vennootschap) to a limited liability
company (naamloze vennootschap) under the laws of the Netherlands. 

  

	(c)	The TEF Group and the PT Group further agree to procure that the Company establishes 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”). 

  

	(d)	The Parties shall further 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 the Company Growth Principles, as such principles
are set forth in the Shareholders Agreement. 

  

	(e)	The Parties agree that the transfer to the Company of the relevant Contributions may be made through Further Parties, each Group undertaking to procure that the relevant Further
Party execute this Agreement and the Shareholders Agreement at the time of transferring the relevant Contributions to the Company. 

  

	1.2	Contribution of Wireless Properties and New Acquisitions 

  
 Subject to the provisions of this Agreement and the Shareholders Agreement, each of the Parties confirms its 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, and to cause each of the
TEF Group and PT Group to act in the same manner. Accordingly, the TEF Group and the PT Group shall transfer to the Company all their Interests in Wireless Properties and any New Acquisitions made by either Group or jointly by both Groups (as the
case may be) as set forth in the Shareholders Agreement and in this Agreement. 
  

	1.3	50% - 50% Joint Venture, Shareholders Agreement 

  
 It is the intention of the Groups that each Group shall subscribe for and hold at all times 50% (fifty percent) of the economic and voting interests in
the Company in exchange for the transfer to the Company of their respective Contributions. The Parties acknowledge that the 50% - 50% shareholding in the Company may not be achieved at all times for 

  

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several reasons. This Agreement and the Shareholders Agreement regulate the investments of the Groups in the Company and in Wireless Businesses, the rights
and obligations as parties to the joint venture and vis-à-vis the Company, and other related matters. 
  

	1.4	Selection of Investment Banks 

  

	(a)	The TEF Group and the PT Group have jointly retained [***] and [***], as the first choice of Investment Banks to conduct the Independent Valuations required pursuant this Agreement
or the Shareholders Agreement (each a “First Choice Investment Bank” and collectively the “First Choice Investment Banks”). For purposes of this Section it shall be considered that [***] has been
appointed by the TEF Group and that [***] has been appointed by the PT Group. 

  

	(b)	Save as otherwise provided in Section 1.5(b)(iv)(A) below, the selection of any investment banks different from the First Choice Investment Banks, either as a result of any conflict
of interest, or default, or at the request of the TEF Group or the PT Group, shall be made pursuant to the provisions of this Section 1.4(b). 

  
 In the event that an Independent Valuation is required under this Agreement or the Shareholders Agreement, the proposing Group shall deliver to the other
Group and to the Company a notice requesting an Independent Valuation (“Independent Valuation Notice”) which may contain its intention to substitute one or both of the First Choice Investment Banks. Should any of the First
Choice Investment Banks be requested to be replaced, the following will apply: 
  

	 	(i)	If the Group delivering the Independent Valuation Notice has shown its intention to substitute (x) both First Choice Investment Banks or (y) the First Choice Investment Bank
appointed by it, it shall include in the Independent Valuation Notice a list of three international investment banks from which the other Group shall appoint a replacement Investment Bank (the “First Group List”).

  

	 	(ii)	If the Independent Valuation Notice contains the intention of the delivering Group to substitute (x) both First Choice Investment Banks or (y) the First Choice Investment Bank
appointed by the receiving Group, such receiving Group shall deliver, within 5 (five) Business Days from the receipt of the Independent Valuation Notice, a list of three international investment banks from which the other Group shall appoint a
replacement Investment Bank (the “Second Group List”). 

  

	 	(iii)	In any other event, even if the Independent Valuation Notice does not contain the intention of the delivering Group to substitute any or both of the First Choice Investment Banks,
the receiving Group, within 5 (five) Business Days from the receipt of the Independent Valuation Notice, may submit a Second Group List (if it desires to substitute its First Choice Investment Bank) and/or require the other Group to submit a First
Group List (if it desires to substitute the First Choice Investment Bank of the other Group); provided that, in this latter case, within the following 5 (five) Business Days, the Group delivering the Independent Valuation Notice shall submit
to the other Group the First Group List. 

  

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	 	(iv)	The First Group List and the Second Group List shall exclude any investment bank which, (x) owns, or at any time after the date hereof will have owned, a significant direct or
indirect interest in the capital or (y) has, or at any time after the date hereof will have had, one or more representatives in the board of directors of any of the Groups or in the board of directors of, any of the Wireless Properties or New
Acquisitions of the Group providing such list. 

  

	 	(v)	Failure by one of the Groups to timely send the First Group List or the Second Group List shall be deemed (x) as an acceptance of any of the names contained in the list provided by
the non-defaulting Group and an implied authorisation for the non-defaulting Group to select any of such names to be an Investment Bank for the purposes hereunder, or (y) if no list has been delivered by the non-defaulting Group, as an authorisation
for such non-defaulting Group to elect any internationally recognised investment bank as the First Choice Investment Bank of the defaulting Group. 

  

	 	(vi)	The Group receiving the First Group List or the Second Group List shall select one name to be its choice of Investment Bank. Such selection shall be binding on the other Group and
shall be made and notified to the other Group and the Company no later than 5 (five) Business Days after the receipt of the First or the Second Group List (as the case may be). The Investment Bank chosen by one Group within the list provided by the
other Group shall be considered, from time to time, the First Choice Investment Bank appointed by this latter Group. 

  

	 	(vii)	Failure by a Group to timely select an Investment Bank from the First or the Second Group List, as applicable, shall be deemed as an acceptance of any of the investment banks
contained therein and an implied authorisation for the other Group to select any of such investment banks to be an Investment Bank for the purposes hereunder. The Investment Bank shall be considered the First Choice Investment Bank appointed by the
defaulting Group. 

  

	(c)	No later than 15 (fifteen) Business Days from the later of the date of (i) the receipt of the Independent Valuation Notice, or (ii) if applicable, the selection of the later First
Choice Investment Bank selected in accordance with Section 1.4(b) above, the Company shall take any and all actions as may be required to complete the retaining by the Company of the First Choice Investment Banks, including obtaining the necessary
corporate approvals, executing the relevant mandate letters (the “Mandate Letters”) and issuing letters of instruction from time to time, and shall otherwise correspond with the First Choice Investment Banks (the PT Group and
the TEF Group undertaking not to correspond with the Investment Banks). The Groups shall procure that the Company complies with its foregoing obligations. 

  

	(d)	If the Company fails to execute the relevant Mandate Letters, then such Mandate Letters shall be executed and all other correspondence shall be undertaken: 

 

	 	(i)	in the case of an Independent Valuation in terms of Section 1.6.1(d)(ii)(D) below, by a Party in the TEF Group; 

  

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	 	(ii)	in the case of the acquisition of the relevant Interest in a New Acquisition pursuant to Section 1.6.2 below, by a Party in the Group which nominated the Directors that voted in
favour of the acquisition; 

  

	 	(iii)	in the case of the acquisition of a Further Interest in a Wireless Property pursuant to Section 1.6.4(e)(i) below, by a Party in the Lead Group; 

  

	 	(iv)	in the case of an Independent Valuation in terms of Section 7.2 below, by a Party in the Group exercising the right to gradually buy; 

  

	 	(v)	in the case of an Independent Valuation in terms of Section 7.3(a) below, by a Party in the Non-Defaulting Group; 

  

	 	(vi)	in the case of an Independent Valuation required in terms of Section 4.3(c) of the Shareholders Agreement, by a Party in either Group; 

  

	 	(vii)	in the case of an Independent Valuation required in terms of Section 5.6 of the Shareholders Agreement, by a Party in the Group exercising the Put; and 

  

	 	(viii)	in the case of an Independent Valuation required in terms of Section 6.4 of the Shareholders Agreement, by a Party in the PT Group, 

  
 (in each such case, the other Group and the Company undertaking not to
correspond with the First Choice Investment Banks), provided that, in the event that the Directors, nominated by the Group which has the authority pursuant to the foregoing to execute the relevant Mandate Letters, in any way prevented the
execution by the Company of the relevant Mandate Letters, then a Party in such Group shall not have the authority to execute the relevant Mandate Letters and the relevant Mandate Letters shall then be executed by a Party in the other Group.

  

	(e)	Each Mandate Letter shall contain, inter alia, (i) details of the fees to be paid to the First Choice Investment Bank, which in any case should be according to market practice (ii)
a requirement for the First Choice Investment Bank to commence each required Independent Valuation as soon as possible thereafter, but in any event within 45 (forty-five) days from the date of the Mandate Letter, to complete such Initial Valuation,
as defined below, (iii) an indication to follow the Independent Valuation Principles and the guidelines and criteria set forth in Exhibit I hereto, (iv) a financial adjustment methodology to calculate the Contribution Valuations as set forth in
Exhibit II, and (v) in respect of an Independent Valuation of an Interest in a New Acquisition, the requirement to conduct a due diligence review (legal, tax and accounting) to be made by independent experts engaged in conjunction with the other
selected First Choice Investment Bank, the cost of which shall be included in the fees to be paid to the First Choice Investment Banks. 

  

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	(f)	The fees charged by the First Choice Investment Banks for conducting Independent Valuations shall be paid by the Party executing the Mandate Letters, provided that:

  

	 	(i)	if the Company has not executed the relevant Mandate Letters, then in the case of an Independent Valuation required in terms of Section 1.6.2 below, Section 1.6.4(e)(i) below, or
Section 4.3(c) of the Shareholders Agreement (as the case may be), the Company shall forthwith reimburse such Party for such fees; 

  

	 	(ii)	if the Company has executed the relevant Mandate Letters, then in the case of an Independent Valuation required in terms of Section 7.2 below, each Group shall forthwith reimburse
the Company for the fees paid to its First Choice Investment Bank, and if a Party in one of the Groups has executed the relevant Mandate Letters, the other Group shall reimburse the relevant Party in the firstmentioned Group for the fees paid to the
other Group’s First Choice Investment Bank; 

  

	 	(iii)	in the case of an Independent Valuation in terms of Section 7.3(a), if a Party in the Non-Defaulting Group has executed the relevant Mandate Letters, then the Defaulting Group shall
reimburse the relevant Party in the Non-Defaulting Group, and if the Company has executed the relevant Mandate Letters, the Defaulting Group shall reimburse the Company; 

  

	 	(iv)	in the case of an Independent Valuation required in terms of Section 5.6 of the Shareholders Agreement, if the Target Shareholder has not executed the relevant Mandate Letters, the
Target Shareholder shall forthwith reimburse the Party which executed the Mandate Letters; and 

  

	 	(v)	in the case of an Independent Valuation required in terms of Section 6.4 of the Shareholders Agreement, if a Party in the PT Group has not executed the relevant Mandate Letters, the
PT Group shall forthwith reimburse the Party which executed the Mandate Letters. 

  

	(g)	If applicable, the fees charged by the Third Investment Banks for conducting Independent Valuations, shall be shared by the Groups equally. 

  

	1.5	Independent Valuation 

  

	(a)	The Initial Valuations, the Finalised Initial Valuations, the Contribution Valuations and the Company Shares Exchange Ratio as defined below, prepared by the Investment Banks, and,
when applicable, by the Third Investment Bank, shall be evidenced by a written report to be delivered to the Groups and the Company. The Initial Valuations shall be expressed in US Dollars and thereafter shall be converted into Euro by using the
average exchange rate for the 10 (ten) day trading period prior to the date of such valuations. The reference exchange rate will be the official fixing for USD/EUR published by the ECB in the Reuters Screen ECB37, or any other Reuters screen that in
the future may substitute it for the relevant fixing rate. 

  

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	(b)	When an Independent Valuation of a Further Interest in a Wireless Property or an Interest in a New Acquisition (as the case may be) is required under this Agreement or the
Shareholders Agreement in order to transfer such relevant Interest to the Company as a Contribution, the following specific rules will apply: 

  

	 	(i)    (A)	The acquiring Group will have the option to require the Independent Valuations to be conducted before or immediately after the date of the signing of a binding agreement for the
acquisition of the Interest in a New Acquisition or of the Further Interest in a Wireless Property (the “Acquisition Date”). The acquiring Group shall send the Independent Valuation Notice to the other Group and the Company
as set forth in Section 1.4 above to initiate the process of such Independent Valuation. The Investment Banks shall determine the (X) equity value of such Further Interest in a Wireless Property or of such Interest in a New Acquisition (as the case
may be), and (Y) equity value of the Company as if (x) the Balance Capital Contributions had already been transferred to the Company and (y) such relevant Interest had not yet been transferred to the Company, (such valuations collectively referred
to as the “Initial Valuations”). 

  

	 	(B)	In the case of an Independent Valuation of an Interest to be acquired in a New Acquisition, the Initial Valuations shall reflect the adjustments (if any) arising as a result of the
due diligence conducted by the independent experts according to the relevant Mandate Letters. 

  

	 	(C)	In the event that the Initial Valuations have been requested before the Acquisition Date, they shall be required to be delivered and reflect the corresponding values at a date
within the 4 (four) months before such Acquisition Date, provided that if: 

  

	 	(X)	the Initial Valuation reflects the value of the relevant Interest in a New Acquisition (or in a Further Interest in a Wireless Property which is acquired other than through a tender
offer or a capital increase) at a date which is more than (1) one month prior to the Acquisition Date; or 

  

	 	(Y)	the Initial Valuation reflects the value of the relevant Interest in a New Acquisition (or in a Further Interest in a Wireless Property which is acquired other than through a tender
offer or a capital increase) at a date which is 1 (one) month, or less, prior to the Acquisition Date, and the average of the Fixing R$ / € exchange rate (calculated as the result of multiplying the exchange rate USD / R$ PTAX Ask fixed by the
Brazilian Central Bank (ticker Bloomberg: BZFXPTAX Index), by the exchange rate € / USD fixed by the ECB (Reuters Screen ECB37) on the applicable date) during the 10 (ten) days period prior to each of (x) the reference date used for the Initial
Valuation and (y) the Acquisition Date, differ by 20% (twenty percent) or more of the lower of them, 

  
 then the exchange rate projections of the Initial Valuation of the relevant Interest in a New Acquisition (or in a Further Interest in a Wireless Property
which is acquired other than through a tender offer or a capital increase) shall be adjusted, if necessary, at the Acquisition Date in order to reflect the average of the Fixing R$ / € exchange rate during the ten days period prior to the
Acquisition Date. 
  

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	 	(D)	In the event that the Initial Valuations have been requested after the Acquisition Date, they shall be required to reflect the corresponding values at the Acquisition Date.

  

	 	(ii)	Should one Investment Bank’s (A) Initial Valuation of the Interest in a New Acquisition or the Further Interest in a Wireless Property (as the case may be), and/or (B) Initial
Valuation of the Company, differ by (x) €100 million (one hundred million Euro) or less, or (y) 10 (ten) percentage points or less, of the applicable lowest of the Initial Valuations, the difference will be halved and the result respectively
added to the lower of the relevant Initial Valuation and deducted from the higher of the relevant Initial Valuation (such Initial Valuations after, if applicable, the aforesaid adjustment, referred to as the “Finalised Initial
Valuations”); 

  

	 	(iii)	Should one Investment Bank’s (A) Initial Valuation of the Interest in a New Acquisition or the Further Interest in a Wireless Property (as the case may be), and/or (B) Initial
Valuation of the Company, differ by more than (x) €100 million (one hundred million Euro) or (y) 10 (ten) percentage points of the applicable lowest of the Initial Valuations, the TEF Group and the PT Group shall jointly retain the services of
a third investment bank (“Third Investment Bank”) to conduct an Independent Valuation of the relevant Interest and/or the Company (as the case may be) and to determine the applicable Initial Valuation(s) (in each case the
“Finalised Initial Valuation” and collectively the “Finalised Initial Valuations”) within the range determined by the Investment Banks in their respective Initial Valuations. As soon as possible, but
in any event within 15 (fifteen) days after delivery of a Mandate Letter, the Finalised Initial Valuation shall be provided by the Third Investment Bank. 

  

	 	(iv)	The Third Investment Bank shall be selected in accordance with to the following rules: 

  

	 	(A)	The Third Investment Bank shall be appointed by mutual agreement between the Groups, which Groups shall jointly sign the relevant Mandate Letter, or, failing the Groups reaching
such an agreement within 15 (fifteen) days following receipt of the relevant Initial Valuations, any of the Groups shall cause the Investment Banks to appoint the Third Investment Bank and sign the relevant Mandate Letter (such Mandate Letter to be
issued in accordance with this Section 1.5(b)(iv) with substantially the same the terms and conditions of the relevant Mandate Letters issued to the First Choice Investment Banks), and should the Investment Banks fail to make such appointment within
15 (fifteen) days following written request by any of the Groups, the Groups shall refer the selection of such Third Investment Bank to arbitration in terms of Section 10.2 of this Agreement. Any selection by either the Investment Banks or the
arbitrators shall be final and binding on the Groups. 

  
 If, either as a result of a conflict of interest, default or otherwise, or by mutual agreement between both Groups, the Third Investment Bank appointed in 

  

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terms of this Section 1.5(b)(iv)(A) is prevented from acting as the Third Investment Bank for the purposes of this Section 1.5, a replacement Third
Investment Bank shall be appointed mutatis mutandis in accordance with this Section 1.5(b)(iv)(A). 
  

	 	(B)	In performing its own Independent Valuation as required under this Section 1.5, the Third Investment Bank shall abide by the same Independent Valuation Principles and other relevant
provisions of this Section 1.5 concerning the performance of the Independent Valuation. 

  

	 	(v)	As soon as possible, but in any event within 15 (fifteen) days after delivery of a letter of instruction, the two Investment Banks, acting jointly, shall: 

 

	 	(A)	adjust the Finalised Initial Valuations at the time of transfer to the Company of such Further Interest in a Wireless Property or Interest in a New Acquisition (as the case may be),
(x) using the financial adjustment methodology described in Exhibit II hereto and (y) in the case of an acquisition of an Interest in a New Acquisition, taking into account the applicable representations, warranties and indemnities received in
respect of such Interest, provided that the Finalised Initial Valuation of the Interest in a New Acquisition shall also be accrued with the Cost of Carrying (such adjusted and/or accrued Finalised Initial Valuations referred to as the
“Contribution Valuations”); and 

  

	 	(B)	determine the applicable number of Company Shares to be issued against the relevant Contribution using the following formula: r/(s/t), where “r” is the Contribution
Valuation of such Further Interest in a Wireless Property or Interest in a New Acquisition (as the case may be), “s” is the Contribution Valuation of the Company and “t” is the number of Company Shares issued and outstanding on
the date of the Contribution Valuation (the “Company Shares Exchange Ratio”). 

  

	(c)	In any other event, (other than an Independent Valuation in respect of a Further Interest in a Wireless Property or of an Interest in a New Acquisition in order to transfer them to
the Company as Contributions) when an Independent Valuation is required under this Agreement or the Shareholders Agreement, the rules contained in this Section 1.5 shall apply mutatis mutandis. 

  

	1.6	New Acquisitions and Further Interests in Wireless Properties 

  

	1.6.1  	Global Telecom 

  

	(a)	 It is recorded that the PT Group through Telesp Celular Participações, S.A., (i) has already acquired an Interest, and (ii) has the right to acquire
the remainder of the ownership interests in the New Acquisition, Global Telecom (the total ownership of Global Telecom, as described in Exhibit IV, referred to as the “Global Telecom Interest”). The Parties agree that the TEF
Group shall have a call right to purchase from 

  

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the PT Group up to 50% (fifty percent) of the Global Telecom Interest at the Acquisition Price paid therefor by the PT Group in terms of the GT Acquisition
Agreement (the “Call Right”), the Call Right being exercisable (in whole or in part and on one or more occasions) until the transfer in full to the Company of the Global Telecom Interest, provided that:

  

	 	(i)	the Call Right shall be enforceable in respect of the Global Telecom Interest to the extent not yet transferred to the Company and, subject to Section 1.6.1(b) below, also in case
of (A) Liquidation of the Company (pursuant to Section 4.3 of the Shareholders Agreement), (B) exercise of the Put in case of Change of Control (pursuant to Section 5.6 of the Shareholders Agreement), (C) exercise of the PT Group Put (pursuant to
Section 6.4 of the Shareholders Agreement) and (D) termination of this Agreement or the Shareholders Agreement, for reasons other than the default of the TEF Group, (pursuant to Section 7 below or Section 11 of the Shareholders Agreement); and

  

	 	(ii)	the provisions set forth in Section 1.6.1(a)(i) above shall be applicable without prejudice to the rights of the Parties pursuant to this Agreement and the Shareholders Agreement in
respect of that part of the Global Telecom Interest that has already been transferred to the Company. 

  

	(b)	In the circumstances referred to in Section 1.6.1(a)(i)(A), (B), (C), and (D) above, other than in the event of termination set forth in Sections 7.2 and 7.3 below, the Call Right
shall be exercisable until the expiration of a period of 2 (two) months from the time when both Groups acknowledge that the relevant event has occurred or, if no such acknowledgement has been issued in writing by both parties, from the time when the
occurrence of the relevant event has been declared in a final decision pursuant to the relevant dispute resolution procedure set out in this Agreement or the Shareholders Agreement. 

  

	(c)	After the TEF Group has given notice of its intention to exercise the Call Right, the transfer of the relevant portion of the Global Telecom Interest shall be consummated as soon as
permissible under regulatory provisions. 

  

	(d)	(i) The Parties agree that (A) the Call Right and (B) any other right of the TEF Group with respect to the Global Telecom Interest already transferred to the Company, shall be
exercisable over up to 50% (fifty percent) of the Global Telecom Interest (the PT Group to procure that Telesp Celular Participações, S.A. and each company in the chain of companies holding said Interest abides by this Agreement so as
to enable the PT Group to fulfil its obligation hereunder to the TEF Group). 

  

	 	(ii)	If: 

  

	 	(A)	 the PT Group for any reason (other than as a result of the failure by the TEF Group to timely comply with its obligations set forth in this Section 1.6) fails to
cause Telesp Celular Participações, S.A. to deliver the relevant portion of the Global Telecom Interest, (x) in the case where payment for the acquisition thereof is to be made in cash and/or existing TEF shares and/or existing TEM

  

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shares, within 2 (two) months after the TEF Group has given notice of its intention to exercise the Call Right, or (y) in the case where payment for the
acquisition of the Global Telecom Interest is to be made using new TEF shares and/or new TEM shares, on the date on which such new shares are tendered for delivery, or 

  

	 	(B)	delivery of the relevant portion of the Global Telecom Interest is prevented due to legal or regulatory restrictions, 

  
 then the Call Right may be exercised against the PT Group, at the option of
the TEF Group, over such percentage in the share capital of Telesp Celular Participações, S.A. as the value of the relevant portion of the Global Telecom Interest represents in the value of Telesp Celular Participações,
S.A., provided that, if shares of Telesp Celular Participações, S.A. were to be delivered, then: 
  

	 	(C)	the equity participation subject to the rights of the TEF Group shall comprise voting and non-voting shares in the same proportionality as the PT Group holds in each class of shares
in Telesp Celular Participações, S.A.; and 

  

	 	(D)	(x) the value of the relevant portion of the Global Telecom Interest shall be the Acquisition Price paid therefor by the PT Group in terms of the GT Acquisition Agreement, and (y)
the value of Telesp Celular Participações, S.A. shall be defined pursuant to an Independent Valuation (which shall include, as valuation of Global Telecom, the Acquisition Price of the Global Telecom Interest in terms of the GT
Acquisition Agreement) as regulated in this Agreement at the time of the exercise of the Call Right and other rights by the other Group. Both values shall be compared for determining the percentage which the value of the relevant portion of the
Global Telecom Interest represents in the value of Telesp Celular Participações, S.A.  

  

	(e)	The TEF Group may elect to pay the consideration for the acquisition of the Interests in Global Telecom (or in Telesp Celular Participações, S.A., as the case may be)
in cash, TEM shares, TEF shares or a combination thereof. In the event of payment in TEM and/or TEF shares, the relevant provisions of Section 6.4 of the Shareholders Agreement shall apply. 

  

	(f)	In the event of exercise by the TEF Group of the Call Right: (i) the Interests in Global Telecom (or in Telesp Celular Participações, S.A., as the case may be) shall
be transferred to the TEF Group freely tradable, free of any liens, rights in favour of third parties and other encumbrances, and (ii) the PT Group shall give to the TEF Group (x) to the extent that same relate to the Interests in Global Telecom
transferred to the PT Group, the same representations, warranties and indemnities which it received under the GT Acquisition Agreement (the foregoing to apply except in the case where shares in Telesp Celular Participações, S.A. are
received by the TEF Group in terms of Section 1.6.1(d) above), and (y) to the extent that same relate to Global Telecom (or Telesp Celular Participações, S.A., as the case may be), the same representations and warranties referred to in
Section 5 of this Agreement. 

  

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	1.6.2	  New Acquisitions pursuant Section 8.2 of the Shareholders Agreement 

  

	(a)	It is hereby further agreed that the acquisition after the date hereof of any and all Interests in a New Acquisition shall be negotiated and carried out by the Company. Without
detracting from the foregoing, if, notwithstanding Section 8.2 of the Shareholders Agreement, the Company, acting through its Board of Directors, after reviewing the corresponding proposal for the acquisition of an Interest in a New Acquisition,
which shall include a price range (the “Price Range”), fails for any reason attributable to it to acquire the relevant business opportunity, the Group which nominated the Directors who affirmatively voted on such proposal
shall have the right, but not the obligation, to acquire the business opportunity as the acquisition of an Interest in a New Acquisition. 

  

	(b)	If the Group which nominated the Directors who voted in favour of the acquisition decides to acquire such Interest in a New Acquisition, an Independent Valuation shall be required
as set forth in Sections 1.4 and 1.5 above. 

  

	(c)	If such Group negotiates an acquisition price lower than the Price Range, it must submit such new proposal to the Company and if the Board of Directors does not approve such
proposal, said Group will have the right, but not the obligation, to acquire the relevant Interest in the New Acquisition. 

  

	(d)	Immediately after the acquisition of the Interest in the New Acquisition by a Group in accordance with this Section 1.6.2, such Group will start an arbitration procedure in terms of
Section 10.2 below in order to determine if the relevant Interest in the New Acquisition is within the Company Growth Principles (as set out in Section 1.2(a) and (b) of the Shareholders Agreement) and, if so determined, the Parties undertake to
procure the transfer of the Interest in the New Acquisition to the Company. In the event that the decision of the arbitration tribunal states that the relevant Interest in the New Acquisition is not within the Company Growth Principles as set forth
in Section 1.2(a) and (b) of the Shareholders Agreement, such Interest will not be transferred to the Company and the acquiring Group may continue holding such Interest subject to Section 8.1 of the Shareholders Agreement. 

 

	(e)	For accounting purposes, the value of such Interest in the New Acquisition will be determined in accordance with the Generally Accepted Accounting Principles as in force under
Netherlands law (“GAAP”) until the moment that the International Accounting Standards (“IAS”) may be applied under Netherlands law, in which case the IAS will be applied, all as effective as at the
corresponding Additional Closing. 

  

	1.6.3  Common	Conditions to the New Acquisitions and Wireless Properties 

  

	(a)	 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 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 Board of Directors 

  

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shall approve such action in accordance with Section 2.6(a)(Y)(ii) of the Shareholders Agreement and the Shareholders, after a non-binding proposal submitted
by the Board of Directors, shall be required to agree in each specific case on the appropriate adjustments to be made (x) to the division of assets on Liquidation of the Company in terms of Section 4.3 of the Shareholders Agreement and (y) to the
Put in Section 5.6 of the Shareholders Agreement). 

  

	(b)	In any case, (i) the operational control of the New Acquisitions shall be kept with the Group that acquired the acquisition of the Interest in the New Acquisition until the thus
acquired Interest is fully transferred to the Company, and (ii) the operational control of the Wireless Properties shall be kept with the Group Controlling the relevant Wireless Properties until the Balance Closing. 

  

	1.6.4  Further	Interests in the Wireless Properties 

  

	(a)	The acquisition of any Further Interest in a Wireless Property, shall, after the Balance Closing, be carried out only by the Company and neither Group shall (have the right to)
acquire any Further Interest in a Wireless Property. 

  

	(b)	The Parties record that until the Balance Closing, each Group (the “Lead Group”) shall have the right, but not the obligation, to acquire, directly or
indirectly, any Further Interest in any of its Wireless Properties, provided that the Lead Group shall offer the other Group (the “Other Group”) the right to acquire 50% (fifty percent) of the Further Interest in a
Wireless Property proposed to be acquired, at the Acquisition Price to be paid by the Lead Group for said portion of the Further Interest in a Wireless Property (the “Further Interest Acquisition Price”). The portion of the
Further Interest in a Wireless Property acquired by the Other Group will be considered as a Wireless Property of such Other Group. The obligation to offer the other Group the possibility of acquiring 50% of the Further Interest in a Wireless
Property shall not apply in the event of the acquisition of a Further Interest in a Wireless Property through a capital increase in which no new assets are contributed to the relevant Wireless Property. 

  

	(c)	Before the consummation by either Group of the acquisition of any Further Interest in a Wireless Property, the Lead Group shall give written notice to the Other Group (i) informing
it about the Further Interest Acquisition Price and all other relevant terms and conditions of the transaction, and (ii) requesting the Other Group to indicate whether it wishes to acquire the 50% (fifty percent) Interest referred to in Section
1.6.4(b) above on the aforesaid terms and conditions. The Other Group shall have 15 (fifteen) days after the receipt of the aforesaid notice, to inform in writing the Lead Group of its decision. In the absence of any response within the
aforementioned period, the Other Group shall be deemed to have decided not to execute such transaction. 

  

	(d)	If the Other Group decides to execute such transaction on the terms and conditions referred to in Section 1.6.4(c)(i) above, both Groups shall use their best efforts to agree if the
Other Group will participate as a co-acquirer in the relevant acquisition agreement and/or other relevant documents relating to the acquisition of the Further Interest, or will acquire the relevant Interest from the Lead Group.

  

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	(e)	If the other Group decides not to acquire the 50% (fifty percent) of the Further Interest in a Wireless Property, or if the Groups fail to agree as set out in Section 1.6.4(d)
above, the Lead Group shall have the right, but not the obligation, to acquire the Further Interest in a Wireless Property, as well as, if such acquisition is finally performed, the obligation to then transfer it to the Company. In any event, the
Parties undertake to take all the necessary actions to transfer to the Company such Further Interest in a Wireless Property. Such transfer shall be performed in accordance with the following provisions: 

  

	 	(i)	Each Further Interest in a Wireless Property acquired under this Section 1.6.4 shall, subject to the conditions set forth herein, be transferred to the Company as an Additional
Capital Contribution as soon as possible after the Balance Closing, at the Company Shares Exchange Ratio determined in accordance with the provisions of Section 1.5 above. Accordingly, the Lead Group shall request the Independent Valuation set forth
in Sections 1.4 and 1.5 above by sending an Independent Valuation Notice to the other Group, provided that, if the Further Interest in a Wireless Property is acquired in terms of a capital increase (other than capital increases against
reserves, capitalization of “agios”, or by any other means which does not imply contribution of new assets to the relevant Wireless Property) or a tender offer, the Acquisition Price of such Further Interest in a Wireless Property
will serve as the Finalised Initial Valuation of such Further Interest, converted into a Euro amount, calculated using the average of the Fixing R$ / € exchange rates applicable on each of the days from the commencement date to the last day,
both days inclusive, of (x) the subscription period relating to the aforementioned capital increase or (y) the tender offer period (as the case may be). Such Fixing exchange rate will be the result of multiplying the exchange rate USD / R$ PTAX Ask
fixed by the Brazilian Central Bank (ticker Bloomberg: BZFXPTAX Index), by the exchange rate € / USD fixed by the ECB (Reuters Screen ECB37) on the applicable date. In the event of the acquisition of a Further Interest in a Wireless Property
through a capital increase against reserves, capitalization of “agios”, or by any other means which does not imply contribution of new assets to the relevant Wireless Property, the provisions of Sections 3.1.1(b) or 3.1.1(c) above
(as the case may be), shall apply. 

  

	 	(ii)	In the event that the Further Interest in a Wireless Property is acquired in terms of a capital increase by the Wireless Property and the Company decides not to exercise its
pre-emptive rights, the Company, to the extent legally permissible, will transfer to the Lead Group such pre-emptive rights, provided that, after such capital increase is effected, the percentage shareholding of the Company and the acquiring
Group in the relevant Wireless Property must, in the aggregate, not decrease and, accordingly, the Lead Group shall be obliged to exercise so many of the pre-emption rights as is necessary to ensure that the aggregate percentage shareholding of said
Group and the Company in the relevant Wireless Property does not decrease. 

  

	 	(iii)	For accounting purposes, the value of such Further Interest will be determined in accordance with the GAAP until the moment that the IAS may be applied under Netherlands law, in
which case the IAS will be applied, all as effective as at the Additional Closing. 

  

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	(f)	Each of the PT Group and TEF Group expressly agree that all action taken by them in exercising their rights and performing their obligations under this Section 1.6.4, shall be done
in compliance with all applicable laws of Portugal, Spain, Brazil, the U.S.A. and The Netherlands, and any other laws or regulations that may be applicable. 

  

	1.7	Tax Optimisation of the Contributions  

  

	(a)	The Parties agree that it is in their best interest that all Contributions provided for herein be transferred by each of them to the Company in the most tax efficient manner
vis-à-vis the Company and the Party transferring any such Contribution. The Parties will use their best efforts to agree upon the most tax efficient manner for such transfer. In the event the Parties do not agree on such most tax
efficient manner within a reasonable period of time, the Party that transfers a Contribution to the Company in a manner which is not considered the most tax efficient manner vis-à-vis the Company, shall promptly reimburse the Company
for any amounts of any taxes and related costs payable and incurred by the Company as a result of such tax inefficient transfer. Accordingly, any capital tax or other similar tax or duty which is levied on the Company as a result of Contributions
transferred to the Company (whether against further issuance of Company Shares or as informal capital contributions or otherwise), shall be reimbursed to the Company by the Party transferring the Contribution. 

  

	(b)	Furthermore, the Parties agree that the Articles of Association will include a clause in terms of which “the Company will promote, among other activities, the exportation of
goods and services from the parent companies to the wireless companies in Brazil”. 

  

	1.8	Acquisition of shares of Telesp Celular Participações, S.A. 

  

	(a)	In order to maintain the 50%-50% spirit set forth in Section 1.3 above, the TEF Group will acquire from the PT Group and the PT Group will transfer to the TEF Group certain shares
of Telesp Celular Participações, S.A. in accordance with the Share Purchase Agreement attached as Exhibit III (the “TCP Shares”), issued in terms of the capital increases approved by the general meeting of
shareholders of such company on June 25, 2002, as ratified by the board of directors on September 6, 2002, which will be transferred to the Company at the Balance Closing. 

  

	(b)	Such acquisition of TCP Shares will be made on the terms and conditions defined in the Share Purchase Agreement attached as Exhibit III, and once such acquisition is made, the TCP
Shares will be considered as a TEF Wireless Property. 

  

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 SECTION 2: INITIAL CAPITAL CONTRIBUTIONS 
  

	2.1	Initial Capital Contributions and Initial Closing: Subscription, Issuance and Payment of the Company Shares 

  
 Subject to the conditions set forth herein and as early as possible during
the fourth quarter of 2002, each of the TEF Group and the PT Group shall transfer to the Company its Initial Capital Contributions against the issuance of a number of Company Shares, (the “Initial Closing”). The PT Group and
the TEF Group agree with each other that: 
  

	(a)	each Group shall transfer its Initial Capital Contributions to the Company at the same time; 

  

	(b)	each Group’s Initial Capital Contributions, the value of each Group’s Initial Capital Contributions, and the number of Company Shares to be issued to each Group in respect
of such Contributions shall be agreed between the TEF Group and the PT Group by no later than the Initial Closing, which agreement shall be evidenced by a written document signed by the Groups at the Initial Closing, provided that it is
agreed that any TCP Shares acquired by the TEF Group pursuant to Section 1.8 above shall not form part of the TEF Group’s Initial Capital Contributions; and 

  

	(c)	if the aggregate value of such Initial Capital Contributions exceeds the aggregate nominal value of the Company Shares issued in respect of the transfer of said Initial Capital
Contributions, the difference shall be credited to the General Share Premium Reserve. 

  

	2.2	Initial Closing: Conditions Precedent 

  
 The respective obligation of each Group to consummate the transactions contemplated herein to occur at the Initial Closing is subject to the satisfaction
or waiver, at or prior to the Initial Closing, of the following conditions: 
  

	 	(a)	no statute, rule or regulation shall have been enacted, entered, promulgated or enforced by any court or Governmental Authority which prohibits or restricts the consummation of the
transactions contemplated hereby; 

  

	 	(b)	there shall not be in effect any judgement, order, injunction or decree of any court of competent jurisdiction or Governmental Authority enjoining the consummation of the
transactions contemplated hereby; 

  

	 	(c)	there shall not be any suit, action, investigation, inquiry or other proceeding instituted, pending or threatened by any Governmental Authority which seeks to enjoin or otherwise
prevent consummation of the transactions contemplated hereby; 

  

	 	(d)	each consent, authorisation and approval of any Person or any Governmental Authority (other than CADE, but including the European Union antitrust commission) or required under
applicable law shall have been obtained or the applicable requirement to obtain such consent, authorisation or approval shall have been waived; 

  

	 	(e)	the TEF Group and the PT Group, as applicable, shall have performed in all material respects its obligations under this Agreement required to be performed by it at or prior to the
Initial Closing, provided that a Breach shall be deemed not to be non-performance for purposes of this Section 2.2(e); and 

  

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	 	(f)	the other Group and the Company shall have executed and delivered any and all documents and shall have taken any and all actions as may be required for the timely completion of the
transfer to the Company of the Initial Capital Contributions; 

  
 provided that the conditions precedent set out in Sections 2.2(a), 2.2(b), 2.2(c) and 2.2(d) may only be waived by both Groups, and the conditions precedent set out in Sections 2.2(e) and 2.2(f) may only be
waived by the non-defaulting Group. 
  

	2.3	Initial Closing: Deliveries 

  
 At the Initial Closing, the Parties shall take, or cause to be taken, the following actions: 
  

	 	(a)	each relevant member of the TEF Group and each relevant member of the PT Group shall transfer to the Company its Initial Capital Contributions; 

  

	 	(b)	the relevant member of the TEF Group and the relevant member of the PT Group shall sign a notarial deed of issuance pursuant to which the relevant Company Shares are issued to such
relevant member of the TEF Group and such relevant member of the PT Group; 

  

	 	(c)	the shareholders’ register of the Company shall be duly updated to reflect the number of Company Shares held by each Group; 

  

	 	(d)	the delivery of letters or other documents evidencing the waiver of any applicable rights of first refusal which otherwise could be exercised by any Person in connection with the
transfer, to the Company, of the Initial Capital Contributions; and 

  

	 	(e)	the relevant member of the TEF Group and the relevant member of the PT Group and the Company shall take all other actions and execute all other documents, certificates and requests
as may reasonably be required for the timely completion of transfer to the Company of the Initial Capital Contributions. 

  

	2.4	Obtaining of the regulatory approvals for the Balance Closing before the Initial Closing 

  
 The Parties agree that, in the event that the relevant regulatory approvals for the Balance Closing are obtained before the
Initial Closing takes place, an Initial Closing shall not take place and the Parties shall, as soon as practicable after such regulatory approvals are obtained, transfer to the Company their Balance Capital Contributions, provided that in this
specific case the respective Balance Capital Contributions of each Group shall comprise 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 hereto) and (when
applicable) the corresponding amount of cash referred to in Section 3.1.1(b)below. Such transfer to the Company of the Balance Capital Contributions shall be performed in accordance with Section 3 below. 
  

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 SECTION 3: BALANCE CAPITAL CONTRIBUTIONS AND ADDITIONAL CAPITAL CONTRIBUTIONS 
  

	3.1.1  Balance	Capital Contributions: Subscription, Issuance and Payment of Additional Company Shares 

  

	(a)	Subject to the conditions set forth herein, as soon as possible after the relevant regulatory restrictions have been removed, each of the TEF Group and the PT Group shall transfer
to the Company its Balance Capital Contributions, against the issuance of a number of Company Shares (the “Balance Closing”). The PT Group and the TEF Group agree with each other that: 

  

	 	(i)	each Group shall transfer its Balance Capital Contributions to the Company at the same time; 

  

	 	(ii)	the value of each Group’s Balance Capital Contributions and the number of Company Shares to be issued to each Group in respect of such Contributions shall be agreed between the
TEF Group and the PT Group by no later than the Balance Closing, which agreement shall be evidenced by a written document signed by the Groups at the Balance Closing, provided that upon the transfer of the Balance Capital Contributions to the
Company each Group shall hold the same number of Company Shares; and 

  

	 	(iii)	if the aggregate value of such Balance Capital Contributions exceeds the aggregate nominal value of the Company Shares issued in respect of the transfer to the Company of said
Balance Capital Contributions, the difference shall be credited to the General Share Premium Reserve. 

  

	(b)	In the event that between the date hereof and the Balance Closing any acquisition of Further Interest in a Wireless Property occurs through capital increases in any of the TEF
Wireless Properties or PT Wireless Properties without giving rise to an increase in the number of shares to be transferred directly by the relevant Group to the Company in accordance with Exhibit IV of this Agreement (including but not limited to
capital increases without issuance of new shares), the other Group, as applicable, shall contribute to the Company in Euro, at the Balance Closing, the amount paid or incurred, directly or indirectly, in such capital increase by the relevant Group,
if any, such Euro amount to be calculated using the average of the Fixing R$ / € exchange rates applicable on each of the days from the commencement date to the last day, both days inclusive, of the subscription period relating to the
aforementioned capital increase. Such Fixing exchange rate will be the result of multiplying the exchange rate USD / R$ PTAX Ask fixed by the Brazilian Central Bank (ticker Bloomberg: BZFXPTAX Index), by the exchange rate € / USD fixed by the
ECB (Reuters Screen ECB37) on the applicable date. For the avoidance of doubt, capital increases by means of capitalization of “agios” or against reserves, will not give rise to the obligation of the other Group to transfer any
amount in cash to the Company. 

  

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	(c)	In the event that between the date hereof and the Balance Closing any acquisition of Further Interest in a Wireless Property occurs through a capital increase in any of the TEF
Wireless Properties or PT Wireless Properties, by any mean which does not imply contributions of new assets to the relevant Wireless Property (including but not limited to capitalization of “agios” or capital increases against
reserves), but that does give rise to an increase in the number of shares to be transferred directly to the Company in accordance with Exhibit IV of this Agreement, such Further Interest in a Wireless Property shall be transferred to the Company at
the Balance Closing together with the Balance Capital Contributions, and the other Group shall not contribute any amount in cash to the Company as a consequence of the transfer to the Company of such Further Interest in a Wireless Property.

  

	3.1.2	Additional Capital Contributions and Additional Closings: Subscription, Issuance and Payment of Additional Company Shares 

  
 Subject to the conditions set forth in this Agreement, as soon as possible,
after the Balance Closing, each of the PT Group and/or the TEF Group (as the case may be from time to time) shall transfer to the Company its Additional Capital Contributions, against the issuance of further Company Shares. The PT Group and the TEF
Group agree with each other that: 
  

	 	(i)	each Group shall transfer to the Company: 

  

	 	(A)	the Interests of the transferring Group in all New Acquisitions; 

  

	 	(B)	all Further Interests in Wireless Properties held by the transferring Group and not transferred to the Company at the Balance Closing; 

  

	 	(C)	in the case of a make-up Contribution by a Reduced Shareholder as referred to in Sections 6.1, 6.2 and 6.3 of the Shareholders Agreement, an amount of cash in Euro and/or (if
accepted by the other Group) Liquid Assets equivalent to the value of (that portion of) the Contribution having caused the dilution, as determined in the Contribution Valuation, accrued with the Cost of Carrying (when applicable) as set forth in
Sections 6.1, 6.2 and 6.3 of the Shareholders Agreement; and 

  

	 	(ii)	unless otherwise agreed in writing by the TEF Group and the PT Group in respect of the Additional Capital Contribution: 

  

	 	(A)	other than in the case of a make-up Contribution by a Reduced Shareholder as referred to in Sections 6.1, 6.2 and 6.3 of the Shareholders Agreement, the number of Company Shares to
be issued against the transfer to the Company of the Additional Capital Contribution shall be determined using the Company Shares Exchange Ratio. If the accounting value of the aforesaid Contribution as defined in Sections 1.6.2(e) and 1.6.4(e)(iii)
above (as the case may be) exceeds the aggregate nominal value of the Company Shares issued as defined above, the difference shall be credited to the General Share Premium Reserve; and 

  

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	 	(B)	in the case of a make-up Contribution by a Reduced Shareholder as referred to in Sections 6.1, 6.2 and 6.3 of the Shareholders Agreement, the transferring Group shall be issued with
so many Company Shares as corresponds to the number of Company Shares issued in respect of (that portion of) the Additional Capital Contribution having caused the dilution. If the amount of cash plus, if applicable, Liquid Assets of the make-up
Contribution, exceeds the aggregate nominal value of the Company Shares issued as defined above, the difference shall be credited to the General Share Premium Reserve. 

  

	3.2	Balance Closing and Additional Closings: Conditions Precedent 

  

The respective obligation of each Group to transfer to the Company the Balance Capital Contributions and any of the Additional Capital Contributions
contemplated hereby is subject to the satisfaction or waiver, at or prior to the respective Balance Closing or Additional Closing, of the following conditions: 
  

	 	(a)	no statute, rule or regulation shall have been enacted, entered, promulgated or enforced by any court or Governmental Authority which prohibits or restricts the transfer of the
relevant Contribution; 

  

	 	(b)	there shall not be in effect any judgement, order, injunction or decree of any court of competent jurisdiction or Governmental Authority enjoining the transfer of the relevant
Contribution; 

  

	 	(c)	there shall not be any suit, action, investigation, inquiry or other proceeding instituted, pending or threatened by any Governmental Authority which seeks to enjoin or otherwise
prevent transfer of the relevant Contribution; 

  

	 	(d)	each consent, authorisation and approval of any Person or any Governmental Authority (other than CADE) or the European Union antitrust commission or required under applicable law
for each Group to make the relevant Contribution, including, but not limited to, ANATEL’s prior written consent for the transfer of the voting control of the Wireless Properties and/or the New Acquisitions to the Company, shall have been
obtained or, when applicable, the requirement to obtain such consent, authorisation or approval shall have been waived; 

  

	 	(e)	each of the TEF Group and the PT Group, as applicable, shall have performed in all material respects its obligations under this Agreement required to be performed by it at or prior
to the date of Balance Closing or Additional Closing (as the case may be), provided that a Breach, shall be deemed not to be non-performance for purposes of this Section 3.2(e); 

  

	 	(f)	 the other Group and the Company shall have executed and delivered any and all other documents and shall have taken any and all other actions as may reasonably be
required for the timely completion of the transfer of the relevant Contribution; 

  

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provided that the conditions precedent set out in Sections 3.2(a), 3.2(b), 3.2(c) and 3.2(d) may only be waived by both Groups, and the conditions
precedent set out in Sections 3.2(e) and 3.2(f) may only be waived by the non-defaulting Group. 

  

	3.3	Balance Closing and Additional Closings; Deliveries 

  
 At the Balance Closing and each Additional Closing, the Parties shall take, or cause to be taken, the following actions: 
  

	 	(a)	each relevant member of the TEF Group and/or (as the case may be), each relevant member of the PT Group shall transfer to the Company its Balance Capital Contributions or relevant
Additional Capital Contribution (as the case may be), and, if such Additional Capital Contribution is cash, in immediately available funds; 

  

	 	(b)	the relevant member of the TEF Group and/or (as the case may be), the relevant member of the PT Group shall sign a notarial deed of issuance in terms of which a number of Company
Shares are issued to such relevant member of the TEF Group and/or such relevant member of the PT Group (as the case may be); 

  

	 	(c)	the shareholders’ register of the Company shall be duly updated to reflect the number of Company Shares held by each Group; 

  

	 	(d)	the delivery of letters or other documents evidencing the waiver or the non-exercise of any applicable rights of first refusal which otherwise could be exercised by any Person in
connection with the transfer, to the Company, of the relevant Contribution contemplated hereunder; and 

  

	 	(e)	the relevant member of the TEF Group and/or (as the case may be), the relevant member of the PT Group and the Company shall take all other actions and execute other documents,
certificates and requests as may reasonably be required for the timely completion of the transfer to the Company of the relevant Contribution. 

  
 SECTION 4: REPRESENTATIONS AND WARRANTIES BY THE TEF GROUP 
  
 In consideration for the PT Group entering into this Agreement and consummating the transactions hereunder, the TEF Group represents and warrants to the PT Group that the
representations and warranties as set out in this Section 4, which representations and warranties are supplemented by the disclosure schedules attached hereto as Exhibit V, (the “TEF Group Disclosure Schedule”), are,
individually and jointly, true and not misleading, provided that, save as otherwise required by the context of the relevant representation or warranty, the representations and warranties: 
  

	(a)	are made and given as at the date of this Agreement; and 

  

	(b)	shall: 

  

	 	(i)	 in respect of the representations and warranties contained in Sections 4.2, 4.4, 4.7, and 4.17 below, be deemed to be repeated, on the Initial Closing, on the
Balance 

  

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Closing and on each applicable Additional Closing, as being individually and jointly true and not misleading as at the Initial Closing, as at the Balance
Closing, and as at the applicable Additional Closing (as the case may be); 

  

	 	(ii)	in respect of the representations and warranties not referred to in Section 4(b)(i) above, be deemed to be repeated, on the Initial Closing, on the Balance Closing and on each
applicable Additional Closing, as being individually and jointly true and not misleading as at the date of this Agreement, with respect to all the Interests in the TEF Covered Assets being transferred by the TEF Group to the Company on the Initial
Closing, the Balance Closing, or the applicable Additional Closing (as the case may be); 

  
 Accordingly, the TEF Group hereby represents and warrants to the PT Group as follows: 
  

	4.1	Organisation 

  
 Each of the TEF Covered Assets listed in Exhibit VIII is and, on the date of the Initial Closing and, if it is the case, on the date of each other Closing
relating to an Interest in such TEF Covered Assets, will be a corporation or a company, as the case may be, duly organised, validly existing under the laws of their respective country of incorporation and has and will have all requisite corporate
and other power and corporate authority to own, lease and operate its properties and to carry on its operations as now being conducted. TEM has made available to Portugal Telecom and PT Móveis in Section 4.1 of the TEF Group Disclosure
Schedule complete and correct copies of the bylaws and the shareholders agreements of each of the TEF Covered Assets as currently in effect. The rights and obligations set forth in such shareholders agreements are, on the date hereof, (a) the valid
and binding rights and obligations of each of the parties thereto enforceable against each of such parties in accordance with their terms, and no party thereto is in default thereunder; and (b) duly annotated in TEF Covered Assets corporate books
and records, except for Section 4.1 of the TEF Group Disclosure Schedule. 
  

	4.2	Authorisation 

  
 Each member of the TEF Group is a corporation duly organised, validly existing under the laws of its country of incorporation. Each member of the TEF
Group has the legal right, capacity and corporate power and authority to execute and deliver this Agreement and the Shareholders Agreement and consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement
and the Shareholders Agreement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorised by the board of directors of each of the members of the TEF Group, and no other corporate proceedings on
the part of same are necessary to authorise the execution, delivery and performance of this Agreement, the Shareholders Agreement or the consummation of the transactions contemplated hereby and thereby. This Agreement and the Shareholders Agreement
have been duly executed and delivered by each of the members of the TEF Group and constitute, and each of the other agreements, documents and instruments to be executed and delivered by each of the members of the TEF Group pursuant hereto and
thereto, when executed and delivered, will constitute, valid and binding obligations of each of the members of the TEF Group, 

  

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enforceable against each of the members of the TEF Group in accordance with its terms, except that such enforcement may be subject to any applicable
bankruptcy, insolvency, moratorium or similar law. 
  

	4.3	Capital Stock 

  
 Set forth on Section 4.3 of the Disclosure Schedule is the number of all common shares and preferred shares representing the entire capital stock of each
of the TEF Covered Assets, all of which were validly issued and fully paid, and the name of each shareholder therein who is the owner of record or beneficial owner of not less than 5% of the total capital stock of each of the TEF Covered Assets.
Except as set forth in Section 4.3 of the TEF Group Disclosure Schedule, there are no outstanding securities of, or any securities or other obligations convertible into, exchangeable for, or carrying the right to acquire, or otherwise conferring
rights in, equity securities of the TEF Covered Assets, nor are there any subscriptions, warrants, options, rights or other arrangements or commitments (other than this Agreement) which could obligate the TEF Covered Assets to issue, or the TEF
Group to sell all or a portion of the Interests in the TEF Covered Assets, nor is any of the TEF Covered Assets committed to issue any such security, warrants, options, rights or enter into such arrangements or commitments. 
  

	4.4	Ownership of the Capital Stock 

  
 The TEF Group will, as of the Initial Closing, the Balance Closing and any Additional Closings, be the record and beneficial owner of, and will have good
and marketable title to all of the Interests in the TEF Covered Assets intended to be transferred to the Company at any such Closing, free and clear of all liens, claims, title defects, charges, restrictions, rights of first refusal, options,
security interests, mortgages, pledges, debts, demands or other encumbrances (“Liens”). 
  

	4.5	Ownership and Good Title of Assets 

  
 The TEF Covered Assets are and will be on the date of the Initial Closing and on the date Interests in such TEF Covered Assets are transferred by the TEF
Group to the Company at the Balance Closing and at any Additional Closing, the sole owners of any and all of each of their relevant Assets, which have before, on, or will have after, the Closings, good and marketable title, free and clear of all
Liens, except as set forth in Section 4.5 of the TEF Disclosure Schedule, or otherwise where the failure to have such title or rights would not be reasonably expected to have a Material Adverse Effect. 
  

	4.6	Condition and Sufficiency of Assets 

  
 All of the relevant Assets of the TEF Covered Assets are and will be on the date of the Initial Closing and on the date Interests in such TEF Covered
Assets are transferred to the Company at the Balance Closing and at any Additional Closing, structurally sound, are and will be in good operating condition and repair, and are and will be adequate for the uses to which they are being put, and none
of such Assets are or will be in need of maintenance and repairs that are material in nature or cost and that are out of the ordinary course of business. The Assets of the TEF Covered Assets are and will be sufficient for the continued conduct of
the their businesses after each of the Closings, in substantially the same manner as conducted prior to the respective Closing. 
  

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	4.7	Consents and Approvals; No Violations 

  
 Except as set forth in Section 4.7 of the TEF Group Disclosure Schedule with respect to items (b) and (c) below, neither the execution and delivery of
this Agreement and the Shareholders Agreement, nor the consummation by the TEF Group of the transactions contemplated hereby or thereby will (a) conflict with or result in any breach of any provision of the bylaws of the members of the TEF Group;
(b) require any filing with, or the obtaining of any permit, authorisation, consent or approval of, any governmental or regulatory authority whether within or outside Brazil, Spain, or Portugal; (c) violate, conflict with or result in a default (or
any event which, with notice or lapse of time or both, would constitute a default) under, or give rise to any right of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any note, mortgage, other evidence
of indebtedness, guarantee, license, agreement (including, but not limited to, shareholders’ agreements regarding the shares of TEF Covered Assets), lease or other contract or instrument or obligation to which the TEF Covered Assets or any of
the members of the TEF Group is a party or by which the TEF Covered Assets, any of the members of the TEF Group or any of their assets may be bound; (d) result in the creation of any Lien of any kind upon the TEF Covered Assets or any property or
assets of any of the TEF Covered Assets, or any member of the TEF Group, under any debt, obligation, contract, agreement or commitment to which it is a party or by which it is bound; or (e) violate any order, injunction, decree, statute, rule or
regulation applicable to the TEF Covered Assets or any member of the TEF Group, excluding from the foregoing clauses (b), (c), (d) and (e) such requirements, conflicts, defaults, rights, security interests, claims, Liens, charges, other encumbrances
or violations which could not reasonably be expected to have a Material Adverse Effect and could not be reasonably expected to adversely affect the ability of each of the TEF Covered Assets, or the TEF Group to consummate the transactions
contemplated by this Agreement free and clear of Liens. 
  

	4.8	Financial Statements 

  
 Attached in Section 4.8 of the Disclosure Schedule are copies of the audited consolidated financial statements as of and for the year ended December 31,
2001 and copies of the reviewed, consolidated financial statements as of the period ended June 30, 2002 with respect to each of the TEF Covered Assets (the financial statements referred to above and the accompanying notes thereto are referred
to herein collectively as the “TEF Group Financial Statements”). Except as stated otherwise in the TEF Group Financial Statements or in Section 4.8 of the TEF Group Disclosure Schedule, such TEF Group Financial Statements (a)
fairly present, in all material respects, the financial position of the TEF Covered Assets as of the respective dates thereof, all in accordance with Brazilian GAAP consistently applied throughout the period indicated; and (b) are correct and
complete in all material respects and are consistent with the books and records of the TEF Covered Assets. 
  

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	4.9	Absence of Undisclosed Liabilities 

  
 Except (a) for liabilities and obligations (i) incurred in the ordinary course of business consistent with past practices since the date of the TEF Group
Financial Statements or (ii) which are duly reflected, or reserved against, in the TEF Group Financial Statements and (b) as otherwise disclosed herein or in Section 4.9 of the TEF Group Disclosure Schedule, none of the TEF Covered Assets has
incurred any liabilities or obligations (whether direct, indirect, accrued or contingent). 
  

	4.10	Absence of Material Adverse and Other Changes 

  
 Except as set forth in Section 4.10 of the TEF Group Disclosure Schedule, since December 31, 2001, the business of TEF Covered Assets has been conducted
in the ordinary course consistent with past practices and there has not been any change in the business, results of operations or financial condition of any of the TEF Covered Assets as described in the TEF Group Financial Statements, which could be
reasonably be expected to have a Material Adverse Effect. 
  

	4.11	Intellectual Property 

  
 Section 4.11 of the TEF Group Disclosure Schedule sets forth a complete and accurate list of the relevant trademarks, trade names, service marks, service
names, internet domain names, software, mark registrations, logos, assumed names, copyrights and copyright registrations, patents and all applications therefor which TEF Covered Assets own or have the right to used in the operation of the TEF
Covered Assets Wireless Business as currently conducted (collectively, the “TEF Group Intellectual Property”). Except as set forth in Section 4.11 of the TEF Group Disclosure Schedule:, 
  

	 	(a)	there are no pending or, to the Knowledge of each of the members of the TEF Group, threatened proceedings or litigation or other adverse claims by any person relating to the use by
the TEF Covered Assets of any TEF Group Intellectual Property. 

  

	 	(b)	TEF Covered Assets owns, free and clear of Liens, all TEF Group Intellectual Property Rights owned by TEF Group and has a valid and enforceable right to use all of TEF Group
Intellectual Property used by TEF Covered Assets; 

  

	 	(c)	the conduct of the business by TEF Covered Assets as currently conducted does not infringe upon any rights with respect to intellectual property owned or controlled by any third
party; 

  

	 	(d)	none of the TEF Group Intellectual Property used by TEF Covered Assets that are material to the operation of their respective businesses has been adjudged invalid or unenforceable
in whole or part; 

  

	 	(e)	 the execution, delivery and performance by TEF Group of this Agreement, and the consummation of the transactions contemplated hereby, will not result in the loss or
impairment of, or give rise to any right of any third party to terminate, any of TEF Covered Assets rights to own any of its TEF Group Intellectual 

  

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Property, nor require the consent of any Governmental Authority or third party in respect of any such TEF Group Intellectual Property; and

  

	 	(f)	the material software owned or purported to be owned by TEF Covered Assets, was either (A) developed by employees of TEF Covered Assets within the scope of their employment; (B)
developed by independent contractors who have assigned their rights to TEF Covered Assets pursuant to written agreements; or (C) otherwise acquired by TEF Covered Assets from a third party. 

  

	4.12	Litigation 

  
 Except as set forth in Section 4.12 of the TEF Group Disclosure Schedule, there is no claim, action, suit, proceeding or governmental, administrative,
arbitration or regulatory proceeding or investigation pending or, to the Knowledge of the members of the TEF Group, threatened against or affecting each of the TEF Covered Assets, or their respective business, properties or assets by or before any
court, governmental or regulatory authority or by any third party which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect and in excess of R$ 100,000 (one hundred thousand Brazilian Reais) or the
equivalent in other currencies in respect to claims of labour nature or in excess of R$ 500,000 (five hundred Brazilian Reais) or the equivalent in other currencies in respect to claims of any other nature. 
  

	4.13	Compliance with Applicable Law 

  
 Each of the TEF Covered Assets is in compliance with all applicable laws, ordinances, rules and regulations of any Governmental Authority applicable to
the TEF Group, the TEF Covered Assets, respectively, and their respective operations, except for violations, if any, which could not reasonably be expected to have a Material Adverse Effect. Except as set forth in Section 4.13 of the TEF Group
Disclosure Schedule, each of the TEF Covered Assets has all material permits, licenses, approvals and authorisations of all Governmental Authorities necessary to conduct its business as presently conducted except for those permits, licenses,
approvals and authorisations which could not reasonably be expected to have a Material Adverse Effect. 
  

	4.14	Material Contracts and Arrangements 

  
 Except as set forth in Section 4.14 of the TEF Group Disclosure Schedule, as of the date hereof: 
  

	 	(a)	 none of the TEF Covered Assets is a party to or bound by any written (i) employment agreement; (ii) indenture, mortgage, note, loan, financing, instalment
obligation, agreement or other instrument relating to the borrowing of money by it, or the guarantee by it of any obligation for the borrowing of money; or (iii) other agreement, including without limitation, purchase orders, or any enforceable oral
agreement, which individually involves the receipt or payment after the date hereof of more than R$ 1,000,000 (one million Brazilian Reais) or the equivalent in other currencies on an annual basis or R$ 1,000,000 (one million Brazilian Reais) or the

  

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equivalent in other currencies over the remaining term thereof. All such agreements are valid, binding and enforceable in accordance with their terms and
neither the relevant Wireless Property nor, to the Knowledge of Wireless Property, any other party thereto is in default under any of the aforesaid agreements, other than such defaults, if any, which could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect; 

  

	 	(b)	There are no existing contracts material to the business of any of the TEF Covered Assets to which any member or Affiliate of the TEF Group is a party; 

  

	 	(c)	No TEF Covered Asset is party to any contract material to the business of the TEF Covered Asset, with any of its current or former employees, directors, officers or consultants or
any Person connected (as defined by applicable law in the relevant jurisdiction) with any of such Persons, or in which any such Person is interested (whether directly or indirectly), other than on normal commercial terms in the ordinary course of
business; 

  

	 	(d)	all material contracts and agreements have all necessary corporate authorisation for their execution, delivery and performance by TEF Covered Assets, in accordance with their
by-laws and applicable legislation; and 

  

	 	(e)	all material contracts and agreements entered into by the TEF Covered Assets with their Affiliates and any entity of the TEF Group represent arm’s length transactions, being
such term interpreted as a transaction in good faith negotiated on fair market value basis by unrelated parties acting with independent interests in the ordinary course of business; 

  

	4.15	Labour Matters 

  
 Except as set forth in Section 4.15 of the TEF Group Disclosure Schedule, none of the TEF Covered Assets is and, on the date of the Initial Closing and on
the date Interests in such TEF Covered Assets are transferred to the Company at any Additional Closing, will be a party to any collective bargaining agreement with any labour union, confederation or association, stock option plans, profit sharing,
pension, deferred compensation, bonus, severance, halth, welfare, life insurance and other fringe benefit and there are no discussions, negotiations, demands or proposals that are pending or have been conducted or made with or by any labour union,
confederation or association and there are not pending against any of the TEF Covered Assets any general labour disputes, strikes or work stoppages. 
  

	4.16	Taxes 

  

	(a)	 Except as set forth in Section 4.16 of the TEF Group Disclosure Schedule, each of the TEF Covered Assets has and, on the date of the Initial Closing and on the date
such TEF Covered Assets are transferred to the Company at any Additional Closing, shall have (a) timely filed or caused to be filed on a timely basis with the appropriate taxing authorities all material Tax Returns required to be filed by or with
respect to each of the TEF Covered Assets, and (b) paid or made adequate provision for the payment of all Taxes shown to be due on such Tax Returns except such Taxes, if any, being contested in good 

  

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faith and as to which adequate reserves have been provided. Such Tax Returns are and will be true, correct and complete in all material respects;

  

	 	(b)	Except as set forth in Section 4.16 of the TEF Group Disclosure Schedule: 

  

	 	(i)	there are and, on the date of the Initial Closing and on the date Interests in such TEF Covered Assets are transferred to the Company at any Additional Closing, there shall be no
Liens for Taxes with respect to the assets of the Company and no material claims with respect to Taxes are being asserted by any taxing authority in writing, which individually would have a Material Adverse Effect on the business or other assets of
each of the TEF Covered Assets except for statutory Liens for current taxes not yet delinquent; 

  

	 	(ii)	none of the Tax Returns of each of the TEF Covered Assets is currently being and, on the date of the Initial Closing and on the date Interests in such TEF Covered Assets are
transferred to the Company at any Additional Closing, shall be audited or examined by any taxing authority; 

  

	 	(iii)	there is and on the date of the Initial Closing and on the date Interests in such TEF Covered Assets are transferred to the Company at any Additional Closing, there shall be no
material unpaid tax deficiency, determination or assessment currently outstanding against any of the TEF Covered Assets; and 

  

	 	(iv)	there are, and on the date of the Initial Closing and on the date Interests in such TEF Covered Assets are transferred to the Company at any Additional Closing, there shall be no
outstanding agreements or waivers extending the statute of limitations relating to the payment of Taxes of any of the TEF Covered Assets for taxable periods for which the periods of the applicable statutes of limitations have not expired.

  

	4.17	Certain Fees 

  
 Except for the engagement of Salomon Smith Barney, none of the members of the TEF Group or any of their respective Affiliates has employed any financial
advisor or finder or incurred any liability for any financial advisory or finders’ fees in connection with this Agreement or the transactions contemplated hereby. 
  

	4.18	Representations and Warranties for Subsidiaries 

  
 All the representations and warranties made by the TEF Group with respect to the TEF Covered Assets shall also be deemed to have been made with respect to
the Subsidiaries of each of the TEF Covered Assets, if any. 
  
 SECTION 5:
REPRESENTATIONS AND WARRANTIES BY THE PT GROUP 
  
 In consideration for the
TEF Group entering into this Agreement and consummating the transactions hereunder, the PT Group represents and warrants to the TEF Group that the representations and warranties as set out in this Section 5, which representations and warranties are
supplemented by the disclosure schedules attached hereto as Exhibit VI (the “PT Group Disclosure Schedule”), are, individually and jointly, true and not misleading, provided that, save as otherwise required by the
context of the relevant representation or warranty, the representations and warranties: 
  

	(a)	are made and given as at the date of this Agreement; and 

  

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	(b)	shall: 

  

	 	(i)	in respect of the representations and warranties contained in Sections 5.2, 5.4, 5.7, and 5.17 below, be deemed to be repeated, on the Initial Closing, on the Balance Closing and on
each applicable Additional Closing, as being individually and jointly true and not misleading as at the Initial Closing, as at the Balance Closing, and as at the applicable Additional Closing (as the case may be); 

  

	 	(ii)	in respect of the representations and warranties not referred to in Section 5(b)(i) above, be deemed to be repeated, on the Initial Closing, on the Balance Closing and on each
applicable Additional Closing, as being individually and jointly true and not misleading as at the date of this Agreement, with respect to all the Interests in the PT Covered Assets being transferred by the PT Group to the Company on the Initial
Closing, the Balance Closing, or the applicable Additional Closing (as the case may be), 

  
 provided that where a representation or warranty (other than the representations and warranties referred to in Section 5(b)(i) above) relates to Global Telecom, a Breach in respect of the representations and
warranties contained in this Section 5, for purposes of this Section 5 and Section 8, shall only be considered to exist if the circumstance or fact giving rise to such breach arose or occurred after the date of acquisition by the PT Group of an
Interest in Global Telecom under the “Share Sale and Purchase Agreement” dated January 13, 2001 (the “GT Acquisition Agreement”); 
  
 Accordingly, the PT Group hereby represents and warrants to the TEF Group as follows: 
  

	5.1	Organisation 

  
 Each of the PT Covered Assets listed in Exhibit VII is and, on the date of the Initial Closing and, if it is the case, on the date of each other Closing
relating to an Interest in such Wireless Property or Global Telecom, will be a corporation or a company, as the case may be, duly organised, validly existing under the laws of their respective country of incorporation and has and will have all
requisite corporate and other power and corporate authority to own, lease and operate its properties and to carry on its operations as now being conducted. Each of Portugal Telecom and PT Móveis has heretofore made available to TEM in Section
4.1 of the PT Group Disclosure Schedule complete and correct copies of the bylaws and the shareholders agreements of each of the PT Covered Assets as currently in effect. The rights and obligations set forth in such shareholders agreements are, on
the date hereof, (a) the valid and binding rights and obligations of each of the parties thereto enforceable against each of such parties in accordance with their terms, and no party thereto is in default thereunder; and (b) duly annotated in PT
Covered Assets corporate books and records. 
  

	5.2	Authorisation 

  
 Each member of the PT Group is a corporation duly organised, validly existing under the laws of its country of incorporation. Each member of the PT Group
has the legal right, 

  

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capacity and corporate power and authority to execute and deliver this Agreement and the Shareholders Agreement and consummate the transactions contemplated
hereby and thereby. The execution and delivery of this Agreement and the Shareholders Agreement and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorised by the board of directors of each of the
members of the PT Group, and no other corporate proceedings on the part of each of the members of the PT Group are necessary to authorise the execution, delivery and performance of this Agreement, the Shareholders Agreement or the consummation of
the transactions contemplated hereby and thereby. This Agreement and the Shareholders Agreement have been duly executed and delivered by each of the members of the PT Group and constitute, and each of the other agreements, documents and instruments
to be executed and delivered by each of the members of the PT Group pursuant hereto and thereto, when executed and delivered, will constitute, valid and binding obligations of each of the members of the PT Group, enforceable against each of the
members of the PT Group in accordance with its terms, except that such enforcement may be subject to any applicable bankruptcy, insolvency, moratorium or similar law. 
  

	5.3	Capital Stock 

  
 Set forth on Section 5.3 of the Disclosure Schedule is the number of all common shares and preferred shares representing the entire capital stock of each
of the PT Covered Assets, all of which were validly issued and fully paid, and the name of each shareholder therein who is the owner of record or beneficial owner of not less than 5% of the total capital stock of each of the PT Covered Assets.
Except as set forth in Section 5.3 of the PT Group Disclosure Schedule, there are no outstanding securities of, or any securities or other obligations convertible into, exchangeable for, or carrying the right to acquire, or otherwise conferring
rights in, equity securities of the PT Covered Assets, nor are there any subscriptions, warrants, options, rights or other arrangements or commitments (other than this Agreement) which could obligate the PT Covered Assets to issue, or the PT Group
to sell all or a portion of the Interests in the PT Covered Assets, nor is any of the PT Covered Assets committed to issue any such security, warrants, options, rights or enter into such arrangements or commitments. 
  

	5.4	Ownership of the Capital Stock 

  
 The PT Group will, as of the Initial Closing, the Balance Closing and any Additional Closings, be the record and beneficial owner of, and will have good
and marketable title to all of the Interests in the PT Covered Assets intended to be transferred to the Company at any such Closing, free and clear of all liens, claims, title defects, charges, restrictions, rights of first refusal, options,
security interests, mortgages, pledges, debts, demands or other encumbrances (“Liens”). 
  

	5.5	Ownership and Good Title of Assets 

  
 The PT Covered Assets are and will be on the date of the Initial Closing and on the date Interests in such PT Covered Assets are transferred by the PT
Group to the Company at the Balance Closing and at any Additional Closing, the sole owners of any and all of each of their relevant Assets, which have before, on, or will have after, the Closings, good and 

  

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marketable title, free and clear of all Liens, except as set forth in Section 5.5 of the PT Disclosure Schedule, or otherwise where the failure to have such
title or rights would not be reasonably expected to have a Material Adverse Effect. 
  

	5.6	Condition and Sufficiency of Assets 

  
 All of the relevant Assets of the PT Covered Assets are and will be on the date of the Initial Closing and on the date Interests in such PT Covered Assets
are transferred to the Company at the Balance Closing and at any Additional Closing, structurally sound, are and will be in good operating condition and repair, and are and will be adequate for the uses to which they are being put, and none of such
Assets are or will be in need of maintenance and repairs that are material in nature or cost and that are out of the ordinary course of business. The Assets of the PT Covered Assets are and will be sufficient for the continued conduct of the their
businesses after each of the Closings, in substantially the same manner as conducted prior to the respective Closing. 
  

	5.7	Consents and Approvals; No Violations 

  
 Except as set forth in Section 5.7 of the PT Group Disclosure Schedule with respect to items (b) and (c) below, neither the execution and delivery of this
Agreement and the Shareholders Agreement, nor the consummation by the PT Group of the transactions contemplated hereby or thereby will (a) conflict with or result in any breach of any provision of the bylaws of the members of the PT Group; (b)
require any filing with, or the obtaining of any permit, authorisation, consent or approval of, any governmental or regulatory authority whether within or outside Brazil, Spain, or Portugal; (c) violate, conflict with or result in a default (or any
event which, with notice or lapse of time or both, would constitute a default) under, or give rise to any right of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any note, mortgage, other evidence of
indebtedness, guarantee, license, agreement (including, but not limited to, shareholders’ agreements regarding the shares of PT Covered Assets), lease or other contract or instrument or obligation to which the PT Covered Assets or any of the
members of the PT Group is a party or by which the PT Covered Assets or any equity interests in the PT Covered Assets, any of the members of the PT Group or any of their assets may be bound; (d) result in the creation of any Lien of any kind upon
the PT Covered Assets or any property or assets of any of the PT Covered Assets, or any member of the PT Group, under any debt, obligation, contract, agreement or commitment to which it is a party or by which it is bound; or (e) violate any order,
injunction, decree, statute, rule or regulation applicable to the PT Covered Assets, or any member of the PT Group, excluding from the foregoing clauses (b), (c), (d) and (e) such requirements, conflicts, defaults, rights, security interests,
claims, Liens, charges, other encumbrances or violations which could not reasonably be expected to have a Material Adverse Effect and could not be reasonably expected to adversely affect the ability of each of the PT Covered Assets, or the TEF Group
to consummate the transactions contemplated by this Agreement free and clear of Liens. 
  

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	5.8	Financial Statements 

  
 Attached in Section 5.8 of the Disclosure Schedule are copies of the audited consolidated financial statements as of and for the year ended December 31,
2001, and copies of the reviewed, consolidated financial statements as of the period ended June 30, 2002 with respect to each of the PT Covered Assets (the financial statements referred to above and the accompanying notes thereto are referred
to herein collectively as the “PT Group Financial Statements”). Except as stated otherwise in the PT Group Financial Statements or in Section 5.8 of the PT Group Disclosure Schedule, such PT Group Financial Statements (a)
fairly present, in all material respects, the financial position of the PT Covered Assets as of the respective dates thereof, all in accordance with Brazilian GAAP consistently applied throughout the period indicated; and (b) are correct and
complete in all material respects and are consistent with the books and records of the PT Covered Assets. 
  

	5.9	Absence of Undisclosed Liabilities 

  
 Except (a) for liabilities and obligations (i) incurred in the ordinary course of business consistent with past practices since the date of the PT Group
Financial Statements or (ii) which are duly reflected, or reserved against, in the PT Group Financial Statements and (b) as otherwise disclosed herein or in Section 5.9 of the PT Group Disclosure Schedule, none of the PT Covered Assets has incurred
any liabilities or obligations (whether direct, indirect, accrued or contingent). 
  

	5.10	Absence of Material Adverse and Other Changes 

  
 Except as set forth in Section 5.10 of the PT Group Disclosure Schedule, since December 31, 2001, the business of PT Covered Assets has been conducted in
the ordinary course consistent with past practices and there has not been any change in the business, results of operations or financial condition of any of the PT Covered Assets as described in the PT Group Financial Statements, which could be
reasonably be expected to have a Material Adverse Effect. 
  

	5.11	Intellectual Property 

  
 Section 5.11 of the PT Group Disclosure Schedule sets for the a complete and accurate list of the relevant trademarks, trade names, service marks, service
names, internet domain names, software, mark registrations, logos, assumed names, copyrights and copyright registrations, patents and all applications therefor which PT Covered Assets own or have the right to used in the operation of the PT Covered
Assets Wireless Business as currently conducted (collectively, the “PT Group Intellectual Property”). Except as set forth in Section 5.11 of the PT Group Disclosure Schedule: 
  

	(a)	there are no pending or, to the Knowledge of each of the members of the PT Group, threatened proceedings or litigation or other adverse claims by any person relating to the use by
the PT Covered Assets of any PT Group Intellectual Property; 

  

	(b)	PT Covered Assets owns, free and clear of Liens, all PT Group Intellectual Property Rights owned by PT Group and has a valid and enforceable right to use all of PT Group
Intellectual Property used by PT Covered Assets; 

  

	(c)	the conduct of the business by PT Covered Assets as currently conducted does not infringe upon any rights with respect to intellectual property owned or controlled by any third
party; 

  

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	(d)	none of the PT Group Intellectual Property used by PT Covered Assets that are material to the operation of their respective businesses has been adjudged invalid or unenforceable in
whole or part; 

  

	(e)	the execution, delivery and performance by PT Group of this Agreement, and the consummation of the transactions contemplated hereby, will not result in the loss or impairment of, or
give rise to any right of any third party to terminate, any of PT Covered Assets rights to own any of its PT Group Intellectual Property, nor require the consent of any Governmental Authority or third party in respect of any such PT Group
Intellectual Property; and 

  

	(f)	the material software owned or purported to be owned by PT Covered Assets, was either (A) developed by employees of PT Covered Assets within the scope of their employment; (B)
developed by independent contractors who have assigned their rights to PT Covered Assets pursuant to written agreements; or (C) otherwise acquired by PT Covered Assets from a third party. 

  

	5.12	Litigation 

  
 Except as set forth in Section 5.12 of the PT Group Disclosure Schedule, there is no claim, action, suit, proceeding or governmental, administrative,
arbitration or regulatory proceeding or investigation pending or, to the Knowledge of the members of the PT Group, threatened against or affecting each of the PT Covered Assets, or their respective business, properties or assets by or before any
court, governmental or regulatory authority or by any third party which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect and in excess of R$ 100,000 (one hundred thousand Brazilian Reais) or the
equivalent in other currencies in respect to claims of labour nature or in excess of R$ 500,000 (five hundred Brazilian Reais) or the equivalent in other currencies in respect to claims of any other nature. 
  

	5.13	Compliance with Applicable Law 

  
 Each of the PT Covered Assets, is in compliance with all applicable laws, ordinances, rules and regulations of any Governmental Authority applicable to
the PT Group, the PT Covered Assets, respectively, and their respective operations, except for violations, if any, which could not reasonably be expected to have a Material Adverse Effect. Except as set forth in Section 5.13 of the PT Group
Disclosure Schedule, each of the PT Covered Assets has all permits, licenses, approvals and authorisations of all Governmental Authorities necessary to conduct its business as presently conducted except for those permits, licenses, approvals and
authorisations which could not reasonably be expected to have a Material Adverse Effect. 
  

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	5.14	Material Contracts and Arrangements 

  
 Except as set forth in Section 5.14 of the PT Group Disclosure Schedule, as of the date hereof: 
  

	(a)	none of the PT Covered Assets is a party to or bound by any written (a) employment agreement; (b) indenture, mortgage, note, financing, loan, instalment obligation, agreement or
other instrument relating to the borrowing of money by it, or the guarantee by it of any obligation for the borrowing of money; or (c) other agreement, including without limitation, purchase orders, or any enforceable oral agreement, which
individually involves the receipt or payment after the date hereof of more than R$ 1,000,000 (one million Brazilian Reais) or the equivalent in other currencies on an annual basis or R$ 1,000,000 (one million Brazilian Reais) or the equivalent in
other currencies over the remaining term thereof. All such agreements are valid, binding and enforceable in accordance with their terms and neither the relevant Wireless Property nor, to the Knowledge of Wireless Property, any other party thereto is
in default under any of the aforesaid agreements, other than such defaults, if any, which could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect 

  

	(b)	There are no existing contracts material to the business of any of the PT Covered Assets to which any member or Affiliate of the PT Group is a party; and 

 

	(c)	No PT Covered Assets is party to any contract material to the business of the PT Covered Asset, with any of its current or former employees, directors, officers or consultants or
any Person connected (as defined by applicable law in the relevant jurisdiction) with any of such Persons, or in which any such Person is interested (whether directly or indirectly), other than on normal commercial terms in the ordinary course of
business; 

  

	(d)	all material contracts and agreements have all necessary corporate authorisation for their execution, delivery and performance by PT Covered Assets, in accordance with their by-laws
and applicable legislation; and 

  

	(e)	all material contracts and agreements entered into by the PT Covered Assets with their Affiliates and any entity of the PT Group represent arm’s length transactions, being such
term interpreted as a transaction in good faith negotiated on fair market value basis by unrelated parties acting with independent interests in the ordinary course of business. 

  

	5.15	Labour Matters 

  
 Except as set forth in Section 5.15 of the PT Group Disclosure Schedule, none of the PT Covered Assets is and, on the date of the Initial Closing and on
the date Interests in such PT Covered Assets are transferred to the Company at any Additional Closing, will be a party to any collective bargaining agreement with any labour union, confederation or association, stock option plans, profit sharing,
pension, deferred compensation, bonus, severance, health, welfare, life insurance and other fringe benefit and there are no discussions, negotiations, demands or proposals that are pending or have been conducted or made with or by any labour union,
confederation or association and there are not pending against any of the PT Covered Assets any general labour disputes, strikes or work stoppages. 
  

	5.16	Taxes 

  

	(a)	 Except as set forth in Section 5.16 of the PT Group Disclosure Schedule, each of the PT Covered Assets has and, on the date of the Initial Closing and on the date
such PT Covered Assets are transferred to the Company at any Additional Closing, shall have (a) timely filed or caused to be filed on a timely basis with the appropriate taxing authorities 

  

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all material Tax Returns required to be filed by or with respect to each of the PT Covered Assets, and (b) paid or made adequate provision for the payment of
all Taxes shown to be due on such Tax Returns except such Taxes, if any, being contested in good faith and as to which adequate reserves have been provided. Such Tax Returns are and will be true, correct and complete in all material respects;

  

	(b)	Except as set forth in Section 5.16 of the PT Group Disclosure Schedule: 

  

	 	(i)	there are and, on the date of the Initial Closing and on the date Interests in such PT Covered Assets are transferred to the Company at any Additional Closing, there shall be no
Liens for Taxes with respect to the assets of the Company and no material claims with respect to Taxes are being asserted by any taxing authority in writing, which individually would have a Material Adverse Effect on the business or other assets of
each of the PT Covered Assets except for statutory Liens for current taxes not yet delinquent; 

  

	 	(ii)	none of the Tax Returns of each of the PT Covered Assets is currently being and, on the date of the Initial Closing and on the date Interests in such PT Covered Assets are
transferred to the Company at any Additional Closing, shall be audited or examined by any taxing authority; 

  

	 	(iii)	there is and on the date of the Initial Closing and on the date Interests in such PT Covered Assets are transferred to the Company at any Additional Closing, there shall be no
material unpaid tax deficiency, determination or assessment currently outstanding against any of the PT Covered Assets; and 

  

	 	(iv)	there are, and on the date of the Initial Closing and on the date Interests in such PT Covered Assets are transferred to the Company at any Additional Closing, there shall be no
outstanding agreements or waivers extending the statute of limitations relating to the payment of Taxes of any of the PT Covered Assets for taxable periods for which the periods of the applicable statutes of limitations have not expired.

  

	5.17	Certain Fees 

  
 Except for the engagement of JP Morgan Securities Inc., none of the members of the PT Group or any of their respective Affiliates has employed any
financial advisor or finder or incurred any liability for any financial advisory or finders’ fees in connection with this Agreement or the transactions contemplated hereby. 
  

	5.18	Representations and Warranties for Subsidiaries 

  
 All the representations and warranties made by the PT Group with respect to the PT Covered Assets shall also be deemed to have been made with respect to
the Subsidiaries of each of the PT Covered Assets, if any. 
  

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 SECTION 6: COVENANTS 
  

	6.1	Conduct of Business 

  
 Each of the TEF Group and the PT Group agrees that, (i) in respect of TEF Covered Assets and PT Covered Assets, respectively, during the period from the
date of this Agreement to the Balance Closing, and (ii) in respect of a New Acquisition, from the date on which the TEF Group or the PT Group (as the case may be) acquires, directly or indirectly (other than through the Company) an Interest in the
New Acquisition, to the date of transfer to the Company of the entire such Interest, except as otherwise contemplated by this Agreement or consented to by the other Group in writing: 
  

	 	(a)	Each of the TEF Group and the PT Group shall use its best efforts to cause its Covered Assets, or New Acquisition (as the case may be), to conduct its business operations in the
ordinary course consistent with past practice; 

  

	 	(b)	Unless previously and expressly agreed in writing by the Parties in each specific event, each of TEF Group and the PT Group shall cause its Covered Assets or New Acquisition or
subsidiary thereof (as the case may be), not to: 

  

	 	(i)	sell, dispose of or acquire any material properties, assets or rights (including, without limitation, leaseholds), except in the ordinary course of business, or to merge,
consolidate or amalgamate any of the Covered Assets or New Acquisitions or their subsidiaries, either between them, or with any other Person; 

  

	 	(ii)	make any loans, advances (other than advances in the ordinary course of business) or capital contributions to, or investments in, any other Person; 

  

	 	(iii)	terminate or materially amend any of its material contracts, leases or licenses, except in the ordinary course of business; 

  

	 	(iv)	enter into any new material agreement other than customer contracts or renewals of existing agreements in the ordinary course of business; 

  

	 	(v)	enter into any employment agreement with any person or increase in any manner the compensation of any of the officers or other employees of its Covered Assets or New Acquisition or
subsidiary thereof (as the case may be), except for such increases as are granted in the ordinary course of business in accordance with its customary practices (which shall include normal periodic performance reviews and related compensation and
benefit increases); 

  

	 	(vi)	adopt, grant, extend or increase the rate or terms of any bonus, insurance, pension or other employee benefit plan, payment or arrangement made to, for or with any officers or
employees of its Covered Assets or New Acquisition or subsidiary thereof (as the case may be), except increases required by any applicable law, rule or regulation (which shall include normal periodic performance reviews and related compensation and
benefit insurance); 

  

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	 	(vii)	decrease its capital stock or declare, set aside or pay any dividend or other distribution (whether in cash, assets, stock or a combination thereof) in respect of any of its capital
stock or profit reserves (other than dividend payments made due to the applicable requirements according to the applicable Brazilian laws and by-laws of those of its Covered Assets or New Acquisition or subsidiary thereof (as the case may be), which
have as minority shareholders or preferred shareholders Persons which are not part of either Group, provided that 50% (fifty percent) of the difference between the aggregate amount of any such dividend payments which are received by members
of the PT Group in Euros and the aggregate amount of any such dividend payments which are received by members of the TEF Group in Euros, shall be paid to the other Group at the Balance Closing by the Group having received the highest of such
aggregate amount of dividends); 

  

	 	(viii)	pledge or otherwise encumber any of the Interests held in any of their subsidiaries; 

  

	 	(ix)	make any change in any of its present accounting methods and practices, except as required by changes in generally accepted accounting principles; or 

  

	 	(x)	make any commitment or engage in any negotiations to take any actions referred to in Sections 6.1(b)(i) through (ix) above. 

  

	 	(c)	Unless previously and expressly agreed in writing by the Parties in each specific event, each of the TEF Group and the PT Group shall not sell or otherwise dispose of or pledge or
otherwise encumber, any of the Interests held in any of their Covered Assets or New Acquisitions, or make any commitment or engage in any negotiations to do any of the foregoing. 

  

	6.2	Access to Information 

  
 Subject to the full compliance with the confidentiality obligations of Section 13 below, (i) in respect of the TEF Covered Assets and PT Covered Assets,
respectively, between the date of this Agreement and the Balance Closing, and (ii) in respect of a New Acquisition, between the date on which the TEF Group or the PT Group (as the case may be) acquires, directly or indirectly (other than through the
Company) an Interest in the New Acquisition, and the date of transfer to the Company of the entire such Interest, upon written request by one Group delivered to the other Group, each of the TEF Group or the PT Group shall, or shall cause the
relevant TEF Covered Assets and PT Covered Assets, or New Acquisition (as the case may be), to: 
  

	(a)	give the requesting Group (the “Requesting Group”) and its authorised representatives reasonable access to all books, records, offices and other facilities
and properties of the TEF Covered Assets and PT Covered Assets, or the New Acquisition (as the case may be); 

  

	(b)	permit the Requesting Group to make such inspections thereof as the Requesting Group may reasonably request; and 

  

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	(c)	furnish the Requesting Group with such financial and operating data and other information with respect to the business and properties of the Wireless Properties or the New
Acquisition (as the case may be), as the Requesting Group may from time to time reasonably request. 

  

	6.3	Consents 

  

	(a)	Each of the TEF Group and the PT Group and the Company shall, co-operate and use all commercially reasonable efforts to make all filings and obtain all licenses, permits, consents,
approvals, authorisations, qualifications and orders of Governmental Authorities and other third parties necessary to consummate the transactions contemplated by this Agreement, including, without limitation, (i) the obtaining of any such necessary
consent from any lender or Governmental Authority, including without limitation the European Commission on antitrust matters, and (ii) the filing by the Company of the transaction with CADE and the ANATEL (provided that no Party shall have
any liability whatsoever hereunder arising from the failure of ANATEL or CADE to approve the transactions contemplated herein, except to the extent that such failure is attributable to the failure by such Party to submit to ANATEL or to CADE, in
timely fashion, the information necessary and required pursuant to current Brazilian telecommunications and antitrust laws and regulations). 

  

	(b)	All fees and expenses incurred in connection with obtaining such approvals shall be shared equally between the Groups, except that each of the Groups shall be solely responsible for
any claims, costs, fines, fees or similar expenses which arise as a direct result of and are solely attributable to any action or omission on the part of such Group. 

  

	(c)	With respect to any required consent or approval not obtained prior to the relevant Closing, the Groups shall, and shall cause the Company, the TEF Covered Assets and PT Covered
Assets or the New Acquisition (as the case may be), to use commercially reasonable efforts to obtain any such consent or approval after such Closing until such consent or approval has been obtained. 

  

	(d)	Each of the TEF Group and the PT Group expressly undertakes to obtain all relevant authorisations, approvals and waivers of any rights of Third Parties and minority shareholders of
TEF Covered Assets and PT Covered Assets, as the case may be, (including but not limited to rights of first refusal by virtue of the TEF Covered Assets and PT Covered Assets by-laws and shareholders agreements in force) which may be required to
consummate the transactions contemplated by this Agreement prior to the relevant Closing. 

  

	6.4	Best Efforts to Consummate Transactions 

  
 Each of the TEF Group and the PT Group shall co-operate and use all commercially reasonable efforts to take, or cause to be taken, all actions and to do,
or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to 

  

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consummate the transactions contemplated by this Agreement and the Shareholders Agreement. 
  

	6.5	Public Announcements 

  
 From the date hereof, except as otherwise mutually agreed in writing by the Parties, no Party shall issue any report, statement or press release or
otherwise make any public statements with respect to this Agreement or the Shareholders 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 Parties. 
  

	6.6	Acquisitions 

  
 With regard to an acquisition of an Interest in a New Acquisition made by a Group pursuant to Section 1.6.2 above: 
  

	(a)	such Group shall: 

  

	 	(i)	use reasonable efforts to procure that any representations and warranties which it receives in respect of the Interests acquired in such New Acquisition are no less favourable than
substantially similar representations and warranties, subject to reasonable disclosure, as contained in Section 4 or 5 (as the case may be); and 

  

	 	(ii)	procure that any rights under such representations and warranties are assigned to the Company if allowed by the applicable laws and regulations and, if not possible, that all
benefits under any claims and rights to make claims pursuant to such representations and warranties, are transferred to the Company; and 

  

	(b)	substantially similar representations and warranties, to those contained in Section 4 or 5 (as the case may be), supplemented by a disclosure schedule reasonably acceptable to the
other Group, shall be made and given at the Additional Closing at which an Interest in the New Acquisition is transferred by the acquiring Group to the Company relating to the period from the date of acquisition by such Group of the Interest in said
New Acquisition to the date of such Additional Closing. 

  

	6.7	Financing 

  
 Each of the TEF Group and PT Group further agree that: 
  

	(a)	it 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 Shareholders Agreement;

  

	(b)	 No early repayment obligations or any other adverse consequences in respect of any inter-company Financing (to any of its Covered Assets or vice versa, or of any of
its Covered Assets to another of its Covered Asset), whether or not the creditor’s rights 

  

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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 Shareholders 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 Shareholders 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. 

  

	6.8	Global Telecom contract; representations and warranties 

  

	(a)	Portugal Telecom shall, and shall procure that Telesp Celular Participações, S.A. shall, fully comply with the contract “Promessa Irrevogável de Compra e
Venda de Ações”, dated 13 January 2001 and more particularly undertakes that either Telesp Celular Participações, S.A. or itself acquires all the shares in Global Telecom in order to become the owner of the Global
Telecom Interest. 

  

	(b)	Portugal Telecom shall, and shall procure that Telesp Celular Participações, S.A. shall, during the period from the date of this Agreement to the Balance Closing, duly
and fully exercise the rights which any member of the PT Group may have in respect of representations, warranties and indemnities received in respect of all Interests acquired by the PT Group in Global Telecom under the GT Acquisition Agreement.

  

	6.9	Transactions related to financing and derivative operations of the Covered Assets 

  

	(a)	Both Groups agree that all the transactions related to financing and derivative operations of their Covered Assets (including but not limited to unwinding, transfers, local
financing) performed after March 31, 2002 until the Balance Closing and not included in the information provided during the due diligence process performed as of such date, will be disclosed to the other Group as soon as practicable after the date
hereof (or after the execution of such transaction) and will be audited quarterly by the auditors of such other Group’s auditor in Brazil. 

  

	(b)	The audit report regarding such transactions shall be submitted to two independent banks nominated mutatis mutandis in accordance with Section 1.4(b) of the Subscription
Agreement. If such independent banks conclude that: (i) one of the Groups or any of its Covered Assets performed such transactions not on an arms-length basis; or (ii) one of the Groups has extracted value from its Covered Assets; or (iii) one of
the Groups or any of its Covered Assets left unhedged foreign currency debt during any period; they shall determine the loss in the relevant Covered Asset(s) arising as a consequence of such transactions and the amount which the relevant Group shall
pay as compensation to the other Group in cash immediately after such amount is determined. 

  

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 SECTION 7: TERMINATION OF AGREEMENT 
  

	7.1	Termination 

  
 This Agreement may be terminated: 
  

	(a)	upon termination of the Shareholders Agreement for any reason other than the events set forth in Section 7.1(b), (c) and (d) below; 

  

	(b)	by the TEF Group or the PT Group, if any court or other Governmental Authority shall have issued an order, decree, judgement or ruling or taken any other action which enjoins,
restrains or otherwise prohibits the consummation of the Balance Closing on or before December 31, 2005, provided that, in such event, the provisions of Section 7.2 shall apply; 

  

	(c)	by the TEF Group, if the PT Group fails to comply with the provisions of this Agreement, or fails to make any Contribution hereunder, or otherwise takes any action or fails to take
any action, and the result of the foregoing is that: 

  

	 	(i)	the Balance Closing is not consummated by December 31, 2005, and the PT Group fails to remedy such breach within 30 (thirty) days of receipt of a notice from the TEF Group calling
upon the PT Group to remedy such breach; or 

  

	 	(ii)	the consummation of the Initial Closing or Balance Closing (as the case may be), would be impossible (if the breach were to persist) and the PT Group fails to remedy such breach
within 30 (thirty) days of receipt of a notice from the TEF Group calling upon the PT Group to remedy such breach, 

  
 in each of which events the provisions of Section 7.3 shall apply; or 
  

	(d)	by the PT Group, if the TEF Group fails to comply with the provisions of this Agreement, or fails to make any Contribution hereunder, or otherwise takes any action or fails to take
any action, and the result of the foregoing is that: 

  

	 	(i)	the Balance Closing is not consummated by December 31, 2005, and the TEF Group fails to remedy such breach within 30 (thirty) days of receipt of a notice from the PT Group calling
upon the TEF Group to remedy such breach; or 

  

	 	(ii)	the consummation of the Initial Closing or Balance Closing (as the case may be), would be impossible (if the breach were to persist) and the TEF Group fails to remedy such breach
within 30 (thirty) days of receipt of a notice from the PT Group calling upon the TEF Group to remedy such breach, 

  
 in each of which events the provisions of Section 7.3 shall apply. 
  

	7.2	Effects of Termination due to the Events set forth in Sections 7.1(b) 

  
 In the case of occurrence of an event set forth in Section 7.1(b) hereto: 
  

	(a)	the Parties shall procure that the Company shall be immediately liquidated pursuant to the provisions of Section 4.3 of the Shareholders Agreement if the Interest in any Wireless
Property or New Acquisition has been totally or partially transferred to the Company; and 

  

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	(b)	if the Interests held by any of the Groups in the Wireless Properties referred to in Exhibit IV hereto, have not been fully transferred to the Company, each of the Groups shall have
the right to gradually buy from the other Group or from the Company, and the obligation to sell and transfer within the 6 (six) months following receipt of notice from the other Group making the request to buy, the maximum percentage allowed by
regulatory authorities from time to time, up to 25% (twenty-five percent) of the respective voting ownership of the PT Group and the TEF Group in Selected Wireless Properties based on an Independent Valuation, as well as to appoint the corresponding
representatives in each board of directors, as long as such appointment does not violate regulatory provisions, 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 15 (fifteen) Business Days after all such requirements have been fulfilled and/or such approvals have been received. This transaction shall be carried out in the most efficient manner for tax purposes. The notice referred above shall
be sent within 2 (two) months from the earlier event determining the possibility of exercising the cross-selling right. Termination of this Agreement pursuant to this Section 7.2 shall not affect the right to exercise the Call Right provided for in
Section 1.6.1 hereof, which may be exercised by the TEF Group during the 2 (two) month period set forth in this Section 7.2(b). 

  

	7.3	Effects of Termination due to Breach of Sections 7.1(c) or (d) 

  

	(a)	In the case of occurrence of an event set forth in Section 7.1(c) or (d) above, (i) the Parties shall procure that the Company shall be immediately liquidated pursuant to the
provisions of Section 4.3 of the Shareholders Agreement if any Interest in any Wireless Property or New Acquisition has been totally or partially transferred to the Company, and (ii) if the Interests held by any of the Groups in the Wireless
Properties referred to in Exhibit IV hereto, have not been fully transferred to the Company, the non-defaulting Group under the relevant section (the “Non-Defaulting Group”) shall have the right to acquire from the defaulting
Group under such section (the “Defaulting Group”) an interest equal to 35% (thirty-five percent) of the voting ownership in the Selected Wireless Properties of such Defaulting Group (the “Penalty
Shares”) at a price equal to (A) the value of such interest in the Wireless Properties as determined by an Independent Valuation to be conducted pursuant to Sections 1.4 and 1.5 above, minus (B) a 20% (twenty percent) discount on such
value. 

  

	(b)	 The exercise of the call right on the Selected Wireless Properties created under this Section 7.3 shall be made upon notice sent by the Non-Defaulting Group to the
Defaulting Group indicating the breach or the action that triggered the termination of this Agreement as set forth in Section 7.1(c) and (d) (such breach or action referred as a “Triggering Event”). Upon receipt of such
notice, the Defaulting Group shall, or cause its Affiliates to, take all actions as may be required by law or this Agreement to sell and transfer to the Non-Defaulting Group the Penalty Shares no later than 15 (fifteen) days following the date the
value resulting from the Independent Valuation is received, 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 

  

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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 15 (fifteen) Business Days after all such requirements have been fulfilled and/or such approvals have been received. 

  

	(c)	The call right created hereunder may be exercised within 6 (six) months after (x) the Non-Defaulting Group becomes aware of the Triggering Event, or (y), if the existence of the
Triggering Event is disputed, the date on which the arbitration process set forth in Section 10 below determines the existence of such Triggering Event. In any case, if the Non-Defaulting Group is the TEF Group it shall remain entitled to the Call
Right provided for in Section 1.6.1 hereof during the same period stated in this Section 7.3(c). 

  

	(d)	Except with respect to the Liquidation of the Company, which, in such case, will not occur, the provisions of this Section 7.3 shall also apply if a Change of Control occurs before
the Balance Closing, and the Group not suffering the Change of Control does not reach an agreement with the new controlling operator on the management and strategic plan for the Company, in addition to the provisions of Section 5.6 of the
Shareholders Agreement. 

  

	(e)	The call right on Selected Wireless Properties provided for herein may be exercised by the Non-Defaulting Group, fully or partially, gradually as permitted by applicable
regulations. The Non-Defaulting Group may also exercise the call right directly or indirectly, or transfer such right to a non-telecom operator third party to partially or totally exercise the call right. The identity of the non-telecom operator
third party must be approved by the Defaulting Group, which approval shall not be unreasonably withheld. 

  
 SECTION 8: INDEMNIFICATION; SURVIVAL OF REPRESENTATIONS; LIMITATIONS; PROCEDURE 
  

	8.1	Agreement to Indemnify 

  

	(a)	Each Group (the “Indemnitor”) shall be liable to and shall indemnify and hold harmless the other Group (the “Indemnitee”) from and
against all Damages suffered by the Indemnitee as a result of, or in relation to: 

  

	 	(i)	any representation or warranty, given by it to the other Group in terms of this Agreement, being, individually or jointly, untrue or misleading; or 

  

	 	(ii)	a breach of any covenant, obligation or undertaking in this Agreement by any Party in the Indemnitor’s Group, 

  
 (a “Breach”), provided that, the Parties
agree that: 
  

	 	(x)	Damages suffered by (A) any of the Covered Assets (B) the Company, and (C) directors, officers, employees, Affiliates, controlling persons, agents, representatives, successors and
subsidiaries of the Indemnitee, shall, for the purposes of this Section, be deemed to be suffered by the Indemnitee; and 

  

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	 	(y)	all indemnifications for Damages suffered by an Indemnitee, shall, at the option of the Indemnitee, be paid: 

  

	 	(A)	to such Indemnitee in proportion to the percentage Interest held in the Company by the Indemnitee; or 

  

	 	(B)	to the Company or relevant Covered Asset (provided that it does not cause Tax disadvantages to the Company or such Covered Asset), but then without regard to the percentage Interest
held in the Company by the Indemnitee. 

  

	(b)	Liability for a Breach shall exist irrespective if, at the time of the Breach, a Group knew, or should, or could have known that such a Breach existed or could arise, whether or not
such Knowledge was obtained from the due diligence review initiated by it or otherwise. 

  

	(c)	In the event that, in the period between the date of execution of this Agreement and the Balance Closing, an Indemnitee becomes aware of a Breach in relation to a Covered Asset, the
liability of an Indemnitor to pay Damages shall be calculated as if all the Interests in the corresponding Covered Asset had been transferred to the Company, provided that such Damages shall be due and payable to the Indemnitees (i) at the
Initial Closing, in respect of Damages suffered prior to the Initial Closing, in proportion to the Interests held by the Company in such Covered Asset upon the Initial Closing, (ii) at the Balance Closing, in respect of Damages suffered prior to the
Balance Closing, in proportion to the Interests transferred to the Company in such Covered Asset at the Balance Closing and (iii) if applicable, in respect of Damages suffered prior to the Additional Closing, at the relevant Additional Closing in
proportion to the Interests transferred to the Company in such Covered Asset at such Additional Closing. 

  

	(d)	Damages shall be payable in Euro and shall be increased with the 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, calculated from the date on which the Damages have arisen until the date of payment of such Damages. 

  

	(e)	For the avoidance of doubt, Damages caused by facts or circumstances having occurred prior to the date of this Agreement, shall be subject to indemnification under this Section 8,
even if they arise or become known by the Indemnitee after the date of this Agreement. 

  

	(f)	Damages caused by facts or circumstances having commenced prior to the date of this Agreement and continuing thereafter, shall only be subject to indemnification under this Section
8 for that portion of the Damages caused before the date of this Agreement. 

  

	(g)	For the avoidance of doubt, a Breach by a Party shall be deemed to be a Breach by the Group to which such Party belongs. 

  

	(h)	For the avoidance of doubt, Damages suffered by a Party shall be deemed to be Damages suffered by the Group to which such Party belongs. 

  

	8.2	Survival of Representations, Warranties and Covenants 

  

	(a)	The right to claim Damages for a Breach shall survive until the earlier of: 

  

	 	(i)	expiry of a period of 25 (twenty-five) years from date hereof; 

  

	 	(ii)	expiry of the maximum period under the applicable statute of limitations; and 

  

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	 	(iii)	the termination, or the assignment of this Agreement in accordance with Section 5.4(i) of the Shareholders Agreement, provided that: 

  

	 	(X)	if this Agreement terminates or is assigned (in which event the provisions set forth in Section 11.1(iii) of the Shareholders Agreement shall apply) prior to the Balance Closing
having occurred or within 2 (two) years from the Balance Closing, then the right to make any such claim: 

  

	 	(x)	which is based upon a third party claim, shall survive for the maximum period under the applicable statute of limitations; and 

  

	 	(y)	which is not based upon a third party claim, shall survive for 2 (two) years after termination, or assignment, of this Agreement; and 

  

	 	(Y)	if this Agreement terminates or is assigned (in which event the provisions set forth in Section 11.1(iii) of the Shareholders Agreement shall apply), after expiry of a period of 2
(two) years after the Balance Closing, then the right to make any such claim shall only survive if the claim is based on a third party claim and then for the maximum period under the applicable statute of limitations. 

  

	(b)	The right to claim indemnification for damages for a breach of a representation or a warranty or of a covenant received from a third party and transferred by the acquiring Group to
the Company regarding a New Acquisition (in accordance with Section 6.7 above) shall survive for the period agreed with such third party. 

  

	(c)	The right to claim indemnification for Damages regarding a New Acquisition (in accordance with Section 6.6 above) will survive as set forth in Section 8.2(a), provided that
the reference to the Balance Closing shall be understood to be made to the Additional Closing at which the relevant New Acquisition is fully contributed to the Company. 

  

	(d)	The expiry of the survival periods set forth in this Section 8.2 shall be without prejudice to any accrued rights, claims and liabilities of the Parties in existence at the time of
such expiry. 

  

	8.3	Limitation to the Obligation to Indemnify 

  
 Neither Group shall be liable to the other Group in respect of any individual claim for Damages relating to the same Breach, where the liability, agreed
or determined, in respect of such claim is equal to or less than the equivalent of Euro 1,000,000 (one million Euro). A Group shall be liable to the other Group in respect of each claim for which the liability, agreed or determined, is equal to or
less than the equivalent of Euro 1,000,000 (one million Euro) if the aggregate liability for all such claims exceeds the amount of Euro 10,000,000 (ten million Euro), provided that: 
  

	 	(a)	Damages relating to Taxes are not subject to any of the limitations set out in this Section 8.3; 

  

	 	(b)	in the case of Damages based on a Breach relating to a Covered Asset or a New Acquisition, no regard shall be had to the fact that the other Group holds a direct or indirect
interest in such Covered Asset or New Acquisition; and 

  

	 	(c)	the net amount (after deducting any related taxes, costs and expenses) received by the Company and any of the Covered Assets from a third party (or insurers, including insurance
companies) as a result of the same matter giving rise to the Damages, shall be taken into account in calculating the liability of the Indemnitor hereunder. 

  

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	8.4	Indemnification Procedure 

  

	(a)	When any Indemnitee is entitled to indemnification under the provisions of this Section 8, it shall notify the Indemnitor promptly in writing of any Breach as to which the
Indemnitee may request indemnification hereunder; provided that any failure by an Indemnitee to notify the Indemnitor shall not relieve the Indemnitor from its indemnification obligations hereunder and shall not relieve the Indemnitor from
any other obligation that the Indemnitor may have hereunder or otherwise, except to the extent that the Indemnitor is materially prejudiced by such failure.  

  

	(b)	When applicable, immediately upon the receipt of the notice of a Breach, the Indemnitor shall assume the defence or the responsibility for the settlement of any action or proceeding
by a third party involving a Covered Asset or a New Acquisition that is the subject of a claim for indemnification hereunder. The involved Covered Asset or a New Acquisition shall be entitled (but not obliged) to participate in any negotiations or
proceedings to settle or otherwise eliminate any claim. The Indemnified Party and the Company shall be kept fully informed at all times of the defence and the development of the claim. If the Indemnitor fails to effectively assume the defence,
settlement or negotiation and to appoint counsel to take charge of any such defence, settlement or negotiation of any action or proceeding, the Indemnitee may, on behalf of the involved Covered Asset or a New Acquisition, engage counsel to defend,
settle or otherwise dispose of such action or proceeding; provided that the Indemnified Party shall not settle or compromise any such action, proceeding or claim without the consent of the Indemnitor (which consent shall not be unreasonably
withheld or delayed). All costs and fees due in connection with the defence, settlement or negotiation of any action or proceeding as set forth in this Section 8.4(b) shall be borne by the Indemnitor. 

  

	(c)	If indemnification for a Breach in relation to a claim by a third party is requested, the Indemnitor, its agents and representatives shall have access to the premises, books and
records of the Indemnitee, its Affiliates and the Covered Assets or New Acquisitions (as the case may be), to the extent reasonably necessary to assist the Indemnitor in defending or settling any action, proceeding or claim; provided that
said access shall be utilised in such manner as not to interfere unreasonably with the operation or the business of the Indemnitee, its Affiliates and the Covered Assets or New Acquisitions (as the case may be). Except as reasonably necessary to
assist the Indemnitor in defending or settling such action, proceeding or claim, the Indemnified Party shall not be required to disclose any information with respect to itself or any of its Affiliates, and the Indemnified Party shall not be required
to participate in the defence of any claim to be indemnified hereunder (except as otherwise set forth herein), unless otherwise lawfully required or reasonably necessary in the defence of any third party claim to be indemnified hereunder.

  
 SECTION 9: BONA FIDE AND PENALTY 
  

	9.1	Bona fide 

  
 The Parties acknowledge that bona fide compliance with this Agreement requires, in addition to the fulfillment of the specific undertakings and
obligations expressly provided 

  

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for herein, that all the Parties act in good faith and diligently in executing other actions and decisions, and refrain 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. 
  

	9.2	Penalty and Delay Interest 

  

	(a)	The PT Group and the TEF Group agree with each other that the substantial breach of any material obligation of a Group expressly provided for herein which does not have a specific
remedy (other than damages and/or specific performance) pursuant to this Agreement, shall place the defaulting Group under the obligation to pay the other Group a penalty of [***] in addition to a full indemnification to the non-defaulting Group for
the damage and the loss of profit suffered as a consequence of such default by the other Group.  

  

	(b)	In case of default of a payment obligation, the Group in breach of its obligations shall pay the non-defaulting Group 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 Euros, increased by 2 (two) percentage points. The delay interest shall be accrued on a daily basis
and shall be paid on the last business day of each calendar month, and if not paid, the accrued interest shall be added to, and capitalized to become part of the amount then due but unpaid, and shall accrue additional delay interest thereinafter.

  
 SECTION 10: APPLICABLE LAW AND SETTLEMENT OF DISPUTES

  

	10.1	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. 
  

	10.2	Arbitration 

  

	(a)	If any dispute arises in relation to 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 to 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
shall 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 

  

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Commerce. The International Chamber of Commerce shall 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 submit irrevocably to the decision of the arbitration tribunal, giving their consent to comply with such decision and waive any other jurisdiction that 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 expedient 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 arbitration initiated under this Section may include monetary damages as well as specific performance of the obligations set forth herein. 

  

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

  
 SECTION 11: NOTICES

  

	11.1	All notices, requests, permissions, consents, waivers, and other communications hereunder shall be in writing and shall be deemed to have been duly given if signed by the respective
persons giving them and delivered by hand, or deposited in the mail (registered, return receipt requested), properly addressed and postage prepaid, as follows: 

  
 If to TEM: 
  
 Attn: Mr Antonio Hornedo Muguiro 
 General
Counsel 
 Goya 24 
  

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 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: Av. Fontes Pereira de Melo, 40, 11o andar 
 Lisbon, Portugal 
 Tel: 
 Fax: 
 E-mail: 
  
 If to PT
Móveis: 
  
 Attn: 
 Av. 5 de Outubro, 208, 4o andar 
 Lisbon, Portugal 
 Tel: 
 Fax: 
 E-mail: 
  
 If to the Company:

  
 Attn: General Manager 
 Strawinskylaan 3105 
 1077 ZX Amsterdam

 The Netherlands 
  

	11.2	Such names and addresses may be changed by written notice delivered by each such Persons. 

  
 SECTION 12: ASSIGNMENT; ENTIRE AGREEMENT; JOINT AND SEVERAL 
  

	12.1	Assignment 

  
 Except with the express written consent of all the Parties hereto or as expressly provided under the Shareholders Agreement, this Agreement shall not be
assignable or otherwise transferred in whole or in part. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended
to confer upon any other Person any rights or remedies under or by reason of this Agreement. 
  

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	12.2	Entire Agreement 

  
 This Agreement (which includes the Exhibits and the Disclosure Schedules hereto), and the other documents and agreements delivered in connection with this
Agreement and the Shareholders Agreement contain the entire agreement among the Groups with respect to the transactions contemplated herein and therein and supersede all other prior arrangements made by any of them with respect thereto, including
the Joint Venture Agreement, except for the following provisions contemplated in the Joint Venture Agreement: (i) the provision named as “Other Considerations”, and (ii) 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 Shareholders Agreement, other than as expressly set forth in any of
the aforementioned documents. 
  

	12.3	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 they are members. Each member
of a Group shall be entitled to the rights under this Agreement of the Group of which it is a member. 
  

	12.4	Modification and Amendment; Indexation 

  

	(a)	Subject to Section 12.4(b) below, 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 1.5(b)(ii), 1.5(b)(iii), and 9.2(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.  

  
 SECTION 13: CONFIDENTIALITY 
  

	13.1	Confidential Information 

  
 Each Party acknowledges that, pursuant to this Agreement and the Shareholders Agreement, it may have access to certain information (including, without
limitation, financial information and the information contained in this Agreement and the Shareholders 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. 
  

	13.2	Use and Disclosure 

  
 Each Party (the “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 Shareholders Agreement, and in facilitating the 

  

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business objectives of the Company; (ii) to keep such information confidential and to disclose it only to officers, employees, consultants and professional
advisers and in the case of a Third Party Sale as referred to in Section 5.4 of the Shareholders Agreement, 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 Receiving Party’s 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 the case of a Third Party Sale as referred to in Section 5.4 of the Shareholders Agreement, has executed a confidentiality agreement on terms and conditions not less favourable than those set out in this Agreement in favour
of the Parties. 
  

	13.3	Duties of Receiving Party 

  

	(a)	The 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 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)	The 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. 

  

	13.4	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

  

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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 insofar as possible the recipient gives the Disclosing Party prior notice of such disclosure so that the
Disclosing Party may intervene in the proceedings to protect the confidential nature of the Confidential Information. 
  

	13.5	Survival of Certain Obligations 

  
 The provisions of Section 13 shall survive for an indefinite period of time and claims thereunder may be brought at any time irrespective of the
termination of this Agreement for any reason whatsoever. 
  
 SECTION 14:
SEVERABILITY 
  
 Whenever possible, each provision of this Agreement shall 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 shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or this Agreement. 
  
 SECTION 15: LANGUAGE 
  
 This Agreement
shall be executed in the English language. 
  
 SECTION 16: DEFINITIONS

  
 Unless a different meaning clearly appears from the context herein or
unless otherwise defined in this Agreement, the capitalised terms used throughout this Agreement shall have the meanings set forth in this Section 16. 
  
 “Acquisition Date” has the meaning set forth in Section 1.5(b)(i)(A) of this Agreement. 
  
 “Acquisition Price” means, in each case, the price effectively paid or
incurred for the acquisition of the relevant Interest in the relevant New Acquisition or the Further Interest in a Wireless Property (as the case may be), by the Group making such acquisition.  
  
 “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 Shareholders Agreement. 
  
 “Additional Closing” means the date on which any Additional Capital Contribution is transferred to the Company. 
  

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 “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. 
  
 “Agreement” means this Subscription Agreement and any and all Exhibits, Disclosure Schedules 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. 
  
 “Articles of Association” means the articles of association of the Company, as amended from time to time. 
  
 “Asset” or “Assets” mean all property, rights and other
assets held, leased or owned, beneficially or not, by any of the Wireless Properties or New Acquisitions (as the case may be), and used in the operation of their respective Wireless Businesses, including, without limitation, fixed assets, chattels,
office equipment, furniture, other office supplies, accounts receivables, credits, early payments, cash and other short and long-term assets, whether tangible or intangible. 
  
 “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 this 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 this Agreement, to
be transferred to the Company by the Groups in accordance with Section 3 of this Agreement, and “Balance Capital Contribution” means any one of them. 
  
 “Balance Closing” has the meaning set forth in Section 3.1.1(a) of this Agreement. 
  
 “Board of Directors” means the managing board (“raad van
bestuur”) of the Company from time to time. 
  
 “Brazil”
has the meaning set forth in the preamble of this Agreement. 
  
 “Breach” has the meaning set forth in Section 8.1 of this Agreement. 
  
 “Business Day” means a day other than a Saturday, Sunday or statutory holiday in Sao Paulo, Rio de Janeiro, Madrid, Lisbon or Amsterdam. 
  
 “CADE” means the Conselho Administrativo de Defesa Econômica.  
  
 “Call Right” has the meaning set forth in Section 1.6.1(a) 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 

  

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	(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 

  

	 	(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 the Shareholders 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 this Agreement. 
  
 “Confidential Information” has the meaning set forth in Section 13.1 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 this 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. 
  
 “Cost of Carrying” means: 
  

	(a)	 in respect of Section 3.1.2(i)(C) of this Agreement and Sections 6.2(b) and 6.3(a)(ii) of the Shareholders Agreement, the financial cost, determined at the
corresponding Additional Closing, when applicable, that the Company would have paid to raise 

  

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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 this Agreement, the financial cost, 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 the Shareholders 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. 

  
 “Covered Assets” means the PT Covered Assets and/or TEF Covered Assets (as the case may be).  
  
 “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. 
  
 “Defaulting Group” has the
meaning set forth in Section 7.3(a) of this Agreement.  
  
 “Directors” mean the persons who are from time to time, in accordance with the Shareholders Agreement, members of the Board of Directors and “Director” means any one of them. 
  
 “Disclosing Party” has the meaning as set forth in Section 13.1 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 this Agreement (as the case may be). 
  

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 “Financing” has the meaning set forth in Section 6.7(a) of this Agreement.  
  
 “Financing Party” has the meaning as set forth in Section 6.7(a) of this
Agreement.  
  
 “First Choice Investment Banks” and
“First Choice Investment Bank” have the meaning set forth in Section 1.4(a) of this Agreement. 
  
 “First Group List” has the meaning set forth in Section 1.4(b)(i) of this Agreement.  
  
 “Further Interest Acquisition Price” has the meaning as set forth in Section
1.6.4(b) of this 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 issuance of Company Shares
to such wholly owned subsidiaries, provided that such wholly owned subsidiaries execute this Agreement and the Shareholders Agreement and “Further Party” means any one of them. 
  
 “GAAP” has the meaning set forth in Section 1.6.2 of this Agreement.

  
 “General Share Premium Reserve” has the meaning set forth in
Section 1.1(c) 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 this 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. 
  
 “Groups” means the TEF Group and the PT Group and
“Group” means any one of them. 
  
 “GT Acquisition
Agreement” has the meaning set forth in Section 5(a)(ii) of this Agreement, a copy of which agreement is attached to this Agreement as Exhibit IX.  
  
 “IAS” has the meaning set forth in Section 1.6.2 of this Agreement. 
  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 “Indemnitee” has the meaning set forth in Section 8.1 of this Agreement. 
  
 “Indemnitor” has the meaning set forth in Section 8.1 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 Shareholders 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 this Agreement and by applying the Independent Valuation Principles and
such other guidelines and criteria set forth in Exhibits I and II to this Agreement. 
  
 “Independent Valuation Notice” has the meaning set forth in Section 1.4(b) of this 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 this Agreement, to be transferred to the Company by each of the Groups in accordance with Section 2 of this 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 this
Agreement. 
  
 “Initial Valuations” has the meaning set forth in
Section 1.5(b)(i)(A) of this Agreement. 
  
 “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 this 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. 
  
 “Knowledge” means, in respect of the relevant
Person and the relevant matter, the actual knowledge of such matter, or the actual knowledge of such matter that would have been obtained by, such Person or any of its executive officers, directors or individuals occupying 

  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 
corresponding positions, after due inquiry as would cause a reasonably prudent person to make due inquiry in respect of such matter and such reasonably
prudent person would, after such due inquiry, gain such knowledge about such matter.  
  
 “Lead Group” has the meaning set forth in Section 1.6.4(b) of this Agreement. 
  
 “Liens” has the meaning set forth in Section 4.4 or Section 5.4 of this Agreement (as the case may be). 
  
 “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 the Shareholders Agreement. 
  
 “Mandate Letters” has the meaning set forth in Section 1.4(c) of this Agreement and “Mandate Letter” means any one of them. 

 
 “Material Adverse Effect” means any adverse effect on the business,
financial condition, Assets, results of operations (other than actions arising from each Party’s mere participation in the transactions contemplated in this Agreement or the Shareholders Agreement, or actions taken in accordance with this
Agreement or the Shareholders Agreement) of each of the (a) TEF Group, (b) PT Group, (c) Company, or (d) TEF Group, PT Group and Company, taken as a whole, involving an amount or liability equal to or in excess of €1,000,000 million (one
million Euro). 
  
 “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-Defaulting Group” has the meaning set forth in Section 7.3(a) of this
Agreement. 
  
 “Other Group” has the meaning set forth in
Section 1.6.4(b) of this Agreement. 
  
 “Parties” means
TEM, Portugal Telecom, PT Móveis, the Company and the Further Parties, and “Party” means any one of them. 
  
 “Penalty Shares” has the meaning set forth in Section 7.3(a) of this Agreement. 
  
 “Permitted Transferee” means, in the case of a Group, any Affiliate of said Group. 
  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 “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. 
  
 “Price Range” has the meaning set forth in Section 1.6.2(a) of this Agreement.  
  
 “PT Covered Assets” means the companies set forth in Exhibit VII to this Agreement and any of their respective subsidiaries
from time to time.  
  
 “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 the Shareholders Agreement. 
  
 “PT Group Disclosure Schedule” means the disclosure schedules attached to
this Agreement as Exhibit VI.  
  
 “PT Group Financial
Statements” has the meaning set forth in Section 5.8 of this Agreement.  
  
 “PT Group Intellectual Property” has the meaning set forth in Section 5.11 of this Agreement.  
  
 “PT Group Put” has the meaning set forth in Section 6.4 of the Shareholders 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 IV 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 this Agreement.

  
 “Put” has the meaning set forth in Section 5.6 of the
Shareholders Agreement. 
  
 “Reais”, “Brazilian
Reais” and “R$” mean the lawful currency of Brazil from time to time.  
  
 “Receiving Party” has the meaning set forth in Section 13.2 of this Agreement. 
  
 “Reduced Shareholder” has the meaning set forth in Section 6.1 of the Shareholders Agreement. 
  
 “Requesting Group” has the meaning set forth in Section 6.2(a) of this
Agreement. 
  
 “SCLV” means the Servicio de
Compensación y Liquidación de Valores, S.A. 
  
 “Second Group List” has the meaning set forth in Section 1.4(b)(ii) of this Agreement. 
  
 “Selected Wireless Properties” means (a) with respect to the TEF Group, Tele Sudeste Celular Participações S.A. and its successors or
assignees of its business or any portion thereof, and (b) 

  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 
with respect to the PT Group, Telesp Celular Participações S.A. and its successors or assignees of its business or any portion thereof.

  
 “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 the Shareholders Agreement, and “Shareholder” means any of them. 
  
 “Shareholders Agreement” has the meaning set forth in the preamble of this
Agreement. 
  
 “Spain” has the meaning set forth in the preamble
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. 

 
 “Tax Returns” means any reports, returns or statements required to be
supplied to a taxing authority in connection with Taxes. 
  
 [***]

  
 “TCP Shares” has the meaning set forth in Section 1.8 of this
Agreement. 
  
 “TEF Covered Assets” means the companies
set forth in Exhibit VIII to this Agreement and any of their respective subsidiaries from time to time. 
  
 “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 the Shareholders Agreement.

  
 “TEF Group Disclosure Schedule” means the disclosure
schedules attached to this Agreement as Exhibit V. 
  
 “TEF Group
Financial Statements” has the meaning set forth in Section 4.8 of this Agreement. 
  
 “TEF Group Intellectual Property” has the meaning set forth in Section 4.11 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 this 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 this 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. 
  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 [***] 
  
 “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 this 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. 
  
 “Triggering Event” has the meaning in Section 7.3 of this Agreement. 
  
 “US Dollars”, or “USD” mean the lawful currency of the United States of America from time to time.

  
 “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. 
  

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filed with the U.S.
Securities and Exchange Commission and is marked “[***]” herein.
  
	 	 

  

 IN WITNESS WHEREOF, the Parties have duly executed this Agreement in 10 counterparts as of the date first above
written. 
  

			
	SIGNED by [                    ]	 	 
		
	SIGNED by [                    ]	 	 
		
	SIGNED by [                    ]	 	 
		
	on behalf of :	 	 
		
	TELEFÓNICA MÓVILES, S.A.	 	 

  

			
		
	SIGNED by [                    ]	 	 
		
	on behalf of :	 	 
		
	PORTUGAL TELECOM, SGPS, S.A.	 	 

  

			
		
	SIGNED by [                    ]	 	 
		
	on behalf of :	 	 
		
	PT MÓVEIS, SGPS, S.A.	 	 

  

			
		
	SIGNED by [                    ]	 	 
		
	on behalf of :	 	 
		
	BRASILCEL B.V.	 	 

  

 64

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