Document:

Exhibit
4.5

 

 

 

 

AGREEMENT
FOR PRICES OF

UNIVERSAL
TELECOMMUNICATIONS SERVICE

SIGNED
BETWEEN

THE
DEPARTMENT OF TRADE AND COMPETITION,

ICP
— THE NATIONAL COMMUNICATIONS AUTHORITY, AND

PT
COMUNICAÇÕES

 

(Four sets
of initials, on every page)

 

 

BETWEEN:

 

1.             The Department
of Trade and Competition , hereinafter “DGCC”,

 

2.             ICP —
The National Communications Authority, hereinafter “ANACOM”,

 

and

 

3.                                       PT Comunicações, S.A., hereinafter PT Comunicações, a company with head
office at Rua Andrade Corvo 6, Lisbon, with registered capital of EUR150,000,000,
registered in the Commercial Registration Office of Lisbon under number 09406,

 

 

The Agreement for Universal Telecommunications Services is
entered into under Article 11 of Decree Law 458/99 of November 5, being governed
by the following Articles:

 

 

 

 

CHAPTER
ONE

General
provisions

 

1.             Definitions

For the purposes of this Convention the following
definitions apply:

(a)             Subscriber
— an individual person or collective entity which a party to a contract signed
with PT Comunicações for the provision of fixed telephone service, also
referred to as client;

(b)            Residential
Client — an individual person to whom the Fixed Telephone Service is provided
in the subscriber mode for non-professional use;

(c)             Communication
— traffic effected from a line of the network of PT Comunicações and allocated
to PT Comunicações or to another telecommunications operator/service provider;

(d)            Telephone
communication — communication effected under the Fixed Telephone Service
provided by PT Comunicações, between terminals, corresponding to direct clients
of the latter;

(e)             Local
Telephone Communication — communication within a single local network, between
adjacent local networks or between local networks separated by a distance of up
to 10 km;

(f)               National
Telephone Communication — communication between local networks separated by a
distance of more than 50 km;

(g)            Telephone
Communication in Portugal — communication within a single local network or
between different local networks;

(h)            Regional
Telephone Communication — communication between local networks separated by
more than 10 km (but which are not adjacent) and less than 50 km;

(1)             Agreement
— this document, signed between the parties under Article 11 of Decree Law
458/99 of November 5;

(j)                Call Unit
— unit of measure used for applying tariff to the communications of public
telephones;

(k)             IPC — the
expected inflation for each year officially forecast by the government, and as
such, inscribed in the Stage Budget Report of each year or in a rectifying
Budget.  When such document is inscribed for
an

 

2

 

                           interval, the average of the maximum and minimum values of this
interval is used.  If there are technical
difficulties in obtaining this value, namely in interpretation, the
corresponding clarification is the responsibility of DGCC and ANACOM;

(l)                Parties —
ANACOM, DGCC and PT Comunicações;

(m)          Low
Consumption Plan (PBC) — optional price plan, alternative to the Tariff, for
residential clients with low telephone consumption;

(n)            Subscription
Price — the amount that the Client pays, periodically, for access through an
analogue network line, to the Fixed Telephone Service;

(o)            Communication
Price — the amount that the Client pays for each telephone communication,
comprising an initial price and a variable component relating to the duration;

(p)            Initial
Price — the amount to be paid by the client for each telephone communication
actually effected;  includes a determined
time of non-divisible conversation, according to the time-of-day bands and the
zones of communication, designated as credit time;

(q)            Installation
Price — the amount that the Client pays for being linked, through an analogue
network line, to the Fixed Telephone Service;

(r)               Second —
a unit of measurement of time of the international measures system used for the
calculation of the variable component of the telephone communication price
relating to its duration, time-of-day bands and communication zones;

(s)             Fixed
Telephone Service (SFT) — service of direct transport of voice, in real time,
at fixed locations, allowing any user to use the equipment linked to his or her
terminal to communicate with another terminal;

(s)             Tariff —
the group of prices applicable automatically to the provision of the Fixed
Telephone Service covered by this Agreement.

(t)               User — a subscriber
or any individual person or collective entity which uses the SFT;

 

3

 

CHAPTER II

Scope and objectives of the
agreement

 

2.             Scope of the agreement

2.1                                 This Agreement establishes the price regime applicable to the following
provisions of Universal Service (US) of telecommunications:

                                                a)             SFT in the
subscriber mode

-                    installation
of an analogue network line

-                    subscription
to an analogue network line

-                    Telephone
Communication in Portugal

b)            SFT in the Public Telephone mode

-                    telephone
communications in Portugal

c)             Telephone list books and informative service

 

2.2                                 The rules contained in the SFT Commercial Operation Regulations,
approved by Decree Law 474/99 of November 8, apply to the prices of other
services offered that are covered by universal service.

 

3.                                      Principles

3.1                                 The prices for provisions of universal service should take into account
the progressive adjustment of prices to costs, and should obey the principles
of transparency and non-discrimination, and ensure accessibility for users.

 

3.2                                 The requirements of progressive adjustment to costs and accessibility
in relation to the services and matters provided under Clause 2.1 are to be
objectively interpreted through the principles laid down in Articles 5, 6 and
7.

 

3.3                                 To ensure that the principles specified in Clause 3.1 are complied
with, PT Comunicações undertakes to:

a)                                      Maintain a system of analytical accounting which makes possible the
determination of the costs associated with the services and other matters
therein specified;

b)                                     To publish the prices currently in force and the respective conditions
of application.

 

4

 

CHAPTER III

Price setting regime

 

4.             Obligations of PT Comunicações

PT Comunicações undertakes to comply with the rules that
lead to the fixing of the prices specified in the following Articles, and is
not permitted to practice prices higher than those resulting from application
of these rules.

 

5.             Price Regime —
Subscriber Mode

5.1                                 The weighted average variation of the prices of the services comprised
in Fixed Telephone Service in subscriber mode cannot be greater than IPC—3 p.p.
and IPC—2.75 p.p., in nominal terms, for the years 2002 and 2003, respectively.

 

5.2                                 The variations in prices specified in the previous Articles are
determined based on the methods contained in the Appendix and such method may
be changed by agreement between the parties.

 

6.                                      Price Regime —
Public Telephone Mode

6.1                                 The ratio between the price of communication of the Fixed Telephone
Service in the public telephone mode and in the subscriber mode may not be
greater, on average and for each type of traffic, than two in 2002, with
maximum increases of 0.5 in each of the subsequent years in which this
Agreement is in force, up to the limit of three.

 

6.2                                 Without prejudice to the terms of Clause 6.1., whenever there are
technical limitations arising from the type of public telephone terminal
equipment, the price of communications may be fixed in call units.

 

6.3                                 PT Comunicações shall develop its system of public telephones in such a
way as to ensure acceptance of the various modes of payment.

 

7.                                      Price Regime —
Telephone Lists and Information Service

7.1                                 The publication and distribution of subscriber telephone lists shall be
free of charge.

 

7.2                                 The variation in the price of the information service may not be
greater than IPC+15 p.p., for each year in which the present Agreement is
in force.

 

5

 

8.                                      Application of
Prices

8.1                                 PT Comunicações must advise ANACOM and DGCC, with minimum of 15
(fifteen) days advance notice, the tariffs to be practiced, by application of
the rules indicated in Articles 5, 6 and 7.

 

8.2                                 The communication referred to in Clause 8.1 must be accompanied by
documents proving that the variations allowed under Article 5 are obeyed.

 

8.3                                 If by the end of the period referred to in Clause 8.1 ANACOM and DGCC
have not presented objections, which must be with grounds, the tariffs
automatically come into force on the date set for the purpose by PT Comunicações,
without prejudice to compliance with the obligations to disseminate and/or
publish applicable under the Law.

 

8.4                                 The counting of the period specified in Clause 8.1 is suspended on the
date of reception by PT Comunicações of any request for clarifications or
additional elements, which must be with grounds, by ANACOM or DGCC, and shall
be resumed only on the day following that of reception of the reply of PT Comunicações.

 

8.5                                 IVA (Value Added Tax) at the rate legally in force shall be added to
the prices resulting from the application of the rules specified in Articles 5,
6, and 7.

 

CHAPTER IV

Social obligations

 

9.                                      Retired and pensioner
clients

PT Comunicações is obliged, in relation to retired Clients
and pensioners, where their monthly aggregate family income is less than or
equal to the national minimum wage, to offer conditions for Fixed Telephone
Service not less than the following:

a)                                      A reduction of 50% on the subscription price, applied in the terms of
Decree Law 20-C/86 of February 13;

b)                                     An additional reduction of 10% on the subscription price and a credit
in Telephone Communications in Portugal in a joint amount not less than EUR3.53
(without IVA tax).

 

6

 

10.          Low-consumption
residential clients

PT Comunicações is obliged to make a plan of optional
prices available for residential clients with low telephone consumption ((PBC),
defined as follows, in relation to the tariff:

 

a)                                      discount
of 15% on the subscription;

b)                                     discount of 20% on the first 5 euros of consumptions in Telephone Communication
in Portugal;

c)                                      charge of 100% on the next 5 euros of consumption in Telephone
Communication in Portugal;

d)                                     normal price on consumption that exceeds 10 euros in Telephone
Communication in Portugal.

 

11.          Requirements and conditions

 

11.1                           The PBC specified in Clause 10 is optional and applicable upon option expressed
by the client.

 

11.2                           The conditions specified in Clauses 9 and 10 are attributable to clients
holding a single (analogue) network line.

 

11.3                           The conditions specified in Clause 9(b) are incompatible with the
selection and pre-selection of another provider of SFT. The conditions
specified in Clause 10 are incompatible with the selection and pre-selection of
another provider of SFT and with monthly communications consumption in excess
of 10 euros.

 

11.4                           The transition between the Economic Package and the PBC shall take
place over a period of three months after the PBC comes into force, during
which time the two price plans shall coexist.

 

11.5                           The benefits specified in Clause 9 (b) are attributable on a transitory
basis, and are subject to annual revision.

 

12.                               Clients with special
needs

 

PT Comunicações must make available free of charge, for the
use of clients with special needs, the equipment of microtelephone amplifier
and luminous call advisor.

 

7

 

CHAPTER
V

Sundry
provisions

 

13.          Period of validity

13.1                           This Agreement shall be in force up to the implementation of a new
national legislative structure applicable to the universal service arising from
Community Law.

 

13.2                           Without prejudice to the provisions of the previous Clause, this
Agreement shall be in effect up to, as the latest date, December 31, 2003.

 

13.3                           If the new legislative structure referred to in Sub-Clause 1 has not
been implemented by December 31, 2003, the rules for setting of prices
contained in the Agreement shall remain in effect up to the said implementation
period.

 

14.                               Cancellation

14.1                           Any of the parties may cancel the Agreement, until the publication of
the new national legislative structure applicable to universal service arising
from the Community Law.

 

14.2                           In the event of cancellation the rules for setting of prices contained
in the Agreement shall remain in force until the parties arrive at an
agreement, taking into account, specifically, the evolution of the process of
transposition and implementation of the community legislation relating to
electronic communications.

 

Lisbon,
December 30, 2002

                

DEPARTMENT OF TRADE AND COMPETITION

Dr. Maria do Carmo Felix da Costa Seabra

ICP — National Communications Authority

 

8Exhibit
4.6

 

FINANCE
MINISTRY

FINANCE
MINISTER’S OFFICE

 

 

CONTRACT
FOR PURCHASE AND SALE OF THE

BASIC
TELECOMMUNICATIONS NETWORK AND

THE
TELEX NETWORK

 

 

On December 27, 2002 at the Finance Ministry,
situated at Avenida Infante D. Henrique, 1, in Lisbon, there appeared before
me, the Substitute Acting Secretary-General of this Ministry, Paula Alexandra
Sousa Rodrigues Flores:

 

1.               Her Excellency
the Finance Minister, Dr. Maria Manuela Dias Ferreira Leite, as the first
grantor, representing the Government, under her powers given by Clause 3 of the
Resolution of the Council of Ministers of December 11, 2002, hereinafter “the
State”; and

2.               Doctor Miguel
António Igrejas Horta e Costa and Engineer Zeinal Abedin Mahomed Bava, as
second grantors, representing PT Comunicações, S.A., a publicly-held
corporation with head office at Rua Andrade Corvo, 6, Lisbon, legal entity
number 504 615 947, registered in the Lisbon Commercial Registry under number
09406 (4th Section), with a registered capital of one hundred and fifty
million euros (150,000,000 euros), hereinafter “PT Comunicações”;

 

— and before me, Substitute Acting
Secretary-General of this Ministry, the granting parties stated that, in the
terms of the Resolution of the Council of Ministers of December 11, 2002, which
approved the draft contract, and considering that: 

 

 

[Each page carries four initials.]

 

1

 

 

(a)                      With the
conclusion of the process of liberalization of telecommunications, the statute
of public ownership of the Basic Network ceased to be justified, in view of the
fact that the access to this network by all the telecommunications operators is
shown to be duly ensured by the regime of offer of open access to which PT
Comunicações is obliged under the law;

(b)                     In the panorama of the
European Union, no situation in which the ownership of the Basic Network does
not belong to the historic operator exists;

(c)                      The ownership
of the Basic Network has not, thus, impeded, in the other European countries,
its functioning as an open-access network, serving as support to the
transmission of the generality of services, and that its use by all the
telecommunications operators in equality of conditions and in regime of full
competition is assured;

(d)                     Separation of the Basic
Network from the public domain by the State under Law 29/2002 of December 6,
and also its disposal, not only represents a natural evolution of the national
communications markets, but also enables PT Comunicações to be placed on a
footing of equality with the other European operators;

(e)                      With obedience
to the principle of the open access network being assured, disposal of the
ownership of the Basic Network also represents a measure of good financial
management of the State, since it makes it possible to receive substantial
immediate revenues, from payment of an income for the concession of the Basic
Network to PT 

 

2

 

Comunicações,
under the Concession Contract, the initial bases of which were published in
Appendix II Decree-Law 40/95 of February 25, under which PT Comunicações holds
the effective possession of the Basic Network;

(f)                        The fact that
the management and commercial operation of the Basic Network is attributed on
an exclusive basis to PT Comunicações up to 2025, and also the circumstance
that the respective redemption is permitted only as from 2010 and with  recourse to a costly indemnity process,
prevent the consideration of any other model for disposal of the ownership of
the Basic Network than through a direct agreement with PT Comunicações, in its
status as concession holder and as the entity providing universal
telecommunication service;

(g)                     The disposal of the
ownership of the Basic Network to PT Comunicações thus represents one more
important step in the direction of liberalization of the sector, placing PT
Comunicações in a situation of equality with the large companies of the
European market, while it permits the State to make better use of its financial
resources;

(h)                     Since the Basic Network
constitutes the network that supports the provision of universal
telecommunication service, and since PT Comunicações is designated, under
Decree-Law 458/99 of November 5, as provider of the universal service, it
becomes essential to modify the concession contract so as to adapt it to the
new regime of ownership of the network, without however injuring the essential
nucleus of the rights and obligations assumed by the concession holder in the
ambit of the activities for which concessions are granted, and their economic
equilibrium;

 

3

 

(i)                         The State and
PT Comunicações will, thus, enter into the Agreement to Modify the Concession
Contract, in the terms of the respective bases, the draft Decree-Law of which
was approved in the Council of Ministers of December 11, 2002, the respective
text of which is in Appendix IV to this Agreement, as is also the text of the
draft of the Agreement to Modify the Concession Contract, approved by the
Resolution of the Council of Minister of December 11, 2002 (Appendix I), of
which it is an integral part;

(j)                         It is seen to
be fundamental to ensure that the guarantees provided by the State in the ambit
of the various phases of privatization, as presented in the various offer documents
in Portugal and in the international financial markets, are not affected in any
way whatsoever by disposal of the ownership of the Basic Network to PT
Comunicações;

(l)                         The process of
valuation of the Acquisition Value of the ownership of the Basic Network was
carried out by independent entities of recognized national and international
merit and competence, and the Acquisition Value has been agreed between the
Parties based on certain elements of valuation and other pre-suppositions
considered to be fundamental for the business process being carried out;

 

— they now enter into this Contract for
Purchase and Sale of the Basic Telecommunications Network and the Telex
Network, in accordance with the following clauses:

 

4

 

MINISTRY
OF FINANCE

CABINET
OF THE MINISTER OF STATE FOR FINANCE

 

Clause
One            

Definitions
and Interpretation

 

1.1         In this contract, including
its premises and appendices, and with the exception of context where the
meaning is clearly otherwise, the below indicated terms will have the meanings
indicated for them here following:  

 

(a)          Agreement Amending the
Concession Contract:  The agreement
amending the Telecommunications Public Service Concession Contract, the basic
conditions of which were approved by Decree-Law No. 40/95 of February 15, an
agreement to be made when the Decree-Law is published that alters be Basic
Conditions of the Telecommunications Public Service Concession the project for
which was approved by the Council of Ministers on December 11, 2002 and the
mentioned Concession Contract will substitute for it for all purposes; 

 

(b)         Concession:  the concession of the telecommunications
public service covered by the Agreement Amending the Concession Contract;

 

(c)          The Law on Basic Conditions
for Telecommunications: Law No. 91/97 of August 1 which defines the general
basic conditions to which the establishment, management and operation of
telecommunications networks and the providing of telecommunications services
must conform, with the wording given to it by Law No. 29/2006 of December 6; 

 

(d)         Parties:  The State and PT Communications; 

 

(e)          Basic Network:  The set of telecommunications infrastructures
as defined in the Law on Basic Conditions for Telecommunications; 

 

5

 

(f)            Telex Network: The set of
infrastructures assigned to the providing of fixed telex service as defined in
the Agreement Amending the Concession Contract; 

 

(g)         Universal Service: the set
of specific obligations inherent in the providing of telecommunications
services for addressed public use, for the purpose of satisfying the
communication needs of the population and of the economic and social activities
throughout the national territory, with equality and continuity and in
conditions of adequate remuneration, taking into account the requirements of a
harmonious and balanced economic development; 

 

(h)         End of the Concession: March
20, 2025 

 

(i)             Acquisition Price: the value
indicated in clause 5. 

 

1.2         The above defined
expressions in the singular can be used in the plural and vice versa, with the
corresponding modification of the respective meaning.  

 

1.3         The appendices indicated
here following constitute part of this contract for all legal purposes:

 

(a)          Appendix I:           Draft of the Agreement Amending the
Concession Contract 

 

(b)         Appendix II:          Identification of the Infrastructures
included in the Basic Network and in the Telex Network; 

 

(c)          Appendix III:         Justifying Note of the Acquisition
Price 

 

6

 

(d)         Appendix III:                          Draft
Decree-Law amending the Basic Conditions for the Concession of
Telecommunications Public Service 

 

1.4         The headings of the clauses
of this contract are included merely for reasons of convenience and do not
constitute support for its interpretation and are not an integral part of
it.  

 

Signal Two

Purpose

 

2.1         Under the terms and
conditions stipulated in this contract, the State conveys to PT Comunicações,
who acquires, the ownership of the Basic Network and of the Telex Network that
include the infrastructures identified in Appendix II.  

 

2.2         The transfer of the
ownership of the Basic Network and of the Telex Network will take effect on the
signing date of this contract, this date being for all specifically fiscal and
accounting purposes, considered to be the date of acquisition of the ownership
thereof by PT Comunicações.

 

Clause Three

Establishment, Operation and Use of the Basic
Network

 

3.1         From the date of acquisition
of the Basic Network and of the Telex Network, PT Comunicações shall assume
full ownership thereof, free of any encumbrance or charge.

 

3.2         Without prejudice to the
provisions of the preceding numeral, during the term of the Concession Contract
PT Comunicações undertakes to assign to the Concession the infrastructures
composing the Basic Network.  

 

7

 

3.3         The Basic Network must
operate as an open network, serving to support the transmission of general
services, and its use must be assured by all the operators and providers of
telecommunications in equal conditions.

 

3.4         The acquisition of the Basic
Network and of the Telex Network by PT Comunicações in no way prejudices the
right of access to and occupation of public domain conduits for the installation
and maintenance of telecommunications infrastructures, including those
installed in locations operated by concessionaires as provided by law.

 

Clause Four

Termination of the Concession Contract and/
or the Universal Service obligations

 

                        The possible
termination, for any reason, of the Concession Contract or the termination of
the universal service obligations that are currently binding on PT Comunicações
will in no way affect the right of ownership of the Basic Network and of the
Telex Network acquired by PT Comunicações under this contract.  

 

Clause Five

Acquisition Price and Method of Payment

 

5.1         PT Comunicações shall pay to
the State for the acquisition of ownership of the Basic Network and of the
Telex Network the amount of three hundred sixty-five million euros (€365,000,000),
excluding VAT, pursuant to numerals 2 and 3 of Article 2 of the VAT Code.  

 

8

 

5.2         Acquisition Price indicated
in the preceding numeral is fully paid as of this date by means of an endorsed
check, for the amount of which the State hereby gives full receipt.  

 

Clause Six

Elements Composing the Acquisition Price

 

 

6.1         The Parties recognize to
have agreed on the Acquisition Price Based on the following appraisal
elements:  

 

(a)          Result of the independent
appraisal of the Basic Network according to the assumptions mentioned in the
Note Justifying the Acquisition Price, which is attached to this contract;  

 

(b)         Termination of the payment
obligation by PT Comunicações for an annual rent corresponding to 1% of the
gross operating revenue for the services covered by the Concession, including
those relative to the 2002 fiscal year, until the End of the Concession.

 

6.2         The parties additionally
recognize that the Acquisition Price has been agreed based on the assumptions
contained in the Justifying Note constituting Appendix (IP) of this
Competent.  

 

Clause Seven

Representation and Guarantees of the State

 

The
State declares and guarantees that 

 

7.1         It is the legitimate owner
of the Basic Network and of the Telex Network, which belong to its private
domain, and are thus freely disposable.

 

9

 

7.2         Without prejudice to the
provisions of No. 2 of clause No. 12 and of the obligation of the
Concessionaire to maintain possession of the Network for the period of the
Concession, the Basic Network and the Telex Network, the infrastructures of
which are identified in Appendix II are sold free of any limitations to their
alienation, substitution and/ or encumbrance, provided that that it in no way
affects the providing of the conceded services, namely the assignment to the
Concession of the infrastructures composing the Basic Network and the operation
of it as an open network.  

 

Clause Eight

Obligation for Indemnification

 

 

8.1         The State undertakes to
indemnify PT Comunicações for any damages, costs or charges that it may incur
due the falseness of any of the representations and guarantees mentioned in
clause 7.

 

8.2         PT Comunicações must prove
the facts that give rise to its right to indemnification. 

 

Clause Nine

Considerations

 

Apart from the obligations assumed by the
parties under this contract, no other considerations of a financial nature or
of any other nature may be required pursuant to or as a consequence of the
presently effected transfer.  

 

10

 

 

Clause
Ten

(Cooperation
between Parties)

 

The State undertakes to cooperate with PT
Comunicações in completing any relevant formalities associated with the
transfer of title over the assets forming the object of the present contract to
the ownership of PT Comunicações.

 

Clause
Eleven

(Applicable
Law and Arbitration Tribunal)

 

11.1.            The present
contract shall be governed by the laws of Portugal

 

11.2.            Any legal
action arising under the present contract shall be resolved by recourse to an
Arbitration Tribunal, which shall be convened pursuant to the terms of the
following points.

 

11.3.            The arbitration
tribunal shall be comprised of three arbitrators, with each Party to the proceedings
to appoint one arbitrator each, while the third arbitrator shall be appointed
by mutual agreement between the arbitrators so appointed by the Parties.

 

11.4.            The Party which
decides to refer a particular dispute to the arbitration tribunal pursuant to
the terms of the preceding point shall set forth its grounds for doing so, and
immediately appoint its chosen arbitrator in its request for the establishment
of the arbitration tribunal which it will issue to the other party by means of
a registered letter with acknowledgement of receipt. The notified Party must,
within a period of 20 working days commencing from the date of receipt of said
notice, appoint its own chosen arbitrator and organize its defense.

 

11

 

11.5.            The arbitrators
appointed in accordance with the terms of the preceding point will themselves
appoint the third tribunal arbitrator within a period of 10 days commencing
from the appointment of the arbitrator chosen by the respondent Party.

 

11.6               In the event of
failure to agree upon the appointment of the third arbitrator, the required
appointment shall be made by the president of the Lisbon Court of Appeals,
acting at the request of either of the Parties.

 

11.7               The arbitration
tribunal shall be deemed as constituted as of the date on which the third
arbitrator accepts his/ her appointment and notifies his/ her acceptance to
both Parties.

 

11.8               The arbitration
tribunal may be assisted by any technical experts that it deems fit to appoint,
while in all cases the tribunal must accept advice by persons or entities with
sufficient legal training in Portuguese law.

 

11.9               The arbitration
tribunal will deliberate the matter according to constituted law, and its
decisions are final and unappealable, notwithstanding the provisions in law for
the annulment of arbitration decisions.

 

11.10         The decisions
of the arbitration tribunal shall constitute the final decision in the dispute
resolution process and will include the establishment of the costs of the proceedings
and the manner in which said costs will be apportioned between the Parties.

 

11.11         For issues not
addressed herein, the provisions set forth in the applicable arbitration law
shall apply.

 

Clause
Twelve

 

(Obligation
not to transfer or encumber)

 

 

12

 

 

 

 

12.1
PT Comunicações hereby declares that it is aware that the Government, with the
appropriate authorization of the Portuguese Parliament, intends to pass a legal
statute that will allow the expropriation of the Base Network as per the
following terms:

a)              Expropriation
may take place for reasons that are demonstrably in the public interest, namely
in the event of the redemption of the Concession, or contract rescission prior
to expiry of the Concession Period.

b)             When
expropriation occurs, the transfer of ownership proceeds with extinction of the
Concession, even if the compensation amount owing has not been set;

c)              In the event of
expropriation that is not associated with extinction of the Concession, the
member of the Government who is empowered to take the expropriation decision
may, at any time, order the immediate transfer of ownership;

d)             Authority to
decide upon expropriation corresponds to the Government member responsible for
the communications sector;

e)              The
compensation amount shall correspond to the value of the asset to be
expropriated at the time of the expropriation decision;

f)                Compensation
shall be set by an arbitration tribunal comprised of one arbitrator appointed
by each of the Parties, and by a president appointed by mutual agreement
between the two aforesaid appointees or, failing such agreement, by the
President of the Lisbon Appeals Tribunal.

g)             The Parties
have a period of twenty days commencing from the expropriation decision in
which to appoint their arbitrators.

 

 

13

 

 

h)
The arbitrators shall be selected from amongst technical experts with
recognized competence in the subject matter;

i)
It falls to the arbitration tribunal to set the terms for inventorying and
valuing the assets to the expropriated;

j)
The Arbitrators’ decision is unappealable.

 

12.2 PT Comunicações undertakes not to
transfer or encumber the Base Network, nor whatsoever of the assets comprising
it, before the elapse of a period of sixty days commencing from the date of
subscription of the present contract.

 

Clause
Thirteen

(Termination
Condition)

 

13.1 The Parties acknowledge that the entry
into force of the statute altering the Concession Bases constitutes an essential
precondition for the formalization of the present contract, and it is therefore
established that the present contract shall automatically terminate in the
event that the aforementioned statute does not enter into force within a period
of sixty days commencing from the present date.

13.2 In the event of termination described in
the proceeding point, the Concessionary [Party of the Second Part] shall be
entitled to reimbursement of the amounts paid pursuant to the terms of clause
5, plus interest at the Euribor rate + 75 bp.

 

Executed at Lisbon, this Twenty Seventh day
of December, 2002, on two original documents, with one retained by the State
and the other by PT Comunicações.

 

 

14

 

 

 

 

The Portuguese State is exempted from paying
stamp duty under the terms of article 5, item (a) of the Stamp Tax Code.  Exempt from value added tax (VAT) under the
terms of article 2, points 2 and 3 of the VAT code.  Stamp duty as per published schedule in the
amount of 2.50 euros to be paid by PT Comunicações.

 

The
Minister for the State and Finances

 

[Illegible
signature]

(Maria
Manuela Dias Ferreira Leite)

 

 

 

Per PT
Comunicações, S.A.

 

[Illegible
signature]

(Miguel
Antonio Igrejas Horta e Costa)

 

[Illegible
signature]

(Zeinal
Abedin Mahomed Bava)

 

 

The
Deputy, acting for the Secretary General

 

[Paula
Alexandra Sousa Rodrigues Flores]

(Paula
Alexandra Sousa Rodrigues Flores)

 

15

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