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JOINT VENTURE AGREEMENT

Joint Venture JV Agreement

JOINT VENTURE AGREEMENT | Document Parties: BRAZILIAN DISTRIBUTION CO COMPANHIA BRASILEIRA DE DISTR CBD | ABILIO DOS SANTOS DINIZ  | ANA MARIA FALLEIROS DOS SANTOS DINIZ D“AVILA | ADRIANA FALLEIROS DOS SANTOS DINIZ  | JOĆO PAULO FALLEIROS DOS SANTOS DINIZ | PEDRO PAULO FALLEIROS DOS SANTOS DINIZ You are currently viewing:
This Joint Venture JV Agreement involves

BRAZILIAN DISTRIBUTION CO COMPANHIA BRASILEIRA DE DISTR CBD | ABILIO DOS SANTOS DINIZ | ANA MARIA FALLEIROS DOS SANTOS DINIZ D“AVILA | ADRIANA FALLEIROS DOS SANTOS DINIZ | JOĆO PAULO FALLEIROS DOS SANTOS DINIZ | PEDRO PAULO FALLEIROS DOS SANTOS DINIZ

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Title: JOINT VENTURE AGREEMENT
Date: 9/15/2005

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Table of Contents

Exhibit 4(b)(3)

JOINT VENTURE AGREEMENT

among

ABILIO DOS SANTOS DINIZ

ANA MARIA FALLEIROS DOS SANTOS DINIZ D´AVILA

ADRIANA FALLEIROS DOS SANTOS DINIZ

JOÃO PAULO FALLEIROS DOS SANTOS DINIZ

PEDRO PAULO FALLEIROS DOS SANTOS DINIZ

and PENINSULA PARTICIPAÇÕES LTDA.

(the “AD Group”)

and

CASINO GUICHARD PERRACHON S.A. (“Casino”)

and as Intervening Party

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO S.A. (“CBD”)

dated as of May 3, 2005

 

 

 

Exhibits  

Exhibit  

2.1(a)

By-Laws of the Holding Company  

Exhibit  

2.2(a)

Conditional Put Option Agreement  

Exhibit  

2.2(b)

Family Share Call Option Agreement  

Exhibit  

2.2(c)

Holding Company Shareholders’ Agreement  

Exhibit  

2.2(d)-1  

CBD Shareholders’ Agreement  

Exhibit  

2.2(d)-2  

Usufruct Agreement  

Exhibit  

2.2(e)

By-Laws of the CBD  

Exhibits

2.2(e)(ii)

Master Lease Agreement and Template Lease Agreement  

Exhibit  

2.2(e)(v)

RECo By-Laws (RECo Master and RECo Operating Companies)

Exhibit  

2.2(e)(vi)

RECo Shareholders’ Agreements (RECo Master and RECo   Operating Companies)

Exhibit  

5.1(f)

Acknowledgement and Consent by Family  

Exhibit  

5.1(n)

Legal Opinion by Brazilian Counsel to the AD Group  

Exhibit  

5.1(o)

Legal Opinion by Brazilian Counsel to CBD  

 

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This JOINT VENTURE AGREEMENT (“Agreement”), dated as of May 3, 2005, is entered into by and among

in their capacity as the current direct and indirect majority shareholders of CBD (as herein defined) and as members of the controlling group of CBD, acting jointly and severally in this Agreement and hereinafter collectively referred to as the “ AD Group ”,

ABILIO DOS SANTOS DINIZ , a Brazilian citizen, married, business administrator, the holder of the Brazilian identity card No. 1.965.961 -SSP/SP and of the Brazilian Individual Taxpayer Identity Card (CIC) No. 001.454.918 -20, with domicile in the city of São Paulo, State of São Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126 (hereinafter referred to as “AD”), and ANA MARIA FALLEIROS DOS SANTOS DINIZ D´AVILA , a Brazilian citizen, married, business administrator, the holder of the Brazilian identity card No. 12.785.206 -2-SSP/SP and of the Brazilian Individual Taxpayer Identity Card (CIC) No. 086.359.838 -23, with domicile in the city of São Paulo, State of São Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126, and ADRIANA FALLEIROS DOS SANTOS DINIZ , a Brazilian citizen, divorced, the holder of the Brazilian identity card No. 15.910.036 -SSP/SP and of the Brazilian Individual Taxpayer Identity Card (CIC) No. 105.549.158 -98, with domicile in the city of São Paulo, State of São Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126, and JOÃO PAULO FALLEIROS DOS SANTOS DINIZ , a Brazilian citizen, single, entrepreneur, the holder of the Brazilian identity card No. 12.785.207 -4-SSP/SP and of the Brazilian Individual Taxpayer Identity Card (CIC) No. 101.342.358 -51, with domicile in the city of São Paulo, State of São Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126, and PEDRO PAULO FALLEIROS DOS SANTOS DINIZ , a Brazilian citizen, single, entrepreneur, the holder of the Brazilian identity card No. 19.456.962 -7 SSP/SP and of the Brazilian Individual Taxpayer Identity Card (CIC) No. 147.447.788 -14, with domicile in the city of São Paulo, State of São Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126, and PENÍNSULA PARTICIPAÇÕES LTDA. , a limited liability company organized and existing under the laws of the Federative Republic of Brazil, with registered head offices in the city of São Paulo, State of São Paulo, Brazil, at Avenida Brigadeiro Luiz Antonio, No 3.126, and enrolled with the Brazilian Corporate Taxpayer File (CNPJ/MF) under No. 58.292.210/0001 -80, herein represented in accordance with its By-Laws (hereinafter referred to as “Peninsula”), and

and in its capacity as a direct and indirect minority shareholder of CBD and member of the controlling group of shareholders of CBD, on its own behalf and on behalf of its Affiliates (as herein defined),

CASINO GUICHARD PERRACHON S.A. , a corporation organized and existing under the laws of French Republic, with registered head offices at 24, Rue de la Montat, Saint Etienne, France, herein represented in accordance with its By-Laws, hereinafter referred to as “ Casino ”,

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and, as an Intervening Party to this Agreement, and in its capacity as the entity whose Control (as herein defined) is the subject of this Agreement,

COMPANHIA BRASILEIRA DE DISTRIBUIÇÃO , a public company organized and existing under the laws of the Federative Republic of Brazil, with registered head offices in the city of São Paulo, State of São Paulo, Brazil, at Av. Brigadeiro Luiz Antonio, 3.142, and enrolled with the Brazilian Corporate Taxpayer File (CNPJ/MF) under No. 47.508.411/0001 -56, herein represented in accordance with its By-Laws, hereinafter referred to as “ CBD ”,

the AD Group and Casino hereinafter collectively referred to as the “Parties” and individually as a “Party”,

RECITALS

WHEREAS , CBD is a Brazilian public corporation (“ companhia aberta ”) and has certain of its securities traded on the São Paulo Stock Exchange – BOVESPA and on the New York Stock Exchange and on the Luxembourg Stock Exchange;

WHEREAS , the Parties jointly own the Control of CBD since the execution by the Parties and Affiliates of a certain Master Agreement on August 9, 1999 (“ Original Master Agreement ”) and of a certain Shareholders’ Agreement on September 16, 1999 (“ Original Shareholders’ Agreement ”);

WHEREAS , the AD Group owns, directly and indirectly, in the aggregate, 33,183,461,483 shares of CBD’s issued and outstanding Common Shares (as herein defined);

WHEREAS , Casino owns, directly and indirectly, in the aggregate, 15,218,575,935 shares of CBD’s issued and outstanding Common Shares;

WHEREAS , Casino, subject to the terms and conditions of this Agreement, is interested in having with the AD Group the co-Control of CBD;

WHEREAS , the AD Group, subject to the terms and conditions of this Agreement, is willing to share with Casino the Control of CBD;

WHEREAS , CBD is fully aware of the transactions contemplated by this Agreement, including, without limitation, the Transfer (as herein defined) of some of its real estate properties and their rental from the purchaser, which transaction will allow CBD to have access to additional funding while securing long-term rentals;

WHEREAS , in order to deepen the relationship between the Parties, the AD Group has shown some interest in holding an equity interest in Casino, and Casino and the AD Group have agreed to continue to discuss this possible additional relationship during the forthcoming months;

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NOW, THEREFORE , the Parties and CBD, intending to be legally bound, hereby agree as follows:

Article I – Defined Terms

1.1. Except as may otherwise be defined herein, for the purposes of this Agreement the following terms shall have the respective meanings ascribed to them below:

Acknowledgement and Consent ” has the meaning ascribed to it in Section 5.1(f) of this Agreement, as it is part of the Transaction Documents (as herein defined).

AD Group ” has the meaning assigned to it in the preamble of this Agreement.

AD Group Losses ” has the meaning ascribed to it in Section 10.6 of this Agreement.

Affiliate ” or “ Affiliates ” means any Person directly or indirectly at any time controlling, controlled by, or under common Control with another Person.

Agreement ” means this Joint Venture Agreement.

Apportioned Liabilities ” has the meaning ascribed to it in Section 10.3.3 of this Agreement.

Brazilian GAAP ” means the generally accepted accounting practices in Brazil, as adopted by CVM and as recommended by IBRACON.

Business Day ” means any day of the year on which national banking institutions in a relevant place are open to public for conducting business and are not required or authorized to close.

CADE ” means the Brazilian antitrust agency, the “ Conselho Administrativo de Defesa Econômica – CADE ”.

Casino ” has the meaning ascribed to it in the preamble to this Agreement.

CBD ” has the meaning ascribed to it in the preamble to this Agreement.

CBD Group ” means CBD and all of its Controlled Companies from time to time.

CBD Shareholders’ Agreement ” has the meaning ascribed to it in Section 2.2(d) of this Agreement.

Central Bank of Brazil ” means the Brazilian federal institution with powers similar to those of the United States Federal Reserve Bank.

Closing ” has the meaning ascribed to it in Section 6.1 of this Agreement.

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Closing Date ” has the meaning ascribed to it in Section 6.1 of this Agreement.

Common Shares ” means the voting common shares of the capital stock of a Brazilian corporation.

Conditional Put Option Agreement ” has the meaning ascribed to it in Section 2.2(a) of this Agreement.

Control ” or “ Controlled ” means the (direct and indirect) title to shareholder rights that permanently guarantee, directly or indirectly: (i) the majority of votes in General Meeting deliberations, and (ii) the power to appoint the majority of members of the Board of Directors or of any other management body, as the case may be, of a Person.

Controlled Company ” or “ Controlled Companies ” means any Person Controlled by a certain Person.

Controlling Shareholder ” means the Person that has the Control of another Person.

Conversion Rate ” for conversion of U.S. Dollars into Brazilian Reais and vice versa means the average exchange rate for the U.S. Dollar published by the Central Bank of Brazil via SISBACEN for the PTAX-800, option 5, rates for accounting transactions. If the Central Bank of Brazil does not publish, for any reason, the PTAX-800 rate, the Conversion Rate shall be the average exchange rate determined by the Central Bank of Brazil for the U.S. Dollar in connection with foreign investment transactions registered or registerable with the Central Bank of Brazil.

Convertible Securities ” means securities or other rights or interests which are convertible or exchangeable into or exercisable for shares, or any other options, warrants, rights, contracts or commitments of any character pursuant to which any Person or one of its shareholders is or may be bound to issue, Transfer, repurchase or otherwise acquire any shares.

CVM ” means the “ Comissão de Valores Mobiliários – CVM ”, a Brazilian governmental body with regulatory functions similar to those of France’s “ Conseil des Marchés Financiers ”.

Date of Execution of this Agreement ” means the date on which all Parties have signed this Agreement.

EBITDA ” means, for the CBD Group on a consolidated basis, earnings before interest, tax, depreciation and amortization and is equal to gross profit less selling, general and administrative expenses less taxes (other than corporate income tax) and charges, all such figures computed in accordance with Brazilian GAAP.

EBITDA margin ” means, for the CBD Group on a consolidated basis, EBITDA divided by net sales revenue, all such figures computed in accordance with Brazilian GAAP.

Exempted Amount ” or “ Exempted Amounts ” has the meaning ascribed to it in Section 10.3.2 of this Agreement.

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Exhibit ” means any draft agreement attached to this Agreement, which therefore becomes an integral part of this Agreement and which shall come into force as indicated in the pertinent provision of this Agreement.

Family ” means Messrs. Valentim dos Santos Diniz and Lucília Maria dos Santos Diniz, relatives of AD, and their heirs.

Family Share Call Option Agreement ” has the meaning assigned to it in Section 2.2(b) of this Agreement.

General Meeting ” means any general shareholders’ meeting of a Person.

Goodwill ” has the meaning ascribed to it in Section 2.4 of this Agreement.

Governing Documents ” has the meaning ascribed to it in Section 8.1.2.2(i) of this Agreement.

Governmental Authority ” means any Brazilian or French or Luxembourg or United States or other federal, state or local government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

Holding Company ” has the meaning ascribed to it in Section 2.1 of this Agreement.

Holding Company Shareholders’ Agreement ” has the meaning ascribed to it in Section 2.2(c) of this Agreement.

IBRACON ” means “ IBRACON – Instituto dos Auditores Independentes do Brasil ”, a Brazilian private organization with purposes similar to those of the Financial Accounting Standards Board (FASB), of the United States of America.

IPCA ” means the “ ¥ndice de Preços ao Consumidor Amplo ”, an index that reflects the Brazilian inflation and is calculated and disclosed from time to time by the “ Instituto Brasileiro de Geografia e Estatística ”, the IBGE.

Liabilities ” has the meaning ascribed to it in Section 10.1(ii) of this Agreement.

Liabilities after Credit Set-Off ” has the meaning ascribed to it in Section 10.3.1 of this Agreement.

" LIBOR ” means the London Interbank Offered Rate as determined by the British Bankers' Association for a 6-month period, in United States Dollars.

Lien ” means any lien, pledge, security interest, claim, lease, charge, option, right of first refusal, Transfer restriction under any shareholder or similar agreement, encumbrance or any other restriction or limitation whatsoever that may affect the free full ownership or may impair the disposal at any time whatsoever.

Losses ” has the meaning ascribed to it in Section 10.1(i) of this Agreement.

Main Transaction ” has the meaning ascribed to it in Section 2.1 of this Agreement.

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Market ” means any organized market regulated by CVM or by the New York Stock Exchange or by the Luxembourg Stock Exchange or by any securities authority with jurisdiction on the stock exchanges where any securities issued by CBD are or will be traded.

Master Lease Agreement ” has the meaning ascribed to it in Section 2.2(e)(ii) of this Agreement.

Material Adverse Change ” has the meaning ascribed to it in Section 5.1(b) of this Agreement.

Material Adverse Effect ” means any effect that has resulted in a material adverse change in the business, properties, results of operations or financial condition of a Person and the business carried out by such Person, all taken as a whole, or in the Person’s ability to perform its obligations.

Maximum Amount for Indemnification by the AD Group ” has the meaning ascribed to it in Section 10.3.4 of this Agreement.

Net Financial Debt ” means, for the CBD Group on a consolidated basis, the sum of (i) financing (current and long term), (ii) debentures (current and long term), (iii) dividends (declared but not distributed) and other interest-bearing liabilities not included in items (i) and (ii) above, less the sum of (a) cash and banks, (b) short-term investments, and (c) credit receivables (net of allowances for doubtful debt), all such figures computed in accordance with Brazilian GAAP.

Net Income ” means, for the CBD Group on a consolidated basis, net income, it being hereby understood that net income is to exclude the share of minority interests and to include all non-operating and exceptional income and losses, all such figures computed in accordance with Brazilian GAAP.

Net Liabilities ” has the meaning ascribed to it in Section 10.3.2 of this Agreement.

" Ordinary Course of Business " means the day-to-day performance of acts, including obtaining of funds necessary for the carrying out of the business of a company.

Original Master Agreement ” has the meaning ascribed to it the Second Whereas of this Agreement.

Original Shareholders’ Agreement ” has the meaning ascribed to it in the Second Whereas of this Agreement.

Peninsula ” has the meaning ascribed to it in the preamble to this Agreement.

Person ” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a governmental or political subdivision or an agency or instrumentality thereof.

Preferred Shares ” means the non-voting preferred shares of the capital stock of a Brazilian corporation.

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Party ” or “ Parties ” has the meaning ascribed to it in the preamble to this Agreement.

Purchase Price ” has the meaning ascribed to it under Section 3.1 of this Agreement.

RECo ” has the meaning ascribed to it in Section 2.2(e)(i) of this Agreement.

RECo Shareholders’ Agreement ” has the meaning ascribed to it in Section 2.2(e)(vi) of this Agreement;

Reference Price ” has the meaning ascribed to it in Section 4.3.1(a) of this Agreement.

Representative of the AD Group ” has the meaning ascribed to it in Section 14.15 of this Agreement.

Schedule ” means a statement attached to this Agreement that gives a showing of the matters referred to in the pertinent provisions of this Agreement, and which therefore becomes an integral part of this Agreement.

September 30, 2004 Financial Statements ” has the meaning ascribed to it in Section 8.1.4.3 of this Agreement.

Subject Holding Company Shares ” has the meaning ascribed to it in Section 2.1(e) of this Agreement.

Subject Real Estate Properties ” has the meaning ascribed to it in Section 2.2(e) of this Agreement.

Tax ” or “ Taxes ” means (a) all federal, state, local or foreign taxes, charges, fees, imposts, levies or other assessments including, without limitation, all net income, gross receipts, capital, sales, use, ad valorem, value added, Transfer, franchise, profits, inventory, capital stock, license, withholding, donation, payroll, employment, social security, social contribution, financial, unemployment, excise, severance, stamp, occupation, property and estimated taxes, customs duties, fees, assessments and charges of any kind whatsoever, (b) all interest, penalties, fines, additions to tax or additional amounts imposed by any taxing authority in connection with any item described in (a) above, and (c) any transferee liability in respect of any items described in (a) and (b) above.

Template Lease Agreement ” has the meaning ascribed to it in Section 2.2(e)(ii) of this Agreement.

Termination Date ” has the meaning ascribed to it in Section 12.1(b) of this Agreement.

Transfer ” means the direct or indirect assignment, transfer, sale, pledge, Lien, contribution of shares of a Person to the capital of another Person, or in any other manner whatsoever, the disposal of the shares of a Person.

Transaction Documents ” has the meaning ascribed to it in Section 2.3 of this Agreement.

Usufruct Agreement ” has the meaning ascribed to it in Section 2.2(d) of this Agreement.

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Article II – The Purpose of this Agreement

2.1. Subject to the terms and conditions of this Agreement, including, without limitation, the conditions precedent under Article V hereof, the Parties agree that the purpose of this Agreement is to allow Casino to continue to share the Control of CBD with the AD Group, by both Casino and the AD Group becoming on the Closing Date the sole owners of Vieri Participações S.A., a Brazilian corporation with registered head offices in the city of São Paulo, State of São Paulo, Brazil, and enrolled with the Brazilian Corporate Taxpayers Register (CNPJ/MF) under No. 04.746.689/0001 -59 (the “ Holding Company ”), which, on the Closing Date, shall become the Controlling Shareholder of CBD by owning more than fifty (50) percent of the voting stock of CBD, more precisely Thirty-Two Billion and Seven Hundred Million (32,700,000,000) Common Shares of CBD’s share capital (the “ Main Transaction ”). For this purpose, the Parties agree that the following acts shall be completed on Closing Date, which acts are all connected and shall be reasonably satisfactory to both Parties, and the Parties shall receive any and all evidence of the existence and completion of any and all corporate requirements, including registration, if any, and of any and all approvals, consents, authorizations and notifications, and which acts shall be subsequently implemented in the order indicated below, namely: A

a) The AD Group shall cause the Holding Company to adopt the by-laws attached hereto as Exhibit 2.1(a) .

b) The AD Group shall capitalize the Holding Company with Thirty Billion and Five Hundred Million (30,500,000,000) Common Shares of CBD, receiving in exchange Thirty Billion and Five Hundred Million (30,500,000,000) Common Shares of the Holding Company.

c) The AD Group shall admit Casino as a shareholder of the Holding Company, and Casino shall become a shareholder of the Holding Company, by Casino capitalizing the Holding Company with Two Billion and Two Hundred Million (2,200,000,000) Common Shares of the CBD, causing Casino to be the owner of Two Billion and Two Hundred Million (2,200,000,000) Preferred Shares of the Holding Company. As a result of the completion of the actions specified in this Section and in Section 2.1(b) above, the Holding Company will then be the owner of an aggregate of Thirty-Two Billion and Seven Hundred Million (32,700,000,000) Common Shares of the CBD, thus achieving the capacity of the Controlling Shareholder of the CBD.

d) The AD Group, with the consent of Casino, shall convert Ten Billion and One Hundred and Twenty-Five Million (10,125,000,000) Common Shares of the Holding Company into Ten Billion and One Hundred and Twenty-Five Million (10,125,000,000) Preferred Shares of the Holding Company. As a result of the completion of the action specified in this Section, the Holding Company’s capital stock shall then be represented by Thirty-Two Billion and Seven Hundred Million (32,700,000,000) shares, divided into Twenty Billion and Three Hundred and Seventy-Five Million (20,375,000,000) Common Shares, representing 62.3 percent of the Holding Company’s total share capital and into Twelve Billion and Three Hundred and Twenty-Five Million (12,325,000,000) Preferred Shares, representing 37.7 percent of the Holding Company’s total share capital.

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e) Provided that any and all actions described in Sections 2.1(a) through 2.1(d) above shall have been properly and duly taken, and provided further that the AD Group and Casino and/or its respective counsels shall have received any and all evidence of the implementation of each and every action described in this Section, including any and all evidence of any and all approvals and consents, Casino shall, or shall cause one or more of its Affiliates to, become the owner(s), under a swap of assets or any other arrangement to be mutually agreed upon on or before the Closing Date, of (i) Ten Billion and One Hundred and Eighty-Seven Million and Five Hundred Thousand (10,187,500,000) Common Shares of the Holding Company then owned by the AD Group, and (ii) Ten Billion and One Hundred and Twenty-Five Million (10,125,000,000) Preferred Shares of the Holding Company then owned by the AD Group (hereinafter collectively referred to as the “ Subject Holding Company Shares ”), so that Casino shall then be on the Closing Date the direct owner of Twenty-Two Billion and Five Hundred and Twelve Million and Five Hundred Thousand (22,512,500,000) shares of the Holding Company, they being Ten Billion and One Hundred and Eighty-Seven Million and Five Hundred Thousand (10,187,500,000) Common Shares and Twelve Billion and Three Hundred and Twenty-Five Million (12,325,000,000) Preferred Shares of the Holding Company, and the direct and indirect owner of at least Thirty-Six Billion and Eight Hundred Million (36,800,000,000) of CBD’s issued and outstanding Common Shares, which, together with an indirect ownership of CBD’s issued and outstanding Preferred Shares, will represent in the aggregate a direct and indirect ownership of at least 34.3 percent of CBD’s total share capital, such ownership by Casino achieving the main purpose of the Main Transaction. The formalization of the ownership by Casino of the Subject Holding Company Shares shall be in the form and manner to be agreed upon on or before the Closing Date, and the chosen agreement shall be executed and delivered by the Parties or their designees on the Closing Date. As a result of the actions specified in this Section, the AD Group shall be the owner of Ten Billion and One Hundred and Eighty-Seven Million and Five Hundred Thousand (10,187,500,000) Common Shares of the Holding Company.

2.2. Also, as an integral part of the Main Transaction, on the Closing Date,

a) The AD Group shall enter into an agreement with Casino, in the form of Exhibit 2.2(a) attached hereto (the “ Conditional Put Option Agreement ”), which will regulate, among others, the right of the AD Group to cause Casino to purchase a direct equity interest in the Holding Company and, as a result of such acquisition, an indirect equity interest in CBD comprising an aggregate of Ten Billion, One Hundred and Eighty-Seven Million and Five Hundred Thousand (10,187,500,000) Common Shares of the CBD, representing on the Closing Date nine (9) percent of CBD’s total share capital, and

b) Casino shall enter into an agreement with some members of the AD Group and of the Family, in the form of Exhibit 2.2(b) attached hereto (the “Family Share Call Option Agreement ”), which will regulate the right of Casino to purchase, and cause these members of the AD Group and of the Family to sell, respectively, One Billion and Three Hundred and Ninety-Two Million and Eighty-Seven Thousand and One Hundred and Twenty-Nine (1,392,087,129) and One Billion and Four Hundred and Seven Million and Nine Hundred and Twelve Thousand and Eight Hundred and Seventy-One (1,407,912,871) Common Shares of the CBD, representing, therefore, an aggregate of Two Billion and Eight Hundred Million

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(2,800,000,000) Common Shares of the CBD, representing on the Closing Date 2.5 percent of CBD’s total share capital, and

c) The AD Group and Casino, in their capacity as the Controlling Shareholders of the Holding Company, shall enter into a Shareholders’ Agreement, in the form of Exhibit 2.2(c) attached hereto (the “ Holding Company Shareholders’ Agreement ”), which will supersede and automatically rescind the Original Shareholders’ Agreement, and will govern the relationship of the Parties as owners of the co-Control of the Holding Company and, as a consequence, of the co-Control of CBD, and

d) The AD Group and Casino shall enter with the Holding Company, in their capacity as owners of the majority of the voting capital of CBD, into a shareholders’ agreement, in the form of Exhibit 2.2(d)-1 attached hereto (the “ CBD Shareholders’ Agreement ”), which will (i) govern their relationship in light of the Holding Company Shareholders’ Agreement, and (ii) together with a certain agreement for the creation of an usufruct of their Common Shares of the CBD on behalf of the Holding Company, in the form of Exhibit 2.2(d) -2 attached hereto (the “ Usufruct Agreement ”), determine that Casino and the AD Group shall be obliged to vote in strict accordance with instructions given by the Holding Company, and

e) The AD Group and Casino shall cause the CBD to hold a General Meeting (1) to approve the change in the By-Laws of the CBD in order to conform with the terms and conditions of the Holding Company’s Shareholders’ Agreement, in such a way that the By-Laws of the CBD shall be in the form of Exhibit 2.2(e) attached hereto, and (2) to approve the Transfer of certain real estate properties (subject to the applicable legislation and rules of CVM) owned by the CBD and listed in Schedule 2.2(e)(2) attached hereto (the “ Subject Real Estate Properties ”) and their rental by CBD. Such operation shall not disturb the day-to-day business and the value of CBD and shall be implemented on the Closing Date as a result of the completion of the following acts, namely:

(i) After the approval by the General Meeting of CBD, the AD Group shall cause CBD to form in any manner a Brazilian corporation and one or more Brazilian corporations as subsidiaries of such Brazilian corporation (collectively “ RECo ”) by capitalizing RECo with the Subject Real Estate Properties, subject to tax neutrality.

(ii) Concurrently with the action described in item (i) above, the AD Group shall cause CBD and RECo to enter into a Master Lease Agreement in the form of Exhibit 2.2(e)(ii) attached hereto, which will govern their relationship as lessor and lessee of the Subject Real Estate Properties (the “ Master Lease Agreement ”) and will enter into force on the Closing Date, and to enter into a long-term real estate lease agreement for each of the Subject Real Estate Properties, which will contain standard obligations of lessor and standard rights of lessee, in the form of Exhibit 2.2(e)(ii) attached hereto (the “ Template Lease Agreement ”), and to proceed immediately with its registration, all of it to the reasonable satisfaction of both CBD and Casino and their respective counsels. The Template Lease Agreement shall be for any and all purposes an integral part of the Master Lease Agreement.

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(iii) Concurrently with the actions described in items (i) and (ii) above, the AD Group shall cause CBD to enter into an agreement with the AD Group, in the form and manner to be agreed upon by the Parties on or before the Closing Date, wherein the AD Group will become the owner of all of the shares of RECo less one, for an amount equal to the sum of (1) One Billion and Twenty-Nine Million Brazilian Reais (R$ 1,029,000,000.00), to be confirmed by an independent real estate appraiser not to be lower than the fair market value of the Subject Real Estate Properties, and (2) the amount of the real estate transfer tax to be paid by the CBD by virtue of the contribution of the Subject Real Estate Properties to the capital of RECo, all such action subject to the reasonable satisfaction of both CBD and Casino and their respective counsels, and CBD and Casino shall receive any and all evidence of such transaction and corresponding registration, if any. The consideration for the shares of RECo shall be made available to CBD concurrently with the execution of the agreement referred to in this item and the AD Group shall become the owner of all of the shares of RECo less one on the Closing Date. Part of the consideration for the ownership by the AD Group of all RECo shares less one will be delivered to CBD by Casino, for and on behalf of the AD Group, as part of the Purchase Price.

(iv) Concurrently with the actions described in items (i), (ii) and (iii) above, the AD Group shall cause CBD to admit Casino or any of its Affiliates as a shareholder of RECo, by Transferring to Casino one share of the capital stock of RECo at no cost to Casino.

(v) Concurrently with the actions described in items (i), (ii), (iii) and (iv) above, the AD Group shall cause CBD to cause RECo to convert, at no cost, the one share owned by CBD and the one share owned by Casino into “golden shares”, with certain rights aimed at protecting the interests of CBD and of Casino, which rights shall be those contemplated by the by-laws of RECo attached hereto as Exhibit 2.2(e)(v) and to be formally adopted by RECo concurrently with the action described in this item.

(vi) Concurrently with the actions described in items (i), (ii), (iii), (iv) and (v) above, the AD Group, CBD and Casino, in their capacity as the sole shareholders of RECo, shall enter into shareholders’ agreements, in the form of Exhibit 2.2(e)(vi) attached hereto (the “ RECo Shareholders’ Agreements ”), which terms and conditions will become valid and come into force on the Closing Date.

2.3. Any and all documents and agreements referred to in this Article II and elsewhere in this Agreement aimed at implementing the transactions contemplated by this Agreement on the Closing Date shall be hereinafter referred to as the “Transaction Documents”.

2.4. Action after the Closing Date : Each of the Parties hereby acknowledges and agrees that, as from six (6) months following the Closing Date, the Parties will take all necessary corporate and other actions in order for the CBD to incorporate and amortize, in accordance with Instructions No. 319, of 1999, and 349, of 1999, issued by the CVM, the goodwill generated by the transactions contemplated by this Agreement, as well as the goodwill generated as a result of Casino’s purchases of securities of the CBD prior to the Date of Execution of this Agreement (collectively the “Goodwill”), which Goodwill is estimated to amount to Two Billion and Three

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Hundred Million Brazilian Reais (R$ 2,300,000,000.00) . This obligation shall survive the Closing Date.

2.4.1. The Parties agree that the actions referred to in Section 2.4 above shall meet the following conditions:

a) There shall be no negative impact on CBD’s distributable dividends;

b) Goodwill benefits received by the Holding Company shall be distributed exclusively to Casino; provided that the AD Group shall have preference rights or be entitled to use any other adequate mechanism to avoid being diluted both at CBD and Holding Company levels;

c) Up to twenty (20) percent of the face value of the Goodwill benefit shall be retained at the CBD, at the AD Group’s discretion, and

d) The amortization of the Goodwill shall take place in the least possible period of time allowed by applicable legislation, provided that the benefits to be derived from tax credits booked at the CBD on or before the Closing Date shall not be reduced.

Article III – The Main Transaction and Its Consideration

3.1. As a consideration for Casino or one or more of its Affiliates to become the owner of the Subject Holding Company Shares, Casino shall pay and/or deliver or cause one or more of its Affiliates to pay and/or deliver to the AD Group on the Closing Date as the purchase price (the “ Purchase Price ”):

a) Two Hundred Million U.S. Dollars (US $200,000,000), in the form and manner to be agreed upon on or before the Closing Date, and

b) One Billion Brazilian Reais (R$ 1,000,000,000.00), it being hereby expressly understood and agreed that the above amount will be ultimately delivered by Casino to the CBD, for and on behalf of the AD Group, as part of the price to be paid by the AD Group to the CBD under the terms of the agreement referred to in Section 2.2(e)(iii) hereof, and in the form and manner to be agreed upon on or before the Closing Date, and

c) Twelve Billion and Five Hundred Million (12,500,000,000) shares of CBD’s issued and outstanding Preferred Shares and in the form and manner to be agreed upon on or before the Closing Date.

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Article IV – Subsequent Sale by the AD Group of Certain CBD’s Preferred Shares

4.1. The Parties agree that the subsequent sale by the AD Group of the Twelve Billion and Five Hundred Million (12,500,000,000) CBD’s Preferred Shares referred to in Section 3.1(c) hereof shall be made in accordance with the rules provided for in this Article.

4.2. The AD Group agrees to hold at least Eight Billion (8,000,000,000) CBD’s Preferred Shares during the first twenty-one (21) months following Closing Date.

4.3. For the sale by the AD Group of the first Two Billion (2,000,000,000) CBD’s Preferred Shares, the following rules shall apply during the first nine (9) months following Closing Date:

4.3.1. If the sale of the first Two Billion (2,000,000,000) CBD’s Preferred Shares takes place in the first six (6) months following Closing Date:

a) Should the AD Group sell these shares at price lower than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, Casino hereby agrees to pay or cause its Affiliates to pay to the AD Group the difference between the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares and the Reference Price, this payment being however limited to an amount of Three U.S. Dollars and Fifty Cents of a U.S. Dollar (US $3.50) per thousand Preferred Shares. For the purposes of this Article IV, “Reference Price” means an amount equal to the highest of (i) the price at which the Preferred Shares have been effectively sold, and (ii) the weighted average price per thousand Preferred Shares calculated over a period of six (6) months preceding the sale of the shares, taking into consideration the trading of the American depositary receipts, the ADRs, on the New York Stock Exchange, the Preferred Shares sold by the AD Group being excluded from the calculation of the weighted average.

b) Should the AD Group sell these shares at price higher than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, the AD Group hereby agrees to pay to Casino the difference between the Reference Price and the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, this payment being however limited to an amount of Eight U.S. Dollars (US $8) per thousand Preferred Shares.

4.3.2. If, at the end of the six-month period following Closing Date, the AD Group has sold none or less than Two Billion Shares (2,000,000,000) CBD’s Preferred Shares, the AD Group will immediately notify Casino with AD Group’s election of the following alternative rules to govern the sale of the shares contemplated by this Section 4.3 or their remainder. Failure by the AD Group to elect one of the alternative rules within the seventh (7 th ) month following Closing Date, then Alternative A shall automatically apply.

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a) Alternative A:

(i) Should the AD Group sell the shares at a price lower than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, Casino shall not be obliged to pay any amount to AD Group.

(ii) Should the AD Group sell the shares at a price higher than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, the AD Group agrees to pay to Casino the difference between the Reference Price and the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, this payment being however limited to an amount of Eight U.S. Dollars (US $8) per thousand Preferred Shares.

b) Alternative B:

(i) Should the AD Group sell the shares at a price lower than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, Casino hereby agrees to pay or cause its Affiliates to pay to the AD Group the difference between the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares and the Reference Price, this payment being however limited to an amount of Three U.S. Dollars and Fifty Cents of a U.S. Dollar (US $3.50) per thousand Preferred Shares.

(ii) Should the AD Group sell the shares at a price higher than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, the AD Group agrees to pay to Casino the difference between the Reference Price and the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, this payment being however limited to an amount of Eight U.S. Dollars (US $8) per thousand Preferred Shares.

(iii) Should (x) the AD Group not sell all of the shares or their remainder and (y) the average share price weighted by the volumes - taking into consideration the trading of the American depositary receipts, the ADRs, on the New York Stock Exchange over the period beginning at the sixth (6 th ) month and terminating at the end of the ninth (9 th ) month following Closing Date - be higher than Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, then the AD Group agrees to pay to Casino on the Preferred Shares not sold by the end of the ninth (9 th ) month following Closing Date the difference between such average and the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares, this payment being however limited to an amount of Eight U.S. Dollars (US $8) per thousand Preferred Shares.

4.3.3. The computation of the differences shall be made at the end of the ninth (9 th ) month following Closing Date on a consolidated basis, and payment, if any, by either Casino or its Affiliates or AD Group, as the case may be, shall take place within thirty (30) days thereafter.

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4.4. For the sale by the AD Group of up to Two Billion and Five Hundred Million (2,500,000,000) CBD’s Preferred Shares during the first four (4) years following Closing Date, the following rules shall apply:

a) Casino agrees to pay or cause its Affiliates to pay to the AD Group the difference, if positive, between the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares and the Reference Price, this payment being however limited to an amount of Three U.S. Dollars and Fifty Cents of a U.S. Dollar (US $3.50) per thousand Preferred Shares.

b) Casino shall not be obliged to pay the difference specified in item (a) above on each tranche of up to Eight Hundred and Thirty-Three Million, Three Hundred and Thirty-Three Thousand and Three Hundred and Thirty-Three (833,333,333) Preferred Shares - limited to 3 (three) tranches totaling Two Billion and Five Hundred Million (2,500,000,000) Preferred Shares - each time the average price per thousand Preferred Shares exceeds the amount of Twenty-Four U.S. Dollars (US $24) in any consecutive three (3) months in the period starting at the end of the sixth (6 th ) month following the Closing Date and terminating at the end of fourth (4 th ) year following Closing Date. Each tranche shall be reduced by the amount of shares effectively sold by the AD Group during the respective three (3) month period.

c) The rules provided for in this Section 4.4, including the obligation to pay the difference referred to in item (a) above, if any, and the exception provided for in item (b) above, shall apply to the first Two Billion and Five Hundred Million (2,500,000,000) CBD’s Preferred Shares sold, if these shares are not sold during the first nine (9) months following Closing Date, in which case the rules provided for in Section 4.3 shall apply.

d) The computation of the difference shall be made at the end of the ninth (9 th ) month following Closing Date and thereafter at the end of each six-month period on a consolidated basis, and payment by Casino or its Affiliates, if any, shall take place within thirty (30) days following the end of each six-month period.

4.5. For the sale by AD Group of up to Eight Billion (8,000,000,000) CBD’s Preferred Shares during the sixth (6th) and seventh (7th) years following Closing Date, the following rules shall apply:

a) Casino hereby agrees to pay or cause its Affiliates to pay to the AD Group the difference, if positive, between the amount of Twenty-One U.S. Dollars (US $21) per thousand Preferred Shares and the Reference Price, this payment being however limited to an amount of Two U.S. Dollars and Fifty Cents of a U.S. Dollar (US $2.50) per thousand Preferred Shares.

b) Casino shall not be obliged to pay the difference specified in item (a) above on each tranche of One Billion (1,000,000,000) Preferred Shares - limited to 3 (three) tranches totaling Three Billion (3,000,000,000) Preferred Shares- each time the average price per thousand Preferred Shares exceeds the amount of Twenty-Four U.S. Dollars (US $24) in any consecutive three (3) months in the period starting at the end of the twenty-first (21 st ) month following Closing Date and terminating at the end of the

16


seventh (7 th ) year following Closing Date, it being expressly agreed that, up to the end of the fourth (4 th ) year following Closing Date, this rule will only apply after the three (3) tranches specified in Section 4.4(b) have been consumed. Each tranche shall be reduced by the amount of the Preferred Shares effectively sold by the AD Group during the respective three (3) month period.

c) The quantity of CBD’s Preferred Shares to which the rules provided for in this Section 4.5. shall apply shall be equal to Eight Billion (8,000,000,000) Preferred Shares less any shares subject to Section 4.5(b) and less the quantity of all CBD’s Preferred Shares previously sold by and for the AD Group in the period beginning with the twenty-first (21 st ) month following Closing Date, except that there shall not be deducted (i) the Preferred Shares covered by Section 4.4 above that have not been sold during the first twenty-one (21) months following Closing Date and (ii) the Preferred Shares sold during the fifth (5 th ) year after Closing Date at a price of less than Eighteen U.S. Dollars and fifty cents of an U.S. Dollar (US$ 18.5) .

d) The computation of the difference, if any, shall be made on each six-month period starting as of Closing Date on a consolidated basis, and payment by Casino or its Affiliates shall take place within thirty (30) days following the end of each six-month period.

4.6. For the sake of clarification, the sale procedures set forth in Sections 4.4 and 4.5 above do not contemplate any action or restriction on the sale during the fifth (5 th ) year following Closing Date of any Preferred Shares owned by the AD Group.

4.7. All the sales specified in this Article shall be made through brokers selected from a five-name list presented by the AD Group, provided that Casino may veto up to two (2) names and provided further that all of the candidates have a recognized national reputation, with no liability being imposed upon Casino regarding any default or failure to perform by the brokers.

4.8. Only sales of Preferred Shares of CBD owned by the AD Group at a price equal to or higher than ninety-five (95) percent of the then price of the CBD’s Preferred Shares shall be computed for purposes of calculating the difference in accordance with the provisions of Sections 4.3, 4.4 or 4.5 above, except in the cases provided for in Sections 4.3.1(b) and 4.3.2(a)(ii) and 4.3.2(b)(ii) above.

4.9. All payments by Casino to the AD Group shall be made in Brazilian Reais and in Brazil, at the Conversion Rate prevailing on the date on which each computation of the difference is made. All payments by the AD Group to Casino shall be made in U.S. Dollars under the applicable legislation.

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Article V – Conditions Precedent to Closing

5.1. The obligation of Casino to perform the actions specified in Article II hereof, to enter into the Transaction Documents and to pay the Purchase Price is subject to the satisfaction of the following conditions precedent, provided, however, that these conditions precedent are for the sole benefit of Casino and may be waived in writing individually or in the aggregate by Casino:

a) Representations and Warranties True : The representations and warranties of the AD Group contained in this Agreement and regarding Peninsula or CBD shall be true and correct in all material respects (except in the case of representations and warranties qualified by materiality in any manner, which shall be true and correct in all respects) as of the date hereof and at the Closing Date.

b) No Material Adverse Change : There shall not have occurred any of the following events that shall be considered as and hereinafter collectively referred to as “ Material Adverse Change ”:

i) The net sales, in real terms (IPCA adjusted), of the same stores of CBD fall by m


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