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
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|
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Exhibits
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Exhibit
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2.1(a)
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By-Laws
of the Holding Company
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Exhibit
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2.2(a)
|
Conditional
Put Option Agreement
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Exhibit
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2.2(b)
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Family
Share Call Option Agreement
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Exhibit
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2.2(c)
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Holding
Company Shareholders’ Agreement
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Exhibit
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2.2(d)-1
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CBD
Shareholders’ Agreement
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Exhibit
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2.2(d)-2
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Usufruct
Agreement
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Exhibit
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2.2(e)
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By-Laws
of the CBD
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Exhibits
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2.2(e)(ii)
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Master
Lease Agreement and Template Lease Agreement
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Exhibit
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2.2(e)(v)
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RECo
By-Laws (RECo Master and RECo Operating Companies)
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Exhibit
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2.2(e)(vi)
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RECo
Shareholders’ Agreements (RECo Master and RECo
Operating Companies)
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Exhibit
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5.1(f)
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Acknowledgement
and Consent by Family
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Exhibit
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5.1(n)
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Legal
Opinion by Brazilian Counsel to the AD Group
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Exhibit
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5.1(o)
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Legal
Opinion by Brazilian Counsel to CBD
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1
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
”,
2
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;
3
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.
4
“
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.
5
“
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.
6
“
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.
7
“
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.
8
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)
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.
9
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
10
(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.
11
(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
12
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.
13
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.
14
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.
15
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.
17
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
