Table of Contents
Exhibit
4(b)(4)
CONDITIONAL
PUT OPTION AGREEMENT
This
CONDITIONAL PUT OPTION AGREEMENT (“Put Option
Agreement”), dated as of June 22, 2005, is entered into by
and between
in
their capacity as shareholders of Vieri (as herein defined) and
hereinafter collectively referred to as the “AD Group”,
and, together with Casino (as herein defined) the Controlling
Shareholder of CBD (as herein defined), as defined in this Put
Option Agreement.
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 offices in the city of São Paulo, State of São
Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz
Antônio, No. 3.126, 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 offices in the city
of São Paulo, State of São Paulo, Federative Republic of
Brazil, at Avenida Brigadeiro Luiz Antônio, 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 offices in the city
of São Paulo, State of São Paulo, Federative Republic of
Brazil, at Avenida Brigadeiro Luiz Antônio, 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 offices in the city of São Paulo, State of São
Paulo, Federative Republic of Brazil, at Avenida Brigadeiro Luiz
Antônio, 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 offices in the city of São Paulo, State
of São Paulo, Federative Republic of Brazil, at Avenida
Brigadeiro Luiz Antônio, 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
Antônio, 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 Articles of Association
(hereinafter referred to as “PENÍNSULA”), and
AD PENÍNSULA EMPREENDIMENTOS E 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 Antônio,
No. 3.126, and enrolled with the Brazilian Corporate Taxpayer File
(CNPJ/MF) under No. 07.259.681/0001 -56, herein represented in
accordance with its Articles of Association (hereinafter referred
to as “ AD HOLDING ”), and
and
in its capacity as shareholder of Holding Company and, together
with the AD Group, the Controlling Shareholder 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,
SEGISOR
, a
corporation organized and existing under the laws of French
Republic, with registered head offices at 24, Rue de la Montat,
Saint Etienne, France, and enrolled with the Brazilian Corporate
Taxpayer File (CNPJ/MF) under No. 05.710.423/0001 -19, herein
represented in accordance with its By-Laws, hereinafter referred to
as “ Segisor ”;
Casino
Guichard Perrachon S.A. together with Segisor hereinafter referred
to as “ Casino ”,
the
AD Group and Casino hereinafter collectively referred to as the
“Parties” and individually as a
“Party”,
RECITALS
WHEREAS
,
the Parties, in their capacity as the Controlling Shareholders of
the Holding Company, jointly and indirectly own the Control of CBD
(as herein defined) since the admission of the Holding Company on
the date hereof as the vehicle to hold such Control under the terms
of the JV Agreement (as herein defined) and of the Holding Company
Shareholders’ Agreement (as herein defined);
WHEREAS
,
the AD Group, subject to the terms and conditions of this Put
Option Agreement, is interested in selling to Casino its indirect
equity interest in CBD in the event that Casino becomes entitled to
elect the Chairman (as herein defined) of the Holding Company Board
(as herein defined) and effectively elects the Chairman of the
Holding Company Board, and Casino is interested in increasing its
indirect equity interest in CBD should such event take place, in
accordance with the terms and conditions of this Put Option
Agreement,
NOW
,
THEREFORE , the Parties, 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
Put Option Agreement the following terms shall have the respective
meanings assigned to them below:
“
AD Group ” has the meaning assigned to it in the
preamble of this Put Option Agreement.
“
Affiliates ” means any Person directly or indirectly
at any time controlling, controlled by, or under common Control
with another Person.
“
Board ” means the Board of Directors (“
Conselho de Administração ”) of a Brazilian
company, which functions and operation are currently governed by
Section I of Chapter XII of the Brazilian Corporations
Law.
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“
Brazilian Corporations Law ” means Law No. 6,404, of
December 15, 1976, as amended.
“
Brazilian GAAP ” means the generally accepted
accounting practices in Brazil, as adopted by CVM and as
recommended by “ IBRACON – Instituto dos Auditores
Independentes do Brasil” .
“
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.
“
Casino ” has the meaning assigned to it in the
preamble to this Put Option Agreement.
“
CBD ” means Companhia Brasileira de
Distribuição, a Brazilian public corporation
(“companhia aberta”) 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 Antônio, 3.142, and enrolled
with the Brazilian Corporate Taxpayer File (CNPJ/MF) under No.
47.508.411/0001 -56;
“
CBD Group ” means CBD and its Controlled Companies on
a consolidated basis.
“
Chairman ” means the individual who heads the Board of
the Holding Company.
“
Challenge Notice ” has the meaning assigned to it in
Section 4.4.1 of this Put Option Agreement.
“
Change of Casino’s Control ” has the meaning
assigned to it in Section 4.4 of this Put Option
Agreement.
“
Common Shares ” or “ ON Shares ”
means the voting common shares of the capital stock of CBD or the
Holding Company.
“
Competitor ” means any Person engaged in the Food
Retail Business in Brazil.
“
Control ” 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 or of any other management body, as
applicable, of a Person.
“
Controlled Companies ” means the companies under the
Control of another.
“
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, for any
reason, publish 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 registrable with the Central Bank of
Brazil.
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“
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.
“
Date for the Transfer of the Shares Subject to the First Put
Option ” has the meaning assigned to it in Section 2.4 of
this Put Option Agreement.
“
Date for the Transfer of the Shares Subject to the Second Put
Option ” has the meaning assigned to it in Section 3.4 of
this Put Option Agreement.
“
Date of Execution ” means the date on which the
Parties have signed this Put Option Agreement.
“
Distressful Call Option ” has the meaning assigned to
it in Section 2.9 of this Put Option Agreement.
“
Distressful Call Option Notice ” has the meaning
assigned to it in Section 2.9.1(i) of this Put Option
Agreement.
“
Distressful EBIT ” means the operating profit (before
financial expenses and financial income) of CBD Group, based on
published financial statements in Brazilian GAAP. The EBIT shall
(i) include CBD’s share of net profit in Affiliates and (ii)
take no account of any exceptional or extraordinary
items.
“
Distressful EBITDA ” means the Distressful EBIT of CBD
Group, as adjusted by adding back amortizations and depreciations
(calculated over the last accounting half-year period for
Distressful six-month EBITDA), based on published financial
statements in Brazilian GAAP.
“
Distressful Net Financial Debt ” means the net
financial debt for CBD Group, calculated on the basis of published
financial statements in Brazilian GAAP as the sum of (i) financing
(current and long term), (ii) debentures (current and long term),
(iii) payable on purchase of assets, (iv) dividends declared (but
not paid) and (v) other interest-bearing liabilities (excluding
Taxes), if any, not included in (i) to (iv) above, less the sum of
(a) cash and banks and (b) short-term investments.
“
Distressful Net Interest ” means the financial
expenses less financial income of CBD Group, based on published
financial statements in Brazilian GAAP.
“
Distressful Net Sales ” means the gross sales of CBD
Group less Taxes on sales (calculated over the last accounting
half-year period for Distressful six-month Net Sales), based on
published financial statements in Brazilian GAAP.
“
Distressful Situations ” has the meaning assigned to
it in Section 2.9 of this Put Option Agreement.
“
Divestiture ” or “ Divest ” has the
meaning assigned to it in Section 4.2.1 of this Put Option
Agreement.
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“
EBITA ” has the meaning assigned to it in the Sole
Attachment of this Put Option Agreement.
“
EBITDA ” has the meaning assigned to it in the Sole
Attachment of this Put Option Agreement.
“
Expiration Date for the Exercise of the First Put Option
” has the meaning assigned to it in Section 2.2 of this Put
Option Agreement.
“
Expiration Date for the Exercise of the Second Put Option
” has the meaning assigned to it in Section 3.2 of this Put
Option Agreement.
“
First Put Option ” has the meaning assigned to it in
Section 2.1 of this Put Option Agreement.
“
First Put Option Notice ” has the meaning assigned to
it in Section 2.3 of this Put Option Agreement.
“
Food Retail Business ” means the business of operating
retail, supermarket and hypermarket stores and any other existing
or future format of stores operated or to be operated by CBD, with
predominant activity in food retail.
“
General Meeting ” means any general
shareholders’ meeting of the Holding Company or CBD, as
applicable.
“
Governmental Authority ” means any Brazilian or French
or Luxembourg or United States of America or other federal, state
or local government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority
or instrumentality.
“
Heirs ” means the parents or spouse or sons or
daughters of an individual.
“
Holding Company ” means Vieri Participações
S.A., a corporation 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 Antônio, No. 3.126 and enrolled with the
Brazilian Corporate Taxpayer File (CNPJ/MF) under No.
04.746.689/0001 -59.
“
Holding Company Board ” means the Board of the Holding
Company.
“
Holding Company Shareholders’ Agreement ” means
the shareholders’ agreement executed on even date herewith by
the AD Group and Casino for the purposes of governing their
relationship as the Controlling Shareholders of the Holding
Company.
“
IPCA ” means the “ Índice 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.
“
JCN ” means Mr. Jean Charles Naori and his
Heirs.
“
JV Agreement ” means the agreement entered into by and
among the Parties on May 3, 2005 to which the draft of this Put
Option Agreement was attached thereto as Exhibit 2.2(a)
.
5
"
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.
“
Net Financial Debt ” or “ NFD ” has
the meaning assigned to it in the Sole Attachment of this Put
Option Agreement.
“
Net Sales ” has the meaning assigned to it in the Sole
Attachment of this Put Option Agreement.
“
Party ” or “ Parties ” has the
meaning assigned to it in the preamble to this Put Option
Agreement.
“
Period for the Exercise of the First Put Option ” has
the meaning assigned to it in Section 2.2 of this Put Option
Agreement.
“
Period for the Exercise of the Second Put Option ” has
the meaning assigned to it in Section 3.2 of this Put Option
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 ” or “ PN Shares ”
means the non-voting preferred shares of the capital stock of CBD
or the Holding Company.
“
Price for the Shares Subject to the First Put Option ”
has the meaning assigned to it in Section 2.1.1 of this Put Option
Agreement.
“
Price for the Shares Subject to the Second Put Option
” has the meaning assigned to it in Section 3.1 of this Put
Option Agreement.
“
Profit Before Tax ” or “ PBT ” has
the meaning assigned to it in the Sole Attachment of this Put
Option Agreement.
“
Put Option Agreement ” means this Conditional Put
Option Agreement.
“
RECo ” means the Brazilian corporation that on even
date herewith, through one or more subsidiaries, has received from
CBD certain real estate properties and has rented them to CBD.
“ Reference Group of companies ” has the meaning
assigned to it in the Sole Attachment of this Put Option
Agreement.
“
Representative of the AD Group ” has the meaning
assigned to it in Section 10.15 of this Put Option
Agreement.
6
“
Resulting Amount ” has the meaning assigned to it in
Section 3.1 of this Put Option Agreement.
“
Second Put Option ” has the meaning assigned to it in
Section 3.1 of this Put Option Agreement.
“
Second Put Option Notice ” has the meaning assigned to
it in Section 3.3 of this Put Option Agreement.
“
Second Put Value Formula ” has the meaning assigned to
it in Section 3.1 of this Put Option Agreement.
“
Security Call Option ” has the meaning assigned to it
in Section 2.10 of this Put Option Agreement.
“
Security Call Option Notice ” has the meaning assigned
to it in Section 2.10.1(i) of this Put Option Agreement.
“
Shares Subject to the First Put Option ” has the
meaning assigned to it in Section 2.1 of this Put Option
Agreement.
“
Shares Subject to the Second Put Option ” has the
meaning assigned to it in Section 3.1 of this Put Option
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.
“
Third Party ” means any Person that is not directly or
indirectly related to any of the Parties or any Affiliate
thereof.
“
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.
“
US GAAP ” means the generally accepted accounting
practices in the United States of America.
Article
II – The First Put Option, the Distressful Call Option and
the Security Call Option
2.1.
Subject to the terms and conditions of this Put Option Agreement,
and only in the event, that Casino shall elect the Chairman of the
Holding Company Board from the first day of the eighth (8
th ) year following the Date of Execution, then, and
only then, the AD Group shall be
7
entitled
to cause Casino to purchase as a block and only as a block (the
“ First Put Option ”) a direct equity interest
in Holding Company corresponding to Five Hundred Million
(500,000,000) shares of CBD’s issued and outstanding Common
Shares (hereinafter collectively referred to as the “
Shares Subject to the First Put Option ”). In case of
stock splits, stock dividends and bonus issues, the number of the
Shares Subject to the First Put Option shall be adjusted in such a
way that the Shares Subject to the First Put Option shall at the
time of their purchase by Casino represent at least 2.4 percent of
the Holding Company’s voting capital.
2.1.1.
The price for the Shares Subject to the First Put Option shall be
equal to an amount of Twenty-One U.S. Dollars (US$ 21) per thousand
Common Shares of CBD, in a total amount of Ten Million and Five
Hundred Thousand U.S. Dollars (US$ 10,500,000) (the “
Price for the Shares Subject to the First Put Option
”), irrespective of any stock splits or stock dividends or
bonus issues, and shall be adjusted to take into account the level
of cash and debt in Holding Company at the time of the exercise of
the First Put Option. The adjustment above shall not prevent the
Transfer of the Shares Subject to the First Put Option within the
time period established in Section 2.4.
2.1.2.
For purposes of this Article II, all economic and financial
information related or in connection with CBD shall encompass CBD
Group.
2.2.
The AD Group shall be entitled to exercise the First Put Option
during a period of two (2) months following the date in which
Casino effectively elects the Chairman of the Holding Company
Board, hereinafter called the “ Period for the Exercise of
the First Put Option ”. The First Put Option shall expire
at 6:00 pm, São Paulo time, the last Business Day of that
second month referred to above (the “ Expiration Date for
the Exercise of the First Put Option ”).
2.3.
Should the AD Group decide to exercise the First Put Option during
the Period for the Exercise of the First Put Option, the AD Group
shall deliver a 15-day prior written notice to Casino (the “
First Put Option Notice ”). The First Put Option
Notice shall be sent by facsimile transmission, confirmed by mail
and addressed to Casino. In view of the foregoing, the Parties
hereby understand and agree that the effective sale and purchase of
the Shares Subject to the First Put Option may take place after the
Expiration Date for the Exercise of the First Put
Option.
2.4.
The date for the Transfer of the Shares Subject to the First Put
Option shall be the Business Day immediately following the end of
the period set forth in the First Put Option Notice (the “
Date for the Transfer of the Shares Subject to the First Put
Option ”).
2.5.
In order for the exercise of the First Put Option to be legally
binding upon Casino, the Shares Subject to the First Put Option
shall be free and clear of any Lien at the Date for the Transfer of
the Shares Subject to the First Put Option, to the satisfaction of
Casino and its counsel.
2.6.
Casino shall pay the Price for the Shares Subject to the First Put
Option in Brazilian Reais and in Brazil within two (2) Business
Days from the Date of the Transfer of the Shares Subject to the
First Put Option, at the Conversion Rate prevailing on the Business
Day immediately prior to the day of the exercise of the First Put
Option.
8
2.6.1.
Casino shall have no responsibility to allocate the Price for the
Shares Subject to the First Put Option among the AD Group, which
allocation shall be the sole responsibility of the AD Group. In
view of the foregoing, Casino shall be entitled to deliver the
Price for the Shares Subject to the First Put Option solely to the
Representative of the AD Group.
2.7.
The AD Group shall cause Holding Company to assist and cooperate in
the Transfer of the Shares Subject to the First Put Option, and to
make any governmental filings or secure any governmental permits
and consents prior to or in connection with the exercise of the
First Put Option and with the Transfer of the Shares Subject to the
First Put Option.
2.8.
In the event that Casino does not comply with its obligation to
purchase the Shares Subject to the First Put Option, the AD Group
shall be entitled, in its capacity as special and irrevocable
attorney-in-fact for Casino in accordance with the provisions of
Articles 660 and 683 of the Brazilian Civil Code, to execute and
deliver any and all documents on behalf of Casino for the
completion of the Transfer of the Shares Subject to the First Put
Option, and to cause Holding Company or CBD, as applicable, to
perform any and all action required to be done in connection with
such Transfer.
2.8.1.
The Parties expressly recognize that this Section shall be deemed
the necessary instrument of appointment of attorney-in-fact as
required under the provisions of Article 653 and following articles
of the Brazilian Civil Code.
2.8.2.
The AD Group is hereby authorized by Casino to delegate the powers
granted hereunder to one or more individuals.
2.9.
Notwithstanding the foregoing, the AD Group hereby grants an
irrevocable option for Casino, and Casino accepts it, in accordance
with which Casino shall be entitled to purchase the Shares Subject
to the First Put Option, and the AD Group shall be obliged to sell
to Casino the Shares Subject to the First Put Option, at any time
upon the occurrence of any of the following events that shall be
considered as and hereinafter collectively referred to as the
“ Distressful Situations ” (the “
Distressful Call Option ”):
a)
The Distressful six-month EBITDA of CBD is less than four (4)
percent of Distressful six-month Net Sales during three (3)
consecutive calendar semesters as from the Date of Execution,
or
b)
The ratio of Distressful EBIT over Distressful Net Interest is less
than one and a half (1.5) for two (2) consecutive calendar years as
from the Date of Execution, or
c)
The ratio of Distressful Net Financial Debt over Distressful EBITDA
is higher than three and a half (3.5) for two (2) consecutive
calendar years as from the Date of Execution.
2.9.1.
In case of occurrence of a Distressful Situation, which will be
based on published financial statements of CBD, and should Casino
elect to exercise the Distressful Call Option:
9
(i)
Casino shall deliver a 15-day prior written notice to the AD Group
in writing within six (6) months from the date of publication of
the financial statements of CBD, (the “ Distressful Call
Option Notice ”) and the date of the Distressful Call
Option Notice shall be deemed, for any and all purposes of the
Distressful Call Option, the beginning of the Period for the
Exercise of the First Put Option, without affecting the Expiration
Date for the Exercise of the First Put Option, and
(ii)
the Shares Subject to the First Put Option shall represent 2.4
percent of the Holding Company’s voting capital, but at least
Five Hundred Million (500,000,000) Common Shares of the Holding
Company, and
(iii)
the Price for the Shares Subject to the First Put Option shall then
be Ten Million and Five Hundred Thousand U.S. Dollars (US$
10,500,000) without any adjustments regarding the level of cash and
debt of the Holding Company, and Casino shall pay the Price for the
Shares Subject to the First Put Option in Brazilian Reais and in
Brazil within two (2) Business Days from the Date of the Transfer
of the Shares Subject to the First Put Option, at the Conversion
Rate prevailing on the Business Day immediately prior to the date
of the Distressful Call Option Notice, and
(iv)
the date for the Transfer of the Shares Subject to the First Put
Option shall be the Business Day immediately following the end of
the period set forth in the Distressful Call Option Notice,
and
(v)
in the event that the AD Group does not comply with its obligation
to sell to Casino the Shares Subject to the First Put Option,
Casino shall be entitled to deposit with the Holding Company the
price referred to in item (iii) above and Casino, in its capacity
as special and irrevocable attorney-in-fact for the AD Group in
accordance with the provisions of Articles 660 and 683 of the
Brazilian Civil Code, shall be entitled to execute and deliver any
and all documents on behalf of the AD Group for the completion of
the Transfer of the Shares Subject to the First Put Option, and to
cause the Holding Company and the custodian bank in charge of the
registry of the shares of the Holding Company to perform any and
all action required to be done to implement such Transfer; in
connection with the foregoing, the Parties expressly acknowledge
that this Section shall be deemed the necessary instrument of
appointment of attorney-in-fact as required under the provisions of
Article 653 and following articles of the Brazilian Civil Code, and
Casino is hereby authorized by the AD Group to delegate the powers
granted hereunder to one or more individuals.
2.10.
The AD Group hereby grants an irrevocable option for Casino, and
Casino accepts it, in accordance with which Casino shall also be
entitled to purchase the Shares Subject to the First Put Option,
and the AD Group shall be obliged to sell to Casino the Shares
Subject to the First Put Option, at any time that Casino becomes
entitled to elect the Chairman of the Holding Company Board and
Casino decides to effectively elect the Chairman of the Holding
Company Board and, for any reason whatsoever, including, without
limitation, by action or omission of
10
the
AD Group or by action of any Third Party, including any
Governmental Authority or by change in the applicable laws, does
not effectively elect the Chairman of the Holding Company Board
(the “ Security Call Option ”).
2.10.1.
In this case, and should Casino decide to exercise the Security
Call Option,
(i)
Casino shall deliver a 15-day prior written notice to the AD Group
within ninety (90) days from the date that Casino does not for any
reason whatsoever elect the Chairman of the Holding Company Board
(the “ Security Call Option Notice ”),
and
(ii)
the Shares Subject to the First Put Option shall represent 2.4
percent of the Holding Company’s voting capital, but at least
Five Hundred Million (500,000,000) Common Shares of the Holding
Company, and
(iii)
the Price for the Shares Subject to the First Put Option shall then
be Ten Million and Five Hundred Thousand U.S. Dollars (US$
10,500,000) without any adjustments regarding the level of cash and
debt of the Holding Company, and Casino shall pay the Price for the
Shares Subject to the First Put Option in Brazilian Reais and in
Brazil within two (2) Business Days from the Date of the Transfer
of the Shares Subject to the First Put Option, at the Conversion
Rate prevailing on the Business Day immediately prior to the date
of the Security Call Option Notice, and
(iv)
the date for the Transfer of the Shares Subject to the First Put
Option shall be the Business Day immediately following the end of
the period set forth in the Security Call Option Notice,
and
(v)
in the event that the AD Group does not comply with its obligation
to sell to Casino the Shares Subject to the First Put Option,
Casino shall be entitled to deposit with the Holding Company the
price referred to in item (iii) above and Casino, in its capacity
as special and irrevocable attorney-in-fact for the AD Group in
accordance with the provisions of Articles 660 and 683 of the
Brazilian Civil Code, shall be entitled to execute and deliver any
and all documents on behalf of the AD Group for the completion of
the Transfer of the Shares Subject to the First Put Option, and to
cause the Holding Company and the custodian bank in charge of the
registry of the shares of the Holding Company to perform any and
all action required to be done to implement such Transfer; in
connection with the foregoing, the Parties expressly acknowledge
that this Section shall be deemed the necessary instrument of
appointment of attorney-in-fact as required under the provisions of
Article 653 and following articles of the Brazilian Civil Code, and
Casino is hereby authorized by the AD Group to delegate the powers
granted hereunder to one or more individuals.
2.11.
The Parties hereby expressly acknowledge and accept that this Put
Option Agreement constitutes an enforcement title under Brazilian
law (“ título executivo extra-judicial ”)
and grants the right to the AD Group or Casino, as the case may be,
to seek an order of specific performance for Casino or the AD Group
to comply with its obligation to purchase or to sell, as
11
the
case may be, the Shares Subject to the First Put Option under the
terms and conditions of this Put Option Agreement, pursuant to the
provisions of Articles 585 and 632 of the Brazilian Civil Procedure
Code. To this effect, the presentation of this Put Option
Agreement, together with copy of the First Put Option Notice or the
Distressful Call Option Notice or the Security Call Option Notice,
shall be deemed as sufficient evidence for the completion of the
sale and purchase of the Shares Subject to the First Put
Option.
2.12.
For the purposes of validity of the First Put Option and/or the
Distressful Call Option and/or the Security Call Option against
Third Parties, including, without limitation, the Holding Company,
either Party shall be entitled to submit this Put Option Agreement
at any time for registration with the custodian bank in charge of
the registry of the shares of the Holding Company and the custodian
bank shall be obliged to effect its registration by virtue of the
provisions of Article 40 of the Brazilian Corporations Law. Either
Party shall be entitled to seek an order of specific performance
for the custodian bank to comply with its obligation under Article
40 of the Brazilian Corporations Law.
2.13.
The AD Group, severally and jointly, hereby acknowledges and agrees
that the AD Group shall not Transfer and shall not create a Lien
and shall not, to the extent reasonably possible, allow a Third
Party to create a Lien on the ownership or any other right over any
of the Shares Subject to the First Put Option and shall not enter
in any negotiation or any transaction involving the Shares Subject
to the First Put Option. If, notwithstanding the above provisions,
such a transaction or agreement is performed or executed by the AD
Group, it will be considered as null and void.
2.14.
To the extent that Casino may be prevented or prohibited, either as
a result of the legal regulations in Brazil prevailing at the time
of the exercise of the Distressful Call Option or of the Security
Call Option or for any other reason whatsoever not caused by
Casino’s action or omission, to purchase the respective
quantity of Common Shares of CBD, Casino will be entitled to
designate and to assign its right to exercise the Distressful Call
Option and/or the Security Call Option to an Affiliate of Casino
and, if and only if such assignment is prohibited, Casino will be
entitled to designate a Third Party which shall not be a Competitor
of CBD, the relevant assignee then being entitled to purchase the
respective quantity of Common Shares of CBD under the same terms
and conditions set forth in this Article II. The appropriate
written notice of assignment shall be timely sent to the AD
Group.
Article
III – The Second Put Option
3.1.
In the event, and only in the event, that the AD Group shall have
sold the Shares Subject to the First Put Option to Casino through
the exercise of the First Put Option or through the exercise by
Casino of the Distressful Call Option or of the Security Call
Option, and subject to the terms and conditions of this Put Option
Agreement, the AD Group shall be entitled to cause Casino to
purchase as a block and only as a block (the “ Second Put
Option ”) a direct equity interest in Holding Company
corresponding to Nine Billion, Six Hundred and Eighty-Seven Million
and Five Hundred Thousand (9,687,500,000) shares of CBD’s
issued and outstanding Common Shares (hereinafter collectively
referred to as the “ Shares Subject to the Second Put
Option ”), at an exercise price equal to the amount
resulting from the application of the formula set forth in the Sole
Attachment of this Put Option Agreement (the “ Price for
the Shares Subject
12
to
the Second Put Option ”).
The formula set forth in the Sole Attachment of this Put Option
Agreement shall hereinafter be referred to as the “ Second
Put Value Formula ”. The Price for the Shares Subject to
the Second Put Option shall be computed in Brazilian Reais and
based on accounts published (under US GAAP) in Brazilian Reais. The
resulting amount in Brazilian Reais will be indexed by IPCA as of
the date of the annual financial statements of CBD immediately
prior to the date of the Second Put Option Notice and until the end
of the fourth (4 th ) month after the availability of
the annual accounts published (under US GAAP) or until the Date for
the Transfer of the Shares Subject to the Second Put Option,
whichever is earlier. The amount in Brazilian Reais (the “
Resulting Amount ”) to be indexed shall result from
the application of the Second Put Value Formula and then converted
into U.S. Dollars at the Conversion Rate on the Date for the
Transfer of the Shares Subject to the Second Put Option. In case of
stock splits, stock dividends and bonus issues the number of Shares
Subj
