OPTIONS - CONFRONTATION

CORPORATE STRUCTURE – OPTION 2

CORPORATE STRUCTURE – OPTION 2 HOLDING – UK (“UK Co.”) send money Profit Sharing SPE BR (Owned by UK Co.) Profit Sharing Partnership Contract ABRAMAR

CORPORATE STRUCTURE – OPTION 2 Should be incorporated a UK Holding (“UK Co.”). Investor Investor HOLDING – UK (“UK Co.”) Investor Investor Investor

CORPORATE STRUCTURE – OPTION 2 2. UK Co. would organize a company with an specific purpose (hereinafter referred to as “SPE BR”) in Brazil. UK Co. SPE BR

CORPORATE STRUCTURE – OPTION 2 3. “SPE BR” contract with ABRAMAR. ABRAMAR SPE BR Partnership Contract ABRAMAR alienation of the real state properties SPE BR Profit sharing according to the contract SPE BR UK Co. Profit sharing

CORPORATE STRUCTURE – OPTION 2 HOLDING – UK (“UK Co.”) send money Profit Sharing SPE BR (Owned by UK Co.) Profit Sharing Partnership Contract ABRAMAR

CORPORATE STRUCTURE – DETAILS - OPTION 2

CORPORATE STRUCTURE – OPTION 2 1. Partnership contract (SCP) - The “organization” of a joint adventure corporation (hereinafter referred to as “SCP”), shall have ostensive and equity holder partners ABRAMAR and SPE BR, respectively, and through this corporation the real state properties shall be alienated. The equity of the corporation SPE BR shall be paid in full in the national currency. On the other hand, the ostensive partner shall provide real state guarantee which shall surpass the value of the equity of SCP partner. ABRAMAR SCP Real State Guarantee SPE BR

CORPORATE STRUCTURE – OPTION 2 The alienation of the real state properties shall be financed by a governmental finance agency called Caixa Econômica Federal (“CEF”), through the Housing Finance System “Sistema Financeiro de Habitação” (hereinafter referred to as “SFH”), which requires, among other requirements, that the seller is resident and domiciled in Brazil; this is the reason why a foreigner cannot be the owner of the real state property. In Brazil the sale of real state properties require the payment of a Municipal Tax and a Federal Tax. 3. Municipal Tax: if the property is sold through the SFH in the Municipality of Itajaí the tax rate shall be 1% over the financed value, which can vary between 50% and 100% of the property price. In case there is no full financing of the property, the difference shall be paid with a 3% tax rate. For example: Property value: R$ 65.000,00. Financed value R$ 58.500,00 (90%). Cash payment R$ 6.500,00. Tax: R$ 585,00 + R$ 195,00 = R$ 780,00, according to Municipal Complementary Law. (This tax shall be paid by the buyer).

CORPORATE STRUCTURE – OPTION 2 4. Federal Tax: The tax shall be paid by ABRAMAR (ostensive partner) with an approximate 5.93% tax rate (without additional rate from the Corporate Tax Roll Income Tax - IRPJ), over the sale price of the property. 5. The value resulting from the sale of the properties shall be passed over to SPE BR as profit sharing, and shall not be subject to any type of taxation, according to article 10 of Law n. 9249/1995. SCP SPE BR profit Profit sharing according to the contract

CORPORATE STRUCTURE – OPTION 2 6. SPE BR shall pass over the profits to UK Co. without taxation in the money transfer from Brazil (Article 10 of Law n. 9249/1995). 7. When the corporate purpose of SPE BR has been depleted the company shall be dissolved by operation of law. UK Co. shall share among its partners (in the United Kingdom) the values obtained out of its equity in SPE BR, proportionately to its share equity in UK Co. SPE BR UK Co. Investor profit

SCHEDULE / TIME SCHEDULE / TIME

SCHEDULE / TIME Incorporation - UK Holding – 35 days. 2. Registration – Fazenda Nacional - CNPJ: 7 days. Registration – Central Bank - BCB: 7 days. Incorporation – SPE BR: 20 days. Ready to contract with ABRAMAR Total – 69 days.

SPE BR / SCP SPE BR / SCP

SPE BR / SCP A Special Purpose Company – SPE BR - made in the form of a limited company According to Brazilian law, the SPE BR is not constituted as a new type of company. It is always organized according to the available legal forms. For the business purposed, the most adequate form is a limited company. A limited company is regulated by its own rules from the articles 1052 to 1087 in the Brazilian Civil Code. It is a company with a juridical (legal) personality. It is subject to rights and responsibilities. The patrimony of the company is not to be confused with the patrimony of its partners. That is, the obligations contracted by the company are not transferred to its partners.

SPE BR / SCP An SPE BR is created as a limited company and it will be closed when the business is realized. Once the objective is realized the SPC is closed. Conclusions: Taking into account the intention of the business, the SPE BR, under the limited company form, is the best legal alternative for this, for two reasons: (1) little beaurocracy, especially in comparison to other alternatives ; (2) cheaper then other forms of companies: (3) easy maintenance; (4) automatically dissolved with the completion of its objective.

SPE BR / SCP Partnership Contract Legal treatment: brazilian civil code, articles 991 to 996 Characteristics: It’s a contract, not a company. There are two partners: an active partner and a non-active partner. The management and the administration of the SPC business is realized in the name of the active partner. The non-active partner invests money and takes the profits. This partner does not participate in the every day process, and, for this reason, he has no responsibilities for the debts incurred by the company. He is only an investing partner.

SPE BR / SCP The relationship with third parties: all the business relationships created by this partnership contract involved only the active partner and everything is done in his name. In case the active partner breaks the contract, the non-active partner has to execute the guaranties (given by the active partner to the non-active partner when the contract was signed). Fiscalization: The hidden partner has oversight power of the relationships and the business made by the active partner. In this configuration, we recommend that the active partner give a real estate guarantee to the non-active partner. This type of guarantee must be registered in a notary public. If the active partner does not comply with his obligations and with the contract rules, this guarantee will be put into effect. In this case, the non-active partner will receive, upon execution of the guarantee, all that he is entitled (with profit). Therefore, the real estate guarantee is the strongest guarantee for the investors (non-active partner).

CORPORATE STRUCTURE – OPTION 2