PROTOCOL AND JUSTIFICATION OF PARTIAL SPIN-OFF OF ODEBRECHT QUIMICA S.A. AND
TRANSFER OF THE SPUN-OFF PORTION TO BRASKEM S.A.
Entered into Between
Odebrecht QUIMICA S.A., a corporation with headquarters at Xxx Xxxxxxxxxx, Xx.
3,342, Room 01, Camacari Petrochemical Hub, - BA, CEP 42810-000, enrolled on the
General Taxpayers' Registry (CNPJ) under No. 57.015.018/0001-84, and also
registered by the Board of Trade (NIRE) under No. 00.000.000.000, hereby
represented in accordance with its bylaws, hereinafter referred to as "Odequi";
and
Braskem S.A., a company with headquarters at Xxx Xxxxx, Xx. 1,561, Camacari
Petrochemical Hub, Camacari - BA, CEP 42810-000, enrolled on the General
Taxpayers' Registry (CNPJ) No. 42.150.391/0001-70, and also registered by the
Board of Trade (NIRE) under No. 29300006939, hereby represented in accordance
with its bylaws, hereinafter referred to as "Braskem";
Odequi and Braskem hereinafter collectively referred to as "Parties",
Whereas:
(i) Braskem holds all of the voting capital stock and 98.63% of the total
capital stock of Odequi, whose subscribed and paid-in capital stock
totals R$2,340,325,626.40 (two billion, three-hundred forty million,
three-hundred twenty five thousand, six-hundred and twenty six reais and
forty centavos), divided into 23,922,131 (twenty three million,
nine-hundred twenty two thousand one-hundred and thirty-one) registered
shares without par value, 23,594,468 (twenty three million, five-hundred
ninety four thousand and four-hundred sixty eight) of which are common
shares and 327,663 (three-hundred twenty seven thousands six-hundred and
sixty three) of which are preferred shares;
(ii) Odequi, in turn, holds 13,841,438,730 (thirteen billion, eight-hundred
forty one million, four-hundred thirty eight thousand, seven-hundred and
thirty) common shares and 11,123,910,124 (eleven billion, one-hundred
twenty three million, nine-hundred and ten thousand, one-hundred and
twenty four) preferred shares, representing 64.43% (sixty four point
forty three percent) of the voting capital stock and 41.02% (forty one
point zero two percent) of the total capital stock of Trikem S.A.
("Trikem");
(iii) Odequi is willing to conduct a partial spin-off, transferring to Braskem
part of its assets, corresponding to all of its investment in Trikem, as
mentioned above;
(iv) in turn, Braskem is willing to merge part of Xxxxxx's assets that it will
receive from the spin-off, corresponding to all of Odequi's investment in
Trikem, making possible a subsequent merger of Trikem into Braskem;
(v) Odequi's partial spin-off shall not cause any stoppage in its business;
and
(vi) the valuation report of the assets to be spun-off by Xxxxxx, drafted and
delivered by a specialized company, is in accordance with applicable laws
and regulations and the partial spin-off herein considered.
The Parties' management, by this instrument and in the best terms of the law,
are proposing the partial spin-off of Odequi and transfer of a portion of
Odequi's assets to Braskem, therefore executing this Protocol and Justification
of Partial Spin-Off ("Protocol and Justification"), whose goal is to set, in
accordance with Articles 224 and 225 of Brazilian Law No. 6.404, of December 15,
1976, as well as CVM Instruction No. 319, of December 3, 1999, the following
terms and conditions in connection with the partial spin-off:
1. BASES FOR PARTIAL SPIN-OFF
1.1 Odequi shall be partially spun-off, followed by the transfer of the
spun-off portion of its assets to Braskem ("Spin-Off").
1.1.1 The Spin-Off shall be submitted for approval in the participating
companies' Extraordinary General Meetings, regardless of any stoppage of
Odequi's activities and investments and/or in the activities and
investments to be transferred to Braskem.
1.2. The spin-off, and transfer of the spun-off assets to Braskem, is
essential for the merger of Trikem into Braskem, which shall result in
synergy gains for the companies involved, as well as simplify the current
structure, through consolidation of the activities of Braskem and Trikem
into a single company, with consequent reduction in financial and
operational costs and the rationalization of its activities.
2. SPIN-OFF VALUATION AND BASE DATE
2.1 The appointment and nomination of the specialized company,
PricewaterhouseCoopers Auditores Independentes, a partnership organized
in the City of Sao Paulo, State of Sao Paulo, at Av. Xxxxxxxxx Xxxxxxxxx,
No. 1,400, on the 7th through the 11th and the 13th through the 20th
Floors, Torino Tower and with a branch office in the City of Salvador,
State of Bahia, at Xxx Xxxxxx Xxxxxx, Xx. 000, 0xx Floor, and also
registered by the Regional Accounting Council (CRC) of the State of Bahia
under No. CRC 2SP000160/O-5 "F" BA and enrolled on the General Taxpayers'
Register of the Ministry of Finance (CNPJ/MF) under No.
61.562.112/0004-73, with its bylaws registered in the 4th Registry of
Deeds and Documents of the City of Sao Paulo, State of SP, on September
17, 1956, and with further amendments registered in the 2nd Registry of
Deeds and Documents of the City of Sao Paulo, State of SP, represented by
its partner Xx. Xxxxx Xxxxxxx xx Xxxxxx e Xxxx, responsible for the
drafting of the valuation report of the book value of Xxxxxx's net assets
to be spun-off and transferred to Braskem, for purposes of accounting
entries in the books of the
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participating companies, shall be ratified in Braskem's and Odequi's
Extraordinary General Meetings, in accordance with Article 227, ss.1 of
Brazilian Law No. 6.404/76.
2.1.1. PricewaterhouseCoopers Auditores Independentes is a specialized company
in valuations of companies the size of Odequi, and conducted, at the
request of the Parties, the accountant's valuation of Odequi's net assets
to be spun-off and transferred to Braskem, based on information from
Odequi's Balance Sheet, carried out on October 31, 2003 ("Base Date"),
and drafted the Accountant's Valuation Report, which is attached as
Exhibit A hereto, with the amounts therein subject to the prior analysis
and approval of the Parties' shareholders, in compliance with the law.
3. TOTAL AMOUNT OF ODEQUI'S NET ASSETS TO BE SPUN-OFF AND TRANSFERRED TO BRASKEM
3.1. As described in the Valuation Report attached hereto, Xxxxxx's net assets
to be spun-off and transferred to Braskem consist of Odequi's ownership
interest in Trikem's shareholders' equity, which amounts to: (i)
R$269,074,283.09 (two-hundred sixty nine million, seventy four thousand,
two-hundred eighty three reais and nine centavos), corresponding to
41.02% of Trikem's shareholders' equity; (ii) R$813,573,665.48
(eight-hundred thirteen million, five-hundred seventy three thousand,
six-hundred sixty five reais forty eight centavos), corresponding to a
premium recorded based on an increase in the value of the fixed assets
and expected future profits paid upon the purchase of this interest; as
well as (iii) Odequi's shareholders' equity reserve accounts totaling
R$1,082,647,948.57 (one billion, eighty two million, six-hundred forty
seven thousand, nine-hundred forty eight reais and fifty seven centavos),
corresponding to part of its capital stock.
3.2. According to the valuation carried out, the book value of Odequi's net
assets to be spun-off and transferred to Braskem amounts
R$1,082,647,948.57 (one billion, eighty two million, six-hundred forty
seven thousand forty eight reais and fifty seven centavos), complying
with the following Clause 3.3.
3.3. All assets variations concerning Xxxxxx's net assets to be spun-off to
Braskem, valued as of the Base Date, shall be accounted for Braskem.
4. CHANGES IN THE CAPITAL STOCK OF THE INVOLVED COMPANIES
4.1. As a result of Xxxxxx's partial spin-off and transfer of the spun-off
assets to Braskem, in accordance with the Book Value Valuation Report,
Odequi's capital shall be reduced by R$1,082,647,948.57 (one billion,
eighty two million, six-hundred forty seven thousand, nine-hundred forty
eight reais and fifty seven centavos). Accordingly, Xxxxxx's
shareholders' equity will decrease from R$2,352,084,018.34 (two billion,
three-hundred fifty two million, eighty four thousand, eighteen reais and
thirty four centavos) to R$1,269,436,069.77 (one
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billion, two-hundred sixty nine million, four-hundred thirty six
thousand, sixty nine reais and seventy seven centavos), taking into
consideration the reduction of Odequi's capital.
4.2. Therefore, Odequi's capital shall decrease from R$2,340,325,626.40 (two
billion, three-hundred forty million, three-hundred twenty five thousand,
six-hundred twenty six reais and forty centavos) to R$1,257,677,677.83
(one billion, two-hundred fifty seven million, six-hundred seventy seven
thousand, six-hundred seventy seven reais and eighty three centavos),
with the cancellation of 11,075,769 (eleven million, seventy five
thousand, seven-hundred and sixty none) common shares, and clause 4 of
Odequi's bylaws, immediately after the approval of the transaction shall
read as follows: "Clause 4 - The Capital Stock is R$1,257,677,677.83 (one
billion, two-hundred fifty seven million, six-hundred seventy seven
thousand, six-hundred seventy seven reais and eighty three centavos),
divided into 12,518,699 (twelve million, five-hundred eighteen thousand,
six-hundred and ninety nine) common shares and 327,663 (three-hundred
twenty seven thousand, six-hundred and seventy three) preferred shares,
all registered shares without par value."
4.3 As a result of Xxxxxx's partial spin-off, Xxxxxx's shareholders' equity
shall have the following structure:
Spun-Off Remaining
Shareholders' Equity Company Portion Portion
-------------------------------------- ------------------ ------------------ ----------------
Capital 2,340,325,626.40 1,082,647,948.57 1,257,677,677.83
Capital Reserves 2,399,360.44 2,399,360.44
Retained earnings (accumulated 9,359,031.50 9,359,031.50
deficit)
------------------ ------------------ ----------------
2,352,084,018.34 1,082,647,948.57 1,269,436,069.77
------------------ ------------------ ----------------
4.4 The spin-off and transfer of Odequi's net assets to Braskem shall be
selective and proportional to the interest of Odequi's only other
shareholder, Odequi Overseas Inc., such that Braskem shall reduce its
interest in Odequi's capital stock from 98.63% to 97.45%, and Odequi
Overseas Inc. shall increase its interest on Odequi's capital stock from
1.37% to 2.55%, which increase in percentage corresponds to the amount
that Odequi Overseas Inc. would be entitled to receive of Xxxxxx's net
assets to be spun-off. After such adjustments, Odequi's capital stock
shall be divided as follows:
Odequi's Total Shares 12,846,362
Common Shares - owned by Braskem 12,518,699 97.45%
Preferred Shares - owned by Odequi Overseas Inc. 327,663 2.55%
4.5 Due to the above-mentioned adjustments, there shall not be an increase in
Braskem's capital stock as a result of Xxxxxx's partial spin-off.
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5. GENERAL PROVISIONS
5.1. The income tax shall be paid by the respective Companies, in accordance
with law, during the appropriate fiscal year.
5.2. It should be noted that, in accordance with the provisions of Article
233, caput, of Brazilian Law No. 6,404/76, Odequi and Braskem shall
jointly and severally be liable for Odequi's obligations prior to the
spin-off.
5.3. The partial spin-off herein proposed shall be presented to Braskem's
Fiscal Council and Board of Directors and submitted to the Parties'
shareholders during General Meetings, in accordance with legally mandated
prior notice provisions.
5.4. Management of the Parties shall perform all necessary acts to implement
Xxxxxx's partial spin-off and to transfer the spun-off assets to Braskem,
in accordance with this Protocol.
5.5. The Parties warrant that these are the rules and procedures that, under
the law, were formulated to govern this partial spin-off, which they
consider to be in the interest of the companies.
6. CONCLUSION
6.1. These, shareholders of Odequi and Braskem, are the rules and procedures
that, under the law, were formulated to govern this Spin-Off transaction,
and which the respective Boards consider to be in the interest of the
companies.
Camacari, December 8, 2003
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Odebrecht Quimica X.X.
Xxxxxxxx Xxxxxx xx Xxxxxxx Xxxxxx and Xxxxxxxx X. xx Xxxxxxxx Xxxxx
-----------------------------------------------
Braskem S.A.
Xxxxxxxx X. xx Xxxxxxxx Xxxxx and Xxxx Xxxx Xxxxx
