Legal Due Diligence Report - BFRE - Brazilian Finance e Real Estate

see the Annex A to this Report). Among those lawsuits we have identified the following cases
that may represent a relevant contingency to the former co-owners:
(a) Lawsuits against Plaza Shopping Empreendimentos
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On October 14, 2002, Fundação CESP, a co-owner of West Plaza Shopping,
filed a lawsuit against some of the others co-owners, including Plaza Shopping
Empreendimentos, and against other Defendants, aiming at the termination of
the management agreement of the shopping entered into with Plaza Paulista
Administração de Shopping Centers S/C Ltda. coupled with indemnification for
losses and damages corresponding to part of the revenue it should be entitled
as a co-owner, allegedly not duly received. Fundação CESP also requested a
preliminary injunction for the immediate removal of Plaza Paulista as the
manager of the shopping and the judicial seizure (“penhora judicial”) of the
revenue of Plaza Shopping Empreendimentos and Vendex do Brasil Indústria
e Comércio.
The losses and damages shall be evaluated in expert evidence and the
corresponding value is not appraisable at this moment.
When the lawsuit commenced (October 14, 2002), Plaza Shopping
Empreendimentos had not yet sold its stake in Botafogo Praia Shopping to
Plaza Trust SPCO (this sale took place only on November 21, 2002), but when
it was summoned (on January 27, 2003) the sale of said stake to Plaza Trust
SPCO had already been accomplished. Therefore and also because there are
many other defendants in the lawsuit, we estimate that the risk of said lawsuit
having a negative impact on the successive transactions involving the stake of
Plaza Shopping Empreendimentos on Botafogo Praia Shopping is remote.
After the sale of the stake of Plaza Empreendimentos in Botafogo Praia
Shopping to Plaza Trust SPCO, Fundação CESP filed (on December 11, 2002)
a similar lawsuit as the one summarized above against the same Defendants
aiming at the termination of the management agreement of Shopping Center
Paulista entered into with Plaza Paulista Administração de Shopping Centers
S/C Ltda. also coupled with indemnification for losses and damages. As said
lawsuit was commenced after Plaza Empreendimentos had sold its stake in
Botafogo Praia Shopping, we believe that the result of the claim will not impact
the successive transactions involving the stake of Plaza Shopping
Empreendimentos in Botafogo Praia Shopping.
(b) Lawsuits against Plaza Shopping Trust SPCO
Fundação CESP filed a collection lawsuit against Plaza Shopping Trust SPCO
Ltda. aiming at the payment of 30% of the rents arising from some lease
agreements of Shopping Center West Plaza during the period from November
2000 until March 2007, when the Plaintiff was a co-owner of said shopping.
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