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

With respect to the transfer of the 35% interest from Geminus do Brasil to Plaza Trust,
the registry does not mention any termination condition, which may, however, result from an
error of the Real Estate Registry, since the verification of the overriding activity is mandatory
as a result of the Law.
In any case, those transfers were registered with the Real Estate Registry in 2002 and
2004, respectively. As a result, if the City’s Attorney has not yet filed a suit to charge such ITBI
based on the verification of the termination condition, the debt would have expired under the
statute of limitation, and therefore, would no longer be collectable.
5. Mortgages
The Botafogo Praia Shopping Property is subject to four mortgages, as informed
below 7 .
A. 1 st Mortgage of 17,5% (R-19/AV-24)
Deed: 11.29.2002
Creditor: Koninklijke Vendex KBB N.V. (Netherlands)
Debtor: Plaza Trust
Mortgagor: Geminus do Brasil Comercio e Participações Ltda.
Debt: R$100,815,000.00
According to the sale agreement entered into between Plaza Trust and Koninklijke
Vendex KBB N.V. (“Koninklijke”), dated as of 11.21.2002 (the “Geminus Sale Agreement”),
Plaza Trust acquired the quotas representative of the corporate capital of Geminus do Brasil
Comércio e Participações Ltda. (“Geminus”), which, at that time, held a 35% interest on
Botafogo Praia Shopping for a price of US$28,600,000.00 8 , in five installments.
Plaza Trust undertook to grant, on the closing date of the transaction (i) a first
mortgage on 50% of the acquired interest in Botafogo Praia Shopping Property to Koninklijke,
(ii) a first mortgage of 50% of the acquired interest in Botafogo Praia Shopping Property to
Banco BCN S.A. and (iii) a second mortgage of 100% of the acquired interest in Botafogo
Praia Shopping Property to Banco BCN S.A. Drafts of the respective deeds were supposedly
attached to the Geminus Sale Agrement, but we were not provided copies of such exhibits.
On 06.20.2008, Maxeda DIY Group B.V. (“Maxeda”), thereby appearing as the legal
successor of Koninklijke, and Plaza Trust entered into a settlement agreement (the “Geminus
Settlement Agreement”) to put an end to disputes arising from the Geminus Sale Agreement.
According to the Geminus Settlement Agreement, Maxeda agreed that Plaza Trust debts
related to the purchase price of Geminus’ quotas be reduced by US$3,000,000.00, and Plaza
Trust undertook to pay the outstanding balance on or prior to 06.25.2008 (this date was later
altered to 01.16.2009).
7 Please note that the mortgages’ degrees mentioned hereunder are accordingly to the priority they hold
today, irrespective of the priority they might have had when they were first registered.
8 According to the deed of mortgage executed on 11.29.2002, the price should be paid in Reais. Therefore,
the amounts for each installment should be converted at a rate of 3.25. However, such rule is not reflected
in the Sale Agreement.
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