1E9Ct5D

7.7. Labor Union / Trade Association LawThe core business activity of the company and the number of trade associations existing in itsgeographical area are what will determine the trade association to which a given company will belong.The respective employees’ labor union will represent all the employees of the company, with theexception of those belonging to officially recognized professional categories, such as secretaries,drivers, economists and journalists, who will be represented by their own particular unions.Both the employees and the companies shall, necessarily, pay the union contributions to therespective labor union/trade association.As a rule, negotiations are held annually between the trade association of the company and the laborunion of the employees of the same category. The collective labor agreements resulting from thesenegotiations are filed at the Labor Court and have force of law.7.8. Social securityThere is more than one social security regime in Brazil:(i) The general regime: regards the INSS (Brazilian Social Security Institute) for the private sector;(ii) The public sector regime: instituted by the Federal Government, the States and Municipalities; and(iii) The supplementary regime: both in the public and private sectors, with the purpose ofsupplementing the pensions from the official social security regime or public sector.The contribution to social security for which the company is responsible, is:(i)20% of the total compensation paid, due or credited, for any reason, during thecourse of the month, to insured (a) employees and (b) free-lancers;(ii) 20% of the total remunerations or compensations paid or credited during the course of themonth to the insured (a) individual taxpayer;(iii)15% of the gross amount of the tax invoice or service bill, with respect to the servicesrendered thereto by (a) cooperative members (through workers' cooperatives);54