1E9Ct5D

joint and several liability of the transferor for one year, and d) the prohibition of competition on the partof the transferor for the period of five years, unless there is express authorization for such.Moreover, certain provisions of the new Bankruptcy and Company Reorganization Act (Law11,101/05) and Complementary Law 118/05, with respect to the acquisition of branches andproduction units and the joint or separate acquisition of assets, belonging to companies undergoingjudicial reorganization or even to the debtor companies, deserve mention.Indeed, in either of these cases, the subject of the transfer during the course of the judicial proceedingwill be free of any encumbrance and there will be no succession of the buyer to the obligations of thedebtor, including those of a tax, labor and occupational accident nature.16. FOREIGN INVESTMENT IN THE FINANCIAL MARKETForeign investments in the financial market include: (i) the use of the depository receipts mechanism;(ii) real estate investment fund; and (iii) Mutual Investment Fund in Emerging Companies. Theaforesaid operations depend on the prior authorization of the Brazilian Securities Commission(Comissão de Valores Mobiliários – CVM) and permit free migration from one type of investment tothe other.The foreign investor - corporate entities, natural persons, funds or other collective investment entities,resident, based or domiciled abroad – may invest in the same instruments and modalities of thefinancial and capital markets that are available to investors residing in Brazil. It is important to notethat financial movements with foreign countries, resulting from such investments, may only beconducted through the contracting of foreign exchange. Since 2005 the foreign exchange rules havesuffered considerable alterations, and as a result of the unification of the floating and free exchangerate markets, today there is one single market for foreign exchange operations.However, this investment system calls for the satisfaction of three prerequisites by the investor: (i) theestablishment of at least one representative in the Country, pursuant to the prevailing legislation; (ii)the completion of a form to be submitted to CVM and BACEN, and (iii) the obtainment of the investor’sregistration with CVM.All the foreign investments in question must be submitted to declaratory registration via electronicmeans at BACEN, which is obligatory for any financial movements with foreign countries, there beingno minimum time limit for the permanence of said investments in Brazil.93