Unified management team led by Zeinal BavaZeinal Bava, CEO of Portugal Telecom from 2008 to 2013 and the current CEO of PT Portugal as well as CEO of Oi, will head CorpCo as its CEO and its subsidiaries. Improved time to market to crystalize growth opportunities in Brazil The Transactions will allow CorpCo to leverage Oi's unique footprint in Brazil and Portugal Telecom's experience in the Portuguese market, thus allowing it to crystalize the growth opportunities in convergence and mobility in Brazil. Commitment to financial discipline and value creation CorpCo will place a strong focus on excellence in integration and operational practices. A clear plan for action has been identified to integrate areas of potential efficiency. This includes identified teams in place to capture synergies and address existing operational challenges. The Transactions may generate operational and financial synergies estimated to have a net present value of approximately R$5.5 billion. CorpCo is committed to its financial discipline to improve the flexibility of its balance sheet in order to reduce financial risk and to underpin investment in future growth areas. Return of activities to positive FCF during 2015 As a result of the Transaction, we estimate that the combined activities of the companies will achieve positive free cash flow generation in the second half of 2015. 2. Principal Steps of the Transactions The Transactions, in their current configuration, comprise, among other things, the following corporate actions and steps that are subject to refinement in the definitive agreements that will govern the Transactions: 2.1. Oi Capital Increase Oi proposes to undertake a capital increase in the minimum amount, as of the date of this Material Fact, of approximately R$13.1 billion, with the goal of reaching R$14.1 billion, with the approximate amount to be paid in cash of a minimum of R$7.0 billion, with the goal of reaching R$8.0 billion, and the approximate amount to be paid with assets of R$6.1 billion, to be conducted through the public issuance of common shares and preferred shares of Oi, preferably in proportion to the current ratio between the issued and outstanding common and preferred shares of Oi (the "Oi Capital Increase"), it being agreed that, in order to respect the legal limit for division of capital between voting and non-voting shares (i.e., minimum of one third of the shares entitled to vote and maximum of two thirds of shares without voting rights), the number of issued shares of each type may be adjusted. The Oi Capital Increase will be subject to the full subscription of the minimum value of the portion to be paid up in cash and will be subject to certain conditions, as described below. Portugal Telecom will enter into a commitment to subscribe and pay for the portion of the Oi Capital. Increase to be paid for through the contribution of assets (the "PT Assets"), through the contribution of the share interests in companies that hold all of (i) the operating assets of Portugal Telecom, except the equity interests directly or indirectly held in Oi and Contax Participacoes S.A., and (ii) the liabilities of Portugal Telecom on the date of contribution. Under the Brazilian Corporations Law, the PT Assets will be identified and subject to valuation by a specialized company, whose valuation report will be submitted to the General Meeting of shareholders of Oi.