PHAROL, SGPS, S.A.

Legal Proceedings Report • Sep 12, 2016

Announcement | Lisbon | 12 September 2016

Notice to the Market disclosed by Oi

PHAROL, SGPS S.A. hereby informs on the Notice to the Market disclosed by Oi, S.A., according to the company's announcement attached hereto.

PHAROL, SGPS S.A.

Public company Share capital Euro26,895,375 Registered in theCommercial Registry Office ofLisbon and Corporation no. 503 215058 PHAROL is listed on the Euronext (PHR). Information may be accessed onBloomberg under the symbol PHRPL.

Luis Sousa de Macedo Investor Relations Director ir@pharol.pt Tel.: +351 212 697698 Fax: +351 212 697949

Oi S.A. – In Judicial Reorganization Corporate Taxpayers' Registry (CNPJ/MF) No. 76.535.764/0001-43 Board of Trade (NIRE) No. 33.3.0029520-8 Publicly-Held Company

MATERIAL FACT

Resignation of Board Member

Oi S.A. – In Judicial Reorganization ("Company"), pursuant to article 157, paragraph 4, of Law no. 6,404/1976 and in accordance with CVM Instruction no. 358/2002, hereby informs to its shareholders and the market in general that Mr. Marcos Grodetzky presented his resignation as member of the Board of Directors of the Company on September 9, 2016

Rio de Janeiro, September 12, 2016.

Oi S.A. – In Judicial Reorganization Flavio Nicolay Guimarães Chief Financial Officer and Investor Relations Officer