SEMINÁRIO DE PRIVATE EQUITY EMISSÃO DE AÇÕES NO

SEMINÁRIO DE PRIVATE EQUITY: EMISSÃO DE AÇÕES NO EXTERIOR Headline goes here Dec 13, 2006 DONALD BAKER Tel: 55 -11 -3147 -5601 E-mail: dbaker@whitecase. com

Topics I. III. IV. V. VII. The Initial Decision: Do You Want to Be a Public Company Planning for the Offering Starting the Process U. S. Securities Laws Registration Process The Underwriting Process Keys to Success WHITE & CASE LLP

I. The Initial Decision: Do You Want to Be a Public Company Benefits: § Access to Capital § Liquidity of Securities Ø Exit Strategies for stockholders Ø Employee incentive arrangements Ø Currency for acquisitions Ø Marketing of Brand WHITE & CASE LLP

I. The Initial Decision: Do You Want to Be a Public Company Burdens: § Expenses § Regulation § Market Pressure to Perform § Fiduciary duties § Risks of aborted offering WHITE & CASE LLP

II. Planning for the Offering § Corporate Governance Structure Ø Corporate Structure - “Novo Mercado” Ø Committees – Audit vs. Fiscal Council Ø Independent Directors Ø Whether to adopt “anti-takeover” provision § Investor Relations Ø Director Ø Public Relations/Media Relations Firm Ø Website WHITE & CASE LLP

II. Planning for the Offering Remuneration of Members of Board of Directors (Conselho da Administração) and Directors (Diretoria) § Profit Sharing Plan § Long-term incentive plan : Stock Option vs. Phantom Stock vs. Bonus Ø Participants as shareholders, not just employees Ø Attract talented management Ø Do not generate cash expenses (vs. dilution) WHITE & CASE LLP

II. Planning for the Offering Selecting an Underwriter: § Analysts in the Industry § Personal Relationship § Underwriter Horsepower § Valuation § Commitment to your transaction Selecting Others in Team: § Attorneys § Auditors WHITE & CASE LLP

III. Starting the Process § All Hands Organizational Meeting Ø Scheduling the offering: § Timetable § Financial Statements to be included/Timetable for delivery Ø Structuring the offering § Primary vs. Secondary Ø Status Check on Acquisitions and other Developments Ø “Quiet Period” Begins WHITE & CASE LLP

IV. U. S. Securities Laws § General Ø Under the Securities Act of 1933, generally each offer and sale of a security must be registered or exempt Ø Some limited security exemptions, including: § Rule 144 A § Regulation S § Regulation D WHITE & CASE LLP

IV. U. S. Securities Laws To Whom May Offer Be Made 144 A Offering § Qualified Institutional Buyers “QIBs” § US$100 million in securities assets § US$25 million for broker dealers § Determine status from published source or by certificate No General Advertising or Solicitation WHITE & CASE LLP

IV. U. S. Securities Laws Regulation S Offering Rule 903: Two basic conditions: 1. Offshore transaction 2. No directed selling efforts in U. S. WHITE & CASE LLP

(con t. ) V. Registration Process § Drafting the Prospectus Ø Industry precedents are helpful Ø Underwriters’ Preferences Ø Methodology § Painstaking care § Verification of each sentence § Capturing the essence of the company Ø Timing Ø Allocation of resources to process Due diligence point person § Chief financial officer – projections and financial information § WHITE & CASE LLP

(con t. ) V. Registration Process § Prepare Registration Statement Ø Front cover Ø Due Diligence Process (include all material information and no material misstatements) § Prior preparations is key § Legal due diligence vs. management due diligence WHITE & CASE LLP

V. Registration Process Due Diligence Defense § Underwriters must conduct a due diligence investigation in order to benefit from certain defenses under the U. S. Securities Act of 1933 in the event of material misstatements or omissions in the Offering Document. § There is no due diligence defense for Issuers: Issuers are strictly liable (without defenses) for errors and omissions in Offering Document. § Expertized (e. g. , audited financials) vs. non-expertized portion WHITE & CASE LLP

(con t. ) V. Registration Process § What constitutes a reasonable investigation? It depends on the circumstances, including: Ø Nature of Issuer (i. e. , size, type, stability of business, whether it is regulated, financial condition, earnings history) Ø Type of offering; Ø Quality of management, auditors and outside counsel; and Ø Time available for investigation. WHITE & CASE LLP

(con t. ) V. Registration Process Ø Plain English Ø Non-Financial Disclosure Ø MD&A (Management Discussion and Analysis) Ø Financial Statements § Audited financial statements required ØIncome/Cash Flow Statements - three most recent fiscal years ØBalance Sheet - two most recent fiscal years WHITE & CASE LLP

VI. The Underwriting Process § Signing an underwriting agreement Ø Ø Ø Day of pricing Close 3 -5 business days thereafter Comfort letter Bring-Down Due Diligence Deliveries at closing § Accountant’s comfort letter § Attorneys opinions – “ 10 b-5” opinion § Shares § Certificates, etc. § Green-shoe closing: Over-allotment of 15% § “Lock-Up”: 180 days WHITE & CASE LLP

VI. The Underwriting Process Representations and warranties § Typically, an underwriter in an IPO will seek extensive reps and warranties from: Ø Ø Company Selling Shareholders Representations and warranties “Insiders” vs. “Non-insiders” Registration Rights Agreement - provisions WHITE & CASE LLP

VII. Keys to Success § Advance Preparation Ø Anticipate due diligence requests Ø Anticipate accounting issues Ø Complete acquisitions/intellectual property work and other major corporate developments WHITE & CASE LLP

(con t. ) VII. Keys to Success § Depth and Expertise in Management Ø Market expectations Ø Challenges of workload and timing Ø Road show presentations § Selecting the Right Deal Team WHITE & CASE LLP

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