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

2. Topics • 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

3. I. The Initial Decision: Do You Want to Be a Public Company Benefits: • Access to Capital • Liquidity of Securities • Exit Strategies for stockholders • Employee incentive arrangements • Currency for acquisitions • Marketing of Brand

4. 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

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

6. 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 • Participants as shareholders, not just employees • Attract talented management • Do not generate cash expenses (vs. dilution)

7. 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

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

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

10. IV. U.S. Securities Laws To Whom May Offer Be Made 144A 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

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

12. V. Registration Process (cont.) • Drafting the Prospectus • Industry precedents are helpful • Underwriters’ Preferences • Methodology • Painstaking care • Verification of each sentence • Capturing the essence of the company • Timing • Allocation of resources to process • Due diligence point person • Chief financial officer – projections and financial information

13. V. Registration Process (cont.) • Prepare Registration Statement • Front cover • Due Diligence Process (include all material information and no material misstatements) • Prior preparations is key • Legal due diligence vs. management due diligence

14. 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

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

16. V. Registration Process (cont.) • Plain English • Non-Financial Disclosure • MD&A (Management Discussion and Analysis) • Financial Statements • Audited financial statements required • Income/Cash Flow Statements - three most recent fiscal years • Balance Sheet - two most recent fiscal years

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

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

19. VII. Keys to Success • Advance Preparation • Anticipate due diligence requests • Anticipate accounting issues • Complete acquisitions/intellectual property work and other major corporate developments

20. VII. Keys to Success (cont.) • Depth and Expertise in Management • Market expectations • Challenges of workload and timing • Road show presentations • Selecting the Right Deal Team

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