BANCO DAYCOVAL S/A. CNPJ No / NIRE Publicly-held Company

Transcription

1 BANCO DAYCOVAL S/A CNPJ No / NIRE Publicly-held Company The rights to subscribe for common and preferred shares (the "Warrants") of Banco Daycoval S.A. ( Daycoval ), any common and preferred shares of Daycoval issuable as a result of the exercise of such Warrants, the preemptive rights to subscribe for Warrants, as well as any bank deposit certificates issued by Daycoval in connection with such Warrants (collectively, the Securities ) have not been and will not be registered under the United States Securities Act of 1933, as amended, or any other U.S. federal and state securities laws (the Rules ), and may not be offered, sold, pledged or otherwise transferred in the United States or to U.S. investors, unless they are registered, or exempt from, or not subject to, registration under the Rules. The information herein does not constitute an offer of securities and Daycoval is not soliciting offers to buy any of the Securities in the United Sates. This information may not be taken transmitted into the United States or divulged, distributed or disseminated in the United States. Any failure to comply this restriction may constitute a violation of the Rules. The distribution of this document in other jurisdictions may also be restricted by law, and persons who have access to this document should be aware of and comply with any such restrictions.

2 2 MINUTES OF THE BOARD OF DIRECTORS MEETING HELD ON FEBRUARY 19, 2009 DATE: February, , at 08:00. PLACE: The company s headquarters at Av. Paulista, São Paulo-SP. ATTENDANCE: All members of the Board of Directors PRESIDING BOARD: Chairman: Sasson Dayan. Secretary: Gustavo Henrique de Barroso Franco RESOLUTIONS: Following extensive debates, the meeting unanimously approved the private issue, on a remunerated basis, within the limit of its authorized capital stock, of subscription warrants for common shares ( ON Warrants ) and the subscription warrants for preferred shares ( PN Warrants, referred to jointly with the ON Warrants as Warrants ) to the Company s shareholders pursuant to article 77 of Law No. 6404/76, with the characteristics stated below: 1. Number: (eighteen million four hundred and fifty-one thousand six hundred and thirteen) 18,451,613 ON Warrants and (seventy six million nine hundred and ninety-nine thousand one hundred and seventeen) 76,996,117 PN Warrants, issued in a single series, totaling the issue of (ninety-five million four hundred and forty-seven thousand seven hundred and thirty) 95,447,730 Warrants. 2. Warrants Price: R$ 0.01 per tranche of 100 Warrants or fractional Warrants, less than 100. The Warrants price will be paid by payment in cash The payment of the subscription price of the Warrants shall be performed within three (3) business days of the date of execution and delivery of the Warrant subscription bulletin ( Subscription Bulletin ) to Banco Bradesco S.A. ( Banco Bradesco ) by means of deposit of the funds and/or dispatch of payment orders relating to the subscription amount of the Warrants, according to the amount obtained by multiplying the amount of subscribed Warrants by the Warrant price per tranche of 100 (one hundred) indicated in item 1 above. 3. Form and Custody: The Warrants will be issued in the book-entry system and kept in custody of Banco Bradesco. 4. Warrants Rights: The Warrants represent securities distinguished from the Company shares, and will grant their owners, on the conditions approved herein, the right to subscribe for shares of the Company s corporate capital by paying the stipulated issue price, according to item 7 below. Ownership of the Warrants, in itself, does not ensure the holder any right to participation in dividends, and interest on net equity (juros sobre capital próprio) or other rights; that is, only as of the date of ratification, by the Central Bank of Brazil

3 3 ( Central Bank ), of the minutes of the Board of Directors Meeting which resolves on the capital increase of the share capital of the Company as a result of the exercise of the ON Warrants or PN Warrants, which will result in the issuance of common shares of the Company ( ON Shares ) and preferred shares of the Company ( PN Shares ), respectively, may the owner enjoy the rights of a shareholder, pursuant to item 6 below. Exercise of the Warrants is optional; the Warrants will become void if not exercised pursuant to item 8 below. 5. Number of Shares to be Subscribed for by Warrants; Adjustment in the Number of Warrants: Each ON Warrant will grant its owner the right to subscribe for one (1) ON Share and each PN Warrant will grant its owner the right to subscribe for one (1) PN Share, in observance to the events of adjustment of the number of shares which the Warrants holders have the right to subscribe in accordance to the provisions of item 5.1 below (being the number of ON Shares or PN Shares which the holders of ON Warrants and PN Warrants, respectively, have the right to subscribe after considering any adjustments provided for herein, the Number of Shares ) The Number of Shares must be adjusted in the events of a reverse split, split, issue of new shares resulting from the capitalization of profits or reserves, or stock dividend affecting the Company s shares until date of the ratification by the Central Bank of the minutes of the Board of Directors Meeting which resolves on the capital increase of the share capital of the Company as a result of the exercise of the ON Warrants and PN Warrants (as defined in item 17 below); the Number of Shares shall be automatically adjusted in these events, pursuant to the amendment or adjustment applicable to the shares then held by the shareholders of the Company, so as to proportionate change the Number of Shares. The Exercise Price shall be reduced in case the Company issues common or preferred shares (or any bond or security which is convertible into common or preferred shares) at a New Issue Price (as defined in item 7.1 below), in observance of the provisions of item 7.1 below. 6. Rights and Advantages of the Shares resulting from the Exercise: The ON Shares and PN Shares to be issued due to exercise of the ON Warrant and PN Warrants, respectively will grant their owners the same rights and advantages attached to common shares and preferred shares of the Company. The ON Shares and PN Shares that are issued due to exercise of the ON Warrants and PN Warrants, respectively, will fully participate in the dividends, interest on net equity and any other values that may be declared and/or distributed by the Company as of the date of the ratification by the Central Bank of the minutes of the Board of Directors Meeting which resolves on the capital increase of the share capital of the Company as a result of the exercise of the ON Warrants and PN Warrants, which will result in the issuance of ON Shares and PN Shares, respectively. The Company will issue a notice upon the occurrence of this ratification by the Central Bank. 7. Exercise Price of the Warrants: The Warrants will grant their acquirer the right to subscribe for ON Shares or PN Shares, as the case may be, at the issue price of (i) seven reais and thirty centavos (R$ 7.30) per share ( Exercise Price 1 ); and (ii) seven reais and seventy-five centavos (R$ 7.75) per

4 4 share ( Exercise Price 2 together with the Exercise Price 1 will be referred to as Exercise Price ), and it will be at the choice of the subscriber to elect one of the two possible alternatives, as specified in item 8 below. Exercise Price 1 was established based on the net equity amount of the Company s share on December 31, 2008, taking into consideration the fact that the management believes that the current market conditions do not cause the quoted value of the Company s preferred shares on the BM&FBovespa floor to reflect the economic amount of the share, what justifies a premium over the current quoted prices. Exercise Price 2 was established with premium in relation to Exercise Price 1, what is justified in reason of the difference of risk which exist in the Exercise Alternative 1 and Exercise Alternative 2, (pursuant to definitions on the item 8 below) due to the fact that Exercise Alternative 2 permits the subscription of ON Shares or PN Shares, as the case may be, in Early Redemption Events (as defined in item 16 below) in a period of three (3) years, from March 31, 2011 to March 31, 2014, in accordance to item 8(b) below, while Exercise Alternative 1 requires the exercise to be performed within thirty (30) days counted as from the Meeting of the Board of Directors of the Company which will formalize the credit of the Warrants to the subscribers, in accordance to the provisions of item 17 below In case the Company issues (i) ON Shares or PN Shares with an issue price which is inferior to the Exercise Price in force, or (ii) any bond or security which is convertible into ON Shares or PN Shares which ascribes to the respective holders the right to subscribe ON Shares or PN Shares for a price which is inferior to the Exercise Price (in both cases, such inferior issue price, the New Issue Price ), the Exercise Price will be automatically reduced to the New Issue Price and, as from that moment, the Exercise Price will correspond to the New Issue Price. In this case, within two (2) business days after the event to which it resulted from, the Company will issue a notice informing the new Exercise Price in force, being certain that the failure to perform such publication will not harm the rights of the Warrants holders to subscribe ON Shares or PN Shares based on such new Exercise Price. In compliance to the limit set forth in the option plan currently in force, the Exercise Price will not be reduced in case the Company issues ON Shares or PN Shares to attend call option plans granted to its managers, employees or individuals which provide services to the Company or to a company under its control, in accordance to the applicable laws in force, even in case the issue price of such shares is inferior to the Issue Price in force. Notwithstanding the foregoing, the Exercise Price will be reduced in case the Company issues ON Shares or PN Shares to attend call option plans granted to directors and officers which are Indirect Controllers (as defined in item 18 below). Furthermore, the Exercise Price 2 will not be reduced in the event any shareholder opt by Exercise Alternative 1 (as defined in item 8(b) below), which shall cause the issue of ON Shares or PN Shares for Exercise Price Issue on the conditions hereby approved will permit the Company to (a) strengthen its funding capacity in order to enable the expansion of its credit portfolio in the middle market; (b) diversify its funding; and (c) allow the participation of prestige global investors as PN Warrants holders. 8. Alternatives for Exercise of the Warrants: Subscription of ON Shares or PN Shares as a result of exercise of the ON Warrants or PN Warrants, as the case may be, may take place in one (1) of the two (2) alternatives at the choice of

5 5 the subscriber of the Warrants: (a) Exercise Alternative 1: within a period of thirty (30) days counted from the Meeting of the Board of Directors which will formalize the credit of the Warrants, in the terms of item 17 below ( Exercise Term 1 ), upon payment of an amount equivalent to (i) the Exercise Price 1 multiplied by (ii) the amount of subscribed Warrants, besides any unsubscribed shares, in cash and on demand, according to item 8.7 below. In this case, the confirmation of the share capital increase of the Company resulting from the exercise of ON Warrants and PN Warrants, as well as the actual issue of ON Shares or PN Shares, as the case may be, will be resolved in a Meeting of the Board of Directors to be carried out within three (3) business days after the end of the subscription term ( Subscription Date 1 ). The Warrants whose holders have chosen for the Exercise Alternative 1 which are not exercised until the Exercise Term 1 will loose its validity and will be automatically cancelled; or (b) Exercise Alternative 2: in the event the subscriber of the ON Warrants or PN Warrants elects for subscription of the ON Shares or PN Shares, respectively, at a later date, the subscriber will invest in a Deposit Certificates ( CDBs ) issued by Banco Daycoval within a period of fifteen (15) business days from the execution date of the Bulletin, having the features described in item 9 below, in an amount equivalent to (i) % of the Exercise Price 2 multiplied by (ii) the amount of subscribed Warrants, as per the proceeding indicated below in item 8.2 below; this alternative will permit subscription of ON Shares or PN Shares, as the case may be, in the following cases: (A) for exercise as from four (4) business days before March 31, 2011 and until four (4) business days before March 31, 2014, the subscription of ON Shares or PN Shares, as the case may be, shall take place on the last business day of each quarter in the years 2011, 2012 and 2013 and on March 31, 2014, according to the procedure indicated in item 8.1 below; or (B) in case of Early Redemption Events (as defined in item 16 below). Thus, pursuant to Exercise Alternative 2, subscription of ON Shares and PN Shares, resulting from the exercise of ON Warrants and PN Warrants, may take place on the following dates (besides the Early Redemption Events as defines in item 16 below): Year Dates 2011 March 31, 2011 June 30, 2011 September 30, 2011 December 29, March 30, 2012 June 29, 2012 September 28, 2012 December 28, March 29, 2013 June 28, 2013 September 30, 2013 December 30, March 31, Further, pursuant to Exercise Alternative 2, the Company will perform Meetings of the Board of Directors on the dates mentioned above to approve the issue of ON Shares and PN Shares which refer to the Warrants exercised in such period, as well as the share capital increase of the Company, within the limit of the authorized capital (each date of the Meeting of the Board of Directors, a

6 6 Subscription Date 2 and, together with Subscription Date 1, the Subscription Dates ). On December 30, 2013, the Warrants holder, which still holds funds invested in CDBs, shall inform the Company about the destination to be given to its funds on the date of March 31, 2014, that is, shall inform the Company if such owner will or will not use the funds obtained from the redemption of the CDBs for the subscription of ON Shares or PN Shares in case it chooses to exercise the Warrants it holds and without adverse effects to the possibility of using new funds for the exercise of the Warrants. The absence of pronouncement until such date will not prevent the exercise of the Warrants during such period, but will necessarily cause the redemption of the CDBs at its maturity date by Banco Daycoval, without the correspondent application of funds arising therefrom at the payment of the Exercise Price For purposes of item 8(b) above, the subscribers of the Warrants shall adopt one of the following alternatives in order to invest in the CDB (A) transfer of funds at the following current account: Banco Daycoval, agency , current account No , CNPJ / ; or (B) subscribers resident, domiciled or headquartered abroad using funds entered in the country by means of Resolution CMN 2689/00 shall settle the transaction through CETIP, as per the operational proceedings thereby adopted In the event of exercise of the Warrants due to the occurrence of an Early Redemption Event (as defined in item 16 below), the Meeting of the Board of Directors to approve the issue of ON Shares and/or PN Shares relating to the Warrants exercised in such period, as well as the share capital increase of the Company, within the limit of its authorized capital, must be performed within five (5) days after the first request to exercise the Warrants based on such Early Redemption Event and every ten (10) days from that moment on whenever a holder exercises a Warrant after the occurrence of the last Meeting of the Board of Directors. 8.4 For purposes of the Warrants, the dates in which any Meeting of the Board of Directors set forth in this item 8.3 above takes place shall also be considered a Subscription Date To exercise the Warrants according to Exercise Alternative 2, the respective owners will express their intent by means of a written request for exercise addressed to the Company (i) at least 4 (four) business days prior to the dates indicated in item 8 above on pain of postponing exercise of the Warrants to the immediately subsequent quarter, or (ii) after an Early Redemption Event (as defines in item 16 below). For all legal purposes and effects, the date the owner expresses its intent to exercise the Warrants will be that on which the respective request is received by the Company ( Exercise Date ). The Warrants whose Subscribers have chosen for the Exercise Alternative 2 which are not exercised not exercised up to the stipulated deadline (that is, March 31, 2014) will become void and be automatically cancelled The notice sent by the Warrants holder, which chooses the Exercise Alternative 1 or the Exercise Alternative 2, to exercise the subscription right shall contain: (a) name and qualification of the Warrants holder; (b) delivery

7 7 date of the request; (c) number of Warrants to be exercised (limited to the number of Warrants held by the holder on the date of delivery of the notice to the Company); (d) the payment form of the Exercise Price, in accordance to the options set forth in item 8.7 below, and, as the case may be, (e) the Early Redemption Event (as defined in item 16 below) in which such exercise is based on The Financial resources necessary for the payment of the Exercise Price shall be deposited in Banco Bradesco, before or on the correspondent Subscription Date, in national currency, in accordance to the following rules: (i) Exercise Alternative 1: the subscriber of Warrants must deposit the funds for the subscription and pay-in of the ON Shares and/or PN Shares, as the case may be, at the current account mentioned in item below; and (ii) (a) Exercise Alternative 2: the Warrants holder must choose between: in case the Warrants holder is the owner of the CDBs: (A) by means of redemption of the correspondent funds of the CDBs and the immediate transfer of the necessary sum for the payment of the Exercise Price to the current account mentioned in item below; and/or (B) by means of depositing the funds at the current account mentioned in item below; and/or (b) in case the Warrants holder is not the owner of the CDBs, by means of a transfer of the immediately available funds to the current account mentioned in item below For purposes of item 8.7 above, the subscribers of Warrants shall deposit the funds at the following current account: Banco Bradesco, agency , current account No , CNPJ / In the event the Warrants are exercised according to Exercise Alternative 2, the subscribed shares will be paid up in Brazilian currency and at sight on the Subscription Date 2, being certain, however, that the subscriber of the Warrants may simultaneously use more that one way of payment, according to the terms of item 8.7 above A Board of Directors meeting will be held quarterly, on the dates indicated in the chart of item 8 above, to state the new corporate capital within the limits of the Company s authorized capital, provided that the intention to exercise the Warrants, according to item 8.1 above has been stated during the period. The capital increase resulting from exercise of the Warrants will be subject to ratification by the Central Bank of Brazil; therefore, the PN Shares issued as a result of the capital increase in question may not be traded on the stock exchange or the over-the-counter market until said ratification The Company s fractional shares resulting from exercise of the Warrants by the respective holder will be grouped for the benefit of the holder, in such a way that the fractional shares of the Company inherent to all Warrants object of

8 8 exercise of more than one same holder in one same period of exercise are summed up and the holder receives a number of shares correspondent to the sum of full numbers and fractional applicable to each Warrant subject to exercise. 9. Characteristics of CDB and Procedures for Investment of Funds: (a) the CDB will yield 110% of the Rate DI-CETIP Over, calculated and disclosed by Cetip, in the period from the date of actual investment of funds and March 31, 2013, and, as from March 31, 2013 until March 31, 2014, it will yield 55% of the Rate DI-CETIP Over, calculated and disclosed by Cetip, subject to the following: (i) up to March 31, 2011, the CDBs yield will be incorporated to the CDB amount, less the taxes and (ii) as from March 31, 2011 the CDB yeld will be paid in a quarterly basis, less the taxes, as indicated in item (g) below, beginning the payment of the CDBs yield, in June 30, 2011; (b) it may not be subject to early redemption, except in the event mentioned in (d), (e) and (i) below; (c) it will fall due on March 31, 2014, in observance of (d), (e) and (i) below for early redemption; (d) on March 31, 2011 the CDBs will be partially redeemed in any amount exceeding the Exercise Price 2, of the total amount of Warrants initially subscribed; (e) it may be redeemed on an early, partial or full basis by the holder of the ON Warrants or PN Warrants, exclusively for subscription of ON Shares or PN Shares, respectively, as a result of exercise of the Warrants, and the amounts referring to the CDBs yield, less the taxes and other applicable expenses, will be credited to the shareholders pursuant to (g) below; (f) it will be in the book-entry system under the custody of Banco Daycoval; (g) the yield ascertained as from March 31, 2011 will be paid automatically and on a quarterly basis as from and including June 30, 2011, and thenceforth successively on the dates mentioned in item 8 above; (h) it will not be traded in Cetip; (i) it may be subject to early redemption in the occurrence of and Early Redemption Event (as defined in item 16 below); and (j) on December 30, 2013, the owner will inform the Company about the destination to be given to its funds on March 31, 2014 (that is, he will inform the Company whether (i) he will redeem the CDBs at its maturity date; or (ii) he will use the funds to subscribe for ON Shares or PN Shares), considering that, in the absence of such information, the CDBs will be redeemed in March 31, 2014, and the funds raised therefrom will not be used for the payment of the Exercise Price Banco Daycoval will from time to time send subscribers of the Warrants that opted for Subscription Alternative 2 statements showing the yield of the CDBs and other information related to the investment. The costs related to the registration of the CDBs before Cetip will be borne by the Company 10. Preemptive Right: Company shareholders holding shares on February 19, 2009 ( Registration Date ) will have a preemptive right for subscription of the Warrants, pursuant to Article 171, Paragraph 1(b) of Law 6404/76, as follows: (a) the preference of the owners of PN Shares will be exercised on the PN Warrants ratably to the current ownership interest held in the Company s capital stock on the Registration Date; and (b) the preference of the owners of ON Shares will be exercised on the ON Warrants, and will also apply to PN Warrants to the extent required to assure the same ratio as that held by common shareholders in the Company s capital stock as of the Registration Date.

9 Therefore, with the exception of those legally impaired, all the Company s shareholders are entitled to subscribe for the Warrants, with due regard for applicable provisions of the law and the Company s bylaws, as well as items 10.3 and 10.4 below, according to the terms resolved on herein, initiating as from publication of the Notice to Shareholders, related to the issue of Warrants, pursuant to the terms of item 19 below, the term will begin to run for exercise of the preemptive right to acquire the Warrants, for a period of thirty (30) days The Company s shareholders will be entitled to subscribe for ON Warrants or PN Warrants, as the case may be, for each ON Share or PN share, respectively, that they own on the Registration Date; fractional Warrants will not be accepted. Any adjustments in odd lots, at the time of the issuance of the Warrants, will be made automatically through the system The preemptive right to subscription of Warrants, the Warrants and any common or preferred shares to be issued as a consequence of the exercise of the warrants, as well as any CDBs to be issued by Banco Daycoval relating to the exercise of the Warrants (jointly, the Securities ) did not, and will not be registered under the 1933 United States Securities Act, as amended, nor the terms of any other American federal or state rules on titles and the capital market ( Rules ), and such Securities cannot be offered, sold, assigned as a guarantee, promised or, at any title, transferred in the United States of America or to US citizens unless upon proper registration, or otherwise based on an applicable exemption, or in case such Securities are not subject to the registration in the terms of the Rules The information contained herein does not constitute an offer of titles and the capital market and the Company is not requesting purchase offers of any Securities in the United States of America. The distribution of this document in other jurisdictions may also be legally restricted, and persons who may have access to this document shall acknowledge and respect such legal restriction. 11. Ex-Warrants: The shares acquired as of February 20, 2009, inclusive, will not be entitled to the preemptive right for subscription of Warrants. 12. Exercise or Assignment of Preemptive Right: The preemptive right for subscription of the Warrants may be exercised by evidencing the identity of the shareholder, signature and presentation of the Bulletin during the period of the exercise of the preemptive right identified in the Notice to Shareholders to be published, related to issue of the Warrants, pursuant to item 19 below. The Bulletin shall be requested at the locations to be informed in the Notice to Shareholders The shareholders with shares deposited within BM&FBovespa CBLC shall request to its respective custodians the cancellation of the custody of the preemptive rights for the subscription of Warrants to Banco Brdesco. Only after the receipt of such cancellation, Bradesco will issue the Bulletin.

10 When signing the Bulletin, the Warrants subscriber shall indicate its choice for Subscription Alternative 1 or Subscription Alternative 2, as mentioned in item 8 above The shareholders owning shares issued by the Company that wish to trade their subscription rights for ON Warrants or PN Warrants, as the case may be, may do so, and the shareholders whose shares are in custody of Banco Bradesco shall request the respective assignment of rights bulletin from this institution, which will be issued thereby or they shall give instructions to the broker of their preference to directly trade them on the Bovespa, up to the sixty (6 th ) business day prior to the deadline for exercise of the preemptive right Once the bulletin for assignment of rights has been issued, pursuant to the provisions set out in the above item, and upon actual disposal thereof, the corresponding statement shall be made on the overleaf of the assignment of rights bulletin, and the signature of the assignor shall be certified by a registry office The shareholders will express their interest in the unsubscribed shares on the corresponding Bulletin. 13. Trade of Warrants: Initially, the Warrants shall not be traded on the stock exchange or over-the-counter market; however, in the future the Company will file with the Brazilian Securities Commission - CVM and BM&FBovespa for registration to the trade of Warrants. If registration for the Warrants on stock exchange is approved, the Company will publish a Material Fact indicating the date trading will begin. In the period from issue of the Warrants and registration by CVM the Warrants may only be traded privately pursuant to applicable law and subject to the restrictions described in items 10.3 and 10.4 above. 14. Procedure for Subscription of Unsubscribed Warrants: Following termination of the period for exercise of the preemptive right, the shareholders that express their interest in unsubscribed warrants on the Bulletin shall have the period of two (2) business days following the announcement on the confirmed unsubscribed warrants for subscription. The unsubscribed warrants will be apportioned among said shareholders ratably to the subscribed amounts, with due regard for the limits stated on the subscription bulletin There will be no unsubscribed ON Warrants, since the controlling shareholder, Daycoval Holding Financeira S.A., which holds all the common shares of the Company, by means of a notice to the Company stated its intention to exercise in full its preemptive right in relation to the ON Warrants The maximum PN Warrants attributable to each subscriber will be established by multiplying the total number of unsubscribed PN Warrants by the percentage that is calculated by dividing the number of Warrants subscribed for by the respective subscriber by the total number of Warrants subscribed for by all the subscribers that have requested the right to the unsubscribed Warrants, with due regard for the fact that the maximum PN Warrants attributable to each subscriber in the second apportionment will be calculated according to the results of the first apportionment.

11 Each subscriber shall initially subscribe for the unsubscribed Warrants related to the PN Warrants subscribed for thereby when exercising his preemptive right, up to the maximum number of unsubscribed PN Warrants to which the respective subscriber is entitled, calculated pursuant to item 14.2 above, in a number to be established by multiplying the total unsubscribed PN Warrants by the percentage reached by dividing (i) the number of Warrants, subscribed by the respective subscriber that has requested the right to unsubscribed Warrants by (ii) the total Warrants subscribed by all subscribers that have requested the right to unsubscribed Warrants, it being certain that the controlling company, Daycoval Holding Financeira S.A., and Messrs. Morris Dayan, Salim Dayan and Carlos Moche Dayan, expressed in the notice addressed to the Company, their intention to subscribe for all the unsubscribed Warrants The Company may arrange for one or more apportionments of unsubscribed Warrants, and sell any balance of unsubscribed Warrants on the stock exchange, pursuant to the provisions of article 171, paragraph 7 (b) of Law 6404/ Documentation and Customer Service Location: The documentation required for subscription of the Warrants and assignment of the subscription rights will be informed in the Notice to Shareholders to be published, related to issue of the Warrants, pursuant to item 19 below. 16. Early Redemption of the CDB and Early Exercise of he Warrants: The CDBs may be total or partially redeemed early and/or the Warrants may be promptly exercised, at the discretion of their respective holders, regardless of the terms established in item 8 above, upon the occurrence of any of the following events ( Early Redemption Events ): (a) the performance of a Change of Control, as defined in item 16.1 below; (b) the failure of the Company to pay, on the maturity date, any portion of the principal or of the yield of any of the CDBs, as long as the default lasts for five (5) days or more; (c) the approval of any change in the by-laws of the Company which eliminates or adversely affects the tag along rights to which the holders of preferred shares of the Company are currently entitled to; (d) the issuance by the Central Bank of a final administrative decision which is contrary to the subscription of PN Shares or if the Central Bank refrains from approving the subscription of PN Shares within three (3) months counted from the request for the correspondent Subscription Date (that is, considering, for each period, each subscription of PN Shares); (e) the issuance by the CVM/BM&FBovespa of a final administrative decision which is contrary to the registration of PN Warrants or if the CVM/BM&FBovespa refrains from granting the registration of PN Warrants within twelve (12) months counted from the credit date of the Warrants; (f) the commencement, at any time, of a public offer for the acquisition of shares of the Company, or if the Company, the Controlling Shareholder (as defined in item 18 below) or any person acting on its behalf, at any time, performs or is liable to perform (in compliance with the provisions of the by-laws of the Company or the applicable laws in force, including the rules of the BM&FBovespa) a public offer for the acquisi-

12 12 tion of shares of the Company or of its successors; being agreed that in such cases the Company and the Controlling Shareholder will take and cause to be taken the necessary measures, under their control, and observed the need of Central Bank s approval of the capital raise of the Company as a consequence of the exercise of the Warrants, to allow the holders of PN Warrants to exercise their PN Warrants and to participate in the offer, and shall also inform the holders of PN Warrants about the offer within the shorter of the following terms: (i) with a minimum lead time of thirty (30) days, or (ii) within a reasonable timeframe which is sufficient to allow the holders of PN Warrants to exercise the PN Warrants or to receive any other benefit from the ownership of PN Shares which are issued as a result of the PN Warrants in the public offer; (g) the publication, by the Company, of a notice to the market informing its intention to declare dividends and/or interest on capital in an amount which represents (as a consequence of the sum of dividends and/or interest on capital distributed during the same fiscal year or in one sole distribution) the distribution of dividends and/or interest on capital in an amount higher than 45% (forty five percent) of the net profit in any fiscal year of the Company (except relating to the exercise of 2008 in which there was a distribution of dividends and corporate interest by the Company higher than this range), event which shall be informed in the notice to market that: the owners of the Warrants, together with the Company s shareholders, at the same date of the publication of the notice to market, shall have the right to receive the dividends and/or interest o capital to be distributed by the Company in such distribution and, as from this moment, provided that the owners of the Warrants express their intention to exercise their Warrants within the term of 30 (thirty) days from the publication of such notice to market and observed the need of Central Bank s approval of the capital raise of the Company as a consequence of the exercise of the Warrants; (h) the publication of the material fact of the Company related to the delisting of its shares or the approval of its spin-off, merger or any other way of corporate restructuring, except if such restructuring involves exclusively the Company and its Subsidiaries; and (i) the default by the Company, of any obligation set forth in the Investment Agreement (as defined in item 18 below), without the correction of such default within the term of 30 (thirty) days, or in case any of the events mentioned in Clause 7.2 of the Investment Agreement is verified (as defined in item 18 below) For purposes of item 16 above, Change of Control shall mean any of the events: (a) If the Indirect Controllers (as defined in item 18 below), their spouses, descendents and heirs, as long as they are relatives of the Indirect Controllers up to the forth degree (the group of these individuals is hereinafter referred to as Dayan Family ), at any time and for any reason, refrain from being direct or indirect owners of an equity interest of at least fifty-one percent (51%) of the voting capital or of the economic benefit (including, in the economic benefit, the right to receive a proportional portion of dividends, profits, results from the settlement and other similar amounts distributed by the Company) of the Company (such calculation shall consider the total number of shares that the Company would have in case all shares subject to issuance based in any convertible instrument or which grants its respective holders the right to subscribe shares in

13 13 the Company had been fully issued); (b) If the Dayan Family refrains from holding the direct or indirect Control of the Company or if in any way the Dayan Family looses or ceases to exercise the power to elect, direct or indirectly, most of the directors of the Company or, direct or indirectly, most of the directors of the Controlling Shareholder; for purposes of this item b, Control means (i) control, as defined in articles 116 and 243, 2 nd, of the Brazilian Corporate Law, or (ii) the actual or legal exercise power of, direct or indirectly, manage the corporate activities and guide the management of an legal entity, being understood that such Control is presumed in relation to any person, group of persons signors of a shareholders agreement or one person with common control of other person, if such person or group of persons is the owner of shares or eights over shares of issuance of the Company which grants him the majority of votes on the three last Shareholders Meeting of the Company, even if such person is not the holder of shares representing more than 50% (fifty percent) of the voting capital; or (c) The occurrence of a change, disposal or acquisition of control, as defined in accordance to the provisions of law or in the by-laws of the Company Upon the occurrence of any of the events mentioned in this item 16, the Company shall cause the publication of a relevant fact in the newspapers normally used by it, communicating the occurrence and informing the Warrants holders about the acquisition of their right to redeem early, total or partially, the CDBs and/or to immediately exercise the Warrants. 17. Credit of Warrants and Subscription Receipts: The Warrants will be credited within three (3) business days following the Board of Directors Meeting that ratifies issue of the Warrants, which will be held within 5 (five) business days following the subscription of all unsubscribed Warrants or sale in the stock exchange, pursuant to item 14 above. In this sense, the shareholders that subscribed for the Warrants by signing the Subscription Bulletin will receive subscription receipts for the Warrants ( Subscription Receipts ), which will be replaced following the date of ratification of the issue of Warrants as mentioned above. The Subscription Receipts will only entitle their owners to receive the Warrants (at a 1:1 ratio), following the proper ratification. Therefore, similar to the Warrants, the Subscription Receipts will not be traded on stock exchange or over-the-counter market. The Company will publish a notice to the market disclosing the ratification of the Warrants issue, and indicating the date on which the Subscription Receipts will be cancelled and replaced by the Warrants In the same way, subscription receipts of ON Shares or PN Shares, as the case may be, will be issued to the holders of ON Warrants or PN Warrants after the respective exercise ( Share Subscription Receipts ) which will be replaced after the ratification by the Central Bank of the minutes of the Board of Directors Meeting which resolves on the capital increase of the share capital of the Company as a result of the exercise of the ON Warrants and PN Warrants. The Share Subscription Receipts will have the following features: (a) may be traded in stock exchange; and (b) shall only ascribe to its holders the right to receive the ON Shares or PN Shares (on an equitable basis of 1:1), as the case may be. Banco Daycoval will publish a notice to the market disclosing the ratification by Central Bank of such capital increase, as well as, indicating a date in which the Share Subscription Receipts will be cancelled and replaced by ON Shares or PN

14 14 Shares, as the case may be. In the event Central Bank does not ratify the minutes of the Board of Directors Meeting which resolves on the capital increase of the share capital of the Company by means of issuance of ON Shares and PN Shares as a result of the exercise of the Warrants, within three (3) months as from the Subscription Date, by means of requirement to any holder of the Share Subscription Receipt issued to the holders of the Warrants that were already exercised, the Company shall (i) cancel the increase of capital relative to the portion which subscribers have requested, and (ii) return the amounts used in the payment of the ON Shares and/or PN Shares, as the case may be, adjusted by the SELIC s variation accrued since the Subscription Date until the date in the funds were effectively returned by the Company; such refunding shall occur within five (5) business days as from the respective requirement. 18. Institutional Investors: the Company executed with the investors International Finance Corporation IFC, three investment funds managed by Cartesian Capital Group, LLC and Wolfensohn Capital Partners Holdings II, L.P. ( Institutional Investors ), and with Daycoval Holding Financeira S.A. ( Controlling Shareholder ), Mr. Sasson Dayan, Morris Dayan, Salim Dayan and Carlos Moche Dayan (the Indirect Controllers ), a certain Investment Agreement ( Investment Agreement ) by which said Institutional Investors undertook to jointly subscribe for the total of 50,322,580 (fifty million, three hundred and twenty two thousand, five hundred and eighty) PN Warrants, according to Subscription Alternative 2. The Controlling Shareholder, and Messrs. Morris Dayan, Salim Dayan and Carlos Moche Dayan, undertook in the Investment Agreement to fully exercise their preemptive right with regard to the ON Warrants, to partially assign to the Institutional Investors their right to subscribe for the PN Warrants, and to subscribe for all the unsubscribed PN Warrants to ensure full subscription of the issue. The Company shall maintain the Investment Agreement filed in its head offices, at the disposal of its shareholders and shall deliver a copy to CVM, as eventual periodic information (IPE). 19. Disclosure to the market: The Company will disclose issue of the Warrants to the market by publication of the Notice to Shareholders, also indicating any other possible steps that should be taken by the Company and/or shareholders to formalize the transaction. 20. Other procedures: The Executive Office is authorized to take all other suitable procedures for issue of the Warrants and implementation of other acts related to the transaction hereby approved, including the signing of all the documents required to its formalization, including the Investment Agreement and all the instruments thereby referred to, and to make the publications established by law. CLOSING: There being no further issues to discuss, the Chairman adjourned the meeting for the time required to draw up these minutes in the proper book, which were subsequently read, approved and signed by all the attendees. São Paulo, February 19, (sgd) Sasson Dayan Chairman and Gustavo Henrique de Barroso Franco - Secretary. Attendee Board Members: Sasson Dayan, Gustavo Henrique de Barroso Franco and Marco Antonio Bologna.