Lupatech S.A. (LUPAY: OTC Link) | Minutes of the Extraordinary General Meeting Held on October 14, 2011

Minutes of the Extraordinary General Meeting Held on October 14, 2011

Oct 14, 2011

OTC Disclosure News Service

Sao Paulo, Brazil –

This is a free translation of the original document in Portuguese. Inthe case of any conflict, the Portuguese version will prevail.

 

LUPATECH S.A.

 

Corporate Taxpayer’s ID(CNPJ/MF): 89.463.822/0001-12

Company Registry (NIRE):43300028534

Publicly Held Company – NovoMercado

 

Minutes of the Extraordinary General Meeting

Held on October 14, 2011

 

1.     Date, Time andLocation:Held on October 14, 2011, at11:00 a.m., at the Company’s headquarters, located at Rua Dalton Lahn dos Reisnº 201, in the city of Caxias do Sul, in Rio Grande do Sul State.

 

2.     Call andAttendance: The Call Notice waspublished in the Valor Econômico and Diário Oficial do Estado do Rio Grande doSul newspapers, on October 04, 05 and 06, 2011, respectively. In view of the presence of shareholders representing 48,31%(forty-eight point thirty-one percent) of the Company’s capital stock, all withvoting rights, as per the respective Shareholder Attendance Book, theExtraordinary General Meeting was installed.

 

3.     Presiding: Nestor Perini, Chairman; Jean MatanaMoreira, Secretary.

 

4.     Agenda and Resolutions: In view of the presence of shareholders representing 48,31%(forty-eight point thirty-one percent) of the capital stock, all with votingrights, as per the Shareholders’ Attendance Book, pursuant to article 125 ofLaw 6404, of December 15, 1976, as amended, the meeting deliberated andapproved, in second call, by majority vote, with the indicated abstentions thefollowing:

 

I.    To amend the Company’s Bylaws (“Bylaws”), asper the wording in Attachment I of the Management’s Proposal, in order to:

 

(a) adjust the Bylaws to the newrules determined in the BMFBOVESPA’s Novo Mercado Listing Regulations(“Novo Mercado Listing Regulations”) in effect as of May 10, 2011, regardingthe “minimum mandatory clauses”, so as to;

 

(a.1) includeparagraph 1 in article 1 of the Bylaws to establish that the Company, itsshareholders, management and members of the Fiscal Council are subject to NovoMercado Listing Regulations;

 

(a.2) includeparagraph 2 in article 1 of the Bylaws to establish that the provisions setforth in Novo Mercado Listing Regulations will prevail over statutoryprovisions should there be any loss of rights by the recipients of the publictender offers referred to in these Bylaws;

 

(a.3) adjust thewording of paragraph 1 (new numbering) of article 5 of the Bylaws to expresslyestablish that all the Company’s shares are registered and that the Company’scapital stock is fully subscribed and paid in;

 

(a.4) amend article17, sole paragraph, of the Bylaws to express that the investiture of themanagers is subject to the previous signature of the Instrument of Investitureand shall comply with the applicable legal requirements;

 

(a.5) amend article20, caput, of the Bylaws to excludethe wording that addresses the possibility of a unified term of office of threeyears for the members of the Board of Directors;

 

(a.6) adjust thewording of paragraph 1 of article 20 of the Bylaws to establish that at least20% of Board members must be Independent as defined in paragraph 3 of theBylaws and the Novo Mercado Listing Regulations, and should be expresslydeclared as such by the general meeting that elects them;

 

(a.7) includeparagraph 2 in article 20 of the Bylaws to establish that, as a result ofcompliance with the percentage referred to in paragraph 1 of article 20, thenumber of Board members is a fraction, such number will be rounded to a wholenumber (i) rounded up, when the fraction is equal or higher than zero pointfive (0.5), or (ii) rounded down, when the fraction is lower than zero pointfive (0.5);

 

(a.8) amendparagraph 3 of article 20 of the Bylaws to adjust the definition of IndependentBoard member to the provision in the Novo Mercado Listing Regulations;

 

(a.9) includeparagraph 4 in article 20 of the Bylaws to establish that the positions ofChairman of the Board of Directors and Chief Executive Officers or theCompany’s main executive cannot be accumulated by the same person;

 

(a.10) include newitem (item “xi”) in article 23 of the Bylaws to establish the need formanifestation by the Board of Directors on any public tender offer whose objectis the Company’s shares;

 

(a.11) amendarticle 34, sole paragraph, of the Bylaws to express that the investiture ofthe members of the Fiscal Council is subject to the previous signature of theInstrument of Investiture and shall comply with the applicable legalrequirements;

 

(a.12) Amendarticle 40, caput and sole paragraph,of the Bylaws, so as to adjust the defined terms to the provisions in the NovoMercado Listing Regulations;

 

(a.13) amendarticle 41, (ii), of the Bylaws to include the defined terms “Sale of Control”and “BMFBOVESPA” to establish that the Selling ControllingShareholder shall attach documentation that proves the amount attributed to theCompany to suppress the definition of “Attributed Value”, as well as tosuppress the provision that the amount to be offered in the public offeringestablished in this item (ii) will be the highest between attributed value andeconomic value;

 

(a.14) amendarticle 42, caput, of the Bylaws toexclude the provision that only those who already own Company shares andacquire the Power of Control will be obliged to carry out the public tenderoffer;

 

(a.15) amendarticle 42, (ii), of the Bylaws to establish that the acquirer, at a publictender offer, shall pay the difference between the offer price and the averageamount paid per share on the stock exchange in the 6 previous months;

 

(a.16) amend articles43 and 44, caput, of the Bylaws toexclude the provision that the statement of consent shall be immediatelysubmitted to the Bovespa, pursuant to the Novo Mercado Listing Regulations;

 

(a.17) amendarticle 44, sole paragraph, of the Bylaws to replace “Company” with “Company”and “Buyer” with “Acquirer” with these terms defined in the Bylaws. Inaddition, express that the controlling shareholders’ statement of consent areprovided for by the Novo Mercado Listing Regulations;

 

(a.18) amendarticle 45, caput, of the Bylaws toinclude that the public tender offer can be made by the Controlling Shareholderor by the Company, as well as expressly state that the applicable legal rulesand regulations must be complied with;

 

(a.19) amendarticle 46, caput (new numbering) ofthe Bylaws to include the term “Controlling shareholder(s)” instead of”controllers”;

 

(a.20) amendarticle 47 (new numbering) of the Bylaws to adjust its wording and definitionsto the provision in the Novo Mercado Listing Regulations, as well as establishthat in case the Company is delisted from the Novo Mercado as a result ofcorporate restructuring in which the resulting company’s securities are notlisted for trading in this segment, the Controlling Shareholder shall carry outthe public tender offer if these securities are not listed for trading in theNovo Mercado within 120 days as of the date of the General Meeting thatapproved said operation;

 

(a.21) includeparagraph 1 in article 47 (new wording) of the Bylaws to establish that shouldthere be no Controlling Shareholder, if the Company’s delisting from the NovoMercado is accepted so that the securities it issues are registered for tradingoutside the Novo Mercado, or due to a corporate restructuring operation, inwhich the resulting company’s  securities are not accepted for trading at the Novo Mercado within onehundred and twenty (120) days as of the date of the general meeting thatapproved said operation, the delisting is conditioned to  the public tender offer in the same conditionsset forth in the caput of article 47;

 

(a.22) includeparagraph 2 in article 47 (new wording) of the Bylaws to establish that saidgeneral meeting shall establish the person(s) responsible for conducting thepublic tender offer, who, attending the meeting, shall expressly undertake theobligation of carrying out the offer;

 

(a.23) Includeparagraph 3 in article 47 (new wording) of the Bylaws to establish that shouldno responsible party be defined for conducting the public tender offer, in caseof corporate restructuring operation, in which the resulting company’ssecurities are not accepted for trading at the Novo Mercado, shareholders thatvoted in favor of the corporate restructuring will be in charge of conductingsaid offer;

 

(a.24) amendarticle 48 (new numbering) of the Bylaws to establish that the Company’sdelisting from “Novo Mercado” due to the non-compliance with the obligationsincluded in the Novo Mercado Listing Regulations is conditioned to theperformance of a public tender offer, at least, at the economic value of the sharesto be calculated at an appraisal report referred to in Article 46, incompliance with applicable legal rules and regulations;

 

(a.25) includeparagraph 1 in article 48 (new numbering) of the Bylaws, to establish that theControlling Shareholder shall carry out the public tender offer of sharesestablished in caput of article 48;

 

(a.26) includeparagraph 2 in article 48 (new numbering) of the Bylaws to establish thatshould there be no Controlling Shareholders and the delisting from the NovoMercado mentioned in the caput occursas a result of a general meeting resolution, shareholders who have voted infavor of the resolution that implied in the respective non-compliance shallcarry out the public tender offer set forth in the caput of article 48;

 

(a.27) includeparagraph 3 in article 48 (new numbering) of the Bylaws to establish that shouldthere be no Controlling Shareholder and the delisting from Novo Mercado setforth in the caput of article 48occurs due to an act or fact of the Management, the Company’s administrators shallcall a  general meeting whose agenda willbe the resolution on how to remedy the non-compliance with the obligationscontained in the Novo Mercado Listing Regulations or, if itis the case, to resolve on the Company’s delisting from the Novo Mercado;

 

(a.28) includeparagraph 4 in article 48 (new numbering) of the Bylaws to establish thatshould the general meeting mentioned in paragraph 3 of article 48 resolve onthe Company’s delisting from the Novo Mercado, said meeting shall define theperson(s) responsible for conducting the public tender offer set forth in the caput, who, attending the meeting, shallexpressly undertake the obligation of carrying out the offer;

 

(a.29) eliminatechapter “XIII – Diffuse Control” to reflect the alterations set forth in theNovo Mercado Listing Regulations;

 

(a.30) amendarticle 50 (new numbering) of the Bylaws so as to include the terms “administrators”instead of “Administrators” and “CVM” instead of the “Brazilian Securities andExchange Commission” as a result of its definition, or lack thereof, asapplicable in the Bylaws and to include that the Market Arbitration Chamberwill solve any and all disputes or controversies that may arise, as well as toinclude the Regulation of Sanctions in the list of applicable rules;

           

            Shareholder José Luiz Tavares Ferreira abstained himself regarding this matter.

 

(b) Adjust the wording of article1 of the Bylaws to define the term “Company”;

 

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(c) adjust the wording of article5 of the Bylaws to include the Company’s current capital stock, pursuant to thecapital increase resulting from the conversion of fourteen (14) debenturesissued in the scope of the 2nd Issue of Debentures Convertible intoCompany shares, with Floating Charge for Private Placement, duly ratified bythe Company’s Board of Directors’ Meeting held on May 20, 2011;

 

(d) include paragraph 2 in article5 of the Bylaws to establish that, within the authorized capital limit in paragraph1 of article 5, the Board of Directors may resolve on the issue of debenturesconvertible into shares;

 

(e) amend article 15, VIII, of theBylaws, to exclude the definition of “Novo Mercado” and “BMFBOVESPA” asthese terms are now defined in paragraph 1 of article 1 of the Bylaws;

 

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(f)  amend the wording of article20 of the Bylaws to exclude the mention that the members of the Board ofDirectors should be Company shareholders;

 

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(g) amend article 23, VIII, of theBylaws to include the resolution on the issue of debentures convertible intoshares as a competence of the Board of Directors;

 

       Shareholders José LuizTavares Ferreira, Public Employees Retirement Association of New Mexico, EatonVance Parametric Tax-Managed Emerging Markets Fund; Eaton Vance ParametricStructured Emerging Markets Fund; and, Eaton Vance Collective Investment TfeBen Plans Em Mq Equ Fd;  has votedagainst this matter.

 

(h)  amend article 23, IX, of theBylaws to exclude the provision that the Board of Directors can only resolve onthe issue of simple debentures with no real guarantee, in view of Law 12431, ofJune 24, 2011;

 

       Shareholders José LuizTavares Ferreira, Public Employees Retirement Association of New Mexico, EatonVance Parametric Tax-Managed Emerging Markets Fund; Eaton Vance ParametricStructured Emerging Markets Fund; and, Eaton Vance Collective Investment TfeBen Plans Em Mq Equ Fd;  has votedagainst this matter.

 

(i)   amend article 23, XIII, ofthe Bylaws to include “CVM” instead of “Brazilian Securities and ExchangeCommission”, as this term was defined in article 23, XII, of the Bylaws;

 

Shareholder Eduardo Lobato Salles Moulin Louzada abstained himselfregarding this matter.

 

(j)   amend article 24 of theBylaws to include the provision that executive officers are allowed toaccumulate positions;

 

Shareholder Eduardo Lobato Salles MoulinLouzada has voted against this matter.

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(k) amend article 49, caput(new numbering) of the Bylaws to include that the term Acquiring Shareholder isdefined below;

 

Shareholder José Luiz Tavares Ferreira abstained himself regarding this matter.

 

(l)  amend article 49, paragraph 1(new numbering) of the Bylaws to include the definition of AcquiringShareholder;

 

Shareholder José Luiz Tavares Ferreira abstained himself regarding this matter.

 

(m) amend article 49, paragraph 3 (new numbering) of the Bylaws toinclude that CVM Instruction 361, of March 5 2002, was amended;

 

Shareholder José Luiz Tavares Ferreira abstained himself regarding this matter.

 

(n)  amend article 49, paragraph 6(new numbering) of the Bylaws to eliminate the provision that the public tenderoffer mentioned in this article is regulated by the CVM;

 

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(o) amend article 50, sole paragraph (new numbering) of the Bylaws to eliminatethe express mention of the item of the Arbitration Regulation that addressesthe formation of the court as said regulation is being reviewed by theBMFBOVESPA and its numbering will be changed;

 

ShareholdersEduardo Lobato Salles Moulin Louzada and José Luiz Tavares Ferreira abstained themselves regarding this matter.

 

(p) substitute the reference to“BOVESPA” by “BMFBOVESPA” in the following provisions of the Bylaws: 41, (ii);49, caput and paragraphs 3, (ii), and 4 (all according to the new numbering proposed);

 

(q) substitute the reference to“company” by “Company” in the following provisions of the Bylaws: article 16,sole paragraph and 49, paragraph 4 (all according to the new numberingproposed), as this term was defined in article 1 of the Bylaws;

 

Shareholder Eduardo Lobato Salles Moulin Louzada abstained himselfregarding this matter.

 

(r)   substitute the reference to“Management” by “management” in article 16, caput, as this term was not definedin the Bylaws;

 

Shareholder Eduardo Lobato Salles Moulin Louzada abstained himselfregarding this matter.

Shareholder José Luiz Tavares Ferreira has voted against this matter.

 

(s) exclude paragraph 13 of formerarticle 52 of the Bylaws as it is a transitory provision at the time of theCompany’s Initial Public Offering;

 

Shareholder José Luiz Tavares Ferreira abstainedhimself regarding this matter.

 

(t)   exclude former article 56 ofthe Bylaws as it is a transitory provision at the time of the Company’s InitialPublic Offering;

 

Shareholder José Luiz Tavares Ferreira abstainedhimself regarding this matter.

 

(u) correct cross references inarticles 23, XXIV; 41, (ii); 45, caput;46, caput; 49, paragraphs 2, 3, 4, 5and 12 (in accordance with the new numbering proposed);

 

Shareholder José Luiz Tavares Ferreira abstainedhimself regarding this matter.

 

(v) adjust the numbering of theBylaws as a result of the changes proposed above; and,

 

(x) to consolidate the Bylaws, in accordance with the changes proposedin item I of the agenda, which shall read as in Attachment I.

 

5.     CLOSURE: There being no further business on theagenda, the meeting was adjourned and these minutes were drawn up, read,approved and signed by all present. Caxias do Sul, September 30, 2011. NestorPerini, Chairman; Jean Matana Moreira, Secretary; Attending Shareholders: CollegeRetirement Equities Fund; The Pension Reserves Investment Manag Board; FordMotor Co Defined Benef Master Trust; Eaton Vance Parametric Tax-ManagedEmerging Markets Fund; Legg Mason Global Funds FCP (Luxembourg); State St B andT C Inv F F T E Retir Plans; Eaton Vance Parametric Structured Emerging MarketsFund; Eaton Vance Collective Investment Tfe Ben Plans Em Mq Equ Fd; SpdrSP Emerging Markets Small Cap Etf; Ssga Msci Emerging Mkt Small Ci NonLending Common Trt Fund; State of California Public Employees Ret.; NorgesBank; Fidelity Investment Trust Latin America Fund; Fidelity Latin AmericaFund; Vanguard Ftse All-Wd Ex-Us Small-Cap Index Fd, a Srs of Vngrd Int EquityIndex; Vanguard Total International Stock Index Fd, a Se Van S F; RailwaysPension Trustee Company Limited; JPMorgan Funds; Public Employees RetirementAssociation of New Mexico; The JPMorgan Global Emerging Markets Funds, LLC. (p.a. Dr. George WashingtonTenório Marcelino); Lupapar Negócios e Empreendimentos Ltda.; Nestor Perini;Gilberto Pasquale da Silva; Sergio Feijão Filho; Eduardo Lobato Salles MoulinLouzada; José Luiz Tavares Ferreira. (p.a. Dr. Jean Matana Moreira, Jucelino deCarli e Nilso Picinini); Fundação Petrobras de Seguridade Social – Petros. (p.a.Dr. Cristiano Borges Castilhos).

 

 

 

Thisis a free English translation of the minutes in the company’s records.

 

_____________________

Jean Matana Moreira

Secretary

Attachment A – Consolidated Bylaws

 

BYLAWSCONSOLIDATED AT THE EXTRAORDINARY GENERAL MEETING HELD ON OCTOBER 14, 2011

 

BYLAWSOF LUPATECH S.A.

 

I. -NAME, HEADQUARTERS, JURISDICTION AND DURATION

 

Article 1. LUPATECH S.A.(“Company”) is a corporation which shall be ruled by these present Bylaws andapplicable laws.

Paragraph 1. With theCompany’s listing in the Novo Mercado special segment  of the BMFBOVESPA S.A. – Securities,Commodities and Futures Exchange (“Novo Mercado” and “BMFBOVESPA”,respectively), the Company itself, its shareholders, Management and members ofthe Fiscal Council, when installed, will be subject to the provisions set forthin the Novo Mercado Listing Regulations of BMFBOVESPA (“Novo MercadoListing Regulations”).

Paragraph 2. The provisionsset forth in the Novo Mercado Listing Regulations will prevail over statutoryprovisions should there be any loss of rights by the recipients of the publictender offers referred to in these Bylaws.

Article 2. The Company isheadquartered and has jurisdiction in the city of Caxias do Sul, State of RioGrande do Sul, located at Rua Dalton Lahn dos Reis, 201 and the Board ofExecutive Officers, at its discretion, may create or extinguish branches andany other establishments, in the country or abroad.

Sole Paragraph. The Companyhas nine (9) subsidiaries, as follow:

(i) Subsidiarylocated in the city of Americana, State of São Paulo, located at Rua Dom PedroII, 1432, Nova Americana, zip code 13.466-000, under the Corporate Taxpayer’sID: 89.463.822/0005-46 and hereinafter referred to as Lupatech S.A. – MNAAmericana;

(ii)       Subsidiary locatedin the city of Jacareí, State of São Paulo, located at Rua Rodolfo Anselmo,385, Jardim Emília, zip code 12.321-510, under the Corporate Taxpayer’s ID:89.463.822/0006-27 and hereinafter referred to as Lupatech S.A. – MetalúrgicaIpê;

(iii)      Subsidiary locatedin the city of São Leopoldo, State of Rio Grande do Sul, located at Rua EugênioSchardong, 45, Rio Branco, zip code 93.040-380, under the Corporate Taxpayer’sID: 89.463.822/0004-65 and hereinafter referred to as Lupatech S.A. – CSL;

(iv) Subsidiary locatedin the city of Nova Odessa, State of  SãoPaulo, located at Rodovia Anhanguera, Km 119, towards countryside,  zip code 13.460-000, under the CorporateTaxpayer’s ID: 89.463.822/0007-08 and hereinafter referred to as Lupatech S.A.– MNA Nova Odessa;

(v)  Subsidiarylocated in the city of São Paulo, State of São Paulo, located at Rua Pequetita, 145, conjunto 44, Vila Olimpia, zipcode 04.552-060;

(vi) Subsidiary locatedin the city of Feliz, State of  RioGrande do Sul, located at Rua Avenida Voluntários da Pátria, 480, Centro, zipcode 95.770-970,  under the CorporateTaxpayer’s ID: 89.463.822/0008-99 and hereinafter referred to as Lupatech S.A.– Fiber Liners;

(vii) Branch located in the city of Iperó, state ofSão Paulo, at Avenida Benedito Germano de Araújo, 100, Distrito Industrial, CEP18.560-000, corporate taxpayer’s (CNPJ/MF) 89.463.822/0009-70, and hereinafter referred to as Lupatech S/A –Tecval;

(viii) Subsidiary located in the city of Veranópolis, state of Rio Grande doSul, at Rua Casemiro Ecco, n.º 415, parte, Vila Azul, zip code 95.330-000, corporatetaxpayer’s (CNPJ/MF) 89.463.822/0010-03, and hereinafter referred to as S. A. – Valmicro; and

(ix) Subsidiary located in the city of São Paulo, state of de São Paulo, atRua Pequetita, n.º 145, parte, 7º floor, conjunto 73, Vila Olímpia, zip code04.552-060, under the Corporate Taxpayer’s ID: 89.463.822/0011-94, and hereinafter referred to asLupatech S. A. – Valmicro São Paulo.

Article 3. The Company’sduration is indeterminate.

 

 

 

II. -COMPANY’S PURPOSES

 

Article4. The Company’s purposes are: The Company’s purposes are: (a) themanufacturing and industrialization of parts, components, systems and molds,obtained through casting, injection, sintering, metallurgy and other processes;valves, regulators, taps, actuators, industrial automation systems and otherproducts for controlling fluids and steam; as well as its accessories, such asparts, molds obtained through the process of casting, injection, sintering,metallurgy and other; industrial automation systems for installation inequipment, machinery, devices and pipes for steam, water, gas, oil and fluidsin general, equipment and components for industrial use and in the fields ofoil and gas, and casting activities; (b) project development,industrialization, manufacturing, trade and covering services through painting, boiler shop, pipeline, welding,painting, assembly, surface treatment, electrical and mechanical maintenance,general maintenance, hydrostatic test, equipment and pipeline inspection,vibration control, machining in general, industrial escalation and climbing;(c) the industry, trade, import and export of ropes, cables and similar andcomplementary items, such as terminations, links, thimbles, rollers,polyurethane, chains, bonds, anchors, floaters and similar items, equipment andmachinery employed in this line of business, as well as raw materials andsecondary inputs; (d) the exportation, as an exporting trading company, asprovided by Decree Law  1894/81, ofropes, cables and similar and complementary items, such as terminations, links,thimbles, rollers, polyurethane, chains, bonds, anchors, floaters and similaritems, as well as equipment and machinery employed in this line of business,acquired from third parties; (e) the trading, whether in Brazil or abroad, ofthe products mentioned in items (a) and (c) above, whether manufactured by thecompany itself or by third parties, as well as its parts and components; (f)the import and export of raw materials, goods, products, services, parts andcomponents, as well as industrial machinery, devices and equipment that may beused in the industrialization of the products referred to in items (a) and (c)above; (g) the provision of agency services, on its own account and throughthird parties of machinery, parts and equipment; technical support for itsproducts in Brazil and abroad; tests with metallic and synthetic equipment;repairing of polyester cables; as well as the provision of casting and recoveryservices of scrap and nonferrous metals; renovating, repair, maintenance andrestoration of industrial valves, accessories, and regulators, machining,modeling and tool room; and CAD and CAM projects, polymeric resins in primaryforms or finished products; any works related to access by rope, shallow dive;representation, distribution and manufacturing of unfinished and finishedindustrial products, and raw material, and also equipment and industrialmachinery; (h) manufacturing and sale of pipes, accessories and glass fibercoating, as well as services for third parties covering these products; (i) thepurchase and sale of technology and (j) the interest in other companies,regardless of its form, whether as a partner or shareholder, as a way or not ofcarrying out the Company’s purposes, or to benefit from tax incentives; (k)lease of equipment in general; (l) operation and maintenance services ofindustrial plants, production and facilities, operation and maintenance ofvessels and equipment, direct or indirectly related to oil and natural gasexploration and production; (m) chemical cleanliness, supply of specializedlabor, civil engineering services in general; (n) manufacturing, trading andimport of machinery, equipment, parts and products for the oil industry, andoil prospecting and extraction, including parts, installation, restoration andmaintenance of machinery and equipment for oil prospecting and extraction; (o)provision of machining and advisory services and execution of technicalservices for the oil industry; (p) service of inspection and maintenance ofpipeline and equipment of the naval and oil industries, covering services ofparts and pipes, services of personnel training and certification, engineeringprojects, chemical decontamination, services of water and effluent treatment,administrative services, trading of parts and equipment in general, inventorystorage services and may lease third party’s warehouses, and maintain and coverpipes and parts; (q) development, manufacturing, installation, operation,monitoring, maintenance and trading of measurement and automation systems basedon optical fibers sensors, including IT activities, in addition to the trainingfor the operation of these systems and research and development services,consulting and technical services specialized in IT and mechanical andelectronic engineering areas; (r) industrialization of painting and covering ofmetal pipes and parts, among others and; (s) the provision of consultingservices in general.

Sole Paragraph. The Company’spurposes may be carried out by means of controlled companies, subsidiaries andbranches.

 

III.- CAPITAL STOCK AND SHARES

 

Article 5. The Company’scapital stock is three hundred, twelve million, seven hundred, sixteenthousand, six hundred, fifty-nine reais and twenty-three centavos(R$312,716,659.23), fully subscribed and paid-in, divided into forty-sevenmillion, seven hundred, thirty-seven thousand, nine hundred, fifty-five(47,737,955) registered non-par book-entry common shares.

Paragraph 1. In addition tothe shares already issued, as per “caput” of this article, the Company isauthorized to increase its capital stock, regardless of amendment to the Bylawsand by resolution of the Board of Directors, by another one hundred, seventeenmillion, nine hundred, eighty-four thousand, three hundred, fifty-four(117,984,354) non-par common shares.

Paragraph 2. The Board ofDirectors may resolve on the issue of debentures convertible into shares withinthe authorized capital stock limit, as provided by paragraph 1 of Article 5.

Article 6. Each common shareentitles to one vote at the General Meeting.

Article 7. At the proportionof shares held, the Shareholders shall have preemptive right to subscribe newshares or securities convertible into shares.

Article 8. The Company mayissue shares, debentures convertible into shares and warrants without formershareholders being entitled to the preemptive right, when the placement occursthrough sale on the Stock Exchange, or via public subscription, or also throughshare swap, public takeover offer, pursuant to Article 172 of Law 6,404 ofDecember 15, 1976, as amended (“Brazilian Corporation Law”).

Sole paragraph. The Company isnot authorized to issue preferred shares and founder’s shares.

Article 9. The Company, withinthe limit of authorized capital and according to the plan previously approvedat the General Meeting, may grant stock options to its officers or employees,and also, individuals providing services to the Company or entity under itscontrol, as resolved by the Board of Directors, in compliance with the Bylawsprovisions and applicable legal rules and the preemptive right to shareholdersshall not apply.

Article 10. The Company isauthorized to hold all shares issued thereby in deposit accounts, on behalf oftheir holders, at the authorized financial institution designated thereby.

Sole Paragraph. The financialinstitution may charge from shareholders the service cost of ownershiptransfer, in compliance with the legal limits.

Article 11. The Company, bymeans of notice to the stock exchange where its shares are publicly traded, maysuspend the shares conversion, split, reverse split and transfer services, forno later than fifteen (15) consecutive days, or for ninety (90) days fitted inthe year.

Article 12. The Company maycharge for the share conversion, split or reverse split services. The pricecharged may not exceed the respective cost of each service.

 

IV. -GENERAL MEETING

 

Article 13. The GeneralMeetings shall be annual and extraordinary. The Annual General Meeting shall beheld within the first four months after the end of the fiscal year and theExtraordinary General Meeting shall be held whenever the Company’s interests sorequire.

Paragraph 1. The minutes ofthe General Meeting shall be filed at the Registry of Trade and publishedwithin no later than thirty (30) days as of the date of the meeting.

Paragraph 2. The GeneralMeeting may only resolve on the matters of the Agenda, contained in therespective call notices.

Paragraph 3. At the GeneralMeetings, the shareholders shall submit, at least, one (1) hour in advance, inaddition to the ID document or of the representative, an evidence of respectiveequity interest, issued by the depositary institution, and however, the equityinterest evidence should be anticipated to the Company under the terms of theShareholder General Meeting attendance manual.

Article 14. The GeneralMeetings shall be convened pursuant to the laws and shall be instated andpresided over by the chairman of the Board of Directors and by a secretaryappointed by the chairman.

Sole Paragraph. In the eventof absence or temporary impediment of the Chairman of the Board of Directors,the Chairman of the meeting shall be appointed by any member of the Board ofDirectors and a secretary appointed by shareholder nominated on that occasion.

Article 15. The GeneralMeeting, in addition to other attributions provided for by laws, shall beresponsible for:

I. electing and dismissing at any time, the members of the Board ofDirectors and Fiscal Council, when instated;

II. yearly examining the Management’s accounts andresolving on the financial statements submitted thereby;

III.       determining the compensation of themembers of the Board of Directors and Board of Executive Officers, as well asthe members of the Fiscal Council, if instated;

IV.       assigning share bonuses and resolve oneventual share splits and reverse splits;

V. approving stock option or share subscriptionprograms to its officers and employees, as well as the officers and employeesof other entities directly or indirectly controlled by the Company;

VI.       resolving, pursuant to the Management’sproposal, on the allocation of income for the year and on the distribution ofdividends;

VII.      resolving on the transformation, merger,amalgamation and spin-off of the Company, its dissolution and liquidation,elect the liquidator, as well as the Fiscal Council to operate during theliquidation period;

VIII.    resolving on the Company’s delisting fromthe “Novo Mercado” of BMFBOVESPA and on the Company’sderegistering as a publicly-held company; and

IX.       electing the institution liable for thepreparation of appraisal report of the Company shares, among the companiesappointed by the Board of Directors, in the cases and as provided for herein.

 

V. –MANAGEMENT

 

Article 16. The management ofthe Company shall be incumbent upon the Board of Directors and the Board ofExecutive Officers, whose members shall be elected for a one (1)-year combinedterm of office, which should be valid until the new members are elected.

Sole Paragraph. The managementof the Company is forbidden to grant loans to Related Parties, and it isexcluded from this definition its subsidiaries, according to the definition inthe article 243, paragraph 2, of Brazilian Corporate Law. 

Article 17. The members of theBoard of Directors and Board of Executive Officers elected shall take office bysigning each body’s book of meetings minutes, exempting the management pledge.

Sole Paragraph. The members ofthe Board of Directors and Board of Executive Officers shall remain in theiroffices and in the performance of their duties until their substitutes areelected, unless if otherwise resolved at the General Meeting. The investitureshall be subject to the previous signature of the Management Statement ofConsent, pursuant to the Novo Mercado Listing Regulations and the adhesion tothe Disclosure Policy of Material Acts or Facts of the Company, by signing therespective instrument, as well as the attending to applicable legalrequirements.

Article 18. The members of theBoard of Directors and Board of Executive Officers shall receive thecompensation established by the General Meeting. The allowance shall be votedglobally, and the Board of Directors shall distribute this compensation amongthe members of the Board of Directors and Board of Executive Officers.

Article 19. As proposed by theBoard of Directors and at the discretion of the Annual General Meeting, theCompany’s Management may also receive the Company’s profit sharing observingthe relevant legal rules and provisions in Article 36.

Sole Paragraph. The Managementshall only be entitled to profit sharing for the fiscal year in relation towhich the mandatory dividend is attributed to shareholders, referred to inArticle 38 of the Bylaws.

 

VI. -BOARD OF DIRECTORS

 

Article 20. The Board ofDirectors shall be composed of, at least, five (5) and at most seven (7)members and equal number of deputies, individuals, resident in the country,elected and removed from office by the General Meeting, which shall designateits Chairman and said members shall have a two(2)-year combined term of office.

Paragraph 1. At least, twentyper cent (20%) of the Board members shall be Independent Board Members, asdefined in Paragraph 3 below and in Novo Mercado Listing Regulations, andexpressly announced as such in the minutes of the General Meeting that electsthem. Those board members elected as provided for by Article 141, Paragraphs 4and 5 of the Brazilian Corporation Law, without prejudice to Paragraph 2 shallalso be deemed as independent board member(s).

Paragraph 2. Pursuant to theNovo Mercado Listing Regulations, if the percentage referred to in theparagraph above is a fraction, such number will be rounded to a whole number(i) rounded up, when the fraction is equal to or higher than zero point five(0.5), or (ii)rounded  down, when thefraction is lower than zero point five (0.5).

Paragraph 3. For the purposesof this article, the term “Independent Board Member” means the Board member:(i) who does not have any link with the Company, except for its interest in thecapital stock; (ii) who is not a controlling shareholder, spouse or relative upto the second degree of kinship of a controlling shareholder, or who is not orhas not been, during the last three (3) years linked to a company or entityconnected to a controlling shareholder (individuals linked to research and/oreducational institutions are excluded from such restriction); (iii) who has notbeen, during the last three (3) years, an employee or executive officer of theCompany, any controlling shareholder or corporation controlled by the Company;(iv) who is not a supplier or buyer, direct or indirect, of the Company’s servicesand/or products, to such an extent that suggests the loss of independence; (v)who is not an employee or administrator of a company or entity rendering orrequesting the Company’s services and/or products at a degree that  implies loss of independence; (vi) who is nota spouse or relative up to the second degree of kinship of any Company’sadministrator; or (vii) who does not receive any other compensation from theCompany other than that related to the position of board member (cash dividendsderiving from eventual interest on shareholder’s equity shall be excluded fromsuch restriction).

Paragraph 4.Excluding the vacancy hypotheses that shall be object of specific disclosure tothe market and for which measures should be taken to fill the correspondingpositions within one hundred and eighty (180) days, the positions of Board ofDirectors’ Chairman and CEO or the Company’s key executive may not beaccumulated  by the same person.

Article 21. In the events ofabsence or temporary impediment of the Chairman of the Board of Directors, theposition shall be performed by a Board member appointed by him. In the event ofvacant position of Chairman of the Board of Directors, the General Meetingshall elect a substitute to complete his term of office.

Sole Paragraph. Should anyother position at the Board of Directors become vacant, the remaining boardmembers shall designate a substitute to serve until the first General Meeting.Should most positions be vacant, the General Meeting shall immediately elect thesubstitutes who shall complete the substituted member’s term of office.

Article 22. The Board ofDirectors shall hold a meeting ordinarily once on a quarterly basis andextraordinarily whenever the Company’s interests so require.

Paragraph 1. The Board ofDirectors shall be called by the Chairman, or during his absence, by thevice-chairman, at least, five (5) days in advance, establishing the date, timeand agenda of the meeting.

Paragraph 2. In the event ofjustified urgency, the meeting may be called and held without observing theminimum term previously mentioned.

Paragraph 3. The meetingsshall be instated with the majority of its members and those resolutions takenby majority vote shall be considered as valid, accepting advanced writtenvotes, for the purposes of quorum and resolution. The board members mayparticipate in the meetings of the Board of Directors by means of conferencecall or video conference. In this case, they shall send their written votes tothe Chairman of the Board of Directors, by means of letter, facsimile orelectronic mail following the end of the meeting. In the event of a tie vote,the deciding vote shall be cast by the Chairman of the Board of Directors.

Paragraph 4. The resolutionsof the Board of Directors shall be drawn up in minutes. Should they produceeffects against third parties, they shall be filed at the Registry of Trade andpublished pursuant to the laws, within no later than thirty (30) days as of thedate of the Board of Directors meetings.

Article 23. Without prejudiceto other incumbencies provided for by laws, the Board of Directors shall beresponsible for:

I.   establishing the general guidance ofbusinesses, plans, projects and economic-financial, industrial and commercialguidelines of the Company;

II. analyzing and authorizing investments plans andsale of assets, setting the authority scope, the loan conditions and theguarantees that may be granted for their implementation by the Board ofExecutive Officers;

III.       expressing an opinion on any proposal tobe sent to the General Meeting;

IV.       convening the General Meeting;

V. electing and dismissing the Company’s officers,assigning them their designations and duties, observing the Bylaws provisionsand electing the members of the Audit Committee;

VI.       inspecting the officers management andexamining at any time, the Company’s books and documents and request anyinformation about contracted operations or to be contracted;

VII.      rendering an opinion on the Management’sfinancial statements and reports;

VIII.    resolving on the issue of new shares,warrants and debentures convertible into shares, within the limit  of authorized capital, setting the issueconditions, including price and term of payment;

IX.       resolving on the issue of debentures, notconvertible into shares and authorizing the issue of any credit instrument toraise funds, such as bonds, notes, commercial papers and other commonly used onthe market, and also resolving on their issue and redemption conditions;

 

X. authorizing theacquisition of shares and debentures issued by the Company for cancellation orto be kept in treasury for subsequent sale, pursuant to the legal rules ineffect;

XI.       expressing a favorable or unfavorableopinion on any public tender offer whose object is shares issued by theCompany, by means of a previously substantiated report , disclosed up tofifteen (15) days as of the date the public tender offer notice is published,which should address, at least: (i) the convenience and opportunity of thepublic tender offer regarding the interest of the group of shareholders inrelation to the liquidity of securities and its ownership; (ii) therepercussions of the public tender offer on the Company’s interests; (iii) thestrategic plans disclosed by the offeror regarding the Company; and (iv) otherissues deemed as material by the Board of Directors, as well as the informationrequired by applicable rules set forth by the Brazilian Securities and ExchangeCommission (“CVM”);

XI.       authorizing the acquisition of shares anddebentures issued by the Company to be cancelled or to be held in treasury forsubsequent disposal, pursuant to the prevailing legal rules;

XII.      submitting to the General Meeting a stockoption plan, pursuant to the laws and these Bylaws;

XIII.    authorizing the acquisition and sale ofpermanent assets, including interest in other companies, involving an amountexceeding ten per cent (10%) of the Company’s shareholders’ equity, based onthe last balance sheet forwarded to CVM;

XIV.    approving the execution, amendment or postponementby the Company and/or its subsidiaries of any documents, agreements orcommitments for assumption of liability, debt or obligations, in amountexceeding ten per cent (10%) of the Company’s shareholders’ equity, based onthe last balance sheet forwarded to the Brazilian Securities and ExchangeCommission or with term exceeding three (3) years;

XV. authorizing the incorporation of subsidiariesor wholly-owned subsidiaries by the Company;

XVI.    authorizing the Company’s association withother companies, in the country or abroad, establishing partnerships, consortiaor joint ventures;

XVII.   authorizing the granting of securedguarantee or personal guarantee by the Company or any of its subsidiaries, onbehalf of the Company or third parties, including the Company’s subsidiariesfor a period exceeding 24 months or added value in excess of 1.5% of theCompany’s total consolidated assets, based on the last balance sheet forwardedto CVM;

XVIII.  establishing the policy for attribution anddistribution of annual profit sharing to the management and employees;

XIX.   appointing and dismissing the Company’sindependent auditors;

XX. resolving on the cases not within the authorityof the General Meeting or the Board of Executive Officers;

XXI.    in the event of the Company’s liquidation,appointing the liquidator and establishing his compensation. The liquidator mayalso be removed;

XXII.   previously resolving on the Company’spetition for bankruptcy or court-supervised or out-of-court reorganization;

XXIII.  previously resolving on the filing or endingor any legal or arbitration proceeding (except if during the normal course ofbusinesses);

XXIV. establishing the three-name list ofinstitutions to be submitted to the General Meeting for the preparation of theappraisal report of the Company shares, for the purposes of delisting from“Novo Mercado”, deregistering as publicly-held company or public tender offerreferred to in Article 49 hereof;

XXV.   distributing the global compensation definedby the General Meeting between the members of the Board of Directors and Boardof Executive Officers; and

XXVI. creating and terminating committees and/or workgroups, also defining their structure, rules, compensation and scope of works,observing the provisions herein.

 

VII.- BOARD OF EXECUTIVE OFFICERS

 

Article 24. The Board ofExecutive Officers shall be composed of up to nine (9) members, shareholders ornot, resident in the country, one Chief Executive Officer, one InvestorRelations Officer and others without specific designation, elected by the Boardof Directors. The accumulation of positions is allowed.

Sole Paragraph. The Board ofExecutive Officers meetings shall be instated with the majority of its membersand those resolutions taken by majority vote shall be considered as valid,accepting advanced written votes, for the purposes of quorum and resolution.

Article 25. The Board ofExecutive Officers is responsible for the following and thus it is vested byfull powers:

I.  managing and generally representing theCompany, as plaintiff or defendant, in court or out of court;

II. observing the provisions of the final part ofArticle 26 below, appointing attorneys-in-fact and the powers of attorney shallalso specify acts and operations that may be practiced, as well as theirduration. In the event of power of attorney for the purposes of representationat court, they may have an indeterminate term;

III. if authorized pursuant to Article 23, items II,XII, XIII and XVIII, carrying out the acquisition and sale of permanent assetsand the incorporation of wholly-owned subsidiary, contract liabilities withgovernment and private companies, including financial institutions, as long asrelated to the Company’s purposes and to the ordinary development of theCompany’s operations and encumbering Company’s assets and properties by meansof creation or assignment of in rem guarantee, as well as tendering “aval”guarantee or surety in operations related to the Company’s purposes and onbehalf of related companies, subsidiaries and associated companies; and,

IV. admitting, waiving, compromising, agreeing onany Company’s right and obligation, provided that related to its operations, aswell as giving and receiving acquaintance.

Article 26. All the Managementacts shall be considered valid before the Company and third parties binding theCompany by means of signature of two Officers, one officer and oneattorney-in-fact, or two attorneys-in-fact appointed by two officers.

Sole Paragraph.  The Management’s acts, such as authorizationfor everyday tasks and related may be signed only by one Officer.

Article 27. The Board ofExecutive Officers is forbidden, jointly or severally, to tender “aval”guarantees and sureties or any other acts biding the Company in businessoutside its interests and purposes. The Officers may tender personalguarantees, “aval” guarantees and sureties on behalf of subsidiaries, andassociated companies, provided that in business related to the purpose of thesecompanies.

Article 28. In the event ofabsence or temporary impediment of one of the members of the Board of ExecutiveOfficers, the Board of Directors shall designate an Officer to cumulate theduties of the absent or impeding member. In the event of vacancy, observing theminimum required, if necessary, the Board of Directors shall elect a substituteto complete the term of office of the substituted member.

 

VIII.AUDIT COMMITTEE

 

Article 29. The AuditCommittee shall be composed of three (3) members, shareholders or not, residentin the country and elected by the Board of Directors.

Article 30. The AuditCommittee shall be responsible for:

I.  overseeing the Company’s financial controlactivities; and,

II. proposing to the Board of Directors the name ofthe Company’s independent auditors among internationally reputable companies.

 

IX.SHAREHOLDERS’ AGREEMENT

 

Article 31. The Company shallobserve the shareholders’ agreement filed at its headquarters, which shall alsobe filed with the Brazilian Securities and Exchange Commission as perapplicable rules, also observing the provisions in Article 44 hereof.

Sole Paragraph. The Chairmanof the Meeting or the Company’s joint committee shall not compute the vote castthat infringes the shareholders’ agreement duly filed at the Company’sheadquarters.

 

X.FISCAL COUNCIL

 

Article 32. The Fiscal Councilshall be composed of three (3) to five (5) sitting members and equal number ofdeputies, elected by the General Meeting.

Article 33. The Fiscal Councilshall not be permanent and only shall be instated if requested by shareholdersrepresenting, at least, a tenth of shares.

Article 34. The GeneralMeeting to elect the Fiscal Council shall establish its compensation, whichshall not be less than a tenth for each acting member, which on average shallbe attributed to each Officer, excluding benefits, procuration fees and profitsharing.

Sole Paragraph. The members ofthe Fiscal Council shall take office by means of signature in respectiveinstrument drawn up in the Company’s records. The investiture shall be subjectto the previous signature of the Statement of Consent of members of the FiscalCouncil, pursuant to the Novo Mercado Listing Regulations, as well as to complywith the applicable legal requirements.

 

XI.FISCAL YEAR, FINANCIAL STATEMENTS AND DIVIDENDS

 

Article 35. The fiscal yearshall commence on January 1 and shall end on December 31 of each year, when thefinancial statements provided for by the applicable laws shall be drawn up.

Article 36. The income for theyear shall deduct: (a) the accumulated losses, if any; (b) the provision forincome tax; (c) employee profit sharing, granted or not at the exclusivediscretion of the Board of Directors, which shall rule the matter; (d)management profit sharing, observing the provisions in Article 19 hereof.

Sole Paragraph. The Managementprofit sharing shall be limited to ten per cent (10%) of the income for theyear or the sum of annual compensation received thereby, whichever is thesmallest.

Article 37. The Board ofDirectors shall submit to the Annual General Meeting a proposal for theallocation of net income for the year, which observing the limits andconditions required by law, shall have the following destination:

I.   Legal Reserve, five per cent (5%) of the netincome, which shall not exceed twenty per cent (20%) of the capital stock;

II. Reserve for Contingencies, when circumstancesjustifying it are characterized;

III.       Unrealized Profit Reserve, observing theapplicable laws; and

IV.       Profit retention, as per proposal of theBoard of Directors to be approved at the General Meeting.

Article 38. The shareholdersare entitled to receive as minimum mandatory dividend, every year, an amountcorresponding to twenty-five per cent (25%) of the net income for the year,calculated as provided for by Article 202 of the Brazilian Corporation Law.

Paragraph 1. The Company maydraw up half-yearly balance sheets, or for shorter periods, and declare byresolution of the Board of Directors:

(a) the payment of dividend tothe account of profits earned in the half-yearly balance sheet;

(b) the distribution ofdividends in periods less than six (6) months, provided that the dividend paideach half year does not exceed the amount of capital reserves; and

(c) the payment of interimdividends to the retained earnings accounts or profit reserves existing in thelast annual or half-yearly balance sheet.

Article 39. The Board ofDirectors may pay or credit interest on equity to shareholders, as provided forby laws, which shall be attributed to the mandatory minimum dividend.

 

XII.SALE OF THE SHARE CONTROL, DEREGISTERING AS A PUBLICLY-HELD COMPANY ANDDELISTING FROM THE “NOVO MERCADO”

 

Article 40. The sale of theCompany’s control, both by means of a single operation and of successiveoperations shall be contracted under a suspensive or resolutory condition, bywhich the Acquirer (as defined below) undertakes to conduct a public tenderoffer of shares of other Company shareholders, in accordance with the terms andconditions provided for by laws in force and in the Novo Mercado Listing Regulations,so as to ensure them treatment equal to that given to the selling ControllingShareholder.

Sole Paragraph. For thepurposes of these Bylaws, the capitalized terms below shall have the followingmeaning:

 ControllingShareholder” means the shareholder or Group of Shareholders (as definedbelow) exercising the Company’s Power of Control (as defined below).

Selling Controlling Shareholder” means the Controlling Shareholder,when it promotes the sale of the Company’s control (as defined below).

Control” means the block of shares ensuring directly or indirectlyto its holder(s) the individual and/or shared exercise of the Company’s Powerof Control (as defined below).

Outstanding Shares” mean all the shares issued by the Company,except for the shares held by Controlling Shareholder, by persons boundthereby, by Company’s managers and those held in treasury.

Acquirer” means to whom the SellingControlling Shareholder transfers the Controlling Shares at a sale of theCompany’s Control (as defined below).

Sale of  the Company’s Control”means the sale of Controlling Shares to third party, on an onerous basis.

Group of Shareholders” means the group shareholders (i) bound bycontracts or voting agreements of any nature, whether directly or by means of Subsidiaries,Parent Companies or under common Control; or (ii) among which there is aControl relationship, directly or indirectly; or (iii) under common Control;

Power of Control” (as well as its related terms, “Parent Company”,“Subsidiary”, “under common Control” or “Control”) means the power actuallyemployed to direct the corporate activities and guide the operation of theCompany’s bodies, directly or indirectly, either in fact or in law, regardlessof the share interest held. There is a relative presumption of control inrelation to the person or Group of Shareholders holding shares ensuring saidperson or group of persons an absolute majority of votes of shareholdersattending the last three General Meetings of the Company, even though they are notshareholders ensuring them an absolute majority of the voting capital.

Economic Value” means the value of the Company and of its shares tobe determined by a specialized company, by means of the use of an acknowledgedmethodology, or based on another criterion to be defined by CVM.

Article 41. The public tenderoffer referred to in Article 40 above shall also be carried out:

(i)   in the events of onerous assignment of sharessubscription rights and other titles or rights related to securities convertibleinto shares to result in the Sale of the Company’s Control; or

(ii)  in the event of Selling the Control of thecompany holding the Company’s Power of Control, and in this case, the SellingControlling Shareholder shall be required to declare to BMFBOVESPA theamount assigned to the Company in such sale and attach the documentationproving this amount.

Article 42. The shareholderthat acquires the Power of Control, due to share purchase agreement executedwith the Controlling Shareholder, involving any amount of shares shall berequired to:

(i)   conduct the public tender offer referred toin Article 40 hereof; and

(ii)  pay, as indicated below, an amount equivalentto the difference between the price of the public tender offer and the amountpaid per share acquired on the stock exchange in the six (6) months prior tothe date of acquisition of the Controlling Power, duly restated up to thepayment date. Said amount should be distributed among those who sold Company’sshares at the trading session in which the Acquirer made the acquisitions,proportionally to the daily selling net balance of each, being BMFBOVESPAin charge of operating the distribution, in compliance with its rules.

Article 43. The SellingControlling Shareholder shall not transfer the ownership of his shares to theshareholder(s) to own the Power of Control, while he(they) does (do) not signthe Controlling Shareholders Statement of Consent, pursuant to the Novo MercadoListing Regulations.

Article 44. No Shareholders’Agreement providing for the exercise of the Power of Control may be registeredat the Company’s headquarters, without their subscribers having signed theControlling Shareholders Statement of Consent referred to in Article 43 above.

Sole Paragraph. The Companyshall not register any transfer of shares to the Acquirer of Power of Control,or to whom to hold the Power of Control, while he(they) does (do) not sign theControlling Shareholders Statement of Consent referred to by the Novo MercadoListing Regulations.

Article 45. In the publictender offer to be conducted by the Controlling Shareholder or the Company, forthe Company’s deregistering as a publicly-held company, the minimum price to betendered shall correspond to the Economic Value verified in the appraisalreport referred to in Article 46 below, in compliance with the applicable legalrules and regulations.

Article 46. The appraisalreport provided for in Articles 45, 47 and 48 hereof shall be prepared by aspecialized institution or company, with proven experience and independency asto the Company’s power of decision, its management and controllingshareholders, in addition to observing the requirements of Paragraph of Article8 of the Brazilian Corporation Law and shall contain the liability provided forin Paragraph 6 of the same Article.

Paragraph 1. The election ofinstitution responsible for determining the Company’s Economic Value is theprivate incumbency of the General Meeting, once the Board of Directors presentsa three-name list and respective resolution shall not compute the absenteesvotes and shall be taken by majority vote of shareholders representing theOutstanding Shares attending the General Meeting, if instated in first callshall rely on the attendance of shareholders representing, at least, twenty percent (20%) of total Outstanding Shares, or if instated in second call, it mayrely on the attendance of any number of shareholders representing theOutstanding Shares.

Paragraph 2. The costs toprepare the appraisal report shall be fully borne by the offeror.

Article 47. If theshareholders at the Extraordinary General Meeting resolve: (i) on the Company’sdelisting from Novo Mercado so that their securities are registered for tradingoutside the Novo Mercado or (ii) on a corporate restructuring from which theresulting company’s securities are not accepted for trading at the Novo Mercadowithin a one hundred and twenty (120)-day term counted as of the date of theGeneral Meeting that approved such operation, the Controlling Shareholder shallconduct the public tender offer of shares of other Company’s shareholders,whose minimum price to be offered shall correspond to the Economic Value to beassessed at an appraisal report prepared in compliance with Article 46 of theseBylaws, observing the applicable legal rules and standards.

Paragraph 1. Should there beno Controlling Shareholder, if the Company’s delisting from the Novo Mercado isresolved so that the securities issued by the Company are registered fortrading outside the Novo Mercado, or due to a corporate restructuringoperation, in which the resulting company’s   securities are not accepted for trading at the Novo Mercado within onehundred and twenty (120) days as of the date of the general meeting thatapproved said operations, the delisting is conditioned to  the public tender offer in the sameconditions set forth in the “caput” of this article.

Paragraph 2. Said generalmeeting shall establish the person(s) responsible for conducting the publictender offer, who, attending the meeting, shall expressly undertake theobligation of carrying out the offer.

Paragraph 3. Should noresponsible party be defined for conducting the public tender offer, in case ofcorporate restructuring operation, in which the resulting company’s  securities are not accepted for trading atthe Novo Mercado,  shareholders thatvoted in favor of the corporate restructuring will be in charge of conductingsaid offer.

Article 48. The Company’sdelisting from “Novo Mercado” due to the non-compliance with the obligations includedin the Novo Mercado Listing Regulations is conditioned to the performance of apublic tender offer, at least, at the economic value of shares to be calculatedat an appraisal report referred to in Article 46 herein, in compliance withapplicable legal rules and regulations.

Paragraph 1 – The ControllingShareholder should carry out the public tender offer set forth in the “caput”of this article.

Paragraph 2. Shouldthere be no Controlling Shareholders and the delisting from the Novo Mercadomentioned in the “caput” occurs as a result of a general meeting resolution,shareholders who have voted in favor of the resolution that implied in therespective non-compliance shall carry out the public tender offer set forth inthe “caput”.

Paragraph 3. Shouldthere be no Controlling Shareholder and the delisting from Novo Mercado setforth in the “caput” occurs due to an act or fact of the Management, theCompany’s administrators shall call a general meeting whose agenda will be the resolution on how to remedy thenon-compliance with the obligations contained in the Novo Mercado ListingRegulations or, if it is the case, to resolve on the Company’s delisting fromthe Novo Mercado.

Paragraph 4. Shouldthe general meeting mentioned in paragraph 3 above resolve on the Company’sdelisting from the Novo Mercado, said meeting shall define the person(s)responsible for conducting the public tender offer set forth in the “caput”,who, attending the meeting, shall expressly undertake the obligation to carryout the offer.

 

XIII.PROTECTION AGAINST SHAREHOLDER BASE DILUTION

 

Article 49. Any AcquiringShareholder (as per the definition below) to acquire or become holder of sharesissued by the Company, in an amount equal to or exceeding thirty percent (30%)of the total shares issued by the Company, excluding treasury shares, shall,within sixty (60) days as of the date of acquisition of the event that resultedin the ownership of shares in this amount, carry out or request theregistration of a public tender offer (“OPA”) for the acquisition of allshares issued by the Company, pursuant to the applicable rules of the CVM andthe BMFBOVESPA and the terms of this Section.

Paragraph 1 – For the purposesof these Chapter, the capitalized terms below shall have the following meaning:

Acquiring Shareholder” means any person (including, but not limitedto, any individual or legal entity, investment fund, collective investmententities, securities portfolio, universality of rights, or any other type oforganization, resident, domiciled or headquartered in Brazil or abroad) orgroup of persons bound by voting agreement with the Acquiring Shareholderand/or representing the same interest of the Acquiring Shareholder to subscribeand/or acquire the Company shares. The examples of a person representing thesame interest of the Acquiring Shareholder includes any person (i) directly orindirectly, controlled or administered by the Acquiring Shareholder; (ii)controlling or administering in any way the Acquiring Shareholder; (iii) directlyor indirectly controlled or administered by any person controlling oradministering, directly or indirectly, the Acquiring Shareholder; (iv) in whichthe Controlling Shareholder of the Acquiring Shareholder holds, directly orindirectly, an equity interest equal to or higher than 30% of the capitalstock; (v) in which the Acquiring Shareholder holds, directly or indirectly, anequity interest equal to or higher than 30% of the capital stock; or (vi)holding, directly or indirectly, an equity interest equal to or higher than 30%of the Acquiring Shareholder’s capital stock.

Paragraph 2 – The price to betendered by the share issued by the Company, subject-matter of OPA (“OPAPrice”) may not be less than the highest amount between (i) the Economic Valueverified in the appraisal report; (ii) one hundred twenty per cent (120%) ofthe share issue price in any capital increase by means of public offeringoccurred within twenty-four (24) months preceding the date when the OPA becomesmandatory, pursuant to this Article 49, duly restated by IPCA until payment;and (iii) one hundred twenty per cent (120%) of the average unit price ofshares issued by Company during the ninety(90)-day period prior to the OPA tobe held on the stock exchange where the highest volume of Company shares tradedoccurs.

Paragraph 3 – The OPA shallmandatorily observe the following principles and procedures, in addition toother principles and procedures expressly provided for in Article 4 of CVM Rule361 of March 5, 2002 , as amended (“CVM Rule 361”), where applicable:

(i) to be indistinctlyaddressed to all the Company’s shareholders;

(ii) to be held in auction atBMFBOVESPA;

(iii) to be carried out sothat to ensure an equal treatment to the addressees, allowing them properinformation as to the Company and the offer, and provide them with elementsnecessary to take an independent decision as to the acceptance of OPA;

(iv) to be unalterable andirrevocable after the publication in the offer notice, pursuant to CVM Rule361, except for provisions in Paragraph 5 below;

(v) to be launched by theprice determined according to the provisions of this Article and paid in cash,in domestic currency, against the acquisition in the OPA of shares issued bythe Company; and

(vi) to be supported by the Company’sappraisal report, prepared by internationally reputable institution,independence as to the Company’s power of decision, managers and/or controllingshareholder and proven experience in the economic-financial appraisal ofpublicly-held companies, prepared according to the criteria provided for inArticle 8 of CVM Rule 361.

Paragraph 4 – The shareholdersowning, at least, ten per cent (10%) of the Outstanding Shares, may request tothe Company’s Management to convene a special meeting of shareholders owningOutstanding Shares to resolve on the performance of new appraisal of theCompany for the purposes of reviewing the OPA price, whose report shall beprepared under the same molds of the appraisal report referred to in item (vi)of Paragraph 3 of this Article, pursuant to the procedures provided for inArticle 4-A of the Brazilian Corporation Law and observing the provisions ofapplicable CVM and BMFBOVESPA rules and pursuant to this Section.

Paragraph 5 – Should thespecial meeting referred to in Paragraph 4 above resolve on a new appraisal andthe appraisal report determines an amount higher than the initial amount ofOPA, the Acquirer may waive this, and in this case, the Shareholder shallobserve, where applicable, the procedure provided for in Articles 23 and 24 ofCVM Rule 361 and sell the excess shareholding within 3 months as of the date ofthis same special meeting.

Paragraph 6 – Should the CVMrules determine the adoption of a specific criterion to calculate the purchaseprice of each Company share in the OPA subject to Article 4-A of the BrazilianCorporation Law that results in a purchase price higher than that determinedpursuant to this Article, that purchase price calculated pursuant to CVM rulesshall prevail in the performance of OPA provided for in this Article.

Paragraph 7 – The performanceof OPA mentioned in the “caput” of this Article shall not exclude thepossibility of another Company’s shareholder, or where applicable, the Companyitself from preparing a competing OPA, pursuant to applicable rules.

Paragraph 8 – The AcquirerShareholder shall be required to answer eventual CVM’s requests or requirementsrelated to the OPA, within the terms established by applicable rules.

Paragraph 9 – In the event theAcquirer Shareholder does not comply with the obligations provided for in thisArticle, inclusive referring to the observance of terms (i) to execute orrequest the registration of OPA, or (ii) to comply with eventual CVM’s requestsor requirements, the Company’s Board of Directors shall convene anExtraordinary General Meeting, in which the Acquirer Shareholder  may not vote to resolve on the suspension ofexercise of Acquirer’s Shareholder rights, as provided for in Article 120 ofthe Brazilian Corporation Law.

Paragraph 10 – Any AcquirerShareholder  to acquire or become holderof other partner’s rights, including by force of usufruct or trust over sharesissued by the Company, in an amount equal to or exceeding thirty percent (30%)of the total shares issued by the Company shall be equally required to carryout or request an OPA, when applicable, pursuant to the terms provided for inthis article, within 60 days of the date of such acquisition or event thatresulted in the ownership of these partner’s rights over shares in an amountequal to or higher than thirty percent (30%) of the total shares issued by theCompany.

Paragraph 11 – The obligationscontained in Article 254-A of the Brazilian Corporation Law and Section XIIhereof shall not exempt the Acquirer Shareholder from complying with theobligations contained in this Article.

 Paragraph 12 – The provisions of this Articleshall not apply if any person becomes the holder of shares issued by theCompany in an amount exceeding thirty per cent (30%) of the total shares issuedthereby, as a result of the subscription of the Company’s shares in a singleprimary issue approved at the General Meeting, convened by the Board ofDirectors and whose capital increase proposal has  determined the share issue price based on theeconomic value obtained from the Company’s appraisal report prepared by aspecialized institution meeting the requirements provided for in item (vi) ofParagraph 3 of Article 49 hereof.

Paragraph 13 – For thepurposes of calculating the thirty percent (30%) of total shares issued by theCompany outlined in the caput of this article, involuntary additions toshareholding interest resulting from the cancellation of treasury shares, shareredemptions or a reduction in the Company’s capital stock through thecancellation of shares shall not be computed.

 

XIV.ARBITRATION COURT

 

Article 50. The Company, itsshareholders, administrators and members of the Fiscal Council  undertake to resolve, by means ofarbitration, before the Arbitration Rules of the Market Arbitration Panel, anyand all dispute or controversy arising among them, related to or deriving from,especially, the application, validity, effectiveness, construal, infringementand its effects, of the provisions contained in the Brazilian Corporation Law,the Company’s Bylaws, the rules issued by the Brazilian Monetary Council, theBrazilian Central Bank and CVM, as well as other rules applicable to theoperation of the capital markets in general, besides those included in the NovoMercado Listing Regulations, the Novo Mercado Listing Agreement, theArbitration Rules of the Market Arbitration Panel and Regulation of Sanctions.

 Sole Paragraph. The Brazilian laws shall bethe only one applicable to the merits of any and all dispute, as well as theexecution, construal and validity of this present arbitration clause. Thearbitration court shall be composed of arbitrators elected as provided for inthe Arbitration Rules. The arbitration proceeding shall take place in the Cityand State of São Paulo, where the arbitration award shall be rendered. Thearbitration shall be managed by the Market Arbitration Panel and conducted,judged pursuant to the Arbitration Rules.

 

XV.LIQUIDATION OF THE COMPANY

 

Article 51. The Company shallbe liquidated in cases provided for by law, and the General Meeting shall bethe qualified body to appoint the liquidator or liquidators, as well as theFiscal Council, which shall operate during the liquidation period, observingthe legal formalities.

 

XVI.FINAL AND TRANSITORY PROVISIONS

 

Article 52. Pursuant to theprovisions in Article 45 of the Brazilian Corporation Law, the reimbursementamount to be paid to dissenting shareholders shall be based on the book value,included in the last balance sheet approved by the General Meeting.

 

BYLAWS CONSOLIDATEDAT THE EXTRAORDINARY GENERAL MEETING HELD ON OCTOBER 14, 2011

 

 

 

The above news release has been provided by the above company via the OTC Disclosure and News Service. Issuers of news releases and not OTC Markets Group Inc. are solely responsible for the accuracy of such news releases.

Article source: http://www.otcmarkets.com/stock/LUPAY/news?id=36720

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