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SEMINÁRIO DE PRIVATE EQUITY: EMISSÃO DE AÇÕES NO EXTERIOR

DONALD BAKER Tel: 55-11-3147-5601

Dec 13, 2006 E-mail: dbaker@whitecase.com

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Topics

I. The Initial Decision: Do You Want to Be a Public Company

II. Planning for the Offering

III. Starting the Process

IV. U.S. Securities Laws

V. Registration Process

VI. The Underwriting Process

VII. Keys to Success

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I. The Initial Decision: Do You Want to Be a Public Company

Benefits: Access to Capital Liquidity of Securities

Exit Strategies for stockholders Employee incentive arrangements Currency for acquisitions Marketing of Brand

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I. The Initial Decision: Do You Want to Be a Public Company

Burdens: Expenses Regulation Market Pressure to Perform Fiduciary duties Risks of aborted offering

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II. Planning for the Offering

Corporate Governance Structure Corporate Structure - “Novo Mercado” Committees – Audit vs. Fiscal Council Independent Directors Whether to adopt “anti-takeover” provision

Investor Relations Director Public Relations/Media Relations Firm Website

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II. Planning for the Offering

Remuneration of Members of Board of Directors (Conselho da Administração) and Directors (Diretoria)

Profit Sharing Plan Long-term incentive plan : Stock Option vs. Phantom Stock vs. Bonus

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

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II. Planning for the Offering

Selecting an Underwriter: Analysts in the Industry Personal Relationship Underwriter Horsepower Valuation Commitment to your transaction

Selecting Others in Team: Attorneys Auditors

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III. Starting the Process

All Hands Organizational Meeting Scheduling the offering:

Timetable Financial Statements to be included/Timetable for delivery

Structuring the offering Primary vs. Secondary

Status Check on Acquisitions and other Developments“Quiet Period” Begins

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IV. U.S. Securities Laws

General Under the Securities Act of 1933, generally each offer and sale of a security must

be registered or exempt Some limited security exemptions, including:

Rule 144A Regulation S Regulation D

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IV. U.S. Securities Laws

To Whom May Offer Be Made

144A Offering

Qualified Institutional Buyers “QIBs” US$100 million in securities assets US$25 million for broker dealers Determine status from published source or by certificate

No General Advertising or Solicitation

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IV. U.S. Securities Laws

Regulation S Offering

Rule 903: Two basic conditions:

1. Offshore transaction

2. No directed selling efforts in U.S.

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V. Registration Process

Drafting the Prospectus Industry precedents are helpful Underwriters’ Preferences Methodology

Painstaking care

Verification of each sentence Capturing the essence of the company

Timing Allocation of resources to process

Due diligence point person Chief financial officer – projections and financial information

(cont.)

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V. Registration Process

Prepare Registration Statement Front cover Due Diligence Process (include all material information and no material

misstatements) Prior preparations is key Legal due diligence vs. management due diligence

(cont.)

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V. Registration Process

Due Diligence Defense Underwriters must conduct a due diligence investigation in order to benefit

from certain defenses under the U.S. Securities Act of 1933 in the event of material misstatements or omissions in the Offering Document.

There is no due diligence defense for Issuers:

Issuers are strictly liable (without defenses) for errors and omissions in Offering Document.

Expertized (e.g., audited financials) vs. non-expertized portion

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What constitutes a reasonable investigation? It depends on the circumstances, including: Nature of Issuer (i.e., size, type, stability of business, whether it is regulated,

financial condition, earnings history) Type of offering; Quality of management, auditors and outside counsel; and Time available for investigation.

(cont.)

V. Registration Process

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Plain English Non-Financial Disclosure MD&A (Management Discussion and Analysis) Financial Statements

Audited financial statements required Income/Cash Flow Statements - three most recent fiscal yearsBalance Sheet - two most recent fiscal years

V. Registration Process(cont.)

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VI. The Underwriting Process

Signing an underwriting agreement Day of pricing Close 3-5 business days thereafter Comfort letter Bring-Down Due Diligence Deliveries at closing

Accountant’s comfort letter Attorneys opinions – “10b-5” opinion Shares Certificates, etc. Green-shoe closing: Over-allotment of 15% “Lock-Up”: 180 days

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VI. The Underwriting Process

Representations and warranties

Typically, an underwriter in an IPO will seek extensive reps and warranties from: Company Selling Shareholders Representations and warranties

“Insiders” vs. “Non-insiders” Registration Rights Agreement - provisions

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VII. Keys to Success

Advance Preparation Anticipate due diligence requests

Anticipate accounting issues

Complete acquisitions/intellectual property work and other major corporate developments

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VII. Keys to Success

Depth and Expertise in Management

Market expectations

Challenges of workload and timing

Road show presentations

Selecting the Right Deal Team

(cont.)

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Worldwide. For Our Clients.

White & Case, a New York State registered limited liability partnership, is engaged in the practice of law directly and through entities compliant with regulations regarding the practice of law in the countries and jurisdictions in which we have offices.

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