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Public offerings

The Brazilian Securities Commission (CVM) issued on January 16 2009 the CVM Rule 476, addressing public offerings of securities to be distributed with limited underwriting efforts (Public Offering With Limited Underwriting Efforts), which are waived of registration before the CVM – similar to Rule 144A, adopted pursuant to the US Securities Act of 1933, as amended.

Accordingly, public offerings of securities that comply with the requirements of Rule 476 will no longer be subject to registration before the CVM, nor have to comply with provisions of CVM Rule 400, dated December 29 2003, as amended, which regulates the public offerings of securities in Brazil.

According to the Rule 476, a Public Offering With Limited Underwriting Efforts: (i) must be targeted exclusively at qualified investors as defined by section 109 of CVM Rule 409, dated August 18 2004, as amended (investment funds targeted at non-qualified investors are also considered qualified investors, and individuals and legal entities must subscribe to securities worth at least R$1,000,000.00 ($420,000)); (ii) must be intermediated by members of the securities underwriting system; (iii) if negotiated, must be negotiated exclusively among qualified investors; (iv) must be offered to no more than 50 qualified investors; (v) must be subscribed or acquired by no more than 20) qualified investors; and (vi) must not be offered to investors through stores, offices or establishments open to the public, nor through public communication services, such as press, radio, television and websites.

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