Exhibit
1.1
 
 GAFISA
S.A.
 CNPJ/MF
no. 01.545.826/0001-07
 NIRE
35.300.147.952
 
 A
Publicly-Held Company
 
 CVM no.
01610-1
 
 BYLAWS
 (FREE
TRANSLATION)
 
  CHAPTER I - NAME,
HEADQUARTERS, PURPOSE AND DURATION
  Article 1.Gafisa S.A. (the
“Company”) is a
publicly-held corporation with authorized capital, governed by these Bylaws and
applicable law.
  Article 2.The Company’s
headquarters and forum are located in the city of São Paulo, State of São Paulo.
The Company may, by resolution adopted by the Board of Directors, change the
address of its headquarters, and open, transfer and extinguish branches,
agencies, offices, warehouses, representation offices and any other
establishments anywhere within Brazilian territory or abroad.
  § 1.The power to open,
transfer and extinguish branches, agencies, offices, warehouses, representation
offices and any other establishments anywhere within Brazilian territory or
abroad referred to in this article may, by resolution adopted by the Board of
Directors, be delegated to the Chief Executive Officer.
  Article 3.The Company’s
purposes are: (i) to promote and develop real estate projects of any kind,
whether its own or those of third parties, in the latter case as contractor and
agent; (ii) to purchase and sell real estate of any kind; (iii) to perform civil
construction and provide civil engineering services; and (iv) to develop and
implement marketing strategies for its own or third parties’ real estate
projects.
  Sole Paragraph.The
Company may hold interests in any other companies, in Brazil or abroad, upon
approval granted by means of a resolution adopted by the Board of Directors,
except as provided in Art. 21 (r) and Art. 30§1.
  Article 4.The Company has an
indefinite term of duration.
  CHAPTER II -
CAPITAL AND SHARES
  Article 5.The capital of the
Company is R$ 1,627,274,152.14 , which is fully paid-in and divided into
334,154,274 common shares, all registered, book-entry and without par value.
§ 1.The cost of share
transfer services charged by the account agent shall be borne by the
shareholders, subject to such limits as may be imposed by applicable
legislation.
  
  § 2.Each common share carries
the right to one vote on resolutions at General Meetings of
Shareholders.
  § 3.The Company may not issue
preferred shares or participation certificates (partes
beneficiárias).
  § 4.For purposes of
reimbursement, the value of the Company’s shares shall be based on the Company’s
economic value, as determined by an appraisal carried out by a specialized firm
appointed in the manner provided for in Article 45 of Law 6404/76.
  Article 6.The capital of the
Company may be increased by resolution adopted by the Board of Directors,
without need for an amendment to these Bylaws.  The resolution
approving the increase shall fix the terms and conditions for the issuance of
shares, subject to a limit of 600,000,000 (six hundred million) common
shares.
  Sole Paragraph.The Company
may, within the limit of its authorized capital and by resolution adopted by the
shareholders in General Meeting, grant share purchase options to (i) its
officers, directors and employees, or (ii) individuals who provide services to
it or to any company under its control.
  Article 7.The Company may
reduce or exclude the time period for the exercise of preemptive rights on the
issuance of shares, debentures convertible into shares or subscription bonuses
which are placed by means of sale on a stock exchange, public subscription or
share swap in a mandatory public tender offer pursuant to articles 257 to 263 of
Law 6404/76.  Pursuant to article 171§3 of Law 6404/76, there shall be
no preemptive rights on the grant and exercise of the share purchase
options.
  CHAPTER III -
GENERAL MEETING OF SHAREHOLDERS
  Article 8.A General Meeting
of Shareholders shall be held, on an ordinary basis, in the first four (4)
months following the end of the fiscal year and on an extraordinary basis
whenever required by law or the Company’s interests.
  § 1.General Meetings of
Shareholders shall be called in the manner provided for by law. Regardless of
the formalities for calling General Shareholders’ Meetings, any General Meeting
attended by all shareholders shall be considered to have been regularly
called.
  § 2.General Meetings of
Shareholders shall be called to order and chaired by the Chairman of the Board
of Directors or, in his absence, by a shareholder appointed by the shareholders
at the General Meeting. The Chairman of the General Meeting shall choose one of
those present at the meeting to act as secretary.
  § 3.  Prior to the
call to order, the shareholders shall sign the “Book of Attendance” (Livro de Presença de
Acionistas), giving their name and residence and the number of shares
they hold.
  § 4.  The list of
shareholders present at the meeting shall be closed by the Chairman immediately
after the General Meeting is called to order.
  2
  § 5.  Shareholders
which appear at a General Meeting after the list of shareholders present at the
meeting has been closed may participate in the meeting but shall not have the
right to vote on any resolution.
  Article 9.In addition to the
matters provided for by the law, the Shareholders in General Meeting
shall:
  (a)
decide on the Company’s exit from the Novo Mercado of the São Paulo Stock
Exchange – BOVESPA (“Novo Mercado”), which
shall be communicated to the São Paulo Stock Exchange – BOVESPA in writing, 30
(thirty) days in advance;
  (b)
subject always to the provisions of Article 11, choose, from among the three
qualified institutions indicated on a list prepared by the Board of Directors,
the institution which shall be responsible for the preparation of an appraisal
report for shares issued by the Company, for the purposes of exiting the Novo
Mercado, cancellation of the Company’s registration as a publicly-held company
or mandatory public tender offer; and
  (c)
resolve cases on which these Bylaws are silent, subject to the provisions of Law
6404/76.
  Sole Paragraph.In the event
of cancellation of the Company’s registration as a publicly-held company or its
exit from the Novo Mercado, due to listing of the Company’s shares for trading
off the Novo Mercado or to a corporate reorganization in which the shares of
resulting company are not admitted for trading on the Novo Mercado, the public
tender offer to be made by the Controlling Shareholder or the Company, as
applicable, shall have a minimum offer price which is equal to the economic
value determined in the appraisal report referred to in Article 9(b) and which
complies with the Novo Mercado Listing Rules.
  Article 10.The choice of the
specialized institution or firm responsible for the determination of the
Company’s Economic Value, referred to in Article 9(b) of these Bylaws, shall be
made by the majority of votes cast by holders of Outstanding Shares present at
the General Meeting in question, blank votes not being computed.  The
quorum for the General Meeting shall be shareholders representing at least 20%
of the total number of Outstanding Shares, at first call, and on second call,
shareholders representing any number of Outstanding Shares.
  Paragraph 1.For purposes of
these Bylaws:
  “Outstanding Shares”
means all the shares issued by the Company, with the exception of shares held by
the Controlling Shareholder, by persons related to the Controlling Shareholder
or by the Company’s officers and directors and treasury shares;
  “Controlling
Shareholder” means the shareholder or Shareholder Group that exercises
Control of the Company;
  “Shareholder Group”
means a group of two or more persons (a) that are bound by contracts or
agreements of any nature, including shareholders’ agreements, whether written or
oral and whether directly or through Controlled Companies,
Controlling
  3
 Companies
or companies under Common Control; or (b) among whom there is a direct or
indirect Control relationship; or (c) that are under Common Control; or (d) that
represent a common interest. Examples of persons representing a common interest
include (i) a person that holds a direct or indirect interest of 15% (fifteen
percent) or more in the capital of the other person; and (ii) two persons that
have a third investor in common which holds a direct or indirect interest of 15%
(fifteen percent) or more in the capital of the first two persons. Joint
ventures, investment funds or clubs, foundations, associations, trusts,
condominiums, cooperatives, security portfolios, universalities of rights and
any other form of organization or enterprise of any kind, whether constituted in
Brazil or abroad, shall be considered to be part of the same Shareholder Group
whenever two or more of such entities: (x) are administered or managed by the
same legal entity or by parties related to the same legal entity; or (y) have
the majority of their managers or administrators in common;
  “Control” (and the
related terms “Controlling Company”,
“Controlled
Company” and “under Common
Control”) means the power effectively used to direct corporate activities
and orient the functioning of the Company’s corporate bodies, whether directly
or indirectly and whether de
factoor de
jure.  There is a relative presumption that the person or
Shareholder Group holding shares that gave it an absolute majority of votes of
the shareholders present at the last three General Shareholders’ meetings holds
Control, even if such person or Shareholder Group does not hold an absolute
majority of the Company’s voting capital; and
  “Diffuse Control”
means Control exercised by a shareholder holding less than 50% (fifty percent)
of the Company’s capital, or by shareholder(s) which do not constitute a
Shareholder Group.
  Article 11.In the event the
Company exits the Novo Mercado or its registration as a publicly-held company is
cancelled, the costs incurred for the preparation of the appraisal report
referred to in Article 9(b) shall be borne entirely by the Controlling
Shareholder or by the Company, if the Company is offeror, as
applicable.
  CHAPTER IV -
MANAGEMENT
  SECTION IV.I. - GENERAL
RULES
  Article12.The Company is
managed by the Board of Directors (Conselho de
Administração)and the Executive Board
(Diretoria).
  Article 13.The members of the
Board of Directors and the Executive Board shall be invested in their respective
offices within thirty days from the date they were appointed, by signing an
instrument of investiture in the appropriate book, and shall remain in office
until the investiture of the newly-elected members of the Company’s
management.
  Sole Paragraph.The
investiture of the members of the Board of Directors and the Board of Executive
Officers in their respective offices is conditional upon (i) the execution of
the Statement of Consent from Senior Managers (Termo de Anuência dos
Administradores)provided for under the
Novo Mercado Listing Rules; and (ii) adherence to the Manual for Disclosure and
Use of Information and Policy for Trading
  4
 in
Securities Issued by the Company (Manual de Divulgação e Uso de
Informações e Política de Negociação de Valores Mobiliários de Emissão da
Companhia), by executing an instrument to that effect.
  Article 14.The Board of
Directors may create advisory committees to assist the members of the Board of
Directors, and determine the composition and specific responsibilities of such
committees.
  Article 15.The Shareholders
in General Meeting shall determine, on an individual or global basis, the
remuneration of the Company’s directors, officers and members of its advisory
committees.  Where the remuneration is fixed on a global basis, the
Board of Directors shall determine the amounts to be paid to each
individual.  Where applicable, the Board of Directors shall also
distribute the share in profits fixed by the Shareholders in General
Meeting.
  SECTION IV.II. - BOARD OF
DIRECTORS (CONSELHO
DE ADMINISTRAÇÃO)
  Article 16.The Board of
Directors is composed of at least five (5) and no more than nine (9) effective
members (the election of alternates being permitted), all of whom shall be
shareholders, elected and removable at any time by the Shareholders in General
Meeting, with an unified term of office of two (2) years, re-election being
permitted.
  Article 17.At least 20% of
the effective members of the Board of Directors shall be Independent
Members.
  § 1.When a fractional number
of directors results from compliance with the percentage referred to above, the
fraction shall be rounded (i) to the next highest whole number, where the
fraction is 0.5 or greater; and (ii) to the next lowest whole number, where the
fraction is less than 0.5.
  § 2.For purposes of these
Bylaws, “Independent Member” is one who: (i) has no relationship with the
Company except for an interest in its capital; (ii) is not a Controlling
Shareholder, nor a spouse or relative up to the second degree of the Controlling
Shareholder, and is not now and has not been, in the past three years, related
to a company or entity related to the Controlling Shareholder (persons related
to public institutions of education and/or research are excluded from this
restriction); (iii) has
not been, in the past three years, an employee or officer of the Company, the
Controlling Shareholder or a company controlled by the Company; (iv) is not a direct or
indirect supplier or purchaser of the Company’s services and/or products of the
Company, in a degree that implies loss of independence; (v) is not an employee, officer
or director of a company or entity offering services and/products to, or
requesting services and/or products from, the Company; (vi) is not a spouse or
relative up to the second degree of any of the Company’s officers or directors;
and (vii) does not receive any remuneration from the Company except that payable
to directors (cash earnings generated by holdings in the Company’s capital are
excluded from this restriction).
  § 3.Members of the Board of
Directors elected in the manner provided for in Article 141 §§4 and 5 of Law
6404/76 shall also be considered to be Independent Members.
  5
  Article 18.The Board of
Directors shall have a Chairman, who shall be elected by the favorable vote of a
majority of the effective members. In the event of incapacity or temporary
absence of the Chairman, the chairmanship shall be assumed by the member
previously designated by the Chairman, or, in the absence of a previous
designation, by such member as the remaining members shall appoint.
  Article 19.The Board of
Directors shall meet at least quarterly. Meetings of the Board of Directors
shall be called by the Chairman, or by at least two effective members, by
written notice containing the agenda for the meeting, in addition to the place,
date and time of the meeting.  Board of Directors’ meetings shall be
called at least five days in advance.  Regardless of the formalities
for calling meetings, any meeting attended by all members of the Board of
Directors shall be considered to have been regularly called.
  Article 20.The quorum for
Board of Directors’ meetings shall be four members.  Resolutions shall
be adopted by the favorable vote of a majority of members present at the
meeting, and the Chairman shall have, in addition to his own vote, a casting
vote in the event of a tie.
  § 1.The decisions of the
Board of Directors shall be recorded in minutes, which shall be signed by the
members present at the meeting.
  § 2.Directors may be
represented at meetings of the Board of Directors by another director, to whom
special powers have been granted. The directors may also participate in meetings
by telephone or video conference, and, in that event, shall be considered to be
present at the meeting and shall confirm their vote by written statement sent to
the Chairman by letter, facsimile transmission or e-mail immediately after the
end of the meeting. Upon receipt of statement of confirmation, the Chairman
shall have full powers to sign the minutes of the meeting on behalf of the
member in question.
  Article 21.It addition to
such other powers and duties conferred on it by law and these Bylaws, the Board
of Directors shall have powers to:
  (a)
              fix
      the general direction of the Company’s
business;
  (b)
              approve
      the Company’s annual operating budget and business plan, and any changes
      thereto (provided, however, that until such new budget or plan has been
      approved, the most recently approved budget or plan shall
      prevail);
  (c)
              attribute,
      from the global amount of remuneration fixed by the Shareholders in
      General Meeting, the monthly compensation of each of the members of the
      Company’s management and advisory committees, in the manner provided for
      in Article 15 of these Bylaws;
  (d)
              elect
      and remove the Company’s Officers and determine their powers and duties,
      in accordance with the provisions of these
  Bylaws;
  (e)
              supervise
      the Officers’ management of the Company, examine at any time the Company’s
      books and documents, and request information on contracts entered into or
      about to be entered into by the Company and any other
  acts;
  6
 (f)
              determine
      the general compensation criteria and the benefit policies (indirect
      benefits, shares in profits and/or sales) for the senior management and
      those holding management positions in the
  Company;
  (g)
              instruct
      the votes related to the global remuneration of management to be cast by
      Company’s representative at the General Meeting of Shareholders of the
      companies where the Company holds an equity interest, except for the
      wholly-owned subsidiaries or special purpose
  companies;
  (h)
              in
      accordance with a plan approved by the Shareholders in General Meeting,
      grant share purchase options to the Company’s officers, directors or
      employees, or to individuals who rendered services to the Company or to
      any company under its control, with the exclusion of shareholders’
      pre-emptive rights over the grant of such share purchase options or the
      subscription of the corresponding
shares;
  (i)
              call
      General Shareholders’ Meetings;
  (j)
              submit
      to the Shareholders in General Meeting any proposed amendment to these
      Bylaws;
  (k)
              issue
      its opinion on the Executive Board’s management report and accounts, and
      authorize the distribution of interim
dividends;
  (l)
              attribute
      to the Company’s directors and officers their share in the profits shown
      on the Company’s balance sheets, including interim balance sheets, subject
      always to the limits and other provisions under the law and these
      Bylaws;
  (m)
              authorize
      any change in the Company’s accounting or report presentation policies,
      unless such change is required by the generally accepted accounting
      principles in the jurisdictions in which the Company
    operates;
  (n)
              appoint
      and dismiss the Company’s independent
auditors;
  (o)
              approve
      the issue of shares or subscription bonuses up to the limit of the
      Company’s authorized capital, determining the issue price, the manner of
      subscription and payment and other terms and conditions for the issuance,
      and determining also if preemptive rights over the shares to be issued
      shall be granted to shareholders in the case provided for in the Article 7
      of these Bylaws;
  (p)
              approve
      the issue of simple non-convertible debentures, without real
      security;
  (q)
              approve
      the Company’s acquisition of its own shares, to be held in treasury or for
      cancellation;
  (r)
              unless
      provided for in the annual budget or in the business plan then in effect,
      approve business transactions and contracts of any kind between the
      Company and its shareholders, directors and/or officers, or between the
      Company and the direct or indirect controlling shareholders of the
      Company’s shareholders;
  (s)
              authorize,
      in advance: (i) the execution by the Company of any contract, including,
      for the purposes of illustration, contracts for the acquisition of assets
      or interests in other companies; or (ii) the grant, by the Company, of
      loans, financing or real or
  7
 
  personal
security in favor of its controlled companies (with the exception of special
purpose companies in which the Company holds 90% or more of the total and voting
capital) or third parties, provided always, in the cases contemplated in items
(i) and (ii) above, that the contracts involve transactions with a term greater
than 48 (forty-eight) months (with the exception of contracts with public
utilities providers and other contracts which have uniform terms and conditions,
which shall not be subject to prior approval by the Board of Directors) or an
amount greater than R$15,000,000.00 or 1.5% of the Company’s total consolidated
assets (the “Reference Value”);
 (t)
              approve
      any change in the Company’s headquarters, and the opening, transfer or
      extinction of branches, agencies, offices, warehouses, representation
      offices and any other establishments anywhere within Brazilian territory
      or abroad, with the exception of the incorporation of, or acquisition of
      interests in, special purpose companies (“SPCs”) and/or consortiums which
      have as their corporate purpose the promotion, management, development,
      construction and sale of real estate projects, which shall be subject only
      to the provisions of Art 30§1;
  (u)
              authorize
      the acquisition, alienation, transfer, assignment, encumbrance or other
      form of disposal, including contribution to the capital of another
      company, for any reason of a substantial part of the Company’s permanent
      assets, permanent assets being understood to be the set of assets on which
      the Company’s business is based, in amounts greater than the Reference
      Value (as defined in item 21(s) above), when such transactions are not
      provided for in the annual budget;
  (v)
              approve,
      in advance, any application by the Company for a decree of bankruptcy or
      judicial or extrajudicial recovery;
and
  (w)
              establish
      the list of three qualified institutions to be submitted to the General
      Shareholders Meeting for the purposes of Article 5 §4 of these Bylaws,
      with respect to the preparation of the appraisal report of the Company’s
      shares for purposes of exiting the Novo Mercado, cancellation of
      registration as a publicly-held company registration or public tender
      offer.
  SECTION IV.III. – EXECUTIVE
BOARD (DIRETORIA)
  Article 22.The Executive
Board is the corporate body that represents the Company, and is responsible for
performing all acts of management related to the Company’s
business.
  Article 23.The Executive
Board is not a collegiate body, but it may meet whenever necessary to deal with
operational matters, at the discretion of the Chief Executive Officer, who shall
also chair the meeting.
  Sole Paragraph.The quorum for
meetings of the Executive Board is a majority of the Company’s
officers.
  Article 24.In the event of a
vacancy on the Executive Board, or incapacity of an officer, the Board of
Directors shall elect a new officer or appoint a substitute from among the
remaining officers, and in both cases shall fix the term of office and
remuneration of the new officer or substitute.
  8
 Article 25.The Executive
Board is composed of at least two (2) and no more than eight (8) officers, all
resident in Brazil, who may but need not be shareholders.  The
officers shall be elected by the Board of Directors for a term of three (3)
years, re-electing being permitted, and may be removed by it at any
time.
  Article 26.From among the
officers, one shall be appointed Chief Executive Officer (Presidente), one Chief
Financial Officer (Diretor
Financeiro), one Investor Relations Officer (Diretor de Relações com os
Investidores)and the remaining
officers shall not have a specific designation.  Accumulation of
functions is allowed.
  Article 27.The Chief
Executive Officer has the following powers and responsibilities:
  (a)
              to
      submit for approval by the Board of Directors the annual work plans and
      budgets, investment plans and new programs to expand the Company and its
      subsidiaries, causing the plans, budgets and programs to be carried out on
      the approved terms;
  (b)
              to
      formulate the Company’s operating strategies and directives and to
      establish the criteria for executing the resolutions adopted at the
      General Shareholders’ Meetings and meetings of the Board of Directors,
      with the participation of the other
officers;
  (c)
              to
      supervise all the Company’s
activities;
  (d)
              to
      coordinate and supervise the work of the Executive Board, and to call and
      chair its meetings; and
  (e)
              to
      perform such other duties as may be assigned by the Board of
      Directors.
  Article 28.In addition to
such other functions as may be assigned by the Board of Directors, the Investor
Relations Officer is responsible for providing information to investors, the
Brazilian Securities Commission (Comissão de Valores Mobiliários– CVM) and the São Paulo Stock Exchange (BOVESPA), and for maintaining
the Company’s registration up to date, in accordance with the regulations issued
by the CVM.
  Article 29.The Chief
Financial Officer and each of the Officers without specific designation shall
have the functions attributed to them by the Board of Directors.
  Article 30.The Company shall
be represented, and shall only be considered to be validly bound, by the act or
signature of:
  (a) any
two officers;
  (b) any
officer acting jointly with an attorney-in-fact with specific powers;
or
  (c) two
attorneys-in-fact with specific powers.
  § 1.The Company shall be
represented in accordance with the immediately preceding provisions of this
Article in the incorporation of, or acquisition of interests in, special purpose
companies (“SPCs”) and/or consortiums which have as their corporate
purpose
  9
 the
planning, promotion, development, income generation and sale of real estate
projects.
  § 2.The Company may be
represented by a single officer, without the formalities provided for in this
Article 30, for the purposes of receiving service of process or notice and
giving testimony on behalf of the Company.
  § 3.Powers of attorney shall
always be granted or revoked by any two Officers, who shall establish the powers
of the attorney-in-fact.  Except in the case of powers of attorney
granted to represent the Company in legal proceedings, powers of attorney shall
not have a term of more than two (2) years.
  CHAPTER V –
AUDIT COMMITTEE (CONSELHO
FISCAL)
  Article 31.The Audit
Committee shall be installed only at the request of shareholders and shall have
the powers, duties and responsibilities established by law.  The Audit
Committee shall cease functioning at the first General Shareholders’ Meeting
following its formation, and its members may be re-elected.
  Article 32.The Audit
Committee is composed of three (3) effective members and an equal number of
alternates, all elected by the Shareholders in General Meeting.
  § 1.The remuneration of the
members of the Audit Committee shall be fixed at the General Shareholders’
Meeting at which they are elected.
  § 2.The investiture of the
members of the Audit Committee members is conditional upon their execution of
the Statement of Consent from Audit Committee Members (Termo de Anuência dos Membros do
Conselho Fiscal)provided for under the
Novo Mercado Listing Rules.
  Article 33.The Audit
Committee shall meet whenever necessary, at the call of any of its members, and
its resolutions shall be recorded in minutes.
  CHAPTER VI -
FISCAL YEAR, BALANCE SHEET AND RESULTS
  Article 34.The fiscal year
shall begin on January 1st and end
on December 31st of each
year. At the end of each fiscal year and each calendar quarter, the financial
statements provided for by law shall be prepared.
  Article 35.The Company, by
resolution of the Board of Directors, may draw up half-yearly, quarterly or
monthly balance sheets, and declare dividends on account of the profits shown on
such balance sheets. The Company, by resolution of the Board of Directors, may
also declare interim dividends on account of accumulated profits or profit
reserves shown on the last annual or half-yearly balance sheet.
  § 1.The dividends distributed
under the terms of this Article 35 shall be attributed to the mandatory
dividend.
  § 2.The Company may pay
interest on its own capital, to be credited to annual or interim
dividends.
  10
 Article 36.Prior
to any distribution, any accumulated losses and provision for income tax shall
be deducted from the profits for the year.
  § 1. From the amount
calculated in accordance with this Article, the profit shares of the members of
the Company’s management shall be calculated, subject to the legal maximum, to
be distributed according to the rules established by the Board of
Directors.
  § 2. After the deduction
referred to in the preceding paragraph, the following allocations shall be made
from the net profits for the year:
  (a) 5%
(five percent) to the legal reserve, until the legal reserve is equal to 20%
(twenty percent) of the paid-up capital or attains the limit established in
Article 193 §1 of Law 6404/76;
  (b) from
the remaining net profits for the year, after the deduction referred to in item
(a) of this Article and the adjustment provided for in Article 202 of Law
6404/76, 25% (twenty-five percent) shall be allocated to payment of the
mandatory dividend to all shareholders; and
  (c) an
amount not greater than 71.25% (seventy-one and twenty-five one-hundredths
percent) of the net profits shall be allocated to the creation of an Investment
Reserve, for the purpose of financing the expansion of Company’s and of its
controlled companies’ business, through subscribing for capital increases,
creating new projects or participating in consortiums or other types of
association, among other means of achieving the Company’s corporate
purpose.
  § 3. The reserve established
in item (c) above may not exceed 80% (eighty percent) of the Company’s capital.
Should the reserve reach such limit, the Shareholders in General Meeting decide
on the allocation of the excess, either distributing it to the shareholders or
using it to increase the capital of the Company.
  § 4. After the distribution
provided for in the previous paragraphs, the Shareholders in General Meeting
shall determine the allocation of the remaining balance of the net profits for
the year, after hearing the Board of Directors and subject to applicable
law.
  CHAPTER VII -
CONTROL AND DIFFUSE CONTROL
  Article 37.Any disposal of
control of the Company, in either a single transaction or a series of
transactions, shall be contracted subject to a condition, either precedent or
subsequent, under which the acquirer of control undertakes to make a public
tender offer for the shares of the remaining shareholders in accordance with
applicable law and the Novo Mercado Listing Rules and on terms that ensure equal
treatment with the disposing shareholder.
  Article 38.The public tender
offer referred to in the Article 37 shall also be made:
  (a) in
the event of an assignment for value of rights to subscribe for shares or other
securities or rights convertible into shares, which assignment results in a
Disposal of Control of the Company; and
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  (b) in
the event of a disposal of control of a company that holds Control of the
Company, in which case the Disposing Controlling Shareholder shall be obligated
to declare to the São Paulo Stock Exchange – BOVESPA the value attributed to the
Company in the disposal and to submit documentation to prove the declared
value.
  Sole Paragraph.For purposes
of these Bylaws:
  “Disposal of Control”
means the transfer to a third party, for value, of Control Shares;
  “Control Shares” means
the block of shares that gives, either directly or indirectly, the holder(s)
sole or shared Control of the Company; and
  “Disposing Controlling
Shareholder” means the Controlling Shareholder, when it causes a disposal
of control of the Company.
  Article 39.Any person which
holds shares in the Company and subsequently acquires Control by reason of a
private purchase and sale agreement made with the Controlling Shareholder
involving any number of shares is required to:
  (a) make
the public tender offer referred to in Article 37;
  (b)
compensate shareholders which have purchased shares on the stock exchange in the
six (6) months preceding the Disposal of Control, by paying the difference
between the price paid to the Disposing Controlling Shareholder and the price
paid on the stock exchange for shares in the Company during the said six-month
period, duly adjusted for inflation; and
  (c) take
such action as may be necessary to restore the free float of the Company’s
shares to at least 25% (twenty-five percent) of the total outstanding shares in
the Company, within the six (6) months following the acquisition of
Control.
  Article 40.The Company shall
not record (i) any transfer of shares to the Purchaser of Control, or to any
other person(s) which acquire Control until such time as they have executed the
Statement of Consent from Controlling Shareholders (Termo de Anuência dos
Controladores); or (ii) any Shareholders’ Agreement that provides for the
exercise of Control unless the signatories to the agreement have executed the
Statement of Consent from Controlling Shareholders.
  Sole Paragraph.For purposes
of these Bylaws:
  “Purchaser” means the
person to whom the Disposing Controlling Shareholder transfers Control in a
Disposal of Company Control;
  “Disposal of Company
Control” means the transfer, for value, of Control Shares;
and
  “Statement of Consent from
Controlling Shareholders” means the instrument by which the new
Controlling Shareholders, or shareholders which join the control group of the
Company, assume personal liability for complying with the Novo Mercado Agreement
(Contrato de Participação no
Novo Mercado), the Novo Mercado Listing Rules, the
  12
 Arbitration
Clause and the Arbitration Rules, in the form set out in Exhibit C to the Novo
Mercado Listing Rules.
  Article 41. In the case of
Diffuse Control over the Company,
  (a)
              whenever
      the Shareholders in General Meeting approve cancellation of the Company’s
      registration as a publicly-held company, the public tender offer shall be
      made by the Company itself, provided, however, that the Company may
      acquire shares held by shareholders which voted in favor of cancellation
      of the Company’s registration at the General Meeting at which the
      cancellation was approved only after it has acquired the shares held by
      the shareholders which did not vote in favor of cancellation and which
      accept the public tender offer; and
  (b)
              whenever
      the Shareholders in General Meeting approve the Company’s exit from the
      Novo Mercado, due to listing of the Company’s shares for trading off the
      Novo Mercado or to a corporate reorganization in which the shares of
      resulting company are not admitted for trading on the Novo Mercado, but
      without cancellation of the Company’s registration as a publicly-held
      company, the public tender offer shall be made by the shareholders which
      voted in favor of the exit at the General
  Meeting.
  Article 42.In the case of
Diffuse Control over the Company, where BOVESPA determines that the price of
securities issued by the Company shall be quoted separately, or that trading in
securities issued by the Company on the Novo Mercado shall be suspended by
reason of non-compliance with obligations under the Novo Mercado Listing Rules,
the Chairman of the Board of Directors shall call, within the two (2) days
following the determination (counting only the days on which the newspapers
habitually used by the Company are issued), an Extraordinary General Meeting of
Shareholders to replace the entire Board of Directors.
  § 1.In the event the
Extraordinary General Meeting of Shareholders referred to in this Article 42 is
not called by the Chairman of the Board of Directors within the two-day time
period, the meeting may be called by any shareholder of the
Company.
  § 2.The new Board of
Directors elected at the Extraordinary General Meeting of Shareholders referred
to in the preceding provisions of this Article 42 shall cure the non-compliance
with the obligations under the Novo Mercado Listing Rules in the shortest period
of time possible or within the new time period granted by BOVESPA for this
purpose, whichever is shorter.
  Article 43.In the case of
Diffuse Control, where the Company exits the Novo Mercado by reason of
non-compliance with obligations in the Novo Mercado Listing Rules resulting
from:
  (a) a
resolution adopted at a General Meeting of Shareholders, the public tender offer
shall be made by the shareholders which voted in favor of the resolution that
resulted in non-compliance; and
  (b) an
act or event of management, the Company shall make a public tender offer for
cancellation of its registration as a publicly-held company, directed to all the
Company’s shareholders. In the event the Shareholders in General Meeting resolve
to
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 maintain
the Company’s registration as a publicly-held company registration, the public
tender offer shall be made by the shareholders which voted in favor of the
resolution.
  CHAPTER VIII -
LIQUIDATION
  Article 44.The Company shall
be dissolved and enter into liquidation in the cases provided for by law, and
the Shareholders in General Meeting shall establish the manner of liquidation
and install the Audit Committee, which shall function during the period of
liquidation.  The Board of Directors shall appoint the liquidator or
liquidators and establish their powers and remuneration.
  CHAPTER IX -
ARBITRATION
  Article 45.The Company and
its shareholders, officers, directors and members of the Audit Committee are
obligated to resolve by arbitration any and all dispute or controversy which may
arise between or among them arising out of or connection with, in
particular,  the application, validity, effectiveness, interpretation
or violation (and the effects thereof) of the provisions of Law 6404/76, these
Bylaws, rules and regulations issued by the National Monetary Council, the
Central Bank of Brazil, the Securities Commission – CVM or the Securities and
Exchange Commission, and any laws, rules or regulations applicable to the
operation of the capital market in general, in addition to the provisions of the
Novo Mercado Listing Rules, the Novo Mercado Participation Agreement and the
Arbitration Rules of the Market Arbitration Chamber.
  CHAPTER X -
GENERAL PROVISIONS
  Article 46.The Company shall
comply with Shareholders’ Agreements registered in accordance with Article 118
of Law 6404/76.  The Company’s management shall refrain from recording
the transfer of shares made contrary to such Shareholders’ Agreements and the
Chairman of General Shareholders’ Meetings and Board of Directors meetings shall
not count votes cast in violation of such Shareholders’ Agreements.
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