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Article 1º) Saraiva S.A. Livreiros Editores is an open capital company ruled by these Bylaws and by the law in force in the country.

Sole Paragraph) The Company, which was originally “Saraiva & Cia” by name, was organized by the bylaws filed in the Board of Trade of the State of São Paulo, under No. 41.411, in session dated of 01/24/1933, having converted to a limited company on 10/15/1947, by public deed filed in the Board of Trade of the State of São Paulo under No. 34.497, in session dated of 10/21/1947.

Article 2) The Company has head-office and venue at Rua Henrique Schaumann, No. 270, 10º andar, Cerqueira César, CEP [Zip Code] 05413-909, in the City of São Paulo, in the Federative Republic of Brazil.

Sole Paragraph) At the option of the Board of Directors, the Company may open, maintain, transfer and close branches throughout national territory and abroad.

Publishing, industry and sale of books and publications in general;
Educational activity, including educational support services;
Purchase and sale of stationary, utensils and office materials, school products, toys and others, CD-ROMS, audio and video recordings, electronic equipment, computers and their programs, photography articles and equipment, as well as the processing of photographic materials, in addition to snacks bar services;
The organization, systematization, reception and transmission, and filing of data, information and texts, and their sale in the country or abroad, mainly upon transmission by electrical, electronic, optical and magnetic media, as well as the sale of equipment, accessories and the components needed for the use of these products, in addition to the creation of other related programs;
The import and export of products and services covered in the corporate purpose, filing for such purpose with the competent government department, the Brazilian Central Bank, and other holding entities of Foreign Trade;
Interest in other companies as partner, shareholder or quota holder.

Article 5) The Capital Stock of the company is of one hundred and ninety million, nine hundred and seventy-eight thousand, one hundred and fifteen reais and seventy-one cents (R$ 190,978,115.71), fully paid-in and divided on twenty-eight million, five hundred and ninety-six thousand, one hundred and twenty-three (28,596,123) shares without par value, which nine million, six hundred and twenty-two thousand, three hundred and thirteen (9,622,313) are ordinary shares, and eighteen million, nine hundred and seventy-three thousand, eight hundred and ten (18,973,810) are preference shares.

Paragraph 1) The shareholders who hold preference share of the company are assured to the following rights or advantages:

Right to restricted vote as described in Article 6 below;
Right to alienate preference shares in the event of Alienation of the Power of Control of the Company, pursuant to the terms of Chapter VI hereof;
Dividends equal to those attributed to ordinary shares;
Interest in the distribution of shares improved resulting from the capitalization funds, accrued profits, and any other funds, in equal conditions with shareholders holders of ordinary shares.

Paragraph 2) Conversion of ordinary shares into preference shares and vice-versa is not allowed.

Article 6) The preference shares of the Company which number may correspond, under the terms of Article 8, Paragraph 1, III, Law No. 10.303/01, up to two-thirds (2/3) of all issued shares, confer upon its holders voting rights in the following subjects:

Conversion, incorporation, merger or spin-off of Company;
Approval of agreements between the Company and the Controlling shareholder (as defined in paragraph I of Article 22 hereof), directly, or through third parties, as well as other companies which the Controlling shareholder has interest in, whenever that, by legal or statutory provision, decided in Shareholders’ Meeting;
Assessment of the assets used to increase the Capital of the Company;
Choice of the institution or specialized company to determine the Company’s Economic Value, under the conditions established in articles 28 and 29 hereof;
Amendment or change in the statutory provisions that amend or change any of the following provisions:

Compliance to the provided in Chapter VI hereof;
Observance, in the election of Board of Directors, with the joint term of up to two (2) years, and of other provisions related to the Board of Directors and the Fiscal Council contained in the Rule of Differentiated Practices of Corporate Governance Level 2 ;
Compliance to the provided in Chapter VIII hereof;
Any of the rights established in Article 5, Paragraph 1, and in Article 6, I to IV hereof.

Sole Paragraph) Voting right established in subparagraph V of this article shall prevail as long as the Agreement to adopt Rule of Differentiated Practices of Corporate Governance Level 2 is in effect.

Article 7) The increase of Capital Stock that implies in increase in the number of preferential shares in inequality with the species and categories of shares in force is authorized.

Article 8) The Company is authorized to increase its Capital Stock, upon issuing new shares for subscription, by resolution of the Board of Directors, and regardless of statutory reform, up to four million (4,000,000 shares), even though not following the proportion between the several types or categories of shares, of this amount up to five hundred thousand (500,000) can be directed for the granting of share options pursuant to Paragraph 3 below.

Paragraph 1) The Board of Directors shall set forth the conditions for issuance and subscription, including price and term for the payment and method for the exercise of and how to exercise the preemptive rights of shareholders.

Paragraph 2) The Company may, by resolution of the Board of Directors and within the limits of the authorized capital issue shares,to be placed for sale on the Stock Exchange or public subscription, or upon exchange of shares in a takeover bid for control, under Articles 257 to 263, Law No. 6404/76, without giving the preference to the former shareholders, or establishing term for exercising this inferior right to the referred in Article 171, Paragraph 4, Law No. 6404/76.

Paragraph 3) The Company may, within the limit of authorized capital, grant options to purchase shares to its directors or employees, or individuals providing services to it or subsidiary, according to a plan approved by the Shareholder’s Meeting.

Paragraph 4) The resolutions of the Board of Directors, regarding this article shall abide by the quorum provided at the end of Paragraph 3 of Article 14 below.

Article 9) The shares of the Company adopt the book-entry form and shall remain in deposit accounts in behalf of the holder, in a financial institution chosen by the Board of Directors.

Paragraph 1) The depositary financial institution may charge from shareholders, pursuant to Paragraph 3 of Article 35, Law No. 6404/76, the cost of services for transfer of ownership of book-entry shares.

Paragraph 2) The Company may, by resolution of the Board of Directors and upon notice to the Stock Exchanges where its shares are traded, suspend the share transfer services, for periods not exceeding, each a fortnight, or a total of ninety days during the year..

Article 10) Unless in the events of Article 8, Paragraph 2 and 3 hereof, the shareholders shall have preference in subscribing shares issued by the increase of Capital Stock, in proportion to the number of shares held.

Sole Paragraph) The period for exercise of the preemptive right is always statutory retention period and will be of 30 (thirty) days, unless: a) if it is set by the Shareholder’s Meeting or by the Board of Directors, as appropriate, for a longer term, or b ) in the event of Article 8, Paragraph 2, in fine, hereof.

Article 11) each ordinary share corresponds to one vote in the Shareholders’ meetings.

Article 12) The Company shall be managed by the Board of Directors and the Management.

Paragraph 1) The remuneration of members of the Board of Directors and Directorship shall be set forth by the Shareholders’ Meeting, which may only set forth the overall limit or individualize it for one or more directors.

Paragraph 2) It is given to administrators, followed the statutory provisions and Article 152, Law No. 6404/76, the participation of up to ten percent (10%) of annual profits.

Paragraph 3) The overall value of interest in each exercise will be approved by the Shareholders’ Meeting in vote on the allocation of income, the distribution among the management offices and individualization by the manager, following the provisions in the Articles 15, VIII, and 18, I, hereof.

Article 13) The Board of Directors is a collegiate deliberative office and will be comprised of at least five (5) and a maximum of seven (7) members, appointed Directors, all shareholders, residing in the country, elected by the Shareholders’ Meeting with the mandate of 1 (one) year, allowed to successive reelection.

Paragraph 1) As of the Annual Shareholders’ Meeting, 2006, at least twenty percent (20%) of the Directors shall be independent, i.e., each of them shall observe the following: (i) shall not have bind with the Company, except in equity participation, (ii) shall not be the Controlling Shareholder (as defined in Article 22 below), spouse or relative within the second degree, or not be or have been, in the last 3 (three) years, binding to a company or entity related to the Controlling shareholder (people binding to government education institutions and / or educational research are excluded from this restriction), (iii) shall not have been in the last 3 (three) years, an employee or Manager of the Company, of the Controlling shareholder or controlled company by the Company, (iv) shall not be supplier or buyer, direct or indirect, of services and / or the Company's products, in magnitude that implies in loss of independence, (v) shall not be an employee or manager of a company or organization that is offering or requesting services and / or products from the Company, (vi) shall not be spouse or second degree relative of any manager of the Company, (vii) shall not receive any other compensation beyond that of Company's Director (cash dividends arising out from investment in the capital are excluded from this restriction).

Paragraph 2) In the compliance of the percentage abovementioned if the result is a fractional number of members of the Board of Directors, proceed to rounding up to a full number (i) immediately above, if the fraction is equal to or greater than 0.5 (five tenths) or (ii) immediately below, if the fraction is less than 0.5 (five tenths).

Paragraph 3) Members of the Board of Directors shall be vested in their positions upon the signature of this Article of Incorporation in term drafted in the specific book. Members of the Board shall remain in office and perform their duties until their replacements are elected, unless otherwise decided by the Shareholders’ Meeting. Their inauguration shall be subject to signing of the Consent Term of the Directors, pursuant to the Rule of Differentiated Practices of Corporate Governance Level 2.

Article 14) The President and Vice-President of the Board of Directors shall be chosen by the Shareholders’ Meeting.

Paragraph 1) The Chairman of the Board shall convene and preside at meetings of this office, and the Vice-President shall replace him or her in his/her incapacity or absences.

Paragraph 2) In the event of vacancy of the position or temporary incapacity of Director, the successor shall be appointed by the remaining Directors until the first Shareholders’ Meeting, which decides the subject.

Paragraph 3) The Board of Directors shall meet as often as necessary, with the presence of at least three (3) of its members, acting by majority vote, unless when dealing with subjects contemplated in the Article 8 hereof, when the Board of Directors shall act only upon the affirmative vote of at least four (4) Directors, including the Chairman of the Board.

Paragraph 4) In the event of a tie in the resolutions of the Board of Directors, the vote of the President or Vice President replacing the President shall prevail, unless provided the foregoing paragraph.

Paragraph 5) the meetings will be drafted by a member of the Board of Directors appointed by the President, the respective minutes, which shall be recorded in the specific books and signed by members present, being published whenever required by law.

determine the general direction of the Company's business;
elect and remove directors of the Company and set forth their duties, complying with the standards established in Article 17 hereof;
inspect the management of directors, reviewing, periodically, books and documents of the company, requesting information about agreements and other acts related to business;
call the Shareholders’ Meetings, followed the legal rules and statutes;
authorize the Board of Directors to dispose of fixed assets, constitute real burdens over the on social assets and provide warranties and obligations of third parties, rendering unnecessary such authorization in the event set forth in Article 17, Paragraph 1, "f", Paragraph 2, "b" and "g", and Paragraph 3,"e" and "f ", hereof;
authorize the acquisition, disposal, cancellation or holding in treasury shares issued by the Company;
appoint and dismiss independent auditors;
define, when the Shareholders’ Meeting sets the overall remuneration of managers, the portion corresponding to the Management and the Board of Directors as well individualize it for the members of the latter.

Article 16) The Management has full powers of management, representation and management of the Company, which is needed to fully perform the corporate purpose, following by order the rules of Article 17 and the powers conferred by the Board of Directors pursuant to Article 15 hereof.

Paragraph 1) The Management will be comprised by seven (7) members, shareholders or not, resident in the country, designated by: CEO, CFO, Sales Director, Legal Editorial Director, Human Resources Director, Director of Educational Systems, and Directors with no specific designation, all elected by the Board of Directors, with term of one (1) year, allowed the successive reelection. The inauguration of the Managers shall be subject to the execution of Consent Agreement of the Directors, pursuant to the Rule of Differentiated Practices of Corporate Governance Level 2.

Paragraph 2) In the absence or temporary disability of directors, the Board of Directors may distribute the functions of the director absent or impeded among other directors, however, maintaining compliance with the provisions of Article 17.

Paragraph 3) In the event of any vacancy of the position, or permanent disability of director, the Board of Directors will decide the matter, indicating the substitute to complete the term of office thereof or keep the position vacant, distributing, in this case, the duties of that director among the other directors, subject to the provisions of Article 17.

Paragraph 4) The Board of Directors shall appoint a director to also perform, cumulatively as Director of Investor Relations.

Article 17) The Board of Directors, in the exercise of its management powers, representation and administration, shall always be subject to the conditions stipulated in the following paragraphs.

Paragraph 1) Individually, any of the directors in exercise may: a) draw, endorse for bank collection and pay off bills, b) endorse checks and money orders, provided for deposit in bank accounts of the Company; c) sign lists of bills for discount, deposit and collection; d) sign any correspondence, forms for payment of taxes and contributions, applications and petitions to the Public Offices and Local, State and Federal Governments, Municipal institutions and banks, in media for collection of taxes and social contributions or administrative proceedings of any kind, e) to hire and dismiss employees, vendors, representatives and agents, f) acquire, dispose of or encumber fixed assets, including real estate, provided that their individual value does not exceed one percent (1%) of the equity of the Company, indicated on the latest financial statements for the fiscal year published; g) receive summons or subpoena in any judicial or managing proceedings.

Paragraph 2) Jointly, any two (2) executive managers in exercise may: a) issue checks, authorize debits to bank accounts, enter into loan agreements with banks and leasing to companies formed for this purpose, b) issue, accept, encumber or dispose of promissory notes and bills of exchange, bank discount provided to or guaranteed obligations in agreements for financing and leasing, and proxies specifically provided for such purposes, c) endorse any debt securities, including duplicates , promissory notes, bills of exchange and certificates of custody, with the exception of checks, d) take custody and remove from custody securities and other movable property, e) appoint proxy to give them the powers of the ad-judicia and extra clause, and receive citation, confess, acquiesce, give, receive and give quittance of debt; f) enter into agreements, including publishing, sale or partnership with government and private entities, leasing of movable and immovable property, or services; g) provide guarantees to companies controlled directly or indirectly, backing the securities and the responsibility of these companies, h) acquire, subscribe for, sell and redeem securities of fixed income and equity, among them shares and bonds, provided they are not issued by the Company or any company controlled directly or indirectly, also abiding by the provision of Paragraph 4, item "e".

Paragraph 3) Jointly with the CEO, any manager in exercise may: a) endorse checks, b) constitute attorney-in-fact, granting him/her powers the powers they are vested with, c) represent the Company together with its subsidiaries, d) acquire, dispose of or encumber fixed assets, including real estate, provided that their individual value does not exceed twenty percent (20%) of the equity of the Company appearing on the latest financial statements for fiscal year published, and) enter into agreements that encumber company assets, in value not exceeding twenty percent (20%) of the equity of the Company appearing on the latest financial statements for fiscal year published; f) provide guarantee on behalf of individual for the lease of residential property to enable installation of Company manager, or a company controlled by it, in municipality, other than that of its domicile, where the establishment for which the management is assigned is located.

Paragraph 4) Jointly with the CEO, and with prior and express authorization of the Board of Directors, any of the managers in exercise may: a) acquire, dispose of or encumber shares and quotas of companies controlled directly or indirectly; b) acquire, dispose of or encumber fixed assets, including real estate, where their individual value exceeds twenty percent (20%) of the equity of the Company appearing on the latest financial statements for fiscal year published; c) enter into agreements that encumber assets, at value above twenty percent (20%) of the equity of the Company appearing on the latest financial statements for fiscal year published, without prejudice to other provisions of this Article; d) provide securities to individuals, except as specified in item "g ", Paragraph 3 of this article, or to legal person, other than those controlled directly or indirectly, and guarantee the bonds of responsibility of such persons, provided there is interest by the Company in such acts; e) promote the participation of the Company, in order to obtain independent or shared control in any other company, by purchase or subscription of shares or quotas, as well as withdraw the Company from such partnerships; f) constitute proxy, granting him/her powers their vested powers; g) issue and accept other credit instruments, including promissory notes and bills of exchange, subject to the exception contained in subheading “b” of Paragraph 2 above.

Individualize the remuneration of Directors, whenever the Shareholders’ Meeting establishes globally to the managers and after the Board of Directors exercise the powers mentioned in Article 15, VIII, hereof;
resolve the opening, maintenance, transfer and termination of branches;
discuss administrative matters, observing, if any, the decisions of the Shareholders’ Meeting and the Board.

Article 19) The Board shall always convene with the attendance by at least three (3) directors, provided summoned by the President, which shall set the agenda, preside the meeting and appoint the Secretary.

Paragraph 2) Decisions shall be made by majority vote of the present Directors, prevailing, in the event of a tie, the vote of the CEO.

Article 20) The Company's Fiscal Council, composed of at least 3 (three) and a maximum of five (5) members and their alternates, shall work in the fiscal years in which it is created by resolution of the Shareholders’ Meeting, in the events provided in the law.

Paragraph 1) the Shareholders’ Meeting which discuss the installation of the Fiscal Council shall establish the number of its members, elect and establish their remuneration.

Paragraph 2) Members of the Fiscal Council shall take office upon the signing of a term drawn up on specific book. The inauguration shall be conditioned to the Consent Agreement of the members of the Fiscal Council, pursuant to the Rule of Differentiated Practices of Corporate Governance Level 2.

Paragraph 3) The Internal Rules of Procedure of the Fiscal Council shall be approved by the Shareholders’ Meeting.

Article 21) The Shareholders’ Meeting shall meet ordinarily, in the first quarter after the end of the fiscal year and, extraordinarily, whenever corporate interests so require it, upon call pursuant to the law.

Paragraph 1) The Shareholders’ meeting will be presided by the President of the Board, the Vice-President when exercising the Presidency of the Board or, in their absence, by the shareholder indicated by the board. The President of the Shareholders’ meeting shall choose a secretary from those in attendance.

Paragraph 2) Those present at the Meeting must prove their capacity as shareholder, while holders of book entry shares or in custody under Article 41 of Law No. 6404/76 deposit with the Company for this purpose, a receipt issued by the depository financial institution, under set out in the summons, save when the Chair of the Assembly considers other sufficing means of verification.

CHAPTER VI - Alienation of Share Control, Cancellation of Registration of an Open Capital Company and Discontinuity of Differentiated Practices of Corporate Governance Level 2.

Article 22) The Alienation of Company’s Control Power, whether a single operation, and through successive operations, shall be contracted under condition, suspensive or resolutive, that the purchaser of control undertakes to make a public offering of acquisition of the shares of others shareholders, following the conditions and terms provided in the law in force and the Rule of Differentiated Practices of Corporate Governance Level 2, and the monetary correction provided in Paragraph 5 below, in order to assure equitable treatment to the Alienating Controlling shareholder, following the provisions contained in Article 24.

Paragraph 1) For purposes hereof, the following terms written on capital letters will have the following meanings:

"Controlling shareholder" means (i) the shareholder exercising the Company’s Holding Power, (ii) shareholders are not bind by a shareholders' deal to exercise the Company’s Holding Power, or (iii) the group of shareholders bind by deal of shareholders or under common holding that exercises the Company’s Holding Power.

"Alienating Controlling shareholder" means the Controlling Shareholder that promotes the Company’s Holding Power.

"Holding Shares" means the block of shares that assure, directly or indirectly, give its holder (s), the exercise of individual and / or Company’s Holding Power.

"Outstanding Shares" means all shares issued by the Company, except shares withheld by the Controlling shareholder, by binding persons, Company’s managers and in treasury.

"Company’s Control Alienation" means transferring to third party, onerous title, of COntrol Shares.

"Controlling Power" means the power effectively used to manage social activities and to guide the functioning of the Company’s offices, directly or indirectly, in fact or by law. There is a presumption related to the holding ownership in relation to the person (s) (s) or group of binding persons by a shareholders' deal or under common control (holding group) who hold shares that assured an absolute majority of votes from shareholders attending the last three Shareholders’ meetings of the Company, although not holding shares that would assure the absolute majority of the voting capital.

"Economic Value" means the value of the Company and its shares which may to be determined by a specialized company, upon the use of known methodology or based on other criteria that may be defined by the Securities Commission ("CVM").

Paragraph 2) Trading in Control Shares between the Controlling Shareholder identified in the Agreement of Differentiated Practices of Corporate Governance Level 2 and their heirs required, and also between the heirs, provided they exercise their Company’s Control Power, even though that may imply the consolidation of Holding power in just one shareholder, does not constitute Control Power Alienation, giving no cause, therefore, to the obligation to perform a public offer pursuant the terms of caput of this article and the caput of Article 24 below.

Paragraph 3) In the event of alienation of shares pertaining to one or more shareholders exercising the Control Power to third party(ies), the public offering in the caput of the Article 24 below, shall only be required as the alienation of the number of shares necessary to the exercise the control power by such third party(ies).

Paragraph 4) The following do not characterize Holding Power Alienation in the following situations: a) payment, with the Company's shares, of capital shares of company, which from such payment becomes holding of the Company and is hold by the Controlling shareholder and; b) reduction of the stock capital of the referred holding company with the return of shares, or dissolution of the company, or even in the event of a spin-off of this company, as long as that the resulting corporation, which has been assigned ownership of the common shares, be integrated solely by the Controlling shareholder.

Paragraph 5) For the purposes of this Chapter, the monetary correction shall be made according to the following rules: a) the index to be used is the IGP-M (General Price Index - Market), calculated and published by Fundação Getúlio Vargas (FGV), or its successor; b) unknown the IGP-M of the month in course, will be used the last disclosed; c) apply the correction index pro rata day and; d) the monetary correction shall start on the date of the payment or payments made to the Alienating Shareholder for the acquisition of Holding Shares, and, the final date, that of the payment or payments made on behalf of other holders of ordinary shares and / or preferred shares; e) whenever monetary correction is due, interest paid by the Savings Account shall also be due, not included thereof the Referential Rate - "TR", or the index replacing it.

Article 23) The public offer referred to in the previous article shall also be performed:

in the events that is onerous assignment of subscription rights for shares and other securities or rights related to securities convertible into shares occur, which may result in the Alienation of Company’s Control;
in the event of alienation of control of the Company’s Controlling Shareholder, and, if so, the Controlling shareholder will be bound to notify the Stock Exchange ("BOVESPA") the value assigned to the Company in such alienation and attach documentation which may proof.

Article 24) The public offer to the holders of ordinary shares shall be performed by a value of 100% (hundred percent) of the amount paid for the Control Shares, and the public offering to holders of preferred shares shall be performed for a minimum amount of 90 % (ninety percent) of the amount paid for the Holding Shares.

Sole Paragraph) The amendment to this statutory clause, regarding the public offering made to the holders of preferred shares may only be resolved by the Shareholders’ meeting with the prior approval of shareholders holders more than half the preferred shares, gathered in special meeting.

Article 25) Those who already hold shares of the Company and acquire the Control Power, due to private shares purchase agreement entered with the Controlling shareholder, involving any number of shares, will be obliged to:

make the public offer referred to in Article 22 hereof, and
reimburse the shareholders who have purchased shares on the shares exchange in the six (6) months preceding to the date of transfer of control of the Company, and shall pay thereof any occasional difference between the price paid to the Alienating Controlling shareholder and the amount paid on the shares exchange values for the Company's shares during the same period, both values are updated according to Paragraph 5 of Article 22 above.

Article 26) The Company will not register any transfer of shares to the buyer of the Control Power, or for the (s) shareholder (s) that may withhold the Control Power, as long as they do not subscribe the Consent Agreement of Controllers pursuant to the provided in the Rule of Differentiated Practices of Corporate Governance Level 2, which will be immediately sent to BOVESPA.

Article 27) No shareholders' agreement providing for the exercise of Control Power may be registered at the Company's head-offices, without the undersigned having subscribed the Consent Agreement of Controllers, which will be immediately sent to BOVESPA.

Article 28) In the public offering for the shares to be performed for cancellation of registration of public company registration, the minimum price to be offered shall correspond to the Economic Value in the assessment report.

Article 29) In the event of the gathered shareholders on Extraordinary Shareholders’ Meeting decide to: (i) discontinuance of Differentiated Practices of Corporate Governance Level 2 for the Company's shares to become registered for trading out of Level 2 or (ii) the corporate reorganization which the resulting company is not classified as holder of standard Corporate Governance Level 2, the shareholder or shareholder’s group that holds the Company’s Control Power shall make the public offering of shares pertaining to other shareholders of the Company, whose price to be offered shall correspond to the Economic Value in the assessment report, in compliance with the legal rules and regulations applicable.

Article 30) The assessment report provided in the Articles 28 and 29 hereof shall be prepared by a specialized company with proven experience and independent of the Company, its directors and holders, and the report shall also meet the requirements of Paragraph 1 of Article 8, Law No. 6404/76 and include the liability provided in the Paragraph 6 of the same article of law.

Paragraph 1) The choice of a specialized company responsible for determining the Company’s Economic Value is the competence of the Shareholders’ meeting, upon presentation by the Board of Directors, triple lists, and the respective resolution, blank votes not considered, and of each share, regardless of kind or category, and following the provided in the Article 6, IV, the right to one vote, taken by majority vote of shareholders representing outstanding shares present at the Shareholders’ meeting, which convenes on first call, shall be attended by shareholders representing at least 20% (twenty percent) of total outstanding shares, or if convened on a second call, may be attended by any number of shareholders representing Outstanding Shares .

Paragraph 2) The costs of preparing the valuation report required shall be fully borne by the selling shareholder.

Article 31) The fiscal year shall end on December 31 of each year, when it will be prepared the financial statements required by law or regulation.

Section 32) From the income of the fiscal year shall be deducted accrued losses and provisions for income tax and social contribution, and from the resulting value, up to ten percent (10%) will be destined to managers, as long as assigned in that fiscal year, to the shareholders, the mandatory dividend at least, mentioned in Article 34, "a" hereof.

Article 33) From the net income corresponding to the income after to the deductions and interests provided in the Article 32 hereof, five percent (5%) shall go to the legal reserve, until it reaches the legal limit.

Article 34) Unless in the event of the Article 202, Paragraph 4, Law 6404/76, shareholders are assured the mandatory dividend corresponding to:

25% of net income, adjusted in accordance with Article 202 of Law 6.404/76, with the wording of Law No. 10.303/01; plus
Balance from the fiscal year’s net income, if any, that remains after the allocations mentioned in the articles 193 to 197 of Law No. 6.404/76, with wordings given by Law No. 10.303/01, following the articles 33 to 35 hereof.

Article 35) After the mandatory dividend referred to in Article 34, "a" hereof, the balance from the net income, if any, may be allocated by the Shareholders’ meeting to the following areas:

reserve for future capital increase, to ensure the company's capitalization, which shall not exceed in any fiscal year, the paid up stock capital;
reserve for contingencies, pursuant to the Article 195 of Law 6404/76;
reserve from retained profits, according to the adopted budget in the Shareholders’ meeting, which shall not exceed in any fiscal year, the share capital;
profit funds to perform, pursuant to the Article 197, Law No. 6404/76, with the wording of Law No. 10.303/01.

Article 36) At the discretion of the Board of Directors, the Company may pay or credit to the shareholders, in whole or in part, the amount equivalent to interest on capital, calculated according to the law in force up to the value that may result from applying Long Term Interest Rate - TJLP pro rata die for the corresponding period.

Sole Paragraph) interest on capital, when paid or credited to shareholders, will be charged, by the net income tax on mandatory.

Article 37) Dividends and interest on capital will be paid upon deposit in bank account in behalf of shareholder and indicated thereof, unless when he or she, with ten (10) days in advance, when requested in writing payment in Company treasury through check drawn to the order of the shareholder.

Article 38) The Company shall not, unless authorized by a majority vote at the special shareholders’ meeting of preferred shares, withhold, over four successive quarters, the availability of funds in an amount exceeding twenty five percent (25%) of its total assets, as long as its economic and financial situation allows it.

§ 1) For the purposes of application of this device: a) consider the values corresponding to the last day of each quarter, according to the balance sheet prepared on the respective dates, and b) the availability of funds corresponding to the amounts recorded under the headings "cash and banks" and "investments" less the sum of the amounts recorded under the headings "Loans and financing" of the current liabilities and "loans and financing" of long-term liabilities.

§ 2) the values that, in each quarter, exceed the percentage of withhold of the availability of funds provided in this Article shall be distributed as dividend or paid as interest on capital, corresponding to the quarter of least withheld surplus, deducting from this surplus the dividends or interest on capital shares stated but not yet paid.

§ 3) Checked the event provided in foregoing paragraph, the statutory clause expressed in this article, shall only be applied again as from the four quarters following the last of the quarters involved in the calculation of the withheld surplus.

§ 4) the distribution of dividends or interest on capital will be made within the fiscal year following the last of the quarters involved in the calculation of the retained surplus.

§ 5) The Company may not, unless if authorized by more than half of the holders shareholders of preferred shares, create a subsidiary for the exclusive purpose of managing its own resources.

§ 6) The change of this statutory clause may only be resolved by the Shareholders’ meeting with the prior approval of shareholders holders of more than half the preferred shares, gathered in special meeting.

Article 39) The Company, its shareholders, managers and members of the Fiscal Council undertake to resolve, by means of arbitration, pursuant to the Rules of the Market Arbitration Chamber ("Arbitration Rules") of BOVESPA, any dispute or controversy that may arise between them, related to or arising out, in particular, the application, validity, effectiveness, interpretation, breach and its effects of provisions of Law No. 6404/76, the Company's Bylaws, rules National Monetary Council, the Central Bank of Brazil and the CVM, as well as other rules concerning the operation of capital markets in general, beyond those contained in the Rule of Differentiated Practices of Corporate Governance Level 2, the Agreement of Adoption of Differentiated Practices of Corporate Governance Level 2 of the Rules of Arbitration.

Sole Paragraph) The Brazilian law shall be applicable only to the merits of any controversy, as well as the implementation, interpretation and validity of this compromising clause. The arbitration will take place in the City of São Paulo, São Paulo, place where the arbitrary court shall give its decision. The arbitration shall be managed by the Market Arbitration Chamber, performed and judged in accordance with relevant provisions of the Arbitration Rules.

Article 40) The Company may be dissolved and liquidated in the cases and manners provided by law.

Article 41) Cases omitted in this Article of Incorporation will be ruled by the law provisions in force, applicable to the kind.