1 - first private indenture of simple senior debentures ... - Hypermarcas

FIRST PRIVATE INDENTURE OF SIMPLE SENIOR DEBENTURES COMBINEDWITH SUBSCRIPTION WARRANTS, OF HYPERMARCAS S.A.HYPERMARCAS S.A., A Brazilian corporation, with registered offices at AvenidaPresidente Juscelino Kubitschek No. 1217, House 7, Vila Olímpia, in the City of SãoPaulo, State of São Paulo, enrolled at the Taxpayers’ General Registry under CNPJNo. 02.932.074/0001-91, herein represented inn accordance with its Articles ofIncorporation, hereinafter simply called “Issuer” or “Company” on one side; andPLANNER TRUSTEE DTVM LTDA., a financial institution duly authorized to operateby the Central Bank of Brazil, with registered offices at Av. Brigadeiro Faria Lima3900, 10th Floor, in the City of São Paulo, State of São Paulo,enrolled at theTaxpayers’ General Registry under CNPJ No. 67.030.395/0001-46, representing theentirety of the debenture holders acquiring debentures under the present issuance,hereinafter simply called “Fiduciary Agent”,AGREE TO execute the present “First Private Indenture of Simple Senior Debenturescombined with Subscription Warrants, of Hypermarcas S.A.” (“Indenture”) subject tothe following terms and conditions:CLAUSE I - AUTHORIZATIONThe present Indenture is executed in reliance upon a resolution passed by theSpecial Meeting of the shareholders of the Issuer, held on October 22, 2010(“AGE”).CLAUSE II -REQUIREMENTSThe issuance of debentures (“Issuance”) shall be made with due regard to thefollowing requirements:1. RECORDAL OF THE INDENTUREThe Indenture shall be filed at the Board of Trade of the State of São Paulo and anyeventual amendments thereto shall be recorded at the competent office of the realstate registry, in accordance with the provisions of item II and paragraph 3rd of Article62 of Law No. 6,404 dated December 15, 1976 (the “Corporations Law”).2. FILING AND PUBLICATION OF THE MINUTES OF THE SPECIALSHAREHOLDERS MEETING- 1 -

The Minutes of the AGE were filed at the Board of Trade of the State of São Pauloand published in the Official Gazette of the State of São Paulo and in the ValorEconômico newspaper, in accordance with the Corporations Law.3. REGISTRATION OF THE ISSUANCEThe Issuance shall not be subject to recordal at the Brazilian Securities andExchange Commission (“CVM”), as the debentures and their respective series, asdefined herein below, shall be the subject matter of private placement, with no sellingefforts being made to investors.4. LIMITS OF THE ISSUANCEThe present Issuance complies with the limits set forth in Article 60 of theCorporations Law.5. CORPORATE PURPOSE OF THE COMPANYThe corporate purposes of the Company are the following:(a)(b)(c)(d)(e)(f)sale, production, import and export of hygiene and cleaning products (sanitaryand household cleaners), as well as commercial agency for its own account andfor the account of third parties;provision of manufacturing services in the consumption goods industry;production and sale of beverages and food products in general, namely: (i) dairyproducts, cereals, fruit and other animal or vegetable products, including juiceconcentrates, fruit beverages and fruit-flavored juice drinks, pasta, cookies andcandies; (ii) diet products and dietary food products, including production ofsynthetic sugar and sweeteners, dietetic sweeteners, dietetic supplements andstevia sweeteners; (iii) animal feed; (iv) dextrose (corn syrup) sugar and beetsugar; (v) baby food products; (vi) special enriched and fortified food products,dietary supplements and other preserved food products; and (vii)manufacturing, distilling, homogenizing and mixing of sugarcane and otherliquors and distilled beverages, soft drinks, juice drinks, squash and powderflavor.production, manufacturing and sale of equipment, packaging and inputs for theproducts mentioned in item “c” above, for their byproducts and related products,as well as for seeds, fertilizers, chemicals and agricultural products;lease and import of machinery and equipment;labor lease;- 2 -

(g)(h)(i)(j)(k)(l)manufacturing, production, transportation, warehousing, distribution, import andsale of personal hygiene products and toiletries, cosmetics and perfumes;manufacturing, production, transportation, warehousing, distribution, import andsale of medicinal drugs, health-related products, pharmaceuticals, includingallopathic and herbal and homeopathic medicines for human consumption,import of inputs and raw materials for their production, related technological andscientific research and development, commercial agency and marketing ofallopathic and herbal medicines;manufacturing, production, wholesale, import and export of: (i) beverages andbeverage processing raw materials, (ii) herbs for infusion, (iii) smoking Articles,(iv) lubricants, (v) paint and coatings, (vi) raw or processed metals, includingprecious metals, (vii) mechanical and electro-electronic machinery, tools,equipment and appliances, (viii) musical instruments, vehicles and vehicleparts, (ix) furniture and household utensils, (x) leather, (xi) plastics, (xii) buildingmaterials, office materials, (xiii) threads, fabrics, tapestry, sewing notions, (xiv)toys, (xv) clothing, (xvi) plants and (xvii) camping Articles;publications, advertising and marketing services, events, asset management,services, business, construction and commercial agency for the account of thirdparties;sale, production, import and export of insect and rodent control disinfectants,chemical products, insecticides, pesticides, herbicides, household devices,instruments and traps;provision of technical assistance services, cleaning services, furniture andbuilding preservation and immunization services, general material treatmentand processing services; and(m) manufacturing, sale, import and export of waterproof diaper covers, clothdiapers, whether made of cotton or other natural fiber cloth, disposable diapers,menstrual pads and tampons, hospital diapers, diaper liners, pads and relatedproducts for hospital use, cotton swabs, makeup removers and cleansing pads;(n)(o)(p)(q)production and sale of veterinary medications;provision of electronic equipment calibration and testing services to thirdparties;sale of medical surgical instruments and materials;bottling, packaging and selling activities for the account of third parties,including repackaging of pharmaceutical salts and pharmaceutical substances,and the sale of those;- 3 -

(r)(s)(t)manufacturing, sale, import and export of latex articles;warehousing, distribution, transportation import and export of any of theproducts listed in items (a) through (r) above; andholding ownership interest in other companies, as shareholder or quotaholder,and participation in ventures engaging in any of the activities listed in items (a)through (s) above.6. AUTHORIZED CAPITALThe Authorized Capital of the Issuer is of R$4,500,000,000 (four billion five hundredmillion Brazilian Reais), which is sufficient for the issuance of subscription warrantsby the Issuer, which shall be allocated to the subscribers of the Issuance, pursuant tothe provisions of Article 77 of the Corporations Law. (“Subscription Warrants”).CLAUSE III - COMMON CHARACTERISTICS TO BOTHSERIES OF DEBENTURESThe Issuance of Debentures shall be subject to the following conditions andcharacteristics:1. VALUE OF THE ISSUANCEThe aggregate value of the Issuance as of the Date of Issuance (as defined hereinbelow) is of R$1,099,996,084.00 (one billion, ninety-nine million, nine hundred ninetysixthousand and eighty-four Brazilian Reais).2. UNITARY PAR VALUEThe Debentures shall have a unitary par value of R$1,002.32 (one thousand and twoBrazilian Reais and thirty-two cents) as of the Date of Issuance, which value shall beupdated as provided for in this Indenture.3. DEBENTURESThe Issuance of Debentures will be divided into two (2) series, as defined hereinbelow, and the subscriber of one (1) Debenture of the 1st Series shall be obliged tosubscribe for one (1) Debenture of the 2nd Series and vice-versa, on a concomitantbasis. Accordingly, each subscriber shall always subscribe for, at least, twoDebentures, one of the 1st Series and one of the 2nd Series.4. NUMBER OF DEBENTURESThe Company shall issue 1,097,450 Debentures, of which:- 4 -

(i) 548,725 (five hundred forty-eight thousand, seven hundred twenty-five)Debentures of the 1st Series and(ii) 548,725 (five hundred forty-eight thousand, seven hundred twenty-five)Debentures of the 2nd Series.5. DESTINATION OF THE PROCEEDS AND PURPOSE OF THE ISSUANCEThe proceeds resulting from the Issuance shall be applied to the implementation ofthe growth strategy, of the business plan and to the reinforcement of the capitalstructure of the Hypermarcas Group and to the acquisition of Neo Química.6. FORM AND CLASSThe Debentures shall be in book-entry form, without issuance of provisory certificatesor debenture certificates.7. TYPEThe Debentures shall be Senior Debentures as provided for in item 13 of this Clause,below.8. DATE OF ISSUANCEFor all legal purposes and effects, the date of the present Issuance shall be October15, 2010 (the “Date of Issuance”).9. MANDATE BANK AND BOOKKEEPING AGENT; DEBENTURECERTIFICATES9.1. The mandate bank and the bookkeeping agent of the Issuance shall beBanco Bradesco S.A., a financial institution with registered offices atAvenida Yara, s/n, Cidade de Deus, in the City of Osaco, State of SãoPaulo, enrolled at the Taxpayers General Registry under CNPJ/MF n.º60.746.948/0001-12 (the “Mandate Bank”).9.2. No certificate representing the Debentures shall be issued. For all legalpurposes and effects, ownership of the Debentures shall be evidencedby the statement issued by the Mandate Bank.10. PRIVATE PLACEMENTThe Debentures shall be issued for private placement only, with no selling effortsbeing made to investors. Partial placement is permitted. The placement shall bemandatorily carried out in accordance with the provisions of item 3 of this Clause III.11. SUBSCRIPTION WARRANTS- 5 -

As an additional benefit, Subscription Warrants shall be allocated to the subscribersin the Issuance, as provided for in item 3 of this Clause III, entitling their holder tosubscribe for common shares issued by the Company, subject to the terms andconditions set forth in Clause VII below and in the form of Exhibit II 1 to this Indenture.12. PREEMPTIVE RIGHTS OF THE SHAREHOLDERS OF THE ISSUER12.1 By virtue of the attribution of Subscription Warrants to subscribers of theIssuance, the Issuer’s shareholders shall be entitled to preemptive rights in thesubscription of Debentures, as provided for in item 3 of this Clause III, pro ratato the number of shares of the Issuer held by them, pursuant to theCorporations Law, in accordance with the respective shareholdings as of thedate of publication of the notice to the Issuer’s shareholders (“PreemptiveRights”), for a term of thirty (30) days counted from the publication of suchnotice (“Notice to Shareholders”) informing them on the Issuance and on theirPreemptive Rights (“Preemptive Term”).12.2 Shareholders willing to subscribe for Debentures pursuant to item 12.1 aboveshall appear exclusively at a branch office of the Mandate Bank indicated inthe Notice to Shareholders, wherein they shall proceed with the execution ofthe subscription bulletin of the Debentures. In the case of a shareholderrepresented by a proxy holder, such proxy holder shall produce thedocumentation evidencing his pertinent powers to subscribe for theDebentures. Shareholders whose shares are in custody at theBM&FBOVESPA Central Depositary (“CBLC”) shall exercise their respectiverights through their custodian agents and in accordance with the rulesestablished by the CBLC.12.3 The execution of the subscription bulletin shall be followed by the effectivepayment of the Subscription Price of the Debentures subscribed for in cashupon the execution of the said bulletin, even in the event that the Debenturessubject to the Issuance are not subscribed for in their entirety. Uponsubscribing for Debentures during the Preemptive Term, the shareholders maystate their interest to subscribe for any eventual excess Debentures notsubscribed for during the Preemptive Term, pro rata to the amountssubscribed for by them. Such interest shall be stated by means of thesubscription bulletin of the Debentures. The term within which to subscribe foreventual excess shall be of ten (10) days from the expiration of the PreemptiveTerm. The number of Debentures, subject to the provisions of item 3 ofClause III, to be allocated to each subscriber (Debentures.First.Allocation)shall be established by multiplying the aggregate number of non-subscribedDebentures (Non.Subscribed.Debentures) by the percentage calculated by the1 Exhibit II shall contain the draft subscription warrant, subject to the exact same conditions as those set forth inClause VII.- 6 -

division between the number of Debentures subscribed for by the relevantsubscriber (Subscribed.Debentures) by the aggregate number of Debentures(Total.Subscribed.Debentures) subscribed by all of the subscribers statingtheir interest in the excess (“First Allocation”), as demonstrated by the formulashown below. Without prejudice to the application of the formula, subscriptionfor the entirety of the excess Debentures, after the first application of suchformula, by any subscriber expressly stating its willingness to subscribe for upto the entirety of the excess, provided that in the event that more than onesubscriber shall state his interest in the subscription for up to the entirety of theexcess, such excess may be allocated among the interested subscribers prorata to the number of Debentures subscribed for by each subscribertheretofore:12.4 The subscription bulletins related to the excess pertaining to the FirstAllocation may be requested at bank branches and the shareholder so willingshall subscribe for the respective Debentures and pay them up forthwith.Shareholders whose custody is held at the CBLC shall exercise their relevantrights through their respective custodian agents and in accordance with therules set forth by the CBLC.12.5 Within a term of up to ten (10) days from the subscription for the excess, theMandate Bank shall remit to the Fiduciary Agent a report informing the positionof the Debenture Holders.13. COLLATERALSo as to secure the timely and full payment of any obligation under the Debentures,such as the principal amount of the debt, interests, penalties and fines, theDebentures shall be of the senior type.14. PLACEMENT TERMThe maximum term provided for the placement of the Debentures by the Issuer shallbe of one hundred and eighty (180) days, counted from the Date of Issuance.15. DATE, PLACE AND CALCULATION OF THE PAYMENT- 7 -

All payments of principal and income to which the Debentures are entitled shall beeffected by electronic transfer of funds (TED or DOC) and shall be made on the datesestablished in this Indenture, subject o the provisions of item 18 below.16. IMPOSSIBILITY OF PAYMENTIn the event that the Issuer is unable to effect any payment, when due, owing to anyDebenture Holder on account of inaccuracy or outdating of the identification data ofsuch Debenture Holder as appearing on the Mandate Bank records, such DebentureHolder shall not be entitled to any late payment interests, fine or compensation;notwithstanding the foregoing, the Debenture Holder shall still be assured all rightsacquired up to the date of the pertinent availability of funds by the Issuer, plus theRemuneration of the Debentures accrued from the date of maturity of the outstandingfinancial obligation until the date of the effective payment.17. DEFAULTUpon the occurrence of a default in respect of any of the Issuer’s obligation underthis Indenture, there shall be applied the provisions set forth in Articles 39 to 47-A ofthe “Provisions Applicable to BNDES Agreements”, which is incorporated in thepresent Indenture as an Exhibit (“Applicable Provisions”); provided, further, that forpurposes of the determination of the overdue debit balance, the Updated Par Valueof the Debentures of the 1st Series, as well as the charges referring to both seriesshall be calculated pro rata temporis for each business day until the date of theeffective payment. The Applicable Provisions shall be construed in such a way that“Beneficiary” shall mean the Issuer, and “BNDES” is the Debenture Holder.18. MATURITY DATE FALLING ON WEEKENDS OR HOLIDAYSEvery maturity date of any event of payment of the Debentures provided for in thisIndenture that shall fall on a Saturday, Sunday or on a national or bank holiday shallbe, for all legal purposes and effects, extended until the first subsequent businessday. All pertinent charges shall be calculated until and including such day, whichshall also be the beginning of and include the following regular period for purposes ofdetermination and calculation of the charges accrued to the Debentures.19. SPECIAL OBLIGATIONS OF THE ISSUER19.1 Until the full settlement of the Debentures and sin addition to all otherobligations under this Indenture, the Issuer hereby undertakes:a) to furnish to the Fiduciary Agent:- 8 -

i. following the end of each fiscal year and until the last business day ofthe legal term within which to disclose the same, a copy of itscomplete financial statements as for and related to that fiscal year,accompanied with the managerial report and the independentauditors’ opinion, except when such information shall be madeavailable to the Debenture Holders in the Issuer’s website within theaforesaid legal term;ii. information on the occurrence of any of the events listed in item 19below promptly after becoming aware of it or as requested by theFiduciary Agent. Such information shall be accompanies with areport by the Issuer containing a description of the event occurredand of the steps the Issuer proposes to take to address the same;iii. copy of any correspondence or judicial or extrajudicial notificationreceived by the Issuer likely to materially affect the Issuer’s ability tocomply with all of its obligations under the present Indenture, withintwo (2) business days after receipt thereof; andiv. a follow up of the application of the proceeds of the present Issuanceby means of a written confirmation, within five (5) business days afterthe relevant request, that it is in compliance with such obligations asprovided for in this Indenture.b) to cause its financial statements to be published within the term and inthe form required by the applicable corporate legislation;c) to keep its accounting records updated and to effect the pertinent entriespursuant to the applicable legislation and regulations;d) to call the General Meeting of the Debenture Holders to resolve on anymatter directly or indirectly related to the present Issuance, in the eventthat the Fiduciary Agent does not do it;e) not to carry on any transaction outside its corporate purposes, subject tothe provisions of its Articles of Incorporation and of the applicable lawsand regulations in force;f) to timely comply with all tax obligations owing to Federal, State and Localtax authorities, except for taxes being challenged in good faith by theIssuer at administrative and/or judicial levels;g) to comply in all material respects with any and all applicable laws, rules,regulations and orders in any jurisdiction in which it operates or hasproperties, particularly keeping a good standing vis-à-vis environmentalauthorities, fully complying with specific environmental laws, and to- 9 -

observe the legislation applicable to disabled individuals, other thanobligations and legislations being challenged in good faith atadministrative and/or judicial levels;h) to promptly inform the Fiduciary Agent of the occurrence of any defaultunder the present Indenture within up to two (2) business days frombecoming aware thereof;i) subject to the provisions of item (g) above, to keep valid and in goodorder in all material respects each and every permit, license,authorization, concession or approval for the Issuer’s manufacturingplants and products that, in any case, represent a value equal to orhigher than 15% (fifteen per cent) of the consolidated revenue of theIssuer except if, within the forty-five (45) days following the date of anynon-renewal, cancellation, intervention, revocation or suspension of theforegoing, the Issuer evidences the existence of a court order authorizingthe regular pursuance of its and/or its affiliated and controlled entities’activities, as applicable, until the renewal or securing of the requiredlicense or authorization;j) to maintain, keep and preserve in good order and operating conditions, inall relevant respects, all of its material assets that are necessary to oradvisable for the appropriate conduction of its business;k) to assure that its financial statements and accounting records do notcontain any inaccurate or untrue information or omit any relevantinformation that should be disclosed under the applicable laws andregulations in force;l) not to participate in or carry on any transaction with related parties otherthan strictly under arm’s-length conditions and consistent with marketpractice;m) to comply with, where applicable, the “Provisions Applicable to BNDESAgreements”, as approved by Resolution No. 665 of December 10, 1987,as partially amended by Resolution No. 775 of December 16, 1991, byResolution No. 863 of March 11, 1996, by Resolution No. 878 ofSeptember 4, 1996, by Resolution No. 894 of March 06, 1997, byResolution No. 927 of April 1st, 1998, by Resolution No. 976 ofSeptember 24, 2001, by Resolution No. 1571 of March 04, 2008 and byResolution No. 1832 of September 15, 2009, all of which issued by theSenior Management of the BNDES and published in the Official Gazetteof the Federal Government (Section I) of December 29, 1987, December27, 1991, April 08, 1996, September 24, 1996, March 19, 1997, April 15,- 10 -

1998, October 31, 2001, March 25, 2008 and November 06, 2009,respectively, all of which constituting Exhibits to the present Indenture;n) not to dispose of or encumber any of its Non-Current Assets subject toregistration of the ownership title exceeding the individual or aggregateamount of 15% (fifteen per cent) of the total Non-Current Assets ,excluding loans and financings executed by and between the Companyand the BNDES, based upon the audited Financial Statements for thefiscal year preceding the disposal or encumbrance, except upon priorapproval (including in respect of price and payment terms) of theDebenture Holders representing two-thirds (2/3) of the outstandingDebentures and other than any items integrating the Issuer’s fixed assetsalready encumbered on the date hereof;o) in the event of the occurrence, as a result of the application of proceedsas provided for in item 5 of Clause III above, of a reduction of the Issuer’spersonnel during the term of validity of the Debentures, to offer trainingprograms aiming at job opportunities in the region and/or any employees’relocation program and to submit to the Debenture Holders a documentspecifying and attesting to the conclusion of the dealings with thecompetent representation(s) of the workers involved in the dismissalprocess;p) during the term of validity of the present Indenture, to adopt themeasures and actions aimed at avoiding or correcting damages to theenvironment, to work safety and medicine that may be caused by theIssuer and/or by its affiliated and/or controlled entities as a consequenceof the use of the proceeds of the present Issuance;q) to keep in good standing its obligations owed to environmental agenciesand authorities by complying with specific environmental legislation, otherthan obligations or legal provisions being challenged in good faith atadministrative and/or judicial levels;r) to notify the Fiduciary Agent and the Debenture Holder, within up to five(5) business days the creation of any security interest in an individual oraggregate amount exceeding R$50,000,000 (fifty million Brazilian Reais),or by virtue of legal determination or as bond posted in connection withlawsuits and administrative proceedings in which the Issuer is adefendant, as well as in cases of fiduciary ownership in respect offinancings for the acquisition of equipment;s) to apply the proceeds of the present Issuance exclusively as set forth initem 5 of Clause III hereof, and- 11 -

t) to continue to be listed in the Novo Mercado segment of theBM&FBOVESPA except upon prior approval ) of the Debenture Holdersrepresenting two-thirds (2/3) of the outstanding Debentures. The Issuermay migrate to a higher Corporate Governance level if and whencreated.20. EARLY MATURITY OF THE DEBENTURES20.1 In addition to the events set forth in Articles 39 (other than item II), 40 and 47-A of the Applicable Provisions, the Fiduciary Agent may declare, subject toitems 20.2, 20.3 and 20.4 below, the early maturity of all of the Debentures,demanding from the Issuer the payment of the amount relating to the debtbalance of the Debentures, including an update of the par value, as applicable,plus the Remuneration and other charges accrued until the date of payment,upon the occurrence of the following events:a) Default by the Issuer in respect of any monetary obligation pertaining tothe Debentures, if not cured within up to ten (10) business days after thepertinent maturity date;b) Reiterated protest of bonds against the Issuer in an amount exceeding,individually or in the aggregate, R$50,000,000 (fifty million BrazilianReais), except where the protest shall have been files in error or in badfaith by a third party and such fact is validly evidenced by the Issuer, or ifthe Issuer suspends or dismisses such protest within a maximum term ofseventy-two (72) hours from its occurrence. The amount contemplated inthis item shall be annually updated by reference to the IPCA from theDate of Issuance onwards.c) Request for court-supervised reorganization of extrajudicialreorganization or of self-bankruptcy filed by the Issuer or a declaration ofthe Issuer’s bankruptcy;d) Bankruptcy, dissolution and winding-up of the Issuer;e) A default in respect of any of the Issuer’s non-monetary obligationscontemplated in the Indenture not cured within thirty (30) days from theextrajudicial notice to this effect sent by any Debenture Holder or by theFiduciary Agent;(f)A declaration of early maturity of any of the Issuer’s debts by virtue ofcontractual default or unappealable court order determining a payment inan individual or aggregate amount exceeding R$50,000,000 (fifty millionBrazilian Reais). The amount contemplated in this item shall be annuallyupdated by reference to the IPCA from the Date of Issuance onwards;- 12 -

(g)The inclusion, in any corporate agreement or in the Issuer’s Articles ofIncorporation, of a provision requiring special quorum for resolution on orapproval of matters materially limiting or curtailing the exercise of theCompany’s control by its respective controlling entities, or, the inclusionin those documents of any provision causing:i. restrictions to the Issuer’s ability to grow or to its technologicaldevelopment;ii.iii.restrictions to the Issuer’s access to new markets; orrestrictions of impairment to the Issuer’s ability to comply with thefinancial obligations resulting from such Issuance.For purposes of this item “g”, the Issuer represents that there is ashareholders agreement on file at its registered offices, executed onJune 23, 2010.(h)(i)(j)(k)(l)A determination in the sense that the representations made by the Issuerin the Indenture were untrue or misleading, or materially inaccurate orincomplete as of the date on which they were made;A relevant change in the Issuer’s corporate purposes, other than with theprior approval of holders of Debentures representing two-thirds (2/3) ofthe outstanding Debentures;In the event that the Issuer shall approve a reduction of its capital stockwith the reimbursement to the shareholders of a portion of the value oftheir shares or a reduction of the value of such shares, when not yetpaid-in, to the amount of the entrances, except with the prior approval ofholders of Debentures representing two-thirds (2/3) of the outstandingDebentures;Acquisition by the Issuer of control or equity interests in other companies,greenfield projects, joint ventures or consortia consisting of activities notsupplementary to the ordinary development of the Issuer’s corporatepurposes, except upon the prior approval of holders of Debenturesrepresenting two-thirds (2/3) of the outstanding Debentures;Non-compliance by the Issuer with the terms set forth in any of theprovisions of Clause VII;(m) Non-compliance by the Issuer with the obligation provided for in item19.1 (n) of Clause III, except upon the prior approval of holders ofDebentures representing two-thirds (2/3) of the outstanding Debenturesattending a Meeting;- 13 -

(n)Non-compliance by the Issuer with any of the following financial ratios,for two consecutive 6-month periods, to be calculated at all times inreliance upon the Issuer’s consolidated accounting statements as ofDecember and June, starting with the accounting data as of December,2010 as reported to the Fiduciary Agent, together with the calculationmemory report comprising all relevant line items required for purposes ofdetermination of such financial ratios, within up to fifteen (15) businessdays after the expiration of the legal term established by the CVM in theapplicable legislation in force for purposes of disclosure of the Issuer’srelevant financial data, until the full payment of the amounts due underthe Debentures:1. Net Financial Debt to EBITDA ratio: equal to or lower than 3.75x;for such purpose, there shall be taken into account whichever isthe highest between (i) the accumulated EBITDA of the pasttwelve (12) months; or (ii) the EBITDA for the last quartermultiplied by 4.0;2. Interest Coverage (EBITDA to Net Interest Expenses ratio): equalto or higher than 2.0x taking into account the past twelve months,Wherein:“Aggregate Financial Debt” shall mean the sum of: (a) all of theobligations owed by the Issuer and/or its subsidiaries in respect of fundsborrowed or received as advancement or deposit; (b) all of theobligations owed by the Issuer and/or its subsidiaries as evidenced bybonds, debentures, notes, derivative contracts (other than thoseexecuted for purposes of hedging against interest rate, currency andinflation variations) or similar instruments; (c) all obligations related toleasing contracts of the Issuer and/or its subsidiaries; (d) all obligations,conditional or unconditional, owed by the Issuer and/or its subsidiaries,as guarantor of letters of credit, surety letters and/or collateral otherthan letters of credit and/or surety letters pertaining exclusively toimports made by the Issuer and/or its subsidiaries; (e) all obligations,conditional or unconditional, owed by the Issuer and/or its subsidiaries,in respect of bank acceptances; (f) all third parties’ debts secured by (orin connection with which the debt holder is conditionally orunconditionally entitled to be secured) by any lien in assets held oracquired by the Issuer and/or its subsidiaries, whether or not thesecured debt has been assumed; and (g) all debts and obligationsowed by the Issuer or its subsidiaries resulting from the acquisition ofcompanies, property, plant and equipment items and trademarks.- 14 -

“Net Financial Debt” means the Aggregate Financial Debt minus: (i) cash;(ii) short-term investments; (iii) fixed income funds with daily liquidityheld at major financial institutions; and (iv) federal government bondsand/or major financial institutions bonds, provided that such bondsenjoy daily liquidity or daily liquidity after a maximum vesting period ofninety (90) days following the date of investment.“EBITDA” means the sum of: (a) the operational income as reflected inline item “Operational Income” of the Issuer’s consolidated accountingstatements (excluding financial income and expenses); (b) all amountsof impairment and amortization; (c) all tax credits referring to taxbenefits including, but not limited to, the “Fomentar” program, forinstance; and (d) all amounts pertaining to expenses with privatepension plans included in the “Cost of Operations” account, alldetermined in accordance with accounting principles generally acceptedin Brazil.“Net Interest Expense” means the expenses incurred by the Issuer andits subsidiaries in connection with the aggregate amount of interestspayable accrued on the indebtedness in a certain period, includingcommissions, discounts, fees and expenses derived from letters-credit,and acceptance of financings, to the extent that such financingsconstitute Aggregate Financial Debt reduced by the Issuer’s and itssubsidiaries’ income pertaining to the total amount of interests earnedfrom their financial applications in any period.(o)(p)(q)(r)Default in respect of any obligation owed to the BNDES and itssubsidiaries by the Issuer or any entity belonging to the same economicgroup as the Issuer;Existence of a final an unappealable condemning decision regarding theperpetration of acts, by the Issuer, involving child labor, slave labor orenvironmental crime, except where the ordered compensation shall havebeen effected or during the period in which the Issuer shall be complyingwith the punishment imposed by the condemnatory sentence, subject todue process of law;Any application of the proceeds of the Issuance other than as specified initem 5 of this Clause III;Payment of dividends, subject to the provisions of article 202 of theCorporations Law, interest on shareholders equity or any other profitsharing provided for in the Issuer’s Articles of Incorporation, wheneverthe Issuer shall be in default with its Debenture Holders;- 15 -

(s)(t)(u)(v)(i) any spin-off of the Issuer, other than partial spin-offs in which thespun-off portion is merged exclusively in companies that are, and remaineven after such transaction, wholly-owned subsidiaries of the Issuer; (ii)any merger involving the Issuer; (iii) incorporation of the Issuer by otherentities, except if the transactions described in this item are approved bythe holders of Debentures representing at least two-thirds (2/3) of theoutstanding Debentures;Incorporation of another entity by the Issuer, when the incorporated entityis an entity affiliated with or controlled by a shareholder participating inthe Issuer’s control block and, cumulatively, in which the value attributedto the incorporated entity is equal to or higher than 20% (twenty per cent)of the value attributed to the Issuer, except if such transaction ofapproved by the holders of Debentures representing at least two-thirds(2/3) of the outstanding Debentures;(i) Corporate restructuring or sale of equity interests in the Issuer directlyor indirectly resulting in the non-prevalence of Igarapava ParticipaçõesS.A. as the main shareholder of the Issuer’s control block; or (ii)incorporation, merger, corporate restructuring or sale of equity interestsdirectly or indirectly causing a change in the current corporate controlheld by Igarapava Patricipações S.A., except if such transaction ofapproved by the holders of Debentures representing at least two-thirds(2/3) of the outstanding Debentures;Delisting of the Issuer from the Novo Mercado segment of theBM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias e Futuros, exceptif such transaction of approved by the holders of Debenturesrepresenting two-thirds (2/3) of the outstanding Debentures.20.2 Upon the occurrence of any of the aforementioned events, the Issuer and/orthe Fiduciary Agent shall call, within five (5) business days from the date onwhich it became aware of any such event, a General Meeting of the DebentureHolders to resolve on the declaration of early maturity of the Debentures,subject to the quorum required by item 2.1 of Clause VIII below (“Declarationof Default Causing Early Maturity”).20.3 Upon the occurrence of any of the events listed in item 20.1 above, other thanitem (a), if the Declaration of Default Causing Early Maturity is approved andshould the default in question not be cured until the Curing Term (as definedbelow), the Fiduciary Agent shall declare the early maturity of all obligationsunder the Debentures and demand the immediate payment by the Issuer of allfinancial obligations undertaken within the scope of the Issuance, includingany charges eventually accrued until the date of the effective payment. Uponthe occurrence of the event listed in line (a) of item 20.1 above, the- 16 -

Declaration of Default Causing Early Maturity shall imply the early maturity ofthe Debentures.20.4 Without prejudice to the provisions of item 20.2 above, the General Meeting ofthe Debenture Holders whose agenda shall be the resolution of the declarationof early maturity may also be called by Debenture Holders representing atleast 10% (ten per cent) of the outstanding Debentures.20.5 It is hereby agreed that once the Declaration of Default Causing Early Maturityis approved by the Debenture Holders as provided for above (other than inrespect of line (a) of item 20.1), the Fiduciary Agent shall notify the Issuer ofsuch Declaration of Default Causing Early Maturity within two (2) businessdays after the relevant General Meeting of Debenture Holders, demanding theIssuer to comply with the pertinent obligation or cure or correct the default(“Notice of Default”) within up to ten (10) days from the receipt of the Notice ofDefault, except if a longer term is not provided for in this Indenture (“CuringTerm”). Effective compliance with the obligation or correction/curing of thedefault shall be attested to by Debentures Holders representing at least twothirds(2/3) of the outstanding Debentures in a Meeting called by the Issuer ofby the Fiduciary Agent, which shall not release the Issuer from the payment ofall default charges accrued until the date of compliance with the obligation orcorrection/curing of the default.21. FILING PENALTYIn the event of the filing of a court collection or enforcement, the Issuer shall pay afine of 10% (ten percent) of the amount of the debt pertaining to the Debentures,including principal and charges, without prejudice to the payment of extrajudicial andcourt expenses and attorney’s fees due from the filing of the collection orenforcement lawsuit.22. WAIVER OF RIGHTSNo waiver of any of the rights under this Indenture shall be construed. Any waiver bythe Debenture Holders, either express or implied, in respect of any delay or default ofany obligation hereunder by the Issuer shall not constitute novation.1. MATURITYCLAUSE IV -SPECIFIC CHARACTERISTICS OFTHE DEBENTURES OF THE FIRST SERIES- 17 -

1.1 The term of maturity of the Debentures of the 1st Series shall be of five (05)years counted from the Date of Issuance, that is, October 15, 2015 (the “Dateof Maturity of the 1st Series Debentures”).1.2 On the Date of Maturity of the 1st Series Debentures, the Issuer shall proceedwith the full settlement of the 1st Series Debentures for their Updated ParValue (as defined in item 3 of this Clause IV), plus the Remuneration of the 1stSeries Debentures (as defined in item 4 of this Clause IV) accrued theretofore.2. PRICE OF SUBSCRIPTION AND PAYMENT2.1 The price of subscription and payment of the 1st Series Debentures shall betheir Updated Par Value (as defined in item 3 of this Clause IV), plus theRemuneration of the 1st Series Debentures (as defined in item 4 of thisClause IV), calculated pro rata temporis from the Date of Issuance until thedate of payment.2.2 Debentures of the 1st Series shall be paid-up in cash upon the respectivesubscription, in Brazilian currency. Subject to the provisions of item 3 ofClause III.3. UPDATING OF THE UNITARY PAR VALUE3.1 The unitary par value shall be updated by reference to the variation of theConsumer Index Price - Broad - “IPCA”, as determined and disclosed by theBrazilian Institute of Geography and Statistics - IBGE, from the Date ofIssuance onwards, calculated pro rata temporis on account of the number ofbusiness days elapsed until the settlement of the Debentures of the 1st Series(including settlement resulting from early maturity) or until the date of exerciseof the rights conferred by the Subscription Warrants upon delivery of thepayment of Debentures of the 1st Series, pursuant to the following criteria:(hereinafter called “Updated Par Value” or “UPV”):wherein:UPV = IPV X CUPVIPV= updated par value calculated with six (6) truncateddecimal houses, without rounding;= issuance par value or balance of the par value(par value remaining after repayment of principal,incorporation, monetary updating of each period,or payment of monetary updating, if any) of thedebenture, reported/calculated with six (6)- 18 -

truncated decimal houses, without rounding;C= accrued factor of the monthly variation of theindexes used, calculated with eight (8) truncateddecimal houses, without rounding, determinedpursuant to the following formula:wherein:C nk1NI NIkk1dupdutnNI KNI K-1dupdut= total number of indexes taken into account in theupdating of the assets, “n” being a whole number;= value of the index-number of the month precedingthe month of updating, in the event that suchupdating is made as of a previous date or on theasset anniversary date. After the anniversarydate, value of the index-number of the month ofupdating;= value of the index number of the month precedingthe “k” month;= number of business days between the lastanniversary date and the date of calculation,limited to the total number of business days duringwhich the price index was in force, “dup” being awhole number;= number of days between the last and the followingdate of anniversary, “dut” being a whole number3.1.1 Application of the IPCA index shall be made within the shortest periodallowed by the applicable legislation in force, without the need toamend the Indenture or any other formality;3.1.2 Date of anniversary means the day of the date of maturity or the dayinformed as reference for the use of the index each month.- 19 -

3.1.3 Updating month means the monthly period comprised between twoconsecutive anniversary dates of the asset in question.3.1.4 The factor resulting from the formula:is considered with eight (8) decimal houses, without rounding.3.1.5 The product is executed using the most recent factor, andsubsequently adding the remotest. Intermediary results are calculatedwith sixteen (16) decimal houses, without rounding.3.1.6 Values relating to weekend days or holidays shall be equal to thevalue of the immediately subsequent business day, appropriating thepro rata of the last preceding business day.3.2 If in the updating month the index-number shall not yet be available, the lastavailable variation of the price index in question shall be used:3.3 In the event of temporary unavailability of the IPCA index at the time ofpayment of any monetary obligation under this Indenture, as a replacement ofsuch index, there shall be used the last disclosed index-number, calculatedpro rata temporis for business days; provided that no financial compensationshall be due upon disclosure of the appropriate index-number, both from theIssuer or from the Debenture Holders.3.3.1 In connection with unmatured obligations, as well as for any otherparameters of the First Series, upon subsequent disclosure of theIPCA index all amounts shall be recalculated and updated byreference to the IPCA as disclosed at that subsequent time, subject tothe 180-term established by item 3.4 below.3.4 In the absence of determination or disclosure of the index-number for a termexceeding one hundred and eighty (180) days after the expected date ofdisclosure, or in the event of extinction of such index or by virtue of legal orcourt determination, the IPCA index shall be replaced with the replacementindex legally determined for the same purpose. In the event of inexistence ofa replacement for the IPCA index, the Fiduciary Agent shall call a GeneralMeeting of Debenture Holders to be held within a maximum term of twenty- 20 -

(20) days from the date of expiry of the term established for any of the eventsset forth in the precedent item, in which Debenture Holders representing themajority of outstanding Debentures shall define the parameter to be applied tobetter reflect the actual value of the Issuance and to remunerate the same inthe same previous levels. Until the resolution on such parameter, forpurposes of calculation of the amount of any obligation under this Indenture,the last disclosed index-number shall be adopted.4. REMUNERATING INTERESTSDebentures of the 1st Series shall bear interest at a rate of 3.00% (three per cent)per annum, based upon a 252-business-day year, accrued on the Updated Par Valuefrom the Date of Issuance, calculated pro rata temporis for business days undercompound capitalization regime (“Remuneration”), as follows:wherein:J = UPV X (Interest Factor ― 1),J= amount of interests due and payable at the endof each interest period, calculated with six (6)truncated decimal houses, without rounding;UPV = updated par value calculated with six (6)truncated decimal houses, without rounding;InterestFactor= interest factor calculated with nine (9) truncateddecimal houses, with rounding, determinedpursuant to the following formula:wherein:raten= fixed interest rate, in the form of a percentage peryear, reported with four (4) truncated decimalhouses;= number of business days between the date of thefollowing event and the date of the previous event,“n” being a whole number;- 21 -

DPDT= number of business days between the last eventand the current date, “DP” being a whole number;= number of business days between the last and thefollowing event, “DT” being a whole number4.2 Remuneration of the 1st Series Debentures shall be due annually, always onOctober 15th, the first payment being due on October 15, 2011, and thesubsequent payments on October 15, 2012, October 15, 2013, October 15,2014, and October 15, 2015. Such Remuneration shall also be due andpayable upon early maturity, final maturity or settlement of the 1st SeriesDebentures and on the Date of Exercise of the Subscription Warrants, upondelivery in payment of the 1st Series Debentures, subject to the provisions ofitem 8.2 of Clause VII, and shall be calculated pro rata temporis until the dateof the effective payment or delivery.4.3 There is no scheduled re-negotiation of the 1st Series Debentures.5. REPAYMENT OF DEBENTURESThe Updated Par Value of the 1st Series Debentures shall not be repaid, and shallbe fully settled on the Date of Maturity of the 1st Series Debentures, or upon earlymaturity, or on the date of exercise of the rights conferred by the SubscriptionWarrants, upon delivery in payment of Debentures of the 1st Series, pursuant to item3 of this Clause IV.1. MATURITYCLAUSE V - CHARACTERISTICS OFTHE DEBENTURES OF THE SECOND SERIES1.1 The term of maturity of the Debentures of the 1st Series shall be of eight (08)years counted from the Date of Issuance, that is, October 15, 2018 (the “Dateof Maturity of the 1st Series Debentures”).1.2 On the Date of Maturity of the 1st Series Debentures, the Issuer shall proceedwith the full settlement of the 1st Series Debentures for their Updated ParValue (as defined in item 3 of this Clause IV), plus the Remuneration of the 1stSeries Debentures (as defined in item 4 of this Clause IV) accrued theretofore.2. PRICE OF SUBSCRIPTION AND PAYMENT2.1 The price of subscription and payment of the 2nd Series Debentures shall betheir Updated Par Value (as defined in item 3 of this Clause IV), plus the- 22 -

Remuneration of the 2nd Series Debentures (as defined in item 4 of thisClause IV), calculated pro rata temporis from the Date of Issuance until thedate of payment.2.2 Debentures of the 2nd Series shall be paid-up in cash upon the respectivesubscription, in Brazilian currency. Subject to the provisions of item 3 ofClause III.3. UPDATING OF THE UNITARY PAR VALUEThe par value of the 2nd Series Debentures shall not be updated.4. REMUNERATING INTERESTSDebentures of the 2nd Series shall bear interest at a prefixed rate of 11.3% (elevenpoint three per cent) per annum, based upon a 252-business-day year, accrued onthe issuance par value or on the balance of the debenture par value, from the Date ofIssuance, calculated pro rata temporis for business days under compoundcapitalization regime (“Remuneration”), as follows:wherein:J = IPV X (Interest Factor ― 1),J= amount of interests due and payable at the endof each interest period, calculated with six (6)truncated decimal houses, without rounding;IPV = issuance par value calculated with six (6)truncated decimal houses, without rounding;InterestFactor= interest factor calculated with nine (9) truncateddecimal houses, with rounding, determinedpursuant to the following formula:wherein:rate= fixed interest rate, in the form of a percentage peryear, reported with four (4) truncated decimalhouses;- 23 -

nDPDT= number of business days between the date of thefollowing event and the date of the previous event,“n” being a whole number;= number of business days between the last eventand the current date, “DP” being a whole number;= number of business days between the last and thefollowing event, “DT” being a whole number4.2 Remuneration of the 2nd Series Debentures shall be due semi-annually,always on April 15th and October 15th each year, including together with theinstallments of repayment of the unitary par value and at maturity or settlementof the 2nd Series Debentures, subject to the provisions of item 5 of Clause V..4.3 There is no scheduled re-negotiation of the 2nd Series Debentures.5. REPAYMENT OF DEBENTURESThe unitary par value of the 2nd Series Debentures shall be repaid in twelve (12)semi-annual and successive installments, each of them in an amount equal to thebalance of the unitary par value of each 2nd Series Debenture, divided by thenumber of repayment installments still to mature, the first one being due and payableon April 15, 2013, subject to the provisions of item 18 of Clause III. The Companyundertakes to settle all obligations pertaining to the 2nd Series Debentures togetherwith the last installment, on October 15, 2018.1. APPOINTMENTCLAUSE VI - THE FIDUCIARY AGENTThe Issuer hereby appoints and constitutes as Fiduciary Agent for the presentIssuance Planner Trustee DTVM Ltda., who hereby and pursuant to the applicablelegal provisions in force, accepts such appointment to represent the entirety of theDebenture Holders, in accordance with the applicable laws and this Indenture, andrepresents that:a) under the penalties of the law, it has no legal impediment, as set forth inparagraph 3rd of Article 66 of the Corporations Law, in CVM InstructionNo. 28 of November 28, 1983, as amended (“CVM Instruction 28”), andin other applicable rules in force or, should those be amended, anysuccessor rules, for the exercise of the duty incumbent upon it hereby;b) it accepts the duties conferred upon it hereby, fully assuming allobligations and attributions provided for in specific legislation and in thisIndenture;- 24 -

c) it is aware of the applicable regulations enacted by the Central Bank ofBrazil, by the CVM and other competent authorities;d) it is not included in any of the events of conflict of interests set forth inarticle 10 of CVM Instruction 28;e) it verified the truthfulness of the information contained in this Indenture,caused to be cured eventual omissions, flaws or defects of which it hasknowledge;f) it fully accepts this Indenture and all of its terms and conditions;g) it verified the compliance by the Company with the issuance limitestablished in article 60, paragraph first, line “b” of the CorporationsLaw;h) it enjoys a comparable status to a financial institution, and is dulyorganized, constituted and existing under Brazilian laws;i) it is duly authorized to execute the present Indenture and to perform itsduties hereunder, having met all legal and statutory requirements forsuch purpose;j) the execution of this Indenture and the performance of its dutieshereunder do not infringe upon any obligation previously undertaken bythe Fiduciary Agent; andk) this Indenture constitutes a valid and effective obligation of theFiduciary Agent, enforceable against it in accordance with its terms.2. TERM OF OFFICEThe Fiduciary Agent shall be vested in its duties on the date of this Indenture or of aneventual addendum hereto providing for the replacement, and shall hold such officeuntil its effective replacement to the full discharge of his duties and obligationshereunder.3. REPLACEMENT3.1 In the event of absence, temporary impediments, resignation, intervention,judicial or extrajudicial wind-up, bankruptcy, or in any other event of vacancywithin a maximum term of thirty (30) days from the event causing suchvacancy, a General Meeting of Debenture Holders shall be held to appoint anew Fiduciary Agent, which may be called by the Fiduciary Agent to bereplaced, by the Issuer or by Debenture Holders representing at least 10%(ten percent) of the outstanding Debentures. If such Meeting is not called- 25 -

within up to fifteen (15) days prior to the expiration of the aforesaid term, theIssuer shall call the Meeting subject to a 15-day term for the first call and an 8-day term for the second call; provided that the Issuer may appoint a temporaryreplacement to act until the completion of the appointment of a new FiduciaryAgent.3.2 In the event that the Fiduciary Agent in prevented from continuing to performits duties owing to circumstances supervening this Indenture, to shall promptlynotify such fact to the Debenture Holders, requesting replacement.3.3 Debentures may, following the expiration of the term for distribution of theDebentures, proceed with the replacement of the Fiduciary Agent and thedesignation of its replacement in a Meeting called specifically for suchpurpose.3.4 Replacement of the Fiduciary Agent shall be the subject matter of anaddendum to this Indenture, to be filed at the Board of Trade of the State ofSão Paulo.4. DUTIESIn addition to other duties foreseen in the applicable laws, the following are dutiesand attributions of the Fiduciary Agent:a) to safeguard the rights and interests of the Debenture Holdersemploying in the exercise of its duties the level of care and diligencethat every active and honest man ordinarily employs in themanagement of its own properties;b) to resign from the office in the event of supervention of conflicts ofinterest or of any other mode of disqualification;c) to safely keep all accounting records, correspondence and other writteninstruments pertaining to the exercise of its duties;d) to verify upon accepting the office the truthfulness of the informationcontained in the present Indenture, taking all necessary steps to causeto be cured any omissions, flaws or defects of which it is aware;e) in the event that the Issuer shall fail to do so, to proceed with therecordal of any addendum to this Indenture at the competent authoritiesand agencies, curing any flaws or irregularities eventually found in anysuch instruments. In this case, the official in charge of the recordalshall notify the Issuer’s Management to furnish the necessaryinformation and documents;- 26 -

f) to monitor the compliance with the periodicity provided for thedisclosure of mandatory information, warning Debenture Holders of anyeventual omissions or untrue statements contained in such information;g) whenever deemed necessary for the faithful performance of its duties,to request updated certificates of good standing from government andjudicial authorities, offices and bodies sitting in the place wherein theIssuer’s registered offices are located;h) whenever necessary, to call the General Meeting of Debenture Holdersby means of an announcement to be published at least three (3) timesin the same large circulation newspapers in which the Issuer shall makeits publications;i) to attend the General Meeting of Debenture Holders to render anyinformation that may be requested from it;j) to prepare an annual report to be sent to the Debenture Holderspursuant to Article 68 paragraph 1st, line “b” of the Corporations Law,which shall contain, at least, the following information:i. relevant facts occurred during the precedent fiscal year, relating tothe performance of the obligations undertaken by the Issuer underthis Indenture and to the collateral guarantee to such obligations, asmentioned in item 19 of Clause III above;ii.repayments and payment of interests accrued on the Debenturesmade during the relevant period, as well as acquisitions and salesof Dentures effected by the Issuer; andiii. a declaration of its ability to continue to serve as the FiduciaryAgent hereunder.k) to make available the report mentioned in item “j” above to theDebenture Holders within a maximum term of four (4) months from theend of the Issuer’s fiscal year, and for a term not shorter than three (3)months thereafter, at the following places:a. at the registered offices of the Issuer; andb. at its own offices, including discloser in the Fiduciary Agent’swebsite.l) to exercise all of rights and prerogatives available to Debenture Holdersand to the Fiduciary Agent hereunder and under any documentsattached hereto, except where such rights and prerogatives shall have- 27 -

een waived in a General Meeting of Debenture Holders called for suchspecific purpose by Debenture Holders representing the entirety of theoutstanding Debentures including, without limitation, to issue and remitall notices and communications mentioned therein;m) to keep an updated list of Debenture Holders and their addresses,resorting, if necessary to the Issuer’s records;n) to monitor the compliance with the clauses of the present Indenture;o) to notify the Debenture Holders, if possible individually, within amaximum term of sixty (60) days, on any default by the Issuer of itsobligations hereunder, indicated the place at which it will provide furtherclarification to anyone interested.5. SPECIFIC ATTRIBUTIONSThe Fiduciary Agent shall adopt any judicial or extra judicial proceeding against theIssuer to safeguard and defend the interests of the entirety of the Debenture Holdersand the receipt of their credits. In the event of any default by the Issuer, the FiduciaryAgent shall:a) subject to the terms and conditions of the present Indenture, declarethe early maturity of the Debentures and collect the principal andaccessory amounts thereof;b) in its capacity as representative of the Debenture Holders, enforce thecollateral guaranties granted under item 19 of Clause III above,applying the proceeds to the payment owing to the Debenture Holders;c) take any measure required for receipt of the Debenture Holders’ creditsunder this Indenture, provided that in no event shall the Fiduciary Agentor the Issuer be held liable for any taxes eventually due by theDebenture Holders, which may be withheld by the Fiduciary Agent or bythe Issuer, as required by the law.6. LIABILITYThe Fiduciary Agent shall only be held harmless in respect of the failure to adopt anyof the measures set forth under lines (a) to (c) of item 5 above if a dully called andconvened General Meeting shall so authorize by resolution passed by DebentureHolders representing sixty (60) per cent of the outstanding Debentures.7. REMUNERATION OF THE FIDUCIARY AGENT- 28 -

7.1 The Issuer shall pay the Fiduciary Agent, or any institution eventually replacingit in such capacity, as fees for the performance of the duties and attributionsincumbent upon it, a remuneration in the following manner:(i)(ii)(iii)(iv)(v)quarterly installments of R$6,500 (six thousand five hundred Reais)each, the first one being due and payable three (3) business days afterthe execution of the Indenture and the remainder installments on thesame day of the subsequent quarters;remuneration installments shall be added by the following taxes: ISS(Tax on Services of any type); PIS and COFINS (Social Securitycontributions) and any other taxes eventually levied on theremuneration in question, other than Income Tax at the Rates prevailingas of each date of payment;the aforesaid installments shall be subject to update, if applicable, on anannual basis by reference to the accrued variation of the IGP-M or, inthe absence or impossibility of application of such index, any otherofficial replacement index, from the date of payment of the firstinstallment until the dates of payment of each subsequent installment,calculated pro rata temporis;remuneration shall be due and payable even after the maturity of theDebentures, in the event that the Fiduciary Agent is still acting inconnection with the collection of uncured defaults by the Issuer onbehalf of the creditors; andthe remuneration embraces the services to be rendered by theFiduciary Agent’s technical staff, as well as the attendance of Meetingsof Debenture Holders, but does not include expenses deemednecessary to the exercise of the Fiduciary Agent’s duties, namely:notices, obtaining of certifications, travel and lodging expenses, expert’sfees and expenses such as auditors and/or monitoring, among others.8. EXPENSES8.1 The Issuer shall reimburse the Fiduciary Agent for all expenses reasonably andprovenly incurred to safeguard the rights and interests of the DebentureHolders, or to receive their credits.8.2 The expenses referred to in this item shall embrace and include the following:a) the publication of reports, notices and notifications provided for in thisIndenture and any other ones eventually required by applicableregulations;- 29 -

) obtaining of certificates; andc) eventual additional, special and expert surveys of material importancein the event of omissions and/or unclearness in the informationpertaining to the strict interest of the Debenture Holders.8.3 The reimbursement referred to in this item shall be effected immediately afterdelivery to the Issuer of documentary evidence of reasonable and effectivelyincurred expenses required in connection with the safeguard of the rightsappurtenant to the Debenture Holders.8.4 The Fiduciary Agent’s credit for expenses incurred in to safeguard rights andinterests of the Debenture Holders and to receive their credits not settled asaforesaid in item 8.3 shall be added to the Issuer’s debt and enjoy the samecollateral guaranties as the Debentures and have priority of payment over them.1. NUMBERCLAUSE VII - SUBSCRIPTION WARRANTSOne (1) Subscription Warrant shall be issued for the joint subscription of one (1)Debenture of the 1st Series and one (1) Debenture of the 2nd Series as provided forin item 3 of Clause III of the present Indenture, thus representing a total issuance of548,725 (five hundred forty-eight thousand, seven hundred, twenty-five) SubscriptionWarrants.2. VALUE OF ISSUANCEThe Issuance shall not be attributed a value, as the Subscription Warrant will beallocated as an additional advantage to the subscribers in the Issuance.3. SERIESThe Subscription Warrants shall be issued in a single series.4. PRICE OF EXERCISE AND NUMBER OF SHARES TO BE SUBSCRIBEDFOR4.1 The price of exercise of the Subscription Warrants is of R$29.48 (twenty-nineBrazilian Reais and forty-eight cents) per share, updated pursuant to the samemanner of updating applying to the debit balance of the 1st Series Debentures(“Exercise Price”). The Exercise Price was determined based upon the averageof the closing quotation of the Issuer’s shares in the sixty (60) last tradingsessions of the BM&FBOVESPA S.A. – Bolsa de Valores, Mercadorias eFuturos (“BM&FBOVESPA“) prior to July 20, 2010, plus a 25% premium.- 30 -

4.2 Each Subscription Warrant shall confer onto its holder a right to subscribe forcommon shares issued by the Issuer, at the holder’s discretion, in a numberresulting from the division between the Updated Pr Value of the 1st SeriesDebentures as of the Date of Exercise of the Subscription Warrants (as definedin item 8.1 below) and the Exercise Price, so that each Subscription Warrantshall grant a right to subscribe for thirty-four (34) shares, subject to theprocedures set forth in item 8. below.4.3 The Exercise Price shall be simultaneously and proportionally adjustedwhenever there shall be any bonus, stock split or reverse stock split related tothe common shares issued by the Issuer, at any title, that may occur from theDate of Issuance onwards, with no charge for the holders of SubscriptionWarrants and in the same proportion established for similar events.Accordingly: (i) in the event of stock split or reverse stock split, the ExercisePrice shall be multiplied by the same ratio referring to the reverse stock split ofthe Issuer’s common shares; and (ii) in the event of stock split or bonus, theExercise Price shall be divided by the same ratio referring to the split of thecommon shares issued by the Issuer or by the same ratio used for the bonus.4.4 The Issuer’s resulting from the exercise of the right conferred by theSubscription Warrant: (i) shall have the same features and conditions and shallenjoy the same rights and advantages afforded, now and hereafter, by theIssuer’s Articles of Incorporation to the common shares issued by the Issuer;and (ii) shall fully participate in the results of the fiscal year then in course,including dividends and interests on shareholders’ equity.4.5 Until the Maturity of the Subscription Warrants, in the event that the GeneralShareholders Meeting of the Issuer shall resolve to issue debenturesconvertible into common shares (“New Issuance”) for public or privatesubscription, the conversion price of which shall be 15% (fifteen per cent) below(and including) the average weighed by reference to the volume of closingprices of shares issued by the Issuer during the thirty (30) trading sessions ofthe BM&FBOVESPA immediately preceding the date of approval of the NewIssuance plus a 25% premium, each holder of a Subscription Warrant shall beentitled, at his sole and exclusive discretion and at any time, to exercise hissubscription rights (either individually or jointly) at a new exercise price affordingto such holders, deeming the debentures of the New Issuance as converted, thesame proportion of interests held in the Issuer’s capital stock as they wouldotherwise be entitled to, had they exercised all rights under the SubscriptionWarrants prior to the New Issuance.- 31 -

Wherein:IssuanceVolume = Updated Par Value of the entirety of theoutstanding 1st Series Debentures;NumberSharesPriorNewIssuance = Number of shares of the capital stockprior to the New Issuance plus theNumberSharesExerciseSubscWarrant(as defined below);NumberSharesExerciseSubscWarrant =Aggregate number of shares resultingfrom the exercise of the entirety of theSubscription Warrants;NumberSharesAfterNewIssuance = Number of shares of the capital stockafter the New Issuance plus theNumberSharesExerciseSubscWarrant4.5.1 The new price of exercise of the Subscription Warrants, as definedpursuant to item 4.5 above, shall be updated by reference to the IPCAindex since the date on which the updating of the price of conversionunder the New Issuance shall begin. If the price of conversion underthe New Issuance is not updated, the new price of exercise of theSubscription Warrants shall not be updated.4.6 Up until the Maturity of the Subscription Warrants, in the event that the Issuer’sGeneral Meeting shall resolve to issue new subscription warrants (“NewIssuance”) for public or private subscription at exercise prices 15% (fifteen percent) below (and including) the average weighed by reference to the volume ofclosing prices of shares issued by the Issuer during the thirty (30) tradingsessions of the BM&FBOVESPA immediately preceding the date of approval ofthe New Issuance plus a 25% premium, each holder of a Subscription Warrantshall be entitled, at his sole and exclusive discretion and at any time, to exercisehis subscription rights (either individually or jointly) at a new exercise priceaffording to such holders, assuming the exercise of the subscription rights underthe New Issuance, the same proportion of interests held in the Issuer’s capitalstock that they would otherwise hold, had they exercised all rights under theSubscription Warrants prior to the New Issuance, according to the followingparameters:- 32 -

Wherein:IssuanceVolume = Updated Par Value of the entirety of theoutstanding 1st Series Debentures;NumberSharesPriorNewIssuance = Number of shares of the capital stockprior to the New Issuance plus theNumberSharesExerciseSubscWarrant(as defined below);NumberSharesExerciseSubscWarrant =Aggregate number of shares resultingfrom the exercise of the entirety of theSubscription Warrants;NumberSharesAfterNewIssuance = Number of shares of the capital stockafter the New Issuance plus theNumberSharesExerciseSubscWarrant4.6.1 The new price of exercise of the Subscription Warrants, as definedpursuant to item 4.6 above, shall be updated by reference to the IPCAindex since the date on which the updating of the price of conversionunder the New Issuance shall begin. If the price of conversion underthe New Issuance is not updated, the new price of exercise of theSubscription Warrants shall not be updated.4.7 Except for any issuance of shares within the scope of the Issuer’s Stock OptionPlans, up until the Maturity of the Subscription Warrants, in the event that theIssuer’s General Meeting or Board of Directors shall resolve to issue newshares (“New Issuance”) for public or private subscription, including capitalincreases resulting from corporate restructuring (mergers and acquisitions), atissuance prices 15% (fifteen per cent) below (and including) the averageweighed by reference to the volume of closing prices of shares issued by theIssuer during the thirty (30) trading sessions of the BM&FBOVESPAimmediately preceding the date of approval of the New Issuance, each holder ofa Subscription Warrant shall be entitled, at his sole and exclusive discretion andat any time, to exercise his subscription rights (either individually or jointly) at anew exercise price affording to such holders, assuming the exercise of thesubscription rights under the New Issuance, the same proportion of interestsheld in the Issuer’s capital stock that they would otherwise hold, had they- 33 -

exercised all rights under the Subscription Warrants prior to the New Issuance,according to the following parameters:Wherein:IssuanceVolume = Updated Par Value of the entirety of theoutstanding 1st Series Debentures;NumberSharesPriorNewIssuance = Number of shares of the capital stockprior to the New Issuance plus theNumberSharesExerciseSubscWarrant(as defined below);NumberSharesExerciseSubscWarrant =Aggregate number of shares resultingfrom the exercise of the entirety of theSubscription Warrants;NumberSharesAfterNewIssuance = Number of shares of the capital stockafter the New Issuance plus theNumberSharesExerciseSubscWarrant4.7.1 The new price of exercise of the Subscription Warrants, as definedpursuant to item 4.7 above, shall be updated by reference to the IPCAindex since the closing of the placement of the New Issuance(meaning the expiration of the term to subscribe for excess in theevent of a private issuance or the date of the announcement ofclosing, in the event of public distribution).4.7.2 Up until the Maturity of the Subscription Warrants, in the event that theIssuer’s General Meeting or Board of Directors shall resolve to issueshares within the scope of transactions involving the incorporation ofshares of other companies (“New Issuance”) at issuance prices 15%(fifteen per cent) below (and including) the average weighed byreference to the volume of closing prices of shares issued by theIssuer during the thirty (30) or the one hundred and twenty (120)trading sessions of the BM&FBOVESPA, whichever is lower,immediately preceding the date of publication of the Material Fact- 34 -

disclosing the relevant acquisition, each holder of a SubscriptionWarrant shall be entitled, at his sole and exclusive discretion and atany time, to exercise his subscription rights (either individually orjointly) at a new exercise price affording to such holders the sameproportion of interests held in the Issuer’s capital stock that they wouldotherwise hold, had they exercised all rights under the SubscriptionWarrants prior to the New Issuance, according to the parameters setforth in item 4.7 above.5. TERM OF EXERCISE OF THE SUBSCRIPTION WARRANTSThe Subscription Warrants may be exercised from the Date of Issuance until the dateof Maturity of the Subscription Warrants, at the exclusive discretion of the holder.6. FORMThe Subscription Warrants shall be in book-entry form, subject to the provisions ofitem 9 of Clause III.7. DATE OF ISSUANCEThe Subscription Warrants shall be issued on October 15, 2010.8. SUBSCRIPTION AND PAYMENT8.1 Holders of Subscription Warrants may elect to exercise their SubscriptionWarrants until the date of Maturity of the Subscription Warrants, other than ona date on which a General Meeting of the Issuer’s Shareholders is to be held,and shall state their intent by means of a written notice of exercise to theIssuer (“Notice of Exercise”), who shall remit such notice by correspondencefiled at the Fiduciary Agent on the next succeeding business day. For all legalpurposes and effects, the date of exercise shall be the sixth business day afterreceipt of the Notice of Exercise by the Issuer (“Date of Exercise of theSubscription Warrants”).8.2 Payment of the shares resulting from the exercise of the SubscriptionWarrants shall be made solely upon delivery in payment of one (1) 1st SeriesDebenture for each Subscription Warrants, for purposes of capitalization of thecredit represented by such Debenture.8.3 On the Date of Exercise of the Subscription Warrants, the Issuer shall depositat the recording institution the number of shares of its issuance correspondingto the number of exercised Subscription Warrants. Any taxes and expensesrelated to such deposit shall be borne by the Issuer.- 35 -

8.4 On the Date of Exercise of the Subscription Warrants, the Issuer shall effect towhoever shall have exercised any Subscription Warrants the pro rata temporispayment of the Remuneration of the 1st Series Debentures due and payableunder item 4 of Clause IV until the Date of Exercise of the SubscriptionWarrants, so that no overdue monetary obligation remains unpaid vis-à-vis theholder of the 1st Series Debenture delivered in payment, all of which pursuantto the provisions of item 4.2 of Clause IV of the present Indenture.8.5 The increase of the Issuer’s capital stock resulting from the exercise of theSubscription Warrants, subject to the manner set forth in item III of article 66 ofthe Corporations Law and in the Issuer’s Articles of Incorporation, shall beratified within up to 5 days and filed at the competent Board of Trade within 10days of its effectiveness.8.6 The Fiduciary Agent and the Issuer are forthwith obliged to take all necessaryactions to communicate and formalize the exercise of the SubscriptionWarrants under this Indenture (provided that the Fiduciary Agent will beresponsible solely for signing the pertinent required documents in the nameand on behalf of the holders of Subscription Warrants so as to formalize theownership of the shares resulting from the exercise of such SubscriptionWarrants).9. MANDATORY EXERCISE9.1 Upon the occurrence of the Condition Precedent to the Mandatory Exerciseprovided for in item 9.2 below, the Issuer may determine the mandatoryexercise of the entirety of the Subscription Warrants.9.2 The condition precedent to the mandatory exercise shall occur when theaverage price, weighed by reference to the volume of common shares issuedby the Issuer traded in the sixty (60) last trading sessions of theBM&FBOVESPA (“PME”) as determined daily by the Fiduciary Agent, shallsatisfy, solely in what concerns Debentures of the 1st Series, the followingequation (“Condition Precedent to the Mandatory Exercise”):- 36 -

Wherein:IPV and J are defined in Clause IV of this Indenture;Ci, Cn are updating by reference to the IPCA until dates i and n, respectively, as peritem 3 of Clause IV of this Indenture;PME is the average price of the shares in the sixty (60) last trading sessions of theBM&FBOVESPA preceding the request for exercise made by the Issuer;Q = aggregate number of shares resulting from the exercise of the entirety of theSubscription Warrants;N = year of the mandatory exercise, fractional years being permitted.9.3 Upon verification of the occurrence of the Condition Precedent to theMandatory Exercise, if intending to exercise the right provided for in item 9.1above the Issuer shall notify the holders of Subscription Warrants, with a copyto the Fiduciary Agent, within up to ten (1) days from the date of suchverification, describing the calculations leading to the verification of thecondition and the date on which the pertinent exercise shall be formalized,with the consequent subscription and payment of the common shares of itsissuance. The Date of Exercise shall mandatorily be established between the5th and the 10th business day after the aforesaid notification. After theexpiration of the 10-day term, the Issuer may only exercise the right providedfor in item 9.1 if and when the Condition Precedent to the Mandatory Exerciseshall be verified again.10. MATURITYSubject to their terms and conditions, the Subscription Warrants shall be valid untilthe settlement of the 1st Series Debentures (“Maturity of the Subscription Warrants”).- 37 -

11. FRACTIONSAny fraction of the Issuer’s shares eventually resulting from the exercise of theSubscription Warrants shall be due in kind, at the Updated Par Value of the 1stSeries Debentures plus the Remuneration of the 1st Series Debentures on the Dateof Exercise of the Subscription Warrants.12. TRADINGSubscription Warrants issued by the Issuer hereunder may not be traded apart fromthe 1st Series Debentures since, according to the provisions of item 8.2 of thisClause VI, payment of the shares resulting from the exercise of the SubscriptionWarrants may only be effected upon delivery in payment of one (1) 1st SeriesDebenture.CLAUSE VIII - GENERAL MEETING OF DEBENTURE HOLDERSHolders of Debentures shall meet at any time in a general meeting for purposes ofresolving on any matter of interest to the entirety of the Debenture Holders.Whenever the matter shall be of interest for just one of the series, the meeting shallinvolve solely the entirety of Debenture Holders of that series.1. CALLThe meeting may be called by the Issuer, by the Fiduciary Agent and by DebentureHolders representing at least 10% (ten per cent) of the outstanding Debentures. Anyproposals of modification of the conditions of the Debentures shall be madeexclusively by the Company.2. CONVENING AND RESOLUTION2.1 The general meeting shall be convened with the presence of the quorumprovided for in article 71, paragraph third of the Corporations Law and shallpass resolutions upon the vote of Debenture Holders representing at least50% (fifty percent) plus on (1) of the Debentures then outstanding.2.2 In any resolution to be passed by the meeting, each Debenture entitles itsholder to one (1) vote, including votes cast by proxy holders, subject to theprovisions of paragraphs 1st and 2nd of article 126 of the Corporations Law.2.3 Except as otherwise provided for in this Indenture, any modification in theconditions of the Debentures subject to the present issuance shall dependupon the approval by Debenture Holders representing at least 50% (fiftypercent) plus one (1) of the Debentures then outstanding.- 38 -

2.4 For purposes of constitution of the quorum referred to in this Clause,Debentures held by the Issuer shall be excluded from the aggregate numberof outstanding Debentures.CLAUSE IX - REPRESENTATIONS AND WARRANTIES OF THE ISSUERThe Issuer hereby represents and warrants to the Debenture Holders that:a) it is a validly organized and existing in accordance with the Braziliancorporate laws currently in force;b) the execution of the present Indenture and the assumption andperformance of the obligations hereunder have been approved by allrequisite approvals and authorizations from its executive anddeliberative corporate bodies (the General Meeting of Shareholders, theBoard of Directors and the Senior Management), as well as by priorresolution passed by its shareholders, required by virtue of theexistence of shareholders agreements on file at its registered offices;c) its legal representatives executing this Indenture have all corporatepower ad authority to bind the Company to the obligations hereunderand, in their capacity as agents, have lawfully granted powersformalized by means of valid and fully effective powers of attorney;d) its economic, financial and equity conditions as reflected in the financialstatements, the disclosure of which is required by the applicablecorporate legislation in force, as of the date on which theserepresentations are made did not suffer any material change likely toadversely affect the performance of the obligations hereunder;e) there are no bonds of its issuance or any bonds withdrawn against itthat have been protested or filed for protest purposes, the individual oraggregate value of which is equal to or higher than R$50,000,000 (fiftymillion Brazilian Reais), other than those that, if filed for protestpurposes, are the subject matter of judicial challenge based uponreasonable legal grounds, or of precautionary suspension of protestfollowed, if applicable, by the competent main lawsuit;f) the execution of the present Indenture and the undertaking andperformance of the obligations hereunder do not, directly or indirectly,cause a violation, whether in whole or in part, under: (i) any agreementsof whatsoever nature, executed prior to the date of signature of thisIndentures to which the Issuer or is a party or to which any of itscorporeal and incorporeal, tangible and intangible, movable or real stateproperties are bound; (ii) any legal or regulatory rule to which the Issuer- 39 -

or any of its corporeal and incorporeal, tangible and intangible, movableor real state properties are subject; and (iii) any judicial o administrativeorder or decision, even if preliminary, affecting the Issuer or any of itscorporeal and incorporeal, tangible and intangible, movable or real stateproperties;g) this Indenture constitutes a legal, valid and binding obligation of theIssuer, enforceable against the Issuer in accordance with its terms andconditions; and the payments and obligations in kind provided for in thisIndenture are not subordinated to any other debt owed by the Issuerother than priority order of payment in the event of wind-up; andh) it has already secured all relevant permits and licenses (includingenvironmental) required by federal, state and local authorities for theexercise of its activities so far, including environmental licenses and/orpermits, all of which are valid;CLAUSE X -NOTICESAny notices to the Issuer under the present Indenture, if sent by fax or e-mail, shallbe deemed received on the date of remittance, provided that receipt thereof isconfirmed by means of a receipt issued by the transmitting equipment, upontelephone confirmation); the respective originals shall be sent within up to five (5)business days after the transmission of the message. If sent by mail, such noticesshall be deemed delivered when received under protocol or against“acknowledgment of receipt” issued by the Post Office or by cable, forwarded to theaddresses appearing herein below:ISSUER:Hypermarcas S.A.Avenida Presidente Juscelino Kubitschek, n.º 1830 - Torre 3 - 5º Andar04543-900 – São Paulo/SPAt.: Breno Toledo Pires de OliveiraTel.: 55 11 3627-4226Fax: 55 11 3627-4009Email: breno.oliveira@hypermarcas.com.brFIDUCIARY AGENT:Avenida Brigadeiro Faria Lima, n.º 3900 - 10º Andar- 40 -

04538-132 – São Paulo/SPAt.: Viviane RodriguesTel.: 55 11 2172-2628Fax: 55 11 3078-7264Email: vrodrigues@plannercorretora.com.brCLAUSE XI - JURISDICTIONThe courts of the City of Rio de Janeiro, State of Rio de Janeiro are hereby electedas having jurisdiction to settle any controversy arising out of or related to thisIndenture, with the express waiver of any other one, no matter how privileged it mightbe.The present Indenture is executed by the Issuer in two (2) counterparts, in thepresence of two (2) witnesses.São Paulo, October 22, 2010.[Signature page of the First Private Indenture of Simple Senior Debentures Combined withSubscription Warrants, of Hypermarcas S.A.]HYPERMARCAS S.A.______________________________Name:Title:______________________________Name:Title:PLANNER TRUSTEE DTVM LTDA.______________________________Name:Title:______________________________Name:Title:Witnesses______________________________Name:C.P.F.:______________________________Name:C.P.F.:- 41 -

EXHIBIT I TO THE INDENTUREPROVISIONS APPLICABLE TO BNDES AGREEMENTS- 42 -

EXHIBIT II TO THE INDENTURESUBSCRIPTION WARRANTS ISSUED BY HYPERMARCAS S.A., ATTRIBUTEDTO THE 1st PRIVATE ISSUANCE OF SIMPLE SENIOR DEBENTURES- 43 -