CVM Instruction 422 (Revoked) - Agricultural Commercial Note Issuance

FULL TEXT OF CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005, WITH AMENDMENTS INTRODUCED BY CVM INSTRUCTIONS NOS. 479/09 AND 480/09.

Provides for the issuance of Agricultural Commercial Notes for public distribution and for the registration of public distribution offers and of issuers of this security.

Provides for the issuance of Agricultural Commercial Notes for public distribution and for the registration of public distribution offers of this security.

• Wording given by CVM Instruction no. 479, of December 7, 2009

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes public that the Collegiate Body, in a meeting held on August 2, 2005, based on the provisions of the Convention for the Adoption of a Uniform Law on Bills of Exchange and Promissory Notes, promulgated by Decree no. 57.663, of January 24, 1966, and on arts. 2, item VI, §§ 2 and 3, and 8, item I, of Law no. 6.385, of December 7, 1976, resolved to issue the following Instruction:

ON SCOPE AND PURPOSE

Art. 1. This Instruction provides for the Agricultural Commercial Note – NCA, and regulates the respective registration of public distribution offers, the specific registration for issuers of this title, the conditions under which this registration may be waived, and the hypotheses in which NCAs may be issued by limited liability companies or cooperatives.

Art. 1. This Instruction provides for the Agricultural Commercial Note – NCA and regulates the respective registration of public distribution offers.

• Article with wording given by CVM Instruction no. 479, of December 7, 2009

ON THE AGRICULTURAL PROMISSORY NOTE – NCA

Art. 2. The Agricultural Commercial Note – NCA is the Commercial Promissory Note for public distribution issued by companies, limited liability companies, and cooperatives that have as their activity the production, commercialization, processing, or industrialization of products or inputs for agricultural and livestock activities, or of machines and equipment used in agricultural and livestock activities.

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

Art. 3. The NCA must be issued in book-entry form, observing, furthermore, that:
I – the provision of book-entry securities services must be contracted, applying the respective regulation issued by the CVM; and II – the transfer of ownership shall occur through registration with the agent providing book-entry securities services, who will retain data related to the chain of ownership.

Art 4. Only issuers that are up to date with obligations incurred in previous issuances of this same title and with an updated issuer registration may issue NCAs.

Art 5. The maximum maturity period of NCAs, counted from the date of their issuance, shall be 360 (three hundred and sixty) days, observing an identical maturity date by series of NCAs.

§1. The issuance date of the NCA shall be the date of its effective full payment, which shall be made in current currency, at sight, upon subscription.

§2. The issuer may, with the express consent of the holders, redeem the promissory notes in advance.

§3. The redemption of the promissory note implies the extinction of the title, prohibiting its maintenance in treasury.

§4. Redemption that does not cover the entirety of an issuance or series of NCAs must be carried out through lottery or auction among the holders who consent to the redemption.

ON THE DECISION TO ISSUE NCAS

Art 6. The decision regarding the issuance of NCAs shall be made by the administrative body defined in the issuer's bylaws or social contract, or, if this is silent, by the general assembly or equivalent.

Art. 7. The decision to issue NCAs must provide at least for:
I – the total value of the issuance, and its division into series, if applicable; II – quantity and nominal value of the NCA; III – remuneration and monetary update conditions, if any; IV – maturity period and place of payment;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

V – guarantees, if any;
VI – designation of stock exchanges, commodity and futures exchanges, or entities administering organized over-the-counter market systems where the NCA will be traded; and VII – contracting of the provision of book-entry securities services referred to in art. 3, as well as other services, if any.

ON THE REGISTRATION OF NCA ISSUERS

Art. 8. It is a requirement for the issuance and for the registration of public distribution of NCAs that the issuer's registration with the CVM, as a public company or as an NCA issuer, has been granted and is up to date.

Art. 9. An issuer that does not have public company registration and intends to issue exclusively NCAs must request the CVM for its registration as an NCA issuer together with the request for the registration of public distribution offer of NCAs.

§1. The following may obtain the registration referred to in the caput of this article:
I – closed companies that exercise the activities referred to in the caput of art. 2; and II – limited liability companies and agricultural cooperatives that exercise the activities referred to in the caput of art. 2, exclusively for the issuance of NCAs with a unit nominal value equal to or greater than R$ 300,000.00 (three hundred thousand reais) guaranteed by credit insurance, or with a unit nominal value equal to or greater than R$ 1,000,000.00 (one million reais).

§2. The request for NCA issuer registration must be accompanied by the following documents:
I – declaration from stock exchanges, commodity and futures exchanges, or organized over-the-counter market entities granting approval for the admission to trading of the NCAs to be issued, conditioned only on obtaining the company's registration with the CVM; II – updated copy of the bylaws or social contract, as applicable; III – information regarding the last fiscal year containing the following:
a) management report prepared and published in the manner of art. 133 of Law no. 6.404/76, observing the standards applicable to public companies; and

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

b) financial statements, including consolidated statements, if applicable, prepared in the manner required by Law no. 6.404/76, accompanied by explanatory notes and the opinion of an independent auditor registered with the CVM.
IV – minutes of the last Ordinary General Assembly or Annual Meeting, as applicable; V – declaration from the issuer containing information on:
a) protested titles in the last 12 (twelve) months; and b) requests for judicial recovery or bankruptcy, or extrajudicial recovery plans, presented by the issuer in the last 5 (five) years.

Art. 10. The issuer registered exclusively for the issuance of NCAs must provide the CVM and the stock exchange, commodity and futures exchange, or organized over-the-counter market entity where the NCAs are admitted to trading, with the following periodic and occasional information, within the specified deadlines:
I – financial statements and, if applicable, consolidated statements, prepared in accordance with Law no. 6.404/76, accompanied by the management report, explanatory notes, and the opinion of an independent auditor registered with the CVM:
a) within a maximum period of 3 (three) months after the end of the fiscal year; or b) on the same day of its publication or its placement at the disposal of shareholders, if this occurs on a date prior to that stated in item "a".
II – notice of convocation for the Ordinary General Assembly or equivalent, on the same day of its publication in the press; III – updated bylaws or social contract, within 30 (thirty) days after the holding of the Ordinary General Assembly or equivalent, which alters it; IV – minutes of the Ordinary General Assembly, or equivalent, within 30 (thirty) days after its holding; V – information regarding request for judicial recovery or proposal for extrajudicial recovery, their grounds, financial statements specifically prepared for this purpose, and, if applicable, the status of NCA holders regarding the receipt of titles, on the same day the request or proposal is presented; VI – decision granting judicial recovery or the sentence homologating the extrajudicial recovery plan, on the same day of its knowledge by the issuer;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

VII – information regarding request or confession of bankruptcy, on the same day of its knowledge by the issuer, as applicable; VIII – declaratory sentence of bankruptcy, indicating the trustee of the bankrupt estate, on the same day of its knowledge by the issuer; IX – communication regarding relevant acts or facts, in accordance with § 4 of art. 157 of Law no. 6.404/76, and the regulation issued by the CVM applicable to public companies, on the same day of its disclosure; X – any decision of the general assembly, or equivalent, or of the issuer's administrative bodies, or relevant fact occurring in its business, which may substantially influence the decision of investors in the market to sell or buy NCAs issued by it, in the manner of the regulation issued by the CVM, applicable to public companies; and XI – other information requested by the CVM, within the deadline set by it.

Sole paragraph. If the issuer has been declared bankrupt, or is in liquidation regime, the trustee or liquidator, as applicable, must provide quarterly information on fixed deadlines, stages reached, assets sold, funds collected, amounts refunded, and other information considered relevant to the NCA holders, within 60 (sixty) days after the end of each quarter.

Art. 11. The issuer registered exclusively under the terms of art. 9 must declare its status as an NCA issuer in the publications ordered by Law 6.404/76, which shall be fully applicable to it, and in those determined by other legal or regulatory norms, specifying that this status makes it qualified only for the public issuance of NCAs, and that this title is admitted to trading in a system maintained by stock exchanges, commodity and futures exchanges, or organized over-the-counter entities, as applicable.

Art. 12. The issuance of other securities by issuers registered under the terms of art. 9 depends on prior specific registration with the CVM.

ON CANCELLATION OF NCA ISSUER REGISTRATION

Art. 13. The issuer registered exclusively under the terms of art. 9 may request the cancellation of that registration, for which it must prove, alternatively:
I – the payment or redemption of all NCAs in circulation; II – that, after the payment deadline for NCAs has passed, and not all issuances have been settled, it deposited the value due for NCAs in circulation in a commercial bank, with such value available to the holders; or

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

III – that all holders of NCAs in circulation agreed to the cancellation of the registration, and expressly declared that they are aware that, due to this, the CVM will cease to supervise the issuer.

§1. In the event of the deposit referred to in item II, the issuer must publish an announcement informing such situation to the NCA holders, with the express mention of the bank's name and the identification of the branch where the deposit was made.

§2. The CVM may refuse the cancellation of NCA issuer registration requested based on the deposit referred to in item II, if there is a dispute with holders regarding the value due or if the deposit was made in disagreement with the provisions of the NCA.

§3. The company that obtains the cancellation of NCA issuer registration may, at any time, request new registration.

• Articles revoked by CVM Instruction no. 480, of December 7, 2009

ON THE REGISTRATION OF PUBLIC DISTRIBUTION OFFERS

Art. 14. The registration of public distribution offers of NCAs must be requested to the CVM by the issuer itself, together with an institution part of the securities distribution system especially contracted for this purpose.

Art. 15. The registration request must be accompanied by the following documents:
I – NCA distribution contract, which must contain, among others, the clauses listed in Annex IV, and respective addenda or adherence terms; II – other contracts related to the issuance or subscription, including regarding the distribution of supplementary lots, if any; III – four copies of the Draft Final Prospectus or four copies of the Draft Preliminary Prospectus and, as soon as available, three copies of the final version of the Final Prospectus; IV – copy of the decision on the issuance of NCAs, taken by the competent corporate bodies of the issuer, and the administrative decisions required, with all documents that served as the basis for the aforementioned decisions, as well as the respective convocation announcements, if applicable; V – draft of the Distribution Start Announcement, which must contain, at minimum, the information provided in Annex II; VI – draft of the Distribution End Announcement, containing, at minimum, the information provided in Annex III;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

VII – model of the NCA schedule, if applicable; VIII – report issued by a credit rating agency; IX – declaration that the issuer registration is up to date with the CVM, or proof of waiver of this registration, observing the provisions of art. 23; X – declaration of conformity of the issuance with statutory and other regulatory provisions and limits, if any. XI – proof of payment of the supervision fee, in accordance with Law no. 7.940, of December 20, 1989; XII – declarations from the issuer and the leading distribution intermediary institution, signed by statutory directors, if any, attesting that the Prospectus was prepared in accordance with the relevant norms and contains the relevant information necessary for investors to understand the terms of the offer, the characteristics of the offered NCAs and the issuer, its activities and economic-financial situation, the risks inherent to that activity, and any other relevant information; XIII – any advertising text, announcement, or promotion of the offer, disseminated by any form or medium, including audiovisual, as well as documents supporting presentations offered to investors, observing the provisions of arts. 50 and 51 of CVM Instruction no. 400, of December 29, 2003; and XIV – other information or documents required by the CVM in specific regulation.

ON THE PROSPECTUS

Art. 16. Prospectus is the document prepared by the issuer together with the distribution leader, mandatory in public distribution offers covered by this Instruction, and which contains complete, precise, true, current, clear, objective, and necessary information, in accessible language, so that investors can form their investment decision critically.

Art. 17. The Prospectus must, without omitting material facts, nor containing information that may mislead investors, contain data and information on:
I – the offer;
II – the NCAs subject to the offer and the rights inherent to them; III – the issuer and its patrimonial, economic, and financial situation;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

IV – third-party guarantors of obligations related to the NCAs subject to the offer; and V – third parties who will be recipients of the funds raised with the offer.

§1. If provisions regarding the evolution of the issuer's activity and results are included, these must:
I – be clear and objective; and
II – be supported by the opinion of an independent auditor registered with the CVM on the assumptions, criteria used, and their consistency and coherence with the forecasts.

§2. The CVM may require the issuer, including for inclusion in the Prospectus, additional information it deems adequate, as well as warnings and considerations it considers appropriate for the analysis and understanding of the Prospectus by investors.

Art. 18. The Prospectus must have, as minimum content, the information and documents indicated in Annex I to this Instruction.

Art. 19. If, after the date of obtaining registration, any inaccuracy or significant change in the information contained in the Prospectus is verified, notably resulting from informational deficiency or any new or prior fact not considered in the Prospectus, of which knowledge is taken and is relevant to the investment decision, the issuer and the distribution leader must immediately suspend the distribution until the due disclosure to the public of the complementation of the Prospectus and this new information is carried out.

Sole paragraph. The alterations referred to in the caput must be previously submitted to the CVM for examination, applying the deadlines and procedures for analysis provided in arts. 8 and 9, of CVM Instruction no. 400/03, with any eventual manifestations already received subject to the provisions of art. 27 of the same Instruction.

Art. 20. Delivery of a copy of the Final or Preliminary Prospectus to the investor is mandatory, allowing its sending or obtaining by electronic means.

§1. The Preliminary Prospectus must be available to investors in the same locations as the Final Prospectus for at least 5 (five) business days before the initial deadline for receiving reservations.

§2. The Final Prospectus must be available to investors for at least 5 (five) business days before the initial deadline for acceptance of the offer:
I – if no Preliminary Prospectus was used; and

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

II – if a Preliminary Prospectus was used and the information in the Final Prospectus is substantially different from the information in that.

§3. Without prejudice to the provisions of the caput, the Final Prospectus must be available, on the date the distribution begins, at the headquarters and on the website of:
a) the issuer; b) the intermediary institutions part of the consortium; c) the CVM; and d) the stock exchange, commodity and futures exchange, or organized over-the-counter market entity where the NCAs will be admitted to trading.

§4. The distribution leader must send to the CVM and the stock exchange, commodity and futures exchange, or organized over-the-counter entity, in time to comply with the provisions of the caput and § 3 of this article, printed and electronic versions, without any restrictions for copying, of the Final and Preliminary Prospectuses.

ON THE PRELIMINARY PROSPECTUS

Art. 21. The Preliminary Prospectus must contain the same information mentioned in art. 18, without review or appreciation by the CVM.

§1. The following statements must appear on the cover of the Preliminary Prospectus, prominently:
I – "Preliminary Prospectus" and its respective edition date; II – "The information contained in this preliminary prospectus is under analysis by the Securities and Exchange Commission, which has not yet expressed its opinion on it"; III – "This preliminary prospectus is subject to complementation and correction"; and IV – "The final prospectus will be delivered to investors during the distribution period".

§2. In the event that the receipt of reservations for subscription is provided for, the following text must also be included in the content of the Preliminary Prospectus: "The receipt of reservations is admissible, from the date to be indicated in a market notice, for subscription, which will only be confirmed by the subscriber after the start of the distribution period".

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

§3. If the determination of the quantity of NCAs, the issuance price, or the interest rate has been delegated to a body of the issuer's administration, and this body has not yet deliberated on the matter, such information must appear in the Preliminary Prospectus, clarifying, furthermore, the price range, maximum or minimum price, or other criteria established for such determination.

ON ANALYSIS DEADLINES

Art. 22. The registrations of issuer and public distribution offer of NCAs shall be presumed effective if the respective requests are not denied within 10 (ten) business days after their presentation to the CVM, through protocol, with the required documents and information.

Art. 22 The registration of public distribution offer of NCAs shall be presumed effective if the respective request is not denied within 10 (ten) business days after its presentation to the CVM, through protocol, with the required documents and information.

• Article with wording given by CVM Instruction no. 479, of December 7, 2009

§1. The 10 (ten) business day deadline may be interrupted only once, if the CVM requests additional information or conditions the registration to modifications in the relevant documentation.

§2. To meet eventual requirements, a deadline of no more than 20 (twenty) business days will be granted, counted from the receipt of the respective correspondence.

§3. From the receipt of all documents and information, in compliance with the formulated requirements, the CVM will have 5 (five) business days to express its opinion on the registration request, which shall be presumed obtained if there is no manifestation by the CVM within this deadline.

§4. If, in addition to the documents and information presented in the manner of § 3, alterations have been made to documents and information that do not result from the fulfillment of requirements, the analysis deadline by the CVM will be 10 (ten) business days.

§5. The CVM may interrupt only once, through a reasoned request signed by the distribution leader and the issuer, the analysis of the registration request for up to 60 (sixty) business days, after which the analysis deadlines will resume in full, as if a new registration request had been presented, regardless of the phase in which the CVM's analysis was.

ON WAIVERS OF REQUIREMENTS

Art. 23. The issuer registration referred to in art. 9 shall be waived for public distribution offers of NCAs with a term equal to or less than 270 (two hundred and seventy) days in the following hypotheses:

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

I – when the issuer is constituted as a corporation, and the NCA has a unit value equal to or greater than R$ 300,000.00 (three hundred thousand reais); and II – when the issuer is constituted as a limited liability company or cooperative, and the NCA has a unit nominal value equal to or greater than R$ 300,000.00 (three hundred thousand reais) and is guaranteed by credit insurance, or has a unit nominal value equal to or greater than R$ 1,000,000.00 (one million reais).

§1º It is forbidden to give publicity to an offer in which the exemption from registration provided for in the caput of this article is used, including the publication of the announcement of the start of distribution.

§2º The announcement of the closing of the distribution does not constitute publicity of the offer and must be published in any case.

§3º The exemption from the registration of the issuer does not relieve the issuer of the communication of material facts and acts in accordance with art. 10, item X, of this Instruction, and of the regulation issued by the CVM, on the same day of its disclosure by the press.

§4º The CVM may, at its discretion and in accordance with art. 4 of CVM Instruction No. 400/03, exempt the registration of public offers and other requirements, including publications, deadlines, and procedures required for public distribution offers of NCA.

• Article revoked by CVM Instruction No. 480, of December 7, 2009

ON APPROVAL

Art. 24. The approval of the registration will be communicated by letter to the issuing company and to the distribution leader.

ON DISAPPROVAL

Art. 25. The registration request may be disapproved when the requirements formulated by the CVM are not met within the deadlines provided for in this Instruction.

§1º Prior to the disapproval, the CVM will send a letter to the distribution leader, with a copy to the issuer, granting them the opportunity to cure curable defects, if any, within a period of 10 (ten) business days from receipt of the letter or the remainder of the period remaining for the end of the analysis period, whichever is longer.

§2º Upon the expiration of the period referred to in § 1º without the defects that determined the suspension having been cured, the CVM will disapprove the respective registration.

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

§3º In the event of disapproval, the CVM will send a letter to the distribution leader and to the issuer, informing its decision, from which an appeal may be made to the CVM Board, in accordance with the current regulation.

§4º The documents that accompanied the registration request will be archived at the CVM.

ON DISTRIBUTION AND DISCLOSURE

Art. 26. Except as provided in § 2º of art. 23 of this Instruction, the distribution leader must give wide publicity to the offer, through an Announcement of Start of Distribution, in accordance with Annex II, published in newspapers of large circulation in the place where the issuer's headquarters is located.

§1º The issuer may make the disclosure mentioned in the caput through a summary notice published in the newspapers mentioned therein, indicating the page on the World Wide Web where investors can obtain detailed and complete information.

§2º The Announcement of Start of Distribution must be disclosed on the World Wide Web pages of the stock exchanges, commodities and futures exchanges, or organized over-the-counter market entities where the NCA is admitted to trading.

Art. 27. The public distribution offer of NCA can only be started after the registration is granted by the CVM and the announcement of the start of distribution or the notice referred to in § 1º of art. 26 of this Instruction is published, and, for offers with exemption from requirements, in accordance with art. 23, after the prospectus is made available for necessary delivery to investors.

Art. 28. The distribution of NCA must be closed within a period of 90 (ninety) days, counted from the approval of the registration by the CVM.

Art. 29. The use of any advertising text for the offer, announcement, or promotion of the distribution, conveyed by any form or medium, including audiovisual, depends on prior approval by the CVM and can only be made after the Preliminary Prospectus is presented to the CVM.

§1º Upon the expiration of a period of 5 (five) business days, counted from the date of protocol of the advertising material, without any manifestation from the CVM, it will be considered approved.

§2º The advertising material cannot contain inconsistent or different information from that contained in the Prospectus and must be drafted in a calm and moderate language, warning its readers about the risks of the investment.

§3º The material mentioned in this article must expressly refer to the fact that it is advertising material and mention the existence of the Prospectus, as well as the method to obtain a copy, in addition to a highlighted warning with the following statement: "READ THE PROSPECTUS BEFORE ACCEPTING THE OFFER".

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

§4º The CVM, even if it has authorized the use of the advertising material, may, at any time, by motivated decision, request corrections, alterations, or even the cessation of this advertising.

§5º Documents supporting presentations offered to investors do not constitute advertising material, which must, however, be forwarded to the CVM prior to their use.

Art. 30. The issuing company of NCA may submit for archiving at the CVM a Program for the Distribution of Agribusiness Commercial Notes ("Program for Distribution of NCA"), with the objective of carrying out subsequent public distribution offers of NCA.

§1º The Program for Distribution of NCA will be presented to the CVM by the issuer, assisted by one or more Intermediary Institutions, which will be responsible for the veracity, consistency, quality, and sufficiency of the information provided at the time of the program archiving request and provided to the market during the distribution.

§2º The Program for Distribution of NCA will observe the maximum deadline for distribution programs of other securities issuers, and any request for registration of a distribution offer linked to a Program for Distribution of NCA after the respective validity period will be disapproved.

§3º The Prospectus and other information presented related to the Program for Distribution of NCA must be updated within a maximum period of 1 (one) year, counted from the archiving of the Program for Distribution of NCA, or upon the presentation of the annual financial statements to the CVM, whichever occurs first, independently and without prejudice to the update of such information and documents carried out through a Supplement, when carrying out a public distribution offer under the Program for Distribution of NCA.

§4º For the purposes of compliance with the provisions of this article, whenever a Program for Distribution of NCA is used to register public distribution offers of NCA at the CVM, the issuer and the distribution leader must make the Supplement available to investors, in the form defined by current legislation, and, by reference, the other documents and information already presented to the CVM and available to the public.

§5º The rules governing Programs for the Distribution of Securities apply subsidiarily to Programs for Distribution of NCA.

ON THE VERACITY OF INFORMATION

Art. 31. The issuer is responsible for the veracity, consistency, quality, and sufficiency of the information provided at the time of registration and provided to the market during the distribution.

§1º The distribution leader must take all precautions and act with high standards of diligence, being liable for lack of diligence or omission, to ensure that:

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

I – the information provided by the offeror is true, consistent, correct, and sufficient, allowing investors to make an informed decision regarding the offer; II – the information provided to the market throughout the distribution period, including any eventual or periodic information, contained in the update of the issuer's registration, and those contained in the economic-financial feasibility study of the undertaking, if applicable, which are to integrate the Prospectus, are sufficient, allowing investors to make an informed decision regarding the offer; and III – the guarantees were regularly constituted, and that they are sufficient and enforceable.

§2º The distribution leader must keep, for 5 (five) years, available to the CVM, the documentation proving its diligence in compliance with the provisions of § 1º of this article.

§3º The issuer and the distribution leader must declare that the Prospectus contains the relevant information necessary for investors in the offer to understand the NCA offered, the issuer, its activities and economic-financial situation, the risks inherent to its activity, and any other relevant information, as well as that the Prospectus was prepared in accordance with the pertinent norms.

§4º The registration does not imply, on the part of the CVM, a guarantee of the veracity of the information provided or a judgment on the quality of the issuer, its viability, administration, and economic-financial situation, or of the NCA to be distributed, and is granted according to formal criteria of legality.

Art. 32. Non-compliance with obligations undertaken towards NCA holders is considered a material fact, and it is also the duty of the distribution leader to disclose it during the distribution period of the NCA.

ON PENALTY FINE

Art. 33. Non-compliance with the provisions of art. 10 will subject the issuer to a daily penalty fine of R$ 500.00 (five hundred reais), incurred from the first business day following the expiration of the deadlines, regardless of summons.

ON PENALTIES

Art. 34. The following are considered serious offenses, for the purposes of § 3º of art. 11 of Law No. 6.385/76:

I - the carrying out of public distribution offers governed by this Instruction:

a) under conditions different from those stated in the registration or this Instruction;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

b) without prior registration with the CVM; and c) in which false, fraudulent, ambiguous, or imprecise information is contained;

II – non-compliance with the provisions of items V to X of art. 10 of this Instruction.

ON FINAL PROVISIONS

Art. 35. The public distribution offers of NCA and the issuer registration governed by this Instruction are subject, subsidiarily, to the CVM Instructions applicable to the registration of open companies and public distribution offers of securities.

Art. 36. This Instruction enters into force 30 (thirty) days after the date of its publication in the Official Gazette of the Union.

Original signed by
WLADIMIR CASTELO BRANCO CASTRO
Acting President

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

ANNEX I
Cover of the Prospectus

(SOCIAL NAME)
(ADDRESS)
(EMISSION VALUE - in R$)
(RISK CLASSIFICATION, if any)

ISIN CODE: ...... INDICATION OF THE CORPORATE BODY THAT APPROVED THE OFFER

REGISTRATION AT CVM: ......

DATE: ......

ISSUANCE OF [QUANTITY] NCA [OF NOMINAL VALUE OF ......], DELIBERATED BY THE GENERAL MEETING/BOARD OF DIRECTORS, OR EQUIVALENT, OF ...... OF ...... OF ...... (RE-RATIFIED BY THE GENERAL MEETING/BOARD OF DIRECTORS, OF ...... OF ...... OF ......), ACCORDING TO THE MINUTE(S) PUBLISHED IN THE NEWSPAPER(S) ...... OF ......

"THE REGISTRATION OF THIS DISTRIBUTION DOES NOT IMPLY, ON THE PART OF THE CVM, A GUARANTEE OF THE VERACITY OF THE INFORMATION PROVIDED OR A JUDGMENT ON THE QUALITY OF THE ISSUER, AS WELL AS ON THE AGRI-BUSINESS COMMERCIAL NOTES TO BE DISTRIBUTED."

"INVESTORS MUST READ THE RISK FACTORS SECTION, ON PAGES ...... TO ......"

INDEX
(Indicating topics, subtopics, and their respective pages)

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

1. SUMMARY CONTAINING THE CHARACTERISTICS OF THE OPERATION

1.1 Brief description of the operation, including presentation of the issuer and the Intermediary Institutions involved, identification of the target audience, nominal value, total issuance amount, maximum discount rate to be adopted or minimum subscription value, and indication regarding admission to trading on stock exchanges, commodities and futures exchanges, or organized over-the-counter market entities.

2. IDENTIFICATION OF ADMINISTRATORS, CONSULTANTS, AND AUDITORS

2.1 Name, commercial address, and contact telephone numbers of the administrators, who may provide clarifications regarding the offer;

2.2 Name, commercial address, and telephone numbers of the consultants (banking, legal, etc.) involved in the offer and responsible for facts or documents cited in the prospectus;

2.3 Name, commercial address, and telephone numbers of the auditors responsible for auditing the financial statements of the last 3 (three) fiscal years; and

2.4 Declaration, in accordance with art. 56, § 3º, of CVM Instruction No. 400, of December 29, 2003, attesting to the veracity of the information contained in the prospectus, as well as, if applicable, regarding the regular constitution, sufficiency, and enforceability of the NCA guarantees.

3. INFORMATION RELATED TO THE OFFER

3.1 Current Share Capital composition and highlight, in quantitative and percentage terms, regarding shareholders, partners, or cooperative members, as the case may be, who hold more than 5% (five percent) of each species of shares or quotas of the issuer.

3.2 CHARACTERISTICS AND DEADLINES

3.2.1 Description of the Offer and the NCA to be distributed, including, at a minimum, information related to:

3.2.1.1 the quantity of NCA to be issued and their rights, advantages, and restrictions;

3.2.1.2 the total issuance value or the method of calculating the total issuance value, in national currency;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

3.2.1.3 the corporate authorizations necessary for the issuance or distribution of the NCA, identifying the deliberative bodies responsible and the respective meetings in which the operation was approved;

3.2.1.4 any conditions to which the public offer is subject;

3.2.2 Schedule of the offer stages, highlighting, at a minimum:

3.2.2.1 the expected dates for the start and end/result of the offer, the possibility of its suspension or extension, as the case may be, or, in the event that they are not known, the manner in which such dates will be announced, as well as the manner in which publicity will be given to any announcements related to the offer; and

3.2.2.2 the deadlines, conditions, and method for: (i) expressions of acceptance by interested investors and revocation of acceptance; (ii) subscription, payment, and delivery of the NCA; (iii) distribution to the public; (iv) subsequent alienation of the NCA acquired by the distribution leader as a result of providing the guarantee; (v) payment; (vi) for delivery of the NCA; (vii) return and reimbursement to investors, if applicable; and (viii) any other dates related to the public offer of interest to investors or the market in general.

3.2.3 Information on any destination of the public offer or parts of the public offer to specific investors and the description of these investors;

3.2.4 Declaration of inadequacy of the investment for types of investors, if the investment is inadequate for certain types of investors, specifying them and declaring, in a highlighted manner, such inadequacy; and

3.2.5 Admission to trading on stock exchanges, commodities and futures exchanges, or organized over-the-counter market entities.

3.3 NCA DISTRIBUTION CONTRACT

3.3.1 Specify the conditions of the NCA distribution contract with the public and any subscription guarantee provided by the distribution leader and consortium members, specifying the quota of each, if applicable, in addition to other clauses considered relevant for the investor, indicating the location where a copy of the contract is available for consultation or copy;

3.3.2 Relationships of the issuing company with the distribution leader and institutions participating in the distribution consortium, such as loans, investments, and other relationships that may exist, including with financial institutions that have corporate relationships with the consortium members; and

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

3.3.3 Statement of the Distribution Cost, highlighting:

3.3.3.1 the percentage relative to the unit distribution price;

3.3.3.2 Coordination Commission;

3.3.3.3 Placement Commission;

3.3.3.4 Subscription Guarantee Commission;

3.3.3.5 Other Commissions (specify);

3.3.3.6 Unit Distribution Cost;

3.3.3.7 Expenses resulting from the Registration; and

3.3.3.8 Other related costs.

3.4 LIQUIDITY GUARANTEE CONTRACT, PRICE STABILIZATION CONTRACT, AND/OR SUPPLEMENTARY LOT PLACEMENT OPTION CONTRACT

3.4.1 If entered into, inform their main characteristics, in accordance with the norms issued by the CVM, indicating the location where a copy of the contract can be obtained.

3.5 DESTINATION OF RESOURCES

3.5.1 Clear and objective exposure of the destination of the resources resulting from the issuance, as well as its impact on the issuer's equity and results:

3.5.1.1 If the resources are, directly or indirectly, used in the acquisition of assets, except those acquired in the regular course of business, briefly describe these assets and their costs. If acquired from related parties, inform from whom they will be purchased and how the cost will be determined;

3.5.1.2 If the resources are used to acquire other businesses, present a brief description of these businesses and the stage of the acquisitions. If acquired from related parties, inform from whom they will be purchased and how the cost will be determined;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

3.5.1.3 If a significant part of the resources is used to pay off debts, describe the interest rate and term of these debts and, for debts incurred from the previous year, present the destination of those resources, in accordance with items 3.5.1.1 and 3.5.1.2, and highlight whether the creditor of such debts is a participant in the distribution consortium; and

3.5.1.4 In the case where only part of the resources is obtained through the distribution, what other forms of fundraising are planned to achieve its objective. In the event that there are several objectives, and only part of the resources is obtained, which objectives will be prioritized.

3.5.2 Other Sources of Resources - If any, discriminate other sources of resources that will have a destination associated with that related to the public distribution; and

3.5.3 Alternative sources of fundraising, in case of partial distribution.

4. RISK FACTORS

4.1 Expose, in order of relevance, the factors related to the issuance, the NCA, the issuer, the sector of the economy in which it operates or will operate, its shareholders, partners, or cooperative members, as the case may be, and the macroeconomic environment that may, in some way, support the investment decision of a potential investor, considering in the risk analysis horizon the term of the investment and the NCA distributed and the financial culture of the investors targeted by the offer.

5. INFORMATION RELATED TO THE ISSUER

5.1 The physical and electronic location where the issuer's registration information is available for consultation must be presented.

5.2 The offeror, together with the distribution leader, must alert the investor subject to the offer to carefully read certain information from the issuer's registration of the NCA that, in their judgment, they consider most relevant for making an informed and conscious investment decision regarding the offer.

5.3 If there is informational material supporting the distribution, the physical and electronic location for consulting the same must also be informed.

5.4 If there are third-party guarantors or recipients of the resources, information related to them must also be presented for risk analysis purposes.

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

6. DECLARATION THAT ANY OTHER INFORMATION OR CLARIFICATIONS REGARDING THE ISSUER AND THE DISTRIBUTION IN QUESTION CAN BE OBTAINED FROM THE DISTRIBUTION LEADER OR CONSORTIUM MEMBERS, AND AT THE CVM.

7. MINUTES OF THE CORPORATE ACTS THAT DELIBERATED ON THE ISSUANCE.

8. CURRENT BYLAWS OR SOCIAL CONTRACT OF THE ISSUER, AS THE CASE MAY BE.

9. SUMMARY OR RISK CLASSIFICATION REPORT, IF A SPECIALIZED AGENCY WAS HIRED FOR THIS PURPOSE.

10. OTHER DOCUMENTS AND INFORMATION THAT THE CVM DEEMS NECESSARY.

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

ANNEX II
ANNOUNCEMENT OF START OF DISTRIBUTION

I – Name and address of the offeror;

II – Name of the distribution leader and other Intermediary Institutions involved in the distribution, if any;

III – Name of the certificate issuing agent, if applicable;

IV – Characteristics of the offer:

a) date of the corporate deliberations that deliberated the issuance or the offer, as the case may be;

b) nominal value and quantity of NCA to be distributed;

c) maximum discount rate to be adopted or minimum subscription value and other payment conditions;

d) remunerations, discounts, or rebates granted;

e) rights and advantages of the NCA, specifying, including those resulting from eventual decisions of the general meeting or Board of Directors that deliberated the increase, if applicable;

f) description of the target investor audience of the offer; and

g) regime for the placement of the NCA.

V - Date of the start of the distribution;

VI - Procedure provided for the distribution, specifying the type of treatment that will be given to interested parties;

VII - Declaration that the Prospectus will be available to interested parties, indicating the locations and methods by which it can be obtained;

VIII - Declaration of inadequacy or adequacy of the investment for the investors specified, if any;

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

IX - Clarification that more information about the distribution can be obtained from the distribution leader or other Intermediary Institutions, or at the CVM;

X - Number and date of the registration at the CVM, in a highlighted manner;

XI - The following statement, in a highlighted manner:

"THE REGISTRATION OF THIS DISTRIBUTION DOES NOT IMPLY, ON THE PART OF THE CVM, A GUARANTEE OF THE VERACITY OF THE INFORMATION PROVIDED OR A JUDGMENT ON THE QUALITY OF THE ISSUER, AS WELL AS ON THE AGRI-BUSINESS COMMERCIAL NOTES TO BE DISTRIBUTED".

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

ANNEX III
ANNOUNCEMENT OF CLOSING OF DISTRIBUTION

I - Name and address of the offeror;

II - Nominal value and quantity of NCA distributed;

III - Name of the distribution leader and other Intermediary Institutions involved in the distribution, if any;

IV - Name of the certificate issuing agent, if applicable;

V - Date of the corporate deliberations that authorized the issuance or the offer, as the case may be;

VI - Number and date of the registration at the CVM, in a highlighted manner;

VII - The statements, in a highlighted manner: "This announcement is of an exclusively informative nature, not constituting an offer to sell Agribusiness Commercial Notes"; and

VIII - Final placement data, contained in the last Monthly Placement Summary (Annex V).

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

ANNEX IV
SECURITIES DISTRIBUTION CONTRACT
MANDATORY CLAUSES

1. Qualification of the issuing company, the distribution leader, and the other Intermediary Institutions involved in the distribution, if applicable;
2. Corporate resolutions that authorized the issuance;
3. Placement regime of the NCA;
4. Total NCA subject to the contract, with the nominal value, discount rate, if any, and integration conditions mentioned;
5. Resale conditions of the NCA by the distribution leader or by the other Intermediary Institutions involved in the distribution, in the case of a placement regime with firm commitment;
6. Remuneration of the distribution leader and other Intermediary Institutions involved in the distribution, discriminating the commissions due; and
7. Description of the procedure adopted for distribution.

CVM INSTRUCTION NO. 422, OF SEPTEMBER 20, 2005.

ANNEX V
MONTHLY SUMMARY OF NCA PLACEMENT

Subscriptions and integrations carried out during the month shall be reported, or, if applicable, the sales, the balance placed in the previous month, the total placed, and the balance to be placed, discriminating:

1. The distributed issuance;
2. The type of investor, in the following manner:
   2.1 Individuals;
   2.2 Investment clubs;
   2.3 Investment funds;
   2.4 Private pension entities;
   2.5 Insurance companies;
   2.6 Foreign investors;
   2.7 Intermediary Institutions participating in the distribution consortium;
   2.8 Financial institutions linked to the issuer and/or to the consortium participants;
   2.9 Other financial institutions;
   2.10 Other legal entities linked to the issuer and/or to the consortium participants;
   2.11 Other legal entities;
   2.12 Partners, administrators, employees, agents, and other persons linked to the issuer and/or to the consortium participants; and
   2.13 Others (specify).
3. The number of subscribers or acquirers and the quantity of NCA subscribed and integrated.