Minutes of the Board of Directors‘ Meeting – Issuance of Debentures
1. Date, Time and Venue: Held in August 14th, 2017, at 10 a.m, at the office of Minerva S.A. (“Company”), located in the city of São Paulo, State of São Paulo, at Rua Leopoldo Couto de Magalhães Júnior, 758, 8th floor, suite 82, Postal Code (CEP) 04542-000.
2. Presiding: Edivar Vilela de Queiroz, Chairman; Fernando Galletti de Queiroz, Secretary.
3. Call Notice: The call notice was waived due to the presence of all the members of the Company’s Board of Directors, in accordance with Article 15, sole paragraph of the Company’s Bylaws.
4. Attendance: All members of the Company’s Board of Directors, being part of the members in person at the local of the meeting and other members participating in the meeting through remote devices, as allowed by Article 18, §1º of the Company’s Bylaws.
5. Agenda: The members of the Company’s Board of Directors convened to examine, discuss and resolve on the following agenda: (1) Realization of the 5th (fifth) issuance of simple debentures, non-convertible into shares, of unsecured type, in a single series, for private placement, of the Company in the amount of up to R$ 405,000,000.00 (four hundred and five million Brazilian reais) (“Issuance” and “Debentures”, respectively), which is part of a securitization of agribusiness receivables that will result in the issuance of agribusiness receivables certificates for the 2nd Series of the 1st Issuance of Cibrasec – Companhia Brasileira de Securitização (“Securitizer”) (“CRA” and “Securitization Operation”, respectively) in the amount of up to R$ 405,000,000.00 (four hundred and five million Brazilian reais); and (2) Authorization of the Company‘s Board of Directors to discuss, negotiate and conclude all contractual instruments related to the Issuance and Securitization Operation, in accordance with the parameters described above, including but not limited to the contracting of financial institutions and any other service providers Related to the Issuance and Securitization Operation, and to the practice of all and any acts necessary for the effective execution of the Issuance and Securitization Operation, as well as to ratify the acts already practiced by the Board of Directors accordingly, as applicable.
6. Resolutions: After discussing the matters on the agenda, the members of the Company’s Board of Directors have resolved, by unanimity of votes and without restrictions, the following:
6.1. To approve the Issuance, in accordance with the following characteristics and main conditions, which will be detailed and regulated through the execution of the “Private Instrument of Deed of the 5th (fifth) Issuance of Simple Debentures, Non-Convertible into Shares, of unsecured type, in a single series, for Private Placement, of Minerva SA “and its eventual amendments to be signed between the Company, BRAF2S Agente de Garantias SPE Ltda. (“Initial Debenture Holder”) and the Securitizer (“Deed of Issuance”):
(i) Total number of Debentures: up to 405,000 (four hundred and five thousand) Debentures will be issued;
(ii) Nominal unit value: the unit face value of the Debentures, on the Issuance Date (as defined below), shall be R$ 1,000.00 (one thousand Brazilian reais) (“Nominal Unit Value”);
(iii) Total Issuance Value: up to R$ 405,000,000.00 (four hundred and five million Brazilian reais);
(iv) Form, Convertibility and Proof of Ownership of the Debentures: the Debentures shall have a nominative, book-entry form, without issuance of caution or certificates, and shall not be convertible into shares issued by the Company;
(v) Issuance date: for all legal purposes, the Issuance Date of the Debentures shall be that established in the Deed of Issuance (“Issuance Date”);
(vi) Maturity: the Debentures will have a term of validity of 3 (three) years as of the Issuance Date (“Maturity Date”), except for the hypotheses of early maturity of the Debentures due to the occurrence of one of the Events of Default (as defined below) or the early redemption of the Debentures, under the terms to be provided in the Deed of Issuance;
(vii) Price and Form of Subscription and Payment: the Debentures will be subscribed by the Initial Debenture Holder, by means of the subscription list, according to the model to be attached to the Deed of Issuance (“Subscription List”), by its Nominal Unit Value. Notwithstanding the subscription of all Debentures occurring at the time of signing of the Subscription List, the payment of the Debentures, with the consequent transfer of the amounts to the Issuer, will occur only on the date of payment of the CRAs, as defined in the CRA securitization term (“Date of Payment”), through the payment of the CRA by the respective investors;
(viii) Registration for distribution and trading: Debentures will not be registered for distribution in the primary market, trading in the secondary market, electronic custody or liquidation in any organized market;
(ix) Disposal, Transfer and Ownership of Debentures: in view of the fact that the issue of Debentures is included in the context of the Securitization Operation, the Debentures, immediately after their payment by the Initial Debenture Holder, will be fully transferred to the Securitizer through an “Acquisition and Transfer of Debentures and Other Covenants Agreement”, whereby the Securitizer will succeed the Initial Debenture Holder as the holder of the Debentures for all legal purposes;
(x) Remuneration: The Unit Face Value of the Debentures will not be monetarily restated. As from the first Payment Date, the Debentures will be entitled to interest on the Nominal Unit Value or balance of the Nominal Unit Value, as applicable, equivalent to a maximum of 106.00% (one hundred and six percent) of the DI Rate (“Remuneration”), as will be determined in bookbuilding procedure, observing the procedures to be foreseen in the securitization term of the CRA. The Company may reduce the Remuneration, limited to the final remuneration rate of the CRA, without the need to: (a) hold a general meeting of debenture holders, or (b) approval by CRA holders, provided that such amendment is duly formalized before the Payment Date (as defined below), upon the execution and registration of an amendment to the Issuance Deed. The remuneration of the Debentures will be calculated exponentially and cumulatively pro rata temporis, for Business Days elapsed, from the first Payment Date or from the last Payment Date of the Remuneration (as defined below), as the case may be, until the Payment Date of the Remuneration immediately following, and paid at the end of each Capitalization Period (as defined in the Deed of Issuance), obeying the formula to be provided in the Deed of Issuance. Exceptionally, in the first Capitalization Period, a remuneration premium equivalent to the production of one (1) Compensation Business Day will be capitalized, considering the DI Rate released on the 2nd (second) Business Day preceding the first Payment Date. The calculation of this amount must observe the calculation formula of Remuneration to be established in the Deed;
(xi) Frequency of payment of Remuneration Interest: Remuneration will be paid according to the schedule set forth in the Deed of Issuance (or on the date of the early redemption of the Debentures resulting (a) from the anticipated maturity of the Debentures, due to the occurrence of one of the Events of Default, or (b) the early redemption of the Debentures, under the terms to be provided in the Deed of Issuance) (each of these dates, a “Remuneration Payment Date”);
(xii) Amortization of the Nominal Unit Value: the Nominal Unit Value of the Debentures will be amortized in 1 (one) installment on the Maturity Date (“Amortization Date of the Nominal Unit Value”), subject to the provisions of the Deed of Issuance;
(xiii) Optional Partial Early Redemption: the Company will not be able to make optional partial early redemption of the Debentures;
(xiv) Optional Extraordinary Amortization: the Company may not make an optional extraordinary amortization of the Debentures;
(xv) Early Redemption Offer: The Company may, at its sole discretion, make at any time, an offer of early redemption of the Debentures, addressed to the Debenture Holder and to the fiduciary agent of the CRAs, and to the Debenture Holder is assured the faculty to accept or not the redemption of the Debentures held by it (“Early Redemption Offer”), being observed the procedures to be provided in the Deed of Issuance;
(xvi) Early redepmtion: In accordance with the provisions of the Deed of Issuance, the Debentures will mature in advance, regardless of any judicial and/or extrajudicial notification, in a way that the Company will pay the Nominal Unit Value (or the Nominal Unit Value balance, as applicable) of each Debenture, plus the Remuneration, calculated pro rata temporis, from the Payment Date or of the immediately preceding Remuneration Payment Date, as the case may be, until the date of its actual payment, in the occurrence of the events to be provided in the Deed of Issuance (each of them, an “Event of Default”);
(xvii) Allocation of Resources: the resources obtained by the Company due to the payment of Debentures should be allocated to its activities in agribusiness, in the field of industry and trade in meat, especially through the use of resources in investments, costs and expenses related to the production, processing, industrialization, commercialization, purchase, sale, import, export, distribution and/or processing of (a) cattle, sheep, pigs, birds and other animals, standing or slaughtered, as well as meat, products and subproducts derived therefrom, whether in the natural state, manufactured or manipulated in any form or manner, and (b) proteins and food products in general, fresh or prepared, processed or not, for the Brazilian and foreign markets;
(xviii) Penalty and Default Charges: In the event that the Company fails to make any payments of any amounts due to the Debenture Holder on the dates they are due, such payments due and unpaid will continue to be subject to any compensation payable thereon, and will be furthermore subject to: (a) a conventional, irreducible and non-compensatory fine of 2% (two percent) on the amount due and not paid; (b) non-compensatory interest calculated at the rate of 1% (one percent) per month, pro rata temporis; and (c) annual monetary adjustment of the cumulative variation of the IPCA, or in the absence thereof, or inability to use, by the index that will replace it calculated pro rata die, if necessary. The deferred charges established herein shall cover the amount due and not paid since the actual non-compliance of the respective obligation until the date of its actual payment, regardless of warning, notice or judicial or extrajudicial injunction. If these payment delays are (i) due to operating system problems not imputed to the Company, and (ii) are remedied within a period of two (2) Business Days counted from the occurrence of system operating problems, no default charges shall be levied on the amounts due to CRA holders;
(xix) Renegotiation: the Debentures will not be object of renegotiation;
(xx) Place of Payment: the payments to which the Debentures are entitled shall be made by the Issuer by means of a current account credit held by the Debenture Holder, to be duly informed by the Issuer, or, after the transfer of the Debentures to the Securitizer;
(xxi) Payment of Taxes: The Issuer shall be responsible for the collection and retention and/or payment of taxes levied on payments and income due to the Debenture Holder and that arise or may eventually arise as a result of the Debentures. All taxes, fees, charges and/or fees levied on the income paid under the Debentures shall be fully paid by the Issuer. In this sense, such payments shall be increased by the amounts corresponding to the current and future taxes, fees, charges and/or tariffs that may be levied on them, which may be levied or be deemed due on the Debentures‘ income. Likewise, if any taxes, fees, charges and/or tariffs have to be withheld or deducted from payments made under the Debentures, by virtue of a law or regulatory norm, the Issuer shall add to such payments additional amounts so that the Securitizer receives the same net amounts that would be received by it if no retention or deduction had occurred; and
(xxii) Other Conditions: All other conditions and specific rules related to the issuance of the Debentures will be dealt with in detail in the Deed of Issuance.
6.2. Authorize the Company‘s Board of Directors to discuss, negotiate and conclude all contractual instruments related to the Issuance and Securitization Operation, in accordance with the parameters described above, including but not limited to the contracting of financial institutions and any other service providers Related to the Issuance and Securitization Operation, and to the practice of all and any acts necessary for the effective execution of the Issuance and Securitization Operation, as well as to ratify the acts already practiced by the Board of Directors accordingly, as applicable.
7. Closure and Drawing up of the Minutes: There being no further business to discuss, the Chairman offered the floor to anyone who intended to speak, and as no one did, the meeting was adjourned for the time necessary to draw up these minutes, which were then read, approved and signed by all the members attending the meeting. Place and Date: São Paulo, August 14th, 2017. Presiding: (aa) Edivar Vilela de Queiroz, Chairman; Fernando Galletti de Queiroz, Secretary. Attending Board Members: (aa) Edivar Vilela de Queiroz, Antonio Vilela de Queiroz, Ibar Vilela de Queiroz, Roberto Rodrigues, José Luiz Rego Glaser, Alexandre Lahoz Mendonça de Barros, Sérgio Carvalho Mandin Fonseca, Abdullah Ali Aldubaikhi, Salman Abdulrahman Binseaidan e Abdulaziz Saleh Al-Rebdi.
Declaration: This is a free English translation of the original minutes drawn up in the Company’s Book of Minutes of the Board of Directors’ Meetings No. 11, pages 130 through 137.
São Paulo, August 14th, 2017.
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