<SEC-DOCUMENT>0001292814-13-001065.txt : 20130507
<SEC-HEADER>0001292814-13-001065.hdr.sgml : 20130507
<ACCEPTANCE-DATETIME>20130507121625
ACCESSION NUMBER:		0001292814-13-001065
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20121231
FILED AS OF DATE:		20130507
DATE AS OF CHANGE:		20130507

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO-SABESP
		CENTRAL INDEX KEY:			0001170858
		STANDARD INDUSTRIAL CLASSIFICATION:	WATER SUPPLY [4941]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			D5
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31317
		FILM NUMBER:		13818810

	BUSINESS ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
		BUSINESS PHONE:		011-55-11-3388-8000

	MAIL ADDRESS:	
		STREET 1:		RUA COSTA CARVALHO, 300
		STREET 2:		SAO PAULO
		CITY:			SP
		STATE:			D5
		ZIP:			05429-900
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>sbs20121122_6k.htm
<DESCRIPTION>EXCERPT FROM THE MINUTES OF THE 764TH BOARD OF DIRECTORS MEETING
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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Washington, DC 20549 </B></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORM 6-K</B></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>REPORT OF FOREIGN ISSUER</B><BR><B>PURSUANT TO RULE 13a-16 OR 15d-16 OF THE</B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>SECURITIES EXCHANGE ACT OF 1934</B></FONT></DIV>

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<DIV><FONT color=#000000 size=2 face="Times New Roman"><B>For&nbsp;November 22, 2012</B></FONT></DIV><FONT color=#000000 size=2 face="Times New Roman"><B>(Commission File No. 1-31317) </B></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Exact name of registrant as specified in its charter) </I></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>Basic Sanitation Company of the State of Sao Paulo - SABESP </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Translation of Registrant's name into English) </I></FONT></DIV>

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<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><B>Rua Costa Carvalho, 300 <BR>S&#227;o Paulo, S.P., 05429-900 <BR>Federative Republic of Brazil </B></FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman"><I>(Address of Registrant's principal executive offices) </I></FONT></DIV><BR>

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<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark whether the registrant files or will file <BR>annual reports under cover Form 20-F or Form 40-F. <BR><BR>Form 20-F ___X___ Form 40-F ______</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(1)__.</FONT></DIV>

<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">Indicate by check mark if the registrant is submitting the Form 6-K <BR>in paper as permitted by Regulation S-T Rule 101(b)(7)__.</FONT></DIV>

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<P align=center><FONT size=2 face="'Times New Roman, Times, Serif'">Indicate by check mark whether the registrant by furnishing the <BR>information contained in this Form is also thereby furnishing the <BR>information to the Commission pursuant to Rule 12g3-2(b) under <BR>the Securities Exchange Act of 1934. <BR><BR>Yes ______ No ___X___</FONT></P>

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<DIV align=center><FONT color=#000000 size=2 face="Times New Roman">If "Yes" is marked, indicated below the file number assigned to the<BR>registrant in connection with Rule 12g3-2(b):</FONT> </DIV>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

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<P style="TEXT-ALIGN: center" align=center><B><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=verdana,sans-serif>COMPANHIA DE SANEAMENTO B&#193;SICO DO ESTADO DE S&#195;O PAULO - SABESP<BR></FONT></B><B><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Corporate Taxpayer&#8217;s ID (CNPJ): 43.776.517/0001-80<BR></FONT></B><B><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Company Registry (NIRE): 35.3000.1683-1</FONT></B></P>

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<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>EXCERPT FROM THE MINUTES OF THE 764<SUP>TH</SUP> BOARD OF DIRECTORS&#8217; MEETING</FONT></B></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>On November 13, 2012, at 9:00 a.m., the Chairman of the Board of Directors, Edson de Oliveira Giriboni, pursuant to the caput of Article 12 of the Company&#8217;s Bylaws called for an ordinary meeting, which was held in the conference room of the Company&#8217;s headquarters located at Rua Costa Carvalho n&#186; 300, in the city of S&#227;o Paulo, and was attended by the appointed and undersigned members of the Board of Directors of Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP.</FONT><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif> The meeting was called to order, Mr. Edson de Oliveira Giriboni greeted everyone and justified the absence of the Board member Mr. Alexander Bialer. (...) Continuing with the meeting, Mr. Edson Giriboni moved on to the examination of </FONT><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>item 3</FONT></B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif> of the agenda, "</FONT><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Approval of conditions applicable to the 17<SUP>th</SUP> Public Issue of Simple Debentures</FONT></B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>, </FONT><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>pursuant to CVM Instruction 400/2003&#8221; </FONT></B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>(time: 20 minutes), and gave the floor to the Chief Financial Officer and Investor Relations Officer, Rui de Britto &#193;lvares Affonso, and the Head of Capital Markets and Investor Relations, M&#225;rio Azevedo de Arruda Sampaio, who presented the material based on the November 7, 2012 Board of Directors&#8217; Proposal, Executive Board Resolution 356/2012 of November 6, 2012, Internal Notice FI 047/2012 of November 5, 2012 and the Presentation duly distributed to the Board members and filed at the Board of Directors&#8217; office. The matter was put to discussion and vote, and the Board members </FONT><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>unanimously approved</FONT></B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>, in accordance with Article 59, paragraph 1, of Law 6,404/76 (Brazilian Corporation Law) and pursuant to items X and XIII of Article 13 of the Company&#8217;s </FONT><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Bylaws, the </FONT><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>conditions applicable to the 17<SUP>th</SUP> Public Issue of Simple, non-convertible, unsecured Debentures, in up to three series, pursuant to CVM Instruction 400/2003, of December 29, 2003, as amended (&#8220;Debentures&#8221; and &#8220;CVM Instruction 400&#8221;, respectively)</FONT></B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>, as described below: </FONT></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

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<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>1) Issuer</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo &#8211; SABESP (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>Issuer</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>&#8221; or &#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>Company</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=PT-BR face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>2) Issue Amount:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Up to one billion reais (R$1,000,000,000.00), on the Issue Date (as defined below), given that this amount may be increased by up to fifteen percent (15%) or twenty percent (20%), in view of the Overallotment Option and the Additional Lot Option, respectively, pursuant to CVM Instruction 400.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>3) Overallotment Option and Additional Lot Option</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Issuer may, at its sole discretion and in compliance with the placement regime mentioned in item 11 below, increase the number of the Debentures to be distributed by up to twenty percent (20%), based on the amount originally established for the 17<SUP>th</SUP> issue approved herein, without any need for filing for a new registration with the Brazilian Securities and Exchange Commission (CVM) or altering the terms of the Debenture offering, pursuant to Article 14 of CVM Instruction 400 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Additional Lot Option</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Without prejudice to the foregoing, to meet an eventual excess demand for the Debentures, and provided the placement regime mentioned in item 11 below is complied with, the Issuer may grant the Coordinators the option to increase the number of Debentures to be issued by up to fifteen percent (15%), based on the amount originally established for the 17<SUP>th</SUP> issue approved herein, as long as it complies with the same conditions and the same Remuneration of the Debentures originally offered and the Bookbuilding Process (as defined below), pursuant to Article 24 of CVM Instruction 400 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Overallotment Option</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), given that the Issuer should take all the necessary measures to carry on with the issue of said Debentures before the CVM.</FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

<P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=Arial,sans-serif><BR clear=all></FONT><FONT style="FONT-SIZE: 11pt" lang=PT-BR face="times new roman">&nbsp;&nbsp;</FONT></P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>4) Number of series:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Debenture issue will be carried</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif> out in up to three series, given that the number of Debentures in each series will be defined based on the Bookbuilding Process, with the allocation into series via the communicating vessels system.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> &nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>5) Type:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Unsecured.&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>6) Issue Date:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>For all legal purposes, the Debentures&#8217; issue date shall be January 15, 2013 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Issue Date</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;). &nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>7) Type, Form and Convertibility:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>the Debentures will be simple registered, book-entry, non-convertible into shares issued by the Issuer and without issue of certificates.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>8) Number of Debentures:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Company will issue one hundred thousand (100,000) Debentures, in up to three series, without prejudice to the provisions in item 3 above.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The total number of Debentures to be issued will be defined after the Bookbuilding Process, and the minimum number of the debentures to be placed, given the firm placement commitment mentioned in item 11(i) below is fifty thousand (50,000) Debentures, which would correspond to five hundred million reais (R$500,000,000.00), on the Issue Date, in accordance with the Debentures&#8217; Nominal Unit Value (as defined below).</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>9) Bookbuilding Process</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Coordinators will organize the process of collecting investment intentions, in accordance with paragraph 1 and 2 of Article 23 and Article 44 of CVM Instruction 400 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Bookbuilding Process</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), without accepting reservations, and without minimum or maximum lots, and together with the Issuer, the Coordinators will decide on (i) the Remuneration of each series of Debentures;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(ii) the number of Debentures in each series;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (iii) the number of series.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>10) Nominal Unit Value of the Debentures:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>ten thousand reais (R$10,000.00) on the Issue Date (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Nominal Unit Value</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>11) Placement Regime:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(i) firm placement commitment, up to the limit of five hundred million reais (R$500,000,000.00), exclusively related to the 1<SUP>st</SUP> Series Debentures;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (i) best placement efforts, up to the limit of five hundred million reais (R$500,000,000.00), related to the 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series Debentures.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Debentures issued due to the exercising of <I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>the Overallotment Option and the Debentures distributed due to the Additional Lot Option will be subject to public distribution under the best placement efforts regime.</FONT></I></FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

<P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=Arial,sans-serif><BR clear=all></FONT><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>12) Placement and Distribution:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Debentures will be distributed through a public offering, pursuant to CVM Instruction 400, with intermediation by BB &#8211; Banco de Investimento S.A. (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Leader Coordinator</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;) and Banco Bradesco BBI S.A. (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Bradesco BBI</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221; and, together with the Leader Coordinator, &#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Coordinators</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> &nbsp;</FONT></I></P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>13) Price of Subscription and Payment:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The debentures shall be subscribed and paid in full, on the primary market, as follows:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(i) Debentures of the 1<SUP>st</SUP> Series will be subscribed and paid in at their Nominal Unit Value, plus the Remuneration of the 1<SUP>st</SUP> Series Debentures; </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(i) Debentures of the 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series will be subscribed and paid in at their Nominal Unit Value, monetarily restated, plus the Remuneration of the 2<SUP>nd</SUP> Series Debentures and the Remuneration of the 3<SUP>rd</SUP> Series Debentures, respectively (as described below); </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>In both cases, Debentures will be subject to pro rata temporis Remuneration from the Issue Date up to the Date of the effective subscription and payment in full, calculated to two (2) decimal places. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The payment for the Debentures will be in cash, in local currency, through the SDT &#8211; Securities Distribution System (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>SDT</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), managed and run by CETIP, and/or through the DDA &#8211; Assets Distribution System (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>DDA</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), managed and run by the BM&amp;FBOVESPA S.A. &#8211; Securities, Commodities and Futures Exchange (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>BM&amp;FBOVESPA</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), as of the initial distribution date.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>14) Monetary Restatement:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Nominal Unit Value of Debentures of the 1<SUP>st</SUP> Series will not be subject to monetary restatement. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Nominal Unit Value of Debentures of the 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series will be monetarily restated as of the Issue Date, based on the variation in the Extended Consumer Price Index &#8211; IPCA (&#8220;IPCA&#8221;), assessed and disclosed by the Brazilian Institute of Geography and Statistics &#8211; IBGE (</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>IPCA</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221; and </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Monetary Restatement of 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;, respectively), and the result of the Monetary Restatement of 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series Debentures will be automatically incorporated into the Nominal Unit Value or the Balance of the Nominal Unit Value of 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series Debentures, respectively, using the formula established in the indenture. </FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

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<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>15) Remuneration, Calculation and Payments:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> &nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(a) </FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 1<SUP>st</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The 1<SUP>st</SUP> Series Debentures will be entitled to remuneration to be defined during the Bookbuilding Process, corresponding to one hundred percent (100%) of the accrued variation of the daily Interbank Deposit Rate &#8211; DI, extra-grupo (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>DI Rate</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;), expressed as a one-year percentage, based on a year of two hundred and fifty-two (252) business days, calculated and disclosed by CETIP on a daily basis in the bulletin available on its website (http://www.cetip.com.br), plus a maximum eighty-five hundredths of a percent (0.85%) per year, based on a year of two hundred and fifty-two (252) business days (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 1<SUP>st</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Remuneration of the 1<SUP>st</SUP> Series Debentures will be calculated exponentially and cumulatively pro rata temporis, per business day, on the Nominal Unit Value of the 1<SUP>st</SUP> Series Debentures or the Balance of the Nominal Unit Value of the 1<SUP>st</SUP> Series Debentures, from the Issue Date or the last payment date of Remuneration of the 1<SUP>st</SUP> Series Debentures, whichever the case. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The payments of the Remuneration of the 1<SUP>st</SUP> Series Debentures will be made biannually, on the 15<SUP>th</SUP> of January and July of each year, with the first payment due on July 15, 2013 and the last payment due on the Maturity Date of the 1<SUP>st</SUP> Series Debentures</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>.&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> &nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(b) </FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 2<SUP>nd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The 2<SUP>nd</SUP> Series Debentures will be entitled to remuneration that includes restatement of the Nominal Unit Value as of the Issue Date, in accordance with the accrued IPCA variation plus remunerative interest to be defined during the Bookbuilding Process, at a maximum rate of five and seventy hundredths of a percent (5.70%) per year, on the Nominal Unit Value or updated balance of the Nominal Unit Value of the 2<SUP>nd</SUP> Series Debentures, calculated per business day, based on a year of two hundred and fifty-two (252) business days, as of the Issue Date, calculated under a pro rata temporis capitalization regime by business days, in accordance with the calculation rules defined in said indenture (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 2<SUP>nd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;).&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The payments of the Remuneration of the 2<SUP>nd</SUP> Series Debentures will be made biannually, on the 15<SUP>th</SUP> of January of each year, as of the Issue Date, with the first payment due on January 15, 2014 and the last payment due on the Maturity Date of the 2<SUP>nd</SUP> Series Debentures.</FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

<P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=Arial,sans-serif><BR clear=all></FONT><FONT style="FONT-SIZE: 11pt" lang=PT-BR face="times new roman">&nbsp;&nbsp;</FONT></P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(c) </FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 3<SUP>rd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>:&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The 3<SUP>rd</SUP> Series Debentures will be entitled to remuneration that includes restatement of the Nominal Unit Value as of the Issue Date, in accordance with the accrued IPCA variation plus remunerative interest to be defined during the Bookbuilding Process, at a maximum rate of six and fifteen hundredths of a percent (6.15%) per year, on the Nominal Unit Value or updated balance of the Nominal Unit Value of the 3<SUP>rd</SUP> Series Debentures, calculated per business day, based on a year of two hundred and fifty-two (252) business days, as of the Issue Date, calculated under a pro rata temporis capitalization regime per business day, in accordance with the calculation rules defined in said indenture (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the 3<SUP>rd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221; and together with the Remuneration of the 1<SUP>st</SUP> Series Debentures and the Remuneration of the 2<SUP>nd</SUP> Series Debentures, "</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Remuneration of the Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>").&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; LAYOUT-GRID-MODE: line; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The payments of the Remuneration of the 3<SUP>rd</SUP> Series Debentures will be made annually, on the 15<SUP>th</SUP> of January of each year, as of the Issue Date, with the first payment due on January 15, 2014 and the last payment due on the Maturity Date of the 3<SUP>rd</SUP> Series Debentures.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>16) Term and Maturity Date:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Except in the cases of optional acquisition, optional offer with early redemption and/or early maturity, as defined in the Issue Indenture (i) the 1<SUP>st</SUP> Series Debentures will mature in five (5) years as of the Issue Date, on January 15, 2018, as defined by the Issuer and the Coordinators ("</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Maturity Date of 1<SUP>st</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;); &nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(ii) the 2<SUP>nd</SUP> Series Debentures will mature in seven (7) years as of the Issue Date, on January 15, 2020 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Maturity Date of 2<SUP>nd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>");&nbsp; &nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (iii) the 3<SUP>rd</SUP> Series Debentures will mature in ten (10) years as of the Issue Date, on January 15, 2023 (&#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Maturity Date of 3<SUP>rd</SUP> Series Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>" and together with the Maturity Date of the 1<SUP>st</SUP> Series Debentures and the Maturity Date of the 2<SUP>nd</SUP> Series Debentures, &#8220;</FONT></I><I><U><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Maturity Date of the Debentures</FONT></U></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>&#8221;); &nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>17) Guarantee:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>none.&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>18) Amortization:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Except in the cases of optional acquisition, optional offer with early redemption and/or early maturity, as defined in the Issue Indenture, the amortization of the 1<SUP>st</SUP> Series Debentures will take place in three (3) annual, consecutive installments, as follows (i) the first installment, equal to thirty-three percent (33.00%) of the Nominal Unit Value, </FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

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<I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>maturing on January 15, 2016;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(ii) the second installment, equal to thirty-three percent (33.00%) of the Nominal Unit Value, maturing on January 15, 2017;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (iii) the third installment, equal to the balance of the Nominal Unit Value, maturing on January 15, 2018.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The amortization of the 2<SUP>nd</SUP> and 3<SUP>rd</SUP> Series Debentures will take place in two (2) and three (3) annual consecutive installments, respectively, as follows: (A) in the case of the 2<SUP>nd</SUP> Series Debentures, (i) the first installment, corresponding to fifty percent (50.00%) of the updated Nominal Unit Value, maturing on January 15, 2019;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (ii) the second installment, corresponding to the updated balance of the Nominal Unit Value, maturing on January 15, 2020;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (B) in the case of the 3<SUP>rd</SUP> Series Debentures, (i) the first installment, corresponding to thirty-three percent (33.00%) of the updated Nominal Unit Value, maturing on January 15, 2021;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(ii) the second installment, equal to thirty-three percent (33.00%) of the updated Nominal Unit Value, maturing on January 15, 2022;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (iii) the third installment, equal to the updated balance of the Nominal Unit Value, maturing on January 15, 2023.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>19) Payment Venue:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The payments due from the Debentures will be made by the Issuer on the respective maturity date, according to the following procedures as the case may be:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(a) the procedures adopted by CETIP and/or BM&amp;FBOVESPA, for the Debentures held in electronic custody by CETIP and/or BM&amp;FBOVESPA, as the case may be; and/or (b) the procedures adopted by the bookkeeper, for the Debentures that are not held in electronic custody by CETIP and/or BM&amp;FBOVESPA.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>20) Extended Terms:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>the periods for the payment of any obligation arising from the Debentures will be extended until the subsequent business day if the due date coincides with a day that is not a business or banking day in the payment location of the Debentures in the city and state of S&#227;o Paulo, without any increase in the amounts to be paid, except for cases in which the payments must be made through CETIP, in which case an extension is granted only when the due date falls on a national holiday, Saturday and/or Sunday.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>21) Allocation of Funds:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The proceeds from the Debentures will be allocated exclusively as follows: (i) five hundred million reais (R$500,000,000.00) to the settlement of Company&#8217;s financial obligations maturing in 2013; and (ii) up to five hundred million reais </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(R$500,000,000.00) to the early redemption of the debentures from the Company&#8217;s 16<SUP>th</SUP> debenture issue or other Company debt, at its own criterion. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The remaining proceeds from the issue of the Debentures, including the amounts arising from the exercising of the Overallotment Option and/or the Additional Lot Option, will be allocated to strengthen the Company&#8217;s cash flow.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

<P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=Arial,sans-serif><BR clear=all></FONT><FONT style="FONT-SIZE: 11pt" lang=PT-BR face="times new roman">&nbsp;&nbsp;</FONT></P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>22) Registration for Placement and Trade:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Debentures are registered for:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(i) public distribution on the primary market through:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(a) the SDT, managed and run by CETIP, with the distribution settled through CETIP, and/or (b) the DDA, managed and run by BM&amp;FBOVESPA;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and (ii) trading on the secondary market through:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(a) the SND &#8211; National Debenture System (&#8220;SND&#8221;), managed and run by CETIP, with trades settled and Debentures held in custody electronically by CETIP; </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>and/or (b) the BOVESPA FIX System, managed and run by BM&amp;FBOVESPA S.A., with trades settled and Debentures held in custody electronically by BM&amp;FBOVESPA.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> &nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>23) Optional Acquisition:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Company may, at any time, acquire outstanding Debentures, pursuant to the terms of paragraph 3, Article 55 of the Brazilian Corporation Law. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Debentures acquired by the Company may be:</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(i) canceled, through a deliberate act of the Company;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>(ii) held in the Company&#8217;s treasury; or (iii) once again placed on the market. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Debentures acquired by the Company and held in treasury, once placed on the market again, will be entitled to the same Remuneration as the other outstanding Debentures. </FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>24) Optional Offer of Early Redemption:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Company may, at any time and at its sole criterion, execute a partial or total optional offer of early redemption for any of the series of Debentures, upon resolution by a Board of Directors' meeting, provided the terms and conditions established in the Debenture indenture are complied with.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The optional offer of early redemption should be addressed to all Debenture holders, with no exceptions, ensuring all Debenture holders may accept the early redemption under equal conditions.</FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Debentures redeemed in advance, in accordance with the terms of the optional offer of early redemption, will be canceled by the Issuer. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;&nbsp;</FONT></I></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV><FONT style="FONT-SIZE: 14pt" lang=PT-BR face="folio md bt,sans-serif">&nbsp; </FONT>

<P style="MARGIN: 0cm 0cm 0pt"><FONT style="FONT-SIZE: 11pt" lang=PT-BR face=Arial,sans-serif><BR clear=all></FONT><FONT style="FONT-SIZE: 11pt" lang=PT-BR face="times new roman">&nbsp;&nbsp;</FONT></P></DIV>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>25) Default Charges:</FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>Without prejudice to the Remuneration of the Debentures, in case of any delay in the payment of any amount due to the Debenture holders, the late payments will be subject to a fine of two percent (2%) of the amount due and overdue charges shall be calculated from the date of default to the date of effective payment, at a rate of one percent (1%) per month on the overdue amount, regardless of any notice, notification or legal or any other intervention, in addition to expenses incurred in collection. </FONT></I><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif>&nbsp;&nbsp;</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>26) Potential Early Redemption Events:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>the Debentures will have early redemption declared in case of the events envisaged in the Debenture indenture, as negotiated with the Coordinators.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>27) Renegotiation:</FONT></I></B><B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US color=black face=verdana,sans-serif> </FONT></I></B><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The debentures shall not be renegotiated.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><I><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 10pt" lang=EN-US face=verdana,sans-serif>The Board of Directors also authorized the Company's Management to take all the necessary measures related to the 17<SUP>th</SUP> issue of simple, unsecured, non-convertible debentures, in up to three series, provided all legal and statutory provisions are complied, including defining the number of series to be issued and establishing the remuneration and the allocation of the proceeds from the Debentures after the Bookbuilding Process to be conducted by the Coordinators, within the limits and parameters established herein. All measures already taken by Management in regard to the Company&#8217;s 17<SUP>th</SUP> debenture issue are hereby ratified.</FONT></I></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><B><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif></FONT></B>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 0cm 0pt"><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>(...)</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 6pt 3.95pt 0pt 0cm"><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>These minutes, after being approved, were signed by the attending members of the Board of Directors.</FONT><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US color=black face=verdana,sans-serif> </FONT><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=PT-BR face=verdana,sans-serif>Edson de Oliveira Giriboni, Andrea Sandro Calabi, Alberto Goldman, Dilma Seli Pena, Heraldo Gilberto de Oliveira, Jer&#244;nimo Antunes, Reinaldo Guerreiro, Sidney Estanislau Beraldo and Walter Tesch.</FONT></P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 3.95pt 0pt 0cm"><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=PT-BR face=verdana,sans-serif></FONT>&nbsp;</P>

<P style="TEXT-ALIGN: justify; MARGIN: 0cm 3.95pt 0pt 0cm"><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>This is a free English translation of the excerpt of the original Minutes drawn up in the Book of Minutes of the Board of Directors.</FONT></P>

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   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" face=verdana,sans-serif>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo</FONT></FONT></P>

   <P style="TEXT-ALIGN: right; MARGIN: 0cm 5.55pt 0pt 0cm" align=right><FONT face=verdana,sans-serif><FONT style="FONT-SIZE: 9pt" lang=EN-US face=verdana,sans-serif>Board of Directors</FONT></FONT><FONT face=verdana,sans-serif> </FONT></P></DIV></TD></TR></TABLE></DIV>

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<P style="TEXT-ALIGN: justify; MARGIN: 0cm 32.3pt 0pt 0cm"><FONT style="LINE-HEIGHT: 150%; FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>S&#227;o Paulo, November 13, 2012</FONT></P>

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   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 32.4pt 0pt 0cm"><B><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Edson de Oliveira Giriboni</FONT></B></P></TD>

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   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 32.4pt 0pt 0cm"><B><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Sandra Maria Giannella</FONT></B></P></TD></TR>

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   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 32.4pt 0pt 0cm"><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Chairman of the </FONT></P>

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   <P style="TEXT-ALIGN: justify; MARGIN: 0cm 32.4pt 0pt 0cm"><FONT style="FONT-SIZE: 11pt" lang=EN-US face=verdana,sans-serif>Executive Secretary of the </FONT></P>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>

<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B><U>SIGNATURE&nbsp;</U></B></FONT><FONT size=1>&nbsp;</FONT></DIV></U></B></FONT>

<DIV><FONT size=1></FONT>&nbsp;</DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city S&#227;o Paulo, Brazil. <BR></FONT></DIV>

<DIV align=justify><FONT color=#000000 size=3 face="Times New Roman">Date:&nbsp;November 22, 2012</FONT></DIV>

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   <DIV align=left><FONT color=#000000 size=3 face="Times New Roman"><B>Companhia de Saneamento B&#225;sico do Estado de S&#227;o Paulo - SABESP </B></FONT></DIV></TD></TR>

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   <TD vAlign=top align=left><FONT color=#000000 size=2 face="Times New Roman">By:</FONT></TD>

   <TD vAlign=bottom align=left>/s/&nbsp;&nbsp;<FONT style="FONT-FAMILY: times new roman" size=3>Rui de Britto &#193;lvares Affonso</FONT>&nbsp;&nbsp;&nbsp;&nbsp;

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   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Name: Rui de Britto &#193;lvares Affonso </FONT></DIV>

   <DIV align=left><FONT color=#000000 size=2 face="Times New Roman">Title: Chief Financial Officer and Investor Relations Officer </FONT></DIV></TD>

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<DIV align=center><FONT color=#000000 size=3 face="Times New Roman"><B>FORWARD-LOOKING STATEMENTS </B></FONT></DIV>

<P align=justify><FONT size=2 face="'Times New Roman, Times, Serif'">This press release may contain forward-looking statements. These statements are statements that are not historical facts, and are based on management's current view and estimates of future economic circumstances, industry conditions, company performance and financial results. The words "anticipates", "believes", "estimates", "expects", "plans" and similar expressions, as they relate to the company, are intended to identify forward-looking statements. Statements regarding the declaration or payment of dividends, the implementation of principal operating and financing strategies and capital expenditure plans, the direction of future operations and the factors or trends affecting financial condition, liquidity or results of operations are examples of forward-looking statements. Such statements reflect the current views of management and are subject to a number of risks and uncertainties. There is no guarantee that the expected events, trends or results will actually occur. The statements are based on many assumptions and factors, including general economic and market conditions, industry conditions, and operating factors. Any changes in such assumptions or factors could cause actual results to differ materially from current expectations. </FONT></P>

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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
