TOTVS S.A. CNPJ/MF nº / NIRE MANAGEMENT PROPOSAL EXTRAORDINARY GENERAL MEETING

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1 TOTVS S.A. CNPJ/MF nº / NIRE MANAGEMENT PROPOSAL EXTRAORDINARY GENERAL MEETING November 19, 2015

2 TABLE OF CONTENTS 1. Approval of the Protocol and Justification Ratification of the Appointment of the Specialized Firm Approval of the Appraisal Reports Approve the Mergers Approval of the Incentive Plan Ratification of the previous Plans Additional Information and Where to Find Them... 2 SCHEDULE I INFORMATION ABOUT THE MERGERS (schedule 20-A of CVM Ruling 481/09)... 3 SCHEDULE I.1 PROTOCOL AND JUSTIFICATION... 9 SCHEDULE I.6 COPY OF THE MINUTES OF THE MEETING THAT DISCUSSED THE MERGERS SCHEDULE I.7 COPY OF OTHER RELEVANT DOCUMENTS SCHEDULE I.9 FINANCIAL STATEMENTS SCHEDULE II INFORMATION OF THE APPRAISER (article 21 of CVM Ruling no. 481/09) SCHEDULE II.3. WORK AND FEE PROPOSAL OF THE APPRAISERS SCHEDULE III INCENTIVE PLAN (SCHEDULE 13 OF ICVM 481) SCHEDULE III.1 COPY OF THE INCENTIVE PLAN ** ** **

3 To the shareholders, TOTVS S.A. CNPJ/MF nº / NIRE Management Proposal for the extraordinary general meeting convened to December 15, 2015 The management of TOTVS S.A. TOTVS submits to the shareholders its proposal Proposal on the matters to be resolved in the extraordinary general meeting convened, in first call, to December 15, 2015, at 10 am, at the head office of TOTVS General Meeting. The management of TOTVS informs that the matters contemplated in this proposal are a part of the proposal of a corporate reorganization within the same economic group, which will result in the mergers by TOTVS of (i) TOTVS Soluções em Agroindústria S.A. PRX and ii P2RX Soluções em Software S.A. P2RX and, jointly with PRX, Merged Companies, both fully owned by TOTVS Mergers, in accordance with the terms of the protocol and justification of the Mergers, entered into on this date by the management of TOTVS and of the Merged Companies Companies Protocol and Justification. The main terms of the Mergers, as required by article 20-A of CVM Ruling No. 481/09, are described in Schedule I of this proposal. 1. Approval of the Protocol and Justification It is the proposal that the Protocol and Justification, entered into on November 17, 2015 among the management of the Companies, be approved with the corresponding approval of the Mergers. The Protocol and Justification is attached hereto as Schedule I Ratification of the Appointment of the Specialized Firm It is the proposal that the appointment, by the management of TOTVS, of the specialized firm APSIS Consultoria Empresarial Ltda. (CNPJ under No / ), for the preparation of the appraisal reports of the book value of the Merged Companies net equity Appraisal Reports, be ratified. The information required by article 21 of CVM Ruling No. 481/09, are attached hereto as Schedule II. 3. Approval of the Appraisal Reports It is the proposal that the Appraisal Reports, with reference date of September 30, 2015, be approved. The Appraisal Reports are attached hereto as Schedule I Approve the Mergers It is the proposal that the Mergers, in the terms and conditions contemplated in the Protocol and Justification, be approved resulting in the mergers of Merged Companies. Upon the approval of

4 the Mergers, the management of TOTVS proposes that the managers be authorized to perform any and all additional acts that may be necessary to the consummation of the Mergers. The Mergers will not result in an increase of TOTVS net equity, since % of the shares of the Merged Companies are owned by TOTVS, and the latter already has the consolidated records of the Merged Companies in its consolidated financial statements. Thus, TOTVS corporate capital will not be amended and no shares will be issued. 5. Approval of the Incentive Plan It is the proposal that the Share Based Incentive and Retention Plan, in the form of the document attached hereto as Schedule III.1 Incentive Plan, be approved, which will replace the plan currently in force. The information required by article 13 of CVM Ruling No. 481/09, are attached hereto as Schedule III. 6. Ratification of the previous Plans It is the proposal that the shareholders of TOTVS state, at the General Meeting, that they ratify that the calculation methodology of the number of restricted options that the beneficiaries of the shareholders program contemplated by the plan currently in force, approved on November 29, 2012, are entitled is the same methodology applicable to determine the exercise price of the regular options (i.e. 5 actions, pursuant to section of the Incentive Plan), with no deduction considering TOTVS practices. 7. Additional Information and Where to Find Them The documents provided in the CVM Ruling No. 481, of December 17, 2009, were submitted to CVM on this date, through the Sistema de Informações Periódicas (IPE), in accordance with article 6 of such Ruling, and are available to the shareholders, at the head office of TOTVS, on its websites of relations with investors ( and on the websites of BM&FBovespa ( and CVM ( The documents may be verified and analyzed at head office of TOTVS, and the shareholders that desire to analyze them must schedule a date and time for a visit with the Relations with Investors Department. GILSOMAR MAIA SEBASTIÃO Chief Investor Relations Officer

5 SCHEDULE I INFORMATION ABOUT THE MERGERS (schedule 20-A of CVM Ruling 481/09) In compliance with the provisions of article 20-A of CVM Ruling No. 481, as of December 17, 2009, TOTVS provides the following information to the extraordinary general meeting to be held on December 15, 2015 at 10 am, in its head office: 1. Protocol and justification of the transaction, in accordance with articles 224 and 225 of Law No , of The Protocol and Justification of the Mergers of TOTVS Soluções em Agroindústria S.A. PRX and of P2RX Soluções Em Software S.A. ( P2RX and, jointly with PRX, Merged Companies by TOTVS S.A. TOTVS and the Protocol and Justification is attached hereto as Schedule I Other agreements, contracts and pre-contracts regulating the voting exercise or the transfer of shares of the remaining companies or resulting of the transaction, filed at the company's headquarters or of which the controlling shareholder of the company is a party. There are no other agreements, contracts and pre-contracts. 3. Description of the transaction, including: (a) Terms e conditions: The corporate reorganization will comprise the mergers of the Merged Companies by TOTVS, by the book value of the Merged Companies, with the subsequent cancellation of the Merged Companies and the succession by TOTVS, of all of their assets, rights and obligations Mergers. The totality of the shares representing the corporate capital of the Merged Companies, owned by TOTVS, will be cancelled, pursuant to article 226, 1, of Law No. 6,404/76. The Mergers will not result in an increase of TOTVS net equity, since % of the shares of the Merged Companies are owned by TOTVS, and the latter already has the consolidated records of the Merged Companies in its consolidated financial statements. Thus, TOTVS corporate capital will not be amended and no shares will be issued. In order to keep the market and its shareholders informed, TOTVS will issue Notices to the Market at the consummation of the Mergers. (b) Obligations to indemnify: (i) managers of any of the involved companies; (ii) if the transaction does not consummate. There are no obligations to indemnify.

6 (c) Comparative table of the rights, advantages and restrictions of the shares of the involved companies or arising before and after the transaction. Before and after the Mergers only common shares issued by TOTVS will exist, which will maintain its current rights and advantages, as below: TOTVS: Dividend rights: Voting right: Description of restrict vote: Convertibility: Condition of convertibility and effect on corporate capital: Right to capital reimbursement: Description of capital reimbursement characteristics: Circulation restriction: Description of the restriction: Conditions to amend the rights assured by such securities: Other characteristics: In each fiscal year, the shares grant to its owners the right to mandatory dividends equivalent to 25% of the annual adjusted net income, as set forth in Article 202 of the Brazilian Corporation Law. Furthermore, the Bylaws and the Brazilian Corporation Law provides that the owners of common shares shall have the right to receive dividends or other distributions related to common shares in proportion to its equity interest in the corporate capital. Full Not applicable No Not applicable Yes Characteristics described in item of the reference form No Not applicable Characteristics described in item of the Reference Form TOTVS has not identified other relevant characteristics of its shares other than those already described herein. The shares issued by the Merged Companies will be cancelled with the Mergers. (d) Approval by bondholders or other creditors. None. (e) Assets and liabilities that will form each portion of equity, in case of spin-off. Not applicable. (f) Intention of the resulting companies to obtain the registration as securities issuer. Not applicable.

7 4. Plans for the conduct of its business, considering the corporate events intended. TOTVS will, after the Mergers, continue to be dedicated to the development and implementation of management and productivity platforms specialized in the several operation segments of the company, keeping its enrollment as a publicly-held company. 5. Analysis of the following aspects of the transaction: (a) Description of the main benefits, including: (i) Synergies, (ii) Tax benefits, and (iii) Strategic advantages. It is the intention, with the Mergers, the combination of the activities and administration, resulting in benefits to Companies operations and businesses, from an administrative, economic and financial standpoint, including: (i) cost effective and simplification of the corporate structure and, thus, consolidation and decrease of combined operational costs and expenses; and (ii) improved management of the operations, assets and cash flows of the Companies, due to the merger of the corporate resources and assets related to the operations of the Companies. (b) Costs. The Companies management estimates that the costs for the Mergers will be in the range of approximately R$ 15,800.00, including expenses with publications, auditors, appraisers, lawyers and other professionals hired to advise the transaction. (c) Mergers Risks. It is the intention, with the Mergers, the combination of the activities of the Companies and to take advantage of synergies with this integration. The integration process can result in operational, commercial, financial, contractual and technological difficulties, which can unable taking advantage of expected synergies, or result in unforeseen losses or expenses. The management of the Companies may, therefore, not be able to successfully implement the desired integration, or to obtain expected returns on investments relating to these Mergers, which may affect them adversely. (d) In the case of transaction with a related party, any alternatives that could have been used to achieve the same objectives, indicating the reasons why those options were rejected. Not applicable; considering that the Merged Companies are fully owned by TOTVS, no shares will be issued in exchange for the shares of the Merged Companies, which will be cancelled in view of the Mergers, pursuant to article 226, 1, of Law No. 6,404/76. (e) Exchange Ratios. Not applicable; the shares of the Merged Companies will be cancelled in view of the Mergers, pursuant to article 226, 1, of Law No. 6,404/76.

8 (f) control: Transactions involving controlling companies, subsidiaries or companies under common (i) Exchange ratio calculated in accordance with article 264 of Law No. 6,404/76. Not applicable; considering that the Merged Companies are fully owned by TOTVS, no shares will be issued in exchange for the shares of the Merged Companies, which will be cancelled in view of the Mergers. (ii) Detailed description of negotiation process for the exchange ratio and other terms and conditions of the transaction. Not applicable. (iii) If the transaction was preceded, in the last twelve (12) months, of a takeover or interest acquisition in a controlling group: (a) Comparative analysis of the exchange ratio and the price paid in the acquisition of control; and (b) Reasons for any differences in assessment in different transactions. Not applicable. (iv) Justification of why the exchange ratio is commutative, describing the procedures and criteria adopted to ensure the transaction is commutative, or if the exchange ratio is not commutative, detail the payment or equivalent measures taken to ensure adequate compensation. Not applicable. 6. Copy of the minutes of all meetings of the board of directors, fiscal council and special committees in which the transaction was discussed, including any dissenting votes. The minutes of the meeting of the board of directors of TOTVS approving the Protocol and Justification is attached hereto as Schedule I Copy of the studies, presentations, reports, opinions or appraisal reports of the companies involved in the transaction that were disclosed to the controlling shareholder at any step of the transaction. The Appraisal Reports are attached hereto as Schedule I Identify the potential conflicts of interest among the financial institutions, companies and professionals that have prepared the documents mentioned in item 7 and the companies involved in the transaction. None. 8. Draft of bylaws or statutory changes of the companies resulting from the transaction. None; TOTVS bylaws will not be amended in view of the Mergers.

9 9. Financial statements used for purposes of the transaction, in accordance with the specific rule. The unaudited financial statements of September 30, 2015 of the Merged Companies are attached hereto as Schedule I Pro forma financial statements prepared for purposes of the transaction, in accordance with the specific rule. Not applicable; since TOTVS is a publicly-held company enrolled with CVM in category and, the Mergers will occur without an increase of TOTVS corporate capital i.e. without dilution of the current shareholders. 11. Document containing the information about the companies directly involved that are not publicly-held. (a) Risk Factors. The description of the risk factors of the Merged Companies is informed in the item 4.1 of the reference form of TOTVS. (b) Description of the main changes in the risk factors that occurred in the prior exercise and the expectations related to the decrease or increase of the exposure to risks as a result of the transaction. After the Mergers the Merged Companies will be cancelled. (c) Description of their activities. (i) companies. Briefly describe the activities developed by the issuer and their controlling PRX is dedicated to the commercial exploitation of computer software; and to the render of services related to the implementation, technical assistance, support and training in the areas of information technology and agro-industrial procedures. P2RX is dedicated to the development and licensing of custom made computer software; toll manufacturing of computer software; and to the consulting on information technology. (ii) Regarding each operational segment that has been disclosure in the latest financial statements of the end of the corporate year or, if applicable, in the consolidated financial statements, indicate the following information: (a) products and services commercialized. PRX and P2RX are companies that supply management systems that meet the requirements of the agribusiness, managing from the plantation of raw material to its processing within the industry.

10 (b) revenue originated by the segment and its participation in the net revenue of the issuer. PRX Net revenue of R$ 16,000, in 2014, representing 1% of the net revenue of the issuer. P2RX Net revenue of R$ 4,516, in 2014, representing 0.25% of the net revenue of the issuer. (c) profit or loss resulting from the segment and its participation in the net profit of the issuer. PRX Net profit of R$ 348, in 2014, representing 0.13% of the net profit of the issuer. P2RX Net profit of R$ 366, in 2014, representing 0.14% of the net profit of the issuer. (iii) Regarding the products and services related to the operational segments informed in item (ii), describe: (a) features of the manufacturing process. The Merged Companies develop software solutions from the integration of a set of functionalities, components and applications, which assist in the management of companies from the agro industrial area in the following segments: (b) Processing: Software solutions of management of companies within the field of processing of cotton, seeds and origination. Crops production: Set of multi crops tools that meet different cultures of the sector, from the planning to the delivery in the receiving unit. Sugarcane: Software solutions of agro industrial management that allows the mastery over the agriculture, industrial production process and the automotive maintenance. features of the distribution process. The features of the distribution process of the Merged Companies are detailed in item 7.2 of the reference form of TOTVS. (c) features of the operation markets, especially (i) market share in each market; and (ii) competition conditions in the markets. The features of the operation markets of the Merged Companies are detailed in item 7.3 of the reference form of TOTVS.

11 (d) potential seasonality. The technology information industry, including of software, does not have a high seasonality, however, in general terms, it historically has a greater volume of sales in the second semester of the year. (e) main inputs and raw materials, informing: (i) description of the relations kept with suppliers, including if they are subject to the control or governmental regulation, with the indication of the agencies and the related applicable law; (ii) potential dependence of few suppliers; and (iii) potential volatility of their prices. The development activity is concentrated in their own team of professionals and on the dependence of few suppliers. Historically, the prices of the software and services of PRX and P2RX did not have a material volatility. (iv) Identify the existence of clients that are responsible for more than 10% of the total net revenue of the issuer, informing: (a) global amount of the revenues originated by the client; and (b) operational segments affected by the revenues originated by the client. There are no clients that, individually, represent more than 10% of the total net revenue of the issuer.

12 (a) Description of the economic group. Items 15.1 e 15.2 of the reference form. PRX SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % TOTVS S.A / ,400,000 Brazilian-SP % No 0 Yes % Jul 30, ,400, % SHARES HELD IN TREASURY % % % TOTAL -- 2,400, % % -- 2,400, % P2RX SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % TOTVS S.A / ,000 Brazilian-SP % No 0 Yes % Apr 23, , % SHARES HELD IN TREASURY % % % TOTAL , % % , %

13 CONTROLLING / INVESTOR - TOTVS. S.A. CNPJ / SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % HG SENTA PUA FIA / ,500 Brazilian-SP % No 0 No % Jan 30, , % Fundação Petrobras de Seguridade Social Petros / ,042,359 Brazilian-DF % No 0 No % Dec 16, ,042, % Genesis Asset Managers, LLP 8,436,429 England % No 0 No % Mar 18, ,436, % Ernesto Mário Haberkorn ,810 Brazilian-SP % No 0 No % Oct 26, , % LC EH Participações e Empreendimentos S/A /0001- Nov 08, 26,760,990 Brazilian-SP % No 0 No % ,760, % Laércio José de Lucena Cosentino ,910,618 Brazilian-SP % No 0 No % Mar 27, ,910, % Harris Associates, LP 8,223, % No 0 No % Sep 10, ,223, % Others ,942, % No 0 No % ,942, % SHARES HELD IN TREASURY -- 2,260, % Nov 10, 2,260, % % 2015 TOTAL ,637, % % ,637, %

14 CONTROLLING / INVESTOR - HG SENTA PUA FIA (CNPJ / ) SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of sharehold ers agreemen t Amount of preferred shares Controlling Shareholde r Preferred Shares % Last amendme nt Amount of Shares Total of Shares % Ernesto Mário Haberkorn Jan 30, Brazilian-SP % No 0 Não % ,063, % Laércio José de Lucena Cosentino Nov 08, Brazilian-SP % No 0 Não % ,311, % Marcelo Eduardo Sant'anna Cosentino Jan 30, Brazilian-SP % No 0 Não % , % Others % No 0 Não % % TOTAL % % -- 4,379, %

15 CONTROLLING / INVESTOR - LC EH Participações e Empreendimentos S/A (CNPJ / ) SHAREHOLDERS Amount of CPF/CNPJ common shares Ernesto Mário Haberkorn Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % ,019 Brazilian-SP % No 92,351 No % Nov 01, , % Laércio José de Lucena Cosentino ,745 Brazilian-SP % No 0 No % Nov 01, , % Others ,000000% No 0 No 0,000000% ,000000% TOTAL , ,000000% -- 92, ,000000% , ,000000%

16 Item 15.3 of the reference form. PRX Date of the last meeting / Date of the last amendment Amount of shareholders that are individuals (Units) Amount of shareholders that are legal entities (Units) Amount of institutional investors (Units) Jul 30, Shares on the Free Float P2RX None. Date of the last meeting / Date of the last amendment Amount of shareholders that are individuals (Units) Amount of shareholders that are legal entities (Units) Amount of institutional investors (Units) Apr 23, Shares on the Free Float None. Item 15.4 of the reference form. The management understands that the information provided in items 15.1 and 15.2 are sufficient and, thus, it is not necessary to include the corporate chart. Item 15.5 of the reference form. None. Item 15.6 of the reference form. Not applicable. Item 15.7 of the reference form. None.

17 (b) Description of the corporate capital. PRX The corporate capital is of R$2,400,000.00, fully subscribed and paid in, represented by 2,400,000 common shares, registered and without par value, fully held by TOTVS. P2RX The corporate capital is of R$200,000.00, fully subscribed and paid in, represented by 200,000 common shares, registered and without par value, fully held by TOTVS.

18 12. Description of the capital and control structure after the transaction, in accordance with item 15 of the reference form. Items 15.1 and 15.2 of the reference form. TOTVS SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % HG SENTA PUA FIA / ,500 Brazilian-SP % No 0 No % Jan 30, , % Fundação Petrobras de Seguridade Social Petros / ,042,359 Brazilian-DF % No 0 No % Dec 16, ,042, % Genesis Asset Managers, LLP 8,436,429 England % No 0 No % Mar 18, ,436, % Ernesto Mário Haberkorn ,810 Brazilian-SP % No 0 No % Oct 26, , % LC EH Participações e Empreendimentos S/A /0001- Nov 08, 26,760,990 Brazilian-SP % No 0 No % ,760, % Laércio José de Lucena Cosentino ,910,618 Brazilian-SP % No 0 No % Mar 27, ,910, % Harris Associates, LP 8,223, % No 0 No % Sep 10, ,223, % Others ,942, % No 0 No % ,942, % SHARES HELD IN TREASURY -- 2,260, % Nov 10, 2,260, % % 2015 TOTAL ,637, % % ,637, %

19 CONTROLLING / INVESTOR - HG SENTA PUA FIA (CNPJ / ) SHAREHOLDER CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of sharehold ers agreemen t Amount of preferred shares Controlling Shareholde r Preferred Shares % Last amendme nt Amount of Shares Total of Shares % Ernesto Mário Haberkorn Jan 30, Brazilian-SP % No 0 Não % ,063, % Laércio José de Lucena Cosentino Nov 08, Brazilian-SP % No 0 Não % ,311, % Marcelo Eduardo Sant'anna Cosentino Jan 30, Brazilian-SP % No 0 Não % , % Others % No 0 Não % % TOTAL % % -- 4,379, % CONTROLLING / INVESTOR - LC EH Participações e Empreendimentos S/A (CNPJ / ) SHAREHOLDERS Amount of CPF/CNPJ common shares Ernesto Mário Haberkorn Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % ,019 Brazilian-SP % No 92,351 No % Last amendment Nov 01, 2012 Amount of Shares Total of Shares % 201, %

20 CONTROLLING / INVESTOR - LC EH Participações e Empreendimentos S/A (CNPJ / ) SHAREHOLDERS CPF/CNPJ Amount of common shares Nationality - State Common Shares % Member of shareholders agreement Amount of preferred shares Controlling Shareholder Preferred Shares % Last amendment Amount of Shares Total of Shares % Laércio José de Lucena Cosentino ,745 Brazilian-SP % No 0 No % Nov 01, , % Others ,000000% No 0 No 0,000000% ,000000% TOTAL , ,000000% -- 92, ,000000% , ,000000%

21 Item 15.3 of the reference form. TOTVS Date of the last meeting / Date of the last amendment Amount of shareholders that are individuals (Units) Amount of shareholders that are legal entities (Units) Amount of institutional investors (Units) Sep 03, , Shares on the Free Float Shares in the free float corresponding to all the shares of the issuer, except for those owned by the controlling shareholder, person related to the controlling shareholder, managers of the issuer and of the shares held in treasury Amount of common shares (Units) 134,510, % Amount of preferred shares (Units) 0 0% Total 134,510, % Item 15.4 of the reference form. The management understands that the information provided in items 15.1 and 15.2 are sufficient and, thus, it is not necessary to include the corporate chart. Item 15.5 of the reference form. None. Item 15.6 of the reference form. Not applicable. Item 15.7 of the reference form. None. 13. Number, class, nature and type of the securities of each TOTVS involved in the transaction held by any other companies involved in the transaction, or by persons related to such companies, as defined by the rules regarding public offers for the acquisition of shares. TOTVS holds on this date (i) 2,400,000 common shares, registered and with no par value, of PRX, representing 100% of its corporate capital; and (ii) 200,000 common shares, registered and with no par value, of PRX, representing 100% of its corporate capital.

22 14. Exposure of any of the companies involved in the transaction, or of persons related to such companies, as defined by the rules regarding public offers for the acquisition of shares, to derivatives referable in securities issued by the other companies involved in the transaction. Not applicable. 15. Report comprising all transactions occurred in the last 6 months by the companies below with securities issued by the companies involved in the transaction: (a) Companies involved in the transaction: (a)(i) and (ii) Private purchase and sale transactions None. (a)(iii) Purchase transactions in regulated markets None. (b) Related parties to the companies involved in the transaction: (i) Private purchase transactions: MANAGERS RELATED PARTIES (1) average price: N/A (2) amount of shares involved: N/A (3) security involved: N/A (4) percentage related to the N/A class and nature of the security: (5) other relevant conditions: N/A (ii) Private sales transactions: None. (iii) Purchase transactions in regulated markets: None. (iv) Sale Transaction in regulated markets: MANAGERS AND RELATED PARTIES (1) average price: N/A (2) amount of shares involved: N/A (3) security involved: N/A (4) percentage related to the N/A class and nature of the security: (5) other relevant conditions: N/A 7

23 16. Document on which the Special Independent Committee submitted its advices to the Board of Directors, if the transaction was negotiated in accordance with the Guidance Opinion (Parecer de Orientação) CVM No. 35, of Not applicable. ** ** ** 8

24 SCHEDULE I.1 PROTOCOL AND JUSTIFICATION PROTOCOL AND JUSTIFICATION OF THE MERGERS OF PRX AND P2RX BY TOTVS The management of the companies identified below: (a) (b) (c) TOTVS S.A., a publicly-held company with head office in the city of São Paulo, State of São Paulo, at Avenida Braz Leme, 1.631, 2 nd floor, Zip Code (CEP) , enrolled with the CNPJ/MF under No /0001-, TOTVS, TOTVS SOLUÇÕES EM AGROINDÚSTRIA S.A., closely-held company with head office in the city of Assis, State of São Paulo, at Rua Prudente de Moraes, 654, suite 6, Zip Code (CEP) , enrolled with the CNPJ/MF under No /0001- PRX ; and P2RX SOLUÇÕES EM SOFTWARE S.A., closely-held company with head office in the city of Assis, State of São Paulo, at Rua Prudente de Moraes, 654, suite 10, Zip Code (CEP) , enrolled with the CNPJ/MF under No / P2RX and, jointly with PRX, Merged Companies TOTVS and the Merged Companies hereinafter also referred to, solely, as Party and, jointly, as Parties or Companies Whereas: I. Since Merged Companies are wholly-owned subsidiaries of TOTVS, the intended mergers of the Merged Companies by TOTVS Mergers are a corporate reorganization within the same economic group, not being subject to a economic concentration resulting from the consolidation of the Parties activities in a sole company and, thus, the transaction is not subject to the analysis by the competition authorities, pursuant to the applicable jurisprudence of the Brazilian Administrative Council for Economic Defense CADE; II. III. TOTVS is a publicly-held company enrolled with CVM in category A and, the Mergers will occur without an increase of TOTVS corporate capital i.e. without dilution of the current shareholders, the obligations provided in Chapter III of CVM Ruling No. / ICVM 565 are not applicable and CVM agreed with the enquiry made by TOTVS regarding the waiver of the requirement for mergers of companies, provided in article 264 of Law No. 6,404/76, since the Superintendence of Relations with Companies, in view of the current circumstances of the transaction, in accordance with CVM s Decision 559/2008, item I, resolved that CVM s requirement related to the compliance of the referred article 264 of Law No. 6,404/76 would not be justifiable for the purposes of the Mergers, pursuant to CVM s Resolution OFÍCIO/CVM/SEP/GEA-2/ No. 370/2015, dated of November 12, 2015, which is attached to this Protocol and Justification as Schedule I CVM s Resolution, 9

25 due the reasons and for the purposes detailed hereinafter, agree to enter into, in accordance with articles 223 et. seq. of Law No. 6,404/76, this protocol and justification having as purpose the Mergers, which shall be submitted for the approval of their respective shareholders, at an Extraordinary General Meeting, pursuant to the following terms and conditions Protocol and Justification 1. Justification of the Mergers 1.1. It is the understanding that the Mergers are within the Companies best interests and, consequently, of their shareholders, since the combination of the activities and administration will result in benefits to Companies operations and businesses, from an administrative, economic and financial standpoint, including: (i) cost effective and simplification of the corporate structure and, thus, consolidation and decrease of combined operational costs and expenses; and (ii) better management of the operations, assets and cash flows of the Companies, due to the merger of the corporate resources and assets related to the operations of the Companies TOTVS will, after the Mergers, continue to be dedicated to the development and implementation of management and productivity platforms specialized in the several operation segments of the company, keeping its enrollment as a publicly-held company. 2. Appraisal, Absence of Net Equity Increase and of Right of Withdrawal The Parties defined as the reference date for the Mergers the 30 th day of September, 2015 Reference Date The management of TOTVS has hired APSIS Consultoria Empresarial Ltda. (CNPJ under No /0001- Specialized Firm to prepare the valuation and determine, respectively, (a) the book value of PRX s net equity to be transferred to TOTVS due to the merger of PRX, whose result is the purpose of the appraisal report attached hereto as Schedule 2.2(a) Appraisal Report of PRX, which has been prepared based on PRX s unaudited balance sheet drawn up on the Reference Date; and (b) the book value of P RX s net equity to be transferred to TOTVS due to the merger of P2RX, whose result is the purpose of the appraisal report attached hereto as Schedule 2.2(b) Appraisal Report of P2RX and, jointly with the ppraisal Report of PRX, the Appraisal Reports, which has been prepared based on P RX s unaudited balance sheet drawn up on the Reference Date The appointment of the Specialized Firm shall be submitted to the ratification by the Shareholders Meeting of TOTVS that will analyze this Protocol and Justification, in accordance with article 227 of Law No. 6,404/ The Specialized Firm represented that (i) there is no conflict or community of interests, current or potential, with the shareholders of the Companies, or, in addition, with regards to the Mergers; and (ii) the shareholders or management of the Companies did not direct, limit, cause difficulties or perform any acts that have or may have impaired the access, use or knowledge of the information, assets, documents or methodology of the work relevant to the quality of its conclusions. 10

26 2.3. The Mergers will not result in an increase of TOTVS net equity, since 100% of the shares of the Merged Companies are owned by TOTVS, and the latter already has the consolidated records of the Merged Companies in its consolidated financial statements. In addition, in replacement for the shares that are registered in TOTVS s consolidated financial statements, the assets of the Merged Companies, after the Mergers, will be directly registered as assets of TOTVS. Thus, as a result of the intended Mergers, in TOTVS accounting, the assets of the Merged Companies, represented in the investment account related to the equity interest in the corporate capital of the Merged Companies, will be replaced by the elements of assets and liabilities of the balance sheets of the Merged Companies, with no change in the capital account The totality of the shares representing the corporate capital of the Merged Companies, owned by TOTVS, will be cancelled, pursuant to article 226, 1, of Law No. 6,404/ In view of the provision of item 2.3 above, TOTVS corporate capital will not be amended and no shares will be issued TOTVS corporate purpose will also remain the same, considering that the companies have similar corporate purposes, and the Merged Companies do not develop any activity different from those listed in TOTVS corporate purpose In view of the above, there will be no need to amend TOTVS bylaws The equity variations ascertained in the Merged Companies between the Reference Date and the date in which the Mergers are consummated will be fully absorbed by TOTVS Potential goodwill registered in the investments of the Merged Companies to be transferred to TOTVS due to the Mergers will have the same treatment to the one currently granted by the Merged Companies and, will, after the Mergers, be used by TOTVS for tax purposes, in accordance with the applicable law and without the issuance of new shares Moreover, considering that TOTVS is the sole shareholder of the Merged Companies, there will be no dissident shareholder or right of withdrawal in view of the Mergers, pursuant to article 137 of Law No. 6,404/ In accordance with CVM s Resolution, the appraisal provided in article of Law No. 6,404/76 shall be dismissed, since it would only result in costs to TOTVS, with no practical use, based on (i) non-existence of minority shareholders in the Merged Companies on the date of the Mergers, which could exercise their right of withdrawal, in accordance with item 2.6; and (ii) absence of an increase of TOTVS corporate capital, and the absence of an exchange of shares. 11

27 3. Corporate Approvals 3.1. The consummation of the Mergers shall be subject to the performance of the following acts, all interdependent: (a) (b) (c) extraordinary general meeting of PRX to, in this order, (i) approve this Protocol and Justification; (ii) approve the merger of PRX by TOTVS; and (iii) authorize the performance, by its management, of the acts necessary to the merger; extraordinary general meeting of P2RX to, in this order, (i) approve this Protocol and Justification; (ii) approve the merger of P2RX by TOTVS; and (iii) authorize the performance, by its management, of the acts necessary to the merger; and extraordinary general meeting of TOTVS to, in this order, (i) approve this Protocol and Justification; (ii) ratify the appointment of the Specialized Firm; (iii) approve the Appraisal Reports; (iv) approve the Mergers, with the consequent cancellation of the Merged Companies; and (v) approve the performance, by its management, of all acts necessary to the Mergers. 4. Miscellaneous 4.1. The consummation of the Mergers shall result in the cancellation of the Merged Companies, which shall be succeeded by TOTVS in all of their rights, assets, obligations and liabilities, pursuant to the applicable provisions of Law No. 6,404/ All real properties that comprise the equity of the Merged Companies, which description and identification is detailed in the Appraisal Reports, as well as the assets, inventories and equipment, within the premises of the Merged Companies or registered in their name, shall become owned by TOTVS in view of the Mergers The management of TOTVS shall be responsible to perform all necessary acts to implement the Mergers, including to carry out the filing and publication of all acts related to the Mergers, pursuant to article 227, 3, of Law No. 6,404/76, and conduct the cancelation of the Merged Companies registrations before the federal, state and municipal agencies, as well as the maintenance of the accounting books during the legal term 4.4. It is hereby expressly elected the courts of the city of São Paulo, State of São Paulo, to settle all matters arising out of this Protocol and Justification, with the waiver of any other, regardless of being more privileged All documents mentioned herein will be available to the shareholders of TOTVS at its head offices as of this date, on the website of Relations with Investors of TOTVS ( as well as on the websites of CVM and BM&FBOVESPA Bolsa de Valores, Mercadorias e Futuros This Protocol and Justification shall only be amended through a written instrument signed by the Parties. 12

28 IN WITNESS WHEREOF, the parties execute this Protocol and Justification in 3 originals of identical content and form, with same effect, in the presence of the two witnesses identified below. São Paulo, November 17, Management of TOTVS S.A. Alexandre Mafra Guimarães Gilsomar Maia Sebastião Management of PRX Fábio Girardi Officer Sergio Asato Officer Management of P2RX Fábio Girardi Officer Sergio Asato Officer Witnesses: 1. Name: RG: CPF: 2. Name: RG: CPF: 13

29 SCHEDULE I CVM S RESOLUTION Ofício nº 370/2015/CVM/SEP/GEA-2 Rio de Janeiro, November 12, To Mr. GILSOMAR MAIA SEBASTIÃO Chief Investor Relations Officer of TOTVS S.A. Avenida Braz Leme, Casa Verde São Paulo SP Tel.: (11) Fax: (11) gmaia@totvs.com.br Regarding: Waiver request of the regulatory requirements for a corporate transaction Proceeding CVM-RJ Dear Officer, 1. Reference is made to the enquiry of October 7, 2015, filed on October 10, 2015 by TOTVS S.A. regarding the waiver of: (i) the publication in the press of the Material Fact pursuant to article 2 of CVM Ruling No. 319/99; (ii) preparation of audit financial statements in accordance with article 12 of CVM Ruling 319/99; and (iii) preparation of the comparative appraisal reports provided in article 264 of Law No. 6,404/76, in view of the Company s interest to merge 100% of the equity of P2RX Soluções em Software S.A. and 100% of the equity of TOTVS Soluções em Agroindústria S.A. 2. In this regard, considering only the information provided in the enquiry and in view of the characteristics analyzed in accordance with the present case, pursuant to item I, letter b of CVM Resolution 559/08, this Superintendence expresses its understanding that, in principle, a decision by CVM to require the preparation of the appraisal reports provided in article 264 of Law No. 6,404/76 would not be reasonable. 3. Regarding the publication on the press of a Material Fact pursuant to article 2 of CVM Ruling No. 319/99, it must be registered that the transaction must be disclosed in accordance with the rules in force, which includes, currently, Law No. 6,404/76 and CVM Ruling No. 358/02, and we highlight the fact that CVM Ruling No. 565/15 only provides for the minimum information of the document regarding the disclosure, if such disclosure is necessary. 14

30 4. Thus, the Company s administration must evaluate the convenience and opportunity of the disclosure of such material fact. 5. In addition, regarding the preparation of the audit financial statements by independent auditors, accordance with article 6 of CVM Ruling 565/15, article 10 of such Ruling expressly provides that the obligations related to the disclosure of such financial statements are not applicable to merger or merger of shares of closely-held companies by a securities issuer registered in category A, provided that the transaction does not represent a dilution greater than 5%. 6. Finally, we highlight that the conformity of the merger is not being analyzed at this time. Sincerely, GUILHERME ROCHA LOPES Manager of Relations with Companies 2 FERNANDO SOARES VIEIRA Superintendent of Relations with Companies 15

31 SCHEDULE 2.2(A) APPRAISAL REPORT OF PRX 16

32 Appraisal Report AP-0743/ TOTVS SOLUÇÕES EM AGROINDÚSTRIA S.A.

33 REPORT : AP-0743/ REFERENCE DAT E: Sept ember 30 t h, 2015 APPLICANT : TOTVS S.A., hereinaft er called TOTVS. Limit ed liabilit y company, wit h head office locat ed at Av. Braz Leme, nº 1.631, Jardim São Bento, in t he Cit y and St at e of São Paulo, registered wit h t he Brazilian Taxpayers Regist ry (CNPJ) under No / OBJECT : TOTVS SOLUÇÕES EM AGROINDÚSTRIA S.A., hereinaft er called PRX. Closed company, wit h head office locat ed at Rua Prudent e de Moraes, nº 654, Room 06, Cent ro, in t he Cit y of Assis, St at e of São Paulo, registered wit h t he Brazilian Taxpayers Regist ry (CNPJ) under No / PURPOSE: Calculation of t he Net Equit y of PRX, at book value, for t he purposes of t he merger of PRX wit h and into TOTVS, pursuant t o sect ions 226 and 227 of Law No. 6,404/ 76 ( Brazilian Corporation Law ). Report AP-0743/

34 T ABLE OF CONT ENT S 1. INTRODUCTION PRINCIPLES AND QUALIFICATIONS LIABILITY LIMITATIONS APPRAISAL METHODOLOGY APPRAISAL OF NET EQUITY OF PRX CONCLUSION LIST OF EXHIBITS Report AP-0743/

35 1. INT RODUCT ION APSIS CONSULTORIA E AVALIAÇÕES LTDA., hereinaft er called APSIS, wit h it s head office located at Rua da Assembleia, 35, 12 nd floor, in t he Cit y and St at e of Rio de Janeiro, regist ered wit h t he Brazilian Taxpayers Regist ry (CNPJ) under No / , was ret ained t o det ermine Net Equit y of PRX, at book value, for t he purpose of it s merging wit h and int o TOTVS, pursuant t o sect ions 226 and 227 of Brazilian Corporat ion Law. In order t o prepare t his report, we have used data and informat ion provided by t hird part ies, i.e., document s and verbal int erviews wit h TOTVS. Est imat es used in t his process are based on t he following document s and informat ion, among ot hers: Balance sheet of PRX, as of Sept ember 30 t h, 2015; APSIS has recent ly prepared appraisal reports for publicly-held companies, for several purposes: AMÉRICA LATINA LOGÍSTICA DO BRASIL S/ A BANCO PACTUAL S/ A CIMENTO MAUÁ S/ A ESTA - EMPRESA SANEADORA TERRITORIAL AGRÍCOLA S/ A ESTÁCIO PARTICIPAÇÕES S/ A GERDAU S/ A HOTÉIS OTHON S/ A L.R. CIA. BRAS. PRODS. HIGIENE E TOUCADOR S/ A LIGHT SERVIÇOS DE ELETRICIDADE S/ A LOJAS AMERICANAS S/ A MPX ENERGIA S/ A PETRÓLEO BRASILEIRO S/ A PETROBRAS REPSOL YPF BRASIL S/ A TAM TRANSPORTES AÉREOS MERIDIONAL S/ A ULTRAPAR PARTICIPAÇÕES S/ A The t eam responsible for preparing such report comprises t he following professionals: AMILCAR DE CASTRO Direct or Bachelor in Law ANA CRISTINA FRANÇA DE SOUZA Vice-President Civil Engineer (CREA/ RJ ) ANTONIO LUIZ FEIJÓ NICOLAU Direct or Lawyer (OAB/ RJ ) EDUARDO DE CASTRO ROSSI Direct or Elect rical Engineer (CREA/ SP ) GIANCARLO FALKENSTEIN Supervisor Administ rat or (CRA/ SP ) LUIZ PAULO CESAR SILVEIRA Vice-President Mechanical Engineer and Account ant (CREA/ RJ and CRC/ RJ / P-0) MARCIA APARECIDA DE LUCCA CALMON Direct or Account ant (CRC/ SP / O-4) MÁRCIA MOREIRA FRAZÃO DA SILVA Direct or Account ant (CRC/ RJ / O-3) RENATA POZZATO CARNEIRO MONTEIRO President Post graduat e in Law (OAB/ RJ ) SERGIO FREITAS DE SOUZA Vice-President Economist (CORECON/ RJ ) Report AP-0743/

36 2. PRINCIPLES AND QUALIFICAT IONS The following information is important and must be read carefully. The Report complies wit h t he fundament al principles described below: The consult ant s do not have any direct or indirect int erest s in t he companies involved, in t heir respective cont rolling shareholders or in t he t ransact ion, nor are t here any ot her relevant circumst ances which may charact erize a conflict of int erest s, act ual or potent ial, wit h t he companies involved, t heir respect ive cont rolling shareholders, or regarding t he minorit y shareholders, or t he t ransact ion it self. APSIS professional fees are not in any way what soever subj ect t o t he conclusions of t his Report. To t he best of t he consult ant s knowledge and credit, t he analyses, opinions, and conclusions expressed in t his report are based on data, diligence, research and surveys t hat are t rue and correct. For purposes of t his report, it was assumed t hat t he informat ion received from t hird part ies is correct ; t he sources of such informat ion are st at ed in this Report. This report presents all t he limiting condit ions, if applicable, imposed by t he adopt ed met hodologies, which may affect t he analyses, opinions and conclusions comprised herein. This report was prepared by APSIS and no one ot her t han t he consult ant s t hemselves prepared t he analyses and respective conclusions. APSIS assumes full liabilit y on t he appraised mat t er, including implicit appraisals, for t he exercise of it s honorable dut ies, primarily est ablished in t he appropriat e laws, codes or regulat ions. This Report complies wit h t he specificat ions and criteria est ablished by t he USPAP (Uniform St andards of Professional Appraisal Pract ice) and t he Int ernat ional Valuat ion Standards Council (IVSC), in addit ion t o t he requirement s imposed by various agencies and regulations, such as t he Brazilian Account ing Pract ice Commit t ee (CPC), t he Minist ry of Treasury, Brazilian Cent ral Bank, Banco do Brasil, CVM (Brazilian Securities Commission), SUSEP (Brazilian Insurance Commission), Income Tax Regulat ions (RIR), Brazilian Commit t ee of Business Appraisers (CBAN) et c. The controlling shareholders and managers of t he companies involved did not direct, rest rict, hinder or engage in any act s which have or may have compromised access t o, use, or knowledge of informat ion, asset s, document s, or work met hods applicable t o t he qualit y of t he respective conclusions cont ained herein. Report AP-0743/