COMPANHIA DE SANEAMENTO BÁSICO DO ESTADO DE SÃO PAULO – SABESP

Corporate Taxpayer ID (CNPJ): 43.776.517/0001-80

Company Registry (NIRE): 35.3000.1683-1

SUMMARY OF THE MINUTES OF THE SEVEN HUNDRED AND TWENTY-EIGHTH BOARD OF DIRECTORS’ MEETING

At 9:00 a.m. on October 28, 2010, the Chairwoman of the Board of Directors called a meeting on an ordinary basis, in accordance with the head provisions of Article 13 of the Company’s Bylaws, in the conference room of the Company’s head offices located at Rua Costa Carvalho, 300, in the city of São Paulo, which was attended by the undersigned members of the Board of Directors of Companhia de Saneamento Básico do Estado de São Paulo - SABESP. Installing the meeting, Mrs. Dilma Seli Pena greeted everyone present and justified the absence of Board members, Alexander Bialer and Mário Engler Pinto Júnior. (...) Continuing the proceedings, the Chairwoman placed item 8 of the agenda, “Approval of the terms and conditions of the Eurobonds issue”   turning the floor over to the Chief Financial Officer and Investor Relations Officer, Rui de Britto Álvares Affonso, and the Head of Capital Markets and Investor Relations, Mario Azevedo de Arruda Sampaio, to jointly present the item, based on the Proposal to the Board of Directors of October 22, 2010, Executive Board Resolution 0466/2010 of October 21, 2010, Internal Circular 057/2010 of October 19, 2010, and the presentation distributed to the Board members and duly filed along with the meeting-related documentation. With the item put up for discussion, Board member Manuelito Pereira Magalhães Junior questioned about the possibility of using the Eurobond funds to pay previous loans, to which Mr. Mario Sampaio replied that the debenture issue gives the flexibility of using the funds according to the company’s working capital needs or may be redeemed before maturity. The item was then put to vote pursuant to Clause XIII of Article 14 of the Company’s Bylaws and the following terms and conditions for the issue of Eurobonds in the international securities market were approved unanimously:

1.     Amount: Up to US$ 350,000,000.00

2.     Currency: U.S. dollar

3.     Borrower: Companhia de Saneamento Básico do Estado de São Paulo – SABESP.

4.     Lead Managers: Banco Itaú Europa S.A. and Santander Investment Securities Inc.

5.     Purpose: Refinancing of maturing loans

6.     Regulations: Rule 144A and Rule S, without registration with the U.S. Securities and Exchange Commission (SEC).

7.     Term: 10 years, including “high yield call” option starting from the 5^th year, with the following premiums: in the 6^th year: 1/2 of coupon, 7^th year: 1/3 of coupon, 8^th year: 1/6 of coupon, 9^th and 10^th years: payment at par.

8.     Coupon: up to 6.750% p.a.; the final interest on the Eurobonds will be fixed based on the market conditions at the time of pricing the Issue.

9.     Yield: Up to 6.875% p.a.

10. Commission: 0.09% on the face value of the Eurobonds, to be paid upon the closing of the deal.

11. Collateral: Clean.

12. Expenses: Sabesp will bear all direct expenses of up to US$ 800,000.00 and reimbursable expenses up to US$ 690,350.00.

13. Method of Payment: a) principal: single payment on maturity date and b) interest: half-yearly

14. Financial Covenants: equal to or less restrictive than those defined in SABESP Eurobonds’ 16.

The Board of Directors hereby ratifies all the acts practiced by the Executive Board relating to the Issue and authorizes the Executive Board members, pursuant to the Bylaws, to practice all the acts required for carrying out the Issue, including but not limited to:

(i) the hiring of ancillary services such as lawyers and auditors;

(ii) signing of the “Purchase Agreement” and the “Indenture” of Issue, including the terms they consider appropriate, signing and/or authorizing the issue of the “Eurobonds”, the “Preliminary Offering Memorandum” and the “Offering Memorandum”, as well as statements and any other agreements or other documents required for carrying out the Issue and placement of the Eurobonds in the international market;

(iii) taking all and any measures they consider necessary or desirable for selling the Eurobonds and their listing on the Luxembourg Stock Exchange;

(iv) naming a trustee and a payment agent for Eurobonds;

(v) naming the attorney(s)-in-fact to sign jointly with another attorney-in-fact or Executive Officer, all the above-mentioned documents; and

(vi) naming the overseas Process Agent for matters related to the Issue.

The Board of Directors also determines that any increase in the amount or rates or in other terms mentioned above should be sent back to it for deliberation. (...)

This is a free translation of the excerpt of the Minutes recorded in the Minutes Book of the Board of Directors.

São Paulo, November 11, 2010

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