Sao Carlos Empreendimentos e Part : Material Fact - Share Buyback Program

SÃO CARLOS EMPREENDIMENTOS E PARTICIPAÇÕES S.A.

CORPORATE TAXPAYER'S ID (CNPJ/MF): 29.780.061/0001-09

Publicly Held Company

MATERIAL FACT SHARE BUYBACK PROGRAM

São Carlos Empreendimentos e Participações S.A. ("São Carlos" or "Company"), hereby announces to its shareholders and the financial market that the Board of Directors decided the following:

1. The termination of the share buyback program started on May 5th, 2016, to acquire up to 800,000 (eight hundred thousand) common shares;

2. New share buyback program limited to 1,000,000 (one million) shares issued by the Company, to be held in treasury and for possible future cancellation, without reduction in the Company's capital stock. The program will begin on May 5, 2017 with a 365-day term, ending on May 4, 2018.

The program's authorized brokerage firms are Geração Futuro Corretora de Valores S.A., Bradesco S.A. Corretora de Títulos e Valores Mobiliários, Itaú Corretora de Valores S.A., Santander Corretora de Câmbio e Valores Mobiliários S.A., BTG Pactual Corretora de Títulos e Valores Mobiliários S.A., Citigroup GMB Corretora de Câmbio Títulos, J.P. Morgan Corretora de Câmbio e Valores Mobiliários S.A. (CCVM) e Valores Mobiliários and XP Investimentos Corretora de Câmbio Títulos e Valores Mobiliários S.A.

This program was approved by the Company's Board of Directors on a meeting held as of this date, pursuant to Article 20 of the Bylaws and in compliance with article 30 of Law 6404/76 and CVM Instruction 10/80 and subsequent amendments thereto.

São Paulo, May 4, 2017

São Carlos Empreendimentos e Participações S.A. Fabio Itikawa Chief Financial and Investor Relations Officer