AMENDMENT NO. 2 TO DEPOSIT AGREEMENT
AMENDMENT
NO. 2 TO DEPOSIT AGREEMENT
AMENDMENT
NO. 2 dated
as
of _________, 2007 (the "Amendment") to the Amended and Restated Deposit
Agreement dated as of October
18, 2002 to the Deposit Agreement dated as of December 12, 1994 as amended
as of
December 15, 1997 and June 29, 2007 (the "Deposit Agreement"), among
Centrais
Elétricas Brasileiras S.A. - Eletrobrás
(the "Company"), incorporated under the laws of the Federative Republic of
Brazil, JPMorgan Chase Bank, N.A., as depositary (the "Depositary"), and all
Holders from time to time of American Depositary Receipts ("ADRs") issued
thereunder.
WITNESSETH:
WHEREAS,
the Company and the Depositary executed the Deposit Agreement for the purposes
set forth therein; and
WHEREAS,
pursuant to paragraph (16) of the form of ADR set forth in Exhibit A of the
Deposit Agreement, the Company and the Depositary desire to amend the terms
of
the Deposit Agreement and Receipts.
NOW,
THEREFORE, for
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Depositary hereby agree to amend the Deposit
Agreement as follows:
ARTICLE
I
DEFINITIONS
SECTION
1.01. Definitions.
Unless
otherwise defined in this Amendment, all capitalized terms used, but not
otherwise defined, herein shall have the meaning given to such terms in the
Deposit Agreement.
1
ARTICLE
II
AMENDMENTS
TO DEPOSIT AGREEMENT AND FORM OF ADR
SECTION
2.01. All
references in the Deposit Agreement to the term "Deposit Agreement" shall,
as of
the Effective Date (as herein defined), refer to the Deposit Agreement, as
amended by this Amendment.
SECTION
2.02. Section
1
(c) of the Deposit Agreement is amended by replacing "five hundred Shares"
with
"one Share".
SECTION
2.03. All
references in the form of ADR to the number of Shares represented
by each ADS are amended to reflect that, as of the Effective Date, each ADS
represents one
Share.
SECTION
2.04. The
form
of ADR, as amended hereby, shall be in the form set forth
as
Exhibit A hereto.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
SECTION
3.01. Representations
and Warranties.
The
Company represents and warrants
to, and agrees with, the Depositary and the Holders, that:
(a)
This
Amendment, when executed and delivered by the Company, and the Deposit Agreement
and all other documentation executed and delivered by the Company in connection
therewith, will be and have been, respectively, duly and validly authorized,
executed and delivered by the Company, and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to bankruptcy, insolvency,
fraudulent transfer, moratorium and similar laws of general applicability
relating to or affecting creditors=
rights
and to general equity principles; and
2
(b)
In
order to ensure the legality, validity, enforceability or admissibility into
evidence of this Amendment or the Deposit Agreement as amended hereby, and
any
other document furnished hereunder or thereunder in the Federative Republic
of
Brazil, neither of such agreements need to be filed or recorded with any court
or other authority in the Federative Republic of Brazil, nor does any stamp
or
similar tax need to be paid in Bermuda on or in respect of such agreements;
and
(c)
All
of the information provided to the Depositary by the Company in connection
with
this Amendment is true, accurate and correct.
ARTICLE
IV
MISCELLANEOUS
SECTION
4.01. Effective
Date.
This
Amendment is dated as of the date set forth above and shall be effective as
of
_________, 2007 (the "Effective Date").
SECTION
4.02. Indemnification.
The
parties hereto shall be entitled to the benefits of the indemnification
provisions of Section 16 of the Deposit Agreement, as amended hereby in
connection with any and all liability it or they may incur as a result of the
terms of this Amendment and the transactions contemplated herein.
3
IN
WITNESS WHEREOF,
the
Company and the Depositary have caused this Amendment to be executed by
representatives thereunto duly authorized as of the date set forth
above.
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Centrais
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| JPMorgan Chase Bank, N.A. | ||
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4
EXHIBIT
A
EXHIBIT
A
ANNEXED
TO AND INCORPORATED IN
AMENDMENT
TO DEPOSIT AGREEMENT
[FORM
OF
FACE OF ADR]
____
No.
of
ADSs:
Number
Each
ADS
represents
One
Share
CUSIP:
AMERICAN
DEPOSITARY RECEIPT
evidencing
AMERICAN
DEPOSITARY SHARES
representing
PREFERRED
CLASS B SHARES, WITHOUT PAR VALUE
of
CENTRAIS
ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS
(Incorporated
under the
laws
of
the Federative Republic of Brazil)
JPMORGAN
CHASE BANK, N.A., a national banking association organized under the laws of
the
United States, as depositary hereunder (the "Depositary"), hereby certifies
that
is the
registered owner (a "Holder") of
American
Depositary Shares ("ADSs"), each (subject to paragraph (13)) representing one
preferred class B share, without par value (including the rights to receive
Shares described in paragraph (1), "Shares" and, together with any other
securities, cash or property from time to time held by the Depositary in respect
or in lieu of deposited Shares, the "Deposited Securities"), of CENTRAIS
ELÉTRICAS BRASILEIRAS S.A. - ELETROBRÁS, a corporation organized under the laws
of the Federative Republic of Brazil (the "Company"), deposited at the Rio
de
Janeiro office of Camara de Liquidacao e Custódia S.A., as Custodian (subject to
paragraph (15), the "Custodian"), under the Amended and Restated Deposit
Agreement dated as of October 18, 2002 (as further amended from time to time,
the "Deposit Agreement") among the Company, the Depositary and all Holders
from
time to time of American Depositary Receipts issued thereunder ("ADRs"), each
of
whom by accepting an ADR becomes a party thereto. The Deposit Agreement and
this
ADR (which includes the provisions set forth on the reverse hereof) shall be
governed by and construed in accordance with the laws of the State of New
York.
5
(1)
Issuance
of ADRs.
This
ADR is one of the ADRs issued under the Deposit Agreement. Subject to paragraph
(4), the Depositary may so issue ADRs for delivery at the Transfer Office
(defined in paragraph (3)) only against deposit with the Custodian of: (a)
Shares in form satisfactory to the Custodian; (b) rights to receive Shares
from
the Company or any registrar or transfer agent of the Company or other entity
recording Share ownership or transactions on behalf of the Company; or, (c)
unless requested in writing by the Company to cease doing so at least two
business days in advance of the proposed deposit, other rights to receive Shares
(until such Shares are actually deposited pursuant to (a) or (b) above,
"Pre-released ADRs") only if (i) Pre-released ADRs are fully collateralized
(marked to market daily) with cash or U.S. government securities held by the
Depositary for the benefit of Holders (but such collateral shall not constitute
"Deposited Securities"), (ii) each recipient of Pre-released ADRs represents
and
agrees in writing with the Depositary that such recipient or its customer (a)
beneficially owns such Shares, (b) assigns all beneficial right, title and
interest therein to the Depositary for the benefit of the Holders, (c) holds
such Shares in trust for the account of the Depositary and (d) will deliver
such
Shares to the Custodian as soon as practicable and promptly but in no event
more
than five business days after demand therefor and (iii) all Pre-released ADRs
evidence not more than 20% of all ADSs (excluding those evidenced by
Pre-released ADRs). The Depositary may retain for its own account any earnings
on collateral for Pre-released ADRs and its charges for issuance thereof. At
the
request, risk and expense of the person depositing Shares, the Depositary may
accept deposits for forwarding to the Custodian and may deliver ADRs at a place
other than its office. Every person depositing Shares under the Deposit
Agreement represents and warrants that such Shares are validly issued and
outstanding, fully paid, nonassessable and free of pre-emptive rights, that
the
person making such deposit is duly authorized so to do and that such Shares
(A)
are not "restricted securities" as such term is defined in Rule 144 under the
Securities Act of 1933 unless at the time of deposit they may be freely
transferred in accordance with Rule 144(k) and may otherwise be offered and
sold
freely in the United States or (B) have been registered under the Securities
Act
of 1933. Such representations and warranties shall survive the deposit of
Shares, issuance of ADRs, the transfer of ADRs and the withdrawal of Shares
in
respect of surrendered ADRs. The Depositary will not knowingly accept for
deposit under the Deposit Agreement any Shares required to be registered under
the Securities Act of 1933 and not so registered; the Depositary shall use
its
reasonable commercial efforts to refuse to accept for such deposit any Shares
identified by the Company in order to facilitate the Company's compliance with
such Act.
(2)
Withdrawal
of Deposited Securities.
Subject
to paragraphs (4) and (5) and to the provisions of or governing Deposited
Securities (including the Company's estatuto
or
applicable law), upon surrender of (i) a certificated ADR in form satisfactory
to the Depositary at the Transfer Office or (ii) proper instructions and
documentation in the case of a Direct Registration ADR, the Holder hereof is
entitled to delivery at the Custodian's office of the Deposited Securities
at
the time represented by the ADSs evidenced by this ADR. At the request, risk
and
expense of the Holder hereof, the Depositary may deliver such Deposited
Securities at such other place as may have been requested by the Holder.
Notwithstanding any other provision of the Deposit Agreement or this ADR, the
withdrawal of Deposited Securities may be restricted only for the reasons set
forth in General Instruction I.A.(1) of Form F-6 (as such instructions may
be
amended from time to time) under the Securities Act of 1933.
6
(3)
Transfers
of ADRs.
The
Depositary or its agent will keep, at a designated transfer office in the
Borough of Manhattan, The City of New York (the "Transfer Office"), (a) a
register (the "ADR Register") for the registration, registration of transfer,
combination and split-up of ADRs and, in the case of Direct Registration ADRs,
shall include the Direct Registration System, which at all reasonable times
will
be open for inspection by Holders and the Company for the purpose of
communicating with Holders in the interest of the business of the Company or
a
matter relating to the Deposit Agreement and (b) facilities for the delivery
and
receipt of ADRs. The term ADR Register includes the Direct Registration System.
Title to this ADR (and to the Deposited Securities represented by the ADSs
evidenced hereby), when properly endorsed (in the case of ADRs in certificated
form) or upon delivery to the Depositary of proper instruments of transfer,
or
accompanied by proper instruments of transfer, is transferable by delivery
with
the same effect as in the case of negotiable instruments under the laws of
the
State of New York; provided
that the
Depositary and the Company, notwithstanding any notice to the contrary, may
treat the person in whose name this ADR is registered on the ADR Register as
the
absolute owner hereof for all purposes. Subject to paragraphs (4) and (5),
this
ADR is transferable on the ADR Register and may be split into other ADRs or
combined with other ADRs into one ADR, evidencing the same number of ADSs
evidenced by this ADR, by the Holder hereof or by duly authorized attorney
upon
surrender of this ADR at the Transfer Office properly endorsed or accompanied
by
proper instruments of transfer and duly stamped as may be required by applicable
law; provided
that the
Depositary may close the ADR Register at any time or from time to time when
deemed expedient by it in connection with the performance of its duties
hereunder, after making reasonable efforts to consult with the Company if
practicable in the case of any closure outside of the ordinary course of
business, or as reasonably requested by the Company. At the request of a Holder,
the Depositary shall, for the purpose of substituting a certificated ADR with
a
Direct Registration ADR, or vice versa, execute and deliver a certificated
ADR
or a Direct Registration ADR, as the case may be, for any authorized number
of
ADSs requested, evidencing the same aggregate number of ADSs as those evidenced
by the certificated ADR or Direct Registration ADR, as the case may be,
substituted.
(4)
Certain
Limitations.
Prior
to the issue, registration, registration of transfer, split-up or combination
of
any ADR, the delivery of any distribution in respect thereof, or, subject to
the
last sentence of paragraph (2), the withdrawal of any Deposited Securities,
and
from time to time in the case of clause (b)(ii) of this paragraph (4), the
Company, the Depositary or the Custodian may require: (a) payment with respect
thereto of (i) any stock transfer or other tax or other governmental charge,
(ii) any stock transfer or registration fees in effect for the registration
of
transfers of Shares or other Deposited Securities upon any applicable register
and (iii) any applicable charges as provided in paragraph (7) of this ADR;
(b)
the production of proof satisfactory to it of (i) the identity and genuineness
of any signature and (ii) such other information, including, without limitation,
information as to citizenship, residence, exchange control approval, beneficial
ownership of ADRs, Deposited Securities or other securities, compliance with
applicable law, regulations, provisions of or governing Deposited Securities
and
terms of the Deposit Agreement and this ADR, as it may deem necessary or proper;
and (c) compliance with such regulations as the Depositary may establish
consistent with the Deposit Agreement and any regulations which the Depositary
is informed of in writing by the Company which are deemed desirable by the
Depositary, the Company or the Custodian to facilitate compliance with any
applicable rules or regulations of the Banco Central do Brasil (the "Central
Bank") or Comissão de Valores Mobiliários. The issuance of ADRs, the acceptance
of deposits of Shares, the registration, registration of transfer, split-up
or
combination of ADRs or, subject to the last sentence of paragraph (2), the
withdrawal of Deposited Securities may be suspended, generally or in particular
instances, when the ADR Register or any register for Deposited Securities is
closed or when any such action is deemed necessary or advisable by the
Depositary or the Company.
7
(5)
Taxes.
If any
tax or other governmental charge shall become payable by or on behalf of the
Custodian, the Depositary or the Company with respect to this ADR, any Deposited
Securities represented by the ADSs evidenced hereby or any distribution thereon,
such tax or other governmental charge shall be paid by the Holder hereof to
the
Depositary. The Depositary may refuse to effect any registration, registration
of transfer, split-up or combination hereof or, subject to the last sentence
of
paragraph (2), any withdrawal of such Deposited Securities until such payment
is
made. The Depositary may also deduct from any distributions on or in respect
of
Deposited Securities, or may sell by public or private sale for the account
of
the Holder hereof any part or all of such Deposited Securities (after attempting
by reasonable means to notify the Holder hereof prior to such sale), and may
apply such deduction or the proceeds of any such sale in payment of such tax
or
other governmental charge, the Holder hereof remaining liable for any
deficiency, and shall reduce the number of ADSs evidenced hereby to reflect
any
such sales of Shares. The Depositary will forward to the Company in a timely
fashion such information from its records as the Company may reasonably request
to enable the Company to file necessary reports with governmental authorities
or
agencies, and either the Company or the Depositary may file any such reports
necessary to obtain benefits under any applicable tax treaties for Holders.
The
Depositary shall cooperate with the Company in the Company's efforts to make
and
maintain arrangements enabling Holders to receive any tax credits or other
benefits (pursuant to treaty or otherwise) relating to dividend payments on
the
ADSs, and the Depositary shall, to the extent reasonably practicable, provide
the Company with such documents as the Company may reasonably request to
maintain such arrangements. In connection with any distribution to Holders,
the
Company will remit to the appropriate governmental authority or agency all
amounts (if any) required to be withheld and owing to such authority or agency
by the Company; and the Depositary and the Custodian will remit to the
appropriate governmental authority or agency all amounts (if any) required
to be
withheld and owing to such authority or agency by the Depositary or the
Custodian. If the Depositary determines that any distribution in property other
than cash (including Shares or rights) on Deposited Securities is subject to
any
tax that the Depositary or the Custodian is obligated to withhold, the
Depositary may, after consultation with the Company to the extent practicable,
dispose of all or a portion of such property in such amounts and in such manner
as the Depositary deems necessary and practicable to pay such taxes, by public
or private sale, and the Depositary shall distribute the net proceeds of any
such sale or the balance of any such property after deduction of such taxes
to
the Holders entitled thereto.
8
(6) Disclosure
of Interests.
To the
extent that the provisions of or governing any Deposited Securities (including
the Company's estatuto
or
applicable law) may require disclosure of or impose limits on beneficial or
other ownership of Deposited Securities, other Shares and other securities
and
may provide for blocking transfer, voting or other rights to enforce such
disclosure or limits, Holders agree to comply with all such disclosure
requirements and ownership limitations and to cooperate with the Depositary
in
the Depositary's compliance with any Company instructions in respect thereof,
and the Depositary shall use its reasonable commercial efforts to comply, to
the
extent practicable, with such Company instructions.
(7)
Charges
of Depositary.
The
Depositary may collect from (i) each person to whom ADSs are
issued, including, without limitation, issuances against deposits of
Shares, issuances in respect of Share Distributions, Rights and Other
Distributions (as such terms are defined in paragraph (10)), issuances
pursuant to a stock dividend or stock split declared by the Company, or
issuances pursuant to a merger, exchange of securities or any other
transaction or event affecting the ADSs or the Deposited Securities,
and (ii) each person surrendering ADSs for withdrawal of Deposited
Securities or whose ADSs are cancelled or reduced for any other reason,
U.S.$5.00 for each 100 ADSs (or portion thereof) issued, delivered, reduced,
cancelled or surrendered (as the case may be). The Depositary may sell (by
public or private sale) sufficient securities and property received in respect
of Share Distributions, Rights and Other Distributions prior to such deposit
to
pay such charge. The following additional charges shall be incurred by the
Holders, by any party depositing or withdrawing Shares or by any party
surrendering ADSs, to whom ADSs are issued (including, without limitation,
issuance pursuant to a stock dividend or stock split declared by the Company
or
an exchange of stock regarding the ADSs or the Deposited Securities or a
distribution of ADSs pursuant to paragraph (10)), whichever is applicable (i)
a
fee of U.S.$0.02 or less per ADS (or portion thereof) for any Cash distribution
made pursuant to the Deposit Agreement, (ii) to the extent not prohibited by
the
rules of the primary stock exchange upon which the ADSs are listed, a fee of
U.S.$1.50 per ADR or ADRs for transfers made pursuant to paragraph (3) hereof,
(iii) a fee for the distribution or sale of securities pursuant to paragraph
(10) hereof, such fee being in an amount equal to the fee for the execution
and
delivery of ADSs referred to above which would have been charged as a result
of
the deposit of such securities (for purposes of this paragraph (7) treating
all
such securities as if they were Shares) but which securities or the net cash
proceeds from the sale thereof are instead distributed by the Depositary to
Holders entitled thereto, (iv)
a
fee of U.S.$0.02 per ADS (or portion thereof) per year for the services
performed by the Depositary in administering the ADRs (which fee shall be
assessed against Holders as of the record date or dates set by the Depositary
and shall be payable at the sole discretion of the Depositary by billing such
Holders or by deducting such charge from one or more cash dividends or other
cash distributions), and (v) such fees and expenses as are incurred by the
Depositary (including without limitation expenses incurred on behalf of Holders
in connection with compliance with foreign exchange control regulations or
any
law or regulation relating to foreign investment) in delivery of Deposited
Securities or otherwise in connection with the Depositary's or its Custodian's
compliance with applicable law, rule or regulation. The Company will pay all
other charges and expenses of the Depositary and any agent of the Depositary
(except the Custodian) pursuant to agreements from time to time between the
Company and the Depositary, except (i) stock transfer or other taxes and other
governmental charges (which are payable by Holders or persons depositing
Shares), (ii) cable, telex and facsimile transmission and delivery charges
incurred at the request of persons depositing, or Holders delivering Shares,
ADRs or Deposited Securities (which are payable by such persons or Holders),
(iii) transfer or registration fees for the registration or transfer of
Deposited Securities on any applicable register in connection with the deposit
or withdrawal of Deposited Securities (which are payable by persons depositing
Shares or Holders withdrawing Deposited Securities; there are no such fees
in
respect of the Shares as of the date of the Deposit Agreement), (iv) expenses
of
the Depositary in connection with the conversion of foreign currency into U.S.
dollars (which are paid out of such foreign currency), and (v) any other charge
payable by any of the Depositary, any of the Depositary’s agents, including,
without limitation, the custodian, or the agents of the Depositary’s agents in
connection with the servicing of the Shares or other Deposited Securities (which
charge shall be assessed against Holders as of the record date or dates set
by
the Depositary and shall be payable at the sole discretion of the Depositary
by
billing such Holders or by deducting such charge from one or more cash dividends
or other cash distributions). Such charges may at any time and from time to
time
be changed by agreement between the Company and the Depositary.
9
(8)
Available
Information.
The
Deposit Agreement, the provisions of or governing Deposited Securities and
any
written communications from the Company, which are both (a) received by the
Depositary, Custodian or the nominee of either as a holder of Deposited
Securities and (b) made generally available to the holders of Deposited
Securities, are available for inspection by Holders at the offices of the
Depositary and the Custodian and at the Transfer Office. The Depositary will
mail copies of such communications (or English translations or summaries
thereof) to Holders when furnished by the Company. The Company furnishes the
United States Securities and Exchange Commission (the "Commission") with certain
public reports and documents required by foreign law or otherwise under Rule
12g3-2(b) under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx"). At
such time as the Company becomes subject to the periodic reporting requirements
of the Exchange Act, the Company will file such reports with the Commission.
In
each case, such reports and documents may be inspected and copied at the public
reference facilities maintained by the Commission located at the date of the
Deposit Agreement at 000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000.
(9)
Execution.
This
ADR shall not be valid for any purpose unless executed by the Depositary by
the
manual or facsimile signature of a duly authorized officer of the
Depositary.
10
Dated:
| JPMORGAN CHASE BANK, N.A., as Depositary | ||
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| By | ||
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Authorized Officer |
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At
the
date of the Deposit Agreement, the Depositary's Transfer Office is located
at 0
Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
11
[FORM
OF
REVERSE OF RECEIPT]
(10)
Distributions
on Deposited Securities.
Subject
to paragraphs (4) and (5), to the extent practicable, the Depositary will,
as
promptly as practicable, distribute by mail to each Holder entitled thereto
on
the record date set by the Depositary therefor at such Holder's address shown
on
the ADR Register, in proportion to the number of Deposited Securities (on which
the following distributions on Deposited Securities are received by the
Custodian) represented by ADSs evidenced by such Holder's ADRs: (a) Cash:
Any
U.S. dollars available to the Depositary resulting from a cash dividend or
other
cash distribution or the net proceeds of sales of any other distribution or
portion thereof authorized in this paragraph (10) ("Cash"), on an averaged
or
other practicable basis, subject to appropriate adjustments for (i) taxes or
other governmental charges withheld, (ii) such distribution being impermissible
or impracticable with respect to certain Holders, and (iii) deduction of the
Depositary's expenses in (1) converting any foreign currency to U.S. dollars
by
sale or in such other manner as the Depositary may determine to the extent
that
it determines that such conversion may be made on a reasonable basis, (2)
transferring foreign currency or U.S. dollars to the United States by such
means
as the Depositary may determine to the extent that it determines that such
transfer may be made on a reasonable basis, (3) obtaining any approval or
license of any governmental authority required for such conversion or transfer,
which is obtainable at a reasonable cost and within a reasonable time and (4)
making any sale by public or private means in any commercially reasonable
manner. If the Company shall have advised the Depositary pursuant to the
provisions of the Deposit Agreement that any such conversion, transfer or
distribution can be effected only with the approval or license of the Brazilian
government or any agency thereof or the Depositary shall become aware of any
other governmental approval or license required therefor, the Depositary shall
apply for such approval or license, if any, as the Company or its Brazilian
counsel may reasonably instruct in writing or as the Depositary may deem
desirable, including, without limitation, Central Bank registration. Whenever
the Depositary or the Custodian shall receive foreign currency, as a cash
dividend or other cash distribution or as the net proceeds from the sale of
securities, property or rights, which, in the judgment of the Depositary can
then be converted on a reasonable basis into U.S. dollars and distributed to
Holders entitled thereto in the United States, the Depositary shall convert
or
cause to be converted, as promptly as practicable, by sale or in any other
manner that it may determine, such foreign currency into U.S. dollars and shall
transfer the resulting U.S. dollars (net of its reasonably and customary charges
and expenses in effecting such conversion) to the United States. If at any
time
the Depositary shall, after consultation with the Company if practicable,
determine that in its reasonable judgment any foreign currency received by
the
Depositary is not convertible on a reasonable basis into U.S. dollars
transferable to the United States, or if any approval or license of any
governmental authority or agency thereof that is required for such conversion
is
denied or in the opinion of the Depositary is not obtainable at a reasonable
cost or within a reasonable period, the Depositary shall, subject to applicable
laws and regulations, (a) to the extent requested to do so in writing by Holders
entitled to receive the same, distribute the foreign currency (or an appropriate
document evidencing the right to receive such foreign currency) to such Holders
or, to the extent not so requested, (b) hold such foreign currency (without
liability for interest thereon or the investment thereof but with adjustment
to
take account of Brazilian inflation to the extent permitted by applicable law)
for the respective accounts of the other Holders entitled to receive the same.
If at the time the Depositary shall determine that in its judgment any U.S.
dollars received by the Depositary upon conversion of foreign currency are
not
transferable into the United States, or if any approval or license of any
governmental authority or agency thereof that is required for such transfer
is
denied or in the opinion of the Depositary is not obtainable at a reasonable
cost or within a reasonable period, the Depositary shall hold such U.S. dollars
(without liability for interest thereon or investment thereof) for the
respective accounts of the Holders entitled to receive the same. If any such
conversion of foreign currency and transfer into U.S. dollars, in whole or
in
part, can be effected for distribution to some but not all of the Holders
entitled thereto, the Depositary may, in its reasonable discretion make such
conversion and distribution in U.S. dollars to the extent permissible to the
Holders entitled thereto and may distribute the balance of the foreign currency
received by the Depositary to, or hold such balance (without liability for
interest thereon or investment thereof) for the respective accounts of, the
Holders entitled thereto for whom such conversion and distribution is not
practicable; (b) Shares:
(i)
Additional ADRs evidencing whole ADSs representing any Shares available to
the
Depositary resulting from a dividend or free distribution on Deposited
Securities consisting of Shares (a "Share Distribution") and (ii) U.S. dollars
available to it resulting from the net proceeds of sales of Shares received
in a
Share Distribution, which Shares would give rise to fractional ADSs if
additional ADRs were issued therefor, as in the case of Cash. (c) Rights:
(i)
Warrants or, in the discretion of the Depositary, other instruments representing
rights to acquire additional ADRs in respect of any rights to subscribe for
additional Shares or rights of any nature available to the Depositary as a
result of a distribution on Deposited Securities ("Rights"), to the extent
that
the Company timely furnishes to the Depositary evidence satisfactory to the
Depositary that the Depositary may lawfully distribute same (the Company has
no
obligation to so furnish such evidence), or (ii) to the extent the Company
does
not so furnish such evidence and sales of Rights are practicable, any U.S.
dollars available to the Depositary from the net proceeds of sales of Rights
as
in the case of Cash, or (iii) to the extent the Company does not so furnish
such
evidence and such sales cannot practicably be accomplished by reason of the
nontransferability of the Rights, limited markets therefor, their short duration
or otherwise, nothing (and any Rights may lapse). The Depositary will not offer
Rights to Holders having an address in the United States (as defined in
Regulation S), unless and until (i) a registration statement under the
Securities Act of 1933 covering such offering is in effect or (ii) the
Depositary receives an opinion of counsel for the Company in the United States
satisfactory to the Depositary to the effect that the offering and sale of
the
Rights and the securities for which they are exercisable to such Holders are
exempt from registration under the Securities Act of 1933. The Company shall
have no obligation to register the Rights or any such securities under the
Securities Act of 1933. (d) Other
Distributions:
(i)
securities or property available to the Depositary resulting from any
distribution on Deposited Securities other than Cash, Share Distributions and
Rights ("Other Distributions"), by any means that the Depositary may deem
equitable and practicable, or (ii) to the extent the Depositary deems
distribution of such securities or property not to be equitable and practicable,
any U.S. dollars available to the Depositary from the net proceeds of sales
of
Other Distributions as in the case of Cash. Distributions of U.S. dollars
pursuant to any clause of this paragraph (10) will be by checks drawn on a
bank
in the United States for whole dollars and cents (any fractional cents being
withheld without liability for interest and added to future distributions of
U.S. dollars).
12
(11)
Record
Dates.
The
Depositary shall, after consultation with the Company if practicable, fix a
record date (which shall be as near as practicable to any corresponding record
date set by the Company) for the determination of the Holders who shall be
entitled to receive any distribution on or in respect of Deposited Securities
or
the net proceeds thereof, to give instructions for the exercise of any voting
rights in respect of Deposited Securities, to receive any notice or to act
in
respect of other matters and only such Holders at the close of business on
such
record date shall be so entitled.
(12)
Voting
of Deposited Securities. Under
the
Brazilian Corporate Law (Law 6404 of December 15, 1976) and the by-laws of
the
Company on the date of the Deposit Agreement, the Shares have general voting
rights only so long as the Company has failed for three consecutive fiscal
years
to pay a minimum dividend on the Shares of 25% of the Company's net profits;
otherwise the Shares have no voting rights in respect of any matters except
changes to the Company's capital structure which adversely affect the Shares.
As
soon as practicable after receipt from the Company of notice of any meeting
or
solicitation of consents or proxies of holders of Shares or other Deposited
Securities, unless the Company informs the Depositary otherwise in order to
comply with applicable law, the Depositary shall mail to Holders a notice
stating (a) such information as is contained in such notice and any solicitation
materials (or a summary thereof in English provided by the Company), (b) that
each Holder at the close of business on the record date set by the Depositary
therefor will be entitled, subject to any applicable provisions of Brazilian
law
and the Company's estatuto,
to
instruct the Depositary as to the exercise of the voting rights, if any,
pertaining to the Deposited Securities represented by the ADSs evidenced by
such
Holders' ADRs and (c) the manner in which such instructions may be given,
including instructions (or deemed instructions in accordance with the last
sentence of this paragraph) to give a proxy to a person designated by the
Company. Upon receipt of instructions of a Holder on such record date in the
manner and on or before the date established by the Depositary for such purpose,
the Depositary shall endeavor insofar as practicable and permitted under the
provisions of or governing Deposited Securities to vote or cause to be voted
(or, as described below, to grant a proxy to a person designated by the Company
to vote) the Deposited Securities represented by the ADSs evidenced by such
Holder's ADRs in accordance with such instructions. The Depositary will not
itself exercise any voting discretion in respect of any Deposited Securities.
To
the extent such instructions are not so received by the Depositary from any
Holder and to the extent permitted under applicable law, the Depositary shall
deem such Holder to have so instructed the Depositary to give a proxy to a
person designated by the Company to vote in the same manner as the holders
of
the majority of Shares voted at the relevant meeting and the Depositary shall
endeavor insofar as practicable and permitted under the provisions of or
governing Deposited Securities, including applicable law, to give such a proxy
to a person designated by the Company to vote the Deposited Securities
represented by the ADSs evidenced by such Holder's ADRs as to which such
instructions are so deemed given; provided
that no
such instruction shall be deemed given and no such proxy shall be given with
respect to any matter to which the Company informs the Depositary (and the
Company agrees to provide such information promptly in writing) that the Company
does not wish such proxy given; provided,
further, that such Deposited Securities shall in such event be counted for
the
purpose of satisfying applicable quorum requirements unless the Company
determines otherwise; and provided,
further
that the Depositary shall not be obligated to give any such proxy unless and
until the Depositary has been provided with an opinion, which may be given
at
the time of entering into the Deposit Agreement, of Brazilian counsel to the
Company, in form and substance satisfactory to the Depositary, to the effect
that (i) the granting of such proxy does not subject the Depositary to any
reporting obligations in Brazil, (ii) the granting of such proxy will not result
in a violation of Brazilian law and (iii) the voting arrangement and proxy
as
contemplated herein will be given effect under Brazilian law. If after the
date
such opinion is delivered to the Depositary the Company is advised by counsel
that there has occurred a change in Brazilian law such that the foregoing
opinion could no longer be rendered favorably in whole or in part, the Company
shall promptly notify the Depositary of such change and the Depositary shall
thereafter have no obligation to give any such proxy. The Company agrees to
direct its counsel to inform it of any such changes in Brazilian law. Subject
to
the rules of any securities exchange on which the Deposited Securities are
listed, the Depositary shall use its reasonable efforts to deliver to the extent
practicable, at least two business days prior to the date such meeting, to
the
Company voting instructions received (or deemed received) from Holders.
13
(13)
Changes
Affecting Deposited Securities.
Upon
any change in par value, split-up, consolidation, cancellation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger, consolidation, liquidation or sale of all or
substantially all of the assets of the Company or to which it is a party, any
securities, cash or other property that shall be received by the Depositary
in
exchange for, or in conversion or replacement of, Deposited Securities shall
be
treated as Deposited Securities under this Deposit Agreement, and the ADRs
shall
thenceforth evidence ADSs representing the right to receive the Deposited
Securities as so reconstituted, subject to the provisions of the following
sentence. In any such case the Depositary may with the Company's approval (which
approval shall not be unreasonably withheld), and shall if the Company shall
so
reasonably request, subject to this Deposit Agreement, distribute any part
of
the securities, cash or other property so received or execute and deliver
additional ADRs as in the case of a dividend of Shares, in either case in
accordance with paragraph (10), and thereafter the Depositary may, in its
discretion but with the prior approval of the Company (which approval shall
not
be unreasonably withheld), call for the surrender of outstanding ADRs to be
exchanged for new ADRs specifically describing such newly received Deposited
Securities to the extent not so distributed.
(14) Exoneration.
The
Depositary, the Company, their agents and each of them shall: (a) incur no
liability (i) if law, rule or regulation of the United States, Brazil or any
other country or of any other governmental or regulatory authority or stock
exchange or the Company's estatuto,
the
provisions of or governing any Deposited Securities, the issuance of any
securities by the Company, any act of God, war or other circumstance beyond
its
control shall prevent, delay or subject to any civil or criminal penalty any
act
which the Deposit Agreement or this ADR provides shall be done or performed
by
it, or (ii) by reason of any exercise or failure to exercise any discretion
given it in the Deposit Agreement or this ADR or the Company's estatuto;
(b)
assume no liability except to perform its obligations (other than those directly
related to the handling of Deposited Securities and Cash) to the extent they
are
specifically set forth in this ADR and the Deposit Agreement without gross
negligence or bad faith; (c) assume no liability except to perform its
obligations directly related to the handling of Deposited Securities and Cash
to
the extent they are specifically set forth in this ADR and the Deposit Agreement
without negligence or bad faith; (d) in the case of the Depositary and its
agents hereunder, be under no obligation to appear in, prosecute or defend
any
action, suit or other proceeding in respect of any Deposited Securities or
this
ADR; (e) in the case of the Company and its agents hereunder, be under no
obligation to appear in, prosecute or defend any action, suit or other
proceeding in respect of any Deposited Securities or this ADR, which in its
opinion may involve it in expense or liability, unless indemnity satisfactory
to
it against all expense (including fees and disbursements of counsel) and
liability be furnished as often as may be required; or (f) not be liable for
any
action or inaction by it in reliance upon the advice of or information from
legal counsel, accountants, any person presenting Shares for deposit, any
Holder, or any other person believed by it to be competent to give such advice
or information. The Depositary, its agents and the Company may rely and shall
be
protected in acting upon any notice, request, direction or other communication
believed by them in good faith to be genuine and to have been signed or
presented by the proper party or parties. The
Depositary may rely upon instructions from the Company or its Brazilian counsel
in respect of any approval or license of the Brazilian government or any agency
thereof required for any currency conversion, transfer or distribution. The
Depositary and its agents will not be responsible for any failure to carry
out
any instructions to vote any of the Deposited Securities, for the manner in
which any such vote is cast or for the effect of any such vote, provided
that
such action or inaction is in good faith. Subject to the Company's estatuto
and the
Deposit Agreement, the Depositary and its agents may own and deal in any class
of securities of the Company and its affiliates and in ADSs. The Company has
agreed to indemnify the Depositary and its agents under certain circumstances
and the Depositary has agreed to indemnify the Company against losses incurred
by the Company to the extent such losses are due to the negligence or bad faith
of the Depositary. No disclaimer of liability under the Securities Act of 1933
is intended by any provision hereof.
14
(15)
Resignation
and Removal of Depositary; the Custodian.
The
Depositary may resign as Depositary by written notice of its election to do
so
delivered to the Company, or be removed as Depositary by the Company by written
notice of such removal delivered to the Depositary; such resignation or removal
shall take effect upon the appointment of and acceptance by a successor
depositary. The Depositary may appoint substitute or additional Custodians
and
the term "Custodian"
refers
to each Custodian or all Custodians as the context requires.
15
(16)
Amendment.
Subject
to the last sentence of paragraph (2), the ADRs and the Deposit Agreement may
be
amended by the Company and the Depositary, provided
that any
amendment that imposes or increases any fees or charges (other than stock
transfer or other taxes and other governmental charges, transfer or registration
fees, cable, telex or facsimile transmission costs, delivery costs or other
such
expenses), or that shall otherwise prejudice any substantial existing right
of
Holders, shall become effective 30 days after notice of such amendment shall
have been given to the Holders. Every Holder of an ADR at the time any amendment
to the Deposit Agreement so becomes effective shall be deemed, by continuing
to
hold such ADR, to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair
the
right of the Holder of any ADR to surrender such ADR and receive the Deposited
Securities represented thereby, except in order to comply with mandatory
provisions of applicable law. Any amendments or supplements which (i) are
reasonably necessary (as agreed by the Company and the Depositary) in order
for
(a) the ADSs to be registered on Form F-6 under the Securities Act of 1933
or
(b) the ADSs or Shares to be traded solely in electronic book-entry form and
(ii) do not in either such case impose or increase any fees or charges to be
borne by Holders, shall be deemed not to prejudice any substantial rights of
Holders. Notwithstanding the foregoing, if any governmental body should adopt
new laws, rules or regulations which would require amendment or supplement
of
the Deposit Agreement or the form of ADR to ensure compliance therewith, the
Company and the Depositary may amend or supplement the Deposit Agreement and
the
ADR at any time in accordance with such changed rules. Such amendment or
supplement to the Deposit Agreement in such circumstances may become effective
before a notice of such amendment or supplement is given to Holders or within
any other period of time as required for compliance.
(17)
Termination.
The
Depositary shall at the written direction of the Company, terminate the Deposit
Agreement and this ADR by mailing notice of such termination to the Holders
at
least 30 days prior to the date fixed in such notice for such termination.
The
Depositary may terminate this Deposit Agreement, after giving the notice set
forth in the preceding sentence of this paragraph (17) at any time after 45
days
has elapsed after the Depositary shall have delivered to the Company its written
resignation, provided
that no
successor depositary shall have been appointed and accepted its appointment
as
provided in Section 13 of the Deposit Agreement and paragraph (15) of this
ADR
before the end of such 45 days. After the date so fixed for termination, the
Depositary and its agents will perform no further acts under the Deposit
Agreement and this ADR, except to receive and hold (or sell) distributions
on
Deposited Securities and deliver Deposited Securities being withdrawn together
with any such distributions on Deposited Securities (without liability for
interest) and any net proceeds of the sale of any Rights or other property,
without liability for interest, as the Depositary may reasonably effect. As
soon
as practicable after the expiration of six months from the date so fixed for
termination, the Depositary shall sell the Deposited Securities and shall
thereafter (as long as it may lawfully do so) hold in a segregated account
the
net proceeds of such sales, together with any other cash then held by it under
the Deposit Agreement, without liability for interest, in trust for the
pro rata
benefit
of the Holders of ADRs not theretofore surrendered. After making such sale,
the
Depositary shall be discharged from all obligations in respect of the Deposit
Agreement and this ADR, except to account for such net proceeds and other cash
and for its obligations under Section 16 of the Deposit Agreement. After the
date so fixed for termination, the Company shall be discharged from all
obligations under the Deposit Agreement except for its obligations to the
Depositary and its agents under paragraph (7) hereof and Section 16 of the
Deposit Agreement.
16
