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SECOND AMENDED AND RESTATED DEPOSIT AGREEMENT
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by and among
COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG,
as Issuer
AND
CITIBANK, N.A.,
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER
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Dated as of August 10, 2001
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ARTICLE I
DEFINITIONS....................................................................8
SECTION 1.1 "Affiliate"...............................................8
SECTION 1.2 "American Depositary Share(s)" and "ADS(s)"...............8
SECTION 1.3 "ADS Record Date".........................................8
SECTION 1.4 "Applicant"...............................................8
SECTION 1.5 "Banco Central do Brasil".................................8
SECTION 1.6 "Beneficial Owner"........................................8
SECTION 1.7 "Brazil"..................................................9
SECTION 1.8 "Business Day"............................................9
SECTION 1.9 "Comissao de Valores Mobiliarios" or "CVM"................9
SECTION 1.10 "Commission"..............................................9
SECTION 1.11 "Companhia Brasileira de Liquidacao e Custodia"...........9
SECTION 1.12 "Company".................................................9
SECTION 1.13 "Custodian"...............................................9
SECTION 1.14 "Deliver" and "Delivery"..................................9
SECTION 1.15 "Deposit Agreement"......................................10
SECTION 1.16 "Depositary".............................................10
SECTION 1.17 "Deposited Securities"...................................10
SECTION 1.18 "Dollars" and "$"........................................10
SECTION 1.19 "DTC"....................................................10
SECTION 1.20 "DTC Participant"........................................10
SECTION 1.21 "Exchange Act"...........................................11
SECTION 1.22 "Foreign Currency".......................................11
SECTION 1.23 "Full Entitlement ADR(s)," "Full Entitlement ADS(s)"
and "Full Entitlement Share(s)"..........................11
SECTION 1.24 "Holder".................................................11
SECTION 1.25 "Partial Entitlement ADR(s)" and
"Partial Entitlement Share(s)"...........................11
SECTION 1.26 "Pre-Release"............................................11
SECTION 1.27 "Principal Office".......................................11
SECTION 1.28 "Real," "Reais" and "R$".................................11
SECTION 1.29 "Receipt(s)," "American Depositary Receipt(s)" and
"ADR(s)".................................................11
SECTION 1.30 "Registrar"..............................................12
SECTION 1.31 "Restricted Securities"..................................12
SECTION 1.32 "Securities Act".........................................13
SECTION 1.33 "Share Registrar"........................................13
SECTION 1.34 "Shares".................................................13
SECTION 1.35 "United States" or "U.S."................................13
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF SHARES;
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS....................13
SECTION 2.1 Appointment of Depositary................................14
SECTION 2.2 Form and Transferability of Receipts.....................14
SECTION 2.3 Deposit with Custodian...................................17
SECTION 2.4 Registration and Safekeeping of Deposited Securities.....19
SECTION 2.5 Execution and Delivery of Receipts.......................20
SECTION 2.6 Transfer, Combination and Split-up of Receipts...........21
SECTION 2.7 Surrender of ADSs and Withdrawal of Deposited Securities 23
SECTION 2.8 Limitations on Execution and Delivery, Transfer, etc. of
Receipts; Suspension of Delivery, Transfer, etc..........25
SECTION 2.9 Lost Receipts, etc.......................................27
SECTION 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records......27
SECTION 2.11 Partial Entitlement ADSs.................................28
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF ADSs..................29
SECTION 3.1 Proofs, Certificates and Other Information...............29
SECTION 3.2 Liability for Taxes and Other Charges....................30
SECTION 3.3 Representations and Warranties on Deposit of Shares......31
SECTION 3.4 Compliance with Information Requests.....................32
SECTION 3.5 Ownership Restrictions...................................32
ARTICLE IV
THE DEPOSITED SECURITIES......................................................33
SECTION 4.1 Cash Distributions.......................................33
SECTION 4.2 Distribution in Shares...................................34
SECTION 4.3 Elective Distributions in Cash or Shares.................35
SECTION 4.4 Distribution of Rights to Purchase Additional ADSs.......36
SECTION 4.5 Distributions Other Than Cash, Shares or Rights to
Purchase Shares..........................................40
SECTION 4.6 Distributions with Respect to Deposited Securities in
Bearer Form..............................................41
SECTION 4.7 Redemption...............................................42
SECTION 4.8 Conversion of Foreign Currency...........................43
SECTION 4.9 Fixing of ADS Record Date................................44
SECTION 4.10 Voting of Deposited Securities...........................45
SECTION 4.11 Changes Affecting Deposited Securities...................47
SECTION 4.12 Available Information....................................49
SECTION 4.13 Reports..................................................49
SECTION 4.14 List of Holders..........................................49
SECTION 4.15 Taxation.................................................49
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ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.................................51
SECTION 5.1 Maintenance of Office and Transfer Books by the
Registrar................................................51
SECTION 5.2 Exoneration..............................................52
SECTION 5.3 Standard of Care.........................................54
SECTION 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary......................55
SECTION 5.5 The Custodian............................................56
SECTION 5.6 Notices and Reports......................................57
SECTION 5.7 Issuance of Additional Shares, ADSs etc..................59
SECTION 5.8 Indemnification..........................................60
SECTION 5.9 Fees and Charges of Depositary...........................62
SECTION 5.10 Pre-Release..............................................63
SECTION 5.11 Restricted Securities Owners.............................64
ARTICLE VI
AMENDMENT AND TERMINATION.....................................................64
SECTION 6.1 Amendment/Supplement.....................................64
SECTION 6.2 Termination..............................................66
ARTICLE VII
MISCELLANEOUS.................................................................68
SECTION 7.1 Counterparts.............................................68
SECTION 7.2 No Third-Party Beneficiaries.............................68
SECTION 7.3 Severability.............................................68
SECTION 7.4 Holders and Beneficial Owners as Parties;
Binding Effect...........................................69
SECTION 7.5 Notices..................................................69
SECTION 7.6 Governing Law and Jurisdiction...........................70
SECTION 7.7 Assignment...............................................73
SECTION 7.8 Compliance with U.S. Securities Laws.....................73
SECTION 7.9 Regulatory Compliance....................................74
SECTION 7.10 Titles and References....................................75
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SECOND AMENDED AND RESTATED DEPOSIT AGREEMENT, dated as of August 10,
2001, by and among (i) COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG, a company
organized and existing under the laws of the Federative Republic of Brazil
("Brazil"), and its successors (the "Company"), (ii) CITIBANK, N.A., a national
banking association organized and existing under the laws of the United States
of America acting in its capacity as depositary, and any successor depositary
hereunder (the "Depositary"), and (iii) all Holders and Beneficial Owners of
American Depositary Shares evidenced by American Depositary Receipts issued
hereunder (all such capitalized terms as hereinafter defined).
W I T N E S S E T H THAT:
WHEREAS, the Company has duly authorized and has outstanding
89,504,020,501 non-voting preferred shares, each with a par value of R$0.01 (the
"Shares"), which are listed for trading on the Bolsa de Valores de Sao Paulo
(the "Sao Paulo Stock Exchange");
WHEREAS, the Company, Citibank, N.A. and the holders and beneficial owners
of American Depositary Receipts (as defined below in this paragraph) entered
into that certain Amended and Restated Deposit Agreement, dated as of March 31,
1995 (the "First Amended and Restated Deposit Agreement"), providing for the
deposit of shares of ordinary common stock or preferred stock, as the case may
be, of the Company (collectively, the "Fungible Shares") from time to time with
Citibank, N.A., as depositary thereunder, or Banco Itau S.A., as custodian
thereunder, for the creation of American Depositary Shares (as defined in the
First Amended and Restated Deposit Agreement) representing the Fungible Shares
so deposited and for the execution and delivery of American Depositary Receipts
(as defined in the First Amended and Restated Deposit Agreement) evidencing such
American Depositary Shares;
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WHEREAS, the Company, Citibank, N.A. and the holders and beneficial owners
of Rule 144A ADRs (as defined below in this paragraph) entered into that certain
Rule 144A Deposit Agreement, dated as of September 29, 1994 (the "Rule 144A
Deposit Agreement"), providing for the deposit of preferred stock (the "Rule
144A Shares") of the Company from time to time with Citibank, N.A., as
depositary thereunder (the "Rule 144A Depositary"), or Banco Itau S.A., as
custodian thereunder, for the creation of Rule 144A American Depositary Shares
(as defined in the Rule 144A Deposit Agreement) representing the Rule 144A
Shares so deposited and for the execution and delivery of Rule 144A ADRs (as
defined in the Rule 144A Deposit Agreement) evidencing such Rule 144A American
Depositary Shares;
WHEREAS, the Company, Citibank, N.A. and the holders and beneficial owners
of Regulation S ADRs (as defined below in this paragraph) entered into that
certain Regulation S Deposit Agreement, dated as of September 29, 1994 (the
"Regulation S Deposit Agreement"), providing for the deposit of preferred stock
(the "Regulation S Shares") of the Company from time to time with Citibank,
N.A., as depositary thereunder, or Banco Itau S.A., as custodian thereunder, for
the creation of Regulation S American Depositary Shares (as defined in the
Regulation S Deposit Agreement) representing the Regulation S Shares so
deposited and for the execution and delivery of Regulation S ADRs (as defined in
the Regulation S Deposit Agreement) evidencing such Regulation S American
Depositary Shares;
WHEREAS, the Company desires to (i) amend and restate (x) the First
Amended and Restated Deposit Agreement and (y) the Regulation S Deposit
Agreement for the purpose of, inter alia, combining the two ADR facilities to
allow for the deposit of the Shares, including any Regulation S Shares that were
deposited pursuant to the Regulation S Deposit Agreement, and the creation of
American Depositary Shares representing the Shares, including any Regulation S
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Shares that were deposited pursuant to the Regulation S Deposit Agreement, so
deposited and for the execution and delivery of American Depositary Receipts
evidencing such American Depositary Shares and (ii) to terminate the Rule 144A
Deposit Agreement in accordance with the terms thereof;
WHEREAS, the Depositary is willing to act as the Depositary for this
combined ADR facility upon the terms set forth in this Second Amended and
Restated Deposit Agreement (hereinafter, the "Deposit Agreement");
WHEREAS, the American Depositary Receipts evidencing the American
Depositary Shares issued pursuant to the terms of this Deposit Agreement are to
be substantially in the form of Exhibit A attached hereto, with appropriate
insertions, modifications and omissions, as hereinafter provided in this Deposit
Agreement;
WHEREAS, application is to be made to list the American Depositary Shares
to be issued pursuant to the terms of this Deposit Agreement for trading on the
New York Stock Exchange, Inc.; and
WHEREAS, the Board of Directors of the Company (or an authorized committee
thereof) has duly approved the establishment of a combined ADR facility upon the
terms set forth in this Deposit Agreement, the execution and delivery of this
Deposit Agreement on behalf of the Company, and the actions of the Company and
the transactions contemplated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the First Amended and Restated Deposit Agreement and the Regulation
S Deposit Agreement as follows:
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ARTICLE I
DEFINITIONS
All capitalized terms used, but not otherwise defined, herein shall have
the meanings set forth below, unless otherwise clearly indicated:
SECTION 1.1 "Affiliate" shall have the meaning assigned to such term by
the Commission (as hereinafter defined) under Regulation C promulgated under the
Securities Act (as hereinafter defined), or under any successor regulation
thereto.
SECTION 1.2 "American Depositary Share(s)" and "ADS(s)" shall mean with
respect to any American Depositary Receipt, the rights and interests in the
Deposited Securities granted to the Holders and Beneficial Owners pursuant to
the terms and conditions of this Deposit Agreement and the American Depositary
Receipts issued hereunder to evidence such ADSs. Each ADS shall represent 1,000
Shares, until there shall occur a distribution upon Deposited Securities
referred to in Section 4.2 or a change in Deposited Securities referred to in
Section 4.11 with respect to which additional ADSs are not issued, and
thereafter each ADS shall represent the Shares or Deposited Securities
determined in accordance with the terms of such Sections.
SECTION 1.3 "ADS Record Date" shall have the meaning given to such term in
Section 4.9.
SECTION 1.4 "Applicant"shall have the meaning given to such term in
Section 5.10.
SECTION 1.5 "Banco Central do Brasil" shall mean the Central Bank of
Brazil.
SECTION 1.6 "Beneficial Owner" shall mean as to any ADS, any person or
entity having a beneficial interest deriving from the ownership of such ADS. A
Beneficial Owner of ADSs may or may not be the Holder of the ADR(s) evidencing
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such ADSs. A Beneficial Owner shall be able to exercise any right or receive any
benefit hereunder solely through the person who is the Holder of the ADR(s)
evidencing the ADSs owned by such Beneficial Owner.
SECTION 1.7 "Brazil" shall mean the Federative Republic of Brazil.
SECTION 1.8 "Business Day" shall mean any day on which both the banks in
Belo Horizonte, Minas Gerais, Brazil and The City of New York, New York are open
for business.
SECTION 1.9 "Comissao de Valores Mobiliarios" or "CVM" shall mean the
Brazilian securities and exchange commission.
SECTION 1.10 "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency thereto in
the United States.
SECTION 1.11 "Companhia Brasileira de Liquidacao e Custodia" shall mean
the Brazilian clearing agency.
SECTION 1.12 "Company" shall mean Companhia Energetica de Minas
Gerais-CEMIG, a company organized and existing under the laws of Brazil, and its
successors.
SECTION 1.13 "Custodian" shall mean, as of the date hereof, Citibank
Distribuidora de Titulos e Valores Mobiliarios S.A., having its principal office
at Xxxxxxx Xxxxxxxx, 0000 - 0(xxxxxx) xxxxx, Xxx Xxxxx, Xxxxxx, as the custodian
for the purposes of this Deposit Agreement, and any other firm or corporation
which may be appointed by the Depositary pursuant to the terms of Section 5.5 as
a successor custodian hereunder.
SECTION 1.14 "Deliver" and "Delivery" shall mean, when used in respect of
ADSs, Receipts, Deposited Securities and Shares, either (i) the physical
delivery of the certificate(s) representing such securities, or (ii) the
electronic delivery of such securities by means of book-entry transfer, if
available.
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SECTION 1.15 "Deposit Agreement" shall mean this Deposit Agreement and all
exhibits hereto, as the same may from time to time be amended and supplemented
from time to time in accordance with the terms hereof.
SECTION 1.16 "Depositary" shall mean Citibank, N.A., a national banking
association organized under the laws of the United States, in its capacity as
depositary under the terms of this Deposit Agreement, and any successor
depositary hereunder.
SECTION 1.17 "Deposited Securities" shall mean Shares at any time
deposited under this Deposit Agreement and any and all other securities,
property and cash held by the Depositary or the Custodian in respect thereof,
subject, in the case of cash, to the provisions of Section 4.8. The collateral
delivered in connection with Pre-Release Transactions described in Section 5.10
hereof shall not constitute Deposited Securities.
SECTION 1.18 "Dollars" and "$" shall refer to the lawful currency of the
United States.
SECTION 1.19 "DTC" shall mean The Depository Trust Company, a national
clearinghouse and the central book-entry settlement system for securities traded
in the United States and, as such, the custodian for the securities of DTC
Participants (as hereinafter defined) maintained in DTC, and any successor
thereto.
SECTION 1.20 "DTC Participant" shall mean any financial institution (or
any nominee of such institution) having one or more participant accounts with
DTC for receiving, holding and delivering the securities and cash held in DTC.
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SECTION 1.21 "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as from time to time amended.
SECTION 1.22 "Foreign Currency" shall mean any currency other than
Dollars.
SECTION 1.23 "Full Entitlement ADR(s)," "Full Entitlement ADS(s)" and
"Full Entitlement Share(s)" shall have the respective meanings set forth in
Section 2.11.
SECTION 1.24 "Holder" shall mean the person in whose name a Receipt is
registered on the books of the Depositary (or the Registrar, if any) maintained
for such purpose. A Holder may or may not be a Beneficial Owner. If a Holder is
not the Beneficial Owner of the ADSs evidenced by the Receipt registered in its
name, such person shall be deemed to have all requisite authority to act on
behalf of the Beneficial Owners of the ADSs evidenced by such Receipt.
SECTION 1.25 "Partial Entitlement ADR(s)" and "Partial Entitlement
Share(s)" shall have the respective meanings set forth in Section 2.11.
SECTION 1.26 "Pre-Release" shall have the meaning set forth in Section
5.10 hereof.
SECTION 1.27 "Principal Office" when used with respect to the Depositary,
shall mean the principal office of the Depositary at which at any particular
time its depositary receipts business shall be administered, which, at the date
of this Deposit Agreement, is located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, X.X.X.
SECTION 1.28 "Real," "Reais" and "R$" shall refer to the lawful currency
of Brazil.
SECTION 1.29 "Receipt(s)," "American Depositary Receipt(s)" and "ADR(s)"
shall mean the certificate(s) issued by the Depositary to evidence the American
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Depositary Shares issued under the terms of this Deposit Agreement, as such
Receipts may be amended from time to time in accordance with the provisions of
this Deposit Agreement. A Receipt may evidence any number of American Depositary
Shares and may, in the case of American Depositary Shares held through a central
depository such as DTC, be in the form of a "Balance Certificate."
SECTION 1.30 "Registrar" shall mean the Depositary or any bank or trust
company having an office in the Borough of Manhattan, The City of New York,
which shall be appointed by the Depositary to register issuances, transfers and
cancellations of Receipts as herein provided, and shall include any co-registrar
appointed by the Depositary for such purposes. Registrars (other than the
Depositary) may be removed and substitutes appointed by the Depositary. Each
Registrar (other than the Depositary) appointed pursuant to this Deposit
Agreement shall be required to give notice in writing to the Depositary
accepting such appointment and agreeing to be bound by the applicable terms of
this Deposit Agreement.
SECTION 1.31 "Restricted Securities" shall mean Shares, Deposited
Securities or ADSs, which (i) have been acquired directly or indirectly from the
Company or any of its Affiliates in a transaction or chain of transactions not
involving any public offering and are subject to resale limitations under the
Securities Act or the rules issued thereunder, or (ii) are held by an officer or
director (or persons performing similar functions) or other Affiliate of the
Company, or (iii) are subject to other restrictions on sale or deposit under the
laws of the United States, Brazil, or under a shareholders' agreement or the
Estatuto Social of the Company or under the regulations of an applicable
securities exchange unless, in each case, such Shares, Deposited Securities or
ADSs are being transferred or sold to persons other than an Affiliate of the
Company in a transaction (i) covered by an effective resale registration
statement or (ii) exempt from the registration requirements of the Securities
Act (as hereinafter defined), and the Shares, Deposited Securities or ADSs are
not, when held by such person(s), Restricted Securities.
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SECTION 1.32 "Securities Act" shall mean the United States Securities Act
of 1933, as from time to time amended.
SECTION 1.33 "Share Registrar" shall mean Citibank Distribuidora de
Titulos e Valores Mobiliarios S.A. or a depository institution organized under
the laws of Brazil, which carries out the duties of registrar for the Shares,
and any successor thereto.
SECTION 1.34 "Shares" shall mean the Company's non-voting preferred shares
(acoes preferenciais), with a par value of R$0.01, validly issued and
outstanding and fully paid and may, if the Depositary so agrees after
consultation with the Company, include evidence of the right to receive Shares;
provided that in no event shall Shares include evidence of the right to receive
Shares with respect to which the full purchase price has not been paid or Shares
as to which preemptive rights have theretofore not been validly waived or
exercised; provided further, however, that, if there shall occur any change in
par or nominal value, split-up, consolidation, reclassification, conversion or
any other event described in Section 4.11, in respect of the Shares of the
Company, the term "Shares" shall thereafter, to the maximum extent permitted by
law, represent the successor securities resulting from such change in par or
nominal value, split-up, consolidation, exchange, conversion, reclassification
or event.
SECTION 1.35 "United States" or "U.S." shall mean the United States of
America.
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF SHARES; EXECUTION
AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
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SECTION 2.1 Appointment of Depositary. The Company hereby appoints the
Depositary as depositary for the Deposited Securities and hereby authorizes and
directs the Depositary to act in accordance with the terms and conditions set
forth in this Deposit Agreement and the applicable ADRs. Each Holder and each
Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued
in accordance with the terms and conditions of this Deposit Agreement, shall be
deemed for all purposes to (a) be a party to and bound by the terms of this
Deposit Agreement and applicable ADR(s) and (b) appoint the Depositary its
attorney-in-fact, with full power to delegate, to, act on its behalf and to take
any and all actions contemplated in this Deposit Agreement and the applicable
ADR(s), to adopt any and all procedures necessary to comply with applicable law
and to take such action as the Depositary in its sole discretion may deem
necessary or appropriate to carry out the purposes of this Deposit Agreement and
the applicable ADR(s) (the taking of such actions to be the conclusive
determinant of the necessity and appropriateness thereof).
SECTION 2.2 Form and Transferability of Receipts.
(a) Form. American Depositary Shares shall be evidenced by definitive
Receipts which shall be engraved, printed, lithographed or produced in such
other manner as may be agreed upon by the Company and the Depositary. Receipts
may be issued under the Deposit Agreement in denominations of any whole number
of ADSs. The Receipts shall be substantially in the form set forth in Exhibit A
attached to this Deposit Agreement, with any appropriate insertions,
modifications and omissions, in each case as otherwise contemplated in this
Deposit Agreement or required by law. Receipts shall be (i) dated, (ii) executed
by the manual or facsimile signature of a duly authorized signatory of the
Depositary, (iii) countersigned by the manual or facsimile signature of a duly
14
authorized signatory of the Registrar and (iv) registered in the books
maintained by the Registrar for the registration of issuances and transfers of
Receipts. No Receipt and no ADS evidenced thereby shall be entitled to any
benefits under this Deposit Agreement or be valid or enforceable for any purpose
against the Depositary or the Company, unless such Receipt shall have been so
dated, signed, countersigned and registered. The Registrar shall maintain
separate books in which is registered each Receipt evidencing ADSs so executed
and delivered and the transfer of each American Depositary Receipt. Receipts
bearing the facsimile signature of a duly-authorized officer of the Depositary,
who was at the time of signature a duly-authorized signatory of the Depositary
or the Registrar, as the case may be, shall bind the Depositary, notwithstanding
the fact that such signatory has ceased to be so authorized prior to the
execution of such Receipt or the delivery of such Receipt by the Depositary. The
Receipts shall bear a CUSIP number that is different from any CUSIP number that
was, is or may be assigned to any depositary receipts previously or subsequently
issued pursuant to any other arrangement between the Depositary (or any other
depositary) and the Company and which are not Receipts issued hereunder.
(b) Legends. The Receipts may be endorsed with, or have incorporated in
the text thereof, such legends or recitals or changes not inconsistent with the
provisions of this Deposit Agreement as (i) may be necessary to enable the
Depositary and the Company to perform their respective obligations hereunder,
(ii) may be required to comply with any applicable laws or regulations, or with
the rules and regulations of any securities exchange or market upon which ADSs
may be traded, listed or quoted, or to conform with any usage with respect
thereto, (iii) may be necessary to indicate any special limitations or
restrictions to which any particular Receipts or ADSs are subject by reason of
the date of issuance of the Deposited Securities or otherwise or (iv) may be
required by any book-entry system in which the ADSs are held.
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Holders and Beneficial Owners shall be deemed, for all purposes, to have
notice of, and to be bound by, the terms and conditions of the legends set
forth, in the case of Holders, on the ADR registered in the name of the
applicable Holders or, in the case of Beneficial Owners, on the ADR representing
the ADSs owned by such Beneficial Owners.
(c) Title. Subject to the limitations contained herein and in the Receipt,
title to a Receipt (and to each ADS evidenced thereby) shall be transferable
upon the same terms as a certificated security under the laws of the State of
New York, provided that such Receipt has been properly endorsed or is
accompanied by proper instruments of transfer. Notwithstanding any notice to the
contrary, the Depositary and the Company may deem and treat the Holder of a
Receipt (that is, the person in whose name a Receipt is registered on the books
of the Depositary) as the absolute owner thereof for all purposes. Neither the
Depositary nor the Company shall have any obligation or be subject to any
liability under this Deposit Agreement or any Receipt to any holder of a Receipt
or any Beneficial Owner unless such holder is the registered Holder of such
Receipt on the books of the Depositary or, in the case of a Beneficial Owner,
such Beneficial Owner, or the Beneficial Owner's representative, is the Holder
registered on the books of the Depositary.
(d) Book-Entry Systems. The Depositary shall make arrangements for the
acceptance of the American Depositary Shares into DTC. A single ADR in the form
of a "Balance Certificate" will evidence all ADSs held through DTC and will be
registered in the name of the nominee for DTC (currently "Cede & Co.") and will
provide that it represents the aggregate amount of ADSs from time to time
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indicated in the records of the Depositary as being issued hereunder and that
the aggregate amount of ADSs represented thereby may from time to time be
increased or decreased by making adjustments on such records of the Depositary
and of DTC or its nominee as hereinafter provided. As such, the nominee for DTC
will be the only "Holder" of the ADR evidencing all ADSs held through DTC.
Citibank, N.A. (or such other entity as is appointed by DTC or its nominee) may
hold the "Balance Certificate" as custodian for DTC. Each Beneficial Owner of
ADSs held through DTC must rely upon the procedures of DTC and the DTC
Participants to exercise or be entitled to any rights attributable to such ADSs.
The DTC Participants shall for all purposes be deemed to have all requisite
power and authority to act on behalf of the Beneficial Owners of the ADSs held
in the DTC Participants' respective accounts in DTC, and the Depositary shall
for all purposes be authorized to rely upon any instructions and information
given to it by DTC Participants on behalf of Beneficial Owners of ADSs. So long
as ADSs are held through DTC or unless otherwise required by law, ownership of
beneficial interests in the ADR registered in the name of the nominee for DTC
will be shown on, and transfers of such ownership will be effected only through,
records maintained by (i) DTC or its nominee (with respect to the interests of
DTC Participants), or (ii) DTC Participants or their nominees (with respect to
the interests of clients of DTC Participants).
SECTION 2.3 Deposit with Custodian. Subject to the terms and conditions of
this Deposit Agreement and applicable law, Shares or evidence of rights to
receive Shares (other than Restricted Securities) may be deposited by any person
(including the Depositary in its individual capacity but subject, however, in
the case of the Company or any Affiliate of the Company, to Section 5.7 hereof)
at any time, whether or not the transfer books of the Company or the Share
Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Every
deposit of Shares shall be accompanied by the following: (A) (i) in the case of
17
Shares represented by certificates issued in registered form, appropriate
instruments of transfer or endorsement, in a form satisfactory to the Custodian,
(ii) in the case of Shares represented by certificates in bearer form, the
requisite coupons and talons pertaining thereto and (iii) in the case of Shares
delivered by book-entry transfer, confirmation of such book-entry transfer to
the Custodian or that irrevocable instructions have been given to cause such
Shares to be so transferred; (B) such certifications and payments (including,
without limitation, the Depositary's fees and related charges) and evidence of
such payments (including, without limitation, stamping or otherwise marking such
Shares by way of receipt) as may be required by the Depositary or the Custodian
in accordance with the provisions of this Deposit Agreement and applicable law;
(C) if the Depositary so requires, a written order directing the Depositary to
execute and deliver to, or upon the written order of, the person(s) stated in
such order a Receipt or Receipts for the number of American Depositary Shares
representing the Shares so deposited; (D) evidence satisfactory to the
Depositary (which may be an opinion of counsel) that all necessary approvals
have been granted by, or there has been compliance with the rules and
regulations of, the Banco Central do Brasil , the Comissao de Valores
Mobiliarios and any other applicable governmental agency in Brazil; and (E) if
the Depositary so requires, (i) an agreement, assignment or instrument
satisfactory to the Depositary or the Custodian which provides for the prompt
transfer by any person in whose name the Shares are or have been recorded to the
Custodian of any distribution, or right to subscribe for additional Shares or to
receive other property in respect of any such deposited Shares or, in lieu
thereof, such indemnity or other agreement as shall be satisfactory to the
Depositary or the Custodian and (ii) if the Shares are registered in the name of
the person on whose behalf they are presented for deposit, a proxy or proxies
entitling the Custodian to exercise voting rights in respect of the Shares for
any and all purposes until the Shares so deposited are registered in the name of
the Depositary, the Custodian or any nominee.
18
Without limiting any other provision of this Deposit Agreement, the
Depositary shall instruct the Custodian not to, and the Depositary shall not
knowingly, accept for deposit (a) any Restricted Securities nor (b) any
fractional Shares or fractional Deposited Securities nor (c) a number of Shares
or Deposited Securities which upon application of the ADS to Shares ratio would
give rise to fractional ADSs. No Share shall be accepted for deposit unless
accompanied by evidence, if any is required by the Depositary, that is
reasonably satisfactory to the Depositary or the Custodian that all conditions
to such deposit have been satisfied by the person depositing such Shares under
the laws and regulations of Brazil and any necessary approval has been granted
by any applicable governmental body in Brazil, if any, which is then performing
the function of the regulator of currency exchange. The Depositary may issue
ADSs against evidence of rights to receive Shares from the Company, any agent of
the Company or any custodian, registrar, transfer agent, clearing agency or
other entity involved in ownership or transaction records in respect of the
Shares. Such evidence of rights shall consist of written blanket or specific
guarantees of ownership of Shares furnished by the Company or any such
custodian, registrar, transfer agent, clearing agency or other entity involved
in ownership or transaction records in respect of the Shares.
SECTION 2.4 Registration and Safekeeping of Deposited Securities. The
Depositary shall instruct the Custodian upon each Delivery of certificates
representing registered Shares being deposited hereunder with the Custodian (or
other Deposited Securities pursuant to Article IV hereof), together with the
other documents above specified, to present such certificate(s), together with
the appropriate instrument(s) of transfer or endorsement, duly stamped, to the
19
Share Registrar for transfer and registration of the Shares (as soon as transfer
and registration can be accomplished and at the expense of the person for whom
the deposit is made) in the name of the Depositary, the Custodian or a nominee
of either. Deposited Securities shall be held by the Depositary or by the
Custodian for the account and to the order of the Depositary or a nominee, in
each case on behalf of the Holders and Beneficial Owners, at such place or
places as the Depositary or the Custodian shall determine.
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Shares or other Deposited
Securities required to be registered under the provisions of the Securities Act,
unless a registration statement is in effect as to such Shares or other
Deposited Securities, or any Shares or other Deposited Securities the deposit of
which would violate any provisions of the Estatuto Social of the Company.
SECTION 2.5 Execution and Delivery of Receipts. The Depositary has made
arrangements with the Custodian to confirm to the Depositary (i) that a deposit
of Shares has been made pursuant to Section 2.3 hereof, (ii) that any such
Deposited Securities have been recorded in the name of the Depositary, the
Custodian or a nominee of either on the shareholders' register maintained by or
on behalf of the Company by the Share Registrar if registered Shares have been
deposited or, if deposit is made by book-entry transfer, confirmation of such
transfer in the books of Companhia Brasileira de Liquidacao e Custodia, (iii)
that all required documents have been received, and (iv) the person(s) to whom
or upon whose order American Depositary Shares are deliverable in respect
thereof and the number of American Depositary Shares to be so delivered thereby.
Such notification may be made by letter, cable, telex, SWIFT message or, at the
risk and expense of the person making the deposit, by facsimile or other means
of electronic transmission. Upon receiving such notice from the Custodian, the
20
Depositary, subject to the terms and conditions of this Deposit Agreement and
applicable law, shall issue the American Depositary Shares representing the
Shares so deposited to or upon the order of the person(s) named in the notice
delivered to the Depositary and shall execute and deliver at its Principal
Office Receipt(s) registered in the name(s) requested by such person(s) and
evidencing the aggregate number of American Depositary Shares to which such
person(s) are entitled, but only upon payment to the Depositary of the charges
of the Depositary for accepting a deposit, issuing American Depositary Shares
and executing and delivering such Receipt(s) (as set forth in Section 5.9 and
Exhibit B hereto) and all taxes and governmental charges and fees payable in
connection with such deposit and the transfer of the Shares and the issuance of
the Receipt(s). The Depositary shall only issue American Depositary Shares in
whole numbers and deliver American Depositary Receipts evidencing whole numbers
of American Depositary Shares. Nothing herein shall prohibit any Pre-Release
Transaction upon the terms set forth in this Deposit Agreement.
SECTION 2.6 Transfer, Combination and Split-up of Receipts.
(a) Transfer. The Registrar shall register the transfer of Receipts (and
of the ADSs represented thereby) on the books maintained for such purpose and
the Depositary shall cancel such Receipts and execute new Receipts evidencing
the same aggregate number of ADSs as those evidenced by the Receipts canceled by
the Depositary, shall cause the Registrar to countersign such new Receipts and
shall Deliver such new Receipts to or upon the order of the person entitled
thereto, if each of the following conditions has been satisfied: (i) the
Receipts have been duly Delivered by the Holder (or by a duly authorized
attorney of the Holder) to the Depositary at its Principal Office for the
purpose of effecting a transfer thereof, (ii) the surrendered Receipts have been
properly endorsed or are accompanied by proper instruments of transfer
21
(including signature guarantees in accordance with standard securities industry
practice), (iii) the surrendered Receipts have been duly stamped (if required by
the laws of the State of New York or the United States) and (iv) all applicable
fees and charges of, and expenses incurred by, the Depositary and all applicable
taxes and governmental charges (as are set forth in Section 5.9 and Exhibit B
hereto) have been paid, subject, however, in each case, to the terms and
conditions of the applicable Receipts, of the Deposit Agreement and of
applicable law, in each case as in effect at the time thereof.
(b) Combination & Split Up. The Registrar shall register a split-up or
combination of Receipts (and of the ADSs represented thereby) on the books
maintained for such purpose and the Depositary shall cancel such Receipts and
execute new Receipts for the number of ADSs requested, but in the aggregate not
exceeding the number of ADSs evidenced by the Receipts cancelled by the
Depositary, shall cause the Registrar to countersign such new Receipts and shall
Deliver such new Receipts to or upon the order of the Holder thereof, if each of
the following conditions has been satisfied: (i) the Receipts have been duly
Delivered by the Holder (or by a duly authorized attorney of the Holder) to the
Depositary at its Principal Office for the purpose of effecting a split-up or
combination thereof; and (ii) all applicable fees and charges of, and expenses
incurred by, the Depositary and all applicable taxes and governmental charges
(as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject,
however, in each case, to the terms and conditions of the applicable Receipts,
of the Deposit Agreement and of applicable law, in each care as effect at the
time thereof.
(c) Co-Transfer Agents. The Depositary may appoint one or more co-transfer
agents for the purpose of effecting transfers, combinations and split-ups of
Receipts at designated transfer offices on behalf of the Depositary. In carrying
out its functions, a co-transfer agent may require evidence of authority and
22
compliance with applicable laws and other requirements by Holders or persons
entitled to such Receipts and will be entitled to protection and indemnity to
the same extent as the Depositary. Such co-transfer agents may be removed and
substitutes appointed by the Depositary. Each co-transfer agent appointed under
this Section 2.6 (other than the Depositary) shall give notice in writing to the
Depositary accepting such appointment and agreeing to be bound by the applicable
terms of this Deposit Agreement.
SECTION 2.7 Surrender of ADSs and Withdrawal of Deposited Securities.
The Holder of ADSs shall be entitled to Delivery (at the Custodian's
designated office) of the Deposited Securities without unreasonable delay at the
time represented by the ADS(s) upon satisfaction of each of the following
conditions: (i) the Holder (or a duly authorized attorney of the Holder) has
duly Delivered ADSs to the Depositary at its Principal Office (and if
applicable, the Receipts evidencing such ADSs for the purpose of withdrawal of
the Deposited Securities represented thereby; (ii) if so required by the
Depositary, the Receipts Delivered to the Depositary for such purpose have been
properly endorsed in blank or are accompanied by proper instruments of transfer
in blank (including signature guarantees in accordance with standard securities
industry practice), (iii) if so required by the Depositary, the Holder of the
ADSs has executed and delivered to the Depositary a written order directing the
Depositary to cause the Deposited Securities being withdrawn to be Delivered to
or upon the written order of the person(s) designated in such order, and (iv)
all applicable fees and charges of, and expenses incurred by, the Depositary and
all applicable taxes and governmental charges (as are set forth in Section 5.9
and Exhibit B hereof) have been paid, subject, however, in each case, to the
terms and conditions of the Receipts evidencing the surrendered ADSs, of the
Deposit Agreement, of the Company's Estatuto Social and of any applicable laws
and the rules of Companhia Brasileira de Liquidacao e Custodia, now or hereafter
in effect, and to any other provisions of or governing the Deposited Securities,
in each case as in effect at the time thereof.
23
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
Receipts evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so cancelled, together with any certificate
or other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of the Receipts evidencing the ADSs so
cancelled, of the Estatuto Social of the Company, of applicable laws and of the
rules of Companhia Brasileira de Liquidacao e Custodia, and to the terms and
conditions of or governing the Deposited Securities, in each case as in effect
at the time thereof.
The Depositary shall not accept for surrender ADSs representing less than
one Share. The Depositary may, in its discretion, refuse to accept for surrender
a number of ADSs representing a number other than a whole number of Shares. In
the case where the Depositary accepts for surrender of a Receipt evidencing a
number of American ADSs representing other than a whole number of Shares, the
Depositary shall cause ownership of the appropriate whole number of Shares to be
Delivered in accordance with the terms hereof, and shall, at the discretion of
the Depositary, either (i) return to the person surrendering such ADSs the
number of ADSs representing any remaining fractional Share, or (ii) sell or
24
cause to be sold the fractional Shares represented by the ADSs so surrendered
and remit the proceeds of such sale (net of (a) applicable fees and charges of,
and expenses incurred by, the Depositary and (b) taxes withheld) to the person
surrendering the ADSs.
Notwithstanding anything else contained in any Receipt or the Deposit
Agreement, the Depositary may make delivery at the Principal Office of the
Depositary of (i) any cash dividends or cash distributions, or (ii) any proceeds
from the sale of any distributions of shares or rights, which are at the time
held by the Depositary in respect of the Deposited Securities represented by the
ADSs surrendered for cancellation and withdrawal. At the request, risk and
expense of any Holder so surrendering ADSs, and for the account of such Holder,
the Depositary shall direct the Custodian to forward (to the extent permitted by
law) any cash or other property (other than securities) held by the Custodian in
respect of the Deposited Securities represented by such ADSs to the Depositary
for delivery at the Principal Office of the Depositary. Such direction shall be
given by letter or, at the request, risk and expense of such Holder, by cable,
telex or facsimile transmission.
SECTION 2.8 Limitations on Execution and Delivery, Transfer, etc. of
Receipts; Suspension of Delivery, Transfer, etc.
(a) Additional Requirements. As a condition precedent to the execution and
delivery, registration, registration of issuance or transfer, split-up,
combination or surrender of any Receipt, the delivery of any distribution
thereon, or the withdrawal of any Deposited Securities, the Depositary or the
Custodian may require (i) payment from the depositor of Shares or presenter of
ADSs or of a Receipt of a sum sufficient to reimburse it for any tax or other
governmental charge and any stock transfer or registration fee with respect
thereto (including any such tax or charge and fee with respect to Shares being
deposited or withdrawn) and payment of any applicable fees and charges of the
25
Depositary as provided in Section 5.9 and Exhibit B hereof, (ii) the production
of proof satisfactory to it as to the identity and genuineness of any signature
or any other matter contemplated by Section 3.1 hereof and (iii) compliance with
(A) any laws or governmental regulations relating to the execution and delivery
of Receipts or ADSs or to the withdrawal of Deposited Securities and (B) such
reasonable regulations as the Depositary and the Company may establish
consistent with the provisions of the applicable Receipt, this Deposit Agreement
and applicable law.
(b) Additional Limitations. The issuance of ADSs against deposits of
Shares generally or against deposits of particular Shares may be suspended, or
the deposit of particular Shares may be refused, or the registration of transfer
of Receipts in particular instances may be refused, or the registration of
transfers of Receipts generally may be suspended, during any period when the
transfer books of the Company, the Depositary, a Registrar or the Share
Registrar are closed or if any such action is deemed necessary or advisable by
the Depositary or the Company, in good faith, at any time or from time to time
because of any requirement of law, any government or governmental body or
commission or any securities exchange on which the ADSs or Shares are listed, or
under any provision of this Deposit Agreement or the applicable Receipt(s) or
under any provision of, or governing, the Deposited Securities, or because of
any meeting of shareholders of the Company or for any other reason, subject, in
all cases, to Section 7.8 hereof.
(c) Regulatory Restrictions. Notwithstanding any provision of this Deposit
Agreement or any Receipt(s) to the contrary, the Holders of Receipts are
entitled to surrender outstanding ADSs to withdraw the Deposited Securities at
any time subject only to (i) temporary delays caused by closing the transfer
books of the Depositary or the Company or the deposit of Shares in connection
26
with voting at a shareholders' meeting or the payment of dividends, (ii) the
payment of fees, taxes and similar charges, (iii) compliance with any U.S. or
foreign laws or governmental regulations relating to the Receipts or to the
withdrawal of the Deposited Securities, and (iv) other circumstances
specifically contemplated by Section I.A.(l) of the General Instructions to Form
F-6 (as such General Instructions may be amended from time to time).
SECTION 2.9 Lost Receipts, etc. In case any Receipt shall be mutilated,
destroyed, lost, or stolen, the Depositary shall execute and deliver a new
Receipt of like tenor at the expense of the Holder (a) in the case of a
mutilated Receipt, in exchange of and substitution for such mutilated Receipt
upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen
Receipt, in lieu of and in substitution for such destroyed, lost, or stolen
Receipt, after the Holder thereof has (i) submitted to the Depositary a written
request for such exchange and substitution before the Depositary has notice that
the Receipt has been acquired by a bona fide purchaser, (ii) provided such
security or indemnity (including an indemnity bond) as may be required by the
Depositary to save it and any of its agents harmless and (iii) satisfied any
other reasonable requirements imposed by the Depositary, including, without
limitation, evidence satisfactory to the Depositary of such destruction, loss or
theft of such Receipt, the authenticity thereof and the Holder's ownership
thereof.
SECTION 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records. All Receipts surrendered to the Depositary shall be
canceled by the Depositary. Canceled Receipts shall not be entitled to any
benefits under this Deposit Agreement or be valid or enforceable against the
Depositary for any purpose. The Depositary is authorized to destroy Receipts so
canceled, provided the Depositary maintains a record of all destroyed Receipts.
27
Any ADSs held in book-entry form (i.e., through accounts at DTC) shall be
deemed canceled when the Depositary causes the number of ADSs evidenced by the
Balance Certificate to be reduced by the number of ADSs surrendered (without the
need to physically destroy the Balance Certificate).
SECTION 2.11 Partial Entitlement ADSs. In the event any Shares are
deposited which entitle the holders thereof to receive a per-share distribution
or other entitlement in an amount different from the Shares then on deposit (the
Shares then on deposit collectively, "Full Entitlement Shares" and the Shares
with different entitlement, "Partial Entitlement Shares"), the Depositary shall
(i) cause the Custodian to hold Partial Entitlement Shares separate and distinct
from Full Entitlement Shares, and (ii) subject to the terms of this Deposit
Agreement, issue ADSs and deliver ADRs representing Partial Entitlement Shares
which are separate and distinct from the ADSs and ADRs representing Full
Entitlement Shares, by means of separate CUSIP numbering and legending (if
necessary) ("Partial Entitlement ADSs/ADRs" and "Full Entitlement ADSs/ADRs",
respectively). If and when Partial Entitlement Shares become Full Entitlement
Shares, the Depositary shall (a) give notice thereof to Holders of Partial
Entitlement ADSs and give Holders of Partial Entitlement ADRs the opportunity to
exchange such Partial Entitlement ADRs for Full Entitlement ADRs, (b) cause the
Custodian to transfer the Partial Entitlement Shares into the account of the
Full Entitlement Shares, and (c) take such actions as are necessary to remove
the distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one
hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and
Beneficial Owners of Partial Entitlement ADSs shall only be entitled to the
28
entitlements of Partial Entitlement Shares. Holders and Beneficial Owners of
Full Entitlement ADSs shall be entitled only to the entitlements of Full
Entitlement Shares. All provisions and conditions of this Deposit Agreement
shall apply to Partial Entitlement ADRs and ADSs to the same extent as Full
Entitlement ADRs and ADSs, except as contemplated by this Section 2.11. The
Depositary is authorized to take any and all other actions as may be necessary
(including, without limitation, making the necessary notations on Receipts) to
give effect to the terms of this Section 2.11. The Company agrees to give timely
written notice to the Depositary if any Shares issued or to be issued are
Partial Entitlement Shares and shall assist the Depositary with the
establishment of procedures enabling the identification of Partial Entitlement
Shares upon Delivery to the Custodian.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF ADSs
SECTION 3.1 Proofs, Certificates and Other Information. Any person
presenting Shares for deposit, any Holder and any Beneficial Owner may be
required, and every Holder and Beneficial Owner agrees, from time to time to
provide to the Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approval, legal or beneficial ownership
of ADSs and Deposited Securities, compliance with applicable laws and the terms
of this Deposit Agreement or the Receipt(s) evidencing the ADS(s) and the
provisions of, or governing, the Deposited Securities; to execute such
certifications and to make such representations and warranties, and to provide
such other information and documentation (or, in the case of Shares in
registered form presented for deposit, such information relating to the
registration on the books of the Company or of the Share Registrar) as the
Depositary or the Custodian may deem necessary or proper or as the Company may
29
reasonably require by written request to the Depositary consistent with its
obligations under this Deposit Agreement and the applicable Receipt(s). The
Depositary and the Registrar, as applicable, may withhold the execution or
delivery or registration of transfer of any Receipt or the distribution or sale
of any dividend or distribution of rights or of the proceeds thereof, or to the
extent not limited by the terms of Section 7.8 hereof, the delivery of any
Deposited Securities until such proof or other information is filed or such
certifications are executed, or such representations are made, or such other
documentation or information provided, in each case to the Depositary's, the
Registrar's and the Company's satisfaction. The Depositary shall provide the
Company, in a timely manner, with copies or originals if necessary and
appropriate of (i) any such proofs of citizenship or residence, taxpayer status,
or exchange control approval which it receives from Holders and Beneficial
Owners, and (ii) any other information or documents which the Company may
reasonably request and which the Depositary shall request and receive from any
Holder or Beneficial Owner or any person presenting Shares for deposit or ADSs
for cancellation, transfer or withdrawal. Nothing herein shall obligate the
Depositary to (i) obtain any information for the Company if not provided by the
Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the
information so provided by the Holders or Beneficial Owners.
SECTION 3.2 Liability for Taxes and Other Charges. If any tax or other
governmental charge shall become payable with respect to any ADR or any
Deposited Securities or ADSs, such tax or other governmental charge shall be
payable by the Holders and Beneficial Owners to the Depositary. The Company, the
Custodian and/or the Depositary may withhold or deduct from any distributions
made in respect of Deposited Securities and may sell for the account of a Holder
and/or Beneficial Owner any or all of the Deposited Securities and apply such
30
distributions and sale proceeds in payment of such taxes (including applicable
interest and penalties) or charges, with the Holder and the Beneficial Owner
remaining fully liable for any deficiency. The Custodian may refuse the deposit
of Shares, and the Depositary may refuse to issue ADSs, to deliver ADRs,
register the transfer, split-up or combination of ADRs and (subject to Section
7.8) the withdrawal of Deposited Securities, until payment in full of such tax,
charge, penalty or interest is received. Every Holder and Beneficial Owner
agrees to indemnify the Depositary, the Company, the Custodian, and each of
their respective agents; officers, directors, employees and Affiliates for, and
to hold each of them harmless from, any claims with respect to taxes (including
applicable interest and penalties thereon) arising from any tax benefit obtained
for such Holder and/or Beneficial Owner.
SECTION 3.3 Representations and Warranties on Deposit of Shares. Each
person depositing Shares under the Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Shares and the certificates therefor are
duly authorized, validly issued, fully paid, non-assessable and were legally
obtained by such person, (ii) all preemptive (and similar) rights, if any, with
respect to such Shares have been validly waived or exercised, (iii) the person
making such deposit is duly authorized so to do, (iv) the Shares presented for
deposit are free and clear of any lien, encumbrance, security interest, charge,
mortgage or adverse claim, and are not, and the American Depositary Shares
issuable upon such deposit will not be, Restricted Securities and (v) the Shares
presented for deposit have not been stripped of any rights or entitlements. Such
representations and warranties shall survive the deposit and withdrawal of
Shares, the issuance and cancellation of American Depositary Shares in respect
thereof and the transfer of such American Depositary Shares. If any such
representations or warranties are false in any way, the Company and the
Depositary shall be authorized, at the cost and expense of the person depositing
Shares, to take any and all actions necessary to correct the consequences
thereof.
31
SECTION 3.4 Compliance with Information Requests. Notwithstanding any
other provision of this Deposit Agreement or any Receipt(s), each Holder and
Beneficial Owner agrees to comply with requests from the Company pursuant to
Brazilian law, the rules and requirements of the Sao Paulo Stock Exchange, and
any other stock exchange on which the Shares or ADSs are, or will be,
registered, traded or listed or the Estatuto Social of the Company, which are
made to provide information, inter alia, as to the capacity in which such Holder
or Beneficial Owner owns ADSs, (and Shares as the case may be) and regarding the
identity of any other person(s) interested in such ADSs, and the nature of such
interest and various other matters, whether or not they are Holders and/or
Beneficial Owners at the time of such request. The Depositary agrees to use its
reasonable efforts to forward, upon the request of the Company and at the
Company's expense, any such request from the Company to the Holders and to
forward to the Company any such responses to such requests received by the
Depositary.
SECTION 3.5 Ownership Restrictions. Notwithstanding any other provision in
this Deposit Agreement or any Receipt, the Company may restrict transfers of the
Shares where such transfer might result in ownership of Shares exceeding limits
imposed by applicable law or the Estatuto Social of the Company. The Company may
also restrict, in such manner as it deems appropriate, transfers of the American
Depositary Shares where such transfer may result in the total number of Shares
represented by the American Depositary Shares owned by a single Holder or
Beneficial Owner to exceed any such limits. The Company may, in its sole
discretion but subject to applicable law, instruct the Depositary to take action
with respect to the ownership interest of any Holder or Beneficial Owner in
excess of the limits set forth in the preceding sentence, including, but not
32
limited to, the imposition of restrictions on the transfer of American
Depositary Shares, the removal or limitation of voting rights or the mandatory
sale or disposition on behalf of a Holder or Beneficial Owner of the Shares
represented by the American Depositary Shares held by such Holder or Beneficial
Owner in excess of such limitations, if and to the extent such disposition is
permitted by applicable law and the Estatuto Social of the Company.
ARTICLE IV
THE DEPOSITED SECURITIES
SECTION 4.1 Cash Distributions. Whenever the Depositary receives
confirmation from the Custodian of the receipt of any cash dividend or other
cash distribution on any Deposited Securities, or receives proceeds from the
sale of any Deposited Securities or any other entitlements held in respect of
Deposited Securities under the terms hereof, the Depositary will (i) if at the
time of receipt thereof any amounts received in a Foreign Currency can in the
judgment of the Depositary (pursuant to Section 4.8 hereof) be converted on a
practicable basis into Dollars transferable to the United States, promptly
convert or cause to be converted such cash dividend, distribution or proceeds
into Dollars (on the terms described in Section 4.8), (ii) if applicable,
establish the ADS Record Date upon the terms described in Section 4.9 and (iii)
distribute promptly the amount thus received (net of (a) the applicable fees and
charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to
the Holders entitled thereto as of the ADS Record Date in proportion to the
number of ADSs held by such Holders respectively as of the ADS Record Date. The
Depositary shall distribute only such amount, however, as can be distributed
without attributing to any Holder a fraction of one cent, and any balance not so
distributed shall be held by the Depositary (without liability for interest
thereon) and shall be added to and become part of the next sum received by the
Depositary for distribution to Holders of ADSs outstanding at the time of the
next distribution. If the Company, the Custodian or the Depositary is required
33
to withhold and does withhold from any cash dividend or other cash distribution
in respect of any Deposited Securities an amount on account of taxes, duties or
other governmental charges, the amount distributed to Holders on the ADSs
representing such Deposited Securities shall be reduced accordingly. Such
withheld amounts shall be forwarded by the Company, the Custodian or the
Depositary to the relevant governmental authority. Evidence of payment thereof
by the Company shall be forwarded by the Company to the Depositary upon request.
SECTION 4.2 Distribution in Shares. If any distribution upon any Deposited
Securities consists of a dividend in, of free distribution of, Shares, the
Company shall cause such Shares to be deposited with the Custodian and
registered, as the case may be, in the name of the Depositary, the Custodian or
any of their respective nominees. Upon receipt of confirmation of such deposit
from the Custodian, the Depositary shall establish the ADS Record Date upon the
terms described in Section 4.9 and either (i) the Depositary shall, subject to
Section 5.9 hereof, distribute to the Holders as of the ADS Record Date in
proportion to the number of American Depositary Shares held as of the ADS Record
Date, additional American Depositary Shares, which represent in the aggregate
the number of Shares received as such dividend, or free distribution, subject to
the other terms of this Deposit Agreement (including, without limitation, (a)
the applicable fees and charges of, and expenses incurred by, the Depositary and
(b) taxes), or (ii) if additional American Depositary Shares are not so
distributed, each American Depositary Share issued and outstanding after the ADS
Record Date shall, to the extent permissible by law, thenceforth also represent
rights and interests in the additional integral number of Shares distributed
upon the Deposited Securities represented thereby (net of (a) the applicable
fees and charges of, and expenses incurred by, the Depositary and (b) taxes). In
34
lieu of delivering fractional American Depositary Shares, the Depositary shall
sell the number of Shares or American Depositary Shares, as the case may be,
represented by the aggregate of such fractions and distribute the net proceeds
upon the terms described in Section 4.1. In the event that the Depositary
determines that any distribution in property (including Shares) is subject to
any tax or other governmental charges which the Depositary is obligated to
withhold, or, if the Company, in the fulfillment of its obligation under Section
5.7 hereof, has furnished an opinion of U.S. counsel determining that Shares
must be registered under the Securities Act or other laws in order to be
distributed to Holders (and no such registration statement has been declared
effective), the Depositary may dispose of all or a portion of such property
(including Shares and rights to subscribe therefor) in such amounts and in such
manner, including by public or private sale, as the Depositary deems necessary
and practicable, and the Depositary shall distribute the net proceeds of any
such sale (after deduction of applicable (a) taxes and (b) fees and charges of,
and expenses incurred by, the Depositary) to Holders entitled thereto upon the
terms described in Section 4.1. The Depositary shall hold and/or distribute any
unsold balance of such property in accordance with the provisions of this
Deposit Agreement.
SECTION 4.3 Elective Distributions in Cash or Shares. Whenever the Company
intends to distribute a dividend payable at the election of the holders of
Shares in cash or in additional Shares, the Company shall give notice thereof to
the Depositary at least 60 days prior to the proposed distribution stating
whether or not it wishes such elective distribution to be made available to
Holders of ADSs. Upon receipt of notice indicating that the Company wishes such
elective distribution to be made available to Holders of ADSs, the Depositary
shall consult with the Company to determine, and the Company shall assist the
Depositary in its determination, whether it is lawful and reasonably practicable
to make such elective distribution available to the Holders of ADSs. The
35
Depositary shall make such elective distribution available to Holders only if
(i) the Depositary shall have determined that such distribution is reasonably
practicable and (ii) the Depositary shall have received satisfactory
documentation within the terms of Section 5.7. If the above conditions are not
satisfied, the Depositary shall, to the extent permitted by law, distribute to
the Holders, on the basis of the same determination as is made in the local
market in respect of the Shares for which no election is made, either (x) cash
upon the terms described in Section 4.1 or (y) additional ADSs representing such
additional Shares upon the terms described in Section 4.2. If the above
conditions are satisfied, the Depositary shall establish an ADS Record Date (on
the terms described in Section 4.9) and establish procedures to enable Holders
to elect the receipt of the proposed dividend in cash or in additional ADSs. The
Company shall assist the Depositary in establishing such procedures to the
extent necessary. If a Holder elects to receive the proposed dividend (x) in
cash, the dividend shall be distributed upon the terms described in Section 4.1,
or (y) in ADSs, the dividend shall be distributed upon the terms described in
Section 4.2. Nothing herein shall obligate the Depositary to make available to
Holders a method to receive the elective dividend in Shares (rather than ADSs).
It is understood and agreed that Holders generally, or any Holder in particular,
may not be given the opportunity to receive elective distributions on the same
terms and conditions as the holders of Shares.
SECTION 4.4 Distribution of Rights to Purchase Additional ADSs.
(a) Distribution to ADS Holders. Whenever the Company intends to
distribute to the holders of the Deposited Securities rights to subscribe for
additional Shares or rights of any other nature, the Company shall give notice
thereof to the Depositary prior to the proposed distribution stating whether or
not it wishes such rights to be made available to Holders of ADSs. Upon receipt
36
of a notice indicating that the Company wishes such rights to be made available
to Holders of ADSs, the Depositary shall consult with the Company to determine,
and the Company shall assist the Depositary in its determination, whether it is
lawful and reasonably practicable to make such rights available to the Holders.
The Depositary shall make such rights available to Holders only if (i) the
Company shall have timely requested that such rights be made available to
Holders, (ii) the Depositary shall have received satisfactory documentation
within the terms of Section 5.7 and (iii) the Depositary shall have determined
that such distribution of rights is reasonably practicable. In the event any of
the conditions set forth above are not satisfied or if the Company requests that
the rights not be made available to Holders of ADSs, the Depositary shall
proceed with the sale of the rights as contemplated in Section 4.4(b) below. In
the event all conditions set forth above are satisfied, the Depositary shall
establish an ADS Record Date (upon the terms described in Section 4.9) and
establish procedures to (x) distribute the rights to purchase additional ADSs
(by means of warrants or otherwise), (y) enable the Holders to exercise such
rights (upon payment of the subscription price and of the applicable (a) fees
and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z)
to deliver ADSs upon the valid exercise of such rights. The Company shall assist
the Depositary to the extent necessary in establishing such procedures. Nothing
herein shall obligate the Depositary to make available to the Holders a method
to exercise such rights to subscribe for Shares (rather than ADSs).
(b) Sale of Rights. If (i) the Company does not timely request the
Depositary to make the rights available to Holders or requests that the rights
not be made available to Holders, (ii) the Depositary fails to receive
satisfactory documentation within the terms of Section 5.7 or determines it s
not reasonably practicable to make the rights available to Holders or (iii) any
37
rights made available are not exercised and appear to be about to lapse, the
Depositary shall determine whether it is lawful and reasonably practicable to
sell such rights, in a riskless principal capacity, at such place and upon such
terms (including public or private sale) as it may deem practical. The Company
shall assist the Depositary to the extent necessary to determine such legality
and practicability. The Depositary shall, upon such sale, convert and distribute
proceeds of such sale (net of applicable (a) fees and charges of, and expenses
incurred by, the Depositary and (b) taxes) upon the terms set forth in Section
4.1.
(c) Lapse of Rights. If the Depositary is unable to make any rights
available to Holders upon the terms described in Section 4.4(a) or to arrange
for the sale of the rights upon the terms described in Section 4.4(b), the
Depositary shall allow such rights to lapse.
The Depositary shall not be responsible for (i) any failure to determine
that it may be lawful or practicable to make such rights available to Holders in
general or any Holders in particular, (ii) any foreign exchange exposure or loss
incurred in connection with such sale, or exercise or (iii) the content of any
materials forwarded to the Holders on behalf of the Company in connection with
the rights distribution.
Notwithstanding anything to the contrary in this Section 4.4, if
registration (under the Securities Act or any other applicable law) of the
rights or the securities to which any rights relate may be required in order for
the Company to offer such rights or such securities to Holders and to sell the
securities represented by such rights, the Depositary will not distribute such
rights to the Holders (i) unless and until a registration statement under the
Securities Act (or other applicable law) covering such offering is in effect or
(ii) unless the Company furnishes the Depositary opinion(s) of counsel for the
Company in the United States and counsel to the Company in any other applicable
country in which rights would be distributed, in each case satisfactory to the
38
Depositary, or other evidence satisfactory to the Depositary, to the effect that
the offering and sale of such securities to Holders and Beneficial Owners are
exempt from, or do not require registration under, the provisions of the
Securities Act or any other applicable laws.
In the event that the Company, the Depositary or the Custodian shall be
required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of American Depositary Shares representing
such Deposited Securities shall be reduced accordingly. In the event that the
Depositary determines that any distribution in property (including Shares and
rights to subscribe therefor) is subject to any tax or other governmental
charges which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares and rights to
subscribe therefor) in such amounts and in such manner, including by public or
private sale, as the Depositary deems necessary and practicable to pay any such
taxes or charges. Because Brazilian law presently does not contemplate the
issuance of rights in negotiable form and the possibility of such issuance is
unlikely, a liquid market for rights may not exist, and this may adversely
affect (1) the ability of the Depositary to dispose of such rights or (2) the
amount the Depositary would realize upon disposal of rights.
It is understood and agreed that Holders generally, or any Holder in
particular, may not be given the opportunity to receive or exercise rights on
the same terms and conditions as the holders of Shares or be able to exercise
such rights. Nothing herein shall obligate the Company to file any registration
statement in respect of any rights or Shares or other securities to be acquired
upon the exercise of such rights.
39
SECTION 4.5 Distributions Other Than Cash, Shares or Rights to Purchase
Shares.
(a) Whenever the Company intends to distribute to the holders of Deposited
Securities property other than cash, Shares or rights to purchase additional
Shares, the Company shall give timely notice thereof to the Depositary and shall
indicate whether or not it wishes such distribution to be made to Holders of
ADSs. Upon receipt of a notice indicating that the Company wishes such
distribution be made to Holders of ADSs, the Depositary shall consult with the
Company, and the Company shall assist the Depositary, to determine whether such
distribution to Holders is lawful and reasonably practicable. The Depositary
shall not make such distribution unless (i) the Company shall have requested the
Depositary to make such distribution to Holders, (ii) the Depositary shall have
received satisfactory documentation within the terms of Section 5.7, and (iii)
the Depositary shall have determined that such distribution is reasonably
practicable.
(b) Upon receipt of satisfactory documentation and the request of the
Company to distribute property to Holders of ADSs and after making the requisite
determinations set forth in (a) above, the Depositary shall distribute the
property so received to the Holders of record, as of the ADS Record Date, in
proportion to the number of ADSs held by them respectively and in such manner as
the Depositary may deem practicable for accomplishing such distribution (i) upon
receipt of payment or net of the applicable fees and charges of, and expenses
incurred by, the Depositary, and (ii) net of any taxes withheld. The Depositary
may dispose of all or a portion of the property so distributed and deposited, in
such amounts and in such manner (including public or private sale) as the
40
Depositary may deem practicable or necessary to satisfy any taxes (including
applicable interest and penalties) or other governmental charges applicable to
the distribution.
(c) If (i) the Company does not request the Depositary to make such
distribution to Holders or requests not to make such distribution to Holders,
(ii) the Depositary does not receive satisfactory documentation within the terms
of Section 5.7, or (iii) the Depositary determines that all or a portion of such
distribution is not reasonably practicable, the Depositary shall sell or cause
such property to be, sold in a public or private sale, at such place or places
and upon such terms as it may deem practicable and shall (i) cause the proceeds
of such sale, if any, to be converted into Dollars and (ii) distribute the
proceeds of such conversion received by the Depositary (net of applicable (a)
fees and charges of, and expenses incurred by, the Depositary and (b) taxes) to
the Holders as of the ADS Record Date upon the terms of Section 4.1. If the
Depositary is unable to sell such property, the Depositary may dispose of such
property for the account of the Holders in any way it deems reasonably
practicable under the circumstances.
SECTION 4.6 Distributions with Respect to Deposited Securities in Bearer
Form. Subject to the terms of this Article IV, distributions in respect of
Deposited Securities that are held by the Depositary in bearer form shall be
made to the Depositary for the account of the respective Holders of Receipts
with respect to which any such distribution is made upon due presentation by the
Depositary or the Custodian to the Company of any relevant coupons, talons, or
certificates. The Company shall promptly notify the Depositary of such
distributions. The Depositary or the Custodian shall promptly present such
coupons, talons or certificates, as the case may be, in connection with any such
distribution.
41
SECTION 4.7 Redemption. If the Company intends to exercise any right of
redemption in respect of any of the Deposited Securities, the Company shall give
notice thereof to the Depositary at least 30 days prior to the intended date of
redemption, which notice shall set forth the particulars of the proposed
redemption. Upon receipt of (i) such notice and (ii) satisfactory documentation
given by the Company to the Depositary within the terms of Section 5.7, and only
if the Depositary shall have determined that such proposed redemption is
practicable, the Depositary shall provide to each Holder a notice setting forth
the intended exercise by the Company of the redemption rights and any other
particulars set forth in the Company's notice to the Depositary. The Depositary
shall instruct the Custodian to present to the Company the Deposited Securities
in respect of which redemption rights are being exercised against payment of the
applicable redemption price. Upon receipt of confirmation from the Custodian
that the redemption has taken place and that funds representing the redemption
price have been received, the Depositary shall convert, transfer and distribute
the proceeds (net of applicable (a) fees and charges of, and the expenses
incurred by, the Depositary, and (b) taxes), retire ADSs and cancel ADRs upon
delivery of such ADSs by Holders thereof and the terms set forth in Sections 4.1
and 6.2 hereof. If less than all outstanding Deposited Securities are redeemed,
the ADSs to be retired will be selected by lot or on a pro rata basis, as may be
determined by the Depositary. The redemption price per ADS shall be the per
share amount received by the Depositary upon the redemption of the Deposited
Securities represented by American Depositary Shares (subject to the terms of
Section 4.8 hereof and the applicable (a) fees and charges of, and expenses
incurred by, the Depositary, and (b) taxes) multiplied by the number of
Deposited Securities represented by each ADS redeemed.
42
SECTION 4.8 Conversion of Foreign Currency. Whenever the Depositary or the
Custodian shall receive Foreign Currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, which in the judgment of the Depositary such Foreign Currency can at
such time be converted on a practicable basis, by sale or in any other manner
that it may determine in accordance with applicable law, into Dollars
transferable to the United States and distributable to the Holders entitled
thereto, the Depositary shall convert or cause to be converted, by sale or in
any other manner that it may determine, such Foreign Currency into Dollars, and
shall distribute such Dollars (net of any applicable fees, any reasonable and
customary expenses incurred in such. conversion and any expenses incurred on
behalf of the Holders in complying with currency exchange control or other
governmental requirements) in accordance with the terms of the applicable
sections of this Deposit Agreement. If the Depositary shall have distributed
warrants or other instruments that entitle the holders thereof to such Dollars,
the Depositary shall distribute such Dollars to the holders of such warrants
and/or instruments upon surrender thereof for cancellation, in either case
without liability for interest thereon. Such distribution may be made upon an
averaged or other practicable basis without regard to any distinctions among
Holders on account of any application of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary shall have authority to file such
application for approval or license, if any, as it may deem desirable. In no
event, however, shall the Depositary be obligated to make such a filing.
If at any time the Depositary shall determine that in its judgment the
conversion of any Foreign Currency and the transfer and distribution of proceeds
of such conversion received by the Depositary is not practical or lawful, or if
43
any approval or license of any governmental authority or agency thereof that is
required for such conversion, transfer and distribution is denied or, in the
opinion of the Depositary, not obtainable at a reasonable cost or within a
reasonable period, the Depositary may, in its sole discretion, take one or more
of the following actions: (i) make such conversion and distribution in Dollars
to the Holders for whom such conversion, transfer and distribution is lawful and
practicable; (ii) distribute the Foreign Currency (or an appropriate document
evidencing the right to receive such Foreign Currency) to Holders for whom such
distribution is lawful and practicable; or (iii) hold (or cause the Custodian to
hold) such Foreign Currency (without liability for interest thereon) for the
respective accounts of the Holders entitled to receive the same.
SECTION 4.9 Fixing of ADS Record Date. Whenever the Depositary shall
receive notice of the fixing of a record date by the Company for the
determination of holders of Deposited Securities entitled to receive any
distribution (whether in cash, Shares, rights, or other distribution), or
whenever for any reason the Depositary causes a change in the number of Shares
that are represented by each American Depositary Share, or whenever the
Depositary shall receive notice of any meeting of, or solicitation of consents
or of proxies, of holders of Shares or other Deposited Securities, or whenever
the Depositary shall find it necessary or convenient in connection with the
giving of any notice, solicitation of any consent or any other matter, the
Depositary shall, after consultation with the Company, fix a record date (the
"ADS Record Date") for the determination of the Holders of Receipts who shall be
entitled to receive such distribution, to give instructions for the exercise of
voting rights at any such meeting, or to give or withhold such consent, or to
receive such notice or solicitation or to otherwise take action, or to exercise
the rights of Holders with respect to such changed number of Shares represented
by each American Depositary Share. The Depositary shall make reasonable efforts
44
to establish the ADS Record Date as closely as possible to the record date
applicable to the Deposited Securities (if any) set by the Company in Brazil.
Subject to applicable law and the provisions of Section 4.1 through 4.8 and to
the other terms and conditions of this Deposit Agreement, only the Holders of
record at the close of business in New York on such ADS Record Date shall be
entitled to receive such distribution, to give such voting instructions, to
receive such notice or solicitation, or otherwise take action.
SECTION 4.10 Voting of Deposited Securities. The Shares are non-voting,
except in certain limited circumstances. The following provisions of this
Section 4.10 shall apply solely in those circumstances in which the Shares are
entitled to vote.
As soon as practicable after receipt of notice of any meeting at which the
holders of Deposited Securities are entitled to vote, or of solicitation of
consents or proxies from holders of Deposited Securities, the Depositary shall
fix the ADS Record Date in respect of such meeting or solicitation of consent or
proxy in accordance with Section 4.9. The Depositary shall, if requested by the
Company in writing in a timely manner (the Depositary having no obligation to
take any further action if the request shall not have been received by the
Depositary at least 30 days prior to the date of such vote or meeting), at the
Company's expense and provided no U.S. legal prohibitions exist, distribute to
Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of
consent or proxy; (b) a statement that the Holders at the close of business on
the ADS Record Date will be entitled, subject to any applicable law, the
provisions of this Deposit Agreement, the Estatuto Social of the Company and the
provisions of or governing the Deposited Securities (which provisions, if any,
shall be summarized in pertinent part by the Company), to instruct the
45
Depositary as to the exercise of the voting rights, if any, pertaining to the
Deposited Securities represented by such Holder's ADSs; and (c) a brief
statement as to the manner in which such voting instructions may be given,
including a statement setting forth the action to be taken by the Depositary if
voting instructions are received that fail to specify the manner in which such
Holder's ADS(s) are to be voted. Voting instructions may be given only in
respect of a number of ADSs representing an integral number of Deposited
Securities. Upon the timely receipt from a Holder of ADSs as of the ADS Record
Date of voting instructions in the manner specified by the Depositary, the
Depositary shall endeavor, insofar as practicable and permitted under applicable
law; the provisions of this Deposit Agreement, the provisions of the Estatuto
Social of the Company and the provisions of or governing the Deposited
Securities, to vote, or cause the Custodian to vote, the Deposited Securities
(in person or by proxy) represented by such Holder's ADSs in accordance with
such voting instructions.
Neither the Depositary nor the Custodian shall under any circumstances
exercise any discretion as to voting, and neither the Depositary nor the
Custodian shall vote, attempt to exercise the right to vote, or in any way make
use of, for purposes of establishing a quorum or otherwise, the Deposited
Securities represented by ADSs, except pursuant to and in accordance with the
voting instructions timely received from Holders or as otherwise contemplated
herein. If the Depositary timely receives voting instructions from a Holder that
fail to specify the manner in which the Depositary is to vote the Deposited
Securities represented by such Holder's ADSs, the Depositary will deem such
Holder (unless otherwise specified in the notice distributed to Holders) to have
instructed the Depositary to vote in favor of the items set forth in such voting
instructions. Deposited Securities represented by ADSs for which no timely
voting instructions are received by the Depositary from the Holder shall not be
voted.
46
Notwithstanding anything else contained herein, the Depositary shall, if
so requested in writing by the Company, represent all Deposited Securities
(whether or not voting instructions have been received in respect of such
Deposited Securities from Holders as of the ADS Record Date) for the sole
purpose of establishing quorum at a meeting of shareholders.
Notwithstanding anything else contained in this Deposit Agreement or any
Receipt, the Depositary shall not have any obligation to take any action with
respect to any meeting, or solicitation of consents or proxies, of holders of
Deposited Securities if the taking of such action would violate U.S. laws. The
Company agrees to take any and all actions reasonably necessary to enable
Holders and Beneficial Owners to exercise the voting rights accruing to the
Deposited Securities and to deliver to the Depositary an opinion of U.S. counsel
addressing any actions requested to be taken if so requested by the Depositary.
It is understood and agreed that Holders generally or any Holder in particular
may not receive the notice described above with sufficient time to enable the
Holder to return voting instructions to the Depositary in a timely manner.
SECTION 4.11 Changes Affecting Deposited Securities. Upon any change in
nominal or par value, split-up, cancellation, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger or consolidation or sale of assets affecting the Company
or to which it is otherwise a party, any securities which shall be received by
the Depositary or the Custodian in exchange for, or in conversion of or
replacement of or otherwise in respect of, such Deposited Securities shall, to
the extent permitted by law, be treated as new Deposited Securities under this
Deposit Agreement, and the Receipts shall, subject to the provisions of this
Deposit Agreement and applicable law, evidence ADSs representing the right to
receive such additional securities. Alternatively, the Depositary may, with the
47
Company's approval, and shall, if the Company shall so request, subject to the
terms of the Deposit Agreement and receipt of an opinion of counsel to the
Company satisfactory to the Depositary that such distributions are not in
violation of any applicable laws or regulations, execute and deliver additional
Receipts as in the case of a stock dividend on the Shares, or call for the
surrender of outstanding Receipts to be exchanged for new Receipts, in either
case, as well as in the event of newly deposited Shares, with necessary
modifications to the form of Receipt contained in Exhibit A hereto, specifically
describing such new Deposited Securities and/or corporate change. The Company
agrees to, jointly with the Depositary, amend the Registration Statement on Form
F-6 as filed with the Commission to permit the issuance of such new form of
Receipts. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders, the Depositary
may, with the Company's approval, and shall, if the Company requests, subject to
receipt of an opinion of Company's counsel satisfactory to the Depositary that
such action is not in violation of any applicable laws or regulations, sell such
securities at public or private sale, at such place or places and upon such
terms as it may deem proper and may allocate the net proceeds of such sales (net
of (a) fees and charges of, and expenses incurred by, the Depositary and (b)
taxes) for the account of the Holders otherwise entitled to such securities upon
an averaged or other practicable basis without regard to any distinctions among
such Holders and distribute the net proceeds so allocated to the extent
practicable as in the case of a distribution received in cash pursuant to
Section 4.1. Immediately upon the occurrence of any such change, conversion or
exchange covered by this Section 4.11 in respect of the Deposited Securities,
the Depositary shall give notice thereof in writing, to all Holders, at the
Company's expense; provided that the Company shall provide the Depositary with
the content of such notice in writing. The Depositary shall not be responsible
for (i) any failure to determine that it may be lawful or feasible to make such
securities available to Holders in general or to any Holder in particular, (ii)
any foreign exchange exposure or loss incurred in connection with such sale, or
(iii) any liability to the purchaser of such securities.
48
SECTION 4.12 Available Information. The Company is subject to the periodic
reporting requirements of the Exchange Act and accordingly files certain
information with the Commission. The reports and documents referred to in this
Section 4.12 can be inspected and copied at the public reference facilities
maintained by the Commission located at Judiciary Plaza, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx X.X. 00000 and at the Commission's New York City office located at
Seven World Trade Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
SECTION 4.13 Reports. The Depositary shall make available for inspection
by Holders at its Principal Office any reports and communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company. The Depositary shall also
provide to Holders copies of such reports when furnished by the Company pursuant
to Section 5.6.
SECTION 4.14 List of Holders. Upon written request by the Company, the
Depositary shall furnish to the Company a list, as of a recent date, of the
names, addresses and holdings of American Depositary Shares of all Holders, as
such information is reflected in the Depositary's records.
SECTION 4.15 Taxation. The Depositary will, and will instruct the
Custodian to, forward to the Company or its agents such information from its
records as the Company may reasonably request to enable the Company or its
agents to file the necessary tax reports with governmental authorities or
49
agencies. The Depositary, the Custodian or the Company and its agents may, but
shall not be obligated to, file such reports as are necessary to reduce or
eliminate applicable taxes on dividends and on other distributions in respect of
Deposited Securities under applicable tax treaties or laws for the Holders and
Beneficial Owners. In accordance with instructions from the Company and to the
extent practicable, the Depositary or the Custodian will take reasonable
administrative actions to obtain tax refunds, reduced withholding of taxes at
source on dividends and other benefits under applicable tax treaties or laws
with respect to dividends and other distributions on the Deposited Securities.
As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs
may be required from time to time, and in a timely manner, to file such proof of
taxpayer status, residence and beneficial ownership (as applicable), to execute
such certificates and to make such representations and warranties, or to provide
any other information or documents, as the Depositary or the Custodian may deem
necessary or proper to fulfill the Depositary's or the Custodian's obligations
under applicable law. The Holders and Beneficial Owners shall indemnify the
Depositary, the Company, the Custodian and any of their respective directors,
employees, agents and Affiliates against, and hold each of them harmless from,
any claims by any governmental authority with respect to taxes, additions to
tax, penalties or interest arising out of any refund of taxes, reduced rate of
withholding at source or other tax benefit obtained.
If the Company (or any of its agents) withholds from any distribution any
amount on account of taxes or governmental charges, or pays any other tax in
respect of such distribution (i.e., stamp duty tax, capital gains or other
similar tax), the Company shall (and shall cause such agent to) remit promptly
to the Depositary information about such taxes or governmental charges withheld
or paid, and, if so requested, the tax receipt (or other proof of payment to the
50
applicable governmental authority) therefor, in each case, in a form
satisfactory to the Depositary. The Depositary shall, to the extent required by
U.S. law, report to Holders any taxes withheld by it or the Custodian, and, if
such information is provided to it by the Company, any taxes withheld by the
Company. The Depositary and the Custodian shall not be required to provide the
Holders with any evidence of the remittance by the Company (or its agents) of
any taxes withheld, or of the payment of taxes by the Company, except to the
extent the evidence is provided by the Company to the Depositary or the
Custodian, as applicable. Neither the Depositary nor the Custodian shall be
liable for the failure by any Holder or Beneficial Owner to obtain the benefits
of credits on the basis non-U.S. tax paid against such-Holder's or Beneficial
Owner's income tax liability.
The Depositary is under no obligation to provide the Holders and
Beneficial Owners with any information about the tax status of the Company. The
Depositary shall not incur any liability for any tax consequences that may be
incurred by Holders and Beneficial Owners on account of their ownership of the
ADSs, including without limitation, tax consequences resulting from the Company
(or any of its subsidiaries) being treated as a "Foreign Personal Holding
Company," or as a "Passive Foreign Investment Company" (in each case as defined
in the U.S. Internal Revenue Code, as amended, and the regulations issued
thereunder) or otherwise.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.1 Maintenance of Office and Transfer Books by the Registrar.
Until termination of this Deposit Agreement in accordance with its terms, the
Registrar shall maintain in the Borough of Manhattan, The City of New York, an
office and facilities for the execution and delivery, registration of issuances,
registration of transfers, combination and split-up of Receipts, and the
surrender of Receipts for the purpose of withdrawal of Deposited Securities in
accordance with the provisions of this Deposit Agreement.
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The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Company and by the Holders of such Receipts, provided that such
inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts in the interest of a business or
object other than the business of the Company or other than a matter related to
this Deposit Agreement or the Receipts.
The Registrar may close the transfer books with respect to the Receipts,
at any time or from time to time, when deemed necessary or advisable by it in
good faith in connection with the performance of its duties hereunder, or at the
reasonable written request of the Company, subject, in all cases, to Section 7.8
hereof.
If any Receipts or the ADSs evidenced thereby are listed on one or more
stock exchanges or automated quotation systems in the United States, the
Depositary shall act as Registrar or, with the written approval of the Company,
appoint a Registrar or one or more co-registrars for registration of Receipts
and transfers, combinations and split-ups, and to countersign such Receipts in
accordance with any requirements of such exchanges or systems. Such Registrar or
co-registrars may be removed and a substitute or substitutes appointed by the
Depositary upon the written request of or with the prior written approval of the
Company.
SECTION 5.2 Exoneration. Neither the Depositary nor the Company shall be
obligated to do or perform any act which is inconsistent with the provisions of
this Deposit Agreement or shall incur any liability (i) if the Depositary or the
Company shall be prevented or forbidden from, or delayed in, doing or performing
any act or thing required by the terms of this Deposit Agreement, by reason of
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any provision of any present or future law or regulation of the United States,
Brazil or any other country, or of any other governmental authority or
regulatory authority or stock exchange, or on account of the possible criminal
or civil penalties or restraint, or by reason of any provision, present or
future of the Estatuto Social of the Company or any provision of or governing
any Deposited Securities, or by reason of any act of God or war or other
circumstances beyond its control (including, without limitation,
nationalization, expropriation, currency restrictions, work stoppage, strikes,
civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by
reason of any exercise of, or failure to exercise, any discretion provided for
in this Deposit Agreement or in the Estatuto Social of the Company or provisions
of or governing Deposited Securities, (iii) for any action or inaction in
reliance upon the advice or information from legal counsel, accountants, any
person presenting Shares for deposit, any Holder, any Beneficial Owner or
authorized representative thereof, or any other person believed by it in good
faith to be competent to give such advice or information, (iv) for the inability
by a Holder or Beneficial Owner to benefit from any distribution, offering,
right or other benefit which is made available to holders of Deposited
Securities but is not, under the terms of this Deposit Agreement, made available
to Holders of ADSs or (v) for any consequential or punitive damages for any
breach of the terms of this Deposit Agreement.
The Depositary, its controlling persons, its agents, the Custodian and the
Company, its controlling persons and its agents may rely and shall be protected
in acting upon any written notice, request or other document believed by it to
be genuine and to have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act is intended by any
provision of this Deposit Agreement.
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SECTION 5.3 Standard of Care. The Company and its agents assume no
obligation and shall not be subject to any liability under this Deposit
Agreement or the Receipts to any Holders or Beneficial Owner(s) or other
persons, except that the Company and its agents agree to perform their
respective obligations specifically set forth in this Deposit Agreement or the
applicable Receipts without negligence or bad faith.
The Depositary and its agents assume no obligation and shall not be
subject to any liability under this Deposit Agreement or the Receipts to Holders
or Beneficial Owners or other persons, except that the Depositary and its agents
agree to perform their obligations specifically set forth in this Deposit
Agreement without negligence or bad faith.
Without limitation of the foregoing, neither the Depositary, nor the
Company, nor any of their respective controlling persons, or agents, shall be
under any obligation to appear in, prosecute or defend any action, suit or other
proceeding in respect of any Deposited Securities or in respect of the Receipts,
which in its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expenses (including fees and disbursements of
counsel) and liabilities be furnished as often as may be required (and the
Custodian shall not be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the
Depositary).
The Depositary and its agents shall not be liable for any failure to carry
out any instructions to vote any of the Deposited Securities, or for the manner
in which any vote is cast or the effect of any vote, provided that any such
action or omission is in good faith and in accordance with the terms of this
Deposit Agreement. The Depositary shall not incur any liability for any failure
to determine that any distribution or action may be lawful or reasonably
practicable, for the content of any information submitted to it by the Company
for distribution to the Holders or for any inaccuracy of any translation
54
thereof, for any investment risk associated with acquiring an interest in the
Deposited Securities, for the validity or worth of the Deposited Securities or
for any tax consequences that may result from the ownership of ADSs, Shares or
Deposited Securities, for the credit-worthiness of any third party, for allowing
any rights to lapse upon the terms of this Deposit Agreement or for the failure
or timeliness of any notice from the Company.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice of resignation delivered to the Company, such
resignation to be effective on the earlier of (i) the 90th day after delivery
thereof to the Company (whereupon the Depositary shall be entitled to take the
actions contemplated in Section 6.2 hereof), or (ii) the appointment by the
Company of a successor depositary and its acceptance of such appointment as
hereinafter provided.
The Depositary may at any time be removed by the Company by written notice
of such removal, which removal shall be effective on the appointment by the
Company of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall be
required by the Company to execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon such successor depositary, without any further act or deed (except as
required by applicable law), shall become fully vested with all the rights,
powers, duties and obligations of its predecessor (other than as contemplated in
55
Sections 5.8 and 5.9). The predecessor depositary, upon payment of all sums due
to it and on the written request of the Company, shall (i) execute and deliver
an instrument transferring to such successor all rights and powers of such
predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9), (ii)
duly assign, transfer and deliver all right, title and interest to the Deposited
Securities to such successor, and (iii) deliver to such successor a list of the
Holders of all outstanding Receipts and such other information relating to
Receipts and Holders thereof as the successor may reasonably request. Any such
successor depositary shall promptly provide notice of its appointment to such
Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
SECTION 5.5 The Custodian. The Depositary has initially appointed Citibank
Distribuidora de Titulos e Valores Mobiliarios S.A. as Custodian for the purpose
of this Deposit Agreement. The Custodian or its successors in acting hereunder
shall be subject at all times and in all respects to the direction of the
Depositary for the Shares for which the Custodian acts as custodian and shall be
responsible solely to it. The Custodian may resign and be discharged from its
duties hereunder with respect to any Deposited Securities by notice of such
resignation delivered to the Depositary at least 60 days prior to the date on
which such resignation is to become effective. The Depositary shall promptly
appoint a substitute custodian that is organized under the laws of Brazil, which
substitute custodian shall assume its duties hereunder on the effective date of
the resignation of the Custodian hereunder. The Depositary hereby covenants and
agrees that at no time shall there be more than one Custodian acting in
connection with this Deposit Agreement. The Depositary shall require such
resigning or discharged Custodian to deliver the Deposited Securities held by
56
it, together with all such records maintained by it as Custodian with respect to
such Deposited Securities as the Depositary may request, to the Custodian
designated by the Depositary. Whenever the Depositary determines, in its
discretion, that it is appropriate to do so, it may discharge the Custodian with
respect to any Deposited Securities and appoint a substitute custodian, which
shall thereafter be the Custodian hereunder with respect to the Deposited
Securities. Immediately upon any such change, the Depositary shall give notice
thereof in writing to the Company.
Upon the appointment of any successor depositary, the Custodian then
acting hereunder shall, unless otherwise instructed by the Depositary, continue
to be the Custodian of the Deposited Securities without any further act or
writing and shall be subject to the direction of the successor depositary. The
successor depositary so appointed shall, nevertheless, on the written request of
the Custodian, execute and deliver to the Custodian all such instruments as may
be proper to give to the Custodian full and complete power and authority to act
on the direction of such successor depositary.
SECTION 5.6 Notices and Reports. On or before the first date on which the
Company gives notice, by publication or otherwise, of any meeting of holders of
Shares or other Deposited Securities, or of any adjourned meeting of such
holders, or of the taking of any action by such holders other than at a meeting,
or of the taking of any action in respect of any cash or other distributions or
the offering of any rights in respect of Deposited Securities, the Company shall
transmit to the Depositary and the Custodian a copy of the notice thereof in the
English language but otherwise in the form given or to be given to holders of
Shares or other Deposited Securities. The Company shall also furnish to the
Custodian and the Depositary a summary, in English, of any applicable provisions
or proposed provisions of the Estatuto Social of the Company that may be
relevant or pertain to such notice of meeting or be the subject of a vote
thereat.
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The Company will also transmit to the Depositary (a) an English language
version of the other notices, reports and communications which are made
generally available by the Company to holders of its Shares of other Deposited
Securities and (b) the English-language versions of the Company's annual and
semi-annual reports prepared in accordance with the applicable requirements of
the Commission. The Depositary shall arrange, at the request of the Company and
at the Company's expense, to provide copies thereof to all Holders or make such
notices, reports and other communications available to all Holders on a basis
similar to that for holders of Shares or other Deposited Securities or on such
other basis as the Company may advise the Depositary or as may be required by
any applicable law, regulation or stock exchange requirement. The Company has
delivered to the Depositary and the Custodian a copy of the Company's Estatuto
Social along with the provisions of or governing the Shares and any other
Deposited Securities issued by the Company or any Affiliate of the Company in
connection with such Shares, and promptly upon any amendment thereto or change
therein, the Company shall deliver to the Depositary and the Custodian a copy of
such amendment thereto or change therein. The Depositary may rely upon such copy
for all purposes of this Deposit Agreement.
The Depositary will, at the expense of the Company, make available a copy
of any such notices, reports or communications issued by the Company and
delivered to the Depositary for inspection by the Holders of the Receipts
evidencing the ADSs representing such Shares governed by such provisions at the
Depositary's Principal Office, at the office of the Custodian and at any other
designated transfer office.
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SECTION 5.7 Issuance of Additional Shares, ADSs etc. The Company agrees
that in the event it or any of its Affiliates proposes (i) an issuance, sale or
distribution of additional Shares, (ii) an offering of rights to subscribe for
Shares or other Deposited Securities, (iii) an issuance of securities
convertible into or exchangeable for Shares, (iv) an issuance of rights to
subscribe for securities convertible into or exchangeable for Shares, (v) an
elective dividend of cash or Shares, (vi) a redemption of Deposited Securities,
(vii) a meeting of holders of Deposited Securities, or solicitation of consents
or proxies, relating to any reclassification of securities, merger or
consolidation or transfer of assets or (viii) any reclassification,
recapitalization, reorganization, merger, consolidation or sale of assets which
affects the Deposited Securities, it will obtain U.S. legal advice and take all
steps necessary to ensure that the application of the proposed transaction to
Holders and Beneficial Owners does not violate the registration provisions of
the Securities Act, or any other applicable laws (including, without limitation,
the Investment Company Act of 1940, as amended, the Exchange Act or the
securities laws of the states of the United States). In support of the
foregoing, the Company will furnish to the Depositary (a) a written opinion of
U.S. counsel (reasonably satisfactory to the Depositary) stating whether or not
application of such transaction to Holders and Beneficial Owners (1) requires a
registration statement under the Securities Act to be in effect or (2) is exempt
from the registration requirements of the Securities Act and (b) an opinion of
Brazilian counsel stating that (1) making the transaction available to Holders
and Beneficial Owners does not violate the laws or regulations of Brazil and (2)
all requisite regulatory consents and approvals have been obtained in Brazil. If
the filing of a registration statement is required, the Depositary shall not
have any obligation to proceed with the transaction unless it shall have
received evidence reasonably satisfactory to it that such registration statement
has been declared effective. If, being advised by counsel, the Company
59
determines that a transaction is required to be registered under the Securities
Act, the Company will either (i) register such transaction to the extent
necessary, (ii) alter the terms of the transaction to avoid the registration
requirements of the Securities Act or (iii) direct the Depositary to take
specific measures, in each case as contemplated in this Deposit Agreement, to
prevent such transaction from violating the registration requirements of the
Securities Act.
The Company agrees with the Depositary that neither the Company nor any of
its Affiliates will at any time (i) deposit any Shares or other Deposited
Securities, either upon original issuance or upon a sale of Shares or other
Deposited Securities previously issued and reacquired by the Company or by any
such Affiliate, or (ii) issue additional Shares, rights to subscribe for such
Shares, securities convertible into or exchangeable for Shares or rights to
subscribe for such securities, unless such transaction and the securities
issuable in such transaction are exempt from registration under the Securities
Act and, if applicable, the Exchange Act, or have been registered under the
Securities Act and, if applicable, the Exchange Act (and such registration
statement has been declared effective).
Notwithstanding anything else contained in this Deposit Agreement, nothing
in this Deposit Agreement shall be deemed to obligate the Company to file any
registration statement in respect of any proposed transaction.
SECTION 5.8 Indemnification. The Depositary agrees to indemnify the
Company and its directors, officers, employees, agents and Affiliates against,
and hold each of them harmless from, any direct loss, liability, tax, charge or
expense of any kind whatsoever (including, but not limited to, the reasonable
fees and expenses of counsel) which may arise out of acts performed or omitted
by the Depositary under the terms hereof due to the negligence or bad faith of
the Depositary.
60
The Company agrees to indemnify the Depositary, the Custodian and any of
their respective directors, officers, employees, agents and Affiliates against,
and hold each of them harmless from, any direct loss, liability, tax, charge or
expense of any kind whatsoever (including, but not limited to, the reasonable
fees and expenses of counsel) that may arise (a) out of or in connection with
any offer, issuance, sale, resale, transfer, deposit or withdrawal of Receipts,
ADSs, the Shares, or other Deposited Securities, as the case may be, (b) out of
or as a result of any offering documents in respect thereof or (c) out -of acts
performed or omitted, including, but not limited to, any delivery by the
Depositary on behalf of the Company of information regarding the Company in
connection with this Deposit Agreement, the Receipts, the ADSs, the Shares, or
any Deposited Securities, in any such case (i) by the Depositary, the Custodian
or any of their respective directors, officers, employees, agents and
Affiliates, except to the extent such loss, liability, tax, charge or expense is
due to the negligence or bad faith of any of them, or (ii) by the Company or any
of its directors, officers, employees, agents and Affiliates. The indemnities
contained in this paragraph shall not extend to any liability or expense which
may arise out of any Pre-Release Transaction (as defined in Section 5.10 hereof)
other than a Pre-Release Transaction entered into at the request of the Company.
The obligations set forth in this Section shall survive the termination of
this Deposit Agreement and the succession or substitution of any party hereto.
Any person seeking indemnification hereunder (an "indemnified person")
shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement
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(provided that the failure to make such notification shall not affect such
indemnified person's rights to seek indemnification except to the extent the
indemnifying person is materially prejudiced by such failure) and shall consult
in good faith with the indemnifying person as to the conduct of the defense of
such action or claim that may give rise to an indemnity hereunder, which defense
shall be reasonable under the circumstances. No indemnified person shall
compromise or settle any action or claim that may give rise to an indemnity
hereunder without the consent of the indemnifying person, which consent shall
not be unreasonably withheld.
SECTION 5.9 Fees and Charges of Depositary. The Company, the Holders, the
Beneficial Owners, and persons depositing Shares or surrendering ADSs for
cancellation and withdrawal of Deposited Securities shall be required to pay to
the Depositary the Depositary's fees and related charges identified as payable
by them respectively in the Fee Schedule attached hereto as Exhibit B. All fees
and charges so payable may, at any time and from time to time, be changed by
agreement between the Depositary and the Company, but, in the case of fees and
charges payable by Holders and Beneficial Owners, only in the manner
contemplated in Section 6.1. The Depositary shall provide, without charge, a
copy of its latest fee schedule to anyone upon request.
The Company agrees to promptly pay to the Depositary such other fees and
charges and to reimburse the Depositary for such out-of-pocket expenses as the
Depositary and the Company may agree to in writing from time to time.
Responsibility for payment of such charges may at any time and from time to time
be changed by agreement between the Company and the Depositary. Unless otherwise
agreed, the Depositary shall present its statement for such expenses and fees or
charges to the Company once every three months. The charges and expenses of the
Custodian are for the sole account of the Depositary.
62
The right of the Depositary to receive payment of fees, charges and
expenses as provided above shall survive .the termination of this Deposit
Agreement. As to any Depositary, upon the resignation or removal of such
Depositary as described in Section 5.4 hereof, such right shall extend for those
fees, charges and expenses incurred prior to the effectiveness of such
resignation or removal.
SECTION 5.10 Pre-Release. Subject to the further terms and provisions of
this Section 5.10, the Depositary, its Affiliates and their agents, on their own
behalf, may own and deal in any class of securities of the Company and its
Affiliates and in ADSs. In its capacity as Depositary, the Depositary shall not
lend Shares or ADSs; provided, however, that the Depositary may (i) issue ADSs
prior to the receipt of Shares pursuant to Section 2.3 and (ii) deliver Shares
prior to the receipt of ADSs for withdrawal of Deposited Securities pursuant to
Section 2.7, including ADSs that were issued under (i) above but for which
Shares may not have been received (each such transaction a "Pre-Release
Transaction"). The Depositary may receive ADSs in lieu of Shares under (i) above
and receive Shares in lieu of ADSs under (ii) above. Each such Pre-Release
Transaction will be (a) subject to a written agreement whereby the person or
entity (the "Applicant") to whom ADSs or Shares are to be delivered (1)
represents that at the time of the Pre-Release Transaction the Applicant or its
customer owns the Shares or ADSs that are to be delivered by the Applicant under
such Pre-Release Transaction, (2) agrees to indicate the Depositary as owner of
such Shares or ADSs in its records and to hold such Shares or ADSs in trust for
the Depositary until such Shares or ADSs are delivered to the Depositary or the
Custodian, (3) unconditionally guarantees to deliver to the Depositary or the
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Custodian, as applicable, such Shares or ADSs and (4) agrees to any additional
restrictions or requirements that the Depositary deems appropriate, (b) at all
times fully collateralized with cash, United States government securities or
such other collateral as the Depositary deems appropriate, (c) terminable by the
Depositary on not more than five (5) business days' notice and (d) subject to
such further indemnities and credit regulations as the Depositary deems
appropriate. The Depositary will normally limit the number of ADSs and Shares
involved in such Pre-Release Transactions at any one time to thirty percent
(30%) of the ADSs outstanding (without giving effect to ADSs outstanding under
(i) above), provided, however, that the Depositary reserves the right to change
or disregard such limit from time to time as it deems appropriate. The
Depositary may also set limits with respect to the number of ADSs and Shares
involved in Pre-Release Transactions with any one person on a case by case basis
as it deems appropriate.
The Depositary may retain for its own account any compensation received by
it in conjunction with the foregoing. Collateral provided pursuant to (b) above,
but not the earnings thereon, shall be held for the benefit of the Holders
(other than the Applicant).
SECTION 5.11 Restricted Securities Owners. The Company agrees to advise in
writing each of the persons or entities who, to the actual knowledge of the
Company, holds Restricted Securities that such Restricted Securities are
ineligible for deposit hereunder and, to the extent practicable, shall require
each of such persons to represent in writing that such person will not deposit
Restricted Securities hereunder.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment/Supplement. Subject to the terms and conditions of
this Section 6.1 and applicable law, the Receipts outstanding at any time, the
provisions of this Deposit Agreement and the form of Receipt attached hereto and
to be issued under the terms hereof may at any time and from time to time be
64
amended or supplemented by written agreement between the Company and the
Depositary in any respect which they may deem necessary or desirable without the
prior written consent of the Holders or Beneficial Owners. Any amendment or
supplement which shall impose or increase any fees or charges (other than
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding
Receipts until the expiration of 60 days after notice of such amendment or
supplement shall have been given to the Holders of outstanding Receipts. The
parties hereto agree that 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 or (b) the ADSs 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 materially prejudice any substantial rights of Holders or Beneficial
Owners. Every Holder and Beneficial Owner at the time any amendment or
supplement so becomes effective shall be deemed, by continuing to hold such
ADSs, to consent and agree to such amendment or supplement and to be bound by
the Deposit Agreement and the Receipt as amended and supplemented thereby. In no
event shall any amendment or supplement impair the right of the Holder to
surrender such Receipt and receive therefor the Deposited Securities represented
thereby, except in order to comply with mandatory provisions of applicable law.
Notwithstanding the foregoing, if any governmental body should adopt new laws,
rules or regulations which would require an amendment or supplement of the
Deposit Agreement to ensure compliance therewith, the Company and the Depositary
may amend or supplement the Deposit Agreement and the Receipts at any time in
65
accordance with such changed laws, rules or regulations. Such amendment or
supplement to the Deposit Agreement and the Receipts 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 with such
laws, rules or regulations.
SECTION 6.2 Termination. The Depositary shall, at any time at the written
direction of the Company, terminate this Deposit Agreement by providing notice
of such termination to the Holders of all Receipts then outstanding at least 90
days prior to the date fixed in such notice for such termination. If 90 days
shall have expired after (i) the Depositary shall have delivered to the Company
a written notice of its election to resign, or (ii) the Company shall have
delivered to the Depositary a written notice of the removal of the Depositary,
and in either case a successor depositary shall not have been appointed and
accepted its appointment as provided in Section 5.4, the Depositary may
terminate this Deposit Agreement by providing notice of such termination to the
Holders of all Receipts then outstanding at least 30 days prior to the date
fixed for such termination. On and after the date of termination of this Deposit
Agreement, the Holder of a Receipt will, upon surrender of such Receipt at the
Principal Office of the Depositary, upon the payment of the charges of the
Depositary for the surrender of Receipts referred to in Section 2.7 and subject
to the conditions and restrictions therein set forth, and upon payment of any
applicable taxes or governmental charges, be entitled to Delivery, to him or
upon his order, of the amount of Deposited Securities represented by such
Receipt. If any Receipts shall remain outstanding after the date of termination
of this Deposit Agreement, the Registrar thereafter shall discontinue the
registration of transfers of Receipts, and the Depositary shall suspend the
distribution of dividends to the Holders thereof, and shall not give any further
66
notices or perform any further acts under this Deposit Agreement, except that
the Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in this
Deposit Agreement, and shall continue to deliver Deposited Securities, subject
to the conditions and restrictions set forth in Section 2.7, together with any
dividends or other distributions received with respect thereto and the net
proceeds of the sale of any rights or other property, in exchange for Receipts
surrendered to the Depositary (after deducting, or charging, as the case may be,
in each case, the charges of the Depositary for the surrender of a Receipt, any
expenses for the account of the Holder in accordance with the terms and
conditions of this Deposit Agreement and any applicable taxes or governmental
charges or assessments). At any time after the expiration of six months from the
date of termination of this Deposit Agreement, the Depositary may sell the
Deposited Securities then held hereunder and may thereafter hold uninvested the
net proceeds of any such sale, together with any other cash then held by it
hereunder, in an unsegregated account, without liability for interest for the
pro rata benefit of the Holders whose Receipts have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from all
obligations under this Deposit Agreement with respect to the Receipts, the
Deposited Securities and the ADSs, except to account for such net proceeds and
other cash (after deducting, or charging, as the case may be, in each case, the
charges of the Depositary for the surrender of a Receipt, any expenses for the
account of the Holder in accordance with the terms and conditions of this
Deposit Agreement and any applicable taxes or governmental charges or
assessments). Upon the termination of this Deposit Agreement, the Company shall
be discharged from all obligations under this Deposit Agreement except for its
obligations to the Depositary under Sections 5.8, 5.9 and 7.6 hereof.
67
ARTICLE VII
MISCELLANEOUS
SECTION 7.1 Counterparts. This Deposit Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, and all of
such counterparts together shall constitute one and the same agreement. Copies
of this Deposit Agreement shall be maintained with the Depositary and shall be
open to inspection by any Holder during business hours.
SECTION 7.2 No Third-Party Beneficiaries. This Deposit Agreement is for
the exclusive benefit of the parties hereto (and their successors) and shall not
be deemed to give any legal or equitable right, remedy or claim whatsoever to
any other person, except to the extent specifically set forth in this Deposit
Agreement. Nothing in this Deposit Agreement shall be deemed to give rise to a
partnership or joint venture among the parties hereto nor establish a fiduciary
or similar relationship among the parties. The parties hereto acknowledge and
agree that (i) the Depositary and its Affiliates may at any time have multiple
banking relationships with the Company and its Affiliates, (ii) the Depositary
and its Affiliates may be engaged at any time in transactions in which parties
adverse to the Company or the Holders or Beneficial Owners may have interests
and (iii) nothing contained in this Agreement shall (a) preclude the Depositary
or any of its Affiliates from engaging in such transactions or establishing or
maintaining such relationships, or (b) obligate the Depositary or any of its
Affiliates to disclose such transactions or relationships or to account for any
profit made or payment received in such transactions or relationships.
SECTION 7.3 Severability. In case any one or more of the provisions
contained in this Deposit Agreement or in tilt-Receipts should be or become
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
68
SECTION 7.4 Holders and Beneficial Owners as Parties; Binding Effect. The
Holders and Beneficial Owners from time to time of American Depositary Shares
shall be parties to the Deposit Agreement and shall be bound by all of the terms
and conditions hereof and of any Receipt by acceptance thereof or any beneficial
interest therein.
SECTION 7.5 Notices. Any and all notices to be given to the Company shall
be deemed to have been duly given if personally delivered or sent by mail, air
courier or cable, telex or facsimile transmission, confirmed by letter
personally delivered or sent by mail or air courier, addressed to Companhia
Energetica de Minas Gerais - CEMIG, Avenida Barbacena, 1200, 30190-131 Belo
Horizonte, Minas Gerais, Brazil, Attention: Luiz Xxxxxxxx Xxxxx, or to any other
address which the Company may specify in writing to the Depositary.
Any and all notices to be given to the Depositary shall be deemed to have
been duly given if personally delivered or sent by mail, air courier or cable,
telex or facsimile transmission, confirmed by letter personally delivered or
sent by mail or air courier, addressed to Citibank, N.A., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, U.S.A., Attention: Depositary Receipts Department, or to
any other address which the Depositary may specify in writing to the Company.
Any and all notices to be given to any Holder shall be deemed to have been
duly given if (a) personally delivered or sent by mail, air courier or cable,
telex or facsimile transmission, confirmed by letter, addressed to such Holder
at the address of such Holder as it appears on the books of the Depositary, or,
if such Holder shall have filed with the Depositary a request that notices
intended for such Holder be mailed to some other address, at the address
69
specified in such request, or (b) if a Holder shall have designated such means
of notification as an acceptable means of notification under the terms of this
Deposit Agreement, by means of electronic messaging addressed for delivery to
the e-mail address designated by the Holder for such purpose. Notice to Holders
shall be deemed to be notice to Beneficial Owners for all purposes of this
Deposit Agreement. Failure to notify a Holder or any defect in the notification
to a Holder shall not affect the sufficiency of notification to other Holders or
to the Beneficial Owners of ADSs held by such other Holders.
Delivery of a notice sent by mail, air courier or cable, telex or
facsimile transmission shall be deemed to be effective at the time when a duly
addressed letter containing the same (or a confirmation thereof in the case of a
cable, telex or facsimile transmission) is deposited, postage prepaid, in a
post-office letter box or delivered to an air courier service, without regard
for the actual receipt or time of actual receipt thereof by a Holder. The
Depositary or the Company may, however, act upon any cable, telex or facsimile
transmission received by it from any Holder, the Custodian or the Company,
notwithstanding that such cable, telex or facsimile transmission shall not be
subsequently confirmed by letter as aforesaid.
Delivery of a notice by means of electronic messaging shall be deemed to
be effective at the time of the initiation of the transmission by the sender (as
shown on the sender's records), notwithstanding that the intended recipient
retrieves the message at a later date, fails to retrieve such message, or fails
to receive such notice on account of its failure to maintain the designated
e-mail address, its failure to designate a substitute e-mail address or for any
other reason.
SECTION 7.6 Governing Law and Jurisdiction. This Deposit Agreement and the
Receipts shall be interpreted in accordance with, and all rights hereunder and
thereunder and provisions hereof and thereof shall be governed by, the laws of
70
the State of New York without reference to the principles of choice of law
thereof. Notwithstanding anything contained in this Deposit Agreement, any
Receipt or any present or future provisions of the laws of the State of New
York, the rights of holders of Shares and of any other Deposited Securities and
the obligations and duties of the Company in respect of the holders of Shares
and other Deposited Securities, as such, shall be governed by the laws of Brazil
(or, if applicable, such other laws as may govern the Deposited Securities).
Except as set forth in the following paragraph of this Section 7.6, the
Company and the Depositary agree that the federal or state courts in the City of
New York shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any dispute between them that may arise out of or in
connection with this Deposit Agreement and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts. The Company hereby
irrevocably designates, appoints and empowers CT Corporation System (the
"Agent") now at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000, as its authorized agent
to receive and accept for and on its behalf, and on behalf of its properties,
assets and revenues, service by mail of any and all legal process, summons,
notices and documents that may be served in any suit, action or proceeding
brought against the Company in any federal or state court as described in the
preceding sentence or in the next paragraph of this Section 7.6. If for any
reason the Agent shall cease to be available to act as such, the Company agrees
to designate a new agent in the City of New York on the terms and for the
purposes of this Section 7.6 reasonably satisfactory to the Depositary. The
Company further hereby irrevocably consents and agrees to the service of any and
all legal process, summons, notices and documents in any suit, action or
proceeding against the Company, by service by mail of a copy thereof upon the
71
Agent (whether or not the appointment of such Agent shall for any reason prove
to be ineffective or such Agent shall fail to accept or acknowledge such
service), with a copy mailed to the Company by registered or certified air mail,
postage prepaid, to its address provided in Section 7.5 hereof. The Company
agrees that the failure of the Agent to give any notice of such service to it
shall not impair or affect in any way the validity of such service or any
judgment rendered in any action or proceeding based thereon.
Notwithstanding the foregoing, the Depositary and the Company
unconditionally agree that in the event that a Holder or Beneficial Owner brings
a suit, action or proceeding against (a) the Company, (b) the Depositary in its
capacity as Depositary under this Deposit Agreement or (c) against both the
Company and the Depositary, in any such case, in any state or federal court of
the United States, and the Depositary or the Company have any claim, for
indemnification or otherwise, against each other arising out of the subject
matter of such suit, action or proceeding, then the Company and the Depositary
may pursue such claim against each other in the state or federal court in the
United States in which such suit, action, or proceeding is pending, and for such
purposes, the Company and the Depositary irrevocably submit to the non-exclusive
jurisdiction of such courts. The Company agrees that service of process upon the
Agent in the manner set forth in the preceding paragraph shall be effective
service upon it for any suit, action or proceeding brought against it as
described in this paragraph.
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any actions, suits or proceedings brought in any court as provided
in this Section 7.6, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or
proceeding brought in any such court has been brought in an inconvenient forum.
72
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, and agrees not to plead or claim, any right of immunity from
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, from attachment upon or
prior to judgment, from attachment in aid of execution or judgment, from
execution of judgment, or from any other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, and consents to
such relief and enforcement against it, its assets and its revenues in any
jurisdiction, in each case with respect to any matter arising out of, or in
connection with, the Deposit Agreement, any Receipt or the Deposited Securities.
No disclaimer of liability under the Securities Act is intended by any
provision of the Deposit Agreement.
The provisions of this Section 7.6 shall survive any termination of this
Deposit Agreement, in whole or in part.
SECTION 7.7 Assignment. Subject to the provisions of Section 5.4 hereof,
this Deposit Agreement may not be assigned by either the Company or the
Depositary.
SECTION 7.8 Compliance with U.S. Securities Laws. Notwithstanding anything
in this Deposit Agreement to the contrary, the withdrawal or delivery of
Deposited Securities will not be suspended by the Company or the Depositary
except as would be permitted by Instruction I.A.(1) of the General Instructions
to Form F-6 Registration Statement, as amended from time to time, under the
Securities Act.
73
SECTION 7.9 Regulatory Compliance. The Depositary and the Company hereby
confirm to each other that, for as long as this Deposit Agreement is in effect,
they shall comply with any requirements for registration of the amount of
Deposited Securities with the Central Bank of Brazil and furnish the CVM and the
Banco Central do Brasil such information and documents related to the approved
ADR program, the Deposited Securities, distributions thereon, the Receipts and
the Depositary's obligations hereunder as may be requested by such authorities
from time to time pursuant to paragraph 3, article 3 of Regulation Annex V to
Resolution 1.289.87 (as published in Resolution 1.927/92) of the Brazilian
National Monetary Council. In the event that the Depositary or the Custodian
shall be advised in writing (the "Legal Warning") by Brazilian counsel
reasonably satisfactory to the Depositary that the Depositary or Custodian
reasonably could be subject to criminal or civil liabilities as a result of the
Company having failed to provide to the CVM or the Banco Central do Brasil such
information or documents available through the Company, the Depositary will
immediately send a copy of the Legal Warning to the Company, shall have the
right to immediately resign as Depositary by written notice to the Company and
will not be subject to any liability hereunder for such resignation or such
determination, and the Company agrees to indemnify the Depositary, the Custodian
and any of their respective officers, directors, employees and agents against,
and hold each of them harmless from any loss or liability of any kind incurred
that arises under this Section 7.9. Upon effectiveness of such resignation, the
Depositary shall otherwise be discharged from all of its obligations under this
Deposit Agreement. Resignation pursuant to this paragraph shall be effected in
accordance with Section 5.4; provided that, if the Company fails to appoint a
new depositary within ninety (90) days of such resignation, this Deposit
74
Agreement shall be terminated in accordance with Section 6.2 and the Company or
its designated agents will assume the obligations stated as the obligations of
the Depositary in such Section.
The provisions of this Section 7.9 shall survive any termination of this
Deposit Agreement in whole or in part.
SECTION 7.10 Titles and References. All references in this Deposit
Agreement to exhibits, articles, sections, subsections, and other subdivisions
refer to the exhibits, articles, sections, subsections and other subdivisions of
this Deposit Agreement unless expressly provided otherwise. The words "this
Deposit Agreement," "herein," "hereof," "hereby," "hereunder" and words of
similar import refer to the Deposit Agreement as a whole as in effect between
the Company, the Depositary and the Holders and Beneficial Owners of ADSs and
not to any particular subdivision unless expressly so limited. Pronouns in
masculine, feminine and neuter gender shall be construed to include any other
gender, and words in the singular form shall be construed to include the plural
and vice versa unless the context otherwise requires. Titles to sections of this
Deposit Agreement are included for convenience only and shall be disregarded in
construing the language contained in this Deposit Agreement. References to
"applicable laws and regulations" shall refer to laws and regulations applicable
to ADRs, ADSs or Deposited Securities as in effect at the relevant time of
determination, unless otherwise required by law or regulation.
75
IN WITNESS WHEREOF, COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG and
CITIBANK, N.A. have duly executed this Deposit Agreement in Sao Paulo, Brazil as
of the day and year first above set forth and all Holders and Beneficial Owners
shall become parties hereto upon acceptance by them of American Depositary
Shares evidenced by Receipts issued in accordance with the terms hereof, or upon
acquisition of any beneficial interest therein.
COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG
By: /s/ Xxxxxx Xxxxxx xx Xxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxx xx Xxxxxx
Title: Chief Executive Officer
By: /s/ Xxxxxxxxxx Xxxxxx xx Xxxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxxxx xx Xxxxxx
Title: Chief Financial Officer
CITIBANK, N.A.
By: /s/ Xxxxxxx Xxxxxxxx Neto
---------------------------------------
Name: Xxxxxxx Xxxxxxxx Xxxx
Title: Vice President
76
EXHIBIT A
FORM OF RECEIPT
CUSIP Number:
American Depositary
Shares (each American
Depositary Share
representing 1,000
Fully Paid
Preferred Shares,
each with a par value of R$0.01
EXHIBIT A
FORM OF FACE OF RECEIPT
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED PREFERRED SHARES
of
COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG
(Organized and existing under the laws of the Federative Republic of Brazil)
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as, depositary (herein called
the "Depositary"), hereby certifies that ___________________________ is the
owner of __________________________ American Depositary Shares (hereinafter
"ADS"), representing deposited non-voting preferred shares, each with a par
value of R$0.01, including evidence of rights to receive such non-voting
preferred shares (the "Shares") of COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG
A-1
(the "Company"), a company organized and existing under the laws of the
Federative Republic of Brazil (the "Company"). As of the date of the Deposit
Agreement (as hereinafter defined), each ADS represents 1,000 Shares deposited
under the Deposit Agreement with the Custodian, which at the date of execution
of the Deposit Agreement is Citibank Distribuidora de Titulos e Valores
Mobiliarios S.A. (the "Custodian"). The ADS(s) to Share(s) ratio is subject to
amendment as provided in Article IV of the Deposit Agreement. The Depositary's
Principal Office is located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
(1) The Deposit Agreement. This American Depositary Receipt is one of an
issue of American Depositary Receipts ("Receipts"), all issued and to be issued
upon the terms and conditions set forth in the Second Amended and Restated
Deposit Agreement, dated as of August 10, 2001 (as amended from time to time,
the "Deposit Agreement"), by and among the Company, the Depositary, and all
Holders and Beneficial Owners from time to time of ADSs evidenced by Receipts
issued thereunder. The Deposit Agreement sets forth the rights and obligations
of Holders and Beneficial Owners of Receipts and the rights and duties of the
Depositary in respect of the Shares deposited thereunder and any and all other
securities, property and cash from time to time, received in respect of such
Shares and held thereunder (such Shares, other securities, property and cash are
herein called "Deposited Securities"). Copies of the Deposit Agreement are on
file at the Principal Office of the Depositary and with the Custodian. Each
Holder and each Beneficial Owner, upon acceptance of any ADSs (or any interest
therein) issued in accordance with the terms and conditions of the Deposit
Agreement, shall be deemed for all purposes to (a) be a party to and bound by
the terms of the Deposit Agreement and applicable ADR(s), and (b) appoint the
Depositary its attorney-in-fact, with full power to delegate, to act on its
A-2
behalf and to take any and all actions contemplated in the Deposit Agreement and
the applicable ADR(s), to adopt any and all procedures necessary to comply with
applicable law and to take such action as the Depositary in its sole discretion
may deem necessary or appropriate to carry out the purposes of the Deposit
Agreement and the applicable ADR(s), the taking of such actions to be the
conclusive determinant of the necessity and appropriateness thereof.
The statements made on the face and reverse of this Receipt are summaries
of certain provisions of the Deposit Agreement and the Estatuto Social of the
Company (as in effect on the date of the signing of the Deposit Agreement) and
are qualified by and subject to the detailed provisions of the Deposit Agreement
and the Estatuto Social, to which reference is hereby made. All capitalized
terms used herein which are not otherwise defined herein shall have the meanings
ascribed thereto in the Deposit Agreement. The Depositary makes no
representation or warranty as to the validity or worth of the Deposited
Securities. The Depositary has made arrangements for the acceptance of the ADSs
into DTC. Each Beneficial Owner of ADSs held through DTC must rely on the
procedures of DTC and the DTC Participants to exercise and be entitled to any
rights attributable to such ADSs.
(2) Surrender of Receipts and Withdrawal of Deposited Securities. The
Holder of this Receipt (and of the ADSs evidenced hereby) shall be entitled to
Delivery (at the Custodian's designated office) of the Deposited Securities
without unreasonable delay at the time represented by the ADS(s) evidenced
hereby upon satisfaction of each of the following conditions: (i) the Holder (or
a duly authorized attorney of the Holder) has duly Delivered to the Depositary
at its Principal Office the ADSs evidenced hereby (and, if applicable, this
Receipt) for the purpose of withdrawal of the Deposited Securities represented
thereby; (ii) if so required by the Depositary, this Receipt has been properly
endorsed in blank or s accompanied by proper instruments of transfer in blank
A-3
(including signature guarantees in accordance with standard securities industry
practice); (iii) if so required by the Depositary, the Holder of the ADSs has
executed and delivered to the Depositary a written order directing the
Depositary to cause the Deposited Securities being withdrawn to be Delivered to
or upon the written order of the person(s) designated in such order; and (iv)
all applicable fees and charges of, and expenses incurred by, the Depositary and
all applicable taxes and governmental charges (as are set forth in Section 5.9
of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however,
in each case, to the terms and conditions of this Receipt, the Deposit
Agreement, the Company's Estatuto Social, any applicable laws and the rules of
Companhia Brasileira de Liquidacao e Custodia and to any provisions of or
governing the Deposited Securities, in each case as in effect at the time
thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
Receipt evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, this Receipt, the Company's Estatuto
Social, any applicable laws and the rules of Companhia Brasileira de Liquidacao
e Custodia and to any provisions of or governing the Deposited Securities, in
each case as in effect at the time thereof.
A-4
The Depositary shall not accept for surrender ADSs representing less than
one Share. In the case of Delivery to it of ADSs representing other than a whole
number of Shares, the Depositary shall cause ownership of the appropriate whole
number of Shares to be Delivered in accordance with the terms hereof, and shall,
at the discretion of the Depositary, either (i) return to the person
surrendering such ADSs the number of ADSs representing any remaining fractional
Share, or (ii) sell or cause to be sold the fractional Share represented by the
ADS(s) so surrendered and remit the proceeds of such sale (net of (a) applicable
fees and charges of, and expenses incurred by, the Depositary and (b) taxes
withheld) to the person surrendering the ADSs. Notwithstanding anything else
contained in this Receipt or the Deposit Agreement, the Depositary may make
delivery at the Principal Office of the Depositary of (i) any cash dividends or
cash distributions, or (ii) any proceeds from the sale of any distributions of
shares or rights, which are at the time held by the Depositary in respect of the
Deposited Securities represented by the ADSs surrendered for cancellation and
withdrawal. At the request, risk and expense of any Holder so surrendering ADSs
represented by this Receipt, and for the account of such Holder, the Depositary
shall direct the Custodian to forward (to the extent permitted by law) any cash
or other property (other than securities) held by the Custodian in respect of
the Deposited Securities represented by such ADSs to the Depositary for delivery
at the Principal Office of the Depositary. Such direction shall be given by
letter or, at the request, risk and expense of such Holder, by cable, telex or
facsimile transmission.
(3) Transfer, Combination and Split-Up of Receipts. Subject to the terms
and conditions of the Deposit Agreement, the Registrar shall register the
transfer of this Receipt (and of the ADSs represented hereby) on the books
maintained for such purpose and the Depositary shall cancel this Receipt and
execute new Receipts evidencing the same aggregate number of ADSs as those
A-5
evidenced by this Receipt when canceled, shall cause the Registrar to
countersign such new Receipts, and shall Deliver such new Receipts to or upon
the order of the person entitled thereto, if each of the following conditions
has been satisfied: (i) this Receipt has been duly Delivered by the Holder (or
by a duly authorized attorney of the Holder) to the Depositary at its Principal
Office for the purpose of effecting a transfer thereof; (ii) this Receipt has
been properly endorsed or is accompanied by proper instruments of transfer
(including signature guarantees in accordance with standard securities industry
practice); (iii) this Receipt has been duly stamped (if required by the laws of
the State of New York or of the United States); and (iv) all applicable fees and
charges of, and expenses incurred by, the Depositary and all applicable taxes
and governmental charges (as are set forth in Section 5.9 of, and Exhibit B to,
the Deposit Agreement) have been paid, subject, however, in each case, to the
terms and conditions of this Receipt, the Deposit Agreement and applicable law,
in each case as in effect at the time thereof.
The Registrar shall register the split-up or combination of this Receipt
(and of the ADSs represented hereby) on the books maintained for such purpose
and the Depositary shall cancel this Receipt and execute new Receipts for the
number of ADSs requested, but in the aggregate not exceeding the number of ADSs
evidenced by this Receipt (when canceled), shall cause the Registrar to
countersign such new Receipts, and shall Deliver such new Receipts to or upon
the order of the Holder thereof, if each of the following conditions has been
satisfied: (i) this Receipt has been duly Delivered by the Holder (or by a duly
authorized attorney of the Holder) to the Depositary at its Principal Office for
the purpose of effecting a split-up or combination hereof; and (ii) all
applicable fees and charges of, and expenses incurred by, the Depositary and all
applicable taxes and government charges (as are set forth in Section 5.9 of, and
Exhibit B to, the Deposit Agreement) have been paid, subject, however, in each
case, to the terms and conditions of this Receipt, of the Deposit Agreement and
of applicable law, in each case as in effect at the time thereof.
A-6
(4) Pre-Conditions to Registration, Transfer, Etc. As a condition
precedent to the execution and delivery, registration of issuance or transfer,
split-up, combination or surrender of any Receipt, the delivery of any
distribution thereon, or the withdrawal of any Deposited Securities, the
Depositary or the Custodian may require (i) payment from the depositor of Shares
or presenter of ADSs or of a Receipt of a sum sufficient to reimburse it for any
tax or other governmental charge and any stock transfer or registration fee with
respect thereto (including any such tax or charge and fee with respect to Shares
being deposited or withdrawn) and payment of any applicable fees and charges of
the Depositary as provided in the Deposit Agreement and in this Receipt, (ii)
the production of proof satisfactory to it as to the identity and genuineness of
any signature or any other matters contemplated in the Deposit Agreement and
(iii) compliance with (A) any laws or governmental regulations relating to the
execution and delivery of Receipts or ADSs or to the withdrawal of Deposited
Securities and (B) such reasonable regulations as the Depositary or the Company
may establish consistent with the provisions of this Receipt and the Deposit
Agreement and applicable law.
The issuance of ADSs against deposits of Shares generally or against
deposits of particular Shares may be suspended, or the deposit of particular
Shares may be refused, or the registration of transfer of Receipts in particular
instances may be refused, or the registration of transfer of outstanding
Receipts generally may be suspended, during any period when the transfer books
of the Company, the Depositary, a Registrar or the Share Registrar are closed or
if any such action is deemed necessary or advisable by the Depositary or the
Company, in good faith, at any time or from time to time because of any
requirement of law, any government or governmental body or commission or any
A-7
securities exchange upon which the Shares or ADSs are listed, or under any
provision of the Deposit Agreement or this Receipt, or under any provision of,
or governing, the Deposited Securities, or because of any meeting of
shareholders of the Company or for any other reason, subject in all cases to
Article (24) hereof. Notwithstanding any provision of the Deposit Agreement or
this Receipt to the contrary, Holders are entitled to surrender outstanding ADSs
to withdraw the Deposited Securities at any time subject only to (i) temporary
delays caused by closing the transfer books of the Depositary or the Company or
the deposit of Shares in connection with voting at a shareholders' meeting or
the payment of dividends, (ii) the payment of fees, taxes and similar charges,
(iii) compliance with any U.S. or foreign laws or governmental regulations
relating to the Receipts or to the withdrawal of the Deposited Securities, and
(iv) other circumstances specifically contemplated by Section I.A.(1) of the
General Instructions to Form F-6 (as such General Instructions may be amended
from time to time). Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under the Deposit Agreement any Shares or other
Deposited Securities required to be registered under the provisions of the U.S.
Securities Act of 1933, as amended, unless a registration statement is in effect
as to such Shares.
(5) Compliance With Information Requests. Notwithstanding any other
provision of the Deposit Agreement or this Receipt, each Holder and Beneficial
Owner of the ADSs represented hereby agrees to comply with requests from the
Company pursuant to Brazilian law, the rules and requirements of the Sao Paulo
Stock Exchange and any other stock exchange on which Shares or ADSs are, or will
be, registered, traded or listed, or the Estatuto Social of the Company, which
are made to provide information, inter alia, as to the capacity in which such
Holder or Beneficial Owner owns ADSs and the Shares, as the case may be, and
A-8
regarding the identity of any other person(s) interested in such ADSs and the
nature of such interest and various other matters, whether or not they are
Holders and/or Beneficial Owners at the time of such request.
(6) Ownership Restrictions. Notwithstanding any provision of this Receipt
or of the Deposit Agreement, the Company may restrict transfers of the Shares
where such transfer might result in ownership of Shares exceeding limits imposed
by applicable law or the Estatuto Social of the Company. The Company may also
restrict, in such manner as it deems appropriate, transfers of ADSs where such
transfer may result in the total number of Shares represented by the ADSs owned
by a single Holder or Beneficial Owner to exceed any such limits. The Company
may, in its sole discretion but subject to applicable law, instruct the
Depositary to take action with respect to the ownership interest of any Holder
or Beneficial Owner in excess of the limits set forth in the preceding sentence,
including but not limited to, the imposition of restrictions on the transfer of
ADSs, the removal or limitation of voting rights or a mandatory sale or
disposition on behalf of a Holder or Beneficial Owner of the Shares represented
by the ADSs held by such Holder or Beneficial Owner in excess of such
limitations, if and to the extent such disposition is permitted by applicable
law and the Estatuto Social of the Company.
(7) Liability of Holder for Taxes and Other Charges. If any tax or other
governmental charge shall become payable with respect to any Receipt or any
Deposited Securities or ADSs, such tax or other governmental charge shall be
payable by the Holders and Beneficial Owners to the Depositary. The Company, the
Custodian and/or the Depositary may withhold or deduct from any distributions
made in respect of Deposited Securities and may sell for the account of a Holder
and/or Beneficial Owner any or all of the Deposited Securities and apply such
distributions and sale proceeds in payment of such taxes (including applicable
A-9
interest and penalties) or charges, with the Holder and the Beneficial Owner
hereof remaining fully liable for any deficiency. The Custodian may refuse the
deposit of Shares, and the Depositary may refuse to issue ADSs, to deliver ADRs,
register the transfer, split-up or combination of ADRs and (subject to Article
(24) hereof) the withdrawal of Deposited Securities, until payment in full of
such tax, charge, penalty or interest is received. Every Holder and Beneficial
Owner agrees to indemnify the Depositary, the Company, the Custodian, and each
of their respective agents, officers, directors, employees and Affiliates for,
and hold each of them harmless from, any claims with respect to taxes (including
applicable interest and penalties thereon) arising from any tax benefit obtained
for such Holder and/or Beneficial Owner.
(8) Representations and Warranties of Depositors. Each person depositing
Shares under the Deposit Agreement shall be deemed thereby to represent and
warrant that (i) such Shares (and the certificates therefor) are duly
authorized, validly issued, fully paid, non-assessable and legally obtained by
such person, (ii) all preemptive (and similar) rights, if any, with respect to
such Shares, have been validly waived or exercised, (iii) the person making such
deposit is duly authorized so to do, (iv) the Shares presented for deposit are
free and clear of any lien, encumbrance, security interest, charge, mortgage or
adverse claim and are not, and the ADSs issuable upon such deposit will not be,
Restricted Securities and (v) the Shares presented for deposit have not been
stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit and withdrawal of Shares, the issuance and
cancellation of ADSs in respect thereof and the transfer of such ADSs. If any
such representations or warranties are false in any way, the Company and
Depositary shall be authorized, at the cost and expense of the person depositing
Shares, to take any and all actions necessary to correct the consequences
thereof.
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(9) Filing Proofs, Certificates and Other Information. Any person
presenting Shares for deposit, any Holder and any Beneficial Owner may be
required, and every Holder and Beneficial Owner agrees, from time to time to
provide to the Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approval, legal or beneficial ownership
of ADSs and Deposited Securities, compliance with applicable laws and the terms
of the Deposit Agreement and the provisions of, or governing, the Deposited
Securities, to execute such certifications and to make such representations and
warranties, and to provide such other information and documentation (or, in the
case of Shares in registered form presented for deposit, such information
relating to the registration of Shares on the books of the Shares Registrar) as
the Depositary or the Custodian may deem necessary or proper or as the Company
may reasonably require by written request to the Depositary consistent with its
obligations under the Deposit Agreement. Subject to Article (24) hereof and the
terms of the Deposit Agreement, the Depositary and the Registrar, as applicable,
may withhold the execution or delivery or registration of transfer of any
Receipt or the distribution or sale of any dividend or other distribution of
rights or of the proceeds thereof or, to the extent not limited by Article (24)
hereof, the delivery of any Deposited Securities until such proof or other
information is filed, or such certificates are executed, or such representations
and warranties are made, or such information and documentation are provided, in
each case to the Depositary's, the Registrar's and the Company's satisfaction.
(10) Charges of Depositary. The Depositary shall charge the following fees
for the services performed under the terms of the Deposit Agreement:
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(i) to any person to whom ADSs are issued upon the deposit of
Shares, a fee not in excess of U.S.$5.00 per 100 ADSs (or
portion thereof) so issued under the terms of the Deposit
Agreement (excluding issuances pursuant to paragraphs (iii)
and (iv) below);
(ii) to any person surrendering ADSs for cancellation and
withdrawal of Deposited Securities, a fee not in excess of
U.S.$5.00 per 100 ADSs (or portion thereof) so surrendered;
(iii) to any Holder of ADRs, a fee not in excess of U.S.$2.00 per
100 ADSs (or portion thereof) held for the distribution of
cash proceeds (i.e., upon the sale of rights and other
entitlements);
(iv) to any Holder of ADRs, a fee not in the excess of U.S.$5.00
per 100 ADSs (or portion thereof) issued upon the exercise of
rights; and
(v) No Fee shall be payable upon distribution of (a) cash
dividends or (b) ADSs pursuant to stock dividends (or other
free distributions of stock) so long as the charging of such
fee is prohibited by the exchange upon which the ADSs are
listed. If charging of such fees is not prohibited, the fees
specified in (i) above shall be payable in respect of a
distribution of ADSs pursuant to stock dividends (or other
free distributions of stock) and the fees specified in (iii)
above shall be payable in respect of distributions of cash.
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In addition, Holders, Beneficial Owners, persons depositing Shares for
deposit and persons surrendering ADSs for cancellation and withdrawal of
Deposited Securities will be required to pay the following-charges:
(i) taxes (including applicable interest and penalties) and other
governmental charges;
(ii) such registration fees as may from time to time be in effect
for the registration of Shares or other Deposited Securities
on the share register and applicable to transfers of Shares or
other Deposited Securities to or from the name of the
Custodian, the Depositary or any nominees upon the making of
deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery
expenses as are expressly provided in the Deposit Agreement to
be at the expense of the person depositing or withdrawing
Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(v) such fees and expenses as are incurred by the Depositary in
connection with compliance with exchange control regulations
and other regulatory requirements applicable to Shares,
Deposited Securities, ADSs and ADRs; and
(vi) the fees and expenses incurred by the Depositary in connection
with the delivery of Deposited Securities.
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Any other charges and expenses of the Depositary under the Deposit
Agreement will be paid by the Company upon agreement between the Depositary and
the Company. All fees and charges may, at any time and from time to time, be
changed by agreement between the Depositary and Company but, in the case of fees
and charges payable by Holders or Beneficial Owners, only in the manner
contemplated by Article (22) of this Receipt. The Depositary will provide,
without charge, a copy of its latest fee schedule to anyone upon request. The
charges and expenses of the Custodian are for the sole account of the
Depositary.
(11) Title to Receipts. It is a condition of this Receipt, and every
successive Holder of this Receipt by accepting or holding the same consents and
agrees, that title to this Receipt (and to each ADS evidenced hereby) shall be
transferable upon the same terms as a certificated security under the laws of
the State of New York, provided that the Receipt has been properly endorsed or
is accompanied by proper instruments of transfer. Notwithstanding any notice to
the contrary, the Depositary and the Company may deem and treat the Holder of
this Receipt (that is, the person in whose name this Receipt is registered on
the books of the Depositary as the absolute owner hereof for all purposes.
Neither the Depositary nor the Company shall have any obligation nor be subject
to any liability hereunder or under the Deposit Agreement to any holder of this
Receipt or any Beneficial Owner unless such holder is the Holder of this Receipt
registered on the books of the Depositary or, in the case of a Beneficial Owner,
such Beneficial Owner or the Beneficial Owner's representative is the Holder
registered on the books of the Depositary.
(12) Validity of Receipt. The Holder(s) of this Receipt (and the ADSs
represented hereby) shall not be entitled to any benefits under the Deposit
Agreement or be valid or enforceable for any purpose against the Depositary or
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the Company, unless this Receipt has been (i) dated, (ii) signed by the manual
or facsimile signature of a duly authorized signatory of the Depositary, (iii)
countersigned by the manual or facsimile signature of a duly authorized
signatory of the Registrar and (iv) registered in the books maintained by the
Registrar for the registration of issuances and transfers of Receipts. Receipts
bearing the facsimile signature of a duly-authorized signatory of the Depositary
or the Registrar, who at the time of signature was a duly authorized signatory
of the Depositary or the Registrar, as the case may be, shall bind the
Depositary, notwithstanding the fact that such signatory has ceased to be so
authorized prior to the delivery of such Receipt by the Depositary.
(13) Available Information; Reports; Inspection of Transfer Books. The
Company is subject to the periodic reporting requirements of the Exchange Act
and accordingly files certain information with the Commission. These reports and
documents can be inspected and copied at the public reference facilities
maintained by the Commission located at Judiciary Plaza, 000 Xxxxx Xxxxxx, X.X.,
Xxxxxxxxxx X.X. 00000 and at the Commission's New York City office located at
Seven World Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000. The Depositary
shall make available for inspection by Holders at its Principal Office any
reports and communications, including any proxy soliciting materials, received
from the Company which are both (a) received by the Depositary, the Custodian,
or the nominee of either of them as the holder of the Deposited Securities and
(b) made generally available to the holders of such Deposited Securities by the
Company.
The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Company and by the Holders of such Receipts, provided that such
inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts in the interest of a business or
object other than the business of the Company or other than a matter related to
the Deposit Agreement or the Receipts.
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The Registrar may close the transfer books with respect to the Receipts,
at any time or from time to time, when deemed necessary or advisable by it in
good faith in connection with the performance of its duties hereunder, or at the
reasonable written request of the Company subject, in all cases, to Article (24)
hereof.
Dated:
CITIBANK, N.A. CITIBANK, NA., as Depositary
Transfer Agent and Registrar
By: By:
-------------------------------- --------------------------------
Authorized Signatory Vice President
The address of the Principal Office of the Depositary is 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
A-16
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(14) Dividends and Distributions in Cash, Shares, etc. Whenever the
Depositary receives confirmation from the Custodian of receipt of any cash
dividend or other cash distribution on any Deposited Securities, or receives
proceeds from the sale of any Deposited Securities or of any entitlements held
in respect of Deposited Securities under the terms of the Deposit Agreement, the
Depositary will (i) if at the time of receipt thereof any amounts received in a
Foreign Currency can, in the judgment of the Depositary (upon the terms of the
Deposit Agreement), be converted on a practicable basis, into Dollars
transferable to the United States, promptly convert or cause to be converted
such cash dividend, distribution or proceeds into Dollars (upon the terms of the
Deposit Agreement), (ii) if applicable, establish the ADS Record Date upon the
terms described in Section 4.9 of the Deposit Agreement and (iii) will
distribute promptly the amount thus received (net of (a) applicable fees and
charges of, and expenses incurred by, the Depositary and (b) taxes withheld) to
the Holders entitled thereto as of the ADS Record Date in proportion to the
number of ADS held as of the ADS Record Date. The Depositary shall distribute
only such amount, however, as can be distributed without attributing to any
Holder a fraction of one cent, and any balance not so distributed shall be held
by the Depositary (without liability for interest thereon) and shall be added to
and become part of the next sum received by the Depositary for distribution to
Holders of ADSs then outstanding at the time of the next distribution. If the
Company, the Custodian or the Depositary is required to withhold and does
withhold from any cash dividend or other cash distribution in respect of any
Deposited Securities an amount on account of taxes, duties or other governmental
charges, the amount distributed to Holders on the ADSs representing such
Deposited Securities shall be reduced accordingly. Such withheld amounts shall
be forwarded by the Company to the relevant governmental authority.
A-17
If any distribution upon any Deposited Securities consists of a dividend
in, or free distribution of, Shares, the Company shall or cause such Shares to
be deposited with the Custodian and registered, as the case may be, in the name
of the Depositary, the Custodian or their respective nominees. Upon receipt of
confirmation of such deposit from the Custodian, the Depositary shall, subject
to and in accordance with the Deposit Agreement, establish the ADS Record Date
and either (i) the Depositary shall distribute to the Holders as of the ADS
Record Date in proportion to the number of ADSs held as of the ADS Record Date,
additional ADSs, which represent in aggregate the number of Shares received as
such dividend, or free distribution, subject to the terms of the Deposit
Agreement (including, without limitation, (a) the applicable fees and charges
of, and expenses incurred by, the Depositary, and (b) taxes), or (ii) if
additional ADSs are not so distributed, each ADS issued and outstanding after
the ADS Record Date shall, to the extent permissible by law, thenceforth also
represent rights and interest in the additional integral number of Shares
distributed upon the Deposited Securities represented thereby (net (a) of the
applicable fees and charges of, and the expenses incurred by, the Depositary,
and (b) taxes). In lieu of delivering fractional ADSs, the Depositary shall sell
the number of Shares or ADSs, as the case may be, represented by the aggregate
of such fractions and distribute the net proceeds upon the terms set forth in
the Deposit Agreement.
In the event that the Depositary determines that any distribution in
property (including Shares) is subject to any tax or other governmental charges
which the Depositary is obligated to withhold, or, if the Company, in the
fulfillment of its obligations under the Deposit Agreement, has furnished an
opinion of U.S. counsel determining that Shares must be registered under the
A-18
Securities Act or other laws in order to be distributed to Holders (and no such
registration statement has been declared effective), the Depositary may dispose
of all or a portion of such property (including Shares and rights to subscribe
therefor) in such amounts and in such manner, including by public or private
sale, as the Depositary deems necessary and practicable, and the Depositary
shall distribute the net proceeds of any such sale (after deduction of (a) taxes
and fees and (b) charges of, and expenses incurred by, the Depositary) to
Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary
shall hold and/or distribute any unsold balance of such property in accordance
with the provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an
elective distribution to be made available to Holders upon the terms described
in the Deposit Agreement, the Company and the Depositary shall determine whether
such distribution is lawful and reasonably practicable. If so, the Depositary
shall, subject to the terms and conditions of the Deposit Agreement, establish
an ADS record date according to Article (16) hereof and establish procedures to
enable the Holder hereof to elect to receive the proposed distribution in cash
or in additional ADSs. If a Holder elects to receive the distribution in cash,
the dividend shall be distributed as in the case of a distribution in cash. If
the Holder hereof elects to receive the distribution in additional ADSs, the
distribution shall be distributed as in the case of a distribution in Shares. If
such elective distribution is not lawful or not reasonably practicable, the
Depositary shall, to the extent permitted by law, distribute to Holders, on the
basis of the same determination as is made in Brazil respect of the Shares for
which no election is made, either (x) cash or (y) additional ADSs representing
such additional Shares, in each case, upon the terms described in the Deposit
Agreement. Nothing herein or in the Deposit Agreement shall obligate the
Depositary to make available to the Holder hereof a method to receive the
elective distribution in Shares (rather than ADSs). It is understood and agreed
that the Holder hereof may not be given the opportunity to receive elective
distributions on the same terms and conditions as the holders of Shares.
A-19
Upon timely receipt by the Depositary of a notice indicating that the
Company wishes rights to subscribe for additional Shares to be made available to
Holders of ADSs, the Depositary, upon consultation with the Company, shall
determine, whether it is lawful and reasonably practicable to make such rights
available to the Holders. The Depositary shall make such rights available to any
Holders only if (i) the Company shall have timely requested that such rights be
made available to Holders, (ii) the Depositary shall have received the
documentation contemplated in the Deposit Agreement, and (iii) the Depositary
shall have determined that such distribution of rights is reasonably
practicable. If such conditions are not satisfied, the Depositary shall sell the
rights as described below. In the event all conditions set forth above are
satisfied, the Depositary shall establish an ADS Record Date (upon the terms
described in the Deposit Agreement) and establish procedures (x) to distribute
rights to purchase additional ADSs (by means of warrants or otherwise), (y) to
enable the Holders to exercise the rights (upon payment of the subscription
price and of the applicable (a) fees and charges of, and expenses incurred by,
the Depositary and (b) taxes), and (z) to deliver ADSs upon the valid exercise
of such rights. Nothing herein or in the Deposit Agreement shall obligate the
Depositary to make available to the Holders a method to exercise rights to
subscribe for Shares (rather than ADSs). If (i) the Company does not timely
request the Depositary to make the rights available to Holders or if the Company
requests that the rights not be made available to Holders, (ii) the Depositary
fails to receive the documentation required by the Deposit Agreement or
determines it is not reasonably practicable to make the rights available to
Holders, or (iii) any rights made available are not exercised and appear to be
A-20
about to lapse, the Depositary shall determine whether it is lawful and
reasonably practicable to sell such rights, in a riskless principal capacity, at
such place and upon such terms (including public and private sale) as it may
deem proper. The Depositary shall, upon such sale, convert and distribute
proceeds of such sale (net of applicable fees and charges of, and expenses
incurred by, the Depositary and taxes) upon the terms hereof and of the Deposit
Agreement. If the Depositary is unable to make any rights available to Holders
or to arrange for the sale of the rights upon the terms described above, the
Depositary shall allow such rights to lapse. The Depositary shall not be
responsible for (i) any failure to determine that it may be lawful or feasible
to make such rights available to Holders in general or any Holders in
particular, (ii) any foreign exchange exposure or loss incurred in connection
with such sale or exercise, or (iii) the content of any materials forwarded to
the ADR Holders on behalf of the Company in connection with the rights
distribution.
Notwithstanding anything herein or in the Deposit Agreement to the
contrary, if registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate may be required in
order for the Company to offer such rights or such securities to Holders and to
sell the securities represented by such rights, the Depositary will not
distribute such rights to the Holders (i) unless and until a registration
statement under the Securities Act (or other applicable law) covering such
offering is in effect or (ii) unless the Company furnishes the Depositary
opinion(s) of counsel for the Company in the United States and counsel to the
Company in any other applicable country in which rights would be distributed, in
each case satisfactory to the Depositary, to the effect that the offering and
sale of such securities to Holders and Beneficial Owners are exempt from, or do
not require registration under, the provisions of the Securities Act or any
other applicable laws. In the event that the Company, the Depositary or the
A-21
Custodian shall be required to withhold and does withhold from any distribution
of property (including rights) an amount on account of taxes or other
governmental charges, the amount distributed to the Holders of ADSs representing
such Deposited Securities shall be reduced accordingly. In the event that the
Depositary determines that any distribution in property (including Shares and
rights to subscribe therefor) is subject to any tax or other governmental
charges which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares and rights to
subscribe therefor) in such amounts and in such manner, including by public or
private sale, as the Depositary deems necessary and practicable to pay any such
taxes or charges. Because Brazilian law presently does not contemplate the
issuance of rights in negotiable form and the possibility of such issuance is
unlikely, a liquid market for rights may not exist, and this may adversely
affect (1) the ability of the Depositary to dispose of such rights or (2) the
amount the Depositary would realize upon disposal of rights.
It is understood and agreed that Holders generally, or any Holder in
particular, may not be given the opportunity to receive or exercise rights on
the same terms and conditions as the holders of Shares or to exercise such
rights. Nothing herein or in the Deposit Agreement shall obligate the Company to
file any registration statement in respect of any rights or Shares or other
securities to be acquired upon the exercise of such rights.
Upon receipt of a notice indicating that the Company wishes property other
than cash, Shares or rights to purchase additional Shares, to be made to Holders
of ADSs, the Depositary shall determine whether such distribution to Holders is
lawful and reasonably practicable. The Depositary shall not make such
distribution unless (i) the Company shall have requested the Depositary to make
such distribution to Holders, (ii) the Depositary shall have received the
A-22
documentation contemplated in the Deposit Agreement and (iii) the Depositary
shall have determined that such distribution is reasonably practicable. Upon
satisfaction of such conditions, the Depositary shall distribute the property so
received to the Holders of record, as of the ADS Record Date, in proportion to
the number of ADSs held by them respectively and in such manner as the
Depositary may deem practicable for accomplishing such distribution ((i) upon
receipt of payment or net of the applicable fees and charges of, and expenses
incurred by, the Depositary, and (ii) net of any taxes withheld). The Depositary
may dispose of all or a portion of the property so distributed and deposited, in
such amounts and in such manner (including public or private sale) as the
Depositary may deem practicable or necessary to satisfy any taxes (including
applicable interest and penalties) or other governmental charges applicable to
the distribution.
If the conditions above are not satisfied, the Depositary shall sell or
cause such property to be sold in a public or private sale, at such place or
places and upon such terms as it may deem proper and shall (i) cause the
proceeds of such sale, if any, to be converted into Dollars and (ii) distribute
the proceeds of such conversion received by the Depositary (net of (a)
applicable fees and charges of, and expenses incurred by, the Depositary and (b)
taxes) to the Holders upon the terms hereof and of the Deposit Agreement. If the
Depositary is unable to sell such property, the Depositary may dispose of such
property for the account of the Holders in any way it deems reasonably
practicable under the circumstances.
(15) Redemption. Upon timely receipt of notice from the Company that it
intends to exercise its right of redemption in respect of any of the Deposited
Securities, and a satisfactory opinion of counsel, and upon determining that
such proposed redemption is practicable, the Depositary shall (to the extent
practicable) provide to each Holder a notice setting forth the Company's
A-23
intention to exercise the redemption rights and any other particulars set forth
in the Company's notice to the Depositary. Upon receipt of confirmation that the
redemption has taken place and that funds representing the redemption price have
been received, the Depositary shall convert, transfer, distribute the proceeds
(net of applicable (a) fees and charges of, and expenses incurred by, the
Depositary, and (b) taxes), retire ADSs and cancel ADRs upon delivery of such
ADSs by Holders thereof upon the terms of the Deposit Agreement. If less than
all outstanding Deposited Securities are redeemed, the ADSs to be retired will
be selected by lot or on a pro rata basis, as may be determined by the
Depositary. The redemption price per ADS shall be the dollar equivalent of per
share amount received by the Depositary upon the redemption of the Deposited
Securities represented by American Depositary Shares (subject to the terms of
the Deposit Agreement and the applicable fees and charges of, and expenses
incurred by, the Depositary, and taxes) multiplied by the number of Units or
Deposited Securities represented by each ADS redeemed.
(16) Fixing of ADS Record Date. Whenever the Depositary shall receive
notice of the fixing of a record date by the Company for the determination of
holders of Deposited Securities entitled to receive any distribution (whether in
cash, Shares, rights or other distribution), or whenever for any reason the
Depositary causes a change in the number of Shares that are represented by each
ADS, or whenever the Depositary shall receive notice of any meeting of, or
solicitation of consents or proxies of, holders of Shares or other Deposited
Securities, or whenever the Depositary shall find it necessary or convenient in
connection with the giving of any notice, or any other matter, the Depositary,
after consultation with the Company, shall fix a record date ("ADS Record Date")
for the determination of the Holders of Receipts who shall be entitled to
receive such distribution, to give instructions for the exercise of voting
A-24
rights at any such meeting, or to give or withhold such consent, or to receive
such notice or solicitation or to otherwise take action, or to exercise the
rights of Holders with respect to such changed number of Shares represented by
each ADS. Subject to applicable law and the terms and conditions of this Receipt
and the Deposit Agreement, only the Holders of record at the close of business
in New York on such ADS Record Date shall be entitled to receive such
distributions, to give such instructions, to receive such notice or
solicitation, or otherwise take action.
(17) Voting of Deposited Securities. The Shares are non-voting, except in
certain limited circumstances. The following provisions of this Article (17)
shall apply solely in those circumstances in which the Shares are entitled to
vote. As soon as practicable after receipt of notice of any meeting at which the
holders of Deposited Securities are entitled to vote, or of solicitation of
consents or proxies from holders of Deposited Securities, the Depositary shall
fix the ADS Record Date in respect of such meeting or solicitation of such
consent or proxy. The Depositary shall (if requested in writing in a timely
manner by the Company, at the Company's expense and provided no U.S. legal
prohibitions exist) distribute to Holders as of the ADS Record Date: (a) such
notice of meeting or solicitation of consent or proxies; (b) a statement that
the Holders as of the ADS Record Date will be entitled, subject to any
applicable law, the Company's Estatuto Social and the provisions of or governing
Deposited Securities (which provisions, if any, shall be summarized in pertinent
part by the Company), to instruct the Depositary as to the exercise of the
voting rights, if any, pertaining to the Deposited Securities represented by
such Holder's ADSs; and (c) a brief statement as to the manner in which such
voting instructions may be given, including a statement setting forth the action
to be taken by the Depositary if voting instructions are received that fail to
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specify the manner in which such Holder's ADSs are to be voted. Upon the timely
receipt of voting instructions from a Holder of ADSs as of the ADS Record Date
in the manner specified by the Depositary, the Depositary shall endeavor,
insofar as practicable and permitted under applicable law and the provisions of
the Estatuto Social of the Company and the provisions of the Deposited
Securities, to vote, or cause the Custodian to vote, the Deposited Securities
represented by ADSs held by such Holder in accordance with such instructions.
Neither the Depositary nor the Custodian shall under any circumstances
exercise any discretion as to voting, and neither the Depositary nor the
Custodian shall vote, attempt to exercise the right to vote, or in any way make
use of, for purposes of establishing a quorum or otherwise, the Deposited
Securities represented by ADSs, except pursuant to and in accordance with the
voting instructions timely received from Holders or as otherwise contemplated
herein. If the Depositary timely receives voting instructions from a Holder that
fail to specify the manner in which the Depositary is to vote the Deposited
Securities represented by such Holder's ADSs, the Depositary will deem such
Holder (unless otherwise specified in the notice distributed to Holders) to have
instructed the Depositary to vote in favor of the items set forth in such
instructions. Deposited Securities represented by ADSs for which no timely
voting instructions are received by the Depositary from the Holder shall not be
voted. Notwithstanding anything else contained herein, the Depositary shall, if
so requested in writing by the Company, represent all Deposited Securities
(whether or not voting instructions have been received in respect of such
Deposited Securities from Holders as of the ADS Record Date) for the sole
purpose of establishing quorum at a meeting of shareholders. Notwithstanding
anything else contained in the Deposit Agreement or this Receipt, the Depositary
shall not have any obligation to take any action with respect to any meeting, or
solicitation or consents or proxies, of holders of Shares or other Deposited
A-26
Securities if the taking of such action would violate U.S. laws. The Company
agrees to take any and all actions reasonably necessary to enable Holders and
Beneficial Owners to exercise the voting rights accruing to the Deposited
Securities and to deliver to the Depositary an opinion of U.S. counsel
addressing any actions requested to be taken if so requested by the Depositary.
It is understood and agreed that Holders generally or any Holder in particular
may not receive the notice described above with sufficient time to enable the
Holder to return voting instructions to the Depositary in a timely manner.
(18) Changes Affecting Deposited Securities. Upon any change in nominal or
par value, split-up, cancellation, consolidation or any other reclassification
of Deposited Securities, or upon any recapitalization, reorganization, merger or
consolidation or sale of assets affecting the Company or to which it otherwise
is a party, any securities which shall be received by the Depositary or the
Custodian in exchange for, or in conversion of or replacement of or otherwise in
respect of, such Deposited Securities shall, to the extent permitted by law, be
treated as new Deposited Securities under the Deposit Agreement, and the
Receipts shall, subject to the provisions of the Deposit Agreement and
applicable law, evidence ADSs representing the right to receive such additional
securities. Alternatively, the Depositary may, with the Company's approval, and
shall, if the Company shall so request, subject to the terms of the Deposit
Agreement and receipt of satisfactory documentation contemplated by the Deposit
Agreement, execute and deliver additional Receipts as in the case of a stock
dividend on the Shares, or call for the surrender of outstanding Receipts to be
exchanged for new Receipts, in either case, as well as in the event of newly
A-27
deposited Shares, with necessary modifications to this form of Receipt contained
in this Receipt, specifically describing such new Deposited Securities and/or
corporate change. Notwithstanding the foregoing, in the event that any security
so received may not be lawfully distributed to some or all Holders, the
Depositary may, with the Company's approval, and shall if the Company requests,
subject to receipt of satisfactory legal documentation contemplated in the
Deposit Agreement, sell such securities at public or private sale, at such place
or places and upon such terms as it may deem proper and may allocate the net
proceeds of such sales (net of (a) fees and charges of, and expenses incurred
by, the Depositary and (b) taxes) for the account of the Holders otherwise
entitled to such securities and distribute the net proceeds so allocated to the
extent practicable as in the case of a distribution received in cash pursuant to
the Deposit Agreement. Immediately upon the occurrence of any such change,
conversion or exchange covered by this Article (18) in respect of the Deposited
Securities, the Depositary shall give notice thereof in writing to all Holders
at the Company's expense; provided that the Company shall provide the Depositary
with the content of such notice in writing. The Depositary shall not be
responsible for (i) any failure to determine that it may be lawful or feasible
to make such securities available to Holders in general or any Holder in
particular, (ii) any foreign exchange exposure or loss incurred in connection
with such sale, or (iii) any liability to the purchaser of such securities.
(19) Exoneration. Neither the Depositary nor the Company shall be
obligated to do or perform any act which is inconsistent with the provisions of
the Deposit Agreement or shall incur any liability (i) if the Depositary or the
Company shall be prevented or forbidden from, or subjected to any civil or
criminal penalty or restraint on account of, or delayed in, doing or performing
any act or thing required by the terms of the Deposit Agreement and this
Receipt, by reason of any provision of any present or future law or regulation
of the United States, Brazil or any other country, or of any other governmental
authority or regulatory authority or stock exchange, or by reason of any
provision, present or future of the Estatuto Social of the Company or any
A-28
provision of or governing any Deposited Securities, or by reason of any act of
God or war or other circumstances beyond its control (including, without
limitation, nationalization, expropriation, currency restrictions, work
stoppage, strikes, civil unrest, revolutions, rebellions, explosions and
computer failure), (ii) by reason of any exercise of, or failure to exercise,
any discretion provided for in the Deposit Agreement or in the Estatuto Social
of the Company or provisions of or governing Deposited Securities, (iii) for any
action or inaction in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, any
Beneficial Owner or authorized representative thereof, or any other person
believed by it in good faith to be competent to give such advice or information,
(iv) for any inability by a Holder or Beneficial Owner to benefit from any
distribution, offering, right or other benefit which is made available to
holders of Deposited Securities but is not, under the terms of the Deposit
Agreement, made available to Holders of ADS or (v) for any consequential or
punitive damages for any breach of the terms of the Deposit Agreement. The
Depositary, its controlling persons, its agents, the Custodian and the Company,
its controlling persons and its agents may rely and shall be protected in acting
upon any written notice, request or other document believed by it to be genuine
and to have been signed or presented by the proper party or parties. No
disclaimer of liability under the Securities Act is intended by any provision of
the Deposit Agreement or this Receipt.
(20) Standard of Care. The Company and its agents assume no obligation and
shall not be subject to any liability under the Deposit Agreement or this
Receipt to any Holder(s) or Beneficial Owner(s) or other persons, except that
the Company and its agents agree to perform their obligations specifically set
forth in the Deposit Agreement and this Receipt without negligence or bad faith.
The Depositary and its agents assume no obligation and shall not be subject to
A-29
any liability under the Deposit Agreement or the Receipts to any Holder(s) or
Beneficial Owner(s) or other persons, except that the Depositary and its agents
agree to perform their obligations specifically set forth in the Deposit
Agreement without negligence or bad faith. The Depositary and its agents shall
not be liable for any failure to carry out any instructions to vote any of the
Deposited Securities, or for the manner in which any vote is cast or the effect
of any vote, provided that any such action or omission is in good faith and in
accordance with the terms of the Deposit Agreement. The Depositary shall not
incur any liability for any failure to determine that any distribution or action
may be lawful or reasonably practicable, for the content of any information
submitted to it by the Company for distribution to the Holders or for any
inaccuracy of any translation thereof, for any investment risk associated with
acquiring an interest in the Deposited Securities, for the validity or worth of
the Deposited Securities or for any tax consequences that may result from the
ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of
any third party, for allowing any rights to lapse upon the terms of the Deposit
Agreement or for the failure or timeliness of any notice from the Company.
(21) Resignation and Removal of the Depositary: Appointment of Successor
Depositary. The Depositary may at any time resign as Depositary under the
Deposit Agreement by written notice of resignation delivered to the Company,
such resignation to be effective on the earlier of (i) the 90th day after
delivery thereof to the Company, or (ii) upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Company by written
notice of such removal which notice shall be effective upon the appointment of a
successor depositary and its acceptance of such appointment as provided in the
Deposit Agreement. In case at any time the Depositary acting hereunder shall
A-30
resign or be removed, the Company shall use its best efforts to appoint a
successor depositary, which shall be a bank or trust company having an office in
the Borough of Manhattan, the City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Company an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed (except as required by applicable
law), shall become fully vested with all the rights, powers, duties and
obligations of its predecessor. The predecessor depositary, upon payment of all
sums due it and on the written request of the Company, shall (i) execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder (other than as contemplated in the Deposit
Agreement), (ii) duly assign, transfer and deliver all right, title and interest
to the Deposited Securities to such successor, and (iii) deliver to such
successor a list of the Holders of all outstanding Receipts and such other
information relating to Receipts and Holders thereof as the successor may
reasonably request. Any such successor depositary shall promptly provide notice
of its appointment to such Holders. Any corporation into or with which the
Depositary may be merged or consolidated shall be the successor of the
Depositary without the execution or filing of any document or any further act.
(22) Amendment/Supplement. Subject to the terms and conditions of this
Article 22, the Deposit Agreement and applicable law, this Receipt and any
provisions of the Deposit Agreement may at any time and from time to time be
amended or supplemented by written agreement between the Company and the
Depositary in any respect which they may deem necessary or desirable without the
prior written consent of the Holders or Beneficial Owners. Any amendment or
supplement which shall impose or increase any fees or charges (other than the
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
A-31
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding
Receipts until the expiration of 60 days after notice of such amendment or
supplement shall have been given to the Holders of outstanding Receipts. The
parties hereto agree that 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 or (b) the ADSs 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 materially prejudice any substantial rights of Holders or Beneficial
Owners. Every Holder and Beneficial Owner at the time any amendment or
supplement so becomes effective shall be deemed, by continuing to hold such
ADS(s), to consent and agree to such amendment or supplement and to be bound by
the Deposit Agreement as amended or supplemented thereby. In no event shall any
amendment or supplement impair the right of the Holder to surrender such Receipt
and receive therefor the Deposited Securities represented thereby, except in
order to comply with mandatory provisions of applicable law. Notwithstanding the
foregoing, if any governmental body should adopt new laws, rules or regulations
which would require amendment or supplement of the Deposit Agreement to ensure
compliance therewith, the Company and the Depositary may amend or supplement the
Deposit Agreement and the Receipt at any time in accordance with such changed
laws, rules or regulations. 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 with such laws, or rules or regulations.
A-32
(23) Termination. The Depositary shall, at any time at the written
direction of the Company, terminate the Deposit Agreement by providing notice,
of such termination to the Holders of all Receipts then outstanding at least 90
days prior to the date fixed in such notice for such termination. If 90 days
shall have expired after (i) the Depositary shall have delivered to the Company
a written notice of its election to resign, or (ii) the Company shall have
delivered to the Depositary a written notice of the removal of the Depositary,
and in either case a successor depositary shall not have been appointed and
accepted its appointment as provided herein and in the Deposit Agreement, the
Depositary may terminate the Deposit Agreement by providing notice of such
termination to the Holders of all Receipts then outstanding at least 30 days
prior to the date fixed for such termination. On and after the date of
termination of the Deposit Agreement, the Holder will, upon surrender of such
Holder's Receipt(s) at the Principal Office of the Depositary, upon the payment
of the charges of the Depositary for the surrender of ADSs referred to in
Article (2) hereof and in the Deposit Agreement and subject to the conditions
and restrictions therein set forth, and upon payment of any applicable taxes or
governmental charges, be entitled to Delivery, to him or upon his order, of the
amount of Deposited Securities represented by such Receipt. If any Receipts
shall remain outstanding after the date of termination of the Deposit Agreement,
the Registrar thereafter shall discontinue the registration of transfers of
Receipts, and the Depositary shall suspend the distribution of dividends to the
Holders thereof, and shall not give any further notices or perform any further
acts under the Deposit Agreement, except that the Depositary shall continue to
collect dividends and other distributions pertaining to Deposited Securities,
shall sell rights as provided in the Deposit Agreement, and shall continue to
deliver Deposited Securities, subject to the conditions and restrictions set
forth in the Deposit Agreement, together with any dividends or other
A-33
distributions received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for Receipts surrendered to the
Depositary (after deducting, or charging, as the case may be, in each case the
charges of the Depositary for the surrender of a Receipt, any expenses for the
account of the Holder in accordance with the terms and conditions of the Deposit
Agreement and any applicable taxes or governmental charges or assessments). At
any time after the expiration of six months from the date of termination of the
Deposit Agreement, the Depositary may sell the Deposited Securities then held
hereunder and may thereafter hold uninvested the net proceeds of any such sale,
together with any other cash then held by it hereunder, in an unsegregated
account, without liability for interest for the pro rata benefit of the Holders
whose Receipts have not theretofore been surrendered. After making such sale,
the Depositary shall be discharged from all obligations under the Deposit
Agreement with respect to the Receipts and the Shares, the Deposited Securities
and the ADSs, except to account for such net proceeds and other cash (after
deducting, or charging, as the case may be, in each case the charges of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Holder in accordance with the terms and conditions of the Deposit Agreement and
any applicable taxes or governmental charges or assessments). Upon the
termination of the Deposit Agreement, the Company shall be discharged from all
obligations under the Deposit Agreement except as set forth in the Deposit
Agreement.
(24) Compliance with U.S. Securities Laws; Regulatory Compliance.
Notwithstanding any provisions in this Receipt or the Deposit Agreement to the
contrary, the withdrawal or delivery of Deposited Securities will not be
suspended by the Company or the Depositary except as would be permitted by
Section I.A.(1) of the General Instructions to the Form F-6 Registration
Statement, as amended from time to time, under the Securities Act of 1933.
A-34
The Depositary and the Company have confirmed to each other that, for as
long as the Deposit Agreement is in effect, they shall comply with any
requirements for registration of the amount of Deposited Securities with the
Central Bank of Brazil and furnish the Brazilian securities regulatory authority
(the Comissao de Valores Mobiliarios) and the Central Bank of Brazil such
information and documents related to the Deposited Securities, the Receipts and
the Depositary's obligations as may be requested by such authorities from time
to time pursuant to paragraph 3, article 3 of Regulation Annex V to Resolution
1.289.87 (as published in Resolution 1.927/92) of the Brazilian National
Monetary Council. In the event that the Depositary or the Custodian shall be
advised in writing (the "Legal Warning") by Brazilian counsel reasonably
satisfactory to the Depositary that the Depositary or the Custodian reasonably
could be subject to criminal or civil liabilities as a result of the Company
having failed to provide to the CVM or the Central Bank of Brazil such
information or documents available through the Company, the Depositary will
immediately send a copy of the Legal Warning to the Company, shall have the
right to immediately resign as Depositary by written notice to the Company and
will not be subject to any liability hereunder for such resignation or such
determination, and the Company agrees to indemnify the Depositary, the Custodian
and any of their respective officers, directors, employees, and agents against,
and hold each of them harmless from any loss or liability of any kind incurred
that arises under Section 7.9 of the Deposit Agreement. Upon effectiveness of
such resignation, the Depositary shall otherwise be discharged from all of its
obligations under the Deposit Agreement. Resignation pursuant to this paragraph
shall be effected in accordance with Article (21); provided that, if the Company
fails to appoint a new depositary within ninety (90) days of such resignation,
A-35
the Deposit Agreement shall be terminated in accordance with Article (23) hereof
and the Company or its designated agents will assume the obligations stated as
the obligations of the Depositary in such Article.
(25) Certain Rights of the Depositary: Limitations. Subject to the further
terms and provisions of this Article (25), the Depositary, its Affiliates and
their agents, on their own behalf, may own and deal in any class of securities
of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs
against evidence of rights to receive Shares from the Company, any agent of the
Company or any custodian, registrar, transfer agent, clearing agency or other
entity involved in ownership or transaction records in respect of the Shares.
Such evidence of rights shall consist of written blanket or specific guarantees
of ownership of Shares. In its capacity as Depositary, the Depositary shall not
lend Shares or ADSs; provided, however, that the Depositary may (i) issue ADSs
prior to the receipt of Shares pursuant to Section 2.3 of the Deposit Agreement
and (ii) deliver Shares prior to the receipt of ADSs for withdrawal of Deposited
Securities pursuant to Section 2.7 of the Deposit Agreement, including ADSs
which were issued under (i) above but for which Shares may not have been
received (each such transaction a "Pre-Release Transaction"). The Depositary may
receive ADSs in lieu of Shares under (i) above and receive Shares in lieu of
ADSs under (ii) above. Each such Pre-Release Transaction will be (a) accompanied
by or subject to a written agreement whereby the person or entity (the
"Applicant") to whom ADSs or Shares are to be delivered (1) represents that at
the time of the Pre-Release Transaction the Applicant or its customer owns the
Shares or ADSs that are to be delivered by the Applicant under such Pre-Release
Transaction, (2) agrees to indicate the Depositary as owner of such Shares or
ADSs in its records and to hold such Shares or ADSs in trust for the Depositary
until such Shares or ADSs are delivered to the Depositary or the Custodian, (3)
A-36
unconditionally guarantees to deliver to the Depositary or the Custodian, as
applicable, such Shares or ADSs and (4) agrees to any additional restrictions or
requirements that the Depositary deems appropriate, (b) at all times fully
collateralized with cash, U.S. government securities or such other collateral as
the Depositary deems appropriate, (c) terminable by the Depositary on not more
than five (5) business days' notice and (d) subject to such further indemnities
and credit regulations as the Depositary deems appropriate. The Depositary will
normally limit the number of ADSs and Shares involved in such Pre-Release
Transactions at any one time to thirty percent (30%) of the ADSs outstanding
(without giving effect to ADSs outstanding under (i) above), provided, however,
that the Depositary reserves the right to change or disregard such limit from
time to time as it deems appropriate. The Depositary may also set limits with
respect to the number of ADSs and Shares involved in Pre-Release Transactions
with any one person on a case by case basis as it deems appropriate. The
Depositary may retain for its own account any compensation received by it in
conjunction with the foregoing. Collateral provided pursuant to (b) above, but
not earnings thereon, shall be held for the benefit of the Holders (other than
the Applicant).
A-37
(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and
transfer(s) unto ____________________________ whose taxpayer identification
number is ____________________________ and whose address including postal zip
code is ____________________________, the within Receipt and all rights
thereunder, hereby irrevocably constituting and appointing
____________________________ attorney-in-fact to transfer said Receipt on the
books of the Depositary with full power of substitution in the premises.
Dated: Name: ______________________________________
By:
Title:
NOTICE: The signature of the Holder to this
assignment must correspond with the name as
written upon the face of the within
instrument in every particular, without
alteration or enlargement or any change
whatsoever.
If the endorsement be executed by an attorney, executor, administrator, trustee
or guardian, the person executing the endorsement must give his/her full title
in such capacity and proper evidence of authority to act in such capacity, if
not on file with the Depositary, must be forwarded with this Receipt.
_________________________
SIGNATURE GUARANTEED
All endorsements or assignments of Receipts must be guaranteed by a member of a
Medallion Signature Program approved by the Securities Transfer Association,
Inc.
A-38
Legends
The Receipts issued in respect of Partial Entitlement American Depositary Shares
shall bear the following legend on the face of the Receipt: "This Receipt
evidences American Depositary Shares representing `partial entitlement'
Preferred Shares of COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG and as such do
not entitle the holders thereof to the same per-share entitlement as other
Preferred Shares (which are "full entitlement" Preferred Shares) issued and
outstanding at such time. The American Depositary Shares represented by this
Receipt shall entitle holders to distributions and entitlements identical to
other American Depositary Shares when the Preferred Shares represented by such
American Depositary Shares become "full entitlement" Preferred Shares.
A-39
EXHIBIT B
FEE SCHEDULE
DEPOSITARY FEES AND RELATED CHARGES
All capitalized terms used but not otherwise defined herein shall
have the meaning given to such terms in the Deposit Agreement.
I. Depositary Fees
The Company, the Holders, the Beneficial Owners and the persons depositing
Shares or surrendering ADSs for cancellation agree to pay the following fees of
the Depositary:
--------------------------------------------------------------------------------------------------------------------
Service Rate By Whom Paid
--------------------------------------------------------------------------------------------------------------------
(1) Issuance of ADSs upon deposit Up to $5.00 per 100 ADSs (or fraction thereof) Person for whom deposits
of Shares (excluding issuances issued. are made or person
contemplated by paragraphs receiving ADSs.
(3)(b) and (5) below).
--------------------------------------------------------------------------------------------------------------------
(2) Delivery of Deposited Up to $5.00 per 100 ADSs (or fraction thereof) Person surrendering ADSs
Securities, property and cash surrendered. or making withdrawal.
against surrender of ADSs.
--------------------------------------------------------------------------------------------------------------------
(3) Distribution of (a) cash No fee, so long as prohibited by the exchange Person to whom
dividend or (b) ADSs pursuant upon which the ADSs are listed. If the distribution is made.
to stock dividends (or other charging of such fee is not prohibited, the
free distribution of stock). fees specified in (1) above shall be payable in
respect of a distribution of ADSs pursuant to
stock dividends (or other free distribution of
stock) and the fees specified in (4) below
shall be payable in respect of distributions of
cash.
--------------------------------------------------------------------------------------------------------------------
(4) Distribution of cash proceeds Up to $2.00 per 100 ADSs (or fraction thereof) Person to whom
(i.e., upon sale of rights and held. distribution is made.
other entitlements).
--------------------------------------------------------------------------------------------------------------------
(5) Distribution of ADSs pursuant Up to $5.00 per 100 ADSs (or fraction thereof) Person to whom
to exercise of rights. issued. distribution is made.
--------------------------------------------------------------------------------------------------------------------
B-1
II. Charges
Holders, Beneficial Owners, persons depositing Shares for deposit and
persons surrendering ADSs for cancellation and for the purpose of withdrawing
Deposited Securities shall be responsible for the following charges:
(i) taxes (including applicable interest and penalties) and other governmental
charges;
(ii) such registration fees as may from time to time be in effect for the
registration of Shares or other Deposited Securities on the share register
and applicable to transfers of Shares or other Deposited Securities to or
from the name of the Custodian, the Depositary or any nominees upon the
making of deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery expenses as are
expressly provided in the Deposit Agreement to be at the expense of the
person depositing Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary in the conversion of
foreign currency;
(v) such fees and expenses as are incurred by the Depositary in connection
with compliance with exchange control regulations and other regulatory
requirements applicable to Shares, Deposited Securities, ADSs and ADRs;
and
(vi) the fees and expenses incurred by the Depositary in connection with the
delivery of Deposited Securities.
B-2
