--------------------------------------------------------------------------------
DEPOSIT AGREEMENT
--------------------------------------------------------------------------------
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 ISSUED HEREUNDER
--------------------------------------------------------------------------------
Dated as of May [__], 2007
--------------------------------------------------------------------------------
ARTICLE I
DEFINITIONS....................................................................2
SECTION 1.1 "ADS Record Date"...........................................2
SECTION 1.2 "Affiliate".................................................2
SECTION 1.3 "American Depositary Share(s)" and "ADS(s)".................2
SECTION 1.4 "Applicant".................................................3
SECTION 1.5 "Banco Central do Brasil"...................................3
SECTION 1.6 "Beneficial Owner"..........................................3
SECTION 1.7 "Brazil"....................................................3
SECTION 1.8 "Business Day"..............................................4
SECTION 1.9 "Certificated ADS(s)".......................................4
SECTION 1.10 "Comissao de Valores Mobiliarios" or "CVM"..................4
SECTION 1.11 "Commission"................................................4
SECTION 1.12 "Companhia Brasileira de Liquidacao e Custodia".............4
SECTION 1.13 "Company"...................................................4
SECTION 1.14 "Custodian".................................................4
SECTION 1.15 "Deliver" and "Delivery"....................................5
SECTION 1.16 "Deposit Agreement".........................................5
SECTION 1.17 "Depositary"................................................5
SECTION 1.18 "Deposited Securities"......................................5
SECTION 1.19 "Dollars" and "$"...........................................5
SECTION 1.20 "DTC".......................................................5
SECTION 1.21 "DTC Participant"...........................................6
SECTION 1.22 "Exchange Act"..............................................6
SECTION 1.23 "Foreign Currency"..........................................6
SECTION 1.24 "Full Entitlement ADR(s)," "Full Entitlement ADS(s)"
and "Full Entitlement Share(s)".............................6
SECTION 1.25 "Holder"....................................................6
SECTION 1.26 "Partial Entitlement ADR(s)" and "Partial Entitlement
Share(s)"...................................................6
SECTION 1.27 "Pre-Release Transaction"...................................6
SECTION 1.28 "Principal Office"..........................................6
SECTION 1.29 "Real," "Reais" and "R$"....................................7
SECTION 1.30 "Receipt(s)," "American Depositary Receipt(s)" and
"ADR(s)"....................................................7
SECTION 1.31 "Registrar".................................................7
SECTION 1.32 "Restricted Securities".....................................7
SECTION 1.33 "Securities Act"............................................8
SECTION 1.34 "Share Registrar"...........................................8
SECTION 1.35 "Shares"....................................................8
SECTION 1.36 "Uncertificated ADS(s)".....................................9
SECTION 1.37 "United States" or "U.S."...................................9
i
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF SHARES; EXECUTION
AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS...............................9
SECTION 2.1 Appointment of Depositary...................................9
SECTION 2.2 Form and Transferability of ADSs............................9
SECTION 2.3 Deposit with Custodian.....................................13
SECTION 2.4 Registration and Safekeeping of Deposited Securities.......15
SECTION 2.5 Execution and Delivery of Receipts.........................15
SECTION 2.6 Transfer, Combination and Split-up of ADSs and Receipts....16
SECTION 2.7 Surrender of ADSs and Withdrawal of Deposited Securities...18
SECTION 2.8 Limitations on Execution and Delivery, Transfer, etc. of
ADSs; Suspension of Delivery, Transfer, etc................21
SECTION 2.9 Lost Receipts, etc.........................................22
SECTION 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records.....................................23
SECTION 2.11 Partial Entitlement ADSs...................................23
SECTION 2.12 Certificated/Uncertificated ADSs...........................25
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF ADSs..................27
SECTION 3.1 Proofs, Certificates and Other Information.................27
SECTION 3.2 Liability for Taxes and Other Charges......................29
SECTION 3.3 Representations and Warranties on Deposit of Shares........29
SECTION 3.4 Compliance with Information Requests.......................30
SECTION 3.5 Ownership Restrictions.....................................30
ARTICLE IV
THE DEPOSITED SECURITIES......................................................31
SECTION 4.1 Cash Distributions.........................................31
SECTION 4.2 Distribution in Shares.....................................32
SECTION 4.3 Elective Distributions in Cash or Shares...................34
SECTION 4.4 Distribution of Rights to Purchase Additional ADSs.........35
SECTION 4.5 Distributions Other Than Cash, Shares or Rights to
Purchase Shares............................................38
SECTION 4.6 Distributions with Respect to Deposited Securities in
Bearer Form................................................39
SECTION 4.7 Redemption.................................................40
SECTION 4.8 Conversion of Foreign Currency.............................41
SECTION 4.9 Fixing of ADS Record Date..................................42
SECTION 4.10 Voting of Deposited Securities.............................43
SECTION 4.11 Changes Affecting Deposited Securities.....................46
ii
SECTION 4.12 Available Information......................................47
SECTION 4.13 Reports....................................................47
SECTION 4.14 List of Holders............................................48
SECTION 4.15 Taxation...................................................48
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.................................50
SECTION 5.1 Maintenance of Office and Transfer Books by the Registrar..50
SECTION 5.2 Exoneration................................................51
SECTION 5.3 Standard of Care...........................................52
SECTION 5.4 Resignation and Removal of the Depositary; Appointment
of Successor Depositary....................................53
SECTION 5.5 The Custodian..............................................55
SECTION 5.6 Notices and Reports........................................56
SECTION 5.7 Issuance of Additional Shares, ADSs etc....................57
SECTION 5.8 Indemnification............................................59
SECTION 5.9 Fees and Charges of Depositary.............................60
SECTION 5.10 Pre-Release................................................62
SECTION 5.11 Restricted Securities Owners...............................64
ARTICLE VI
AMENDMENT AND TERMINATION.....................................................64
SECTION 6.1 Amendment/Supplement.......................................64
SECTION 6.2 Termination................................................65
ARTICLE VII
MISCELLANEOUS.................................................................67
SECTION 7.1 Counterparts...............................................67
SECTION 7.2 No Third-Party Beneficiaries...............................67
SECTION 7.3 Severability...............................................68
SECTION 7.4 Holders and Beneficial Owners as Parties; Binding Effect...68
SECTION 7.5 Notices....................................................68
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......................................73
SECTION 7.10 Titles and References......................................74
iii
DEPOSIT AGREEMENT, dated as of May [__], 2007, 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 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 voting common
shares, each with a par value of R$5.00 (the "Shares", as further defined in
Section 1.35), which are listed for trading on the Bolsa de Valores de Sao Paulo
(the "Sao Paulo Stock Exchange");
WHEREAS, the Company desires to establish with the Depositary an ADR
facility to provide, inter alia, for the deposit of the Shares and the creation
of American Depositary Shares representing the Shares so deposited;
WHEREAS, the Depositary is willing to act as the Depositary for such ADR
facility upon the terms set forth in this Deposit Agreement (hereinafter, the
"Deposit Agreement");
WHEREAS, any 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;
1
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 an 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 as
follows:
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 "ADS Record Date"shall have the meaning given to such term in
Section 4.9.
SECTION 1.2 "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 1.3 "American Depositary Share(s)" and "ADS(s)" shall mean the
rights and interests in the Deposited Securities (as hereinafter defined)
granted to the Holders and Beneficial Owners pursuant to the terms and
conditions of this Deposit Agreement and, if issued as Certificated ADS(s) (as
hereinafter defined), the American Depositary Receipt(s) issued hereunder to
evidence such ADSs. ADS(s) may be issued under the terms of this Deposit
Agreement in the form of (a) Certificated ADS(s), in which case the ADS(s) are
to be evidenced by ADR(s), or (b) Uncertificated ADS(s) (as hereinafter
defined), in which case the ADS(s) are not to be evidenced by ADR(s) but are
2
reflected on the direct registration system maintained by the Depositary for
such purposes under the terms of Section 2.12. Unless otherwise specified in
this Deposit Agreement or in any ADR, or unless the context otherwise requires,
any reference to ADS(s) shall include Certificated ADS(s) and Uncertificated
ADS(s), individually or collectively, as the context may require. Each ADS shall
represent one (1) Share, 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 1.4 "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 ADSs or any ADR(s)
evidencing 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
ADSs or any ADR(s) evidencing the ADSs owned by such Beneficial Owner. Unless
otherwise identified to the Depositary, a Holder shall be deemed to be the
Beneficial Owner of all the ADSs registered in his/her/its name.
SECTION 1.7 "Brazil" shall mean the Federative Republic of Brazil.
3
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 "Certificated ADS(s)" shall have the meaning given such term
in Section 2.12.
SECTION 1.10 "Comissao de Valores Mobiliarios" or "CVM" shall mean the
Brazilian securities and exchange commission.
SECTION 1.11 "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency thereto in
the United States.
SECTION 1.12 "Companhia Brasileira de Liquidacao e Custodia" shall mean
the Brazilian agency responsible for providing clearing services for securities
listed on the Sao Paulo Stock Exchange and its successors.
SECTION 1.13 "Company" shall mean Companhia Energetica de Minas Gerais -
CEMIG, a company organized and existing under the laws of Brazil, and its
successors.
SECTION 1.14 "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, substitute or additional custodian hereunder. The term "Custodian"
shall mean any Custodian individually or all Custodians collectively, as the
context requires.
4
SECTION 1.15 "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.
SECTION 1.16 "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 1.17 "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 1.18 "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 1.19 "Dollars" and "$" shall refer to the lawful currency of the
United States.
SECTION 1.20 "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.
5
SECTION 1.21 "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.
SECTION 1.22 "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as from time to time amended.
SECTION 1.23 "Foreign Currency" shall mean any currency other than
Dollars.
SECTION 1.24 "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 1.25 "Holder" shall mean the person in whose name the ADSs or any
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 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. Any reference to Holders of ADR(s) or ADS(s) in
this Deposit Agreement shall, in the context of the Uncertificated ADSs, refer
to the person(s) in whose name the Uncertificated ADSs are registered on the
books of the Depositary maintained for such purpose.
SECTION 1.26 "Partial Entitlement ADR(s)" and "Partial Entitlement
Share(s)" shall have the respective meanings set forth in Section 2.11.
SECTION 1.27 "Pre-Release Transaction" shall have the meaning set forth in
Section 5.10 hereof.
SECTION 1.28 "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 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, X.X.X.
6
SECTION 1.29 "Real," "Reais" and "R$" shall refer to the lawful currency
of Brazil.
SECTION 1.30 "Receipt(s)," "American Depositary Receipt(s)" and "ADR(s)"
shall mean any series of the certificate(s) issued by the Depositary to evidence
the American Depositary Shares issued under the terms of this Deposit Agreement
in the form of Certificated ADS(s), 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 1.31 "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 ADSs or any 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 1.32 "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
7
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 (x) covered by an effective resale registration
statement or (y) 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.
SECTION 1.33 "Securities Act" shall mean the United States Securities Act
of 1933, as from time to time amended.
SECTION 1.34 "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 1.35 "Shares" shall mean the Company's voting common shares (acoes
ordinarias), with a par value of R$5.00, 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, exchange, 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.
8
SECTION 1.36 "Uncertificated ADS(s)" shall have the meaning given such
term in Section 2.12.
SECTION 1.37 "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
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 ADSs.
9
(a) Form. Certificated ADSs 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 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 Certificated 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 signatory of the Depositary
or the Registrar, 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.
10
(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.
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 Certificated 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, in the case of Certificated ADSs, 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 an ADS (that is, the person in whose
name an ADS 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.
11
(d) Book-Entry Systems. The Depositary shall make arrangements for the
acceptance of the American Depositary Shares into DTC. All ADSs held through DTC
will be registered in the name of the nominee for DTC (currently "Cede & Co.").
As such, the nominee for DTC will be the only "Holder" of all ADSs held through
DTC. Unless issued by the Depositary as Uncertificated ADSs, the ADSs registered
in the name of Cede & Co. will be evidenced by a single ADR in the form of a
"Balance Certificate," which will provide that it represents the aggregate
number of ADSs from time to time indicated in the records of the Depositary as
being issued hereunder and that the aggregate number 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.
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 ADSs or any 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).
12
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
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 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
13
compliance with the rules and regulations of, the Banco Central do Brasil, the
Comissao de Valores Mobiliarios and any other applicable entity 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.
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.
14
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
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.
15
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
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, if applicable, 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 any 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 any such Receipt(s). The Depositary shall only issue American
Depositary Shares in whole numbers and, if applicable, 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 ADSs and Receipts.
16
(a) Transfer. The Registrar shall register the transfer of ADSs and any
Receipts (and of the ADSs represented thereby) on the books maintained for such
purpose. 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
(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 this 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 ADSs and any Receipts (and of the ADSs represented thereby) on
the books maintained for such purpose. 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
17
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 this Deposit Agreement and of applicable law, in each case as in 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
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, agreeing to be bound by the applicable
terms of this Deposit Agreement and agreeing to indemnify the Company and the
Depositary and 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) which may arise out of
acts performed or omitted by such co-transfer agent due to the negligence or bad
faith of such co-transfer agent.
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
18
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 this
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.
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
19
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 this 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 a Receipt evidencing a
number 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 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,
20
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 ADSs;
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 ADS or 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 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
21
of ADSs in particular instances may be refused, or the registration of transfers
of ADSs 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 or regulation, 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, 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 ADSs 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
22
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.
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
23
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
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. For the avoidance of doubt, Partial
Entitlement ADSs shall be considered as a separate type and class from Full
Entitlement ADSs.
24
SECTION 2.12 Certificated/Uncertificated ADSs.
Notwithstanding any other provision of this Deposit Agreement, the Depositary
may, at any time and from time to time, issue ADSs that are not evidenced by
ADRs (such ADSs, the "Uncertificated ADS(s)" and the ADS(s) evidenced by ADR(s),
the "Certificated ADS(s)"). When issuing and maintaining Uncertificated ADS(s)
under this Deposit Agreement, the Depositary shall at all times be subject to
(a) the standards applicable to registrars and transfer agents maintaining
direct registration systems for equity securities in New York and issuing
uncertificated securities under New York law, and (b) the terms of New York law
applicable to uncertificated equity securities. Uncertificated ADSs shall not be
represented by any instruments but shall be evidenced by registration in the
books of the Depositary maintained for such purpose. Holders of Uncertificated
ADSs, that are not subject to any registered pledges, liens, restrictions or
adverse claims of which the Depositary has written notice at such time, shall at
all times have the right to exchange the Uncertificated ADS(s) for Certificated
ADS(s) of the same type and class, subject in each case to applicable laws and
any rules and regulations the Depositary may have established in respect of the
Uncertificated ADSs. Holders of Certificated ADSs shall, if the Depositary
maintains a direct registration system for the ADSs, have the right to exchange
the Certificated ADSs for Uncertificated ADSs upon (i) the due surrender of the
25
Certificated ADS(s) to the Depositary for such purpose and (ii) the presentation
of a written request to that effect to the Depositary, subject in each case to
(w) all liens and restrictions noted on the ADR evidencing the Certificated
ADS(s) and all adverse claims of which the Depositary then has notice, (x) the
terms of this Deposit Agreement and the rules and regulations that the
Depositary may establish for such purposes hereunder, (y) applicable law, and
(z) payment of the Depositary fees and expenses applicable to such exchange of
Certificated ADS(s) for Uncertificated ADS(s). Uncertificated ADSs shall in all
material respects be identical to Certificated ADS(s) of the same type and
class, except that (1) no ADR(s) shall be, or shall need to be, issued to
evidence Uncertificated ADS(s), (2) Uncertificated ADS(s) shall, subject to the
terms of this Deposit Agreement, be transferable upon the same terms and
conditions as uncertificated securities under New York law, (3) the ownership of
Uncertificated ADS(s) shall be recorded on the books of the Depositary
maintained for such purpose and evidence of such ownership shall be reflected in
periodic statements provided by the Depositary to the Holder(s) in accordance
with applicable New York law, (4) the Depositary may from time to time, upon
notice to the Holders of Uncertificated ADSs affected thereby, establish rules
and regulations, and amend or supplement existing rules and regulations, as may
be deemed reasonably necessary to maintain Uncertificated ADS(s) on behalf of
Holders, provided that such rules and regulations do not conflict with the terms
of this Deposit Agreement and applicable law, (5) the Uncertificated ADS(s)
shall not 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
Uncertificated ADS(s) is/are registered on the books of the Depositary
maintained for such purpose, (6) the Depositary may, in connection with any
deposit of Shares resulting in the issuance of Uncertificated ADSs and with any
transfer, pledge, release and cancellation of Uncertificated ADSs, require the
prior receipt of such documentation as the Depositary may deem reasonably
appropriate, and (7) upon termination of this Deposit Agreement, the Depositary
shall not require Holders of Uncertificated ADSs to affirmatively instruct the
26
Depositary before remitting proceeds from the sale of the Deposited Securities
represented by such Holders' Uncertificated ADSs under the terms of Section 6.2
of this Deposit Agreement. When issuing ADSs under the terms of this Deposit
Agreement, including, without limitation, issuances pursuant to Sections 2.5,
4.2, 4.3, 4.4, 4.5 and 4.11, the Depositary may in its discretion determine to
issue Uncertificated ADSs rather than Certificated ADSs, unless otherwise
specifically instructed by the applicable Holder to issue Certificated ADSs. All
provisions and conditions of this Deposit Agreement shall apply to
Uncertificated ADSs to the same extent as to Certificated ADSs, except as
contemplated by this Section 2.12. The Depositary is authorized and directed to
take any and all actions and establish any and all procedures deemed reasonably
necessary to give effect to the terms of this Section 2.12. Any references in
this Deposit Agreement or any ADR(s) to the terms "American Depositary Share(s)"
or "ADS(s)" shall, unless the context otherwise requires, include Certificated
ADS(s) and Uncertificated ADS(s). Except as set forth in this Section 2.12 and
except as required by applicable law, the Uncertificated ADSs shall be treated
as ADSs issued and outstanding under the terms of this Deposit Agreement. In the
event that, in determining the rights and obligations of parties hereto with
respect to any Uncertificated ADSs, any conflict arises between (I) the terms of
this Deposit Agreement (other than this Section 2.12) and (II) the terms of this
Section 2.12, the terms and conditions set forth in this Section 2.12 shall be
controlling and shall govern the rights and obligations of the parties to this
Deposit Agreement pertaining to the Uncertificated ADSs.
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
27
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
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 ADS 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.
28
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
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 of ADSs, register the 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 this 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
29
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.
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 or regulations, 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
30
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
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. Nothing
herein shall be interpreted as obligating the Depositary or the Company to
ensure compliance with the ownership restrictions described in this Section 3.5.
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
31
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
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, or 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)
32
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
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.
33
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
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
34
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
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
35
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 is
not reasonably practicable to make the rights available to Holders or (iii) any
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 practicable. 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.
36
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
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.
37
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.
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
38
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.
(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 (x) cause the proceeds
of such sale, if any, to be converted into Dollars and (y) 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 ADSs 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
39
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.
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, 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 and, to the extent practicable,
the Depositary shall establish procedures deemed reasonably necessary to give
effect to the terms of this Section 4.7 for the exercise of redemption rights by
Holders. 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 any 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.
40
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
41
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 practicable or lawful, or
if 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 ADSs who shall be
entitled to receive such distribution, to give instructions for the exercise of
42
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
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. 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 thirty (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 Depositary as to the exercise of
the voting rights, if any, pertaining to the Deposited Securities represented by
43
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.
44
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.
Notwithstanding anything contained in the Deposit Agreement or any ADR,
the Depositary may, to the extent not prohibited by law, regulations or
applicable stock exchange requirements, in lieu of distribution of the materials
provided to the Depositary in connection with any meeting of, or solicitation of
consents or proxies from, holders of Deposited Securities, distribute to the
Holders a notice that provides Holders with a means to retrieve such materials
or receive such materials upon request (i.e., by reference to a website
containing the materials for retrieval or a contact for requesting copies of the
materials).
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.
45
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 any 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
Company's approval, and shall, if the Company shall so request, subject to the
terms of this 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, (i) issue and deliver
additional ADSs as in the case of a stock dividend on the Shares, (ii) amend
this Deposit Agreement and the applicable ADRs, (iii) amend the applicable
Registration Statement(s) on Form F-6 as filed with the Commission in respect of
the ADSs, (iv) call for the surrender of outstanding Receipts to be exchanged
for new Receipts, and (v) take such other actions as are appropriate to reflect
the transaction with respect to the ADSs. 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
46
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.
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 retrieved from the Commission's website (xxx.xxx.xxx) and
can be inspected and copied at the public reference facilities maintained by the
Commission located at 000 X Xxxxxx, X.X., Xxxxxxxxxx X.X. 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.
47
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
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,
48
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
applicable governmental authority) therefor, in each case, in a form reasonably
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 of 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
49
ADSs, including without limitation, tax consequences resulting from the Company
(or any of its subsidiaries) being treated as a "Passive Foreign Investment
Company" (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 issuance and delivery, registration of issuances,
cancellations, transfers, combination and split-up of ADSs, the acceptance for
surrender of ADSs for the purpose of withdrawal of Deposited Securities, and, if
applicable, to countersign any ADRs evidencing the ADSs so issued, transferred,
combined or split-up, in each case in accordance with the provisions of this
Deposit Agreement.
The Registrar shall keep books for the registration of issuances and
transfers of ADSs which at all reasonable times shall be open for inspection by
the Company and by the Holders of such ADSs, provided that such inspection shall
not be, to the Registrar's knowledge, for the purpose of communicating with
Holders of such ADSs 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 ADSs.
The Registrar may close the transfer books with respect to the ADSs, 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.
50
If any ADSs 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 issuances, cancellations, transfers,
combinations and split-ups of ADSs, and, if applicable, to countersign any ADRs
evidencing the ADSs so issued, transferred, combined or split-up, 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
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, acts of terrorism, 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
51
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.
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.
52
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
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
53
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
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 ADSs and such other information relating to ADSs and
Holders thereof as the successor may reasonably request. Any such successor
depositary shall promptly provide notice of its appointment to such Holders.
54
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
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.
55
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.
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 or 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
56
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 ADSs at the
Depositary's Principal Office, at the office of the Custodian and at any other
designated transfer office.
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
57
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
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
58
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.
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
59
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
(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
60
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.
Depositary fees payable upon (i) deposit of Shares against issuance of
ADSs and (ii) surrender of ADSs for cancellation and withdrawal of Deposited
Securities will be charged by the Depositary to the person to whom the ADSs so
issued are delivered (in the case of ADS issuances) and to the person who
delivers the ADSs for cancellation to the Depositary (in the case of ADS
cancellations). In the case of ADSs issued by the Depositary into DTC or
presented to the Depositary via DTC, the ADS issuance and cancellation fees will
be payable to the Depositary by the DTC Participant(s) receiving the ADSs from
the Depositary or the DTC Participant(s) surrendering the ADSs to the Depositary
for cancellation, as the case may be, on behalf of the Beneficial Owner(s) and
will be charged by the DTC Participant(s) to the account(s) of the applicable
Beneficial Owner(s) in accordance with the procedures and practices of the DTC
Participant(s) as in effect at the time. Depositary fees in respect of
distributions and the Depositary services fee are payable to the Depositary by
Holders as of the applicable ADS Record Date established by the Depositary. In
the case of distributions of cash, the amount of the applicable Depositary fees
is deducted by the Depositary from the funds being distributed. In the case of
distributions other than cash and the Depositary service fee, the Depositary
will invoice the applicable Holders as of the ADS Record Date established by the
Depositary. For ADSs held through DTC, the Depositary fees for distributions
61
other than cash and the Depositary service fee are charged by the Depositary to
the DTC Participants in accordance with the procedures and practices prescribed
by DTC from time to time and the DTC Participants in turn charge the amount of
such fees to the Beneficial Owners for whom they hold ADSs.
The Depositary may remit to the Company all or a portion of the Depositary
fees charged for the reimbursement of or reimburse the Company for certain
expenses incurred by the Company in respect of the ADR program established
pursuant to this Deposit Agreement upon such terms and conditions as the Company
and the Depositary may agree from time to time. 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.
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
62
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
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.
63
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 reasonably 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
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 ADSs
until the expiration of 60 days after notice of such amendment or supplement
shall have been given to the Holders of outstanding ADSs. 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
64
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, if applicable, as amended and supplemented thereby.
In no event shall any amendment or supplement impair the right of the Holder to
surrender such ADSs 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 any Receipts at any time in
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 ADSs 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
65
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 ADSs 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 an ADS will, upon surrender of such ADS and any Receipt
evidencing such ADS at the Principal Office of the Depositary, upon the payment
of the charges of the Depositary for the surrender of ADSs 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 ADS. If any ADSs shall remain outstanding after the date of
termination of this Deposit Agreement, the Registrar thereafter shall
discontinue the registration of transfers of ADSs, 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 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 ADSs
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 an ADS, 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
66
hereunder, in an unsegregated account, without liability for interest for the
pro rata benefit of the Holders whose ADSs 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 an ADS, 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.
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
67
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 any Receipt 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.
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.
68
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 Xxxxxxxxx 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
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
69
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
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
70
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
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
71
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.
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.
72
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 without the prior written consent of the other party.
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.
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 Banco Central do Brasil and furnish the CVM, the
Banco Central do Brasil and any other applicable entity 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, the
73
Banco Central do Brasil or any other applicable entity 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
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
74
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 issued in accordance with the terms hereof, or upon acquisition of any
beneficial interest therein.
COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG
By:
----------------------------------------
Name: Xxxxxx Xxxxxx xx Xxxxxx
Title: Chief Executive Officer
By:
----------------------------------------
Name: Luiz Xxxxxxxx Xxxxx
Title: Chief Financial Officer
CITIBANK, N.A.
By:
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-1
EXHIBIT A FORM OF RECEIPT
CUSIP Number:
American Depositary
Shares (each American
Depositary Share
representing one (1)
Fully Paid Common Shares,
each with a par value of R$5.00
EXHIBIT A
FORM OF FACE OF RECEIPT
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED COMMON 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 "ADSs"),
representing deposited voting common shares (acoes ordinarias), each with a par
value of R$5.00, including evidence of rights to receive such voting common
shares (the "Shares") of COMPANHIA ENERGETICA DE MINAS GERAIS - CEMIG, a company
A-1
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 one (1) Share 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
Xxxxxxxxx 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" or "ADRs"), all issued and to
be issued upon the terms and conditions set forth in the Deposit Agreement,
dated as of May [__], 2007 (as amended and supplemented 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 issued thereunder, with each
Holder and Beneficial Owner from time to time of ADSs, by accepting an ADS,
becoming bound by all the terms and provisions thereof. The Deposit Agreement
sets forth the rights and obligations of Holders and Beneficial Owners of ADSs
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 behalf and to take any and all actions contemplated in
A-2
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 of the Company, 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 is 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
A-3
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. 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 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
A-5
transfer of ADSs and this Receipt (and of the ADSs represented hereby) on the
books maintained for such purpose. The Depositary shall cancel this Receipt and
execute new Receipts evidencing the same aggregate number of ADSs as those
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 ADSs and this
Receipt (and of the ADSs represented hereby) on the books maintained for such
purpose. 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
A-6
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.
(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 ADS, 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 ADSs in particular
instances may be refused, or the registration of transfer of ADSs 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
A-7
faith, at any time or from time to time because of any requirement of law or
regulation, any government or governmental body or commission or any 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 ADSs
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 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.
(5) Compliance With Information Requests. Notwithstanding any other
provision of the Deposit Agreement or this Receipt, each Holder and Beneficial
A-8
Owner of the ADSs represented hereby agrees to comply with requests from the
Company pursuant to Brazilian law or regulations, 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 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. Nothing herein or in the Deposit
Agreement shall be interpreted as obligating the Depositary or the Company to
ensure compliance with the ownership restrictions described herein or in the
Deposit Agreement.
A-9
(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
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 of ADSs, register the 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
A-10
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.
(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, this Receipt 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 Company or of the Share 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 and this Receipt. Subject to Article (24) hereof and the terms of the
X-00
Xxxxxxx Xxxxxxxxx, the Depositary and the Registrar, as applicable, may withhold
the execution or delivery or registration of transfer of any Receipt or ADS 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:
(i) to any person depositing Shares or to whom ADSs are issued
upon the deposit of Shares, a fee not in excess of U.S.$5.00
per 100 ADSs (or fraction thereof) so issued under the terms
of the Deposit Agreement (excluding issuances as a result of
distributions described in paragraph (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 fraction thereof) so surrendered;
(iii) to any Holder of ADSs, a fee not in excess of U.S.$2.00 per
100 ADSs (or fraction thereof) held for the distribution of
cash proceeds or other cash distributions (i.e., sale of
rights and other entitlements);
(iv) to any Holder of ADSs, a fee not in excess of U.S.$5.00 per
100 ADSs (or fraction thereof) issued for (a) the distribution
of stock dividends or other free stock distributions or (b)
the exercise of rights to purchase additional ADSs
A-12
(v) to any Holder of ADSs, a fee not in excess of U.S. $5.00 per
100 ADSs (or fraction thereof) issued for the distribution of
securities other than ADSs or rights to purchase additional
ADSs (i.e., spin-off shares); and
(vi) to any person presenting a Receipt for transfer, a fee of U.S.
$1.50 per certificate presented for transfer.
In addition, Holders, Beneficial Owners, persons depositing Shares and
persons surrendering ADSs for cancellation and withdrawal of Deposited
Securities will be required to pay the following charges:
(a) taxes (including applicable interest and penalties) and other
governmental charges;
(b) 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;
(c) 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;
A-13
(d) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(e) 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
(f) the fees and expenses incurred by the Depositary in connection
with the delivery of Deposited Securities.
Depositary fees payable upon (i) deposit of Shares against issuance of
ADSs and (ii) surrender of ADSs for cancellation and withdrawal of Deposited
Securities will be charged by the Depositary to the person to whom the ADSs so
issued are delivered (in the case of ADS issuances) and to the person who
delivers the ADSs for cancellation to the Depositary (in the case of ADS
cancellations). In the case of ADSs issued by the Depositary into DTC or
presented to the Depositary via DTC, the ADS issuance and cancellation fees will
be payable to the Depositary by the DTC Participant(s) receiving the ADSs from
the Depositary or the DTC Participant(s) surrendering the ADSs to the Depositary
for cancellation, as the case may be, on behalf of the Beneficial Owner(s) and
will be charged by the DTC Participant(s) to the account(s) of the applicable
Beneficial Owner(s) in accordance with the procedures and practices of the DTC
Participant(s) as in effect at the time. Depositary fees in respect of
distributions and the Depositary services fee are payable to the Depositary by
Holders as of the applicable ADS Record Date established by the Depositary. In
the case of distributions of cash, the amount of the applicable Depositary fees
is deducted by the Depositary from the funds being distributed. In the case of
distributions other than cash and the Depositary service fee, the Depositary
A-14
will invoice the applicable Holders as of the ADS Record Date established by the
Depositary. For ADSs held through DTC, the Depositary fees for distributions
other than cash and the Depositary service fee are charged by the Depositary to
the DTC Participants in accordance with the procedures and practices prescribed
by DTC from time to time and the DTC Participants in turn charge the amount of
such fees to the Beneficial Owners for whom they hold ADSs.
The Depositary may remit to the Company all or a portion of the Depositary
fees charged for the reimbursement of or reimburse the Company for certain
expenses incurred by the Company in respect of the ADR program established
pursuant to the Deposit Agreement upon such terms and conditions as the Company
and the Depositary may agree from time to time. 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 Certificated 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, in the case of
Certificated ADSs, 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
A-15
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
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 retrieved from the Commission's website (xxx.xxx.xxx) and can
be inspected and copied at the public reference facilities maintained by the
Commission located at 000 X Xxxxxx, X.X., Xxxxxxxxxx X.X. 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.
A-16
The Registrar shall keep books for the registration of issuances and
transfers of ADSs which at all reasonable times shall be open for inspection by
the Company and by the Holders of such ADSs, provided that such inspection shall
not be, to the Registrar's knowledge, for the purpose of communicating with
Holders of such ADSs 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 ADSs.
The Registrar may close the transfer books with respect to the ADSs, 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 Xxxxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, X.X.X.
A-17
[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) 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 ADSs
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-18
If any distribution upon any Deposited Securities consists of a dividend
in, or 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 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 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 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-19
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 (b) fees and 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 or if the
Depositary did not receive satisfactory documentation set forth in the Deposit
Agreement, the Depositary shall, to the extent permitted by law, distribute to
Holders, on the basis of the same determination as is made in Brazil in 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
A-20
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.
Upon timely receipt by the Depositary of a notice indicating that the
Company wishes rights to subscribe for additional Shares or rights of any other
nature 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 about to lapse, the Depositary shall determine
A-21
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 practicable. 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 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 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
A-22
each case satisfactory to the 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 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.
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, upon consultation with the Company, 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 documentation contemplated in the Deposit
Agreement and (iii) the Depositary shall have determined that such distribution
A-23
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 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 (a)
applicable 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 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 satisfactory documentation within the terms of Section 5.7 of the
Deposit Agreement, the Depositary shall provide to each Holder a notice setting
forth the Company's intention to exercise the redemption rights and any other
particulars set forth in the Company's notice to the Depositary and, to the
A-24
extent practicable, the Depositary shall establish procedures deemed reasonably
necessary to give effect to the terms of Section 4.7 of the Deposit Agreement
for the exercise of redemption rights by Holders. 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 any 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 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
the Deposit Agreement and the applicable fees and charges of, and expenses
incurred by, the Depositary, and taxes) multiplied by the number of 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, solicitation of any consent 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 ADSs 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,
A-25
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. 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 (the Depositary having no
obligation to take any further action if the request shall not have been
received by the Depositary at least thirty (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 proxies; (b) a statement that
the Holders as of the ADS Record Date will be entitled, subject to any
applicable law, the provisions of the Deposit Agreement, 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,
A-26
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 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, the provisions of the Deposit Agreement, 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 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.
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
A-27
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 of consents or proxies, of holders of Shares or other 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.
Notwithstanding anything contained in the Deposit Agreement or this
Receipt, the Depositary may, to the extent not prohibited by law, regulations or
applicable stock exchange requirements, in lieu of distribution of the materials
provided to the Depositary in connection with any meeting of, or solicitation of
consents or proxies from, holders of Deposited Securities, distribute to the
Holders a notice that provides Holders with a means to retrieve such materials
or receive such materials upon request (i.e., by reference to a website
containing the materials for retrieval or a contact for requesting copies of the
materials).
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 any
Receipts shall, subject to the provisions of the Deposit Agreement and
A-28
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, (i) issue and deliver additional ADSs as in the case of a stock
dividend on the Shares, (ii) amend the Deposit Agreement and the applicable
ADRs, (iii) amend the applicable Registration Statement(s) on Form F-6 as filed
with the Commission in respect of the ADSs, (iv) call for the surrender of
outstanding Receipts to be exchanged for new Receipts, and (v) take such other
actions as are appropriate to reflect the transaction with respect to the ADSs.
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
A-29
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
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, acts of terrorism, 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
A-30
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 ADSs 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
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
A-31
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
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 ADSs and such other
A-32
information relating to ADSs 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
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding ADSs
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
A-33
and agree to such amendment or supplement and to be bound by the Deposit
Agreement and this Receipt as amended or supplemented thereby. In no event shall
any amendment or supplement impair the right of the Holder to surrender such
ADSs 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 this Receipt at any time in accordance with
such changed laws, rules or regulations. Such amendment or supplement to the
Deposit Agreement and this Receipt 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.
(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 ADSs 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 ADSs 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 ADS(s)
at the Principal Office of the Depositary, upon the payment of the charges of
A-34
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 ADS. If any ADSs shall remain outstanding after
the date of termination of the Deposit Agreement, the Registrar thereafter shall
discontinue the registration of transfers of ADSs, 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 distributions received with respect thereto
and the net proceeds of the sale of any rights or other property, in exchange
for ADSs 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 an
ADS, 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 ADSs 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 an ADS, any
A-35
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.
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
Banco Central do Brasil and furnish the CVM, the Banco Central do Brasil and any
other applicable entity 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, the Banco Central do
A-36
Brasil or any other applicable entity 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 or under the Deposit Agreement 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,
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
A-37
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)
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-38
(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-39
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' Common
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 Common
Shares (which are "full entitlement" Common 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 Common Shares represented by such American Depositary
Shares become "full entitlement" Common Shares.
A-40
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 U.S. $5.00 per 100 ADSs (or fraction Person depositing Shares
of Shares (excluding issuances thereof) issued. or person receiving ADSs.
as a result of distributions
described in paragraph (4)
below).
-------------------------------------------------------------------------------------------------------------------
(2) Delivery of Deposited Up to U.S. $5.00 per 100 ADSs (or fraction Person surrendering ADSs
Securities, property and cash thereof) surrendered. for purpose of withdrawal
against surrender of ADSs. of Deposited Securities or
person to whom Deposited
Securities are delivered.
-------------------------------------------------------------------------------------------------------------------
(3) Distribution of cash dividends Up to U.S. $2.00 per 100 ADSs (or fraction Person to whom
or other cash distributions thereof) held. distribution is made.
(i.e., sale of rights and
other entitlements).
-------------------------------------------------------------------------------------------------------------------
(4) Distribution of ADSs pursuant Up to U.S. $5.00 per 100 ADSs (or fraction Person to whom
to (i) stock dividends or thereof) issued. distribution is made.
other free stock
distributions, or (ii)
exercise of rights to purchase
additional ADSs.
-------------------------------------------------------------------------------------------------------------------
(5) Distribution of securities Up to U.S. $5.00 per 100 ADSs (or fraction Person to whom
other than ADSs or rights to thereof) issued. distribution is made.
purchase additional ADSs
(i.e., spin-off shares).
-------------------------------------------------------------------------------------------------------------------
(6) Transfer of ADRs. U.S. $1.50 per certificate presented for Person presenting
transfer. certificate for transfer.
-------------------------------------------------------------------------------------------------------------------
B-1
II. Charges
Holders, Beneficial Owners, persons depositing Shares 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 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.
B-2
