STOCKHOLDERS AGREEMENT OF COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG

Transcription

1 STOCKHOLDERS AGREEMENT OF COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG By this instrument and in the best form of law, the undersigned parties: (1) THE STATE OF MINAS GERAIS, a legal entity under Brazilian domestic public law, herein represented by its Governor Dr. Antonio Augusto Junho Anastasia, hereinafter referred to as the State, and (2) AGC ENERGIA S.A., a corporation duly constituted and existing in accordance with the laws of the Federal Republic of Brazil, with head office in the City of Belo Horizonte, State of Minas Gerais, at Avenida do Contorno 8123, District of Cidade Jardim, registered in the CNPJ/MF under number / , herein duly represented by its legal representative, and hereinafter referred to as AGC Energia, the State and AGC Energia hereinafter referred to if jointly as Stockholders and if individually as Stockholder, and with the participating consent of (3) BNDES PARTICIPAÇÕES S.A. BNDESPAR, a wholly-owned subsidiary of Banco Nacional de Desenvolvimento Econômico e Social BNDES, with head office in Brasília, Federal District, at Setor Bancário Sul, C.1, Bloco J, Edifício BNDES 12 th and 13 th Floors, and service office in the City of Rio de Janeiro, Rio de Janeiro State, at Avenida República do Chile 100 (part), registered in the CNP a under number / , represented in accordance with its bylaws, hereinafter referred to as BNDESPAR, General of the State 1

2 WHEREAS STATE OF MINAS GERAIS (A) (B) The State is the controlling stockholder of COMPANHIA ENERGÉTICA DE MINAS GERAIS - CEMIG ( the Company ), holder of 151,993,292, shares issued by the Company, representing 50.96% of the voting stock and 22.27% of the total stock of the Company; AGC Energia, on November 12, 2009, acquired 89,383,266 common shares issued by the Company, which with the stock dividend decided by the General Meeting of Stockholders of the Company of April 29, 2010, make up a total on today s date of 98,321,592 common shares issued by the company, representing 32.96% of the voting stock and 14.41% of the total stock of the company; (C) BNDESPAR has a significant interest in the profits of AGC Energia through exchangeable perpetual participative debentures issued on March 4, 2011 ( the Debentures ); (D) BNDESPAR may, on or after February 16, 2015 or the full settlement of the nonconvertible debentures issued by AGC Energia on March 4, 2011, which it owns, whichever shall be the earlier, become a significant stockholder of the Company through the exchange of the said Debentures for 38,522,400 common shares issued by the Company, representing, on today s date, 12.91% of the voting stock and 5.65% of the total stock of the Company; (E) (F) The Stockholders and BNDESPAR, as consenting party, deem it to be beneficial, for the good development of the Company and of its wholly-owned subsidiaries, subsidiaries, affiliated companies and the consortia in which it participates, to establish the rules that will regulate its relationships as direct stockholders of the Company and indirect stockholders of its wholly-owned subsidiaries, subsidiaries and affiliated companies; The desire and objective of the Stockholders is to keep the State as overall, isolated and sovereign controlling stockholder of the company, and to attribute to AGC Energia only some prerogatives for the purpose of contributing to the continuity of the Company s sustainable growth; General of the State 2

3 (G) STATE OF MINAS GERAIS The legal requirements, including those of Law 11938/95, which was approved by the Legislative Assembly of Minas Gerais and which authorized the State to dispose of shares in the Company, shall be obeyed, and the majority stockholding by the State, with all the rights and obligations inherent to such a majority stockholding, is hereby fully guaranteed; the Stockholders now decide to enter into this present Stockholders Agreement ( the Agreement ) in the terms of and for the purposes of Article 118 of Law 6404 of December 15, 1976 (as amended), which shall be governed by the following clauses and conditions: 1 Definitions 1.1 For the purposes of this Agreement, and without prejudice to other definitions established in this Agreement, the following definitions apply to the respective words/expressions: (i) (ii) Shares means all the shares in the share capital of the Company, existing on today s date and in future, including, but not limited to, those resulting from subscription, acquisition, stock bonuses, or stock splits or reverse splits. Agreement or Stockholders Agreement means this present Stockholders Agreement. (iii) Affiliated Company or Affiliated Companies means any legal entity in the decisions in the financial or operational policies of which the Company, directly or through other companies, holds or exercises the power of participation, without controlling it. For the purposes of this Stockholders Agreement, the terms Affiliated Company and Affiliated Companies shall include the consortia and joint ventures. (iv) Subsidiary or Subsidiaries means any legal entity in which the Company, directly or through other companies, holds the power of control, (i) in isolation, because it is holder of voting rights which permanently guarantee it dominance in the entity s decisions and the power of electing the majority of the managers, or (ii) because it participates in the control block regulated by a stockholders agreement or any other document. For the purposes of this Stockholders Agreement, the terms Subsidiary or Subsidiaries shall include the wholly-owned subsidiaries. General of the State 3

4 (v) Bylaws means the Company s Bylaws, as amended from time to time. (vi) Internal Regulations means the Internal Regulations of the Board of Directors of the Company. 1.2 Except when the context does not permit such interpretation, the definitions of this Stockholders Agreement shall be applied equally in their singular and plural forms. 2 Registered Capital 2.1 The Company s registered capital is R$ 3,412,072, (three billion, four hundred twelve million, seventy two thousand nine hundred and ten Reais), made up of 682,414,582 (six hundred eighty two million four hundred fourteen thousand five hundred eighty two) shares, of which 298,269,668 (two hundred ninety eight million two hundred sixty nine thousand six hundred sixty eight) are common shares and 384,144,914 (three hundred eighty four million one hundred forty four thousand nine hundred fourteen) are preferred shares. 2.2 On today s date the Stockholders hold the following Shares: Stockholder Common % Preferred % Total % State 151,993, ,993, AGC Energia 98,321, ,321, Dividend distribution targets and policy 3.1 Targets The Stockholders are in agreement with the targets sought by the Company, specified in its bylaws, duly approved by the General Meeting of Stockholders of the Company and currently in force, in the terms of the seventh and ninth paragraphs of Article 11 of its bylaws. The Stockholders agree that the said targets, described in Article 11, paragraphs five, six and seven of the bylaws shall be maintained by the Company during the period of validity of this Agreement, unless new events occur that are unpredictable by the parties and not imputable to them and which could reflect on the economy or on the management of the Company, which shall authorize alteration of the said targets to adjust them to the General of the State 4

5 supervening circumstances. 3.2 Maintenance of the present Dividend Distribution Policy The Stockholders agree with the dividend distribution policy specified in the bylaws of the Company, approved by the General Meeting of Stockholders, currently applied by the Company, in accordance with Article 28 of its bylaws and undertake to keep it unchanged during the period of validity of this Agreement, unless new events occur that are unpredictable by the parties and not imputable to them and which could reflect on the economy or on the management of the Company, which shall authorize alteration of the said dividend distribution policy to adjust it to the supervening circumstances. 3.3 Increase in the Registered Capital If they are necessary, increases in the registered capital of the Company shall be carried out in amounts that are appropriate to maintenance and/or expansion of its activities, always taking into consideration the market situation, and provided that injection of Stockholders funds into the Company is taken into account in its Long-term Strategic Plan, and Multi-year Strategic Implementation Plan approved by the Board of Rectors. The issue price shall be set on the basis of the legislation from time to time in force. 4 Management of the Company and of its Subsidiaries and Affiliated Companies 4.1 The Stockholders hereby ratify that the Company s management shall continue to be the responsibility of its management bodies, as specified in the Company s bylaws. The State, in the terms of this Agreement, and of the Company s bylaws and the legislation in force, is and shall remain the sole controlling stockholder of the Company, able to act with overall, isolated and sovereign control. The control of the Company shall not be shared, and AGC Energia shall not have, in fact or in law, any right that might characterize it as a controlling stockholder or part of a control group. 4.2 Committees Board of Directors The Stockholders specify and agree that the regular functioning of the advisory committees to the Board of Directors is essential for the Board of Directors to be able to carry out its functions. Thus, with the aim of complying with the best and most modern corporate governance practices, General of the State 5

6 the Stockholders shall cause the Board of Directors of the Company to maintain, in its Internal Regulations, the permanent functioning of the following committees: (i) Corporate Governance and Sustainability Committee - to propose to the Board of Directors the structure and constitution of Committees, the conduction of the periodic assessment of the Board of Directors, the Committees, the Chairman and the Secretary of the Board, actions to improve the dynamics of functioning of the Board of Directors, criteria for assessment and development of corporate governance and sustainability, the rules for dealing with conflicts of interest of stockholders, between themselves and with the Company, review of the responsibilities of the Committees, reassessment of their structure and profile, and the needs of new members, issuing opinions to the Board of Directors. (ii) Human Resources Committee interacting with the office of the Chief Corporate Management Officer, to examine and give opinion on subjects relating to human resources, issuing opinions to the Board of Directors. (iii) Strategy Committee interacting with the offices of the Chief Officer for Finance, Investor Relations and Financial Control of Subsidiaries and Affiliates and the Chief Officer for New Business Development and Corporate Control of Subsidiaries and Affiliates, to examine and give opinion upon the directives for formulation, by the Executive Board, of the Long-term Strategic Plan, accompaniment of the Strategic Planning and the Annual Budget, the criteria for assessment of the Company s results, and anticipation of strategic trends in the sector and in the market, to optimize the Company s positioning in its competitive environment, issuing opinions to the Board of Directors. (iv) Finance, Audit and Risks Committee interacting with the office of the Chief Officer for Finance, Investor Relations and Control of Holdings: to examine and give opinions on economic and financial subjects on which the Board of Directors has to give an opinion, such as loans/refinancings, management of debt, analysis of financial risks, cash flow, corporate results, covenants and the Balanced Scorecard, execution of the budget, and policy on dividends and General of the State 6

7 issuance of shares or debentures; to accompany and monitor the Company s management of risks, continually identifying, assessing, and monitoring risks, and to propose strategies for management and mitigation of risks; to monitor the performance of the controls (SOX); to monitor the changes in the Company s liabilities; to monitor the application of the integrated risk analysis model in the Company s projects; to propose criteria for identification of risks inherent to the activity of the Board Members, and to propose preventive actions, issuing opinions to the Board of Directors; and to promote interaction between the Audit Board and the Board of Directors, in relation to subjects of internal and external auditing. (v) Committee for Development and Management of Holdings Interacting with the offices of the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates, and provided that the question comes within the competence of the Board of Directors, to examine and give opinion on the carrying out of studies for potential acquisitions and/or participation in new business projects; to evaluate and propose assumptions for investment (IRR, payback, cost of capital and any other indicators of risk/return that may be necessary); to assess the positive and negative points of each potential business undertaking through preliminary analyses presented by the Office of the Chief Officer for New Business Development and Corporate Control of Subsidiaries and Affiliates; to give opinion on continuation of the studies for each option for acquisition and/or interest analyzed; to give opinion on potential acquisitions and/or participations in new business undertakings that have been previously analyzed by the office of the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates; to analyze the positive and negative points of each potential business through detailed studies carried out by the office of the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates; to identify potential problems and approaches to be followed in the negotiation and acquisition of businesses; to give an opinion on acquisition and/or participation in each option previously analyzed; to give an opinion on significant matters of the Company s subsidiaries and affiliated companies; to give an opinion on potential disposals of stockholding interests, previously analyzed by the Office of the Chief Officer for Business Development and Corporate Control General of the State 7

8 of Subsidiaries and Affiliates; to analyze the positive and negative points of each potential disposal through detailed studies carried out by the office of the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates; to identify potential problems and approaches to be followed in the negotiation and disposal of businesses; and to give opinion on disposal and/or disinvestment in each option previously analyzed; issuing opinions to the Board of Directors. (vi) Board of Directors Support Committee to assess and recommend, prior to the meetings of the Board of Directors, any corrections to the contents of the agenda of the meetings, allocation of priorities for subjects on the agenda, examination of the documentation necessary for understanding by the Members of the Board, the quantity, quality, and content of the material, the need for presentations or explanations, detailing of the subjects, compliance with the Bylaws, and any other measures necessary to enable meetings to be objective The Internal Regulations of the Board of Directors must, also, establish that all the committees shall be made up of 5 (five) sitting or substitute members of the Board of Directors, appointed by the Board of Directors itself, subject always to the proportion of 3 (three) members appointed by the State and 2 (two) members appointed by the simple majority of the members of the Board of Directors elected by the other stockholders of Cemig The Bylaws and the Internal Regulations make provisions concerning the need, prior to the decision by the Board of Directors, (i) for an obligatory, non-binding consideration and opinion of the committees on the matters that are in its competence listed in Clause and (ii) for an obligatory consideration and opinion by the committee on subjects not explicitly specified in this Agreement or in the Internal Regulations, whenever its consideration and opinion has been expressly requested by, at least, 2/3 (two thirds) of the members of the Board of Directors. If the proportion of 2/3 (two thirds) of the members of the Board of Directors is not a whole number, for the purposes of interpretation of this clause, the next lower whole number resulting from the fraction shall be adopted. General of the State 8

9 If there are contracts, agreements, business transactions or subjects which in any way give rise to obligations or rights of the Company in relation to any parent company, affiliated company, subsidiary or jointly-controlled subsidiary of AGC Energia, which are analyzed or discussed by any committee, the members of that committee appointed by AGC Energia shall abstain from participating in any discussions about the said business transaction or matter Those positions on the Boards of Directors of the Company s subsidiary and/or affiliated companies for which the appointment is to be made by the Company shall be filled in accordance with a decision of the Board of Directors based on the number of positions of the said body to be filled by the Company The positions on the committees of support to the boards of directors of the subsidiary or affiliated companies for which the appointment is to be made by the Company shall be filled by members of the boards of the said subsidiary or affiliated companies. In all cases the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates shall be appointed as one of the members of the said committees, and shall at all times act jointly with the Chief Officer for Finance, Investor Relations and Financial Control of Holdings or any other Chief Officer. 4.3 Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates the Stockholders agree that if the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates, after an express request from the Board of Directors or from any other member of the Executive Board, does not carry out any of his functions, in one or more specific cases, the Board of Directors may designate another member of the Executive Board to carry out the functions that are not being carried out by the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates The Stockholders agree that the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates shall at all times be appointed by AGC Energia, subject always to the criteria of experience, proper reputation and clear and well-known technical and professional qualification for the said position. In this case, the said Chief Officer shall be elected by the Board of Directors of the Company, and the Stockholders hereby undertake to orient the members of the Board of General of the State 9

10 Directors that they have appointed, to vote for the Chief Officer nominated by AGC Energia The State may reject the name put forward by AGC Energia for the position referred to in item above, upon presentation of a reasonable justification with grounds. In this case, AGC Energia must indicate another name to exercise the position of Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates. For purposes of assessment by the State of the person indicated, AGC Energia undertakes to provide the name and the technical qualification and formal description of the person nominated at least 30 (thirty) days in advance of the date of the meeting of the Board of Directors called for the purpose of appointing the said Chief Officer The Stockholders hereby agree that the attributions of the Chief Officer for Business Development and Corporate Control of Subsidiaries and Affiliates defined in the bylaws of the Company in effect shall be maintained during the period of validity of this Agreement Decisions of the General Meeting of Stockholders, Board of Directors and Executive Board The Stockholders agree that the decisions of the management bodies of the Company shall obey the provision in this Agreement and the intention of the Stockholders now expressed. The Stockholders agree that AGC Energia shall abstain from voting or shall cause its representatives on the Board of Directors and the Executive Board to abstain from voting in any decisions of bodies of the Company that are related to any contracts, agreements, business transactions or which in any way give rise to obligations or rights of the Company in relation to any parent company, affiliated company, subsidiary or jointly-controlled subsidiary of AGC Energia. 5 Right of Preference 5.1 AGC Energia may, other than on a securities exchange or over-the-counter market, sell, assign, exchange, dispose of or in any other way transfer the totality of its Shares, directly or indirectly (including by means of the sale of shares representing the registered capital of AGC Energia held by its stockholders) (in each case, a Sale ), to any individual or legal entity, whether or not a Stockholder ( Purchaser ), provided that AGC Energia has received from the Purchaser an offer to purchase in good faith, firm and General of the State 10

11 accompanied by guarantees that prove and certify the Purchaser s interest in the acquisition ( Purchase Offer ) of the totality of the shares in the Company that are the subject of the Sale ( Offered Shares ). If AGC Energia decides to accept the Purchase Offer, AGC Energia must notify ( Notice of Offer ) the Company and the State, with a copy to the BNDESPAR, stating the number of Offered Shares, the price per share ( Price per Share ), the form of payment, the name of the Purchaser and all the other relevant terms and conditions of the offer, and also present to the State the original copy of the Purchase Offer. 5.2 The State shall have the right of preference, consisting of the right to buy all, and not less than all, the Shares Offered, for the Price per Share and other conditions set in the Notice of Offer, and shall, for this purpose, notify AGC Energia and the Company, with a copy to BNDESPAR, of the decision to purchase the Shares Offered, within up to 30 (thirty) calendar days from the receipt of the Notice of Offer, setting a definite date for completion of the transaction, subject to the provisions of Clause 5.4 below. 5.3 In the event of a refusal in the exercise of the right of preference, or in the absence of response from the State within the period described above, AGC Energia shall be free to dispose of the Shares, within a period of 120 (one hundred and twenty) days, on the terms of the Purchase Offer. In this event, the Purchaser shall be obliged to sign a term of agreement to this Stockholders Agreement, at the moment of the transfer of the Shares, and this Agreement shall prevail between the State and the Purchaser up to the end of the period agreed in this Agreement If the disposal is not concluded in the period of 120 (one hundred and twenty) days, the State s right of preference shall be renewed, and AGC Energia must make a new Notice of Offer and obey all the periods and procedures specified in Clauses 5.2 and 5.3 above. 5.4 The right of preference guaranteed under the terms of this clause shall not apply to the following cases: (i) (ii) disposal, assignment, exchange or transfer, by any means, of the Shares between AGC Energia and (i) any legal entity controlled by it, directly or indirectly, and/or (ii) its parent company; exchange of up to 39.18% (thirty nine point one eight per cent) of the Shares held by AGC Energia, at the time of the said exchange, for debentures issued by AGC Energia and subscribed to by BNDESPAR, in which case the General of the State 11

12 Stockholders and BNDESPAR hereby agree that the Shares exchanged shall be considered automatically detached from this Agreement; and/or (iii) assignment free of charge, to the BNDES, of the right of preference inherent to 39.18% (thirty nine point one eight per cent) of the Shares held by AGC Energia, at the time of the exercise of the preference, for subscription of new shares, warrants, debentures or any other securities that are convertible or exchangeable for common shares issued by the Company, and it is hereby now agreed between the Stockholders and BNDESPAR that any Shares or securities subscribed by the BNDES by shall not be bound by this Agreement. 5.5 Also, there shall be no restriction on the transfer of 1 (one) common share, for any reason or by any means, for the purpose of making possible election to the position of member or substitute member of the board of directors of the Company, and also the subsequent transfer of such share by the said board members, sitting or substitute, after the end of their period of office, to the Stockholder who transferred it or to their successor in the position. 6 Sale on a securities exchange If AGC Energia intends to dispose of the Shares which it holds, in whole or in part, on a securities exchange or an over-the-counter market, the parties hereby agree that AGC Energia may resile this agreement unilaterally, upon sending of notice to the State and to the Company. 7 Specific performance 7.1 The Stockholders recognize and declare that the simple payment of a fine and/or of losses and damages shall not constitute adequate compensation for default on an obligation assumed in this Agreement. 7.2 Without prejudice to the obligation of the Chairman of the general meeting or of the committee decision body of the Company not to compute any vote given in infringement of this Agreement, as provided for by Paragraph 8 of Article 118 of Law 6404/76, as amended, the Stockholders and, where applicable, the Company, shall have the right to require the chairman of the general/special meeting and/or the Chief Executive Officer of the Company to declare as invalid any vote given contrary to or not in compliance with the provisions of this Agreement. General of the State 12

13 7.3 The Stockholders and, where applicable, the Company do not waive, but on the contrary, may make use of any action or court measure (including for collection of losses and damages) to which they have the right under the law. 7.4 Without prejudice to the provisions of Article 118 of Law 6404/76, as amended, especially its Paragraph 9, if a Stockholder or, where applicable, the Company, does not issue a declaration of intent to which it has bound itself in the terms of this Agreement, another Stockholder may request the courts for a judgment which, after no further appeal on it is possible, shall produce all the effects of the declaration of intent not issued. For the purposes of this clause, the Stockholders recognize that this Agreement constitutes extrajudicial executive title for all the purposes and effects of Articles 461 and following clauses of the Code of Civil Procedure. 8 Filing of the Agreement 8.1 This present Agreement shall be filed/registered at the head office of the Company, which shall be obliged to obey it in the form of Articles 40 and 118 of Law 6404/76, as amended. 8.2 In the share registry book and in the certificates of shares of the registered capital of the Company owned by the Stockholders the following shall be stated: The Stockholder that is owner of these shares is part of a Stockholders Agreement, in effect from August 1, The Stockholder s Agreement is filed/registered at the company s head office, for all the purposes and effects of Articles 40 and 118 of Law 6404 of December 15, 1976 (as amended). 9 Period of validity 9.1 This Agreement shall be in force from the date of its signature, and shall remain in full force and effect for 15 (fifteen) years, provided the provisions of this Agreement are obeyed, being renewed automatically for an additional period of 15 (fifteen) years, unless any of the Parties notifies the other, with minimum prior notice of 1 (one) year, of its intention not to renew this present Agreement. 9.2 The approval of the State and of AGC Energia is necessary for any alteration of this Agreement, which shall be notified to BNDESPAR in accordance with Clause 10 below, but however shall not be effective against BNDESPAR without its express written consent. General of the State 13

14 9.3 This Agreement binds the Stockholders, and whatever parties become their successors for any reason, and is signed irrevocably. Subject to the exceptions expressly specified in it, this Agreement and any of the rights and obligations arising from it may not be assigned or in any way transferred, directly or indirectly, by any Stockholder without the prior written consent of the other Stockholder, and any assignment or transfer made without such consent shall be considered null and void and as having no validity or efficacy in relation to the Stockholders and/or third parties. 9.4 This Agreement shall be considered automatically rescinded in relation to any Stockholder who or which, during the period of validity of the Agreement, becomes holder of less than 20% (twenty per cent) of the total of the shares in the Company that carry the right to vote. 10 Notices 10.1 All notices relating to this present Agreement shall be made in writing ( being excluded) and shall be considered as received in a period of 2 (two) business days after the day on which they are sent, when sent by fax, provided that it is possible to attest to their receipt, or on the business day following their receipt when sent to the address of the party notified, if they have been sent by another means. The notices must be sent in writing to the addresses specified below or to any other addresses informed by one party to the others in writing: (i) Att.: If to the State: Dr. Marco Antônio Rebelo Romanelli Position: Address: General of the State of Minas Gerais Head Office of the General of the State, Edifício Gerais, Rodovia Prefeito Américo Gianetti s/n, Serra Verde, Belo Horizonte, Minas Gerais State. Fax: (31) General of the State 14

15 (ii) If to AGC Energia: STATE OF MINAS GERAIS Att.: Position: Mr. Ricardo Coutinho de Sena Director or Att.: Position: Saulo Alves Pereira Júnior Director Address: Avenida do Contorno, 8123, Bairro Cidade Jardim, Belo Horizonte, Minas Gerais State. Fax: (31) (iii) Att.: If to the Company: Mr. Djalma Bastos de Morais Position: Chief Executive Officer Address: Avenida Barbacena, 1200, Belo Horizonte, Minas Gerais State. Fax: (31) (iv) Att.: If to BNDESPAR: Mr. Luciano Coutinho Position: Address: Chief Executive Officer Avenida República do Chile, 100, part Rio de Janeiro, Rio de Janeiro State. Fax: (21) General of the State 15

16 10.2 It is hereby agreed that if the destination parties indicated in Clause 10.1 above as representatives of the parties to receive notices relating to this Agreement do not belong to or are no longer connected with the destination party of the notice, for any reason, the notice must contain as destination party the position of each destination party, as mentioned in Clause 10.1 above. 11 Applicable law and jurisdiction 11.1 This Agreement shall be governed and interpreted in accordance with the laws of the Federal Republic of Brazil The Stockholders shall employ their best efforts to resolve, in good faith and in obedience to their mutual interests, any litigation, dispute or claim resulting from or relating to this Agreement, non-compliance with it and/or its validity The Courts of the Legal District of Belo Horizonte, Minas Gerais State are hereby chosen, waiving all others, however privileged, to resolve any disputes arising from this Agreement or from any contracts, documents or agreements related to it. 12 General provisions 12.1 Omission, on the part of any Stockholder, at any time, from enforcing the conditions or provisions established in this Agreement or in exercising any rights specified in this agreement shall not constitute novation nor waiver of such conditions, provisions or rights, nor shall it affect the right of the said Stockholder to enforce such right, condition or provision, at any time If any provision contained in this Agreement is considered invalid, illegal or unenforceable, in any aspect, the validity, legality and enforceability of the other provisions contained in this Agreement shall not, in any way, be affected or restricted by such fact. The Stockholders shall negotiate, in good faith, the replacement of the provisions that are invalid, illegal or unenforceable, by provisions that are valid, legal and enforceable, the economic effect of which is as close as possible to the economic effect of the provisions considered to be invalid, illegal or unenforceable This Agreement constitutes an irrevocable obligation of the Stockholders and shall bind their respective authorized successors. General of the State 16

17 12.4 This agreement is signed in 5 (five) copies of equal form and content, each one being considered an original, thus constituting, all of them, jointly, a single and the same instrument, and is printed in 17 (seventeen) sequentially numbered pages. The pages of this instrument are initialed by Vinícius Machado Silva, counsel of the Brazilian Development Bank (BNDES) System, by authorization of the legal representatives who sign it. And, being thus agreed and contracted, the Stockholders sign this Agreement in all its copies, in the presence of 2 (two) witnesses. Belo Horizonte, August 1, STATE OF MINAS GERAIS [Stamp:] Ricardo Coutinho de Sena, Director [Stamp:] Saulo Alves Pereira Junior, Director AGC ENERGIA S.A. Consenting Party: [Stamp:] Luciano Coutinho, Chief Executive Officer [Stamp:] Sergio Weguelin, Acting Director BNDES PARTICIPAÇÕES S.A. BNDESPAR Acknowledged, and agreed: COMPANHIA ENERGÉTICA DE MINAS GERAIS CEMIG General of the State Witnesses: 17