SHAREHOLDERS AGREEMENTOFDRAFT II PARTICIPAÇÕES S.A. VBC ENERGIA S.A.,
former Serra da Mesa Energia S.A., a joint-stock corporation with offices in
the city of São Paulo, State of São Paulo, at Avenida Engenheiro Luís Carlos
Berrini, 1297/1307, 13th floor, suite 132, enrolled with the National Register
of Legal Entities of the Ministry of Finance (“CNPJ/MF”) under
No. 00.095.147/0001-02, hereinafter simply referred to as “VBC”; 521 PARTICIPAÇÕES S.A.,
a joint-stock corporation with offices in the city of Rio de Janeiro, State of
Rio de Janeiro, at Praia de Botafogo, 501 – 4th floor, enrolled with the
National Register of Legal Entities of the Ministry of Finance (“CNPJ/MF”)
under No. 01.547.749/0001-16, hereinafter simply referred to as “521”; BONAIRE PARTICIPAÇÕES S.A., a joint-stock corporation with offices in the city
of São Paulo, State of São Paulo, at Avenida Juscelino Kubitscheck, 50, 18th
floor – part occupancy, enrolled with the National Register of Legal Entities
of the Ministry of Finance (“CNPJ/MF”) under No. 02.117.801/0001-67,
hereinafter simply referred to as “BONAIRE”; and they may be individually
referred to as PARTY, or collectively PARTIES; and, as
Intervening Consenting Party, DRAFT II PARTICIPAÇÕES S.A., whose name shall be changed to CPFL Energia S.A., a
joint-stock corporation with offices in the city of São Paulo, State of São
Paulo, at Rua Iguatemi, 192, suite 121, enrolled with the National Register of
Legal Entities of the Ministry of Finance (“CNPJ/MF”) under No.
02.429.144/0001-93, hereinafter simply referred to as “COMPANY”; the PARTIES
and COMPANY being represented according to their respective bylaws, WHEREAS
the PARTIES: (i) hold
the majority of the capital of COMPANY, a holding resulting from the
reorganization of investments of VBC, 521, and BONAIRE in the electricity power
industry; (ii) hold
a direct equity in Companhia Paulista de Força e Luz — CPFL (hereinafter
referred to as CPFL-D) and in CPFL Geração de Energia S.A. (hereinafter referred to as CPFL-G); (iii) are
bound to increase the capital of COMPANY upon the transfer of all shares owned
in the capital of CPFL-D and CPFL-G; (iv) wish
to list COMPANY’s shares in Brazilian stock exchanges, according to the rules
of the New Market, and abroad; and (v) wish
to regulate the exercise of the voting right inherent to their shares, the
restriction on the circulation, the mutual relations as controlling
shareholders, as well as to establish the general principles to exercise of the
controlling power and manage COMPANY and the SUBSIDIARIES thereof, They
have agreed to enter into this Shareholders Agreement, pursuant to, and for the
purposes of article 118, including its paragraphs, Law Nr. 6.404, of 12/15/1976, which shall be governed as follows:


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CLAUSE ONE – DEFINITIONS 1.1
Unless as otherwise clearly required by context, the capitalized terms and
expressions below shall have the meanings set forth in this clause: (a) SHARES or BOUND SHARES – the common shares
issued by the COMPANY and owned by the PARTIES (sub-clause 3.1), as well as any
shares added to the equity of each of the PARTIES by virtue of subscription,
split or bonus; (b) LITIGATION SHARES – such BOUND SHARES that
are object of arrest, seizure or legal attachment; (c) AGREEMENT – this Shareholders Agreement, which
is the only voting agreement executed by and between the PARTIES, which are
hereby bound not to execute any other agreement of the same nature with the
PARTIES or with third parties during the effectiveness hereof; (d) AFFILIATE – shall mean, in relation to each
PARTY, the legal entity acting as its parent company, subsidiary, or directly
or indirectly controlled by the same parent company(ies) of the PARTY, (e) CONTROL BLOCK – the block of BOUND SHARES,
owned by the PARTIES, representing more than 50% of COMPANY’s voting capital,
which entitle them to preponderance in company resolutions; (f) ASSOCIATED COMPANY – a company in which
COMPANY holds no less than ten percent (10%) of the voting capital, without,
however, controlling it; (g) SUBSIDIARY – a company in which COMPANY,
directly or through other companies, holds the controlling power,
(i) individually, for being the holder of voting rights that entitle it on
a permanent basis preponderance in company resolutions and the power to elect the
majority of the managers, or (ii) for participating in the control block
governed by Shareholders or Quotaholders Agreement; (h) BYLAWS – the COMPANY’S bylaws, which – based
on CPFL-D’s current bylaws – shall, in no more than 60 days as of this
date, be restated to reflect the changes in the Brazilian Corporate Law (“Lei
das S.A.’s”) and the provisions hereof, including any amendment approved during
the effectiveness thereof; (i) ANNUAL BUDGET – the annual budget containing
an estimate of the operating revenues and expenses, of the costs and
investments, the cash flow, the amount to be used to pay dividends, the
inversions of resources with own capital or that of third parties and other
data deemed required by COMPANY’s management; (j) OFFEROR – the PARTY willing to dispose of the
BOUND SHARES to a third party or to any of the other PARTIES or, for the
purposes of Clause 12, that whose control is changed; (l) RELATED PARTY(IES) – partner(s),
quotaholder(s) or shareholder(s) of the PARTIES, to wit: (i) in relation to VBC: Votorantim Energia Ltda.,
Bradesplan Participações S.A. and Camargo Corrêa Energia Ltda., and their
respective AFFILIATES;


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(ii) in relation to 521: PREVI – Caixa de
Previdência dos Funcionários do Banco do Brasil, and their AFFILIATES; (iii) in relation to BONAIRE: Funcesp – Fundação
Cesp, Petros – Fundação Petrobrás de Seguridade Social, Sistel – Fundação
Sistel de Seguridade Social, Sabesprev – Fundação Sabesp de Seguridade Social
and their respective AFFILIATES; (m) 5-YEAR BUSINESS PLAN – COMPANY’s 5-year
business plan comprising the strategic planning, which shall contain the
investment plans and the projections for a period of five (5) fiscal years
of COMPANY and the SUBSIDIARIES thereof, comprising activities, strategies, new
investments, and business opportunities, the amounts to be invested or
otherwise contributed from resources of its own or third parties, as well as
the expected return and profit rates; (n) PREVIOUS MEETING – meeting of the PARTIES to
be held before any General Meeting or meeting of the Board of Directors of
COMPANY, the SUBSIDIARIES or ASSOCIATED COMPANIES, in order to define the
orientation of the vote to be given by representatives of the PARTIES in such
corporate bodies; (o) ECONOMIC VALUE — shall mean the value of the
BOUND SHARES, evaluated by the discounted cash flow method, according to
criteria usually adopted in the evaluation of companies in the industry,
carried out by a reputable expert company, to exercise the preemptive right in
case of change of control of the PARTY, as set forth in clauses 11 and 12. CLAUSE
TWO – OBJECT 2.1 The
object hereof is to assure and govern the exercise of the control of COMPANY
and its SUBSIDIARIES, the PARTIES being jointly bound to maintain the ownership
of a block of SHARES that entitle them on a permanent basis to the majority of
votes in the General Meetings, and the power to elect the majority of managers
and audit committee members of COMPANY and (by intermediation thereof) of its
SUBSIDIARIES. CLAUSE
THREE – BOUND SHARES 3.1 The
following SHARES of each PARTY are bound to the AGREEMENT, which comprise the
participation percentage in the entire capital of COMPANY and in the CONTROL
BLOCK, as shown in the table below: PERCENTAGENUMBER
  OF COMMON
 
 IN
  THE ENTIRE
 
 IN
  THEPARTY
 
 SHARES
 
 CAPITAL
 
 CONTROL
  BLOCKVBC
 
 
 19,571
 
 
 
 36.26
 
 
 
 45.32521
 
 
 16,410
 
 
 
 30.40
 
 
 
 38.00BONAIRE
 
 
 7,203
 
 
 
 13.34
 
 
 
 16.68Total Shares
 
 
 43,184
 
 
 
 80.00
 
 
 
 100.00
 3.1.1
Pursuant to WHEREAS (iii) above, the PARTIES shall increase the capital of
COMPANY upon the transfer of all common and preferred shares issued and owned
by CPFL-D and CPFL-G, most of which were jointly purchased thereby, and the
least of which were individually purchased by one or some of the PARTIES. For
the purposes of the provisions in this clause 3, CPFL-D and CPFL-G jointly
purchased shares (hereinafter referred to as “CPFLJOINTLY
PURCHASED SHARES”) are those the manner of acquisition of which was one of the
following:


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a) shares (common or preferred) purchased (i) at
CPFL-D privatization auction (including those alienated by the State and those
corresponding to the balance not purchased by the employees); and (ii) resulting
from the share purchase public offer made by DOC 4 Participações S.A.; b) CPFL-D and CPFL-G shares subscribed in increases of
their capitals from November/1997 through March/2002, resulting from the
exercise of the preemptive right inherent to the shares referred to in item “a”
above; c) class “C” preferred bonus shares by CPFL-D,
corresponding to the shares referred to in letters “a” and “b” above; and d) CPFL-G common and preferred shares, corresponding
to the shares referred to in letters “a” to “c” above, received by the PARTIES
resulting from the partial split-up of CPFL-D. 3.1.2
After the increase of capital to which sub-clause 3.1.1 refers, in addition to
the SHARES referred to in sub-clause 3.1., the portion of new subscribed shares
issued by the COMPANY corresponding to the transfer of eighty percent (80%) of
the “CPFL JOINTLY PURCHASED SHARES” shall be bound to the AGREEMENT. An
Amendment to the AGREEMENT to be executed after the increase of capital shall
set forth the new amount of BOUND SHARES of each PARTY, the percentage in
relation to the full capital of COMPANY and to the CONTROL BLOCK. 3.2 The
PARTIES shall be bound at all times to exercise the voting right inherent to
the common shares of the COMPANY, of which they are, now or in the future,
holders in accordance with this AGREEMENT, even if some of such shares are not
bound to the AGREEMENT, by which they can only grant voting rights to third
parties on the unbound shares, through a power of attorney, usufruct, pledge or
another proper mean, if the third party is required to vote according to the
instruction of the PARTY that granted such third party the right to vote. CLAUSE
FOUR – GENERAL PRINCIPLES IN CONDUCTING CORPORATE MATTERS 4.1 The
PARTIES shall be bound to exercise the voting right inherent to the SHARES, the
controlling power they have over the managers of COMPANY, and its SUBSIDIARIES
and ASSOCIATED COMPANIES, and the rights hereunder in order to apply the
following principles, guidelines and policies: a) to promote and observe the basic objective of
COMPANY and its SUBSIDIARIES, companies engaged in the electricity power
generation, transmission, and distribution industry, and like activities, in
order to assure the operation of the facilities and equipment required for the
exploration of the respective public service concessions, and to assure the
continuation, regularity, and quality of the electricity power services
provided; b) to take into account, in the strategic decisions of
COMPANY and its SUBSIDIARIES, the interest of the PARTIES to safeguard the
continuation and expansion of the operations of COMPANY and its SUBSIDIARIES,
the financial return of the investments and to promote the provision of proper
services by theSUBSIDIARIES, within the quality and
competitive standards required for the good service to users and in compliance
with the obligations of franchisees;


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c) to implement in COMPANY and its SUBSIDIARIES a
dividend distribution policy in a currency that entitle its shares the
characteristics of savings security in order to have periodic income, without
prejudice of the constitution of the reserves provided for in the ANNUAL BUDGET
or in the 5-YEAR BUSINESS PLAN, and that are required for the expansion plan of
its activities and for the improvement of the provision of services of the
franchises explored by the SUBSIDIARIES; d) to adopt a dynamic management structure in COMPANY
and SUBSIDIARIES within the minimum standard required for its good management,
comprised by qualified and reputable professionals; e) to prepare guidelines for the activities and
management of COMPANY and SUBSIDIARIES to be reflected (i) in the 5-YEAR
BUSINESS PLAN; and (ii) in the ANNUAL BUDGET of COMPANY and SUBSIDIARIES,
prepared in accordance with the 5-YEAR BUSINESS PLAN. 4.2 Any
business or agreement to be executed by COMPANY or its SUBSIDIARIES with a
RELATED PARTY shall be concluded strictly based on mutual and market
conditions, as such business or agreement had been contracted with third
parties. CLAUSE
FIVE – PREVIOUS MEETINGS 5.1
Before any General Meeting or meeting of the Board of Directors of COMPANY, its
SUBSIDIARIES or its ASSOCIATED COMPANIES to resolve on any of the matters set
forth in sub-clauses 5.4 and 7.4, the PARTIES, called as provided for in
sub-clause 5.2, shall meet to define the manner by which the vote will be
exercised by their representatives in accordance with the provisions herein. 5.2 The
PREVIOUS MEETINGS shall be called by the chairman of the Board of Directors of
COMPANY or its SUBSIDIARY, by any other two members of the Board, acting
together, by any member of the Board of Directors of the ASSOCIATED COMPANY
appointed by COMPANY or further by any of the PARTIES, upon written notice sent
by any means to the addresses referred to in sub-clause 17.6, at least three
(3) business days in advance. The meetings shall be held at COMPANY’s
principal place of business or as otherwise previously informed, provided that
such place is located in the same city of its principal place of business, at
least twenty-four (24) hours before the General Meeting or meeting of the
Board of Directors. The PREVIOUS MEETINGS calls shall include the agenda to be
discussed, and a copy of any supporting document required should be attached
thereto. 5.3 The
PREVIOUS MEETINGS shall take place with the presence of the representatives of
the PARTIES holding at least fifty-one percent (51%) of the BOUND SHARES, the
PARTIES being bound to appear thereat by proxies with powers to resolve on the
agenda. 5.4 A PREVIOUS MEETING shall be mandatory for
all matters requiring the approval of the General Meeting or for those in which
the Board of Directors of COMPANY, or its SUBSIDIARIES, can only resolve by the
qualified majority (pursuant to sub-clause 7.4). A PREVIOUS MEETING shall also
be required for the Board of Directors (of COMPANY and its SUBSIDIARIES) to
resolve on the following matters: a) approval of the other members of the Staff of
Officers, appointed by the Chief Executive Officer previously elected by the
Board of Directors; and


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b) execution of agreement of any nature in
a total amount higher than R$ 20 million, even if such agreement is
related to the expenses set forth in the ANNUAL BUDGET or in the 5-YEAR
BUSINESS PLAN. 5.5 The
PARTIES and their representatives in resolutions of COMPANY or its SUBSIDIARIES
shall postpone or adjourn the General Meeting or meeting of the Board of
Directors called to resolve on a matter subject to the PREVIOUS MEETING when
(i) for any reason, until the date of the General Meeting or meeting of
the Board of Directors, the PREVIOUS MEETING had not been held; or (ii) if
held, there is no valid decision of the PARTIES. In both cases, the
postponement or adjournment shall be maintained until the PARTIES previously
meet and a valid decision is made (sub-clause 5.6). In case the valid decision
is not made only in relation to some aspects of the agenda, the PARTIES shall
cause such aspects to be removed from the order of the day, and shall resolve
on the other aspects as defined in the PREVIOUS MEETING. 5.6 All
resolutions of the PARTIES in PREVIOUS MEETINGS shall be adopted by the simple
majority (50% + 1) of the BOUND SHARES, except those to which General Meeting
is incumbent and those subject to the approval of the qualified majority of the
Board of Directors, as determined in sub-clause 7.4, for which the approval of
the PARTIES representing at least eighty percent (80%) of the BOUND SHARES
shall be required. 5.6.1
In the PREVIOUS MEETINGS each BOUND SHARE entitled to one vote, and the blank
votes or denials shall – for the purposes of the decision on matters requiring
the approval of the qualified majority – be computed as approval of the
proposal with the largest number of votes. 5.6.2
The orientation of vote defined by the PARTIES in PREVIOUS MEETING shall be
followed uniformly and in block by the representatives of the PARTIES in the
resolutions of COMPANY, its SUBSIDIARY or ASSOCIATED COMPANY resolving thereon. 5.7 If
the ANNUAL BUDGET of COMPANY and/or its SUBSIDIARIES had not been approved by
the qualified majority until the first business day of the year to which it
refers, the monthly disbursement (excluding new investments) up to the amount
of one-twelfth (1/12) or the budget approved for the previous year, with the
adjustment of the respective amounts based on the variation of theIGP-M,
published by Getúlio Vargas Foundation shall be automatically authorized. Such
disbursement authorization shall be in force only during the first quarter of
the subsequent year. After this period, only expenses and investments required
to assure the operations of COMPANY and its SUBSIDIARIES for the continuation
of the provision of services and projects and investments already approved and
in progress may be made. 5.8 The
impediment to participate by representatives of any of the PARTIES in any of
the Assistant Committee of the Board of Directors of COMPANY and/or its
SUBSIDIARIES for the reasons set forth in sub-clause 8.9.6 shall not restrict,
for any purpose or effect, the participation of the same PARTY in the PREVIOUS
MEETING to resolve on such matter, in which it may exercise its voting right in
full. 5.9 The
failure to appear by any of the PARTIES at a PREVIOUS MEETING duly called and
held shall imply in the full acceptance thereby of the resolution adopted by
the majority of votes of the BOUND SHARES owned by the PARTIES present at the
meeting, and the votes corresponding to the SHARES of the absent PARTY shall be
computed as favorable votes for the purposes of calculation of the qualified majority
in the cases required hereunder. 5.10
The chairman of the General Meeting or of the Board of Directors, of COMPANY
and its SUBSIDIARIES, shall not compute the vote given by representatives of
the PARTY in breach of the provisions hereof or the resolutions of the PREVIOUS
MEETING (sub-clauses 5.4 and5.6.2). In such event, any
of the representatives of the other PARTIES may, by submitting a copy of the
minutes of the PREVIOUS MEETING in which the matter had been resolved by the
PARTIES, required the vote of the party in breach to be considered and
calculated as previously approved in the PREVIOUS MEETING.


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5.11
The failure to appear at the General Meeting or the meeting of the Board of
Directors of COMPANY or its SUBSIDIARIES, as well as the abstention to vote of
the representative of any PARTY or member of the Board of Directors elected
thereby in accordance with this AGREEMENT, entitled any of the representatives
of the other PARTIES to participate, as the case may be, in the General Meeting
or in the meeting of the Board of Directors, and exercise the voting right (i)
in the case of a General Meeting, with the shares owned by the absent or
non-voting PARTY, and (ii) in the case of a meeting of the Board of
Directors, on behalf of the absent or non-voting member of the board. 5.12
The minutes of the PREVIOUS MEETING shall be summarily transcribed, and,
pursuant to art. 130, § 1, Law 6.404/76, it shall be allowed to present
separate votes and protests, which, initialed by the presents, shall be filed by
the PARTIES – which shall include, clearly and accurately, the resolution of
the PARTIES and the sense of vote that its representatives – in General
meetings and Boards of Directors, of COMPANY and its SUBSIDIARIES and
ASSOCIATED COMPANIES – shall manifest or approve in the respective resolutions. 5.13
Upon the resolution of the majority of the PARTIES, the PREVIOUS MEETINGS may
be tape-recorded. CLAUSE
SIX – EXERCISE OF THE VOTING RIGHT IN THE GENERAL MEETINGS GENERAL MEETINGS 6.1 The
PARTIES shall exercise the voting right in the General meetings of COMPANY –
and the latter in the General meetings of SUBSIDIARIES and ASSOCIATED COMPANIES
– in accordance herewith. 6.2
Only matters provided for by law shall be submitted to the General Meeting. The
BYLAWS of COMPANY shall provide that the decisions at the General Meeting shall
be made by the simple majority of the attending shareholders present, except
for the matters where qualified majority is required by law. 6.3
Notwithstanding the provision in sub-clause 6.2, the PARTIES shall be bound to
appear at all General meetings of COMPANY and therein exercise their voting
rights in order to assure that the resolutions on any matters be approved, as
defined in the PREVIOUS MEETING, by the vote of the PARTIES holding at least
eighty percent (80%) of the BOUND SHARES 6.4
Without prejudice of the provision in sub-clauses 5.10 and 5.11, and in art.
118 of Law 6.404/76, any exercise by any of the PARTIES of the voting right at
the General meetings not in accordance with the resolutions in the PREVIOUS
MEETING shall imply invalidity of the vote and vacation of the resolution
adopted, without prejudice of the right of the interested PARTY to promote the
specific execution of the obligation breaches and claim for loss and damages. 6.5
Should either PARTY fail to appear at a General Meeting called to resolve on
the matter submitted for its approval, or in case of appearance, fails to vote,
the provision in sub-clause 5.11 and in § 9, art. 118, Law 6.404/76, shall
apply. 6.6 The
provisions of this clause shall also apply to the resolutions at the General
meetings of the SUBSIDIARIES, and, as the case may be, the ASSOCIATED
COMPANIES.


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CLAUSE SEVEN – RESOLUTIONS OF THE BOARD OF DIRECTORS 7.1.
The PARTIES shall be bound to direct the members of the Board of Directors of
COMPANY, the SUBSIDIARIES and ASSOCIATED COMPANIES elected thereby (sub-clause
8.2.1) to vote in the meetings of the Board of Directors, as resolved in the
PREVIOUS MEETINGS and the provisions herein. 7.2.
The Board of Directors shall be incumbent to decide on any matter of the
interest of the company, except (i) those attributed by Law exclusively to
the General Meeting; and (ii) those attributed to the Staff of Officers by
this AGREEMENT and by the bylaws of COMPANY and its SUBSIDIARIES. 7.3 The
decisions of the Board of Directors shall be – except for the provision in
sub-clause 7.4 below – made by the simple majority of the members present, and
the Chairman (or in the absence thereof, the Vice-Chairman) shall be entitled
to vote in case of a tie. 7.4
Without prejudice of the provision in sub-clause 5.6.2, the approval of the
following matters require the approval of seventy percent (70%) of the acting
members appointed by the PARTIES: a) election of the Chief Executive Officer and
dismissal of any members of the Staff of Officers (including theChief Executive Officer); b) definition of the dividends policy; c) establishment and closure of SUBSIDIARIES;
acquisition and disposal of investments in other companies; d) approval of the ANNUAL BUDGET of COMPANY,
considering that in the absence of agreement with the operating budget of a
certain year, that of the preceding year shall prevail, will all amounts
adjusted by the variation of the IGP-M in the previous year, according to
sub-clause 5.7; e) approval of the 5-YEAR BUSINESS PLAN of COMPANY and
its annual reviews; f) increase of capital of COMPANY within the limit of
the capital authorized and pricing of the issuance of shares; g) issuance of subscription bonus within the limit of
the authorized capital; h) indebtedness of COMPANY – including the provision
of guarantees and assumption of obligations in favor of SUBSIDIARIES and
ASSOCIATED COMPANIES – beyond the limits provided for in the ANNUAL BUDGET or
in the 5-YEAR BUSINESS PLAN; i) execution of agreement of any nature in the total
amount higher than R$ 20 million, even if such agreement refers to an
expense provided for in the ANNUAL BUDGET or in the 5-YEAR BUSINESS PLAN; j) constitution of any type of guarantee by COMPANY in
favor of third parties, in addition to the cases provided for in letter (h);


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l) execution of agreements with the RELATED
PARTIES in an amount higher than R$ 5 million; m) selection and substitution of COMPANY’s independent
accountants; n) authorization for the purchase of shares issued by
COMPANY itself, for the purpose of cancellation or treasury; o) amendments to the franchise agreement of a
SUBSIDIARY; p) approval of share purchase option plans; q) purchase, disposal or encumbrance of any fixed
asset of an amount equal to or higher than R$ 20 million; r) details of the matters to be submitted to previous
analysis of each of the Committees, as provided for in sub-clause 8.9.4; s) compensation of the members of the Committees
(sub-clause 8.9.2) that are not part of COMPANY staff. 7.5 The
resolution of the matters provided for in sub-clause 7.4 concerning
SUBSIDIARIES or, as the case may be, ASSOCIATED COMPANIES, is subject to the
PREVIOUS MEETING. 7.6 The
provisions in sub-clauses 5.10 and 5.11 shall apply to the resolutions of the
Board of Directors of COMPANY and SUBSIDIARIES. CLAUSE
EIGHT – COMPOSITION AND OPERATION OF THE MANAGEMENT BODIES 8.1
Company shall be managed by a Board of Directors and by an Executive Board,
which shall be comprised and shall operate according to the BYLAWS and the
provisions hereof. 8.2
BOARD OF DIRECTORS — The Board of Directors of COMPANY shall be comprised by at
least twelve (12) members, one of which will be the Chairman, elected for
a one (01) year office, which may be reelected. 8.2.1.
Until such time as the registration for negotiation of COMPANY shares at the
stock market does not become effective, the Board of Directors shall be
constituted by twelve (12) members, being: a) VBC incumbent of appointing six (6) members; b) 521 shall appoint four (4) members; c) BONAIRE shall appoint two (2) members; 8.2.1.1
The number of members of the Board of Directors which each PARTY is entitled to
appoint, according to sub-clause 8.2.1 above, takes into consideration the
current interest of the PARTIES in the CONTROL BLOCK. In case of amendment to
the interest of any of the PARTIES in the total BOUND SHARES, the number of
Members of the Board which the referred PARTY will be entitled to appoint shall
be adapted to reflect such change, remaining,however,
unchanged the number of Members of the Board of the PARTY whose relative
interest in the total BOUND SHARES was not amended.


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8.2.2
Notwithstanding the provisions of sub-clause 8.2.1.1, after the registration of
COMPANY shares for negotiation in the stock market is completed, (i) the
number of members of the Board of Directors of COMPANY (sub-clause 8.2) shall
be increased or reduced, depending on the case, so as to always assure the PARTIES,
whilst holders of the CONTROL BLOCK, the power of appointing 12 Members of the
Board, and (ii) one or more positions of the Board of Directors shall be
destined to minority shareholders, according to the law or as resolved by the
PARTIES. 8.2.3
The PARTIES shall appoint, twenty-four (24) hours in advance of the
General Meeting, the persons chosen thereby to be elected to the Board of
Directors. The PARTIES hereby are bound to vote in block in the persons to
appointed, which names shall not be rejected, except in case of failure to
comply with legal provisions. 8.2.4
The Chairman of the Board of Directors shall be appointed at the first meeting
held after the election of its members, among the permanent Members of the
Board appointed by the PARTY which, individually, holds the larger amount of
the BOUND SHARES and the Vice-Chairman by the PARTY which individually holds
the second larger quantity of such shares. 8.2.4.1
In case of transfer of BOUND SHARES to a common SUBSIDIARY – understood as such
the company which, under the terms defined herein, may be deemed SUBSIDIARY of
more than one of the PARTIES — the right to appoint the Chairman and the Vice Chairman
of the Board of Directors as per sub-clause 8.2.4 shall not be affected, and
these will continue to be appointed according to the criteria established
therein, ignoring, for this purpose, the transfer of BOUND SHARES to the common
SUBSIDIARY. 8.2.5
The right to appoint the members of the Board of Directors, according to the
provisions of sub-clause 8.2.1, shall not be assigned to third parties. 8.2.6
It is a condition precedent for the empowerment in the Board of Directors, that
the Counselor appointed by any of the PARTIES executes the adhesion term to the
present AGREEMENT, where (i) he acknowledges its contents and is bound to
comply with same, especially in relation to the obligation of uniform block
vote as decided in the PREVIOUS MEETINGS and (ii) undertake several
responsibility with the PARTY electing him, for the defaults caused by him. 8.3 In case of adoption of the multiple vote
processes, the PARTIES shall be bounded to distribute its votes so as to
reflect the proportion of the Board of Directors’ composition established under
sub-clause 8.2.1 above. 8.4 In the General Meetings called to fill in the
vacancy of counselor, the PARTIES shall vote so as to elect substitution
appointed by the same PARTY indicating the substituted. 8.5 Any
of the PARTIES may substitute, anytime and without justification, the member(s)
of the Board of Directors appointed by same, and the PARTIES hereby undertake
to vote so that the provisions of this sub-clause be complied with. 8.6 The
PARTIES hereby are bound to dismiss any counselor appointed by them,
respectively, who fails to comply with the provisions or the voting guidelines
issued by the PARTIES, according to the present AGREEMENT, being null and void
possible resolutions taken in disagreement with such guidelines (as foreseen
under clause 6.4), in which case a new meeting shall be held to discuss the
matter, amending (if necessary) the resolutions which have notobserved the provisions hereof or the guidelines and
recommendations determined by the PREVIOUS MEETINGS (sub-clause 5.4).


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8.7 The
meetings of the Board of Directors of COMPANY shall occur at least once every
month, in dates to be determined by the Board of Directors during its first
meeting, and may, however, be held more frequently, should the Chairman of the
Board of Directors so request, by its own initiative or by means of request by
any member of the Board of Directors. The meetings of the Board of Directors
shall be called ten (10) days in advance, by notice sent by the Chairman
of the Board, indicating the matters to be discussed and accompanied by the
support documents possibly required. The presence of all members shall allow
the holding of meetings of the Board of Directors irrespectively of call. 8.8 The
meetings of the Board of Directors may be validly installed with the presence
of the majority of its members, one of which shall be the Chairman or the Vice Chairman,
and its resolutions shall be taken by majority of votes of the attending
Members of the Board, having the Chairman (and in his absence the Vice Chairman)
the quality vote, except for the matters listed under sub-clause 7.4, which
shall only be resolved by a qualified majority of seventy percent (70%) of the
active Members of the Board appointed by the PARTIES. 8.8.1
Should there be no quorum for the installation at first call, the Chairman
shall call a new meeting of the Board of Directors, which may be installed in
second call – to be made at least seven (7) days in advance —, with any
number, it being hereby established that no matter which is not in the Agenda
of the original meeting of the Board of Directors may be discussed under second
call, except if all Members of the Board are present and they expressly agree
to the new agenda. 8.9
Committees – The Board of Directors, in the resolutions covering the activities
both of the COMPANY and its SUBSIDIARIES or ASSOCIATED COMPANIES, shall be
assisted by 5 Committees, as follows: (a) Audit Committee, (b)
Compensation Committee. (c) Works Committee, (d) Financial Services
Committee and (e) Purchase or Sale of Components Committee. 8.9.1
The Audit Committees and the Compensation Committees shall be permanent and the
other Committees shall only be called when it is necessary to analyze and
manifest opinion on the matters under their competence (according to sub-clause
8.9.4). 8.9.2
The Compensation Committee shall be comprised by six (6) members,
appointed by the Board of Directors, being three (3) appointed by VBC, two
(2) by 521 and one (1) by BONAIRE. The other Committees shall be comprised
by four (4) members, appointed by the Board of Directors, being two
(2) appointed by VBC, one (1) by 521 and one (1) by BONAIRE. Only the Members of the Board may be appointed to the Compensation Committee,
being the appointment of non Members of the Board acceptable as members of the
other Committees. 8.9.3
The Audit and Compensation Committees may be assisted, in the exercise of their
tasks, by professionals, whether they are or not employees of COMPANY. 8.9.4
The detailing of the matters to be submitted to prior analysis of each of the
Committees shall be defined and ruled by the internal regulations to be
approved by the Board of Directors, being it hereby defined that: a) The
Audit Committee shall be responsible for coordinating the internal audit
procedures, appointing independent auditors when necessary and submitting to
the Board an opinion on the approval of the management accounts and financial
statements, and, yet, on specific areas object of audit;


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b) The Compensation Committee shall be
responsible for coordinating the process of electing the Chief Executive
Officer and the process of assessing the whole Executive Board (including the Chief
Executive Officer), recommending possible dismissals; proposing the
compensation level for the main officers and the profit sharing bonus amounts
as a consequence of the performance appraisal; c) The Works Committee shall be responsible for
evaluating the supplier selection process for construction work and assembly in
works with amounts over R$ 10 million, issuing an opinion on the best
proposal; d) The Financial Service Committee shall be
responsible for evaluating the supplier selection process for financial
services for contracts exceeding R$ 10 million, issuing an opinion on the best
proposal; and e) the Component Purchase and Sale Committee shall be
responsible for: evaluating the supplier selection process for contracts
exceeding R$ 5 million which may involve RELATED PARTIES, issuing an
opinion on the best proposal; monitor the closing of Power sales agreements
exceeding R$ 5 million to RELATED PARTIES, assuring the compliance with
market conditions. 8.9.5
The composition of the Committees defined under sub-clause 8.9.2 above takes
into consideration the current interest of the PARTIES in the control group
constituted by the BOUND SHARES. In case of amendment to the interest of any of
the PARTIES in the total BOUND SHARES, the number of Committee members which
the referred PARTY will be entitled to appoint shall be adapted to reflect such
change, remaining, however, unchanged the number of committee members of the
PARTY whose relative interest in the total BOUND SHARES was not amended. 8.9.6
People who may have, actual or potential conflict of interests or which are
connected to RELATED PARTIES which main activities imply the existence, actual
or potential, of conflict of interests, shall not participate of the non
permanent Committee of Works and of Purchase or Sale of Components. 8.9.7
The matters analyzed by each of the Committees shall be object of reports and
proposals, which do not bind the resolution of the Board of Directors. 8.10
EXECUTIVE BOARD – The Executive Board, chosen for a three (3) year term,
shall be comprised of six (6) members, being one (1) Chief Executive
Officer, one (1) Strategy Director, one (1) Financial Director (also
responsible for Relations with Investors), one (1) Superintendent of Power
Management, one (1) Distribution Superintendent and one
(1) Generation Superintendent. 8.10.1
The Chief Executive Officer shall be elected by the Board of Directors, by
qualified majority (sub-clause 7.4 above), from the names listed by the
Compensation Committee. The other Executive Board members shall be elected by
the Board of Directors by simple majority vote, from the names listed by the Chief
Executive Officer, so as to maintain the cohesion of the executive board of
COMPANY and SUBSIDIARIES. 8.10.2
The Chief Executive Officer of COMPANY shall also be the Chief Executive
Officer of the SUBSIDIARIES, and shall be incumbent, according to item 8.10.1,
to submit the names of the professionals who will fill in the other Executive
Officers positions of the SUBSIDIARIES. The Power Management, Distribution and
Generation Superintendents shall be, respectively, the Superintendents (and
main executives) of the SUBSIDIARIES by means of which the activities of power
management, distribution and generation will be exercised.


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8.11 Conflict in the Election of the Chief Executive
Officer – In case none of the names submitted by the Compensation Committee is
approved by the Board of Directors (according to sub-clause 7.4), and the
position remains vacant for a period of over two (2) months, this will
characterize conflict in the election of the Chief Executive Officer, and will
be solved according to the following mechanism: a) The Compensation Committee shall appoint up to three
executive headhunting companies, the approval of which shall require the
favorable vote of at least five (5) members of the Committee. No company
having been approved within thirty (30) days counted from the
characterization of the conflict, each of the PARTIES, through a Counselor
member of the Committee elected by same, may appoint a sole executive
headhunting company (which complies with the minimum requirements previously
defined by the Board of Directors); b) should the list of executive selection companies be
comprised by three names, the second major individual shareholder (taking into
consideration only the BOUND SHARE) shall eliminate one of the companies and
the main individual shareholder shall choose, from the two remaining companies,
the one to select the candidates for the position of Chief Executive Officer.
Should there be only two options of executive selection companies, the main
individual shareholder shall choose, among them, the one to provide the
services of selection of candidates; c) the executive selection company chosen according to
letter “b” above shall have two (2) months to submit a list comprised of
three candidates for the position of Chief Executive Officer, and the second
major individual shareholder (taking into consideration only the BOUND SHARE)
shall eliminate one of the candidates and the main individual shareholder shall
choose, from the two remaining candidates, the one to be the Chief Executive
Officer. 8.12
During the period while the new Chief Executive Officer is being selected, the Chairman
of the Board of Directors shall take over as interim Chief Executive Officer,
or, if this is not possible, the Financial Director shall take over. 8.13
Conflict in the choice of Other Directors – Should, after three (3) months
after the selection of the Chief Executive Officer, any of the Executive
Officers positions (whether COMPANY or SUBSIDIARY) remains vacant due to the
fact that none of the candidates submitted by the Chief Executive Officer
having obtained the approval of the Board of Directors by simple majority, this
will characterize the conflict, which will be solved through the following
mechanism: The Chief
Executive Officer shall appoint at least two candidates for the vacant position
(being entitled to include a name which was not previously elected), and the
Board of Directors shall elect the candidate chosen by vote of simple majority
of the PARTIES during a PREVIOUS MEETING. 8.14
The Executive Officers members shall be appraised annually by the Compensation
Committee, who will submit its opinion on their performance to the Board of
Directors. 8.15
The dismissal of the Chief Executive Officer or any other member of the Executive
Officers due to unsatisfactory performance, requires decision of the Board of
Directors by qualified majority (sub-clause 7.4). 8.16
The Chief Executive Officer may dismiss any member of the Executive Officers,
and shall inform his decision and the reasons for same to the Compensation
Committee and, for legalpurposes, the formalization
of the dismissal shall occur during the next meeting of the Board of Directors,
and the substitution shall be chosen and elected according to sub-clauses
8.10.1 and 8.13. The position of the dismissed Manager shall, up to the
appointment of his substitution, held by the Manager appointed by the Chief
Executive Officer.


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8.17
The rules dealing with sub-clauses 8.13 to 8.16 shall apply to the Managers of
the SUBSIDIARIES. CLAUSE
NINE – MANAGEMENT BODIES OF THE SUBSIDIARIES AND ASSOCIATED COMPANIES 9.1 The
composition, operation and resolutions of the Board of Directors and Executive
Officers of the SUBSIDIARIES shall observe the provisions hereof. Whenever
possible, the people elected to be part of the Board of Directors of the
SUBSIDIARIES shall be the same people elected by the PARTIES for the Board of
Directors of COMPANY. 9.2 The
Executive Officers of the SUBSIDIARIES shall be comprised by the number of
members more suitable to their requirements, as resolved by the PARTIES, taking
into consideration a proposal of COMPANY’s Chief Executive Officer. 9.3
Where applicable, the same rules shall be applied in relation to the ASSOCIATED
COMPANIES where COMPANY elects Members of the Board. CLAUSE
TEN – AUDIT COMMITTEE 10.1
Company shall have an Audit Committee which will operate under permanent
character and shall be comprised of three (03) or five (05) permanent
members and corresponding alternates, with term up to the Annual General
Meeting subsequent to its election, and may be reelected. 10.2
The composition, competence and operation of the Audit Committee shall observe
the terms of the BYLAWS and of the law. CLAUSE
ELEVEN – LIMITATIONS TO THE TRANSFER OF SHARES 11.1
The PARTIES mutually grant the first refusal right to, under equal conditions
with third parties and observing the procedures provided under sub-clause 11.3,
acquire the BOUND SHARES which one of them intends to dispose of. 11.2
The OFFEROR is bound not to dispose his BOUND SHARES except through one of the
following types of legal business: I — purchase and sale, hypothesis when the offer to
the remaining PARTIES must be under the same price and payment conditions of
the offer to third parties; II – on the grant in payment, case in which the offer
to the other PARTIES shall be of sale for a price equal to the debt value
payable with the delivery of the BOUND SHARES. 11.2.1
The disposal of BOUND SHARES by the OFFEROR may occur by means of type of legal
business different from that indicated under sub-clause 11.2 above provided the
remaining PARTIES agree to them, at their exclusive discretion.


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11.3 The OFFEROR shall offer to the other PARTIES the
disposal of the BOUND SHARES offered, under the same conditions of the proposal
of the third interested party, observing the following rules: I – the offer to the other PARTIES shall be in
writing, by means of letter delivered to the Chairman of the Board of Directors
of COMPANY, accompanied by copy of the unconditional proposal of the third
interested party, with effectiveness not inferior to forty-five (45) days; II – the Chairman of the Board of Directors of
COMPANY, within the five (5) days subsequent to their receipt, shall send copy
of the offer to the other PARTIES. III – within thirty (30) days counted as of the
receipt of the copy of the offer, the other PARTIES shall bear the first
refusal right to acquire the BOUND SHARES offered under the same conditions of
the proposal of the third interested party, without any change or amendment,
and the preference shall be exercised on all BOUND SHARES object of the offer.
Should more than one PARTY accept the offer, the BOUND SHARES held by each of
them, shall be apportioned pro-rata the BOUND SHARES held by each one, not
taking into consideration, for the apportionment, the BOUND SHARES of the OFFEROR; IV – the exercise of the first refusal right shall
(a) cover all BOUND SHARES offered and (b) be notified in writing to
the Chairman of the Board of Directors of COMPANY within the term granted in
the above item, after which the first refusal right will expire. V – once the first refusal right has been exercised
and the provisions of item VI observed, the Chairman of the Board of Directors
of COMPANY shall immediately notify the OFFEROR if the other PARTY(IES)
exercised such right, and the disposal of the shares object of the offer shall
be implemented within sixty (60) days counted from the end of the term for
exercise of the preference as provided under item III; VI – Should the Offer Receiving Parties not exercise
their first refusal right, or should such right expire, the OFFEROR may dispose
of the BOUND SHARES to the third proponent under the exact terms of the
proposal, provided such disposal is completed within ninety (90) days from
the end of the term provided under item III of this sub-clause; VII – any modification of the disposal conditions
indicated in the proposal of the third proponent, or the expiry of the term
referred under item VI without the disposal to third party having been
completed, will evidence a new and different disposal, which shall only be
contracted after a new offer to the other PARTY(IES), under the terms of this
sub-clause, so that these may exercise their first refusal right. 11.4
Any of the PARTIES receiving the offer under the terms of sub-clause 11.3 may
choose to dispose, together with the OFFEROR, its BOUND SHARES to the third
proponent, it being adjusted that: I – should the third party offer not be extendable to
all BOUND SHARES, being only restricted to a given quantity of SHARES, the
PARTIES which decide not to exercise their first refusal rights and prefer to
sell their shares jointly, shall be entitled to dispose to the third party,
together with the OFFEROR, a portion of their shares pro-rata to the interest
of each of then in the total BOUND SHARES (not taking into consideration the
SHARES of the PARTY who does not wish to sell them);


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II — Notwithstanding the provisions of item
I above, in case of an acquisition of BOUND SHARES by a third party (who is not
PARTY hereof) result in such third party becoming the major individual
shareholder of the control block, the other PARTIES may choose to sell the
totality of their SHARES to such third party, in which case the offer of the
third party shall mandatorily provide for this possibility and encompass the obligation
of acquiring the SHARES from the other PARTIES. III — the other PARTIES which receive the offer under
the terms of this sub-clause 11.4 shall manifest, within the term of exercise
of the first refusal right (sub-clause 11.3 item III) the option of disposing,
depending on the case, (items I and II above) part or all their BOUND SHARES
under the penalty of loosing such right, thus releasing the third proponent
from the obligation of acquiring them; however, should the disposal option be
exercised, the BOUND SHARES adhering to the offer and the OFFERORS shall be
transferred to the third proponent by the same instrument. IV – in
the case covered by item II above, the offer of the third proponent shall be
null and void, for the purposes and effects of the sub-clause 11.3, if it does
not contain the obligation of acquiring all shares of the remaining PARTIES. 11.4.1
The provisions of sub-clause 11.4 do not apply to the disposal of BOUND SHARES
by BONAIRE for as long as it holds less than twenty percent (20%) of interest
in the CONTROL BLOCK. 11.5
The first refusal right mutually granted under sub-clause 11.1 shall not apply
in case of transfer of BOUND SHARES to the AFFILIATE, provided that: I – The AFFILIATE declares previously and in writing
to the other PARTIES and to COMPANY’s Executive Officers its unrestricted
adhesion to the AGREEMENT; II – Being the AFFILIATE controlled by the disposing
PARTY, it previously and in writing undertakes to the other PARTY(IES) not to
transfer, at whatever title or under whatever form, including as a consequence
of a merger, incorporation or scission transaction, the control of the
AFFILIATE, except if it re-buys in advance the BOUND SHARES transferred to the
AFFILIATE under the terms of this sub-clause; III – Being the AFFILIATE the controller of the PARTY,
or a company under common control, the end controlling shareholder of the
AFFILIATE undertakes, in writing, to the other PARTY(IES) not to transfer, at
whatever title or under whatever form, including as a consequence of a merger,
incorporation or scission transaction, the control of the AFFILIATE, except if
it re-buys in advance from the AFFILIATE all SHARES held by same and
(b) unrestrictly adheres to the AGREEMENT by means of a letter sent to the
other PARTY(IES) and to COMPANY’s Executive Officers. 11.6
The exclusion of the first refusal right foreseen under sub-clause 11.5 does
not cover the transfer, at any title, of BOUND SHARES to the AFFILIATE of which
capital there participate, directly or indirectly, more than one of the
PARTIES, in which case the provisions of sub-clauses 11.1 to 11.3 shall apply. 11.7
The PARTY transferring BOUND SHARES to the AFFILIATE shall be legally and
severally liable, irrespectively of any additional formality, together with the
AFFILIATE, for the compliance of its obligations foreseen under the AGREEMENT
or resulting from its performance.


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11.8 The provisions of sub-clauses 11.1 to 11.3 apply
to the first refusal right of the PARTIES to the subscription of SHARES of
capital increase of COMPANY, which shall bear preemptive rights on such capital
increase pro-rata the number of SHARES held by them. 11.9
Should BOUND SHARES of any of the PARTIES come to be subject to arrest, seizure
or judicial pledge, this fact shall imply the irrevocable offer by the PARTY
subject to JUDICIAL LITIGATION to the other PARTY(IES) to sell the LITIGATION
SHARES, observing the following provisions: I – the sales price of the LITIGATION SHARES shall be
equal to its ECONOMICAL VALUE determined (where applicable) under the terms of
sub-clauses 12.4 and 12.5; II – once the arrest, seizure or judicial pledge has
occurred, by means of service of process to COMPANY, the sales offer will be
deemed made, as covered by this sub-clause, and, consequently, the following
rules shall apply: a) within ten (10) days as of the arrest, seizure
or judicial pledge notice, there shall start the determination of the ECONOMIC
VALUE of the LITIGIOUS SHARES (being the cost of such evaluation paid by the
PARTY holding same), which, after determined, shall be notified by COMPANY to
the other PARTIES; b) during the fifteen (15) days subsequent to the
notice of the ECONOMIC VALUE of the LITIGATION SHARES, the other PARTY
(IES) shall notify the PARTY holding the LITIGATION SHARES and the COMPANY
of the exercise of the first refusal right, which shall only be validly
exercised if it involves the totality of the LITIGATION SHARES. Should more
than one PARTY exercise its first refusal right, the LITIGATION SHARES shall be
apportioned pro-rata the SHARES held by each PARTY; c) once the right to acquire the LITIGATION SHARES has
been exercised, the payment of the price shall be made as per the form and
place determined by the judge ordering the judicial constraint of the
LITIGATION SHARES, observing the following procedure: (i) should the credit guaranteed by the constraint of
the LITIGATION SHARES, including court costs and legal counsel fees, is
inferior to the ECONOMIC VALUE of the LITIGATION SHARES, the surplus of the
LITIGATION SHARES acquisition price shall be paid directly to the disposing
PARTY; (ii) should the credit guaranteed by the constraint of
the LITIGATION SHARES, including court costs and legal counsel fees, exceed the
ECONOMIC VALUE of the LITIGATION SHARES, the PARTY holding the LITIGATION
SHARES shall supplement the funds required for the Court Guarantee, under the
penalty of, by not doing so, such supplementation be made by the PARTY(IES)
exercising the first refusal right. In this case, the PARTY holding the LITIGATION
SHARES, shall be bound to return the amount paid as supplement, accrued by non
reducible compensatory fine of 20% on the value corrected by the fluctuation of
the IGP-M plus interest on arrears of at 1% per month or fraction.


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d) once the price of the LITIGATION SHARES
has been paid, should the SHARES transfer not be made by act of the Judge, the
PARTIES shall execute the legal instrument of transfer of title; III – should the judicial order of arrest, seizure or
judicial pledge of the LITIGATION SHARES be revoked (including due to
substitution of the asset object of the judicial constraint) within sixty
(60) days counted from the date of the legal notice to COMPANY as
mentioned under item II above, the offer of sale ruled under this sub-clause
shall be deemed cancelled, and the PARTY holding the LITIGATION SHARES shall
(a) evidence the revocation of the legal proceedings by means of delivery
to the other PARTY(IES) a certified copy of the revocation order, at or up to
the sixty-first date of the date of the notice to COMPANY of the arrest,
seizure or judicial pledge and (b) reimburse COMPANY or the other PARTIES,
depending on the case, for the reasonable costs incurred up to then to
determine the ECONOMIC VALUE. 11.10
Should any of the PARTIES transfer, under the terms of sub-clause 11.5, part of
its BOUND SHARES to an AFFILIATE, the following rules shall be observed:
(I) for the purposes provided under sub-clauses 11.1 to 11.4, inclusive,
the PARTY transferring the BOUND SHARES and its AFFILIATE shall be deemed a
sole shareholder of COMPANY, and, in case of disposal of BOUND SHARES by such
PARTY or its AFFILIATE, the offer ruled under sub-clause 11.3 shall be made
effective to the other PARTIES, which shall hold the first refusal right
assured under sub-clause 11.1; (II) the acquisition of shares, in case of
sales offer ruled under sub-clause 11.9, shall be made by the PARTY or
AFFILIATE holding the larger quantity of BOUND SHARES on the date of the notice
to COMPANY of the arrest, seizure or judicial pledge. 11.11
 In case of sale, assignment
or transfer, by 521 and VBC, of the BOUND SHARES belonging to same, which
result, after such transaction, in an interest share inferior to 20% and 30%,
respectively, of the BOUND SHARES, and provided BONAIRE has not exercise its
first refusal right for the acquisition of such shares, under the terms of this
clause 11, BONAIRE shall be entitled to, at its exclusive discretion, sell the
totality of the BOUND SHARES belonging to same together with the BOUND SHARES
owned by 521 or VBC object of the sale, assignment or transfer, for the same
price, term and other conditions agreed upon. In order to implement the
provisions of this sub-clause, 521 and VBC shall, whenever they aim at selling
BOUND SHARES pertaining to them, include the BOUND SHARES pertaining to BONAIRE in the corresponding negotiation. 11.12
The restrictions stipulated in this clause do not apply to the transfers of one
(1) SHARE to each person to be appointed as member of the Board of
Directors of COMPANY, which is not a shareholder, provided the beneficiary is
bound to return the SHARE received as soon as it ceases being a COMPANY
manager. The SHARES so transferred shall be computed in the lot of SHARES of
the disposing PARTY, which shall be responsible before the other PARTIES for
the compliance of the obligations arising from the present AGREEMENT by the
buyer of the SHARE, under the terms of this sub-clause. 11.13
It is a condition precedent to any transfer of BOUND SHARES that the
corresponding buyer unconditionally adheres to the present AGREEMENT, keeping
the acquired SHARES bound hereto. 11.14
The PARTIES shall be prohibited of selling SHARES in the market, after the
start-up of the public distribution of common shares of COMPANY, for the term
defined together with the Global Coordinator of the primary share offer.


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CLAUSE TWELVE – CHANGE OF CORPORATE CONTROL OF A PARTY 12.1 In case of direct or indirect change of the
corporate control of any PARTY (the OFFEROR) the other PARTIES shall be
entitled to acquire all BOUND SHARES pertaining, directly or indirectly, to the
OFFEROR, by the ECONOMIC VALUE. 12.1.1
For the purposes of this clause, change of corporate control will be evidenced
by the acquisition — under whatever form and title — by a third party (which,
at the date of execution HEREOF was not part of the PARTY control group) of
shares, quotas or partner rights assuring same the prevalence in the corporate
resolutions of the PARTY. 12.2
The provisions of sub-clause 12.1 also applies to the change of corporate
control resulting from: a)
admission of a new partner upon capital increase of the OFFEROR or of a company
holding, directly or indirectly, its control; b)
merger, incorporation or scission of the OFFEROR or of a company holding,
directly or indirectly, its control; c)
disposal of shares of the corporate capital of the OFFEROR, of a company
holding, directly or indirectly its control or of company controlled by OFFEROR
owner of BOUND SHARES. 12.3 In the case of 521 and BONAIRE, the corporate
control of which are held by Investment Funds – to wit de Investimento em Ações BB Carteira Livre I and Fundo de Investimento Financeiro BB Renda Fixa IV
(521) and Icatu Energia São Paulo Fundo Mútuo de Investimento em Ações —
Carteira Livre (BONAIRE) – the provisions of this clause shall apply to any
change implying that a third party becomes the holder of the absolute majority
of its quotas. The shareholding composition of 521 and BONAIRE and the
composition of the Investment Funds controlling same constitute attachments 1
and 2 hereof. 12.4
Should there be changes of the corporate control of the OFFEROR, including
under the terms of sub-clauses 12.2 and 12.3, the following rules will be
observed: a) the OFFEROR shall notify in writing the other PARTIES
of this fact, as well as the Chairman of the Board of Directors of COMPANY,
within maximum thirty (30) days counted from the date of the change of
control, informing, in such notice, (i) the identity of the new controller
and (ii) the ECONOMIC VALUE of the SHARES, determined by a specialized
company to be chosen by same (referred below as FIRST EVALUTION); in case of
change of control resulting from merger, incorporation or scission, the notice
covered by this item shall be made by the surviving company; (b) the other PARTIES shall, within thirty
(30) days counted from the receipt of the notice mentioned under
(a) above, notify in writing the OFFEROR and the Chairman of the Board of
Directors of COMPANY whether they accept or reject the value of the FIRST
EVALUATION of the SHARES, and, should they accept it, such acceptance shall
imply the exercise of the right assured them by this Clause; (c) should they not accept the value of the FIRST
EVALUATION, they may request the procedure of determination of the new ECONOMIC
VALUE of the BOUND SHARES of the OFFEROR (this new evaluation hereinafter
called SECOND EVALUATION), as provided under sub-clause 12.5 below;


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(d) once the first refusal right is
exercised, the purchase and sale of BOUND SHARES shall be hired during the
fifteen (15) days subsequent to the date of the exercise and the price
shall be paid cash simultaneously with the transfer of title of the SHARES; (e) Should the OFFEROR or its new controller, be
bound to sell its BOUND SHARES as a consequence of change of control, fail to
make the transfer of title of such SHARES, the other PARTY(IES) exercising
their first refusal right under the terms of this Clause may (i) make a
judicial deposit of the price of the BOUND SHARES, and (ii) request an
Arbitral Award or Judicial Ruling producing the same effect of a purchase and
sale agreement. 12.4.1
A delay of over sixty (60) days of the notice mentioned under “a” of
sub-clause 12.4 shall imply the charge of a fine at one half per cent (0,5%) of
the ECONOMIC VALUE of the SHARES, for each month of delay, being the fine
discounted from the price payable by the PARTY(IES) exercising the first
refusal right. 12.5
The procedure of determination of the value of the SECOND EVALUATION of the
SHARES shall be done as follows: (a) the interested PARTIES shall appoint a
specialized company in Corporate Evaluation, with national reputation, to
determine the amount of the SECOND EVALUATION, the award of which shall be
delivered within sixty (60) days from the notice mentioned under “a” of
sub-clause 12.4. The purchase price of the BOUND SHARES shall be the average of
the amounts of the FIRST EVALUATION and of the SECOND EVALUATION, provided the
difference between the two evaluations does not exceed twenty percent (20%). Should
the two evaluations show values with differences over 20%, the purchase price
of the BOUND SHARES shall be determined by a third specialized first line
company, chosen by the companies preparing the awards corresponding to the
FIRST EVALUATION and to the SECOND EVALUATION, and the amount determined in the
untie report shall be the final sales price of the BOUND SHARES. In case of
conflict in the choice of the company to prepare the untie report, the matter
will be solved by arbitration, according to clause 16. b) each interested PARTY shall bear the cost of the
evaluation ordered by same; and the cost of the untie report shall be borne in
equal parts by the OFFEROR (50%) and the remaining interested PARTIES (50%). (c) once determined the purchase price of the
BOUND SHARES under the terms of this sub-clause, the Chairman of the Board of
Directors of COMPANY shall notify the interested PARTIES so that they exercise
the first refusal right within fifteen (15) days. 12.5.1
The interested PARTIES shall loose the first refusal right ruled by this Clause
if they do not provide for its evaluation report on the purchase price of the
BOUND SHARES within the terms foreseen under sub-clause 12.5 “a”, nor exercise
their first refusal right within the terms and conditions defined under this
Clause. 12.6
The provisions of the above sub-clauses do not apply to the corporate
restructures where the ownership of the BOUND SHARES is transferred by singular
or universal succession, provided the corresponding successors give written
notice to the other PARTIES and to the Executive Officers of COMPANY of their
unrestricted adhesion to the AGREEMENT within the thirty (30) days
subsequent to the acquisition of the BOUND SHARES, however always before
exercising any right arising herefrom. Should there occur the case covered by
this sub-clause, the successors of the PARTY shall be deemed, for the purpose
of exercise of the rights and compliance of the obligations stipulated herein,
as jointly constituting one sole PARTY.


---



12.6.1 In the absence of the notice foreseen in the
previous sub-clause, within the term define, the PARTIES interested in
exercising the first refusal right shall notify the successor of the PARTY
undergoing reorganization to, within fifteen (15) days after the notice,
manifest on its unrestricted adhesion to the AGREEMENT. After the term covered
by this sub-clause without there being no written manifest of adhesion, the
interested PARTIES may exercise the first refusal right anytime according to
the following procedure: (a) any of the interested PARTIES shall notify
the OFFEROR (understood as such, for the purpose of this sub-clause, the
singular or universal successor of the PARTY which fails to adhere to the
AGREEMENT under the terms of sub-clause 12.6), the Chairman of the Board of
Directors of COMPANY and the remaining PARTIES of its intent of acquiring the
BOUND SHARES and requesting COMPANY to order an evaluation report on the
ECONOMIC VALUE which shall be the final purchase price of the BOUND SHARES. (b) within thirty (30) days after the
receipt of the notice of COMPANY informing the sales value of the BOUND SHARES
the interested PARTIES shall confirm to the Chairman of the Board of Directors
of COMPANY and to the OFFEROR its decision of acquiring the OFFERED SHARES. (c) once the first refusal right is exercised,
the purchase and sale of BOUND SHARES shall be implemented during the fifteen
(15) days subsequent to the date of the exercise and the price shall be
paid cash simultaneously with the transfer of title of the SHARES; CLAUSE
THIRTEEN – LIEN OF THE BOUND SHARES 13.1
The BOUND SHARES shall not be object of whatever type of lien, except in the
following cases: (a) if the creditor is BNDES and/or BNDESPAR and
the guaranteed debt arises, directly or indirectly, from finance granted
(i) to investments in the CONTROLLED or ASSOCIATED COMPANIES or
(ii) to COMPANY itself; or (b) if the creditor, by letter written to the
COMPANY Executive Officers and to the other PARTIES, before the constitution of
the material lien, (i) subordinates its right of enforcing the guarantee to the
first refusal right of the PARTIES as ruled under Clause 11 and
(ii) undertake not to interfere in the voting rights of the encumbered
shares, even in case of default of the guaranteed debt; or (c) should all other PARTIES notify COMPANY that
they agree with the lien intended by one of them. 13.2 In case of constitution of material lien on
behalf of BNDES/BNDESPAR made under the terms of item (a) of the previous
sub-clause, the PARTIES agree to subordinate the voting rights of the BOUND
SHARES encumbered to the conditions adjusted with the BNDES/BNDESPAR by the
interested PARTY. 13.3
The constitution of material liens on the BOUND SHARES without observing the
provisions of this Clause shall not be valid nor shall it produce any effects
before COMPANY and other PARTIES.


---



13.4 521 and BONAIRE are aware that: a) VBC has incurred debts within the Federal
Privatization Program by means of different issues of debentures (3rd, 6th and
8th issues) which were subscribed by the BNDESPAR (hereinafter referred to as
“debentures”) for the purpose of participating of the privatization of projects
of the electrical area; b) currently, shares issued by CPFL-D and CPFL-G owned
by VBC were given as guarantee of the payment of the “debentures” and/or bound
to the exercise of the BNDESPAR right of “converting” part of its “debentures”
in shares of such companies; c) in order to enable the public distribution of
COMPANY shares (as referred to in the WHEREAS (iv), it is necessary to release
the CPFL-D and CPFL-G shares of the above mentioned liens; d) for such purpose, VBC : (i) sill substitute
the CPFL-D and CPFL-G shares given as guarantee of the payment of the
“debentures” for BOUND SHARES belonging to VBC, which shall be subject to the
transfer limitation of shares ruled under clause 11, and (ii) shall
substitute, by COMPANY shares not bound hereto, the CPFL-D and CPFL-G shares
blocked to cover for the (possible) exercise of the BNDESPAR right of converting
part of its “debentures” in shares of such incorporations. CLAUSE
FOURTEEN – TERM 14.1
The duration hereof is twenty-five (25) years, being automatically renewed
for equal and successive periods of five (5) years, should none of the
PARTIES denounce it with the minimum advance of six (6) months prior to
the end of the contractual term than in force. CLAUSE
FIFTEEN – SPECIFIC ENFORCEMENT 15.1
The PARTIES hereby acknowledge and state that the mere payment of losses and
damages shall not constitute adequate compensation for the default of
obligations undertaken hereby. 15.2
The PARTIES shall be entitled to request to the President of the General
Meeting and the Members of the Board elected by appointment of the PARTIES
shall be entitled to request to the Chairman of the Board of Directors to
declare the invalidity of vote issued against or in disagreement of the
provisions hereof. CLAUSE
SIXTEEN – DIVERGENCIES AND ARBITRATION 16.1
Any controversy arising from the performance or interpretation of the AGREEMENT
which is not amicably resolved within thirty (30) days after one of the
PARTIES having informed the other PARTIES in writing on the existence of such
controversy, shall be subject to the judgment of the Market Arbitration Chamber
instituted by BOVESPA (Securities Exchange of the State of São Paulo)
(hereinafter simply called “Arbitration Court”). The Arbitration Court shall be
comprised of as many referees as the diverging PARTIES and of one other referee
who shall act as President of the Arbitration Court, to be chosen by the other
referees. The choice of the referees shall be done by the PARTIES involved in
the dispute, being each PARTY sustaining a diverging position the appointment
of a representative in the Arbitration Court. The President of the Arbitration Court shall have, in addition to his vote, the quality vote in case of tie. 16.2
The Arbitration Court shall observe the procedural rules of the Market
Arbitration Chamber Regulation as instituted by BOVESPA. The Arbitration Court shall meet in the City ofSão Paulo, State of São
Paulo, and its decision shall be final, obliging the PARTIES and their
successors at whatever title. The Arbitral award shall constitute an executive
extrajudicial security, for the purpose of enforcing its content against the
PARTIES refusing to comply with its ruling.


---



16.3
The arbitral award shall determine that the arbitration costs or costs of
whatever legal proceedings referring to the arbitration or arising therefrom,
including legal counsel fees, experts, referees and court costs shall be borne
by the defeated PARTY(IES). Should the arbitral award be partially favorable to
all PARTIES, the Arbitration Court shall specify the form and proportion
whereby each PARTY shall bear the costs and expenses. 16.4 Without
prejudice of the provisions of this Clause, the PARTIES hereby acknowledge and
state reciprocately their legitimate interest in exercising the right to sue
before the Judicial Power, provided this is exclusively addressed to urgent
protective injunction, to, by means of the obligation of the legal ruling,
assure the effectiveness of the arbitration judgment whenever this is
necessary, through strict caution preventive and restrictive measures, with a
preparation or incidental character. CLAUSE
SEVENTEEN – GENERAL PROVISIONS 17.1
The PARTIES hereby undertake, by itself or its successors at whatever title, to
comply with the present AGREEMENT such as contained herein. 17.2
The failure to exercise, in whole or part, the rights attributed hereby to any of
the PARTIES shall not imply waiver or novation, being characterized as mere
liberality act. 17.3
Any amendment hereto shall only be valid if made by written instrument,
executed by all PARTIES. 17.4
Should any provision hereof be deemed undemandable as a consequence of arbitral
award or legal ruling, the PARTIES hereby undertake to proceed to the
substitution of such provision by another leading to equivalent result, so as
to preserve, to the maximum possible extent, the integrity of the commitments reciprocately
undertaken hereby. 17.5
The monetary values expressed herein shall be updated on January 1st of each
year, according to the fluctuation of the General Market Price Rate – IGP-M,
published by Getúlio Vargas Foundation, or, in its absence, of another rate
published by the same Foundation, reflecting the loss of acquisition power of
the local currency occurring during the period. 17.5.1
Should the rates reflected herein fail to reflect the evolution of the relative
prices in the country, the PARTIES shall proceed to review the monetary values
expressed herein for the purpose of adjust them to the actual evolution of
prices. 17.6
All notices provided for herein shall be done in writing and deemed actually
given when transmitted by cable, facsimile or electronic data transmission (in
each case, subject to the receipt of the appropriate receipt code or any
receipt confirmation by the receiving PARTY) or when delivered by hand or sent
by certified letter to the address of the PARTIES, as indicated below: If to
VBC: VBC ENERGIA S.A. Avenida Engenheiro Luís Carlos Berrini, no 1297-1307, 13o andar,
conjunto 132


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ZIP CODE 04571-010 São Paulo, SP Attn: Marcelo Maia de Azevedo Corrêa (President) Phone: (11) 5102-7050 Fax: (11) 5505-9161 e-mail: mcorrea@vbcenergia.com.br; and  Attn.: José Said de Brito (Director) Phone: (11) 3225-3168 Fax: (11) 3361-3624 e-mail: said@votorantim-energia.com.br  If to 521: 521 PARTICIPAÇÕES S.A., Praia de Botafogo, 501 — 4o andar — Botafogo ZIP CODE: 22.250-040 — Rio de Janeiro — RJ Attn: Gilberto Audelino Correa (Director of
Relations with Investors) Phone: (21) 3870-1011 Fax: (21) 3870-1951 e-mail: dirin@previ.com.br Attn: Sergio da Silva Rosa (Director of
Interests of PREVI) Phone: (21) 3870-1021 Fax: (21) 3870-1051 e-mail: dipar@previ.com.br Attn: Aloisio Macário de Souza (Team
Manager – Interest Management) Phone: (21) 3870-1202 Fax: (21) 3870-1220 e-mail: macario@previ.com.br If to BONAIRE BONAIRE PARTICIPAÇÕES S.A., Attn: Carlos Eduardo Reich Av. Presidente Wilson, 231 — 9o andar ZIP CODE 20.030-021 — Rio de Janeiro — RJ Phone: (21) 3804-8722 Fax: (21) 2533-3136 e-mail: creich@icatu.com.br  17.7
Under the terms of article 118 of Law No. 6404 of 1976, the present
AGREEMENT shall be filed at the COMPANY headquarters and recorded into the
books of the financial institution depository of the of record shares of
COMPANY, which shall take note in the deposit account of the BOUND SHARES and
corresponding statement provided to the PARTIES of the following text: “The shares
represented by the present certificate or object of the present deposit
account, are subject to the system of the Shareholders Agreementexecuted between VBC Energia S.A., 521 Participações S.A. and Bonaire Participações S.A. on [day] of [month] of [year], ruling the disposal and
encumbrance of such shares and of the subscription rights arising therefrom.
This shareholders’ agreement is filed at COMPANY’s headquarters for all
purposes and effects of article 119 of Law number 6404/76.”


---



17.8
After the registration for negotiation of COMPANY shares within Stock
Exchanges, should it be further decided to cancel their registration of open
company for negotiation of shares in the market, the minority shareholders
shall be entitled to sell its shares for their economic value as ruled under
articles 4 and 4-A of Law 6404/76, with the wording given by Law 10.303/2001. 17.9
COMPANY attends the present AGREEMENT to become aware of its terms, obliging to
observe it and to file it within its headquarters. 17.10
The SUBSIDIARIES shall, for the purposes and effects of article 118 of Law
6404/76, notified of the existence hereof, and a certified copy shall be sent
thereto to be filed in its headquarters. 17.11
All and any matter arising from the performance hereof shall be decided at the
Courts of COMPANY’s headquarters. IN
WITNESS WHEREOF, the PARTIES execute the present AGREEMENT in six (6)
counterparts of equal tenor and for one sole effect, in the presence of the two
undersigned witnesses. São Paulo, March 22, 2002  VBC ENERGIA S.A. Name:
 
 Name:Title:
 
 Title:
 521 PARTICIPAÇÕES
S.A., Name:
 
 Name:Title:
 
 Title:


---



Continuation of the signatures of the Shareholders’
Agreement of Draft II Participações S.A. executed on March 22, 2002.  BONAIRE
PARTICIPAÇÕES S.A., Name:
 
 Name:Title:
 
 Title:
 DRAFT II
PARTICIPAÇÕES S.A. Name:
 
 Name:Title:
 
 Title:
 
 Witnesses:Name:
 
 Name:ID:
 
 ID:


---



AMENDMENT No. 1 TO THE SHAREHOLDERS
AGREEMENT
OF CPFL ENERGIA S.A. (former Draft II Participações S.A.) By this
private instrument, the parties: VBC
ENERGIA S.A., former Serra da Mesa Energia S.A., a joint-stock corporation
with offices in the city of São Paulo, State of São Paulo, at Avenida
Engenheiro Luís Carlos Berrini No. 1297/1307, 13rd floor, suite 132,
enrolled with the National Register of Legal Entities (“CNPJ/MF”) under No.
00.095.147/0001-02, hereinafter simply referred to as “VBC”; 521
PARTICIPAÇÕES S.A., a joint-stock corporation with offices in the city of
Rio de Janeiro, State of Rio de Janeiro, at Praia de Botafogo No. 501 – 4th
floor, enrolled with the National Register of Legal Entities (“CNPJ/MF”) under
No. 01.547.749/0001-16, hereinafter simply referred to as “521”; BONAIRE
PARTICIPAÇÕES S.A., a joint-stock corporation with offices in the city of
São Paulo, State of São Paulo, at Avenida Paulista No. 37, 10th
floor– part occupancy, enrolled with the National Register of Legal Entities
(“CNPJ/MF”) under No. 02.117.801/0001-67, hereinafter simply referred to
as “BONAIRE”; and they may be individually referred to as PARTY, or
collectively PARTIES; and, as
Intervening Consenting Party, CPFL
ENERGIA S.A., former Draft II Participações S.A., a joint-stock corporation
with offices in the city of São Paulo, State of São Paulo, at Rua Ramos Batista
No. 444, enrolled with the National Register of Legal Entities (“CNPJ/MF”)
under No. 02.429.144/0001-93, hereinafter simply referred to as “COMPANY”;
the PARTIES and COMPANY being represented according to their respective bylaws, WHEREAS: (a)
 
 On March 22, 2002 the PARTIES
  executed the Shareholders Agreement of Draft II Participações S.A. (the
  “AGREEMENT”), by which the PARTIES (i) were bound to increase the capital of
  COMPANY; (ii) expressed their wish to list COMPANY’s shares in Brazilian
  stock exchanges, according to the rules of the New Market, and abroad; and
  (iii) regulated the exercise of the voting right inherent to their
  shares, the restriction on the circulation, the mutual relations as
  controlling shareholders, and established the general principles to exercise
  of the controlling power and management if COMPANY and its subsidiaries.(b)
 
 the parties wish to amend the AGREEMENT
  to (i) specify the new quantity of BOUND SHARES of each PARTY, and
  update the table in sub-clause 3.1.; (ii) amend sub-clauses 1.1(c), 5.4,
  8.9.6, 8.9.7, 8.10, 8.10.2, 8.12, 12.3, and 17.6; and (iii) add
  sub-clauses 5.8.1, 8.9.2.1, and 17.7.1, of the AGREEMENT;
 Have
agreed to enter into this Amendment No. 1 to the Shareholders Agreement of
CPFL Energia S.A., former Draft II Participações S.A. (the “AMENDMENT”), as
follows: Unless
as otherwise indicated, the other capitalized terms and expressions herein
shall have the same meanings attributed thereto in the text or in the
AGREEMENT. 1.CONFIRMATION


---



1.1.Considering the increase of capital of COMPANY resolved in
the Extraordinary General Meeting (“AGE”) of August 6, 2002, and in compliance with the provision of sub-clause 3.1.2 of the AGREEMENT, the PARTIES
determine, in the table below, which shall substitute the table contained in
sub-clause 3.1, the new quantity of shares bound to the agreement: PARTY
 
 NUMBER
  OF COMMONSHARES
 
 PERCENTAGEIN
  THE ENTIRE
 
 IN
  THE
  CONTROLCAPITAL
 
 BLOCKVBC
 
 
 1,229,453,666
 
 
 
 36.26
 %
 
 
 45.32
 %521
 
 
 1,030,872,091
 
 
 
 30.40
 %
 
 
 38.00
 %BONAIRE
 
 
 452,473,000
 
 
 
 13.34
 %
 
 
 16.68
 %Total Shares
 
 
 2,712,798,757
 
 
 
 80.00
 %
 
 
 100.00
 %
   1.2.
 
 The PARTIES hereby mutually agree to
  (i) amend sub-clauses 1.1(c), 5.4, 8.9.6, 8.9.7, 8.10, 8.10.2, 8.12,
  12.3, and 17.6; and (ii) add sub-clauses 5.8.1 and 8.9.2.1 and 17.7.1,
  of the AGREEMENT; as follows:
  (a)
 
 sub-clause 1.1(c) shall be read as
  follows:
 “(c) AGREEMENT
– means this Shareholders Agreement.” (b)
 
 sub-clause 5.4 shall be read as follows:
 “5.4 A PREVIOUS MEETING shall be mandatory for all matters requiring the approval of the General
Meeting of COMPANY, its SUBSIDIARIES or ASSOCIATED COMPANIES, or those in which
the Board of Directors of COMPANY or its SUBSIDIARIES can only resolve by the
qualified majority (pursuant to sub-clause 7.4 of the AGREEMENT). Either PARTY,
however, shall be entitled to require the holding of a PREVIOUS MEETING, called
according to sub-clause 5.2., to define the orientation of vote of the
representatives of the PARTIES in the Board of Directors of COMPANY or its
SUBSIDIARIES, in relation to any other matter rather than those listed in
sub-clause 7.4 hereof. A PREVIOUS MEETING shall also be required for the Board
of Directors (of COMPANY and its SUBSIDIARIES) to resolve on the following
matters: a)
approval of the other members of the Staff of Officers, appointed by the Chief
Executive Officer previously elected by the Board of Directors; and b)
execution of agreement of any nature in a total amount higher than R$
20 million, even if such agreement is related to the expenses set forth in
the ANNUAL BUDGET or in the 5-YEAR BUSINESS PLAN.” (c)
 
 sub-clause 8.9.6 shall be read as
  follows:
 “8.9.6Any member of the Committee who may have, actual or
potential conflict of interests or which are related to a RELATED PARTY whose
main activities imply theactual or potential
existence of conflict of interests, with a certain matter to be examined by the
Committee, shall not participate in the Committee Meeting, in which such matter
is analyzed. Notwithstanding, upon request of the Committee, the member in
situation of conflict of interests may be called to provide specific
information.”


---



(d)
 
 sub-clause 8.9.7 shall be read as
  follows:
 “8.9.7The matters analyzed by each of the Committees shall be
subject of reports and proposals, which do not bind the resolution of the Board
of Directors. They should be included in the reports and proposals mentioned
above, including, eventual dissidence, if so required by any of the members of
the respective Committee, as well as the grounds for the dissidence.” (e)
 
 sub-clause 8.10 shall be read as
  follows:
 “8.10EXECUTIVE BOARD – The Executive Board, chosen for a three
(3) year term, shall be comprised of six (6) members, being one
(1) Chief Executive Officer, one (1) Strategy Vice-President, one
(1) Financial Vice-President (also responsible for Relations with
Investors), one (1) Vice-President Director of Power Management, one
(1) Distribution Vice-President Director, and one (1) Generation
Vice-President Director.” (f)
 
 sub-clause 8.10.2 shall be read as
  follows:
 “8.10.2The Chief Executive Officer of COMPANY shall also act as such
in the SUBSIDIARIES, and shall be incumbent, according to item 8.10.1, to
submit the names of the professionals who will shall fill in the other Executive
Officers positions of the SUBSIDIARIES. The Power Vice-President Directors,
Distribution and Generation Vice-President Directors shall be, respectively,
the Superintendents (and main executives) of the SUBSIDIARIES by means of which
the activities of power management, distribution and generation will shall be
exercised.” (g)
 
 sub-clause 8.12 shall be read as
  follows:
 “8.12During the period while the new Chief Executive Officer  is
being selected, the Chairman of the Board of Directors shall take over as
interim Chief Executive Officer, or, if this is not possible, the Financial
Vice-President Director shall take over.” (h)
 
 sub-clause 12.3 shall be read as
  follows:
 “12.3In the case of 521 and BONAIRE, the corporate control of
which are held by Investment Funds – i.e., Fundo de Investimento em Ações BB Carteira Livre I and Fundo de Investimento Financeiro BB Renda Fixa IV
(521) and Mellon Energia São Paulo Fundo de Investimento em Ações
(BONAIRE) – the provisions of this clause shall apply to any change implying
that a third party becomes the holder of the absolute majority of its quotas.
The shareholding composition of 521 and BONAIRE and the composition of the
Investment Funds controlling same constitute attachments 1 and 2 hereof.” (i)
 
 sub-clause 17.6 shall be read as
  follows:


---



“17.6All notices provided for herein shall be done in writing and
deemed actually given when transmitted by cable, facsimile or electronic data
transmission (in each case, subject to the receipt of the appropriate receipt
code or any receipt confirmation by the receiving PARTY) or when delivered by
hand or sent by certified letter to the address of the PARTIES, as indicated
below:” ................ If to BONAIRE BONAIRE
PARTICIPAÇÕES S.A., Attn.: Carlos
Eduardo ReichAv. Almirante Barroso 52, 33o andarCEP 20.031-000 — Rio de Janeiro — RJPhone: (21) 2510-9990Fax: (21) 2510-9901e-mail: carlosreich@mellonbrascan.com.br Attn.:
Presidente da Fundação CESPAlameda Santos, no 2.477CEP 01419-907 – São Paulo — SPPhone: (11) 3068-3221Fax: (11) 3068-3051e-mail: presidencia@funcesp.com.br Attn.:
Presidente da PETROS — Fundação Petrobras de Seguridade SocialRua do Ouvidor, no 98CEP 20040-030 — Rio de Janeiro — RJPhone: (21) 2506-0577Fax: (21) 2506-0510e-mail: cflory@petros.com.br Attn.: Presidente da Fundação Sistel
SEPS EQ 702/902, 2o andar
CEP 70390-025 — Brasília — DF
Phone: (61) 317-7242
Fax: (61) 322-4475 e-mail: pimentel@sistel.com.br”  (j)
 
 added sub-clause 5.8.1, which shall be
  read as follows:
 “5.8.1Notwithstanding the provision in sub-clause 5.8 above, in
the resolutions made in PREVIOUS MEETINGS the PARTIES shall be bound to comply
with the provisions of art. 115, Law 6.404/76, which provides for the abuse of
voting right and conflict of interests.” (l)
 
 added sub-clause 8.9.2.1, which shall be
  read as follows:
 “8.9.2.1Upon the request of either PARTY, substitute members shall
also be appointed by the Board of Directors for the Committees referred to in
sub-clause 8.9.2 above (PARTY entitled to appoint the first appointed member
also being incumbent to appoint the respective substitute). The substitute
member shall substitute the firstappointed member in
meetings of the Committee, in which, by the tenor of the matter to be analyzed,
the first appointed member has actual or potential conflict of interests, —
because of the personal situation of the first appointed member, or by that
fact that s/he is bound to the RELATED PARTY, whose preponderant activities
imply the actual or potential existence of conflict of interests with the
matter submitted for the Committee. Staff individuals of VBC, BONAIRE, 521 or
Previ — Caixa de Previdência dos Funcionários do Banco do Brasil (in the case
of the latter including both its employees and that of the sponsors assigned
thereto) may be appointed for the Committees – without any potential or
effective conflict of interests resulting therefrom—.”


---



(m)
 
 added sub-clause 17.7.1, which shall be
  read as follows:
 “17.7.1.The PARTIES shall be bound not to execute, except jointly,
any other agreement of the same nature (agreement of vote) during the
effectiveness of this AGREEMENT.” 1.3.Considering
the change of name of the investments funds controlling BONAIRE, as reflected
in the new wording of sub-clause 12.3 approved in letter (h), item 1.2 above,
Attachment 2 of the AGREEMENT is hereby adapted, and substituted for the
document attached hereto. 2.CONFIRMATION 2.1.All other
clauses and provisions of the Agreement that have not been expressly changed
hereby shall remain unchanged and are hereby confirmed.


---



IN
WITNESS WHEREOF, the
PARTIES execute this Amendment in six (6) counterparts of equal content
and form, in the presence of the two undersigned witnesses. São Paulo, August 27,
2002. VBC ENERGIA S.A. Name:
  Title
 
 
 
 Name:
  Title
 521 PARTICIPAÇÕES
S.A. Name:
  Title
 
 
 
 Name:
  Title
 BONAIRE
PARTICIPAÇÕES S.A. Name:
  Title
 
 
 
 Name:
  Title
 CPFL ENERGIA S.A. Name:
  Title
 
 
 
 Name:
  Title
 Witnesses Name:
  IDENTIFICATION CARD (“RG”):
 
 
 
 Name:
  IDENTIFICATION CARD (“RG”):


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AMENDMENT No. 2 TO THE SHAREHOLDERS
AGREEMENT
OF CPFL ENERGIA S.A. (former Draft II Participações S.A.) By this
private instrument, the parties: VBC ENERGIA S.A., a joint-stock corporation with offices in the city
of São Paulo, State of São Paulo, at Avenida Engenheiro Luís Carlos Berrini,
No. 1297/1307, 13th floor, suite 132, enrolled with the National
Register of Legal Entities of the Ministry of Finance (“CNPJ/MF”) under
No. 00.095.147/0001-02, hereinafter simply referred to as “VBC”; 521 PARTICIPAÇÕES S.A., a joint-stock corporation with offices in the city
of Rio de Janeiro, State of Rio de Janeiro, at Praia de Botafogo, 501 — 4th
floor, enrolled with the National Register of Legal Entities of the Ministry of
Finance (“CNPJ/MF”) under No. 01.547.749/0001-16, hereinafter simply
referred to as “521”; BONAIRE PARTICIPAÇÕES S.A., a joint-stock corporation with offices in the city
of São Paulo, State of São Paulo, at Avenida Paulista, 37, 10th
floor - part occupancy, enrolled with the National Register of Legal Entities
of the Ministry of Finance (“CNPJ/MF”) under No. 02.117.801/0001-67,
hereinafter simply referred to as “BONAIRE”; and they may be individually
referred to as PARTY, or collectively PARTIES; and, as
Intervening Consenting Party, CPFL ENERGIA S.A., a joint-stock corporation with offices in the city
of São Paulo, State of São Paulo, at Rua Ramos Batista, 444, enrolled with the
National Register of Legal Entities of the Ministry of Finance (“CNPJ/MF”)
under No. 02.429.144/0001-93, hereinafter simply referred to as “COMPANY”;
the PARTIES and COMPANY being represented according to their respective bylaws; WHEREAS: (a)
 
 The PARTIES, by means of the
  Shareholders Agreement of COMPANY executed on March 22, 2002, and
  amended on August 27, 2002 (the “AGREEMENT”) (i) were bound to increase
  the capital of COMPANY; (ii) expressed their wish to list COMPANY’s
  shares in Brazilian stock exchanges, according to the rules of the New
  Market, and abroad; and (iii) regulated the exercise of the voting right
  inherent to their shares, the restriction on the circulation, the mutual
  relations as controlling shareholders, and established the general principles
  to exercise of the controlling power and management if COMPANY and its
  subsidiaries.(b)
 
 In a meeting held on October 20,
  2003, the Board of Directors of CPFL ENERGIA resolved to increase the capital
  of the company, subject to the limits of its authorized capital, from R$
  3,390,998,447.00 to R$ 4,940,998,445.90, upon the issuance of 727,699,530 new
  shares; and(c)
 
 the PARTIES wish to amend the AGREEMENT
  to (i) revoke clauses 3.1.1 and 3.1.2, by virtue of its compliance and
  loss of object; and (ii) amend sub-clause 3.1., in order to specify the
  new relation between the BOUND SHARES held by each of the PARTIES and their
  respective shares in the capital of COMPANY;
 Have
agreed to enter into this Amendment # 2 to the Shareholders Agreement of CPFL
Energia S.A. (the “AMENDMENT”), as follows:


---



Unless as otherwise indicated, the other capitalized
terms and expressions herein shall have the same meanings attributed thereto in
the text or in the AGREEMENT. 1.  CORRECTION 1.1.The PARTIES
have hereby mutually agreed to: (i) revoke sub-clauses 3.1.1 and 3.1.2 of
the AGREEMENT; and (ii) amend sub-clause 3.1 of the AGREEMENT, which shall
be read as follows: “3.1The following
SHARES of each PARTY are bound to the AGREEMENT, which comprise the
participation percentage in the entire capital of COMPANY and in the CONTROL
BLOCK, as shown in the table below: PARTY
 
 NUMBER
  OF COMMON
 
 PERCENTAGESHARESBOUND
  TO THEAGREEMENTIN
  THE ENTIRE
 
 IN
  THECAPITAL
 
 CONTROLBLOCKVBC
 
 
 1,229,453,666
 
 
 
 29.85
 %
 
 
 45.32
 %521
 
 
 1,030,872,091
 
 
 
 25.03
 %
 
 
 38.00
 %BONAIRE
 
 
 452,473,000
 
 
 
 10.99
 %
 
 
 16.68
 %Total Shares
 
 
 2,712,798,757
 
 
 
 65.87
 %
 
 
 100.00
 %
 2.CONFIRMATION 2.1.All other
clauses and provisions of the AGREEMENT that have not been expressly changed
hereby shall remain unchanged and are hereby confirmed. IN
WITNESS WHEREOF, the
PARTIES execute this Amendment in six (6) counterparts of equal tenor and
form, in the presence of the two (2) undersigned witnesses. São Paulo,
November 5, 2003. VBC ENERGIA S.A. Name:
  Title
 
 
 
 Name:
  Title
 521 PARTICIPAÇÕES
S.A. Name:
  Title
 
 
 
 Name:
  Title


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Continuation of the signatures of the Amendment # 2 to
the Shareholders Agreement of CPFL Energia S.A. executed on November 5,
2003.  BONAIRE
PARTICIPAÇÕES S.A. Name:
  Title
 
 
 
 Name:
  Title
 CPFL ENERGIA S.A. Name:
  Title
 
 
 
 Name:
  Title
 Witnesses Name:
  IDENTIFICATION CARD (“RG”):
 
 
 
 Name:
  IDENTIFICATION CARD (“RG”):


---



AMENDMENT No. 3 TO THE SHAREHOLDERS
AGREEMENT
OF CPFL ENERGIA S.A.(former
Draft II Participações S.A.) By this private instrument, VBC ENERGIA S.A., a joint-stock corporation with its head office in
the city of São Paulo, State of São Paulo, at Avenida Engenheiro Luís Carlos
Berrini, 1297/1307, 14th floor, suite 142, enrolled in the Corporate Taxpayers
Register of the Ministry of Finance (“CNPJ/MF”) under no 00.095.147/0001-02,
herein represented in accordance with its bylaws, hereinafter simply referred
to as “VBC”; 521 PARTICIPAÇÕES S.A., a joint-stock corporation with its head office in
the city of Rio de Janeiro, State of Rio de Janeiro, at Rua Senador Dantas no
105, 37th floor, enrolled in the Corporate Taxpayers Register of the Ministry
of Finance (“CNPJ/MF”) under no 01.547.749/0001-16, herein represented in
accordance with its bylaws, hereinafter simply referred to as “521”; BONAIRE PARTICIPAÇÕES S.A., a joint-stock corporation with its head office in
the city of São Paulo, State of São Paulo, at R. Iguatemi no 192 , suite 243,
enrolled in the Corporate Taxpayers Register of the Ministry of Finance
(“CNPJ/MF”) under no 02.117.801/0001-67, herein represented in accordance with
its bylaws, hereinafter simply referred to as “BONAIRE”; VBC, 521 and BONAIRE, hereinafter referred to
collectively as “PARTIES”, or individually as “PARTY”; And also, as Intervening Consenting Party, CPFL ENERGIA S.A., a joint-stock corporation with its head office in
the city of São Paulo, State of São Paulo, at Rua Gomes de Carvalho no 1510,
suite 02, 14th floor, enrolled in the Corporate Taxpayers Register of the
Ministry of Finance (“CNPJ/MF”) under n.o 02.429.144/0001-93,herein
represented in accordance with its bylaws, hereinafter simply referred to as “COMPANY”; WHEREAS: (a)the PARTIES,by means of the
COMPANY's Shareholders Agreement, signed on March 22, 2002 and amended on
August 27, 2002 (“1stAMENDMENT”) and November 5, 2003 (“2ndAMENDMENT”) (the “AGREEMENT”), regulated the exercise of
the voting right inherent to their shares, the restriction on the circulation,
the mutual relations as controlling shareholders and established the general
principles for the exercise of the controlling power and management of the
COMPANY, its SUBSIDIARIES and ASSOCIATED COMPANIES; (b)the PARTIES wish to amend subclause 3.1. of
the AGREEMENT, as a result of the reverse split of shares of the COMPANY and
the processes of the merger of shares issued by Companhia Paulista de Força e
Luz (“Paulista”), Companhia Piratininga de Força e Luz (“Piratininga”) and CPFL
Geração de Energia S.A.(“CPFL G”); (c)the PARTIES wish to amend the composition
of the Board of Directors of the COMPANY, its SUBSIDIARIES and ASSOCIATED
COMPANIES; (d)the PARTIES wish to amend the matters
which, pursuant to the AGREEMENT, require the holding of PRIOR MEETINGS, which
precede the General Meetings and the meetings ofthe
Board of Directors of the COMPANY, its SUBSIDIARIES and ASSOCIATED COMPANIES;


---



(e)the PARTIES wish to amend the structure of
the COMPANY's advisory committees, in accordance with the Corporate Governance
Model approved by Board of Directors in a meeting held on September 27, 2006. (f)the PARTIES wish to amend subclause 17.6.
of the AGREEMENT, in order to update the addresses for dispatch of
communications to the PARTIES; and (g)the PARTIES are interested in amending the
AGREEMENT to reflect the matters set forth above; They herewith sign the Third Amendment to the
Shareholders Agreement of CPFL Energia S.A. (“3rdAMENDMENT”), in accordance with the following clauses and
conditions: Unless otherwise indicated, the other capitalized
terms and expressions in this 3rdAMENDMENT shall have the same meanings attributed
thereto in the text or in the AGREEMENT. 1.         RECTIFICATION 1.1.The PARTIES, by
mutual agreement, herewith resolve to amend subclause 3.1. of the AGREEMENT,
which shall now read as follows: “3.1.   The following SHARES of each PARTY are
bound to the AGREEMENT, and comprise the participation percentage in the
CONTROL BLOCK of the COMPANY, as shown in the table below: ” 1.2.The PARTIES
herewith resolve to amend subclause 7.4. to exclude the following letters: (g) issuance of subscription bonus within the limit of
the authorized capital; (r) details of the matters to be submitted to previous
analysis of each of the Committees, as provided for in sub-clause 8.9.4; and (s) compensation of the members of the Committees
(sub-clause 8.9.2) that are not part of the COMPANY staff; 1.2.1. The PARTIES herewith resolve to amend the
wording of items (i) and (m) of clause 7.4, which shall come into effect with
the following new wording:


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“(i) execution of an agreement of any
nature of a total amount higher than R$ 20 million, unless the agreement
in question is foreseen in the ANNUAL BUDGET;” “(m) selection and substitution of the COMPANY’s
independent accountants, if the company selected is not regarded as first class
and does not have international operations;” As a result of the above amendment, the other letters
of the above-mentioned subclause 7.4 were renamed. 1.3.In view of the change in the composition of the Board
of Directors of the COMPANY, the PARTIES resolve to amend subclauses 8.2. and
8.2.1, 8.2.1.1., 8.2.2. and 8.7. of the AGREEMENT, which shall now read as
follows: “8.2. BOARD OF DIRECTORS – The Board of Directors of
the COMPANY shall be comprised of at least 7 (seven) members and a maximum of 9
(nine) members, one of whom will be the Chairman, elected for a mandate of one
01 (one) year, who may be reelected.” “8.2.1.            The PARTIES shall elect, jointly,
6 (six) members for the Board of Directors (except under the circumstances
dealt with in subclause 8.2.2.1 below). The number of members of the Board of
Directors that each PARTY is entitled to appoint shall be in accordance with
the participation of the PARTIES in the CONTROL BLOCK, it being incumbent on: a)         VBC, to appoint 3 (three) members; b)         521, to appoint 2 (two) members; c)         BONAIRE, to appoint 1 (one) member. 8.2.1.1 The number of members of the Board of
Directors that each PARTY is entitled to appoint, pursuant to subclause 8.2.1
above, takes into account the current participation of the PARTIES in the
CONTROL BLOCK. In the event of amendment of the participation of any of the
PARTIES in the total BOUND SHARES, the number of Board Members that the PARTY
in question will be entitled to appoint shall be adapted to reflect this
change, however, the number of Board Members that the PARTY whose relative
interest in the total BOUND SHARES has not changed shall remain unaltered.” “8.2.2. If the minority shareholders, exercising the
rights granted to them under art. 141 main clause and 141, §§ 4 and 5, of Law
6.404/76, elect one member to the Board of Directors, who, pursuant to the
BOVESPA (Stock Exchange of the State of São Paulo) New Market Regulations,
meets the requirements for classification as an independent board member and is
designation as such, VBC, 521 and BONAIRE shall abstain from proposing to the
General Meeting a name or names that meet this definition. 8.2.2.1 If the situation described in subclause 8.2.2
does not arise, in order to comply with the definition of independent board
member, pursuant to the BOVESPA New Market regulations, VBC, 521 and Bonaire,
by mutual agreement, shall propose to the General Meeting, (a) a name or names
that meet this definition. "8.7. The meetings of the Board of Directors of the
COMPANY shall be held at least once every month,  and may, however, be held
more frequently, should the Chairman of the Board of Directors so request, on
his own initiative or at the request of any member of the Board of Directors.
The meetings of the Board of Directors shall be called 9 (nine) days in
advance, by notice sent by the Chairman of the Board, indicating the matters to
be discussed andaccompanied by any necessary
supporting documentation. The presence of all members shall allow the meetings
of the Board of Directors to be held irrespectively of a call notice."


---



1.4.The
PARTIES herewith resolve to change the structure of COMPANY's advisory
Committees, and therefore amend subclauses 8.9., 8.9.1., 8.9.2., 8.9.3.,
8.9.4., 8.9.5., 8.9.6. and 8.9.7 of the AGREEMENT, and add subclauses 8.9.1.2.,
8.9.1.3., 8.9.2.1., 8.9.2.2. and 8.9.7.1. to that document which shall come
into effect with the following wording: “8.9.CommitteesThe Board of Directors, in
the resolutions covering the activities both of the COMPANY and its
SUBSIDIARIES or ASSOCIATED COMPANIES, shall be assisted by 3 (three)
Committees, as follows: (a) Management Processes; (b) Human Resources
Management; and (c) Related Parties.” “8.9.1.            The Human Resources Management Committee
shall be permanent, meeting at least once every half-year, with one meeting in
February and another in July.  The  Management Processes and Related Parties
Committees shall not be permanent and shall meet at the request of the Board of
Directors, whenever it is necessary to analyze and state an opinion on the
matters under their jurisdiction, in accordance with the internal regulations
laid down in subclause 8.9.4 it being understood that, if the matters relate to
transactions involving RELATED PARTIES, the Board of Directors must call the
competent Committee to consider them.” “8.9.1.2.         The Related Parties and Management
Processes Committees shall be called by notice from the Secretary of the Board
of Directors, who shall forward to the Committee in question, prior to
discussion by the Board of Directors, the matters to be considered by the
Board, with the knowledge of the Chairman of the Board of Directors and of the Chief
Executive Officer of the COMPANY.” “8.9.1.3.         The meetings of the Committees
shall only be held with the presence of all their members. Any member who is
unable to attend shall advise the Secretary of the Board, prior to the date of
the meeting, the name of his substitute, who will represent him only at that
meeting. The Secretary shall inform the other members about his absence and the
name of the substitute.” “8.9.2.            The Management Processes and
Related Parties Committees shall each be comprised of 3 (three) members, and at
least 01 (one) member of each Committee should be a standing or alternate
member of the Board of Directors of the COMPANY. The Human Resources Management
Committee shall be comprised of 3 (three) members, should all be standing or
alternate members of the Board of Directors of CPFL. “8.9.2.1.         It will be incumbent on VBC, 521
and BONAIRE to nominate one member each, for each of the Committees mentioned
in clause 8.9., for subsequent appointment by the Board of Directors of the
COMPANY. The members of the Committees shall have a mandate of 1 (one) year, as
from the date of their appointment, and may be reappointed.” “8.9.2.2.         The members of the Committees shall
not have alternates bound to them, and each member may invite only one
specialist to assist them in the specific work, by prior agreement of the other
members. Proposals for the participation of specialists shall be forwarded via
the Secretary of the Board, and the specialists shall not be considered
permanent members of the Committees in question.” “8.9.2.3.         The Meetings of the Management
Processes and Related Parties Committees shall only be installed with the
presence of their 3 (three) members; if there is no quorum for installation of
the meeting, a new call shall be made with at least 2 (two) days notice.


---



8.9.2.4.            After beinginstalledwith the presence of
its 3 (three) members, the Related Parties Committee may validly decide by the
vote of only 2 (two) of its members if the matter to be discussed relates to
one of the shareholders VBC, 521 and BONAIRE, and the undecided member (the
member that has been appointed by the undecided shareholder) shall not take
part in the decision." “8.9.3.            In the first meeting held after
the appointment of members of the Committees by the Board of Directors, 1 (one)
Coordinator shall be chosen for each committee, by consensus of all its
members, who shall necessarily be a standing or alternate member of the Board
of Directors of the COMPANY.” “8.9.4The details of the matters to be
submitted for the prior analysis of each of the Committees shall be defined
internally, duly approved by the Board of Directors, it being established,
however that it will be incumbent on.” a)the Management
Processes Committee: to assure the quality of the information received by the
Board of Directors; to submit proposals for improvement in the Management
Processes of the COMPANY, its Subsidiaries and Associated Companies; to assess
the main critical and risk areas for the business of the COMPANY, its Subsidiaries
and Associated Companies; to direct the internal audit processes, preparing
proposals for improvement and supervising their execution internally; b)the Human Resources
Management Committee: to define the performance targets for assessment of the
Executive Board; to conduct the appraisal of the Executive Board; to define the
remuneration criteria of the Executive Board, including short and long term
incentive plans; to prepare and conduct the succession plan of the Executive
Board; to coordinate the process of choice of the COMPANY's Chief Executive
Officer; to approve the officers appointed by the Chief Executive Officer of
the COMPANY to join the Executive Board; to monitor execution of the COMPANY's
human resources policies and practices, preparing proposals for improvement; c)Related Parties Committee:
to assess the process of selection of suppliers and service providers to carry
out works, for acquisition of consumables and services where the contract
amount is equal to or greater than the minimum amount in the jurisdiction of
the Board of Directors, pursuant to the COMPANY's bylaws, for contracts that
involve RELATED PARTY (PARTIES), issuing an opinion as to the best offer; to
monitor closing of new power energy sales contracts where the contract amount
is equal to or greater than the minimum amount in the jurisdiction of the Board
of Directors, pursuant to the COMPANY's bylaws, for contracts that involve
RELATED PARTY (PARTIES), ensuring that market conditions are observed; to
analyze the operation that might, in any way, result in benefit or advantage,
of any kind, to a RELATED PARTY. “8.9.5.            Any member of the Committees who
effectively or potentially has conflicts of interest with a certain matter
shall withdraw from the room and shall not participate in the meeting during
the period in which the matter is being considered, but may be invited to
provide information.” “8.9.6.            The matters analyzed by each of
the Committees shall be the subject of reports and/or proposals to the Board of
Directors.  The Report and/or Proposals forwarded to the Board ofDirectors do not bind the decision Board Members, and
such reports and/or proposals shall report any disagreements and the grounds
for such disagreements.”


---



“8.9.7.            In addition to the activities
performed by the Committees, the Board of Directors may, when necessary, set up
Work Commissions to supervise the study and conducting of matters of great
relevance for the COMPANY.” “8.9.7.1.         The Work Commissions will be
temporary, shall be established for a specific purpose and must be coordinated
by a member of the COMPANY's Board of Directors.  The other members of the Work
Commissions, the number of whom it shall be decided by the Board of Directors
at the time of setting up each Work Commission, shall be representatives of the
shareholders, and each member may invite only one additional member to assist
them in conducting the specific work.” 1.5.The
PARTIES herewith resolve to amend subclause 9.1. and add subclauses 9.1.1.,
9.1.2 and 9.4., which shall come into effect with the following wording: “9.1.   The composition, operation and resolutions of
the Board of Directors and Executive Officers of the SUBSIDIARIES shall observe
the provisions set forth in this AGREEMENT, and the statutory directors of the
COMPANY shall be elected to join the Board of Directors of the SUBSIDIARIES.” “9.1.1.            With regard, specifically, to the
Boards of Directors of Companhia Paulista de Força e Luz, Companhia Piratininga
de Força e Luz, CPFL Geração de Energia S.A. and Rio Grande Energia S.A., for
as long as these, pursuant to art. 138 §2, of Law 6.404/76 continue to be
publicly quoted corporations, they will be comprised of 3 (three) members, in
being incumbent on: a)         the COMPANY, to appoint 2 (two) members,
who should be statutory directors of the COMPANY; and b)         the employees of Companhia Paulista de
Força e Luz, Companhia Piratininga de Força e Luz, CPFL Geração de Energia S.A.
and Rio Grande Energia S.A., to appoint 1 (one) member, in accordance with the
pertinent provisions of the bylaws”. “9.4.   It is a prior condition for election as the
COMPANY representative on the Board of Directors of SUBSIDIARIES and ASSOCIATED
COMPANIES that the person appointed sign a term of concurrence with this
AGREEMENT, in which (i) he declares that he is fully aware of its content and
undertakes to fulfill it, especially in respect of the obligation of uniform
block vote as decided in the PRIOR MEETINGS.” 1.6.The
PARTIES herewith resolve to add subclauses 10.3., 10.3.1. and 10.3.2, which
shall come into effect with the following wording: “10.3. The number of members of the Audit Committee
that each PARTY is entitled to appoint shall be in accordance with the
participation of the PARTIES in the CONTROL BLOCK, it being incumbent on: a)         VBC, to appoint 2 (two) members; b)         521, to appoint 2 (two) members; c)         BONAIRE, to appoint 1 (one) member.


---



10.3.1 The number of members of the Audit
Committeethat each PARTY is entitled to appoint, pursuant to subclause
10.3 above, takes into account the current participation of the PARTIES in the
CONTROL BLOCK. In the event of amendment of the participation of any of the
PARTIES in the total BOUND SHARES, the number of Audit Committeemembers
that the PARTY in question will be entitled to appoint shall be adapted to
reflect this change, however, the number of Audit Committeemembers that
the PARTY whose relative interest in the total BOUND SHARES has not changed
shall remain unaltered. 10.3.2  If the minority shareholders, exercising the
rights granted to them under art. 161, § 4 (a) of Law 6.404/76: - elect one member of the Audit Committee, VBC, 521
and BONAIRE shall each appoint one member and VBC and 521, by mutual agreement,
shall appoint the other member; - elect two members of the Audit Committee, VBC and
521 shall each appoint one member and VBC, 521 and Bonaire, by mutual
agreement, shall appoint the other member.” 1.7.The
PARTIES herewith resolve to amend subclause 17.6., which shall come into effect
with the following wording: “17.6. All notices provided for in this AGREEMENT
shall be made in writing and deemed to have been made when transmitted by
cable, facsimile or electronic data transmission (in each case, subject to the
receipt of the appropriate receipt code or any receipt confirmation by the
receiving PARTY) or when delivered by carrier against a receipt slip or sent by
registered letter to the address of the PARTIES, as indicated below: If to VBC VBC Energia S.A. Avenida Engenheiro Luís Carlos Berrini no 1297/1307,
14o andar, conj.142 CEP 04571-010, Brooklin - São Paulo, SP Attn.: Luiz Aníbal de Lima Fernandes (Director
Superintendent) Phone: (11) 5102.7050 Fax: (11) 5505.9161 E-mail: lalfernandes@vbcenergia.com.br Attn.:  Nelson Koichi Shimada (Finance
Director) Phone: (11) 5102.7050 Fax: (11) 5505.9161 E-mail:
nelson.shimada@vpar.com.br If to 521 521 Participações S.A. Rua Senador Dantas no 105, 37o andar 20031-204 Rio de Janeiro, RJ Attn.: José Ricardo do Carmo Phone: (21) 3808-3211 Fax: (21) 3808-3193 E-mail:
521@521participacoes.com.br Caixa de Previdência dos Funcionários do Banco do
Brasil – PREVI Diretoria de Participações Praia de Botafogo no 501, 4o andar 22250-040 Rio de Janeiro, RJ


---



Phone: (21) 3870-1006 Fax: (21) 3870-1951 E-mail:
dipar@previ.com.br and gepar3@previ.com.br If to BONAIRE BONAIRE PARTICIPAÇÕES S.A. Attn.: Carlos Eduardo Reich Av. President Wilson, 231 - 11o andar CEP 20030-021, Centro - Rio de Janeiro, RJ Phone: (21) 3974-4540 Fax: (21) 3974-4501 E-mail:
carlosreich@bnymellon.com.br Attn.:President of Fundação CESP Mr. Martin Roberto Glogowsky Al. Santos, 2477 - 10o andar CEP 01419-907 - São Paulo, SP Phone: (11) 3068-3100 Fax: (11) 3068-3049 E-mail:
martin.glogowsky@funcesp.com.br Attn.:President of PETROS– Fundação Petrobrás
de Seguridade Social Mr. Wagner Pinheiro de Oliveira Rua do Ouvidor, 98 - 8o andar CEP 20040-030, Centro - Rio de Janeiro, RJ Phone: (21) 2506-0577 Fax: (21) 2506-0570 E-mail:
presidencia@petros.com.br Attn.:President of Fundação SISTEL Mr. Wilson Carlos Duarte Delfino SEPS EQ 702/902 - 1o andar CEP 70390-025 - Brasília - DF Phone: (61) 3317-7242 Fax: (61) 3317-7109 E-mail:delfino@sistel.com.br 1.
7.Considering the
amendments made to the text of the AGREEMENT, as well as those set forth in the
previous items, the PARTIES resolve to consolidate the Shareholders Agreement
of the COMPANY, which is attached to this Amendment. 2.         CONFIRMATION All
other clauses and provisions of the AGREEMENT that have not been expressly
changed by this 3rdAMENDMENT are hereby confirmed. And,
being in agreement, the PARTIES sign this 3rdAMENDMENT in 4 (four) counterparts of
equal tenor and form, in the presence of the two undersigned witnesses. São
Paulo, December 6, 2007


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VBC ENERGIA S.A. ______________________________
  Name:
  Title:
 ______________________________
  Name:
  Title:
  521 PARTICIPAÇÕES S.A. ______________________________
  Name:
  Title:
 ______________________________
  Name:
  Title:
  BONAIRE
PARTICIPAÇÕES S.A. ______________________________
  Name:
  Title:
 ______________________________
  Name:
  Title:
  CPFL ENERGIA S.A. ______________________________
  Name:
  Title:
 ______________________________
  Name:
  Title:
  Witnesses: ______________________________
  Name:
  CPF:
 ______________________________
  Name:
  CPF: