Document:

exhibit04_9.htm - Generated by SEC Publisher for SEC Filing

  

Exhibit 4.9

Execution Version

 

INVESTMENT AGREEMENT

 

 

among

 

COMPANHIA SIDERÚRGICA NACIONAL,

 

BRAZIL JAPAN IRON ORE CORPORATION,

 

POSCO,

 

CHINA STEEL CORPORATION,

 

CONGONHAS MINÉRIOS S.A., 

 

and

 

NACIONAL MINÉRIOS S.A.

 

 

Dated November 21, 2014

1

 

 

 

 

INVESTMENT AGREEMENT

INDEX

 

ARTICLE I - DEFINITIONS      4

ARTICLE II - PREPARATORY
ACTIONS TO THE MERGER..........................................  16

ARTICLE III - SPIN-OFF,
MERGER AND MERGER SALE OF SHARES . 19

ARTICLE IV - ACTIONS
BETWEEN THE DATE OF EXECUTION EFFECTIVENESS AND THE DATE OF MERGER            24

ARTICLE V - CONDITIONS
PRECEDENT TO THE MERGER AND THE MERGER SALE OF SHARES   28

ARTICLE VI - EARN OUT                                    ......................................................................  30

ARTICLE VII - REPRESENTATIONS
AND WARRANTIES
.. 31

ARTICLE VIII - INDEMNIFICATION .. 39

ARTICLE IX - APPLICABLE
LAW AND DISPUTE RESOLUTION .. 43

ARTICLE X - GENERAL       44

 

2

 

 

 

INVESTMENT AGREEMENT

This Investment Agreement (“Agreement”), dated November 21, 2014, is entered into among: 

Companhia
Siderúrgica Nacional, a publicly-held
corporation (sociedade anônima de capital aberto) incorporated,
organized and existing under the Laws of Brazil, having its registered office
at the Municipality of São Paulo, State of São Paulo, at Av. Brigadeiro Faria
Lima, 3400, 20th floor, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF)
under N. 33.042.730/0001-04, herein represented pursuant to its by-laws (“CSN”);

Brazil Japan
Iron Ore Corporation, a company duly
organized and existing under the Laws of Japan, with its head office located at
13th Floor, Itochu Bldg., 5-1, Kita-Aoyama, 2chome, Minato-ku, Tokyo, 107-0061,
Japan (“BJIOC”), POSCO, a company incorporated, organized and
existing under the Laws of Korea, having its registered office at POSCO Center,
440 Teheran-ro, Gangnam-gu, Seoul, 135-777, Korea (“POSCO”), and China
Steel Corporation, a corporation organized and existing under the Laws of
Republic of China, with head office located at 88 Chenggong, 2nd Roard,
Qianzhen, Kaohsiung 80661, Taiwan, Republic of China (“CSC”), 

(BJIOC, POSCO
and CSC are each individually referred to as “JKTC Party” and
collectively referred to as “JKTC Parties” and, jointly with CSN, as “Investors”);

Congonhas
Minérios S.A., a closely-held
corporation (sociedade anônima de capital fechado) incorporated,
organized and existing under the Laws of Brazil, having its registered office
at the Municipality of Congonhas, State of Minas Gerais, at Estrada Casa de Pedra,
without number, part, zip-code 36.415-000, enrolled with the Federal Taxpayers’
Registry (CNPJ/MF) under N. 08.902.291/0001-15, herein represented pursuant to
its by-laws (“Congonhas Minérios” or “Company”); and 

Nacional
Minérios S.A., a closely-held corporation (sociedade anônima de capital
fechado) incorporated, organized and existing under the Laws of Brazil,
having its registered office at the Municipality of Congonhas, State of Minas
Gerais, at Logradouro Casa de Pedra, without number, part, zip-code 36.415-000,
enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N.
08.446.702/0001-05, herein represented pursuant to its by-laws (“Namisa”).

(Investors,
Congonhas Minérios and Namisa are each individually referred to as “Party”
and collectively referred to as “Parties”)

WITNESSETH:

WHEREAS, BJIOC, CSC and POSCO
hold forty percent (40%) (“JKTC’s Stake in Namisa”) and CSN holds sixty percent
(60%) (“CSN’s Stake in Namisa”) of the voting and total capital stock of
Namisa, a company engaged in the mining business;

WHEREAS, Namisa holds class A
preferred shares representing ten percent (10%) of the total capital stock of
MRS Logística S.A., a publicly-held corporation (sociedade anônima de
capital aberto) incorporated, organized and existing under the Laws of
Brazil, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N.
01.417.222/0001-77 (“MRS”);

WHEREAS, CSN is the owner of (i)
the assets, rights and liabilities related to iron ore mining and logistic
activities listed in Exhibit I, including Casa de Pedra and TECAR (“CSN
Iron Ore Division”); (ii) CSN’s Stake in Namisa; (iii) common shares
representing seven point fifty nine percent (7.59%) of MRS total outstanding
capital stock and class A preferred shares representing one point zero four
percent (1.04%) of MRS total outstanding capital stock (“MRS Shares”); and
(iv) one common share of MRS bound to the MRS Shareholders’ Agreement, as defined below (“MRS Bound Share” and, together with
CSN Iron Ore Division, CSN’s Stake in Namisa and MRS Shares hereinafter jointly
referred to as “CSN Establishment”); 

3

 

 

 

WHEREAS, CSN is the owner of
ninety-nine point ninety-nine percent (99.99%) of the voting and total capital
stock of Congonhas Minérios, a non-operational subsidiary of CSN, to which CSN
intends to contribute the CSN Establishment; and

WHEREAS, JKTC Parties and CSN
share a mutual interest in consolidating the CSN Establishment and Namisa by
means of a merger of Namisa into Congonhas Minérios (“Merger”), in
accordance with the terms of this Agreement, thereby increasing the synergies,
operating capacity and competitiveness of Namisa and CSN Establishment before
the leading companies of this sector,

NOW, THEREFORE, the Investors hereto,
together with Namisa and Congonhas Minérios, hereby agree as follows:           

ARTICLE I        

DEFINITIONS

1.1     Meanings. As
used in this Agreement, the following terms shall have the meanings set forth
below:

“Additional
CSN Shares” shall have the meaning ascribed to it in Section 3.5.

“Additional
CSN Shares Price” shall have the meaning ascribed to it in Section 3.5.

“Adhesion
Term” means the document by means of which a Person adheres to the terms of
a shareholders’ agreement.

“Affiliate”
means, in relation to a Person, any Person or Persons directly or indirectly
Controlling, Controlled by, or under common Control with such Person. 

“Agreement” shall
have the meaning ascribed to it in the preamble.

“Antitrust
Approvals” shall have the meaning ascribed to it in Exhibit 5.1(iii).

“Arbitral
Tribunal” shall have the meaning
ascribed to it in Section 9.2.2.

“Authorization”
means any and all authorizations, consents, approvals, orders, resolutions,
licenses, concessions, permits, exemptions, filings, waivers, grants,
contracts, agreements, certificates, national and/or international
certifications, decrees, judicial decisions, injunctions, registries, notary
public legalizations or registries issued by any Governmental Authority.

“Best
Knowledge” shall mean, with regard to a Person, the actual knowledge of a
particular fact or matter that any individual serving as director (membro do
conselho de administração) or executive officer (diretor estatutário)
of such Person (or in any similar capacity) has, or at any time had, without
inquiry or investigation, except to the extent required to comply, during all
times while exercising their functions, with Section 153 of the Brazilian
Corporate Law. 

“BJIOC” shall
have the meaning ascribed to it in the preamble.

“BJIOC SPC”
shall be the company to be incorporated by BJIOC to receive part of BJIOC’s
shares in Namisa, as per Section 3.2(ii). Any
reference to BJIOC in this Agreement after the Merger Sale of Shares shall be
considered as a reference to BJIOC SPC. 

“Board
Approvals” shall have the meaning ascribed to it in Section 10.10.

4

 

 

  

 

“Brazil” means the Federative Republic of Brazil.

“Brazilian Civil Code” means the Law No. 10.406/2002, as amended. 

“Brazilian Corporate Law” means the Law No. 6.404/1976, as amended.

“Brazilian GAAP” means generally accepted accounting principles applicable in Brazil pursuant to which any particular financial statements of a company are prepared, as in effect as at the time such financial statements are prepared.

“Bring Down Supplements” shall have the meaning ascribed to it in Section 3.2.1.

“Business” means the exploitation of iron ore mining activities and associated port transportation infrastructure, in any part of Brazil or abroad, comprising the development of mineral deposits, research, extraction, sale of iron ore and byproducts derived from mining activities, beneficiation, industrialization, transportation (including transportation rendered by third parties), loading, rendering of mining services, import and export of iron ore, as well as the exploitation of any other directly or indirectly related activities, such as the purchase of iron ore and the participation in the corporate capital of other Brazilian and/or foreign companies with a corporate purpose compatible with the activities of the CSN Establishment.

“Business Day” means any day other than a: (a) Saturday, (b) Sunday, (c) a legal holiday (i) in the city of Tokyo, Japan, (ii) in the city of São Paulo, State of São Paulo, Brazil, (iii) in the city of New York, United Sates of America, or (iv) in the city of Seoul, South Korea (for the avoidance of doubt, Exhibit II hereto lists all such legal holidays), or (d) a day on which banking institutions in the cities of Tokyo, São Paulo, New York or Seoul are authorized by Law or order to close.

“By-laws of Congonhas Minérios” means the by-laws of Congonhas Minérios resulting from the Merger substantially in the form attached hereto as Exhibit III.

“B53 Tailing Dam” means [*]1.

“CADE” means the Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica).

“Casa de Pedra” means all of CSN’s assets, rights and liabilities listed in Exhibit I that are comprised in or related to the Casa de Pedra mine (as indicated therein), including (i) those arising from the administrative processes ongoing before the DNPM in the name of CSN under No. 043.306/1956 and No. 832.997/2002, (ii) the title to the mine manifest (Manifesto de Mina) No. 234; (iii) the rights over real property related to the exploration and exploitation of the iron ore mine and (iv) the connections to MRS railways. 

“Claim” means any action, judicial, administrative or arbitration proceeding, lawsuit, order, judicial or extrajudicial notice, assessment notice, inspections, investigation, default or violation notice, collection notice, procedure, judicial or administrative investigation, presented or brought forward against any JKTC Indemnified Party or CSN Indemnified Party. 

“Closing Balance Sheet of Congonhas Minérios” shall have the meaning ascribed to it in Section 3.7(i).

“Closing Balance Sheet of Namisa” shall have the meaning ascribed to it in Section 3.7(i).

“Closing Balance Sheets” shall have the meaning ascribed to it in Section 3.7(i).  

	 			

1Text marked as [*] denotes CONFIDENTIAL PORTION OMITTED AND FILED SEPARATELY WITH THE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT

5

 

 

 

“Closing Dividends” shall have the meaning
ascribed to it in Section 2.1(viii). 

“Closing Net Debt of
Congonhas Minérios” shall have the meaning ascribed to it in Section 3.7(ii).

“Closing Net Debt of Namisa”
shall have the meaning ascribed to it in Section 3.7(iii).

“Closing
Notice” shall have the meaning ascribed to it in Section 2.3. 

“Closing
Notice Bring Down Supplements” shall have the meaning ascribed to it in Section
2.3 (vi).

“Closing
Notice Date” shall have the meaning ascribed to it in Section 2.3. 

“Closing
Working Capital of Congonhas Minérios” shall have the meaning ascribed to
it in Section 3.7(ii).

“Closing
Working Capital of Namisa” shall have the meaning ascribed to it in Section
3.7(iii).

“Confidential Information” means the
information exchanged by the Investors in the context of the negotiation of the
Transaction Documents, the Spin-Off, the Merger and the Merger Sale of Shares,
including any data and/or information, whether written or oral, including
discoveries, ideas, secrets, and/or information of business, financial,
operational, economic, technical, and legal nature and the exchange of
correspondence.

“Congonhas
Minérios” shall have the meaning
ascribed to it in the preamble. 

“Congonhas
Minérios Excluded Assets” shall have the meaning ascribed to it in Section 2.1(i). 

“Congonhas
Minérios’ Merger AGE” shall have the meaning ascribed to it in Section 3.2(v).

“Congonhas
Minérios’ Merger Balance Sheet” shall have the meaning ascribed to it in Section
2.3(ii).

“Congonhas
Minérios Operating Cash” shall have the meaning ascribed to it in Section
5.1(xviii).

“Congonhas
Minérios’ Net Debt on the Drop Down Date” shall have the meaning ascribed
to it in Section 2.3(iii).

“Congonhas
Minérios’ Working Capital on the Drop Down Date” shall have the meaning
ascribed to it in Section 2.3(iii).

“Control” (including, with correlative meanings, the terms “Controlling,”
“Controlled” and “under common Control with”), as used with respect to any Person or
group of Persons, means the direct or indirect possession of the right to cast
the majority of the votes on the resolutions adopted by the shareholders’ or
quotaholders’ meetings and to appoint the majority of the members of the
management and the effective use of such powers to direct or cause the
direction of the management and policies of a corporation, limited liability
company, partnership, association, fund or other business entity, whether
through ownership of voting securities, by contract or otherwise.

“CSC”
shall have the meaning ascribed to it in the preamble.

“CSN”
shall have the meaning ascribed to it in the preamble.

6

 

 

 

“CSN Establishment” shall have the meaning ascribed to it in the
preamble.

“CSN
Establishment Drop-Down Valuation Report” shall have the meaning ascribed to it in Section 2.1(vii).

“CSN
Establishment Reference Valuation Report” shall have the meaning ascribed to it in Section 2.1(vi)(a).

“CSN
Indemnified Parties” and “CSN Indemnified Party” shall have the
meaning ascribed to it in Section 8.2.

“CSN Iron
Ore Division” shall have the meaning ascribed to it in the preamble.

“CSN Establishment
Pro Forma Signing Balance Sheet” shall have the meaning ascribed to it in Section
7.1(r).

“CSN
Off-Take Agreement” shall have the meaning ascribed to it in Section 2.1(xi).

“CSN’s Stake
in Namisa” shall have the meaning ascribed to it in the preamble.

“CSN
Spin-off AGE” shall have the meaning ascribed to it in Section 3.2(iv).

“DARF”
means the Federal Revenue Collection Document (Documento de Arrecadação de
Receitas Federais).

“Date of
Effectiveness” shall have the meaning ascribed to it in Section 10.10.

“Date of
Execution” means the first date written above, which is the signing date of
this Agreement.

“Date of the
Merger” shall have the meaning
ascribed to it in Section 3.1.

“Dispute”
shall have the meaning ascribed to it in Section 9.2.

“DNPM” shall have the
meaning ascribed to it in Section 4.2(viii).

“Drop Dead Date” shall have the meaning ascribed to it in Section 5.3.

“Drop-Down” shall have the
meaning ascribed to it in Section 2.1(ix).

“Drop-Down Date” shall have the meaning ascribed to it in Section 2.1(ix).

“Drop-Down
Specialized Firm”
shall have the meaning ascribed to it in Section
2.1(vii).

“Due Diligence Exercise” shall
have the meaning ascribed to it in Section 4.4.

“DVD” shall have the meaning ascribed to it in Section
7.1.1.

“Effective Equity Value at the Liquidity Event”
means the pre-money valuation at which the effective amount is raised as a
result of, and/or received as payment for the Liquidity Event, ranging between
the Minimum Equity Value and the Maximum Equity Value. 

“Enterprise Value” means
the enterprise value of Congonhas Minérios, on a debt-free, cash-free basis.

7

 

 

  

 

“Environment” means living organisms (including humans and ecological systems of which they form part) and the following media, alone or in combination: air (including that within buildings or natural or man-made structures, whether above or below ground), water (including territorial, coastal and inland waters and ground water and drains and sewers) and land (including, without limitation, sediment, sea bed or river bed under any water as described above, surface land and sub-surface land, caves and any natural structures, whether or not manipulated by man) and wildlife (including plants, animals and other biological resources) and (for the avoidance of doubt) includes any of the above that forms part of a relevant Person's own property. 

“Environmental Laws” means any applicable Law (including all statutes, codes, directives and the like and all rules, regulations, judicial and administrative orders or statutory guidance made thereunder) concerning matters arising out of or relating to the Environment, including, but not limited to, pollution, protection of the Environment or destruction of natural resources, including all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control, or cleanup of any Hazardous Substances or the mitigation of the effects thereon, each as amended or in effect prior to or at the Date of the Merger. 

“Governmental Authority” means any Brazilian or foreign government and any national, state, provincial, county, municipal, local or other governmental unit and any governmental agency, bureau, court, tribunal, commission, authority, judicial or arbitral body, as applicable, including the Brazilian governmental authorities such as CADE, the Chinese antitrust authorities and the antitrust authorities from other jurisdictions, as applicable, the Brazilian federal and state environmental authorities, real estate registries and any other public registries.

“Hazardous Substance” means any pollutants, contaminants or any toxic or otherwise hazardous materials, substances or wastes, including petroleum and petroleum-related substances, metals and semi-metals, products, by-products and wastes, asbestos, urea formaldehyde and lead-based paint, with respect to which limits or standards of conduct are imposed under any Environmental Laws.

“ICC Court” shall have the meaning ascribed to it in Section 9.2.2.

“ICC Rules” shall have the meaning ascribed to it in Section 9.2.1.

“IFRS” means the International Financial Reporting Standards, which is the set of accounting standards developed by the International Accounting Standards Board (IASB), pursuant to which any particular financial statements of a company are prepared, as in effect at the time such financial statements are prepared.

“Incremental Equity Percentage” shall be equivalent to [*] of Congonhas Minérios ́s total capital stock.

“Indebtedness” means the amount of any debt reflected on the balance sheet of a company, prepared in accordance with IFRS, including (a) all obligations of such company for money borrowed; (b) all obligations of such company evidenced by notes, debentures, bonds or other similar instruments the payment of which such company is responsible or liable for as primary obligor; (c) all payment obligations of such company, issued or assumed for deferred purchase price payments associated with acquisitions, divestitures or other similar transactions; (d) all payment obligations of such company, as applicable, under leases required to be capitalized in accordance with IFRS; (e) all payment obligations of such company for the reimbursement of any obligor on any letter of credit, banker’s acceptance, guarantees or similar credit, in each case including all accrued but unpaid interest (or interest equivalent) thereon; (f) all due and unpaid taxes and social charges included in Governmental Authorities refinancing programs; (g) 

any overdue accounts payable, of any nature, to related parties and/or third parties; (h) the amounts of any dividend or interest on equity declared but unpaid; (i) any liabilities with derivative financial instruments; and (j) any other obligation considered as a like-debt transaction according to IFRS.

8

 

 

  

 

“Indemnified Claim” shall have the meaning ascribed to it in Section 8.7(iii).

“Indemnified Party” shall have the meaning ascribed to it in Section 8.7(i).

“Indemnifying Party” shall have the meaning ascribed to it in Section 8.7(i).

“Initial Master Plan” means the Master Plan for the first five (5) years from the Date of the Merger.

“Interim Distributions” shall have the meaning ascribed to it in Section 4.3.

“Investors” means CSN and JKTC Parties, and “Investor” means each of CSN and JKTC Parties.

“IPO” means an initial public offering (Primary Offer and/or Secondary Offer) of common shares and/or preferred shares and/or of any other securities representing or backed by common shares and/or preferred shares, including units, of Congonhas Minérios or of the IPO Vehicle.

“IPO Vehicle” shall have the meaning ascribed to it in the Shareholders’ Agreement.

“Itochu Marketing Services Agreement” shall have the meaning ascribed to it in Section 3.2(xii).

“Japanese SPC” shall be a Japanese company to be incorporated by BJIOC.

“JKTC Bottom Shareholding Position” shall have the meaning ascribed to it in Section 3.4.1.

“JKTC Bottom Shareholding Position Post Merger Sale of Shares” shall have the meaning ascribed to it in Section 3.5.

“JKTC Indemnified Parties” and “JKTC Indemnified Party” shall have the meaning ascribed to it in Section 8.1.

“JKTC Liquidity Event Bottom Shareholding Position” shall have the meaning ascribed to it in Section 6.5.

“JKTC Liquidity Event Top Shareholding Position” shall have the meaning ascribed to it in Section 6.5.

“JKTC Off-Take Agreements” shall have the meaning ascribed to it in Section 3.2(xi).

“JKTC Parties” shall have the meaning ascribed to it in the preamble.

“JKTC Party” shall have the meaning ascribed to it in the preamble.

“JKTC Shareholding Position Resulting from Merger” shall have the meaning ascribed to it in Section 3.4.1.

“JKTC’s Stake in Namisa” shall have the meaning ascribed to it in the preamble.

“JKTC Top Shareholding Position” shall have the meaning ascribed to it in Section 3.4.1.

 

  

 

“JKTC Top Shareholding Position Post Merger Sale of Shares” shall have the meaning ascribed to it in Section 3.5.

“Judgment” means any judgment, order, writ, injunction, decree, arbitration award or other similar command of any Governmental Authority.

“Key Management Personnel” means those individuals having authority and responsibility for planning, directing or Controlling the activities of CSN or of an Affiliate of CSN, directly or indirectly, including any officer or director (whether executive or otherwise) of those entities.

“Law” means any foreign or domestic statute, law, ordinance, rule or regulation.

“Liabilities” means with respect to any Person, any liability or obligation of such Person, whether known or unknown, absolute, accrued, contingent, liquidated, unliquidated, due or to become due, and whether or not required to be reflected on a balance sheet prepared in accordance with the applicable accounting principles.

“Lien” means any lien (gravame), encumbrance, pledge (penhor), usufruct, security interest (any direito real de garantia including alienação fiduciária), charge, Claim, mortgage, deed of trust, option, call, warrant, purchase right, lease, priority rights, preemptive rights, rights of first refusal, purchase preference rights, commitments, rights of conversion, rights to exchange, transfer restrictions of any nature, or other agreements or commitments, of any nature, providing for the purchase, issuance, or sale of securities, voting trusts, stockholder agreements, proxies or other agreements or understandings in effect with respect to any rights attributable to securities, or any other encumbrance whatsoever.

“Liquidity Event” means the completion, within the period of [*] counted from Date of the Merger, of the Qualified IPO or the Qualified Private Sale, with the Pre-Money Equity Value of Congonhas Minérios of [*] (“Minimum Equity Value”) or greater. 

“Liquidity Event Conversion” shall have the meaning ascribed to it in Section 6.1.

“Losses” means any and all liabilities, losses, damages, fines, penalties, condemnations, costs and expenses, including reasonable attorneys' fees, court costs and other costs in connection with a Person's defense in any Claim, in each case actually incurred, including loss of profits (lucros cessantes), subject to the provisions of Section 8.5.2, but excluding moral damages (danos morais) and indirect damages (danos indiretos). 

“Master Plan” means the business plan for the operation of Congonhas Minérios, which shall necessarily include: (i) the production plan and product mix for each plant and master schedule for each plant; (ii) the engineering, procurement and construction arrangement for the plants, covering concept study, feasibility study, execution, commissioning and operation optimization, through an Engineering, Procurement and Construction Management - EPCM or similar scheme; (iii) the mechanisms for the development of a monitoring system to supervise the expansion of the Business; (iv) the Company’s organizational structure; (v) a working plan for the environmental licensing of Congonhas Minérios.

"Material Adverse Effect" shall mean any change or event, including but not limited to ordinary or extraordinary force majeure event, that is or will be, as determined at the time such change or event occurs, materially adverse to the financial, tax or accounting condition or results of operations of the Business of Namisa, Congonhas Minérios, their Subsidiaries and/or of the CSN Iron Ore Division, taken as a whole, other than any change or event relating to or arising out of: (i) general economic conditions (including changes or events in the financial, banking, currency and capital markets) in Brazil; (ii) conditions generally affecting the industries in which Congonhas Minérios, Namisa, their Subsidiaries and/or CSN Iron Ore Division operate; 

(iii) changes in applicable Law or in IFRS; or (iv) any actions taken, or failures to take action, or such other changes or events, in each case, to which JKTC Parties and/or CSN, as applicable, have expressly consented.

 

  

 

“Material Contracts” shall have the meaning ascribed to it in Section 7.1(l).

“Maximum Equity Value” shall have the meaning ascribed to it in Section 6.3.

“Merger” shall have the meaning ascribed to it in the preamble.

“Merger Bring Down Supplements” shall have the meaning ascribed to it in Section 3.2.1.

“Merger Prior Approvals” shall have the meaning ascribed to it in Section 5.1(iii).

“Merger Sale of Shares” shall have the meaning ascribed to it in Section 3.2(viii).

“Minimum Equity Value” shall have the meaning ascribed to it in the “Liquidity Event” definition.

“Mining Rights” shall have the meaning ascribed to it in Section 7.1(k).

“MRS” shall have the meaning ascribed to it in the preamble.

“MRS Bound Share” shall have the meaning ascribed to it in the preamble.

“MRS Shares” shall have the meaning ascribed to it in the preamble.

“MRS Transportation Agreement” means the Contrato de Prestação de Serviço de Transporte Ferroviário de Carga entered into by and among CSN, the Company, Nacional Minérios S.A. and MRS on January 1, 2011.

“Namisa” shall have the meaning ascribed to it in the preamble.

“Namisa’s AGE” shall have the meaning ascribed to it in Section 3.2(vi).

“Namisa Capital Reduction” shall have the meaning ascribed to it in Section 2.1(iv).

“Namisa Excluded Assets” means all assets, rights and liabilities that are comprised in or related to the [*], including (i) those arising from the administrative processes ongoing before the DNPM under [*] ([*]), [*] ([*]) and [*] ([*]), (ii) any rights over real property which location coincides with the area covered by each of the DNPM processes related to the [*], provided that such real properties are not required for the operations of the remainder assets of Namisa and (iii) any plant and equipment exclusively dedicated to the [*]. 

“Namisa’s Merger Balance Sheet” shall have the meaning ascribed to it in Section 2.3(ii).

“Namisa Merger Valuation Report” shall have the meaning ascribed to it in Section 2.1(xiii).

“Namisa Reference Balance Sheet” shall have the meaning ascribed to it in Section 2.1(vi)(b).

“Namisa’s Spin-Off AGE” shall have the meaning ascribed to it in Section 3.2(iii).

“Namisa’s Net Debt on the Drop Down Date” shall have the meaning ascribed to it in Section 2.3(iv).

11

 

 

  

 

“Namisa’s Working Capital on the Drop Down Date” shall have the meaning ascribed to it in Section 2.3(iv).

“Net Closing Working Capital Cash Adjustment” shall have the meaning ascribed to it in Section 3.7.1.

“Net Closing Net Debt Cash Adjustment” shall have the meaning ascribed to it in Section 3.7.2.

“Net Debt” means, without duplication (i) Indebtedness minus (ii) cash, cash equivalents and any assets with derivative financial instruments reflected on the same balance sheet of the relevant company.

“Off-Take Agreements” shall have the meaning ascribed to it in Section 3.2(xi).

“Operating Budget” means the operating budget of Congonhas Minérios, based on the Master Plan, which shall necessarily contemplate (i) Congonhas Minérios’s basic goals, projected revenues, expenses, working capital, capital expenditures, financing plans, operating cash flows, in each case with projections for not less than the next three (3) succeeding fiscal years; (ii) strategic alliances expressly set forth in the Master Plan; and (iii) operating projections of Congonhas Minérios for not less than the next three (3) succeeding fiscal years.

“Parties” and “Party” shall have the meaning ascribed to it in the preamble.

“Person” means an individual, corporation (including a Brazilian sociedade anônima), limited liability company (including a Brazilian sociedade limitada), partnership, association (whether incorporated or not), investment fund, trust or other entity or organization (whether or not Brazilian), including any type of Brazilian sociedade empresária and sociedade simples or any other entity regulated by Articles 40 through 69 of the Brazilian Civil Code.

“Port Services Agreement” shall have the meaning ascribed to it in Section 2.1(xii). 

“POSCO” shall have the meaning ascribed to it in the preamble.

 “Pre-Merger Equity Interest Adjustment” shall have the meaning ascribed to it in Section 3.4.1.

“Pre-Money Equity Value – Subscription Bonus” shall have the meaning ascribed to it in Section 2.1(ix).

“Pre-Money Valuation” shall have the meaning ascribed to it in Section 6.2.

“Preparatory Actions to the Merger” shall have the meaning ascribed to it in Section 2.1.

“Primary Offer” means any public offering of new shares to be issued by Congonhas Minérios or by the IPO Vehicle, in the context of a Qualified IPO.

“Primary Tranche” means any issuance of new shares by Congonhas Minérios or by the IPO Vehicle, in the context of a Qualified Private Sale.

“Protocol of Merger” shall have the meaning ascribed to it in Section 2.1(xiv).

“Protocol of the Spin-Off” shall have the meaning ascribed to it in Section 2.1(xiv).

“Provisional Decision” shall have the meaning ascribed to it in Section 8.4.

“PTAX” means the PTAX rate, expressed as the amount of one Brazilian Real per one US Dollar, published by the Central Bank of Brazil in its website.

12

 

 

  

 

“P7 Water Supply” means the [*].

“P9 Water Supply” means the [*]. 

“P28 Beneficiation Plant” means the project for the implementation of a beneficiation plant of high silica run-of-mine (ROM), with capacity for production of twenty-eight million (28,000,000.00) ton per year of pellet feed.

“P28 Loading Terminal” means the railway terminal set forth in the conceptual study for P28 Beneficiation Plant, as a possible alternative in case of lack of capacity of the existing stock yard and loading system of Casa de Pedra.

“Qualified IPO” means an IPO that meets all of the following conditions: (i) minimum size equivalent to [*]of the shares outstanding immediately prior to the IPO; (ii) minimum Primary Offer amounting to [*], with a Secondary Offer permitted on top of the Primary Offer; and (iii) broad distribution involving at least fifty (50) institutional investors not related to CSN.

“Qualified Private Sale” means a transfer of the preemptive rights of CSN in the subscription of shares issued by Congonhas Minérios or of the IPO Vehicle (if such sale occurs after the IPO of the IPO Vehicle), not involving a public offering and not subject to registration before a Governmental Authority in charge of securities regulation, to a Person which is not a Related Party to CSN, in accordance with the following conditions: (i) minimum size equivalent to [*]of the shares outstanding immediately prior to the Qualified Private Sale; and (ii) a minimum Primary Tranche amounting to [*] to be paid in cash (“Cash Payment”) or in shares of a publicly traded company with an average daily trading volume in the last [*] prior to the transaction of at least [*] (“Share Payment”), provided that, in the Share Payment, the price per share for purposes of the calculation of the value of the shares being contributed to Congonhas Minérios or to the IPO Vehicle shall be based on the average of the last [*] trading day’s price negotiated in the stock market prior to the subscription of the Congonhas Minérios shares or of the IPO Vehicle shares, as the case may be. The Cash Payment shall be made within a maximum period of [*] counted from the subscription of the Congonhas Minérios shares or of the IPO Vehicle shares and the Share Payment shall always be made upon the subscription of Congonhas Minérios shares or the IPO vehicle shares. A Secondary Tranche is permitted on top of the Primary Tranche.

“Real Estate” shall have the meaning ascribed to it in Section 7.1(k).

“Reference Date” shall have the meaning ascribed to it in Section 2.1(vi)(a).

“Reference Working Capital of CSN Iron Ore Division” shall have the meaning ascribed to it in Section 2.1(vi)(c).

“Reference Working Capital of Namisa” shall have the meaning ascribed to it in Section 2.1(vi)(d).

“Related Party” of any specified Person shall have the meaning set forth in the Deliberation No. 642 of October 7, 2010 issued by the Brazilian Securities and Exchange Commission (Comissão de Valores Mobiliários – CVM), and shall also include (i) any Affiliate of such Person, (ii) any officer, director, quotaholder, shareholder, employee or administrator of such Person or of an Affiliate of such Person, (iii) any spouse, ex-spouse, ascendant, descendant or collateral relative up to second degree of such Person or of any of the foregoing.

13

 

 

  

 

“Related Party to CSN” means: (i) an Affiliate of CSN; (ii) Mrs. [*]or any of her descendents and their respective spouses or any Person Controlled by such individuals; (iii) Ms. [*], the Estate of [*]or any of their descendents and their respective spouses or any Person Controlled by such individuals; or (iv) any Key Management Personnel of CSN or of an Affiliate of CSN or any Person Controlled by such individuals. 

“Representative” means, with respect to any Person, any executive officer (diretor estatutário), director (membro do conselho de administração), principal, attorney, employee, agent, consultant, accountant or other representative of such Person.

“Sale Percentage” shall have the meaning ascribed to it in Section 3.2(viii).

“Secondary Offer” means any public offering of existing shares issued by Congonhas Minérios or by the IPO Vehicle and owned by a selling shareholder in the context of a Qualified IPO.

“Secondary Tranche” means the sale of any existing shares of Congonhas Minérios or of the IPO Vehicle (if such sale occurs after an IPO of the IPO Vehicle) owned by a selling shareholder in the context of a Qualified Private Sale.

“Shareholders’ Agreement” means the Shareholders’ Agreement to be entered into as of the Date of the Merger by and among CSN, JKTC Parties and Congonhas Minérios to set up the procedures and rules that shall govern the Investor ́s relationship as shareholders of Congonhas Minérios, substantially in the form attached hereto as Exhibit IV.

“Special Dividends” shall have the meaning ascribed to it in Section 4.3.

“Specialized Firms” shall have the meaning ascribed to it in Section 2.1(vi)(a).

“Spin-Off” shall have the meaning ascribed to it in Section 2.1(xiii).

“Spin-Off Valuation Report” shall have the meaning ascribed to it in Section 2.1(xiii).

“Standstill Agreement” means the Standstill Agreement entered into among the Investors and Namisa on [*], as amended.

“Standstill Period” shall have the meaning ascribed to it in the Standstill Agreement.

“Subsidiary” means, when used with respect to any Person, any other Person directly or indirectly Controlled by such Person. The term "Subsidiary" shall (i) include all Subsidiaries of such Subsidiary; and (ii) exclude MRS, except where expressly indicated.

“Tax Claim” means any Claim concerning matters related to Taxes. 

“Taxes” means, pursuant to any Law, (i) any and all taxes, including any interest, penalties or other additions to tax that may become payable in respect thereof or on behalf of third parties (including obligations resulting from acting as a retention agent, intermediary, etc.), due to any Governmental Authority, which shall include, without limiting the generality of the foregoing, all income tax (including income tax required to be deducted or withheld from or accounted for in respect of any payment), corporation tax, such tax taken to include surtax, capital gains tax, tax on profits, tax on gross receipts, withholding tax, payroll and employee withholding taxes, unemployment insurance taxes, social security taxes, severance taxes, license charges or taxes, taxes on stock, sales and use taxes, ad valorem taxes, value added tax, custom duties, excise taxes and duties, franchise taxes, business license taxes, occupation taxes, real and personal property taxes, stamp taxes, environmental taxes, transfer taxes, workers' compensation, customs, tariffs, social security and retirement fund contributions, imposts, fees, duties, 

assessments, withholdings or charges of any kind (including, for example, ITR, IRPJ, CSL, PIS, COFINS, ISS, CFEM, INSS and FGTS) and other obligations of the same or of a similar nature to any of the foregoing and (ii) any Liability for the payment of any amount of a type described in item (i) above as a result of any Law in relation to any other Person.

14

 

 

  

 

“Tax Return” means any and all returns, reports, declarations, statements, bills, schedules, claims for refund or written information of or with respect to any Tax which is required to be supplied to any taxing authority, including any schedule or attachment thereto, and including any amendment thereof.

“TECAR” means the rights related to the port installations of the terminal for solid bulk cargoes, as well as the related equipment and facilities, located in the Itaguaí Port, in the city of Itaguai, state of Rio de Janeiro, pursuant to the TECAR Lease Agreement. 

“TECAR Lease Agreement” means Lease Agreement No. C-DEP JUR 054/97 (bound to the Public Bid Order No. CI-003/96), as amended. 

“Transaction Documents” means this Agreement, the Transitional Agreement, the Standstill Agreement, the Shareholders Agreement, the By-laws of Congonhas Minérios, the Off-Take Agreements, the Itochu Marketing Services Agreement and any other contracts, instruments, documents, and/or corporate acts entered into for the purposes of the implementation of the Spin-Off, the Merger and the Merger Sale of Shares.

“Transferred Employees” shall have the meaning set forth under Section 2.1(x).

“Transitional Agreement” means the Transitional Agreement entered into on the present date among the Investors, Congonhas Minérios and Namisa, which draft is attached hereto as Exhibit V.

“Working Capital” means the amount equal to all current assets minus all current liabilities (excluding all transactions, accounts and balances included in the Net Debt calculation) of a company, determined in accordance with IFRS, and calculated pursuant to the method described in Exhibit VI.

“Δ Closing Net Debt of Congonhas Minérios” shall have the meaning ascribed to it in Section 3.7.2.

 “Δ Closing Net Debt of Namisa” shall have the meaning ascribed to it in Section 3.7.2.

“Δ Closing Working Capital of Congonhas Minérios” shall have the meaning ascribed to it in Section 3.7.1.

“Δ Closing Working Capital of Namisa” shall have the meaning ascribed to it in Section 3.7.1.

1.2          Terms Generally. The definitions in this ARTICLE I shall apply equally to both the singular and plural forms of the terms defined. Unless the context otherwise requires, any reference to any contract or Law includes any amendments thereto from time to time (and, in the case of a statute or regulation, to any successor provision). Any reference in this Agreement to a “day” or a number of “days” (without the explicit qualifications of “business”) shall be interpreted as a reference to a calendar day or number of calendar days. If any action or notice is to be taken or given on or by a particular calendar day, and such calendar day is not a Business Day, then such action or notice shall be deferred until, or may be taken or given on, the next Business Day. The terms “include”, “including” and similar ones shall be construed as if they were followed by the term “for example purposes”. All references to R$ refer to Brazilian real and all references to USD refer to United States dollars. 

15

 

 

  

 

ARTICLE II       
PREPARATORY ACTIONS TO THE MERGER

2.1     Preparatory Actions to the Merger. CSN and Congonhas Minérios, on one side, and JKTC Parties, on the other side, shall take the following acts and/or actions between the Date of Execution and the Date of the Merger (the “Preparatory Actions to the Merger”): 

(i)     The assets of Congonhas Minérios listed in Exhibit 2.1(i) (“Congonhas Minérios Excluded Assets”) shall be transferred to CSN or to an Affiliate of CSN (at CSN ́s sole discretion) before the Drop-Down Date, through a spin-off of such assets, a capital reduction or redemption of shares; 

(ii)   Investors, Namisa, Congonhas Minérios and the other parties thereto shall enter into the Transitional Agreement simultaneously to the execution of this Agreement;

(iii) The Standstill Agreement shall be amended, simultaneously to the execution of this Agreement, in order to extend the Standstill Period to (a) [*], in case the Board Approvals are not obtained; or (b) the [*]; 

(iv) On the Date of Effectiveness, the shareholders of Namisa shall approve a capital reduction in the amount equivalent in Reais to three hundred million US Dollars (USD300,000,000.00), in accordance with the terms set forth in Exhibit 2.1(iv) (“Namisa Capital Reduction”); 

(v)   BJIOC shall incorporate BJIOC SPC;

(vi) within [*] days from the Date of Effectiveness, CSN shall deliver to JKTC Parties:

(a)    a valuation report of the CSN Establishment (laudo de avaliação) attesting the book value of the CSN Establishment on September 30, 2014 (“Reference Date”), to be prepared by one of the specialized firms listed in Exhibit 2.1(vi)(a) (“Specialized Firms”), based on CSN’s balance sheet as of such date (“CSN Establishment Reference Valuation Report”); 

(b)   Namisa’s balance sheet as of the Reference Date (“Namisa Reference Balance Sheet”); 

(c)    the Working Capital of the CSN Iron Ore Division as of the Reference Date, in Reais, together with the relevant underlying calculations and figures in the form set forth in Schedule 2.1(vi)(c) and confirmed by the Specialized Firm that has prepared the CSN Establishment Reference Valuation Report (“Reference Working Capital of CSN Iron Ore Division”); and

(d)   the Working Capital of Namisa as of the Reference Date, in Reais, together with the relevant underlying calculations and figures in the form set forth in Schedule 2.1(iv)(c) and confirmed by the Specialized Firm that has prepared the CSN Establishment Reference Valuation Report (“Reference Working Capital of Namisa”); 

(vii)    within [*] days from the date the last of the Conditions Precedent (other than the Drop-Down and the definition of the JKTC Shareholding Position 

Resulting from Merger) has been fulfilled, CSN shall indicate one of the Specialized Firms (preferably the same Specialized Firm hired for the preparation of the CSN Establishment Reference Valuation Report) (“Drop Down Specialized Firm”) to be hired by Congonhas Minérios to prepare the valuation report (laudo de avaliação) of the CSN Establishment, at book value, based on the balance sheet of CSN as of the Drop Down Date, for purposes of the Drop-Down (“CSN Establishment Drop-Down Valuation Report”);

16

 

 

  

 

(viii)  immediately before the Drop-Down takes place, the amount equivalent in Reais to the difference between (a) the cash and cash equivalents of Namisa on the Drop Down Date (which shall not be less than [*]), and (b) all amounts paid by Namisa to Namisa’s shareholders under the form of dividends or capital reduction from the Date of Effectiveness, shall be declared as dividends (subject to Section 2.1.1), and paid as follows (1) the amount equivalent to the Congonhas Minérios Operating Cash shall be paid within one year from the Date of the Merger and (2) the balance shall be paid on the Date of the Merger (all subject to the occurrence of the Merger) (“Closing Dividends”); 

(ix) on the last day of the month immediately following the month in which the Drop Down Specialized Firm has been hired in accordance with item (vii) above (“Drop-Down Date”), CSN shall cause a capital increase in Congonhas Minérios, whereby CSN shall contribute to Congonhas Minérios the CSN Establishment, together with the business activities conducted therein and connected thereto (“Drop-Down”). The shareholders’ meetings reflecting the Drop-Down shall also approve the issuance of a subscription bonus by Congonhas Minérios, substantially in the terms of Schedule 2.1(ix), in favor of CSN, for a subscription price of ten thousand Brazilian reais (R$10,000.00), to ensure that, upon the occurrence of a Liquidity Event, CSN will be able to receive from Congonhas Minérios the number of shares resulting from the Earn-Out set forth in ARTICLE VI (“Pre-Money Equity Value – Subscription Bonus”). The minutes of such shareholders’ meeting and the other relevant documents required by Law shall be taken to registration before the competent Board of Trade and published as soon as possible after their execution; 

(x)   on the Drop-Down Date, the CSN employees that work in the CSN Iron Ore Division shall be transferred to Congonhas Minérios, in accordance with the procedures described in Exhibit 2.1(x) (“Transferred Employees”); 

(xi) on the Drop-Down Date, CSN and Congonhas Minérios shall enter into an off-take agreement under the terms and conditions set forth in Exhibit 2.1(xi) (“CSN Off-Take Agreement”); 

(xii)    on the Drop-Down Date, CSN and Congonhas Minérios shall enter into a port services agreement under the terms and conditions set forth in Exhibit 2.1(xii) (“Port Services Agreement”);

(xiii)  within [*] days from the Drop-Down Date, the Drop-Down Specialized Firm shall prepare (a) the valuation report (laudo de avaliação) of the Namisa Excluded Assets (“Spin-Off Valuation Report”), at book value, for purposes of the disproportionate spin-off of the Namisa Excluded Assets from Namisa and the subsequent merger of such assets into CSN or an Affiliate of CSN, whereby only CSN will receive the Namisa Excluded Assets (“Spin-Off”), based on the balance sheet of Namisa dated as of the Drop Down Date; and (b) the valuation report (laudo de avaliação) of Namisa, at book value, for purposes of the Merger and of the calculation of the Pre-Merger Equity Interest Adjustment (“Namisa’s 

Merger Valuation Report”), based on the balance sheet of Namisa dated as of the Drop Down Date (“Namisa ́s Merger Balance Sheet”), projecting the Spin-Off effects as subsequent event; and

17

 

 

  

 

(xiv)  the Pre-Merger Equity Adjustment shall be finalized in accordance with Section 3.4.1 and the management of each of Congonhas Minérios, Namisa and CSN (or its Affiliate) shall enter into (a) the protocol and justification of the Spin-Off (“Protocol of the Spin-Off”) and (b) the protocol and justification of the Merger (“Protocol of Merger”).

2.1.1        The Investors agree that in case of shortage of profits or reserves for the declaration of the Closing Dividends provided for in Section 2.1(viii)(b)(2), the amount that Namisa was not able to declare as dividends shall be distributed to the relevant shareholders as capital reduction.

2.1.2        Upon the Drop Down, CSN and Congonhas Minérios shall require to the competent judicial authorities, in relation to the Claims identified in Exhibit I (i) the inclusion of Congonhas Minérios and the exclusion of CSN as defendant, in which case the defense of such Claims will be conducted by Congonhas Minérios, which shall also pay directly any Losses arising therefrom; or, if this is not possible (ii) the inclusion of Congonhas Minérios as co-defendant or assistant (“assistente”), in which case the defense of such Claims will be controlled by Congonhas Minérios, on behalf of CSN, and Congonhas Minérios shall pay directly any Losses arising therefrom. In case such substitution or inclusion is not possible for any reason, CSN shall continue to conduct such Claims and Section 8.3 shall apply. 

2.1.3        Upon the transfer of the Congonhas Minérios Excluded Assets to CSN or its Affiliate, CSN or its Affiliate, as applicable, and Congonhas Minérios shall require to the competent judicial authorities, in relation to the Claims related to Congonhas Minérios Excluded Assets, if any, (i) the inclusion of CSN or its Affiliate, as applicable and the exclusion of Congonhas Minérios as defendant, in which case the defense of such Claims will be conducted by CSN or its Affiliate, as applicable, which shall also pay directly any Losses arising therefrom; or, if this is not possible (ii) the inclusion of CSN or its Affiliate, as applicable, as co-defendant or assistant (“assistente”), in which case the defense of such Claims will be controlled by CSN or its Affiliate, as applicable, on behalf of Congonhas Minérios, and CSN or its Affiliate, as applicable, shall pay directly any Losses arising therefrom. In case such substitution or inclusion is not possible for any reason, Congonhas Minérios shall continue to conduct such Claims and Section 8.1(iv) shall apply. 

2.2     Cooperation. The Investors, Namisa and Congonhas Minérios shall cooperate with each other and make any additional information available, as may be required, on a reasonable basis, by the requesting party, for the perfect completion of the Preparatory Actions to the Merger, the Spin-Off, the Merger and the Merger Sale of Shares, as quickly as possible. 

2.3     Closing Notice. Within [*] days from the Drop-Down Date (“Closing Notice Date”), CSN shall send a notice to JKTC Parties (the “Closing Notice”) informing that all the Conditions Precedent have been or are expected to be satisfied at the Date of the Merger, together with:

(i) the Namisa Merger Valuation Report;

(ii)   the balance sheet of Namisa as of the Drop Down Date (“Namisa’s Merger Balance Sheet”) and the balance sheet of Congonhas Minérios as of the Drop Down Date (after giving effect to the Drop Down) (“Congonhas Minérios’ Merger Balance Sheet”);

(iii) (a) the Working Capital of Congonhas Minérios on the Drop Down Date, in Reais (“Congonhas Minérios’ Working Capital on the Drop Down Date”); and (b) the Net Debt of Congonhas Minérios on the Drop Down Date, in Reais (“Congonhas 

Minérios’ Net Debt on the Drop Down Date”), with the relevant underlying calculations and figures in the form set forth in Schedule 2.3(iii) both confirmed by the Drop Down Specialized Firm;

18

 

 

  

 

(iv) (a) the Working Capital of Namisa on the Drop Down Date, in Reais (“Namisa’s Working Capital on the Drop Down Date”); and (b) the Net Debt of Namisa on the Drop Down Date, in Reais (“Namisa’s Net Debt on the Drop Down Date”), with the relevant underlying calculations and figures in the form set forth in Schedule 2.3(iv) both confirmed by the Drop Down Specialized Firm;

(v)   Exhibit I updated as of the Drop Down Date to reflect events, changes, circumstances, developments, effects or state of facts occurred between the Reference Date and the Drop-Down Date, subject to Section 4.2, which shall be deemed modified for all purposes of this Agreement, so that any references herein to Exhibit I shall be understood as references to its updated version; 

(vi) Supplements to Exhibit(s) and Schedule(s) to Section 7.1 to reflect the representations and warranties as of the Closing Notice Date, as applicable, specifying the changes thereto, subject to Section 10.8 (“Closing Notice Bring Down Supplements”); and

(vii)                   The list of Transferred Employees and the names of the Directors and Officers of the Company to be appointed by CSN (or by the Directors appointed by CSN) on the Date of the Merger.

ARTICLE III   
SPIN-OFF, MERGER AND MERGER SALE OF SHARES

3.1     Spin-Off, Merger and Merger Sale of Shares. Within [*] days from receipt of the Closing Notice by JKTC Parties (“Date of the Merger”), which, in any event, shall not take place later than the [*] days from the Drop-Down Date, CSN, on one side, and CSN and JKTC Parties, on the other side, shall implement the Spin-Off, the Merger and the Merger Sale of Shares in accordance with this ARTICLE III. The Investors shall use their best efforts to cause the Spin-Off, the Merger and the Merger Sale of Shares to occur as soon as possible after the Date of Effectiveness, but no later than the Drop Dead Date. 

3.2     Actions and Procedures on the Date of the Merger. Subject to the terms and conditions of this Agreement, the Investors shall take the following actions on the Date of the Merger: 

(i) Namisa shall pay the portion of the Closing Dividends set forth in Section 2.1(viii);

(ii)   BJIOC shall contribute part of its shares in Namisa to BJIOC SPC;

(iii) CSN and JKTC Parties shall hold an extraordinary shareholders' meeting of Namisa to deliberate on: (a) the ratification of the name of the Drop-Down Specialized Firm that has prepared the Spin-Off Valuation Report, as referred to in Section 2.1(xiii) above; (b) the Spin-Off Valuation Report; (c) the Protocol of Spin-Off and (d) the Spin-Off and the consequent capital reduction of Namisa ́s corporate capital with the cancellation of part of the shares of Namisa owned by CSN (“Namisa’s Spin-Off AGE”); 

(iv) an extraordinary shareholders' meeting of CSN (or its Affiliate) shall be held to deliberate on: (a) the ratification of the name of the Drop-Down Specialized Firm; (b) Spin-Off Valuation Report; (c) the Protocol of Spin-Off; and (d) the Spin-Off and the consequent capital increase of CSN or its Affiliate (if applicable), provided that no 

new share of CSN or its Affiliate, as the case may be, will be issued or delivered to JKTC Parties as a result of the Spin-Off (“CSN Spin-Off AGE”);

19

 

 

  

 

(v)   immediately after the Namisa’s Spin-Off AGE and the CSN Spin-Off AGE, CSN shall hold an extraordinary shareholders' meeting of Congonhas Minérios to deliberate on: (a) the ratification of the name of the Drop-Down Specialized Firm; (b) Namisa’s Merger Valuation Report; (c) the Protocol of Merger; (d) the Merger and the consequent capital increase of Congonhas Minérios with the issuance of new shares of Congonhas Minérios, so that, as a result of the Merger, the participation of JKTC Parties and CSN in Congonhas Minérios reflects the Pre-Merger Equity Interest Adjustment; (e) the amendment of the By-laws of Congonhas Minérios, substantially in the form attached hereto in Exhibit III; and (f) the appointment of the new members of the Board of Directors of Congonhas Minérios, in accordance with the provisions of the Shareholders’ Agreement (“Congonhas Minérios’ Merger AGE”);

(vi) an extraordinary shareholders' meeting of Namisa shall be held to deliberate on the Protocol of Merger and on the Merger (“Namisa’s AGE”); 

(vii)                   immediately after the Congonhas Minérios’s Merger AGE and the Namisa’s AGE, the management of Congonhas Minérios and of CSN (or its Affiliate), as applicable, shall cause all acts, instruments and/or documents necessary for the consummation of the Spin-Off and of the Merger to be signed or to be entered into;

(viii)                 immediately after the Congonhas Minérios’s Merger AGE and the Namisa’s AGE, the JKTC Parties shall sell to CSN, in the proportion indicated in Schedule 3.2(viii) and CSN shall buy from JKTC Parties: (a) common shares representing [*] of Congonhas Minérios’s capital stock (“Sale Percentage”), based on an equity value of Congonhas Minérios of [*] and (b) the equivalent to the Incremental Equity Percentage, for [*], net of Brazilian Taxes (“Merger Sale of Shares”), in accordance with Section 3.5. For the avoidance of doubt, no representations and warranties will be provided in the context of the Merger Sale of Shares;

(ix) CSN shall make the payments for the Merger Sale of Shares to the JKTC Parties, subject to Sections 3.6, 3.6.1 and 3.6.2;

(x)        the Parties shall enter into the Shareholders' Agreement;

(xi)  Congonhas Minérios and each of POSCO, CSC, JFE Steel Corporation, Kobe Steel, Ltd. and Nisshin Steel Co., Ltd. shall enter into off-take agreements under the terms set forth in Exhibit 3.2(xi) (“JKTC Off-Take Agreements” and, together with the CSN Off-Take Agreement, the “Off-Take Agreements”);

(xii)                   Itochu Corporation and Congonhas Minérios shall enter into a marketing consulting agreement under the terms set forth in Exhibit 3.2(xii) (“Itochu Marketing Services Agreement”); and

(xiii)                 the Parties shall enter into any other documents necessary for the implementation of the Spin-Off, the Merger, the Merger Sale of Shares in accordance with the terms of this Agreement.

3.2.1        Between the Closing Notice Date and the Date of the Merger, CSN may deliver to JKTC Parties additional supplements to Exhibit(s) and Schedule(s) to Section 7.1, to reflect changes to the representations and warranties as of the Date of the Merger, specifying such changes, subject to Section 10.8 (“Merger Bring Down Supplements” and, together with the Closing Notice Bring Down Supplements, the “Bring Down Supplements”).

 

20

 

 

  

 

3.3     Concurrent Actions for the Merger. All acts and obligations indicated in Section 3.2 shall be considered to happen concurrently. No act and/or obligation shall be considered effectively taken or satisfied until all other acts and/or obligations set forth in Section 3.2 have been taken or satisfied, except if the Investors agree otherwise, in writing.

3.4     Preliminary Shareholding Ratio. The Investors have agreed that the Enterprise Value of Congonhas Minérios is [*]. Based on such Enterprise Value, before any adjustment to be made pursuant to Section 3.4.1 and before the Merger Sale of Shares: (i) CSN shall hold common shares representing [*] of Congonhas Minérios ́s total capital stock and (ii) JKTC Parties shall hold common shares representing [*] of Congonhas Minérios total capital stock (considering the effects of the Spin-Off). 

3.4.1        The percentage of the capital stock of Congonhas Minérios to which each Investor shall be entitled to as a result of the Merger shall be adjusted before the Date of the Merger in accordance with this Section 3.4.1 and shall differ from and prevail over the preliminary shareholding ratio informed in Section 3.4 above (“Pre-Merger Equity Interest Adjustment”). For purposes of the Pre-Merger Equity Interest Adjustment, JKTC Parties shareholding position resulting from the Merger (“JKTC Shareholding Position Resulting from Merger”) shall be calculated according to the formula set forth below:

JKTC Top Shareholding Position = ([*]) (“JKTC Top Shareholding Position”).

Where Δ Working Capital of Namisa = [*]

JKTC Bottom Shareholding Position = ([*] (“JKTC Bottom Shareholding Position”)

JKTC Shareholding Position Resulting from Merger (considering the effects of the Spin-Off) = JKTC Top Shareholding Position. 

Illustrative calculations of JKTC Top Shareholding Position, JKTC Bottom Shareholding Position and JKTC Shareholding Position Resulting from the Spin-Off are available in Exhibit 3.4.1.

3.5     JKTC Post Merger Sale of Shares. Immediately after the Merger, CSN shall acquire from JKTC Parties, in the proportion indicated in Schedule 3.2(viii), (i) the Congonhas Minérios’s common shares representing the Sale Percentage (“Additional CSN Shares”) and (ii) Congonhas Minérios’s common shares representing the Incremental Equity Percentage. The price to be paid by CSN for the common shares representing the Incremental Equity Percentage shall be [*], to be paid in accordance with Sections 3.6, 3.6.1 and 3.6.2. JKTC Parties’ shareholding position in Congonhas Minérios’s immediately after the Merger Sale of Shares (“JKTC Top Shareholding Position Post Merger Sale of Shares”) and the price to be paid by CSN to JKTC Parties for the Additional CSN Shares (“Additional CSN Shares Price”) shall be calculated as follows:

JKTC Top Shareholding Position Post Merger Sale of Shares = JKTC Shareholding Position Resulting from Merger – (Sale Percentage + Incremental Equity Percentage).

JKTC Bottom Shareholding Position Post Merger Sale of Shares = [*] (“JKTC Bottom Shareholding Position Post Merger Sale of Shares”).

Additional CSN Shares Price = [*] * Sale Percentage

3.5.1        JKTC Parties’ shareholding ratio may be diluted linearly between the JKTC Top Shareholding Position Post Merger Sale of Shares and JKTC Bottom Shareholding Position Post Merger Sale of Shares as a result of a Liquidity Event Conversion, as explained in ARTICLE VI. 

 

21

 

 

  

 

3.6     Taxes. Except as otherwise provided in this Agreement (including in Sections 3.6.1 and 3.6.2), all Taxes arising from or in connection with the Drop Down, the Spin-Off, the Merger and the Merger Sale of Shares shall be borne by the party which is the taxpayer for the relevant taxable event.

3.6.1        JKTC Parties shall bear any Taxes, including, but not limited to, income tax on capital gains and IOF, whether under the Laws of Brazil or abroad arising from the sale of the Sale Percentage to CSN. CSN shall bear the income tax imposed on capital gains under the Laws of Brazil arising from the sale of the Incremental Equity Percentage to CSN and IOF imposed on the remittance of the proceeds for the acquisition of the Incremental Equity Percentage, provided that any Taxes under Laws of any other jurisdiction shall be borne by the relevant JKTC Party.

3.6.2        Pursuant to the applicable Brazilian Laws, CSN shall deduct and withhold the income tax levied on the remittance of the price to be paid for the Sale Percentage and for the Incremental Equity Percentage to JKTC Parties, if any, based on a calculation of such tax withholding in accordance with the Law. CSN shall also deduct the IOF levied on the remittance of the price to be paid for the Sale Percentage. JKTC Parties agree to provide CSN, at least 2 (two) days in advance of the Date of Merger, with a notice containing the assessment of the taxable capital gain and the tax to be withheld, as well as any information and documentation necessary to complete the DARF corresponding to the withholding tax in accordance with Sections 3.6, 3.6.1 and 3.6.2. BJIOC hereby expressly instructs CSN not to withhold any amount as Brazilian withholding income tax on potential capital gains from the price to be paid to BJIOC for the shares to be sold by it under the Merger Sale of Shares, as long as the double tax treaty executed by Brazil and Japan, as ruled by Decree n. 61.899 dated December 14, 1967 remains in effect on the Date of the Merger. CSN shall deliver to JKTC Parties a certified copy of the DARFs corresponding to the withholding income tax payments, if any, made as provided herein. Each JKTC Party shall be held liable for all income taxes levied on the capital gains derived by them as a result of the Merger Sale of Shares and shall defend for any Claims and indemnify and hold CSN harmless from and in respect of, without limitation of term or value, any Losses arising out of the withholding set forth herein (including amounts remitted to Japan in relation to which no withholding is made). To the extent that amounts are so withheld by CSN, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the relevant JKTC Party in respect of which such deduction and withholding was made by CSN. Each JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd. and Itochu Corporation shall be individually liable proportionally to their equity stake in BJIOC for the indemnification obligations of BJIOC provided in Sections 3.6.1 and 3.6.2.

3.7     Closing Balance Sheets. Within [*] days from the Date of the Merger, CSN shall cause Congonhas Minérios to deliver to JKTC Parties:

(i)     (a) the balance sheet of Congonhas Minérios as of the Date of the Merger, immediately before the Merger (“Closing Balance Sheet of Congonhas Minérios”) and (b) the balance sheet of Namisa as of the Date of the Merger, immediately before the Merger (“Closing Balance Sheet of Namisa” and together with the Closing Balance Sheet of Congonhas Minérios, the “Closing Balance Sheets”);

(ii)   (a) the Working Capital of Congonhas Minérios on the Date of the Merger (“Closing Working Capital of Congonhas Minérios”) and (b) the Net Debt of Congonhas Minérios on the Date of the Merger (“Closing Net Debt of Congonhas Minérios”), in Reais, based on the Closing Balance Sheet of Congonhas Minérios, together with the relevant underlying calculations and figures in the form set forth in Schedule 3.7(ii), both confirmed by the Drop Down Specialized Firm; and

(iii) (a) the Working Capital of Namisa on the Date of the Merger (“Closing Working Capital of Namisa”) and (b) the Net Debt of Namisa on the Date of the Merger 

(“Closing Net Debt of Namisa”), in Reais, based on the Closing Balance Sheet of Namisa, together with the relevant underlying calculations and figures in the form set forth in Schedule 3.7(iii), both confirmed by the Drop Down Specialized Firm.

22

 

 

  

 

3.7.1        Any difference between: (i) the Closing Working Capital of Congonhas Minérios and the Working Capital of Congonhas Minérios on the Drop Down Date (“Δ Closing Working Capital of Congonhas Minérios”); and (ii) the Closing Working Capital of Namisa and the Working Capital of Namisa on the Drop Down Date (“Δ Closing Working Capital of Namisa”), shall be reimbursed in cash, according to the formula set forth below:

Net Closing Working Capital Cash Adjustment = ([*])*JKTC Top Shareholding Position.

In case Net Closing Working Capital Cash Adjustment is positive number, JKTC will be reimbursed by CSN in the amount equivalent to the Net Closing Working Capital Cash Adjustment. In case the number is negative, JKTC will reimburse CSN in such amount.

Where Δ Closing Working Capital of Namisa = [*].

3.7.2        Any difference between: (i) the Closing Net Debt of Congonhas Minérios and the Net Debt of Congonhas Minérios on the Drop Down Date (“Δ Closing Net Debt of Congonhas Minérios”); and (ii) the Closing Net Debt of Namisa and the Net Debt of Namisa on the Drop Down Date (“Δ Closing Net Debt of Namisa”), shall be reimbursed in cash, according to the formula set forth below:

Net Closing Net Debt Cash Adjustment = [*].

In case Net Closing Net Debt Cash Adjustment is positive number, JKTC will reimburse CSN in the amount equivalent to the Net Closing Net Debt Cash Adjustment. In case the number is negative, JKTC will be reimbursed by CSN in such amount.

Where Δ Closing Net Debt of Namisa = [*].

3.7.3        Illustrative calculations of the Net Closing Working Capital Cash Adjustment are contained in Schedule 3.7.3(a) and of the Net Closing Net Debt Cash Adjustment are contained in Schedule 3.7.3(b).

3.7.4        The payment provided in Section 3.7.1 and Section 3.7.2 shall be effected within sixty (60) days from the date its amount is finally determined.

3.8     MRS Shareholders Agreement. As soon as the necessary approvals have been obtained, Congonhas Minérios shall execute the Adhesion Term to the MRS Shareholders Agreement.

ARTICLE IV   
ACTIONS BETWEEN THE DATE OF EFFECTIVENESS AND THE DATE OF MERGER

4.1     From the Date of Effectiveness until the earlier of the Date of the Merger or the termination of this Agreement, (i) each of CSN and Congonhas Minérios, on one side, and (ii) JKTC Parties, on the other side (in each case, in relation to themselves and/or their respective Subsidiaries, as applicable, including Namisa), shall: (a) use their best commercial efforts to take all actions and to do all things necessary, proper or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction of the conditions precedent set forth in ARTICLE V); (b) keep their businesses and properties in good order, including their present operations, physical facilities, working conditions (wear and tear excepted) and (c) use their best efforts to preserve, to the extent 

23

 

 

  

 

consistent with past practices, their current relationships with their respective customers, suppliers, and/or other persons with whom they have relevant business relationships. 

4.1.1             By [*], CSN and the JKTC Parties shall have agreed on a development plan for Congonhas Minérios which shall not be binding.

4.2     Without prejudice to the provisions of Section 4.1 and except (a) in the ordinary course of business; (b) as otherwise expressly required pursuant to or provided for in this Agreement, (c) as previously consented to by JKTC Parties in writing, or (d) as required by any applicable Law or any Governmental Authority, from the Date of Effectiveness until the Date of the Merger or the Drop Dead Date, whichever occurs first, each of CSN, Congonhas Minérios and/or Namisa, as applicable, shall not take (nor allow any of their respective Subsidiaries to take, when applicable) any of the following actions:

(i)            any amendment to the articles of association/by-laws of Congonhas Minérios, Namisa or any of their Subsidiaries that has, or will have, a relevant impact on the Business of such companies or of CSN Iron Ore Division or that, in any manner, has, or will have effects on the transactions set forth herein;

(ii)          any corporate reorganization involving Congonhas Minérios, Namisa, any of their Subsidiaries or the CSN Establishment, including merger, spin-off, amalgamation, or merger of shares;

(iii)        enter into any new joint venture, consortia, association of any nature or similar agreement by or involving Congonhas Minérios, Namisa, their Subsidiaries or the CSN Iron Ore Division;

(iv)        issuance of any shares or other securities, convertible or not into shares, by Congonhas Minérios, Namisa and/or any of their Subsidiaries;

(v)          create any Lien or sell, transfer, assign, lease, offer as payment, contribute to capital, exchange or otherwise dispose of, in any manner, directly or indirectly, the assets of Congonhas Minérios (other than the Congonhas Minérios Excluded Assets), its Subsidiaries, if any, and the assets comprised in the CSN Iron Ore Division or any of CSN ́s shares in Congonhas Minérios or Namisa, the MRS Shares or the MRS Bound Share (in whole or in part), provided however that nothing contained in this section shall prevent CSN, Congonhas Minérios, Namisa or their Subsidiaries from selling their products, rendering services and conducting business in the ordinary course of their businesses;

(vi)        redeem, amortize, repurchase for maintenance in treasury, convert, split or reverse split shares or quotas issued by Congonhas Minérios, Namisa or any of their Subsidiaries;

(vii)      any declaration of dividends, payment of interest on shareholders’ equity or any other distributions or payments to shareholders or quotaholders or any distribution with respect to the capital stock of Congonhas Minérios or Namisa; 

(viii)    the voluntary cancellation, transfer or encumbrance of any Authorizations or rights granted to Congonhas Minérios, Namisa and their Subsidiaries or CSN (exclusively in connection with CSN Iron Ore Division) by the Brazilian Department of Mineral Production (Departamento Nacional de Produção Mineral - DNPM (“DNPM”)) or other Governmental Authorities; 

(ix)        any acquisition, transfer or subscription of shares or quotas of other companies by Congonhas Minérios, Namisa or any of their Subsidiaries; 

24

 

 

  

 

(x)          the contracting, concession or assumption of loans, financing or advances by Congonhas Minérios in an amount higher than [*] in a single transaction or in a series of related transactions;

(xi)        the granting of any guarantees in favor of third parties by Congonhas Minérios, Namisa or any of their Subsidiaries (other than to one of their Subsidiaries), as well as any free release in relation to any debts or obligations of third parties (other than to one of their Subsidiaries), in an amount higher than [*], either in a single transaction or in a series of related transactions; 

(xii)      the filing of a petition for bankruptcy or receivership under court supervision or otherwise (recuperação judicial ou extrajudicial) by Congonhas Minérios, Namisa and/or any of their Subsidiaries; 

(xiii)    the establishment or undertaking of activities by Congonhas Minérios, Namisa or any of their Subsidiaries different from those described in their respective corporate purposes; 

(xiv)    the execution, renewal, and/or amendment of contracts or agreements written or oral (other than intercompany loans), by Congonhas Minérios, Namisa or any of their Subsidiaries or by CSN (in relation to the CSN Iron Ore Division), in an individual amount higher than [*] with any Related Party, other than the existing off-take agreements; 

(xv)      the execution of any material amendment to the TECAR Lease Agreement that results in terms and conditions that are less favorable to CSN or Namisa, as the case may be;

(xvi)    the voluntary termination of the MRS Transportation Agreement in case such termination results in a Material Adverse Effect;

(xvii)   the entering into any amendments, renewal, new agreements or transactions (other than debt agreements and financing transactions) by Congonhas Minérios, Namisa or any of their Subsidiaries or by CSN (in relation to the CSN Iron Ore Division) with third parties or advances to agreements in effect, which create new obligations to Congonhas Minérios, Namisa or any of their Subsidiaries, which individually or in a series of related transactions, exceeds [*], except for agreements providing for the sale of iron ore; and

(xviii)          execution of any new lease for real estate or mining rights by Congonhas Minérios, Namisa or any of their Subsidiaries and/or CSN (in relation to the CSN Iron Ore Division).

4.3     Special Dividends. As soon as possible after the Date of Effectiveness and before the Date of the Merger, and as long as Namisa generates earnings from operational results, the amount equivalent in Reais to [*] shall be distributed to Namisa’s shareholders as dividends (“Special Dividends” and, together with the “Namisa Capital Reduction”, the “Interim Distributions”). 

4.4     Due Diligence. Until the Drop-Down Date, JKTC Parties may conduct a legal, accounting, financing, technical, and operational due diligence exercise regarding the CSN Establishment and Congonhas Minérios (“Due Diligence Exercise”). CSN, therefore, shall cooperate with JKTC Parties and JKTC’s Representatives (including external legal counsel, accountants and other consultants) to make available, in a timely and organized manner, the requested documentation (including hard copies), as well as to afford access to the data and 

25

 

 

  

 

records of operating information relating to the CSN Establishment and Congonhas Minérios, as well as to their premises, properties and personnel, provided that, (i) permissions to enter the premises and/or properties or to contact personnel are subject to a prior written request from JKTC Parties to CSN informing, as the case may be, the name of the JKTC Representatives that will visit premises and/or properties or contact the personnel within at least 72 (seventy-two) hours from the intended time of visit or contact; (ii) the visits and contacts shall be conducted during business hours; and (iii) a representative indicated by CSN shall be present during the visit and/or contact.

4.5     Exclusivity. During the term of this Agreement, or until the Date of the Merger, whatever occurs first, CSN and JKTC Parties, to the extent applicable, shall not and shall cause Namisa or Congonhas Minérios not to (i) solicit, initiate, or encourage the submission of any proposal or offer from any Person relating to the acquisition of any capital stock or voting securities, or any portion of the CSN Establishment, Namisa, Congonhas Minérios or any of their Subsidiaries; or (ii) participate in any discussions or negotiations aiming at furnishing any information with respect to, assisting or participating in, or facilitating in any other manner any effort or attempt by any Person to do or seek any of the foregoing. 

4.6     Antitrust Approvals. The Investors agree to make, or to cause to be made, the filing for the Antitrust Approvals as well as any other filing that may be required under any antitrust Law or by any antitrust Governmental Authority, including any other requirements of the antitrust legislation of any relevant jurisdiction, if applicable, within ninety (90) days from the date hereof (unless otherwise required) and to supply promptly any additional information and documentary material that may be requested pursuant thereto.

4.6.1        The Investors shall use their best efforts to cause the necessary approvals or ancillary antitrust requirements necessary to implement the Spin-Off, the Merger and the Merger Sale of Shares (such as waiting periods) to terminate or expire or be obtained at least sixty (60) days prior to the Drop Dead Date.

4.6.2        In case any of the Antitrust Authorities approve the transaction conditioned upon the agreement by any or all the Investors to comply with certain reasonable conditions and restrictions, the Parties will negotiate in good faith to try to reach a reasonable solution. Notwithstanding the foregoing, nothing in this Section 4.6.2 or otherwise in this Agreement shall require the Investors to propose, negotiate, effect or agree to, the sale, divestiture, license or other disposition of any assets or businesses, or otherwise take any action that limits the freedom of action with respect to, or their ability to retain any of the businesses, product lines or assets of any of the Investors or their Affiliates (including CSN Iron Ore Division, Congonhas Minérios and Namisa).

4.6.3        Each Party will provide, and cause their Affiliates to provide, all information necessary for preparing the notification requested by each applicable antitrust law in connection with the transaction contemplated hereby, and to promptly respond to additional requests, if any, made by any of the Governmental Authorities. To the extent not prohibited by applicable Law, each of the Investors shall also furnish to each other all information required for any application, notification or other filing to be made in connection to the Antitrust Approvals. Each Party expressly agrees not to make any contact with nor send any communication to the antitrust Governmental Authorities without the participation or the prior written agreement of the other Parties. The Parties agree that both JKTC Parties and CSN shall be represented at all meetings in-person and in all substantive conversations with any Governmental Authority regarding the matters set forth in this Section 4.6, except if, and to the extent that, any Governmental Authority objects to any party’s being represented at any such meeting or in any such conversation. The Parties hereto will consult and cooperate with one another in connection with any analyses, appearances, presentations, memoranda, briefs, arguments, opinions and proposals 

26

 

 

  

 

made or submitted by or on behalf of any party hereto in connection with the Antitrust Approvals. 

4.6.4        All costs and expenses individually incurred by a given Party in connection with its own efforts to collaborate with the obtainment of the Antitrust Approvals, including attorney fees to the individual counsels of each of the Parties, shall be paid by the Party incurring such expenses. Other indivisible costs related to the obtainment of the Antitrust Approvals such as Governmental Authority ́s fees, expert fees, and all other like costs that the Investors as a whole may deem to be necessary for the purpose of explaining the transaction to a relevant Governmental shall be borne in equal parts by CSN on one side and the JKTC Parties on the other side, except if otherwise provided in this Agreement.

4.6.5        Each Party shall be solely responsible before the Governmental Authorities for its own actions and for the quality, integrity and veracity of the information and documentary material submitted by such party to such Governmental Authorities, in the context of the antitrust filings referred to in this Section. Any penalties, fines, injunctions, administrative sanctions, costs and expenses (including reasonable attorneys’ fees) which relate to, or arise out of, a breach or violation of provisions of the antitrust Law or orders of antitrust Governmental Authority to the Parties shall be borne by the Party who breached or violated the relevant legal provision or order and such Party shall indemnify and hold the other Parties (and their Affiliates) harmless from and against any such penalties, fines, injunctions, administrative sanctions, costs and expenses.

ARTICLE V      
CONDITIONS PRECEDENT TO THE MERGER AND THE MERGER SALE OF SHARES

5.1     Conditions Precedent to the Spin-Off, the Merger and the Merger Sale of Shares. The Investors' obligation to proceed with the Spin-Off, the Merger and the Merger Sale of Shares is subject to the satisfaction of the following conditions precedent before the Date of the Merger (except for those which shall be satisfied on the Date of the Merger): 

(i)            all the Preparatory Actions to the Merger shall have been implemented in accordance with this Agreement and the Brazilian Law;

(ii)          CSN shall have delivered the documents listed in Exhibit 5.1(ii) to JKTC Parties;

(iii)        the Antitrust Approvals shall have been obtained pursuant to the terms set forth in Section 4.6 above, as well as (a) the other approvals listed in Exhibit 5.1(iii) and (b) all material Authorizations necessary for the operation of the CSN Iron Ore Division by Congonhas Minérios, as currently operated by CSN, and all such Authorizations shall be in full force and effect (together the “Merger Prior Approvals”);

(iv)        CSN and Congonhas Minérios, as the case may be, shall have applied for the following environmental licenses with the relevant Governmental Authorities: [*]; and JKTC Parties shall have received evidences of receipt of all such applications by the Governmental Authority;

(v)          the nonexistence of any order issued by any Governmental Authority or any Law, preventing, restraining, prohibiting, suspending, altering, limiting or seeking damages in connection with the consummation of the Preparatory Actions to the Spin-Off, the Merger or the Merger Sale of Shares;

27

 

 

  

 

(vi)        each of the representations and warranties of CSN contained in or made pursuant to this Agreement shall be true, complete and correct in all material respects on the Execution Date and on the Date of the Merger (without giving effect to the Bring Down Supplements), except (a) to the extent that such representations and warranties are qualified by the terms “material” or “materially”, in which case such representations and warranties (as so written with such qualifications) shall be accurate in all respects on the Execution Date and on the Date of the Merger; and (b) for the representations and warranties set forth in Sections 7.1(a), 7.1(b), 7.1(c), 7.1(d), 7.1(h), 7.1(n) and 7.1(x), which shall be true and complete in all respects on the Execution Date and on the Date of the Merger; 

(vii)      each of the representations and warranties of JKTC Parties contained in or made pursuant to this Agreement shall be true and complete on the Date of Execution and on the Date of the Merger;

(viii)    all of CSN’s covenants and obligations provided herein to be performed prior to the Date of the Merger (considered both collectively and individually) shall have been duly performed and complied with in all material respects;

(ix)        all of JKTC Parties’ covenants and obligations provided herein to be performed prior to the Date of the Merger (considered both collectively and individually) shall have been duly performed and complied with in all material respects;

(x)          no judicial, arbitration or administrative Claim aiming to prohibit, restrict or postpone the Preparatory Actions to the Merger, the Spin-Off, the Merger or the Merger Sale of Shares, or to challenge the validity or legitimacy of the Preparatory Actions to the Merger, the Spin-Off, the Merger or the Merger Sale of Shares shall be in course;

(xi)        [*];

(xii)      CSN shall have presented the Initial Master Plan and the Operating Budget based on the Initial Master Plan to the JKTC Parties until [*] and such Initial Master Plan and Operating Budget shall have been finally approved by the Investors until [*];

(xiii)    CSN shall have obtained the renewal of the TECAR Lease Agreement for an additional 20-year term;

(xiv)    CSN shall have assigned the current agreements, for the sale by Congonhas Minérios of iron ore to its clients, by means of which the sales currently performed by CSN or any of its Subsidiaries will be assigned and will be performed, instead, by Congonhas Minérios or any of its Subsidiaries upon the Drop-Down; 

(xv)        no Material Adverse Effect shall have occurred;

(xvi)      Congonhas Minérios shall be operated by the Transferred Employees;

(xvii)    Congonhas Minérios Indebtedness, as reflected in the Congonhas Minérios Merger Balance Sheet, shall not exceed [*]); 

(xviii) immediately prior to the Date of the Merger, Namisa shall have [*] (“Congonhas Minérios Operating Cash”) as cash for Congonhas Minérios expansion in accordance with the Operating Budget; 

28

 

 

  

(xix)      the JKTC Shareholding Position Resulting from Merger shall have been finally determined; and

(xx)        Congonhas Minérios shall have a transportation agreement with MRS. 

5.2     Waiver. The conditions set forth in items (ii), (iv), (vi), (viii), (xi), ((xiv), for those agreements that do not require the prior written approval by the applicable counterparty for their assignment), (xvi) and (xvii) of Section 5.1 above are for the benefit of JKTC Parties and, as such, may be unilaterally waived by JKTC Parties in writing. The conditions set forth in items (vii) and (ix) of Section 5.1 above are for the benefit of CSN and, as such, may be unilaterally waived by CSN in writing. The conditions set forth in items (i), (iii), (v), (x), (xii), (xiii), ((xiv), for those agreements that require the prior written approval by the applicable counterparty for their assignment), (xv), (xviii), (xix) and (xx) of Section 5.1 above are for the benefit of both Parties and, as such, may be waived by mutual consent in writing.

5.3     Failure to Implement the Spin-Off, the Merger and the Merger Sale of Shares. In case the consummation of the Spin-Off, the Merger or the Merger Sale of Shares does not occur by [*], or any postponements of such date that the Parties may mutually agree (“Drop Dead Date”), for any reason whatsoever: (i) the Closing Dividends will not be paid; (ii) the Transitional Agreement will be terminated in accordance with its terms; (iii) this Agreement will be terminated with no penalty or additional amount of any nature being due by any of the Investors, exclusively in relation to the Investment Agreement.

ARTICLE VI   
EARN OUT

6.1     Earn Out. If a Liquidity Event occurs, CSN may convert the Pre-Money Equity Value – Subscription Bonus into Congonhas Minérios’s shares (“Liquidity Event Conversion”) pursuant to this ARTICLE VI. For the avoidance of doubt, the Liquidity Event shall be a one time event and shall not be counted twice. 

6.2     Pre-Money Valuation. The ratio for conversion of the Pre-Money Equity Value – Subscription Bonus into Congonhas Minérios’s shares shall depend on Congonhas Minérios’ pre money equity value related to the Liquidity Event (“Pre-Money Valuation”). The Pre-Money Valuation shall be calculated in accordance with (i) the price per share agreed and issued for the Qualified Private Sale or the price per share set forth in the announcement of the beginning of the Qualified IPO (Anúncio de Início), as the case may be, and (ii) the total number of shares of Congonhas Minérios, excluding the shares to be issued by Congonhas Minérios for the Liquidity Event. 

6.3     Maximum Equity Value. If the Pre-Money Valuation is equal, in Brazilian reais, [*] or greater (“Maximum Equity Value”), the Pre-Money Valuation shall be deemed to be [*] for the purpose of the Liquidity Event Conversion. 

6.4     Capital Increase Prior to the Liquidity Event. In the event Congonhas Minérios’ capital stock has been increased before the occurrence of the Liquidity Event, the Minimum Equity Value and the Maximum Equity Value shall be increased by the same amount of the increased amount of Congonhas Minérios’ capital stock and, as a result, the new amounts calculated as set forth herein shall be considered as the Minimum Equity Value and the Maximum Equity Value. 

6.5     Conversion Ratio. The number of shares in Congonhas Minérios that CSN shall be entitled to receive as a result of the Liquidity Event Conversion shall vary linearly so that JKTC Parties shareholding ratio in Congonhas Minérios shall be JKTC Parties’s top 

29

 

 

  

 

shareholding position in case the Pre-Money Valuation of the Liquidity Event is the Minimum Equity Value (“JKTC Liquidity Event Top Shareholding Position”), and shall be JKTC Parties bottom shareholding position in case the Pre-Money Valuation of the Liquidity Event is the Maximum Equity Value (“JKTC Liquidity Event Bottom Shareholding Position”). JKTC Parties’ top shareholding position, bottom shareholding position and final shareholding position shall be calculated as follows:

JKTC Liquidity Event Top Shareholding Position = JKTC Top Shareholding Position Post Merger Sale of Shares

JKTC Liquidity Event Bottom Shareholding Position = JKTC Bottom Shareholding Position Post Merger Sale of Shares

JKTC Liquidity Event Final Shareholding Position = [*]

6.6     Liquidity Event Conversion. CSN shall exercise its Pre-Money Equity Value – Subscription Bonus within seven (7) days from (i) the Liquidity Event, in case of a Primary Offer; or (ii) the seventh (7th) day after JKTC Parties have received evidence of the Qualified Private Sale in accordance with Section 6.7.

6.7     Evidence of the Qualified Private Sale. Within seven (7) days from execution of the documents that formalize the Qualified Private Sale, CSN shall provide JKTC Parties with all relevant documentation necessary to demonstrate the occurrence of the Qualified Private Sale, including copy of the relevant minutes that approved the capital increase.

ARTICLE VII                        
REPRESENTATIONS AND WARRANTIES

7.1     Representations and Warranties of Congonhas Minérios and CSN. Except as otherwise disclosed to JKTC Parties in this Agreement, Congonhas Minérios and CSN jointly and severally represent and warrant to JKTC Parties that each of the following representations and warranties is, as of the date hereof, and will be on the Date of the Merger, true and correct (except to the extent such representations and warranties refer to a specific date, in which case such representations and warranties shall be true and correct as of such date):

(a)                Organization. Congonhas Minérios, its Subsidiaries (if any) and CSN are duly incorporated entities, validly existing under the Laws of Brazil. 

(b)                Qualification of Congonhas Minérios, its Subsidiaries (if any) and CSN. Congonhas Minérios, its Subsidiaries (if any) and CSN have the required corporate power and authority to carry on their business as now being conducted. 

(c)                Authority. CSN and Congonhas Minérios have all requisite corporate power and authority to execute and deliver this Agreement and the Transaction Documents and to perform their obligation hereunder, including the Drop-Down, the Spin-Off, the Merger and the Merger Sale of Shares. The execution, delivery and performance of this Agreement and of the Transaction Documents and the transactions contemplated hereby and thereby by CSN and Congonhas Minérios are subject to CSN and Congonhas Minérios’ board of directors approval.  

(d)                Enforceability. This Agreement has been duly and validly executed and delivered by CSN and Congonhas Minérios and constitutes a valid and binding agreement of CSN and of Congonhas Minérios enforceable against CSN and Congonhas Minérios in accordance with its terms, subject to applicable bankruptcy, 

insolvency, reorganization, moratorium and other similar Laws of general application from time to time in effect that affect creditors’ rights generally. 

30

 

 

  

 

(e)                No Violation or Breach. Except as set forth in Schedule 7.1(e), neither the execution and delivery of this Agreement and of the Transaction Documents nor the consummation of the transactions and performance of the terms and conditions of this Agreement and of the Transaction Documents by Congonhas Minérios or CSN will (i) conflict with, result in a violation or breach of or default under any provision of the By-laws of Congonhas Minérios, its Subsidiaries (if any) or CSN; (ii) conflict with, result in a violation or breach of or default under, or give rise to a right of termination, cancellation or acceleration of any provision of any Material Contract; or (iii) violate any Law in relation to Congonhas Minérios, its Subsidiaries (if any) or CSN or to their respective properties or assets, including the Brazilian Corporate Law and any regulation applicable to publicly held corporations in Brazil.

(f)                 Consents. Except for the Merger Prior Approvals, to the Best Knowledge of CSN and Congonhas Minérios, no filing or registration with, declaration or notification to, or Authorization is required in connection with the execution, delivery and performance of this Agreement and the Transaction Documents by Congonhas Minérios, its Subsidiaries (if any) and/or CSN or the consummation by Congonhas Minérios, its Subsidiaries (if any), and/or CSN of the transactions contemplated hereby and thereby. No representation or warranty is being given by CSN or Congonhas Minérios in relation to the Antitrust Approvals. 

(g)                Claims. Except as set forth in Schedule 7.1(g), there is no Claim involving Congonhas Minérios, its Subsidiaries (if any), CSN (in relation to CSN Iron Ore Division and its related business activities), CSN’s Stake in Namisa or the MRS Shares in relation to which CSN or Congonhas Minérios have received a legal notice currently in progress before any Governmental Authority.

(h)                Capitalization of Congonhas Minérios. Schedule 7.1(h) sets forth the number of outstanding shares of capital stock of Congonhas Minérios on the Date of Execution, the names of all holders thereof and the number and percentage of shares owned by each such holder. All of the outstanding capital stock of Congonhas Minérios held by CSN is owned of record and beneficially by CSN free and clear of any and all Liens (other than Claims, which are disclosed in Section 7.1(g)). All of the outstanding capital stock or other ownership interests of Congonhas Minérios held by CSN have been duly authorized and validly issued. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, advance for future capital increase (adiantamento para futuro aumento de capital), conversion rights, exchange rights, or other contracts or commitments that could require CSN or Congonhas Minérios to sell, transfer, or otherwise dispose of any capital stock of Congonhas Minérios or that could require Congonhas Minérios or CSN to cause Congonhas Minérios to issue, sell, or otherwise cause to become outstanding any of its own capital stock. There are no voting agreements or understandings with respect to the voting of any capital stock of Congonhas Minérios or any contracts or commitments that could require Congonhas Minérios or CSN to enter into any voting agreements or understandings with respect to the voting of any capital stock of Congonhas Minérios.

(i)                  Compliance with Law. Except as set forth in Schedule 7.1(i)(1), and to the Best Knowledge of CSN and Congonhas Minérios, there is no uncured violation of any Law by CSN (in relation to CSN Establishment) or Congonhas Minérios that would cause a Material Adverse Effect. Except as shown in Schedule 7.1(i)(2), neither CSN nor Congonhas Minérios has received written notice from any Governmental Authority of any violation of Law with respect to Congonhas Minérios or the CSN Establishment. 

CSN is not making any representations or warranties in this paragraph with respect to any Environmental Law or any Law relating to Real Estate, Mining Rights or Taxes as such matters are addressed otherwise in this Agreement.

31

 

 

  

 

(j)                  Bankruptcy. There are no bankruptcy, reorganization or arrangement proceedings pending against or, to the Best Knowledge of CSN and Congonhas Minérios, threatened against Congonhas Minérios, its Subsidiaries (if any) and/or CSN.

(k)                Real Estate; Mining Rights. (i) Schedule 7.1(k)(1) identifies all real estate owned, leased, possessed or otherwise occupied by Congonhas Minérios and its Subsidiaries (if any), and by CSN (in relation to CSN Iron Ore Division) and all contractual rights for rights of way or easement related thereto (the foregoing property and rights collectively referred to as the “Real Estate”); (ii) except as set forth in Schedule 7.1(k)(2), Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division), have good, valid and marketable title to, valid and subsisting leasehold or acquisition interests in or to, or valid, binding and enforceable rights to, the Real Estate, as the case may be, free and clear of any material Liens (other than Claims, which are disclosed in Section 7.1(g)); (iii) except as set forth in Schedule 7.1(k)(3), all facilities installed at, or otherwise serving the Real Estate, have received all Authorizations required in connection with the ownership or operation thereof and are operated and maintained in accordance with the applicable Laws, except for non-received Authorizations or non-compliances with Law which would not cause a Material Adverse Effect; (iv) except as set forth in Schedule 7.1(k)(4), there are no outstanding options or rights of first refusal to purchase any Real Estate owned by CSN or by Congonhas Minérios, portions thereof or interest therein; (v) the mining rights owned, leased, possessed, held or otherwise explored by Congonhas Minérios (other than the Congonhas Minérios’ Excluded Assets), its Subsidiaries (if any) and by CSN (in relation to CSN Iron Ore Division) are listed and described in Schedule 7.1(k)(5) (the foregoing rights collectively referred to as the “Mining Rights”). Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) have, or lease, valid, binding and enforceable rights as to all Mining Rights (in accordance with the terms of the applicable Mining Right) and the Mining Rights have not been sold, transferred, alienated, leased or encumbered, as applicable, or in any manner has the right to use and enjoy ownership or possession of the Mining Rights been restricted, transferred or surrendered since the initial award thereof, and Congonhas Minérios’, its Subsidiaries’ (if any) and CSN’s (in relation to CSN Iron Ore Division) title to all the Mining Rights is free and clear of any Liens (other than Claims, which are disclosed in Section 7.1(g)), except for the Liens set forth in Schedule 7.1(k)(6); (vi) each Mining Right (1) was duly granted by the appropriate Governmental Authority, (2) is fully and unconditionally vested in Congonhas Minérios, its Subsidiaries (if any) or in CSN (in relation to CSN Iron Ore Division), as applicable, except for the conditions set forth in Schedule 7.1(k)(7) and those restrictions set forth by the applicable Mining Right, (3) is in full force and effect, (4) to the Best Knowledge of CSN and Congonhas Minérios, is not subject to any threatened Claim; (vii) all Mining Rights are legal, valid and in effect in accordance with their respective terms and Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) have performed and satisfied all duties, obligations, charges and requirements of any type or nature which, as holders of the Mining Rights, are imposed upon them by any applicable Law or under the Mining Rights except when the lack of performance or satisfaction would not result in a Material Adverse Effect. To the Best Knowledge of Congonhas Minérios and CSN, neither Congonhas Minérios, its Subsidiaries (if any) nor CSN has done or failed to do any act, or by omission or commission created any cause or grounds, which would result in the termination, resolution, rescission or revocation of any of the Mining Rights; (viii) all procedures of Law related to the award and maintenance of the Mining Rights have been fully and faithfully complied with in all material respects by CSN (in 

relation to CSN Iron Ore Division) and Congonhas Minérios; (ix) except for Schedule 7.1(k)(8), in respect of each Mining Right and each parcel of the Real Estate owned by Congonhas Minérios, its Subsidiaries (if any) or by CSN (in relation to CSN Iron Ore Division), Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) has timely paid or been discharged of all material fees, duties, royalties and other payments, obligations or burdens that relate thereto, and all other requirements of Brazilian Law or as set forth in the Mining Rights have been fully and faithfully complied with in all material respects; (x) except as set forth in Schedule 7.1(k)(9), (1) the Mining Rights and the Real Estate are all the mining rights and real estate required to operate the CSN Iron Ore Division as currently operated (2) CSN (in relation to CSN Iron Ore Division) and Congonhas Minérios, as the case may be, have possession of an exclusive right to use and enjoy all Mining Rights in accordance with their respective terms, which enable them to exploit the Business as currently conducted, and (3) there are no restrictions thereon that would adversely affect the rights of Congonhas Minérios to exploit the deposits covered by the Mining Rights. 

32

 

 

  

 

(l)                  Material Contracts. Schedule 7.1(l)(1) lists all agreements, arrangements, contracts and other contractual rights and obligations of the types listed below (“Material Contracts”) (1) to which, on the Date of Execution, Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division), are a party or by which Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division) are bound and (2) which are essential for Congonhas Minérios to conduct the CSN Iron Ore Division Business as currently conducted: 

(i)                 contracts requiring, based on their terms, or that are reasonably expected to result in, the payment or receipt of any payment or exchange of amounts in excess of fifty million US Dollars (US$50,000,000.00) during any period of twelve (12) months; 

(ii)               contracts requiring the consent of Third Parties to consummate the transactions contemplated by this Agreement or that, otherwise, grant to Third Parties rights to terminate or make the contracted conditions more onerous, except when such terminations or more onerous conditions are not material; 

(iii)             contracts involving the carrying out of financial transactions or any debt instruments of any nature, in an amount higher than fifty million US Dollars (US$50,000,000.00); 

(iv)             contracts that relate to any type of derivative instrument, irrespective of the market where these are traded or registered or the way they are performed; 

(v)               any agreement of any nature with Affiliates and Related Parties of CSN; 

(vi)             any agreement or commitment restricting the capacity of such companies to commit themselves with any area of activity or to compete with any other entity; 

(vii)           any joint venture, partnership, shareholders’ or quotaholders’ agreements or other contracts involving the voting of shares or quotas of capital stock or other ownership interests of Congonhas Minérios and/or its Subsidiaries (if any), or a sharing of profits, Losses, costs, Liabilities of Congonhas Minérios or its Subsidiaries (if any) with any other Person; 

(viii)         other material services, construction or operating contracts related to the Business in an amount higher than fifty million US Dollars (USD 

50,000,000.00), related to (A) the exploration, mining, processing, sale, transportation or exportation of iron ore or iron concentrates, (B) the construction or operation of an open pit mine and processing plant; and (C) the construction, development or operation of iron ore logistics assets; or

33

 

 

  

 

(ix)             contracts entered into with any Governmental Authority. 

Except as set forth in Schedule 7.1(l)(2), neither Congonhas Minérios, its Subsidiaries (if any) nor CSN (in relation to CSN Iron Ore Division) is in material breach of or default under, and no event has occurred that would constitute a material default by Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division) under any provision of any Material Contract, and neither Congonhas Minérios, its Subsidiaries (if any) nor CSN (in relation to CSN Iron Ore Division) has received written notice from any other party to any Material Contract that Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division) is in material breach in relation to any aspect of such Material Contract, which breach has not been remedied, and no such other party is in material breach of or default under any provision of any such Material Contract. 

(m)              Labor Matters. Except as set forth in Schedule 7.1(m), there are no pending or, to the Best Knowledge of CSN and Congonhas Minérios, threatened strikes, work stoppages, slowdowns or lockouts against Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division).

(n)                Subsidiaries. Schedule 7.1(n) of this Agreement lists all Subsidiaries of CSN (in relation to CSN Iron Ore Division) and of Congonhas Minérios and sets forth the number of outstanding shares of capital stock or other ownership interest of each of such Subsidiaries, the names of all holders thereof and the number and percentage of shares or other ownership interest owned by each of such holder. All of the outstanding capital stock or other ownership interest of each of such Subsidiaries held by CSN or Congonhas Minérios is free and clear of any and all Liens (other than Claims, which are disclosed in Section 7.1(g)). All of the outstanding capital stock or other ownership interest of each of such Subsidiaries held by CSN or Congonhas Minérios have been duly authorized and validly issued. There are no outstanding or authorized options, warrants, purchase rights, subscription rights, conversion rights, exchange rights, or other contracts or commitments that could require CSN or Congonhas Minérios or any of such Subsidiaries to sell, transfer, or otherwise dispose of any capital stock or other ownership interest of any of such Subsidiaries or that could cause any such Subsidiary to issue, sell, or otherwise cause to become outstanding any of its own capital stock or other ownership interest. There are no voting agreements or understandings with respect to the voting of any capital stock or other ownership interest of any such Subsidiary. None of such Subsidiaries Controls directly or indirectly or has any direct or indirect equity participation in any corporation, partnership, trust, or other business association that is not a Subsidiary.

(o)                Authorizations. Except as set forth in Schedule 7.1(o)(1), Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) have all material Authorization required to conduct their businesses as currently conducted (including all material Authorizations required under Environmental Law and relating to Tax Matters, Mining Rights and Real Estate). Except as set forth in Schedule 7.1(o)(2), each such Authorization is in full force and effect and Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) are in compliance with all of their material obligations with respect thereto. 

34

 

 

  

 

(p)                Environmental Matters. Except as set forth in Schedule 7.1(p), to the Best Knowledge of CSN and of Congonhas Minérios (i) Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) are in compliance with all Environmental Laws in all material respects; (ii) there is no Lien (other than Claims, which are disclosed in Section 7.1(g)) over Congonhas Minérios’, its Subsidiaries’ (if any) or CSN Iron Ore Division premises, by any Governmental Authority, resulting from violation of or noncompliance with Environmental Laws, except for non material extrajudicial notices from Third Parties; (iii) neither Congonhas Minérios, its Subsidiaries (if any) nor CSN (in relation to CSN Iron Ore Division) is subject to any outstanding consent decree, compliance order or administrative order (including to investigate or remediate any contaminated land) pursuant to an Environmental Law; and (iv) Congonhas Minérios, its Subsidiaries (if any) and CSN are in full compliance with, in all material respects, with the technical conditions imposed by the environmental Authorizations issued in favor of the Business developed in CSN Iron Ore Division. 

(q)                Tax Matters. Except as set forth in Schedule 7.1(q), to the Best Knowledge of CSN and Congonhas Minérios, (i) Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division and its related business activities) are in compliance with the Laws relating to Taxes in all material respects; (ii) all material Tax Returns required to be filed by or with respect to Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division and its related business activities) have been filed with the appropriate tax authorities in all jurisdictions in which such Tax Returns are required to be filed; (iii) such Tax Returns were true, complete and correct in all material respects, and all Taxes reported in such Tax Returns and all other Taxes due by Congonhas Minérios, its Subsidiaries (if any) or CSN (in relation to CSN Iron Ore Division and its related business activities), as a taxpayer or as a party liable to collect the Taxes, as determined by the applicable Law, that have been due and all other requirements of Law relating to Taxes have been fully and faithfully complied with in all material respects; (iv) Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division and its related business activities) have made all material payments and are in compliance with all their material obligations related to Taxes; and (v) all Taxes due by Congonhas Minérios and/or any of its Subsidiaries or CSN (in relation to CSN Iron Ore Divisions and its related business activities) enrolled in tax installment payment programs (programas de parcelamento ou recuperação fiscal) with Federal and/or State tax authorities have been timely paid and all other conditions for enjoyment of the programs have been fulfilled. 

(r)                 Pro Forma Balance Sheet. The pro forma balance sheet of the CSN Establishment based on the financial statements of CSN as of September 30, 2014 (including the notes thereto) is attached hereto as Exhibit 7.1(r) (“CSN Establishment Pro Forma Signing Balance Sheet”). The CSN Establishment Pro Forma Signing Balance Sheet fairly presents, in all material aspects, the unconsolidated financial position of CSN in relation to the CSN Establishment, as of the respective dates or for the respective periods set forth therein and are true, correct and complete in all material respects as of the respective dates, and are consistent, in all material aspects, with the records of CSN, all in conformity with IFRS or Brazilian GAAP, as applicable, consistently applied during periods involved therein, except as otherwise noted therein, and subject to normal and recurring year-end adjustments that have not been and are not expected to be material in amount.

(s)                 Financial Statements. The financial statements of Congonhas Minérios, as of September 30, 2014 is attached hereto as Schedule 7.1(s) and fairly presents the financial position and the results of operations and cash flows of Congonhas Minérios as of the respective date, or for the respective periods set forth therein, and are true, 

correct and complete as of the respective date, and are consistent with the records of Congonhas Minérios, all in conformity with IFRS or Brazilian GAAP, as applicable, consistently applied during periods involved therein, except as otherwise noted therein, and subject to normal and recurring year-end adjustments that have not been and are not expected to be material in amount.

35

 

 

  

 

(t)                  Insurance. Except as set forth in Schedule 7.1(t), (i) all premiums due and payable for the insurance policies of Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) have been paid in the ordinary course of business; (ii) there are no pending Claims in excess of five million United States dollars (USD5,000,000.00) under such policies in relation to which Congonhas Minérios, its Subsidiaries (if any) or CSN, as the case may be, has received legal notice; and (iii) all insurance policies of Congonhas Minérios and related to the CSN Iron Ore Division have adequate coverage with respect to the risks addressed by such policies, as is customary for companies engaged in similar businesses within the same industry in Brazil.

(u)                Title to Assets. Each of Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Establishment), has good and marketable title to all properties, assets and rights (other than Real Estate) owned by it (including to the CSN Stake in Namisa and the MRS Shares) in accordance with the relevant titles, in each case free from Liens (other than Claims, which are disclosed in Section 7.1(g)) and defects that could affect the value thereof or interfere with the use made of them. Each of Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Establishment until it is contributed by CSN to Congonhas Minérios) holds all leased personal property under valid and enforceable leases, with no exceptions that could interfere with the use made thereof by them, including those properties and assets that are part of the CSN Iron Ore Division.

(v)                Intellectual Property. Congonhas Minérios, its Subsidiaries (if any) and CSN (in relation to CSN Iron Ore Division) are owners of, or entitled to use, all right, title and interest in and to each of the trademarks, logos, trade names, corporate names, domain names, patents, software, designs, copy rights, know-how, trade secrets and other intellectual property rights necessary to carry out their businesses as currently conducted, free and clear of any Liens (other than Claims, which are disclosed in Section 7.1(g)). 

(w)              CSN Iron Ore Division and CSN Establishment. CSN is the owner of the CSN Establishment. Except as set forth in Schedule 7.1(w), the assets, rights and liabilities comprised in the CSN Iron Ore Division (a) are those listed in Exhibit I (b) are in good operating condition and repair, except for normal wear and tear, and are adequate for the uses to which they are being put; (c) are all the assets, rights and liabilities necessary for the development and operation of the Business of the CSN Iron Ore Division as currently conducted by CSN; and (d) comprise all assets required for Congonhas Minérios to operate the CSN Iron Ore Division’s Business as an ongoing concern and on a standalone basis upon the implementation of the Drop Down. 

(x)                MRS Shares. All of the MRS Shares (a) have been legally and validly issued, (b) will, on the Date of the Merger, be held by Congonhas Minérios, free and clear of any Liens (other than Claims, which are disclosed in Section 7.1(g)). 

(y)                Guarantees. Neither CSN (in relation to the CSN Iron Ore Division), Congonhas Minérios nor its Subsidiaries (if any) is a guarantor or otherwise is responsible for any Liability of obligation (including indebtedness) of any other Person, except as provided in Schedule 7.1(y).

36

 

 

  

 

(z)                Brokerage Fees and Commissions. There is no investment banker, broker or finder which has been retained by or is authorized to act on behalf of Congonhas Minérios, its Subsidiaries (if any) or CSN who is or might be entitled to receive any fee and legal fees, commission or payment from JKTC Parties, Congonhas Minérios or any of its Subsidiaries (if any) in connection with the negotiation, preparation, execution or delivery of this Agreement, the Transitional Agreements or the consummation of the transactions contemplated hereby and thereby.

7.1.1        Information. All documents included or to be included in the Data Room are true and correct in all material respects and will be recorded in a DVD that will be delivered to the JKTC Parties at the Date of the Merger (the “DVD”). For the avoidance of doubt, all the representations and warranties of CSN under this Agreement are based on Section 7.1 and its Schedules, which shall prevail over any information contained in the DVD for purposes of Section 8.1(i).

7.2     Representations and Warranties of JKTC Parties. Except as otherwise disclosed to CSN in this Agreement, the JKTC Parties jointly and severally represent and warrant to CSN that each of the following representations and warranties is, as of the date hereof, and will be, on the Date of the Merger, true and correct:

(a)                Organization and Qualification. Each of the JKTC Parties is a company duly organized and validly existing under the Laws of the country of its incorporation and has the requisite corporate power and authority to carry on its business as now being conducted.

(b)                Authority. Each of JKTC Parties has all requisite corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution, delivery and performance of this Agreement and the transactions contemplated hereby have been duly and validly authorized by all requisite corporate or similar action on the part of each JKTC Party, except for POSCO’s board of directors approval. 

(c)                Enforceability. This Agreement has been duly and validly executed and delivered by each of JKTC Parties and constitutes a valid and binding agreement to JKTC Parties and each of JKTC Parties, enforceable against each of JKTC Parties in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws of general application from time to time in effect that affect creditors’ rights generally.

(d)                No Violation or Breach. Neither the execution and delivery of this Agreement nor the consummation of the transactions and performance of the terms and conditions of this Agreement by each of JKTC Parties will (i) result in any violation or breach of or default under any provision of the certificate of incorporation or other similar governing documents of each of JKTC Parties; (ii) will result in a violation or breach of or default under any provision of any agreement, indenture or other instrument under which each of JKTC Parties is bound, other than such violations, breaches or defaults of agreements, indentures or other instruments that would not have a Material Adverse Effect; or (iii) result in any violation or breach of any Law applicable to any of the JKTC Parties.

(e)                Consents. Except for the Merger Prior Approvals, to the Best Knowledge of JKTC Parties, no filing or registration with, declaration or notification to, or Authorization is required in connection with the execution, delivery and performance of this Agreement by each of JKTC Parties or the consummation by each of JKTC Parties of the transactions contemplated hereby. No representation or warranty is being given by the JKTC Parties in relation to the Antitrust Approvals.

37

 

 

  

 

(f)                 Claims. There is no Claim by or before any court or other Governmental Authority or any arbitration proceeding pending or, to each of JKTC Parties’ Best Knowledge, threatened against each of JKTC Parties that if adversely determined would have a Material Adverse Effect or affect any of the JKTC Parties’ ability to perform its obligations under this Agreement.

(g)                Brokerage Fees and Commissions. There is no investment banker, broker or finder which has been retained by or is authorized to act on behalf of each of JKTC Parties who is or might be entitled to any fee and legal fees, commission or payment from CSN or from Congonhas Minérios in connection with the negotiation, preparation, execution or delivery of this Agreement, the Transaction Documents or the consummation of the transactions contemplated hereby and thereby.

(h)                No Liabilities. Each of JKTC Parties has no liabilities of any nature (whether absolute, accrued, contingent or otherwise) that may impact the negotiations set forth in this Agreement.

(i)                  Independent Investigation. Each of JKTC Parties will conduct its own independent investigation, verification, review and analysis of the business, operations, assets, liabilities, results of operations and financial condition of the CSN Establishment and of Congonhas Minérios to the extent each of them are deemed appropriate. In entering into this Agreement, each of JKTC Parties acknowledges that it has relied solely upon the aforementioned investigation, review and analysis and not on any factual representations or opinions of CSN or Congonhas Minérios or any of its Representatives (except the specific representations and warranties set forth in Section 7.1). Each of JKTC Parties acknowledges that (i) none of CSN’s or Congonhas Minérios’ Representatives shall have any personal liability, responsibility or obligation based upon any information provided or made available, or statements made (including as disclosed in the Data Room) (ii) neither CSN nor Congonhas Minérios, Namisa or their Subsidiaries (if any), or any other Person, has made any representation or warranty, expressly or implicitly, about Congonhas Minérios, Namisa or their Subsidiaries (if any) or about the CSN Establishment, the Business or other questions not included in this Agreement. Without limiting the generality of the foregoing, neither CSN, nor Congonhas Minérios, Namisa or their Subsidiaries (if any), or any other Person, has made any representations or warranties to JKTC Parties with respect to any forecasts, estimates or budgets regarding CSN’s, Congonhas Minérios’, Namisa’ or their Subsidiaries’ business.

ARTICLE VIII                      

INDEMNIFICATION

8.1     Indemnification by CSN. Subject to the other terms and limitations set forth in this Agreement, CSN shall indemnify, defend, reimburse and hold harmless JKTC Parties, BJIOC SPC, Japanese SPC, JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Itochu Corporation, their Subsidiaries in Brazil, Congonhas Minérios and its Subsidiaries and their respective directors and officers (each such Person, a “JKTC Indemnified Party” and, collectively, the “JKTC Indemnified Parties”) from and against any and all Losses actually incurred by JKTC Indemnified Party resulting from (i) any breach, inaccuracy or omission of any representation or warranty made by CSN or Congonhas Minérios in this Agreement, after giving effect to the Bring Down Supplements, (ii) any breach or non-performance of any covenants or obligations of Congonhas Minérios (until the Date of the Merger) or CSN under this Agreement (iii) any Liability not identified in Exhibit I (as updated as of the Drop Down Date in accordance with Section 2.3(v)) or in the Schedules to Section 7.1 (as supplemented by the Bring Down Supplements) and claimed against any 

38

 

 

  

 

JKTC Indemnified Party; (iv) any Liability related to Congonhas Minérios Excluded Assets and claimed against any JKTC Indemnified Party; (v) any Liability related to Namisa Excluded Assets involving facts or events occurred after the Date of the Merger and claimed against any JKTC Indemnified Party. 

8.1.1        For the avoidance of doubt, non-material liabilities of the CSN Establishment not identified in the Schedules to the representations and warranties of Section 7.1 that are qualified by materiality shall: (i) be considered as transferred to Congonhas Minérios and (ii) not be subject to the indemnification obligation provided for in Section 8.1.

8.1.2        Notwithstanding Section 8.1(iii), the Tax Claims listed in Schedule 8.1.2, which are identified in the Schedules to Section 7.1 (i) will not be transferred to Congonhas Minérios upon the Drop Down and (ii) should not be deemed included in Exhibit I or in the Schedules to Section 7.1 for purposes of Section 8.1(iii).

8.1.2.1  The Tax Claims listed in Schedule 8.1.2.1 will be transferred to Congonhas Minérios upon the Drop Down, but they should not be deemed included in Exhibit I or in the Schedules to Section 7.1 for purposes of Section 8.1(iii). 

8.1.3        The Liabilities related to the Tax Claim 0003009-40.2010.4.02.5104 (2010.51.04.003009-2) (salário educação) shall be deemed as transferred to Congonhas Minérios upon the Drop Down only in relation to the portion of it that relates to employees of the CSN Iron Ore Division at the time and, therefore (i) Section 2.1.2 shall not apply and (ii) the portion of the Liability that has not been transferred should not be deemed included in Exhibit I or in the Schedules to Section 7.1 for purposes of Section 8.1(iii).

8.2     Indemnification by JKTC Parties. Subject to the other terms and limitations set forth in this Agreement, JKTC Parties shall indemnify, defend, reimburse and hold harmless CSN, its Subsidiaries and their respective members of the board of directors, officers and direct shareholders (each such Person, a “CSN Indemnified Party” and, collectively, the “CSN Indemnified Parties”) from and against any and all Losses actually incurred by any CSN Indemnified Party resulting from (i) any breach, inaccuracy or omission of any representation or warranty of JKTC Parties under this Agreement; and (ii) any breach or non-performance of any covenants or obligations of JKTC Parties under this Agreement. 

8.3     Indemnification by Congonhas Minérios. Subject to the other terms and limitations set forth in this Agreement, Congonhas Minérios shall indemnify, defend, reimburse and hold harmless the CSN Indemnified Parties from any Loss actually incurred resulting from: (i) Liabilities identified in Exhibit I (as updated as of the Drop Down Date in accordance with Section 2.3(v)) or in the Schedules to Section 7.1 (as supplemented by the Bring Down Supplements) or (ii) Liabilities of Congonhas Minérios arisen from acts or facts occurred after the Date of the Merger and claimed against any CSN Indemnified Party.

8.4     Provisional Decision. Neither JKTC Parties, Congonhas Minérios nor CSN shall be required to make any payments to CSN Indemnified Parties or JKTC Indemnified Parties, as the case may be, pursuant to this ARTICLE VIII with respect to indemnification obligations until (i) a final court decision not subject to appeal or arbitral decision (subject to no recourse or appeal) is issued or granted against Congonhas Minérios and its Subsidiaries, CSN Indemnified Parties or JKTC Indemnified Parties, as the case may be, regarding a third party Claim (except if any provisional court or arbitral decision which effects are not suspended, reversed or stayed requires Congonhas Minérios and its Subsidiaries, any CSN Indemnified Party or JKTC Indemnified Party to make any payment thereunder (“Provisional Decision”) or (ii) a final arbitral award is issued or granted against Congonhas Minérios, any of its Subsidiaries, any of the CSN Indemnified Parties or JKTC Indemnified Parties, as the case may be, regarding a direct dispute between CSN and JKTC Parties (except for a Provisional Decision) or (iii) CSN, JKTC Parties or Congonhas Minérios agree in writing that such 

39

 

 

  

 

indemnification is undisputed and due by either CSN, JKTC Parties or Congonhas Minérios, as applicable. The applicable CSN Indemnified Party or JKTC Indemnified Party shall be fully and promptly reimbursed for all costs incurred and payments made with respect to a Provisional Decision, if such Provisional Decision is reverted on behalf of the relevant CSN Indemnified Party or JKTC Indemnified Party.

8.5     Indemnification Amount. In case a Loss is incurred by Congonhas Minérios or any of its Subsidiaries and the indemnification is paid to the party that is indemnifiable under this Agreement, the amount to be indemnified to the party receiving indemnification under this agreement shall be equal to the amount of the Loss multiplied by the percentage of the capital stock of Congonhas Minérios held by the respective party or held indirectly in a Subsidiary, as applicable, in each case, immediately after giving effect to the transactions contemplated herein, except if the indemnification is paid to the company itself, in which case the amount shall be equal to 100% of such Loss; (b) in case a Loss is incurred directly by a party, then the amount to be indemnified under this Agreement shall be equal to 100% of the amount of the Loss incurred by such party.

8.5.1        The amount of any Loss to be indemnified pursuant to this ARTICLE VIII shall be net of any actual Tax benefit arising from the use of such Loss as a deductible expense, provided that there is taxable income in the same fiscal year of the incurred Loss against which such Tax benefit can be used. The amount of the Loss to be indemnified in cash shall also be increased to an amount which, after subtracting the applicable Taxes, leaves an amount equal to the indemnity payment that would have been due without any Taxes that, pursuant to applicable Law, arise from or in connection with the remittance and receipt of any indemnity payment under this Agreement by the Indemnified Party, considering the applicable rates.  

8.5.2        Loss of Profits. The Parties will only be liable for loss of profits under this ARTICLE VIII (i) suffered by Congonhas Minérios or any of its Subsidiaries; and (ii) when the loss of profits resulting from such breach has been finally determined. The responsibility for loss of profits shall be deemed to be finally determined when the Investors have so determined by mutual agreement or, if disputed, when a final decision in respect thereof has been rendered pursuant to Section 9.2.

8.6     Deposits or Guarantees. If under any Loss to be indemnified pursuant to this Agreement, Congonhas Minérios and its Subsidiaries, CSN Indemnified Parties or JKTC Indemnified Parties, as the case may be, is compelled to provide any type of guarantee or deposit in order to file an appeal or otherwise to present any defense in connection with an administrative proceeding or a lawsuit of any nature, the Indemnifying Party (as defined below) shall provide Congonhas Minérios, any of  its Subsidiaries, CSN Indemnified Parties or JKTC Indemnified Parties, as the case may be, with the means to provide such guarantee or deposit. 

8.7     Indemnification Procedure. Claims for indemnification under this Agreement shall be asserted and resolved as follows:

(i)            If a Claim by a third party is made against a CSN Indemnified Party or a JKTC Indemnified Party (any such Person, an “Indemnified Party”), and if such Indemnified Party intends to seek indemnity with respect thereto under this ARTICLE VIII, such Indemnified Party shall promptly furnish written notice of such Claim (in reasonable detail and including the factual basis for such Claim and, to the extent known, the amount thereof) to the party against whom indemnity is sought (such party, in such capacity, the “Indemnifying Party”). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, promptly after the Indemnified Party's receipt thereof, copies of all material notices and documents (including court papers) received or transmitted by the Indemnified Party relating to such Claim. The failure or delay of the Indemnified Party to deliver prompt written notice of a Claim shall not affect the indemnity obligations of the 

Indemnifying Party hereunder, except and only to the extent that, as a result of such failure, any Indemnifying Party that was entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially prejudiced as a result of such failure. The Indemnifying Party shall have five (5) Business Days after receipt of such notice to elect to undertake, conduct and control (through counsel of its own choosing and at its own expense, so long such counsel is approved by the other party, such approval not to be unreasonably delayed or withheld), and, in any event, shall have the right to participate (at its own expense) in, the settlement or defense of such Claim, and the Indemnified Party shall cooperate with it in connection therewith. If the Indemnifying Party elects to undertake, conduct and control the settlement or defense of such Claim, the Indemnifying Party shall permit the Indemnified Party to participate in such settlement or defense directly or through counsel chosen by such Indemnified Party (but the fees and expenses of such counsel shall be borne by such Indemnified Party). So long as the Indemnifying Party (at the Indemnifying Party's cost and expense) (i) has undertaken the defense of, and assumed full responsibility for all indemnified liabilities with respect to, such Claim, (ii) is reasonably contesting such Claim in good faith through appropriate proceedings and (iii) has taken such action (including the posting of a bond, deposit or other security) as may be necessary to prevent any action to foreclose a Lien against or attachment of the property and/or assets of the Indemnified Party or of Congonhas Minérios and its Subsidiaries, as the case may be, for payment of such Claim, the Indemnified Party shall not pay or settle any such Claim; provided, however, that, the Indemnified Party shall have the right to pay or settle any such Claim if it has waived in writing any right to indemnity by the Indemnifying Party for such Claim; and provided, further, that, if within five (5) Business Days after the receipt of the Indemnified Party's notice of a Claim of indemnity under this Section 8.7, the Indemnifying Party does not notify the Indemnified Party that it elects (at the Indemnifying Party's cost and expense) to undertake the defense thereof and assume full responsibility for all indemnified liabilities with respect thereto, or gives such notice and thereafter fails to contest such Claim in good faith or to prevent action to foreclose a Lien against or attachment of the Indemnified Party's property as contemplated above, the Indemnified Party shall have the right to contest, settle or compromise such Claim (at the Indemnifying Party’s costs and expenses) and the Indemnified Party shall not thereby waive any right to indemnity for such Claim under this Agreement. No Indemnifying Party shall consent to any settlement, compromise or discharge (including the consent to entry of any Judgment) of any such Claim without the Indemnified Party's prior written consent (which consent shall not be unreasonably withheld, delayed or conditioned); provided that, if the Indemnifying Party assumes the defense of any such Claim, the Indemnified Party shall agree to any settlement, compromise or discharge of such Claim which the Indemnifying Party may recommend and which by its terms obligates the Indemnifying Party to pay the full amount of Losses in connection with such Claim and definitely and unconditionally releases the Indemnified Party completely from all liability in connection with such Claim; provided, however, that the Indemnified Party may refuse to agree to any such settlement, compromise or discharge (a) that provides for injunctive or other nonmonetary relief affecting the Indemnified Party or (b) that, in the reasonable opinion of the Indemnified Party, would otherwise materially adversely affect the Indemnified Party. Whether or not the Indemnifying Party shall have assumed the defense of such Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise or discharge (including the consent to entry of any Judgment with respect to), any such Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, delayed or conditioned) unless the Indemnified Party has waived in writing any right to indemnity from the 

40

 

 

  

 

Indemnifying Party with respect to such Claim or otherwise provided herein, in which cases no such consent shall be required.

41

 

 

  

 

(ii)          Any Claim on account of Losses for which indemnification is provided under this Agreement which does not involve a Claim of a third party shall be asserted by prompt written notice (setting forth in reasonable detail the facts or circumstances that allegedly gave rise to such Claim and, to the extent known, the amount thereof) given by the Indemnified Party to the Indemnifying Party from whom such indemnification is sought. The failure or delay of the Indemnified Party to deliver prompt written notice of a Claim shall not affect the indemnity obligations of the Indemnifying Party hereunder, except and only to the extent that, as a result of such failure, any Indemnifying Party that was entitled to receive such notice was deprived of its right to recover any payment under its applicable insurance coverage or was otherwise materially prejudiced as a result of such failure.

(iii)        In the event of payment in full by an Indemnifying Party to any Indemnified Party in connection with any Claim (an “Indemnified Claim”), such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnified Party as to any events or circumstances in respect of which such Indemnified Party may have any right or Claim relating to such Indemnified Claim against any claimant or plaintiff asserting such Indemnified Claim or against any other Person. Such Indemnified Party shall cooperate with such Indemnifying Party in a reasonable manner and (at such Indemnifying Party's cost and expense) in prosecuting any subrogated right or Claim.

8.8     Survival and Time Limitation. Except as otherwise set forth herein, the terms and provisions of this Agreement, including the representations and warranties, shall survive the consummation of the Spin-off, the Merger and the Merger Sale of Shares contemplated in this Agreement. Any Claim by any JKTC Indemnified Party that CSN is liable to such JKTC Indemnified Party under the terms of this Agreement shall be brought against CSN until the 6th anniversary of the Date of the Merger, provided that such time limitation shall not apply to Section 8.1(iii) and to Section 8.3. Notwithstanding the foregoing, an indemnification Claim brought pursuant to this ARTICLE VIII before the expiry of such deadlines will not be precluded hereby if the Claim is initiated in writing prior to the expiration of the applicable survival period described in the preceding sentence. 

8.9     Further Indemnity Limitations. The amount of any Loss to be indemnified pursuant to this Agreement shall be reduced (i) to the extent any Indemnified Party actually receives any insurance proceeds with respect to such Loss, and (ii) to take into account any payment actually received by an Indemnified Party with respect to such Loss.

8.10 The Investors hereby agree that the conduction of the Due Diligence shall not, in any way, exempt or affect CSN’s indemnification obligation under Section 8.1(i).

ARTICLE IX   
APPLICABLE LAW AND DISPUTE RESOLUTION

9.1     Applicable Law. This Agreement and the rights and obligations of the Parties hereunder and the transactions contemplated herein shall be governed by, enforced and interpreted in accordance with the laws of the Federative Republic of Brazil. This Agreement shall be executed by all Parties in São Paulo, Brazil.

9.2     Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement (“Dispute”) shall be solved by arbitration, in accordance with the following provisions: 

 

42

 

 

  

 

9.2.1        The Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”) in force at the time of the request for arbitration.

9.2.2        The arbitration shall be conducted by 3 (three) arbitrators (“Arbitral Tribunal”), one nominated by the claimant, another one nominated by the respondent, and the two (2) party-appointed arbitrators shall designate a third arbitrator, who shall act as president of the Arbitral Tribunal, within 15 (fifteen) days after the confirmation of the later-appointed of these two arbitrators. In case there are multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and/or the multiple respondents, jointly, as the case may be, shall appoint one arbitrator. If any of the three arbitrators is not nominated within the time prescribed in the ICC Rules or above, such arbitrator shall be appointed by the Court of Arbitration of the International Chamber of Commerce (the "ICC Court").  

9.2.3        The arbitration shall be held in the City of São Paulo, State of São Paulo, Brazil, where the arbitral award shall be deemed rendered. The arbitration procedure shall be held in English and in accordance with Brazilian Law, but evidence may be produced by the parties in Portuguese without the need for translation. The Arbitral Tribunal shall not act as amiable compositeurs or decide the merits of the Dispute ex aequo et bono. 

9.2.4        The Parties elect the courts of the City of São Paulo, State of São Paulo, exclusively for granting interim or conservatory measures before the constitution of the Arbitral Tribunal. Even in instances where a provisional judicial relief has been sought or obtained, the merits of the Dispute shall always be decided by the Arbitral Tribunal. For the avoidance of doubt, among the remedies that may be ordered or awarded by the Arbitral Tribunal is the remedy of specific performance of contractual obligations.

9.2.5        Except for attorney’s fees, which shall be borne individually by each of the parties to the arbitration, all expenses, costs and legal fees shall be borne by one or all parties as determined by the Arbitral Tribunal. 

9.2.6        The Parties shall keep the confidentiality of each and every information concerning the arbitration.

9.2.7        If one or more Disputes arise under this Agreement or any other Transaction Document, then any or all such Disputes may be brought into a single arbitration. The ICC Court may, at the request of any of the parties, consolidate the arbitral proceeding with any other pending arbitral proceeding involving this Agreement and/or any other Transaction Document. If one or more arbitrations are already pending with respect to a Dispute under any such agreement, then any party to a new dispute or any subsequently filed arbitration brought under any such agreement may request that such new dispute or any subsequently filed arbitration be consolidated into any prior pending arbitration. 

9.2.8        The new dispute or subsequently filed arbitration shall be so consolidated, provided that the ICC Court determines that: (i) the new dispute or subsequently filed arbitration presents significant issues of law or fact common with those in the prior pending arbitration; (ii) no party to the new dispute or prior pending arbitration would be prejudiced; and (iii) the consolidation under these circumstances would not result in undue delay for the prior pending arbitration. 

9.2.9        The consolidation order shall be final and binding upon all the parties involved in the consolidated proceedings. The arbitrations shall be consolidated into the arbitration that commenced first. The Parties agree that upon such an order of consolidation, they will promptly dismiss any arbitration proceeding, the subject of which has been consolidated into another arbitral proceeding.

ARTICLE X      
GENERAL

 

43

 

 

  

 

10.1 Non-Assignability. Except as otherwise expressly provided in this Agreement, no Investor shall assign or transfer or otherwise dispose of to any third party all or any part of this Agreement or any of the rights or obligations to accrue hereunder, without the prior written consent of the other Investor.

10.2 Disclaimer of Agency. This Agreement shall not constitute either Investor as the legal representative or agent of the other Investor, nor shall any Investor have the right or authority to assume, create or incur any liability or obligation of any kind, express or implied, in the name of or on behalf of the other Investor.

10.3 Notice. Any notice by any of the parties of this Agreement shall be prepared and delivered in English and addressed as follows:

 

I.          Companhia Siderúrgica Nacional:

Avenida Brigadeiro Faria Lima, 3.400, 20th Floor

04538-132, São Paulo, SP, Brazil

Telephone: (55 11) 3049-7100

[*]

 

With copy to:

[*]

 

II.       BJIOC:

13th Floor, Itochu Bldg., 5-1, Kita-Aoyama, 

2chome, Minato-ku, Tokyo, 107-0061, Japan 

[*]

 

III.     POSCO:

POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, 

135-777, Korea 

[*]

 

IV.    China Steel Corporation:

88 Chenggong, 2nd Roard, Qianzhen, Kaohsiung 80661 

Taiwan, Republic of China 

 

44

 

 

  

 

[*]

 

V.      Congonhas Minérios S.A.:

Logradouro Casa de Pedra, without number, part

CEP 36.415-000, Congonhas/MG, Brazil

[*]

 

	

VI. Nacional Minérios S.A.:
	

With copy to:

	

 
	

Legal Department 

	

Logradouro Casa de Pedra, s/n, parte 

36.415-000, Congonhas, MG, Brasil
	

Rua Iguatemi, 192, 25o andar

   01451-010, São Paulo, SP, Brasil

	

[*]
	

[*]

	

 
	

 

 

10.3.1    Notices shall be deemed to have been delivered when sent with a return receipt or “aviso de recebimento” issued by the Empresa Brasileira de Correios e Telégrafos (Brazilian Official Post Office) to the above mentioned addresses or, in case of e-mail communication, when a confirmation of such transmission or confirmation receipt is obtained. The original version of documents sent via e-mail shall be sent to the above mentioned addresses no later than 2 (two) Business Days after such transmission.

10.3.2    Any Investor may change its address or telex or facsimile number for the purpose of this Section 10.3 by notice given to the other parties in the manner set forth above.

10.4 Non-Waiver. Any failure by any Party to enforce any provision of this Agreement shall not be considered as constituting a waiver of that Party’s right to enforce thereafter the same provision or other provisions hereof whether or not of similar character.

10.5 Confidentiality. Each of the Investors, Namisa and Congonhas Minérios shall maintain the confidentiality on the Confidential Information, except for any information which (i) at the time of disclosure, is public information, (ii) after disclosure, is published or otherwise becomes part of the public domain without any violation of this Agreement or the Transaction Documents by the Investors, (iii) is received by the disclosing Investor from a third party, provided that such third party, or any other party from whom such third party received such information, is not in breach of any confidentiality obligation in respect of such information. In the event that any Investor becomes legally obligated (whether by Law, court order or otherwise) to disclose any of the Confidential Information, such Investor shall (except for any announcements pursuant to Instrução CVM No. 358/02, as amended, in which case the relevant Investor may disclose such information as it deems to be required under such regulation) (a) immediately notify the other Investor of the existence, terms and circumstances in connection therewith, (b) cooperate with the other Investor, in the event that any Investor seeks a protective order or other appropriate remedy, (c) furnish only that portion of the Confidential Information which is legally required and (d) exercise its reasonable efforts to attempt that confidential treatment be accorded to the Confidential 

45

 

 

 

Information.
The Investors hereby acknowledge that each of them may disclose any
Confidential Information, to the extent necessary and permitted by Law, to any
of their respective direct or indirect shareholder, employee, executive officer
(director executivo), attorney, consultant, financial advisor,
accountant or other Representative thereof, in compliance with the provisions
of this Section10.5.

10.5.1   
The
obligation of confidentiality under this Section 10.5 above shall
survive the termination of this Agreement and shall be valid until August 10,
2022.

10.6 Severability.    
Should any provision of this Agreement or any other agreements entered into
between the Parties hereto in connection with this Agreement be or become
invalid or unenforceable under any applicable Law or violate any applicable
Law, the remainder of this Agreement or any of such other agreements shall be
valid and binding as if such provision were not included therein.

10.7 Titles and Subtitles. The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement. 

10.8 Schedules and Exhibits. All Schedules and Exhibits hereto that are referred
to herein are hereby made a part hereof and incorporated herein by such reference.
The specification of any Real or US Dollar amount in the representations and
warranties contained in this Agreement or the inclusion of any specific item in
the Schedules to Section 7.1 is not
intended to imply that such amounts (or higher or lower amounts) are or are not
material, and no Investor shall use the fact of the setting of such amounts or
the fact of the inclusion of any such item in the Schedules in any Claim,
dispute or controversy as to whether any obligation, item or matter not
described herein or included in a Schedule is or is not material for purposes
of this Agreement. No events, changes, circumstances, developments, effects or
states of facts occurred prior to the date hereof shall be added as updates in
the Schedules after the date hereof. The representations and warranties of CSN
in Section 7.1 that are
qualified by materiality shall only have the relevant Schedule supplemented by material
events, changes, circumstances, developments, effects or states of facts occurred
after the date hereof.

10.9 Conversion of Amounts. The conversion
of amounts in Brazilian reais into United States dollars (PTAX for “venda”),
and in United States dollars into Brazilian Reais (PTAX for “compra”),
for the purpose of complying with the obligations set forth under this
Agreement, shall use PTAX applicable at the close of the business of the day
that is 2 (two) Business Days prior to the relevant calculation or payment date
(as the case may be). If no PTAX value is available on such date, PTAX value
shall be replaced by the exchange rate freely practiced in the Brazilian
financial market. 

10.10                    
Effectiveness. This Agreement shall only become effective upon CSN ́s,
Namisa ́s, Congonhas Minérios ́ and POSCO’s board of directors approvals (“Board
Approvals”), which meetings shall take place on or before December 12, 2014,
being the date the last of those approvals is obtained hereinafter referred to
as “Date of Effectiveness”. In case any of the Board Approvals are not
obtained by December 12, 2014, this Agreement shall be automatically
terminated, without producing any effect. 

10.11                    
Amendments. This Agreement may be amended only with the written
consent of the Parties. 

10.12                    
Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. 

46

 

 

 

IN WITNESS WHEREOF, the
Parties hereto have caused their duly authorized representatives to affix their
respective signatures on this instrument the day and year first above written.

[signature pages follow] 

47

 

 

 

Signature page of the Investment Agreement entered
into by Companhia Siderúrgica Nacional, Brazil Japan Iron Ore Corporation,
POSCO, China Steel Corporation, Congonhas Minérios S.A. and Nacional Minérios
S.A.

 

 

Companhia Siderúrgica
Nacional

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
  _________________________

  By: 

  Title:

   

  

 

48

 

 

 

 

Signature page of the
Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios
S.A. and Nacional Minérios S.A.

 

 

Brazil Japan Iron Ore
Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
   

  

 

 

 

49

 

 

 

 

Signature page of the
Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios
S.A. and Nacional Minérios S.A.

 

 

POSCO

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
   

  

 

50

 

 

 

 

Signature page of the
Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios
S.A. and Nacional Minérios S.A.

 

 

China Steel
Corporation 

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
   

  

 

51

 

 

 

 

Signature page of the
Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios
S.A. and Nacional Minérios S.A.

 

 

Congonhas Minérios
S.A.

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
  _________________________

  By: 

  Title:

   

  

 

52

 

 

 

 

Signature page of the
Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios
S.A. and Nacional Minérios S.A.

 

 

Nacional Minérios
S.A.

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By: 

  Title:

   

  	
  _________________________

  By: 

  Title:

   

  

 

 

 

53

 

 

  

 

 

Signature page of the Investment Agreement entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron Ore Corporation, POSCO, China Steel Corporation, Congonhas Minérios S.A. and Nacional Minérios S.A.

 

 

Witnesses:

 

 

 

 

	

   1.________________________­­­­­­­­­­­

   Name: 

   ID Card:

    
	

   2.________________________

   Name:

   ID Card:

    

 

54

 

 

  

 

Exhibit II

List of dates which shall not be considered as a Business Day on 2015

 

(The Shareholders shall renew the list of dates which shall not be considered as a Business Day by exchanging the list of dates which shall not be considered as a Business Day in next year by no later than December 28th every year.) 

 

SÃO PAULO

 

	January 1st, 2015 - New Year’s Holiday (national holiday)

	January 25th, 2015 - Anniversary of the city of São Paulo (municipal holiday)

	February 17th, 2015 - Carnival (optional day off for workers, not an official holiday)

	February 18th, 2015 - Ash Wednesday (optional day off for workers, not an official holiday)

	April 3rd, 2015 - Good Friday (national holiday)

	April 21st, 2015 - Day of Tiradentes (national holiday)

	May 1st, 2015 - Labor Day (national holiday)

	June 04th, 2015 - Corpus Christi (national holiday)

	July 9th, 2015 - Constitutional Revolution of 1932 (state holiday)

	September 7th, 2015 - Independence of Brazil (national holiday)

	October 12th, 2015 - Day of the Patroness of Brazil (Nossa Senhora Aparecida) (national holiday)

	October 28th, 2015 - Day of Government Employees (optional day off for workers)

	November 2nd, 2015 - All Soul’s Day (national holiday)

	November 15th, 2015 - Proclamation of the Republic (national holiday)

	November 20th, 2015 - Day for Black Awareness (municipal holiday)

	December 25th, 2015 - Christmas (national holiday) 

 

 

NEW YORK

 

	January 1st - New Year's Holiday (national holiday)

	January 19th - Martin Luther King, Jr. Day (national holiday) 

	February 16th - Washington’s Birthday (national holiday)

	May 25th - Memorial Day (national holiday)

	July 4th - Independence Day (national holiday)

	September 7th - Labor Day (national holiday)

	October 12th - Columbus Day (national holiday) 

	November 11th - Veterans Day (national holiday)

	November 26th - Thanksgiving Day (national holiday) 

	December 25th - Christmas Day (national holiday) 

 

 

SEOUL

 

	Jan 1st - New Year's Day 

	Feb 18th - Seollal Holiday Day 1 

	Feb 19th - Thursday Seollal Holiday Day 2 

	Feb 20th - Seollal Holiday Day 3 

	Mar 1st - Independence Movement Day 

	May 1st - Labor Day 

	May 5th - Children's Day 

	May 25th - Buddha's Birthday 

	Jun 6th - Saturday Memorial Day 

	Aug 15th - Liberation Day 

	Sep 26th - Mid-Autumn Festival Day 1 

	Sep 27th - Mid-Autumn Festival Day 2 

	Sep 28th - Mid-Autumn Festival Day 3 

	Sep 29th - Mid-Autumn Festival Day 4 

	Oct 3rd - National Foundation Day 

	Oct 9th - Hangeul Proclamation Day 

	Dec 25th - Christmas Day 

TEXT_SP/9195554v1/7474/36

 

  

 

 

 

TOKYO

 

	Jan 1st - New Year’s Day 

	Jan 12th - Coming of Age Day 

	Feb 11th - Foundation Day 

	Apr 29th - Showa Day 

	May 4th - Greenery Day 

	May 5th - Children’s Day 

	May 6th - Constitution Memorial Day

	Jul 20th - Marine Day 

	Sep 21st - Respect-for-the-Aged Day 

	Sep 22nd - Holiday by Law 

	Sep 23rd - Autumnal Equinox Day 

	Oct 12th - Health and Sports Day 

	Nov 3rd - Culture Day 

	Nov 23rd - Labor Thanksgiving Day 

	Dec 23rd - The Emperor's Birthday 

 

 

 

TEXT_SP/9195554v1/7474/36

 

  

 

EXHIBIT III

Bylaws of the Company 

 

Congonhas Minérios S.A.

NIRE: 31.300.025.144

CNPJ: 08.902.291/0001-15

 

 

Bylaws

 

Article I

Company Name, Registered Office, Purpose, and Duration

 

Section 1.                Congonhas Minérios S.A. (“Company”) is a corporation (sociedade anônima) governed by these Bylaws and the applicable legislation.

 

Section 2.                The purpose of the Company is (i) the exploitation of iron ore mining activities, in any part of Brazil or abroad, comprising the development of mineral deposits, research, extraction, sale of iron ore and byproducts derived from mining activities, beneficiation, industrialization, transportation, logistics, loading, rendering of mining services, import and export of iron ore, as well as the exploitation of any other directly or indirectly related activities; (ii) the exploitation of port transportation infrastructure; (iii) generation of energy to the extent that its primary purpose is for the iron ore mining activities of the Company; and (iv) hold interests in other companies  as partner, shareholder, quotaholder, consortium member, or otherwise to the extent that such companies have the corporate purpose compatible with this one. 

 

Section 3.                The Company has its registered office in the city of Congonhas, State of Minas Gerais, and may, by resolution adopted by the Board of Officers, create, transfer, and close branches, agencies, warehouses, representation offices, and other establishments anywhere in Brazil or abroad. 

 

Section 4.                The Company has an indefinite term of duration.

 

Article II

Capital and Shares

 

Section 5.                The capital of the Company, which is fully subscribed for [and paid in], is of R$ [●], divided into [●] common shares, all registered and without par value.

 

§1.              Each common share carries the right to one (1) vote at General Meetings of shareholders.

 

Section 6.                The Company may issue, without amendment to these Bylaws, up to [●] additional common shares, by means of resolution of the Board of Directors, subject to the provisions of this Section 6. The Board of Directors shall establish the price, term and the conditions for each such issuance.

 

§1.              The authorized corporate capital may be achieved by means of one or more issuance of shares, at the Board of Directors’ sole discretion.

TEXT_SP  8915302v1  7474/36 

 

 

 

§2.             
Shareholders have preemptive rights to take up new shares or securities
convertible into shares, in proportion to the number of shares they own,
pursuant to article 171 of Law 6.404/76. 

 

Section 7.               
Any shareholder that fails to make payment for subscribed shares
on the terms and conditions set out in the subscription bulletin or the capital
call shall automatically be in default, and shall be subject to (i)
late-payment interest of 1% per month, counted from the first day of breach of
the payment obligation, with indexation of that amount at the most frequent
interval permitted by law; and (ii) a fine of 10% of the amount that has not
been paid up.

 

Article
III

General Meetings of Shareholders

(Assembleia Geral)

 

Section 8.               
A General Meeting
of shareholders shall be held, ordinarily, within the first four (4) months
following the end of the fiscal year, to consider the matters set out in
article 132 of Law 6,404/76 and, extraordinarily, when the Company’s interests,
these Bylaws, and/or the law requires. 

 

§1.             
Subject to the provisions of the sole paragraph of article 123 of
Law 6,404/76, General Meetings of shareholders shall be called by the Chairman
of the Board of Directors. Regardless of the formalities for calling
shareholders’ meetings, any meeting at which all shareholders are present shall
be deemed to have been regularly called.

 

§2.             
The General Meetings shall be chaired by the Chairman or, in his
or her absence or impediment, by any member of the Board of Directors appointed
by the Chairman or, in case the Chairman fails to do so, by any Board member
appointed by shareholders representing, at least, the majority of the voting
capital stock present at the General  Meeting of Shareholders. The secretary of
the General Meetings of Shareholders shall be appointed by the person chairing
the meeting.

 

§3.             
Shareholders may be represented at General Meetings of Shareholders
by proxies appointed in the manner provided for in article 126, paragraph 1 of
Law 6,404/76, and the instruments which formalize such proxies shall be
deposited in the Company’s headquarters at least twenty four (24) hours before
the time scheduled for the General Meetings of shareholders.

 

Section 9.               
Except when a
higher voting percentage is required by Law 6,404/76 or by a Shareholders’
Agreement, resolutions at General Shareholders’ Meetings shall be approved by
the affirmative vote of shareholders representing the majority of the shareholders
present at the meeting. In either case, blank votes shall not be computed.

 

Article
IV

Management

 

Section
I

 

General
provisions

 

Section 10.           
The Company shall
be managed by a Board of Directors (Conselho de Administração) and a Board
of Officers (Diretoria). The members of the Board of Directors and of the Board of Officers shall take office upon execution
of the respective terms of office in the relevant corporate book, remaining in
office until the earliest of (i) the expiration of his/her term (provided that
the Director or Officer will remain in office until the following elected
Director or Officer is duly empowered), (ii) removal by the shareholders or by
the Board of Directors, as applicable, as provided for in these By-laws or in  a
Shareholders Agreement or (iii) his or her death, disability, retirement,
resignation or removal.

TEXT_SP  8915302v1 
7474/36 

 

 

 

Section 11.           
The annual compensation to be paid to the members of
management shall be fixed by the shareholders in a General Meeting of shareholders,
in a global or individual amount, at the
General Meeting’s discretion. 

 

§1.             
When
the compensation is fixed as a global amount, the Board of Directors shall be
responsible for its allocation among its members and the members of the Board
of Officers.  

 

Section II

 

Board of Directors

(Conselho de Administração)

 

Section 12.           
The Board
of Directors is composed of up to seven (7) sitting members and a number of
alternates not exceeding the number of sitting members, who may or may not
reside in Brazil, and shall be elected by the shareholders in a General Meeting
of shareholders for a term of two (2) years, subject to any Shareholders’ Agreement.
Each Director shall have one vote in the meetings of the Board of Directors and
may serve an unlimited number of consecutive terms. 

 

Sole paragraph. At the first meeting of the Board of
Directors following the election of its members, the Board of Directors shall
appoint, by majority of votes, a Chairman of the Board of Directors from among
its members. The Chairman of the Board of Directors shall have the casting
vote.

 

Section 13.           
Any Director who
will be absent from a meeting may appoint, specifically and in writing, another
member of the Board of Directors to represent him in such meeting. 

 

Sole paragraph. If the position of a sitting member of
the Board of Directors becomes vacant (as a result of resignation, removal, disability
or any other event), the respective alternate shall automatically occupy the
vacant seat. In case of resignation,
replacement, permanent impairment or any other event that results in the
vacancy of the alternate seat, the respective replacement shall be nominated
pursuant to the Shareholders’ Agreement. If the majority of the positions on the Board of Directors
becomes vacant, a General Meeting of shareholders shall be called to hold a new
election. 

 

Section 14.           
The Board of Directors
shall meet ordinarily every three (3) months at times and locations to be
disclosed by its Chairman in the first month of every fiscal year. A reasonably
detailed agenda (including a description on the matters, amounts and
obligations involved) shall be supplied to each Director no less than twenty (20)
days in advance of each meeting, together with the support material and
documentation with respect to all agenda items, prepared both in Portuguese and
in English.

 

TEXT_SP  8915302v1 
7474/36 

 

 

§1.             
Extraordinarily, a special meeting may be convened by the Chairman
(at the request of any Director) or by any Director if the Chairman does not
respond to a Directors request within five (5) days and on the basis that the
subject matter of the meeting is material to the Company and cannot wait for
resolution at the next regularly scheduled meeting, by means of,  a  twenty (20)
days prior written notice (or such shorter period consented to by all of the
Directors) sent by mail, e-mail or other means of communication under which
receipt may be acknowledged, containing the agenda for the meeting (including a
description on the matters, amounts and obligations involved), times and
location of the meeting. If the Chairman of the Board of Directors does not
respond to the Director’s request within five (5) days, the Director may call a
special meeting himself.

 

§2.             
The quorum for holding meetings of the Board of Directors is the
presence of a majority of the members then in office and shall observe the
conditions provided in the Shareholders’ Agreement. Any Director who (i) is
represented by his alternate or by another Director in the manner contemplated
in Section 13 above; or (ii) participates in the meeting by conference call, videoconference,
or other means of communication that ensures the genuineness of the vote or
opinion of such Director, shall be deemed to be present at the meeting,
provided that (a) a copy of the minutes of the meeting is signed and returned
via e-mail by all the Directors to the Chairman of the Board of Directors within
2 Business Days from the date of the meeting and (b) the minutes of such meeting
on the Company ́s corporate book is signed as soon as practicable.

 

§3.             
The meetings shall be conducted in English, or in Portuguese with
simultaneous translation into English

 

§4.             
Except when a higher voting percentage is required by Law 6,404/76
or by any Shareholders Agreement, resolutions at Board of Directors ́ Meetings
shall be approved by the affirmative vote of the majority of the Directors
present at the meeting. In either case, blank votes shall not be computed. No
resolution of the Board of Directors may be passed or discussed in respect of
any matter not included in the agenda, unless all Directors are present and in
unanimous agreement. 

 

Section 15.           
The Board of
Directors may create strategic, consulting or executive committees, permanent
or not, to analyze and give opinions on matters required by the Board of
Directors. The members of such committees shall have expertise in the areas to
be discussed by their committees, being elected by the Board of Directors.

 

Section 16.           
In addition to the
matters provided for in Law 6,404/76 and these By-laws, the performance of the
following acts and conclusion of the following operations by the Company shall
be conditioned upon the prior approval of the Board of Directors in a meeting
specially called for this purpose:

 

(i)           
to
establish the general policy for the businesses of the Company, its
wholly-owned subsidiaries and controlled companies;

 

(ii)         
to
approve the pluriannual budgets, expansion projects and investment programs,
and to follow up on execution and performance thereof;

 

(iii)       
to
decide on capital increases within the limits of authorized capital;

 

TEXT_SP  8915302v1 
7474/36 

 

(iv)       
to
authorize trading by the Company of its own shares for maintenance in treasury
for subsequent sale or cancellation;

 

(v)         
to
establish the terms and other conditions for the placement of debentures,
including those convertible to shares, specifying the limit of the capital
increase resulting from the conversion of the debentures and the type and class
of shares to be issued, as well as determining the conditions stated in items
VI to VIII of article 59 of Law 6,404/76 and the opportunity for issuance in
other cases;

 

(vi)       
to
decide on the issuance by the Company of commercial papers, bonds, notes, and
other securities intended to raise funds through primary or secondary
distribution on the domestic or international capital markets;

 

(vii)     
to
establish criteria for the following acts by the Board of Officers,
independently of prior authorization by the Board of Directors;

 

(a)     
acquisition,
disposal and encumbrance of any permanent asset;

 

(b)    
conduction
of any legal business by the Company, including financing and loans, including
companies directly or indirectly controlled by the Company;

 

(c)     
the
constitution of any type of guarantee or encumbrance on any asset that is not
part of the Company’s permanent assets, including for the benefit or in favor
of third parties as long as the party is a subsidiary entity, subsidiary or
affiliate of the Company;

 

(viii)   
to
decide on the operation or action constituting a transfer of the Company's
funds to others, including employee associations, recreational assistance
entities, pension funds, foundations and public corporations;

 

(ix)       
to
resolve on any acts involving transformation, consolidation, spin-off, merger
or liquidation of companies in which the Company has corporate holding;

 

(x)         
to
decide on the establishment of subsidiaries by the Company and on the
acquisition of shares, as well as on the Company's representation at the
General Meetings and meetings of partners and on matters submitted to said
meetings;

 

(xi)       
to
establish policies for taking up tax incentives;

 

(xii)     
to
establish the compensation, determine the duties, and approve the operational
rules for any other committees that may be created;

 

(xiii)   
to
take any material decision involving (a) the mining rights, existing or future,
pertaining to the Company (including the assignment of such rights), (b)
pelletization plants and (c) any material real estate assets of the Company;

 

(xiv)   
the
entering into any material amendment to material agreements involving MRS or
TECAR;

 

TEXT_SP  8915302v1 
7474/36 

 

 

(xv)     
to
settle any dispute or legal action of which the Company and/or those controlled
by the Company are parties of and involve an amount higher than [*];

 

(xvi)   
to
resolve any omissions and perform other legal duties and prerogatives that do
not conflict with those established in these bylaws, by law or in a
Shareholders’ Agreement;

 

(xvii) 
to
resolve on any matters that go beyond the authority established for the Board
of Officers.

 

Section III

 

Board of Officers

(Diretoria)

 

Section 17.           
The Board of
Officers shall be composed of at least two (2) and no more than [●] Officers,
all resident in Brazil, eligible for the position according to the applicable
Law and with expertise in the related area, provided that one (1) member shall
be the Chief Executive Officer and one (1) member shall be the [·].

 

§1.             
The
members of the Board of Officers shall hold office for a term of two (2) years
and may serve an unlimited number of consecutive terms, provided that their
terms shall be extendable until their respective substitutes are elected. 

 

§2.             
If a position in the Board of Officers becomes vacant (as a result
of resignation, replacement, permanent impairment or any other event), the
Board of Directors shall appoint the substitute, pursuant to any Shareholders’ Agreement.

 

Section 18.           
The Officers are
responsible for conducting the day-to-day management activities and operations
of the Company, and shall exercise the powers conferred on them by the General
Meeting of shareholders, the Board of Directors and these Bylaws to carry out
the actions required for the proper operation of the Company. 

 

Section 19.           
The Chief Executive Officer
shall have the following attributions:

 

(i)                
be the chairman of the Board of
Officers’ meetings;

(ii)              
exercise the executive office of
the Company, coordinating and monitoring the activity of the other members of
the Board of Officers, including with regards to the compliance of such Officers
with the terms and conditions set forth by the Board of Directors and the
General Meeting of shareholders;

(iii)            
organize, coordinate and monitor
the activities of the areas that are directly subordinated to it;

(iv)            
assign to the members of the Board
of Officers any activities or special tasks, notwithstanding those that are
ordinarily within their powers, subject to the ratification by the Board of
Directors; and

(v)              
keep each member of the Board of
Directors duly informed of the activities of the Company.

 

Section 20.           
[·]  shall have the following attributions: [·] 

 

TEXT_SP  8915302v1 
7474/36 

 

 

Section
21.           
Subject to the
exceptions provided for in these Bylaws, any act or legal transaction that may
result in liability or obligation to third parties on the Company’s part, or in
the release of liability or obligation owed by third parties to the Company,
must be signed by (i) two Officers acting jointly; (ii) one Officer acting
jointly with an attorney-in-fact appointed in accordance with §2 below; or
(iii) two attorneys-in-fact appointed jointly in accordance with §2 below.

 

§1.             
The Company may be represented by a single Officer in the
following cases: (i) in dealings with federal, state, or municipal authorities,
departments, or state-owned or mixed economy companies, including the Board of
Trade, Labor Courts, INSS, FGTS and the corresponding collecting banks; (ii) before
public entities that do not result in liability or obligation to third parties
on the Company’s part, (iii) in endorsing instruments for purposes of
collection or deposit in favor of the Company or to uphold the Company’s rights
in any administrative proceedings of any nature, as well as for the fulfillment
of any tax, labor or social security obligation; (iv) in the endorsement of
titles for purposes of collecting payment or deposits in bank accounts held by
the Company; (v) in representing the Company in General Meetings of
shareholders or quotaholders or equivalent meeting of other companies,
consortiums or entities in which the Company holds interest; (vi) in receiving
judicial notifications and citations, and, whenever the Company has been properly
summoned, in giving testimony before the courts, through the Chief Executive
Officer or other Officer designated by the Board of Directors for that purpose,
without power to confess; and (vii) in signing simple routine correspondence
and acts. 

 

§2.             
The Company, acting through two of its Officers, may appoint
attorneys-in-fact, by instrument specifying the purpose of the appointment, the
powers granted, and the term of the appointment, which may not exceed one (1)
year, except in the case of powers conferred ad judicia or to defend the
Company’s interests in administrative proceedings, which may have an indefinite
term.

 

Section 22.           
The Board of
Officers shall meet whenever convened by the Chief Executive Officer or any two
(2) Officers, and its decisions shall be taken by a simple majority of votes,
provided that a quorum is present of at least a majority of the elected
members. In the event of draw, the matter to be resolved shall be submitted to
the Board of Directors.

 

Sole paragraph. All resolutions by the Board of Officers
shall be set out in minutes drawn up in the book of minutes of meetings of the Board
of Officers and signed by the Officers present of the meeting, provided that
copies of such minutes will be made available to the members of the Board of
Directors upon request.

 

Section 23.           
The Officers are
expressly prohibited from performing, in the Company’s name, any act related to
business or transactions that are foreign to the Company’s purposes.

 

Article V

Fiscal Council

 

Section 24.           
The Company shall have a Fiscal
Council, which shall not function on a permanent basis. When installed, the
Fiscal Council shall be composed of three sitting and three alternate members
appointed by the General Meeting of shareholders, who shall fix their compensation.

 

TEXT_SP  8915302v1 
7474/36 

 

 

Sole paragraph.
Each term of the Fiscal Council shall end in the first General Meeting of
shareholders held after its installation. 

 

Article VI

Shareholders’ Agreements

 

Section 25.           
The Company shall observe
all the terms of any shareholders agreements filed at its headquarters (the “Shareholders’
Agreement”). The Company’s management shall refrain from registering
transfers of shares made contrary to the provisions of such shareholders’
agreements, and the chairmen of General Meetings of shareholders and of
meetings of the Board of Directors shall refrain from computing votes cast
contrary to such agreements, and take the other measures contemplated in
article 118, paragraphs 8 and 9 of Law 6,404/76. In case of any conflict
between this Bylaws and a Shareholders’ Agreement, the provisions of the
Shareholders’ Agreement shall prevail.

 

Article VII

Fiscal Year, Balance Sheets and Profits

 

Section 26.           
The fiscal year
begins on January 1st and ends on December 31st of each
year. At the end of each fiscal year, the financial statements required under
applicable law shall be drawn up on the basis of the Company’s commercial
accounting records, after appreciation by the Board of Directors.

 

Section 27.           
Of the annual
accounting net profit adjusted in accordance with article 202 of Law 6,404/76
(“Adjusted Net Profit”):

 

(a)               
a minimum mandatory dividend
equivalent to [*] of the Adjusted Net Profit shall be paid to the shareholders;

 

(b)              
an additional dividend equivalent
to [*] of the Adjusted Net Profit shall
be paid to the shareholders, except to the extent this amount is retained to
fund a capital budget (orçamento de capital);

 

(c)               
the balance not allocated to a
capital budget shall be allocated to a statutory reserve for operations,
projects and investments [with the objective of [●] (“Investment
Reserve”), unless otherwise approved by the shareholders, provided that in
no event (i) such amount exceeds [*] of the
Adjusted Net Profit and (ii) such statutory reserve exceeds [*] of the
company ́s stock capital; and

 

(d)              
any remaining amount not allocated
in accordance with this section shall be distributed to the shareholders as an
additional dividend or interest on net equity (juros sobre o capital próprio).

 

§1.             
Dividends that are not claimed within three years from the date of
publication of the act that authorized their distribution shall revert to the
Company.

 

§2.             
In case the cash available for the distribution of dividends is
not sufficient for full payment of such dividends in any given fiscal year, the
unpaid portion of such applicable dividends shall be allocated to the
unrealized profit reserve (reserva de lucros a realizar) and distributed as dividends to shareholders as soon as the
Company finally realizes such profit, in accordance with Law 6.404/76.

TEXT_SP  8915302v1 
7474/36 

 

 

 

Section 28.           
The Board of
Directors may approve that balance sheets for half-years, quarters, or for
shorter periods are drawn-up and declare dividends or interest on net equity (juros
sobre o capital próprio) from the profit shown on such balance sheets,
subject to the limits imposed by law, and may declare interim dividends from
accumulated profits or profit reserves. Dividends and interest on net equity (juros
sobre o capital próprio) so declared shall constitute an advance on the
mandatory dividend.

 

Section 29.           
By resolution
adopted by the Board of Directors, the Company may credit or pay to
shareholders interest on net equity (juros sobre o capital próprio), in
the manner provided for by applicable law.

 

Article VIII

Dissolution, Liquidation, and Transformation

 

Section 30.           
The Company will enter into
dissolution, liquidation and extinction in the cases provided for by law, or by
resolution adopted by the shareholders in a General Meeting.

 

§1.             
The manner of liquidation shall be determined by the shareholders
at a General Meeting, at which an Audit Committee shall be elected to operate
during the period of liquidation.

 

§2.             
The shareholders in a General Meeting shall appoint the
liquidator, fix his compensation, and establish the directives for his work.

 

Section 31.           
The Company may change its
form of organization into any type provided for by law, by resolution approved
by a majority of votes at a General Meetings of shareholders. 

 

Article IX

Miscellaneous; Dispute Resolution

 

Section 32.           
Any dispute, controversy or
claim arising out of or relating to these Bylaws and/or to any document
executed by any of the shareholders and/or by the Company ("Dispute")
shall be solved by arbitration, in accordance with the following provisions: 

 

§1.             
The Dispute
shall be finally settled under the Rules of Arbitration of the International
Chamber of Commerce (the "ICC Rules") in force at the time of
the request for arbitration.

 

§2.             
The arbitration
shall be conducted by 3 (three) arbitrators (“Arbitral Tribunal”), one
nominated by the claimant, another one nominated by the respondent, and the two
(2) party-appointed arbitrators shall designate a third arbitrator, who shall
act as president of the Arbitral Tribunal, within 15 (fifteen) days after the
confirmation of the later-appointed of these two arbitrators. In case there are
multiple parties, whether as claimant or as respondent, the multiple claimants,
jointly, and/or the multiple respondents, jointly, as the case may be, shall
appoint one arbitrator.  If any of the three arbitrators is not nominated
within the time prescribed in the ICC Rules or above, such arbitrator shall be
appointed by the Court of Arbitration of the International Chamber of Commerce
(the “ICC Court”).  

 

TEXT_SP  8915302v1 
7474/36 

 

  

 

§3.              The arbitration shall be held in the City of São Paulo, Brazil, where the arbitral award shall be deemed rendered. The arbitration procedure shall be held in English and in accordance with Brazilian Law, but evidence may be produced by the parties in Portuguese without the need for translation. The Arbitral Tribunal shall not act as amiable compositeurs or decide the merits of the Dispute ex aequo et bono.

 

§4.              The Parties elect the courts of the City of São Paulo, State of São Paulo, exclusively for granting interim or conservatory measures before the constitution of the Arbitral Tribunal. Even in instances where a provisional judicial relief has been sought or obtained, the merits of the Dispute shall always be decided by the Arbitral Tribunal. For the avoidance of doubt, among the remedies that may be ordered or awarded by the Arbitral Tribunal is the remedy of specific performance of contractual obligations.

 

§5.              Except for attorney’s fees, which shall be borne individually by each of the parties to the arbitration, all expenses, costs and legal fees shall be borne by one or all parties as determined by the Arbitral Tribunal. 

 

§6.              The parties shall keep the confidentiality of each and every information concerning the arbitration.

 

§7.              If one or more Disputes arise under these Bylaws and/or to any document executed by any of the shareholders and/or by the Company, then any or all such Disputes may be brought into a single arbitration. The ICC Court may, at the request of any of the parties, consolidate the arbitral proceeding with any other pending arbitral proceeding involving this Bylaws and/or any other document executed by any of the shareholders and/or by the Company. If one or more arbitrations are already pending with respect to a Dispute under any such agreement, then any party to a new dispute or any subsequently filed arbitration brought under any such document may request that such new dispute or any subsequently filed arbitration be consolidated into any prior pending arbitration.

 

§8.              The new dispute or subsequently filed arbitration shall be so consolidated, provided that the ICC Court determines that: (i) the new dispute or subsequently filed arbitration presents significant issues of law or fact common with those in the prior pending arbitration; (ii) no party to the new dispute or prior pending arbitration would be prejudiced; and (iii) consolidation under these circumstances would not result in undue delay for the prior pending arbitration.  

 

§9.              The consolidation order shall be final and binding upon all the parties involved in the consolidated proceedings. The arbitrations shall be consolidated into the arbitration that commenced first. Upon such an order of consolidation, the parties will promptly dismiss any arbitration proceeding, the subject of which has been consolidated into another arbitral proceeding.

 

 

TEXT_SP  8915302v1  7474/36 

 

  

 

 

Exhibit IV to the Investment Agreement

 

 

 

SHAREHOLDERS’ AGREEMENT

 

 

By and among 

 

 

 

COMPANHIA SIDERÚRGICA NACIONAL

 

 

 

[BJIOC SPC]

 

 

 

                                                                POSCO                                                                 

 

and

 

 

CHINA STEEL CORPORATION – TAIWAN

 

 

 

 

 

And, as Intervening and Consenting Party,

 

 

 

 

CONGONHAS MINÉRIOS S.A. 

 

 

Table of Contents

 

SHAREHOLDERS’ AGREEMENT 

RECITALS 

 

Article 1. DEFINITIONS . 40

Article 2. BASIC PRINCIPLES . 48

Article 3. CAPITAL STOCK .. 48

Article 4. BOUND SHARES . 50

Article 5. MANAGEMENT . 50

Article 6. EXERCISE OF VOTING RIGHTS
AND PRIOR MEETINGS..............................  53

Article 7. INFORMATION RIGHTS . 58

Article 8. OWNERSHIP OF MATERIAL ASSETS . 59

Article 9.
MASTER PLAN, OPERATING BUDGET AND COMPANY’S BUDGET . 60

Article 10.
DIVIDEND POLICY .. 60

Article 11. ANTIDILUTION .. 61

Article 12.
RIGHT OF FIRST REFUSAL .. 62

Article 13. RIGHT OF FAIR OFFER .. 62

Article 14. RIGHT OF FAIR OFFER – REAL
ESTATE .. 63

Article 15. TAG ALONG RIGHTS . 64

Article 16. CO-SALE RIGHT . 64

Article 17. INITIAL PUBLIC OFFERING –
IPO AND RELATED MATTERS . 64

Article 18.
TERM OF EFFECTIVENESS . 65

Article 19.
NOTICES . 66

Article 20. INDEMNIFICATION .. 67

Article 21.
GOVERNING LAW AND DISPUTES RESOLUTION .. 67

Article 22. MISCELLANEOUS . 69

 

TEXT_SP  9294504v1 
7474/36 39

 

 

  

 

 

SHAREHOLDERS’ AGREEMENT

            

This Shareholders’ Agreement (“Agreement”) is made as of [·], by and among Companhia Siderúrgica Nacional, a company duly organized and existing under the Laws of the Federative Republic of Brazil, with head offices in the city of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima No. 3400, 20th floor, enrolled with the Federal Taxpayer's Registry (CNPJ) under No. 33.042.730/0001-04, herein represented in accordance with its by-laws (“CSN”); [BJIOC Vehicle in Brazil], a company duly organized and existing under the Laws of the Federative Republic of Brazil, with head offices located at [·], enrolled with the Federal Taxpayer's Registry (CNPJ) under No. [·], herein represented in accordance with its by-laws (“BJIOC SPC”)1; POSCO, a company duly organized and existing under the Laws of Korea, having its registered office at POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, 135-777, Korea, herein represented in accordance with its by-laws (“POSCO”); and China Steel Corporation – Taiwan, a corporation duly organized and existing under the Laws of Republic of China, with head offices located at 88 Chenggong 2nd Roard, Qianzhen, Kaohsiung 80661, Taiwan, Republic of China, herein represented in accordance with its by-laws (“CSC”) (BJIOC SPC, POSCO and CSC are individually referred to as “JKTC Party” and collectively referred to as “JKTC Parties” or “JKTC”); and, as intervening and consenting party, Congonhas Minérios S.A., company duly organized and existing under the Laws of the Federative Republic of Brazil with headquarters in the Municipality of Congonhas, State of Minas Gerais, at Estrada Casa de Pedra, without number, part, zip-code 36.415-000, enrolled with the Federal Taxpayer's Registry (CNPJ) under No. 08.902.291/0001-15 (“Company” or “Congonhas Minérios”);

(CSN and JKTC Parties are collectively referred to as the “Shareholders” and individually as a “Shareholder”)

(The Shareholders and the Company are hereinafter collectively referred to as “Parties”, and individually as “Party”)

RECITALS

A.     The Shareholders own shares representing one hundred percent (100%) of the total capital stock of the Company; 

B.     The Shareholders wish to agree upon the principles, procedures and rules which shall govern their relationship as shareholders of the Company.

Article 1.
DEFINITIONS

1.1.       For the purposes of this Agreement, the following terms and expressions shall have the following meanings:

“Accounting Firm” shall have the meaning ascribed to it in Section 7.1.2.

1 Information on BJIOC SPC to be included on the Date of the Merger.

TEXT_SP  9294504v1  7474/36 40

 

 

 

“Additional Terms” shall have the meaning
ascribed to it in Section 18.1.1.

“Adjusted
Net Profit” shall have the meaning ascribed to it in Section 10.1.

“Affiliate”
means, in relation to a Person, any Person or Persons directly or indirectly
Controlling, Controlled by or under common Control with such Person.

“ANTAQ”
means the National Agency for Water Transportation (Agência
Nacional de Transportes Aquaviários).

“Agreement”
shall have the meaning ascribed to it in the preamble. 

“Arbitral
Tribunal” shall have the meaning ascribed to it in Section 21.2.2.

“BJIOC”
means Brazil Japan Iron Ore Corporation, a company duly organized and existing
under the Laws of Japan, with its head offices located at 13th Floor, Itochu
Bldg, 5-1, Kita-Aoyama, 2cho-me, Minato-ku, Tokyo, 107-0061, Japan. 

“BJIOC SPC”
shall have the meaning ascribed to it in the preamble.

“Board of
Directors” shall have the meaning ascribed to it in Section 5.1.

“Board of
Officers” shall have the meaning ascribed to it in Section 5.4.

“Bound
Shares” shall have the meaning ascribed to it in Section 4.1.

“Brazilian Civil Code” means Law No. 10.406 of January 10, 2002,
as amended.

“Brazilian
Corporate Law” means Law No. 6404 of December 15, 1976, as amended.

“Business”
means the exploitation of iron ore mining activities and associated port
transportation infrastructure, in any part of Brazil or abroad, comprising the
development of mineral deposits, research, extraction, sale of iron ore and
byproducts derived from mining activities, beneficiation, industrialization,
transportation (including transportation rendered by third parties), loading,
rendering of mining services, import and export of iron ore, as well as the
exploitation of any other directly or indirectly related activities, such as
the purchase of iron ore and the participation in the corporate capital of
other Brazilian and/or foreign companies with corporate purpose compatible with
the Company.

“Business
Day” means any day other than a: (a) Saturday, (b) Sunday, (c) a legal
holiday (i) in the city of Tokyo, Japan, or (ii) in the city of São Paulo, State of São Paulo, Brazil, or
(iii) in the city of New York, United Sates of America, or (iv) in the city of
Seoul, South Korea (for the avoidance of doubt, Schedule I hereto lists
all such legal holidays), or (d) a day on which banking institutions in the cities of Tokyo,
São Paulo, New York or Seoul are authorized by Law or order to close. 

“By-Laws” shall have the meaning ascribed to it in Section 2.3
hereof.

“CdP
Material Assets” means (i) the assets and rights related to the Casa de
Pedra mine with [*] (ii) the CdP Mining Rights; (iii) the rights over the real properties
and plants related to the exploration, exploitation and operation of the Casa
de Pedra mine; and (iv) the connections to MRS railways.

TEXT_SP  9294504v1 
7474/36 41

 

 

 

“CdP Mining Rights” means the rights held by CSN under the
administrative processes ongoing before the DNPM under Nos. [*] and [*].

“Chairman” shall have the meaning ascribed to it in Section 5.2.2.

“Claim"
means any action, judicial, administrative or arbitration proceeding, lawsuit,
order, judicial or extrajudicial notice, assessment notice, inspections,
investigation, default or violation notice, collection notice, procedure,
judicial or administrative investigation, presented or brought forward against
any Shareholder or the Company.

“Company”
shall have the meaning ascribed to it in
the preamble.

“Confidential
Information” shall have the meaning ascribed to it in Section 22.10.

“Control” (including, with correlative meanings, the terms “Controlling”,
“Controlled” and “under common Control with”), as used with respect to any Person or group
of Persons, means the direct or indirect possession of the right to cast the majority of the votes on the
resolutions adopted by the shareholders’ or quotaholders’ meetings and to appoint the majority of the members
of the management and the effective use of such powers to direct or cause the
direction of the management and policies of a corporation, limited liability
company, partnership, association, fund or other business entity, whether
through ownership of voting securities, by contract or otherwise.

“Co-Sale
Right” shall have the meaning
ascribed to it in Section 16.1.

“CPI”
shall have the meaning ascribed to it in Section
6.3.1.

“CSC”
shall have the meaning ascribed to it in
the preamble. 

“CSN”
shall have the meaning ascribed to it in
the preamble.

“CSN
Off-Take Agreement” shall have the meaning ascribed to it in the Investment
Agreement. 

“Directors”
shall have the meaning ascribed to it in Section
5.2.

“Dispute” shall have the meaning ascribed to it in Section 21.2.

“Equity Securities” means any and all shares of
capital stock, securities convertible into, or exchangeable or exercisable for,
such shares, and options, warrants or other rights to acquire such shares
(including preemptive rights for subscription) and any securities that
represent the right to receive such
shares, securities or options, warrants or other rights.

“Expansion Property Rights” shall have the
meaning ascribed to it in Section 14.1.

“Fair
Market Value” shall have the meaning
ascribed to it in Section 6.6.2.

“Fair
Offer Price” shall have the meaning
ascribed to it in Section 13.2.

“Fair
Offer Price – Real Estate” shall have
the meaning ascribed to it in Section 14.2.

“Funding
Plan” means the funding plan necessary for the Company to implement the
Master Plan.

TEXT_SP  9294504v1 
7474/36 42

 

 

 

“GAAP” means
generally accepted accounting principles applicable in the country for which
any particular financial statements of a company are prepared, as in effect as
at the time such financial statements are prepared.

“Governmental
Authority” means any Brazilian or foreign government and any national,
state, provincial, county, municipal, local or other governmental unit and any
governmental agency, bureau, court, tribunal, commission, authority, judicial
or arbitral body, as applicable, including the Brazilian governmental
authorities such as CADE, the Chinese antitrust authorities and the antitrust
authorities from other jurisdictions, as applicable, the Brazilian federal and
state environmental authorities, real estate registries and any other public
registries.

“ICC
Court” shall have the meaning
ascribed to it in Section 21.2.2.

“ICC
Rules” shall have the meaning
ascribed to it in Section 21.2.1.

“IFRS” means the International Financial
Reporting Standards, which is the set of accounting standards developed by the
International Accounting Standards Board (IASB), pursuant to which any
particular financial statements of a company are prepared, as in effect at the
time such financial statements are prepared.

“Independent
Director” shall have the meaning
ascribed to it in Section 5.2(ii).

“Initial
Master Plan” means the Master Plan for the initial 5 (five) years from the
date of this Agreement.

“Initial
Term” shall have the meaning ascribed to it in Section 18.1.

“Investment
Agreement” means the Investment Agreement entered into by and among CSN, BJIOC,
POSCO, CSC, the Company and Nacional Minérios S.A. on November 21, 2014. 

“IPO” means an initial public offering of
common shares and/or preferred shares and/or of any other securities
representing or backed by common shares and/or preferred shares, including
units, of the Company.

“IPO Notice” shall have the meaning ascribed to
it in Section 17.3.

“IPO Vehicle” shall have
the meaning ascribed to it in Section 17.2.

“Japanese SPC” shall be
a Japanese company to be incorporated by BJIOC.

“JKTC
Floor” shall have the meaning ascribed to it in Section 18.1.

“JKTC
Minimum Rights” shall have the meaning ascribed to it in Section 6.6.

“JKTC
Parties” and “JKTC Party” shall have the meaning set forth in the
preamble of this Agreement.

“Key Management Personnel” means those individuals having
authority and responsibility for planning, directing or controlling the activities
of CSN or of an Affiliate of CSN, directly or indirectly, including any officer
or Director (whether statutory or otherwise) of those entities.

“Law” shall mean any foreign or domestic statute, law,
ordinance, rule or regulation.

TEXT_SP  9294504v1 
7474/36 43

 

 

 

“Lien” means any lien (gravame),
pledge (penhor), encumbrance, usufruct, security interest (any direito
real de garantia including alienação fiduciária), assignment
of rights (cessão fiduciária), charge, Claim, mortgage, deed of trust,
option, call, warrant, purchase right, lease, priority rights, preemptive
rights, rights of first refusal, purchase preference rights, commitments,
rights of conversion, rights to exchange, transfer restrictions of any nature,
or other agreements or commitments, of any nature, providing for the purchase,
issuance or sale of securities, voting trusts, stockholder agreements, proxies
or other agreements or understandings in effect with respect to any rights
attributable to securities, or any other encumbrance whatsoever.

“Liquidity
Event” shall have the meaning
ascribed to it in the Investment Agreement.

“Losses” means
any and all liabilities, losses, damages, fines, penalties, condemnations,
costs and expenses, including reasonable attorneys’ fees, court costs and other
costs in connection with a Person’s defense in any Claim, in each case actually
incurred, including loss of profits (lucros cessantes), subject to the
provisions of Sections 8.3.1 and 20.3, but excluding moral damages (danos morais) and
indirect damages (danos indiretos).

“Major Decision”
shall have the meaning ascribed to it in Section
6.3.

“Master Plan” means the
business plan for the operation of the Company, which shall necessarily
include: (i) the production plan and product mix for each plant, and master
schedule for each plant; (ii) the engineering, procurement and construction
arrangement for the plants, covering concept study, feasibility study,
execution, commissioning and operation optimization, through an Engineering,
Procurement and Construction Management - EPCM or similar scheme; (iii) the
mechanisms for the development of a monitoring system to supervise the
expansion of the Business; (iv) the Company’s organizational structure; and (v)
a working plan for the environmental licensing of the Company.

“Material Assets”
shall have the meaning ascribed to it in Section
8.1.

“Minority Sale”
shall have the meaning ascribed to it in Section
6.3(e)(a).

“MRS” means MRS Logística S.A., a company
organized under the laws of the Federative Republic of Brazil, with head offices
in the city of Rio de Janeiro, state of Rio de Janeiro, at Praia de Botafogo,
n. 228, 12o andar, sala 1.201-E, enrolled with the Federal Taxpayer's Registry (CNPJ)
under No. 01.417.222/0001-77. 

“MRS Bound Share” means the one common share of
MRS bound to the MRS Shareholders’ Agreement owned by the Company. 

“MRS Shares” means common shares representing seven point fifty-nine
percent (7.59%) of MRS’s total outstanding capital stock and class A preferred
shares representing one point zero four percent (1.04%) of MRS’s total
outstanding capital stock.

“MRS Shareholders’ Agreement” means the Third Amendment
and Consolidation to the Shareholders’ Agreement of MRS Logística S.A., entered
into by and among CSN, Usinas Siderúrgicas de Minas Gerais S.A. – USIMINAS,
Minerações Brasileiras Reunidas S.A. – MBR, Ferteco Mineração S.A. and Gerdau
S.A. on November 25, 2003. 

“Namisa Mining Rights” means the rights held by the Company: (i) under the
administrative processes ongoing before the DNPM under Nos [*] and [*] and (ii)
the rights over the real properties and plants related to the exploration,
exploitation and operation of the mining rights referred in item (i) above.

TEXT_SP  9294504v1 
7474/36 44

 

 

 

“Offered Shares” shall have the meaning
ascribed to it in Section 12.1.

“Operating Budget” means the operating budget
of the Company, based on the Master Plan, which shall necessarily contemplate
(i) the Company’s basic goals, projected revenues, expenses, working capital,
capital expenditures, financing plans and operating cash flows, in each case
with projections for not less than the next three (3) succeeding fiscal years;
(ii) strategic alliances expressly set forth in the Master Plan; and (iii)
operating projections of the Company for not less than the next three (3)
succeeding fiscal years.

“Parties” and “Party” shall have the
meaning ascribed to it in the preamble.

“Permitted Transferee” means, (i) in respect of
any Shareholder, any Affiliate of such Shareholder to the extent that such
Person agrees to be bound by the terms of this Agreement in accordance with Section
4.4 of
this Agreement and (ii) additionally, in respect of BJIOC SPC, BJIOC, Itochu
Corporation, JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., POSCO,
Japanese SPC and CSC, each of such Person, shall be Permitted Transferees of
each other, provided that in the event such transferee(s) acquire(s) less than
all of the Bound Shares held by such Shareholder, then for all purposes of this
Agreement, such Shareholder and the transferee(s) shall be deemed to form one
shareholder block and to be a single shareholder for the purposes of this
Agreement, provided that such shareholder block may appoint more than one
representative for the purposes of this Agreement and of §10 of Article 118 of
the Brazilian Corporate Law and (b) only one representative can be appointed by
JKTC Parties voting block (including their Permitted Transferee(s)).  

“Person” means an individual, corporation (including a Brazilian sociedade
anônima), limited liability company (including a Brazilian sociedade
limitada), partnership, association (whether incorporated or not),
investment fund, trust or other entity or organization (whether or not
Brazilian), including any type of Brazilian sociedade empresária and sociedade
simples or any other entity regulated by Articles 40 through 69 of the
Brazilian Civil Code.

“Port
Services Agreement” shall have the meaning ascribed to it in the Investment
Agreement.

“POSCO”
shall have the meaning set forth in the preamble.

“Primary Tranche” means any issuance of new
shares by the Company or by the IPO Vehicle (if such issuance occurs after an
IPO of the IPO Vehicle) in the context of a Qualified Private Sale.

“Prior Meeting” shall have the meaning ascribed
to it in Section 6.4.

“Qualified Private Sale” means a transfer of
the preemptive rights of CSN in the subscription of shares issued by the
Company or of the IPO Vehicle (if such sale occurs after the IPO of the IPO
Vehicle), not involving a public offering and not subject to registration
before a Governmental Authority in charge of securities regulation, to a Person
which is not a Related Party to CSN, in accordance with the following conditions:
(i) minimum size equivalent to [*] of the shares outstanding immediately prior
to the Qualified Private Sale; and (ii) a minimum Primary Tranche amounting to [*]
to be paid in cash (“Cash Payment”) or in shares of a publicly traded
company with a average daily trading volume in the last three months prior to
the transaction of at least [*] (“Share Payment”), provided that, in the
Share Payment, the price per share for purposes of the calculation
of the value of the shares being contributed to the Company or to the IPO
Vehicle shall be based on the average of the last 30 (thirty) trading day’s
price negotiated in the stock market prior to the subscription of the Company’s
shares or of the IPO Vehicle shares, as the case may be. The Cash Payment shall
be made within a maximum period of [*] counted from the subscription of the
Company’s shares or of the IPO Vehicle shares and the Share Payment shall
always be made upon the subscription of the Company’s shares or the IPO vehicle
shares. A Secondary Tranche is permitted on top of the Primary Tranche.

TEXT_SP  9294504v1 
7474/36 45

 

 

 

 

“Redemption Notice” shall have the meaning
ascribed to it in Section 6.6 (1).

“Qualified Private Sale Notice” shall have the
meaning ascribed to it in Section 16.1.

“Redemption Right” shall have the meaning ascribed to it in Section 6.6 (1).

“Related Party” of any specified Person shall
have the meaning set forth in the Deliberation No. 642 of October 7, 2010
issued by the Brazilian Securities and Exchange Commission (Comissão de
Valores Mobiliários – CVM), and shall also include (i) any Affiliate of
such Person, (ii) any officer, director, quotaholder, shareholder, employee or
administrator of such Person or of an Affiliate of such Person, (iii) any
spouse, ex-spouse, ascendant, descendant or collateral relative up to second
degree of such Person or of any of the foregoing. 

“Related Party to CSN” means: (i) an Affiliate
of CSN; (ii) [*] or any of her descendents and their respective spouses or any Person Controlled
by such individuals; (iii) [*], [*], the Estate of [*] or any of their descendents
and their respective spouses or any Person Controlled by such
individuals; or (iv) any Key Management Personnel of CSN or of an Affiliate of
CSN or any Person Controlled by such individuals. 

“Related Party Transaction” means (i) any
payment, sale, purchase, lease, lien, license, Transfer or other disposition or
acquisition of properties or assets or (ii) any other contract, agreement,
understanding, loan, advance, guarantee, service or other transaction, involving
the Company or any of its Subsidiaries (including TECAR SPC), on the one hand,
and any Related Party of the Company or any of its Subsidiaries (including
TECAR SPC), on the other hand. 

“Relevant Transaction” shall have the meaning
ascribed to it in Section 6.6.

“Right of Fair Offer” shall have the meaning
ascribed to it in Section 13.2.

“Right of Fair Offer – Real Estate” shall have
the meaning ascribed to it in Section 14.2.

“RoFR
Exercise Notice” shall have the
meaning ascribed to it in Section 12.2.

“RoFR Notice” shall have the meaning ascribed
to it in Section 12.1.

“Secondary Tranche” means the sale of any
existing shares of the Company or of the IPO Vehicle (if such sale occurs after
an IPO of the IPO Vehicle) owned by a selling shareholder in the context of a
Qualified Private Sale.

“Segregation of TECAR Excluded Assets” means (a)
the physical division of TECAR, in order to separate the TECAR Excluded Assets from
the assets related to mining logistics (as long as such division does not
violate the TECAR Lease Agreement or any applicable Law), followed by (b) the segregation,
upon the relevant regulatory approvals, including those from ANTAQ and SEP, of the TECAR Lease Agreement into a lease agreement for
mining purposes and a lease agreement for the raw materials and general
components (such as coal, coke and clinker) terminal, followed by (c) the transfer,
by the Company and/or TECAR SPC, as the case may be, of the TECAR Excluded
Assets and the lease agreement for the raw materials and general components
(such as coal, coke and clinker) terminal to CSN or any Affiliate of CSN (at
CSN’s sole discretion), upon the relevant regulatory approvals, including those
from ANTAQ and SEP. 

TEXT_SP  9294504v1 
7474/36 46

 

 

 

“SEP” means the Brazilian Federal
Government’s Secretary of Ports (Secretaria de Portos da Presidência da
República).

“Shareholder”
and “Shareholders” shall have the
meaning ascribed to it in the preamble. 

“Side
Transaction” means a transaction involving certain shares or assets or
products, not on an arm’s length basis, entered into by and between CSN and the
same buyer of the Company’s shares, in or at around the same time of the sale
of the Company’s shares.

“Special Meetings” shall have the
meaning ascribed to it in Section 5.3.5. 

“Subsidiary” means, when used with respect to
any Person of this Agreement, a Person directly or indirectly Controlled by such
Person. The term “Subsidiary” shall (i) include all Subsidiaries of such
Subsidiary, (ii) exclude TECAR SPC, except where expressly indicated and (iii)
exclude any non-operational, inactive or shelf company. 

“Tag Along Right” shall have the meaning
ascribed to it in Section 15.1.

“TECAR” means the rights related to the port
installations of the terminal for solid bulk cargoes, as well as the related
equipment and facilities, located in the Itaguaí Port, in the city of Itaguaí, State
of Rio de Janeiro, pursuant to the TECAR Lease Agreement.

“TECAR Excluded Assets” means the logistics assets
of TECAR related to the import of raw materials and general components (such as
coal, coke and clinker) listed in Schedule II. 

“TECAR Lease Agreement”
means Lease Agreement n. C-DEP JUR 054/97 (bound to the Public Bid Order n.
CI-003/96), as amended. 

“TECAR SPC” shall have the meaning ascribed to
it in Section 6.3(e)(a).

“TECAR SPC Port Services Agreement” shall have
the meaning ascribed to it in Section 8.2.

“TECAR Threshold” shall have the meaning
ascribed to it in Section 6.3 (e)(a).

“Third Party” shall mean with respect to any
Person any other Person that is not a Permitted Transferee of such Person.

“Third Party Offer” shall have the meaning
ascribed to it in Section 12.1.

“Third Party Transferee” shall have the meaning
ascribed to it in Section 15.1.

“Transfer” shall mean, either directly or
indirectly, through any contractual or corporate structure, by oneself or an
interposed Person, to sell, promise to sell, assign, exchange, give, contribute
as capital, transfer, pledge, or, in any other way, to dispose of or encumber
in any manner or transfer title or rights, including
without limitation unlimited liability member interests, limited liability
member interests and other equity interests.

TEXT_SP  9294504v1 
7474/36 47

 

 

 

“Transfer Notice” shall have the meaning
ascribed to it in Section 15.1.

“Transfer of Control” shall have the meaning
ascribed to it in Section 15.1.

1.2.       
Terms Generally. The definitions in this Article 1
shall apply equally to both the singular and plural forms of the terms defined.
The headings and titles of this Agreement included herein are for reference
purposes only and shall not limit or govern the sections, items or paragraphs to
which they are related. Unless the context otherwise requires, any reference to
any contract or Law includes any amendments thereto from time to time (and, in
the case of a statute or regulation, to any successor provision). Any reference
in this Agreement to a “day” or a number of “days” (without the explicit
qualifications of “business”) shall be interpreted as a reference to a calendar
day or number of calendar days.  If any action or notice is to be taken or
given on or by a particular calendar day, and such calendar day is not a
Business Day, then such action or notice shall be deferred until, or may be
taken or given on, the next Business Day. The terms “include”, “including” and
similar ones shall be construed as if they were followed by the term “for example
purposes”. All references to R$ refer to Brazilian real and all references to
USD refer to United States dollars. The language in all parts of this Agreement
shall be, in all cases, construed in a simple manner, according to its fair
meaning, and not strictly for the benefit or against any of the Parties. 

Article 2.

BASIC PRINCIPLES

2.1.       
The Shareholders shall exercise
their voting rights and CSN shall exercise its power of Control so as to ensure
that the activities of the Company and its Subsidiaries comply with the
following basic principles and premises:

(i)         
the Shareholders shall always act and shall instruct the Directors appointed by them to act in compliance with their statutory obligations
pursuant to Brazilian Corporate Law and in the best interest of the Company and its Subsidiaries (including TECAR SPC) and also
in compliance with this Agreement;

(ii)       
the officers and general managers of the Company and its Subsidiaries (including
TECAR SPC) shall exercise their activities as to ensure that all decisions of the shareholders’ meetings, the Board of Directors and/or the Board of Officers are implemented in good-faith and in an expedite manner;

(iii)      the management of the Company and its Subsidiaries
(including TECAR SPC) shall be exercised by capable and experienced professionals
who shall be duly qualified to hold their positions; 

(iv)      the management of the Company and its Subsidiaries
(including TECAR SPC) shall always comply with applicable Law and shall always
seek the best interest of the Company and its Subsidiaries (including TECAR
SPC);

(v)       
the Company’s activities shall be
focused on the development of the Business and the strategic decisions of the
Company and its Subsidiaries (including TECAR SPC) shall procure the growth of
the Business, the development of new projects and the 

TEXT_SP  9294504v1 
7474/36 48

 

 

 

maximization
of the return of the investment made by their shareholders, in compliance with
prudent management practices; and

(vi)      the management of the Company and its Subsidiaries
(including TECAR SPC) shall always seek high levels of profitability, efficiency
and competitiveness pursuant to applicable Law, basic guiding principles and
premises set forth in this Agreement.

2.2.       
Subject to events not under
reasonable control of the Parties, the Parties agree to cause the Company to
implement the Master Plan, as amended from time to time.

2.3.       
The Parties agree to adopt the
by-laws substantially in the form of Schedule 2.3 hereto as
the initial by-laws of the Company, as it may be amended from time to time
pursuant to this Agreement (“By-laws”).

2.4.       
If any provision hereof is deemed
to be conflicting or otherwise not enforceable vis-à-vis any provision
of the By-Laws, the Parties agree (i) that such provision of this Agreement
shall prevail over the applicable provision of the By-Laws; and (ii) to cause
the Company to hold an Extraordinary Shareholders’ Meeting as soon as
reasonably practicable and approve in such meeting amendments to its By-Laws so
that the terms and conditions hereof can be fully enforced by the Parties at all
times. 

Article 3.

CAPITAL
STOCK

3.1.       
As of the date hereof,
the Company’s capital stock is R$[·]
([·]), distributed in [·] ([·]) common shares (ações ordinárias), all of
which are registered and without par value, distributed among the Shareholders
in the following proportion: 

	
  Shareholder

  	
  Common Shares

  	
  Total of Common Shares (%)

  	
  Total (%)

  
	
  CSN

  	
  [·]

  	
  [·]

  	
  [·]%

  
	
  BJIOC SPC

  	
  [·]

  	
  [·]

  	
  [·]%

  
	
  CSC

  	
  [·]

  	
  [·]

  	
  [·]%

  
	
  POSCO

  	
  [·]

  	
  [·]

  	
  [·]%

  
	
  Total

  	
  [·]

  	
  100%

  	
  100%

  

3.2.       
The Company’s shares
shall confer on their holders the rights and advantages set out in its By-Laws.

Article 4.

BOUND SHARES

 

TEXT_SP  9294504v1 
7474/36 49

 

 

 

4.1.       
This Agreement is binding on all
the common shares issued by the Company which are held as of this date or in
the future by the Shareholders, their Permitted Transferees and successors (due
to Transfer, conveyance or acquisition in any way, donation, causa mortis succession,
subscription, stock dividends, stock splits, reverse stock splits, conversion
of bonds, exercise of options or warrants, exercise of preemptive rights for
subscription or in any other way), which are subject to all provisions set out
in this Agreement (“Bound Shares”).

4.2.       
The terms and conditions of this
Agreement shall also be binding on the Company and on the Company’s Directors
appointed pursuant to the terms of this Agreement, who shall commit to comply with the provisions
contained herein. The instrument of
investiture (termo de posse) of the statutory officers of the Company
shall contain language whereby each statutory officer declares his or her
knowledge of this Agreement and agrees to abide by it.

4.3.       
Any Shareholder which, for any
reason whatsoever, becomes the owner of new shares issued by the Company, shall
notify and direct the Company to annotate and register in its corporate books,
within five (5) Business Days of the date of the respective transaction, the
fact that such new shares are Bound Shares and subject to the terms of this
Agreement, without prejudice to the Company’s right to do so on its own behalf.

4.4.       
Notwithstanding the provisions of Article 12, Article 13, Article 15 and
Article 16 below,
in the event a Shareholder Transfers any of its Bound Shares (or any preemptive
rights for subscription related to those Bound Shares) to a Permitted
Transferee or a Third Party, such Transfer shall not be valid until the
acquirer adheres in writing to this Agreement.

4.5.       
Each Shareholder shall be
permitted to create a Lien (which shall not be construed as a Transfer for
purposes of Article 12, Article 13, Article 15
and Article 16),
directly or indirectly, on its Bound Shares, to secure any of its obligations (but
not those of any Third Party). 

4.6.       
Any shareholders’ agreement or
other voting agreement or arrangement entered into by any Shareholder with a Third
Party in connection with the Company or any of its Subsidiaries, including
TECAR SPC, or to MRS (in relation to MRS Shares), shall not violate the other
Shareholders’ rights under this Agreement. 

Article 5.

MANAGEMENT

5.1.      
Subject to the terms of this Article 5,
the Company shall be managed by a board of directors (“Board of Directors”),
which shall have the duties set forth in this Agreement, in its By-Laws or in
the resolutions adopted at Shareholders’ Meetings, as the case may be, and in
the applicable Brazilian Law.

5.2.      
The Board of Directors of the
Company shall consist of up to 7
(seven) members and respective alternates (“Directors”). The Directors
of the Company shall be appointed as follows:

(i)        
Irrespective of the number of
Directors, the JKTC Parties will be entitled to nominate one (1) Director of
the Company; and 

(ii)       CSN will be entitled to nominate the remaining
Directors of the Company, one (1) of whom shall be independent and shall not be
employed by or an Affiliate of, or a Related Party of, CSN, any of CSN’s
Subsidiaries, the Company or any of its Subsidiaries (including TECAR SPC) (“Independent
Director”). 

 

TEXT_SP  9294504v1 
7474/36 50

 

 

 

5.2.1       
The Directors may or may not
reside in Brazil and shall be elected by the Shareholders at a shareholders’
meeting for a term of two (2) years or until his or her successor is appointed, or
until such Director's earlier death, disability, retirement, resignation or
removal. Each Director may serve an unlimited number of consecutive terms.

5.2.2       
The majority of the members of the
Board of Directors shall appoint one (1) of the Directors as chairman of the
Board of Directors (“Chairman”), who shall hold office for the same term
as he or she holds office as a Director. The chairman of the Board of Directors
shall have the casting vote.

5.2.3       
In case of resignation,
replacement, permanent impairment or any other event that results in the
vacancy of a board seat, the respective alternate shall automatically occupy
the vacant seat. In case of resignation, replacement, permanent impairment or
any other event that results in the vacancy of the alternate seat, the
Shareholder who nominated the alternate Director whose office is to be filled
will have the right to nominate the respective replacement. If the Shareholder
fails to nominate a respective replacement, then such directorship shall be
vacant until so filled. Directors nominated by a particular Shareholder may be
removed by, and only by, such Shareholder, at any time.

5.2.4       
Each Shareholder shall use its
voting rights in the Shareholders’ Meetings of the Company, whether at any
annual, special or other meeting, by written consent or otherwise, to appoint
and elect the Directors nominated by the Shareholders in accordance with the
provisions above.

5.3.      
The Board of Directors shall meet ordinarily
every three (3) months, at times and locations to be disclosed by its
Chairman in the first month of each fiscal year. The follow up on the status of
the implementation of the Master Plan shall be a permanent item of the ordinary
meeting’s agenda and the relevant information shall be provided at least twenty
(20) days prior to such ordinary meeting. Special Board of Directors meetings
may be convened pursuant to Section 5.3.5
below.

5.3.1       
All meetings of the Board of
Directors shall be conducted in English, or in Portuguese with simultaneous
translation into English. Any resolutions adopted at such meetings shall be
prepared in English and Portuguese; both minutes shall be delivered and signed
by all attendees on the same date the meeting is held (unless provided
otherwise in Section 5.3.6).
The Portuguese version of any resolution or minutes of any such meetings shall be
recorded in the appropriate Board of Directors’ meetings minutes book and, when
required by law, shall be filed with the appropriate Commercial Registry.

5.3.2       
Unless provided otherwise, the
decisions at the Board of Directors’ meetings shall be taken by the majority
vote of the Directors present at the meeting, and no meeting shall be validly
held unless at least the majority of the Directors in office are present. Each
Director shall have one vote in the meetings of the Board of Directors.

5.3.3       
The presence of the Director
nominated by the JKTC Parties shall be required as an instatement quorum of a
Board of Directors meeting; provided, however, that if such instatement quorum is not obtained
because the Director nominated by the JKTC Parties is not present on a first
call, such meeting may be adjourned and reconvened on an expedited basis (but
no sooner than five (5) days after the date of adjournment of the first meeting
and following notice being duly given to the Directors with copy to the Shareholders
of such reconvened meeting). Should the Director nominated by the JKTC Parties fail
to be present at a Board of Directors meeting 

TEXT_SP  9294504v1 
7474/36 51

 

 

 

reconvened
on a second call, such meeting may be held with any number of participants and
the matters under discussion approved by a majority of the participants
regardless of the presence of such Director. 

5.3.4       
The meetings of the Board of Directors shall occur at the
times and locations to be disclosed by its Chairman pursuant to Section 5.3 above. A
reasonably detailed agenda (including a description of the matters in
discussion, amounts and obligations involved) shall be supplied to each
Director no less than twenty (20) days in advance of each meeting of the Board of Directors, together with support
material and documentation with respect to all agenda items. All information
provided to the Director nominated by the JKTC Parties shall be prepared both
in Portuguese and English. No
resolution of the Board of Directors may be
passed or discussed in respect of any matter not included in the agenda for that
meeting, unless all Directors are present
and in unanimous agreement.

5.3.5       
Any Director may ask for the
convening, through the Chairman of the Board, of a special Board of Directors
meeting on the basis that the subject matter of the meeting is material to the
Company and cannot wait for resolution at the next regularly scheduled meeting
(“Special Meetings”). If the Chairman of the Board does not respond to
the Director’s request within five (5) days, the Director may call the Special
Meeting himself. Special Meetings shall be called by delivery of at least twenty
(20) days prior written notice to all Directors (or such
shorter period consented to by all the Directors), by mail, e-mail or any other
means under which receipt may be acknowledged, and such notice shall specify
the agenda (including a description on the matters, amounts and
obligations involved), time and location
of the meeting. 

5.3.6       
Any Director may be
represented at meetings of the Board of Directors by another Director appointed
thereby in writing. Directors may participate in meetings of the Board of
Directors by conference call, video conference or any other means of
communication that ensures the genuineness of the vote or opinion of Directors,
as applicable, provided that a copy of the minutes of the meeting be signed and
returned via email by all the Directors to the Chairman of the Board,
within two (2) Business Days from the date of the meeting, and the respective
original be subsequently signed by all the Directors that attended such meeting.

5.4.      
Subject to the terms of this Article 5,
the Company shall also be managed by a board of statutory officers (“Board of
Officers”), which shall each have the duties set forth in its By-Laws, in
the resolutions adopted at Shareholders’ Meetings or at meetings of the Board
of Directors, as the case may be, and in the applicable Brazilian Law. 

5.4.1       
Each Shareholder shall exercise
its voting rights to cause the Board of Directors of the Company to appoint the
statutory officers, who shall be responsible for conducting the day-to-day
management activities and operations of the Company, as follows: (i) the JKTC Parties
shall be entitled to appoint 1 (one) statutory officer of the Company; and (ii)
CSN shall be entitled to appoint the remaining statutory officers, including
the CEO. JKTC Parties shall also be entitled to appoint one (1) general manager
(gerente geral) and (2) two managers (gerente) of the Company.

5.4.2       
Each officer shall reside in
Brazil, be eligible for the position of manager according to Brazilian Law and
shall hold office for a term of 2 (two) years and may serve an unlimited number of
consecutive terms.

5.4.3       
The appointment of the officers
shall take place at a meeting of the Board of Directors and the Directors may
only appoint statutory officers with expertise in the related area. The right 

TEXT_SP  9294504v1 
7474/36 52

 

 

 

of the Shareholders to appoint statutory officers of the
Company set forth in this Section 5.4 may be
exercised at any time during the term of this Agreement. 

5.5.      
The Board of Directors may create
strategic, consulting or executive committees, permanent or not, to analyze and
give opinions on matters required by the Board of Directors. The members of
such committees shall have expertise in the areas to be discussed by their
committees, being elected by the Board of Directors of the Company.

5.6.      
The Company undertakes to always
cast its votes and instruct the management of the Company’s Subsidiaries to act
always in compliance with this Agreement, thereby making sure, for instance,
that JKTC Parties’ veto rights hereunder are ensured. In the event TECAR SPC is
incorporated as a legal entity, subject to Section 6.3 (e)(a), the JKTC Parties shall be entitled to nominate one
(1) member of the Board of Directors and one (1) statutory officer of TECAR SPC.
Nevertheless, CSN shall always be entitled to nominate the majority of the members
of the Board of Directors and/or statutory officers of TECAR SPC, as the case
may be.  

5.7.      
Pursuant to the Investment
Agreement, CSN shall transfer to the Company the MRS Shares and the MRS Bound
Share and the Company shall adhere to the MRS Shareholders’ Agreement, as per
Section 4.5 of such agreement, and shall be considered as one shareholder with
CSN for the purposes of the MRS Shareholders’ Agreement, having the right to
participate in the previous meetings set forth under Section 3.4.1 of such
agreement, subject to the required regulatory approvals. Specifically with
respect to the appointment of directors of MRS, to which CSN is entitled under the
MRS Shareholders’ Agreement, CSN shall inform the Company about the director who
will be indicated by CSN prior to the relevant meeting of MRS. 

Article 6. 

EXERCISE OF VOTING RIGHTS AND PRIOR MEETINGS 

6.1.       Each Shareholder undertakes to
vote at the Shareholders’ Meetings of the Company or to cause the Company’s Subsidiaries
(including TECAR SPC), as applicable, to vote and express their opinion, or
cause their respective representatives to express his/her opinion, as
applicable, at the meetings of the Board of Directors of the Company or of any
of its Subsidiaries (including TECAR SPC), according to the provisions set out
in this Agreement.

6.2.       The Shareholders’ Meetings
resolutions of the Company or of any of its Subsidiaries (including TECAR SPC),
with the exceptions set forth in the applicable Law and in this Agreement,
especially those established in Sections 6.3, shall be taken
by majority of votes. 

6.3.       None of the Company or any of its Subsidiaries
(including TECAR SPC where expressly indicated), the Shareholders or the Board
of Directors appointed by the Shareholders shall, directly or indirectly (whether by
merger, consolidation or otherwise), take,
authorize, approve, effect, validate, enter into or facilitate any of the
following actions or matters by the Company or any of its Subsidiaries
(including TECAR SPC where expressly indicated) (“Major Decision”),
without the affirmative vote of the JKTC Parties or of the Director appointed
by the JKTC Parties, as applicable, except in relation to transactions
expressly provided for in this Agreement: 

(a)        
any amendment or restatement of the By-Laws of the Company or of any of its
Subsidiaries (including TECAR SPC), related to the matters listed in Schedule
6.3(a) hereto; 

 

TEXT_SP  9294504v1 
7474/36 53

 

 

 

(b)       
issuance of or agreement to issue
Equity Securities of the Company or of its Subsidiaries, including TECAR SPC,
when only CSN and/or a CSN ́s Related Party is/are offered the
opportunity to participate in such issuance (other than the issuance of shares
resulting from the exercise of the Pre-Money Equity Value – Subscription Bonus,
as defined in the Investment Agreement);

(c)        
any disproportional capital
reduction of the Company or its Subsidiaries (including TECAR SPC);

(d)       
granting of corporate guarantee to
Third Parties by the Company or by any of its Subsidiaries (including TECAR
SPC) in an amount equal to or higher than
[*], whether in a single transaction or a
series of related transactions, with respect to transactions that are not
related to activities of the Company or to any of its Subsidiaries (including
TECAR SPC), as applicable;

(e)         
any sale, lease, license or
disposal (including by means of capital reduction or redemption of shares) of,
and creation of encumbrances over, Material Assets, provided that the
following actions will not require the affirmative vote of the JKTC Parties or
of the Director appointed by the JKTC Parties, as the case may be:

a.     the contribution of TECAR Lease Agreement (and any
and all equipment, facilities and permits related thereto) to a special purpose
company (“TECAR SPC”) in order to sell up to fifty per cent (50%) less
one voting share of TECAR SPC’s capital stock (“TECAR Threshold” and “Minority
Sale”, respectively), provided further that the conditions set forth
in Section 8.2 hereto
are fully observed and complied with;

b.    the Segregation of TECAR Excluded Assets in accordance
with Section 8.3; 

(f)        
trading with derivatives outside the
Company’s derivative and/or hedging policy, as approved by the Board of
Directors, which shall be in accordance with market standards;

(g)        
winding-up, voluntary filing of a
petition of dissolution or liquidation of, or any bankruptcy claim or judicial
or extrajudicial recovery claim (pedido de recuperação judicial ou
extrajudicial) by the Company or any of its Subsidiaries (including TECAR
SPC);

(h)       
Related Party Transactions with or
involving the Company, any of its Subsidiaries (including TECAR SPC) and any of
their shareholders or Affiliates (a) in an amount, equal or higher than [*], whether, in
a single transaction or a series of related transactions (for the avoidance of
doubt, including any amendment, supplement or modification of or to any
provision of such Related Party agreement, any waiver of any provision of any
Related Party agreement, any consent to any departure by any party from the
terms of any provision of any such Related Party agreement, and any prepayment
or failure to make a payment with respect to such Related Party agreement), except
the CSN Off-Take Agreement and the Port Services Agreement; and (b) not
executed on an arm’s length basis. 

 

TEXT_SP  9294504v1 
7474/36 54

 

 

 

(i)         
changes to the minimum dividend
policy of the Company or any of its Subsidiaries (including TECAR SPC); 

(j)         
appointment of any independent
auditor, other than PricewaterhouseCoopers
(PwC), Deloitte, Ernst & Young or
KPMG; and

(k)       
certain amendments to the
agreements listed in Schedule 6.3(k), as described therein.

6.3.1       
All the financial amounts
established in Section 6.3 above
shall be adjusted annually after the date hereof by the Consumer Price Index, published by the Bureau of Labor Statistics of the
United States Department of Labor (“CPI”).

6.4.      
In order to allow the
exercise by the JKTC Parties or by the Director appointed by the JKTC Parties,
of their affirmative vote at the Company or any of its Subsidiaries (including TECAR SPC), as set forth in Section 6.3, the Shareholders or Directors, as applicable, shall
hold a meeting prior to any Shareholders’ Meeting or Board of Directors Meeting
of the Company or of any of the Company’s Subsidiaries, as applicable, that
will resolve on any matter listed in Section 6.3 (“Prior Meeting”). 

6.4.1       
Any Shareholder or
Director, as applicable, may be represented at Prior Meetings by another
Shareholder or Director appointed in writing. Shareholders or Directors may
participate in Prior Meetings by conference call, video conference or any other
means of communication that ensures the genuineness of the vote or opinion of
Shareholders or Directors, as applicable, provided that a copy of the minutes
of the meeting be approved by such Shareholder or Director, as applicable, and sent
via email to the Chairman of the Board of Directors on the same date of the
meeting, and the respective original be subsequently signed by all the
Shareholders or Directors, as applicable, that attended such meeting.

6.4.2       
Prior Meetings shall
always be held at least four (4) days prior to any Shareholders’ Meeting or
Board of Directors’ Meeting in which the decision adopted at such Prior Meeting
shall be expressed, and may be called by any of the Shareholders or any of the
Directors upon notice of the relevant Shareholders‘ Meeting or Board of
Directors Meeting is duly delivered to all Shareholders or Directors, as
applicable, at least fifteen (15) days prior to the date set for such Prior
Meeting. Such call notice shall include a
reasonably detailed agenda (including a
description of the matter in discussion, the amounts and obligations involved)
and other supporting
documentation with respect to all agenda
items, all of which shall be prepared in Portuguese, as well as the venue,
date and time for the reconvening of the Prior Meeting, if needed. 

6.4.3       
The presence of one representative
of the JKTC Parties shall be required as an instatement quorum of a Prior
Meeting; provided, however, that
if such instatement quorum is not obtained because no representative of the JKTC Parties is present on a first call,
such meeting may be adjourned and reconvened on an expedited basis (but no
sooner than five (5) days after the date of adjournment of the first meeting
convened and following notice being given to all Shareholders of such
reconvened meeting). Should the JKTC Parties’ representative fail to be
present at a Prior Meeting convened on second call, such Prior Meeting may be
adjourned and reconvened on an expedited basis (but no sooner than five (5) days
after the date of adjournment of the second meeting convened and following
notice being given to all Shareholders of such second reconvened meeting). Should the JKTC Parties’ representative fail to be present at a Prior Meeting
convened on a third call, such Prior Meeting may be held with any number of 

TEXT_SP  9294504v1 
7474/36 55

 

 

 

 

 participants and the matters under discussion approved by a majority of the participants, regardless of the presence of the JKTC Partiesâ€TM representative. In both cases, the underlying Shareholdersâ€TM Meeting or Board of Directors Meeting must be adjourned accordingly.
 6.4.4        After the Prior Meeting is held, minutes shall be drawn up of the resolutions taken, which minutes shall be signed by all the Shareholders or Directors in attendance and filed at the specific companyâ€TMs head offices. Should the JKTC Partiesâ€TM not approve any of the matters listed in Section 6.3, pursuant to the provisions thereof, the Company, CSN, its Directors and the Directors appointed by the Company in any of its Subsidiaries shall cast their votes in the relevant Shareholdersâ€TM Meeting or Board of Directorsâ€TM Meeting in order to reject the proposed resolution or action. For the avoidance of doubt, should the JKTC Parties fail to attend a Prior Meeting convened on a third call, as set forth in Section 6.4.3, the approval of the JKTC Partiesâ€TM relating to any of the matters listed in Section 6.3 shall no longer be required and the Company, CSN, its Directors and the Directors appointed by the Company in any of its Subsidiaries shall cast their votes in the relevant Shareholdersâ€TM Meeting or Board of Directorsâ€TM Meeting in accordance with the resolution taken at the Prior Meeting, regardless of the participation of the JKTC Parties.
 6.5.       JKTC Partiesâ€TM Voting Block. The Parties hereby agree that BJIOC SPC, POSCO, CSC and any Permitted Transferees thereto shall represent one single voting block, and, therefore: (i) shall always exercise their respective votes in the Prior Meetings and in the Shareholdersâ€TM meeting jointly as a single voting block; and (ii) shall always exercise their respective rights and obligations arising out of this Agreement jointly as a single block. Nevertheless, nothing prevents POSCO or CSC or any of its Permitted Transferees to be present at such meetings, so long as they act as single voting block.
 6.5.1        For the purposes of Section 6.5 above, POSCO and CSC hereby appoint BJIOC SPC as their representative to attend the Prior Meetings and the Shareholdersâ€TM Meetings and vote with all shares held by POSCO and CSC. For the purposes of Section 6.5, POSCO and CSC grant BJIOC SPC a power of attorney with specific powers, in the form of Schedule 6.5.1 hereto.
 6.6.       JKTC Redemption Right. In case the Board of Directors or the Shareholders, as the case may be, approve any merger (incorporaÃ§Ã£o), merger of shares (incorporaÃ§Ã£o de aÃ§Ãμes), spin-off (cisÃ£o) or amalgamation (fusÃ£o) or any other kind of corporate reorganization involving the Company and, as a result (i) the Shareholdersâ€TM equity stake in the Company is diluted by [*] of their pre-Relevant Transaction equity stake (whether or not the Company is the surviving entity) (â€œRelevant Transactionâ€�); and, cumulatively, (ii) the JKTC Partiesâ€TM rights listed in Schedule 6.6 (â€œJKTC Minimum Rightsâ€�) are not preserved in the Company, in the surviving entity or any new shareholders arrangement, as the case may be, the following shall apply: 
 (1)     if the Company is a closely-held corporation, the JKTC Parties may, at their sole discretion, but no later than [*] from the date (a) the Relevant Transaction is formally presented to the JKTC Parties by CSN upon written notice, or (b) the Relevant Transaction is approved in a Shareholdersâ€TM meeting or Board of Directorsâ€TM meeting of the Company, as applicable, whichever occurs first, serve a notice to the Company and CSN (â€œRedemption Noticeâ€�) requesting the redemption of all, but not less than all, of the Companyâ€TMs shares held by the JKTC Parties, at their Fair Market Value (calculated without giving effect to the Relevant Transaction that triggered such right), subject to the consummation of the Relevant Transaction (â€œRedemption Rightâ€�). The JKTC Parties shall not have the Redemption Right in case they (or the Director appointed by them) have voted in favor of the Relevant Transaction at the relevant Shareholdersâ€TM or Board 

TEXT_SP  9294504v1  7474/36 56

 

 

 

 

 of Directorsâ€TM meeting. Upon receipt of the Redemption Notice, the Shareholders irrevocably and irreversibly agree to approve, by unanimity, within not more than [*] following the receipt of the Redemption Notice, in a Shareholdersâ€TM meeting (and only if the Relevant Transaction had been implemented or is implemented on the same meeting), the redemption of the Companyâ€TMs shares held by the JKTC Parties at their Fair Market Value and payment of the redeemed shares within at least [*] from the Shareholdersâ€TM Meeting that approved the redemption, and all related measures for its implementation, provided that, if needed, the shares to be redeemed shall be converted into a different class of shares, with the same rights, and 
 (2)        if the Company is a publicly-held corporation, this Agreement shall be automatically terminated on the date the Relevant Transaction is consummated. 
 6.6.1        For the avoidance of doubt, in case the JKTC Minimum Rights are preserved as a result of the Relevant Transaction, the JKTC Parties shall not be entitled to exercise the Redemption Right and shall adhere to the new shareholdersâ€TM arrangement which shall reflect the JKTC Minimum Rights.
 6.6.2        For the purposes of determining the â€œFair Market Valueâ€�, the following conditions and procedures shall apply: within ten (10) days following receipt of the Redemption Notice, each of the Shareholders shall select one investment bank of international standing, which shall make an independent valuation of the Fair Market Value of the Company in USD amounts. The Shareholders agree that they shall cause such independent valuations to be made up to thirty (30) days following the date of the exercise of the Redemption Right and shall submit such determination to the other Shareholder. If the valuations differ by an amount that is [*] or less of the higher valuation, then the Fair Market Value shall be calculated by obtaining the arithmetic average of the independent valuations of the two (2) investment banks. If any investment bankâ€TMs valuation exceeds that of the other by more than [*] of the higher valuation, the two (2) investment banks shall select a third investment bank, which shall make its own independent valuation of the Company within forty (40) days following the date on which both initial valuations have been submitted to the Shareholders by the initial two (2) investment banks. In case the valuation prepared by the third investment bank falls within the valuations prepared by the two (2) initial investment banks (i.e., the third valuation is greater than the lowest of the two (2) previous valuations and lesser than the greatest of such two (2) previous valuations), then the valuation prepared by the third investment bank shall be considered the final Fair Market Value of the Company. In case the valuation prepared by the third investment bank does not fall within the valuations prepared by the two (2) initial investment banks, then the final Fair Market Value of the Company shall be the valuation performed by the initial two (2) investment banks which is closer to the valuation prepared by the third investment bank. The Shareholders shall each bear the costs and expenses associated with the investment bank they have engaged and shall share the costs of the third investment bank, as applicable.  
  

Article 7.

INFORMATION RIGHTS

7.1.            The JKTC Parties shall be provided with the following information: 
  

TEXT_SP  9294504v1  7474/36 57

 

 

 

 

 7.1.1        As soon as practicable after the end of each month, Congonhas Minérios shall provide an information report with the following data: [*]. The Parties agree that this monthly information will be (i) based on managerial, unaudited, subject to adjustments figures; and (ii) restricted to the data indicated above and that no further clarification request will be accepted.
 7.1.2        As soon as practicable after the end of each of the first three (3) quarters in each fiscal year, and in any event no later than sixty (60) days thereafter, quarterly unaudited consolidated financial statements of the Company and its Subsidiaries (including TECAR SPC) and the related statements of operations and cash flows for such quarter and for the period commencing on the first day of the fiscal year and ending on the last day of such quarter, consistent with past practices, subject to normal year-end adjustments, all subject to a limited review by the Company’s independent auditor, which shall be an internationally recognized “Big Four” certified public accounting firm (the “Accounting Firm”) and certified by an appropriate officer of the Company as presenting fairly the consolidated financial condition as of such date, all prepared in English and in accordance with the IFRS adopted by the Company. 
 7.1.3        As soon as practicable after the end of each fiscal year, and in any event no later than ninety (90) days thereafter, the annual audited consolidated financial statements of the Company and its Subsidiaries (including TECAR SPC) as of the end of such fiscal year and the related statements of operations and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous year, all in reasonable detail and accompanied by a management summary and analysis of the operations of the Company for such fiscal year, by the opinion of the Accounting Firm, which report shall state that such financial statements present fairly the consolidated financial condition as of such date and results of operations and cash flows for the periods indicated, all prepared in English and in accordance with the IFRS and the accounting policy adopted by the Company. 
 7.1.4        JKTC Parties’ auditors shall be entitled to (i) review the documents provided to the JKTC Parties under Sections 7.1.1 to 7.1.3 above and (ii) have access to the Accounting Firm’s working papers, subject to the Accounting Firm’s policies, in both cases exclusively for purposes of recognition, in JKTC Parties’ respective accounts, of JKTC Parties’ investment in the Company. The auditors shall be retained and paid by the JKTC Parties. The Company shall reasonably collaborate with the JKTC Parties’ auditors for purposes of compliance with their respective accounting policies or to the extent there are discrepancies between the IFRS adopted by the Company and the IFRS adopted by any of the JKTC Parties. The JKTC Parties’ auditors appointed and/or engaged for such purpose shall hold in confidence and trust and act in a fiduciary manner with respect to all information so received. 
 7.2.       Appropriate books, records and accounts shall be kept by the Company and its Subsidiaries (including TECAR SPC) at their respective head offices, in compliance with applicable Law. Such books and records shall be maintained on a basis that allows the proper preparation by the Company or any of its Subsidiaries (including TECAR SPC) of financial statements and tax returns.
 7.2.1        Each Shareholder and its duly authorized representatives and consultants shall have the right to, upon reasonable justification, examine the books and records of the Company and its 

TEXT_SP  9294504v1  7474/36 58

 

 

 

 

 Subsidiaries (including TECAR SPC), during normal business hours in a manner which does not interfere with their conduct of business, upon one (1) week prior notice to the Company or its Subsidiaries (including TECAR SPC). The Shareholdersâ€TM representatives appointed for such purposes shall hold in confidence and trust and act in a fiduciary manner with respect to all information so received.
 7.3.       Each of the Company and its Subsidiaries (including TECAR SPC) shall, from time to time, as the JKTC Parties or CSN may reasonably request upon one (1) week prior notice, afford the representatives of the JKTC Parties or of CSN reasonable access to the facilities of the Company or its Subsidiaries (including TECAR SPC). These representatives shall act in a manner so as not to interfere with their conduct of business and shall hold in confidence and trust and act in a fiduciary manner with respect to all information received during the visit to these facilities.
 7.4.       In addition, for informational purposes only, the JKTC Parties, in relation to item (i) below, or the director or statutory officer appointed by the JKTC Parties, in relation to item (ii) below shall be entitled to receive from the Company relevant information, including the business rationale and the benefits to the Company or any of its Subsidiaries, regarding the following matters aimed to be carried out by the Company or any of its Subsidiaries (including TECAR SPC):
 (i)       within sixty (60) days before the submission to corporate approval, any proportional capital reduction of the Company which is not in line with the Master Plan, except for any capital reduction for purposes of absorbing losses pursuant to the first part of article 173 of the Brazilian Corporate Law; and
 (ii)     together with the call notice for the relevant Board of Directorsâ€TM or Board of Officersâ€TM meeting, any issuance, assumption, incurrence or the voluntary early repayment of any financial debt or debt-related instruments by the Company or any of its Subsidiaries (including TECAR SPC), in an amount equal to or higher than [*], which is not contemplated in the Master Plan.

Article 8.

OWNERSHIP OF MATERIAL ASSETS

8.1.       Except as provided otherwise in this Agreement, the Shareholders mutually agree that the Company shall, at all times, hold, directly, Namisa Mining Rights, CdP Material Assets, TECAR (except as provided in Section 8.2) and the MRS Shares (individually and collectively â€œMaterial Assetsâ€�).
 8.2.       The Company shall always control TECAR, but may, at any time (i) implement the Segregation of TECAR Excluded Assets in accordance with the provisions of this Agreement, provided that the Segregation of TECAR Excluded Assets does not adversely impact operations of TECAR; and (ii) sell the TECAR Threshold in a Minority Sale, as described in Section 6.3(e), provided the following conditions are duly observed: (a) the JKTC Parties or the Director appointed by the JKTC Parties at the Company receives, within 60 (sixty) days before the submission of this matter to corporate approval, relevant information about the Minority Sale, its rationale and structure; (b) a fairness opinion is obtained from an investment bank of international standing stating that the Minority Sale is a fair transaction to the Company; and (c) the Company's access to the port activities and services of TECAR is guaranteed through a long term agreement that provides levels of quality and efficiency of port services similar to those practiced at the time of the Minority Sale, to the extent such provisions do not violate the TECAR Lease 

TEXT_SP  9294504v1  7474/36 59

 

 

 

 

 Agreement or any applicable Law, including any determination from the port Governmental Authorities (â€œTECAR SPC Port Services Agreementâ€�).
 8.2.1. Upon conclusion of the Minority Sale, the Company shall discuss with TECAR SPC and its other shareholders the possibility of aligning TECARâ€TMs capacity and expansion plan.
 8.3.       The Company and/or TECAR SPC, as the case may be, may implement all the actions necessary or convenient for the Segregation of TECAR Excluded Assets, provided that TECAR Excluded Assets shall be valued, exclusively for the purposes of the Segregation of TECAR Excluded Assets, at the book value of such assets as of [Drop Down Date].
 8.3.1   CSN shall indemnify the Company for Losses resulting from Third Party Claims directly and exclusively arising from the Segregation of TECAR Excluded Assets, provided that, in this specific case, no indemnification for loss of profits (lucros cessantes) will be due by CSN to the Company or to the JKTC Parties in connection therewith.

Article 9.

MASTER PLAN, OPERATING BUDGET AND COMPANYâ€TMS BUDGET

9.1.       The Companyâ€TMs expenditures and business operations shall be made in accordance with a Master Plan (as it may be modified from time to time) and an Operating Budget (as modified from time to time).
 9.1.1        The Initial Master Plan and the Operating Budget are adopted on the date hereof and approved by the Parties. 
 9.1.2        The JKTC Parties shall be afforded the opportunity to participate in discussions related to any amendment to the Initial Master Plan, the Master Plan or to the Operating Budget, but shall not interfere with CSNâ€TMs decision on whether and when to amend them. Any material amendment to the Initial Master Plan, to the Master Plan or to the Operating Budget shall be approved by the Companyâ€TMs Board of Directors. For the avoidance of doubt, the Parties agree that amendments to the Initial Master Plan, to the Master Plan or to the Operating Budget are not Major Decisions and therefore shall be approved by simple majority of the Board of Directors of the Company.
 9.1.3        The Shareholders shall cause the Board of Officers of the Company to finish the production of each draft of the subsequent Operating Budget, at least three (3) months prior to the date in which such documents are submitted to approval of the Board of Directors. The Board of Directorsâ€TM Meeting that approves the Operating Budget shall take place no later than thirty (30) days prior to commencement of the relevant fiscal year, without prejudice of amendments thereto that may be presented to the Board of Directors for approval during the fiscal year on an extraordinary basis.

Article 10.

DIVIDEND POLICY

10.1.   The By-Laws of the Company and its Subsidiaries (including TECAR SPC) shall provide for the allocation of the respective annual accounting net profit reported in the previous year, adjusted in accordance with article 202 of the Brazilian Corporate Law (â€œAdjusted Net Profitâ€�) to be the following:
  

TEXT_SP  9294504v1  7474/36 60

 

 

 

 

 (a)                a minimum mandatory dividend equivalent to [*] of the Adjusted Net Profit shall be paid to the shareholders;
 (b)               an additional dividend equivalent to [*] of the Adjusted Net Profit shall be paid to the shareholders, minus the amount retained to fund the capital budget (orÃ§amento de capital), subject to Section 10.1.2;
 (c)                the balance not allocated to a capital budget shall be allocated to a statutory reserve for operations, projects and investments, unless otherwise approved by the shareholders, provided that in no event shall (i) such amount exceed [*] of the Adjusted Net Profit or (ii) such statutory reserve exceed [*] of the relevant company stock capital. 
 10.1.2    The Shareholders hereby agree that the retention provided for in Section 10.1(b) shall (i) not include amounts identified as third party resources in the capital budget and (ii) be limited to fixed or working capital that will be necessary in the five (5) years period immediately following the year in which such capital budget is approved to implement the Companyâ€TMs approved Operating Budget and/or Master Plan.
 10.2.   For the avoidance of doubt, the annual accounting net profits of the Company shall be calculated including the results, under the equity pick-up method, relating to the Subsidiaries (including TECAR SPC) and Affiliates, located in Brazil or abroad, in accordance with Brazilian GAAP, without prejudice to Section 10.3.1.
 10.3.   Without prejudice to the foregoing, the Shareholders and the management of the Company and of its Subsidiaries (including TECAR SPC) shall procure that upon approval of the declaration of dividends pursuant to this Article 10, the Company and its Subsidiaries (including TECAR SPC) have funds available for making the full payment of the dividends declared, including by means of (i) execution of intercompany loans with its Subsidiaries (including TECAR SPC) and/or (ii) receipt of funds deriving from distributions of dividends of its Subsidiaries (including TECAR SPC), as long as, in both cases and specifically in relation to foreign Subsidiaries, such loans or distribution of dividends will not cause the relevant Subsidiary to pay and/or anticipate taxes (other than IOF) that represent more than fifteen percent (15%) of the funds to be remitted to the Company.
 10.3.1    In relation to the Company and its Subsidiaries, in case the cash available for distribution of dividends is not sufficient for the full payment of such dividends in any given fiscal year, as provided under Sections 10.1 and 10.3 hereto, the unpaid portion of the applicable dividends shall be allocated to the unrealized profit reserve (reserva de lucros a realizar) and distributed as dividends to Shareholders as soon as the Company or its Subsidiaries (including TECAR SPC), as the case may be, financially realizes such profit, in accordance with the Brazilian Corporate Law.

Article 11.

ANTIDILUTION 

11.1.   Without prejudice to Section 8.1, in case CSN, through the Company, approves a capital increase or the issuance of Equity Securities by any of its Subsidiaries (including TECAR SPC), and, further, in case the Company does not exercise or Transfer its preemptive rights to subscribe for the capital increase or the issued Equity Securities, subject to the provisions of this Agreement, the JKTC Parties shall have the right to exercise such preemptive rights on a pro rata basis, through the assignment of preemptive rights to the JKTC Parties, according to its direct and 

TEXT_SP  9294504v1  7474/36 61

 

 

 

 

 indirect participation, except, in the last case, if the JKTC Parties directly or indirectly voted in favor or refrained from voting in the CompanyÂ ́s decision not to exercise the relevant preemptive right.   

Article 12.

RIGHT OF FIRST REFUSAL

12.1.   In case the JKTC Parties receive a Third Party bona fide firm offer to sell part or all of their shares, or preemptive right to subscribe for shares in the Company (â€œOffered Sharesâ€� and â€œThird Party Offerâ€�, respectively), the JKTC Parties shall deliver a written notice (â€œRoFR Noticeâ€�) to that effect to CSN containing (i) JKTC Partiesâ€TM intention to sell the Offered Shares and the name and address of the proposed transferee; (ii) the proposed price per share for those shares; (iii) the number of shares proposed to be transferred; and (iv) any other material terms of the Third Party Offer, and give CSN the right of first refusal to acquire all the shares being offered.
 12.2.   The right of first refusal shall be exercised by means of a written notice (â€œRoFR Exercise Noticeâ€�) to be delivered by CSN within [*] from the date of receipt of the RoFR Notice. 
 12.3.   In case CSN does not deliver a RoFR Exercise Notice as set forth in this Section 12.2 within such [*] period, the JKTC Parties may sell the Offered Shares to the person identified in the RoFR Notice on the same price, terms and conditions set forth in the RoFR Notice. The sale by the JKTC Parties to the person identified in the RoFR Notice shall take place within [*] from the date of the receipt of the last regulatory approval necessary for the consummation of the sale of the Offered Shares, provided that if no prior regulatory approval is needed, such sale shall take place within [*] from the end of the [*] period referred to above. After such period, if the sale does not occur, the Offered Shares shall again be subject to the right of first refusal set forth in this Article 12.
 12.4.   If CSN exercises the right of first refusal as per this Article 12, it shall acquire all, but not less than all, of the Offered Shares, for the same price per share and according to the terms and conditions set forth in the RoFR Notice. If, for whatever reason, the acquisition of such Offered Shares by CSN is not concluded within [*] from the date of the receipt of the last regulatory approval necessary for the consummation of the sale of the Offered Shares (or, if no regulatory approval is needed, within [*] from the date of the receipt of the RoFR Exercise Notice), the JKTC Parties shall be free to sell the Offered Shares to the Third Party who presented the Third Party Offer, within the term provided in Section 12.3. 

Article 13.

RIGHT OF FAIR OFFER

13.1.   In case CSN wishes to Transfer to a Third Party, directly or indirectly, in whole or in part, any of its shares, or preemptive rights to subscribe for shares in the Company or receives a Third Party bona fide firm offer to sell part or all such shares or preemptive rights to subscribe for shares, either by means of a bilateral negotiation or an organized process with any number of interested parties, CSN shall deliver a written notice to the JKTC Parties: (i) informing about such potential Transfer (including the name of the proposed transferee, the proposed price for those shares, preemptive rights to subscribe for shares, the number of shares or preemptive rights to subscribe for shares proposed to be transferred and any other material terms of the offer; (ii) granting access to the same relevant information that was disclosed to the Third Party (except for the amount of offers made by Third Parties); and (iii) inviting the JKTC Parties to participate in 

TEXT_SP  9294504v1  7474/36 62

 

 

 

 

 the sale process of such CSNâ€TMs shares or preemptive rights to subscribe for shares, in case there is a formal process in place.
 13.2.   The JKTC Parties shall have [*] as of the date of receipt of the written notice referred in Section 13.1 above to present an offer to acquire all of the offered CSNâ€TMs shares (â€œRight of Fair Offerâ€�), by means of a written notice containing the price per share and payment conditions proposed by the JKTC Parties for the purchase of CSNâ€TMs shares (â€œFair Offer Priceâ€�).  
 13.3.   The Right of Fair Offer shall not impair the timing of the sale or interfere with CSNâ€TMs decision on the sale, which shall be always at its sole and exclusive discretion, regardless of the Fair Offer Price and the terms and conditions contained in either JKTC Partiesâ€TMs or the Companyâ€TMs offer, as the case may be.
 13.4.   The Right of Fair Offer shall not apply if CSN transfers all or part of its shares in the Company to an Affiliate, which shall then be bound to the terms of this Agreement.

Article 14.

RIGHT OF FAIR OFFER â€“ REAL ESTATE

14.1.   In case CSN wishes to Transfer to a Third Party, directly or indirectly, in whole or in part, its property rights or the rights to use the properties listed in Schedule 14.1 (â€œExpansion Property Rightsâ€�), CSN shall deliver a written notice to the Company: (i) informing about such potential Transfer, including the name of the proposed transferee, the proposed price for and the description of the Expansion Property Rights (including the relevant enrollments), as well as any other material terms of the offer; (ii) granting access to the same relevant information that was disclosed to the Third Party (except for the amount of offers made by Third Parties); and (iii) inviting the Company to participate in the sale process of the Expansion Property Rights, in case there is a formal process in place.
 14.2.   The JKTC Parties or the Company, as the case may be, shall have, sixty (60) days as of the date of receipt of the written notice referred in Section 14.1 above to present an offer to acquire all of the Expansion Property Rights (â€œRight of Fair Offer â€“ Real Estateâ€�), by means of a written notice containing the price for the Expansion Property Rights and the payment conditions proposed by the Company (â€œFair Offer Price â€“ Real Estateâ€�).  
 14.3.   The Right of Fair Offer â€“ Real Estate shall not impair the timing of the sale or interfere with CSNâ€TMs decision on the sale, which shall be always at its sole and exclusive discretion, regardless of the Fair Offer Price â€“ Real Estate and the terms and conditions contained in the Companyâ€TMs offer.
 14.4.   The Right of Fair Offer â€“ Real Estate shall not apply if CSN transfers all or part of the Expansion Property Rights to an Affiliate.

Article 15.

TAG ALONG RIGHTS 

15.1.   Notwithstanding the Right of Fair Offer, if CSN intends to Transfer its shares (or the preemptive rights for subscription of shares) in the Company to a Third Party and, as a result of such Transfer, CSN would cease to Control the Company and the Third Party transferee (and parties acting in connection with such Third Party transferee, if applicable, â€œThird Party Transfereeâ€�) would as a result thereof acquire Control of the Company (â€œTransfer of Controlâ€�), 

TEXT_SP  9294504v1  7474/36 63

 

 

 

 

 CSN shall be required to offer to the JKTC Parties, by written notice, with a copy to the Company (â€œTransfer Noticeâ€�), the right to sell all (and not less than all) of the shares of the Company held by the JKTC Parties to the Third Party Transferee under the same terms and conditions applicable to the Transfer by CSN, provided that if the Transfer of Control occurs as a result of a series of Transfers to one or more Third Party Transferee, the JKTC Parties shall be entitled to receive, for each share, the weighted average price per share of all such Transfers that ultimately resulted in the Transfer of Control (â€œTag Along Rightâ€�). The Transfer Notice shall specify the price and the terms and conditions under which the Transfer of Control shall take place. 
 15.2.   The Tag Along Right shall be exercised by the JKTC Parties within [*] as of receipt of the Transfer Notice, by written notice to CSN, with a copy to the Company.
 15.3.   Should the Tag Along Right be exercised by the JKTC Parties, CSN may only validly conclude the Transfer of Control if the Third Party Transferee acquires shares of the Company subject to such Transfer of Control simultaneously with the acquisition of the shares held by the JKTC Parties, on the same terms set forth in the Transfer Notice. 

Article 16.

CO-SALE RIGHT

16.1.   In case of a Qualified Private Sale to (i) a Third Party which has an existing material relationship with CSN or with CSNâ€TMs controlling shareholder, or (ii) a Third Party which is part of any Side Transaction with CSN, the JKTC Parties may, by written notice, with a copy to the Company, exercise its right to join such sale and sell its shares in the Company up to the same number of shares being sold by CSN to such buyer (â€œQualified Private Sale Noticeâ€�) under the same terms and conditions applicable to the Qualified Private Sale by CSN (â€œCo-Sale Rightâ€�). 
 16.2.   The Co-Sale Right shall be exercised by the JKTC Parties within [*] as of the delivery of the Qualified Private Sale Notice, by written notice to CSN, with a copy to the Company.
 16.3.   Should the Co-Sale Right be exercised by JKTC Parties, CSN may only validly conclude the Qualified Private Sale if the Third Party buyer who purchases the CSNâ€TMs shares of the Company subject to the Qualified Private Sale simultaneously acquires the JKTC Partiesâ€TM shares of the Company, on the same terms set forth in the Qualified Private Sale Notice.

Article 17.

INITIAL PUBLIC OFFERING â€“ IPO AND RELATED MATTERS

17.1.        Should CSN consider to carry out an IPO, it shall cause the Company to engage one or more reputable first-tier investment banks, with renowned experience in conducting initial public offerings, for the purpose of analyzing the Company and the market conditions in effect at the time and giving an opinion on the feasibility of the IPO.
 17.2.        The Shareholders may discuss in the future the possibility of performing an IPO through another vehicle especially incorporated for such purpose (â€œIPO Vehicleâ€�), provided that: (i) such vehicle holds one hundred percent (100%) of the Companyâ€TMs capital stock and no other assets; (ii) JKTC Partiesâ€TM rights under this Agreement are not violated and are maintained in the IPO Vehicle level; and (iii) the use of the IPO Vehicle does not negatively impact JKTC Partiesâ€TM investment in the Company. 
  

TEXT_SP  9294504v1  7474/36 64

 

 

 

 

 17.3.        Following such feasibility analysis, in case CSN decides to pursue the IPO, it shall cause the Company to promptly deliver a notice to all Shareholders: (i) informing the intention to go public; and (ii) stating, in a reasonably detailed basis, the estimated terms and conditions of such offering and the content of the investment banksâ€TM opinion (â€œIPO Noticeâ€�).
 17.4.        The IPO shall not violate any of JKTC Partiesâ€TM rights under this Agreement. For such purposes, the offering memoranda shall fully and accurately describe JKTC Partiesâ€TM rights under this Agreement.
 17.5.        The Shareholders and the Company shall endeavor their best efforts (and shall cause the Companyâ€TMs management to endeavor its best efforts) for the Company to perform all corporate and management actions necessary or suitable to promote the Companyâ€TMs registration for public trading and to carry out an IPO under the terms set forth in this Article 17.  
 17.6.        A limited number of representatives from the JKTC Parties shall have reasonable access in the process and to the offering memoranda and all other materials and information related to the IPO, including marketing materials.
 17.7.        The JKTC Parties shall have subscription, priority or preemptive rights in the IPO in order to avoid their dilution, subject to the rules of the Brazilian Securities and Exchange Commission (ComissÃ£o de Valores MobiliÃ¡rios â€“ CVM). In case the JKTC Parties decide to exercise any of such rights, the information as to such exercise shall be disclosed in the offering documents. In case of an IPO, each JKTC Party shall be entitled to include its respective Companyâ€TMs shares or IPO Vehicleâ€TMs shares, as the case may be, in such IPO, pro rata to their equity interests in the Company or in the IPO Vehicle, as the case may be, provided that in this case the provisions of Article 12 shall not apply.

Article 18.

TERM OF EFFECTIVENESS

18.1.   This Agreement is entered into on an irrevocable basis, and shall terminate upon the earlier of: (i) December 31, 2054 (â€œInitial Termâ€�); or (ii) in case the percentage of Bound Shares jointly held by the JKTC Parties falls below [*] of the total capital stock of the Company (â€œJKTC Floorâ€�) or (iii) upon the occurrence of a termination event under Section 6.6. 

18.1.1. The Initial Term shall be automatically renewed for successive forty (40) years terms (â€œAdditional Termsâ€�), unless (i) one of the Shareholders notifies the others of its intention to terminate this Agreement, at least one year prior to the expiration of the Initial Term or of any Additional Term; or (ii) in case, at any time, the number of Bound Shares jointly held by the JKTC Parties falls below the JKTC Floor.

 

18.1.2  The Parties hereby agree that the JKTC Floor calculation shall disregard any dilution resulting from shares issued in the context of capital increases (including as a result of capital reorganizations that do not qualify as a Relevant Transaction) in which the JKTC Parties are not granted preemptive (preferÃancia) or priority (prioridade) rights in accordance with the applicable Law (or in which the JKTC Parties have not been granted said rights to subscribe other securities convertible into shares or which entitle the owner to subscribe for shares), so that the effects of such dilutions (irrespectively of whether the Company is the surviving entity) are not considered for purposes of determining whether the JKTC Floor has been reached, except for (i) capital increases in the context of stock option plans of the Company and (ii) a Relevant Transaction, in which case Section 6.6 shall apply. For the avoidance of doubt, any dilution resulting from capital 

increases in which the JKTC Parties were granted preemptive (preferência) or priority (prioridade) rights shall be considered for purposes of reaching the JKTC Floor, irrespective of whether the JKTC Parties opted for exercising such rights or not.

TEXT_SP  9294504v1  7474/36 65

 

 

 

 

 

18.1.3. If the percentage represented by the Bound Shares held by the JKTC Parties either in the Company or, in case of a corporate reorganization, in the surviving entity, is equal to or higher than the JKTC Floor, the rights provided for in this Agreement shall be preserved, mutatis mutandis, either in the Company or in the surviving entity, except in the context of a Relevant Transaction, in which case Section 6.6 shall apply.

 

Article 19.

NOTICES

19.1.   Any notice by any Party shall be prepared and delivered in English and addressed as follows, provided that copies of supporting documents which originals are in Portuguese may be delivered by the parties in Portuguese without the need of translation:
 I.       Companhia Siderúrgica Nacional:
 Avenida Brigadeiro Faria Lima, 3.400, 20th Floor
 04538-132, São Paulo, SP, Brazil
 Telephone: (55 11) 3049-7100
 [*]
  
 With copy to:
 [*]
  
 II.      BJIOC SPC:
 [·] 
 Telephone: [·] 
 E-mail: [·]  
 Att.: Mr. [·] 
  
 III.     POSCO:
 POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, 
 135-777, Korea 
 [*]
  
 IV.     China Steel Corporation:
 88 Chenggong, 2nd Roard, Qianzhen, Kaohsiung 80661 
 Taiwan, Republic of China 
 [*]
  
 V.      Congonhas Minérios S.A.:
  

TEXT_SP  9294504v1  7474/36 66

 

 

 

 

 Logradouro Casa de Pedra, without number, part
 CEP 36.415-000, Congonhas/MG, Brazil
 [*]
 19.1.1    Notices shall be deemed to have been delivered when sent with a return receipt or "aviso de recebimento" issued by the Empresa Brasileira de Correios e Telégrafos (Brazilian Official Post Office) to the above mentioned addresses or, in case of e-mail communication, when a confirmation of such transmission or confirmation receipt is obtained. The original version of documents sent via e-mail shall be sent to the above mentioned addresses no later than 2 (two) Business Days after such transmission.
 19.1.2    Any Investor may change its address or telex or facsimile number for the purpose of this Article 19 by notice given to the other Parties in the manner set forth above.

Article 20. 

INDEMNIFICATION

20.1.   Without prejudice to the provisions of Section 20.3 and 22.7, CSN shall indemnify and hold harmless the Company, its Subsidiaries and/or the JKTC Parties from and against all Losses incurred by the Company or any of its Subsidiaries as a result of a breach of this Agreement.
 20.2.   Without prejudice to the provisions of Section 20.3 and  22.7, the JKTC Parties shall indemnify and hold harmless the Company, its Subsidiaries and CSN from and against all Losses incurred by the Company or any of its Subsidiaries as a result of a breach of this Agreement.
 20.2.1  JKTC Parties shall be jointly and severally liable for their obligations under Section 20.2.
 20.3.   The Shareholders will only be liable for loss of profits (lucros cessantes) (i) suffered by the Company or any of its Subsidiaries; and (ii) that have been finally determined. The responsibility for payment of loss of profits shall be deemed to have been finally determined when the Shareholders have so determined by mutual agreement or, if disputed, when a final decision in respect thereof has been rendered pursuant to Section 21.2.

Article 21.

GOVERNING LAW AND DISPUTES RESOLUTION

21.1.        This Agreement and the rights and obligations of the Parties hereunder and the transactions contemplated hereby shall be governed by, enforced and interpreted in accordance with the laws of Brazil.
 21.2.   Any dispute, controversy or claim arising out of or relating to this Agreement ("Dispute") shall be solved by arbitration, in accordance with the following provisions: 
 21.2.1    The Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules") in force at the time of the request for arbitration.
 21.2.2    The arbitration shall be conducted by 3 (three) arbitrators (“Arbitral Tribunal”), one nominated by the claimant, another one nominated by the respondent, and the two (2) party-appointed arbitrators shall designate a third arbitrator, who shall act as president of the Arbitral Tribunal, within 15 (fifteen) days after the confirmation of the later-appointed of these two 

TEXT_SP  9294504v1  7474/36 67

 

 

 

 

 arbitrators. In case there are multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and/or the multiple respondents, jointly, as the case may be, shall appoint one arbitrator. If any of the three arbitrators is not nominated within the time prescribed in the ICC Rules or above, such arbitrator shall be appointed by the Court of Arbitration of the International Chamber of Commerce (the "ICC Court").  
 21.2.3    The arbitration shall be held in the City of SÃ£o Paulo, State of SÃ£o Paulo, Brazil, where the arbitral award shall be deemed rendered. The arbitration procedure shall be held in English and in accordance with Brazilian Law, but evidence may be produced by the parties in Portuguese without the need of translation. The Arbitral Tribunal shall not act as amiable compositeurs or decide the merits of the Dispute ex aequo et bono.
 21.2.4    The Parties elect the courts of the City of SÃ£o Paulo, State of SÃ£o Paulo, exclusively for granting interim or conservatory measures before the constitution of the Arbitral Tribunal. Even in instances where a provisional judicial relief has been sought or obtained, the merits of the Dispute shall always be decided by the Arbitral Tribunal. For the avoidance of doubt, among the remedies that may be ordered or awarded by the Arbitral Tribunal is the remedy of specific performance of contractual obligations.
 21.2.5    Except for attorneyâ€TMs fees, which shall be borne individually by each of the parties to the arbitration, all expenses, costs and legal fees shall be borne by one or all parties as determined by the Arbitral Tribunal. 
 21.2.6    The Parties shall keep the confidentiality of each and every information concerning the arbitration.
 21.2.7    If one or more Disputes arise under this Agreement or any other Transaction Document, as defined in the Investment Agreement, then any or all such Disputes may be brought into a single arbitration. The ICC Court may, at the request of any of the parties, consolidate the arbitral proceeding with any other pending arbitral proceeding involving this Agreement and/or any other Transaction Document. If one or more arbitrations are already pending with respect to a Dispute under any such agreement, then any party to a new dispute or any subsequently filed arbitration brought under any such agreement may request that such new dispute or any subsequently filed arbitration be consolidated into any prior pending arbitration. 
 21.2.8    The new dispute or subsequently filed arbitration shall be so consolidated, provided that the ICC Court determines that: (i) the new dispute or subsequently filed arbitration presents significant issues of law or fact common with those in the prior pending arbitration; (ii) no party to the new dispute or prior pending arbitration would be prejudiced; and (iii) consolidation under these circumstances would not result in undue delay for the prior pending arbitration.  
 21.2.9    The consolidation order shall be final and binding upon all the parties involved in the consolidated proceedings. The arbitrations shall be consolidated into the arbitration that commenced first. The Parties agree that upon such an order of consolidation, they will promptly dismiss any arbitration proceeding, the subject of which has been consolidated into another arbitral proceeding.

Article 22. 

MISCELLANEOUS

 

TEXT_SP  9294504v1  7474/36 68

 

 

 

 

 22.1.        No waiver by any Shareholder of any term or provision of this Agreement or of any default hereunder shall affect such Shareholders' rights thereafter to enforce such term or provision or to exercise any right or remedy in the event of any other default, under the terms of applicable Law. No waiver, termination or discharge of this Agreement, or any terms or provisions hereof, shall be binding upon any of the Parties hereto unless confirmed in writing. 
 22.2.   The Parties undertake to fulfill and cause others to fulfill all obligations hereunder and acknowledge that any acts performed or measures taken by the Parties or third parties in violation of this Agreement or in breach of the provisions hereunder are null and void among themselves, the Company and its Subsidiaries and any Third Party. Additionally, the failure by any of the Parties to comply with, or to cause the compliance of, any material obligation hereunder shall have the effect of suspending such Partyâ€TMs voting rights until its obligation is performed or cured. 
 22.3.   This Agreement shall be binding upon and shall inure to the benefit of the Companyâ€TMs, the Partiesâ€TM shareholders and their respective successors and assignees and shall be enforceable by the Companyâ€TMs, the Partiesâ€TM shareholders and their respective successors. Unless otherwise provided herein, or agreed upon by all the Parties in writing, this Agreement and all of its rights and obligations shall not be assigned to any Third Party. 
 22.4.   The obligations undertaken in this Agreement are irrevocable and unconditional.
 22.5.   Copies of this Agreement shall be delivered to the directors and officers (administradores) of the Company. The documents evidencing their assumption of office shall contain a representation pursuant to which they acknowledge the provisions of this Agreement and undertake to comply with all obligations set forth herein, upon penalty of the sanctions provided for by applicable Law.
 22.6.        This Agreement is the entire agreement between the Shareholders hereto in connection with the subject hereof (unless otherwise provided herein) and supersedes, as of the date hereof, any other agreement, contract, promise, undertaking, letter or any other form of agreement, communication or obligation, whether oral or written, by any Shareholder (or any representative thereof) in respect of the matters covered in this Agreement (unless otherwise provided herein).
 22.7.        This Agreement is subject to specific performance under the terms and for the purposes of article 118 of the Brazilian Corporate Law and shall be filed at the Companyâ€TMs head office. The Company hereby irrevocably agree on its own behalf and on behalf of its successors of any kind to comply with this Agreement and therefore execute it as intervening parties. The Nominative Shares Registry Book of the Company, on the margin of the Bound Shares registration, and the certificates representing the Bound Shares, if issued, shall bear the following text: "The shares held by [Name of Shareholder] are subject to the restrictions on transfer, voting arrangements, and other provisions set forth in a Shareholdersâ€TM Agreement dated [Â·]. All transfers of such shares shall be made in accordance with such Shareholdersâ€TM Agreement, otherwise shall be null and void.
 22.8.   The invalidity, in whole or in part, of any Section of this Agreement, shall not affect the other Sections, which shall continue to be valid and in effect until the remaining term of this Agreement. In the event of any such invalidity, the Shareholders hereby undertake to negotiate, in the shortest period of time possible, in substitution for the invalidated clause, the inclusion in this Agreement of valid terms and conditions that reflect the terms and conditions of the invalidated clause, taking into consideration the intention and the purpose of the Shareholders at the time of the negotiation of the invalidated clause and the context in which it appears.
  

TEXT_SP  9294504v1  7474/36 69

 

 

 

 

 22.9.   All rights and remedies of any Shareholder hereto are cumulative of each other and of every other right or remedy such Shareholder may otherwise have in law or in other agreements and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies.
 22.10.    Each of the Parties hereto shall maintain the confidentiality of any information received from the other Shareholder, the Company or any of its Subsidiaries ("Confidential Information"), including, all data and information obtained by any of them pursuant to this  Agreement, except for any information which (i) at the time of disclosure, is public information, (ii) after disclosure, is published or otherwise becomes part of the public domain without any violation of this  Agreement by the Shareholders, or (iii) is received by the disclosing Shareholder from a Third Party, provided that such Third Party, or any other party from whom such Third Party received such information, is not in breach of any confidentiality obligation in respect of such information. In the event that any Shareholder becomes legally obligated (whether by applicable Law, court order or otherwise) to disclose any of the Confidential Information, such Shareholder shall (a) immediately notify the other Shareholder of the existence, terms and circumstances in connection therewith, (b) cooperate with the other Shareholder in the event that any Shareholder seeks a protective order or other appropriate remedy, (c) furnish only that portion of the Confidential Information which is legally required and (d) exercise its reasonable efforts to obtain reliable assurances that confidential treatment shall be accorded to the Confidential Information. The Shareholders hereby acknowledge that each of them may disclose any Confidential Information, to the extent strictly necessary and permitted by applicable Law, to any of their respective direct or indirect shareholder, employee, officer, attorney, consultant, financial advisor, accountant or other representative thereof, in compliance with the provisions of this Section 22.10. Notwithstanding the foregoing, with regard to the Company, any Shareholder may disclose certain financial information and other related records, pertinent corporate documents and documents relating to the business of the Company to the extent reasonably necessary, to any prospective purchaser of such Shareholderâ€TMs Shares, and to any employee, officer, attorney, consultant, financial advisor, accountant or other representative thereof, provided that such Shareholder shall cause the prospective purchaser and employee, officer, attorney, accountant or other representative to enter into a confidentiality agreement in compliance with the provisions of this Section 22.10. This Confidentiality Obligation shall survive for 5 (five) years after the termination of this Agreement.
 22.11.    Any term hereof may only be amended with the written consent of all the Parties.
 22.12.    CSN appoints itself and the JKTC Parties appoint BJIOC SPC as representative before the Company for the purposes of Â§10 of Article 118 of the Brazilian Corporation Law.  
 IN WITNESS WHEREOF, the Shareholders hereto, together with the Company, have caused this Agreement to be duly signed in three (3) counterparts, each of which shall be deemed to be an original, but all of which together shall constitute the same agreement, binding upon the Shareholders and the Company and their respective heirs and successors in the presence of the two (2) witnesses below.
 SÃ£o Paulo, [Â·].
 [the remainder of this page is intentionally left blank]

TEXT_SP  9294504v1  7474/36 70

 

 

 

 

 

 

 

 

 

Schedule I

List of dates which shall not be considered as a Business Day on 2015

 

(The Shareholders shall renew the list of dates which shall not be considered as a Business Day by exchanging the list of dates which shall not be considered as a Business Day in next year by no later than December 28th every year.) 

 

SÃO PAULO

 

	January 1st, 2015 - New Year’s Holiday (national holiday)

	January 25th, 2015 - Anniversary of the city of São Paulo (municipal holiday)

	February 17th, 2015 - Carnival (optional day off for workers, not an official holiday)

	February 18th, 2015 - Ash Wednesday (optional day off for workers, not an official holiday)

	April 3rd, 2015 - Good Friday (national holiday)

	April 21st, 2015 - Day of Tiradentes (national holiday)

	May 1st, 2015 - Labor Day (national holiday)

	June 04th, 2015 - Corpus Christi (national holiday)

	July 9th, 2015 - Constitutional Revolution of 1932 (state holiday)

	September 7th, 2015 - Independence of Brazil (national holiday)

	October 12th, 2015 - Day of the Patroness of Brazil (Nossa Senhora Aparecida) (national holiday)

	October 28th, 2015 - Day of Government Employees (optional day off for workers)

	November 2nd, 2015 - All Soul’s Day (national holiday)

	November 15th, 2015 - Proclamation of the Republic (national holiday)

	November 20th, 2015 - Day for Black Awareness (municipal holiday)

	December 25th, 2015 - Christmas (national holiday) 

 

 

NEW YORK

 

	January 1st - New Year's Holiday (national holiday)

	January 19th - Martin Luther King, Jr. Day (national holiday) 

	February 16th - Washington’s Birthday (national holiday)

	May 25th - Memorial Day (national holiday)

	July 4th - Independence Day (national holiday)

	September 7th - Labor Day (national holiday)

	October 12th - Columbus Day (national holiday) 

	November 11th - Veterans Day (national holiday)

	November 26th - Thanksgiving Day (national holiday) 

	December 25th - Christmas Day (national holiday) 

 

 

SEOUL

 

	Jan 1st - New Year's Day 

	Feb 18th - Seollal Holiday Day 1 

	Feb 19th - Thursday Seollal Holiday Day 2 

	Feb 20th - Seollal Holiday Day 3 

	Mar 1st - Independence Movement Day 

	May 1st - Labor Day 

	May 5th - Children's Day 

	May 25th - Buddha's Birthday 

	Jun 6th - Saturday Memorial Day 

	Aug 15th - Liberation Day 

	Sep 26th - Mid-Autumn Festival Day 1 

	Sep 27th - Mid-Autumn Festival Day 2 

	Sep 28th - Mid-Autumn Festival Day 3 

	Sep 29th - Mid-Autumn Festival Day 4 

	Oct 3rd - National Foundation Day 

	Oct 9th - Hangeul Proclamation Day 

	Dec 25th - Christmas Day 

TEXT_SP/9195554v1/7474/36

 

 

 

 

 

TOKYO

 

	Jan 1st - New Year’s Day 

	Jan 12th - Coming of Age Day 

	Feb 11th - Foundation Day 

	Apr 29th - Showa Day 

	May 4th - Greenery Day 

	May 5th - Children’s Day 

	May 6th - Constitution Memorial Day

	Jul 20th - Marine Day 

	Sep 21st - Respect-for-the-Aged Day 

	Sep 22nd - Holiday by Law 

	Sep 23rd - Autumnal Equinox Day 

	Oct 12th - Health and Sports Day 

	Nov 3rd - Culture Day 

	Nov 23rd - Labor Thanksgiving Day 

	Dec 23rd - The Emperor's Birthday 

 

 

 

TEXT_SP/9195554v1/7474/36

 

 

 

SCHEDULE 2.3

Bylaws of the Company 

 

Congonhas Minérios S.A.

NIRE: 31.300.025.144

CNPJ: 08.902.291/0001-15

 

 

Bylaws

 

Article I

Company Name, Registered Office, Purpose, and Duration

 

Section 1.                Congonhas Minérios S.A. (“Company”) is a corporation (sociedade anônima) governed by these Bylaws and the applicable legislation.

 

Section 2.                The purpose of the Company is (i) the exploitation of iron ore mining activities, in any part of Brazil or abroad, comprising the development of mineral deposits, research, extraction, sale of iron ore and byproducts derived from mining activities, beneficiation, industrialization, transportation, logistics, loading, rendering of mining services, import and export of iron ore, as well as the exploitation of any other directly or indirectly related activities; (ii) the exploitation of port transportation infrastructure; (iii) generation of energy to the extent that its primary purpose is for the iron ore mining activities of the Company; and (iv) hold interests in other companies  as partner, shareholder, quotaholder, consortium member, or otherwise to the extent that such companies have the corporate purpose compatible with this one. 

 

Section 3.                The Company has its registered office in the city of Congonhas, State of Minas Gerais, and may, by resolution adopted by the Board of Officers, create, transfer, and close branches, agencies, warehouses, representation offices, and other establishments anywhere in Brazil or abroad. 

 

Section 4.                The Company has an indefinite term of duration.

 

Article II

Capital and Shares

 

Section 5.                The capital of the Company, which is fully subscribed for [and paid in], is of R$ [●], divided into [●] common shares, all registered and without par value.

 

§1.              Each common share carries the right to one (1) vote at General Meetings of shareholders.

 

Section 6.                The Company may issue, without amendment to these Bylaws, up to [●] additional common shares, by means of resolution of the Board of Directors, subject to the provisions of this Section 6. The Board of Directors shall establish the price, term and the conditions for each such issuance.

 

§1.              The authorized corporate capital may be achieved by means of one or more issuance of shares, at the Board of Directors’ sole discretion.

TEXT_SP  8915302v1  7474/36 

 

 

 

 

Â§2.              Shareholders have preemptive rights to take up new shares or securities convertible into shares, in proportion to the number of shares they own, pursuant to article 171 of Law 6.404/76. 

 

Section 7.                Any shareholder that fails to make payment for subscribed shares on the terms and conditions set out in the subscription bulletin or the capital call shall automatically be in default, and shall be subject to (i) late-payment interest of 1% per month, counted from the first day of breach of the payment obligation, with indexation of that amount at the most frequent interval permitted by law; and (ii) a fine of 10% of the amount that has not been paid up.

 

Article III

General Meetings of Shareholders

(Assembleia Geral)

 

Section 8.                A General Meeting of shareholders shall be held, ordinarily, within the first four (4) months following the end of the fiscal year, to consider the matters set out in article 132 of Law 6,404/76 and, extraordinarily, when the Companyâ€TMs interests, these Bylaws, and/or the law requires. 

 

Â§1.              Subject to the provisions of the sole paragraph of article 123 of Law 6,404/76, General Meetings of shareholders shall be called by the Chairman of the Board of Directors. Regardless of the formalities for calling shareholdersâ€TM meetings, any meeting at which all shareholders are present shall be deemed to have been regularly called.

 

Â§2.              The General Meetings shall be chaired by the Chairman or, in his or her absence or impediment, by any member of the Board of Directors appointed by the Chairman or, in case the Chairman fails to do so, by any Board member appointed by shareholders representing, at least, the majority of the voting capital stock present at the General  Meeting of Shareholders. The secretary of the General Meetings of Shareholders shall be appointed by the person chairing the meeting.

 

Â§3.              Shareholders may be represented at General Meetings of Shareholders by proxies appointed in the manner provided for in article 126, paragraph 1 of Law 6,404/76, and the instruments which formalize such proxies shall be deposited in the Companyâ€TMs headquarters at least twenty four (24) hours before the time scheduled for the General Meetings of shareholders.

 

Section 9.                Except when a higher voting percentage is required by Law 6,404/76 or by a Shareholdersâ€TM Agreement, resolutions at General Shareholdersâ€TM Meetings shall be approved by the affirmative vote of shareholders representing the majority of the shareholders present at the meeting. In either case, blank votes shall not be computed.

 

Article IV

Management

 

Section I

 

General provisions

 

Section 10.            The Company shall be managed by a Board of Directors (Conselho de AdministraÃ§Ã£o) and a Board of Officers (Diretoria). The members of the Board of Directors and 

of the Board of Officers shall take office upon execution of the respective terms of office in the relevant corporate book, remaining in office until the earliest of (i) the expiration of his/her term (provided that the Director or Officer will remain in office until the following elected Director or Officer is duly empowered), (ii) removal by the shareholders or by the Board of Directors, as applicable, as provided for in these By-laws or in  a Shareholders Agreement or (iii) his or her death, disability, retirement, resignation or removal.

TEXT_SP  8915302v1  7474/36 

 

 

 

 

Section 11.            The annual compensation to be paid to the members of management shall be fixed by the shareholders in a General Meeting of shareholders, in a global or individual amount, at the General Meetingâ€TMs discretion. 

 

Â§1.              When the compensation is fixed as a global amount, the Board of Directors shall be responsible for its allocation among its members and the members of the Board of Officers.  

 

Section II

 

Board of Directors

(Conselho de AdministraÃ§Ã£o)

 

Section 12.            The Board of Directors is composed of up to seven (7) sitting members and a number of alternates not exceeding the number of sitting members, who may or may not reside in Brazil, and shall be elected by the shareholders in a General Meeting of shareholders for a term of two (2) years, subject to any Shareholdersâ€TM Agreement. Each Director shall have one vote in the meetings of the Board of Directors and may serve an unlimited number of consecutive terms. 

 

Sole paragraph. At the first meeting of the Board of Directors following the election of its members, the Board of Directors shall appoint, by majority of votes, a Chairman of the Board of Directors from among its members. The Chairman of the Board of Directors shall have the casting vote.

 

Section 13.            Any Director who will be absent from a meeting may appoint, specifically and in writing, another member of the Board of Directors to represent him in such meeting. 

 

Sole paragraph. If the position of a sitting member of the Board of Directors becomes vacant (as a result of resignation, removal, disability or any other event), the respective alternate shall automatically occupy the vacant seat. In case of resignation, replacement, permanent impairment or any other event that results in the vacancy of the alternate seat, the respective replacement shall be nominated pursuant to the Shareholdersâ€TM Agreement. If the majority of the positions on the Board of Directors becomes vacant, a General Meeting of shareholders shall be called to hold a new election. 

 

Section 14.            The Board of Directors shall meet ordinarily every three (3) months at times and locations to be disclosed by its Chairman in the first month of every fiscal year. A reasonably detailed agenda (including a description on the matters, amounts and obligations involved) shall be supplied to each Director no less than twenty (20) days in advance of each meeting, together with the support material and documentation with respect to all agenda items, prepared both in Portuguese and in English.

 

TEXT_SP  8915302v1  7474/36 

 

 

 

Â§1.              Extraordinarily, a special meeting may be convened by the Chairman (at the request of any Director) or by any Director if the Chairman does not respond to a Directors request within five (5) days and on the basis that the subject matter of the meeting is material to the Company and cannot wait for resolution at the next regularly scheduled meeting, by means of,  a  twenty (20) days prior written notice (or such shorter period consented to by all of the Directors) sent by mail, e-mail or other means of communication under which receipt may be acknowledged, containing the agenda for the meeting (including a description on the matters, amounts and obligations involved), times and location of the meeting. If the Chairman of the Board of Directors does not respond to the Directorâ€TMs request within five (5) days, the Director may call a special meeting himself.

 

Â§2.              The quorum for holding meetings of the Board of Directors is the presence of a majority of the members then in office and shall observe the conditions provided in the Shareholdersâ€TM Agreement. Any Director who (i) is represented by his alternate or by another Director in the manner contemplated in Section 13 above; or (ii) participates in the meeting by conference call, videoconference, or other means of communication that ensures the genuineness of the vote or opinion of such Director, shall be deemed to be present at the meeting, provided that (a) a copy of the minutes of the meeting is signed and returned via e-mail by all the Directors to the Chairman of the Board of Directors within 2 Business Days from the date of the meeting and (b) the minutes of such meeting on the CompanyÂ ́s corporate book is signed as soon as practicable.

 

Â§3.              The meetings shall be conducted in English, or in Portuguese with simultaneous translation into English

 

Â§4.              Except when a higher voting percentage is required by Law 6,404/76 or by any Shareholders Agreement, resolutions at Board of DirectorsÂ ́ Meetings shall be approved by the affirmative vote of the majority of the Directors present at the meeting. In either case, blank votes shall not be computed. No resolution of the Board of Directors may be passed or discussed in respect of any matter not included in the agenda, unless all Directors are present and in unanimous agreement. 

 

Section 15.            The Board of Directors may create strategic, consulting or executive committees, permanent or not, to analyze and give opinions on matters required by the Board of Directors. The members of such committees shall have expertise in the areas to be discussed by their committees, being elected by the Board of Directors.

 

Section 16.            In addition to the matters provided for in Law 6,404/76 and these By-laws, the performance of the following acts and conclusion of the following operations by the Company shall be conditioned upon the prior approval of the Board of Directors in a meeting specially called for this purpose:

 

(i)            to establish the general policy for the businesses of the Company, its wholly-owned subsidiaries and controlled companies;

 

(ii)          to approve the pluriannual budgets, expansion projects and investment programs, and to follow up on execution and performance thereof;

 

(iii)        to decide on capital increases within the limits of authorized capital;

 

TEXT_SP  8915302v1  7474/36 

 

 

 

(iv)        to authorize trading by the Company of its own shares for maintenance in treasury for subsequent sale or cancellation;

 

(v)          to establish the terms and other conditions for the placement of debentures, including those convertible to shares, specifying the limit of the capital increase resulting from the conversion of the debentures and the type and class of shares to be issued, as well as determining the conditions stated in items VI to VIII of article 59 of Law 6,404/76 and the opportunity for issuance in other cases;

 

(vi)        to decide on the issuance by the Company of commercial papers, bonds, notes, and other securities intended to raise funds through primary or secondary distribution on the domestic or international capital markets;

 

(vii)      to establish criteria for the following acts by the Board of Officers, independently of prior authorization by the Board of Directors;

 

(a)      acquisition, disposal and encumbrance of any permanent asset;

 

(b)     conduction of any legal business by the Company, including financing and loans, including companies directly or indirectly controlled by the Company;

 

(c)      the constitution of any type of guarantee or encumbrance on any asset that is not part of the Companyâ€TMs permanent assets, including for the benefit or in favor of third parties as long as the party is a subsidiary entity, subsidiary or affiliate of the Company;

 

(viii)    to decide on the operation or action constituting a transfer of the Company's funds to others, including employee associations, recreational assistance entities, pension funds, foundations and public corporations;

 

(ix)        to resolve on any acts involving transformation, consolidation, spin-off, merger or liquidation of companies in which the Company has corporate holding;

 

(x)          to decide on the establishment of subsidiaries by the Company and on the acquisition of shares, as well as on the Company's representation at the General Meetings and meetings of partners and on matters submitted to said meetings;

 

(xi)        to establish policies for taking up tax incentives;

 

(xii)      to establish the compensation, determine the duties, and approve the operational rules for any other committees that may be created;

 

(xiii)    to take any material decision involving (a) the mining rights, existing or future, pertaining to the Company (including the assignment of such rights), (b) pelletization plants and (c) any material real estate assets of the Company;

 

(xiv)    the entering into any material amendment to material agreements involving MRS or TECAR;

 

TEXT_SP  8915302v1  7474/36 

 

 

 

(xv)      to settle any dispute or legal action of which the Company and/or those controlled by the Company are parties of and involve an amount higher than [*];

 

(xvi)    to resolve any omissions and perform other legal duties and prerogatives that do not conflict with those established in these bylaws, by law or in a Shareholdersâ€TM Agreement;

 

(xvii)  to resolve on any matters that go beyond the authority established for the Board of Officers.

 

Section III

 

Board of Officers

(Diretoria)

 

Section 17.            The Board of Officers shall be composed of at least two (2) and no more than [â—�] Officers, all resident in Brazil, eligible for the position according to the applicable Law and with expertise in the related area, provided that one (1) member shall be the Chief Executive Officer and one (1) member shall be the [Â·].

 

Â§1.              The members of the Board of Officers shall hold office for a term of two (2) years and may serve an unlimited number of consecutive terms, provided that their terms shall be extendable until their respective substitutes are elected. 

 

Â§2.              If a position in the Board of Officers becomes vacant (as a result of resignation, replacement, permanent impairment or any other event), the Board of Directors shall appoint the substitute, pursuant to any Shareholdersâ€TM Agreement.

 

Section 18.            The Officers are responsible for conducting the day-to-day management activities and operations of the Company, and shall exercise the powers conferred on them by the General Meeting of shareholders, the Board of Directors and these Bylaws to carry out the actions required for the proper operation of the Company. 

 

Section 19.            The Chief Executive Officer shall have the following attributions:

 

(i)                 be the chairman of the Board of Officersâ€TM meetings;

(ii)               exercise the executive office of the Company, coordinating and monitoring the activity of the other members of the Board of Officers, including with regards to the compliance of such Officers with the terms and conditions set forth by the Board of Directors and the General Meeting of shareholders;

(iii)             organize, coordinate and monitor the activities of the areas that are directly subordinated to it;

(iv)             assign to the members of the Board of Officers any activities or special tasks, notwithstanding those that are ordinarily within their powers, subject to the ratification by the Board of Directors; and

(v)               keep each member of the Board of Directors duly informed of the activities of the Company.

 

Section 20.            [Â·]  shall have the following attributions: [Â·] 

 

TEXT_SP  8915302v1  7474/36 

 

 

 

Section 21.            Subject to the exceptions provided for in these Bylaws, any act or legal transaction that may result in liability or obligation to third parties on the Companyâ€TMs part, or in the release of liability or obligation owed by third parties to the Company, must be signed by (i) two Officers acting jointly; (ii) one Officer acting jointly with an attorney-in-fact appointed in accordance with Â§2 below; or (iii) two attorneys-in-fact appointed jointly in accordance with Â§2 below.

 

Â§1.              The Company may be represented by a single Officer in the following cases: (i) in dealings with federal, state, or municipal authorities, departments, or state-owned or mixed economy companies, including the Board of Trade, Labor Courts, INSS, FGTS and the corresponding collecting banks; (ii) before public entities that do not result in liability or obligation to third parties on the Companyâ€TMs part, (iii) in endorsing instruments for purposes of collection or deposit in favor of the Company or to uphold the Companyâ€TMs rights in any administrative proceedings of any nature, as well as for the fulfillment of any tax, labor or social security obligation; (iv) in the endorsement of titles for purposes of collecting payment or deposits in bank accounts held by the Company; (v) in representing the Company in General Meetings of shareholders or quotaholders or equivalent meeting of other companies, consortiums or entities in which the Company holds interest; (vi) in receiving judicial notifications and citations, and, whenever the Company has been properly summoned, in giving testimony before the courts, through the Chief Executive Officer or other Officer designated by the Board of Directors for that purpose, without power to confess; and (vii) in signing simple routine correspondence and acts. 

 

Â§2.              The Company, acting through two of its Officers, may appoint attorneys-in-fact, by instrument specifying the purpose of the appointment, the powers granted, and the term of the appointment, which may not exceed one (1) year, except in the case of powers conferred ad judicia or to defend the Companyâ€TMs interests in administrative proceedings, which may have an indefinite term.

 

Section 22.            The Board of Officers shall meet whenever convened by the Chief Executive Officer or any two (2) Officers, and its decisions shall be taken by a simple majority of votes, provided that a quorum is present of at least a majority of the elected members. In the event of draw, the matter to be resolved shall be submitted to the Board of Directors.

 

Sole paragraph. All resolutions by the Board of Officers shall be set out in minutes drawn up in the book of minutes of meetings of the Board of Officers and signed by the Officers present of the meeting, provided that copies of such minutes will be made available to the members of the Board of Directors upon request.

 

Section 23.            The Officers are expressly prohibited from performing, in the Companyâ€TMs name, any act related to business or transactions that are foreign to the Companyâ€TMs purposes.

 

Article V

Fiscal Council

 

Section 24.            The Company shall have a Fiscal Council, which shall not function on a permanent basis. When installed, the Fiscal Council shall be composed of three sitting and three alternate members appointed by the General Meeting of shareholders, who shall fix their compensation.

 

TEXT_SP  8915302v1  7474/36 

 

 

 

Sole paragraph. Each term of the Fiscal Council shall end in the first General Meeting of shareholders held after its installation. 

 

Article VI

Shareholdersâ€TM Agreements

 

Section 25.            The Company shall observe all the terms of any shareholders agreements filed at its headquarters (the â€œShareholdersâ€TM Agreementâ€�). The Companyâ€TMs management shall refrain from registering transfers of shares made contrary to the provisions of such shareholdersâ€TM agreements, and the chairmen of General Meetings of shareholders and of meetings of the Board of Directors shall refrain from computing votes cast contrary to such agreements, and take the other measures contemplated in article 118, paragraphs 8 and 9 of Law 6,404/76. In case of any conflict between this Bylaws and a Shareholdersâ€TM Agreement, the provisions of the Shareholdersâ€TM Agreement shall prevail.

 

Article VII

Fiscal Year, Balance Sheets and Profits

 

Section 26.            The fiscal year begins on January 1st and ends on December 31st of each year. At the end of each fiscal year, the financial statements required under applicable law shall be drawn up on the basis of the Companyâ€TMs commercial accounting records, after appreciation by the Board of Directors.

 

Section 27.            Of the annual accounting net profit adjusted in accordance with article 202 of Law 6,404/76 (â€œAdjusted Net Profitâ€�):

 

(a)                a minimum mandatory dividend equivalent to [*] of the Adjusted Net Profit shall be paid to the shareholders;
  
 (b)               an additional dividend equivalent to [*] of the Adjusted Net Profit shall be paid to the shareholders, except to the extent this amount is retained to fund a capital budget (orÃ§amento de capital);
  
 (c)                the balance not allocated to a capital budget shall be allocated to a statutory reserve for operations, projects and investments [with the objective of [â—�] (â€œInvestment Reserveâ€�), unless otherwise approved by the shareholders, provided that in no event (i) such amount exceeds [*] of the Adjusted Net Profit and (ii) such statutory reserve exceeds [*] of the companyÂ ́s stock capital; and
  
 (d)               any remaining amount not allocated in accordance with this section shall be distributed to the shareholders as an additional dividend or interest on net equity (juros sobre o capital prÃ3prio).

 

Â§1.              Dividends that are not claimed within three years from the date of publication of the act that authorized their distribution shall revert to the Company.

 

Â§2.              In case the cash available for the distribution of dividends is not sufficient for full payment of such dividends in any given fiscal year, the unpaid portion of such applicable dividends shall be allocated to the unrealized profit reserve (reserva de lucros a realizar) and 

distributed as dividends to shareholders as soon as the Company finally realizes such profit, in accordance with Law 6.404/76.

TEXT_SP  8915302v1  7474/36 

 

 

 

 

Section 28.            The Board of Directors may approve that balance sheets for half-years, quarters, or for shorter periods are drawn-up and declare dividends or interest on net equity (juros sobre o capital prÃ3prio) from the profit shown on such balance sheets, subject to the limits imposed by law, and may declare interim dividends from accumulated profits or profit reserves. Dividends and interest on net equity (juros sobre o capital prÃ3prio) so declared shall constitute an advance on the mandatory dividend.

 

Section 29.            By resolution adopted by the Board of Directors, the Company may credit or pay to shareholders interest on net equity (juros sobre o capital prÃ3prio), in the manner provided for by applicable law.

 

Article VIII

Dissolution, Liquidation, and Transformation

 

Section 30.            The Company will enter into dissolution, liquidation and extinction in the cases provided for by law, or by resolution adopted by the shareholders in a General Meeting.

 

Â§1.              The manner of liquidation shall be determined by the shareholders at a General Meeting, at which an Audit Committee shall be elected to operate during the period of liquidation.

 

Â§2.              The shareholders in a General Meeting shall appoint the liquidator, fix his compensation, and establish the directives for his work.

 

Section 31.            The Company may change its form of organization into any type provided for by law, by resolution approved by a majority of votes at a General Meetings of shareholders. 

 

Article IX

Miscellaneous; Dispute Resolution

 

Section 32.            Any dispute, controversy or claim arising out of or relating to these Bylaws and/or to any document executed by any of the shareholders and/or by the Company ("Dispute") shall be solved by arbitration, in accordance with the following provisions: 

 

Â§1.              The Dispute shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the "ICC Rules") in force at the time of the request for arbitration.

 

Â§2.              The arbitration shall be conducted by 3 (three) arbitrators (â€œArbitral Tribunalâ€�), one nominated by the claimant, another one nominated by the respondent, and the two (2) party-appointed arbitrators shall designate a third arbitrator, who shall act as president of the Arbitral Tribunal, within 15 (fifteen) days after the confirmation of the later-appointed of these two arbitrators. In case there are multiple parties, whether as claimant or as respondent, the multiple claimants, jointly, and/or the multiple respondents, jointly, as the case may be, shall appoint one arbitrator.  If any of the three arbitrators is not nominated within the time prescribed in the ICC Rules or above, such arbitrator shall be appointed by the Court of Arbitration of the International Chamber of Commerce (the â€œICC Courtâ€�).  

 

TEXT_SP  8915302v1  7474/36 

 

 

 

§3.              The arbitration shall be held in the City of São Paulo, Brazil, where the arbitral award shall be deemed rendered. The arbitration procedure shall be held in English and in accordance with Brazilian Law, but evidence may be produced by the parties in Portuguese without the need for translation. The Arbitral Tribunal shall not act as amiable compositeurs or decide the merits of the Dispute ex aequo et bono.

 

§4.              The Parties elect the courts of the City of São Paulo, State of São Paulo, exclusively for granting interim or conservatory measures before the constitution of the Arbitral Tribunal. Even in instances where a provisional judicial relief has been sought or obtained, the merits of the Dispute shall always be decided by the Arbitral Tribunal. For the avoidance of doubt, among the remedies that may be ordered or awarded by the Arbitral Tribunal is the remedy of specific performance of contractual obligations.

 

§5.              Except for attorney’s fees, which shall be borne individually by each of the parties to the arbitration, all expenses, costs and legal fees shall be borne by one or all parties as determined by the Arbitral Tribunal. 

 

§6.              The parties shall keep the confidentiality of each and every information concerning the arbitration.

 

§7.              If one or more Disputes arise under these Bylaws and/or to any document executed by any of the shareholders and/or by the Company, then any or all such Disputes may be brought into a single arbitration. The ICC Court may, at the request of any of the parties, consolidate the arbitral proceeding with any other pending arbitral proceeding involving this Bylaws and/or any other document executed by any of the shareholders and/or by the Company. If one or more arbitrations are already pending with respect to a Dispute under any such agreement, then any party to a new dispute or any subsequently filed arbitration brought under any such document may request that such new dispute or any subsequently filed arbitration be consolidated into any prior pending arbitration.

 

§8.              The new dispute or subsequently filed arbitration shall be so consolidated, provided that the ICC Court determines that: (i) the new dispute or subsequently filed arbitration presents significant issues of law or fact common with those in the prior pending arbitration; (ii) no party to the new dispute or prior pending arbitration would be prejudiced; and (iii) consolidation under these circumstances would not result in undue delay for the prior pending arbitration.  

 

§9.              The consolidation order shall be final and binding upon all the parties involved in the consolidated proceedings. The arbitrations shall be consolidated into the arbitration that commenced first. Upon such an order of consolidation, the parties will promptly dismiss any arbitration proceeding, the subject of which has been consolidated into another arbitral proceeding.

 

 

TEXT_SP  8915302v1  7474/36 

 

 

 

Schedule 6.3(a)

Material Amendments to the By-Laws

 

In addition to the matters described in the Section 6.3 of this Agreement, the following matters in the Company, or in any of its Subsidiaries (including TECAR SPC, exclusively with relation to items “a”, “c”, “h” and “j” below) shall require the affirmative vote of the JKTC Parties or of the Director appointed by the JKTC Parties, as applicable:

a.         material changes to the Company’s corporate purpose;

b.         the creation of new species or classes of shares;

c.         changes to the rights attributed to each specie or class of share;

d.         changes to the structure, and/or number of members, operation and the authority granted to the board of directors, if such changes violate JKTC Parties’ rights under this Agreement; 

e.         changes to the authority granted to the shareholders meetings, if such changes violate JKTC Parties’ rights under this Agreement;

f.          changes to approval quorums of the shareholders meetings and board of directors meetings, if such changes violate JKTC’s rights under this Agreement; 

g.         changes in the determination of the value to exercise the withdrawal right;

h.         the transformation into a different corporate type (ex. S.A. to Ltda.);

i.           changes to the form of dispute resolution; and 

j.           any other changes to the by-laws that violate rights attributed to JKTC under this Agreement.

 

 

 

TEXT_SP  8936455v1  7474/38 

 

 

 

Schedule 6.3(k)

List of Material Agreements

 

The amendments to the following agreements shall require the affirmative vote of JKTC or the Director appointed by JKTC at the Company or TECAR SPC, as applicable, only to the extent that such amendments are voluntary and cause or will cause, as determined at the time the relevant amendment is made, a Material Adverse Effect: 

a.         [*];

b.        [*];

c.         [*]; and

d.        [*]. 

For purpose of this schedule, “Material Adverse Effect” shall mean any change or event, including but not limited to ordinary or extraordinary force majeure event, that is or will be, as determined at the time such change or event occurs, materially adverse to the financial, tax or accounting condition or results of operations of the Business of Namisa, the Company, their Subsidiaries and/or of the CSN Iron Ore Division, taken as a whole, other than any change or event relating to or arising out of: (i) general economic conditions (including changes or events in the financial, banking, currency and capital markets) in Brazil; (ii) conditions generally affecting the industries in which the Company, Namisa, their Subsidiaries and/or CSN Iron Ore Division operate; (iii) changes in applicable Law or in IFRS; or (iv) any actions taken, or failures to take action, or such other changes or events, in each case, to which JKTC Parties and/or CSN, as applicable, have expressly consented.

TEXT_SP  8932723v2  7474/38 

 

 

 

SCHEDULE 6.5.1

 

	
 

PROCURAÇÃO

 

	
 

POWER OF ATTORNEY

 

	
Pelo presente instrumento particular de mandato, POSCO, sociedade organizada e existente segundo as leis da Coréia, com sede em 892 Daechi 4-dong Gangnam-gu, Seoul, 135-777, Coréia e China Steel Corporation, sociedade organizada e existente segundo as leis da China, com sede em 88 Chenggong, 2nd Roard, Qianzhen, Kaohsiung 80661, Taiwan, República da China (doravante referida como a “Outorgantes”), neste ato nomeiam e constituem irrevogavelmente [BJIOC SPC], sociedade organizada e existente segundo as leis da República Federativa do Brasil, com sede em [·] (doravante referido como “Outorgada”), como procuradora, para, em nome das Outorgantes e nos termos do Acordo de Acionistas da Congonhas Minérios S.A, sociedade anônima, com sede na cidade de Congonhas, Minas Gerais, na Estrada Casa de Pedra, sem número, parte, CEP : 36.415-000, inscrita no CNPJ/MF sob o no 08.902.291/0001-15 (doravante referida como a “Sociedade”) celebrado em [•] (“Acordo de Acionistas”), praticar todos ou quaisquer dos seguintes atos:

 

	
By this Power of Attorney, POSCO, a company existing under the laws of Korea, with its head offices at 892 Daechi 4-dong Gangnam-gu, Seoul, 135-777, Korea and China Steel Corporation, a company existing under the laws of China, with its head offices at 88 Chenggong, 2nd Roard, Qianzhen, Kaohsiung 80661, Taiwan, Republic of China (hereinafter referred to as “Grantors”), hereby irrevocably appoint [BJIOC SPC], a corporation duly organized and existent under the laws of Federative Republic of Brazil, having its head offices at [·] (hereinafter referred to as “Grantee”), their attorney-in-fact, to act on their behalf in the terms of the Shareholders’ Agreement of Congonhas Minérios S.A, a Brazilian corporation with headquarters in the city of Congonhas, State of Minas Gerais, at Estrada Casa de Pedra, without number, part, CEP: 36.415-000, enrolled with Taxpayers Registry under No. 08.902.291/0001-15 (hereinafter referred to as “Company”) executed on [•] (“Shareholders’ Agreement”) and take any or all of the following actions:

	
1. comparecer e votar em nome das Outorgantes, tomando parte em assembleias gerais, ordinárias ou extraordinárias, incluindo Assembleia Especial de Preferencialista e em reuniões prévias da Sociedade, nos termos do Acordo de Acionistas;

 

	
1. attend and vote, in the name of the Grantors, and otherwise take part in any and all general meetings, whether ordinary or extraordinary, including special meetings of preferred shareholders (Assembléia Especial de Preferencialista) and the prior meetings held by or in connection with the Company, in the terms of the Shareholders’ Agreement;

 

	
2. em geral, praticar todos os demais atos que se fizerem necessários ao bom e fiel cumprimento do presente mandato, incluindo, mas não se limitando, a assinatura dos respectivos livros ou outros documentos como se as Outorgantes estivessem presentes e os tivesse praticado pessoalmente.

 

	
2. generally, do and execute all such other acts as may be necessary for the purposes aforesaid, including, but not limited to the execution of the relevant books or documents as if the Grantors were personally present and had done the same.

 

	
Esta procuração será válida pelo mesmo período de vigência do Acordo de Acionistas, nos termos do art. 118, §7o da Lei 6.404/76 . 

	
This power-of-attorney shall remain valid for the same term of effectiveness of the Shareholders’ Agreement, pursuant to article 118, paragraph 7, of Law 6,404/76 .

 

	
Esta procuração é celebrada de maneira irrevogável e irretratável, sendo ineficaz a sua revogação pelos Outorgantes nos termos dos artigos 684 e seguintes do Código Civil brasileiro, por constituir condição de negócio conforme disposto no Acordo de Acionistas.

 

EM TESTEMUNHO DO QUE, as Outorgantes providenciaram para que seu representante devidamente autorizado assinasse esta Procuração, em [•] de [•] de 2015.

 

	
This power-of-attorney is irrevocable and irreversible, and its revocation by the Grantors shall be ineffective pursuant to articles 684 et seq of the Brazilian Civil Code, as it constitutes a condition of a transaction as provided for in the Shareholders Agreement.

 

IN WITNESS WHEREOF, the Grantors have caused their duly authorized representative to sign and execute this Power of Attorney on this [•]th day of [•], 2015.

TEXT_SP  8859522v1  7474/38 TEXT_SP/8808006v7/7474/36

 

 

 

 

_________________________________

Por/By: [•]

Nome/Name:

Cargo/Title:

 

TEXT_SP  8859522v1  7474/38 TEXT_SP/8808006v7/7474/36

 

 

 

SCHEDULE 6.6

JKTC Minimum Rights

 

1.      [*]; 

 

2.      [*]: 

 

(i)        [*];

 

(ii)      [*];

 

(iii)    [*];

 

3.      [*];

 

4.      [*]; 

 

5.      [*].

TEXT_SP  8936461v1  7474/38 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TRANSITIONAL AGREEMENT

 

Document Filed Separately

 

TEXT_SP/9283989v1/7474/36

 

 

 

Exhibit 2.1(vi)(a) – Specialized Firms

 

 

1.      PricewaterhouseCoopers

 

2.      Deloitte Touche Tohmatsu

 

3.      Ernst & Young

 

4.      KPMG

 

 

 

 

 

 

 

TEXT_SP  8936540v1  7474/38 

 

 

Schedule 2.1(ix) – Pre-Money Equity Value – Subscription Bonus

 

Congonhas Minérios S.A.

CNPJ/MF No. 08.902.291/0001-15

NIRE 31300025144SUBSCRIPTION BONUS (BÔNUS DE SUBSCRIÇÃO)

Certificate No. 01/01

 

Issuer:

 

Congonhas Minérios S.A., a closely-held corporation (companhia fechada) incorporated, organized and existing under the Laws of Brazil, having its registered office at the Municipality of Congonhas, State of Minas Gerais, at Estrada Casa de Pedra, without number, part, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N. 08.902.291/0001-15, having its corporate acts registered at the Board of Trade of Minas Gerais (JUCEMG) under NIRE number 31300025144, herein represented pursuant to its Bylaws (“Company”).

 

Holder:

 

Companhia Siderúrgica Nacional, a publicly-held corporation (companhia aberta) incorporated, organized and existing under the Laws of Brazil, having its registered office at the Municipality of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima, 3400 – 20th floor, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N. 33.042.730/0001-04, herein represented pursuant to its by-laws (“Holder”).

 

1. Issuance and Object

 

1.1. This Subscription Bonus (as defined below) is issued pursuant to the resolution taken at the Company’s Extraordinary General Meeting held on [Drop Down Date] (“EGM”). 

 

1.2. This Subscription Bonus is attributed to the Holder as an additional advantage for the subscription of shares by the Holder in the capital increase approved in the EGM.

 

1.3. This Subscription Bonus is issued in accordance with Section 2.1(ix) of the Investment Agreement entered into among the Holder, Brazil Japan Iron Ore Corporation, POSCO, China Steel Corporation, the Company and Nacional Minérios S.A. dated [Execution Date of the IA] (“Investment Agreement”). This Subscription Bonus is subject to the terms and conditions set forth herein as well as those set forth in the Investment Agreement. Capitalized terms used in this Subscription Bonus and not otherwise defined herein shall have the meaning ascribed to them in the Investment Agreement.

 

1.4. This title gives the Holder the right to subscribe for the quantity of common shares, registered and without par value, calculated pursuant to Section 3.1.1 below and shall be exercised through the presentation of this Certificate and payment of the issuance price for the underlying shares, in the terms and conditions set forth in this Subscription Bonus and in the Investment Agreement. 

 

2. Company and Capital Stock

 

2.1. The Company was incorporated on [●], for an indefinite term, with head offices in the Municipality of Congonhas, State of Minas Gerais, at Estrada Casa de Pedra, without number, part.

TEXT_SP  8936541v1  7474/38 

 

 

 

2.2. The
capital stock of the Company, entirely subscribed and paid in, currently
amounts to R$[●], divided into [●]  common shares, all registered,
with no par value, as set forth by the By-laws amended and restated pursuant to
the Extraordinary General Meeting held on [Drop
Down Date].

 

2.3.  The
Company is authorized to issue, without amendment to its Bylaws, up to
[●] additional common shares, by means of resolution of the Board of
Directors, regardless of statutory reform. 

 

3. Exercise of Subscription Bonus

 

3.1. This
Certificate corresponds to one subscription bonus (bônus de subscrição) issued
by the Company, with the following characteristics (“Subscription Bonus”):

 

3.1.1. Number and Type of Shares: Subject to the provisions of Article VI of the
Investment Agreement, this Subscription Bonus entitles the Holder to subscribe for
a quantity of new common shares issued by the Company, without par value (“New
Common Shares”), for the Exercise Term, calculated as follows:

 

(i)    
Pre-Money Valuation. The quantity of New Common Shares shall depend on the
Company’s pre money equity value related to the Liquidity Event (“Pre-Money
Valuation”) subject to the provisions of the Investment Agreement. The
Pre-Money Valuation shall be calculated in accordance with (i) the price per
share agreed and issued for the Qualified Private Sale or the price per share
set forth in the announcement of the beginning of the Qualified IPO (Anúncio
de Início), as the case may be, and (ii) the total number of shares of the Company,
excluding the shares to be issued by the Company for the Liquidity Event; 

 

(ii)  
Maximum Equity Value. If the Pre-Money Valuation is equal, in Brazilian
reais, [*] or greater (“Maximum Equity Value”), the Pre-Money Valuation
shall be deemed to be [*] for the purpose of the Liquidity Event Conversion;

 

(iii)
Capital Increase prior to the
Liquidity Event. In the event the
Company’s capital stock has been increased before an occurrence of the
Liquidity Event, the Minimum Equity Value and the Maximum Equity Value shall be
increased by the same amount of the increased amount of the Company’s capital
stock and, as a result, the new amounts calculated as set forth herein shall be
considered as the Minimum Equity Value and the Maximum Equity Value. 

 

(iv)
Conversion Ratio. The number of New Common Shares in the Company that the
Holder shall be entitled to receive as a result of the exercise of the Subscription
Bonus shall vary linearly so that JKTC shareholding ratio in the Company shall
be JKTC’s top shareholding position in case the Pre-Money Valuation of the
Liquidity Event is the Minimum Equity Value (“JKTC Liquidity Event Top
Shareholding Position”), and shall be JKTC bottom shareholding position in
case the Pre-Money Valuation of the Liquidity Event is the Maximum Equity Value
(“JKTC Liquidity Event Bottom Shareholding Position”). JKTC Parties’ top
shareholding position, bottom shareholding position and final shareholding
position shall be calculated as follows:

 

TEXT_SP  8936541v1 
7474/38 

 

  

 

JKTC Liquidity Event Top Shareholding Position = JKTC Top Shareholding Position Post Merger Sale of Shares

 

JKTC Liquidity Event Bottom Shareholding Position = JKTC Bottom Shareholding Position Post Merger Sale of Shares

 

JKTC Liquidity Event Final Shareholding Position = [*]

 

(v)   New Common Shares = [*]  

 

3.1.2. Price and Payment: The issue price of the New Common Shares shall be ten thousand Brazilian Reais (R$10,000.00) for all New Common Shares issued by the Company as a consequence of the exercise of the Subscription Bonus, which shall be fully paid by the Holder. 

 

3.1.3. Exercise Term: The Holder shall exercise the Subscription Bonus within seven (7) days from (i) the Liquidity Event, in case of an IPO; or (ii) the 7th day after JKTC has received evidence of the Qualified Private Sale in accordance with the Investment Agreement. 

 

3.1.4. Dividends: Upon conversion of this Subscription Bonus, the underlying Shares shall be entitled to any dividends not yet declared to the shareholders.

 

3.1.5. Rights: The Shares shall grant to the Holder the same benefits and rights of the common shares existing on the date hereof.

 

4. Miscellaneous

 

4.1. Re-issue: In the event of loss, theft or destruction of this certificate, and after proof, by the Holder, of such loss, theft or destruction, the Company shall promptly cancel this certificate and immediately issue another, in the same terms and conditions, to replace it.

 

4.2. Notice: Except as otherwise provided, all notices and other communications required to be given under this Subscription Bonus shall be made in writing and sent to the addresses indicated in the preamble.

 

4.3. Governing Law: This Subscription Bonus, as well as all of its terms and conditions, shall be governed and construed in accordance with the laws of the Federative Republic of Brazil.

 

4.4. Dispute Resolution: Any disputes that may arise out of this Subscription Bonus shall be solved by arbitration pursuant to the provisions of Section 9.2 of the Investment Agreement.

 

The Company declares to have issued to the Holder one (1) Subscription Bonus issued in accordance with the Investment Agreement.

 

	

   Congonhas, [Drop Down Date].

Congonhas Minérios S.A.

 

TEXT_SP  8936541v1  7474/38 

 

 

Exhibit 2.1(x) – Transferred Employees

Procedures that shall be accomplished in order to transfer the Transferred Employees from CSN to Congonhas Minérios

A)  Procedures to be accomplished on the Drop Down Date: 

 

(i)          CSN shall make an entry in each Transferred Employee’s Work and Social Security Card (Carteira de Trabalho e Previdência Social - “CTPS”) in the section entitled “General Annotations” (Anotações Gerais) and on the employee record (Ficha de Registro or “Record”) in the field entitled “Observations” (Observações), stating that the relevant Transferred Employees’s employment contract is assumed by Congonhas Minérios;

 

(ii)        CSN shall send an authenticated copy of the Records to Congonhas Minérios, and Congonhas Minérios shall attach the authenticated copies to its new Records, which shall contain a transcription of all the information contained on the former Record, with no change to the date in which each Transferred Employees was hired; and

 

(iii)      With respect to the Transferred Employees’ Severance Guarantee Fund (Fundo de Garantia do Tempo de Serviço –  FGTS) accounts and their Social Security (INSS) rights and contributions, when CSN completes the last FGTS deposit and Social Security Information form (Guia de Recolhimento do FGTS e Informações à Previdência Social –  GFIP), it shall enter the code “N2” in the field entitled “Movement” (Movimentação), which refers to “transfer of the employee to another company which assumes labour obligations and charges, without termination of the employment agreement”.

 

B)  Additional procedures to be accomplished after the Drop Down Date:

 

(i)          After the first FGTS deposit by Congonhas Minérios has been made, Congonhas Minérios shall complete and send to the Caixa Econômica Federal (the Federal Savings and Loan Bank) the form entitled “Application for Transfer of FGTS Accounts” (Pedido de Transferência de Contas Vinculadas do FGTS – PTC) to transfer the balance of the employee’s FGTS account with the former employer to the FGTS account opened by the new employer; and

 

(ii)        CSN and Congonhas Minérios shall record the “transfer of employees” in their “General Register of Employees and Former Employees (Cadastro Geral de Empregados e Desempregados – CAGED) and Annual Company Information Report (Relação Anual de Informações Sociais – RAIS). CSN records the transfer in the “Exit due to transfer” field (Saída por transferência) and Congonhas Minérios in the field entitled “Entry due to transfer” (Entrada por transferência). 

 

 

 

 

EXHIBIT 2.1(xi) – CERTAIN TERMS AND CONDITIONS AGREED FOR THE CSN OFF-TAKE AGREEMENT

 

(a)               Duration of the CSN Off-Take Agreement: Unless earlier terminated in accordance with the terms of the CSN Off-Take Agreement, the CSN Off-Take Agreement shall be in full force and effect from the Drop Down Date for a period of 40 years and shall be automaticaly renewed for consecutive additional periods of 10 years. The terms and conditions of the CSN Off-Take Agreement shall be discussed for review in good faith by the parties every [*] years during the term thereof.

 

(b)               During the term of the contract, the Iron Ore Price from the Drop Down Date onwards shall reflect an incentive for long term contract in the amount of [*] on the FOT Train Loading Terminal price for a basic annual quantity of up to [*] tons.

 

(c)               Contractual Quantity: Up to [*] tons for each ore year (basic annual quantity).

 

(d)               The specifications of products to be delivered under the CSN Off-Take Agreement may be defined therein based on the execution and implementation of the Master Plan and in good faith negotiations between the parties thereto taking into consideration the discussions between such parties in the past.

 

(e)               Payment Terms and Condition: payment shall be made by means of a telegraphic transfer remittance of immediately available funds to a bank account designated by seller, up to the 15th day of the month following the month of issuance of the invoice.

 

(f)        The CSN Off-Take Agreement shall be executed on the Drop Down Date.

 

(g)        The FOT Train Loading Terminal price shall be calculated based on the formula below: 

(i)        [*]

 

            (ii)       [*]

 

            (iii)      [*].

 

TEXT_SP  8936547v1  7474/38 

 

 

EXHIBIT 2.1. (xii) – CERTAIN TERMS AND CONDITIONS AGREED FOR THE PORT SERVICES AGREEMENT

 

(a)               Parties: CSN and Congonhas Minérios.

 

(b)               Execution Date: The Port Services Agreement shall be executed on the Drop Down Date.

 

(c)               Duration: Unless earlier terminated in accordance with the terms of the Port Services Agreement, the Port Services Agreement shall be in full force and effect from the Drop Down Date until the termination of the TECAR Lease Agreement, as amended from time to time.

 

(d)               Purpose: provision of port services for the import of raw materials and general componentes (including, but not limited to, coke, coal and clinker).

 

(e)               Contractual Quantity: Up to [•] million tons for each year (basic annual quantity).

 

(f)                Payment Terms and Condition: payment shall be made by means of a telegraphic transfer remittance of immediately available funds to a bank account designated by Congonhas Minérios, up to the [15th ] day of the month following the month of issuance of the invoice.

 

(g)        Price: During the term of the Port Services Agreement, the price from the Drop Down Date onwards shall reflect the costs incurred by Congonhas Minérios [*] (as defined in this Investment Agreement) imposed on the provision of the services), with no additional sums, charges and/or fees of any nature payable for the services rendered. The price will be reviewed each year according to costs adjustments.

 

(h)       Access: CSN shall be entitled to the same level, timing and priority of services and access to the port facilities as that provided by Congonhas Minérios to other users of TECAR. Congonhas Minérios shall not unfairly discriminate against CSN by refusing to provide a service  or access to facilities at all, or on the same timely basis, as such service or access to TECAR ́s facilities is provided to other users of TECAR.

 

(i)        Other services: At the request of CSN, Congonhas Minérios and CSN may negotiate in good faith the provision of any other port services not specifically mentioned herein to CSN. CSN acknowledges that Congonhas Minérios has no obligation whatsoever to provide any services to CSN other than those specifically determined as an obligation or responsibility of Congonhas Minérios under the Port Services Agreement. The terms and conditions determined herein shall not apply to such other services, except as otherwise agreed between CSN and Congonhas Minérios. 

 

(j)        Applicable Law: Laws of Brazil.

 

(k)       Dispute Resolution: Arbitration, on the same terms of this Investment Agreement.

 

 

TEXT_SP  8936534v1  7474/38 

 

 

Schedule 3.2 (viii)

Merger Sale of Shares – Payment Conditions

 

Pursuant to Section 3.2(viii) of the Investment Agreement, the JKTC Parties shall sell to CSN and CSN shall buy from the JKTC Parties, in the proportions indicated in the table below: (a) common shares representing [*] of Congonhas Minérios’s capital stock, based on an equity value of Congonhas Minérios of [*] and (b) the equivalent to the Incremental Equity Percentage, for [*], net of Brazilian Taxes, in accordance with Section 3.5 of the Investment Agreement. 

 

	

   JKTC Party
	

   Sale Percentage – 1st Tranche
	

   Sale Percentage – 2nd Tranche
	

   Incremental Equity Percentage
	

   Total Equity Percentage to be sold to CSN
	

   Amount to be received by each JKTC Member

	

   BJIOC
	

   [*]
	

   [*]
	

   [*]
	

   [*]
	

   [*]

	

   POSCO
	

   [*]
	

   [*]
	

   [*]
	

   [*]
	

   [*]

	

   CSC
	

   [*]
	

   [*]
	

   [*]
	

   [*]
	

   [*]

	

   Total:
	

   [*]
	

   [*]
	

   [*]
	

   [*]
	

   [*]

 

All numbers and amounts contained in the table above are just for illustrative purposes and shall be confirmed before the Date of the Merger.

 

The payment due to each JKTC Party under the Merger Sale of Shares shall be made by CSN to the JKTC Parties’ bank accounts to be informed by them within 15 (fifteen) days before the Date of the Merger.

 

Capitalized terms used in this document and not otherwise defined herein shall have the meaning ascribed to them in the Investment Agreement.

 

 

 

 

TEXT_SP/8938319v1/7474/36

 

 

EXHIBIT 3.2(xi) – CERTAIN TERMS AND CONDITIONS AGREED FOR THE JKTC OFF-TAKE AGREEMENTS

 

(a)               Duration of the JKTC Off-Take Agreement: Unless earlier terminated in accordance with the terms of the JKTC Off-Take Agreements or due to the termination of the Shareholders’ Agreement, the JKTC Off-Take Agreements shall be in full force from the Date of the Merger for a period of 40 years and shall be automatically renewed in acordance with the terms of renewal of the Shareholder ́s Agreement. The terms and conditions of the JKTC Off-Take Agreements shall be discussed for review in good faith by the parties every [*] years during the term thereof.

 

(b)               During the term of the contract, the Iron Ore Price from the Date of the Merger onwards shall reflect an incentive for long term contract in the amount of [*] on the FOB Itaguaí price for a basic annual quantity of up to [*] tons . 

 

(c)               Contractual Quantity: Up to [*] tons for each ore year (basic annual quantity).

 

(d)               The specifications of products to be delivered under the JKTC Off-Take Agreements shall be defined therein based on the execution and implementation of the Master Plan and in good faith negotiations between the parties thereto taking into consideration the discussions between such parties in the past.

 

(e)               The JKTC Off-Take Agreements shall be executed on the Date of the Merger.

TEXT_SP  8936549v1  7474/38 

 

  

 

Exhibit 3.2(xii) – Itochu Marketing Services Agreement

 

CONSULTING AGREEMENT

 

 

By this private instrument, on one side,

 

ITOCHU CORPORATION, a corporation duly incorporated and existing in accordance with the Laws of Japan, headquartered in Japan (hereinafter referred to as “ITOCHU”), 

 

and, on the other,

 

[CONGONHAS MINÉRIOS], a corporation incorporated, organized and existing under the laws of Brazil, having its registered office at [·], enrolled with CNPJ/MF under No. [·] (hereinafter referred to as “NEWCO”)

 

(ITOCHU and NEWCO are also referred to individually as “Party” and, jointly, as “Parties”).

 

WHEREAS:

 

(A)       NEWCO is engaged in, among other activities, the exploitation of iron ore mining activities and associated port transportation infrastructure, in any part of Brazil or abroad, comprising the development of mineral deposits, research, extraction, sale of iron ore and byproducts derived from mining activities, beneficiation, industrialization, transportation, loading, rendering of mining services, import and export of iron ore, as well as the exploitation of any other directly or indirectly related activities, such as the purchase of iron ore;

 

(B)       ITOCHU is an indirect shareholder of NEWCO and a trading company with large experience in the sales of iron ore, including Chinese, Japanese, Indian and other Asian markets (“Relevant Markets”);

 

(C)       NEWCO is interested in increasing its sales of iron ore in the Relevant Markets and maintaining its competitiveness therein;

 

(D)       The Parties agree that ITOCHU has the required expertise to assist NEWCO for the purposes stated above and, therefore, NEWCO has decided to hire ITOCHU to provide certain marketing consulting services to NEWCO, and ITOCHU agreed to provide such services to NEWCO;

 

NOW, THEREFORE, the Parties resolve to enter into this Consulting Agreement (hereinafter referred to as the “Agreement”), which shall be governed by the following clauses and conditions:

 

 

CLAUSE ONE – SERVICES.

 

1.1       ITOCHU shall perform the marketing consulting services and deliver the work product as described in Exhibit A hereto (“Statement of Work”) to NEWCO. The Statement of Work may be updated and amended by the Parties from time to time upon written agreement.

 

1.2       ITOCHU shall perform the marketing consulting services and deliver the work product as specified in the Statement of Work (“Services”) in accordance with the terms and conditions of this Agreement, and in all cases in a prompt, diligent and workmanlike manner. From time to time the Parties shall mutually agree on time schedules, format of reports and other requirements applicable to specific Services.

 

TEXT_SP  8855498v13  7474/36 

 

 

 

1.3.      ITOCHU shall provide the Services on a
non-exclusive basis to NEWCO. For the avoidance of doubt, nothing herein shall
prevent ITOCHU from providing similar or equal services to any third party
during the Term hereof. 

 

1.4.      ITOCHU
shall provide the
Services
at ITOCHU’s locations or at other locations as agreed by the Parties. 

 

 

CLAUSE
TWO – COMPENSATION
AND PAYMENT CONDITIONS.

 

2.1.      NEWCO
shall pay to ITOCHU an [*] (“Fee”), net of any taxes,
including new taxes that might be created after the date of this Agreement. The
Fee
shall be adjusted annually in accordance with US Producer Price Index. Subject to the
foregoing, the Fee shall be paid by NEWCO as follows: 

	
  Term

  	
  Fee

  	
  Payment
  Date

  
	
  January
  1 ~ March 31

  	
  Fee:
  [*]

  

  

  	
  [*]

  
	
  April
  1 ~ June 30

  	
  Fee:
  [*]

  

  

  	
  [*]

  
	
  July
  1 ~ September 30

  	
  Fee:
  [*]

  

  

  	
  [*]

  
	
  October
  1 ~ December 31

  	
  Fee:
  [*]

  

  

  	
  [*]

  

 

2.2.      ITOCHU
shall submit on a quarterly basis invoices for the Fee to NEWCO. Each invoice
shall be submitted to NEWCO by [date] of each calendar quarter. Late payments
shall be subject to 2% penalty plus interest rate of 1% per month applied on a pro
rata basis.

 

 

CLAUSE THREE –
TERM AND TERMINATION

 

3.1.      This
Agreement shall be effective for an initial term of 15 (fifteen) years as from
the date of execution hereof, starting on [date] and ending on [date] (“Initial
Term”). At the end of the Initial Term, this Agreement shall be
automatically renewed for successive periods of 5 (five) years (each a “Renewal
Term” and collectively with the Initial Term the “Term”) on the sole
condition that the Shareholders Agreement entered into by and among
[●],[●],[●],[●],[●] and [●], dated
[●] (“Shareholders Agreement”) is effective at the end of the then-current
Renewal Term. The Parties acknowledge and agree that this Agreement may not be
early terminated or not renewed except as otherwise expressly provided in
Section 3.2 and in Section 3.3.

 

3.2.      The
Parties acknowledge and agree that this Agreement may not be terminated by
either Party in any event, except:

 

(i)         by
mutual agreement of the Parties;

 

(ii)        by
ITOCHU upon 90-days prior notice to NEWCO at any time;

 

(iii)       in
case of force majeure or acts of God preventing the Parties from performing
their obligations  hereunder on a
definitive basis, pursuant to the concept of force majeure set forth in article
393 sole paragraph of the Brazilian Civil Code (“Force Majeure”), provided that
the Parties shall, for at least 1 year after the occurrence of the relevant
Force Majeure, make their commercially reasonable efforts to find an alternate
way to continue performing the Parties’ obligations and the termination of this
Agreement shall become effective only when (a) such
Force Majeure continues despite the Parties’ effort for the foregoing period;
(b) the Parties’ reasonable efforts are not sufficient to overcome the Force
Majeure; and (c) either Party gives to the other Party a written notice of its
intention to terminate this Agreement;

TEXT_SP  8855498v13 
7474/36 2

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

 

(iv)       in
case of bankruptcy, judicial or extrajudicial receivership, dissolution or
judicial or extrajudicial winding up of any Party;

 

(v)        by
NEWCO, in case of ITOCHU’s Material Breach of this Agreement (as defined
below);
or

 

(vi)       by
ITOCHU, in case of NEWCO’s Material Breach of this Agreement (as defined below).

 

3.2.1    ITOCHU’s Material Breach shall be defined
as any material failure by ITOCHU to perform the Services
hereunder and any related obligations not cured by ITOCHU within 30-days from the
date NEWCO delivers written notice to ITOCHU informing about the material
failure and requesting ITOCHU to cure such failure.

 

3.2.2    NEWCO’s Material Breach shall be defined as
any material failure by NEWCO to perform its obligations hereunder not cured by
NEWCO within 30-days from the date ITOCHU delivers written notice to NEWCO
informing about the material failure and requesting NEWCO to cure such failure.
For the avoidance of doubt, the non-payment by NEWCO of the Fee as a result of
a failure by ITOCHU to provide the Services shall not be considered as NEWCO ́s
Material Breach for purposes of this Agreement.

 

3.2.3    In the event of Force Majeure preventing the
Parties from performing their obligations on a temporary basis, the performance
of this Agreement and payment of the Fee shall be suspended for the duration of
the Force Majeure event and the effects thereof. The Parties shall resume
performance of this Agreement thereafter. 

 

3.3.      This
Agreement shall automatically terminate in the event of termination of the
Shareholders Agreement, in which case this Agreement shall terminate within 90 (ninety) days from the date of
termination of the Shareholders Agreement.

 

3.4.      If
during the Term NEWCO commits a NEWCO ́s Material Breach of this Agreement and
ITOCHU decides to terminate it and, as a result of NEWCO ́s Material Breach,
ITOCHU stops providing Services to NEWCO hereunder, NEWCO agrees that it shall
pay to ITOCHU as liquidated damages (multa compensatória):

 

(i)         if
such termination occurs within the first [*] of the Initial Term, an amount
corresponding to the Fees that ITOCHU would receive from the performance of
this Agreement as if the Services were performed until the end of [*];

 

(ii)
      if such termination occurs after the first [*] of the Initial Term, an
amount corresponding to the Fees that ITOCHU would receive from the performance
of this Agreement [*];

 

provided
that,
in the event of termination of the Shareholders Agreement following termination
of this Agreement under Section 3.4, any amount of liquidated damages (multa
compensatória) outstanding at the time of such termination will no longer
be due by NEWCO to ITOCHU.  For the avoidance of doubt, no liquidated damages (multa
compensatória) will be due by NEWCO to ITOCHU (i) in the event of
termination of this Agreement under Section 3.2 (except as a result of NEWCO ́s
Material Breach in the event that ITOCHU decides to terminate this Agreement
under Section 3.4), (ii) upon termination of the Shareholders Agreement following
termination of this Agreement under Section 3.4 (except for installments due
and payable before the date of termination of the Shareholders Agreement) or (iii)
in the event of termination of this Agreement as a result of termination of the
Shareholders Agreement. 

TEXT_SP  8855498v13 
7474/36 3

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

 

3.4.1    The amount due by NEWCO as liquidated
damages (multa compensatória) under the terms of this Agreement shall be
paid by NEWCO in equal annual installments payable on June 30 of each year. In
the event that June 30 is not a Business Day, as defined in the Shareholders
Agreement, then payment of such annual installment shall be deferred to the
next Business Day. 

 

3.4.2    Below is an example of liquidated damages (multa
compensatória) calculation:

If
NEWCO commits a Material Breach of this Agreement and ITOCHU decides to
terminate it by the end of the [*] anniversary of this Agreement,
NEWCO shall pay a penalty corresponding to [*] (adjusted as provided in
Section 2.1) multiplied by [*]. The total amount due shall be paid by
NEWCO in 5
years
in equal annualinstallments. If the Shareholders Agreement is terminated
following payment of any of the installments, the subsequent installments to be
paid after termination of the Shareholders Agreement will no longer be due by
NEWCO to ITOCHU.

 

            3.4.2.   The
Parties acknowledge and agree that the amount established as liquidated damages
above is a fair compensation to ITOCHU for the early termination of this
Agreement due to the reason described in Section 3.4 above and duly reflects
the Parties’ calculation of ITOCHU’s losses and damages resulting from
termination hereof. 

 

3.5.
     In addition to the liquidated damages provided above (if applicable), in any
event of termination of this Agreement, NEWCO shall pay to ITOCHU a pro rata
portion of the Fee only to the extent of the Services provided preceding such
termination.

 

 

CLAUSE FOUR – RELATIONSHIP
OF THE PARTIES.

 

4.1       Independent
Contractor.  ITOCHU is an independent contractor and is not an agent, a distributor
or an employee of, and has no authority to bind NEWCO by contract, or to act on
behalf of NEWCO or otherwise.  ITOCHU shall perform the Services under the general
direction of NEWCO, but ITOCHU may determine, in its sole discretion, the manner and
means by which the Services are accomplished, subject to the requirement that ITOCHU
will at all times comply with the Applicable Laws (as defined below).

 

 

CLAUSE FIVE – INTELLECTUAL
PROPERTY RIGHTS.

 

5.1       Ownership
of Intellectual Property Rights.  The Parties agree that all intellectual
property rights, including all copyright rights, trade secret rights and any
and all other proprietary rights (collectively, “Intellectual Property
Rights”) resulting from the performance of the Services
hereunder in relation to deliverables that will be created by ITOCHU shall be owned
exclusively by ITOCHU.  ITOCHU hereby grants to NEWCO a limited, non-transferable,
non-assignable and
non-sub-licensable
right to use such Intellectual Property Rights during the Term.  

 

 

CLAUSE SIX – PARTIES’ REPRESENTATIONS AND WARRANTIES

 

6.1.
     NEWCO warrants and represents to ITOCHU on this date, fully
assuming responsibility for the correctness, accuracy, and completeness of such
representations, that:

 

(a)       it
is a corporation duly organized and validly existing under the laws of Brazil;

 

TEXT_SP  8855498v13 
7474/36 4

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

(b)       it obtained all corporate authorizations required to enter into
this Agreement and perform the obligations attributed to it hereunder;

 

(c)       this
Agreement was duly and validly entered into by NEWCO and it represents a legal,
valid, and binding obligation for NEWCO, enforceable in accordance with its
terms;

 

(d)       it
is not insolvent, under composition with creditors, in extrajudicial or
judicial recuperation, or incapable of paying for its obligations, or had its
bankruptcy decreed; and

 

(e)       neither
the execution of this Agreement, nor the performance of the obligations
provided for in this Agreement, and the compliance with the terms and
conditions of this Agreement by NEWCO shall result in a breach, default or
noncompliance of any provision of NEWCO’s bylaws. 

 

6.2.
     ITOCHU’s Representations. ITOCHU
hereby represents to NEWCO on this date, fully assuming responsibility for the
correctness, accuracy, and completeness of such representations, that:

 

(a)       it
is a company duly organized and validly existing under the laws of Japan,
and that it has full legal capacity to hold and operate its facilities and
conduct its businesses as they are currently conducted, being duly capable to
provide the Services hereunder;

 

(b)       it
obtained all corporate or comparable authorizations required to enter into this
Agreement and perform the obligations contained herein;

 

(c)       this
Agreement was duly and validly entered into by ITOCHU and it is an ITOCHU’s
legal, valid, and binding commitment, enforceable against it in accordance with
its terms;

 

(d)       it
is not insolvent, under composition with creditors, in extrajudicial or
judicial recuperation, or incapable of paying for its obligations, or had its
bankruptcy decreed;

 

(e)       neither
the execution of this Agreement, nor the consummation of the businesses
provided for in this Agreement, and the compliance with the terms and
conditions of this Agreement by ITOCHU shall (i) result in a breach or default
or noncompliance with any provision of ITOCHU’s bylaws; (ii) result in a breach
or default or noncompliance with any provision of any agreement, deed or other
instrument binding ITOCHU; or (iii) violate any
provision of any agreement, deed or other instrument binding NEWCO; or (iii) violate any
constitution, law, decree, regulation, rule, decision, sentence or judicial
order, even though ora provisional remedy (hereinafter referred to as “Applicable
Laws”), issued by any federal, state, municipal government, or
governmental, regulatory, administrative, or tax authority, body or commission,
or any court, tribunal or judicial or arbitration body (hereinafter referred to
as “Governmental Authority”) ITOCHU is subject to, which can negatively
affect or prevent the performance of its obligations hereunder;

 

(f)        it
has complied with the Applicable Laws in connection with the provision of marketing
consulting services, including, but not limited to, the laws related to tax,
labor, and social security issues;

 

(g)       it
obtained all licenses, concessions, and authorizations required for complying
with its obligations hereunder;

 

(h)       there
is no judicial, administrative, or arbitration action, proceeding or
investigation, as the case may be, judicial decision, sentence or order, even
though a provisional remedy, capable of preventing, limiting or affecting ITOCHU’s
capacity of complying with its obligations hereunder;

 

(i)         it will perform
the Services with due diligence, care and skill; and 

 

TEXT_SP  8855498v13 
7474/36 5

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

(j)         the Services
provided by ITOCHU
to NEWCO under
this Agreement will not infringe or violate any Intellectual Property Rights or other
right of any third party or any Applicable Laws related to the
provision of marketing consulting services, including, but not limited to, the
laws related to tax, labor, and social security issues. 

 

 

CLAUSE
SEVEN – PARTIES’ SPECIFIC OBLIGATIONS

 

7.1.      Without
prejudice to the other obligations provided in this Agreement, ITOCHU shall:

 

(a)        provide
all personnel deemed necessary (in the reasonable opinion of ITOCHU) for the
performance of the Services; 

 

(b)
      ensure that ITOCHU ́S personnel is suitably qualified to perform the
Services in a due manner;
and

 

(c)        ensure
that all labor laws, regulations, standards and practices applicable to its
personnel are complied with and that such personnel comply with all relevant rules
and policies of NEWCO.

 

7.2       For
the avoidance of doubt, no provision of the Services by ITOCHU or by any
employee or former employee of ITOCHU shall require any person to become or be
deemed to have become an employee of NEWCO.  All employees of ITOCHU engaged in the
provision of the Services shall remain the employees of ITOCHU for the duration
of this Agreement,
subject always to ITOCHU’s right to terminate their employment.  ITOCHU shall
be responsible for hiring its employees for the performance of the Services and
for any obligations related to the hiring and compensation of those employees.

 

7.3       Without
prejudice to the other obligations provided in this Agreement, NEWCO shall:

 

(a)        provide ITOCHU with reasonable cooperation to
allow ITOCHU
to
perform the
Services
efficiently;
and

 

(b)        provide
invitation letters in case required by the relevant authorities to support
ITOCHU ́S requests to obtain visas and other permits needed by the employees to
perform the
Services
hereunder.

 

 

CLAUSE EIGHT – LIMITATION
OF LIABILITY

 

8.1.      Limitation
of Liability.  In no event shall either Party be liable for any indirect
damages (dano indireto) of any kind in connection with this Agreement or
the performance of the
Services,
including lost profits, loss of clients, damages to the reputation and lost
revenues. 

 

8.2.      Exclusion
of Warranties. To the maximum extent permitted by the Applicable Laws and except as
otherwise provided in this Agreement, the Services will be provided "as
is" without warranties, conditions, representations or guaranties of any
kind (except those provided under Clause Six), including but not limited to,
any implied warranties or conditions of merchantability, fitness for a
particular purpose, accuracy of completeness of any information or advice
provided by ITOCHU as part of the Services. 

 

8.4.      Any advice or assistance given by ITOCHU as a result of the provision of the Services hereunder shall not be considered
binding upon NEWCO, and the Parties expressly acknowledge and agree that NEWCO shall be obliged to take its own business decisions independently from ITOCHU’s advice and assistance. It is hereby understood and agreed that
this Agreement does not create a
fiduciary relationship between ITOCHU and NEWCO.

 

TEXT_SP  8855498v13 
7474/36 6

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

 

CLAUSE
NINE – GENERAL PROVISIONS

 

9.1.      The
Parties acknowledge that this Agreement contains all of the requirements
necessary for it to be considered an extrajudicial document valid for all legal
purposes and effects.

 

9.2.      This
Agreement reflects the Parties entire understanding with respect to its
purpose, and supersedes all former agreements and understandings. Each Party
acknowledges and confirms that it is not entering into this Agreement relying
on any representation, warranty, or other commitment by the other Party not
fully reflected in the provisions hereof. Notwithstanding, the Parties
may meet from time to time to discuss operational matters related to the provision
of the Services, and they may, if they understand so required and/or
convenient, prepare operation and procedure manuals, among other documents suitable
to record their understandings on such operational issues, provided, however,
that they do so in a manner consistent with the terms and conditions set forth
in this Agreement.

 

9.3.      Neither
Party shall transfer or assign this Agreement or any of its rights or
liabilities hereunder (whether partially or as a whole), without the other
Party’s prior written consent, which consent shall not be unreasonably
withheld, delayed, or conditioned, provided that ITOCHU may at
any time assign this Agreement or delegate any part of the
Services to any wholly owned subsidiary of ITOCHU. This Agreement shall be
binding and beneficial to the Parties and the respective successors and allowed
assignees thereof, and it shall be enforceable by the Parties and the respective
successors and allowed assignees thereof. 

 

9.3.1.   In addition to the provisions above,
in the event of an assignment or transfer as set forth in Clause 9.3, the
assigning or transferring Party shall (a) be sure that, as part of said
assignment, the assignee accepts the assignment of all rights and liabilities
of the assigning or transferring Party hereunder, (b) remain jointly liable
with the assignee for all of its liabilities hereunder, and (c) be sure that,
with respect to the performance of Services, the assignee will be able to
perform the Services with the same level of diligence, care and skill that the
assigning or transferring Party.

 

9.4.
     This Agreement may only be altered or modified upon the Parties’
prior agreement, and the execution of an amendment signed thereby.

 

9.5.
     Any omission or tolerance by the Parties as regards the
requirement of the proper and timely compliance with the terms and conditions of
this Agreement, whether specific or generic ones, or in the exercising of any
prerogative arising out thereof, shall not give rise to any kind of waiver,
relinquishment, or novation, or shall affect the right of either Party to so
exercise them at any time whatsoever.

 

9.6.
     In the event that any provision of this Agreement shall be
considered invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality, and enforceability of the other provisions contained in
this Agreement shall not, in any manner whatsoever, be affected or impaired,
and shall remain in force. The Parties shall negotiate, in good faith, the
substitution of any invalid, illegal, or unenforceable provisions for valid,
legal, and enforceable ones the effects of which shall be as near as possible
of the legal and economic effects intended by the provisions deemed invalid,
illegal, or unenforceable.

 

9.7.      This
Agreement does not create and does not intend to create any company,
association, joint venture, cooperation, partnership, consortium, agency, and
does not assign, or intend to create any relationship of principal and agent,
commercial representation, business administration, or other comparable legal
relationship as between the Parties, except for those expressly provided for in
this Agreement and directly connected with the provision of the Services
by ITOCHU to NEWCO.

 

TEXT_SP  8855498v13 
7474/36 7

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

9.7.1.   The Parties hereby represent
and agree that this Agreement does not create or impose any subordination
between, on one side, ITOCHU, its partners, managers, employees or subcontractors and, on the other side, NEWCO. The Parties expressly
agree that the relationship arising from this Agreement is not an employment relationship
between, on one side, ITOCHU, its partners, managers, employees or subcontractors and, on the other side, NEWCO.

 

9.8.
     Except for those provided herein, either
Party is liable for its own costs and other expenses incurred or to be incurred
as regards the execution and performance of this Agreement.

 

9.9.      The
Parties agree that the provisions set forth hereunder, although due and
ascertained pursuant to Applicable Laws, shall not constitute an appropriate or sufficient redress for
default on the obligations set out in this Agreement, and any Party may claim
in court the specific performance of the defaulted obligation, by means of a
jurisdictional granting, under the terms of articles 461, 486, 632 of Federal
Law No. 5,869/73, as amended (“Brazilian Civil Procedure Code”). This
Agreement, which is signed by two witnesses, constitutes an extra-judicial
execution instrument (“título executivo extra-judicial”) for all
purposes and effects of article 585, item II of the Brazilian Civil Procedure
Code.

 

9.10.    Each
of the Parties hereby agrees that, during the term of this Agreement, it will
not, directly or indirectly, solicit or offer employment to any employee of the
other Party involved in the performance of this Agreement.

 

 

CLAUSE
ELEVEN – CONFIDENTIALITY

 

11.1.
   The Parties hereby undertake to keep confidential the terms and
conditions of this Agreement and all information obtained as a consequence thereof
for the time this Agreement remains effective, and for a term of one (1) year
upon its termination, except for information that: (i)
has been obtained from third parties who are not bound to a duty of
confidentiality, (ii) is publicly available without violation of the
obligations of confidentiality taken here, (iii) is already in the public
domain at the time of its release, (iv) has been authorized to be disclosed by
the other Party upon such Party ́s prior and express consent; (v) is required to
be disclosed by any Applicable Laws, upon determination of any Governmental
Authority, in which hypothesis the disclosure shall be limited to the terms and
conditions that shall be disclosed as a consequence of such determination, and
provided that the Party subject to said determination makes
its commercially reasonable effort to give prompt notice to the
other Party, thereby giving the other Party the opportunity to limit or prevent
the disclosure to the extent allowed by the Applicable Laws.  In addition, NEWCO shall be
able to demand non-disclosure agreements for access to, or discussions of, any
NEWCO’s internal information, as the case may be.

 

 

CLAUSE
TWELVE – NOTICES

 

12.1.
   All information, communications, requests, authorizations and
consents to be transmitted or given by the Parties within the scope of this
Agreement shall only be valid and effective if made in writing, by mail
(certified or with return receipt requested) or fax (with evidence of
transmission) addressed as follows (or in other manner to be after informed by
one Party to the other):

 

(a) ITOCHU:

Address:
[·] 

Telephone:
[·]

Fax:
[·]

Att.:
[·]

Copy
to: [·]

TEXT_SP  8855498v13 
7474/36 8

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

 

(b) NEWCO:

Address:
[·]

Telephone:
[·]

Fax:
[·]

Att.:
[·]

Copy
to: [·]

 

 

CLAUSE
THIRTEEN - APPLICABLE LAW

 

13.1.   
This Agreement shall be governed by and construed in accordance with the laws
of Brazil, without giving effect to principles of conflicts or choice of laws.  

 

 

CLAUSE FOURTEEN – GOVERNING LAW AND
DISPUTES RESOLUTION

 

14.1     This Agreement and the rights and obligations of
the Parties hereunder and the transactions contemplated hereby shall be
governed by, enforced and interpreted in accordance with the laws of Brazil.

 

14.2.       
Any dispute, controversy or claim arising
out of or relating to this Agreement ("Dispute") shall be
solved by arbitration, in accordance with the following provisions: 

 

14.2.1.  The Dispute shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce (the "ICC Rules")
in force at the time of the request for arbitration.

 

14.2.2.  The arbitration shall be conducted by 3 (three) arbitrators
(“Arbitral Tribunal”), one nominated by the claimant, another one
nominated by the respondent, and the two (2) party-appointed arbitrators shall
designate a third arbitrator, who shall act as president of the Arbitral
Tribunal, within 15 (fifteen) days after the confirmation of the
later-appointed of these two arbitrators. In case there are multiple parties,
whether as claimant or as respondent, the multiple claimants, jointly, and/or
the multiple respondents, jointly, as the case may be, shall appoint one
arbitrator. If any of the three arbitrators is not nominated within the time
prescribed in the ICC Rules or above, such arbitrator shall be appointed by the
Court of Arbitration of the International Chamber of Commerce (the "ICC
Court").  

 

14.2.3.  The arbitration shall be held in the City of São Paulo,
State of São Paulo, Brazil, where the arbitral award shall be deemed rendered.
The arbitration procedure shall be held in English and in accordance with
Brazilian Law, but evidence may be produced by the parties in Portuguese
without the need of translation. The Arbitral Tribunal shall not act as amiable
compositeurs or decide the merits of the Dispute ex aequo et bono.

 

14.2.4.  The Parties elect the courts of the City of São Paulo,
State of São Paulo, exclusively for granting interim or conservatory measures
before the constitution of the Arbitral Tribunal. Even in instances where a
provisional judicial relief has been sought or obtained, the merits of the
Dispute shall always be decided by the Arbitral Tribunal. For the avoidance of
doubt, among the remedies that may be ordered or awarded by the Arbitral
Tribunal is the remedy of specific performance of contractual obligations.

 

14.2.5.  Except for attorney’s fees, which shall be borne
individually by each of the parties to the arbitration, all expenses, costs and
legal fees shall be borne by one or all parties as determined by the Arbitral
Tribunal. 

 

 

TEXT_SP  8855498v13 
7474/36 9

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

 

 

14.2.6.  The Parties shall keep the confidentiality of each and
every information concerning the arbitration.

 

[Signature
Pages Follows]

 

 

TEXT_SP  8855498v13 
7474/36 10

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

  

 

 

Exhibit A

 

Statement of Work 

 

 

Ø  Upon Newco’s request, ITOCHU will provide marketing consulting services to NEWCO, including:

 

a.       Support for off-take agreements with Japanese, Korean and Taiwanese steel mills, including, but not limited to:

·         Studies and proposals to develop these markets for the use of high Silica sinter feed produced and traded by NEWCO;

·         Studies and proposals to maintain volumes currently supplied to these markets; and

b.      Sales support to Chinese market, including, but not limited to:

·         Studies and proposals to maintain NEWCO ́s competitiveness in China versus the increase of availability of Australian iron ore.

 

c.       Support NEWCO in the development of new markets (India and other Asian markets), including, but not limited to:

·         Studies and proposals on where NEWCO could gain additional competitiveness into new markets.

 

d.      Support in the development of strategy for CFR sales, including, but not limited to:

·         Studies and assistance of competitive freight for short-, mid- and long-term contracts.

 

Ø  ITOCHU will provide market information

 

A) Timely Report:

 

ITOCHU will provide timely reports to Newco including, but not limited to, the information listed below:

 

Feedback on relevant technical meetings held between Itochu and JKTC, including technical information regarding the results of usage of NEWCO ́s PF and the latest situation of JKTC steel mills with respect to investments for pellet plants or HPS;

B) Quarterly Report:

 

Ø  ITOCHU will provide quarterly reports to Newco including, but not limited to, the information listed below:

a) Ocean freight market: periodical analyses of the short-, mid- and long-term freight markets (including, but not limited to, demand, supply, scrapping and market expectations);

b) Iron Ore Market: periodical analysis of the short-, mid- and long-term iron ore markets (including, but not limited to, volumes, pricing, and QP);

c) Crude Steel Production: periodical analysis of the short-, mid- and long-term production of crude steel (including, but not limited to, market trends, comments and data);

d) Market information on China, India, South Eastern Asia: feedback on relevant information related to the market (including, but not limited to, supply and demand of iron ore and ongoing new projects).

 

C) Annual Report:

 

Pellet Feed / Pellet market: long-term analyses of the development of these two markets worldwide (including, but not limited to, details of the production and use of these products in China).

TEXT_SP  8855498v13  7474/36 11

23769/00600/DOCS/2227055.2                                              

                                                                                                

 

  

 

From:     Brazil Japan Iron Ore Corporation

              Attn: Mr. Masayuki Yamamoto

              Attn: Mr. Keiji Nakamura

 

              POSCO

              Attn: Mr. Sung Wook Kang

 

              China Steel Corporation – CSC 

              Attn: Mr. Huan-Jen Lian

 

Date:      November 21, 2014

 

To:         Companhia Siderúrgica Nacional – CSN 

              Attn: Mr. Enéas Garcia Diniz

 

Re:        Side Letter - Equity Value of [*] under the Investment Agreement

 

Dear Sirs:

 

1.      We refer to the Investment Agreement entered into by and among Companhia Siderúrgica Nacional (“CSN”), Brazil Japan Iron Ore Corporation (“BJIOC”), Posco (“POSCO”), China Steel Corporation (“CSC”) (provided that BJIOC, POSCO and CSC are each individually referred to as “JKTC Party” and collectively referred to as “JKTC”), Congonhas Minérios S.A. (“Congonhas Minérios”) and Nacional Minérios S.A. (“Namisa”) on the date hereof (the “Investment Agreement”). Terms defined in the Investment Agreement are used with the same meaning in this letter. 

 

2.      With respect to the subject matter above, JKTC would like to confirm with CSN that the following is the common understanding of JKTC and CSN: for the purposes of Sections 3.2.(viii) and 3.5 of the Investment Agreement, the value of [*] consists of (i) the fair market value of Congonhas Minérios, and (ii) the consideration for cooperation committed  by JKTC to proceed with the Merger and does not necessarily reflect the fair market value of the shares of Congonhas Minérios, which shall be calculated in appropriate method to 

comply with the accounting or legal treatment of the
Merger and which may be higher or lower than said value [*].

TEXT_SP  8853458v1  7474/36 

 

 

 

3.      This
Side Letter shall only become effective upon the Board Approvals (as defined in
the Investment Agreement), which shall take place on or before December 12,
2014. In case any of the Board Approvals are not obtained by December 12, 2014,
this Agreement shall be automatically terminated, without producing any effect.

Sincerely,

 

              [REMAINDER OF THE PAGE
INTENTIONALLY LEFT BLANK]

 

TEXT_SP  8853458v1 
7474/36 

 

 

Signature page of the Side Letter –
Equity Value entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron
Ore Corporation, POSCO and China Steel Corporation.

 

 

Companhia
Siderúrgica Nacional

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
  _________________________

  By:
  

  Title:

   

  

TEXT_SP  8853458v1 
7474/36 

 

 

Signature page of the Side Letter –
Equity Value entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron
Ore Corporation, POSCO and China Steel Corporation.

 

 

Brazil
Japan Iron Ore Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

TEXT_SP  8853458v1 
7474/36 

 

 

Signature page of the Side Letter –
Equity Value entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron
Ore Corporation, POSCO and China Steel Corporation.

 

 

POSCO

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

TEXT_SP  8853458v1 
7474/36 

 

 

Signature page of the Side Letter –
Equity Value entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron
Ore Corporation, POSCO and China Steel Corporation.

 

 

China
Steel Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP  8853458v1 
7474/36 

 

  

 

Signature page of the Side Letter – Equity Value entered into by Companhia Siderúrgica Nacional, Brazil Japan Iron Ore Corporation, POSCO and China Steel Corporation.

 

 

Witnesses:

 

 

 

 

	

   1.________________________­­­­­­­­­­­

   Name: 

   ID Card:

    
	

   2.________________________

   Name:

   ID Card:

    

 

 

 

 

TEXT_SP  8853458v1  7474/36exhibit04_10.htm - Generated by SEC Publisher for SEC Filing

Exhibit 4.10

 

TRANSITIONAL AGREEMENT

 

This Transitional Agreement (“Transitional Agreement”), dated November 21, 2014, is entered into among: 

Companhia Siderúrgica Nacional, a publicly-held corporation (sociedade anônima de capital aberto) incorporated, organized and existing under the Laws of Brazil, having its registered office at the Municipality of São Paulo, State of São Paulo, at Av. Brigadeiro Faria Lima, 3400 – 20th floor, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N. 33.042.730/0001-04, herein represented pursuant to its by-laws (“CSN”);

Brazil Japan Iron Ore Corporation, a company duly organized and existing under the Laws of Japan, with its head office located at Itochu Building, 13th Floor, 5-1, Kita-Aoyama, 2-chome, Minato-ku, Tokyo, 107-0061, Japan (“BJIOC”);

POSCO, a company incorporated, organized and existing under the Laws of Korea, having its registered office at POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, 135-777, Korea (“POSCO”); 

China Steel Corporation, a corporation organized and existing under the Laws of Republic of China, with head office located at 88 Chenggong, 2nd Roard, Qianzhen, Kaohsiung 80661, Taiwan, Republic of China (“CSC”); 

ITOCHU Corporation, a company incorporated, organized and existing under the Laws of Japan, having its principal office at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo, 107-8077, Japan (“Itochu”);

JFE Steel Corporation, a company incorporated, organized and existing under the Laws of Japan, having its registered office at 2-3, Uchisaiwai-cho 2-chome, Chiyoda-ku, Tokyo, 100-0011, Japan (“JFE”);

Kobe Steel, Ltd., a company incorporated, organized and existing under the Laws of Japan, having its registered office at 2-4, Wakinohama-Kaigandori 2-chome, Chuo-ku, Kobe, Hyogo, 651-8585, Japan (“Kobe”);

Nisshin Steel Co., Ltd., a company incorporated, organized and existing under the Laws of Japan, having its registered office at 4-1, Marunouchi 3-chome, Chiyoda-ku, Tokyo 100-8366, Japan (“Nisshin”); 

(provided that BJIOC, POSCO, CSC, Itochu, JFE, Kobe and Nisshin are each individually referred to as “JKTC Party” and collectively referred to as “JKTC” and, jointly with CSN, as “Investors”); 

Congonhas Minérios S.A., a closely-held corporation (sociedade anônima de capital fechado) incorporated, organized and existing under the Laws of Brazil, having its 

registered office at the Municipality of
Congonhas, State of Minas Gerais, at Estrada Casa de Pedra, without number,
part, enrolled with the Federal Taxpayers’ Registry (CNPJ/MF) under N.
08.902.291/0001-15, herein represented pursuant to its by-laws (“Congonhas
Minérios”), and 

TEXT_SP/9283989v1/7474/36

 

 

Nacional
Minérios S.A., a closely-held
corporation (sociedade anônima de capital fechado) incorporated,
organized and existing under the Laws of Brazil, having its registered office at
the Municipality of Congonhas, State of Minas Gerais, at Logradouro Casa de
Pedra, without number, part, enrolled with the Federal Taxpayers’ Registry
(CNPJ/MF) under N. 08.446.702/0001-05, herein represented pursuant to its
by-laws (“Namisa”). 

(Investors,
Congonhas Minérios and Namisa individually referred to as “Party” and
collectively referred to as “Parties”)

WITNESSETH:

WHEREAS the
Parties (other than Congonhas Minérios) have entered into (i) the Share
Purchase Agreement dated as of October 21, 2008 (as amended from time to time,
the “Namisa SPA”); (ii) the Shareholders’ Agreement of Namisa dated as
of October 21, 2008 (as amended from time to time, the “Namisa SHA”); (iii)
the Beneficiation Agreement dated as of June 30, 2011 (as amended from time to
time, the “Beneficiation Agreement”); and (iv) the operational
agreements listed in Exhibit I (as amended from time to time, the “Operational
Agreements” and, together with the Namisa SPA, the Namisa SHA and the
Beneficiation Agreement the “Existing Agreements”); 

WHEREAS, on this
date, the Investors have entered into (i) an Investment Agreement, whereby they
have agreed on the terms for the consolidation of the assets, rights and
liabilities of the CSN Establishment (as defined in the Investment Agreement)
and of Namisa, by means of the merger of Namisa into Congonhas Minérios and
other related transactions, subject to the fulfillment of certain conditions
precedent (“Investment Agreement”); and (ii) the 7th Amendment
to the Standstill Letter Agreement (as defined in the Investment Agreement); 

            WHEREAS,
in view of the execution of the Investment Agreement, the Parties want to (i) suspend
certain contractual terms and provisions of the Beneficiation Agreement during
the term of this Transitional Agreement and (ii) amend certain provisions of
the Operational Agreements, subject to the terms and conditions provided herein,
in both cases as from the Date of Effectiveness (as defined in the Investment
Agreement), 

NOW, THEREFORE,
the Parties agree as follows:

1.                 
SCOPE

 

1.1.
Operational Agreements. Subject to Section 1.1.4 below, the
Parties hereby agree to amend the Operational Agreements as of the Date of
Effectiveness in order to
cancel the accrual and payment of interest over the
advance payments provided therein (“Interest on Prepayment”), as follows (“Amendments
to the Operational Agreements”): 

 

 

 

1.1.1.
Port Agreement. The Parties agree to exclude Clauses 9.3 and 9.3.1. (and
any references thereto) of the Port Agreement. For the avoidance of doubt, in
the benefit of any possible cross-reference, Clause 9.4 of the Port Services
Agreements shall remain numbered as Clause 9.4.

 

1.1.2.
Low Silica Contract. The Parties agree to exclude Clauses 5.3 and 5.3.1.
(and any references thereto) of the Low Silica Contract. For the avoidance of
doubt, in the benefit of any possible cross-reference, Clause 5.4 of the Low
Silica Contract shall remain numbered as Clause 5.4.

 

1.1.3.
High Silica Contract. The Parties agree to exclude Clauses 5.3 and
5.3.1. (and any references thereto) of the High Silica Contract. For the
avoidance of doubt, in the benefit of any possible cross-reference, Clause 5.4
of the High Silica Contract shall remain numbered as Clause 5.4.

 

1.1.4.
Resolutory Condition. The non-occurrence of the Merger, for any reason
whatsoever, including but not limited to any events out of control of the
Parties, by the Drop Dead Date or the early termination of the Investment
Agreement, whichever occurs first, shall be considered as a resolutory
condition (condição resolutiva) of the Amendments to the Operational
Agreements under Section 127 and other applicable provisions of Law No. 10,406
of January 10th, 2002 (the “Brazilian Civil Code”) (“Resolutory
Condition”). In view of that, if, for any reason, the Resolutory Condition occurs,
(i) all effects of the Amendments to the Operating Agreements shall be
cancelled as from the Date of Effectiveness as if the Amendments to the
Operational Agreements had never existed; (ii) the rights and obligations of
the parties arising out of the Operational Agreements will resume ex tunc
as from the Date of Effectiveness as if the Amendments to the Operational Agreements
had never existed; and (iii) all of the amount corresponding to the Interest on
Prepayment that would have been recognized between the Date of Effectiveness and
the date the Resolutory Condition occurs, duly adjusted by the variation of the
Reference Rate – TR between the original due date (without giving effect to the
Amendments to the Operational Agreements) and the date the Resolutory Condition
occurs,  will be recognized as interest income, of which (a) 66% will be added
to the prepayment balance and (b) 34% will be paid in cash by CSN to Namisa until
at least three days before the deadline established by law for the payment of
the corporate income taxes due by Namisa related to the Interest on Prepayment
described above. The amounts to be recognized as interest income and against
the prepayment balance or paid in accordance with this item shall be calculated
retroactively on a monthly basis.

 

1.1.4.1. In view of the above, upon the
occurrence of the Resolutory Condition, all Parties further agree to adopt all
the procedures and take all the measures necessary in order to assure that the
Interest on Prepayment will be reinstated, on a retroactive basis, from
December 12, 2014.

TEXT_SP/9283989v1/7474/36

 

 

 

1.1.4.2. For purposes of item (iii) of Section
1.1.4, the “Reference Rate – TR” means the official reference rate issued by
the Central Bank of Brazil, based on bank deposit certificates and receipts (CDB/RDB),
encompassing multiple banks with commercial or investment portfolios,
commercial banks, investment banks and savings banks, in accordance with
Resolution 3.354, dated March 31, 2006, as amended.

 

1.2.      Beneficiation
Agreement. The contractual obligations of CSN and Namisa under the
Beneficiation Agreement (whether outstanding or not) and any effect thereof
shall be suspended during the term of this Transitional Agreement. 

 

1.3.           
Dividends
in Namisa.
During the term of this Transitional Agreement, and only in relation to fiscal
years which have ended within the period during which this Transitional Agreement
remains in force, the Investors shall not oppose to the adoption of the same
procedures adopted in the Namisa’s Ordinary Shareholders Meeting of March 28, 2014,
with respect to any distribution of net profits in the next Ordinary
Shareholders Meetings. The Closing Dividends and the Interim Dividends shall be
declared and paid in accordance with the provisions of the Investment Agreement,
subject to the conditions therein provided.

 

1.4.           
No
Waiver.
The  Parties acknowledge that CSN and JKTC Parties reserve their respective arguments,
claims and positions in relation to (i) the Interest on Prepayment (accrued
and/or to be accrued); and (ii) their respective rights and obligations under
the Beneficiation Agreement. This Transitional Agreement is not, and shall not
be construed as, a waiver or a modification of any of the rights of the Parties
hereto under the (1) Existing Agreements and (2) the Standstill Letter Agreement,
nor as an opportunity to cure any event that could result in the exercise of
any remedy provided therein.

 

2.                 
TERM
AND TERMINATION 

 

2.1.           
Term. This Transitional
Agreement is entered into on an unconditional and irrevocable basis, and shall
be effective from the Date of Effectiveness until (i) the Date of the Merger, (ii)
the Drop Dead Date or (iii) the early termination of the Investment Agreement,
whichever occurs first. 

 

2.2.           
Termination. In case any of
the Board Approvals is not obtained by December 12, 2014, the Merger does not
occur by the Drop Dead Date or the Investment Agreement is early terminated in
accordance with its terms, for any reason whatsoever, whichever occurs first, this
Transitional Agreement will be terminated and: (i) the Amendments to the
Operational Agreements shall no longer be effective, and Section 1.1.4
shall apply; (ii) the Beneficiation Agreement will be resumed from the date of
termination of this Transitional Agreement; (iii) the Closing Dividends will
not be paid; and (iv) except as expressly provided for in Section 1.1.4,
no penalty or additional amount of any nature will be
due by any of the Parties to the others, exclusively as a result of the
termination of this Transitional Agreement. 

TEXT_SP/9283989v1/7474/36

 

 

 

2.2.1.
Upon the occurrence of the Merger, the Existing Agreements will be automatically
terminated as a result of the Merger and (i) no amount, claim or adjustment, of
any nature, will be due by one Party to the other under and/or in relation to
these agreements; (ii) the financial / accounting effects of such agreements
shall be neutral for purposes of the Pre-Merger Equity Interest Adjustment, of
the Net Closing Working Capital Cash Adjustment and of the Net Closing Net Debt
Cash Adjustment; and (iii) the Parties will grant each other full release with
regard to any obligations pertaining to the Existing Agreements.

 

3.                 
APPLICABLE
LAW AND ARBITRATION 

 

3.1.           
This
Transitional Agreement and the rights and obligations of the Parties hereunder
and the transactions contemplated hereby shall be governed by, enforced and interpreted
in accordance with, the laws of the Federative Republic of Brazil. 

 

3.2.           
Any
dispute, controversy or claim arising out of or relating to this Transitional
Agreement (“Dispute”) shall be solved by arbitration, in accordance with
the following provisions: 

 

3.2.1.     
The
Dispute shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce (the “ICC Rules”) in force at the time
of the request for arbitration.

 

3.2.2.     
The
arbitration shall be conducted by 3 (three) arbitrators (“Arbitral Tribunal”),
one nominated by the claimant, another one nominated by the respondent, and the
two (2) party-appointed arbitrators shall designate a third arbitrator, who
shall act as president of the Arbitral Tribunal, within 15 (fifteen) days after
the confirmation of the later-appointed of these two arbitrators. In case there
are multiple parties, whether as claimant or as respondent, the multiple
claimants, jointly, and/or the multiple respondents, jointly, as the case may
be, shall appoint one arbitrator.  If any of the three arbitrators is not
nominated within the time prescribed in the ICC Rules or above, such arbitrator
shall be appointed by the Court of Arbitration of the International Chamber of
Commerce (the “ICC Court”).  

 

3.2.3.     
The
arbitration shall be held in the City of São Paulo, State of São Paulo, Brazil,
where the arbitral award shall be deemed rendered. The arbitration procedure
shall be held in English and in accordance with Brazilian Law, but evidence may
be produced by the Parties in Portuguese without the need of translation. The
Arbitral Tribunal shall not act as amiable compositeurs or decide the
merits of the Dispute ex aequo et bono.

 

3.2.4.     
The
Parties elect the courts of the City of São Paulo, State of São Paulo,
exclusively for granting interim or conservatory measures before the
constitution of the Arbitral Tribunal. Even in
instances where a provisional judicial relief has been sought or obtained, the
merits of the Dispute shall always be decided by the Arbitral Tribunal. For the
avoidance of doubt, among the remedies that may be ordered or awarded by the
Arbitral Tribunal is the remedy of specific performance of contractual
obligations.

TEXT_SP/9283989v1/7474/36

 

 

 

3.2.5.     
Except
for attorney’s fees, which shall be borne individually by each of the Parties
to the arbitration, all expenses, costs and legal fees shall be borne by one or
all Parties, as determined by the Arbitral Tribunal. 

 

3.2.6.     
The
Parties shall keep the confidentiality of each and every information concerning
the arbitration.

 

3.2.7.     
If
one or more Disputes arise under this Transitional Agreement or any other
Transaction Document, then any or all such Disputes may be brought into a
single arbitration. The ICC Court may, at the request of any of the Parties,
consolidate the arbitral proceeding with any other pending arbitral proceeding
involving this Transitional Agreement and/or any other Transaction Document. If
one or more arbitrations are already pending with respect to a Dispute under
any such agreement, then any party to a new dispute or any subsequently filed
arbitration brought under any such agreement may request that such new dispute
or any subsequently filed arbitration be consolidated into any prior pending
arbitration. 

 

3.2.8.     
The
new dispute or subsequently filed arbitration shall be so consolidated,
provided that the ICC Court determines that: (i) the new dispute or
subsequently filed arbitration presents significant issues of law or fact in common
with those in the prior pending arbitration; (ii) no party to the new dispute
or prior pending arbitration would be prejudiced; and (iii) the consolidation
under these circumstances would not result in undue delay for the prior pending
arbitration.  

 

3.2.9.     
The
consolidation order shall be final and binding upon all the Parties involved in
the consolidated proceedings. The arbitrations shall be consolidated into the
arbitration that commenced first. The Parties agree that upon such an order of
consolidation, they will promptly dismiss any arbitration proceeding, the
subject of which has been consolidated into another arbitral proceeding.

 

4.     
MISCELLANEOUS

 

4.1.      Capitalized
Terms. Except as otherwise specifically provided for in this Transitional
Agreement, all the capitalized terms and expressions herein shall have the
meaning ascribed to them in the Investment Agreement.

 

4.2.           
Notices. All notices,
reports, requests, demands and other communications under or in connection with
this Transitional Agreement or any other agreements entered into between the
Investors hereto, in connection with this Transitional Agreement, shall be
written in the English language and shall be sent by registered airmail,
postage prepaid and addressed to the addresses set forth on the first page of this
Transitional
Agreement, and all notices, reports, requests, demands and other
communications shall be deemed to have been given on the date when deposited in
the post. 

TEXT_SP/9283989v1/7474/36

 

 

 

4.2.1.     
Any
Investor may change its address or telex or facsimile number for the purpose of
this Section 4.2 by notice given to the other Parties in the manner set
forth above.

 

4.3.           
Confidentiality. The existence
and content of this Transitional Agreement will be maintained as “Confidential
Information” pursuant to the Investment Agreement.

 

4.4.           
Severability. Should any
provision of this Transitional Agreement or any other agreements entered into between
the Parties hereto in connection with this Transitional Agreement be or become
invalid or unenforceable under any applicable Law or violate any applicable
Law, the remainder of this Transitional Agreement or any of such other
agreements shall be valid and binding as if such provision were not included
therein.

 

4.5.           
Amendments. This Transitional
Agreement may be amended only with the written consent of the Parties. 

 

4.6.           
Counterparts. This Transitional
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.

IN
WITNESS WHEREOF, the Parties hereto have caused their duly authorized
representatives to affix their respective signatures on this instrument, on the
day and year first written above.

 

[remainder of this page intentionally left blank]

[signature
pages follow]

TEXT_SP/9283989v1/7474/36

 

 

Signature
page of the Transitional Agreement entered into by Companhia Siderúrgica
Nacional, Brazil Japan Iron Ore Corporation, POSCO, China Steel Corporation,
ITOCHU Corporation, JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co.,
Ltd., Congonhas Minérios S.A and, Nacional Minérios S.A.

 

 

Companhia Siderúrgica Nacional

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
  _________________________

  By:
  

  Title:

   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

Brazil Japan Iron Ore Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

POSCO 

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

China Steel Corporation 

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by among Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

ITOCHU Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

JFE Steel Corporation

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

Kobe Steel, Ltd.

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

Nisshin Steel Co., Ltd.

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

Congonhas Minérios S.A. 

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
  _________________________

  By:
  

  Title:

   

  

 

TEXT_SP/9283989v1/7474/36

 

 

 

Signature page of the
Transitional Agreement entered into by Companhia Siderúrgica Nacional, Brazil
Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU Corporation,
JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd., Congonhas
Minérios S.A. and, Nacional Minérios S.A.

 

 

Nacional Minérios S.A.

 

 

 

 

	
  _________________________­­­­­­­­­­­

  By:
  

  Title:

   

  	
  _________________________

  By:
  

  Title:

   

  

 

 

TEXT_SP/9283989v1/7474/36

 

 

Signature page
of the Transitional Agreement entered into by Companhia Siderúrgica Nacional,
Brazil Japan Iron Ore Corporation, POSCO, China Steel Corporation, ITOCHU
Corporation, JFE Steel Corporation, Kobe Steel, Ltd., Nisshin Steel Co., Ltd.,
Congonhas Minérios S.A. and, Nacional Minérios S.A.

 

 

Witnesses:

 

 

 

	
  1.________________________­­­­­­­­­­­

  Name:
  

  ID
  Card:

   

  	
  2.________________________

  Name:

  ID
  Card:

   

  

 

TEXT_SP/9283989v1/7474/36

 

 

EXHIBIT I

LIST OF OPERATIONAL AGREEMENTS (PURSUANT TO THE PREAMBLE
OF THIS TRANSITIONAL AGREEMENT)

- High
Silica ROM Iron Ore Supply Contract, dated as of October 21st, 2008,
as amended from time to time (“High Silica Contract”);

-
Low Silica ROM Iron Ore Supply Contract, dated as of October 21st,
2008, as amended from time to time (“Low Silica Contract”); and

-
Port Operating Services Agreement, dated as of October 21st, 2008,
as amended from time to time (“Port Agreement”).

TEXT_SP/9283989v1/7474/36

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00244-of-00352.parquet"}]]