Bylaws

ARTICLE 1. ISA ENERGIA BRASIL shall be governed by this Articles of Association and the applicable legislation.

ARTICLE 2. The purpose of the Company is to:

1. study, plan, design, construct, operate, and maintain systems for the transmission of electrical energy, lines, substations, and control centers, as well as the respective infrastructure;
2. study, develop, design, execute, explore, or transfer plans and programs of research and development aimed at any type or form of energy transportation, as well as other activities related to available technology, whether directly or in collaboration with government agencies or private entities;
3. independently or in partnership with other companies, explore activities derived from the subsidiary use of tangible or intangible assets of which it is the holder due to the essential nature of its activity, as well as the provision of services that, directly or indirectly, relate to its object;
4. hold equity interests in other companies, as a partner, shareholder, or quotaholder; and
5. establish consortia or any other type of business collaboration.

ARTICLE 3. The company, with indefinite duration, has its headquarters and jurisdiction in the City and State of São Paulo.

Sole Paragraph – The company may establish and close branches, subsidiaries, agencies, offices, or representations in Brazil and abroad, by decision of the Executive Board.

ARTICLE 4. The subscribed and paid-in share capital is 3,590,020,426.94 (three billion, five hundred and ninety million, twenty thousand, four hundred and twenty-six reais and ninety-four centavos), divided into 658,883,304 (six hundred and fifty-eight million, eight hundred and eighty-three thousand, three hundred and four) common shares, of which 257,937,732 (two hundred and fifty-seven million, nine hundred and thirty-seven thousand, seven hundred and thirty-two) being common shares and 400,945,572 (four hundred million, nine hundred and forty-five thousand, five hundred and seventy-two) preferred shares, all registered, book-entry, and with no par value.

ARTICLE 5. The authorized share capital is R$5,000,000,000.00 (five billion reais).

Paragraph 1 - The company, by resolution of the Board of Directors and regardless of a statutory reform, is authorized to increase the share capital up to the limit referred to in the main sections of this article, issuing the corresponding shares for each type, respecting the proportion of existing shares.

Paragraph 2 - In the share issue, within the limit of authorized capital, the Board of Directors shall establish:

1. the quantity, type, and class of shares;
2. the issue price;
3. the other subscription and payment conditions, under Law 6,404/76.

Paragraph 3 - The provisions of paragraph 1 of this Article do not apply in the case of a capital increase through the contribution of assets, which will depend on the approval of the General Meeting, under Law 6,404/76.

Paragraph 4 - The company may also issue subscription warrants, within the limit of authorized capital, by resolution of the Board of Directors.

Paragraph 5 - Shareholders who fail to make the payments under the conditions established shall be, by operation of law, considered in default and subject to payment of interest of 1% (one percent) per month, a monetary adjustment under the index to be defined by the Board of Directors, and a penalty of 10% (ten percent), calculated on the amounts overdue, without prejudice to other legal remedies.

Paragraph 6 - By resolution of the Board of Directors, the company may acquire Company shares for cancellation or to be held in treasury, determine their resale or placement in the market, subject to legal regulations and other applicable provisions, including those issued by the Brazilian Securities and Exchange Commission - CVM.

Paragraph 7 - Within the limit of authorized capital and under the plan approved by the General Meeting, the company may grant stock options to its administrators or employees, excluding the shareholders' preference right in granting and exercising the stock options.

ARTICLE 6. Preferred shares shall have the following characteristics:

1. priority reimbursement of capital, without premium, in the event of liquidation of the company;
2. non-cumulative priority dividend, as provided in article 36, item II, of this Bylaws;
3. right to elect one member of the Fiscal Council, and respective alternate, chosen by the shareholders, in separate voting, under the conditions provided for in Law 6,404/76;
4. right to elect one member of the Board of Directors chosen by the shareholders, in separate voting, under the conditions provided for in Law 6,404/76;
5. right to participate in capital increases resulting from monetary correction and capitalization of reserves and profits, on equal terms with common shares; and
6. no voting rights and shall be non-redeemable.

ARTICLE 7. Each registered common share shall be entitled to 1 (one) vote at the General Meetings.

ARTICLE 8. Shareholders, subject to legal provisions, may convert shares of one common class into preferred or vice versa, provided that they are fully paid-up. Conversions shall be made by resolution of the Board of Directors, in periods not less than 15 (fifteen) consecutive days, subject to the following conditions:

1. shareholders must, to use the benefit, have enjoyed all the rights regarding the shares held and present, at the time of conversion, the identity documents;
2. in each type of conversion period, the shareholder may submit conversion requests for up to 3% (three percent) of the share capital, and the total amount of requests submitted may not exceed 5% (five percent) of the share capital.

ARTICLE 9. All Company shares are book-entry, held in deposit accounts in the names of their holders, without issue of certificates, in a financial institution authorized by the Brazilian Securities and Exchange Commission - CVM and designated by the Board of Directors.

Sole Paragraph - The company may authorize the depositary institution responsible for the registration of book-entry shares to charge the shareholder, within the limits set by the Brazilian Securities and Exchange Commission - CVM, the cost of the service of transferring the ownership of the book-entry shares.

ARTICLE 10. In case of a capital increase, shareholders are granted the preemptive right to subscribe to the shares corresponding to the increase, proportional to the number of shares owned, subject to the provisions of Article 171 of Law 6,404/76.

Sole Paragraph - The provisions of this article do not apply in cases of capital increase within the authorized limit, according to the hypotheses provided for in items I and II of Article 172 of Law 6,404/76.

ARTICLE 11. The Company’s bodies are the:

1. General Meeting;
2. the Board of Directors; and
3. the Executive Board; and
4. the Fiscal Council

GENERAL MEETING

ARTICLE 12. The General Meeting will meet, on an ordinary basis, until April 30 of each year, according to the law, to:

1. analyze management accounts for the last fiscal year;
2. analyze, discuss, and vote on the financial statements accompanied by the Fiscal Council’s opinion;
3. resolve on the allocation of the net income for the year and the dividend distribution;
4. elect the sitting and alternate Fiscal Council members;
5. elect, as applicable, the Board of Directors members; and
6. set the fees of the Fiscal Council members and management’s overall annual compensation and other benefits.

ARTICLE 13. The General Meeting shall be convened by the Board of Directors or, as provided for by law, by the shareholders or the Fiscal Council.

ARTICLE 14. Shareholders must present identification documents and/or articles of incorporation proving their legal representation at the General Meetings.

Paragraph 1 - The company will waive the presentation of proof of share ownership by the holder of book-entry shares listed in the list of shareholders provided by the depositary financial institution.

Paragraph 2 - Shareholders participating in fungible custody of registered shares must deposit, at the company's headquarters, at least 2 (two) business days before the date of the General Meeting, in addition to the other documents provided in this article, a statement issued no later than 5 (five) days before the date of the General Meeting by the Brazilian Chamber of Clearing and Custody or other competent body, containing their respective shareholding position.

Paragraph 3 - Shareholders may be represented at the General Meeting by a proxy appointed under Paragraph 1 of Article 126 of Law 6,404/76, through a public or private instrument with recognized signature or by using digital certificates issued by an entity accredited by the Brazilian Public Key Infrastructure (ICP-Brazil), provided that the respective power of attorney be deposited at the Company’s headquarters or emailed to the Investors Relations department, along with the other documents provided for in this Article, at least 2 (two) business days before the General Meeting is held.

ARTICLE 15. General Meetings shall be presided over by the Chair of the Board of Directors or Vice-Chair of the Board of Directors or, in the absence of both, by a shareholder chosen by the majority of votes of the shareholders present, with the chair of the Meeting appointing the secretary.

ARTICLE 16. The resolutions of the General Meeting shall be taken by a majority vote, subject to the exceptions provided for in Law 6,404/76 or these Bylaws, with blank or abstention votes not being counted.

Paragraph 1 - The General Meeting may only resolve on matters on the agenda, as stated in the respective call notice, except for the exceptions provided for in Law 6,404/76.

Paragraph 2 - The minutes of the Meetings shall be drawn up in the General Meetings Minutes Book in a summary form of the events that occurred and published with omission of signatures.

Paragraph 3 - The exercise of the withdrawal right by dissenting shareholders from the meeting resolution, which can only occur in legally provided for cases, shall be carried out by reimbursing the value of the shares of the shareholder exercising such right, which shall be calculated according to the average value of the share price on the São Paulo Stock Exchange - B3, in the 60 (sixty) trading sections before the publication date of the first call notice of the General Meeting that triggers the right of withdrawal.

Paragraph 4 - The reimbursement value shall be paid according to a resolution of the General Meeting, in up to 6 (six) successive monthly installments, with the first one falling due 30 (thirty) days after the date of the event that formalizes the right of withdrawal.

Paragraph 5 - Each installment due by the company, as reimbursement payment, shall be subject to interest at 0.5% (half a percent) per month and monetary adjustment calculated according to the variation of the IGPM/FGV.

BOARD OF DIRECTORS

ARTICLE 17. The Board of Directors shall consist of up to 9 (nine) members, shareholders or not, residing in the country or not, elected by the General Meeting, observing the current legal provisions.

Paragraph 1 - The Board of Directors will elect, among its members, 1 (one) Chair and 1 (one) Vice-Chair. The positions of Chair of the Board of Directors and Chief Executive Officer may not be accumulated by the same person.

Paragraph 2 - The annual compensation and other management advantages, approved at the General Meeting, shall be individualized by the Board of Directors.

Paragraph 3 - Employees shall be guaranteed participation in the Board of Directors, by the appointment of a representative chosen by them in a direct election, whose name shall be approved by the General Meeting, under the Notice of Sale of Shares of the Share Capital of ISA ENERGIA BRASIL SF/001/2006.

ARTICLE 18. The Board of Directors members shall have a unified term of office of 02 (two) year, with reelection allowed.

Paragraph 1 - The investiture of the Board of Directors members shall be subject to previous subscription of Management’s Consent Instrument, as provided for in Level 1 Regulation, as well as compliance with the applicable legal requirements and the signing of a term of office, recorded in the minutes book of the Board of Directors' Meetings.

Paragraph 2 - Upon the expiration of the term of office, the Board of Directors members shall remain in office until the successors take office.

ARTICLE 19. In the event of a vacancy, for any reason, on the Board of Directors, the Chair of the Board may fill it "ad referendum" of the General Meeting, with the substitute exercising the office for the remaining term.

Paragraph 1 - The Chair of the Board of Directors shall be replaced, in case of temporary impediment, by the Vice-Chair, or, in the absence of the latter, by another Board member appointed by him/her, and in the absence of an indication, by the choice of the other Board members.

Paragraph 2 - In the event of a vacancy in the position of Chair of the Board, the Vice-Chair shall take over the position, remaining in office until the Board chooses its new sitting member, with the substitute exercising the office for the remaining term.

ARTICLE 20. The Board of Directors is responsible for:

1. setting the general guidelines of the Company’s businesses;
2. electing, reelecting, and dismissing the members of the Company’s Executive Board and establishing their duties, observing the provisions of these Bylaws;
3. electing, reelecting, and dismissing, among the Executive Officers, the one who shall replace the CEO in his/her impediments;
4. overseeing the Executive Board’s management, examining, at any time, the books and papers of the company, requesting information on contracts concluded or in the process of conclusion, and any other information deemed necessary, as well as performing any other acts;
5. convening the General Meeting in cases provided for by law or when deemed convenient;
6. expressing an opinion on the Management Report, Financial Statements, and the Management accounts;
7. resolving on the acquisition, sale, or encumbrance of movable or immovable property, belonging to the company's assets, the raising of funds through the issue of Promissory Notes, obtaining loans or financing, the establishment of real burdens, and the granting of personal or fiduciary guarantees to collateralize the company's obligations or those of the company’s subsidiaries, when the operation exceeds 2% (two percent) of the paid-up share capital;
8. approving the granting of loans to third parties, including companies controlled or affiliated with the company, when the operation exceeds 2% (two percent) of the paid-up share capital;
9. approving the economic-financial plans and budgets and the execution of annual and multiannual works prepared by Management;
10. selecting and dismissing Independent Auditors;
11. submitting to the General Meeting a proposal for amending these Bylaws;
12. resolving on the issue, placement, price, and conditions of subscription of shares and subscription warrants, after consulting the Fiscal Council, when installed, as well as making capital calls, within the limits of the authorized capital;
13. resolving on the capital increase, issue, purchase, and cancellation of shares, under paragraphs 1, 4, 5, and 6 of article 5 of these Bylaws, and setting the deadline for exercising the preemptive right to subscribe to the shares issued, if applicable, the issue price of each share, as well as its respective deadline and payment conditions;
14. authorizing the negotiation by the Company with its own shares and deciding on the issue of simple debentures, not convertible into shares and without real guarantee, and options to purchase shares, observing the current legal provisions;
15. approving the Company's participation in the share capital of other companies, as a partner, shareholder, or quotaholder, as well as its participation in a consortium or any type of business collaboration that implies joint liability for the company.
16. resolving on relevant transactions with related parties involving the Company, observing the terms of Law 6,404/76 and the Company's Related Party Transactions Policy;
17. resolving on the matters indicated in items VII and VIII above, when proposed within the scope of the administration or general meeting of the Company's investees, to form the voting instructions of the Company as a partner or shareholder of the investee; and
18. performing any other functions assigned to it by the General Meeting within the applicable current regulations.

ARTICLE 21. The Board of Directors shall meet ordinarily on the dates established in the annual calendar approved by it in the first meeting of each fiscal year, and extraordinarily whenever summoned by its Chair, or upon request of the majority of its members.

Paragraph 1 - The Board of Directors shall meet, with the presence of the majority of its members, and make resolutions through the vote of the majority of those present. The Chair shall have the casting vote.

Paragraph 2 - The Board of Directors’ meetings may be held by phone calls, video calls, or any other means of communication that allows the identification of the members and simultaneous communication with all other persons attending the meeting. Absent Board members may also delegate their votes, in writing, to other Board members.

Paragraph 3 - The Board members participating in meetings as outlined above shall be deemed present at the meeting for all purposes, with the signature of the respective minutes being valid by any electronic means.

Paragraph 4 - Prior notice of the meeting may be waived if all members are present.

Paragraph 5 - The Board member is prohibited from intervening in any corporate transaction in which they have a conflicting interest with the Company, as well as in the decision taken by the other Board members concerning it, and it is their duty to inform them of their disqualification and have the nature and extent of their interest recorded in the minutes. In this case, the conflicted Board member should be disregarded for the purpose of determining the quorum for decision-making.

EXECUTIVE BOARD

ARTICLE 22. The company shall be managed by a Board of Directors composed of up to 5 (five) members, consisting of 1 (one) Chief Executive Officer and 4 (four) Executive Officers without portfolio, who shall perform their duties under the responsibilities established by law and this Bylaws.

Paragraph 1 - Executive Board members may be Brazilian or foreign, residents in Brazil, shareholders or not, and may be appointed and removed at any time by the Board of Directors.

Paragraph 2 - The nomination of Executive Board members shall take into consideration and consider criteria of (i) complementary experiences; and (ii) diversity.

Paragraph 3 - The compensation and other benefits of the Executive Board members shall be fixed globally by the General Meeting and individually by the Board of Directors.

Paragraph 4 - Officers without portfolio shall have duties established by the Board of Directors upon their respective elections, with the CEO having authority to assign other non-conflicting duties to said Officers.

Paragraph 5 - One of the Executive Board members shall be the Investor Relations Officer.

Paragraph 6 - In the election of a new Executive Board member, or a replacement, in the event of a vacancy, the end of the term of office shall coincide with that of the other elected members.

ARTICLE 23. The term of office of the Executive Board members shall be 3 (three) years, with re-election permitted.

Paragraph 1 - The investiture of the Executive Board members shall be subject to previous subscription of Management' Consent Instrument, as provided for in Level 1 Regulation, as well as compliance with the applicable legal requirements and the signing of a term of office, recorded in the minutes book of the Executive Board' Meetings.

Paragraph 2 - Upon the expiration of the term of office, the Executive Board members shall remain in office until the successors take office.

ARTICLE 24. In the event of a vacancy in the Executive Board, for any reason other than the position of CEO of the Company, the CEO may, at their discretion, appoint, from among the remaining Executive Officers, a member of the Executive Board to concurrently perform the functions of the vacant director position until a new Board of Directors’ Meeting is held to fill the vacant position.

ARTICLE 25. The Executive Board is responsible, at a meeting and by a resolution of the majority of the members for:

1. performing all acts necessary for the regular operation of the company;
2. approving the internal regulations and rules of the company and the authorities of the company’s managers and employees for the approval of matters and documents;
3. proposing to the Board of Directors Management’s fundamental guidelines, which must be analyzed by it;
4. submitting to the Board of Directors a proposal for a capital increase and amendment to these Bylaws;
5. recommending to the Board of Directors the acquisition, sale, or encumbrance of movable or immovable property, belonging to the company's assets, the raising of funds through the issue of Promissory Notes, obtaining loans or financing, the establishment of real burdens, and the granting of personal or fiduciary guarantees to collateralize the company's obligations or those of the company’s subsidiaries, when the operation exceeds 2% (two percent) of the issued share capital;
6. recommending to the Board of Directors the granting of loans to third parties, including companies controlled or affiliated to the company, when the operation exceeds 2% (two percent) of the issued share capital;
7. presenting to the Board of Directors the financial statements for the year, the annual and multi-year economic and financial plans and budgets, and plans for the execution of works; and
8. resolving on any matters aforementioned, when proposed within the scope of the administration or general meeting of the Company's investees, to form the voting instructions of the Company as a partner or shareholder of the investee; and
9. exercising the other duties attributed to it by the Board of Directors, within the applicable laws in effect.

ARTICLE 26. In the exercise of the Executive Board’s duties, it is incumbent upon:

1. the Company’s CEO: to preside over and oversee the company’s general policy established by the Board of Directors, coordinate activities among the Boards, and guide the Boards’ sector action plans; and
2. the other members of the Executive Board: to perform the duties conferred upon them by Law, the Bylaws, and the Board of Directors for the practice of acts necessary for the regular operation of the Company, guiding and supervising specific activities under their responsibility, and executing specific duties assigned to them by the CEO.

Paragraph 1 - It is the responsibility of the Executive Officer appointed by the Board of Directors to replace the CEO in his/her absences or occasional impediments.

Paragraph 2 - It is incumbent upon any Executive Board member, in addition to exercising the powers conferred by these Bylaws, to perform the duties assigned to them by the Board of Directors.

ARTICLE 27. The Executive Board shall meet at the call of the company’s CEO, with the presence of the majority of its members.

Paragraph 1 - Decisions of the Executive Board shall be made by a majority vote of the members present, with the company’s CEO, in addition to his/her vote, having the casting vote.

Paragraph 2 - All resolutions taken by the Executive Board shall be recorded in minutes drawn up in the respective book of minutes of the Executive Board’s Meetings and signed by the Executive Officers present.

ARTICLE 28. The Company’s CEO shall be responsible, subject to legal and statutory authorities, for the judicial and extrajudicial representation of the company.

Paragraph 1 - The company may also be represented by:

1. the joint signature of 2 (two) Executive Officers;
2. the joint signature of 1 (one) Executive Officer and 1 (one) duly constituted attorney-in-fact;
3. the joint signature of 2 (two) duly constituted attorneys-in-fact;
4. the sole signature of 1 (one) Executive Officer or 1 (one) attorney-in-fact with special powers, duly constituted;
5. any Executive Officer, individually, to represent the company in court, both as a plaintiff and defendant, as well as to carry out ordinary acts before public authorities.

Paragraph 2 - All powers of attorney shall be granted by any 2 (two) Executive Officers, through a mandate with specific powers and a determined term, except in the case of “ad judicia” powers of attorney, in which case the mandate may be for an indefinite term, by public or private instrument. In the case of item (iv) above, the power of attorney must necessarily be granted by the CEO, jointly with another Executive Officer.

Paragraph 3 - Executive Officers are prohibited from committing the company to transactions not related to its business purpose; obligating the company in financing, guaranteeing, endorsements, or favors unrelated to the company’s business or the business of the company’s subsidiaries or affiliates.

ARTICLE 29. The Executive Board’s meetings may be held by phone calls, video calls, or any other means of communication that allows the identification of the members and simultaneous communication with all other persons attending the meeting. Absent Executive Officers may also delegate their votes, in writing, to other Executive Officers.

Paragraph 1 - The Executive Officers participating in meetings as outlined above shall be deemed present at the meeting for all purposes, with the signature of the respective minutes being valid by facsimile or other electronic means, and a copy should be filed at the company's headquarters along with the original signed minutes.

Paragraph 2 - Prior notice of the meeting may be waived only if all members are present.

FISCAL COUNCIL

ARTICLE 30. The Fiscal Council, subject to legal provisions, shall consist of 3 (three) to 5 (five) sitting members and an equal number of alternates, with a term of office of 1 (one) year, elected by the Annual Shareholders' Meeting, with re-election permitted.

Paragraph 1 - Compensation for Fiscal Council members shall be defined at the Annual Shareholders' Meeting.

Paragraph 2 - One of the Fiscal Council members and his/her respective alternate shall be elected by minority shareholders, and the other by preferred shareholders, under Law 6,404/76.

ARTICLE 31. In the event of a vacancy or impediment of a sitting member, the respective alternate shall be called upon.

ARTICLE 32. The duties of the Fiscal Council are those established by law, and its operation shall be permanent.

MANAGEMENT RESPONSIBILITIES

ARTICLE 33. The company shall ensure to the Executive Officers, Board of Directors members, Fiscal Council members, and employees or representatives acting under delegation from management, legal technical defense in lawsuits and administrative proceedings, which have as their object facts arising or acts practiced in the exercise of their legal or institutional duties.

Paragraph 1 - The guarantee of defense shall be ensured even after the agent has, for any reason, left office or ceased to exercise the function.

Paragraph 2 - At the discretion of the agent and provided there is no conflict of interest, the defense shall be exercised by lawyers who are members of the company's staff.

Paragraph 3 - The agent may choose to hire a lawyer of their trust, whose fees shall be prepaid or promptly reimbursed by the company, according to parameters established by the Board of Directors, observing the standard of fees practiced by external lawyers of the company.

Paragraph 4 - In addition to legal defense, the company shall bear the procedural costs, fees of any nature, administrative expenses, and deposits for the guarantee of appeal.

Paragraph 5 -The agent who is convicted or held liable, by a final and unappealable decision, must reimburse the company for the amounts actually disbursed, unless it is evidenced that they acted in good faith and in the interest of the company.

Paragraph 6 - The provisions of this article shall apply only to facts occurring or practiced from January 01, 2005.

ARTICLE 34. The fiscal year shall begin on January 01 and end on December 31 of every year.

ARTICLE 35. At the end of each fiscal year, the Executive Board shall prepare the following financial statements of the company, under applicable legal provisions:

1. balance sheet;
2. statement of changes in equity;
3. income statement for the year;
4. statement of sources and uses of funds; and
5. cash flow statement.

ARTICLE 36. Along with the financial statements for the year, the Executive Board and the Board of Directors will present, to the Annual Shareholders' Meeting, a proposal for the allocation of the net income for the year, calculated after the deductions of the participations referred to in Article 190 of Law 6,404/76, as provided for in Paragraph 1 of this Article, according to the following order:

1. 5% (five percent) for the creation of the legal reserve, which shall not exceed 20% (twenty percent) of the paid-up share capital;
2. of the balance, for the payment of preferred dividends attributed to preferred shares, to be equally distributed among this type of shares, the highest value between R$218,460,960.36 (two hundred and eighteen million, four hundred and sixty thousand, nine hundred and sixty reais, and thirty-six centavos) and 25% (twenty-five percent) of the net income for the year (less the amounts aimed at the creation of the aforementioned reserves), with priority in receiving dividends corresponding to 3% (three percent) of the net equity value of the share, plus the right to participate in profits distributed on equal terms with common shares, after ensuring them dividend similar to the minimum mandatory provided for in item III of this Article;
3. of the balance, after deducting the preferred dividend provided for in item II above, the payment of mandatory dividends attributed to common shares, to be distributed between this type of shares, the highest value between R$140,541,082.33 (one hundred and forty million, five hundred and forty-one thousand, eighty-two reais, and thirty-three centavos) and 25% (twenty-five percent) of the net income for the year provided for in item II above, less the amounts aimed at the creation of the aforementioned reserves;
4. of the balance, after deducting the mandatory dividend provided for in item III above, up to 20% (twenty percent) of the net income for the year after the deduction of the legal reserve shall be allocated to the creation of a statutory reserve, whose value may not exceed the amount of the share capital, without prejudice to other legal limitations. The statutory reserve is aimed at (a) supporting investments for the expansion of the Company's activities; (b) allowing for the maintenance of adequate working capital; (c) allowing for the creation of funds necessary to fulfill obligations to third parties, including financiers; and (d) protecting the Company against potential contingencies or losses arising from regulatory risks; and
5. the balance will be allocated as resolved at the General Meeting, observing the legal retentions, and in the case of distributing the remaining balance to common and preferred shares, this will be done in equal terms.

Paragraph 1 - The Company, upon proposal by the Executive Board and resolution of the Board of Directors, "ad referendum" of the General Meeting, may prepare semiannual, quarterly, or shorter financial statements and may distribute interim dividends based on such statements.

Paragraph 2 - The Company, upon proposal of the Executive Board and resolution of the Board of Directors, “ad referendum” the General Meeting, may distribute interim dividends to the retained earnings or profit reserve existing in the last annual or semiannual balance.

Paragraph 3 - The Board of Directors, upon proposal by the Executive Board, "ad referendum" of the General Meeting, shall also resolve at any time on the payment of interest on equity, which may be deducted from the amount of dividends payable, under current legislation.

ARTICLE 37. The company will dissolve in cases provided by law, with the General Meeting determining the type of liquidation, appointing the liquidator, and electing the Fiscal Council to operate during the liquidation period.

ARTICLE 38. With the admission of the Company to the special listing segment called Level 1 of Corporate Governance of B3 S.A. - Brasil, Bolsa, Balcão (“B3"), the Company, its shareholders, Management, and Fiscal Council members, when installed, are subject to the provisions of the Listing Regulations of Level 1 of Corporate Governance of BM&FBOVESPA ("Level 1 Regulation").

ARTICLE 39. Matters not covered in these Bylaws will be resolved by the General Meeting and regulated under Law 6,404/76.

ARTICLE 40. The company must observe the shareholder’s agreements filed at its headquarters, and the registration of share transfers and the counting of votes cast at the General Meeting or Board of Directors meeting contrary to their terms are prohibited.

ARTICLE 41. The company will maintain a Supplementary Pension Plan for its employees.

ARTICLE 42. The one-year term of office provided for in Article 18 of these Bylaws shall apply to Board members elected separately by employees and preferred shareholders only from the ASM to be held in 2008.

ARTICLE 43. THE NEW CONTROLLING SHAREHOLDER, considering the shareholder of the CONTROL BLOCK identified in item c) of the preamble of the company’s Share Purchase and Sale Agreement, executed on July 26, 2006, under the terms of (i) Notice SF/001/2006; (ii) the company’s Share Purchase and Sale Agreement; and (iii) Concession Agreements 059/2001 and 143/2001, executed on June 20, 2001, and June 20, 2001, respectively; and (iv) ANEEL Authorizing Resolution 642, of July 25, 2006; and their eventual successors, in any capacity, including as a result of any subsequent assignment and transfer of shares comprising the CONTROL BLOCK, are jointly obligated, in an irrevocable and non-retractable manner, without prejudice to compliance with specific legal and regulatory standards, to respect and cumulatively fulfill the obligations and conditions listed in each of the instruments mentioned in items "i", "ii", "iii", and "iv" above, exercising, if necessary, their voting rights as controlling shareholders in the General Meetings of the Company.

Sole Paragraph - Among the mentioned obligations, some examples from item 5.3 of Notice SF/001/2006 are transcribed here for illustrative purposes only, namely: (i) submitting to prior approval by ANEEL any changes that imply direct or indirect transfers or changes of ownership of the CONTROL BLOCK of the company; (ii) maintaining the company in the form of a publicly held company throughout the concession period, with its shares being tradable on the Stock Exchange; (iii) ensuring that 1 (one) member of the Board of Directors is elected by its employees, if the shares they hold are not sufficient to ensure such election under corporate law; (iv) maintaining the company's headquarters in the State of São Paulo; and (v) under the law, ensuring executive officers, board members, fiscal council members, and employees or representatives of the company acting by delegation of the administrators have access to the company's documents, preserving them according to legal deadlines to allow their use whenever necessary to support defense in any lawsuit and administrative proceedings concerning facts arising or performed in the exercise of their legal or institutional duties.

THESE BYLAWS WERE APPROVED AT THE COMPANY’S GENERAL MEETING ON 02/04/1999 AND WERE FILED UNDER COMPANY REGISTRY (NIRE) NUMBER 353.00.170.571, OF 02/22/1999.