Exhibit 10(s)
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL, L.L.C.,
CMS GAS ARGENTINA COMPANY
and
CMS ENTERPRISES COMPANY
and
PACIFIC ENERGY LLC.
together with
EMPRESA NACIONAL DE ELECTRICIDAD S.A.
Dated as of July 11, 2007

 

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              ARTICLE I
SALE AND PURCHASE OF SHARES AND NOTES
   
 
            1.1   Sale and Purchase of Shares   2 1.2   [Intentionally Omitted.]
  2 1.3   Sale and Purchase of Notes   2 1.4   Purchase Price   3 1.5   Closing
  3 1.6   Closing Deliveries   3 1.7   Purchase Agreement Fee   4
 
            ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND NOTE HOLDERS
   
 
            2.1   Representations and Warranties of Seller   4
 
  2.1.1   Organization and Qualification   4
 
  2.1.2   Title to Shares   4
 
  2.1.3   Authority; Non-Contravention; Approvals   5
 
  2.1.4   Organization and Qualification of Companies and CMS-Inversiones;
Capitalization   5
 
  2.1.5   Brokers and Finders   6
 
  2.1.6   Financial Distress of Companies Subsidiaries   6
 
  2.1.7   No Other Representations and Warranties   6 2.2   Representations and
Warranties of the Note Holders   7
 
  2.2.1   Organization and Qualification   7
 
  2.2.2   Title to Notes   7
 
  2.2.3   Authority; Non-Contravention; Approvals   7
 
  2.2.4   Brokers and Finders   8
 
  2.2.5   Financial Distress of Companies Subsidiaries   8
 
  2.2.6   No Other Representations and Warranties   8
 
            ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO THE COMPANIES
SUBSIDIARIES
   
 
            3.1   Capitalization and Title   9
 
  3.1.1   Description   9
 
  3.1.2   No Consents to Liens   9 3.2   Financial Statements   9 3.3   Tax
Matters   9 3.4   Compliance with Laws   9 3.5   Certain Contracts   10 3.6  
Operating Company Notes   10 3.7   Financial Distress of Companies Subsidiaries
  10

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              3.8   No Other Representations and Warranties   10
 
            ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
   
 
            4.1   Organization and Qualification   11 4.2   Authority;
Non-Contravention; Approvals   11 4.3   Financing   12 4.4   Investment
Intention; Sufficient Investment Experience; Independent Investigation;
Financial Distress of Companies Subsidiaries   12 4.5   Brokers and Finders   13
4.6   No Knowledge of Seller or Note Holders Breach   13
 
            ARTICLE V
COVENANTS
   
 
            5.1   Notification to the CNDC and ENARGAS; Negative Antitrust and
ENARGAS Decision; Transfer of Shares to a Third Purchaser   13 5.2   Access   15
5.3   Publicity   16 5.4   Fees and Expenses   16 5.5   [Intentionally Omitted.]
  17 5.6   Further Assurances   17 5.7   Preservation of Records   17 5.8  
Change of Name   17 5.9   Resignations of Certain Officers and Directors   18
5.10   Releases of Certain Guarantees   18 5.11   [Intentionally Omitted.]   18
 
            ARTICLE VI
CONDITIONS TO CLOSING
   
 
            6.1   Condition to the Obligations of the Parties—No Injunction   18
6.2   Conditions to the Obligation of Purchaser   19 6.3   Conditions to the
Obligation of Seller   19
 
            ARTICLE VII
TERMINATION
   
 
            7.1   Termination   20 7.2   Effect of Termination   21

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              ARTICLE VIII
LIMITS OF LIABILITY; PARENT GUARANTEE
   
 
            8.1   Non-Survival of Representations, Warranties, Covenants and
Agreements   22 8.2   Parent Guarantee   23
 
            ARTICLE IX
DEFINITIONS AND INTERPRETATION
   
 
            9.1   Defined Terms   24 9.2   Definitions   25 9.3   Interpretation
  29
 
            ARTICLE X
GENERAL PROVISIONS
   
 
            10.1   Notices   30 10.2   Binding Effect   31 10.3   Assignment;
Successors; Third-Party Beneficiaries   31 10.4   Amendment; Waivers; etc.   31
10.5   Entire Agreement   32 10.6   Severability   32 10.7   Counterparts   32
10.8   Governing Law   32 10.9   Arbitration   32 10.10   Limitation on Damages
  33 10.11   Enforcement   33 10.12   No Right of Set-Off   33 10.13   Several
Liability   33

EXHIBITS

     
Exhibit A
  Seller Disclosure Letter
Exhibit B
  Note Holders Disclosure Letter

SCHEDULES TO THE DISCLOSURE LETTERS APPENDED AS EXHIBITS

      Seller Disclosure Letter
Schedule 2.1.2
  Title to Shares
Schedule 2.1.3(d)
  Other Approvals
Schedule 3.1.1
  Title and Capitalization
Schedule 3.3
  Tax Matters
Schedule 3.4
  Compliance with Laws
Schedule 3.5
  Certain Contracts

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SCHEDULES TO THE DISCLOSURE LETTERS APPENDED AS EXHIBITS

      Note Holders Disclosure Letter
Schedule 2.2.2
  Title to Notes

ADDITIONAL SCHEDULES TO STOCK PURCHASE AGREEMENT

     
Schedule 5.9
  Resignations of Certain Officers and Directors
Schedule 5.10
  Releases of Certain Guarantees
Schedule 9.2(a)
  Purchaser Knowledge Group
Schedule 9.2(b)
  Seller Knowledge Group

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SECURITIES PURCHASE AGREEMENT
     This SECURITIES PURCHASE AGREEMENT (hereinafter also referred to as this
“Agreement”), dated as of July 11, 2007 (the “Effective Date”), is entered into
by and among (i) CMS International Ventures, L.L.C., a limited liability company
organized and existing under the laws of the State of Michigan (“Seller”),
(ii) CMS Capital, L.L.C., a limited liability company organized and existing
under the laws of the State of Michigan (“CMS-Capital”), CMS Gas Argentina
Company, a company organized and existing under the laws of the Cayman Islands
(“CMS-Cayman”), and, CMS Enterprises Company, a corporation organized and
existing under the laws of the State of Michigan (“CMS-Enterprises”; each of the
Seller, CMS-Capital, CMS-Cayman, and CMS-Enterprises is also referred to herein
as a “Note Holder” and, collectively, the “Note Holders”), (iii) Pacific Energy
LLC., a limited liability company organized and existing under the laws of the
State of Delaware (“Purchaser”) and (iv) Empresa Nacional de Electricidad S.A.,
a company organized and existing under the laws of Chile (“Parent”), solely for
purposes of Section 8.2 and the beneficial owner of all of the shares of
Purchaser. Each of Purchaser, Seller and the Note Holders are sometimes referred
to individually herein as a “Party” and collectively as the “Parties”. Certain
other terms are defined throughout this Agreement and in Section 9.2.
WITNESSETH:
     WHEREAS Seller owns all the issued and outstanding Equity Interests of
(i) CMS Gas Transmission del Sur Company, a Cayman Islands company (“CMS-Gas”)
and (ii) CMS Generation Investment Company V, a Cayman Islands company
(“CMS-Generation”; each of CMS-Gas and CMS-Generation are sometimes referred to
individually herein as a “Company” and collectively as the “Companies”, and all
the issued and outstanding Equity Interests of the Companies are collectively
referred to as the “Shares”);
     WHEREAS CMS-Gas owns (i) 13.94% of the Equity Interests in Inversiones
GasAtacama Holding Limitada, a Chilean limited company (the “Governing
Company”); and (ii) 99% of the issued and outstanding Equity Interests of
Compañía de Inversiones CMS Energy Chile Limitada, a Chilean limited liability
entity (“CMS-Inversiones”);
     WHEREAS CMS-Generation currently owns 1% of the Equity Interest of CMS
Inversiones;
     WHEREAS CMS-Inversiones owns (i) 36.06% of the Equity Interests in the
Governing Company, (ii) 0.001% of the Equity Interests in GasAtacama S.A., a
Chilean closed corporation (the “Holding Company”) and (iii) 0.05% of the Equity
Interests in each of the following Chilean closed corporations: GasAtacama
Generación S.A., Gasoducto Atacama Chile S.A., and Gasoducto Atacama Argentina
S.A.;
     WHEREAS Holding Company owns (i) 99.9% of the Equity Interests in
GasAtacama Generación S.A., (ii) 99.9% of the Equity Interests in Gasoducto
Atacama Chile S.A., and (iii) 99.9% of the Equity Interests in Gasoducto Atacama
Argentina S.A.;

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     WHEREAS Governing Company owns 99.9% of the Equity Interests in Atacama
Finance Co.;
     WHEREAS Holding Company owns 0.1% of the Equity Interests in Atacama
Finance Co.; and
     WHEREAS on March 15, 2006, Atacama Finance Co., a corporation incorporated
and existing under the laws of the Cayman Islands, issued as promissor the
following promissory notes (i) to Seller for fifty-four million sixty-five
thousand five hundred ninety-four dollars and forty-nine cents
(U.S.$54,065,594.49) (the “Seller Note”), (ii) to CMS-Capital for eighty-seven
million three hundred seventy-two thousand six hundred seventy-six dollars and
twenty-three cents (U.S.$87,372,676.23) (the “CMS-Capital Note”), (iii) to
CMS-Cayman for seven million seven hundred thirty-four thousand forty dollars
and twenty-four cents (U.S.$7,734,040.24) (the “CMS-Cayman Note”), and (iv) to
CMS Enterprises Investment Company I, which subsequently transferred and
assigned to CMS-Enterprises a note for twenty-six million ninety-nine thousand
eight hundred sixty-eight dollars (U.S.$26,099,868.00) (the “CMS-Enterprises
Note”; each of the Seller Note, the CMS-Capital Note, the CMS-Cayman Note and
the CMS-Enterprises Note is individually referred to as a “Note” and,
collectively, as the “Notes”);
     NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made in this Agreement and of the mutual benefits
to be derived therefrom, the Parties hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARES AND NOTES
          1.1 Sale and Purchase of Shares. Upon the terms and subject to the
conditions of this Agreement, and simultaneously with the payment of the
Purchase Price in accordance with Section 1.6 of this Agreement, at the Closing,
Purchaser shall purchase from Seller, and Seller shall sell to Purchaser, good
and valid title, free and clear of any Liens except those created by Purchaser
arising out of ownership of the Shares by Purchaser, all of the Shares (the
“Shares Transaction”).
          1.2 [Intentionally Omitted.]
          1.3 Sale and Purchase of Notes. Upon the terms and subject to the
conditions of this Agreement, and simultaneously with the payment of the
Purchase Price in accordance with Section 1.6 of this Agreement, at the Closing
(a) Purchaser shall purchase from Seller, and Seller shall sell to Purchaser,
the Seller Note (inclusive of all accrued and unpaid interest prior to the
Closing Date); (b) Purchaser shall purchase from CMS-Capital, and CMS-Capital
shall sell to Purchaser, the CMS-Capital Note (inclusive of all accrued and
unpaid interest prior to the Closing Date); (c) Purchaser shall purchase from
CMS-Cayman, and CMS-Cayman shall sell to Purchaser, the CMS-Cayman Note
(inclusive of all accrued and unpaid interest prior to the Closing Date); and
(d) Purchaser shall purchase from CMS-Enterprises (inclusive of all accrued and
unpaid interest prior to the Closing Date), and CMS-Enterprises shall sell to
Purchaser, the CMS-Enterprises Note (inclusive of all accrued and unpaid
interest prior to the Closing Date).

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The transactions with respect to the Notes contemplated by this Section 1.3 are
collectively referred to as the “Notes Transaction”, and together with the
Shares Transaction, the “Transactions”).
          1.4 Purchase Price. The consideration to be paid by Purchaser in
respect of the Shares and the Notes shall be an aggregate amount in cash equal
to Eighty Million dollars (US$80,000,000) in the legal currency of the United
States of America (the “Purchase Price”).
          1.5 Closing. The closing of the Transactions (the “Closing”) shall
take place in New York, New York, at 10:00 a.m., local time, on the second
Business Day immediately following the date on which the last of the conditions
contained in Article VI are fulfilled or waived (except for those conditions
which by their nature can only be fulfilled at the Closing, but subject to the
fulfillment or waiver of such conditions), but in any event not before August 1,
2007 or later than August 28, 2007, or at such other place, time and date (the
“Closing Date”) as the Parties may agree.
          1.6 Closing Deliveries. At the Closing:
               (a) Purchaser shall pay, or cause to be paid, to Seller (or any
Affiliate designated by Seller prior to the Closing) an amount in cash equal to
the Purchase Price (after application of the Deposit previously delivered to
Seller pursuant to Section 1.7) for the Shares and Notes so delivered by Seller
and the Note Holders, as applicable, by wire transfer of immediately available
funds to the bank account or accounts designated by Seller prior to the Closing.
               (b) Seller shall deliver to Purchaser (i) one or more instruments
of transfer in respect of the Shares, duly executed in proper form for transfer
and (ii) evidence of approval by the directors of each Company for entry in the
“Register of Members” of each Company approving the transfer of the Shares to
the respective transferee designated by Purchaser.
               (c) Each Note Holder, as applicable, shall deliver to Purchaser
its respective Note, duly indorsed “Without Recourse” (or accompanied by an
instrument duly indorsed “Without Recourse”) in blank for transfer.
               (d) Seller shall deliver to Purchaser all of the Companies and
CMS-Inversiones accounting, tax, corporate and commercial books and records that
are located in Seller’s headquarters offices in Michigan.
               (e) Empresa Nacional de Electricidad S.A. and CMS-Enterprises
shall execute and deliver to each other an instrument pursuant to which both
parties shall terminate the Consortium Agreement with full releases by each
party of any subsequent claims against the other thereunder.
               (f) Each Party shall deliver the certificates, agreements,
instruments and other documents required to be delivered by it pursuant to
Article VI.

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          1.7 Purchase Agreement Fee. On July 3, 2007, the Parent wire
transferred in favor of CMS Enterprises Company Fifteen Million Dollars
(US$15,000,000) (the “Deposit”) in cash (the aggregate of such amount, plus any
interest deemed earned thereon at the Specified Rate from (and including)
July 3, 2007 to (but excluding) the date of early termination of the Agreement
(except pursuant to Section 7.1(f)), being referred to as the “Purchase
Agreement Fee”).. The Purchase Agreement Fee will be deemed to earn interest at
the Specified Rate. Notwithstanding any provision to the contrary contained
herein, the Purchase Agreement Fee shall be nonrefundable by Seller; provided,
however, the Purchase Agreement Fee shall be refundable in the event that this
Agreement is terminated in accordance with Article VII, except Section 7.1(f),
in which event Seller shall pay to the Parent, no later than five (5) Business
Days following the effective date of such termination, an amount equal to the
Purchase Agreement Fee received by it pursuant to this Section 1.7 by wire
transfer of immediately available funds in United States dollars to the bank
account or accounts designated by the Parent. The Deposit shall be credited
against the Purchase Price payable at Closing to Seller or any Affiliate
designated by Seller. If this Agreement is terminated (other than pursuant to
Section 7.1(a), the Purchase Agreement Fee shall be credited against the
Damages, if any, owed by Purchaser to Seller arising out of breach of this
Agreement by Purchaser. The Purchase Agreement Fee shall not be deemed to be a
liquidated damages payment for any breach by Purchaser of this Agreement. If
Seller fails to refund the Purchase Agreement Fee within five (5) Business Days
of Seller becoming obligated hereunder to make such a refund, the amount thereof
shall bear default interest at a rate equal to LIBOR plus two per cent (2%) per
annum.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND NOTE HOLDERS
          2.1 Representations and Warranties of Seller. Except as otherwise
disclosed in the Seller Disclosure Letter attached hereto as Exhibit A (the
“Seller Disclosure Letter”), Seller represents and warrants, as to itself only,
and in connection with the Shares Transaction only, to Purchaser, as follows in
this Section 2.1:
               2.1.1 Organization and Qualification. Seller is a limited
liability company duly formed and validly existing under the laws of the State
of Michigan, and has full power and authority to own, lease and operate its
assets and properties and to conduct its business as presently conducted, except
where the failure to have such power and authority would not reasonably be
expected to have, individually or in the aggregate, a Seller Material Adverse
Effect.
               2.1.2 Title to Shares. As of the Closing Date, Seller will be the
lawful record and beneficial owner of the Shares set forth opposite its name in
Schedule 2.1.2 of the Seller Disclosure Letter, free and clear of any and all
Liens, except for Liens created by this Agreement. The Shares constitute all of
the issued and outstanding Equity Interests in the Companies. The transfer of
the Shares to Purchaser in the manner contemplated under Article I,
simultaneously with the payment by Purchaser of the Purchase Price to Seller,
shall transfer to Purchaser valid beneficial and legal title to the Shares.
There are no outstanding options, warrants or other rights of any kind to
acquire from Seller or any of its Affiliates any Shares or securities
convertible into or exchangeable for, or which otherwise confer on the holder
thereof

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any right to acquire from Seller any Shares, nor is Seller committed to issue
any such option, warrant, right or security.
               2.1.3 Authority; Non-Contravention; Approvals.
               (a) Authority. As of the Effective Date Seller has full power and
authority to enter into this Agreement and, to consummate the transactions to be
effected by Seller as contemplated hereby. As of the Effective Date the
execution, delivery and performance by Seller of this Agreement and the
consummation by Seller of the transactions to be effected by Seller as
contemplated hereby shall have been duly and validly authorized by all requisite
action on the part of Seller, and no other proceedings or approvals on the part
of Seller shall thereafter be necessary to authorize this Agreement or to
consummate the transactions to be effected by Seller as contemplated hereby. As
of the Effective Date this Agreement shall have been duly executed and delivered
by Seller and, assuming the due authorization, execution and delivery hereof by
Purchaser, shall thereafter constitute the legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms, except as
limited by applicable Law affecting the enforcement of creditors’ rights
generally or by general equitable principles.
               (b) Non-Contravention. Except for matters arising with respect to
the regulatory or corporate status of Purchaser, the execution and delivery of
this Agreement by Seller do not, and the consummation of the transactions
contemplated hereby will not, result in any violation or breach of or default
(with or without notice or lapse of time or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation under (any such
violation, breach, default, right of termination, cancellation or acceleration
is referred to herein as a “Violation”), or result in the creation of any Lien
upon any of the properties or assets of Seller pursuant to any provision of
(i) the Organizational Documents of Seller; (ii) any lease, mortgage, indenture,
note, bond, deed of trust, or other written instrument or agreement of any kind
to which it or any of its Affiliates is a party or by which it or any of its
Affiliates may be bound; or (iii) any Law, Permit or Governmental Order
applicable to it or any of its Affiliates, other than in the case of clauses
(i), (ii) and (iii) any such Violation or Lien which would not reasonably be
expected to have, individually or in the aggregate, a Seller Material Adverse
Effect.
               (c) Approvals. Except for the filings or approvals as may be
required due to the regulatory or corporate status of Purchaser, no Consent of
any Person is required to be made or obtained by Seller in connection with the
execution and delivery of this Agreement or the consummation by Seller of the
transactions to be effected by Seller as contemplated hereby, except those which
the failure to make or obtain would not reasonably be expected to have,
individually or in the aggregate, a Seller Material Adverse Effect.
Schedule 2.1.3(d) sets forth other material consents, approvals, filings and
notices that may be necessary, advisable or appropriate in connection with the
transactions contemplated by this Agreement.
               2.1.4 Organization and Qualification of Companies and
CMS-Inversiones; Capitalization.
               (a) Each Company and CMS-Inversiones has been duly formed, is
validly existing and is in good standing (to the extent such concepts are
recognized under

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applicable Law) under the laws of the jurisdiction of its formation, with full
corporate power and authority to own or lease and to operate its properties and
to conduct its business as presently conducted and is duly qualified to do
business in all jurisdictions in which such qualification is necessary under
applicable Law as a result of the conduct of its business or the operation of
its properties.
               (b) The authorized capital stock of the Companies consists of
(i) for CMS-Gas, 50,000 ordinary shares, $1.00 par value, of which 100 shares
are issued and outstanding, and (ii) for CMS-Generation, 50,000 ordinary shares,
$1.00 par value, of which 100 shares are issued and outstanding. CMS-Inversiones
was initially formed with subscribed capital of CLP 187,650,000,000.
               (c) Except as provided for in the Organizational Documents of the
Companies and of CMS-Inversiones, there are no subscriptions, options, warrants,
calls, conversion, exchange, purchase right or other written contracts, rights,
agreements or commitments of any kind obligating, directly or indirectly, the
Companies or CMS-Inversiones to issue, transfer, sell or otherwise dispose of,
or cause to be issued, transferred, sold or otherwise disposed of, any Equity
Interests of the Companies or CMS-Inversiones or any securities convertible into
or exchangeable for any such Equity Interests.
               (d) None of the Companies or CMS-Inversiones has any material
third party debt as of the date of this Agreement. As of the Closing Date, the
only assets of the Companies and CMS-Inversiones will be the Equity Interests
set forth on Schedule 3.1.1.
               2.1.5 Brokers and Finders. Neither Seller nor any of its
Affiliates has entered into any written agreement or arrangement entitling any
agent, broker, investment banker, financial advisor or other firm or Person to
any broker’s or finder’s fee or any other commission or similar fee payable by
Seller, its Affiliates or the Companies in connection with any of the
transactions contemplated by this Agreement, except J.P. Morgan Securities Inc.
               2.1.6 Financial Distress of Companies Subsidiaries. The business,
operations and financial condition of the Companies Subsidiaries are subject to
considerable distress, and the bankruptcy of one or more of the Companies
Subsidiaries is a material probability or likelihood. To the extent that Seller
or its Affiliates reasonably believes upon the advice of counsel such action to
be required from a legal standpoint, a bankruptcy filing for one or more
Companies Subsidiaries shall not constitute a breach of this Agreement or an
event that constitutes a failure of condition to Closing or that gives rise to a
right to terminate this Agreement. For the avoidance of doubt, under no
circumstances shall Seller be required or expected to provide any equity or debt
financing to any of the Operating Companies.
               2.1.7 No Other Representations and Warranties.
               EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
ARTICLE II (INCLUDING THE DISCLOSURE SCHEDULES), THE SELLER MAKES NO EXPRESS OR
IMPLIED REPRESENTATION OR WARRANTY, AND THE SELLER HEREBY DISCLAIMS ANY SUCH
REPRESENTATION OR WARRANTY WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT AND

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THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
          2.2 Representations and Warranties of the Note Holders. Except as
otherwise disclosed in the Note Holders Disclosure Letter attached hereto as
Exhibit B (the “Note Holders Disclosure Letter”), each Note Holder severally and
not jointly represents and warrants, as to itself only, and in connection with
the Notes Transaction only, to Purchaser, as follows in this Section 2.2:
               2.2.1 Organization and Qualification. Each Note Holder is a legal
entity duly formed and validly existing under the laws of the jurisdictions of
its formation, and has the power and authority to own, lease and operate its
assets and properties and to conduct its business as presently conducted, except
where the failure to have such power and authority would not reasonably be
expected to have, individually or in the aggregate, a Seller Material Adverse
Effect.
               2.2.2 Title to Notes. Each Note Holder is the lawful record and
beneficial owner of each Note set forth opposite its name in Schedule 2.2.2 of
the Note Holders Disclosure Letter, free and clear of any and all Liens. A true
and correct copy of each Note, as amended from time to time through the date of
this Agreement, has been made available to Purchaser prior to the date hereof.
From December 31, 2006 through the date of this Agreement, none of the Note
Holders have consented to any waiver of any of its rights under the applicable
Notes.
               2.2.3 Authority; Non-Contravention; Approvals.
               (a) Authority. As of the Effective Date, each Note Holder has
full power and authority to enter into this Agreement and to consummate the
transactions to be effected by the Note Holder as contemplated hereby. As of the
Effective Date, the execution, delivery and performance by each Note Holder of
this Agreement and the consummation by each Note Holder of the transactions to
be effected by the Note Holder as contemplated hereby shall have been duly and
validly authorized by all requisite action on the part of each Note Holder, and
no other proceedings or approvals on the part of a Note Holder shall thereafter
be necessary to authorize this Agreement or to consummate the transactions to be
effected by the Note Holder as contemplated hereby. As of the Effective Date,
this Agreement shall have been duly executed and delivered by the Note Holders
and, assuming the due authorization, execution and delivery hereof by Purchaser,
shall thereafter constitute the legal, valid and binding obligation of each Note
Holder, enforceable against the Note Holders in accordance with its terms,
except as limited by applicable Law affecting the enforcement of creditors’
rights generally or by general equitable principles.
               (b) Non-Contravention. Except for matters arising with respect to
the regulatory or corporate status of Purchaser, the execution and delivery of
this Agreement by the Note Holders do not, and the consummation of the
transactions contemplated hereby will not, result in any Violation, or result in
the creation of any Lien upon any of the properties or assets of the Note
Holders pursuant to any provision of (i) the Organizational Documents of the
Note Holders; (ii) any lease, mortgage, indenture, note, bond, deed of trust, or
other written instrument

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or agreement of any kind to which the Note Holders are a party or by which they
may be bound; or (iii) any Law, Permit or Governmental Order applicable to it,
subject to obtaining the Note Holders Required Approvals; other than in the case
of clauses (i), (ii) and (iii) any such Violation or Lien which would not
reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect.
               (c) Approvals. Except for the filings or approvals as may be
required due to the regulatory or corporate status of Purchaser, no Consent of
any Person is required to be made or obtained by any Note Holder in connection
with the execution and delivery of this Agreement or the consummation by the
Note Holders of the transactions to be effected by Note Holders as contemplated
hereby, except those which the failure to make or obtain would not reasonably be
expected to have, individually or in the aggregate, a Seller Material Adverse
Effect.
               2.2.4 Brokers and Finders. Neither the Note Holders nor any of
their Affiliates have entered into any written agreement or arrangement
entitling any agent, broker, investment banker, financial advisor or other firm
or Person to any broker’s or finder’s fee or any other commission or similar fee
payable by any of the Note Holders or their Affiliates in connection with any of
the transactions contemplated by this Agreement, except J.P. Morgan Securities
Inc.
               2.2.5 Financial Distress of Companies Subsidiaries. Purchaser
acknowledges that the business, operations and financial condition of the
Companies Subsidiaries are subject to considerable distress, and the bankruptcy
of one or more of the Companies Subsidiaries is a material probability or
likelihood. To the extent that Seller or its Affiliates reasonably believes upon
the advice of counsel such action to be required from a legal standpoint, a
bankruptcy filing for one or more Companies Subsidiaries shall not constitute a
breach of this Agreement or an event that constitutes a failure of a condition
to Closing or that gives rise to a right to terminate this Agreement. For the
avoidance of doubt, under no circumstances shall Seller be required or expected
to provide any equity or debt financing to any of the Operating Companies.
               2.2.6 No Other Representations and Warranties.
               EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
ARTICLE II (INCLUDING THE DISCLOSURE SCHEDULES), NONE OF THE NOTE HOLDERS MAKES
ANY EXPRESS OR IMPLIED REPRESENTATION OR WARRANTY, AND EACH NOTE HOLDER HEREBY
DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT AND THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT.

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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT
TO THE COMPANIES SUBSIDIARIES
     Except as disclosed in the Seller Disclosure Letter, Seller represents and
warrants to Purchaser, as follows in this Article III (provided that each
representation and warranty made by Seller in this Article III is made solely to
the Knowledge of Seller).:
          3.1 Capitalization and Title.
               3.1.1 Description. Set forth on Schedule 3.1.1 of the Seller
Disclosure Letter for each of the Companies Subsidiaries and CMS-Inversiones is
(i) its jurisdiction of formation; (ii) its authorized Equity Interests;
(iii) the number of its issued and outstanding Equity Interests; and (iv) the
names of the owners of its issued and outstanding Equity Interests.
               3.1.2 No Consents to Liens. From December 31, 2006 through the
date of this Agreement, none of Seller, the Governing Company or the Holding
Company has consented to the creation of any Liens on the Equity Interests of
any of the Companies Subsidiaries.
          3.2 Financial Statements. The audited balance sheet as at December 31,
2006 and the related audited statements of income and of cash flows for the year
then ended for each Companies Subsidiary (individually, a “Company Subsidiary
Financial Statement” and, collectively, the “Companies Subsidiaries Financial
Statements”) have been provided to Purchaser prior to the date of this
Agreement. As of the respective dates thereof, each Companies Subsidiary
Financial Statement fairly presents in all material respects the financial
position of the respective Companies Subsidiary as of December 31, 2006, and the
results of such Companies Subsidiary’s operations and cash flows for the period
indicated (except for normal and recurring year-end adjustments) in conformity
with Chilean GAAP in accordance with the terms thereof); provided that no
representation is made by Seller with respect to whether any write-off or other
adjustment of asset values would have been appropriate as of any such dates.
From December 31, 2006 through the date of this Agreement, Seller has not
approved the incurrence of any third party debt by any of the Companies
Subsidiaries, nor is Seller aware of any such incurrence during such period.
          3.3 Tax Matters. Except as set forth in Schedule 3.3 of the Seller
Disclosure Letter, each of the Companies Subsidiaries has, or, in each case, a
Person acting on its behalf has as of the date of this Agreement filed with the
appropriate Governmental Entity all material Tax Returns required to have been
filed by it. No material audits or other proceedings are pending, as of the date
hereof, with regard to any material Taxes or Tax Returns.
          3.4 Compliance with Laws. Except as set forth in Schedule 3.4 of the
Seller Disclosure Letter, as of the date of this Agreement none of the Company,
any Companies Subsidiary or CMS-Inversiones has received written notice of or
has been charged with any violation of, nor is it under investigation with
respect to any violation of, any applicable Law (including any applicable
foreign corrupt practices Law) or applicable Governmental Order,

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except in each case for violations which would not reasonably be expected to
have, individually or in the aggregate, a Companies Material Adverse Effect.
          3.5 Certain Contracts. Purchaser has been provided with a true and
correct copy of each contract identified in Schedule 3.5 of the Seller
Disclosure Letter. As of the date of this Agreement, no party to the contracts
identified in Schedule 3.5 of the Seller Disclosure Letter is in breach or
default thereunder, except in each case for any breach or default that would not
reasonably be expected to have, individually or in the aggregate, a Companies
Material Adverse Effect.
          3.6 Operating Company Notes. Purchaser has been provided with a true
and correct copy of each promissory note issued by any Operating Company in
favor of Atacama Finance Co. as in effect as of the date hereof (the “Operating
Company Notes”). From December 31, 2006 through the date of this Agreement, the
Seller has not consented to any waiver of any rights of Atacama Finance Co.
under any of the Operating Company Notes nor is Seller aware of any such waiver
during such period.
          3.7 Financial Distress of Companies Subsidiaries. THE BUSINESS,
OPERATIONS AND FINANCIAL CONDITION OF THE COMPANIES SUBSIDIARIES ARE SUBJECT TO
CONSIDERABLE DISTRESS, AND THE BANKRUPTCY OF ONE OR MORE OF THE COMPANIES
SUBSIDIARIES IS A MATERIAL PROBABILITY OR LIKELIHOOD. TO THE EXTENT THAT SELLER
OR ITS AFFILIATES REASONABLY BELIEVES UPON THE ADVICE OF COUNSEL SUCH ACTION TO
BE REQUIRED FROM A LEGAL STANDPOINT, A BANKRUPTCY FILING FOR ONE OR MORE
COMPANIES SUBSIDIARIES SHALL NOT CONSTITUTE A BREACH OF THIS AGREEMENT OR AN
EVENT THAT CONSTITUTES A FAILURE OF CONDITION TO CLOSING OR THAT GIVES RISE TO A
RIGHT TO TERMINATE THIS AGREEMENT. FOR THE AVOIDANCE OF DOUBT, UNDER NO
CIRCUMSTANCES SHALL SELLER BE REQUIRED OR EXPECTED TO PROVIDE ANY EQUITY OR DEBT
FINANCING TO ANY OF THE OPERATING COMPANIES.
          3.8 No Other Representations and Warranties. EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE III (INCLUDING THE
DISCLOSURE SCHEDULES), THE SELLER MAKES NO EXPRESS OR IMPLIED REPRESENTATION OR
WARRANTY WITH RESPECT TO THE COMPANIES SUBSIDIARIES, AND THE SELLER HEREBY
DISCLAIMS ANY SUCH REPRESENTATION OR WARRANTY WITH RESPECT TO THE COMPANIES
SUBSIDIARIES.

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
     Purchaser represents and warrants to Seller and to the Note Holders as
follows in this Article IV:
          4.1 Organization and Qualification. Purchaser is a limited liability
company, duly formed, validly existing and in good standing under the laws of
the State of Delaware. Purchaser has full power and authority to own, lease and
operate its assets and properties and to conduct its business as presently
conducted. Purchaser is duly qualified to do business and in good standing as a
foreign limited liability company in all jurisdictions in which such
qualification is necessary under applicable Law as a result of the conduct of
its business or the ownership of its properties, except for those jurisdictions
where failure to be so qualified or in good standing would not reasonably be
expected to have, individually or in the aggregate, a Purchaser Material Adverse
Effect.
          4.2 Authority; Non-Contravention; Approvals.
               (a) Authority. Purchaser has full power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. The
execution, delivery and performance by Purchaser of this Agreement and the
consummation by Purchaser of the transactions contemplated hereby have been duly
and validly authorized by all requisite action on the part of Purchaser, and no
other proceedings or approvals on the part of Purchaser are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly executed and delivered by Purchaser and, assuming
the due authorization, execution and delivery hereof by each other Party,
constitutes the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as limited by applicable
Law affecting the enforcement of creditors’ rights generally or by general
equitable principles.
               (b) Non-Contravention. The execution and delivery of this
Agreement by Purchaser do not, and the consummation of the transactions
contemplated hereby will not, result in any Violation or result in the creation
of any Lien upon any of the respective properties or assets of Purchaser
pursuant to any provision of (i) the Organizational Documents of Purchaser, as
the case may be; (ii) any lease, mortgage, indenture, note, bond, deed of trust,
or other written instrument or agreement of any kind to which Purchaser is a
party or by which Purchaser may be bound; or (iii) any Law, Permit or
governmental order applicable to Purchaser; other than in the case of clauses
(i), (ii) and (iii) for any such Violation or Lien that would not reasonably be
expected to have, individually or in the aggregate, a Purchaser Material Adverse
Effect.
               (c) Approvals. Except for the filings or approvals as may be
required due to the regulatory or corporate status of Seller or any Company, no
Consent of any Governmental Entity is required to be made or obtained by
Purchaser in connection with the execution and delivery of this Agreement or the
consummation by Purchaser of the transactions

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contemplated hereby, except those which the failure to make or obtain would not
reasonably be expected to have, individually or in the aggregate, a Purchaser
Material Adverse Effect.
          4.3 Financing. Purchaser has, and will have at the Closing, available
cash and/or credit capacity, either in its accounts, through binding and
enforceable credit arrangements or borrowing facilities or otherwise, (i) to pay
the Purchase Price at the Closing, (ii) to pay all fees and expenses required to
be paid by Purchaser in connection with the transactions contemplated by this
Agreement, and (iii) to perform all of its other obligations hereunder.
          4.4 Investment Intention; Sufficient Investment Experience;
Independent Investigation; Financial Distress of Companies Subsidiaries.
               (a) Purchaser understands that the purchase of the Shares and
Notes pursuant to the terms of this Agreement involves substantial risk.
Purchaser has such knowledge and experience in financial and business matters
that it is capable of evaluating the Companies, the Companies Subsidiaries and
the Notes and the merits and risks of an investment in the Shares and the Notes
Purchaser acknowledges and affirms that it has completed its own independent
investigation, analysis and evaluation of the Companies and the Companies
Subsidiaries and the Notes and that it has made all such reviews and inspections
of the business, assets, results of operations and condition (financial or
otherwise) of the Companies and the Companies Subsidiaries as it has deemed
necessary or appropriate, and that in making its decision to enter into this
Agreement and to consummate the transactions contemplated hereby it has relied
on its own independent investigation, analysis, and evaluation of the Companies
and the Companies Subsidiaries and the Notes and the representations and
warranties of the Seller and the Note Holders set forth in Articles II and III,
as applicable. Purchaser acknowledges and agrees that in its or its Affiliates’
capacity as voting members of the boards of directors or other governing bodies
of the Companies Subsidiaries and as shareholder or owner of an interest in each
of the Companies Subsidiaries it is deemed to have knowledge of the information
made available in the data room, through management presentations and site
visits, and that no such information shall form the basis for a breach or
inaccuracy of any representation or warranty of Seller or the Note Holders set
forth in this Agreement.
               (b) Purchaser acknowledges that the business operations and
financial condition of the Companies Subsidiaries are subject to considerable
distress, and that the bankruptcy of one or more of the Companies Subsidiaries
is a material probability or likelihood. Purchaser further acknowledges that it
has had a full opportunity to investigate the business and affairs of the
Companies Subsidiaries with respect to these issues and understands the risks of
their financial failure. Purchaser and its Affiliates have acknowledged and
agreed to take all risk of insolvency and/or bankruptcy of the Companies and the
Companies Subsidiaries, including without limitation, a filing for insolvency by
any Company or any of the Companies Subsidiaries or a declaration of insolvency,
or similar Governmental Order, by any Governmental Entity. Any such declaration
or Governmental Order shall, with respect to Seller or any Note Holder, under no
circumstance constitute a breach of any obligation, representation, warranty,
covenant or condition to Closing, nor shall otherwise constitute an event giving
rise to the right of Purchaser to modify or terminate its obligations to close
the Transaction pursuant to the Agreement. Purchaser further agrees that prior
to the Closing, to the extent that Seller or its

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Affiliates reasonably believes upon the advice of counsel such action to be
required from a legal standpoint, Seller and its Affiliates shall have the right
to effect a bankruptcy filing for one or more Companies Subsidiaries in their
sole discretion after consultation with Purchaser, and that such bankruptcy
filings shall not constitute a breach of this Agreement or an event that
constitutes a failure of condition to Closing or an event that gives rise to a
right to terminate this Agreement. For the avoidance of doubt, under no
circumstances shall Seller be required or expected to provide any equity or debt
financing to any of the Operating Companies.
          4.5 Brokers and Finders. Purchaser has not entered into any written
agreement or arrangement entitling any agent, broker, investment banker,
financial advisor or other firm or Person to any broker’s or finder’s fee or any
other commission or similar fee in connection with any of the transactions
contemplated by this Agreement.
          4.6 No Knowledge of Seller or Note Holders Breach. Neither Purchaser
nor any of its Affiliates has Knowledge of any breach or inaccuracy, or of any
facts or circumstances which may constitute or give rise to a breach or
inaccuracy, of any representation or warranty of Seller or the Note Holders set
forth in this Agreement.
ARTICLE V
COVENANTS
          5.1 Notification to the CNDC and ENARGAS; Negative Antitrust and
ENARGAS Decision; Transfer of Shares to a Third Purchaser.
               (a) Notification of the Transactions to the CNDC and ENARGAS. No
later than seven (7) days from the Closing Date, and at any subsequent date that
may be required by instruction of the CNDC and/or ENARGAS, Seller and Purchaser
shall (i) cooperate with one another and file all notifications, applications,
registrations, filings, declarations and reports required under the Antitrust
Law and the Gas Law relating to the Transactions, and (ii) use their reasonable
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable to obtain the
Argentine Transaction Approvals.
               (b) Negative Antitrust Decision and/or Negative ENARGAS Decision.
          (i) Purchaser hereby expressly acknowledges and undertakes that the
entire risk as to a Negative Antitrust Decision and/or Negative ENARGAS Decision
and/or the issuance of any resolution, decree, judgment, injunction or other
order, whether temporary, preliminary or permanent, oral or in writing, in each
case pursuant to Antitrust Law and/or Gas Law, as the case may be, that may
prohibit, prevent or restrict the consummation of the Transactions rests
exclusively with Purchaser.
          (ii) Purchaser shall be the sole responsible party to perform any and
all actions required by the Negative Antitrust Decision and/or Negative ENARGAS
Decision including, but not limited to, (x) a divesture of Purchaser’s
businesses, product lines or assets in favor of a third party, at its own risk,
cost and expense; and (y) appointment of the management of the Companies
following directives by the CNDC or other antitrust authority. Notwithstanding
anything contained herein to the contrary,

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none of Seller or its Affiliates shall be required to (A) divest any of its
respective businesses, product lines or assets that are not transferred to
Purchaser or (B) take or agree to take any other action or agree to any
limitation that could reasonable be expected to (1) result in a adverse effect
on its business, assets, condition (financial or otherwise) or (2) deprive
Seller or any Note Holder, or any Affiliate of any of them, of any benefit of
the Transactions
          (iii) Each Party shall promptly give to the other Party notice of all
information in its possession regarding the Negative Antitrust Decision and/or
the Negative ENARGAS Decision or its consequences and promptly transmit to the
other Party a copy of all documents received or sent in that respect. Each Party
shall also respond promptly to any reasonable request for information from the
other Party with respect to a Negative Antitrust Decision and/or Negative
ENARGAS Decision or its consequences.
          (iv) In furtherance of the foregoing, Seller shall execute and
deliver, or cause to be executed and delivered, all such documents and
instruments and shall take, or cause to be taken, all such further or other
actions, as Purchaser may reasonably deem necessary to permit Purchaser to have
complete control of the Companies as from the date hereof.
               (c) Waiver by Purchaser. None of the Seller, its Affiliates or
any of their respective officers, directors or employees shall be held liable
for any loss or damage arising out of any of the events provided for in
Section 5.1(b) hereof.
               (d) [Intentionally Omitted.]
               (e) Indemnification.
          (i) Subject only to the terms and limitations set forth in this
Section 5.1, Purchaser shall indemnify, defend and hold harmless Seller or any
of its Affiliates and their respective directors, officers, employees,
successors, permitted assigns, advisors, agents, or representatives (whether or
not also indemnified by any other Person under any other document) from and
against any penalties, fines, administrative sanctions, costs and expenses
(including reasonable attorneys’ fees as provided in Section 5.1(e)(ii) below)
which directly relate to, or arise out of, any of the events provided for in
Section 5.1(b), including fines, penalties and/or administrative sanctions
imposed, or handed down, by the CNDC, ENARGAS, the Secretariat of Internal Trade
and/or any other agency, tribunal or court because the Transactions is
ultimately deemed to breach the Antitrust Law and/or the Gas Law (a “Claim”).
          (ii) Within five (5) days following the receipt by Seller of a Claim,
Seller shall promptly give notice of such Claim to Purchaser in writing.
Purchaser shall assume and control the defense of a Claim with counsel of their
own choice it being understood, however, that Seller may retain, at its own
cost, separate co-counsel and participate fully in the defense of the Claim with
full access to all relevant information.

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          (iii) If a Claim involves a fine, penalty and/or an administrative
sanction to Seller, then at Seller’s option Purchaser and Parent shall be
jointly and severally liable to (i) pay the amount of the relevant fine, penalty
and/or an administrative sanction; or (ii) deposit in escrow at Seller’s
satisfaction the amount of the relevant fine, penalty and/or an administrative
sanction. If Purchaser fails to timely pay or deposit the relevant amount of the
fine, penalty and/or an administrative sanction, the outstanding amount thereof
shall bear default interest at a rate equal to LIBOR plus two per cent (2%) per
annum.
          (iv) Notwithstanding Section 5.1(e)(iii), any and all expenses and/or
costs incurred by Seller pursuant to Sections 5.1(b) and 5.1(e) (including, but
not limited to, fines, penalties and/or an administrative sanctions) shall be
reimbursed by Purchaser upon request by Seller within five (5) Business Days
from the date of the request. If Purchaser fails to timely reimburse the
expenses and/or costs incurred by Seller, the outstanding amount thereof shall
bear default interest at a rate equal to LIBOR plus two per cent (2%) per annum.
          (v) If Seller and Purchaser are found jointly liable of any Claim,
Purchaser shall be the sole responsible for the payment and/or settlement of
said Claim and Purchaser hereby waives any right of contribution or other right
of recovery it may have against any Seller.
          (vi) This Section 5.1 shall exclusively govern all Claims. For the
avoidance of doubt, survival limitations contemplated in Section 8.1 hereof
shall not apply to the indemnity undertakings assumed by Purchaser in this
Section 5.1 regarding any Claim.
               (f) Fees, Costs and Expenses. Except for Purchaser’s obligation
to pay all fees, costs and expenses (including, without limitation, reasonable
legal fees) incurred by the parties in connection with any Claim, each of the
parties shall pay all fees, costs and expenses (including, without limitation,
reasonable legal fees) incurred by it in connection with the filings made with
the CNDC and ENARGAS in order to obtain the Antitrust Approval and the ENARGAS
Approval.
          5.2 Access. After the date hereof and prior to the Closing, Seller
shall exercise the voting, governance and contractual powers available to it to
request (subject to any legal, contractual, fiduciary, legal or similar
obligation of Seller or any of its Affiliates, any director, officer or employee
of Seller or any Seller Affiliate) the Operating Companies to permit Purchaser
and its executive officers, managers, counsel, accountants and other
representatives to have reasonable access, upon reasonable advance notice,
during regular business hours, to the assets, employees, properties, books and
records, businesses and operations relating to the Operating Companies as
Purchaser may reasonably request including cooperating with Purchaser accounting
personnel seeking to prepare U.S. GAAP financials for the Operating Companies;
provided, however, that in no event shall Seller be obligated to provide any
access or information if Seller determines, in good faith after consultation
with counsel, that providing such access or information may be inconsistent with
or otherwise violate applicable Law (including without limitation with respect
to bankruptcy or insolvency, or applicable Law affecting creditors’ rights

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generally or general equitable principles), cause Seller or any Operating
Company to breach a confidentiality obligation to which it is bound, or
jeopardize any recognized privilege available to Seller or any Operating
Company. Purchaser agrees to indemnify and hold Seller, any Seller Affiliate and
any director, officer or employee of Seller or any Seller Affiliate harmless
from any and all claims and liabilities, including costs and expenses for loss,
injury to or death of any representative of Purchaser and any loss, damage to or
destruction of any property owned by Seller, any Affiliate of Seller or the
Operating Companies or others (including claims or liabilities for loss of use
of any property) resulting directly or indirectly from the action or inaction of
any of the employees, counsel, accountants, advisors and other representatives
of Purchaser during any visit to the business or property sites of the Operating
Companies prior to the Closing Date, whether pursuant to this Section 5.2 or
otherwise. During any visit to the business or property sites of the Operating
Companies, Purchaser shall, and shall cause its employees, counsel, accountants,
advisors and other representatives accessing such properties to, comply with all
applicable Laws and all of the Operating Companies’ safety and security
procedures and conduct itself in a manner that could not be reasonably expected
to interfere with the operation, maintenance or repair of the assets of the
Operating Companies. Neither Purchaser nor any of its representatives shall
conduct any environmental testing or sampling on any of the business or property
sites of the Operating Companies prior to the Closing Date.
          5.3 Publicity. Except as may be required by applicable Law or by
obligations pursuant to any listing agreement with or rules or regulations of
any national securities exchange, prior to the Closing none of Seller, the Note
Holders, Purchaser nor any of their respective Affiliates shall, without the
express written approval of Seller and Purchaser, make any press release or
other public announcements concerning the transactions contemplated by this
Agreement, except as and to the extent that any such Party shall be so obligated
by applicable Law or pursuant to any such listing agreement or rules or
regulations of any national securities exchange, in which case the other Parties
shall be advised and the Parties shall use reasonable efforts to cause a
mutually agreeable release or announcement to be issued.
          5.4 Fees and Expenses.
               (a) Except as provided in paragraph (b) below and Section 5.1 of
this Agreement, whether or not the Closing occurs, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated by
this Agreement (including, without limitation, any fees and expenses of
investment bankers, brokers, finders, counsel, advisors, experts or other
agents, in each case, incident to or in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby (whether payable prior to,
at or after the Closing Date)) shall be paid by the Party incurring such
expense.
               (b) Notwithstanding anything to the contrary set forth in this
Agreement, Purchaser shall pay (i) any Tax (other than capital gains or general
income tax) imposed with respect to the transactions contemplated by this
Agreement and (ii) any out-of-pocket fees, costs and expenses incurred in
connection with obtaining all Argentine Transaction Approvals (other than the
Parties’ legal fees and expenses which are the subject of paragraph (a) above).

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          5.5 [Intentionally Omitted.]
          5.6 Further Assurances. Subject to Section 5.1 of this Agreement, each
of Seller and the Note Holders, as applicable, and Purchaser agrees that, from
time to time before and after the Closing Date, they shall execute and deliver,
and take, or cause their respective Affiliates to take, such other action, as
may be reasonably necessary to carry out the purposes and intents of this
Agreement (including without limitation Seller requesting Seller’s Cayman
counsel and Chilean counsel to provide Purchaser the accounting, tax, corporate
and commercial books and records of the Companies and CMS-Inversiones).
Purchaser, the Note Holders and Seller agree to use reasonable efforts to
refrain from taking any action which could reasonably be expected to materially
delay the consummation of the Transactions.
          5.7 Preservation of Records. Purchaser acknowledges and agrees that
Seller may, from time to time, in the normal course of investigating,
prosecuting and/or defending various ongoing matters which may relate to the
Companies Subsidiaries or the businesses thereof, and will continue to have, a
need (i) to refer to, and to use as evidence, certain books, records and other
data, including electronic data maintained in computer files, relating to the
Companies Subsidiaries and/or their businesses and (ii) for the support and
cooperation of present or former employees of the Companies Subsidiaries in the
event that such Persons’ assistance or participation is needed to aid in the
defense or settlement of the such matters. Purchaser agrees that it shall, at
its own expense, preserve and keep the records held by it relating to the
respective businesses of the Companies Subsidiaries that could reasonably be
required after the consummation of the transaction contemplated in this
Agreement by Seller for a period of five (5) years; provided, however, that upon
expiration of such period, as applicable, Purchaser shall give written notice to
Seller if it or the custodian of such books and records proposes to destroy or
dispose of the same. Seller shall have the opportunity for a period of thirty
(30) days after receiving such notice to elect to have some or all of such books
and records delivered, at Seller’s expense and risk, to a location chosen by
Seller. In addition, Purchaser shall make such records available to Seller as
may reasonably be required by Seller in connection with, among other things, any
insurance claim, legal proceeding or governmental investigation relating to the
respective businesses of Seller and its Affiliates, including the Companies
Subsidiaries. Seller agrees to maintain the confidentiality of all information
provided by Purchaser or the Companies Subsidiaries hereunder.
          5.8 Change of Name.
               (a) Notwithstanding anything to the contrary contained herein,
within sixty (60) Business Days after the Closing Date, Purchaser shall have
caused the Companies and all entities in which the Companies directly or
indirectly holds an interest that have “CMS” or any similar derivations thereof
in their name to be renamed without reference to “CMS” or any similar
derivations thereof. On or after the Closing Date, Purchaser and its Affiliates
shall not use existing or develop new stationery, business cards and other
similar items that bear the name or mark of “CMS” or any similar derivation
thereof in connection with the businesses of the Company or any of the Companies
Subsidiaries.
               (b) The Parties acknowledge that any damage caused to Seller or
any of its respective Affiliates by reason of the breach by Purchaser or any of
its Affiliates of Section

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5.8(a), in each case would cause irreparable harm that could not be adequately
compensated for in monetary damages alone; therefore, each Party agrees that, in
addition to any other remedies, at law or otherwise; Seller and any of its
respective Affiliates shall be entitled to an injunction issued by a court of
competent jurisdiction restraining and enjoining any violation by Purchaser or
any of its Affiliates of Section 5.8(a), and Purchaser further agrees that it
(x) will stipulate to the fact that Seller or any of its respective Affiliates,
as applicable, have been irreparably harmed by such violation and not oppose the
granting of such injunctive relief and (y) waive any requirement that Seller
post any bond or similar requirement in order for Seller to obtain the
injunctive relief contemplated by this Section 5.8(b).
          5.9 Resignations of Certain Officers and Directors. Upon the written
request of Purchaser, the Seller shall cause, to the extent allowed by its
voting power or any applicable organizational document, the resignations or
removals at the Closing Date of the officers and directors and other persons set
forth on Schedule 5.9 from their position as officer or director, or other
management or employment position, of the Companies, the Companies Subsidiaries
or CMS-Inversiones set forth opposite the name of such officer, director or
person on Schedule 5.9 of the Seller Disclosure Letter.
          5.10 Releases of Certain Guarantees. Purchaser and Seller shall
cooperate to procure at or prior to the Closing the release by the applicable
counterparty of any continuing obligation of Seller or its Affiliates with
respect to any guarantee as set forth on Schedule 5.10 (“Guarantees”); provided
that to the extent a release shall not have been obtained at the time of Closing
with respect to any such Guarantee, Purchaser shall provide an indemnity (in
form and substance satisfactory to Seller) to secure the obligations of Seller
or its Affiliates with respect to each such Guarantee; provided, further, that
any such indemnity with Seller, as beneficiary, shall remain in full force and
effect for the same period from and after the Closing as any such corresponding
Guarantee shall remain in place.
          5.11 [Intentionally Omitted.]
ARTICLE VI
CONDITIONS TO CLOSING
          6.1 Condition to the Obligations of the Parties—No Injunction. The
obligations of the Parties to effect the Closing shall be subject to the
satisfaction or waiver (to the extent permitted by Law) by Purchaser and Seller,
or the Note Holders as applicable, on or prior to the Closing Date, of the
following condition precedent: except for the Antitrust Approval and the ENARGAS
Approval, no statute, rule or regulation shall have been enacted or promulgated
by any Governmental Entity which prohibits the consummation of the transactions
contemplated hereby and there shall be no order or injunction of a court of
competent jurisdiction in effect precluding or prohibiting the consummation of
the transactions contemplated hereby; provided, however, that should any such
order or injunction be entered into or in effect, the Parties shall use
reasonable efforts to have any order or injunction vacated or lifted.

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          6.2 Conditions to the Obligation of Purchaser. The obligations of
Purchaser to effect the Closing shall be subject to the satisfaction or waiver
by Purchaser on or prior to the Closing Date of each of the following
conditions:
               (a) Performance of Obligations of Seller and the Note Holders.
Each of Seller and the Note Holders shall have performed in all material
respects its respective agreements and covenants contained in or contemplated by
this Agreement which are required to be performed by them at or prior to the
Closing.
               (b) Representations and Warranties. The respective
representations and warranties of Seller and the Note Holders set forth in this
Agreement shall be true and correct (i) on and as of the date hereof and (ii) on
and as of the Closing Date with the same effect as though such representations
and warranties had been made on and as of the Closing Date (except for
representations and warranties that expressly speak only as of a specific date
or time which need only be true and correct as of such date or time) except in
each of cases (i) and (ii) for such failures of representations and warranties
to be true and correct (without giving effect to any materiality qualification
or standard contained in any such representations and warranties) that would not
reasonably be expected to have, individually or in the aggregate, a Seller
Material Adverse Effect.
               (c) Officer’s Certificate. Purchaser shall have received a
certificate from an authorized officer of Seller and one certificate from an
authorized officer of each Note Holder other than the Seller, dated as of the
Closing Date, to the effect that, to each of such officers’ knowledge, the
conditions set forth in Sections 6.2(a) and 6.2(b) have been satisfied.
               (d) Closing Deliverables. Purchaser shall have received all
documents and other items required to be delivered by Seller and the Note
Holders to Purchaser pursuant to Section 1.6.
          6.3 Conditions to the Obligation of Seller. The obligation of Seller
and the Note Holders to effect the Closing shall be subject to the satisfaction
or waiver by Seller, or the Note Holders as applicable, on or prior to the
Closing Date of each of the following conditions:
               (a) Performance of Obligations of Purchaser. Purchaser shall have
performed in all material respects its respective agreements and covenants
contained in or contemplated by this Agreement which are required to be
performed by it at or prior to the Closing.
               (b) Representations and Warranties. The representations and
warranties of Purchaser set forth in this Agreement shall be true and correct
(i) on and as of the date hereof and (ii) on and as of the Closing Date with the
same effect as though such representations and warranties had been made on and
as of the Closing Date (except for representations and warranties that expressly
speak only as of a specific date or time which need only be true and correct as
of such date or time) except in each of cases (i) and (ii) for such failures of
representations and warranties to be true and correct (without giving effect to
any materiality qualification or standard contained in any such representations
and warranties) that

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would not reasonably be expected to have, individually or in the aggregate, a
Purchaser Material Adverse Effect.
               (c) [Intentionally Omitted.]
               (d) Officer’s Certificate. Seller shall have received a
certificate from an authorized officer of Purchaser, dated as of the Closing
Date, to the effect that, to the best of such officer’s knowledge, as
applicable, the conditions set forth in Sections 6.3(a) and 6.3(b) have been
satisfied.
               (e) [Intentionally Omitted.]
               (f) Releases of Certain Guarantees. The releases by the
applicable counterparty of any continuing obligation of Seller or any of its
Affiliates with respect to each Guarantee shall have been obtained in accordance
with Section 5.10; provided that to the extent a release shall not have been
obtained at Closing with any such Guarantee, Seller shall have received an
indemnity (in form and substance satisfactory to Seller) to secure the
obligations of Seller or its Affiliates with respect to each such Guarantee;
provided, further, that any such indemnity with Seller, as beneficiary, shall
remain in full force and effect for the same period from and after the Closing
as any such corresponding Guarantee shall remain in place.
               (g) Closing Deliverables. Seller shall have received all
documents and other items required to be delivered by Purchaser to Seller
pursuant to Section 1.6.
ARTICLE VII
TERMINATION
          7.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
               (a) by the mutual written agreement of Purchaser, the Note
Holders and Seller;
               (b) by Purchaser or Seller, if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting the
consummation of the transactions contemplated hereby or (ii) an order, decree,
ruling or injunction shall have been entered permanently restraining, enjoining
or otherwise prohibiting the consummation of the transactions contemplated
hereby, and such order, decree, ruling or injunction shall have become final and
non-appealable and the party seeking to terminate this Agreement pursuant to
this Section 7.1(b)(ii) shall have used reasonable efforts to remove such order,
decree, ruling or injunction;
               (c) by Purchaser or Seller, if (i) a statute, rule, regulation or
executive order shall have been enacted, entered or promulgated prohibiting the
consummation of the transactions contemplated hereby or (ii) an order, decree,
ruling or injunction shall have been entered permanently restraining, enjoining
or otherwise prohibiting the consummation of the

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transactions contemplated hereby, and such order, decree, ruling or injunction
shall have become final and non-appealable and the party seeking to terminate
this Agreement pursuant to this Section 7.1(c)(ii) shall have used reasonable
efforts to remove such order, decree, ruling or injunction;
               (d) by Seller, by written notice to Purchaser, if the Closing
Date shall not have occurred on or before August 28, 2007 provided, that the
right to terminate this Agreement under this Section 7.1(d) shall not be
available to Seller if it has failed to fulfill any obligation of Seller or the
Note Holders under this Agreement and such failure shall have caused or resulted
in the failure of the Closing Date to occur on or before such date;
               (e) by Purchaser, so long as Purchaser is not then in material
breach of any of its representations, warranties, covenants or agreements
hereunder, by written notice to Seller, if there shall have been a material
breach of any representation or warranty of Seller or the Note Holders, or a
material breach of any covenant or agreement of Seller or the Note Holders
hereunder, which breaches would be reasonably expected to have, individually or
in the aggregate, a Seller Material Adverse Effect, and such breach shall not
have been remedied within thirty (30) days after receipt by Seller or the Note
Holders, as applicable, of notice in writing from Purchaser (a “Breach Notice”),
specifying the nature of such breach and requesting that it be remedied or
Purchaser shall not have received adequate assurance of a cure of such breach
within such thirty-day period; or
               (f) by Seller, so long as Seller or the Note Holders are not then
in material breach of any of their representations, warranties, covenants or
agreements hereunder, by written notice to Purchaser, if there shall have been a
material breach of any representation or warranty, or a material breach of any
covenant or agreement of Purchaser hereunder, which breaches would reasonably be
expected to have, individually or in the aggregate, a Purchaser Material Adverse
Effect, and such breach shall not have been remedied within thirty (30) days
after receipt by Purchaser of notice in writing from Seller, specifying the
nature of such breach and requesting that it be remedied or Seller shall not
have received adequate assurance of a cure of such breach within such thirty-day
period.
          7.2 Effect of Termination. No termination of this Agreement pursuant
to Section 7.1 shall be effective until notice thereof is given to the
non-terminating Parties specifying the provision hereof pursuant to which such
termination is made. Subject to Section 1.7, if validly terminated pursuant to
Section 7.1, this Agreement shall, subject to Section 8.1, become wholly void
and of no further force and effect without liability to any Party or to any
Affiliate, or its respective members or shareholders, directors, officers,
employees, agents, advisors or representatives, and following such termination
no Party shall have any liability under this Agreement or relating to the
transactions contemplated by this Agreement to any other Party; provided that no
such termination shall (i) relieve the Parties from liability for fraud or any
willful or intentional breach of any provision of this Agreement prior to such
termination or (ii) relieve Purchaser from any liability for any breach of
Purchaser’s representations or warranties contained in Section 4.3 (whether or
not such breach is fraudulent, willful or intentional). If this Agreement is
terminated as provided in Section 7.1, Purchaser shall redeliver to Seller or
the Note Holders, as the case may be, and shall cause its agents to redeliver to
Seller or the Note Holders, as the case may be, all documents, workpapers and
other

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materials of Seller, the Companies and the Companies Subsidiaries and the Note
Holders relating to any of them and the transactions contemplated hereby,
whether obtained before or after the execution hereof, and Purchaser shall
comply with all of its confidentiality obligations to Seller and the Note
Holders under all applicable agreements.
ARTICLE VIII
LIMITS OF LIABILITY; PARENT GUARANTEE
          8.1 Non-Survival of Representations, Warranties, Covenants and
Agreements.
               (a) Except as expressly provided in Section 8.1(b), none of the
representations, warranties, covenants or agreements of Purchaser, the Note
Holders or Seller in this Agreement shall survive the Closing, and no claim of
any sort or on any basis may be made by any Party in respect of any breach of
any such representation, warranty, covenant or agreement after the Closing, and
no breach thereof shall confer any right of rescission of this Agreement. Except
in respect of the representations, warranties, covenants and agreements referred
to in Section 8.1(b) that survive the Closing and except as otherwise provided
for in this Agreement, the sole remedy that a Party may have for a breach of any
representation, warranty, covenant or agreement of Purchaser, the Note Holders
or Seller in this Agreement shall be to terminate this Agreement to the extent
provided for under, and in accordance with the terms of, this Agreement.
               (b) The representations, warranties, covenants or agreements of
Purchaser, Note Holders or Seller in this Agreement shall survive as follows:
               (i) the representations and warranties of Seller contained in
Sections 2.1.2 (Title to Shares) and 2.1.3(a) (Authority) shall survive for one
year from the Closing Date;
               (ii) the representations and warranties of the Note Holders
contained in Sections 2.2.2 (Title to Notes) and 2.2.3(a) (Authority) shall
survive for six months from the Closing Date;
               (iii) the representations and warranties of Purchaser contained
in Section 4.2(a) (Authority) shall survive for one year from the Closing Date;
               (iv) the representations and warranties of Purchaser contained in
Sections 4.4 (Investment Intention; Sufficient Investment Experience;
Independent Investigation; Financial Distress) and 4.6 (No Knowledge of Seller
or Note Holders Breach) shall survive indefinitely; and
               (v) the covenants and agreements of the Parties contained in
Sections 5.1 (Notification to the CNDC and ENARGAS; Negative Antitrust and
ENARGAS Decision; Transfer of Shares to a Third Purchaser), 5.4 (Fees and
Expenses), 5.6 (Further Assurances), 5.7 (Preservation of Records), 5.8 (Change
of Name), 5.10

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(Release of Certain Guarantee) and 7.2 (Effect of Termination), Article VIII
(Limits of Liability) and Article X (General Provisions) shall survive
indefinitely.
No claim or cause of action arising out of the inaccuracy or breach of any
representation, warranty, covenant or agreement of Seller, the Note Holders or
Purchaser may be made following the termination of the applicable survival
period referred to in this Section 8.1(b). The Parties intend to shorten any
statutory limitations applicable to the assertion of claims with respect to this
Agreement, and agree that, after the Closing Date, with respect to Seller, the
Note Holders and Purchaser, any claim or cause of action against any of the
Parties, or any of their respective directors, officers, employees, Affiliates,
successors, permitted assigns, advisors, agents, or representatives based upon,
directly or indirectly, any of the representations, warranties, covenants or
agreements contained in this Agreement, or any other written agreement, document
or instrument to be executed and delivered in connection with this Agreement,
may be brought only as expressly provided in this Article VIII.
               (c) The liability of any Party in respect of which a notice of
claim is given under this Agreement shall be (if such claim has not been
previously satisfied, settled or withdrawn) absolutely determined and any claim
made therein be deemed to have been withdrawn (and no new claim may be made in
respect of the facts, event, matter or circumstance giving rise to such
withdrawn claim) unless an action in respect of such claim in accordance with
the terms contained herein shall have been commenced within six (6) months of
the date of service of such notice (or such other period as may be agreed by the
relevant Parties) and for this purpose actions shall not be deemed to have
commenced unless they shall have been properly issued and validly served upon
the relevant Party.
          8.2 Parent Guarantee.
               (a) For value received, Parent hereby fully, unconditionally and
irrevocably guarantees to Seller (the “Parent Guarantee”) (x) the prompt and
punctual payment of any amount Purchaser is required to pay under this
Agreement, when and as the same shall become due and payable, subject as to such
payment obligations to the terms and conditions of this Agreement, including,
without limitation, the payment of the Purchase Price as provided by
Section 1.6, and (y) the prompt and full performance when due by Purchaser of
its obligations up to and through Closing under this Agreement. Parent’s
guarantee obligations include the principal, interest, fines, fees, costs and
other amounts that may be due and payable by Purchaser under this Agreement.
               (b) The Parent Guarantee is a first demand guarantee and shall
constitute an autonomous and independent obligation of Parent not being
ancillary to the obligations of Purchaser under this Agreement. Parent hereby
agrees to cause any such payment or performance to be made as if such payment or
payment were made by Purchaser.
               (c) Parent hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of a merger or bankruptcy of
Purchaser, any right to require a proceeding first against Purchaser, protest or
notice with respect to any amount payable by Purchaser under this Agreement and
all demands whatsoever, and covenants that the Parent Guarantee will not be
discharged except by (i) termination of this Agreement according to its

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terms, (ii) payment in full of all amounts due and payable under this Agreement,
(iii) performance in full of all obligations due under this Agreement and
(iv) payment of any Damages.
               (d) The applicability of the Parent Guarantee shall not be
affected or impaired by any of the following: (i) any extension of time,
forbearance or concession given to Purchaser; (ii) any assertion of, or failure
to assert, or delay in asserting, any right, power or remedy against Purchaser;
(iii) any amendment of the provisions of this Agreement; (iv) any failure of
Purchaser to comply with any requirement of any Law; (v) the dissolution,
liquidation, reorganization or any other alteration of the legal structure of
Purchaser; (vi) any invalidity or unenforceability of any provision of this
Agreement; or (vii) any other circumstance (other than complete payment by
Purchaser or Parent) which might otherwise constitute a legal or equitable
discharge or defense of a surety or a guarantor.
               (e) Parent shall be subrogated to all rights of Purchaser against
Seller based on and to the extent of any amounts paid to Seller by Parent
pursuant to the provisions of the Parent Guarantee.
ARTICLE IX
DEFINITIONS AND INTERPRETATION
          9.1 Defined Terms. The following terms are defined in the
corresponding Sections of this Agreement:

      Defined Term   Section Reference
 
   
Agreement
  Preamble
Arbitration Expenses
  Section 10.9
Breach Notice
  Section 7.1(e)
Closing
  Section 1.5
Closing Date
  Section 1.5
CMS-Capital
  Preamble
CMS-Cayman
  Preamble
CMS-Gas
  Recitals
CMS-Generation
  Recitals
CMS-Inversiones
  Recitals
Claim
  Section 5.1(e)(i)
Company/Companies
  Recitals
Companies Subsidiaries Financial Statements
  Section 3.2
Deposit
  Section 1.7
Dispute
  Section 10.9
Effective Date
  Preamble
Governing Company
  Recitals
Guarantees
  Section 5.10
Holding Company
  Recitals
ICC
  Section 10.9

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      Defined Term   Section Reference
 
   
Note/Notes
  Recitals
Note Holders Disclosure Letter
  Section 2.2
Note Holders
  Preamble
Notes Transaction
  Section 1.3
Operating Company Notes
  Section 3.6
Panel
  Section 10.9
Parent
  Preamble
Party/Parties
  Preamble
Prior Agreement
  Recitals
Purchase Agreement Fee
  Section 1.7
Purchase Price
  Section 1.4
Purchaser
  Preamble
Rules
  Section 10.9
Seller
  Preamble
Seller Disclosure Letter
  Section 2.1
Seller Termination Date
  Section 7.1(d)
Shares
  Recitals
Shares Transaction
  Section 1.1
Transactions
  Section 1.3
Violation
  Section 2.1.3(b)

          9.2 Definitions. Except as otherwise expressly provided in this
Agreement, or unless the context otherwise requires, whenever used in this
Agreement, the following terms will have the meanings indicated below:
     “Argentine Transaction Approvals” means the Antitrust Approval and the
ENARGAS Approval.
     “Affiliate” means, with respect to any Person or group of Persons, a Person
that directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with such Person or group of Persons.
     “Antitrust Approval” is the approval of the Transactions without
undertakings by the Republic of Argentina Secretariat of Internal Trade, or any
agency or tribunal that may replace it in the future or that may be declared by
a res judicata judgment to be empowered to issue a final decision on the
Transactions, approving the same under the Antitrust Law.
     “Antitrust Law” as regards the Republic of Argentina means Law No. 25,156
(as amended), Decree No. 89/2001, Resolution No. 40/2001 of the former
Secretariat of Competition and Consumer Defense, Resolution No. 164/2001 of the
former Secretariat of Competition, Deregulation and Consumer Defense, Resolution
No. 26/2006 of the former Secretariat of Technical Coordination and any other
law or regulation, administrative resolution and judicial decision addressing
competition issues, including

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but not limited to the competition clearance of mergers, acquisitions or other
business combinations.
     “Business Day” means a day other than a Saturday, a Sunday or any other day
on which banks are not required to be open or are authorized to close in New
York, New York.
     “Chilean GAAP” means generally accepted accounting principles in Chile, as
in effect from time to time.
     “CLP” means Chilean pesos, the legal currency of Chile;
     “CNDC” shall mean the Argentine Comisión Nacional de Defensa de la
Competencia.
     “Companies Material Adverse Effect” means any material adverse effect on
the business properties, financial condition or results of operations of any of
the Companies Subsidiaries; provided, however, that the term “Companies Material
Adverse Effect” shall not include effects that result from or are consequences
of (i) the current and prospective financial position of the Companies
Subsidiaries, or the insolvency or bankruptcy of any of the Companies
Subsidiaries, or the other matters contemplated by Section 4.4 of this
Agreement, (ii) changes in financial, securities or currency markets, changes in
prevailing interest rates or foreign exchange rates, changes in general economic
conditions, changes in electricity, gas or other fuel supply and transmission
and transportation markets, including changes to market prices for electricity,
steam, natural gas or other commodities, or effects of weather or meteorological
events, (iii) changes in Law, rule or regulation of, or the effect of any
actions taken by, any Governmental Entity in Chile, Argentina or any other state
or municipality in which any of the Companies Subsidiaries operates, (iv) events
or changes that are consequences of hostility, terrorist activity, acts of war
or acts of public enemies, (v) changes in accounting standards, principles or
interpretations, (vi) any delay in the receipt of, or the failure to receive,
the Argentine Transaction Approvals, (vii) breach of agreement, or failure to
perform by any third party under a contract with any of the Companies
Subsidiaries or (viii) actions taken or not taken solely at the request of
Purchaser.
     “Companies Subsidiaries” means, collectively, the Governing Company, the
Holding Company and the Operating Companies.
     “Companies Subsidiary” means, individually, each of the Governing Company,
the Holding Company and each of the Operating Companies.
     “Consent” means any consent, approval, authorization, order, filing,
registration or qualification of, by or with any Person.
     “Consortium Agreement” means the agreement dated as of May 19, 1997, by and
between CMS Enterprises Company, a corporation organized and existing under the
laws of the State of Michigan, and Empresa Nacional de Electricidad S.A., a
corporation

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  organized and existing under the laws of the Republic of Chile, as amended
from time to time.
     “Control” (including the terms “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management policies of a Person, whether through the
ownership of voting securities or other Equity Interests, by contract or credit
arrangement, as trustee or executor, or otherwise. Solely for the purpose of the
preceding sentence, a company is “directly controlled” by another company or
companies holding shares carrying the majority of votes exercisable at a general
meeting (or its equivalent) of the first mentioned company; and a particular
company is “indirectly controlled” by a company or companies (hereinafter called
the “parent company or companies”) if a series of companies can be specified,
beginning with the parent company or companies and ending with the particular
company, so related that each company of the series except the parent company or
companies is directly controlled by one or more of the preceding companies in
the series.
     “Damages” means Liabilities, demands, claims, suits, actions, or causes of
action, losses, costs, expenses, damages and judgments, whether or not resulting
from third party claims (including reasonable fees and expenses of attorneys and
accountants).
     “ENARGAS Approval” is the approval of the Transactions without undertakings
by the Argentine Ente Nacional Regulador del Gas (ENARGAS), or any agency or
tribunal that may replace it in the future or that may be declared by a res
judicata judgment to be empowered to issue a final decision on the Transactions,
approving the same under the Gas Law.
     “Equity Interests” means shares of capital stock or other equity interests
of any Person, as the case may be.
     “Gas Law” as regards the Republic of Argentina means Law No. 24,076 (as
amended), Decree No. 1738/1992, Resolution ENARGAS N° 1976/2000 and any other
law or regulation, administrative resolution and judicial decision addressing
gas issues in relation to the Companies.
     “Governmental Entity” means any federal, state, municipal or local
governmental or quasi-governmental or regulatory authority, agency, court,
commission or other similar entity in the United States or any non-U.S.
jurisdiction.
     “Governmental Order” means any order, decree, ruling, injunction, judgment
or similar act of or by any Governmental Entity.
     “Knowledge” when used (i) with respect to Purchaser means the actual
knowledge of any fact, circumstance or condition of those officers of Purchaser
or its Affiliates set forth on Schedule 9.2(a) and to the extent set forth on
Schedule 9.2(a); and (ii) with respect to Seller, means the actual knowledge
(without any obligation of inquiry

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or investigation) of any fact, circumstance or condition of those employees of
Seller or its Affiliates set forth on Schedule 9.2(b), and to the extent set
forth on Schedule 9.2(b).
     “Law” means any law, statute, ordinance, regulation or rule of or by any
Governmental Entity or any arbitrator.
     “Liabilities” means any and all known liabilities or indebtedness of any
nature (whether direct or indirect, absolute or contingent, liquidated or
unliquidated, due or to become due, accrued or unaccrued, matured or unmatured,
asserted or unasserted, determined or determinable and whenever or however
arising).
     “LIBOR” shall mean the one-month London interbank offered rate for deposits
in the applicable currency as published by the British Bankers Association from
time to time.
     “Lien” means any lien, security interest, encumbrance or similar adverse
claim.
     “Negative Antitrust Decision” shall mean a resolution by the Republic of
Argentina Secretariat of Internal Trade, or any agency or tribunal that may
replace it in the future or that may be declared by a res judicata judgment to
be empowered to issue a final decision on the Transactions, either prohibiting
the Shares Transaction and/or Notes Transaction or conditioning it and/or them
to the fulfilment of any unduly burdensome undertakings, in each case,
exclusively based on the Antitrust Law.
     “Negative ENARGAS Decision” shall mean a resolution by the ENARGAS, or any
agency or tribunal that may replace it in the future or that may be declared by
a res judicata judgment to be empowered to issue a final decision on the
Transactions, either prohibiting the Shares Transaction and/or Notes Transaction
or conditioning it and/or them to the fulfilment of any unduly burdensome
undertakings, in each case, exclusively based on the Gas Law.
     “Operating Companies” means, collectively, GasAtacama Generación S.A.,
Gasoducto Atacama Chile S.A., Gasoducto Atacama Argentina S.A., Progas S.A.,
Gasoducto Taltal S.A., Gasoducto Atacama Argentina S.A. (Sucursal Argentina),
Atacama Finance Co. (Cayman Is.) and Energex Co. (Cayman Is.).
     “Organizational Documents” means, with respect to any corporation, its
articles or certificate of incorporation, memorandum or articles of association
and by-laws or documents of similar substance; with respect to any limited
liability company, its articles or certificate of organization, formation or
association and its operating agreement or limited liability company agreement
or documents of similar substance; with respect to any limited partnership, its
certificate of limited partnership and partnership agreement or documents of
similar substance; and with respect to any other entity, documents of similar
substance to any of the foregoing.

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     “Permits” means all permits, licenses, franchises, registrations,
variances, authorizations, Consents, orders, certificates and approvals obtained
from or otherwise made available by any Governmental Entity or pursuant to any
Law.
     “Person” means any natural person, firm, partnership, association,
corporation, company, joint venture, trust, business trust, Governmental Entity
or other entity.
     “Purchaser Material Adverse Effect” means any material adverse effect on
(a) the business, assets, financial condition or results of operations of
Purchaser and its Subsidiaries taken as a whole or (b) the ability of Purchaser
to timely consummate the transactions contemplated by this Agreement or perform
its respective obligations hereunder.
     “Seller Material Adverse Effect” means any material adverse effect on the
ability of Seller or any of the Note Holders to consummate the Transactions
contemplated by this Agreement or perform its obligations hereunder.
     “Specified Rate” means the per annum rate of interest published as the
“Prime Rate” in The Wall Street Journal determined as of the date the obligation
to pay interest arises.
     “Subsidiary” means, with respect to any Person (for the purposes of this
definition, the “parent”), any other Person (other than a natural person),
whether incorporated or unincorporated, of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by the parent or by one
or more of its Subsidiaries or by the parent and any one or more of its
Subsidiaries.
     “Tax” or “Taxes” means federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, environmental, stamp,
franchise, employment, payroll, withholding, alternative or add-on minimum, ad
valorem, value added, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any Governmental Entity.
     “Tax Returns” means all tax returns, declarations, statements, reports,
schedules, forms and information returns and any amendments to any of the
foregoing relating to Taxes.
          9.3 Interpretation. In this Agreement, unless otherwise specified, the
following rules of interpretation apply:
               (a) the section and other headings contained in this Agreement
are for reference purposes only and do not affect the meaning or interpretation
of this Agreement;
               (b) words importing the singular include the plural and vice
versa;

29

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               (c) references to the word “including” do not imply any
limitation;
               (d) the words “hereof”, “herein” and “hereunder” and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement;
               (e) all accounting terms not otherwise defined herein have the
meanings assigned thereto under Chilean GAAP; and
               (f) references to “US$” refer to U.S. dollars.
ARTICLE X
GENERAL PROVISIONS
          10.1 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given on if (a) delivered
personally, (b) mailed by certified or registered mail with postage prepaid,
(c) sent by next-day or overnight mail or delivery, or (d) sent by fax or
telegram, as follows:
               (a)      if to Purchaser or Parent,
Empresa Nacional de Electricidad S.A.
Fax: (562) 3784780
Attention: Rafael Mateo Alcalá
with a copy to:
Empresa Nacional de Electricidad S.A.
Fax: (562) 378 4780
Attention: Carlos Martín Vergara
               (b)      if to Seller or any Note Holder,
CMS International Ventures L.L.C.
One Energy Plaza
Jackson, MI 49201
Fax: 517-788-0121
Attention: General Counsel

30

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with a copy to:
CMS Energy
One Energy Plaza
Jackson, MI 49201
Fax: 517-788-0121
Attention: General Counsel
or, in each case, at such other address as may be specified in writing to the
other Parties.
     All such notices, requests, demands, waivers and other communications shall
be deemed to have been received, if by personal delivery, certified or
registered mail or next-day or overnight mail or delivery, on the day delivered
or, if by fax or telegram, on the next Business Day following the day on which
such fax or telegram was sent, provided that a copy is also sent by certified or
registered mail. For the purposes of this Section 10.1, notice to a Company
shall not constitute notice to Seller, and vice versa, and notice to a Note
Holder shall not constitute notice to any other Note Holder or to the Company,
and vice versa.
          10.2 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the Parties and their respective heirs, successors and permitted
assigns.
          10.3 Assignment; Successors; Third-Party Beneficiaries.
               (a) This Agreement is not assignable by any Party without the
prior written consent of all of the other Parties and any attempt to assign this
Agreement without such consent shall be void and of no effect.
               (b) This Agreement shall inure to the benefit of, and be binding
on and enforceable by and against, the successors and permitted assigns of the
respective Parties, whether or not so expressed.
               (c) This Agreement is intended for the benefit of the Parties
hereto and does not grant any rights to any third parties unless specifically
stated herein.
          10.4 Amendment; Waivers; etc. No amendment, modification or discharge
of this Agreement, and no waiver under this Agreement, shall be valid or binding
unless set forth in writing and duly executed by the Party against whom
enforcement of the amendment, modification, discharge or waiver is sought. Any
such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the Party
granting such waiver in any other respect or at any other time. The waiver by
any of the Parties of a breach of or a default under any of the provisions of
this Agreement, or any failure or delay to exercise any right or privilege under
this Agreement, shall not be construed as a waiver thereof or otherwise affect
any of such provisions, rights or privileges under this Agreement.

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          10.5 Entire Agreement.
               (a) This Agreement (including the Exhibits and the Seller
Disclosure Letter, the Note Holders Disclosure Letter and the Purchaser
Disclosure Letter referred to in or delivered under this Agreement) contains the
entire agreement between the parties relating to the subject matter of this
Agreement to the exclusion of any terms implied by Law which may be excluded by
contract and supersedes all prior agreements and understandings, both written
and oral, among the Parties with respect to their subject matters. Each Party
acknowledges that it has not been induced to enter this Agreement by and, in
agreeing to enter into this Agreement, it has not relied on, any representations
and warranties except as expressly stated or referred to in this Agreement.
               (b) The liability of a Party shall be limited or excluded as set
out in this Agreement if and to the extent such limitations or exclusions apply,
except for fraud.
          10.6 Severability. Any term or provision of this Agreement that is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction or other authority declares that any term or provision
hereof is invalid, void or unenforceable, the Parties agree that the court
making such determination, to the greatest extent legally permissible, shall
have the power to reduce the scope, duration, area or applicability of the term
or provision, to delete specific words or phrases, or to replace any invalid,
void or unenforceable term or provision with a term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision.
          10.7 Counterparts. This Agreement may be executed and delivered
(including via facsimile) in several counterparts, each of which shall be deemed
an original and all of which shall together constitute one and the same
instrument.
          10.8 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without giving effect to
any conflicts of law principles of such State.
          10.9 Arbitration. Any dispute, action, claim or controversy of any
kind related to, arising from or in connection with this Agreement or the
relationship of the parties under this Agreement (the “Dispute”) whether based
on contract, tort, common law, equity, statute, regulation, order or any other
source of law, shall be finally settled before the International Chamber of
Commerce (“ICC”) under the Rules of Arbitration (the “Rules”) of the ICC by
three (3) arbitrators designated by the Parties (the “Panel”). Seller, on the
one hand, and Purchaser, on the other hand, shall each designate one arbitrator
to serve on the Panel. The third arbitrator shall be designated by the two
arbitrators designated by such parties. If either party fails to designate an
arbitrator within thirty (30) days after the filing of the Dispute with the ICC,
such arbitrator shall be appointed in the manner prescribed by the Rules. An
arbitration proceeding hereunder shall be conducted in New York, New York, and
shall be conducted in the English language. The decision or award of the Panel
shall be in writing and shall be final and binding

32

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on the Parties. The Panel shall award the prevailing party all fees and expenses
incurred in connection with the arbitration, including, without limitation,
attorneys’ fees and costs, arbitration administrative fees charged by the ICC,
Panel member fees and costs, and any other costs associated with the arbitration
(the “Arbitration Expenses”); provided, however, that if the claims or defenses
are granted in part and rejected in part, the Panel shall proportionately
allocate between Seller or the Note Holders, as applicable, on the one hand, and
Purchaser, on the other hand, the Arbitration Expenses in accordance with the
outcomes. The Panel may only award damages as provided for under the terms of
this Agreement and in no event may punitive, consequential and/or special
damages be awarded. In the event of any conflict between the Rules and any
provision hereof, this Agreement shall govern.
          10.10 Limitation on Damages. No Party shall, under any circumstance,
have any liability to any other Party for any special, indirect, consequential
or punitive damages claimed by such other Party under the terms of or due to any
breach or non-performance of this Agreement, including lost profits, loss of
revenue or income, cost of capital, or loss of business reputation or
opportunity.
          10.11 Enforcement. The Parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not to be
performed in accordance with the terms hereof and that the Parties shall be
entitled to specific performance of the terms hereof in addition to any other
remedies at law or in equity.
          10.12 No Right of Set-Off. Purchaser, for itself and its successors
and permitted assigns, hereby unconditionally and irrevocably waives any rights
of set-off, netting, offset, recoupment, or similar rights that such Purchaser
or any of its successors and permitted assigns has or may have with respect to
the payment of the Purchase Price or any other payments to be made by Purchaser
pursuant to this Agreement or any other document or instrument delivered by
Purchaser in connection herewith.
          10.13 Several Liability. Purchaser hereby acknowledges and understands
that each of the representations, warranties, covenants and agreements of Seller
and each of the Note Holders are made severally but not jointly.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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     IN WITNESS WHEREOF, the Parties have executed this SECURITIES PURCHASE
AGREEMENT as of the date first above written.

            CMS INTERNATIONAL VENTURES, L.L.C.
      By:   /s/ Sharon A. Mcilnay         Name:   Sharon A. McIlnay       
Title:   Vice President and General Counsel        CMS CAPITAL, L.L.C.
      By:   /s/ James E. Brunner         Name:   James E. Brunner       
Title:   Senior Vice President and General Counsel        CMS GAS ARGENTINA
COMPANY
      By:   /s/ Sharon A. McIlnay         Name:   Sharon A. McIlnay       
Title:   Vice President and General Counsel        CMS ENTERPRISES COMPANY
      By:   /s/ Sharon A. McIlnay         Name:   Sharon A. McIlnay       
Title:   Vice President and General Counsel   

S-1

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            PACIFIC ENERGY LLC
      By:   /s/ Carlos Martín Vergara         Name:   Carlos Martín Vergara     
  Title:                 By:   /s/ Manuel José Irarrázaval Aldunate        
Name:   Manuel José Irarrázaval Aldunate        Title:           EMPRESA
NACIONAL DE ELECTRICIDAD S.A.
      By:   /s/ Carlos Martín Vergara         Name:   Carlos Martín Vergara     
  Title:                 By:   /s/ Manuel José Irarrázaval Aldunate        
Name:   Manuel José Irarrázaval Aldunate         Title:      

S-2

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EXHIBIT A to
SECURITIES PURCHASE AGREEMENT
SELLER DISCLOSURE LETTER
to
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL, L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
PACIFIC ENERGY LLC.
and
EMPRESA NACIONAL DE ELECTRICIDAD S.A.
Dated as of July 11, 2007

 

--------------------------------------------------------------------------------

 

SELLER DISCLOSURE LETTER
to
STOCK PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL, L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
PACIFIC ENERGY LLC.
and
EMPRESA NACIONAL DE ELECTRICIDAD S.A.
Dated as of July 11, 2007
     This Seller Disclosure Letter is being furnished by CMS International
Ventures, L.L.C., a limited liability company organized and existing under the
laws of the State of Michigan (“Seller”), to Pacific Energy LLC., a limited
liability company organized and existing under the laws of the State of Delaware
(“Purchaser”) and to Empresa Nacional de Electricidad S.A., a company organized
and existing under the laws of Chile (“Parent”) in connection with the
Securities Purchase Agreement dated as of July 11, 2007 (hereinafter also
referred to as this “Agreement”) by and among Seller, CMS Capital, L.L.C., a
limited liability company organized and existing under the laws of the State of
Michigan (“CMS-Capital”), CMS Gas Argentina Company, a company incorporated and
existing under the laws of the Cayman Islands (“CMS-Cayman”), and, CMS
Enterprises Company, a corporation organized and existing under the laws of the
State of Michigan (“CMS-Enterprises”; each of the Seller, CMS-Capital,
CMS-Cayman, and CMS-Enterprises is also referred to herein as a “Note Holder”
and, collectively, the “Note Holders”), Purchaser and Parent. Unless the context
otherwise requires, all capitalized terms used in this Seller Disclosure Letter
shall have the respective meanings assigned to them in the Agreement.

1

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     The contents of this Seller Disclosure Letter are qualified in their
entirety by reference to the specific provisions of the Agreement, and are not
intended to constitute, and shall not be construed as constituting,
representations or warranties of Seller, except as and to the extent provided in
the Agreement.
     Nothing in this Seller Disclosure Letter shall constitute an admission that
any information disclosed, set forth or incorporated by reference in this Seller
Disclosure Letter, either individually or in the aggregate, is material, or
would result in a Seller Material Adverse Effect. No disclosure made in this
Seller Disclosure Letter (i) shall be deemed to modify in any respect the
standard of materiality or any other standard for disclosure set forth in the
Agreement or (ii) relating to any possible breach or violation of any agreement,
contract, Law or Governmental Order shall be construed as an admission or
indication that any such breach or violation exists or has actually occurred.
     Notwithstanding anything to the contrary contained in this Seller
Disclosure Letter or in the Agreement, the information and disclosures contained
in each schedule hereto shall be deemed to be disclosed and incorporated by
reference in each of the other schedules hereto as though fully set forth in
such other schedules. Purchaser has informed Seller that there are no documents
(or copies of such documents) referred to in this letter as having been
disclosed which the Purchaser would like to see and which have not been supplied
or made available to it. There are no matters referred to in this letter in
respect of which Purchaser require further details.
     Headings have been inserted herein for convenience of reference only and
shall to no extent have the effect of amending or changing the express
description of this Seller Disclosure Letter as contemplated by the Agreement or
the express description of the Sections of the Agreement.
     This Seller Disclosure Letter shall be deemed to include, and there are
incorporated into it by way of disclosure, all information disclosed in the
files and working papers of Seller, CMS-Inversiones and the Companies
Subsidiaries made available to Purchaser in the virtual data room on Intralinks
under “Project Beta” as of July 10, 2007.

2

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Schedule 2.1.2
Shares

          Seller   Company   No. of Shares
CMS International Ventures, L.L.C.
  CMS Gas Transmission Del Sur Company   100
 
 
CMS International Ventures, L.L.C.
  CMS Generation Investment Company V   100

3

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Schedule 2.1.3(d)
Approvals
1. Antitrust filings that may be required under Chilean Antitrust Laws due to
the participation of the Purchaser in the Chilean energy market.
2. Antitrust approval in accordance with Argentine antitrust law.
3. ENARGAS approval in accordance with Argentine gas law.

4

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Schedule 3.1.1
Title and Capitalization

                                                                             
Issued and                                                     outstanding      
                                      Jurisdiction of       Equity      
Subscribed   Paid   Paid in Capital   Validly   Good   Last Name of Company  
Incorporation   Equity Interest   Interest   Owners of Equity Interest  
Shares/Rights   Shares/Rights   (CLP)   Incorporated   Standing  
Capitalization*
Compañía de
  Chile   Derechos Sociales   100%   CMS Gas Transmission del Sur     99 %    
99 %     50,338,783,883     Yes, 06.03.97     05.29.07       10.27.00  
Inversiones CMS
      (Equity Rights)       Company     1 %     1 %     508,472,564            
             
Energy Chile Ltda.
              CMS Generation Investment                                        
       
 
              Company V                                                
Inversiones Gas
  Chile   Derechos Sociales   100%   Inversiones Endesa Norte S.A.     50 %    
50 %     80,356,939,627     Yes, 10.01.03     04.19.07       02.26.04  
Atacama Holding Ltda.
      (Equity Rights)                                                        
 
              Compañia de Inversiones CMS     36.07 %     36.07 %    
57,967,438,723                          
 
              Energy Chile Ltda.                                                
 
              CMS Gas Transmisión del Sur     13.93 %     13.93 %    
22,389,500,904                          
 
              Company                                                
GasAtacama S.A.
  Chile   Ordinary Shares   100,000,000   Inversiones Gas Atacama Holding    
99,997,706       99,997,706       160,709,613,426     Yes, 06.13.97     04.17.07
      12.24.03  
 
          ordinary shares   Ltda                                                
 
              Compañia de Inversiones CMS     1,147       1,147       1,843,382
                         
 
              Energy Chile Ltda.                                                
 
              Empresa Nacional de     1,147       1,147       1,843,382        
                 
 
              Electricidad S.A.                                                
GasAtacama Generación
  Chile   Ordinary Shares   10,000   Inversiones Endesa Norte S.A.     5       5
      42,502,774     Yes, 12.19.96     04.17.07       12.17.03  
S.A.
          ordinary shares                                                    
 
              Compañia de Inversiones CMS     5       5       42,502,774        
                 
 
              Energy Chile Ltda.                                                
 
              GasAtacama S.A.     9,990       9,990       84,920,542,386        
                 
Gasoducto Atacama
  Chile   Ordinary Shares   10,000   Inversiones Endesa Norte S.A.     5       5
      22,544,680     Yes, 08.21.96     04.18.07       12.17.03  
Chile S.A.
          ordinary shares                                                    
 
              Compañia de Inversiones CMS     5       5       22,544,680        
                 
 
              Energy Chile Ltda.                                                
 
              GasAtacama S.A.     9,990       9,990       45,044,271,486        
                 
Gasoducto Atacama
  Chile   Ordinary Shares   10,000 ordinary   Inversiones Endesa Norte S.A.    
5       5       37,099,663     Yes, 02.27.97     04.17.07       12.17.03  
Argentina S.A.
          shares                                                    
 
              Compañia de Inversiones CMS     5       5       37,099,663        
                 
 
              Energy Chile Ltda.                                                
 
              GasAtacama S.A.     9,990       9,990       74,125,126,157        
                 
Gasoducto Tal Tal S.A.
  Chile   Ordinary Shares   100,000,000   Gasoducto Atacama Chile S.A.    
99,877,365       99,877,365       13,819,021,726     Yes, 08.20.97     04.17.07
      02.26.04  
 
          ordinary shares                                                    
 
              Gasoducto Atacama Argentina S.A.     122,635       122,635      
16,967,766                          
Progas S.A.
  Chile   Ordinary Shares   1,000,000 ordinary   Gasoducto Atacama Chile S.A.  
  999,000       999,000       999,000     Yes, 08.30.99     04.16.07      
08.30.99  
 
          shares                                                    
 
              GasAtacama Generación S.A     1,000       1,000       1,000      
                   
Gasoducto Atacama
  Argentina   N/A   N/A   Gasoducto Atacama Argentina S.A.     N/A       N/A    
  N/A       N/A       N/A       N/A  
Argentina S.A. (Argentinean Branch)
                                                               
Atacama Finance Co.
  Cayman Islands   Ordinary Shares   6,293,700   Inversiones GasAtacama Holding
    6,500,000       6,300,000     US$ 6,300,000     Yes, 06.24.98     04.20.07  
    N/A  
 
          (99.9%)   Limitada   (authorized)                                    
   
 
          6,300 (0.1%)   GasAtacama S.A.                                        
       
Energex Co.
  Cayman Islands   Ordinary Shares   100%   Gasoducto Atacama Chile S.A.  
50,000
(authorized)     10,000     US$ 10,000     Yes, 10.01.97     04.05.07       N/A
 

 

*   According to Chilean Laws, the paid-in capital of all Chilean Corporations
(S.A.s) is automatically restated and adjusted at the end of each fiscal year
(December 31) so as to reflect the variation of Chilean inflation. All capital
figures are in Chilean Pesos (CLP) as of the date of the last capitalization.

5

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Schedule 3.3
Tax Matters
None.

6

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Schedule 3.4
Compliance with Laws
None.

7

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Schedule 3.5
Certain Contracts
1. Natural gas transport service agreement (Contrato de servicio de transporte
de gas natural en base firme integrados), between ENDESA and Gasoducto Atacama
Chile Ltda., predeccessor in interest to Gasoducto Atacama Chile S.A., dated
September 6, 2002 (T1).
2. Natural gas transport service agreement (Contratos de servicio de transporte
de gas natural en base firme integrados), between ENDESA and Gasoducto Atacama
Chile Ltda., predeccessor in interest to Gasoducto Atacama Chile S.A., dated
September 6, 2002 (T2).
(collectively, the “Taltal Gas Transportation Agreements”)

8

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EXHIBIT B to
SECURITIES PURCHASE AGREEMENT
NOTE HOLDERS DISCLOSURE LETTER
to
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL, L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
PACIFIC ENERGY LLC.
and
together with
EMPRESA NACIONAL DE ELECTRICIDAD S.A.
Dated as of July 11, 2007

 

--------------------------------------------------------------------------------

 

NOTE HOLDERS DISCLOSURE LETTER
to
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
PACIFIC ENERGY LLC.
and
together with
EMPRESA NACIONAL DE ELECTRICIDAD S.A.
Dated as of July 11, 2007
     This Note Holders Disclosure Letter is being furnished by CMS International
Ventures, L.L.C., a limited liability company organized and existing under the
laws of the State of Michigan (“Seller”), to Pacific Energy LLC., a limited
liability company organized and existing under the laws of the State of Delaware
(“Purchaser”) and to Empresa Nacional de Electricidad S.A., a company organized
and existing under the laws of Chile (“Parent”), in connection with

1

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the Securities Purchase Agreement dated as of July 11, 2007 (hereinafter also
referred to as this “Agreement”) by and among Seller, CMS Capital, L.L.C., a
limited liability company organized and existing under the laws of the State of
Michigan (“CMS-Capital”), CMS Gas Argentina Company, a company incorporated and
existing under the laws of the Cayman Islands (“CMS-Cayman”), and, CMS
Enterprises Company, a corporation organized and existing under the laws of the
State of Michigan (“CMS-Enterprises”; each of the Seller, CMS-Capital,
CMS-Cayman, and CMS-Enterprises is also referred to herein as a “Note Holder”
and, collectively, the “Note Holders”), Purchaser and Parent. Unless the context
otherwise requires, all capitalized terms used in this Note Holders Disclosure
Letter shall have the respective meanings assigned to them in the Agreement.
     The contents of this Note Holders Disclosure Letter are qualified in their
entirety by reference to the specific provisions of the Agreement, and are not
intended to constitute, and shall not be construed as constituting,
representations or warranties of Seller or the Note Holder, except as and to the
extent provided in the Agreement.
     Nothing in this Note Holders Disclosure Letter shall constitute an
admission that any information disclosed, set forth or incorporated by reference
in this Note Holders Disclosure Letter, either individually or in the aggregate,
is material, or would result in a Seller Material Adverse Effect. No disclosure
made in this Note Holders Disclosure Letter (i) shall be deemed to modify in any
respect the standard of materiality or any other standard for disclosure set
forth in the Agreement or (ii) relating to any possible breach or violation of
any agreement, contract, Law or Governmental Order shall be construed as an
admission or indication that any such breach or violation exists or has actually
occurred.
     Notwithstanding anything to the contrary contained in this Note Holders
Disclosure Letter or in the Agreement, the information and disclosures contained
in the schedule hereto shall be deemed to be disclosed and incorporated by
reference in each of the other schedules hereto as though fully set forth in
such other schedules. Purchaser has informed the Note Holders that there are no
documents (or copies of such documents) referred to in this letter as having
been disclosed which the Purchaser would like to see and which have not been
supplied or made available to it. There are no matters referred to in this
letter in respect of which Purchaser require further details.
     Headings have been inserted herein for convenience of reference only and
shall to no extent have the effect of amending or changing the express
description of this Note Holders Disclosure Letter as contemplated by the
Agreement or the express description of the Sections of the Agreement.
     This Seller Disclosure Letter shall be deemed to include, and there are
incorporated into it by way of disclosure, all information disclosed in the
files and working papers of the Note Holders, CMS-Inversiones and the Companies
Subsidiaries made available to Purchaser in the virtual data room on Intralinks
under “Project Beta” as of July 10, 2007.

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Schedule 2.2.2
Title to Notes

          Noteholder   Principal Amount
CMS International Ventures, L.L.C.
  US $ 54,065,594.49  
CMS Capital, L.L.C.
  US $ 87,372,676.23  
CMS Gas Argentina Company
  US $ 7,734,040.24  
CMS Enterprises Company
  US $ 26,099,868.00  

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SCHEDULES TO
SECURITIES PURCHASE AGREEMENT

 

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Schedule 5.9
Resignations of Certain Officers and Directors
CMS GAS TRANSMISSION DEL SUR COMPANY
Directors
Thomas Elward
David W. Joos
Officers
Thomas Elward — President
David W. Joos — Chairman of the Board/Chief Executive Officer
John M. Butler — Senior Vice President
James E. Brunner — Senior Vice President
Carlos A. Isles — Controller/Vice President
Catherine M. Reynolds — Vice President/Secretary
Sharon M. McIlnay — Vice President/General Counsel
Thomas L. Miller — Vice President
Laura L. Mountcastle — Treasurer/Vice President
Joseph P. Tomasik — Vice President
Theodore J. Vogel — Vice President/Chief Tax Counsel
Jane M. Kramer — Assistant Secretary
Beverly S. Burger — Assistant Treasurer
James L. Loewen — Assistant Treasurer
Joyce Norkey — Assistant Secretary

 

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CMS GENERATION INVESTMENT COMPANY V
Directors
Thomas Elward
David W. Joos
Thomas J. Webb
Officers
Thomas Elward — President/Chief Executive Officer
David W. Joos — Chairman of the Board
John M. Butler — Senior Vice President
James E. Brunner — Senior Vice President
Carlos A. Isles — Controller/Vice President
Catherine M. Reynolds — Vice President/Secretary
Sharon M. McIlnay — Vice President/General Counsel
Thomas L. Miller — Vice President
Daniel B. Dexter — Vice President
Daniel E. Nally — Vice President
Laura L. Mountcastle — Treasurer/Vice President
Joseph P. Tomasik — Vice President
Michael C. Sniegowski — Vice President
Theodore J. Vogel — Vice President/Chief Tax Counsel
Jane M. Kramer — Assistant Secretary
Beverly S. Burger — Assistant Treasurer
James L. Loewen — Assistant Treasurer
Joyce Norkey — Assistant Secretary
INVERSIONES GASATACAMA HOLDING LIMITADA

      Directors    
 
  Regular   Alternate
 
   
Tom Miller
Francisco Mezzadri
  David Keyhoe
David Baughman

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GASATACAMA S.A.

      Directors    
 
  Regular   Alternate
 
   
Tom Miller
David Baughman
  Thomas Elward
Sharon McIlnay

GASATACAMA GENERACION S.A.
Directors

      Regular   Alternate
 
   
David Baughman
Tom Miller
  Sharon Mcllnay
Thomas Elward

GASODUCTO ATACAMA CHILE S.A.
Directors

      Regular   Alternate
 
   
David Baughman
Tom Miller
  Sharon Mcllnay
Thomas Elward

GASODUCTO ATACAMA ARGENTINA S.A.
Directors

      Regular   Alternate
 
   
David Baughman
Tom Miller
  Sharon Mcllnay
Thomas Elward

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ATACAMA FINANCE CO.
Directors
David Baughman
Tom Miller
ENERGEX CO.
Directors
David Baughman
Tom Miller

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Schedule 5.10
Releases of Certain Guarantees
Performance Guarantee Agreement, dated March 13, 2000, made by CMS Enterprises
Company in favor of YPF SOCIEDAD ANONIMA.

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Schedule 9.2
Definitions
“Knowledge of Seller”

1.   Thomas L. Miller, Vice President of Seller   2.   David Baughman, Executive
Director Financial Advisory Services and Strategic Planning — CMS Enterprises
Company

“Knowledge of Purchaser”

1.   Manuel José Irarrázabal Aldunate, Chief Financial Officer of Parent

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