EXHIBIT 10(q)
AMENDED AND RESTATED
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
AEI CHILE HOLDINGS LTD.
together with
ASHMORE ENERGY INTERNATIONAL
(for purposes of the Parent Guarantee)
Dated as of June 1, 2007

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              ARTICLE I

 
            SALE AND PURCHASE OF SHARES AND NOTES

 
        1.1   Sale and Purchase of Shares 1.2   [Intentionally Omitted.] 1.3  
Sale and Purchase of Notes 1.4   Purchase Price 1.5   Closing 1.6   Closing
Deliveries 1.7   Purchase Agreement Fee
 
            ARTICLE II

 
            REPRESENTATIONS AND WARRANTIES OF SELLER AND NOTE HOLDERS

 
        2.1   Representations and Warranties of Seller
 
       
 
  2.1.1   Organization and Qualification
 
  2.1.2   Title to Shares
 
  2.1.3   Authority; Non-Contravention; Approvals.
 
  2.1.4   Organization and Qualification of Companies and CMS-Inversiones;
Capitalization.
 
  2.1.5   Brokers and Finders
 
  2.1.6   Financial Distress of Companies Subsidiaries
 
  2.1.7   No Other Representations and Warranties.
 
        2.2   Representations and Warranties of the Note Holders
 
       
 
  2.2.1   Organization and Qualification
 
  2.2.2   Title to Notes
 
  2.2.3   Authority; Non-Contravention; Approvals.
 
  2.2.4   Brokers and Finders
 
  2.2.5   Financial Distress of Companies Subsidiaries
 
  2.2.6   No Other Representations and Warranties.
 
            ARTICLE III

 
            REPRESENTATIONS AND WARRANTIES OF SELLER WITH RESPECT TO THE
COMPANIES SUBSIDIARIES

 
        3.1   Capitalization and Title. 3.2   3.1.1 Description 3.3   3.1.2 No
Consents to Liens 3.4   Financial Statements 3.5   Tax Matters 3.6   Compliance
with Laws 3.7   Certain Contracts 3.8   Operating Company Notes     Financial
Distress of Companies Subsidiaries     No Other Representations and Warranties
 
            ARTICLE IV

 
            REPRESENTATIONS AND WARRANTIES OF PURCHASER

 
        4.1   Organization and Qualification 4.2   Authority; Non-Contravention;
Approvals. 4.3   Financing 4.4   Investment Intention; Sufficient Investment
Experience; Independent Investigation; Financial Distress of Companies
Subsidiaries. 4.5   Brokers and Finders 4.6   No Knowledge of Seller or Note
Holders Breach

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              ARTICLE V

 
            COVENANTS

 
        5.1   Notification to the CNDC and ENARGAS; Negative Antitrust and
ENARGAS Decision; Transfer of Shares to a Third Purchaser. 5.2   Access 5.3  
Publicity 5.4   Fees and Expenses. 5.5   Right of First Offer 5.6   Further
Assurances 5.7   Preservation of Records 5.8   Change of Name. 5.9  
Resignations of Certain Officers and Directors 5.10   Releases of Certain
Guarantees 5.11   Share Transfer
 
            ARTICLE VI

 
            CONDITIONS TO CLOSING

 
        6.1   Conditions to the Obligations of the Parties 6.2   Conditions to
the Obligation of Purchaser 6.3   Conditions to the Obligation of Seller
 
            ARTICLE VII

 
            TERMINATION

 
        7.1   Termination 7.2   Effect of Termination
 
            ARTICLE VIII

 
            LIMITS OF LIABILITY; PARENT GUARANTEE

 
        8.1   Non-Survival of Representations, Warranties, Covenants and
Agreements. 8.2   Parent Guarantee.
 
            ARTICLE IX

 
            DEFINITIONS AND INTERPRETATION

 
        9.1   Defined Terms 9.2   Definitions 9.3   Interpretation
 
            ARTICLE X

 
            GENERAL PROVISIONS

 
        10.1   Notices

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          10.2   Binding Effect 10.3   Assignment; Successors; Third-Party
Beneficiaries. 10.4   Amendment; Waivers; etc 10.5   Entire Agreement. 10.6  
Severability 10.7   Counterparts 10.8   Governing Law 10.9   Arbitration 10.10  
Limitation on Damages 10.11   Enforcement 10.12   No Right of Set-Off 10.13  
Several Liability

     
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(c)
  Seller Required Approvals
 
   
Schedule 2.1.3(d)
  Other Approvals
 
   
Schedule 2.1.4(c)
  Agreements in Connection with Shares
 
   
Schedule 3.1.1
  Title and Capitalization
 
   
Schedule 3.1.2
  Consents to Liens on Equity Interests of Companies Subsidiaries
 
   
Schedule 3.3
  Tax Matters
 
   
Schedule 3.4
  Compliance with Laws
 
   
Schedule 3.5
  Certain Contracts
 
   
Note Holders Disclosure Letter
   
 
   
Schedule 2.2.2
  Title to Notes
 
   
Schedule 2.2.3(c)
  Note Holder Required Approvals

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      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

AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
     This AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (as so amended and
restated, hereinafter also referred to as this “Agreement”), dated as of June 1,
2007, 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) AEI Chile Holdings Ltd., an exempted company
incorporated with limited liability under the laws of the Cayman Islands
(“Purchaser”) and (iv) Ashmore Energy International, an exempted company
incorporated with limited liability under the laws of the Cayman Islands
(“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. (This Agreement shall be effective as of the date the board of
directors of CMS Energy Corporation approves this Agreement as contemplated by
Section 10.2 (the “Effective Date”)).
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”);

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     WHEREAS CMS-Cayman currently owns 1% of the Equity Interests of
CMS-Inversiones;
     WHEREAS CMS-Cayman shall transfer its Equity Interest in CMS-Inversiones to
CMS-Generation prior to the Closing Date;
     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.;
     WHEREAS Governing Company owns 100% of the Equity Interests in Atacama
Finance Co.;
     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”);
     WHEREAS the Parties have entered into a Securities Purchase Agreement dated
May 31, 2007 under which Purchaser agreed to purchase from Seller, and Seller
agreed to sell to Purchaser, all of Seller’s Shares, and Purchaser agreed to
purchase from the Note Holders, and the Note Holders agreed to sell to
Purchaser, all of the Notes, all of the foregoing upon the terms and subject to
the conditions set forth in such agreement (the “Prior Agreement”); and
     WHEREAS the Parties desire to amend and restate the Prior Agreement in
accordance with the terms hereof;
     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 to amend and restate the Prior
Agreement as follows:

 

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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). 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, as soon as
practicable, but in any event not later than the second (2nd) Business Day
immediately following the date on which the last of the conditions contained in
Article VI is 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), 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 amounts 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.

 

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               (c) Each Note Holder, as applicable, shall deliver to Purchaser
its respective Note, duly endorsed “Without Recourse” (or accompanied by an
instrument duly endorsed “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) Purchaser and CMS-Enterprises shall execute and deliver to
each other an instrument pursuant to which CMS-Enterprises transfers all of
CMS-Enterprises’ rights and obligations under the Consortium Agreement, and
Purchaser accepts such transfer.
               (f) Each Party shall deliver the certificates, agreements,
instruments and other documents required to be delivered by it pursuant to
Article VI.
          1.7 Purchase Agreement Fee. Within two (2) Business Days of receipt of
written notice that the board of directors of CMS Energy Corporation has
approved this Agreement, and in consideration of the time expended and expense
incurred by Seller and the Note Holders in negotiating and executing this
Agreement, Purchaser shall pay to Seller Fifteen Million Dollars (US$15,000,000)
in cash (the aggregate of such amount, plus any interest deemed earned thereon
at the Specified Rate from (and including) the date hereof to (but excluding)
the Closing Date or date of earlier termination of this Agreement, being
referred to as the “Purchase Agreement Fee”), by wire transfer of immediately
available funds in United States dollars to the bank account or accounts that
have been designated by Seller. 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 Purchaser, 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 Purchaser. The Purchase Agreement Fee
shall be credited against (x) the Purchase Price payable at Closing to Seller or
any Affiliate designated by Seller or (y) if this Agreement is terminated (other
than pursuant to Section 7.1(a)), 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.

 

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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 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, subject to receipt of the Seller
Required Approvals, 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,

 

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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, subject to obtaining the Seller
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 (i) set forth
in Schedule 2.1.3(c) of the Seller Disclosure Letter (the “Seller Required
Approvals”) and (ii) 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 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 (i) set forth in Schedule 2.1.4(c) of the Seller
Disclosure Letter and (ii) 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.

 

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               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 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.

 

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               (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 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 (i) set forth
in Schedule 2.2.3(c) of the Note Holders Disclosure Letter (the “Note Holder
Required Approvals”) and (ii) 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

 

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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.
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, except as set forth in Schedule 3.1.2 of the
Company Disclosure Letter.
          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);

 

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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, 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

 

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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.
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 an exempt company
with limited liability, duly formed, validly existing and in good standing under
the laws of Cayman Islands. 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 corporation 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

 

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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 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 has been given adequate opportunity to examine all documents provided
by, conduct due diligence and ask questions of, and to receive answers from,
Seller, the Companies, the Companies Subsidiaries, the Note Holders and their
respective representatives concerning the Companies, the Companies Subsidiaries,
the Notes and Purchaser’s 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, 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,
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 it is deemed to have reviewed
and have knowledge of the information made available in the data room, through
management meetings 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

 

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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 Transactions pursuant to the
Agreement. Purchaser further agrees that prior to the Closing, to the extent
that Seller or its 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, except Credit Suisse Securities (USA), LLC,
whose fees and expenses will be paid by Purchaser in accordance with such
party’s agreement with such firm.
          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.
Within 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.

 

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          (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, 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

 

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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.
          (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
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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 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

 

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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 Note Holders Required Approvals, Seller Required
Approvals and Argentine Transaction Approvals (other than the Parties’ legal
fees and expenses which are the subject of paragraph (a) above).
          5.5 Right of First Offer. Promptly after this Agreement is approved by
the board of directors of CMS Energy Corporation (but in no event later than the
second Business Day after receipt thereof), Seller shall deliver to Endesa the
right of first offer notice in accordance with the Consortium Agreement.
Purchaser shall cooperate promptly with any requests of Seller or Endesa with
respect to this Agreement and the transactions contemplated hereby.
          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

 

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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 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 Share Transfer. Seller shall cause CMS-Cayman to transfer its 1%
ownership interest in CMS-Inversiones to CMS-Generation prior to the Closing
Date.

 

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ARTICLE VI
CONDITIONS TO CLOSING
          6.1 Conditions to the Obligations of the Parties. 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 conditions
precedent:
               (a) No Injunction. Except for the Antitrust Approval and the
ENERGAS 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.
               (b) Right of First Offer. Seller shall have received a waiver
from Endesa of the right of first offer set forth in the Consortium Agreement,
or the waiting period with respect to the right of first offer thereunder shall
have expired without exercise of such right by Endesa.
          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.

 

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               (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 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) Acceptance of the Consortium Agreement. Seller shall have
received from the Purchaser a written agreement pursuant to which the Purchaser
accepts the terms and conditions of the Consortium Agreement, consistent with
the requirements of the Consortium Agreement.
               (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.

 

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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, by written notice to Seller, if the Closing
Date shall not have occurred on or before such date that is sixty (60) days
following the date hereof (the “Outside Date”) provided, that the right to
terminate this Agreement under this Section 7.1(c) shall not be available to
Purchaser if its failure to fulfill any obligation under this Agreement shall
have caused or resulted in the failure of the Closing Date to occur on or before
such Extended Outside Date;
               (d) by Seller, by written notice to Purchaser, if the Closing
Date shall not have occurred on or before the Outside Date 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;
               (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

 

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that it be remedied or Seller shall not have received adequate assurance of a
cure of such breach within such thirty-day period; or
               (g) in the event that Endesa exercises its right of first offer
under the Consortium Agreement, upon the effectiveness of such exercise.
          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 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 obligations under the Confidentiality Agreement.
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;

 

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               (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 (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

 

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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 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

 

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      Defined Term   Section Reference
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
Dispute
  Section 10.9
Governing Company
  Recitals
Guarantees
  Section 5.10
Holding Company
  Recitals
ICC
  Section 10.9
Note/Notes
  Recitals
Note Holders Disclosure Letter
  Section 2.2
Note Holder Required Approvals
  Section 2.2.3(c)
Note Holders
  Preamble
Notes Transaction
  Section 1.3
Operating Company Notes
  Section 3.6
Outside Date
  Section 7.1(c)
Panel
  Section 10.9

 

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      Defined Term   Section Reference
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 Required Approvals
  Section 2.1.3(c)
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

 

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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 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.
     “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.

 

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     “Confidentiality Agreement” means the Confidentiality Agreement, dated
February 22, 2007, between AEI Global Services Ltd., an Affiliate of Purchaser,
and J.P. Morgan Securities Inc., on behalf of an Affiliate of Seller.
     “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 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.
     “Endesa” means Empresa Nacional de Electricidad S.A., a corporation
organized and existing under the laws of the Republic of Chile.
     “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.

 

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     “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 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.).

 

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     “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.
     “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.

 

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          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;
               (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,
AEI Chile Holdings Ltd.
1221 Lamar, Suite 800
Houston TX 77010
Fax: 713.345.5352
Attention: Miguel Mendoza
with a copy to:
Ashmore Energy International
1221 Lamar, Suite 800
Houston TX 77010
Fax: 713.345.5352
Attention: General Counsel
(b) if to Seller or any Note Holder,
CMS International Ventures L.L.C.

 

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One Energy Plaza
Jackson, MI 49201
Fax: 517-788-0121
Attention: General Counsel
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.
               (a) This Agreement amends, restates and supersedes the Prior
Agreement in its entirety
               (b) This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective heirs, successors and permitted assigns;
provided, however, that notwithstanding any other provision contained in this
Agreement to the contrary (other than this proviso), the Parties acknowledge and
agree that this Agreement shall be binding, in full force and effect, and
enforceable against any Party and its respective heirs, successors and permitted
assigns only on the condition that the execution and delivery of this Agreement
by Sellers and the Note Holders, and the performance of their respective
obligations hereunder, have been approved by the board of directors of CMS
Energy Corporation, and if such approval by the board of directors of CMS Energy
Corporation has not occurred on or before June 4, 2007, this Agreement shall be
null and void and be of no further force or effect to and enforceable whatsoever
against any Party hereto.
          10.3 Assignment; Successors; Third-Party Beneficiaries.

 

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               (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.
          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) and the
Confidentiality 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.

 

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          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 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

 

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

          CMS INTERNATIONAL VENTURES, L.L.C.
      By:  /s/ Thomas L. Miller         Name:  Thomas L. Miller        Title: 
Vice President        CMS CAPITAL, L.L.C.
      By:  /s/ Thomas J. Webb         Name:  Thomas J. Webb        Title: 
President and Chief Executive Officer        CMS GAS ARGENTINA COMPANY
      By:  /s/ Thomas L. Miller         Name:  Thomas L. Miller        Title: 
Vice President        CMS ENTERPRISES COMPANY
      By:  /s/ Thomas J. Webb         Name:  Thomas J. Webb        Title: 
Executive Vice President and Chief Financial Officer        AEI HOLDINGS CHILE,
INC.
      By:  /s/ Miguel A. Mendoza         Name:  Miguel A. Mendoza        Title: 
Authorized Representative        ASHMORE ENERGY INTERNATIONAL
      By:  /s/ Miguel A. Mendoza         Name:  Miguel A. Mendoza        
Title:  Authorized Representative                  ASHMORE ENERGY INTERNATIONAL
      By:  /s/ Miguel A. Mendoza       Name:  Miguel A. Mendoza      Title: 
Authorized Representative     

 

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

 

EXHIBIT A to
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
SELLER DISCLOSURE LETTER
to
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
AEI CHILE HOLDINGS LTD.
And
ASHMORE ENERGY INTERNATIONAL
Dated as of June 1, 2007

 

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SELLER DISCLOSURE LETTER
To
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
AEI CHILE HOLDINGS LTD.
And
ASHMORE ENERGY INTERNATIONAL
Dated as of June 1, 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 AEI Chile Holdings Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands (“Purchaser”) in connection with the Amended and Restated
Securities Purchase Agreement dated as of June 1, 2007 (as so amended and
restated, 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”) and Purchaser. 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.
     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.

 

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     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 Sellers 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 Sellers, CMS-Inversiones and the Companies
Subsidiaries made available to Purchaser in the virtual data room on Intralinks
under “Project Beta” as of May 31, 2007.
Schedule 2.1.2
Shares

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

Schedule 2.1.3(c)
Approvals
1. ENDESA ROFO right.
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.

 

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2. Antitrust approval in accordance with Argentine antitrust law.
3. ENARGAS approval in accordance with Argentine gas law.
Schedule 2.1.4(c)
Companies Organization and Qualification; Capitalization
None.

 

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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 *
 
                                           
Compania de Inversiones
  Chile   Derechos Sociales
(Equity Rights)   99%   CMS Gas Transmission del Sur Company   (to be confirmed)
    (to be confirmed)     (to be confirmed)   Yes, 06.03.97   (to be confirmed)
  (to be confirmed)
 
          1%   CMS Generation Investment Company V **                          
 
Inversiones Gas Atacama Holding Ltda.
  Chile   Derechos Sociales
(Equity Rights)   100%   Inversiones Endesa Norte S.A.   50 %   50 %  
80,356,939,627   Yes, 10.01.03   04.19.07   01.26.04
 
              Compania de Inversiones CMS   36.07 %   36.07 %   57,967,438,723  
         
 
              Energy Chile Ltda.                            
 
              CMS Gas Transmission del Sur Company   13.93 %   13.93 %  
22,389,500,904            
Gas Atacama S.A.
  Chile   Ordinary Shares   100,000,000 ordinary Shares   Inversiones Gas
Atacama Holding Ltda   99,997,706     99,997,706     160,709,613,426   Yes,
06.13.97   04.17.07   12.24.03
 
              Compania de Inversiones CMS   1,147     1,147     1,843,382      
     
 
              Energy Chile Ltda.                            
 
              Empresa Nacional de Electricidad S.A.   1,147     1,147    
1,843,382            
Gas Atacama Generacion
  Chile   Ordinary Shares   10,000 ordinary shares   Inversiones Endesa Norte
S.A.   5     5     42,502,774   Yes, 12.19.96   04.17.07   12.17.03
 
              Compania de Inversiones CMS   5     5     42,502,774            
 
              Energy Chile Ltda.                            
 
              Gas Atacama S.A.   9,990     9,990     84,920,542,386            
Gasoducto Atacama Chile
  Chile   Ordinary Shares   10,000 ordinary shares   Inversiones Endesa Norte
S.A.   5     5     22,544,680   Yes, 08.21.96   04.18.17   12.17.03
 
              Compania de Inversiones CMS   5     5     22,544,680            
 
              Energy Chile Ltda.                            
 
              GasAtacama S.A.   9,990     9,990     45,044,271,486            
Gasoducto Atacama Argentina S.A.
  Chile   Ordinary Shares   10,000 ordinary shares   Inversiones Endesa Norte
S.A.   5     5     37,099,663   Yes, 02.27.97   04.17.07   12.17.03
 
              Compania 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 ordinary shares   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
 
              Gasoducto Atacama Argentina S.A.   122,635     122,635    
16,967,766            
Progas S.A.
  Chile   Ordinary Shares   1,000,000 ordinary shares   Gasoducto Atacama Chile
S.A.   999,000     999,000     999,000   Yes, 08.30.99   04.16.07   08.30.99
 
              GasAtacama Generacion S.A.   1,000     1,000     1,000            
Gasducto Atacama Argentina S.A. (Argentinean Branch)
  Argentina   N/A   N/A   Gasoducto Atacama Argentina S.A.   N/A     N/A     N/A
  N/A   N/A   N/A

 

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                                                      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 *
 
                                       
Atalama Finance Co. [to be Provided]
      [to be provided]   100%   Inversiones Gas Atacama Holding Ltda.   [to be
Provided]   [to be provided]   [to be provided]   [to be provided]   [to be
provided]   [to be provided]
Energex Co. [to be provided]
      [to be provided]   100%   Inversiones Gas Atacama Holding Ltda.   to be
provided   [to be provided   [to be provided   [to be provided   [to be provided
  [to be provided

 

*   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 fischal 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.  
**   Ownership at Closing.   *   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.   **   Ownership at Closing

 

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Schedule 3.1.2
No Consents to Liens
None.
Schedule 3.3
Tax Matters
The Argentine tax authorities as part of an ongoing audit have taken the
position that the amounts paid into the Argentine branch of Gasoducto Atacama
Argentina S.A. represented a capital contribution from the Chilean home office
rather than a loan. Accordingly they are proposing to disallow interest
deductions and an f/x loss associated with the devaluation of the Argentine
currency.
Although the issue has not been raised, there is a risk that the Argentine tax
authorities could concede the existence of the loan but argue that the
withholding tax should have been 35% rather than 15% (with Chase) or 12% (with
Standard Bank).
Schedule 3.4
Compliance with Laws
1. Disputes between GasAtacama Generación and Pluspetrol and YPF arising under
gas supply arrangements regarding non-deliveries of natural gas, export taxes
and claims of economic hardship made by gas suppliers.
2. See, Schedule 3.3, Tax Matters.
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”)

 

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EXHIBIT B to
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
NOTE HOLDERS DISCLOSURE LETTER
to
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
AEI CHILE HOLDINGS LTD.
And
ASHMORE ENERGY INTERNATIONAL
Dated as of June 1, 2007
NOTE HOLDERS DISCLOSURE LETTER
To
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
by and among
CMS INTERNATIONAL VENTURES, L.L.C.,
CMS CAPITAL L.L.C.,
CMS GAS ARGENTINA COMPANY,
CMS ENTERPRISES COMPANY,
AEI CHILE HOLDINGS LTD.
And
ASHMORE ENERGY INTERNATIONAL

 

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Dated as of June 1, 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 AEI Chile Holdings Ltd., an
exempted company incorporated with limited liability under the laws of the
Cayman Islands (“Purchaser”) in connection with the Amended and Restated
Securities Purchase Agreement dated as of June 1, 2007 (as so amended and
restated, 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”) and Purchaser.
     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 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 Sellers 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 Sellers, CMS-Inversiones and the Companies
Subsidiaries made available to Purchaser in the virtual data room on Intralinks
under “Project Beta” as of May 31, 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

Schedule 2.2.3(c)
Note Holder Required Statutory Approvals
None.
SCHEDULES TO
AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
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
  David Keyhoe
Francisco Mezzadri
  David Baughman

 

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GASATACAMA S.A.
   
 
   
Directors
   
 
   
Regular
  Alternate
 
   
Tom Miller
  Thomas Elward
David Baughman
  Sharon McIlnay

     
GASATACAMA GENERACION S.A.
   
 
   
Directors
   
 
   
Regular
  Alternate
 
   
David Baughman
  Sharon Mcllnay
Tom Miller
  Thomas Elward

     
GASODUCTO ATACAMA CHILE S.A.
   
 
   
Directors
   
 
   
Regular
  Alternate
David Baughman
  Sharon Mcllnay
Tom Miller
  Thomas Elward

     
GASODUCTO ATACAMA ARGENTINA S.A.
   
 
   
Directors
   
 
   
Regular
  Alternate
David Baughman
  Sharon Mcllnay
Tom Miller
  Thomas Elward

ATACAMA FINANCE CO.
Corporate Comment:
[To be provided]
ENERGEX CO.
Corporate Comment:
[To be provided]
GASODUCTO ATACAMA ARGENTINA S.A. (Sucursal Argentine)
Gustavo Roda, as registered agent only.

 

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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.
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. Miguel Mendoza, Ashmore Energy International
2. Gabriel Monroy, Ashmore Energy International