Exhibit 10

                            STOCK PURCHASE AGREEMENT

                                  by and among

                               CEMAS CORPORATION,
                                LA PLATA I, INC.,
                        PSEG AMERICAS OPERATING COMPANY,
                               PSEG AMERICAS INC.,
                               PSEG AMERICAS LTD.,

                                       and

                         PSEG CAYMAN AMERICAS V COMPANY
                                  (as Sellers)

                                       and

                        AES ARGENTINA INVESTMENTS, LTD.,

                                       and

                               LA PLATA III, INC.
                                   (as Buyers)
                                       and
                          AES ARGENTINA OPERATIONS LTD.

                           Dated as of August 24, 2001


<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE 1

                                  DEFINED TERMS

1.1      DEFINED TERMS.........................................................1
1.2      REFERENCES AND TITLES.................................................1

                                    ARTICLE 2

                       SALE AND PURCHASE OF THE INTERESTS

2.1      AGREEMENT TO SELL AND BUY.............................................2
2.2      PURCHASE PRICE........................................................2
2.3      FIRST CLOSING.........................................................2
2.4      ACTIONS TO OCCUR AT FIRST CLOSING.....................................3
2.5      SECOND CLOSING........................................................5
2.6      ACTIONS TO OCCUR AT SECOND CLOSING....................................6

                                    ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

3.1      REPRESENTATIONS AND WARRANTIES OF THE SELLERS.........................7
3.2      REPRESENTATIONS AND WARRANTIES OF THE BUYERS..........................9
3.3      REPRESENTATIONS AND WARRANTIES OF AES OPERATIONS.....................10

                                    ARTICLE 4

                      ADDITIONAL AGREEMENTS OF THE SELLERS

4.1      REASONABLE EFFORTS; DUTY TO COOPERATE................................11
4.2      ANTITRUST FILING.....................................................12
4.3      ADDITIONAL INTERESTS.................................................12
4.4      TERMINATION OF CERTAIN AGREEMENTS....................................12
4.5      CERTAIN DIVIDENDS AND OTHER DISTRIBUTIONS............................12

                                    ARTICLE 5

                       ADDITIONAL AGREEMENTS OF THE BUYERS

5.1      REASONABLE EFFORTS; DUTY TO COOPERATE................................12
5.2      SURETY BONDS, LETTERS OF CREDIT, GUARANTEES, ETC.....................13
5.3      DIRECTORS' AND OFFICERS' INDEMNIFICATION.............................13


                                       i
<PAGE>

5.4      CORPORATE REORGANIZATION.............................................14
5.5      PAYMENT OF AMOUNTS OWED TO THE SELLERS...............................14
5.6      POST-FIRST CLOSING PAYMENT...........................................14
5.7      TRANSFER OF OPERATORSHIP.............................................14
5.8      SHAREHOLDERS' AND QUOTAHOLDERS MEETINGS; AMENDMENT OF BY-LAWS........14
5.9      ANTITRUST FILING.....................................................14
5.10     TERMINATION OF CERTAIN AGREEMENTS....................................15

                                    ARTICLE 6

                      CONDITIONS PRECEDENT TO FIRST CLOSING

6.1      CONDITIONS TO EACH PARTY'S OBLIGATIONS...............................15
6.2      CONDITIONS TO OBLIGATIONS OF THE BUYERS..............................16
6.3      CONDITIONS TO OBLIGATIONS OF THE SELLERS.............................16

                                    ARTICLE 7

                     CONDITIONS PRECEDENT TO SECOND CLOSING

7.1      CONDITIONS TO OBLIGATIONS OF AES CAYMAN, CEMAS AND
          PSEG AMERICAS OPERATING.............................................17
7.2      CONDITIONS TO OBLIGATIONS OF AES CAYMAN..............................17
7.3      CONDITIONS TO OBLIGATIONS OF CEMAS AND PSEG AMERICAS OPERATING.......17

                                    ARTICLE 8

                                   TERMINATION

8.1      TERMINATION..........................................................18
8.2      EFFECT OF TERMINATION................................................19

                                    ARTICLE 9

                                 INDEMNIFICATION

9.1      INDEMNIFICATION OF THE BUYERS........................................19
9.2      INDEMNIFICATION OF THE SELLERS.......................................19
9.3      DEFENSE OF THIRD-PARTY CLAIMS........................................19
9.4      NO DUPLICATION.......................................................20
9.5      CONTRIBUTORY OBLIGATIONS.............................................20


                                       ii
<PAGE>

                                   ARTICLE 10

                               GENERAL PROVISIONS

10.1     SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................21
10.2     FURTHER ACTIONS......................................................21
10.3     AMENDMENT, MODIFICATION AND WAIVER...................................22
10.4     SEVERABILITY.........................................................22
10.5     EXPENSES AND OBLIGATIONS.............................................22
10.6     PARTIES IN INTEREST..................................................22
10.7     NOTICES..............................................................22
10.8     COUNTERPARTS.........................................................24
10.9     ENTIRE AGREEMENT.....................................................24
10.10    GOVERNING LAW; CHOICE OF FORUM.......................................24
10.11    JURY TRIAL WAIVER....................................................24
10.12    PUBLIC ANNOUNCEMENTS.................................................24
10.13    ASSIGNMENT...........................................................25
10.14    INTERPRETATION.......................................................25


                                      iii
<PAGE>

ANNEX I  COMPANIES AND INTERESTS
ANNEX II DEFINITIONS

EXHIBITS:
---------

Exhibit A              FORM OF NOTE PURCHASE AGREEMENT
Exhibit B-1            FORM OF OPINION OF LATHAM & WATKINS
Exhibit B-2            FORM OF OPINION OF GENERAL COUNSEL OF THE AES CORPORATION
Exhibit B-3            FORM OF OPINION OF MAPLES AND CALDER
Exhibit B-4            FORM OF OPINION OF ESTUDIO O'FARRELL
Exhibit C              FORM OF AES FIRST CLOSING WAIVER
Exhibit D              FORM OF AMENDED AND RESTATED EDEN/EDES
                       SHAREHOLDERS AGREEMENT
Exhibit E              FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Exhibit F              FORM OF STOCK USUFRUCT AGREEMENT
Exhibit G              FORM OF RESIGNATION LETTER AND WAIVER OF DIRECTORS AND
                       OFFICERS OF THE COMPANIES
Exhibit H-1            FORM OF OPINION OF VINSON & ELKINS L.L.P.
Exhibit H-2            FORM OF OPINION OF CONYERS DILL & PEARMAN
Exhibit H-3            FORM OF OPINION OF MAPLES AND CALDER
Exhibit H-4            FORM OF OPINION OF BERETTA KAHALE GODOY
Exhibit H-5            FORM OF OPINION OF DAVID R. GARCIA
Exhibit I              FORM OF PSEG FIRST CLOSING WAIVER
Exhibit J              FORM OF PSEG SECOND CLOSING WAIVER
Exhibit K              FORM OF AES SECOND CLOSING WAIVER
Exhibit L              FORM OF AES SHARES AGREEMENT


SCHEDULES:
----------

Schedule 2.2(a)        CERTAIN AMOUNTS TO BE INCLUDED IN AES SHARES AMOUNT
Schedule 2.2(b)        ALLOCATION OF PURCHASE PRICE
Schedule 2.4(b)(ii)    DIRECTORS, OFFICERS, ETC. OF THE COMPANIES TO RESIGN AT
                       FIRST CLOSING
Schedule 2.6(b)        DIRECTORS, OFFICERS, ETC. OF THE COMPANIES TO RESIGN AT
                       SECOND CLOSING
Schedule 3.1(c)        SELLERS CONSENTS
Schedule 3.1(d)        LIENS ON INTERESTS
Schedule 3.1(g)        LIENS ON CAMILLE, LTD. SHARES
Schedule 3.1(h)        LIENS ON EDEN/EDES SHARES
Schedule 3.2(c)        BUYERS CONSENTS
Schedule 3.3(c)        AES OPERATIONS CONSENTS
Schedule 3.3(d)        LIENS ON PSEG AMERICAS OPERATING SHARES
Schedule 5.2           SELLER AGREEMENTS
Schedule 5.4           CORPORATE REORGANIZATION
Schedule 5.5           AMOUNTS OWED TO SELLERS
Schedule 9.2           CERTAIN INDEMNIFIED MATTERS


                                       iv
<PAGE>

                            STOCK PURCHASE AGREEMENT

      This STOCK PURCHASE  AGREEMENT (this  "Agreement")  dated as of August 24,
2001, by and among CEMAS Corporation, a Delaware corporation ("CEMAS"), La Plata
I, Inc., a Delaware corporation ("La Plata I"), PSEG Americas Operating Company,
a Cayman Islands  exempted  company ("PSEG Americas  Operating"),  PSEG Americas
Inc., a Delaware  corporation  ("PSEG  Americas  Inc."),  PSEG Americas  Ltd., a
Bermuda limited liability company ("PSEG Americas"),  and PSEG Cayman Americas V
Company,  a Cayman Islands exempted company ("PSEG Cayman V") and, together with
CEMAS,  La Plata I, PSEG Americas  Operating,  PSEG Americas Inc., PSEG Americas
Ltd. and PSEG Cayman V, the "Sellers"),  and AES Argentina Investments,  Ltd., a
Cayman  Islands  exempted  company  ("AES  Cayman"),  and La Plata III,  Inc., a
Delaware  corporation  ("La  Plata  III"  and,  together  with AES  Cayman,  the
"Buyers"), and AES Argentina Operations, Ltd., a Cayman Islands exempted company
("AES  Operations").   Sellers,  Buyers  and  AES  Operations  are  referred  to
individually as a "Party" and collectively as the "Parties."

                                 R E C I T A L S

            A. The Sellers own the issued and  outstanding  interests  listed on
      Annex I (the "Interests") in the Companies (as hereinafter defined).

            B. The Sellers  desire to sell and the Buyers  desire to buy all the
      Interests upon the terms and conditions set forth in this Agreement.

            C. AES Operations owns 10,057,589  participating  shares (9.999%) of
      PSEG Americas  Operating (the "PSEG Americas  Operating  Shares") and PSEG
      Americas  Operating  desires to repurchase  such shares and AES Operations
      desires to sell such  shares  upon the terms and  conditions  set forth in
      this Agreement.

                               A G R E E M E N T S

      NOW,  THEREFORE,  in  consideration  of  the  respective  representations,
warranties, agreements, and conditions hereinafter set forth, and other good and
valuable  consideration,  the sufficiency of which is hereby  acknowledged,  the
Parties hereto hereby agree as follows:

                                   ARTICLE 1

                                  DEFINED TERMS

      1.1 Defined Terms. Capitalized terms used but not otherwise defined herein
shall have the meanings given such terms in Annex II.

      1.2  References  and Titles.  Titles  appearing  at the  beginning  of any
Articles, Sections, subsections, or other subdivisions of this Agreement are for
convenience  only,  do  not  constitute  any  part  of the  Articles,  Sections,
subsections,  or other subdivisions,  and shall be disregarded in construing the
language  contained  therein.  The words "this Agreement,"  "hereby,"  "herein,"
"hereof," and "hereunder," and words of similar import,  refer to this Agreement
as a whole and not to any particular  subdivision  unless  expressly so limited.
The words "this Section," "this subsection," and words of similar import,  refer
only to the Sections or subsections  hereof in which such words occur.  The word
"or" is not exclusive, and the word


<PAGE>

including" (in its various forms) means "including without limitation." Pronouns
in  masculine,  feminine,  or neuter  genders  shall be  construed  to state and
include any other gender and words,  terms, and titles  (including terms defined
herein) in the  singular  form shall be construed to include the plural and vice
versa,  unless the  context  otherwise  expressly  requires.  Unless the context
otherwise  requires,  all  defined  terms  contained  herein  shall  include the
singular and plural and the conjunctive  and  disjunctive  forms of such defined
terms.

                                   ARTICLE 2

                       SALE AND PURCHASE OF THE INTERESTS

      2.1  Agreement  to Sell  and  Buy.  Upon  the  terms  and  subject  to the
conditions  set forth in this  Agreement,  (i) the Sellers  shall sell,  assign,
transfer  and deliver to the Buyers on the First  Closing  Date,  and the Buyers
shall  purchase  on the  First  Closing  Date,  all of the  Interests  set forth
opposite  their names on Annex I, excluding the  Additional  Interests,  for the
consideration  set forth in  Section  2.2(a)  and (ii)  CEMAS and PSEG  Americas
Operating shall assign, transfer and deliver to AES Cayman on the Second Closing
Date,  and AES  Cayman  shall  receive on the Second  Closing  Date,  all of the
Additional Interests.

      2.2 Purchase Price.

            (a) The  Purchase  Price  for the  Interests  and the  other  rights
transferred to the Buyers and their Affiliates as contemplated by this Agreement
and the Stock  USUFRUCT  Agreement,  which  shall be paid as provided in Section
2.4(a)(i), shall consist of the following consideration:

            (i) the AES Shares or, at the Buyers' option,  immediately available
      Dollars in an amount equal to the AES Shares Amount; and

            (ii) the AES Cayman Notes.

            (b) The  Purchase  Price  shall be paid by the Buyers and  allocated
among the Sellers as provided  in Schedule  2.2(b).  Each of the Sellers and the
Buyers agree that it will not take,  nor permit any of its Affiliates to take, a
position on any Tax return,  before any Governmental  Authority charged with the
collection of Taxes, or in any judicial proceeding that is inconsistent with the
allocations set forth in Schedule 2.2(b).

   2.3 First Closing.  Subject to the  satisfaction  or waiver of the conditions
set forth in Article 6, the First  Closing will take place (a) at the offices of
Vinson & Elkins L.L.P.,  Houston,  Texas, at 10:00 a.m., local time on the third
Business Day following the date on which the  conditions  specified in Article 6
(other than the conditions  specified in Sections  6.2(c) and 6.3(d) which shall
be satisfied on the First Closing Date) have been satisfied or waived, but in no
event  later  than  August 24,  2002 or (b) at such other  place and time as the
Sellers and the Buyers may agree (the "First Closing Date").


                                       2
<PAGE>

      2.4 Actions to Occur at First Closing.

            (a)  Buyers'  Deliveries.  At the First  Closing,  the Buyers  shall
deliver or cause to be delivered to the Sellers the following:

                  (i) Purchase Price. The Purchase Price by:

                        (A) delivery of stock certificates  representing the AES
                  Shares allocated among and duly registered in the names of the
                  Sellers as set forth in  Schedule  2.2(b)  or, at the  Buyers'
                  option,  immediately  available  Dollars in an amount equal to
                  the AES Shares Amount; and

                        (B) delivery of the AES Cayman Notes allocated among and
                  payable to the Sellers as set forth in Schedule 2.2(b).

                  (ii)  Note  Purchase  Agreement.  A  counterpart  of the  Note
      Purchase  Agreement in the form  attached  hereto as Exhibit A executed by
      AES Cayman;

                  (iii)  Pledge   Agreements.   A  counterpart   of  the  Pledge
      Agreements executed by each of the Pledgors;

                  (iv)  Buyers'  Opinions  of  Counsel.  The opinion of Latham &
      Watkins,  dated  the First  Closing  Date in the form  attached  hereto as
      Exhibit B-1, the opinion of William R.  Luraschi,  General  Counsel of The
      AES Corporation,  dated the First Closing Date in the form attached hereto
      as Exhibit B-2, the opinion of Maples and Calder,  dated the First Closing
      Date in the form  attached  hereto as  Exhibit  B-3,  and the  opinion  of
      Estudio  O'Farrell,  dated the  First  Closing  Date in the form  attached
      hereto as Exhibit B-4;

                  (v)  Certificates.  The  certificates  referred to in Sections
      6.3(a) and 6.3(b);

                  (vi)  Authorization and Good Standing.  A copy of each Buyer's
      and AES  Operations'  corporate  resolutions  regarding  the  transactions
      contemplated  hereby and in the  Transaction  Documents,  certified by its
      secretary or assistant  secretary,  and a certificate of good standing for
      each Buyer and AES Operations  from the Secretary of State of the state of
      its incorporation;

                  (vii) Waiver. A waiver from The AES Corporation,  on behalf of
      itself and its Affiliates, in the form attached hereto as Exhibit C;

                  (viii) Amended and Restated EDEN/EDES Shareholders  Agreement.
      A  counterpart  of the Amended and Restated  Shareholders  Agreement  (the
      "Amended  and  Restated  EDEN/EDES  Shareholders  Agreement")  in the form
      attached  hereto as Exhibit D executed by AES Ocean Springs Ltd.,  AES Rio
      Diamante Inc., and AESEBA S.A.;


                                       3
<PAGE>

                  (ix) Assignment and Assumption Agreement. A counterpart of the
      Assignment and Assumption Agreement in the form attached hereto as Exhibit
      E, executed by AES Argentina Operations Ltd.;

                  (x)  Stock  USUFRUCT  Agreement.  A  counterpart  of the Stock
      USUFRUCT Agreement (the "Stock USUFRUCT Agreement"),  in the form attached
      hereto as Exhibit F, executed by AES Cayman; and

                  (xi) AES Shares  Agreement.  A  counterpart  of the AES Shares
      Agreement,  in the form attached  hereto as Exhibit L, executed by The AES
      Corporation.

            (b) Sellers'  Deliveries.  At the First  Closing,  the Sellers shall
deliver or cause to be delivered to the Buyers the following:

                  (i)  Certificates.  Certificates  representing  the  Interests
      (other than the  Additional  Interests  (which  shall be  delivered at the
      Second  Closing) and the  Interests in the Quota  Companies),  endorsed in
      blank or accompanied by duly executed assignment documents;

                  (ii) Resignations. The resignations, effective as of the First
      Closing Date, of each of the directors,  managers, syndics and officers of
      the Companies and other  entities  identified on Schedule  2.4(b)(ii),  or
      their respective  successors,  including a waiver from each such director,
      manager, syndic and officer in the form attached hereto as Exhibit G;

                  (iii)  Sellers'  Opinions of Counsel.  The opinion of Vinson &
      Elkins L.L.P., dated the First Closing Date in the form attached hereto as
      Exhibit  H-1,  the  opinion  of Conyers  Dill &  Pearman,  dated the First
      Closing  Date in the form  attached  hereto as Exhibit H-2, the opinion of
      Maples  and  Calder,  dated the First  Closing  Date in the form  attached
      hereto as Exhibit  H-3,  the opinion of Beretta  Kahale  Godoy,  dated the
      First  Closing  Date in the form  attached  hereto as Exhibit  H-4 and the
      opinion  of David R.  Garcia,  dated  the First  Closing  Date in the form
      attached hereto as Exhibit H-5;

                  (iv)  Certificates.  The certificates  referred to in Sections
      6.2(a) and 6.2(b);

                  (v) Authorization  and Good Standing.  A copy of each Seller's
      corporate resolutions  regarding the transactions  contemplated hereby and
      in the  Transaction  Documents,  certified  by its  secretary or assistant
      secretary,  and a  certificate  of good  standing for each Seller from the
      Secretary  of State or other  appropriate  officer  of the  state or other
      jurisdiction of its incorporation;

                  (vi)  Waiver.  A waiver  from PSEG Global  Inc.,  on behalf of
      itself and its Affiliates, in the form attached hereto as Exhibit I;

                  (vii) Amended and Restated EDEN/EDES Shareholders Agreement. A
      counterpart of the Amended and Restated EDEN/EDES  Shareholders  Agreement
      in the


                                       4
<PAGE>

      form  attached  hereto as Exhibit D executed by PSEG  Americas  Operating,
      CEMAS, and PSEG Operating Argentina S.A.;

                  (viii) Assignment and Assumption  Agreement.  A counterpart of
      the Assignment and Assumption  Agreement,  in the form attached  hereto as
      Exhibit E, executed by PSEG Americas Ltd.;

                  (ix) Stock  USUFRUCT  Agreement.  A  counterpart  of the Stock
      USUFRUCT Agreement,  in the form attached hereto as Exhibit F, executed by
      CEMAS and PSEG Americas Operating; and

                  (x) AES  Shares  Agreement.  A  counterpart  of the AES Shares
      Agreement, in the form attached hereto as Exhibit L, executed by CEMAS, La
      Plata I and PSEG Americas Inc.

            (c)  Quotaholders  Meetings.  At or prior to the First Closing,  the
Parties shall cause the Quota Companies to hold quotaholders meetings to approve
the transfer of the quotas on the First  Closing  Date,  to amend the by-laws of
the Quota Companies to reflect the transfer of the quotas, to change the name of
any Quota  Companies  bearing  the PSEG name and to duly  register  the  amended
by-laws in the Public Registry of Commerce.

            (d)  Shareholders  Meetings.  At or prior to the First Closing,  the
Parties  shall  cause the  Companies  and their  respective  Affiliates  to hold
shareholders  meetings  to  approve  the  resignations  and  performance  of the
resigning  directors,  managers,  syndics and officers of the  Companies and the
other entities identified on Schedule 2.4(b)(ii), or their respective successors
and to change the name of any Companies bearing the PSEG name.

            (e) Repurchase.

                  (i) At the First Closing,  AES Operations shall sell,  assign,
      transfer  and  deliver  to PSEG  Americas  Operating,  and  PSEG  Americas
      Operating  shall  repurchase,  the  PSEG  Americas  Operating  Shares.  As
      consideration  for the repurchase of the PSEG Americas  Operating  Shares,
      PSEG Americas  Operating  shall transfer to AES Operations  210,834 shares
      (9.9982%)  of PSEG  Operating  Argentina  (the "PSEG  Operating  Argentina
      Shares") and AES  Operations  shall either cancel or convert to capital of
      PSEG Americas  Operating all  indebtedness  owed to AES Operations by PSEG
      Americas Operating, as directed by PSEG Americas Operating.

                  (ii) At the First  Closing,  AES  Operations and PSEG Americas
      Operating shall deliver to the other certificates  representing the shares
      transferred to each other as provided under Section 2.4(e)(i), endorsed in
      blank or accompanied by duly executed assignment documents.

      2.5  Second  Closing.  Subject  to  the  satisfaction  or  waiver  of  the
conditions set forth in Article 7, the Second Closing will take place (a) at the
offices of Vinson & Elkins L.L.P.,  Houston, Texas, at 10:00 a.m., local time on
the Business Day on which the conditions specified


                                       5
<PAGE>

in Article 7 have been  satisfied  or waived or (b) at such other place and time
as Sellers and Buyers may agree (the "Second Closing Date").

      2.6 Actions to Occur at Second Closing.

            (a) Deliveries of CEMAS and PSEG Americas  Operating.  At the Second
Closing,  CEMAS  and  PSEG  Americas  Operating  shall  deliver  or  cause to be
delivered to AES Cayman the following:

                  (i)  Certificates.  Certificates  representing  the Additional
      Interests,  endorsed in blank or accompanied  by duly executed  assignment
      documents.

                  (ii)  Resignations.  The  resignations,  effective  as of  the
      Second  Closing  Date,  of each of the  directors,  managers,  syndics and
      officers of the  Companies and the other  entities  identified on Schedule
      2.6(b), or their respective successors,  including a waiver from each such
      director,  manager,  syndic  and  officer in the form  attached  hereto as
      Exhibit G.

                  (iii) Opinions of Counsel. The opinions of (A) Vinson & Elkins
      L.L.P.,  (B) David R.  Garcia,  and (C) Maples and Calder,  each dated the
      Second  Closing  Date and  confirming  as of the Second  Closing  Date the
      opinions delivered by such counsel delivered at the First Closing.

                  (iv)  Waiver.  A waiver  from PSEG Global  Inc.,  on behalf of
      itself and its Affiliates, in the form attached hereto as Exhibit J.

            (b)  Deliveries  of AES Cayman.  At the Second  Closing,  AES Cayman
shall deliver or cause to be delivered to the Sellers the following:

                  (i) Opinions of Counsel. The opinions of (A) Latham & Watkins,
      (B) William R. Luraschi,  General Counsel of The AES Corporation,  and (C)
      Maples and Calder, each dated the Second Closing Date and confirming as of
      the Second  Closing  Date the  opinions  delivered  by such counsel at the
      First Closing; and

                  (ii) Waiver. A waiver from The AES  Corporation,  on behalf of
      itself and its Affiliates, in the form attached hereto as Exhibit K.

            (c) Shareholders  Meetings.  At or prior to the Second Closing,  the
Parties  shall  cause the  Companies  and their  respective  Affiliates  to hold
shareholders  meetings  to  approve  the  resignations  and  performance  of the
resigning  directors,  managers,  syndics and officers of the  Companies and the
other entities identified on Schedule 2.6(b).


                                       6
<PAGE>

ARTICLE 3

                         REPRESENTATIONS AND WARRANTIES

      3.1 Representations and Warranties of the Sellers.  Each Seller represents
and warrants to the Buyers as follows:

            (a) Organization,  Good Standing,  Etc. Such Seller is a corporation
or company, as the case may be, duly incorporated,  validly existing and in good
standing under the laws of the state or other  jurisdiction of its incorporation
and has all requisite  corporate  power and authority to own,  lease and operate
its properties and to carry on its business as now being conducted.

            (b)  Authority.  Such Seller has all requisite  corporate  power and
authority to enter into this Agreement, and each other agreement,  document, and
instrument  required to be executed in accordance  herewith  (collectively,  the
"Transaction  Documents")  to  which  it  is  a  party  and  to  consummate  the
transactions contemplated hereby and thereby. The execution and delivery by such
Seller of this  Agreement and the  Transaction  Documents to which it is a party
and the consummation by it of the transactions  contemplated  hereby and thereby
have been duly authorized by all necessary  corporate action on the part of such
Seller.  This Agreement has been duly executed and delivered by such Seller, and
upon the execution and delivery by it of the  Transaction  Documents to which it
is a party,  such  Transaction  Documents will be duly executed and delivered by
such Seller,  and  (assuming  due  authorization,  execution and delivery by the
Buyers)  constitute,  or upon execution and delivery by it will constitute,  the
valid  and  binding  obligations  of  such  Seller,  enforceable  against  it in
accordance  with  their  terms,  subject  as  to  enforceability  to  applicable
bankruptcy,  insolvency,  reorganization,  moratorium and similar laws affecting
creditors'  rights and remedies  generally  and to general  principles of equity
(regardless  of  whether  enforcement  is  sought in a  proceeding  at law or in
equity).

            (c) No Conflict;  Required  Filings and Consents.  The execution and
delivery by such Seller of this Agreement and the Transaction Documents to which
it is a party do not,  and the  performance  by such Seller of the  transactions
contemplated  hereby and thereby will not (i) violate,  conflict with, or result
in any breach of any provision of its Certificate or Articles of  Incorporation,
Bylaws or other organizational documents, (ii) violate, conflict with, or result
in a violation or breach of, or constitute a default (with or without due notice
or lapse of time or both) under,  or permit the termination of, or result in the
acceleration of, or entitle any party to accelerate any obligation, or result in
the loss of any benefit, or give any Person the right to require any security to
be  repurchased,  or give  rise to the  creation  of any  Lien  upon  any of the
Interests,  or  affect  its  rights  under  any of  the  terms,  conditions,  or
provisions of any loan or credit agreement, note, bond, mortgage,  indenture, or
deed of  trust,  or any  license,  lease,  agreement,  or  other  instrument  or
obligation  to which  it is a party or by which or to which it or the  Interests
may be bound or subject, or (iii) violate any Applicable Law; except in the case
of  clauses  (ii) and  (iii) of this  Section  3.1(c)  for any such  violations,
conflicts,   breaches,   defaults,   rights  of  termination,   cancellation  or
acceleration,  benefits,  repurchase rights, Liens or effects that are disclosed
on Schedule 3.1(c).  Except as disclosed on Schedule  3.1(c),  no Consent of any
Governmental  Authority  or other third party is required by or with  respect to
such Seller or any


                                       7
<PAGE>

of its  Affiliates in connection  with the execution and delivery by such Seller
of this Agreement or any of the other Transaction Documents to which such Seller
is a party or the consummation by such Seller of the  transactions  contemplated
hereby or thereby.

            (d)  Interests.  Such Seller owns the Interests in the Companies set
forth  opposite its name on Annex I free and clear of any Liens,  other than the
Liens disclosed on Schedule 3.1(d).

            (e) Litigation.  As of the date hereof,  there is no claim,  action,
suit, inquiry, judicial or administrative proceeding,  grievance, or arbitration
pending  or, to the  knowledge  of such  Seller,  threatened  against any of the
Sellers or any of their Affiliates relating to the transactions  contemplated by
this Agreement or the Transaction Documents.

            (f) Broker's Fees. Neither such Seller nor any of its Affiliates has
engaged  any agent,  broker,  investment  banker,  or other  Person that will be
entitled to any broker's or finder's fee or any other  commission or fee payable
by the Buyers,  the Companies or any of their  Affiliates in connection with any
of the transactions contemplated by this Agreement or the Transaction Documents.

            (g)  Wildwood  I. (i)  Wildwood I, Ltd,  ("Wildwood  I") is a Cayman
Islands exempted  company and was duly  incorporated and is validly existing and
in good standing under the laws of the Cayman  Islands,  (ii) Wildwood I has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its  business  as now being  conducted;  (iii) since the date of
Wildwood I's incorporation, Wildwood I has conducted no operations other than in
connection  with its ownership of 333.4 shares  (33.34%) of Class B Common Stock
of Camille, Ltd. (the "Camille,  Ltd. Shares"), (iv) Wildwood I owns the Camille
Ltd.  Shares  free and clear of any  Liens,  other than the Liens  disclosed  on
Schedule 3.1(g),  and (v) Wildwood I has filed all tax returns that are required
to have been filed by it pursuant to applicable  foreign,  state, local or other
law, and has paid all taxes due for the periods covered by such returns.

            (h) PSEG  Operating  Argentina  (i) PSEG  Operating  Argentina is an
Argentine sociedad anonima and was duly incorporated and is validly existing and
in good standing under the laws of Argentina,  (ii) PSEG Operating Argentina has
all  requisite  corporate  power and  authority  to own,  lease and  operate its
properties and to carry on its business as now being conducted;  (iii) since the
date of PSEG Operating Argentina's  incorporation,  PSEG Operating Argentina has
conducted  no  operations  other  than  in  connection  with  its  ownership  of
92,130,330  Class A Shares and 46,044,433  Class B Shares of EDEN and 33,503,278
Class A  Shares  and  16,744,103  Class B  Shares  of  EDES  (collectively,  the
"EDEN/EDES  Shares"),  (iv) PSEG Operating  Argentina owns the EDEN/EDES  Shares
free and clear of any Liens,  other than the Liens disclosed on Schedule 3.1(h),
and (v) PSEG Operating  Argentina has filed all tax returns that are required to
have been filed by it pursuant to applicable foreign, state, local or other law,
and has paid all taxes due for the periods covered by such returns.


                                       8
<PAGE>

      3.2  Representations  and Warranties of the Buyers.  Each Buyer represents
and warrants to the Sellers as follows:

            (a)  Organization;  Good Standing;  Etc. Such Buyer is a corporation
duly incorporated,  validly existing, and in good standing under the laws of the
state or other jurisdiction of its incorporation and has all requisite corporate
power and authority to own,  lease,  and operate its  properties and to carry on
its business as now being conducted.

            (b) Authority.  Such Buyer has all requisite  power and authority to
enter into this Agreement and the other  Transaction  Documents to which it is a
party and to consummate the transactions  contemplated  hereby and thereby.  The
execution  and  delivery  of this  Agreement  by such Buyer and the  Transaction
Documents to which it is a party and the  consummation by it of the transactions
contemplated  hereby and  thereby  have been duly  authorized  by all  necessary
corporate  action  on the part of such  Buyer.  This  Agreement  has  been  duly
executed and delivered by such Buyer,  and upon  execution and delivery by it of
the Transaction  Documents to which it is a party,  such  Transaction  Documents
will  be  duly  executed  and  delivered  by  such  Buyer,   and  (assuming  due
authorization,  execution  and  delivery  by the  Sellers)  constitute,  or upon
execution and delivery by it will constitute,  the valid and binding obligations
of such Buyer, enforceable against it in accordance with their terms, subject as
to enforceability to applicable bankruptcy,  insolvency,  fraudulent conveyance,
reorganization,  moratorium,  and similar laws affecting  creditors'  rights and
remedies  generally and to general  principles of equity  (regardless of whether
enforcement is sought in a proceeding at law or in equity).

            (c) No Conflict;  Required  Filings and Consents.  The execution and
delivery by such Buyer of this Agreement and the Transaction  Documents to which
it is a party do not,  and the  performance  by such  Buyer of the  transactions
contemplated  hereby and thereby will not (i) violate,  conflict with, or result
in any breach of any provisions of its Certificate of  Incorporation  or Bylaws,
(ii)  violate,  conflict  with,  or  result  in a  violation  or  breach  of, or
constitute  a  default  (with or  without  due  notice or lapse of time or both)
under,  or permit  the  termination  of, or  result in the  acceleration  of, or
entitle any party to  accelerate  any  obligation,  or result in the loss of any
benefit, or give any Person the right to require any security to be repurchased,
or give rise to the  creation of any Lien upon any of the AES Shares,  or affect
its rights  under any of the terms,  conditions,  or  provisions  of any loan or
credit  agreement,  note, bond,  mortgage,  indenture,  or deed of trust, or any
license,  lease,  agreement,  or other instrument or obligation to which it is a
party or by which or to which it or any of its assets  may be bound or  subject,
or (iii)  violate any  Applicable  Law;  except in the case of clauses  (ii) and
(iii) of this  Section  3.2(c)  for any such  violations,  conflicts,  breaches,
defaults,  rights  of  termination,   cancellation  or  acceleration,  benefits,
repurchase  rights,  Liens or effects  that are  disclosed  on Schedule  3.2(c).
Except as disclosed on Schedule 3.2(c), no Consent of any Governmental Authority
or other third party is required by or with  respect to such Buyer or any of its
Affiliates in  connection  with the execution and delivery by such Buyer of this
Agreement  or any of the other  Transaction  Documents  to which such Buyer is a
party or the consummation by such Buyer of the transactions  contemplated hereby
or thereby,  including the  corporate  reorganization  of it and its  Affiliates
contemplated under Section 5.4.


                                       9
<PAGE>

            (d) Litigation.  As of the date hereof,  there is no claim,  action,
suit, inquiry, judicial or administrative proceeding,  grievance, or arbitration
pending or, to the knowledge of such Buyer, threatened against any of the Buyers
or their Affiliates relating to the transactions  contemplated by this Agreement
or the Transaction Documents.

            (e) Broker's Fee.  Neither such Buyer nor any of its  Affiliates has
engaged  any  agent,  broker,  investment  banker or other  Person  that will be
entitled to any broker's or finder's fee or any other commission or fee from any
of  the  Sellers  or any of  their  Affiliates  in  connection  with  any of the
transactions contemplated by this Agreement or the Transaction Documents.

            (f) Investment. Such Buyer is acquiring the Interests solely for its
own beneficial account, for investment purposes only, and not with a view to, or
for resale in connection with, any distribution of the Interests.

      3.3  Representations  and  Warranties of AES  Operations.  AES  Operations
represents and warrants to the Sellers as follows:

            (a)   Organization;   Good  Standing;   Etc.  AES  Operations  is  a
      corporation  duly  incorporated,  validly  existing,  and in good standing
      under  the  laws  of the  jurisdiction  of its  incorporation  and has all
      requisite  corporate  power and authority to own,  lease,  and operate its
      properties and to carry on its business as now being conducted.

            (b) Authority.  AES Operations has all requisite power and authority
      to enter into this Agreement and the other Transaction  Documents to which
      it is a party and to consummate the transactions  contemplated  hereby and
      thereby.  The execution and delivery of this  Agreement by AES  Operations
      and the Transaction  Documents to which it is a party and the consummation
      by it of the transactions  contemplated  hereby and thereby have been duly
      authorized  by  all  necessary   corporate  action  on  the  part  of  AES
      Operations.  This  Agreement  has been duly  executed and delivered by AES
      Operations,  and upon  execution  and  delivery  by it of the  Transaction
      Documents to which it is a party, such Transaction  Documents will be duly
      executed and delivered by AES Operations, and (assuming due authorization,
      execution and delivery by the Sellers)  constitute,  or upon execution and
      delivery by it will constitute,  the valid and binding  obligations of AES
      Operations, enforceable against it in accordance with their terms, subject
      as to  enforceability  to applicable  bankruptcy,  insolvency,  fraudulent
      conveyance,   reorganization,   moratorium,  and  similar  laws  affecting
      creditors'  rights and remedies  generally  and to general  principles  of
      equity (regardless of whether enforcement is sought in a proceeding at law
      or in equity).

            (c) No Conflict;  Required  Filings and Consents.  The execution and
      delivery by AES Operations of this Agreement and the Transaction Documents
      to which it is a party do not, and the  performance  by AES  Operations of
      the  transactions  contemplated  hereby and thereby  will not (i) violate,
      conflict  with,  or  result  in  any  breach  of  any  provisions  of  its
      Certificate of  Incorporation or Bylaws,  (ii) violate,  conflict with, or
      result in a  violation  or breach  of, or  constitute  a default  (with or
      without due notice or


                                       10
<PAGE>

      lapse of time or both) under,  or permit the  termination of, or result in
      the acceleration of, or entitle any party to accelerate any obligation, or
      result in the loss of any benefit, or give any Person the right to require
      any security to be  repurchased,  or give rise to the creation of any Lien
      upon any of the shares to be  redeemed  by it, or affect its rights  under
      any of  the  terms,  conditions,  or  provisions  of any  loan  or  credit
      agreement,  note,  bond,  mortgage,  indenture,  or deed of trust,  or any
      license,  lease,  agreement, or other instrument or obligation to which it
      is a party or by which or to which it or any of its assets may be bound or
      subject,  or (iii)  violate any  Applicable  Law.  Except as  disclosed on
      Schedule 3.3(c),  no Consent of any Governmental  Authority or other third
      party is  required  by or with  respect  to AES  Operations  or any of its
      Affiliates in connection with the execution and delivery by AES Operations
      of this Agreement or any of the other  Transaction  Documents to which AES
      Operations  is a  party  or  the  consummation  by AES  Operations  of the
      transactions  contemplated  hereby or  thereby,  including  the  corporate
      reorganization of it and its Affiliates contemplated under Section 5.5.

            (d)  Interests.  AES  Operations  owns the PSEG  Americas  Operating
      Shares  free and clear of any  Liens,  other than the Liens  disclosed  on
      Schedule 3.3(d).

                                   ARTICLE 4

                      ADDITIONAL AGREEMENTS OF THE SELLERS

      4.1 Reasonable Efforts;  Duty to Cooperate.  Each of the Sellers shall use
its reasonable  efforts to take, or cause to be taken, all action, and to do, or
cause  to  be  done,  all  things  necessary  or  advisable  to  consummate  the
transactions  contemplated by this Agreement,  including  obtaining all Consents
that are required to permit the consummation of the transactions contemplated by
this  Agreement.  In addition,  each Seller shall use its reasonable  efforts to
cooperate  with the  Buyers in causing  the  conditions  precedent  set forth in
Articles 6 and 7 to occur on or prior to August 24, 2002.  In the event that the
Parties do not receive all of the Consents  necessary or advisable to consummate
the transactions contemplated by this Agreement, upon the request of the Buyers,
the Sellers  shall  negotiate in good faith with the Buyers to  restructure  the
transactions  contemplated  by this  Agreement in such a manner as to enable the
transactions  contemplated  hereby to be consummated without the receipt of such
Consents,  provided  that the Sellers  shall have no  obligation to agree to any
such restructured transactions that have or could reasonably be expected to have
an adverse impact on the Sellers or on the economics of the  transactions to the
Sellers taken as a whole as compared to the economics of the transactions to the
Sellers  taken as a whole prior to such  restructuring.  If the Buyers desire to
restructure  the  corporate  reorganization  of the Buyers and their  Affiliates
prior to the First Closing in a manner  different  than is set forth on Schedule
5.4, then,  upon the request of the Buyers,  the Sellers shall negotiate in good
faith with the  Buyers to  accommodate  such  restructuring,  provided  that the
Sellers shall have no obligation to agree to any such  restructuring that has or
could  reasonably be expected to have an adverse impact on the Sellers or on the
economics of the transactions to the Sellers taken as a whole as compared to the
economics  of the  transactions  to the  Sellers  taken as a whole prior to such
restructuring.


                                       11
<PAGE>

      4.2  Antitrust  Filing.  Within  15  Business  Days  of the  date  of this
Agreement,  the Sellers shall prepare and file or cause to be prepared and filed
jointly  with  the  Sellers  a   consultative   opinion  with  the   appropriate
Governmental  Authority  relating to  compliance  with  Argentine  antitrust law
number  25.156 and  related  regulations  in  connection  with the  transactions
contemplated by this Agreement. The Sellers shall also prepare and file or cause
to be prepared and filed any other  documents or materials  that may be required
or requested by any Governmental Authority relating to compliance with Argentine
antitrust law number 25.156 and related regulations.

      4.3  Additional  Interests.  Other than the Liens  disclosed  on  Schedule
3.1(d),  the Sellers shall maintain the  Additional  Interests free and clear of
any Liens arising by, through or under the Sellers  during the period  beginning
on the First Closing Date and ending on the Second Closing Date.

      4.4 Termination of Certain Agreements.  (a) On the First Closing Date, the
Sellers  shall or shall  cause their  Affiliates  to enter into  agreements  (i)
terminating the  Shareholder  Agreements that do not terminate by their terms on
the  First  Closing  Date,  other  than  the  Amended  and  Restated   EDEN/EDES
Shareholders  Agreement,  and (ii)  confirming in writing the termination of the
Shareholder  Agreements that terminate by their terms on the First Closing Date.
(b) On the  Second  Closing  Date,  the  Sellers  shall  or  shall  cause  their
Affiliates  to enter  into  agreements  terminating  the  Amended  and  Restated
EDEN/EDES  Shareholders  Agreement  and  terminating  or,  if  permitted  by the
Ministry,  assigning to the  operator of EDEN and EDES  appointed by the Buyers,
the Technical Assistance Agreements and the Operating Support Agreements.

      4.5  Certain  Dividends  and  Other  Distributions.  The  Buyers  shall be
entitled to receive all  dividends,  distributions,  returns and  reductions  of
capital by or with respect to the Companies  and/or the  Operating  Subsidiaries
(as such term is  defined  in the Note  Purchase  Agreement)  accrued or payable
after  December 31, 2000 and prior to July 1, 2001,  other than the PSEG Amounts
(as such term is defined in the Payment  Agreement of even date  herewith by and
between The AES Corporation and PSEG Global Inc.).  The Buyers' right to receive
the amounts  provided for under this Section 4.5 is  absolute,  irrevocable  and
unconditional  irrespective  of: (a) the occurrence (or failure to occur) of the
First Closing;  (b) the cause underlying any termination of this Agreement;  (c)
the  value,   genuineness,   validity,   regularity  or  enforceability  of  the
Transaction Documents;  or (d) any obligation or liability of the Buyers (or any
of their Affiliates) to the Sellers (or any of their Affiliates).

                                   ARTICLE 5

                       ADDITIONAL AGREEMENTS OF THE BUYERS

      5.1 Reasonable  Efforts;  Duty to Cooperate.  Each of the Buyers shall use
its reasonable  efforts to take, or cause to be taken, all action, and to do, or
cause  to  be  done,  all  things  necessary  or  advisable  to  consummate  the
transactions contemplated by this Agreement,


                                       12
<PAGE>

including obtaining all Consents that are required to permit the consummation of
the transactions  contemplated by this Agreement.  In addition, each Buyer shall
use its  reasonable  efforts  to  cooperate  with the  Sellers  in  causing  the
conditions  precedent  set  forth  in  Articles  6 and 7 to occur on or prior to
August  24,  2002.  In the event  that the  Parties  do not  receive  all of the
Consents  necessary or advisable to consummate the transactions  contemplated by
this Agreement,  upon the request of the Sellers,  the Buyers shall negotiate in
good faith with the Sellers to restructure the transactions contemplated by this
Agreement in such a manner as to enable the transactions  contemplated hereby to
be consummated  without the receipt of such  Consents,  provided that the Buyers
shall have no obligation  to agree to any such  restructured  transactions  that
have or could  reasonably be expected to have an adverse impact on the Buyers or
on the economics of the  transactions to the Buyers taken as a whole as compared
to the  economics  of the  transactions  to the Buyers taken as a whole prior to
such restructuring.

      5.2 Surety  Bonds,  Letters of Credit,  Guarantees,  Etc. AES Cayman shall
cause all  surety  bonds,  letters of credit,  guarantees,  equity  contribution
agreements, support agreements, comfort letters and other similar agreements and
arrangements  that the Sellers or their Affiliates have entered into or provided
on  behalf  of any  of  the  Companies  or  their  Affiliates  and  that  remain
outstanding on the First Closing Date (collectively, the "Seller Agreements") to
be  replaced  or  terminated  as of the  First  Closing  Date  with  no  further
obligation or liability to the Sellers or their  Affiliates.  Schedule 5.2 lists
all of the Seller Agreements known to the Sellers.

      5.3 Directors' and Officers' Indemnification.

            (a)  Survival  of   Indemnification.   To  the  fullest  extent  not
prohibited by Applicable  Law, from and after the First Closing Date, AES Cayman
shall  cause  all  rights  to  indemnification  now  existing  in  favor  of the
directors,  officers,  managers  and  syndics  of the  Companies  identified  on
Schedule  2.4(b)(ii)  and Schedule  2.6(b) and any former  directors,  officers,
managers and syndics of the Companies that were nominees of the Sellers or their
Affiliates  with  respect to their  activities  as such prior to or on the First
Closing Date, as provided in their respective articles of incorporation, bylaws,
other  organizational  documents or indemnification  agreements in effect on the
date of such activities or otherwise in effect on the date of this Agreement, to
survive the First  Closing and to continue in full force and effect for a period
of not less than six years from the First  Closing Date,  provided  that, in the
event any claim or claims are asserted or made within such six year period,  all
such rights to  indemnification in respect of any claim or claims shall continue
until final disposition of such claim or claims.

            (b)  Successors.  In the event that any of the  Companies  or any of
their respective  successors or assigns (i) consolidates with or merges into any
other Person and is not the  continuing  or surviving  corporation  or entity of
such  consolidation or merger or (ii) transfers all or substantially  all of its
assets to any Person, then AES Cayman shall cause proper provision to be made so
that the  successors and assigns of the Companies  shall assume the  obligations
set forth in this Section 5.3.


                                       13
<PAGE>

      5.4 Corporate  Reorganization.  The Buyers and their Affiliates shall take
the actions  necessary in order to complete the corporate  reorganization of the
Buyers and their  Affiliates prior to the First Closing as set forth on Schedule
5.4.

      5.5 Payment of Amounts Owed to the Sellers.

            (a) Within five  Business  Days of the date of this  Agreement,  AES
Cayman  shall pay or cause  its  Affiliates  to pay,  as the case may be, to the
Sellers or their Affiliates,  as the case may be, in Dollars, the amounts listed
on Schedule 5.5 that are owed to the Sellers or their Affiliates.

            (b) Between the date of this  Agreement  and the First Closing Date,
AES Cayman shall pay or cause its  Affiliates to pay, as the case may be, to the
Sellers and their Affiliates,  in Dollars, any amounts due or that become due to
the Sellers and their  Affiliates in connection  with the Companies  during such
period, if any.

      5.6  Post-First  Closing  Payment.  If the net  proceeds  received  by the
Sellers  from the sale of the AES  shares  after  the  payment  of all  expenses
related to the sale of the AES Shares (including sales or brokerage commissions)
shall be less  than the AES  Shares  Amount,  AES  Cayman  shall,  within  three
Business  Days of the  Sellers'  written  request,  pay to the  Sellers  by wire
transfer of immediately  available  funds the difference  between the AES Shares
Amount and the net  proceeds  received by the Sellers  from such sale;  provided
that  if the  Sellers  do not  sell  all of the AES  Shares  during  the  period
commencing  on and  including the First Closing Date and ending on and including
the third  Trading Day after the First  Closing  Date,  AES Cayman's  obligation
under this  Section 5.6 shall be  calculated  as if the AES Shares that were not
sold by the Sellers during such period had been sold at the AES Weighted Average
Sales Price.

      5.7  Transfer  of  Operatorship.  Within  30  days  of the  date  of  this
Agreement,  the Buyers  shall apply to the Ministry of Public Works and Services
(the  "Ministry") of the Province of Buenos Aires or any other entity that might
replace the Ministry in the future as the  Province's  energy  regulator for the
approval of the  appointment  effective as of the Second Closing of an Affiliate
of The  AES  Corporation  as the  operator  of EDEN  and  EDES  and the  removal
effective as of the Second Closing of PSEG Americas Operating as the operator of
EDEN and EDES.

      5.8 Shareholders'  and Quotaholders  Meetings;  Amendment of By-laws.  The
Buyers shall cause to be called shareholders' or quotaholders'  meetings, as the
case may be, of the  Companies  to approve the actions of  directors or managers
appointed by the Sellers and, with respect to the Quota Companies,  to amend the
by-laws of the Quota Companies to reflect the transfer of the quotas,  to change
the name of any Companies and Quota Companies  bearing the PSEG name and to duly
register the amended by-laws with the Public Registry of Commerce.

      5.9  Antitrust  Filing.  Within  15  Business  Days  of the  date  of this
Agreement,  the Buyers shall  prepare and file or cause to be prepared and filed
jointly  with  the  Sellers  a   consultative   opinion  with  the   appropriate
Governmental  Authority  relating to  compliance  with  Argentine  antitrust law
number  25.156 and  related  regulations  in  connection  with the  transactions
contemplated by this Agreement.  The Buyers shall also prepare and file or cause
to be prepared and filed any other  documents or materials  that may be required
or requested by any


                                       14
<PAGE>

Governmental  Authority  relating to  compliance  with  Argentine  antitrust law
number 25.156 and related regulations.

      5.10 Termination of Certain Agreements. (a) On the First Closing Date, the
Buyers and AES  Operations  shall or shall cause their  Affiliates to enter into
agreements (i) terminating  the Shareholder  Agreements that do not terminate by
their terms on the First  Closing  Date,  other than the  Amended  and  Restated
EDEN/EDES Shareholders Agreement, and (ii) confirming in writing the termination
of the Shareholder Agreements that terminate by their terms on the First Closing
Date.  (b) On the Second  Closing  Date,  the Buyers  shall or shall cause their
Affiliates  to enter  into  agreements  terminating  the  Amended  and  Restated
EDEN/EDES  Shareholders  Agreement  and  terminating  or,  if  permitted  by the
Ministry,  assigning to the  operator of EDEN and EDES  appointed by the Buyers,
the Technical Assistance Agreements and the Operating Support Agreements.

                                   ARTICLE 6

                      CONDITIONS PRECEDENT TO FIRST CLOSING

      6.1 Conditions to Each Party's Obligations.  The respective obligations of
the Parties to consummate the  transactions  contemplated  to occur at the First
Closing are subject to the  satisfaction at or prior to the First Closing of the
following  conditions  unless  waived in  writing,  in whole or in part,  by the
Parties:

            (a) Consents.  All Consents by, or  declarations or filings with, or
expirations of waiting periods imposed by, any  Governmental  Authority or other
third party necessary for the consummation of the  transactions  contemplated by
this Agreement to occur on or prior to the First Closing (including the Consents
listed on Schedule  3.1(c) and Schedule  3.2(c) that are  required  prior to the
First Closing) shall have been obtained, filed, or occurred, as the case may be;
provided,  however,  if the Buyers are unable to obtain the Consents required to
complete the corporate  reorganization  of the Buyers and their Affiliates prior
to the First  Closing as set forth on  Schedule  5.4 on or before  December  31,
2001, the Buyers will either abandon such corporate  reorganization  and acquire
the  Interests  pursuant  to the  terms of this  Agreement  or  restructure  the
corporate  reorganization  of the Buyers and their  Affiliates  in a manner that
allows the Buyers to obtain the  required  Consents,  provided  that the Sellers
shall have no  obligation to agree to any such  restructuring  that has or could
reasonably  be  expected  to have an  adverse  impact on the  Sellers  or on the
economics of the transactions to the Sellers taken as a whole as compared to the
economics  of the  transactions  to the  Sellers  taken as a whole prior to such
restructuring.

            (b) No Injunctions or Restraints.  No temporary  restraining  order,
preliminary  or  permanent  injunction,  or other  order  issued by any court of
competent  jurisdiction or other legal  restraint or prohibition  preventing the
consummation of the transactions contemplated hereby shall be in effect.

            (c) No Action.  No action  shall  have been  taken nor any  statute,
rule, or regulation shall have been enacted by any  Governmental  Authority that
makes the consummation of the transactions contemplated hereby illegal.


                                       15
<PAGE>

            (d) Antitrust Approval. If required by the appropriate  Governmental
Authority, the Argentina Antitrust Approval shall have been obtained.

      6.2 Conditions to Obligations of the Buyers.  The obligation of the Buyers
to consummate  the  transactions  contemplated  to occur at the First Closing is
subject to the  satisfaction  at or prior to the First  Closing of the following
conditions unless waived in writing, in whole or in part, by the Buyers:

            (a)   Representations   and  Warranties.   The  representations  and
warranties of the Sellers set forth in this Agreement  shall be true and correct
in all material  respects  (provided that any  representation or warranty of the
Sellers  contained herein that is qualified by a materiality  standard shall not
be  further  qualified  hereby) as of the date of this  Agreement  and as of the
First  Closing  as though  made at and as of the First  Closing,  and the Buyers
shall have received a certificate to that effect signed on behalf of each Seller
by an officer of that Seller.

            (b) Performance of Obligations.  The Sellers shall have performed in
all material  respects  (provided  that any covenant or agreement of the Sellers
contained  herein  that is  qualified  by a  materiality  standard  shall not be
further qualified hereby) all obligations required to be performed by them under
this  Agreement  at or prior to the First  Closing,  and the  Buyers  shall have
received a  certificate  to that  effect  signed on behalf of each  Seller by an
officer of that Seller.

            (c) Closing Deliveries. All documents, instruments,  certificates or
other items required to be delivered to the Buyers and AES  Operations  pursuant
to Section 2.4 shall have been delivered.

            (d)  Political  Risk Event.  A  Political  Risk Event shall not have
occurred and be continuing.

      6.3  Conditions  to  Obligations  of the Sellers.  The  obligation  of the
Sellers  to  consummate  the  transactions  contemplated  to occur at the  First
Closing is subject to the  satisfaction  at or prior to the First Closing of the
following  conditions  unless  waived in  writing,  in whole or in part,  by the
Sellers.

            (a)   Representations   and  Warranties.   The  representations  and
warranties of the Buyers and AES Operations set forth in this Agreement shall be
true and correct in all material respects  (provided that any  representation or
warranty of the Buyers or AES Operations contained herein that is qualified by a
materiality  standard shall not be further  qualified  hereby) as of the date of
this Agreement and as of the First Closing as though made at and as of the First
Closing, and the Sellers shall have received a certificate to that effect signed
on behalf of each Buyer and AES  Operations  by an officer of that Buyer and AES
Operations, respectively.

            (b) Performance of Obligations.  The Buyers and AES Operations shall
have performed in all material respects (provided that any covenant or agreement
of the  Buyers  or AES  Operations  contained  herein  that  is  qualified  by a
materiality  standard  shall not be further  qualified  hereby) the  obligations
required to be  performed  by it under this  Agreement  at or prior to the First
Closing, and the Sellers shall have received a certificate to that effect signed
on


                                       16
<PAGE>

behalf of each  Buyer and AES  Operations  by an  officer  of that Buyer and AES
Operations, respectively.

            (c) Closing Deliveries. All documents, instruments,  certificates or
other items  required  to be  delivered  to the Sellers  pursuant to Section 2.4
shall have been delivered.

            (d) Note Purchase Agreement.  All of the conditions to closing under
Article 4 of the Note Purchase  Agreement shall have been satisfied or waived in
writing by the Sellers.

                                   ARTICLE 7

                     CONDITIONS PRECEDENT TO SECOND CLOSING

      7.1  Conditions  to  Obligations  of AES Cayman,  CEMAS and PSEG  Americas
Operating.  The respective  obligations  of AES Cayman,  CEMAS and PSEG Americas
Operating to consummate  the  transactions  contemplated  to occur at the Second
Closing are subject to the satisfaction at or prior to the Second Closing of the
following  conditions  unless  waived in  writing,  in whole or in part,  by AES
Cayman, CEMAS and PSEG Americas Operating:

            (a) First Closing. The First Closing shall have occurred.

            (b)  Ministry  Approval.   CEMAS,  PSEG  Americas  Operating,   PSEG
Operating  Argentina,  EDEN and EDES shall have  received  the  approval  of the
Ministry for the  transfer and  assignment  of the  Additional  Interests to AES
Cayman.

      7.2 Conditions to Obligations of AES Cayman.  The obligation of AES Cayman
to consummate the  transactions  contemplated  to occur at the Second Closing is
subject to the  satisfaction  at or prior to the Second Closing of the following
conditions unless waived in writing, in whole or in part, by AES Cayman:

            (a) Additional  Interests.  CEMAS and PSEG Americas  Operating shall
own the Additional  Interests free and clear of any Liens,  other than the Liens
disclosed on Schedule 3.1(d).

            (b) Closing Deliveries. All documents, instruments,  certificates or
other items required to be delivered to AES Cayman pursuant to Section 2.6 shall
have been delivered.

      7.3 Conditions to Obligations  of CEMAS and PSEG Americas  Operating.  The
obligations of CEMAS and PSEG Americas  Operating to consummate the transactions
contemplated  to occur at the Second Closing are subject to the  satisfaction at
or prior to the Second  Closing of the  following  conditions  unless  waived in
writing, in whole or in part, by CEMAS and PSEG Americas Operating:

            (a) Transfer of  Operatorship.  PSEG Americas  Operating  shall have
been  removed  as the  operator  of EDEN and EDES  and an  Affiliate  of The AES
Corporation shall have been approved by the Ministry as the operator of EDEN and
EDES.


                                       17
<PAGE>

            (b) All documents, instruments, certificates or other items required
to be delivered  to CEMAS and PSEG  Americas  Operating  pursuant to Section 2.6
shall have been delivered.

                                   ARTICLE 8

                                   TERMINATION

      8.1  Termination.  This  Agreement  may be  terminated  prior to the First
Closing:

            (a) by mutual written consent of the Sellers and the Buyers;

            (b) by either the Sellers,  on the one hand,  or the Buyers,  on the
other hand, by delivering written notice to the other Party;

                  (i) if a court of competent jurisdiction or other Governmental
      Authority shall have issued an order, decree, or ruling or taken any other
      action (which order,  decree or ruling the parties  hereto shall use their
      reasonable  efforts  to  lift),  in  each  case  permanently  restraining,
      enjoining, or otherwise prohibiting the transactions  contemplated by this
      Agreement and the other  Transaction  Documents,  and such order,  decree,
      ruling, or other action shall have become final and nonappealable; or

                  (ii) if the First Closing shall not have occurred on or before
      August 24,  2002;  provided,  however,  that the right to  terminate  this
      Agreement  under this  clause  (iii) shall not be  available  to any Party
      whose breach of this  Agreement has been the cause of, or resulted in, the
      failure of the First Closing to occur on or before such date;

            (c) by the Buyers, upon written notice to the Sellers, if either (i)
there has been a violation  or breach by the  Sellers of any of the  agreements,
representations  or warranties of the Sellers contained in this Agreement which,
if not cured,  would cause the  conditions set forth in Sections 6.1 and 6.2 not
to be satisfied and such breach is not cured by the earlier of the First Closing
Date or the date 30 days after  receipt by the Sellers of notice  specifying  in
reasonable  detail the  nature of such  breach,  unless  the  Buyers  shall have
previously  waived such  breach in writing or (ii) a Political  Risk Event shall
have occurred; and

            (d) by the Sellers,  upon written notice to the Buyers, if there has
been  a  violation   or  breach  by  the  Buyers  of  any  of  the   agreements,
representations or warranties of the Buyers contained in this Agreement,  which,
if not cured,  would cause the  conditions set forth in Sections 6.1 and 6.3 not
to be satisfied and such breach is not cured by the earlier of the First Closing
Date or the date 30 days after  receipt by the  Buyers of notice  specifying  in
reasonable  detail the nature of such  breach,  unless  the  Sellers  shall have
previously waived such breach in writing.

      The right of any Party hereto to terminate this Agreement pursuant to this
Section 8.1 shall remain  operative  and in full force and effect  regardless of
any  investigation  made  by or on  behalf  of  any  Party  hereto,  any  Person
controlling any such party or any of their respective


                                       18
<PAGE>

officers, directors, employees, accountants, consultants, legal counsel, agents,
or  other  representatives  whether  prior  to or after  the  execution  of this
Agreement.  Notwithstanding  anything in the foregoing to the contrary, no Party
that is in material breach of this Agreement shall be entitled to terminate this
Agreement except with the consent of the other Party.

      8.2 Effect of  Termination.  In the event of termination of this Agreement
pursuant to Section  8.1,  this  Agreement  shall become null and void and of no
further  effect and there shall be no liability or  obligation  hereunder on the
part  of the  Sellers  or the  Buyers  or any  of  their  respective  directors,
officers, employees, Affiliates, controlling Persons, agents or representatives,
except that the Sellers,  on the one hand, or the Buyers,  on the other hand, as
the  case  may be,  may  have  liability  to the  other  Party  if the  basis of
termination is on account of a material  breach by any of such Parties of one or
more of the provisions of this Agreement.  Notwithstanding the foregoing, in the
event of any termination of this Agreement,  the provisions of Sections 4.5, 8.2
and 10.5 shall survive any such termination.

                                   ARTICLE 9

                                 INDEMNIFICATION

      9.1 Indemnification of the Buyers. From and after the First Closing,  each
of the Sellers  agree,  jointly and  severally,  to  indemnify,  defend and hold
harmless  the  Buyer  Indemnified  Parties  from and  against  any and all Buyer
Indemnified Costs.

      9.2 Indemnification of the Sellers.  From and after the First Closing, AES
Cayman  agrees to  indemnify,  defend and hold  harmless the Seller  Indemnified
Parties from and against any and all Seller Indemnified Costs.

      9.3  Defense  of  Third-Party   Claims.   A  Person  who  is  entitled  to
indemnification under this Article 9 (an "Indemnified Party") shall give written
notice to any Person who is  obligated  to  provide  indemnification  under this
Article  9 (an  "Indemnifying  Party"),  within  30  days  after  it has  actual
knowledge of commencement  or assertion of any action,  proceeding,  demand,  or
claim by a third  party  (collectively,  a  "third-party  action") in respect of
which such Indemnified Party shall seek indemnification  hereunder.  Any failure
so to notify an  Indemnifying  Party shall not relieve such  Indemnifying  Party
from any liability that it, he, or she may have to such Indemnified  Party under
this Article 9 unless the failure to give such notice  materially  and adversely
prejudices such Indemnifying  Party. The Indemnifying Party shall have the right
to assume  control of the  defense  of,  settle,  or  otherwise  dispose of such
third-party  action  on such  terms  as it  deems  appropriate  consistent  with
Applicable Laws and its obligations hereunder; provided, however, that:

            (a) The Indemnified Party shall be entitled,  at its own expense, to
participate in the defense of such third-party action (provided,  however,  that
the  Indemnifying  Party  shall  pay  the  reasonable  attorneys'  fees  of  the
Indemnified  Party if (i) the  employment  of separate  counsel  shall have been
authorized in writing by such Indemnifying  Party in connection with the defense
of such third-party  action, or (ii) the Indemnified  Party's counsel shall have
advised  the  Indemnified  Party  in  writing,  with  a  copy  delivered  to the
Indemnifying Party, that there is a


                                       19
<PAGE>

conflict of interest that could make it inappropriate under applicable standards
of professional conduct to have common counsel).

            (b) The  Indemnifying  Party shall obtain the prior written approval
of the  Indemnified  Party  before  entering  into  or  making  any  settlement,
compromise,  admission,  or  acknowledgment  of the validity of such third-party
action or any  liability  in respect  thereof if,  pursuant to or as a result of
such settlement,  compromise, admission, or acknowledgment,  injunctive or other
equitable  relief would be imposed against the  Indemnified  Party or if, in the
reasonable  opinion  of the  Indemnified  Party,  such  settlement,  compromise,
admission,  or  acknowledgment  could  have a  material  adverse  effect  on its
business;

            (c) No Indemnifying Party shall consent to the entry of any judgment
or enter into any  settlement  that does not  include as an  unconditional  term
thereof the giving by each claimant or plaintiff to each Indemnified  Party of a
release from all liability in respect of such third-party action; and

            (d) The  Indemnifying  Party shall not be  entitled to control  (but
shall be entitled to  participate at its own expense in the defense of), and the
Indemnified  Party shall be entitled to have sole control  over,  the defense or
settlement,  compromise,  admission, or acknowledgment of any third-party action
(i) as to which the  Indemnifying  Party  fails to assume the  defense  within a
reasonable length of time or (ii) to the extent the third-party  action seeks an
order,  injunction,  or other  equitable  relief against the  Indemnified  Party
which,  if  successful,   would   materially   adversely  affect  the  business,
operations,  assets, or financial condition of the Indemnified Party;  provided,
however,  that the  Indemnified  Party  shall  make no  settlement,  compromise,
admission,  or  acknowledgment  that would give rise to liability on the part of
any  Indemnifying  Party without the prior written consent of such  Indemnifying
Party, such consent not to be unreasonably withheld.

      The Parties hereto shall extend reasonable  cooperation in connection with
the  defense  of any  third-party  action  pursuant  to this  Article 9 and,  in
connection therewith, shall furnish such records, information, and testimony and
attend such conferences, discovery proceedings, hearings, trials, and appeals as
may be reasonably requested.

      9.4 No Duplication.  Any liability for indemnification  hereunder shall be
determined  without  duplication  of  recovery  by  reason of the state of facts
giving  rise  to  such  liability   constituting  a  breach  of  more  than  one
representation, warranty, covenant or agreement.

      9.5 Contributory Obligations.

            (a) Notwithstanding  anything to the contrary in this Agreement, (i)
the Indemnifying Party shall only indemnify the Indemnified Party for damages to
the  extent  not  covered  by  insurance,  and  (ii)  the  Indemnifying  Party's
indemnification  obligations shall be subject to and reduced (or eliminated,  as
the case may be) to the extent any court of  competent  jurisdiction  determines
that an Indemnified Party was partially or wholly at fault due to its negligence
or other wrongful act or to the extent that strict  liability is imposed upon an
Indemnified Party as a matter of law.


                                       20
<PAGE>

            (b)  In  the  event  that  both  the  Buyers  and  the  Sellers  are
adjudicated  negligent or otherwise at fault or strictly  liable  without  fault
with respect to damage or injuries  sustained by the third party  claimant,  the
contractual  obligation of  indemnification  under this Agreement shall continue
but the Buyers and the Sellers shall indemnify the other only for the percentage
of responsibility for the damage or injuries adjudicated to be attributed to it.
In such a situation, it is intended that, to the extent either the Buyers or the
Sellers  pay such  third  party  claimant  for its costs,  losses,  liabilities,
expenses and/or judgments  attributed to the percentage of negligence,  fault or
liability of the other, these obligations of indemnification shall function as a
contractual  arrangement  of  contribution.   This  contractual  arrangement  of
contribution  shall survive  settlement of the underlying  third party claim and
shall apply to  voluntary  settlements  made by either the Buyers or the Sellers
with the third party.

                                   ARTICLE 10

                               GENERAL PROVISIONS

      10.1  Survival  of  Representations  and  Warranties.  Regardless  of  any
investigation  at any time made by or on  behalf  of any Party  hereto or of any
information any Party may have in respect thereof,  each of the  representations
and  warranties  made  hereunder or pursuant  hereto or in  connection  with the
transactions  contemplated hereby shall survive the First Closing but, except as
provided in Section 8.2, shall not survive any  termination  of this  Agreement.
Except as  otherwise  provided in this Section  10.1,  the  representations  and
warranties  set  forth in this  Agreement  shall  terminate  as of the  close of
business on the second  anniversary of the First Closing Date,  except that this
time limitation shall not apply to any claims for fraud or the representation of
the Sellers under Sections 3.1(d), 3.1(g)(v) and 3.1(h)(v),  which shall survive
for  the  applicable  statute  of  limitations  period.  Following  the  date of
termination  of a  representation  or  warranty,  no claim can be  brought  with
respect to a breach of such  representation  or warranty,  but such  termination
shall not affect any claim for a breach of a representation or warranty that was
asserted before the date of termination.

      10.2 Further Actions.

            (a) After the First Closing Date, each of the Sellers and the Buyers
shall execute and deliver such other certificates,  agreements, conveyances, and
other documents,  and take such other action, as may be reasonably  requested by
the  other  Party in order  to  consummate  more  effectively  the  transactions
contemplated to occur at the First Closing, including to transfer and assign to,
and vest in (i) the Buyers, the Interests,  excluding the Additional  Interests,
and (ii) the Sellers, the AES Shares under the terms of this Agreement.

            (b) After the  Second  Closing  Date,  each of the  Sellers  and AES
Cayman  shall   execute  and  deliver  such  other   certificates,   agreements,
conveyances,  and  other  documents,  and  take  such  other  action,  as may be
reasonably  requested by the other Party in order to consummate more effectively
the  transactions  contemplated  to occur at the Second  Closing,  including  to
transfer and assign to, and vest in AES Cayman,  the Additional  Interests under
the terms of this Agreement.


                                       21
<PAGE>

      10.3 Amendment, Modification and Waiver. This Agreement may not be amended
except by an instrument in writing signed by the Parties hereto.  Any failure of
the Sellers on the one hand,  or the Buyers,  on the other hand,  to comply with
any obligation, covenant, agreement, or condition contained herein may be waived
only if set forth in an instrument in writing  signed by the Party or Parties to
be bound  thereby,  but such waiver or failure to insist upon strict  compliance
with such  obligation,  covenant,  agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any other failure.

      10.4  Severability.  If any term or other  provision of this  Agreement is
invalid,  illegal, or incapable of being enforced by any rule of Applicable Law,
or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full force and effect so long as the  economic  or legal
substance of the transactions contemplated herein are not affected in any manner
materially  adverse to any Party. Upon such determination that any term or other
provision  is invalid,  illegal,  or incapable  of being  enforced,  the Parties
hereto shall  negotiate  in good faith to modify this  Agreement so as to effect
the  original  intent of the  Parties  as  closely  as  possible  in a  mutually
acceptable  manner  in  order  that the  transactions  contemplated  herein  are
consummated as originally contemplated to the fullest extent possible.

      10.5 Expenses and Obligations.  Except as otherwise  expressly provided in
this Agreement, all costs and expenses incurred by, or on behalf of, the Parties
hereto in  connection  with,  or in  anticipation  of,  this  Agreement  and the
consummation of the transactions  contemplated  hereby shall be borne solely and
entirely by the Party which has incurred such expenses.  Any transfer tax, sales
tax,  withholding  tax, use tax,  stamp tax, stock transfer tax or other similar
tax, including any penalties, interest and additions to tax imposed by reason of
the  transactions  contemplated  by this Agreement shall be borne by the Buyers;
provided,  however,  that the Buyers shall have no liability with respect to any
such amounts  attributable to any taxable gain of the Sellers in connection with
the sale,  disposition  or conveyance  of any of the Interests  pursuant to this
Agreement as determined by a court of competent jurisdiction pursuant to a final
non-appealable judgment.

      10.6 Parties in Interest. This Agreement shall be binding upon and, except
as provided  below,  inure  solely to the benefit of each Party hereto and their
successors and permitted,  assigns,  and nothing in this  Agreement,  express or
implied,  is  intended  to confer  upon any other  Person  (other than the Buyer
Indemnified Parties and Seller Indemnified Parties as provided in Article 9) any
rights  or  remedies  of any  nature  whatsoever  under  or by  reason  of  this
Agreement).

      10.7 Notices. All notices and other  communications  hereunder shall be in
writing  and  shall be  deemed  given  if  delivered  personally  or  mailed  by
registered or certified  mail (return  receipt  requested) to the parties at the
following  addresses (or at such other address for a party as shall be specified
by like notice):


                                       22
<PAGE>

            (a)   If to the Sellers:

                  c/o PSEG  Americas  220  Alhambra  Circle,  Suite 800
                  Coral Gables, FL 33134 U.S.A.
                  Attn.:  President
                  Attn.:  Regional General Counsel
                  Fax No.: (305) 913-3035

                        with a copy to:

                        PSEG Americas - Argentina
                        Cerrito 1050, Piso 4
                        1010 Capital Federal
                        Buenos Aires, Argentina
                        Attn.:  Business Manager - Argentina
                        Fax No.: 5411-4816-4403

            (b)   If to the Buyers:

                  c/o AES Andes
                  AV. Libertador 602, 13th Floor
                  C1001 ABT - Bs. - As. - Argentina
                  Attn.:  Joseph C. Brandt
                  Fax No.: 54-11-4816-6605

                        with a copy to:

                        The AES Corporation
                        1001 N. 19th Street
                        Arlington, Virginia 22209
                        Attn.: Joseph C. Brandt
                        Fax No.: (703) 528-4510

                        Latham & Watkins
                        233 S. Wacker Drive, Suite 5800
                        Chicago, IL 60606-6401
                        Attn.:  David K. Rathgeber
                        Fax No.:  (312) 993-9767

                  Estudio O'Farrell
                  Av. de Mayo 645/651
                  Buenos Aires, Argentina 1084
                  Attn.:  Uriel F. O'Farrell
                  Fax No.:  54-11-4331-1659


                                       23
<PAGE>

All notices,  requests or  instructions  given in accordance  herewith  shall be
deemed given (i) on the date of delivery, if hand delivered, (ii) on the date of
receipt, if telecopied,  (iii) three business days after the date of mailing, if
mailed by registered or certified mail, return receipt  requested,  and (iv) one
Business  Day after the date of  sending,  if sent by  Federal  Express or other
recognized overnight courier.

      10.8 Counterparts. This Agreement may be executed and delivered (including
by facsimile  transmission) in one or more  counterparts,  all of which shall be
considered  one and the same  agreement and shall become  effective  when one or
more  counterparts  have been signed by each of the Parties and delivered to the
other  Parties,  it being  understood  that all  Parties  need not sign the same
counterpart.

      10.9  Entire  Agreement.  This  Agreement  (which  term shall be deemed to
include the exhibits and schedules hereto and the other certificates,  documents
and instruments  delivered  hereunder)  constitutes the entire  agreement of the
Parties  hereto  and  supersedes  all prior  agreements,  letters  of intent and
understandings,  both  written and oral,  among the Parties  with respect to the
subject matter hereof.  There are no representations or warranties,  agreements,
or covenants other than those expressly set forth in this Agreement.

      10.10 Governing Law; Choice of Forum. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE  WITH AND  GOVERNED  BY THE  INTERNAL  LAWS OF THE  STATE OF NEW YORK
WITHOUT  REGARD TO THE CONFLICTS OF LAW  PRINCIPLES  THEREOF (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL  OBLIGATIONS LAW). THE PARTIES HEREBY IRREVOCABLY
SUBMIT  TO THE  JURISDICTION  OF ANY  STATE OR  FEDERAL  COURT IN NEW YORK  WITH
RESPECT  TO ANY  ACTION  OR  PROCEEDING  ARISING  OUT  OF OR  RELATING  TO  THIS
AGREEMENT.  THE PARTIES HEREBY  IRREVOCABLY  AGREE THAT ALL CLAIMS IN RESPECT OF
SUCH ACTION OR  PROCEEDING  SHALL BE HEARD AND  DETERMINED  IN THE COURTS OF THE
STATE OF NEW YORK IN THE  COUNTY  OF NEW YORK OR OF THE  UNITED  STATES  FOR THE
SOUTHERN DISTRICT OF NEW YORK.

      10.11 Jury Trial Waiver.  TO THE EXTENT  PERMITTED BY APPLICABLE LAW, EACH
OF THE  PARTIES  IRREVOCABLY  WAIVES  ALL RIGHT OF TRIAL BY JURY IN ANY  ACTION,
PROCEEDING OR  COUNTERCLAIM  ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY MATTER ARISING HEREUNDER.

      10.12 Public Announcements.  Except as otherwise agreed to by the Parties,
no Party shall issue any statement or press release or otherwise make any public
statement  with  respect  to this  Agreement  or the  transactions  contemplated
hereby,  except as in the  reasonable  judgment of such Party may be required by
(a) the  Securities  Act, the Exchange  Act or other  Applicable  Law or (b) any
listing  agreement  with  any  national  securities  exchange  or  the  National
Association of Securities Dealers, Inc., in which case the Parties shall consult
with each other before issuing any press release or otherwise  making any public
statement with respect to this Agreement or the


                                       24
<PAGE>

transactions contemplated hereby as to the language of any such press release or
public statement.

      10.13 Assignment. Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by any of the Parties hereto, whether
by operation  of law or  otherwise,  except that prior to the First  Closing the
Buyers may assign their rights, interests, and obligations hereunder to a wholly
owned subsidiary of The AES Corporation so long as such assignment does not have
and could not reasonably be expected to have an adverse impact on the Sellers or
on the economics of the transactions contemplated hereby to the Sellers taken as
a whole as compared to the economics of the transactions  contemplated hereby to
the  Sellers  taken as a whole  prior to such  assignment  and  after  the First
Closing the Buyers may assign their rights, interests, and obligations hereunder
in  connection  with a  transaction  permitted  under  Section  10.2 of the Note
Purchase Agreement.

      10.14 Interpretation.  References herein to the knowledge of any Party, or
matters or  information  known to any such Party  mean the actual  knowledge  or
conscious  awareness,  after reasonable  investigation and due inquiry,  of such
Party.

                  [Remainder of page intentionally left blank]


                                       25
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first written above.

                                        CEMAS CORPORATION

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        LA PLATA I, INC.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        PSEG AMERICAS OPERATING COMPANY

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        PSEG AMERICAS INC.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        PSEG AMERICAS LTD.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        PSEG CAYMAN AMERICAS V COMPANY

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________


<PAGE>

                                        AES ARGENTINA INVESTMENTS, LTD.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        LA PLATA III, INC.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________

                                        AES ARGENTINA OPERATIONS LTD.

                                        By:    _________________________________
                                        Name:  _________________________________
                                        Title: _________________________________


<PAGE>

                                     ANNEX I
                             COMPANIES AND INTERESTS

<TABLE>
<CAPTION>
  SELLER                          BUYER                 COMPANY                          INTERESTS
  ------                          -----                 -------                          ---------
<S>                             <C>               <C>                          <C>
                                                        [CTSN]

CEMAS                           AES Cayman        Inversora de San Nicolas,    3,726,386 shares of Class C Stock
                                                            S.A.

                                                       [EDELAP]

La Plata I                     La Plata III         La Plata Partners LP       33.33% limited partner interest

PSEG Americas Inc.             La Plata III           La Plata II, Inc.        3.4 shares of common stock, par value
                                                                               $1.00 per share;

                                                                               0.34 shares of preferred stock, par
                                                                               value $10.00 per share(1)

PSEG Americas Ltd.              AES Cayman            Wildwood I, Ltd.         50,000 shares

                                                      [EDEN/EDES]

PSEG Americas Operating         AES Cayman      PSEG Operating Argentina S.A.  2,108,545 ordinary shares(2)

CEMAS                           AES Cayman      PSEG Operating Argentina S.A.  176 ordinary shares(3)
</TABLE>

----------
(1)   Pursuant to the Trust Agreement,  dated as of June 24, 1998, as amended on
      November 6, 1998, PSEG Americas Inc.  transferred to the Wilmington  Trust
      Company,  as  Trustee of a Delaware  Trust  (the  "Trustee")  certificates
      representing  one share of  preferred  stock of La Plata I owned by it and
      0.34 of a share of  preferred  stock  of La Plata II owned by it,  thereby
      conveying  legal  title  in such  preferred  stock  to the  Trustee.  PSEG
      Americas Inc. retains its beneficial interest in such preferred stock, and
      will transfer this beneficial interest to AES.

(2)   Of these shares,  210,834  shares  (9.9982%)  will be  transferred  to AES
      Operations at the First  Closing as  consideration  for the  repurchase by
      PSEG  Americas  Operating of 10,057,589  participating  shares held by AES
      Operations.  The beneficial  ownership in the remaining  1,893,711  shares
      (89.9935%)  will be transferred by usufruct on the First Closing Date. The
      legal  title to the  remaining  shares will be  transferred  on the Second
      Closing Date.

(3)   All of the  beneficial  ownership in these shares will be  transferred  by
      usufruct on the First Closing  Date.  The legal title to these shares will
      be transferred on the Second  Closing Date.




                                      I-1
<PAGE>

<TABLE>
<CAPTION>
  SELLER                          BUYER                 COMPANY                          INTERESTS
  ------                          -----                 -------                          ---------
<S>                             <C>               <C>                          <C>

                                                       [PARANA]

PSEG Cayman V                   AES Cayman              Shazia S.R.L.          166 Quotas;  an undivided  33.33% in one
                                                                               Quota(4)

PSEG Cayman V                   AES Cayman      AES Parana Operations S.R.L.   166   Quotas;    an   undivided   33.33%
                                                                               interest in one Quota(4)

PSEG Cayman V                   AES Cayman            AES Parana S.C.A.        3,960 shares

PSEG Cayman V                   AES Cayman           AES Parana Gas S.A.       39,996 shares

PSEG Cayman V                   AES Cayman       AES Parana Propiedades S.A.   39,996 shares
</TABLE>

----------

(4)   The  other  undivided  66.67%  interest  in the one  Quota is owned by AES
      Parana I Ltd


                                      I-2
<PAGE>

                                    ANNEX II

                                   DEFINITIONS

      The following terms shall have the following meanings in this Agreement:

            "Additional  Interests"  means  the (i)  1,893,711  ordinary  shares
(89.9935%) of PSEG  Operating  Argentina  S.A., an Argentine  sociedad  anonima,
owned by PSEG Americas Operating, (ii) the 176 ordinary shares in PSEG Operating
Argentina S.A., an Argentine sociedad anonima, owned by CEMAS.

            "AES  Argentina" has the meaning set forth in the first paragraph of
this Agreement.

            "AES Cayman Notes" means the  promissory  notes of AES Cayman in the
aggregate  principal  amount of  $338,800,000  issued  under  the Note  Purchase
Agreement.

            "AES  Common  Stock"  means the common  stock,  par value  $0.01 per
share, of The AES Corporation.

            "AES Shares" means the number of shares of AES Common Stock equal to
(a) the AES Shares Amount divided by (b) the Closing Price.

            "AES  Shares  Amount"  means the sum of (a)  $37,200,000  and (b) an
amount equal to any  contributions  that the Sellers or any of their  Affiliates
have made,  or will make,  to the  capital  of any of the  Companies  during the
period  commencing  on January 1, 2001 and ending on the First Closing Date (all
contributions  made by the  Sellers as of the date hereof are listed on Schedule
2.2(a)).

            "AES Weighted  Average Sales Price" means the weighted average sales
price of the AES Common Stock on the New York Stock  Exchange  during the period
commencing  on and  including the First Closing Date and ending on and including
the third Trading Day after the First Closing Date.

            "Affiliate"  means,  with  respect to any Person,  any other  Person
controlling,  controlled by or under common control with such Person. As used in
this  definition,  "control"  (and  correlative  terms)  means  the  possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management  or policies of a Person,  whether  through the  ownership  of voting
securities, by contract or otherwise.

            "Agreement" has the meaning set forth in the first paragraph.

            "Amended  and Restated  EDEN/EDES  Shareholders  Agreement"  has the
meaning set forth in Section 2.4(a)(viii).

            "Annexes" means the Annexes attached to this Agreement.

            "Applicable  Laws"  means all laws,  statutes,  rules,  regulations,
ordinances, judgments, settlements, orders, decrees, injunctions,  privatization
bidding rules (pliegos),


                                      II-1
<PAGE>

concessions and writs of any Governmental Authority having jurisdiction over any
of the Parties or the Companies or any of their operations or assets.

            "Argentina  Antitrust  Approval"  shall mean the resolution  secured
from the Argentina Antitrust Commission or any equivalent Governmental Authority
as may be required: (i) responding to a consultative opinion filed by the Buyers
and  Sellers  stating  that  no  filing  or  approval  from  such   Governmental
Authorities  is  required;  (ii) if filing is  ordered,  such filing is approved
without any conditions that require the Buyers, the Sellers,  the Companies,  or
their respective  Affiliates to dispose of a material portion of their assets or
otherwise materially adversely affect the Buyers, the Sellers, the Companies, or
their  respective  Affiliates  or (iii) if the filing is ordered,  the statutory
term set forth by Law 25,156,  as amended,  expires  without the issuance of any
resolution.

            "Business  Day" means any day other than (i) a Saturday or Sunday or
(ii) a day on which  commercial  banks in New York,  New York or  Buenos  Aires,
Argentina are authorized or required to be closed.

            "Buyers"  has the meaning set forth in the first  paragraph  of this
Agreement.

            "Buyer  Indemnified  Costs" means any and all Losses that any of the
Buyer  Indemnified  Parties incurs and that arise out of or relate to any breach
or  default  by  the  Sellers  or  any  of  their  Affiliates  under  any of the
Shareholder Agreements;  provided, however, that any Losses that arise out of or
relate to the matters  described above shall only be Buyer  Indemnified Costs if
they arise from third-party actions.

            "Buyer  Indemnified  Parties"  means  the  Buyers  and each of their
Affiliates,  including the Company, and each officer, director, employee, agent,
or consultant of such Persons.

            "Camille,  Ltd." means  Camille,  Ltd.,  a Cayman  Islands  exempted
company.

            "Camille, Ltd. Shares" has the meaning set forth in Section 3.1(g).

            "CEMAS"  has the meaning  set forth in the first  paragraph  of this
Agreement.

            "Closing  Price" means the closing  sales price per share of the AES
Common Stock for the Trading Day immediately  prior to the First Closing Date as
reported on the New York Stock Exchange.

            "Code" means the United  States  Internal  Revenue Code of 1986,  as
amended.  All  references  to the  Code,  U.S.  Treasury  regulations  or  other
governmental  pronouncements  shall  be  deemed  to  include  references  to any
applicable successor regulations or amending pronouncement.

            "Companies"  means  Inversora  de San  Nicolas,  S.A.,  an Argentine
sociedad  anonima,  La Plata Partners L.P., a Delaware limited  partnership,  La
Plata II,  Inc.,  a Delaware  corporation,  Wildwood I, Ltd.,  a Cayman  Islands
exempted company,  PSEG Operating Argentina S.A., an Argentine sociedad anonima,
Shazia S.R.L., an Argentine sociedad de


                                      II-2
<PAGE>

responsabilidad  limitada, AES Parana S.C.A., an Argentine sociedad en comandita
por  acciones,   AES  Parana  Operations   S.R.L.,  an  Argentine   sociedad  de
responsabilidad  limitada,  AES Parana Gas S.A., an Argentine  sociedad anonima,
and AES Parana  Propiedades S.A., an Argentine  sociedad anonima,  and "Company"
means any one of the Companies.

            "Consents"  means all governmental  consents and approvals,  and all
consents and  approvals  of third  parties,  in each case that are  necessary in
order to transfer the Interests to the Buyers and  otherwise to  consummate  the
transactions contemplated by this Agreement.

            "Contracts"  means  all  agreements,  contracts,  or  other  binding
commitments or  arrangements  (including any amendments and other  modifications
thereto),  to which  any of the  Companies  is a party or by which  any of their
assets are bound.

            "Dollar,"  "Dollars" and "US$" each mean freely  transferable lawful
money of the United States, or any successor currency.

            "EDEN"  means  Empresa  Distribuidora  de  Energia  Norte  S.A.,  an
Argentine sociedad anonima.

            "EDES" means Empresa Distribuidora de Energia Sur S.A., an Argentine
sociedad anonima.

            "EDEN/EDES Shares" has the meaning set forth in Section 3.1(h).

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
amended, and the rules and regulations promulgated thereunder.

            "Exhibits" means the Exhibits attached to this Agreement.

            "First  Closing"  means  the   consummation   of  the   transactions
contemplated  by this Agreement on the First Closing Date in accordance with the
provisions of Article 2.

            "First  Closing Date" means the date of the First Closing  specified
in Section 2.3.

            "Governmental   Authority"   means  any   governmental   department,
commission, board, bureau, agency, court or other instrumentality of any country
or any province, state, county, parish or municipality,  jurisdiction,  or other
political subdivision thereof.

            "Indemnified   Costs"  means  Buyer   Indemnified  Costs  or  Seller
Indemnified Costs, as applicable.

            "Indemnified Party" has the meaning set forth in Section 9.3.

            "Indemnifying Party" has the meaning set forth in Section 9.3.

            "Interests"  has the  meaning  set  forth  in the  Recitals  to this
Agreement.  Except where  specifically  stated otherwise in this Agreement,  the
Interests shall include the Additional Interests.


                                      II-3
<PAGE>

            "Liens"  means  all  liens,  pledges,  claims,  security  interests,
restrictions,  mortgages,  deeds  of  trust,  tenancies,  and  other  possessory
interests,  conditional sale or other title retention agreements,  restrictions,
rights of first  refusal,  defects  in  title,  and other  burdens,  options  or
encumbrances of any kind.

            "Losses"  means any and all damages,  losses,  claims,  liabilities,
demands,  charges, suits,  penalties,  costs and expenses (including court costs
and reasonable attorneys' fees and expenses).

            "Ministry" has the meaning set forth in Section 5.7.

            "Note Purchase  Agreement" means the Note Purchase  Agreement in the
form  attached  hereto as Exhibit A to be entered into on the First Closing Date
between AES Cayman and the Sellers.

            "Operating   Support   Agreements"   means  the  Operating   Support
Agreement,  dated May 27, 1999, by and between AES Ocean Springs,  Ltd. and PSEG
Americas Operating; the Operating Support Agreement,  dated May 27, 1999, by and
between AES  Argentina and PSEG  Americas  Operating  and the Operating  Support
Agreement,  dated May 27, 1999,  by and between PSEG  Americas and PSEG Americas
Operating.

            "Party"  and  "Parties"  have the  meanings  set  forth in the first
paragraph of this Agreement.

            "Person"  means an  individual,  corporation,  partnership,  limited
liability company,  association,  trust, unincorporated  organization,  or other
entity.

            "Pledge  Agreements"  has the meaning set forth in the Note Purchase
Agreement.

            "Pledgors"  means  AES  Cayman  and any other  Affiliate  of The AES
Corporation  that holds an  interest  in the Person  that is the  subject of the
Pledge  Agreement  executed by AES Cayman and owns  directly or  indirectly  the
Interests.

                  "Political Risk Event" means any Governmental  Authority shall
have  condemned,   nationalized,  seized,  attached,  compulsorily  acquired  or
otherwise  expropriated  all of or any substantial  part of the Interests or the
property  of a  Company,  or shall have  assumed  custody  or  control,  of such
property or of the business or operations  of such Company,  or shall have taken
any action for the dissolution or  disestablishment  of the Company or any other
action that would prevent the Company or its  respective  officers from carrying
on its business or operations or a substantial part thereof.

            "PSEG  Americas  Inc."  has  the  meaning  set  forth  in the  first
paragraph of this Agreement.

            "PSEG  Americas  Ltd."  has  the  meaning  set  forth  in the  first
paragraph of this Agreement.


                                      II-4
<PAGE>

            "PSEG  Americas  Operating"  has the  meaning set forth in the first
paragraph of this Agreement.

            "PSEG  Americas  Operating  Shares" has the meaning set forth in the
recitals to this Agreement.

            "PSEG Cayman V" has the meaning set forth in the first  paragraph of
this Agreement.

            "PSEG Operating  Argentina" means PSEG Operating  Argentina S.A., an
Argentine sociedad anonima.

            "PSEG  Operating  Argentina  Shares"  has the  meaning  set forth in
Section 2.4(e).

            "Purchase  Price" means the  consideration  payable by the Buyers to
the Sellers as provided in Section 2.2.

            "Quota Companies" means Shazia S.R.L., a sociedad de responsabilidad
limitada,  and AES  Parana  Operations  S.R.L.,  a sociedad  de  responsabilidad
limitada.

            "Schedules" means the Schedules attached to this Agreement.

            "Second   Closing"  means  the   consummation  of  the  transactions
contemplated by this Agreement on the Second Closing Date in accordance with the
provisions of Article 2.

            "Second Closing Date" means the date of the Second Closing specified
in Section 2.5.

            "Securities  Act" means the Securities Act of 1933, as amended,  and
the rules and regulations promulgated thereunder.

            "Sellers"  has the meaning set forth in the first  paragraph of this
Agreement.

            "Seller Agreements" has the meaning set forth in Section 5.2.

            "Seller  Indemnified Costs" means any and all Losses incurred by any
of the Seller Indemnified Parties that arise out of or relate to (a) the matters
set forth on Schedule 9.2 or (b) any breach or default by The AES Corporation or
any of  its  Affiliates  under  any of  the  Shareholder  Agreements;  provided,
however,  that any Losses that arise out of or relate to the  matters  described
above  shall only be Seller  Indemnified  Costs if they  arise from  third-party
actions.

            "Seller  Indemnified  Parties"  means the  Sellers and each of their
Affiliates  and each officer,  director,  employee,  agent or consultant of such
Persons.


                                      II-5
<PAGE>

            "Shareholder Agreements" means

            (i) the CTSN Shareholders Agreement dated March 31, 1993, as amended
May 20, 1993, by and among AES San Nicolas, Inc., Ormas S.A.I.C.I.C.,  CEMAS and
Inversora de San Nicolas, S.A.;

            (ii) the  Operating  Company  Shareholders  Agreement  dated May 27,
1997,  as  amended  on June 18,  1999 and on June 16,  2000,  by and among  PSEG
Americas Operating Company,  CEMAS, PSEG Operating Argentina,  AES Ocean Springs
Ltd., AES Argentina Operations, Ltd. and AESEBA S.A.;

            (iii) the PSEG Cayman Shareholders  Agreement dated May 27, 1997, as
amended on June 18, 1999 and June 16, 2000, by and among PSEG Americas Ltd., AES
Argentina  Operations,  Ltd.,  PSEG Americas  Inc. and PSEG  Americas  Operating
Company;

            (iv) the Shareholders  Agreement dated November 6, 1998 by and among
The AES  Corporation,  PSEG  Americas  Inc.,  PSEG Global Inc. and PSEG Americas
Ltd.;

            (v) the Quotaholders Agreement of AES Parana Operations S.R.L. dated
as of  June  25,  1999  by  and  among  PSEG  Cayman  V and  AES  Parana  I Ltd.
Partnership;

            (vi) the  Quotaholders  Agreement of Shazia S.R.L.  dated as of June
25, 1999 by and among PSEG Cayman V and AES Parana I Ltd. Partnership;

            (vii) the Shareholders  Agreement of AES Parana Gas S.A. dated as of
June 25, 1999 by and among PSEG Cayman V and AES Parana I Ltd. Partnership;

            (viii) the  Shareholders  Agreement of AES Parana  Propiedades  S.A.
dated as of June  25,  1999 by and  among  PSEG  Cayman V and AES  Parana I Ltd.
Partnership;

            (ix) the Partners  Agreement of AES Parana  S.C.A.  dated as of June
25, 1999 by and among PSEG Cayman V, AES Parana I Ltd.  Partnership interest and
Shazia S.R.L; and

            (x) the  Shareholders  Agreement dated as of November 6, 1998 by and
between Wildwood I, Ltd. and Wildwood II, Ltd.

            "Stock  USUFRUCT  Agreement"  has the  meaning  set forth in Section
2.4(b)(x).

            "Tax" or  "Taxes"  means  any  taxes,  assessments,  fees and  other
governmental  charges imposed by any Governmental  Authority,  including without
limitation income, profits, gross receipts, net proceeds,  alternative or add-on
minimum,  ad valorem,  value added,  turnover,  sales, use,  property,  personal
property (tangible and intangible),  environmental, stamp, leasing, lease, user,
excise,  duty,  franchise,  capital  stock,  transfer,  registration,   license,
withholding,  social security (or similar),  unemployment,  disability, payroll,
employment,  fuel,  excess  profits,  occupational,  premium,  windfall  profit,
severance,  estimated,  or  other  tax of any  kind  whatsoever,  including  any
interest, penalty, or addition thereto, whether disputed or not.


                                      II-6
<PAGE>

            "Technical  Assistance  Agreements" means the Technical  Assistance,
Know How and Operation  Agreement  between PSEG Americas  Operating and EDEN and
the Technical Assistance, Know How and Operation Agreement between PSEG Americas
Operating and EDES.

            "The  AES  Corporation"  means  The  AES  Corporation,   a  Delaware
corporation.

            "third-party action" has the meaning set forth in Section 9.3.

            "Trading Day" means a day on which the principal national securities
exchange or Nasdaq National Market, or any successor  thereto,  on which the AES
Common  Stock is listed or  admitted to trading is open for the  transaction  of
business.

            "Transaction Documents" has the meaning set forth in Section 3.1(b).

            "Wildwood I" has the meaning set forth in Section 3.1(g).


                                      II-7
<PAGE>

                                    EXHIBIT A

                         FORM OF NOTE PURCHASE AGREEMENT


                                       A-1
<PAGE>

                                   EXHIBIT B-1

                       FORM OF OPINION OF LATHAM & WATKINS


                                      B-1-1
<PAGE>

                                   EXHIBIT B-2

                             FORM OF OPINION OF THE
                     GENERAL COUNSEL OF THE AES CORPORATION


                                      B-2-1
<PAGE>

                                   EXHIBIT B-3

                      FORM OF OPINION OF MAPLES AND CALDER


                                      B-3-1
<PAGE>

                                   EXHIBIT B-4

                      FORM OF OPINION OF ESTUDIO O'FARRELL


                                      B-4-1
<PAGE>


                                    EXHIBIT C

                        FORM OF AES FIRST CLOSING WAIVER


                                       C-1
<PAGE>


                                    EXHIBIT D

               FORM OF AMENDED AND RESTATED EDEN/EDES SHAREHOLDERS
                                   AGREEMENT


                                       D-1
<PAGE>


                                    EXHIBIT E

                   FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT


                                       E-1
<PAGE>


                                    EXHIBIT F

                        FORM OF STOCK USUFRUCT AGREEMENT


                                       F-1
<PAGE>

                                    EXHIBIT G

                    FORM OF RESIGNATION LETTER AND WAIVER OF
                     DIRECTORS AND OFFICERS OF THE COMPANIES


                                       G-1
<PAGE>

                                   EXHIBIT H-1

                    FORM OF OPINION OF VINSON & ELKINS L.L.P.


                                      H-1-1
<PAGE>

                                   EXHIBIT H-2

                    FORM OF OPINION OF CONYERS DILL & PEARMAN


                                      H-2-1
<PAGE>

                                   EXHIBIT H-3

                      FORM OF OPINION OF MAPLES AND CALDER


                                      H-3-1
<PAGE>

                                   EXHIBIT H-4

                     FORM OF OPINION OF BERETTA KAHALE GODOY


                                     H-4-1
<PAGE>

                                   EXHIBIT H-5

                       FORM OF OPINION OF DAVID R. GARCIA


                                      H-5-1
<PAGE>


                                    EXHIBIT I

                        FORM OF PSEG FIRST CLOSING WAIVER


                                       I-1
<PAGE>


                                    EXHIBIT J

                       FORM OF PSEG SECOND CLOSING WAIVER


                                       J-1
<PAGE>


                                    EXHIBIT K

                        FORM OF AES SECOND CLOSING WAIVER


                                       K-1
<PAGE>

                                    EXHIBIT L

                          FORM OF AES SHARES AGREEMENT


                                       L-1