Document:

ppl10q-exhibit10_1.htm

    
      Exhibit
        10(a)

      

      EXECUTION
        COPY

      CONFIDENTIAL

      

       

      

       

       
        

         

      

      

       

       

      STOCK
        PURCHASE AGREEMENT

       

      by
        and between

       

       

      PPL
        Chile Energía Limitada

       

      and

       

      Compañía
        General de Electricidad

      

      Dated
        as of September 12, 2007

       

       

       

       

       

       

      
        
 

      

        
           

          
            
              

            

          

           

        

      

       

                       

      
        
          	
                  Table
                    of Contents

                	 
	 	
                  Page

                

        

      

      
        	
                ARTICLE
                  I

              	 
	
                DEFINITIONS
                  AND RULES OF CONSTRUCTION

              	 
	 	 
	
                SECTION
                  1.1. Definitions

              	
                1

              
	 	 
	
                ARTICLE
                  II

              	 
	
                PURCHASE
                  AND SALE

              	 
	 	 
	
                SECTION
                  2.1. Purchase and Sale of the Emel Shares and
                  Closing

              	
                1

              
	
                SECTION
                  2.2. Transactions to be Effected at the Closing

              	
                2

              
	 	 
	
                ARTICLE
                  III

              	 
	
                REPRESENTATIONS
                  AND WARRANTIES RELATING TO SELLER

              	 
	 	 
	
                SECTION
                  3.1. Organization and Existence

              	
                2

              
	
                SECTION
                  3.2. Authorization

              	
                2

              
	
                SECTION
                  3.3. Consents

              	
                3

              
	
                SECTION
                  3.4. Noncontravention

              	
                3

              
	
                SECTION
                  3.5. Title

              	
                3

              
	
                SECTION
                  3.6. Brokers

              	
                3

              
	 	 
	
                ARTICLE
                  IV

              	 
	
                REPRESENTATIONS
                  AND WARRANTIES RELATING TO THE COMPANIES

              	 
	 	 
	
                SECTION
                  4.1. Organization and Existence

              	
                4

              
	
                SECTION
                  4.2. Subsidiaries

              	
                4

              
	
                SECTION
                  4.3. Financial Statements; Business Activities

              	
                4

              
	
                SECTION
                  4.4. Litigation

              	
                4

              
	
                SECTION
                  4.5. Compliance with Laws; Sufficiency of Permits and
                  Assets

              	
                5

              
	
                SECTION
                  4.6. Material Contracts

              	
                5

              
	
                SECTION
                  4.7. Assets

              	
                5

              
	
                SECTION
                  4.8. Employee Matters

              	
                6

              
	
                SECTION
                  4.9. Environmental Matters

              	
                6

              
	
                SECTION
                  4.10. Insurance

              	
                6

              
	
                SECTION
                  4.11. Taxes

              	
                7

              
	
                SECTION
                  4.12. Computer Programs

              	
                7

              
	
                SECTION
                  4.13. Affiliate Transactions

              	
                7

              
	
                SECTION
                  4.14. Exclusive Representations and Warranties

              	
                7

              
	 	 
	
                ARTICLE
                  V

              	 
	
                REPRESENTATIONS
                  AND WARRANTIES OF BUYER

              	 
	 	 
	
                SECTION
                  5.1. Organization and Existence

              	
                8

              
	
                SECTION
                  5.2. Authorization

              	
                8

              
	
                SECTION
                  5.3. Consents

              	
                8

              
	
                SECTION
                  5.4. Noncontravention

              	
                8

              
	
                SECTION
                  5.5. Litigation

              	
                8

              
	
                SECTION
                  5.6. Compliance with Laws

              	
                9

              
	
                SECTION
                  5.7. Brokers

              	
                9

              
	
                SECTION
                  5.8. Investment Intent

              	
                9

              
	
                SECTION
                  5.9. Available Funds

              	
                9

              
	
                SECTION
                  5.10. Investigation

              	
                9

              
	
                SECTION
                  5.11. Disclaimer Regarding Projections

              	
                9

              
	
                SECTION
                  5.12. Legal Impediments

              	
                10

              
	
                SECTION
                  5.13. No Other Representations or Warranties

              	
                10

              
	 	 
	
                ARTICLE
                  VI

              	 
	
                COVENANTS

              	 
	 	 
	
                SECTION
                  6.1. Information Pending Closing

              	
                10

              
	
                SECTION
                  6.2. Conduct of Business Pending the Closing

              	
                10

              
	
                SECTION
                  6.3. Cooperation on Tax Matters

              	
                11

              
	
                SECTION
                  6.4. Confidentiality; Publicity

              	
                12

              
	
                SECTION
                  6.5. Post-Closing Books and Records

              	
                12

              
	
                SECTION
                  6.6. Expenses

              	
                13

              
	
                SECTION
                  6.7. Tender Offer

              	
                13

              
	
                SECTION
                  6.8. Further Actions

              	
                14

              
	 	 
	
                ARTICLE
                  VII

              	 
	
                SPECIFIED
                  CONDITIONS

              	 
	 	 
	
                SECTION
                  7.1. Buyer Specified Conditions

              	
                15

              
	
                SECTION
                  7.2. Seller Specified Conditions

              	
                15

              
	 	 
	
                ARTICLE
                  VIII

              	 
	
                SURVIVAL;
                  INDEMNIFICATION AND RELEASE

              	 
	 	 
	
                SECTION
                  8.1. Survival

              	
                16

              
	
                SECTION
                  8.2. Indemnification by Seller

              	
                16

              
	
                SECTION
                  8.3. Indemnification by Buyer

              	
                17

              
	
                SECTION
                  8.4. Indemnification Procedures

              	
                17

              
	
                SECTION
                  8.5. General

              	
                18

              
	
                SECTION
                  8.6. “As Is” Sale; Release

              	
                19

              
	
                SECTION
                  8.7. Right to Specific Performance; Certain
                  Limitations

              	
                20

              
	 	 
	
                ARTICLE
                  IX

              	 
	
                TERMINATION,
                  AMENDMENT AND WAIVER

              	 
	 	 
	
                SECTION
                  9.1. Grounds for Termination

              	
                20

              
	
                SECTION
                  9.2. Effect of Termination

              	
                21

              
	
                SECTION
                  9.3. Amendments and Waivers

              	
                21

              
	 	 
	
                ARTICLE
                  X

              	 
	
                MISCELLANEOUS

              	 
	 	 
	
                SECTION
                  10.1. Notices

              	
                21

              
	
                SECTION
                  10.2. Severability

              	
                23

              
	
                SECTION
                  10.3. Counterparts

              	
                23

              
	
                SECTION
                  10.4. Entire Agreement; No Third Party
                  Beneficiaries

              	
                23

              
	
                SECTION
                  10.5. Governing Law

              	
                23

              
	
                SECTION
                  10.6. Specific Performance

              	
                23

              
	
                SECTION
                  10.7. Consent to Jurisdiction; Waiver of Jury
                  Trial

              	
                23

              
	
                SECTION
                  10.8. Assignment

              	
                24

              
	
                SECTION
                  10.9. Headings

              	
                24

              
	
                SECTION
                  10.10. Construction

              	
                24

              
	
                SECTION
                  10.11. Schedules and Exhibits

              	
                24

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                Exhibits

              	 	 
	 	 	 
	
                Exhibit
                  A

              	 	
                Stock
                  Transfer Form

              
	 	 	 
	
                Schedules

              	 	 
	 	 	 
	
                Schedule
                  1(a)

              	 	
                Seller’s
                  Knowledge

              
	
                Schedule
                  1(b)

              	 	
                Buyer’s
                  Knowledge

              
	
                Schedule
                  3.3

              	 	
                Consents

              
	
                Schedule
                  4.1

              	 	
                Organization
                  and Existence

              
	
                Schedule
                  4.2

              	 	
                Subsidiaries

              
	
                Schedule
                  4.3(b)

              	 	
                Business
                  Activities

              
	
                Schedule
                  4.4

              	 	
                Litigation

              
	
                Schedule
                  4.6(c)

              	 	
                Material
                  Contracts

              
	
                Schedule
                  4.7

              	 	
                Assets

              
	
                Schedule
                  4.8(a)

              	 	
                Employment
                  Agreements

              
	
                Schedule
                  4.8(c)

              	 	
                Strikes,
                  Lockouts and Labor Stoppages

              
	
                Schedule
                  4.8(e)

              	 	
                Pending
                  Payments to Directors

              
	
                Schedule
                  4.9

              	 	
                Environmental
                  Matters

              
	
                Schedule
                  4.10

              	 	
                Insurance

              
	
                Schedule
                  4.11

              	 	
                Taxes

              
	
                Schedule
                  6.2(a)

              	 	
                Conduct
                  of Business Pending the Closing

              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      This
        STOCK PURCHASE AGREEMENT (this “Agreement”) is dated as
        of September 12, 2007 and is by and between PPL Chile Energía Limitada, a
        limited liability company organized under the laws of Chile (“Seller”),
        and Compañía General de Electricidad, a corporation organized under the laws of
        Chile (“Buyer”).

       

      RECITALS

       

      WHEREAS,
        Seller owns an approximately 95.4% interest in Empresas Emel S.A.
        (“Emel”), a corporation organized under the laws of Chile, which in turn
        owns interests in various electric distribution and transmission companies
        and
        related entities operating in Chile (Emel and each of its majority-owned
        subsidiaries, together, the “Companies”);

       

      WHEREAS,
        Seller owns directly an approximately 0.00356% membership interest in Emel
        Inversiones Chile Limitada, a limited liability company organized under the
        laws
        of Chile (“Inversiones”), and, through Emel, Seller owns indirectly an
        approximately 99.99644% membership interest of Inversiones; and

       

      WHEREAS,
        in accordance with this Agreement, Buyer desires to purchase, and Seller
        desires
        to sell to Buyer, 100% of Seller’s equity interest in Emel (the “Emel
        Shares”) and 100% of Seller’s direct membership interest in Inversiones (the
“Inversiones Interest” and, together with the Emel Shares and a
        corresponding indirect interest in each of Emel’s subsidiaries, the “Company
        Shares”).

       

      NOW
        THEREFORE, the Parties hereby agree as follows:

       

      ARTICLE
        I

       

      DEFINITIONS
        AND RULES OF CONSTRUCTION

       

      SECTION
        1.1.   Definitions.  Capitalized
        terms used in this Agreement have the meanings ascribed to them by definition
        in
        this Agreement or in Appendix A hereto.

       

      ARTICLE
        II

       

      PURCHASE
        AND SALE

       

      SECTION
        2.1.   Purchase and Sale of the Emel Shares and
        Closing.  (a) In accordance with the terms and
        subject to this Agreement, Buyer agrees to purchase the Emel Shares and Seller
        agrees to sell to Buyer the Emel Shares free and clear of any Liens other
        than
        those arising out of this Agreement.

       

      (b) 
        The aggregate amount to be paid by Buyer for the Emel Shares is Six Hundred
        Sixty Million U.S. Dollars (US $660,000,000) (the “Purchase
        Price”) (which amount represents a purchase price per share
        of approximately Forty-Seven U.S. Dollars and Fifty-One Cents (US $47.51)
        for
        each Emel Share (the “Per Share Price”)). At the Closing, Buyer shall pay
        the Purchase Price to Seller in the United States of America, without deduction
        or withholding of any kind by wire transfer of immediately available funds
        in
        U.S. Dollars to such accounts specified by Seller to Buyer in writing at
        least
        one Business Day prior to the Closing.  The closing of the purchase
        and sale of the Emel Shares (the “Closing”) shall take place on the date
        the Tender Offer is completed and accepted by Buyer pursuant to Section 6.7
        and
        applicable Law at the offices of Simpson Thacher & Bartlett LLP, 425
        Lexington Avenue, New York, New York at 10:00 a.m., local time, or at such
        other
        time, date and place as may be mutually agreed upon in writing by the Parties
        (the date on which the Closing actually occurs being referred to as the
“Closing Date”).

       

      SECTION
        2.2.   Transactions to be Effected at the
        Closing. 
        At the
        Closing:

       

      (a)  Except
        as otherwise required in accordance with the Tender Offer and applicable
        Law,
        Seller shall deliver (or cause to be delivered) to Buyer (i) an instrument
        of
        transfer in respect of the Emel Shares substantially in the form attached
        as
Exhibit A, attaching thereto the stock certificates representing the Emel
        Shares, and (ii) a deed reflecting the transfer of the Inversiones Interest
        from
        Seller to Buyer for the total purchase price of 1,451,307 Chilean
        pesos.

       

      (b)  Seller
        shall deliver minutes of the board of Emel with the resignation for each
        of the
        non-executive board members of Emel and the other Companies, all of whom
        have
        been previously named by the Buyer;

       

      (c)  Buyer
        and Seller shall deliver any other documents required for such Closing under
        applicable Law, including applicable Laws related to the Tender Offer;
        and

       

      (d)  Buyer
        shall pay the Purchase Price as provided in Section 2.1.

       

      ARTICLE
        III

       

      REPRESENTATIONS
        AND WARRANTIES RELATING TO SELLER

       

      Seller
        hereby represents and warrants to Buyer as of the date hereof as
        follows:

       

      SECTION
        3.1.   Organization and
        Existence. 
        Seller is a limited liability company with all requisite power and
        authority required to enter into this Agreement and consummate the transactions
        contemplated hereby.  Seller is duly qualified or licensed to do
        business in each other jurisdiction where the actions required to be performed
        by it hereunder makes such qualification or licensing necessary, except in
        those
        jurisdictions where the failure to be so qualified or licensed would not,
        individually or in the aggregate, reasonably be expected to result in a Material
        Adverse Effect.

       

      SECTION
        3.2.   Authorization. The
        execution, delivery and performance by Seller of this Agreement and the
        consummation by Seller of the transactions contemplated hereby are within
        Seller’s powers and have been duly authorized by all necessary action on the
        part of Seller.  This Agreement constitutes (assuming the due
        execution and delivery by the other Party hereto) a valid and legally binding
        obligation of Seller enforceable against Seller in accordance with its terms,
        subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
        reorganization, moratorium and other laws relating to or affecting creditors’
rights generally and general equitable principles (whether considered in
        a
        proceeding in equity or at law).

       

      SECTION
        3.3.   Consents. Except
        as set forth on Schedule 3.3, no claim, legal action, suit, arbitration,
        governmental investigation, or other legal, judicial or administrative
        proceeding is pending or, to the Knowledge of Seller, threatened against
        Seller
        or the Companies, which would prevent or delay the transactions contemplated
        hereby.  No consent, approval, license, permit, order or authorization
        (each, a “Consent”) of, or registration,
        declaration or filing (each, a
“Filing”) with, any Governmental Entity
        which has not been obtained or made by Seller is required for or in connection
        with the execution and delivery of this Agreement by Seller, and the
        consummation by Seller of the transactions contemplated hereby, other than
        such
        Consents and Filings the failure of which to obtain or make would not reasonably
        be expected to have a Material Adverse Effect.

       

      SECTION
        3.4.   Noncontravention. The
        execution, delivery and performance of this Agreement by Seller does not,
        and
        the consummation by Seller of the transactions contemplated hereby will not
        (i)
        contravene or violate any provision of the organizational documents of Seller
        or
        the Companies, or (ii) contravene or violate any provision of, or result
        in the
        termination or acceleration of, or entitle any party to accelerate any
        obligation or indebtedness under, any mortgage, lease, franchise, license,
        permit, agreement, instrument, law, order, arbitration award, judgment or
        decree
        to which Seller or the Companies are a party or by which Seller or any of
        the
        Companies are bound, except for any such violations or defaults (or rights
        of
        termination, cancellation or acceleration) which would not, individually
        or in
        the aggregate, reasonably be expected to result in (A) the early termination
        of,
        or suspension of material services under any Material Contract, (B) a payment
        individually or in the aggregate by the Companies of US$5,000,000 or more,
        or
        (C) a Material Adverse Effect.

       

      SECTION
        3.5.   Title. Seller
        is directly the legal and beneficial owner of, and has good and marketable
        title
        to, the Emel Shares, free and clear of all Liens other than those arising
        pursuant to this Agreement.  There are no outstanding options,
        warrants or other rights of any kind including any restrictions on transfers,
        relating to the sale, or voting of such Company Shares, the subscription
        of
        additional shares in the capital of the Companies or any securities convertible
        into or evidencing the right to purchase additional shares in the capital
        of the
        Companies. Upon Closing, Buyer shall have good and marketable title to such
        Emel
        Shares, free and clear of any Liens, restrictions on transfer and voting
        or
        preemptive rights, other than those arising pursuant to this
        Agreement.

       

      SECTION
        3.6.   Brokers. Neither
        Seller nor any of its
        Affiliates (including, for these purposes, the Companies) have any liability
        or
        obligation to pay fees or commissions to any broker, finder or agent with
        respect to the transactions contemplated by this Agreement for which Buyer
        or
        its Affiliates (including, for these purposes, the Companies) could become
        liable or obliged.

       

      ARTICLE
        IV

       

      REPRESENTATIONS
        AND WARRANTIES RELATING TO THE COMPANIES

       

      Seller
        hereby represents and warrants to Buyer as of the date hereof as
        follows:

       

      SECTION
        4.1.   Organization and
        Existence. Except
        as set forth on Schedule 4.1, the Companies are each duly incorporated,
        validly existing and in good standing under the laws of their place of
        organization.  Except as set forth on Schedule 4.1, the
        Companies are duly qualified or licensed to transact business in each
        jurisdiction in which the properties owned, leased or operated by the Companies
        or the nature of the business conducted by the Companies makes such
        qualification necessary, except as would not, individually or in the aggregate,
        reasonably be expected to have a Material Adverse Effect.

       

      SECTION
        4.2.   Subsidiaries. The
        legal name, place of organization and respective ownership interest of each
        of
        the Companies is set forth on Schedule 4.2 hereto.  Except as
        set forth on Schedule 4.2, the Companies do not own any direct or
        indirect equity ownership, participation or voting right or interest in any
        other Person (including any Contract in the nature of a voting trust or similar
        agreement or understanding or indebtedness having general voting rights)
        or any
        options, warrants, convertible securities, exchangeable securities, subscription
        rights, conversion rights, exchange rights, stock appreciation rights, phantom
        stock, profit participation or other similar rights or Contracts in or issued
        by
        any other Person.

       

      SECTION
        4.3.   Financial Statements; Business
        Activities.

       

      (a)  Seller
        has previously furnished or made available to Buyer copies of (i) the audited
        consolidated financial statements of Emel as of and for the years ended December
        31, 2004, December 31, 2005 and December 31, 2006, and (ii) the unaudited
        financial statements of Emel as of June 30, 2007 and for the six months then
        ended (the “Financial Statements”); and the Financial Statements fairly
        present, in all material respects, in conformity with Chilean GAAP (except
        as
        described in the notes thereto), the financial position, the results of
        operations and cash flows of Emel as of the dates and for the periods indicated,
        subject in the case of any unaudited and/or interim Financial Statements
        to
        normal year-end adjustments and the absence of footnotes.

       

      (b)  Except
        as set forth on Schedule 4.3(b), since December 31, 2006, (i) the
        Companies’ business has been conducted in accordance with the ordinary course of
        business consistent with past practices, (ii) the Companies have not paid
        any
        dividends or made any other distributions, and (iii) there has not been any
        change, event or effect that, individually or in the aggregate with other
        changes, events or effects, has resulted in, or could reasonably be expected
        to
        result in, a Material Adverse Effect.

       

      SECTION
        4.4.   Litigation.Except as disclosed
        on Schedule 4.4, there are no Claims pending or, to Seller’s Knowledge,
        threatened, against or otherwise relating to the Companies before any
        Governmental Entity or any arbitrator, that would, individually or in the
        aggregate, reasonably be expected to result in a payment by the Companies
        of
        US$5,000,000 or more, or the early termination of any Material
        Contract.  Except as disclosed on Schedule 4.4, the Companies
        are not subject to any judgment, decree, injunction, rule or order of any
        Governmental Entity or any arbitrator that would, individually or in the
        aggregate, reasonably be expected to result in (i) a payment by the Companies
        of
        US$5,000,000 or more, (ii) a Material Adverse Effect, or (iii) the early
        termination of any Material Contract.

       

      SECTION
        4.5.   Compliance with Laws; Sufficiency of Permits and
        Assets.

      Except
        for such violations that would not, individually or in the aggregate, reasonably
        be expected to result in a Material Adverse Effect, the Companies are not
        in
        violation of any material Law.  All permits, certificates, licenses
        and other authorizations of all Governmental Entities, and all material
        equipment, inventory, intellectual property, real property and other assets,
        that the Companies require in order to own, lease, maintain, operate and
        conduct
        its business as currently conducted in all material respects, are held by
        the
        Companies.   The Companies are not in violation of the terms of
        any material permits, licenses, franchises, orders and other authorizations,
        consents and approvals from Governmental Entities, except for such violations
        that would not, individually or in the aggregate, reasonably be expected
        to
        result in a Material Adverse Effect.

       

      SECTION
        4.6.   Material Contracts.

       

      (a)  Except
        for Contracts with respect to which the Companies will not be bound or have
        liability after the Closing or which are terminable on less than ninety (90)
        days’ notice without penalty, the Companies have provided Buyer with, or access
        to, true and complete copies of all Material Contracts as of the date
        hereof.

       

      (b)  Each
        Material Contract constitutes the valid and binding obligation, in full force
        and effect, of the Companies and, to Seller’s Knowledge, the other parties
        thereto.

       

      (c)   Except
        as set forth on Schedule 4.6(c), the Companies are not in default, and,
        to Seller’s Knowledge, no other party is in default in the performance or
        observance of any term or provision of, and no event has occurred which,
        with
        lapse of time or action by a third party, would result in such a default
        under
        any Material Contract to which the Companies are a party or by which any
        of them
        is bound or to which any of its assets and property are subject, other than
        as
        would not, individually or in the aggregate, reasonably be expected to result
        in
        (i) the early termination of, or suspension of material services under, such
        Material Contract, (ii) to Seller’s Knowledge, a payment by the Companies of
        US$1,000,000 or more, or (iii) a Material Adverse Effect.

       

      SECTION
        4.7.   Assets. Except
        as set forth on Schedule 4.7, the Companies have uninterrupted and
        undisputed possession to the material assets they own and purport to own
        (including their property, inventory and other assets), free and clear of
        all
        Liens other than the foregoing (each of which is a “Permitted Lien”): (a)
        such imperfections of title, easements, encumbrances, restrictions or other
        Liens which do not impair (i) the current or future value thereof by more
        than
        US$5,000,000 (individually or in the aggregate), (ii) the use of the Companies’
assets in any material respect, or (iii) Seller’s ability to perform its
        obligations hereunder, (b) Liens imposed by applicable Law, or (c) Liens
        for
        Taxes not yet due and payable, or being contested in good faith.

       

      SECTION
        4.8.   Employee Matters.

       

      (a)  Seller
        has made available to Buyer copies of each Company Plan, including plan
        documents and any other material related documents and all amendments
        thereto.  Schedule 4.8(a) contains a list of all employment
        agreements with any member of Senior Management.

       

      (b)  Each
        Company Plan is maintained, operated and administered in material compliance
        with applicable Laws and with the terms of such Company Plan (including the
        making of any required contributions), except where the failure to so comply
        would not reasonably be expected to have, individually or in the aggregate,
        a
        Material Adverse Effect.

       

      (c)  Except
        as set forth in Schedule 4.8(c) or as would not reasonably be expected to
        have, individually or in the aggregate, a Material Adverse Effect, there
        are no
        existing or, to the Knowledge of Seller, threatened strikes, lockouts or
        other
        labor stoppages involving the employees of the Companies.

       

      (d)  All
        due and payable social security contributions, pension fund contributions,
        health mandatory contributions and severance benefits for which the Companies
        are currently liable have been paid.

       

      (e)  Except
        as set forth in Schedule 4.8(e), there are no pending payments due to any
        director of any of the Companies in connection with their duty as director
        of
        any of the Companies.

       

      SECTION
        4.9.   Environmental Matters. Except
        as disclosed on Schedule 4.9:  (a) the Companies are in
        material compliance with all, and have not violated in any material respect
        any,
        applicable Environmental Laws and to Seller’s Knowledge, there is no condition
        or circumstance that would prevent or materially interfere with such compliance
        in the future, (b) there are no suits, demands, claims, hearings, investigations
        or proceedings pending or, to Seller’s Knowledge, threatened against the
        Companies or with respect to their material assets relating to any material
        violation, or alleged material violation, of, or material liability or alleged
        material liability under or relating to, any Environmental Law, (c) the
        Companies have not disposed of, released or transported, or arranged for
        the
        disposal, release, or transportation of, any Hazardous Substance in material
        violation of any applicable Environmental Law, or in a manner or to a location
        that could reasonably be expected to give rise to any material liability
        under
        or relating to any Environmental Law, (d) no Hazardous Substance is otherwise
        present at or about any real property or facility currently or formerly owned
        or
        operated by the Companies, in amount or condition that could reasonably be
        expected to result in material liability under or relating to any Environmental
        Law, and (e) the Companies have not assumed, retained or provided indemnity
        against any material liability under or relating to any Environmental
        Law.

       

      SECTION
        4.10.   Insurance. The
        Companies and their businesses and/or properties are insured to the extent
        specified under the insurance policies listed on Schedule 4.10, which
        include identification of those policies that will be transferred to, or
        retained by, Buyer or the Companies on Closing.  All of the insurance
        policies listed on Schedule 4.10 are valid and in full force and effect
        and all premiums with respect thereto due and payable for any period prior
        to
        the Closing Date have been or will be paid by the Companies prior to the
        Closing, and no written notice of cancellation or termination has been received
        by the Companies or Seller with respect to any such material policies which
        has
        not been replaced on substantially similar terms prior to the date of such
        cancellation or termination.  The Companies are not in default on any
        material term of any of such policies and have not failed to give timely
        notice
        of any loss thereunder.  The Companies have made available to Buyer
        accurate and complete copies of the insurance policies listed on Schedule
        4.10.

       

      SECTION
        4.11.   Taxes. Except
        as set forth on Schedule 4.11, (i) all Tax Returns required to be filed
        by the Companies or by Seller with respect to the Companies have been or
        will be
        filed when due in accordance with all applicable Laws; (ii) the Companies
        have
        paid in full all Taxes due and payable, whether or not shown on such Tax
        Returns; (iii) there is no action, suit, proceeding, investigation, audit
        or
        claim now pending with respect to any Tax with respect to the Companies;
        (iv)
        there are no outstanding agreements extending the statutory period of limitation
        applicable to any claim for, or the period for the collection or assessment
        of,
        material Taxes with respect to the Companies; and (v) the Companies have
        timely
        and properly collected, withheld and remitted to the Taxing Authority to
        whom
        such payment is due all amounts required to be collected or withheld by the
        Companies for the payment of Taxes.

       

      SECTION
        4.12.   Computer Programs.

       

      (a)  None
        of the software or technical manuals used by the Companies has been copied
        wholly or substantially from any material in which the Companies do not own
        the
        copyright or for which the Companies do not have an authorized
        license.

       

      (b)  All
        computer programs, excluding software, used in the business of the Companies
        (the “Computer Programs”) are owned and operated by and are under the control of
        the Companies and are not wholly or partly dependent on any facilities which
        are
        not under the ownership, operation or control of the Companies, and no action
        will be necessary to enable such computer programs to continue to be used
        in the
        business of the Companies, to the same extent and in the same manner as they
        have been used prior to the date hereof.

       

      (c)  To
        the Seller’s Knowledge, the Companies are not in breach of or default under any
        license or other agreements under which the Companies have rights to use
        the
        Computer Programs.

       

      SECTION
        4.13.   Affiliate Transactions.

       

      (a)   Seller
        has made available to Buyer copies of each of the outstanding material
        agreements that the Companies have entered into with a related party (as
        such
        term is defined in Article 100 of Law 18.045 – Ley de Mercado de
        Valores) (the “Related Party Agreements”).

       

      (b)   Each
        of the Related Party Agreements is in compliance with Chilean law in all
        material respects.

       

      SECTION
        4.14.   Exclusive Representations and
        Warranties. It
        is the explicit intent of each Party hereto that Seller is not making any
        representation or warranty whatsoever, express or implied, except those
        representations and warranties expressly set forth in Article III and this
        Article IV.

       

      ARTICLE
        V

       

      REPRESENTATIONS
        AND WARRANTIES OF BUYER

       

      Buyer
        hereby represents and warrants to Seller as of the date hereof as
        follows:

       

      SECTION
        5.1.   Organization and
        Existence. Buyer
        is a corporation with all requisite power and authority required to enter
        into
        this Agreement and consummate the transactions contemplated
        hereby.  Buyer is duly qualified or licensed to do business in each
        other jurisdiction where the actions required to be performed by it hereunder
        makes such qualification or licensing necessary, except in those jurisdictions
        where the failure to be so qualified or licensed would not reasonably be
        expected to result in a material adverse effect on Buyer’s ability to perform
        its obligations hereunder.

       

      SECTION
        5.2.   Authorization. The
        execution, delivery and performance by Buyer of this Agreement and the
        consummation by Buyer of the transactions contemplated hereby are within
        Buyer’s
        powers and have been duly authorized by all necessary action on the part
        of
        Buyer.  This Agreement constitutes (assuming the due execution and
        delivery by each of the other Parties hereto) a valid and legally binding
        obligation of Buyer, enforceable against Buyer in accordance with its terms,
        subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
        reorganization, moratorium and other similar laws relating to or affecting
        creditors’ rights generally and general equitable principles (whether considered
        in a proceeding in equity or at law).

       

      SECTION
        5.3.   Consents. No
        Consent of, or Filing with, any Governmental Entity which has not been obtained
        or made by Buyer is required for or in connection with the execution and
        delivery of this Agreement by Buyer, and the consummation by Buyer of the
        transactions contemplated hereby, other than such Consents and Filings the
        failure of which to obtain or make would not materially impair or delay the
        ability of Buyer to effect the Closing.

       

      SECTION
        5.4.   Noncontravention. The
        execution, delivery and performance of this Agreement by Buyer does not,
        and the
        consummation by Buyer of the transactions contemplated hereby will not (i)
        contravene or violate any provision of the organizational or constitutional
        documents of Buyer, or (ii) contravene or violate any provision of, or result
        in
        the termination or acceleration of, or entitle any party to accelerate any
        obligation or indebtedness under, any mortgage, lease, franchise, license,
        permit, agreement, instrument, law, order, arbitration award, judgment or
        decree
        to which Buyer is a party or by which Buyer is bound, except to the extent
        that
        any such events would not materially impair or delay the ability of Buyer
        to
        effect the Closing.

       

      SECTION
        5.5.   Litigation. There
        are no Claims pending or, to Buyer’s Knowledge, threatened, against or otherwise
        relating to Buyer before any Governmental Entity or any arbitrator, that
        would,
        individually or in the aggregate, reasonably be expected to have a material
        adverse effect on Buyer’s ability to perform its obligations
        hereunder.  Buyer is not subject to any judgment, decree, injunction,
        rule or order of any Governmental Entity or any arbitrator that prohibits
        the
        consummation of the transactions contemplated by this Agreement or would,
        individually or in the aggregate, reasonably be expected to have a material
        adverse effect on Buyer’s ability to perform its obligations
        hereunder.

       

      SECTION
        5.6.   Compliance with Laws. Buyer
        is not in violation of any Law, except for violations that would not,
        individually or in the aggregate, reasonably be expected to result in a material
        adverse effect on Buyer’s ability to perform its obligations
        hereunder.

       

      SECTION
        5.7.   Brokers.  Neither
        Buyer nor any of its Affiliates has any liability or obligation to pay fees
        or
        commissions to any broker, finder or agent with respect to the transactions
        contemplated by this Agreement for which Seller or its Affiliates could become
        liable or obliged.

       

      SECTION
        5.8.   Investment Intent.  
Buyer
        acknowledges that neither the offer nor the sale of the Emel Shares has been
        registered under the U.S. Securities Act of 1933, as amended (together with
        the
        rules and regulations promulgated thereunder, the
“Securities Act”), or under any state
        or foreign securities laws.  Buyer is acquiring the Emel Shares for
        its own account for investment, without a view to, or for a resale in connection
        with, the distribution thereof in violation of the Securities Act or any
        applicable state securities laws and with no present intention of distributing
        or reselling any part thereof.  Buyer will not so distribute or resell
        any of the Emel Shares in violation of any such law.

       

      SECTION
        5.9.   Available Funds. Buyer
        has, and at the Closing will have, all funds necessary for its payment of
        the
        Purchase Price and for all other actions necessary for Buyer to consummate
        the
        transactions contemplated in this Agreement.

       

      SECTION
        5.10.   Investigation.
        Buyer is a sophisticated entity, is knowledgeable about the
        industry in which the Companies operate, experienced in investments in such
        businesses and able to bear the economic risk associated with the purchase
        of
        the Emel Shares.  Buyer has such knowledge and experience as to be
        aware of the risks and uncertainties inherent in the purchase of shares of
        the
        type contemplated in this Agreement, as well as the knowledge of the Companies
        and their operations in particular, and has independently, based on such
        information made its own analysis and decision to enter into this
        Agreement.  Buyer had full access to the books, records, facilities
        and personnel of the Companies for purposes of conducting its due diligence
        investigation of the Companies.

       

      SECTION
        5.11.   Disclaimer Regarding
        Projections. Buyer
        may be in possession of certain projections and other forecasts regarding
        the
        Companies, including but not limited to projected financial statements, cash
        flow items and other data of the Companies and certain business plan information
        of the Companies.  Buyer acknowledges that there are substantial
        uncertainties inherent in attempting to make such projections and other
        forecasts and plans and accordingly is not relying on them, that Buyer is
        familiar with such uncertainties, that Buyer is taking full responsibility
        for
        making its own evaluation of the adequacy and accuracy of all projections
        and
        other forecasts and plans so furnished to it, and that Buyer shall have no
        claim
        against anyone with respect thereto.  Accordingly, Buyer acknowledges
        that, without limiting the generality of Section 4.12, neither Seller nor
        any of
        their Affiliates has made any representation or warranty with respect to
        such
        projections and other forecasts and plans.

       

      SECTION
        5.12.   Legal Impediments. There
        are no facts relating to Buyer, any applicable Law or any agreement to which
        Buyer is a party that would disqualify Buyer from obtaining control of the
        Companies or that would prevent, delay or limit the ability of Buyer to effect
        the Closing.

       

      SECTION
        5.13.   No Other Representations or
        Warranties.   It
        is the explicit intent of each Party hereto that Buyer is not making any
        representation or warranty whatsoever, express or implied, except those
        representations and warranties expressly set forth in this Article
        V.

       

      ARTICLE
        VI

       

      COVENANTS

       

      SECTION
        6.1.   Information Pending
        Closing.  During the Interim Period, Seller shall
        cause the Companies to provide Buyer and its Representatives with information
        as
        to the Companies and their material operations, as reasonably requested by
        Buyer
        and to the extent such information is readily available or could be obtained
        without any material interference with the business or operations of the
        Companies.  Notwithstanding the foregoing, Seller shall not be
        required to provide any information which Seller reasonably believes it or
        the
        Companies are prohibited from providing to Buyer by reason of applicable
        Law,
        which constitutes or allows access to information protected by attorney/client
        privilege, or which Seller or the Companies are required to keep confidential
        or
        prevent access to by reason of any Contract with a third
        party.  Notwithstanding anything contained herein, Buyer shall not be
        permitted during the Interim Period to contact any of the Companies’ vendors,
        customers or suppliers, or any Governmental Entities (except in connection
        with
        applications for governmental approvals in connection with this Agreement)
        regarding the operations or legal status of the Companies without receiving
        prior written authorization from Seller.   Following the Closing,
        Seller shall be entitled to retain copies (at Seller’ sole cost and expense) of
        all books and records relating to its ownership and/or operation of the
        Companies and their businesses; provided that any confidential information
        relating to the Companies retained by Seller shall be subject to the
        requirements of Section 6.4(a) as applicable.

       

      SECTION
        6.2.   Conduct of Business Pending the
        Closing.  (a) From the date of this Agreement
        through the Closing, Seller shall cause the Companies to be operated in the
        ordinary course of business consistent with past practices, and to use
        commercially reasonable efforts to preserve, maintain and protect their assets
        in material compliance with applicable Laws.  Without limiting the
        foregoing, except as otherwise expressly contemplated by this Agreement or
        set
        forth in Schedule 6.2(a) or as consented to by Buyer, which consent shall
        not be unreasonably withheld, conditioned or delayed, Seller shall cause
        the
        Companies not to do the following during the Interim Period:

       

      
        (i)    sell,
          transfer, convey or otherwise dispose of any material assets (i) outside
          the
          ordinary course of business and/or (ii) that represent more than two percent
          (2%) of the total value of the assets of the Companies;

         

        (ii)   merge
          or
          consolidate with any other Person (including with any of the other Companies)
          or
          acquire all or substantially all of the assets of any other Person (other
          than
          one of the other Companies);

         

        (iii)  issue
          or sell any
          equity interests;

         

        (iv)  liquidate,
          dissolve,
          reorganize or otherwise wind up their business or operations;

         

        (v)   purchase
          any
          equity securities of any Person (including securities or shares issued
          by any of
          the Companies), except for short-term investments or cash equivalents made
          in
          the ordinary course of business consistent with past practices;

         

        (vi)  amend
          or modify their
          organizational documents;

         

        (vii) effect
          any recapitalization,
          reclassification or like change in their capitalization;

         

        (viii)except
          in the ordinary course of
          business, acquire any material assets;

         

        (ix)   engage
          in any
          material new line of business;

         

        (x)    make
          any
          material change in their Tax and accounting reporting principles, methods
          or
          policies, except as required by Chilean GAAP or applicable Law;

         

        (xi)   pay
          or make any
          dividend or other distribution;

         

        (xii)  create,
          incur or
          assume any indebtedness, except in an amount not exceeding $20,000,000
          in the
          aggregate;

         

        (xiii) incorporate
          any new related
          or affiliated entity;

         

        (xiv) except
          in the ordinary
          course of business, create or increase in any material respect any salaries,
          wages, commission scales, bonuses or any profit sharing, compensation,
          stock
          option, pension, retirement, deferred compensation, or other employee benefit
          plans, agreements, trust funds or arrangements for the benefit or welfare
          of any
          employee or agent;

         

        (xv)  approve
          or consent to
          the early termination of any Material Contract; or

         

        (xii)   agree
          or commit
          to do any of the foregoing.

         

      

      (b) 
Notwithstanding
        Section
        6.2(a) or any other provision herein, the Companies may take commercially
        reasonable actions with respect to emergency situations and/or to comply
        with
        applicable Laws.

       

      SECTION
        6.3.   Cooperation on Tax
        Matters.  Buyer and Seller shall cooperate fully,
        and shall cause their respective Affiliates to cooperate fully, as and to
        the
        extent reasonably requested by any Party, in connection with the filing of
        Tax
        Returns and any audit, litigation or other proceeding (each a “Tax
        Proceeding”) with respect to such Tax Returns.  Such cooperation
        shall include the retention and (upon a Party’s request) the provision of
        records and information which are reasonably relevant to any such Tax Proceeding
        and making employees available on a mutually convenient basis to provide
        additional information and explanation of any material provided
        hereunder.  The requesting Party shall reimburse the cooperating
        Parties for all reasonable costs and expenses incurred by such cooperating
        Parties.

       

      SECTION
        6.4.   Confidentiality;
        Publicity.  (a) Each Party shall keep confidential
        and shall not disclose to any Person without prior written consent of the
        other
        Party (the “Provider”) the existence or content of this Agreement, all
        confidential information (irrespective of written, oral or any other form)
        received prior to, on or after the date hereof by such Party or its
        representatives and Affiliates (the “Recipient”) from the Provider in
        relation to this Agreement and the transaction contemplated hereby (the
“Confidential Information”); provided, however, that the
        Recipient may disclose, on a need-to-know basis, Confidential Information
        to its
        representatives and Affiliates.  The Recipient shall be liable for any
        breach by its representatives and Affiliates of any of its confidentiality
        obligations contained herein.  Notwithstanding the foregoing, in the
        event that the Recipient or any of its representatives or Affiliates is
        requested pursuant to, or required by, applicable Law or legal process
        (including rules of any national securities exchange) to disclose any
        Confidential Information, the Recipient shall notify the Provider promptly
        so
        that the Provider may seek a protective order or other appropriate remedy
        or, in
        the Provider’s sole discretion, waive compliance with the terms of this
        Agreement.  In the event that no such protective order or other remedy
        is obtained, or that the Provider waives compliance with the terms of this
        Agreement, the Recipient shall furnish only that portion of the Confidential
        Information which the Recipient is advised by counsel is required and will
        exercise all reasonable efforts as are practicable to obtain reliable assurance
        that confidential treatment will be accorded the Confidential
        Information.  Notwithstanding anything to the contrary, however,
        Seller unconditionally shall be permitted to file with the U.S. Securities
        and
        Exchange Commission any information regarding this Agreement or the proposed
        transaction that they deem advisable in their sole
        discretion.  Notwithstanding anything to the contrary, however, Buyer
        unconditionally shall be permitted to file with the Superintendencia de
        Valores y Seguros and Chilean stock exchanges any information regarding
        this Agreement or the proposed transaction that it deems advisable or required
        by law in its sole discretion.  The obligations under this Section
        6.4(a) shall survive until the earlier of (i) the first anniversary of the
        date
        of termination of this Agreement, or (ii) the first anniversary of the Closing
        Date.

       

      (b)  Prior
        to Closing,
        neither Party will make any public announcement or issue any public
        communication (including announcements or communications to employees of
        the
        Companies and interviews with the media) regarding this Agreement or the
        proposed transaction, or any matter related to the foregoing, without the
        prior
        written consent of the other Party (not to be unreasonably withheld), except
        if
        such announcement or other communication is required by, applicable Law or
        legal
        process (including rules of any national securities exchange), in which case
        the
        disclosing party shall, as permitted by applicable Law or legal process,
        first
        allow the other Party at least two (2) Business Days to review such announcement
        or communication and the opportunity to comment thereon,.

       

      SECTION
        6.5.   Post-Closing Books and
        Records.  (a)
        Buyer shall, and to the extent within its powers as majority owner, shall
        cause
        the Companies to, retain, for seven years after the Closing Date, all books,
        records and other documents pertaining to the Companies’ business that relate to
        the period prior to the Closing Date, except for tax returns and supporting
        documentation relating to the Companies’ business or the Companies’ assets which
        shall be retained until sixty (60) days after the date required by applicable
        Laws, and to make the same available after the Closing Date for inspection
        and
        copying by Seller, during regular business hours without significant disruption
        to the Companies’ business and upon reasonable request and upon reasonable
        advance notice.  At and after the expiration of such period, if Seller
        or any of its Affiliates has previously requested in writing that such books
        and
        records be preserved, Buyer shall, and to the extent within its powers as
        majority owner, shall cause the Companies to, either preserve such books
        and
        records for such reasonable period as may be requested by Seller or transfer
        such books and records to Seller or its designated Affiliate at Seller’s
        expense.

       

      (b)  For
        a twelve-month period following the Closing, Buyer shall provide to Seller
        financial and accounting information pertaining to the Companies’ business prior
        to the Closing as reasonably requested by Seller to comply with applicable
        Laws
        and tax and accounting requirements.  This information will be
        provided by the Buyer within the same terms and period that must be filed
        with
        the Superintendencia de Valores y Seguros; provided that any
        confidential information relating to the Companies provided to Seller under
        this
        Section 6.5(b) shall be subject to the requirements of Section 6.4(a) as
        applicable.

       

      SECTION
        6.6.   Expenses.  Except as
        otherwise provided in this Agreement, whether or not the Closing takes place,
        all costs and expenses incurred in connection with this Agreement and the
        transactions contemplated hereby shall be paid by the Party incurring such
        costs
        and expenses.

       

      SECTION
        6.7.   Tender Offer.  (a) No
        later than October 5 2007, to the extent the Buyer Specified Conditions are
        not
        effective and continuing prior to such date, Buyer shall commence a public
        tender offer for all of the issued and outstanding shares of Emel (the
“Tender Offer”), and Buyer shall take any and all other action necessary
        to complete such Tender Offer in full compliance with Chilean Law, including
        announcing its Tender Offer in national publications in Chile in accordance
        with
        Chilean Law; provided that, Buyer agrees (i) to hold its Tender Offer open
        only
        for the minimum period required under Chilean Law, (ii) not to extend the
        period
        of such Tender Offer, (iii) not to revoke or otherwise fail to complete the
        Tender Offer, (iv) not to condition the Tender Offer (including by amendment
        thereto) in any manner other than (A) the expiration of the minimum Tender
        Offer
        period, (B) the tender of shares representing at least 95.4% of the issued
        and
        outstanding shares of Emel, and (C) the issuance by Emel of a certificate
        to the
        effect that the Emel Shares are free and clear of all Liens, (v) to specify
        in
        such Tender Offer to the greatest extent permitted by applicable Law that
        any
        shares tendered pursuant to the Tender Offer may be withdrawn by the offeree
        prior to the completion of the period during which such Tender Offer is held
        open; and (vi) no later than three (3) days after the completion of the Tender
        Offer, to publish a notice of Buyer’s acceptance of the Tender Offer process,
        together with an announcement with the results of the Tender Offer, in national
        publications in Chile in accordance with Chilean Law.  The acquisition
        price offered for each Emel Share in the Tender Offer shall be equal to the
        Per
        Share Price, payable in cash on the Closing Date.

       

      (b)  Seller
        shall, and shall cause its affiliates to, provide Buyer with such information
        and other assistance as Buyer shall reasonably need in connection with the
        Tender Offer and compliance with Chilean Law related thereto.  The
        prospectus and other offering materials prepared by Buyer to effect the Tender
        Offer shall be in a form and in substance reasonably acceptable to Buyer;
        provided, that Buyer shall give Seller such prospectus and offering materials
        and an opportunity to comment thereon at least one (1) Business Day prior
        to the
        filing of such prospectus and offering materials to effect the Tender
        Offer.

      

      (c)  Seller
        shall cause the directors of Emel to, issue an opinion pursuant to Article
        207,
        section (c) of the Chilean Securities Market Law (Law N°18.045).

      

      (d)  Buyer
        shall keep Seller fully informed of all material developments relating to
        the
        Tender Offer, including the commencement, progress and completion of such
        Tender
        Offer.

      

      (e)  Subject
        to Buyer’s compliance with this Section 6.7 or to the extent that the Seller
        Specified Conditions are not effective and continuing as of such date, Seller
        is
        obliged to tender, sell and not to withdraw the Emel Shares and the Buyer
        is
        obliged to purchase the Emel Shares in accordance with the Tender Offer and
        applicable Law; provided that, Seller shall immediately withdraw such tender
        of
        the Emel Shares as permitted by the Tender Offer and applicable Law if this
        Agreement is terminated for any reason pursuant to Article
        IX.   

      

      SECTION
        6.8.   Further Actions. 
        (a) Subject to the terms and conditions of this Agreement, each of Buyer
        and Seller agrees to use its reasonable best efforts (except where a different
        efforts standard is specifically contemplated by this Agreement, in which
        case
        such different standard shall apply) to take, or cause to be taken, all actions
        and to do, or cause to be done, all things necessary, proper or advisable
        to
        consummate and make effective the transactions contemplated by this
        Agreement.

       

      (b) 
        Buyer agrees that the obtaining of required consents and approvals of parties
        to
        contracts with the Companies and their subsidiaries, and any Filings or Consents
        with or from any Governmental Entity, are the responsibility of Buyer and
        that
        Buyer shall use its commercially reasonable efforts to take, or cause to
        be
        taken, all actions and to do, or cause to be done, all things necessary,
        proper
        or advisable to obtain any consents and approvals of parties to contracts
        with
        the Companies or any of their subsidiaries as are required in connection
        with
        the consummation of the transactions contemplated hereby. Without limiting
        the
        foregoing, required actions by Buyer shall include, but not be limited to,
        acceptance by Buyer of any and all divestitures of any subsidiary or assets
        of
        Buyer or its Affiliates or the Companies, acceptance by Buyer or any of its
        Affiliates of any limitation on or condition on the manner in which they
        or any
        of their Affiliates conducts their business, or acceptance of an agreement
        to
        hold any assets of Buyer or its Affiliates or the Companies separate in any
        lawsuit or other legal proceeding, whether judicial or administrative and
        whether required by any applicable Governmental Entity in connection with
        the
        transactions contemplated by this Agreement or any other agreement contemplated
        hereby.  Without limiting the foregoing, from the date hereof through
        the Closing Date, Buyer agrees that except as may be agreed in writing by
        Seller, Buyer shall not, and shall not permit any action, which could reasonably
        be expected to impact the ability of the Parties to secure all required
        government approvals to consummate the transactions hereunder, or take any
        action with any Governmental Entity relating to the foregoing, or agree,
        in
        writing or otherwise, to do any of the foregoing, in each case which could
        reasonably be expected to delay or prevent the consummation of the transactions
        contemplated hereby or result in the failure to satisfy any condition to
        consummation of the transactions contemplated hereby.  Buyer shall
        bear the fees associated with any Filings or Consents with or from any
        Governmental Entity related to the proposed transaction.

       

      (c)  Each
        of Seller and Buyer shall promptly inform the other Party of any material
        communication made to, or received by such Party from, any Governmental Entity
        regarding any of the transactions contemplated hereby.

       

      (d)  From
        and after the Closing Date, Buyer shall take any and all actions, and shall
        cause the Companies and their subsidiaries to take any and all actions, as
        necessary for the payment of any dividends declared by the Companies
        prior to the Closing Date in accordance with Schedule 6.2(a), including the
        payment (as applicable) of the proposed interim dividends in October 2007
        directly or indirectly from one or more of the Companies to the shareholders
        of
        record of Emel (including Seller, as applicable) on the date the dividend
        was
        declared.

       

      ARTICLE
        VII

       

      SPECIFIED
        CONDITIONS

       

      SECTION
        7.1.   Buyer Specified
        Conditions.  The “Buyer Specified
        Conditions” shall mean, with respect to any applicable date specified under this
        Agreement, the following conditions:

       

      (a)           Seller
        shall have failed to perform and satisfy in all material respects each of
        its
        agreements and obligations set forth in this Agreement required to be performed
        and satisfied by Seller at or prior to the applicable date.

       

      (b)           The
        representations and warranties applicable to Seller contained in this Agreement
        shall fail to be true and correct as of the applicable date (without regard
        to
        any express qualifier therein as to materiality or Material Adverse Effect),
        except to the extent such representations and warranties expressly relate
        to an
        earlier date (in which case as of such earlier date) and except for such
        breaches and warranties that, in the aggregate, would not have a Material
        Adverse Effect.

       

      (c)          
        An injunction or other legal prohibition of any Governmental Entity preventing
        the purchase and sale contemplated hereby or the consummation of the
        transactions to be effected by Buyer shall be in effect as of the applicable
        date; provided that Buyer shall have used its commercially reasonable
        efforts to cause any such order, preliminary or permanent injunction, cease
        and
        desist order or other legal restraint or prohibition to be vacated or lifted,
        including, but not limited to, satisfying its obligations under Section
        6.8.

       

      SECTION
        7.2.   Seller Specified
        Conditions. The
        “Seller Specified Conditions” shall mean, with respect to any applicable date
        specified under this Agreement, the following conditions:

       

      (a)           Buyer
        shall have failed to perform and satisfy in all material respects each of
        its
        agreements and obligations set forth in this Agreement required to be performed
        and satisfied by Buyer at or prior to the applicable date, including strict
        compliance with the requirements of Section 6.7(a).

       

      (b)           The
        representations and warranties of Buyer contained in this Agreement, shall
        fail
        to be true and correct in all material respects as of the applicable date
        (without regard to any express qualifier therein as to materiality), except
        to
        the extent such representations and warranties expressly relate to an earlier
        date (in which case as of such earlier date).

       

      (c)           An
        injunction or other legal prohibition of any Governmental Entity preventing
        the
        purchase and sale contemplated hereby or the consummation of the transactions
        to
        be effected by Seller shall be in effect as of the applicable date;
provided that Seller shall have used its commercially reasonable efforts
        to cause any such order, preliminary or permanent injunction, cease and desist
        order or other legal restraint or prohibition to be vacated or lifted,
        including, but not limited to, satisfying its respective obligations under
        Section 6.8.

       

      ARTICLE
        VIII

       

      SURVIVAL;
        INDEMNIFICATION AND RELEASE

       

      SECTION
        8.1.   Survival.

       

      Other
        than Section 3.5 (Title), which shall survive indefinitely and Section 4.3
        (Financial Statements), Section 4.6 (Material Contracts), Section 4.8 (Employee
        Matters), Section 4.9 (Environmental Matters), and Section 4.11 (Taxes),
        each of
        which shall survive for a period of six months after the Closing Date, all
        other
        representations, warranties, covenants and agreements of the Parties contained
        in this Agreement (other than covenants and agreements which by their express
        terms are to be performed after Closing) shall terminate on the Closing Date
        and
        there shall be no liabilities or obligations with respect thereto from and
        after
        the Closing.

       

      SECTION
        8.2.   Indemnification by
        Seller.  

       

      (a)  From
        and after the Closing Date, subject to the other provisions of this Article
        VIII, Seller agrees to indemnify Buyer and its officers, directors, employees
        and Affiliates (collectively, the “Indemnified Buyer Entities”) and to
        hold each of them harmless from and against, any and all Damages suffered,
        paid
        or incurred by such Indemnified Buyer Entity and (i) caused by any breach
        of any
        of the representations and warranties made by Seller to Buyer in Section
        3.5,
        Section 4.3, Section 4.6, Section 4.8, Section 4.9 or Section 4.11 of this
        Agreement, or (ii) caused by any breach by Seller of any of its covenants
        or
        agreements contained in this Agreement (other than any covenant or agreement
        relating solely to periods prior to the Closing).

       

      (b)  Notwithstanding
        anything to the contrary contained in this Section 8.2, the Indemnified Buyer
        Entities shall be entitled to indemnification with respect to any claim for
        indemnification pursuant to Section 8.2(a)(i):

       

      (i)           only
        if the amount of Damages with respect to such claim exceeds the amount of
        $250,000 (any claim involving Damages equal to or less than such amount being
        referred to as a “De Minimis Claim”);

       

      (ii)          only
        if, and then only to the extent that, the aggregate Damages to all Indemnified
        Buyer Entities, with respect to all claims for indemnification pursuant to
        Section 8.2(a)(i) (other than De Minimis Claims), exceed the amount of
        $5,000,000 (the “Deductible”), whereupon (subject to the provisions of
        clause (iii) below) Seller shall be obligated to pay in full all such amounts
        but only to the extent such aggregate Damages are in excess of the amount
        of the
        Deductible; and

       

      (iii)         only
        with respect to claims for indemnification under Section 8.2(a)(i) made on
        or
        before the expiration of the survival period pursuant to Section 8.1 for
        the
        applicable representation or warranty.

       

      (c)  Notwithstanding
        anything to the contrary contained in this Section 8.2, in no event shall
        the
        Indemnified Buyer Entities be entitled to aggregate Damages in excess of
        the
        amount of ten percent (10%) of the Purchase Price (the
“Cap”).  Notwithstanding anything in this Section 8.2 to the
        contrary, a De Minimis Claim, the Deductible and the Cap shall not apply
        to any
        indemnification obligation of Seller related to Section 3.5 (Title);
provided, however, that Seller shall not be required to indemnify
        the Indemnified Buyer Entities for any breach of Section 3.5 for Damages
        in
        excess of the Purchase Price.

       

      SECTION
        8.3.   Indemnification by Buyer.

       

      (a)  From
        and after the Closing, Buyer hereby agrees to indemnify, defend and hold
        Seller
        and its officers, directors, employees and Affiliates (collectively, the
        “Indemnified Seller Entities”) harmless from and against any and all
        Damages, whether arising out of contract, tort, strict liability, other Law
        or
        otherwise, incurred by any of them to the extent arising out of or resulting
        from the ownership and/or operation of the Companies and their assets, whether
        related to any period of time before or after the Closing, except for criminal
        actions or fraud.

       

      (b)  Notwithstanding
        anything to the contrary contained in this Section 8.3, in no event shall
        the
        Indemnified Seller Entities be entitled to aggregate Damages in excess of
        the
        Cap.

       

      SECTION
        8.4.   Indemnification
        Procedures.

       

      (a)  If
        an Indemnified Buyer Entity or an Indemnified Seller Entity (each, an
“Indemnified Entity”) believes that a claim, demand or other
        circumstances exists that has given or may reasonably be expected to give
        rise
        to a right of indemnification under this Article VIII (whether or not the
        amount
        of Damages relating thereto is then quantifiable), such Indemnified Entity
        shall
        assert its claim for indemnification by giving written notice thereof (a
        “Claim Notice”) to the party from which indemnification is sought (the
“Indemnifying Party”) (i) if the event or occurrence giving rise to such
        claim for indemnification is, or relates to, a claim, suit, action or proceeding
        brought by a Person not a party to this Agreement or affiliated with any
        such
        party (a “Third Party”), within ten Business Days following receipt of
        notice of such claim, suit, action or proceeding by such Indemnified Entity,
        or
        (ii) if the event or occurrence giving rise to such action or claim for
        indemnification is not, or does not relate to, a claim brought by a Third
        Party,
        within 30 days after the discovery by the Indemnified Entity of the
        circumstances giving rise to such Claim for indemnity.  Each Claim
        Notice shall describe the claim in reasonable detail.

       

      (b)  If
        any claim or demand by an Indemnified Entity under this Article VIII relates
        to
        a Claim filed or made against an Indemnified Entity by a Third Party, the
        Indemnifying Party may elect at any time to negotiate a settlement or a
        compromise of such action or claim or to defend such action or claim, in
        each
        case at its sole cost and expense (subject to the last sentence of this Section
        8.4(b)) and with its own counsel.  If, within thirty days of receipt
        from an Indemnified Entity of any Claim Notice with respect to a Third Party
        action or claim, the Indemnifying Party (i) advises such Indemnified Entity
        in
        writing that the Indemnifying Party shall not elect to defend, settle or
        compromise such action or claim or (ii) fails to make such an election in
        writing, such Indemnified Entity may (subject to the Indemnifying Party’s
        continuing right of election in the preceding sentence), at its option, defend,
        settle or otherwise compromise or pay such action or claim; provided,
        that any such settlement or compromise shall be permitted hereunder only
        with
        the written consent of the Indemnifying Party, which consent shall not be
        unreasonably withheld.  Unless and until the Indemnifying Party makes
        an election in accordance with this Section 8.4(b) to defend, settle or
        compromise such action, all of the Indemnified Entity’s reasonable costs and
        expenses arising out of the defense, settlement or compromise of any such
        action
        or claim shall be Damages subject to indemnification hereunder to the extent
        provided herein.  Each Indemnified Entity shall make available to the
        Indemnifying Party all information reasonably available to such Indemnified
        Entity relating to such action or claim.  In addition, the parties
        shall render to each other such assistance as may reasonably be requested
        in
        order to ensure the proper and adequate defense of any such action or
        claim.  The Party in charge of the defense shall keep the other
        Parties fully apprised at all times as to the status of the defense or any
        settlement negotiations with respect thereto.  If the Indemnifying
        Party elects to defend any such action or claim, then the Indemnified Entity
        shall be entitled to participate in such defense with counsel reasonably
        acceptable to the Indemnifying Party, at such Indemnified Entity’s sole cost and
        expense.  In the event the Indemnifying Party assumes the defense of
        (or otherwise elects to negotiate or settle or compromise) any action or
        claim
        as described above, the Indemnified Entity shall reimburse the Indemnifying
        Party for all costs and expenses incurred by the Indemnifying Party in
        connection with such defense (or negotiation, settlement or compromise) to
        the
        extent, if applicable, that such costs and expenses do not exceed the amount
        of
        the remaining Deductible.

       

      SECTION
        8.5.   General.

       

      (a)  Each
        Indemnified Entity shall be obligated in connection with any claim for
        indemnification under this Article VIII to use all commercially reasonable
        efforts to obtain any insurance proceeds available to such Indemnified Entity
        with regard to the applicable claims and to recover any amounts to which
        it may
        be entitled in respect of the applicable claims pursuant to contractual or
        other
        indemnification rights that any of the Companies may have against Third
        Parties.  The amount which the Indemnifying Party is or may be
        required to pay to any Indemnified Entity pursuant to this Article VIII shall
        be
        reduced (retroactively, if necessary) by any insurance proceeds, tax benefits
        or
        other amounts actually recovered by or on behalf of such Indemnified Entity
        in
        reduction of the related Damages.  If an Indemnified Entity shall have
        received the payment required by this Agreement from the Indemnifying Party
        in
        respect of Damages and shall subsequently receive insurance proceeds, tax
        benefits or other amounts in respect of such Damages, then such Indemnified
        Entity shall promptly repay to the Indemnifying Party a sum equal to the
        amount
        of such insurance proceeds, tax benefits or other amounts actually
        received.

       

      (b)  In
        addition to the requirements of Section 8.5(a), each Indemnified Entity
        shall be obligated in connection with any claim for indemnification under
        this
        Article VIII to use all commercially reasonable efforts to mitigate Damages
        upon
        and after becoming aware of any event which could reasonably be expected
        to give
        rise to such Damages.

       

      (c)  Subject
        to the rights of any insurance carriers contemplated in Section 8.5(a) above,
        the Indemnifying Party shall be subrogated to any right of action that the
        Indemnified Entity may have against any other Person with respect to any
        matter
        giving rise to a claim for indemnification hereunder.

       

      (d)  If
        on or before the Closing Date a Party has Knowledge of the existence of claims
        or other events or occurrences for which it or its officers, directors,
        employees or Affiliates would be entitled to indemnification under this Article
        VIII, such Party shall notify the other Party of such claims or other events
        or
        occurrences prior to Closing.

       

      (e)  The
        indemnification provided in this Article VIII shall be the exclusive
        post-Closing remedy available to any Party hereto with respect to any breach
        of
        any representation, warranty, covenant or agreement in this Agreement, or
        otherwise in respect of the transactions contemplated by this Agreement,
        except
        as otherwise expressly provided in this Agreement.

       

      SECTION
        8.6.    “As Is” Sale; Release.

       

      (a)  EXCEPT
        FOR THOSE EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN ARTICLE III
        AND
        ARTICLE IV, (i) THE COMPANIES AND SELLER’S INTEREST IN THE EMEL SHARES ARE BEING
        TRANSFERRED “AS IS, WHERE IS, WITH ALL FAULTS,” AND (ii) SELLER EXPRESSLY
        DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS
        OR
        IMPLIED, AS TO THE CONDITION, VALUE OR QUALITY OF THE COMPANIES OR THE EMEL
        SHARES OR THE PROSPECTS (FINANCIAL OR OTHERWISE), RISKS AND OTHER INCIDENTS
        OF
        THE COMPANIES AND THEIR ASSETS.

       

      (b)  Except
        for the obligations of Seller under this Agreement, for and in consideration
        of
        the transfer of the Emel Shares, effective as of the Closing Date, Buyer
        hereby
        absolutely and unconditionally releases, acquits and forever discharges,
        and
        shall cause each of its Affiliates (including the Companies) to absolutely
        and
        unconditionally release, acquit and forever discharge, Seller and its
        Affiliates, each of their present and former officers, directors, managers,
        employees and agents and each of their respective heirs, executors,
        administrators, successors and assigns, from any and all costs, expenses,
        damages, debts, or any other obligations, liabilities and claims whatsoever,
        whether known or unknown, both in law and in equity, in each case to the
        extent
        arising out of or resulting from the ownership and/or operation of the
        Companies, or the assets, business, operations, conduct, services, products
        and/or employees (including former employees) of any of the Companies (and
        any
        predecessors), whether related to any period of time before or after the
        Closing
        Date, except for criminal actions or fraud; provided, however,
        that in the event Buyer’s Affiliates are sued by Seller or its Affiliates for
        any matter subject to this release, Buyer’s Affiliates shall have the right to
        raise any defenses or counterclaims in connection with such
        lawsuits.

       

      SECTION
        8.7.   Right
        to Specific Performance; Certain Limitations.

      Notwithstanding
        anything in this Agreement to the contrary:

       

      (a)  Without
        limiting or waiving in any respect any rights or remedies of a Party under
        this
        Agreement now or hereafter existing at law, in equity or by statute, each
        of the
        Parties hereto shall be entitled to specific performance of the obligations
        to
        be performed by the other Parties in accordance with the provisions of this
        Agreement;

       

      (b)  No
        Representative, Affiliate of, or direct or indirect equity owner in, Seller
        shall have any personal liability to Buyer or any other Person as a result
        of
        the breach of any representation, warranty, covenant, agreement or obligation
        of
        Seller in this Agreement and no Representative, Affiliate of, or indirect
        equity
        owner in, Buyer shall have any personal liability to Seller or any other
        Person
        as a result of the breach of any representation, warranty, covenant, agreement
        or obligation of Buyer in this Agreement; and

       

      (c)  No
        Party shall be liable for special, punitive, exemplary, incidental,
        consequential or indirect damages, or lost profits, or losses calculated
        by
        reference to any multiple of earnings or earnings before interest, tax,
        depreciation or amortization (or any other valuation methodology) whether
        based
        on contract, tort, strict liability, other Law or otherwise and whether or
        not
        arising from the other Party’s sole, joint or concurrent negligence, strict
        liability or other fault for any matter relating to this Agreement and the
        transactions contemplated hereby.

       

      ARTICLE
        IX

       

      TERMINATION,
        AMENDMENT AND WAIVER

       

      SECTION
        9.1.   Grounds
        for Termination.

       

      This
        Agreement may be terminated:

       

      (a)           by
        either Buyer or Seller (provided that the terminating Party is not then
        in material breach of any representation, warranty, covenant or other agreement
        contained herein) if the Closing shall not have occurred or is not reasonably
        likely to occur within seventy-five (75) days of the date of this
        Agreement;

       

      (b)           
        by Buyer (provided that Buyer is not then in material breach of any
        representation, warranty, covenant or other agreement contained herein) if
        any
        of the Buyer Specified Conditions are in effect and could reasonably be expected
        to remain in effect through the time period specified in Section 9.1(a)
        (including as a result of a failure of a covenant or agreement of Seller
        to be
        satisfied as of the time specified for such action under the
        Agreement);

       

      (c)           by
        Seller (provided that Seller is not then in material breach of any
        representation, warranty, covenant or other agreement contained herein) if
        any
        of the Seller Specified Conditions are in effect and could reasonably be
        expected to remain in effect through the time period specified in Section
        9.1(a)
        (including as a result of a failure of a covenant or agreement of Seller
        to be
        satisfied as of the time specified for such action under the Agreement);
        or

       

      (d)           at
        any time prior to the Closing Date by mutual written agreement of Buyer and
        Seller.

       

      

      SECTION
        9.2.   Effect
        of Termination. 

       

      In
        addition to the actions required under the proviso to Section 6.7(d), if
        this
        Agreement is terminated as permitted by Section 9.1, such termination shall
        be
        without liability of any Party to the other Parties, except liability for
        any
        breach of any representations, warranties, covenants or other agreements
        under
        this Agreement prior to such termination, or under the following provisions,
        which shall also survive termination: Section 6.4(a), Section 6.4(b) (which
        shall only survive for one year after such termination), Section 6.6, Section
        6.7(d) (proviso only), Article IX and Article X.

       

      SECTION
        9.3.   Amendments
        and Waivers.  This
        Agreement may not be amended except by an instrument in writing signed on
        behalf
        of Buyer and Seller.  The Parties hereto may, by an instrument in
        writing signed on behalf of such Party, waive compliance by any other Party
        with
        any term or provision of this Agreement that such other Party was or is
        obligated to comply with or perform.  No failure or delay by any Party
        in exercising any right, power or privilege hereunder shall operate as a
        waiver
        thereof nor shall any single or partial exercise thereof preclude any other
        or
        further exercise thereof or the exercise of any other right, power or
        privilege.  Except as otherwise provided herein, the rights and
        remedies herein provided shall be cumulative and not exclusive of any rights
        or
        remedies provided by law.

       

      ARTICLE
        X

       

      MISCELLANEOUS

       

      SECTION
        10.1.   Notices. All
        notices, requests and other communications hereunder shall be in writing
        (including wire, telefax or similar writing) and shall be sent, delivered
        or
        mailed, addressed, or telefaxed:

       

      (a)  if
        to Buyer, to:

       

      Pablo
        Guarda

      Gerente

        General

      Compañía
        General de Electricidad

      Teatinos
        280, 19th Floor, Santiago, Chile

      Fax:
        +562-680-7104

       

      with
        a
        copy to:

       

      Antonio
        Jaar

      Gerente
        Estudios Corporativos

      Compañía
        General de Electricidad

      Teatinos
        280, 19th Floor, Santiago, Chile

      Fax:
        +562-680-7104

       

      (b)  if
        to Seller, to:

       

      Robert
        W.
        Burke, Jr.

      Vice
        President and Chief Counsel

      PPL
        Global, LLC

      2
        North
        Ninth Street

      Allentown,
        Pennsylvania 18101

      Fax:
        (610) 774-2083

       

      with
        copies to:

       

      Rick
        Klingensmith

      President
        of PPL Global, LLC (at the above address)

       

      and

      

        Simpson
          Thacher & Bartlett LLP

        425
          Lexington Avenue

        New
          York,
          New York 10017

        Attention:  Vince
          Pagano

                      
Fax:  (212)
          455-2502

      

       

      Each
        such
        notice, request or other communication shall be given (i) by mail (postage
        prepaid, registered or certified mail, return receipt requested), (ii) by
        hand
        delivery, (iii) by internationally recognized courier service or (iv) by
        telefax, receipt confirmed (with a confirmation copy to be sent by first
        class
        mail; provided that the failure to send such confirmation copy shall not
        prevent such telefax notice from being effective).  Each such notice,
        request or communication shall be effective (i) if mailed, three calendar
        days
        after mailing at the address specified in this Section 10.1 (or in accordance
        with the latest unrevoked written direction from such Party), (ii) if delivered
        by hand or by internationally recognized courier service, when delivered
        at the
        address specified in this Section 10.1 (or in accordance with the latest
        unrevoked written direction from the receiving Party) and (iii) if given
        by
        telefax, when such telefax is transmitted to the telefax number specified
        in
        this Section 10.1 (or in accordance with the latest unrevoked written direction
        from the receiving Party), and the appropriate confirmation is received;
        provided that notices received on a day that is not a Business Day or
        after the close of business on a Business Day will be deemed to be effective
        on
        the next Business Day.

       

      SECTION
        10.2.   Severability. The
        provisions of this Agreement shall be deemed severable and the invalidity
        or
        unenforceability of any provision shall not affect the validity or
        enforceability of the other provisions hereof.  If any provision of
        this Agreement, or the application thereof to any Person or any circumstance,
        is
        found to be invalid or unenforceable in any jurisdiction, (a) a suitable
        and
        equitable provision shall be substituted therefor in order to carry out,
        so far
        as may be valid or enforceable, such provision and (b) the remainder of this
        Agreement and the application of such provision to other Persons or
        circumstances shall not be affected by such invalidity or unenforceability,
        nor
        shall such invalidity or unenforceability affect the validity or enforceability
        of such provision, or the application thereof, in any other
        jurisdiction.

       

      SECTION
        10.3.   Counterparts. This
        Agreement may be executed in two or more counterparts, each of which shall
        be
        deemed an original and all of which shall, taken together, be considered
        one and
        the same agreement.

       

      SECTION
        10.4.   Entire
        Agreement; No Third Party Beneficiaries. This
        Agreement (together with the agreements, Schedules and certificates referred
        to
        herein or delivered pursuant hereto) (a) constitutes the entire agreement
        and
        supersedes all prior agreements and understandings, both written and oral,
        among
        the Parties with respect to the subject matter hereof (including the
        Confidentiality Agreement, dated June 22, 2007) and (b) is not intended to
        confer upon any Person (including any employee of the Companies) any rights
        or
        remedies hereunder.

       

      SECTION
        10.5.   Governing
        Law. This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of New York.

       

      SECTION
        10.6.   Specific
        Performance. The
        Parties agree that irreparable damage would occur in the event that the
        provisions of this Agreement were not performed in accordance with its specific
        terms and that any remedy at law for any breach of the provisions of this
        Agreement would be inadequate.  Accordingly, it is agreed that the
        Parties shall be entitled to an injunction or injunctions to enforce
        specifically the terms and provisions hereof in any court of law of the United
        States or any state having jurisdiction, this being in addition to any other
        remedy to which they are entitled at law or in equity.

       

      SECTION
        10.7.   Consent
        to Jurisdiction; Waiver of Jury Trial. Each
        of the Parties hereto irrevocably submits to the exclusive jurisdiction of
        the
        United States District Court for the Southern District of New York located
        in
        the borough of Manhattan in the City of New York, or if such court does not
        have
        jurisdiction, the Supreme Court of the State of New York, New York County,
        for
        the purposes of any suit, action or other proceeding arising out of this
        Agreement or any transaction contemplated hereby.  Each of the Parties
        hereto further agrees that service of any process, summons, notice or document
        by U.S. certified mail to such Party’s respective address set forth in Section
        10.1 shall be effective service of process for any action, suit or proceeding
        in
        New York with respect to any matters to which it has submitted to jurisdiction
        as set forth above in the immediately preceding sentence.  Each of the
        Parties hereto irrevocably and unconditionally waives any objection to the
        laying of venue of any action, suit or proceeding arising out of this Agreement
        or the transactions contemplated hereby in (a) the United States District
        Court
        for the Southern District of New York or (b) the Supreme Court of the State
        of
        New York, New York County, and hereby further irrevocably and unconditionally
        waives and agrees not to plead or claim in any such court that any such action,
        suit or proceeding brought in any such court has been brought in an inconvenient
        forum.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND
        ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED
        TO
        THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

       

      SECTION
        10.8.   Assignment..  Neither
        this Agreement nor any of the rights or obligations hereunder shall be assigned
        by any of the Parties hereto without the prior written consent of the other
        Party; provided that Buyer may transfer its rights and obligations under
        this Agreement to an affiliated partnership or corporation for purposes of
        having such partnership or corporation take ownership of the Emel Shares
        so long
        as Buyer remains jointly and severally obligated to satisfy all of Buyer’s
        obligations under the terms of this Agreement.  Subject to the
        preceding sentence, this Agreement will be binding upon, inure to the benefit
        of
        and be enforceable by the Parties and their respective successors and permitted
        assigns.  Any attempted assignment in violation of the terms of this
        Section 10.8 shall be null and void, abinitio.

       

      SECTION
        10.9.   Headings. The
        headings contained in this Agreement are for reference purposes only and
        shall
        not affect in any way the meaning or interpretation of this
        Agreement.

       

      SECTION
        10.10.   Construction.  References
        in this Agreement to any gender include references to all genders, and
        references to the singular include references to the plural and vice
        versa.  The words “include”, “includes” and “including” when used in
        this Agreement shall be deemed to be followed by the phrase “without
        limitation”.  Unless the context otherwise requires, references in
        this Agreement to Articles, Sections, Exhibits, Schedules, Appendices and
        Attachments shall be deemed references to Articles and Sections of, and
        Exhibits, Schedules, Appendices and Attachments to, such
        Agreement.  Unless the context otherwise requires, the words “hereof”,
“hereby” and “herein” and words of similar meaning when used in this Agreement
        refer to this Agreement in its entirety and not to any particular Article,
        Section or provision of this Agreement.

       

      SECTION
        10.11.   Schedules
        and Exhibits.  Except as otherwise provided in
        this Agreement, all Exhibits and Schedules referred to herein are intended
        to be
        and hereby are made a part of this Agreement. Any disclosure in any Party’s
        Schedule under this Agreement corresponding to and qualifying a specific
        numbered paragraph shall be deemed to correspond to and qualify any other
        numbered paragraph relating to such Party to which the applicability of the
        disclosure is readily apparent.  Certain information set forth in the
        Schedules is included solely for informational purposes, is not an admission
        of
        liability with respect to the matters covered by the information, and may
        not be
        required to be disclosed pursuant to this Agreement.  The
        specification of any dollar amount in the representations and warranties
        contained in this Agreement or the inclusion of any specific item in the
        Schedules is not intended to imply that such amounts (or higher or lower
        amounts) are or are not material, and no Party shall use the fact of the
        setting
        of such amounts or the fact of the inclusion of any such item in the Schedules
        in any dispute or controversy between the parties as to whether any obligation,
        item, or matter not described herein or included in a Schedule is or is not
        material for purposes of this Agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed
        as
        of the day and year first above written.

       

       

      
        
          	 	 	
                  PPL
                    Chile Energía Limitada

                
	 	 	 	 
	 	 	
                  By:

                	
                  /s/
                    Rick L.
                    Klingensmith              

                  Name:  Rick
                    L. Klingensmith

                  Title:  Authorized
                    Representative

                

        

        

        
          	 	 	
                  Compañía
                    General de Electricidad

                
	 	 	 	 
	 	 	
                  By:

                	
                  /s/
                    Pablo
                    Guarda                            

                  Name:  Pablo
                    Guarda

                  Title:  General
                    Manager

                

        

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        
Appendix A

       

      As
        used
        in the Agreement, the following terms have the following meanings:

       

      An
        “Affiliate” of any Person means any
        other Person that directly or indirectly, through one or more intermediaries,
        controls, is controlled by, or is under common control with, such first
        Person.

       

      “Agreement”
        means this Stock Purchase Agreement dated as of September 12, 2007 by and
        between Seller and Buyer, including the Schedules thereto, as it may be amended
        from time to time.

       

      “Business
        Day” means any day when banks in Chile and in the State
        of
        New York are open.

       

      “Buyer”
        has the meaning set forth in the heading of the Agreement.

       

      “Buyer
        Specified Conditions” has the meaning set forth in Section
        7.1.

       

      “Cap”
        has the meaning set forth in Section 8.2(c).

       

      “Chilean
        GAAP” means generally accepted accounting principles in Chile, as
        consistently applied by Emel and the other Companies in accordance with their
        past practices, including the accounting principles required by the Chilean
        Superintendencia de Valores y Seguros.

       

      “Claim”
        means any demand, claim, action, legal proceeding (whether at law or in equity),
        investigation or arbitration.

       

      “Claim
        Notice” has the meaning set forth in Section 8.4(a).

       

       “Closing”
        has the meaning set forth in Section 2.1.

       

      “Closing
        Date” has the meaning set forth in Section
        2.1.

       

      “Companies”
        has the meaning set forth in the heading of the Agreement.

       

      “Company
        Plans” means any material compensation and employee
        benefit, severance or employment plan, program or agreement, and vacation,
        incentive, bonus, program or policy sponsored or maintained by the Companies
        for
        the benefit of its employees (other than any plans required by applicable
        Law to
        be adopted, sponsored or maintained).

       

      “Company
        Shares” has the meaning set forth in the
        Recitals.

       

      “Computer
        Program” has the meaning set forth in Section 4.12(b).

       

      “Confidential
        Information” has the meaning set forth in Section
        6.4(a).

       

      “Consent”
        has the meaning set forth in Section 3.3.

       

      “Contract”
        means any written contract, lease, license, evidence of indebtedness, mortgage,
        indenture, purchase order, binding bid, letter of credit, security agreement,
        undertaking or other agreement that is legally binding.

       

      The
        term
“control” (including its correlative
        meanings “controlled
        by” and “under
        common control with”) means possession, directly or
        indirectly, of the power to direct or cause the direction of management or
        policies (whether through ownership of securities or partnership or other
        ownership interests, by contract or otherwise).

       

      “Damages”
        means any and all claims, injuries, lawsuits, liabilities, losses, damages,
        judgments, fines, penalties, deficiencies, costs and expenses, including
        the
        reasonable fees and disbursements of counsel (including fees of attorneys
        and
        paralegals, whether at the pre-trial, trial, or appellate level, or in
        arbitration) and all amounts reasonably paid in investigation, defense, or
        settlement of any of the foregoing.

       

      “De
        Minimis Claim” has the meaning set forth in Section 8.2(b)(i).

       

      “Deductible”
        has the meaning set forth in Section 8.2(b)(ii).

       

      “Emel
        Shares” has the meaning set forth in the
        Recitals.

       

      “Environmental
        Law” means any applicable Chilean law, statute, ordinance,
        rule, regulation, permit or order of any Chilean Governmental Entity relating
        to
        (a) the protection, preservation or restoration of the environment (including
        air, surface water, groundwater, drinking water supply, surface land, subsurface
        land, plant and animal life or any other natural resource), or (b) the exposure
        to, or the use, storage, recycling, treatment, generation, transportation,
        processing, handling, labeling, production, release or disposal of Hazardous
        Substances.

       

      “Filing”
        has the meaning set forth in Section 3.3.

       

      “Financial
        Statements” has the meaning set forth in Section
        4.3(a).

       

      “Governmental
        Entity” means any governmental authority, court, government
        or self-regulatory organization, commission, tribunal or organization or
        any
        regulatory, administrative or other agency, or any political or other
        subdivision, department or branch of any of the foregoing.

       

       “Hazardous
        Substance” means any substance or material listed, defined
        or classified as a pollutant, contaminant, hazardous substance, toxic substance,
        hazardous waste, solid waste or special waste under any applicable Environmental
        Law or that could otherwise reasonably be expected to result in liability
        under
        or relating to any Environmental Law, including, petroleum, petroleum products,
        volatile organic compounds, semi-volatile organic
        compounds,  pesticides, polychlorinated biphenyls, arsenic, barium,
        beryllium, cadmium, chromium, copper, lead, nickel, vanadium, and asbestos
        and
        asbestos-containing materials.

       

      “Indemnified
        Buyer Entity” has the meaning set forth in Section 8.2(a).

       

      “Indemnified
        Entity” has the meaning set forth in Section 8.4(a).

       

      “Indemnified
        Seller Entity” has the meaning set forth in Section 8.3(a).

       

      “Indemnifying
        Party” has the meaning set forth in Section 8.4(a).

       

      “Interim
        Period” means the period beginning on the date hereof and ending at the
        earlier of the commencement of the Tender Offer or the Closing.

       

      “Inversiones”
        has the meaning set forth in the Recitals.

       

      “Knowledge”
        means, (i) in the case of Seller, the actual knowledge (as opposed to any
        constructive or imputed knowledge) of the individuals listed on Schedule
        1(a), and (ii) in the case of Buyer, the actual knowledge (as opposed to
        any
        constructive or imputed knowledge) of the individuals listed on Schedule
        1(b).

       

      “Law”
        means, with respect to any Person, any statute, law, ordinance, rule,
        administrative interpretation, regulation, order, writ, injunction, directive,
        judgment, decree or other requirement of any Governmental Entity directly
        applicable to such Person or any of its respective properties or assets,
        as
        amended from time to time.

       

      “Liabilities”
        has the meaning set forth in Section 4.12.

       

      “Lien”
        means any mortgage, pledge, assessment, security interest, lien, adverse
        claim,
        levy, encroachment, right of first option, or other similar encumbrance or
        restriction.

       

      “Material
        Adverse Effect” means any change or event or effect that is materially
        adverse to (i) the assets, liabilities, operations or condition of the
        Companies, taken as a whole, in each case, except for any such change, event
        or
        effect resulting from or arising out of (a) changes in economic conditions
        generally or in the industry in which the Companies operate (including the
        electric generating, transmission or distribution industries), whether
        international, national, regional or local, (b) changes in international,
        national, regional, state or local wholesale or retail markets for electric
        power or fuel supply or transportation or related products, including those
        due
        to actions by competitors, (c) changes in general regulatory or political
        conditions, including any acts of war or terrorist activities, (d) changes
        in
        national, regional, state or local electric transmission or distribution
        systems, (e) strikes, work stoppages or other labor disturbances, (f) increases
        in the costs of commodities or supplies, including fuel, (g) effects of weather
        or meteorological events, (h) any change of Law or regulatory policy, (i)
        changes or adverse conditions in the securities markets, including those
        relating to debt financing, (j) the announcement, execution or delivery of
        this
        Agreement or the consummation of the transactions contemplated hereby, and
        (k)
        any actions specifically required to be taken or consented to pursuant to
        or in
        accordance with this Agreement or (ii) any of the Seller’s ability to perform
        its obligations hereunder.

       

      “Material
        Contracts” means all Contracts requiring or guaranteeing (including by
        collateral signature, surety, or joint and several debt) payments in excess
        of
        US$2,500,000 per annum, or which contain any covenant restricting the ability
        of
        the Companies to compete or to engage in any activity or business.

       

      “Party”
        or “Parties” means Seller and Buyer, individually, a “Party”, and
        collectively as the “Parties”.   

       

      “Permitted
        Lien” has the meaning set forth in Section 4.7.

       

      “Per
        Share Price” has the meaning set forth in Section 2.1.

       

      “Person”
        means any individual, corporation, partnership, joint venture, trust,
        association, organization, Governmental Entity or other entity.

       

      “Provider”
        has the meaning set forth in Section 6.4(a).

       

      “Purchase
        Price” has the meaning set forth in Section 2.1.

       

      “Recipient”
        has the meaning set forth in Section 6.4(a).

       

      “Related
        Party Agreement” has the meaning set forth in Section 4.13(a).

       

      “Representatives”
        means the officers, directors, managers, employees, counsel, accountants,
        financial advisers or consultants of a Person.   

       

      “Securities
        Act” has the meaning set forth in Section 5.8.

       

      “Seller”
        has the meaning set forth in the heading of the Agreement.

       

      “Seller
        Specified Conditions” has the meaning set forth in Section
        7.2.

       

      “Senior
        Management” means any of the managers with the following titles: Gerente
        General, Gerente Comercial, Gerente de Estudios y Tarifas, Gerente de Finanzas,
        Gerente de Operaciones, Gerente de Servicios y Negocios, Gerente de Regulación,
        Gerente de Higiene y Seguridad, Asesor Jurídico, and Gerente de Planificación
        Estratégica.

       

      “Tax”
        or “Taxes” means any Chilean or other foreign income, profits, franchise,
        withholding, ad valorem, personal property (tangible and intangible),
        employment, payroll, sales and use, social security, disability, occupation,
        real property, severance, excise and other taxes, charges, levies or other
        assessments imposed by a Taxing Authority, including any interest, penalty
        or
        addition thereto.

       

      “Tax
        Proceeding” has the meaning set forth in Section 6.3(c).

       

      “Tax
        Returns” means any return, report or similar statement required to be filed
        with respect to any Taxes (including any attached schedules), including any
        information return, claim for refund, amended return and declaration of
        estimated Tax.

       

      “Taxing
        Authority” means, with respect to any Tax, the governmental entity or
        political subdivision thereof that imposes such Tax, and the agency (if any)
        charged with the collection of such Tax for such entity or
        subdivision.

       

      “Tender
        Offer” has the meaning set forth in Section 6.7.

       

      “Third
        Party” has the meaning set forth in Section
        8.4(a).ex10128.htm

    
      
         

      

      
         

        
          

        

      

      
         

              

                  Exhibit
            10.128      
    

      

    

    EXECUTION
      COPY

     

    LETTER
      AGREEMENT

     

    Effective
      as of October 31, 2007

     

    

     

    Reference
      is made to (a) that certain
      Membership Interest Purchase and Contribution Agreement by and among Mr. Stanley
      C. Gale, SCG Holding Corp., Mack-Cali Realty Acquisition Corp. (“MCRAC”)
      and Mack-Cali Realty, L.P. (“MCRLP”) dated as of March 7, 2006 and as
      amended through the date hereof (the “Contribution Agreement”), and (b)
      that certain Non-Portfolio Property Interest Contribution Agreement by and
      among
      Mr. Stanley C. Gale, Mr. Mark Yeager, GCF II Investor LLC, The Gale
      Investments Company, LLC (“Gale Investments”), Gale & Wentworth
      Vreeland, LLC, Gale Urban Solutions LLC, MSGW-ONE Campus Investors, LLC, MCRAC
      and MCRLP dated as of May 9, 2006 (the “Non-Portfolio Property
      Agreement”).  Capitalized terms used herein and not defined shall
      have the meaning ascribed to such terms in the Contribution Agreement or the
      Non-Portfolio Property Agreement, as applicable.

    

    WHEREAS,
      the
      undersigned parties have entered into a series of transactions pursuant to
      the
      Contribution Agreement and the Non-Portfolio Property Agreement with respect
      to
      the development, management and ownership of the real property that is the
      subject of such agreements; and

    

    WHEREAS,
      the
      undersigned parties desire to enter into this Letter Agreement to memorialize
      the understanding of the parties with respect to certain elements of the subject
      transactions and to make certain revisions to such agreements.

    

    NOW,
      THEREFORE, for and in consideration of the amounts set forth
      herein below, the mutual promises herein contained and other valuable
      consideration, the receipt and sufficiency of which are hereby acknowledged
      by
      each party hereto, and intending to be legally bound hereby, the parties hereby
      agree as follows:

     

    

    
      	
              1.  

            	
              Assignment
                and Assumption of M-C Belmar, LLC Membership
                Interests.

            

    

    

    
      	
              a.  

            	
              Mack-Cali
                Belmar Realty, LLC (“Mack Belmar”), the owner of a 99.9% Percentage
                Interest in M-C Belmar, LLC, a Delaware limited liability company
                (“M-C
                Belmar”), without representation or warranty except as set forth
                herein, hereby sells, transfers, assigns, delivers and conveys to
                Gale
                Investments its successors and assigns, all rights, title and interests
                in
                and to a 49.8% Percentage Interest in M-C Belmar (the “Transferred
                Interests”), and Gale Investments hereby accepts the Transferred
                Interests from Mack Belmar, it being expressly understood and agreed
                that
                such transfer is without assumption of any rights, obligations and
                liabilities of Mack Belmar heretofore or hereafter accrued with respect
                to
                the Transferred Interests under or pursuant to that certain Limited
                Liability Company Operating Agreement of M-C Belmar dated as of June
                15,
                2006 (the “M-C Belmar Operating Agreement”) and as hereinafter
                amended to reflect the transaction set forth
                herein.

            

    

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    
      	
              b.  

            	
              For
                and in consideration of the Transferred Interests, each member of
                M-C
                Belmar hereby agrees to a restatement of its capital account balance
                and
                to modify the terms of the M-C Belmar Operating Agreement relating
                to the
                distribution of Net Cash Flows (as defined in the M-C Belmar Operating
                Agreement) as follows (collectively, the “Amended Belmar
                Interests”):

            

    

    

    
      	
              i.  

            	
              The
                capital account of Mack Belmar in M-C Belmar shall be debited
                $2,000,000;

            

    

    

    
      	
              ii.  

            	
              The
                capital account of Gale Investments in M-C Belmar shall be credited
                with a
                deemed contribution of $2,000,000 (the “Gale Contribution
                Amount”);

            

    

    

    
      	
              iii.  

            	
              Mack
                Belmar’s right to receive the CLI Investor Preferential Return shall be
                terminated;

            

    

    

    
      	
              iv.  

            	
              The
                distribution of Net Cash Flows shall be
                payable:

            

    

    

    
      	
              1.  

            	
              First,
                to Mack Belmar until it shall have received payments of Net Cash
                Flows
                equal to the aggregate amount of all funds invested by Mack Belmar
                in M-C
                Belmar less the Gale Contribution
                Amount;

            

    

    

    
      	
              2.  

            	
              Second,
                to Gale Investments until it shall have received payments of Net
                Cash
                Flows equal to the Gale Contribution Amount;
                and

            

    

    

    
      	
              3.  

            	
              Thereafter,
                to Mack Belmar and Gale Investments in accordance with their respective
                Payout Percentages (as defined in the M-C Belmar Operating
                Agreement).

            

    

    

    
      	
              c.  

            	
              The
                parties hereto shall negotiate in good faith to modify the M-C Belmar
                Operating Agreement so as to effect the intent of the parties as
                closely
                as possible in an acceptable manner in order that the transactions
                contemplated by this Agreement are consummated to the greatest extent
                possible, it being expressly understood that Mack Belmar shall remain
                the
                majority holder of the Percentage Interests in M-C Belmar and continue
                to
                exercise sole management control of M-C
                Belmar.

            

    

    

    
      	
              2.  

            	
              Acceleration
                of Earnout Payments.  Notwithstanding anything to the
                contrary in that certain Amendment No. 8 to the Contribution Agreement
                dated as of May 23, 2007, it is expressly understood and agreed by
                MCRLP
                and the Sellers that the aggregate $6,000,000 in payments due to
                the
                Sellers from MCRLP in two equal installments on May 9, 2008 and May
                9,
                2009 pursuant to Section 2.02(c) of the Contribution Agreement, as
                amended, shall be deemed to be paid in full on the date hereof and
                shall
                consist of the following:

            

    

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
 

    
      	
              a.  

            	
              $4,000,000
                in cash to be paid by MCRLP or its affiliate to the Sellers;
                and

            

    

    

    
      	
              b.  

            	
              The
                issuance of the Transferred Interests in consideration of the Amended
                Belmar Interests.

            

    

    

    it
      being
      expressly understood by the parties that these transactions shall be deemed
      accomplished by a wire transfer of immediately available funds of $4,000,000
      by
      MCRLP or its affiliate to Gale Investments or its designated affiliate pursuant
      to wire transfer instructions attached hereto as Exhibit A.

    

    
      	
              3.  

            	
              Excluded
                Assets.

            

    

    

    
      	
              a.  

            	
              It
                is mutually acknowledged and agreed by the parties to this Agreement
                that
                any commissions (the “Commissions”) payable to The Gale Real Estate
                Advisors Company, L.L.C. (“Gale Advisors”) in connection with that
                certain Expansion Option Agreement by and between Gale 55 Corporate
                Associates II, LLC (“Gale II”) and Aventis Inc. (the “Expansion
                Option Agreement”) and pursuant to that certain Management/Leasing
                Agreement by and between Gale 55 Corporate Associates, LLC, The Gale
                Services Company, L.L.C. and Gale Advisors (the “Management
                Agreement”) in the amount of $2,336,891 are an Excluded Asset
                described in Section 5.11(c) of the Contribution Agreement. Upon
                exercise
                of the expansion option specified in the Expansion Option
                Agreement:

            

    

    

    
      	
              i.  

            	
              If
                Gale II fails to pay all or any portion of the Commissions to Gale
                Investments, then MCRLP shall pay to Gale Investments or its designated
                successors or assigns up to one-half (1/2) of the amount of such
                unpaid
                portion of the Commissions (the “MCRLP Contribution”);
                provided, however, that the aggregate amount of MCRLP’s
                contributions for the payment of the Commissions, either directly
                through
                the payment of the MCRLP Contribution or indirectly through the funding
                of
                any capital call properly made for such purpose, shall not exceed
                $769,000.

            

    

    

    
      	
              ii.  

            	
              MCRLP
                shall not, directly or indirectly through its affiliates and subsidiaries
                as a partner in Gale II, object to or block the payment of any Commissions
                and will consent to and fund any capital call properly made for the
                same;
                provided, however, that the aggregate amount of MCRLP’s
                contributions for the payment of the Commissions, either directly
                in the
                form of the MCRLP Contribution or indirectly through the funding
                of any
                capital call properly made for such purpose, shall not exceed
                $769,000.

            

    

    

    
      	
              iii.  

            	
              If
                requested in writing by Gale Investments, MCRLP shall accept the
                payment
                of any Commissions on behalf of Gale Investments and distribute such
                Commissions in accordance with the written instructions of Gale
                Investments.

            

    

     

     

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
 

    
      	
              iv.  

            	
              MCRLP
                hereby undertakes to pay to Gale Investments or its designated successors
                or assigns any portion of the Commissions received by MCRLP or any
                of its
                subsidiaries or affiliates.

            

    

    

    
      	
              v.  

            	
              It
                is expressly understood and agreed by the parties to this Agreement
                that,
                except for the MCRLP Contribution, MCRLP shall have no obligation
                to take
                or cause to be taken any action to solicit the payment of the
                Commissions.

            

    

    

    
      	
              vi.  

            	
              In
                the event that Aventis Inc. does not exercise its expansion option
                and
                Gale II becomes entitled to the $7,000,000 penalty payable to such
                entity
                under the terms of the Expansion Option Agreement, any portion of
                such
                penalty payable to MCRLP or any of its subsidiaries or affiliates
                shall
                not be considered an Excluded Asset and MCRLP shall be entitled to
                retain
                such penalty.

            

    

    

    
      	
              4.  

            	
              Expense
                Reimbursements.

            

    

    

    
      	
              a.  

            	
              MCRLP
                hereby waives and forfeits all rights, title and interest to any
                reimbursement under Section 7.07 of the Non-Portfolio Property Agreement
                only for services performed by Mark Yeager, whether prior to or after
                the
                date hereof.

            

    

    

    
      	
              b.  

            	
              All
                other reimbursements under Section 7.07 of the Non-Portfolio Property
                Agreement for services performed by persons other than Mark Yeager,
                whether prior to or after the date hereof, shall continue in full
                force
                and effect in accordance with the terms thereof; provided,
                however, that such sum shall not be required to be paid currently,
                but shall accrue and include a carrying charge of 6% per annum, compounded
                monthly, commencing on the date hereof (the “Expense
                Accruals”).  The amount of the Expense Accruals shall be
                credited toward MCRAC’s Rock Cash Contribution under Section 2.03(f) of
                the Non-Portfolio Property Agreement in furtherance of MCRAC’s acquisition
                of the Rock GW Office Interests, subject to the satisfaction of all
                of the
                conditions of Section 2.06(b) of the Non-Portfolio Property
                Agreement.  If, as of May 9, 2009, the acquisition of the Rock
                GW Office Interests by MCRAC has not closed for any reason (other
                than a
                breach by MCRAC of its obligations under the Non-Portfolio Property
                Agreement), then:

            

    

    

    
      	
              i.  

            	
              The
                then outstanding balance of the Expense Accruals, with accrued carrying
                charges through and as of May 9, 2009 or until paid, plus an additional
                $1,000,000 in cash, shall be paid by Gale/Yeager Investments LLC
                to MCRLP
                within three (3) business days; and

            

    

     

     

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
 

    
      	
              ii.  

            	
              All
                other terms and conditions of the Non-Portfolio Property Agreement
                shall
                remain in full force and effect.

            

    

    

    
      	
              c.  

            	
              Gale/Yeager
                Investments LLC hereby pledges to MCRLP, and grants to MCRLP a security
                interest in, Gale/Yeager Investments LLC’s interests in the Rock GW Office
                Interests, and any related rights to payment, profits, distributions
                in
                connection therewith, as the case may be, and all proceeds therefrom,
                including any securities and moneys received, whether now existing
                or
                acquired, as security for the prompt and complete performance of
                Gale/Yeager Investments LLC’s obligations under paragraph (b) of Section 4
                of this Agreement.

            

    

    

    
      	
              5.  

            	
              Severability.  If
                any term or other provision of this Agreement is invalid, illegal
                or
                incapable of being enforced by any Law or public policy, all other
                terms
                and provisions of this Agreement shall nevertheless remain in full
                force
                and effect for so long as the economic or legal substance of the
                transactions contemplated by this Agreement is not affected in any
                manner
                materially adverse to either party hereto. 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 an acceptable manner in order that the transactions
                contemplated by this Agreement are consummated as originally contemplated
                to the greatest extent possible.  If any term or other provision
                of this Agreement is inconsistent or in conflict with a term or provision
                of any other oral or written agreement or arrangement between the
                parties
                hereto, the terms of this Agreement shall supersede all such prior
                agreements or arrangements.

            

    

    

    
      	
              6.  

            	
              PFV
                Capital Call.  MCRLP hereby acknowledges and agrees that it
                will, either directly or indirectly through its affiliates and
                subsidiaries, consent to any capital call made under the operating
                agreements of The Gale PFV Investor Company, L.L.C., GMW Village
                Associates, LLC or GE/Gale Funding LLC relating to MCRLP’s interests in
                The Gale PFV Investor Company, L.L.C. for the purpose of paying accrued
                and unpaid management fees and expenses, regardless of when earned
                (collectively, the “PFV Accruals”).  MCRLP, either
                directly or indirectly through its affiliates and subsidiaries, will
                consent to and fund any capital call properly made for the purpose
                of
                paying the PFV Accruals, and in the event of such a capital call,
                MCRLP
                further undertakes to pay to Gale Investments or its designated successors
                or assigns Gale Investments’ portion of the PFV
                Accruals.

            

    

     

    
      	
              7.  

            	
              Governing
                Law.  This Agreement shall be governed by and construed in
                accordance with the internal laws of the State of Delaware without
                reference to its principles regarding conflicts of
                laws.

            

    

     

    
      	
              8.  

            	
              Waiver.  Any
                party to this Agreement may (a) extend the time for the performance
                of any
                of the obligations or other acts of the other party, (b) waive any
                inaccuracies in the representations and warranties of the other party
                contained herein or in any document delivered by the other party
                pursuant
                hereto, or (c) waive compliance with any of the agreements of the
                other
                party or conditions to such party’s obligations contained herein. Any such
                extension or waiver shall be valid only if set forth in an instrument
                in
                writing signed by the party to be bound thereby. Any waiver of any
                term or
                condition shall not be construed as a waiver of any subsequent breach
                or a
                subsequent waiver of the same term or condition, or a waiver of any
                other
                term or condition of this Agreement. The failure of either party
                hereto to
                assert any of its rights hereunder shall not constitute a waiver
                of any of
                such rights.

            

    

     

     

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

     

    
      	
              9.  

            	
              Binding
                Effect.  This Agreement shall be binding upon and shall
                inure to the benefit of the parties hereto and their respective heirs,
                executors, administrators, legal representatives, successors and
                assigns.

            

    

     

    
      	
              10.  

            	
              Counterparts.  This
                Agreement may be executed and delivered (including by facsimile
                transmission or portable document format (PDF)) in one or more
                counterparts, and by the different parties hereto in separate
                counterparts, each of which when executed shall be deemed to be an
                original, but all of which taken together shall constitute one and
                the
                same agreement.

            

    

     

    
      	
              11.  

            	
              No
                Third Party Beneficiaries.  This Agreement shall be binding
                upon and inure solely to the benefit of the parties hereto and their
                respective successors and permitted assigns and nothing herein, express
                or
                implied, is intended to or shall confer upon any other person any
                legal or
                equitable right, benefit or remedy of any nature whatsoever, under
                or by
                reason of this Agreement.

            

    

     

    

    

    [Signature
      Pages Follow]

    
      
                 

         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    IN
      WITNESS WHEREOF, the parties hereto have executed, or have caused this
      Agreement to be executed, as of the day and year first above
      written.

     

    

    GCF
      II INVESTOR LLC

    

    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    

    

    THE
      GALE INVESTMENTS COMPANY,
      LLC

    

    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    

    

    GALE
      & WENTWORTH VREELAND, LLC

    

    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    

    

    GALE
      URBAN SOLUTIONS LLC

    

    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    

    

    MSGW-ONE
      CAMPUS INVESTORS,
      LLC

    

    By:           /s/
      Stanley C. Gale

    Name:   Stanley
      C.
      Gale

    Title:     Managing
      Member

    

    

    SCG
      HOLDING CORP.

    

    By:           /s/
      Stanley C. Gale

    Stanley
      C. Gale

    Chief
      Executive Officer

    

    
      
          

         

      

      
        7

        
          

        

      

      
         

      

    

    STANLEY
      C. GALE

    

    /s/
      Stanley C.
      Gale

    

    

    MARK
      YEAGER

    

    /s/
      Mark Yeager

    

    

    MACK-CALI
      REALTY, L.P.

    

    By:           Mack-Cali
      Realty Corporation, its general partner

    

    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    

    

    MACK-CALI
      REALTY ACQUISITION
      CORP.

    

    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    

    

    MACK-CALI
      BELMAR REALTY,
      LLC

    

    By:           Mack-Cali
      Services, Inc., its sole member

    

    By:           /s/
      Mitchell E.  Hersh 

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    

    

    M-C
      BELMAR, LLC

    

    By:           Mack-Cali
      Belmar Realty, LLC, its Manager

    

    By:           Mack-Cali
      Services, Inc., its sole member

    

    By:           /s/
      Mitchell E.  Hersh  

    Mitchell
      E. Hersh

    President
      and Chief Executive
      Officer

    
      
                

         

      

      
        8

        
          

        

      

      
         

      

    

    

    GALE/YEAGER
      INVESTMENTS LLC

    

    By:           /s/
      Mark Yeager

    Name:   Mark
      Yeager

    Title:     Member

    

    
      
                      

         

      

      
        9

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