Document:

exv10wxoy

EXECUTION VERSION

Exhibit 10(o)

SHARE PURCHASE AGREEMENT

by and among

CMS ELECTRIC & GAS, L.L.C.,

CMS ENERGY BRASIL S.A.,

and

CPFL ENERGIA S.A.,

together with

CMS ENERGY CORPORATION

(solely for the limited purposes of Section 8.9)

Dated as of April 12, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE I
	SALE AND PURCHASE OF SHARES
	 	 	 
	 	 	 	 
	1.1	 	Sale and Purchase of Shares
	 	 	1	 
	1.2	 	Purchase Price
	 	 	1	 
	1.3	 	Closing
	 	 	1	 
	1.4	 	Closing Deliveries
	 	 	2	 
	 	 	 
	 	 	 	 
	ARTICLE II
	REPRESENTATIONS AND WARRANTIES OF SELLER
	 	 	 
	 	 	 	 
	2.1	 	Organization and Qualification
	 	 	2	 
	2.2	 	Title to Shares
	 	 	3	 
	2.3	 	Authority; Non-Contravention; Statutory Approvals
	 	 	3	 
	2.4	 	Litigation
	 	 	4	 
	2.5	 	Brokers and Finders
	 	 	4	 
	 	 	 
	 	 	 	 
	ARTICLE IIA
	REPRESENTATIONS AND WARRANTIES OF ENERGY
	 	 	 
	 	 	 	 
	2.1A	 	Organization and Qualification; Authority
	 	 	4	 
	 	 	 
	 	 	 	 
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
	 	 	 
	 	 	 	 
	3.1	 	Organization and Qualification; Authority;
Non-Contravention; Statutory
Approvals
	 	 	5	 
	3.2	 	Capitalization
	 	 	6	 
	3.3	 	Financial Statements; Undisclosed Liabilities
	 	 	7	 
	3.4	 	Absence of Certain Changes or Events
	 	 	7	 
	3.5	 	Tax Matters
	 	 	7	 
	3.6	 	Litigation
	 	 	8	 
	3.7	 	Compliance with Laws
	 	 	8	 
	3.8	 	Employee Benefits
	 	 	8	 
	3.9	 	Permits
	 	 	10	 
	3.10	 	Real Property
	 	 	10	 
	3.11	 	Material Contracts
	 	 	10	 
	3.12	 	Environmental Matters
	 	 	12	 
	3.13	 	Labor Matters
	 	 	13	 
	3.14	 	Intellectual Property
	 	 	13	 
	3.15	 	Affiliate Contracts
	 	 	13	 
	3.16	 	Insurance
	 	 	13	 
	3.17	 	Brokers and Finders
	 	 	13	 
	3.18	 	Books and Records
	 	 	14	 
	3.19	 	Investco S.A. Shareholders Documentation
	 	 	14	 

i

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF PURCHASER
	 	 	 
	 	 	 	 
	4.1	 	Organization and Qualification
	 	 	14	 
	4.2	 	Authority; Non-Contravention; Statutory Approvals
	 	 	14	 
	4.3	 	Financing
	 	 	15	 
	4.4	 	Litigation
	 	 	15	 
	4.5	 	Investment Intention; Sufficient
Investment Experience; Independent
Investigation
	 	 	15	 
	4.6	 	Brokers and Finders
	 	 	16	 
	4.7	 	Qualified for Permits
	 	 	16	 
	4.8	 	No Knowledge of Seller or Company Breach
	 	 	16	 
	 	 	 
	 	 	 	 
	ARTICLE V
	COVENANTS
	 	 	 
	 	 	 	 
	5.1	 	Conduct of Business
	 	 	16	 
	5.2	 	Approvals
	 	 	18	 
	5.3	 	Access
	 	 	18	 
	5.4	 	Publicity
	 	 	19	 
	5.5	 	Tax Matters
	 	 	19	 
	5.6	 	Employee Matters
	 	 	20	 
	5.7	 	Fees and Expenses
	 	 	20	 
	5.8	 	[Intentionally left blank.]
	 	 	21	 
	5.9	 	Termination of Affiliate Contracts
	 	 	21	 
	5.10	 	Further Assurances
	 	 	21	 
	5.11	 	[Intentionally left blank.]
	 	 	21	 
	5.12	 	Change of Name
	 	 	21	 
	5.13	 	[Intentionally left blank.]
	 	 	22	 
	5.14	 	Resignations of Certain Officers and Directors
	 	 	22	 
	5.15	 	Tag-Along and Other Shareholder Rights
	 	 	22	 
	5.16	 	Releases of Certain Guarantees
	 	 	22	 
	5.17	 	[Intentionally left blank.]
	 	 	22	 
	5.18	 	Assignment of Certain Obligations
	 	 	22	 
	5.19	 	Insurance
	 	 	23	 
	 	 	 
	 	 	 	 
	ARTICLE VI
	CONDITIONS TO CLOSING
	 	 	 
	 	 	 	 
	6.1	 	Conditions to the Obligations of the Parties
	 	 	23	 
	6.2	 	Conditions to the Obligation of Purchaser
	 	 	23	 
	6.3	 	Conditions to the Obligation of Seller
	 	 	24	 

ii

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	Section	 	 	 	Page	 
	 	 	 
	 	 	 	 
	ARTICLE VII
	TERMINATION
	 	 	 
	 	 	 	 
	7.1	 	Termination
	 	 	25	 
	7.2	 	Effect of Termination
	 	 	26	 
	 	 	 
	 	 	 	 
	ARTICLE VIII
	SURVIVAL; INDEMNIFICATION
	 	 	 
	 	 	 	 
	8.1	 	Survival of Representations, Warranties,
Covenants and Agreements;
Exclusive Remedy
	 	 	27	 
	8.2	 	Indemnification of Purchaser by Seller
	 	 	27	 
	8.3	 	Indemnification of Seller by Purchaser
	 	 	28	 
	8.4	 	Limitations on Seller’s Indemnification
	 	 	28	 
	8.5	 	Special Indemnification by Seller
	 	 	29	 
	8.6	 	Mitigation
	 	 	29	 
	8.7	 	General Procedures Applicable to Claims
for Indemnification
	 	 	29	 
	8.8	 	Payment
	 	 	31	 
	8.9	 	Energy Guarantee
	 	 	31	 
	 	 	 
	 	 	 	 
	ARTICLE IX
	DEFINITIONS AND INTERPRETATION
	 	 	 
	 	 	 	 
	9.1	 	Defined Terms
	 	 	32	 
	9.2	 	Definitions
	 	 	34	 
	9.3	 	Interpretation
	 	 	38	 
	 	 	 
	 	 	 	 
	ARTICLE X
	GENERAL PROVISIONS
	 	 	 
	 	 	 	 
	10.1	 	Notices
	 	 	38	 
	10.2	 	Binding Effect
	 	 	40	 
	10.3	 	Assignment; Successors; Third-Party Beneficiaries
	 	 	40	 
	10.4	 	Amendment; Waivers; etc
	 	 	40	 
	10.5	 	Entire Agreement
	 	 	41	 
	10.6	 	Severability
	 	 	41	 
	10.7	 	Counterparts
	 	 	42	 
	10.8	 	Governing Law
	 	 	42	 
	10.9	 	Arbitration
	 	 	42	 
	10.10	 	Limitation on Damages
	 	 	42	 
	10.11	 	Enforcement
	 	 	42	 
	10.12	 	No Right of Set-Off
	 	 	42	 

iii

 

EXHIBITS

	 	 	 
	Exhibit A

	 	Seller Disclosure Letter
	Exhibit B

	 	Company Disclosure Letter
	Exhibit C

	 	Purchaser Disclosure Letter

iv

 

SCHEDULES TO BE INCORPORATED INTO THE DISCLOSURE LETTERS

APPENDED AS EXHIBITS

	 	 	 
	Schedule 2.2

	 	Shares
	 
	 	 
	Schedule 2.3(c)

	 	Seller Required Statutory Approvals
	 
	 	 
	Schedule 3.1(c)(i)

	 	Company Required Consents
	 
	 	 
	Schedule 3.1(c)(ii)

	 	Non-Contravention
	 
	 	 
	Schedule 3.1(d)

	 	Company Required Statutory Approvals
	 
	 	 
	Schedule 3.2(b)

	 	Company Subsidiaries
	 
	 	 
	Schedule 3.2(c)

	 	Agreements regarding Shares and Equity Interests
	 
	 	 
	Schedule 3.3(a)

	 	Financial Statements
	 
	 	 
	Schedule 3.3(b)

	 	Undisclosed Liabilities
	 
	 	 
	Schedule 3.4(a)

	 	Absence of Certain Changes or Events
	 
	 	 
	Schedule 3.5

	 	Tax Matters
	 
	 	 
	Schedule 3.6

	 	Litigation
	 
	 	 
	Schedule 3.7(a)

	 	Compliance with Laws
	 
	 	 
	Schedule 3.8(a)

	 	Employee Benefits
	 
	 	 
	Schedule 3.8(b)

	 	Employee Benefits
	 
	 	 
	Schedule 3.8(e)

	 	Employee Benefits
	 
	 	 
	Schedule 3.9(a)

	 	Permits
	 
	 	 
	Schedule 3.10(a)

	 	Real Property
	 
	 	 
	Schedule 3.11(a)

	 	Contracts
	 
	 	 
	Schedule 3.11(b)(i)

	 	Contracts
	 
	 	 
	Schedule 3.11(b)(ii)

	 	Contracts
	 
	 	 
	Schedule 3.12

	 	Environmental Matters
	 
	 	 
	Schedule 3.13(a)

	 	Labor Matters
	 
	 	 
	Schedule 3.13(b)

	 	Labor Matters
	 
	 	 
	Schedule 3.15

	 	Affiliate Contracts
	 
	 	 
	Schedule 3.16

	 	Insurance
	 
	 	 
	Schedule 4.2(b)

	 	Purchaser Required Consents
	 
	 	 
	Schedule 4.2(c)

	 	Purchaser Required Statutory Approvals
	 
	 	 
	Schedule 4.4

	 	Purchaser Litigation
	 
	 	 
	Schedule 9.2(a)

	 	Company Knowledge Group

v

 

SCHEDULES TO BE INCORPORATED INTO THE DISCLOSURE LETTERS

APPENDED AS EXHIBITS

	 	 	 
	Schedule 9.2(b)

	 	Seller Knowledge Group
	 
	 	 
	Schedule 9.2(c)

	 	Purchaser Knowledge Group
	 
	 	 

SCHEDULES TO SHARE PURCHASE AGREEMENT

	 	 	 
	Schedule 5.1(a)

	 	Conduct of the Company
	 
	 	 
	Schedule 5.1(c)

	 	Conduct of the Company
	 
	 	 
	Schedule 5.1(d)

	 	Conduct of the Company
	 
	 	 
	Schedule 5.1(e)

	 	Conduct of the Company
	 
	 	 
	Schedule 5.1(l)

	 	Conduct of the Company
	 
	 	 
	Schedule 5.3

	 	Access
	 
	 	 
	Schedule 5.7

	 	Fees and Expenses
	 
	 	 
	Schedule 5.9

	 	Termination of Affiliate Contracts
	 
	 	 
	Schedule 5.14

	 	Resignations and Terminations
	 
	 	 
	Schedule 5.16

	 	Guarantees
	 
	 	 
	Schedule 5.18

	 	Assignment of Certain Obligations
	 
	 	 
	Schedule 5.19

	 	Insurance
	 
	 	 
	Schedule 8.5(a)

	 	Special Seller Indemnification

vi

 

SHARE PURCHASE AGREEMENT

     This SHARE PURCHASE AGREEMENT (this “Agreement”), dated as of April 12, 2007, is
entered into by and among (i) CMS Electric & Gas, L.L.C., a Michigan limited liability company
(“Seller”), (ii) CMS Energy Brasil S.A., a sociedade anônima de capital aberto incorporated
under the laws of Brazil (the “Company”), (iii) CPFL Energia S.A., a sociedade anônima de
capital aberto incorporated under the laws of Brazil (“Purchaser”), and (iv) solely for the
limited purposes of Section 8.9, CMS Energy Corporation, a Michigan corporation and the
ultimate parent company of Seller (“Energy”). Each of Purchaser, the Company and Seller
are sometimes referred to individually herein as a “Party” and collectively as the
“Parties”. Certain other terms are defined throughout this Agreement and in Section
9.2.

WITNESSETH:

     WHEREAS Seller owns 94,810,080 units of common shares (each with no par value) of the Company
(the “Common Shares”) and Seller owns 94,810,075 units of preferred shares (each with no
par value) of the Company (the “Preferred Shares”) and each member of the board of
directors of the Company (each a “Director Shareholder”) owns one Preferred Share (all of
the foregoing units of shares, collectively, the “Shares”); and

     WHEREAS Purchaser desires to purchase from Seller, and Seller desires to sell to Purchaser,
all the Shares, upon the terms and subject to the conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises, covenants, representations and
warranties made in this Agreement and of the mutual benefits to be derived therefrom, the Parties
agree as follows:

ARTICLE I

SALE AND PURCHASE OF SHARES

          1.1 Sale and Purchase of Shares. Upon the terms and subject to the conditions of this
Agreement, at the Closing (as such term is defined in Section 1.3), Purchaser shall
purchase from Seller, and Seller shall sell to Purchaser, good and valid title, free and clear of
any Liens except those created by Purchaser arising out of ownership of the Shares by Purchaser,
all the Shares (the “Transaction”).

          1.2 Purchase Price. The consideration to be paid by Purchaser to Seller in respect of
the purchase of Shares shall be an amount in cash in the legal currency of the United States of
America (the “Purchase Price”) equal to Two Hundred Eleven Million One Hundred Forty Four
Thousand Dollars (US$211,144,000.00) and shall be subject to applicable Brazilian withholding tax
on the amount of Seller’s capital gains, as calculated by Seller; provided that, for the
avoidance of doubt, the payment of such withholding tax shall be made by Purchaser on behalf of
Seller.

          1.3 Closing. The closing of the Transaction (the “Closing”) shall take place
in New York, New York, at 10:00 a.m., local time, as soon as practicable, but in any event not
later

1

 

than the second (2nd) Business Day immediately following the date on which the
last of the conditions contained in Article VI is fulfilled or waived (except for those
conditions which by their nature can only be fulfilled at the Closing, but subject to the
fulfillment or waiver of such conditions), or at such other place, time and date (the “Closing
Date”) as the Parties may agree. The payment of the Purchase Price shall be made by wire
transfer of immediately available funds to the bank account or accounts outside of Brazil
designated by Seller prior to the Closing.

          1.4 Closing Deliveries. At the Closing:

          (a) Seller shall cause the Company to deliver to Purchaser certificates from Company’s
Depositary Agent attesting that (i) the Common Shares are registered in the name of the Seller and
(ii) the Preferred Shares are registered in the name of the Seller and of the Director
Shareholders.

          (b) Seller shall cause the Company to deliver to Purchaser an executed copy of the
communication addressed by Seller and by each Director Shareholder to Company’s Depositary Agent
requiring the unconditional transfer of the Shares to Purchaser, as well as the confirmation from
the Depositary Agent of receipt and sufficiency of the aforesaid communication.

          (c) Seller shall cause each Director Shareholder, at no additional cost to Purchaser, to
assign, convey and transfer in the name of Purchaser the Preferred Shares held by such Director
Shareholder.

          (d) Seller shall cause each Director Shareholder, at no additional cost to Purchaser, to
assign, convey and transfer in the name of a Person designated by Purchaser all Equity Interests in
any Company Subsidiary held by any Director Shareholder.

          (e) Purchaser shall pay, or cause to be paid, to Seller an amount in cash equal to the
Purchase Price for the Shares so delivered by Seller, by wire transfer of immediately available
funds to the bank account or accounts outside of Brazil designated by Seller prior to the Closing.

          (f) Each Party shall deliver the certificates, agreements, instruments and other documents
required to be delivered by it pursuant to Article VI.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF SELLER

     Except as otherwise disclosed in the Seller Disclosure Letter attached hereto as Exhibit
A (the “Seller Disclosure Letter”), Seller represents and warrants, as to itself only,
to Purchaser as follows in this Article II:

          2.1 Organization and Qualification. Seller is a limited liability company duly formed
and validly existing under the laws of the State of Michigan, and has full limited liability
company power and authority
to own, lease and operate its assets and properties and to conduct
its business as presently conducted, except where the failure to have such power and authority

2

 

would not reasonably be expected to have, individually or in the aggregate, a Seller Material
Adverse Effect.

          2.2 Title to Shares. Seller and the Director Shareholders are the lawful record and
beneficial owners of the Shares set forth opposite their names in Schedule 2.2 of the
Seller Disclosure Letter, free and clear of any and all Liens, except for Liens created by this
Agreement. The delivery of the Shares to Purchaser in the manner contemplated under Article
I, following the payment by Purchaser of the Purchase Price to Seller, shall transfer to
Purchaser valid beneficial and legal title to the Shares, free and clear of any and all Liens
except for Liens created by Purchaser. There are no outstanding options, warrants or other rights
of any kind to acquire from Seller any Shares or securities convertible into or exchangeable for,
or which otherwise confer on the holder thereof any right to acquire from Seller, any Shares, nor
is Seller committed to issue any such option, warrant, right or security.

          2.3 Authority; Non-Contravention; Statutory Approvals.

          (a) Authority. Seller has full power and authority to enter into this Agreement and,
subject to receipt of the Seller Required Statutory Approvals (as such term is defined in
Section 2.3(c)), to consummate the transactions contemplated hereby. The execution,
delivery and performance by Seller of this Agreement and the consummation by Seller of the
transactions contemplated hereby have been duly and validly authorized by all requisite action on
the part of Seller, and no other proceedings or approvals on the part of Seller are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby. This Agreement has
been duly executed and delivered by Seller and, assuming the due authorization, execution and
delivery hereof by each other Party, constitutes the legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except as limited by applicable Law
affecting the enforcement of creditors’ rights generally or by general equitable principles.

          (b) Non-Contravention. The execution and delivery of this Agreement by Seller do not,
and the consummation of the transactions contemplated hereby will not, result in any violation or
breach of or default (with or without notice or lapse of time or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation under (any such violation,
breach, default, right of termination, cancellation or acceleration is referred to herein as a
“Violation”), or result in the creation of any Lien upon any of the properties or assets of
Seller pursuant to any provision of (i) the Organizational Documents of Seller; (ii) any lease,
mortgage, indenture, note, bond, deed of trust, or other written instrument or agreement of any
kind to which it is a party or by which it may be bound; or (iii) any Law, Permit or Governmental
Order applicable to it, subject to obtaining the Seller Required Statutory Approvals; other than in
the case of clauses (i), (ii) and (iii) any such Violation or Lien which would not reasonably be
expected to have, individually or in the aggregate, a Seller Material Adverse Effect.

          (c) Statutory Approvals. Except for the filings or approvals (i) set forth in
Schedule 2.3(c) of the Seller Disclosure Letter (the “Seller Required Statutory
Approvals”) and (ii) such other filings or approvals as may be required due to the regulatory
or corporate status of
Purchaser, no Consent of any Governmental Entity is required to be made or obtained by Seller
in connection with the execution and delivery of this Agreement or the consummation by Seller

3

 

of
the transactions contemplated hereby, except those which the failure to make or obtain would not
reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect
or a Company Material Adverse Effect.

          2.4 Litigation. There is no action, claim, suit or proceeding at law or in equity
pending or, to the Knowledge of Seller, threatened against Seller that, if adversely determined,
would reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse
Effect. Subject to obtaining the Seller Required Statutory Approvals, there are no Governmental
Orders of or by any Governmental Entity applicable to Seller except for such that would not
reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect
or a Company Material Adverse Effect.

          2.5 Brokers and Finders. Seller has not entered into any written agreement or
arrangement entitling any agent, broker, investment banker, financial advisor or other firm or
Person to any broker’s or finder’s fee or any other commission or similar fee payable by Seller or
the Company in connection with any of the transactions contemplated by this Agreement, except J.P.
Morgan Securities Inc., UBS Securities LLC and Unibanco Securities Inc.

ARTICLE IIA

REPRESENTATIONS AND WARRANTIES OF ENERGY

     Energy represents and warrants, as to itself only, to Purchaser as follows in this Article
IIA solely for the limited purposes of Section 8.9:

          2A.1 Organization and Qualification; Authority.

          (a) Organization and Qualification. Energy has been duly incorporated and is validly
existing under the laws of the State of Michigan, and has full corporate power and authority to
own, lease and operate its assets and properties and to conduct its business as presently
conducted, except where the failure to have such power and authority would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect on Energy.

          (b) Authority. Energy has full power and authority to enter into this Agreement
solely for the limited purposes of Section 8.9 of this Agreement. The execution, delivery
and performance by Energy solely for the limited purposes of Section 8.9 of this Agreement
have been duly and validly authorized by all requisite action on the part of Energy, and no other
proceedings or approvals on the part of Energy are necessary to authorize this Agreement solely for
the limited purposes of Section 8.9. This Agreement has been duly executed and delivered
by Energy and, assuming the due authorization, execution and delivery by each Party, constitutes
the legal, valid and binding obligation of Energy, enforceable against Energy in accordance with
its terms, except as limited by applicable Law affecting the enforcement of creditors’ rights
generally or by general equitable principles.

4

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY

     Except as disclosed in the Company Disclosure Letter attached hereto as Exhibit B (the
“Company Disclosure Letter”), Seller and the Company hereby severally, and not jointly,
represent and warrant to Purchaser as follows in this Article III (provided that
each representation and warranty made by Seller in this Article III is made solely to the
Knowledge of Seller, except for the representations and warranties in Sections 3.1,
3.2, 3.3, 3.4(a), 3.4(b), 3.6, 3.10, 3.11,
3.12, 3.15, 3.16, 3.17 and 3.18):

          3.1 Organization and Qualification; Authority; Non-Contravention; Statutory Approvals.

          (a) Organization and Qualification. The Company has been duly incorporated and is
validly existing as a sociedade anônima de capital aberto and in good standing under the laws of
Brazil, with full corporate power and authority to own or lease and to operate its properties and
to conduct its business as presently conducted and is duly qualified to do business in Brazil.

          (b) Authority. The Company has full corporate power and authority to enter into this
Agreement and, subject to receipt of the Seller Required Statutory Approvals, to consummate the
transactions contemplated hereby. The execution, delivery and performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated hereby have been
duly and validly authorized by all requisite corporate action on the part of the Company, and no
other corporate proceedings or approvals on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by the Company and, assuming the due authorization, execution and delivery
hereof by each other Party, constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as limited by Laws affecting
the enforcement of creditors’ rights generally or by general equitable principles.

          (c) Non-Contravention. The execution and delivery of this Agreement by the Company
does not, and the consummation of the transactions contemplated hereby will not, result in any
Violation or result in the creation of any Lien upon any of the properties of the Company or any
Company Subsidiary, pursuant to any provision of (i) the Organizational Documents of the Company or
any Company Subsidiary, subject to obtaining the third-party Consents set forth in Schedule
3.1(c)(i) of the Company Disclosure Letter (the “Company Required Consents”); (ii) any
lease, mortgage, indenture, note, bond, deed of trust, or other written instrument or agreement of
any kind to which the Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary may be bound, subject to obtaining the Company Required Consents and except as
set forth in Schedule 3.1(c)(ii) of the Company Disclosure Letter; or (iii) any Law, Permit
or Governmental Order applicable to the Company or any Company Subsidiary, subject to obtaining the
Seller Required Statutory Approvals and the Company Required Statutory Approvals; other than in the
case of clauses (i),

5

 

(ii) and (iii) any such Violation or Lien which would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

          (d) Statutory Approvals. Except for the filings or approvals (i) set forth in
Schedule 3.1(d) of the Company Disclosure Letter (the “Company Required Statutory
Approvals”) and (ii) such other filings or approvals as may be required due to the regulatory
or corporate status of Purchaser, no Consent of any Governmental Entity is required to be made or
obtained by the Company or any Company Subsidiary, in connection with the execution and delivery of
this Agreement by the Company or the consummation by the Company of the transactions contemplated
hereby, except those which the failure to make or obtain would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.

          3.2 Capitalization.

          (a) Company. The authorized capital stock of the Company consists of 300,000,000
units of shares (each with no par value), of which 94,810,080 units of common shares are issued and
outstanding and 94,810,080 units of preferred shares are issued and outstanding. The Shares
constitutes all of the issued and outstanding Equity Interests in the Company.

          (b) Company Subsidiaries. Schedule 3.2(b) of the Company Disclosure Letter
sets forth for each Company Subsidiary: (i) its jurisdiction of formation; (ii) its authorized
Equity Interests; (iii) the number of its issued and outstanding Equity Interests; and (iv) the
Equity Interests that are owned, directly or indirectly, by the Company (and the Company Subsidiary
holding such Equity Interest, if applicable) and the directors of each Company Subsidiary. The
Equity Interests of each Company Subsidiary that are owned, directly or indirectly, by the Company,
as set forth on Schedule 3.2(b) of the Company Disclosure Letter, are owned free and clear
of all Liens, other than Permitted Liens. All of the issued and outstanding Equity Interests in
each Company Subsidiary that are owned, directly or indirectly, by the Company have been duly
authorized and, to the extent such concepts are recognized under applicable Law, are validly issued
and fully paid.

          (c) Agreements with Respect to Shares and Equity Interests of the Company and the Company
Subsidiaries. Except as set forth in Schedule 3.2(c) of the Company Disclosure Letter,
there are no:

     (i) subscriptions, options, warrants, calls, conversion, exchange, purchase
right or other written contracts, rights, agreements or commitments of any kind
obligating, directly or indirectly, the Company or any Company Subsidiary to issue,
transfer, sell or otherwise dispose of, or cause to be issued, transferred, sold or
otherwise disposed of, any Equity Interests of the Company or any Company Subsidiary
or any securities convertible into or exchangeable for any such Equity Interests
(other than in connection with any Permitted Lien); or

     (ii) shareholder agreements, partnership agreements, voting trusts, proxies or
other written agreements or instruments to which the Company or any

6

 

Company Subsidiary is a party, or by which the Company or any Company
Subsidiary is bound.

          3.3 Financial Statements; Undisclosed Liabilities.

          (a) The Company has provided to Purchaser copies of the audited consolidated balance sheets of
the Company and the Company Subsidiaries as at December 31, 2004, 2005 and 2006 and the related
audited statements of operations, cash flows and stockholders’ equity for the years ended December
31, 2004, 2005 and 2006 (collectively, the “Company Financial Statements”). The
consolidated balance sheet of the Company and the Company Subsidiaries as at December 31, 2006
(including the notes thereto) is hereinafter referred to as the “Balance Sheet”. The
Company Financial Statements fairly present in all material respects the consolidated assets and
liabilities of the Company and the consolidated results of operations of the Company and the
Company Subsidiaries for the periods indicated, all in accordance with Brazilian GAAP consistently
applied over the periods presented except as provided in the notes to the Company Financial
Statements, except as set forth in Schedule 3.3(a) of the Company Disclosure Letter.

          (b) Neither the Company nor any Company Subsidiary has any Liabilities, other than (i)
Liabilities that will not be applicable to the Company or any Company Subsidiary after Closing,
(ii) Liabilities disclosed on Schedule 3.3(b) of the Company Disclosure Letter, (iii)
Liabilities reserved for or reflected in the Balance Sheet, (iv) Liabilities incurred in the
ordinary course of business since December 31, 2006 that have not had, or would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse Effect and (v) such
other Liabilities as have not had, or would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.

          3.4 Absence of Certain Changes or Events.

          (a) Since December 31, 2006, except as set forth in Schedule 3.4(a) of the Company
Disclosure Letter, other than in connection with the transactions contemplated by this Agreement,
neither the Company nor, to the Knowledge of the Company, any Company Subsidiary has taken any of
the actions set forth in Sections 5.1(a) through 5.1(l), that, if taken after the
execution and delivery of this Agreement, would require the consent of Purchaser pursuant to
Section 5.1.

          (b) Since December 31, 2006, there has not been any change, event, condition, circumstance,
occurrence or development which has had, or would reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.

          (c) Subject to Section 5.1, since December 31, 2006, the Company and the Company
Subsidiaries have conducted their businesses only in the ordinary course of business.

          3.5 Tax Matters. Except as set forth in Schedule 3.5 of the Company
Disclosure Letter:

          (a) each of the Company and each Company Subsidiary has (i) filed with the appropriate
Governmental Entity all material Tax Returns required to have been filed by it and

7

 

such Tax Returns are accurate and complete in all material respects and (ii) duly paid in full
all Taxes due or payable;

          (b) no material audits or other administrative proceedings or court proceedings are, as of the
date hereof, pending with regard to any Taxes or Tax Returns of the Company or any Company
Subsidiary and neither the Company nor any Company Subsidiary has been informed in writing of the
planned commencement of any such audits or proceedings;

          (c) neither the Company nor any Company Subsidiary has waived any statute of limitations for
the assessment or collection of any material Taxes which waiver is currently in effect;

          (d) there are no Liens for Taxes on any assets of the Company or any Company Subsidiary,
except Liens relating to (i) Taxes not yet due and payable or (ii) Taxes which are being contested
in good faith and for which adequate reserves have been established; and

          (e) the Company has made available to Purchaser complete, accurate and correct copies of all
income Tax Returns of the Company and each Company Subsidiary, for the years 2003, 2004 and 2005,
as filed or subsequently amended.

          3.6 Litigation. Except as set forth in Schedule 3.6 of the Company Disclosure
Letter, there is no action, claim, suit or other proceeding at law or in equity pending or, to the
Knowledge of the Company, threatened against the Company or any Company Subsidiary or affecting the
assets or properties of the Company or any Company Subsidiary that, if adversely determined, would
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect.

          3.7 Compliance with Laws.

          (a) Except as set forth in Schedule 3.7(a) of the Company Disclosure Letter, neither
the Company nor any Company Subsidiary has received written notice of or been charged with any
violation of, or, to the Knowledge of the Company, is in violation of or is under investigation
with respect to any violation of, any Law or Governmental Order, except in each case for violations
that would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect.

          (b) This Section 3.7 does not relate to Tax matters, which are instead the subject of
Section 3.5, employee benefits matters, which are instead the subject of Section
3.8, Permits, which are instead the subject of Section 3.9, or environmental matters,
which are instead the subject of Section 3.12.

          3.8 Employee Benefits.

          (a) Schedule 3.8(a) of the Company Disclosure Letter contains a brief description of
all material written employee benefit plans, programs, policies, arrangements and contracts,
including any bonus, incentive or deferred compensation, pension, retirement, profit-sharing,
savings, employment, consulting, compensation, stock purchase, stock option, phantom

8

 

stock or other equity-based compensation, severance pay, termination, change-in-control,
retention, salary continuation, vacation, overtime, sick leave, disability, death benefit, group
insurance, hospitalization, medical, dental, life, loan, educational assistance, and other fringe
benefit plans, programs, written agreements and arrangements maintained by the Company or any
Company Subsidiary for the benefit of any employee or former employee of the Company or any Company
Subsidiary (collectively, the “Company Plans”).

          (b) With respect to each Company Plan, the Company has made available to Purchaser complete,
true and correct copies of the documents, to the extent applicable, a copy of such Company Plan
(including all amendments thereto), except as set forth in Schedule 3.8(b) of the Company
Disclosure Letter, and if such Company Plan is funded through a trust or any third party funding
vehicle, a copy of the trust or other funding agreement (including all amendments thereto) and the
most recent financial statements.

          (c) Each Company Plan has been administered in all material respects in compliance with its
terms and the requirements of applicable Law. Except as set forth in Schedule 3.6 of the
Company Disclosure Letter, there is no pending or, to the Knowledge of the Company, threatened
legal action, suit or claim relating to the Company Plans (other than routine claims for benefits).

          (d) All contributions to each Company Plan required under the terms of such Company Plan or
applicable Law have been timely made. All material Liabilities and expenses as of December 31,
2006 of the Company or any Company Subsidiary in respect of the Company’s private pension plan,
“Plano de Benefícios CMSPREV”, have been properly accrued on the audited consolidated financial
statements of the Company for the year ended December 31, 2006 in compliance with Brazilian GAAP.

          (e) Except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, and except as set forth in Schedule 3.8(e) of the Company
Disclosure Letter, neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (either alone or in combination with another event) (i)
entitle any current or former employee, manager, executive officer or director of the Company or
any Company Subsidiary to any payment or result in any payment becoming due, increase the amount of
any compensation due, or result in the acceleration of the time of any payment due to any such
person or (ii) increase any benefits otherwise payable under any Company Plan or result in the
acceleration of the time of payment or vesting of any benefit under a Company Plan.

          (f) No Company Plan provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees, managers, executive officers
and directors of the Company or any Company Subsidiary beyond their retirement or other termination
of service, other than (i) coverage mandated solely by applicable Law, (ii) deferred compensation
benefits accrued as liabilities on the books of the Company or any Company Subsidiary or (iii)
benefits the costs of which are borne by the current or former employee or his or her beneficiary.

9

 

          3.9 Permits.

          (a) Except as set forth in Schedule 3.9(a) of the Company Disclosure Letter, each of
the Company and the Company Subsidiaries has and is in compliance with all Permits that are
necessary for it to conduct its operations in the manner in which they are presently conducted,
other than any such Permits the failure of which to have would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect (collectively, “Company
Permits”). Except as set forth in Schedule 3.9(a) of the Company Disclosure Letter,
each Company Permit held by the Company and any Company Subsidiary is in full force and effect
other than any failure to be in full force and effect that would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect.

          (b) This Section 3.9 does not relate to environmental matters, which are instead the
subject of Section 3.12.

          3.10 Real Property.

          (a) Schedule 3.10(a) of the Company Disclosure Letter lists all material real property
leases to which the Company or any Company Subsidiary is a party (the “Leased Real
Property”). Schedule 3.10(a) of the Company Disclosure Letter lists all material real
property owned by the Company or any Company Subsidiary (the “Owned Real Property”).

          (b) Except as would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect, the Company and each Company Subsidiary have good and marketable
title to all Owned Real Property used by it, in each case free and clear of all Liens, except for
Permitted Liens. Except as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, the Company and each Company Subsidiary has a valid
and binding leasehold interest in all Leased Real Property used by it, free and clear of all Liens,
except for Permitted Liens and as limited by Laws affecting the enforcement of creditors’ rights
generally or by general equitable principles.

          (c) Neither the Company nor any Company Subsidiary has received written notice from a
Governmental Entity of any pending or threatened proceeding to condemn or take by power of eminent
domain or other similar proceedings affecting any of the Owned Real Property or the Leased Real
Property that would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.

          3.11 Material Contracts.

          (a) Set forth in Schedule 3.11(a) of the Company Disclosure Letter is, as of the date
hereof, a list of the following written agreements and contracts to which the Company or any
Company Subsidiary is a party or by which any of their respective properties or assets are bound,
other than any insurance policies covering the Company, any Company Subsidiary or any of their
respective assets (the written agreements and contracts set forth in Schedule 3.11(a) of
the Company Disclosure Letter are referred to herein as the “Company Material Contracts”
and, as used in this Section 3.11, “Contracting Party” shall refer to the Company
or Company Subsidiary party to such Company Material Contract):

10

 

     (i) all Operating Contracts providing for the payment by or to the Contracting
Party in excess of R$2,000,000 per year, other than (x) any agreements with the
Company or another Company Subsidiary to document certain intercompany loans or (y)
any agreements between the Company and any Company Subsidiary for the provision of
services and/or payment of costs, which are terminable by either party thereto upon
not more than sixty (60) days’ notice;

     (ii) all contracts or agreements (other than Operating Contracts) requiring a
future capital expenditure by the Contracting Party in excess of R$2,000,000 in any
twelve-month period;

     (iii) all contracts or agreements under which the Contracting Party is
obligated to sell real or personal property having a value in excess of R$2,000,000
other than in the ordinary course of business;

     (iv) all contracts or agreements under which the Contracting Party (1) created,
incurred, assumed or guaranteed (or may create, incur, assume or guarantee)
indebtedness, (2) granted a Lien on its assets, whether tangible or intangible, to
secure such indebtedness or (3) extended credit or advanced funds to any Person, in
each case, in excess of R$2,000,000;

     (v) all executory contracts for the purchase or sale of any business,
corporation, partnership, joint venture, association or other business organization
or any division, assets, operating unit or product line thereof which have a
purchase or sale price in excess of R$2,000,000;

     (vi) all contracts or agreements establishing any material joint venture;

     (vii) all contracts or agreements that grant a right of first refusal or
similar right with respect to (A) any assets of the Contracting Party having a value
in excess of R$2,000,000 or (B) any direct or indirect economic interest in the
Contracting Party having a value in excess of R$2,000,000;

     (viii) all contracts or agreements providing for the use of material
Intellectual Property (as such term is defined in Section 3.14) which has an
annual license payment or fee in excess of R$750,000; and

     (ix) any other contract or agreement not covered in clauses (i) through (xi)
above that involves payment by or to the Contracting Party of more than R$2,000,000
annually or R$6,000,000 in the aggregate under such agreement, other than those that
can be terminated without penalty in excess of R$750,000 to the Contracting Party
upon not more than sixty (60) days’ notice.

          (b) Except as set forth in Schedule 3.11(b)(i) of the Company Disclosure Letter, the
Company has made available to Purchaser complete and correct copies of all Company Material
Contracts, together with any material amendments thereto. Except as set forth in Schedule
3.11(b)(ii) of the Company Disclosure Letter, each Company Material Contract is (i) in full
force and effect and (ii) the valid and binding obligation of the Company, the

11

 

Company Subsidiary party thereto and, to the Knowledge of the Company, of each other party
thereto, in each case (x) except as limited by Laws affecting the enforcement of creditors’ rights
generally or by general equitable principles and (y) with such exceptions as would not reasonably
be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except
as set forth in Schedule 3.11(b)(ii) of the Company Disclosure Letter, neither the Company
nor any Company Subsidiary is in breach or default under any Company Material Contract, which
breach or default has not been waived, and, to the Knowledge of the Company, no other party to any
Company Material Contract is in breach or default, except in each case, for any breach or default
that would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect. This Section 3.11(b) does not relate to real property matters, which are
instead the subject of Section 3.10.

          3.12 Environmental Matters. Except as set forth in Schedule 3.12 of the
Company Disclosure Letter, or as would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect:

          (a) the Company and each Company Subsidiary is in compliance in all material respects with all
applicable Environmental Laws, including having and complying with the terms and conditions of all
material Permits required pursuant to applicable Environmental Laws and has timely filed all
applications for renewal, and there are no unresolved prior material violations of Environmental
Laws;

          (b) neither the Company nor any Company Subsidiary (i) has received from any Governmental
Entity any written notice of violation of, alleged violation of, non-compliance with, or Liability
or potential Liability pursuant to, any Environmental Law, other than notices with respect to
matters that have been resolved and for which the Company or any Company Subsidiary has no further
obligations outstanding or (ii) is subject to any outstanding Governmental Order, “consent order”
or other written agreement with regard to any violation, noncompliance or Liability under any
Environmental Law;

          (c) no judicial proceeding or governmental or administrative action is pending under any
applicable Environmental Law pursuant to which the Company or any Company Subsidiary has been a
party; and

          (d) neither the Company nor any Company Subsidiary has received any written notice, claim or
demand from any Person, including any Governmental Entity, seeking costs of response, damages or
requiring remedial action relating to (i) any Release of Hazardous Substances at, on or beneath the
Company’s or any Company Subsidiary’s current facilities or (ii) a Release of Hazardous Substances
at any third party property to which Hazardous Substances generated by the Company or any Company
Subsidiary were sent for treatment or disposal.

     Notwithstanding any of the representations and warranties contained elsewhere in this
Agreement, all environmental matters shall be governed exclusively by this Section 3.12.

12

 

          3.13 Labor Matters.

          (a) Schedule 3.13(a) of the Company Disclosure Letter contains a list of all
collective bargaining conventions and agreements to which the Company or any Company Subsidiary is
bound.

          (b) Except as set forth on Schedule 3.13(b) of the Company Disclosure Letter, no
employees of the Company or any Company Subsidiary are represented by any labor organization with
respect to their employment with the Company or any Company Subsidiary.

          (c) Since January 1, 2006, there have been no material labor strikes, work stoppages or
lockouts against or affecting the Company or any Company Subsidiary.

          3.14 Intellectual Property. Except as would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect, (a) the Company and each
Company Subsidiary own, or has the right to use, all patents, patent rights (including patent
applications and licenses), know-how, trade secrets, trademarks (including trademark applications),
trademark rights, trade names, trade name rights, service marks, service mark rights, copyrights
and other proprietary intellectual property rights (collectively, “Intellectual Property”)
used in and necessary for the conduct of the businesses of the Company and the Company Subsidiaries
as currently conducted, (b) to the Knowledge of the Company, the use of the Intellectual Property
used in the businesses of the Company and the Company Subsidiaries as currently conducted does not
infringe or otherwise violate the Intellectual Property rights of any third party, (c) to the
Knowledge of the Company, no third party is challenging, infringing or otherwise violating any
right of the Company and the Company Subsidiaries in any Intellectual Property necessary for the
conduct of the businesses of the Company and the Company Subsidiaries as currently conducted, and
(d) neither the Company nor any Company Subsidiary has received any written notice of any pending
claim that Intellectual Property used in and necessary for the conduct of the businesses of the
Company and the Company Subsidiaries as currently conducted infringes or otherwise violates the
Intellectual Property rights of any third party.

          3.15 Affiliate Contracts. Schedule 3.15 of the Company Disclosure Letter
contains a true and complete list of each material written agreement or contract as of the date
hereof between (i) the Company or any Company Subsidiary, on the one hand, and (ii) a Seller or any
Affiliate thereof (other than the Company or any Company Subsidiary), on the other hand
(collectively, the “Affiliate Contracts”).

          3.16 Insurance. Set forth on Schedule 3.16 of the Company Disclosure Letter
is a list of all material policies of insurance under which the Company’s or any Company
Subsidiary’s assets or business activities are covered, including for each such policy the type of
policy, the name of the insured, the term of the policy, a description of the limits of such
policy, the basis of coverage and the deductibles.

          3.17 Brokers and Finders. Neither the Company nor any Company Subsidiary has entered
into any written agreement or arrangement entitling any agent, broker, investment banker, financial
advisor or other firm or Person to any broker’s or finder’s fee or any other

13

 

commission or similar fee payable by any Company in connection with any of the transactions
contemplated by this Agreement, except J.P. Morgan Securities Inc., UBS Securities LLC and Unibanco
Securities Inc., each of whose fees and expenses are governed by Section 5.7.

          3.18 Books and Records. All of the Company’s and Company Subsidiaries’ books of
account, minute books, stock record books and any other book and/or record legally required under
applicable Brazilian Law are in all material respects complete, correct, accurate and true and have
been maintained in accordance with applicable Brazilian Law and Brazilian GAAP, as applicable.

          3.19 Investco S.A. Shareholders Documentation. All written shareholders agreements or
similar shareholder-related contracts entered into by Paulista Lajeado Energia S.A. with other
shareholders of Investco S.A. have been provided to Purchaser in the “data room” prior to the date
hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

     Except as set forth in the Purchaser Disclosure Letter attached hereto as Exhibit C
(the “Purchaser Disclosure Letter”), Purchaser represents and warrants to the Company,
Seller and Energy as follows in this Article IV:

          4.1 Organization and Qualification. Purchaser is a sociedade anônima de capital
aberto, duly formed, validly existing and in good standing under the laws of Brazil. Purchaser has
full corporate power and authority to own, lease and operate its assets and properties and to
conduct its business as presently conducted. Purchaser is not required to be qualified to do
business as a foreign corporation in any country other than Brazil.

          4.2 Authority; Non-Contravention; Statutory Approvals.

          (a) Authority. Purchaser has full corporate power and authority to enter into this
Agreement and, subject to receipt of the Purchaser Required Statutory Approvals, to consummate the
transactions contemplated hereby. The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the transactions contemplated hereby have been duly
and validly authorized by all requisite corporate action on the part of Purchaser, and no other
corporate proceedings or approvals on the part of Purchaser are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and, assuming the due authorization, execution and delivery
hereof by each other Party, constitutes the legal, valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms, except as limited by applicable Law
affecting the enforcement of creditors’ rights generally or by general equitable principles.
Purchaser has delivered to Seller a true, complete and correct copy of the resolutions or other
evidence of corporate proceedings or approvals adopted by the board of directors of Purchaser,
which are in full force and effect, evidencing its authorization of the execution and delivery of
this Agreement and the consummation by Purchaser of the transactions contemplated hereby.

14

 

          (b) Non-Contravention. Except as set forth on Schedule 4.2(b) of the
Purchaser Disclosure Letter, the execution and delivery of this Agreement by Purchaser do not, and
the consummation of the transactions contemplated hereby will not, result in any Violation or
result in the creation of any Lien upon any of the respective properties or assets of Purchaser
pursuant to any provision of (i) the Organizational Documents of Purchaser; (ii) any lease,
mortgage, indenture, note, bond, deed of trust, or other written instrument or agreement of any
kind to which Purchaser is a party or by which Purchaser may be bound, subject to obtaining the
third-party Consents set forth in Schedule 4.2(b) of the Purchaser Disclosure Letter (the
“Purchaser Required Consents”); or (iii) any Law, Permit or governmental order applicable
to Purchaser, subject to obtaining the Purchaser Required Statutory Approvals (as such term is
defined in Section 4.2(c)); other than in the case of clauses (i), (ii) and (iii) for any
such Violation or Lien that would not reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect.

          (c) Statutory Approvals. Except for the filings or approvals (i) set forth in
Schedule 4.2(c) of the Purchaser Disclosure Letter (the “Purchaser Required Statutory
Approvals”) and (ii) as may be required due to the regulatory or corporate status of Seller or
the Company (as to which Purchaser does not have knowledge), no Consent of any Governmental Entity
is required to be made or obtained by Purchaser in connection with the execution and delivery of
this Agreement or the consummation by Purchaser of the transactions contemplated hereby, except
those which the failure to make or obtain would not reasonably be expected to have, individually or
in the aggregate, a Purchaser Material Adverse Effect.

          4.3 Financing. Purchaser has, and will have at the Closing, available cash and/or
credit capacity, either in its accounts, through binding and enforceable credit arrangements or
borrowing facilities or otherwise, (i) to pay the Purchase Price at the Closing, (ii) to pay all
fees and expenses required to be paid by Purchaser in connection with the transactions contemplated
by this Agreement, pursuant to Section 5.7 or otherwise, and (iii) to perform all of its
other obligations hereunder.

          4.4 Litigation. Except as set forth in Schedule 4.4 of the Purchaser
Disclosure Letter, there is no action, claim, suit or proceeding at law or in equity pending or, to
the Knowledge of Purchaser, threatened against Purchaser or any of its Subsidiaries or affecting
any of its assets or properties that, if adversely determined, would reasonably be expected to
have, individually or in the aggregate, a Purchaser Material Adverse Effect. There are no
Governmental Orders of or by any Governmental Entity applicable to Purchaser or any of its
Subsidiaries except for such that would not reasonably be expected to have, individually or in the
aggregate, a Purchaser Material Adverse Effect.

          4.5 Investment Intention; Sufficient Investment Experience; Independent Investigation.
Purchaser has such knowledge and experience in financial and business matters that it is capable
of evaluating the Company and the merits and risks of an investment in the Shares. Purchaser has
been given adequate opportunity to examine all documents provided by, conduct due diligence and ask
questions of, and to receive answers from, Seller, the Company and their respective representatives
concerning the Company and Purchaser’s investment in the Shares. Purchaser acknowledges and
affirms that it has completed its own independent investigation, analysis and evaluation of the
Company and the Company Subsidiaries, that it has

15

 

made all such reviews and inspections of the business, assets, results of operations and
condition (financial or otherwise) of the Company and the Company Subsidiaries as it has deemed
necessary or appropriate, and that in making its decision to enter into this Agreement and to
consummate the transactions contemplated hereby it has relied on its own independent investigation,
analysis, and evaluation of the Company and the Company Subsidiaries and Seller’s representations
and warranties set forth in Article II and the Company’s representations and warranties set
forth in Article III.

          4.6 Brokers and Finders. Purchaser has not entered into any written agreement or
arrangement entitling any agent, broker, investment banker, financial advisor or other firm or
Person to any broker’s or finder’s fee or any other commission or similar fee in connection with
any of the transactions contemplated by this Agreement, except Citigroup Global Markets Inc., whose
fees and expenses will be paid by Purchaser in accordance with such party’s agreement with such
firm.

          4.7 Qualified for Permits. Purchaser is qualified to obtain any Permits necessary for
the operation by Purchaser of the Company or any Company Subsidiary as of the Closing in the same
manner as the Company or any Company Subsidiary are currently operated.

          4.8 No Knowledge of Seller or Company Breach. Neither Purchaser nor any of its
Affiliates has Knowledge of any breach or inaccuracy, or of any facts or circumstances which may
constitute or give rise to a breach or inaccuracy, of (i) any representation or warranty of Seller
set forth in Article II or (ii) any representation or warranty of Seller or the Company set
forth in Article III.

ARTICLE V

COVENANTS

          5.1 Conduct of Business. After the date hereof and prior to the Closing or earlier
termination of this Agreement, Seller shall exercise the voting, governance and contractual powers
available to it to cause the Company to, and the Company shall and shall cause the Company
Subsidiaries to, conduct its businesses in the ordinary and usual course in substantially the same
manner as heretofore conducted. After the date hereof and prior to the Closing or earlier
termination of this Agreement, except (i) as contemplated in or permitted by this Agreement, (ii)
as may be required to comply with any Company Material Contract (including any Financing Facility),
(iii) as required by applicable Law, (iv) in the ordinary and usual course of business, (v) to the
extent prohibited by a Financing Facility or (vi) to the extent Purchaser shall otherwise consent,
which decision regarding consent shall be made promptly and which consent shall not be unreasonably
withheld, conditioned or delayed, Seller shall not exercise the voting, governance and contractual
powers available to it to cause the Company to, and the Company shall not and shall not cause the
Company Subsidiaries to:

          (a) (i) except as set forth in Schedule 5.1(a), amend its Organizational Documents
other than amendments which are ministerial in nature or not otherwise material; (ii) split,
combine or reclassify its outstanding Equity Interests; or (iii) repurchase, redeem or

16

 

otherwise acquire any shares of its capital stock or any securities convertible into or
exchangeable or exercisable for any shares of its capital stock;

          (b) issue, sell, or dispose of any shares of, or securities convertible into or exchangeable
or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, any
shares of its capital stock, other than any issuance, sale or disposal, solely among any of the
Company and/or any Company Subsidiary;

          (c) except as set forth in Schedule 5.1(c), incur any indebtedness in a maximum
aggregate principal amount in excess of R$100,000;

          (d) except as set forth in Schedule 5.1(d), make any commitments for or make capital
expenditures in excess of R$1,000,000 individually or R$2,500,000 in the aggregate;

          (e) except as set forth in Schedule 5.1(e), make any acquisition of, or investment in,
assets or stock of any other Person or entity in excess of R$100,000 individually or R$300,000 in
the aggregate;

          (f) sell, transfer or otherwise dispose of any of its assets in excess of R$100,000
individually or R$300,000 in the aggregate;

          (g) request, on behalf of the Company and/or any Company Subsidiary, bankruptcy,
reorganization, including, but not limited to, recuperação judicial, recuperação extrajudicial or
any acordo privado in accordance with Federal Law # 11.101/05, insolvency, moratorium, or
preferential transfers, or any other measure subject to similar Laws relating to or affecting
creditors’ rights;

          (h) (x) terminate or amend or modify any material term of a Company Material Contract, (y)
enter into a new Company Material Contract or (z) grant any waiver of any material term under, or
give any material consent with respect to, any Company Material Contract, in each case which
Company Material Contract involves total consideration throughout its term in excess of
R$2,000,000;

          (i) enter into or amend any material Company Plan or any collective bargaining or labor
agreement (except, in each case, as may be required by applicable Law);

          (j) except as may be required to meet the requirements of applicable Law or changes in
Brazilian GAAP, change any accounting policy that would reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect;

          (k) except as required by the terms of any Company Plan, collective bargaining agreement or
any other existing agreement, increase salaries, remuneration or aggregate benefits payable to the
managers, executive officers and directors of any Company or Company Subsidiary;

          (l) except as set forth in Schedule 5.1(l), declare, pay or set aside for payment any
cash or non-cash dividend or other distribution in respect of any of the Shares or the Equity
Interest of any Company Subsidiary (other than cash dividends required by applicable Law); or

17

 

          (m) enter into any written agreement or contract to take any of the actions set forth in
subsections (a)-(l) of this Section 5.1.

          5.2 Approvals.

          (a) Each Party shall cooperate and use reasonable efforts to obtain as promptly as practicable
all Consents of any Governmental Entity or any other Person, including, without limitation, the
Company Required Consents, the Purchaser Required Consents, the Seller Required Statutory
Approvals, the Company Required Statutory Approvals and the Purchaser Required Statutory Approvals,
as applicable, required in connection with, and waivers of any breaches or violations of any
written contracts or agreements, Permits or other documents that may be caused by, the consummation
of the transactions contemplated by this Agreement. In furtherance of the foregoing, Purchaser
shall take all such actions, including, without limitation, (i) proposing, negotiating, committing
to and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture or
disposition of such assets or businesses of Purchaser or any of its Subsidiaries or, after the
Closing Date, of the Company or any of its Company Subsidiaries and (ii) otherwise taking or
committing to take actions that limit or would limit Purchaser’s or its Subsidiaries’ (including,
after the Closing Date, the Company’s or any of its Company Subsidiaries as Subsidiaries of
Purchaser) freedom of action with respect to, or its ability to retain, one or more of their
respective businesses, product lines or assets, in each case as may be required in order to (x)
obtain the Seller Required Statutory Approvals, the Company Required Statutory Approvals and the
Purchaser Required Statutory Approvals as soon as reasonably possible or (y) avoid the entry of, or
to effect the dissolution of, any injunction, temporary restraining order, or other order in any
suit or proceeding, which would otherwise have the effect of preventing or materially delaying the
Closing. Purchaser shall (i) respond as promptly as practicable to any inquiries or requests
received from any Governmental Entity for additional information or documentation and (ii) not
enter into any written agreement with any Governmental Entity that would reasonably be expected to
adversely affect the Parties’ ability to consummate the transactions contemplated by this
Agreement, except with the prior consent of the other Parties (which shall not be unreasonably
withheld or delayed).

          (b) The Parties shall promptly provide the other Parties with copies of all filings made with,
and inform one another of any communications received from, any Governmental Entity in connection
with this Agreement and the transactions contemplated hereby.

          5.3 Access. After the date hereof and prior to the Closing, Seller and the Company
agree that the Company and the Company Subsidiaries shall permit, and the Company and the Company
Subsidiaries shall exercise the voting, governance and contractual powers available to any of them
to cause (subject to any contractual, fiduciary or similar obligation of the Company or any Company
Subsidiary), the Company and each Company Subsidiary to permit, Purchaser and its employees,
counsel, accountants and other representatives to have reasonable access, upon reasonable advance
notice, during regular business hours, to the assets, employees, properties, books and records,
businesses and operations relating to the Company and the Company Subsidiaries as Purchaser may
reasonably request; provided, however, that in no event shall Seller, the Company
or any Company Subsidiary be obligated to provide any access or information (i) if Seller or the
Company determines, in good faith after consultation

18

 

with counsel, that providing such access or information may violate applicable Law, cause
Seller, the Company or any Company Subsidiary to breach a confidentiality obligation to which it is
bound, or jeopardize any recognized privilege available to Seller, the Company or any Company
Subsidiary; or (ii) to the extent set forth on Schedule 5.3. Purchaser agrees to indemnify
and hold Seller, the Company and the Company Subsidiaries harmless from any and all claims and
liabilities, including costs and expenses for loss, injury to or death of any representative of
Purchaser and any loss, damage to or destruction of any property owned by Seller, the Company or
the Company Subsidiaries or others (including claims or liabilities for loss of use of any
property) resulting directly or indirectly from the action or inaction of any of the employees,
counsel, accountants, advisors and other representatives of Purchaser during any visit to the
business or property sites of the Company or the Company Subsidiaries prior to the Closing Date,
whether pursuant to this Section 5.3 or otherwise. During any visit to the business or
property sites of the Company or the Company Subsidiaries, Purchaser shall, and shall cause its
employees, counsel, accountants, advisors and other representatives accessing such properties to,
comply with all applicable Laws and all of the Company’s and the Company Subsidiaries’ safety and
security procedures and conduct itself in a manner that could not be reasonably expected to
interfere with the operation, maintenance or repair of the assets of the Company or such Company
Subsidiary. Neither Purchaser nor any of its representatives shall conduct any environmental
testing or sampling on any of the business or property sites of the Company or the Company
Subsidiaries prior to the Closing Date. Each Party shall, and shall cause its Affiliates and
representatives to, hold in strict confidence all documents and information furnished to it by
another Party in connection with the transactions contemplated by this Agreement in accordance with
the Confidentiality Agreement.

          5.4 Publicity. Except as may be required by applicable Law or by obligations pursuant
to any listing agreement with or rules or regulations of any national securities exchange, prior to
the Closing none of Seller, the Company, Purchaser or any of their respective Affiliates shall,
without the express written approval of Seller, the Company and Purchaser, make any press release
or other public announcements concerning the transactions contemplated by this Agreement, except as
and to the extent that any such Party shall be so obligated by applicable Law or pursuant to any
such listing agreement or rules or regulations of any national securities exchange, in which case
the other Parties shall be advised and the Parties shall use reasonable efforts to cause a mutually
agreeable release or announcement to be issued.

          5.5 Tax Matters.

          (a) With respect to the period prior to January 1, 2008, Purchaser shall make no election
under Section 338 of the Code with respect to the Company or any Company Subsidiary in connection
with the transactions contemplated by this Agreement.

          (b) Following the Closing and prior to January 1, 2008, Purchaser shall not, and shall cause
each of the Company and each of the Company Subsidiaries not to, (i) sell the Equity Interests of
any Company Subsidiary, (ii) sell a substantial portion of the assets of any Company Subsidiary
outside of the ordinary course of business or (iii) make a non-cash distribution of any of the
Equity Interests or assets of any Company Subsidiary, in each case if such sale or distribution
could reasonably be expected to result in an increase in (x) “Subpart F” income under Section 951
of the Code or (y) deemed dividends recognized under Section 1248

19

 

of the Code that Seller or any of its Affiliates must report on any Tax Return;
provided, however, that in no event shall this Section 5.5(b) apply to any
sale, transfer or other disposition of the Equity Interest in Jaguari Geração de Energia S.A. or
its Subsidiaries.

          5.6 Employee Matters.

          (a) For a period of twelve (12) months following the Closing Date, Purchaser and the Company
shall cause the employees of the Company or any Company Subsidiary who remain in the employment of
Purchaser, the Company, their Subsidiaries or their respective successors (the “Continuing
Employees”) to receive compensation and employee benefits that in the aggregate are
substantially no less favorable than the compensation and employee benefits provided to such
employees immediately prior to the Closing. Nothing contained herein shall be construed as
requiring Purchaser, the Company or any Company Subsidiary to continue or to cause the continuance
of any specific employee benefit plans or to continue or cause the continuance of the employment of
any specific person.

          (b) With respect to each benefit plan of Purchaser or any of its Subsidiaries in which a
Continuing Employee participates after the Closing, for purposes of determining eligibility,
vesting and amount of benefits, including severance benefits and paid time off entitlement (but not
for pension benefit accrual purposes), Purchaser shall cause service with the Company and the
Company Subsidiaries (or predecessor employers to the extent the Company or any Company Subsidiary
provided past service credit) to be treated as service with Purchaser and its Subsidiaries;
provided that such service shall not be recognized to the extent that such recognition
would result in a duplication of benefits or to the extent that such service was not recognized
under an analogous Company Plan.

          (c) With respect to any welfare benefit plan maintained by Purchaser or its Subsidiaries in
which Continuing Employees are eligible to participate after the Closing, Purchaser shall, and
shall cause the Company and the Company Subsidiaries to, (i) waive all limitations as to
preexisting conditions and exclusions with respect to participation and coverage requirements
applicable to such employees to the extent such conditions and exclusions were satisfied or did not
apply to such employees under the Company Plans prior to the Closing and (ii) provide each
Continuing Employee with credit for any co-payments and deductibles paid prior to the Closing in
satisfying any analogous deductible or out of pocket requirements to the extent applicable under
any such plan.

          5.7 Fees and Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement (including, without limitation, any
fees and expenses of investment bankers, brokers, finders, counsel, advisors, experts or other
agents, in each case, incident to or in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the consummation of the transactions contemplated
hereby (whether payable prior to, at or after the Closing Date)) shall be paid by the Party
incurring such expense; provided that all such costs and expenses incurred by the Company
with respect to the transactions contemplated by this Agreement on or prior to the Closing Date
shall be paid by Seller; provided, further, that, notwithstanding any provision to
the contrary in this Agreement or any other agreement contemplated hereby, any and all expenses
incurred or suffered by or on behalf of the Company or any Company

20

 

Subsidiary or any limitation on, or diminution of, any Equity Interest held by the Company or
any Company Subsidiary in connection with the matters described on Schedule 5.7, including,
without limitation, with respect to investigating, analyzing or defending such matters (whether
incurred prior to or after the Closing) shall be borne, paid and reimbursed by Purchaser to Seller.

          5.8 [Intentionally left blank.]

          5.9 Termination of Affiliate Contracts. Except as set forth on Schedule 5.9,
all Affiliate Contracts, including any written agreements or understandings (written or oral) with
respect thereto, shall survive the Closing without any further action on the part of the parties
thereto or the Parties.

          5.10 Further Assurances. Each of Seller, the Company and Purchaser agrees that, from
time to time before and after the Closing Date, they will execute and deliver, and the Company
shall cause the Company Subsidiaries to execute and deliver, or use reasonable efforts to cause
their other respective Affiliates to execute and deliver such further instruments, and take, or
cause their respective Affiliates to take, such other action, as may be reasonably necessary to
carry out the purposes and intents of this Agreement. Purchaser, the Company and Seller agree to
use reasonable efforts to refrain from taking any action which could reasonably be expected to
materially delay the consummation of the Transaction.

          5.11 [Intentionally left blank.]

          5.12 Change of Name.

          (a) Notwithstanding anything to the contrary contained herein, within ninety (90) Business
Days after the Closing Date, Purchaser shall have caused each of the Company, CMS Comercializadora
de Energia Ltda. and CMS Energy Equipamentos, Serviços Indústria e Comércio S.A. to be renamed such
names as Purchaser shall identify by written notice to Seller no later than five (5) Business Days
prior to the Closing. On or after the Closing Date, Purchaser and its Affiliates shall not use
existing or develop new stationery, business cards and other similar items that bear the name or
mark of “CMS Energy Brasil S.A.”, “CMS Comercializadora de Energia Ltda.” or
“CMS Energy Equipamentos, Serviços Indústria e Comércio S.A.” or any similar derivation
thereof in connection with the businesses of the Company or any Company Subsidiary.

          (b) The Parties acknowledge that any damage caused to Seller or any of its Affiliates by
reason of the breach by Purchaser or any of its Affiliates of Section 5.12(a), in each case
would cause irreparable harm that could not be adequately compensated for in monetary damages
alone; therefore, each Party agrees that, in addition to any other remedies, at law or otherwise;
Seller and any of its Affiliates shall be entitled to an injunction issued by a court of competent
jurisdiction restraining and enjoining any violation by Purchaser or any of its Affiliates of
Section 5.12(a), and Purchaser further agrees that it (x) will stipulate to the fact that
Seller or any of its Affiliates, as applicable, have been irreparably harmed by such violation and
not oppose the granting of such injunctive relief and (y) waive any requirement that Seller post
any bond or similar requirement in order for Seller to obtain the injunctive relief contemplated by
this Section 5.12(b).

21

 

          5.13 [Intentionally left blank.]

          5.14 Resignations of Certain Officers and Directors. Upon the written request of
Purchaser, the Company shall cause the resignations or removals at the Closing Date of the
executive officers and directors set forth on Schedule 5.14 from their position as
executive officer or director of the Company or the Company Subsidiaries set forth opposite the
name of such executive officer or director on Schedule 5.14.

          5.15 Tag-Along and Other Shareholder Rights. Seller and the Company shall use
reasonable efforts to cause, and Purchaser shall do all things reasonably requested by Seller and
the Company as promptly as reasonably possible to ensure that, all tag-along and other contractual
rights under the shareholders agreements to which the Company or any Company Subsidiary is a party
and the obligations of Seller, the Company or any of their respective Affiliates in connection with
such tag-along and other contractual rights (including, without limitation, such rights and
obligations under the Shareholders Agreement) with respect to the Equity Interests of the Company
and any Company Subsidiary, as the case may be, (i) to cease to be an obligation of Seller, the
Company and such Affiliates, as the case may be, or (ii) to be terminated, including, without
limitation, by paying any amounts that may be required in connection therewith in accordance with
the following sentence. Purchaser agrees that if any holder of Equity Interests of the Company or
any Company Subsidiary (other than Seller, the Company or any Company Subsidiary) exercises any
tag-along or similar contractual or legal right to sell such Equity Interests, Purchaser will agree
to acquire or otherwise pay for such Equity Interests on the applicable contractual or other legal
terms and otherwise on substantially the same terms as set forth in this Agreement (with
appropriate adjustments to the terms and conditions, including, without limitation, the price to be
paid, as are necessary to reflect applicable contractual or other legal terms of the Equity
Interests to be acquired).

          5.16 Releases of Certain Guarantees. Purchaser shall procure at or prior to the
Closing the release by the applicable counterparty of any continuing obligation of Seller or its
Affiliates with respect to any guarantee as set forth on Schedule 5.16
(“Guarantees”); provided that to the extent a release shall not have been obtained
at the time of Closing with respect to any such Guarantee, Purchaser shall provide to Seller, as
beneficiary, in Seller’s sole and absolute discretion, a performance bond or an irrevocable letter
of credit (which, in each case, shall be in form and substance and issued by a financial
institution satisfactory to Seller) or an indemnity (in form and substance satisfactory to Seller)
to secure the obligations of Seller or its Affiliates with respect to each such Guarantee;
provided, further, that any such performance bond, irrevocable letter of credit or
indemnity with Seller, as beneficiary, shall remain in full force and effect for the same period
from and after the Closing as any such corresponding Guarantee shall remain in place.

          5.17 [Intentionally left blank.]

          5.18 Assignment of Certain Obligations. Seller, at its option, shall either (i) on or
prior to the Closing Date, cause the applicable Company Subsidiary to assign the obligations under
the agreements set forth on Schedule 5.18 to Seller or one of its Affiliates, which shall
assume such obligations, or (ii) reimburse or cause one of its Affiliates to reimburse amounts paid
by the Company or such Company Subsidiary with respect to such obligations on or after

22

 

the Closing Date if such agreements are not assigned and assumed pursuant to the foregoing
clause (i) of the prior sentence. In the latter case, the reimbursement by Seller to
Purchaser shall be made in immediately available funds to the account designated by Purchaser, for
all payments made by Purchaser during a month and reasonably documented, within ten (10) days from
the end of such month. Failure to comply with the payment in accordance with this Section
5.18, shall cause the payment amount to be duly adjusted by IGP-M, plus interest of one percent
(1%) per month with respect to Losses paid in reais. Payments to Purchaser under this Section
5.18 shall be made in reais, calculated at the exchange rate on the date or dates Seller makes
payment to Purchaser.

          5.19 Insurance. Prior to the Closing, Seller shall cause the Company and/or each
Company Subsidiary, as applicable, to renew the insurance policies to which they are a party as set
forth on Schedule 3.16 of the Company Disclosure Letter and are scheduled to expire on or
before the Closing Date or, with respect to those policies that are not renewable and as set forth
on Schedule 5.19, Seller shall cause the Company and/or each Company Subsidiary, as
applicable, to obtain reasonably comparable replacement policies.

ARTICLE VI

CONDITIONS TO CLOSING

          6.1 Conditions to the Obligations of the Parties. The obligations of the Parties to
effect the Closing shall be subject to the satisfaction or waiver (to the extent permitted by Law)
by Purchaser and Seller, on or prior to the Closing Date, of each of the following conditions
precedent:

          (a) No Injunction. No statute, rule or regulation shall have been enacted or
promulgated by any Governmental Entity which prohibits the consummation of the transactions
contemplated hereby and there shall be no order or injunction of a court of competent jurisdiction
in effect precluding or prohibiting the consummation of the transactions contemplated hereby;
provided, however, that should any such order or injunction be entered into or in
effect, the Parties shall use reasonable efforts to have any order or injunction vacated or lifted.

          (b) ANEEL Consent. The Consent of ANEEL in respect of the transactions contemplated
hereby shall have been obtained at or prior to the Closing.

          6.2 Conditions to the Obligation of Purchaser. The obligations of Purchaser to effect
the Closing shall be subject to the satisfaction or waiver by Purchaser on or prior to the Closing
Date of each of the following conditions:

          (a) Performance of Obligations of Seller and the Company. Each of Seller and the
Company shall have performed in all material respects its respective agreements and covenants
contained in or contemplated by this Agreement which are required to be performed by it at or prior
to the Closing.

          (b) Representations and Warranties. The representations and warranties of Seller and
the Company set forth in this Agreement shall be true and correct (i) on and as of the

23

 

date hereof and (ii) on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date (except for
representations and warranties that expressly speak only as of a specific date or time which need
only be true and correct as of such date or time) except in each of cases (i) and (ii) for such
failures of representations and warranties to be true and correct (without giving effect to any
materiality qualification or standard contained in any such representations and warranties) that
would not reasonably be expected to have, individually or in the aggregate, a Company Material
Adverse Effect or a Seller Material Adverse Effect.

          (c) Officer’s Certificate. Purchaser shall have received a certificate from an
authorized executive officer of Seller, dated as of the Closing Date, to the effect that, to the
best of such officer’s knowledge, the conditions set forth in Sections 6.2(a) and
6.2(b) have been satisfied.

          (d) Closing Deliverables. Purchaser shall have received all documents and other items
required to be delivered by Seller to Purchaser pursuant to Section 1.4.

          6.3 Conditions to the Obligation of Seller. The obligation of Seller to effect the
Closing shall be subject to the satisfaction or waiver by Seller on or prior to the Closing Date of
each of the following conditions:

          (a) Performance of Obligations of Purchaser. Purchaser shall have performed in all
material respects its respective agreements and covenants contained in or contemplated by this
Agreement which are required to be performed by it at or prior to the Closing.

          (b) Representations and Warranties. The representations and warranties of Purchaser
set forth in this Agreement shall be true and correct (i) on and as of the date hereof and (ii) on
and as of the Closing Date with the same effect as though such representations and warranties had
been made on and as of the Closing Date (except for representations and warranties that expressly
speak only as of a specific date or time which need only be true and correct as of such date or
time) except in each of cases (i) and (ii) for such failures of representations and warranties to
be true and correct (without giving effect to any materiality qualification or standard contained
in any such representations and warranties) that would not reasonably be expected to have,
individually or in the aggregate, a Purchaser Material Adverse Effect.

          (c) Officer’s Certificate. Seller shall have received a certificate from an
authorized executive officer of Purchaser, dated as of the Closing Date, to the effect that, to the
best of such officer’s knowledge, as applicable, the conditions set forth in Sections
6.3(a) and 6.3(b) have been satisfied.

          (d) Termination of Certain Company Obligations. Seller shall have received evidence
from Purchaser (which evidence shall be in form and substance satisfactory to Seller) to effect as
promptly as reasonably possible the purchase of or other satisfaction of all shareholder, tag-along
and related contractual or legal rights of any Person and the obligations of Seller, the Company or
any of their respective Affiliates in connection therewith (including, without

24

 

limitation, such rights and obligations under the Shareholders Agreement) with respect to the
Equity Interests of the Company and any Company Subsidiary in accordance with Section 5.15.

          (e) Releases of Certain Guarantees. The releases by the applicable counterparty of
any continuing obligation of Seller or any of its Affiliates with respect to each Guarantee shall
have been obtained in accordance with Section 5.16; provided that to the extent a
release shall not have been obtained at Closing with any such Guarantee, Seller, as beneficiary,
shall have received (in Seller’s sole and absolute discretion) from Purchaser a performance bond or
an irrevocable letter of credit (which, in each case, shall be in form and substance and issued by
a financial institution satisfactory to Seller) or an indemnity (in form and substance satisfactory
to Seller) to secure the obligations of Seller or its Affiliates with respect to each such
Guarantee; provided, further, that any such performance bond, irrevocable letter of credit or
indemnity with Seller, as beneficiary, shall remain in full force and effect for the same period
from and after the Closing as any such corresponding Guarantee shall remain in place.

          (f) Closing Deliverables. Seller shall have received all documents and other items
required to be delivered by Purchaser to Seller pursuant to Section 1.4.

ARTICLE VII

TERMINATION

          7.1 Termination. This Agreement may be terminated at any time prior to the Closing
Date:

          (a) by the mutual written agreement of Purchaser, the Company and Seller;

          (b) [Intentionally left blank.]

          (c) by Purchaser or Seller, if (i) a statute, rule, regulation or executive order shall have
been enacted, entered or promulgated prohibiting the consummation of the transactions contemplated
hereby or (ii) an order, decree, ruling or injunction shall have been entered permanently
restraining, enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby, and such order, decree, ruling or injunction shall have become final and non-appealable and
the Party seeking to terminate this Agreement pursuant to this Section 7.1(c)(ii) shall
have used reasonable efforts to remove such order, decree, ruling or injunction;

          (d) by Purchaser, by written notice to Seller, if the Closing Date shall not have occurred on
or before such date that is two hundred ten (210) days following the date hereof (the “Outside
Date”); provided, however, that the right to terminate this Agreement under
this Section 7.1(d) shall not be available to Purchaser if its failure to fulfill any
obligation under this Agreement shall have caused or resulted in the failure of the Closing Date to
occur on or before the Outside Date;

          (e) by Seller, by written notice to Purchaser, if the Closing Date shall not have occurred on
or before the Outside Date; provided, however, that the right to terminate this
Agreement under this Section 7.1(e) shall not be available to Seller if its failure to
fulfill any of

25

 

its material obligations under this Agreement shall have caused or resulted in the failure of
the Closing Date to occur on or before such date;

          (f) by Purchaser, so long as Purchaser is not then in material breach of any of its
representations, warranties, covenants or agreements hereunder, by written notice to Seller, if
there shall have been a breach of any representation or warranty of Seller or the Company, or a
breach of any covenant or agreement of Seller or the Company hereunder, which breaches would
reasonably be expected to have, individually or in the aggregate, a Company Material Adverse
Effect, and such breach shall not have been remedied within thirty (30) days after receipt by
Seller and the Company of notice in writing from Purchaser (a “Breach Notice”), specifying
the nature of such breach and requesting that it be remedied or Purchaser shall not have received
adequate assurance of a cure of such breach within such thirty-day period or Seller shall not have
made a capital contribution to the Company in an amount equal to the expected damages from such
breach, provided that Seller shall have no obligation to make any such capital contribution
pursuant to this Section 7.1(f); or

          (g) by Seller, so long as Seller or the Company is not then in material breach of any of their
representations, warranties, covenants or agreements hereunder, by written notice to Purchaser, if
there shall have been a breach of any representation or warranty, or a breach of any covenant or
agreement of Purchaser hereunder, which breaches would reasonably be expected to have, individually
or in the aggregate, a Purchaser Material Adverse Effect, and such breach shall not have been
remedied within thirty (30) days after receipt by Purchaser of notice in writing from Seller,
specifying the nature of such breach and requesting that it be remedied or Seller shall not have
received adequate assurance of a cure of such breach within such thirty-day period.

          7.2 Effect of Termination. No termination of this Agreement pursuant to Section
7.1 shall be effective until notice thereof is given to the non-terminating Parties specifying
the provision hereof pursuant to which such termination is made. If validly terminated pursuant to
Section 7.1, this Agreement shall become wholly void and of no further force and effect
without liability to any Party or to any Affiliate, or their respective members or shareholders,
directors, officers, employees, agents, advisors or representatives, and following such termination
no Party shall have any liability under this Agreement or relating to the transactions contemplated
by this Agreement to any other Party; provided that if this Agreement is terminated by a
Party because of a breach of this Agreement by the other Party then no such termination shall
relieve the other Party from liability for fraud or any willful or intentional breach of any
material provision of this Agreement occurring prior to such termination. If this Agreement is
terminated as provided in Section 7.1, Purchaser shall redeliver to Seller or the Company,
as the case may be, and will cause its agents to redeliver to Seller or the Company, as the case
may be, all documents, workpapers and other materials of Seller, the Company and the Company
Subsidiaries relating to any of them and the transactions contemplated hereby, whether obtained
before or after the execution hereof, and Purchaser shall comply with all of its obligations under
the Confidentiality Agreement.

26

 

ARTICLE VIII

SURVIVAL; INDEMNIFICATION

          8.1 Survival of Representations, Warranties, Covenants and Agreements; Exclusive
Remedy.

          (a) The representations and warranties in this Agreement shall survive the Closing and shall
terminate and expire on the date which is the first anniversary of the Closing Date (“Survival
Period Termination Date”) and shall not constitute after such date the basis for any claim for
indemnification under this Agreement, except for:

     (i) the representations and warranties of Seller contained in Sections
2.2 (Title to Shares) and 2.3(a) (Authority), that shall survive
indefinitely;

     (ii) the representations and warranties of the Seller with respect to the
Company contained in Sections 3.1(a) (Organization and Qualification),
3.1(b) (Authority) and 3.2 (Capitalization), that shall survive
indefinitely;

     (iii) the representations and warranties of Purchaser contained in Sections
4.2(a) (Authority) and 4.8 (No Knowledge of Seller or Company Breach),
that shall survive indefinitely; and

     (iv) the covenants and agreements of the Parties contained in Sections
5.3 (Access), 5.7 (Fees and Expenses), 5.10 (Further
Assurances), 5.12 (Change of Name), 5.16 (Releases of Certain
Guarantees) and 7.2 (Effect of Termination) and Article VIII
(Indemnification) that shall survive according with their terms.

          (b) The Parties agree that, from and after the Closing Date to and including the date on which
such claim or cause of action against any of the Parties is based upon, directly or indirectly, a
breach of any of the representations, warranties, covenants or agreements contained in this
Agreement may be brought only, as expressly provided in, this Article VIII, and the
indemnification provided for in this Article VIII shall be the sole and exclusive remedy
(except in the case of fraud) for Losses related to or in connection with such breach.

          8.2 Indemnification of Purchaser by Seller. Subject to the terms and conditions of
this Article VIII, and except when the Loss arises from Purchaser’s negligence or willful
misconduct or the matters contemplated by Section 8.5, from and after the Closing Date the
Seller shall, subject to Section 8.4, indemnify, defend and hold Purchaser and each of
Purchaser’s Affiliates, directors, officers and employees and the successors and assigns of any of
them (including, without limitation, the Company) (collectively, the “Purchaser Group”)
harmless from and against all Losses, arising from any claim resulting from, imposed upon or
incurred by any member of the Purchaser Group, directly or indirectly, by reason of or resulting
from any misrepresentation or inaccuracy of any representation or warranty of the Seller contained
in or made pursuant to Articles II or III of this Agreement and/or any breach by
Seller of any of its covenants, agreements or obligations contained in or made pursuant to this
Agreement. Payments to Purchaser under this Section 8.2 shall be made in reais, calculated
at the exchange rate on the date or dates Seller makes payment or payments to Purchaser.

27

 

          8.3 Indemnification of Seller by Purchaser. Subject to the terms and conditions of
this Article VIII, and except when the Loss arises from Seller’s negligence or willful
misconduct, from and after the Closing Date Purchaser shall indemnify, defend and hold Seller, its
Affiliates and each of their respective officers, directors, employees, agents and representatives
(the “Seller Group”) harmless from and against all Losses arising from any claim resulting
from, imposed upon or incurred by Seller, directly or indirectly, by reason of or resulting from
any misrepresentation or inaccuracy of any representation or warranty of Purchaser contained in or
made pursuant to Article IV of this Agreement; and/or any breach by Purchaser of any of its
covenants, agreements or obligations of Purchaser contained in or made pursuant to this Agreement
(including, without limitation, the matters contemplated by the proviso of the last sentence of
Section 5.7). Payments to Seller under this Section 8.3 shall be made in U.S.
currency, calculated at the exchange rate on the date or dates Purchaser makes payment or payments
to Seller or any other member of the Seller Group.

          8.4 Limitations on Seller’s Indemnification.

          (a) Limitations. Claims for indemnification under Section 8.2 shall be made
by Purchaser or by any other Person of the Purchaser Group in accordance with the following limits:

     (i) if such claim involves Losses equal to or in excess of US$50,000 (the
“Mini-Basket Amount”); and

     (ii) if such Losses with respect to the claims permitted to be made pursuant to
the foregoing clause (i) exceed in the aggregate an amount equal to
US$500,000 (the “Deductible Amount”), and then only to the extent such
Losses exceed the Deductible Amount.

          (b) Losses Below the Deductible Amount. Notwithstanding the provisions of this
Section 8.4, if claims made prior to the Survival Period Termination Date do not reach the
Deductible Amount, Seller agrees to pay to Purchaser the aggregate amount of the Losses related to
such claims meeting the Mini-Basket Amount definition and made until the Survival Period
Termination Date.

          (c) Indemnification Cap. The aggregate amount of Losses payable by Seller under this
Agreement shall not exceed US$10,000,000 (the “Indemnification Cap”) in the aggregate.

          (d) Calculation of Losses. The amount of any Loss subject to indemnification under
Section 8.2 or 8.3 shall be calculated net of any insurance proceeds (net of direct
collection expenses, deductibles and co-pays) or any indemnity, contribution or other similar
payment received by Indemnitee from any third party with respect thereto. To the extent a Loss is
reasonably expected to be covered by such policies, Indemnitee shall use commercially reasonable
efforts to recover under its insurance policies covering such Loss to the same extent as they would
if such Loss were not subject to indemnification hereunder; provided, however, that
nothing in this Section 8.4(d) shall prevent Indemnitee from also seeking to recover such
Loss from Indemnitor while such insurance claim is pending. In the event that an insurance or

28

 

other recovery is made by Indemnitee with respect to any Loss for which any such Person has
been indemnified hereunder, then a refund equal to the aggregate amount of the recovery (not to
exceed the amount of the applicable indemnification payment made to it) shall be made promptly to
Seller. Indemnitor shall be subrogated to all rights of Indemnitee and its Affiliates in respect
of any Losses indemnified by Indemnitor.

          8.5 Special Indemnification by Seller.

          (a) General. Notwithstanding any provision to the contrary in this Agreement or any
other agreement contemplated hereby, from and after the Closing Date, Seller shall indemnify
Purchaser against and hold it harmless from any Losses that result from or arise out of the matters
set forth on Schedule 8.5(a), which shall be excluded from the Seller’s indemnification
obligations and limits under Sections 8.2, 8.4(a), 8.4(b) and
8.4(c).

          (b) Special Seller Indemnification Cap. In no event shall the aggregate amount of
Losses payable by Seller under Section 8.5 exceed US$8,800,000 (the “Special Seller
Indemnification Cap”) in the aggregate.

          (c) Expiration. With respect to the claim noted in item 4 of Schedule 8.5(a),
the Seller’s obligations under this Section 8.5(c) shall expire on October 27, 2009, unless
a Third Party Claim (as defined in Section 8.7(a)) based on a Promissory Note is made with
respect thereto prior to such date; provided that, if the enforceability of such a
Promissory Note is tolled prior to the making of such Third Party Claim, the expiration date of
Seller’s obligation with respect to such Promissory Note under this Section 8.5(c) shall be
extended for a number of days equal to the number of days during which such enforceability was
tolled. With respect to the other matters noted in Schedule 8.5(a), Seller’s obligations
under this Section 8.5(c) shall expire on the fifteenth anniversary of the Closing Date.

          (d) Payments. Payments to Purchaser under this Section 8.5 shall be made in
reais, calculated at the exchange rate on the date or dates Seller makes payment or payments to
Purchaser.

          8.6 Mitigation. Each Person entitled to indemnification hereunder shall take
commercially reasonable steps to mitigate all Losses after becoming aware of any event that could
reasonably be expected to give rise to any Loss that is subject to indemnification hereunder.

          8.7 General Procedures Applicable to Claims for Indemnification.

          (a) Third Party Claim. Any request for indemnification by a party under this
Article VIII shall be valid only if the party making the request (“Indemnitee”)
notifies the other party in writing (“Indemnitor”) as promptly as reasonably practicable by
written notice in accordance with Section 10.1 regarding a claim or demand made by any
Person (other than a Party or Affiliate thereof) (“Third Party Claim”). Notice shall
specify the nature of the Third Party Claim, the applicable provision(s) of this Agreement under
which the Third Party Claim arises and, if possible, the amount of, or an estimated amount of, the
Loss and such other information as Indemnitor may reasonably request. No failure or delay in
giving a Third Party Claim Notice and no failure to include any specific information or any
reference to any provision

29

 

of this Agreement or other instrument under which the Third Party Claim arises shall affect
the rights of Indemnitee hereunder, except to the extent that such failure or delay materially
adversely affects the ability of Indemnitor to defend, settle or satisfy the Third Party Claim.

          (b) Right of Indemnitor to Assume Defense of Claim; Control of the Defense.
Indemnitor, at its sole cost and expense, shall have the right, upon written notice to Indemnitee
to assume the defense of the Third Party Claim if in such written notice Indemnitor acknowledges in
writing that the Third Party Claim is covered by the indemnification obligations under this
Article VIII and all Losses incurred by Indemnitor shall be included in the calculation of
the maximum amount of indemnification set forth in Section 8.4(c). If Indemnitor assumes
the defense of the Third Party Claim, it shall select reputable counsel reasonably acceptable to
Indemnitee to conduct the defense of the Third Party Claim and shall defend or settle the same. The
contest of the Third Party Claim may be conducted in the name and on behalf of Indemnitor or
Indemnitee, as the case may be appropriate. If Indemnitor assumes the defense of such claim,
Indemnitor shall have full authority, in consultation with Indemnitee, to determine all action to
be taken with respect to the Third Party Claim, except that Indemnitor may consent to a settlement
or compromise of, or the entry of any monetary judgment arising from, the Third Party Claim only
with the prior written consent of Indemnitee provided that, the proposed settlement, compromise or
entry: (A) does not contain an admission of guilt or wrongdoing on the part of Indemnitee, and (B)
does not provide for any remedy or sanction against Indemnitee other than the payment of money that
is required to be and is timely paid by Indemnitor. Should Indemnitor so elect to assume the
defense of such Third Party Claim, Indemnitor will not be liable to Indemnitee for legal expenses
subsequently incurred by Indemnitee in connection with the defense thereof, unless the Third Party
Claim involves potential conflicts of interest between Indemnitee and Indemnitor. Indemnitor will
be liable for the fees and expenses of counsel employed by Indemnitee for any period during which
Indemnitor has not assumed the defense thereof.

          (c) Cooperation in Defense. If requested by Indemnitor, Indemnitee shall cooperate
with Indemnitor and its counsel, including permitting reasonable access to books and records, in
contesting any Third Party Claim that Indemnitor elects to contest or, if appropriate, in making
any counterclaim against the Person asserting the Third Party Claim or any cross-complaint against
any Person, but Indemnitor shall reimburse Indemnitee for reasonable out-of-pocket costs incurred
by Indemnitee in so cooperating. With respect to any claims arising out or relating to Section
8.5, Purchaser shall, and shall cause its Affiliates to, provide Seller with such assistance as
may reasonably be requested by Seller in connection with any indemnification or defense with
respect to the matters provided for in Section 8.5, including, without limitation,
providing Seller with such information, documents and records and reasonable access to the services
of and consultations with such personnel of Purchaser or its Affiliates as Seller shall deem
reasonably necessary.

          (d) Failure of Indemnitor to Assume Defense. If Indemnitor does not inform Indemnitee
in writing that it will assume the defense of the Third Party Claim in accordance with the terms
hereof within one third of the legal term for defense or five (5) calendar days, whichever is less,
after the receipt of notice thereof, Indemnitee may, but not in any means shall be obliged to, at
Indemnitor’s sole expense, defend against the Third Party Claim in such manner as it may deem
appropriate, and the expense of such defense shall constitute an indemnifiable

30

 

Loss, which amounts shall be included in the calculation of the maximum amount of
indemnification set forth in Section 8.4(c). Indemnitor shall have the right, and
Indemnitee shall use its reasonable efforts to afford Indemnitor, to have its counsel attend,
observe and participate in all administrative and judicial meetings, conferences, hearings and
other proceedings in connection with such defense and to be provided with copies of, or reasonable
access to, all pleadings, notices and other filings in connection with such defense.

          (e) Dispute Resolution. In the event that Indemnitee should have a claim against
Indemnitor under this Article VIII, Indemnitee shall notify Indemnitor in writing, and in
reasonable detail, of such claim as promptly as reasonably practicable, including (i) the reason
why Indemnitee believes that Indemnitor is or will be obligated to indemnify Indemnitee, (ii) the
Loss amount and (iii) the basis on which Indemnitee has calculated such Loss amount (such notice
shall be referred to as the “Notice of Claim”). If, within twenty (20) Business Days upon
receipt of the Notice of Claim, Indemnitor does not deliver a notice in writing disputing in good
faith such Notice of Claim, then Indemnitor shall be deemed to have accepted such claim and the
Loss amount as final and binding without amendment or modification and conclusive upon the parties.
For ten (10) Business Days after the receipt of the Notice of Claim, Indemnitor and Indemnitee
shall use reasonable efforts to engage in negotiations and discussions relating to any matters
arising out of or concerning the Notice of Claim. If Indemnitor and Indemnitee shall fail to
resolve any such dispute during the 10-Business Day period, then the claim in dispute shall be
promptly submitted by Indemnitor (in any event, no later than five (5) Business Days after the
10-Business Day period) to the Panel in accordance with Section 10.9 of this Agreement.
Indemnitor and Indemnitee shall make readily available to the Panel all relevant books and records,
notices and documents, and all other items reasonably requested by the Panel. Section 10.9
shall govern the resolution of disagreements among the Parties under this Article VIII.

          8.8 Payment. Indemnitor shall reimburse Indemnitee for Losses incurred no later than
ten (10) days after the final resolution of a Notice of Claim in accordance with Section
8.7(e) or, with respect to Losses in relation to Third Party Claims (other than on-going
out-of-pocket costs and expenses with respect thereto), ten (10) days after Indemnitor receives
written notice from Indemnitee reasonably describing the Loss being claimed (“Loss Payment
Date”). Failure to comply with the Loss Payment Date shall cause the Loss amount to be duly
adjusted by IGP-M, plus interest of one percent (1%) per month with respect to Losses paid in
reais.

          8.9 Energy Guarantee.

          (a) For value received, Energy hereby fully, unconditionally and irrevocably guarantees from
and after the Closing Date (the “Energy Guarantee”) to Purchaser the prompt and punctual
payment of any amount Seller is required to pay under this Agreement, when and as the same shall
become due and payable, subject as to such payment obligations to the terms and conditions of this
Article VIII. Energy’s guarantee obligations include the principal, interest, fines, fees,
costs and other amounts that may be due and payable by Seller under this Agreement.

          (b) The Energy Guarantee is a first demand guarantee and shall constitute an autonomous and
independent obligation of Energy not being ancillary to the obligations of Seller under this
Agreement. Energy hereby agrees to cause any such payment to be made as if such payment were made
by Seller. Energy hereby waives diligence, presentment, demand of

31

 

payment, filing of claims with a court in the event of a merger or bankruptcy of Seller, any
right to require a proceeding first against Seller, protest or notice with respect to any amount
payable by Seller under this Agreement and all demands whatsoever, and covenants that the Energy
Guarantee will not be discharged except by (i) termination of this Agreement according to its
terms, (ii) termination or expiration of Seller’s indemnification obligations under this Agreement
or (iii) payment in full of all amounts due and payable under this Agreement.

          (c) Energy expressly waives the benefits set forth in Articles 366, 827, 835, 837, 838 and 839
of the Brazilian Civil Code and Article 595 of the Brazilian Code of Civil Procedure.

          (d) The applicability of the Energy Guarantee shall not be affected or impaired by any of the
following: (i) any extension of time, forbearance or concession given to Seller; (ii) any
assertion of, or failure to assert, or delay in asserting, any right, power or remedy against
Seller; (iii) any amendment of the provisions of this Agreement; (iv) any failure of Seller to
comply with any requirement of any Law; (v) the dissolution, liquidation, reorganization or any
other alteration of the legal structure of Seller; (vi) any invalidity or unenforceability of any
provision of this Agreement; or (vii) any other circumstance (other than complete payment by Seller
or Energy) which might otherwise constitute a legal or equitable discharge or defense of a surety
or a guarantor.

          (e) Energy shall be subrogated to all rights of Seller against Purchaser based on and to the
extent of any amounts paid to Purchaser by Energy pursuant to the provisions of the Energy
Guarantee.

          (f) All notices under this Article VIII from Purchaser or any member of the Purchaser
Group shall be given to Seller and Energy concurrently.

ARTICLE IX

DEFINITIONS AND INTERPRETATION

          9.1 Defined Terms. The following terms are defined in the corresponding Sections of
this Agreement:

	 	 	 
	Defined Term	 	Section Reference
	 
	 	 
	Affiliate Contracts

	 	Section 3.15
	Agreement

	 	Preamble
	Arbitration Expenses

	 	Section 10.9
	Balance Sheet

	 	Section 3.3(a)
	Breach Notice

	 	Section 7.1(f)
	Closing

	 	Section 1.3
	Closing Date

	 	Section 1.3
	Common Shares

	 	Recitals
	Company

	 	Preamble
	Company Disclosure Letter

	 	Article III

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	Defined Term	 	Section Reference
	Company Financial Statements

	 	Section 3.3(a)
	Company Material Contracts

	 	Section 3.11(a)
	Company Permits

	 	Section 3.9(a)
	Company Plans

	 	Section 3.8(a)
	Company Required Consents

	 	Section 3.1(c)
	Company Required Statutory Approvals

	 	Section 3.1(d)
	Continuing Employees

	 	Section 5.6(a)
	Contracting Party

	 	Section 3.11(a)
	Deductible Amount

	 	Section 8.4(a)(ii)
	Director Shareholder

	 	Recitals
	Dispute

	 	Section 10.9
	Energy

	 	Preamble
	Energy Guarantee

	 	Section 8.9
	Guarantees

	 	Section 5.16
	ICC

	 	Section 10.9
	Indemnification Cap

	 	Section 8.4(c)
	Indemnitee

	 	Section 8.7(a)
	Indemnitor

	 	Section 8.7(a)
	Intellectual Property

	 	Section 3.14
	Leased Real Property

	 	Section 3.10(a)
	Loss Payment Date

	 	Section 8.8
	Outside Date

	 	Section 7.1(d)
	Owned Real Property

	 	Section 3.10(a)
	Mini-Basket Amount

	 	Section 8.4(a)(i)
	Notice of Claim

	 	Section 8.7(e)
	Panel

	 	Section 10.9
	Party

	 	Preamble
	Preferred Shares

	 	Recitals
	Purchase Price

	 	Section 1.2
	Purchaser

	 	Preamble
	Purchaser Disclosure Letter

	 	Article IV
	Purchaser Group

	 	Section 8.2
	Purchaser Required Consents

	 	Section 4.2(b)
	Purchaser Required Statutory Approvals

	 	Section 4.2(c)
	Rules

	 	Section 10.9
	Seller

	 	Preamble
	Seller Disclosure Letter

	 	Article II
	Seller Group

	 	Section 8.3
	Seller Required Statutory Approvals

	 	Section 2.3(c)
	Shares

	 	Recitals
	Special Seller Indemnification Cap

	 	Section 8.5(b)
	Survival Period Termination Date

	 	Section 8.1(a)

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	Defined Term	 	Section Reference
	Third Party Claim

	 	Section 8.7(a)
	Transaction

	 	Section 1.1
	Violation

	 	Section 2.3(b)

          9.2 Definitions. Except as otherwise expressly provided in this Agreement, or unless
the context otherwise requires, whenever used in this Agreement, the following terms will have the
meanings indicated below:

     “Affiliate” means, with respect to any Person or group of Persons, a Person
that directly or indirectly through one or more intermediaries, controls, is controlled by,
or is under common control with such Person or group of Persons. “Control”
(including the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person, whether through the ownership of voting securities or other Equity
Interests, by contract or credit arrangement, as trustee or executor, or otherwise. Solely
for the purpose of the preceding sentence, a company is “directly controlled” by another
company or companies holding shares carrying the majority of votes exercisable at a general
meeting (or its equivalent) of the first mentioned company; and a particular company is
“indirectly controlled” by a company or companies (hereinafter called the “parent company or
companies”) if a series of companies can be specified, beginning with the parent company or
companies and ending with the particular company, so related that each company of the series
except the parent company or companies is directly controlled by one or more of the
preceding companies in the series.

     “ANEEL” means Agência Nacional de Energia Elétrica, the Brazilian Electricity
Regulatory Agency.

     “Brazilian GAAP” means the Princípios Fundamentais de Contabilidade, the
Brazilian Basic Principles of Accounting, as applied by the CVM and the CFC, in effect from
time to time, consistently applied.

     “Business Day” means a day other than a Saturday, a Sunday or any other day on
which banks are not required to be open or are authorized to close in New York, New York and
São Paulo, Brazil.

     “CFC” means Conselho Federal de Contabilidade, the Brazilian accounting
authority.

     “Code” means the United States Internal Revenue Code of 1986, as amended.

     “Company Material Adverse Effect” means any material adverse effect on the
business, properties, financial condition or results of operations of the Company and the
Company Subsidiaries taken as a whole; provided, however, that the term
“Company Material Adverse Effect” shall not include effects that result from or are
consequences of (i) changes in financial, securities or currency markets, changes in
prevailing interest

34

 

rates or foreign exchange rates, changes in general economic conditions, changes in
electricity, gas or other fuel supply and transmission and transportation markets, including
changes to market prices for electricity, steam, natural gas or other commodities, or
effects of weather or meteorological events, (ii) changes in Law, rule or regulation of any
Governmental Entity or changes in regulatory conditions in Brazil or any state or
municipality in which the Company operates, (iii) changes in accounting standards,
principles or interpretations, (iv) events or changes that are consequences of hostility,
terrorist activity, acts of war or acts of public enemies, (v) the negotiation,
announcement, execution, delivery, consummation or pendency of this Agreement or the
transactions contemplated by this Agreement or any action by Seller or its Affiliates
contemplated by or required by this Agreement or (vi) actions taken or not taken solely at
the request of Purchaser.

     “Company Subsidiary” means each of the Persons set forth on Schedule
3.2(b).

     “Confidentiality Agreement” means the Confidentiality Agreement, dated March
22, 2007, between CPFL Energia S.A. and J.P. Morgan Securities Inc., on behalf of an
Affiliate of Seller.

     “Consent” means any consent, approval, authorization, order, filing,
registration or qualification of, by or with any Person.

     “CVM” means the Comissão de Valores Mobiliários, which is the functional
equivalent in Brazil of the United States Securities and Exchange Commission.

     “Depositary Agent” means Banco Itaú S.A., the financial institution acting as
the depositary of the Shares.

     “Environmental Law” means any Brazilian federal, state, or local Law relating
to (a) the treatment, disposal, emission, discharge, Release or threatened Release of
Hazardous Substances or (b) the preservation and protection of the environment (including
natural resources, air and surface or subsurface land or waters).

     “Equity Interests” means shares of capital stock or other equity interests of
any Person, as the case may be.

     “Financing Facility” means an obligation of the Company or any Company
Subsidiary for borrowed money.

     “Governmental Entity” means any federal, state, municipal or local governmental
or quasi-governmental or regulatory authority, agency, court, commission or other similar
entity in the United States or any non-U.S. jurisdiction.

     “Governmental Order” means any order, decree, ruling, injunction, judgment or
similar act of or by any Governmental Entity.

     “Hazardous Substance” means (a) any material, substance or waste (whether
liquid, gaseous or solid) that (i) requires removal, remediation or reporting under any

35

 

Environmental Law, or is listed, classified or regulated as a “hazardous waste”
or “hazardous substance” (or other similar term) pursuant to any applicable
Environmental Law or (ii) is regulated under applicable Environmental Laws as being, toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous, (b) any petroleum product or by-product, petroleum-derived substances
wastes or breakdown products, asbestos or polychlorinated biphenyls, and (c) any ash,
scrubber residue, boiler slag, coal combustion byproducts or waste and flue desulfurization.

     “IGP-M” means Índice Geral de Preços ao Mercado, the general inflation index
calculated by Fundação Getúlio Vargas and used to adjust electricity rates in Brazil.

     “Knowledge” when used with respect to: (i) the Company, means the actual
knowledge of any fact, circumstance or condition of those officers of the Company set forth
on Schedule 9.2(a) of the Company Disclosure Letter; (ii) Seller, means the actual
knowledge of any fact, circumstance or condition of those officers and employees of Seller
and its Affiliates set forth on Schedule 9.2(b) of the Seller Disclosure Letter; and
(iii) Purchaser, means the actual knowledge of any fact, circumstance or condition of those
officers of Purchaser and its Affiliates, as the case may be, set forth on Schedule
9.2(c) of the Purchaser Disclosure Letter.

     “Law” means any law, statute, ordinance, regulation or rule of or by any
Governmental Entity or any arbitrator.

     “Liabilities” means any and all known liabilities or indebtedness of any nature
(whether direct or indirect, absolute or contingent, liquidated or unliquidated, due or to
become due, accrued or unaccrued, matured or unmatured, asserted or unasserted, determined
or determinable and whenever or however arising).

     “Lien” means any lien, claim, security interest, encumbrance or other adverse
claim.

     “Losses” means all losses and damages amounts, liabilities, costs, expenses,
awards, judgments, whether or not resulting from Third Party Claim (including reasonable
attorney’s and accountants fees and expenses) based, where applicable, upon a final and/or
non-appealable decision or other final resolution by settlement or otherwise of a demand,
claim, suit, action.

     “Operating Contract” means any written agreement or contract providing for (i)
the purchase, sale, supply, transportation, disposal or distribution of electricity, fuel or
any byproduct from electricity generation and (ii) the operation and maintenance of any
assets of the Company.

     “Organizational Documents” means, with respect to any corporation, its articles
or certificate of incorporation, memorandum or articles of association and by-laws or
documents of similar substance; with respect to any limited liability company, its articles
or certificate of organization, formation or association and its operating agreement or
limited liability company agreement or documents of similar substance; with respect to

36

 

any limited partnership, its certificate of limited partnership and partnership
agreement or documents of similar substance; with respect to a sociedade anônima de capital
aberto, its estatuto social; and with respect to any other entity, documents of similar
substance to any of the foregoing.

     “Permits” means all permits, licenses, franchises, registrations, variances,
authorizations, Consents, orders, certificates and approvals obtained from or otherwise made
available by any Governmental Entity or pursuant to any Law.

     “Permitted Liens” means (a) Liens for Taxes (i) not due and payable or (ii)
which are being contested in good faith by appropriate proceeding and for which adequate
reserves have been established, (b) Liens of warehousemen, mechanics and materialmen and
other similar statutory Liens incurred in the ordinary course of business, (c) any Liens
that do not materially detract from the value of any of the applicable property, rights or
assets of the businesses or materially interfere with the use thereof as currently used, (d)
zoning, entitlement, conservation, restriction or other land use or environmental regulation
by any Governmental Entity, (e) any Lien arising under (i) the Organizational Documents of
the Company and each Company Subsidiary or (ii) any shareholders or similar agreement to
which of the Company or any Company Subsidiary is a party or by which it is bound and (f)
any Lien in connection with or permitted by a Financing Facility.

     “Person” means any natural person, firm, partnership, association, corporation,
company, joint venture, trust, business trust, Governmental Entity or other entity.

     “Purchaser Material Adverse Effect” means any material adverse effect on (a)
the business, assets, financial condition or results of operations of Purchaser and its
Subsidiaries taken as a whole or (b) the ability of Purchaser to timely consummate the
transactions contemplated by this Agreement or perform its obligations hereunder.

     “Release” means the release, spill, emission, leaking, pumping, pouring,
emptying, escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migrating of any Hazardous Substance into the environment.

     “Seller Material Adverse Effect” means, with respect to Seller, any material
adverse effect on the ability of Seller to consummate the transactions contemplated by this
Agreement or perform its obligations hereunder.

     “Shareholders Agreement” dated April 20, 2005 between Companhia CMS
Distribuidora Ltda. and Eduardo Dias Roxo Nobre.

     “Subsidiary” means, with respect to any Person (for the purposes of this
definition, the “parent”), any other Person (other than a natural person), whether
incorporated or unincorporated, of which at least a majority of the securities or ownership
interests having by their terms ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions is directly or indirectly owned or
controlled by the parent or by one or more of its Subsidiaries or by the parent and any one
or more of its Subsidiaries.

37

 

     “Tax” or “Taxes” means federal, state, local or foreign income, gross
receipts, property, sales, use, license, excise, environmental, stamp, franchise,
employment, payroll, withholding, alternative or add-on minimum, ad valorem, value added,
transfer or excise tax, or any other tax, custom, duty, governmental fee or other like
assessment or charge of any kind whatsoever, together with any interest or penalty, imposed
by any Governmental Entity.

     “Tax Returns” means all tax returns, declarations, statements, reports,
schedules, forms and information returns and any amendments to any of the foregoing relating
to Taxes.

          9.3 Interpretation. In this Agreement, unless otherwise specified, the following
rules of interpretation apply:

          (a) references to Sections, Schedules, Seller Disclosure Letter, Company Disclosure Letter,
Purchaser Disclosure Letter, Exhibits and Parties are references to sections or sub-sections,
schedules in the Seller Disclosure Letter, the Company Disclosure Letter and Purchaser Disclosure
Letter, as the case may be, the Seller Disclosure Letter, the Company Disclosure Letter, Purchaser
Disclosure Letter, annexes and exhibits of, and parties to, as applicable, this Agreement;

          (b) the section and other headings contained in this Agreement are for reference purposes only
and do not affect the meaning or interpretation of this Agreement;

          (c) words importing the singular include the plural and vice versa;

          (d) references to the word “including” do not imply any limitation;

          (e) the words “hereof”, “herein” and “hereunder” and words of similar
import, when used in this Agreement, refer to this Agreement as a whole and not to any particular
provision of this Agreement;

          (f) all accounting terms not otherwise defined herein have the meanings assigned thereto under
Brazilian GAAP;

          (g) references to “R$” refer to Brazilian reais; and

          (h) references to “US$” refer to U.S. dollars.

ARTICLE X

GENERAL PROVISIONS

          10.1 Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and shall be deemed to
have been duly given on if (a) delivered personally, (b) mailed by certified or registered mail
with postage prepaid, (c) sent by next-day or overnight mail or delivery, or (d) sent by fax or
telegram, as follows:

38

 

(a) if to Purchaser,

CPFL Energia S.A.

Rodovia Campinas Mogi-Mirim

13088-900 Campinas SP, Brazil

Fax: (55-19) 3756-8111

Attention: Sergio de Britto Pereira Figueira

with a copy to:

Tozzini Freire Teixeira e Silva Advogados

R. Borges Lagoa, 1328

04038-904 São Paulo SP, Brazil

Fax: (55-11) 5086-5111

Attention: José Luis de Salles Freire

Mauro Eduardo Guizeline

(b) if to Seller,

CMS Electric & Gas, L.L.C.

c/o CMS Energy Corporation

One Energy Plaza

Jackson, MI 49201

Fax: (517) 788-1671

Attention: General Counsel

with a copy to Seller’s counsel:

Demarest e Almeida Advogados

Av. Pedroso de Moraes, 1201

05419-001 São Paulo SP, Brazil

Fax: (55-11) 2245-1700

Attention: Rogerio Lessa

with a copy to Seller’s U.S. counsel:

Sidley Austin LLP

787 Seventh Avenue

New York, NY 10019

Fax: (212) 839-5599

Attention: Lori Anne Czepiel

Jack I. Kantrowitz

(c) if to the Company,

CMS Energy Brasil S.A.

Rua Vigato, 1620

13820-000 Jaguaríúna SP, Brazil,

39

 

Fax: (55-19) 3837-4564

Attention: General Counsel

(d) if to Energy,

CMS Energy Corporation

One Energy Plaza

Jackson, MI 49201

Fax: (517) 788-1671

Attention: General Counsel

or, in each case, at such other address as may be specified in writing to the other Parties and
Energy.

     All such notices, requests, demands, waivers and other communications shall be deemed to have
been received, if by personal delivery, certified or registered mail or next-day or overnight mail
or delivery, on the day delivered or, if by fax or telegram, on the next Business Day following the
day on which such fax or telegram was sent, provided that a copy is also sent by certified or
registered mail. All notices under this Agreement for Purchaser or any member of the Purchaser
Group shall be given to Seller and to Energy concurrently. For the purposes of this Section
10.1, notice to the Company shall not constitute notice to Seller and/or Energy, and vice
versa.

          10.2 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the Parties, Energy and their respective heirs, successors and permitted assigns.

          10.3 Assignment; Successors; Third-Party Beneficiaries.

          (a) This Agreement is not assignable by any Party or Energy without the prior written consent
of all of the other Parties and Energy, as the case may be, and any attempt to assign this
Agreement without such consent shall be void and of no effect; provided, however,
that Purchaser may assign its rights and obligations hereunder to one or more of its Affiliates
(upon prior written notice to Seller), provided that Purchaser remains irrevocably and
unconditionally liable for all such rights and obligations; provided, however, that
no such assignment shall be permitted if such assignment shall impair, delay or otherwise adversely
affect the consummation of the Transaction and the other transactions contemplated hereby.

          (b) This Agreement shall inure to the benefit of, and be binding on and enforceable by and
against, the successors and permitted assigns of the respective Parties and Energy, whether or not
so expressed.

          (c) This Agreement is intended for the benefit of the Parties and Energy and does not grant
any rights to any third parties.

          10.4 Amendment; Waivers; etc. No amendment, modification or discharge of this
Agreement, and no waiver under this Agreement, shall be valid or binding unless set forth in
writing and duly executed by the Parties and Energy, as the case may be, against whom enforcement
of the amendment, modification, discharge or waiver is sought. Any such waiver

40

 

shall constitute a waiver only with respect to the specific matter described in such writing
and shall in no way impair the rights of any of the Parties or Energy, as the case may be, granting
such waiver in any other respect or at any other time. The waiver by any of the Parties or Energy,
as the case may be, of a breach of or a default under any of the provisions of this Agreement, or
any failure or delay to exercise any right or privilege under this Agreement, shall not be
construed as a waiver thereof or otherwise affect any of such provisions, rights or privileges
under this Agreement. The Parties and Energy shall amend this Agreement to make a wholly owned
direct subsidiary of Purchaser a party hereto, provided that Purchaser agrees to cause any such
Affiliate to enter into an amendment to this Agreement in accordance herewith pursuant to which
Purchaser and such Affiliate shall provide that each of the respective representations, warranties,
covenants and agreements made in this Agreement by Purchaser shall constitute the joint and several
representations, warranties, covenants and agreements of each of Purchaser and such Affiliate;
provided, further, that no amendment shall be permitted if such amendment shall
impair, delay or otherwise adversely affect the consummation of the Transaction and the other
transactions contemplated hereby and, in any event, after the tenth Business Day following the date
hereof.

          10.5 Entire Agreement.

          (a) This Agreement (including the Exhibits and the Seller Disclosure Letter, Company
Disclosure Letter and Purchaser Disclosure Letter referred to in or delivered under this Agreement)
and the Confidentiality Agreement contains the entire agreement between the parties relating to the
subject matter of this Agreement to the exclusion of any terms implied by Law which may be excluded
by contract and supersedes all prior agreements and understandings, both written and oral, among
the Parties and Energy with respect to such subject matters. Each of Party and Energy acknowledges
that it has not been induced to enter this Agreement by and, in agreeing to enter into this
Agreement, it has not relied on, any representations and warranties except as expressly stated or
referred to in this Agreement.

          (b) The liability of any Party or Energy shall be limited or excluded as set out in this
Agreement if and to the extent such limitations or exclusions apply, except for fraud.

          10.6 Severability. Any term or provision of this Agreement that is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in
any jurisdiction shall not affect the validity or enforceability of the remaining terms and
provisions hereof or the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction
or other authority declares that any term or provision hereof is invalid, void or unenforceable,
each of the Parties and Energy agree that the court making such determination, to the greatest
extent legally permissible, shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or to replace any
invalid, void or unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or unenforceable term
or provision.

41

 

          10.7 Counterparts. This Agreement may be executed and delivered (including via
facsimile) in several counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument.

          10.8 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of Brazil.

          10.9 Arbitration. Any dispute, action, claim or controversy of any kind related to,
arising from or in connection with this Agreement or the relationship of the parties under this
Agreement (the “Dispute”) whether based on contract, tort, common law, equity, statute,
regulation, order or any other source of law, shall be finally settled before the International
Chamber of Commerce (“ICC”) under the Rules of Arbitration (the “Rules”) of the ICC
by three (3) arbitrators designated by the Parties (the “Panel”). Seller (or Energy, to
the extent applicable for the limited purposes relating to Section 8.9), on the one hand,
and Purchaser, on the other hand, shall each designate one arbitrator to serve on the Panel. The
third arbitrator shall be designated by the two arbitrators designated by such parties. If either
party fails to designate an arbitrator within thirty (30) days after the filing of the Dispute with
the ICC, such arbitrator shall be appointed in the manner prescribed by the Rules. An arbitration
proceeding hereunder shall be conducted in New York, New York, and shall be conducted in the
English language. The decision or award of the Panel shall be in writing and shall be final and
binding on each of the Parties and Energy. The Panel shall award the prevailing party all fees and
expenses incurred in connection with the arbitration, including, without limitation, attorneys’
fees and costs, arbitration administrative fees charged by the ICC, Panel member fees and costs,
and any other costs associated with the arbitration (the “Arbitration Expenses”);
provided, however, that if the claims or defenses are granted in part and rejected
in part, the Panel shall proportionately allocate between Seller (or Energy, to the extent
applicable for the limited purposes relating to Section 8.9), on the one hand, and
Purchaser, on the other hand, the Arbitration Expenses in accordance with the outcomes. The Panel
may only award damages as provided for under the terms of this Agreement and in no event may
punitive, consequential and/or special damages be awarded. In the event of any conflict between
the Rules and any provision hereof, this Agreement shall govern.

          10.10 Limitation on Damages. Noe of the Parties nor Energy, shall, under any
circumstance, have any liability to any of the other parties, for any special, indirect,
consequential or punitive damages claimed by any such other party, under the terms of or due to any
breach or non-performance of this Agreement, including lost profits, loss of revenue or income,
cost of capital, or loss of business reputation or opportunity.

          10.11 Enforcement. Each of the Parties and Energy agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not to be performed in
accordance with the terms hereof and that Seller shall be entitled to specific performance of the
terms hereof in addition to any other remedies at law or in equity.

          10.12 No Right of Set-Off. Purchaser, for itself and its successors and permitted
assigns, hereby unconditionally and irrevocably waives any rights of set-off, netting, offset,
recoupment, or similar rights that such Purchaser or any of its successors and permitted assigns
has or may have with respect to the payment of the Purchase Price or any other payments to be
made by Purchaser pursuant to this Agreement or any other document or instrument delivered by
Purchaser in connection herewith.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

42

 

     IN WITNESS WHEREOF, the Parties and Energy have duly executed this Agreement as of the date
first above written.

	 	 	 	 	 
	 	CMS ELECTRIC & GAS, L.L.C.

 	 
	 	By:  	/s/ Joseph P. Tomasik
 	 
	 	 	Name:  	Joseph P. Tomasik 	 
	 	 	Title:  	Vice President 	 
	 

ACKNOWLEDGMENT

	 	 	 
	State of New York
	 	)
	 
	 	)
	County of New York
	 	)

     On this 12th day of April, 2007, before me, Adriel I. Cepeda Derieux, a duly appointed Notary
Public in and for the County of New York, State of New York, United States of America, appeared
Joseph P. Tomasik, to me known and known to me to be the Vice President of CMS Electric & Gas,
L.L.C., and the person who executed the foregoing instrument personally acknowledged to me that in
this capacity and with authority to issue this document he executed the same.

	 	 	 	 	 
	 	 	 
	 	     /s/ Adriel I. Cepeda Derieux
 	 
	 	Adriel I. Cepeda Derieux 	 
		Notary Public, New York County

New York, U.S.A.

My Commission expires  August 29, 2009 	 
	 

Brasil

S-1

 

	 	 	 	 	 
	 	CMS ENERGY BRASIL S.A.

 	 
	 	By:  	/s/ Joseph P. Tomasik
 	 
	 	 	Name:  	Joseph P. Tomasik 	 
	 	 	Title:  	Chairman 	 
	 
	 	 	 
	 	By:  	               /s/ Rajesh Swaminathan
 	 
	 	 	Name:  	Rajesh Swaminathan 	 
	 	 	 	 
	 

ACKNOWLEDGMENT

	 	 	 
	State of New York
	 	)
	 
	 	)
	County of New York
	 	)

     On this 12th day of April, 2007, before me, Adriel I. Cepeda Derieux, a duly appointed Notary
Public in and for the County of New York, State of New York, United States of America, appeared
Joseph P. Tomasik, to me known and known to me to be the Chairman of CMS Energy Brasil S.A., and
the person who executed the foregoing instrument personally acknowledged to me that in this
capacity and with authority to issue this document he executed the same.

	 	 	 	 	 
	 	 	 
	 	     /s/ Adriel I. Cepeda Derieux
 	 
	 	Adriel I. Cepeda Derieux 	 
	 	Notary Public, New York County

New York, U.S.A.

My Commission expires  August 29, 2009 	 
	 

Brasil

S-2

 

	 	 	 	 	 
	 	CPFL ENERGIA S.A.

 	 
	 	By:  	/s/ Reni Antonio da Silva
 	 
	 	 	Name:  	Reni Antonio da Silva 	 
	 	 	Title:  	Strategy and Regulation V.P. 	 
	 
	 	 	 
	 	By:  	      /s/ Jose Antonio de Almeida Filippo
 	 
	 	 	Name:  	José Antonio de Almeida Filippo 	 
	 	 	Title:  	CFO 	 
	 

ACKNOWLEDGMENT

	 	 	 
	State of New York
	 	)
	 
	 	)
	County of New York
	 	)

     On this 12th day of April, 2007, before me, Adriel I. Cepeda Derieux, a duly appointed Notary
Public in and for the County of New York, State of New York, United States of America, appeared
Reni Antonio da Silva and José Antonio de Almeida Filippo, to me known and known to me to be the
Strategy and Regulation V.P. and CFO, respectively, of CPFL Energia S.A., and each of the persons
who executed the foregoing instrument personally acknowledged to me that in this capacity and with
authority to issue this document he executed the same.

	 	 	 	 	 
	 	 	 
	 	     /s/ Adriel I. Cepeda Derieux
 	 
	 	Adriel I. Cepeda Derieux 	 
	 	Notary Public, New York County

New York, U.S.A.

My Commission expires August 29, 2009	 
	 

Brasil

S-3

 

Acknowledged solely for the limited purposes

of Section 8.9 as of the 12th day of April, 2007:

	 	 	 	 	 
	CMS ENERGY CORPORATION

 	 	 
	By:  	/s/ David W. Joos
 	 	 
	 	Name:  	David W. Joos 	 	 
	 	Title:  	President and Chief Executive
Officer 	 	 
	 

ACKNOWLEDGMENT

     On this 12th day of April, 2007, before me, Joyce H. Norkey, a duly appointed Notary Public in
and for the County of Jackson, State of Michigan, United States of America, appears David W. Joos,
to me known and known to me to be the President and Chief Executive Officer of CMS Energy
Corporation, and the person who executed the foregoing instrument personally acknowledged to me
that in this capacity and with authority to issue this document he executed the same.

	 	 	 	 	 
	 	 	 
	 	     /s/ Joyce H. Norkey
 	 
	 	Joyce H. Norkey 	 
	 	Notary Public, Jackson County

Michigan, U.S.A.

My Commission expires September 7, 2012	 
	 

Brasil

S-4

 

	 	 	 	 	 	 	 	 	 	 	 
	Witnessed by:	 	 	 	 	 	 	 	 
	/s/
Tobias Bremer
	 	 	 	 	 	/s/ Fabio H. Bicado	 	 	 	 
	 	 	 	 	 	 	 
	Name:  Tobias
Bremer

	 	 
	 	 	 	Name:  Fabio H. Bicado
	 	 
	 	 
	Title:    Vice-President

	 	 	 	 	 	Title:    Director	 	 	 	 
	Date:    4/12/07

	 	 	 	 	 	Date:    4/12/07	 	 	 	 

Brasil

S-5

 

EXHIBIT A to SHARE PURCHASE AGREEMENT

SELLER DISCLOSURE LETTER

to

SHARE PURCHASE AGREEMENT

by and among

CMS ELECTRIC & GAS, L.L.C.,

CMS ENERGY BRASIL S.A.,

and

CPFL ENERGIA S.A.

together with

CMS ENERGY CORPORATION

(solely for the limited purposes of Section 8.9)

Dated as of April 12, 2007

 

2

SELLER DISCLOSURE LETTER

to

SHARE PURCHASE AGREEMENT

by and among

CMS ELECTRIC & GAS, L.L.C.,

CMS ENERGY BRASIL, S.A.,

and

CPFL ENERGIA S.A.

Dated as of April 12, 2007

     This Seller Disclosure Letter is being furnished by CMS Electric & Gas, L.L.C.
(“Seller”) to CPFL Energia S.A. (“Purchaser”) in connection with the Share Purchase
Agreement dated as of April 12, 2007 (the “Agreement”) by and among Seller, CMS Energy
Brasil S.A. and CPFL Energia S.A. Unless the context otherwise requires, all capitalized terms
used in this Seller Disclosure Letter shall have the respective meanings assigned to them in the
Agreement.

     The contents of this Seller Disclosure Letter are qualified in their entirety by reference to
the specific provisions of the Agreement, and are not intended to constitute, and shall not be
construed as constituting, representations or warranties of Seller, except as and to the extent
provided in the Agreement.

     Nothing in this Seller Disclosure Letter shall constitute an admission that any information
disclosed, set forth or incorporated by reference in this Seller Disclosure Letter, either
individually or in the aggregate, is material, or would result in a Seller Material Adverse Effect.
No disclosure made in this Seller Disclosure Letter (i) shall be deemed to modify in any respect
the standard of materiality or any other standard for disclosure set forth in the Agreement or (ii)
relating to any possible breach or violation of any agreement, contract, Law or Governmental Order
shall be construed as an admission or indication that any such breach or violation exists or has
actually occurred.

 

3

     Notwithstanding anything to the contrary contained in this Seller Disclosure Letter or in the
Agreement, the information and disclosures contained in each schedule hereto shall be deemed to be
disclosed and incorporated by reference in each of the other schedules hereto as though fully set
forth in such other schedules.

     Headings have been inserted herein for convenience of reference only and shall to no extent
have the effect of amending or changing the express description of this Seller Disclosure Letter as
contemplated by the Agreement or the express description of the Sections of the Agreement.

 

4

Schedule 2.2.

Shares

CMS Energy Brasil S.A.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Ordinary Shares	 	Preferred Shares	 	Total Shares
	Shareholders	 	Quantity	 	% Participation	 	Quantity	 	% Participation	 	Quantity	 	% Participation
	CMS Electric and Gas LLC
	 	 	94.810.080	 	 	 	100,0000	 	 	 	94.810.075	 	 	 	100,0000	 	 	 	189.620.155	 	 	 	100,0000	 
	Sergio Omar Vulijscher
	 	 	0	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 
	Joseph Paul Tomasik
	 	 	0	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 
	Rajesh Swaminathan
	 	 	0	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 
	Rogério Cruz Themudo Lessa
	 	 	0	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 
	Patrick Charles Morin Junior
	 	 	0	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 	 	 	1	 	 	 	0,0000	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total
	 	 	94.810.080	 	 	 	100,00	 	 	 	94.810.080	 	 	 	100,00	 	 	 	189.620.160	 	 	 	100,00	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

 

5

Schedule 2.3(c)

Seller Required Statutory Approvals

1. ANEEL — According to Article 27 of Federal Law No. 8,987, of February 13, 1995 (the
Brazilian concessions law), any change of control of concessionaries (including distribution and
generation companies) or companies authorized to render public services (commercialization
companies) in Brazil must be submitted for prior approval with the Brazilian National Electricity
Agency (Agência Nacional de Energia Elétrica) — ANEEL. The respective application filed with ANEEL
must be submitted along with all documentation necessary to evidence the legal existence, as well
as the financial, operational and technical capacity of such applicant to assume all obligations
under a concession contract.

2. CADE — According to Article 54 of Federal Law No. 8,884, of June 11, 1994, any acts or
transactions capable of hindering or affecting competition in any manner as well as all acts
resulting in the concentration of a relevant market share in Brazil shall be presented to CADE -
Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica) for its
analysis and approval. All acts of concentration, whether or not against the economic order shall
be submitted to CADE for examination. Brazilian law requires that any type of agreement or
arrangement be submitted to the anti-trust agencies, if: (a) the consummation contemplated in any
such agreement or arrangement of transactions result in the control of a market share in excess of
twenty percent (20%) of a given market; or (b) any of the entities involved in the transaction or
the respective “group of companies” to which they belong (including the resulting entity or
combined transaction) has gross revenues during the preceding fiscal year equal to or in excess of
R$400,000,000. The CADE clearance process typically takes 6 to 9 months. The filing must be done,
in this transaction, within 15 Business Days after the date of the execution of the Agreement.

 

6

Schedule 9.2(b)

Seller Knowledge Group

Joseph Paul Tomasik

Rajesh Swaminathan

 

EXHIBIT B to SHARE PURCHASE AGREEMENT

COMPANY DISCLOSURE LETTER

to

SHARE PURCHASE AGREEMENT

by and among

CMS ELECTRIC & GAS, L.L.C.,

CMS ENERGY BRASIL S.A.,

and

CPFL ENERGIA S.A.

together with

CMS ENERGY CORPORATION

(solely for the limited purposes of Section 8.9)

Dated as of April 12, 2007

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	 
	 	 	 	 
	Definitions
	 	 	3	 
	Schedule 3.1(c)(i) Company Required Consents
	 	 	4	 
	Schedule 3.1(c)(ii) Non contravention
	 	 	6	 
	Schedule 3.1(d) Company Required Statutory Approvals
	 	 	7	 
	Schedule 3.2(b) Company Subsidiaries
	 	 	8	 
	Schedule 3.2(c) Agreements regarding Shares and Equity Interests
	 	 	12	 
	Schedule 3.3(a) Financial Statements
	 	 	13	 
	Schedule 3.3(b) Undisclosed Liabilities
	 	 	18	 
	Schedule 3.4(a) Absence of Certain Changes or Events
	 	 	29	 
	Schedule 3.5 Tax Matters
	 	 	30	 
	Schedule 3.6 Litigation
	 	 	34	 
	Schedule 3.7(a) Compliance with Laws
	 	 	48	 
	Schedule 3.8(a) Employee Benefits
	 	 	50	 
	Schedule 3.8(b) Employee Benefits
	 	 	51	 
	Schedule 3.8(e) Employee Benefits
	 	 	52	 
	Schedule 3.9(a) Permits
	 	 	53	 
	Schedule 3.10(a) Real Property
	 	 	54	 
	Schedule 3.11(a) Contracts
	 	 	56	 
	Schedule 3.11(b)(i) Contracts
	 	 	63	 
	Schedule 3.11(b)(ii) Contracts
	 	 	64	 
	Schedule 3.12 Environmental Matters
	 	 	65	 
	Schedule 3.13(a) Labor Matters
	 	 	67	 
	Schedule 3.13(b) Labor Matters
	 	 	68	 
	Schedule 3.15 Affiliate Contracts
	 	 	69	 
	Schedule 3.16 Insurance
	 	 	70	 
	Schedule 9.2(a) Company Knowledge Group
	 	 	71	 

 

 

2

COMPANY DISCLOSURE LETTER

to

SHARE PURCHASE AGREEMENT

by and among

CMS ELECTRIC & GAS, L..L.C.,

CMS ENERGY BRASIL S.A.,

and

CPFL ENERGIA S.A.

Dated as of April 12, 2007

     This Company Disclosure Letter is being furnished by CMS Energy Brasil S.A. (the
“Company”) to CPFL Energia S.A. (“Purchaser”) in connection with the Share Purchase
Agreement dated as of April 12, 2007 (the “Agreement”) by and among CMS Electric & Gas,
L.L.C., the Company and the Purchaser. Unless the context otherwise requires, all capitalized
terms used in this Company Disclosure Letter shall have the respective meanings assigned to them in
the Agreement or in the chart set forth below.

     The contents of this Company Disclosure Letter are qualified in their entirety by reference to
the specific provisions of the Agreement, and are not intended to constitute, and shall not be
construed as constituting, representations or warranties of the Company, except as and to the
extent provided in the Agreement.

     Nothing in this Company Disclosure Letter shall constitute an admission that any information
disclosed, set forth or incorporated by reference in this Company Disclosure Letter, either
individually or in the aggregate, is material, or would result in a Company Material Adverse
Effect. No disclosure made in this Company Disclosure Letter (i) shall be deemed to modify in any
respect the standard of materiality or any other standard for disclosure set forth in the Agreement
or (ii) relating to any possible breach or violation of any agreement, contract, Law or
Governmental Order shall be construed as an admission or indication that any such breach or
violation exists or has actually occurred.

     Notwithstanding anything to the contrary contained in this Seller Disclosure Letter or in the
Agreement, the information and disclosures contained in each schedule hereto shall be deemed to be
disclosed and incorporated by reference in each of the other schedules hereto as though fully set
forth in such other schedules.

     Headings have been inserted herein for convenience of reference only and shall to no extent
have the effect of amending or changing the express description of this Company
Disclosure Letter as contemplated by the Agreement or the express description of the Sections of
the Agreement.

 

3

Definitions

	 	 	 
	CAIUÁ

	 	Caiuá Serviços de Eletricidade S.A.
	CEB

	 	Companhia Energética de Brasília
	CEB LAJEADO

	 	CEB Lajeado S.A.
	CELPA

	 	Centrais Elétricas do Pará S.A.
	CELTINS

	 	Companhia de Energia Elétrica do Estado de Tocantins
	CEMAT

	 	Centrais Elétricas Matogrosseneses S.A.
	CJE

	 	Companhia Jaguari de Energia
	CJGE

	 	Companhia Jaguari de Geração de Energia
	CLFM

	 	Companhia Luz e Força de Mococa
	CMSD

	 	CMS Energy Brasil S.A.
	CPEE

	 	Companhia Paulista de Energia Elétrica
	CPEEQ

	 	CMS Energy Equipamentos, Serviços, Indústria e Comércio
S.A.
	CSPE

	 	Companhia Sul Paulista de Energia
	EDP

	 	EDP Brasil Serviços Corporativos Ltda.
	EDP LAJEADO

	 	EDP Lajeado Energia S.A.
	INVESTCO

	 	Investco S.A.
	PAULISTA LAJEADO

	 	Paulista Lajeado Energia S.A.
	REDE LAJEADO

	 	Rede Lajeado de Energia S.A.
	SUL PAULISTA

	 	Companhia Sul Paulista de Energia

 

4

Schedule 3.1(c)(i)

Company Required Consents

i. SHAREHOLDERS AGREEMENTS

None of the following Shareholders Agreements require any consent. However, pursuant to the terms
and conditions of the following Shareholders Agreements, the Company or the Company Subsidiary
party to such Shareholders Agreement, as the case may be, may be required to take certain action in
connection with the transactions contemplated by the Share Purchase Agreement

1. Shareholders Agreement (Acordo de Acionistas), dated April 20, 2005. Parties: Company (under its
former name, Companhia CMS Distribuidora Ltda.); Eduardo Dias Roxo Nobre (“EDRN”). Intervening
Parties: CPEE, CSPE, CJE, Mococa, CJGE, CPEEQ.

2. Shareholders Agreement (Acordo de Acionistas), dated February 15, 2006. Parties: CJGE, Centrais
Elétricas Brasileiras S.A. — Eletrobras. Intervening Parties: Paulista Lajeado.

3. Shareholders Agreement (Acordo de Acionistas), dated November 17, 1997. Parties: Shareholders
representing Investco’s voting capital. Intervening Party: Investco

ii. BNDES FINANCING AGREEMENTS

1. BNDES Financing Agreement (Contrato de Financiamento n. 00.2.457.3.1), dated September 21, 2000.
Parties: Lender — BNDES; Borrower — Investco S.A. Intervening Parties: Caiuá Serviços de
Eletricidade (“Caiuá”), Companhia de Energia do Estado de Tocantins (“CELTINS”), Centrais Elétricas
do Pará S.A. (“CELPA”), Centrais Elétricas Matogrossenses S/A (“CEMAT”), Rede Lajeado Energia S.A.
(“Rede Lajeado”), Companhia Sul Paulista de Energia (“CSPE”), Paulista Lajeado, EDP Brasil Serviços
Corporativos Ltda. (EDP Brasil Ltda.), EDP Lajeado Energia S.A. (EDP Lajeado), Companhia Energética
de Brasília (“CEB”), and CEB Lajeado S.A. (“CEB Lajeado”).

2. BNDES Financing Agreement (Contrato de Financiamento Mediante Abertura de Crédito) dated
February 14, 2002. Parties: Lender — BNDES; Borrower: CSPE. Intervening Parties: ANEEL, Banco
Bradesco.

     2.1. First Amendment to the BNDES Financing Agreement (Aditivo N. 1 ao Contrato de
Financiamento Mediante Abertura de Crédito n. 02.2.076.3.1), dated October 31, 2002. Parties:
Lender — BNDES; Borrower — CSPE. Intervening Parties: ANEEL and Banco Bradesco.

     2.2. Second Amendment to the BNDES Financing Agreement (Aditivo N. 2 ao Contrato de
Financiamento Mediante Abertura de Crédito n. 02.2.076.3.1) dated November 13, 2002. Parties:
Lender — BNDES; Borrower — CSPE. Intervening Parties: ANEEL and Banco Bradesco.

 

5

     2.3 Third Amendment to the BNDES Financing Agreement (Aditivo N. 3 ao Contrato de
Financiamento Mediante Abertura de Crédito n. 02.2.076.3.1) dated May 7, 2003. Parties: Lender —
BNDES; Borrower — CSPE. Intervening Parties: ANEEL; Banco Bradesco.

3. Financial Agents Financing Agreement (Contrato de Abertura de Crédito Mediante Repasse de
Empréstimo Contratado com o BNDES FINEM n. 041/2000-IC) dated September 21, 2000. Parties: Lender:
BNDES; Financial Agents: Banco Itaú S.A., Banco Bradesco S.A., Banco BBA Creditanstalt S.A., Banco
ABC Brasil S.A.; Borrower: Investco. Intervening Parties: Caiuá, CELTINS, CELPA, CEMAT, Rede
Lajeado, CSPE, EDP Brasil, EDP Lajeado, CEB and CEB Lajeado.

4. Fiduciary Agency Agreement (“Contrato de Agenciamento Fiduciário”), dated July 30, 2001.
Parties: Rede Lajeado, EDP Lajeado, CEB Lajeado, Paulista Lajeado, Investco, BNDES and other banks.

5. Share Pledge Agreement, dated September 29, 2000. Parties: Shareholders of Rede Lajeado,
Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP Lajeado, Paulista
Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

5.1. Amendment to the Share Pledge Agreement, dated February 1, 2001. Parties: Shareholders of Rede
Lajeado, Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP Lajeado,
Paulista Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

6. Concession Rights Pledge Agreement (Contrato de Penhor de Direitos Emergentes da Concessão)
dated July 30, 2001. Parties: Rede Lajeado Energia S.A., Paulista Lajeado de Energia, EDP Lajeado
Energia S.A., CEB Lajeado S.A., Investco, BNDES, Banco Itaú S.A., Banco Bradesco S.A., Banco BBA
Creditanstalt S.A., Banco ABC Brasil S.A

7. Investment Agreement and Counter-Guarantees (Contrato de Investimento, Contra-Garantias e Outras
Avenças), dated September 12, 2000. Parties: CELPA, CELTINS, Caiuá, CEMAT (jointly as shareholders
of Rede Lajeado), EDP Brasil (as shareholder of EDP Lajeado), CEB (as shareholder of CEB Lajeado),
CSPE (as shareholder of Paulista Lajeado), Rede Lajeado, EDP Lajeado, Paulista Lajeado and CEB
Lajeado. Intervening Parties: Investco and EDP Portugal.

8. Leasing Agreement (Contrato de Arrendamento), dated July, 2001. Parties: Investco S.A. and
Paulista Lajeado Energia S.A.

 

6

Schedule 3.1(c)(ii)

Non contravention

On March 19, 2007, Paulista Lajeado, an indirect subsidiary of CMSD, which is a subsidiary of CMS
Electric and Gas LLC, received a letter from EDP Lajeado, claiming that, in connection with
consideration by CMS Electric and Gas LLC of a potential sale of all of the stock of CMSD, EDP
Lajeado held purported rights of first refusal to purchase shares held by Paulista Lajeado in
Investco under a Shareholders Agreement dated November 17, 1997, between Rede Lajeado, Paulista
Lajeado, EDP Lajeado and CEB Lajeado and providing notice that EDP Lajeado would avail itself of
all legal remedies available to it under the Shareholders Agreement. CMS Electric and Gas LLC sent
a response to this letter on March 26, 2007, disputing EDP Lajeado’s claims. Were EDP Lajeado to
commence litigation to assert its purported right of first refusal, and were it prevail in any such
action, EDP Lajeado and possibly other shareholders of Investco may be held to have a right to
purchase the shares of Investco held by Paulista Lajeado.

On April 11, 2007, CMSD received a letter from Rede Lajeado making similar claims. The ultimate
sentence in the immediately previous paragraph is applicable to this letter as well.

 

7

Schedule 3.1(d)

Company Required Statutory Approvals

1. ANEEL — According to Article 27 of Federal Law No. 8,987, of February 13, 1995 (the
Brazilian concessions law), any change of control of concessionaries (including distribution and
generation companies) or companies authorized to render public services (commercialization
companies) in Brazil must be submitted for prior approval with the Brazilian National Electricity
Agency (Agência Nacional de Energia Elétrica) — ANEEL. The respective application filed with ANEEL
must be submitted along with all documentation necessary to evidence the legal existence, as well
as the financial, operational and technical capacity of such applicant to assume all obligations
under a concession contract.

2. CADE — According to Article 54 of Federal Law No. 8,884, of June 11, 1994, any acts or
transactions capable of hindering or affecting competition in any manner as well as all acts
resulting in the concentration of a relevant market share in Brazil
shall be presented to CADE —
Administrative Council for Economic Defense (Conselho Administrativo de Defesa Econômica) for its
analysis and approval. All acts of concentration, whether or not against the economic order shall
be submitted to CADE for examination. Brazilian law requires that any type of agreement or
arrangement be submitted to the anti-trust agencies, if: (a) the consummation contemplated in any
such agreement or arrangement of transactions result in the control of a market share in excess of
twenty percent (20%) of a given market; or (b) any of the entities involved in the transaction or
the respective “group of companies” to which they belong (including the resulting entity or
combined transaction) has gross revenues during the preceding fiscal year equal to or in excess of
R$400,000,000. The CADE clearance process typically takes 6 to 9 months. The filing must be done,
in this transaction, within 15 Business Days after the date of the execution of the Agreement.

 

8

Schedule 3.2(b)

Company Subsidiaries

1. CMS COMERCIALIZADORA DE ENERGIA LTDA.

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$ 630,292.00 divided into 630.292 quotas.

EQUITY INTERESTS OWNERSHIP:

CMS
Comercializadora de Energia Ltda.

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	630,291	 	 	 	99.99	 
	Sergio Omar Vulijscher
	 	 	1	 	 	 	0.01	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	630,292	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 

2. COMPANHIA PAULISTA DE ENERGIA ELÉTRICA

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$ 42,216,600.16 divided into 522,992,466 common shares
and 372,740,238 preferred shares (895,732,704 total shares).

EQUITY INTERESTS OWNERSHIP:

Companhia
Paulista de Energia Elétrica

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	828,702,554	 	 	 	92.55	 
	Minority Shareholders (*)
	 	 	5,759,124	 	 	 	0.64	 
	Total shares — Custody by CMS Energy Brasil
	 	 	834,461,678	 	 	 	93.20	 
	Board of Directors
	 	 	4,000	 	 	 	0.00	 
	Other
	 	 	60,907,633	 	 	 	6.80	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	895,373,311	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	359,393	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	895,732,704	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(*)	 	These represent shares of certain minority shareholders that are held in trust by CMS Energy Brasil.

 

9

3. COMPANHIA SUL PAULISTA DE ENERGIA

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$ 30,000,000.00 divided into 368,314,768 common shares and 95,167,552 preferred shares (463,482,320 total shares).

EQUITY INTERESTS OWNERSHIP:

Companhia
Sul Paulista de Energia

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	386,211,494	 	 	 	86.73	 
	Minority Shareholders (*)
	 	 	4,785,806	 	 	 	1.07	 
	Total shares — Custody by CMS Energy Brasil
	 	 	390,997,300	 	 	 	87.80	 
	Board of Directors
	 	 	7,408	 	 	 	0.00	 
	Other
	 	 	54,312,162	 	 	 	12.20	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	445,316,870	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	18,165,450	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	463,482,320	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(*)	 	These represent shares of certain minority shareholders that are held in trust by CMS Energy Brasil.

4. COMPANHIA JAGUARI DE ENERGIA

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$ 15,716,110.10 divided into 200,378,838 common shares and 11,746,789 preferred shares (212,125,627 total shares).

EQUITY INTERESTS OWNERSHIP:

Companhia
Jaguari de Energia

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	184,875,346	 	 	 	87.27	 
	Minority Shareholders (*)
	 	 	6,093,427	 	 	 	2.88	 
	Total shares — Custody by CMS Energy Brasil
	 	 	190,968,773	 	 	 	90.15	 
	Other
	 	 	20,875,514	 	 	 	9.85	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	211,844,287	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	281,340	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	212,125,627	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(*)	 	These represent shares of certain minority shareholders that are held in trust by CMS Energy Brasil.

 

10

5. COMPANHIA LUZ E FORÇA DE MOCOCA

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$8,000,000.00 divided into 106,678,227 common shares and
15,083,040 preferred shares (121,761,267 total shares).

EQUITY INTERESTS OWNERSHIP:

Companhia
Luz e Força de Mococa

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	101,461,477	 	 	 	86.73	 
	Minority Shareholders (*)
	 	 	3,540,257	 	 	 	3.03	 
	Total shares — Custody by CMS Energy Brasil
	 	 	105,001,734	 	 	 	89.75	 
	Other
	 	 	11,987,325	 	 	 	10.25	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	116,989,059	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	4,772,208	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	121,761,267	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(*)	 	These represent shares of certain minority shareholders that are held in trust by CMS Energy Brasil.

6. CMS ENERGY EQUIPAMENTOS, SERVIÇOS, INDÚSTRIA E COMÉRCIO S.A.

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$3,900,007.51 divided into 1,482,334,328 common shares.

EQUITY INTERESTS OWNERSHIP:

CMS
Energy, Equipamentos, Serviços, Indústria e Comércio
S.A.

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	1,267,296,930	 	 	 	87.82	 
	Minority Shareholders (*)
	 	 	28,842,368	 	 	 	2.00	 
	Total shares — Custody by CMS Energy Brasil
	 	 	1,296,139,298	 	 	 	89.81	 
	Other
	 	 	147,001,626	 	 	 	10.19	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	1,443,140,924	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	39,193,404	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued (**)
	 	 	1,482,334,328	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(* )	 	These represent shares of certain minorities that are held in trust by CMS Energy Brasil.

 

11

7. COMPANHIA JAGUARI GERAÇÃO DE ENERGIA

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$40,107,835.20 divided into 40,107,835 common shares.

EQUITY INTERESTS OWNERSHIP:

Companhia
Jaguari Geração de Energia

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	CMS Energy Brasil S.A.
	 	 	34,956,670	 	 	 	87.24	 
	Minority Shareholders (*)
	 	 	1,164,928	 	 	 	2.91	 
	Total shares — Custody by CMS Energy Brasil
	 	 	36,121,598	 	 	 	90.15	 
	Other
	 	 	3,948,616	 	 	 	9.85	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Outstanding
	 	 	40,070,214	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 
	Treasury Stock
	 	 	37,621	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued (**)
	 	 	40,107,835	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 

 

			
	(*)	 	These represent shares of certain minority shareholders that are held in trust by CMS Energy Brasil.
	 
	(**)	 	This total considers the increase of capital approved by the Ordinary and Extraordinary General Shareholders Assembly of 03/22/2007.

8. PAULISTA LAJEADO ENERGIA S.A.

JURISDICTION OF FORMATION: São Paulo, State of São Paulo

ISSUED AND OUTSTANDING EQUITY INTERESTS: R$56,232,189.25 divided into 31,499,174 common shares and
21.060.769 preferred shares (52,559,943 total shares).

EQUITY INTERESTS OWNERSHIP:

Paulista
Lajeado Energia S.A.

	 	 	 	 	 	 	 	 	 
	Shareholders	 	Total Shares	 	% Participation
	Centrais Elétricas Brasileiras S.A. — Eletrobrás
	 	 	21,060,767	 	 	 	40.07	 
	Companhia Jaguari de Geração de Energia
	 	 	31,499,170	 	 	 	59.93	 
	Board of Directors
	 	 	6	 	 	 	0.00	 
	 
	 	 	 	 	 	 	 	 
	Total Shares Issued
	 	 	52,559,943	 	 	 	100.00	 
	 
	 	 	 	 	 	 	 	 

Note: Centrais Elétricas Brasileiras S/A — Eletrobrás also holds 10,000 beneficiary parts.

See Schedule 3.1(c)(ii)

 

12

Schedule 3.2(c)

Agreements regarding Shares and Equity Interests

1. Shareholders Agreement (Acordo de Acionistas), dated April 20, 2005. Parties: Company (under its
former name, Companhia CMS Distribuidora Ltda.); Eduardo Dias Roxo Nobre (“EDRN”). Intervening
Parties: CPEE, CSPE, CJE, Mococa, CJGE, CMS Equipamentos.

2. Shareholders Agreement (Acordo de Acionistas), dated February 15, 2006. Parties: Companhia
Jaguari de Geração de Energia, Centrais Elétricas Brasileiras S.A. — Eletrobras. Intervening
Parties: Paulista Lajeado Energia S.A.

3. Shareholders Agreement (Acordo de Acionistas), dated November 17, 1997. Parties: Shareholders
representing Investco’s voting capital. Intervening Parties: Investco S.A.

4. Commitment Instrument (Termo de Compromisso), dated May 30, 2000, executed with Rede Lajeado ,
CEB Lajeado., Paulista Lajeado and EDP Lajeado.

5. Investment Agreement and Counter-Guarantees (Contrato de Investimento, Contra-Garantias e Outras
Avenças), dated September 12, 2000. Parties: CELPA, CELTINS, Caiuá, CEMAT (jointly as shareholders
of Rede Lajeado), EDP Brasil (as shareholder of EDP Lajeado), CEB (as shareholder of CEB Lajeado),
CSPE (as shareholder of Paulista Lajeado), Rede Lajeado, EDP Lajeado, Paulista Lajeado and CEB
Lajeado. Intervening Parties: Investco and EDP Portugal.

6. Share Pledge Agreement, dated September 29, 2000. Parties: Shareholders of Rede Lajeado,
Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP Lajeado, Paulista
Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

     6.1. Amendment to the Share Pledge Agreement, dated February 1, 2001. Parties: Shareholders of
Rede Lajeado, Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP
Lajeado, Paulista Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

See Schedule 3.1(c)(ii)

 

13

Schedule 3.3(a)

Financial Statements

Certain line items set forth in the Company Statements of Changes in Financial Position and Cash
Flow included in the Company Financial Statements referred to in Section 3.3(a) are inexact and
have been revised by the Company as set forth in the revised statements included in this Schedule
3.3(a). Such changes did not affect the amounts set forth in the lines entitled “Changes in Cash
and Cash Equivalents” or the beginning balances and ending balances for years ended December 31,
2006, 2005 and 2004.

 

14

CMS ENERGY BRASIL S.A.

STATEMENTS OF CHANGES IN FINANCIAL POSITION

Years ended December 31, 2006, 2005 and 2004

(In thousands of reais, unless otherwise stated)

(A free translation of the original issued in Portuguese)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Consolidated
	 	 	 	 	 	 	Restated	 	 	 	 	 	Restated
	 	 	2006	 	2005	 	2004	 	2006	 	2005	 	2004
	SOURCES OF FUNDS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	From operations
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net income for the year
	 	 	35,066	 	 	 	30,160	 	 	 	22,200	 	 	 	35,066	 	 	 	30,160	 	 	 	22,200	 
	Items not affecting net working capital:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equity in income of subsidiaries
	 	 	(30,803	)	 	 	(26,385	)	 	 	(23,792	)	 	 	—	 	 	 	—	 	 	 	—	 
	Depreciation
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	9,972	 	 	 	9,333	 	 	 	8,335	 
	Net noncurrent monetary variation
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	552	 	 	 	(3,177	)	 	 	(13,437	)
	Amortization of goodwill
	 	 	5,816	 	 	 	5,634	 	 	 	5,474	 	 	 	6,538	 	 	 	6,356	 	 	 	6,196	 
	Investments disposed of
	 	 	—	 	 	 	—	 	 	 	2,478	 	 	 	—	 	 	 	—	 	 	 	337	 
	Property, plant and equipment disposed of
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,125	 	 	 	867	 	 	 	924	 
	Participation of minority interest
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,506	 	 	 	6,033	 	 	 	5,593	 
	Deferred income and social contribution taxes
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	858	 	 	 	(15	)	 	 	(5,498	)
	Provision for contingencies
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3,963	)	 	 	(5,047	)	 	 	(3,429	)
	 	 	 	 	 
	Sources from operations
	 	 	10,079	 	 	 	9,409	 	 	 	6,360	 	 	 	55,654	 	 	 	44,510	 	 	 	21,221	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	From related companies
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dividends and interest on own capital received or
receivable
	 	 	25,472	 	 	 	13,051	 	 	 	7,790	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	 	 	 	 
	Sources from related companies
	 	 	25,472	 	 	 	13,051	 	 	 	7,790	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	From third parties
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Consumer contributions — concession related liabilities
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	635	 	 	 	1,009	 	 	 	272	 
	Transfer from noncurrent to current assets
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	13,572	 	 	 	23,733	 	 	 	15,939	 
	Increase in noncurrent liabilities
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,110	 	 	 	872	 	 	 	1,050	 
	Goodwill on merger of CMS-Participações
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	33,519	 
	Increase in minority interest
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	78,423	 	 	 	—	 
	Liabilities to minority interest
	 	 	—	 	 	 	15,711	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 
	 	 	 	 	 
	Sources from third parties
	 	 	—	 	 	 	15,711	 	 	 	—	 	 	 	17,317	 	 	 	104,037	 	 	 	50,780	 
	 	 	 	 	 
	Total sources
	 	 	35,551	 	 	 	38,171	 	 	 	14,150	 	 	 	72,971	 	 	 	148,547	 	 	 	72,001	 
	 	 	 	 	 

 

15

CMS ENERGY BRASIL S.A.

STATEMENTS OF CHANGES IN FINANCIAL POSITION—Continued

Years ended December 31, 2006, 2005 and 2004

(In thousands of reais, unless otherwise stated)

(A free translation of the original issued in Portuguese)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Consolidated
	 	 	 	 	 	 	Restated	 	 	 	 	 	Restated
	 	 	2006	 	2005	 	2004	 	2006	 	2005	 	2004
	 	 	 	 	 
	APPLICATIONS OF FUNDS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Increase in noncurrent assets
	 	 	1,286	 	 	 	—	 	 	 	—	 	 	 	5,244	 	 	 	6,395	 	 	 	36,304	 
	Property, plant and equipment
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	20,094	 	 	 	16,445	 	 	 	15,909	 
	Investments
	 	 	6	 	 	 	1,910	 	 	 	22,927	 	 	 	1,411	 	 	 	76,301	 	 	 	3,002	 
	Decrease in minority interest
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,513	 	 	 	—	 	 	 	13,120	 
	Transfer from noncurrent to current liabilities
	 	 	—	 	 	 	—	 	 	 	4	 	 	 	9,325	 	 	 	6,453	 	 	 	6,290	 
	Dividends proposed and/or paid
	 	 	38,975	 	 	 	8,923	 	 	 	4,286	 	 	 	38,975	 	 	 	8,923	 	 	 	4,286	 
	Interest on own capital
	 	 	13,972	 	 	 	11,760	 	 	 	6,473	 	 	 	13,972	 	 	 	11,760	 	 	 	6,474	 
	 	 	 	 	 
	Total applications
	 	 	54,239	 	 	 	22,593	 	 	 	33,690	 	 	 	94,534	 	 	 	126,277	 	 	 	85,385	 
	 	 	 	 	 
	Increase (decrease) in net working capital
	 	 	(18,688	)	 	 	15,578	 	 	 	(19,540	)	 	 	(21,563	)	 	 	22,270	 	 	 	(13,384	)
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Changes in net working capital
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Current assets:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	At the end of the year
	 	 	8,944	 	 	 	26,402	 	 	 	13,212	 	 	 	109,773	 	 	 	127,848	 	 	 	107,525	 
	At the beginning of the year
	 	 	26,402	 	 	 	13,212	 	 	 	12,215	 	 	 	127,848	 	 	 	107,525	 	 	 	76,418	 
	 	 	 	 	 
	 
	 	 	(17,458	)	 	 	13,190	 	 	 	997	 	 	 	(18,075	)	 	 	20,323	 	 	 	31,107	 
	 	 	 	 	 
	Current liabilities:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	At the end of the year
	 	 	31,452	 	 	 	30,222	 	 	 	32,610	 	 	 	103,170	 	 	 	99,682	 	 	 	101,629	 
	At the beginning of the year
	 	 	30,222	 	 	 	32,610	 	 	 	12,073	 	 	 	99,682	 	 	 	101,629	 	 	 	57,138	 
	 	 	 	 	 
	 
	 	 	1,230	 	 	 	(2,388	)	 	 	20,537	 	 	 	3,488	 	 	 	(1,947	)	 	 	44,491	 
	 	 	 	 	 
	Increase (decrease) in net working capital
	 	 	18,688	 	 	 	15,578	 	 	 	(19,540	)	 	 	(21,563	)	 	 	22,270	 	 	 	(13,384	)
	 	 	 	 	 

See accompanying notes to financial statements.

 

16

CMS ENERGY BRASIL S.A.

STATEMENTS OF CASH FLOW

Years ended December 31, 2006, 2005 and 2004

(In thousands of reais, unless otherwise stated)

(A free translation of the original issued in Portuguese)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Consolidated
	 	 	 	 	 	 	Restated	 	 	 	 	 	Restated
	 	 	2006	 	2005	 	2004	 	2006	 	2005	 	2004
	 	 	 	 	 
	OPERATING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net income for the year
	 	 	35,066	 	 	 	30,160	 	 	 	22,200	 	 	 	35,066	 	 	 	30,160	 	 	 	22,200	 
	Adjustments to reconcile net income to cash from operating activities:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Allowance for doubtful accounts
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(77	)	 	 	2,114	 	 	 	1,656	 
	Depreciation
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	9,972	 	 	 	9,333	 	 	 	8,335	 
	Net noncurrent monetary variation
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	552	 	 	 	(3,177	)	 	 	(13,097	)
	Equity in income of subsidiaries
	 	 	(30,803	)	 	 	(26,385	)	 	 	(23,792	)	 	 	—	 	 	 	—	 	 	 	—	 
	Amortization of goodwill
	 	 	5,816	 	 	 	5,634	 	 	 	5,474	 	 	 	6,538	 	 	 	6,356	 	 	 	6,196	 
	Provision for contingencies
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3,963	)	 	 	(5,047	)	 	 	(3,430	)
	Investment disposed of
	 	 	—	 	 	 	—	 	 	 	2,478	 	 	 	—	 	 	 	—	 	 	 	—	 
	Deferred income and social contribution taxes
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	858	 	 	 	(15	)	 	 	(5,313	)
	Property, plant and equipment disposed of
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	1,125	 	 	 	867	 	 	 	924	 
	 	 	 	 	 
	 
	 	 	(24,987	)	 	 	(20,751	)	 	 	(15,840	)	 	 	15,005	 	 	 	10,431	 	 	 	(4,729	)
	 	 	 	 	 
	CHANGES IN ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Consumers and concessionaires
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	5,363	 	 	 	3,651	 	 	 	(1,733	)
	Recoverable taxes and contributions
	 	 	1,851	 	 	 	320	 	 	 	(1,470	)	 	 	4,698	 	 	 	(1,622	)	 	 	(9,011	)
	Inventories
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(230	)	 	 	1,317	 	 	 	(934	)
	Prepaid expenses
	 	 	(16	)	 	 	—	 	 	 	—	 	 	 	3,603	 	 	 	(2,468	)	 	 	(5,889	)
	Related party
	 	 	16,494	 	 	 	(19,243	)	 	 	—	 	 	 	17,047	 	 	 	(19,243	)	 	 	—	 
	Judicial deposits
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(997	)	 	 	7,586	 	 	 	(446	)
	Tax benefit — goodwill on merger
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	3,062	 	 	 	2,996	 	 	 	—	 
	Other
	 	 	(1,922	)	 	 	(120	)	 	 	(236	)	 	 	5,523	 	 	 	(3,067	)	 	 	7,435	 
	 	 	 	 	 
	 
	 	 	16,407	 	 	 	(19,043	)	 	 	(1,706	)	 	 	38,069	 	 	 	(10,850	)	 	 	(10,578	)
	 	 	 	 	 
	CHANGES IN LIABILITIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trade accounts payable
	 	 	(74	)	 	 	98	 	 	 	12	 	 	 	2,173	 	 	 	10,933	 	 	 	6,153	 
	Payroll and labor accruals
	 	 	4	 	 	 	—	 	 	 	—	 	 	 	(251	)	 	 	1,401	 	 	 	940	 
	Taxes and social contributions
	 	 	(2,443	)	 	 	990	 	 	 	1,525	 	 	 	(4,503	)	 	 	890	 	 	 	4,622	 
	Regulatory charges
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,384	 	 	 	(737	)	 	 	1,023	 
	Tariff realignment
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(1,365	)	 	 	(13,734	)	 	 	15,099	 
	Accounts payable — corporate restructuring
	 	 	37	 	 	 	—	 	 	 	—	 	 	 	37	 	 	 	(3,523	)	 	 	24,560	 
	Other
	 	 	95	 	 	 	1,255	 	 	 	(1,182	)	 	 	579	 	 	 	22	 	 	 	(3,858	)
	 	 	 	 	 
	 
	 	 	(2,381	)	 	 	2,343	 	 	 	355	 	 	 	(946	)	 	 	(4,748	)	 	 	48,539	 
	 	 	 	 	 
	TOTAL OPERATING ACTIVITIES
	 	 	24,105	 	 	 	(7,291	)	 	 	(5,009	)	 	 	87,194	 	 	 	24,993	 	 	 	55,432	 
	 	 	 	 	 

 

17

CMS ENERGY BRASIL S.A.

STATEMENTS OF CASH FLOW—Continued

Years ended December 31, 2006, 2005 and 2004

(In thousands of reais, unless otherwise stated)

(A free translation of the original issued in Portuguese)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Company	 	Consolidated
	 	 	 	 	 	 	Restated	 	 	 	 	 	Restated
	 	 	2006	 	2005	 	2004	 	2006	 	2005	 	2004
	 	 	 	 	 
	INVESTING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Goodwill on merger
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	2,997	 	 	 	4,974	 
	Interest on own capital and dividends
	 	 	25,472	 	 	 	19,082	 	 	 	8,664	 	 	 	—	 	 	 	—	 	 	 	—	 
	Additions to property, plant and equipment in service
	 	 	—	 	 	 	—	 	 	 	(3	)	 	 	(20,094	)	 	 	(16,445	)	 	 	(15,909	)
	Increase in investments
	 	 	(6	)	 	 	(1,909	)	 	 	—	 	 	 	(1,412	)	 	 	—	 	 	 	(2,663	)
	Consumer contributions
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	635	 	 	 	1,008	 	 	 	272	 
	 	 	 	 	 
	 
	 	 	25,466	 	 	 	17,173	 	 	 	8,661	 	 	 	(120,871	)	 	 	(12,440	)	 	 	(13,326	)
	 	 	 	 	 
	FINANCING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Financing — financial institutions
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(4,627	)	 	 	(6,594	)	 	 	—	 
	Financing — related companies
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(3,889	)
	Interest on own capital and dividends
	 	 	(49,336	)	 	 	(25,414	)	 	 	(13,505	)	 	 	(48,836	)	 	 	(2,189	)	 	 	(16,163	)
	Minority interest
	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(6	)	 	 	(7,550	)	 	 	—	 
	Purchase of shares
	 	 	—	 	 	 	15,711	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	(18,713	)
	 	 	 	 	 
	 
	 	 	(49,336	)	 	 	(9,703	)	 	 	(13,505	)	 	 	(53,469	)	 	 	(16,333	)	 	 	(38,765	)
	 	 	 	 	 
	CHANGES IN CASH AND CASH EQUIVALENTS
	 	 	235	 	 	 	179	 	 	 	165	 	 	 	12,854	 	 	 	(3,780	)	 	 	3,341	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Beginning balance of cash and cash equivalents
	 	 	348	 	 	 	169	 	 	 	4	 	 	 	17,673	 	 	 	21,453	 	 	 	18,112	 
	Ending balance of cash and cash equivalents
	 	 	583	 	 	 	348	 	 	 	169	 	 	 	30,527	 	 	 	17,673	 	 	 	21,453	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	CHANGES IN CASH AND CASH EQUIVALENTS
	 	 	235	 	 	 	179	 	 	 	165	 	 	 	12,854	 	 	 	(3,780	)	 	 	3,341	 
	 	 	 	 	 

 

18

Schedule 3.3(b)

Undisclosed Liabilities

Liabilities, if any, associated with claims, and any losses, settlement, result of litigation,
costs, expenses or damages related thereto, with respect to certain alleged payment obligations of
the Company or any Company Subsidiary in connection with any note or other payment obligation,
including, without limitation, applicable interest, penalties, fines and other charges, having
Banco Santos S.A. as original beneficiary, executed by the Company or any such Company Subsidiary.
Based on limited information available to the Company (which does not include copies of all of the
notes on which such claims may be based) as of the date of this Agreement, the face amount of the
notes is believed by the Company to be approximately R$13.8 million.

In addition, four notices from ANEEL to certain Company Subsidiaries attached to this Schedule
3.3(b) as pages 28-37, received by the Company on April 9, 2007 were delivered to Purchaser on the
date hereof. These edocuments are not currentlyu in the data room, and the parties acknowledge that
the inclusion of these documents in these schedules shall not be deemed to be an exception to the
representations and warranties included in Section 3.3(b) of the Agreement for purposes of the
indemnification provisions under Article VIII.

 

19

 

20

 

21

 

22

 

23

 

24

 

25

 

26

 

27

 

28

 

29

Schedule 3.4(a)

Absence of Certain Changes or Events

	 	1.	 	The Company and one of the minority shareholders of CPEEQ made capital contributions to
that Company Subsidiary on January 30, 2007. The amount of the Company’s contribution was
approximately R$2,608,088.75.
	 
	 	2.	 	On March 22, 2007, CJGE issued a share dividend to its shareholders. The Company’s
percentage portion of the outstanding shares was unchanged after such share dividend.
	 
	 	3.	 	On March 22, 2007, the Shareholders’ Meeting (Assembléia Geral Ordinária e
Extraordinária) amended Article 51 of the Company’s bylaws and thereby increased the
minimum mandatory annual dividend from 25% to 50% of the net income with respect to each
fiscal year.

See Schedule 5.1(l).

 

30

Schedule 3.5

Tax Matters

The amounts indicated in this Schedule are just estimates and may not correspond to the actual
economic values that may be imposed to the companies.

B. AUDITS, ADMINISTRATIVE AND COURT PROCEEDING

LEGEND:

(d) amount under discussion — subject to inflation adjustment 

(a) amount attributed to the case — amount assigned to the lawsuit upon filing for purposes of
paying the Courts fees (“Valor da Causa”) 

	 	 	 	 	 	 	 	 	 
	Proceeding No.	 	Companies Involved	 	Claimed Amount (R$)	 	Purpose of the proceeding**
	053.01.005679-6

	 	CPEE et al.
	 	 	(a)200.00	 	 	Tax unenforceability
	2000.61.00.038421-6

	 	CPEE
	 	 	(a)1,000.00	 	 	Tax Collection
	2004.61.27.000998-5

	 	CPEE
	 	 	(a)1,000.00	 	 	Tax Rate/Calculation Basis
	428/2005

	 	CPEE
	 	 	(d)218,762.17	 	 	Certificate of Outstanding Debts
	473/2005

	 	CPEE
	 	 	(d)2,351,117.26	 	 	Certificate of Outstanding Debts
	91.0707848-0

	 	CPEE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	91.0701143-1

	 	CPEE et al.
	 	 	(d)921.94	 	 	Finsocial
	91.0707849-8

	 	CPEE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	544/91

	 	CPEE et al.
	 	 	(d)1,490.02	 	 	ICMS
	053.01.005679-6

	 	CLFM et al.
	 	 	(a)200.00	 	 	Tax Unenforceability
	1458/2001

	 	CPEEQ
	 	 	(d)10,643.66	 	 	Debt Clearance Certificate
	1781/2003

	 	CPEEQ
	 	 	(d)5,805.10	 	 	Certificate of Outstanding Debts
	2715/2002

	 	CPEEQ
	 	 	(d)20,932.42	 	 	Certificate of Outstanding Debts
	324/2004

	 	CPEEQ
	 	 	(d)11,177.68	 	 	Certificate of Outstanding Debts
	98.0602764-7

	 	CPEEQ
	 	 	(d)4,150.16	 	 	Action for refund of undue payment
	053.01.005679-6

	 	CPEEQ et al.
	 	 	(a)200.00	 	 	Tax Unenforceability
	34/2004

	 	CSPE
	 	 	(d)570.171,45	 	 	Tax Collection (EF — Fee for the
use of public areas)
	053.01.005679-6

	 	CSPE et al.
	 	 	(a)200.00	 	 	Tax Unenforceability
	866/2005

	 	CSPE
	 	 	(a)1,000.00	 	 	Tax Unenforceability
	2002.61.10003167-3

	 	CSPE
	 	 	(a)10,000.00	 	 	Tax Unenforceability
	1999.61.00.007282-2

	 	CSPE
	 	 	(a)5,000.00	 	 	Non-existence of Tax Debt
	91.0707848-0

	 	CSPE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	91.0701143-1

	 	CSPE et al.
	 	 	(d)921.94	 	 	Finsocial
	91.0707849-8

	 	CSPE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	544/91

	 	CSPE et al.
	 	 	(d)1,490.02	 	 	ICMS
	053.01.005679-6

	 	CJE et al.
	 	 	(a)200.00	 	 	Tax Unenforceability
	91.0707848-0

	 	CJE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	91.0701143-1

	 	CJE et al.
	 	 	(d)921.94	 	 	Finsocial
	91.0707849-8

	 	CJE et al.
	 	 	(d)1,567.30	 	 	Finsocial
	544/91

	 	CJE et al.
	 	 	(d)1,490.02	 	 	ICMS
	287/2005

	 	CLFM
	 	 	(d)69,440.65	 	 	Tax Debts
	2001.61.00.020745-1

	 	CPEE et al.
	 	 	(a)250.00	 	 	Non-existence of Tax Debt — ICMS
	467/2005

	 	CPEE
	 	 	(d)19,671.81	 	 	Tax Execution Action
	88.0044371-0

	 	CPEE et al.
	 	 	(d)7,838.90	 	 	Compulsory Loan

 

31

	 	 	 	 	 	 	 	 	 
	Proceeding No.	 	Companies Involved	 	Claimed Amount (R$)	 	Purpose of the proceeding**
	97.0058564-6

	 	CPEE
	 	 	(d)2,453.45	 	 	Tax Offset  — PIS
	1053/93

	 	CPEE et al.
	 	 	(d)1,957.49	 	 	Additional Income Tax
	95.0044274-4

	 	CPEE et al.
	 	 	(d)1,607.60	 	 	ILL / art. 35, Law 7713/88
	95.0044706-1

	 	CPEE et al.
	 	 	(d)1,607.82	 	 	ILL / Offset
	2916/2003

	 	CSPE
	 	 	(d)1,495,117.79	 	 	ICMS tax collection
	343/2001

	 	CSPE
	 	 	(d)89.65	 	 	ICMS tax collection
	2001.61.00.020745-1

	 	CSPE et al.
	 	 	(a)250.00	 	 	Non-existence of Tax Debt — ICMS
	97.0058569-7

	 	CSPE
	 	 	(d)3,700.13	 	 	Tax Offset  — PIS
	1053/93

	 	CSPE et al.
	 	 	(d)1,957.49	 	 	Additional Income Tax
	95.0044274-4

	 	CSPE et al.
	 	 	(d)1,607.60	 	 	ILL / art. 35, Law 7713/88
	95.0044706-1

	 	CSPE et al.
	 	 	(d)1,607.82	 	 	ILL / Offset
	312/2005

	 	CJE
	 	 	0.00	 	 	Tax Execution Action (debt paid

in installments)
	1999.61.00.019314-5

	 	CJE et al.
	 	 	(d)710,545.26	 	 	MS — COFINS
	94.0019308-4

	 	CJE et al.
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0021186-4

	 	CJE et al.
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0022333-1

	 	CJE et al.
	 	 	(d)1,212.78	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	1995.00355060-2

	 	CJE et al.
	 	 	(d)1,640.13	 	 	Court Deposits Deductibility
	053.05.012977-8

	 	CJE et al.
	 	 	(d)746,01	 	 	ICMS
	2000.61.00.049952-4

	 	CJE et al.
	 	 	(d)610,142.12	 	 	Tax Unenforceability — CPMF
	1999.61.00.021434-3

	 	CJE (et al.)
	 	 	(d)367,005.79	 	 	CSLL — 8%
	053.05.012977-8

	 	CLFM et al.
	 	 	(d)88,546.08	 	 	ICMS
	287/2005

	 	CLFM
	 	 	(d)62,424.46	 	 	Tax Debts
	1999.61.00.019314-5

	 	CLFM et al.
	 	 	(d)331,168.46	 	 	Writ of Mandamus — COFINS
	053.05.012977-8

	 	CLFM et al.
	 	 	(d) 88,546.08	 	 	ICMS
	265/2005

	 	CLFM
	 	 	(d)1,657.24	 	 	CREA Annuity — possible
	2000.61.00.049952-4

	 	CLFM et al.
	 	 	(d)383,418.07	 	 	Tax Unenforceability — CPMF
	1999.61.00.021434-3

	 	CLFM (et al.)
	 	 	(d)178,210.52	 	 	CSLL — 8%
	1999.61.00.021434-3

	 	CPEE (et al.)
	 	 	(d)85,349.02	 	 	CSLL — 8%
	94.0019308-4

	 	CPEE et al.
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0021186-4

	 	CPEE (et al.)
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0022333-1

	 	CPEE et al.
	 	 	(d)1,212.78	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	1995.00355060-2

	 	CPEE et al.
	 	 	(d)1,640.13	 	 	Court Deposits Deductibility
	053.05.012977-8

	 	CPEE et al.
	 	 	(d)1,463.96	 	 	ICMS
	2000.61.00.049952-4

	 	CPEE et al.
	 	 	(d)685,322.55	 	 	Tax Unenforceability — CPMF
	1999.61.00.021434-3

	 	CSPE (et al.)
	 	 	(d)367,924.42	 	 	CSLL — 8%
	1999.61.00.019314-5

	 	CSPE et al.
	 	 	(d)825,277.84	 	 	MS — COFINS
	94.0019308-4

	 	CSPE et al.
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0021186-4

	 	CSPE et al.
	 	 	(d)1,273.51	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	94.0022333-1

	 	CSPE et al.
	 	 	(d)1,212.78	 	 	PIS/ DL 2445 and 2448 / ICMS /Financial
Income
	1995.00355060-2

	 	CSPE et al.
	 	 	(d)1,640.13	 	 	Court Deposits Deductibility

 

32

	 	 	 	 	 	 	 	 	 
	Proceeding No.	 	Companies Involved	 	Claimed Amount (R$)	 	Purpose of the proceeding**
	2000.61.00.049952-4

	 	CSPE et al.
	 	 	(d)732,634.04	 	 	Tax Unenforceability — CPMF
	053.05.012977-8

	 	CSPE et al.
	 	 	(d)258,494.16	 	 	ICMS
	313/2005

	 	CSPE
	 	 	(d)8,875.07	 	 	Tax Debts — Probable
	413/2005

	 	CLFM
	 	 	(d)R$945.018,61	 	 	1998/2000 Income Tax
	97.00.58566-2

	 	CLFM
	 	 	(a)R$20,000.00	 	 	PIS — Offset
	2005.61.05.013535-0

	 	—CJE
	 	 	(d)R$20,736.47	 	 	Writ of Mandamus — Annulment of
Credit — Withholding Income Tax
	1999.61.00.021567-0

	 	CLFM
	 	 	(d)R$351.670,10	 	 	ILL — Offset

FILED IN 2007

	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Action	 	Amount (R$)	 	Proceeding No.
	Telecomunicações de
Sâo Paulo CPEE and
CSPE

	 	Tax Administration
Coordinator of the
State Treasury
Office of São Paulo
	 	Petition for Writ
of Mandamus
	 	(a) 10,000.00
	 	053.07.100749-2 (46)

Administrative Proceedings by the Federal Revenue Office and State Attorney’s Office:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Proceeding No.	 	 	Purpose	 	Claimed Amount
(R$)	 	 	Status
	SRF
	 	CPEE	 	 	10.830.000	 	 	IRPJ	 	 	465,897.26	 	 	In progress
	 
	 	 	 	 	264/2004-86	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000	 	 	PIS	 	 	372,522.84	 	 	Reply filed on 2/20/04
	 
	 	 	 	 	263/2004-31	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000	 	 	IRPJ	 	 	427,121.30	 	 	Reply filed on 2/20/04
	 
	 	 	 	 	257/2004-84	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000	 	 	ILL	 	 	25,716.94	 	 	Reply filed on 2/20/04
	 
	 	 	 	 	256/2004-30	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000.	 	 	COFINS	 	 	514,787.39	 	 	Reply filed on 2/20/04
	 
	 	 	 	 	262/2004-97	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000	 	 	COFINS	 	 	1,383,175.09	 	 	In progress
	 
	 	 	 	 	260/2004-06	 	 	 	 	 	 	 	 	 
	SRF
	 	CPEE	 	 	10.830.000	 	 	COFINS	 	 	1,702,620.91	 	 	In progress
	 
	 	 	 	 	261/2004-42	 	 	 	 	 	 	 	 	 
	SRF
	 	CSPE	 	 	108.300.086	 	 	Tax Incentives —	 	 	459,004.42	 	 	In progress
	 
	 	 	 	 	97/2003-07	 	 	Statement revision	 	 	 	 	 	 
	CMSD
	 	SRF 1	 	 	10768020232/00-21	 	 	Recovery of fine on IR and CSLL	 	 	1,881,162.60	 	 	In progress
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	CLFM	 	 	10830.006003/2005-51	 	 	 	 	 	62,627.07	 	 	Tax Collection — IRPJ —
	 
	 	CPEE	 	 	10830.000261/2004-42	 	 	 	 	 	702,620.91	 	 	COFINS

 

33

D. TAX LIENS

	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Case	 	Purpose	 	Claimed
Amount	 	Asset Attached
	National Treasury

	 	CJE
	 	444/04
	 	tax debts
	 	R$223,097.11
	 	25.May.06 — Sítio
Santa Adélia,
records no. 4073
filed with Real
Estate Registry of
Pedreira.
	National Treasury

	 	CJE
	 	312/2005
	 	tax debts
	 	R$347,617.16
	 	25.May.06 — Sítio
Santa Adélia,
records no. 4073
filed with Real
Estate Registry of
Pedreira.
	Federal Government

	 	CPEE
	 	467/2005
	 	tax debts
	 	R$15,357.80
	 	25.May.06 — “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
records no. 17.559
and duly described
and characterized
in public deed
issued at the 2nd
Notary Public of
São Bernardo do
Campo, book no.
849, page 262”
	Federal Government

	 	CPEE
	 	428/2005
	 	1999 COFINS
	 	R$170,787.86
	 	25.May.06 — Asset
assigned to
attachment: “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
records no. 17.559
and duly described
and characterized
in public deed
issued at the 2nd
Notary Public of
São Bernardo do
Campo, book no.
849, page 262”
	Federal 

Government

	 	CPEE
	 	473/20052
	 	1998 1991 and 1992
IRRF (actual
profit) 1994, 1995,
1998 COFINS, 1997
and 1998 PIS
	 	(d)R$2,351,117.26
	 	25.May.06 — Asset
assigned to
attachment: “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
recordation no.
17.559 and duly
described and
characterized in
public deed issued
at the 2nd Notary
Public of São
Bernardo do Campo,
book no. 849, page
262”

 

34

Schedule 3.6

Litigation

The amounts indicated in this Schedule are just estimates and may not correspond to the actual
economic values that may be imposed to the companies.

LEGEND:

(d) amount under discussion — subject to inflation adjustment

(a) amount attributed to the case — amount assigned to the lawsuit upon filing for purposes of paying the Courts fees (“Valor da Causa”) 

CIVIL ACTIONS

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	1

	 	 	1399/1999	 	 	CJE
	 	(d)14,404.19
	 	Non-existence of Tax Debt
	2

	 	 	143/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	3

	 	 	1530/2004	 	 	CJE
	 	(a)18,022.47
	 	Power supply
	4

	 	 	1597/2000	 	 	CJE
	 	(a)200000.00
	 	Power supply
	5

	 	 	1692/2004	 	 	CJE
	 	(d)30,171.47
	 	Non-existence of Tax Debt
	6

	 	 	186/2006	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	7

	 	 	238/2005	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	8

	 	 	249/2004	 	 	CJE
	 	(a)1000.00
	 	Market territory dispute
	9

	 	 	2624/2005	 	 	CJE
	 	(a)3,568.10
	 	Power supply
	10

	 	 	60/2006	 	 	CJE
	 	(d)4,153.93
	 	Non-existence of Tax Debt
	11

	 	 	1546/2006	 	 	CJE
	 	(d)4,112.95
	 	Power supply
	12

	 	 	1047371-5	 	 	CJE
	 	(d)84,290.56
	 	Non-existence of Tax Debt (Ordinance)
	13

	 	 	2537/2006	 	 	CJE
	 	(d)3,710.43
	 	Light Post
	14

	 	 	339/2006	 	 	CJE
	 	(d)803.00
	 	Power supply
	15

	 	 	435.01.2005.03691-9	 	 	CJE
	 	(d)8,138.29
	 	Power supply
	16

	 	 	607/2005	 	 	CJE
	 	(a)100.00
	 	Public Lighting
	17

	 	 	6557333/05	 	 	CJE
	 	(d)8,714.49
	 	Ordinance
	18

	 	 	934/2000	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	19

	 	 	1671/2006	 	 	CJE
	 	(a)20,000.00
	 	Ordinance
	20

	 	 	1540/2001	 	 	CJE
	 	(a)100.00
	 	Power supply
	21

	 	 	780/2005	 	 	CJE
	 	(d)17,733.36
	 	Tax Debt Unenforceability
	22

	 	 	1144/2002	 	 	CJE
	 	(d)9,361.02
	 	Electric Damage
	23

	 	 	1390/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	24

	 	 	1634/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	25

	 	 	808/2006	 	 	CJE
	 	(d)1,065.65
	 	Electric Damage
	26

	 	 	1635/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	27

	 	 	1640/2004	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	28

	 	 	2002.61.05.003995-5	 	 	CJE
	 	(a)1,000.00
	 	Power capacity charges
	29

	 	 	2003.61.05.002796-9	 	 	CJE
	 	(a)5,000.00
	 	Power capacity charges
	30

	 	 	2005.61.00.002606-1	 	 	CJE
	 	(a)10,000.00
	 	Power capacity charges
	31

	 	 	2006/2003	 	 	CJE
	 	(d)17,500.00
	 	Nonphysical Damages

 

35

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	32

	 	 	2007/2003	 	 	CJE
	 	(d)17,500.00
	 	Nonphysical Damages
	33

	 	 	380/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	34

	 	 	693/2003	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	35

	 	 	753/2002	 	 	CJE
	 	(a)8,669.40
	 	Power supply
	36

	 	 	949/2002	 	 	CJE
	 	(a)1,000.00
	 	Power supply
	37

	 	 	932970-0/0	 	 	CJE
	 	Amount to be ascertained by the court
	 	Action for refund of undue payment
	38

	 	 	640/92	 	 	CJE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	39

	 	 	96.03.045616-0	 	 	CJE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	40

	 	 	02064.2005.129.15.00.6 	(837/95)	 	CJE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	41

	 	 	463/95	 	 	CJE
	 	amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	42

	 	 	2062/96	 	 	CJE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	43

	 	 	1267/2001	 	 	CJE
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	44

	 	 	000.01.046772-6	 	 	CJE
	 	Amount to be ascertained by the court
	 	Mandatory Union Dues
	45

	 	 	0432.06.012681-5	 	 	CLFM
	 	(d)702.95
	 	Light Post
	46

	 	 	0432.03.004751-3	 	 	CLFM
	 	(a)20000.00
	 	Repossession
	47

	 	 	0432.04.005612-4	 	 	CLFM
	 	(a)1000.00
	 	Public Lighting
	48

	 	 	0432.05.007894-3	 	 	CLFM
	 	(a)7000.00
	 	Power supply
	49

	 	 	0432.05.008678-9	 	 	CLFM
	 	(d)12030.43
	 	Non-existence of Tax Debt
	50

	 	 	0432.05.008864-5	 	 	CLFM
	 	(d)1477.47
	 	Non-existence of Tax Debt
	51

	 	 	0432.05.008954-4	 	 	CLFM
	 	(d)3632.60
	 	Power supply reconnection
	52

	 	 	0432.06.011406-8	 	 	CLFM
	 	(d)4688.36
	 	Nonphysical and physical damages
	53

	 	 	0432.06.012041-2	 	 	CLFM
	 	(d)2082.11
	 	Nonphysical and physical damages
	54

	 	 	107/2006	 	 	CLFM
	 	(a)100.00
	 	Power supply
	55

	 	 	1238/2001	 	 	CLFM
	 	(d)2,114.15
	 	Light Posts leasing
	56

	 	 	1422/2002	 	 	CLFM
	 	(a)1,000.00
	 	Power supply
	57

	 	 	1681/2000	 	 	CLFM
	 	(d)2,281.68
	 	Electric Damage
	58

	 	 	170/2006	 	 	CLFM
	 	(d)12,164.08
	 	Nonphysical Damages
	59

	 	 	186/2006	 	 	CLFM
	 	(d)10,346.19
	 	Nonphysical Damages
	60

	 	 	271/2006	 	 	CLFM
	 	(d)286.74
	 	Non-existence of Tax Debt
	61

	 	 	275/2006	 	 	CLFM
	 	(d)3,195.93
	 	Power supply
	62

	 	 	338/2005	 	 	CLFM
	 	(a)1,077.50
	 	Power supply
	63

	 	 	850/2005	 	 	CLFM
	 	(d)605.25
	 	Power supply
	64

	 	 	369/2006	 	 	CLFM
	 	(d)4,024.32
	 	Electricity bill dispute
	65

	 	 	468/2004	 	 	CLFM
	 	(a)5,154.60
	 	Power supply
	66

	 	 	470/2005	 	 	CLFM
	 	(d)237.58
	 	Non-existence of Tax Debt
	67

	 	 	521/2005	 	 	CLFM
	 	(d)1,754.12
	 	Power supply
	68

	 	 	636/2004	 	 	CLFM
	 	(d)4,318.38
	 	Non-existence of Tax Debt
	69

	 	 	710/2006	 	 	CLFM
	 	(d)2,974.56
	 	Electricity bill dispute
	70

	 	 	77/2006	 	 	CLFM
	 	(d)17,992.97
	 	Power supply

 

36

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	71

	 	 	783/2005	 	 	CLFM
	 	(a)2,000.00
	 	Power supply
	72

	 	 	794/2001	 	 	CLFM
	 	(a)1,264.30
	 	Electricity bill dispute
	73

	 	 	877/2005	 	 	CLFM
	 	(a)307.50
	 	Power supply reconnection
	74

	 	 	0432.05.009054-2	 	 	CLFM
	 	(d)3,500.00
	 	Physical and non-physical Damages
	75

	 	 	02064.2005.129.15.00.6 	(837/95)	 	CLFM
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	76

	 	 	2062/96	 	 	CLFM
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	77

	 	 	1267/2001	 	 	CLFM
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	78

	 	 	000.01.046772-6	 	 	CLFM
	 	Amount to be ascertained by the court
	 	Mandatory union dues
	79

	 	 	640/92	 	 	CLFM
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	80

	 	 	001/2004	 	 	CPEE
	 	(d)1,210.35
	 	Power rate adjustment
	81

	 	 	1005/2005	 	 	CPEE
	 	(d)354,857.80
	 	Attorney’s fees
	82

	 	 	1060/2002	 	 	CPEE
	 	(a)62.50
	 	Power supply
	83

	 	 	1076/2000	 	 	CPEE
	 	(a)1,000.00
	 	Power supply
	84

	 	 	1005/2004	 	 	CPEE
	 	(d)14,724.19
	 	Services provision
	85

	 	 	1107/2005	 	 	CPEE
	 	(d)872.84
	 	Non-existence of Tax Debt
	86

	 	 	1135/2003	 	 	CPEE
	 	(a)6,363.50
	 	Power rate adjustment
	87

	 	 	1198/2002	 	 	CPEE
	 	(a)100.00
	 	Power supply
	88

	 	 	1199/2004	 	 	CPEE
	 	(a)10,000.00
	 	Power supply
	89

	 	 	1275/2004	 	 	CPEE
	 	(a)10,000.00
	 	Physical and non-physical Damages
	90

	 	 	1385/2004	 	 	CPEE
	 	(d)1,740.95
	 	Physical and non-physical Damages
	91

	 	 	1094/2002	 	 	CPEE
	 	(a)200.00
	 	Power supply
	92

	 	 	1095/2002	 	 	CPEE
	 	(a)200.00
	 	Power supply
	93

	 	 	1371/2002	 	 	CPEE
	 	(a)1,000.00
	 	Power supply
	94

	 	 	228/2006	 	 	CPEE
	 	(a)1,000.00
	 	Power supply
	95

	 	 	23/2001	 	 	CPEE
	 	(d)11,593.75
	 	Nonphysical Damages
	96

	 	 	291/2005	 	 	CPEE
	 	(a)1,000.00
	 	Public Lighting
	97

	 	 	295/2002	 	 	CPEE
	 	(d)824,511.98
	 	Physical and non-physical Damages
	98

	 	 	317/2004	 	 	CPEE
	 	(a)5,000.00
	 	Use of easement
	99

	 	 	324/2006	 	 	CPEE
	 	(a)1,000.00
	 	Nonphysical Damages
	100

	 	 	356/2002	 	 	CPEE
	 	(a)97.50
	 	Power supply
	101

	 	 	431/2004	 	 	CPEE
	 	(d)668.63
	 	Nonphysical Damages
	102

	 	 	488/2006	 	 	CPEE
	 	(d)3,500.00
	 	Power supply reconnection
	103

	 	 	545/2002	 	 	CPEE
	 	(a)1,000.00
	 	Power supply
	104

	 	 	639/2004	 	 	CPEE
	 	(d)1,008.62
	 	Power rate adjustment
	105

	 	 	1010/2006	 	 	CPEE
	 	(d)184.65
	 	Pecuniary damages
	106

	 	 	1104/2006	 	 	CPEE
	 	(d)3,500.00
	 	Nonphysical Damages
	107

	 	 	702/2004	 	 	CPEE
	 	(d)117.50
	 	Power supply
	108

	 	 	863/2006	 	 	CPEE
	 	(d)3,856.63
	 	Non-existence of Tax Debt
	109

	 	 	745/2000	 	 	CPEE
	 	(a)100.00
	 	Power supply
	110

	 	 	832/2000	 	 	CPEE
	 	(a)75,000.00
	 	Power supply
	111

	 	 	994/2003	 	 	CPEE
	 	(a)329.00
	 	Power supply

 

37

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	112

	 	 	1054/2006	 	 	CPEE
	 	(d)222.59
	 	Electricity bills dispute
	113

	 	 	96.03.045616-0	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	114

	 	 	02064.2005.129.15.00.6 	(837/95)	 	CPEE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	115

	 	 	463/95	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	116

	 	 	2062/96	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	117

	 	 	1267/2001	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	118

	 	 	000.01.046772-6	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Mandatory union dues
	119

	 	 	965/2006	 	 	CPEE
	 	(d)294,801.41
	 	Physical damages
	120

	 	 	640/92	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	121

	 	 	1113/2005	 	 	CSPE
	 	(d)10,346.19
	 	Nonphysical Damages
	122

	 	 	1130/2006	 	 	CSPE
	 	(d)22,823.39
	 	Non-existence of Tax Debt
	123

	 	 	1156/2004	 	 	CSPE
	 	(d)350,000.00
	 	Physical and non-physical Damages
	124

	 	 	1188/2004	 	 	CSPE
	 	(a)1,000.00
	 	Nonphysical Damages
	125

	 	 	124/2004	 	 	CSPE
	 	(d)1,382.84
	 	Collision with light post
	126

	 	 	1290/2006	 	 	CSPE
	 	(d)36,050.00
	 	Physical and non-physical Damages
	127

	 	 	1328/2004	 	 	CSPE
	 	(d)4,687.16
	 	Non-existence of Tax Debt
	128

	 	 	1773/2005	 	 	CSPE
	 	(d)3,668.46
	 	Non-existence of Tax Debt
	129

	 	 	198/2004	 	 	CSPE
	 	(a)2,596.76
	 	Power supply
	130

	 	 	2161/2005	 	 	CSPE
	 	(a)15,095.28
	 	Electricity bill dispute
	131

	 	 	2511/2006	 	 	CSPE
	 	(a)613.00
	 	Power supply
	132

	 	 	1719/2006	 	 	CSPE
	 	(d)4,053.02
	 	Light post
	133

	 	 	1718/2006	 	 	CSPE
	 	(d)2,592.13
	 	Light post
	134

	 	 	1672/2006	 	 	CSPE
	 	(d)823.04
	 	Light post
	135

	 	 	1661/2006	 	 	CSPE
	 	(d)393.63
	 	Light post
	136

	 	 	1869/2006	 	 	CSPE
	 	(d)17,052.87
	 	Acknowledgment of Debt
	137

	 	 	1797/2006	 	 	CSPE
	 	(d)322,171.69
	 	Electricity Bills
	138

	 	 	1794/2006	 	 	CSPE
	 	(d)3,409.09
	 	Institution of easement
	139

	 	 	1791/2006	 	 	CSPE
	 	(d)2,145.87
	 	Institution of easement
	140

	 	 	1854/2006	 	 	CSPE
	 	(d)1,678.51
	 	Institution of easement
	141

	 	 	1140/2006	 	 	CSPE
	 	(d)3,169.24
	 	Nonphysical Damages
	142

	 	 	582.01.2006.002124-7	 	 	CSPE
	 	(d)1,482.64
	 	Electric power network
	143

	 	 	2111/2006	 	 	CSPE
	 	(d)5,503.56
	 	Pecuniary damages
	144

	 	 	2108/2006	 	 	CSPE
	 	(d)14,000.00
	 	Nonphysical Damages
	145

	 	 	2754/2003	 	 	CSPE
	 	(d)108.28
	 	New power connection
	146

	 	 	28/2005	 	 	CSPE
	 	(d)1,027.11
	 	Power supply
	147

	 	 	382/2006	 	 	CSPE
	 	(d)1,202.25
	 	Power supply
	148

	 	 	402/2002	 	 	CSPE
	 	(d) 648,000.00
	 	Nonphysical Damages
	149

	 	 	688/2005	 	 	CSPE
	 	(d)1,000.00
	 	Power supply
	150

	 	 	79/2006	 	 	CSPE
	 	(d)1358.65
	 	Electric damage
	151

	 	 	840/2004	 	 	CSPE
	 	(d)81532.56
	 	Non-existence of Tax Debt

 

38

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	152

	 	 	1735/2005	 	 	CSPE
	 	(a)5,000.00
	 	Light post sharing
	153

	 	 	2006.61.10.012430-9	 	 	CSPE
	 	(a)10,000.00
	 	Right of way authorization
	154

	 	 	011.04.022400-8	 	 	CSPE
	 	(a)107,448.00
	 	Revision of share leasing
	155

	 	 	1474/2006	 	 	CSPE
	 	(d)48,546.16
	 	Pecuniary damages
	156

	 	 	000.02.171131-3	 	 	CSPE
	 	Amount to be ascertained by the court
	 	New power connection
	157

	 	 	2006.61.10.010217-0	 	 	CSPE
	 	(a)10,000.00
	 	Petition for writ of mandamus
	158

	 	 	2006.61.10.010218-1	 	 	CSPE
	 	(a)10,000.00
	 	Petition for writ of mandamus
	159

	 	 	96.03.045616-0	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	160

	 	 	02064.2005.129.15.00.6 	(837/95)	 	CSPE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	161

	 	 	463/95	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Suspension of deduction(mandatory union dues)
	162

	 	 	2062/96	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	163

	 	 	1267/2001	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Suspension of deduction(mandatory union dues)
	164

	 	 	000.01.046772-6	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Mandatory union dues
	165

	 	 	640/92	 	 	CSPE
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	166

	 	 	607/94	 	 	CPEEQ
	 	Amount to be ascertained by the court
	 	Suspension of deduction(mandatory union dues)
	167

	 	 	935/2004	 	 	CPEEQ
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	168

	 	 	1698/2004	 	 	CPEEQ
	 	Amount to be ascertained by the court
	 	Mandatory union dues
	169

	 	 	2065/2003	 	 	Lajeado
	 	(d) 3,216,734.11
	 	Pecuniary damages
	170

	 	 	02/2006	 	 	CJE
	 	(d)1,011.99
	 	Indemnity for electric damages
	171

	 	 	1446/1998	 	 	CJE
	 	(a)10,000.00
	 	Power rate adjustment — Ordinance
	172

	 	 	1022/1994	 	 	CJE
	 	(a)2,000.00
	 	Power rate adjustment — Ordinance
	173

	 	 	445/1999	 	 	CJE
	 	(a)1,500.00
	 	Power rate adjustment — Ordinance
	174

	 	 	103/2006	 	 	CJE
	 	(a)5,678.38
	 	Car accident
	175

	 	 	1002/1996	 	 	CJE
	 	(d)421,369.26
	 	Power rate adjustment — Ordinance
	176

	 	 	583.02.2006.108927-2	 	 	CJE
	 	(a)1,000.00
	 	Interruption statute of limitation
	177

	 	 	556/1995	 	 	CJE
	 	(a)5,000.00
	 	Power rate adjustment — Ordinance
	178

	 	 	93.0028730-3	 	 	CJE
	 	(d)4,957.38
	 	Power rate adjustment — Ordinance
	179

	 	 	93.0031970-1	 	 	CJE
	 	(d)6,091.79
	 	Power rate adjustment — Ordinance
	180

	 	 	790/2006	 	 	CJE
	 	(d)150.65
	 	Power supply by lack of payment
	181

	 	 	95.060.7456-9	 	 	CJE
	 	(a)1,500.00
	 	Power rate adjustment — Ordinance
	182

	 	 	583.53.2006.105197-7	 	 	CJE
	 	(a)1,000.00
	 	Interruption of prescriptive period

 

39

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	183

	 	 	2300/2004	 	 	CJE
	 	(d)391,022.06
	 	Refund of amounts paid
	184

	 	 	97.468350-9 (504/97)		 	CJE
	 	(d)4,101.85
	 	Refund of amounts paid
	185

	 	 	424/2006	 	 	CJE
	 	(a)10,000.00
	 	Unlawfulness of ordinances 038/86 and 045/86
	186

	 	 	1308/1995	 	 	CJE
	 	(d)51,152.29
	 	Refund of amounts paid
	187

	 	 	95.0600396-3	 	 	CJE
	 	(a)1,500.00
	 	Review of amounts paid
	188

	 	 	2133/1996	 	 	CLFM
	 	(d)288.86
	 	Electricity bill dispute / Refund
	189

	 	 	93.0025506-1	 	 	CLFM
	 	(a)1,000.00
	 	Electricity bill dispute / Refund
	190

	 	 	954/2006	 	 	CLFM
	 	(d)2,736.31
	 	Power supply
	191

	 	 	69/2000	 	 	CLFM
	 	(a)20,000.00
	 	Electricity bill dispute / Refund
	192

	 	 	359/2005	 	 	CLFM
	 	(a)1,415.96
	 	Disconnection for irregularity
	193

	 	 	905/2006	 	 	CLFM
	 	(a)2,000.00
	 	Ordinance
	194

	 	 	926/1995	 	 	CLFM
	 	(a)1,000.00
	 	Electricity bill dispute / Refund
	195

	 	 	0432.06.0122004	 	 	CLFM
	 	(a)350.00
	 	Disconnection for lack of payment
	196

	 	 	1300/98	 	 	CLFM
	 	(d)951,275.80
	 	Judgment execution
	197

	 	 	1591/05	 	 	CPEE
	 	(a) 957.24
	 	Physical and non-physical Damages
	198

	 	 	1484/2005	 	 	CPEE
	 	Amount to be ascertained by the court
	 	Power supply by lack of payment
	199

	 	 	947/2001	 	 	CSPE
	 	(d)609.55
	 	Electricity bill dispute
	200

	 	 	92.0098536-3	 	 	CSPE
	 	(a)1,000,000.00
	 	Tax Unenforceability
	201

	 	 	2006.61.10.007586-4	 	 	CSPE
	 	(a)9,569.85
	 	Power supply by irregularity
	202

	 	 	000.03.090683-0	 	 	CSPE
	 	(a)62,636.00
	 	Power rate adjustment
	203

	 	 	1473/2006	 	 	CSPE
	 	(a)1,000.00
	 	Power supply by lack of payment
	204

	 	 	121/2006	 	 	CSPE
	 	(d)26,646.44
	 	Power supply by lack of payment
	205

	 	 	834/1999	 	 	CSPE
	 	(d)265.91
	 	Power rate adjustment
	206

	 	 	439/2005	 	 	CSPE
	 	(d)1,027.11
	 	Cancellation of work
	207

	 	 	2442/2002	 	 	CSPE
	 	(d)906.25
	 	Collection of instrument of credit
	208

	 	 	1876/2005	 	 	CSPE
	 	(a)1,000.00
	 	Cancellation of work
	209

	 	 	2003.001.087482-8	 	 	CMS Empreend.
	 	(d) 138,904.12
	 	Collection of leasing paid in advance
	210

	 	 	2999/2002	 	 	Paulista Lajeado
	 	(d)1.808.530,52 (7%)
	 	General and pecuniary damages
	211

	 	 	3484/2004 (3076/02)		 	Paulista Lajeado
	 	(d)329.554,28 (7%)
	 	General and pecuniary damages
	212

	 	 	7197/2003	 	 	Paulista Lajeado
	 	(d)412.551,52 (7%)
	 	General and pecuniary damages
	213

	 	 	5577/2002	 	 	Paulista Lajeado
	 	(d)937.548,87 (7%)
	 	General and pecuniary damages
	214

	 	 	2080/2001	 	 	CJE
	 	(d)1,029.51
	 	Non-existence of Tax Debt (Ordinance)
	215

	 	 	1023/2002	 	 	CJE
	 	(d)853.18
	 	Physical and non-physical Damages
	216

	 	 	2081/2001	 	 	CJE
	 	(a)1,300.00
	 	Non-existence of Tax Debt (Ordinance)
	217

	 	 	94.0602991-0	 	 	CJE
	 	(a)1,300.00
	 	Ordinance
	218

	 	 	105/2002	 	 	CJE
	 	(d)97,923.84
	 	Ordinance
	219

	 	 	534/2002	 	 	CJE
	 	(d)45,092.09
	 	Power rate adjustments
	220

	 	 	1559/1995	 	 	CJE
	 	(d)288,599.55
	 	Ordinance
	221

	 	 	583.00.2006.200199-1	 	 	CJE
	 	(a)100,000.00
	 	Ordinance
	222

	 	 	1045/2005	 	 	CJE
	 	(d)997.75
	 	Electric Damage

 

40

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	223

	 	 	1636/2006	 	 	CJE
	 	(d)4,453.55
	 	Electric Damage — possible as to Nonphysical Damages — 2.800,00
	224

	 	 	1730/2006	 	 	CJE
	 	(d)3,238.69
	 	Ordinance
	225

	 	 	2026/2003	 	 	CJE
	 	(a)5,000.00
	 	Denial of new connection
	226

	 	 	314/2000	 	 	CJE
	 	(d)2,834.50
	 	Electric Damage
	227

	 	 	0432.05.008484-2	 	 	CLFM
	 	(d)1,560.92
	 	Nonphysical Damages for Power supply
	228

	 	 	0432.05.007961-0	 	 	CLFM
	 	(d)3,644.80
	 	Nonphysical Damages for Power supply
	229

	 	 	0432.06.012549-4	 	 	CLFM
	 	(d)2,385.00
	 	Physical and nonphysical damages
	230

	 	 	158/2006	 	 	CLFM
	 	(a)4,937.75
	 	Ordinance
	231

	 	 	1327/2004	 	 	CLFM
	 	(a)1,000.00
	 	Power supply — (connection of new supply points)
	232

	 	 	971/2005	 	 	CLFM
	 	(a)1,788.97
	 	Physical damages
	233

	 	 	156/99	 	 	CLFM
	 	(d)353,792.73
	 	Physical and nonphysical damages
	234

	 	 	451/2005	 	 	CLFM
	 	(d)736.07
	 	Electric Damages
	235

	 	 	488/2005	 	 	CLFM
	 	(d)2,782.48
	 	Electric Damages
	236

	 	 	77/2005	 	 	CLFM
	 	(d)2,122.10
	 	Power supply. — (supply point connection — carnival)
	237

	 	 	1272/2003	 	 	CPEE
	 	(d)1,740.95
	 	Nonphysical Damages for Power supply
	238

	 	 	1379/2003	 	 	CPEE
	 	(d)6,464.65
	 	Property damages for Power supply
	239

	 	 	1219/2004	 	 	CPEE
	 	(d)2,606.50
	 	Physical damages
	240

	 	 	1173/2005	 	 	CPEE
	 	(d)605.43
	 	Physical damages
	241

	 	 	427/2002 428/2002	 	 	CPEE
	 	(d)8,940.93
	 	Power rate reclassification
	242

	 	 	933/2005	 	 	CPEE
	 	(d)513.09
	 	Provisional remedy
	243

	 	 	730/1997	 	 	CPEE
	 	(d)23,673.47
	 	Physical and non-physical Damages
	244

	 	 	1422/06	 	 	CSPE
	 	(d)4,000.00
	 	Nonphysical Damages
	245

	 	 	1315/2005	 	 	CSPE
	 	(a)1,000.00
	 	Power supply for lack of payment
	246

	 	 	1143/1996	 	 	CSPE
	 	(d)79,683.33
	 	Ordinance
	247

	 	 	2370/2002	 	 	CSPE
	 	(d)5,665.68
	 	Nonphysical Damages
	248

	 	 	1316/2006	 	 	CSPE
	 	(d)3,664.80
	 	Nonphysical Damages
	249

	 	 	3509/2004	 	 	CSPE
	 	(d)13,964.04
	 	Nonphysical damages — construction of branch line
	250

	 	 	79/1998	 	 	CSPE
	 	(d)28,717.78
	 	Debenture redemption
	251

	 	 	97/2004	 	 	CSPE
	 	(d)6,367.09
	 	Nonphysical damages — destruction of tomato greenhouse
	252

	 	 	323/2002	 	 	CPEEQ
	 	(d)5,772.17
	 	Physical and non-physical Damages — Car accident
	253

	 	 	197/2007
(Edson Costa Lima)	 	 	CPEE
	 	(d) 923,00
	 	Suit for payment in cash
	254

	 	 	1433/2000	 	 	CJE
	 	(a)1.000,00
	 	Suspension in the interruption of electric power
	255

	 	 	151/1997	 	 	CJE
	 	(d)8,581.54
	 	Proof of Claim (“Habilitação de Crédito”)
	256

	 	 	1620/1997	 	 	CJE
	 	(d)1,411.86
	 	Proof of Claim (“Habilitação de Crédito”)

 

41

	 	 	 	 	 	 	 	 	 	 	 
	 	 	Docket number	 	Company	 	Claimed Amount (R$)	 	Purpose of the proceeding
	257

	 	 	2055/2000	 	 	CJE
	 	(d)1,875,00
	 	Bankruptcy
	258

	 	 	1532/2005	 	 	CPEE
	 	(d)9,876.03
	 	Collection of bills related to the supply of electric power
	259

	 	 	195/2006 (129.01.2006.000666-7)		 	CPEE
	 	(d)139.00
	 	Indemnification for electric damages
	260

	 	 	677/2006	 	 	CPEE
	 	(d)1,044.34
	 	Indemnification due to accident
	261

	 	 	1677/95	 	 	CLFM
	 	(a)500.00
	 	Dispute for territory for labor union activity
	262

	 	 	360.01.2006.002236-7 (434/2006)		 	CLFM
	 	(d)140,169.85
	 	Non-existence of tax debt
	263

	 	 	1036/2004	 	 	CSPE
	 	(d)35,431.25
	 	Non-existence of tax debt
	264

	 	 	1119/2005	 	 	CSPE
	 	(d)169,444.41
	 	Non-existence of tax debt
	265

	 	 	1699/2001	 	 	CSPE
	 	(d)998.74
	 	Deposit in court (“consignação em pagamento”)
	266

	 	 	1939/2001	 	 	CSPE
	 	(a)5,000.00
	 	Adverse possession
	267

	 	 	214/2006	 	 	CSPE
	 	(d)23,897.28
	 	Non-existence of tax debt
	268

	 	 	340/2003	 	 	CSPE
	 	(d)12.220,54
	 	Collection of bills related to the supply of electric power
	269

	 	 	643/2005	 	 	CSPE
	 	(d)29,113.00
	 	Abstention of interruption
	270

	 	 	822/2002	 	 	CSPE
	 	(d)21,016.70
	 	Deposit in court (“consignação em pagamento”)
	271

	 	 	003/2005	 	 	CPEEQ
	 	(d)2,613.86
	 	Physical indemnification

CLAIMS FILED BY SUBSIDIARIES

	 	 	 	 	 	 	 	 	 
	Company	 	Docket Number	 	Claimed amount	 	Plaintiff	 	Defendant
	CJE

	 	101/1994
	 	(d)6,737.13
	 	CJE
	 	Barbin
	 

	 	1170/2004
	 	(d)25,296.60
	 	CJE
	 	Ceramica Arte Oriental
	 

	 	119/2004
	 	(d)3,491.87
	 	CJE
	 	Lucimara mazarini
	 

	 	135/2002
	 	(d)170,531.93
	 	CJE
	 	Europet Ind. E Com.
	 

	 	1400/2004
	 	(d)85,997.23
	 	CJE
	 	Porcelana Rocha
	 

	 	1617/2006
	 	(d)50,848.40
	 	CJE
	 	Ceramica Neri
	 

	 	1808/2006
	 	(d)4,156.04
	 	CJE
	 	Projeto Construções Elétricas e telefonia
	 

	 	2326/2006
	 	(d)76,515.57
	 	CJE
	 	Ceramica Bodini
	 

	 	2342/2006
	 	(d)21,290.74
	 	CJE
	 	Paulo Sérgio Amorim
	 

	 	2535/2006
	 	(d)477.26
	 	CJE
	 	Engratec
	 

	 	435.01.2006.003606-8 (1531/2006)
	 	(d)4,411.45
	 	CJE
	 	José Giovani Bianchi
	 

	 	435.01.2006.003607-0 (1532/2006)
	 	(d)2,665.50
	 	CJE
	 	Jeferson Roberto Rangel

 

42

	 	 	 	 	 	 	 	 	 
	Company	 	Docket Number	 	Claimed amount	 	Plaintiff	 	Defendant
	 

	 	435.01.2006.003608-3 (1533/2006)
	 	(d)2,055.84
	 	CJE
	 	Fábio Domingues Justino
	 

	 	435.01.2006.003609-6 (1534/2006)
	 	(d)379.16
	 	CJE
	 	Rafael Felipe Policarpo
	 

	 	435.01.2006.003610-5 (1535/2006)
	 	(d)1,568.37
	 	CJE
	 	Demolicar Promoções e eventos
	 

	 	435.01.2006.000070 (49/2006)
	 	(d)22,017.03
	 	CJE
	 	Porcelana Santa Rosa
	 

	 	773/1997
	 	(d)481,560.71
	 	CJE
	 	Ceramica Santa Isabel
	 

	 	775/1997
	 	(d)1,092,304.45
	 	CJE
	 	Porcelana Sagrado Coração de Jesus
	 

	 	435.01.2006.001862-7 (832/2006) concordata
	 	(d)779,619.61
	 	CJE interested party
	 	Industria Nacional de Plásticos Pedreira
	 

	 	000.05.065208-7/00016
	 	(d)1,120,322.75
	 	CJE
	 	Bankruptcy Banco Santos
	 

	 	05.119.283-1
	 	(d) 2,260,814.13
	 	CJE
	 	Bankruptcy Procid Invest
	 

	 	05.119.283-1
	 	(d) 413,387.70
	 	CJE
	 	Bankruptcy Procid Invest
	CPEE
	 	 	 	 	 	 	 	 
	 

	 	340/2003
	 	(d)12,220.54
	 	MP/SP
Company is
interested in the
proceeding as a
creditor.
	 	Renovias Integradas do Oeste X CSPE
	 

	 	1601/2006
	 	(d)36,866.07
	 	CPEE
	 	Lisan Indústria e Comércio Bebidas
	 

	 	1163/2006
	 	(d)121,545.96
	 	CPEE
	 	Associação Espírita Beneficente Paulo de Tarso
	 

	 	507/2006
	 	(d)13,632.84
	 	CPEE
	 	J O Junqueira AGPEC
	 

	 	528/2003
	 	(d)19,013.47
	 	Supermercado Polar
	 	CPE
	 

	 	588.01.2006.001770-4
	 	(d)17,422.14
	 	CPEE
	 	José Lúcio de Siqueira
	 

	 	507/2006
	 	(d)1,031,047.32
	 	CPEE
	 	Prefeitura Municipal de Tapiratiba
	 

	 	174/2002
	 	(d)740,882.09
	 	CPEE
	 	Prefeitura do Município de Casa Branca
	 

	 	1584/2006
	 	(d)21,571.26
	 	CPEE
	 	Novacon Engenharia de Concessões
	 

	 	823/2001
	 	(d)27,752.40
	 	CPEE
	 	Prefeitura Municipal de Divnolândia
	 

	 	937/2001
	 	(d)166,725.87
	 	CPEE
	 	Prefeitura Municipal de Tapiratiba
	 

	 	1243/01
	 	(d)544,481.39
	 	CPEE
	 	Prefeitura do Município de Casa Branca
	 

	 	068/2002
	 	(d)130,211.00
	 	CPEE
	 	Prefeitura Municipal de Divnolândia
	 

	 	000.05.065208-7/00016
	 	(d)2,570,783.90
	 	CPEE
	 	Bankruptcy Banco Santos
	 

	 	676/2001
	 	(d)3,071.18
	 	CPEE
	 	Evandro Carlos da Costa
	 

	 	05.119.283-1
	 	(d)1,352,322.56
	 	CPEE
	 	Bankruptcy Procid Invest
	 

	 	972/2000
	 	(d)7,176.00
	 	CPEE
	 	Indústria e Cerâmica São Luiz
	CSPE
	 	 	 	 	 	 	 	 
	 

	 	000.01.021823-8
	 	(d)110,454.37
	 	CSPE
	 	Mário Roberto Cavallazzi
	 

	 	008/2002
	 	(d)959.30
	 	CSPE
	 	Narcisa Machado de Oliveira
	 

	 	123.01.2006.006.256-0 (1065/2006)
	 	(d)954.29
	 	CSPE
	 	Francisco Jucelâneo Andrade Silva
	 

	 	123/2004
	 	(d)662.26
	 	CSPE
	 	Lucindo Aparecido de Oliveira
	 

	 	14/2002
	 	(d)189.79
	 	CSPE
	 	Luciano Francisco Rolim de Paulo
	 

	 	196/2004
	 	(d)5,819.05
	 	CSPE
	 	Rodrigo Queiroz Santos
	 

	 	1162/2006
	 	(d)52,473.85
	 	CSPE
	 	Antonio Marcos Paes
	 

	 	298/2001
	 	(d)3,384.04
	 	CSPE
	 	Adão do Bom Jesus Batista
	 

	 	474/2002
	 	(d)71,021.26
	 	CSPE
	 	Maior Ind. E com. De Leite Ltda
	 

	 	269.01.2006.011653-4
	 	(d)50,558.81
	 	CSPE
	 	Antonios Paes
	 

	 	000.05.065208-7/00016
	 	(d)912,073.43
	 	CSPE
	 	Bankruptcy Banco Santos
	 

	 	05.119.283-1
	 	(d)3,148,476.09
	 	CSPE
	 	Bankruptcy Procid Invest
	CLFM
	 	 	 	 	 	 	 	 
	 

	 	0432.06.012681-5
	 	(d)702,95
	 	CLFM
	 	Baldonato Aparecido Felix da Silva
	 

	 	1047/2001
	 	(d)977.47
	 	CLFM
	 	Severino e Oliveira Ltda.
	 

	 	1270/2001
	 	(d)200,462.20
	 	CLFM
	 	Prefeitura do Município de Mococa
	 

	 	1304/2006 (360.01.2006.005.995-4)
	 	(d)5,370.14
	 	CLFM
	 	RV Administração, Promoções e Eventos
	 

	 	1641/2000
	 	(d)157,275.72
	 	CLFM
	 	Prefeitura do Município de Mococa
	 

	 	1642/2000
	 	(d)981,284.01
	 	CLFM
	 	Prefeitura do Município de Mococa

 

43

	 	 	 	 	 	 	 	 	 
	Company	 	Docket Number	 	Claimed amount	 	Plaintiff	 	Defendant
	 

	 	2018/1996
	 	(d)151,244.14
	 	CLFM
	 	Frigorífico Frigon
	 

	 	21/2006
	 	(d)8,227.57
	 	CLFM
	 	Nilson Antonio Pádua
	 

	 	574/2001
	 	(d)6,001.09
	 	CLFM
	 	Antonio Marcos Fagundes
	 

	 	05.119.283-1
	 	(d)320,455.58
	 	CLFM
	 	Bankruptcy Procid Invest
	CPEEQ
	 	 	 	 	 	 	 	 
	 

	 	2659/2005
	 	(d)9.577,23
	 	CPEEQ
	 	Rile Comercial Ltda
	 

	 	1901/2005
	 	(d)39.754,83
	 	CPEEQ
	 	Mario Rodriguez
	 

	 	1817/2005
	 	(d)19.699,94
	 	CPEEQ
	 	Amauri Marchi
	 

	 	609.01.2006.000220-4
	 	(d)16.234,42
	 	CPEEQ
	 	J. Kobara Telecomunicações
	 

	 	003/2005
	 	(d)2.613,86
	 	Luis Fernando Missura
	 	CPEEQ
	 

	 	1237/2005
	 	(d)2.823,51
	 	CPEEQ
	 	Prefeitura Municipal de Tapiratiba
	 

	 	1238/2005
	 	(d)2.823,51
	 	CPEEQ
	 	José Carneiro
	 

	 	1239/2005
	 	(d)988,68
	 	CPEEQ
	 	Laerti Oliveira
	 

	 	1426/2005
	 	(d)1.294,53
	 	CPEEQ
	 	Marcos Silva
	 

	 	1510/2004
	 	(d)7.330,36
	 	CPEEQ
	 	Eduardo Lima
	 

	 	1873/2005
	 	(d)735,44
	 	CPEEQ
	 	Antonio de Camargo
	 

	 	1874/2005
	 	(d)3.597,45
	 	CPEEQ
	 	Eduardo Lima
	 

	 	1900/2005
	 	(d)2.932,34
	 	CPEEQ
	 	Leite S. Leal S/C Ltda.
	 

	 	261/2004
	 	(d)7.077,09
	 	CPEEQ
	 	Reinaldo Porta e Outro
	 

	 	866/2005
	 	(d)5.719,24
	 	CPEEQ
	 	Lairton Hensil
	 

	 	1120/2006
	 	(d)47.312,37
	 	CPEEQ
	 	Prefeitura de São Sebastião da Grama

FILED IN 2007

	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Action	 	Docket No.	 	Claimed Amount (R$)
	Gabriel Antunes Correa

	 	CSPE
	 	Action for performance specific
	 	269.01.2007.000755-0 67/2007
	 	 	87.63	 
	Alessandra Anastácia J. Baltussen

	 	CSPE
	 	Petition for writ of mandamus
	 	269.01.2007.001115-4
	 	 	1,000.00	 
	Osvaldo Vicente Palhares

	 	CSPE
	 	Summary Proceeding  — in general
	 	53/2007
	 	 	3,964.26	 
	Clementino Leonel de Medeiros Junior

	 	CSPE
	 	Compensation for damages
	 	127/2007
	 	 	819.86	 
	Vicente Elias dos Santos

	 	CSPE
	 	Declaratory Action
	 	153/2007
	 	 	13,064.25	 
	André Boitchenco Catarino

	 	CSPE
	 	Physical Damages and lost profits
	 	199/2007
	 	 	14,243.49	 
	Eneide Silva B. Catarino

	 	CSPE
	 	Physical Damages and lost profits
	 	196/2007
	 	 	14,268.96	 
	Maria Silvia de Mello Leonel

	 	CSPE
	 	Action for payment in cash
	 	203/2007
	 	 	413.83	 
	João Antonio Machado

	 	CSPE
	 	Action for payment in cash
	 	2111/2006
	 	 	5,804.90	 
	CSPE

	 	Carlos Real Amadeu
	 	Action for establishment of administrative easement
	 	1794/2006
	 	 	3,409.09	 
	CSPE

	 	Laércio Viana de Moraes
	 	Collection action
	 	269.01.2007.001631-3
	 	 	1,371.04	 
	Osario Franco de Queiroz

	 	CSPE
	 	Action for payment in cash
	 	236/2007
	 	 	14,000.00	 
	CSPE

	 	ALL — América Latina Logística do Brasil S/A
	 	Petition for writ of mandamus
	 	2006.61.10.012430-9
	 	 	10,000.00	 

 

44

	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Action	 	Docket No.	 	Claimed Amount (R$)
	Carlos Alberto Siqueira de Camargo

	 	CSPE
	 	Declaratory action
	 	343/2007
	 	 	533.00	 
	CSPE

	 	Serraria Itapinus Ltda EPP
	 	Collection action
	 	31/2007
	 	 	17,041.75	 
	Clélia Maria da Silva Fabiano

	 	CLFM
	 	Motion for interlocutory injunctive relief
	 	90/2007
	 	 	746.40	 
	Santos Credit Master Fundo de Inv. Financeiro

	 	CLFM
	 	Action for enforcement of debt instrument
	 	1781/2006
	 	 	2,137,823.77	 
	Leandro Lopes de França

	 	CJE
	 	Suit for Physical and non-physical Damages
	 	41/2007
	 	 	14,649.40	 
	Natanael Ferreira de Farias Lauton

	 	CJE
	 	Suit for damages
	 	147/2007
	 	 	709.56	 
	Delphi Automotive Systems do Brasil Ltda

	 	CJE
	 	Declaratory action
	 	262/2007
	 	 	50,000.00	 
	CJE

	 	Luiz Felipe Bemvenho Siqueira
	 	Collection action
	 	267/2007
	 	 	9,485.28	 
	CJE

	 	Parogi Mat. p/ Construção
	 	Collection action
	 	2536/2006
	 	 	4,526.73	 
	CJE

	 	Luciane Cristina Boldrin
	 	Collection action
	 	268/2007
	 	 	534.79	 

 

45

SIGNIFICANT EXTRAJUDICIAL CLAIMS

	 	 	 	 	 	 	 
	Claimant	 	Opposing Party	 	Document	 	Subject Matter
	CSPE

	 	Estate of Banco Santos
	 	Notice**
	 	R$8,477,083.98**
	 
	 	 	 	 	 	 
	EDP Lajeado Energias do 

Brasil

	 	CMS Electric & Gas LLC
	 	Letters dated March 19,
2007; 
April
2nd, 2007
	 	Right of first
refusal to the
shares held by
Paulista Lajeado
Energia S.A. in
Investco S.A.***
	 
	 	 	 	 	 	 
	Rede Lajeado Energia S.A.

	 	CMS Electric & Gas LLC
	 	Letter dated April 10, 2007
	 	Same

 

			
	**	 	This notice refers to a collection of part of the amount related to a potential contingent
liability with respect to Banco Santos group, involving an original value of approximately R$13.8
million, originated from financial transactions in the fiscal year of 2004, engaged with Banco
Santos by the subsidiaries Mococa Energia, Paulista Energia, Sul Paulista Energia and Jaguari
Energia.
	 
	***	 	See Schedule 3.1(c)(ii).

TAX ACTIONS: See Schedule 3.5 under the heading “Tax Matters”.

LABOR CLAIMS

	 	 	 	 	 	 	 	 	 
	 	 	Claim number	 	Companies involved	 	Claimed Amount (R$)	 	Purpose of the action
	1

	 	98.0003048-4
	 	CPEE et al.
	 	(a)410.43
	 	Non-existence of Tax Debt — Funrural
	2

	 	505/2006
	 	CPEE et al.
	 	(a)2,000.00
	 	Labor claim
	3

	 	11898/2005
	 	CPEE
	 	(d)37,136.75
	 	Labor claim
	4

	 	1627/2003
	 	CPEE et al.
	 	(d)18,437.62
	 	Labor claim
	5

	 	1481/2005
	 	CPEE
	 	(d)14,000.00
	 	Labor claim
	6

	 	1979/2001
	 	CPEE et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Labor claim
	7

	 	873/91 (atual 1625/2006)
	 	CPEE et al.
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	8

	 	629/91
	 	CPEE et al.
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	9

	 	000.00.544111-0 (977/2006)
	 	CPEE et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Mandatory union dues
	10

	 	98.0003048-4
	 	CLFM et al.
	 	(a)410.43
	 	Non-existence of Tax Debt — Funrural
	11

	 	505/2006
	 	CLFM et al.
	 	(a)2,000.00
	 	Labor claim
	12

	 	823/2006
	 	CLFM
	 	(d)8,000.00
	 	Labor claim
	13

	 	1531/2002
	 	CLFM et al.
	 	(d)34,424.92
	 	Labor claim
	14

	 	2130/2002
	 	CLFM
	 	(d)100,321.93
	 	Labor claim
	15

	 	11996/2005
	 	CLFM
	 	(d)42,000.00
	 	Labor claim
	16

	 	1979/2001
	 	CLFM et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Labor claim
	17

	 	000.00.544111-0 (977/2006)
	 	CLFM et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Mandatory union dues
	18

	 	98.0003048-4
	 	CSPE et al.
	 	(a)410.43
	 	Non-existence of Tax Debt — Funrural
	19

	 	505/2006
	 	CSPE et al.
	 	(a)2,000.00
	 	Labor claim
	20

	 	1020/2006
	 	CSPE
	 	(d)26,000.00
	 	Labor claim
	21

	 	1538/1999
	 	CSPE
	 	(d)33,225.02
	 	Labor claim
	22

	 	549/2003
	 	CSPE
	 	(d)186,515.81
	 	Labor claim

 

46

	 	 	 	 	 	 	 	 	 
	 	 	Claim number	 	Companies involved	 	Claimed Amount (R$)	 	Purpose of the action
	23

	 	1646/2003
	 	CSPE
	 	(d)16,455.11
	 	Labor claim
	24

	 	852/2004
	 	CSPE
	 	(d)56,486.22
	 	Labor claim
	25

	 	488/2005
	 	CSPE
	 	(d)6,791.12
	 	Labor claim
	26

	 	1979/2001
	 	CSPE et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Labor claim
	27

	 	873/91 (atual 1625/2006)
	 	CSPE et al.
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	28

	 	629/91
	 	CSPE et al.
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	29

	 	000.00.544111-0 (977/2006)
	 	CSPE et al.
	 	Amount to be ascertained by the court
	 	Mandatory union dues
	30

	 	505/2006
	 	LAJEADO et al.
	 	(a)2,000.00
	 	Labor claim
	31

	 	709/2003
	 	CPEEQ
	 	(d)16,687.10
	 	Labor claim
	32

	 	406/2004
	 	CPEEQ
	 	Amount to be ascertained by the court
	 	Labor claim
	33

	 	1140/2005
	 	CPEEQ
	 	(d)18,491.69
	 	Labor claim
	34

	 	2064/2005
	 	CPEEQ
	 	Amount to be ascertained by the court
	 	Labor claim
	35

	 	1627/2003
	 	CPEEQ et al.
	 	(d)18,437.62
	 	Labor claim
	36

	 	98.0003048-4
	 	CJE et al.
	 	(d)410.43
	 	Non-existence of Tax Debt — Funrural
	37

	 	505/2006
	 	CJE et al.
	 	(a)2,000.00
	 	Labor claim
	38

	 	1531/2002
	 	CJE et al.
	 	(d)34,424.92
	 	Labor claim
	39

	 	1979/2001
	 	CJE et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Labor claim
	40

	 	988/2006
	 	CJE
	 	(d)420,000.00
	 	Labor claim
	41

	 	873/91 (currently 1625/2006)
	 	CJE et al.
	 	Amount to be ascertained by the court
	 	Non-existence of Legal Relationship
	42

	 	629/91
	 	CJE et al.
	 	Amount to be ascertained by the court
	 	Suspension of deduction (mandatory union dues)
	43

	 	000.00.544111-0 (977/2006)
	 	CJE et al.
	 	There is no pecuniary amount involved in this lawsuit
	 	Mandatory union dues
	44

	 	34/2003
	 	CPEE
	 	(d)36,176.38
	 	Labor claim
	45

	 	878/2002
	 	CLFM E et al.
	 	(d)56,181.74
	 	Labor claim with request for preliminary injunction
	46

	 	1178/2000
	 	CSPE
	 	(d)452,153.87
	 	Labor claim
	47

	 	878/2002
	 	CJE et al.
	 	(d)56,181.74
	 	Labor claim with request for preliminary injunction
	48

	 	34/2003
	 	CPEEQ et al.
	 	(d)36,176.38
	 	Labor claim
	49

	 	990/2005
	 	CPEEQ et al.
	 	(d)582,000.00
	 	Compensation for damages
	50

	 	1887/2001
	 	CPEE
	 	(d)140,000.00
	 	Labor Claim
	51

	 	1738/2003
	 	CPEE
	 	(d)49,421.85
	 	Labor Claim
	52

	 	0006/1995
	 	CPEE
	 	(d)11,938.78
	 	Labor Claim
	53

	 	1300/2003
	 	CPEE
	 	(d)34,001.15
	 	Labor Claim
	54

	 	913/2006 (antigo1481/2003)
	 	CPEE
	 	(d)417,950.38
	 	Labor Claim
	55

	 	0005/1995
	 	CPEE
	 	(d)1,448,529.02
	 	Compensation — Hazard Working Conditions

 

47

	 	 	 	 	 	 	 	 	 
	 	 	Claim number	 	Companies involved	 	Claimed Amount (R$)	 	Purpose of the action
	56

	 	97.0057321-4
	 	CPEE
	 	(a)1,387.54
	 	Education allowance
	57

	 	1052/2003
	 	CLFM
	 	(d)1,755.74
	 	Labor Claim
	58

	 	97.0057321-4
	 	CLFM
	 	(a)1,387.54
	 	Education allowance
	59

	 	1014/2004
	 	CSPE
	 	(d)3,200.00
	 	Labor Claim

CLAIMS FILED AGAINST SUBSIDIARIES

	 	 	 	 	 	 	 
	Claim number	 	Companies Involved	 	Claimed Amount (R$)	 	Purpose of the Action
	18/19953

	 	CLFM
	 	(d)300,994.07
	 	Hazardous Working Conditions
	1312/19994

	 	CLFM
	 	(d)1,807,83
	 	Labor Claim
	10934/20055

	 	CLFM
	 	There is no
pecuniary amount
involved in this
lawsuit
	 	Labor Claim
	17/19956

	 	CSPE
	 	(d)6,746.64
	 	Hazardous Working Conditions
	1209/20007

	 	CSPE
	 	(d)23,00
	 	Labor Claim
	708/20008

	 	CSPE
	 	(d)481.68
	 	Labor Claim
	999/20059

	 	CSPE et al.
	 	(d)46.995,00
	 	Labor Claim
	07/199510

	 	CJE
	 	(d)4.312,56
	 	Labor Claim

FILED IN 200711

	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Action	 	Proceeding No.	 	Claimed Amount (R$)
	Marcos Livingston de Oliveira

	 	CSPE
	 	Labor claim
	 	78/2007
	 	 	6,274.44	 

See Schedule 3.3(b) under the heading “Undisclosed Liabilities”. The information included
thereunder shall not be deemed to be an exception to the representations and warranties included in
Section 3.6 of the Agreement for purposes of the indemnification provisions of Article VIII.

 

			
	3	 	The proceeding involves the discussion about hazardous pay, but
the parties reached a judicial settlement.
	 
	4	 	A final and unappealable decision was issued. Amount to be paid.
	 
	5	 	The claimant was ordered to pay for bad faith litigation.
	 
	6	 	The proceeding involves the discussion about compensation for
hazardous working conditions, but the parties reached a judicial settlement.
	 
	7	 	The result of the proceeding is being enforced.
	 
	8	 	Award calculation/amount offered by CSPE.
	 
	9	 	Judicial settlement.
	 
	10	 	Hazardous pay/Dismissal without prejudice

 

48

Schedule 3.7(a)

Compliance with Laws

	 	 	 	 	 	 	 	 	 	 	 
	DESCRIPTION	 	CLAIMED AMOUNT	 	COMPANY	 	PAYMENT DATE	 	STATUS
	Notice 0531/02 — AI 151 —
related to DEC and FEC
indicators with CSPE

	 	 	10,071.48	 	 	CSPE
	 	01/31/2003
	 	Closed
	Notice 0532/02 — AI 152 —
related to DEC indicator
with CPEE

	 	 	3,111.27	 	 	CPEE
	 	01/31/2003
	 	Closed
	Notice 0535/02 — AI 153 —
related to FEC indicators
with CLFM

	 	 	3,014.13	 	 	CLFM
	 	01/31/2003
	 	Closed
	Addendum to contract with
CPEE Equipamentos executed
without consent by ANEEL
(Notice 475/2002 — AI049)

	 	 	3,299.00	 	 	CPEE
	 	04/04/2003
	 	Closed
	Addendum to contract with
CPEE Equipamentos executed
without consent by ANEEL
(Notice 476/2002 — AI048)

	 	 	20,015.00	 	 	CJE
	 	04/04/2003
	 	Closed
	Addendum to contract with
CPEE Equipamentos executed
without consent by ANEEL
(Notice 553/2002 — AI137)

	 	 	5,295.44	 	 	CLFM
	 	04/04/2003
	 	Closed
	Addendum to contract with
CPEE Equipamentos executed
without consent by ANEEL
(Notice 554/2002 — AI138)

	 	 	8,226.29	 	 	CSPE
	 	04/04/2003
	 	Closed
	Consent to PLE share
control transfer to a
different company without
prior consent by ANEEL.
Notice 058/2005 AI
034/2005

	 	 	55,379.87	 	 	PLE
	 	10/16/2006
	 	Closed
	Economic and Financial
Inspection (Loan
Agreement, Physical
Inventory, Disposal
Proceedings, Orders in
Course, Affiliates
Companies, CUSD.) Notice
0680/2003 — AI187

	 	 	41,537.49	 	 	CSPE
	 	02/09/2007
	 	Awaiting dismissal
	Financial interest in
costs of new connections —
Notice 0558/2002 e AI
0173/2004

	 	 	25,000.00	 	 	CSPE
	 	02/09/2007
	 	Awaiting dismissal
	Economic and Financial
Inspection (Loan
Agreement, Physical
Inventory, Disposal
Proceedings, Orders in
Course, Affiliates
Companies) Notice
0683/2003 AI 185

	 	 	21,457.18	 	 	CLFM
	 	02/22/2007
	 	Awaiting dismissal
	Economic and Financial
Inspection (Loan
Agreement, Physical
Inventory, Disposal
Proceedings, Orders in
Course, Affiliates
Companies), Notice
682/2003 — AI 188/2005

	 	 	49,475.45	 	 	CPEE
	 	02/22/2007
	 	Awaiting dismissal
	Economic and Financial
Inspection (Loan
Agreement, Physical
Inventory, Disposal
Proceedings, Orders in
Course, Affiliates
Companies, URP) AI 186
Notice 0684/2003

	 	 	43,089.83	 	 	CJE
	 	02/22/2007
	 	Awaiting dismissal
	Services Agreement — 1st
addendum executed without
consent by ANEEL Notice
0142/2003 AI 004/2004

	 	WARNING
	 	CSPE
	 	—
	 	Awaiting dismissal
	Services Agreement — 1st
addendum executed without
consent by ANEEL Notice
0155/2003 AI 002/2004

	 	WARNING
	 	CLFM
	 	—
	 	Awaiting dismissal

 

49

	 	 	 	 	 	 	 	 	 	 	 
	DESCRIPTION	 	CLAIMED AMOUNT	 	COMPANY	 	PAYMENT DATE	 	STATUS
	Services Agreement — 1st
addendum executed without
consent by ANEEL Notice
0156/2003 AI 003/2004 —
fine of 25,387.72

	 	Revoked by Official Order 1389/05 of 18.Oct.05
	 	CJE
	 	-
	 	Awaiting dismissal
	Failure to comply with
Resolution 249/2002 —
sending of data to CBEE
(Notice 140/2004) AI
015/2005

	 	WARNING
	 	CSPE
	 	—
	 	Closed
	Failure to comply with
Resolution 249/2002 —
sending of data to CBEE
(Notice 142/2004) AI
016/2005

	 	WARNING
	 	CLFM
	 	—
	 	Closed
	Failure to comply with
Resolution 249/2002 —
sending of data to CBEE
(Notice 143/2004) AI
012/2005

	 	WARNING
	 	CJE
	 	—
	 	Closed
	Failure to comply with
Resolution 249/2002 —
sending of data to CBEE
(Notice 145/2004) AI
014/2005

	 	WARNING
	 	CPEE
	 	—
	 	Closed
	Services Agreement — 1st
addendum executed without
consent by ANEEL Notice
0158/2003 AI 001/2004

	 	Revoked by Official Order 760/04 of 21.Sep.04
	 	CPEE
	 	—
	 	Awaiting dismissal
	Penalty for Insufficient
Consumption Coverage
January/06 CCEE Notice
058/2006 — Penalty
R$121.050,84

	 	WARNING
	 	CJE
	 	—
	 	Closed
	TOTAL PAID (2003+2006+2007)

	 	 	R$ 288,972.43	 	 	—	 	—	 	—
	 

	 	 	 	 	 	 	 	 	 	 
	Loan agreement between
related parties CJE x CSPE
Notice 060/2005 AI
025/2005 (Case no.
48500.001170/05)

	 	 	72,841.41	 	 	CJE
	 	—
	 	Being analyzed by reporting director. Joísa — awaiting inclusion in the agenda of the board of officers’ meeting
	Notice — Notice no.
028/2006—SFF of
02.Mar.2006 — RTE. AI
021/2006

	 	 	169,133.06	 	 	CJE
	 	—
	 	Examination of record requested on 09.Feb.07
	Notice — Notice no.
029/2006—SFF of
02.Mar.2006 — RTE. AI
023/2006

	 	 	96,258.68	 	 	CLFM
	 	—
	 	Examination of record requested on 09.Feb.07
	Corporate Restructuring —
Private Instrument for
Acknowledgment of Debt and
Release Notice 057/2005 AI
0026/2005 (Case no.
48500.001171/05-48)

	 	 	64,390.26	 	 	CPEE
	 	—
	 	Being analyzed by the directors
	Related to inspection/05 —
RTE, Notice — Notice no.
026/2006 AI 017/2006 (Case
no. 48500.004636/03-14)

	 	 	112,162.42	 	 	CPEE
	 	—
	 	Awaiting inclusion in the agenda of ANEEL’s board of officers — ANEEL’s reporting director Romeu Donizete Rufino was chosen by lot on 09.Nov.06
	Notice — Notice no.
027/2006—SFF of
02.Mar.2006 — RTE. AI
022/2006

	 	 	187,525.81	 	 	CSPE
	 	—
	 	Examination of record requested on 09.Feb.07
	OUTSTANDING TOTAL

	 	 	R$ 702,311.64	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

			
	*	 	See Schedule 3.5 under the heading “Tax Matters”.

See Schedule 3.3(b) under the heading “Undisclosed Liabilities.” The information included
thereunder shall not be deemed to be an exception to the representations and warranties included in
Section 3.7(a) of the Agreement for purposes of the indemnification provisions of Article VIII.

 

50

Schedule 3.8(a)

Employee Benefits

See Schedule 3.13(a).

See Schedule 3.8(e).

The following plans are applicable to all employees under the collective bargaining agreements:

	 	•	 	medical assistance;
	 
	 	•	 	dental assistance;
	 
	 	•	 	funeral assistance;
	 
	 	•	 	life insurance;
	 
	 	•	 	vacations loans;
	 
	 	•	 	pharmacy reimbursement;
	 
	 	•	 	transportation allowance;
	 
	 	•	 	basic items allowances;
	 
	 	•	 	biannual wage increase;
	 
	 	•	 	8-salary retirement incentive; and
	 
	 	•	 	participation in company’s profits.

There is also an education allowance, which may be applied by any employee subject to certain
rules, which is not based on a collective bargaining agreement.

Additionally, the companies of the group have established on December 2005 a pension plan (named
CMSPrev) for all employees. The employees receiving a salary less than the official pension limit
will receive 3 (three) month salary upon retirement, without any contribution by the employee. The
employees receiving a salary greater than said limit are allowed to contribute to the plan with an
amount equivalent to 2% to 14% of his/her basic salary, which amount will be complemented by a
contribution of the company up to the same amount subject to certain rules set forth in the Pension
Plan.

Finally, certain managers and officers are entitled to use cars and mobile phones of the companies
subject to companies’ policies and CMS Energy Brasil Annual Management Incentive Plan subject to
certain rules.

The Company and certain Company subsidiaries and 17 employees (including certain executive
officers) of the Company and such Company Subsidiaries have entered into certain agreements whereby
such employees and executive officers are entitled to certain payments (i) upon termination of
their respective employment with the Company without cause within 12 months after a change of
control of the Company or (ii) within 12 months after a change of control of the Company if such
employee terminates his/her employment as result of any change in his/her employment status in
respect of his/her salary, position, responsibilities or duties. The obligations relating to the
payments due to each of these 17 employees (including certain executive officers of the Company and
such Company Subsidiaries) shall either be assigned and assumed by Seller or one of its Affiliates
prior to the Closing Date or, if paid by the Company or
Company Subsidiaries at or after the Closing Date, shall be reimbursed by the Seller or one of its
Affiliates.

 

51

Schedule 3.8(b)

Employee Benefits

See Schedule 3.8(e)

 

52

Schedule 3.8(e)

Employee Benefits

Amendments to certain employment agreements between the following parties were entered into on the
dates indicated below, providing for compensation upon termination under certain circumstances:

	•	 	CPEE and John Sam Koutras, dated January 15, 2007.
	 
	•	 	CJEE and Adriana Marques Sarinho Ribeiro, dated August 7, 2006.
	 
	•	 	CSPE and Claude Breyvogel, dated August 1, 2006.
	 
	•	 	CPEE and José Anselmo da Silva, dated February 27, 2002
	 
	•	 	CPEE and Marco Antonio de Mello, dated June 10, 2003.
	 
	•	 	CPEE and Mario Octavio Frigo, dated February 27, 2002.
	 
	•	 	CJE and Luiz Toshiro Okamoto, dated February 27, 2002.
	 
	•	 	CJE and Guilherme Moretti Junior, dated February 27, 2002
	 
	•	 	CJE and Carlos Eduardo de Oliveira, dated February 27, 2002
	 
	•	 	CJE and Norberto de Jesus Filho, dated February 27, 2002
	 
	•	 	CSPE and Norberto de Jesus Filho, dated February 27, 2002
	 
	•	 	CPEE and Norberto de Jesus Filho, dated February 27, 2002
	 
	•	 	CSPE and Admir Polidoro, dated February 27, 2002
	 
	•	 	CSPE and Eduardo Matsudo, dated February 27, 2002
	 
	•	 	CSPE and Márcia Regina da Rocha Britto Sanches, dated February 27, 2002
	 
	•	 	CPEE and Antonio José Manrique, dated February 27, 2002
	 
	•	 	CLFM and Sergio Omar Vulijscher, dated February 27, 2002
	 
	•	 	CLFM and Ricardo Villagra da Silva Marques, dated September 10, 2003
	 
	•	 	CLFM and Liliane Messina Nóbile, dated February 27, 2002

 

53

Schedule 3.9(a)

Permits

     None.

 

54

Schedule 3.10(a)

Real Property

I. LEASED REAL PROPERTY

Lajeado Project — Leasing Agreement between Investco S.A. and Paulista Lajeado Energia S.A.
(Contrato de Arrendamento entre Investco S.A. e Paulista Lajeado Energia S.A.) Parties: Lessor
Investco; Lessee — Paulista Lajeado. Date: July 2001.

II. OWNED REAL PROPERTY

COMPANHIA PAULISTA DE ENERGIA ELÉTRICA — CPEE

	 	 	 	 	 	 	 
	1

	 	Land

(Transcription
on
pages
119v/120 —

book 3-C) 2276
	 	01 land area
located at Rua
Coronel Vicente
Dias Jr. 100,
Municipality of
SJRPardo/SP, with
total area of
6,050m2 — (Power
Plant of SJRPardo)
	 	Regional Administration
	2

	 	Land

(Records no.
4844)
	 	Land area located
at Sítio Novo do
Rio do Peixe, in
the Municipality of
SJRPardo/SP, with
total area of
75.3341 hectares
	 	Rio do Peixe Power
Plant — Sítio Novo do
Rio do Peixe
	3

	 	Land

(Records no.
24668)
	 	Land area located
at Sítio Santa
Terezinha, in the
Municipality of
SJRPardo/SP, with
total area of
24,500m2
	 	Rio do Peixe Power
Plant — Sítio Santa
Terezinha
	4

	 	Land

(Records no.
20.282)
	 	Land area located
at Fazenda Santa
Cruz, in the
Municipality of
SJRPardo/SP, with
total area of
3.3396 ha
	 	Rio do Peixe Power
Plant — Fazenda Santa
Cruz
	5

	 	Land

(Records no.
24665)
	 	Land area located
at Sítio Nossa
Senhora de Fátima,
in the Municipality
of SJRPardo/SP,
with total area of
1.590 hectares
	 	Rio do Peixe Power
Plant — Sítio Nossa
Senhora de Fátima
	6

	 	Land

(Records no.
 24666)
	 	Land area located
at Fazenda Rio do
Peixe, in the
Municipality of
SJRPardo/SP, with
total area of 3,901
hectares
	 	Rio do Peixe Power
Plant — Fazenda Rio

do Peixe
	7

	 	Land

(Records no.
24670)
	 	Land area located
at Fazenda Santa
Amélia, Fazenda
Cachoeira e Fazenda
Santa Cruz, in the
Municipality of
SJRPardo, with an
area of 90,0554
hectares
	 	Rio do Peixe Power
Plant — Fazenda
Cachoeira
	8

	 	Land

(Records no.
24669)
	 	Land area located
at Sítio Santa
Terezinha, in the
Municipality of
SJRPardo, with
total area of
0.8860 hectares
	 	Rio do Peixe Power
Plant — Sítio Santa
Terezinha
	9

	 	Land

(Records no.
24667)
	 	Land area located
on the real estate
named Cachoeirinha
do Santo Antonio,
with an area of
0.9212 hectares
	 	Rio do Peixe Power
Plant — Sítio
Cachoeirinha
	10

	 	Land

(Records no.
5494)
	 	Land area located
at Fazenda Bela
Vista, in the
Municipality of
SJRPardo/SP, with
an area of 92.767m2
	 	Rio do Peixe Power
Plant — Fazenda Bela
Vista
	11

	 	Land

(Records no.
5493)
	 	Land area located
at Fazenda Salto do
Rio do Peixe, in
the Municipality of
SJRPardo/SP, with
an area of 79.200m2
	 	Rio do Peixe Power
Plant — Fazenda Salto
do Rio do Peixe

COMPANHIA SUL PAULISTA DE ENERGIA — CSPE

	 	 	 	 	 	 	 
	1

	 	Land

(Records no.6285)
	 	Lavrinha, Água
Branca and Represa
Velha — land
located at
Municipality of São
Miguel Arcanjo/SP
	 	São José Power
Plant — São Miguel
Arcanjo
	2

	 	Land

(Records no.
58284,
58285, 58286,

58287, 58288 e
	 	Land located at Rua
Aristídes Lobo,
224, Downtown,
Municipality of
Itapetininga, with
total area of
1,881.38m2
	 	Office — regional
— Itapetininga

 

55

	 	 	 	 	 	 	 
	 

	 	
 58289	 	 	 	 
	3

	 	Land

(Records no.
47655)
	 	Land located at
Rodovia Raposo
Tavares, Bairro
Água Limpa,
Municipality of
Itapetininga/SP,
with total area of
19000m2
	 	N/S and Warehouse
— Chácara Água
Limpa —
Itapetininga
	4

	 	Land

(Records no.
9344)
	 	Land located at
Estrada Municipal
Chapadinha, Vila
Lagoa Silvana,
Municipality of
Itapetininga/SP,
with total area of
8.193m2
	 	N/S Chapadinha —
Itapetininga

COMPANHIA JAGUARI DE ENERGIA — CJE

	 	 	 	 	 	 	 
	1

	 	Land

(Records no.
8760)
	 	Land located in the
Municipality of
Souza/SP, with an
area of 64,858.35m2
	 	Macaco Branco Power Plant
	2

	 	Land

(Records no.
21.855)
	 	Land located at
former Road at
Ladeira Antonio
Zanchetta,
currently Rua
Gáspere, in the
Municipality of
Jaguariúna/SP, with
an area of 2015m2
	 	Jaguariúna Substation —
34,5 Kv
	3

	 	Land

(Records no.
22172)
	 	01 tract resulting
from division of
the real estate
named Santa Cruz
II, located in the
Municipality of
Jaguariúna
(currently Rua
Vigato, 1620)
	 	Central Administration
Office— Jaguariúna

COMPANHIA LUZ E FORÇA DE MOCOCA — CLFM

	 	 	 	 	 	 	 
	1

	 	Land

(Transcription
1922)
	 	01 land located in real
estate named Fazenda
Pedra Branca,
Municipality of
Arceburgo/MG, with 04
alqueires (each
alqueire corresponds to
48,400 m2)
approximately
	 	São Sebastião Power Plant
	2

	 	Land

(Records no.
7310)
	 	01 land located in the
Municipality of Monte
Santo de Minas/MG, on
the margins of Rio
Pinheirinho River, with
13 alqueires (each
alqueire corresponds to
48,400 m2)
	 	Pinheirinho Power Plant
	3

	 	Land

(Transcription
1341)
	 	01 land located at Rua
Alferes Pedrosa, 227,
Centro , Mococa/SP,
with total area of
2,947.73m2
	 	Regional
	4

	 	Land

(Records no.
11.977)
	 	01 land located at
Rodovia MG- 449
(Arceburgo/Guaranésia),
Municipality of
Arceburgo/MG, with an
area of 2,250.62m2
	 	S/E Arceburgo/MG

CMS ENERGY EQUIPAMENTOS, SERVIÇOS, INDÚSTRIA E COMÉRCIO S/A

	 	 	 	 	 	 	 
	01

	 	Land

Records no.
22635
	 	Lot no. 5, block
“i” in allotment
named Distrito
Industrial
(Industrial
District) with
600m2
	 	Land in the Distrito

Industrial (Industrial

District)
	02

	 	Land with 
building
Records no.
26100
	 	Head Office with
office and shed—
Av. dos Bragettas,
364 — Distrito
Industrial
(Industrial
District) with 30m2
	 	Office/Shed — Head office

 

56

Schedule 3.11(a)

Contracts

I. BNDES FINANCING AGREEMENTS

See Schedule 3.1(c) under the heading “BNDES Financing Agreements”.

II. AGREEMENTS 

1. BASA Financing Agreement (Contrato de Financiamento n. 127-00/0568-2). Parties: Lender — BASA;
Borrower — Investco. Date: December 28, 2000. Guarantor (Caucionante): CELPA. Intervening
Parties (Mortgagors): Celtins Energética S/A (“Celtins Energética”), Agro Pastoril Lajeado Ltda.
Guarantors (Fiadores): Rede Lajeado, EDP Lajeado, CEB Lajeado, and Paulista Lajeado.

1.1. First Amendment to BASA Financing Agreement (Primeiro Aditivo de Re-Ratificação ao Contrato de
Financiamento n. 127-00/0568-2). Date: March 29, 2001.

2. BASA Financing Agreement (Contrato de Financiamento n. 127-99-0185-0). Parties: Lender — BASA;
Borrower — Investco. Date: September 30, 1999. Guarantors (Caucionantes): CELTINS and CELPA.
Guarantors (Fiadores): Vale Paranapanema, CELTINS, CEMAT, CELPA, CEB, CPEE and EDP Brasil.

2.1. First Amendment to BASA Financing Agreement (Primeiro Aditivo de Re-Ratificação ao Contrato de
Financiamento n. 127-99-0185-0). Date: July 13, 2001. Guarantor EDP Brasil was replaced by Energen
— Empresa Brasileira de Geração de Energia.

3. CPEE — ICMS Credit Assignment and Transfer Agreement (Instrumento de cessão e transferência de
créditos de ICMS). Date: November 11, 2005.

4. CJE — ICMS Credit Assignment and Transfer Agreement (Instrumento de cessão e transferência de
créditos de ICMS). Date: November 25, 2005.

5. Agreement for the Use of Transmission System — CUST no. 012/2003. Date: July 14, 2003. Parties:
CPEE and Operador Nacional do Sistema Elétrico-ONS.

5.1. First Amendment to CUST no. 012/2003, dated December 17, 2003.

5.2. Second Amendment to CUST no. 012/2003, dated December 29, 2004.

5.3. Third Amendment to CUST no. 012/2003, dated December 30, 2004.

5.4. Forth Amendment to CUST no. 012/2003, dated November 30, 2005.

5.5. Fifth Amendment to CUST no. 012/2003, dated November 21, 2006.

6. Agreement for the Use of Transmission System — CUST no. 0122/2002. Date: December 30, 2002.
Parties: CSPE and Operador Nacional do Sistema Elétrico-ONS.

 

57

6.1. First Amendment to CUST no. 0122/2002, dated May 30, 2003.

6.2. Second Amendment to CUST no. 0122/2002, dated December 17, 2003.

6.3. Third Amendment to CUST no. 0122/2002, dated August 31, 2004.

6.4. Forth Amendment to CUST no. 0122/2002, dated December 30, 2004.

6.5. Fifth Amendment to CUST no. 0122/2002, dated November 30, 2005.

6.6. Sixth Amendment to CUST no. 0122/2002, dated November 21, 2006.

7. Agreement for the Use of Transmission System — CUST no. 0123/2002. Date: December 30, 2002.
Parties: CJE and Operador Nacional do Sistema Elétrico-ONS.

7.1. First Amendment to CUST no. 0123/2002, dated December 18, 2003.

7.2. Second Amendment to CUST no. 0123/2002, dated August 31, 2004.

7.3. Third Amendment to CUST no. 0123/2002, dated December 30, 2004.

7.4. Forth Amendment to CUST no. 0123/2002, dated February 28, 2005.

7.5. Fifth Amendment to CUST no. 0123/2002, dated November 30, 2005.

7.6. Sixth Amendment to CUST no. 0123/2002, dated November 21, 2006.

8. Agreement for the Use of Transmission System — CUST no. 008/2006. Date: January 25, 2006.
Parties: CLFM and Operador Nacional do Sistema Elétrico-ONS.

8.1. First Amendment to CUST no. 008/2006, dated November 21, 2006.

9. Agreement for the Use of Transmission System — CUST no. 014/2001. Date: November 01, 2006.
Parties: Investco, Rede Lajeado, EDP Lajeado, CEB Lajeado, Paulista Lajeado and Operador Nacional
do Sistema Elétrico-ONS.

9.1. First Amendment to CUST no. 014/2001, dated October 21, 2003.

10. ICMS Credit Assignment and Transfer Agreement (Contrato de cessão e transferência de créditos
de ICMS). Date: November 25, 2005. Parties: CPEE and Motorola Industrial Ltda.

11. ICMS Credit Assignment and Transfer Agreement (Contrato de cessão e transferência de créditos
de ICMS). Date: November 25, 2005. Parties: CJE and Motorola Industrial Ltda.

12. Agreement for the Rendering of Maintenance Services related to Distribution Transformers —
Agreement no. 4600006718. Date: November 01, 2005. Parties: CMS Equipamentos Elétricos and
Companhia Paulista de Força e Luz.

 

58

12.1. First Amendment to Agreement no. 4600006718, dated January 11, 2007.

13. Services Agreement. Parties: CMSD and CMS Electric And Gas LLC.

14. Financing Agreement (“Contrato de Financiamento e Concessão de Subvenção”) — Agreement no. ECF
1384/96. Date: March 19, 1998. Parties: Centrais Elétricas Brasileiras S.A. — Eletrobrás and CPEE.

15. Financing Agreement (“Contrato de Financiamento e Concessão de Subvenção”) — Agreement no. ECFS
073/2004. Date: December 06, 2004. Parties: Centrais Elétricas Brasileiras S.A. — Eletrobrás and
CSPE.

III. INVESTMENT AGREEMENT

1. Investment Agreement and Counter-Guarantees (Contrato de Investimento, Contra-Garantias e Outras
Avenças). Parties: CELPA, CELTINS, Caiuá, CEMAT (jointly as shareholders of Rede Lajeado), EDP
Brasil (as shareholder of EDP Lajeado), CEB (as shareholder of CEB Lajeado), CSPE (as shareholder
of Paulista Lajeado), Rede Lajeado, EDP Lajeado, Paulista Lajeado and CEB Lajeado. Date: September
12, 2000. Intervening Parties: Investco and EDP Portugal.

2. Leasing Agreement: Rede Lajeado, EDP Lajeado, CEB Lajeado and Paulista Lajeado shall execute
with Investco a Leasing Agreement (Contrato de Arrendamento). Every Lessee shall be jointly liable
for the payment of the amounts due according to the Leasing Agreement, and shall have a subrogation
right against the defaulting party, which will have to transfer its ordinary shares as form of
payment in case of default.

3. Fiduciary Agency Agreement (“Contrato de Agenciamento Fiduciário”), dated July 30, 2001.
Parties: Rede Lajeado, EDP Lajeado, CEB Lajeado, Paulista Lajeado, Investco, BNDES and other banks.

4. Concession Rights Pledge Agreement (Contrato de Penhor de Direitos Emergentes da Concessão)
dated July 30, 2001. Parties: Rede Lajeado, Paulista Lajeado, EDP Lajeado, CEB Lajeado, Investco,
BNDES, Banco Itaú S.A., Banco Bradesco S.A., Banco BBA Creditanstalt S.A. and Banco ABC Brasil S.A

5. Share Pledge Agreement, dated September 29, 2000. Parties: Shareholders of Rede Lajeado,
Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP Lajeado, Paulista
Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

5.1. Amendment to the Share Pledge Agreement, dated February 1, 2001. Parties: Shareholders of Rede
Lajeado, Shareholders of EDP Lajeado, Shareholders of Paulista Lajeado, Rede Lajeado, EDP Lajeado,
Paulista Lajeado, Investco, Centrais Elétricas do Pará S/A — CELPA, BNDES and other banks.

 

59

IV. SHARE PURCHASE AND SHAREHOLDERS AGREEMENTS

1. Share Purchase Agreement (Instrumento Particular Para a Venda e Compra de Ações). Parties:
Seller — Centrais Elétricas Brasileiras S.A.; Buyer — Paulista Lajeado. Date: December 29, 2005.
Intervening Parties: Investco, Rede Lajeado, CEB Lajeado, and EDP Lajeado.

2. See Schedule 3.1(c)(i) under the heading “Shareholders Agreement”.

V. POWER PURCHASE AGREEMENTS

1. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — Investco;
Buyer: CSPE. Date: February 1, 2002.

2. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — Paulista
Lajeado; Buyer — CSPE. Date: November 1, 2001.

2.1. First Amendment to the Power Purchase Agreement (Primeiro Aditivo ao Contrato de Compra e
Venda de Energia). Date: October 22, 2002.

3. Assignment Agreement of Power Purchase Agreement (Instrumento Particular de Cessão Parcial de
Contrato de Compra e Venda de Energia Elétrica). Parties: Assignor — CSPE; Assignee — CPEE;
Seller — Paulista Lajeado. Date: October 25, 2002.

4. Assignment Agreement of Power Purchase Agreement (Instrumento Particular de Cessão Parcial de
Contrato de Compra e Venda de Energia Elétrica). Parties: Assignor — CSPE; Assignee — CJE; Seller
- Paulista Lajeado. Date: October 25, 2002.

5. Power Purchase Agreement (Contrato de Compra e Venda de Energia — CTO/VE PLE n. 001/2005).
Parties: Seller — Paulista Lajeado; Buyer — CMS Comercializadora de Energia Ltda. (Buyer). Date:
September 28, 2005.

6. Power Purchase Agreement (Contrato de Compra e Venda de Energia — CTO/VE CJE n. 001/2001).
Parties: CJE and CPE. Date: October 01, 2001.

VI. POWER PURCHASE AGREEMENTS WITH CESP

1. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — CESP; Buyer
— CPEE. Date: January 31, 2007.

2. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — CESP;
Buyer: CLFM. Date: January 31, 2007.

3. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — CESP; Buyer
— CJE. Date: January 31, 2007.

4. Power Purchase Agreement (Contrato de Compra e Venda de Energia). Parties: Seller — CESP; Buyer
— CSPE. Date: January 31, 2007.

 

60

VII. CONCESSION AGREEMENTS

1. Concession Agreement UHE Lajeado (Contrato de Concessão n. 05/97 — ANEEL — UHE
Lajeado), dated December 16, 1997. Parties: Conceding Authority — Brazilian Government, through
ANEEL; Concessionaire — Lajeado Consortium, which is composed by CELTINS, Vale Paranapanema,
Investco S.A. (“Investco”), Companhia Paulista de Energia Elétrica (“CPEE”), CEB and EDP Brasil.

1.1. First Amendment to the Concession Agreement UHE Lajeado (Primeiro Termo Aditivo
Contrato de Concessão n. 05/97 — ANEEL — UHE Lajeado), dated July 17, 2000. Parties: Brazilian
Government, through ANEEL; Lajeado Consortium, which is composed by Rede Lajeado (as successor of
CELTINS and Vale Paranapanema), Investco, Paulista Lajeado Energia S.A. (successor of CPEE), CEB
Lajeado (successor of CEB) and EDP Lajeado (successor of EDP Brasil).

1.2. Second Amendment to the Concession Agreement UHE Lajeado (Segundo Termo Aditivo
Contrato de Concessão n. 05/97 — ANEEL — UHE Lajeado) dated March 4, 2002.

2. Concession Agreement for Energy Distribution (Contrato de Concessão para Distribuição de
Energia n. 15/99 — ANEEL — Companhia Jaguari Energia (“Jaguari Energia”)), dated February 3,
1999. Parties: Conceding Authority: Brazilian Government, through ANEEL; Concessionaire: Jaguari
Energia.

3. Concession Agreement for Energy Distribution (Contrato de Concessão para Distribuição de
Energia n. 18/99 — ANEEL — CPEE), dated February 3, 1999. Parties: Conceding Authority -
Brazilian Government, through ANEEL; Concessionaire: CPEE.

3.1. First Amendment to the Concession Agreement for Energy Distribution (Primeiro Termo
Aditivo ao Contrato de Concessão para Distribuição de Energia n. 18/99 — ANEEL — CPEE) dated July
17, 2002. Parties: Conceding Authority — Brazilian Government, through ANEEL; Concessionaire —
CPEE.

4. Concession Agreement for Energy Generation PCH Rio do Peixe (Contrato de Concessão n.
10/99 — ANEEL — CPEE) dated February 3, 1999. Parties: Conceding Authority — Brazilian
Government, through ANEEL; Concessionaire: CPEE.

4.1. First Amendment to the Concession Agreement for Energy Generation PCH Rio do Peixe
(Primeiro Termo Aditivo ao Contrato de Concessão de Geração n. 10/99 — ANEEL — CPEE and CJE)
dated October 1, 1999. Parties: Conceding Authority — Brazilian Government, through ANEEL;
Concessionaire: CPEE-CJE.

 

61

4.2. Second Amendment to the Concession Agreement for Energy Generation PCH Rio do Peixe
(Segundo Termo Aditivo ao Contrato de Concessão de Geração n. 10/99 — ANEEL — CPEE and CJE) dated
August 14, 2006. Parties: Conceding Authority — Brazilian Government, through ANEEL;
Concessionaire: CPEE-CJE.

5. Concession Agreement for Energy Distribution (Contrato de Concessão para Distribuição de
Energia n. 19/99 — ANEEL — CSPE) dated February 3, 1999. Parties: Conceding Authority — Brazilian
Government, through ANEEL; Concessionaire — Companhia Sul Paulista de Energia (CSPE); Intervening
Party — CPEE.

5.1. Second Amendment to the Concession Agreement for Energy Distribution (Segundo Termo
Aditivo ao Contrato de Concessão para Distribuição de Energia n. 18/99 — ANEEL — CPEE) dated
January 18, 2006. Parties: Conceding Authority — Brazilian Government, through ANEEL;
Concessionaire: CPEE.

6. Concession Agreement for Energy Distribution 17/99 (Contrato de Concessão para
Distribuição de Energia n. 17/99), dated February 3, 1999. Parties: Conceding Authority —
Brazilian Government, through ANEEL; Concessionaire: CLFM.

6.1. First Amendment to the Concession Agreement for Energy Distribution 17/99 (Primeiro
Termo Aditivo ao Contrato de Concessão para Distribuição de Energia n. 17/99) dated January 18,
2006. Parties: Conceding Authority — Brazilian Government, through ANEEL; Concessionaire: CLFM.

7 Concession Agreement for Energy Generation 09/99 (Contrato de Concessão para Geração de
Energia n. 9/99), dated February 3, 1999. Parties: Conceding Authority — Brazilian Government,
through ANEEL; Concessionaire: CJEE (UHE Macaco Branco).

VIII. INSTALLATION AND OPERATION LICENSES

1. Installation License n. 6 (Licença de Instalação n. 6). Installation License issued by the São
Paulo State Secretary of Environment to Development UHE do Rio do Peixe of CPEE, dated February 13,
1996.

2. Operation License n. 11 (Licença de Operação n. 11). Operation License issued by the São Paulo
State Secretary of Environment to Development UHE do Rio do Peixe of CPEE, dated January 8, 1998.

3. Operation License n. 123 (Licença de Operação n. 123). Operation License issued by the Tocantins
State Secretary of Environment to Development UHE de Luis Eduardo Magalhães, dated Abril 10, 2006.

 

62

IX. CONVERTIBLE AND NON CONVERTIBLE DEBENTURES

1. Deed of Investco S.A. for the Issuance of Convertible Debentures with Floating Guarantee
(Escritura Particular de Emissao de Debêntures Conversíveis em Ações, com Garantia Flutuante e
Fiança), dated October 27, 2003.

2. Deed of Investco S.A. for the Issuance of Non-Convertible Debentures with Guarantee (Fiança
solidariamente concedida por Empresa de Eletricidade Vale Paranapanema S.A. e EDP — Eletricidade
de Portugal), dated October, 31, 2001.

 

63

Schedule 3.11(b)(i)

Contracts

None.

 

64

Schedule 3.11(b)(ii)

Contracts

None.

 

65

Schedule 3.12

Environmental Matters

As of December 31, 2006, Investco S.A. (“Investco”), in which the Company has equity participation
through Paulista Lajeado, was party to legal and administrative proceedings relating to
environmental claims, mainly in connection with the “Lajeado Plant”:

	•	 	Three public civil actions are being brought by the Federal Public Prosecutor’s office
against Investco, in connection with its supposed failure to comply with its obligations with
regard to Basic Environmental Projects for flora and fauna, in a total amount of R$210.0
million. The first action, brought in December 2001, was dismissed on October 2005. In
another action, the Federal Public Prosecutor’s office sought specific performance to require
the plant to comply with all of its basic environmental plans, alleging that there was a
generalized default in relation to them. The Company believes that it is feasible to
negotiate the establishment of a consent order with the Federal Public Prosecutor’s office in
order to dismiss the request for specific performance. The third Public Civil Action requests
an injunction requiring the immediate cleaning of the lake, the introduction of a Plan for Use
of the lake’s Surrounding Areas and the purchase of permanent preservation areas situated in a
100 meter wide strip around the lake, under penalty of a daily fine. The injunction was denied
and Investco obtained a favorable injunction with a specific writ of mandamus with regard to
the obligation to purchase the permanent preservation areas. As a result, currently Investco
cannot be obliged to comply with these requirements. The Company believes that it may be able
to negotiate a consent order with the Federal Public Prosecutor’s office. The Company has
been advised that the chances of losing are remote, based on the fact that Investco fully
meets the requirements contained in the aforementioned projects. No provision has been made
for these 2 pending public civil actions since the risk of loss has been considered remote.

	•	 	An Infraction Notice was drawn up by the Brazilian Environmental Agency — IBAMA against
Investco with regard to the “Lajeado Plant” as a result of the death of fish allegedly caused
by the plant’s operations. In this notice, IBAMA fined Investco approximately R$0.2 million.
Investco has filed its defense and has obtained a reduction of over 90.0% in the amount of the
fine, to R$17,000. It has also requested conversion of a part of the fine into preventive and
mitigating actions, and finally requested the conversion of the fine into services. Currently,
the Company is waiting for IBAMA’s response.

	•	 	Twelve infraction notices were issued by the State of Tocantim’s environmental body
(Naturatins) against Investco with regard to the “Lajeado Plant”.

	•	 	Of these 12 infraction notices, eight related to the cutting down of vegetation and
non-authorized interference with protected areas. The Company is awaiting cancellation of
eight of the notices in view of Investco’s compliance with the obligations in the TACs
entered into with respect to them. The four remaining infraction notices allege failure to
comply with obligations established in Basic Environmental Programs related to improvements in
the road, electric and sanitary infrastructure, relocation of the sanitary landfill of Palmas
and the construction of a community center. The total amount involved in these 4 remaining

 

66

	 	 	infraction notices is approximately R$17,000.00. In connection with these, Naturatins and
Investco entered into an agreement on May 24, 2006 (the “Commitment Term”). They agreed to the
suspension of fines amounting to 85.5% of the total imposed sanctions and the conversion of the
other 14.5% in equipment and materials for the mentioned environmental agency. The Commitment
Term is now in its final stage; the acquisition of materials and equipment by the company is
still pending. Once the mentioned commitments are complied with, there will be no pending
environmental administrative liabilities in connection with Naturatins.

Pending Permit: Environmental License from Minas Gerais State authorities regarding PCHs located in
CLFM concession area in Minas Gerais

 

67

Schedule 3.13(a)

Labor Matters

1. Collective Bargaining Convention. Parties: Electrical Installation, Gas, Hydraulic and Sanitary
Industry Union of State of São Paulo and Construction and Movables Industry Workers Federation of
State of São Paulo. Term: May 1st, 2006 to April 30, 2007.

2. Collective Bargaining Agreement. Parties: Electricians from South of State of Minas Gerais Union
and Companhia Luz e Força de Mococa. Term: April 1st, 2006 to March 31, 2008.

3. Collective Labor Agreement. Parties: Electricity Generation, Transmission and Distribution
Companies Workers’ Union of Municipality of Mococa Minas Gerais Union and Companhia Luz e Força de
Mococa. Term: April 1st, 2006 to March 31, 2008.

4. Collective Labor Agreement. Parties: Electrical Industry Workers’ Union of Campinas and
Companhia Jaguari de Energia, Companhia Paulista de Energia Elétrica, Companhia Sul Paulista de
Energia, Companhia Luz e Força de Mococa. Term: April 1st, 2006 to March 31, 2008.

 

68

Schedule 3.13(b)

Labor Matters

	1.	 	Electricity Industry Workers Union of the City of Campinas (Sindicato dos Trabalhadores
na Indústria de Energia Elétrica de Campinas)

	2.	 	Electricity Generation, Transmission and Distribution Companies Workers Union of the
City of Mococa (Sindicato dos Empregados nas Empresas de Geração, Transmissão e
Distribuição de Eletricidade do Município de Mococa)

	3.	 	Electricity Industry Workers Union of the South of Minas Gerais (Sindicato dos
Trabalhadores na Indústria de Energia Elétrica do Sul de Minas Gerais)

	4.	 	Construction, Furniture and Industrial Assembly Workers Union of the City of Mococa
(Sindicato dos Trabalhadores das Indústrias da Construção, Mobiliário e Montagem Industrial
de Mococa)

 

69

Schedule 3.15

Affiliate Contracts

	1.	 	Services Agreement entered into by CMS ENERGY BRASIL S.A. and CMS ELECTRIC & GAS
L.L.C., dated June 30, 2006.

	2.	 	Sublicenses from CMS Electric & Gas L.L.C. of certain software licenses including IBM
Passport Advantage and Microsoft Select Enrollment-Corporate.

 

70

Schedule 3.16

Insurance

1. Insurance Policy — Property.

Insured: Paulista, Sul Paulista, Jaguari, Mococa, CMS Equipamentos.

Insurer: Unibanco AIG Seguros e Previdência S.A.

Term: March 31, 2007 to March 31, 2008.

Policy No.:to be issued (renewed)

2. Insurance Policy — General Liability.

Insured: Paulista, Sul Paulista, Jaguari, Mococa, CMS Equipamentos.

Insurer: AGF Seguros S.A.

Term: March 31, 2007 to March 31, 2008.

Policy No.: to be issued (renewed)

3. Insurance Policy — Directors and Officers Liabilities (D&O).

Insured: Paulista and its subsidiaries.

Insurer: Unibanco AIG Seguros.

Term: July 13, 2006 to July 13, 2007

Police No.: 600002945

4. Insurance Policy — Property Rented

Insured: CMS Energy Equip., Serviços, Indústria e Comércio S.A.

Insurer: Tokio Marine Brasil Seguradora S.A.

Term: July 7, 2006 to July 7, 2007.

Policy No.: 05.18.019922

5. Insurance Policy — Grouping Policy

Insured: Cia. Paulista de Energia Elétrica.

Insurer: Unibanco AIG — Seguros e Previdência S.A.

Term: June 26, 2006 to March 26, 2007.

Policy No.: 1020481000

6. Insurance Policy — Transportation

Insured: All companies of the group.

Insurer: Generalli Companhia de Seguros

Term: April 1, 2007 to April 1, 2008

Policy No.: 331295 (renewed)

7. Insurance Policy — Vehicles

Insured: All companies of the group owners of vehicles.

Insurer: Tokio Marine

Term: December 31, 2006 to December 31, 2007

Policy No.: 05.312.406.361 / 05.31.406.484 / 05.31.406.350 / 05.31.406.355/

05.31.406.354.

8. Insurance Policy — Breach of Machines

Insured: Cia Paulista de Energia Elétrica.

Insurer: Unibanco AIG — Seguros e Previdência S.A.

Term: March 31, 2007 to March 31, 2008.

Policy No.: to be issued (renewed)

 

71

Schedule 9.2(a)

Company Knowledge Group

Sergio Vulijscher (Vice-Chairman of the Board and CEO)

Claude Breyvogel (Strategy and Business Development Officer)

John Sam Koutras (CFO, Administration and Investor Relations Officer)

Norberto de Jesus Filho (COO, Commercial and Technical Officer)

Luiz Toshiro Okamoto (Officer for Market and Regulatory Affairs)

Ricardo Villagra da Silva Marques (General Counsel)

 

PURCHASER DISCLOSURE LETTER

TO SHARE PURCHASE AGREEMENT

BY AND AMONG

CMS ELECTRIC & GAS, L.L.C.,

CMS ENERGY BRASIL S.A.,

together with

CMS ENERGY CORPORATION

(solely for the limited purposes of Section 8.9)

And

CPFL ENERGIA S.A.

DATED AS OF APRIL 12, 2007.

     This Purchaser Disclosure Letter is being furnished by CPFL ENERGIA S.A. (“CPFL”,
M46 y” or “Purchaser”) to CMS ELETRIC & GAS, L.L.C. (“CMS”,
“Part ” or “Seller” and CMS ENERGY CORPORATION (“CMS Corp” or “
arty”, together with Seller and Purchaser, “Parties”) in connection with the Share
Purchase Agreement dated as of April 12, 2007 (“ ment”) by and among the Parties and CMS ENERGY
BRASIL S.A. Unless the context otherwise requires, all capitalized terms used in this Purchaser
Disclosure Letter shall have the respective meanings assigned to them in the Agreement.

     The contents of this Purchaser Disclosure Letter are qualified in their entirety by reference
to specific provisions of the Agreement, and are not intended to constitute, and shall not be
construed as constituting any representation or warranties of Purchaser, except as and to the
extent provided in the Agreement.

     Nothing in this Purchaser Disclosure Letter shall constitute and admission that any
information disclosed, set forth or incorporated by reference in this Purchaser Disclosure Letter,
either individually or in the aggregate, is material or would result in a Purchaser Material
Adverse Effect. No disclosure made in this Purchaser Disclosure Letter (i) shall be deemed to
modify in any respect the standard of materiality or any other standard for disclosure set forth in
the Agreement or (ii) relating to any possible breach or violation of any agreement, contract, Law
or Governmental Order shall be construed as an admission or indication that any such breach or
violation exists or has actually occurred.

     Notwithstanding anything to the contrary contained in this Purchaser Disclosure Letter or in
the Agreement, the information and disclosures contained in each schedule hereto shall be

 

 

deemed to be disclosed and incorporated by reference in each of the other schedules hereto as
though fully set forth in such other schedules.

     Headings have been inserted herein for convenience of reference only and shall to no extend
have the effect of amending or changing express descriptions of the Sections of the Agreement.

Schedule 4.2(b)

None.

Schedule 4.2(d)

1. ANEEL — According to the Section 27 of Federal Law No. 8,987, of February 13, 1995 (the
Brazilian Law on Public Concessions), any change of control of concessionaries (including
distribution and generation companies) or companies authorized to render public services
(commercialization companies) in Brazil must be submitted for prior approval with the Brazilian
National Electricity Agency (AgMcia Nacional de Energia Eletrica) — ANEEL. The respective
application filed with ANEEL must be submitted along with all documentation necessary to evidence
the legal existence, as well as the financial, operational and technical capacity of such applicant
to assume all obligations under a concession contract.

2. CADE — According to Section 54 of Federal Law No. 8,884, of June 11, 1994 (the Brazilian
Antitrust Law), any acts or transactions capable of hindering or affecting competition in any
manner as well as all acts resulting in the concentration of a relevant market share in Brazil
shall be presented to CADE — Administrative Council for Economic Defense (Conselho Administrativo
de Defesa Economics) for its analysis and approval. All acts of concentration, whether or not
against the economic order shall be submitted to CADE for examination. Brazilian law requires that
any type of agreement or arrangement be submitted to the anti-trust agencies, if (a) the
consummation contemplated in any such agreement or arrangement of transactions result in the
control of a market share in excess of twenty percent (20%) of a given market; or (b) any of the
entities involved in the transaction or the respective “group of companies” to which they belong
(including the resulting entity or combined transaction) has gross revenues during the preceding
fiscal year equal to or in excess of R$400,000,000. The filing must be done, in this transaction,
within 15 Business Days after the date of the execution of the Agreement.

3. CVM — According to the Paragraph 2 of the Section 254-A of the Federal Law No. 6,404, as of
December 15, 1976, as amended by the Federal Law No. 10,303, as o£ October 31, 2001 (the Brazilian
Law on Corporations), any transfer of control of a registered company shall be approved by the
Brazilian Securities Commission as long as the conditions of the public offer comply with the
applicable legal requirements.

 

 

Schedule 4.4

None.

Schedule 9.2(c)

Purchaser Knowledge Group

Wilson P. Ferreira Junior

Reni Antonio da Silva

Jose Antonio de Almeida Filippo

Sergio de Britto Pereira Figueira

 

 

Schedule 5.1(a)

Conduct of the Company

None.

 

 

Schedule 5.1(d)

Conduct of the Company

CMS GROUP — CONSOLIDATED

CAPEX — FORECAST — 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Code	 	Item	 	Project	 	Sub code	 	Expenditure	 	Year to date
	 
	 	A1.	 	 	 	 	 	 	Group 1 — New Customer Connections
	 	 	 	 	 	 	3,468	 	 	 	342	 
	 	A1.	 	 	 	1	 	 	Consumers connection lines
	 	 	A1.1	 	 	 	542	 	 	 	83	 
	 	A1.	 	 	 	2	 	 	Consumers electricity meters
	 	 	A1.2	 	 	 	1,554	 	 	 	149	 
	 	A1.	 	 	 	3	 	 	Metering equipment — CT and PT
	 	 	A1.3	 	 	 	46	 	 	 	2	 
	 	A1.	 	 	 	4	 	 	Grid extension
	 	 	A1.4	 	 	 	1,326	 	 	 	108	 
	 
	 	B2.	 	 	 	 	 	 	Group 2 — Capacity Increases
	 	 	 	 	 	 	7,823	 	 	 	119	 
	 	B2.	 	 	 	1	 	 	15 Kv Overloaded Distribution Transformers Substitution
	 	 	B2.1	 	 	 	108	 	 	 	3	 
	 	B2.	 	 	 	2	 	 	Power Quality Adjustment Projects
	 	 	B2.2	 	 	 	557	 	 	 	83	 
	 	B2.	 	 	 	3	 	 	Cables Reinforcement
	 	 	B2.3	 	 	 	238	 	 	 	19	 
	 	B2.	 	 	 	4	 	 	15/34,5 Kv Distribution Nets Construction
	 	 	B2.4	 	 	 	260	 	 	 	—	 
	 	B2.	 	 	 	5	 	 	Transmission Lines Construction
	 	 	B2.5	 	 	 	1,150	 	 	 	—	 
	 	B2.	 	 	 	6	 	 	Substations Construction and Amplification
	 	 	B2.6	 	 	 	4,000	 	 	 	—	 
	 	B2.	 	 	 	7	 	 	Power Generation Plants Construction and Amplification
	 	 	B2.7	 	 	 	1,100	 	 	 	—	 
	 	B2.	 	 	 	8	 	 	Power Regulators Installation
	 	 	B2.8	 	 	 	216	 	 	 	14	 
	 	B2.	 	 	 	9	 	 	Installation Capacitors
	 	 	B2.9	 	 	 	194	 	 	 	—	 
	 
	 	C3.	 	 	 	 	 	 	Group 3 — Government & CMS mandates
	 	 	 	 	 	 	7,296	 	 	 	932	 
	 	C3.	 	 	 	1	 	 	Governmental Programs Projects
	 	 	C3.1	 	 	 	96	 	 	 	—	 
	 	C3.	 	 	 	2	 	 	Brazilian Electrification Program — Universalization
	 	 	C3.2	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	3	 	 	Energy Purchase Measurement System
	 	 	C3.3	 	 	 	—	 	 	 	6	 
	 	C3.	 	 	 	4	 	 	Relays for the ERAC
	 	 	C3.4	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	5	 	 	LPT Project
	 	 	C3.5	 	 	 	6,600	 	 	 	926	 
	 	C3.	 	 	 	6	 	 	Distribution Grid Incorporation
	 	 	C3.6	 	 	 	600	 	 	 	—	 
	 
	 	D4.	 	 	 	 	 	 	Group 4 — Emergencies
	 	 	 	 	 	 	447	 	 	 	128	 
	 	D4.	 	 	 	1	 	 	15/34,5 kV Damaged Equipment’s Substitution
	 	 	D4.1	 	 	 	145	 	 	 	21	 
	 	D4.	 	 	 	2	 	 	Burned Transformators Substitution
	 	 	D4.2	 	 	 	232	 	 	 	107	 
	 	D4.	 	 	 	3	 	 	Assets Substitution
	 	 	D4.3	 	 	 	70	 	 	 	—	 
	 
	 	E5.	 	 	 	 	 	 	Group 5 — Replacement of Assets
	 	 	 	 	 	 	5,702	 	 	 	364	 
	 	E5.	 	 	 	1	 	 	Poles Substitution
	 	 	E5.1	 	 	 	969	 	 	 	104	 
	 	E5.	 	 	 	2	 	 	Cables Substitution
	 	 	E5.2	 	 	 	—	 	 	 	4	 
	 	E5.	 	 	 	3	 	 	Lines Equipment’s Substitution
	 	 	E5.3	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	4	 	 	Substations Equipment’s Substitution
	 	 	E5.4	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	5	 	 	Power Generation Plants Equipment’s Substitution
	 	 	E5.5	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	6	 	 	Meters Substitution
	 	 	E5.6	 	 	 	649	 	 	 	211	 
	 	E5.	 	 	 	7	 	 	Civil Construction Projects
	 	 	E5.7	 	 	 	261	 	 	 	9	 
	 	E5.	 	 	 	8	 	 	Vehicles
	 	 	E5.8	 	 	 	1,782	 	 	 	12	 
	 	E5.	 	 	 	9	 	 	Information Technologies — Hardware e Software
	 	 	E5.9	 	 	 	2,041	 	 	 	15	 
	 	E5.	 	 	 	10	 	 	Voice Net
	 	 	E5.10	 	 	 	—	 	 	 	5	 
	 	E5.	 	 	 	11	 	 	Data Net
	 	 	E5.11	 	 	 	—	 	 	 	6	 
	 
	 	F6.	 	 	 	 	 	 	Group 6 — Performance Improvements
	 	 	 	 	 	 	1,112	 	 	 	242	 
	 	F6.	 	 	 	1	 	 	15/34,5 Kv Distribution Nets Improvements
	 	 	F6.1	 	 	 	229	 	 	 	42	 
	 	F6.	 	 	 	2	 	 	15/34,5 Kv Distribution Nets Operative Flexibility Projects
	 	 	F6.2	 	 	 	—	 	 	 	3	 
	 	F6.	 	 	 	3	 	 	15/34,5 kV Reclosing Installations
	 	 	F6.3	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	4	 	 	Regularization Distribution Nets and Lines
	 	 	F6.4	 	 	 	385	 	 	 	7	 
	 	F6.	 	 	 	5	 	 	15/34,5 Kv Switches Installations and Substitutions
	 	 	F6.5	 	 	 	189	 	 	 	58	 
	 	F6.	 	 	 	6	 	 	Supervision and Automation
	 	 	F6.6	 	 	 	229	 	 	 	132	 
	 	F6.	 	 	 	7	 	 	Measurements Instruments and Tools
	 	 	F6.7	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	8	 	 	Safety Equipment’s
	 	 	F6.8	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	9	 	 	Substations Improvements
	 	 	F6.9	 	 	 	80	 	 	 	—	 
	 	F6.	 	 	 	10	 	 	Power Generation Plants Improvements
	 	 	F6.10	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	11	 	 	New Technologies
	 	 	F6.11	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	Total  — CapEx — 2007
	 	 	 	 	 	 	25,848	 	 	 	2,127	 
	 
	 	 	 	 	 	 	 	 	CMS Equipamentos
	 	 	 	 	 	 	1,347	 	 	 	47	 
	 
	 	 	 	 	 	 	 	 	GROUP CAPEX — 2007
	 	 	 	 	 	 	27,195	 	 	 	2,174	 
	 

 

 

COMPANHIA PAULISTA DE ENERGIA ELÉTRICA

CAPEX — FORECAST — 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Code	 	Item	 	Project	 	Sub code	 	Expenditure	 	Year to date
	 
	 	A1.	 	 	 	 	 	 	Group 1 — New Customer Connections
	 	 	 	 	 	 	833	 	 	 	132	 
	 	A1.	 	 	 	1	 	 	Consumers connection lines
	 	 	A1.1	 	 	 	141	 	 	 	29	 
	 	A1.	 	 	 	2	 	 	Consumers electricity meters
	 	 	A1.2	 	 	 	462	 	 	 	61	 
	 	A1.	 	 	 	3	 	 	Metering equipment — CT and PT
	 	 	A1.3	 	 	 	5	 	 	 	1	 
	 	A1.	 	 	 	4	 	 	Grid extension
	 	 	A1.4	 	 	 	225	 	 	 	42	 
	 
	 	B2.	 	 	 	 	 	 	Group 2 — Capacity Increases
	 	 	 	 	 	 	2,810	 	 	 	78	 
	 	B2.	 	 	 	1	 	 	15 Kv Overloaded Distribution Transformers Substitution
	 	 	B2.1	 	 	 	18	 	 	 	—	 
	 	B2.	 	 	 	2	 	 	Power Quality Adjustment Projects
	 	 	B2.2	 	 	 	375	 	 	 	64	 
	 	B2.	 	 	 	3	 	 	Cables Reinforcement
	 	 	B2.3	 	 	 	74	 	 	 	—	 
	 	B2.	 	 	 	4	 	 	15/34,5 Kv Distribution Nets Construction
	 	 	B2.4	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	5	 	 	Transmission Lines Construction
	 	 	B2.5	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	6	 	 	Substations Construction and Amplification
	 	 	B2.6	 	 	 	1,100	 	 	 	—	 
	 	B2.	 	 	 	7	 	 	Power Generation Plants Construction and Amplification
	 	 	B2.7	 	 	 	1,100	 	 	 	—	 
	 	B2.	 	 	 	8	 	 	Power Regulators Installation
	 	 	B2.8	 	 	 	108	 	 	 	14	 
	 	B2.	 	 	 	9	 	 	Installation Capacitors
	 	 	B2.9	 	 	 	35	 	 	 	—	 
	 
	 	C3.	 	 	 	 	 	 	Group 3 — Government & CMS mandates
	 	 	 	 	 	 	2,970	 	 	 	145	 
	 	C3.	 	 	 	1	 	 	Governmental Programs Projects
	 	 	C3.1	 	 	 	31	 	 	 	—	 
	 	C3.	 	 	 	2	 	 	Brazilian Electrification Program — Universalization
	 	 	C3.2	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	3	 	 	Energy Purchase Measurement System
	 	 	C3.3	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	4	 	 	Relays for the ERAC
	 	 	C3.4	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	5	 	 	LPT Project
	 	 	C3.5	 	 	 	2,690	 	 	 	145	 
	 	C3.	 	 	 	6	 	 	Distribution Grid Incorporation
	 	 	C3.6	 	 	 	250	 	 	 	—	 
	 
	 	D4.	 	 	 	 	 	 	Group 4 — Emergencies
	 	 	 	 	 	 	90	 	 	 	38	 
	 	D4.	 	 	 	1	 	 	15/34,5 kV Damaged Equipment’s Substitution
	 	 	D4.1	 	 	 	44	 	 	 	—	 
	 	D4.	 	 	 	2	 	 	Burned Transformators Substitution
	 	 	D4.2	 	 	 	45	 	 	 	38	 
	 	D4.	 	 	 	3	 	 	Assets Substitution
	 	 	D4.3	 	 	 	—	 	 	 	—	 
	 
	 	E5.	 	 	 	 	 	 	Group 5 — Replacement of Assets
	 	 	 	 	 	 	1,476	 	 	 	145	 
	 	E5.	 	 	 	1	 	 	Poles Substitution
	 	 	E5.1	 	 	 	275	 	 	 	35	 
	 	E5.	 	 	 	2	 	 	Cables Substitution
	 	 	E5.2	 	 	 	—	 	 	 	1	 
	 	E5.	 	 	 	3	 	 	Lines Equipment’s Substitution
	 	 	E5.3	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	4	 	 	Substations Equipment’s Substitution
	 	 	E5.4	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	5	 	 	Power Generation Plants Equipment’s Substitution
	 	 	E5.5	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	6	 	 	Meters Substitution
	 	 	E5.6	 	 	 	164	 	 	 	92	 
	 	E5.	 	 	 	7	 	 	Civil Construction Projects
	 	 	E5.7	 	 	 	87	 	 	 	7	 
	 	E5.	 	 	 	8	 	 	Vehicles
	 	 	E5.8	 	 	 	565	 	 	 	1	 
	 	E5.	 	 	 	9	 	 	Information Technologies — Hardware e Software
	 	 	E5.9	 	 	 	385	 	 	 	8	 
	 	E5.	 	 	 	10	 	 	Voice Net
	 	 	E5.10	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	11	 	 	Data Net
	 	 	E5.11	 	 	 	—	 	 	 	—	 
	 
	 	F6.	 	 	 	 	 	 	Group 6 — Performance Improvements
	 	 	 	 	 	 	296	 	 	 	19	 
	 	F6.	 	 	 	1	 	 	15/34,5 Kv Distribution Nets Improvements
	 	 	F6.1	 	 	 	60	 	 	 	—	 
	 	F6.	 	 	 	2	 	 	15/34,5 Kv Distribution Nets Operative Flexibility Projects
	 	 	F6.2	 	 	 	—	 	 	 	1	 
	 	F6.	 	 	 	3	 	 	15/34,5 kV Reclosing Installations
	 	 	F6.3	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	4	 	 	Regularization Distribution Nets and Lines
	 	 	F6.4	 	 	 	91	 	 	 	2	 
	 	F6.	 	 	 	5	 	 	15/34,5 Kv Switches Installations and Substitutions
	 	 	F6.5	 	 	 	55	 	 	 	16	 
	 	F6.	 	 	 	6	 	 	Supervision and Automation
	 	 	F6.6	 	 	 	70	 	 	 	—	 
	 	F6.	 	 	 	7	 	 	Measurements Instruments and Tools
	 	 	F6.7	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	8	 	 	Safety Equipment’s
	 	 	F6.8	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	9	 	 	Substations Improvements
	 	 	F6.9	 	 	 	20	 	 	 	—	 
	 	F6.	 	 	 	10	 	 	Power Generation Plants Improvements
	 	 	F6.10	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	11	 	 	New Technologies
	 	 	F6.11	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	Total  — CapEx — 2007
	 	 	 	 	 	 	8,475	 	 	 	558	 
	 

 

 

COMPANHIA SUL PAULISTA DE ENERGIA

CAPEX — FORECAST — 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Code	 	Item	 	Project	 	Sub code	 	Expenditure	 	Year to date
	 
	 	A1.	 	 	 	 	 	 	Group 1 — New Customer Connections
	 	 	 	 	 	 	1,510	 	 	 	71	 
	 	A1.	 	 	 	1	 	 	Consumers connection lines
	 	 	A1.1	 	 	 	205	 	 	 	21	 
	 	A1.	 	 	 	2	 	 	Consumers electricity meters
	 	 	A1.2	 	 	 	565	 	 	 	15	 
	 	A1.	 	 	 	3	 	 	Metering equipment — CT and PT
	 	 	A1.3	 	 	 	13	 	 	 	—	 
	 	A1.	 	 	 	4	 	 	Grid extension
	 	 	A1.4	 	 	 	728	 	 	 	35	 
	 
	 	B2.	 	 	 	 	 	 	Group 2 — Capacity Increases
	 	 	 	 	 	 	1,458	 	 	 	3	 
	 	B2.	 	 	 	1	 	 	15 Kv Overloaded Distribution Transformers Substitution
	 	 	B2.1	 	 	 	39	 	 	 	3	 
	 	B2.	 	 	 	2	 	 	Power Quality Adjustment Projects
	 	 	B2.2	 	 	 	58	 	 	 	0	 
	 	B2.	 	 	 	3	 	 	Cables Reinforcement
	 	 	B2.3	 	 	 	78	 	 	 	—	 
	 	B2.	 	 	 	4	 	 	15/34,5 Kv Distribution Nets Construction
	 	 	B2.4	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	5	 	 	Transmission Lines Construction
	 	 	B2.5	 	 	 	1,150	 	 	 	—	 
	 	B2.	 	 	 	6	 	 	Substations Construction and Amplification
	 	 	B2.6	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	7	 	 	Power Generation Plants Construction and Amplification
	 	 	B2.7	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	8	 	 	Power Regulators Installation
	 	 	B2.8	 	 	 	108	 	 	 	—	 
	 	B2.	 	 	 	9	 	 	Installation Capacitors
	 	 	B2.9	 	 	 	24	 	 	 	—	 
	 
	 	C3.	 	 	 	 	 	 	Group 3 — Government & CMS mandates
	 	 	 	 	 	 	3,190	 	 	 	595	 
	 	C3.	 	 	 	1	 	 	Governmental Programs Projects
	 	 	C3.1	 	 	 	30	 	 	 	—	 
	 	C3.	 	 	 	2	 	 	Brazilian Electrification Program — Universalization
	 	 	C3.2	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	3	 	 	Energy Purchase Measurement System
	 	 	C3.3	 	 	 	—	 	 	 	6	 
	 	C3.	 	 	 	4	 	 	Relays for the ERAC
	 	 	C3.4	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	5	 	 	LPT Project
	 	 	C3.5	 	 	 	3,069	 	 	 	589	 
	 	C3.	 	 	 	6	 	 	Distribution Grid Incorporation
	 	 	C3.6	 	 	 	90	 	 	 	—	 
	 
	 	D4.	 	 	 	 	 	 	Group 4 — Emergencies
	 	 	 	 	 	 	141	 	 	 	42	 
	 	D4.	 	 	 	1	 	 	15/34,5 kV Damaged Equipment’s Substitution
	 	 	D4.1	 	 	 	26	 	 	 	—	 
	 	D4.	 	 	 	2	 	 	Burned Transformators Substitution
	 	 	D4.2	 	 	 	114	 	 	 	42	 
	 	D4.	 	 	 	3	 	 	Assets Substitution
	 	 	D4.3	 	 	 	—	 	 	 	—	 
	 
	 	E5.	 	 	 	 	 	 	Group 5 — Replacement of Assets
	 	 	 	 	 	 	1,513	 	 	 	100	 
	 	E5.	 	 	 	1	 	 	Poles Substitution
	 	 	E5.1	 	 	 	525	 	 	 	45	 
	 	E5.	 	 	 	2	 	 	Cables Substitution
	 	 	E5.2	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	3	 	 	Lines Equipment’s Substitution
	 	 	E5.3	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	4	 	 	Substations Equipment’s Substitution
	 	 	E5.4	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	5	 	 	Power Generation Plants Equipment’s Substitution
	 	 	E5.5	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	6	 	 	Meters Substitution
	 	 	E5.6	 	 	 	175	 	 	 	38	 
	 	E5.	 	 	 	7	 	 	Civil Construction Projects
	 	 	E5.7	 	 	 	37	 	 	 	—	 
	 	E5.	 	 	 	8	 	 	Vehicles
	 	 	E5.8	 	 	 	391	 	 	 	4	 
	 	E5.	 	 	 	9	 	 	Information Technologies — Hardware e Software
	 	 	E5.9	 	 	 	385	 	 	 	5	 
	 	E5.	 	 	 	10	 	 	Voice Net
	 	 	E5.10	 	 	 	—	 	 	 	5	 
	 	E5.	 	 	 	11	 	 	Data Net
	 	 	E5.11	 	 	 	—	 	 	 	3	 
	 
	 	F6.	 	 	 	 	 	 	Group 6 — Performance Improvements
	 	 	 	 	 	 	313	 	 	 	153	 
	 	F6.	 	 	 	1	 	 	15/34,5 Kv Distribution Nets Improvements
	 	 	F6.1	 	 	 	63	 	 	 	39	 
	 	F6.	 	 	 	2	 	 	15/34,5 Kv Distribution Nets Operative Flexibility Projects
	 	 	F6.2	 	 	 	—	 	 	 	1	 
	 	F6.	 	 	 	3	 	 	15/34,5 kV Reclosing Installations
	 	 	F6.3	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	4	 	 	Regularization Distribution Nets and Lines
	 	 	F6.4	 	 	 	97	 	 	 	4	 
	 	F6.	 	 	 	5	 	 	15/34,5 Kv Switches Installations and Substitutions
	 	 	F6.5	 	 	 	59	 	 	 	16	 
	 	F6.	 	 	 	6	 	 	Supervision and Automation
	 	 	F6.6	 	 	 	74	 	 	 	94	 
	 	F6.	 	 	 	7	 	 	Measurements Instruments and Tools
	 	 	F6.7	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	8	 	 	Safety Equipment’s
	 	 	F6.8	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	9	 	 	Substations Improvements
	 	 	F6.9	 	 	 	20	 	 	 	—	 
	 	F6.	 	 	 	10	 	 	Power Generation Plants Improvements
	 	 	F6.10	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	11	 	 	New Technologies
	 	 	F6.11	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	Total  — CapEx — 2007
	 	 	 	 	 	 	8,125	 	 	 	964	 
	 

 

 

COMPANHIA JAGUARI DE ENERGIA

CAPEX — FORECAST — 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Code	 	Item	 	Project	 	Sub code	 	Expenditure	 	Year to date
	 
	 	A1.	 	 	 	 	 	 	Group 1 — New Customer Connections
	 	 	 	 	 	 	557	 	 	 	70	 
	 	A1.	 	 	 	1	 	 	Consumers connection lines
	 	 	A1.1	 	 	 	99	 	 	 	18	 
	 	A1.	 	 	 	2	 	 	Consumers electricity meters
	 	 	A1.2	 	 	 	272	 	 	 	38	 
	 	A1.	 	 	 	3	 	 	Metering equipment — CT and PT
	 	 	A1.3	 	 	 	18	 	 	 	—	 
	 	A1.	 	 	 	4	 	 	Grid extension
	 	 	A1.4	 	 	 	167	 	 	 	14	 
	 
	 	B2.	 	 	 	 	 	 	Group 2 — Capacity Increases
	 	 	 	 	 	 	365	 	 	 	26	 
	 	B2.	 	 	 	1	 	 	15 Kv Overloaded Distribution Transformers Substitution
	 	 	B2.1	 	 	 	33	 	 	 	—	 
	 	B2.	 	 	 	2	 	 	Power Quality Adjustment Projects
	 	 	B2.2	 	 	 	44	 	 	 	18	 
	 	B2.	 	 	 	3	 	 	Cables Reinforcement
	 	 	B2.3	 	 	 	43	 	 	 	8	 
	 	B2.	 	 	 	4	 	 	15/34,5 Kv Distribution Nets Construction
	 	 	B2.4	 	 	 	160	 	 	 	—	 
	 	B2.	 	 	 	5	 	 	Transmission Lines Construction
	 	 	B2.5	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	6	 	 	Substations Construction and Amplification
	 	 	B2.6	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	7	 	 	Power Generation Plants Construction and Amplification
	 	 	B2.7	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	8	 	 	Power Regulators Installation
	 	 	B2.8	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	9	 	 	Installation Capacitors
	 	 	B2.9	 	 	 	85	 	 	 	—	 
	 
	 	C3.	 	 	 	 	 	 	Group 3 — Government & CMS mandates
	 	 	 	 	 	 	104	 	 	 	20	 
	 	C3.	 	 	 	1	 	 	Governmental Programs Projects
	 	 	C3.1	 	 	 	11	 	 	 	—	 
	 	C3.	 	 	 	2	 	 	Brazilian Electrification Program — Universalization
	 	 	C3.2	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	3	 	 	Energy Purchase Measurement System
	 	 	C3.3	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	4	 	 	Relays for the ERAC
	 	 	C3.4	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	5	 	 	LPT Project
	 	 	C3.5	 	 	 	89	 	 	 	20	 
	 	C3.	 	 	 	6	 	 	Distribution Grid Incorporation
	 	 	C3.6	 	 	 	3	 	 	 	—	 
	 
	 	D4.	 	 	 	 	 	 	Group 4 — Emergencies
	 	 	 	 	 	 	144	 	 	 	28	 
	 	D4.	 	 	 	1	 	 	15/34,5 kV Damaged Equipment’s Substitution
	 	 	D4.1	 	 	 	31	 	 	 	21	 
	 	D4.	 	 	 	2	 	 	Burned Transformators Substitution
	 	 	D4.2	 	 	 	43	 	 	 	7	 
	 	D4.	 	 	 	3	 	 	Assets Substitution
	 	 	D4.3	 	 	 	70	 	 	 	—	 
	 
	 	E5.	 	 	 	 	 	 	Group 5 — Replacement of Assets
	 	 	 	 	 	 	1,644	 	 	 	54	 
	 	E5.	 	 	 	1	 	 	Poles Substitution
	 	 	E5.1	 	 	 	154	 	 	 	21	 
	 	E5.	 	 	 	2	 	 	Cables Substitution
	 	 	E5.2	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	3	 	 	Lines Equipment’s Substitution
	 	 	E5.3	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	4	 	 	Substations Equipment’s Substitution
	 	 	E5.4	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	5	 	 	Power Generation Plants Equipment’s Substitution
	 	 	E5.5	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	6	 	 	Meters Substitution
	 	 	E5.6	 	 	 	148	 	 	 	28	 
	 	E5.	 	 	 	7	 	 	Civil Construction Projects
	 	 	E5.7	 	 	 	52	 	 	 	1	 
	 	E5.	 	 	 	8	 	 	Vehicles
	 	 	E5.8	 	 	 	405	 	 	 	3	 
	 	E5.	 	 	 	9	 	 	Information Technologies — Hardware e Software
	 	 	E5.9	 	 	 	885	 	 	 	(3	)
	 	E5.	 	 	 	10	 	 	Voice Net
	 	 	E5.10	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	11	 	 	Data Net
	 	 	E5.11	 	 	 	—	 	 	 	3	 
	 
	 	F6.	 	 	 	 	 	 	Group 6 — Performance Improvements
	 	 	 	 	 	 	238	 	 	 	64	 
	 	F6.	 	 	 	1	 	 	15/34,5 Kv Distribution Nets Improvements
	 	 	F6.1	 	 	 	46	 	 	 	4	 
	 	F6.	 	 	 	2	 	 	15/34,5 Kv Distribution Nets Operative Flexibility Projects
	 	 	F6.2	 	 	 	—	 	 	 	1	 
	 	F6.	 	 	 	3	 	 	15/34,5 kV Reclosing Installations
	 	 	F6.3	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	4	 	 	Regularization Distribution Nets and Lines
	 	 	F6.4	 	 	 	108	 	 	 	0	 
	 	F6.	 	 	 	5	 	 	15/34,5 Kv Switches Installations and Substitutions
	 	 	F6.5	 	 	 	38	 	 	 	22	 
	 	F6.	 	 	 	6	 	 	Supervision and Automation
	 	 	F6.6	 	 	 	26	 	 	 	37	 
	 	F6.	 	 	 	7	 	 	Measurements Instruments and Tools
	 	 	F6.7	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	8	 	 	Safety Equipment’s
	 	 	F6.8	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	9	 	 	Substations Improvements
	 	 	F6.9	 	 	 	20	 	 	 	—	 
	 	F6.	 	 	 	10	 	 	Power Generation Plants Improvements
	 	 	F6.10	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	11	 	 	New Technologies
	 	 	F6.11	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	Total  — CapEx — 2007
	 	 	 	 	 	 	3,051	 	 	 	263	 
	 

 

 

COMPANHIA LUZ E FORÇA DE MOCOCA

CAPEX — FORECAST — 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Code	 	Item	 	Project	 	Sub code	 	Expenditure	 	Year to date
	 
	 	A1.	 	 	 	 	 	 	Group 1 — New Customer Connections
	 	 	 	 	 	 	568	 	 	 	68	 
	 	A1.	 	 	 	1	 	 	Consumers connection lines
	 	 	A1.1	 	 	 	98	 	 	 	15	 
	 	A1.	 	 	 	2	 	 	Consumers electricity meters
	 	 	A1.2	 	 	 	256	 	 	 	35	 
	 	A1.	 	 	 	3	 	 	Metering equipment — CT and PT
	 	 	A1.3	 	 	 	9	 	 	 	1	 
	 	A1.	 	 	 	4	 	 	Grid extension
	 	 	A1.4	 	 	 	206	 	 	 	17	 
	 
	 	B2.	 	 	 	 	 	 	Group 2 — Capacity Increases
	 	 	 	 	 	 	3,190	 	 	 	11	 
	 	B2.	 	 	 	1	 	 	15 Kv Overloaded Distribution Transformers Substitution
	 	 	B2.1	 	 	 	18	 	 	 	—	 
	 	B2.	 	 	 	2	 	 	Power Quality Adjustment Projects
	 	 	B2.2	 	 	 	80	 	 	 	—	 
	 	B2.	 	 	 	3	 	 	Cables Reinforcement
	 	 	B2.3	 	 	 	42	 	 	 	11	 
	 	B2.	 	 	 	4	 	 	15/34,5 Kv Distribution Nets Construction
	 	 	B2.4	 	 	 	100	 	 	 	—	 
	 	B2.	 	 	 	5	 	 	Transmission Lines Construction
	 	 	B2.5	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	6	 	 	Substations Construction and Amplification
	 	 	B2.6	 	 	 	2,900	 	 	 	—	 
	 	B2.	 	 	 	7	 	 	Power Generation Plants Construction and Amplification
	 	 	B2.7	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	8	 	 	Power Regulators Installation
	 	 	B2.8	 	 	 	—	 	 	 	—	 
	 	B2.	 	 	 	9	 	 	Installation Capacitors
	 	 	B2.9	 	 	 	50	 	 	 	—	 
	 
	 	C3.	 	 	 	 	 	 	Group 3 — Government & CMS mandates
	 	 	 	 	 	 	1,033	 	 	 	172	 
	 	C3.	 	 	 	1	 	 	Governmental Programs Projects
	 	 	C3.1	 	 	 	23	 	 	 	—	 
	 	C3.	 	 	 	2	 	 	Brazilian Electrification Program — Universalization
	 	 	C3.2	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	3	 	 	Energy Purchase Measurement System
	 	 	C3.3	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	4	 	 	Relays for the ERAC
	 	 	C3.4	 	 	 	—	 	 	 	—	 
	 	C3.	 	 	 	5	 	 	LPT Project
	 	 	C3.5	 	 	 	752	 	 	 	172	 
	 	C3.	 	 	 	6	 	 	Distribution Grid Incorporation
	 	 	C3.6	 	 	 	258	 	 	 	—	 
	 
	 	D4.	 	 	 	 	 	 	Group 4 — Emergencies
	 	 	 	 	 	 	73	 	 	 	19	 
	 	D4.	 	 	 	1	 	 	15/34,5 kV Damaged Equipment’s Substitution
	 	 	D4.1	 	 	 	44	 	 	 	—	 
	 	D4.	 	 	 	2	 	 	Burned Transformators Substitution
	 	 	D4.2	 	 	 	30	 	 	 	19	 
	 	D4.	 	 	 	3	 	 	Assets Substitution
	 	 	D4.3	 	 	 	—	 	 	 	—	 
	 
	 	E5.	 	 	 	 	 	 	Group 5 — Replacement of Assets
	 	 	 	 	 	 	1,069	 	 	 	66	 
	 	E5.	 	 	 	1	 	 	Poles Substitution
	 	 	E5.1	 	 	 	16	 	 	 	2	 
	 	E5.	 	 	 	2	 	 	Cables Substitution
	 	 	E5.2	 	 	 	—	 	 	 	3	 
	 	E5.	 	 	 	3	 	 	Lines Equipment’s Substitution
	 	 	E5.3	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	4	 	 	Substations Equipment’s Substitution
	 	 	E5.4	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	5	 	 	Power Generation Plants Equipment’s Substitution
	 	 	E5.5	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	6	 	 	Meters Substitution
	 	 	E5.6	 	 	 	162	 	 	 	52	 
	 	E5.	 	 	 	7	 	 	Civil Construction Projects
	 	 	E5.7	 	 	 	85	 	 	 	—	 
	 	E5.	 	 	 	8	 	 	Vehicles
	 	 	E5.8	 	 	 	421	 	 	 	4	 
	 	E5.	 	 	 	9	 	 	Information Technologies — Hardware e Software
	 	 	E5.9	 	 	 	385	 	 	 	5	 
	 	E5.	 	 	 	10	 	 	Voice Net
	 	 	E5.10	 	 	 	—	 	 	 	—	 
	 	E5.	 	 	 	11	 	 	Data Net
	 	 	E5.11	 	 	 	—	 	 	 	—	 
	 
	 	F6.	 	 	 	 	 	 	Group 6 — Performance Improvements
	 	 	 	 	 	 	264	 	 	 	6	 
	 	F6.	 	 	 	1	 	 	15/34,5 Kv Distribution Nets Improvements
	 	 	F6.1	 	 	 	59	 	 	 	—	 
	 	F6.	 	 	 	2	 	 	15/34,5 Kv Distribution Nets Operative Flexibility Projects
	 	 	F6.2	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	3	 	 	15/34,5 kV Reclosing Installations
	 	 	F6.3	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	4	 	 	Regularization Distribution Nets and Lines
	 	 	F6.4	 	 	 	89	 	 	 	1	 
	 	F6.	 	 	 	5	 	 	15/34,5 Kv Switches Installations and Substitutions
	 	 	F6.5	 	 	 	37	 	 	 	4	 
	 	F6.	 	 	 	6	 	 	Supervision and Automation
	 	 	F6.6	 	 	 	59	 	 	 	1	 
	 	F6.	 	 	 	7	 	 	Measurements Instruments and Tools
	 	 	F6.7	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	8	 	 	Safety Equipment’s
	 	 	F6.8	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	9	 	 	Substations Improvements
	 	 	F6.9	 	 	 	20	 	 	 	—	 
	 	F6.	 	 	 	10	 	 	Power Generation Plants Improvements
	 	 	F6.10	 	 	 	—	 	 	 	—	 
	 	F6.	 	 	 	11	 	 	New Technologies
	 	 	F6.11	 	 	 	—	 	 	 	—	 
	 
	 	 	 	 	 	 	 	 	Total  — CapEx — 2007
	 	 	 	 	 	 	6,198	 	 	 	342	 
	 

 

 

CMS ENERGY EQUIPAMENTOS SERVIÇOS INDUSTRIA E COMÉRCIO S/A

CAPEX - FORECAST - 2007 (2+10)

(Expressed in R$ ‘000)

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Item	 	Project	 	Expenditure	 	Year to date
	 
	 	 	 	 	DISTRIBUTION TRANSFORMER (GROUP TD)
	 	 	36	 	 	 	2	 
	 	1	 	 	General Tools
	 	 	23	 	 	 	2	 
	 	2	 	 	Industrial Automation
	 	 	13	 	 	 	0	 
	 
	 	 	 	 	POWER TRANSFORMER
	 	 	25	 	 	 	1	 
	 	1	 	 	General Tools
	 	 	25	 	 	 	1	 
	 	2	 	 	Pressured room for manuntence 138KV transformer
	 	 	0	 	 	 	0	 
	 
	 	 	 	 	SUBSTATION CREW
	 	 	33	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	33	 	 	 	0	 
	 
	 	 	 	 	GENERATION CREW
	 	 	9	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	9	 	 	 	0	 
	 
	 	 	 	 	EXTERNAL SERVICES
	 	 	128	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	28	 	 	 	0	 
	 	2	 	 	Truck (new acquisition)
	 	 	100	 	 	 	0	 
	 
	 	 	 	 	MOCOCA CREWS
	 	 	97	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	17	 	 	 	0	 
	 	2	 	 	Truck and equipament (new acquisition)
	 	 	60	 	 	 	0	 
	 	3	 	 	General Tools (Energized Line)
	 	 	11	 	 	 	0	 
	 	4	 	 	Reformation of the body car (Energized Line)
	 	 	9	 	 	 	0	 
	 
	 	 	 	 	SÃO JOSÉ DO RIO PARDO CREWS
	 	 	39	 	 	 	2	 
	 	1	 	 	General Tools
	 	 	17	 	 	 	2	 
	 	2	 	 	Reformation of the body car (backup truck)
	 	 	11	 	 	 	0	 
	 	3	 	 	General Tools (Energized Line)
	 	 	11	 	 	 	0	 
	 	4	 	 	Truck and equipament (new acquisition)
	 	 	0	 	 	 	0	 
	 
	 	 	 	 	JAGUARIÚNA CREWS
	 	 	37	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	17	 	 	 	0	 
	 	2	 	 	Reformation of the body car (backup truck)
	 	 	9	 	 	 	0	 
	 	3	 	 	General Tools (Energized Line)
	 	 	11	 	 	 	0	 
	 	4	 	 	Truck and equipament (new acquisition)
	 	 	0	 	 	 	0	 
	 
	 	 	 	 	ITAPETININGA CREWS
	 	 	48	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	22	 	 	 	0	 
	 	2	 	 	Truck and equipament (new acquisition)
	 	 	0	 	 	 	0	 
	 	3	 	 	Reformation of the body car (backup truck)
	 	 	15	 	 	 	0	 
	 	4	 	 	General Tools (Energized Line)
	 	 	11	 	 	 	0	 
	 
	 	 	 	 	ENERGIZED LINE 138 KV
	 	 	41	 	 	 	0	 
	 	1	 	 	General Tools
	 	 	41	 	 	 	0	 
	 
	 	 	 	 	CIVIL
	 	 	620	 	 	 	26	 
	 	1	 	 	Construction the New Plant São José
	 	 	600	 	 	 	26	 
	 	2	 	 	Training Center — São José
	 	 	20	 	 	 	0	 
	 
	 	 	 	 	LANDED PROPERTIES
	 	 	5	 	 	 	0	 
	 	1	 	 	Furnitures
	 	 	5	 	 	 	0	 
	 
	 	 	 	 	OTHERS
	 	 	231	 	 	 	16	 
	 	1	 	 	Laboratory — Construction of Power Transformers
	 	 	30	 	 	 	0	 
	 	2	 	 	Laboratory — Construction sistem partial discharge test (PT e CT)
	 	 	0	 	 	 	0	 
	 	3	 	 	Laboratory — Hardware / Software
	 	 	10	 	 	 	0	 
	 	4	 	 	General Tools
	 	 	10	 	 	 	4	 
	 	5	 	 	Porch (Acquisition)
	 	 	0	 	 	 	0	 
	 	6	 	 	Computing — Hardware / Software
	 	 	181	 	 	 	10	 
	 	7	 	 	Car Purchasing — Gol — DCM manager
	 	 	0	 	 	 	0	 
	 	8	 	 	Car Purchasing — Gol — DME manager
	 	 	0	 	 	 	1	 
	 
	 	 	 	 	Total  — CapEx — 2007
	 	 	1,347	 	 	 	47	 
	 

 

 

Schedule 5.1(e)

Conduct of the Company

The amount of any investment required to be made by the Company or any Company Subsidiary as a
capital contribution to Investco under any existing agreement, which is currently estimated by the
Company to be approximately R$2,000,000.

 

 

Schedule 5.1(l)

Conduct of the Company

The aggregate amount of the dividends payable with respect to the Company to the Seller and the
minority shareholders of the Company Subsidiaries, as of December 31, 2006, was R$27,823,000, net
of taxes, all of which may be paid prior to the Closing.

 

 

Schedule 5.3

Access

Any and all information including all information set forth in the Memorandum of Understanding
dated August 14, 2006, regarding the potential acquisition by the Company of an interest in a
company which holds construction and operating rights with respect to 9 PCHs in Brazil.
Negotiations with respect to this potential acquisition are currently “on hold”, pending the
results of the auction process. Currently there are no liabilities associated with the
negotiations.

 

 

Schedule 5.7

Fees and Expenses

Any claim made or action asserted or taken by any Person relating to, arising from or under,
pursuant to or in connection with Paulista Lajeado Energia’s ownership of the Equity Interests in
Investco, including, without limitation, any claim, action or right asserted or taken under the
Shareholders Agreements dated November 17, 1997, July 31, 1998 and May 30, 2000, each among Rede
Lajeado Energia, Paulista Lajeado Energia, EDP Lajeado and CEB in respect of such ownership of the
Equity Interests in Investco.

 

 

Schedule 5.9

Termination of Affiliate Contracts

See Schedule 3.15.

 

 

Schedule 5.14

Resignations and Terminations

	 	 	 
	CMS Brasil
	 
	 	 
	Directors:

	 	Joseph P. Tomasik, Rajesh Swaminathan, Sergio Omar Vulijscher,
Rogério Cruz Themudo Lessa, Patrick Charles Morin Junior
	 
	 	 
	Officers:

	 	Sergio Omar Vulijscher, John Sam Koutras, Claude Breyvogel, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto
	 
	 	 
	CMS Comercializadora
	 
	 	 
	Directors:

	 	N/A
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Ricardo Villagra da Silva Marques, Claude Breyvogel
	 
	 	 
	Paulista Energia
	 
	 	 
	Directors:

	 	Joseph P. Tomasik, Rajesh Swaminathan, Claude Breyvogel, Rogério Cruz Themudo Lessa
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel
	 
	 	 
	Sul Paulista Energia
	 
	 	 
	Directors:

	 	Joseph P. Tomasik, Rajesh Swaminathan, Claude Breyvogel, Rogério Cruz Themudo Lessa
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel
	 
	 	 
	Jaguari Energia
	 
	 	 
	Directors:

	 	N/A
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel
	 
	 	 
	Mococa Energia
	 
	 	 
	Directors:

	 	N/A
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel

 

 

	 	 	 
	 
	 	 
	CMS Equipamentos e Serviços
	 
	 	 
	Directors:

	 	N/A
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel
	 
	 	 
	Jaguari Geração
	 
	 	 
	Directors:

	 	N/A
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Ricardo Villagra da Silva Marques, Claude Breyvogel
	 
	 	 
	Paulista Lajeado Energia
	 
	 	 
	Directors:

	 	Claude Breyvogel, Rogério Cruz Themudo Lessa, Joseph P. Tomasik, Rajesh Swaminathan
	 
	 	 
	Officers:

	 	Sérgio Omar Vulijscher, John Sam Koutras, Ricardo Villagra da Silva Marques, Norberto de Jesus Filho, Luiz Toshiro Okamoto, Claude Breyvogel

 

 

Schedule 5.16

Guarantees

Seller or its Affiliates, as the case may be, is subject to certain guarantee obligations relating
to or arising out of the following matters:

	 	 	 	 	 	 	 	 	 	 	 
	Plaintiff	 	Defendant	 	Case	 	Purpose	 	Claimed Amount	 	Asset Attached
	Federal Government
	 	CPEE
	 	467/2005
	 	 	 	R$15.357,80
	 	25.May.06 — Asset
assigned to
attachment: “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
records no. 17.559
and duly described
and characterized
in public deed
drawn up at the 2nd
Notary Public of
São Bernardo do
Campo, book no.
849, page 262”

	 
	Federal Government
	 	CPEE
	 	428/2005
	 	1999 COFINS
	 	R$170.787,86
	 	25.May.06 — Asset
assigned to
attachment: “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
records no. 17.559
and duly described
and characterized
in public deed
drawn up at the 2nd
Notary Public of
São Bernardo do
Campo, book no.
849, page 262”

	 
	Federal Government
	 	CPEE
	 	473/2005
	 	1998 1991 e 1992
IRRF (actual
profit) 1994, 1995,
1998 COFINS, 1997
and 1998 PIS
	 	R$ (d)2.351.117.26
	 	25.May.06 — Asset
assigned to
attachment: “tract
with area of
240,036.05m2,
located in
Jaguariúna, near
Rodovia SP340 and
Rua Vigato, real
estate resulting
from division of
recordation no.
17.559 and duly
described and
characterized in
public deed drawn
up at the 2nd
Notary Public of
São Bernardo do
Campo, book no.
849, page 262”

 

 

Schedule 5.18

Executive Officer and Manager Agreements

See Schedule 3.8(e)

 

 

Schedule 5.19

Insurance

None.

 

 

Schedule 8.5(a)

Special Seller Indemnification

Liabilities, if any, associated with claims, and any losses, settlement, result of litigation,
costs, expenses or damages related thereto, with respect to certain alleged payment obligations of
the Company or any Company Subsidiary in connection with any note or other payment obligation,
including, without limitation, applicable interest, penalties, fines and other charges having Banco
Santos S.A. as original beneficiary, executed by the Company or any such Company Subsidiary. Based
on limited information available to the Company (which does not include copies of the notes on
which such claim may be based) as of the date of this Agreement, the face amount of the notes is
believed by the Company to be approximately R$13.8 million. Set forth below is a list of what the
Company believes as of the date of this Agreement to be the four (4) outstanding notes.

	 	 	 	 	 
	 	 	Approximate Face	 	Status of Claim as of the
	Note/Holder	 	Amount/Maturity*	 	Date of this Agreement
	1. Mococa

(Santos Credit
Master Investment
Fund II — Mellon)

	 	R$1.3 million

10/26/06

(issued 11/05/04)
	 	Filed suit; Company served
	 
	 	 	 	 
	2. Paulista

(Espirito Santos)

	 	R$1.9 million 

10/26/06

(issued 11/05/04)
	 	Filed suit; Company not served
	 
	 	 	 	 
	3. Sul Paulista

(Banco Santos)

	 	R$5.8 million

10/26/06

(issued 11/05/04)
	 	Notice of default delivered
to Company by Bank; not
served yet
	 
	 	 	 	 
	4. Jaguari

	 	R$4.8 million

10/26/06

(issued 11/05/04)
	 	No claim received

The statute of limitations to bring a claim is three years from maturity. (This is now only
relevant for Jaguari.)exv10wxpy

EXHIBIT 10
(p)

PURCHASE AND SALE AGREEMENT

by and between

Broadway Gen Funding, LLC

as Seller,

and

Consumers Energy Company

as Buyer

dated as of May 24, 2007

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	 	 	Page
	 
	 	 	 	 
	ARTICLE I DEFINITIONS AND CONSTRUCTION	 	 
	 
	 	 	 	 
	Section 1.1

	 	Definitions	 	 
	Section 1.2

	 	Rules of Construction	 	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE AND CLOSING	 	 
	 
	 	 	 	 
	Section 2.1

	 	Purchase and Sale	 	 
	Section 2.2

	 	Purchase Price.	 	 
	Section 2.3

	 	Closing	 	 
	Section 2.4

	 	Closing Deliveries by Seller to Buyer	 	 
	Section 2.5

	 	Closing Deliveries by Buyer to Seller	 	 
	Section 2.6

	 	Post-Closing Adjustment	 	 
	Section 2.7

	 	Allocation of Purchase Price	 	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING SELLER	 	 
	 
	 	 	 	 
	Section 3.1

	 	Organization	 	 
	Section 3.2

	 	Authority; Enforceability	 	 
	Section 3.3

	 	No Conflicts; Consents and Approvals	 	 
	Section 3.4

	 	Legal Proceedings	 	 
	Section 3.5

	 	Brokers	 	 
	Section 3.6

	 	Capitalization	 	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE PROJECT COMPANY	 	 

 

 

	 	 	 	 	 
	 	 	 	 	Page
	Section 4.1

	 	Organization	 	 
	Section 4.2

	 	No Conflicts; Consents and Approvals	 	 
	Section 4.3

	 	Capitalization	 	 
	Section 4.4

	 	Business	 	 
	Section 4.5

	 	Bank Accounts	 	 
	Section 4.6

	 	Subsidiaries	 	 
	Section 4.7

	 	Legal Proceedings	 	 
	Section 4.8

	 	Compliance with Laws and Orders	 	 
	Section 4.9

	 	Balance Sheets; No Undisclosed Liabilities	 	 
	Section 4.10

	 	Absence of Certain Changes	 	 
	Section 4.11

	 	Taxes	 	 
	Section 4.12

	 	Regulatory Status	 	 
	Section 4.13

	 	Contracts	 	 
	Section 4.14

	 	Real Property	 	 
	Section 4.15

	 	Permits	 	 
	Section 4.16

	 	Environmental Matters	 	 
	Section 4.17

	 	Intellectual Property	 	 
	Section 4.18

	 	Brokers	 	 
	Section 4.19

	 	Employees and Labor Matters	 	 
	Section 4.20

	 	Employee Benefits	 	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER	 	 
	 
	 	 	 	 
	Section 5.1

	 	Organization	 	 
	Section 5.2

	 	Authority; Enforceability	 	 
	Section 5.3

	 	No Conflicts	 	 
	Section 5.4

	 	Legal Proceedings	 	 
	Section 5.5

	 	Compliance with Laws and Orders	 	 
	Section 5.6

	 	Brokers	 	 
	Section 5.7

	 	No Knowledge of Seller’s Breach	 	 
	Section 5.8

	 	Financial Resources	 	 
	Section 5.9

	 	No Conflicting Contracts	 	 
	Section 5.10

	 	Opportunity for Independent
Investigation; No Other Representations	 	 
	 
	 	 	 	 
	ARTICLE VI COVENANTS	 	 
	 
	 	 	 	 
	Section 6.1

	 	Regulatory and Other Approvals	 	 
	Section 6.2

	 	Access of Buyer and Seller	 	 
	Section 6.3

	 	Certain Restrictions	 	 
	Section 6.4

	 	Use of Certain Names	 	 
	Section 6.5

	 	Termination of Certain Services and Contracts	 	 
	Section 6.6

	 	Employee and Benefit Matters	 	 
	Section 6.7

	 	Indebtedness	 	 
	Section 6.8

	 	Insurance	 	 
	Section 6.9

	 	Transfer Taxes	 	 
	Section 6.10

	 	Books and Records	 	 

 

 

	 	 	 	 	 
	 	 	 	 	Page
	Section 6.11

	 	Tax Matters	 	 
	Section 6.12

	 	Schedule Update	 	 
	Section 6.13

	 	Casualty	 	 
	Section 6.14

	 	Condemnation	 	 
	Section 6.15

	 	Confidentiality	 	 
	Section 6.16

	 	Public Announcements	 	 
	Section 6.17

	 	Release of Guaranties, etc.	 	 
	Section 6.18

	 	Distributions	 	 
	Section 6.19

	 	Further Assurances	 	 
	Section 6.20

	 	Monthly Operating Report	 	 
	Section 6.21

	 	Creditworthiness of Seller	 	 
	Section 6.22

	 	Balance Sheet	 	 
	 
	 	 	 	 
	ARTICLE VII BUYER’S CONDITIONS TO CLOSING	 	 
	 
	 	 	 	 
	Section 7.1

	 	Representations and Warranties	 	 
	Section 7.2

	 	Performance	 	 
	Section 7.3

	 	Officer’s Certificate	 	 
	Section 7.4

	 	Orders and Laws	 	 
	Section 7.5

	 	Consents and Approvals	 	 
	Section 7.6

	 	Resignation of Members, Managers, Officers and Directors
	 	 
	Section 7.7

	 	Release of Indebtedness; Release of Liens	 	 
	 
	 	 	 	 
	ARTICLE VIII SELLER’S CONDITIONS TO CLOSING	 	 
	 
	 	 	 	 
	Section 8.1

	 	Representations and Warranties	 	 
	Section 8.2

	 	Performance	 	 
	Section 8.3

	 	Officer’s Certificate	 	 
	Section 8.4

	 	Orders and Laws	 	 
	Section 8.5

	 	Consents and Approvals	 	 
	 
	 	 	 	 
	ARTICLE IX TERMINATION	 	 
	 
	 	 	 	 
	Section 9.1

	 	Termination	 	 
	Section 9.2

	 	Effect of Termination	 	 
	Section 9.3

	 	Specific Performance and Other Remedies	 	 
	 
	 	 	 	 
	ARTICLE X INDEMNIFICATION, LIMITATIONS OF LIABILITY AND WAIVERS	 	 
	 
	 	 	 	 
	Section 10.1

	 	Indemnification	 	 
	Section 10.2

	 	Limitations of Liability	 	 
	Section 10.3

	 	Indirect Claims	 	 
	Section 10.4

	 	Waiver of Other Representations.	 	 
	Section 10.5

	 	Waiver of Remedies	 	 
	Section 10.6

	 	Procedure with Respect to Third-Party Claims	 	 
	 
	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 
	 
	 	 	 	 
	Section 11.1

	 	Notices	 	 
	Section 11.2

	 	Entire Agreement	 	 

 

 

	 	 	 	 	 
	 	 	 	 	Page
	Section 11.3

	 	Expenses	 	 
	Section 11.4

	 	Disclosure	 	 
	Section 11.5

	 	Waiver	 	 
	Section 11.6

	 	Amendment	 	 
	Section 11.7

	 	No Third Party Beneficiary	 	 
	Section 11.8

	 	Assignment; Binding Effect	 	 
	Section 11.9

	 	Headings	 	 
	Section 11.10

	 	Invalid Provisions	 	 
	Section 11.11

	 	Counterparts; Facsimile	 	 
	Section 11.12

	 	Governing Law; Venue; and Jurisdiction	 	 
	Section 11.13

	 	Parcel Three Option	 	 
	 
	 	 	 	 
	EXHIBITS
	 	 	 	 
	 
	 	 	 	 
	Exhibit 2.4

	 	Form of Company Assignment Agreement	 	 
	 
	 	 	 	 
	SCHEDULES
	 	 	 	 
	 
	 	 	 	 
	1.1—A

	 	Net Working Capital Calculation	 	 
	1.1—B

	 	Budget	 	 
	1.1—K

	 	Knowledge	 	 
	1.1—PL

	 	Permitted Liens	 	 
	1.1 — PT

	 	Parcel Three	 	 
	3.3(c)

	 	Seller Approvals	 	 
	4.2

	 	Company Consents	 	 
	4.3

	 	Capitalization	 	 
	4.4

	 	Operation of Business	 	 
	4.5

	 	Bank Accounts	 	 
	4.7

	 	Legal Proceedings	 	 
	4.8

	 	Compliance with Laws	 	 
	4.9

	 	Financial Statements; Undisclosed Liabilities	 	 
	4.10

	 	Absence of Certain Changes	 	 
	4.11

	 	Taxes	 	 
	4.12

	 	Regulatory Status	 	 
	4.13

	 	Material Contracts	 	 
	4.14

	 	Real Property	 	 
	4.15(a)

	 	Permits	 	 
	4.16(c)

	 	Emissions Credits and Allowances	 	 
	4.19

	 	Labor Matters	 	 
	4.19(b)

	 	Employees	 	 
	4.19(c)

	 	Third Party Vendor Employees	 	 

 

 

	 	 	 	 	 
	4.20

	 	Employee Benefits	 	 
	5.3

	 	Buyer Approvals	 	 
	5.9

	 	Conflicts	 	 
	6.3

	 	Exceptions to Conduct of Business	 	 
	6.5

	 	Terminated Contracts	 	 
	6.10

	 	Books and Records	 	 
	6.17

	 	Support Obligations	 	 
	11.13

	 	Quitclaim Deed for Parcel Three	 	 

PURCHASE AND SALE AGREEMENT

     This Purchase and Sale Agreement, dated as of May 24, 2007 (this “Agreement”), is made and
entered into by and between Broadway Gen Funding, LLC, a Delaware limited liability company
(“Seller”) and Consumers Energy Company, a Michigan corporation (“Buyer”).

WITNESSETH:

     WHEREAS, pursuant to the Purchase and Sale Agreement, dated as of January 15, 2007 (as the
same may be amended from time to time, the “Mirant PSA”), by and between Mirant Americas Inc., a
Delaware corporation (“Mirant”), and LS Power Acquisition Co I, LLC, a Delaware limited liability
company which has since changed its name to Broadway Generating Company, LLC, an indirect
subsidiary of Seller purchased 100% of the Project Company Interests (as defined below);

     WHEREAS, Seller currently owns 100% of the Project Company Interests;

     WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the
Project Company Interests on the Closing Date (as defined below) on the terms and subject to the
conditions set forth in this Agreement; and

     WHEREAS, in connection with this Agreement, Buyer and the Project Company have entered into a
Master Power Purchase and Sale Agreement of even date herewith.

     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants and agreements in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS AND CONSTRUCTION

     Section 1.1 Definitions. As used in this Agreement, the following capitalized terms
have the meanings set forth below:

     “Acceptable Order” means (i) affirmation that the acquisition of the Project by Buyer is
reasonable and prudent; (ii) approval for Buyer to include the Base Purchase Price of the Project

 

 

in its rate base, (iii) recognition of the fuel costs associated with operation of the Project, and
approval of the rate adjustments necessary to allow full recovery by Buyer of the non-fuel costs of
operating and maintaining the Project (provided that such operating and maintenance costs will be
determined by Buyer in a manner consistent with how such costs have been determined by Buyer at its
other owned generating plants and previously approved by the MPSC), other than a de minimis
reduction (provided that if such reduction (A) is more than 1% of the annual non-fuel operating and
maintenance costs of the Project, the Parties shall confer to determine the effects of such
reduction and the appropriate response thereto and (B) is more than 5% of the annual non-fuel
operating and maintenance costs of the Project, Buyer may at its option on 10 days’ prior notice to
Seller terminate this Agreement; and in the case of each of the approvals set forth in clauses (ii)
and (iii), without the imposition of other conditions that taken in the aggregate would have the
effect of reducing such recovery (other than any de minimis reduction).

     “Adjustment Estimate” has the meaning given to it in Section 2.5(a).

     “Affiliate” means, with respect to any Person, any other Person that directly or indirectly
through one or more intermediaries, controls, is controlled by or is under common control with such
Person. For purposes of this definition, “control” of a Person means the power, direct or indirect,
to direct or cause the direction of the management and policies of such Person whether through
ownership of voting securities or ownership interests, by Contract or otherwise, and specifically
with respect to a corporation, partnership or limited liability company, means direct or indirect
ownership of more than 50% of the voting securities in such corporation or of the voting interest
in a partnership or limited liability company.

     “Agreed Capital Expenditures” has the meaning given to it in Section 2.2(b).

     “Agreement” has the meaning given to it in the introduction to this Agreement.

     “Ancillary Agreements” means the Company Assignment Agreement, the Closing Certificates and
the other documents and agreements to be delivered pursuant to this Agreement.

     “Assets” of any Person means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intangible and wherever
situated), including the related goodwill, which assets and properties are operated, owned or
leased by such Person.

     “Balance Sheets” has the meaning given to it in Section 4.9.

     “Bankruptcy Order” means that certain Order Confirming the Amended and Restated Second Amended
Joint Chapter 11 Plan of Reorganization for Mirant Corporation and its Affiliated debtors.

     “Base Purchase Price” has the meaning given to it in Section 2.2(a).

     “Benefit Plan” means (a) each material “employee benefit plan,” as such term is defined in
Section 3(3) of ERISA, of Seller or any of its Affiliates that covers the Employees, (b) each

 

 

stock
bonus, stock ownership, stock option, stock purchase, stock appreciation right, phantom stock, or
other stock plan (whether qualified or nonqualified) that covers the Employees, and (c) each bonus
or incentive compensation plan that covers the Employees. Benefit Plans do not include any
Multiemployer Plans.

     “Budget” means the major maintenance and capital expenditures budget estimates for the Project
Company for the period from the date hereof until December 31, 2008, as set forth in Schedule
1.1-B.

     “Business” means the ownership and operation of the Project as currently conducted, including
the generation and sale of electricity and capacity and electric-related products by the Project
Company at or from the Project as currently conducted, the receipt by the Project Company of fuel
and the conduct of other activities by the Project Company related or incidental to the foregoing
all as currently conducted.

     “Business Day” means a day other than Saturday, Sunday or any day on which banks located in
the State of New York are authorized or obligated to close.

     “Buyer” has the meaning given to it in the introduction to this Agreement.

     “Buyer Approvals” has the meaning given to it in Section 5.3(c).

     “Buyer Indemnified Parties” has the meaning given to it in Section 10.1(a).

     “Buyer’s Advisors” has the meaning given to it in Section 6.2.

     “Buyer’s Determination” has the meaning given to it in Section 2.6(a).

     “Buyer’s Proposal” has the meaning given to it in Section 2.2(b).

     “Capital Expenditures Adjustment” has the meaning set forth in Section 2.2(a).

     “Casualty Loss” has the meaning given to it in Section 6.13.

     “CBA” has the meaning given to it in Section 6.6(b).

     “CBA Employees” has the meaning given to it in Section 4.19(d).

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

     “Claiming Party” has the meaning given to it in Section 10.6(a).

     “Closing” means the closing of the transactions contemplated by this Agreement, as provided
for in Section 2.3.

     “Closing Certificates” means the officer’s certificates referenced in Section 7.3 and Section
8.3.

     “Closing Date” means the date on which Closing occurs.

 

 

     “Closing Date Net Working Capital” means the aggregate Net Working Capital of the Project
Company as of the Closing Date.

     “COBRA Continuation Coverage” has the meaning given to it in Section 6.6(h).

     “Code” means the Internal Revenue Code of 1986.

     “Company Assignment Agreement” has the meaning given to it in Section 2.4(a).

     “Company Consents” has the meaning given to it in Section 4.2(b).

     “Condemnation Value” has the meaning given to it in Section 6.14.

     “Confidentiality Agreement” means the Confidentiality Agreement between Buyer and LS Power
Equity Advisors, LLC dated March 13, 2007.

     “Contract” means any legally binding contract, lease, license, evidence of Indebtedness,
mortgage, indenture, purchase order, binding bid, letter of credit, security agreement or other
legally binding arrangement but shall exclude Permits.

     “Controlled Group Liability” means any and all liabilities under (i) Title IV of ERISA, (ii)
Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, or (iv) the continuation coverage
requirements of Section 601 et seq. of ERISA and Section 4980B of the Code.

     “Credit Rating” means, with respect to any Person, the rating given to such Person’s long-term
unsecured debt obligations by S&P or Moody’s, as applicable, and any successors thereto.

     “Deductible Amount” has the meaning given to it in Section 10.2(c).

     “Employees” has the meaning given to it in Section 4.19(b).

     “Environmental Claim” means any Claim or Loss arising out of or related to any violation of
Environmental Law.

     “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil
Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42
U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; and all
similar Laws (including implementing regulations) of any Governmental Authority having jurisdiction
over the assets in question addressing pollution control or protection of the environment.

     “Equity Interests” means capital stock, partnership or membership interests or units (whether
general or limited), and any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distribution of assets of, the issuing entity.

 

 

     “Equity Securities” means (i) Equity Interests, (ii) subscriptions, calls, warrants, options
or commitments of any kind or character relating to, or entitling any Person to acquire, any Equity
Interests and (iii) securities convertible into or exercisable or exchangeable for shares of Equity
Interests.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

     “ERISA Affiliate” means any entity, trade or business that is a member of a group described in
Section 414(b) or (c) of the Code or Section 400l(b)(l) of ERISA that includes Seller, or that is a
member of the same “controlled group” as Seller pursuant to Section 4001(a)(14) of ERISA; provided,
however, that the Project Company shall not be considered to be an ERISA Affiliate from and after
the Closing Date.

     “Excluded Liabilities” means all Claims and Losses of or relating to Seller, the Project
Company, Mirant or its Affiliates arising out of: (i) any Benefit Plan liabilities relating to
periods prior to the Mirant Closing, (ii) fees payable to any broker, finder, financial advisor or
agent with respect to the transactions contemplated by this Agreement, (iii) the Southern Company
and Other Claims, (iv) Terminated Contracts or (v) Section 8.4(iii) of the O&M Agreement, but only
if Buyer shall have terminated the O&M Agreement within five (5) Business Days of the Closing Date
and then only to the extent that such Claims or Losses were not a result of any action of Buyer
other than the act of terminating the O&M Agreement.

     “FERC” means the Federal Energy Regulatory Commission or its successor Governmental Authority.

     “Final Adjustment” has the meaning given to it in Section 2.6(c).

     “FPA” means the Federal Power Act.

     “GAAP” means generally accepted accounting principles in the United States of America.

     “Governmental Authority” means any court, tribunal, arbitrator, authority, agency, commission,
official or other instrumentality of the United States or any state, county, city or other
political subdivision or similar governing entity, and including any governmental,
quasi-governmental or non-governmental body administering, regulating or having general oversight
over natural gas, electricity, power or other markets.

     “Hazardous Material” means each substance designated as a hazardous waste, hazardous
substance, hazardous material, pollutant, contaminant or toxic substance under any Environmental
Law and any petroleum or petroleum products that have been released into the environment.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     “Indebtedness” means any of the following: (a) any indebtedness for borrowed money; (b) any
obligations evidenced by bonds, debentures, notes or other similar instruments; (c) any obligations
to pay the deferred purchase price of property or services, except trade accounts payable and other
current liabilities arising in the ordinary course of business consistent with past

 

 

practices; (d) any obligations as lessee under capitalized leases; (e) any obligations,
contingent or otherwise, under acceptance, letters of credit or similar facilities; and (f) any
guaranty of any of the foregoing.

     “Indemnified Parties” has the meaning given to it in Section 10.1(b).

     “Indemnifying Party” means a Person required to indemnify a Seller Indemnified Party or a
Buyer Indemnified Party, as the case may be, pursuant to the terms of this Agreement.

     “Independent Accountants” has the meaning given to it in Section 2.6(b).

     “Independent Engineering Firm” shall mean Black & Veatch or such other engineering firm
reasonably acceptable to Buyer and Seller.

     “Intellectual Property” means the following intellectual property rights, both statutory and
common law rights, if applicable: (a) copyrights, registrations and applications for registration
thereof, (b) trademarks, service marks, trade names, slogans, domain names, logos, trade dress, and
registrations and applications for registrations thereof, (c) patents, as well as any reissued and
reexamined patents and extensions corresponding to the patents, and any patent applications, as
well as any related continuation, continuation in part and divisional applications and patents
issuing therefrom and (d) trade secrets and confidential information, including ideas, designs,
concepts, compilations of information, methods, techniques, procedures, processes and other
know-how, whether or not patentable.

     “Interim Period” has the meaning given to it in Section 6.1.

     “Knowledge,” when used in a particular representation in this Agreement with respect to
Seller, means the actual knowledge, after reasonable inquiry, of the individuals listed on Schedule
1.1-K.

     “Laws” means all laws, statutes, rules, regulations, ordinances, orders, decrees, court
decisions, and other pronouncements having the effect of law of any Governmental Authority.

     “Lien” means any mortgage, pledge, deed of trust, assessment, security interest, charge, lien,
option, warranty, purchase right or other encumbrance.

     “Loss” means any and all judgments, losses, liabilities, amounts paid in settlement, damages,
fines, penalties, deficiencies, costs, charges, Taxes, obligations, demands, fees, interest, losses
and expenses (including court costs and reasonable fees of attorneys, accountants and other experts
in connection with any Claim made by a third party). For all purposes in this Agreement the term
“Losses” does not include any Non-reimbursable Damages.

     “Material Adverse Effect” means a material adverse effect on the business, financial condition
or results of operations of the Project Company; provided, however, that the following shall not be
considered when determining whether a Material Adverse Effect has occurred: any change, event,
effect or occurrence (or changes, events, effects or occurrences taken together) resulting from (a)
any change generally affecting the international, national or regional electric generating,
transmission or distribution industry; (b) any change generally affecting the

 

 

international, national or regional wholesale or retail markets for electric power; (c) any
change generally affecting the international, national or regional wholesale or retail markets for
the natural gas industry; (d) any change in markets for commodities or supplies, including electric
power, natural gas or fuel and water, as applicable, used in connection with the Project Company;
(e) any change in market design and pricing; (f) any change in general regulatory or political
conditions, including any engagements of hostilities, acts of war or terrorist activities or
changes imposed by a Governmental Authority associated with additional security; (g) any change in
the international, national or regional electric transmission or distribution systems or operations
thereof; (h) any continuation of an adverse trend or condition; (i) any change in any Laws
(including Environmental Laws) or industry standards; (j) the failure of Seller or any of its
Affiliates to effect the assignment of any Contract or Permit to Buyer, the Project Company, or any
Affiliate of Buyer; (k) any change in the financial condition or results of operation of the
Project Company caused by the sale of the Project Company to Buyer from Seller, including changes
due to the Credit Rating of Buyer; (l) any change in the financial, banking, or securities markets
(including any suspension of trading in, or limitation on prices for, securities on the New York
Stock Exchange, American Stock Exchange, or Nasdaq Stock Market) or any change in the general
national or regional economic or financial conditions; (m) any actions to be taken pursuant to or
in accordance with this Agreement; or (n) the announcement or pendency of the transactions
contemplated hereby.

     “Material Contracts” has the meaning given to it in Section 4.13(a).

     “May Balance Sheet” has the meaning given to it in Section 4.21.

     “Michigan Code” means the Michigan Code in effect as of the date hereof.

     “Mirant” has the meaning given to it in the recitals to this Agreement.

     “Mirant Closing” means the closing of the transactions contemplated by the Mirant PSA, which
occurred on May 1, 2007.

     “Mirant PSA” has the meaning given to it in the recitals to this Agreement.

     “Moody’s” means Moody’s Investors Services, Inc.

     “MPSC” means the Michigan Public Service Commission or its successor Governmental Authority.

     “Multiemployer Plan” means any “multiemployer plan” within the meaning of Section 4001(a)(3)
of ERISA covering the CBA Employees.

     “Net Working Capital” means (without duplication), with respect to the Project Company, the
amount (expressed as a positive or negative number) calculated in accordance with the formula and
methodology described on, and used in the preparation of, Schedule 1.1-A, and otherwise in
accordance with GAAP.

     “Non-CBA Employees” means all Employees other than CBA Employees.

 

 

     “Non-reimbursable Damages” has the meaning given to it in Section 10.5(b).

     “O&M Agreement” means Operation and Maintenance Agreement for the Zeeland Electric Facility by
and between LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated as
of February 12, 2007, as subsequently assigned to the Project Company.

     “Organizational Documents” means, with respect to any Person, the articles or certificate of
incorporation or organization and by-laws, the limited partnership agreement, the partnership
agreement or the limited liability company agreement, or such other organizational documents of
such Person, including those that are required to be registered or kept in the place of
incorporation, organization or formation of such Person and which establish the legal personality
of such Person.

     “Parcel Three” means the real property described in Schedule 1.1-PT.

     “Parties” means collectively, Buyer and Seller.

     “Permits” means all licenses, permits, certificates of authority, authorizations, approvals,
registrations, franchises and similar consents and orders issued or granted by a Governmental
Authority.

     “Permitted Lien” means (a) any Lien for Taxes not yet due or delinquent or being contested in
good faith by appropriate proceedings; (b) any Lien arising in the ordinary course of business
consistent with past practices by operation of Law with respect to a liability that is not yet due
or delinquent or that is being contested in good faith by Mirant, Seller or the Project Company;
(c) any Lien reflected in the Balance Sheets; (d) purchase money Liens arising in the ordinary
course of business consistent with past practices; (e) all matters that are disclosed (whether or
not subsequently deleted or endorsed over) on any survey, in the title policies insuring the
Property (including the Title Policy) or any commitments therefor, or in any title reports, to the
extent such surveys, title policies, commitments or title reports are listed on Schedule 1.1-PL;
(f) imperfections or irregularities of title and other Liens that would not, in the aggregate,
reasonably be expected to materially detract from the value of the affected property or materially
impair the use of the Property in the Business; (g) zoning, planning, and other similar limitations
and restrictions, and all rights of any Governmental Authority to regulate the Property; (h) all
matters of record, that would not, in the aggregate, reasonably be expected to materially detract
from the value of the affected property; (i) the terms and conditions of the Material Contracts,
the Permits listed on Schedule 4.15(a) or the Contracts listed on Schedule 4.13; (j) pledges and
deposits made in the ordinary course of business in compliance with workers’ compensation,
unemployment insurance and other social security Laws; (k) any Lien that is released on or prior to
Closing; and (l) the matters identified on Schedule 1.1-PL (except, at Closing, those items marked
with an asterisk on such Schedule).

     “Person” means any natural person, corporation, general partnership, limited partnership,
limited liability company, proprietorship, other business organization, trust, union, association
or Governmental Authority.

     “Pre-Closing Taxable Period” has the meaning given to it in Section 6.11(a).

 

 

     “Prior Electrical Practice” means the practices, methods and standards, in general, that have
been used in the operations and maintenance of the Project since January 1, 2004.

     “Project” means the project located at the Property.

     “Project Company” means Zeeland Power Company, LLC, a Delaware limited liability company,
formerly known as Mirant Zeeland, LLC.

     “Project Company Interests” means 100% of the Equity Interests of the Project Company.

     “Property” means the real property on which the Project is located, as further described in
Schedule 4.14, including any improvements thereon and easements and rights-of-way appertaining
thereto.

     “Property Taxes” has the meaning given to it in Section 6.11(b).

     “PUHCA of 2005” means the Public Utility Holding Company Act of 2005.

     “Purchase Price” has the meaning given to it in Section 2.2(a).

     “Purchase Price Allocation Schedule” has the meaning given to it in Section 2.7(a).

     “Reasonable Best Efforts” means efforts which are designed to enable a Party, directly or
indirectly, to expeditiously satisfy a condition to, or otherwise assist in the consummation of,
the transactions contemplated by this Agreement and which do not require the performing Party to
expend any funds or assume liabilities other than expenditures and liability assumptions which are
reasonable in the context of the transactions contemplated by this Agreement.

     “Release” means any release, spill, emission, migration, leaking, pumping, injection, deposit,
disposal or discharge of any Hazardous Materials into the environment.

     “Representatives” means, as to any Person, its officers, directors, partners, members, and
employees.

     “Responding Party” has the meaning given to it in Section 10.6(a).

     “Restoration Cost” has the meaning given to it in Section 6.13.

     “S&P” means Standard & Poor’s Ratings Group.

     “Schedule Update” has the meaning given to it in Section 6.12.

     “Schedules” means the disclosure schedules prepared by Seller and attached to this Agreement.

     “Seller” has the meaning given to it in the introduction to this Agreement.

     “Seller Approvals” has the meaning given to it in Section 3.3(c).

 

 

     “Seller Credit Agreement” means the First Lien Credit Agreement, dated May 1, 2007, among
Broadway Gen Funding, LLC as Borrower, the Lenders, J.P. Morgan Securities, Barclays Capital,
Credit Suisse Securities (USA) LLC and Lehman Brothers Inc. as joint lead arrangers and joint
bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent.

     “Seller Indemnified Parties” has the meaning given to it in Section 10.1(b).

     “Seller Marks” has the meaning given to it in Section 6.4(a).

     “Seller’s Net Worth” has the meaning set forth in Section 6.21.

     “Seller’s Proposal” has the meaning given to it in Section 2.2(b).

     “Southern Company and Other Claims” means (i) any liability of the Project Company associated
with the following proofs of claim filed by The Southern Company in Jointly Administered Chapter 11
Case No. 03-46590-DML, United States Bankruptcy Court, Northern District of Texas, Fort Worth
Division, of MC 2005 LLC (f/k/a Mirant Corporation prior to January 3, 2006 and MC 2005 Corporation
prior to February 23, 2006) (the “Bankruptcy Case”), as such claims may be amended: claims numbered
6327, 6379, 8139 and 8271 against the Project Company; and (ii) any liability of the Project
Company associated with the following proofs of claim filed by Lehman Commercial Paper, Inc. and/or
Wells Fargo Bank, N.A. in the Bankruptcy Case: claims numbered 6101 and 6967 against the Project
Company.

     “Straddle Taxable Period” has the meaning given to it in Section 6.11(a).

     “Support Obligations” has the meaning given to it in Section 6.17.

     “Tax” or “Taxes” means (a) any federal, state, local or foreign income, gross receipts, ad
valorem, sales and use, employment, social security, disability, occupation, industrial facilities,
property, severance, value added, transfer, capital stock, excise, withholding, premium, occupation
or other taxes, levies or other like assessments, customs, duties, imposts, charges surcharges or
fees imposed by or on behalf of any Governmental Authority, including any interest, penalty or
addition thereto and (b) any liability for amounts described in clause (a), (i) as a result of
transferee liability, (ii) by Contract or (iii) otherwise.

     “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.

     “Terminated Contracts” has the meaning given to it in Section 6.5.

     “Title and Authority Representations” has the meaning given to it in Section 10.2(a).

     “Title Policy” means that certain ALTA Owner’s Policy dated May 1, 2007, issued by Stewart
Title Guaranty Company in accordance with that certain Pro Forma Owner’s Title Insurance Policy
File No. 508240.

 

 

     “Transfer Taxes” means all transfer, sales, use, goods and services, value added, documentary,
stamp duty, gross receipts, excise, transfer and conveyance Taxes and other similar Taxes, duties,
fees or charges.

     “Transferred Employees” has the meaning given to it in Section 6.6(c).

     “Wastewater Permit” means the City of Zeeland Wastewater Discharge Permit, issued December 29,
2004 in relation to the Project.

     “Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan as those terms are defined in Part I of Subtitle E
of Title IV of ERISA.

     Section 1.2 Rules of Construction.

     (a) All article, section, subsection, schedule and exhibit references used in this Agreement
are to articles, sections, subsections, schedules and exhibits to this Agreement unless otherwise
specified. The exhibits and schedules attached to this Agreement constitute a part of this
Agreement and are incorporated in this Agreement for all purposes.

     (b) If a term is defined as one part of speech (such as a noun), it shall have a corresponding
meaning when used as another part of speech (such as a verb). Unless the context of this Agreement
clearly requires otherwise words importing the masculine gender shall include the feminine and
neutral genders and vice versa. The words “includes” or “including” shall mean “including without
limitation,” the words “hereof,” “hereby,” “herein,” “hereunder” and similar terms in this
Agreement shall refer to this Agreement as a whole and not any particular section or article in
which such words appear. Any reference to a Law shall include any amendment thereof or any
successor thereto and any rules and regulations promulgated thereunder. Currency amounts referenced
in this Agreement are in U.S. Dollars.

     (c) Whenever this Agreement refers to a number of days, such number shall refer to calendar
days unless Business Days are specified. Whenever any action must be taken hereunder on or by a day
that is not a Business Day, then such action may be validly taken on or by the next day that is a
Business Day.

     (d) Each Party acknowledges that it and its attorneys have been given an equal opportunity to
negotiate the terms and conditions of this Agreement and that any rule of construction to the
effect that ambiguities are to be resolved against the drafting Party or any similar rule operating
against the drafter of an agreement shall not be applicable to the construction or interpretation
of this Agreement.

     (e) All accounting terms used herein and not expressly defined herein shall have the
respective meanings given such terms under GAAP.

 

 

ARTICLE II

PURCHASE AND SALE AND CLOSING

     Section 2.1 Purchase and Sale. On the terms and subject to the conditions set forth in
this Agreement, at the Closing. Buyer agrees to purchase from Seller, and Seller agrees to sell to
Buyer, all of the Equity Interests in the Project Company.

     Section 2.2 Purchase Price.

     (a) The purchase price (the “Purchase Price”) for the purchase and sale described in Section
2.1 is equal to the sum of (1) $517,000,000 (the “Base Purchase Price”), plus (2) the
Closing Date Net Working Capital, plus (3) an amount equal to the sum of (i) capital
expenditures and major maintenance expenditures of the Project Company up to the amounts set forth
on the Budget, (ii) capital expenditures and major maintenance expenditures of the Project Company
in excess of the amounts set forth on the Budget but only up to $1,000,000 in the aggregate
(subject to the succeeding clause (iii)) and (iii) any Agreed Capital Expenditures, in each case as
such capital expenditures or major maintenance expenditure have been reflected in Net Working
Capital or paid by Seller or the Project Company, during the Interim Period (the “Capital
Expenditures Adjustment”), minus (4) $225,000 (in consideration of costs arising from the
termination by Buyer of the O&M Agreement, other than the costs set forth in clause (v) of the
definition of Excluded Liabilities).

     (b) “Agreed Capital Expenditures” shall mean capital expenditures or major maintenance
expenditures that have (i) been agreed by the Parties or (ii) been determined to be expenditures
made in accordance with prudent industry standards as follows: Following notice by Seller of a
proposed capital expenditure or major maintenance expenditures, if Buyer shall not have agreed to
Seller’s proposed capital expenditure or major maintenance expenditures pursuant to the foregoing
clause (i) within 10 Business Days of such notice, Seller may submit to the Independent Engineering
Firm a description of the proposed capital expenditure or major maintenance expenditures along with
necessary supporting documentation as the Independent Engineer may deem appropriate (the “Seller’s
Proposal”). Buyer may, at its election, submit to the Independent Engineering Firm an alternative
good faith proposal to address Seller’s capital expenditure or major maintenance expenditures along
with the necessary supporting documentation as the Independent Engineer may deem appropriate
(including a proposal to make no such expenditures) (the “Buyer’s Proposal”). The Independent
Engineering Firm shall, within 30 Business Days, issue a decision selecting the proposal that it
deems most closely followed or would follow prudent industry practice. The proposal for capital
expenditures or major maintenance expenditures (or a proposal to make no such expenditures)
selected by the Independent Engineering Firm shall constitute “Agreed Capital Expenditures”. For
the avoidance of doubt, Agreed Capital Expenditures shall in any event include any capital
expenditures or major maintenance expenditures the failure of which to make by Seller or the
Project Company would constitute a breach under a Material Contract. For the avoidance of doubt,
nothing in this Section 2.2 shall obligate Seller or the Project Company to postpone making such
capital expenditures or major maintenance expenditures pending the notice to Buyer or the
pronouncement by the Independent Engineering Firm of its decision hereunder. The Party whose
proposal is not selected shall pay the fees and expenses of the Independent Engineering Firm.

     Section 2.3 Closing. The Closing shall take place at the offices of Latham & Watkins
LLP, 885 Third Avenue, New York, NY 10022 at 10:00 A.M. local time, on (a) the later of (i) the

 

 

third Business Day after the conditions to Closing set forth in Articles VII and VIII (other
than actions to be taken or items to be delivered at Closing) have been satisfied or waived or (ii)
if mutually agreed, on the last Business Day of the month in which the conditions to Closing set
forth in Articles VII and VIII (other than actions to be taken or items to be delivered at Closing)
have been satisfied or waived or (b) such other date and at such other time and place as Buyer and
Seller mutually agree in writing; provided, however, that the Closing shall not occur on any date
from and after January 29, 2008 through and including May 3, 2008 without the prior written consent
of Seller in its sole discretion. All actions listed in Section 2.4 or 2.5 that occur on the
Closing Date shall be deemed to occur simultaneously at the Closing.

     Section 2.4 Closing Deliveries by Seller to Buyer. At the Closing, Seller shall
deliver, or shall cause to be delivered, to Buyer (a) an executed counterpart by Seller of an
assignment of the Project Company Interests (the “Company Assignment Agreement”) in the form
attached hereto as Exhibit 2.4 evidencing the assignment and transfer to Buyer of the
Project Company Interests owned by Seller, (b) a certification of non-foreign status in the form
prescribed by Treasury Regulation Section 1.1445-2(c) with respect to Seller, and the owner of such
entity that is treated as a disregarded entity for federal income tax purposes, and (c) an executed
counterpart by Seller of each other Ancillary Agreement to which Seller is a party.

     Section 2.5 Closing Deliveries by Buyer to Seller. At the Closing, Buyer shall deliver
to Seller the following:

     (a) a wire transfer of immediately available funds (to such account or accounts as Seller
shall have notified Buyer of at least 2 Business Days prior to the Closing Date) in an amount equal
to (i) the Base Purchase Price plus (ii) Seller’s good faith estimate (the “Adjustment
Estimate”) of (A) the Closing Date Net Working Capital and (B) the Capital Expenditures Adjustment,
which Seller shall deliver in writing to Buyer at least 3 Business Days prior to the Closing Date,
including the calculation thereof in reasonable detail minus (iii) $225,000; and

     (b) an executed counterpart by Buyer of (i) the Company Assignment Agreement, and (ii) each
other Ancillary Agreement to which Buyer is a party.

     Section 2.6 Post-Closing Adjustment.

     (a) After the Closing Date, Seller and Buyer shall cooperate and provide each other access to
their respective books, records and employees (and those of the Project Company) as are reasonably
requested in connection with the matters addressed in this Section 2.6. Within 60 days after the
Closing Date, Buyer shall determine the Closing Date Net Working Capital and the Capital
Expenditures Adjustment and shall provide Seller with written notice of such determination, along
with reasonable supporting information and calculations (the “Buyer’s Determination”).

     (b) If Seller object to Buyer’s Determination, then it shall provide Buyer written notice
thereof within 30 days after receiving Buyer’s Determination; provided, that Seller and
Buyer shall be deemed to have agreed upon all items and amounts that are not disputed by Seller in
such written notice. If the Parties are unable to agree on the Closing Date Net Working Capital,
within 120 days after the Closing Date, the Parties shall refer such dispute to a firm of
nationally

 

 

recognized independent public accountants mutually acceptable to Buyer and Seller (the
“Independent Accountants”), which firm shall make a final and binding determination as to only
those matters in dispute with respect to this Section 2.6(b) on a timely basis and promptly shall
notify the Parties in writing of its resolution. The Independent Accountants shall not have the
power to modify or amend any term or provision of this Agreement. Each Party shall bear and pay
one-half of the fees and other costs charged by the Independent Accountants. If Seller does not
object to Buyer’s Determination within the time period and in the manner set forth in the first
sentence of this Section 2.6(b) or if Seller accept Buyer’s Determination, the Closing Date Net
Working Capital and the Capital Expenditures Adjustment as set forth in Buyer’s Determination shall
become final and binding upon the Parties for all purposes hereunder.

     (c) If the Closing Date Net Working Capital and the Capital Expenditures Adjustment (as agreed
between the Parties or as determined by the Independent Accountants or otherwise) (the “Final
Adjustment”) is greater than the amounts related to such adjustments in the Adjustment Estimate,
then Buyer shall pay Seller, within 5 Business Days after such amounts are agreed or determined
pursuant to Section 2.6(b), by wire transfer of immediately available funds to an account
designated by Seller, the difference between the Final Adjustment and the amounts related to such
adjustments in the Adjustment Estimate and if the Final Adjustment is less than the amounts related
to such adjustments in the Adjustment Estimate, then Seller shall pay Buyer, within 5 Business Days
after such amounts are agreed or determined pursuant to Section 2.6(b), by wire transfer of
immediately available funds to an account designated by Buyer, the difference between the Final
Adjustment and the amounts related to such adjustments in the Adjustment Estimate.

     Section 2.7 Allocation of Purchase Price.

     (a) Within 120 days after the determination of the Final Adjustment, Seller shall provide to
Buyer a schedule setting forth a proposal for an allocation of the Purchase Price among the Assets
of the Project Company, grouped by the seven asset classes referred to in Treasury Regulations
Section 1.1060-1(c) (the “Purchase Price Allocation Schedule”). Within 30 Business Days after its
receipt of Seller’s proposed Purchase Price Allocation Schedule, Buyer shall propose to Seller any
changes thereto or otherwise shall be deemed to have agreed thereto. If Buyer proposes changes to
Seller’s proposed Purchase Price Allocation Schedule within the 30 Business Day period described
above, Buyer and Seller shall cooperate in good faith to mutually agree upon a Purchase Price
Allocation Schedule as soon as practicable. Notwithstanding the foregoing, Seller and Buyer agree
and acknowledge that neither Seller nor Buyer shall, absent mutual written agreement, challenge or
dispute the allocations set forth in the Purchase Price Allocation Schedule.

     (b) Seller and Buyer each shall prepare an IRS Form 8594, “Asset Acquisition Statement Under
Section 1060,” incorporating the allocations set forth in the Purchase Price Allocation Schedule
mutually agreed upon pursuant to Section 2.7(a), which the Parties shall use to report the
transactions contemplated by this Agreement to the applicable Taxing Authorities. Each of Seller
and Buyer agrees to provide the other promptly with any other information required to complete Form
8594. The Purchase Price Allocation Schedule shall be revised to take into account subsequent
adjustments to the Purchase Price, including any indemnification payments

 

 

(which shall be treated for Tax purposes as adjustments to the Purchase Price), as mutually
agreed upon by the Parties and in accordance with the provisions of Section 1060 of the Code and
the Treasury Regulations thereunder.

     (c) If the Parties are unable to agree on the Purchase Price Allocation Schedule pursuant to
Section 2.7(a) or any subsequent adjustment to the Purchase Price Allocation Schedule pursuant to
Section 2.7(b), the Parties shall refer such dispute to the Independent Accountants, which firm
shall make a final and binding determination as to all matters in dispute with respect to this
Section 2.7 (and only such matters) on a timely basis and promptly shall notify the Parties in
writing of its resolution. The Independent Accountants shall not have the power to modify or amend
any term or provision of this Agreement. Each Party shall bear and pay one-half of the fees and
other costs charged by the Independent Accountants.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING SELLER

     Seller hereby represents and warrants to Buyer as of the date hereof that except as disclosed
in the Schedules:

     Section 3.1 Organization. Seller is a limited liability company duly formed, validly
existing and in good standing under the Laws of its jurisdiction of formation. Seller is duly
qualified or licensed to do business in each other jurisdiction where the actions 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 Seller’s ability to perform such actions under this Agreement or the
Ancillary Agreements to which Seller is party.

     Section 3.2 Authority; Enforceability. Seller has all requisite limited liability
company power and authority to execute and deliver this Agreement and the Ancillary Agreements to
which Seller is a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by Seller of this
Agreement and the Ancillary Agreements to which Seller is a party, and the performance by Seller of
its obligations hereunder and thereunder, have been duly and validly authorized by all necessary
limited liability company action. This Agreement has been duly and validly executed and delivered
by Seller and constitutes, and each Ancillary Agreement to which Seller is a party when executed
and delivered on the Closing Date will constitute, the legal, valid and binding obligation of
Seller enforceable against Seller in accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization, fraudulent conveyance, arrangement, moratorium or other
similar Laws relating to or affecting the rights of creditors generally, or by general equitable
principles.

     Section 3.3 No Conflicts; Consents and Approvals. The execution and delivery by Seller
of this Agreement and the Ancillary Agreements to which Seller is a party do not, and the
performance by Seller of its obligations under this Agreement and the Ancillary Agreements to which
Seller is a party will not:

 

 

     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of the Organizational Documents of Seller;

     (b) assuming all of the Company Consents have been obtained, be in violation of or result in a
breach of or default (or give rise to any right of termination, cancellation or acceleration) under
(with or without the giving of notice, the lapse of time, or both) any material Contract to which
Seller is a party, except for any such violations or defaults (or rights of termination,
cancellation or acceleration) which would not, in the aggregate, reasonably be expected to result
in a material adverse effect on Seller’s ability to perform its obligations hereunder; and

     (c) assuming all required filings, waivers, approvals, consents, authorizations and notices
set forth on Schedule 3.3(c) (collectively, the “Seller Approvals”), Company Consents and other
notifications provided in the ordinary course of business have been made, obtained or given, (i)
conflict with, violate or breach any term or provision of any Law applicable to Seller, except as
would not reasonably be expected to result in a material adverse effect on Seller’s ability to
perform its obligations hereunder or (ii) require any consent or approval of any Governmental
Authority, or notice to, or declaration, filing or registration with, any Governmental Authority,
under any applicable Law, other than such consents, approvals, notices, declarations, filings or
registrations which, if not made or obtained, would not reasonably be expected to result in a
material adverse effect on Seller’s ability to perform its obligations hereunder.

     Section 3.4 Legal Proceedings. Seller has not been served with notice of any Claim, no
Claim is pending and to Seller’s Knowledge none is threatened against Seller, which seeks a writ,
judgment, order, injunction or decree restraining, enjoining or otherwise prohibiting or making
illegal any of the transactions contemplated by this Agreement.

     Section 3.5 Brokers. Seller has no 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 could become liable or obligated.

     Section 3.6 Capitalization. On the Closing Date, Seller will be the direct owner,
beneficially and of record, of all of the Project Company Interests, free and clear of all Liens.
There are not any options, warrants, calls, rights, commitments, rights of first refusal,
securities or agreements of any character to which Seller is bound obligating it or the Project
Company to issue, deliver, or sell, or cause to be issued, delivered or sold, additional Equity
Interests in the Project Company or obligating Seller or the Project Company to grant, extend or
enter into any such option, warrant, call, right, commitment, right of first refusal or agreement.
The Project Company Interests are duly authorized, validly issued, fully paid and non-assessable
and constitute all of the outstanding Equity Interests of the Project Company.

 

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING

THE PROJECT COMPANY

     Seller hereby represents and warrants to Buyer as of the date hereof that except as disclosed
in the Schedules:

     Section 4.1 Organization. The Project Company is a limited liability company duly
formed, validly existing and in good standing under the Laws of its jurisdiction of formation, and
has all requisite limited liability company power and authority to conduct its business as it is
now being conducted and to own, lease and operate its Assets. The Project Company is duly qualified
or licensed to do business in each jurisdiction in which the ownership or operation of its Assets
make such qualification or licensing necessary, except in those jurisdictions where the failure to
be so duly qualified or licensed would not reasonably be expected to result in a Material Adverse
Effect.

     Section 4.2 No Conflicts; Consents and Approvals. The execution and delivery by Seller
of this Agreement and the Ancillary Agreements to which Seller is a party do not, the performance
by Seller of its obligations hereunder and thereunder do not and the consummation of the
transactions contemplated hereby and thereby and the taking of any action contemplated to be taken
by the Project Company hereunder or thereunder will not:

     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of the Organizational Documents of the Project Company;

     (b) assuming all of the consents set forth on Schedule 4.2 (the “Company Consents”) have been
obtained, be in material violation of or result in a material breach of or default (or give rise to
any material right of termination, cancellation or acceleration) under any Material Contract;

     (c) assuming the Seller Approvals, the Company Consents and other notifications provided in
the ordinary course of business have been made, obtained or given, (i) conflict with or result in a
violation or breach of any term or provision of any Law applicable to the Project Company or any of
its material Assets which would reasonably be expected to result in a Material Adverse Effect or
(ii) require the consent or approval of any Governmental Authority, or notice to, or declaration,
filing or registration with, any Governmental Authority, under any applicable Law, other than such
consents, approvals, notices, declarations, filings or registrations which, if not made or
obtained, would not reasonably be expected to result in a Material Adverse Effect; or

     (d) result in the imposition or creation of any Lien on any material Asset of the Project
Company, other than Permitted Liens, or on the Project Company Interests.

     Section 4.3 Capitalization. Schedule 4.3 accurately sets forth the ownership structure
of the Project Company as of the date hereof. As of the date hereof, Seller is the direct or
indirect owner, holder of record, and beneficial owner of the Project Company Interests free and
clear of all Liens, restrictions on transfer or other encumbrances other than (a) Permitted Liens,
(b) those arising pursuant to or described in this Agreement, the Organizational Documents of the
Project Company, or applicable securities Laws or (c) for Taxes not yet due or delinquent and,
without limiting the generality of the foregoing, none of the Project Company Interests are subject
to any voting trust, member or partnership agreement or voting agreement or other agreement, right,
instrument or understanding with respect to any purchase, sale, issuance, transfer, repurchase,
redemption or voting of any Equity Securities of the Project Company, other than the limited

 

 

liability company agreement of the Project Company. The Project Company Interests are duly
authorized, validly issued, fully paid and nonassessable and constitute all of the outstanding
equity interests of the Project Company. Except as set forth on Schedule 4.3, there are no
outstanding Equity Securities of the Project Company. Except as set forth on Schedule 4.3 or as
described in Section 6.21, the Project Company has not granted to any Person any agreement or
option, or any right or privilege capable of becoming an agreement or option, for the purchase,
subscription, allotment or issue of any unissued interests, units or other securities (including
convertible securities, warrants or convertible obligations of any nature) of the Project Company.

     Section 4.4 Business. Except as disclosed in Schedule 4.4 and except for the
Terminated Contracts, (a) the Business of the Project Company is the only business operation
currently carried on by the Project Company and (b) the Assets owned, leased, licensed or
contracted by the Project Company constitute the tangible Assets that are sufficient to operate the
Project as currently operated, except for matters that would not, in the aggregate, reasonably be
expected to result in a Material Adverse Effect.

     Section 4.5 Bank Accounts. Schedule 4.5 sets forth an accurate and complete list of
the names and locations of banks, trust companies and other financial institutions at which the
Project Company maintains accounts of any nature or safe deposit boxes and the names of all persons
authorized to draw thereon, make withdrawals therefrom or have access thereto.

     Section 4.6 Subsidiaries. The Project Company has no subsidiaries and does not own
Equity Securities in any Person.

     Section 4.7 Legal Proceedings. Except as set forth on Schedule 4.7, no Claim is
pending against, and to Seller’s Knowledge, none has been threatened against the Project Company
that (a) affects the Project Company or the Assets of the Project Company and would, in the
aggregate, reasonably be expected to result in a Material Adverse Effect or (b) seeks a writ,
judgment, order, injunction or decree restraining, enjoining or otherwise prohibiting or making
illegal any of the transactions contemplated by this Agreement.

     Section 4.8 Compliance with Laws and Orders. Except as set forth on Schedule 4.8, the
Project Company is in compliance with all Laws and orders applicable to it and its operations or
Assets except where any such failure to comply would not, in the aggregate, reasonably be expected
to result in a Material Adverse Effect.

     Section 4.9 Balance Sheets; No Undisclosed Liabilities. Seller has previously
delivered to Buyer an unaudited balance sheet of the Project Company as at December 31, 2005,
December 31, 2006 and March 31, 2007 (collectively, the “Balance Sheets”). Except as set forth on
Schedule 4.9, the Balance Sheets have been prepared in accordance with GAAP. The Balance Sheets may
not include all footnotes and disclosures required by GAAP. Except for (a) current liabilities
reflected in the Closing Date Net Working Capital, (b) liabilities which will not be payable by the
Project Company after the Closing, (c) liabilities in an aggregate amount up to 10% of the Base
Purchase Price with respect to which Seller, in its sole discretion, has indemnified Buyer, in form
and substance reasonably satisfactory to Buyer, without any effect on Buyer’s rights under Article
X, and (d) liabilities disclosed in Schedule 4.9, the Project

 

 

Company has no liability that would be required to be reflected on the Balance Sheet prepared
in accordance with GAAP which (x) are not reflected or reserved against in the Balance Sheet and
(y) is in excess of $500,000 individually or $5,000,000 in the aggregate. Notwithstanding anything
to the contrary contained herein, Buyer acknowledges and agrees that the consummation of the
transactions contemplated by the Mirant PSA may impact or result in changes to the Balance Sheets
and that Seller is not making any representations or warranties in this Agreement regarding any
such impacts or changes.

     Section 4.10 Absence of Certain Changes. Except as set forth on Schedule 4.10, from
March 31, 2007 to the date of this Agreement, the Project Company has operated in all material
respects in the ordinary course of business, consistent with past practices. From March 31, 2007 to
the date of this Agreement, there has not been any (a) Material Adverse Effect or (b) event or
condition that would reasonably be expected to prevent or delay Seller from consummating the
transactions contemplated by this Agreement.

     Section 4.11 Taxes. Except as set forth on Schedule 4.11, (a) all Tax returns that are
required to be filed on or before the Closing Date by the Project Company have been or will be duly
and timely filed, taking into account all permitted extensions, (b) all material Taxes of the
Project Company that are due and payable have been paid in full, (c) all material withholding Tax
requirements imposed on the Project Company have been satisfied in full, except for amounts that
are being contested in good faith, (d) the Project Company does not have in force any waiver of any
statute of limitations in respect of Taxes or any extension of time with respect to a Tax
assessment or deficiency, (e) there are no pending or active audits or legal proceedings involving
Tax matters or, to Seller’s Knowledge, threatened audits or proposed deficiencies or other claims
for material unpaid Taxes of the Project Company, (f) the Project Company is classified as an
entity disregarded as separate from its owner for federal income tax purposes and has been since
inception, (g) all deficiencies asserted or assessments made as a result of any examination of Tax
returns of the Project Company have been paid in full or are being timely and properly contested in
good faith, and (h) there are no Liens for Taxes (other than Permitted Liens) on any of the Assets
of the Project Company.

     Section 4.12 Regulatory Status. Except as set forth on Schedule 4.12, the Project
Company (i) is an “Exempt Wholesale Generator” within the meaning of the PUHCA of 2005; (ii) is
subject to regulation under the FPA as a “public utility”; (iii) has been authorized by FERC to
make sales of energy and capacity at market-based rates pursuant to Section 205 of the FPA; and
(iv) has been granted blanket authorization by FERC to issue securities and assume liabilities
pursuant to Section 204 of the FPA.

     Section 4.13 Contracts.

     (a) Excluding Contracts for which neither the Project Company nor any of the Assets of the
Project Company will be bound or have liability after Closing and Contracts which can be terminated
upon 30 days’ (or less) notice without material liability and without any material obligations
arising during such 30-day period, Schedule 4.13 sets forth a list as of the date of this Agreement
of the following Contracts to which the Project Company is a party or by which the

 

 

Assets of the Project Company may be bound (the Contracts listed on Schedule 4.13 that meet
the descriptions in this Section 4.13 being collectively, the “Material Contracts”):

     (i) Contracts for the future purchase, exchange or sale of natural gas, other than in
each case Contracts with a nominal value of less than $250,000 individually or $1,750,000 in
the aggregate;

     (ii) Contracts for the future purchase, exchange, transmission or sale of electric power
in any form, including energy, capacity or any ancillary services other than in each case
Contracts with a nominal value of less than $250,000 individually or $1,750,000 in the
aggregate;

     (iii) Contracts for the future transportation of natural gas other than Contracts with a
nominal value of less than $250,000 individually or $1,750,000 in the aggregate;

     (iv) interconnection Contracts;

     (v) other than Contracts of the nature addressed by Section 4.13(a)(i)-(iii), Contracts
(A) for the purchase or sale of any Asset or that grant a right or option to purchase or sell
any Asset, other than in each case Contracts relating to Assets or services with a nominal
value of less than $250,000 individually or $1,750,000 in the aggregate and (B) for the
provision or receipt of any services or that grant a right or option to provide or receive any
services, other than in each case Contracts relating to services with a nominal value of less
than $250,000 individually or $1,750,000 in the aggregate;

     (vi) Contracts under which it has created, incurred, assumed or guaranteed any
outstanding Indebtedness, or under which it has imposed a security interest on any of its
Assets, tangible or intangible, which security interest secures outstanding Indebtedness;

     (vii) outstanding agreements of guaranty, indemnity, surety or similar obligation, direct
or indirect, by the Project Company;

     (viii) other than Contracts of the nature addressed by Section 4.13(a)(i) — (iii),
Contracts with Seller or any of its Affiliates relating to the future provision of goods or
services;

     (ix) any collective bargaining Contracts or other employment Contracts;

     (x) outstanding futures, swap, collar, put, call, floor, cap, option or other Contracts
that are intended to benefit from or reduce or eliminate the risk of fluctuations in interest
rates or the price of commodities, including electric power, in any form, including energy,
capacity or any ancillary services, natural gas or securities, other than in each case
Contracts with a nominal value of less than $250,000 individually or $1,750,000 in the
aggregate;

     (xi) Contracts that limit the Project Company’s freedom to compete in any line of
business or in any geographic area;

     (xii) partnership, joint venture, or limited liability company agreements;

 

 

     (xiii) real property leases and any ground leases relating to the Property;

     (xiv) Contracts relating to any Equity Securities or other securities of the Project
Company or rights in connection therewith;

     (xv) Contracts with Governmental Authorities regarding Taxes or tax abatement and water
services; and

     (xvi) any other Contracts reasonably necessary for the Project Company to conduct its
Business with a total nominal value of greater than $250,000 individually or $1,750,000 in the
aggregate.

     (b) Seller has provided Buyer with, or access to, copies of all Material Contracts.

     (c) Each of the Material Contracts (other than any Material Contract which will terminate or
expire by its terms prior to Closing) is in full force and effect in all material respects and
constitutes a legal, valid and binding obligation of the Project Company party thereto and, to
Seller’s Knowledge, of the other parties thereto except in each case where the failure to be in
full force and effect or constitute a binding obligation would not reasonably be expected to result
in a Material Adverse Effect.

     (d) The Project Company is not in material breach or material default under any Material
Contract and to Seller’s Knowledge, no other party to any of the Material Contracts is in material
breach or material default thereunder.

     Section 4.14 Real Property. The Project Company owns or leases (and with respect to
each such (a) owned Property that is material to the Project Company, has good, valid and
marketable fee simple title to, or (b) lease that is material to the Project Company, has good and
valid leasehold title to) all material Property described in Schedule 4.14 as being owned or leased
by the Project Company, in each case, free and clear of all Liens (except for Permitted Liens). The
title insurance premium on the Title Policy has been paid and the Title Policy is in effect. The
Property and the Business comply with all applicable zoning, subdivision and land use Laws and
special use Permits, except where any such failure to comply would not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect.

     Section 4.15 Permits.

     (a) Schedule 4.15(a) sets forth all Permits held by the Project Company that are required for
the ownership and operation of the Project by the Project Company in the manner in which they are
currently owned and operated, except where the absence of such Permit would not, in the aggregate,
reasonably be expected to result in a Material Adverse Effect. All Permits set forth on Schedule
4.15(a) are in full force and effect.

     (b) The Project Company is in compliance with all Permits set forth on Schedule 4.15(a),
except where any such failure to comply would not, in the aggregate, reasonably be expected to
result in a Material Adverse Effect, and the Project Company has not received any written
notification from any Governmental Authority alleging that it is in violation of any such Permits,

 

 

except where any such violations would not, in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

     Section 4.16 Environmental Matters.

     (a) Seller has made available to Buyer copies of all material environmental site assessment
reports in the possession of Seller or the Project Company that are not subject to a claim of legal
privilege by Seller, Mirant, any Affiliate of Mirant or the Project Company and that relate to
environmental matters in connection with operation of the Project.

     (b) Except as would not reasonably be expected to have a Material Adverse Effect:

     (i) the Project Company has operated, since January 3, 2006, in compliance with all
applicable Environmental Laws;

     (ii) the Project Company has not been served with notice of any Environmental Claims,
actions, proceedings or investigations that are currently outstanding, and no Environmental
Claims are pending or, to Seller’s Knowledge, threatened, against the Project Company by any
Governmental Authority under any Environmental Laws;

     (iii) there is no site to which the Project Company has transported or arranged for the
transport of Hazardous Materials associated with the Project Company which, to Seller’s
Knowledge, is the subject of any environmental action that would result in an Environmental
Claim;

     (iv) there has been no Release of any Hazardous Material at or from the Project in
connection with construction of the Project or the Project Company’s operations at the Project
that would result in an Environmental Claim; and

     (v) Since May 1, 2007, the Project Company has not filed a notice with any Government
Authority of any Release of any Hazardous Material to the environment, other than those
Release notifications which are subject to and would be filed pursuant to any Permits held by
the Project Company.

     (c) Schedule 4.16(c) sets forth all emission reduction credits and emissions allowances that
have been allocated to the Project Company as of the date of this Agreement.

     Section 4.17 Intellectual Property.

     (a) The Project Company owns, or has the licenses or rights to use for its Business, all
material Intellectual Property currently used in its Business.

     (b) To Seller’s Knowledge, as of the date of this Agreement, the Project Company had not
received from any third party a claim in writing that the Project Company is infringing in any
material respect the Intellectual Property of such third party.

 

 

     Section 4.18 Brokers. The Project Company has no liability or obligation to pay fees
or commissions to any broker, finder or agent with respect to the transactions contemplated by this
Agreement.

     Section 4.19 Employees and Labor Matters. Except as described on Schedule 4.19:

     (a) the Project Company does not have, and on the Closing Date will not have, any employees;

     (b) the persons identified on Schedule 4.19(b) provide full-time on site services to the
Project Company and are employed by a third party vendor pursuant to an agreement with an Affiliate
of Seller (the “Employees”);

     (c) Schedule 4.19(c) lists each Contract between a third-party vendor and the Project Company,
Seller or any Affiliate of Seller pursuant to which employees of a third-party vendor provide
material on site employee services principally dedicated to the Project Company;

     (d) the persons identified with an asterisk by their name on Schedule 4.19(b) are represented
by a union or other collective bargaining entity (the “CBA Employees”);

     (e) there has not occurred, nor, to Seller’s Knowledge has there been threatened, a labor
strike, request for representation, organizing campaign, work stoppage, slowdown, or lockout or
other labor dispute by or involving any of the Employees with respect to the Project Company in the
past two years, except, with respect to any such events or occurrences arising after the date
hereof but on or prior to the Closing Date, as would not reasonably be expected to result in a
Material Adverse Effect;

     (f) To the Knowledge of Seller, neither Seller nor any of its Affiliates has received written
notice of any unfair labor practice charge against the Project Company or against Seller or any of
its Affiliates regarding practices/acts at the Project Company pending before the National Labor
Relations Board and neither Seller nor any of its Affiliates has received notice that any petition
respecting any Employees or former employees of Seller or its Affiliates who were principally
dedicated to the Project Company has been filed with the National Labor Relations Board, except for
such matters as, in each case, would not reasonably be expected to result in a Material Adverse
Effect;

     (g) neither Seller nor any of its Affiliates have received any notice with respect to the
Employees and former employees of Seller or its Affiliates who were principally dedicated to the
Project Company of any charges before any Governmental Authority responsible for the prevention of
unlawful employment practices and Seller and its Affiliates are in compliance with all applicable
Laws respecting employment practices, occupational health and safety, labor relations, terms and
conditions of employment and similar Laws with respect to the Employees and former employees of
Seller or its Affiliates who were principally dedicated to the Project Company, except, in each
case, where such notice or failure to comply would not reasonably be expected to result in a
Material Adverse Effect; and

 

 

     (h) neither Seller nor any of its Affiliates have received notice of any investigation related
to the Employees and former employees of Seller or its Affiliates who were principally dedicated to
the Project Company by a Governmental Authority responsible for the enforcement of labor or
employment Laws and regulations and, to Seller’s Knowledge, no such investigation is threatened,
except, with respect to any such notices received or investigation threatened after the date hereof
but on or prior to the Closing Date, as would not reasonably be expected to result in a Material
Adverse Effect.

     Section 4.20 Employee Benefits.

     (a) Schedule 4.20 contains a complete list of all Benefit Plans. Copies of all Benefit Plan
summary plan descriptions have been made available to Buyer for review. To the Knowledge of Seller,
each Benefit Plan has been administered in accordance with its terms and the Project Company has
met its obligations with respect to such Benefit Plan and has made all required contributions
thereto. To the Knowledge of Seller, the Project Company and all Benefit Plans are in compliance in
all material respects with the currently applicable provisions of ERISA and the Code.

     (b) The Project Company does not have, and on the Closing Date will not have, any liability
with respect to any “employee benefit plans” (as defined in Section 3(3) of ERISA).

     (c) All the Benefit Plans that are intended to be qualified under Section 401(a) of the Code
have received determination or opinion letters from the Internal Revenue Service to the effect that
such Benefit Plans are qualified and the plans and the trusts related thereto are exempt from
federal income taxes under Sections 401(a) and 501(a), respectively, of the Code; no such
determination or opinion letter has been revoked; and, to the Knowledge of Seller, (i) such
revocation has not been threatened and (ii) no act or omission has occurred, that would adversely
affect a Benefit Plan’s qualification.

     (d) Except as set forth in Schedule 4.20, there does not now exist, nor do any circumstances
exist that would result in, any Controlled Group Liability that would be a liability of Buyer
following the Closing. Without limiting the generality of the foregoing, neither Seller, nor the
Project Company nor any ERISA Affiliate has engaged in any transaction described in Section 4069 or
Section 4204 of ERISA.

     (e) To the Knowledge of Seller, no act or omission has occurred and no condition exists with
respect to any Benefit Plan that would subject the Project Company to any fine, penalty, tax or
liability of any kind imposed under ERISA or the Code, the imposition of which would reasonably be
expected to result in a Material Adverse Effect.

     (f) Except as set forth on Schedule 4.20, with respect to each Multiemployer Plan contributed
to by the Project Company or the ERISA Affiliates of the Project Company: (i) neither the Project
Company nor the ERISA Affiliates of the Project Company have incurred any Withdrawal Liability that
has not been satisfied in full; and (ii) neither of the Project Company nor ERISA Affiliates of the
Project Company has received any notification, nor has any reason to believe, that any such plan is
in reorganization, has been terminated, or may be reasonably expected to be in reorganization or to
be terminated.

 

 

     Section 4.21 May Balance Sheet. The unaudited balance sheet of the Project Company as
of May 1, 2007 (the “May Balance Sheet”) to be delivered by Seller to Buyer pursuant to Section
6.22 shall be prepared from the books and records of the Project Company and present fairly, in all
material respects, the financial condition of the Project Company as of the date thereof. The May
Balance Sheet shall be prepared in accordance with GAAP, subject to the absence of footnotes, cash
flow statements, income statements, changes in position and other presentation items required by
GAAP, and normal year-end adjustments.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF BUYER

     Buyer hereby represents and warrants to Seller that:

     Section 5.1 Organization. Buyer is a corporation duly formed, validly existing and in
good standing under the Laws of the State of Michigan. Buyer is duly qualified or licensed to do
business in each other jurisdiction where the actions 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
its ability to perform such actions hereunder.

     Section 5.2 Authority; Enforceability. Buyer has all requisite corporate power and
authority to enter into this Agreement and the Ancillary Agreements to which Buyer is a party, to
perform its obligations hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby. The execution and delivery by Buyer of this Agreement and the Ancillary
Agreements to which Buyer is a party and the performance by Buyer of its obligations under this
Agreement and the Ancillary Agreements to which Buyer is a party have been duly and validly
authorized by all necessary corporate action on behalf of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and constitutes, and each Ancillary Agreement to which the
Seller is a party when executed and delivered on the Closing Date will constitute, the legal, valid
and binding obligation of Buyer enforceable against Buyer in accordance with its terms except as
the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
arrangement, moratorium or other similar Laws relating to or affecting the rights of creditors
generally or by general equitable principles.

     Section 5.3 No Conflicts. The execution and delivery by Buyer of this Agreement and
the Ancillary Agreements to which Buyer is a party do not, and the performance by Buyer of its
obligations hereunder and thereunder and the consummation of the transactions contemplated hereby
and thereby will not:

     (a) conflict with or result in a violation or breach of any of the terms, conditions or
provisions of such Person’s Organizational Documents;

     (b) be in violation of or result in a breach of or default (or give rise to any right of
termination, cancellation or acceleration) under (with or without the giving of notice, lapse of
time, or both) any material Contract to which Buyer is a party, except for any such violations or
defaults (or rights of termination, cancellation or acceleration) which would not, in the
aggregate,

 

 

reasonably be expected to result in a material adverse effect on Buyer’s ability to perform
its obligations hereunder; or

     (c) assuming all required filings, waivers, approvals, consents, authorizations and notices
set forth in Schedule 5.3 (collectively, the “Buyer Approvals”) have been made, obtained or given,
(i) conflict with, violate or breach any term or provision of any Law applicable to Buyer or any of
its Assets which would reasonably be expected to result in a material adverse effect on Buyer’s
ability to perform its obligations hereunder or (ii) require any material consent or approval of
any Governmental Authority or notice to, or declaration, filing or registration with, any
Governmental Authority, under any applicable Law, other than such consents, approvals, notices,
declarations, filings or registrations which, if not made or obtained, would not reasonably be
expected to result in a material adverse effect on Buyer’s ability to perform its obligations
hereunder.

     Section 5.4 Legal Proceedings. Buyer has not been served with notice of any Claim, and
to Buyer’s knowledge, none is threatened, against Buyer which seeks a writ, judgment, order or
decree restraining, enjoining or otherwise prohibiting or making illegal any of the transactions
contemplated by this Agreement.

     Section 5.5 Compliance with Laws and Orders. Buyer is not in violation of or in
default under any Law or order applicable to Buyer or its Assets the effect of which, in the
aggregate, would reasonably be expected to hinder, prevent or delay Buyer from performing its
obligations hereunder.

     Section 5.6 Brokers. Buyer does not 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 Seller or the Project Company could become liable or obligated.

     Section 5.7 No Knowledge of Seller’s Breach. Neither Buyer nor any of its Affiliates
or Representatives has actual knowledge of any breach of any representation or warranty by Seller
or of any other condition or circumstance that would excuse Buyer from its timely performance of
its obligations hereunder. Buyer shall notify Seller as promptly as practicable if any such
information comes to its attention prior to Closing.

     Section 5.8 Financial Resources. Buyer has and will have available at the Closing
funds sufficient to pay the Purchase Price and the fees and expenses of Buyer related to the
transactions contemplated by this Agreement. Buyer knows of no circumstance or condition that could
be reasonably expected to prevent the availability at Closing of such cash.

     Section 5.9 No Conflicting Contracts. Except as set forth in Schedule 5.9, neither
Buyer nor any of its Affiliates is a party to any Contract to build, develop, acquire or operate
any power facility that would reasonably be expected to cause a delay in any Governmental
Authority’s granting of a Buyer Approval or a Seller Approval, and neither Buyer nor any of its
Affiliates has any plans to enter into any such Contract prior to the Closing Date.

     Section 5.10 Opportunity for Independent Investigation; No Other Representations.
Prior to its execution of this Agreement, Buyer has conducted to its satisfaction an independent

 

 

investigation and verification of the current condition and affairs of the Project Company,
the Assets of the Project Company and the Project, including the condition, the cash flow and the
prospects of the Project Company. In making its decision to execute this Agreement and to purchase
the Company Interests, Buyer has relied and will rely solely upon the results of such independent
investigation and verification and the terms and conditions of this Agreement. Buyer acknowledges
that: (a) it has had the opportunity to visit with Seller and meet with its Representatives to
discuss the Project Company and its condition, cash flows and prospects, (b) all materials and
information requested by Buyer have been provided to Buyer to Buyer’s reasonable satisfaction; and
(c) except as set forth in Article III and Article IV, none of Seller, the Project Company or any
Affiliate thereof makes any representation or warranty, express or implied, as to the Project
Company or the Assets of the Project Company.

ARTICLE VI

COVENANTS

     The Parties hereby covenant and agree as follows:

     Section 6.1 Regulatory and Other Approvals. From the date of this Agreement until
Closing (the “Interim Period”):

     (a) The Parties will, in order to consummate the transactions contemplated hereby, (i) take
all Reasonable Best Efforts necessary, and proceed diligently and in good faith and use all
Reasonable Best Efforts, as promptly as practicable to obtain the Seller Approvals, Company
Consents, the Acceptable Order and Buyer Approvals and to make all required filings required to be
made by it with, and to give all required notices to, Governmental Authorities, and (ii) provide
such other information and communications to such Governmental Authorities or other Persons as such
Governmental Authorities or other Persons may reasonably request in connection therewith.

     (b) The Parties will provide prompt notification to each other when any such approval referred
to in Section 6.1(a) is obtained, taken, made, given or denied, as applicable, and will advise each
other of any material communications with any Governmental Authority or other Person regarding any
of the transactions contemplated by this Agreement.

     (c) In furtherance of the foregoing covenants:

     (i) Each Party shall prepare, as soon as is practical following the execution of this
Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required to be filed by such Party with the FERC or under the HSR Act or
any other federal, state or local Laws (excluding with respect to the MPSC filing, which is
provided for under clause (iv) below). Each Party shall submit such filings as soon as
practicable, but in no event later than (i) 45 days (subject to extension of such period upon
consent of the other party, which consent shall not be unreasonably withheld) after the
execution hereof for filings with the FERC, and (ii) 21 days after the execution hereof for
filings under the HSR Act or any FCC filings. The Parties shall promptly furnish each other
with copies of any notices, correspondence or other written communication from the

 

 

relevant Governmental Authority, shall promptly make any appropriate or necessary
subsequent or supplemental filings and shall cooperate in the preparation of such filings as
is reasonably necessary and appropriate. Each Party shall have the right to review in advance
all information related to Seller, the Project Company or Buyer, as applicable, and the
transactions contemplated by this Agreement with respect to any filing made by the other Party
in connection with the transactions contemplated by this Agreement.

     (ii) The Parties shall not, and shall cause their respective Affiliates not to, take any
action that is intended to adversely affect the approval of any Governmental Authority of any
of the filings referenced in clause (i).

     (iii) Buyer shall cooperate in good faith with all Governmental Authorities and shall
undertake Reasonable Best Efforts to complete promptly and lawfully the transactions
contemplated by this Agreement.

     (iv) Buyer shall prepare, as soon as is practical following the execution of this
Agreement, all necessary filings in connection with the transactions contemplated by this
Agreement that may be required to be filed by such Party with the MPSC. Buyer shall submit
such filings as soon as practicable, but in no event later than 45 days (subject to extension
of such period upon consent of the other party, which consent shall not be unreasonably
withheld) after the execution hereof for filings with the MPSC. Buyer shall promptly furnish
each other with copies of any notices, correspondence or other written communication from the
relevant Governmental Authority, shall promptly make any appropriate or necessary subsequent
or supplemental filings. Seller shall have the right to review in advance all information
related to Seller, the Project Company or Buyer and the transactions contemplated by this
Agreement with respect to any filing made by Buyer in connection with the transactions
contemplated by this Agreement. Buyer shall not, and shall cause its Affiliates not to, take
any action that is intended to adversely affect the approval of the MPSC of the filing
referenced in clause (iv).

     (v) Seller shall file with the appropriate Governmental Authority an application for the
transfer of the Wastewater Permit to Buyer.

     Section 6.2 Access of Buyer and Seller.

     (a) During the Interim Period, Seller will, and will cause the Project Company and its
Representatives to (i) provide Buyer and its Representatives with reasonable access, upon
reasonable prior notice and during normal business hours, to the Project Company and the officers
and employees of Seller and its Affiliates who have significant responsibility for the Project
Company, but only to the extent that such access does not unreasonably interfere with the business
of Seller or the Business and that such access is reasonably related to the requesting Party’s
obligations and rights hereunder, and subject to compliance with applicable Laws and any Contracts
or Permits to which Seller, the Project Company or any of their Affiliates is a party; provided,
however, that Seller shall have the right to (x) have a Representative present for any
communication with employees or officers of Seller or its Affiliates, (y) impose reasonable
restrictions and requirements for safety purposes and (z) restrict access to any privileged

 

 

information relating to any pending or threatened Claim, (ii) subject to the foregoing clause
(z), furnish Buyer, Buyer’s Representatives and Buyer’s prospective lenders and their
representatives (collectively, “Buyer’s Advisors”) with copies of all such contracts, books and
records, and other existing documents and data as Buyer may reasonably request, and (iii) furnish
Buyer and Buyer’s Advisors with such additional financial, operating, and other data and
information as Buyer may reasonably request.

     (b) Buyer agrees to indemnify and hold harmless Seller, its Affiliates and its Representatives
for any and all liabilities, losses, costs or expenses incurred by Seller, its Affiliates or its
Representatives to the extent arising out of the access rights under this Section 6.2, including
any Claims by any of Buyer’s Representatives for any injuries or property damage while present on
the Property.

     (c) From and after Closing, Buyer agrees to preserve and keep the books and records of the
Project Company (including all accounting records) for a period of seven (7) years from the
Closing, or for any longer periods as may be required by any Governmental Authority or ongoing
litigation. If Buyer wishes to destroy such records after such time period, it shall give 60 days’
prior written notice to Seller and Seller shall have the right at its option and expense, upon
prior written notice within such 60-day period, to take possession of the books and records within
90 days after the date of Buyer’s notice to Seller. From and after Closing, Buyer agrees, upon
reasonable prior notice from Seller, to provide to Seller and its Representatives access to or
copies of books and records of the Project Company to the extent relating to events that occurred
prior to Closing and to the extent needed for a legitimate business purpose.

     Section 6.3 Certain Restrictions.

     (a) Except as required or expressly permitted hereby, or as consented to by Buyer (which
consent shall not be unreasonably withheld, conditioned or delayed), or as otherwise set forth in
Schedule 6.3, during the Interim Period, Seller will (i) cause the Project Company to operate in
the ordinary course of business consistent with Prior Electrical Practices, (ii) use Reasonable
Best Efforts to preserve, maintain and protect in all material respects consistent with past
practices the Assets, rights, Properties and goodwill of the Project Company (including by using
Reasonable Best Efforts to maintain in all material respects the Project Company’s relationships
with customers, suppliers and Governmental Authorities), and (iii) use Reasonable Best Efforts to
maintain the Permits in accordance with past practices. Without limiting the foregoing, except (x)
as otherwise required or expressly permitted hereby or required by the terms of any Permit
identified on Schedule 4.15(a) or any Material Contract, (y) as set forth in Schedule 6.3 or (z) as
consented to by Buyer, which consent shall not be unreasonably withheld, conditioned or delayed
(except that this Section 6.3 shall not apply to Terminated Contracts or services terminated
pursuant to Section 6.6), during the Interim Period, Seller shall not, and shall cause the Project
Company not to, with respect to the Project Company or the Project:

     (i) (A) create any Lien (other than a Permitted Lien) against any of the Assets of the
Project Company, or (B) permit any Lien (other than a Permitted Lien or any Lien permitted
after the date hereof by the Project Company or any Affiliate of Seller the release

 

 

of which Seller is pursuing by commercially reasonable efforts) against any of the Assets
of the Project Company;

     (ii) except for any Contract entered into, terminated or amended in the ordinary course
of business consistent with past practices which will be fully performed prior to Closing,
including short-term hedges, (A) enter into any Material Contract or any other Contract
involving total consideration throughout its term in excess of $250,000 individually or
$1,750,000 in the aggregate for all such Contracts or (B) grant any waiver of any material
term under, or give any material consent with respect to, any Material Contract or any other
Contract which waivers involve total consideration throughout its term in excess of $250,000
individually or $1,750,000 in the aggregate for all such waivers;

     (iii) sell, transfer, remove, assign, convey, distribute or otherwise dispose of, or use,
other than in the ordinary course of business consistent with past practices, any material
Asset of the Project Company, including capital spares and other inventory;

     (iv) sell, transfer, assign or convey the emissions allowances or emission reduction
credits set forth on Schedule 4.16(c) or any emissions allowances or emission reduction
credits allocated to the Project Company after the date hereof; provided that nothing in this
clause (iv) shall restrict the use after the date hereof by the Project Company of any
emissions allowances or emission reduction credits;

     (v) other than accounts payable in the ordinary course of business, incur, create, assume
or otherwise become liable for Indebtedness or issue any debt securities or assume or
guarantee the obligations of any other Person;

     (vi) except as may be required to meet the requirements of applicable Law or GAAP, change
any accounting method or practice in a manner that is inconsistent with past practice in a way
that would materially and adversely affect the Business or the Project Company;

     (vii) fail to maintain its limited liability company existence merge or consolidate the
Project Company with any other Person or cause the Project Company to acquire all or
substantially all of the Assets of any other Person or take any other action that would cause
the Project Company to be treated as other than a disregarded entity or a partnership for
federal income tax purposes prior to the Closing;

     (viii) issue, reserve for issuance, pledge or otherwise encumber, sell or redeem or enter
into any Contract with respect to any limited liability company interests, or Equity
Securities of the Project Company;

     (ix) liquidate, dissolve, recapitalize, reorganize or otherwise wind up its business or
operations of the Project Company;

     (x) cause the Project Company to purchase any securities of any Person, except for
short-term investments made in the ordinary course of business consistent with past practices;

 

 

     (xi) amend or modify the Organizational Documents of the Project Company;

     (xii) cancel any Indebtedness or waive any claims or rights having a value in excess of
$500,000;

     (xiii) make any new, or change any existing, material election with respect to Taxes, or
settle any material Tax liability that would adversely affect Buyer or the Project Company
after the Closing;

     (xiv) incur any capital expenditure or major maintenance expenditure in excess of the
amounts set forth on the Budget, except for Agreed Capital Expenditures;

     (xv) settle any dispute or Claim or compromise or settle any material liability which
results in a material non-current liability becoming due from the Project Company after
Closing or restrictions or limitations that materially and adversely affect the Project
Company’s ability to conduct business after Closing;

     (xvi) except in the ordinary course of business consistent with past practices or as
otherwise required by the terms of any collective bargaining agreement, increase salaries or
aggregate benefits payable to the Employees;

     (xvii) fail to discharge any material liability of the Project Company or make any
material payment of the Project Company as it comes due except in connection with a good faith
dispute; or

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

     (b) Notwithstanding the foregoing, Seller may permit the Project Company to take commercially
reasonable actions with respect to emergency situations as reasonably determined by Seller so long
as Seller shall, upon receipt of notice of any such actions, promptly inform Buyer of any such
actions taken outside the ordinary course of business consistent with past practices.

     Section 6.4 Use of Certain Names.

     (a) Within 10 days following Closing, Buyer shall cause the Project Company to cease using the
name “LS Power” and any word or expression similar thereto or constituting an abbreviation or
extension thereof (the “Seller Marks”), including eliminating the Seller Marks from the Property
and Assets of the Project Company and disposing of any unused stationery and literature of the
Project Company bearing the Seller Marks, and thereafter, Buyer shall not, and shall cause the
Project Company and its Affiliates not to, use the Seller Marks or any logos, trademarks, trade
names, patents or other Intellectual Property rights belonging to Seller or any Affiliate thereof,
and Buyer acknowledges that it, its Affiliates and the Project Company have no rights whatsoever to
use such Intellectual Property. Without limiting the foregoing:

     (i) Within 3 Business Days after the Closing Date, Buyer shall cause the Project Company
whose name contains any of the Seller Marks to change its name to a name that does not contain
any of the Seller Marks.

 

 

     (ii) Within 30 days after the Closing Date, Buyer shall provide evidence to Seller, in a
format that is reasonably acceptable to Seller, that Buyer has made all filings with each
Governmental Authority to change names as required pursuant to clause (i) above and has
provided notice to all applicable Governmental Authorities and all counterparties to the
Material Contracts regarding the sale of the Project Company and the Assets of the Project
Company to Buyer and the new addresses for notice purposes.

     (b) Notwithstanding Buyer’s right to use the Seller Marks for the time periods set forth in
Section 6.4(a), Buyer acknowledges and agrees as follows: (i) neither Buyer nor any of its
Affiliates (including the Project Company after the Closing Date) shall be deemed an agent,
representative or joint venture partner of Seller; (ii) Seller shall retain sole and exclusive
ownership of the Seller Marks, and all goodwill and rights related thereto; (iii) all use of the
Seller Marks by Buyer and its Affiliates (including the Project Company after the Closing Date)
shall inure exclusively to the benefit of Seller; (iv) Buyer and its Affiliates (including the
Project Company after the Closing Date) shall take no action inconsistent with Seller’s rights, or
the rights of any of Seller’s Affiliates, with respect to the Seller Marks; (v) Buyer and its
Affiliates (including the Project Company after the Closing Date) shall maintain, or cause to be
maintained, the quality of the respective goods and services associated with the use of the Seller
Marks by Buyer or its Affiliates at substantially the same level maintained by Seller or its
respective Affiliates immediately prior to the Closing Date; (vi) Buyer and its Affiliates
(including the Project Company after the Closing Date) shall not engage in any conduct or take part
in any activity that would be reasonably likely to (A) impair the validity or enforceability of the
Seller Marks, (B) dilute the distinctiveness of the Seller Marks, (C) disparage the Seller Marks or
(D) be considered an infringement or other violation of the rights of Mirant, Seller or their
respective Affiliates in the Seller Marks; (vii) Buyer and its Affiliates (including the Project
Company after the Closing Date) shall not co-brand any of their goods or services (or
communications describing such goods or services) using any of the Seller Marks; and (viii)
notwithstanding anything to the contrary contained in Article X, and irrespective of such Article
X, Buyer shall indemnify, defend and hold harmless the Seller Indemnified Parties from, against,
and in respect of, any and all Losses incurred or suffered by Seller or Indemnified Party to the
extent arising out of or relating to any use of any of the Seller Marks by Buyer or any of its
Affiliates (including the Project Company after the Closing Date).

     Section 6.5 Termination of Certain Services and Contracts. Notwithstanding anything in
this Agreement to the contrary, at or prior to the Closing, Seller shall (a) terminate, sever, or
assign to Seller or an Affiliate thereof effective upon or before the Closing any services provided
to the Project Company by Seller or an Affiliate thereof, including the termination or severance of
insurance policies (including those policies referred to in Section 6.8), Tax services, legal
services and banking services (to include the severance of any centralized clearance accounts), (b)
terminate or assign to Seller or any Affiliate thereof each Contract listed on Schedule 6.5, and
(c) cause all Claims or obligations (contingent or otherwise) between the Project Company, on one
hand, and Seller or an Affiliate thereof, on the other, to be released effective immediately
prior to Closing (collectively such services, Contracts, claims or obligations, the
“Terminated Contracts”).

 

 

     Section 6.6 Employee and Benefit Matters

     (a) Buyer shall, within 45 days after the date hereof, offer employment on an unconditional
basis to all Non-CBA Employees on the terms described in Section 6.6(c), other than the Employees
who are on military leave or who as of the Closing have been, or are reasonably likely to be,
approved for long term disability benefits. From time to time prior to the Closing Date, Seller
shall use its commercially reasonable efforts to update Schedule 4.19(b) to (i) remove any
Employees who cease to provide full-time on site services to the Project Company specified on
Schedule 4.19(b) after the date hereof and (ii) add any person to fill a vacancy that begin
providing full-time on site services to the Project Company specified on Schedule 4.19(b) after the
date hereof.

     (b) Schedule 4.19 sets forth the collective bargaining agreement or agreements to which the
Project Company is a party or is subject (each, a “CBA” and collectively, the “CBAs”). From and
after the Closing Date, Buyer agrees to cause the Project Company to fulfill all of the Project
Company’s obligations under the CBA, including, without limitation, (i) offering employment to all
CBA Employees and (ii) treating all CBA Employees in accordance with the terms of such CBA through
the expiration date or earlier permitted termination of the CBA. Except for the obligation to make
contributions to a Multiemployer Plan in accordance with the CBA, Buyer and its Affiliates shall
not assume sponsorship of or any obligation under any Benefit Plans, but instead shall establish
their own benefit plans or otherwise contribute to appropriate benefit plans in order to comply
with the terms of the CBA.

     (c) Immediately following the Closing Date and for a period of at least two (2) years from the
Mirant Closing, each Non-CBA Employee who accepts Buyer’s offer of employment (each, a “Transferred
Employee”) shall be paid an annual rate of salary or an hourly wage and a bonus that is the same or
greater than that being paid to such Transferred Employee immediately before the Closing, shall
have the same (or better) terms and conditions of employment, including, but not limited to
vacation and paid time-off policies, as in effect on the Closing Date and shall immediately
participate in employee benefit plans of the Buyer that are equivalent in the aggregate to the
employee benefit plans covering such Transferred Employee immediately before the Closing.

     (d) Without limiting the generality of Section 6.6(a), Buyer agrees that (i) Buyer will cause
its benefit plans to recognize all previous service principally dedicated to the Project Company
for the purpose of determining eligibility for and entitlement to benefits, including vesting and
benefit accrual; (ii) Buyer will cause one or more group health plans offered to Transferred
Employees to recognize all deductibles and coinsurance payments accrued by the Transferred
Employees prior to the Closing Date and to waive any preexisting condition limitations, actively at
work exclusions and waiting periods for the Transferred Employees; (iii) for the remainder of the
calendar year in which the Mirant Closing occurs and for the two (2) succeeding years, the vacation
and paid time-off offered to the Transferred Employees shall be equal to or greater than the
vacation and paid time-off offered to such Transferred Employees on the Closing Date; (iv) Buyer
shall maintain for at least two (2) years starting on the Mirant Closing the same or better
severance arrangements applicable to the Transferred Employees that were in effect on the
Closing Date; and (v) after the second anniversary of the Mirant Closing, subject to applicable

 

 

Law, Buyer shall provide the Transferred Employees with base salary and overall benefits
(including retiree benefits) that are no less favorable, in the aggregate, than those then provided
to similarly-situated employees of Buyer.

     (e) Buyer shall take the necessary action to cause Buyer’s defined contribution plan or plans
to accept the rollovers of any “eligible rollover distributions” (as defined in the Code) of
Transferred Employees from any qualified plans in which Transferred Employees are participating
immediately prior to Closing.

     (f) Buyer assumes no liability with respect to, and receives no right or interest in, any
Benefit Plan. At the close of business on the Closing Date, all Employees shall cease participation
in all Benefit Plans, except with respect to benefits accrued as of, or claims incurred on or prior
to, the Closing Date, and except that each Employee who is on long-term disability leave
immediately prior to the Closing shall continue to be covered by the long-term disability plan
maintained for the benefit of such Employee as of the Closing Date for such covered disability.

     (g) All Employees shall become vested in their benefits accrued in any Benefit Plan as of the
Closing Date in accordance with the terms of such Benefit Plan.

     (h) Buyer shall be a “successor employer” (as described in the regulations under Section 4980B
of the Code) for purposes of providing continuation group health plan coverage as required under
Section 4980B of the Code (“COBRA Continuation Coverage”) and shall provide COBRA Continuation
Coverage for the Employees and their “qualified beneficiaries” (as defined in Section 4980B of the
Code) with respect to “qualifying events” (as defined in Section 4980B of the Code) that occur on,
prior to, or after the Closing Date.

     (i) Within a reasonable time prior to Closing, Seller shall provide Buyer with such pertinent
data or information as Buyer shall reasonably require to determine each Employee’s service,
compensation or any other information related to benefits necessary to implement the requirements
of this Section 6.6 on the Closing Date. To the extent the consent of an Employee is required in
order for Seller to deliver any such pertinent data, records or information to Buyer, Seller agrees
to use its commercially reasonable efforts to secure such consent.

     (j) Buyer shall have the right to use a third party vendor to hire Employees and to perform
certain actions on behalf of Buyer under this Section 6.6, but no such use or designation shall
release Buyer from its obligations hereunder.

     Section 6.7 Indebtedness. Notwithstanding anything in this Agreement to the contrary,
prior to or at the Closing, Seller shall cause any and all Indebtedness of the Project Company to
be paid in full and any and all Liens (other than (i) Permitted Liens, except for those Permitted
Liens securing any Indebtedness existing prior to Closing, and (ii) Liens created by or at the
behest of Buyer) securing any such Indebtedness to be released such that Buyer shall acquire the
Project Company free of any such Indebtedness or any such Liens.

     Section 6.8 Insurance. Seller shall maintain or cause to be maintained in full force
and effect the material insurance policies covering the Assets of the Project Company until the

 

 

Closing or shall replace them with reasonably comparable policies. All such insurance coverage
shall be terminated as of the Closing. Buyer shall be solely responsible for providing insurance to
the Project Company for any event or occurrence that occurs after the Closing. Without limiting the
rights of Buyer set forth elsewhere in this Agreement, for a period of two years after the Closing
Date, if any claims may reasonably be made, or Losses occur prior to the Closing Date, that relate
to the Project Company, the Assets of the Project Company, the Project or the Business, and such
claims, or the claims associated with such Losses, may be made against third-party insurance
policies retained by Seller or its Affiliates (and specifically not any self-insurance), then
Seller (on behalf of itself and its Affiliates) shall, at Buyer’s request and at Buyer’s sole cost
and expense (which costs and expenses shall be reimbursed to Seller, as incurred), use its
commercially reasonable efforts in an effort to permit after the Closing Date Buyer in cooperation
with Seller to file, notice and otherwise continue to pursue such claims and recover proceeds under
the terms of such policies (but only to the extent the terms and conditions of such policies
reasonably would provide coverage for such claims, or the claims associated with such Losses and it
would not materially interfere with or materially prejudice Seller’s or its Affiliates’
relationships with their insurance carriers), and, subject to all of the foregoing, Seller (on
behalf of itself and its Affiliates) agrees (at Buyer’s sole cost and expense) to otherwise
reasonably cooperate with Buyer or its Affiliates to make the benefits of any such third-party
insurance policies available to Buyer or its Affiliates.

     Section 6.9 Transfer Taxes. Notwithstanding anything in this Agreement to the
contrary, subject to Section 11.3, Buyer and Seller each shall pay 50% of any Transfer Taxes
imposed on Buyer, Seller or the Project Company by Law as a result of the sale of the Company
Interests. Accordingly, if either Buyer or Seller (or their respective Affiliates) is required at
Law to pay more than its share of any such Transfer Taxes, the other such Party shall promptly
reimburse such first Party for such amounts. Seller and Buyer shall timely file their own Transfer
Tax returns as required by Law and shall notify the other Party when such filings have been made.
Seller and Buyer shall cooperate and consult with each other prior to filing such Transfer Tax
returns to ensure that all such returns are filed in a consistent manner. Notwithstanding the
foregoing, Buyer shall be solely responsible for any Transfer Taxes arising from any action to
dissolve, terminate or restructure the Project Company or to convey, distribute or transfer any
assets, properties or other rights by deed, bill of sale or otherwise to or from the Project
Company in each case after the Closing.

     Section 6.10 Books and Records. Seller shall deliver the books and records of the
Project Company in Seller’s possession (including those set forth on Schedule 6.10) to Buyer as
promptly as practicable following the Closing Date if such books and records are not present at the
Project Company on the Closing Date (it being agreed that Seller may retain a copy thereof).

     Section 6.11 Tax Matters. Except as provided in Section 6.9 relating to Transfer
Taxes:

     (a) With respect to any Tax return covering a taxable period ending on or before the Closing
Date (a “Pre-Closing Taxable Period”) that is required to be filed after the Closing Date with
respect to the Project Company, (i) Seller shall cause such Tax return to be prepared in a manner
consistent with practices followed in prior taxable periods and in compliance with applicable
Law except as required by change in Law or fact and shall deliver such Tax return as so prepared

 

 

to Buyer not later than 15 days prior to the due date (including extensions) for filing such
Tax return for Buyer’s review and comments, (ii) Seller shall cooperate and consult with Buyer to
finalize such Tax return, and (iii) thereafter, subject to Seller’s payment to Buyer of such Tax in
compliance with Section 6.11(b), Buyer shall cause such Tax return to be executed and duly and
timely filed with the appropriate Taxing Authority and shall pay all Taxes shown as due and payable
on such Tax return. With respect to any Tax return covering a taxable period beginning on or before
the Closing Date and ending after the Closing Date (a “Straddle Taxable Period”) that is required
to be filed after the Closing Date with respect to the Project Company, (x) Buyer shall cause such
Tax return to be prepared (in a manner consistent with practices followed in prior taxable periods
except as required by Law or fact) and shall deliver a draft of such Tax return to Seller for
Seller’s review and approval at least 15 days prior to the due date (including extensions) for
filing such Tax return, (y) Seller and Buyer shall cooperate and consult with each other in order
to finalize such Tax return, and (z) thereafter, subject to Seller’s payment to Buyer of any
portion of such Tax in compliance with Section 6.11(b), Buyer shall cause such Tax return to be
executed and duly and timely filed with the appropriate Taxing Authority and shall pay all Taxes
shown as due and payable on such Tax return.

     (b) Seller shall be responsible for and indemnify the Buyer Indemnified Parties against, and
Seller shall be entitled to all refunds or credits of, any Tax with respect to the Project Company
that is attributable to a Pre-Closing Taxable Period or to that portion of a Straddle Taxable
Period that ends on the Closing Date. Within 5 days prior to the due date for the payment of any
such Tax, Seller shall pay to Buyer the amount of such Taxes, less any prepaid Taxes. With respect
to a Straddle Taxable Period, Seller and Buyer shall determine the Tax attributable to the portion
of the Straddle Taxable Period that ends on the Closing Date by an interim closing of the books of
the Project Company as of the Closing Date, except for ad valorem, industrial facilities or
property Taxes (“Property Taxes”) and franchise Taxes based solely on capital which shall be
prorated on a daily basis to the Closing Date. For this purpose, any franchise Tax paid or payable
with respect to the Project Company shall be allocated to the taxable period for which payment of
the Tax provides the right to engage in business, regardless of the taxable period during which the
income, operations, assets or capital comprising the base of such Tax is measured. In determining
whether a Property Tax is attributable to a Pre-Closing Taxable Period or a Straddle Taxable
Period, any Property Tax that is based on the assessed value of any assets, property or other
rights as of any lien date or other specified valuation date shall be deemed a Property Tax
attributable to the taxable period (whether a fiscal year or other tax year) specified on the
relevant Property Tax bill that is issued with respect to that lien date or other valuation date.

     (c) Buyer shall be responsible for and indemnify Seller against, and Buyer shall be entitled
to all refunds and credits of, all Taxes of the Project Company that are attributable to a taxable
period (or portion thereof) beginning after the Closing Date.

     (d) With respect to any Tax for which Seller is responsible, Seller shall have the right, at
its sole cost and expense, to control (in the case of a Pre-Closing Taxable Period) or participate
in (in the case of a Straddle Taxable Period) the prosecution, settlement or compromise of any
proceeding involving such Tax, including the determination of the value of property for
purposes of real and personal property ad valorem Taxes. Buyer shall (and shall cause the Project

 

 

Company to) take such action in connection with any such proceeding as Seller shall reasonably
request from time to time to implement the preceding sentence, including the selection of counsel
and experts and the execution of powers of attorney. Notwithstanding the foregoing, Buyer shall be
entitled to participate in any proceeding involving a Pre-Closing Taxable Period, and Seller shall
not settle any proceeding with respect to any issue that could materially and adversely affect
Buyer or the Project Company in a taxable period (or portion thereof) beginning after the Closing
Date without Buyer’s prior written consent, not to be unreasonably withheld. Buyer shall (and shall
cause the Project Company to) give written notice to Seller of its receipt of any notice of any
audit, examination, claim or assessment for any Tax for which Seller is responsible within 20 days
after its receipt of such notice; failure to give any such written notice within such 20-day period
shall limit Seller’s indemnification obligation pursuant to this Agreement to the extent Seller is
actually prejudiced by such failure.

     (e) Seller shall grant to Buyer (or its designees) access at all reasonable times to all of
the information, books and records relating to the Project Company within the possession of Seller
(including workpapers and correspondence with Taxing Authorities), and shall afford Buyer (or its
designees) the right (at Buyer’s expense) to take extracts therefrom and to make copies thereof, to
the extent reasonably necessary to permit Buyer (or its designees) to prepare Tax returns, respond
to Tax audits and investigations, prosecute Tax protests, appeals and refund claims and to conduct
negotiations with Taxing Authorities. Buyer shall grant or cause the Project Company to grant to
Seller (or its designees) access at all reasonable times to all of the information, books and
records relating to the Project Company for Pre-Closing Taxable Periods or Straddle Taxable Periods
within the possession of Buyer (including workpapers and correspondence with Taxing Authorities)
and to any employees of the Project Company, and shall afford Seller (or its designees) the right
(at Seller’s expense) to take extracts therefrom and to make copies thereof, in each case to the
extent reasonably necessary to permit Seller (or its designees) to prepare Tax returns, respond to
Tax audits and investigations, prosecute Tax protests, appeals and refund claims and to conduct
negotiations with Taxing Authorities. After the Closing Date, Seller and Buyer will preserve all
information, records or documents in their respective possessions relating to liabilities for Taxes
of the Project Company for Pre-Closing Taxable Periods or Straddle Taxable Periods until the later
of (i) seven years or (ii) six months after the expiration of any applicable statute of limitations
(including extensions thereof) with respect to the assessment of such Taxes; provided, that neither
Party shall dispose of any of the foregoing items without first offering such items to the other
Party.

     (f) If after the Closing Buyer or the Project Company receives a refund or utilizes a credit
of any Tax of the Project Company attributable to a Pre-Closing Taxable Period or that portion of a
Straddle Taxable Period ending on the Closing Date, Buyer shall pay to Seller within 10 Business
Days after such receipt or utilization an amount equal to such refund received or credit utilized,
together with any interest received or credited thereon net of any costs associated therewith.
Buyer shall, and shall cause the Project Company to, use commercially reasonable efforts to obtain
a refund or credit of any Tax of the Project Company attributable to a Pre-Closing Taxable Period
or that portion of a Straddle Taxable Period ending on the Closing Date or to mitigate, reduce or
eliminate any such Tax that could be imposed for a Pre-Closing Taxable

 

 

Period or that portion of a Straddle Taxable Period ending on the Closing Date (including with
respect to the transactions contemplated hereby).

     (g) To the extent that the provisions of Article X are inconsistent with or conflict with the
provisions of this Section 6.11, the provisions of this Section 6.11 shall control, unless such
provision in Article X expressly refers to Section 6.11, in which case such provision in Article X
shall apply.

     Section 6.12 Schedule Update. From time to time prior to the Closing Date, Seller may
at its option supplement or amend and deliver updates to the Schedules (each a “Schedule Update”)
that are necessary to complete or correct any information in such Schedules or in any
representation or warranty of Seller that has been rendered inaccurate since the date of this
Agreement. If (a) Buyer has the right to terminate the Agreement pursuant to Section 9.1(c) and
does not exercise such right as a result of such Schedule Update within 10 days and (b) the
Schedule Update pursuant to this Section 6.12 relates to events occurring or conditions arising
after the date of this Agreement, then such Schedule Update shall be deemed to have amended the
appropriate Schedule or Schedules as of the date of this Agreement, to have qualified the
representations and warranties contained in Article III and IV as of the date of this Agreement,
and to have cured any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the existence of such matter. If Seller delivers a Schedule Update that
discloses matters that result in a breach of a representation or warranty of Seller in this
Agreement that materially and adversely affects the business, financial condition or results of
operations of the Project Company, then such Schedule Update shall be deemed to have amended the
appropriate Schedule or Schedules as of the date of this Agreement, to have qualified the
representations and warranties contained in Article III and IV as of the date of this Agreement,
and to have cured any misrepresentation or breach of warranty that otherwise might have existed
hereunder by reason of the existence of such matter; provided, however, that such
Schedule Update shall not be deemed to have amended the appropriate Schedule or Schedules as of the
date of this Agreement for the purposes Article X and Seller shall indemnify Buyer for Losses
arising from such breach without application of the limitations set forth on Section 10.2(c). For
the avoidance of doubt, if Seller delivers a Schedule Update that discloses matters that do not
result in a breach of a representation or warranty of Seller in this Agreement that materially and
adversely affects the business, financial condition or results of operations of the Project
Company, then such Schedule Update shall be deemed to have amended the appropriate Schedule or
Schedules as of the date of this Agreement, to have qualified the representations and warranties
contained in Article III and IV as of the date of this Agreement, and to have cured any
misrepresentation or breach of warranty that otherwise might have existed hereunder by reason of
the existence of such matter. Any Schedule Updates delivered pursuant to this Section 6.12 that
relate to events occurring or conditions existing on or prior to the date of this Agreement shall
not qualify the representations and warranties, or cure any misrepresentation or breach of warranty
hereunder.

     Section 6.13 Casualty. If any Asset of the Project Company is damaged or destroyed by
casualty loss after the date hereof and prior to the Closing (a “Casualty Loss”), and (a) the cost
of restoring such damaged or destroyed Asset to a condition reasonably comparable to its prior

 

 

condition and (b) the amount of any lost profits reasonably expected to accrue after Closing
as a result of such Casualty Loss to such Asset (net of and after giving effect to any insurance
proceeds available to the Project Company for such restoration and lost profits and any tax
benefits related thereto) (such costs and lost profits with respect to any Asset of the Project
Company, the “Restoration Cost”) is greater than $2,500,000 but does not exceed 10% of the Base
Purchase Price, Seller may elect to reduce the amount of the Purchase Price by the estimated
Restoration Cost (as estimated by a qualified firm reasonably acceptable to Buyer and Seller and
selected by Buyer and Seller in good faith and promptly after the date of the event giving rise to
the Casualty Loss), by notice to Buyer, and such Casualty Loss shall not affect the Closing. If
Seller does not make any such election within 60 days after the date of such Casualty Loss, Buyer
may elect to terminate this Agreement within 10 Business Days after the end of such 60 day period
by written notice to Seller. If the Restoration Cost is in excess of 10% of the Base Purchase
Price, Seller may, by notice to Buyer within 60 days after the date of such Casualty Loss, elect to
(m) reduce the Purchase Price by the estimated Restoration Cost (as estimated by a qualified firm
reasonably acceptable to Buyer and Seller and selected by Buyer and Seller in good faith and
promptly after the date of the event giving rise to the Casualty Loss), or (n) terminate this
Agreement, in each case by providing written notice to Buyer. If Seller does not make any such
election within 60 days after the date of such Casualty Loss, Buyer may elect to terminate this
Agreement within 10 Business Days after the end of such 60 day period by written notice to Seller.
If the Restoration Cost is $2,500,000 or less, (x) neither Buyer nor Seller shall have the right or
option to terminate this Agreement and (y) there shall be no reduction in the amount of the
Purchase Price. To the extent Seller elects to reduce the amount of the Purchase Price by the
estimated Restoration Cost pursuant to this Section 6.13, Buyer will, at Seller’s election, (i)
assign to Seller any rights to any contribution available under any long term service agreement and
any rights to insurance claims or recoveries available under insurance policies covering the
Project or the Project Company or its properties or assets, or (ii) at Seller’s sole cost and
expense, use commercially reasonable efforts to pursue such available contribution on Seller’s
behalf for the benefit of Seller.

     Section 6.14 Condemnation. If any Asset of the Project Company is taken by
condemnation after the date hereof and prior to the Closing and such Asset has the sum of (a) a
condemnation value and (b) to the extent not included in preceding clause (a), the amount of any
lost profits reasonably expected to accrue after Closing as a result of such condemnation of such
Asset (net of and after giving effect to any condemnation award any tax benefits related thereto)
(such sum with respect to any such Asset, the “Condemnation Value”) is greater than $2,500,000 but
does not have a Condemnation Value (as determined by a qualified firm reasonably acceptable to
Buyer and Seller and selected by Buyer and Seller in good faith and promptly after the date of the
event giving rise to the Casualty Loss) in excess of 10% of the Base Purchase Price, Seller may
elect to reduce the Purchase Price by such Condemnation Value (less the amount of any condemnation
award and tax benefits related thereto) by notice to Buyer, and such condemnation shall not affect
the Closing. If Seller does not make such an election within 60 days after the date of such
condemnation, Buyer may elect to terminate this Agreement within 10 Business Days after such 60-day
period by written notice to Seller. If the Condemnation Value is in excess of 10% of the Base
Purchase Price, Seller may, by notice to Buyer within 60 days after the award of condemnation
proceeds, elect to (m) reduce the Purchase Price by such Condemnation Value

 

 

(after giving effect to any condemnation award available and tax benefits related thereto) or
(n) terminate this Agreement, in each case by providing written notice to Buyer; provided, however,
that if Seller does not make such an election, then Buyer may, by written notice to Seller,
terminate this Agreement within 10 Business Days of receipt by Buyer of Seller’s notice regarding
its election. If the Condemnation Value is $2,500,000 or less, (x) neither Buyer nor Seller shall
have the right or option to terminate this Agreement and (y) the Purchase Price shall be reduced by
the amount of any condemnation award received by Seller, net of any taxes paid thereon.

     Section 6.15 Confidentiality.

     (a) Any information or materials furnished by Seller to Buyer on and after the date of this
Agreement shall be subject to the Confidentiality Agreement; provided that Buyer shall not have any
obligation to maintain the confidentiality of information with respect to the Project Company from
and after the Closing. In the event of any conflict between this Agreement and the Confidentiality
Agreement, the Confidentiality Agreement shall prevail.

     (b) Upon the other Party’s prior written approval (which shall not be unreasonably withheld),
Buyer may provide confidential information to any Governmental Authority with jurisdiction as
necessary to comply with Section 6.1. To the extent permitted by Law, the Buyer shall seek
confidential treatment for such confidential information provided to any Governmental Authority and
Buyer shall notify Seller as far in advance as is practicable of its intention to release to any
Governmental Authority any such confidential information.

     (c) The obligations of the Buyer in this Section 6.15 will survive the termination of this
Agreement, the discharge of all other obligations owed by the Parties to each other, any transfer
of the Company Interests and the Closing of the transactions contemplated in this Agreement.

     Section 6.16 Public Announcements. Subject to a Party’s reasonable judgment that it is
otherwise required by Law or by the rules of a national securities exchange to make such
disclosure, such Party shall, and shall cause its Affiliates (as applicable), to (a) consult with
the other Party regarding the timing and content of all announcements regarding this Agreement, the
Closing and the other transactions contemplated by this Agreement to the financial community, any
Governmental Authority, customers, suppliers or the general public and (b) use its reasonable best
efforts to agree upon the text of any such announcement with the other Party prior to its release.

     Section 6.17 Release of Guaranties, etc. With respect to each guaranty, letter of
credit, indemnity, performance or surety bond or similar credit support arrangement issued by or
for the account of Seller or any of its respective Affiliates in relation to the Business shown on
Schedule 6.17 and any other such guaranty, letter of credit, indemnity, performance or surety bond
or similar credit support arrangement involving obligations of Seller or any of its respective
Affiliates in the aggregate of not more than $1 million (collectively, the “Support Obligations”),
Buyer shall obtain, prior to the Closing, substitute credit support arrangements in replacement for
the Support Obligations, and shall procure that Seller and its Affiliates, and, where applicable,
its sureties or letter of credit issuers, be fully released from its respective obligations under
the

 

 

Support Obligations, in form and substance reasonably satisfactory to Seller. Seller will
cooperate reasonably with Buyer with respect to the foregoing.

     Section 6.18 Distributions. Notwithstanding anything herein to the contrary, the
parties agree that Seller shall have the right, at or prior to the Closing, to cause the Project
Company to distribute all of the cash and accounts receivable held by the Project Company to Seller
or its Affiliates. No adjustment shall be made to the Base Purchase Price as a result of any such
distributions.

     Section 6.19 Further Assurances. Subject to the terms and conditions of this
Agreement, at any time or from time to time after the Closing, at any Party’s request and without
further consideration, the other Party shall execute and deliver to such Party such other
instruments of sale, transfer, conveyance, assignment and confirmation, provide such materials and
information and take such other actions as such Party may reasonably request in order to consummate
the transactions contemplated by this Agreement.

     Section 6.20 Monthly Operating Report. During the Interim Period, Seller will,
promptly after its preparation, cause the Project Company to provide Buyer with the monthly
operating report with respect to the Project Company prepared in the ordinary course of business.

     Section 6.21 Creditworthiness of Seller.

     (a) Seller’s Net Worth shall be at least (i) $250 million during the two-year period ended on
the second anniversary of the Closing and (ii) $150 million during the three-year period ended on
the fifth anniversary of the Closing. Until the fifth anniversary of the Closing, Seller will
provide to Buyer and its Representatives the same financial information (in terms of timing and
content) that it provides to its lenders pursuant to Section 7.1 of the Seller Credit Agreement as
in effect on the date hereof (or substantially similar information pursuant to any successor
financing arrangements of Seller and its Affiliates). Seller shall further deliver a certificate of
an officer of Seller certifying that Seller’s Net Worth is in compliance with the terms of this
Agreement (i) no later than five (5) Business Days following delivery of year-end financial
statements that Seller provides to its lenders pursuant to Section 7.1 of the Seller Credit
Agreement as in effect on the date hereof (or substantially similar information pursuant to any
successor financing arrangements of Seller and its Affiliates) and (ii) promptly following (A) the
consummation of any transaction involving the disposition of assets of Seller for consideration in
excess of $30 million, (B) the execution of any successor credit agreement in connection with the
refinancing of amounts owed under the Seller Credit Agreement, (C) the consummation of any
transaction involving the disposition of more than 50% of the voting securities or ownership
interests of Seller, by Contract or otherwise, to any Person, including any Affiliate of Seller and
(D) any event in the business of the Seller that in the aggregate negatively impacts Seller’s Net
Worth by more than $30 million.

     (b) “Seller’s Net Worth” shall mean, as of any given date, the sum of (i) the greater of (A)
the sum of Seller’s net book equity value plus accumulated depreciation (in each case on a
consolidated basis in accordance with GAAP) and (B) 80% of the difference between the appraised
value of Seller’s assets as determined by an appraisal or investment banking firm of

 

 

national standing minus the net outstanding debt of Seller, plus (ii) the sum of (A) the face
amount of any guarantees in favor of Buyer provided by LS Power Equity Partners, L.P. or LS Power
Equity Partners II, L.P. guaranteeing the obligations of Seller hereunder, (B) the face amount of
any guarantees in favor of Buyer provided by entities with outstanding debt with a credit rating of
B+ or B1 or better guaranteeing the obligations of Seller hereunder, (C) the amount of cash held in
escrow guaranteeing the obligations of Seller hereunder, (D) the face values of any letters of
credit issued in favor of Buyer to secure the obligations of Seller hereunder and (E) other
guarantees or credit support amounts as reasonably agreed to by Buyer and Seller.

     Section 6.22 Balance Sheet; Financial Statements. Seller shall use its Reasonable Best
Efforts to deliver to Buyer the May Balance Sheet by December 31, 2007, but in any event no later
than five (5) Business Days following delivery of the May Balance Sheet to the lenders pursuant to
the Seller Credit Agreement or any successor financing arrangements of Seller and its Affiliates.
During the Interim Period, Sellers shall deliver to Buyer true and correct copies of financial
statements of the Project Company no later than five (5) Business Days following delivery of
financial statements to the lenders pursuant to the Seller Credit Agreement or any successor
financing arrangements of Seller and its Affiliates.

ARTICLE VII

BUYER’S CONDITIONS TO CLOSING

     The obligation of Buyer to consummate the Closing is subject to the fulfillment of each of the
following conditions (except to the extent waived in writing by Buyer):

     Section 7.1 Representations and Warranties.

     (a) The representations and warranties (other than the Title and Authority Representations)
made by Seller in Articles III and IV (without giving effect to any materiality or Material Adverse
Effect qualifiers contained therein) shall be true and accurate on and as of the Closing Date as
though made on and as of the Closing Date, except for (i) changes permitted or contemplated hereby;
(ii) representations and warranties which are as of a specific date, which shall be true and
accurate as of such date, subject to the immediately following clause (iii); or (iii) where the
failure to be true and accurate would not in the aggregate have a Material Adverse Effect or have a
material adverse effect on the ability of Seller to consummate the transactions contemplated
hereby.

     (b) The Title and Authority Representations made by Seller shall be true and accurate in all
material respects on and as of the Closing Date as though made on and as of the Closing Date,
except for (i) changes permitted or contemplated hereby, or (ii) representations and warranties
which are as of a specific date, which shall be true and accurate in all material respects as of
such date.

     (c) Seller shall have delivered the May Balance Sheet to Buyer no later than 30 Business Days
prior to the Closing.

 

 

     (d) Since the date of the May Balance Sheet, there has not been any Material Adverse Effect.

     Section 7.2 Performance. Seller shall have performed and complied, in all material
respects, with all agreements, covenants and obligations required by this Agreement to be performed
or complied with by Seller at or before the Closing.

     Section 7.3 Officer’s Certificate. Seller shall have delivered to Buyer at the Closing
a certificate of an officer of Seller, dated as of the Closing Date, as to the matters set forth in
Sections 7.1 and 7.2.

     Section 7.4 Orders and Laws. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a Governmental Authority of
competent jurisdiction to the effect that the purchase and sale of the Company Interests pursuant
to this Agreement may not be consummated as provided in this Agreement and no proceeding or lawsuit
shall have been commenced by any Governmental Authority which is reasonably likely to result in any
such injunction, writ or preliminary restraining order or to otherwise prohibit or make illegal the
consummation of the transactions contemplated by this Agreement.

     Section 7.5 Consents and Approvals. The Buyer Approvals and the Acceptable Order by
the MPSC shall have been duly obtained, made or given and shall be in full force and effect, and
all terminations or expirations of waiting periods imposed by any Governmental Authority shall have
occurred; provided, however, that the absence of any appeals and the expiration of any appeal
period with respect to any of the foregoing shall not constitute a condition to Closing hereunder.

     Section 7.6 Resignation of Members, Managers, Officers and Directors. Seller shall
have caused the resignation or removal of all members, managers, partners, officers and directors,
as applicable, nominated or appointed by Seller or its Affiliates to any board or operating,
management or other committee relating to the Project or established under the Project Company’s
Organizational Documents, and shall have delivered to Buyer at the Closing evidence of such
resignations or removals.

     Section 7.7 Release of Indebtedness; Release of Liens. Seller shall have delivered to
Buyer evidence of (a) cancellation of all Indebtedness, including any intercompany Indebtedness
between the Project Company, on the one hand, and Seller or any Affiliate thereof, on the other
hand; and (b) release of the Liens, if any, on the Assets of the Project Company (other than (i)
Permitted Liens, except for those Permitted Liens securing any Indebtedness existing prior to the
Closing, and (ii) Liens created by or at the behest of Buyer) and the Project Company Interests
(other than Liens created by or at the behest of Buyer).

 

 

ARTICLE VIII

SELLER’S CONDITIONS TO CLOSING

     The obligation of Seller to consummate the Closing is subject to the fulfillment of each of
the following conditions (except to the extent waived in writing by Seller):

     Section 8.1 Representations and Warranties. The representations and warranties made by
Buyer in Article V shall be true and accurate on and as of the Closing Date as though made on and
as of the Closing Date, except for (i) changes permitted or contemplated hereby; (ii)
representations and warranties which are as of a specific date, in which event they shall be true
and accurate as of such date, subject to the immediately following clause (iii); or (iii) where the
failure to be true and accurate would not in the aggregate have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby.

     Section 8.2 Performance. Buyer shall have performed and complied, in all material
respects, with all agreements, covenants and obligations required by this Agreement to be so
performed or complied with by Buyer at or before the Closing.

     Section 8.3 Officer’s Certificate. Buyer shall have delivered to Seller at the Closing
a certificate of an officer of Buyer, dated as of the Closing Date, as to the matters set forth in
Sections 8.1 and 8.2.

     Section 8.4 Orders and Laws. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a Governmental Authority of
competent jurisdiction to the effect that the purchase and sale of the Project Company Interests
pursuant to this Agreement may not be consummated as provided in this Agreement and no proceeding
or lawsuit shall have been commenced by any Governmental Authority which is reasonably likely to
result in any such injunction, writ or preliminary restraining order or to otherwise prohibit or
make illegal the consummation of the transactions contemplated by this Agreement.

     Section 8.5 Consents and Approvals. The Seller Approvals shall have been duly
obtained, made or given and shall be in full force and effect, and all terminations or expirations
of waiting periods imposed by any Governmental Authority shall have occurred; provided, however,
that the absence of any appeals and the expiration of any appeal period with respect to any of the
foregoing shall not constitute a condition to Closing hereunder.

ARTICLE IX

TERMINATION

     Section 9.1 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time before the Closing as follows:

     (a) by Seller or Buyer, by written notice to the other, if any Law or final order restrains,
enjoins or otherwise prohibits or makes illegal the transactions contemplated pursuant to this
Agreement;

     (b) by Seller, by written notice to Buyer, if Buyer has (i) breached its obligation to pay the
Purchase Price pursuant to Sections 2.2 and 2.5, or (ii) breached in any material respect any other
representation, warranty, covenant, agreement or obligation in this Agreement and such breach, in
the case of this clause (ii), has not been cured within 20 days following written notification
thereof; provided, however, that with respect to clause (ii), if, at the end of such 20 day period,

 

 

Buyer is endeavoring in good faith, and proceeding diligently, to cure such breach, Buyer
shall have an additional 20 days in which to effect such cure;

     (c) by Buyer, by written notice to Seller, if Seller has breached any representation,
warranty, covenant, agreement or obligation in this Agreement and (i) such breach has not been
cured within 20 days following written notification thereof; provided, however, that if, at the end
of such 20 day period, Seller is endeavoring in good faith, and proceeding diligently, to cure such
breach, Seller shall have an additional 20 days in which to effect such cure and (ii) such breach
(to the extent not cured) would result in a Material Adverse Effect or have a material adverse
effect on Seller’s ability to perform its obligations hereunder;

     (d) by Buyer or Seller, by notice to the other, on or after June 30, 2008 or such later date
as the Buyer and Seller may agree in writing; provided, that Buyer cannot terminate under this
provision if the failure of the Closing to occur is the result of the failure on the part of Buyer
to perform any of its obligations hereunder and Seller cannot terminate this Agreement under this
provision if the failure of the Closing to occur is the result of the failure on the part of Seller
to perform any of its obligations hereunder;

     (e) by Buyer, as provided in the definition of Acceptable Order;

     (f) by Seller, if Buyer has the right to terminate this Agreement as provided in the
definition of Acceptable Order;

     (g) by Buyer or Seller, in accordance with Section 6.13 or Section 6.14; and

     (h) by mutual written consent of Buyer and Seller.

     Section 9.2 Effect of Termination.

     (a) If this Agreement is validly terminated pursuant to Section 9.1, there will be no
liability or obligation on the part of Seller or Buyer (or any of their respective Representatives
or Affiliates), except as provided in this Section 9.2 and Section 9.3.

     (b) If this Agreement is terminated pursuant to Sections 9.1(b) or Section 9.1(d) (in the case
of Section 9.1(d), if the right to terminate applies due to a failure by Buyer to comply with
Section 2.2, 2.5, 6.1(c)(ii) or 6.1(c)(iv)), then, in lieu of all other Claims and remedies that
might otherwise be available with respect thereto, including elsewhere hereunder and
notwithstanding any other provision of this Agreement, Buyer hereby agrees to pay immediately to
Seller, as liquidated damages in connection with any other such termination, an amount in
immediately available funds equal $25,000,000. The provisions for payment of liquidated damages in
this Section 9.2(b) have been included because, in the event of termination of this Agreement
pursuant to Section 9.1(b) or Section 9.1(d), the actual damages to be incurred by Seller are
reasonably expected to approximate the amount of liquidated damages set forth in this Section
9.2(b) and because the actual amount of such damages would be difficult if not impossible to
measure precisely.

 

 

     (c) Regardless of the reason for termination, Sections 6.2(b), 6.15, 6.16, 9.2, 9.3, 10.5(a),
and 10.5(b) and Article XI will survive any termination of this Agreement, and each Party shall
continue to be liable for any willful breach of this Agreement by it occurring prior to such
termination.

     (d) Upon termination of this Agreement by either Party for any reason, each Party shall return
or destroy all documents and other materials of any other Party relating to the Project Company,
the Assets of the Project Company, or this Agreement and the transactions contemplated hereby,
including any information relating to the Parties to this Agreement, whether obtained before or
after the execution of this Agreement and all information received by Buyer with respect to the
Project Company, the Assets of the Project Company or Seller shall remain subject to this
Agreement.

     Section 9.3 Specific Performance and Other Remedies. Each Party hereby acknowledges
that the rights of each Party to consummate the transactions contemplated hereby are special,
unique and of extraordinary character and that, if any Party violates or fails or refuses to
perform any covenant or agreement made by it herein, the non-breaching Party may be without an
adequate remedy at law. If any Party violates or fails or refuses to perform any covenant or
agreement made by such Party herein, the non-breaching Party or Parties may, subject to the terms
hereof and in addition to any remedy at law for damages or other relief, institute and prosecute an
action in any court of competent jurisdiction to enforce specific performance of such covenant or
agreement or seek any other equitable relief.

ARTICLE X

INDEMNIFICATION, LIMITATIONS OF LIABILITY AND WAIVERS

     Section 10.1 Indemnification.

     (a) Subject to Section 10.2, from and after the Closing, Seller shall defend and hold harmless
Buyer, the Project Company, and their respective stockholders, partners, members, officers,
employees, Affiliates and Representatives (collectively, the “Buyer Indemnified Parties”) from and
against all Losses incurred or suffered by any Buyer Indemnified Party resulting from:

     (i) any breach or inaccuracy as of the Closing Date (as though made on and as of the
Closing Date except to the extent otherwise provided in this Agreement) of any representation
or warranty of Seller contained in this Agreement, any Ancillary Agreement or any certificates
delivered in connection herewith or therewith;

     (ii) any breach of any covenant or agreement of Seller contained in this Agreement, any
Ancillary Agreement or any certificates delivered in connection herewith or therewith; and

     (iii) the Excluded Liabilities.

 

 

     (b) Subject to Section 10.2, from and after Closing, Buyer shall indemnify, defend and hold
Seller and its stockholders, partners, members, officers, employees, Affiliates and Representatives
(collectively, the “Seller Indemnified Parties” and, together with Buyer Indemnified Parties, the
“Indemnified Parties”) harmless from and against all Losses incurred or suffered by any Seller
Indemnified Party resulting from:

     (i) any breach or inaccuracy as of the Closing Date (as though made on and as of the
Closing Date except to the extent otherwise provided in this Agreement) of any representation
or warranty of Buyer contained in this Agreement, any Ancillary Agreement or any certificates
delivered in connection herewith or therewith; and

     (ii) any breach of any covenant or agreement of Buyer contained in this Agreement, any
Ancillary Agreement or any certificates delivered in connection herewith or therewith.

     Section 10.2 Limitations of Liability. Notwithstanding anything in this Agreement to
the contrary:

     (a) the representations, warranties, covenants, agreements and obligations in this Agreement
or any Ancillary Agreement shall survive the Closing; provided, however, that no Party may make or
bring a Claim for liability (i) with respect to any representations or warranties (or in any
certificate relating thereto) contained in Articles III, IV or V (other than those representations
and warranties contained in Section 3.2 (Authority), Section 3.6 (Capitalization), Section 4.1
(Organization), Section 4.3 (Capitalization), Section 4.6 (Subsidiaries) and Section 5.2
(Authority) (collectively, the “Title and Authority Representations”) or Section 4.16
(Environmental Matters) or Section 4.11 (Tax Matters)) after twelve months following the Closing
Date, (ii) with respect to the Title and Authority Representations, after the five-year anniversary
of the Closing Date, (iii) with respect to the representations and warranties contained in Section
4.16 (Environmental Matters), after the three-year anniversary of the Closing Date, and (iv) with
respect to the representations and warranties contained in Section 4.11 (Taxes), after 60 days
following the expiration of the applicable statute of limitations;

     (b) any breach of this Agreement or any certificate relating hereto in connection with any
single item or group of related items that results in Losses of less than $150,000 shall be deemed,
for all purposes of this Agreement, not to be a breach of this Agreement or any certificate
relating hereto;

     (c) Seller shall have no liability for a breach of this Agreement (other than any Excluded
Liabilities, any breach of the Title and Authority Representations, a breach of a representation or
warranty contained in Section 4.11 (Taxes) or a matter covered by Section 6.11 (Tax Matters)) until
the aggregate amount of all Losses incurred by Buyer equals or exceeds $5,000,000 (the “Deductible
Amount”), in which event Seller shall be liable for Losses only to the extent they are in excess of
the Deductible Amount (except as otherwise set forth in this Section 10.2 or Section 6.12);

     (d) in no event shall Seller’s aggregate liability (i) arising out of or relating to Losses
under Section 10.1(a)(i) exceed $75,000,000, except as set forth in clause (ii) below; and (ii)
arising out of or relating to any breach of a Title and Authority Representation, a breach of a
representation

 

 

or warranty contained in Section 4.11 (Taxes) or a matter covered by Section 6.11 (Tax
Matters) exceed 100% of the Base Purchase Price;

     (e) Seller shall have no liability for any breach of this Agreement or any certificate
relating hereto by Seller if Buyer had actual knowledge of such breach or inaccuracy as of the date
hereof;

     (f) other than with respect to the Southern Company and Other Claims, Seller shall have no
liability under this Article X or Section 6.11 to indemnify any Indemnified Party with respect to a
Loss to the extent that such Loss arose from or was related to any liability of Mirant, the Project
Company or any Affiliate of Mirant prior to the “effective date” of the chapter 11 plan confirmed
by the Bankruptcy Order, other than Losses directly arising as a result of the failure of Mirant
Corporation and/or its Affiliates to provide the treatment afforded to such pre-effective date
liabilities in the manner set forth in such chapter 11 plan;

     (g) no Indemnifying Party shall have any liability under this Article X to indemnify any
Indemnified Party with respect to a Loss to the extent that the Loss arose from or was exacerbated
by any action taken directly or indirectly by any Indemnified Party on or after the Closing Date;

     (h) any Indemnified Party that becomes aware of a Loss for which it seeks indemnification
under this Article X or Section 6.11 shall be required to use commercially reasonable efforts to
mitigate the Loss including taking any actions reasonably requested by the Indemnifying Party and
an Indemnifying Party shall not be liable for any Loss to the extent that it is attributable to the
Indemnified Party’s failure to mitigate;

     (i) no Indemnifying Party shall have any liability for any Loss which would not have arisen
but for any alteration or repeal or enactment of any Law after the Closing Date;

     (j) Seller shall have no liability for any Losses that represent the cost of repairs,
replacements or improvements which enhance the value of the repaired, replaced or improved asset
above its value on the Closing Date or which represent the reasonable cost of repair or
replacement;

     (k) the Losses suffered by any Indemnified Party shall be calculated after giving effect to
any amounts covered by third parties, including insurance proceeds, in each case net of the
reasonable third party out of pocket costs and expenses associated with such recoveries, and net of
any associated tax benefits to Buyer or the Project Company (it being understood and agreed that
the Indemnified Parties shall use their commercially reasonable efforts to seek insurance
recoveries in respect of Losses to be indemnified hereunder). If any insurance proceeds or other
recoveries from third parties are actually realized (in each case calculated net of the reasonable
third party out of pocket costs and expenses associated with such recoveries) by an Indemnified
Party subsequent to the receipt by such Indemnified Party of an indemnification payment hereunder
in respect of the claims to which such insurance proceedings or third party recoveries relate,
appropriate refunds shall be made promptly to the Indemnifying Party regarding the amount of such
indemnification payment; and

 

 

     (l) upon and after the Closing, the Project Company shall not have any liability or obligation
to indemnify, save or hold harmless or otherwise pay, reimburse or make any Seller Indemnified
Party whole for or on account of any indemnification claim made by Seller or any of its Affiliates
or Representatives for any breach of any representation, warranty, covenant or agreement of Seller,
and Seller shall have no right of contribution against the Project Company with respect to such
matters.

     Section 10.3 Indirect Claims. From and after the Closing, Buyer agrees to release,
indemnify and hold harmless Seller, its Affiliates, the Employees and the officers and managers of
the Project Company (acting in their capacity as such) from and against any Claims by Buyer or any
of its Affiliates for controlling stockholder liability or breach of any fiduciary duty relating to
any pre-Closing actions or failures to act by Seller or any of its Affiliates in connection with
the business of the Project Company prior to the Closing.

     Section 10.4 Waiver of Other Representations.

EXCEPT FOR ANY REPRESENTATIONS AND WARRANTIES SET FORTH IN ARTICLE III AND IV OR IN ANY
CERTIFICATE DELIVERED HEREUNDER, THE ASSETS OF THE PROJECT COMPANY ARE “AS IS, WHERE IS,” AND
SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR WARRANTIES OF ANY KIND OR NATURE, EXPRESS OR
IMPLIED, AS TO LIABILITIES, OPERATIONS OF THE FACILITY, TITLE, CONDITION, VALUE OR QUALITY OF
THE ASSETS OF THE PROJECT COMPANY OR THE PROSPECTS (FINANCIAL AND OTHERWISE), RISKS AND OTHER
INCIDENTS OF THE ASSETS OF THE PROJECT COMPANY, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO
THE ACTUAL OR RATED GENERATING CAPABILITY OF THE PROJECT OR THE ABILITY OF THE PROJECT COMPANY
TO SELL FROM THE PROJECT ELECTRIC ENERGY, CAPACITY OR OTHER PRODUCTS FROM TIME TO TIME, AND
SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, OR
SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS OF THE PROJECT
COMPANY, OR ANY PART THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, OR COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS, OR AS TO THE
CONDITION OF THE ASSETS OF THE PROJECT COMPANY, OR ANY PART THEREOF, INCLUDING, WITHOUT
LIMITATION, WHETHER THE PROJECT COMPANY POSSESSES SUFFICIENT REAL PROPERTY OR PERSONAL
PROPERTY TO OPERATE THE PROJECT, IN EACH CASE EXCEPT AS SET FORTH HEREIN OR IN ANY CERTIFICATE
DELIVERED HEREUNDER. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN OR IN ANY CERTIFICATE
DELIVERED HEREUNDER, SELLER FURTHER SPECIFICALLY DISCLAIMS ANY REPRESENTATION OR WARRANTY
REGARDING THE ABSENCE OF HAZARDOUS MATERIALS OR LIABILITY OR POTENTIAL LIABILITY ARISING UNDER
ENVIRONMENTAL

 

 

LAWS. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EXCEPT AS EXPRESSLY PROVIDED HEREIN OR
IN ANY CERTIFICATE DELIVERED HEREUNDER, SELLER EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY OF ANY KIND REGARDING THE CONDITION OF THE ASSETS OF THE PROJECT COMPANY OR THE
SUITABILITY OF THE PROJECT FOR OPERATION AS A POWER PLANT OR AS SITES FOR THE DEVELOPMENT OF
ADDITIONAL OR REPLACEMENT GENERATION CAPACITY AND NO MATERIAL OR INFORMATION PROVIDED BY OR
COMMUNICATIONS MADE BY SELLER, OR BY ANY BROKER OR INVESTMENT BANKER, INCLUDING WITHOUT
LIMITATION ANY INFORMATION OR MATERIAL CONTAINED IN THE DESCRIPTIVE MEMORANDUM RECEIVED BY
BUYER OR ITS AFFILIATES (INCLUDING ANY SUPPLEMENTS), INFORMATION PROVIDED DURING DUE
DILIGENCE, INCLUDING BUT NOT LIMITED TO INFORMATION IN THE DATA ROOM, AND ANY ORAL, WRITTEN OR
ELECTRONIC RESPONSE TO ANY INFORMATION REQUEST PROVIDED TO BUYER, WILL CAUSE OR CREATE ANY
WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE, CONDITION, VALUE OR QUALITY OF THE PURCHASED
ASSETS THAT IS NOT SET FORTH HEREIN.

     Section 10.5 Waiver of Remedies.

     (a) The Parties hereby agree that, except with respect to Claims for fraud (but not
constructive fraud), no Party shall have any liability, and no Party shall make any Claim, for any
Loss or other matter under, relating to or arising out of this Agreement, the Company Assignment
Agreements or the Closing Certificates, whether based on contract, tort, strict liability, other
Laws or otherwise, except as provided in Section 6.11, Articles IX and X.

     (b) NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, EXCEPT AS SET FORTH IN SECTION
6.13 AND SECTION 6.14, NO PARTY SHALL BE LIABLE FOR SPECIAL, PUNITIVE, EXEMPLARY, INCIDENTAL,
CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS, 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 (“NON-REIMBURSABLE DAMAGES”), PROVIDED THAT
ANY AMOUNTS PAYABLE TO THIRD PARTIES PURSUANT A THIRD-PARTY CLAIM (OTHER THAN A CLAIM FOR
CONSEQUENTIAL DAMAGES ARISING UNDER A CONTRACT PROVISION AGREED TO BY THE INDEMNIFIED PARTY THAT
DOES NOT NEGATE CONSEQUENTIAL DAMAGES) SHALL NOT BE DEEMED NON-REIMBURSABLE DAMAGES.

     (c) Notwithstanding anything in this Agreement to the contrary, no Representative or Affiliate
of a Party shall have any personal liability to the other Party or any other Person as a result of
the breach of any representation, warranty, covenant, agreement or obligation of such Party in this
Agreement.

 

 

     Section 10.6 Procedure with Respect to Third-Party Claims.

     (a) If any Party (or as to Buyer after Closing, the Project Company) becomes subject to a
pending or threatened Claim of a third party and such Party (the “Claiming Party”) believes it has
a claim against the other Party (the “Responding Party”) as a result, then the Claiming Party shall
promptly notify the Responding Party in writing of the basis for such Claim setting forth the
nature of the Claim in reasonable detail. The failure of the Claiming Party to so notify the
Responding Party shall not relieve the Responding Party of liability hereunder except to the extent
that the defense of such Claim is materially prejudiced by the failure to give such notice.

     (b) If any proceeding is brought by a third party against a Claiming Party and the Claiming
Party gives notice to the Responding Party pursuant to this Section 10.6, the Responding Party
shall be entitled to participate in such proceeding and, to the extent that it wishes, to assume
the defense of such proceeding, if (i) the Responding Party provides written notice to the Claiming
Party that the Responding Party intends to undertake such defense, (ii) the Responding Party
conducts the defense of the third-party Claim actively and diligently with counsel reasonably
satisfactory to the Claiming Party and (iii) if the Responding Party is a party to the proceeding,
the Responding Party or the Claiming Party has not determined in good faith that joint
representation would be inappropriate because of a conflict in interest. The Claiming Party, in its
sole discretion, shall have the right to employ separate counsel (who may be selected by the
Claiming Party in its sole discretion) in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be paid by such Claiming Party. The
Claiming Party and the Responding Party shall fully cooperate with each other and their respective
counsel in the defense or compromise of such Claim. If the Responding Party assumes the defense of
a proceeding, no compromise or settlement of such Claims may be effected by the Responding Party
without the Claiming Party’s consent unless (x) there is no finding or admission of any violation
of Law or any violation of the rights of any Person and no adverse effect on any other Claims that
may be made against the Claiming Party and (y) the sole relief provided is monetary damages that
are paid in full by the Responding Party.

     (c) If (i) notice is given to the Responding Party of the commencement of any third-party
legal proceeding and the Responding Party does not, within 30 days after the Claiming Party’s
notice is given, give notice to the Claiming Party of its election to assume the defense of such
legal proceeding, (ii) any of the conditions set forth in clauses (i) through (iii) of Section
10.6(b) above become unsatisfied or (iii) a Claiming Party determines in good faith that there is a
reasonable probability that a legal proceeding may adversely affect it other than as a result of
monetary damages for which it would be entitled to indemnification from the Responding Party under
this Agreement, then the Claiming Party shall (upon notice to the Responding Party) have the right
to undertake the defense, compromise or settlement of such claim; provided, however, that the
Responding Party shall reimburse the Claiming Party for the costs of defending against such
third-party claim (including reasonable attorneys’ fees and expenses) and shall remain otherwise
responsible for any liability with respect to amounts arising from or related to such third-party
claim, to the extent it is ultimately determined that such Responding Party is liable with respect
to such third-party claim for a breach under this Agreement. The Responding Party
may elect to participate in such legal proceedings, negotiations or defense at any time at its
own expense.

 

 

ARTICLE XI

MISCELLANEOUS

     Section 11.1 Notices.

     (a) Unless this Agreement specifically requires otherwise, any notice, demand or request
provided for in this Agreement, or served, given or made in connection with it, shall be in writing
and shall be deemed properly served, given or made if delivered in person or sent by facsimile or
sent by registered or certified mail, postage prepaid, or by a nationally recognized overnight
courier service that provides a receipt of delivery, in each case, to the Parties at the addresses
specified below:

If to Buyer, to:

Consumers Energy Company

One Energy Plaza

Jackson, MI 49201

Facsimile No.: (517) 788-1671

Attn: President

With copies to:

Consumers Energy Company

One Energy Plaza

Jackson, MI 49201

Facsimile No.: (517) 788-0953

Attn: General Counsel

If to Seller, to:

c/o LS Power Development, LLC

Two Tower Center, 11th Floor

East Brunswick, NJ 08816

Facsimile No.: 732-249-7290

Attn: Senior Counsel

With copies to:

Latham & Watkins LLP

53rd at Third

885 Third Avenue

New York, NY 10022-4834

Facsimile No.: 212-751-4864

Attn: David Gordon

David Kurzweil

 

 

     (b) Notice given by personal delivery, mail or overnight courier pursuant to this Section 11.1
shall be effective upon physical receipt. Notice given by facsimile pursuant to this Section 11.1
shall be effective as of the date of confirmed delivery if delivered before 5:00 p.m. Eastern Time
on any Business Day or the next succeeding Business Day if confirmed delivery is after 5:00 p.m.
Eastern Time on any Business Day or during any non-Business Day.

     Section 11.2 Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the Parties with respect to the subject matter hereof, and this Agreement, the
Ancillary Agreements and the other documents delivered pursuant to this Agreement contain the sole
and entire agreement between the Parties hereto with respect to the subject matter hereof.

     Section 11.3 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the transactions contemplated hereby are consummated, each Party will pay its own
costs and expenses incurred in anticipation of, relating to and in connection with the negotiation
and execution of this Agreement and the transactions contemplated hereby. Notwithstanding the
foregoing, Buyer will pay: all costs of (a) any title policy and all endorsements thereto that
Buyer elects to obtain, (b) all filings required under the HSR Act, (c) all filings required to be
made by Buyer with FERC or any state or local Governmental Authority and (d) all document
recordation costs, including any applicable deed Transfer Taxes.

     Section 11.4 Disclosure. Seller may, at its option, include in the Schedules items
that are not material in order to avoid any misunderstanding, and any such inclusion, or any
references to dollar amounts, shall not be deemed to be an acknowledgment or representation that
such items are material, to establish any standard of materiality or to define further the meaning
of such terms for purposes of this Agreement. Information disclosed in any Schedule shall
constitute a disclosure for purposes of all other Schedules notwithstanding the lack of specific
cross-reference thereto, but only to the extent the applicability of such disclosure to such other
Schedule is reasonably apparent. In no event shall the inclusion of any matter in the Schedules be
deemed or interpreted to broaden Seller’s representations, warranties, covenants or agreements
contained in this Agreement. The mere inclusion of an item in the Schedules shall not be deemed an
admission by Seller that such item represents a material exception or fact, event, or circumstance
or that such item is reasonably likely to result in a Material Adverse Effect. The Parties shall
promptly notify each other of (a) the occurrence, or failure to occur, of any event, which
occurrence or failure has caused any representation or warranty of such Party contained in this
Agreement or in any exhibit, schedule, certificate, document or written instrument attached hereto
to be untrue or inaccurate, (b) any failure of such Party to comply with, perform or satisfy, in
any respect, any covenant, condition or agreement to be complied with, performed by or satisfied by
it under this Agreement or any exhibit, schedule, certificate, document or written instrument
attached hereto and (c) any notice or other communication from any Governmental Authority in
connection with this Agreement, the Company Assignment Agreement or the transactions contemplated
herein and therein; provided that such disclosure, except as set forth in Section 10.2(e) and
Section 6.12, shall not be deemed to cure, or to relieve any Party of any liability or obligation
with respect to, any breach of or failure to satisfy any representation,
warranty, covenant or agreement or any condition hereunder, and, except as set forth in

 

 

Section 10.2(e) and Section 6.12, shall not affect any Party’s right with respect to
indemnification hereunder.

     Section 11.5 Waiver. Any term or condition of this Agreement may be waived at any time
by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the Party waiving such term or
condition. No waiver by any Party of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under this Agreement or by
Law or otherwise afforded, will be cumulative and not alternative.

     Section 11.6 Amendment. This Agreement may be amended, supplemented or modified only
by a written instrument duly executed by or on behalf of each Party.

     Section 11.7 No Third Party Beneficiary. Except for the provisions of Sections 6.2(b),
10.1(a) and (b) and 10.3 (which are intended for the benefit of the Persons identified therein),
the terms and provisions of this Agreement are intended solely for the benefit of the Parties and
their respective successors or permitted assigns, and it is not the intention of the Parties to
confer third-party beneficiary rights upon any other Person, including, without limitation, any
employee, any beneficiary or dependents thereof, or any collective bargaining representative
thereof.

     Section 11.8 Assignment; Binding Effect. Buyer may assign its rights and obligations
hereunder to any Affiliate or Affiliates, or to Buyer’s lenders for collateral security purposes,
but such assignment shall not release Buyer from its obligations hereunder. Except as provided in
the preceding sentence, neither this Agreement nor any right, interest or obligation hereunder may
be assigned by any Party without the prior written consent of the other Party, and any attempt to
do so will be void, except for assignments and transfers by operation of Law. Subject to this
Section 11.8, this Agreement is binding upon, inures to the benefit of and is enforceable by the
Parties and their respective successors and permitted assigns.

     Section 11.9 Headings. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.

     Section 11.10 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations
of any Party under this Agreement will not be materially and adversely affected thereby, such
provision will be fully severable, this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof, the remaining
provisions of this Agreement will remain in full force and effect and will not be affected by the
illegal, invalid or unenforceable provision or by its severance herefrom and in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.

     Section 11.11 Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute

 

 

one and the same instrument. Any facsimile copies hereof or signature hereon shall, for all
purposes, be deemed originals.

     Section 11.12 Governing Law; Venue; and Jurisdiction.

     (a) This Agreement shall be governed by and construed in accordance with the Laws of the State
of New York, without giving effect to any conflict or choice of law provision that would result in
the imposition of another state’s Law.

     (b) THE PARTIES HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR
FEDERAL COURT IN NEW YORK, NEW YORK AND EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF SUCH
COURTS (AND OF THE APPROPRIATE APPELLATE COURTS THEREFROM) IN ANY SUCH SUIT, ACTION OR PROCEEDING
AND IRREVOCABLE WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT
OR THAT THEY ANY SUCH SUIT, ACTION OR PROCEEDING THAT IS BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. DURING THE PERIOD A LEGAL DISPUTE THAT IS FILED IN ACCORDANCE WITH THIS
SECTION 11.12 IS PENDING BEFORE A COURT, ALL ACTIONS, SUITS OR PROCEEDINGS WITH RESPECT TO SUCH
LEGAL DISPUTE OR ANY OTHER LEGAL DISPUTE, INCLUDING ANY COUNTERCLAIM, CROSS-CLAIM OR INTERPLEADER,
SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF SUCH COURT. EACH PARTY HEREBY WAIVES, AND SHALL
NOT ASSERT AS A DEFENSE IN ANY LEGAL DISPUTE, THAT (A) SUCH PARTY IS NOT SUBJECT THERETO, (B) SUCH
ACTION, SUIT OR PROCEEDING MAY NOT BE BROUGHT OR IS NOT MAINTAINABLE IN SUCH COURT, (C) SUCH
PARTY’S PROPERTY IS EXEMPT OR IMMUNE FROM EXECUTION, (D) SUCH ACTION, SUIT OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR (E) THE VENUE OF SUCH ACTION, SUIT OR PROCEEDING IS IMPROPER. A FINAL
JUDGMENT IN ANY ACTION, SUIT OR PROCEEDING DESCRIBED IN THIS SECTION 11.12 FOLLOWING THE EXPIRATION
OF ANY PERIOD PERMITTED FOR APPEAL AND SUBJECT TO ANY STAY DURING APPEAL SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY
APPLICABLE LAWS.

     (c) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY.

     Section 11.13 Parcel Three Option. Seller hereby grants Buyer the option to acquire
all of the Seller’s right, title and interest in and to Parcel Three, which right, title and
interest shall be conveyed by Seller by a quitclaim deed in the form attached hereto as Schedule
11.13, in exchange for $10, upon consummation of Closing, but in no event after the date which is
the first
Business Day following the Closing Date. Seller shall undertake Reasonable Best Efforts to
cause to be removed from the title all Liens on Parcel Three prior to Closing.

 

 

[signature pages follow]

     IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized
officer of each Party as of the date first above written.

	 	 	 	 	 
	 	SELLER:

BROADWAY GEN FUNDING, LLC

 	 
	 	By:  	/s/ Jim Bartlett
 	 
	 	 	Name:  	Jim Bartlett 	 
	 	 	Title  	President 	 
	 
	 	BUYER:

CONSUMERS ENERGY COMPANY

 	 
	 	By:  	/s/ John Russell
 	 
	 	 	Name:  	John Russell 	 
	 	 	Title:  	President and Chief Operating Officer 	 
	 

 

 

ASSIGNMENT AGREEMENT

          This
ASSIGNMENT AGREEMENT (this “Assignment”) is entered into as of the ___ day of
                    , 2007 by and between Broadway Gen Funding LLC, a Delaware limited liability company
(“Assignor”), and Consumers Energy Company, a Michigan corporation (“Assignee”) (each a
“Party,” and collectively, the “Parties”). Capitalized terms used but not otherwise defined
herein shall have the respective meanings set forth in that certain Purchase and Sale
Agreement dated as of May 24, 2007 by and between Assignor and Assignee (the “PSA”).

          WHEREAS, Assignor and Assignee have entered into the PSA pursuant to which, at the
Closing, Assignor will sell to Assignee, and Assignee will purchase from Assignors, the
Project Company Interests, for the consideration and on the terms set forth in the PSA; and

          WHEREAS, pursuant to Section 2.4 of the PSA, Assignor and Assignee are entering into this
Assignment.

          NOW THEREFORE, for and in consideration of the premises contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by
the Parties, the Parties, intending to be legally bound, do hereby agree as follows:

     l. Transfer of Interests to Assignee. Effective on and from the Closing, Assignor does
hereby sell, transfer, assign and convey to Assignee all of Assignor’s right, title and
interest in, to and under all of Assignor’s Equity Interests in the Project Company.
Assignors represents and warrants to Assignee that as a result of the sale, transfer,
assignment and conveyance set forth in this Section 1 and the PSA, Assignee shall own,
directly or indirectly, 100% of the Equity Interests in the Project Company.

     2. Acceptance of Assignment. Effective on and from the Closing, Assignee, by execution
hereof, accepts the foregoing transfer and assignment and assumes and agrees to perform all
of the obligations of ownership of the Equity Interests in the Project Company arising under
the Amended and Restated Limited Liability Company Agreement of the Project Company dated as
of January 3, 2006 and the other governing documents of the Project Company and applicable
law after the date hereof.

     3. Conflicting Terms. No terms or provisions of this Assignment .are intended or shall
be deemed to amend the terms or provisions of the PSA. To the extent the terms of this
Assignment and the PSA conflict, the terms of the PSA shall be deemed to supersede the
conflicting: terms of this, Assignment. Assignor makes no representations or warranties with
respect to the Equity Interests of the Project Company or the Project Company, except as set
forth in, and subject to the limitations and qualifications set forth in, Section 1 above
and in the PSA.

 

 

     4. Miscellaneous.

     (a) No Third-Party Beneficiaries. This Assignment shall not confer any rights or
remedies -upon any Person other than the Parties and their respective successors
and permitted assigns.

     (b) Entire Agreement, Binding Effect. This Assignment (including the PSA and the
documents referred to herein and therein) constitutes the entire agreement between the
Parties with respect to the subject matter hereof and supersedes any prior understandings,
agreements, or representations by or between the Parties, written or oral, to the extent
they related thereto. This Assignment-shall be binding upon, inure for the benefit of and
be enforceable by the Parties and their respective successors and assigns.

     (c) Counterparts. This Assignment may be executed in one or more counterparts
(including by facsimile, electronic mail, or similar electronic transmission device
pursuant to which the signature of or on behalf of such Party can be seen), each of which
shall be deemed an original but all of which together will constitute one and the same
instrument.

     (d) Headings. The section or paragraph headings contained in this Assignment are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Assignment.

     (e) Governing Law. This Assignment shall be governed by and construed in accordance
with the Laws of the State of New York, without giving effect to any conflict or choice
of law provision that would result in the imposition of another state’s Law.

[Signature Page Follows]

     IN WITNESS WHEREOF, the Parties hereto have executed this Assignment as of the date first
above written.

	 	 	 	 	 
	 	BROADWAY GEN FUNDING, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	CONSUMERS ENERGY COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

EXECUTION COPY

DISCLOSURE SCHEDULE

     This disclosure schedule (this “Disclosure Schedule”) has been prepared and delivered in
accordance with the Purchase and Sale Agreement, dated May 24,2007 (the “Agreement”), by
and between Broadway Gen Funding, LLC and Consumers Energy Company, a Michigan
corporation (“Buyer”). Unless the context otherwise requires, all capitalized terms used in this
Disclosure Schedule have the respective meanings ascribed to such terms in the Agreement. The
headings contained in this Disclosure Schedule are for convenience of reference only and shall
not be deemed to modify or influence the interpretation of the Agreement or the information
contained in this Disclosure Schedule.

     Schedule references in this Disclosure Schedule are for convenience only, and the
disclosure of any fact or item in any Disclosure Schedule referenced by a particular section of the
Agreement shall be deemed to have been disclosed with respect to every other section in the
Disclosure Schedule to the extent the applicability of such other disclosure to such other sections
is reasonably apparent.

     Matters reflected in this Disclosure Schedule are not necessarily limited to matters
required by the Agreement to be reflected in this Disclosure Schedule. Such additional matters
are set forth for informational purposes and do not necessarily include other matters of a similar
nature. In no event shall the inclusion of any such matter in this Disclosure Schedule be deemed
or interpreted to broaden Seller’s representations, warranties, covenants or agreements contained
in the Agreement. The mere inclusion of an item in this Disclosure Schedule shall not be
deemed an admission by Seller that such item represents a material exception or fact, event, or
circumstance or that such item is reasonably likely to result in a Material Adverse Effect.

     The attachments to this Disclosure Schedule form an integral part of this Disclosure
Schedule and are incorporated by reference for all purposes as if set forth fully herein. This
Disclosure Schedule supersedes and replaces any other Disclosure Schedule previously provided
to Buyer. This Disclosure Schedule may be supplemented or amended by Seller from time to
time prior to the Closing pursuant to the terms and conditions of the Agreement.

Ny\1285210.2

 

 

SCHEDULE 1.1 — A

Net Working Capital Calculation

Net Working Capital is equal to:

(l) the sum of (A) all third-party accounts receivable, net of any applicable reserves, (B) any
collateral deposits posted and interest earned thereon, (C) any earned but not received payments
under tolling agreements, (D) spare parts inventory at book value, (E) Emissions allowances at
market value, and (F) prepaid expenses,

minus

(2) the sum of (A) third-party accounts payable, accrued expenses related to the Business and other
current liabilities in accordance with GAAP and (B) any liabilities (whether or not current
liabilities) to the extent of any collateral deposits and interest thereon included under clause
(l)(B) above.

Net Working Capital shall not include any tax assets or liabilities.

All calculations of Net Working Capital will be made as of the Closing Date in accordance with the
Project Company’s historical accounting practices.

By way of example only, the calculation of Net Working Capital using the most recent Balance Sheets
is as follows:

NET WORKING CAPITAL EXAMPLE1

Estimated as of 4/20/07 balance sheet

Zeeland

	 	 	 	 	 
	Third-party A/R:
	 	 	 	 
	A/R — Collateral Deposits including interest held thereon
	 	 	—	 
	A/R — Other than collateral
	 	 	—	 
	Emissions Inventory at market
	 	 	203,210	 
	Spare Parts Inventory
	 	 	1,315,341	 
	Milestone payments under LTSA
	 	 	—	 
	Other Prepaid Expenses
	 	 	 	 
	 
	 	 	 	 
	Less:
	 	 	 	 
	Third-party Accounts Payable
	 	 	(509,235	)
	Accrued Vacation Liability
	 	 	(80,958	)
	Accrued Floating Holiday Liability
	 	 	(5,206	)
	Accrued Sick Pay
	 	 	(120,065	)

1 Information provided primarily from Mirant and has not been verified by Sellers or their
Affiliates,

Ny\1285210.2

 

 

SCHEDULE 1.1-B

Budget

	 	 	 	 	 	 	 	 	 
	 	 	2007	 	2008
	 
	 	 	 	 	 	 	 	 
	Capital Expenditures

	 	$	375,000	 	 	$	750,000	 
	Major Maintenance

	 	$	0	 	 	$	0	 

Ny\1285210.2

 

 

SCHEDULE
1.1-K

Knowledge

1. Carolyne Wass

2. Robert Parker

3. James Pagano

4. James Bartlett

Ny\1285210.2

SCHEDULE 1.1- PL

Permitted Liens

1. All scheduled exceptions on Schedule B of the Title Policy.

2. The First Lien Credit Agreement, dated May 1, 2007, among Broadway Gen Funding, LLC
as Borrower, the Lenders, J.P. Morgan Securities, Barclays Capital, Credit Suisse Securities
(USA) LLC and Lehman Brothers Inc. as joint lead arrangers and joint bookrunners, and
JPMorgan Chase Bank, N.A., as administrative agent, and all documents and agreements
executed in connection therewith. *

3. The Second Lien Credit Agreement, dated May 1, 2007, among Broadway Gen Funding,
LLC as Borrower, the Lenders, J.P. Morgan Securities Inc., Barclays Capital, Credit Suisse
Securities (USA) LLC, and Lehman Brothers Inc. as joint lead arrangers and joint
bookrunners, and JPMorgan Chase Bank, N.A., as administrative agent, and all documents
and agreements executed in connection therewith. *

4. Intercompany Indebtedness that may be incurred by the Project Company to Seller or any of
their Affiliates. *

5. As incurred under Items 15 (relating to the Project Company), 17 and 26 of Schedule 4.13.

Ny\1285210.2

 

 

SCHEDULE 1.1 — PT

Parcel Three

PART OF E 1/2 OF NW 1/4 COM N 1/4 COR, TH N 89D 22M 17S W 1329.49 FT & S 0D
27M 33S W 1500 FT ALG W 1/8 LI TO PT OF BEG, TH S 89D 22M 17S E 1124.81 FT, N
60D 42M 54S E 122.6 FT, TH N 60D 47M 14S E 113.93 FT TO N&S 1/4 LI, TH S 0D 25M
38S W 230.11 FT ALG SD LI TO N’LY LI OF CSX RR R/W, TH S 60D 42M 54S W ALG RR
R/W TO INTERS WITH A LI COM NW SEC COR, TH S 89D 22M 17S E 664.75 FT & S 0D
28M 30S W 1690.01 FT ALG W LI OF E 1/2 OF W 112 OF NW 1/4 TO PT OF BEG SD LI, TH S 89D 22M 17S E
1860.27 FT TO PT OF ENDING SD LI ON N’LY LI CSX RR R/W, TH N 89D 22M 17S W ALG SD LI TO PT S 0D 27M
33S W OF BEG, TH N 0D 27M 33S E TO
BEG. SEC 17 T5N R14W FROM 70-17-17-101-018 1/03

Ny\1285210.2

SCHEDULE 3.3(c)

Seller Approvals

Hart-Scott-Rodino (HSR)

Federal Energy Regulatory Commission (FERC)

Michigan Public Service Commission (MPSC)

Ny\1285210.2

 

 

SCHEDULE 4.2

Company Consents

1. City of Zeeland Wastewater Discharge Permit, issued December 29, 2004.

2. MDEQ Renewable Operating Permit, issued December 29, 2004.

3. MDEQ Stormwater Permit No. MIS219000.

4. USEPA Underground Injection Control Permit, Permit No. MI-139-1I-0004.

5. USEPA Underground Injection Control Permit, Permit No. MI-139-1I-0005.

6. Zeeland Project Radio Station Authorization for Call Sign WPUV277 issued by the Federal
Communications Commission Wireless Telecommunications Bureau, effective August 12,
2004.

7. Part 55/Clean Air Act Source-Wide Permit to Install No. MI-PTI-N6521-2004

Ny\1285210.2

 

 

SCHEDULE 4.3

Capitalization

Broadway Gen Funding, LLC

100%

Zeeland Power Company, LLC

NY\1285210.2

 

 

SCHEDULE 4.4

Business

Emissions allowances (other than those emissions allowances listed on Schedule 4.16(c))

T-l Line

Software owned by Mirant and used transitionally (including TOGA)

Accounting system

EH&S Tracking Tool (owned by Wood Group)

Payroll Tool (owned by Wood Group)

Proprietary GE-owned software

Registrations pursuant to FERC Electric Tariff of Midwest Independent System Operator

Parcel Three

Ny\1285210.2

 

 

SCHEDULE 4.5

Bank Accounts

Zeeland Power Company, LLC

	 	 	 
	Bank Name:
	 	JPMorgan Chase Bank
	ABA#:
	 	021-000-021
	Account #:
	 	T&1 999-99-651
	Account Name:
	 	Zeeland Power Company LLC
	FFC Account#:
	 	Q92131004

Account Signers: Mark Brennan, Brian Roth, Blake Wheatley, Joe Myers, Jason Solimini,

Michael Obszarny, and George Keefe

Ny\1285210.2

 

 

SCHEDULE 4.7

Legal Proceedings

Chapter 11 Case No. 03-46661-DML of Zeeland Power Company, LLC filed on July 15, 2003 in
the United States Bankruptcy Court, Northern District of Texas, Forth Worth Division, and jointly
administered as Case No. 03-46590-DML

Assessment Letter from contract appraiser engaged by the City of Zeeland dated November 14,
2006

Following proofs of claim filed by The Southern Company in Jointly Administered Chapter 11
Case No. 03-46590-DML, United States Bankruptcy Court, Northern District of Texas, Fort
Worth Division, of MC 2005 LLC (f/k/a Mirant Corporation prior to January 3, 2006 and MC
2005 Corporation prior to February 23, 2006) (the “Bankruptcy Case”), as such claims may be
amended: claims numbered 6327, 6379, 8139, and 8271 against Zeeland Power Company, LLC.

Following proofs of claim filed by Lehman Commercial Paper, Inc. and/or Wells Fargo Bank,
N.A. in the Bankruptcy Case, as such claims may be amended: claims numbered 6101 and 6967
against Zeeland Power Company, LLC.

Ny\1285210.2

 

 

SCHEDULE 4.8

Compliance with Laws

Fogging from plant operations occasionally necessitates local road closure.

Ny\1285210.2

SCHEDULE 4.9

Liabilities

Schedules 4.7, Schedule 4.8, and Schedule 4.13 are hereby incorporated by reference.

NY\1285210.2

 

 

SCHEDULE 4.10

Absence of Certain Changes

Sale of the Project Company by Mirant to Broadway pursuant to the Mirant PSA, and any actions
undertaken or documents executed in connection with the Mirant Closing.

Incurrence of debt in connection with the acquisition of the Project Company by Broadway pursuant
to the Mirant PSA (see Items 2,3,4 and 5 of Schedule 1.1-PL).

Entry into forward MISO Designated Network Resource Capacity Sales Agreements

Quitclaim Deed for Parcel Three by the Project Company to Seller.

Ny\1285210.2

 

 

SCHEDULE 4.11

Taxes

Assessment Letter from contract appraiser engaged by the City of Zeeland dated November 14,
2006.

Following proofs of claim filed by The Southern Company in the Bankruptcy Case, as such
claims may be amended: claims numbered 6327,6379, 8l39, and 8271 against Zeeland Power
Company, LLC. 1

 

			
	1 These claims are Excluded Liabilities.	 	 

NY\1285210.2

SCHEDULE
4.12

Regulatory Status

Zeeland has not been authorized by FERC to make sales of ancillary services at market-based
rates pursuant to Section 205 of the FPA.

NY\1285210.2

 

 

SCHEDULE 4.13

Material Contracts

1. Amended and Restated LLC Agreement of Mirant Zeeland, LLC, dated May 1, 2007

2. Transportation Services Contract between Zeeland Power Company, LLC (formerly SEI
Michigan, LLC) and SEMCO Energy Gas Company, dated December 17, 1999

3. Generator Interconnection and Operating Agreement between Michigan Electric
Transmission Company, LLC and Zeeland Power Company, LLC, dated December 26,
2001; amended June 14, 2002; issued August 30, 2002

4. Lateral Construction and Connection Agreement between Zeeland Power Company,
LLC (formerly SEI Michigan, LLC) and SEMCO Energy Gas Company, dated
December 17, 1999

5. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc. for the Simple Cycle Facility, dated June 16, 2004
and related guaranty issued by General Electric Company

6. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc., for the Combined Cycle Facility, dated June 16,
2004 and related guaranty issued by General Electric Company

7. 2001 Water Services Agreement between City of Zeeland Municipal Corp., City of
Zeeland Board of Public Works, and Zeeland Power Company, LLC (formerly SEI
Michigan, LLC), dated January 2, 2001, effective July 1, 2001

8. Donation Pledge made by Zeeland Power Company, LLC in the amount of $200,000
to the City of Zeeland, dated February 8, 2001

9. Collective Bargaining Agreement between Mirant Zeeland, LLC, Mirant Sugar Creek,
LLC and the United Steelworkers of America, AFL-CIO-CLC on behalf of Local 12502
effective January 1,2004

10. Memorandum of Understanding for Contract Extension between United Steelworkers and
Mirant Sugar Creek, LLC & Mirant Zeeland, LLC

11. Irrevocable Letter of Credit, effective May 1, 2007, in the amount of $85,000 issued
to the Michigan Department of Environmental Quality.

Ny\1285210.2

 

 

12. FERC Order dated March 23, 2005 approving settlement agreement between Zeeland
Power Company, LLC, Consumers Electric Company and the Michigan Public Power
Agency

13. SEI Michigan, LLC Act 198 Contract dated May 15, 2000

14. Facilities Agreement between Consumers Energy Company and SEI Michigan, L.L.C.
dated November 1, 2000.

15. Energy Management Agreement between LS Power Acquisition Co I, LLC, Eagle
Energy Partners I, L.P. and, after the Services Implementation Date (as defined therein),
Zeeland Power Company, LLC and certain other parties named therein, dated March 14,
2007, as amended, along with the ISDA Master Agreement and related Schedule dated
May 1, 2007 (collectively the “ISDA Agreement”) and the Credit Support Annex
between LS Power Acquisition Co I, LLC, Eagle Energy Partners I, L.P., Zeeland Power
Company, LLC and certain other parties named therein, dated May 1, 2007 (the “Credit
Support Annex”)

16. Operation and Maintenance Agreement for the Zeeland Electric Facility by and between
LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated
February 12, 2007, as subsequently assigned to the Project Company

          16.1 Wood Group Power Operation, Inc. Union Acknowledgement, dated April 20, 2007

17. Documentation of forward MISO Designated Network Resource Capacity Sales
Agreements, as completed

18. Irrevocable Letter of Credit, effective May 17, 2007, in the amount of $71,000, issued to
the Midwest Independent Transmission System Operator, Inc.

19. Master Power Purchase and Sale Agreement with Consumers Energy Company, dated
May 15, 2007 (and related agreements)

20. Indemnity Agreement between JPMorgan Chase Bank, N.A. and Broadway Gen
Funding, LLC, dated May 17, 2007

21. Service Agreements between Mirant Zeeland, LLC and Midwest ISO, dated June 1, 2007
for Transmission Service, Short Term Firm Point-to-Point and Long-Term Firm Point-to-Point
Service

22. OATI webCARES Customer Agreement between Mirant Zeeland, LLC and Open Access
Technology International, Inc. dated April 30, 2007
23. Market Participation Agreement between MISO and Mirant Zeeland, LLC, dated June 1,
2007

24. Service Agreement Order Wholesale Market Based Rate Tariff, between Zeeland Power
Company, LLC and Consumers Energy Company, dated May 10, 2007

25. Confirmation between Wabash Valley Power Association, Inc. and Zeeland Power
Company, LLC dated May 11, 2007

26. Spreadsheet of executed MISO Designated Network Resource Capacity Sales
Agreements titled “Zeeland DNR Sales 050907 v 2”

27. Quitclaim Deed for Parcel Three by the Project Company to Seller

Ny\1285210.2

 

 

SCHEDULE 4.14

Real Property

Fee owner of property as described in Exhibit A to Schedule A of the Title Policy.

Ny\1285210.2

SCHEDULE 4.15(A)

Permits

l. FCC Radio Station Authorization: granted 05/08/02; effective 11/22/05; printed 01/09/06.

2. Radio Station Authorization for Call Sign WPUV277 issued by the Federal Communications
Commission Wireless Telecommunications Bureau effective November 22, 2005 and related
correspondence.

3. Exempt Wholesale Generator authorization in FERC Docket No. EG01-38-000, granted on
January 16, 2001 (Phase I).

4. Exempt Wholesale Generator authorization in FERC Docket No. EG02-31-000, granted on
December 27,2001 (Phase II).

5. Market-Based Rate authorization in FERC Docket No. ER01-562-000, granted on January 5,
200l.

6. FERC Order granting continued authorization to make sales at market-based rates in Docket
No. ER01-1263-000, issued on May 26, 2005.

7. Certificates of Boiler Inspection issued by the Michigan Department of Labor and Economic
Growth.

8. Certificate of Occupancy by the City of Zeeland, Michigan dated December 6, 2002.

9. Michigan Certificate of Authority to Transact Business, dated February 4, 2000.

10. Wastewater Discharge General Permit (No. MIS219000) Michigan Department of
Environmental Quality National Pollutant Discharge Elimination System issued on August
23, 2001 and effective on April 1, 2002.

11. Certificate of Coverage for the discharge of storm water by the Michigan Department of
Environmental Quality Water Division (NPDES) No. MI5210785 (under general permit no.
219000) issued on July 28, 2003.

12. City of Zeeland Wastewater Discharge Permit. Permit No. 2025 effective on December 16,
2002, renewed December 16, 2005.

13. USEPA Underground Injection Control Permit Class I — Non-Hazardous Permit No. MI-139-
1I-0004, M 470 Facility Name Injection Well #IW-l effective August 29, 200l.

14. USEPA Underground Injection Control Permit Class I — Non-Hazardous Permit No. MI-139-
1I-005, M 471 Facility Name Injection Well #IW-2 effective May 1, 2002.

15. MDEQ Renewable Operating Permit, issued December 29,2004.

16. Part 55/Clean Air Act Source-Wide Permit to Install No. MI-PTI-N6521-2004.

17. Acid Rain Permit (No. MI-AR-55087-2004) Michigan Department of Environmental Quality
issued on December 29, 2004.

18. NOx Budget Permit (No. MI-NOX-55087-2004) Michigan Department of Environmental
Quality issued on May 24, 2004.

19. Certificate of Occupancy by the City of Zeeland, Michigan, dated November 2, 2000.

Ny\1285210.2

 

 

SCHEDULE 4.16(c)

Air Pollution Emissions Allowances and

Emission Reduction Credits

70 NOx allowances allocated for each of 2007-2009.

Ny\1285210.2

SCHEDULE 4.19

Labor Matters

• There was a request for representation, an organizing campaign and related activity at the
Zeeland Project that resulted in the execution of the Collective Bargaining Agreement
among Zeeland Power Company, LLC, Sugar Creek, LLC and the United Steelworkers of
America, AFL-CIO-CLC on behalf of Local 12502 dated December 19, 2002 and the
Memorandum of Understanding for Contract Extension between United Steelworkers and
Sugar Creek, LLC and Zeeland Power Company, LLC, dated November 29, 2006.

• Memorandum of Understanding between Wood Group Power Operations, Inc. and United
Steel Workers, dated April 26, 2007.

Ny\1285210.2

 

 

SCHEDULE 4.19(B)

Employees

Employees of Wood Group Power Operations (West), Inc.:

Anderson, Cory Dean

*Battle, Philip

* Crum, Edward E

*Freese, Scott A

*Hendrickson, Greg J.

*Laponsie, Duane J

*Mandrick, James A.

*Maxey, Tyrone C

*Mixter, Ronald Jr.

*Moore, Keith

*Moran, Phillip R.

*Tyni, Casey Richard

*Vikstrom, Michael S

*Wilson, John R

Keefe, George

Phillips, Pamela

Roth, Brian David

One Additional EH&S Employee to be hired.

 

			
	*	 	Persons represented by a union or other collective bargaining entity under that certain
Collective Bargaining Agreement between Zeeland Power Company, LLC, Sugar Creek, LLC
and the United Steelworkers of America, AFL-CIO-CLC on behalf of local 12502 dated
December&nbsp;19, 2002 and effective January&nbsp;1, 2004 and the Memorandum of Understanding for
Contract Extension between United Steelworkers and Sugar Creek, LLC and Zeeland Power
Company, LLC, dated November&nbsp;29, 2006.

Ny\128521O.2

 

 

SCHEDULE 4.19(c)

Third Party Vendor Employees

1. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc. for the Simple Cycle Facility, dated June 16, 2004

2. Long Term Service Agreement by and between Zeeland Power Company, LLC and
General Electric International, Inc., for the Combined Cycle Facility, dated June 16, 2004

3. Operation and Maintenance Agreement for the Zeeland Electric Facility by and between
LS Power Acquisition Co I, LLC and Wood Group Power Operations (West), Inc., dated
February 12, 2007

Ny\1285210.2

SCHEDULE 4.20

Employee Benefits

Union

1. Accident and Sickness Policy

2. Accidental Death & Dismemberment Policy

3. Retiree Medical Policy

4. Life Insurance Policy

5. Long Term Disability Policy

6. Health Benefits Plan

7. Employee Savings Plan

8. Dental

9. Tax Saver

10. Vision Care

Non Union

1. Accident and Sickness Policy

2. Accidental Death & Dismemberment Policy

3. Retiree Medical Policy

4. Life Insurance Policy

5. Long Term Disability Policy

6. Health Benefits Plan

7. Employee Savings Plan

8. Dental

9. Tax Saver

10. Vision Care

11. Severance Plan

12. Vacation

13. Dependent Care Policy

14. Short Term Disability

Ny\1285210.2

 

 

SCHEDULE 5.3

Buyer Approvals

Hart-Scott-Rodino (HSR)

Federal Energy Regulatory Commission (FERC)

Acceptable Order from the Michigan Public Service Commission (MPSC)

Ny\1285210.2

SCHEDULE 5.9

Conflicts

1. The Balance Energy Initiative filed by Buyer with the MPSC on April 30, 2007 (MPSC case
number 15290).

Ny\1285210.2

 

 

SCHEDULE 6.3

Exceptions to Conduct of Business

See Schedule 4.10.

Entry into forward MISO Designated Network Resource Capacity Sales Agreements

Seller shall not, and shall cause the Project Company not to, with respect to the Project Company
or the Project without the written consent of Buyer, not to be unreasonably withheld or delayed,
enter into any renewal or extension of the CBA for a term beyond June 30, 2008.

Terminate the Energy Management Agreement (“EMA”) or Operations and Maintenance
Agreement (“O&M Agreement”)

Amend, revise or assign the EMA or O&M Agreement (provided that such amendment or
revision is on not more materially favorable terms to the respective counterparty)

Ny\1285210.2

SCHEDULE 6.5

Terminated Contracts

None.

Ny\1285210.2

 

 

SCHEDULE 6.10

Books and Records

Such books and records provided by Mirant with respect to the Project Company and the Project.

Seller shall promptly notify Buyer of any material change (in terms of timing and content) of the
financial information that it provides to its lenders pursuant to Section 7.1 of the Seller Credit
Agreement (or any successor financing arrangements).

Ny\1285210.2

SCHEDULE 6.17

Support Obligations

1. Irrevocable Letter of Credit in the amount of $85,000 issued to the Michigan Department of
Environmental Quality on behalf of Broadway Gen Funding, LLC in support of Zeeland
Power Company, LLC, Date of Expiry May 1, 2008

2. Letter of Credit or Guaranty under SEMCO Transportation Services Contract l

3. As required under Items 15 (relating to the Project Company), 17 and 26 on Schedule 4.13

4. Irrevocable Letter of Credit, effective May 17, 2007, in the amount of $71,000, issued to the
Midwest Independent Transmission System Operator, Inc.

 

			
	1 	 	Mirant Americas Inc. did not re-post this obligation. As of the date of May 24, 2007, neither
Seller nor any of its Affiliates has received a request to re-post this obligation.

Ny\1285210.2

SCHEDULES

3.1, 3.2, 3.3(A), 3.3(B), 3.4, 3.5, 3.6, 4.1,4.6, 4.15(B), 4.16(A), 4.16(B), 4.17, 4.19(A), 4.19 (D)-
(H),4.21

Ny\1285210.2

 

 

SCHEDULE 11.13

Parcel Three Quit Claim Deed

QUIT CLAIM DEED

 

The Grantor(s): Broadway Gen Funding, LLC, whose address is at c/o Broadway Generating Company, Two
Tower Center, 11th Floor, East Brunswick, New Jersey 08816 quit-claim(s) to Zeeland Power Company,
LLC whose address is c/o
                                         the following described premises situated in
Zeeland, County of Ottawa, and State of Michigan:

          See Attached Exhibit A.

for the sum of Ten Dollars ($10.00), subject to all easements and restrictions of record and the
following restriction:

If the real estate conveyed by this deed is not a lot within a platted subdivision, Grantee should
take into account that it may be located within the vicinity of farmland or a farm operation.
Generally accepted agricultural and management practices which may generate noise, dust, odors, and
other associated conditions may be used and are protected by the Michigan right to farm act. This
notice is given pursuant to Section 109 (4) of the land division act, being PA 288,1967 as amended.

Grantor grants to Grantee the right to make all permissible divisions under Section 108 of the Land
Division Act, P A 288, 1967, as amended.

Dated this
___ day of ___, 2008.

	 	 	 	 	 
	Signed in the presence of
	 	Signed by:

When Recorded Return to:

Alyssa Mayer

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Tax Parcel #70-17-17-101-022

Ny\1285210.2

Send Subsequent Tax Bills To:

Scott Carver

Broadway Generating Company, LLC

Two Tower Center, 11th Floor

East Brunswick, New Jersey 08816

Recording Fee: $14

Drafted By:

Alyssa Mayer

Latham & Watkins LLP

885 Third Avenue

 

 

New York, NY 10022

(212) 906-1878

Transfer Tax: Exempt: MCL207505(a)

MCL207526(a)

Ny\1285210.2

STATE OF COUNTY OF )

) SS.

)

On the ___ day of ___ in the year 2008 before me, the undersigned, a Notary Public in and for said
State, personally appeared , personally known to me or proved to me on the basis of satisfactory
evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by
his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which
the individual(s) acted, executed the instrument.

Notary Public

Ny\1285210.2

 

 

EXHIBIT A

A tract of land located in Zeeland, Ottawa County, Michigan. The land referred to in is taxed under
tax parcel numbers 07-17-17-101-022, and is more specifically described as follows:

PART OF E 1/2 OF NW 1/4 COM N 1/4 COR, TH N 89D 22M 17S W 1329.49 FT & S 0D 27M 33S W 1500 FT ALG W
1/8 LI TO PT OF BEG, TH S 89D 22M 17S E 1124.81 FT, N 60D 42M 54S E 122.6 FT, TH N 60D 47M 14S E
113.93 FT TO N&S 114 LI, TH S 0D 25M 38S W 230.11 FT ALG SD LI TO N’LY LI OF CSX RR R/W, TH S 60D
42M 54S W ALG RR R/W TO INTERS WITH A LI COM NW SEC COR, TH S 89D 22M 17S E 664.75 FT & S 0D 28M
30S W 1690.01 FT ALG W LI OF E 1/2 OF W 1/2 OF NW 1/4 TO PT OF BEG SD LI, TH S 89D 22M 17S E
1860.27 FT TO PT OF ENDING SD LI ON N’L Y LI CSX RR R/W, TH N 89D 22M 17S W ALG SD LI TO PT S 0D
27M 33S W OF BEG, TH N 0D 27M 33S E TO BEG. SEC 17 T5N R14W FROM 70-17-17-101-018 1/03.

Ny\1285210.2

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