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 ofSection 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 |
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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 |
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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 |
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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
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 |
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SCHEDULES TO BE INCORPORATED INTO THE DISCLOSURE LETTERS
APPENDED AS EXHIBITS
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 |
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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., asociedade anônima de capital abertoincorporated under the laws of Brazil (the “Company”), (iii) CPFL Energia S.A., asociedade anônima de capital abertoincorporated under the laws of Brazil (“Purchaser”), and (iv) solely for the limited purposes ofSection 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 inSection 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
1.1Sale and Purchase of Shares. Upon the terms and subject to the conditions of this Agreement, at the Closing (as such term is defined inSection 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”).
1.2Purchase 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.
1.3Closing. 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
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than the second (2nd) Business Day immediately following the date on which the last of the conditions contained inArticle 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.
1.4Closing 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 toArticle VI.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as otherwise disclosed in the Seller Disclosure Letter attached hereto asExhibit A (the “Seller Disclosure Letter”), Seller represents and warrants, as to itself only, to Purchaser as follows in thisArticle II:
2.1Organization 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
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would not reasonably be expected to have, individually or in the aggregate, a Seller Material Adverse Effect.
2.2Title to Shares. Seller and the Director Shareholders are the lawful record and beneficial owners of the Shares set forth opposite their names inSchedule 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 underArticle 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.
2.3Authority; 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 inSection 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 inSchedule 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.
2.4Litigation. 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.
2.5Brokers 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 thisArticle IIA solely for the limited purposes ofSection 8.9:
2A.1Organization 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 ofSection 8.9 of this Agreement. The execution, delivery and performance by Energy solely for the limited purposes ofSection 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 ofSection 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.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
Except as disclosed in the Company Disclosure Letter attached hereto asExhibit B (the “Company Disclosure Letter”), Seller and the Company hereby severally, and not jointly, represent and warrant to Purchaser as follows in thisArticle III (provided that each representation and warranty made by Seller in thisArticle III is made solely to the Knowledge of Seller, except for the representations and warranties inSections 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 and3.18):
3.1Organization and Qualification; Authority; Non-Contravention; Statutory Approvals.
(a)Organization and Qualification. The Company has been duly incorporated and is validly existing as asociedade anônima de capital abertoand 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 inSchedule 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 inSchedule 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),
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(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 inSchedule 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.
3.2Capitalization.
(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 onSchedule 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 inSchedule 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
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Company Subsidiary is a party, or by which the Company or any Company Subsidiary is bound.
3.3Financial 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 inSchedule 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 onSchedule 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.
3.4Absence of Certain Changes or Events.
(a) Since December 31, 2006, except as set forth inSchedule 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 inSections 5.1(a) through5.1(l), that, if taken after the execution and delivery of this Agreement, would require the consent of Purchaser pursuant toSection 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 toSection 5.1, since December 31, 2006, the Company and the Company Subsidiaries have conducted their businesses only in the ordinary course of business.
3.5Tax Matters. Except as set forth inSchedule 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
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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.
3.6Litigation. Except as set forth inSchedule 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.
3.7Compliance with Laws.
(a) Except as set forth inSchedule 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) ThisSection 3.7 does not relate to Tax matters, which are instead the subject ofSection 3.5, employee benefits matters, which are instead the subject ofSection 3.8, Permits, which are instead the subject ofSection 3.9, or environmental matters, which are instead the subject ofSection 3.12.
3.8Employee 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
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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 inSchedule 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 inSchedule 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 inSchedule 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.
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3.9Permits.
(a) Except as set forth inSchedule 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 inSchedule 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) ThisSection 3.9 does not relate to environmental matters, which are instead the subject ofSection 3.12.
3.10Real 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.
3.11Material Contracts.
(a) Set forth inSchedule 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 inSchedule 3.11(a) of the Company Disclosure Letter are referred to herein as the “Company Material Contracts” and, as used in thisSection 3.11, “Contracting Party” shall refer to the Company or Company Subsidiary party to such Company Material Contract):
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(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 inSection 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 inSchedule 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 inSchedule 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
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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 inSchedule 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. ThisSection 3.11(b) does not relate to real property matters, which are instead the subject ofSection 3.10.
3.12Environmental Matters. Except as set forth inSchedule 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 thisSection 3.12.
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3.13Labor 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 onSchedule 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.
3.14Intellectual 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.
3.15Affiliate 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”).
3.16Insurance. Set forth onSchedule 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.
3.17Brokers 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
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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 bySection 5.7.
3.18Books 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.
3.19Investco 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 asExhibit C (the “Purchaser Disclosure Letter”), Purchaser represents and warrants to the Company, Seller and Energy as follows in thisArticle IV:
4.1Organization and Qualification. Purchaser is asociedade 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.
4.2Authority; 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.
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(b)Non-Contravention. Except as set forth onSchedule 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 inSchedule 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 inSection 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 inSchedule 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.
4.3Financing. 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 toSection 5.7 or otherwise, and (iii) to perform all of its other obligations hereunder.
4.4Litigation. Except as set forth inSchedule 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.
4.5Investment 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
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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 inArticle II and the Company’s representations and warranties set forth inArticle III.
4.6Brokers 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.
4.7Qualified 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.
4.8No 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 inArticle II or (ii) any representation or warranty of Seller or the Company set forth inArticle III.
ARTICLE V
COVENANTS
5.1Conduct 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 inSchedule 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
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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 inSchedule 5.1(c), incur any indebtedness in a maximum aggregate principal amount in excess of R$100,000;
(d) except as set forth inSchedule 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 inSchedule 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 extrajudicialor anyacordo privadoin 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 inSchedule 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
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(m) enter into any written agreement or contract to take any of the actions set forth insubsections (a)-(l) of thisSection 5.1.
5.2Approvals.
(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.
5.3Access. 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
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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 onSchedule 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 thisSection 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.
5.4Publicity. 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.
5.5Tax 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
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of the Code that Seller or any of its Affiliates must report on any Tax Return;provided,however, that in no event shall thisSection 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.
5.6Employee 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.
5.7Fees 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
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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 onSchedule 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.]
5.9Termination of Affiliate Contracts. Except as set forth onSchedule 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.
5.10Further 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.]
5.12Change 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 ofSection 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 ofSection 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 thisSection 5.12(b).
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5.13 [Intentionally left blank.]
5.14Resignations 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 onSchedule 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 onSchedule 5.14.
5.15Tag-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).
5.16Releases 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 onSchedule 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.]
5.18Assignment 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 onSchedule 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
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the Closing Date if such agreements are not assigned and assumed pursuant to the foregoingclause (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 thisSection 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 inreais. Payments to Purchaser under thisSection 5.18 shall be made inreais, calculated at the exchange rate on the date or dates Seller makes payment to Purchaser.
5.19Insurance. 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 onSchedule 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 onSchedule 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
6.1Conditions 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.
6.2Conditions 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
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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 inSections 6.2(a) and6.2(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 toSection 1.4.
6.3Conditions 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 inSections 6.3(a) and6.3(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
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limitation, such rights and obligations under the Shareholders Agreement) with respect to the Equity Interests of the Company and any Company Subsidiary in accordance withSection 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 withSection 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 toSection 1.4.
ARTICLE VII
TERMINATION
7.1Termination. 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 thisSection 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 thisSection 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 thisSection 7.1(e) shall not be available to Seller if its failure to fulfill any of
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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 thisSection 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.
7.2Effect of Termination. No termination of this Agreement pursuant toSection 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 toSection 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 inSection 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.
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ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.1Survival 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 inSections 2.2 (Title to Shares) and2.3(a) (Authority), that shall survive indefinitely;
(ii) the representations and warranties of the Seller with respect to the Company contained inSections 3.1(a) (Organization and Qualification),3.1(b) (Authority) and3.2 (Capitalization), that shall survive indefinitely;
(iii) the representations and warranties of Purchaser contained inSections 4.2(a) (Authority) and4.8 (No Knowledge of Seller or Company Breach), that shall survive indefinitely; and
(iv) the covenants and agreements of the Parties contained inSections 5.3 (Access),5.7 (Fees and Expenses),5.10 (Further Assurances),5.12 (Change of Name),5.16 (Releases of Certain Guarantees) and7.2 (Effect of Termination) andArticle 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, thisArticle VIII, and the indemnification provided for in thisArticle VIII shall be the sole and exclusive remedy (except in the case of fraud) for Losses related to or in connection with such breach.
8.2Indemnification of Purchaser by Seller. Subject to the terms and conditions of thisArticle VIII, and except when the Loss arises from Purchaser’s negligence or willful misconduct or the matters contemplated bySection 8.5, from and after the Closing Date the Seller shall, subject toSection 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 toArticles II orIII 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 thisSection 8.2 shall be made inreais, calculated at the exchange rate on the date or dates Seller makes payment or payments to Purchaser.
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8.3Indemnification of Seller by Purchaser. Subject to the terms and conditions of thisArticle 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 toArticle 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 ofSection 5.7). Payments to Seller under thisSection 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.
8.4Limitations on Seller’s Indemnification.
(a)Limitations. Claims for indemnification underSection 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 foregoingclause (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 thisSection 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 underSection 8.2 or8.3 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 thisSection 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
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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.
8.5Special 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 onSchedule 8.5(a), which shall be excluded from the Seller’s indemnification obligations and limits underSections 8.2,8.4(a),8.4(b) and8.4(c).
(b)Special Seller Indemnification Cap. In no event shall the aggregate amount of Losses payable by Seller underSection 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 ofSchedule 8.5(a), the Seller’s obligations under thisSection 8.5(c) shall expire on October 27, 2009, unless a Third Party Claim (as defined inSection 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 thisSection 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 inSchedule 8.5(a), Seller’s obligations under thisSection 8.5(c) shall expire on the fifteenth anniversary of the Closing Date.
(d)Payments. Payments to Purchaser under thisSection 8.5 shall be made inreais, calculated at the exchange rate on the date or dates Seller makes payment or payments to Purchaser.
8.6Mitigation. 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.
8.7General Procedures Applicable to Claims for Indemnification.
(a)Third Party Claim. Any request for indemnification by a party under thisArticle 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 withSection 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
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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 thisArticle VIII and all Losses incurred by Indemnitor shall be included in the calculation of the maximum amount of indemnification set forth inSection 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 toSection 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 inSection 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
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Loss, which amounts shall be included in the calculation of the maximum amount of indemnification set forth inSection 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 thisArticle 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 withSection 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 thisArticle VIII.
8.8Payment. Indemnitor shall reimburse Indemnitee for Losses incurred no later than ten (10) days after the final resolution of a Notice of Claim in accordance withSection 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 inreais.
8.9Energy 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 thisArticle 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 thisArticle VIII from Purchaser or any member of the Purchaser Group shall be given to Seller and Energy concurrently.
ARTICLE IX
DEFINITIONS AND INTERPRETATION
9.1Defined 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) |
9.2Definitions. 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” meansAgência Nacional de Energia Elétrica, the Brazilian Electricity Regulatory Agency.
“Brazilian GAAP” means thePrincípios 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” meansConselho 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
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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 onSchedule 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 theComissão 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” meansÍndice 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 onSchedule 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 onSchedule 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 onSchedule 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 asociedade anônima de capital aberto, itsestatuto 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.
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“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.
9.3Interpretation. 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 Brazilianreais; and
(h) references to “US$” refer to U.S. dollars.
ARTICLE X
GENERAL PROVISIONS
10.1Notices. 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:
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(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
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
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
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
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
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,
Rua Vigato, 1620
13820-000 Jaguaríúna SP, Brazil,
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Fax: (55-19) 3837-4564
Attention: General Counsel
Attention: General Counsel
(d) if to Energy,
CMS Energy Corporation
One Energy Plaza
Jackson, MI 49201
Fax: (517) 788-1671
Attention: General Counsel
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 thisSection 10.1, notice to the Company shall not constitute notice to Seller and/or Energy, and vice versa.
10.2Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties, Energy and their respective heirs, successors and permitted assigns.
10.3Assignment; 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.
10.4Amendment; 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
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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.
10.5Entire 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.
10.6Severability. 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.
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10.7Counterparts. 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.
10.8Governing Law. This Agreement shall be governed by and construed in accordance with the laws of Brazil.
10.9Arbitration. 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 toSection 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 toSection 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.
10.10Limitation 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.
10.11Enforcement. 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.
10.12No 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]
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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
ofSection 8.9 as of the 12th day of April, 2007:
ofSection 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 ofSection 8.9)
(solely for the limited purposes ofSection 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
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
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
Seller Knowledge Group
Joseph Paul Tomasik
Rajesh Swaminathan
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 ofSection 8.9)
(solely for the limited purposes ofSection 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
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
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
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$400,000,000. The CADE clearance process typically takes 6 to 9 months. The filing must be done, in this transaction, within 15 Business Days after the date of the execution of the Agreement.
8
Schedule 3.2(b)
Company Subsidiaries
Company Subsidiaries
1. CMS COMERCIALIZADORA DE ENERGIA LTDA.
JURISDICTION OF FORMATION:São Paulo, State of São Paulo
ISSUED AND OUTSTANDING EQUITY INTERESTS:R$ 630,292.00 divided into 630.292 quotas.
EQUITY INTERESTS OWNERSHIP:
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:
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:
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:
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
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
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)
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)
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)
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)
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
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
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$2,608,088.75. | ||
2. | On March 22, 2007, CJGE issued a share dividend to its shareholders. The Company’s percentage portion of the outstanding shares was unchanged after such share dividend. | ||
3. | On March 22, 2007, the Shareholders’ Meeting (Assembléia Geral Ordinária e Extraordinária) amended Article 51 of the Company’s bylaws and thereby increased the minimum mandatory annual dividend from 25% to 50% of the net income with respect to each fiscal year. |
See Schedule 5.1(l).
30
Schedule 3.5
Tax Matters
Tax Matters
The amounts indicated in this Schedule are just estimates and may not correspond to the actual economic values that may be imposed to the companies.
B. AUDITS, ADMINISTRATIVE AND COURT PROCEEDING
LEGEND:
(d) amount under discussion — subject to inflation adjustment
(a) amount attributed to the case — amount assigned to the lawsuit upon filing for purposes of paying the Courts fees (“Valor da Causa”)
Proceeding No. | Companies Involved | Claimed Amount (R$) | 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 | SRF1 | 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$2,351,117.26 | 25.May.06 — Asset assigned to attachment: “tract with area of 240,036.05m2, located in Jaguariúna, near Rodovia SP340 and Rua Vigato, real estate resulting from division of recordation no. 17.559 and duly described and characterized in public deed issued at the 2nd Notary Public of São Bernardo do Campo, book no. 849, page 262” |
34
Schedule 3.6
Litigation
Litigation
The amounts indicated in this Schedule are just estimates and may not correspond to the actual economic values that may be imposed to the companies.
LEGEND:
(d) amount under discussion — subject to inflation adjustment
(a) amount attributed to the case — amount assigned to the lawsuit upon filing for purposes of paying the Courts fees (“Valor da Causa”)
CIVIL ACTIONS
Docket number | Company | Claimed Amount (R$) | 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
Compliance with Laws
DESCRIPTION | CLAIMED AMOUNT | COMPANY | PAYMENT DATE | STATUS | ||||||
Notice0531/02 — AI 151 — related to DEC and FEC indicators with CSPE | 10,071.48 | CSPE | 01/31/2003 | Closed | ||||||
Notice0532/02 — AI 152 — related to DEC indicator with CPEE | 3,111.27 | CPEE | 01/31/2003 | Closed | ||||||
Notice0535/02 — 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 ANEELNotice 0142/2003 AI 004/2004 | WARNING | CSPE | — | Awaiting dismissal | ||||||
Services Agreement — 1st addendum executed without consent by ANEELNotice 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 ANEELNotice 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 ANEELNotice 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 CCEENotice 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 CSPENotice 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 ReleaseNotice 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
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
Employee Benefits
See Schedule 3.8(e)
52
Schedule 3.8(e)
Employee Benefits
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
Permits
None.
54
Schedule 3.10(a)
Real Property
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 04alqueires(eachalqueirecorresponds 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 (eachalqueirecorresponds 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 namedDistrito Industrial (Industrial District) with 600m2 | Land in theDistrito 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
Contracts
I.BNDES FINANCING AGREEMENTS
SeeSchedule 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 andOperador 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 andOperador 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 andOperador 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 andOperador 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 andOperador 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. SeeSchedule 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.
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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.
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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.
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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
Contracts
None.
64
Schedule 3.11(b)(ii)
Contracts
Contracts
None.
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Schedule 3.12
Environmental Matters
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
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Schedule 3.13(a)
Labor Matters
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.
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Schedule 3.13(b)
Labor Matters
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) |
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Schedule 3.15
Affiliate Contracts
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. |
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Schedule 3.16
Insurance
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)
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)
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
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
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
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)
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.
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)
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
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)
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 intheirentirety 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 (AgMciaNacional de EnergiaEletrica) — ANEEL. The respective application filed with ANEEL mustbesubmitted 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(ConselhoAdministrativo de DefesaEconomics)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$400,000,000. The filing must be done, in this transaction, within 15 Business Days after the date of the execution of the Agreement.
3. CVM — According to the Paragraph 2 of the Section 254-A of the Federal Law No. 6,404, as of December 15, 1976, as amendedby the Federal Law No. 10,303, as o£October 31, 2001 (the Brazilian Law on Corporations), any transfer of control of a registeredcompany shallbe approved by the Brazilian Securities Commission as long as the conditions of the public offer comply with the applicable legal requirements.
Schedule 4.4
None.
Schedule 9.2(c)
Purchaser Knowledge Group
Wilson P. Ferreira Junior
Reni Antonio da Silva
Jose Antonio de Almeida Filippo
Sergio de Britto Pereira Figueira
Reni Antonio da Silva
Jose Antonio de Almeida Filippo
Sergio de Britto Pereira Figueira
Schedule 5.1(a)
Conduct of the Company
Conduct of the Company
None.
Schedule 5.1(d)
Conduct of the Company
Conduct of the Company
CMS GROUP — CONSOLIDATED
CAPEX — FORECAST — 2007 (2+10)
(Expressed in R$ ‘000)
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)
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)
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)
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)
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)
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
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
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
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
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
Termination of Affiliate Contracts
See Schedule 3.15.
Schedule 5.14
Resignations and Terminations
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
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
Executive Officer and Manager Agreements
See Schedule 3.8(e)
Schedule 5.19
Insurance
Insurance
None.
Schedule 8.5(a)
Special Seller Indemnification
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.)