Exhibit 10.3

EQUITY PURCHASE AGREEMENT

Dated as of September 27, 2012

by and between

TECO Guatemala Holdings II, LLC

as Seller,

and

Renewable Energy Investments Guatemala Limited,

as Purchaser

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TABLE OF CONTENTS

 

          Page  

ARTICLE I SALE AND PURCHASE OF THE EQUITY INTERESTS

     1   

Section 1.1

  

Sale and Purchase of the Equity Interests

     1   

ARTICLE II PURCHASE PRICE

     2   

Section 2.1

  

Purchase Price; Letter of Credit

     2   

Section 2.2

  

Method of Payment

     2   

Section 2.3

  

Closing

     2   

ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

     3   

Section 3.1

  

Corporate Existence; Standing

     3   

Section 3.2

  

Authorization

     3   

Section 3.3

  

Noncontravention

     4   

Section 3.4

  

Equity Ownership

     4   

Section 3.5

  

Governmental Approvals

     4   

Section 3.6

  

Legal Proceedings

     4   

Section 3.7

  

Brokers

     5   

Section 3.8

  

Solvency

     5   

Section 3.9

  

Bankruptcy

     5   

ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE ACQUIRED ENTITIES

     5   

Section 4.1

  

Organization, Standing and Corporate Power

     5   

Section 4.2

  

Capitalization of Services and the Subsidiaries

     6   

Section 4.3

  

Noncontravention

     7   

Section 4.4

  

Financial Statements

     7   

Section 4.5

  

Undisclosed Liabilities

     8   

Section 4.6

  

Absence of Certain Changes

     8   

Section 4.7

  

Legal Proceedings

     9   

Section 4.8

  

Compliance With Laws; Permits

     10   

Section 4.9

  

Tax Matters

     10   

Section 4.10

  

Environmental Matters

     10   

Section 4.11

  

Real Property

     11   

Section 4.12

  

Intellectual Property

     11   

Section 4.13

  

Contracts

     12   

Section 4.14

  

Insurance

     14   

Section 4.15

  

Employees

     15   

Section 4.16

  

Personal Property

     15   

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Section 4.17

  

Brokers

     15   

Section 4.18

  

Assets Used in Business

     15   

Section 4.19

  

Bank Accounts; Powers of Attorney

     16   

Section 4.20

  

Bankruptcy

     16   

Section 4.21

  

Books and Records

     16   

Section 4.22

  

Transactions with Affiliates

     16   

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

     16   

Section 5.1

  

Corporate Existence; Standing; Bankruptcy; Solvency

     16   

Section 5.2

  

Authorization

     17   

Section 5.3

  

Noncontravention

     17   

Section 5.4

  

Governmental Approvals

     18   

Section 5.5

  

Capital Resources

     18   

Section 5.6

  

Legal Proceedings

     18   

Section 5.7

  

Brokers

     18   

Section 5.8

  

Purchase for Investment

     18   

Section 5.9

  

Purchaser’s Independent Investigation

     19   

ARTICLE VI COVENANTS AND AGREEMENTS

     19   

Section 6.1

  

Conduct of Business

     19   

Section 6.2

  

Employment Matters

     22   

Section 6.3

  

Commercially Reasonable Efforts

     23   

Section 6.4

  

Public Announcements

     24   

Section 6.5

  

Access to Information; Periodic Reports; Confidentiality

     24   

Section 6.6

  

Preservation of Records; Post-Closing Cooperation

     26   

Section 6.7

  

Fees and Expenses

     26   

Section 6.8

  

Directors and Officers.

     26   

Section 6.9

  

Related-Party Transactions

     28   

Section 6.10

  

TECO Marks

     28   

Section 6.11

  

Consents

     28   

Section 6.12

  

Non-Solicitation

     29   

Section 6.13

  

Exclusivity

     29   

Section 6.14

  

Commitment Letters

     29   

ARTICLE VII POST-CLOSING TAX MATTERS

     30   

Section 7.1

  

Tax Filings

     30   

Section 7.2

  

Pre-Closing and Straddle-Period Taxes.

     31   

Section 7.3

  

Post-Closing Actions; Refunds

     32   

ARTICLE VIII CONDITIONS PRECEDENT

     33   

 

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Section 8.1

  

Conditions to Each Party’s Obligation to Effect the Transactions

     33   

Section 8.2

  

Conditions to Obligations of the Purchaser

     33   

Section 8.3

  

Conditions to Obligations of the Seller

     34   

ARTICLE IX TERMINATION

     35   

Section 9.1

  

Termination

     35   

Section 9.2

  

Effect of Termination; Reverse Termination Fee

     36   

Section 9.3

  

Return of Confidential Information

     36   

ARTICLE X INDEMNIFICATION

     37   

Section 10.1

  

Indemnification by the Seller

     37   

Section 10.2

  

Indemnification by the Purchaser

     37   

Section 10.3

  

Indemnification Procedures

     38   

Section 10.4

  

Certain Limitations

     40   

Section 10.5

  

Termination of Indemnification Obligations

     41   

Section 10.6

  

Dollar Limitations

     42   

Section 10.7

  

Exclusive Remedy

     43   

ARTICLE XI MISCELLANEOUS

     43   

Section 11.1

  

No Other Representations or Warranties

     43   

Section 11.2

  

Amendment or Supplement

     44   

Section 11.3

  

Extension of Time, Waiver, Etc.

     44   

Section 11.4

  

Assignment

     45   

Section 11.5

  

Counterparts

     45   

Section 11.6

  

Entire Agreement; No Third-Party Beneficiaries

     45   

Section 11.7

  

Governing Law

     45   

Section 11.8

  

Consent to Jurisdiction; Waiver

     45   

Section 11.9

  

Notices

     46   

Section 11.10

  

Severability

     47   

Section 11.11

  

Definitions

     47   

Section 11.12

  

Rules of Interpretation

     55   

Section 11.13

  

Specific Performance

     57   

Section 11.14

  

Further Assurances

     57   

 

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EQUITY PURCHASE AGREEMENT

This EQUITY PURCHASE AGREEMENT, dated as of September 27, 2012, is by and
between TECO Guatemala Holdings II, LLC, a limited liability company organized
under the Laws of the State of Florida (the “Seller”) and Renewable Energy
Investments Guatemala Limited, an International Business Company organized under
the Laws of the Commonwealth of the Bahamas (the “Purchaser”). Certain
capitalized terms used in this Agreement shall have the meanings set forth in
Section 11.11.

RECITALS

WHEREAS, the Seller is the record and beneficial owner of one hundred percent
(100%) of the equity interests of TECO Guatemala Services, Ltd., an exempted
company formed under the Laws of the Cayman Islands (“Services”);

WHEREAS, Services, directly and indirectly through its wholly owned subsidiary
Tasajero I, Ltd., an exempted company formed under the Laws of the Cayman
Islands (“Tasajero”), is the owner of one hundred percent (100%) of the equity
interests of TPS Operaciones de Guatemala, Ltda., a sociedad de responsabilidad
limitada organized under the Laws of Guatemala (“Operaciones”); and

WHEREAS, pursuant to the terms and conditions set forth herein, the Seller
desires to sell and transfer to the Purchaser, and the Purchaser desires to buy
from the Seller, one hundred percent (100%) of the outstanding equity interests
of Services.

NOW, THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained in this Agreement, and intending to be legally bound
hereby, the Seller and the Purchaser hereby agree as follows:

ARTICLE I

SALE AND PURCHASE OF THE EQUITY INTERESTS

Section 1.1 Sale and Purchase of the Equity Interests. Subject to the terms and
conditions set forth herein, at the Closing, for the consideration specified in
Section 2.1, the Seller will sell, assign, convey, transfer and deliver to the
Purchaser, and the Purchaser will acquire from the Seller, one hundred
(100) ordinary shares of U.S.$1.00 each in the capital of Services representing
one hundred percent (100%) of the issued equity interests of Services (the
“Acquired Company Interests”).

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ARTICLE II

PURCHASE PRICE

Section 2.1 Purchase Price; Letter of Credit. In consideration for the sale,
assignment, conveyance, transfer and delivery of the Acquired Company Interests,
the Purchaser will at the Closing pay to the Seller an amount equal to One
Million Five Hundred Thousand dollars (U.S.$1,500,000) (“Purchase Price”).
Concurrently with the execution and delivery of this Agreement and as security
for the performance of its obligations hereunder, the Purchaser shall cause to
be delivered to the Seller an irrevocable letter of credit substantially in the
form of Exhibit A and reasonably satisfactory to the Seller (the “Letter of
Credit”) in the amount of U.S.$250,000 issued by a recognized international
financial institution satisfactory to the Seller designating the Seller and its
successors and assigns as beneficiary and permitting drawings upon such Letter
of Credit upon the delivery to such financial institution of a certificate of
the Seller representing that the Purchaser is obligated to indemnify the Seller
in accordance with Section 9.1(d)(i) and Section 9.2(b). Any Letter of Credit
provided to the Seller pursuant to this Section will expire on the Closing.

Section 2.2 Method of Payment. Each applicable payment under this Article II
shall be made in U.S. Dollars when due by wire transfer of immediately available
funds to an account that the Person owed such funds has designated to the Person
owing such funds.

Section 2.3 Closing.

(a) The closing of the purchase and sale of the Acquired Company Interests (the
“Closing”) will take place (i) at the offices of Holland & Knight LLP, 701
Brickell Avenue, Miami, Florida at 10:00 a.m. local time on the third Business
Day following the satisfaction or waiver of all conditions set forth in
Article VIII, or (ii) at such other place, date and time as the Seller and the
Purchaser may agree (the “Closing Date”). The Closing shall be deemed to be
effective as of 12:01 a.m. (local time) on the day of the Closing Date.

(b) At the Closing, the Seller will deliver or cause to be delivered to the
Purchaser the following:

(i) to the extent applicable, certificates representing the Acquired Company
Interests owned by it, duly endorsed for transfer by delivery or accompanied by
stock powers duly executed in blank;

(ii) written resignations of the directors and officers of the Acquired Entities
as set forth on Section 2.3(b)(ii) of the Disclosure Schedule; and

 

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(iii) all other instruments, agreements, certificates and documents required to
be delivered by the Seller at or prior to the Closing Date pursuant to this
Agreement.

(c) At the Closing, the Purchaser will deliver or cause to be delivered the
following:

(i) the payment required by Section 2.1; and

(ii) all other instruments, agreements, certificates and documents required to
be delivered by the Purchaser at or prior to the Closing Date pursuant to this
Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER

Except as set forth in the disclosure schedule delivered by the Seller to the
Purchaser simultaneously with the execution of this Agreement (the “Disclosure
Schedule”), the Seller, as of the date hereof, represents and warrants to the
Purchaser as follows:

Section 3.1 Corporate Existence; Standing. The Seller is an entity duly
organized, validly existing and in good standing (or equivalent status) under
the Laws of its jurisdiction of organization.

Section 3.2 Authorization. The Seller has full legal power and authority to
execute and deliver this Agreement and all documents required to be executed by
it, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution, delivery and
performance of this Agreement by the Seller and the consummation by the Seller
of the Transactions have been, and, in the case of documents to be executed and
delivered at the Closing, will have been duly authorized by all necessary action
on the part of the Seller, and no other action on the part of the Seller is
necessary to authorize this Agreement or the consummation of the Transactions.
This Agreement and all documents required hereunder to be executed by the Seller
have been and, in the case of documents to be executed and delivered at the
Closing, will have been immediately prior to Closing, duly executed and
delivered by the Seller and, assuming due authorization, execution and delivery
by the other parties thereto, this Agreement and all documents required
hereunder to be executed by the Seller constitute and will constitute, in the
case of documents to be executed and delivered at the Closing, the legally valid
and binding obligations of the Seller, enforceable against the Seller in
accordance with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar Laws of general application affecting or relating to the
enforcement of creditors’ rights generally and (ii) is

 

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subject to general principles of equity, whether considered in a proceeding at
Law or in equity (the “Bankruptcy and Equity Exception”).

Section 3.3 Noncontravention. Neither the execution and delivery by the Seller
of this Agreement, nor the consummation by the Seller of the Transactions, will
(i) result in the creation, imposition or enforcement of any Lien on, over or
affecting the Acquired Company Interests owned by the Seller; (ii) conflict with
or violate any provisions of the articles of incorporation, bylaws or other
constitutive or corporate documents of the Seller, (iii) violate, conflict with,
result in a breach of or constitute a default under any of the terms, conditions
or provisions of any Contract to which the Seller is a party; or (iv) violate,
conflict with or result in a breach of any Law, judgment, writ or injunction of
any Governmental Authority applicable to the Seller, except, in the case of
clauses (ii), (iii) and (iv), for such conflicts, violations, breaches or
defaults which would not impair in any material respect the ability of the
Seller to perform its obligations hereunder or prevent or materially delay
consummation of the Transactions.

Section 3.4 Equity Ownership.

(a) The Seller is the record and beneficial owner of one hundred percent
(100%) of the Acquired Company Interests, free and clear of any Liens.

(b) Except as set forth in Section 3.4(b) of the Disclosure Schedule, there are
no voting trusts, shareholder agreements or other agreements or understandings
to which the Seller is a party with respect to the ownership, disposition or
voting of the Acquired Company Interests, and there are no outstanding or
authorized options, warrants, subscription or other agreements to which the
Seller is a party or by which it is bound, relating to the sale, issuance or
voting of, or the granting of rights to acquire, any shares of any class or
series of the capital stock of, or other equity interest in, Services, or any
securities convertible or exchangeable into or evidencing the right to purchase
any shares of any class or series of the capital stock of, or other equity
interest in, Services. The Seller has not granted any right to any distribution,
carried interest, economic interest, preferred return or similar right with
respect to Services.

Section 3.5 Governmental Approvals. There are no consents or approvals of, or
filings, declarations or registrations with, any Governmental Authority that are
necessary for the execution and delivery of this Agreement by the Seller or the
performance of this Agreement and the consummation of the Transactions by the
Seller, other than such consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not impair in any
material respect the ability of the Seller to perform its obligations hereunder
or prevent or materially delay consummation of the Transactions.

Section 3.6 Legal Proceedings. There are no suits, actions, claims, proceedings
or investigations pending or, to the Knowledge of the Seller, threatened
against, relating to or involving the Seller that would reasonably be expected
to impair in any material respect the

 

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ability of the Seller to perform its obligations hereunder or prevent or
materially delay the consummation of the Transactions.

Section 3.7 Brokers. The Seller and its Affiliates (including the Acquired
Entities) have not entered into any Contract or other arrangement or
understanding (written or oral, express or implied) with any Person which may
result in the obligation of the Purchaser, any of its Affiliates or any of the
Acquired Entities to pay any fees or commissions to any broker or finder as a
result of the execution and delivery of this Agreement or the consummation of
the Transactions.

Section 3.8 Solvency. Immediately after the Closing and after giving effect to
the Transactions, the sale of the Acquired Company Interests, the receipt of the
Purchase Price, the payment of all fees and expenses related to the Transactions
and any other transactions and/or transfers contemplated by the Seller in
connection therewith: (i) the fair saleable value of the assets of the Seller
will exceed its liabilities (including contingent liabilities); (ii) the Seller
will not have an unreasonably small amount of capital for the operation of its
business; and (iii) the Seller will be able to pay its liabilities as they
mature. In consummating such transactions, the Seller does not intend to
disturb, delay, hinder or defraud creditors or other persons to which it is
indebted.

Section 3.9 Bankruptcy. The Seller is neither in bankruptcy, liquidation or
receivership (and no order or resolution therefore has been presented and no
notice of appointment of any liquidator, receiver, administrative receiver or
administrator has been given), nor are there any valid grounds or circumstances
on the basis of which any such procedure may be requested by any Person on a
voluntary or involuntary basis.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE ACQUIRED ENTITIES

Except as set forth in and as qualified by the Disclosure Schedule the Seller,
as of the date hereof, represents and warrants to the Purchaser as follows:

Section 4.1 Organization, Standing and Corporate Power.

Each of the Acquired Entities is an entity duly organized, validly existing and
in good standing (or equivalent status) under the Laws of its jurisdiction of
organization and has all requisite corporate power and authority necessary to
own or lease all of its properties and assets and to carry on its business as it
is now being conducted. Each of the Acquired Entities is duly licensed or
qualified to do business in each jurisdiction in which the nature of the
business conducted by it or the character or location of the properties and
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good standing (or
equivalent status) would not reasonably be expected to have a

 

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Material Adverse Effect. True and correct copies of the organizational governing
documents of each of the Acquired Entities (the “Company Charter Documents”)
have previously been delivered or made available to the Purchaser.

Section 4.2 Capitalization of Services and the Subsidiaries.

(a) The total equity interests of Services and the amount of such equity
interests issued and outstanding is set forth in Section 4.2(a) of the
Disclosure Schedule.

(b) All of the Acquired Company Interests are duly authorized, validly issued,
fully paid and nonassessable, and have not been issued in violation of any
preemptive rights, rights of first refusal or similar rights.

(c) Except as set forth in Section 4.2(c) of the Disclosure Schedule, the
Acquired Company Interests owned by the Seller are the only equity interests of
Services issued and outstanding, and there are no other equity interests of
Services authorized, issued or outstanding, and there are no outstanding or
authorized options, warrants, subscription or other agreements to which Services
is a party or by which it is bound, relating to the sale, issuance or voting of,
or the granting of rights to acquire, any shares of any class or series of the
capital stock of, or other equity interest in, any Acquired Entity or any
securities convertible or exchangeable into or evidencing the right to purchase
any shares of any class or series of the capital stock of, or other equity
interest in, any Acquired Entity. Services has not granted any right to any
distribution, carried interest, economic interest, preferred return or similar
right with respect to any Acquired Entity.

(d) Section 4.2(d)(i) of the Disclosure Schedule sets forth the total equity
interests of each Subsidiary, the amount of such equity interests issued and
outstanding and the record and beneficial owners of such outstanding equity
interests. Except as set forth in Section 4.2(d)(i) of the Disclosure Schedule,
no Acquired Entity has any direct or indirect ownership interests in any
corporation, partnership or other Person. All the equity interests of the
Subsidiaries are duly authorized, validly issued, fully paid and nonassessable,
and have not been issued in violation of any preemptive rights, rights of first
refusal or similar rights. Except as set forth in Section 4.2(d)(ii) of the
Disclosure Schedule, the outstanding equity interests of the Subsidiaries, as
set forth on Section 4.2(d)(i) of the Disclosure Schedule, are the only equity
interests of the Subsidiaries issued and outstanding, and there are no other
equity interests of the Subsidiaries authorized, issued or outstanding, and
there are no outstanding or authorized options, warrants, subscription or other
agreements to which any Subsidiary is a party or by which it is bound, relating
to the sale, issuance or voting of, or the granting of rights to acquire, any
shares of any class or series of the capital stock of, or other equity interest
in, any Subsidiary or any securities convertible or exchangeable into or
evidencing the right to purchase any shares of any class or series of the
capital stock of, or other equity interest in, any Subsidiary. Except as set
forth in Section 3.4(b) of the Disclosure Schedule, there are no voting trusts,
shareholder agreements or other agreements or understandings to which any
Subsidiary is a party with respect to the

 

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ownership, disposition or voting of any Subsidiary. No Subsidiary has granted
any right to any Person for any distribution, carried interest, economic
interest, preferred return or similar right.

(e) Except as reflected on the Year End Financial Statements (Services and
Tasajero), the sole assets of Services consist of equity interests in Tasajero
and Operaciones and the sole assets of Tasajero consist of equity interests in
Operaciones and none of Services and Tasajero has conducted any business other
than incidental to the ownership of such equity interests.

Section 4.3 Noncontravention. Neither the execution and delivery of this
Agreement by the Seller, nor the consummation of the Transactions by the Seller,
will (i) conflict with or violate any provision of the Company Charter
Documents, (ii) violate, conflict with, result in a breach of or constitute a
default under any of the terms, conditions or provisions of any Material
Contract to which any Acquired Entity is a party or (iii) violate, conflict with
or result in a breach of any Law, judgment, writ or injunction of any
Governmental Authority applicable to any Acquired Entity, except, in the case of
clauses (ii) and (iii), for such conflicts, violations, breaches or defaults
which would not reasonably be expected to have a Material Adverse Effect.

Section 4.4 Financial Statements.

(a) Section 4.4(a) of the Disclosure Schedule contains true and correct copies
of:

(i) with respect to Operaciones, (A) the audited balance sheet, income statement
and statement of cash flows for the year ended December 31, 2011 (“Year End
Financial Statements (Operaciones)”); and (B) the unaudited balance sheet,
income statement and statement of cash flows for the seven month period ended
July 31, 2012, (“July Financial Statements (Operaciones)” and together with the
Year End Financial Statements (Operaciones), the “Financial Statements
(Operaciones)”), all of which have been prepared in conformity with Guatemalan
GAAP; and

(ii) with respect to Services and Tasajero, (A) the unaudited balance sheet,
income statement and statement of cash flows for the year ended December 31,
2011 (the “Year End Financial Statements (Services and Tasajero)”) and (B) the
unaudited balance sheet, income statement and statement of cash flows for the
seven month period ended July 31, 2012 (the “July Financial Statements (Services
and Tasajero)”), together with the Year End Financial Statements (Services and
Tasajero), the “Financial Statements (Services and Tasajero)”), all of which
have been prepared in conformity with US GAAP;

 

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(b) The Financial Statements (Operaciones) and the Financial Statements
(Services and Tasajero) (collectively, the “Financial Statements”) fairly
present, in all material respects, the financial position and results of
operations of Operaciones, and Services and Tasajero, respectively, for the
periods or as of the dates set forth therein (subject to year-end audit
adjustments and the absence of footnotes).

(c) Section 4.4(c) of the Disclosure Schedule contains with respect to
Operaciones true and correct copies of the unaudited balance sheet, income
statement and statement of cash flows for the year ended December 31, 2011 and
(B) the unaudited balance sheet, income statement and statement of cash flows
for the seven month period ended July 31, 2012, (collectively, the (“Management
Financial Statements (Operaciones)”). The Management Financial Statements
(Operaciones) are derived from and are in accordance with the accounting books
and records of Operaciones and comply as to form (subject to year-end audit
adjustments and the absence of footnotes) in all material respects with US GAAP
requirements with respect thereto as of their respective dates.

Section 4.5 Undisclosed Liabilities. To the Knowledge of the Seller, none of the
Acquired Entities has any liabilities of any kind that (other than as specified
in clause (f) below) would be required under US GAAP, with respect to Services
and Tasajero, or Guatemalan GAAP, with respect to Operaciones, to have an amount
set forth on an audited balance sheet (or to be described in its footnotes),
except for (a) liabilities set forth, reflected in, reserved against or
disclosed in the Financial Statements, (b) liabilities incurred in the ordinary
course of business consistent with past practice since July 31, 2012,
(c) liabilities disclosed in Section 4.5 of the Disclosure Schedule, (d) as
contemplated by this Agreement or otherwise in connection with the Transactions,
(e) liabilities related to the subject matter of the other representations and
warranties contained in this Article IV and (f) such other liabilities
(including, specifically, any liabilities of an Acquired Entity not required to
be shown on a balance sheet prepared in accordance with US GAAP or Guatemalan
GAAP, as applicable) that do not exceed U.S.$150,000.

Section 4.6 Absence of Certain Changes. Except as set forth in Section 4.6 of
the Disclosure Schedule, since July 31, 2012 (a) there has not been a Material
Adverse Effect, (b) except in connection with the Transactions and as would not
reasonably be expected to have a Material Adverse Effect, the business of the
Acquired Entities has been conducted in the ordinary course of business
consistent with past practices, and (c) no Acquired Entity has:

(i) (A) issued, sold or granted any of its equity interests, or any securities
or rights convertible into, exchangeable or exercisable for, or evidencing the
right to subscribe for any of its equity interests, or any rights, warrants or
options to purchase any of its equity interests; (B) redeemed, purchased or
otherwise acquired any of its equity interests, or any rights, warrants or
options to acquire any of its equity interests; (C) declared, set aside for
payment or paid any dividend on, or made any other distribution in

 

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respect of, any of its equity interests; or (D) split, combined, subdivided or
reclassified any of its equity interests;

(ii) amended its certificate of incorporation, bylaws or analogous charter
documents;

(iii) (A) adopted or effected a plan or agreement of complete or partial
liquidation or dissolution or (B) effected any merger into or with any other
Person, consolidation with any other Person or acquisition of all or any
substantial portion of the business or assets of any Person;

(iv) except as required to comply with applicable Law or agreements, plans or
arrangements existing prior to the date of this Agreement and listed on the
Disclosures Schedules, (A) taken any action with respect to, adopted, entered
into, terminated or amended any employee benefit plan or any collective
bargaining agreement, (B) increased the compensation or benefits of, or pay or
promise any bonus to, any director, officer, employee or consultant or
materially modified their terms of employment or engagement, (C) amended or
accelerated the payment, right to payment or vesting of any compensation or
benefits, including any outstanding equity compensation, (D) paid any bonus or
other benefit to its directors, officers or employees or hired any new officers
or (except in the ordinary course of business and consistent with past practice)
any new employees, (E) granted any awards under any bonus, incentive,
performance or other compensation plan or arrangement or benefit plan, or
(F) taken any action to fund or in any other way secure the payment of
compensation or benefits under any employee plan, agreement, contract or
arrangement or benefit plan;

(v) made any material change in accounting policies or practices (including any
change in depreciation or amortization policies) of any Acquired Entity, except
in each case as required under Guatemalan GAAP or in the ordinary course of
business and consistent with past practice;

(vi) except in the ordinary course of business and consistent with past
practice, made any material Tax election, changed any Tax accounting method or
settled or compromised any material Tax liability; or

(vii) entered into any Contract, commitment or arrangement to do, or taken, or
agree to take any of the foregoing actions.

Section 4.7 Legal Proceedings. Except as set forth in Section 4.7 of the
Disclosure Schedule, as of the date hereof, there is no pending or, to the
Knowledge of the Seller, threatened

 

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legal (whether civil or criminal), administrative, arbitral or similar
proceeding, claim, suit or action against any of the Acquired Entities, nor is
there any injunction, order, judgment, ruling or decree imposed upon any of the
Acquired Entities in each case, or to the Knowledge of the Seller, investigation
that is pending by or before any Governmental Authority, that would reasonably
be expected to have a Material Adverse Effect.

Section 4.8 Compliance With Laws; Permits. Except as would not reasonably be
expected to have a Material Adverse Effect, each of the Acquired Entities is in
compliance with all laws, statutes, ordinances, codes, rules, regulations,
decrees, orders, judicial or arbitral or administrative or regulatory judgments,
decisions, rulings or awards issued by any Governmental Authorities
(collectively, “Laws”) applicable to the Acquired Entities. No Acquired Entity
has since January 1, 2011 received from any Governmental Authority any written
notice that it is not in compliance with applicable Law. Each of the Acquired
Entities holds all licenses, franchises, permits, certificates, approvals and
authorizations from Governmental Authorities necessary for the lawful conduct of
their respective businesses as currently conducted (collectively, “Permits”),
except where the failure to hold the same would not reasonably be expected to
have a Material Adverse Effect. Each of the Acquired Entities is in compliance
with the terms of all Permits, except for such non-compliance as would not
reasonably be expected to have a Material Adverse Effect. This Section 4.8 does
not relate to matters with respect to Taxes, which are the subject of
Section 4.9, environmental matters, which are the subject of Section 4.10, and
intellectual property, which is the subject of Section 4.12.

Section 4.9 Tax Matters. (i) Each of the Acquired Entities has timely filed, or
has caused to be timely filed on its behalf (taking into account any extension
of time within which to file), all material Tax returns required to be filed by
it and all material Taxes of the Acquired Entities shown to be due on such Tax
returns have been timely paid; (ii) no deficiency adjustment with respect to
Taxes has been proposed, asserted or assessed in writing against any of the
Acquired Entities, which has not been fully paid or adequately reserved in the
Financial Statements; and (iii) except as set forth in Section 4.9 of the
Disclosure Schedule, no audit or other administrative or court proceedings is
pending with any Governmental Authority with respect to Taxes of any of the
Acquired Entities and no written notice thereof has been received and there are
no pending or, to the Knowledge of the Seller, threatened actions or proceedings
for the assessment or collection of material Taxes against any of the Acquired
Entities. The Acquired Entities are not a party to any Tax indemnity agreement,
Tax allocation agreement, or Tax sharing agreement and have no liability with
respect to any such agreements. This Section 4.9 includes the sole and exclusive
representations and warranties of the Seller relating to Tax matters, including
compliance with Laws relating thereto.

Section 4.10 Environmental Matters. Except as would not reasonably be expected
to have a Material Adverse Effect, (a) to the Knowledge of the Seller, each of
the Acquired Entities is in compliance in all material respects with all
applicable Environmental Laws, (b) there is no investigation, suit, claim,
action or proceeding relating to or arising under Environmental Laws that is
pending or, to the Knowledge of the Seller, threatened against any of the
Acquired

 

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Entities, or any real property owned, operated or leased by Operaciones, and
(c) none of the Acquired Entities has received any written notice of or entered
into any order, settlement, judgment, injunction or decree involving
uncompleted, outstanding or unresolved obligations, liabilities or requirements
relating to or arising under Environmental Laws. No Acquired Entity has since
January 1, 2011 received from any written notice that it is not in compliance
with any Environmental Laws. The Seller has provided the Purchaser with true and
correct copies of all material environmental reports in the possession, custody
or control of the Seller or any of its Affiliates relating to the Real Property
and/or Structures, which reports are identified in Section 4.10 of the
Disclosure Schedule. This Section 4.10 constitutes the sole and exclusive
representation and warranty of the Seller regarding environmental matters,
including compliance with Laws relating thereto.

Section 4.11 Real Property.

(a) Section 4.11(a) of the Disclosure Schedule contains a list of all material
real property now owned by each of the Acquired Entities (collectively, the
“Owned Real Property”), other than easements, licenses and other rights of way
used in connection with transmission or distribution and related activities
including repair and maintenance.

(b) Except as set forth in Section 4.11(b) of the Disclosure Schedule, the
Acquired Entities do not (i) lease, (ii) sublease or (iii) have a right of use
over, any material real property (other than, for purpose of clause (iii) only,
the Owned Real Property).

(c) Except as set forth in Section 4.11(c) of the Disclosure Schedule, the
applicable Acquired Entities have good fee simple title to all Owned Real
Property in accordance with Guatemalan Law, free and clear of all Liens, except
Permitted Liens.

(d) All Structures are adequate and suitable for the purposes for which they are
presently being used and since January 1, 2012 have been maintained in the
ordinary course of business consistent with past practice.

Section 4.12 Intellectual Property.

(a) Each of the Acquired Entities own or have the right to use all
(i) trademarks, service marks, trade names, Internet domain names, and all
goodwill associated therewith and symbolized thereby, and registrations and
applications therefor, including renewals; (ii) inventions and discoveries,
whether patentable or not, and all patents, registrations, and applications
therefor, including divisions, continuations, continuations-in-part and
reissues; (iii) published and unpublished works of authorship, whether
copyrightable or not, including computer software programs, applications, source
code and object code, and databases and other compilations of information,
copyrights in and to the foregoing, including extensions, renewals, and
restorations, and registrations and applications therefor; and (iv) confidential
and/or proprietary information, trade secrets and know-how, including processes,
schematics, business

 

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methods, formulae, drawings, prototypes, models, designs, customer lists and
supplier lists ((i) through (iv) collectively being referred to as “IP Rights”)
that are used in the conduct of the business of the Acquired Entities as
currently conducted, except for any such failures to own or have the right to
use that would not reasonably be expected to have a Material Adverse Effect.

(b) Except as set forth on Section 4.12(b) of the Disclosure Schedule or as
would not reasonably be expected to have a Material Adverse Effect:

(i) the Seller has no Knowledge of any existing claims made within the last two
(2) years, (A) that the conduct of the business of any of the Acquired Entities
as currently conducted infringes or otherwise violates any IP Rights of any
Person; (B) against the use by any of the Acquired Entities of any IP Right used
in the business of any of the Acquired Entities as currently conducted;
(C) challenging the ownership, validity or enforceability of any of the IP
Rights owned by any of the Acquired Entities, or any IP Rights owned or held by
third parties exclusively licensed to any of the Acquired Entities (the
“Third-Party IP Rights”); or (D) challenging the right to use of any Third-Party
IP Rights held by any of the Acquired Entities;

(ii) to the Knowledge of the Seller, there is no unauthorized use, infringement
or other violation of any of the IP Rights, or any Third-Party IP Rights held
exclusively by any of the Acquired Entities, by any Person; and

(iii) to the Knowledge of the Seller, all IP Rights and material Third-Party IP
Rights held exclusively by Operaciones are valid and enforceable and Services
and Tasajero do not hold any, and have not during the preceding two (2) years
held, IP Rights and material Third Party IP Rights.

(c) This Section 4.12 constitutes the sole and exclusive representation and
warranty of the Seller regarding Intellectual Property, including compliance
with Laws relating thereto.

Section 4.13 Contracts.

(a) Section 4.13(a) of the Disclosure Schedule sets forth a list of all of the
following executory written Contracts to which Operaciones is a party and which
are in effect on the date hereof:

(i) loan agreements, credit agreements, security agreements, promissory notes,
mortgages, indentures and other Contracts which provide for the borrowing of
moneys by or extensions of credit to Operaciones or the

 

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guaranty by Operaciones of obligations in respect of the borrowings of moneys by
or extensions of credit to any other Person, in any case involving in excess of
U.S.$50,000 of indebtedness or committed credit;

(ii) employment Contracts (other than collective bargaining agreements) which
expressly provide for the payment of base salary to any employee of Operaciones
of more than U.S.$40,000 annually, except those that may be cancelled by
Operaciones without material penalty or further expenditure upon not more than
180 days’ notice;

(iii) except for (i) Retention and General Release Agreements and (ii) Severance
Agreements set forth in Section 6.2(d) of the Disclosure Schedules, any
Contracts providing for the payment of sums, individually or in the aggregate,
in excess of U.S.$50,000 upon or following any change of control or ownership of
any of Operaciones;

(iv) power purchase agreements which expressly provide for aggregate annual
payments to or from Operaciones of more than U.S.$50,000, except those that may
be cancelled by Operaciones without material penalty upon not more than 180
days’ notice;

(v) commodity supply and transportation agreements which expressly provide for
aggregate annual payments to or from Operaciones of more than U.S.$50,000,
except those that may be cancelled by Operaciones without material penalty upon
not more than 180 days’ notice;

(vi) contracts with a Governmental Authority (other than ordinary course
Contracts with Governmental Authorities as a customer) which expressly provide
for aggregate annual payments to or from Operaciones of more than U.S.$50,000,
except those that may be cancelled by Operaciones without material penalty upon
not more than 180 days’ notice;

(vii) except for open market sales of energy or capacity with a term of less
than ninety (90) days in the ordinary course of business, any power purchase
agreements, electricity transmission agreements and electricity interconnection
agreements with a remaining term in excess of ninety (90) days;

(viii) any swap, exchange, commodity option or hedging agreements with a
remaining term in excess of ninety (90) days;

 

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(ix) any operating and maintenance agreement, spare parts agreement, project
management agreement or administrative services agreement requiring payments by
Operaciones in excess of U.S.$50,000 in any calendar year;

(x) any contract requiring a capital or operating expenditure by Operaciones in
excess of U.S.$40,000 in any calendar year;

(xi) any agreement between Operaciones and the Seller or an Affiliate thereof in
excess of U.S.$75,000, except those that may be cancelled by Operaciones without
material penalty upon not more than sixty (60) days’ notice;

(xii) any material partnership or joint venture agreement;

(xiii) other Contracts (other than (A) those of a type described in clauses
(i) through (xii) above, without giving effect to the minimum dollar or term
thresholds set forth therein and (B) contracts entered into in the ordinary
course of business) which expressly provide for aggregate annual payments to or
from Operaciones of more than U.S.$80,000, except those that may be cancelled by
Operaciones without material penalty upon not more than 180 days’ notice; and

(xiv) any amendments to any of the foregoing.

All Contracts required to be set forth on Section 4.13(a) of the Disclosure
Schedule are referred to herein as “Material Contracts”.

(b) All Material Contracts are legal, valid, binding and enforceable in
accordance with their respective terms with respect to Operaciones and, to the
Knowledge of the Seller, each other party to the Material Contracts. There is no
existing material default or breach by Operaciones under any Material Contract
and, to the Knowledge of the Seller, there is no such default or breach with
respect to any third party to any Material Contract, except for any such default
or breach as would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

(c) Neither Services nor Tasajero are a party to any Contracts, nor has either
been a party thereto within the preceding two (2) years or incurred any
liability thereunder.

Section 4.14 Insurance. Section 4.14 of the Disclosure Schedule sets forth a
list of all material current policies of insurance in force as of the date
hereof covering Operaciones including the period of coverage of such policies.
Services and Tasajero do not maintain any policies of insurance in force as of
the date hereof. To the Knowledge of the Seller: (a) all

 

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premiums due and payable thereon have been paid, (b) there have been no
threatened terminations of, or material premium increases with respect to, any
such policies and (c) except as set forth in Section 4.14 of the Disclosure
Schedule, no such policy is terminable by reason of the change in control or
ownership of the Acquired Entities. The insurance policies listed in
Section 4.14 of the Disclosure Schedule include all policies of insurance that
are required by Contracts or applicable Laws, in the amounts required under such
Contracts or applicable Laws.

Section 4.15 Employees.

(a) Except as set forth in Section 4.15(a) of the Disclosure Schedule, no
Acquired Entity is a party to any collective bargaining agreement in effect
relating to its employees.

(b) On the date hereof, there is no labor strike or work stoppage pending or, to
the Knowledge of the Seller, threatened against Operaciones which, individually
or in the aggregate, would reasonably be expected to have a Material Adverse
Effect.

(c) Section 4.15(c) of the Disclosure Schedule sets forth each material pension,
retirement, savings, profit sharing, deferred compensation, stock bonus or other
similar plan; each material medical, vision, dental or other health plan; each
material life insurance plan; and any other material employee benefit plan, in
each case, to which any of the Acquired Entities is required to contribute, or
which any of the Acquired Entities sponsors for the benefit of any of their
employees, or under which employees (or their beneficiaries) of any of the
Acquired Entities (in their capacities as such) are eligible to receive benefits
(each, a “Plan” and collectively, the “Plans”).

Section 4.16 Personal Property. Except as set forth in Section 4.16 of the
Disclosure Schedule, for real property which is the subject of Section 4.11 and
for intangible assets which are the subject of Section 4.12, Operaciones has
good title to (free and clear of all Liens other than Permitted Liens), or a
valid leasehold interest in, all personal properties and assets that are
material to the business and operations of Operaciones.

Section 4.17 Brokers. None of the Acquired Entities has entered into any
contract or other arrangement or understanding (written or oral, express or
implied) with any Person which may result in the obligation of the Purchaser,
any of its Affiliates or any Acquired Entity to pay any fees or commissions to
any broker or finder as a result of the execution and delivery of this Agreement
or the consummation of the Transactions.

Section 4.18 Assets Used in Business. Except as set forth on Section 4.18 of the
Disclosure Schedule, Operaciones own or has the right to use all assets and
properties of every kind, nature, character and description, whether real or
personal, tangible or intangible, necessary for Operaciones to conduct its
business consistent with its past practices and operations as reflected in the
Financial Statements (Operaciones). All such assets are adequate and suitable
for the purposes for which they are presently being used, and have been
maintained in the ordinary

 

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course of business consistent with past practice. Section 4.18 of the Disclosure
Schedule sets forth a list of the assets as of August 31, 2012 for Operaciones
derived from and in accordance with the accounting books and records of
Operaciones. Operaciones owns or leases all of the assets set forth on such
list.

Section 4.19 Bank Accounts; Powers of Attorney. Section 4.19 of the Disclosure
Schedule sets forth an accurate and complete list of the names and locations of
all banks, trust companies, and other financial institutions at which
Operaciones maintains accounts of any nature or safe deposit boxes, and the
names of all persons or entities authorized to draw thereon, make withdrawals
therefrom or have access thereto, and the names of all persons or entities
holding general or specific powers of attorney from each Acquired Entity. The
Seller has made available to the Purchaser true and correct copies of each such
power of attorney. The Acquired Entities (other than Operaciones) do not have or
maintain any accounts of any nature or safe deposit boxes with financial
institutions.

Section 4.20 Bankruptcy. No Acquired Entity is in bankruptcy, liquidation or
receivership (and no order or resolution therefore has been presented and no
notice of appointment of any liquidator, receiver, administrative receiver or
administrator has been given), nor is there any valid grounds or circumstances
on the basis of which any such procedure may be requested on a voluntary or
involuntary basis.

Section 4.21 Books and Records. The books and records of the Acquired Entities
have been maintained in accordance with sound business practices and accurately
reflect the activities of Operaciones in all material respects. At the Closing,
all such books and records will be in the possession of the Acquired Entities.

Section 4.22 Transactions with Affiliates. Except as set forth under
Section 4.22 of the Disclosure Schedule, none of the Seller or its Affiliates
and no director or officer of the Seller or its Affiliates is involved in any
material business arrangement or relationship with any of the Acquired Entities.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser represents and warrants to the Seller that:

Section 5.1 Corporate Existence; Standing; Bankruptcy; Solvency.

(a) The Purchaser is an International Business Company, duly organized, validly
existing and in good standing (or equivalent status) under the Laws of the
Commonwealth of the Bahamas.

 

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(b) The Purchaser has the requisite power and authority to enter into and
perform this Agreement.

(c) The Purchaser is neither in bankruptcy, liquidation or receivership (and no
order or resolution therefore has been presented and no notice of appointment of
any liquidator, receiver, administrative receiver or administrator has been
given), nor is there any valid grounds or circumstances on the basis of which
any such procedure may be requested on a voluntary or involuntary basis.

(d) Immediately after the Closing and after giving effect to the Transactions,
the payment of the Purchase Price, the receipt of the Acquired Company Interests
and the payment of all fees and expenses related to the Transactions: (i) the
fair saleable value of the assets of the Purchaser will exceed the liabilities
of the Purchaser; (ii) the Purchaser will not have an unreasonably small amount
of capital for the operation of its business; and (iii) the Purchaser will be
able to pay its liabilities as they mature. In consummating such transactions,
the Purchaser does not intend to disturb, delay, hinder or defraud either
present or future creditors or other persons to which it is or will become, on
or after the date hereof, indebted.

Section 5.2 Authorization. The Purchaser has full legal power and authority to
execute and deliver this Agreement and all documents required to be executed by
the Purchaser, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement by the Purchaser and the consummation
by the Purchaser of the Transactions have been, and, in the case of documents to
be executed and delivered at the Closing, will have been duly authorized by all
necessary action on the part of the Purchaser, and no other action on the part
of the Purchaser is necessary to authorize this Agreement or the consummation of
the Transactions. This Agreement and all documents required hereunder to be
executed by the Purchaser have been, and, in the case of documents to be
executed and delivered at the Closing, will have been immediately prior to
Closing, duly executed and delivered by the Purchaser and, assuming due
authorization, execution and delivery by the other parties thereto, this
Agreement and all documents required hereunder to be executed by the Purchaser
constitute and will constitute, in the case of documents to be executed and
delivered at the Closing, the legally valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
subject to the Bankruptcy and Equity Exception.

Section 5.3 Noncontravention. Neither the execution and delivery by the
Purchaser of this Agreement, nor consummation by the Purchaser of the
Transactions, will (i) conflict with or violate any provisions of the articles
of incorporation, bylaws or other constitutive or corporate documents of the
Purchaser, (ii) violate, conflict with, result in a breach of or constitute a
default under any of the terms, conditions or provisions of any Contract to
which the Purchaser is a party; or (iii) violate, conflict with or result in a
breach of any Law, judgment, writ or injunction of any Governmental Authority
applicable to the Purchaser, except, in the case of clauses (ii) and (iii), for
such violations, breaches or defaults which would not impair in any

 

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material respect the ability of the Purchaser to perform its obligations
hereunder or prevent or materially delay consummation of the Transactions.

Section 5.4 Governmental Approvals. Except as set forth in Section 5.4 of the
Disclosure Schedule, there are no consents or approvals of, or filings,
declarations or registrations with, any Governmental Authority that are
necessary for the execution and delivery of this Agreement by the Purchaser or
performance of this Agreement and consummation of the Transactions by the
Purchaser, other than such consents, approvals, filings, declarations or
registrations that, if not obtained, made or given, would not impair in any
material respect the ability of the Purchaser to perform its obligations
hereunder or prevent or materially delay consummation of the Transactions.

Section 5.5 Capital Resources. The Purchaser has available to it, and will have
available to it at the Closing, sufficient funds to pay the Purchase Price, to
pay all related fees and expenses payable by the Purchaser in connection with
the Transactions and to consummate the other transactions contemplated by this
Agreement to be consummated by the Purchaser, all as evidenced by valid and
executed commitment letters issued by recognized local Guatemalan or
international financial institutions (the “Commitment Letters”). True and
complete copies of such Commitment Letters in form and substance reasonably
acceptable to the Seller have been provided to the Seller.

Section 5.6 Legal Proceedings. There are no suits, actions, claims, proceedings
or investigations pending or, to the knowledge of the Purchaser, threatened
against, relating to or involving the Purchaser that would reasonably be
expected to impair in any material respect the ability of the Purchaser to
perform its obligations hereunder or prevent or materially delay the
consummation of the Transactions.

Section 5.7 Brokers. None of the Purchaser or its Affiliates has entered into
any Contract or other arrangement or understanding (written or oral, express or
implied) with any Person which may result in the obligation of the Seller, the
Acquired Entities, or any of their Affiliates to pay any fees or commissions to
any broker or finder as a result of the execution and delivery of this Agreement
or the consummation of the Transactions.

Section 5.8 Purchase for Investment. The Purchaser is acquiring the Acquired
Company Interests for its own account, not as a nominee or agent, for investment
and not with a view toward any resale or distribution of any part thereof and
the Purchaser has no present intention of selling, granting any participation
in, or otherwise distributing the Acquired Company Interests. The Purchaser
further represents that it does not presently have any contract, undertaking,
agreement or arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect to any of the
Acquired Company Interests.

 

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Section 5.9 Purchaser’s Independent Investigation. The Purchaser and its
representatives have undertaken an independent investigation and verification of
the business, operations and financial condition of the Acquired Entities. The
Purchaser acknowledges that:

(a) the Purchaser has been afforded access to and the opportunity to inspect the
Acquired Entities, the business of the Acquired Entities and all other due
diligence materials; and

(b) the Purchaser has inspected the business of the Acquired Entities and all
other due diligence materials (including any documentation provided by the
Seller or its Affiliates in connection with the Transactions), in each case to
the extent the Purchaser deems necessary or advisable in connection with its
decision to enter into this Agreement and to consummate the Transactions.

ARTICLE VI

COVENANTS AND AGREEMENTS

Section 6.1 Conduct of Business.

(a) Except as contemplated or permitted by this Agreement, Section 6.1 of the
Disclosure Schedule or as required by applicable Law, during the period from the
date of this Agreement until the Closing, unless the Purchaser otherwise
consents (which consent shall not be unreasonably withheld, conditioned or
delayed), the Seller shall use commercially reasonable efforts to cause the
Acquired Entities to conduct the business of the Acquired Entities in all
material respects in the ordinary course consistent with past practice.

(b) Without limiting the generality of the foregoing, except as contemplated or
permitted by this Agreement, Section 6.1 of the Disclosure Schedule or as
required by applicable Law, during the period from the date of this Agreement
until the Closing, unless the Purchaser otherwise consents (which consent shall
not be unreasonably withheld, conditioned or delayed), the Seller shall use
commercially reasonable efforts to cause the Acquired Entities not to:

(i) (A) issue, sell or grant any of its equity interests, or any securities or
rights convertible into, exchangeable or exercisable for, or evidencing the
right to subscribe for any of its equity interests, or any rights, warrants or
options to purchase any of its equity interests; (B) redeem, purchase or
otherwise acquire any of its equity interests, or any rights, warrants or
options to acquire any of its equity interests; (C) declare, set aside for
payment or pay any dividend on, or make any other distribution in respect of,
any of its equity interests; or (D) split, combine, subdivide or reclassify any
of its equity interests;

 

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(ii) amend its certificate of incorporation, bylaws or analogous charter
documents;

(iii) (a) adopt or effect a plan or agreement of complete or partial liquidation
or dissolution or effect any merger into or with any other Person, consolidation
with any other Person or acquisition of all or any substantial part of the
business or assets of any Person;

(iv) sell, pledge, transfer, dispose of or encumber or suffer or permit to exist
any Lien (other than Permitted Liens) on any of their material properties or
assets except (x) pursuant to Contracts in force on the date of this Agreement
or entered into after the date of this Agreement in compliance with the
provisions of this Agreement, or (y) transfers among the Acquired Entities;

(v) make any material change in accounting policies or practices (including any
change in depreciation or amortization policies), except in each case as
required under Guatemalan GAAP or in the ordinary course of business and
consistent with past practice;

(vi) change any business policies, including advertising, investment, marketing,
pricing, purchasing, production, personnel, sales, returns, budget or product
acquisition policies, which in each case would result in any amount in excess of
U.S.$100,000, in aggregate, that would have been payable by such Acquired Entity
prior to the Closing prior to such change of business policy is deferred until
after the Closing;

(vii) incur any indebtedness for borrowed money in excess of U.S.$250,000;

(viii) except in the ordinary course of business and consistent with past
practice, (w) make any material Tax election, change any Tax accounting method
or settle or compromise any material Tax liability, (x) assign, terminate or
amend, in any material respect, any Material Contract or material Permit,
(y) execute or effect any material waiver or consent with respect to any
Material Contract or material Permit, or (z) enter into any Contract that, if
entered into on or prior to the date hereof, would be required to be listed in
Section 4.13(a) of the Disclosure Schedule;

(ix) except as required to comply with (x) applicable Law or (y) agreements,
plans or arrangements existing on the date of this Agreement and listed on the
Disclosures Schedules, (A) take any action with respect to, adopt, enter into,
terminate or amend any employee benefit plan

 

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or any collective bargaining agreement, (B) increase the compensation or
benefits of, or pay or promise any bonus to, any director, officer, employee or
consultant or materially modify their terms of employment or engagement,
(C) amend or accelerate the payment, right to payment or vesting of any
compensation or benefits, including any outstanding equity compensation, (D) pay
any bonus or other benefit to its directors, officers or employees or hire any
new officers or (except in the ordinary course of business and consistent with
past practice) any new employees, (E) grant any awards under any bonus,
incentive, performance or other compensation plan or arrangement or benefit
plan, or (F) take any action to fund or in any other way secure the payment of
compensation or benefits under any employee plan, agreement, contract or
arrangement or benefit plan;

(x) except for (i) Retention and General Release Agreements, and (ii) Severance
Agreements set forth in Section 6.2(d) of the Disclosure Schedules, enter into
any Contracts providing for the payment of sums, individually or in the
aggregate, in excess of U.S.$100,000 upon or following any change of control or
ownership of any of the Acquired Entities;

(xi) assign, terminate or amend any policies of insurance set forth on
Section 4.14 of the Disclosure Schedule;

(xii) make any payment in connection with any agreements set forth on
Section 4.22 of the Disclosure Schedule; or

(xiii) enter into any Contract, commitment or arrangement to do, or take, or
agree to take any of the foregoing actions.

(c) In addition, the Seller agrees that, during the period from the date of this
Agreement until the Closing Date, the Seller shall not and shall not permit any
of its Affiliates to, take, or agree or commit to take, any action that could
reasonably be expected to (a) impose any material delay in the obtaining of, or
significantly increase the risk of not obtaining, any authorizations, consents,
orders, declarations or approvals of any Governmental Authority necessary to
consummate the Transactions or the expiration or termination of any applicable
waiting period, (b) significantly increase the risk of any Governmental
Authority entering an order or restraint prohibiting or impeding the
consummation of the Transactions or (c) otherwise materially delay the
consummation of the Transactions

(d) The Purchaser agrees that, during the period from the date of this Agreement
until the Closing Date, the Purchaser shall not and shall not permit any of its
Affiliates to, take, or agree or commit to take, any action that could
reasonably be expected to (a) impose any material delay in the obtaining of, or
significantly increase the risk of not obtaining, any

 

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authorizations, consents, orders, declarations or approvals of any Governmental
Authority necessary to consummate the Transactions or the expiration or
termination of any applicable waiting period, (b) significantly increase the
risk of any Governmental Authority entering an order or restraint prohibiting or
impeding the consummation of the Transactions or (c) otherwise materially delay
the consummation of the Transactions.

Section 6.2 Employment Matters

(a) During the one (1) year period following the Closing, the Purchaser or its
Affiliates shall, or shall cause the Acquired Entities to, provide to the
employees of the Acquired Entities who are employed at the Closing (“Company
Employees”) and who remain employed with the Purchaser or any Affiliate of the
Purchaser for so long as the Company Employee remains so employed, compensation
and employee benefits that, with respect to each employee, are substantially
similar in the aggregate to the compensation and benefits provided to such
employee under the Plans (without regard to qualified or non-qualified defined
benefit plans, or retiree medical or retiree life insurance benefits) as of the
date hereof. The Purchaser or its Affiliates shall, or shall cause the Acquired
Entities to, perform all of their respective obligations under the Plans as in
effect on the date hereof or as may thereafter be amended in accordance with the
terms thereof.

(b) The Purchaser or its Affiliates shall, or shall cause the Acquired Entities
to, provide each Company Employee (other than Company Employees that are
executing an Employment Agreement concurrently with the execution of this
Agreement) who incurs a termination of employment during the one (1) year period
following the Closing with severance payments and severance benefits that are no
less favorable than those to which such Company Employee would have been
entitled under the pay policy applicable to employees of the applicable Acquired
Entity as in effect on the date hereof, based upon the default or recommended
level of benefits thereunder. Without limiting the generality of the foregoing,
the Purchaser agrees that it will use the Severance Reserve solely for the
payment of severance benefits to the Company Employees.

(c) The provisions of this Section 6.2 are solely for the benefit of the parties
to this Agreement, and no employee or former employee of the Acquired Entities
or any other individual associated therewith shall be regarded for any purpose
as a third party beneficiary of this Agreement, and nothing herein shall be
construed as an amendment to any Plan for any purpose. The parties acknowledge
and agree that nothing contained in this Agreement, including in this
Section 6.2 shall require the Purchaser or any Affiliate thereof (including,
after the Closing Date, the Acquired Entities) to maintain the employment of any
employee of the Acquired Entities.

(d) The Seller hereby agrees to be responsible for and at the Closing, shall (or
shall cause an Affiliate to) make each payment pursuant to the Retention and
General Release Agreements set forth in Section 6.2(d) of the Disclosure
Schedules on the date such payment is

 

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required to be paid pursuant to the terms thereof and shall pay or cause to be
paid to any Governmental Authority all Taxes required to be withheld or paid by
any of the Acquired Entities to any Governmental Authority in respect thereof.
The Purchaser hereby agrees to be responsible for and shall make each payment
pursuant to the Severance Agreements set forth in Section 6.2(d) of the
Disclosure Schedules on the date such payment is required to be paid pursuant to
the terms thereof, including any such payments that are required to be paid on
the Closing Date and shall pay or cause to be paid to any Governmental Authority
all Taxes required to be withheld or paid by any of the Acquired Entities to any
Governmental Authority in respect thereof.

(e) The Seller acknowledges and confirms that the Purchaser and the Acquired
Entities shall not be responsible for any payments that are required to be made
pursuant to the any sales price retention incentive agreements with Company
Employees

Section 6.3 Commercially Reasonable Efforts.

(a) Subject to the terms and conditions of this Agreement, each party hereto
shall cooperate with the other party and use its respective commercially
reasonable efforts to promptly (i) take, or cause to be taken, all actions and
do, or cause to be done, all things, necessary, proper or advisable to cause the
conditions to Closing to be satisfied as promptly as practicable and to
consummate and make effective, in the most expeditious manner practicable, the
Transactions, including preparing and filing promptly and fully all
documentation to effect all necessary filings, notices, petitions, statements,
registrations, submissions of information, applications and other documents
(including, to the extent determined necessary, any filings under applicable
Antitrust Laws) and (ii) obtain all approvals, consents, registrations, permits,
authorizations and other confirmations from any Governmental Authority or third
party necessary, proper or advisable to consummate the Transactions. For
purposes hereof, “Antitrust Laws” means the applicable Laws issued by a
Governmental Authority that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization or restraint of
trade or lessening of competition through merger or acquisition.

(b) Each party hereto shall use its commercially reasonable efforts to (i)
cooperate in all respects with each other in connection with any filing or
submission with a Governmental Authority in connection with the Transactions and
in connection with any investigation or other inquiry by or before a
Governmental Authority relating to the Transactions, including any proceeding
initiated by a private party and (ii) keep the other party informed in all
material respects and on a reasonably timely basis of any material communication
received by such party from, or given by such party to any Governmental
Authority and of any material communication received or given in connection with
any proceeding by a private party, in each case regarding any of the
Transactions. Subject to applicable Laws relating to the exchange of
information, each party hereto shall have the right to review in advance and to
the extent practicable each will consult the other party on, all the information
relating to the other party and its Affiliates, as the case may be, that appears
in any filing made with, or written materials submitted to, any third

 

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party and/or any Governmental Authority in connection with the Transactions.
Each party shall have the right to attend conferences and meetings between
another party and regulators concerning the Transactions. In this regard, the
party requesting any such conference or meeting with a regulator shall, to the
extent practicable, notify the other party at least three (3) Business Days in
advance of such conference or meeting.

(c) In furtherance and not in limitation of the covenants of the parties
contained in this Section 6.3, each party hereto shall use its commercially
reasonable efforts to resolve such objections, if any, as may be asserted by a
Governmental Authority or other Person with respect to the Transactions. Without
limiting any other provision hereof, each party shall use its commercially
reasonable efforts to (i) avoid the entry of, or to have vacated or terminated,
any decree, order or judgment that would restrain, prevent or delay the
consummation of the Transactions, on or before the Walk-Away Date, provided,
however, that such party shall not be required to defend through litigation any
claim asserted by any Person and (ii) avoid or eliminate each and every
impediment under any Antitrust Law that may be asserted by any Governmental
Authority with respect to the Transactions so as to enable the consummation of
the Transactions to occur as soon as reasonably possible (and in any event no
later than the Walk-Away Date).

(d) Notwithstanding anything to the contrary contained in this Agreement,
commercially reasonable efforts shall not require the party undertaking such
efforts to pay any form of compensation or other consideration or create an
obligation to enter into or modify any form of relationship, arrangement or
agreement with any third party.

Section 6.4 Public Announcements. The Seller and the Purchaser shall each be
entitled to issue an initial press release with respect to this Agreement and
the Transactions (a copy of which shall be shared with the other party and each
party shall allow the other party reasonable time to comment on such release in
advance of its announcement). Each party acknowledges and agrees that each
party’s initial press release shall be released on the same day and during the
same time period. Thereafter, each party may make (i) any public statements
regarding this Agreement or the Transactions as may be required by Law or by any
applicable listing agreement with a national securities exchange or national
market system as determined in the good faith judgment of the party proposing to
make such statement or (ii) public statements with respect to this Agreement and
the Transactions, whether oral or written, in connection with shareholder
reports, earnings announcements or communications with stock market analysts;
provided, however that such statements are consistent with the information
contained in the initial press releases or the statements made in accordance
with clause (i) of this sentence.

Section 6.5 Access to Information; Periodic Reports; Confidentiality.

(a) Upon reasonable request and written notice, subject to applicable Laws
relating to the exchange of information, the Seller shall use commercially
reasonable efforts to cause the Acquired Entities to afford to the Purchaser and
the Purchaser’s representatives reasonable access during normal business hours
to the Acquired Entities’ books, Contracts and

 

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records and the Seller shall use commercially reasonable efforts to cause the
Acquired Entities to furnish promptly to the Purchaser such information
concerning its business and properties as the Purchaser may reasonably request;
provided, however, that such access shall not unreasonably interfere with the
business or operations of any of the Seller or any Acquired Entity; provided,
further, that the Seller shall not be obligated to cause the Acquired Entities
to provide such access or information if the Seller determines, in its
reasonable judgment, that doing so would (i) cause significant competitive harm
to the Seller, any Acquired Entity, or their respective businesses if the
transactions contemplated by this Agreement are not consummated, (ii) violate
applicable Law or a Contract or obligation of confidentiality owing to a
third-party or (iii) jeopardize the protection of an attorney-client privilege.
Until the Closing, the information provided will be subject to the terms of the
Confidentiality Agreement.

(b) No later than fifteen (15) days following the end of each calendar month
prior to the Closing, the Seller shall provide to the Purchaser (i) the
unaudited consolidated balance sheet of the Acquired Entities as of the end of
the most recently completed calendar month and the related unaudited
consolidated statements of income and retained earnings and cash flows for the
period from the beginning of the then-current fiscal year until the end of such
month, and (ii) an operations and maintenance report relating to the Acquired
Entities.

(c) Reserved

(d) The Purchaser acknowledges that the confidential information provided to it
by the Seller or the Acquired Entities prior to the Closing in connection with
this Agreement and the terms hereof, to the extent it relates to the Seller (but
not the Acquired Entities, if the Closing occurs), shall be deemed confidential
information and shall be used by the Purchaser only in connection with the
Transactions and for no other purpose.

(e) The Purchaser shall cause the Acquired Entities to reasonably cooperate with
the Seller and its Affiliates (at the sole cost and expense of the Seller and
its Affiliates) and their counsel in connection with the CAFTA Claim, which
cooperation will include, but not be limited to, the following: (A) if requested
by the Seller or its Affiliates, the Purchaser will cause officers, directors,
and employees of the Acquired Entities to (i) appear for a reasonable number of
interviews, at reasonable times and locations, and (ii) answer questions
concerning such CAFTA Claim or concerning their work for the Acquired Entities,
(B) the Purchaser will cause the Acquired Entities to produce their
non-privileged books, records, returns, documents, files, other information on
file prior to Closing (including working papers and schedules) relating to such
CAFTA Claim within the Acquired Entities’ custody and control, which it is
reasonably requested to produce by the Seller or its Affiliates, and (C) upon
reasonable notice from the Seller or its Affiliates, the Purchaser shall
instruct the officers, directors and employees of the Acquired Entities to
(i) appear for a reasonable number of hearings, depositions and at trial or
arbitral proceeding (including as witnesses) related to any such CAFTA Claim,
and (ii) meet with the representatives of the Seller and its Affiliates to
assist in preparation for such depositions and trials.

 

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Section 6.6 Preservation of Records; Post-Closing Cooperation.

(a) The Purchaser agrees that it shall preserve and keep any books, records and
other documents relating to the businesses of the Acquired Entities for a period
of six (6) years from the Closing Date and shall make such records available for
inspection and copying to the Seller as may be reasonably required. No such
books, records or documents shall be destroyed by the Purchaser without first
advising the Seller in writing and giving the Seller a reasonable opportunity to
obtain possession thereof.

(b) After the Closing, each party shall furnish, or cause to be furnished, to
the other party reasonable access during normal business hours to such
information and employees as may be reasonably required by such party and
relating to the Acquired Entities in connection with, among other things,
(i) financial reporting, accounting and Tax matters, (ii) any insurance claims
by, suits, actions, claims, or proceedings against or investigations of, any
party or (iii) in order to enable any party to comply with its obligations under
this Agreement or any other agreement, document or instrument contemplated
hereby. No party shall be required by this Section 6.6(b) to take any action
that would unreasonably interfere with the conduct of its business or
unreasonably disrupt its normal operations or be reasonably expected to violate
any attorney-client privilege of a party or its Affiliates or violate any
applicable Law.

Section 6.7 Fees and Expenses. Except as otherwise expressly provided herein,
(a) the Purchaser shall pay its own fees, costs and expenses incurred in
connection herewith and the Transactions and (b) the Seller shall pay its own
fees, costs and expenses incurred in connection herewith and the Transactions.

Section 6.8 Directors and Officers.

(a) Immediately following the Closing, the Purchaser shall take all such action
as shall be required to release resigning directors and officers of the Acquired
Entities from liability in connection with their service as directors and
officers of the Acquired Entities. For such purpose, the Purchaser shall take
all necessary actions to carry out an equity holder’s meeting for each Acquired
Entity immediately after the Closing, in which the equity holders of each
Acquired Entity shall accept the resignation of each such director and officer,
effective as of the date of issuance of each resignation letter, and grant the
release pursuant to this Section 6.8. The Purchaser shall take all necessary
actions to provide each resigning director and officer of the Acquired Entities
with the appropriate document that evidences such release. The Seller shall use
commercially reasonable efforts to cause each resigning director and officer of
the Acquired Entities to release the Purchaser and its Affiliates from any and
all liability to such resigning Person in connection with their service as
directors and officers of the Acquired Entities. The Seller shall use
commercially reasonable efforts to cause each such resigning director and
officer of the Acquired Entities to provide to the Purchaser and its Affiliates
with a release of any and all liability to such resigning Person except as
specifically provided by this Agreement.

 

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(b) From, and for a period of six (6) years following, the Closing Date, the
Purchaser shall, or shall cause each Acquired Entity to, indemnify and hold
harmless each present and former director and officer of each Acquired Entity
(each, a “Indemnified Director”, collectively, the “Indemnified Directors”), who
was or is a party or is threatened to be made a party to any claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, by reason of the fact that such Indemnified Director is or was a
director, officer, employee or agent of such Acquired Entity, against any and
all costs or expenses (including, without limitation, travel expenses and
reasonable attorneys’ fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in defense or settlement or otherwise arising out
of or pertaining to any facts or events existing or occurring at or prior to the
Closing Date to the extent permitted as of the date hereof by applicable Law and
by the Company Charter Documents of such Acquired Entity, as applicable. The
Purchaser shall, or shall cause each Acquired Entity to, advance expenses to an
Indemnified Director, as incurred, to the extent such advances are permitted as
of the date hereof by applicable Law and by the Company Charter Documents of
such Acquired Entity; provided, that the Indemnified Director to whom expenses
are advanced provides an undertaking to repay such advances if it is ultimately
determined that such Indemnified Director is not entitled to indemnification. In
the event of any such claim, action, suit, proceeding or investigation (whether
arising before or after the Closing Date), (i) the Indemnified Directors shall
promptly notify the Purchaser and the applicable Acquired Entity thereof,
(ii) any counsel retained by the Indemnified Director for any period after the
Closing Date shall be subject to the consent of the Purchaser and the applicable
Acquired Entity (which consent shall not be unreasonably withheld, conditioned
or delayed), (iii) none of the Purchaser and the applicable Acquired Entity
shall be obligated to pay for more than one firm of counsel for all Indemnified
Directors, except to the extent that (A) an Indemnified Director has been
advised by counsel that there are conflicting interests between it and any other
Indemnified Director, or (B) local counsel, in addition to such other counsel,
is required to effectively defend against such action or proceedings, and
(iv) none of the Purchaser and the applicable Acquired Entity shall be liable
for any settlement effected without its written consent (which consent shall not
be unreasonably withheld, conditioned or delayed). The Purchaser and the
applicable Acquired Entity shall not have any obligation hereunder to any
Indemnified Director when and if a court of competent jurisdiction shall
ultimately determine (and such determination shall have become final and
non-appealable) that the indemnification of such Indemnified Director in the
manner contemplated hereby is prohibited by applicable Law.

(c) If the Purchaser or any Acquired Entity or any of their successors or
assigns (i) shall merge or consolidate with or merge into any other corporation
or entity and shall not be the surviving or continuing entity of such
consolidation or merger, or (ii) shall transfer all or substantially all of
their respective properties and assets to any individual, corporation or other
entity, then in each such case, proper provisions shall be made so that the
successors or assigns of the Purchaser or such Acquired Entity shall assume all
of the obligations set forth in this Section 6.8.

 

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Section 6.9 Related-Party Transactions. On or prior to the Closing Date, the
Seller and the Acquired Entities shall terminate, with no further liability to
any of the Acquired Entities, all contracts between any Acquired Entity and the
Seller or its Affiliates (other than those contracts set forth on Schedule 6.9
of the Disclosure Schedule).

Section 6.10 TECO Marks. TECO Marks will appear on some of the assets of the
Acquired Entities, including on signage at the facilities of the Acquired
Entities, and on supplies, materials, stationery, brochures, advertising
materials, manuals and similar consumable items of the Acquired Entities. The
Purchaser shall, (i) within sixty (60) days after the Closing Date, remove,
cover or conceal the TECO Marks from the assets of the Acquired Entities,
including signage at the facilities of the Acquired Entities, and provide
written verification thereof to the Seller promptly after completing such
removal and (ii) within thirty (30) days after the Closing Date, return or
destroy (with proof of destruction) all other assets of the Acquired Entities
that contain any TECO Marks that are not removed, covered or concealed;
provided, however, that the Purchaser shall be authorized to continue to use for
internal purposes only and not for public use, materials bearing such TECO Marks
(including manuals) used by the Seller and the Acquired Entities prior to the
Closing for up to two (2) months following the Closing. Notwithstanding the
foregoing, use of the TECO Marks shall remain under the control of the Seller
and all goodwill associated with the TECO Marks shall remain with the Seller.
Subject to the terms of the preceding sentences, the Purchaser acknowledges and
agrees that it has and, upon consummation of the Transactions contemplated
hereby shall have, no right, title, interest, license, or any other right
whatsoever to use the TECO Marks. The Purchaser agrees never to challenge the
Seller’s (or its Affiliates’) ownership of the TECO Marks or any application for
registration thereof or any registration thereof or any rights of the Seller or
its Affiliates therein as a result, directly or indirectly, of their ownership
of the Acquired Entities. The Purchaser will not conduct any business nor offer
any goods or services under any TECO Marks. The Purchaser will not send, or
cause to be sent, any correspondence or other materials to any Person on any
stationery that contains any TECO Marks or otherwise operate the Acquired
Entities in any manner which would or might reasonably be expected to confuse
any Person into believing that the Purchaser has any right, title, interest or
license to use any TECO Marks. Nothing herein shall be construed as granting the
Purchaser the right to use the TECO Marks in any manner or for any purpose
inconsistent with or to any greater extent than the current use of such TECO
Marks by the Acquired Entities.

Section 6.11 Consents. The Purchaser acknowledges that certain consents or
waivers with respect to the Transactions may be required, including with respect
to the Contracts of Operaciones and that such consents have not been obtained.
The Seller shall use commercially reasonable efforts to obtain on behalf of the
Purchaser such consents; provided that the Purchaser acknowledges that the
Seller’s obligation under this Section 6.11 shall not include any obligation on
the part of the Seller or any of its Affiliates to enter into or modify any form
of relationship, arrangement or agreement with any third party or require the
payment by the Seller or any of its Affiliates of any compensation or other
consideration. The Purchaser acknowledges and agrees that the Seller shall not
have any liability or obligation whatsoever to

 

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the Purchaser arising out of or relating to the failure to obtain any consents
that may be required in connection with the Transactions or because of the
termination of any Contract as a result thereof. The Purchaser agrees that no
representation, warranty or covenant of the Seller contained in this Agreement
shall be breached or deemed breached, and no condition shall be deemed not
satisfied, as a result of (a) the failure to obtain any consent, (b) any such
termination or (c) any lawsuit, action, proceeding or investigation commenced or
threatened by or on behalf of any Person arising out of or relating to the
failure to obtain any consent or any termination.

Section 6.12 Non-Solicitation. Beginning on the date hereof and continuing until
the date which is twenty four (24) months after the Closing Date, the Seller and
its Affiliates shall not initiate, knowingly solicit or knowingly encourage any
inquiries or the making of any proposal or offer for employment or employ,
including as consultant or independent contractor, any person who on the Closing
Date is an employee, officer or manager of any of the Acquired Entities and that
resides in Guatemala, except with the express written permission of the
Purchaser in each instance; provided, that the foregoing restriction will not
apply to (i) general solicitations for employees not specifically directed at
any such person, (ii) general mandates given to recruitment consultants or
(iii) soliciting or hiring any person who was not employed by any of the
Acquired Entities at any time during the thirty (30) days prior to such
solicitation or hiring.

Section 6.13 Exclusivity. Between the date hereof and the earlier to occur of
the Closing Date or termination in accordance with Section 9.1: (a) the Seller
shall not and shall cause each of the Acquired Entities not to, directly or
indirectly: (i) initiate, solicit, encourage or otherwise facilitate any
inquiry, proposal, offer or discussion with any party (other than the Purchaser)
concerning any Acquisition Transaction, (ii) furnish any information concerning
the business, properties or assets of the Acquired Entities to any Person (other
than the Purchaser) or (iii) engage in discussions or negotiations with any
party (other than the Purchaser) concerning any such transaction; and (b) the
Seller shall and shall cause the Acquired Entities to (i) immediately cease any
discussions or negotiations of the nature described in clause (a) of this
Section that were pending, (ii) refrain from entering into any Acquisition
Transaction, and (iii) promptly advise the Purchaser in writing of the receipt,
directly or indirectly, of any inquiry, proposal or other materials, and of any
discussions, negotiations or proposals relating to, an Acquisition Transaction.
Notwithstanding the foregoing, the Purchaser acknowledges and agrees that the
Seller and its Affiliates will not be in violation of this Section 6.13 in
connection with any discussions or proposals relating to an Acquisition
Transaction with C.F. Financeco, Ltd., a British Virgin Islands business company
(or any of its successors or assigns).

Section 6.14 Commitment Letters. The Purchaser shall use its reasonable best
efforts to comply with its obligations and enforce its rights under the
Commitment Letters in a timely manner and shall not permit any amendment or
modification thereto, or any waiver of any provision or remedy thereunder, which
would have the effect of introducing an additional condition to such
counterparties’ obligations, reducing the amount of the commitments thereunder
or delaying the Closing. If any portion of the financing contemplated pursuant
to the

 

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Commitment Letters (the “Financing”) becomes unavailable on the terms and
conditions contemplated in the Commitment Letters, the Purchaser shall notify
the Seller within two (2) Business Days and shall use its reasonable best
efforts to obtain alternative financing from alternative sources on
substantially the same terms (including pricing) in an amount sufficient to
consummate the Transactions as promptly as reasonably practicable following the
occurrence of such event. The Purchaser shall deliver to the Seller true and
complete copies of all agreements pursuant to which any such alternative source
shall have committed to provide the Purchaser with any portion of the financing
necessary to consummate the Transactions. The Purchaser shall give the Seller
notice within two (2) Business Days of any material breach by any party to the
Commitment Letters, or any termination of the Commitment Letters. The Purchaser
shall refrain (and shall use its reasonable best efforts to cause its Affiliates
to refrain) from taking, directly, or indirectly, any action that would result
in a failure of any of the conditions contained in the Commitment Letters or in
any definitive agreements related to the Financing. The Purchaser shall not
agree to or permit any material amendment, supplement or other modification to
be made to, or any waiver of any material provision or remedy under, the
Commitment Letters or the definitive agreements relating to the Financing that
would materially and adversely affect or delay in any material respect the
Purchaser’s ability to consummate the Transactions, without first obtaining the
Seller’s prior written consent (which shall not be unreasonably withheld,
conditioned or delayed). Any material breach by the Purchaser of the Commitment
Letters and/or any related fee or engagement letter shall be deemed a material
breach by the Purchaser of this Section 6.14. The Purchaser will provide to the
Seller any modifications or amendments to the Commitment Letters, or any
material notices given in connection therewith, promptly but in any event within
two (2) Business Days.

ARTICLE VII

POST-CLOSING TAX MATTERS

Section 7.1 Tax Filings. The Seller shall cause the Acquired Entities to file
all Tax returns due on or prior to the Closing Date. The Purchaser shall be
responsible for preparing and shall cause the Acquired Entities to file all Tax
returns that are due after the Closing Date; provided, however, that the Seller
shall have the right to review and approve any such Tax return which relates to
a Pre-Closing Tax Period (a draft copy of which shall be provided to the Seller
not later than fifteen (15) Business Days prior to the applicable due date
thereof); provided that such approval shall not be unreasonably withheld. All
Tax returns that are filed pursuant to this Section 7.1, in the absence of a
controlling change in any Law or circumstances, shall be prepared on a basis
consistent with the elections, accounting methods, conventions and principles of
taxation used for the most recent taxable periods for which Tax returns have
been filed and in a manner that does not accelerate deductions or defer income
between Tax periods, except as otherwise required by any applicable Law.

 

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Section 7.2 Pre-Closing and Straddle-Period Taxes.

(a) Taxes relating to a Straddle Period shall be allocated to the Pre-Closing
Date Tax Period or Post-Closing Date Tax Period for purposes of determining the
portion of such Taxes that are Pre-Closing Taxes as follows: Taxes allocable to
the portion of the Straddle Period that ends on the Closing Date shall: (i) in
the case of Taxes that are based upon or related to income or receipts, or
imposed on a transactional basis, be deemed equal to the amount of Tax that
would be payable if the Tax year or period ended on the Closing Date; and
(ii) in the case of other Taxes, determined by allocating such Taxes between the
Pre-Closing Tax Period and Post-Closing Tax Period on a per diem basis. For
purposes of clause (i) of the preceding sentence, any exemption, deduction,
credit or other item that is calculated on an annual basis shall be allocated
pro rata per day between the period ending on the Closing Date and the period
beginning after the Closing Date. The parties hereto will, to the extent
permitted by applicable Law, elect with the relevant Tax authority to treat a
portion of any Straddle Period as a short taxable period ending as of the close
of business on the Closing Date.

(b) Following the Closing, the Seller and the Purchaser will cooperate with each
other, as and to the extent reasonably requested by the other, in the
preparation of any Tax returns and in the conduct of any audit or other
proceeding related to Taxes involving or relating to the Acquired Entities
(which cooperation will include the retention and, upon request, the provision
to the requesting party of records and information which are reasonably relevant
to the preparation of such Tax return or to the conduct of such audit or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder). The Purchaser and the Seller agree (i) to retain all books and
records with respect to Tax matters pertinent to the Acquired Entities relating
to any Pre-Closing Date Tax Period, and to abide by all record retention
agreements entered into with any Tax authority, and (ii) to give the other party
reasonable written notice prior to destroying or discarding any such books and
records and, if the other party so requests, the Purchaser or the Seller, as the
case may be, shall allow such other party to take possession of such books and
records. The Purchaser will promptly provide the Seller with written
notification in the manner set forth in (and subject to the terms of)
Section 11.9 of any notice of any Tax audits or other assessments against any of
the Acquired Entities involving any Pre-Closing Tax Periods.

(c) The Seller shall control and participate in all proceedings taken in
connection with the conduct of any audit or other administrative or judicial
proceeding related to Pre-Closing Taxes for which the Seller is obligated to
provide indemnification under this Agreement (other than Taxes relating to a
Straddle Period), and the Seller will reasonably consult with the Purchaser
prior to any settlement thereof and will not enter into any such settlement
without the Purchaser’s prior written approval (not to be unreasonably withheld,
conditioned or delayed) if such settlement could result in an increase in any
Taxes for which the Purchaser is not entitled to indemnification under this
Agreement.

 

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(d) The Seller and the Purchaser will jointly control and participate in all
proceedings taken in connection with the conduct of any audit or other
proceeding related to Taxes of any of the Acquired Entities for any Straddle
Period. Neither the Seller nor the Purchaser will settle any assessment or claim
made by any Governmental Authority in any such audit or other proceeding without
the prior written consent of the others (which consent will not be unreasonably
withheld, conditioned or delayed).

Section 7.3 Post-Closing Actions; Refunds.

(a) Post-Closing Actions. The Purchaser shall not, and shall not cause or permit
its Affiliates (including the Acquired Entities) to, take any action during any
Straddle Period, outside of the ordinary course of business, or make any
election, that could increase the Seller’s liability for Taxes (including any
liability of the Seller to indemnify the Purchaser for Taxes pursuant to this
Agreement) except in each case as may be required by applicable Law, this
Agreement or any other agreement entered into by an Acquired Entity prior to the
Closing (in which case the Purchaser will provide written notice to the Seller
of such action or election and the consequences thereof not less than fifteen
(15) Business Days prior to taking such action or making such election). The
Purchaser shall not, and shall not cause or permit the Acquired Entities to,
amend, re-file or otherwise modify any Tax return for any period that includes,
or ends on or prior to, the Closing Date, in each case, without the Seller’s
prior written approval (which shall not be unreasonably withheld, conditioned or
delayed). The Purchaser shall not make, and shall cause its Affiliates
(including the Acquired Entities) not to make, (i) any election under
Section 338 of the U.S. Internal Revenue Code (the “Code”) (or any comparable
election under the Law of any U.S. state or local jurisdiction) with respect to
the acquisition of the Acquired Entities without the prior written consent of
the Seller (which the Seller may grant or withhold in its sole and absolute
discretion), or (ii) any election provided under U.S. federal, state or local
Law with respect to the Acquired Entities (including any election pursuant to
U.S. Treasury Regulation Section 301.7701-3), which election would be effective
on or prior to the Closing Date. Notwithstanding the foregoing, the Purchaser
shall not, and shall not cause or permit the Acquired Entities to, make any
election under foreign Law that would be effective on or prior to the Closing
Date which could increase the Seller’s liability for Taxes (including any
liability of the Seller to indemnify the Purchaser for Taxes pursuant to this
Agreement). Following the Closing, the Seller will in good faith cooperate with
the Purchaser to the extent reasonably requested by the Purchaser, to determine
the consequences of any proposed restructuring of the Purchaser, any of the
Acquired Entities or the financing of any thereof that could have an effect on
the Seller during any Straddle Period.

(b) Proceedings. The Purchaser shall control and participate in all proceedings
taken in connection with the conduct of any audit or other administrative or
judicial proceeding related to Post-Closing Taxes for which the Purchaser is
obligated to provide indemnification under this agreement (other than Taxes
relating to a Straddle Period), and the Purchaser will reasonably consult with
the Seller prior to any settlement thereof and will not enter into any such
settlement without the Seller’s prior written approval (not to be unreasonably
withheld,

 

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conditioned or delayed) if such settlement could result in an increase in any
Taxes of the Seller for which the Seller is not entitled to indemnification
under this Agreement.

(c) Refunds. Any refunds or credits of Taxes paid by, for or on behalf of the
Acquired Entities relating to any Pre-Closing Tax Period (plus any interest
actually received with respect thereto and including refunds or credits arising
from amended Tax returns filed on or after the Closing Date) shall be for the
Seller’s account and, if received by the Purchaser or its Affiliates (including
the Acquired Entities), shall be paid to the Seller within ten (10) Business
Days after such receipt by the Purchaser or such Affiliate (including the
Acquired Entities); provided, that such refunds or credits of Taxes shall be for
the Seller’s account only if and to the extent that the Tax liability to which
the refund or credit relates was paid by an Acquired Entity prior to the Closing
Date or paid (or actually indemnified) by the Seller.

ARTICLE VIII

CONDITIONS PRECEDENT

Section 8.1 Conditions to Each Party’s Obligation to Effect the Transactions.
The respective obligations of each party hereto to effect the Transactions shall
be subject to the satisfaction (or waiver, if permissible under applicable Law)
on or prior to the Closing Date of the following conditions:

(a) Governmental Consents. The consents, approvals, orders or authorizations of,
or registrations, declarations or filings with, any Governmental Authority set
forth in Section 8.1(a) of the Disclosure Schedule required in connection with
the execution, delivery or performance hereof by the parties hereto shall have
been made or obtained; and

(b) No Injunctions or Restraints. No Law, injunction, judgment or ruling
enacted, promulgated, issued, entered, amended or enforced by any Governmental
Authority shall be in effect enjoining, restraining, preventing or prohibiting
consummation of the Transactions or making the consummation of the Transactions
illegal.

Section 8.2 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to effect the Transactions are further subject to the satisfaction (or
waiver, if permissible under applicable Law) on or prior to the Closing Date of
the following conditions:

(a) Representations and Warranties. The representations and warranties of the
Seller contained in (i) Section 3.4, Section 3.7, Section 4.2, Section 4.11(c)
and/or Section 4.17 shall be true and correct in all respects as of the Closing
Date as if made as of the Closing Date (or, if given as of a specific date, at
and as of such date) and (ii) except as provided in clause (i) of this
Section 8.2(a), Articles III and IV of this Agreement shall be true and correct
as of the Closing Date as if made on and as of the Closing Date (or, if given as
of a specific date, at and as of such date), except (as to clause (ii)) (x) for
changes permitted by this Agreement or (y) where

 

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the failure or failures to be so true and correct, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect;

(b) Performance of Obligations of the Seller. The Seller shall have performed in
all material respects all obligations required to be performed by the Seller
under this Agreement at or prior to the Closing Date;

(c) Seller’s Certificate. The Purchaser shall have received a certificate signed
on behalf of the Seller by an executive officer of the Seller certifying that
the conditions set forth in Sections 8.2(a) and (b) as they relate to the
representations, warranties and covenants of the Seller have been satisfied;

(d) Seller Related Party Indebtedness. Any indebtedness of the Seller or any
Affiliate of the Seller with the Acquired Entities shall have been eliminated;
and

(e) Material Adverse Effect. No change, event or effect has occurred that has
had or could reasonably be expected to have a Material Adverse Effect.

Section 8.3 Conditions to Obligations of the Seller. The obligations of the
Seller to effect the Transactions are further subject to the satisfaction (or
waiver by the Seller, if permissible under applicable Law) on or prior to the
Closing Date of the following conditions:

(a) Representations and Warranties. The representations and warranties of the
Purchaser contained in Article V of this Agreement shall be true and correct as
of the Closing Date as if made on and as of the Closing Date (or, if given as of
a specific date, at and as of such date), except where the failure or failures
to be so true and correct, individually or in the aggregate, would not
reasonably be expected to impair in any material respect the ability of the
Purchaser to perform its obligations under this Agreement or prevent or
materially delay consummation of the Transactions;

(b) Performance of Obligations of the Purchaser. The Purchaser shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Closing Date;

(c) Officer’s Certificate. The Seller shall have received a certificate signed
on behalf of the Purchaser by an executive officer of the Purchaser certifying
that the conditions set forth in Sections 8.3(a) and (b) have been satisfied;

(d) ROFO. Neither the Seller nor any Affiliate of the Seller shall have received
an Offer Notice or a written instrument purporting to constitute an Offer Notice
under the Option Agreement, provided, however, this condition shall be deemed
satisfied without further action by any party upon a ROFO Expiration; and

 

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(e) Concurrent Closing. Purchaser shall concurrently with the Closing consummate
a direct or indirect purchase of all the equity interests of TEMSA and CGESJ
from the Seller or an Affiliate of the Seller.

ARTICLE IX

TERMINATION

Section 9.1 Termination. This Agreement may be terminated and the Transactions
abandoned at any time prior to the Closing:

(a) by the mutual written consent of the Seller and the Purchaser;

(b) by the Seller or the Purchaser:

(i) if the Closing Date does not occur on or before the later of (A) ninety
(90) days after the date of this Agreement and (B) sixty (60) days after any
ROFO Expiration (the “Walk-Away Date”); provided, however, that the right to
terminate this Agreement under this Section 9.1(b)(i) shall not be available to
a party if the failure of the Closing Date to occur on or before the Walk-Away
Date was primarily due to the failure of such party to perform any of its
obligations under this Agreement; provided, further, that if as of such date the
only condition to the Closing which has not been satisfied or waived is the
condition to Closing set forth in Section 8.1(a), then the Walk-Away Date will
be extended for ten (10) additional days; provided, further, that if the Seller
exercises its right to deliver a Disclosure Schedule Update, then solely as to
the Purchaser, the Walk-Away Date shall be the later of the date specified in
this Section 9.1(b)(i) above or the fifth (5th) Business Day after the delivery
of such Disclosure Schedule Update; or

(ii) if any order or restraint having the effect set forth in Section 8.1(b)
shall be in effect and shall have become final and non-appealable;

(c) by the Purchaser, (i) if the Seller shall have materially breached any of
its representations, warranties, covenants or agreements set forth in this
Agreement, which breach (x) would give rise to the failure of a condition set
forth in Section 8.2 and (y) cannot be cured by the Seller by the Walk-Away
Date; provided, however, that the Purchaser is not in breach in any material
respect of any of its representations, warranties, covenants or agreements
contained in this Agreement or (ii) pursuant to the final sentence of
Section 11.12(g).

(d) by the Seller, (i) if the Purchaser shall have materially breached any of
its representations, warranties, covenants or agreements set forth in this
Agreement, which breach (x) would give rise to the failure of a condition set
forth in Section 8.3 and (y) cannot be cured

 

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by the Purchaser by the Walk-Away Date; provided, however, that the Seller is
not in breach in any material respect of any of its representations, warranties,
covenants or agreements contained in this Agreement or (ii) immediately prior to
the consummation of a direct or indirect sale of all the equity interest of
TEMSA or CGESJ to a Person other than the Purchaser.

Section 9.2 Effect of Termination; Reverse Termination Fee.

(a) In the event of the termination of this Agreement as provided in
Section 9.1, written notice thereof shall be given to the other party,
specifying the provision hereof pursuant to which such termination is made and
this Agreement shall forthwith become null and void (other than the last
sentence of Section 6.4, the last sentence of Section 6.5(a), Section 6.5(b),
Section 6.7, this Section 9.2 and Article XI) and there shall be no liability on
the part of the Purchaser or the Seller or their respective directors, officers
and Affiliates, except that, where a party has committed fraud or intentionally
breached this Agreement, nothing shall relieve such party from liability to the
non-breaching party for such fraud or intentional breach nor impair the right of
any non-breaching party to compel specific performance by such other party of
its obligations under this Agreement.

(b) Notwithstanding Section 9.2(a), in the event this Agreement is terminated by
the Seller pursuant to Section 9.1(d)(i), the Seller shall immediately draw down
the total amount from the Letter of Credit (the “Reverse Termination Fee”). The
Seller’s right to receive the Reverse Termination Fee from the Purchaser shall
be the Seller’s sole remedy in the event of any such termination by the Seller
pursuant to Section 9.1(d)(i) and shall be treated as liquidated damages
suffered as a result of the failure of the Transactions to be consummated or as
a result of the breach or failure to perform under this Agreement.

Section 9.3 Return of Confidential Information. If the transactions contemplated
by this Agreement are terminated as provided herein:

(a) The Purchaser shall return to the Seller or destroy (such destruction to be
certified in writing by an appropriate officer of the Purchaser) all
confidential information received by the Purchaser and its representatives from
the Seller, the Acquired Entities or their respective representatives relating
to the Seller and the Acquired Entities, whether so obtained before or after the
execution hereof; and

(b) all confidential information received by the Purchaser and its
representatives with respect to the Seller and the Acquired Entities shall be
treated in accordance with the Confidentiality Agreement, which shall remain in
full force and effect subject to its terms notwithstanding the termination of
this Agreement.

 

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ARTICLE X

INDEMNIFICATION

Section 10.1 Indemnification by the Seller. The Seller will indemnify, defend
and hold harmless the Purchaser, each Affiliate of the Purchaser (including,
after the Closing, the Acquired Entities) and each of their respective officers,
directors, and employees (collectively, the “Purchaser Group”) from and against
and pay or reimburse, as the case may be, the Purchaser Group for, any and all
Damages actually paid or suffered by any member of the Purchaser Group based
upon or arising out of:

(a) the breach by the Seller of any of the Seller’s representations and
warranties contained in Article III and Article IV;

(b) the breach by the Seller of any covenant or agreement of the Seller
contained in this Agreement on the part of the Seller to be observed or
performed;

(c) any Pre-Closing Taxes, provided, however, that the Seller shall not
indemnify and hold harmless the Purchaser Group, from any liability for
Pre-Closing Taxes attributable to any action taken after the Closing by the
Purchaser, any of its Affiliates (including the Acquired Entities), or any
transferee of the Purchaser or any of its Affiliates (including the Acquired
Entities) if such action was taken in breach of Section 7.3(a) (a “Purchaser Tax
Act”); or

(d) any federal, state, local or foreign taxes, charges, fees, imposts,
transaction taxes, levies or other assessments in respect of income and/or gains
of the Seller (including income taxes, profit taxes, capital gains taxes and
withholding taxes in respect thereof), and all value added taxes and stamp
taxes, if any, imposed in connection with the Restructuring and the sale of the
Acquired Company Interests (collectively, the “Seller Taxes”).

Section 10.2 Indemnification by the Purchaser. The Purchaser will indemnify,
defend and hold harmless the Seller, each Affiliate of the Seller and each of
their respective officers, directors, and employees (collectively, the “Seller
Group”) from and against, and pay or reimburse, as the case may be, the Seller
Group for, any and all Damages actually paid or suffered by any member of the
Seller Group based upon or arising out of:

(a) the breach by the Purchaser of any representations and warranties contained
in Article V;

(b) the breach by the Purchaser of any covenant or agreement of the Purchaser
contained in this Agreement on the part of the Purchaser to be observed or
performed; or

(c) any Post-Closing Taxes or any liability for Pre-Closing Taxes that in each
case is attributable to a Purchaser Tax Act.

 

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Section 10.3 Indemnification Procedures.

(a) If any claim or demand is made against an Indemnified Party by a Person not
a party hereto (or an Affiliate thereof) with respect to any matter, by any
Person who is not a party to this Agreement (or an Affiliate thereof) which may
give rise to a claim for indemnification against an Indemnifying Party under
this Agreement (a “Third Party Claim”), then the Indemnified Party will promptly
notify the Indemnifying Party in writing and in reasonable detail of the Third
Party Claim, including the factual basis for the Third Party Claim and, to the
extent known, the amount of the Third Party Claim; provided, however, that no
delay on the part of the Indemnified Party in notifying the Indemnifying Party
will affect the Indemnifying Party’s obligations under this Article X, except to
the extent the Indemnifying Party is actually prejudiced as a result thereof
(except that the Indemnifying Party will not be liable for any expenses incurred
during the period in which the Indemnified Party failed to give such notice).
Thereafter, the Indemnified Party will deliver to the Indemnifying Party,
promptly after the Indemnified Party’s receipt thereof, copies of all
non-ministerial notices and documents (including court papers) received or
transmitted by the Indemnified Party relating to the Third Party Claim.

(b) The Indemnifying Party will have the right to participate in or to assume
the defense of any Third Party Claim (in either case at the expense of the
Indemnifying Party) with counsel of its choice. The Indemnifying Party will be
liable for the reasonable fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party has failed
to assume the defense thereof (other than during any period in which the
Indemnified Party shall have failed to give notice of the Third Party Claim as
provided above). Should the Indemnifying Party so elect to assume the defense of
a Third Party Claim, the Indemnifying Party will not be liable to the
Indemnified Party for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party is conducting the defense of the Third Party Claim the Indemnified Party,
at its sole cost and expense, may retain separate counsel and participate in the
defense of the Third Party Claim, it being understood that the Indemnifying
Party will control such defense and any such counsel shall cooperate with the
legal counsel of the Indemnifying Party.

(c) No Indemnifying Party will consent to any settlement, compromise or
discharge (including the consent to entry of any judgment) of any Third Party
Claim without each Indemnified Party’s prior written consent (which consent will
not be unreasonably withheld, conditioned or delayed); provided that if the
Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified
Party will agree to any settlement, compromise or discharge of such Third Party
Claim which the Indemnifying Party may recommend and which by its terms
unconditionally releases the Indemnified Party and each member of such
Indemnified Party’s Group completely from all liability in connection with such
Third Party Claim; provided, however, that the Indemnified Party may refuse to
agree to any such settlement, compromise or discharge that provides for
injunctive or other nonmonetary relief affecting the Indemnified Party or any
member of such Indemnified Party’s Group. Whether or not the

 

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Indemnifying Party shall have assumed the defense of a Third Party Claim, the
Indemnified Party will not and will cause its Affiliates not to, admit any
liability, consent to the entry of any judgment or agree to any settlement,
compromise or discharge with respect to any Third Party Claim without the prior
written consent of the Indemnifying Party.

(d) If the Indemnifying Party assumes the defense of any Third Party Claim, the
Indemnifying Party will keep the Indemnified Party reasonably informed of all
material developments relating to or in connection with such Third Party Claim.
If the Indemnifying Party chooses to defend a Third Party Claim, the Indemnified
Party will cooperate in the defense thereof, which cooperation will include the
provision to the Indemnifying Party of records and information which are
reasonably relevant to such Third Party Claim and making employees available on
a mutually convenient basis to provide additional information and explanation of
any material provided hereunder.

(e) Any claim on account of Damages for which indemnification is provided under
this Agreement that does not involve a Third Party Claim will be asserted by
reasonably prompt written notice given by the Indemnified Party to the
Indemnifying Party from whom such indemnification is sought. The notice shall
set forth the amount, if known, or, if not known, an estimate of the foreseeable
maximum amount, of claimed Damages and a description of the basis for such
claim. The delay by any Indemnified Party to so notify the Indemnifying Party
will not affect the Indemnifying Party’s obligations under this Article X,
except to the extent that the Indemnifying Party is actually prejudiced as a
result thereof.

(f) In connection with any matter for which a claim or demand is made against an
Indemnified Party under this Agreement, the Indemnified Party shall use
commercially reasonable efforts to provide the Indemnifying Party with
reasonable and necessary access to all documents, data, products, product
exemplars and knowledgeable personnel of the Indemnified Party and its
Affiliates relevant to any such matter, in each case at the Indemnified Party’s
cost and expense. Without limiting the generality of the foregoing, the
Indemnified Party shall, at its own cost and expense, use commercially
reasonable efforts to, and shall use commercially reasonable efforts to cause
its Affiliates to, provide employees to act as witnesses, prepare and execute
statements, authorizations, orders, reports and other documents and information
and provide such other assistance, in each case that is reasonably requested by
the Indemnifying Party in connection with any matter for which a claim or demand
is made against an Indemnified Party under this Agreement, including in
anticipation of, or preparation for, existing or future litigation or other
matters in which the Indemnifying Party or any of its Affiliates is involved.

(g) In the event of payment in full by an Indemnifying Party to any Indemnified
Party in connection with any claim (an “Indemnified Claim”), such Indemnifying
Party will be subrogated to and will stand in the place of such Indemnified
Party as to any events or circumstances in respect of which such Indemnified
Party may have any right or claim relating to such Indemnified Claim against any
claimant or plaintiff asserting such Indemnified Claim or against any other
Person. Such Indemnified Party will cooperate with such Indemnifying Party

 

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in a reasonable manner in prosecuting any subrogated right or claim. Each such
Indemnified Party and Indemnifying Party will duly execute upon request all
instruments reasonably necessary to evidence and perfect the above described
subrogation rights.

Section 10.4 Certain Limitations.

(a) The amount which an Indemnifying Party is or may be required to pay to an
Indemnified Party in respect of Damages for which indemnification is provided
under this Agreement will be reduced by any amounts actually received (including
amounts received under insurance policies) by or on behalf of the Indemnified
Party from third parties (net of out-of-pocket costs and expenses (including
reasonable legal fees and expenses) incurred by such Indemnified Party in
connection with seeking to collect and collecting such amounts), in respect of
such Damages (such net amounts are referred to herein as “Indemnity Reduction
Amounts”). If any Indemnified Party receives any Indemnity Reduction Amounts in
respect of an Indemnified Claim for which indemnification is provided under this
Agreement after the full amount of such Indemnified Claim has been paid by an
Indemnifying Party or after an Indemnifying Party has made a partial payment of
such Indemnified Claim and such Indemnity Reduction Amounts exceed the remaining
unpaid balance of such Indemnified Claim, then the Indemnified Party will
promptly remit to the Indemnifying Party an amount equal to the excess (if any)
of (i) the amount theretofore paid by the Indemnifying Party in respect of such
Indemnified Claim, less (ii) the amount of the indemnity payment that would have
been due if such Indemnity Reduction Amounts in respect thereof had been
received before the indemnity payment was made. An insurer or other third party
who would otherwise be obligated to pay any claim shall not be relieved of the
responsibility with respect thereto or, solely by virtue of the indemnification
provisions hereof, have any subrogation rights with respect thereto, it being
expressly understood and agreed that no insurer or any other third party shall
be entitled to any benefit they would not be entitled to receive in the absence
of the indemnification provisions by virtue of the indemnification provisions
hereof. The Seller and the Purchaser will use commercially reasonable efforts to
mitigate the amount of Damages for which indemnification is provided under this
Agreement.

(b) The amount of Damages for which indemnification is provided under this
Agreement will reduced to take account of any Tax benefit actually realized by
the Indemnified Party arising from the incurrence or payment of any such
Damages.

(c) Anything contained in this Agreement to the contrary notwithstanding, the
Seller will not have any obligation to indemnify any member of the Purchaser
Group with respect to any matter if the Damages arise from a change in the
accounting or Tax policies or practices of any of the Acquired Entities after
the Closing Date.

(d) Anything contained in this Agreement to the contrary notwithstanding,
excluding a party’s breach of its confidentiality obligations, no member of the
Seller Group and no member of the Purchaser Group will be entitled to any
recovery under this Agreement for

 

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special, punitive, exemplary, incidental, indirect, or consequential damages,
lost profits or diminution in value. No Damages shall be determined or increased
based on any multiple of any financial measure (including earnings, sales or
other benchmarks) that might have been used by the Purchaser in the valuation of
the Acquired Company Interests, the Acquired Entities, or their respective
businesses and operations.

(e) No Indemnified Party shall be entitled to indemnification under this Article
X for any breach of a representation or warranty hereunder if (1) such
Indemnified Party had actual knowledge of such breach on or before Closing and
(2) the Indemnifying Party did not have actual knowledge of such breach (or the
facts giving rise to such breach) on or before the Closing. Solely for purposes
of this Section 10.4(e) “actual knowledge” as it relates to (i) the Purchaser
shall mean the actual knowledge of Luis Kafie, Luis Jose Kafie and Christopher
Kafie and (ii) the Seller shall mean with respect to the Operaciones, the actual
knowledge of Victor Urrutia, Operations VP and General Manager, Ana Karina
Mendizabal, Financial Manager and Rafael Navajas, Commercial Manager, and with
respect to Services and Tasajero, the actual knowledge of Terry Schramm,
Assistant Controller of TECO Guatemala, Inc.

(f) In addition to the limitations set forth in this Section 10.4 and
Section 10.6, with respect to any claim for indemnification regarding any breach
of the representation and warranty set forth in Section 4.10 there shall be no
obligation to indemnify any member of the Purchaser Group for any Damages
(i) unless the Damages arise out of (A) a Third Party Claim that is not
intentionally instigated or encouraged by any member of the Purchaser Group, or
(B) a condition discovered in the ordinary course of business, and then
(ii) only to the extent such Damages were incurred to comply with applicable
Environmental Laws using, in the case of any remedial measures taken by or on
behalf of the Purchaser (including the Acquired Entities) after the Closing,
reasonable and recognized remediation protocols and techniques that are
economically reasonable in relation to other reasonable and recognized
remediation protocols and techniques; provided, however, that there shall be no
liability for any such Damages to the extent that any member of the Purchaser
Group or any other Person after Closing contributed to the condition or
circumstance forming the basis of such Damages.

(g) Any Damages for which any member of the Purchaser Group is entitled to
indemnification under Section 10.1 shall be determined without duplication of
recovery by reason of the state of facts giving rise to such Damages
constituting a breach of more than one representation and warranty or covenant.

Section 10.5 Termination of Indemnification Obligations.

(a) Each and every representation and warranty of the Seller or the Purchaser
contained in Articles III, IV and V will survive the Closing Date solely for
purposes of Sections 10.1(a) and 10.2(a), as applicable, until (and will expire
and be of no further force or effect after) the eighteen (18) month anniversary
of the Closing Date; provided, however, that the representations and warranties
contained in Sections 3.4, 4.2 and 4.11(c) shall survive until (and

 

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will expire and be of no further force or effect after) the sixth anniversary of
the Closing Date. Each other representation and warranty made by any party
contained in or made pursuant to this Agreement or contained in or made pursuant
to any closing certificate or other instrument or agreement delivered by any
party pursuant to this Agreement will not survive (and will expire at) the
Closing and shall thereafter be of no further force or effect and no party will
have any obligation to provide indemnification or other liability in respect
thereof.

(b) The obligations of each party to indemnify, defend and hold harmless the
applicable Persons (i) pursuant to Sections 10.1(a) and 10.2(a) will terminate
when the applicable representation or warranty expires pursuant to
Section 10.5(a) and (ii) pursuant to Sections 10.1(b) and 10.2(b) will terminate
eighteen (18 months from the date of this Agreement and (iii) pursuant to
Sections 10.1(c), 10.1(d) and 10.2(c) will terminate on the date that the
applicable statute of limitations relating to any Pre-Closing Taxes,
Post-Closing Taxes, or Seller Taxes, as applicable expire; provided, however,
that as to clauses (i), (ii) and (iii) above, such obligations to indemnify,
defend and hold harmless will not terminate with respect to any individual item
as to which an Indemnified Party shall have, before the expiration of the
applicable period, previously made a claim by delivering a notice (stating in
reasonable detail the basis of such claim) to the applicable Indemnifying Party
and such obligation will continue until the resolution of such claim.

Section 10.6 Dollar Limitations.

(a) Anything contained in this Agreement to the contrary notwithstanding, in no
event will the aggregate amount for which the Seller collectively shall be
responsible to indemnify the Purchaser Group for all claims under
Sections 10.1(a) or 10.1(b) (other than with respect to the Seller’s
representations and warranties contained in Sections 3.4, 4.2 and 4.11(c))
exceed, and the Seller’s collective aggregate liability under Sections 10.1(a)
or 10.1(b) (other than with respect to the Seller’s representations and
warranties contained in Sections 3.4, 4.2 and 4.11(c)) shall be limited to, an
amount equal to fifteen percent (15%) of the Purchase Price (the “Cap”). In no
event will the collective aggregate amount for which the Seller shall be
responsible to indemnify the Purchaser Group for all claims under
Sections 10.1(a) with respect to the representations and warranties contained in
Sections 3.4, 4.2 and 4.11(c) exceed the Purchase Price; provided, however, that
in no event will the aggregate amount for which the Seller collectively shall be
responsible to indemnify the Purchaser Group for all claims under
Sections 10.1(a) or 10.1(b) exceed the Purchase Price. Notwithstanding any other
provision of this Agreement to the contrary, the Seller’s liability relating to
the Seller Taxes shall not be subject to any Cap or Basket or Purchase Price
limit otherwise provided for herein.

(b) Anything contained in this Agreement to the contrary notwithstanding, no
monetary amount will be payable by the Seller to any member of the Purchaser
Group with respect to the indemnification of any claims pursuant to Section 10.1
until the aggregate amount of Damages actually incurred by the Purchaser Group
with respect to such claims against the Seller shall exceed on a cumulative
basis an amount equal to U.S.$1,000,000 of the Purchase

 

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Price (the “Basket”), in which event the Seller shall be responsible for the
full amount of the damages (i.e. not just the amount in excess of the Basket).
In addition, the Seller will not be responsible for making payments with respect
to Damages for any individual unrelated items pursuant to Section 10.1 where the
aggregate Damages relating thereto are less than U.S.$100,000 and such items
shall not be aggregated for purposes of determining whether aggregate Damages
incurred by the Purchaser Group exceed the Basket. In connection with any claim
for indemnification under Section 10.1, the Purchaser and the other members of
the Purchaser Group will promptly provide the Seller with written notice of all
claims included in the Basket and copies of all documents reasonably requested
by the Seller relating thereto. The limitations of this Section 10.6(b) shall
not apply to claims with respect to the Seller’s representations and warranties
contained in Sections 3.4, 4.2 and 4.11(c).

Section 10.7 Exclusive Remedy. To the fullest extent permitted by applicable
Law, the indemnification provided in this Article X and specific performance
pursuant to Section 11.13 shall be the sole and exclusive remedy available to
each party and their respective Affiliates and each member of the Seller Group
and the Purchaser Group for breaches of any of the terms, conditions,
representations, warranties, covenants or agreements contained in this Agreement
or for any other claims relating to the subject matter of this Agreement and
shall preclude assertion by members of the Seller Group or the Purchaser Group
of any other rights, claims or causes of action or the seeking of any other
remedies, whether in contract, tort, strict liability, under Law (including
statutory or common law) or otherwise, against the Purchaser (or any of its
Affiliates) or against the Seller (or any of its Affiliates), with respect to
breaches of any of the terms, conditions, representations, warranties, covenants
or agreements contained in this Agreement or for any other claims relating to
the subject matter of this Agreement, all of which the Purchaser (on behalf of
itself and the other members of the Purchaser Group) and the Seller (on behalf
of itself and the other members of the Seller Group) hereby waives.

ARTICLE XI

MISCELLANEOUS

Section 11.1 No Other Representations or Warranties.

(a) The parties acknowledge and agree that except for the representations and
warranties made by the Seller in Articles III and IV hereof, the Seller does not
(nor any Person on behalf of the Seller) make any representation or warranty,
express or implied, at Law or in equity, with respect to the Acquired Entities,
or their respective businesses, operations, assets, liabilities, condition
(financial or otherwise), prospects (financial or otherwise) or risks, including
with respect to merchantability or fitness for any particular purpose, or with
respect to any financial projections or forecasts, notwithstanding the delivery
or disclosure to the Purchaser or any of its Affiliates or representatives of
any documentation, forecasts or other information with respect to any one or
more of the foregoing. Without limiting the generality of the foregoing, the
Seller shall not have made, or shall not be deemed to have made, any

 

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representations or warranties in the Confidential Information Memorandum dated
October 2011 (the “Information Memorandum”), in the management presentations
relating to the Acquired Entities presented to the Purchaser on December 15,
2011 and January 12, 2012 or in any presentation of the Acquired Entities in
connection with the Transactions, or in any other written materials delivered to
the Purchaser in connection with any other such presentation (collectively, the
“Offering Materials and Presentations”), and no statement contained in the
Offering Materials and Presentations shall be deemed a representation or
warranty hereunder or otherwise. Except as otherwise expressly provided herein,
the Acquired Entities are being transferred “as is, where is and with all
faults”. Any claims the Purchaser may have for breach of representation or
warranty in connection with the Transactions shall be based solely on the
representations and warranties set forth in Articles III and IV and any such
other representations and warranties are hereby disclaimed. The parties further
acknowledge and agree that the Seller has not made (nor any Person on behalf of
the Seller) any representation or warranty, express or implied, at Law or in
equity, as to the accuracy or completeness of any information regarding the
Acquired Entities or the Transactions not expressly set forth in this Agreement,
and neither the Seller, nor any of its Affiliates, or any other Person will have
or be subject to any liability to the Purchaser, any of its representatives or
any other Person resulting from the distribution to the Purchaser or its
representatives or the Purchaser’s use of any such information, including any
document or information in any form provided to the Purchaser or its
representatives in connection with the Transactions.

(b) With respect to any projection or forecast delivered by or on behalf of the
Seller, any Acquired Entity, or any of their respective representatives to the
Purchaser or any of its representatives, the Purchaser acknowledges that
(i) there are uncertainties inherent in attempting to make such projections and
forecasts, (ii) the Purchaser is familiar with such uncertainties, (iii) the
Purchaser is taking full responsibility for making its own evaluation of the
adequacy and accuracy of all such projections and forecasts so delivered and
(iv) none of the Purchaser or its representatives or any other Person shall have
any claim against the Seller or any of its representatives or any other Person
with respect thereto. The Purchaser further acknowledges that it has expertise
in the businesses of the Acquired Entities and understands the risks and
uncertainties in connection with such businesses.

Section 11.2 Amendment or Supplement. This Agreement may be modified, altered,
amended or supplemented in any and all respects, by written agreement of each of
the parties hereto.

Section 11.3 Extension of Time, Waiver, Etc. At any time prior to the Closing
Date, any party may, subject to applicable Law, (a) waive any inaccuracies in
the representations and warranties of the other party hereto, (b) extend the
time for the performance of any of the obligations or acts of the other party
hereto or (c) waive compliance by the other party with any of the agreements
contained herein or, except as otherwise provided herein, waive any of such
party’s conditions. Notwithstanding the foregoing, no failure or delay by the
Seller or the Purchaser in exercising any right hereunder shall operate as a
waiver thereof nor shall any single

 

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or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.

Section 11.4 Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned, in whole or in part, (including by
operation of Law in connection with a merger, consolidation, sale of all or
substantially all of a party’s assets or otherwise) by any party without the
prior written consent of the other party. Notwithstanding the assignment of this
Agreement pursuant to the provisions stated hereinabove, it is understood and
agreed that the assignor shall remain responsible for its obligations under this
Agreement. Subject to the preceding sentences, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by, the parties hereto and
their respective successors and permitted assigns. Any purported assignment not
permitted under this Section 11.4 shall be null and void.

Section 11.5 Counterparts. This Agreement may be executed in counterparts (each
of which shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement) and shall become effective when one or
more counterparts have been signed by each party and delivered to the other
party. This Agreement may be executed by facsimile signature or by other
electronic means, such as portable document format (.pdf) file, which shall
constitute a legal and valid signature for purposes hereof.

Section 11.6 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
including the Disclosure Schedule, the exhibits hereto and the Confidentiality
Agreement (a) constitute the entire agreement and supersede and cancel all other
prior agreements, negotiations, correspondence, undertakings, communications and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof, including the Offering Materials and
Presentations and (b) except for the provisions of Section 6.8 with respect to
the Indemnified Directors and Article X with respect to members of the Seller
Group and the Purchaser Group, are not intended to and shall not be construed to
confer upon any Person, other than the parties hereto any rights, benefits,
privileges or remedies under or by reason of this Agreement.

Section 11.7 Governing Law. This Agreement, including its formation, validity,
performance, termination or enforcement, and the parties’ relationship in
connection therewith, together with any related claims whether sounding in
contract, tort or otherwise, shall be governed by and interpreted under the Laws
of the State of New York (without regard to its principles of conflicts of Laws
which would result in the application of the Laws of another jurisdiction).

Section 11.8 Consent to Jurisdiction; Waiver.

(a) The parties hereto hereby irrevocably submit to the exclusive jurisdiction
of any federal or state court located in Miami, Florida for any action, dispute,
suit or proceeding

 

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arising out of or relating to this Agreement (and the parties agree not to
commence any action, suit or proceeding relating thereto except in such court).
The parties hereby irrevocably and unconditionally waive, to the fullest extent
permitted by applicable Law, any objection which they may now or hereafter have
to the laying of venue of any such action, dispute, suit or proceeding arising
out of or relating to this Agreement in such court, the lack of jurisdiction of
such court or any defense of inconvenient forum for the maintenance of such
action, dispute, suit or proceeding. Each party hereto agrees that a judgment in
any such action, dispute, suit or proceeding may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law.

(b) Each party hereto hereby consents to process being served by any party to
this Agreement in any suit, action or proceeding by the delivery of a copy
thereof in accordance with the provisions of Section 11.9.

(c) Each party to this Agreement waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect to any
action, dispute, suit or proceeding directly or indirectly arising out of, under
or in connection with this Agreement or any transaction contemplated in this
Agreement. Each party (a) certifies that no representative, agent or attorney of
the other party has represented, expressly or otherwise, that such other party
would seek to avoid that foregoing waiver in the event of any action, dispute,
suit or proceeding and (b) acknowledges that it and the other party hereto have
been induced to enter into this Agreement, by, among other things, the mutual
waivers and certifications in this Section 11.8.

Section 11.9 Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be deemed given if sent by hand
delivery, facsimile, or air courier to the parties at the following addresses:

If to the Purchaser, to:

Renewable Energy Investments Guatemala Limited (REIN)

Edificio Comercial Los Proceres #3917

Final Avenida Los Proceres

Tegucigalpa, Honduras, Central America

Attention: Luis Jose Kafie

Email: luisjose.kafie@lufussa.com with copy to lkafie@hotmail.com

Facsimile: (504) 2236-7322

Mobile: (504) 9991-0443

with a copy (which shall not constitute notice) to:

Renewable Energy Investments Guatemala Limited (REIN)

Edificio Comercial Los Proceres #3917

Final Avenida Los Proceres

 

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Tegucigalpa, Honduras, Central America

Attention: Luis Kafie

Email: luis.kafie@lufussa.com

Facsimile: (504) 2236-7322

Mobile: (504) 9990-1796

If to the Seller, to:

TECO Energy, Inc.

702 N. Franklin Street

Tampa, FL 33602

Attention: General Counsel

Facsimile: (813) 228-4013

with a copy (which shall not constitute notice) to:

Holland & Knight LLP

701 Brickell Avenue, Suite 3000

Miami, FL 33131

Attention: Rodney H. Bell, Esq.

Facsimile: (305) 305-789-7799

or such other address or facsimile number as such party may hereafter specify by
like notice to the other party hereto. All such notices, requests and other
communications shall be deemed received (a) at the time personally delivered, if
delivered by hand with receipt acknowledged, (b) at the time received, if sent
by air courier and (c) upon issuance by the transmitting machine of a
confirmation slip that the number of pages constituting the notice has been
transmitted without error, if sent by facsimile.

Section 11.10 Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or
incapable of being enforced by any rule of Law or public policy, all other
terms, provisions and conditions of this Agreement shall nevertheless remain in
full force and effect. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable Law in an acceptable manner to the end that the Transactions are
fulfilled to the extent possible.

Section 11.11 Definitions.

(a) As used in this Agreement, the following terms have the meanings ascribed
thereto below:

 

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“Acquired Company Interests” shall have the meaning set forth in Section 1.1.

“Acquired Entities” or “Acquired Entity” shall mean Services, Tasajero and
Operaciones.

“Acquired Subsidiary Interests” means (a) one hundred percent (100%) of the
equity interests held by Services directly in Tasajero and (b) one hundred
percent (100%) of the equity interests held by Services directly (and
indirectly, through Tasajero) in Operaciones.

“Acquisition Transaction” shall mean any merger, liquidation, recapitalization,
consolidation or other business combination directly or indirectly involving any
Acquired Entity or the direct or indirect acquisition of any capital stock or
other securities of any Acquired Entity, or any substantial portion of the
assets of any Acquired Entity, or any combination of the foregoing (excluding
the transactions contemplated hereby).

“Affiliate” shall mean, as to any Person, any other Person that, directly or
indirectly, controls, or is controlled by, or is under common control with, such
Person. For this purpose, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
management or policies of a Person, whether through the ownership of securities
or partnership or other ownership interests, by contract or otherwise.

“Agreement” shall mean this Equity Purchase Agreement, as amended from time to
time.

“Antitrust Laws” shall have the meaning set forth in Section 6.3(a).

“Bankruptcy and Equity Exception” shall have the meaning set forth in
Section 3.2.

“Basket” shall have the meaning set forth in Section 10.6(b).

“Business Day” shall mean a day except (i) a Saturday, a Sunday or (ii) any
other day on which banks in the City of New York are authorized or required by
Law to be closed.

“CAFTA Claim” shall mean all claims, defenses and rights of offset or
counterclaim (at any time or in any manner arising or existing, whether choate
or inchoate, known or unknown, contingent or non-contingent) of the Seller and
its Affiliates related to or arising out of the events giving rise to that
certain arbitration proceeding captioned TECO Guatemala Holdings, LLC v.
Republic of Guatemala (ICSID Case No. ARB/10/23) and the underlying matter.

“Cap” shall have the meaning set forth in Section 10.6(a).

 

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“CGESJ” shall mean Central Generadora Eléctrica San José, Ltda., a sociedad de
responsabilidad limitada organized under the Laws of Guatemala.

“Closing” shall have the meaning set forth in Section 2.3(a).

“Closing Date” shall have the meaning set forth in Section 2.3(a).

“Code” shall have the meaning set forth in Section 7.3(a).

“Commitment Letters” shall have the meaning set forth in Section 5.5.

“Company Charter Documents” shall have the meaning set forth in Section 4.1.

“Company Employees” shall have the meaning set forth in Section 6.2(a).

“Confidentiality Agreement” shall mean that certain letter agreement dated
October 6, 2011 between the Purchaser and TECO Guatemala, Inc.

“Contract” shall mean any loan or credit agreement, debenture, note, bond,
mortgage, indenture, deed of trust, lease, contract or other agreement.

“Damages” shall mean losses, liabilities, claims, damages, fines, fees,
penalties, payments, demands, judgments, settlements, costs and expenses
(including reasonable costs and expenses of actions, suits, arbitrations or
proceedings, amounts paid in connection with any assessments, judgments or
settlements relating thereto, interest and penalties recovered by a third party
with respect thereto and out-of-pocket expenses and reasonable attorneys’,
accountants’ and other experts’ fees and expenses incurred in defending against
any such actions, suits, arbitrations or proceedings or in enforcing an
Indemnified Party’s rights hereunder).

“Disclosure Schedule” shall have the meaning set forth in the preamble to
Article III.

“Environmental Law” shall mean any applicable Law relating to (i) the protection
of the environment (including air, water, soil and natural reserves, or (ii) the
use, storage, handling, release or disposal of Hazardous Substances, in each
case as in effect on the date of this Agreement.

“Force Majeure Event” shall mean any events beyond the reasonable control of a
Person, including acts of God such as severe adverse weather conditions,
earthquakes, floods, hurricanes, tornados or other natural disasters; acts of
governmental authority; pandemics; acts of the public enemy or due to terrorism;
war (whether declared or undeclared); riot; civil commotion; insurrection;
malicious damage; strike; and changes in general political or social conditions,
including sabotage, political unrest, change in government, military action or
any escalation thereof.

 

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“Financial Statements” shall have the meaning set forth in Section 4.4(b).

“Financial Statements (Operaciones)” shall have the meaning set forth in
Section 4.4(a)(i).

“Financial Statements (Services and Tasajero)” shall have the meaning set forth
in Section 4.4(a)(ii).

“Financing” shall have the meaning set forth in Section 6.14.

“Governmental Authority” shall mean any government, court, regulatory or
administrative agency, commission or authority or other governmental
instrumentality, federal, state or local, domestic, foreign or multinational.

“Guatemalan GAAP” means generally accepted principles used by professional
accountants in the Republic of Guatemala.

“Hazardous Substance” shall mean any substance to the extent presently listed,
defined, designated or classified as hazardous, toxic or radioactive under any
applicable Environmental Law, including petroleum and any derivative or
by-products thereof.

“Indemnified Claim” shall have the meaning set forth in Section 10.3(g).

“Indemnified Director” or “Indemnified Directors” shall have the meaning set
forth in Section 6.8(b).

“Indemnified Party” shall mean any member of the Seller Group or the Purchaser
Group who or which may seek indemnification under this Agreement.

“Indemnifying Party” shall mean a party against whom indemnification may be
sought under this Agreement.

“Indemnity Reduction Amount” shall have the meaning set forth in
Section 10.4(a).

“Information Memorandum” shall have the meaning set forth in Section 11.1(a).

“International” shall mean TPS San José International, Inc., an exempted company
formed under the Laws of the Cayman Islands.

“IP Rights” shall have the meaning set forth in Section 4.12(a).

“July Financial Statements (Operaciones)” shall have the meaning set forth in
Section 4.4(a)(i).

 

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“July Financial Statements (Services and Tasajero)” shall have the meaning set
forth in Section 4.4(a)(ii).

“Knowledge” with respect to the Seller, as used in Article IV hereof, shall mean
the actual knowledge (without any duty to undertake any investigation concerning
any matter), as of the date of this Agreement, of (i) with respect to the
Operaciones, Victor Urrutia, Operations VP and General Manager, Ana Karina
Mendizabal, Financial Manager and Rafael Navajas, Commercial Manager and
(ii) with respect to Services and Tasajero, Terry Schramm, Assistant Controller
of TECO Guatemala, Inc., and in no event shall Knowledge include any
constructive or imputed knowledge of the Seller or any of its Affiliates
(including the Acquired Entities) or any of their respective directors,
officers, employees, partners, managers, members or other representatives.

“Laws” shall have the meaning set forth in Section 4.8.

“Letter of Credit” shall have the meaning set forth in Section 2.1.

“Liens” shall mean all charges, claims, mortgages, liens, pledges, security
interests or encumbrances.

“Management Financial Statements (Operaciones)” shall have the meaning set forth
in Section 4.4(c).

“Material Adverse Effect” shall mean a material adverse effect on the business,
financial condition, assets, or operations of the Acquired Entities, taken as a
whole, except for any such effect resulting from or arising out of or in
connection with:

(a) the public announcement of this Agreement;

(b) the Transactions or any actions taken pursuant to or in accordance with this
Agreement;

(c) changes in, or events or conditions affecting, any industry or market in
which any of the Acquired Entities operate, provided that such changes do not
disproportionately affect the Acquired Entities in any material respect relative
to other entities operating in such industry or market;

(d) changes in, or events or conditions affecting, Guatemala or the global
economy or capital or financial markets generally, including, changes in
interest rates, the availability of financing or the insolvency of any
government, provided that such changes do not disproportionately affect the
Acquired Entities in any material respect relative to other entities operating
businesses similar to the Acquired Entities;

 

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(e) changes in applicable Law or the interpretations thereof by any Governmental
Authority;

(f) changes in applicable accounting principles;

(g) Force Majeure Events;

(h) currency exchange rates or any fluctuations thereof;

(i) the taking of any action by the Seller or the Acquired Entities with the
prior consent of the Purchaser; or

(j) the failure of the Acquired Entities to meet internal projections or
forecasts or revenue or earnings predictions for any period ending on or after
the date hereof.

Notwithstanding the foregoing clauses (a) through (j), the following shall
constitute Material Adverse Effect:

(i) any casualty loss to the Real Property and/or associated Structures
(collectively, the “Facility Assets”) after the date hereof and prior to the
Closing Date if (x) the restoration of such Facility Assets to a condition
reasonably comparable to their prior condition has not been substantially
completed before the Closing Date, or (y) the cost of restoring such Facility
Assets to a condition reasonably comparable to their prior condition could
reasonably be expected to cost in excess of twenty five percent (25%) of the
Purchase Price; and

(ii) the condemnation of any portion of the Facility Assets if (x) the proceeds
of such condemnation have not been assigned to the Purchaser at or prior to the
Closing, (y) the value of the Facility Assets condemned (including any lost
profits as a result of such condemnation) could be reasonably expected to exceed
the condemnation proceeds assigned to the Purchaser, or (z) the value of the
Facility Assets condemned (including any lost profits as a result of such
condemnation) could reasonably be expected to exceed twenty five percent
(25%) of the Purchase Price.

“Material Contracts” shall have the meaning set forth in Section 4.13(a).

“Offer Notice” shall mean the written notice of C.F. Financeco, Ltd. (or any of
its successors or assigns) electing to purchase the direct or indirect equity
interests of TEMSA or CGESJ in accordance with Section 4(a) of the Option
Agreement.

“Offering Materials and Presentations” shall have the meaning set forth in
Section 11.1(a).

 

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“Operaciones” shall have the meaning set forth in the Recitals.

“Option Agreement” means the Amended and Restated Option Agreement dated as of
January 16, 2006, as further amended to date by and among Power, Palm Import and
Export Corporation, a British Virgin Island company, Services, International,
and C.F. Financeco, Ltd.

“Owned Real Property” shall have the meaning set forth in Section 4.11(a).

“Permits” shall have the meaning set forth in Section 4.8.

“Permitted Liens” shall mean (a) Liens for Taxes not yet due and payable,
(b) Liens of carriers, warehousemen, mechanics, materialmen and repairmen
incurred in the ordinary course of business consistent with past practice and
not yet delinquent, (c) with respect to the Owned Real Property, (i) any
conditions shown by a current, accurate survey, (ii) easements, encroachments,
restrictions, rights of way and any other non-monetary encumbrances which,
individually or collectively, do not (A) make title to the Owned Real Property
unmarketable as defined by applicable title standards, and/or (B) materially
interfere with or otherwise impair the Acquired Entities access to, use of, or
operations from any of the Owned Real Property, (iii) the effect of zoning,
building codes and other similar land use ordinances, codes, and regulations
that apply to real property generally, (iv) leases, subleases, licenses, and
similar rental contracts listed on Section 4.11(b) of the Disclosure Schedule,
and (v) covenants, conditions and restrictions of record, which, individually or
collectively, do not (X) make title to the Owned Real Property unmarketable as
defined by applicable title standards, and/or (Y) materially interfere with or
otherwise impair the Acquired Entities access to, use of, or operations from any
of the Owned Real Property, and (d) Liens reflected on the Financial Statements.

“Person” shall mean an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity, including a
Governmental Authority.

“Post-Closing Taxes” means any Taxes of or payable by any of the Acquired
Entities with respect to a Post-Closing Tax Period.

“Post-Closing Tax Period” means any Tax period (or portion of any Straddle
Period) beginning after the Closing Date.

“Power” shall mean San José Power Holding Company Ltd., an exempted company
formed under the Laws of the Cayman Islands.

“Pre-Closing Taxes” means any Taxes of or payable by any of the Acquired
Entities with respect to a Pre-Closing Tax Period.

“Pre-Closing Tax Period” means any Tax period (or portion of any Straddle
Period) ending on or before the Closing Date.

 

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

“Purchaser” shall have the meaning set forth in the Preamble.

“Purchaser Group” shall have the meaning set forth in Section 10.1.

“Purchaser Tax Act” shall have the meaning set forth in Section 10.1(c).

“Restructuring” means the formation of the Seller and the corporate
reorganization of the ownership structure of the Acquired Companies undertaken
by the Seller and its shareholder prior to the Closing.

“Reverse Termination Fee” shall have the meaning set forth in Section 9.2(b).

“ROFO Expiration” means the earlier of (i) if an Offer Notice has not been
delivered within the time period specified in Section 4(a) of the Option
Agreement, the day after such specified time period, and (ii) if an Offer Notice
has been delivered, the day C.F. Financeco, Ltd.’s (or any of its successors or
assigns) rights to consummate the transaction contemplated in such Offer Notice
have irrevocably expired or otherwise terminated pursuant to Section 4(a) of
Option Agreement.

“Seller” shall have the meaning set forth in the Preamble.

“Seller Group” shall have the meaning set forth in Section 10.2.

“Seller Taxes” shall have the meaning set forth in Section 10.1(d).

“Services” shall have the meaning set forth in the Recitals.

“Straddle Period” means any Tax period that begins before and ends after the
Closing Date.

“Structures” means all structures and all structural, mechanical and other
physical systems that constitute part of the Owned Real Property.

“Subsidiary” or “Subsidiaries” means each Person listed on Section 11.11 of the
Disclosure Schedule.

“Tasajero” shall have the meaning set forth in the Recitals.

“Tax” or “Taxes” shall mean all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including all net income, gross
receipts, capital, sales, use, ad valorem, value added, transfer, franchise,
profits, inventory, capital stock, license, withholding, payroll, employment,
social security, unemployment, excise, severance, stamp,

 

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occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind and all interest, penalties, fines, additions to tax or
additional amounts imposed by any Governmental Authority with respect thereto.

“TECO Marks” means the names and marks “TECO”, “TECO Guatemala” (including any
variations and derivatives thereof) and related marks, and all other trade
names, trademarks and service marks owned by the Seller or any of its Affiliates
(other than the Acquired Entities).

“TEMSA” shall mean Tecnología Marítima, S.A., a sociedad anónima organized under
the Laws of Guatemala.

“Third Party Claim” shall have the meaning set forth in Section 10.3(a).

“Third-Party IP Rights” shall have the meaning set forth in Section 4.12(b)(i).

“Transactions” refers collectively to this Agreement and the transactions
contemplated hereby.

“US GAAP” means generally accepted accounting principles consistently applied in
the United States.

“Walk-Away Date” shall have the meaning set forth in Section 9.1(b)(i).

“Year End Financial Statements (Operaciones)” shall have the meaning set forth
in Section 4.4(a)(i).

“Year-End Financial Statements (Services and Tasajero)” shall have the meaning
set forth in Section 4.4(a)(ii).

Section 11.12 Rules of Interpretation. Unless otherwise expressly provided, the
following rule of interpretation shall apply:

(a) Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is not a Business
Day, the period in question shall end on the next succeeding Business Day.

(b) Number and Gender. Where the context requires, the use of a singular form
herein shall include the plural, the use of the plural shall include the
singular and the use of any gender shall include any and all genders.

 

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(c) Headings. The table of contents and the Article, Section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.

(d) Herein. The words “hereof”, “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.

(e) Including. Whenever the words “include”, “includes” or “including” are used
in this Agreement, they shall be deemed to be followed by the words “without
limitation”.

(f) Schedules and Exhibits Generally. The Schedules and Exhibits attached to
this Agreement shall be construed with and as an integral part of this Agreement
to the same extent as if the same had been set forth verbatim herein.

(g) Disclosure Schedule. The parties acknowledge and agree that: (i) any
disclosure made with reference to a section of the Disclosure Schedule shall be
deemed sufficient for purposes of disclosure in any other section or sections of
the Disclosure Schedule that may require disclosure therein to the extent its
readily apparent that such disclosure is applicable to such Section or Sections;
(ii) the Disclosure Schedule is intended only to qualify and limit the
representations, warranties and covenants of the Seller contained in this
Agreement and shall not be deemed to expand in any way the scope or effect of
any such representations, warranties or covenants; (iii) the disclosures in the
Disclosure Schedule may be over-inclusive, considering the materiality standard
contained in the section of this Agreement relating to the corresponding section
of the Disclosure Schedule and any items or matters disclosed in the Disclosure
Schedule are not intended to set or establish standards of materiality different
from those set forth in the corresponding section of this Agreement; and
(iv) the disclosure of any item or information in the Disclosure Schedule is not
an admission that such item or information (or any non-disclosed item or
information of comparable or greater significance) is material, required to have
been disclosed in the Disclosure Schedule, or is of a nature that would
reasonably be expected to have a Material Adverse Effect. Prior to the Closing,
the Seller shall have the right from time to time to supplement, modify or
update the Disclosure Schedule (each a “Disclosure Schedule Update”) by written
notice to the Purchaser to reflect events occurring after the date hereof which,
if occurring prior to the date hereof, would have been required to be set forth
or described on the Disclosure Schedule. The Seller shall not be deemed to be in
breach of any representation or warranty hereunder and no representation or
warranty of the Seller shall be deemed to be untrue or inaccurate with respect
to the information disclosed in any such Disclosure Schedule Update.
Notwithstanding the preceding sentence, if the Seller makes a Disclosure
Schedule Update and if the Purchaser determines that the event(s) disclosed in
such Disclosure Schedule Update would be reasonably likely to result in Damages
to the Acquired Entities in excess of U.S.$750,000, then the Purchaser shall
have the right exercisable no later than ten (10) Business Days after such
Disclosure Schedule Update is delivered to it to terminate this Agreement in
accordance with Section 9.1(c)(ii).

 

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(h) References to Articles, Sections, Exhibits or Schedules. When a reference is
made in this Agreement to an Article, a Section, Exhibit or Schedule, such
reference shall be to an Article of, a Section of, or an Exhibit or Schedule to,
this Agreement unless otherwise indicated.

(i) Defined Terms. All terms defined in this Agreement shall have the defined
meanings when used in any document made or delivered pursuant hereto unless
otherwise defined therein.

(j) References to a Person. References to a Person are also to its permitted
successors and assigns.

(k) Negotiation and Drafting of Agreement. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement with the benefit of
legal representation and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement or to the extent to which any such party’s counsel participated in the
drafting of any provision hereof or by virtue of the extent to which any such
provision is inconsistent with any prior draft hereof.

Section 11.13 Specific Performance. In the event of any actual or threatened
breach by any party of any of the covenants or agreements in this Agreement, the
party who is or is to be thereby aggrieved shall have the right to seek specific
performance and injunctive relief giving effect to its rights under this
Agreement, (without the necessity of proving actual damages, posting a bond or
any other undertaking) in addition to any other rights and remedies at Law or in
equity, subject to Section 10.7.

Section 11.14 Further Assurances. Each party shall execute and deliver such
certificates and other documents and take such other actions as may reasonably
be requested by the other party in order to consummate or implement the
transactions contemplated hereby.

*        *        *         *        *

 

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

 

RENEWABLE ENERGY INVESTMENTS GUATEMALA LIMITED By:  

/s/ Luis Kafie

Name:  

Luis Kafie

Title:   Director TECO GUATEMALA HOLDINGS II, LLC By:  

/s/ Phil L. Barringer

Name:  

Phil L. Barringer

Title:   President

SIGNATURE PAGE TO OPERACIONES EQUITY PURCHASE AGREEMENT

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GUARANTY

TECO Energy, Inc., a Florida corporation (“Parent”), as primary obligor and not
merely as surety, absolutely, irrevocably, and unconditionally guarantees to the
Purchaser the due and punctual observance, payment, performance, and discharge
of all obligations and liabilities of the Seller pursuant to this Agreement and
any other agreement entered into by the Seller in connection with the
transactions contemplated hereby up to a maximum aggregate amount equal to the
Purchase Price (collectively, the “Guarantied Obligations”); provided however
that Parent’s obligations under this Guaranty shall terminate and be of no force
or effect after the (i) seven (7) year anniversary of the Closing Date in
connection with Sections 10.1(c) and 10.1(d), provided, however, that such
obligations will not terminate with respect to any Indemnified Claim pursuant to
Section 10.1(c) and 10.1(d) as to which the Purchaser shall have, before the
expiration of the seven (7) year anniversary, previously made a claim in writing
to the Seller and such obligations will continue until the resolution thereof or
payment by the Guarantor and (ii) three (3) year anniversary of the Closing Date
in connection with all other Guarantied Obligations, provided that such
obligations will not terminate with respect to any Indemnified Claim pursuant to
such other Guarantied Obligations as to which the Purchaser shall have, before
the expiration of the three (3) year anniversary, previously made a claim in
writing to the Seller and such obligations will continue until the resolution
thereof or payment by the Guarantor. If any Guarantied Obligation is not paid
when due or is not otherwise performed or discharged according to its terms, or
upon any breach or default by the Seller of or under this Agreement or any other
agreement entered into by the Seller in connection with the transactions
contemplated hereby, the Purchaser shall be entitled to proceed directly and at
once against Parent to enforce such Guarantied Obligation and/or to collect and
recover the full amount or any portion of such Guarantied Obligation then due,
without first proceeding against the Seller and without joining the Seller in
any proceeding against Parent. This guarantee is an absolute and unconditional
guarantee of payment and performance and not collection and is not in any way
conditioned or contingent upon any attempt to collect from or enforce
performance by the Seller or upon any other event or condition whatsoever.

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Parent hereby unconditionally waives (i) presentment, promptness, diligence,
acceptance of this Guaranty, protest and any and all notices and (ii) any and
all defenses to the enforceability of the guarantee provided herein.

 

TECO ENERGY, INC. By:  

/s/ Sandra W. Callahan

Name:  

Sandra W. Callahan

Title:   Senior Vice President – Finance and Accounting and Chief Financial
Officer

OPERACIONES PARENT GUARANTY