EXHIBIT 10.46
REIMBURSEMENT AGREEMENT
FOR
LETTER OF GUARANTEE
Date: February 5, 2003
TO: Scotiabank (Cayman Islands) Ltd.(Hereinafter called The "Bank")
(address): X.X. Xxx 000XX, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
FROM: Consolidated Water Co. Ltd (the "Applicant")
(address) X.X. Xxx 0000XX, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
SUBJECT: Letter of Guarantee in the amount of One Million United States
Dollars (US$1,000,000)
Expiring August 4,2003 (the "Guarantee") issued to The Cayman
Islands Government (the "Beneficiary").
IN CONSIDERATION OF the issue by the Bank of the Guarantee in the form
of substantially in the form of the Letter of Guarantee attached hereto in
favour of the Beneficiary, the Applicant agrees as follows:
1. The Applicant will pay to the Bank on demand at its above address for
value on the date of such demand the amount of each demand or other
request for payment (each, a "Demand") made by the Beneficiary or its
successors or assigns under the Guarantee (whether made before, on, or
if in accordance with the law applicable to the Guarantee, after the
expiry date stated in the Guarantee), except that:
(a) if such Demand is made under the Guarantee and payment by the
Bank is made in a currency other than United States dollars
the Applicant will pay the equivalent in United States
dollars, at the Bank's then selling rate of exchange for such
currency in the place in which such Demand is payable or, at
the option of the Bank, will pay to the Bank in such other
currency in a place, form and manner acceptable to the Bank;
and
(b) if a time Demand is made under the Guarantee, the Bank may
notify the Applicant of the amount and maturity date of such
Demand and the Applicant will make such payment without demand
sufficiently in advance of its maturity to enable the Bank to
arrange for cover in same day funds to reach the place where
such Demand is payable no later than the date of the maturity
of such Demand.
2. The Applicant will pay to the Bank on demand:
(a) in respect of Demands paid by the Bank or any correspondent of
the Bank and not reimbursed to the Bank under Section I
hereof, interest on all amounts remaining unpaid under Section
I hereof from time to time at a fluctuating rate of interest
per annum equal to * 1.0% per annum above the rate of interest
determined and adjusted by the Bank from time to time as the
Bank's U.S. Dollar Base Rate for such amount applicable on the
day of demand and, thereafter, on the first day of each
month);
(b) commissions in respect of the Guarantee (so long as the Bank
shall be contingently obligated under the Guarantee) and fees
and charges for issuing guarantees all computed and payable at
such times and at such rates as and in accordance with the
Bank's prevailing practice at the time of determination; and
(c) all expenses which the Bank may pay or incur in connection
with the Guarantee.
[ILLEGIBLE]
3. The obligation of the Applicant to reimburse the Bank in accordance
with Section I shall be absolute, unconditional and irrevocable and
shall not be reduced by any Demand paid or acted upon being invalid,
insufficient, fraudulent or forged or be subject to any defense or be
affected by any right of set off, counter-claim or recoupment which the
Applicant may now of hereafter have against a Beneficiary, the Bank or
any other person for any reason whatsoever including the fact that the
Bank or its correspondents paid a Demand or Demands (if applicable)
aggregating up to the amount of the Guarantee notwithstanding:
(a) any contrary instructions from the Applicant;
(b) the occurrence of any event including, without limitation, the
commencement of legal proceedings to prohibit payment of such
Demand; or
(c) the issuance of any order of any government, agency, governing
body or court whether or not having jurisdiction in the
premises.
Any action, inaction or omission taken or suffered by the Bank or by
any of the Bank's correspondents under or in connection with the
Guarantee or any Demand made thereunder, if in good faith and in
conformity with foreign or Cayman Islands laws, regulations or customs
applicable thereto shall be binding upon the Applicant and shall not
place the Bank or any of its correspondents under any resulting
liability to the Applicant. Without limiting the generality of the
foregoing, the Bank and its correspondents may receive, accept or pay
as complying with the terms of the Guarantee, any Demand thereunder,
otherwise in order which may be signed by, or issued to, the
administrator or any executor of, or the trustee and bankruptcy of, or
the receiver for any property of or other person or entity acting as
the representative or in the place of, the Beneficiary or its
successors or assigns. The Applicant covenants that it will not take
any steps, issue any instructions to the Bank or any of its
correspondents or institute any proceedings intended to derogate from
the right or ability of the Bank or its correspondents to honour and
pay any Demand.
4. All payments by the Applicant shall be made free and clear of and
without deduction for any and all present and future taxes, levies and
withholdings including stamp and documentary taxes, other than taxes
imposed on the net income of the Bank, (collectively "Taxes"). If the
Applicant is required by law to deduct any Taxes from or in respect of
any amount paid or payable hereunder, such amount shall be increased as
necessary so that the Bank receives an amount equal to the sum it would
have received had no such deductions been made and the Applicant shall
pay same to the relevant taxing authority and give to the Bank
acceptable evidence of such payment. The Applicant will indemnify the
Bank for any Taxes paid by the Bank in respect of any amount paid or
payable by the Applicant hereunder. The provisions of this Section
shall survive payment in full hereunder.
5. Upon the happening and continuation of any one or more of the following
events (an "Event of Default");
(a) the non-payment of any of the obligations of the Applicant
under this Agreement or otherwise when due;
(b) the failure of the Applicant to perform or observe any term or
covenant hereof;
(c) the failure of the Applicant to pay its debts as they become
due or the admission in writing by the Applicant of its
inability to pay its debts generally, the institution by or
against the Applicant of proceedings respecting bankruptcy,
insolvency, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, composition of it
or its debts under any laws relating to bankruptcy, insolvency
or reorganization or relief of debtor or the seeking of entry
of an order for relief or the appointment of a receiver,
trustee or other similar official for the Applicant or for any
substantial part of its property or the taking of any
corporate action by the Applicant to authorize any of such
actions;
(d) the occurrence of any of the events with respect to any person
or entity which has guaranteed any obligations of the
Applicant to the Bank;
then the amount of the Bank's contingent liability (as determined by
the Bank) under the Guarantee, as well as any and all other obligations
of the Applicant under this Agreement shall, at the option of the Bank,
become due and payable immediately upon demand to the Applicant.
6. All security now or hereafter held by the Bank for the payment or
discharge of any and all present or future indebtedness and liability
of the Applicant to the Bank and all property of the Applicant now or
hereafter in the possession or control of the Bank for any purpose
including monies on deposit and property held for safekeeping, shall be
held by the Bank as security for the payment of all amounts which may
become payable by the Applicant to the Bank under or in connection with
this Agreement. If at any time the Bank requires collateral (or
additional collateral), the Applicant will, on demand, assign and
deliver to the Bank as security for any and all obligations of the
Applicant now or hereafter existing under this Agreement collateral of
a type and value satisfactory to the Bank or make such cash payment as
the Bank may require.
7. Upon default by the Applicant in payment of any amount due and payable
hereunder the Bank may, without advertisement and without notice to the
Applicant, sell public or private sale or realize in such other manner
as the Bank thinks fit all or any security held by the Bank upon such
terms and conditions as the Bank thinks fit; and any moneys received by
the Bank as proceeds of any such sale or realization, after deduction
of all costs and expenses incurred by the Bank in connection therewith,
shall be applied against any amount payable by the Applicant to the
Bank under this Agreement and on any other indebtedness or liability of
the Applicant to the Bank.
8. The Applicant will indemnify the Bank from and against:
(a) all loss or damage to the Bank arising out of its issuance of,
or any other action taken by the Bank in connection with, the
Guarantee other than loss or damage resulting from its gross
negligence or willful misconduct; and
(b) all costs and expenses (including attorneys' fees and
expenses) of all claims or legal proceedings arising out of
the Bank's issuance of the Guarantee or incident to the
collection of amounts owed by the Applicant hereunder or the
enforcement of the Bank's rights hereunder, including, without
limitation, legal proceedings related to any court order,
injunction, or other process or decree restraining or seeking
to restrain the Bank from paying any amount under a Demand.
9. Upon payment by the Bank of any Demand or the occurrence and during the
continuance of any Event of Default, the Bank is hereby authorized to
set-off and apply any and all deposits (at any time held) and other
indebtedness at any time owing by the Bank to or for the credit of the
account of the Applicant against any and all obligations of the
Applicant now or hereafter existing under this Agreement irrespective
of whether or not the Bank shall have made demand under this Agreement
and despite such deposit, indebtedness or obligation being unmatured or
contingent. The rights of the Bank under this Section 9 are in addition
to other rights and remedies which the Bank may have.
10. If for the purpose of obtaining judgement in a court or tribunal in any
jurisdiction it is necessary to convert an amount due hereunder in any
currency (the "Obligation Currency") to an equivalent amount of another
currency (the "Judgement Currency") such conversion shall be made at
the Rate of Exchange quoted by the The Bank of Nova Scotia in New York,
United States of America at 10:00 a.m. on the business day immediately
prior to the date of judgement (the "Pre-Judgement Date"). As a
separate obligation which shall not be affected by judgement being
obtained for other sums due hereunder, if the Rate of Exchange used to
determine such equivalent amount is different from the Rate of Exchange
prevailing on the date of actual payment of the amount so due, then the
Applicant will pay such additional amounts (if any, but in any event
not a lesser amount) as may be necessary to ensure that the amount of
the Judgement Currency received by the Bank will be sufficient to
permit the Bank to convert such amount of the Judgement Currency to an
amount in the Obligation Currency equal to the amount of the Obligation
Currency owed hereunder on the Pre-Judgement Date.
[ILLEGIBLE]
11. This Agreement shall be binding upon the Applicant, its successors and
assigns and shall ensure to the benefit of the Bank, its successors,
transferees and assigns. Any provision of this Agreement which is void
or unenforceable shall be ineffective in the extent void or
unenforceable and shall be severable from the other provisions hereof
and this Agreement shall be interpreted as if such provision were not
included herein. This Agreement shall be governed by and construed in
accordance with the laws of The Cayman Islands except to the extent
that such laws are inconsistent with the laws under which a Demand
maybe made under the Guarantee.
[ILLEGIBLE]
12. If, with respect to the Guarantee, the expiry date be extended, the
amount be increased or any of the terms and conditions be altered at
the request of the Applicant, all of the terms and conditions of this
Agreement will apply to the Guarantee as amended and remain in full
force and effect without releasing any party hereto.
Consolidated Water Co. Ltd
Witness: /s/ [ILLEGIBLE] /s/ Xxxxxxx X. Xxxxxx
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(AUTHORIZED SIGNATURES)
(IN CASE OF INCORPORATED COMPANIES AND
OTHER ORGANIZATIONS THIS FORM MUST BE
SIGNED BY PROPERLY AUTHORIZED OFFICIALS.
THE COMPANY NAME MUST APPEAR ABOVE THE
SIGNATURES.)
