EXHIBIT 10.38
THIS IRREVOCABLE UNDERTAKING (the "Undertaking") is given on the 7th day of
February, 2003, by:
CONSOLIDATED WATER CO. LTD., a corporation incorporated under the laws of the
Cayman Islands, (hereinafter referred to as the "Borrower")
To:
SCOTIABANK (CAYMAN ISLANDS) LTD., a banking corporation incorporated and
licensed pursuant to the laws of the Cayman Islands (hereinafter referred to as
the "Bank")
WHEREAS:
(a) Pursuant to a loan agreement executed between the Borrower and
the Bank dated the 7th day of February, 2003 (the "Loan
Agreement") the Bank has agreed to make certain loan
facilities available to the Borrower for certain specified
purposes including the financing of the Acquisition;
(b) In consideration of the Bank making available to the Borrower
the financing for the Acquisition the Borrower has agreed to
provide the Bank with various security instruments including
this Undertaking; and
(c) The Borrower has irrevocably agreed, pursuant to this
Undertaking, that upon acquiring Control as defined herein,
the Borrower shall ensure that the Board of Directors take the
actions, and execute the documents, called for herein.
NOW THEREFORE the Borrower provides the following irrevocable undertaking to the
Bank;
SECTION 1
DEFINITIONS AND RULES OF INTERPERTATIONS
1.1 Unless specifically defined herein, capitalized terms used in this
Undertaking shall have the meanings specified in Annex "A" to the Loan
Agreement.
1.2 In addition, wherever used in this Undertaking the following terms have
the meanings opposite them:
"BOARD OF DIRECTORS" means, the board of directors of the Company;
"COMPANY" means, Ocean Conversion (Cayman) Ltd.;
"CONTROL" means, the purchase of the Shares which shall provide the
Borrower with the ability to elect to the Board of Directors, a
majority of such directors;
"DIRECTORS" means, those members of the Board of Directors, which have
been elected to the Board of Directors by the Borrower exercising its
voting rights accordingly;
"GUARANTEE" means, the Guarantee attached hereto as Exhibit "I";
"OPINION" means, a legal opinion issued by the Company's Cayman Islands
legal counsel in usual and customary form, reasonably satisfactory to
the Bank, as to, amongst other things, the validity and enforceability
of the Guarantee;
"SHARES" means, a 100% shareholding in the Company.
SECTION 2
2.1 The Borrower hereby irrevocably and unconditionally undertakes that:
(a) The proceeds of the Acquisition Loan shall be used to purchase
the Shares;
(b) Upon completion of the Acquisition, the Borrower shall have
the ability to exert control over the Company either through
Control of the Board of Directors or through the voting of the
Borrower's Shares;
(c) Once the Shares have been acquired, that the Borrower shall
exercise the franchise attached to such Shares in order to
elect the Directors;
(d) The Board of Directors shall approve the Company obtaining
from the Bank a separate loan to be utilized for the sole
purpose of retiring the existing debt of the Company owed to
the Bank of Xxxxxxxxxxx;
(e) With respect to the loan referred to in sub-paragraph (d)
above, the Company shall accept a loan offered by the Bank
pursuant to the terms set out in the Term Sheet attached
hereto as Exhibit II;
(f) Simultaneously with the Bank providing the Company with the
financing referred to in subparagraph (e) above or as soon
thereafter as possible, the Board of Directors shall procure
that the Company issues the Guarantee and cause the issuance
of the Opinion;
(g) The Company shall remain under the control of the Borrower;
and
(h) It shall not permit to exist any mortgage, charge, lien or any
other form of security interest over the Shares, other than
the security interest contemplated in the Security Documents.
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SECTION 4
DEFAULT
4.1 Failure by: (i) the Borrower; (ii) the Board of Directors; or (iii) the
Company to comply in a timely manner with any term, condition,
requirement or obligation contained in this Undertaking shall
constitute an Event of Default pursuant to Section 17.1(q) of the Loan
Agreement and the Bank shall be entitled to exercise any remedy
available to it under the Loan Agreement, the Security Documents or at
law or equity.
4.2 Failure by the Company to issue in favour of the Bank the Guarantee and
the Opinion within thirty (30) days of the date of execution of the
Loan Agreement shall constitute a breach of this Undertaking and an
Event of Default pursuant to Section 17.1(q) of the Loan Agreement.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
5.1 The Borrower hereby represents and warrants that:
(a) It is a corporation, organized, existing and a good standing
under the laws of the Cayman Islands;
(b) The execution, delivery and performance by the Borrower of
this Undertaking and the obligations contained herein are
within its corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) its
Memorandum or Articles of Association; or (ii) any law or any
contractual restriction binding on or effecting it or its
property, and is enforceable against it in accordance with the
terms of this Undertaking;
(c) No authorization or approval or other action by, or no notice
to or filing with, any Government Authority or other
regulatory body is required for the due execution, delivery
and performance by the Borrower of this Undertaking;
(d) No event has occurred which constitutes, or which with the
giving of notice or the lapse of time or relevant
determination, or any combination thereof, would constitute a
contravention of, or default under, any agreement or
instrument by which it or any of its assets is bound or
effected, and which has, or could be regarded as having, a
Material Adverse Effect on its ability to observe or perform
any of its obligation under this Undertaking;
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(e) No litigation, arbitration or administrative proceeding or
claim which might itself or together with any other such
proceeding or claim have a Material Adverse Effect on its
ability to observe or perform its obligation under this
Undertaking, is presently in progress or pending, or to the
best of the knowledge, information and belief of it,
threatened against it, or any of its assets;
(f) It has not taken any action, nor has any steps been taken by
or against or with reference to it for the winding-up,
disillusioned, bankruptcy or reorganization of it, or for the
appointment of a receiver, trustee or similar officer of it
with respect to any or all of its assets or revenues;
(g) There are no current liabilities or contingent liabilities,
other than those which are owed to the Bank, which would have
a Material Adverse Effect on the Borrower;
(h) The execution and performance of this Undertaking by the
Borrower will not violate any judgement, order decree or
statute; and
(i) That the Shares acquired pursuant to the Acquisition shall
provide the Borrower with Control of the Company.
SECTION 6
TERMINATION OF UNDERTAKING
This Undertaking and the obligations contained herein shall remain in place
until the earlier of: (i) all of the conditions in this Undertaking have been
fulfilled; (ii) all amounts owed to the Bank pursuant to the Loan Agreement have
been repaid in full.
SECTION 7
MISCELLANEOUS
7.1 NO WAIVERS: REMEDIES CUMULATIVE
(a) No failure or delay on the part of the Bank in exercising any
right, power or privilege hereunder or under the Loan
Agreement and other Security Documents and no course of
dealing between the Borrower and the Bank shall operate as a
waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right,
power or privilege.
(b) The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which
the Bank would otherwise have in law.
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7.2 COSTS AND EXPENSES
The Borrower hereby covenants with the Bank to keep the Bank fully and
effectively indemnified against all legal and other costs charges and
expenses from time to time incurred by the Bank in connection with the
enforcement this Undertaking and to pay the same on demand in writing
from the Bank.
7.3 ASSIGNMENT: FUTURE RIGHTS
(a) The Bank shall be entitled to assign its benefit under this
Undertaking or any part thereof to any person.
(b) This Undertaking may not be assigned or transferred, in whole
or in part, by the Borrower without the written consent of the
Bank, which consent the Bank may in its sole discretion refuse
to provide.
7.4 NOTICES
All notices, requests, consents, demands, directions, agreements or other
instruments or communications between the Bank and the Borrower required to be
given hereunder shall be in writing and shall be; (a) sent by private courier
service, next day delivery, or by telefax, or other similar form of rapid
transmission, confirmed by sending (by private courier service, next day
delivery) written confirmation; or (b) personally delivered to the receiving
party or, if not an individual, to an officer or general partner of the
receiving party. All such communications shall be sent or delivered addressed as
follows:
If to the Borrower:
Consolidated Water Co. Ltd,
X.X.Xxx 0000 XX
Xxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx.
Attn: Mr. Xxxxxxx Xxxxxx
Telephone No: 000-000-0000
Fax No: 000-000-0000
If to the Bank:
Scotiabank (Cayman Islands) Ltd.
Xxxxxx Xxxxxx,
Xxxxxxxx Xxxxxx,
X.X.Xxx 000,
Xxxxx Xxxxxx.
Attn: Commercial Banking Manager
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Telephone: 000-000-0000
Fax: 000-000-0000
Any party hereto may, by notice given hereunder, designate any further
or different addresses to which subsequent notices, requests or other
communications shall be sent. All such notices and other
communications shall be effective when received.
7.5 APPLICABLE LAW & JURISDICTION
(a) This Undertaking shall be construed and enforced in accordance
with, and governed by, the laws of the Cayman Islands.
(b) The parties hereto irrevocably submit to the jurisdiction of
the courts of the Cayman Islands.
(c) The submission to the jurisdiction of the courts of the Cayman
Islands shall not (and shall not be construed so as to) limit
the right of the Bank to take proceedings against the Borrower
in any other court of competent jurisdiction, nor shall the
taking of proceedings in any one or more jurisdictions
preclude the taking of proceedings in any other jurisdiction,
whether concurrently or not.
REMAINDER OF THE PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF this Undertaking has been executed on the date first written
above.
CONSOLIDATED WATER CO. LTD.
By: /s/ [ILLEGIBLE]
-----------------------
Authorized Signatory
SCOTIABANK (CAYMAN ISLANDS) LTD.
By: /s/ [ILLEGIBLE]
-----------------------
Authorized Signatory
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EXHIBIT "I"
FORMAT OF GUARANTEE TO BE ISSUED BY
OCEAN CONVERSION (CAYMAN) LTD.
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===============================================================================
GUARANTEE
by
OCEAN CONVERSION (CAYMAN) LTD.
IN FAVOUR OF
SCOTIABANK (CAYMAN ISLANDS) LTD.
Dated the ___ day of___, 2003
===============================================================================
TABLE OF CONTENTS
SECTION 1. DEFINITIONS AND INTERPRETATION ................................................. 2
1.1 General Definitions .......................................................... 2
1.2 Interpretation ............................................................... 3
SECTION 2. GUARANTEE ...................................................................... 3
2.1 Guarantor Guaranteed Obligations ............................................. 3
2.2 Continuing Guarantee ......................................................... 3
2.3 Payment of Guaranteed Obligations ............................................ 4
2.4 No Set-off ................................................................... 4
2.5 Taxes ........................................................................ 4
2.6 Application of Payments ...................................................... 4
SECTION 3. SAVING PROVISIONS .............................................................. 4
3.1 Change in Guaranteed Obligations ............................................. 4
3.2 Waiver of Defenses ........................................................... 5
3.3 Immediate Recourse ........................................................... 5
3.4 Non-Competition .............................................................. 5
3.5 Bankruptcy or Liquidation of the Borrower .................................... 6
3.6 Appropriation of Moneys ...................................................... 6
3.7 Reinstatement ................................................................ 6
3.8 Additional Security .......................................................... 6
SECTION 4. INDEMNITY ...................................................................... 6
4.1 Indemnity .................................................................... 6
SECTION 5. REPRESENTATIONS AND WARRANTIES ................................................. 7
5.1 Representations and Warranties ............................................... 7
5.2 Bank's Reliance .............................................................. 7
5.3 Rights and Remedies not Limited .............................................. 7
SECTION 6. COVENANTS ...................................................................... 8
6.1 Guarantor Covenants .......................................................... 8
SECTION 7. MISCELLANEOUS .................................................................. 8
7.1 Notices ...................................................................... 8
7.2 English Language ............................................................. 9
7.3 No Waiver, Remedies Cumulative ............................................... 9
7.4 Governing Law and Jurisdiction ............................................... 9
7.5 Submission ................................................................... 9
7.6 Judgments and Immunity ....................................................... 10
7.7 Benefit of Guarantee ......................................................... 11
7.8 Expenses ..................................................................... 11
7.9 Amendment or Waiver .......................................................... 11
7.10 Counterparts ................................................................ 11
7.11 Set-off ..................................................................... 11
7.12 Currency Indemnity .......................................................... 11
THIS GUARANTEE ("GUARANTEE"), dated the ___ day of _____, 2003, is
made as a deed by;
(1) OCEAN CONVERSION (CAYMAN) LTD., a company organized and existing under
the laws of the Cayman Islands ("GUARANTOR");
in favour of
(2) SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").
Defined terms used herein shall have the meanings specified in Section 1.
WHEREAS:
(A) Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").
(B) It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.
(C) The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.
(D) To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.
(E) The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.
NOW, THEREFORE, the parties agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION.
1.1 General Definitions.
(a) Unless the context otherwise requires, capitalized terms
used in this Guarantee without definition have the meanings specified in Annex A
to the Loan Agreement.
(b) In addition, wherever used in this Guarantee, unless the
context otherwise requires, the following terms have the meaning opposite it:
"FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.
"GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Loan Agreement and the other
Financing Documents, and in any capacity, irrespective of whether such
liabilities and obligations:
(i) are present or future;
(ii) are actual, contingent or
otherwise;
(iii) are at any time ascertained or
unascertained;
(iv) are owed or incurred by or on
account of the Borrower alone, or
severally or jointly with any other
person;
(v) are owed or incurred as principal,
interest, fees, charges, taxes,
duties or other imports, damages
(whether for breach of contract or
tort or incurred on any other
ground), losses, costs or expenses,
or on any other account; or
(vi) comprise any combination of the
above.
provided that the Guaranteed Obligations shall be limited to the lesser
of: (i) the total amount outstanding under the Financing Documents; and (ii) the
maximum amount of indebtedness and liability of the Borrower that the Guarantor
is able to guarantee and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.
1.2 Interpretation.
The rules of interpretation set forth in Section 18.13 of the
Loan Agreement shall apply to this Guarantee.
SECTION 2. GUARANTEE.
2.1 Guarantor Guaranteed Obligations. The Guarantor irrevocably and
absolutely, as principal obligor and not merely as surety, guarantees and
promises to pay, upon demand of the Bank, the Guaranteed Obligations not paid or
performed by the Borrower when due in the same manner in all respects as the
Guaranteed Obligations are required to be paid or performed by the Borrower.
2.2 Continuing Guarantee. (a) The guarantee and the indemnity of the
Guarantor contained in this Guarantee is a continuing obligation of the
Guarantor (and all liabilities to which it applies or may apply under the terms
of this Guarantee shall be conclusively presumed to have been created in
reliance on such guarantee), notwithstanding any settlement of account or the
occurrence of any other thing, and shall remain in full force and effect until:
(i) the Guaranteed Obligations have been fully paid or
performed strictly in accordance with the provisions
of the Financing Documents, regardless of any
intermediate payment or discharge in whole or in
part; and
(ii) all of the obligations of the Guarantor under this
Guarantee have been fully performed in accordance
with this Guarantee.
(b) The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall be additional, separate and independent obligations of the
Guarantor.
(c) The guarantee and the indemnity of the Guarantor contained in
this Guarantee shall survive the termination of the Financing Documents.
(d) The Guarantor's obligations under this Guarantee can be
discharged only by performance and then only to the extent of such performance.
Those obligations are not subject to any prior notice to, demand upon or action
against the Borrower or any other Person or to any prior notice to the Guarantor
of any default by the Borrower.
2.3 Payment of Guaranteed Obligations. The Guarantor shall make payment
of the Guaranteed Obligations under Section 2.1 (Guarantor Guaranteed
Obligations) as provided in the relevant Financing Documents.
2.4 No Set-off. All payments which the Guarantor is required to make
under this Guarantee shall be without any set-off, counterclaim or condition.
2.5 Taxes.
(a) The Guarantor shall pay or cause to be paid all present and
future taxes, duties, fees and other charges of whatsoever nature (excluding
income taxes), if any, now or in the future levied or imposed by any
Governmental Authority or any similar body in the jurisdiction in which the
Guarantor is located or out of which a payment is made on or in connection with
the payment of any and all amounts due under this Guarantee.
(b) All payments due under this Guarantee shall be made without
deduction for or on account of any such taxes, duties, fees or other charges.
(c) If the Guarantor is prevented by operation of law or otherwise
from making or causing to be made such payments without deduction, the amounts
due under this Guarantee shall be increased to such amount as may be necessary
so that the Bank receives the full amount it would have received (taking into
account any such taxes, duties, fees or other charges payable on amounts payable
by the Guarantor under this subsection) had such payments been made without such
deduction.
(d) If subsection (c) above applies and the Bank so requires, the
Guarantor shall deliver to the Bank official tax receipts evidencing payment (or
certified copies of them) within thirty (30) days of the date of payment.
2.6 Application of Payments. The Bank may apply any amounts received by
it or recovered under:
(a) any Security Document; and
(b) any other document or agreement which is a security for any of
the Guaranteed Obligations and any other moneys,
in such manner as it determines in its absolute discretion in accordance with
the Financing Documents.
SECTION 3. SAVING PROVISIONS.
3.1 Change in Guaranteed Obligations. The obligations of the Guarantor
under this Guarantee shall extend to any change in the Guaranteed Obligations:
(a) as a result of any amendment, supplement, renewal or
replacement of any Financing Document or the occurrence of any other thing; and
(b) regardless of whether the Guarantor is aware of, has consented
to or is given notice of any alteration, variation, amendment, supplement,
renewal or replacement of any Financing Document or the occurrence of such other
thing.
3.2 Waiver of Defenses. Except for payment or performance in full of
the Guaranteed Obligations, the payment in full by the Guarantor of its
obligations under this Guarantee or otherwise as provided in this Guarantee, the
Guarantor's obligations under this Guarantee shall not be discharged, impaired
or otherwise adversely affected by any act, omission, circumstance, matter or
thing which, but for this provision, would reduce, release or prejudice any of
its obligations under this Guarantee or which might otherwise constitute a legal
or equitable discharge or defense of a surety or a guarantor, including (whether
or not known to the Guarantor or the Borrower):
(a) any time, waiver, composition, forbearance or concession given
to the Borrower or any other person;
(b) any assertion of, or failure to assert, or delay in asserting,
any right, power or remedy against the Borrower or any other person, or in
respect of any security for the Loans;
(c) any amplification, amendment (however fundamental), variation
or replacement of the provisions of any Financing Document or of any other
agreement or security between the Bank and the Borrower;
(d) any failure of the Borrower or the Guarantor to comply with
any requirement of any law, regulation or order,
(e) the dissolution, liquidation, reorganization or other
alteration of the legal status or structure of the Borrower or the Guarantor;
(f) any purported or actual assignment, transfer, novation or
disposal of, or granting any participation in, any of the Loans to any other
party;
(g) any Financing Document being in whole or in part illegal,
void, voidable, avoided, invalid, unenforceable or otherwise of limited force
and effect; or
(h) any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
in respect of the Guaranteed Obligations or any of them.
3.3 Immediate Recourse. The Guarantor waives any right it may have of
first requiring the Bank (or any trustee, agent or other person acting on its
behalf) to proceed against or enforce any other rights or security or claim
payment from any person before claiming from the Guarantor under this Guarantee.
3.4 Non-Competition. (a) If any amounts have become payable or have
been paid by the Guarantor under this Guarantee, the Guarantor shall not, in
respect of such moneys, seek to enforce repayment, obtain the benefit of any
security or exercise any other rights or legal remedies of any kind which may
accrue to the Guarantor against the Borrower, whether by way of subrogation,
offset, counterclaim or otherwise, in respect of the amount so payable or so
paid (or in respect of any other moneys for the time being due to the Guarantor
from the Borrower), if and for so long as any moneys remain outstanding to the
Bank under the
Financing Documents. The Guarantor shall hold in trust for, and forthwith pay or
transfer to, the Bank any payment or distribution or benefit of security
received by it contrary to this Section 3.4(a).
(b) Upon the payment and satisfaction in full of all Guaranteed
Obligations and provided that no amounts (actual or contingent) remain
outstanding to the Bank under the Loan Agreement, the Guarantor, if it has made
a payment under this Guarantee, shall be entitled to exercise its rights of
subrogation to its proportion of all relevant rights of the Bank against the
Borrower pursuant to the Financing Documents. The Bank shall promptly execute,
at the expense of the Guarantor, an assignment and such other documents in such
form as the Guarantor may reasonably request to transfer such proportion of such
rights of the Bank against the Borrower to the Guarantor as are required for the
Guarantor to obtain the full benefit of such subrogation. The Guarantor shall
enforce such rights directly against the Borrower in its own name and not in the
name of the Bank.
3.5 Bankruptcy or Liquidation of the Borrower. If the Borrower becomes
bankrupt, enters into a composition or makes any arrangement with its creditors,
or is dissolved, liquidated or wound up, the Guarantor shall not claim, rank,
prove or vote as a creditor of the Borrower or its estate in competition with
the Bank in respect of any amounts owing to the Guarantor by the Borrower on any
account whatsoever, but instead shall give the Bank the benefit of any such
proof and of all amounts to be received in respect of that proof until all
Guaranteed Obligations have been fully paid.
3.6 Appropriation of Moneys. Until all of the Guaranteed Obligations
have been irrevocably paid in full, the Bank (or any trustee, agent or other
person acting on its behalf) may refrain from enforcing any other moneys,
security or rights held or received by the Bank (or such trustee, agent or other
person) in respect of the Guaranteed Obligations, or apply and enforce the same
in such manner and order as it sees fit.
3.7 Reinstatement. (a) Where any discharge (whether in respect of the
obligations of the Borrower, the Guarantor or any security for those obligations
or otherwise) is made in whole or in part or any arrangement is made on the
faith of any payment, security or other disposition which is avoided or must be
restored on insolvency, liquidation or otherwise without limitation, the
liability of the Guarantor under this Guarantee shall continue or shall be
reinstated (as the case may be) as if such discharge or arrangement had not
occurred.
(b) The Bank (or any trustee, agent or other person acting on its
behalf) may concede or compromise any claim that any payment, security or other
disposition is liable to avoidance or restoration.
3.8 Additional Security. This Guarantee is in addition to and is not in
any way prejudiced by any collateral or other security now or hereafter held by
the Bank, nor shall such collateral or other security held by the Bank or the
liability of any person for all or any part of the Guaranteed Obligations be in
any manner prejudiced or affected by this Guarantee.
SECTION 4. INDEMNITY.
4.1 Indemnity. The Guarantor agrees as a primary obligor and not merely
as a surety, to indemnify and hold harmless the Bank from and against any loss,
cost or damage incurred by the Bank as a result of any obligation of the
Guarantor hereunder as guarantor being or becoming void, voidable, unenforceable
or otherwise ineffective against the Guarantor for any
reason whatsoever (whether or not known to the Bank or any other Person), the
amount of such loss being limited to the amount that the Bank would have been
entitled to recover from the Guarantor as guarantor pursuant to this Guarantee
had such obligations not become void, voidable, unenforceable or otherwise
ineffective against the Guarantor.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
5.1 Representations and Warranties. The Guarantor represents and
warrants to the Bank that as of the date of this Guarantee and on each Draw down
Date:
(a) it is a company duly incorporated under the laws of the
jurisdiction of its incorporation and has the corporate power to enter into and
deliver and to perform its obligations under this Guarantee;
(b) the execution and delivery by it of this Guarantee and the
performance by it of its obligations hereunder have been duly authorized;
(c) it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;
(d) neither the execution and delivery by it of this Guarantee nor
the performance by it of its obligations under this Guarantee:
(i) conflicts with or will conflict with or result in any
breach of any of the terms, conditions or provisions
of, or violate or constitute a default or require any
consent under, any indenture, mortgage, agreement or
other instrument or arrangement to which it is a
party or which binds or purports to be binding upon
it; or
(ii) violates or will violate any judgment, decree or
order or any statute, rule or regulation or any of
the terms or provisions of its Charter;
(e) all authorizations required for the execution and delivery of
this Guarantee by it and the performance by it of its obligations hereunder have
been duly obtained or granted and are in full force and effect;
(f) it has not requested or taken any security from the Borrower
for any obligation (whether present or future, actual or contingent) of the
Borrower to it; and
(g) the representations and warranties set out in this Section 5.1
(Representations and Warranties) will survive the execution of each Financing
Document and each Disbursement under the Financing Documents.
5.2 Bank's Reliance. The Guarantor acknowledges that it makes the
representations in Section 5.1 (Representations and Warranties) with the
intention of inducing the Bank to enter into this Guarantee and the Financing
Documents and that the Bank enters into this Guarantee and the Financing
Documents on the basis of, and in full reliance on, each of such
representations.
5.3 Rights and Remedies not Limited. The Bank's rights and remedies in
relation to any misrepresentation or breach of warranty on the part of the
Guarantor are not prejudiced:
(a) by any investigation by or on behalf of the Bank into the
affairs of the Guarantor;
(b) by the execution or the performance of this Guarantee; or
(c) by any other act or thing which may be done by or on behalf of
the Bank in connection with this Guarantee and which might, apart from this
Section, prejudice such rights or remedies.
SECTION 6. COVENANTS.
6.1 Guarantor Covenants. The Guarantor shall:
(a) when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank under this
Guarantee including, but not limited to, the execution of any document or
agreement;
(b) obtain, maintain and renew when necessary all authorizations
required under any law or document or agreement;
(i) to enable it to perform its obligations under this
Guarantee; or
(ii) for the validity or enforceability of the guarantee;
(c) not take any action which may impair the ability of the
Borrower to observe and perform all of its covenants, agreements and obligations
under or pursuant to the Financing Documents;
(d) take such action as may be necessary or as the Bank may
reasonably request in order to:
(i) comply with its obligations under this Guarantee; and
(ii) cause the Borrower to the extent possible to take
such corporate action as may be necessary to comply
with its respective obligations under the Financing
Documents;
(e) the Guarantor shall not take any action which would cause any
of the representations made in Section 5.1 (Representations and Warranties) to
be untrue at any time during the continuation of this Guarantee.
SECTION 7. MISCELLANEOUS.
7.1 Notices.
(a) All notices, requests, approvals, consents and other
communications provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, by facsimile transmission, provided that
any matter transmitted by the Guarantor by facsimile (i) shall be promptly
confirmed by a telephone call to the recipient at the number specified on the
applicable signature page hereof, and (ii) shall be followed promptly by a hard
copy original thereof by express courier) and faxed or delivered, to the address
or facsimile number
specified for notices on the applicable signature page hereof or to such other
address as shall be designated by such party in a written notice to the other
parties hereto.
(b) All such notices, requests, approvals, consents and
communications (i) sent by express courier will be effective upon delivery to or
refusal to accept delivery by the addressee, and (ii) transmitted by facsimile
will be effective when sent and facsimile confirmation received; except that all
notices and other communications to any Agent shall not be effective until
actually received.
(c) The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall not have any liability to the
Guarantor or other Person on account of any action taken or not taken by the
Bank in reliance upon such telephonic or facsimile notice.
(d) All notices, requests and other communications hereunder and
under the other Financing Documents shall be in the English language.
7.2 English Language. This Guarantee and all other Financing Documents
shall be in the English language. Except as otherwise agreed by the parties
hereto, all documents, certificates, reports or notices to be delivered or
communications to be given or made by any party hereto pursuant to the terms of
this Guarantee or any other Financing Document shall be in the English language.
7.3 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Bank or the holder of any Note in exercising any right, power or privilege
hereunder or under any other Financing Document and no course of dealing between
the Guarantor and the Bank or the holder of any Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Financing Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. No notice to or demand on the Guarantor in any case
shall entitle the Guarantor to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the Bank or the
holder of any Note to take any other or further action in any circumstances
without notice or demand. All remedies, either under this Guarantee or any other
Financing Document or pursuant to any applicable Law or otherwise afforded to
the Bank shall be cumulative and not alternative.
7.4 Governing Law and Jurisdiction. THIS GUARANTEE IS GOVERNED AND
CONSTRUED IN ACCORDACE WITH THE LAW OF THE CAYMAN ISLANDS.
7.5 Submission.
(a) For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of the Cayman Islands are to have
jurisdiction to settle any claims or disputes arising under, out of or in
connection with this Guarantee (including without limitation any claim or
dispute relating to the validity, interpretation, performance, termination or
enforcement of this Guarantee) and that accordingly any suit, action or
proceedings in that respect (together in this Section 7 referred to as
"PROCEEDINGS") may be brought in such courts.
(b) The Guarantor irrevocably waives and agrees not to raise any
objection which it may have now or hereafter to the laying of the venue of any
Proceedings in the courts of the Cayman Islands and any claim that any such
Proceedings have been brought in an inconvenient or inappropriate forum.
(c) The Guarantor irrevocably agrees not to take Proceedings in
any court of competent jurisdiction other than the courts of the Cayman Islands,
save with respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take Proceedings against the Guarantor in
any other court of competent jurisdiction, nor shall the taking of Proceedings
in one or more jurisdictions preclude the taking of Proceedings in any other
jurisdiction, whether concurrently or not.
7.6 Judgments and Immunity.
(a) The Guarantor recognizes and acknowledges that this Guarantee
constitutes a commercial transaction and accordingly it acknowledges and agrees
that it is not entitled to plead, and hereby waives to the fullest extent
permitted by law any right to claim, sovereign immunity for any purpose
whatsoever, including, but not limited to, any right to plead sovereign immunity
in respect of any Proceedings pursuant to this Guarantee.
(b) The Guarantor consents generally, in respect of any
Proceedings pursuant to this Guarantee for the purpose of enforcing any order,
judgment or award, to the giving of any relief or the issuing of any process in
connection with such order, judgment or award including, without limitation, the
making, enforcement or execution against any property of any order, judgment or
award and to the extent that the Guarantor may be entitled in any jurisdiction
to claim for itself or its property immunity in respect of its obligations under
this Guarantee from any suit, execution, attachment (whether in aid of
execution, before judgment or otherwise) or legal process or to the extent that
in any jurisdiction there may be attributed to itself or its property such
immunity, the Guarantor agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.
(c) The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a "JUDGMENT"), that;
(i) the Judgment shall be conclusive and binding upon it;
(ii) it shall be bound by and recognize the Judgment in
any jurisdiction;
(iii) to the extent permitted by law, it shall not claim,
invoke on its behalf or for its benefit any right it
may have under the laws of the Cayman Islands, or any
other state or jurisdiction, to prevent, delay,
hinder, nullify or in any other way obstruct the
enforcement or execution of the Judgment; and
(iv) to the extent permitted by law, it shall not, and
shall irrevocably waive any right to, challenge the
Judgment on any ground or the enforcement or
execution of the Judgment in any jurisdiction (other
than by way of appeal in the original jurisdiction).
7.7 Benefit of Guarantee. This Guarantee shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto. The Guarantor may not assign or
otherwise transfer any of its rights under this Guarantee or any of the other
Financing Documents. The benefit of this Guarantee may be freely and
unconditionally assigned, transferred or otherwise disposed of, in whole or in
part, by the Bank to any other person, corporate or otherwise, to whom the Bank
has assigned all or part of its rights under the Loan Agreement.
7.8 Expenses. The Guarantor shall be liable to pay to the Bank the
costs and expenses incurred by the Bank in relation to the enforcement or
protection or attempted enforcement or protection of its rights under this
Guarantee, including legal and other professional consultants' fees on a full
indemnity basis.
7.9 Amendment or Waiver. No provision of this Guarantee may be amended,
supplemented, modified or waived, except by a written instrument signed by the
Bank and the Guarantor.
7.10 Counterparts. This Guarantee may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
7.11 Set-off. The Guarantor authorizes the Bank or any of its
subsidiaries and affiliates (which shall not be obliged to exercise this right)
to apply any credit balance to which the Guarantor is entitled on any account of
the Guarantor with the Bank or any of its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank is
authorized to purchase with the monies standing to the credit of any such
account such other currencies as may be necessary to effect such application.
7.12 Currency Indemnity. If any sum due under this Guarantee or any
order or judgment given or made in relation to this Guarantee has to be
converted from the currency (the "FIRST CURRENCY") in which the same is payable
under this Guarantee or under such order or judgment into another currency (the
"SECOND CURRENCY") for the purpose of (a) making or filing a claim or proof
against the Guarantor, (b) obtaining an order or judgment in any court or other
tribunal or (c) enforcing any order or judgment given or made in relation to
this Guarantee, the Guarantor shall indemnify and hold harmless the Bank from
and against any loss it suffers or incurs as a result of any discrepancy between
(i) the rate of exchange used for such purpose to convert the sum in question
from the first currency into the second currency, and (ii) the rate or rates of
exchange at which the Bank may in the ordinary course of business purchase the
first currency with the second currency upon receipt of a sum paid to it in
satisfaction, in whole or in part, of any such order, judgment, claim or proof.
* *
IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
hereto and is delivered on the date stated at the beginning of this Guarantee.
OCEAN CONVERSION (CAYMAN) LTD.
By: _________________________________
Name:
Title:
Notice Address:
Address:
X.X. Xxx 0000 XX
Xxxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx,
Attention:
Telephone No.: 000 000-0000
Telecopier No. 000 000-0000
SCOTIABANK (CAYMAN)LTD.
By: _________________________________
Name: Xx. Xxxxx Xxxx
Title: Commercial Banking Manager
Notice Address:
Address:
Scotiabank (Cayman Islands) Ltd.
Scotia Centre
Xxxxxxxx Xxxxxx
X.X. Xxx 000
Xxxxx Xxxxxx
Attention: Commercial Banking Manager
Telephone No.: 000 000-0000
Telecopier No. 000 000-0000
EXHIBIT "II"
TERM SHEET FOR FINANCING OF
OCEAN CONVERSION (CAYMAN) LTD.
9
[LOGO OF SCOTIABANK]
SCOTIABANK (CAYMAN ISLANDS) LTD.
Scotia Centre. Xxxxxxxx Xxxxxx, X.X. Xxx 000XX, Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Tel: (000) 000-0000 Fax: (000) 000-0000
February 4, 2003
"PRIVATE & CONFIDENTIAL"
Ocean Conversion (Cayman) Ltd.
X.X. Xxx 00000 XXX
Xxxxx Xxxxxx
Xxxxxxxxx: Xxxxxxxxx X.XxXxxxxxx
Dear Sirs,
We are pleased to confirm that, subject to your acceptance, Scotiabank
(Cayman Islands) Ltd. (the "Bank") will make available to Ocean
Conversion (Cayman) Ltd. (the "Borrower") the following credit facility
on the Terms and Conditions set out below and in Schedule "A" attached
hereto (collectively called the "Commitment Letter").
CREDIT AMOUNT: US$2,400,000.00
TYPE: Non-Revolving
BOOKING POINT: Scotiabank (Cayman Islands) Ltd., Xxxxxx Town,
Grand Cayman or other Branch or Affiliate of The Bank
of Nova Scotia designated by the Bank.
PURPOSE: To payout existing Term Credit at The Bank of N.T.
Xxxxxxxxxxx & Son used to upgrade and replace
existing equipment.
AVAILMENT: Subject to satisfaction of all Terms and Conditions,
the Borrower may avail the credit by way of a direct
advance evidenced by a Demand Promissory Note.
INTEREST RATE: The Bank of Nova Scotia's 90 day London Inter Bank
Offer Rate (LIBOR) from time to time plus 1.5% per
annum with interest, calculated daily and payable
quarterly.
DRAWDOWN: The loan is to be fully drawn down by March 31, 2003.
REPAYMENT: The advance is repayable in 9 equal semi-annual
installments of principal (US$240,000), commencing
June 30, 2003, with a final payment of US$240,000/the
balance of principal and interest then outstanding
due December 31, 2007.
Initials /s/ [ILLEGIBLE]
---------------
OCEAN CONVERSION (CAYMAN) LTD.
FEBRUARY 2003
PREPAYMENT: Provided 5 days prior written notice has been given
to the Bank, prepayment in multiples of US$100,000
minimum, is permitted without penalty, on any
quarterly interest payment date. Prepayments are to
be applied against principal in the inverse order of
maturity.
GENERAL SECURITY, TERMS AND CONDITIONS APPLICABLE TO ALL CREDITS
GENERAL SECURITY
The following security, evidenced by documents in form satisfactory to
the Bank and registered or recorded as required by the Bank, is to be
provided prior to any advance being made available under the credit:
- All Monies Demand Debenture providing a first fixed and floating
Charge over all assets of the Borrower stamped to secure
US$2,400,000.
- Assignment of All Perils Insurance (including Hurricane &
Windstorm) over the Borrower's plant and equipment at all times,
with Scotiabank (Cayman Islands) Ltd. noted on the policy as loss
payee.
- Guarantee of Consolidated Water Co. Ltd. in the amount of
US$2,400,000 (with corporate seals and resolutions as
applicable).
CONDITIONS PRECEDENT:
Prior to any advances or availment, the following information is to be
provided and found acceptable to the Bank:
- Copies of the water supply contract/licenses between the Borrower
and Consolidated Water Co. Ltd. and Water Authority-Cayman are to
be provided and found acceptable to the Bank.
GENERAL CONDITIONS:
Until all debts and liabilities under the credit(s) have been
discharged in full, the following conditions will apply:
1. All Bank accounts and banking services are to be maintained with
the designated office of the Bank.
2. All costs and fees relating to the preparation and registration of
the security documentation, are for the account of the Borrower.
Initials /s/ [ILLEGIBLE]
---------------
2
OCEAN CONVERSION (CAYMAN) LTD.
FEBRUARY 2003
3. The facility shall be governed by Standard Events of Default for
transactions of this nature.
4. Without the Bank's prior written consent, which consent shall not
be reasonably withheld, the Borrower shall not:
a) Enter into a merger, acquire, or change its line of business
b) Enter into any guarantees or other contingent liabilities,
or further encumber its assets.
c) Make any advances to shareholders and/or affiliates.
d) Incur any capital expenditures in excess of US$500,000.00 in
any one year (The US$3.2MM plant expansion in Fiscal 2002 is
acknowledged).
e) Incur any additional Bank debt.
5. Ratio of Bank Debt/EBITDA* is not to exceed 2.5:1 at any time.
6. Debt Service Coverage Ratio** shall be maintained at a minimum of
1.2:1.
*"EBITDA" means, for any Fiscal Year, the Net Income of the
Borrower for such period plus; (a) to the extent deducted in
determining such Net Income for such period, the aggregate amount
of, (i) interest expense (excluding amortization of debt expense
incurred in connection with the Loans hereunder), (ii) Taxes,
(iii) depreciation, (iv) amortization and other similar non-cash
charges, and (v) any extraordinary or other non-recurring
non-cash loss minus; (b) any extraordinary or other non-recurring
gain, confirmed by the Financial Statements of the Borrower.
** "DEBT SERVICE COVERAGE RATIO" means, for any period, a
fraction, the numerator of which is; (a) the total revenues of
the Borrower, but excluding all non-operating and extraordinary
revenues, less; (b) the aggregate of costs of the Borrower
comprising, (i) licence fees, (ii) costs of sales, (iii) overhead
expenses, (iv) insurance costs, (v) taxes, and (vi) all other
cash operating costs (but excluding financing costs), and of
which the denominator is the aggregate of, i) scheduled principal
and interest payments on the Loans, ii) payments under leases for
equipment or other property leased in connection with the
ownership and operation of the business of the Borrower, and iii)
any other payments in respect of any other Indebtedness of the
Borrower.
Initials /s/ [ILLEGIBLE]
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3
OCEAN CONVERSION (CAYMAN) LTD.
FEBRUARY 2003
GENERAL BORROWER REPORTING CONDITIONS
Until all debts and liabilities under the credit(s) have been
discharged in full, the Borrower will provide the Bank with the
following:
1. Audited Annual Financial Statements of the Borrower and Guarantor
is to be provided to the Bank within 120 days of year-end.
2. Quarterly in-house financial statements of the Borrower to be
provided to the Bank within 45 days of each quarter end.
3. The facilities shall be subject to periodic and/or annual review by
the Bank with the next annual review to be conducted upon receipt
of the reporting noted above or by June 30th latest. The next
annual review is scheduled for June 30th 2003.
FEES: An Annual Renewal Fee of US$1,000 is payable annually upon the
Bank's confirmation that the facilities have been renewed for a further
one year period.
APPLICABLE LAW: This Commitment Letter and the Credit Facility noted
herein are to be governed and construed in accordance with the laws of
The Cayman Islands.
If the Terms and Conditions set out in this letter and the attached
Schedule "A" are acceptable to you, please sign the enclosed copy of
this letter in the space indicated below, initial the bottom of each
accompanying page, and return a copy of this letter to the Bank no
later than the close of business on february 14, 2003. If your
acceptance is not received by this date, this offer shall lapse.
Yours truly,
/s/ X.X.Xxxxx /s/ Xxxxx Xxxx
------------- --------------
X.X.Xxxxx Xxxxx Xxxx
Xxxxxx Account Manager Commercial Banking Manager
Initials /s/ [ILLEGIBLE]
---------------
4
OCEAN CONVERSION (CAYMAN) LTD.
FEBRUARY 2003
The Terms and Conditions set out above are acknowledged and accepted.
OCEAN CONVERSION (CAYMAN) LTD
/s/ Xxxxxxxxx XxXxxxxxx
_________________ ----------------------------------
Date By: Name & Title Director
Xxxxxxxxx XxXxxxxxx
_________________ __________________________________
Date By: Name & Title
GUARANTOR:
Consolidated Water Co. Ltd.
/s/ X.X. Paricer
________________ ----------------------------------
Date By: Name & Title
X.X. PARICER, DIRECTOR
________________ __________________________________
Date By: Name & Title
Initials /s/ [ILLEGIBLE]
---------------
5
SCHEDULE A
ADDITIONAL TERMS AND CONDITIONS
APPLICABLE TO ALL CREDITS
Calculation and Payment of Interest
1. Interest on loans/advances made in U.S. dollars will be calculated on a
daily basis and payable monthly on the 22nd day of each month, (unless
otherwise stipulated by the Bank), interest shall be payable not in
advance on the basis of a 360-day year for the actual number of days
elapsed both before and after demand of payment or default and/or
judgment. The rate of interest based on a 360-day year is equivalent to
a rate based on a calendar year of 365 days of 365/360 times the rate
of interest that applies to the U.S. dollar loans/advances.
Interest on loans/advances made in Cayman Islands dollars will be
calculated on a daily basis and payable monthly on the 22nd day of each
month, (unless otherwise stipulated by the Bank). Interest shall be
payable not in advance on the basis of a 365-day year for the actual
number of days elapsed both before and after demand of payment or
default and/or judgment.
Interest on Overdue Interest and Principal
2. Interest on overdue interest and/or principal shall be calculated at a
rate per annum equal to the interest rate on the loans/advances in
respect of which interest and/or principal is overdue plus an
additional 2% (two percentage points) per annum, but shall be
compounded monthly and be payable on demand, both before and after
demand and judgment.
Indemnity Provision
3. Applicable to (i) Revolving Term Credits with terms in excess of one
year (ii) any credit where the right to draw down or obtain advances
exceeds one year, (iii) all U.S. dollar credits. If the introduction
of, or any change in, or in the interpretation of, or any change in its
application to the Borrower of, any law or regulation, or compliance
with any guideline from any central bank or other governmental
authority (whether or not having the force of law) has the effect of
increasing the cost to the Bank of performing its obligations hereunder
or otherwise reducing its effective return hereunder or on its capital
allocated in support of the credit(s), then upon demand from time to
time the Borrower shall compensate the Bank for such cost or reduction
pursuant to a certificate reasonably prepared by the Bank.
(a) Prepayment without fee
In the event of the Borrower becoming liable for such costs,
the Borrower shall have the right to cancel without fee all or
any unutilized portion of the affected credit (other than any
portion in respect of which the Borrower has requested
utilization of the credit in which case cancellation may be
effected upon indemnification of the Bank for any costs
incurred by the Bank thereby), and to prepay, without fee the
outstanding principal balance thereunder other than the face
amount of any document of instrument issued or accepted by the
Bank for the account of the Borrower, such as a Letter of
Credit a Guarantee or a Bankers' Acceptance.
(b) Prepayment of Fixed Rate Advances
If any prepayment is made, for any reason, of an advance
bearing a fixed rate of interest, including without limitation
a LIBOR advance, the Borrower shall compensate the Bank for
the cost of any early termination of its funding arrangements
in accordance with its normal practices, such costs to be
notified to the Borrower in a certificate reasonably prepared
by the Bank.
Environment
4. The Borrower agrees:
(a) to obey all applicable laws and requirements of any
governmental authority relating to the environment and the
operation of the business activities of the Borrower.
(b) to allow the Bank access at all times to the business premises
of the Borrower to monitor and inspect all property and
business activities of the Borrower.
(c) to notify the Bank from time to time of any business activity
conducted by the Borrower which involves the use or handling
of hazardous materials or wastes or which increases the
environmental liability of the Borrower in any material
manner.
/s/ [ILLEGIBLE]
---------------
(d) to notify the Bank of any proposed change in the use or
occupation of the property of the Borrower prior to any change
occurring;
(e) to provide the Bank with immediate written notice of any
environmental problem and any hazardous materials or
substances which have an adverse effect on the property,
equipment, or business activities of the Borrower and with any
other environmental information requested by the Bank from
time to time.
(f) to conduct all environmental remedial activities which a
commercially reasonable person would perform in similar
circumstances to meet its environmental responsibilities and
if the Borrower falls to do so, the Bank may perform such
activities; and
(g) to pay for any environmental investigations, assessments or
remedial activities with respect to any property of the
Borrower that may be performed for or by the Bank from time to
time.
If the Borrower notifies the Bank of any specified activity or change
or provides the Bank with any information pursuant to subsections 4(c),
(d), or (e), or if the Bank receives any environmental information from
other sources, the Bank, in its sole discretion, may decide that an
adverse change in the environmental condition of the Borrower or any of
the property, equipment, or business activities of the Borrower has
occurred which decision will constitute, in the absence of manifest
error, conclusive evidence of the adverse change, Following this
decision being made by the Bank, the Bank shall notify the Borrower of
the Bank's decision concerning the adverse change.
If the Bank decides or is required to incur expenses in compliance or
to verify the Borrower's compliance with applicable environmental or
other regulations, the Borrower shall indemnify the Bank in respect of
such expenses, which will constitute further advances by the Bank to
the Borrower under this Agreement.
Drawdown
5. The right to the Borrower to obtain the drawdown under the Credit(s) is
subject to the condition precedent that there shall not have been any
material adverse changes in the financial condition or the
environmental condition of the Borrower or any guarantor of the
Borrower.
Periodic Review
6. The obligation of the Bank to make further advances or other
accommodation available under any Credit(s) of the Borrower under which
the indebtedness or liability of the Borrower is payable on demand, is
subject to periodic review and to no adverse change occurring in the
financial condition or the environmental condition of the Borrower or
any guarantor.
Evidence of Indebtedness
7. The Bank's accounts, books and records constitute, in the absence of
manifest error, conclusive evidence of the advances made under this
Credit repayments on account thereof and the indebtedness of the
Borrower to the Bank.
Acceleration
8. (a) All indebtedness and liability of the Borrower to the Bank
payable on demand, is repayable by the Borrower to the Bank at
any time on demand:
(b) All indebtedness and liability of the Borrower to the Bank not
payable on demand, shall, at the option of the Bank, become
immediately due and payable, the security held by the Bank
shall immediately become enforceable, and the obligation of
the Bank to make further advances or other accommodation
available under the Credits shall terminate, if any one of the
following Events of Default occurs:
(1) The Borrower or any guarantor fails to make when due,
whether on demand or at a fixed payment date, by
acceleration or otherwise, any payment of interest,
principal, fees, commissions or other amounts payable
to the Bank.
(2) There is a breach by the Borrower of any other term
or condition contained in this
/s/ [ILLEGIBLE]
---------------
Commitment Letter or in any other agreement to which
the Borrower and the Bank are parties;
(3) Any default occurs under any security listed in this
Commitment Letter under the headings "Specific
Security" or "General Security" or under any other
credit, loan or security agreement to which the
Borrower is a party;
(4) Any bankruptcy, re-organization, compromise,
arrangement, insolvency or liquidation proceedings or
other proceedings for the relief of debtors are
instituted by or against the Borrower and, if
instituted against the Borrower, are allowed against
or consented to by the Borrower or are not dismissed
or stayed within 60 days after such institution;
(5) A receiver is appointed over any property of the
Borrower or any judgment or order or any process of
any court becomes enforceable against the Borrower or
any property of the Borrower or any creditor takes
possession of any property of the Borrower;
(6) Any adverse change occurs in the financial condition
of the Borrower or any guarantor:
(7) Any adverse change occurs in the environmental
condition of:
(A) The Borrower or any guarantor of the Borrower; or
(B) Any property, equipment, or business activities
of the Borrower or any guarantor of the Borrower.
Costs
9. All costs, including legal and specialist fees incurred by the Bank
relative to security and other documentation, shall be for the account
of the Borrower and may be charged to the Borrower's deposit account
when submitted.
Fees
10. The Bank's standard administrative fees, as amended from time to time,
shall apply for all deposit and loan accounts. These shall include, but
are not limited to:
Minimum Payment
---------------
- Late payment fee on Non-Revolving CI$100 per payment
loan payments.
- Follow up for receipt of delinquent CI$100 per item per month
reporting information.
- Payment of cheques into unauthorized CI$25 per item
overdraft on deposit accounts.
The Bank shall have the right to increase these fees, and/or charge
special administrative fees if, in the Bank's discretion, unusual or
excessive time or affort is required in administering the Borrower's
accounts.
Taxes
11. All payments by the Borrower of principal of, and interest on, the
Loans and all other amounts payable hereunder shall be made free and
clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any
taxing authority.
/s/ [ILLEGIBLE]
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