EXHIBIT 10.6
AGREEMENT
THIS AGREEMENT is made this 19TH day of December 2002,
BETWEEN: CONSOLIDATED WATER CO. LTD. (FORMERLY CAYMAN WATER COMPANY
LIMITED), a Cayman Islands company having its principal office at
Trafalgar Place, West Bay Road, P.O. Box 1114GT, Grand Cayman,
Cayman Islands ("CWC")
AND: SAFE HAVEN LTD., a Cayman Islands company having its principal
office at Safe Xxxxx Xxxxxxxxx Xxxxxx, Xxxx Xxx Xxxx, X.X. Xxx
000XX, Grand Cayman, Cayman Islands ("the Customer")
RECITAL:
The Customer wishes to continue to obtain a supply of non-potable water of
specified quality in specified volume for the irrigation of its golf course on
the east side of the West Bay Road, Grand Cayman, and CWC has agreed to supply
the water on the terms set out in this Agreement.
AGREEMENT:
1. SUPPLY OF WATER
a. CWC will supply the Customer during the Term, on the terms and
conditions set out in this Agreement, non-potable water at the
meter(s) referred to in clause 3.e at the rate of 130 gallons per
minute at 50 pounds per square inch gauge.
b. The Volume of water supplied will be the amount from time to time
agreed by CWC, who must use its best endeavours to supply the
Customer's demands in full.
c. The water supplied will have total dissolved solids of less than 750
parts per million and a pH factor within the range of 5.5 to 7.0.
2. STORAGE TANK AND SUPPLY LINE
The Customer will maintain at its expense the Supply Line and the Storage
Tank during the Term and will pay for all losses of water attributable to
leakage in either of them or evaporation from the Storage Tank.
3. PAYMENT
a. During the period or periods that the Company enjoys an exemption from
royalties on sales to the Customer, payable to the Cayman Islands
Government under the terms of the Licence, the Customer will pay a
price per 1,000 U.S. gallons equal to the total of the following:-
i. The Royalty-Free Consumption Charge, subject to adjustment on 1st
January, 2004, and on each January 1st thereafter in accordance
with sub-clause c ;
ii. the Electricity Charge.
b. During the period or periods that the Company does not enjoy an
exemption from royalties on sales to the Customer, payable to the
Cayman Islands Government under the terms of the Licence, the Customer
will pay a price per 1,000 U.S. gallons equal to the total of the
following:-
i. The Royalty-Due Consumption Charge, subject to adjustment on 1st
January, 2004, and on each January 1st thereafter in accordance
with sub-clause c ;
ii. the Electricity Charge.
c. On each January 1st commencing 1st January 2004 the Royalty-Free
Consumption Charge will be adjusted to the figure obtained by
reference to the following formula:-
$4.773xUSPPIL $3.87xCICPIL
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USPPI02 CICPI02
On each January 1st commencing 1st January 2004 the Royalty-Due
Consumption Charge will be adjusted to the figure obtained by
reference to the following formula:-
$5.093xUSPPIL $4.16xCICPIL
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USPPI02 CICPI02
For the purposes of this sub-clause:-
USPPIL is the United States Producer Price Index for Industrial
Commodities at the preceding September 30th and USPPI02 is that index
at September 30, 2002, and
CICPIL is the Cayman Islands Consumer Price Index at the preceding
September 30th and CICPI02 is that index at September 30, 2002.
BUT if the Cayman Islands Government does not produce a Consumer Price
Index at any relevant date, the United States Government Consumer
Price Index for that date must be used.
d. The Electricity Charge is the cost of electricity (including the fuel
adjustment factor) purchased from Caribbean Utilities Co. Ltd. in US$
per Kwh multiplied by 14.5. As this charge fluctuates, the Electricity
Charge per 1,000 U.S. gallons in each calendar month will be adjusted
to the actual cost of electricity per kwh (including the fuel
adjustment factor) in each calendar month multiplied by 14.5.
e. CWC must have the water tariff meter(s) on which the Customer's water
consumption is calculated and which is installed at the junction of
the Supply Line and CWC's plant recalibrated every six months by
returning it to the manufacturer or by another method acceptable to
the Customer and the meter must have a margin of error not greater
than +/-1.5% within the range of 150,000 to 200,000 U.S. gallons per
day.
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f. The parties will read the tariff meter(s) at 10:00 a.m., or such other
time as they agree, on the last day of each calendar month. Both
parties are entitled to be present by an authorised representative.
g. CWC must invoice the Customer each calendar month for the Monthly
Charge for the previous month and any unpaid balance on the account
(including interest on any late payments at the rate set out below)
and the Customer must pay each invoice within ten (10) days failing
which, without prejudice to any other rights under this Agreement, CWC
may cease supplying water until the Company pays the invoice in full
together with interest at the rate of 1.5% per month calculated on a
daily basis from the due date to the date of payment, which CWC may
charge whether or not it continues to supply water.
4. SECURITY DEPOSIT
The Customer must pay CWC on the date of this Agreement, a deposit of
US$40,000.00 (receipt of which CWC acknowledges) which CWC must hold on
account of the payment of the Monthly Charge during the last three months
of the Term. Accordingly, during the notice period required by clause 6(2),
no further payments of invoices need be made by the Customer unless and
until the total of those invoices exceeds US$40,000.00 at which time all
the provisions of this Agreement relating to payment will apply once more.
If at the end of the Term, any portion of the deposit remains unused, CWC
must immediately refund it to the Customer without interest.
5. FORCE MAJEURE
Notwithstanding anything to the contrary in this Agreement, the rights of
either party against the other and any corresponding obligations of the
other will be suspended during any period in which this Agreement cannot be
carried out because of force majeure which includes, without limitation,
hurricane, fire, flood or other acts of God, accident, explosion, war,
strike, lockout, labour trouble, expropriation by Governmental authority,
regulation, orders or requests of Governmental agencies or inability by the
exercise of reasonable diligence to obtain supplies, materials or power.
6. TERMINATION
(1) This Agreement may, without prejudice to any other rights which the
terminating party may have against the other, be immediately
terminated by either party if the other party:-
(a) does not comply with any of its representations, warranties or
agreements set out in this Agreement and does not remedy the
breach (if capable of remedy) within 30 days of service on it of
notice so to do; or
(b) is prohibited from performing its obligations under this
Agreement as a result of any applicable law or regulation.
(2) Either party may terminate this Agreement without cause on giving one
hundred and twenty (120) days notice to the other expiring at the end
of a calendar month but no such termination may be effective prior to
31st December 2004.
7. NOTICES
Any notice required or permitted under this Agreement must be in writing
and must be delivered by hand or sent by registered mail to the party to be
served at its address on page 1 or such other address in the Cayman Islands
as either party may advise the other by similar notice. Notices sent by
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mail are deemed to be served 7 business days following posting in a
properly prepaid envelope and notices delivered by hand are deemed received
on delivery. Notices may also be served by telex or telecopier at the
sender's risk as to receipt.
8. ENTIRE AGREEMENT, BINDING EFFECT AND MODIFICATION
This Agreement is binding on the parties and their respective successors
and assigns and may be amended or modified only by a further written
agreement signed by both parties. This Agreement sets out the entire
agreement of the parties with respect to its subject matter and supersedes
all previous agreements and understandings whether oral or written relating
to it.
9. DEFINITIONS
For the purposes of this Agreement:-
a. "the Electricity Charge" means the charge calculated in accordance
with clause 3.d;
b. "the Monthly Charge" means the total of either the Royalty-Due
Consumption Charge or Royalty-Free Consumption Charge, as applicable,
and the Electricity Charge in respect of each month;
c. "the Royalty-Due Consumption Charge" means US$9.25, subject to
adjustment in accordance with clause 3.c;
d. "the Royalty-Free Consumption Charge" means US$8.60, subject to
adjustment in accordance with clause 3.c;
e. "the Licence" means the Company's licence under the Water (Production
and Supply) Law dated 16 July 1990, as amended from time to time;
f. "the Storage Tank" means the storage tank constructed by the Customer
on its land, capable of storing not less than 350,000 U.S. gallons of
water to which the Supply Line is connected by an intake pipe at a
height from the ground of not more than twenty feet (which is the
maximum height of the water level in the tank) to the intent that the
Customer will be able to obtain water for short periods at a greater
rate per hour than is agreed to be supplied under this Agreement.
g. "the Supply Line" means a 6" diameter product water pipe constructed
by the Customer to CWC's specifications at the position on the
boundary line of CWC's land on West Bay Road specified by CWC.
h. "the Term" means the period commencing 1st January 2003 and ending on
the date on which it is lawfully terminated in accordance with clause
6.
10. APPLICABLE LAW AND FORUM
This Agreement is governed by and must be construed in accordance with the
laws of the Cayman Islands.
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SIGNED for and on behalf of
CONSOLIDATED WATER CO. LTD. by:-
/s/ Xxxxxxxxx XxXxxxxxx
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Director
In the presence of:-
/s/ Xxxxx Xxxxxx
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Witness Xxxxx Xxxxxx
SIGNED for and on behalf of
SAFE HAVEN LTD. by:-
illegible
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CFO
In the presence of:-
illegible
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Witness
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