EXHIBIT 10.3
Execution Copy
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") dated as of July 31, 2003, is entered into
by and between The Desalination Company of Trinidad and Tobago Limited, a
limited liability company duly organized and existing under the laws of
Trinidad, West Indies, with its principal place of business at Pacific Avenue at
Maracaibo Drive, Pt. Lisas Industrial Estate, Pt. Lisas, Trinidad, W.I. (the
"Borrower"), and Ionics Ventures Ltd, a limited liability company duly organized
and existing under the laws of England (company number 4315984), with its
registered office at 0 Xxx Xxxxxxx Xxxxxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxxx, XX0 0XX
("Ionics Ventures") (Ionics Ventures and any Person to which Ionics Ventures
assigns its rights in accordance with this Agreement being referred to herein as
the "Lender").
WITNESSETH:
WHEREAS, the Borrower and Ionics, Incorporated, a corporation duly
organized and existing under the laws of the Commonwealth of Massachusetts,
United States of America, with its principal place of business at 00 Xxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx, X.X.X. ("Ionics"), executed in trust for an
affiliate, entered into a Shareholders' Agreement dated May 12, 2000, as amended
by Amendment to Shareholders' Agreement dated June 16, 2000 and as further
amended by Amendment No. 2 to Shareholders' Agreement dated June 25, 2003 (as
amended, the "Shareholders' Agreement");
WHEREAS, in accordance with the terms under which the Shareholders'
Agreement was executed and pursuant to an Assignment Agreement dated June 5,
2002 between Ionics and the Lender, Ionics assigned to Ionics Caribbean
Investors Limited ("Ionics Caribbean") its rights and obligations under the
Shareholders' Agreement and its shares in the Borrower.
WHEREAS, upon compliance with the terms and condition of Section 11.13
of the Amended Shareholders' Agreement, the Lender may be required to make a
loan to the Borrower in the original principal amount of U.S.$10,000,000.00 for
the purpose of financing a portion of the Borrower's obligations under the
Agreement for the turnkey engineering, procurement and construction of a
seawater desalination plant at Point Lisas Industrial Estate, Republic of
Trinidad and Tobago dated June 1, 2000, as amended by that certain letter
agreement dated October 25, 2000 and by that certain letter agreement dated
September 19, 2001, and as it may be further amended (the "EPC Agreement"),
entered into between the Borrower and Ionics Constructors Trinidad Ltd. ("Ionics
Constructors"); and
WHEREAS, the Lender is willing to make the loan to the Borrower in the
original principal amount of U.S.$10,000,000.00 for such purpose on the terms
and subject to the conditions of this Agreement.
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NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION
1.01. Defined Terms. The following terms (except as otherwise expressly
provided or unless the context otherwise requires) for all purposes of this
Agreement shall have the respective meanings hereinafter specified:
"Accounting Principles" shall mean International Accounting Standards
promulgated by the International Accounting Standards Committee, together with
its pronouncements thereon from time to time, and applied on a consistent basis,
provided that if Borrower changes the method it uses for financial accounting
and reporting purposes to generally accepted accounting principles as applied in
either Borrower's Country or the United States (in either case, "GAAP"), then as
of that time Accounting Principles will mean GAAP, together with its
pronouncements thereon from time to time, and applied on a consistent basis.
"Affiliate" shall mean, a body corporate, limited liability company,
limited partnership or other legal entity which is a subsidiary of another or
both are subsidiaries of the same body corporate or each of them is controlled
by the same person. For this purpose, "control" or "controlled" has the meaning
described in Section 4 of the Companies Act, Ch. 81:01 of the Laws of Trinidad
and Tobago, as in effect on the date this Agreement is executed.
"Agreement" shall mean this Loan Agreement, including any Schedule,
Annex, Exhibit or any other attachment hereto, as amended, supplemented,
extended or otherwise modified from time to time.
"Borrower's Country" shall mean the Republic of Trinidad and Tobago.
"Bridge Loan Agreement" shall mean the Project Loan Agreement dated
July 13, 2000, among the Borrower, Republic Finance and Merchant Bank Limited
and Republic Bank Limited, as amended from time to time.
"Business Day" shall mean any day on which commercial banks in New
York, New York, and Port of Spain, Trinidad are open for domestic and foreign
exchange business.
"Certain Works" shall mean a) those items identified as Punchlist and
Defect items as defined on letter "DESAL/IONICS/LTR 300" dated 2003 January 28;
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b) landscaping, paving, drainage, and fencing; and c) an allowance for
reasonable charges by Borrower for work performed on behalf of Ionics
Constructors.
"Default" shall mean an event, which with the giving of notice or the
lapse of time, or both, would become an Event of Default.
"Default Rate" shall mean, at the time any determination thereof is to
be made, the interest rate per annum equal to the sum of (x) the Loan Rate, as
applicable to the Loan on the date thereof, and (y) five percent (5.00%) per
annum, but in no event in excess of the maximum rate permitted by applicable
law.
"Dollars" or "$" shall mean the lawful currency of the United States of
America.
"EPC Agreement" shall have the meaning set forth in the Recitals.
"Event of Default" shall have the meaning set forth in Section 7.01
hereof.
"Facility" means the plant for the desalination of seawater, being
constructed by the Borrower in Point Lisas, Republic of Trinidad and Tobago,
including all tangible components, auxiliaries and subsystems and supporting
infrastructure, together with suitable storage facilities.
"Governmental Authority" shall mean, as to any Person, any government
(or any political subdivision or jurisdiction thereof), court, bureau, agency or
other governmental authority having jurisdiction over such Person, or any of its
business, operations or properties.
"Indebtedness" of any Person shall mean (a) all indebtedness for
borrowed money or for the deferred purchase price of any property (other than
accounts payable to trade creditors under customary trade credit terms) or
services for which the Person is liable as principal, (b) all indebtedness
(excluding unaccrued finance charges) secured by a Lien on property owned or
being purchased by the Person, whether or not such indebtedness shall have been
assumed by the Person, (c) all lease obligations required to be capitalized
pursuant to Accounting Principles (excluding unaccrued finance charges) of the
Person, (d) any arrangement (commonly described as a sale-and-leaseback
transaction) with any financial institution or other lender or investor
providing for the leasing to the Person of property which at the time has been
or is to be sold or transferred by the Person to the lender or investor, or
which has been or is being acquired from another Person by the lender or
investor for the purpose of leasing the property to the Person, (e) all
obligations of partnerships or joint ventures in respect of which the Person is
primarily or secondarily liable as a partner or joint venturer or otherwise
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(provided that in any event for purposes of determining the amount of the
Indebtedness, the full amount of such obligations, without giving effect to the
contingent liability or contributions of other participants in the partnership
or joint venture, shall be included), (f) all redeemable preferred stock of such
Person (valued at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends), (g) all obligations of such
Person in respect of letters of credit, bankers' acceptances or similar
obligations issued or created for the account of such Person, and (h) all
liabilities of such Person in respect of foreign currency or other hedging
arrangements and in respect of interest rate protection or hedging arrangements
entered into by such Person to fix the floating interest rate, float the fixed
interest rate or otherwise cap or limit the interest rate, exposure of such
Person.
"Lien" shall mean a mortgage, pledge, lien, security interest or other
charge or encumbrance or any segregation of assets or revenues or other
preferential arrangement (whether or not constituting a security interest)
whether voluntary or involuntary, whether granted by agreement, statute or
otherwise, with respect to any present or future assets, including fixtures,
revenues or rights or the receipt of income of the Person referred to in the
context in which the term is used.
"Loan" shall have the meaning set forth in Section 2.01, or, where the
context so requires or permits, the outstanding principal balance thereof.
"Loan Rate" shall mean, during the term of this Agreement, an interest
rate per annum (computed on the actual number of days elapsed over a 360-day
year) equal to two percent (2%) above the interest rate charged on the U.S.
Dollar portion of the Term Loan Agreement as in effect from time to time,
compounded quarterly; provided that if the U.S. Dollar Advances have been fully
repaid on any "Reset Date"( as such term is defined in the Term Loan Agreement),
the Loan Rate under this Agreement will remain in effect at the same Loan Rate
existing under this Agreement as of such Reset Date. For the avoidance of doubt,
the interest rate shall be calculated by giving weighted effect to the interest
rate on amounts outstanding under any Multi-Lateral Loan (as defined in the Term
Loan Agreement) which replaces any portion of the U.S. Dollar loan amount
outstanding under the Term Loan Agreement, at such time as funds under a
Multi-Lateral Loan are disbursed to Borrower. A change in Loan Rate will
necessitate a change in the amortization table set forth at Exhibit A.
"Maturity Date" shall mean July 30, 2010 , or such earlier date at
which the agreement dated August 25, 1999, between the Water and Sewerage
Authority of Trinidad and Tobago ("WASA") and the Borrower, as modified by the
Clarifications dated May 22, 2000, otherwise ceases to be in effect.
"Other Taxes" shall have the meaning set forth in Section 4.01.
"Payment Date" shall mean October 31st, January 31st , April 30th, and
July 31st, in any year, which shall be the dates on which payments of principal
and interest shall be made by the Borrower in accordance with the amortization
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schedule attached hereto as Exhibit A; provided that if any such day is not a
Business Day, such Payment Date will be the immediately following Business Day.
"Person" shall mean any natural person, corporation, unincorporated
organization, trust, joint-stock company, joint venture, association, company,
partnership or government, or any agency or political subdivision of any
government.
"Project" shall mean the design, engineering, construction and
operation of the Facility.
"Senior Lender" shall mean (i) Republic Bank Limited, Republic Finance
and Merchant Bank Limited, and the other financial institutions which become
lenders pursuant to Clause 26.2 of the Term Loan Agreement; and (ii) any lender
under a "Multi-Lateral Loan" (as such term is defined under the Term Loan
Agreement).
"Subsidiary" shall mean any Person in which the Borrower may own,
directly or indirectly, an equity interest of more than 50%, or which may
effectively be controlled by the Borrower, during the term of this Agreement, as
well as all Subsidiaries and other Persons from time to time included in the
consolidated financial statements of the Borrower. For this purpose, "control"
or "controlled" has the meaning described in Section 4 of the Companies Act, Ch.
81:01 of the Laws of Trinidad and Tobago, as in effect on the date this
Agreement is executed
"Taxes" shall have the meaning set forth in Section 4.01.
"Term Loan Agreement" shall mean the loan agreement entered into by
Borrower to re-finance the obligations incurred under the Bridge Loan Agreement
and entered into on June 25, 2003.
"Trinidad and Tobago Dollars" shall mean the lawful currency of
Trinidad and Tobago.
"U.S." or "United States" shall mean the United States of America.
"U.S. Dollars", or "U.S.$" shall mean the lawful currency of the United
States of America.
1.02. Principles of Construction.
(a) The words "herein", "hereof", "hereby", "hereto",
"hereunder" and words of similar import refer to this Agreement as a whole and
not to any particular article, section, paragraph or other subdivision of this
Agreement.
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(b) The meanings set forth for defined terms in Section 1.01
of this Agreement shall be equally applicable to both the singular and plural
forms of the defined terms.
(c) The headings of the sections and subsections herein are
for convenience only and shall not affect the meaning or construction of any
provision of this Agreement.
(d) Unless specified otherwise, all references to "this
Agreement" and to Sections, Annexes, Exhibits, and Schedules are to Sections,
Annexes, Exhibits, and Schedules of this Agreement, as the same may be amended,
modified or supplemented from time to time.
SECTION 2. THE LOAN
2.01. The Loan. Subject to the terms and conditions provided herein,
the Lender agrees, on the terms, and subject to the conditions of this
Agreement, to make a loan to the Borrower, in the original principal amount of
U.S.$10,000,000.00 (the "Loan") on the date of this Agreement.
2.02. Purpose. The entire proceeds of the Loan shall be used by
Borrower solely for the purpose of financing a portion of the Borrower's
obligations to Ionics Constructors under the EPC Agreement.
2.03. Loan. The Loan shall be evidenced by, and repaid with interest in
accordance with, the provisions of this Agreement.
2.04 Loan Disbursement. Notwithstanding any provision herein to the
contrary, the disbursement of the Loan from the Lender to the Borrower shall be
made in accordance with the procedures set forth in this Section 2.04. Pursuant
to Section 2.02 of this Agreement, all of the Loan proceeds are to be used
solely to finance the Borrower's obligations to Ionics Constructors under the
EPC Agreement. Accordingly, the Parties agree that the Loan disbursement will be
deemed to occur in the amount of the Loan and Borrower's obligations to Lender
hereunder will commence upon execution of this Agreement, at which time Lender
agrees that it will obtain and deliver to Borrower a receipt from Ionics
Constructors evidencing payment of the amount of the Loan to it in satisfaction
of a portion of the total amount owed to it by Borrower under the EPC Agreement
as of the date of this Agreement. The Borrower and the Lender each acknowledge
and agree that Lender's confirmed payment to Ionics Constructors of amounts owed
to it under the EPC Agreement in accordance with this Section 2.04 will
constitute disbursement of the Loan by the Lender to the Borrower under this
Loan Agreement as of the date of this Agreement.
2.05 Principal and Interest Repayment. On each Payment Date, the
Borrower shall repay to the Lender in accordance with the methods set forth in
Section 5.01, an amount of the unpaid principal of and interest on the Loan as
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set forth in the amortization schedule attached hereto as Exhibit A; provided
that, notwithstanding anything in this Agreement to the contrary, the entire
amount of principal and all accrued interest and other amounts owing from
Borrower to Lender under this Agreement will be payable in full on the Maturity
Date.
2.06. Interest. (a) The unpaid principal amount of the Loan shall bear
interest from the date of this Agreement until repayment at a rate per annum
equal to the applicable Loan Rate from time to time in effect. Accrued interest
shall be due and payable on each Payment Date, commencing with the first such
date to occur subsequent to the date of this Agreement, and shall be calculated
on the basis of a 360-day year for the actual number of days elapsed (i.e.
1/360's of a full year's interest shall accrue for each day any portion of the
Loan is outstanding).
(b) After an Event of Default, any unpaid principal of and any accrued
and unpaid interest on the Loan and any other amounts due to the Lender under
this Agreement (to the fullest extent permitted by applicable law) shall bear
interest until paid in full, payable on demand, at a rate per annum equal to the
Default Rate.
2.07. Prepayment.
(a) The Borrower has the right to prepay, without penalty, all or any
part of the principal of the Loan at any time or times, provided that Borrower
must notify Lender at least two (2) days in advance that it intends to make such
a pre-payment. Each prepayment shall be applied to amounts due under this
Agreement in accordance with the order of priority set forth in Section 5.02
hereof.
(b) If at any time any shareholder of the Borrower sells or otherwise
transfers any of its shares of stock in the Borrower contrary to the provisions
of the Shareholders' Agreement or the Term Loan Agreement, Borrower shall be
required to pay on demand of the Lender the full amount of unpaid principal and
all accrued and unpaid interest on the Loan accrued through the date of payment.
SECTION 3. CONDITIONS PRECEDENT
3.01. Conditions Precedent to the Effectiveness of this Agreement and
the making of the Loan. This Agreement is being executed and the Loan extended
by Lender on the representation by Borrower that all of the following conditions
have been met. If the Agreement is executed and disbursement deemed to occur in
accordance with Section 2.04 above and it is subsequently determined by Lender
that one or more of the following conditions have not been satisfied, Lender may
upon notice to Borrower, declare an Event of Default pursuant to Section 7.01(c)
below:
(a) This Agreement has been executed by the Borrower and the Lender;
and
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(b) (i) all representations and warranties made by the Borrower herein
or otherwise in writing in connection herewith, shall be true and correct in all
material respects on or as of the date of this Agreement, (ii) no Default or
Event of Default shall have occurred and be continuing on or as of the date of
this Agreement, (iii) on the date hereof, no adverse change in the business,
operations, properties, assets or condition (financial or otherwise) of the
Borrower and no other event has occurred which creates a possibility of
adversely affecting the ability of the Borrower to perform and comply with all
terms, conditions and agreements to be performed or complied with by the
Borrower under this Agreement or the transactions contemplated herein, and (iv)
neither Borrower nor any of its shareholders will be in default under the
Shareholders' Agreement on the date of this Agreement ; and
(c) The Borrower has not (1) defaulted in the payment of principal or
interest on any Indebtedness owed to any Senior Lender, beyond the period of
grace, if any, provided in the agreement under which such Indebtedness was
created; or (2) defaulted in the observance or performance of any other covenant
or agreement contained in any agreement with a Senior Lender, or any other event
has not occurred, the effect of which default or other event causes, or permits
a Senior Lender (or a trustee or agent on behalf of such Senior Lender) to cause
Indebtedness of the Borrower to become due prior to its stated maturity; and
(d) Borrower has entered into an agreement with Ionics Incorporated, or
an affiliate of Ionics Incorporated, for technical assistance with the operation
and maintenance of the Facility, or such other agreement as is required by the
Senior Lenders under the Term Loan Agreement; and
(e) Borrower has paid to Lender (i) a loan origination fee equal to
l.0% of the original principal amount of the Loan, and (ii) an amount equal to
the costs and expenses (including legal fees) incurred by Lender in connection
with the processing of the Loan and the negotiation, preparation, and execution
of the Agreement and all other documents and agreements required in relation to
the Loan, which shall be solely at Borrower's expense, not to exceed US$50,000;
and
(f) Borrower has obtained and maintained in full force and effect
insurance policies with respect to the Facility and the Project providing
coverages of the types and in the amounts satisfactory to Lender; and
(g) To the extent available from funds provided under the Term Loan
Agreement, Borrower has paid to Ionics Constructors all amounts previously
certified and payable by Borrower to Ionics Constructors pursuant to the EPC
Agreement other than amounts to be paid by Borrower to Ionics Constructors by a
credit to the Loan hereunder pursuant to Section 2.04 above; and
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(h) Borrower's board of directors has duly authorized the execution,
delivery and performance by Borrower of this Agreement; and
(i) Borrower has executed, and delivered to Ionics an original
of Amendment No. 2 to Shareholders' Agreement; and
(j) Borrower has approved and certified amounts totalling
US$101,000,000.00 for phases I to IV to Ionics Constructors (exclusive of the
Contractor's Fee as described in the EPC Agreement), less US$3,000,000.00 held
pending completion by Ionics Constructors of Certain Works as set forth in
Exhibit C.
SECTION 4. FEES AND EXPENSES
4.01 Taxes.
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(a) All payments by the Borrower under this Agreement shall be made
without setoff, deduction or counterclaim and in such amounts as may be
necessary in order that all payments, after deduction or withholding for or on
account of any present or future taxes, levies, imposts, duties or other charges
of whatsoever nature imposed by any government or any political subdivision or
taxing authority thereof (collectively, the "Taxes"), shall not be less than the
amounts otherwise specified to be paid under this Agreement. Notwithstanding
anything contained in this Section 4.01 to the contrary, the Borrower shall not
be liable for the payment of any tax on or measured by net income imposed upon
the Lender pursuant to the income tax laws of the United States, or any
political subdivision of either thereof.
(b) The Borrower shall pay any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement collectively,
"Other Taxes".
(c) The Borrower shall pay all Taxes and Other Taxes when due (and
indemnify the Lender against any liability therefor) and shall promptly (and in
any event not later than 30 days thereafter) furnish to the Lender any
certificates, receipts and other documents which may be required (in the
judgment of the Lender) to establish any tax credit to which the Lender may be
entitled.
(d) The Borrower shall indemnify the Lender for the full amount of
Taxes and Other Taxes (including, without limitation, Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under
this Section 4.01) paid by the Lender or any liability (including
interest and penalties) arising therefrom or with respect
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thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the obligations of the Borrower under this Section 4.01
shall survive the termination of this Agreement and the repayment of the Loan.
4.02 Expenses. The Borrower agrees, whether or not the transactions
hereby contemplated are ever consummated or the Loan contemplated hereunder is
funded, to pay, or reimburse the Lender promptly upon demand for the payment of
all reasonable costs and expenses arising in connection with the preparation,
negotiation, execution and delivery of this Agreement, including, without
limitation all legal fees and costs, not to exceed US$50,000.
SECTION 5. PAYMENTS
5.01. Method of Payment.
(a) All payments to be made by the Borrower to the Lender under this
Agreement shall be made without set-off, counterclaim or deduction to the Lender
in Dollars in immediately available and freely transferable funds by wire
transfer to Lender's account set forth in Exhibit B not later than 11:00 A.M.
(Boston, Massachusetts time) on the date on which due, or, if applicable, to
such other account of the Lender as the Lender may specify in a written notice
delivered to the Borrower.
(b) Except as otherwise provided herein, whenever any payment falls due
on a day which is not a Business Day, the due date for payment shall be extended
to the next following Business Day and interest shall be computed in accordance
with Section 2.06 hereof taking into account such additional day(s).
5.02. Application of Payments. Prior to the occurrence of an Event of
Default, the Lender shall apply payments received by it under this Agreement in
the following order of priority: (i) to interest due pursuant to Section
2.06(a), (ii) to all other amounts due and not otherwise provided for in this
Section 5.02, and (iii) to the principal on the Loan. Following the occurrence
and during the continuance of any Event of Default, all such payments shall be
applied by the Lender in such order of application as the Lender in its sole and
absolute discretion shall elect.
5.03. Authorizations for Payments. The Borrower shall promptly obtain
and maintain in full force and effect all authorizations, consents and approvals
and filings with any governmental authority in the Borrower's Country which may
at any time be required under the laws of the Borrower's Country (including all
laws and regulations with respect to the availability and transfer of Dollars)
to make payments as and when due under this Agreement.
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SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS
6.01 Representations and Warranties. In order to induce the Lender to
enter into this Agreement and to make the Loan and other financial
accommodations provided for herein, the Borrower represents and warrants to the
Lender that:
(a) the Borrower is duly organized and validly existing under the laws
of the Borrower's Country and is duly qualified or licensed to transact business
in all places where such qualification or license is necessary in view of its
business operations and/or the ownership of its properties and assets, and the
Borrower has the corporate power to make and perform this Agreement and the
transactions contemplated herein;
(b) the execution, delivery and performance by the Borrower of this
Agreement (i) have been duly authorized by all necessary corporate action of the
Borrower and the Borrower has full authority to request the Loan as provided in
this Agreement, (ii) have been duly authorized, if so required, by all necessary
legislative, administrative and other governmental action, (iii) do not and will
not contravene its charter or any treaty, law, rule, regulation, order, decree,
judgment, award, injunction or similar legal restriction applicable to the
Borrower or any contractual restriction binding on or affecting the Borrower or
by which it or any of its properties or assets may be bound; and (iv) do not and
will not, with the passage of time or the giving of notice, result in a breach
of, or constitute a default or require any consent not obtained by the Borrower
under, or result in the creation of any Lien, charge or encumbrance upon any
property or assets of the Borrower pursuant to, any instrument or agreement to
which the Borrower is a party or by which the Borrower or by which it or any of
its properties or assets may be bound or affected, except in favor of the
Lender;
(c) this Agreement constitutes the legal, valid and binding obligations
of the Borrower enforceable in accordance with their respective terms except
that the enforceability thereof may be subject to the effects of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law now or
hereafter in effect relating to creditors' rights and to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law);
(d) all consents, approvals and authorizations, if any, of any
Governmental Authority in the Borrower's Country necessary for the execution,
delivery and performance by the Borrower of this Agreement have been obtained
and are in full force and effect, and the requirements of any and all laws and
regulations of the Borrower's Country with respect to the availability and
transfer of Dollars required to make all payments on the Loan, and all other
payments contemplated by this Agreement have been met; and the Borrower is not
in default under any order, decree, ruling, regulation, closing agreement or
other decision or instrument of any governmental commission, bureau or other
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administrative agency or public regulatory body having jurisdiction over the
Borrower, which default would have a material adverse effect on the Borrower;
(e) no legal proceedings are pending or, to the best of the Borrower's
knowledge and belief, threatened before any Governmental Authority which might
(i) materially and adversely affect the Borrower's financial condition, business
or operations, (ii) restrain or enjoin or have the effect of restraining or
enjoining the Borrower's performance or observance of the terms and conditions
of this Agreement or (iii) in any other manner question the validity, binding
effect or enforceability of this Agreement;
(f) the Borrower has filed or caused to be filed, or has obtained
extensions to file all tax returns which are required to be filed, and has paid
or caused to be paid, or has reserved on its books amounts sufficient for the
payment of, all taxes as shown on said returns or on any assessment received by
it, to the extent that the taxes have become due, except as otherwise permitted
by the provisions hereof. The Borrower has not been notified of, or otherwise
has knowledge of, any claim being asserted with respect to any such taxes, fees
or other charges, which could have a material adverse effect on the business or
financial condition of the Borrower. The Borrower has set up reserves which are
reasonably believed by the officers of the Borrower to be adequate for the
payment of said taxes for the years that have not been audited by the respective
tax authorities or for which a return has not, as of the date hereof, been
required to be filed by applicable law;
(g) the Borrower is not a party to any agreement or instrument or
subject to any court order or judgment, governmental decree, charter or other
corporate restriction adversely affecting its business, properties or assets,
operations or condition (financial or otherwise). The Borrower is not in default
in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement or instrument to which it is
a party or by which the Borrower or any of its properties or assets may be bound
or affected, or under any law, regulation, decree, order or the like, which
default has or may in the future have a material adverse effect on the business
or prospects of the Borrower;
(h) the Borrower and its Affiliates, officers, directors, agents, and
employees have at all times complied with all requirements of the U.S. Foreign
Corrupt Practices Act of 1977 ("FCPA") and Articles 138 and 139 of the
Constitution of Trinidad and Tobago, 1976 and the Integrity in Public Life Act,
and have not taken any action proscribed by any law regulating ethical business
practices including: (a) by not directly or indirectly making, promising to
make, or authorizing any payment of money or the giving of anything of value to
a government or party official, or any foreign political party or official
thereof, or any third person or entity that in turn will make a payment to a
government or party official, or undertaking other actions which would violate
the FCPA; and (b) by not making any payment which would be reportable as a
payment to a government official or public person under applicable law; and
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(i) the Borrower has no existing claims and is not aware of a basis for
any claims against any provider of goods and services to Borrower or by Borrower
to any other person.
6.02 Affirmative Covenants of the Borrower. The Borrower covenants and
agrees that, until all amounts owing under this Agreement have been paid in
full, the Borrower will, unless the Lender consents in writing:
(a) Use the proceeds of the financing only for the purposes set forth
in Section 2.02 of this Agreement (as herein agreed to by the Borrower and the
Lender) and furnish the Lender with all evidence that it may reasonably
require with respect to such use;
(b) Pay to Lender on each Payment Date the principal and interest
payments due in accordance with Section 2.05;
(c) Do or cause to be done all things necessary to maintain, preserve
and keep in full force and effect its existence in the jurisdiction of its
incorporation, and qualify and remain qualified in each jurisdiction where
qualification is necessary or desirable in view of its business operations or
the ownership of its properties;
(d) Pay and discharge or cause to be paid and discharged promptly all
taxes, assessments and governmental charges or levies imposed upon it or upon
its property or upon any part thereof, before the same shall become in
default, as well as all lawful claims for labor, materials and supplies or
otherwise which, if unpaid, might become a Lien upon such properties or any
part thereof; provided, however, that the Borrower shall not be required to
pay and discharge or to cause to be paid and discharged any tax, assessment,
charge, levy or claim so long as the Borrower shall have provided written
notice to the Lender thereof and the validity thereof shall be continuously
and diligently contested in good faith by appropriate proceedings and the
Borrower shall have set aside on its books adequate reserves with respect to
any tax, assessment, charge, levy or claim, so contested;
(e) Continue to conduct and operate its business substantially as
conducted and operated during the present and preceding fiscal year (including
the preservation of a management team of Borrower of acceptable quality and
skill); at all times maintain, preserve and protect all rights, privileges,
patents, franchises and trade names necessary or desirable in the conduct of
its business and preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working order
and condition, and from time to time make, or cause to be made, all needful
and proper repairs, replacements, betterments and improvements thereto so that
the business carried on in connection therewith may be conducted properly and
advantageously at all times;
Page -13-
(f) Furnish or cause to be furnished to the Lender all financial
information and statements, books, records and other documents and information
which Borrower provides to any Senior Lender, at the same time or promptly
after such information, financial statements, books, records or other
documents and information are furnished to any such lenders;
(g) Furnish or cause to be furnished to the Lender promptly, from time
to time, such other information regarding the operations, business, affairs
and financial condition of the Borrower as the Lender may reasonably request;
(h) Promptly, but in no event later than five (5) days after the
occurrence of an Event of Default or a Default, or of any event which
otherwise has or may have a negative effect on the Lender's ability to collect
on Borrower's obligations under this Agreement, notify the Lender by telefax,
telex or cable of the particulars of such occurrence and the action taken and
proposed to be taken by the Borrower with respect thereto; and
(i) Duly observe, conform and comply with all laws, decisions,
judgments, rules, regulations and orders of all Governmental Authorities
relative to the conduct of its business, its properties, and assets, except
those being contested in good faith by appropriate proceedings diligently
pursued; and obtain, maintain and keep in full force and effect all
governmental licenses, authorizations, consents, approvals and permits
necessary to the proper conduct of its business and the observance and
performance of the terms of this Agreement, including, without limitation, all
foreign exchange approvals with respect to the availability of Dollars
necessary to make all required payments under this Agreement; and from time to
time, do and perform any and all acts and execute any and all documents that
may be necessary or reasonably requested by the Lender in order to effect the
purpose of this Agreement and to protect the interests of the Lender in this
Agreement.
(j) Upon satisfactory completion by Ionics Constructors of discrete
portions of Certain Works, within seven (7) days of such completion, in each
instance, to submit to Republic Bank all additional certifications, invoices,
and notices required to cause Republic Bank to make additional payments to
Ionics Constructors for the value established for that completed portion of
Certain Works. Discrete portions of Certain Works and the values associated
with their completion will be established in Amendment No 3 to the EPC
Agreement. The total amount to be paid to Ionics Constructors for satisfactory
completion of all Certain Works is US$3,000,000.00
(k) Make payments to Ionics Constructors totaling US$3,182,688.46,
representing amounts previously certified under the EPC Agreement but not
funded under the Term Loan Agreement, from operating funds prior to declaring
any dividends to Shareholders.
Page -14-
6.03 Negative Covenants of the Borrower. The Borrower covenants that it
will not, without the prior written consent of the Lender, until payment in full
of all obligations and indebtedness of the Borrower hereunder:
(a) Dissolve or liquidate, or become a party to any merger or
consolidation, or acquire by purchase, lease or otherwise all or substantially
all of the assets or capital stock of any Person; or
(b) Except as otherwise permitted by the Term Loan Agreement, declare
or pay any dividend or authorize or make any other distribution on any capital
stock of the Borrower, whether now or hereafter outstanding, or make any payment
on account of the purchase, acquisition, redemption or other retirement of any
shares of such stock; or
(c) Create or permit to exist any Lien on any of its property, revenues
or other assets, present or future, except for the Liens created in favor of a
lender providing financing under the Term Loan Agreement.
SECTION 7. EVENTS OF DEFAULT
7.01. Events of Default. Upon the occurrence of any of the following
events or conditions (each an "Event of Default"):
(a) The Borrower shall fail to pay, when due (whether by acceleration
or otherwise and including pursuant to a demand by Lender pursuant to Section
2.07(b) above), any principal of or interest on the Loan, or any other amount
payable to the Lender under this Agreement; or
(b) Any representation or warranty made by the Borrower in this
Agreement or in connection herewith, or any statement made in any certificate,
report or financial statement furnished by the Borrower to the Lender has proven
to have been false or misleading in any material respect when made; or
(c) Failure by the Borrower to perform or comply with any of the
covenants or provisions set forth in this Agreement (exclusive of any event
specified as an Event of Default in any other subsection of this Section 7.01),
or the Lender shall determine that any of the conditions precedent set forth in
Section 3.01 above have not been satisfied; or
(d) Borrower shall (1) default in the payment of principal or interest
on any Indebtedness owed to any Senior Lender, beyond the period of grace, if
any, provided in the agreement under which such Indebtedness was created; or (2)
default in the observance or performance of any other covenant or agreement
contained in any agreement entered into with a Senior Lender or any other event
shall occur, the effect of which default or other event is to cause, or permit a
Page -15-
Senior Lender (or a trustee or agent on behalf of such Senior Lender) to cause,
Indebtedness of the Borrower to become due prior to its stated maturity; or
(e) The Borrower shall fail to furnish to the Lender any notice
required to be delivered in accordance with Section 6.02(e) hereof immediately
after any such event requiring such notice becomes known to the Chief Executive
Officer or the Chief Financial Officer of the Borrower; or
(f) The Borrower shall (1) voluntarily terminate operations or apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or liquidator of the Borrower, or of all or a
substantial part of the assets of the Borrower, (2) admit in writing its
inability, or be generally unable, to pay its debts as the debts become due, (3)
make a general assignment for the benefit of its creditors, (4) commence a
voluntary case under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts (as now or hereafter in
effect), (5) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, (6) fail to controvert in a timely and appropriate manner,
or acquiesce in writing to, any petition filed against it in an involuntary case
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, or (7) take any corporate action for the
purpose of effecting any of the foregoing; or
(g) Without its application, approval or consent, a proceeding shall be
commenced, in any court of competent jurisdiction, seeking in respect of the
Borrower: the liquidation, reorganization, dissolution, winding-up, or
composition or readjustment of debt, the appointment of a trustee, receiver,
liquidator or the like of the Borrower or of all or any substantial part of the
properties or assets of the Borrower, or other like relief in respect of the
Borrower under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts unless such proceeding is
contested in good faith by the Borrower; and, if the proceeding is being
contested in good faith by the Borrower, the same shall continue undismissed, or
unstayed and in effect, for any period of thirty (30) consecutive days, or an
order for relief against the Borrower shall be entered in any involuntary case
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts; or
(h) If any other event occurs or any other circumstance arises which,
in the opinion of the Lender, is likely materially and adversely to affect the
ability of the Borrower to perform all or any of its obligations hereunder
(including, without limitation, any material adverse change in the political or
economic conditions of the Borrower's Country), Lender will provide written
notice thereof to Borrower together with a description of such event or
circumstances. Within 10 days thereafter, Borrower will in good faith prepare
and send to Lender a written plan of how Lender will respond and what steps
Borrower will take to avoid any material adverse affect to Lender or on
Borrower's ability to perform its obligations hereunder. In all cases, Borrower
Page -16-
will respond to Lender's concerns and recommendations in this respect in good
faith. If Borrower fails to prepare and deliver such written plan within such
ten (10) day period or thereafter to comply with such plan, an Event of Default
will be deemed to occur; or
THEREUPON, in the case of any such event other than an event described in
subsection (g) or subsection (h) of this Section 7.01, the Lender may by written
notice to the Borrower immediately declare the principal of, and interest
accrued on, the Loan, forthwith due and payable, whereupon the same shall become
immediately due and payable; provided, however, that upon the occurrence of any
event described in subsection (g) or subsection (h) of this Section 7.01, the
principal of, and accrued interest on, of the Loan, shall become immediately due
and payable, both as to principal and interest, without presentment, demand,
protest, or other notice of any kind, all of which are hereby expressly waived,
anything contained herein to the contrary notwithstanding.
Upon the happening and continuance of any Event of Default specified in
this Agreement, the Lender shall be permitted to proceed to protect and enforce
its rights under this Agreement, and any of the other documents and instruments
executed and delivered in connection with this Agreement by such suits, actions
or special proceedings in equity or at law, or by proceedings in the office of
any board or officer having jurisdiction, either for specific performance of any
covenant or agreement contained herein or in aid or execution of any power
herein or therein granted or for the enforcement of any proper legal or
equitable remedy, as the Lender, being advised by counsel chosen by the Lender,
shall deem most effectual to protect and enforce such rights.
In the enforcement of any remedy described above, the Lender shall be
entitled to xxx for, enforce payment of and receive any and all amounts then or
during any Event of Default becoming or remaining due from the Borrower for
principal, interest or otherwise under any of the provisions of this Agreement,
together with interest on overdue payments at the Default Rate and all costs and
expenses of collection and of all proceedings hereunder.
SECTION 8. GOVERNING LAW AND JURISDICTION
8.01. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE REPUBLIC OF TRINIDAD AND TOBAGO WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREUNDER.
8.02. Waiver of Immunity. The Borrower hereby irrevocably agrees that
to the extent that the Borrower or any of its assets has or hereafter may
acquire any right of immunity related to or arising from the transactions
contemplated by this Agreement whether characterized as sovereign immunity or
otherwise, from any legal proceedings, to enforce or collect upon the Loan or
any other liability or obligation of the Borrower related to or arising from the
transactions contemplated by this Agreement, including, without limitation,
Page -17-
immunity from service of process, immunity from jurisdiction or judgment of any
court or tribunal, immunity from execution of a judgment, and immunity of any of
its property from attachment prior to any entry of judgment, or from attachment
in aid of execution upon a judgment, it hereby expressly and irrevocably waives
any such immunity.
8.03 Arbitration. In the event of a dispute between the parties to this
Agreement in any way related to or arising out of this Agreement or the
transactions contemplated herein ("Dispute"), each party shall attempt in good
faith to resolve the dispute promptly through negotiations. If the dispute has
not been resolved through negotiation within five (5) days after the delivery of
a notice of dispute by either party, either party may institute arbitration
proceedings at any time thereafter by delivering written demand for arbitration
to the other party in the manner described in Section 9.02. The dispute shall
then be exclusively and finally settled and resolved by binding arbitration
pursuant to the Streamlined Procedures and Comprehensive Rules of
JAMS/Endispute. All arbitration proceedings shall be held in Miami, Florida and
shall be subject to the choice of law provisions set forth in Section 8.01. For
purposes of this Section 8.03, the parties hereby waive any and all objections
to venue that they may have under the laws of any state or country, including,
without limitation, any argument that jurisdiction, situs and/or venue are
inconvenient or otherwise improper. Any decision or award of the arbitrator or
arbitration panel, as the case may be, shall be expressed in United States
dollars and shall be final and binding on the parties to the arbitration
proceeding. The parties hereby waive, to the extent permitted by law, any and
all rights to appeal or to review such award by any court or tribunal. The
parties hereto agree that the arbitral award may be enforced against the parties
to the arbitration proceeding or their assets wherever they may be found and
that a judgment upon the arbitral award may be entered in any court having
jurisdiction therefor. The procedures established in this Section 8.03 shall be
the sole, exclusive procedures for the resolution of Disputes between the
parties, provided, however, that either may seek a preliminary injunction or
other preliminary judicial relief if, in its reasonable, good-faith judgment,
such action is necessary to avoid irreparable damage. Each party further agrees
that process may be served upon such party in any manner authorized under the
laws of the Republic of Trinidad and Tobago, and waives any objections that such
party may otherwise have to such process.
SECTION 9. MISCELLANEOUS
9.01. Computations. Each determination of an interest rate or fee by
the Lender pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower in the absence of manifest error. Except as otherwise
provided herein, all computations of interest hereunder shall be made on the
basis of a year of 360 days and actual days elapsed. All such calculations shall
include the first day and exclude the last day of the period of calculation.
Page -18-
9.02. Notices. Unless otherwise specified herein, all notices or other
communication given hereunder shall be in writing and shall be given by
internationally recognized overnight courier, facsimile or personal delivery and
shall be deemed to be given or made for purposes of this Agreement two (2)
Business Days following the date when the same is sent by overnight courier or
on the day sent by facsimile or personally delivered (unless sent or delivered
after 5:00 P.M. using the time in the place to which the message is being
delivered). Unless otherwise specified in a notice delivered or received in
accordance with the foregoing provisions of this Section 9.02, all notices shall
be given to or made upon the respective parties hereto at their respective
addresses as indicated herein:
To the Borrower: To the Lender:
The Desalination Company of Trinidad and Ionics Ventures Limited
Tobago Limited c/o Ionics, Incorporated
Pacific Avenue at Maracaibo Drive 00 Xxxxx Xxxxxx
Pt. Xxxxx Xxxxxxxxxx Xxxxxxx Xxxxxxxxx, Xxxx., XXX 00000
Pt. Lisas, Trinidad, W.I. Facsimile No: (000) 000-0000
Facsimile No.: (000) 000-0000
9.03 Disposition of Indebtedness. The Lender may, without the approval
or consent of the Borrower, sell, assign, transfer, pledge, negotiate, grant
participation in or otherwise dispose of all or any part of the indebtedness of
the Borrower under this Agreement to any party, and any such party shall enjoy
all the rights and privileges of the Lender under this Agreement. The Borrower
shall accord full recognition to any such assignment, and all rights and
remedies of the Lender in connection with the interest so assigned shall be as
fully enforceable by such assignee as they were by the Lender before such
assignment. The Lender may disclose to the proposed assignee or participant and
to any Affiliate of the Lender (whether or not a proposed assignee or
participant), any information that the Borrower is required to deliver to the
Lender pursuant to this Agreement or that the Lender may otherwise have with
respect to the Borrower, its business and/or assets from time to time. The
Borrower hereby agrees to cooperate fully with the Lender in providing any such
information to any proposed assignee or participant.
9.04. Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, provided that the Borrower shall not assign or
transfer any of its interest, rights or obligations hereunder without the prior
written consent of the Lender. Lender may freely assign at any time this
Agreement and its rights and obligations hereunder.
9.05. No Waiver; Remedies Cumulative. No failure or delay on the part
of the Lender in exercising any right, power or privilege hereunder and no
course of dealing between the Borrower and the Lender shall operate as a waiver
Page -19-
thereof; nor shall any single or partial exercise of any right power or
privilege hereunder, preclude any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies, which the Lender would otherwise have.
No notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Lender to any other or further action
in any circumstances without notice or demand.
9.06. Amendment or Waiver. No course of dealing between the Lender and
the Borrower shall be effective to amend, modify or change any provision of this
Agreement. This Agreement may not be amended, discharged or terminated without
the written consent of the Lender and the Borrower, and no provision hereof may
be waived without the written consent of the Lender.
9.07. Judgment Currency. All payments of principal, interest or fees
due hereunder shall be made in Dollars, regardless of any law, rule, regulation
or statute, whether now or hereafter in existence or in effect in any
jurisdiction, which affects or purports to affect such obligations. To the
fullest extent permitted by applicable law, the obligation of the Borrower in
respect of any amount due under this Agreement shall, notwithstanding any
payment in any other currency (whether pursuant to a judgment or otherwise), be
discharged only to the extent of the amount in Dollars that the person entitled
to receive that payment may, in accordance with normal banking procedures,
purchase with the sum paid in that other currency (after any premium and costs
of exchange) on the Business Day immediately following the day on which such
person receives such payment. If the amount in Dollars that may be so purchased
for any reason falls short of the amount originally due, the Borrower shall pay
such additional amounts, in Dollars, as may be necessary to compensate for the
shortfall. Any obligation of the Borrower not discharged by such payment shall,
to the fullest extent permitted by applicable law, be due as a separate and
independent obligation and, until discharged as provided herein, shall continue
in full force and effect.
9.08 Severability. In the event that any one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid, illegal
or unenforceable in any respect, this Agreement shall be construed as if such
illegal or unenforceable provision had never been contained herein.
9.09. Prior Agreements Superseded. This Agreement constitutes the
entire understanding among the parties hereto with respect to the subject matter
hereof and supersede all prior agreements and understandings, if any, and any
representations, whether verbal or written, made by or on behalf of the Lender
to the Borrower relating to the subject matter hereof. The Lender shall have
only such duties and obligations as are expressly specified in this Agreement
and no duties, obligations or fiduciary responsibilities shall be implied to the
Lender. Each of the parties hereto hereby further agrees that the Lender shall
be deemed to have acted in good faith to the extent that the Lender performs its
Page -20-
obligations in accordance with the terms of this Agreement. This Agreement was
drafted with the joint participation of the Borrower and the Lender and shall be
construed neither against nor in favor of either of them, but rather in
accordance with the fair meaning thereof.
9.10. Survival of Representations. All representations and warranties
made herein shall survive the execution and delivering of this Agreement shall
continue in full force and effect so long as the Loan is outstanding and unpaid.
9.11. Limit on Interest. Anything herein to the contrary
notwithstanding, the obligations of the Borrower under this Agreement shall be
subject to the limitation that payments of interest to the Lender shall not be
required to the extent that receipt of any such payment by the Lender would be
contrary to provisions of law applicable to the Lender (if any) which limit the
maximum rate of interest which may be charged or collected by the Lender;
provided, however, that nothing herein shall be construed to limit the Lender to
presently existing maximum rates of interest, if an increased interest rate is
hereafter permitted by reason of applicable federal or state legislation. In the
event that the Borrower makes any payment of interest, fees or other charges,
however denominated, pursuant to this Agreement, which payment results in the
interest paid by the Borrower to the Lender to exceed the maximum rate of
interest permitted by applicable law, any excess over such maximum shall be
applied in reduction of the principal balance owed to the Lender as of the date
of such payment, or if such excess exceeds the amount of principal owed to the
Lender as of the date of such payment, the difference shall be paid by the
Lender to the Borrower.
9.12. Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original and all of
which when taken together shall constitute but one and the same instrument.
9.13. Indemnification. The Borrower hereby agrees to defend, protect,
indemnify, and hold harmless the Lender and each of its Affiliates, officers,
directors, employees, attorneys and agents (collectively, the "Indemnitees")
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees, or any of them, in any manner relating to or
arising out of the Agreement or any act, event or transaction related or
attendant hereto or thereto, the funding of the Loan or the use or intended use
of the proceeds of the Loan (collectively, the "Indemnified Matters"); provided,
however, the Borrower shall not be obligated to indemnify and hold harmless any
Indemnitee hereunder with respect to any Indemnified Matter to the extent any
loss or damage suffered or incurred by such Indemnitee is caused by or results
from the willful misconduct or gross negligence of such Indemnitee, as
Page -21-
determined by a final, non-appealable order of a court of competent
jurisdiction. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, the Borrower shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law, to the
payment and satisfaction of all Indemnified Matters incurred by the Indemnitees.
9.14. Collection Costs. The Borrower hereby agrees to pay all costs and
expenses incurred by the Lender, including reasonable attorneys' fees (including
those for appellate proceedings), incurred in connection with any Event of
Default, or in connection with the collection or attempted collection or
enforcement of Borrower's obligations under this Agreement, or in connection
with the protection of any collateral given as security for the payment of
Borrower's obligations under this Agreement, whether or not legal proceedings
may have been instituted.
9.15. Rights of Third Parties. All conditions of the Lender hereunder
are imposed solely and exclusively for the benefit of the Lender and its
successors and assigns, and no other person shall have standing to require
satisfaction of such conditions or be entitled to assume that the Lender will
make the Loan in the absence of strict compliance with any and all other
provisions thereof, and no other person shall, under any circumstances, be
deemed to be a beneficiary of this Agreement, any provisions of which may be
freely waived in whole or in part by the Lender at any time if, in its sole
discretion, it deems it desirable to do so.
9.16. The Borrower Not the Lender's Agent. Nothing in this Agreement
shall be construed to make the Borrower the Lender's agent for any purpose
whatsoever, the Borrower and the Lender partners, or joint or co-venturers, and
the relationship of the parties shall, at all times, be that of debtor and
creditor.
9.17. Waiver of Defenses. The Borrower hereby waives presentment for
payment, demand, protest, notice of dishonor, notice of acceleration of
maturity, and all defenses on the ground of extension of time for payment of
Borrower's obligations under this Agreement, and agree to continue and remain
bound for the payment of principal, interest and all other sums payable
hereunder, notwithstanding any change or changes by way of release, surrender,
exchange or substitution of any security for the Loan or by way of any extension
or extensions of time for payment of principal or interest. The Borrower further
hereby waives all and every kind of notice of such change or changes and agrees
that the same may be made without notice to or consent of the Borrower.
Page -22-
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be effective as of the date first above written, but have in fact
caused this Agreement to be duly executed and delivered as of this 31st day of
July, 2003.
Lender: Borrower:
IONICS VENTURES THE DESALINATION COMPANY OF
LIMITED TRINIDAD AND TOBAGO LIMITED
By: /s/Xxxx Xxxx By: /s/Xxxxxx Xxxxxxxx
----------------------------------- -------------------------------------
(Signature) (Signature)
Name: Xxxx Xxxx Name: Xxxxxx Xxxxxxxx
----------------------------------- ------------------------------------
(Print) (Print)
Title: Director Title: Chairman
----------------------------------- ------------------------------------
(Print) (Print)
By: /s/Xxxx X. Xxxxxxxx
------------------------------------
(Signature)
Name: Xxxx X. Xxxxxxxx
-------------------------------------
(Print)
Title: General Manager
-------------------------------------
(Print)
Page -23-
Exhibit A to Loan Agreement dated as of July 31, 2003 between Desalination
Company of Trinidad and Tobago Limited and Ionics Ventures Ltd.
Amortization Schedule(U.S. Dollars)
loan amount = 10,000,000
10.50% (1) note below
--------------------------------------------------------------
-10,000,000.00 -3,906,250.00
--------------------------------------------------------------
principal Total Principal
principal balance interest and Interest
31-Jul-03 10,000,000
31-Oct-03 1 -357,142.86 9,642,857.1 ($271,250) $9,914,107
31-Jan-04 2 -357,142.86 9,285,714.3 ($261,563) $9,547,277
30-Apr-04 3 -357,142.86 8,928,571.4 ($246,458) $9,175,030
31-Jul-04 4 -357,142.86 8,571,428.6 ($242,188) $8,813,616
31-Oct-04 5 -357,142.86 8,214,285.7 ($232,500) $8,446,786
31-Jan-05 6 -357,142.86 7,857,142.9 ($222,813) $8,079,955
30-Apr-05 7 -357,142.86 7,500,000.0 ($206,250) $7,706,250
31-Jul-05 8 -357,142.86 7,142,857.1 ($203,438) $7,346,295
31-Oct-05 9 -357,142.86 6,785,714.3 ($193,750) $6,979,464
31-Jan-06 10 -357,142.86 6,428,571.4 ($184,063) $6,612,634
30-Apr-06 11 -357,142.86 6,071,428.6 ($168,750) $6,240,179
31-Jul-06 12 -357,142.86 5,714,285.7 ($164,688) $5,878,973
31-Oct-06 13 -357,142.86 5,357,142.9 ($155,000) $5,512,143
31-Jan-07 14 -357,142.86 5,000,000.0 ($145,313) $5,145,313
30-Apr-07 15 -357,142.86 4,642,857.1 ($131,250) $4,774,107
31-Jul-07 16 -357,142.86 4,285,714.3 ($125,938) $4,411,652
31-Oct-07 17 -357,142.86 3,928,571.4 ($116,250) $4,044,821
31-Jan-08 18 -357,142.86 3,571,428.6 ($106,563) $3,677,991
30-Apr-08 19 -357,142.86 3,214,285.7 ($94,792) $3,309,077
31-Jul-08 20 -357,142.86 2,857,142.9 ($87,188) $2,944,330
31-Oct-08 21 -357,142.86 2,500,000.0 ($77,500) $2,577,500
31-Jan-09 22 -357,142.86 2,142,857.1 ($67,813) $2,210,670
30-Apr-09 23 -357,142.86 1,785,714.3 ($56,250) $1,841,964
31-Jul-09 24 -357,142.86 1,428,571.4 ($48,438) $1,477,009
31-Oct-09 25 -357,142.86 1,071,428.6 ($38,750) $1,110,179
31-Jan-10 26 -357,142.86 714,285.7 ($29,063) $743,348
30-Apr-10 27 -357,142.86 357,142.9 ($18,750) $375,893
31-Jul-10 28 -357,142.86 - ($9,688) $9,688
-10,000,000.00
Note: The interest rate is subject to change with (1) the participation of a
development bank in a carve-out of Republic Bank's US$ tranche (as described in
the term loan) and/or (2) a change in the US$ interst rate in the term loan in
years 6 & 7.
Page -24-
EXHIBIT B TO THE LOAN AGREEMENT DATED JULY 31, 0000
Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx
X.X.X.
SWIFT ID: XXXXXX00
Account # 9429241852
Acount Name: Ionics Ventures Ltd.
Page -25-
EXHIBIT C TO THE LOAN AGREEMENT DATED JULY 31, 2003
[Amounts held back for Certain Works to be completed by Ionics Constructors]
Certain Works US$ Value Held
Allowance for outstanding punchlist 1,000,000.00
items
Allowance for outstanding defects 1,000,000.00
Allowance for landscaping, paving,
drainage and fencing
500,000.00
Allowance for warranty work
performed by Desalcott
500,000.00
