Exhibit 10.48
April 25, 2001
PRIVATE & CONFIDENTIAL
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Consolidated Water Co. Ltd.
Box 1114
Grand Cayman, B.W.I.
ATTENTION: RICK MCTAGGART
Dear Sir:
RE: CONFIRMATION OF CREDIT FACILITIES
Further to our recent discussions, and subject to the undernoted terms and
conditions, we are pleased to offer you financing as follows:
LENDER: ROYAL BANK OF CANADA (The "Bank")
BORROWER: CONSOLIDATED WATER CO. LTD.(The "Borrower")
AMOUNT: Segment 1) $1,000,000 - Overdraft, revolving
Segment 2) $3,500,000 - Standby Line
CURRENCY: All dollar amounts in this letter refer to
United States funds, unless otherwise
specified.
PURPOSE: Segment 1) General Operating purposes
Segment 2) General Corporate purposes
INTEREST RATES: Segment 1) USD/KYD Prime + 1%/LIBOR + 1.50%
Segment 2) LIBOR + 1.50%
The Borrower shall pay interest monthly in
arrears on Prime-based facilities at the
annual rate set out above calculated on a
daily basis and based on the actual number of
days elapsed in the period for which interest
is being calculated divided by 365. The annual
rates of interest to which the rates
calculated in accordance with the foregoing
provisions are equivalent, are the rates so
determined multiplied by the actual number of
days in a one year period calculated from the
first day on which interest is to be
calculated and divided by 365. These rates
apply after as well as before maturity,
default, and judgement, with interest on
overdue interest at the same rate as on the
principal.
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LIBOR LOANS:
Interest on LIBOR loans shall be payable on
each LIBOR interest date. The yearly rates of
interest to which the rates determined in
accordance with the LIBOR provisions of this
agreement are equivalent, are rates so
determined multiplied by the actual number of
days in a year and divided by 360.
SERVICE PRICING: a) An annual review fee of 1/16% ($2,800
this year) will be charged to cover the
administration involved in reviewing the
company's financial information and
re-establishing facilities.
b) Any temporary excesses/amendments and
additional credit requirements are
subject to approval and may be assessed
a fee of up to 1/2%, minimum $1,000.
c) A fee of 1/2% will be associated with
each draw down under Segment 2.
REPAYMENT: Segment 1) Revolving; repayment in full upon
demand.
Segment 2) Undrawn portion - 1 year,
extendable term. Drawn amounts -
Monthly payments over a maximum 5
year term, 10 year amortization.
PROHIBITED INTEREST - Nothing in this
agreement shall be construed as obliging the
Borrower to pay any interest, charges or other
expenses as provided by this agreement or in
any other security agreement related thereto
in excess of what is permitted by law.
PREPAYMENTS: Segment 1) may be prepaid in whole or in part
without penalty.
Segment 2) may only be repaid at maturity
(maturity of each term, i.e., 30 days, 60
days, 90 days etc.).
SECURITY: GENERAL SECURITY FOR ALL LOANS
Certified copy of directors' resolutions,
bylaws, legal opinions and attendant documents
as may be requested by the Bank.
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Fixed & floating charge debenture for
USD$2,500,000, with fixed charge covering West
Bay Beach North, Block 11D, Parcel 8 and
collateral charge covering Governor's Harbour
property and floating charge covering all
other assets of the Borrower (To be up stamped
to USD$4,500,000 as Segment 2) drawn down).
Guarantee & Postponement of Claim in favour of
Consolidated Water Co. Ltd. signed by Cayman
Water Company Limited.
INSURANCE: The Borrower will lodge with the Bank
comprehensive insurance policies satisfactory
to the Bank, covering buildings, equipment and
inventory with loss made payable firstly to
the Bank.
REPRESENTATIONS,
WARRANTIES &
ACKNOWLEDGMENTS: The Borrower represents and warrants to the
Bank that:
1) it is a corporation validly incorporated
and subsisting under the laws of Cayman
Islands, and that it is duly registered
or qualified to carry on business in all
jurisdictions where the character of the
properties owned by it or the nature of
its business transacted makes such
registration or qualification necessary;
2) the execution and delivery of this
Agreement has been duly authorized by
all necessary actions and does not (i)
violate any law or, any provision of the
charter or any unanimous shareholders
agreement to which it is subject or,
(ii) result in a breach of, a default
under, or the creation of any
encumbrance on the properties and assets
of it under any agreement or instrument
to which it or any of its properties and
assets may be bound or affected.
3) There is no provision in the Borrower's
articles, bylaws or any unanimous
shareholder agreement respecting the
ability of the Borrower to:
a) borrow money upon the credit of
the Borrower;
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b) issue, reissue, sell or pledge
debt obligations of the Borrower;
c) give a guarantee on behalf of the
Borrower to secure performance of
an obligation to any person; and
d) mortgage, hypothecate, pledge or
otherwise create a security
interest in all or any property of
the Borrower, owned or
subsequently acquired, to secure
any debt obligation of the
Borrower.
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4) The Borrower is in compliance with all
applicable statutes, regulations, orders
and bylaws enacted or adopted for the
protection and conservation of the
natural environment.
5) The Borrower has obtained all
certificates, approvals, permits,
consents, orders and directions required
concerning the installation or operation
of any machinery, equipment or facility
constituting assets of the Borrower, or
required concerning any land of the
Borrower, or required concerning any
structure, activity or facility on or in
any land of the Borrower, and the
Borrower is not aware of any
circumstance which might give rise to
the revocation of any such certificates,
approvals, permits, consents, orders and
directions or the implementation of
further orders or directions relating to
the above which might affect the land or
the business of the Borrower which the
Borrower has not disclosed fully in
writing to the Bank.
COVENANTS: The Borrower, by accepting this Offer, agrees:
1) to deliver to the Bank such financial
and other information as the Bank may
reasonably request from time to time,
including but not limited to the
following:
a) audited financial statements
within 90 days after each fiscal
year end.
b) quarterly company prepared
financial statements within 30
days following each quarter end.
2) not to grant or create any security
interest, lien, charge or encumbrance
affecting any of its properties or
assets, except for any security interest
granted to secure an obligation created
solely for the purchase of additional
fixed assets required for the efficient
operation of its business with any such
security to cover only the assets
purchased.
3) Debt to Equity shall not exceed 0.85.
"Equity" is defined as the total of
share capital, contributed surplus,
retained earnings and postponed
shareholder loans MINUS intangible
assets and amounts owed to the
Borrower by shareholders/associated
companies.
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4) to maintain a Debt Servicing ratio of
not less than 1.25 (earnings before
interest, depreciation and amortization
divided by principal and interest on all
debt).
All covenants in this agreement or any other
agreement between the Borrower and the Bank or
other documentation or security will remain in
force for the benefit of the Bank at all times
before and after the making of advances
hereunder and/or the taking of security
pursuant hereto.
OTHER CONDITIONS: If the Bank chooses to grant forbearance or a
waiver of any of the terms and conditions of
this letter, this action will not affect the
Bank's ability to act on any subsequent breach
or default or the rights of the Bank resulting
therefrom.
EVIDENCE OF
INDEBTEDNESS: The Bank shall open and maintain at the Branch
of Account, accounts and records evidencing
the Borrowings made available to the Borrower
by the Bank under this agreement. The Bank
shall record the principal amount of such
Borrowings, the payment of principal and
interest on account of the loans, and all
other amounts becoming due to the Bank under
this agreement.
The Bank's accounts and records constitute, in
the absence of manifest error, PRIMA FACIE
evidence of the indebtedness of the Borrower
to the Bank pursuant to this agreement.
The Borrower authorizes and directs the Bank
to automatically debit, by mechanical,
electronic or manual means, any bank account
of the Borrower for all amounts payable under
this agreement, including but not limited to,
the repayment of principal and the payment of
interest, fees and all charges for the keeping
of such account.
EVENTS OF DEFAULT: Without limiting the Bank's right to make
demand for payment at any time on demand
loans, the Bank may immediately withdraw the
Borrower's right to further borrow under this
agreement, demand immediate repayment of all
amounts outstanding, together with outstanding
accrued interest and realize on all or any
portion of the security granted to the Bank if
any of the following events of default occur:
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1) Failure of the Borrower to pay any
principal, interest or other amounts
when due pursuant to this agreement;
2) Failure of the Borrower to observe or
perform any covenant, condition or
provision in this agreement or other
documentation or security;
3) If the Borrower becomes insolvent,
commits an act of bankruptcy, makes an
assignment of property for the benefit
of its creditors, or enters into a bulk
sale of its assets without the prior
written approval of the Bank;
4) If any proceeding is taken with respect
to a compromise or arrangement with the
creditors of the Borrower, including
under the Companies' Creditors
Arrangement Act or to have the Borrower
declared bankrupt or wound up, or to
have a Receiver or Receiver Manager
appointed of any part of the mortgaged
property or if any encumbrancer takes
possession of any part thereof;
5) There occurs, in the sole opinion of
the Bank:
(a) a material adverse change in the
financial condition of the
Borrower; or
(b) an unacceptable change in
ownership of the Borrower; or
(c) legal implications detrimental to
the affairs of the Borrower;
CONDITIONS PRECEDENT: The obligation of the Bank to make these
credit facilities available to the Borrower is
subject to and conditional upon all security
and/or documentation being completed and
registered in form and substance satisfactory
to the Bank.
REVISION DATE: Without limiting any rights the Bank may have
to demand payment, these credit facilities
will be subject to review at the Bank's
discretion and at least annually.
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LEGAL COSTS: All legal costs, fees, expenses, etc.
incurred in establishing these credit
facilities, preparation and maintenance of
security and documentation are for account of
the Borrower.
ACCEPTANCE: This offer expires if not accepted in writing
by May 15th, 2001, unless extended in writing
by the Bank.
Please acknowledge your acceptance of the above terms and conditions by signing
the attached copy of this Offer to Finance in the space provided below and
returning to the undersigned. This Offer to Finance cancels and supersedes any
previous Offers.
Yours truly,
ROYAL BANK OF CANADA
/s/ G.C. Plamondon
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G.C. PLAMONDON,
Sr. Assistant Manager
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WE ACKNOWLEDGE AND ACCEPT THE WITHIN TERMS AND CONDITIONS THIS 27TH DAY OF
APRIL , 2001.
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CONSOLIDATED WATER CO. LTD.
PER: /s/ Frederick W. Mctaggart
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President and COO
PER: /s/ Peter D. Ribbins
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Director/Secretary
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