EXHIBIT 2.5
DATED: OCTOBER 4TH , 2002
SHARE SALE AGREEMENT
BETWEEN
CONSOLIDATED WATER CO. LTD.
AND
NORTH-AMERICAN MORTGAGE & FINANCE CORPORATION
AND
TRANSCONTINENTAL FINANCE CORPORATION LIMITED
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
ZEPHYR HOUSE
P.O. BOX 709 GT
▇▇▇▇ STREET
GRAND CAYMAN
CAYMAN ISLANDS
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SHARE SALE AGREEMENT
THIS SHARE SALE AGREEMENT is made this 4th day of October 2002,
BETWEEN:
1. CONSOLIDATED WATER CO. LTD., formerly Cayman Water Company Limited, of
Trafalgar Place, West Bay Road, P.O. Box 1114 GT, Grand Cayman
(hereinafter "the Purchaser") of the first part; and
2. NORTH-AMERICAN MORTGAGE & FINANCE CORPORATION of Elizabethan Square,
▇▇▇▇▇▇ Town, Grand Cayman (hereinafter "NAMF") and TRANSCONTINENTAL
FINANCE CORPORATION LIMITED, of Elizabethan Square, ▇▇▇▇▇▇ Town, Grand
Cayman, (hereinafter "TCF") (together the "Vendors") of the second
part.
WHEREAS:
The Purchaser wishes to acquire, inter alia, the issued share capital of Ocean
Conversion (Cayman) Limited and Ocean Conversion (BVI) Ltd. owned by the Vendors
from the Vendors on the terms of this Agreement.
NOW IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1. In this Agreement the following words and expressions have the
following meanings (save where (1) expressly otherwise
provided or (2) the Agreement otherwise requires):
"▇▇▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
"▇▇▇▇▇▇▇ Agreement" means the Share Sale Agreement between the
Purchaser and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ of
even date a copy of which (excluding Schedule 9 thereto), is
attached as Schedule 5;
"Affiliates" means at any time with respect to a person,
another person that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is
under common control with, such person;
"Assignments" means the assignment by NAMF to the Purchaser of
its interest in the Profit Sharing Agreement dated December
3rd 1993 (as amended) made between OCBVI and NAMF and the
assignment by EGL to the Purchaser of its interest in the
Profit Sharing Agreement dated December 3rd 1993 (as amended)
made between OCBVI and EGL both in the form set out in
Schedule 8 hereto.
"Binder Volumes" means the files of documents referred to in
clause 9 of Schedule 2, the indexes of which have been marked
and initialed by way of confirmation of the contents of such
files;
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"Business" means the business of the supplying, installation,
management and operation of seawater desalination plants, as
carried out by the Companies on the date of this Agreement;
"Business Day" means a day on which class A licensed banks are
open for business in the Cayman Islands;
"BVI Water Agreement" means An Agreement to Produce Potable
Water from Seawater between The Government of the British
Virgin Islands and Reliable Water Company, Inc., dated 9 May
1990, as amended by a Supplemental Agreement, dated 14 March
1991, and a Supplemental Agreement #2, dated 24 January 1992;
"Cash Consideration" shall mean the cash consideration payable
by the Purchaser to the Vendors as calculated pursuant to
clause 3.1.1;
"Companies" means the companies listed in Schedule 1 in which
the Vendors hold issued shares as set out in Schedule 1 or,
where the context requires, either of them individually and
"Company" shall be construed accordingly. The individual
Companies shall be referred to in this Agreement by the
initials appearing next to their names in Schedule 1.
"Consideration Shares" has the meaning assigned thereto in
clause 3.1.2;
"Completion" means completion of the sale and purchase of the
Shares;
"Deed of Termination" means the Deed of Termination of the
Profit Sharing Agreement dated July 13th 1993 between EGL and
OCC by EGL in favour of OCC in the form attached at Schedule
10;
"Disclosure Letters" means the OCC Disclosure Letter and the
OCBVI Disclosure Letter or, where the context requires, either
of them;
"EGL" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Limited, a Bermuda company;
"EGL Indemnity" means the indemnity to be given to EGL by the
Purchaser in the form attached as Schedule 12 hereto;
"Guarantees" means the guarantees given to persons other than
the Purchaser in respect of the Companies by the Vendors and
EGL, listed at Schedule 6 hereto or, where the context
requires, each of such guarantees individually and "Guarantee"
shall be construed accordingly;
"the Licences" means A Licence to Produce Water from Seawater
provided to Ocean Conversion (Cayman) Limited by the
Government of the Cayman Islands dated April 25, 1994, a
Licence to Produce and Supply Potable Water from Seawater
provided to Ocean Conversion (Cayman) Ltd. by the Government
of the Cayman Islands dated June 18, 1997 and a Licence to
Produce and Supply Water from Seawater provided to Ocean
Conversion (Cayman) Ltd. by the Government of the Cayman
Islands dated December 31, 2001, all as amended;
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"Last Accounts" means the audited accounts of the Companies as
at June 30th, 2002;
"Last Accounts Date" means June 30th, 2002;
"Lock up Letter" means a letter related to the Consideration
Shares to be delivered by NAMF to the Purchaser in the form
attached at Schedule 11 hereto;
"NAMF Deed of Release" means the deed of release by NAMF in
the form set out in Schedule 3.
"NAMF Indemnity" means the indemnity to be given to NAMF by
the Purchaser in the form attached as Schedule 12 hereto;
"NSD Licence" means a Licence to Produce and Supply Water from
Seawater provided to Ocean Conversion (Cayman) Ltd. by the
Government of the Cayman Islands dated December 31, 2001;
"OCBVI's Auditors" means Deloitte & Touche, British Virgin
Islands;
"OCC's Auditors" means Deloitte & Touche, Cayman Islands;
"OCBVI Shares" means the shares of OCBVI held by the Vendors
as set out in Schedule 1;
"OCBVI Disclosure Letter" means the letter dated the date
hereof written by or on behalf of the Vendors to the Purchaser
and signed by the Vendors, relating to OCBVI;
"OCC Disclosure Letter" means the letter dated the date hereof
written by or on behalf of the Vendors to the Purchaser and
signed by the Vendors, relating to OCC;
"OCC Shares" means the shares of OCC held by the Vendors as
set out in Schedule 1;
"Purchase Price" means the consideration payable and the
shares of the Purchaser to be allotted and issued by the
Purchaser to the Vendors as provided in clause 3.1;
"Registration Rights Agreement" means the Registration Rights
Agreement in the form attached at Schedule 11 hereto;
"RGT Licence" means A Licence to Produce Water from Seawater
provided to Ocean Conversion (Cayman) Limited by the
Government of the Cayman Islands dated April 25, 1994, as
amended by an Amendment to a Licence and a Supplemental
Licence to a Licence between the same parties both dated 29
February 1996 and further amended by an Amendment to a Licence
between the same parties dated 30 January 2001;
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"Shares" means the OCBVI Shares and the OCC Shares;
"Side Letter" means the Side Letter in the form attached at
Schedule 11 hereto;
"TCF Deed of Release" means the deed of release by TCF in the
form set out in Schedule 3;
"Warranties" means the warranties and representations by the
Vendors in clause 6;
1.2. All references in this Agreement to a statutory provision
shall be construed as including references to:
1.2.1. Any statutory modification, consolidation or
re-enactment thereof being in force at Completion;
1.2.2. All statutory instruments or orders made pursuant to
such statutory provision; and
1.2.3. Any statutory provisions of which such statutory
provision is a consolidation, re-enactment or
modification.
1.3. In this Agreement any word or expression that imports any
gender shall include all genders and the singular shall
include the plural and vice versa.
1.4. Clause headings in this Agreement are for ease of reference
only and do not affect the construction of any provision.
1.5. The schedules hereto form part of this Agreement and shall
have effect as if set out herein. Any reference to this
"Agreement" (whether in this Agreement or in the schedules
hereto) shall include both this Agreement and the schedules
hereto.
2. AGREEMENT FOR SALE
Subject to the terms and conditions of this Agreement, the Vendors
shall sell as beneficial owners and the Purchaser shall purchase the
Shares, free from all liens, charges and encumbrances and with all
rights attaching to them, with effect from Completion and the Vendors
shall execute the Assignments and the Deed of Termination.
3. PURCHASE CONSIDERATION
3.1. The Purchase Price for the Shares and the Assignments shall
be:-
3.1.1. the cash portion of US$14,600,000.00, subject to
adjustment pursuant to clauses 3.2 to 3.5 inclusive
in the order that such clauses are set out below; and
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3.1.2. the allotment and issue at Completion to NAMF of
185,714 fully paid ordinary shares of a nominal or
par value of CI$1.00 each in the capital of the
Purchaser, credited as fully paid and nonassessable
("the Consideration Shares") which Consideration
Shares shall entitle NAMF to the benefit of the
Registration Rights Agreement.
3.2. The cash portion of US$14,600,000.00 provided for in clause
3.1.1 shall be adjusted (by increasing if the amount is
positive or decreasing if the amount is negative the same as
necessary) by an amount equal to:
3.2.1. 90.91% of the difference between "Actual Gross Equity
of OCC" and "Calculated Gross Equity of OCC"; and
3.2.2. 47.77% of the difference between "Actual Gross Equity
of OCBVI" and "Calculated Gross Equity of OCBVI".
"Actual Gross Equity of OCC" is the sum of "Shareholders'
Equity" and the "Profit Sharing Agreement Provision" as they
appear on the balance sheet of OCC, as at the end of the
calendar month immediately prior to Completion. This amount
shall be agreed by the parties and in the absence of agreement
reached five Business Days prior to Completion shall be
determined at the expense of the Purchaser by OCC's Auditors.
"Actual Gross Equity of OCBVI" is the sum of "Shareholders'
Equity" and the "Profit Sharing Provision" as they appear on
the balance sheet of OCBVI, as at the end of the calendar
month immediately prior to Completion. This amount shall be
agreed by the parties and in the absence of agreement reached
five Business Days prior to Completion shall be determined at
the expense of the Purchaser by OCBVI's Auditors.
3.3. For the purposes of clause 3.2:
3.3.1. "Calculated Gross Equity of OCC" shall mean:
3.3.1.1. US$6,291,000 if Completion is on or between
1st and 31st October, 2002.
3.3.1.2. US$6,425,000 if Completion is on or between
1st and 30th November, 2002.
3.3.2. "Calculated Gross Equity of OCBVI" shall mean:
3.3.2.1. US$6,614,000 if Completion is on or between
1st and 31st of October, 2002.
3.3.2.2. US$6,890,000 if Completion is on or between
1st and 30th November, 2002.
3.4. The parties agree that the cash portion of US$14,600,000.00
provided for in clause 3.1.1 as adjusted by clause 3.2 (and
applying the provisions of
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clause 3.3) is based on the assumption that the business of
the Companies, shall, from the end of the calendar month
immediately prior to Completion until the date of Completion,
be conducted and operated in its usual and normal manner and
that they do not suffer or incur any extraordinary,
nonrecurring or unusual losses or expenses or make any
dividend payments. To the extent that such losses or expenses
are incurred or dividends paid during the period
aforementioned, the cash portion of US$14,600,000.00 provided
for in clause 3.1.1 as adjusted by clause 3.2 (and applying
the provisions of clause 3.3) shall be decreased as follows:
3.4.1. in relation to OCBVI, by 47.77% of the impact of
such events on Actual Gross Equity of OCBVI during
the period aforementioned; and
3.4.2. in relation to OCC, by 90.91% of the impact of such
events on Actual Gross Equity of OCC during the
period aforementioned.
The parties shall agree the amount of any decrease under
clauses 3.4.1 and/or 3.4.2; provided that in the absence of
agreement as to the amount of such decrease by or on
Completion the Purchaser may retain such amount of the
Purchase Price as is reasonable and following Completion the
amount of the decrease in the Purchase Price shall be
determined as soon as reasonably possible at the expense of
the Purchaser by the relevant Company's Auditors. Within five
(5) working days of such determination, in the event that the
amount so retained exceeds the amount so determined the
difference shall be paid by the Purchaser to the Vendors and
in the event that the amount so retained is less than the
amount so determined the difference shall be paid by the
Vendors to the Purchaser.
3.5. The cash portion of US$14,600,000.00 as provided for in clause
3.1.1, as adjusted by clauses 3.2 to 3.4 (inclusive) above
shall be further adjusted by increasing the same by a simple
interest factor calculated on the same at the rate of 12.5%
per annum (based on a 365 day year) calculated daily for the
period of July 1, 2002 until the date of Completion.
3.6. The Cash Consideration shall be paid, at the option of TCF, by
way of bankers draft drawn on a Cayman Islands class A
licensed bank or wire transfer to TCF and receipt thereof by
TCF shall be a good and final discharge of the Purchaser's
obligation to make such payment to the Vendors.
4. CONDITIONS PRECEDENT, RESCISSION AND OTHER PRE-COMPLETION MATTERS
4.1. Completion is conditional on the following conditions
precedent, all of which are for the benefit of the Purchaser:
4.1.1. the contemporaneous completion of the ▇▇▇▇▇▇▇
Agreement;
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4.1.2. the approval in writing of the Governor in Council of
the Cayman Islands to the purchase by the Purchaser
of the OCC Shares pursuant to the Licences;
4.1.3. the approval in writing of the Government of the
British Virgin Islands for the Purchaser to be a
member of OCBVI pursuant to the BVI Water Agreement.
NAMF agrees that it shall cause OCBVI to use its best
efforts to obtain such approval. The Purchaser agrees
that it shall use its best efforts to assist OCBVI in
obtaining such approval; and
4.1.4. The approvals and acceptance of resignations
described in clause 7.1 below being obtained.
4.2. If either of the condition precedents 4.1.2 or 4.1.3 above is
not fulfilled (or, at the option of the Purchaser, waived in
writing) or if the ▇▇▇▇▇▇▇ Agreement is validly rescinded in
accordance with the terms thereof by or on October 31, 2002,
(or such later date as the parties may in writing agree) this
Agreement shall cease to have effect and each party shall have
no further claim under it against the other.
4.3. If condition precedent 4.1.1 above is not fulfilled by or on
October 31, 2002 (or such later date as the parties may agree
in writing) (1) the Purchaser may, provided the
non-fulfillment of such condition precedent is due to an act
or omission of the Vendors or the ▇▇▇▇▇▇▇ and (2) the Vendors
may, provided the non-fulfillment of such condition precedent
is due to an act or omission of the Purchaser either:
4.3.1. defer Completion not more than 28 days after the due
date and the provisions of this clause 4.3, including
this sub-clause, shall apply to Completion as so
deferred; or
4.3.2. in the case of the Purchaser, waive condition
precedent 4.1.1 and pursue all remedies available to
it; or
4.3.3. in the case of the Vendors, proceed to Completion so
far as practicable (without prejudice to its rights
hereunder) and pursue all other remedies available to
it as if condition precedent 4.1.1 did not exist; or
4.3.4. rescind this Agreement in which case this Agreement
shall cease to have effect and each party shall have
no further claim under it against the other.
5. COMPLETION
5.1. Completion shall take place at the offices of the Purchaser's
attorneys, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, 4th Floor
Zephyr House, ▇▇▇▇ Street, ▇▇▇▇▇▇ Town, Grand Cayman
on November 29, 2002 at 10:00 in
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the forenoon or such earlier date as the Purchaser may specify
after giving five Business Days notice to the Vendors.
5.2. At Completion, with regard to OCC, the Vendors shall deliver
(or procure the delivery, as the case may be) to the Purchaser
of the following:
5.2.1. duly completed and signed transfers in favour of the
Purchaser of the OCC Shares together with the
relevant share certificates;
5.2.2. the TCF Deed of Release duly executed by TCF;
5.2.3. the resignations of all of the directors and officers
of OCC (other than ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇) with a written
acknowledgement in such form as the Purchaser may
require that such persons have no claim against OCC;
5.2.4. the Deed of Termination duly executed by EGL and OCC;
and
5.2.5. the opinion of TCF's counsel, ▇▇▇▇▇▇▇▇'▇
Attorneys-at-Law, in relation to TCF in the form set
out in Schedule 9.
5.3. At Completion, with regard to OCBVI, the Vendors shall deliver
(or procure the delivery, as the case may be) to the Purchaser
of the following:
5.3.1. duly completed and signed transfers in favour of the
Purchaser or, if so required by clause 8.3 below, in
favour of DesalCo Limited, of the OCBVI Shares
together with the relevant share certificates;
5.3.2. the NAMF Deed of Release duly executed by NAMF;
5.3.3. the resignations of all of the directors of OCBVI
appointed by NAMF and the resignations of Sir ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Lt. Col. ▇▇▇▇▇ ▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇ from any position they have as officers
of OCBVI with a written acknowledgement in such form
as the Purchaser may require that such persons have
no claim against OCBVI;
5.3.4. the duly executed Assignments; and
5.3.5. the opinion of NAMF's counsel, ▇▇▇▇▇▇▇▇'▇
Attorneys-at-Law, in relation to NAMF in the form set
out in Schedule 9.
5.4. At Completion or as soon as practicable thereafter, with
regard to OCC, the Vendors shall deliver or make available to
the Purchaser:
5.4.1. The seals, including any duplicates, and Certificates
of Incorporation of the OCC, and the Certificate of
Change of Name of OCC;
5.4.2. The statutory books, books of account and records of
OCC, complete and up to date, all in a method of
transmittal reasonably
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satisfactory to the Purchaser provided that the
Vendors may retain and keep copies of all records
relating to the sale of the Shares contemplated
hereby; and
5.4.3. The appropriate forms to amend the mandates given by
the Companies to their bankers.
5.5. At Completion:
5.5.1 NAMF shall execute, date and deliver to the Purchaser
the Lock-up Letter, the Side Letter and the
Registration Rights Agreement; and
5.5.2 the Vendors shall repay all monies then owing by them
to the Companies, whether due for payment or not.
5.6. At or prior to Completion board meetings of OCC shall be held
(or resolutions passed) at which:
5.6.1. Such persons as the Purchaser may nominate shall be
appointed additional directors and officers;
5.6.2. the transfers of the OCC Shares referred to in clause
5.2.1 shall be approved; and
5.6.3. The resignations referred to in clause 5.2.3 shall be
submitted and accepted.
5.7. At or prior to Completion board meetings of OCBVI shall be
held (or resolutions passed) at which:
5.7.1. the transfers of the OCBVI Shares referred to in
clause 5.3.1 shall be approved;
5.7.2. the resignations referred to in clause 5.3.3 shall be
accepted; and
5.7.3. the Assignments shall be approved.
5.8. At or prior to Completion the Purchaser shall deliver to the
Vendors a copy of a resolution of the board of directors of
the Purchaser approving and authorizing the execution and
delivery of this Agreement and all documents related to the
transactions contemplated by this Agreement and the allotment
and issue of the Consideration Shares as fully paid and non-
assessable.
5.9. On Completion the Purchaser shall:
5.9.1. pay the Cash Consideration, in the manner as set out
in clause 3.6;
5.9.2. deliver to the Vendors a duly executed release of the
guarantee by EGL in respect of the obligations of OCC
in favour of the
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Purchaser dated 7th November 1994 in the form
attached as Schedule 7;
5.9.3. allot and issue to NAMF the Consideration Shares as
fully paid and non-assessable and deliver to NAMF or
its representative at Completion a duly issued share
certificate in respect of the Consideration Shares;
5.9.4. duly execute and deliver to the Vendors the ELG
Indemnity and the NAMF Indemnity; and
5.9.5. deliver to NAMF the duly executed Registration Rights
Agreement.
6. WARRANTIES
6.1. Subject to all matters or things disclosed in the Disclosure
Letters, the Vendors jointly and severally warrant to the
Purchaser that, as at the date hereof and, again, as at
Completion, the Warranties set out in Schedule 2 are true and
accurate in all respects.
6.2. Each of the Warranties is without prejudice to any other
warranty or undertaking and, except where expressly stated, no
clause contained in this Agreement governs or limits the
extent or application of any other clause.
6.3. The rights and remedies of the Purchaser in respect of any
breach of the Warranties pursuant to clause 6.1, clause 6.6 or
clause 6.8 shall not be affected by Completion, by any failure
to exercise or delay in exercising any right or remedy or by
any other event or matter whatsoever, except a specific and
duly authorised written waiver or release.
6.4. The information in and incorporated in the Disclosure Letters
shall be deemed to be disclosed again at Completion.
6.5. The Vendors shall disclose in writing to the Purchaser any
matter or thing (other than those matters or things already
disclosed in the Disclosure Letters) which may to the
knowledge of the Vendors arise or, regardless of when they
occurred, become known to the Vendors after the date hereof
and before Completion which is inconsistent with any of the
Warranties or which might make any such Warranties inaccurate
or misleading at Completion.
6.6. If the Vendors fail to disclose as required by clause 6.5, the
Purchaser's remedy shall be whatever remedies are available to
the Purchaser without limitation under this Agreement or
otherwise.
6.7. In the event of any of such matters or things as are mentioned
in clause 6.5 above being disclosed to the Purchaser before
Completion then:
(a) if such matter or thing relates to item 3.1.2 of the
OCC Disclosure Letter or item 3.10.1 of the OCBVI Disclosure
Letter; or
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(b) if the aggregate effect of such matters or things are
such that the Business is materially and adversely
affected;
the Purchaser may, prior to Completion, rescind this Agreement
by notice in writing to the Vendors.
For the purposes of clause 6.7(b), the Business shall be
deemed to be materially and adversely affected if the
Purchaser, had it known of such matters or things, might
reasonably have been expected to reduce the Purchase Price by
US$3,380,000.00 (Three Million Three Hundred and Eighty
Thousand United States Dollars) or more.
Other than as provided for in this Agreement, the Purchaser
shall not be entitled to rescind this Agreement. Upon such
rescission this Agreement shall cease to have effect and each
party shall have no further claim under it against the other.
6.8 For the avoidance of doubt and notwithstanding the provisions
of clause 6.7 above, in the event of any such matters or
things as are mentioned in clause 6.5 being disclosed to the
Purchaser before Completion:
(i) which do not give rise to the Purchaser's option of
recission pursuant to clause 6.7; or
(ii) which do give rise to such option but the Purchaser
does not elect to exercise such option;
the Purchaser shall be entitled to claim damages for breach of
the terms of this Agreement.
6.9 The Purchaser shall not be entitled to exercise its rights of
rescission under clause 6.7 without first giving the Vendors
seven days in which to remedy such matter or thing to the
reasonable satisfaction of the Purchaser and, if necessary,
the date set for Completion shall be deferred to such later
date (being no later than the later of (i) seven days from the
giving of notice by the Purchaser of his decision to rescind
and (ii) the date on which Completion would have taken place
had the right of rescission not arisen) as shall give the
Vendors the opportunity to remedy the matter or thing to the
reasonable satisfaction of the Purchaser.
6.10 The provisions of Schedule 4 shall operate to limit the
liability of the Vendors under and in respect of the
provisions of clauses 3.4 and 6 of this Agreement and the
Warranties set out in Schedule 2 of this Agreement; provided
that such limitations shall in no way be exclusive limitations
and shall not prevent the Vendors or the Purchaser from
relying on any other provisions of this Agreement or any legal
principle with a view to limiting their liability hereunder.
6.11 The Purchaser hereby represents and warrants to the Vendors as
follows:
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The Purchaser is a company duly organized, validly existing
and in good standing under the laws of the Cayman Islands. The
Purchaser has all requisite corporate power and authority to
enter into this Agreement, to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. All corporate acts and other
proceedings required to be taken by the Purchaser to authorize
the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby have
been duly and properly taken. This Agreement has been duly
executed and delivered by the Purchaser and constitutes legal,
valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
6.12 The Purchaser acknowledges that it has not entered into this
Agreement in reliance upon any warranty, representation or
promise other than those set forth in this Agreement.
7. COVENANTS BY THE PURCHASER
7.1. It is acknowledged and agreed by the parties that the approval
of the board of directors of OCBVI is required for the
transfer of the OCBVI Shares held by NAMF to the Purchaser
hereunder and for the approval of the Assignments referred to
in clause 5.7 above and for the acceptance of the resignations
of the directors and officers referred to in clause 5.7 above.
The Purchaser agrees to use its best efforts at its own
expense to conclude and execute an agreement satisfactory to
it substantially in the form contained in an email addressed
to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated September 18th 2002 with Sage Water
Holdings (BVI) Ltd., or other such agreement as is
satisfactory to the Purchaser to obtain such approvals and
acceptance. Subject to execution of such agreement, the
Purchaser agrees to use its best endeavors to cause Sage Water
Holdings (BVI) Ltd. to cooperate in the holding of a board
meeting or the passing of directors' resolutions (as the case
may be) prior to Completion at which the resolutions and
matters described at clause 5.7 above are passed, accepted and
approved.
7.2. The Purchaser shall on or as soon as possible after Completion
secure the full and final release of the Vendors and EGL from
the Guarantees (and the Purchaser shall offer its own
guarantees upon the same terms as the Guarantees in
substitution therefor if necessary to secure such release) and
shall procure that the Guarantees are returned to the Vendors
or to EGL and the Purchaser shall, pending such release, fully
and effectively indemnify the Vendors and EGL and each of them
and keep them indemnified against any and all liability, cost
or expense of the Vendors and EGL and each of them under or in
respect of the Guarantees. In this regard, the Purchaser shall
duly execute and deliver to the Vendors the EGL Indemnity and
the NAMF Indemnity. The release of EGL from the Guarantee in
favour of the Governor of the Cayman Islands shall be in the
form set out at Schedule 7 or, in the event that a release in
such form cannot be obtained, in such other form as is agreed
with or is reasonably acceptable to the Vendors. The releases
of the Guarantees in favour of the
14
Bank of N.T. ▇▇▇▇▇▇▇▇▇▇▇ & Son Limited shall be in such form
as is reasonably acceptable to the Vendors.
7.3. The Purchaser shall, on Completion, release EGL from its
guarantee in respect to the obligations of OCC in favour of
the Purchaser dated 7th November 1994 by duly executing and
delivering to the Vendors a release from such guarantee in the
form set out in Schedule 7.
8. GENERAL
8.1. Subject to the terms and conditions of any confidentiality
agreements binding on the Purchaser, except as provided
herein, and where necessary for Completion by disclosing the
minimum amount of information necessary, no announcement of
any kind shall be made with respect to the subject matter of
this Agreement unless specifically agreed in writing between
the parties. Subject to the terms and conditions of any
confidentiality agreements binding on the Purchaser, the
Vendors agree that the Purchaser may, without any prior notice
or consultation with the Vendors, make such announcements and
disclosures as may be required pursuant to the relevant laws,
rules or regulations relating to the listing or offering of
the Purchaser's shares on the NASDAQ Exchange. This clause
shall survive Completion.
8.2. If this Agreement ceases to have effect the Purchaser will
release and return to the Vendors all documents provided to
the Purchaser or its advisers by the Vendors in connection
with this Agreement and will not use, disclose or make
available to any other person any information which it or its
advisers have been given in respect of the Companies and which
is not in the public domain.
8.3. This Agreement shall be binding upon each party's successors
and assigns but, none of the rights of the parties under this
Agreement or the Warranties may be assigned or transferred.
Notwithstanding the aforesaid, the Vendors agree that the
Purchaser may, at its option, assign the right to take title
to the OCBVI Shares held by NAMF to DesalCo Limited and such
assignment shall be effected by written notice delivered to
NAMF by the Purchaser.
8.4. Save as otherwise agreed in writing or provided herein, all
expenses incurred by or on behalf of the parties, including
all fees of agents, representatives, solicitors, accountants
and actuaries employed by any of them in connection with the
negotiation, preparation or execution of this Agreement shall
be borne solely by the party who incurred the liability.
8.5. Time shall be of the essence of this Agreement, both as
regards the dates and periods specifically mentioned and as to
any dates and periods which may by agreement in writing
between or on behalf of the Vendors and the Purchaser be
substituted for them.
15
8.6. All notices or other communications required or permitted to
be given hereunder shall be in writing and shall be served by
delivering the same by hand or by sending the same by
facsimile or reputable courier service and shall be deemed
given, if sent by hand, when delivered, if sent by facsimile,
upon the date stated in the transmission report or, if sent by
courier service, on delivery by the relevant courier service,
in each case, to the address set out below or such other
address as is notified by the relevant person from time to
time, provided that a notice given in accordance with the
above but received on a non-working day or after business
hours in the place of receipt shall only be deemed to be given
on the next working day in that place:
(a) if to the Purchaser,
Consolidated Water Co. Ltd.
Trafalgar ▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile:+l (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Vendors,
North-American Mortgage & Finance Corporation
Transcontinental or Finance Corporation Limited
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Facsimile:+l ▇▇▇ ▇▇▇ ▇▇▇▇
8.7. If any of the provisions of this Agreement is found by any
Court or any other competent authority to be void or
unenforceable, that provision shall be deemed to be deleted
from this Agreement and the remaining provisions of this
Agreement shall continue in full force and effect.
Notwithstanding the foregoing, the parties shall thereupon
negotiate in good faith in order to agree the terms of a
mutually satisfactory provision to be substituted for the
provision so found to be void or unenforceable.
8.8. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof, supersedes
all previous agreements and understandings between the parties
with respect hereto, and may not be modified except by an
instrument in writing signed by the duly authorised
representatives of the parties.
8.9. Each party acknowledges that in entering into this Agreement
it does not do so on the basis of, and does not rely on, any
representation, warranty or
16
other provision except as expressly provided herein, and all
conditions, warranties, or other terms implied by statute or
common law are hereby excluded to the fullest extent permitted
by law.
8.10. This Agreement may be entered into in any number of
counterparts and by the parties to it on separate
counterparts, each of which when so executed and delivered
shall be an original, but all the counterparts shall together
constitute one and the same instrument.
9. GOVERNING LAW AND JURISDICTION
9.1. This Agreement is governed by and shall be construed in
accordance with the laws of the Cayman Islands.
9.2. The parties hereto agree that the Courts of the Cayman Islands
shall have the jurisdiction to settle any disputes that may
arise in connection with this Agreement and that any judgment
or order of a Cayman Islands Court in connection with this
Agreement is conclusive and binding on them and may be
enforced against them in the courts of any other jurisdiction.
This clause shall not limit the right of either party hereto
to bring proceedings against the other party in connection
with this Agreement in any other court of competent
jurisdiction or concurrently in more than one jurisdiction.
9.3. The parties hereto waive any objection which they may have to
the courts of the Cayman Islands on the grounds of venue or
forum non-conveniens or any similar grounds as regards
proceedings in connection with this Agreement and they consent
to service of process by mail or by any other manner permitted
by the relevant law.
17
AS WITNESS WHEREOF the parties hereto have set their hands and date first above
written.
SIGNED for and on behalf of
Consolidated Water Co. Ltd
by ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ )
duly authorised and in the presence of: ) /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the
Board and Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Witness
Witness name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Occupation: Attorney-at-Law
SIGNED for and on behalf of )
North-American Mortgage & Finance )
Corporation by ▇▇▇▇▇▇▇▇ Securities )
Limited )
duly authorised and in the presence of: ) /s/ ▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇, Director of ▇▇▇▇▇▇▇▇
Securities Limited
attorney-in-fact
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Witness
Witness name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Occupation: Attorney-at-Law
SIGNED for and on behalf of )
Transcontinental Finance Corporation )
Limited by ▇▇▇▇▇▇▇▇ Securities Limited )
duly authorised and in the presence of: ) /s/ ▇▇▇▇ ▇▇▇▇
----------------------------------
▇▇▇▇ ▇▇▇▇, Director of ▇▇▇▇▇▇▇▇
Securities Limited
attorney-in-fact
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Witness
Witness name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Address: ▇.▇. ▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Occupation: Attorney-at-Law