Index to Schedules

First Schedule:		Certificate and Terms and Conditions of the Bonds
Second Schedule:		Provisions for Meetings of Bondholders

T H I S D E E D is made this 4th day of August, Two Thousand and Six Between Consolidated Water Co. Ltd. a company incorporated under the laws of the Cayman Islands with its registered office at Regatta Office Park, Windward Three, 4 ^th Floor, West Bay Road, P.O. Box 1114 GT, Grand Cayman, Cayman Islands (hereinafter called “the Company”) of the One Part and Dextra Bank & Trust Co. Ltd. a company incorporated under the Laws of the Cayman Islands with its registered office at Sagicor House, 198 North Church Street, P.O. Box 472 GT, Grand Cayman, Cayman Islands, B.W.I. (hereinafter called “the Trustee”) of the Other Part.

W H E R E A S

A. By a Resolution of the Company passed on the 28th day of July 2006 the Company resolved to borrow with the approval of its Board of Directors in accordance with its Articles of Association a sum not exceeding Fifteen Million Seven Hundred and Seventy-One Thousand Nine Hundred and Ninety-Seven United States Dollars and Sixteen Cents (US$15,771,997.16) by the issue and sale of Secured Fixed Rate Bonds.

B. It has been agreed and determined between the Company and the Trustee that the Bonds shall be constituted and secured in the manner and upon the terms and conditions contained in this Trust Deed and subject to and with the benefit of the Conditions contained in Part B of the First Schedule which shall be deemed to be part of this Trust Deed.

C. The net proceeds from the issue of the Bonds are to be applied towards partial funding of the construction of the reverse osmosis water plant in the Bahamas and assist to in other capital expenditure projects and such use of the proceeds is legitimate and in accordance with applicable law.

D. The Trustee has agreed to act as trustee of this Trust Deed for the benefit of the Bondholders on and subject to the terms and conditions set out in this Trust Deed.

NOW THIS TRUST DEED WITNESSETH AND IT IS HEREBY AGREED AND DECLARED as follows:-

1.00 INTERPRETATION

1.01 In this Trust Deed:-

“AFFILIATES” means with respect to the Company, a subsidiary or holding company of the Company or any other subsidiary of that holding Company.

“ARRANGER ” means Scotiatrust and Merchant Bank Trinidad and Tobago Limited.

“ AUDITORS ” means the auditor or auditors for the time being of the Company.

“ BONDS ” means the registered bonds of the Company issued on the Closing Date in the aggregate value of not more than Fifteen Million Seven Hundred and Seventy-One Thousand Nine Hundred and Ninety-Seven United States Dollars and Sixteen Cents (US$15,771,997.16) comprising 5.95% Secured Fixed Rate Bonds 2006-2016 denominated in Dollars constituted by this Trust Deed or the nominal amount thereof for the time being outstanding or (as the context so requires) a specific number thereof.

“ BONDHOLDER ” means the registered holder(s) of any Bonds.

“ BUSINESS DAY ” means a day on which commercial banks are open for business in the Cayman Islands.

“ CALCULATION DATE” means the last day of each fiscal quarter of the Company.

“ CERTIFICATES ” means any certificate for the Bonds in the form or substantially in the form set out in Part A of the First Schedule

“CHARGE OF SHARES” means the Equitable Charge of Shares of even date herewith in which the Company charged its shares in Cayman Water Company Limited to the Trustee.

“CHARGED PROPERTY” means all the fixed and floating assets of the Company and its subsidiary, Cayman Water Company Limited.

“ CLOSING DATE ” means the 4th day of August, 2006.

“COLLATERAL MORTGAGES” means the charges of even date herewith made between Cayman Water Company Limited and the Trustee whereby the Cayman Water Company Limited charged the following parcels of land: (i) West Bay Beach North East Block 9A Parcel 8; (ii) West Bay Beach North Block 11D Parcel 40; (iii) West Bay Beach North Block 11D Parcel 8; (iv) West Bay Beach South Block 12D Parcel 79REM1/2; and (v) West Bay Beach North East Block 9A Parcel 469.

“ CONDITIONS ” means the Terms and Conditions endorsed on the Certificates in the form or substantially in the form set out in Part B of the First Schedule hereto, as the same may from time to time be modified in accordance with the provisions of this Trust Deed and any reference in this Trust Deed to a particular numbered Condition shall be construed accordingly.

“CPLTD” means the portion of the long term debt payable in the current financial year.

“DEBENTURE” means the Debenture of even date herewith and made by Cayman Water Company Limited in favour of the Trustee.

“DEBT SERVICE COVERAGE RATIO” means the ratio of EBITDA for the 12 month period ending on the Calculation Date to the sum of (i) interest expense for the 12 month period ending on the Calculation Date and (ii) the principal amount of long term debt scheduled for repayment during the 12 month period following the Calculation Date.

“ DIRECTORS ” mean the directors for the time being of the Company.

“DISCLOSURE LETTER” means the letter set out in the Third Schedule dated the 28th day of July, 2006 issued by the Company containing the disclosures in respect to the representations and warranties contained in clause s 5.01.04, 18.04 and 28.01.

“ DOLLARS ”, “ UNITED STATES DOLLARS ” and “US$” mean the lawful currency from time to time of the United States of America.

“DUE DATE” means the day on which any payment under the Bonds is due.

“EBITDA” means net income plus interest expense, tax expense, depreciation and amortization and adjusted for any exceptional or extraordinary items included in calculating net income.

“EQUITY” means total assets minus total liabilities.

“ EVENT OF DEFAULT ’ means any event of default referred to in clause 6 of this Trust Deed.

“ EXTRAORDINARY RESOLUTION ” means an Extraordinary Resolution of the Bondholders passed in accordance with the provisions of paragraph 19 of the Second Schedule.

“GOVERNMENTAL APPROVALS” means such approvals as are required by the Company for the issue of the Bonds in Trinidad and Tobago and any other territory in the Caribbean in which the Bonds are offered for sale.

“GUARANTEE” means the Guarantee of even date herewith made by Cayman Water Company Limited in favour of the Trustee.

“ INSURANCE POLICIES” means the Company’s insurance policies as follows: (i) Commercial “All Risks” Insurance; (ii) Plant and Equipment “All Risks” Insurance; (iii) Business Interruption Insurance which includes loss of profit endorsement.

“INSURANCE PROCEEDS ACCOUNT” means the account established by the Company under the control of the Trustee into which the insurance proceeds of the Insurance Policies are to be paid in accordance with Clause 18.01.17.

“INTER-CREDITOR AGREEMENT” means the agreement of even date herewith made among Scotiabank & Trust (Cayman) Ltd., the Trustee, the Company and Cayman Water Company Limited.

“INTEREST RATE” means the rate set out in Condition 6.03.01.

“ISSUE PRICE” means 95.11% of the principal amount of the Bonds such that the proceeds of the Bonds payable by the Bondholders to the Company shall be equivalent to the principal amount of the Bonds in the amount of US$15,771,997.16 multiplied by 95.11% which equals US$15,000,000.00.

“ MONTH ” means calendar month.

“ OUTSTANDING BONDS ” means all the Bonds other than:

(a) those in respect of which the repayment money (including all arrears of interest (if any) accrued thereon have been duly paid to the relevant Bondholders or have been duly paid to the Trustee or to the Paying Agent in the manner provided in the Paying Agency Agreement or this Trust Deed (and where appropriate notice to that effect has been given to the relevant Bondholders in accordance with Condition 15.00) for payment against presentation of the relevant Certificates;

(b) those which have been purchased beneficially by or for the account of the Company and cancelled;

Provided that for each of the following purposes, namely:-

(i) the right to attend and vote at any meeting of the Bondholders or any of them;

(ii) the determination of the number of Outstanding Bonds for the purposes of clause 8.00 hereof, Condition 10.00 and paragraphs 2, 5, 6, 7, 9 and 10 of the Second Schedule hereof;

(iii) any discretion, power or authority contained in this Trust Deed which the Trustee is required, expressly or impliedly, to exercise in or by reference to the interests of the Bondholders or any of them; and

(iv) the determination by the Trustee whether in its opinion any circumstances, matters or things are or would be materially prejudicial to the interests of the Bondholders or any of them;

those Bonds if any, which are beneficially held by or for the account of the Company, but are not yet cancelled under Condition 7.06 shall (unless and until ceasing to be so held by or for the account of the Company) be deemed not to be Outstanding Bonds.

“PARI-PASSU DEBENTURE” means the Debenture of even date herewith and made by the Company in favour of the Trustee.

“ PAYING AGENCY AGREEMENT ” means the Agreement of even date herewith appointing the Paying Agent for the Bonds or any other agreement for the time being in force appointing the Paying Agent for the Bonds, or concerning its duties, the terms of which have been previously approved in writing by the Trustee, together with any agreement for the time being in force amending or modifying with the prior written approval of the Trustee any of the aforesaid agreements in relation to the Bonds.

“ PAYING AGENT ” means Scotiatrust and Merchant Bank Trinidad and Tobago Limited or other person appointed by the Company as such.

“ PAYMENT DATE ” has the meaning ascribed to it in Condition 1.01.04.

“PAYMENT PERIOD” means the period described in Condition 1.01.05.

“ PAYMENT, REDEMPTION AND REPAYMENT ” shall where the context admits each include both the others and the words ‘pay’, ‘paid’, and ‘payable’, ‘redeem’, ‘redeemed’ and ‘redeemable’, ‘repay’, ‘repaid’ and ‘repayable’ shall be construed accordingly.

“PERMITTED INVESTORS” means up to no more that 34 or such other applicable aggregate amount of such Permitted Investors at anytime who acquire bonds or interests in bonds for their own account or for the account of another Permitted Investor to the extent that such Permitted Investors are not prohibited by the Securities Act from acquiring securities in private placements.

“ REGISTER ” means the register of the Bonds and Bondholders to be maintained in accordance with the provisions of this Trust Deed.

		“ REGISTRAR ” means Scotiatrust and Merchant Bank Trinidad and Tobago Limited or other person appointed by the Company as such.
		“REGULATORY APPROVALS” means all permits, licences, and consents as are required under the laws of the Cayman Islands and the Bahamas for the proper and effective carrying out of the Company’s business and that of its Affiliates.
		“SECURITIES ACT” means the applicable securities legislation in the territories the Bonds are offered for sale.
		“SECURITY DOCUMENTS” means the Trust Deed, the Paying Agency Agreement, the Subscription Agreement, the Debenture, the Pari-Passu Debenture, the Collateral Mortgages, the Guarantee, the Charge of Shares and the Inter-Creditor Agreement.
		“ SPECIFIED OFFICE ” means in relation to any Paying Agent, either the office identified with its name at the end of the Conditions or in the relevant Paying Agency Agreement under which it is appointed as such or such other office as shall have been notified to the holders of the Bonds in accordance with the Conditions.
		“SUBSCRIPTION AGREEMENT” means the Agreement even date herewith whereby the Arranger agrees to underwrite and arrange for subscription of the Bonds.
		“TAXES” means and includes any present or future taxes, levies, duties, imposts, deductions, charges, fees or withholdings of any nature.
		“ TRUST CORPORATION ” means a corporation entitled under the laws of the Cayman Islands or Trinidad and Tobago to carry out, or not prohibited from carrying out, the functions of a trustee.
		“ TRUST DEED ” means this Trust Deed and the Schedules (as from time to time modified in accordance with the provisions of this Trust Deed) and shall include any deed or instrument supplemental to this Trust Deed.
		“ TRUSTEE ” means Dextra Bank & Trust Co. Ltd. or any other trustee or trustees for the time being of this Trust Deed and includes the successors and assigns of the Trustee whether immediate or derivative.

1.02 Unless the context requires otherwise words or expressions in this Trust Deed shall bear the same meanings as in the Companies Law of the Cayman Islands or any statutory modification or re-enactment thereof.

1.03 Words denoting the singular shall include the plural number and vice versa. Words denoting masculine feminine or neuter gender shall include both of the other genders. Words denoting natural persons shall include corporations and firms.

1.04 The headings and sub-headings to clauses and Conditions are for convenience only and have no legal effect and references to Schedules, clauses, sub-clauses, Conditions, paragraphs and sub-paragraphs shall be references to the Schedules to this Trust Deed, to the clauses and sub-clauses of this Trust Deed, to the Conditions set out in Part C of the First Schedule and to the paragraphs and sub-paragraphs set out in the Second Schedule.

1.05 References to statutes orders regulations or statutory instruments shall be construed as references to them as respectively replaced, amended, modified or re-enacted from time to time.

1.06 References to costs, charges or expenses shall unless stated to the contrary include any value added tax or similar tax or duty charged or chargeable on them.

2.00 COVENANT TO REPAY AND TO PAY INTEREST

2.01 The Company hereby covenants with the Trustee to pay the principal sum of Fifteen Million Seven Hundred and Seventy-One Thousand Nine Hundred and Ninety-Seven United States Dollars and Sixteen Cents (US$15,771,997.16) due on the Bonds to the Bondholders and/or the Trustee as Trustee for the Bondholders together with interest thereon and all other sums from time to time due to the Trustee or the Bondholders under this Trust Deed in accordance with the provisions of this Trust Deed.

2.02 As and when the Bonds or any of them become due to be repaid in accordance with the Conditions, the Company shall pay to or to the order

of the Trustee in Dollars in immediately available funds the principal amount of the Bonds on the Due Date for repayment and shall (subject as aforesaid and to the other provisions of the Conditions) until such payment (as well after as before any judgment or other order of any competent court) unconditionally pay to or to the order of the Trustee as aforesaid, as and when the same becomes due in accordance with the Conditions, interest on the principal amount of the Bonds at the rate per annum specified in Condition 6.03;

2.03 Any principal sum which is not paid on the due date will attract interest from and after the Due Date at the rate of 2.5% per annum above the Interest Rate on the issue, payable by the Company.

AND PROVIDED that:-

2.03.01 in any case where the Payment Date is a non-Business Day, then payment of principal or interest shall be made on the last preceding day which is a Business Day, but interest shall only accrue for the period up to the date for payment or the date fixed for repayment of principal or interest;

2.03.02 every payment of principal or interest in respect of the Bonds made to the Paying Agent in the manner provided in the Paying Agency Agreement or this Trust Deed shall be in satisfaction pro tanto of the covenant by the Company in this clause contained;

2.03.03 If the Company pays any amount in respect of the Bonds to the Trustee or Paying Agent after the relevant Due Date, interest will continue to accrue on the principal included in the amount of the payment that is overdue at the rate specified in clause 2.03; that interest will be calculated from the Due Date to the date (being not later than thirty (30) days after the date on which the Trustee or the Paying Agent actually receives the whole of that payment together with an amount, equal to the interest which has accrued and is to accrue up to and including that date) which the trustee determines will be the date on which payment will be made to the Bondholder;

and the Trustee must state that date in a notice (given in accordance with Condition 15) which the Trustee must give to the Company and to the Bondholders as the date that the full amount payable in respect of the Bonds will be paid; and

2.03.04 In any case where the Company improperly withholds or refuses to pay the whole or any part of the principal of any Bond (otherwise than in circumstances contemplated by clause 2.03.03), interest will accrue on the principal balance of that Bond at the rate specified in clause 2.03, calculated from the date of the withholding or refusal up to and including the date (being not later than thirty (30) days after the day on which the Trustee or the Paying Agent actually receives the whole of that principal balance, together with an amount equal to the interest which has accrued and which is to accrue up to and including the date which the Trustee determines will be the date on which payment is to be made to the Bondholders, and the Trustee must state that date in a notice which the Trustee must give to the Company and to the Bondholders as the date that the full amount payable in respect of the Bonds will be paid.

2.04 At any time after all the money hereby secured shall become due and payable or the Trustee shall have instituted proceedings against the Company in accordance with clause 8.00 the Trustee may:

2.04.01 by notice in writing to the Company and the Paying Agent and the Registrar require the Paying Agent pursuant to the Paying Agency Agreement:

(a) to act thereafter as Paying Agent and Registrar of the Trustee in relation to payments to be made by or on behalf of the Trustee under the provisions of this Trust Deed on the terms provided in the Paying Agency Agreement mutatis mutandis (save that the Trustee’s liability under any of the provisions thereof for the indemnification of the

Paying Agent shall be limited to the amounts for the time being held by the Trustee upon the trust of this Trust Deed and available for distribution to Bondholders) and thereafter to hold all such sums, documents and records held by it in respect of the Bonds on behalf of the Trustee; and/or

(b) to deliver up all Bonds and all sums, documents and records held by it in respect of such Bonds to the Trustee or as the Trustee shall direct in such notice provided that such notice shall be deemed not to apply to any documents or records which the Paying Agent is obliged not to release by any law or regulation;

2.04.02 by notice in writing to the Company require it to make all subsequent payments in respect of Bonds to the order of the Trustee and not to the Paying Agent with effect from the issue of any such notice to the Company and until such notice is withdrawn sub-clause 2.03.02 hereof shall cease to have effect.

2.05 Payment of the principal for the time being owing on the Bonds or any part of the Bonds, and interest may be made by cheque or wire transfer made payable to the Bondholders (or, in the case of joint holders, to all such Bondholders) or to such person or persons as the Bondholders or all the joint Bondholders may in writing direct, and sent to the Bondholder at his registered address or in the case of joint Bondholders the Bondholder who is first named on the Register at his registered address or to such address as the Bondholder or all the joint Bondholders may direct in writing. Every cheque may be sent through the post at the risk of the Bondholders or joint Bondholders. Due payment of the cheque or instruction for the wire transfer of funds to the address provided by the Bondholder shall be a satisfaction of the principal or interest it represents unless the cheque is returned by the bank on which it is drawn for any legitimate reason.

2.06 All payments by the Company in respect of the Bonds will be made in Dollars without withholding of, or deduction for or on account of, any present or future Taxes of the Cayman Islands, unless the Company is required by Cayman Islands law to withhold or deduct amounts for, or on account of, any such Taxes whereupon the provisions of Condition 4.00 shall apply.

3.00 FORM OF THE CERTIFICATES

3.01 The Certificates shall be in the form or substantially in the form set out in Part A of the First Schedule or in such other form as the Trustee may approve and shall have endorsed on them Conditions in the form, or substantially in the form, set out in Part B of the First Schedule.

3.02 Without unnecessary delay but in any event not more than fourteen days after the Closing Date the Company shall execute and have available for delivery to the Paying Agent for distribution to the initial purchasers of the Bonds the Certificates in respect thereof.

3.03 The Bond Certificates are valid and obligatory only when they have been countersigned for the purpose of authentication and delivered by the Paying Agent.

3.04 The Company shall comply with the terms and provisions of the Certificates issued in respect of the Bonds and the Conditions. The Bonds shall be held subject to and with the benefit of the Conditions, all of which shall be deemed to be incorporated in this Trust Deed and shall be binding on the Company, the Bondholders and all persons claiming through or under them. Every Bondholder shall be entitled to receive one Certificate for the Bonds held by him, but joint Bondholders shall be entitled to one Certificate only for the Bonds jointly held by them. Each Certificate for a joint bondholding shall be delivered to that one of the joint Bondholders whose name stands first in the Register in respect of the joint bondholding. Where a Bondholder has transferred or has redeemed a part only of his holding of Bonds he shall be entitled to a Certificate for the balance of such holding, without charge.

4.00 PRINCIPAL AMOUNT OF THE BONDS

4.01 The principal amount of the Bonds shall be limited to Fifteen Million Seven Hundred and Seventy-One Thousand Nine Hundred and Ninety-Seven United States Dollars and Sixteen Cents (US$15,771,997.16) . The whole of the Bonds shall constitute secured obligations of the Company and shall rank pari passu equally and rateably without discrimination or preference among themselves.

4.02 The amount of the Issue Price shall be received by the Company and shall be applied for the purposes set out in Recital C of this Trust Deed.

5.00 NEGATIVE PLEDGE

5.01 So long as any Bonds remain outstanding, neither the Company nor any of its Affiliates shall without the consent in writing of the Trustee:

5.01.01 make any assignment for the benefit of its creditors or consent to the appointment of a trustee or receiver over its property or any part thereof;

5.01.02 do or cause or permit to be done anything which may in any way materially depreciate, jeopardise or otherwise prejudice this Trust Deed;

5.01.03 enter into a merger, acquisition or change the nature of its business;

5.01.04 enter into (a) any new borrowing agreements in amounts aggregating more than $250,000.00 or (b) any new guarantees or new contingent liabilities in amounts aggregating more than $250,000.00, (save and except for guarantees and contingent liabilities associated with current and future projects of the Company, which have been presented to and accepted by the Arranger as part of its due diligence exercise and disclosed to the Trustee prior to the execution of this Deed) or (c) any arrangements to further encumber its assets to secure amounts other than those amounts specified in (a) and (b) above; or

5.01.05 make any advances to any of the Company’s shareholders.

6.00 EVENTS OF DEFAULT

6.01 The Bonds shall become immediately due and payable together with accrued interest, if any of the following events occur and either (a) the Trustee so determines or (b) the Trustee is requested in writing by Bondholders together holding at least one-quarter in principal amount of the Outstanding Bonds or is requested by an Extraordinary Resolution to demand repayment.

6.01.01 If the Company fails to pay for a period of ten (10) days after the Due Date any payment due on the Bonds.

6.01.02 If a receiver is appointed or if a bona fide petition is presented or an order made or a resolution passed or analogous proceedings are taken for appointing an administrator or liquidator of or winding up of the Company or if a notice is issued convening a meeting for the purpose of passing any such resolution or a resolution to purchase or redeem or reduce issued share capital of the Company (save for the purpose of and followed within four months by an amalgamation or reconstruction not involving or arising out of insolvency on terms previously approved in writing by the Trustee).

6.01.03 If the Company threatens the Trustee verbally or in writing to stop payment of its obligations generally or ceases or threatens to cease to carry on business or a substantial part of its business.

6.01.04 If an encumbrancer takes possession or a receiver is appointed of the whole or any part of the assets, property, revenues or undertaking of the Company or if any final judgment or order made against the Company is not complied with within fourteen days or if a distress, sequestration, execution or other process is levied or enforced on or sued out against any of the undertaking, property, assets, revenues, chattels or property of the Company and is not discharged within fourteen days.

6.01.05 If the Company is deemed to be insolvent or unable to pay its debts within the meaning of Section 95 of the Companies Law or if the Company shall enter into discussions or arrangements with any of its creditors with a view to avoiding insolvency, or an application for an administration order is presented to a court or such an order is made by a court, or if a notice is issued convening any meeting of the Company for the purpose of considering such an application.

6.01.06 If the Company defaults under any trust deed, loan agreement, debenture or other agreement or obligation relating to its borrowing (which expression includes all liabilities in respect of any type of credit and accepting, endorsing or discounting any notes or bills all unpaid rental and other liabilities, present and future under hire-purchase, credit sale, conditional sale, leasing and similar agreements the purchase price or charge for all acquisitions or services, payment of which is deferred for three months or more and all liabilities under debt purchase factoring and like agreements contingent on non-payment of any debt) or if any borrowing or other money payable under any of the foregoing becomes or is capable of being declared payable prior to its stated maturity or is not paid when due or if any debenture, mortgage, charge or other security now or hereafter created by the Company becomes enforceable.

6.01.07 If this Trust Deed or any of the Security Documents fails or ceases to be continuing or is terminated (other than by the resignation or removal of the Paying Agent followed by the appointment of a substitute).

6.01.08 If any Regulatory Approval, licence, authorization, consent or registration at any time necessary or desirable to enable the Company to comply with its obligations to the Trustee or to carry on its business in the normal course shall be revoked, withheld or materially modified or shall fail to be granted or perfected or shall cease to remain in full force and effect.

6.01.09 If default is made by the Company in the performance of its obligations or covenants under or as incorporated by reference into this Trust Deed other than any covenant for the payment of principal and interest in respect of the Bonds or if the Company breaches any representation or warranty made under this Trust Deed and (except where, in the opinion of the Trustee, such default is not capable of remedy when no such continuation or notice as is referred to below will be required) such default continues for more than fourteen days after written notice requiring such default to be remedied has been given to the Company by the Trustee and the Trustee shall have certified in writing that such event is in its opinion prejudicial to the interests of the Bondholders.

6.01.10 If any event or series of events or any circumstances whether related or not occur(s) or arise(s) which, in the reasonable opinion of the Trustee has a material adverse effect on the Company which affects the ability of the Company to meet its obligations under this Trust Deed.

6.01.11 Any representation or warranty made by the Company in or pursuant to this Trust Deed is, or proves to be, untrue or incorrect in any respect when made or would be untrue or incorrect if repeated at any time.

6.01.12 Any material indebtedness of the Company is not paid when due and payable and remains unpaid for fifteen (15) Business Days thereafter unless it is disputed by the Company in good faith or is lawfully declared to be or is capable of being rendered due and payable before its normal maturity or any security interest over any assets of the Company securing indebtedness becomes enforceable.

6.01.13 Any event occurs which renders it unlawful or impossible for the Company to perform or observe, or to procure the performance or observance of, any of its obligations or undertakings contained in this Trust Deed or for the Trustee to exercise any of its rights and remedies under this Trust Deed.

6.01.14 If the Company defaults in the performance of its obligations under any of the Security Documents or any of its Regulatory Approvals.

7.00 SECURITY

7.01 The Company shall pursuant to the Pari-Passu Debenture charge to the Trustee all of the fixed and floating assets of the Company by way of security for the repayment of the principal and interest in respect of the Bonds.

7.02 The Company shall pursuant to Charge of Shares charge to the Trustee its shares in Cayman Water Company Limited by way of security for the repayment of the principal and interest in respect of the Bonds.

7.03 The Company shall procure the issue of the Guarantee by way of security for the repayment of the principal and interest in respect of the Bonds.

7.05 The Company shall procure that Cayman Water Company Limited pursuant to the Debenture charge to the Trustee all of its fixed and floating assets by way of security for the repayment of the principal and interest in respect of the Bonds.

7.06 The Company shall procure that Cayman Water Company Limited pursuant to the Collateral Mortgages charge to the Trustee the parcels of land described therein by way of security for the repayment of the principal and interest in respect of the Bonds.

7.07 The security created by clauses 7.01, 7.02, 7.03, 7.04, 7.05 and 7.06 shall:

7.07.01 be without prejudice and in addition to any other security for the payment of all money from time to time payable under this Trust Deed and the Conditions which the Trustee may hold now or hereafter on all or any part of the property, assets and undertaking of the Company;

7.07.02 be in addition to any rights, powers and remedies at law or in equity or otherwise;

7.07.03 not merge with or otherwise prejudice or affect any contractual or other right or remedy or any guarantee, lien, pledge, bill, note, mortgage or other security (whether created by the deposit of documents or otherwise) now or hereafter held by or available to the Trustee and shall not in any way be prejudiced or affected thereby or by the invalidity thereof or by the Trustee now or hereafter dealing with exchanging, releasing, varying or abstaining from perfecting or enforcing any of the same or any rights which it may now or hereafter have or giving time for payment or indulgence or compounding with any other person liable.

8.00 ENFORCEMENT BY THE TRUSTEE

8.01 At any time after the Bonds shall have become immediately due and repayable, the Trustee (to the exclusion of the Bondholders) may, at its discretion, and shall, on the request in writing of Bondholders holding not less than one-quarter of the principal amount of the Outstanding Bonds or, if so requested by Extraordinary Resolution (but, in either case, subject to the Trustee being indemnified to its satisfaction against all proceedings, claims and demands to which the Trustee may be liable and all costs, charges and expenses which may be incurred by the Trustee in connection therewith), and without notice take such proceedings against the Company as it may deem fit.

8.02 The Trustee shall be entitled to prove in any winding-up of the Company in respect of principal and/or interest payable in relation to the Bonds or other money payable under any provision of this Trust Deed.

8.03 No Bondholders shall in any circumstances be entitled to any remedy (whether by way of action, petition or otherwise howsoever) for the recovery of any Bond or any part thereof or any interest therein, unless the Trustee, having become bound to take

proceedings in accordance with this Trust Deed, fails to do so within a reasonable time and such failure shall be continuing. In that case any Bondholder may, on giving the Trustee an indemnity satisfactory to the Trustee against all proceedings claims and demands to which it may be liable and all costs charges and expenses which may be incurred by it in connection therewith, in the name of the Trustee (but not otherwise) himself either take such proceedings against the Company or prove in the winding-up of the Company. The Trustee shall apply any money so received in the manner provided in this Trust Deed.

8.04 Should the Trustee institute proceedings against the Company to enforce any obligation under this Trust Deed or under the Bonds, proof therein that the Company has made default in paying any principal or interest due in respect of any specified Bond, shall (unless the contrary be proved) be sufficient evidence that the Company has made the like default as regards all other Bonds in respect of which the relevant payment is then due.

8.05 The Company hereby covenants with the Trustee on demand to pay all costs charges and expenses incurred by the Trustee or which it shall properly incur in or about the enforcement preservation or attempted preservation of this security on a full indemnity basis.

8.06 The Company hereby agrees to indemnify the Trustee against all losses, actions, claims, expenses, demands and liabilities whether in contract, tort or otherwise now or hereafter incurred by it or by any manager, agent, officer or employee for whose liability, act or omission it may be answerable for anything done or omitted in the exercise or purported exercise of the powers herein contained or occasioned by any breach by the Company of any of its covenants or other obligations to the Trustee. The Company shall so indemnify the Trustee on demand and shall pay interest on the sums demanded at the rate specified in Condition 6.03.

8.07 In case the Trustee shall have proceeded to enforce any right under this Trust Deed by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Company, the Trustee and the Bondholders shall be restored to their former positions and rights hereunder, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

9.00 APPLICATION OF MONEY

9.01 In respect of clause 8, all amounts payable to and received by the Trustee in respect of the Bonds by way of principal and/or interest or otherwise under any of the provisions of this Trust Deed will be received by it on trust for application:

9.01.01 first, in payment or satisfaction of the costs, charges, expenses and liabilities incurred by the Trustee (including any unpaid remuneration) in or about the execution of the trusts of this Trust Deed;

9.01.02 secondly, in payment pari passu and rateably of interest outstanding owing on or in respect of the Bonds; and

9.01.03 thirdly, as to the balance (if any) in or towards payment pari passu and rateably of principal outstanding and owing on or in respect of the Bonds.

10.00 INVESTMENT BY THE TRUSTEE

10.01 If the amount of the money at any time applicable under clause 9.01.03 shall be less than an amount sufficient to repay at least $1,000.00 on each Bond rateably among the Bondholders, the Trustee may at its discretion invest such money in some or one of the investments authorised by this Trust Deed. The Trustee shall have power from time to time at the like discretion to vary such investments and such investments with the income yielded by them may be accumulated, until the accumulations (together with any other funds for the time being under the control of the Trustee and applicable for the purpose) shall amount to a sum sufficient to repay at least $1,000.00 on each Bond rateably among the Bondholders. Such funds and accumulations shall then be applied as set out in clause 9.00 .

11.00 NOTICE TO BONDHOLDERS REGARDING APPLICATION OF MONEY

11.01 The Trustee shall give not less than fourteen days’ notice to the Bondholders of the day and place fixed for any payment to them under either of clauses 9.00 and 10.00. After payment by the Trustee, the Bondholders shall be entitled to interest on the balance only (if any) of the principal owing on the Bonds held by them, after deducting the amount which the Trustee had paid.

12.00 PAYMENT TO BONDHOLDERS FOLLOWING AN EVENT OF DEFAULT

12.01 Payment of the principal money or interest payable by the Trustee under clauses 9.00 and 10.00 in respect of the Bonds may be made to Bondholders in manner provided by clause 2.02 for payment on the Bonds. Any payment so made shall be a good discharge to the Trustee.

13.00 SURRENDER, CANCELLATION AND RE-ISSUE OF BONDS

13.01 Final payment under the Bonds or payment under the provisions of Condition 7.03 on account of the whole or any part of the principal owing on the Bonds will only be made if the Certificates for which such payment is to be made are surrendered to the Paying Agent by or through whom such payment is payable, who shall cause the Certificate to be cancelled and a new Certificate re-issued for the remaining principal amount due on the Bond and in the case of payment in full, cause such Certificates to be cancelled in full. The Trustee may with the Company’s consent, instruct the Paying Agent to dispense with the production of a Certificate in any particular case, on such indemnity being given as the Trustee and the Company shall think sufficient.

14.00 FAILURE BY BONDHOLDER TO MAKE CLAIM AFTER DATE OF REDEMPTION

14.01 If a holder of any of the Bonds which the Company is ready to repay or satisfy in whole or in part, fails to claim or accept the amount due to him within thirty days after the Due Date, the Company may or (if so requested by the Trustee) shall deposit with a bank in the name of the Trustee an amount equal to the amount due to such Bondholder. On such deposit being made, the Bonds which the Company is ready to repay or satisfy in whole or in part shall be deemed to have been repaid or satisfied to that extent in accordance with the provisions of this Trust Deed. After provision for repayment or satisfaction of the Bonds is made by such deposit of the funds required for the purpose, the Trustee shall not be responsible for the safe custody of such money or for interest on it. The Trustee shall be entitled to deduct the expenses incurred by it in arranging such deposit.

15.00 MANNER OF INVESTMENT BY TRUSTEE

15.01 Any money which under this Trust Deed ought to or may be invested by the Trustee may be invested in the name or under the control of the Trustee in any of the investments for the time being authorised by the law for the investment by trustees of trust money or in any other investments whether similar to the aforesaid or not which may be selected by the Company and approved by the Trustee or by placing the money on deposit in the name or under the control of the Trustee as the Trustee may think fit. The Trustee may at any time or times vary any such investments for or into other investments and shall not be responsible for any loss due to depreciation in value of or otherwise resulting from any such investments unless such loss results from the negligence of the Trustee.

16.00 REGISTER OF BONDS

16.01 The Register shall, in the absence of wilful default, bad faith or manifest error, at all times be conclusive evidence of the amount of the Bonds held by each Bondholder.

17.00 TRUSTEE’S REMUNERATION

17.01 Until the trusts hereunder are finally wound up, the Company shall pay to the Trustee for its services as trustee of this Trust Deed $10,000.00 per annum annually in advance. Remuneration shall continue to be payable until the payment by the Company in full of the principal amount of the Bonds and interest and all other money payable under this Trust Deed and the Bonds.

17.02 If the Bonds become immediately due and repayable, and the Trustee considers it expedient or necessary or if the Trustee is requested by the Company to undertake duties which the Trustee and the Company agree to be of an exceptional nature or otherwise outside the scope of the normal duties of the Trustee under this Trust Deed, the Company shall pay to the Trustee such additional remuneration as may be agreed between them.

17.03 Remuneration under clauses 17.01 and 17.02 shall be exclusive of any value added tax (or analogous duty), which shall be added at the applicable rate and paid by the Company.

17.04 The Company shall also pay or discharge all legal costs, stamp duties and disbursement costs incurred in the preparation of the Security Documents other than any Trinidad and Tobago stamp duty.

17.05 All reasonable costs, charges, liabilities and expenses properly incurred and payments properly made by the Trustee in the lawful exercise of its powers under this Trust Deed and all remuneration payable to the Trustee shall be payable by the Company on demand. Payments required to be made and actually made by the Trustee prior to the demand shall (if not paid within five Business Days after demand and if the Trustee so requires) carry interest at the rate specified in Condition 6.03 from the date of demand (and whether before or after any judgment). In all other cases, interest shall accrue at such rate from the date thirty days after the date of demand or (where the demand specifies that payment be made on an earlier date) from such earlier date.

17.06 Upon the occurrence of an Event of Default, but only upon the occurrence of an Event of Default, the Trustee shall have a first lien with right of payment prior to payment on account of principal and interest on any Bond for the foregoing fees, charges and expenses of the Trustee.

18.00 COVENANTS BY THE COMPANY

18.01 The Company hereby covenants with the Trustee that so long as there are any Outstanding Bonds it shall:-

18.01.01 give to the Trustee or any person appointed by the Trustee to whom the Company does not reasonably object such information and evidence as it or he shall reasonably require for the purpose of the discharge by the Trustee of the duties or discretions vested in it under this Trust Deed or by operation of law.

18.01.02 at all times carry on and conduct its affairs in a proper and efficient manner.

18.01.03 procure the Auditors to furnish the Trustee with such opinions, certificates or other information as the Trustee may from time to time reasonably require in connection with any matter arising under this Trust Deed.

18.01.04 at all times keep proper books of account.

18.01.05 give notice in writing to the Trustee of the occurrence of any of the events referred to in clause 6.00 forthwith upon it becoming aware thereof without waiting for the Trustee to take any of the actions mentioned therein.

18.01.06 require the Paying Agent to notify the Trustee forthwith in the event that it does not, on or before any Due Date, receive unconditionally pursuant to the Paying Agency Agreement or this Trust Deed the full amount in Dollars of the money payable on such Due Date.

18.01.07 in the event of the unconditional payment to the Paying Agent of any sum due in respect of the Bonds being made after the Due Date, forthwith give notice to the relevant Bondholders in accordance with Condition 15.00 that such payment has been made.

18.01.08 comply with, observe and perform all its obligations under, and use all reasonable endeavours to procure the Paying Agent and the Registrar to comply with, observe and perform all their obligations under the Paying Agency Agreement, and not make any amendment or modification to any such agreement without the prior written approval of the Trustee.

18.01.09 at all times maintain a Paying Agent or Paying Agents, in accordance with the applicable Conditions and at all times procure there to be a Registrar.

18.01.10 on each occasion when notice is given of a partial repayment of Bonds made pursuant to Condition 7.03 specify or procure to be specified separately in such notice the date and amount of each repayment.

18.01.11 give not less than 60 days’ notice to the Bondholders in accordance with Condition 15.00 of the proposed resignation or removal of any Paying Agent or Registrar or the change of any Paying Agent’s or Registrar’s specified office and give notice to the Bondholders in accordance with Condition 15.00 of any appointment of any Paying Agent or Registrar within 14 days thereafter PROVIDED ALWAYS that in the case of the termination by the Company of the appointment of the Paying Agent or the Registrar it must ensure that no such termination takes effect until a new Paying Agent or Registrar has been appointed on terms approved by the Trustee.

18.01.12 send or procure to be sent to the Trustee not later than the date of publication a copy of all notices given to Bondholders in accordance with Condition 15.00.

18.01.13 if it shall have given notice in accordance with the applicable Conditions of its intention to redeem the Bonds duly proceed to redeem the Bonds accordingly.

18.01.14 at all times execute and do all such further documents, acts and things as may be necessary at any time or times in the reasonable opinion of the Trustee to give effect to the provisions of this Trust Deed.

18.01.15 furnish to the Trustee within one hundred and twenty (120) days after the close of each financial year of the Company, a duly audited balance sheet and profit and loss account as at the end of the relevant financial year prepared in accordance with United States generally accepted accounting principles consistently applied giving a true and fair view of the state of the consolidated financial affairs of the Company as at the end of the financial year and complying with the requirements of the companies legislation for the time being in force that is applicable to the Company.

18.01.16 furnish to the Trustee, within forty-five (45) days after the close of each quarter of the Company’s financial year, quarterly un-audited consolidated financial statements prepared as stated in clause 18.01.15 giving a true and fair view of the Company’s affairs during such quarterly period.

18.01.17 pay or procure the payment of all insurance proceeds in respect of the Insurance Policies to the Insurance Proceeds Account.

18.02 So long as there are any Outstanding Bonds the Company shall, in order to enable the Trustee to ascertain the principal amount of the Outstanding Bonds for any of the purposes referred to in the proviso to the definition of “Outstanding Bonds” contained in Clause 1.00 hereof, deliver to the Trustee forthwith upon being so requested in writing by the Trustee, a certificate in writing signed by the Chairman and Secretary on behalf of the Company setting out the total principal amount of the Bonds which up to and including the date of such certificate have been purchased beneficially by or for the account of the Company and cancelled.

18.03 So long as there are any Outstanding Bonds the Company shall at all times maintain Registrars having their specified office in the English speaking Caribbean.

18.04 Save and except for capital expenditure on current projects and on other future projects of the Company, which have been presented to and accepted by the Arranger as part of its due diligence exercise and disclosed to the Trustee in writing prior to the execution of this Deed, so long as any Bonds remain outstanding, the Company shall obtain the prior written consent of the Trustee for the capital expenditure of any sum in excess of $2,000,000.00 per annum.

18.05 So long as any Bonds remain outstanding the Company shall maintain the following financial ratios which shall be calculated as of the Calculation Date:

18.05.01 Debt Service Coverage Ratio (EBITDA/Interest Expenses + CPLTD) is to be equal to or greater than 1.25:1;

18.05.02 a ratio of Long-term Debt to EBITDA for the 12 month period ending on the Calculation Date equal to or less than 2.5:1; and

18.05.03 a ratio of Long-term Debt to Equity equal to or less than 60:40.

19.00 TRUSTEE’S POWERS

19.01 The Trustee shall have all the powers conferred on trustees by the Trustee Law and by way of supplement thereto it is expressly declared as follows:-

19.01.01 the Trustee may in relation to this Trust Deed act on the opinion or advice of or information obtained from the Registrar or any lawyer, valuer, surveyor, banker, broker, auctioneer, accountant or other expert whether obtained by the Company or by the Trustee or otherwise and shall not be responsible for any loss occasioned by so acting. Any such opinion, advice or information may be sent or obtained by letter, telex, facsimile, electronic mail or cablegram and the Trustee shall not be liable for acting on any opinion, advice or information purporting to be conveyed by any such letter, telex, facsimile or cablegram, even if it shall contain some error or shall not be authentic;

19.01.02 the Trustee shall not be bound to take any steps to ascertain whether any event listed in clause 6.00 has happened and, until it shall have actual knowledge or shall have express notice to the contrary, the Trustee shall be entitled to assume that no such event has happened and that the Company is performing all the obligations on its part contained in this Trust Deed;

19.01.03 save as otherwise expressly provided in this Trust Deed, the Trustee shall, as regards all trust, powers, authorities and discretions vested in it by this Trust Deed, have absolute discretion as to their exercise and, provided it shall not have acted

fraudulently or negligently, it shall not be responsible for any loss, costs, damages or expenses that may result from the exercise or non-exercise thereof. In particular, it shall not be bound to act (whether at the request or direction of the Bondholders or otherwise) under any of the provisions of this Trust Deed unless the Trustee shall first be indemnified to its satisfaction against all proceedings, claims and demands to which the Trustee may so become liable and all costs, charges and expenses which may be so incurred by the Trustee;

19.01.04 the Trustee shall not be responsible for having acted upon any resolution purporting to have been passed at any meeting of the Bondholders of which minutes have been made and signed, even though it may subsequently be found that there was some defect in the constitution of the meeting or the passing of the resolution or that, for any reason, the resolution was not valid or binding on the Bondholders;

19.01.05 without prejudice to the right of indemnity by law given to trustees the Trustee and every attorney, manager, agent, delegate or other person appointed by it under

this Trust Deed the Company must, and agrees with the Trustee, acting in this instance for itself and as agent for every such attorney, manager, agent, delegate or other person appointed by it as aforesaid, to indemnify each of them against all liabilities and expenses properly incurred by it or him in the execution of the powers and trusts of this Trust Deed or of any powers, authorities or discretions vested in it or him pursuant to this Trust Deed, and this indemnity shall extend to all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in relation to this Trust Deed; and the Trustee may in priority to any payment to the Bondholders retain and pay out of any money in its hands on the trusts of this Trust Deed the amount of any such liabilities and expenses and also the remuneration of the Trustee as provided in this Trust Deed;

19.01.06 the Trustee shall be at liberty to hold or to deposit this Trust Deed and any deeds or documents relating to it or to the Bonds with any banker or banking company or company whose business includes undertaking the safe custody of deeds and documents or with any lawyer or firm of lawyers of good repute, and the Trustee shall not be responsible for any loss incurred in connection with any such holding or deposit and may pay all sums required to be paid on account or in respect of any such deposit;

19.01.07 the Trustee may call for and shall be at liberty to accept a certificate signed by any director of the Company and the Company’s Secretary as sufficient evidence of any fact or matter relating to the Company on which the Trustee may require to be satisfied or to have information or to the effect that, in the opinion of the person so certifying, any particular dealing, transaction, step or thing relating as aforesaid is expedient. The Trustee shall not be bound to call for further evidence and shall not be responsible for any loss occasioned by acting on any such certificate;

19.01.08 as between itself and the Bondholders, the Trustee shall have full power to determine all questions and doubts arising in relation to any of the provisions of this Trust Deed; and every such determination made in good faith (whether or not it relates in whole or in part to the acts or proceedings of the Trustee under this Trust Deed) shall be conclusive and binding on the Trustee and the Bondholders;

19.01.09 the Trustee shall not be responsible for the receipt or application by the Company of the proceeds of the issue of any of the Bonds or for the delivery of the Certificates to the persons entitled thereto;

19.01.10 the Trustee shall not be liable to the Company or any Bondholder by reason of having accepted as valid or not having rejected any Certificate purporting to be such and subsequently found to be forged or not authentic;

19.01.11 the Trustee shall not (unless ordered so to do by a court of competent jurisdiction or with the Company’s consent) disclose to any Bondholder or any other person or authority any confidential financial or other information made available to the Trustee by the Company in connection with the trusts of this Trust Deed and no Bondholder shall be entitled to take any action to obtain from the Trustee any such information;

19.01.12 whenever there shall be more than two trustees of this Trust Deed the majority of such trustees shall be competent to execute and exercise all the powers, trusts, authorities and discretions vested in the Trustee by this Trust Deed provided that a Trust Corporation shall be included in such majority;

19.01.13 the Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram, electronic mail or other paper or document which it believes to be genuine and correct and to have been signed or sent by the proper person or persons; and any action taken by the Trustee pursuant to this

Trust Deed upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is a Bondholder shall be conclusive and binding upon all future Bondholders of the same Bond and upon Bonds issued in exchange therefor or in place thereof;

19.01.14 at any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right fully to inspect all books and records of the Company pertaining to the Bonds, and to make such copies and memoranda from and with regard thereto as may be desired;

19.01.15 no provision of this Trust Deed shall require the Trustee to expend or risk the Trustee’s own funds or otherwise incur any financial liability in the performance of any of the Trustee’s duties hereunder, or in the exercise of any of the Trustee’s rights or powers, unless it is first indemnified or given security to its satisfaction against such risk or liability.

19.02 Nothing in this clause 19.00 shall exempt the Trustee from or indemnify it against any liability for breach of trust or any liability which by virtue of any rule of law would otherwise attach to it in respect of any gross negligence, default, breach of duty or breach of trust of which it may be guilty in relation to its duties under this Trust Deed.

20.00 TRUSTEE’S POWER TO DELEGATE

20.01 Whenever it thinks fit, the Trustee upon giving seven days prior written notice to the Company may delegate by power of attorney or otherwise, to any person or persons or fluctuating body of persons (whether being a trustee of this Trust Deed or not) all or any of the trusts, powers and discretions vested in it by this Trust Deed. Delegation may be made on such terms and subject to such conditions including, (but not limited to), power to sub-delegate and subject to such regulations as the Trustee may think fit but the Trustee shall remain responsible to the Company and the Bondholders for the acts or omissions of the delegate.

21.00 APPOINTMENT OF AGENTS BY TRUSTEE

21.01 In the conduct of the trust business, instead of acting personally, the Trustee may employ and pay an agent to transact or concur in transacting any business and to do or concur in doing all acts required to be done by the Trustee, including the receipt and payment of money.

22.00 TRUSTEE NOT PRECLUDED FROM ENTERING INTO CONTRACTS

22.01 The Trustee (or any director or officer of a corporation acting as trustee of this Trust Deed) shall not be precluded from:

22.01.01 holding any office or employment with the Company or any subsidiary or any person associated with the Company or any subsidiary; or

22.01.02 underwriting or guaranteeing the subscription of or subscribing for or otherwise acquiring, holding or dealing with substantially the whole or any part of the Bonds either with or without commission or other remuneration; or

22.01.03 otherwise at any time contracting or entering into or being interested in any contract or any financial or other transaction with the Company or any subsidiary or any person so associated with it; or

22.01.04 accepting or holding the trusteeship of any other trust deed constituting or securing any securities issued by the Company or any subsidiary or any person so associated or not so associated and shall not be liable to account whether to the Company or any subsidiary or any person so associated or the Bondholders, for any fee or profit made or customary share of brokerage or commission received by them as a result.

23.00 TRUSTEE’S CONSENTS

23.01 Any consent granted by the Trustee pursuant to this Trust Deed may be granted on such terms and subject to such conditions (if any) as the Trustee may in its absolute discretion determine and may be given retrospectively and shall be given or refused as the case may be with reasonable promptness. Any breach of or failure to comply with any of such terms and conditions by the Company shall constitute a breach of this Trust Deed.

23.02 All such consents shall be given by the Trustee in writing under the hand of a Manager or Assistant Manager of the Trustee.

24.00 MODIFICATION OF TRUST DEED

24.01 At any time and without the consent or sanction of the Bondholders, the Trustee may concur with the Company in making any modification to this Trust Deed which, (a) in the opinion of the Trustee, will not be materially prejudicial to the interests of the Bondholders; or (b) which is to correct a manifest error; in which case the Company shall promptly take all such reasonable steps as the Trustee may require to achieve such modification.

24.02 Any modification to this Trust Deed pursuant to clause 24.01 or Condition 11.00 shall, unless the Trustee otherwise agrees, as soon as practicable thereafter be notified to the Bondholders in accordance with Condition 15.00 and shall be binding upon them.

25.00 WAIVER BY TRUSTEE

25.01 The Trustee may, whenever it thinks fit, unless otherwise previously directed by an Extraordinary Resolution, and on such terms and subject to such conditions as to it shall seem fit:

25.01.01 authorise or waive any proposed breach or any breach by the Company of any of the terms of this Trust Deed or the Conditions other than those which prescribe the amounts in which and the times at which payments are to be made by the Company thereunder without prejudice to the rights of the Trustee in respect of any subsequent breach of any such terms; and

25.01.02 determine that any event which constitutes (or which, with the giving of notice and/or the lapse of time or any other matter would constitute) an event on the happening of which the Bonds shall have or may become immediately due and repayable shall not be treated as such for the purposes of this Trust Deed, without prejudice to the rights of the Trustee in respect of any subsequent such event.

26.00 APPOINTMENT OF NEW TRUSTEE

26.01 The statutory power to appoint new trustees of this Trust Deed shall be vested in the Company, but no trustee shall be appointed who shall not previously have been approved by an Extraordinary Resolution. A Trust Corporation may be appointed as sole trustee of this Trust Deed. If there shall be more than one trustee of this Trust Deed one trustee must be a trust corporation.

27.00 RETIREMENT BY TRUSTEE

27.01 A trustee may retire at any time, on giving to the Company not less than three months’ written notice, without assigning any reason and without being responsible for any costs occasioned by such retirement. The Company undertakes to use its best endeavours, if the only trustee of this Trust Deed being a Trust Corporation, gives notice under this clause or is removed from office, to procure that a new trustee (being a Trust Corporation) of this Trust Deed be appointed in accordance with clause 26.00. The retirement or removal of a sole trustee shall not become effective until a successor trustee (being a Trust Corporation) is appointed in accordance with clause 26.00;

27.02 Any corporation or association into which the Trustee may be converted or merged, or with which the Trustee may be consolidated, or to which the Trustee may sell or transfer the Trustee’s trust business and assets as a whole or substantially as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or transfer to which the Trustee is a party, shall be and

become successor trustee hereunder and vested with all of the trusts, powers, discretions, immunities, privileges and other matters as was the Trustee’s predecessor, without the execution or filing of any instrument or any further act, deed or conveyance on the part of any of the parties hereto anything herein to the contrary notwithstanding.

27.03 Every successor trustee appointed hereunder shall execute, acknowledge and deliver to the Trustee or the Trustee’s predecessor and also to the Company an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of the Trustee’s predecessor.

28.00 COMPANY’S WARRANTY AND PERFORMANCE COVENANT AND CONDITIONS PRECEDENT

28.01 Except as stated in the Disclosure Letter, the Company hereby represents and warrants:

28.01.01 that it has the necessary corporate power and authority to issue the Bonds on the terms and conditions set out herein and to perform and observe its obligations hereunder.

28.01.02 except for cases in which the necessary consents have been obtained prior to the date of this Trust Deed there is no law, decree or similar enactment binding on the Company and no provision in any corporate document, mortgage, indenture, trust, deed, contract or agreement binding on the Company or affecting its property which would conflict with or prevent the Company from issuing the Bonds on the terms and conditions set out herein, or which would prevent the Company from observing any of its obligations hereunder.

28.01.03 there are no legal or other proceedings pending or threatened before any tribunal, commission or other regulatory authority and involving the Company.

28.01.04 the Company is not in breach of any of the limits or restrictions or obligations imposed by any other agreement or instrument.

28.01.05 there has been no material adverse change in the financial condition of the Company since the            day of      2006.

28.01.06 the Company is a company with limited liability duly incorporated and validly existing under the laws of Cayman Islands with its own legal personality and with power to own its assets and carry on business as now conducted;

28.01.07 the Company has taken all necessary action to authorise the issue of the Bonds and the execution and delivery of this Trust Deed, and this Trust Deed constitutes the Company’s legal, valid and binding obligations enforceable against the Company in accordance with its terms, except as such enforcement may be limited by general equitable principles or by any relevant bankruptcy, insolvency, administration or similar laws affecting creditors’ rights generally;

28.01.08 the entry into and performance by the Company of its obligations under this Trust Deed does not and will not violate in any material respect any law or regulation of any governmental or official authority or body, or the constitutional documents of the Company, or any agreement, contract or other undertaking to which the Company is a party or which is binding on the Company or any of its assets;

28.01.09 all consents, licences, approvals and authorisations on the part of the Company required in connection with the entry into, performance, validity and enforceability of this Trust Deed necessary for the Company’s business have been obtained and are in full force and effect to the extent that they are still relevant and required by applicable law or by any of the Security Documents;

28.01.10 no action, suit, proceeding, litigation or dispute against the Company is currently taking place or pending or, to the Company’s knowledge, threatened nor is there subsisting any judgment or award given against the Company before any court, board of arbitration or other body;

28.01.11 no Event of Default or potential Event of Default has occurred and is continuing or will result from the issuing of the Bonds; and no other event has occurred and is continuing, which constitutes (or with the giving of notice, lapse of time, and/or other applicable condition, would constitute) a default under any document which is binding on the Company;

28.01.12 the Company’s audited accounts and consolidated financial statements to 31 ^st December 2005 which have been prepared in accordance with United States generally accepted accounting principles consistently applied, are true and accurate in every respect and represent a true and fair view of the consolidated financial position of the Company at the date of such accounts and financial statements and the results of its operations for the year ended on the date to which such accounts and consolidated financial statements were prepared and no significant liabilities (contingent or otherwise) exist which have not been fully disclosed or reserved against in such accounts and consolidated financial statements and that there has been no material adverse change in its financial condition from that set forth in such accounts and consolidated financial statements;

28.01.13 the Company did not knowingly omit to supply to the Trustee or the Arranger, prior to the execution of this Trust Deed, any information which, if disclosed, might adversely affect in either the Trustee’s or the Arranger’s reasonable opinion the decision of a person considering whether to enter into this Trust Deed, and nothing has occurred since the date on which any such other material was supplied to the Trustee or the Arranger which renders the information contained or any such other material supplied untrue or misleading in any respect and which, if disclosed, might materially adversely affect the decision of a person considering whether to enter into this Trust Deed.

28.02 The representations and warranties of the Company set out in clause 28.01 shall survive the execution of this Trust Deed.

28.03 The Company hereby covenants with the Trustee that it will duly perform and observe the obligations imposed on it by this Trust Deed and the Conditions.

28.04 The following Conditions Precedent must be fulfilled to the satisfaction of the Arranger prior to the disbursement of the principal amount of the Bonds:

28.04.01 The Insurance Policies are in full force and effect and the interest of the Trustee has been noted thereon as first loss payee;

28.04.02 Historical consolidated financial statements of the Company for each of the years in the five year period ended 31 ^st December 2005 have been delivered to the Trustee prior to the Closing Date;

28.04.03 A legal opinion issued by the Company’s Counsel approved by the Arranger and the Trustee that confirms inter alia that the Security Documents do not violate in any material respect any law or regulation of any governmental or regulatory authority in Cayman Islands is delivered to the Trustee;

28.04.04 The Company shall consent to the Arranger having the right to offer participation in the security to other investors in a form and substance acceptable solely to the Arranger;

28.04.05 Receipt by the Trustee of copies of up to date Regulatory Approvals;

28.04.06 There has not been any material adverse change in the financial, political, regulatory, economic or other conditions in the countries of operation of the Company, including but not limited to the Cayman Islands, the Bahamas and Barbados, that could, in the reasonable opinion of the Arranger affect the successful offer and sale of the Bonds as at the Closing Date;

28.04.07 There having been no occurrence of any material changes in the financial condition or prospects of the Company between 31 ^st December 2005 and the Closing Date, that may be expected, in the reasonable opinion of the Arranger, to have an adverse impact on the capacity of the Company to meet its repayment obligations in respect of the Bonds;

29.00 DEEMED INCLUSION OF CONDITIONS

29.01 The Conditions to be endorsed on the Certificates set out in the First Schedule and the provisions and descriptions in the Second Schedule shall have effect as if such Conditions descriptions and provisions were set out in full in this Trust Deed.

30.00 TRUSTEE MAY ASSUME COMPLIANCE BY THE COMPANY

30.01 Except as expressly provided in this Trust Deed, the Trustee shall be and is authorised to assume without enquiry, in the absence of actual knowledge by, or an express notice to it, to the contrary, that the Company is duly performing and observing all the terms of this Trust Deed to be performed and observed by the Company.

30.02 Notwithstanding knowledge by, or notice to the Trustee of any breach of any such term it shall be in the discretion of the Trustee whether to take any action or proceedings or to enforce performance until in any such case the Trustee is required to do so by an Extraordinary Resolution or a request in writing by the holders of not less than one-quarter of the principal amount of the Outstanding Bonds and then only if the Trustee shall be indemnified to its satisfaction against all actions, proceedings and claims to which it may render itself liable and all costs, charges, damages and expenses which it may incur by so doing.

31.00 AUDITOR’S CERTIFICATES

31.01 The Trustee may accept without further enquiry a certificate given by the Auditor under clause 18.01.03 that, at any particular time or throughout any specified period, all or any of the covenants or provisions of clause 5.00 have been duly complied with as conclusive evidence of such compliance.

32.00 TRANSFER OF BONDS

32.01 The Company will recognise the registered holder of any Bond as the absolute owner and shall not be bound to take notice of, recognise or comply with any trust, whether express, implied or constructive to which any Bond may be subject. The receipt of the Bondholders or in the case of joint Bondholders the receipt of any of them, for the interest from time to time accruing in respect of it or for any other money payable on the Bond shall be a good discharge to the Company, notwithstanding any notice it may have, whether express or otherwise, of the right, title, interest or claim of any other person to or in such Bond, interest or money. No notice of any trust, express, implied or constructive shall be entered on the Register in respect of any Bond.

32.02 Every Bondholder will be recognised by the Company as entitled to his Bond free from any equity, set-off or counter-claim on the part of the Company against the original or any intermediate holder of the Bond.

32.03 Except for the Bond issued for less than $10,000.00, the Bonds may only be transferred in multiples of $10,000.00 nominal value as the case may be, by instrument in writing in the usual common form or such other form as the Trustee may approve.

32.04 Every instrument of transfer must be signed by the transferor (or where the transferor is a corporation, given under its common seal, if it has one) and the transferor shall be deemed to remain the owner of the Bond to be transferred until the name of the transferee is entered in the Register in respect of that Bond.

32.05 Every instrument of transfer must be left for registration at the place where the Register shall for the time being be kept, accompanied by the Certificate for the Bond to be transferred and such other evidence as the Registrar may reasonably require to prove the title of the transferor or his

right to transfer the Bond and, if the instrument is executed by some other person on his behalf, the authority of the person to do so.

32.06 All instruments of transfer which shall be registered will be retained by the Registrar.

32.07 Any person becoming entitled to Bonds in consequence of bankruptcy of the holder of such Bonds may, on producing such evidence of his title as the Trustee shall think sufficient, be registered himself as the holder of such Bonds, or subject to the preceding provisions relating to the transfer may transfer such Bonds. The Trustee may retain the interest payable upon any Bond which any person under this paragraph is entitled to transfer until such person shall either be so registered or shall duly transfer the Bond. In the meantime the Trustee shall deposit such interest with a commercial bank in the name of the Trustee but shall not be responsible for the safe custody of such money or for interest thereon and the Trustee shall be entitled to deduct the expenses incurred by it in arranging such deposit.

33.00 CANCELLATION OF BONDS

33.01 All Bonds repaid by the Company and all Bonds purchased beneficially by or for the account of the Company and all Bonds surrendered for replacement or replaced by the Company in accordance with Condition 12 shall be cancelled forthwith by or on behalf of the Company and the Company shall procure that a certificate stating:

(a) the amounts paid in respect of such Bonds so repaid, purchased and so cancelled; and

(b) the serial numbers of the Certificates relating to such Bonds; and

(c) the serial numbers of the Certificates relating to the Bonds so surrendered and replaced;

shall be given to the Trustee by the Company or the Paying Agent as soon as reasonably possible after the date of such repayment, replacement or purchase, (as the case may be) and in any event not more than fourteen days thereafter. Such certificate may be accepted by the Trustee as conclusive evidence of repayment or replacement or such purchase and cancellation pro tanto of the Bonds.

34.00 FURTHER ASSURANCE

34.01 The Company shall at any time if and when required by the Trustee execute such further instruments as are required from time to time to perfect the Trustee’s security over all or any of the Charged Property to secure all money obligations and liabilities hereby covenanted to be paid or otherwise hereby secured or to facilitate the realisation of the Security Documents or the exercise of the powers conferred on the Trustee such further instruments to be prepared by or on behalf of the Trustee at the cost of the Company and to include such provisions for the benefit of the Trustee as the Trustee may reasonably require.

35.00 POWER OF ATTORNEY

35.01 The Company by way of security hereby irrevocably appoints the Trustee and the persons deriving title under it severally to be its Attorney in its name and on its behalf and as its act and deed or otherwise to execute and complete any documents which the Trustee may require for perfecting its title to or for vesting the Charged Property in the Trustee or its nominees or in any purchaser or to otherwise deal with the Charged Property in accordance with this Trust Deed and otherwise generally to sign seal deliver and otherwise perfect any such instrument referred to in clause 34.00 and all such deeds and documents and to do all such acts and things as may be required for the full exercise of the powers hereby conferred including any sale lease disposition realisation or getting in of the Charged Property or any part thereof in connection with any other exercise of any power hereunder and this appointment shall operate as a power of attorney made under the laws of the Cayman Islands to the extent permissible under such laws. The Company hereby covenants with the Trustee to ratify and confirm any deed document act and thing and all transactions which any such attorney may lawfully execute or do.

36.00 MISCELLANEOUS

36.01 No failure or delay by the Trustee in exercising any right or remedy shall operate as a waiver thereof nor shall any single or any partial exercise or waiver of any right or remedy preclude its further exercise or the exercise of any other right or remedy.

36.02 Each of the provisions of this Trust Deed is severable and distinct from the others and if at any time one or more of such provisions is or becomes invalid illegal or unenforceable the validity legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

36.03 This Trust Deed shall be enforceable notwithstanding any change in the constitution of the Trustee or its absorption in or amalgamation with or the acquisition of all or part of its undertaking by any other person.

36.04 Any liability or power which may be exercised or any determination which may be made hereunder by the Trustee may be exercised or made in its absolute and unfettered discretion and it shall not be obliged to give reasons therefor.

36.05 The Company hereby certifies that neither the execution of this Trust Deed nor the creation of any charge or security herein mentioned contravenes any of the provisions of the Memorandum or Articles of Association of the Company or any of its subsidiaries or any agreement binding on any of them.

36.06 This Trust Deed may be simultaneously executed in several counterparts, each of which shall be an original and all of such shall constitute but one and the same instrument.

36.07 Any amendment of any provision of this Trust Deed shall be in writing and signed by the parties.

36.08 This Trust Deed contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all other prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof.

36.09 Except as otherwise provided herein, this Trust Deed and all of the terms and provisions hereof shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, trustees and legal representatives.

36.10 The Company confirms to the Trustee for the benefit of itself and the Arranger that neither the Trustee nor the Arranger have acted as financial adviser to the Company and that the Company should not and has not relied on the Arranger’s or the Trustee’s advice to enter into the transaction including the issue of the Bonds. The Company hereby covenants to hold the Trustee and the Arranger blameless and without liability for any loss or expenses that may result at any time as a result of the issue of the Bonds.

36.11 The Trustee and the Company hereby agree and confirm that the Arranger may act as paying agent, registrar or underwriter of the Bonds and as registrar and paying agent of any securitised instruments derived from the Bonds and the Company may not claim any conflict of interest arising from the Arranger action in any of the above mentioned capacities.

36.12 The Bonds shall only be offered to Permitted Investors

36.13 No Bondholder may distribute or offer to sell any Bonds if such distribution or offer for sale will result in the purchaser of the Bonds not being a Permitted Investor.

37.00 NOTICES

37.01 Except as otherwise provided for in this Trust Deed, all notices or other communications under or in respect of this Trust Deed to any party to this Trust Deed shall be in writing. A written notice shall include a notice by facsimile.

37.02 All notices or other communications under or in respect of this Trust Deed must be given by delivery, by facsimile or by registered post and will be deemed to be duly given or made when delivered, in the case of personal delivery, or four business days after the date of posting by registered post,

or when despatched in the case of facsimile, (save that in the case of any notice or communication sent by facsimile that notice or communication will not be deemed to be given or made if the addressee has promptly notified the party dispatching the notice or communication that it has not received a legible copy of the notice or communication). All such notices or other communications must be sent to either party addressed to it at the address stated below (or at such other address as such party may specify for such purpose to the other by notice in writing):

37.03 A notice or other communication received on a non-Business Day or after 4.00 p.m. in the place of receipt shall be deemed to be served on the next following Business Day in such place.

38.00 GOVERNING LAW

38.01 The Trust Deed and the Bonds are governed by and shall be construed in accordance with the laws of the Cayman Islands.

39.00 SUBMISSION TO JURISDICTION

39.01 The courts of the Cayman Islands shall have non-exclusive jurisdiction in connection with any legal action, suit or proceeding arising out of or relating to this Trust Deed.

40.00 WAIVER OF OBJECTION

40.01 The Company waives any objection on the ground of inconvenient forum to any proceedings which relate to this Trust Deed and the Bonds being brought in the courts of the Cayman Islands.

41.00 SERVICE OF PROCESS

41.01 The Company agrees that any process or other document connected with proceedings in the Cayman Islands’ courts which relate to this Trust Deed and the Bonds shall be treated for all purposes as having been duly served on the Company if it is delivered at its registered office for the time being.

IN WITNESS WHEREOF the Seal of the Company was hereunto affixed the day and year first hereinabove written and the Common Seal of the Trustee was hereunto affixed the       day of August, 2006.

THE FIRST SCHEDULE PART A
FORM OF SECURED FIXED RATE BOND CERTIFICATE

Certificate No. __________
Nominal Amount of Bonds $ ___________

CONSOLIDATED WATER CO. LTD.
(A company incorporated under the laws of the Cayman Islands)

Secured Fixed Rate Bonds 2006 — 2016

THIS IS TO CERTIFY that ................. is/are the registered holder(s) of the above mentioned Secured Fixed Rate Bonds in the principal amount of $........... which are constituted and secured by a Trust Deed dated the            day of 2006 (the “Trust Deed”) and made between CONSOLIDATED WATER CO. LTD. (the “Company”) of the One Part and DEXTRA BANK & TRUST CO. LTD. of the Other Part as Trustee for the Bondholders. The Bonds are issued with the benefit of and subject to the provisions contained in the Trust Deed and the Conditions endorsed hereon.

Principal and interest are payable on the Bonds represented by this Certificate in accordance with the Conditions endorsed hereon.

IN WITNESS WHEREOF the Seal of the Company was affixed in accordance with a Resolution of the Company and in conformity with the Articles of Association of the Company and has been signed on behalf of the Company by the Director and the Secretary thereof.

DATED this..................day of......2006

Countersigned for the purpose of authentication only:

..................................
as Paying Agent

Registered...................

Dated..........................

NOTE : This Certificate must be surrendered before any transfer of the whole or any portion of the Bond to which it relates can be registered or a new Certificate issued in exchange. No fraction of $10,000.00 of Bonds can be transferred.

THE FIRST SCHEDULE PART B
TERMS AND CONDITIONS OF THE BONDS
(being part of the First Schedule above referred to)

A. The Secured Fixed Rate Bonds 2006-2016 (the “Bonds”) of CONSOLIDATED WATER CO. LTD. (the “Company”) are issued in one maturity 2016 and are in registered transferable form without interest coupons attached.

B. The Bonds are constituted by a Trust Deed (the “Trust Deed”) between the Company and DEXTRA BANK & TRUST CO. LTD. (the “Trustee”) as trustee for the holders of the Bonds (the “Bondholders”).

C.  SCOTIATRUST AND MERCHANT BANK TRINIDAD AND TOBAGO LIMITED is the Paying Agent (the “Paying Agent”) and Registrar (the “Registrar”) for the Bonds. Copies of the following documents are available for inspection at the office of operations for the time being of the Trustee (being at the date hereof Sagicor House, 198 North Church Street, George Town Grand Cayman) namely:-

(i) The Trust Deed;

(ii) The Paying Agency Agreement;

(iii) Subscription Agreement

D. The statements set out in these Conditions include summaries of, and are subject to, the provisions of the Trust Deed. The Bondholders are entitled to the benefit of, and are deemed to have notice of all the provisions of the Trust Deed, the Paying Agency Agreement and the Bonds, all of which are binding on them.

1.00 DEFINITIONS

1.01 In these Conditions expressions defined in the Trust Deed shall have the same meaning whenever they appear herein.

1.01.02 “Business Day” means a day on which Commercial Banks are open for all banking business in the Cayman Islands.

1.01.03 “Event of Default” means any event of default referred to in clause 6.00 of the Trust Deed.

1.01.04 “Payment Date” in respect of the Bonds means the same day of the month as the Closing Date in the third month

thereafter and thereafter the same days of each succeeding third month in each and every year until maturity or repayment, whichever comes first. If a Payment Date falls on a day which is not a Business Day (as defined above) it shall be the preceding day which is a Business Day.

1.01.05 “Payment Period” means in respect of the Bonds the period from the Closing Date to the first Payment Date and thereafter from the day after a Payment Date until the next Payment Date representing 40 quarterly payments until the Bonds are fully repaid

2.00 TITLE AND DENOMINATION

2.01 Title to the Bonds will pass upon registration of a proper instrument of transfer accompanied by the relative Certificate delivered to the Registrar. The Company, the Trustee, the Paying Agent and the Registrar may treat the registered Bondholder(s) of any Bond as the absolute owner thereof (whether or not such Bond shall be overdue and notwithstanding any notice of ownership or writing on the Certificate thereof or any notice of previous loss or theft or of trust or other interest therein) and the Register of Bondholders shall (in the absence of fraud, wilful default, bad faith and manifest error) at all times be conclusive evidence of the amount of Bonds held by each Bondholder for the purpose of making payment and for all other purposes.

2.02 All except one of the Bonds, which are serially numbered, are issued in the denominations of $10,000.00 or integral multiples thereof without interest coupons. One Bond will be issued in the denomination of $1,997.16.

3.00 STATUS

3.01 The Bonds are direct unconditional and secured obligations of the Company and will rank pari passu without any preference among themselves.

4.00 CURRENCY INDEMNITY AND TAXES INDEMNIFICATION

4.01 If under any applicable law or regulations or pursuant to a judgment or order made or registered against the Company or without limitation for any other reason any payment under or in connection with the Bonds is made or forced to be satisfied in a currency other than US Dollars then to the extent that the amount of such payment actually received by the Bondholders (“the payment currency”) when converted on the date of payment at the rate of exchange falls short of the amount payable under the Bonds the Company as a separate and independent obligation shall pay as an additional payment such shortfall. For the purpose of this Clause “rate of exchange” means the rate at which US Dollars may be lawfully purchased on the date of such payment with the payment currency and shall take into account any premium and other costs of exchange with respect to such transaction and the Company shall be liable for any premium and other cost of exchange including any Taxes incurred by reason of any such exchange.

4.02 All payments to be made by the Company shall be made free and clear of and without deduction for or on account of Taxes in the Cayman Islands unless the Company is required by the laws of the Cayman Islands to make such a payment subject to the deduction or withholding of Taxes, in which case the amount payable by the Company in respect of which such deduction or withholding is required to be made shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Paying Agent receives (free from any liability in respect of any such deduction or withholding) a net amount equal to the sum which it would have received had no such deduction or withholding been made or required to be made;

4.03 If at any time the Company is required by Cayman Islands law to make any deduction or withholding from any sum payable by it under this Bond (or if subsequently there is any change in the rates at which or the manner in which such deductions or withholdings are calculated), it shall promptly notify the Trustee upon becoming aware of the same.

4.04 If the Company is required by Cayman Islands law to make any deduction or withholding from any payment hereunder, it shall pay the full amount required to be deducted or withheld to the relevant taxation or other authority within the time allowed for such payment under applicable law and shall deliver to the Trustee within 30 days after it has made such payment to the applicable authority an original official receipt issued by such authority and any other appropriate evidence of the payment to such authority of all amounts so required to be deducted or withheld;

4.05 The Company shall indemnify and hold harmless the Trustee against, and reimburse it on demand, the amount of any Taxes so deducted withheld or accounted for and paid by the Company whether or not such Taxes were correctly or legally assessed or demanded.

5.00 SECURITY

5.01 The due payment of the principal and interest in respect of the Bonds (and all money payable by the Company under the Trust Deed) is secured in manner set out in clause 7.00 of the Trust Deed.

6.00 INTEREST

6.01 Accrual of Interest

6.01.01 The Bonds will bear interest from and including the Closing Date. Interest in respect of each Bond will accrue from day to day on the basis of a 360 day year of twelve 30 day months and will cease to accrue on the amount of principal repaid on a Due Date unless, the amortised payment then due is improperly withheld or refused.

6.02 Payment Dates and Payment Periods

6.02.01 Interest and principal in respect of the Bonds are payable by equal amortised payments in arrears on each Payment Date.

6.03 Rate of Interest

6.03.01 The Rate of Interest in respect of the Fixed Rate Bonds 2006-2016 is 5.95% per annum.

6.04 Default Interest

6.04.01 A default interest rate of two and a half percent (2.5%) per annum above the Rate of Interest is payable on the principal portion of any Payment that is not paid by the Company on its Due Date calculated from the Due Date to the date of actual payment.

6.05 Notification of Payment Date

6.05.01 The Paying Agent shall cause notice of each Payment Date, to be given to the Company and the Trustee as soon as practicable after their determination but in no event later than the fourth Business Day after the end of the preceding Payment Period.

6.05.02 The Payment Date so notified may subsequently be amended in the case of manifest error.

6.05.03 The Paying Agent shall provide to all Bondholders upon request notification of the Payment Date in respect of each Payment Period but shall not be required to give notice thereof in manner provided in Condition 15.00.

6.06 Notification etc to be final.

6.06.01 All notifications, opinions, determinations, certificates, calculations, quotations and decisions given, expressed, made or obtained for the purposes of this Condition 6.00, shall (in the absence of wilful default, bad faith or manifest error) be binding on the Company, the Trustee the Paying Agent and all Bondholders and (in the absence aforesaid) no liability to the Bondholders shall attach to the Paying Agent or the Trustee in connection with the exercise or non-exercise by them of their powers, duties and discretions under this Condition 6.00.

6.07 Interest ceasing to accrue

6.07.01 Interest on any Bond becoming liable to redemption shall cease to accrue immediately after the Due Date for redemption of such Bond unless on the Bondholder demanding on or after the date and at the place fixed for redemption of such Bond payment of the

redemption money payable on that Bond and tendering the Certificate for that Bond and a receipt for or form of authority as to payment of the redemption money, duly signed and authenticated in such manner as the Paying Agent may reasonably require, payment of the redemption money shall be refused.

6.07.02 The interest portion of any amortised payment in respect of the Bonds not paid on a Payment Date, together with any other interest in respect thereof not paid on any other Payment Date, shall so long as the same remains unpaid, constitute “Arrears of Interest”.

6.07.03 Arrears of Interest may at the option of the Company be paid in whole or (subject as provided in the Trust Deed) in part at any time upon the expiration of not less than seven (7) days’ notice to such effect given to the Trustee and to the Bondholders in accordance with Condition 15.00 below, but all Arrears of Interest in respect of all Bonds for the time being outstanding (as defined in the Trust Deed) shall become due in full on the next Payment Date or on the maturity of the Bonds whichever is the earlier. The provisions of this Condition 6.07.03 is without prejudice to the right of the Trustee to enforce the provisions of the Trust Deed and the Security Documents in accordance with Clause 8 of the Trust Deed.

6.07.04 If notice is given by the Company of its intention to pay the whole or any part of Arrears of Interest, the Company shall be obliged to do so upon the expiration of such notice. Arrears of Interest shall not themselves bear interest. Where Arrears of Interest are paid in part, each part payment shall be in respect of the full amount of the Arrears of Interest accrued due to the Payment Date or consecutive Payment Date furthest from the date of payment.

7.00 REPAYMENT PURCHASE AND CANCELLATION

7.01 Unless previously redeemed pursuant to these conditions or purchased and cancelled, the Company will redeem the Bonds by forty (40) equal quarterly amortised payments of $526,009.97 the first of which quarterly payments shall be made on the same day of the month as the Closing Date in the third month thereafter.

7.02 If a Payment Date falls on a date which is not a Business Day it shall occur on the preceding day which is a Business Day.

7.03 The Company may on any Payment Date occurring on or after the third anniversary of the Closing Date repay all and not part only of the principal amount then owing under the Bonds as specified in the notice at par on the following conditions:-

7.03.01 that the Company shall give to the Trustee, the Paying Agent and the Bondholders forty-five (45) days prior written notice in accordance with Condition 15.00 of the Company’s intention to repay the balance of the principal amount then owing under the Bonds.

7.03.02 that that notice shall expire on the next succeeding Payment Date.

7.03.03 that where the Company gives notice in accordance with paragraphs 7.03.01 and 7.03.02 of this Condition 7.03 of repayment, then upon expiration of the notice, the Company shall pay to the Paying Agent the principal amount stated in the notice and shall also pay to the Paying Agent interest accrued due up to the date of repayment and all Arrears of Interest together with a call premium, equal to 1.5% of the prepayment amount.

7.04 The Company may at any time purchase beneficially or procure others to purchase beneficially for its account Bonds by tender or by private treaty.

7.05 Payment of principal under this clause will only be made against presentation and surrender of the Bond Certificate at the Specified Office of the Paying Agent but the Trustee with the Company’s consent may dispense with the production of a Certificate in any particular case on such indemnity being given as the Trustee and the Company shall think fit.

7.06 All bonds which are redeemed or purchased by or on behalf of the Company will forthwith be cancelled and, accordingly, may not be re-issued or re-sold.

8.00 METHOD OF PAYMENT

8.01 Cheques for payments under the Bonds will be mailed to Bondholders at the address appearing in the register of Bondholders, or the said sums may be transferred by wire to an account as advised by the Bondholder to the Paying Agent.

8.02 All payments in respect of the Bonds will be subject to any applicable fiscal and other laws.

8.03 On payment under any of the provisions of clauses 9.00 and 10.00 of the Trust Deed the Paying Agent shall cause the Certificate to be cancelled and a new Certificate to be issued for the remaining principal amount due on the Bond if any and in the case of payment in full shall cause such Certificate to be cancelled in full.

9.00 TERMINATION AND APPOINTMENT OF NEW PAYING AGENT(S)

9.01 The Company may, with the prior approval of the Trustee and in accordance with the Paying Agency Agreement vary or terminate the appointment of the Paying Agent and/or appoint additional Paying Agent(s) and/or approve any change in the Specified Office of any Paying Agent, provided that so long as any of the Bonds remain outstanding the Company will maintain a Paying Agent with a Specified Office in Trinidad and Tobago or Cayman Islands.

9.02 In the event of any such variation, termination, appointment or change in Specified Office, notice thereof will be given by the Company to the Bondholders in accordance with Condition 15.00.

10.00 DEFAULT

10.01 The Bonds shall become immediately due and payable together with accrued interest, if any Event of Default occurs and either (a) the Trustee so determines or (b) the Trustee is requested in writing by Bondholders together holding at least one-quarter in principal amount of the Bonds outstanding or is requested by an Extraordinary Resolution to demand repayment.

10.02 At any time after the Bonds shall have become immediately due and repayable, the Trustee (to the exclusion of the Bondholders) may without notice to the Company, at its discretion, and shall, on the request in writing of the Bondholders holding not less than at least one-quarter of the principal amount of the Outstanding Bonds or, if so requested by Extraordinary Resolution (but, in either case, subject to the Trustee being indemnified to its satisfaction against all proceedings, claims and demands to which the Trustee may be liable and all costs, charges and expenses which may be incurred by the Trustee in connection therewith), take such proceedings against the Company as it may deem fit.

10.03 No Bondholders shall in any circumstances be entitled to any remedy (whether by way of action, petition or otherwise howsoever) for the recovery of any Bond or any part thereof or any interest thereon, unless the Trustee, having become bound to take proceedings in accordance with this Trust Deed, fails to do so within a reasonable time and such failure shall be continuing. In that case any Bondholder may, on giving the Trustee an indemnity satisfactory to the Trustee against all proceedings claims and demands to which it may be liable and all costs charges and expenses which may be incurred by it in connection therewith, in the name of the Trustee (but not otherwise) himself either take such proceedings against the Company or prove in the winding-up of the Company. The Trustee shall apply any money so received in the manner provided in the Trust Deed.

11.00 MODIFICATION OF TERMS AND CONDITIONS

11.01 The provisions in the Second Schedule of the Trust Deed for convening meetings of the Bondholders to consider any matters affecting their interest, including the modification by Extraordinary Resolution of these Conditions or the provisions of the Trust Deed are binding on the Bondholders.

11.02 Any resolution duly passed at any such meeting shall be binding on all the Bondholders, whether present or not.

11.03 The Trustee may agree, without the consent of the Bondholders, to any modification of, or to any waiver or authorisation of any breach or proposed breach of any provision of, the Trust Deed which, in the opinion of the Trustee, is not materially prejudicial to the interest of the Bondholders and which does not affect the obligation of the Company to make payments of interest and of principal in the amounts and at the times specified in the Trust Deed or in the Conditions or to any modification which is of a formal or technical nature or which is made to correct a manifest error.

11.04 Any such modification, waiver or authorisation shall be binding on the Bondholders and, unless the Trustee agrees otherwise, any such modification shall be notified to the Bondholders as soon as practicable thereafter in accordance with Condition 15.00.

12.00. REPLACEMENT OF BOND CERTIFICATES

12.01 If a Bond Certificate is mutilated, defaced, destroyed, stolen or lost it may, and shall in the case of mutilation or defacement, upon the surrender of the mutilated or defaced Certificate, be replaced at the Specified Office of the Registrar on payment of such costs as may be incurred in connection therewith and, in the case of destruction, theft or loss, on such terms as to evidence and indemnity as the Company may reasonably require.

13.00 INDEMNIFICATION OF THE TRUSTEE

13.01 The Trust Deed contains provisions for the indemnification of the Trustee and for its relief from responsibility. The Trustee is entitled to enter into business transactions with the Company, without accounting for any profit resulting therefrom or disclosing to the Bondholders any confidential information which is thereby obtained.

14.00 FURTHER ISSUES

14.01 The Company is at liberty from time to time without the consent of the Bondholders to create and issue further bonds or notes upon such terms as to interest, conversion, repayment, security and otherwise as the Company may at the time of issue thereof determine so long as any such security to the extent that it is over assets that secure the Bonds, is subject and subsequent to the security for the Bonds.

15.00 NOTICES

15.01 All notices to the Bondholders will be valid if published in a daily newspaper published in the jurisdiction of the address of each Bondholder appearing in the Register. Such notice shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first such publication.

15.02 Any notice to the Paying Agent and Registrar shall be addressed to:

PAYING AGENT AND REGISTRAR

SCOTIATRUST AND MERCHANT BANK TRINIDAD AND
TOBAGO LIMITED

56-58 Richmond Street
Port of Spain
Trinidad

and/or such other or further Paying Agent(s) or Registrar(s) for the Bonds as may from time to time be appointed by the Company with the approval of the Trustee and notice of whose appointment is given to the Bondholders within 14 days thereafter in accordance with Condition 15.00.

17.00. GOVERNING LAW

17.01 The Trust Deed and the Bonds are governed by and shall be construed in accordance with the laws of the Cayman Islands.

THE SECOND SCHEDULE ABOVE REFERRED TO
Provisions for Meetings of Bondholders

1. (i) A Bondholder may by an instrument in writing in the English language (hereinafter called a “form of proxy”) signed by the Bondholder or, in the case of a corporation, executed under its common seal (if it has one) or signed on its behalf by an attorney or a duly authorised officer of the corporation, appoint any person (hereinafter called a “proxy”) his or its proxy to act on his or its behalf in connection with any meeting or proposed meeting of the Bondholders.

(ii) Any Bondholder which is a corporation may by resolution of its directors or other governing body authorise any person to act as its representative (hereinafter called a “Representative”) in connection with any meeting or proposed meeting of the Bondholders.

(iii) Any proxy appointed pursuant to sub-paragraph (i) above or Representative appointed pursuant to sub-paragraph (ii) above shall so long as such appointment remains in force be deemed, for all purposes in connection with any meeting or proposed meeting of the Bondholders specified in such appointment, to be the holder of the Bonds to which such appointment relates and the holder of the Bonds shall be deemed for such purposes not to be the Bondholder.

2. The Trustee or the Company at any time may, and the Trustee (subject to its being indemnified to its satisfaction against all costs and expenses thereby occasioned) upon a request in writing of Bondholders holding not less than one-tenth of the principal amount of the Outstanding Bonds shall, convene a meeting of Bondholders. Whenever the Company is about to convene any such meeting it shall forthwith give notice in writing to the Trustee of the day, time and place thereof and of the nature of the business to be transacted thereat. Every meeting shall be held at such place as the Trustee may agree, provided that it is a place that one or more Bondholders resided at the time of issue of the Bonds.

3. At least twenty-one days’ notice (exclusive of the day on which the notice is given and the day on which the meeting is held) specifying the day, time and place of meeting shall be given to the Bondholders. A copy of the notice shall be given to the Trustee unless the meeting shall be convened by the Trustee and a copy shall be given to the Company unless the meeting shall be convened by the Company. Such notice shall specify the general nature of business to be transacted at the meeting thereby convened and shall be given in the manner provided in this Trust Deed but (except in the case of an Extraordinary Resolution) it shall not be necessary to specify in such notice the form of any resolution to be proposed. Such notice shall also include a statement to the effect that the Bondholders may appoint proxies by executing and delivering a form of proxy to the Specified Office of the Registrar not later than 48 hours before the time fixed for the meeting or, in the case of corporations, may appoint representatives by resolution of their directors or governing body.

4. A person nominated in writing by the Trustee shall be entitled to take the chair at every such meeting but if no such nomination is made or if at any meeting the person nominated shall not be present within fifteen minutes after the time appointed for the holding of such meeting the Bondholders present shall choose one of their number to be Chairman and failing such choice the Company may appoint a Chairman.

5. At any such meeting two or more persons present holding Bonds being proxies or representatives and holding or representing in the aggregate one-fiftieth of the principal amount of the Outstanding Bonds shall (except for the purpose of passing an Extraordinary Resolution) form a quorum for the transaction of business and no business (other than the choosing of a chairman) shall be transacted at any meeting unless the requisite quorum be present at the commencement of business. The quorum at any such meeting for the passing of any Extraordinary Resolution shall, (subject as

(i) modification of the date fixed for repayment of the Bonds;

(ii) reduction or cancellation of any part of the amount of principal payable on the Bonds;

(iii) modification of the dates of payment or the amounts payable in respect of interest or the method of determining the amounts payable in respect of interest on the Bonds;

(iv) alteration of the majority required to pass an Extraordinary Resolution; and

(v) alteration of this proviso or the proviso to paragraph 6 below,

the quorum shall be two or more persons present holding Bonds or being proxies or representatives and holding or representing in the aggregate not less than two-thirds of the principal amount of the Outstanding Bonds.

6. If within fifteen minutes from the time appointed for any meeting of Bondholders a quorum is not present, the meeting shall, if convened upon the request of Bondholders, be dissolved. In any other case it shall stand adjourned to such day, time and place, being not less than twenty-eight nor more than forty-two days thereafter, as may be appointed by the chairman and at such adjourned meeting two or more persons present holding Bonds or being proxies or representatives (whatever the principal amount of the Bonds held or represented by them) shall (subject as provided below) form a quorum and have power to pass any Extraordinary Resolution or other resolution and to decide upon all matters which, had there been a quorum, could properly have been dealt with at the meeting from which the adjournment took place. Provided that at any adjourned meeting the business of which includes any of the matters specified in the proviso to paragraph 5 above, the quorum shall be two or more persons present holding Bonds or being proxies or representatives and holding or representing in the aggregate not less than one-third of the principal amount of the Outstanding Bonds.

7. At least twenty-one days’ notice exclusive of the day on which the notice is given and the day on which the meeting is held of any adjourned meeting at which an Extraordinary Resolution is to be submitted shall be given in manner provided by this Trust Deed and such notice shall (except in cases where the proviso to paragraph 6 above shall apply when it shall state the relevant quorum) state that two or more persons present holding Bonds or being proxies or representatives at the adjourned meeting will form a quorum for all purposes.

8. The chairman may with the consent of (and shall if directed by) any such meeting adjourn the meeting from time to time and from place to place but no business shall be transacted at any adjourned meeting except business which might lawfully have been transacted at the meeting from which the adjournment took place. Subject as provided in paragraph 7 above it shall not be necessary to give to the Bondholders notice of an adjourned meeting unless the meeting has been adjourned sine die.

9. Every question submitted to a meeting of Bondholders shall be decided in the first instance by a show of hands and in the case of an equality of votes the chairman shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as the holder of a Bond or as a proxy or as a representative.

10. At any meeting of Bondholders, unless (before or on the declaration of the result of the show of hands) a poll is demanded by the chairman or by one or more persons present holding Bonds or being proxies or representatives and holding or representing not less than one-hundredth part of the principal amount of the Outstanding Bonds, a declaration by the chairman that a resolution has been carried or carried by a particular majority or lost or not carried by any particular majority shall be conclusive evidence of such fact.

11. If at any such meeting a poll is so demanded, it shall be taken in such manner and either at once or after an adjournment as the chairman shall direct and the result of such poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The demand for a poll shall not prevent the continuance of the meeting for the transaction of any business other than the question on which the poll has been demanded.

12. Any poll demanded at any such meeting on the election of a chairman or any question of adjournment shall be taken at the meeting without adjournment.

13. (A) The Trustee and its legal advisers and any director or duly authorised representative of a corporation being a trustee of this Trust Deed and any Director and legal adviser of the Company and any other person authorised in that behalf by the Trustee or the Company may attend and speak at any such meeting. Without prejudice to paragraph (ii) of the proviso to the definition of “Outstanding Bonds” in Clause 1.00 of the Trust Deed no person shall be entitled to attend (except as provided above) and vote at any meeting of the Bondholders or join with others in requesting the convening of such a meeting or to exercise the rights conferred on the Bondholders by Clause 8 of the Trust Deed or Condition 10.00 unless he is a proxy or a representative or is the holder of a Registered Bond or Registered Bonds. Nothing herein contained shall prevent any of the proxies named in any form or proxy or representative from being an officer or representative of or otherwise connected with the Company.

(B) Subject as provided in sub-paragraph (A) above at any such meeting (a) on a show of hands every person who is present in person and is a holder of Registered Bonds or is a proxy or representative shall have one vote and (b) on a poll every such person shall have one vote in respect of each $10,000.00 principal amount of Bonds in respect of which he is a proxy or representative or of which he is the holder. Without prejudice to the obligations of the proxies named in any form of proxy any person who is entitled to more than one vote need not use all his votes or cast all the votes to which he is entitled in the same way. In the case of joint holders of a Bond the vote of the senior who tenders a vote shall be accepted to the exclusion of the votes of the other joint holders and for this purpose, seniority shall be determined by the order in which the names stand in the Register in respect of the joint holding.

(C) Fractions of votes will not be counted.

14. The proxies named in any form of proxy and representatives need not be holders of Bonds.

15. Each form of proxy shall be deposited at such place as the Trustee shall approve not less than 48 hours before the time appointed for holding the meeting or adjourned meeting at which the proxies named propose to vote and in default the form of proxy shall not be treated as valid unless the chairman of the meeting decides otherwise before such meeting or adjourned meeting proceeds to business. A notarially certified copy of each such form of proxy shall be deposited with the Trustee (if so required by the Trustee) before the commencement of the meeting or adjourned meeting but the Trustee shall not thereby be obliged to investigate or be concerned with the validity of or the authority of the proxies named in any such form of proxy.

16. Any vote given in accordance with the terms of a form of proxy shall be valid notwithstanding the previous revocation or amendment of the form of proxy or of any of the Bondholders’ instructions pursuant to which it was executed provided that no intimation in writing of such revocation or amendment shall have been received by the Trustee at its Registered Office for the time being (or such other place as may have been approved by the Trustee for the purpose) 48 hours before the time appointed for holding the meeting or adjourned meeting at which the form of proxy is to be used.

17. The Bondholders shall in addition to all other powers have the following powers exercisable by Extraordinary Resolution only, namely:-

(A) Power to sanction any modification, variation, abrogation or compromise of, or any arrangement in respect of, the rights of the Bondholders against the Company whether such rights shall arise under this Trust Deed or otherwise.

(B) Power to assent to any modification of the provisions contained in this Trust Deed, or the Bonds which shall be proposed by the Company or the Trustee.

(C) Power to approve any person proposed to be appointed as a new trustee and power to remove any trustee or trustees of this Trust Deed.

(D) Power to authorise and empower the Trustee to concur in and execute and do all such deeds, instruments, acts and things as may be necessary to carry out and give effect to any Extraordinary Resolution.

(E) Power to agree to the release or exoneration of any Trustee from any liability in respect of anything done or omitted to be done by such Trustee before the giving of such release or exoneration and for which such Trustee may have become responsible under this Trust Deed.

(F) Power to give any sanction, direction or request which under the provisions of this Trust Deed or the Bonds is required to be given by Extraordinary Resolution.

(G) Power to appoint any person (whether Bondholders or not) as a committee or committees to represent the interests of the Bondholders and to confer upon such committee or committees any powers or discretions which the Bondholders could themselves exercise by Extraordinary Resolution.

(H) Power to sanction any scheme for the reconstruction of the Company or for the amalgamation of the Company with any other company.

Provided that the provisions contained in Clauses 6.00, 7.00 and 9.00 of the Trust Deed and in this proviso shall not be capable of modification by Extraordinary Resolution.

18. An Extraordinary Resolution passed at a meeting of the Bondholders duly convened and held in accordance with this Trust Deed shall be binding upon all the Bondholders whether present or not at such meeting and each of the Bondholders shall be bound to give effect thereto accordingly. The passing of any such resolution shall be conclusive evidence that the circumstances justify the passing thereof, the intention being that it shall rest with the meeting to determine without appeal whether or not the circumstances justify the passing of such resolution.

19. The expression “Extraordinary Resolution” when used in this Trust Deed means a resolution passed at a meeting of the Bondholders duly convened and held in accordance with the provisions contained in this Schedule by the majority consisting of not less than three-quarters of the votes cast thereon.

20. Minutes of all resolutions and proceedings at every such meeting as aforesaid shall be made and duly entered in books to be from time to time provided for that purpose by the Company and any such minutes, if purporting to be signed by the chairman of the meeting at which such resolutions were passed or matters transacted or by the chairman of the next succeeding meeting of the Bondholders, shall be conclusive evidence of the matters therein contained and until the contrary is proved every such meeting in respect of the proceedings of which minutes have been made shall be deemed to have been duly convened and held and all resolutions passed or matters transacted thereat to have been duly passed and transacted.

21. A resolution in writing signed by or on behalf of all the Bondholders shall for all purposes of this Trust Deed be as valid and effective as an Extraordinary Resolution passed at a meeting of the Bondholders duly convened and held. The resolution in writing may be contained in one document or in several documents in or substantially in like form each signed by or on behalf of one or more of the Bondholders.

22. Subject to the provisions contained in this Schedule, the Trustee may without the consent of the Bondholders prescribe such further regulations regarding the holding of meetings of Bondholders and attendance and voting thereat as it may in its discretion determine.

EXHIBIT 10.2

CONSOLIDATED WATER CO. LTD.

SUBSCRIPTION AGREEMENT

US$15,771,997.16

COMPRISING

Fixed Rate Bonds 2006 — 2016

DATE:

TO: SCOTIATRUST AND MERCHANT BANK TRINIDAD AND TOBAGO LIMITED

Dear Sirs,

CONSOLIDATED WATER CO. LTD. (“the Company”) proposes to issue Bonds in the aggregate value of not more than US$15,771,997.16 (hereinafter referred to as the “Transaction”) comprising Fixed Rate Bonds 2006— 2016 (the “Bonds”). The Bonds except for one will be issued in registered transferable form in the denomination of US$10,000.00 or integral multiples thereof.

The Bonds are to be constituted by a Trust Deed (the “Trust Deed”) between the Company of the one part and Dextra Bank & Trust Co. Ltd. (the “Trustee”) as trustee.

The Company wishes to record the arrangements agreed between it and Scotiatrust and Merchant Bank Trinidad and Tobago Limited (“the Arranger”) for the subscription and issue of the Bonds.

1. SUBSCRIPTION OF BONDS

	(A)		Subject as provided below, the Company agrees with the Arranger to issue the Bonds and the Arranger agrees to underwrite the issue of the Bonds to the full extent of US$15,771,997.16 at the Issue Price and to subscribe and pay for the Bonds at the Issue Price on the Closing Date provided however that the Arranger shall be at liberty to offer to investors its right to subscribe for the whole or any part of the Bonds and to be issued with Bonds therefor in manner described in paragraph 1(B) hereafter on the terms of this Subscription Agreement and the Trust Deed.
	(B)		The Company hereby confirms that it has authorized and agreed for the Arranger:

	(a)		on or after the Closing Date to transfer and assign the Bonds into a separate trust; and
	(b)		to cause such separate trust to issue certificates of interest in the Bonds of varying terms to investors at market rates, which may

result in a gain or a loss to the Arranger. Any loss resulting from the issue of such certificates will be borne, and any profit arising therefrom shall be retained by the Arranger.

2. ANNOUNCEMENTS AND AUTHORISATIONS

The Company confirms that it has authorised the Arranger to arrange for announcements in connection with the issue of the Bonds to be circulated privately to investors (except to investors in jurisdictions where such circulation would violate any applicable law); and that it has authorised the issue by the Arranger on behalf of the Company of a document in a form approved by the Company containing an offer to subscribers in jurisdictions where such circulation would not violate any applicable law (the “Term Sheet”).

3. TRUST DEED

The Company undertakes with the Arranger that the Bonds will be constituted by the Trust Deed to be made between the Company and the Trustee and to be substantially in the agreed form (subject to such amendments as may be agreed between the Company and the Trustee prior to execution thereof) and will be further secured in the manner described in Clause 7 of the Trust Deed.

4. REPRESENTATIONS AND WARRANTIES

(A) As a condition of the agreement by the Arranger to subscribe and pay for or procure the subscription and payment for the Bonds and in consideration thereof, the Company hereby warrants to and agrees with the Arranger (for the benefit of themselves and the other subscribers of the Bonds and as agents for such subscribers) as follows:

	(a)		that the information contained in the Term Sheet is true and accurate in all material respects and is not misleading that there are no other facts, the omission of which would make any of such information misleading and that the Company has made all reasonable enquiries to ascertain all facts material for the purposes aforesaid;
	(b)		that the authorisation of the Bonds, the offering of the Bonds under the terms and conditions of this Subscription Agreement, the issue of the Bonds, the execution and delivery of this Subscription Agreement, the Trust Deed and the Paying Agency Agreement (the “Paying Agency Agreement”) all substantially in the agreed form and the compliance by the Company with the terms thereof and of the Bonds;

	(i)		do not and will not contravene any law or statute; and
	(ii)		do not, and on the Closing Date will not infringe the terms of, or constitute a default under any trust deed, agreement or other instrument or obligation to which the Company is a party or by which it or its property is bound.

	(c)		that the execution and delivery by the Company of this Subscription Agreement, the Trust Deed and the Paying Agency Agreement, the execution, issue and delivery of the Bonds and the performance of the obligations to be assumed thereunder have been duly authorised so that upon due execution or in the case of the Trust Deed and Bonds, due execution and delivery, the same will constitute valid and legally binding obligations of the Company in accordance with their respective terms;
	(d)		that the execution, delivery and performance by the Company of the Security Documents will not conflict, contravene or result in a breach or violation of (i) the Company’s constitutional documents (ii) any statute, order (including administrative or judicial orders), award, rule or regulation applicable to the Company (iii) any agreement trust deed, negative pledge or other arrangement to which the Company or its property is bound.

	(e)		that the Security Documents are in proper legal form and in accordance with the laws of the Cayman Islands.
	(f)		that the selection by the Company to appoint the Arranger as subscriber of the Bonds and to pursue the Transaction is legal, valid and has been made by the Company in accordance with its applicable laws and regulations.
	(g)		that the proceeds of the Transaction would be used by the Company for the purpose outlined in Recital C of the Trust Deed and such use of proceeds is legitimate and in accordance with applicable law and the Company’s Memorandum and Articles of Association.
	(h)		that based on the information given to the Company by the Arranger, as an expert in the field in Trinidad and Tobago, as to the requirements of the law in that jurisdiction, all consents, approvals, authorisations or other orders of all governmental and regulatory authorities in Trinidad and Tobago and the Cayman Islands required for or in connection with the issue and offering of the Bonds and compliance with the terms of the Bonds, the Subscription Agreement, the Trust Deed and the Paying Agency Agreement have been obtained and are in force and effect and that the Company has complied with all legal and other requirements necessary to ensure that upon due execution issue and delivery in the manner aforesaid the Bonds will represent valid and legally binding obligations of the Company in accordance with their terms, that this Subscription Agreement, the Trust Deed and the Paying Agency Agreement will constitute valid and legally binding obligations of the Company in accordance with their respective terms and that due payment of the principal and interest in respect of the Bonds and compliance with their terms and with the terms of this Subscription Agreement, the Trust Deed and the Paying Agency Agreement will not infringe the terms of any such consent, approval, authorisation or order.
	(i)		that the Company shall refrain from launching any loan or other capital raising exercise in the international syndicated loan or capital markets before the signing of the Security Documents without first having obtained the written consent of the Arranger.
	(j)		that all information that has been or will hereafter be made available to the Arranger in relation to the Transaction will be to the best of the Company’s knowledge complete and correct in all material respects and does not and will not to the best of the Company’s knowledge contain any untrue statement of a material fact or omit to state a material fact or omit to state a material fact necessary in order to make a statement (or the information) contained therein not misleading in light of the circumstances under which such statement was made (or such information was given).
	(k)		that the representations and warranties contained in the Trust Deed are true and correct in all material respects.
	(l)		that it has sought and received all necessary independent advice including but not limited to legal, accounting and tax advice in relation to the issue of the Bonds and that the Company fully understands the transaction and that the Company will derive a corporate benefit as a result of the issuance of the Bonds.

(B) The Company undertakes with the Arranger that it will notify it of any material change affecting any of the aforesaid representations, warranties and agreements at any time prior to payment being made to the Company on the Closing Date and will take such steps as may be reasonably requested by the Arranger to remedy and/or

3

publicise the same. Upon any material breach of any of the said warranties or representations, material failure to perform any of the said agreements or any change rendering any of the said warranties representations or agreements inaccurate in a material respect coming to the notice of the Arranger prior to payment being made to the Company on the Closing Date, the Arranger shall be entitled (but not bound) by notice to the Company to treat such breach, failure or change as releasing and discharging the Arranger from its obligations hereunder except to the extent that the Arranger shall have caused damage to the Company through failure to comply with its obligations under paragraph 9(A) below, and provided that such release or discharge shall be without prejudice to the liability of the Company for the payment of the expenses referred to in paragraph 6 below which are incurred prior to, or in connection with such release and discharge.

(C) The agreement of the Arranger with the Company to procure subscribers for the Bonds is entered into on the basis of the aforesaid representations, warranties and agreements with the intention that the same shall remain true and accurate in all material respects up to and including the Closing Date and the Company undertakes with the Arranger (for the benefit of itself and the other subscribers for the Bonds and as agents for such subscribers) that it will hold the Arranger fully and effectually indemnified from and against any and all losses, liabilities, costs, claims, charges, actions, proceedings, damages, expenses or demands which it may incur or which may be made against it as a result of or arising out of, or in relation to any misrepresentation or alleged misrepresentation by the Company in connection with the issue of the Bonds or any breach or alleged breach of any of the warranties or agreements contained in sub-paragraph (A) and/or (B) above. Such indemnity shall extend to include all costs, charges and expenses which the Arranger may reasonably pay or incur in disputing or defending any claim or action or other proceedings in respect of which indemnity may be sought against the Company under this sub-paragraph (C). If any action, proceeding claim or demand shall be brought or asserted against the Arranger in respect of which indemnity may be sought from the Company as herein provided, the Arranger shall promptly notify the Company in writing, and the Company shall have the option to assume the defence thereof, including the employment of legal advisers approved by the Arranger (such approval not to be unreasonably withheld), and shall pay all expenses relating thereto. The Arranger shall have the right to employ its own legal adviser in any such action and defend or participate in the defence thereof but the fees and expenses of such legal adviser shall be borne by the Arranger, unless the employment thereof has been specifically authorised by the Company and/or the Company has failed to assume such defence and employ legal advisers for such purpose. The Company shall not be liable to indemnify the Arranger for any settlement of any such action, proceedings, claim or demand effected without the consent of the Company.

(D) The Company will pay and hold harmless the Arranger against any documentary, stamp, issue or other tax or duty, without limitation including any interest and penalties on the creation, offering, allocation, issue or allotment of the Bonds in accordance with the terms of this Subscription Agreement and on the execution and delivery of the Trust Deed, the Paying Agency Agreement and this Subscription Agreement which are or may be required to be paid under the laws of the Cayman Islands, as well as any other territory in which the Bonds are offered for sale.

(E) The rights and remedies conferred upon The Arranger by the aforesaid representations, warranties, agreements and indemnities shall continue in full force and effect notwithstanding any investigation by or on behalf of The Arranger or completion of the arrangements herein set out for the subscription and issue of the Bonds.

5. COMMISSION

(A)

In consideration of the agreement by the Arranger to subscribe for Bonds or to procure subscribers for the Bonds in manner described in paragraph 1 hereof and to act as the agent of the Company in relation to the issue of Bonds pursuant to the arrangements referred to in sub-paragraph (b) of this paragraph, the Company shall pay to the Arranger a commission of zero

point six percent (0.60%) of the aggregate principal amount of the Bonds in the amount of US$15,771,997.16 subscribed on the Closing Date in US Currency (the “Arrangement Fee”) which shall cover the underwriting fees of the Arranger.

(B)

In addition to 5(A) above, the Company hereby confirms that it has authorized and agreed for the Arranger:

	(a)		to subscribe for the Bonds;
	(b)		on or after the Closing Dates to transfer and assign the Bonds into a separate trust; and
	(c)		for its own account to issue or cause the trustee for such separate trust to issue transferable certificates of interest or participation in the bonds and/or in monies to be paid under the Bonds of varying terms to the Arranger and/or investors at market rates. Any loss resulting from the issue or transfer of such certificates shall be borne, and any profits arising therefrom shall be retained by the Arranger.

(C)

The Company hereby confirms that it has authorised the Arranger to offer Bonds on behalf of the Company privately to potential subscribers.

(D)

The Arranger shall be entitled to deduct the Underwriting Commission from the subscription money as provided in paragraph 7 below.

6. COSTS AND EXPENSES

(A)

The Company agrees to bear and pay all costs and expenses of the legal and other advisers to the Arranger including all costs related to the subscription incurred in connection with the preparation and/or review, execution and printing of the Bonds, the Trust Deed, the Paying Agency Agreement and this Subscription Agreement (in preliminary and in final form) (collectively called the “Bond Documents”), along with any amendment, supplement, registration or modification to, or waiver under the Bond Documents and all other documents relating to the issue and subscription and sale of the Bonds and in connection with the initial delivery and distribution of the Bonds and the fees and disbursements, excluding stamp duty in Trinidad and Tobago.

(B)

In addition to the commission costs, expenses and fees referred to in paragraph 5(A) above and in sub-paragraph (A) of this paragraph the Company agrees to reimburse to the Arranger all its reasonable expenses in connection with the issue and subscription and sale of the Bonds (including reasonable legal, advertising, telecopier, telephone, travelling and other out-of-pocket expenses).

(C)

All costs and expenses referred to in this paragraph shall be payable notwithstanding that the Arranger is released or discharged pursuant to the terms of this Subscription Agreement and the Arranger shall be entitled to deduct such costs and expenses from the subscription money as provided in paragraph 7 below.

(D)

The Arranger shall be entitled to deduct the said costs, expenses, fees and disbursements referred to in sub-paragraph (A) of this paragraph from the subscription monies as provided in paragraph 7 below.

7. CLOSING

Payment of the net subscription money for the Bonds (namely the sum of US$15,771,997.16 less the Arrangement Fee costs and expenses referred to in paragraph

6 above) shall be made by the Arranger to the Company in immediately available funds on the Closing Date. The Company undertakes to deliver to the Arranger the Bonds duly executed on its behalf not later than 14 days after the Closing Date.

8. CONDITIONS

This Subscription Agreement and the respective obligations of the parties hereto are conditional upon:

(A)

there not having been as at the Closing Date, any adverse changes or developments reasonably likely to involve a prospective adverse change in the market conditions (financial or otherwise) of Trinidad and Tobago, the Cayman Islands, or any other jurisdiction in which the Bonds are sold which is material in the context of the issue of the Bonds and there not having occurred any event rendering untrue or incorrect to an extent which is material as aforesaid any of the representations and warranties contained in sub-paragraph 4 (A) above as though the said representations and warranties had been given on the Closing Date;

(B)

there having been as at the Closing Date no material adverse change in the financial circumstances of the Company or the prospects of the Company that could in the reasonable opinion of the Trustee affect the Company’s ability to meet it’s obligations under the Trust Deed or the Bonds;

(C)

the execution of the Trust Deed and the Paying Agency Agreement on or prior to the Closing Date by or on behalf of all parties thereto;

(D)

the delivery of legal opinions from the Company’s counsel in a form satisfactory to the Arranger;

(E)

the undertaking of the Company not to engage in activities leading to a new capital markets issue before 28 th August 2006, being ninety (90) days immediately following the mandate letter from the Company to the Arranger dated 29 th May 2006; and

if any of the foregoing conditions is not satisfied, this Subscription Agreement shall, except as specifically provided herein, thereupon terminate and (except for the liability of the Company for the payment of the costs and expenses mentioned in paragraph 6 above which were incurred prior to or are incurred in connection with such termination) the parties hereto shall be released and discharged from their respective obligations hereunder and provided that the Arranger may at its discretion waive compliance with any of the provisions of this paragraph.

9. UNDERTAKINGS AND WARRANTIES OF THE ARRANGER

(A)

The Arranger undertakes that Bonds offered by it on behalf of the Company pursuant to the terms of this Subscription Agreement will be offered by it as the case may be on the terms as set forth in the Trust Deed.

(B)

The Arranger further agrees to use all reasonable endeavours to ensure that the date of completion of the distribution of the Bonds is in accordance with this Agreement.

(C)

The Arranger warrants that the Company is exempt from registration as a reporting issuer under the Securities Act as the Bonds will not be offered to the public.

(D)

The Arranger warrants that the Bonds are exempt from registration under the Securities Act as the Bonds will not be offered to the public.

(E)

The Arranger warrants that the distribution of the Bonds shall not be accompanied by an advertisement other than an announcement of its

15. DESCRIPTIVE HEADINGS

The Descriptive Headings in this Subscription Agreement are for convenience of reference only and shall not define or limit the provisions hereof.

16. GOVERNING LAW

This Subscription Agreement shall be governed by and construed in accordance with the laws of the Cayman Islands, and the Cayman Islands’ courts will have non-exclusive jurisdiction in connection with any legal action, suit or proceeding arising out of or relating to this Subscription Agreement.

17. SOVEREIGN IMMUNITY

The Company represents and warrants that it has no right to immunity, on the grounds of sovereignty or otherwise, from the execution of any judgment in the Cayman Islands or from the execution of enforcement in the Cayman Islands of any arbitral award (except, in each case, for the limitation on alienation of public property) in respect of any proceeding or any other matter arising out of or relating to its obligations contained in this Subscription Agreement.

18. REMEDIES AND WAIVERS

No failure or delay by the Arranger in exercising any power, remedy, discretion, authority or other right under this Agreement shall waive or impair that or any other right of the Arranger. No single or partial exercise of any right shall preclude its additional or future exercise. No such waiver shall waive any other right under this Agreement. All waivers or consents given under this Agreement shall be in writing.

19. AMENDMENT

Any amendment of any provision of this Agreement shall be in writing and signed by the parties.

20. COUNTERPARTS

This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

21. ENTIRE AGREEMENT

This Subscription Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all other prior agreements and undertakings, both written and oral, between the parties with respect to the subject matter hereof.

22. SUCCESSORS

Except as otherwise provided herein, this Subscription Agreement and all of the terms and provisions hereof shall be binding upon and inure to the benefit of the parties and their respective heirs, executors, administrators, successors, trustees and legal representatives.

23. CHANGE IN CIRCUMSTANCES

	(i)		The Arranger incurs a cost as a result of its having entered into and/or performing any of its respective obligations under this Agreement; or
	(ii)		The Arranger becomes liable to make any payment on or calculated by reference to any sum received or receivable by it hereunder; or
	(iii)		The Arranger’s Return on Solvency is decreased (Return on Solvency means the Arranger’s fee and income on the Transaction divided by statutory capital requirements applicable to the Arranger for the transaction);

			The Company shall from time to time on demand by the Arranger promptly pay to the Arranger amounts sufficient to indemnify the Arranger against, as the case may be, such cost, increased cost or liability or reduction in the rate of Return on Solvency.
			The Company will not bear any increased costs or liability by reason of the Arranger’s inefficiency or poor performance of its operations.

24. INTERPRETATION

In this Subscription Agreement unless the context otherwise requires or unless otherwise defined in this Subscription Agreement, words and expressions defined in the Trust Deed shall have the same meanings when used in this Subscription Agreement.

Please confirm that this letter correctly sets out the arrangements agreed between us.

Yours faithfully,

For and on behalf of Consolidated Water Co. Ltd.

Frederick W. McTaggart

We hereby confirm that the terms of the above written letter agreement correctly set out the arrangements agreed between us.

Yours faithfully,

For and on behalf of Scotiatrust and Merchant Bank Trinidad and Tobago Limited

Richard P. Young

EXHIBIT 10.3

CONSOLIDATED WATER CO. LTD.

PAYING AGENCY AGREEMENT

US$15,771,997.16

COMPRISING

US$15,771,997.16 Fixed Rate Bonds 2006 — 2016

P.O. Box 1114 GT
Regatta Office Park
Windward Three, 4 ^th Floor
West Bay Road
Grand Cayman, Cayman Islands

DATE :

TO: SCOTIATRUST AND MERCHANT BANK TRINIDAD AND TOBAGO LIMITED

Dear Sirs,

      CONSOLIDATED WATER CO. LTD. (“the Company”) is issuing Bonds in the aggregate value of not more than US$15,771,997.16 comprising Fixed Rate Bonds 2006-2016 (the “Bonds”). These Bonds will be constituted and secured by a Trust Deed of even date herewith made between the Company and DEXTRA BANK & TRUST CO. LTD. (“the Trustee”).

     The Company hereby appoints SCOTIATRUST AND MERCHANT BANK TRINIDAD AND TOBAGO LIMITED the Paying Agent (“the Paying Agent”) upon the terms and conditions set out below, for the payment of principal and interest in respect of the Bonds.

     The Paying Agent appointed under the terms and conditions of this Agreement shall also undertake the duties and responsibilities of Registrar on behalf of the Company in respect of the Bonds. These duties shall include:

	(i)		maintenance of the Register of Bondholders;
	(ii)		dealing with transfers of Bonds and other registrations;
	(iii)		providing information required by the Company and the Trustee from time to time relative to the register of Bondholders.

     The expression “Paying Agent” and “Specified Office” as used herein shall be deemed to mean and include the Paying Agent and the offices respectively specified in the Trust Deed (as hereinafter defined) or such other Paying Agents or Specified Offices from time to time duly appointed by the Company in accordance with Condition 9.00 of the Bonds. The Bonds will be issued in registered transferable form in accordance with Condition 2.00 of the Bonds. The Bonds are to be issued substantially in the form set out in Part A of the First Schedule to the Trust Deed. Expressions used

herein shall, unless the context otherwise requires, have the meanings ascribed thereto in the Trust Deed and the Schedules thereto.

(ii)

the Paying Agent to deliver up all Bonds and all sums documents and records held by them in respect of Bonds and interest thereon to the Trustee or as the Trustee shall direct in such notice provided that such notice shall be deemed not to apply to any documents or records which the relative Paying Agent is obliged not to release by any law or regulation.

The Paying Agent shall treat a certificate of the Trustee that any of the events described in the said Condition 10.00 has occurred as conclusive evidence of that fact.

3. ALL Bonds which are repaid or purchased by or on behalf of the Company and required to be cancelled shall be cancelled forthwith by the Paying Agent. The Paying Agent shall give all relevant details and forward the cancelled Bonds to the Company which shall as soon as reasonably possible after the date of such repayment or purchase (as the case may be) furnish the Trustee with a certificate or certificates signed by a duly authorised officer stating the amounts paid in respect of such Bonds so repaid or purchased or paid and so cancelled, and the serial numbers of such Bonds.

5. The Company will indemnify and hold harmless the Paying Agent against any losses, liabilities, costs, claims, actions or demands which the Paying Agent may incur or which may be made against the Paying Agent as a result of or in connection with its appointment or the exercise of its power, discretions, authorities and duties under this Agreement (including reasonable fees and expenses of legal advisers) as well as the costs and expenses of defending any claim, action or demand except such as may result from its own willful default, negligence or bad faith or that of its officers or employees.

6. WITHOUT PREJUDICE to the provisions of paragraph 2 (B) hereof in acting hereunder and in connection with the Bonds the Paying Agent shall act solely as agent of the Company and will not thereby assume any obligations towards or relationship of agency or trust for any of the Bondholders.

7. EXCEPT as ordered by a court of competent jurisdiction or as required by law, the Paying Agent shall (notwithstanding any notice to the contrary) be entitled to treat the registered holder of any Bonds as the absolute owner thereof.

8. The Paying Agent will procure that, so long as any of the Bonds are outstanding, copies of the Trust Deed, and this Agreement together with copies of the latest audited accounts of the Company as produced by the Company will be available for inspection by Bondholders at its office specified herein during normal business hours.

notice to that effect and the Company shall thereupon forthwith appoint a replacement provided that so long as any of the Bonds remains outstanding no such notice shall expire between thirty (30) days prior to a Payment Date and fifteen (15) days after a Payment Date. In the event that the Company fails to appoint a new Paying Agent within the notice period given by the Paying Agent as provided above then upon expiration of the notice period the Paying Agent shall continue to hold the office of Paying Agent only to the extent that it be responsible for the Register of Bondholders, the safe custody of the Bonds and all sums, documents or records held by it in respect of the Bonds and interest thereon on behalf of the Trustee and may thereupon appoint a new Paying Agent to take over all of the responsibilities under this Agreement with immediate effect and shall advise the Trustee and the Company in writing of such appointment. The new Paying Agent shall upon such appointment be responsible for and may be requested to indemnify the Paying Agent against any claims of whatsoever nature that may arise out of the discharge of the duties under this Agreement by the new Paying Agent and all other provisions of this Agreement shall be applicable to the new Paying Agent as if the new Paying Agent was an original signatory to this Agreement.

	(C)		As soon as practicable, and in any event at least 60 days prior to the effective date of the resignation or removal of any Paying Agent, the Company shall give, or cause to be given notice thereof to the Bondholders in accordance with Condition 16.00 of the Bonds.
	(D)		Before the Paying Agent changes its Specified Office it shall give to the Company and the Trustee not less than 65 days’ prior written notice to that effect giving the address of the changed Specified Office. The Company shall (unless the appointment of the relative Paying Agent is to terminate pursuant to sub-paragraph (A) or (B) above on or prior to the date of such change) give to the Bondholders and the Trustee at least 14 days’ notice of such change and of the address of the changed Specified Office.
	(E)		The Company shall give notice to the Bondholders in accordance with the said Condition 16.00 of any appointment of a Paying Agent hereunder within 14 days of such appointment.

10. The Paying Agent shall be deemed to have notice of, and in so far as the terms of the Trust Deed affect the duties of the Paying Agent herein, shall not act in a manner inconsistent with the terms of the Trust Deed including the Conditions of the Bonds.

11. SUBJECT to the Conditions of the Bonds the Paying Agent and any of its respective officers and employees in its or his individual or any other capacity, may become the owner of, or acquire any interest in any Bonds with the same rights that it or he would have if it or he were not the Paying Agent hereunder or an officer or employee thereof, and the Paying Agent may engage or be interested in any financial or other transaction with the Company, or may act on, or as a depository, trustee or agent for, any committee or body of Bondholders or other obligations of or lenders to the Company as freely as if it were not the Paying Agent hereunder.

12. ALL notices hereunder shall be either delivered to the party or parties to which they are addressed by hand or shall be sent by telecopy, or facsimile. Any notice sent by telecopy, or facsimile shall be deemed to have been given, made or served at the time of dispatch. All notices shall be sent to the parties at their respective addresses as follows, or any other addresses in Trinidad and Tobago or the Cayman Islands of which any of the foregoing shall have notified the others in writing in accordance with this Agreement.

EXHIBIT 10.4

 

 

GUARANTEE

by

CAYMAN WATER COMPANY LIMITED

IN FAVOUR OF

DEXTRA BANK & TRUST CO. LTD.

Dated the 4th day of August, 2006

 

 

TABLE OF CONTENTS

SECTION 1. DEFINITIONS AND INTERPRETATION			2
1.1 General Definitions			2
SECTION 2. GUARANTEE			3
2.1 Guarantor Guaranteed Obligations			3
2.2 Continuing Guarantee			3
2.3 Payment of Guaranteed Obligations			4
2.4 No Set-off			4
2.5 Taxes			4
2.6 Application of Payments			4
SECTION 3. SAVING PROVISIONS			4
3.1 Change in Guaranteed Obligations			4
3.2 Waiver of Defenses			5
3.3 Immediate Recourse			5
3.4 Non-Competition			5
3.5 Bankruptcy or Liquidation of the Borrower			6
3.6 Appropriaton of Moneys			6
3.7 Reinstatement			6
3.8 Additional Security			7
SECTION 4. INDEMNITY			7
4.1 Indemnity			7
SECTION 5. REPRESENTATIONS AND WARRANTIES			7
5.1 Representations and Warranties			7
5.2 Trustee’s Reliance			8
5.3 Rights and Remedies not Limited			8
SECTION 6. COVENANTS			8
6.1 Guarantor Covenants			8
SECTION 7. MISCELLANEOUS			9
7.1 Notices			9
7.2 English Language			9
7.3 No Waiver; Remedies Cumulative			9
7.4 Governing Law and Jurisdiction			10
7.5 Submission			10
7.6 Judgments and Immunity			10
7.7 Benefit of Guarantee			11
7.8 Expenses			11
7.9 Amendment or Waiver			11
7.10 Counterparts			11
7.11 Set-off			11
7.12 Currency Indemnity			11

      THIS GUARANTEE (“ Guarantee ”), dated the ___ day of July, 2006, is made as a deed by:

(1) CAYMAN WATER COMPANY LIMITED, a company organized and existing under the laws of the Cayman Islands (“ Guarantor ”);

in favour of

(2) DEXTRA BANK & TRUST CO. LTD. of Sagicor House, 198 North Church Street, George Town, Grand Cayman, Cayman Islands (the “ Trustee ”).

Defined terms used herein shall have the meanings specified in Section 1.

     WHEREAS:

A.		Consolidated Water Co. Ltd. (the “Borrower”) has entered into a trust deed (the “Trust Deed”) with the Trustee pursuant to which, inter alia, the Borrower agreed to secure the repayment of certain bonds (the “Bonds”) issued by it by granting to the Trustee a debenture and other security.
B.		The Guarantor is a one hundred percent (100%) wholly owned subsidiary of the Borrower. To better secure the repayment of the Bonds by the Borrower the Trustee requires that the Guarantor execute this Guarantee and to grant certain other security to the Trustee.
C.		The Guarantor will obtain benefits as a result of the above mentioned Bond issue and, accordingly, desires to execute and deliver this Guarantee.
		NOW, THEREFORE, the parties agree as follows:
		SECTION 1. DEFINITIONS AND INTERPRETATION.
		1.1 General Definitions.

          (a) Unless the context otherwise requires, capitalized terms used in this Guarantee without definition have the meanings specified in the Trust Deed.

          (b) In addition, wherever used in this Guarantee, unless the context otherwise requires, the following terms have the meaning opposite it:

     “ Financing Documents” collectively, the Trust Deed and any security documents issued pursuant or collateral thereto;

     “ Guaranteed Obligations ” all liabilities and obligations of the Borrower to the Trustee under or in respect of the Financing Documents, and in any capacity, irrespective of whether such liabilities and obligations:

	(i)		are present or future;
	(ii)		are actual, contingent or otherwise;

	(iii)		are at any time ascertained or unascertained;
	(v)		are owed or incurred as principal, interest, fees, charges, taxes, duties or other imposts, damages (whether for breach of contract or tort or incurred on any other ground), losses, costs or expenses, or on any other account; or
	(vi)		comprise any combination of the above.

      provided that the Guaranteed Obligations shall be limited to the lesser of: (i) the total amount outstanding under the Financing Documents; and (ii) the maximum amount of indebtedness and liability of the Borrower that the Guarantor is able to guarantee without causing the Guarantor to contravene any applicable legislation restricting the giving of guarantees or which would otherwise render this Guarantee unenforceable.

     SECTION 2. GUARANTEE.

     2.1 Guarantor Guaranteed Obligations.

     The Guarantor irrevocably and absolutely, as principal obligor and not merely as surety, guarantees and promises to pay, upon demand of the Trustee, the Guaranteed Obligations not paid or performed by the Borrower when due in the same manner in all respects as the Guaranteed Obligations are required to be paid or performed by the Borrower.

     2.2 Continuing Guarantee.

     (a) The guarantee and the indemnity of the Guarantor contained in this Guarantee is a continuing obligation of the Guarantor (and all liabilities to which it applies or may apply under the terms of this Guarantee shall be conclusively presumed to have been created in reliance on such guarantee), notwithstanding any settlement of account or the occurrence of any other thing, and shall remain in full force and effect until:

	(i)		the Guaranteed Obligations have been fully paid or performed strictly in accordance with the provisions of the Financing Documents, regardless of any intermediate payment or discharge in whole or in part; and
	(ii)		all of the obligations of the Guarantor under this Guarantee have been fully performed in accordance with this Guarantee.

     (b) The guarantee and the indemnity of the Guarantor contained in this Guarantee shall be additional, separate and independent obligations of the Guarantor.

     (c) The guarantee and the indemnity of the Guarantor contained in this Guarantee shall survive the termination of the Financing Documents.

     (d) The Guarantor’s obligations under this Guarantee can be discharged only by performance and then only to the extent of such performance. Those obligations are not subject to any prior notice to, demand upon or action against the Borrower or any other Person or to any prior notice to the Guarantor of any default by the Borrower.

     2.3 Payment of Guaranteed Obligations.

     The Guarantor shall make payment of the Guaranteed Obligations under Section 2.1 ( Guarantor Guaranteed Obligations ) as provided in the relevant Financing Documents.

     2.4 No Set-off.

     All payments which the Guarantor is required to make under this Guarantee shall be without any set-off, counterclaim or condition.

     2.5 Taxes.

     (a) The Guarantor shall pay or cause to be paid all present and future taxes, duties, fees and other charges of whatsoever nature (excluding income taxes), if any, now or in the future levied or imposed by any Governmental Authority or similar body in the jurisdiction in which the Guarantor is located or out of which a payment is made.

     (b) All payments due under this Guarantee shall be made without deduction for or on account of any such taxes, duties, fees or other charges.

     (c) If the Guarantor is prevented by operation of Cayman Islands law or otherwise from making or causing to be made such payments without deduction, the amounts due under this Guarantee shall be increased to such amount as may be necessary so that the Trustee receives the full amount it would have received (taking into account any such taxes, duties, fees or other charges payable on amounts payable by the Guarantor under this subsection) had such payments been made without such deduction.

     (d) If subsection (c) above applies and the Trustee so requires, the Guarantor shall deliver to the Trustee official tax receipts evidencing payment (or certified copies of them) within thirty (30) days of the date of payment.

     2.6 Application of Payments.

     The Trustee may apply any amounts received by it or recovered under:

     (a) any Financing Document; and

     (b) any other document or agreement which is a security for any of the Guaranteed Obligations and any other moneys,

in such manner as it determines in its absolute discretion in accordance with the Financing Documents.

     SECTION 3. SAVING PROVISIONS.

     3.1 Change in Guaranteed Obligations.

     The obligations of the Guarantor under this Guarantee shall extend to any change in the Guaranteed Obligations:

     (a) as a result of any amendment, supplement, renewal or replacement of any Financing Document or the occurrence of any other thing; and

     (b) regardless of whether the Guarantor is aware of, has consented to or is given notice of any alteration, variation, amendment, supplement, renewal or replacement of any Financing Document or the occurrence of such other thing.

     3.2 Waiver of Defences.

     Except for payment or performance in full of the Guaranteed Obligations, the payment in full by the Guarantor of its obligations under this Guarantee or otherwise as provided in this Guarantee, the Guarantor’s obligations under this Guarantee shall not be discharged, impaired or otherwise adversely affected by any act, omission, circumstance, matter or thing which, but for this provision, would reduce, release or prejudice any of its obligations under this Guarantee or which might otherwise constitute a legal or equitable discharge or defence of a surety or a guarantor, including (whether or not known to the Guarantor or the Borrower):

     (a) any time, waiver, composition, forbearance or concession given to the Borrower or any other person;

     (b) any assertion of, or failure to assert, or delay in asserting, any right, power or remedy against the Borrower or any other person, or in respect of any security for the Loans;

     (c) any amplification, amendment (however fundamental), variation or replacement of the provisions of any Financing Document or of any other agreement or security between the Trustee and the Borrower;

     (d) any failure of the Borrower or the Guarantor to comply with any requirement of any law, regulation or order;

     (e) the dissolution, liquidation, reorganization or other alteration of the legal status or structure of the Borrower or the Guarantor;

     (f) any purported or actual assignment, transfer, novation or disposal of, or granting any participation in, any of the Bonds to any other party;

     (g) any Financing Document being in whole or in part illegal, void, voidable, avoided, invalid, unenforceable or otherwise of limited force and effect; or

     (h) any total or partial failure to realize the value of, or any release, discharge, exchange or substitution of, any security held by the Trustee in respect of the Guaranteed Obligations or any of them.

     3.3 Immediate Recourse.

     The Guarantor waives any right it may have of first requiring the Trustee (or any trustee, agent or other person acting on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Guarantee.

     3.4 Non-Competition.

     (a) If any amounts have become payable or have been paid by the Guarantor under this Guarantee, the Guarantor shall not, in respect of such moneys, seek to enforce repayment, obtain the benefit of any security or exercise any other rights or legal remedies of any kind

which may accrue to the Guarantor against the Borrower, whether by way of subrogation, offset, counterclaim or otherwise, in respect of the amount so payable or so paid (or in respect of any other moneys for the time being due to the Guarantor from the Borrower), if and for so long as any moneys remain outstanding to the Trustee under the Financing Documents. The Guarantor shall hold in trust for, and forthwith pay or transfer to, the Trustee any payment or distribution or benefit of security received by it contrary to this Section 3.4(a).

     (b) Upon the payment and satisfaction in full of all Guaranteed Obligations and provided that no amounts (actual or contingent) remain outstanding to the Trustee under the Loan Agreement, the Guarantor, if it has made a payment under this Guarantee, shall be entitled to exercise its rights of subrogation to its proportion of all relevant rights of the Trustee against the Borrower pursuant to the Financing Documents. The Trustee shall promptly execute, at the expense of the Guarantor, an assignment and such other documents in such form as the Guarantor may reasonably request to transfer such proportion of such rights of the Trustee against the Borrower to the Guarantor as are required for the Guarantor to obtain the full benefit of such subrogation. The Guarantor shall enforce such rights directly against the Borrower in its own name and not in the name of the Trustee.

     3.5 Bankruptcy or Liquidation of the Borrower.

     If the Borrower becomes bankrupt, enters into a composition or makes any arrangement with its creditors, or is dissolved, liquidated or wound up, the Guarantor shall not claim, rank, prove or vote as a creditor of the Borrower or its estate in competition with the Trustee in respect of any amounts owing to the Guarantor by the Borrower on any account whatsoever, but instead shall give the Trustee the benefit of any such proof and of all amounts to be received in respect of that proof until all Guaranteed Obligations have been fully paid.

     3.6 Appropriation of Moneys(a).

     Until all of the Guaranteed Obligations have been irrevocably paid in full, the Trustee (or any trustee, agent or other person acting on its behalf) may refrain from enforcing any other security or rights held or received by the Trustee (or such trustee, agent or other person) in respect of the Guaranteed Obligations, or apply and enforce the same in such manner and order as it sees fit.

     3.7 Reinstatement.

     (a) Where any discharge (whether in respect of the obligations of the Borrower, the Guarantor or any security for those obligations or otherwise) is made in whole or in part or any arrangement is made on the faith of any payment, security or other disposition which is avoided or must be restored on insolvency, liquidation or otherwise without limitation, the liability of the Guarantor under this Guarantee shall continue or shall be reinstated (as the case may be) as if such discharge or arrangement had not occurred.

     (b) The Trustee (or any trustee, agent or other person acting on its behalf) may concede or compromise any claim that any payment, security or other disposition is liable to avoidance or restoration.

     3.8 Additional Security.

     This Guarantee is in addition to and is not in any way prejudiced by any collateral or other security now or hereafter held by the Trustee, nor shall such collateral or other security held by the Trustee or the liability of any person for all or any part of the Guaranteed Obligations be in any manner prejudiced or affected by this Guarantee.

     SECTION 4. INDEMNITY.

     4.1 Indemnity.

     The Guarantor agrees as a primary obligor and not merely as a surety, to indemnify and hold harmless the Trustee from and against any loss, cost or damage incurred by the Trustee as a result of any obligation of the Guarantor hereunder as guarantor being or becoming void, voidable, unenforceable or otherwise ineffective against the Guarantor for any reason whatsoever (whether or not known to the Trustee or any other Person), the amount of such loss being limited to the amount that the Trustee would have been entitled to recover from the Guarantor as guarantor pursuant to this Guarantee had such obligations not become void, voidable, unenforceable or otherwise ineffective against the Guarantor.

     SECTION 5. REPRESENTATIONS AND WARRANTIES.

     5.1 Representations and Warranties.

     The Guarantor represents and warrants to the Trustee that as of the date of this Guarantee:

     (a) it is a company duly incorporated under the laws of the jurisdiction of its incorporation and has the corporate power to enter into and deliver and to perform its obligations under this Guarantee;

     (b) the execution and delivery by it of this Guarantee and the performance by it of its obligations hereunder have been duly authorized;

     (c) this Guarantee constitutes its valid and legally binding obligations;

     (d) neither the execution and delivery by it of this Guarantee nor the performance by it of its obligations under this Guarantee:

	(i)		conflicts with or will conflict with or result in any breach of any of the terms, conditions or provisions of, or violate or constitute a default or require any consent under, any indenture, mortgage, agreement or other instrument or arrangement to which it is a party or which binds or purports to be binding upon it other than the documents referred to in the InterCreditor Deed (being one of the Financing Documents) as the “bank Security”; or
	(ii)		violates or will violate any judgment, decree or order or any statute, rule or regulation or any of the terms or provisions of its Memorandum and Articles of Association;

     (e) all authorizations required for the execution and delivery of this Guarantee by it and the performance by it of its obligations hereunder have been duly obtained or granted and are in full force and effect;

     (f) it has not requested or taken any security from the Borrower for any obligation (whether present or future, actual or contingent) of the Borrower to it; and

     (g) the representations and warranties set out in this Section 5.1 ( Representations and Warranties ) will survive the execution of each Financing Document and each Disbursement under the Financing Documents.

     5.2 Trustee’s Reliance.

     The Guarantor acknowledges that it makes the representations in Section 5.1 ( Representations and Warranties ) with the intention of inducing the Trustee to enter into this Guarantee and the Financing Documents and that the Trustee enters into this Guarantee and the Financing Documents on the basis of, and in full reliance on, each of such representations.

     5.3 Rights and Remedies not Limited.

     The Trustee’s rights and remedies in relation to any misrepresentation or breach of warranty on the part of the Guarantor are not prejudiced:

     (a) by any investigation by or on behalf of the Trustee into the affairs of the Guarantor;

     (b) by the execution or the performance of this Guarantee; or

     (c) by any other act or thing which may be done by or on behalf of the Trustee in connection with this Guarantee and which might, apart from this Section, prejudice such rights or remedies.

     SECTION 6. COVENANTS.

     6.1 Guarantor Covenants.

          The Guarantor shall:

     (a) when requested by the Trustee, do or cause to be done anything which aids the exercise of any power, right or remedy of the Trustee under this Guarantee including, but not limited to, the execution of any document or agreement;

     (b) obtain, maintain and renew when necessary all authorizations required under any law or document or agreement:

	(i)		to enable it to perform its obligations under this Guarantee; or
	(ii)		for the validity or enforceability of the guarantee;

     (c) not take any action which may impair the ability of the Borrower to observe and perform all of its covenants, agreements and obligations under or pursuant to the Financing Documents;

     (d) take such action as may be necessary or as the Trustee may reasonably request in order to:

	(i)		comply with its obligations under this Guarantee; and
	(ii)		cause the Borrower to the extent possible to take such corporate action as may be necessary to comply with its respective obligations under the Financing Documents;

     (e) the Guarantor shall not take any action which would cause any of the representations made in Section 5.1 ( Representations and Warranties ) to be untrue at any time during the continuation of this Guarantee.

     SECTION 7. MISCELLANEOUS.

     7.1 Notices.

     (a) All notices, requests, approvals, consents and other communications provided for hereunder shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission, provided that any matter transmitted by the Guarantor by facsimile (i) shall be promptly confirmed by a telephone call to the recipient at the number specified on the applicable signature page hereof, and (ii) shall be followed promptly by a hard copy original thereof by express courier) and faxed or delivered, to the address or facsimile number specified for notices on the applicable signature page hereof or to such other address as shall be designated by such party in a written notice to the other parties hereto.

     (b) All such notices, requests, approvals, consents and communications (i) sent by express courier will be effective upon delivery to or refusal to accept delivery by the addressee, and (ii) transmitted by facsimile will be effective when sent and facsimile confirmation received.

     (c) Both parties acknowledge and agree that any agreement of the Trustee to receive certain notices by telephone and facsimile is solely for the convenience and at the request of the other. The receiving party shall be entitled to rely on the authority of any Person purporting to be a Person authorized by the sending party to give such notice and the receiving party shall not have any liability to the sending party or other Person on account of any action taken or not taken by the receiving party in reliance upon such telephonic or facsimile notice.

     (d) All notices, requests and other communications hereunder and under the other Financing Documents shall be in the English language.

     7.2 English Language.

     This Guarantee and all other Financing Documents shall be in the English language. Except as otherwise agreed by the parties hereto, all documents, certificates, reports or notices to be delivered or communications to be given or made by any party hereto pursuant to the terms of this Guarantee or any other Financing Document shall be in the English language.

     7.3 No Waiver; Remedies Cumulative.

     No failure or delay on the part of the Trustee in exercising any right, power or privilege hereunder or under any other Financing Document and no course of dealing between the

Guarantor and the Trustee shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Financing Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. No notice to or demand on the Guarantor in any case shall entitle the Guarantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Trustee to take any other or further action in any circumstances without notice or demand. All remedies, either under this Guarantee or any other Financing Document or pursuant to any applicable Law or otherwise afforded to the Trustee shall be cumulative and not alternative.

     7.4 Governing Law and Jurisdiction.

     THIS GUARANTEE IS GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE CAYMAN ISLANDS.

     7.5 Submission.

     (a) For the exclusive benefit of the Trustee, the Guarantor irrevocably agrees that the courts of the Cayman Islands are to have jurisdiction to settle any claims or disputes arising under, out of or in connection with this Guarantee (including without limitation any claim or dispute relating to the validity, interpretation, performance, termination or enforcement of this Guarantee) and that accordingly any suit, action or proceedings in that respect (together in this Section 7 referred to as “ Proceedings ”) may be brought in such courts.

     (b) The Guarantor irrevocably waives and agrees not to raise any objection which it may have now or hereafter to the laying of the venue of any Proceedings in the courts of the Cayman Islands and any claim that any such Proceedings have been brought in an inconvenient or inappropriate forum.

     (c) The Guarantor irrevocably agrees not to take Proceedings in any court of competent jurisdiction other than the courts of the Cayman Islands, save with respect to any counterclaim asserted by the Guarantor in the course of proceedings previously commenced by the Trustee. Nothing contained in this Section 7 shall limit the right of the Trustee to take Proceedings against the Guarantor in any other court of competent jurisdiction, nor shall the taking of Proceedings in one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction, whether concurrently or not.

     7.6 Judgments and Immunity.

     (a) The Guarantor recognizes and acknowledges that this Guarantee constitutes a commercial transaction and accordingly it acknowledges and agrees that it is not entitled to plead, and hereby waives to the fullest extent permitted by law any right to claim, sovereign immunity for any purpose whatsoever, including, but not limited to, any right to plead sovereign immunity in respect of any Proceedings pursuant to this Guarantee.

     (b) The Guarantor consents generally, in respect of any Proceedings pursuant to this Guarantee for the purpose of enforcing any order, judgment or award, to the giving of any relief or the issuing of any process in connection with such order, judgment or award including, without limitation, the making, enforcement or execution against any property of any order, judgment or award and to the extent that the Guarantor may be entitled in any jurisdiction to claim for itself or its property immunity in respect of its obligations under this

Guarantee from any suit, execution, attachment (whether in aid of execution, before judgment or otherwise) or legal process or to the extent that in any jurisdiction there may be attributed to itself or its property such immunity, the Guarantor agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction.

     7.7 Benefit of Guarantee.

     This Guarantee shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto. The Guarantor may not assign or otherwise transfer any of its rights under this Guarantee or any of the other Financing Documents. The benefit of this Guarantee may be freely and unconditionally assigned, transferred or otherwise disposed of, in whole or in part, by the Trustee to any other person, corporate or otherwise, to whom the Trustee has assigned all or part of its rights under the Loan Agreement.

     7.8 Expenses.

     The Guarantor shall be liable to pay to the Trustee the costs and expenses incurred by the Trustee in relation to the enforcement or protection or attempted enforcement or protection of its rights under this Guarantee, including legal and other professional consultants’ fees on a full indemnity basis.

     Amendment or Waiver.

     No provision of this Guarantee may be amended, supplemented, modified or waived, except by a written instrument signed by the Trustee and the Guarantor.

     7.9 Counterparts.

     This Guarantee may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument.

     7.10 Set-off.

     The Guarantor authorizes the Trustee or any of its subsidiaries and affiliates (which shall not be obliged to exercise this right) to apply any credit balance to which the Guarantor is entitled on any account of the Guarantor with the Trustee or any of its subsidiaries and affiliates in satisfaction of any sum which is due and payable from the Guarantor to the Trustee under this Guarantee and remains unpaid; for this purpose, the Trustee is authorized to purchase with the monies standing to the credit of any such account such other currencies as may be necessary to effect such application.

     7.11 Currency Indemnity.

     If any sum due under this Guarantee or any order or judgment given or made in relation to this Guarantee has to be converted from the currency (the “ first currency ”) in which the same is payable under this Guarantee or under such order or judgment into another currency (the “ second currency ”) for the purpose of (a) making or filing a claim or proof against the Guarantor, (b) obtaining an order or judgment in any court or other tribunal or (c) enforcing any order or judgment given or made in relation to this Guarantee, the Guarantor shall indemnify and hold harmless the Trustee from and against any loss it suffers or incurs as a

EXHIBIT 10.5

DEED OF SECOND DEBENTURE

 

BETWEEN:

CONSOLIDATED WATER CO. LTD.

 

and

 

DEXTRA BANK & TRUST CO. LTD.

 

 

Dated: August 4, 2006

 

 

 

Charles Adams Ritchie & Duckworth
PO Box 709GT, Zephyr House, Mary Street
Grand Cayman, Cayman Islands
British West Indies
Tel: 345 949 4544
Fax: 345 949 8460
Email: card@card.com.ky

INDEX

Clauses

1.		DEFINITIONS AND INTERPRETATION
2.		MONIES SECURED

	(1)		Monies
	(2)		Costs
	(3)		Interest

3.		THE CHARGES
3.1		Charging provision

			Immovable Property
			Specifically Charged Plant
			Trading Debts
			Non-Trading Debts
			Specifically Charged Securities
			Goodwill and uncalled capital
			Intellectual Property
			Ancillary assets
			Trustee Accounts
			Other assets

3.2		Crystallisation of floating charge
3.3		Negative pledge
3.4		Land Charges

(ii)

 

4.		REPRESENTATIONS & WARRANTIES
5.		COVENANTS

	(1)		Documents of title to Immoveable Property and Specifically Charged Plant and Securities
	(2)		Further charges
	(3)		Future Immoveable Property and Specifically Charged Plant and Securities
	(4)		Maintenance
	(5)		Insurance
	(6)		Registration under The Registered Land Law
	(7)		Notices affecting Immoveable Property or Specifically Charged Plant
	(8)		Planning Legislation
	(9)		Other compliance with law
	(10)		Compliance with contracts
	(11)		Leases or licences of Immoveable Property and Intellectual Property: As Lessee or Licensee
	(12)		Leases of licences of Immoveable Property and Intellectual Property; as lessor or licensor
	(13)		Removal and severance
	(14)		Specifically Charged Plant
	(15)		Debts and Trustee Accounts

(iii)

 

	(16)		Specifically Charged Securities
	(17)		Uncalled capital
	(18)		Secured loan capital
	(19)		Intellectual Property
	(20)		Information, inspection and remedy
	(21)		Disposal of Specifically Charged Assets and other Charged Assets
	(22)		Conduct of business
	(23)		Insolvency

6.		EVENTS OF DEFAULT
7.		APPOINTMENT OF RECEIVER AND POWER OF SALE

	(1)		Time
	(2)		Power of Sale and Enforcement
	(3)		Removal of Receiver
	(4)		Receiver’s Powers
	(5)		Immoveable Property

8.

RESPONSIBILITY FOR RECEIVER

	(1)		Liability of Trustee
	(2)		Remuneration

9.

ADDITIONAL POWERS OF THE TRUSTEE

	(1)		As Mortgagee
	(2)		As Receiver
	(3)		Delegation of Powers of the Trustee

(iv)

 

10.		APPROPRIATION
11.		LIABILITY OF THE TRUSTEE AND RECEIVER

	(1)		General
	(2)		Exclusion of the Trustee’s Liability
	(3)		Exclusion of Receiver’s liability
	(4)		Indemnity

12.

POWER OF ATTORNEY

	(1)		Appointment
	(2)		Ratification

13.		FURTHER ASSURANCE
14.		PROTECTION FOR THIRD PARTY PURCHASERS
15.		CONTINUING SECURITY AND AVOIDANCE OF PAYMENTS
16.		ADDITIONAL SECURITY, SUSPENSE ACCOUNT AND
		CONSOLIDATION
17.		NEW ACCOUNT
18.		SET-OFF
19.		AMALGAMATION OF TRUSTEE
20.		NOTICES
21.		RIGHTS AND REMEDIES
22.		SEVERANCE
23.		GOVERNING LAW
24.		JURISDICTION
25.		FURTHER ADVANCES
26.		STAMPING

(v)

 

THIS DEED OF SECOND DEBENTURE made on the 4th day of August, 2006

BETWEEN:-

(1)		CONSOLIDATED WATER CO. LTD. incorporated under the laws of the Cayman Islands of P.O. Box 1114 GT, Grand Cayman (the “Company”, which expression shall include its successors and assigns); and
(2)		DEXTRA BANK & TRUST CO. LTD. (the “Trustee”), which expression shall include its successors, transferees and assigns);

WHEREAS

A.		The Company and Scotiabank & Trust (Cayman) Ltd. (the “Bank”) entered into a Deed of Substituted Debenture dated February 7, 2003 whereby the Company granted to the Bank a fixed and floating charge over all of the assets of the Company (the “First Debenture”).
B.		Pursuant to the Trust Deed the Company has issued bonds and received consideration therefor from the Trustee on behalf of the Bondholders.
C.		The Company is indebted to the Trustee as trustee for the Bondholders in the sum of US$15,771,997.16 (the “Indebtedness”).
D.		To further secure the Indebtedness and all other obligations of the Company under the Trust Deed the Company hereby grants to the Trustee this Second Debenture which, by agreement between the Trustee and the Bank, shall rank in all respects pari passu with the First Debenture.

WITNESSES as follows:-

1.		DEFINITIONS AND INTERPRETATION
1.1		In this Deed of Second Debenture, unless the contrary shall be expressed or the context shall otherwise require:-
(1)		the following words and expressions shall have the following meanings, that is to say:-

“Account Bank” means any bank or financial institution for the time being and from time to time approved by the Trustee in writing as a bank or other financial institution with whom the Company may have an account or accounts into which the Company may pay its Trading Debts. Such approval may be given as well before as on or after the date hereof, provided that it shall expressly refer to this Debenture.

“Agreement” means the Trust Deed and all other (if any) agreements (other than these

presents) for the time being and from time to time in force between the Trustee and the Company (and whether entered into before or after this Debenture) regulating any business relationship between the Company and the Trustee.

“assets” means assets of every kind, including, but without limitation, the benefit of any agreement, a building or other fixture, a business, goods, goodwill, immovable property, money plan or other equipment, stock-in-trade, the uncalled capital of a body corporate, an undertaking and work-in-progress and any interest therein and, as the contest shall require or admit, any part of such assets.

“Bank Accounts” means all the Charged Assets in Clauses 3.1(3)(p) and (q) and “Bank Account” shall be construed accordingly.

“Charged Assets” means all the assets of the Company for the time being and from time to time the subject of or expressed to the subject of any interest by way of security created by the Company in favour of the Trustee under or pursuant to these presents or a Land Charge and, as the context shall require or admit, any part of such assets. A reference to Charged Assets in a particular Sub-clause or Sub-clauses or Clause 3.1 is a reference to the assets becoming or being express to become the subject of such an interest by way of security as a result of a reference to them being made in that Sub-clause or those Sub-clauses, respectively.

“Delegate” means a delegate or sub delegate of the Trustee described in Clause 9(3).

“this Debenture” means this Deed of Second Debenture.

“finance lease” shall have the meaning given in the Statement of Standard Accounting Practice number 21 issued by the Institute of Chartered Accountants in England and Whales.

“Guarantor” means any person who shall for the time being and from time to time guarantee to the Trustee the payment of discharge of the Indebtedness, and referenced to the “relevant Guarantee ” shall be construed accordingly.

“immovable property” means all the Charged Assets in Clauses 3.1(1) and 3.1(2) and, as the context shall require or admit, any part of such Charged Assets.

Indebtedness” means all monies, liabilities and other sums of whatsoever nature covenanted to be paid and discharged by the Company to the Trustee under Clause 2 and, as the context shall require or admit, any part of such monies, liabilities and other sums.

“Intellectual Property” means all the Charged Assets in Clauses 3.1(3), (j) and (k) and, as the context shall require or admit, any part of such Charged Assets.

“interest by way of security” means any mortgage, pledge, lien, charge, assignment by way of security, hypothecation, title retention, finance lease, factoring or discounting of

debts or any other agreement or arrangement for or by way of security, including such as arises or is imposed by operation or implication of applicable law and including any account with bankers earmarked or designated for the use of making preferential payments pursuant to Section 162 of the Companies Law (2004 Revision) or any other provision of applicable law having similar or substantially similar effect.

“Land Charge” means a collateral land charge of Immoveable Property, if any, executed by the Company in favour of the Trustee pursuant to Clause 3.4 and “ Land Charges” shall be construed accordingly.

“Non-Realty Charged Assets” means the Charged Assets excluding Immoveable Property.

“Non-Trading Debts” means all the Charged Assets in Clause 3.1(3)(d) and, as the context shall require or admit, any part of such Charged Assets.

“person” means an individual, a firm, a partnership (whether or not having separate legal personality), an unincorporated body, a body corporate, a corporation and a national or local government or governmental agency or body, and, in each case, wheresoever resident, incorporated or formed.

“Planning Legislation” means all applicable statutes for the time being and from time to time in force in relation to the use of development of immoveable property and all regulations then made or taking effect as if made thereunder.

“Prohibited Security Interest” means any interest by way of security other than:

(a)		such security granted by the Company as is in existence as of the date hereof in favour of the Bank;
(b)		such as arises or is imposed by operation or implication of law and is not intended to arise for that purpose;
(c)		any agreement or arrangement for the retention of title to goods which is not entered into for the purpose of raising finance;
(d)		such as arises as a result of normal banking arrangements of the company with an Account Bank in respect of the collection of cheques (including cheques expressed in a foreign currency) in respect of the collection of Trading Debts; and
(e)		the security hereby constituted.

“receiver ” includes any receiver or receiver and manager .

“Receiver” means any individual or individuals (who maybe an employee or employees of

the Trustee) for the time being and from time to time appointed by the Trustee to be a receiver or receivers (and, where more than one individual is appointed jointly, they shall have the power to act severally, unless the Trustee shall specify to the contrary in their appointment) under these presents and, where the context shall admit, any individual or individuals for the time being and from time to time so appointed in substitution.

“security hereby constituted” means the interests by way of security for the time being and from time to time constituted by or in pursuance of these presents and includes interests by way of collateral security and, as the context shall require or admit, any such interests, but does not include Land Charges.

“Specifically Charged Plant” means all the Charged Assets in Clauses 3.1(3)(a) and (b) and, as the context shall require or admit, any part of such Charged Assets.

“Specifically Charged Securities” means all the Charged Assets in Clauses 3.1(3)(e), (f) and (g) and, as the context shall require or admit, any part of such Charged Assets.

“these presents” means this Debenture and any deed for the time being and from time to time expressed to be supplemental hereto and any other deed or documents for the time being from time to time conferring rights upon the Trustee or to which it may be a party executed or entered into pursuant to this Debenture or any deed for the time being and from time to time supplemental thereto, but does not include Land Charges.

“Trading Debts” means all the Charged Assets in Clause 3.1(3)(c) and , as the context shall require or admit, any part of such Charged Assets.

“Trust Deed” means the trust deed entered into between CWCO and Dextra Bank & Trust Co. Ltd. of even date herewith setting out the terms and conditions of the bond issue thereunder as the same may for the time being and from time to time be modified amended or supplemented.

(2)		words and expressions (including defined words and expressions) importing the singular number include the plural and vice versa and those importing the masculine gender include and feminine.
(3)		any reference to:-

	(a)		any law or legal provisions is to that law or provision as for the time being and from time to time amended, extended or substantially replaced or re-enacted, and shall include a reference to any regulations made under the law or provision.
	(b)		fees, costs, charges and expenses shall be include a reference to any transactional tax or duty for the time being and from time to time applicable to or chargeable in respect of those fees, costs, charges and expenses.
	(c)		a Clause or Schedule is a clause in, or a schedule to, this Debenture.

(d)

a Sub-clause is to a sub-clause in the clause or sub-clause in this Debenture in which that reference is made.

1.2		Underlinings, headings and descriptions of provisions of this Debenture are inserted for convenience only and shall be ignored in construing or interpreting this Debenture.
1.3		Reference to a “Law” shall include a reference to such Law and/or any provision thereof as from time to time re-enacted, amended, extended or replaced.
2.		MONIES SECURED

The Company will, on demand, pay and discharge to the Trustee subject in all cases to the terms of the Agreement -

(1)		Monies : all monies and other liabilities, whether principal, interest, commission, charges, costs, expenses or otherwise, which now are, or at any time hereafter may become, due to the Trustee by CWCO pursuant to the Agreement either alone or jointly with any other person whether actual or contingent and whether as principal debtor, guarantor, surety or otherwise;
(2)		Costs: on a full and unlimited indemnity basis, all costs, stamp duties, recording fees, commission, charges, expenses and other sums for the time being and from time to time incurred by the Trustee or by or through any Receiver or by or through any attorney, delegate, sub-delegate, substitute, agent or employee of the Trustee or a Receiver, for any purposes described in these presents or a Land Charge or in about the exercise of any power, authority or discretion conferred on the Trustee or any Receiver by or pursuant to these presents or a Land Charge or by law or in relation to the security hereby constituted or a Land Charge or in or about the protection, realisation, enforcement, collection or recovery of monies for the time being and from time to time arising under the security hereby constituted or a Land Charge and all remuneration of any Receiver and any attorney, delegate, sub-delegate, substitute or agent of the Trustee or a Receiver; and
(3)		Interest: Interest, as well before as after judgment, on each amount due under Sub-clauses (1) and (2) until the same shall have been fully discharged at such rate as shall for the time being and from time to time be prescribed by the Agreement for that amount and, in the case of each such amount due under sub-clause (2), such interest to accrue on a daily basis as from the date on which that amount was incurred (and whether or not that date shall have occurred prior to a demand for that amount under this Clause (2).

3.		THE CHARGES
3.1		Charging Provision

The Company, as beneficial owner and as continuing security for the Indebtedness, hereby charges to the Trustee:-

		Immoveable Property
(1)		by way of first specific equitable charge:-

	(a)		all (if any) of the immovable property described in Schedule 1;
	(b)		all other immoveable property belonging to the Company at the date hereof; and
	(c)		all fixtures (including trade fixtures) and fixed plant and machinery for the time being and from time to time on or in any of the Immoveable Property in Sub-clause (a) and (b);

(2)

By way of first specific equitable charge:-

	(a)		all immoveable property (other than that (if any) described in Schedule 1) now or at any time hereafter belonging to the Company or in which the Company does now or shall at anytime hereafter have any interest by way of security; and
	(b)		all fixtures (including trade fixtures) and fixed plant and machinery for the time being and from time to time on or in any of the Immoveable Property in Sub-clause (a);

(3)

by way of first specific charge:-

Specifically Charged Plant

	(a)		all (if any) the plant, machinery, chattels and other equipment described in Schedule 2 and any part or parts thereof or thereto;
	(b)		all additions, alterations, accessories, replacements and renewals for the time being and from time to time to or of any of the Charged Assets in Sub-clause (a);

Specifically Charged Securities

(e)

all the stocks, shares, bonds, debentures, loan stocks, notes, warrants and other securities now or hereafter belonging to the Company in the capital of, or issued by, Cayman Water Company Limited;

	(f)		all stocks, shares, bonds, debentures, loan stocks, notes, warrants and other securities now or hereafter belonging to the Company (other than in any of its subsidiaries),
	(g)		all stocks, shares, bonds, debentures, loan stocks, notes, warrants and other securities and other assets now or hereafter accruing or offered by way of rights, bonus, option or otherwise in respect of any of the Charged Assets in Sub-clauses (e) and (f) or in this Sub-clause (g) but so that nothing in these presents shall be construed as imposing on the Trustee any liability whatsoever in respect of any calls, instalments or other payments or contributions in respect of or relating to any of the Charged Assets in Sub-clauses (e) and (f) or in this Sub-clause (g);
	(h)		all dividends, interest and other distributions for the time being and from time to time declared, payable paid or made in respect of any of the Charged Assets in Sub-clauses (e), (f) or (g), including any of the same for the time being and from time to time placed to the credit of an account of the Company with, and owed to the Company by a bank or other financial institution and/or being cash at bank belonging to the Company;

Goodwill and uncalled capital

(i)

all the goodwill and uncalled capital of the Company, both present and future;

Intellectual Property

	(j)		all the knowhow (and rights therein) and other confidential information (and rights therein) and all the copyrights, patents (including, applications, improvements, prolongations, extensions and rights to apply therefor), registered designs, trade marks (and rights therein), service marks (and rights therein) and other intellectual property of the property of the Company, acquired or developed up to the date of the bond execution;
	(k)		the benefit of all licences for the time being and from time to time granted to or acquired by the Company in respect of assets of the kind described in Sub-clause (j);

Ancillary assets

	(l)		the benefit of all agreements for the time being and from time to time entered into by the Company for the maintenance and/or improvement of any of the Charged Assets in any of the foregoing Sub-clauses in this Clause 3.1;
	(m)		the benefit of all obligations and representations and warranties for the time

			being and from time to time undertaken or given to the Company (and whether by law, contract or otherwise howsoever) by any person in relation to any of the Charged Assets in any of the foregoing Sub-clauses of this Clause 3.1;
	(n)		the benefit for the time being and from time to time of any insurance for the time being and from time to time effected by the Company in respect of, and the benefit and proceeds for the time being and from time to time of any guarantees or interests by way of security for the time being and from time to time given, granted or arising in favour of the Company in relation to any of the Charged Assets in any of the foregoing Sub-clauses of this clause 3.1;
	(o)		the proceeds including cash at bank for the time being and from time to time received by the Company of a payment in respect of, or a disposal, collection or other realisation of, any of the Charged Assets in any of the foregoing Sub-clauses of this Clause 3.1;

Other assets

(4)

by way of the first floating charge:-

	(a)		the undertaking and all the other assets of the Company (other than the assets described in Clause 3.1(1) to 3.1(3) hereof (the “Specifically Charged Assets”) and any Intellectual Property or interest in it acquired by the Company after the date of bond execution), both present and future; and
	(b)		all the Specifically Charged Assets if and to the extent that any of the interests by way of security constituted by these presents over the Specifically Charged Assets shall be or become ineffective as specific charges.

Trading Debts

(c)

all debts, other than Non-Trading Debts, now or hereafter due or owing or to become due or owing to the Company on any account whatsoever and whether actual or contingent and including cash at the bank, as have arisen or shall arise in the ordinary and usual course of trading of the Company and whether or not the same would or shall be entered into the books of the Company;

Non-Trading Debts

(d)

all debts now or hereafter due or owing or to become due or owing to the Company on any account whatsoever and whether actual or contingent as have arisen or shall arise (and whether or not entered into the books of the Company):-

	(i)		as an amount for the time being and from time to time payable (including, but without limitation, any consideration, premium, rent, royalty or fee) in respect of any sale, lease, licence or other disposal by the Company of any of the Immoveable Property, the Specifically Charged Plant , the Specifically Charged Securities, the goodwill of the Company both present and future and the Intellectual Property;
	(ii)		as a dividend, interest or other distribution for the time being and from time to time declared and/or payable in relation to the Specifically Charged Securities;
	(iii)		as an amount for the time being and from time to time payable in respect of any obligation or representation or a warranty described in Sub-clause (m) or insurance or guarantee or interest by way of security described in Sub-clause (n); or
	(iv)		as an amount for the time being and from time to time payable in respect of any other transaction or matter outside the ordinary and usual course of trading of the Company;

Bank Accounts

	(e)		the full benefit for the time being and from time to time of, and the Company’s rights, title and interest in and to, all (if any) the bank accounts described in schedule 4, and the debts constituted and represented by the credit balances for the time being and from time to time on such accounts, together with all interest for the time being and from time to time accrued thereon;
	(f)		the full benefit for the time being and from time to time of, and all the Company’s rights, title and interest in and to, all other bank accounts of the Company at the date hereof, and the debts constituted and represented by the credit balances for the time being and from time to time on such accounts, together with all interest for the time being and from time to time accrued thereon.

3.2

Crystallisation of floating charge

The floating charge created by Clause 3.1(4) shall become a specific charge:-

(1)

as regards any assets subject thereto as may from time to time be specified in a notice from the Trustee to the Company if the Trustee shall, in its absolute discretion, consider that those assets shall be in danger of being seized or sold under any form of distress or execution

			levied or threatened or to be otherwise in jeopardy, forthwith upon the service of such notice;
	(2)		as regards any assets subject thereto which shall become subject to specific charges in favour of any person other than the Trustee or subject to disposition or an agreement to make a disposition contrary to Clause 5(21) (Disposal of Specifically Charged Assets), forthwith upon such charge or disposition; and
	(3)		in accordance with Clause 6 (Events of Default).

3.3

Negative pledge

Save with the prior written consent of the Trustee (which may be given as well before as after the date hereof, provided it shall expressly refer to this Debenture), the Company shall not and shall not agree to create, give, grant or permit to arise or subsist over any of its assets present and future any Prohibited Security Interest ranking in point or security in priority to, pari passu with or subsequent to any security constituted by these presents or any Land Charge.

3.4

Land Charges

Without prejudice to Clause 5(2) (Further Charges), the Company shall forthwith execute in favour of the Trustee collateral land charges in such form and on such terms as the Trustee shall require of all the immoveable property described in Schedule 1, if any, and of any other Immoveable Property as the Trustee may for the time being and from time to time require.

4.

REPRESENTATIONS

The Company hereby represents and warrants to the Trustee as follows:-

(1)		The Company has the power to enter into and perform its obligations as expressed in this Debenture and each Land Charge and has taken all necessary action to authorize the granting of interests by way of security upon the terms and conditions of this Debenture and each Land Charge and to authorize the execution, delivery and performance of its obligations as expressed in this Debenture and each Land Charge in accordance with their respective terms.
(2)		The execution, delivery and performance by the Company of the terms of this Debenture and each Land Charge does and will not violate, conflict with or result in a breach of, in any respect:-

(a)

any provisions of any law or regulation or any order, decree, permit or licence of any authority, agency or court binding on the Company or on any of its assets;

			or
	(b)		the constitutional documents or resolution of the Company or
	(c)		any subsisting loan stock or debenture or other deed, contract or other undertaking or instrument to which the Company is a party or which is binding upon it or any of its assets.

(3)		The Company is the sole and absolute beneficial owner of all the Charged Assets free from all Prohibited Security Interests other than those permitted or consented to by the Trustee in accordance with Clause 3.3 (Negative pledge).
(4)		The Company has not created, given, granted or permitted to arise or subsist any Prohibited Security Interest over any of its assets present and future other than those permitted or consented to by the Trustee in accordance with Clause 3.3. and has not agreed so to do.
(5)		In connection with any consent given by the Trustee in accordance with Clause 3.3 on or prior to the date hereof, the Company did furnish to the Trustee true, complete and up to date written details of the existing interest(s) by way of security to which such consent relates.
(6)		The details of (if any) the immoveable property and the other assets in Schedules 1,2,3 and 4, the interests of the Company (in that immovable property) in Schedule 1, and the location of the Specifically Charged Plant in Schedule 2, and the details of the bank accounts in Schedule 4 are true and correct in every material particular.

5.

COVENANTS

The Company hereby covenants and agrees with the Trustee, until the discharge and release of this Debenture, as follows:-

(1)

Documents of title to Immoveable Property and Specifically Charged Plant Securities

Subject to the rights of any prior mortgagee, the Company shall deposit with the Trustee
and the Trustee shall be entitled to hold and retain all deeds and documents of title for the time being and from time to time relating to the Immovable Property, all invoices and documents of title for the time being and from time to time relating to the Specifically Charged Plant, and all certificates, deed and documents of title for the time being and from time to time relating to the Specifically Charged Securities.

(2)

Further Charges

The Company shall forthwith from time to time, if and when called upon by the Trustee so to do, execute in favour of the Trustee or as the Trustee shall direct such further interests by

way of security (including, but without limitation, assignments by way of security and collateral security) as the Trustee shall require (but with covenants no more onerous than already contained in the security hereby constituted) over the Charged Assets as further and continuing security for the Indebtedness, such further interest by way of security to be prepared by or on behalf of the Trustee at the cost of the Company and, in the event of any consent thereto being required from any other person, the Company shall use its best endeavours to obtain the same.

(3)

Future Immoveable Property, Specifically Charged Plant and Securities

The Company shall notify the Trustee forthwith upon any proposal or contract for the time being and from time to time being made by the Company to acquire any immoveable property or other assets which, following their acquisition would become Immoveable Property, Specifically Charged Plant or Specifically Charged Securities (as the case may be) and, in the case of any such immoveable property the Company shall notify the Trustee of the title number(s) thereof and shall apply to The Registrar of Lands for the registration of the Company as the registered proprietor thereof.

(4)

Maintenance

The Company shall:-

(a)		keep all buildings, fixtures (including trade fixtures) and fixed plant and machinery for the time being and from time to time on or in any of the Immoveable Property and all plant, machinery, other fixtures and fittings, implements, tools and other effects thereon and therein in a good state of repair and good working order and condition and shall, as necessary, renew and replace the same to a similar quality, as and when the same shall be worked out or destroyed; and
(b)		Keep the Specifically Charged Plant in good state of repair and condition and perfect working order and replace any part or parts thereof as may for the time being and from time to time be or become worn out, damaged or destroyed with new parts of similar quality.
(5)		Insurance

The Company shall:-

(a)

insure and keep insured such of its assets as are of an insurable nature against loss or damage by fire, aircraft, things dropping from aircraft, explosion, tropical storm, storm, tempest, flood, burst pips, hurricane, windstorm, riot and impact and such other risks and the Trustee may, for the time being from time to time, consider necessary, to the full reinstatement value thereof, together with additional amounts sufficient to cover architects’ and surveyors’ fees and the costs of demolition, site

		clearance and shoring up or in such other amount as the Trustee may in writing from time to time approve, with such reputable insurers and generally in such manner as the Trustee shall from time to time approve in writing. The Company shall cause notice of the interest of the Trustee to be noted on the policies of such insurance which (subject to the rights of any prior mortgagee) shall, unless otherwise from time to time agreed by the Trustee in writing, be delivered to and retained by the Trustee. The Company shall duly pay the premiums on such insurance and, immediately after every such payment, produce the receipt for the same to the Trustee. All monies which may at any time hereafter be received or receivable under any insurance of the time being and from time to time effected in respect of the Immoveable Property or the Specifically Charged Plant (and whether or not effected pursuant to the foregoing provisions of this Sub-clause (a) shall be applied in replacing, restoring or reinstating the assets destroyed or damaged or (subject to the rights of the prior mortgagee) in such other manner as the Trustee shall require;
(b)		effect and maintain or cause to be effected and maintained such other insurances as are normally for the time being and from time to time maintained by prudent companies carrying on business similar or approximately similar to those for the time being and from time to time carried on by the Company including but not limited to consequential loss and loss of profits; and
(c)		not in any manner or by any means cause any such insurance to be avoided or vitiated.
(6)		Registration under the Registered Land Law

The Company shall not, without the prior written consent of the Trustee, register any person or cause any person to be registered under The Registered Land Law (2004 Revision) and any subsequent Registered Land Laws as the proprietor of the Company’s interest in any of the Immoveable Property or any part thereof.

(7)

Notices affecting Immovable Property or Specifically Charged Plant

The Company shall, in the event of a notice, order, direction, requisition or permission or proposal for any of the foregoing being served, affecting or likely to affect the Immoveable Property or the Specifically Charged Plant or in the event of any proceedings being commenced affecting or likely to affect the same, immediately give full particulars thereof to the Trustee and without delay and at the Company’s own cost take all reasonable or necessary steps to comply with the same and/or, if so requested by the Trustee, at the Company’s own cost make or join with the Trustee in making such objections or representations against or in respect of any of the same as the Trustee shall deem expedient.

(8)

Planning Legislation

The Company shall not carry out any development in or upon the Immoveable Property within the meaning of the Planning Legislation without first obtaining such permission as may be required under or by virtue of Planning Legislation and the Company shall use the Immoveable Property only for such purpose or purposes as may be for the time being and from time to time be authorised as the permitted use or user thereof under or by virtue of the Planning Legislation.

(9)

Other compliance with law

The Company shall, in relation to its business and other assets for the time being and from time to time, comply with all obligations under any present or future statute, regulation, order or instrument or under any bye-law, regulation or requirement of any competent authority and shall not use or permit any of its assets for the time being and from time to time to be used in contravention of any legislation or otherwise or in any way contrary to law and shall as and when the same shall become payable pay all taxes, rates, duties, charges, assessments and other outgoing whatsoever (whether governmental, parochial, local or of any other description)which shall be assessed , charged or imposed upon or payable in respect of its business and other assets for the time being and from time to time.

(10)		Compliance with Contracts
(a)		The Company shall duly and punctually perform and observe all the covenants, agreements and other stipulations whatsoever as are not inconsistent with its obligations under these presents and as shall for the time being and from time to time be binding upon it, its business or other assets for the time being and from time to time and shall not do or suffer to be done any act or thing whereby any lease or licence for the time being and from time to time granted to or held by the Company may become liable to forfeiture or otherwise be determined.
(b)		The Company shall indemnify and hold harmless the Trustee in respect of any breach of any covenants, agreements or stipulations for the time being and from time to time affecting the Immoveable Property.
(11)		Leases or licences of Immoveable Property and Intellectual Property: as lessee or licensee

The Company shall not agree, accept, suffer or permit any alteration, variation or addition to the terms of any lease or licence under which it is for the time being and from time to time a lessee or licensee and which is for the time being and from time to time part of the Immoveable Property or the Intellectual Property, without the prior consent of the Trustee.

(12)		Leases or licenses of Immovable Property and Intellectual Property
(a)		Unless otherwise agreed from time to time in writing by the Trustee, the Company shall enforce the due observance and performance of all the obligations on the part of the lessee or licensee under any lease or licence under which it is for the time

		being and from time to time the lessor or licensor and which is for the time being and from time to time part of the Immoveable Property or the Intellectual Property, shall not waive, release or vary to agree to waive, release or vary any of the terms of any such lease or licence, shall not exercise any power to determine or extend any such lease or licence and shall not grant any consents or licences as lessor or licensor under any such lease or licence.
(b)		The Company shall not, without the prior written consent of the Trustee, grant or agree to grant any lease or licence of, or other right or interest to occupy, the Immoveable Property or the Intellectual Property.
(13)		Removal and severance

     The Company shall not, without the prior consent of the Trustee, pull down or remove or permit to be pulled down or removed any building or erection for the time being and from time to time include in the Immoveable Property or pull down, remove or sever or permit to be pulled down, removed or severed any fixtures (including trade fixtures) and fixed plant and machinery for the time being and from time to time thereon or therein, except in pursuance of any obligation imposed on the Company under these presents or Land Charge.

(14)		Specifically Charged Plant
(a)		Except as may be agreed in writing from time to time by the Trustee, the Company shall keep the Specifically Charged Plant in its sole and exclusive possession and at the location (if any) specified in Schedule 2 and shall not, in any event, take them out of Cayman Islands and shall not use or permit them to be used for any purpose for which they are not designed or reasonably suitable.
(b)		The Company shall affix to or engrave on the Specifically Charged Plant such labels, plates or markings as the Trustee shall from time to time require and shall not allow to be disturbed any labels, plates or markings which maybe affixed to or engraved on the Specifically Charged Plant as a means of identification by the manufactures or suppliers thereof or by any other person and shall not obliterate, obscure or cover up the same.
(c)		The Company shall not at any time without the prior written consent of the Trustee make or suffer to be made any alteration or addition of a substantial nature in or to the Specifically Charged Plant other than for the purpose of effecting repairs as required by Sub-clause (4)(b) (Maintenance).
(d)		The Company shall not, without the prior consent of the Trustee, hire, lease or part with or share possession of or suffer any distress or execution to be levied or lien to be created upon the Specifically Charged Plant.
(e)		If the Company has created, given, granted or permitted to arise or subsist, or shall

		at any time create, give, grant or permit to arise or subsist, an interest by way of security on any premises where the Specifically Charged Plant are located, the Company shall forthwith notify the Trustee of the same and, if called upon to do so by the Trustee, shall forthwith procure from any person for the time being and from time to time being and from time to time enjoying such interest by way of security or being interested in such premises a waiver in such form as the Trustee may from time to time require of all rights to which such person might otherwise be entitled to claim in the Specifically Charged Plant.
(f)		The Company shall not annex the Specifically Charged Plant to the premises where the same are located if the results of such annexure would be that Specifically Charged Plant might become a fixture or fixtures.
(g)		The Company shall indemnify and hold harmless the Trustee against all claims made or all proceedings brought in respect of any loss or damage or injury whatsoever arising out of or in connection with the Specifically Charged Plant, their manufacture, selection, delivery, possession, use or operation.
(15)		Debts and Bank Accounts
(a)		The Company shall, if called upon from time to time by the Trustee pursuant to any provision of these presents, execute a legal assignment if favour of the Trustee and any of the Trading Debts or the Non-Trading Debts and shall, if the Trustee shall for the time being and form time to time require, give notice thereof to the debtors from whom such Trading Debts or Non-Trading Debts are for the time being owing or incurred and take such other steps as the Trustee may from time to time require to perfect such legal assignment.
(b)		The Company shall forthwith join with the Trustee in giving notice of these presents to each bank or other financial institution specified in Schedule 4 at or with which a Bank Account is kept or maintained, and if the bank shall for the time being and from time to time require, the Company shall join with the Trustee in giving notice of these presents to all other banks or other financial institutions at or with which a Trustee Account is kept or maintained.
(16)		Specifically Charged Securities
(a)		The Company shall, if called upon to do so by the Trustee from time to time, execute all such transfers and other documents as may be necessary to enable the Trustee or its nominee or nominees to be registered as the owners of, or otherwise obtain legal title to, any of the Specifically Charged Securities.
(b)		The Company shall, promptly upon receipt of any communications sent to it in its capacity as a holder of any Specifically Charged Security, deliver the original or a copy thereof to the Trustee, and shall consult with the Trustee, prior to the exercise of all voting and other rights and powers attached or relating to the Specifically

		Charged Securities (other than the shares in Cayman Water Company Limited) and, if the Trustee shall not for the time before, during or after such consultation, shall exercise all such rights and powers for all purposes not inconsistent with the terms of these presents.
(c)		In the event that the Trustee shall for time being and from time to time notify the Company in writing to the following effect, the Trustee and any nominee of the Trustee for the time being and from time to time registered as the holder of the Specifically Charged Security shall thereafter have the immediate and sole and exclusive right to exercise all voting and other rights and powers attaching or relating thereto and may exercise such rights and powers in such manner as it shall in its sole discretion think fit, and the Company shall execute and deliver to the Trustee or such nominee to exercise such rights and powers.
(d)		The Trustee shall not be under any liability to the Company in respect of any failure to present any certificate of or coupon on the Specifically Charged Securities which maybe called or drawn for repayment or redemption or for any failure to pay any call or instalment which may be payable on, or to accept any offer relating to, the Specifically Charged Securities or for any failure to notify the Company of any such matters whether or not any such failure is caused or contributed to by any negligence on the part of the Trustee or any servant or agent of the Trustee.
(e)		Upon the discharge of this Debenture, the Company shall, if the Trustee so requires, accept, in place of any Specifically Charged Security, a security of the same class and denomination in the capital of, issued by, the same person.
(17)		Uncalled capital
		The Company shall, upon the written request of the Trustee for the time being and from time to time, call up any uncalled capital for the time being and from time to time of the Company.
(18)		Secured Loan Capital
		The Company shall not, without prior written consent of the Trustee, issue or re-issue any bonds, debentures, loan stocks, notes or other debt securities for the time being and from time to time secured by any interest by way of security for the time being and from time to time ranking in point of priority to the security hereby constituted or any Land Charge.
(19)		Intellectual Property
		The Company shall make, effect and renew all such filings and registrations and pay all such fees as for the time being and from time to time may be necessary or advisable or as for the time being and from time to time shall be required by the Trustee to create, perfect or preserve the Intellectual Property and/or the security hereby constituted thereover.

(20)		Information, inspection and remedy
(a)		The Company shall furnish to the Trustee forthwith upon the same becoming available (and, in the case of audited accounts, in any event within 120 days of the end of each of its financial years) a copy of the audited accounts of the Company and of each of its subsidiaries for the time being and from time to time certified by a Chartered Accountant approved by the Trustee together with the trading accounts and the directors’ and auditors’ reports thereon and each other document for the time being and from time to time despatched to the members of the Company and each such subsidiary and the Company shall also furnish to the Trustee within 45 days of the end of each quarter unaudited financial statements of the Company and of each of its subsidiaries for the time being and from time to time and the Company shall also furnish to the Trustee, as the Trustee may from time to time request, such other financial statement, information, valuations, and certificates regarding the Company and/or such subsidiaries and their respective affairs, financial conditions, assets and liabilities.
(b)		The Company shall keep, and procure that its subsidiaries for the time being and from time to time shall keep, proper books and records at all times.
(c)		The Company shall, upon request from time to time by the Trustee or its agents, permit the Trustee and/or its agents and/or their respective advisers and employees to enter into and/or inspect the Charged Assets and to carry out, at the Company’s cost, any obligation of the Company to the Trustee under these presents which the Trustee, in its absolute discretion, considers necessary or advisable for the purpose of preserving the value of the security hereby constituted without the Trustee or any other such person becoming liable as mortgagee in possession and provided that the Trustee shall not be obliged under these presents to have any such inspection or obligation carried out.
(d)		The Company hereby permits any Account Bank and any other bank or financial institution with whom the Company may for the time being and from time to time have a banker customer relationship to furnish directly to the Trustee and from time to time upon the request full statements and particulars of all the Company’s accounts with that Account Bank and such other information regarding the Company, its affairs, financial condition, assets and liabilities as may for the time being and from time to time be available to that Account Bank or such other bank or financial institution.
(21)		Disposal of Specifically Charged Assets and other Charged Assets
		The Company shall not and shall not agree to, save with the prior written consent of the Trustee or in pursuance of any other obligation under or pursuant to these presents, sell, transfer or otherwise dispose of any of the Specifically Charged Assets, or, save in the ordinary and usual course of its trade, the whole or any material part of its business,

		undertaking or any of the other Charged Assets (other than the Specifically Charged Assets).
(22)		Conduct of business
		The Company shall carry on and conduct and procure that its subsidiaries for the time being and from time to time shall carry on and conduct its and their respective businesses and affairs in a proper and efficient manner and shall not, without the prior written consent of the Trustee, make any substantial alteration in the nature of such business.
(23)		Insolvency
(a)		The Company shall give at least seven days’ prior written notice to the Trustee of:-
(i)		any steps for the time being and from time to time to be taken by the Company with regard to a proposal for a composition or scheme of arrangement in respect of the Company;
(ii)		any invitation for the time being and from time to time to be made by the Company to any other mortgagee or chargee of the Charged Assets to appoint a receiver;
(iii)		any steps for the time being and from time to time to be taken by the Company with regard to the winding up of the Company; and
(iv)		any event or circumstance analogous to or having substantially similar effect to any of the events and circumstances described in the foregoing Sub-clauses of this Sub-clause (a) under the laws of any applicable jurisdictions.
(b)		The Company shall forthwith notify the Trustee in writing of and supply the Trustee with copies of all documentation and other details relating to:-
(i)		any proposal or application described in Sub-clause (a)(i);
(ii)		any demand for the time being and from time to time made for payment or the appointment of a receiver by any other mortgagee or chargee for the time being and from time to time of the Charged Assets;
(iii)		any petition for the time being and from time to time made for the winding-up of the Company;
(iv)		any demand for the time being and from time to time made on the Company under Section 95 of The Companies Law (2004 Revision); and
(v)		any event or circumstances analogous to or having substantially similar effect to any of the events and circumstances described in the foregoing Sub-clauses of the Sub-clause (b) under the laws of any applicable jurisdiction.

6.		EVENTS OF DEFAULT
(1)		In respect of any Indebtedness by virtue of the Trust Deed to be paid or discharged otherwise than on demand, the Trustee shall nevertheless be entitled by notice to the Company to demand the immediate payment and discharge thereof (or any part thereof) together with all interest then accrued thereon forthwith (or otherwise as the Trustee may require) at any time after the happening of an Event of Default as such term is defined in the Agreement.
(2)		Upon any demand being made for payment of the Indebtedness pursuant to Sub-clause (1), such Indebtedness shall become payable immediately and all rights of the Company to deal for any purpose whatsoever with the Charged Assets shall forthwith cease and any floating charge for the time being and from time to time included in the security hereby constituted shall forthwith crystallize and become a specific charge.
7.		APPOINTMENT OF RECEIVER AND POWER OF SALE
(1)		Time

In the circumstances described in Clause 3.2(1) (assets in jeopardy) or at any time after the Indebtedness shall have become payable in accordance with the Agreement or these presents or at the request of the Company, the Trustee may without further notice (and whether or not the Company shall have been accorded sufficient or any time in which to satisfy such Indebtedness) from time to time appoint in writing (under the hand of any manager of the Trustee) a Receiver of the Non-Realty Charged Assets (but, in the circumstances described in Clause 3.2(1), only the Charged Assets specified in the notice referred to in that Clause) upon such terms as the Trustee may from time to time think fit.

(2)

Power of sale and Enforcement

At any time after the Indebtedness shall have become payable in accordance with the Agreement or these presents or the Trustee shall have appointed a Receiver (otherwise than in the circumstances described in Clause 3.2(1) (assets in jeopardy), the security hereby constituted shall become immediately enforceable and the power of sale and other powers conferred by law as varied or extended by these presents and all other powers conferred on the Trustee by these presents shall become immediately exercisable.

(3)

Removal of Receiver

The Trustee may remove any Receiver for the time being appointed by it from the Charged Assets in respect of which that Receiver shall have been appointed and may from time to

time appoint a new Receiver over those Charged Assets.

(4)

Receiver’s Powers

Every Receiver shall be the agent of the Company (which shall be solely responsible for his contracts engagements, acts, defaults, omissions and losses, for liabilities incurred by him, for his misconduct and for his remuneration) unless and until a liquidator shall be appointed of the Company, whereafter such Receiver shall act as principal but shall not become the agent of the Trustee, and, at all times such Receiver shall have and be entitled to exercise in relation to the Company all the powers conferred on receivers by law and also (but without thereby limited those powers by law and without prejudice to the Receiver’s powers, authorities and discretions conferred by these presents) such Receiver may, without further notice, exercise all or any of the following powers:-

	(a)		to take immediate possession of, get in, and/or collect the Non-Realty Charged Assets and, for that purpose, to enter upon the Immoveable Property or any other premises at which the Non-Realty Charged Assets are for the time being and from time to time located and sever, dismantle or remove the same or any fixtures for the time being and from time to time therefrom without being liable for any loss or damage thereby occasioned;
	(b)		to carry on, manage or concur in the carrying on or managing of, the business for the time being and from time to time of the Company in such manner as he may think fit, including (but without limitation) power to perform, repudiate, rescind, compromise, amend or vary any contract, instrument or agreement to which the Company shall for the time being and from time to time be a party;
	(c)		to sell, exchange or concur in the sale or exchange of the Non-Realty Charged Assets;
	(d)		to grant, or concur in the grant of, any leases or licences of the Non-realty Charged Assets;
	(e)		to grant, or concur in the granting of, any renewals or surrenders of, or to accept, or concur in the accepting of, any surrenders of, any leases or licences for the time being and from time to time of the Non-Realty Charged Assets;
	(f)		to promote or concur in the promotion of, the formation of a subsidiary and/or subsidiaries of the Company with a view to the same purchasing, leasing, licensing or otherwise acquiring all or any of the assets for the time being or from time to time of the Company;
	(g)		to make and effect, and concur in the making and effecting of, all such

			repairs, maintenance, decoration, provision of all services (including but without limitation, lighting, heating and cleansing) structural and other alterations, improvements, additions and development in or to the Non-Realty Charged Assets and to anything else in connection with the Non-Realty Charged Assets which he may think fit or which he may deem proper for the efficient use or management of the Non-Realty Charged Assets, as well as for the protection or for the improvement of the Non-Realty Charged Assets or for the protection or for the improvement of the Non-Realty Charged Assets or for the protection of the security hereby constituted.
	(h)		to exercise or permit the Company or any nominee of the Company to exercise any powers or right incidental to the ownership of the Non-Realty Charged Assets in such manner as the Receiver may think fit and, in particular (as regards any shares, stock or other securities for the time being and from time to time included in the Non-Realty Charged Assets) any rights for the time being and from time to time attached hereto;
	(i)		to call up all or any portion of any uncalled capital for the time being and from time to time of the Company;
	(j)		to redeem any interest by way of security for the time being and from time to time ranking in point of security in priority to any of the security hereby constituted and to settle and prove the accounts of the holder of any such interest and any monies paid by way of such redemption shall be an expense of the Receiver’s receivership;
	(k)		to settle, adjust, refer to arbitration and compromise any claims, accounts, disputes, questions and demands for the time being and from time to time with or by any person who for the time being and from time to time is, or claims to be, a creditor of the Company or relating in any way to the Non-Realty Charged Assets.
	(l)		to bring, prosecute, enforce, defend and abandon any actions, suits and proceedings in relation to the Company or the Non-Realty Charged Assets, suits, and proceedings in relation to the Company or the Non-Realty Charged Assets;
	(m)		to appoint, hire or employ and to remunerate managers, officers, agents, accountants, clerks, servants workmen and others on such terms and generally in such manner as the Receiver shall think fit, either in connection with any exercise by the Receiver of his powers or by or pursuant to these presents or otherwise for any purpose connected with the Non-Realty Charged Assets, and to discharge any such person.
	(n)		to appoint a solicitor or accountant or other professionally qualified person

			to advise or assist it in the exercise of any of the powers, authorities and discretions by or pursuant to these presents or otherwise for any purpose connected with the Non-Realty Charged Assets, and to discharge any such person;
	(o)		for the purpose of exercising any of the powers, authorities and discretions conferred on the Receiver by or pursuant to these presents and/or defraying any costs, charges losses or expenses (including his remuneration) which shall for the time being and from time to time be incurred by him in the exercise thereof or for any other purpose, to make advances or to raise to borrow money either unsecured or secured on the Non-Realty Charged Assets ranking in point of security in priority to, pari passu with, or subsequent to, the security hereby constituted or otherwise and at such rate or rates of interest and generally on such terms and conditions as the Receiver may, in his absolute discretion, think fit;
	(p)		to give valid receipts for all monies and to execute all deeds or documents (including, but without limitation, with full power to convey any assets sold in the name of the Company) as may be necessary or appropriate in the name of, or on behalf of he Company for the purpose of exercising any of the powers, authorities and discretions conferred on the Receiver by or pursuant to these presents and to use the name of the Company for all or any such powers, authorities and discretions, for which purpose the Company hereby irrevocably appoints every such Receiver to be its attorney; and
	(q)		to do all such other acts, deeds and things as the Receiver may consider necessary or desirable for the realisation of the Non-Realty Charged Assets or as the Receiver may consider incidental or conducive to any of the powers, authorities and discretions conferred on him by or pursuant to these presents, and to do and exercise, in relation to the Non-Realty Charged Assets, all such acts, deeds and things and all such powers, authorities and discretions as the Receiver would be capable of doing and exercising if he were the absolute beneficial owner of the Non-Realty Charged Assets.

(5)

Exercise of Receiver’s powers

In the exercise of any of the powers, authorities and discretions conferred on a Receiver by or pursuant to these presents in relation to any dealing whatsoever with the Non-Realty Charged Assets, the Receiver:-

	(a)		may agree such terms and conditions relating thereto and such consideration therefor; and
	(b)		may dispose of the Non-Realty Charged Assets in such manner (including, but without limitation, by public auction, tender or private treaty) and with

or without such advertisement and in such lot or lots together or separately;

as the Receiver shall, in his absolute discretion, think fit.

The enforcement of the security constituted by a Land Charge shall be governed by the Registered Land Law (2004 Revision) as varied and/or added to by the Land Charge.

8.		RESPONSIBILITY FOR RECEIVER
(1)		Liability of Trustee

The Trustee shall not incur any liability, either to the Company or to any other person whomsoever, in respect of any contracts, engagements, acts, omissions, defaults or losses of any Receiver or for any liabilities incurred by him, for any misconduct by him or for his remuneration, by reason of the Trustee having appointed him or of the Trustee having made or given any direction, either generally or specifically, to him or having concurred in any such contract, engagement, act, omission, default, loss or liability for any other reason whatsoever.

(2)

Remuneration

The Trustee may, from time to time, fix the remuneration of any Receiver and direct payment of the same out of monies accruing to him in the exercise of his powers, authorities and discretions by or pursuant to these presents, but the Company alone shall be liable for the payment of that remuneration.

9.		ADDITIONAL POWERS OF THE TRUSTEE
(1)		As Mortgagee

The powers, authorities and discretions conferred by or pursuant to these presents in relation to the Non-Realty Charged Assets on the Trustee or any Receiver shall be in addition to, and not in substitution for, the powers conferred on Mortgagees or receivers by law and, where there is any ambiguity or conflict between the powers, authorities and discretions conferred by law and those conferred by or pursuant to these presents, the terms of these presents shall prevail.

(2)  As Receiver

All or any of the powers, authorities and discretions conferred by or pursuant to these presents, either expressly or impliedly, upon a Receiver, may be exercised by the Trustee in relation to the Non-Realty Charged Assets without the Trustee having to first appoint a Receiver.

(3)

Delegation of Powers of the Trustee

The Trustee may, for the time being and from time to time, delegate by power of attorney or in any other manner (including but without limitation, under the hand of any manager of the Trustee) to any person all or any of the powers, authorities and discretions which are, for the time being, exercisable by the Trustee under or pursuant to these presents or by law in relation to the Charged Assets and any such delegation under or pursuant to these presents or by law in relation to the Charged Assets and any such delegation may be made upon and subject to such terms and conditions (including, but without limitation, the power to sub-delegate) as the Trustee may in its absolute discretion, think fit and the Trustee shall not be liable or responsible to the Company or any other person from any loss or damage arising from any act, default or omission on the part of any such delegate (or sub-delegate).

10.

APPROPRIATION

Any monies received by the Trustee or a Receiver under or pursuant to these presents shall, subject to payment of any claims for the time being having priority to these presents, be applied for the following purposes and in the following order of priority:-

11.		LIABILITY OF THE TRUSTEE AND RECEIVER
(1)		General

If the Trustee or any Receiver or Delegate shall enter into possession of the Charged Assets, any of them may, from time to time at will, go out of such possession.

(2)

Exclusion of the Trustee’s Liability

The Trustee shall not, in any circumstances, either by reason of any entry by it in, or taking by it of possession of, the Charged Assets or for any other reason whatsoever

and whether as mortgagee in possession or on any other basis whatsoever, be liable to account to the Company for anything except the Trustee’s or its Delegate’s or agent’s own actual receipts or be liable to the Company or any other person for any other loss or damage arising from any realisation by the Trustee of the Charged Assets or from any act, default or omission of the Trustee of any power, authority or discretion conferred upon it by or pursuant to these presents, any Land Charge or by law.

(3)

Exclusion of Receiver’s Liability

All the provisions of Sub-clause (2) shall apply in respect of the liability of any Receiver or Delegate in all respects as though every reference in that Sub-clause to the Trustee was also a reference to such Receiver or, as the case may be, such Delegate.

(4)

Indemnity

The Trustee and every Receiver and Delegate shall be entitled to be indemnified out of the Non-Realty Charged Assets in respect of all liabilities and expenses for the time being and from time to time incurred by any of them in or the execution or purported execution of any of the powers, authorities and discretions conferred on them by or pursuant to these presents or by law and against all actions, proceedings, costs, claims and demands in respect of any matter or thing done or omitted in any way relating to the Charged Assets and the Trustee and every Receiver may retain an pay all sums in respect of same out of any monies received under such powers, authorities and discretions.

12.		POWER OF ATTORNEY
(1)		Appointment

The Company hereby, by way of security, irrevocably appoints the Trustee and every Receiver and Delegate severally to be its attorney and on its behalf and in its name or otherwise to execute and do all such acts, deeds and things which the Company ought to do under these presents and generally, on its behalf and in its name, to exercise all of any of the powers, authorities and discretions conferred by or pursuant to these presents or by law on the Trustee or any Receiver or Delegate.

(2)

Ratification

The Company hereby ratifies and confirms and agrees to ratify and confirm whatever any attorney of the Company appointed by these presents shall do or purport to do in the exercise or purported exercise of all or any of the powers, authorities and discretions granted to such attorney by these presents.

13.

FURTHER ASSURANCE

The Company shall from time to time execute and do all such acts, deeds and things as the Trustee may reasonably require for perfecting or better perfecting or protecting or better protecting the security hereby constituted or constituted by any Land Charge and, after the Indebtedness shall have become payable, for facilitating the realisation of the Charged Assets and for exercising all powers, authorities and discretions conferred by or pursuant to these presents, any Land Charges or by law on the Trustee or any Receiver or Delegate or any receiver under the Land Charge and shall, in particular (but without limitation) execute and deliver all interests by way of security, transfers, conveyances, assignments and assurances and give all notices and other communications which the Trustee shall for the time being, think expedient.

14.		PROTECTION FOR THIRD PARTY PURCHASERS
(1)		No purchaser, mortgagee or other person dealing with the Trustee or any Receiver or Delegate shall be concerned to enquire whether the Indebtedness shall have become payable or where any power, authority or discretion which the Trustee or a Receiver or Delegate is purporting to exercise shall have become exercisable or shall be being properly exercised or to see to the application of any monies paid to the Trustee or a Receiver or Delegate.
(2)		Without prejudice to Sub-clause (1) and in addition to all other protection for the time being afforded by law, any purchaser, mortgagee or other person dealing with the Trustee or any Receiver or Delegate shall be entitled and bound to assume without enquiry that the security hereby constituted shall have become enforceable.
15.		CONTINUING SECURITY AND AVOIDANCE OF PAYMENTS
(1)		The Security hereby constituted shall be a continuing security and shall not be satisfied or discharged by any intermediate payment or satisfaction of the Indebtedness.
(2)		No assurance, security or payment which may be avoided under any enactment relating to bankruptcy or insolvency or under The Fraudulent Dispositions Law, (1996 Revision) (or similar legislation binding on the Company in a jurisdiction other than the Cayman Islands), and no release, settlement or discharge given or made by the Trustee on the faith of any such assurance, security or payment, shall prejudice or affect the right of such persons to enforce the security hereby constituted or any Land Charge.

16.		ADDITIONAL SECURITY, SUSPENSE ACCOUNT AND CONSOLIDATION
(1)		The security hereby constituted shall be in addition to, and shall not prejudice, or be prejudiced by, any other interest by way of security, right or remedy which the Trustee may for the time being and from time to time enjoy in respect of the Indebtedness.
(2)		The Trustee may, in its absolute discretion, grant time or other indulgence or make or grant any other arrangement, variation or release to or with any person (and whether or not such person is jointly and/or severally liable to the Trustee with the Company) in respect of the Indebtedness or in respect of any other interest by way of security or guarantee therefor, without prejudice either to the security hereby constituted or to the liability of the Company for the Indebtedness.
(3)		Any monies received under or pursuant to these presents may subject to the Agreement be placed and kept to the credit of one or more than one suspense accounts with the Trustee for so long as the Trustee may think fit and, notwithstanding the other provisions of these presents, without any obligation in the meantime to apply the same or any part thereof or interest accruing thereon in or towards discharge of any of the Indebtedness and, notwithstanding any such payment, in the event of any liquidation or winding-up of the Company, the Trustee may prove for and agree to accept any dividend or composition in respect of the whole or any part of the Indebtedness as if this Debenture had not been executed and delivered.
(4)		The Trustee shall have the right (but not the obligation) exercisable in its sole and absolute discretion to consolidate this Debenture with any collateral, additional or supplemental interests by way of security hereto notwithstanding any provision of any law to the contrary.
17.		AMALGAMATION OF TRUSTEE

These presents shall remain enforceable, valid and binding for all purposes notwithstanding any change in the name of the Trustee or its absorption of or by, or its amalgamation or consolidation with, any other person or any change in its constitution or that its successors or assigns or the person by which the business of the Trustee may, for the time being and from time to time, be carried on and shall be available to all such successors, assigns and persons.

18.

NOTICES

Any notice, demand or other communication by the Trustee shall be in writing signed by any manager of the Trustee and may be served by delivering the same to the Company or by post addressed to the Company at the Company’s address last known to the Trustee or to the registered office for the time being and from time to time of the Company and any such notice, demand or other communication so addressed and posted shall be deemed to have been served at the expiration of forty-eight hours after it has been posted and shall be effective notwithstanding that it be returned as being undelivered.

20.

RIGHTS AND REMEDIES

The rights of the Trustee under these presents are cumulative, may be exercised as often as considered appropriate and are in addition but subject to the general law and the terms and conditions of the Agreement. Such rights (whether arising hereunder or under the general law or the Agreement) shall not be capable of being waived or varied otherwise than by an express waiver or variation in writing and, in particular, any failure to exercise or delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right, any defective or partial exercise of any such rights shall not preclude any other or further exercise of that or any other such right, and no act or course of conduct or negotiation by the Trustee or on its behalf shall in any way preclude it from exercising any such right or constitute a suspension or any variation of any such right. In the event that there is a conflict between the terms and conditions of the Agreement and the provisions of this Debenture, the terms and conditions of the Agreement shall prevail.

21.

SEVERANCE

If at any time any one or more provisions of this Debenture are or become invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby.

22.

GOVERNING LAW

These presents shall be governed by, and construed in accordance with, the laws of the Cayman Islands.

23.

JURISDICTION

The Company hereby irrevocably agrees that the courts of the Cayman Islands are to have jurisdiction to settle any disputes which arise out of or in connection with this Debenture

and that, accordingly, any suit, action or other legal proceedings so arising may be brought in such courts. The Company hereby irrevocably waives any objection which it may now or hereafter have to the laying of the venue of any such legal proceedings in such courts and any claim that any such legal proceedings have been brought in an inconvenient forum, and further hereby irrevocably agrees that a judgment in any such legal proceedings brought in such courts shall be conclusive and binding upon it and may be enforced in the Courts of any other jurisdiction without re-examination of the merits.

Nothing contained in this provision shall limit the right of the Trustee to take any such legal proceedings in any other court of competent jurisdiction; nor shall the taking of any legal proceedings in one jurisdiction preclude the taking of legal proceedings in another, whether concurrently or not. The Company hereby agrees that the process by which any such legal proceedings are begun in the Cayman Islands may be served on it by being delivered to the person (if any) specified in Schedule 5 .

24.

STAMPING

This Debenture shall at the Company’s expense be impressed with stamp duty initially to cover US$15,771,997.16 of the Indebtedness and the Trustee shall be at liberty and is hereby empowered at any time or times hereafter (without any such licence or consent on the part of the Company) to impress such additional stamp duty hereon or on any collateral, supplemental or additional interests by way of security to this Debenture all at the Company’s own cost and expense as is necessary to cover the Indebtedness.

IN WITNESS whereof this document has been executed as a deed and delivered the day and year first above written.

 

EXHIBIT 10.6

DEED OF SECOND COLLATERAL DEBENTURE

     BETWEEN:

CAYMAN WATER COMPANY LIMITED

and

DEXTRA BANK & TRUST CO. LTD.

Dated: August 4, 2006

Charles Adams Ritchie & Duckworth
PO Box 709GT, Zephyr House, Mary Street
Grand Cayman, Cayman Islands
British West Indies
Tel: 345 949 4544
Fax: 345 949 8460
Email: card@card.com.ky

INDEX

Clauses

1. DEFINITIONS AND INTERPRETATION

2. MONIES SECURED

     (1) Monies

     (2) Costs

     (3) Interest

3. THE CHARGES

     3.1 Charging provision

          Immovable Property

          Specifically Charged Plant

          Trading Debts

          Non-Trading Debts

          Specifically Charged Securities

          Goodwill and uncalled capital

          Intellectual Property

          Ancillary assets

          Trustee Accounts

          Other assets

     3.2 Crystallisation of floating charge

     3.3 Negative pledge

     3.4 Land Charges

4. REPRESENTATIONS & WARRANTIES

5. COVENANTS

	(1)		Documents of title to Immoveable Property and Specifically Charged Plant and Securities
	(2)		Further charges
	(3)		Future Immoveable Property and Specifically Charged Plant and Securities
	(4)		Maintenance
	(5)		Insurance
	(6)		Registration under The Registered Land Law
	(7)		Notices affecting Immoveable Property or Specifically Charged Plant
	(8)		Planning Legislation
	(9)		Other compliance with law
	(10)		Compliance with contracts
	(11)		Leases or licences of Immoveable Property and Intellectual Property: As Lessee or Licensee
	(12)		Leases of licences of Immoveable Property and Intellectual Property; as lessor or licensor
	(13)		Removal and severance
	(14)		Specifically Charged Plant
	(15)		Debts and Trustee Accounts

	(16)		Specifically Charged Securities
	(17)		Uncalled capital
	(18)		Secured loan capital
	(19)		Intellectual Property
	(20)		Information, inspection and remedy
	(21)		Disposal of Specifically Charged Assets and other Charged Assets
	(22)		Conduct of business
	(23)		Insolvency

6. EVENTS OF DEFAULT

7. APPOINTMENT OF RECEIVER AND POWER OF SALE

	(1)		Time
	(2)		Power of Sale and Enforcement
	(3)		Removal of Receiver
	(4)		Receiver’s Powers
	(5)		Immoveable Property

8. RESPONSIBILITY FOR RECEIVER

	(1)		Liability of Trustee
	(2)		Remuneration

9. ADDITIONAL POWERS OF THE TRUSTEE

	(1)		As Mortgagee
	(2)		As Receiver
	(3)		Delegation of Powers of the Trustee

10. APPROPRIATION

11. LIABILITY OF THE TRUSTEE AND RECEIVER

	(1)		General
	(2)		Exclusion of the Trustee’s Liability
	(3)		Exclusion of Receiver’s liability
	(4)		Indemnity

12. POWER OF ATTORNEY

	(1)		Appointment
	(2)		Ratification

13. FURTHER ASSURANCE

14. PROTECTION FOR THIRD PARTY PURCHASERS

15. CONTINUING SECURITY AND AVOIDANCE OF PAYMENTS

16. ADDITIONAL SECURITY, SUSPENSE ACCOUNT AND CONSOLIDATION

17. NEW ACCOUNT

18. SET-OFF

19. AMALGAMATION OF TRUSTEE

20. NOTICES

21. RIGHTS AND REMEDIES

22. SEVERANCE

23. GOVERNING LAW

24. JURISDICTION

25. FURTHER ADVANCES

26. STAMPING

THIS DEED OF SECOND COLLATERAL DEBENTURE is made on the 4th day of August, 2006

BETWEEN:-

(1)

CAYMAN WATER CO. LTD. incorporated under the laws of the Cayman Islands of P.O. Box 1114 GT, Grand Cayman (the “Company”, which expression shall include its successors and assigns); and

(2)

DEXTRA BANK & TRUST CO. LTD. (the “Trustee”), which expression shall include its successors, transferees and assigns);

WHEREAS

A            The Company is a wholly owned subsidiary of Consolidated Water Co. Ltd. (“CWCO”). CWCO and Scotiabank & Trust (Cayman) Ltd. (the “Bank”) entered into certain loan facilities dated February 7, 2003 and to secure the repayment of those facilties CWCO granted to the Bank a debenture over all of its assets. Subsequent to that date CWCO requested the Bank’s consent to transfer certain of its assets to the Company.

B            The Bank granted its consent to the transfer of assets to the Company on the condition that the Company and the Bank enter into a Collateral Deed of Debenture which was executed whereby the Company granted to the Bank a fixed and floating charge over all of the assets of the Company (the “First Debenture”).

C            Pursuant to the Trust Deed CWCO has issued bonds and received consideration therefor from the Trustee on behalf of the Bondholders.

D            CWCO is indebted to the Trustee as trustee for the Bondholders in the sum of US$15,771,997.16 (the “Indebtedness”). CWCO has granted to the Trustee a debenture to secure repayment of the Indebtedness.

E            To further secure the Indebtedness and all other obligations of CWCO under the Trust Deed the Company hereby grants to the Trustee this Second Debenture which, by agreement between the Trustee and the Bank, shall rank in all respects pari passu with the First Debenture.

WITNESSES as follows:-

1. DEFINITIONS AND INTERPRETATION

1.1

In this Deed of Second Debenture, unless the contrary shall be expressed or the context shall otherwise require:-

(1) the following words and expressions shall have the following meanings, that is to say:-

“Account Bank” means any bank or financial institution for the time being and from time to time approved by the Trustee in writing as a bank or other financial institution with whom the Company may have an account or accounts into which the Company may pay its Trading Debts. Such approval may be given as well before as on or after the date hereof, provided that it shall expressly refer to this Debenture.

“Agreement” means the Trust Deed and all other (if any) agreements (other than these presents) for the time being and from time to time in force between the Trustee and the Company or CWCO (and whether entered into before or after this Debenture) regulating any business relationship between the Company or CWCO and the Trustee.

“assets” means assets of every kind, including, but without limitation, the benefit of any agreement, a building or other fixture, a business, goods, goodwill, immovable property, money plan or other equipment, stock-in-trade, the uncalled capital of a body corporate, an undertaking and work-in-progress and any interest therein and, as the contest shall require or admit, any part of such assets.

“Bank Accounts" means all the Charged Assets in Clauses 3.1(3)(p) and (q) and “Bank Account” shall be construed accordingly.

“Charged Assets" means all the assets of the Company for the time being and from time to time the subject of or expressed to the subject of any interest by way of security created by the Company in favour of the Trustee under or pursuant to these presents or a Land Charge and, as the context shall require or admit, any part of such assets. A reference to Charged Assets in a particular Sub-clause or Sub-clauses or Clause 3.1 is a reference to the assets becoming or being express to become the subject of such an interest by way of security as a result of a reference to them being made in that Sub-clause or those Sub-clauses, respectively.

“Delegate" means a delegate or sub delegate of the Trustee described in Clause 9(3).

“this Debenture” means this Deed of Second Collateral Debenture.

“finance lease" shall have the meaning given in the Statement of Standard Accounting Practice number 21 issued by the Institute of Chartered Accountants in England and Whales.

“Guarantor” means any person who shall for the time being and from time to time guarantee to the Trustee the payment of discharge of the Indebtedness, and referenced to the “relevant Guarantee ” shall be construed accordingly.

“immovable property" means all the Charged Assets in Clauses 3.1(1) and 3.1(2) and, as the context shall require or admit, any part of such Charged Assets.

Indebtedness” means all monies, liabilities and other sums of whatsoever nature covenanted to be paid and discharged by the Company to the Trustee under Clause 2 and, as the context shall require or admit, any part of such monies, liabilities and other sums.

“Intellectual Property” means all the Charged Assets in Clauses 3.1(3), (j) and (k) and, as the context shall require or admit, any part of such Charged Assets.

“interest by way of security" means any mortgage, pledge, lien, charge, assignment by way of security, hypothecation, title retention, finance lease, factoring or discounting of

debts or any other agreement or arrangement for or by way of security, including such as arises or is imposed by operation or implication of applicable law and including any account with bankers earmarked or designated for the use of making preferential payments pursuant to Section 162 of the Companies Law (2004 Revision) or any other provision of applicable law having similar or substantially similar effect.

“Land Charge” means a collateral land charge of Immoveable Property, if any, executed by the Company in favour of the Trustee pursuant to Clause 3.4 and “ Land Charges” shall be construed accordingly.

“Non-Realty Charged Assets” means the Charged Assets excluding Immoveable Property.

“Non-Trading Debts” means all the Charged Assets in Clause 3.1(3)(d) and, as the context shall require or admit, any part of such Charged Assets.

“person” means an individual, a firm, a partnership (whether or not having separate legal personality), an unincorporated body, a body corporate, a corporation and a national or local government or governmental agency or body, and, in each case, wheresoever resident, incorporated or formed.

“Planning Legislation” means all applicable statutes for the time being and from time to time in force in relation to the use of development of immoveable property and all regulations then made or taking effect as if made thereunder.

“Prohibited Security Interest" means any interest by way of security other than:

(a)		such security granted by the Company as is in existence as of the date hereof in favour of the Bank;
(b)		such as arises or is imposed by operation or implication of law and is not intended to arise for that purpose;
(c)		any agreement or arrangement for the retention of title to goods which is not entered into for the purpose of raising finance;
(d)		such as arises as a result of normal banking arrangements of the company with an Account Bank in respect of the collection of cheques (including cheques expressed in a foreign currency) in respect of the collection of Trading Debts; and
(e)		the security hereby constituted.