EXHIBIT 10.1
ENGAGEMENT AGREEMENT
THIS AGREEMENT is made the 15 day of January 2008.
BETWEEN: CONSOLIDATED WATER CO. LTD.,
a Cayman Islands company having its registered office at
Regatta Office Park, Windward 3, 4th Floor, West Bay Road
P.O. Box 1114, Grand Cayman KY1-1102, B.W.I.
(the “Company”)
AND: DAVID W. SASNETT
of 16254 SW 67th Court, Ft. Lauderdale, Florida 33331
(the “CFO”)
IT IS HEREBY AGREED:
Engagement

1.   The CFO is engaged as Executive Vice President and Chief Financial Officer
of the Company from the 1st day of January 2008 to the 31st day of December,
2009 (the “Term”) subject to the termination provisions set out in Clauses 19
and 20 and to the extension provisions set out in Clause 22.   2.   The CFO is a
Director of the Company and, subject to re-election by the shareholders from
time to time, must remain so, for the duration of this Agreement, on the same
terms as other Executive Directors of the Company.

Remuneration

3.   The CFO’s remuneration will be US$221,000.00 per annum, payable monthly in
arrears (the “Base Salary”).   4.   In addition, during the Term of this
Agreement, the Company will pay the cost of providing medical insurance in the
United States, with coverage reasonably equivalent to that generally provided
for the Company’s Cayman Islands employees from time to time, for the CFO and
his immediate family.

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5.   In addition, during the Term of this Agreement, the Company will make all
statutory payroll contributions required of employers in the United States,
including but not limited to FICA, Medicare, SUI, and WC in respect of the CFO
to the appropriate United States regulatory agencies as mandated by applicable
United States laws.   6.   As of January 1st each year, the CFO’s Base Salary
will be reviewed by the Chief Executive Officer (“CEO”) who may grant an
increase but must not reduce the CFO’s Base Salary below the level set out in
Clause 3 or in the immediately preceding year, whichever is applicable.   7.  
If by not later than March 31st in each calendar year commencing with the year
2008, the CFO and the CEO have agreed to Performance Goals for that calendar
year, and if such Performance Goals are met for that year, then the Company must
pay to the CFO a Performance Bonus for that year in an amount not less than 25%
of the CFO’s Base Salary for that calendar year as adjusted by Clause 6. The
Board of Directors, in its sole and absolute discretion, and taking into
consideration the recommendations of the CEO, if any, may determine to pay a
larger Performance Bonus. In any calendar year that all of the Performance Goals
are not met, the Board of Directors, in its sole and absolute discretion, and
taking into consideration the recommendations of the CEO, if any, may, but is
not obligated to, pay the CFO a Performance Bonus in an amount determined by the
Board of Directors. The Performance Bonus must be paid entirely in cash.      
The Performance Bonus, if any, calculated as above for a calendar year must be
paid not later than the following 28th February or within 14 days after the
first directors’ meeting of the Company for that following year, whichever is
later.   8.   Subject to approval of the members of the Company at the Company’s
next Annual General Meeting and of the Committee to be set up to administer the
Company’s Equity Incentive Plan (“the Plan”), the CFO will participate in the
Plan and will be granted as at November 30 2007 (“the Grant Date”) an option to
purchase 22,200 ordinary shares of the Company (subject to adjustment in
accordance with the Plan) at the closing price of the Company’s ordinary shares
on the primary listing exchange on the Grant Date. The option will vest in
tranches of 7,400 shares each on January 1 2009, January 1 2010, and January 1
2011 (“the Vesting Dates”), and each may be exercised by the CFO in accordance
with the Plan and subject to Clause 21, no more than three years from the
relevant Vesting Date, after which the option in respect of that tranche will
expire. If the Company’s shareholders do not approve the Plan or the Committee
does not approve the grant to the CFO, then the Company must within thirty days
of the Annual General Meeting pay the CFO a lump sum equal to 25% of his Base
Salary.   9.   During the first calendar year of this Agreement, the Company
will provide the CFO with a monthly automobile expense allowance of US$850. This
monthly automobile allowance will increase on January 1 of each subsequent
calendar year by US$50 per month (or US$600 per year) during the term of this
Agreement.

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Responsibilities

10.   The CFO’s work will be performed mainly in South Florida, United States of
America.   11.   The CFO must devote the whole of his business time and
attention to perform his duties hereunder and must use his best endeavours to
promote the Company’s interests and welfare. These duties include responsibility
for certain administrative functions in the U.S and providing financial advice
and assistance to the CEO.       As Chief Financial Officer, the CFO will
generally provide strategic and operational direction to the Company’s financial
function and assist the Board and senior management in establishing financial
and operating strategic objectives and policies to ensure attainment of
corporate objectives.       In this regard, the CFO must perform the duties
commonly performed by a Chief Financial Officer of a United States publicly
listed company which duties include, in conjunction with reasonable and
appropriate subordinate staff to be provided by the Company, the following:-

  (a)   maintaining the accounts of the Company, its wholly-owned subsidiaries
and managed affiliates (collectively “the Group”);     (b)   managing
subordinate staff in the Group’s accounting, information technology, and
purchasing departments;     (c)   preparing all annual and quarterly financial
reports to be filed with the U.S. SEC in a timely manner, including financial
statements and disclosures included in management’s discussion and analysis;    
(d)   preparing financial information required for U.S. SEC or other regulatory
agency filings relating to the issue by the Company of debt and/or equity,
including historical financial data, pro forma financial statements, financial
projections and other financial data included in the filings;     (e)   liaising
with the Group’s independent accountants and internal auditors and the Company’s
Audit Committee, and promptly preparing and communicating all information
requested by the independent accountants, internal auditors and the Audit
Committee during the course of the annual audit, quarterly reviews, or any other
review;     (f)   preparing monthly management accounts and analytical analysis
of monthly performance versus projections and prior periods for presentation to
management and the Board of Directors;     (g)   preparing financial and other
reports for various government, local government and regulatory agencies as
required in the operating licences of the Group Companies, and communicating
that information to the CEO and the applicable regulatory bodies;     (h)  
monitoring Group compliance with debt security documentation, contracts and
Licenses and preparing bank covenant compliance calculations for the Group, as

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      required in the Company’s loan agreements, from time to time, and
communicating that information to the CEO and the applicable banks;     (i)  
preparing and maintaining the consolidated budget for the Group;     (j)  
assessing, establishing and maintaining the Group’s disclosure controls and
procedures (as defined in Rule 15d-15(e) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”);     (k)   assessing, establishing and maintaining
the Group’s internal control over financial reporting procedures (as defined in
Rule 15d-15(f) of the 1934 Act;     (l)   overseeing the supervision of
subordinate accounting and administrative personnel, including work allocation,
training, and problem resolution; evaluating performance and making
recommendations for personnel actions; motivating employees to achieve peak
productivity and performance;     (m)   maintaining the Company’s share
register, for all classes of shares, outstanding stock options, and warrants,
and liaising with the Company’s stock transfer agent; and     (n)   carrying out
all duties reasonably required of and assigned to him by the CEO, which he must
discharge in accordance with directions of the CEO.

The CFO must perform his duties under this Agreement during normal business
hours from Monday to Friday inclusive (except on public holidays) but he accepts
that his duties, which include travelling on the Company’s business both within
the United States of America and abroad, may, from time to time, require work to
be undertaken on Saturdays, Sundays and public holidays.
The CFO must directly report to the CEO, diligently follow and implement all
management policies and decisions which the CEO communicates to him, prepare and
forward in a timely manner all reports and accountings requested by the CEO, the
Board of Directors, or any statutory body having regulatory authority over the
Company and/or its subsidiaries, and will generally be responsible for the
Company’s financial management and administration functions.
Except when required to do so by law, the CFO must not directly or indirectly
knowingly engage in any activities or work which the Board deems to be
detrimental to the best interests of the Company.
The Company and the CFO will enter into an indemnification agreement identical
to that approved at the August 11, 2004 Annual General Meeting of the Company.

12.   In case of inability to work due to illness or injury, the CFO must notify
the Company immediately and produce a medical certificate for any absence longer
than three working days.

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13.   The CFO is entitled to up to ten (10) days sick leave per year (but not
more than three consecutive days at any time) without a medical certificate.

Holidays

14.   The CFO is entitled, during every calendar year to the following holidays
during which his remuneration will continue to be payable:

  (a)   all public holidays in the United States of America but not in the
Cayman Islands unless the CFO is in the Islands on Company business over a
Cayman public holiday, and     (b)   four (4) weeks vacation to be taken at a
time to be approved by the CEO.

Reimbursement of Expenses/Fees Earned

15.   (a) All expenses for which the CFO claims reimbursement must be in
accordance with any policies established by the Company from time to time and
must be within the operating budgets approved by the Board of Directors. The
Company must reimburse the CFO for the costs incurred by the CFO in his
performance of his duties and responsibilities under this Agreement upon
production of the necessary vouchers or, if he is unable to produce vouchers, on
the CFO proving, to the CEO’s satisfaction, the amount he has spent for those
purposes.

(b) All fees and payments received by the CFO for or in relation to acting as
director or officer of a subsidiary or affiliate of the Company will be the
property of the Company and the CFO must account to the Company for them.
Non-Competition

16.   The CFO agrees, as a separate and independent agreement, that he will not
during any period for which he has been remunerated under this Agreement,
whether for his own account or for the account of any other person, firm or
company, either alone or jointly with or as manager, agent for or employee of or
as consultant to any person, company or firm, directly or indirectly, carry on
or be engaged or concerned or interested in any person firm or entity who
conducts business identical to or similar to that conducted by the Group in any
jurisdiction in which the Group carries on business (whether directly or
indirectly).

Company Information, Documents, Confidentiality, and Non-Solicitation

17.   (a) All information, documents, books, records, notes, files, memoranda,
reports, customer lists and other documents, and all copies of them, relating to
the Group’s business or opportunities which the CFO keeps, prepares or conceives
or which become known to him or which are delivered or disclosed to him or
which, by any means come into his possession, and all the Group’s property and
equipment are and will remain the Group’s sole and

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    exclusive property both during the term of this Agreement and after its
termination or expiration;       (b) If this Agreement is terminated for any
reason, or if the Company at any time requests, the CFO must promptly deliver to
the Company the originals and all copies of all relevant documents that are in
his possession, custody or control together with any other property belonging to
the Group. Should the CFO afterwards require access to copies of such documents
for any reasonable purpose, the Company must provide them at his request;      
(c) The CFO must not, at any time during the Term of this Agreement or within
one year after its termination or expiration, either for his own account or for
the account of any other person, firm or company, solicit, interfere with or
endeavour to entice away from the Group any person, firm or company who, at any
time during the currency of this Agreement were employees, customers or
suppliers of or were in the habit of dealing with the Group.   18.   Except
where such information is a matter of public record or when required to do so by
law, the CFO must not, either before or after this Agreement ends, disclose to
any person any information relating to the Group or its customers of which he
becomes possessed while acting as the CFO.

Termination

19.   At the option of the Company, this Agreement will terminate and, except to
the extent previously accrued, all rights and obligations of both parties under
it will cease if the CFO:

  (a)   dies; or     (b)   is convicted of any felony (whether or not relating
to the Company or its subsidiaries or affiliates).

20.   (a) The Company may terminate this Agreement forthwith if the CFO
knowingly commits any act or omission that could reasonably be expected to
result in material harm to the business or reputation of the Company or any of
its subsidiaries or affiliates, which failure and/or conduct continues
un-remedied for ten (10) days after written notice from the CEO to the CFO
setting forth in reasonable detail a description of such conduct, or otherwise
conducts himself in a manner that would justify immediate dismissal of an
employee in accordance with Section 51(1)(a)1 of the Labour Law and, except to
the extent previously accrued, all rights and obligations of both parties under
this Agreement will cease.       (b) If through physical or mental illness, the
CFO is unable to discharge his duties for sixty (60) successive days, as to
which a certificate by any doctor appointed by the Company will be conclusive,
then

  1.   the CFO will be relieved of his duties, his salary reduced to US$1,000.00
per annum and his bonus entitlement suspended, but

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  2.   the Company will continue to pay the full cost of providing medical
insurance for the CFO and his wife and minor children,

until the CFO is able once again to resume his duties in full.
If this incapacity continues for a period of one year (including the 60-day
period referred to above) the CFO’s employment will be deemed to have been
terminated by mutual consent at the expiration of that period.

    (c) The CFO may give six (6) months written notice of termination to the
Company and if he does so, this Agreement will terminate at the expiration of
that period and, except to the extent previously accrued, all rights and
obligations of both parties under it will cease.

    1 Sections 51 – 53 (inclusive) of the Labour Law (2001 Revision) are
attached

21.   If this Agreement is terminated by the CFO in accordance with Clause 20(c)
or by the Company in accordance with Clause 20(a) or in accordance with
Sections 51(1)(b)1, 51(1)(c)1 or 51(1)(f)1 of the Labour Law, all unvested
tranches of the option granted to the CFO pursuant to Clause 8 will be forfeited
by the CFO as of the date of service of the notice of termination. If this
Agreement is otherwise terminated or in the event of a Change in Control, as
defined below, during the term of this Agreement, all unvested tranches of the
option granted to the CFO pursuant to Clause 8 will vest immediately.       If
there is a Change of Control of the Company, then the CFO, at his option, may
terminate this Agreement upon one-hundred and twenty (120) days’ prior written
notice (the “Notice Period”) to the Company after the Change in Control. In that
event, the Company must pay the CFO on the last business day of the Notice
Period in cash in one lump sum an amount equal to three times the CFO’s
then-current Base Salary. The parties agree that this paragraph is subject to
modification if required by the final regulations to be issued under
Section 409A of the United States Internal Revenue Code.       For the purposes
of this Agreement, a “Change of Control” will be deemed to have taken place if:
(i) any person, including a “group” as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, publicly announces that such person
or group has become the beneficial owner of more than 30% of the combined voting
power (“Controlling Voting Power”) of the then outstanding securities of the
Company that may be cast for the election of directors of the Company and
(ii) the persons who were directors of the Company before such event cease to
constitute a majority of the Board of Directors of the Company, or any successor
to the Company, as the direct or indirect result of any person or group
acquiring Controlling Voting Power.

Extension

22.   On or before August 31st of each year during the Term of this Agreement
(or any extension of it), the CEO must determine whether to extend the Term of
this Agreement, and if the

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CEO so determines, the term of this Agreement will be extended such that the
term will continue for two (2) years from January 1st of the next following
year.
If the CEO or Company determines not to extend the Agreement in any year, the
Term of this Agreement will expire on December 31st of that year and the
Company, on that latter date, must pay to the CFO, in cash, a severance payment
equal to the CFO’s Base Salary for that year as adjusted by Clause 6.
Notices

23.   Any notice to be served under this Agreement must be in writing and will
be deemed to be duly served if it is handed personally to the Secretary of the
Company or to the CFO as the case may be, or if it is sent by registered post to
the address at the head of this Agreement. A notice sent by post will be deemed
to be served on the third day following the date on which it was posted.

Previous Agreements Superseded

24.   This Agreement supersedes as of January 1st 2008 all prior contracts and
understandings between the parties relating to its subject-matter except that
benefits earned or accrued under any such prior contracts are not extinguished
or affected.

Waiver

25.   No change or attempted waiver of any of the provisions of this Agreement
will be binding unless in writing and signed by the party against whom it is
sought to be enforced.

Severability of Provisions

26.   Whenever possible, each provision of this Agreement must be interpreted in
such manner as to be effective and valid. If any provision of this Agreement or
the application of it is prohibited or is held to be invalid, that prohibition
or invalidity will not affect any other provision, or the application of any
other provision which can be given effect without the invalid provision or
prohibited application and, to this end, the provisions of this Agreement are
declared to be severable.

Headings

27.   The headings are included for convenience only and have no legal effect.

Applicable Law and Jurisdiction

28.   This Agreement must be construed and the legal relations between the
parties determined in accordance with the laws of the Cayman Islands to the
jurisdiction of the courts of which the parties agree to submit. The CFO
appoints David Scott (“the Process Agent”) whose address at the date of this
Agreement is P.O. Box 1114 GT, Grand Cayman, Cayman Islands, his agent in the
Cayman Islands to receive on his behalf service of copies of the summons and
complaint and any other process which may be served

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    in any action or proceeding under this Agreement. Service may be made by
personally serving the Process Agent at the Process Agent’s above address, with
a copy to the CFO at his address above, and the CFO irrevocably authorises and
directs the Process Agent to accept such service on his behalf.

                 
EXECUTED for and on behalf of
    )     CONSOLIDATED WATER CO. LTD.    
CONSOLIDATED WATER CO. LTD.
    )          
By:
    )          
in the presence of:

    )          
 
    )          
/s/ Tracey Ebanks
    )     /s/ Frederick W. McTaggart    
 
Witness
    )    
 
   
 
               
EXECUTED by DAVID SASNETT
    )          
in the presence of:

    )          
 
    )          
 
    )          
 
    )          
/s/ Douglas Vizzini
    )     /s/ David Sasnett    
 
               
Witness
          DAVID SASNETT    

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