<PAGE>

                                                                   EXHIBIT 10.40

================================================================================

                                   GUARANTEE

                                       by

                            DESALCO (BARBADOS) LTD.

                                  IN FAVOUR OF

                        SCOTIABANK (CAYMAN ISLANDS) LTD.

                       Dated the 7th day of February, 2003

================================================================================

<PAGE>

                               TABLE OF CONTENTS

<TABLE>
<S>                                                                                 <C>
SECTION 1. DEFINITIONS AND INTERPRETATION ......................................     2
         1.1 General Definitions ...............................................     2
         1.2 Interpretation ....................................................     3
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 ...................................................     5
         3.1 Change in Guaranteed Obligations ..................................     5
         3.2 Waiver of Defenses ................................................     5
         3.3 Immediate Recourse ................................................     6
         3.4 Non-Competition ...................................................     6
         3.5 Bankruptcy or Liquidation of the Borrower .........................     6
         3.6 Appropriation of Moneys ...........................................     6
         3.7 Reinstatement .....................................................     7
         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 Bank'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 ..................................................    10
         7.3 No Waiver; Remedies Cumulative ....................................    10
         7.4 Governing Law and Jurisdiction ....................................    10
         7.5 Submission ........................................................    10
         7.6 Judgments and Immunity ............................................    11
         7.7 Benefit of Guarantee ..............................................    11
         7.8 Expenses ..........................................................    12
         7.9 Amendment or Waiver ...............................................    12
         7.10 Counterparts .....................................................    12
         7.11 Set-off ..........................................................    12
         7.12 Currency Indemnity ...............................................    12
</TABLE>

<PAGE>

         THIS GUARANTEE ("GUARANTEE"), dated the 7th day of February, 2003, is
made as a deed by:

(1)      DESALCO (BARBADOS) LTD., a company organized and existing under the
laws of Barbados ("GUARANTOR");

in favour of

(2)      SCOTIABANK (CAYMAN ISLANDS) LTD. (the "BANK").

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

         WHEREAS:

         (A)      Pursuant to a loan agreement dated this day between the
Borrower and the Bank, the Bank has agreed, subject to the terms and conditions
therein contained, to make certain loans to the Borrower (the "Loan Agreement").

         (B)      It is a condition of the first disbursement of the Loans that
the Guarantor has entered into this Guarantee.

         (C)      The Guarantor will obtain benefits as a result of the Loans
made to the Borrower under the Loan Agreement and, accordingly, desires to
execute and deliver this Guarantee in order to satisfy the condition described
in recital (B) above.

         (D)      To induce the Bank to make the Loans and, in particular, the
first disbursement of the Loans, the Guarantor has agreed to guarantee certain
obligations of the Borrower.

         (I)      The Guarantor has been provided with, and acknowledges receipt
of, copies of the executed Financing Documents.

         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 Annex A to the Loan Agreement.

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

         "FINANCING DOCUMENTS" collectively, (i) the Loan Agreement, (ii) the
Security Documents, and (iii) the Fee Letter.

         "GUARANTEED OBLIGATIONS" all liabilities and obligations of the
Borrower to the Bank under or in respect of the Financing Documents, and in any
capacity, irrespective of whether such liabilities and obligations:

<PAGE>

                           (i)      are present or future;

                           (ii)     are actual, contingent or otherwise;

                           (iii)    are at any time ascertained or
                                    unascertained;

                           (iv)     are owed or incurred by or on account of the
                                    Borrower alone, or severally or jointly with
                                    any other person;

                           (v)      are owed or incurred as principal, interest,
                                    fees, charges, taxes, duties or other
                                    imports, 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 and to the maximum extent that such security is enforceable
against the Guarantor, without, in either case, causing the Guarantor to
contravene any applicable legislation restricting the giving of guarantees or
which would otherwise render this Guarantee unenforceable.

         1.2 Interpretation.

         The rules of interpretation set forth in Section 18.13 of the Loan
Agreement shall apply to this Guarantee.

         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 Bank, 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

<PAGE>

                  (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 on or in connection with the payment of any
and all amounts due under this Guarantee.

         (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 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 Bank 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 Bank so requires, the
Guarantor shall deliver to the Bank 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 Bank may apply any amounts received by it or recovered under:

         (a)      any Security Document; and

<PAGE>

         (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 Defenses.

         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 defense 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 Bank 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 Loans 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

<PAGE>

         (h)      any total or partial failure to realize the value of, or any
release, discharge, exchange or substitution of, any security held by the Bank
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 Bank
(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 Bank under
the Financing Documents. The Guarantor shall hold in trust for, and forthwith
pay or transfer to, the Bank 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 Bank 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 Bank against the
Borrower pursuant to the Financing Documents. The Bank 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 Bank 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 Bank.

         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 Bank in respect of any amounts owing to the
Guarantor by the Borrower on any account whatsoever, but instead shall give the
Bank 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.

         Until all of the Guaranteed Obligations have been irrevocably paid in
full, the Bank (or any trustee, agent or other person acting on its behalf) may
refrain from enforcing any other moneys, security or rights held or received by
the Bank (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.

<PAGE>

         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 Bank (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 Bank, nor shall
such collateral or other security held by the Bank 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 Bank from and against any loss, cost or
damage incurred by the Bank 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 Bank or any other Person), the amount of such loss being
limited to the amount that the Bank 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 Bank that as of the date
of this Guarantee and on each Drawdown Date:

         (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)      it has duly executed this Guarantee and this Guarantee
constitutes its valid and legally binding obligations;

<PAGE>

         (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; 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 Charter;

         (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 Bank's Reliance.

         The Guarantor acknowledges that it makes the representations in Section
5.1 (Representations and Warranties) with the intention of inducing the Bank to
enter into this Guarantee and the Financing Documents and that the Bank 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 Bank'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 Bank 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 Bank 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:

<PAGE>

         (a)      when requested by the Bank, do or cause to be done anything
which aids the exercise of any power, right or remedy of the Bank 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 Bank 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; except that all
notices and other communications to any Agent shall not be effective until
actually received.

         (c)      The Guarantor acknowledges and agrees that any agreement of
the Bank to receive certain notices by telephone and facsimile is solely for the
convenience and at the request of the Guarantor. The Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Guarantor to give such notice and the Bank shall

<PAGE>

not have any liability to the Guarantor or other Person on account of any action
taken or not taken by the Bank 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 Bank or the holder of any Note
in exercising any right, power or privilege hereunder or under any other
Financing Document and no course of dealing between the Guarantor and the Bank
or the holder of any Note 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 Bank or the holder of any Note 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 Bank shall be
cumulative and not alternative.

         7.4 Governing Law and Jurisdiction.

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

         7.5 Submission.

         (a)      For the exclusive benefit of the Bank, the Guarantor
irrevocably agrees that the courts of Barbados 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 Barbados 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 Barbados, save with
respect to any counterclaim asserted by the Guarantor in the course of
proceedings previously commenced by the Bank. Nothing contained in this Section
7 shall limit the right of the Bank to take Proceedings against

<PAGE>

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.

         (c)      The Guarantor unconditionally and irrevocably agrees, with
respect to any final order, judgment or award in any Proceedings made pursuant
to this Guarantee and not subject to appeal (a "JUDGMENT"), that:

                  (i)      the Judgment shall be conclusive and binding upon it;

                  (ii)     it shall be bound by and recognize the Judgment in
                           any jurisdiction;

                  (iii)    to the extent permitted by law, it shall not claim,
                           invoke on its behalf or for its benefit any right it
                           may have under the laws of Barbados or any other
                           state or jurisdiction, to prevent, delay, hinder,
                           nullify or in any other way obstruct the enforcement
                           or execution of the Judgment; and

                  (iv)     to the extent permitted by law, it shall not, and
                           shall irrevocably waive any right to, challenge the
                           Judgment on any ground or the enforcement or
                           execution of the Judgment in any jurisdiction (other
                           than by way of appeal in the original 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 Bank to any other person,
corporate or otherwise, to whom the Bank has assigned all or part of its rights
under the Loan Agreement.

<PAGE>

         7.8 Expenses.

         The Guarantor shall be liable to pay to the Bank the costs and expenses
incurred by the Bank 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.

         7.9 Amendment or Waiver.

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

         7.10 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.

         7.11 Set-off.

         The Guarantor authorizes the Bank 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 Bank or any or its subsidiaries and affiliates in
satisfaction of any sum which is due and payable from the Guarantor to the Bank
under this Guarantee and remains unpaid; for this purpose, the Bank 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.

         7.12 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 Bank from and against any loss it suffers
or incurs as a result of any discrepancy between (i) the rate of exchange used
for such purpose to convert the sum in question from the first currency into the
second currency, and (ii) the rate or rates of exchange at which the Bank may in
the ordinary course of business purchase the first currency with the second
currency upon receipt of a sum paid to it in satisfaction, in whole or in part,
of any such order, judgment, claim or proof.

                                  *      *

<PAGE>

 IN WITNESS WHEREOF, this Guarantee has been executed as a deed by the parties
 hereto and is delivered on the date stated at the beginning of this Guarantee.

                                           DESALCO (BARBADOS) LTD.

                                           By: /s/ Mr. Jeffrey Parker
                                               ---------------------------------
                                               Name:  Mr. Jeffrey Parker
                                               Title: Chief Executive Officer

                                           Notice Address:
                                           Address:
                                           Consolidated Water Co. Ltd.
                                           P.O. Box 1114GT
                                           Trafalgar House
                                           Grand Cayman

                                           Attention: Mr. Jeffrey Parker

                                           Telephone No.: 345 945-4277
                                           Telecopier No. 345 949-2957

                                           SCOTIABANK (CAYMAN ISLANDS) LTD.

                                           By: /s/ Mr. Bruce John
                                               ---------------------------------
                                               Name: Mr. Bruce John
                                               Title: Commercial Banking Manager

                                           Notice Address:
                                           Address:
                                           Scotiabank (Cayman Islands) Ltd.
                                           Scotia Centre
                                           Cardinal Avenue
                                           P.O. Box 689
                                           Grand Cayman

                                           Attention: Commercial Banking Manager

                                           Telephone No.: 345 949-7666
                                           Telecopier No. 345 949-5130