Document:

<PAGE>   1
                                                                   Exhibit 10.38

                                   DEBENTURE

                                                                         [CAYMAN
                                                                         ISLANDS
                                                                            $2
                                                                          Stamp]

     THIS DEBENTURE is made the first day of June 1979.

     BETWEEN:                  CAYMAN WATER COMPANY LIMITED a company
                               incorporated and existing under the laws of the
                               Cayman Islands with registered office in George
                               Town, Grand Cayman, Cayman Islands

     DULY RECORDED
THIS 29TH DAY OF JUNE 1979
      VOLUME LXIV
  ENTRY ON 207 TO 265

    /s/                            (hereinafter called "the Borrower")
    -------------------------
    PUBLIC RECORDER                OF THE FIRST PART

          AND:                     THE ROYAL BANK OF CANADA of P.O. Box 245,
                                   George Town, Grand Cayman, Cayman Islands

CERTIFIED A TRUE AND CORRECT
COPY OF THE                        (hereinafter called "the Bank")

    /s/
    -------------------------
    PUBLIC RECORDER                OF THE SECOND PART

          AND:                     PHILIP H. LUSTIG of P.O. Box 434,
                                   Grand Cayman, Cayman Islands

                                   (which shall include his personal
                                   representatives heirs and assigns)

                                   OF THE THIRD PART

          AND:                     CAYMAN PUBLIC UTILITIES LTD. a Cayman
                                   Islands company having its registered
                                   office at George Town, Grand Cayman,
                                   Cayman Islands

                                   (which shall include the nominees and
                                   assigns whomsoever of Cayman Public
                                   Utilities Ltd.)

                                   OF THE FOURTH PART

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

W H E R E A S: -

The Bank has agreed to extend credit facilities to the Borrower to the extent
of CI$200,000.00 upon having the repayment thereof secured with interest
thereon in manner hereinafter appearing.

NOW THIS DEED WITNESSETH as follows:-

1.   In consideration of the said agreement:-

     (a)  The Borrower hereby covenants with the Bank that the Borrower will
          on demand in writing made to the Borrower pay or discharge to the
          Bank all monies and liabilities which shall for the time being (and

<PAGE>   2
                                      -2-

     whether on or at any time after such demand) be due owing or incurred to
     the Bank by the Borrower whether actually or contingently and whether
     solely or jointly with any other person and whether as principal or surety
     including interest discount commission or other lawful charges and expenses
     which the Bank may in the course of its business charge in respect of any
     of the matters aforesaid or for keeping the Borrower's account and so that
     interest shall be computed and compounded according to the usual mode of
     the Bank as well after as before any demand made or judgement obtained
     hereunder and will on such demand also retire all bills or notes which may
     for the time being be under discount with the Bank and to which the
     Borrower is a party whether as drawer acceptor maker or endorser without
     any deduction whatsoever.

(b)  A demand for payment or any other demand or notice under this Debenture may
     be made or given by any manager or officer of the Bank or of any branch
     thereof by letter addressed to the Borrower and sent by registered post to
     or left at the charged property or at the last known place of business or
     abode of the Borrower or at the option of the Bank if the Borrower is a
     company its registered office and if sent by post shall be deemed to have
     been made or given at noon on the third day following the day the letter
     was posted.

(c)  The Bank shall be at liberty from time to time to give time for payment of
     any bills of exchange promissory notes or other securities which may have
     been discounted for or received on account from the Borrower by the Bank or
     on which the Borrower shall or may be liable as drawer acceptor maker
     endorser or otherwise to any parties liable thereon or thereto as the Bank
     in its absolute discretion shall think fit without releasing the Borrower
     or affecting the Borrower's liability under this Debenture or the security
     hereby created.

(d)  The Bank shall on receiving notice that the Borrower has incumbered or
     disposed of the charged property or any part thereof be entitled

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   3
                                      -3-

          to close the Borrower's then current account or accounts and to open a
          new account or accounts with the Borrower and (without prejudice to
          any rights of the Bank to combine accounts) no money paid in or
          carried to the Borrower's credit in any such new account shall be
          appropriated towards or have the effect of discharging any part of the
          amount due to the Bank on any such closed account.

     (e)  This Charge shall be a continuing security to the Bank notwithstanding
          any settlement of account or other matter or thing whatsoever and
          shall not prejudice or affect any security which may have been created
          by any deposit of title deeds or other documents which may have been
          made with the Bank prior to the execution hereof relating to the
          charged property or to any other property or any other security which
          the Bank may now or at any time hereafter hold in respect of the
          moneys hereby secured or any of them or any part thereof respectively.

     (f)  The Bank shall be entitled to apply all or any moneys received by it
          from the Borrower or any person or persons liable to pay the same on
          the Borrower's account to any account of the Borrower with the Bank to
          which the same may be applicable.

2.   For further securing the payment of all sums due or that may become due
     hereunder the Borrower as beneficial owner:-

     (i)  charges by way of first legal charge the land belonging to the
          Borrower comprised within Registration Section West Bay Beach North
          Block 11D Parcel 8 of which the Borrower warrants to the Bank that it
          is the registered proprietor with absolute title and the Borrower
          covenants that it will at its own cost and expense execute stamp
          register and deliver to the Bank a first registered Charge against the
          title to the said Parcel 8 by way of collateral and additional
          security expressed to be supplemental hereto;

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   4
                                      -4-

(ii)  assigns to the Bank all and singular the goods chattels and things
      described in the Schedule hereto together with all additions replacements
      and improvements affixed or attached thereto to hold the same unto and to
      the use of the Bank absolutely subject to the proviso for re-assignment
      and the terms and conditions hereinafter contained AND subject also to the
      right of the Borrower to remain in possession thereof until the Bank's
      security shall have become enforceable and to effect repairs and
      replacements in the ordinary course of business.

(iii) charges by way of first floating security all the undertaking and all
      other assets of the Borrower with the exception of those items contained
      in sub-clauses (i) and (ii) hereof and all its property whatsoever and
      wheresoever both real and personal present and future including its
      uncalled capital for the time being but so that the Borrower shall not be
      at liberty to create any other charge or mortgage which will rank in
      priority to or pari passu with or second or subsidiary to this security or
      to sell the undertaking of the Borrower or any portion thereof or to deal
      with its book or other debts or securities for money otherwise than in the
      ordinary course of its business;

(iv)  assigns to the Bank the goodwill and connection of the business or
      businesses now or at any time during the continuance of this security
      carried on by or for the account of the Borrower and the benefit of all
      licences held in connection therewith excluding any licences or franchises
      granted by the Government of the Cayman Islands.

3.    The charges and assignments hereby made shall rank in point of security
      pari passu with the existing charge bill of sale and floating charge over
      all the assets of the Borrower in favour of Philip H. Lustig as provided
      in an Agreement of even date between Philip H. Lustig (1) the Bank (2) and
      the Borrower (3) as varied from time to time (and so that subject to any
      variation thereto all net sums realised upon enforcement of such
      securities shall be applied as to 75% thereof to the Bank and 25% thereof
      to Lustig) but in priority to a floating charge over the assets of the

[Public Record Office Cayman Islands stamp]
<PAGE>   5
                                     - 5 -

    Borrower in favour of Cayman Public Utilities Ltd., and the said Cayman
    Public Utilities Ltd., as evidenced by its execution of these presents but
    subject to the proviso hereinafter contained hereby subordinates all
    securities presently held by it for the debt owed by the Borrower to it to
    all charges and assignments hereby made or to be made in favour of the Bank
    to the intent that the Bank shall provided that the principal sum secured by
    this Debenture does not exceed CI$200,000.00 or its equivalent in United
    States Dollars always rank as pari passu first chargee of all the assets of
    the Borrower in priority to all security interests present and future of
    Cayman Public Utilities Ltd., and Philip H. Lustig and Cayman Public
    Utilities Ltd., hereby respectively covenant with the Bank that they will
    not without the previous written consent of the Bank advance any further
    sums to the Borrower upon the security of any of the assets of the Borrower.

4.  If:-

    (i)   the Borrower shall acquire any additional land; or

    (ii)  Cayman Public Utilities Ltd., shall call for any fixed charge upon
          any assets of the Borrower pursuant to Clause 7 of a Deed of
          Assignment made the 1st day of December 1978 between First Cayman
          Building and Development Limited the said Cayman Public Utilities
          Ltd., and the Borrower recorded on 19th January 1979 at Volume LXIII
          Entry No. 260 Folio 232; or

    (iii) the Bank shall by written notice to the Borrower require a fixed
          charge upon any assets of the Borrower not being stock in trade book
          debts or any other current or circulating asset;

    then the Borrower shall at its own expense grant to the Bank and to Philip
    H. Lustig first fixed charges on such land or asset aforesaid which charges
    shall rank pari passu with each other in accordance with the terms of the
    agreement of even date referred to in Clause 3 of this Debenture or any
    variation of such agreement but which shall rank in priority to all charges
    present and future in favour of Cayman Public Utilities Ltd., provided
    always that the amounts thereby secured to the

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   6
                                     - 6 -

    Bank and to Philip H. Lustig shall not in the aggregate exceed CI$400,000.00
    or the equivalent in United States Dollars; and Cayman Public Utilities Ltd.
    hereby consents to the subordination as aforesaid of its charges present and
    future.

5.  Notwithstanding any other provisions of this Debenture all sums owing and
    other monies payable hereunder shall become immediately due and payable and
    the first floating security hereby created shall become fixed and all unpaid
    interest and any other monies secured hereby or by any collateral or
    additional charges or securities hereto shall become immediately due and
    payable and in addition to all other rights or powers statutory or otherwise
    which will also then arise and become immediately exercisable the Bank shall
    have power to appoint any person or persons to be a Receiver and Manager of
    the property hereby charged or any part thereof at such remuneration and on
    such basis and on such other terms and conditions as the Bank shall specify
    in its appointment and to remove any Receiver and Manager so appointed and
    appoint another or others in his or their place as follows:-

    (i)   If the Borrower shall default in the payment of any monies due or
          owing hereunder or

    (ii)  If any representation or warranty made in or in connection with this
          Debenture or the execution and delivery thereof or in any document or
          certificate furnished pursuant hereto shall prove at any time to have
          been incorrect in any material respect or

    (iii) If the Borrower shall default in the performance or observance of an
          agreement covenant stipulation or obligation contained or implied in
          this Debenture whether negative or otherwise (other than obligations
          in respect of the payment of any monies hereunder) or

    (iv)  If by or under the authority of any Government the management of the
          Borrower or its authority in the conduct of its business is curtailed
          to the point of making it effectively inoperative by any seizure or
          intervention or proceedings of any nature or

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   7
                                      -7-

   (v)    If a judgement against the Borrower for any sum exceeding One Hundred
          Cayman Islands Dollars (CI$100.00) or an order involving the payment
          by the Borrower of One Hundred Cayman Islands Dollars (CI$100.00) or
          more without the necessity of a judgement shall be obtained in any
          Court and shall remain unsatisfied for seven (7) days or

   (vi)   If a distress or execution shall be levied or enforced upon or against
          any of the chattels or property of the Borrower and shall not be
          satisfied within seven (7) days of the levy or enforcement of such
          distress or execution or

   (vii)  If the Borrower makes or attempts to make any alteration to the
          provisions of its Memorandum or Articles of Association which might in
          the opinion of the Bank affect its interests hereunder or shall fail
          or neglect to comply with any or all of the provisions of the
          Companies Law 1960 or any statutory modification or re-enactment
          thereof or any other of the laws of the Cayman Islands in so far as
          the same may relate to it or

   (viii) If the Borrower shall without the written consent of the Bank assign
          any of its book debts or pledge any of its assets or create or purport
          or attempt to create any charge mortgage or incumbrance ranking or
          which may by any means be made to rank pari passu with or in priority
          to this Debenture or second or subsidiary to this Debenture or

   (ix)   If an order is made or an effective resolution is passed for the
          winding up of the Borrower except for the purpose of a reconstruction
          or amalgamation the terms of which have been previously approved in
          writing by the Bank or

   (x)    If an incumbrancer takes possession or a receiver is appointed of any
          part of the assets of the Borrower or

   (xi)   If any event shall occur or circumstances exist by which all or any
          part of the security for the indebtedness of the Borrower to Philip
          H. Lustig shall become enforceable or

                  [PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   8
                                     - 8 -

        (xii)     If the Borrower ceases or threatens to cease to carry on its
                  business or substantially the whole of its business or

        (xiii)    If the Borrower shall have sold or (save as may be provided in
                  any license or franchise from the Government of the Cayman
                  Islands) agreed to sell the whole of its undertaking or any
                  substantial port thereof otherwise than with the previous
                  written consent of the Bank or

        (xiv)     If the Borrower is unable to pay its debts within the meaning
                  of Section 92 of the Companies Law 1960 or any statutory
                  modification or re-enactment thereof or

        (xv)      If at any time the Bank shall in good faith determines that a
                  material adverse change in the financial condition of the
                  Borrower has occurred and that the Borrower is unlikely to be
                  able to meet any of is obligations hereunder or

        (xvi)     If there shall be any breach or default whatsoever of any of
                  the express or implied terms and conditions of any of the said
                  collateral or additional charges or securities hereto or

        (xvii)    If by or as a result of the act default or omission of the
                  Borrower or any third party the Bank in its sole discretion is
                  of the opinion that its security is threatened or in jeopardy
                  or might become so.

6.      In addition to all other powers vested in him by Law or otherwise a
        Receiver and Manager shall have the following powers:-

        (i)       To receive the rents and profits of the property hereby
                  charged from the present and future tenants users and
                  occupiers thereof and in the case of the non-payment thereof
                  to use all and any lawful remedies for recovering and
                  obtaining payment of the same and to do all things necessary
                  and proper for recovering and receiving the same as fully and
                  effectually as the Borrower could do

                  [PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   9
                                      -9-

(ii)     The Borrower by these presents directs the present and future tenants
         users and occupiers of the property hereby charged to pay the said rent
         and profits of the same to the Receiver and Manager when so appointed

(iii)    The receipt of the Receiver and Manager shall be an effectual discharge
         to such tenants users and occupiers for such rents and profits

(iv)     The Receiver and Manager is hereby authorised to make such allowances
         to and arrangements and compromises with such tenants users and
         occupiers as he or they shall think fit and to give notice to quit take
         actions for ejectment and recovery of possession of any buildings
         assets or otherwise and to relet such buildings assets or any part
         thereof from time to time to such persons and upon such terms and
         conditions as he or they may consider reasonable

(v)      To take possession of collect and get in any property hereby charged
         and for that purpose to take any proceedings in the name of the
         Borrower or otherwise as may seem expedient

(vi)     To carry on manage or concur in carrying on and managing the business
         of the Borrower or any part thereof and for any of those purposes to
         raise or borrow any money that may be required upon the security of the
         whole or any part of the property hereby charged

(vii)    To appoint managers accountants lawyers agents officers servants and
         workmen for any of the aforesaid purposes at such salaries or
         remuneration and for such periods and on such terms as he or they may
         determine

(viii)   To sell or concur in selling and to let or concur in letting and to
         accept surrenders of leases or tenancies of all or any of the property
         hereby charged and to carry any such sale letting or surrender into
         effect by conveying transferring leasing letting or accepting
         surrenders in the name and on behalf of the Borrower or other the
         estate owner and any such sale may be for cash

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   10
                                      -10-

          debentures or other obligations shares stock or other valuable
          consideration and may be payable in a lump sum or by installments
          spread over such period as the Bank shall think fit and plant
          machinery and other fixtures may be severed and sold separately from
          the premises containing them without the consent of the Borrower being
          obtained thereto

    (ix)  To make any arrangement or compromise which he or they shall think
          expedient in the interests of the Bank

    (x)   To make and effect all repairs improvements and insurances and renew
          such of the plant machinery chattels and effects of the Borrower as
          shall be worn out lost or otherwise become unserviceable or as he or
          they shall think fit

    (xi)  To do all such other acts and things as may be considered to be
          incidental or conducive to any of the matters and powers aforesaid
          and which he or they may and can lawfully do as agent for the
          Borrower.

7.  Any and all monies received by such Receiver and Manager shall be applied
    as follows:-

    (i)   In the discharge of all rents and taxes;

    (ii)  In satisfying all encumbrances if any ranking in priority to this
          security;

    (iii) In paying his or their remuneration costs and expenses;

    (iv)  In paying all monies due to the Bank and the said Philip H. Lustig in
          accordance with the agreement of even date between Philip H. Lustig
          (1) the Bank (2) and the Borrower (e) as the same may from time to
          time be varied;

    (v)   In paying the balance if any to the Borrower or any subsequent
          chargee of which such Receiver and Manager has notice.

8.  A Receiver and Manager appointed by the Bank shall be the agent of the
    Borrower and the Borrower shall alone be liable for his or their acts
    defaults or remuneration.

9.  The Borrower hereby irrevocably appoints the Bank and any Attorney of the
    Bank and any Receiver and Manager appointed pursuant to Clause 5

                  [PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   11
                                      -11-

     hereof to be the Attorney of the Borrower in the name and on behalf of the
     Borrower to execute and give any assurances and other things which the
     Borrower ought to execute and do under the provisions hereof and generally
     to use the name of the Borrower in the exercise of all or any of the powers
     hereby conferred on the Bank or any Receiver and Manager appointed by it.

10.  After the security constituted by this Debenture has become enforceable the
     Borrower shall from time to time and at all times thereafter execute and do
     all such assurances and things as the Bank or any Receiver and Manager
     appointed by it may require for facilitating the realisation of the
     property hereby charged and for exercising all the powers authorities and
     discretions hereby conferred on the Bank and any Receiver or Receivers
     appointed by it and in particular the Borrower shall:-

     (i)   execute assignments transfers or any other assurances of the property
           hereby charged as the Bank or any Receiver or Receivers appointed by
           it may require to the Bank or to its nominee

     (ii)  perform or cause to be performed all acts and things requisite or
           desirable for the purpose of giving effect to the exercise of the
           said powers and authorities and

     (iii) give all notices orders and directions which the Bank or any Receiver
           and Manager appointed by it may think expedient.

11.  The Bank shall not nor shall any Receiver and Manager appointed by it by
     reason of the Bank or such Receiver and Manager entering into possession of
     the property hereby charged or any part thereof be liable to account as
     mortgagee in possession for anything except actual receipts or be liable
     for any loss upon realisation or for any default or omission for which a
     mortgagee in possession might be liable.

12.  No purchaser chargee or other person or company dealing with the Bank or
     with any Receiver and Manager appointed by it or with his its or their
     attorneys or agents shall be concerned to inquire whether the powers
     exercised or purported to be exercised have become exercisable

[PUBLIC RECORD OFFICE CAYMAN ISLAND STAMP]

<PAGE>   12
                                      -12-

     or whether any money remains due actually or contingently on the security
     of this Debenture or as to the necessity or expediency of the stipulations
     and conditions subject to which any sale shall have been made or otherwise
     as to the propriety or regularity of such sale calling in collection or
     conversion or to see to the application of any money paid to the Bank and
     in the absence of malafides on the part of such purchaser chargee or other
     person or company such dealing shall be deemed so far as regards the safety
     and protection of such purchaser chargee person or company to be within the
     powers hereby conferred and to be valid and effectual accordingly. Provided
     that this Clause shall be without prejudice to all and any rights and
     remedies of the Borrower and all persons or companies claiming through the
     Borrower for any impropriety on the part of the Bank or any Receiver
     Manager Attorney or Agent as aforesaid.

13.  The Borrower hereby represents and warrants to the Bank that it is a duly
     organised corporation existing in good standing under the Laws of the
     Cayman Islands and that it is duly qualified to do business wherever
     necessary to carry on its present operations and that the making and
     performance of this Debenture is within its powers having been duly
     authorised by all necessary governmental and corporate approvals and does
     not contravene any law or any contractual restriction binding on the
     Borrower and that this Debenture is a legal valid and binding obligation of
     the Borrower enforceable against the Borrower in accordance with its terms
     and that there are no pending or threatened actions or proceedings before
     any court or administrative agency which may materially adversely affect
     the Borrower or its financial conditions and operations.

14.  The Borrower hereby further covenants with the Bank in respect of the
     property hereby charged as follows:-

     (i)  To insure and at all times keep insured by way of an all risks
          insurance policy in the names of the Borrower and the Bank against
          fire earthquake windstorm riot and fire arising therefrom

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   13
                                      -13-

          respectively accidental damage theft or such other risks as the Bank
          may require all property of the Borrower of an insurable nature to its
          full insurable value to the satisfaction of the Bank in an insurance
          office acceptable to the Bank and on demand to deliver to the Bank all
          such policies of insurance and all receipts and vouchers for the
          payment of premiums and the proceeds of any such insurance will be
          payable to the Bank whose receipt shall be a good and sufficient
          discharge therefor and may at the option of the Bank be applied
          towards the replacement of the property or repayment of any moneys
          owed by the Borrower hereunder

(ii)      At all times during the continuance of this Debenture to keep up and
          maintain and preserve all the property of the Borrower in good and
          merchantable order and condition

(iii)     Save in the ordinary course of use or enjoyment or for the purpose of
          effecting repairs not to part with the possession of nor to remove any
          property of the Borrower from the premises where the same are usually
          stored or kept nor in any event to cause or permit the same to be
          removed from the Cayman Islands without the consent in writing of the
          Bank

(iv)      Not to transfer lease let or hire or part with the possession or
          create or suffer to be created any mortgage or charge or lien or make
          any assignment on or of the property hereby charged or any of the
          property of the Borrower without the consent in writing of the Bank

(v)       To pay to the Bank on demand all costs charges and expenses incurred
          or to be incurred by the Bank in relation to those presents or any
          default hereunder or the protection or enforcement of any of the
          rights of the Bank hereunder together with the stamp duty and
          recording fees hereon

(vi)      That the Bank shall be entitled by its officers servants or agents at
          all times during the continuance of this Debenture with or without
          workmen agents or servants to enter upon any premises of

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   14
                                      -14-

       the Borrower or any part or parts thereof and to view search and see the
       state and condition of the property of the Borrower or any part or parts
       thereof with full and free power of ingress egress and regress for such
       purpose and of all decays defects and wants of preservation and
       maintenance found upon such inspection to give or leave notice in writing
       to the Borrower which shall forthwith make good repair and supply
       according to any notice given hereunder so as at all times to keep up
       maintain and preserve the property of the Borrower in good order and
       condition

(vii)  To carry on its business in a proper and efficient manner

(viii) Not to sell or otherwise dispose of the whole or any substantial part of
       its undertaking or assets without the consent in writing of the Bank

(ix)   At all times during the continuance of this security to pay all licence
       duties assessable on any of the property hereby charged and the rents
       rates and taxes of the several premises wherein such property or any part
       thereof shall be and to keep such property from being distrained for
       rents rates or taxes or from being taken under any execution and at all
       times to produce on demand to the Bank the receipts for such rents rates
       and taxes

(x)    To furnish to the Bank a balance sheet profit and loss account and
       trading account showing the true position of the Borrower's affairs in
       every year certified by a Chartered Account approved by the Bank or other
       the auditor for the time being of the Borrower approved by the Bank and
       also on demand from time to time to furnish such other information
       respecting the monthly trading and operating figures as well as the
       assets and liabilities of the Borrower as the Bank may require

(xi)   So long as any money remains owing to the Bank hereunder not to declare
       any dividend in favour of its shareholders without the prior written
       consent of the Bank which consent shall not be unreasonably withheld.

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   15
                                     - 15 -

15.  It shall be lawful for but not obligatory on the Bank to advance and pay
     all sums of money necessary for the purpose of remedying any breach or
     breaches of covenants or obligations whether imposed on the Borrower under
     the provisions of this Debenture or any collateral or additional charges
     or securities hereto or implied by law and all monies so paid and all
     costs and expenses incurred by the Bank in relation to any inspection and
     notice or the repairs or amendments mentioned in paragraph 14 (vi) hereof
     shall be repayable on demand and in the meantime shall be a charge on the
     property of the Borrower in addition to the other monies hereby secured
     and shall bear interest at the prevailing applicable interest rate
     computed from the time or times of paying or advancing the same.

16.  No neglect omission or forebearance on the part of the Bank to take
     advantage of or enforce any right or remedy arising out of any breach or
     non-observance of any covenant or condition herein or in any collateral or
     additional charges or securities hereto contained or implied shall be
     deemed to be or operate as a general waiver of such covenant or condition
     or the right to enforce or take advantage of the same in respect of any
     breach or non-observance thereof either original or recurring.

17.  This Debenture is in addition to and not in substitution for any other
     security held by the Bank for all or any part of the money secured
     hereunder and it is understood and agreed that the Bank may pursue its
     remedies thereunder or hereunder concurrently or successively at its
     option and any judgement or recovery hereunder or under any other security
     held by the Bank for the monies secured hereunder shall not affect the
     rights of the Bank to realise upon this or any other such security and any
     default in the terms of this Deed shall constitute a default in the terms
     of any other security held by the Bank and vice versa.

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   16
                                      -16-

18.  This Debenture shall at the Borrower's expense be impressed in the first
     instance with stamp duty to cover a principal sum of together with interest
     thereon but the Bank shall be at liberty and is hereby empowered at any
     time or times hereafter (without any further licence or consent on the part
     of the Borrower) to impress additional stamp duty hereon or on any
     collateral or additional charges or securities hereto at the Borrower's own
     cost and expense to cover any sum or sums by which the Borrower's
     indebtedness to the Bank may exceed the said amount and in the event of
     such upstamping as aforesaid the Borrower hereby covenants and agrees with
     the Bank that this Debenture and the property hereby charged and the
     properties comprised in any collateral or additional charges or securities
     hereto shall stand security for such additional sum or sums and be charged
     with the payment thereof and all other monies including interest due
     hereunder.

19.  If and when all sums due or that may become due hereunder and all interest
     and all other charges have been paid to the Bank in accordance with the
     terms hereof the Bank will at the request and cost of the Borrower
     appropriately discharge or cause satisfaction to be expressed therefor in
     respect of this Debenture and all other securities held by the Bank
     pursuant to this Debenture.

20.  The expression the Bank hereinbefore used shall include the Bank's assigns
     whether immediate or derivative and any appointment or removal under Clause
     5 hereof may be made by writing signed or sealed by any of such assigns and
     the Borrower hereby irrevocably appoints each of such assigns to be its
     attorney in the terms and for the purposes in Clause 9 hereinbefore set
     forth.

21.  This Debenture and any collateral or additional charges or securities
     hereto shall be governed and construed solely according to the Laws of the
     Cayman Islands.

      [PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   17
                                      -17-

22.  (i)   Phillip H. Lustig and Cayman Public Utilities Ltd., are parties to
           this Debenture only for the purposes expressed herein and neither of
           them shall be obligated by any covenant agreement or provision herein
           by which they are not expressly stated to be obligated

     (ii)  Neither Clause 18 nor any other provision of this Debenture shall be
           construed as a consent on the part of Cayman Public Utilities Ltd.,
           to subordinate all or any part of its security from the Borrower to
           the securities of the Bank and Philip H. Lustig to the extent that
           the principal amounts secured by the said charges shall in the
           aggregate exceed CI$400,000.00 or the equivalent in United States
           Dollars

     (iii) Cayman Public Utilities Ltd., hereby acknowledges and consents to the
           arrangements between the Bank and Philip H. Lustig by which the
           respective indebtedness of the Borrower to each of them and the
           security therefor shall be held by the Bank with such indebtedness as
           the Bank and Philip H. Lustig may from time to time agree

     (iv)  The Bank acknowledges that it has received a copy of the Letter of
           Intent dated 13th October 1978 between the Cayman Islands Government
           and the Borrower. Nothing contained in the said Letter of Intent or
           in the Legislation or franchise referred to therein shall constitute
           a breach of this Debenture or entitle the Bank to enforce its
           security or accelerate repayment of any part of the indebtedness of
           the Borrower.

23.  The Bank expressly reserves the right to consolidate this Debenture with
     any collateral or additional charges or securities hereto notwithstanding
     any statutory provisions to the contrary.

                                S C H E D U L E
                                ---------------

The goods chattels and things of the within Borrower comprised in the attached
Inventory thereof as initialled by and on behalf of the within Borrower

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   18
                                      -18-

IN WITNESS WHEREOF CAYMAN WATER COMPANY LIMITED and CAYMAN PUBLIC UTILITIES
LTD., have caused their respective Common Seals to be hereunto affixed by and
this Debenture to be signed by their duly authorised persons in that behalf and
PHILIP H. LUSTIG has hereunto set his hand and affixed his seal the day and
year first above written.

THE COMMON SEAL of CAYMAN WATER COMPANY    )      CAYMAN WATER COMPANY LIMITED
                                           )
LIMITED was hereunto affixed by            )
                                           )
C. Flowers, L. Downer and by               )      Per: /s/ C. Flowers
                                           )      -----------------------------
in the presence of:-                       )                           Director
                                           )
 /s/ illegible                             )      Per: /s/ L. Downer
------------------------------------------ )      -----------------------------
Witness                                                                Director

THE COMMON SEAL of CAYMAN PUBLIC UTILITIES )      CAYMAN PUBLIC UTILITIES LTD.
                                           )
LTD., was hereunto affixed by              )
                                           )
                                    and by )      Per:  /s/ illegible
                                           )      ----------------------------
                                           )                           Director
in the presence of:-                       )
                                           )
 /s/ illegible                             )      Per: /s/ illegible
------------------------------------------ )      ----------------------------
Witness                                                               Secretary

SIGNED, SEALED and DELIVERED by the said   )
                                           )
PHILIP H, LUSTIG in the presence of:-      )
                                           )
 /s/ illegible                             )      /s/ PHILIP H. LUSTIG
------------------------------------------ )      ----------------------------
Witness                                           PHILIP H. LUSTIG

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   19
                                      -19-

I,               of George Town, Grand Cayman make oath and say:-

1.   The foregoing Deed bearing date the 1st day of June One Thousand Nine
     Hundred and Seventy Nine between CAYMAN WATER COMPANY LIMITED ("the
     Borrower") of the first part, THE ROYAL BANK OF CANADA ("the Bank") of the
     second part, PHILIP H. LUSTIG of the third part and CAYMAN PUBLIC UTILITIES
     LTD., of the fourth part was made by the Borrower on the 15th day of May
     One Thousand Nine Hundred and Seventy Nine.

2.   I was present and did see L. Downer and C. Flowers, Director and Secretary
     respectively of the Borrower affix the Common Seal of the Borrower to the
     said Deed and sign the same as and for the proper act and deed of the
     Borrower and execute acknowledge and deliver the said Deed for the purposes
     therein mentioned on the 15th day of May One Thousand Nine Hundred and
     Seventy Nine between the hours of four and five in the afternoon at George
     Town, Grand Cayman, Cayman Islands.

3.   The Borrower has its registered office at George Town, Grand Cayman, Cayman
     Islands and is a company duly incorporated and existing under the laws of
     the Cayman Islands.

4.   That the name            subscribed as a witness attesting to the due
     execution of the said Deed by the Borrower is of the proper handwriting of
     me this deponent and I reside at George Town, Grand Cayman and am an
     attorney.

                                                  /s/ illegible
                                                  ------------------------------

SWORN at George Town, Grand Cayman this 18th day of May One Thousand Nine
Hundred and Seventy Nine.
                                                  /s/ illegible
                                                  ------------------------------
                                                  Justice of the Peace

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   20
                                      -20-

I, Anthony D                of George Town make oath and say;-

1.   The foregoing Deed bearing date the 1st day of June One Thousand Nine
     Hundred and Seventy Nine between CAYMAN WATER COMPANY LIMITED ("the
     Borrower") of the first part, THE ROYAL BANK OF CANADA ("the Bank") of the
     second part, PHILIP H. LUSTIG of the third part and CAYMAN PUBLIC
     UTILITIES LTD., of the fourth part was made by the said PHILIP H. LUSTIG
     on the 12th day of April One Thousand Nine Hundred and Seventy Nine.

2.   I was present and did see the said PHILIP H. LUSTIG sign, seal and deliver
     the said Deed as and for his proper act and deed and execute acknowledge
     and deliver the said Deed for the purposes therein mentioned on the 12th
     day of April One Thousand Nine Hundred and Seventy Nine between the hours
     of ten and         in the morning at George Town.

3.   The said PHILIP H. LUSTIG is a businessman and resides at
     Grand Cayman.

4.   That the name A. D            subscribed as a witness attesting to the due
     execution of the said Deed by the said PHILIP H. LUSTIG is of the proper
     handwriting of me this deponent and I reside at George Town and am an
     attorney.

                                                     /s/ illegible
                                                     -------------------------

SWORN at George Town this day of                     One Thousand Nine Hundred
and Seventy Nine.

                                                     /s/ illegible
                                                     -------------------------
                                                     justice of the Peace

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   21
                                      -21-

I,               of George Town, Grand Cayman make oath and say:-

1.   The foregoing Deed bearing date the 1st day of June One Thousand Nine
     Hundred and Seventy Nine between CAYMAN WATER COMPANY LIMITED ("the
     Borrower") of the first part, THE ROYAL BANK OF CANADA ("the Bank") of the
     second part, PHILIP H. LUSTIG of the third part and CAYMAN PUBLIC
     UTILITIES LTD., of the fourth part was made by the said CAYMAN PUBLIC
     UTILITIES LTD., on the    day of May One Thousand Nine Hundred and Seventy
     Nine.

2.   I was present and did see              and           , Director and
     Secretary respectively of the said CAYMAN PUBLIC UTILITIES LTD., affix the
     Common Seal of CAYMAN PUBLIC UTILITIES LTD., to the said Deed and sign the
     same as and for the proper act and deed of the said CAYMAN PUBLIC UTILITIES
     LTD., and execute acknowledge and deliver the said DEED for the purposes
     therein mentioned on the 1st day of May One Thousand Nine Hundred and
     Seventy Nine between the hours of      and     in the        at George
     Town, Grand Cayman, Cayman Islands.

3.   The said CAYMAN PUBLIC UTILITIES LTD., has its registered office at George
     Town, Grand Cayman, Cayman Islands and is a company duly incorporated and
     existing under the laws of the Cayman Islands.

4.   That the name           subscribed as a witness attesting to the due
     execution of the said Deed by the Borrower is of the proper handwriting of
     me this deponent and I reside at George Town, Grand Cayman and am a Legal
     Secretary.

                                        /s/ illegible
                                        -------------------------

SWORN at George Town, Grand Cayman this 4th day of May One Thousand Nine
Hundred and Seventy Nine.

                                        /s/ illegible
                                        -------------------------
                                        Justice of the Peace

                  [PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   22
Inventory of items which constitute the charge on Cayman Water Company by Royal
Bank of Canada as collateral on the proposed borrowing of $C1200,000.

Land. 2.692 acres, Plot D11, Parcel 8, West Bay Beach North.

1 Meco Distillation Unit PD2100 M3A
1 Meco Distillation Unit PD2100 M3B (January '79)
1 Meco Distillation Unit PD2100 M3B (February '79)
1 100,000 gallon flexible reservoir
2 500,000 gallon flexible reservoir
1 Plant Building
1 Fibreglass tank and nozzles
1 Pressure Tank, pumps and controls
1 Beachwell and sea pipelines
  Pipeline distribution system

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]<PAGE>   1
                                                                   Exhibit 10.39

THIS DEED is made the 30th day of April 1981

BETWEEN:                 CAYMAN WATER COMPANY LIMITED
-------                  ----------------------------

                         a Company incorporated and existing under the Laws of
                         the Cayman Islands with registered office in George
                         Town, Grand Cayman Islands

                         (hereinafter called "the Borrower")

                         OF THE ONE PART

AND:                     THE ROYAL BANK OF CANADA
---                      ------------------------

                         of P.O. Box 245, George Town, Grand Cayman, Cayman
                         Islands

                         (hereinafter called "the Bank")

                         OF THE OTHER PART

W H E R E A S :-
-------------

(1)  This Deed is made supplemental to the Debenture ("the Debenture") dated 1st
     June 1979 between the Borrower, the Bank, Philip H. Lustig ("Lustig") and
     Cayman Public Utilities Ltd., (CPU) and to all collateral security
     documents and agreements executed pursuant thereto.

(2)  The Bank has agreed to extend to the Borrower additional credit facilities
     to the extent of CI$275,000.00 or its equivalent in United States Dollars
     upon having the same secured in manner hereinafter appearing.

NOW THIS DEED WITNESSETH as follows:-
------------------------

1.   In consideration of the said agreement the Borrower and the Bank hereby
     agree that the Debenture shall hereafter stand as security for all sums
     owing to the Bank from time to time up to a maximum of Four Hundred and
     Seventy-Five Thousand Cayman Islands Dollars (CI$475,000.00) or its
     equivalent in United States Dollars together with interest thereon provided
     that the Bank shall have the right in its sole discretion to determine what
     proportion of the additional credit facilities shall be advanced in Cayman
     Islands Dollars and what proportion in United States Dollars.

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]

<PAGE>   2
                                      -2-

2.   In so far as not hereby expressly waived or varied the Borrower and the
     Bank hereby confirm the terms and provisions of the Debenture.

IN WITNESS WHEREOF the parties hereto have executed this Deed the day and year
first above written.

The Common Seal of CAYMAN WATER  )                CAYMAN WATER COMPANY LIMITED
COMPANY LIMITED was hereunto     )
affixed by L. Downer             )                Per: /s/ L. Downer
and by J. Parker                 )                     ------------------------
in the presence of:-             )                        Director
                                 )
                                 )
/s/ Neil Cavers                                   Per: /s/ J. Parker
---------------------------------                      ------------------------
Witness                                                   Director

SIGNED, SEALED and DELIVERED     )                THE ROYAL BANK OF CANADA
by D.J. Stewart                  )
the duly authorised attorney for )
the Bank in the presence of:-    )
                                 )
                                 )
                                 )
/s/ Neil Cavers                                   Per: /s/ D.J. Stewart
---------------------------------                      ------------------------
Witness                                                   Attorney for the Bank

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   3
                                      -3-

 I, Neil Cavers,                   of George Town, Grand Cayman,

Cayman Islands make oath and say:-

1.   The foregoing Deed made between CAYMAN WATER COMPANY LIMITED ("the
     Borrower") of the one part and THE ROYAL BANK OF CANADA ("the Bank") of the
     other part was made by the Borrower and the Bank on the 30th day of
     April, One Thousand Nine Hundred and Eighty One.

2.   I was present and did see D.J. Stewart, the duly authorised attorney
     for and on behalf of the Bank sign seal and as and for his proper act and
     did execute acknowledge and deliver the said Deed for the purposes therein
     mentioned on the 30th day of April One Thousand Nine Hundred and Eighty
     One between the hours of 10:00 a.m. and 11:00 a.m. in the forenoon at
     George Town, Grand Cayman, Cayman Islands.

3.   The Bank is a banking corporation existing under the Laws of Canada and
     having a branch office in George Town, Grand Cayman, Cayman Islands.

4.   That the name Neil Cavers, subscribed as a witness attesting to the
     due execution of the said Deed by the Borrower is of the proper handwriting
     of me this deponent and I reside at George Town, Grand Cayman and am an
     Attorney-at-Law.

                                                      --------------------------

                                                                 Witness

SWORN at George Town, Grand Cayman, Cayman Islands this    day of May    One
Thousand Nine Hundred and Eighty One before me:-

                          ----------------------------

                              Justice of the Peace

[PUBLIC RECORD OFFICE CAYMAN ISLANDS STAMP]
<PAGE>   4
                                      -4-

I, Neil Cavers, of George Town, Grand Cayman, Cayman Islands make oath and say:-

1.   The foregoing Deed made between CAYMAN WATER COMPANY LIMITED ("the
     Borrower") of the one part and THE ROYAL BANK OF CANADA ("the Bank") of the
     other part was made by the Borrower and the Bank on the 30th day of April
     One Thousand Nine Hundred and Eighty One.

2.   I was present and did see L. Downer and J. Parker Director and Director
     respectively of the Borrower affix the Common Seal of the Borrower to the
     said Deed and sign the same as and for the proper act and deed of the
     Borrower and execute acknowledge and deliver the said Deed for the purposes
     therein mentioned on the 30th day of April One Thousand Nine Hundred and
     Eighty One between the hours of 10:00 and 11 in the fore noon at George
     Town, Grand Cayman, Cayman Islands.

3.   The Borrower has its registered office at George Town, Grand Cayman, Cayman
     Islands and is a company duly incorporated and existing under the Laws of
     the Cayman Islands.

4.   That the name Neil Cavers, subscribed as a witness attesting to the due
     execution of the said Deed by the Borrower is of the proper handwriting of
     me this deponent and I reside at George Town, Grand Cayman and am an
     Attorney-at-Law.

                                                 -------------------------------

                                                            Witness

SWORN at George Town, Grand Cayman, Cayman Islands this    day of May One
Thousand Nine Hundred and Eighty One before me:-

                          ---------------------------

                             Justice of the Peace

[PUBLIC RECORD OFFICE GRAND CAYMAN ISLANDS STAMP]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00010-of-00352.parquet"}]]