Document:

EX-10.11 AMENDMENT #5 TO PRODUCT PURCHASE AGRMT.

 

Exhibit 10.11

	 	 	 
	Verilink Corporation

	 	Amendment No. 5
	3/4/05

	 	Agreement No. C0302362
	 

	 	Page 1 of 2

Amendment No. 5

To Product Purchase Agreement

Between Telesector Resources Group, Inc., d/b/a/Verizon Services Group,

Verilink Corporation

This Amendment No. 5 to Product Purchase Agreement No. C0302362 (Agreement) is entered
into and made effective as of the 4th day of March, 2005, by and between Verilink
Corporation., a corporation, with offices at 11551 East Arapahoe Road, Suite 150
(hereinafter called “Seller”) and Telesector Resources Group, Inc., a Delaware corporation
with offices at 240 East 38th Street, New York, New York 10016, d/b/a Verizon
Services Group, on behalf of itself and for the benefit of its AFFILIATES, (herein referred
to as “Purchaser”).

WHEREAS, the Agreement was effective between Buyer and Seller on June 19, 2003, and was amended
by Amendments #1 — 4, to continue in effect until December 31, 2006;

EFFECTIVE DATE:

This Amendment No. 5 shall be effective March 4, 2005

NOW THEREFORE, the parties agree as follows:

PRICING

1. Appendix D to the Agreement, entitled Pricing, is hereby amended as per the party’s agreement
to increase the Chassis (part number 9SA-CHAS-000 ) price by $[     ]* as follows:

Year 2003
pricing from $[     ]* to $[     ]*

Year 2004
pricing from $[     ]* to $[     ]*

Year 2005
pricing from $[     ]* to $[     ]*

Year 2006
pricing from $[     ]* to $[     ]*

2. Appendix D to the Agreement, entitled Pricing, is hereby amended as per the party’s agreement
to decrease the Installation Kit unit price (part number 9SA-Inst-Kit, Kit Installation for SHARK
XSP-100) from $[     ]* to $[     ]*.

ALL OTHER TERMS:

All other terms and conditions of the Agreement shall remain in full force and effect.

*
Confidential portions have been omitted and filed separately with the
Securities and Exchange Commission.

 

 

 

	 	 	 
	Verilink Corporation

	 	Amendment No. 5
	3/4/05

	 	Agreement No. C0302362
	 

	 	Page 2 of 2

Each party represents that it has executed this Amendment through its authorized corporate
representative:

	 	 	 
	Accepted for: XEL Communications, Inc.	 	
Accepted for: Telesector Resources
Group, Inc.,
(A Verizon Company)
	Signature: ______________________________	 	
Signature: ______________________________
	Typed Name: ___________________________	 	
Typed Name: ___________________________
	Title: ____________________________________	 	
Title: ____________________________________
	Date: ____________________________________	 	
Date: ____________________________________EX-10.1 Loan Agreement

 

Exhibit 10.1

Royal Bank of Canada

Commercial Banking Centre

101 East Hill Street, 3rd Floor

P.O Box N-7549

Nassau, Bahamas

Transit: 02265

Tel: (242) 356-8500

Fax: (242) 325-8483

4 October 2006

Consolidated Water (Bahamas) Ltd. (formerly Waterfields Company Limited)

P.O. Box CR-54030

Nassau Bahamas

Attn: Frederick McTaggart, President & CEO

Dear Sirs:

Further to our recent discussions, we are pleased to offer the Credit Facilities described below,
(which supersedes all previously advised facilities ) subject to the following terms and
conditions:

	 	 	 	 	 
	BORROWER:	 	Consolidated Water (Bahamas) Ltd.
(formerly Waterfields Company
Limited)

(the “Borrower”).
	 
	 	 	 	 

	LENDER:	 	Royal Bank of Canada (the “Bank”),
through its branch at Main Branch
at Bay Street; (the “branch of
account”).
	 
	 	 	 	 

	CREDIT FACILITIES:	 	The Credit Facilities are available
in the following segments in
Bahamian dollars (or United States
dollars where stated) by way of
	 
	 	 	 	 

	 	 	Segment 1.
	 	Operating:

Royal Bank Nassau Prime based loans (“NP
loans”);

	 	 	Segment 2.
	 	Reducing Demand Loan:

NP and Libor loans;

	 	 	Segment 3.
	 	Bonds and/or Guarantees (L/G’s);

	 	 	(collectively the “Borrowings”).
	 
	 	 	 	 

	AMOUNTS:
	 	Segment 1a:
	 	$500,000

	 	 	Segment 2a.
	 	$38,062 (USD)

	 	 	Segment 2b.
	 	$127,276

	 	 	Segment 3a.
	 	$100,000

	 	 	Segment 3b.
	 	$1,910,775

	 	 	Segment 3c.
	 	$2,968,985

 

 

	 	 	 	 	 
	PURPOSE:
	 	Segment 1a.
	 	Working capital and supplement L/G’s.

	 	 	Segment 2a.
	 	To assist with construction and start-up
costs of desalination plant re. supply of water to
the Water & Sewerage Corporation.

	 	 	Segment 2b.
	 	To assist with construction and start-up
costs of desalination plant re. supply of water to
the Water & Sewerage Corporation.

	 	 	Segment 3a.
	 	To facilitate payment of customs duties on
plant materials and equipment.

	 	 	Segment 3b.
	 	To provide a guarantee to Water & Sewerage
Corporation during the years of operations.

	 	 	Segment 3c.
	 	To facilitate a construction guarantee to
Water & Sewerage Corporation for recently awarded
Blue Hills Plant.

	 
	 	 	 	 

	REPAYMENT:
	 	Segment 1a.
	 	Operating loans repayable on demand,
and L/G’s expires December 31, annually.

	 	 	Segment 2a.
	 	Repayable on demand but until such demand
shall be made this facility shall be reduced by
blended quarterly payments of $74,000 principal and
interest, based on a 10 year amortization. Payments
to be adjusted at least annually to ensure payout
within the aforementioned amortization.

	 	 	Segment 2b.
	 	Repayable on demand but until such demand
shall be made this facility shall be reduced by
blended quarterly payments of $37,000 principal and
interest, based on a 10 year amortization. Payments
to be adjusted at least annually to ensure payout
within the aforementioned amortization.

	 	 	Segment 3a.
	 	On demand and expiring December 31, annually.
Drawings will be charged to the Borrower’s General
deposit account at maturity.

	 	 	Segment 3b.
	 	On demand and expiring December 31, annually
or until Water & Sewerage Corporation authorizes the
release from same. Drawings will be charged to the
Borrower’s general deposit account upon demand.

2

 

	 	 	 	 	 
	 	 	Segment 3c.
	 	On demand and expiring twelve months after
the “substantial completion date” (July 2007) or
until released by Water & Sewerage Corporation.
Drawings will be charged to the Borrower’s general
deposit account upon demand.

	 
	 	 	 	 

	OVERRIDING REPAYMENT:	 	Although the same has been made clear to you in our
previous discussion for the avoidance of doubt we
reiterate that notwithstanding any previous
expressions or comments either herein or during
negotiations for the credit facilities outlined
herein to the contrary, the Credit Facilities
outlined herein, including the availability on any
undrawn facility, are extended to you at the sole
discretion of Royal Bank of Canada are in each and
every case and without exception repayable on
demand.
	 
	 	 	 	 

	AVAILABILITY:
	 	Segment 1.
	 	The Borrower may borrow, repay, and re-
borrow up to the amount of this
operating
facility.

	 	 	Segment 3.
	 	 L/G’s will be issued for periods not exceeding
one year, except with the agreement of the Bank

	 
	 	 	 	 

	INTEREST
	 	 	 	 

	RATES & FEES:
	 	Segment 1a.
	 	Nassau Prime (“NP”) plus 1.50%.

	 	 	Segment 2a.
	 	Libor (90 days) plus 1.75%.

	 	 	Segment 2b.
	 	NP plus 1.50%.

	 	 	Segment 3a.
	 	1% per annum (to be renegotiated at next
review).

	 	 	Segment 3b.
	 	1% per annum (to be renegotiated at next
review).

	 	 	Segment 3c.
	 	1% per annum (to be renegotiated at next
review).

	 
	 	 	 	 

	 	 	Interest on Bahamian dollar loans shall be computed on
the daily principal amounts outstanding, at the
aforementioned rates, based on the actual number of days
elapsed divided by three hundred and sixty-five (365),
and shall be payable in arrears on the 31st of
each month for all operating loans and at each payment
date for reducing demand loans.
	 
	 	 	 	 

	 	 	Interest on United
States dollar loans shall be computed on the daily principal amounts
outstanding, at the aforementioned rates, based on the actual number of

3

 

	 	 	 	 	 
	 	 	days elapsed divided by three hundred and sixty (360),
and shall be payable in arrears on each payment date for
reducing demand loans.
	 
	 	 	 	 

	PAYMENT OF
	 	 	 	 

	INTEREST & FEES:	 	L/G’s — The Borrower shall pay fees at the rates set
forth above in advance at the time of issue of the L/G.
This fee shall be based upon the amount of the instrument
issued and shall be calculated on the number of days that
it will be outstanding.
	 
	 	 	 	 

	 	 	The yearly rates of interest to which the rates
determined in accordance with the Payment of Interest &
Fees section of this agreement are equivalent, are the
rates so determined and multiplied by the actual number
of days in the calendar year and divided by three hundred
and sixty five (365) for Bahamian dollar loans and three
hundred and sixty (360) for United States dollar loans.
	 
	 	 	 	 

	OTHER FEES:	 	The Borrower acknowledges that for requests for loan increases over the amount
established in this letter, a negotiation fee will be levied.
	 
	 	 	 	 

	 	 	Renewal Fee

A renewal fee of 0.25% is payable at each annual review
with respect to segment 1a and 1% with respect to
segments 3a, 3b & 3c (to be renegotiated at next review).

	 	 	 	 	 
	COLLATERAL SECURITY:
	 	 	 	–   Registered demand debenture creating a fixed and
floating charge over the assets of Consolidated
     Water (Bahamas) Ltd. (formerly Waterfields Co. Ltd.)
with a right of access to the property. Stamped
      for $6,418,440.

	 	 	 	 	–   Assignment of full covering risk insurance
(including hurricane) over plant assets.

	 
	 	 	 	–   Acknowledged loan agreement.

	CONDITIONS
	 	 	 	 	 	 

	PRECEDENT:	 	The obligation of the Bank to make available the Borrowings to
the Borrower is subject to and conditional upon:
	 	 	1.	 	Receipt
by the Bank of the within stipulated collateral
security inform and substance satisfactory to the
Bank, together with such corporate authorizations
and legal opinions as the Bank may require.

4

 

	 	 	 	 	 	 
	 	 	2.	 	The Borrower authorizes and directs the Bank to
automatically debit by mechanical, electronic or
manual means, any bank account of the Borrower for
all amounts payable under this agreement, including
but not limited to, the repayment of principal and
the payment of interest, fees and all charges for
the keeping of such bank accounts.

	 	 	3.	 	Receipt of acknowledged loan agreement.

	 
	 	 	 	 	 

	REPRESENTATIONS
	 	 	 	 	 

	AND WARRANTIES:	 	The Borrower represents and warrants to the Bank that:
	 	 	a)	 	it is a corporation validly incorporated under laws of the
Commonwealth of the Bahamas.

	 	 	b)	 	the execution and delivery of this agreement has been
duly authorized by all necessary actions and does
not violate any law or any provision of its by-laws
or any unanimous shareholders’ agreement to which it
is subject.

	 
	 	 	 	 	 

	NON-MERGER:	The provisions of this agreement shall not merge with any
security given by the Borrower to the Bank, but shall continue
in full force for the benefit of the parties hereto.
	 
	 	 	 	 	 

	COVENANTS:	The Borrower agrees:
	 	 	a)	 	Upon demand to pay all sums of money due under this
agreement; or until such demand be made upon the
terms otherwise provided herein;

	 	 	b)	 	To provide the Bank with quarterly in-house financial
statements within 45 days of the end of each quarter
and audited financial statements within 120 days of
each fiscal year-end;

	 	 	c)	 	To provide the Bank with annual pro forma balance
sheets, profit and loss and cash flow statements for
the next year and such other reports as the Bank may
reasonably request from time to time including but
not limited to quarterly production reports within
45 days of the end of each quarter;

	 	 	d)	 	To give the Bank prompt notice of any breach of this
agreement or any event which, with time or notice,
would constitute a breach of this agreement;

	 	 	e)	 	To maintain, on a consolidated basis, the ratio of
total Liabilities to Tangible Net Worth of not
greater than 2:1. Tangible Net Worth means the
aggregate of paid up capital, retained earnings and
debt which has been formerly postponed to the Bank,
less amounts due by related persons/entities,

5

 

	 	 	 	 	 	 
	 	 	 	 	 	goodwill, deferred costs, net leasehold improvements,
and other assets normally regarded as intangible
under Generally Accepted Accounting Principles.
Total liabilities include all direct liabilities, but
exclude amounts formally postponed to the Bank;

	 	 	 	f)	 	Not to grant, create, assume or suffer to exist any
mortgage, charge, lien, or other encumbrance
affecting any of its properties, assets or other
rights;

	 	 	 	g)	 	Not to sell, transfer, convey, lease or otherwise dispose
of any part of its property or assets, without the
prior written consent of the Bank except in the
ordinary course of business;

	 	 	 	h)	 	Not to, directly or indirectly, guarantee or otherwise
provide for, on a direct or indirect or contingent
basis, the payment of any monies or performance of
any obligations by any third party except as
provided herein;

	 	 	 	i)	 	To give the Bank 30 days prior notice in writing of any
intended change in the ownership of its shares and
not to dispose of shares of any of its subsidiaries
without the Bank’s prior written consent;

	 	 	 	j)	 	Not to change its name or merge, amalgamate or consolidate
with any other corporation without the Bank’s prior
written consent;

	 	 	 	k)	 	Not to declare or pay dividends exceeding available cash
flow; which is defined as net income plus
depreciation & amortization less principal
repayments less membrane replacement without the
prior written permission of the Bank;

	 	 	 	l)	 	The Bank is empowered at any time or times (without
consulting the Borrower) to impress additional stamp
duties on its Mortgages/ Debentures from the
Borrower covering any sum or sums at any time or
times advanced to the Borrower by the Bank PROVIDED
ALWAYS that such Mortgages/Debentures are intended
and shall secure at all times the aggregate amount
or amounts actually advanced by the Bank to the
Borrower at any time or times whether or not the
Mortgages/Debentures shall have been stamped or
upstamped to cover such amounts;

	 	 	 	m)	 	To keep all assets insured for at least replacement cost
and/or as per security documentation contained

6

 

	 	 	 	 	 	 
	 	 	 	herein and to provide the Bank with evidence of all
insurance renewals within 30 days of the expiry;

	 	 	n)	 	To ensure real property taxes are fully paid up and to provide
evidence of payment by March 31st,
annually; and

	 	 	o)	 	To provide the bank with a singed compliance
certificate (as per attached “Schedule A”) on a
quarterly/annual basis, verifying compliance or
non-compliance with the covenants contained herein;

	 
	 	 	 	 	 	 

	EXPENSES:	 	The Borrower agrees to pay all of the Bank’s costs incurred
from time to time in the preparation, negotiation and
execution of this agreement and the collateral security,
and any costs incurred in the operation or enforcement of
this agreement or any other agreement entered into pursuant
to this agreement.
	 
	 	 	 	 	 	 

	GOVERNING LAW:	 	This agreement shall be construed in accordance with and
governed by the laws of the Commonwealth of the Bahamas
applicable therein.
	 
	 	 	 	 	 	 

	ACCEPTANCE:	 	Please acknowledge the terms and conditions of the loan agreement by signing and returning the enclosed copy at
your soonest opportunity.

Very truly

/s/ Brian L. Knowles

Brian L. Knowles

Account Manager

Enc.

7

 

Before accepting the terms and conditions herein by signing hereof we again draw your attention the
overriding condition contained above that the credit facilities provided hereunder are in every
case repayable on demand notwithstanding any provisions for payment on terms. By signing hereof
you will be acknowledging that you fully understand that your loan or loans are always repayable on
demand.

TERMS AND CONDITIONS HEREBY ACCEPTED

THIS 5th DAY OF OCTOBER 2006

Consolidated Water (Bahamas) Ltd. (formerly Waterfields Company Limited)

 /s/ Frederick W. McTaggart

Authorized signing officer - Frederick W. McTaggart

 /s/ Wilmer Pergande

Authorized signing officer - Wilmer Pergande

8

 

Compliance Certificate

Schedule A.

In accordance with the terms of our Letter Agreement dated (4 October 2006), between Royal Bank of
Canada and Consolidated Water (Bahamas) Ltd. (formerly Waterfields Company Limited), (“the
Company”), I enclose the following:

	 	1.	 	Company Prepared/Audited financial statements
for the Company for quarter/year ending ___;
	 
	 	2.	 	Budget, forecast Income Statement, Balance
Sheet and Cash Flow Statement for the Company for the year ending
___;
	 
	 	3.	 	Production report for the Company for the
quarter ending ___;

In addition, I also certify that as at (quarter/year) ending ___, these financial
statements confirm the following:

	 	1)	 	The ratio of Debt to Tangible Net Worth was
        :1.00 and therefore in compliance/not in compliance
with the maximum permitted ratio of 2.00:1.00;
	 
	 	2)	 	Dividends declared by the company to date was
$___, and therefore in compliance/not in compliance with
the maximum permitted.

Consolidated Water (Bahamas) Ltd.

Name:

Title:

Date:

9

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