Document:

Exhibit 10.1

 

		 

 

PUBLIC BIDDING N° SIDUE-CEA-APP-2015-002

 

AGREEMENT No. C- SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE PARTENERSHIP AGREEMENT
for the:

 

“CONSTRUCTION, FINANCING AND OPERATION
OF A DEASLINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

CONSISTING OF:

 

A DESALINATION PLANT WITH A CAPACITY
OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT TO THE DELIVERY POINT IN TANK
3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2 M3/SECOND,
AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN, PREPARATION
OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT AND THE AQUEDUCTS,
AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS PER SECOND, TREATMENT
AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS. 

 

AUGUST 22, 2016

 

    	 	 	1

    
		 

 

    

 

INDEX

 

	First. Subject matter of the Agreement	26
	 	 
	Second. Term of the APP	27
	 	 
	Third. Description of the Works	28
	 	 
	Fourth. Terms for Execution	29
	 	 
	Fifth. Execution of the Project and Financing	32
	 	 
	Sixth. Operation of the System	34
	 	 
	Seventh. Replacement of Equipment, Conservation and Maintenance	36
	 	 
	Eight. Real Estate	37
	 	 
	Ninth. Property of the Assets	38
	 	 
	Tenth. Procurement of Permits and Authorizations	39
	 	 
	Eleventh. Consideration for the Services	39
	 	 
	Twelfth. Adjustments to the Amount of the Consideration	46
	 	 
	Thirteenth. Form of Payment of the Consideration	46
	 	 
	Fourteenth. Intentionally left blank	48
	 	 
	Fifteenth. Intake Water Availability	48
	 	 
	Sixteenth. Quality and Quantity of the Potable Water	49
	 	 
	Seventeenth. Water Monitoring	50
	 	 
	Eighteenth. Environmental Laws	50
	 	 
	Nineteenth. Waste Water	51
	 	 
	Twentieth. Contributions and Penalties	52
	 	 
	Twenty First. Industrial and Intellectual Property	52

 

    	 	 	2

    
		 

 

    

 

	Twenty Second. Logbook	53

 

	Twenty Third. Supervision and Inspection of the Works	53
	 	 
	Twenty Fourth. Minutes	53
	 	 
	Twenty Fifth. Conditions to Deliver the System	58
	 	 
	Twenty Sixth. Intentionally left blank	60
	 	 
	Twenty Seventh. Insurances	60
	 	 
	Twenty Eighth. Guarantees provided by the Developer	62
	 	 
	Twenty Ninth. Resources of the Consideration	67
	 	 
	Thirtieth. Early Termination of the APP	68
	 	 
	Thirty First. Rescission	71
	 	 
	Thirty Second. Early Termination due to Act of God or Force Majeure Event	76
	 	 
	Thirty Third. Early Termination due to General Interest Reasons or Justified Causes	78
	 	 
	Thirty Fourth. Procedure to Solve Technical Controversies	79
	 	 
	Thirty Fifth. Conventional Penalties for Breach	80
	 	 
	Thirty Sixth. Labor Liability	82
	 	 
	Thirty Seventh. Assignment of Rights and Subcontracting	83
	 	 
	Thirty Eighth. Notices	83
	 	 
	Thirty Ninth. Discrepancies in the Information	84
	 	 
	Fortieth. Arbitration	85
	 	 
	Forty First. Exhibits	86
	 	 
	Forty Second. Public Nature of the Public Private Partnership Agreement APP	87
	 	 
	Forty Third. Amendments to the APP	87
	 	 
	Forty Fourth. Conditions for the Commencement of the Effectiveness of the APP	88

 

    	 	 	3

    
		 

 

    

 

	Forty Fifth. Administration Trust	90
	 	 
	Forty Sixth. Total Cost of the System	90 

	 	 
	Forty Seventh. Maximum Limit of Liability 	93
	 	 
	Forty Eighth. Obligations of the Developer	93
	 	 
	Forty Ninth. Liability for the Quantity and Quality of the Water	94
	 	 
	Fiftieth. Confidentiality	95
	 	 
	Fifty First. Obligations of CEA	95
	 	 
	Fifty Second. Headings	96
	 	 
	Fifty Third. Unconditional Acceptance	96

 

    	 	 	4

    
		 

 

    

 

PUBLIC PRIVATE PARTNERSHIP AGREEMENT
(APP) HEREBY ENTERED INTO ON ONE PART BY THE BAJA CALIFORNIA STATE WATER COMMISSION, WHICH SHALL HEREINAFTER BE REFERRED TO
AS “CEA” REPRESENTED HEREIN BY MR. GERMÁN JESÚS LIZOLA MÁRQUEZ, IN HIS CAPACITY AS GENERAL
DIRECTOR, AND THE MERCANTILE COMPANY NAMED AGUAS DE ROSARITO, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL
VARIABLE, WHICH SHALL HEREINAFTER BE REFERRED TO AS THE “DEVELOPER”, REPRESENTED HEREIN BY MESSRS. MICHAEL
AVANT SMITH, FREDERICK W. MCTAGGART AND LAUTARO MANUEL MILLAMAN-TERUEL, IN THEIR CAPACITY OF MEMBERS OF THE BOARD
OF DIRECTORS, ALSO APPEARING THE TIJUANA STATE COMMISSION Of PUBLIC UTILITIES, AS JOINTLY LIABLE, HEREINAFTER THE “CESPT”,
REPRESENTED HEREIN BY MR. MIGUEL LEMUS ZENDEJAS, IN HIS CAPACITY AS GENERAL DIRECTOR, AND THE GOVERNMENT OF THE
STATE OF BAJA CALIFORNIA, THROUGH THE MINISTRY OF PLANNING AND FINANCING, HEREINAFTER THE “SPF”,
REPRESENTED HEREIN BY MR. ANTONIO VALLADOLID RODRÍGUEZ, IN HIS CAPACITY AS SECRETARY OF PLANNING AND FINANCING,
PURSUANT TO THE FOLLOWING ANTECEDENTS, STATEMENTS, DEFINITIONS AND CLAUSES:

 

ANTECEDENTS

 

		1.	In order to satisfy the demand of potable water currently required in the Municipalities of
Playas de Rosarito and Tijuana, State of Baja California and the requirements of its future development and trying to preserve
the natural resources and the aquifers that supply the region, as one of the essential objectives of this administration to exercise
a democratic and humanized government, which guarantees the respect of the law and decidedly encourages the participation of the
society and allows to offer quality infrastructure and services to improve the life conditions of the residents of Baja California,
CEA has made, jointly with the promoter of the PROJECT, the necessary studies to identify the alternatives that allow
the sufficient and timely supply of potable water for the oncoming forty years.

 

		2.	One of the alternatives to obtain such water supply, which evidences the best financial viability,
is through a public private partnership scheme, in which CEA hires the public private partnership for the collection, desalinization
of seawater, its potabilization and conduction in block to the established delivery point, which includes the preparation of a
project integrating the engineering, financing, construction, start of operations and maintenance of a desalination plant, whose
fundamental purpose is the desalination of seawater and block delivery through CEA to CESPT with the quality required
by the applicable health provisions in effect, in the amount and time required for the growing development of the communities of
the municipalities of Playas de Rosarito and Tijuana; as well as to manage, conduct and dispose of the waste water with the guarantee
of preservation and non-alteration of the surrounding environment.

 

    	 	 	5

    
		 

 

    

 

		3.	The State Committee of Public Private Partnership Projects (Projects Committee), as a collegiate
and institutional body for the analysis, opinion and decision, that collaborates in the authorization procedure of public private
partnership projects conducted by CEA, pursuant to the provisions of the LAPPEBC, and being formed by the SPF, which
presides over the Projects Committee; the Secretary of General Government (SGG); the General Coordination of the Cabinet
(CGG); the Major Government Surveillance Office (OMG); the Ministry of Economic Development (SDE); the Direction
of Governmental Control and Evaluation (DCEG); and SIDUE, which shall act as the Executive Secretary of the Committee,
authorized in the session held on July 16, 2015, the call for the public bidding procedure of the PROJECT.

 

		4.	That this APP is executed under such scheme to establish a long term contractual relationship
between instances of the public and private sectors, for the supply of services to the public sector or the final user and in which
the infrastructure and resources used are completely or partially provided by the private sector, for which it has determined to
entrust the DEVELOPER with the supply of the services referred to in this APP.

 

		5.	In the Second Ordinary Session of 2015 of the Projects Committee, it was unanimously authorized
by the members of the Committee, and consequently agreed to call to a public bidding process in accordance with the provisions
of chapter four of the LAPPEBC, pursuant to the principles of legality, free concurrence, competition, objectiveness, impartiality,
transparency and publicity, awarding the project to the best conditions of price, quality, financing and opportunity. Thus CEA
requested the support of the Technical Unit of Investment of SIDUE to collaborate in the public bidding procedure of the
authorized project mentioned below (the “CALL”) and to deliver to CEA, once awarded, the necessary documents
to contract with the winner, pursuant to the applicable provisions of the LAPPEBC and its Regulations.

 

PUBLIC INTERNATIONAL CALL FOR
THE PUBLIC PRIVATE PARTNERSHIP NUMBER 002/2015.

 

“CONSTRUCTION, FINANCING
AND OPERATION OF A DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO (WATER PRODUCTION THROUGH DESALINIZATION)”

 

    	 	 	6

    
		 

 

    

 

Consisting of:

 

A DESALINATION PLANT WITH
A CAPACITY OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SEC, AND AN AQUEDUCT TO THE DELIVERY POINT
IN TANK 3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2
M3/SECOND, AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN,
PREPARATION OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT
AND THE AQUEDUCTS, AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS
PER SECOND, TREATMENT AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS.

 

Public Bidding Procedure No.:
SIDUE-CEA-APP-2015-002 

Agreement No.: C-SIDUE-CEA-APP-2015-002

 

		6.	CEA and CESPT shall execute the WATER PURCHASE AND SALE AGREEMENT, with the
purpose of having CEA supplying to CESPT the amount of annual cubic meters of POTABLE WATER in block,
pursuant to the provisions of this APP, which, in turn, shall pay CEA the necessary resources to pay the CONSIDERATION
to the DEVELOPER, pursuant to this APP.

 

		7.	In exercise of the authority granted by the Public Private Partnerships Law for the State of
Baja California (LAPPEBC) published in the Official Gazette No. 42, dated August 22, 2014, Section I, Volume CXXI and in the Regulations
of the Public Private Partnerships Law for the State of Baja California published in the Official Gazette No. 48, dated October
3, 2014, Section II, Volume CXXI, CEA published the CALL, on November 6, 2015, which content responded
to the nature of the bidded services, as well as to the applicable legal requirements of the subject-matter. The CALL is
attached herein as EXHIBIT 1.

 

		8.	The eighteenth transitory article of the Income Law for the State of Baja California for Fiscal
Year 2016, authorizes CEA and the State of Baja California, through the SPF, to execute the necessary legal instruments
to offer the CREDITORS with an alternative and partial source of payment of the obligations of multiannual payments in public
private partnerships entered into by CEA for the supply of water, in terms of the LAPPEBC, approved by the State
Committee of Public Private Partnerships Projects for all of those projects formalized within fiscal year 2016.

 

		9.	Once the stages of the PUBLIC BIDDING were satisfied and the PROPOSITIONS filed by
the CONTESTANTS were received, analyzed and valued, CEA, jointly with SIDUE, pursuant to the provisions of
the LAPPEBC, issued the AWARD on June 15, 2016, resulting as winning participant thereof, the association comprised
by N.S.C. AGUA, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE, NUWATER, SOCIEDAD ANÓNIMA PROMOTORA DE INVERSIÓN DE
CAPITAL VARIABLE and DEGRÉMONT, SOCIEDAD ANÓNIMA DE CAPITAL VARIABLE. Copy of the AWARD is attached herein
as EXHIBIT 2.

 

    	 	 	7

    
		 

 

    

 

		10.	In accordance with the provisions of the BASES OF THE PUBLIC BIDDING, the winning CONTESTANT
of the PUBLIC BIDDING incorporated the specific purpose mercantile company which is obliged to execute this APP.

 

STATEMENTS

 

I. CEA states, through its legal representative,
that:

 

I.1. The Strategic Plan
of Baja California 2013-2019 is the ruling project of the State Government, which constitutes the main pillar of the State Development
System. Pursuant to the law, such system intends to be an “orderly prevision and the execution of actions that foster socioeconomic
development”, through the actions of the government and the collaboration of the civil society in the “politics, economic,
environmental, social and institutional life of the state”, with the purpose and objective of “improving the quality
of life of the population”.

 

I.2. The State Development
Plan 2014-2019 determines that, the challenges faced by Baja California to achieve competitiveness for the integral development
of the State and its inhabitants, have been, mostly, the adaptation to changes in the technologic demands, the coverage of infrastructure
services and the general logistics capacity; likewise it states that it is sought for infrastructure to detonate the economic,
social, productive, competitive and sustainable development, favoring the sustainability criteria as guarantee of the wellbeing
of the present and future generations.

 

I.3. The Ruling Axis 5,
called “Infrastructure for the competitiveness and development” has as a general objective the endowing of infrastructure
for the State, for a competitive development, through the efficiency of the potable water and water treatment services in the five
municipalities, disposing of land, housing and quality equipment that allow the development of the potential and the integral formation
of its population, under a participative and sustainable framework.

 

I.4. Within the Axis 5,
is the sub-axis 5.5, named “potable water, sewer and sanitation”, which has as a general objective the assurance, endowment
and maintenance of the supply sources, potable water, sewer and sanitation services, as well as the exploitation of the residual
treated waters, in the adequate quality and quantity in our State, preserving the safekeeping of the environment.

 

I.5. It is a Descentralized
Public Entity of the State Government, with its own authority and assets, created through decree of the executive power dated March
2, 1999, published in the official gazette of the state on March 3, 1999.

 

    	 	 	8

    
		 

 

    

 

I.6. Its authority include
the following: coordinating projects related to the conduction and distribution of water by the block through aqueducts systems
for the supply of the population; planning, regulating and coordinating the Potable Water, Sanitary Sewer and Treatment System
of the State; participating and, if applicable, drafting the programs arising from the State Development Plan related to the aforementioned
system; managing and obtaining the financing for fostering of the development of infrastructure and services; promoting, supporting
and, when applicable, managing the assignations, concessions and permits; with the purpose of endowing the population centers with
water; formulating alternative solutions in the use of energy sources for the operation of the conduction systems; and, the other
conditions granted by the law.

 

I.7. For the execution
of this APP, it is duly represented by its General Director, Mr. GERMÁN JESÚS LIZOLA MÁRQUEZ, as
evidenced by the power of attorney granted by the Board of Directors, which testimony was formalized by Mr. Luis Alfonso Vidales
Moreno, notary public No. 5 of this municipality, as evidenced in the public deed number 155,867, volume 4,127, dated February
10, 2015, and which was registered before the Public Registry of Commerce under number 5717341, dated February 27, 2015.

 

I.8. Its assets consist,
among others, of the contributions made by the State and Federal Government, as well as by the water operating organisms or the
Municipalities, pursuant to transitory articles third and fourth of its Creation Decree, dated March 2, 1999, and its amendments
dated November 19, 2014 and January 27, 2006. CEA will make up its assets through the contributions of the water operating
organisms of the State and shall convene with them the corresponding contributions for the subsequent years, prior approval of
the Ministry.

 

I.9. It has its domicile
in Bulevar Anáhuac No. 1016, Col. El Vidrio, C.P. 21080, Mexicali, Baja California.

 

II. THE DEVELOPER STATES, THROUGH ITS
BOARD OF DIRECTORS, THAT:

 

II.1. It is a legally incorporated
company, pursuant to the Mexican mercantile law, as evidenced in public deed number 112,154 granted by Mr. Carlos Enríquez
de Rivera Castellanos, notary public number 9 of the city of Mexicali, Baja California, dated August 17, 2016, and registered under
the Public Registry of Property and Commerce of the city of Mexicali, B.C., under the electronic mercantile folio number N-2016014561,
dated August 22, 2016, a certified copy of which is attached to this APP as EXHIBIT 3.

 

II.2. Messrs. MICHAEL AVANT SMITH (CHAIRMAN),
FREDERICK W. MCTAGGART (MEMBER) AND LAUTARO MANUEL MILLAMAN-TERUEL (ALTERNATE MEMBER) evidence their authority as members
of the Board of Directors, in terms of the public deed mentioned in the statement II.1 above, in which the authority granted to
the Board of Directors is evidenced.

 

II.3. Its main corporate purpose
is limited to the necessary activities for the compliance of the subject-matter of the APP.

 

II.4 It has ample and well-founded
knowledge of the necessities that motivate the execution of this APP, that it has duly inspected the site in which the PROJECT
WORKS shall be carried out and knows the characteristics of the region, as well as the prevailing weather conditions, which
it took into account for the preparation of the PROPOSAL filed in the PUBLIC BIDDING and to comply with the provisions
of the COMMITMENT LETTER attached herein as EXHIBIT 4.

 

    	 	 	9

    
		 

 

    

 

II.5. It has considered all the
intervening factors in the execution of the project of the SEAWATER DESALINATION PLANT of the Municipality of Playas de
Rosarito, Baja California, thus obliging itself to carry out all the necessary actions to execute the required investments and
expenses to carry out the EXECUTIVE PROJECTS, the equipment, the performance TESTS, the SET-UP OF OPPERATIONS
and operation of the SYSTEM, as well as its conservation and maintenance, causing that the latter achieves the water quantity
and quality commitments in a timely manner, as established in the BASES OF THE PUBLIC BIDDING, as well as CLAUSES FIRST
AND SIXTEENTH of this APP.

 

II.6. It has, through its shareholders,
affiliates and related parties, all the technical, financial and legal elements, as well as the applicable technology, equipment,
materials, machinery and specialized personnel for the execution and carrying out of the WORKS subject matter of this APP,
as well as its experience required by the foregoing.

 

II.7. It has knowledge of the content
of the APPLICABLE LAWS, both in the State of Baja California and those of federal nature in the different subject-matters
governing the hiring and the services subject-matter of this APP, among which are the LAPPEBC and its Regulations,
the General Law of Ecologic Equilibrium and Environmental Protection and its Regulations, as well as the National Waters Law and
its Regulations, accepting to submit itself to its provisions.

 

II.8. It has its tax domicile in
Boulevard Sánchez Taboada 10488-801, Zona Río, C.P. 22320, in the city of Tijuana, State of Baja California, which
is hereby stated for the legal purposes and effects of this APP. Its Federal Taxpayers Registry number is ARO160817RB5.

 

III. CESPT STATES, THROUGH ITS REPRESENTATIVE,
THAT:

 

III.1. It is a decentralized public
organism of the Government of the State of Baja California, with its own legal capacity and assets, whose authority is the operation
of the potable water and sanitary sewer systems of the municipality of Tijuana Baja California, as well as the direct or contracted
execution of the works of its jurisdiction and the operation and maintenance of the mentioned systems, as well as the development
of activities that facilitate, directly or indirectly, the objectives for which it was created, in direct benefit of the population
of the municipality of Tijuana Baja California.

 

    	 	 	10

    
		 

 

    

 

III.2. It is duly represented by
its General Director, Mr. Miguel Lemus Zendejas, who evidences his authority through the designation issued by Mr. Francisco
Vega de Lamadrid, Constitutional Governor of the State of Baja California, which was granted on March 31, 2016, as well as
with a power of attorney granted pursuant to the provisions of Article 12 of the State Commissions of Public Services of the State
of Baja California, in Extraordinary Meeting of the Board of Administration on April 4, 2016, formalized under the public deed
number 196,460, volume 2,367, dated April 12, 2016, granted by Mr. Gabriel Moreno Mafud, notary public number 2 of this city, which
is duly registered before the Public Registry of Property and Commerce under entry 6009404 dated April 21, 2016 in the civil section
and under the electronic mercantile folio number 40086*2 dated April 20, 2016, which authority has not been limited nor restricted
in any manner to this date.

 

III.3. It has established its domicile
in Bulevar Federico Benítez number 4057, 20 de Noviembre, in the city of Tijuana, Baja California, which is herein stated
for the legal purposes and effects of this APP.

 

III.4. CESPT, shall guarantee the
payment of the consideration of this APP in charge of CEA, obliging itself to timely conduct and contribute to the
ADMINISTRATION TRUST all the payments that CEA is obliged to make with respect to the CONSIDERATION established
in this APP.

 

III.5. CEA and CESPT shall
execute the WATER PURCHASE AND SALE AGREEMENT, through which, CESPT obliges itself to acquire from CEA all
the POTABLE WATER produced and delivered at the DELIVERY POINT.

 

IV. SPF STATES, THROUGH ITS REPRESENTATIVE,
THAT:

 

IV.1 It is herein represented by
its secretary, Mr. Antonio Valladolid Rodríguez, who evidences his authority with the appointment granted by Mr. Francisco
Arturo Vega de Lamadrid, Governor of the State of Baja California, dated November 01, 2013, having the necessary authority to execute
this agreement.

 

IV.2 It has established its domicile
in Edificio del Poder Ejecutivo, 4to. Piso, Calzada Independencia No. 994, 4to. Piso, Centro Cívico, C.P. 21000, Mexicali
Baja California, which is herein appointed for the legal purposes and effects of this APP.

 

IV.3 The SPF shall guarantee
the CURRENT ACCOUNT LOAN through the contribution, to the MASTER GUARANTEE TRUST of the necessary resources, including
without limitation, the necessary and sufficient percentage of income and rights for (i) income and rights for tax on personal
remuneration, in terms of transitory article eighteenth of the 2016 Income Law for the State, and/or (ii) income arising from the
state contributions, products and other state rights, pursuant to the provisions of this APP. Further, if necessary, the
SPF shall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain available throughout
the term of this APP.

 

Having stated the foregoing, the PARTIES
agree to submit themselves to the following Defined Terms and Clauses:

 

    	 	 	11

    
		 

 

    

 

DEFINED TERMS

 

Pursuant to the terminology proposed in
the BASES OF THE PUBLIC BIDDING, ITS EXHIBITS and APPENDIXES whose award caused and forms part of this APP,
and for all its effects, the terms hereinafter enlisted shall have the meaning ascribed to them, as long as they are used with
capital letters or with the abbreviation included in the corresponding term, unless it is expressly indicated otherwise and may
be used in singular or plural form, as required by the intent of the corresponding sentence. The headings in this APP and
its Exhibits are only for practical purposes, and therefore shall not be considered for their interpretation.

 

For the purposes of this APP the
following terms shall have the meaning mentioned below:

 

		1.	CREDITORS: means the financial entities that have granted financing to the DEVELOPER
under the FINANCIAL AGREEMENTS for the development of the PROJECT.

 

		2.	MINUTES OF CAPACITY: Document or documents that shall be issued by the DEVELOPER,
duly executed by its representative, once it has complied with the norms and specifications of the Protocol of TESTS and
SET-UP OF OPERATIONS of the SYSTEM in which it shall be evidenced in a partial or total manner, as applicable, that
the PROJECT WORKS corresponding to the first stage of the PROJECT comply with the established PRODUCTION CAPACITY,
and which will be reviewed by the SUPERVISION and authorized by CEA.

 

		3.	MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY: Document that shall be issued
by THE DEVELOPER upon the expiration of the term of the APP, duly executed by its legal representative, which shall
contain the inventory and conditions of the equipment, machinery and premises that integrate the SYSTEM and in which it
shall be evidenced the DELIVERY by the DEVELOPER to CEA, of the ownership and operation of all the assets
that integrate the SYSTEM, gratuitously and with no lien whatsoever, as well as of the real estate of the SEAWATER DESALINATION
PLANT, in the conditions of normal functioning in which the SYSTEM is received. With the issuance and execution of these
minutes, the effects of the APP shall conclude, which shall be authorized and executed by CEA.

 

		4.	MINUTES OF COMMENCEMENT OF CONSTRUCTION: Document that shall be issued by the DEVELOPER,
executed by its legal representative, in which the date of commencement of the PROJECT WORKS corresponding to the first
stage of the PROJECT shall be established, once CEA has issued its NON-OBJECTION.

 

		5.	MINUTES OF COMMENCEMENT OF THE APP: Document that shall be executed by the PARTIES
once the conditions for the APP EFFECTIVENESS COMMENCEMENT have been met, and whose effects shall be the commencement of
the INVESTMENT PERIOD.

 

    	 	 	12

    
		 

 

    

 

		6.	MINUTES OF COMMENCEMENT OF OPERATION: Document in which it shall be evidenced that the PROJECT
WORKS corresponding to the first stage of the PROJECT have satisfactorily complied with the TESTS, which shall
be prepared and executed by the DEVELOPER, reviewed by the SUPERVISION, and submitted to the consideration of CEA,
for its issuance jointly with the DEVELOPER. With the issuance of these minutes, the monthly payments of the T1 + T2 + (T3
X Q) + (T4 X Q) tariffs shall commence; in the understanding that the T1 Tariff may commence to be paid prior to the lapsing of
the 37 (thirty seven) months following the APP EFFECTIVENES COMMENCEMENT, in accordance with the terms of this APP.

 

		7.	MINUTES OF TERMINATION OF THE CONSTRUCTION: Document issued by the DEVELOPER, executed
by its legal representative, reviewed by the SUPERVISION, and authorized by CEA, in which it shall be evidenced the
termination of the construction and equipment of the first stage of the SYSTEM and the commencement of the TESTS and
SET-UP OF OPERATIONS period.

 

		8.	FINANCIAL AGREEMENTS: Means each and every loan agreement, promissory note, document, guarantee
agreement, mortgage, pledge agreement, subordination agreement and other documents related to the financing of debt for the construction
and development of the PROJECT, as well as all of the agreements for the protection of interest rates or exchange rates
related to such debt financing (with the understanding that such protection agreements shall be linked to the FINANCIAL AGREEMENTS
and will not have speculative purposes), including in each case any amendment, extension, renewal, refinancing and replacement
thereof (in the understanding that any refinancing shall maintain or improve the loan conditions), but excluding the financing
that have been entirely paid for.

 

This definition shall not consider
any type of document related to the financing of the debt contracted by the DEVELOPER after the SET-UP OF OPERATIONS
of the PROJECT.

 

		9.	INTAKE WATER: The sea water that the DEVELOPER shall obtain from the SITE
to be desalinated and potabilized in the SEAWATER DESALINATION PLANT, which shall comply, at least, with the quality and
conditions established in the PROPOSAL.

 

		10.	WASTE WATER: Waste water that results from processes of the SEA WATER DESALINATION PLANT.

 

		11.	POTABLE WATER: The treated water, transported, stored and delivered by the DEVELOPER
to CEA as a result of the desalination and treatment processes in the SEAWATER DESALINATION PLANT, which shall comply
with the quality and conditions established in the PROPOSAL.

 

    	 	 	13

    
		 

 

    

 

		12.	GOVERNMENTAL AUTHORITY: Any governmental entity, whether federal, state or municipal,
or any ministry, department, court, CEA, council, entity, body or similar authority comprising any such governments.

 

		13.	APP: This Public Private Partnership Agreement.

 

		14.	BASES OF THE PUBLIC BIDDING: Bases for the participation in the PUBLIC BIDDING.

 

		15.	LOGBOOK: Technical instrument that constitutes the means of communication between the PARTIES,
in which the relevant matters and events arising during the execution of the WORKS and during the INVESTMENT PERIOD shall
be recorded, which shall comply with the provisions of article 126 of the Regulations of the LAPPEBC and upon conclusion
of this period, a new logbook shall be opened, for the OPERATION PERIOD, which shall contain the signatures of the authorized
personnel.

 

		16.	CHANGE IN LAW: Any change in the APPLICABLE LAWS (including the issuance or promulgation
of any other APPLICABLE LAW) as of the date of the filing of the PROPOSAL, to the extent that such change affects
or implies the modification of the original conditions presented by the DEVELOPER in its PROPOSAL or considered by
it, including without limitation: (a) fiscal matters related to taxes, (b) customs, (c) environmental provisions, (d) labor matters
related to the modification of the Minimum General Wage, published in the Federal Official Gazette, corresponding to the municipality
of Playas de Rosarito, to the modifications of benefits pursuant to the Federal Labor Law and the Social Security Law, (e) the
modification or imposing of any condition (additional to those originally established) for the issuance or renewal of any of the
authorizations, permits, licenses or concessions applicable to the PROJECT, and (f) in general, any Federal, State and/or
Municipal APPLICABLE LAW that modifies the original conditions submitted in the PROPOSAL.

 

		17.	PRODUCTION CAPACITY: The capacity measured in the MEASURING POINT, that is, at exit
of the SEAWATER DESALINATION PLANT, in terms of the flow of POTABLE WATER obtained from desalination, conducted,
deposited and delivered, which the SYSTEM shall have, and shall be guaranteed by the DEVELOPER in its PROPOSAL,
which shall be supplied as from the DATE OF COMMENCEMENT OF OPERATIONS and pursuant to the PRODUCTION STANDARDS;
the initial capacity shall be verified by the TESTS of the SYSTEM, prior to the SET-UP OF OPERATIONS.

 

		18.	RISK CAPITAL: Amount that the DEVELOPER shall contribute with its own resources,
in an amount equal to or greater than 20% (twenty per cent) of the COST OF THE SYSTEM.

 

		19.	COLLECTION: Necessary works for the intake of INTAKE WATER that shall be performed
in the real estate of the Federal Electricity Commission.

 

    	 	 	14

    
		 

 

    

 

		20.	LETTER OF COMMITMENT: Document establishing the commitments acquired by the DEVELOPER,
and delivered together with its PROPOSAL, which format is included in EXHIBIT E of the BASES OF THE PUBLIC BIDDING.

 

		21.	ACT OF GOD: Any event that is not caused by human will, arising from inevitable phenomena
caused by nature, which affects compliance of the obligations arising from the BASES OF THE PUBLIC BIDDING and the APP,
understanding as such, in an enunciative but not limitative manner, the following: INTAKE WATER quality and conditions established
in the PROPOSAL, earthquakes, tsunamis, avalanches, floods, cyclones, landslide, storms, tornadoes, lightning and fires.

 

		22.	FORCE MAJEURE EVENT: Any event that is not caused by the will of the PARTIES, that
affects the compliance of their obligations arising from the BASES OF THE PUBLIC BIDDING or the APP, understanding
as such, in an enunciative but not limitative manner, the following: INTAKE WATER quality and conditions established in
the PROPOSAL, wars, insurrections, revolts, civil disturbances, mutiny, sabotage, fires, illicit acts or actions of the
users of the POTABLE WATER or of third parties, devaluation or radical changes in the economic conditions of the country,
transportation disasters whether maritime, airborne, train wrecks, or terrestrial, strikes or other labor disputes in Mexico which
are not caused by the breach of any labor agreement by the affected party, or strikes or other labor disputes outside of Mexico
that delay the delivery of any equipment, GOVERNMENTAL AUTHORITY acts (which are not voluntarily induced by the affected
party, nor occur as consequence of a breach to its obligations), any CHANGE IN LAW that cannot be remedied pursuant to the
provisions of this APP; the impossibility for any of the PARTIES to obtain in time or maintain the state in effect,
despite their best efforts and the compliance with the APPLICABLE LAWS, any authorization, permit, license, registry or
similar of any GOVERNMENTAL AUTHORITY, necessary to allow the affected party to comply with its obligations pursuant to
this APP and the lack of supply of electric energy to the SYSTEM.

 

		23.	CESPT: The Tijuana State Commission of Public Utilities.

 

		24.	CFE: Federal Electricity Commission.

 

		25.	PUBLIC BIDDING: Public Bidding N° SIDUE-CEA-APP-2015-002.

 

		26.	COMPTROLLER: The Direction of Governmental Control and Evaluation.

 

		27.	WATER PURCHASE AND SALE AGREEMENT: Agreement executed by CEA and CESPT with
the purpose of having CEA supplying water in block to CESPT and for the latter to oblige itself to pay the necessary
and sufficient resources to guarantee and pay the CONSIDERATION to the DEVELOPER pursuant to this APP, being
CESPT obliged to acquire all the POTABLE WATER at the DELIVERY POINT and expressly including the obligation
of CEA to assign its collection rights arising therefrom to the ADMINISTRATION TRUST.

 

    	 	 	15

    
		 

 

    

 

		28.	COST OF THE SYSTEM: It is the amount of Mex. Cy. $8,525,746,895.00 (Eight billion, five
hundred and twenty five million, seven hundred and forty six thousand, eight hundred and ninety five pesos 00/100 Mexican currency)
using values of February 2016 without including IVA, which pursuant to the PROPOSAL, is the total amount of the PROJECT
WORKS and the SUPERVISION pursuant to the provisions of CLAUSE FORTY SIXTH of this APP, from which Mex.
Cy. $5,254,484,991.00 (Five billion, two hundred and fifty four million, four hundred and eighty four thousand, nine hundred and
ninety one pesos 00/100 Mexican currency) corresponds to the first stage of the PROJECT, and Mex. Cy. $3,271,261,904.00
(Three billion, two hundred and seventy one million, two hundred and sixty one thousand, nine hundred and four pesos 00/100 Mexican
currency) corresponds to the second stage of the PROJECT.

 

		29.	COST OF THE WORKS: It is the amount of Mex. Cy. $547,135,384.00 M.N. (Five hundred and forty
seven million, one hundred and thirty five thousand, three hundred and eighty four pesos 00/100 Mexican currency) using values
of the month of February 2016 without including IVA, which pursuant to the PROPOSAL, is the total amount of the complementary
resources pursuant to the provisions of CLAUSE FORTY SIXTH, from which Mex. Cy. $361,917,806.00 (Three hundred and sixty
one million, nine hundred and seventeen thousand, eight hundred and six pesos 00/100 Mexican currency) corresponds to the first
stage of the PROJECT, and Mex. Cy. $185,217,578.00 (One hundred and eighty five million, two hundred and seventeen thousand,
five hundred and seventy eight pesos 00/100 Mexican currency) corresponds to the second stage of the PROJECT.

 

		30.	TOTAL COST OF THE SYSTEM: It is the total amount of resources necessary to cover the items
mentioned in the following chart, in accordance with the provisions of CLAUSE FORTY SIXTH:

 

	1    COST OF THE SYSTEM	 	$	8,525,746,895.00	 
	2    COST OF THE WORKS	 	$	547,135,384.00	 
	TOTAL	 	$	9,072,882,279.00	 

 

    	 	 	16

    
		 

 

    

 

		31.	CURRENT ACCOUNT LOAN: Is the line of credit in an irrevocable and contingent current account
loan, which a financial institution shall grant to CEA, in reasonably acceptable terms for the CREDITORS, and which
shall have as its purpose to ensure the compliance of the payment obligations of CEA pursuant to this APP when CEA
does not comply with such obligations. The loan shall be for an amount equivalent to three months of payment of the CONSIDERATION,
plus the corresponding IVA, subject to the provisions of section six of CLAUSE TWENTY-NINTH. The CURRENT ACCOUNT
LOAN shall remain valid as long as the payment obligations of CEA in favor of the DEVELOPER exist pursuant to
this APP, and the disposition rights and resources arising from the exercise thereof shall be irrevocably affected to the
ADMINISTRATION TRUST. To guarantee the CURRENT ACCOUNT LOAN, the SPF, shall affect the necessary and sufficient
percentage of its income and rights for the tax on personal remuneration, pursuant to transitory article eighteenth of the 2016
Income Law for the State, through the MASTER GUARANTEE TRUST. Likewise, in the event that such guarantee is no longer sufficient,
the SPF shall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain available throughout
the term of this APP.

 

		32.	CENTRALIZED AGENCIES: The centralized agencies of the Public Administration of the State
of Baja California.

 

		33.	RIGHT OF WAY: Strip of land in which the DEVELOPER may build the required parts of
the facilities of the SYSTEM for which use, passage or occupation, the express authorization of the corresponding authorities
and owners is required.

 

		34.	DEVELOPER: Mercantile corporation with specific purpose named AGUAS DE ROSARITO, SOCIEDAD
ANÓNIMA PROMOTORA DE INVERSIÓN DE CAPITAL VARIABLE.

 

		35.	BUSINESS DAY: Any day, except Saturdays and Sundays and those considered as mandatory holidays
by the Federal Labor Law.

 

		36.	CALENDAR DAY: The days included in the calendar, without exception of any non-working days
for labor purposes.

 

		37.	DESCENTRALIZED ENTITIES: The descentralized entities of the Public Administration of the
State of Baja California.

 

		38.	DELIVERY: Obligation of the DEVELOPER of physically delivering to CEA the
SYSTEM, all of its components and the operation of its functioning, at the expiration of the term of the APP, in
optimal functioning conditions, gratuitously and with no lien whatsoever, including without limitation the rights, licenses, permits,
patents, trademarks, authorizations and everything that by fact or by law corresponds to it, pursuant to this APP.

 

		39.	PRODUCTION STANDARDS: Means the maximum and minimum limits of the production-delivery of
the volumes of POTABLE WATER, expressed in percentages and relating to the PRODUCTION CAPACITY of the SYSTEM.

 

    	 	 	17

    
		 

 

    

 

		40.	ESTIMATE: The document describing the amount of fully concluded and executed WORKS,
within the corresponding month pursuant to the CALENDARED SCHEDULE, the advance reports and the INVESTMENT PERIOD,
which the DEVELOPER shall submit to the ADMINISTRATION TRUST, authorized by the SUPERVISION and CEA, for
the payment process.

 

		41.	MILESTONES: Activities that define the execution of a structure or component of each of
the PROJECT WORKS and which the DEVELOPER shall submit in a CALENDARED SCHEDULE. The cost of each milestone
shall be established by the DEVELOPER through a catalogue which sum shall represent the total of the construction of each
of the works at a FIXED PRICE, which during the INVESTMENT PERIOD, shall be used solely for the control of the progress
of the works, to ensure that the DEVELOPER may obtain the resources from the FINANCIAL AGREEMENTS, pursuant to the
ESTIMATES approved by the SUPERVISION. The MILESTONES shall have the units that perfectly describe the scope
of each work, as invariably, each MILESTONE shall have an amount in the corresponding catalogue.

 

		42.	AWARD: Resolution of CEA thorugh which the result of the PUBLIC BIDDING was
determined and the APP was awarded to the consortium comprised by N.S.C. AGUA, S.A. DE C.V., NUWATER, S.A.P.I. DE C.V. and
DEGRÉMONT, S.A. DE C.V.

 

		43.	DATE OF COMMENCEMENT OF CONSTRUCTION: Date that marks the commencement of the works provided
by this APP and which shall be determined by the date of issuance, execution and approval of the MINUTES OF COMMENCEMENT
OF CONSTRUCTION.

 

		44.	DATE OF COMMENCEMENT OF OPERATIONS: Date that marks the commencement of the operations,
conservation and maintenance of the SEAWATER DESALINATION PLANT and which shall be determined by the date of issuance, execution
and approval of the MINUTES OF COMMENCEMENT OF OPERATIONS.

 

		45.	ADMINISTRATION TRUST: Irrevocable trust agreement for the investment, administration and
source of payment that the PARTIES shall contract, as trustors, pursuant to the general guidelines for the ADMINISTRATION
TRUST established in APPENDIX 3 of the BASES OF THE PUBLIC BIDDING, in the terms required by the financing, and
pursuant to this APP, which purpose shall be to receive and administer all the economic resources related with the PROJECT,
from the date of its creation until its liquidation and extinction, with the purpose of fulfilling the purposes established in
the APP, pursuant to the terms and conditions therein stablished.

 

    	 	 	18

    
		 

 

    

 

		46.	MASTER GUARANTEE TRUST: Irrevocable guarantee trust agreement that shall be contracted by
the SPF as trustor, to affect in guarantee, to the satisfaction of the creditor institution of the CURRENT ACCOUNT LOAN
and for the benefit of both stages of the PROJECT and of other projects of the Government of the State of Baja California,
the necessary resources for the tax on personal remuneration, pursuant to transitory article eighteenth of the 2016 Income Law
for the State, in the understanding that, from all the resources affected to the MASTER GUARANTEE TRUST, the corresponding
percentage shall be allocated as exclusive guarantee of the PROJECT. Further, in the event that such guarantee is no longer
sufficient, the SPF shall reconstitute such affectations, in such a manner that the amount of the guarantee shall remain
available throughout the term of this APP. The MASTER GUARANTEE TRUST shall identify, in a precise manner, the resources
corresponding to the guarantee established for the benefit of the PROJECT.

 

		47.	CONSTRUCTION GUARANTEE: Means the bond issued in terms of the APP, equal to 10% (ten
percent) of the COST OF THE SYSTEM, which the DEVELOPER shall deliver to CEA within the term established in
Clause Twenty Eighth, to guarantee compliance of its obligations arising from the APP, including the payment of the conventional
penalties caused by its breach of the APP with respect to the construction, equipment and TESTS of the SYSTEM.

 

		48.	OPERATION GUARANTEE: Means the bond issued in terms of the APP, equal to 10% (ten
percent) of the yearly payment of the CONSIDERATION in force at that time for the portion corresponding to the T2 + (T3
X Q) Tariffs, using the last invoice paid to the DEVELOPER, or in the event of the first year of the OPERATION PERIOD,
the amount corresponding to the production volume communicated to the DEVELOPER pursuant to Clause Sixteenth of this
APP shall be used as the base, which the DEVELOPER, shall deliver to CEA on the DATE OF COMMENCEMENT OF
OPERATIONS and which shall be renewed yearly within the first ten calendar days following the commencement of the corresponding
tax year and shall remain in force until the DELIVERY and operation of the SYSTEM to CEA, and the delivery
of the APP TERMINATION GUARANTEE by the DEVELOPER to CEA, pursuant to this APP, moment in which such
guarantee shall be returned to the DEVELOPER. This guarantee substitutes the CONSTRUCTION GUARANTEE, and shall be
applied, if applicable, to guarantee the compliance of its obligations arising from the APP, and the payment of the conventional
penalties relating to the operation and maintenance of the SYSTEM.

 

		49.	APP TERMINATION GUARANTEE: Means the bond equal to the yearly payment of T2 plus (T3 X Q)
for the last year of operation, which the DEVELOPER shall deliver to CEA to replace the OPERATION GUARANTEE,
with a term of 6 (six) months counted as from the date of execution of the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE
DELIVERY in terms of this APP, to guarantee the hidden defects in which it incurred during the operation period of the
SYSTEM or quality defects of the materials used, issued in terms of the APP.

 

    	 	 	19

    
		 

 

    

 

		50.	APP EFFECTIVENESS COMMENCEMENT: The date on which the effectiveness of the APP commences,
once the conditions of Clause FORTY FOURTH have been met.

 

		51.	INPC: National Consumers Prices Index, published monthly by the National Institute of Statistics
and Geography in the Official Gazette of the Federation and, in absence thereof, the index established in its place to measure
the increase of prices.

 

		52.	IVA: Value Added Tax pursuant to the Value Added Tax Law published in the Official Gazette
of the Federation on December 29, 1978, as amended.

 

		53.	LAPPEBC: Public Private Partnerships Law for the State of Baja California.

 

		54.	APPLICABLE LAWS: All the Mexican laws, treaties, regulations, decrees, Mexican Official
Standards, rules, decisions, orders, authorizations, resolutions, jurisprudence, providences, interpretations or directives issued
by any GOVERNMENTAL AUTHORITY with jurisdiction and/or competence relating to the subject-matter of the PUBLIC BIDDING
and the APP.

 

		55.	WASTE WATER CONDUCTION LINE: The conduction line for the transport of WASTE WATER
or any liquid residue from the SEAWATER DESALINATION PLANT until the final point of disposition.

 

		56.	LPS: Water volume unit established in liters per second.

 

		57.	ENVIRONMENTAL IMPACT MANIFEST: Document that shall be drafted and submitted by the DEVELOPER
to the competent GOVERNMENTAL AUHTORITY, in terms of the applicable provisions of the General Law of Ecologic Equilibrium
and Environmental Protection and its Regulations respect of the Evaluation of the Environmental Impact, through which it is informed,
based on studies, the potential and significant environmental impact, , that the PROJECT WORKS and operation of the SYSTEM
would cause, as well as the way to avoid or mitigate it, in the event that it is negative.

 

		58.	QUALITY ASSURANCE HANDBOOK: The handbook to ensure the quality of the design, project and
construction of the SYSTEM, which shall be based in the preliminary quality assurance handbook delivered as part of the
PROPOSAL.

 

		59.	OPERATION AND MAINTENANCE HANDBOOK: Is the document that the DEVELOPER shall deliver
to CEA, for its approval, with at least 1 (one) month of anticipation to the DATE OF COMMENCEMENT OF OPERATIONS.
This document shall contain a full description of the works and of all the equipment that comprises the SYSTEM, as well
as all the procedures relating to the development of the water treatment process and the aqueduct, as well as the data base to
sustain the maintenance program of all the mechanical and electromechanical equipment.

 

    	 	 	20

    
		 

 

    

 

		60.	MUNICIPALITIES: The Municipalities of the State of Baja California and their public entities.

 

		61.	NON-OBJECTION: Means the document or the implied acceptance issued by CEA and/or
the SUPERVISION, by which the partial or complete verification of the EXECUTIVE PROJECT shall be evidenced.

 

		62.	CIVIL WORKS: The structures for the COLLECTION or intake, CONDUCTION LINE,
pumping sumps, pumping stations, auxiliary and complementary crossing works, and any other work required by the EXECUTIVE PROJECT
in connection with the construction and SET-UP OF OPERATIONS of the SYSTEM, which shall be prepared in accordance
with the technical specifications, including but not limited to: clearance, excavation clearance, excavations, leveling, embankments,
cuts, breakwaters, wells, filtering galleries, asphalted and non-asphalted areas, sewer drains and pipelines, contention walls,
foundations, dockages, tanks, tunnels, bridges, siphons, crossing structures, green and ecologic areas, direct maritime intake,
drilling of wells or sumps, parking and buildings areas, among others.

 

		63.	COLLECTION WORKS: Also known as intake works, is the structure or group of structures whose
design, construction and operation complies with the purpose of capturing, extracting and collecting INTAKE WATER, in this
case from the sea, for its delivery to the SEAWATER DESALINATION PLANT. It shall be regularly comprised by CIVIL WORKS
and electromechanical equipment, being possible for it to be the waste water intake from the Juarez thermoelectric plant.

 

		64.	PROJECT WORKS: All the permits, authorizations and licenses; the planning, engineering,
the supply of material and equipment, the CIVIL WORKS, the COLLECTION WORKS, the ELECTROMECHANICAL WORKS,
the auxiliary facilities, the TESTS, the technical support and the other works and services of any nature, that shall be
supplied or carried out by the DEVELOPER and which are within the scope specified in the APP for the termination
of the SYSTEM, distinguishing from the works of each of the stages of the PROJECT.

 

		65.	ELECTROMECHANICAL WORKS: The incorporation of all the equipment and control systems, ducts,
electric systems, instrumentation and accessories related with the EXECUTIVE PROJECT, in accordance to the technical specifications.

 

		66.	PARTIES: CEA and the DEVELOPER.

 

    	 	 	21

    
		 

 

    

 

		67.	CONSTRUCTION PERIOD: Means the period of 34 (thirty-four) months (subject to any applicable
extensions pursuant to this APP) for the preparation of the EXECUTIVE PROJECT, construction and equipment of the
SYSTEM, counted from the date of the MINUTES OF COMMENCEMENT OF CONSTRUCTION.

 

		68.	INVESTMENT PERIOD: Means the period comprised by 36 (thirty-six) months (subject to any
applicable extensions pursuant to this APP) counted from the date of the MINUTES OF COMMENCEMENT OF THE APP, during
which the DEVELOPER shall carry out the preparation of the EXECUTIVE PROJECT, the CIVIL WORKS and the TESTS
for the SET-UP OF OPERATIONS of the SYSTEM and PROJECT WORKS.

 

		69.	OPERATION PERIOD: Means the period comprised by 37 (thirty-seven) years (subject to any
applicable extensions pursuant to this APP) during which the DEVELOPER shall be in charge of the operation, conservations,
update and maintenance of the SYSTEM to extract, collect, desalinate, potabilize, conduct and supply the produced POTABLE
WATER to the DELIVERY POINT to CEA and to dispose of the WASTE WATER, pursuant to the BASES OF THE
PUBLIC BIDDING, counted from the issuance of the MINUTES OF COMMENCEMENT OF OPERATIONS.

 

		70.	TESTING PERIOD: Means the period of 2 (two) months (subject to any applicable extensions
pursuant to this APP) to carry out the TESTS, counted from the date of the MINUTES OF TERMINATION OF THE CONSTRUCTION.

 

		71.	EXPERT: The specialized person in the subject-matter, appointed pursuant to this APP,
to solve any technical controversy.

 

		72.	PESOS: Legal currency of the United States of Mexico.

 

		73.	CONTIGENCIES OR SAFEKEEPING ACTIONS PLAN: Means the group of structural actions and normativity
proposed and budgeted by the DEVELOPER to guarantee compliance of the production-delivery of POTABLE WATER before
negative unforeseeable events that force a temporary suspension due to failure or damages to any part of the SYSTEM for
the time of its repair and the reestablishment of the ordinary operating conditions.

 

		74.	SEAWATER DESALINATION PLANT: Industrial premises that shall be built by the DEVELOPER,
either by itself or through third parties, for the management, pre-treatment, desalinization and potabilization (post-treatment)
of the INTAKE WATER, with a normal production capacity of POTABLE WATER in 2 stages, each of 2.2 m3/second during
all the OPERATION PERIOD for each stage.

 

    	 	 	22

    
		 

 

    

 

		75.	FIXED PRICE: Means the price that the DEVELOPER assigned to each of the MILESTONES
defining the execution of a structure, equipment or component of the works corresponding to the SYSTEM, pursuant to Format
1 of the ECONOMIC PROPOSAL and which shall serve to determine the payment of the ESTIMATE of the works.

 

		76.	CALENDARED SCHEDULE: Document that shall be delivered by the DEVELOPER and which
shall contain the dates of each of the activities that it shall develop to comply with each MILESTONE.

 

		77.	PROPOSAL: The group of documents requested in the BASES OF THE PUBLIC BIDDING jointly
integrated by the TECHNICAL PROPOSAL and the ECONOMIC PROPOSAL.

 

		78.	ECONOMIC PROPOSAL: The portion of the PROPOSAL containing the Economic and Financial
information of the PROJECT.

 

		79.	TECHNICAL PROPOSAL: The portion of the PROPOSAL containing the Technical information
of the PROJECT.

 

		80.	PROJECT: Construction, financing and operation of a desalination plant in the Municipality
of Playas de Rosarito, with a capacity of up to 4.4 m3/second in two stages: the first with a capacity of 2.2 m3/second, and a
aqueduct to the delivery point in tank 3, Municipality of Tijuana and the expansion of the mentioned tank to 20,000 m3; and the
second with a capacity of 2.2 m3/second, and a aqueduct from tank 3 to the potabilization plant of El Florido, Municipality of
Tijuana, including the design, preparation of the executive project, construction, electromechanic equipment and functionality
tests of the desalination plant and the aqueducts, as well as the operation, conservation and maintenance, including the conduction
and delivery of up to 4,400 liters per second, the treatment and disposal of the waste water, during an operation period of 37
years.

 

		81.	EXECUTIVE PROJECT: Group of detailed activities that shall be carried out by the DEVELOPER,
within which the following shall be carried out, in an enunciative but not limitative manner, basic, specific, complementary and
detailed studies for the SYSTEM, as well as the technical documents, specifications, draft projects, draft budgets, programs,
handbooks and other necessary information for the design, procedures, project, budget, acquisition, supply engineering, equipment,
construction, installations, premises, TESTS, SET-UP OF OPERATIONS, operation, conservation, maintenance, technological
updates and DELIVERY of the SYSTEM described in its PROPOSAL, to the satisfaction of CEA.

 

		82.	TESTS: Preset procedures for the verification of the functionality and quality of the SYSTEM
that shall be carried out in each unit of collection, production, conduction and management of POTABLE WATER and WASTE
WATER, pumping, operating within the design conditions, both manually and automatically, in accordance with the TESTS
protocol drafted by the DEVELOPER, following the execution of the APP.

 

    	 	 	23

    
		 

 

    

 

		83.	SET-UP OF OPERATIONS: The moment in which the TESTING PERIOD is concluded and therefore
the SYSTEM is considered to be in satisfactory operation conditions, commencing the OPERATION PERIOD.

 

		84.	DELIVERY POINT: The delivery point shall be at the Tank 3, for the first stage of the PROJECT
and at El Florido for the second stage of the PROJECT, as established in the BASES OF THE PUBLIC BIDDING. If
applicable, CEA may request in writing, a new DELIVERY POINT, or additional DELIVERY POINTS, pursuant to Clause
Third, section 6 of this APP, in the understanding that the DEVELOPER shall be responsible for the volume and quality
of the POTABLE WATER until the MEASURING POINT.

 

		85.	MEASURING POINT; The measuring point of the POTABLE WATER, for purposes of billing
the CONSIDERATION, as well as the quality of the POTABLE WATER, shall be installed at the exit of the SEAWATER
DESALINATION PLANT, regardless of the installation of additional measuring point in the SYSTEM for other purposes.

 

		86.	WORKS RESIDENT: Public officer appointed in writing by CEA and SIDUE, having
the sufficient knowledge, skills, experience and capacity to carry out the supervision on behalf of SIDUE and CEA
and to agree with the DEVELOPER the changes and amendments to the SYSTEM. He shall have the authority determined
in this APP and in the provisions of the RLAPPEBC.

 

		87.	RLAPPEBC: Regulations of the Public Private Partnerships Law for the State of Baja California.

 

		88.	SCT: Ministry of Communication and Transport.

 

		89.	SEMARNAT: Secretary of the Environment and Natural Resources

 

		90.	EASEMENT: Real rights over real estate of third parties, imposed by legal provision or agreed
for the benefit of the real estate that the DEVELOPER uses for the construction or operation of the PROJECT WORKS
comprising the SYSTEM, in terms of the federal civil legislation or the civil legislation of the State of Baja California.

 

		91.	SHCP: Ministry of Finance and Public Credit.

 

		92.	SIDUE: Ministry of Infrastructure and Urban Development of the State of Baja California.

 

    	 	 	24

    
		 

 

    

 

		93.	SYSTEM: The group of necessary premises for the delivery to CEA of the yearly volume
of POTABLE WATER, including, without limitation, the COLLECTION WORKS and collection of INTAKE WATER, desalination
treatment thereof through the proposed method, potabilization, regulation, pumping and conduction to the DELIVERY POINT,
supply of energy, as well as those relating to the management and disposal of WASTE WATER, supply and regulation of electric
energy.

 

		94.	SITE: The real estate in which the DEVELOPER shall build the COLLECTION WORKS
of INTAKE WATER, treatment and desalination thereof, potabilization, regulation, pumping and conduction lines to the DELIVERY
POINT, which must be authorized by CEA.

 

		95.	TDS: Total dissolved solids.

 

		96.	SUPERINTENDENT: The representative of the DEVELOPER to whom the latter has granted
the most ample power of attorney possible for acts of administration; who shall be in charge of and the responsible for the development
of all the WORKS, stages and aspects of the EXECUTIVE PROJECT, jointly, from the first coordination meeting for the
commencement of the WORKS with the WORKS RESIDENT and the SUPERVISION, until the delivery of its premises
to CEA.

 

		97.	SUPERVISION: The company that shall be hired by the ADMINISTRATION TRUST prior instruction
of the DEVELOPER, to be chosen by the latter among three duly qualified nominees proposed by CEA to its sole discretion,
to verify that the works for preparation of the EXECUTIVE PROJECTS, construction, equipment and TESTS of the SYSTEM
are carried out pursuant to the specifications and quality of the established laws and the APP, which shall have the authority
determined in the APP and in article 107 of the RLAPPEBC.

 

		98.	TERMS OF REFERENCE: The document that comprises an integral part of the BASES OF THE
PUBLIC BIDDING and which contains the characteristics, scope, technical specifications and other aspects relating to the SYSTEM,
attached as APPENDIX 1 of the BASES OF THE PUBLIC BIDDING.

 

		99.	WORKS: All the actions relating to the EXECUTIVE PROJECT, construction of the works,
equipment, facilities, elements, procedures, compliance of norms, analyses, TESTS, measurements, necessary supply and services
for the execution of the EXECUTIVE PROJECT and particularly of the SYSTEM mentioned in the BASES OF THE PUBLIC
BIDDING.

 

    	 	 	25

    
		 

 

    

 

CLAUSES 

 

FIRST.- SUBJECT-MATTER OF THE APP.

 

CEA entrusts the DEVELOPER
and the later obliges itself to render in favor of the former the services, for the:

 

“CONSTRUCTION, FINANCING AND OPERATION
OF A DEASLINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

CONSISTING OF:

 

A DESALINATION PLANT WITH A CAPACITY
OF UP TO 4.4 M3/SECOND IN TWO STAGES: THE FIRST WITH A CAPACITY OF 2.2 M3/SECOND, AND AN AQUEDUCT TO THE DELIVERY POINT IN TANK
3, MUNICIPALITY OF TIJUANA AND THE EXPANSION OF THE MENTIONED TANK TO 20,000 M3; AND THE SECOND WITH A CAPACITY OF 2.2 M3/SECOND,
AND AN AQUEDUCT FROM TANK 3 TO THE POTABILIZATION PLANT OF EL FLORIDO, MUNICIPALITY OF TIJUANA, INCLUDING THE DESIGN, PREPARATION
OF THE EXECUTIVE PROJECT, CONSTRUCTION, ELECTROMECHANIC EQUIPMENT AND FUNCTIONALITY TESTS OF THE DESALINATION PLANT AND THE AQUEDUCTS,
AS WELL AS THE OPERATION, CONSERVATION AND MAINTENANCE, INCLUDING CONDUCTION AND DELIVERY OF UP TO 4,400 LITERS PER SECOND, TREATMENT
AND DISPOSAL OF THE WASTE WATER, DURING AN OPERATION PERIOD OF 37 YEARS. 

 

For purposes of which the DEVELOPER
shall carry out the PROJECT, pursuant to the provisions of this APP and its Exhibits.

 

For such purposes, the yearly guaranteed
volume of both stages of the PROJECT shall be of 131.2 million cubic meters, which are the equivalent to 4,162 LPS of POTABLE
WATER, from which 65.6 million cubic meters, equivalent to 2,081 LPS, shall be for the first stage, and 65.6
million cubic meters, equivalent to 2,081 LPS, shall be for the second stage, at the MEASURING POINT, that is, at
the exit of the SEAWATER DESALINATION PLANT, notwithstanding its conduction to the DELIVERY POINT, as well as the
disposal of the WASTE WATER. 

 

The construction of the second stage of
the PROJECT shall start so that the commencement of operations of such second stage is carried out on July 2024. To that
effect, in due course, the PARTIES shall agree in writing the specific terms and conditions for the second stage of the
PROJECT, as well as those that are different to the provisions of this APP, applicable to the second stage, including
without limitation, the start of the corresponding construction and operations. The foregoing pursuant to the provisions of the
PROPOSAL and the BASES OF THE PUBLIC BIDDING.

 

CEA acknowledges that in the event
that the economic conditions at the time of start of the construction of the second stage of the PROJECT are different to
those considered by the DEVELOPER in its PROPOSAL, the investment values shall be reviewed, which could imply an
adjustment to the CONSIDERATION.

 

    	 	 	26

    
		 

 

    

 

For the rendering of the mentioned services,
it shall be necessary to carry out the basic and complementary studies and the complete construction of the SYSTEM complying
with the quality and quantity conditions determined for the POTABLE WATER in CLAUSE SIXTEENTHN of this APP,
in addition to its operation, equipment replacement and maintenance for a period of XX 37 (thirty-seven) years, counted as from
the DATE OF COMMENCEMENT OF OPERATIONS, which is coincident with the date of execution of the MINUTES OF COMMENCEMENT
OF OPERATION, for which the DEVELOPER must finance the TOTAL COST OF THE SYSTEM.

 

Upon expiration of the mentioned term,
the DEVELOPER shall deliver the ownership of the SYSTEM and its operation, gratuitously and without liens, in favor
of CEA, for which purpose, all the assets comprising the SYSTEM, including without limitation the SEAWATER DESALINATION
PLANT, shall be in functioning conditions under the ordinary operation conditions for which they were constructed, pursuant
to this APP and its exhibits, except for the ordinary wear and tear that the SYSTEM suffers to such date.

 

In absence of an express provision in this
APP, in the LAPPEBC and its Regulations, the following will be applicable in a suppletory manner:

 

		I.	The Code of Commerce;

 

		II.	The Civil Code for the State of Baja California;

 

		III.	The Law of Procedures for Acts of the Public Administration of the State of Baja California; and

 

		IV.	The Civil Procedures Code for the State of Baja California.

 

SECOND.- TERM OF THE APP

 

The effectiveness of this APP shall
commence on the date of execution of this APP and shall conclude 37 (thirty-seven) years after the date of execution of
the MINUTES OF COMMENCEMENT OF OPERATIONS of the first stage of the PROJECT, date on which the PERIOD OF OPERATION
concludes, which shall coincide with the date of execution of the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.

 

The term of the APP includes the
INVESTMENT PERIOD of the first stage of the PROJECT, which shall commence once the MINUTES OF COMMENCEMENT OF
THE APP have been issued.

 

The term of the APP may only be
interrupted or early terminated under the conditions established in this APP and in the LAPPEBC and the RLAPPEBC.
In which case, the applicable tariffs of the CONSIDERATION shall continue to be payable by CEA pursuant to the
provisions of this APP.

 

    	 	 	27

    
		 

 

    

 

THIRD. DESCRIPTION OF THE WORKS.

 

To comply with the subject-matter of this
APP, the DEVELOPER obliges itself to carry out the WORKS which scope is established in Chapter 1.5 of the
APPENDIX 1 of the BASES OF THE PUBLIC BIDDING contained in the EXHIBIT 5 of this APP. The WORKS
shall include, but will not be limited to:

 

		1.	The planning, preparation of basic and complementary studies, designs, budgeting, EXECUTIVE
PROJECT, construction, equipment and maintenance of the PROJECT WORKS for the correct operation of the SYSTEM.

 

		2.	The preparation and delivery of the QUALITY ASSURANCE HANDBOOK prior to the MINUTES OF
COMMENCEMENT OF CONSTRUCTION, which is attached to this APP as EXHIBIT 6.

 

		3.	The preparation and delivery of the Protocol of TESTS and SET-UP OF OPERATIONS of
the SYSTEM, prior to the MINUTES OF COMMENCEMENT OF OPERATION, which shall be attached to this APP as EXHIBIT
7.

 

		4.	Carry out the TESTS and SET-UP OF OPERATIONS of the SYSTEM.

 

		5.	The assurance, operation, equipment replacement, conservation and maintenance of the SYSTEM
during 37 (thirty-seven) years, counted as from the issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATION and
until the termination of the OPERATION PERIOD and execution of the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.

 

		6.	The delivery of the guaranteed yearly volume of POTABLE WATER established in Clause FIRST,
during the OPERATION PERIOD, supplied at the DELIVERY POINT. In the event that CEA requires so in writing,
the DEVELOPER shall be obliged to deliver part of the volume of POTABLE WATER at places different to the DELIVERY
POINT; in this latter event, the additional costs of construction of the facilities and the operation and maintenance required
for such delivery, including the permits, licenses and everything related therewith, shall be at the expense of CEA, and
the CONSIDERATION for the monthly supply of POTABLE WATER shall be such established in terms of this APP with
the corresponding necessary adjustments. The foregoing in the understanding that in any event, the compliance by the DEVELOPER
regarding the volume or quality of water required in this APP shall be measured at the MEASURING POINT, that is,
at exit of the SEAWATER DESALINATION PLANT.

 

		7.	The DELIVERY of the SYSTEM and its operation to CEA, gratuitously and without
liens and in ordinary functioning conditions, upon expiration of the term of this APP, pursuant to Clause TWENTY FIFTH
and EXHIBIT 17 of this APP.

 

    	 	 	28

    
		 

 

    

 

The DEVELOPER shall be obliged to
deliver to CEA the necessary reports to comply with the provisions of the QUALITY ASSURANCE HANDBOOK, during the
time in which it operates the SEAWATER DESALINATION PLANT. The preparation and delivery of these reports shall be monthly
during the first 5 BUSINESS DAYS of each month and extraordinarily prior written request by CEA with an anticipation
of at least 5 BUSINESS DAYS.

 

FOURTH. TERMS FOR EXECUTION.

 

The preparation of the EXECUTIVE PROJECT,
construction, equipment and TESTS of the first stage of the PROJECT shall be carried out by the DEVELOPER
within a term that shall not exceed 36 (thirty-six) months counted as from the date of the MINUTES OF COMMENCEMENT OF THE APP,
considering in an enunciative but not limited manner, 6 (six) months for the preparation of the EXECUTIVE PROJECT, 28 (twenty-eight)
months for the construction and equipment of the first stage of the PROJECT and 2 (two) months for the TESTING PERIOD.
The foregoing, pursuant to the proposed CALENDARED SCHEDULE, that is attached hereto as EXHIBIT 8. Notwithstanding
the foregoing, the PARTIES agree that as long as the INVESTMENT PERIOD of the first stage of the PROJECT does
not exceed 36 (thirty-six) months, the DEVELOPER may carry out adjustments in the partial terms mentioned above, consequently
adjusting the corresponding definitions.

 

Irrespective of the foregoing or of any
other disposition contrary to the contained in the BASES OF THE PUBLIC BIDDING, in the event of delays in the CALENDARED
SCHEDULE that are not attributable to the DEVELOPER or that result from an ACT OF GOD, a FORCE MAJEURE EVENT
or a CHANGE IN LAW, the terms referred in this clause shall be extended for a period equivalent to the delay attributed
to such circumstances. Likewise, CEA shall compensate the DEVELOPER for the costs and expenses that such delay would
represent, by means of an adjustment to the T1 (FIXED INVESTMENT TARIFF) to reflect such costs and expenses as part of the
investment, provided they are duly justified and documented. On the other hand, in the event of a delay to the CALENDARED SCHEDULE
due to non-justified causes exclusively attributable to the DEVELOPER, the financial costs and incurred expenses during
the additional terms, as long as such are prolonged beyond the INVESTMENT PERIOD corresponding to the first stage of the
PROJECT, shall be fully covered by the DEVELOPER. The foregoing, except for the additional costs incurred by the
DEVELOPER due to (i) a breach by CEA to any of its obligations under this APP ̧(ii) an ACT OF GOD,
FORCE MAJEURE EVENT or CHANGE IN LAW; (iii) additional or different works or services to those set forth in this
APP; and (iv) delays or suspensions in the rendering of the services, as requested by or attributable to, CEA; in
such events, the additional costs shall be considered in the payment of the CONSIDERATION, which shall be increased in the
additional cost incurred or to be incurred by the DEVELOPER in the corresponding invoice.

 

    	 	 	29

    
		 

 

    

 

		1.	EXECUTIVE PROJECT.

 

		(a)	The DEVELOPER shall be in charge of preparing and delivering to CEA and the SUPERVISION
the EXECUTIVE PROJECT of the PROJECT, or its partialities, within the term established in the PROPOSAL submitted
in the PUBLIC BIDDING, which shall not exceed 6 (six) months, counted as from the date of execution of the MINUTES OF
COMMENCEMENT OF THE APP. Pursuant to the following section (b), the DEVELOPER shall be entitled to submit partially
the EXECUTIVE PROJECTS for each of the works, to the NON-OBJECTION of CEA and the SUPERVISION, in such
a manner that it can comply with the terms foreseen for the construction of the PROJECT WORKS within the CALENDARED SCHEDULE.

 

The PARTIES acknowledge
and agree that, in benefit of the PROJECT, the DEVELOPER, at its exclusive discretion, may commence the preparation
of the EXECUTIVE PROJECT or, if applicable, of its partialities, before the APP EFFECTIVENESS COMMENCEMENT.

 

		(b)	CEA and the SUPERVISION shall jointly have a maximum term of 30 (thirty) BUSINESS
DAYS, counted as from the delivery of the EXECUTIVE PROJECT, in the event that such is submitted in its entirety and
not in partialities, to grant the NON-OBJECTION or to formulate observations to the EXECUTIVE PROJECT of the PROJECT,
to verify that it conforms to the provisions of the BASES OF THE PUBLIC BIDDING and the TECHNICAL PROPOSAL. In the
event that CEA and the SUPERVISION do not make any statement during the mentioned term, as applicable, it shall be
understood that the EXECUTIVE PROJECT has the NON-OBJECTION and, therefore, the DEVELOPER shall be entitled
to commence the construction of the corresponding works. In the event that there were no observations whatsoever, the documents
delivered by the DEVELOPER shall be considered as approved. CEA and/or the SUPERVISION, shall have a single
opportunity to make observations to the EXECUTIVE PROJECT or, if applicable, to its partialities. Once such observations
are made, in the event that they are applicable, the DEVELOPER shall have a term of 10 (ten) BUSINESS DAYS to carry
out the corresponding adjustments to the EXECUTIVE PROJECT or, if applicable, to its partialities and submit them to CEA
and the SUPERVISION, solely for information purposes, and not for purposes of a new review, provided that it has complied
with the viable observations. CEA shall not make unjustified or unreasonable observations to the EXECUTIVE PROJECT.
Upon lapsing of the term of 30 (thirty) BUSINESS DAYS counted as from the delivery of the EXECUTIVE PROJECT, in the
event that such is delivered in its entirety and not in partialities, and if applicable, the additional term of 10 (ten) BUSINESS
DAYS for adjustments, the DEVELOPER may proceed to commence the construction of the PROJECT WORKS.

 

Notwithstanding the foregoing,
the PARTIES agree that the DEVELOPER may make partial deliveries to CEA and the SUPERVISION of the
EXECUTIVE PROJECT to allow CEA and the SUPERVISION to carry out the review in partialities instead of in its
entirety, in the understanding that if the DEVELOPER elects to make partial deliveries of the EXECUTIVE PROJECT of
the PROJECT, once the corresponding partiality has been submitted, CEA and the SUPERVISION, shall have, jointly,
the term mentioned in the chart below to verify that the EXECUTIVE PROJECT complies with the provisions of the BASES
OF THE PUBLIC BIDDING and the TECHNICAL PROPOSAL contained in the PROPOSAL. It the event that CEA or the
SUPERVISION do not make any statement during such terms, as applicable, it shall be understood that such EXECUTIVE PROJECT
has the NON-OBJECTION and therefore the DEVELOPER shall be entitled to commence the construction of the corresponding
works.

 

    	 	 	30

    
		 

 

    

 

	Executive Project Work	 	Term of CEA and of the 

SUPERVISION for review
	 	 	 
	Civil Works Project	 	10 business days
	 	 	 
	Electromechanical Works Project 	 	10 business days
	 	 	 
	Maritime Collection Works Projects	 	10 business days
	 	 	 
	Potable Water Conduction Lines Project 	 	10 business days

 

In the event that the EXECUTIVE
PROJECT require, in a reasonable manner and considering the common practices of the industry, technical adjustments as a result
of the execution of the PROJECT in the field or arising from any other cause, including errors, imprecisions or incongruences
in the EXECUTIVE PROJECT itself, the DEVELOPER shall propose to CEA the amendments that it deems pertinent.
In the event that CEA determines that such are applicable, the DEVELOPER shall carry out the modifications at its
expense, without any liability or obligation for CEA of contributing any additional resources, of any kind.

 

		(c)	The delivery and NON-OBJECTION, whether total or partial, shall be evidenced in each document
or blueprint delivered by the DEVELOPER to CEA and the SUPERVISION, by means of a seal that indicates the
date of reception of the document by CEA and the SUPERVISION and, if applicable, the date of the NON-OBJECTION
by them.. The NON-OBJECTION may be implied, for the simple lapse of the previously mentioned terms, in which case it shall
not require written evidence expressing the NON-OBJECTION.

 

    	 	 	31

    
		 

 

    

 

		2.	CONSTRUCTION, EQUIPMENT, TESTS AND SET-UP OF OPERATIONS.

 

		(a)	The construction and equipment of the PROJECT WORKS, shall be concluded in a period of up
to 34 (thirty four) months (subject to the extensions provided in this APP), counted as from the APP EFFECTIVENESS COMMENCEMENT
and shall conclude on the date of issuance of the MINUTES OF TERMINATION OF CONSTRUCTION. Upon termination of the construction
of all the works of the SYSTEM, the DEVELOPER shall have 2 (two) months to carry out the TESTS.

 

		(b)	During the construction and equipment stage of the PROJECT WORKS, per request of the DEVELOPER,
CEA shall inspect the progress of the PROJECT WORKS on a monthly basis, based on the ESTIMATES of the PROJECT
WORKS prepared by the DEVELOPER pursuant to the CALENDARED SCHEDULE and, if applicable, shall issue partial minutes
with respect to the satisfactory termination thereof.

 

		(c)	While the DEVELOPER carries out the TESTS of the SYSTEM, it shall notify in
writing to CEA and to the SUPERVISION, proposing a draft of the MINUTES OF CAPACITY, for them to be able to
verify the conditions in which the PARTIES shall issue the MINUTES OF COMMENCEMENT OF OPERATION. To that effect,
CEA and the SUPERVISION shall have a period of 5 (five) BUSINESS DAYS to verify such conditions during the
TESTING PERIOD.

 

(d)
The MINUTES OF CAPACITY shall not be issued in the event that the PROJECT does not comply with the capacity established
in this APP and its Exhibits, which shall be verified and recorded by CEA and the SUPERVISION. In such event,
only to the extent that the CAPACITY MINUTES may not be issued in the term scheduled for the INVESTMENT PERIOD due
to causes exclusively attributable to the DEVELOPER, the DEVELOPER shall be subject to the payment of the applicable
conventional penalties pursuant to the terms of the applicable provisions of this APP and shall be obliged to maintain in
force and effect the CONSTRUCTION GUARANTEE until the issuance of the MINUTES OF CAPACITY.

 

The PARTIES acknowledge and agree
that the INVESTMENT PERIOD shall be automatically extended and without any liability for the DEVELOPER, during the
time (i) required by the DEVELOPER to carry out the adjustments to the EXECUTIVE PROJECT that if applicable, result
inviable; and (ii) that it takes to verify the conditions in which the MINUTES OF CAPACITY shall be issued, in the event
that it exceeds the 5 (five) BUSINESS DAYS term mentioned in section (c).

 

FIFTH. EXECUTION OF THE PROJECT AND
FINANCING.

 

The DEVELOPER obliges itself to
carry out the activities that comprise the PROJECT, in accordance with this APP, the EXECUTIVE PROJECT and
complying with the specifications established in this APP and its Exhibits. For such purposes, the DEVELOPER shall
provide all the materials, equipment, tools and specialized personnel required for the construction, equipment and SET-UP OF
OPERATIONS, in accordance with the information provided in the BASES OF THE PUBLIC BIDDING and subject to the provisions
of the PROPOSAL and the APP and its Exhibits.

 

    	 	 	32

    
		 

 

    

 

For the performance of the PROJECT,
the DEVELOPER shall be subject to the APPLICABLE LAWS related to construction, environmental impact, safety and hygiene,
as well as all other applicable matters.

 

Except as otherwise expressly provided
in this APP, the DEVELOPER is obliged to acquire all the necessary authorizations and rights for the exploitation
of the material and deposit banks, as well as any other necessary asset, different to those provided in CLAUSE EIGHT which,
if applicable, are required for the PROJECT, including the performance of the corresponding studies. In any event, should
additional assets, right and/or studies to those considered in the PROPOSAL be required, the CONSIDERATION shall
be adjusted in the corresponding proportion.

 

The DEVELOPER shall register on
a daily basis, systematically and permanently in the LOGBOOK, all the activities carried out for the execution of the PROJECT,
as well as those incidents that occur and affect or may affect the WORKS.

 

The DEVELOPER is obliged to appoint
the SUPERINTENDENT in writing, at the commencement of the WORKS, who shall be the link with the WORKS RESIDENT
and the SUPERVISION; who shall have sufficient power and authority to make decisions in everything related with the compliance
and execution of this APP. The DEVELOPER may replace the person acting as the SUPERINTENDENT from time to
time throughout the term of this APP, by written notice to CEA, at least, 5 (five) BUSSINESS DAYS in advance.

 

The DEVELOPER shall provide to the
WORKS RESIDENT, all the information requested in writing by the latter through the SUPERINTENDENT, and shall allow
the individuals authorized in writing by the WORKS RESIDENT, to carry out the visits and inspections that they deem necessary.
In both events, the WORKS RESIDENT shall notify to the SUPERINTENDENT at least 3 (three) BUSINESS DAYS in
advance to the delivery date of the corresponding information, or for carrying out the visits and inspections deemed necessary.

 

During the execution of the PROJECT,
in all those events in which certain level of specialization or professionalization is not required, the DEVELOPER shall,
preferably, use local labor, transport and material resources.

 

Likewise, the DEVELOPER shall be
solely liable to obtain and maintain in full force and effect, based exclusively on its own resources and without any kind of additional
resource to the CONSIDERATION at the expense of CEA, all the debt and capital financing necessary to carry out the
PROJECT, as well as to comply with the other obligations of the DEVELOPER pursuant to this APP, in the understanding
that the obligations of the DEVELOPER pursuant to this APP shall be subject to its capacity of obtaining such financing
and to the condition of achieving or not the financial closing, pursuant to Clause Forty Fourth of this APP. The DEVELOPER
shall make its best efforts to execute the FINANCIAL AGREEMENTS and to achieve the financial closing as soon as possible
after the execution of this APP. It shall be understood that the DEVELOPER has complied with its obligation of executing
the FINANCIAL AGREEMENTS and achieving the financial closing once it evidences having access to the necessary resources.

 

    	 	 	33

    
		 

 

    

 

CEA shall support the DEVELOPER
in its efforts to achieve the execution of the FINANCIAL AGREEMENTS. To that effect, CEA shall, among others, in
a timely manner, make its best efforts to carry out all of the necessary and convenient acts to the satisfaction of the CREDITORS
or potential CREDITORS, to implement the recommendations that are reasonably requested by the CREDITORS or potential
CREDITORS to ensure the bankability of the PROJECT and provide all the documents and information related with itself
that the DEVELOPER requires, or that is reasonably appropriate for this kind of operation in accordance with market practices,
to speed up the securing of the required financing for the PROJECT by the DEVELOPER. CEA shall deliver such
documents and information as soon as reasonably possible, but in no event in a term exceeding 10 (ten) BUSINESS DAYS, following
receipt of the written request of the DEVELOPER requiring such information, and the DEVELOPER shall execute such
confidentiality agreements that CEA reasonably deems appropriate with respect to the requested information, in the understanding
that such agreements shall allow it to reveal the information and documents provided for the mentioned purposes.

 

The PARTIES agree that, in the event
that, prior to the execution of the FINANCIAL AGREEMENTS, a relevant fluctuation in the reference values used for the delivery
of the ECONOMIC PROPOSAL occurs, which could significantly impact the PROPOSAL awarded by the AWARD, or, in
the event that the CREDITORS request the implementation of the reasonable recommendations to ensure the bankability of the
PROJECT, CEA and the DEVELOPER shall negotiate in good faith, and mutually and jointly agree, in writing,
a fair and reasonable adjustment mechanism that acknowledges such impact.

 

Irrespective of the foregoing, upon the
lapsing of 9 (nine) months following the date of submittal of the PROPOSAL, that is, January 21, 2017, the PARTIES
shall jointly analyze the existence of such fluctuations and, if such is the case, they shall negotiate in good faith, and mutually
and jointly agree, in writing, the aforementioned adjustment mechanism.

 

SIXTH. OPERATION OF THE SYSTEM.

 

The DEVELOPER shall be obliged to
operate and maintain the SYSTEM as from the execution of the MINUTES OF COMMENCEMENT OF OPERATION, subject to the
terms and conditions mentioned in EXHIBIT 5 of this APP.

 

The DEVELOPER shall be responsible
for the operation, conservation, maintenance and replacement of equipment, structures, buildings, roads, green areas, exterior
works, furniture, vehicles, facilities and principal and complementary systems in the Site, in the terms and conditions established
in the APP, its Exhibits and in the APPLICABLE LAWS and the operation regulations that shall be prepared by the DEVELOPER
and submitted to the approval of CEA, which, once they have been prepared and, if applicable, approved by the PARTIES.

 

    	 	 	34

    
		 

 

    

 

During the OPERATION PERIOD, CEA
and the DEVELOPER shall maintain permanently informed of the technological improvements, adjustments and innovations released
into the market in connection with the parts, components, equipment, processes, subsystems, patents and technologies used within
the SYSTEM, with the purpose of studying, analyzing and, if applicable, proposing their replacement or adaptation if such
produce an increase in efficiency and a reduction of costs that benefit both PARTIES. In the event that the DEVELOPER
acquires knowledge of efficiency increases or reduction of costs, within the 30 BUSINESS DAYS from the date on which it
has knowledge of the efficiencies increase and/or of the reduction in costs resulting from such technological improvements, adjustments
or innovations it shall submit to the approval of CEA, a cost-benefit study, also attaching the detailed analysis of the
related costs and expenses and their repercussion on the agreed CONSIDERATION, whether in its form or term, for the analysis
of CEA and, if applicable, the corresponding authorization. The modifications shall adjust to the following:

 

If the technological innovations do not
require any additional compensation nor imply a reduction of the obligations of the DEVELOPER, they may be agreed upon at
any moment.

 

If the modifications require additional
compensation, or imply a reduction of the obligations of the DEVELOPER, each and all of the following conditions shall have
to be met:

 

		a)	Compliance of the conditions mentioned in sections I, II or IV of article 106 of the LAPPEBC,
the necessity and benefits of the modifications, as well as the amount of additional compensation or reduction of obligations,
shall be evidenced with the opinion of independent experts;

 

		b)	During the first 2 (two) years immediately following the award of the PROJECT, the amount
of the modifications, in its whole, shall not exceed the equivalent of twenty percent of the agreed cost of the infrastructure,
as well as the consideration for the services during the first 12 (twelve) months of their rendering; and

 

		c)	When, after the first 2 (two) years of the award of the PROJECT ̧ the modifications
previously authorized and pending authorization, exceed as a whole the equivalent of twenty percent of the cost of the infrastructure,
as well as the consideration for the services during the first 12 (twelve) months of their rendering, they shall be expressly approved
by the director of CEA.

 

The DEVELOPER is obliged to develop
a program to train the necessary personnel indicated by CEA to attend emergencies, related with circumstances preventing
or that may prevent the operation of the SYSTEM by the DEVELOPER. Such program shall be submitted to the consideration
of CEA, within the 60 (sixty) BUSINESS DAYS prior to the DATE OF COMMENCEMENT OF OPERATIONS. CEA shall
formulate its comments within the following 5 (five) BUSINESS DAYS and shall establish a date for the DATE OF COMMENCEMENT
OF OPERATIONS to take place. This training shall be limited to 1 (one) sole training program for no more than 12 (twelve) people.

 

    	 	 	35

    
		 

 

    

 

SEVENTH. REPLACEMENT OF EQUIPMENT, CONSERVATION
AND MAINTENANCE.

 

The DEVELOPER shall preserve and
maintain the SYSTEM, during all the OPERATION PERIOD, in normal conditions of operation and functioning, subject
to the terms and conditions mentioned in EXHIBIT 5 of this APP. Likewise, it shall be strictly subject to the OPERATION
AND MAINTENANCE HANDBOOK, that shall be prepared by the DEVELOPER, pursuant to the PROPOSAL, which shall be delivered
to CEA for approval, at least 1 (one) month in advance to the date foreseen as the DATE OF COMMENCEMENT OF OPERATIONS.
Such handbook shall establish and describe the policies, objectives and guidelines with respect to quality, personnel and technical,
human and material resources that shall be applied during these stages of the PROJECT, with the purpose of avoiding situations
that affect it. Any update or modification to these handbooks shall be submitted to CEA for its consideration.

 

The conservation and maintenance to which
the DEVELOPER is obliged implies the replacement or repair of all ordinary flaws and damages caused in the facilities of
the SYSTEM within the terms mutually agreed with CEA. Therefore, the DEVELOPER shall not be liable for such
replacements or repairs when the damages or flaws have been caused by actions or omissions of CEA or of third parties, or
when they arise from extraordinary or unforeseeable circumstances, including without limitation, ACTS OF GOD, FORCE MAJEURE
EVENTS or CHANGES IN LAW, as such expenses shall be covered by insurances at the expense of the DEVELOPER, pursuant
to the provisions of this APP, and up until the amount corresponding to them.

 

The DEVELOPER shall inform CEA
with at least 10 (ten) BUSINESS DAYS of anticipation, the ordinary periods of conservation and maintenance which the DEVELOPER
shall try to carry out in an escalated manner to avoid the complete stop of the SEAWATER DESALINATION PLANT. However, in
those cases in which the SEAWATER DESALINATION PLANT is completely stopped due to the ordinary conservation and maintenance
or those in which, as a result of the conservation and maintenance actions, the DEVELOPER shall not able to deliver to CEA
the corresponding volume of POTABLE WATER, the DEVELOPER shall be excused of complying with the delivery of the corresponding
volume of POTABLE WATER. For purposes of the extraordinary or unforeseen conservation and maintenance periods, the PARTIES
shall agree the periods in which the SEAWATER DESALINATION PLANT shall be fully stopped (in which event, the DEVELOPER
shall be excused of complying with the delivery of the corresponding POTABLE WATER volume).

 

Deficiencies in the conservation and maintenance
of the SYSTEM that are detected by CEA during the OPERATION PERIOD shall be notified in writing by CEA
to the DEVELOPER, in order for them to be corrected by the DEVELOPER in the term mutually agreed with CEA. Notwithstanding
the foregoing, in the event that the DEVELOPER does not agree with the deficiencies notified by CEA, the DEVELOPER
may submit such disagreement to the procedure established in CLAUSE THIRTY FOURTH of this APP. The foregoing notwithstanding
the obligation of the DEVELOPER to pay the applicable conventional penalties established in CLAUSE THIRTY FIFTH of
this APP, when such deficiencies in the conservation and maintenance of the SYSTEM are exclusively attributable to
the DEVELOPER. The foregoing irrespective of enforcing, if applicable, the OPERATION GUARANTEE, pursuant to the provisions
of the APP.

 

    	 	 	36

    
		 

 

    

 

For purposes of the conservation and maintenance
of the SYSTEM, the DEVELOPER shall acquire and, if applicable, keep in the workplaces, the materials, supplies, devices,
equipment and spare parts, instruments, controls, pipelines, tools and other assets necessary for the ordinary functioning and
preventive and corrective attention that the maintenance of the SYSTEM requires, during the term of this APP.

 

The DEVELOPER shall register on
a daily basis, systematically and permanently in the LOGBOOK, all the activities carried out for the execution, conservation,
repair or replacement of equipment and the maintenance to the SYSTEM.

 

The operation, conservation, repair or
replacement of equipment and maintenance in terms of this APP, shall be in charge of the DEVELOPER during 444 (four
hundred and forty four) months following the date of issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATIONS.

 

EIGHTH. REAL ESTATE.

 

The DEVELOPER shall be responsible
of obtaining the EASEMENTS and rights of passage, as well as to obtain the authorizations for crossing of RIGHTS OF WAY
that allow access to the SITE, as such become necessary for each of the two stages of the PROJECT, in the understanding
that CEA shall aid the DEVELOPER in connection with any effort to obtain such EASEMENTS and RIGHTS OF WAY.

 

The DEVELOPER shall make its best
efforts in order to for the corresponding GOVERNMENTAL AUTHORITIES, CENTRALIZED AGENCIES, DESCENTRALIZED ENTITIES and/or
MUNICIPALITIES to carry out the procedures for the release of the RIGHTS OF WAY, for the construction, operation,
inspection and maintenance of the high tension electric energy supply line, in the real estate that are located outside of the
SEAWATER DESALINATION PLANT, in the understanding that CEA shall aid the DEVELOPER in any effort to obtain
the release of such RIGHT OF WAY.

 

The rights that the DEVELOPER has
or shall acquire shall be sufficient to allow the latter their use for the construction and operation of the SEAWATER DESALINATION
PLANT.

 

The agreements, authorizations and other
acts necessary for the pacific use and occupation of the SITE where the SEAWATER DESALINATION PLANT shall be built,
shall be obtained by the DEVELOPER, the latter being obliged to make a commercially reasonable effort to commence and develop
the works in such SITE and to operate it throughout the term of this APP within the terms established to that effect
in this APP.

 

    	 	 	37

    
		 

 

    

 

The acquisition and possession of the plot
of land in which the SEAWATER DESALINATION PLANT shall be constructed, shall be the exclusive responsibility of the DEVELOPER,
in terms of the APPLICABLE LAWS, for such purposes.

 

The DEVELOPER shall acquire the
possession and ownership of the real estate in which the SEAWATER DESALINATION PLANT shall be constructed, at the latest,
within the [30 (thirty) BUSINESS DAYS] following the execution of the FINANCIAL AGREEMENTS, being responsible for
their adequate use and assuming the purchase and sale obligations thereof, for which CEA shall have neither liability nor
obligation, before the DEVELOPER or before any third parties, except for the provisions of this APP and the payment
of contributions that may correspond in the terms of the APPLICABLE LAWS.

 

In the event of any contingency related
with the SITE, with the EASEMENTS and RIGHTS OF WAY that in its case are required, the DEVELOPER shall
assume the corresponding responsibility, having to exercise the corresponding actions and to notify CEA in a term no longer
than 5 (five) BUSINESS DAYS following the date of knowledge of such contingency.

 

On its part, CEA shall support the
efforts of the DEVELOPER, carrying out the necessary actions, in accordance with the APPLICABLE LAWS, to comply with
this clause.

 

Notwithstanding the foregoing, the DEVELOPER
is obliged to commence or continue with the execution of the PROJECT in the other fronts and segments of the SITE,
pursuant to the EXECUTIVE PROJECT. In the event that the corresponding contingency permanently affects the PROJECT,
the PARTIES shall mutually agree the pertinent adjustments to the EXECUTIVE PROJECT and to the CALENDARED SCHEDULE
and, if applicable, to the CONSIDERATION, without any liability for the DEVELOPER, including the delays in the DATE
OF COMMENCEMENT OF OPERATIONS that the foregoing may imply.

 

NINTH. OWNERSHIP OF THE ASSETS

 

The PARTIES agree that all the premises
and PROJECT WORKS, as well as all the materials and operative equipment comprising the SEAWATER DESALINATION PLANT
shall be destined exclusively to the rendering of the services subject-matter of this APP, throughout its term.

 

Upon expiration of the term of the APP,
the DEVELOPER shall transfer, gratuitously and free of any lien, in favor of CEA, the ownership of all technical
documentation (including without limitation: blueprints, memoirs, operation handbooks, studies and appraisals), and of the facilities,
equipment, spare parts, materials, moveable assets and real estate, rights arising from the agreements related to the real estate
on which the infrastructure of the SYSTEM shall be installed or constructed, supplies and accessories that comprise the
PROJECT, in terms of CLAUSE TWENTY FIFTH, issuing the necessary documents to evidence the transfer of such ownership
and its physical or legal delivery in the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.

 

    	 	 	38

    
		 

 

    

 

With respect to certain accessory, temporary
and compatible rights of use and exploitation over a surface of land within the Presidente Juarez Thermoelectrical Plant, the DEVELOPER
shall make its best efforts to cause that, at the renewal of the agreement from which such rights arise, CEA becomes co-tenant
and, if applicable, that, in its moment, such agreement is assigned to CEA.

 

By no means, shall the DEVELOPER
be owner of the water before, during or after the potabilization treatment, nor will it have any right over it or over its products
or sub-products for purposes different than compliance with this APP; therefore it shall not be able to commercialize it
in any way.

 

TENTH. PROCUREMENT OF PERMITS AND AUTHORIZATIONS.

 

The DEVELOPER and CEA oblige
themselves to procure, obtain and maintain in full force and effect each and every concessions, authorizations, licenses and permits
established as their responsibility in EXHIBITS 15 and 16 of this APP which are necessary during the INVESTMENT
PERIOD and the OPERATION PERIOD, that pursuant to the APPLICABLE LAWS and this APP are required for the
complete fulfillment of the subject-matter of this APP, in the understanding that the PARTIES shall aid each other,
to the extent necessary, in connection with any effort to obtain the necessary authorizations, licenses and permits, including
without limitation, the aid to facilitate communications among the DEVELOPER and the corresponding GOVERNMENTAL AUTHORITIES.

 

In the event that the DEVELOPER
cannot timely obtain or is unable to obtain the authorizations, licenses and permits referred to in this CLAUSE TENTH, in
spite complying with all the applicable requirements therefor and having the cooperation of CEA to obtain them, it shall
be considered that a FORCE MAJEURE EVENT has occurred.

 

ELEVENTH. CONSIDERATION FOR THE SERVICES

 

		1.	All of the services provided by the DEVELOPER under the APP, including without limitation
the desalination, potabilization, conduction and delivery of the INTAKE WATER and the execution of the PROJECT WORKS,
in accordance with the provisions of this APP, shall be determined with the following formula for purposes of its payment:

 

C = T1
+ T2 + (T3 X Q) +( T4 X Q)

 

Where:

 

C = Total monthly invoicing
without IVA, for the amortization of the investment for the construction, equipment and set-up of service of the SYSTEM,
as well as for the operation, conservation and replacement of the equipment of the SYSTEM in PESOS.

 

 T1=T1C+T1R

 

Where:

 

    	 	 	39

    
		 

 

    

 

T1 (FIXED INVESTMENT TARIFF)
= The monthly tariff without IVA in PESOS to cover the investment costs of the DEVELOPER, in the SYSTEM
for the resources from the FINANCIAL AGREEMENTS (T1C) and RISK CAPITAL (T1R) for the construction, equipment and
SET-UP OF OPERATIONS of the PROJECT. The T1 shall be paid during a term of 444 (four hundred and forty four) months
by CEA to the DEVELOPER, invariably, starting on whichever occurs first of (a) the issuance and execution of
the MINUTES OF COMMENCEMENT OF OPERATIONS of the SEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven)
counted as from the date of the MINUTES OF COMMENCEMENT OF THE APP, and shall be calculated pursuant to EXHIBIT 13.

 

TIC = The monthly tariff
without IVA in PESOS to pay for the amortization costs of the investment of the TOTAL COST OF THE SYSTEM carried
out by the DEVELOPER with resources from the FINANCIAL AGREEMENTS in the SYSTEM, for the preparation of the
EXECUTIVE PROJECT, construction, equipment and SET-UP OF OPERATIONS of the PROJECT, which shall be paid during
the term of 444 (four hundred and forty four) months by CEA to the DEVELOPER pursuant to Format 6 of Exhibit G Financial
Formats for the calculation of the CONSIDERATION of the ECONOMIC PROPOSAL, in the understanding that such tariff
shall be paid invariably as from whichever occurs first of (a) the issuance and execution of the MINUTES OF COMMENCEMENT
OF OPERATION of the SEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven) counted as from the date of the
MINUTES OF COMMENCEMENT OF THE APP. This T1C tariff shall be calculated pursuant to EXHIBIT 13.

 

T1R = The monthly tariff
without IVA in PESOS to pay for the amortization costs of the investment of the COST OF THE SYSTEM carried
out by the DEVELOPER with RISK CAPITAL in the SYSTEM, for the preparation of the EXECUTIVE PROJECT,
construction, equipment and SET-UP OF OPERATIONS of the PROJECT, which shall be paid during the term of 444 (four
hundred and forty four) months by CEA to the DEVELOPER pursuant to Format 7 of Exhibit G Financial Formats for the
calculation of the CONSIDERATION of the ECONOMIC PROPOSAL, in the understanding that such tariff shall be paid invariably
as from whichever occurs first of (a) the issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATION of the
SEAWATER DESALINATION PLANT, or (b) the month 37 (thirty seven) counted as from the date of the MINUTES OF COMMENCEMENT
OF THE APP. This T1R tariff shall be calculated pursuant to EXHIBIT 13.

 

In the understanding, however,
that:

 

Irrespective of the reason thereof,
in the event of a temporary suspension of works or a delay in their execution, or the occurrence of the early termination or rescission
of this APP during the INVESTMENT PERIOD, T1 shall be understood as T1 PROPORTIONAL, pursuant to the following:

 

    	 	 	40

    
		 

 

    

 

T1proportional=
T1Cproportional+ T1Rproportional

 

Where:

 

T1 PROPORTIONAL
.- The monthly tariff without IVA in PESOS to pay for the fixed costs of amortization of the investment of
the TOTAL COST OF THE SYSTEM effectively carried out or, if applicable, incurred by the DEVELOPER with resources
from the FINANCIAL AGREEMENTS and RISK CAPITAL in the SYSTEM for the construction, equipment and SET-UP
OF OPERATIONS of the PROJECT at any moment in which, regardless of the reason therefor, there is a temporary suspension
of the PROJECT WORKS or a delay in their execution, or an early termination or rescission of the APP occurs during
the INVESTMENT PERIOD. This tariff shall be paid by CEA to the DEVELOPER with NO EXCEPTION during the term
of 444 (four hundred and forty four) months pursuant to Formats 6 and 7 of “EXHIBIT G. Financial Formats for the calculation
of the CONSIDERATION” of the ECONOMIC PROPOSAL, invariably, as from the date originally foreseen for the payment
of the CONSIDERATION, that is, as from whichever occurs first of (a) the date of early termination of the APP,
or (b) the month 37 (thirty seven) counted as from the date of the MINUTES OF COMMENCEMENT OF THE APP. This tariff shall
be calculated pursuant to EXHIBIT 13, and shall be paid monthly according to the advance of the WORKS, as this tariff
is destined to the payment of the FINANCIAL AGREEMENTS and the RISK CAPITAL.

 

T1C PROPORTIONAL
.- The monthly tariff without IVA in PESOS to pay for the fixed costs of amortization of the investment of
the TOTAL COST OF THE SYSTEM effectively carried out or, if applicable, incurred by the DEVELOPER with resources
from the FINANCIAL AGREEMENTS in the SYSTEM for the construction, equipment and SET-UP OF OPERATIONS of the
PROJECT at any moment that, regardless of the reason therefor, there is a temporary suspension of the PROJECT WORKS
or a delay in their execution, or the occurrence of an early termination or rescission of the APP during the INVESTMENT
PERIOD. This tariff shall be paid by CEA to the DEVELOPER with NO EXCEPTION during the term of 444 (four hundred
and forty four) months pursuant to Format 6 of “EXHIBIT G. Financial Formats for the calculation of the CONSIDERATION”
of the ECONOMIC PROPOSAL, invariably, as from whichever occurs first of (a) the early termination of the APP,
or (b) the month 37 (thirty seven) counted as from the date of the MINUTES OF COMMENCEMENT OF THE APP. This tariff shall
be calculated pursuant to EXHIBIT 13, and shall be paid monthly, updated and according to the advance of the WORKS,
as this tariff is destined to the payment of the FINANCIAL AGREEMENTS.

 

    	 	 	41

    
		 

 

    

 

T1R PROPORTIONAL
.- The monthly tariff without IVA in PESOS destined to pay for the fixed costs of amortization of the investment
of the COST OF THE SYSTEM effectively carried out or, if applicable, incurred by the DEVELOPER with RISK CAPITAL
in the SYSTEM for the construction, equipment and SET-UP OF OPERATIONS  of the PROJECT at any moment that,
regardless of the reason therefor, there is a temporary suspension of the PROJECT WORKS or a delay in their execution or
the occurrence of an early termination or rescission of the APP during the INVESTMENT PERIOD. This tariff shall be
paid by CEA to the DEVELOPER with NO EXCEPTION during a term of 444 (four hundred and forty four) (XXX) months pursuant
to Format 7 of “EXHIBIT G. Financial Formats for the calculation of the CONSIDERATION” of the ECONOMIC
PROPOSAL, invariably, as from whichever occurs first of (a) the date of the early termination of the APP, or (b)
the month 37 (thirty seven) counted as from the date of the MINUTES OF COMMENCEMENT OF THE APP. This tariff shall be calculated
pursuant to EXHIBIT 13, and shall be paid monthly, updated and according to the advance of the WORKS, as this tariff
is destined to the payment of the RISK CAPITAL.

 

T2 (FIXED OPERATION AND MAINTENANCE
TARIFF) = The monthly global tariff without IVA in PESOS to pay for the fixed costs of operation, equipment replacement,
conservation and maintenance of the SEAWATER DESALINATION PLANT pursuant to the ECONOMIC PROPOSAL, the APP
and its EXHIBIT 13, including without limitation, the costs of the insurance agreements, the costs for the salaries of the
employees of the DEVELOPER, the payments to sub-contractors, cost of operation, conservation and preventive and corrective
maintenance of the SYSTEM, the costs of the bonds, plus the profit of the DEVELOPER for the rendering of the services,
labor and administration expenses. The costs included in this tariff are not related to the volume of water to be desalinated;
therefore, it shall be paid by CEA as from the moment of issuance of the MINUTES OF COMMENCEMENT OF OPERATION and
throughout the OPERATION PERIOD.

 

T3 (VARIABLE OPERATION AND MAINTENANCE
TARIFF).- It is the tariff per cubic meter without IVA in PESOS to pay for the variable costs of operation of
the SEAWATER DESALINATION PLANT pursuant to the ECONOMIC PROPOSAL of the DEVELOPER, this APP and the
EXHIBIT 13, including without limitation, chemical products and consumable materials and the supplies for the replacement
of the membranes.

 

T4.- It is the cost of electric
energy per cubic meter used to carry out the desalinization process of INTAKE WATER and the conduction used by the SYSTEM
until the DELIVERY POINT. The T4 is comprised by the guaranteed consumption of electric energy in kWh/m3, for the process
of desalination of the INTAKE WATER and pumping until the DELIVERY POINT, multiplied by the cost of energy in pesos/kWh.
The cost of energy that shall be considered is the official tariff for HT (high voltage transmission level) established by CFE
in its official website. The initial T4 is mentioned in the EXHIBIT 13 of this APP, which will be updated pursuant
to the terms of such Exhibit.

 

    	 	 	42

    
		 

 

    

 

Where:

 

T4 = Ce x Tcfe

 

Ce = The electric energy consumption
per cubic meter (kWh/m3) pursuant to Format 9 of the ECONOMIC PROPOSAL. In the event that the requested water volume differs
from the volume included in the mentioned Format 9, the consumption of electric energy may vary.

 

Tcfe = Official tariff published
in the official website of CFE for the high voltage transmission level (HT) per kw-hr for the corresponding month.

 

Q.- It is the volume of POTABLE
WATER in cubic meters measured at the exit of the SEAWATER DESALINATION PLANT which, in average shall be of 5’492,520
m3 monthly, considering an efficiency factor of 95%. For purposes of payment, Q represents the real volume in cubic meters registered
at the exit of the SEAWATER DESALINATION PLANT.

 

		2.	During the OPERATION PERIOD and, in the event that the SEAWATER DESALINATION PLANT
cannot operate for reasons exclusively attributable to the DEVELOPER, the T1 and T2 tariffs shall be paid, the latter provided
that the DEVELOPER continues delivering the corresponding POTABLE WATER volume. The foregoing irrespective of the
application of conventional penalties in which the DEVELOPER incurs for the breach of its obligations herein acquired.

 

		3.	In the event that the water production is less than the stipulated for reasons exclusively attributable
to the DEVELOPER, the DEVELOPER shall be entitled to the payment of the produced volumes irrespective of the applicable
conventional penalties.

 

		4.	In the event of CHANGES IN LAW, ACTS OF GOD or FORCE MAJEURE EVENTS and, as consequence
thereof, the SYSTEM cannot be partially or fully operated during the OPERATION PERIOD, then CEA shall pay
to the DEVELOPER, during the period of partial or complete suspension of the operation of the SYSTEM, all the T1,
T2 and the corresponding amounts of the T3 and T4, if any, plus the additional, reasonable and documented costs, arising as consequence
of the ACT OF GOD, FORCE MAJEURE EVENT or CHANGE IN LAW, and which the DEVELOPER could not have avoided, discounting
any resource from the insurance policies received by the DEVELOPER in respect to such CHANGE IN LAW, ACT OF GOD or
FORCE MAJEURE EVENT, being the DEVELOPER obliged to obtain the insurance policies for business interruption, for
the insurable risks in the Mexican market.

 

    	 	 	43

    
		 

 

    

 

		5.	It is expressly agreed by the PARTIES that the payment of the T1 is an irrevocable obligation
destined to the amortization of the investment.

 

		6.	The payment for the rendered services shall be made monthly by CEA, through the ADMINISTRATION
TRUST with the resources referred to by CLAUSE TWENTY NINTH of this APP and which it shall contribute to the
ADMINISTRATION TRUST pursuant to such Clause and other applicable provisions of this APP, adjusting the amounts established
in the summary charts of the PROPOSAL Formats 1 through 10 of Document No. 14 of the BASES OF THE PUBLIC BIDDING,
pursuant to the procedures, specifications and adjustment and updating formulas set forth in EXHIBIT 13 of this APP.
In the event that such resources are not sufficient to pay for the rendered services, CEA shall contribute to the ADMINISTRATION
TRUST the necessary additional resources for the payment of the CONSIDERATION. The monthly amounts of the tariffs calculated,
pursuant to the average expense of the design of the SEAWATER DESALINATION PLANT in relation with the service rendered by
the DEVELOPER, at prices as of the month of February 2016 are as follows:

 

	COMPONENT	 	MONTHLY 
 PAYMENT
 STAGE 1	 	 	MONTHLY 
 PAYMENT 
 STAGE 2	 
	T1C= Fixed cost for investment carried out with resources from the FINANCIAL AGREEMENTS	 	$	32,293,174.00	 	 	$	20,753,609.00	 
	T1R= Fixed cost for investment carried out with RISK CAPITAL 	 	$	16,740,295.00	 	 	$	10,785,231.00	 
	T1 = Fixed cost for investment	 	$	49,033,469.00	 	 	$	31,538,840.00	 
	T2 = Fixed cost for operation	 	$	11,301,170.00	 	 	$	7,920,245.00	 
	Fixed Subtotal:	 	$	60,334,639.00	 	 	$	39,459,085.00	 
	T3 = Variable cost of operation for each m3 of POTABLE WATER	 	$	1.00	 	 	$	1.00	 
	T4 = Variable cost of electric energy	 	$	3.49	 	 	$	3.53	 
	Monthly volume of POTABLE WATER in cubic meters measured at the exit of the PLANT	 	 	5,492,520.00	 	 	 	5,492,520.00	 
	Variable Subtotal:	 	$	24,662,209.00	 	 	$	24,856,086.00	 
	Total Monthly Cost:	 	$	84,996,848.00	 	 	$	64,315,171.00	 

 

    	 	 	44

    
		 

 

    

 

The amounts above do not include IVA,
as it shall be covered at the time of payment.

 

		7.	The monthly payment corresponding to the fixed costs of amortization and operation T1 and T2 shall
be made by CEA regardless of the volume of delivered POTABLE WATER.

 

		8.	The monthly payment to the DEVELOPER corresponding to the variable costs of operation shall
be calculated by multiplying the real monthly volume in cubic meters (Q), REGISTERED AT THE EXIT OF THE SEAWATER DESALINATION
PLANT times the tariff in PESOS per cubic meter T3. In the event that the DEVELOPER concludes the construction
of the PROJECT WORKS corresponding to the first stage before the term of 34 (thirty four) months following the APP EFFECTIVENESS
COMMENCEMENT, and the DEVELOPER commences the operation of the SEAWATER DESALINATION PLANT, previously complying
with the TESTS before the term of 36 (thirty-six) months established for the INVESTMENT PERIOD and as long as the
MINUTES OF CAPACITY have been issued and are viable, CEA shall pay, during this period, the T1, T2 + (T3 X Q) + (T4
X Q) tariffs.

 

		9.	The payment of the T1 tariff, shall in no event be interrupted during the 444 (four hundred and
forty four) months as from whichever occurs first between: (a) the issuance and execution of the MINUTES OF COMMENCEMENT OF
OPERATIONS of the SEAWATER DESALINATION PLANT, or (b) the 37th (thirty seventh) month as from the date of
the MINUTES OF COMMENCEMENT OF THE APP. If, during the OPERATION PERIOD, CEA fails to comply with its obligations
pursuant to this APP, it shall pay to the DEVELOPER the complete T1 and T2 tariff and (T3 X Q) + (T4 X Q) in the
applicable amount, pursuant to the level of operation that the PROJECT should have, had CEA not failed to comply,
as well as the additional costs and the damages and losses caused to the DEVELOPER.

 

    	 	 	45

    
		 

 

    

 

TWELVETH. ADJUSTMENTS TO THE AMOUNT
OF THE CONSIDERATION.

 

The update and adjustment of the amount
of the CONSIDERATION, shall be in accordance with the provisions of EXHIBIT 13 of this APP.

 

THIRTEENTH. METHOD OF PAYMENT OF THE
COMPENSATION.

 

The DEVELOPER shall be entitled
to the payment of the monthly COMPENSATION from CEA, which shall be carried out by the Trustee of the ADMINISTRATION
TRUST, as from the month following the execution of the MINUTES OF COMMENCEMENT OF OPERATIONS, in PESOS and in
the manner described below, in the understanding that the T1 tariff shall commence to be paid, invariably as from whichever occurs
first between: (a) the issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATIONS of the SEAWATER DESALINATION
PLANT, or (b) the 37th (thirty seventh) month as from the date of the MINUTES OF COMMENCEMENT OF THE APP:

 

		1.	The payment of the T1 and T2 shall be made pursuant to the procedure below:

 

Within the 5 (five) BUSINESS
DAYS following the 15th day of each month, the DEVELOPER shall submit to CEA the invoice corresponding
to the services rendered since the 16th day of the previous month, which shall contain the following specifications:
(i) the calculation of the amount of the FIXED INVESTMENT TARIFF (T1), detailing the tariffs T1C and T1R; and (ii) the FIXED
OPERATION AND MAINTENANCE TARIFF (T2).

 

		2.	The payment of the fixed tariffs shall be made as follows:

 

The payment shall be made at
the latest, within the 5 (five) BUSINESS DAYS following the submittal by the DEVELOPER of the corresponding invoices
to CEA, without thereby requiring a counter receipt. The amounts of the components of the Fixed Tariffs shall be paid by
CEA through the ADMINISTRATION TRUST in the terms of the agreement formalizing the creation of the ADMINISTRATION
TRUST.

 

Under no circumstances shall
CEA be entitled to suspend the payment of the fixed tariffs T1 and T2, except for the provisions of clause Eleventh of this
APP with respect to the T2 tariff.

 

		3.	The payment of the T3 and T4 tariffs shall be made in accordance with the following procedure:

 

Within the 5 (five) BUSINESS
DAYS following the 15th day of each month, the DEVELOPER shall submit to CEA the calculation of the
(T3 X Q) + (T4 X Q) tariffs for the services rendered as from the 16th day of the previous month.

 

    	 	 	46

    
		 

 

    

 

CEA shall review the calculations
corresponding to the components (T3 X Q) + (T4 x Q), within a term of 5 (five) BUSINESS DAYS counted as from the date of
its receipt. If upon the lapsing of such term, CEA has not made any observations; the submittal by the DEVELOPER
of the corresponding invoice shall proceed. In this case CEA shall issue the corresponding counter receipt against delivery
of the invoice by the DEVELOPER; in absence of the counter receipt the evidence of receipt of the invoice shall be considered
as a counter receipt.

 

CEA, through the ADMINISTRATION
TRUST, shall pay each of the invoices referred to in this section within a term that shall not exceed 5 (five) BUSINESS
DAYS following the date of issuance of the corresponding counter receipts or the evidence of receipt of the invoices.

 

In the event that CEA
disagrees with the corresponding calculation the PARTIES shall submit themselves to the provisions of CLAUSE THIRTY FOURTH
of this APP for the resolution of controversies.

 

The foregoing in the understanding
that whenever there is a disagreement between the PARTIES with respect to the payment estimate, the objected and the non-objected
portions of the payment shall be covered to the DEVELOPER at all times. Once the controversy is resolved, the corresponding
adjustments shall be carried out, in the understanding that if the DEVELOPER is not favored by the resolution of the controversy,
the amount covered in excess by CEA shall be reimbursed by the DEVELOPER plus a financial cost resulting from applying
to the amount paid in excess, interest at a TIIE rate + 200 annual BASE POINTS, counted as from the date of undue payment and until
three days following the date on which the resolution of the controversy is notified, with the understanding that as from the fourth
day, the amount paid in excess to be reimbursed shall cause late interest at a rate equivalent to TIIE +550 monthly BASE POINTS.
The foregoing with the understanding that the lack of reimbursement for more than 30 CALENDAR DAYS shall allow CEA
to retain the amount corresponding to the unpaid reimbursement in addition to its accessories in the next payment for the rendering
of the services subject-matter of this APP, subject to the previous notification in writing to the DEVELOPER with
an anticipation of 10 BUSINESS DAYS prior to the corresponding retention.

 

		4.	Subject to the provisions of the ADMINISTRATION TRUST, the Trustee of the ADMINISTRATION
TRUST shall pay to the DEVELOPER every invoice referred to in this Clause.

 

		5.	In the event that any of the tariffs to which the DEVELOPER is entitled is not paid in a
timely manner, pursuant to this clause, for causes exclusively attributable to CEA, the following shall be generated:

 

    	 	 	47

    
		 

 

    

 

5.1 A late interest equivalent to a rate
of TIIE + 550 monthly BASE POINTS, which shall be calculated daily until the complete payment of the debt.

 

5.2. The application, by the DEVELOPER,
of the resources from the CURRENT ACCOUNT LOAN, for which it shall request the disposition thereof through the ADMINISTRATION
TRUST, which shall request the disposition within a term not to exceed 2 (two) BUSINESS DAYS following the date of receipt
of the request by the DEVELOPER.

 

5.3 The right of the DEVELOPER to
suspend the POTABLE WATER supply in a unilateral and discretional manner, upon lapsing of 60 (sixty) CALENDAR DAYS as
from the date on which the DEVELOPER provides formal notice to CEA on the delay of the corresponding payment and
until the amounts owed are fully paid to its complete satisfaction.

 

5.4 The right of the DEVELOPER to
oppose to any form or means that, directly or indirectly, imply the substitution of the service subject-matter of this agreement;
therefore the DEVELOPER shall be entitled to oppose to any juridical act of the Government of the State of Baja California
or of any of its DESCENTRALIZED ENTITIES or CENTRALIZED AGENCIES, which have as a goal or purpose to substitute the
services subject matter of this APP. The foregoing as the nature of this APP represents the means by which the Government
of the State of Baja California decides, to this date, the integral solution of the water supply to the benefited region.

 

CEA may not suspend, retain or exercise
the right to compensate in front of the DEVELOPER with respect to any payment that the DEVELOPER shall carry out
under this APP.

 

FOURTEENTH. [INTENTIONALLY LEFT BLANK]

 

FIFTEENTH.- INTAKE WATER AVAILABILITY.

 

CEA is obliged to obtain before
the competent authority and to maintain during the term of this APP, at the expense and benefit of CEA, the rights
required for the use and exploitation of the INTAKE WATER. DEVELOPER, thus CEA shall be the sole and exclusive
liable for the payment of the taxes, rights and/or contributions corresponding to the procurement and maintenance of such rights
of use and exploitations of the INTAKE WATER. The DEVELOPER agrees to assist CEA at all times, to obtain such
rights and to deliver the necessary documents and information to achieve such purpose.

 

The DEVELOPER shall not have any
right over the INTAKE WATER, the POTABLE WATER and the WASTE WATER, before, during or after the potabilization
treatment for purposes different than the compliance of the APP.

 

Certified copies of the authorizations
for the use of the volumes of INTAKE WATER.

 

    	 	 	48

    
		 

 

    

 

CEA acknowledges and agrees that
it shall be responsible of obtaining and maintaining in full force and effect the concessions, licenses, permits and authorizations
that are exclusively required for the use of the INTAKE WATER volumes. Therefore, it releases the DEVELOPER from
any liability arising from any breach by the DEVELOPER to obligations established in this APP, arising from the breach
by CEA to maintain in full force and effect such concessions, licenses, permits and authorizations, as applicable, including
the payment of the corresponding taxes, rights and/or contributions. In the event that the ownership and force and effect of the
concessions, permits, licenses and authorizations that are exclusively required for the use of the INTAKE WATER are not
maintained by CEA, for causes attributable to it, and as result thereof INTAKE WATER cannot be extracted, CEA
shall pay the T1 and T2, as well as all the costs, damages and losses incurred by the DEVELOPER as a result of such breach
by CEA.

 

On the other hand, in the event that the
ownership and force and effect of the concessions, licenses, permits and authorizations that are exclusively required for the use
of the INTAKE WATER volumes are not maintained by CEA fur to causes not attributable to it, and arising from such
it is impossible to collect the INTAKE WATER, without being the PARTIES able to mutually agree in writing a solution
to such event, it shall be considered that there was an occurrence of a FORCE MAJEURE EVENT and they shall proceed pursuant
to Clause Thirty Second of this APP.

 

SIXTEENTH. QUALITY AND QUANTITY OF THE
POTABLE WATER.

 

The DEVELOPER is obliged to carry
out the design and EXECUTIVE PROJECT of the SEAWATER DESALINATION PLANT in order for the POTABLE WATER to
comply with the limits determined in the modified norm NOM-127-SSA1-1994 and in everything related to the total dissolved
solids, as provided in the BASES OF THE PUBLIC BIDDING. Likewise, it obliges itself to build the SEAWATER DESALINATION
PLANT and to use the technology offered in its PROPOSAL.

 

As mentioned in CLAUSE FIRST, CEA
requires a volume of 65,910,240 (sixty five million, nine hundred and ten thousand, two hundred and forty) cubic meters of POTABLE
WATER per year equivalent to 2,200 (two thousand, two hundred) LPS with a 95% availability of the SEAWATER DESALINATION
PLANT capacity, during the first stage of the PROJECT.

 

The POTABLE WATER that shall be
delivered by the DEVELOPER to CEA shall conform to the technical guidelines established in EXHIBIT 14 of this
APP. The functioning of the SEAWATER DESALINATION PLANT shall be evaluated through real time monitoring in the established
frequencies, based in the quantity, quality of the water to be treated and quality of the POTABLE WATER, in accordance with
the methods, procedures and periodicity established in EXHIBIT 5 of this APP, and pursuant to the maximum permitted
values as provided in such exhibit. All documentation arising from the monitoring of the quality of the water shall be kept by
the DEVELOPER for a term of at least 5 (five) years, which shall be available at all times for CEA and shall be provided
to the latter within the 2 (two) BUSINESS DAYS following its request.

 

    	 	 	49

    
		 

 

    

 

CEA shall provide to the DEVELOPER,
by the latest within the last 15 (fifteen) BUSINESS DAYS of each quarter (or at the latest during the last 15(fifteen) BUSINESS
DAYS prior to the commencement of the TESTING PERIOD) the required production volumes of POTABLE WATER, which
shall be established in terms of the APP, in the understanding that once that CEA has communicated to the DEVELOPER
the production volumes of POTABLE WATER that it shall require for the following quarter, CEA shall be obliged
to pay the T1 and T2 tariffs, as well as the T3 and T4 tariffs for such volumes irrespective of whether such are consumed or not.

 

In the event that CEA requires greater
production volumes of POTABLE WATER than those previously notified to the DEVELOPER pursuant to the paragraph above,
it shall notify the DEVELOPER with at least 10 (ten) BUSINESS DAYS of anticipation to allow the latter to satisfy
the additional demand, which by no means shall exceed the corresponding volume, established in the First Clause of this APP.

 

The SEAWATER DESALINATION PLANT
shall be designed and equipped in such a manner that the water therein processed shall not reach the DELIVERY POINT in the
event that it does not meet the applicable quality parameters, pursuant to the PROPOSAL, unless CEA requests so in
writing, in which event, the DEVELOPER shall be released from any liability for the breach of such quality parameters.

 

EXHIBIT 18 shall establish the applicable
procedures to determine if water processed at the SEAWATER DESALINATION PLANT does not comply with the applicable quality
parameters and, in such event, the volume thereof.

 

SEVENTEENTH. WATER MONITORING.

 

The functioning of the SEAWATER DESALINATION
PLANT shall be controlled by the monitoring of the quality of the POTABLE WATER, subject to the form and periodicity
of the respective control and registry established in EXHIBIT 18 to measure the water quality and quantity, including of
the INTAKE WATER, the POTABLE WATER and the WASTE WATER. These regulations shall establish that, in the event
of a dispute over the water quality measurements made by CEA and the DEVELOPER, the mediation of an independent and
certified laboratory, selected by mutual agreement of the PARTIES, shall be requested and the result thereof shall prevail
to resolve such disagreement and shall be final and binding for the PARTIES.

 

With the purpose of having a measurement
of the volume and quality of the POTABLE WATER and the WASTE WATER, but not for invoicing or availability purposes,
the DEVELOPER shall install measurement mechanisms in the sites of reception of INTAKE WATER, in the DELIVERY
POINT of POTABLE WATER and in the delivery point of the WASTE WATER. The specification of such mechanisms shall
be established in the measurement regulations referred to by the first paragraph of this CLAUSE SEVENTEENTH.

 

EIGHTEENTH.- ENVIRONMENTAL LAWS.

 

The DEVELOPER obliges itself to
comply, at all times, with the APPLICABLE LAWS in environmental matters.

 

    	 	 	50

    
		 

 

    

 

Likewise and in the event of being mandatory
pursuant to the APPLICABLE LAWS, the DEVELOPER obliges itself to obtain the environmental impact authorizations,
both federal and state, as applicable, for which it shall carry out all the necessary procedures before the competent federal and
state authorities in environmental matters, as applicable.

 

For purposes of the foregoing, the DEVELOPER
obliges itself to comply with all the APPLICABLE LAWS, as well as with all the applicable and valid legal conditions and
legal requirements in environmental matters throughout the execution of the PROJECT, as provided in the corresponding environmental
impact authorizations, for the term of this APP.

 

The DEVELOPER may use the documents
and other information in possession of CEA; therefore, the latter shall aid the DEVELOPER in the delivery of the
corresponding documents and information, as well as in carrying out the environmental procedures required for the adequate rendering
of the services hired under this APP. Simple copies of the ENVIRONMENTAL IMPACT STATEMENT (MIA) and the environmental
impact authorizations shall be attached hereto as EXHIBIT 16.

 

The DEVELOPER shall only be responsible
for the infrastructure of the PROJECT, including its maintenance and operation for the term of this APP. That is,
the DEVELOPER shall be solely responsible for (i) the infrastructure for COLLECTION of INTAKE WATER, (ii)
the SEAWATER DESALINATION PLANT, (iii) the infrastructure for the conduction of POTABLE WATER until the DELIVERY
POINT, (iv) the quality of the WASTE WATER and (v) the handling of its hazardous and special management wastes.

 

The Tank 3 and the hydraulic infrastructure
of the PROJECT or the related infrastructure that has not been mentioned in the previous sections, shall be of the exclusive
responsibility of CEA, CESPT or whomever results its owner. Any environmental liability arising from the PROJECT,
once the SYSTEM has been delivered to CEA pursuant to this APP, shall correspond exclusively to CEA.

 

NINETEENTH. WASTE WATER.

 

Prior procurement of the corresponding
discharge permit, the DEVELOPER shall be responsible of establishing the treatment, disposal and location of the places
in which the volumes considered as WASTE WATER, resulting from the treatment of the INTAKE WATER, shall be deposited,
complying with the conditions established for such purpose by SEMARNAT as a result of the review of the content of the ENVIRONMENTAL
IMPACT STATEMENT that, in its moment, shall be prepared by the DEVELOPER to obtain the corresponding environmental impact
authorizations.

 

The DEVELOPER shall be responsible
of complying with the Mexican Official Standards, and in absence thereof, with the International Standards or, if applicable, the
reference norms which result applicable to any of its obligations pursuant to articles 55 and 67 of the Federal Law of Metrology
and Normalization under this APP.

 

    	 	 	51

    
		 

 

    

 

TWENTIETH.- CONTRIBUTIONS AND PENALTIES

 

The DEVELOPER obliges itself to
payment of the applicable federal, state and municipality contributions in effect levied at its charge and which encumber the rendering
of the services referred in this APP.

 

In the event of modifications to the APPLICABLE
LAWS in tax matters that affect the rendering of these services, such shall be considered as CHANGES IN LAW, and the
impact of the variations in such contributions shall be reflected in the monthly tariffs that CEA is obliged to pay to the
DEVELOPER for the operation, equipment replacement, conservation and maintenance of the SYSTEM.

 

The determination, calculation and payment
of the tax contributions, including without limitation, any tax, duty, benefit, product or any other tax lien, including fines,
surcharges, actualizations or execution expenses of the PROJECT, shall be in charge of the subject of the corresponding
tax or contribution, pursuant to the legal provisions.

 

When due to causes attributable to the
DEVELOPER the POTABLE WATER does not comply with the applicable standards provided herein, the DEVELOPER shall
pay the amount of the penalties that, if applicable, are imposed by the competent GOVERNMENTAL AUTHORITY pursuant to the
APPLICABLE LAWS for such causes throughout the term of the APP, regardless of the applicable conventional penalties
in charge of the DEVELOPER in terms of this APP and in favor of CEA.

 

TWENTY FIRST. INDUSTRIAL AND INTELLECTUAL
PROPERTY.

 

CEA obliges itself not to use, for
any purposes other than those related to this APP, all the generated documentation and to preserve and cause to be preserved
the rights of the DEVELOPER over its technology for the potabilization of water and its techniques employed in the operation
process.

 

Upon expiration of the term of this APP,
the DEVELOPER obliges itself to transfer in favor of CEA the rights of use over the industrial and intellectual property,
and the patents implying the technology, units and permanently installed equipment used in the potabilization treatment of the
water with respect to which the DEVELOPER is entitled to do so with everything that by fact of by law corresponds to it
or is required for CEA to adequately operate the SYSTEM.

 

The mentioned units, technologies and equipment
shall be maintained in a perfect state and functionality, verifying that they have been given the use for which they were acquired,
or supplied, being the DEVELOPER obliged to evidence the status of conservation, the repairs, replacements and technological
updates carried out under the corresponding and timely authorizations, as well as their application, by means of the corresponding
documentation. The delivered units, technologies and equipment shall be evaluated by mutual agreement of the PARTIES and
shall function correctly, considering their useful life and ordinary wear and tear.

 

    	 	 	52

    
		 

 

    

 

TWENTY SECOND.- LOGBOOK.

 

The DEVELOPER and CEA, the
latter through the SUPERVISION, are obliged to maintain in order and up-to-date a LOGBOOK of the WORKS corresponding
to the construction of the SYSTEM, during the INVESTMENT PERIOD, which shall comply with the provisions of article
107 section V of the RLAPPEBC and, afterwards, for the activities of operation and maintenance during the OPERATION PERIOD,
having to be executed by the PARTIES at the commencement of the WORKS and every time that it is necessary; every
order or observation made by CEA through the WORKS RESIDENT shall be registered in the LOGBOOK and executed
by whomever formulated it, by whomever received it and by whomever executed it on behalf of the DEVELOPER, for purposes
of delimitating liabilities at all times.

 

TWENTY THIRD.- SUPERVISION AND INSPECTION
OF THE WORKS.

 

CEA shall at all times have, by
itself and through the SUPERVISION, the authority to verify the strict compliance by the DEVELOPER of the planning,
design preparation, EXECUTIVE PROJECT, construction and equipment of the SYSTEM works, the preparation and delivery
of the protocol of TESTS and SET-UP OF OPERATIONS and of the QUALITY ASSURANCE HANDBOOK, as well as all the
terms contained in the CALENDARED SCHEDULE. In addition, CEA shall verify during the term of this APP, that
the operation of the SYSTEM is carried out pursuant to the technical criteria and standards set forth for the compliance
of the subject-matter of this APP. Likewise, CEA shall verify that the maintenance, conservation and replacement
of the equipment and other assets integrating the SYSTEM are made in an efficient and timely manner that allows the proper
functioning thereof, pursuant to the operation handbooks prepared by the DEVELOPER and authorized by CEA for the
operation and maintenance.

 

Due to the foregoing, the DEVELOPER
is obliged to grant all the facilities to the personnel designed for such purposes by CEA, as well as to deliver the reports,
documents and data required to it, within the periods previously agreed in writing by the DEVELOPER and CEA.

 

The supervision of the execution of the
works and services subject matter of this APP shall be in charge of the SUPERVISION throughout the construction works
of the SYSTEM, and the costs related to such task shall be of 2% (two per cent), which is included in the TOTAL COST
OF THE SYSTEM; therefore, the supervision works throughout the construction of the SYSTEM shall be invoiced by the SUPERVISION
to the DEVELOPER.

 

TWENTY FOURTH.- MINUTES.

 

		1.	MINUTES OF COMMENCEMENT OF THE APP.

 

Once the conditions for the APP
EFFECTIVENESS COMMENCEMENT established in clause FORTY FOURTH of this APP have been complied, the MINUTES
OF COMMENCEMENT OF THE APP shall be executed, which date shall mark the commencement of the INVESTMENT PERIOD of the
first stage of the PROJECT. Except for the provisions of Clause Fourth, section 1 item (a) of this APP, on the date
of execution of these Minutes, the preparation of the EXECUTIVE PROJECTS shall commence.

 

    	 	 	53

    
		 

 

    

 

		2.	MINUTES OF ACCEPTANCE OF THE EXECUTIVE PROJECT.

 

During the preparation of the
EXECUTIVE PROJECT, either a single minutes for the entirety of the EXECUTIVE PROJECT or, if applicable, several partial
minutes may be prepared, in which the termination of the EXECUTIVE PROJECT or its corresponding partialities is evidenced.
These minutes shall be prepared by the SUPERVISION, and executed by the DEVELOPER and CEA and shall have as
single purpose evidencing the NON-OBJECTION by CEA of the EXECUTIVE PROJECT or, if applicable, of each of
its partialities.

 

In the event that the minutes
of acceptance of the EXECUTIVE PROJECT or of its partial deliveries are not prepared, the NON-OBJECTION seals or,
if applicable, the lapsing of the corresponding term for the implied affirmative, shall be sufficient pursuant to the provisions
of CLAUSE FOURTH of this APP.

 

		3.	MINUTES OF COMMENCEMENT OF CONSTRUCTION.

 

These minutes shall be prepared
by the DEVELOPER, shall be duly executed by its legal representative, shall establish the DATE OF COMMENCEMENT OF CONSTRUCTION
of the first stage of the PROJECT and shall be delivered to CEA, provided that the DEVELOPER has obtained
the corresponding environmental impact authorization, and once CEA with the participation of the SUPERVISION, has
granted the NON-OBJECTION, whether expressly or implied of the EXECUTIVE PROJECT in its entirety or in its corresponding
partialities. The date of execution of these minutes shall determine the DATE OF COMMENCEMENT OF CONSTRUCTION of the first
stage of the PROJECT.

 

In the event that the DEVELOPER,
for causes exclusively attributable to it, does not comply with the paragraph above, it shall inform such circumstance in writing
to CEA, indicating the term and conditions requested for such purposes. This extension may not be enforced to change the
programmed date of issuance and execution of the MINUTES OF TERMINATION OF CONSTRUCTION, except for justified causes.

 

    	 	 	54

    
		 

 

    

 

If the DEVELOPER states
and provides evidence to CEA that the causes for which this document is not issued are not exclusively attributable to it
or are the result of an ACT OF GOD, FORCE MAJEURE EVENT or CHANGE IN LAW, it shall do so in writing, indicating the
term and conditions requested to comply with the CALENDARED SCHEDULE. CEA may agree to the extension of the term
requested by the DEVELOPER and shall make the corresponding adjustments to the CALENDARED SCHEDULE, with no liability
for the DEVELOPER. In such events, or in the event that the DEVELOPER is impeded from issuing the MINUTES OF COMMENCEMENT
OF CONSTRUCTION for causes attributable to CEA, the latter shall pay to the DEVELOPER the duly documented costs
and expenses, including without limitation, the costs related to the risk capital and loan, in which the DEVELOPER incurs
due to the delay in the execution of these Minutes and, therefore, due to the delay in the construction stage of the PROJECT.

 

		4.	MINUTES OF TERMINATION OF CONSTRUCTION.

 

When the premises of the first
stage of the PROJECT are concluded from the construction stand point, evidence thereof shall be made through the issuance
and execution of the MINUTES OF TERMINATION OF CONSTRUCTION, which shall be prepared by the DEVELOPER and shall be
executed with the knowledge and verification of the SUPERVISION (considering the monthly estimates in the advance of the
PROJECT WORKS), that the PROJECT WORKS corresponding to the first stage of the PROJECT comply with the requirements
established in the EXECUTIVE PROJECT. CEA shall have 3 (three) BUSINESS DAYS to verify the termination of
100% (one hundred percent) of the construction of the SYSTEM, counted as from the moment in which the DEVELOPER notifies
in writing to CEA the termination of the construction works. In the event that upon lapsing of this term, CEA does
not make any observations in writing, the DEVELOPER shall be in charge of preparing the MINUTES OF TERMINATION OF CONSTRUCTION,
considering such as accepted by CEA without further requirements.

 

The PARTIES agree that
the DEVELOPER may issue MINUTES OF PARTIAL TERMINATION OF CONSTRUCTION for certain parts, components or subsystems
of the SYSTEM. In such event, irrespective of the issuance of the PARTIAL MINUTES OF TERMINATION OF THE CONSTRUCTION,
the DEVELOPER, shall prepare the MINUTES OF TERMINATION OF THE CONSTRUCTION for the entirety of the PROJECT WORKS,
pursuant to this Clause.

 

CEA, the DEVELOPER
or the SUPERVISION may evidence in the minutes, observations relating to items pending construction whose termination
does not affect the commencement of the TESTS or the PRODUCTION CAPACITY, as well as the term for their correction,
evidencing upon its expiration, the conclusion of such pending items through minutes of release of pending items.

 

CEA shall not execute
the MINUTES OF TERMINATION OF CONSTRUCTION when it reasonably and justifiably evidences that any of the PROJECT WORKS
or equipment corresponding to the first stage of the PROJECT have not been made in accordance with the terms of this APP
and its Exhibits, or when due to their conditions it is impossible to carry out the corresponding TESTS.

 

    	 	 	55

    
		 

 

    

 

The PARTIES acknowledge
and agree that the INVESTMENT PERIOD shall be automatically extended without liability to the DEVELOPER, during the
time (i) corresponding to the necessary term to obtain the authorization of CEA and the SUPERVISION, in the event
that there are no observations of CEA and/or the SUPERVISION to the MINUTES OF TERMINATION OF THE CONSTRUCTION
or if applicable, to its partialities; (ii) takes to CEA and/or the SUPERVISION to issue observations to the MINUTES
OF TERMINATION OF THE CONSTRUCTION, or if applicable, to its partialities; (iii) required by the DEVELOPER to carry
out the adjustments to the MINUTES OF TERMINATION OF THE CONSTRUCTION, or if applicable, to its partialities, that it deems
applicable based on the observations of CEA and/or the SUPERVISION; and (iv) needed to verify the conditions in which
the MINUTES OF COMMENCEMENT OF OPERATIONS shall be issued.

 

		5.	MINUTES OF CAPACITY.

 

The DEVELOPER shall carry
out the TESTS during the TESTING PERIOD, in accordance with the norms and specifications of the TESTS and
SET-UP OF OPERATIONS of the SYSTEM prepared by the DEVELOPER, which shall be attached hereto as Exhibit
7. Upon conclusion of the TESTS with satisfactory results, the DEVELOPER shall proceed to prepare the MINUTES
OF CAPACITY, which shall be reviewed by the SUPERVISION in a term of 5 (five) BUSINESS DAYS. Upon the satisfactory
conclusion of the review, the MINUTES OF CAPACITY shall be submitted to CEA for its execution. The MINUTES OF
CAPACITY shall evidence that the SYSTEM complies with the PRODUCTION CAPACITY established for the release of
the CONSTRUCTION GUARANTEE referred to in CLAUSE TWENTY EIGHTH of this APP. CEA shall have 5 (five)
BUSINESS DAYS to verify the satisfactory conclusion of the TESTS, counted as from the date on which the DEVELOPER
delivers the MINUTES OF CAPACITY to the SUPERVISION. In the event that, upon conclusion of such term, CEA
does not make any observation in writing, the MINUTES OF CAPACITY shall be considered as accepted by the SUPERVISION
and CEA and, therefore, the CONSTRUCTION GUARANTEE shall be released, without the need of any further requirement.

 

In the event that the SYSTEM
does not comply with the PRODUCTION CAPACITY within the INVESTMENT PERIOD and that implies a delay in the issuance
of the MINUTES OF COMMENCEMENT OF OPERATION or an actual delay in the OPERATION PERIOD, the conventional penalty
provided in section 3 of CLAUSE THIRTY FIFTH of this APP shall be applicable. Notwithstanding, the DEVELOPER
may request an additional term to carry out the necessary modifications and obtain the PRODUCTION CAPACITY, being obliged
to maintain the effectiveness of the CONSTRUCTION GUARANTEE during the term granted by CEA until a term of no more
than 10 (ten) CALENDAR DAYS. The maximum term during which the DEVELOPER may carry out the corresponding corrections
shall be of 10 (ten) BUSINESS DAYS, following the 2 (two) months of construction and TESTS originally established
for the commencement of operation of the SYSTEM.

 

    	 	 	56

    
		 

 

    

 

Irrespective of the compliance
or non-compliance with the PRODUCTION CAPACITY by the DEVELOPER and whether or not the MINUTES OF CAPACITY
and/or MINUTES OF COMMENCEMENT OF OPERATION are issued, CEA shall pay for the received POTABLE WATER until
compliance with the PRODUCTION OF CAPACITY is achieved and the MINUTES OF CAPACITY and the MINUTES OF COMMENCEMENT
OF OPERATION are issued. Likewise, notwithstanding that the DEVELOPER is granted an additional term for compliance of
the PRODUCTION CAPACITY, CEA obliges itself to commence payments corresponding to the T1 tariff.

 

If, on the date on which the
DEVELOPER notifies to CEA of the commencement of the TESTING PERIOD, CEA has not maintained, for causes
outside of its will, the rights for the use and exploitation of the INTAKE WATER, in its favor and for the use by the DEVELOPER
pursuant to this APP the conventional penalties shall not be applicable to the DEVELOPER.

 

		6.	MINUTES OF COMMENCEMENT OF OPERATION.

 

Document that shall be prepared
by the DEVELOPER, reviewed by the SUPERVISION and submitted to the consideration of CEA one day after the
execution of the MINUTES OF CAPACITY, by virtue of which the DEVELOPER may commence the OPERATION PERIOD of
the SYSTEM.

 

Once the DEVELOPER has
delivered the OPERATION GUARANTEE to CEA, CEA shall be obliged to, immediately, return the CONSTRUCTION
GUARANTEE and to issue the MINUTES OF COMMENCEMENT OF OPERATION. Upon execution of these minutes, the OPERATION PERIOD
and the payments corresponding to the CONSIDERATION shall commence, pursuant the specifications of this APP.

 

If for causes exclusively attributable
to the DEVELOPER, the MINUTES OF COMMENCEMENT OF OPERATION are not issued, and no additional term pursuant to the
following paragraph is granted, the payment of the conventional penalties referred in section 3 of CLAUSE THIRTY FIFTH shall
be applicable.

 

In the event that the DEVELOPER
had requested and obtained an additional term for the execution of the MINUTES OF CAPACITY, the OPERATION PERIOD
shall be extended for the same additional term granted. Likewise, notwithstanding that the DEVELOPER has been granted an
additional term for compliance of the PRODUCTION CAPACITY, CEA obliges itself to begin the payments corresponding
to the T1 tariff.

 

    	 	 	57

    
		 

 

    

 

In the event that the DATE
OF COMMENCEMENT OF OPERATIONS occurs after the 37th (thirty seventh) month counted as from the APP EFFECTIVENESS
COMMENCEMENT, due to causes attributable to CEA, the execution of additional works, a CHANGE IN LAW, an ACT
OF GOD or FORCE MAJEURE EVENT, or due to any other circumstance that pursuant to the terms of this APP, entitles
the DEVELOPER to the extension of the INVESTMENT PERIOD, the DATE OF COMMENCEMENT OF OPERATIONS shall be extended
for a term equivalent to the delay due to the foregoing causes.

 

		7.	MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY.

 

Upon conclusion of the OPERATION
PERIOD, within the 5 (five) BUSINESS DAYS following the date on which the termination of the APP proceeds, and
once the DEVELOPER has delivered to CEA the APP TERMINATION GUARANTEE, in accordance with the terms hereof,
CEA shall return the OPERATION GUARANTEE and the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY
shall be jointly prepared by the DEVELOPER and CEA, evidencing the DELIVERY of the SYSTEM and its operation,
with all the assets that comprise it, gratuitously and with no lien whatsoever, as well as of the real estate in which the SEAWATER
DESALINATION PLANT and other facilities of the SYSTEM are located, mentioning the ordinary functioning conditions
in which the SYSTEM is received, pursuant to the provisions of CLAUSE TWENTY FIFTH of this APP.

 

With the issuance and execution
of these minutes, the effects of the APP terminate and the release of the OPERATION GUARANTEE referred to in CLAUSE
TWENTY EIGHTH of this APP is viable, provided that the DEVELOPER has delivered to CEA the APP TERMINATION
GUARANTEE.

 

During the time that it takes
to carry out the DELIVERY of the SYSTEM, the DEVELOPER shall not be obliged to operate and/or maintain the
SEAWATER DESALINATION PLANT.

 

TWENTY FIFTH.- CONDITIONS
FOR THE DELIVERY OF THE SYSTEM.

 

Within a term of 6 (six) months
prior to the termination of the OPERATION PERIOD, the DEVELOPER shall verify the abilities of the personnel of CEA,
to take over the operation of the SEAWATER DESALINATION PLANT or for the events of contingencies, obliging itself to update
or, if applicable, train the personnel designated and placed at its disposal by CEA, as mutually agreed with the DEVELOPER
and paying, the latter, the costs of such training, in the understanding that the DEVELOPER shall be responsible for the
operation of the SYSTEM until the expiration of the term of this APP and the execution of the MINUTES OF TERMINATION
OF THE APP AND DEFINITIVE DELIVERY.

 

    	 	 	58

    
		 

 

    

 

Upon conclusion of the OPERATION
PERIOD, in terms of CLAUSE SECOND of this APP, the DEVELOPER is obliged to perform the DELIVERY
of the SYSTEM to CEA, in optimal conditions of operation and functionality considering the normal wear that it should
have from the time of use and with a residual useful life of at least 5 (five) years, pursuant to the provisions of this CLAUSE
TWENTY FIFTH and EXHIBIT 17. Regardless of this APP or the BASES OF THE PUBLIC BIDDING, the obligation
of the DEVELOPER provided in this paragraph shall be subject to (i) the OPERATION AND MAINTENANCE of the SYSTEM
being carried out in accordance with the handbooks provided by the DEVELOPER; (ii) the necessary supplies and works for
the repair and maintenance of the SYSTEM shall be provided by the DEVELOPER and paid timely by CEA; and, if
applicable, (iii) the damages and flaws inflicted to the SYSTEM, the works or any other component of the PLANT are
not attributable to third parties, including personnel of CEA, or the result of an ACT OF GOD or a FORCE MAJEURE
EVENT.

 

The DELIVERY of the SYSTEM
shall be at no cost, free of any liens and prior inventory technically valued by both PARTIES, with respect to the useful
life of its components, works, equipment and facilities, machinery, tools and other assets and rights comprising it, as well as
the corresponding operation, conservation and maintenance handbooks, preparing to that effect, the MINUTES OF TERMINATION OF
APP AND DEFINITIVE DELIVERY.

 

Upon termination of the OPERATION
PERIOD, the DEVELOPER shall provide all the necessary consumption materials for 90 (ninety) CALENDAR DAYS, including
lubricants, chemical substances and laboratory, offices and processes articles to allow the continuous and uninterrupted operation
of the SYSTEM by CEA. Likewise, it shall provide the necessary fuel to cover at least one contingency of the CONTINGENCIES
OR SAFEKEEPING ACTIONS PLAN according to the components of the works, quantities and qualities stated in its list of materials
and supplies established in the PROPOSAL.

 

Likewise, the DEVELOPER
obliges itself to provide the necessary equipment and spare parts to guarantee the operation of the SYSTEM during the 6
(six) months following the date of issuance of the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY, pursuant to
a maintenance program agreed between the DEVELOPER and CEA.

 

Upon termination of this APP
and during the 6 (six) months following the execution of the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY,
CEA reserves its right to claim to the DEVELOPER any liability in which the latter had incurred in the terms of this
APP, for hidden defects, flaws or deficiencies in the operation, conservation, maintenance and replacement of the equipment
of the SYSTEM. Upon conclusion of such term, the DEVELOPER shall no longer have any liability for hidden defects,
flaws or deficiencies in the operation, conservation, maintenance and replacement of the equipment of the SYSTEM.

 

    	 	 	59

    
		 

 

    

 

Upon conclusion of the OPERATION
PERIOD, the DEVELOPER shall only have rights over the assets that it had acquired at its own expense, and which are
not directly destined to the operation and maintenance of the SYSTEM.

 

Upon conclusion of the OPERATION
PERIOD, the DEVELOPER shall carry out the DELIVERY of the SYSTEM and its operation to CEA, pursuant
to the procedure and conditions provided in EXHIBIT 17: Procedure of delivery of the SYSTEM.

 

As from the moment of execution
of this APP, the DEVELOPER grants its express and irrevocable consent for purposes of having CEA taking possession
of the SYSTEM at the termination of the APP, pursuant to the procedure established in EXHIBIT 17.

 

TWENTY SIXTH.- [INTENTIONALLY
LEFT BLANK].

 

TWENTY SEVENTH.- INSURANCES

 

The DEVELOPER shall be
liable for the damages and losses that may be caused in the person and assets of third parties or CEA, as a result of the
construction, equipment and SET-UP OF OPERATIONS of the PROJECT, as well as during the operation, conservation, replacement
of equipment and maintenance of the SYSTEM.

 

To cover this liability, the
DEVELOPER shall hire and maintain in full force and effect the following insurances:

 

		1.	The DEVELOPER shall, at its own expense, insure the WORKS and assets subject matter
of this APP with a damages insurance for structures, works, materials or equipment, caused by its activities or those of
its contractors and shall repair or replace any damaged structure, work, material or equipment, to the satisfaction of CEA,
solely with respect to the sufficiency of the coverage of the insurance or insurances, as provided in the PROPOSAL, as well
as of civil liability damages to third parties, during the INVESTMENT PERIOD which includes, but is not limited to, the
concepts of losses caused due to damages to structures, partial or complete destruction by fire, lightning, earthquakes, vandalism
or any other similar risk, whether or not caused by FORCE MAJEURE EVENT. This insurance shall cover damages for risks as
from the date of execution of the MINUTES OF COMMENCEMENT OF CONSTRUCTION until the execution of the MINUTES OF COMMENCEMENT
OF OPERATION, date on which the broad coverage insurance mentioned in section 2 below shall commence its validity.

 

    	 	 	60

    
		 

 

    

 

The amount of coverage of this
insurance may not be less than 20% of the amount of the works executed and shall be applied solely to compensate the damage covered
by such insurance and for which it was hired.

 

The trustee of the ADMINISTRATION
TRUST shall be the beneficiary of this insurance, to whom the PARTIES shall oblige to contribute the amount of the indemnifications
received for the execution of this insurance, the repairmen of the caused damages and the replacement of the affected equipment,
when necessary.

 

The DEVELOPER shall deliver
to CEA a copy of the evidence of hiring this insurance, within the 30 (thirty) BUSINESS DAYS following the date of
execution of the MINUTES OF COMMENCEMENT OF CONSTRUCTION.

 

		2.	The DEVELOPER is obliged to hire, at its own expense, an insurance of broad coverage, to
insure all the components of the SYSTEM during the OPERATION PERIOD.

 

The DEVELOPER shall deliver
to CEA the evidence of hiring this insurance, within the 30 (thirty) BUSINESS DAYS following the date of execution
of the MINUTES OF COMMENCEMENT OF OPERATION.

 

The amount of this insurance
shall be applied solely to repair the covered damage and for which it was hired. The beneficiary of this insurance shall be the
trustee of the ADMINISTRATION TRUST; being the trustee obliged to deliver the amount of the indemnifications received for
the execution of this insurance, the repairmen of the caused damages and the replacement of the affected equipment, when necessary.

 

All the insurances shall be granted by
insurance companies duly registered before the SHCP, and without the existence of a relationship between them and the DEVELOPER,
being obliged the DEVELOPER to cover the amount of the corresponding deductibles, except when the accident is attributable
to CEA. The non-compliance or omission in the hiring the mentioned insurances, by the DEVELOPER shall be considered
a breach of the APP and, consequently, a cause for rescission, unless such are consequence of any event outside the control
of the DEVELOPER.

 

The cost of the insurance policies shall
be paid directly by the DEVELOPER to the insurance company, and the DEVELOPER shall deliver the payment receipts
of the policies in full force and effect and the documentation evidencing the coverage and value of the policies to CEA.
Likewise, the hiring and renewal of the insurance policies shall be obtained and fully paid by the DEVELOPER within the
term established in the insurance policy or policies.

 

In every insurance, the waiver by the insurance
companies to all their rights of subrogation and any claim against CEA.

 

    	 	 	61

    
		 

 

    

 

TWENTY EIGHTH.- GUARANTEES PROVIDED
BY THE DEVELOPER.

 

		I.	GUARANTEES OF THE DEVELOPER

 

To guarantee the compliance of the obligations
of the DEVELOPER in terms of this APP, the DEVELOPER shall deliver to CEA the following bonds:

 

		1.	CONSTRUCTION GUARANTEE

 

To ensure compliance of its obligations
arising from the APP in connection with the preparation of the EXECUTIVE PROJECT, construction and TESTS of
the SYSTEM, the DEVELOPER shall deliver to CEA, within the 30 (thirty) BUSINESS DAYS following the
APP EFFECTIVENESS COMMENCEMENT, a guarantee in favor of CEA through a bond policy, for a value equivalent to the
10% (ten percent) of the COST OF THE SYSTEM corresponding to the first stage of the PROJECT stated in its PROPOSAL.
This amount shall be updated annually, based on the INPC of the date on which the corresponding policy is issued, effective
as from the execution date of the MINUTES OF COMMENCEMENT OF APP until the DATE OF COMMENCEMENT OF OPERATION.

 

In the event that there is any
extension to the dates of the CALENDARED SCHEDULE of MILESTONES for causes exclusively attributable to the DEVELOPER,
the latter shall extend the term of the issued bond for the term of such extension, in such a manner that the CONSTRUCTION GUARANTEE
is valid throughout the required terms and amounts. The DEVELOPER shall evidence the extension of term of the bond to CEA
with at least 5 (five) BUSINESS DAYS prior to the initial expiration. The non-compliance by the DEVELOPER to obtain
the extension of the term of the CONSTRUCTION GUARANTEE as established in this APP, shall be a cause of rescission
of this APP, provided that the DEVELOPER does not remedy such situation within a term of 30 (thirty) BUSSINESS
DAYS following the notification to that effect made by CEA.

 

This guarantee shall be payable
at the payment requirement made by CEA and/or SPF to the issuer.

 

The hiring of this bond shall
be done pursuant to the model used for such purposes by the bond company granting it to the DEVELOPER and approved by the
SPF, but the policy shall include the following within its conditions:

 

		a.	The term of the policy shall be annual and of automatic renewal, without the need of an express
statement from its contractor or of its beneficiary, commence on the date of its issuance and concluding on the DATE OF COMMENCEMENT
OF OPERATION.

 

    	 	 	62

    
		 

 

    

 

		b.	The bond shall be enforced upon rescission due to causes exclusively attributable to the DEVELOPER,
in terms of CLAUSE THIRTY FIRST or when the DEVELOPER does not comply with the payment of the corresponding conventional
penalty referred to in CLAUSE THIRTY FIFTH of this APP, within the term therein established for such purpose.

 

		c.	To enforce the bond in the events referred to in the previous section, the written requirement
of CEA and/or the SPF to the bond company shall be necessary, in which documental evidence states and evidences that
the rescission of the APP has been made effective for causes exclusively attributable to the DEVELOPER and that the
corresponding procedure described in CLAUSE THIRTY FIRST of this APP has been complied or, if applicable, that the
term, and applicable extension, for the payment of the corresponding conventional penalty mentioned in CLAUSE THIRTY FIFTH
of this APP has lapsed, without the DEVELOPER having paid it or remedied such circumstance.

 

		d.	The bond company shall cover the amount resulting in charge of the DEVELOPER, in terms of
such CLAUSE THIRTY FIRST of this APP.

 

		2.	OPERATION GUARANTEE.

 

To ensure compliance of its
obligations arising from the APP in connection with the operation and maintenance of the SYSTEM during the OPERATION
PERIOD, the DEVELOPER shall deliver to CEA, before the DATE OF COMMENCEMENT OF OPERATION, a guarantee
in favor of CEA through a bond policy, for a value equivalent to the 10% (ten percent) of the amount of the yearly payment
in PESOS of the CONSIDERATION in effect at that moment for the portion corresponding to the T2 + (T3 X Q) tariffs,
considering as base the last invoice paid to the DEVELOPER, or during the first year of the OPERATION PERIOD, the
amount corresponding to the production volume communicated to the DEVELOPER pursuant to Clause Sixteenth of the APP shall
be considered as the base. This equivalence shall be maintained throughout the term of the bond, with yearly term and automatic
renewal during all the OPERATION PERIOD, as from the DATE OF COMMENCEMENT OF OPERATION and until the DELIVERY
and operation of the SYSTEM to CEA and delivery by the DEVELOPER to CEA of the APP TERMINATION GUARANTEE,
pursuant to the provisions of the APP.

 

The delivery of the policy corresponding
to this bond shall be necessary for the execution of the MINUTES OF COMMENCEMENT OF OPERATIONS.

 

This guarantee shall be payable
upon request of payment made by CEA and/or the SPF to the guarantor.

 

    	 	 	63

    
		 

 

    

 

The hiring of this bond shall
be attested in the model used for such purposes by the bond company granting it to the DEVELOPER and approved by the SPF,
but the policy shall include within its conditions the following:

 

		a.	The term of the policy shall be annual and of automatic renewal, without the need of an express
statement from its contractor or of its beneficiary, it shall be effective and in force for all the OPERATION PERIOD, its
effects shall commence on the date of its issuance and conclude on the date of DELIVERY of the SYSTEM, in terms of
this APP. The early cancellation of this policy, shall require the express request made the DEVELOPER evidencing
the written approval of CEA.

 

		b.	The bond shall be enforced upon rescission due to causes exclusively attributable to the DEVELOPER,
in terms of CLAUSE THIRTY FIRST of the APP or when the DEVELOPER does not cover the amount of the corresponding
conventional penalty referred to in CLAUSE THIRTY FIFTH of this APP, within the term and extensions established in
this APP for such purpose; as well as when the DEVELOPER has not covered the costs required for the DELIVERY
of the SYSTEM, pursuant to EXHIBIT 17 or had not delivered the APP TERMINATION GUARANTEE, being necessary
to repair hidden defects for the maintenance and replacement of equipment of the SYSTEM in which the DEVELOPER had
incurred during the OPERATION PERIOD.

 

		c.	To enforce the bond in the events referred to in the previous section, the written requirement
of CEA and/or the SPF to the bond company shall be necessary, in which they state and provide documental evidence
that the rescission of the APP has been made effective for causes exclusively attributable to the DEVELOPER and that
the corresponding procedure provided in CLAUSE THIRTY FIRST of this APP has been followed and complied with or, if
applicable, that DEVELOPER has incurred in the hypothesis mentioned in the last part of the immediately preceding section,
without the DEVELOPER having remedied the situation.

 

		d.	The bond company shall cover the amount resulting in charge of the DEVELOPER in terms of
such CLAUSE THIRTY FIRST of this APP.

 

In the event of extensions or
waits granted to the DEVELOPER for compliance of its obligations arising from the formalization of agreements for the extension
of the amount or term of the APP, the corresponding modification to the bond shall be obtained.

 

    	 	 	64

    
		 

 

    

 

		3.	APP TERMINATION GUARANTEE.

 

On the date of conclusion of the OPERATION
PERIOD, provided that CEA has not exercised its option to extend the term of the APP, the DEVELOPER is
obliged to obtain a bond or its equivalent, which shall be valid for a period of 6 (six) months after the date of execution of
the MINUTES OF TERMINATION OF THE APP AND DEFINITIVE DELIVERY in terms of this APP, the amount of which shall be
equivalent to the annual payment of T2 + (T3 X Q) corresponding to the previous year, to repair hidden defects for maintenance
and equipment replacement of the SYSTEM in which the DEVELOPER had incurred during the OPERATION PERIOD.

 

The agreement by which this bond is granted
shall include, at least, the following conditions:

 

		a.	That it is granted with knowledge of all the provisions of this APP.

 

		b.	That it is granted for an updated amount.

 

		c.	The term of the policy shall be for the 6 (six) months following the MINUTES OF TERMINATION
OF THE APP AND DEFINITIVE DELIVERY. The early termination of this policy shall require the express and written statement of
CEA or the ADMINISTRATION TRUST, which shall not be withheld or denied in an unjustified manner.

 

		d.	The bond shall be enforced when the DEVELOPER does not cover the full, reasonable and justified
costs required for the DELIVERY of the SYSTEM, pursuant to EXHIBIT 17 or when it is necessary to repair hidden
defects for the maintenance and replacement of equipment of the SYSTEM in which the DEVELOPER had incurred during
the OPERATION PERIOD.

 

		e.	To enforce the bond, the written requirement of CEA and/or the SPF to the bond company
shall be necessary, in which they state and provide documental evidence on the non-compliance by the DEVELOPER referred
to in the last part of the preceding section.

 

		f.	The bond company shall cover the amount resulting in charge of the DEVELOPER in terms of
the preceding paragraph, upon written request by CEA and/or the SPF to the guarantor.

 

		g.	That the bond company expressly accepts to submit itself to the procedure established in article
279 and 282 connecting with article 178, and waives the benefits established in article 179 of the Law of Insurances and Bonds
Institutions.

 

In the event that the terms of execution
established for the different stages of the works of this APP are extended, it shall be agreed that the term of the corresponding
guarantees shall be automatically extended or immediately replaced to cover the period corresponding to the extension and its amount
shall be updated, acknowledging the amount of expenses corresponding to the DEVELOPER in the event that the causes for extension
of the terms are not attributable to it.

 

		4.	COMMON PROVISIONS

 

The CONSTRUCTION GUARANTEE, the
OPERATION GUARANTEE, and the APP TERMINATION GUARANTEE, in order to be valid pursuant to the APP, shall comply
with the following conditions:

 

    	 	 	65

    
		 

 

    

 

		a.	Be issued by a bond company authorized by the SHCP to operate in Mexico.

 

		b.	The exhibition of the corresponding policies to CEA, shall be necessary for CEA to
guarantee the provisions of this APP.

 

		c.	The breach by the DEVELOPER in granting the guarantees referred in this CLAUSE TWENTY
EIGHTH or to maintain their effectiveness, shall be a cause for rescission of the APP.

 

		d.	They shall be payable at the requirement of payment made by CEA and/or the SPF to
the issuer, pursuant to the sections above.

 

		e.	The hiring of these bonds shall be done pursuant to the model used for such purposes by the bond
company granting it to the DEVELOPER and approved by the SPF, but the policy shall include within its conditions
the following:

 

		i.	That the bond is granted attending to all the corresponding provisions contained in this CLAUSE
TWENTY EIGHTH.

 

		ii.	That the release of the bond indispensably requires the express and written statement of CEA
or the trustee of the ADMINISTRATION TRUST, which shall not be denied in an unjustified manner;

 

and

 

		iii.	That the bond company expressly accepts to submit itself to the execution procedures provided in
the Law of Insurances and Bonds Institutions for the effectiveness of the bonds, even for the event that the collection of interest
was applicable, as a result of the extemporaneous payment of the amount of the required bond policy.

 

		f.	In the event of extensions or waits granted to the DEVELOPER for compliance of its obligations
arising from the formalization of agreements for the extension of the amount or term of the APP, the corresponding modification
to the bond shall be obtained by the DEVELOPER.

 

		g.	CEA is obliged to release the corresponding bonds pursuant to the respective provisions
for each event provided in this APP

 

    	 	 	66

    
		 

 

    

 

TWENTY NINTH.- RESOURCES OF THE CONSIDERATION.

 

		1.	CEA and CESPT, by means of this APP jointly oblige themselves, to pay to the
DEVELOPER, in terms of articles 1862, 1864 and 1878 of the Civil Code for the State of Baja California, the CONSIDERATION.
For such purposes, the ADMINISTRATION TRUST shall be created, to which the sufficient resources and rights shall be affected
to guarantee the payment of the CONSIDERATION. CEA obliges itself to promote and obtain the registry of this APP
in terms of article 85 of the LAPPEBC, for purposes of which it shall negotiate before the corresponding entity its filing
before the Congress of the State of Baja California for its inclusion in the expenses budget that corresponds to each of the years
in which the payment of the CONSIDERATION shall be made under this APP.

 

		2.	CEA and CESPT oblige themselves to affect to the ADMINISTRATION TRUST, the
economic rights and the necessary resources, including without limitation, the right to dispose of the CURRENT ACCOUNT LOAN
, with the purpose of destining them as an alternative source of payment of the CONSIDERATION, and the collection rights
pursuant to the WATER PURCHASE AND SALE AGREEMENT, which shall be destined as the main source of payment of the CONSIDERATION,
in the terms established in this APP.

 

		3.	With the purpose of guaranteeing the payment of the purchase and sale of POTABLE WATER pursuant
to the WATER PURCHASE AND SALE AGREEMENT in charge of CESPT and in favor of CEA, and therefore, the payment
of the CONSIDERATION in favor of the DEVELOPER, CEA obliges itself to negotiate, contract and make effective
the CURRENT ACCOUNT LOAN as a condition for the APP EFFECTIVENESS COMMENCEMENT to commence the construction of the
SYSTEM, which purpose shall be to cover possible liquidity shortfalls to comply with the payment obligations in charge of
CESPT and in favor of CEA agreed in the WATER PURCHASE AND SALE AGREEMENT, when CESPT does not comply
with such obligations.

 

		4.	In the hiring of the CURRENT ACCOUNT LOAN, in addition to CEA , the Government of
the State of Baja California through SPF, shall appear as joint obligor of the payment obligations acquired by CEA, in
terms of the mentioned CURRENT ACCOUNT LOAN, and shall grant in guarantee of such obligations, the contributions to the
MASTER GUARANTEE TRUST pursuant to transitory article eighteenth of the Income Law of the State of Baja California for the
Tax Year of 2016.

 

		5.	The CURRENT ACCOUNT LOAN, which shall be guaranteed by the SPF, shall be disposable
as from the 37th (thirty seventh) month counted as from the date of issuance of the MINUTES OF COMMENCEMENT OF THE
APP and shall remain in effect as long as the payment obligations in charge of CEA in favor of the DEVELOPER
remain valid in terms of this APP.

 

    	 	 	67

    
		 

 

    

 

		6.	The amount of the CURRENT ACCOUNT LOAN shall always be equivalent to 3 (three) months of
payment of the CONSIDERATION in charge of CEA, updated in accordance to EXHIBIT 13, plus the corresponding
IVA and financial accessories. In the event that the FINANCIAL AGREEMENTS require an extension of the amount of such
CURRENT ACCOUNT LOAN and/or that the conditions considered in the ECONOMIC PROPOSAL are affected, it shall be extended
to up to 6 (six) months of the payment of the CONSIDERATION.

 

		7.	The right to dispose of the resources of the CURRENT ACCOUNT LOAN shall be affected to the
ADMINISTRATION TRUST, for its exercise by the trustee thereof within the 2 (two) BUSINESS DAYS following the creation
of the ADMINISTRATION TRUST.

 

		8.	CEA is obliged to contribute to the assets of the ADMINISTRATION TRUST, at least
the following rights, in the understanding that such contributions shall be perfected within the 2 (two) BUSINESS DAYS following
the creation of the ADMINISTRATION TRUST, otherwise it shall be considered a breach by CEA:

 

		a.	100% of the collection rights arising from the block water purchase and sale agreement or agreements
that it has executed with water operating entities of the State of Baja California, which are not affected at the time of execution
of this APP.

 

		b.	100% of the collection rights arising from any block water purchase and sale agreement or agreements
that it executes in the future with water operating entities of the State of Baja California.

 

		c.	100% of the collection rights arising from any water purchase and sale agreement or any agreement
for transfer of water rights with any entity or government.

 

THIRTIETH.- EARLY TERMINATION OF THE
APP.

 

For the event of early termination of the
APP, the PARTIES agree to submit themselves to what they agree in its moment; however, to ensure compliance with
the Financial Agreements of the PROJECT, they shall consider in their agreement, at the least, the following:

 

    	 	 	68

    
		 

 

    

 

		I.	EARLY TERMINATION BY MUTUAL AGREEMENT BETWEEN THE PARTIES DURING THE INVESTMENT PERIOD:

 

CEA is obliged to the payment of
the amounts of the T1 tariff with its respective updates and which correspond to the investment with RISK CAPITAL and with
resources from the FINANCIAL AGREEMENTS, pursuant to the provisions of EXHIBIT 13 “Adjustments to the Amount
of the CONSIDERATION”, plus the amount of the insurances, the cost of the ADMINISTRATION TRUST and any expenses
and investments carried out by the DEVELOPER or incurred and pending amortization, calculated based on the corresponding
evidence submitted by the DEVELOPER , in the understanding that such payments shall be monthly as from the date agreed by
the PARTIES for the early termination and until the conclusion of the 444 (four hundred and forty four) months counted as
from the APP EFFECTIVENESS COMMENCEMENT.

 

		II.	EARLY TERMINATION BY MUTUAL AGREEMENT BETWEEN THE PARTIES DURING THE OPERATION PERIOD:

 

CEA is obliged to pay the amounts
of the T1 tariff with its corresponding updates and which correspond to the amount of the investment with RISK CAPITAL,
and with resources from the FINANCIAL AGREEMENTS, pursuant to EXHIBIT 13 “Adjustments to the Amount of the
CONSIDERATION”, plus the amount of the insurances, the cost of the ADMINISTRATION TRUST and any expenses and
investments made by the DEVELOPER or incurred and pending amortization, as calculated based in the corresponding evidence
submitted by the DEVELOPER, arising from the rendering of the services subject matter of this APP, in the understanding
that such payments shall be monthly throughout the remaining term until conclusion of the 444 (four hundred and forty four) months
considered for the OPERATION PERIOD.

 

		III.	RESCISSION OF THE PUBLIC PRIVATE PARTNERSHIP AGREEMENT APP:

 

Regardless of the provisions on the matter
included in the LAPPEBC, the PARTIES shall submit themselves to the provisions of CLAUSE THIRTY FIRST of this
APP for purposes of the rescission of this APP.

 

		IV.	IMPOSSIBILITY TO COMPLY WITH THE SUBJECT MATTER OF THE APP DUE TO ACT OF GOD OR FORCE MAJEURE
EVENT:

 

The PARTIES shall submit themselves
to CLAUSE THIRTY SECOND of this APP in the event of impossibility to comply with the subject matter of the APP
due to ACT OF GOD or FORCE MAJEURE EVENT.

 

		V.	EARLY TERMINATION DUE TO CAUSES OF GENERAL INTEREST.

 

Upon termination of the effects of this
APP due to causes of general interest or when, due to justified causes the necessity of requiring the goods or services
originally contracted is extinguished, and it is justifiably evidenced that the continuance of the compliance of the agreed obligations
would cause damage or detriment to the State pursuant to article 123 of the RLAPPEBC, the PARTIES shall submit themselves
to the following:

 

    	 	 	69

    
		 

 

    

 

		1.	During the INVESTMENT PERIOD.

 

		a.	CEA shall communicate in writing to the DEVELOPER that the APP shall be terminated
in an anticipated manner due to causes of general interest, describing, justifying and evidencing the reasons of general interest,
mentioning the term that the DEVELOPER shall have to deliver the PROJECT WORKS, which shall not be less than 90 (ninety)
BUSINESS DAYS, counted as from the date of such communication.

 

		b.	Within the term granted to the DEVELOPER, the latter shall proceed to prepare an inventory
of the assets that comprise the PROJECT WORKS at that moment, which it shall deliver to CEA, in coordination with
the SUPERVISION and a representative of CEA.

 

		c.	CEA shall pay to the DEVELOPER the expenses and investments made by the DEVELOPER
or incurred and pending amortization, whether corresponding to the amount of the investment through RISK CAPITAL or with
resources from the FINANCIAL AGREEMENTS, as calculated based in the corresponding evidence submitted by the DEVELOPER
arising from the rendering of the services subject matter of this APP, which shall include the reimbursement to the DEVELOPER
of the debt service incurred by the DEVELOPER (concepts not included in the T1) plus the amount of the insurances and the
cost of the ADMINISTRATION TRUST, as well as the amount of all the other costs and expenses made by the DEVELOPER,
in the PROJECT. Within the term granted to the DEVELOPER, it shall prepare the inventory of the assets that comprise,
at that moment, the works that shall be delivered in coordination with the SUPERVISION and a representative of CEA.
CEA shall commence the payment of the updated T1 determined by the SUPERVISION, in the understanding that the corresponding
payments shall be monthly from the 37th (thirty seventh) month as from the MINUTES OF COMMENCEMENT OF THE APP
and until the month 444 (four hundred and forty four) counted as from such date and pursuant to EXHIBIT 13 of this APP.

 

		d.	In the event of controversy over the expenses and investments to be reimbursed to the DEVELOPER,
the PARTIES shall resort to the procedure for resolution of controversies contained in CLAUSE THIRTY FOURTH of this
APP.

 

		2.	During the OPERATION PERIOD.

 

		a.	CEA shall communicate in writing to the DEVELOPER that the APP shall be terminated
in an anticipated manner due to causes of general interest, describing, justifying and evidencing the reasons of general interest,
mentioning the term that the DEVELOPER shall have to deliver the SYSTEM, which shall not be less than 90 (ninety)
BUSINESS DAYS.

 

    	 	 	70

    
		 

 

    

 

		b.	Within the term granted to the DEVELOPER, it shall proceed to prepare an inventory of the
assets that comprise the SYSTEM at that moment, which it shall deliver to CEA, in coordination with the SUPERVISION
and a representative of CEA.

 

		c.	CEA shall pay to the DEVELOPER the expenses and investments made by the DEVELOPER
or incurred and pending amortization, as calculated based in the corresponding evidence submitted by the DEVELOPER arising
from the rendering of the services subject matter of this APP, which shall include the reimbursement to the DEVELOPER
of the debt service incurred by the DEVELOPER (concepts not included in the T1).

 

		d.	CEA shall continue paying the amount of the T1 tariff pursuant to EXHIBIT 13 “Adjustments
to the Amount of the CONSIDERATION”, plus the amount of the insurances and the cost of the ADMINISTRATION TRUST,
in the understanding that such payments shall be carried out monthly for the remaining term until the conclusion of the 444 (four
hundred and forty four) months counted as from the date of the APP EFFECTIVENESS COMMENCEMENT.

 

		e.	In the event of controversy over the expenses and investments to be reimbursed to the DEVELOPER,
the PARTIES shall recur to the procedure for resolution of controversies contained in CLAUSE THIRTY FOURTH of this
APP.

 

In any event of early termination of this
APP pursuant to the provisions of sections I through IV above, and notwithstanding the applicable provisions of the LAPPEBC,
the PARTIES agree that the relevant items of the procedure for DELIVERY of the SYSTEM contained in EXHIBIT
17 shall be applicable.

 

In the event of early termination of the
APP, pursuant to the provisions of section V above, the PARTIES agree that the provisions of Clause Thirty Third
of this APP shall be applicable.

 

THIRTY FIRST.- RESCISSION.

 

		I.	Causes of Rescission

 

The following shall be causes
of rescission of this APP:

 

		1.	For causes exclusively attributable to the DEVELOPER:

 

		a.	Not executing the MINUTES OF COMMENCEMENT OF THE APP in the terms and conditions provided
in this APP.

 

    	 	 	71

    
		 

 

    

 

		b.	Assign, transfer or encumber in any way this APP or any of the rights arising from it, without
the prior written approval of CEA except for the assignment of collection rights of the CONSIDERATION and the pledge
over shares representing the corporate capital of the DEVELOPER, set forth in the APP.

 

		c.	Not obtaining or maintaining the effectiveness of the guarantees or insurances referred to in this
APP.

 

		d.	Not obtaining, due to causes exclusively attributable to the DEVELOPER, the corresponding
authorizations for the WASTE WATER; as well as the ENVIRONMENTAL IMPACT STATEMENT.

 

		e.	Breach during the OPERATION PERIOD, due to causes exclusively attributable to the DEVELOPER,
of the quantity and quality parameters of the POTABLE WATER established in this APP and its exhibits, during a term
exceeding 60 (sixty) consecutive BUSINESS DAYS counted as from the date on which there is knowledge of the deficiencies
in such parameters, or, during a period exceeding 180 (one hundred and eighty) discontinuous BUSINESS DAYS within 1 (one)
calendar year.

 

		f.	The unjustified suspension or delay in the preparation of the EXECUTIVE PROJECT or the construction,
equipment, TESTS and set-up of operations of the PROJECT WORKS, for causes exclusively attributable to the DEVELOPER,
for a period greater than 180 (one hundred and eighty) BUSINESS DAYS with respect to that provided in the CALENDARED
SCHEDULE, provided that, after carrying out the corresponding notice of breach to the DEVELOPER and the lapsing of the
cure period established below, it implies an equivalent delay in the date foreseen for the commencement of the OPERATION PERIOD
and consequently, the MINUTES OF COMMENCEMENT OF OPERATION are not executed.

 

		g.	The total suspension of the operation of the SEAWATER DESALINATION PLANT for a term greater
than 60 (sixty) consecutive BUSINESS DAYS, or 180 (one hundred and eighty) discontinuous BUSINESS DAYS within a period
of 1 (one) year without a justified cause.

 

		h.	To modify the legal nature of the DEVELOPER, its nationality, corporate structure or the
participation percentages of the shareholders in the corporate capital, without the prior written approval of CEA.

 

    	 	 	72

    
		 

 

    

 

		i.	The juridical, legal or judicial inability of the DEVELOPER, which prevents it from complying
with the obligations arising from this APP for a period greater than 90 (ninety) BUSINESS DAYS.

 

		j.	If the DEVELOPER enters into bankruptcy pursuant to the APPLICABLE LAWS.

 

Unless this APP establishes a different
term, in the event of occurrence of any of the rescission causes mentioned above, the DEVELOPER shall have a term of 90
(ninety) BUSINESS DAYS counted as from the moment of the corresponding notification that for such purposes is given by CEA,
to remedy such cause of rescission.

 

		1.1.	Upon lapsing of such term, CEA may opt to (i) execute an agreement with the DEVELOPER
in which the latter obliges itself to compensate CEA for the expenses in which CEA had incurred as a result of the
breach by the DEVELOPER (within the limitations established in this APP and subtracting any applicable conventional
penalties) and to establish an additional term to remedy the corresponding breach, or (ii) commence the rescission procedure established
in section II of this Clause. For purposes of this paragraph, the DEVELOPER agrees that the lack of exercise of the right
to rescind this APP by CEA shall not be considered as a waiver to such right for the future or subsequent breaches.

 

		1.2.	In the event that CEA elects to commence the rescission procedure of this APP, pursuant
to the immediately preceding paragraph before commencing such procedure, CEA shall notify the CREDITORS on its decision,
in order for the CREDITORS to have the option, within the 90 (ninety) CALENDAR DAYS following the receipt of such
notification, to exercise any of the following options:

 

		(a)	Commence and pursue in a diligent manner, on behalf and in representation of the DEVELOPER,
the acts tending to remedy the cause of rescission of the DEVELOPER; or

 

		(b)	Diligently exercise its guarantee rights against the DEVELOPER with the purpose of assuming,
by itself or through third parties, all the rights and obligations of the DEVELOPER with respect to the SYSTEM, provided
that (i) the party substituting the DEVELOPER has legal and operative capacity, and economic solvency equal or greater than
those of the DEVELOPER at the date of execution of this APP, (ii) the party substituting the DEVELOPER designates
an operator and executes an operation services agreement with it, and both the substitute of the DEVELOPER and the substitute
operator have obtained the corresponding permits and authorizations pursuant to the APPLICABLE LAWS, and (iii) the party
substituting the DEVELOPER creates in favor of CEA the applicable guarantees pursuant to this APP.

 

    	 	 	73

    
		 

 

    

 

		1.3.	Upon persistence of a cause of rescission attributable exclusively to the DEVELOPER which
remediation the PARTIES cannot agree pursuant to this Clause or with respect to which the CREDITORS do not elect
to remedy or assume all the rights and obligations of the DEVELOPER with respect to the SYSTEM, CEA shall have the
option of assuming all the rights and obligations of the DEVELOPER with respect to the SYSTEM. In the event that
CEA exercises such option:

 

		(a)	The DEVELOPER shall transfer to CEA, free of any lien, the ownership of all the technical
documentation (including but not limited to: blueprints, memoirs, operation handbooks, studies and appraisals), and of the premises,
equipment, spare parts, materials, moveable assets and real estate, rights arising from the agreements related to the real estate
on which the infrastructure of the SYSTEM shall be installed or constructed, supplies and accessories that comprise the
PROJECT, in terms of the provisions of this APP, evidencing the physical or legal delivery in the MINUTES OF TERMINATION
OF THE APP AND DEFINITIVE DELIVERY; and

 

		(b)	At all times, including without limitation any of the rescission causes exclusively attributable
to the DEVELOPER, considered in this Clause, CEA shall be obliged to pay in favor of the DEVELOPER (i) the
monthly tariff without IVA in PESOS to pay for the fixed costs of amortization of the investment carried out by the
DEVELOPER in RISK CAPITAL of the TOTAL COST OF THE SYSTEM for the preparation of the EXECUTIVE PROJECT,
construction, equipment and SET-UP OF OPERATIONS of the SYSTEM (T1R), or, if applicable, the TIR PROPORTIONAL
tariff and (ii) the monthly tariff without IVA in PESOS destined to the payment of the fixed amortization costs of
the investment made by the DEVELOPER with resources from the FINANCIAL AGREEMENTS of the TOTAL COST OF THE SYSTEM
for the preparation of the EXECUTIVE PROJECT, construction, equipment and SET-UP OF OPERATIONS of the SYSTEM (T1C),
or, if applicable, the TIC PROPORTIONAL tariff in terms of Clause Eleventh of this APP.

 

		1.4.	Finally, upon the persistence of a cause of rescission exclusively attributable to the DEVELOPER
which remediation the PARTIES cannot agree pursuant to this Clause, with respect to which the CREDITORS elect not
to remedy and with respect to which CEA does not exercise the option of assuming all the rights and obligations of the DEVELOPER
with respect to the SYSTEM, it shall be understood that a FORCE MAJEURE EVENT has occurred and the provisions of
Clause Thirty Second of this APP shall be applicable.

 

    	 	 	74

    
		 

 

    

 

		2.	For causes exclusively attributable to CEA:

 

a) That CEA
does not pay the CONSIDERATION in terms of this APP, and such may not be paid to the DEVELOPER using the CURRENT
ACCOUNT LOAN.

 

b) The breach by CEA
and/or CESPT, of the provisions of the ADMINISTRATION TRUST, provided that the foregoing implies the lack of payment
of the contractual obligations of CEA.

 

c) The non-compliance
by CEA, CESPT or the SPF of their obligations pursuant to the provisions of the CURRENT ACCOUNT LOAN.

 

d) Not maintaining,
for causes attributable to CEA, the concessions, authorizations, licenses and permits exclusively required for the INTAKE
WATER.

 

e) The breach of any
obligation provided in this APP, having as a direct or indirect effect, the generation of damages and losses to the DEVELOPER
or the affectation, obstruction, partial or total impediment of the rights of this APP. The affectation, obstruction, total
or partial impediment of the rights of this APP shall mean, without limitation, the illegal exercise by any entity, agency
or dependence of the Government of the State of Baja California against the exercise of the rights of the DEVELOPER.

 

f) That CEA
refuses to or does not have the necessary capacity to receive the rendering of services subject matter of this APP by the
DEVELOPER, including without limitation, the POTABLE WATER from the SYSTEM in terms of this APP.

 

In the event that any of the rescission
causes attributable to CEA persists, the DEVELOPER may terminate the APP and demand to CEA the acquisition
of the SYSTEM, being CEA obliged to do so, as well as to acquire the real estate in which the SYSTEM is located,
and any other rights related to it, as well as the payment of the damages and losses caused by the breach of CEA pursuant
to the following:

 

		i)	During the INVESTMENT PERIOD

 

CEA shall pay to the DEVELOPER
the expenses and investments carried out by the DEVELOPER or incurred and pending amortization, calculated based on the
corresponding receipts presented by the DEVELOPER, arising from the rendering of the services subject matter of this APP,
which shall include the reimbursement to the DEVELOPER of the debt incurred by it (concepts not included in the T1)
in addition to the amounts of the insurance and the costs of the ADMINISTRATION TRUST, as well as the amount of the other
expenses and costs carried out by the DEVELOPER in the PROJECT. Likewise, CEA shall be liable for the damages
and losses caused to the DEVELOPER by its breach.

 

Within the term granted to the DEVELOPER,
which shall not be less than 90 (ninety) BUSINESS DAYS, it shall proceed to make an inventory of the assets that comprise
the PROJECT WORKS at that moment, which it shall deliver, in coordination with the SUPERVISION and a representative
of CEA. CEA shall commence the payment of the T1, updated and determined by the SUPERVISION, in the understanding
that the corresponding payments shall be made monthly as from the 37th (thirty seventh) month counted as from the APP
EFFECTIVENESS COMMENCEMENT and until the 444th (four hundred and forty fourth) month counted as from such date and
according to the provisions of EXHIBIT 13 of this APP.

 

    	 	 	75

    
		 

 

    

 

		ii)	During the OPERATIONS PERIOD

 

Within the term granted to the DEVELOPER,
which may not be less than 90 (ninety) BUSINESS DAYS, it shall proceed to make an inventory of the assets that comprise
the SYSTEM at that moment, which it shall deliver to CEA, in coordination with the SUPERVISION and a representative
of CEA.

 

CEA shall pay to the DEVELOPER
the expenses and investments carried out by the DEVELOPER or incurred and pending amortization, calculated based on the
corresponding evidence submitted by the DEVELOPER, arising from the rendering of the services subject matter of this APP,
which shall include the reimbursement to the DEVELOPER of the debt incurred by it (concepts not included in the T1).
Likewise, CEA shall be liable for the damages and losses caused to the DEVELOPER by its breach.

 

CEA shall continue paying the T1
tariff, in accordance with the provisions of EXHIBIT 13 “Adjustments to the amount of the CONSIDERATION”
in addition to the amounts of the insurance and the costs of the ADMINISTRATION TRUST, in the understanding that such payments
shall be made monthly during the remaining term and until the conclusion of the 444 (four hundred and forty four) months counted
as from the APP EFFECTIVENESS COMMENCEMENT.

 

In any event of rescission of the APP
and regardless the applicable provisions of the LAPPEBC, the PARTIES agree that the procedure for the DELIVERY
of the SYSTEM provided in EXHIBIT 17, as appropriate, shall be applicable.

 

		II.	Procedure in the event of rescission.

 

		1.	Due to causes exclusively attributable to the DEVELOPER:

 

In the event that pursuant to
section I.1 above of this CLAUSE THIRTY FIRST, CEA is entitled to and elects to demand the rescission of this APP,
CEA shall proceed in accordance with the procedures for resolution of controversies established in CLAUSE THIRTY FOURTH
of this APP.

 

		2.	Due to causes exclusively attributable to CEA:

 

In the event that pursuant to
section I.2 above of this CLAUSE THIRTY FIRST, the DEVELOPER elects to demand the rescission of this APP,
the DEVELOPER shall proceed in accordance with the procedures for resolution of controversies established in CLAUSE THIRTY
FOURTH of this APP.

 

THIRTY SECOND.- EARLY TERMINATION DUE
TO ACT OF GOD OR FORCE MAJEURE EVENT.

 

The breach of any of the obligations assumed
by the PARTIES in this APP shall not be cause for termination or rescission, nor for the application of conventional
penalties and sanctions, when such result from an ACT OF GOD or FORCE MAJEURE EVENT.

 

The PARTIES agree that, upon occurrence
of any of the events considered ACT OF GOD or FORCE MAJEURE EVENT that prevent compliance of their obligations, the
following shall be applicable:

 

    	 	 	76

    
		 

 

    

 

The party affected by the ACT OF GOD
or FORCE MAJEURE EVENT:

 

		(i)	Shall take all the reasonable actions to mitigate the consequences of such event in the compliance
of its obligations pursuant to this APP, without thereby implying any obligation of making expenses;

 

		(ii)	Shall resume the compliance of its obligations affected by the ACT OF GOD or FORCE MAJEURE
EVENT as soon as possible; and

 

		(iii)	Shall not be released from liability pursuant to this APP if the breach is caused by its
breach to the obligations of this APP.

 

The party requesting the acknowledgement
of the existence of an ACT OF GOD or FORCE MAJEURE EVENT shall notify so in writing to the other party within the
5 (five) BUSINESS DAYS following the date of awareness of the ACT OF GOD or FORCE MAJEURE EVENT. Such initial
notification shall contain sufficient details to identify the event considered as ACT OF GOD or FORCE MAJEURE EVENT,
including a description of the event, place, date, time in which it occurred and causes that motivated it.

 

Within the 5 (five) BUSINESS DAYS
following the date on which a party receives the notification referred above, the party affected by an ACT OF GOD or a FORCE
MAJEURE EVENT shall submit all the relevant information in connection with its noncompliance (or delay in compliance) due to
the ACT OF GOD or FORCE MAJEURE EVENT, which shall include, without limitation:

 

		h.	The effect that the ACT OF GOD or FORCE MAJEURE EVENT shall have on the capacity
of the party to comply with its contractual obligations;

 

ii.     The
actions that it has performed in accordance with section (i) of the third paragraph of this Clause;

 

iii.    The
date on which the ACT OF GOD or FORCE MAJEURE EVENT occurred;

 

iv.    An
estimate of the duration of the ACT OF GOD or FORCE MAJEURE EVENT and its effects;

 

v.    Alternative
solutions, both temporary and/or permanent for the ACT OF GOD or FORCE MAJEURE EVENT, if any.

 

The party requesting the acknowledgement
of the existence of an ACT OF GOD or FORCE MAJEURE EVENT shall notify the other within the 3 (three) BUSINESS
DAYS following the date on which the ACT OF GOD or FORCE MAJEURE EVENT or their effects have disappeared, with
the purpose of resuming the compliance of its obligations arising from this APP.

 

In the event that the party giving the
notice provided in terms of the previous paragraphs, receives or obtains any additional information in connection with the ACT
OF GOD or FORCE MAJEURE EVENT, it shall deliver such additional information to the other party within the 3 (three)
BUSINESS DAYS following its awareness of such information.

 

    	 	 	77

    
		 

 

    

 

In addition to the provisions below, in
the event of occurrence of an ACT OF GOD or FORCE MAJEURE EVENT, the party affected by an ACT OF GOD or a
FORCE MAJEURE EVENT shall be entitled to the additional costs caused by the ACT OF GOD or FORCE MAJEURE EVENT
to be considered in the payment of the CONSIDERATION, which shall be increased in the amounts corresponding to the additional
costs incurred or to be incurred by the DEVELOPER.

 

In any ACT OF GOD or FORCE MAJEURE
EVENT, CEA shall continue the payments of the T1 tariff, in addition to any other payment to which CEA is obliged,
according to this APP, including the payment of the T2 tariff.

 

		I.	EFFECTS DURING THE CONSTRUCTION.

 

In the event of an ACT OF GOD or
FORCE MAJEURE EVENT that prevents the construction of the SYSTEM the effects of this APP may be partially
and temporarily suspended until the effects caused by such event disappear, at which moment the legal effects of the APP
shall be resumed in their full extent and validity, until its termination.

 

If, upon lapsing of 90 (ninety) continuous
CALENDAR DAYS or 180 (one hundred and eighty) discontinuous CALENDAR DAYS within a year, the effects caused
by the ACT OF GOD or FORCE MAJEURE EVENT have not disappeared, the PARTIES may agree the early termination
of this APP, subject to section I of CLAUSE THIRTIETH.

 

		II.	EFFECTS DURING THE OPERATION

 

If the ACT OF GOD or FORCE MAJEURE
EVENT arise during the OPERATION PERIOD, and impede the continuation of the operation of the SYSTEM, CEA shall
only have to cover, in addition to the payment of the T1 (Fixed Investment Tariff), the T2 (Fixed Operation and Maintenance
Tariff) of the CONSIDERATION in favor of the DEVELOPER.

 

If, upon lapsing of 90 (ninety) continuous
CALENDAR DAYS or 180 (one hundred and eighty) discontinuous CALENDAR DAYS within a period of 1 (one) year, the
effects caused by the ACT OF GOD or FORCE MAJEURE EVENT have not disappeared, the PARTIES shall jointly analyze
the contractual situation to determine the measures that should be taken and may agree on a modification to the obligations, an
extension of the partial or total interruption of the service, or the early termination of the APP, in the last case being
subject to section II of CLAUSE THIRTIETH.

 

THIRTY THIRD.- EARLY TERMINATION DUE
TO GENERAL INTEREST OR JUSTIFIED CAUSES.

 

The PARTIES expressly agree that,
in the event of early termination of the APP due to general interest or justified causes, the SYSTEM and all the
assets and rights necessary for its operation and maintenance, including supply materials, equipment and spare parts shall be transferred
to CEA in the condition in which they are at that time; thus, CEA hereby expressly and irrevocably waives any action
and/or right that it might have to claim the payment or remedy of hidden defects, or any other liability related to the condition
of the SYSTEM and all the rights and assets necessary for the operation and maintenance thereof, including supply materials,
equipment and spare parts.

 

    	 	 	78

    
		 

 

    

 

THIRTY FOURTH.- PROCEDURE TO SOLVE TECHNICAL
CONTROVERSIES.

 

In the event of any disagreement or controversy
of technical or economic nature, but not legal, related to this APP, the PARTIES shall try to solve it in mutual
agreement and pursuant to the principle of good faith, for which either may notify in writing to the other party, on a disagreement
or controversy in terms of this Clause.

 

		(a)	The DEVELOPER or CEA, accordingly, shall have a term of 5 (five) BUSINESS DAYS
counted as from the reception of the mentioned notification to discuss and provide the evidence that they deem convenient to the
effect of reaching an agreement to solve the controversy.

 

		(b)	In the event that the PARTIES do not manage to achieve a written agreement, within a term
of 10 (ten) BUSINESS DAYS following the expiration of the term mentioned in the paragraph above, then they shall submit
themselves to the decision of an expert committee (the “Experts Committee"), pursuant to the following procedure:

 

		i.	The Experts Committee shall be comprised by three experts in the corresponding matter, with each
of the PARTIES appointing one, and the third being appointed by the two experts previously appointed by each of the PARTIES,
who shall be included in the list of justice administration experts and auxiliaries of the Judicial Branch of the State of Baja
California, unless such list does not have experts specialized in the matter of the controversy, in which event the corresponding
knowledge shall have to be evidenced.

 

		ii.	To commence the procedure before the Experts Committee, the interested party shall provide the
counterparty with a notice that shall contain:

 

		a.	The decision of submitting the controversy to the Experts Committee;

 

		b.	Its designated expert;

 

		c.	The controversy to be resolved and a description thereof, as broad as possible, with the facts
from which it arose;

 

		d.	The evidence with which it intends to justify its intention; and

 

		e.	The proposal to resolve the controversy.

 

		iii.	Within the 5 (five) BUSINESS DAYS immediately following the mentioned notice, the notified
party shall reply, with the same requirements mentioned above.

 

		iv.	The designated experts shall have 2 (two) BUSINESS DAYS as from the reception of the writs
of the PARTIES to designate the third expert and integrate the Experts Committee. If they do not reach an agreement, the
third member of the Experts Committee shall be designated through an impartial procedure in a term no longer than 10 (ten) BUSINESS
DAYS.

 

    	 	 	79

    
		 

 

    

 

		v.	Once the Experts Committee is integrated, it may procure the necessary elements to analyze each
of the positions of the PARTIES. For such purposes, the PARTIES oblige themselves to cooperate with the Experts Committee,
providing it with the documentation and information required by it.

 

		vi.	If it considers it applicable, the Experts Committee shall receive the PARTIES at a joint
hearing.

 

		vii.	In any event, the Experts Committee shall issue its resolution in a term no longer than 60 (sixty)
BUSINESS DAYS as from its creation.

 

		viii.	If the resolution is unanimously approved, it shall be binding to the PARTIES.

 

		ix.	The fees and expenses of the experts caused by the mentioned procedure of the Experts Committee,
shall be paid with resources of the ADMINISTRATION TRUST. For such purpose, the party that commences the corresponding procedure
shall deposit in the ADMINISTRATION TRUST the amount corresponding to the fees and expenses established by the Experts Committee,
in the understanding that, in its resolution, the Experts Committee shall decide the distribution of the costs and expenses (including
their fees) caused as a result of the procedure set forth in this Clause, pursuant to the following:

 

		(a)	If the party that commenced the procedure obtains all the claims requested in the procedure, it
shall be compensated with the incurred expenses, including without limitation the deposit made in the ADMINISTRATION TRUST.

 

		(b)	If the party that commenced the procedure does not obtain any of the requested claims, it shall
not have the right to any reimbursement.

 

		(c)	If the party that commenced the procedure obtains the requested claims partially, the Experts Committee
shall decide the portion of the incurred costs and expenses that shall be reimbursed to it.

 

THIRTY FIFTH.- CONVENTIONAL PENALTIES
FOR BREACH.

 

Each of the following events, except when
such result from ACTS OF GOD, FORCE MAJEURE EVENTS or CHANGES IN LAW, or that are consequence of actions or omissions
of CEA or third parties, not exclusively attributable to the DEVELOPER, shall constitute a breach by the DEVELOPER
and, therefore, after expiration of the corresponding grace and/or cure periods, as applicable, shall have as consequence the application
of conventional penalties at its charge, pursuant to the following terms:

 

    	 	 	80

    
		 

 

    

 

		1.	Breach in the PRODUCTION CAPACITY of the POTABLE WATER supplied in the SEAWATER
DESALINATION PLANT at any moment after the date of issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATIONS.
In this case, the VARIABLE OPERATION AND MAINTENANCE TARIFF (T3) corresponding to the non-delivered volume shall not be
paid to the DEVELOPER.

 

		2.	For not delivering the POTABLE WATER with the quality established in EXHIBIT 14,
at any moment after the date of issuance and execution of the MINUTES OF COMMENCEMENT OF OPERATION, in which case, the VARIABLE
OPERATION AND MAINTENANCE TARIFF (T3) corresponding to the volume not delivered with the established quality shall not be paid
to the DEVELOPER unless CEA receives such POTABLE WATER.

 

		3.	In the event of a delay exclusively attributable to the DEVELOPER after the APP EFFECTIVENESS
COMMENCEMENT and before the issuance of the MINUTES OF COMMENCEMENT OF OPERATIONS, provided that such implies a delay
in the term foreseen for the commencement of the PERIOD OF OPERATIONS and consequently, the MINUTES OF COMMENCEMENT OF
OPERATION are not executed, the DEVELOPER shall pay to CEA a conventional penalty equivalent to 100% (one hundred
percent) of the monthly T3 provided in the Format 8 of “EXHIBIT G. Financial formats for the calculation of the CONSIDERATION”
for each month of delay, or the corresponding proportion.

 

		4.	In the event that the DEVELOPER is not delivering any amount of POTABLE WATER due
to causes attributable to the DEVELOPER, a CONVENTIONAL PENALTY equivalent to 100% (one hundred percent) of the monthly
T2 provided in Format 7 of “EHXIBIT G. Financial formats for the calculation of the CONSIDERATION” for
each month of delay, or the corresponding proportion, shall be applicable.

 

The amount of these expenses shall be updated
in accordance with the INPC from such base date, until the date in which the compliance is satisfied.

 

The payment of the conventional penalties
shall not release the DEVELOPER from any of its contractual obligations, or from complying with those in delay, irrespective
of the authority of CEA to rescind this APP in terms of CLAUSE THIRTY FIRST of this instrument. Notwithstanding,
the payment of the conventional penalties shall be the sole remedy of CEA payable by the DEVELOPER to CEA
as a consequence of the breach of the DEVELOPER and within the limits established in this APP.

 

In each event of application of conventional
penalties, CEA shall notify in writing to the DEVELOPER the corresponding amount that it has to pay and the date
on which it must be delivered to CEA. In the event of breach of such date, CEA shall proceed to enforce the corresponding
guarantees in terms of CLAUSE TWENTY EIGHTH.

 

    	 	 	81

    
		 

 

    

 

The payment of the conventional penalties
mentioned in this CLAUSE THIRTY FIFTH, does not release the DEVELOPER from the liabilities for damages and losses
caused to third parties, including environmental damage, as well as of the sanctions and infractions mentioned in Titles Seventh
and Tenth of the National Waters Law and Title Tenth of its Regulations, or any other APPLICABLE LAWS.

 

The payment of the conventional penalties
that may be applied to the DEVELOPER as a result of the rescission of this APP, shall be binding to the DEVELOPER
provided that there is a definitive resolution obliging it to make such payment, which shall in no event exceed the CONSTRUCTION
GUARANTEE or the OPERATION GUARANTEE, as applicable.

 

The DEVELOPER shall pay to CEA
the amount resulting from the conventional penalties mentioned in this CLAUSE THIRTY FIFTH within a term of 30 (thirty)
BUSINESS DAYS counted as from the date of the written notification on its application by CEA to the DEVELOPER,
accompanied with the corresponding definitive resolution. This penalty may not be greater than the amount of the CONSTRUCTION
GUARANTEE or the OPERATION GUARANTEE, as applicable.

 

In the event that the DEVELOPER
does not cover the amounts of the conventional penalties in which it incurs within such term, CEA shall require their payment
to the bond company granting the OPERATION GUARANTEE or the CONSTRUCTION GUARANTEE, as applicable.

 

In the event of applicability of two or
more conventional penalties for the same event, the highest conventional penalty shall be applied.

 

THIRTY SIXTH.- LABOR LIABILITY.

 

The DEVELOPER, as employer of the
personnel occupied as a result of the works subject-matter of this APP, shall be solely liable for the obligations arising
from the APPLICABLE LAWS in labor, safety and social welfare matters. All the activities and documents related to the compliance
of such obligations shall be informed and duly evidenced periodically by the DEVELOPER to CEA, when the latter requests
so.

 

Therefore, the DEVELOPER agrees
to answer all the claims that its workers may file against it or against CEA, in connection with the execution of the PROJECT
WORKS or the performance of the services subject-matter of this APP.

 

Upon expiration of the term of this APP
for any reason, the DEVELOPER obliges itself to terminate the labor relationships that it has as of date, with the workers
at its service, paying the corresponding debts and indemnifications in terms of the applicable labor provisions.

 

If the early termination of the APP
arises from any cause not attributable to the DEVELOPER, but attributable to CEA (including without limitation the
early termination due to general interest reasons pursuant to section V of the Thirtieth Clause above), the expenses generated
by the payment of compensation to the workers shall be considered as part of the evidenceable expenses that CEA shall pay
to the DEVELOPER. On the other hand, in the event of early termination of this APP for any cause not attributable
to either party (including without limitation ACTS OF GOD or FORCE MEJEURE EVENTS), the expenses generated by severance
payments to the workers shall be covered in equal parts by the DEVELOPER and CEA.

 

    	 	 	82

    
		 

 

    

 

THIRTY SEVENTH.- ASSIGNMENT OF RIGHTS
AND SUBCONTRACTING.

 

The DEVELOPER may not assign, transfer,
encumber, compromise or grant in guarantee, in any manner, totally or partially, the rights arising from this APP, without
the prior written authorization of CEA, except as provided in this CLAUSE THIRTY SEVENTH.

 

In terms of the paragraph above, CEA
hereby authorizes the DEVELOPER to assign to the ADMINISTRATION TRUST the collection rights of the DEVELOPER
pursuant to this APP, including without limitation, the right to receive the CONSIDERATION. Likewise, CEA
hereby authorizes the DEVELOPER and its shareholders to affect in guarantee the shares representing the corporate capital
of the DEVELOPER.

 

The DEVELOPER may subcontract the
WORKS or any of its obligations arising from this APP, prior written authorization of CEA, unless the PROPOSAL
had provided that the DEVELOPER would subcontract the WORKS, in which event, such previous authorization shall not
be required. Such authorization may only be denied by CEA when there is a justified cause, which is evidenced to
the DEVELOPER.

 

Irrespective of having the authorization
of CEA for the subcontracting, the DEVELOPER shall remain solely liable for the quality and adequate and timely execution
of the WORKS subject matter of this APP, as if such subcontracting had not occurred and therefore, shall ensure that
each Contractor complies with all the terms and conditions of this APP.

 

The consent of CEA to subcontract
does not release or exempt the DEVELOPER from its responsibilities and obligations arising from this APP, therefore,
it shall be completely liable for the breaches, omissions and negligent acts in which one or all of the Contractors, their agents,
employees or personnel incur and shall keep CEA safe from any liability, loss or expense made for such cause.

 

In the event that the DEVELOPER
obtains from one of its contractors a guarantee for any of the works performed or executed, for a term longer than that of this
APP, it obliges to transfer to CEA the benefit of such guarantee.

 

Except as set forth in the paragraph above,
no direct legal relationships shall be generated between CEA and the contractors.

 

THIRTY EIGHTH.- NOTICES

 

All the communications between the PARTIES
relating to the APP, shall be made in writing, with acknowledgement of receipt and delivered to the domicile of the receiver
party, mentioned in this CLAUSE THIRTY EIGHTH:

 

    	 	 	83

    
		 

 

    

 

STATE WATER COMMISSION OF BAJA CALIFORNIA

 

(“CEA”)

 

Bulevar Anáhuac No. 1016, Col. El
Vidrio, C.P. 21080, Mexicali

 

Baja California

 

AGUAS DE ROSARITO, S.A.P.I. DE C.V.

 

(“DEVELOPER”)

 

Boulevard Sánchez Taboada 10488-801,
Zona Río, Tijuana

 

Baja California C.P. 22320

 

Any change to the mentioned domiciles shall
be notified to the other PARTY with at least 10 (ten) BUSINESS DAYS of anticipation. In the event that the DEVELOPER
omits notifying in writing to CEA any change of its domicile, the notices made by CEA in the domicile mentioned in
this CLAUSE THIRTY EIGHTH or in the last domicile notified in writing by the DEVELOPER, shall have all legal effects.

 

The DEVELOPER shall be obliged to
notify CEA the name of its legal representative, to whom all communications related to the APP shall be addressed.
This representative shall have the sufficient authority to make the corresponding decisions, or to transfer to the administration
bodies of the DEVELOPER, the requirements related to the APP.

 

In the event of any change of domicile,
the other PARTY shall be notified in writing, as it shall be understood that such change shall be effective as from the
date of written evidence of knowledge of the counterpart.

 

THIRTY NINTH.- DISCREPANCIES IN THE
INFORMATION

 

In the event of discrepancies in the information
or documents comprising the APP, the following shall apply. If the discrepancy arises:

 

		1.	Between an original and its copies, the original shall prevail;

 

		2.	Between the amounts written in letter and those written in number, the amounts written in letter
shall prevail;

 

		3.	Between the clauses of the APP and its Exhibits, the provisions of the exhibits shall prevail,
except for the previous versions of this APP and any clarifications or documents related to such previous versions, which
shall have no effect over the clauses of this APP;

 

    	 	 	84

    
		 

 

    

 

		4.	Between the BASES OF THE PUBLIC BIDDING and the APP, the APP shall prevail;

 

		5.	Among the Exhibits of this APP, they shall prevail in the appearing order in CLAUSE FORTY
FIRST of this APP.

 

The DEVELOPER shall be liable for
the calculation errors made in the preparation of the documents in its charge or under its responsibility. If applicable, the calculation
errors shall be corrected in the manner that results consistent with the purpose of the APP, pursuant to the APPLICABLE
LAWS.

 

The Exhibits that exist at the moment of
execution of this APP or those prepared afterwards shall form an integral part of the APP.

 

The PARTIES accept that any agreement
or provision contained in this APP which results contrary to any public order provision shall be considered as inexistent
and shall not affect the validity of the other terms and conditions of the APP. When legally possible, the PARTIES
shall carry out all applicable actions to substitute the invalid terms and conditions.

 

FORTIETH.- ARBITRATION

 

All disputes arising out of or in connection
with this APP, shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “REGULATIONS
OF THE CCI”), valid at the moment of execution of this agreement, which are deemed incorporated to this clause.

 

The place of arbitration shall be solely
and exclusively the City of Mexicali, Baja California, United States of Mexico, without the PARTIES being submitted to the
discretional authority of the arbitration tribunal of carrying out hearings and meetings anywhere it considers appropriate.

 

The Parties agree that the applicable legislation
shall be the LAPPEBC and its Regulations and other valid applicable laws in Mexico.

 

The language to be used in the arbitration
procedure shall be Spanish.

 

The number of the arbitrators shall be
3 (three), designated pursuant to the REGULATIONS OF THE CCI, provided that the third arbitrator, who shall act as Chairman,
shall be designated by the other two co-arbitrators, designated by the PARTIES. In the event that the two first co-arbitrators
do not designate the third arbitrator within the 30 CALENDAR DAYS following the confirmation of the second co-arbitrator,
such arbitrator shall be designated pursuant the REGULATIONS OF THE CCI.

 

The arbitration award shall be final and
binding for the PARTIES.

 

The PARTIES expressly agree that,
irrespective of who commences the arbitration, the DEVELOPER shall anticipate all the fees of the arbitrators and the administrative
expenses of the International Court of Arbitration of the International Chamber of Commerce. Irrespective of whether the arbitration
award grants the payment of other claims in its favor, the arbitration tribunal may only grant costs and expenses in favor of the
DEVELOPER when:

 

    	 	 	85

    
		 

 

    

 

		(a)	The actions or defenses of CEA are considered unfounded, frivolous or reckless; or

 

		(b)	That the conduct of CEA in the procedure was inappropriate and unconducive in such a manner
that the arbitral tribunal considers justified to order the indemnification to the DEVELOPER for the costs and expenses
incurred due to the arbitration procedure.

 

Except as otherwise provided in this APP
or as agreed by the PARTIES, irrespective of the commencement or the procedure of an arbitration, each of the PARTIES
shall be obliged to continue complying with its obligations pursuant to this APP.

 

FORTY FIRST.- EXHIBITS.

 

The PARTIES acknowledge as integral
part of this APP the following Exhibits listed below:

 

		EXHIBIT 13	Initial Tariffs and Adjustments to the Amount of the CONSIDERATION

 

		EXHIBIT 4	PROPOSAL

 

		EXHIBIT 1	CALL

 

		EXHIBIT 2	AWARD

 

		EXHIBIT 3	CERTIFIED COPY OF THE CHARTER OF INCORPORATION OF THE
DEVELOPER

 

		EXHIBIT 5	Scope of the Works of the TERMS OF REFERENCE

 

		EXHIBIT 6	QUALITY ASSURANCE HANDBOOK

 

		EXHIBIT 7	Protocol of TESTS and SET-UP OF OPERATIONS
of the SYSTEM

 

		EXHIBIT 8	Proposed CALENDARED SCHEDULE

 

		EXHIBIT 14	Quality of the POTABLE WATER

 

		EXHIBIT 16	Concessions, Authorizations, Licenses and Permits

 

		EXHIBIT 17	Procedure for the DELIVERY of the SYSTEM

 

		EXHIBIT 18	Regulations to measure the quality and quantity of the
INTAKE WATER, POTABLE WATER and WASTE WATER

 

		EXHIBIT 9	[Intentionally left blank].

 

		EXHIBIT 10	[Intentionally left blank].

 

    	 	 	86

    
		 

 

    

 

		EXHIBIT 11	[Intentionally left blank].

 

		EXHIBIT 12	[Intentionally left blank].

 

		EXHIBIT 15	[Intentionally left blank].

 

Likewise, they acknowledge as an integral
part of this APP the documents that shall hereinafter be included in the progressive numerical order, identified as EXHIBITS
and duly executed by both PARTIES.

 

FORTY SECOND.- PUBLIC NATURE OF THE
PUBLIC PRIVATE PARTNERSHIP AGREEMENT APP

 

This APP is of public order and
does not lose its nature for the participation of the DEVELOPER, as the services that it shall perform in terms of CLAUSE
FIRST of this APP, are of social interest as they shall provide CEA better efficiency in the rendering of the
public service of supply of POTABLE WATER which corresponds to the State of Baja California to provide to the community.

 

FOURTY THIRD.- AMENDMENTS TO THE APP

 

The considerations mentioned in the PROPOSAL
shall be responsibility of the DEVELOPER; therefore, if at the moment of preparing the EXECUTIVE PROJECT, amendments
or variations to the PROPOSAL are required, different to CHANGES IN LAW or any other circumstances established in
this APP, in the quality or quantity of the POTABLE WATER, all the adjustments for the compliance therefore shall
be at its expense, except for those required by CEA, and shall be governed by articles 106 and 107 of the LAPPEBC.
To that effect, the DEVELOPER shall be entitled to propose the necessary adjustments to CEA.

 

The amendments arising from technological
innovations shall be governed pursuant to the provisions of Clause Sixth of this APP.

 

In the event that, in the future there
are CHANGES IN LAW or circumstances resulting in greater requirements in the quality or quantity of the POTABLE WATER
arise after the execution of the APP, CEA shall, at the request of the DEVELOPER, carry out amendments thereto
or to the APP pursuant to the proposal of the DEVELOPER, to adjust it to the new circumstances, laws or normativity;
which the DEVELOPER obliges itself to implement, provided that there is a written agreement of both PARTIES regarding
the manner in which the foregoing shall be carried out, the impact that it could have on the CONSIDERATION or in the term
of this APP.

 

Likewise, with the purpose of reestablishing
the economic equilibrium of the project in terms of article 108 of the LAPPEBC, the DEVELOPER shall be entitled to
the review of the APP when, as a result of a CHANGE IN LAW, the cost of execution of the PROJECT is substantially
increased, or the benefits in its favor are reduced, also substantially.

 

For such purposes, it is understood that
the mentioned variations are substantial when they are durable (that is, they persist for more than 5 (five) BUSINESS DAYS)
and place at risk the financial viability of the PROJECT (that is, that they represent any change in the financial conditions
considered in the PROPOSAL).

 

    	 	 	87

    
		 

 

    

 

Likewise, the APP shall be reviewed
when due to a CHANGE IN LAW there is an economic disequilibrium thereof, which implies a yield for the DEVELOPER
greater than the one provided in its ECONOMIC PROPOSAL and in this APP.

 

If CEA does not answer the proposal
of the DEVELOPER in an affirmative manner within the 15 CALENDAR DAYS following its submittal, or disagrees with
the estimate adjustment proposed by the DEVELOPER and after making a reasonable and good faith effort, the PARTIES
are unable to agree an adjustment that allows the DEVELOPER to reestablish the economic situation in which it was before
the CHANGE IN LAW, or to carry out the necessary adjustments in the CONSIDERATION, any of the Parties may, within
the 2 (two) BUSINESS DAYS following the notice of the corresponding proposal, submit the controversy to the procedure established
in Clause Fortieth of this APP. The CONSIDERATION may be adjusted while the disagreement is being resolved, but in
any event, the adjustments shall be retroactive from the date on which the costs of the DEVELOPER had increased or diminished
as a result of the CHANGE IN LAW.

 

If a CHANGE IN LAW cannot be remedied
even through an adjustment in the CONSIDERATION, pursuant to that certified within the procedure established in Clause Thirty
Fourth, such event shall constitute a FORCE MAJEURE EVENT.

 

For the purposes set forth in this Clause,
the DEVELOPER shall not be liable for the noncompliance of any of its obligations arising from the APP to the extent
and for as long as such compliance is not possible as a result of the acts that the DEVELOPER shall necessarily adopt to
comply with a CHANGE IN LAW, in the understanding that the DEVELOPER shall make its best efforts and act with due
diligence to, as soon as possible, conclude the actions required in accordance with the prudent practices of the industry to comply
with the CHANGE IN LAW.

 

FORTY FOURTH.- CONDITIONS FOR THE COMMENCEMENT
OF EFFECTIVENESS OF THE APP 

 

This APP shall be binding for the
DEVELOPER and for CEA from the date on which each and all of the following conditions are met:

 

		1.	The incorporation, registration and effectiveness of the ADMINISTRATION TRUST.

 

		2.	The incorporation, registration and effectiveness of the MASTER GUARANTEE TRUST, as well
as the affectation of the corresponding percentage of the income arising from the tax on personal remuneration, in terms of transitory
article eighteenth of the Income Law of the State for 2016 to the assets of such MASTER GUARANTEE TRUST, which shall occur,
at the latest within the 3 (three) months following the date of execution of this APP.

 

    	 	 	88

    
		 

 

    

 

		3.	That the DEVELOPER has obtained the permits and authorizations for the use of the RIGHT
OF WAY, in terms of CLAUSE EIGHTH.

 

		4.	That CEA has obtained the rights required for the collection, use and exploitation of the
INTAKE WATER, in terms of CLAUSE FIFTEENTH, which shall occur, at the latest, within the 4 (four) months following
the date of execution of this APP.

 

		5.	The execution of the WATER PURCHASE AND SALE AGREEMENT and the contribution of the collection
rights of CEA thereunder, to the ADMINISTRATION TRUST.

 

		6.	The execution, registry and effectiveness of the CURRENT ACCOUNT LOAN and the contribution
of the rights arising therefrom to the ADMINISTRATION TRUST, which shall occur within the 6 (six) months following the date
of execution of this APP, as well as evidence that the CURRENT ACCOUNT LOAN has been registered within the MASTER
GUARANTEE TRUST with the purpose of having the SPF guarantee possible liquidity shortfalls of CEA in terms of
this APP.

 

		7.	The hiring of the SUPERVISION.

 

		8.	Obtaining the authorizations and permits necessary for the discharge of the WASTE WATER.

 

		9.	The execution of the FINANCIAL AGREEMENTS that allow the DEVELOPER access to the
necessary resources to comply with its obligations under this APP. The foregoing in the understanding that if the failure
to execute the FINANCIAL AGREEMENTS is outside the reasonable control of the DEVELOPER, is not attributable to its
guilt or negligence, and could not have been avoided despite the exercise of due diligence, the DEVELOPER may claim the
existence of an ACT OF GOD or a FORCE MAJEURE EVENT in terms of this APP .

 

Unless the PARTIES agree an extension
in writing, in the event that the conditions mentioned in sections 2 and 6 above are not met within the terms established for such
purpose, this APP may be early terminated by the DEVELOPER, without any liability, and being entitled to the reimbursement
of the expenses and investments carried out by the DEVELOPER or incurred and pending of amortization, calculated based on
the corresponding receipts submitted by the DEVELOPER.

 

    	 	 	89

    
		 

 

    

 

FORTY FIFTH.- ADMINISTRATION TRUST

 

The DEVELOPER and CEA oblige
themselves to incorporate the ADMINISTRATION TRUST in (BANK), which shall have, among other, the following purposes:
a) to administer all the resources arising from the CONSIDERATION, as well as the RISK CAPITAL and the resources
arising from the FINANCIAL AGREEMENTS; b) to receive the resources arising from the WATER PURCHASE AND SALE AGREEMENT
to pay the CONSIDERATION in the manner and terms mentioned in this APP and in the ADMINISTRATION TRUST; c)
the administration and management of all the necessary resources or those directly or indirectly related with the preparation of
the EXECUTIVE PROJECTS, the construction, equipment and set-up of operations of the SYSTEM, as well as with the operation,
conservation and maintenance of the SYSTEM; and d) the administration, management and disposal of the resources arising
from the CURRENT ACCOUNT LOAN, which right of disposition shall also be affected to the ADMINISTRATION TRUST.

 

The DEVELOPER obliges itself to
deposit into the assets of the ADMINISTRATION TRUST, the RISK CAPITAL and the resources from the FINANCIAL AGREEMENTS
or the rights over them, as well as all the income arising from the CONSIDERATION and to be subject to the priority and
conditions for its disposition established therefor.

 

FORTY SIXTH.- TOTAL COST OF THE SYSTEM.

 

The TOTAL COST OF THE SYSTEM, pursuant
to all the terms and conditions included in this APP and its Exhibits, is of $9,072’882,279.00
(nine billion, seventy two million, eight hundred and eighty two thousand, two hundred and seventy  pesos/100 Mexican Currency)
without IVA, in values of February, 2016. The TOTAL COST OF THE SYSTEM is comprised by the COST OF THE SYSTEM and
the COST OF THE WORKS, and shall be adjusted and updated pursuant to EXHIBIT 13 of this APP.

 

The COST OF THE SYSTEM shall be
integrated by the PROJECT WORKS, the SUPERVISION and Other Costs in accordance with the following items and values:

 

	DESALINATION PLANT	 	 	 	 	 	 	 	 	 
	ITEM	 	Grand Total	 	 	First Stage 

Total	 	 	Second Stage 
 Total	 
	1.     Executive Project	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Preparation of the Executive Project, including: Engineering, complementary and detailed studies, projects, affected land occupancy; except for the area on which the Plant shall be located, filings and procedures or the required authorizations, etc.	 	 	 	 	 	 	 	 	 	 	 	 
	Total	 	 	129,378,662	 	 	 	85,999,912	 	 	 	43,378,750	 

 

    	 	 	90

    
		 

 

    

  

	2.       Construction
    and Equipment	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Land and Right of Way	 	 	466,560,000	 	 	 	466,650,000	 	 	 	0	 
	Reimbursement Certificate	 	 	30,314,502	 	 	 	30,314,502	 	 	 	0	 
	Preoperative expenses	 	 	322,750,433	 	 	 	228,885,498	 	 	 	93,864,935	 
	Collection and plant conduction Works	 	 	371,509,567	 	 	 	327,705,931	 	 	 	43,803,636	 
	Pretreatment	 	 	1,246,358,473	 	 	 	611,205,745	 	 	 	635,152,727	 
	Plant Civil Works	 	 	537,393,815	 	 	 	271,443,166	 	 	 	265,950,649	 
	Inverse Osmosis Equipment	 	 	1,466,081,043	 	 	 	653,210,705	 	 	 	812,870,338	 
	Post-treatment	 	 	230,898,475	 	 	 	121,389,384	 	 	 	109,509,091	 
	Aqueduct Pumping Equipment	 	 	246,022,009	 	 	 	167,801,230	 	 	 	78,220,779	 
	Aqueduct	 	 	1,295,107,503	 	 	 	888,359,451	 	 	 	406,748,052	 
	Tank 3 Expansion	 	 	91,134,127	 	 	 	59,845,815	 	 	 	31,288,312	 
	Delivery Point(s) Connection(s)	 	 	66,103,477	 	 	 	59,845,815	 	 	 	6,257,662	 
	Waste Water Conduction Line	 	 	30,135,127	 	 	 	30,135,127,	 	 	 	0	 
	Other Items	 	 	167,533,040	 	 	 	136,244,728	 	 	 	31,288,312	 
	Electric lines, substation and control	 	 	941,570,222	 	 	 	537,951,001	 	 	 	403,619,221	 
	Tests, Testing Equipment and Set-up of Operations	 	 	368,660,761	 	 	 	212,219,202	 	 	 	156,441,558	 
	Activities prior to the commencement of operations, systems implementation: for the attention of contingencies, quality assurance industrial security, environmental protection, etc., preparation and delivery of the finished works blueprints.	 	 	84,887,681	 	 	 	84,887,681	 	 	 	0	 
	Project Works Total	 	 	7,963,020,254	 	 	 	4,888,004,980	 	 	 	3,075,015,274	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	3.       Supervision of Items (1+2)	 	 	161,847,978	 	 	 	99,480,098	 	 	 	62,367,880	 
	4.        Other	 	 	 	 	 	 	 	 	 	 	 	 
	Other costs included	 	 	271,500,000	 	 	 	181,000,000	 	 	 	90,500,000	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	5.        Cost of the System	 	 	8,525,746,895	 	 	 	5,254,484,991	 	 	 	3,271,261,904	 

 

    	 	 	91

    
		 

 

    

 

The COST OF THE WORKS is comprised
by the following items and values:

 

	6.        Costs of the Works	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Administration Trust Fees	 	 	5,400,000	 	 	 	3,600,000	 	 	 	1,800,000	 
	Loan letter, Insurances and Bonds	 	 	50,000,000	 	 	 	30,000,000	 	 	 	20,000,000	 
	Financial Commissions	 	 	491,735,384	 	 	 	328,317,806	 	 	 	163,417,578	 
	Total	 	 	547,135,384	 	 	 	361,917,806	 	 	 	185,217,578	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	7.        Total Cost of the System	 	 	9,072,882,279	 	 	 	5,616,402,797	 	 	 	3,456,479,482	 

 

These resources shall come, in the first
stage of the PROJECT, from:

 

		1.	The RISK CAPITAL, equivalent to 20.58% of the TOTAL COST OF THE SYSTEM.

 

		2.	The FINANCIAL AGREEMENTS, equivalent to the 79.42% of the TOTAL COST OF THE SYSTEM.

 

		3.	These contributions shall be made according to the CALENDARED SCHEDULE.

 

These resources shall come, in the second
stage of the PROJECT, from:

 

		1.	The RISK CAPITAL, equivalent to 20.82% of the TOTAL COST OF THE SYSTEM.

 

		2.	The FINANCIAL AGREEMENTS, equivalent to the 79.18% of the TOTAL COST OF THE SYSTEM.

 

Notwithstanding that the DEVELOPER
does not consider within the amount of the TOTAL COST OF THE SYSTEM a specific category for the IVA, the amounts
for this contribution caused and which are related to this APP, shall be financed as long as it does not recover them.

 

    	 	 	92

    
		 

 

    

 

FORTY SEVENTH.- MAXIMUM LIMIT OF LIABILITY

 

Except for those specific limits established
in this APP, in any event the liability of the DEVELOPER in connection with this APP shall in no event exceed:

 

		(a)	During the INVESTMENT PERIOD and until the DATE OF COMMENCEMENT OF OPERATIONS, the
total amount of liability of the DEVELOPER shall be the total amount of the CONSTRUCTION GUARANTEE;

 

		(b)	As from the DATE OF COMMENCEMENT OF OPERATIONS and until the date of DELIVERY of
the SYSTEM regardless the cause therefor, the total amount of liability of the DEVELOPER shall be the total amount
of the OPERATION GUARANTEE;

 

FORTY EIGHTH.- OBLIGATIONS OF THE DEVELOPER.

 

Regardless of the other obligations assumed
by the DEVELOPER in the APP, the latter is obliged to:

 

		1.	Negotiate and obtain, as well as to maintain in full force and effect, each and every authorizations,
licenses, permits and analogous documents pursuant to the APPLICABLE LAWS required for the compliance of its obligations
pursuant to this APP expressly established in EXHIBIT 16 of this APP.

 

		2.	Obtain the construction materials, as well as the equipment and materials necessary for the operation,
conservation and maintenance of the SYSTEM, new and in compliance with the APPLICABLE LAWS and the quality standards
established in the handbooks and protocols drafted by the DEVELOPER and attached hereto as EXHIBITS.

 

		3.	Refrain from assigning, mortgaging, transferring or encumbering
in any way in favor of third parties, whether individuals or companies, the rights, assets and obligations arising from this APP
and its Exhibits, without the previous and express written approval of CEA, except as expressly provided in this APP.

 

		4.	Execute, as sole responsible before CEA, the WORKS OF THE PROJECT pursuant to this
APP and its Exhibits.

 

		5.	Subject itself to the safety provisions established in the workplace, in the terms requested in
the CALL or established in its PROPOSAL, as well as the APPLICABLE LAWS in construction, safety and use of
public roads matters in force at the date of the BASES OF THE PUBLIC BIDDING; any regulatory modifications on this regard,
shall be governed pursuant to CLAUSE FORTY THIRD of this APP.

 

    	 	 	93

    
		 

 

    

 

		6.	Answer for the damages and losses, direct and material, expressly excluding loss of profit and
indirect damages (that is, loss of profit and/or income that a party might have obtained if the other party had duly and fully
complied with its obligations, understanding as such, without limitation, the production, financial and hiring losses) or consequential
damages, as well as those that are covered by the insurances hired by the DEVELOPER, that are caused to CEA or to
third parties, as a result of the execution of the PROJECT WORKS or during the operation of the SYSTEM. The risks
of the works until the moment of their delivery to CEA shall be in charge of the DEVELOPER, who shall hire the insurances
mentioned in CLAUSE TWENTY SEVENTH of this APP for such purposes. The liability of the DEVELOPER under this
section may not exceed the amount of the hired insurances.

 

		7.	Repair or replace, at its expense, the equipment and facilities of the SYSTEM at the expiration
of their useful life throughout the term of the APP; to answer for hidden defects for the operation, maintenance and replacement
of its equipment, within the 12 (twelve) months following the date of termination of this APP and reception of the SYSTEM
by CEA, considering the ordinary wear and tear of the facilities and equipment. The liability mentioned in this section
shall be covered by the DEVELOPER through the granting of the APP TERMINATION GUARANTEE.

 

		8.	The DEVELOPER shall allow the personnel previously appointed in writing by CEA and
previously authorized by the DEVELOPER at its entire discretion, to have free access during all the OPERATION PERIOD
to the facilities of the SYSTEM, to carry out the inspection and control of the monitoring and improvements in the treatment
process, pursuant to the provisions of this APP.

 

		9.	Design, construct and hydraulically operate the components of the SYSTEM established in
sections II.2.1 and II.2.2 of Chapter II Technical Specifications referred to in APPENDIX 1: TERMS OF REFERENCE of the BASES
OF THE PUBLIC BIDDING for purposes of the development of the PROJECT.

 

FORTY NINTH.- LIABILITY FOR THE QUANTITY
AND QUALITY OF THE WATER.

 

The DEVELOPER shall be liable before
CEA for the continuous and efficient operation of the SYSTEM according to this APP, being its sole liability
to cover any damage or injury, expressly excluding loss of profit and indirect damages (that is, loss of profit and/or income that
a party might have obtained if the other party had duly and fully complied with its obligations, understanding as such, without
limitation, the production, financial and hiring losses) or consequential damages, as well as those that are covered by the insurances
hired by the DEVELOPER incurred by CEA, that is direct and immediate consequence of the inadequate or deficient operation
of the SYSTEM.

 

The DEVELOPER shall be exempted
from the liability referred to in the paragraph above, when the breach to the amount of water to be pumped, conducted or potabilized
is a consequence of:

 

		1.	A direct instruction of CEA.

		2.	The SYSTEM being in a conservation or maintenance period.

 

    	 	 	94

    
		 

 

    

 

		3.	Events arising from ACTS OF GOD, FORCE MAJEURE EVENTS or CHANGE IN LAW which
include, without limitation, the following:

		a.	Interruption of the electric energy supply

		b.	The material impossibility of pumping INTAKE WATER, arising from acts of third parties or
from the prohibition by any authority.

		c.	That the INTAKE WATER does not comply with the minimum quality and conditions established
in the PROPOSAL.

 

FIFTIETH.- CONFIDENTIALITY

 

Upon the conclusion of the term of the
APP, the DEVELOPER shall be obliged to transfer in favor of CEA the rights of use over the industrial property
implying the technology and equipment used in the pumping and conduction of water, subject-matter of this APP (with respect
to which the DEVELOPER has the right to do so), in the terms that allow CEA to operate the SYSTEM adequately
and exclusively.

 

The assets affected to the subject-matter
of this APP may not be used for purposes other than those set forth herein.

 

FIFTY FIRST.- OBLIGATIONS OF CEA.

 

Regardless of the other obligations assumed
by CEA in this APP, it is obliged to:

 

		1.	Support the DEVELOPER in the negotiation of the FINANCIAL AGREEMENTS, permits, licenses
and authorizations that the DEVELOPER is obliged to obtain for the execution of the PROJECT WORKS and services subject
matter of this APP.

 

		2.	Guarantee to the DEVELOPER throughout the term of this APP, the use of the real estate
for the construction, equipment and set-up of operations of the PROJECT.

 

		3.	Carry out the procedures to obtain, as well as to maintain in full force and effects, each and
every authorizations, licenses, permits and analogous that, pursuant to the APPLICABLE LAWS, are required to obtain the
INTAKE WATER.

 

		4.	Negotiate with the SPF the creation and registry of the MASTER GUARANTEE TRUST, as
well as the affectation of the rights corresponding to it.

 

		5.	Pay the CONSIDERATION.

 

		6.	Contribute to the ADMINISTRATION TRUST the collection rights and the resources corresponding
to such rights, arising from the WATER PURCHASE AND SALE AGREEMENT, to be destined to the payment of the CONSIDERATION,
in terms of this APP.

 

    	 	 	95

    
		 

 

    

 

		7.	Execute the WATER PURCHASE AND SALE AGREEMENT with CESPT, with the purpose of CEA
obtaining the necessary and sufficient resources to pay to the DEVELOPER the payment of the CONSIDERATION in this
APP.

 

		8.	Execute and cause the CURRENT ACCOUNT LOAN to come into effect, contributing to the
ADMINISTRATION TRUST the rights of disposition of such CURRENT ACCOUNT LOAN.

 

		9.	Entrust the trustee of the ADMINISTRATION TRUST the hiring of the SUPERVISION.

 

		10.	Register this APP and the obligations related thereto or arising therefrom, including without
limitation the CURRENT ACCOUNT LOAN, before the Sole Public Registry established in the Law of Financial Discipline of the
Federal Entities and Municipalities, in charge of the SHCP.

 

		11.	Have the sufficient capacity to receive the annual guaranteed volume of POTABLE WATER.

 

FIFTY SECOND.- HEADINGS.

 

The headings of the clauses have been established
with the sole purpose of facilitating their reading and comprehension; however, they do not prejudge on the content thereof or
cause any obligation to the PARTIES.

 

FIFTY THIRD.- UNCONDITIONAL ACCEPTANCE.

 

The execution of this APP, including
its formalization before notary public, implies the complete and unconditional acceptance of its terms by the PARTIES, who
are aware of all of their consequences and scope.

 

The PARTIES, being aware of the
content and scope of this APP and its Exhibits execute it in conformity, in duplicate, in the City of Mexicali, Baja California,
on the 22nd day of August of 2016.

 

	BY THE BAJA CALIFORNIA STATE WATER COMMISSION	 	
        BY THE DEVELOPER

        AGUAS DE ROSARITO, S.A.P.I. DE C.V.

	 	 	 
	 	 	 
	 	 	 
	
        MR. GERMÁN JESÚS LIZOLA
        MÁRQUEZ

        GENERAL DIRECTOR
	 	
        MR. MICHAEL AVANT SMITH

        CHAIRMAN OF THE BOARD OF DIRECTORS

	 	 	 
	 	 	 
	 	 	 

 

    	 	 	96

    
		 

 

    

 

	
         

        BY THE DEVELOPER

        AGUAS DE ROSARITO, S.A.P.I. DE C.V.

         

         

         
	 	
         

        BY THE DEVELOPER

        AGUAS DE ROSARITO, S.A.P.I.
        DE C.V.

	
        MR. FREDERICK W. MCTAGGART

        MEMBER OF THE BOARD OF DIRECTORS
	 	
        MR. LAUTARO MANUEL MILLAMAN-TERUEL

        ALTERNATE MEMBER OF THE BOARD OF 

DIRECTORS

  

	BY THE MINISTRY OF PLANNING AND FINANCE OF THE STATE	 	JOINT OBLIGOR TIJUANA STATE COMMISSION OF PUBLIC UTILITIES
	 	 	 
	 	 	 
	
         
	 	 
	
        MR. ANTONIO VALLADOLID RODRÍGUEZ

        SECRETARY OF PLANNING AND FINANCE OF
        THE STATE OF BAJA CALIFORNIA 
	 	
        MR. MIGUEL LEMUS ZENDEJAS

        GENERAL DIRECTOR,

	 	 	 
	
         

        WITNESS

        MINISTRY OF INFRASTRUCTURE AND URBAN
        DEVELOPMENT OF THE STATE

         

         

         
	 	 
	
        MR. MANUEL GUEVARA MORALES

        SECRETARY
	 	 

 

    	 	 	97

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 1

 

CALL 002 / 2015

 

    	 	 	98

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 2

 

AWARD

 

    	 	 	99

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 3

 

PUBLIC DEED OF THE COMPANY

 

“AGUAS DE ROSARITO, S.A.P.I. DE
C.V.”

 

    	 	 	100

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 4

 

COMMITMENT LETTER FROM THE PROPOSAL WITH
EXHIBITS

 

    	 	 	101

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 5

 

APPENDIX 1.- TERMS OF REFERENCE OF THE
BASSES OF THE PUBLIC BIDDING

 

    	 	 	102

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 6

 

QUALITY ASSURANCE HANDBOOK

 

    	 	 	103

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 7

 

PROTOCOL OF TESTS AND SET-UP OF OPERATIONS
OF THE SYSTEM

 

    	 	 	104

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 8

 

PROPOSED CALENDARED SCHEDULE

 

    	 	 	105

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 9

 

[Intentionally left blank]

 

    	 	 	106

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 10

 

[Intentionally left blank]

 

    	 	 	107

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 11

 

[Intentionally left blank]

 

    	 	 	108

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 12

 

[Intentionally left blank]

 

    	 	 	109

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 13

 

INITIAL TARIFFS AND ADJUSTMENT TO THE
AMOUNT OF THE CONSIDERATION

 

    	 	 	110

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 14

 

POTABLE WATER QUALITY

 

    	 	 	111

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 15

 

[Intentionally left blank]

 

    	 	 	112

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 16

 

ENVIRONMENTAL IMPACT STATEMENT AND OTHER
ENVIRONMENTAL PERMITS

 

    	 	 	113

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 17

 

PROCEDURE FOR THE DELIVERY OF THE SYSTEM

 

    	 	 	114

    
		 

 

    

 

PUBLIC BIDDING No.: SIDUE-CEA-APP-2015-002.

 

AGREEMENT No.: C-SIDUE-CEA-APP-2015-002

 

PUBLIC PRIVATE
PARTNERSHIP AGREEMENT for the

 

“CONSTRUCTION,
FINANCING AND OPERATION OF A SEAWATER DESALINATION PLANT IN THE MUNICIPALITY OF PLAYAS DE ROSARITO”.

 

EXHIBIT TO THE PUBLIC PRIVATE PARTNERSHIP
AGREEMENT No. C-SIDUE-CEA-APP-2015-002

 

No. 18

 

REGULATIONS FOR THE MEASUREMENT OF THE
QUALITY AND QUANTITY OF THE INTAKE WATER, POTABLE WATER AND WASTE WATER

 

This exhibit shall be included afterwards

 

    	 	 	115Exhibit 4.1

 

 

THE BANK OF NEW YORK MELLON

NEW YORK’S FIRST BANK-FOUNDED 1784 BY ALEXANDER HAMILTON

 

 

2 HANSON PLACE, 12TH FLOOR, BROOKLYN,
N.Y. 11217

 

 

 

October 25, 2017

 

Hennion & Walsh, Inc.

2001 Route 46, Waterview Plaza

Parsippany, New Jersey 07054

 

Smart Trust 347

 

Dear Sirs:

The Bank of New York
Mellon is acting as trustee for the series of Smart Trust set forth above (the “Trust”). We enclosed a list
of the Securities to be deposited in the Trust on the date hereof. The prices indicated therein reflect our evaluation of such
Securities as of close of business on October 24, 2017, in accordance with the valuation method set forth in the Standard Terms
and Conditions of Trust and Trust Agreement. We consent to the reference to The Bank of New York Mellon as the party performing
the evaluations of the Trust Securities in the Registration Statement (No. 333-219814) filed with the Securities and Exchange Commission
with respect to the registration of the sale of the Trust Units and to the filing of this consent as an exhibit thereto.

 

 

Very truly yours,

 

/s/ GERARDO CIPRIANO________________

Gerardo Cipriano

Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00275-of-00352.parquet"}]]