Document:

Exhibit 4.1

 

 

 

 

 

INDENTURE

 

Dated as of ____________, 20__

 

Between

 

SeqLL Inc.

as Issuer

 

And

 

[__________________________],

as Trustee

 

 

 

___________________

 

 

Debt Securities

 

____________________

 

 

 

 

 

 

     

     

    

 

	 	TABLE OF CONTENTS	 	 
	 	 	 	 
	 	 	 	Page
	ARTICLE I	DEFINITIONS AND INCORPORATION BY REFERENCE	 	1
	 	SECTION 1.01. Definitions	 	1
	 	SECTION 1.02. Other Definitions	 	3
	 	SECTION 1.03 Incorporation by Reference of Trust Indenture Act	 	3
	 	SECTION 1.04 Rules of Construction	 	4
	ARTICLE II	THE SECURITIES	 	4
	 	SECTION 2.01 Unlimited in Amount, Issuable in Series, Form and Dating	 	4
	 	SECTION 2.02 Execution and Authentication	 	6
	 	SECTION 2.03 Registrar and Paying Agent	 	7
	 	SECTION 2.04 Paying Agent to Hold Assets in Trust	 	7
	 	SECTION 2.05 Holder Lists	 	8
	 	SECTION 2.06 Registration of Transfer and Exchange	 	8
	 	SECTION 2.07 Replacement Securities	 	8
	 	SECTION 2.08 Outstanding Securities	 	8
	 	SECTION 2.09 Treasury Securities	 	9
	 	SECTION 2.10 Temporary Securities	 	9
	 	SECTION 2.11 Cancellation	 	9
	 	SECTION 2.12 CUSIP Numbers	 	9
	 	SECTION 2.13 Defaulted Interest	 	9
	 	SECTION 2.14 Special Record Dates	 	9
	ARTICLE III 	REDEMPTION	 	10
	 	SECTION 3.01 Notices to Trustee	 	10
	 	SECTION 3.02 Selection of Securities to Be Redeemed	 	10
	 	SECTION 3.03 Notice of Redemption	 	10
	 	SECTION 3.04 Effect of Notice of Redemption	 	10
	 	SECTION 3.05 Deposit of Redemption Price	 	10
	 	SECTION 3.06 Securities Redeemed in Part	 	11
	ARTICLE IV 	COVENANTS	 	11
	 	SECTION 4.01 Payment of Securities	 	11
	 	SECTION 4.02 Maintenance of Office or Agency	 	11
	 	SECTION 4.03 SEC Reports	 	11
	 	SECTION 4.04 Compliance Certificate	 	11
	 	SECTION 4.05 Taxes	 	12
	 	SECTION 4.06 Corporate Existence	 	12
	ARTICLE V	MERGER, ETC.	 	12
	 	SECTION 5.01 When Company May Merge, etc.	 	12
	 	SECTION 5.02 Successor Corporation Substituted	 	12

 

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	ARTICLE VI 	DEFAULTS AND REMEDIES	 	13
	 	SECTION 6.01 Events of Default	 	13
	 	SECTION 6.02 Acceleration	 	13
	 	SECTION 6.03 Other Remedies	 	13
	 	SECTION 6.04 Wavier of Past Defaults	 	14
	 	SECTION 6.05 Control by Majority	 	14
	 	SECTION 6.06 Limitation on Suits	 	14
	 	SECTION 6.07 Rights of Holders to Receive Payment	 	14
	 	SECTION 6.08 Collection Suit by Trustee	 	14
	 	SECTION 6.09 Trustee May File Proofs of Claim	 	14
	 	SECTION 6.10 Priorities	 	15
	 	SECTION 6.11. Undertaking for Costs	 	15
	ARTICLE VII 	TRUSTEE	 	15
	 	SECTION 7.01. Duties of Trustee	 	15
	 	SECTION 7.03. Individual Rights of Trustee	 	17
	 	SECTION 7.04. Trustee’s Disclaimer	 	17
	 	SECTION 7.05. Notice of Defaults	 	17
	 	SECTION 7.06. Reports by Trustee to Holders	 	17
	 	SECTION 7.07. Compensation and Indemnity	 	17
	 	SECTION 7.08. Replacement of Trustee	 	18
	 	SECTION 7.09. Successor Trustee by Merger, Etc.	 	19
	 	SECTION 7.10. Eligibility; Disqualification	 	19
	 	SECTION 7.11. Preferential Collection of Claims Against the Company	 	19
	ARTICLE VIII 	DISCHARGE OF INDENTURE	 	19
	 	SECTION 8.01. Satisfaction and Discharge of Indenture	 	19
	 	SECTION 8.02. Application of Trust Funds; Indemnification	 	20
	 	SECTION 8.03. Legal Defeasance of Securities of any Series	 	20
	 	SECTION 8.04. Covenant Defeasance	 	21
	 	SECTION 8.05. Repayment to Company	 	22
	ARTICLE IX 	AMENDMENTS, SUPPLEMENTS AND WAIVERS	 	22
	 	SECTION 9.01. Without Consent of Holders	 	22
	 	SECTION 9.02. With Consent of Holders	 	22
	 	SECTION 9.03. Compliance with Trust Indenture Act	 	23
	 	SECTION 9.04. Revocation and Effect of Consents	 	23
	 	SECTION 9.05. Notation on or Exchange of Securities	 	23
	 	SECTION 9.06. Trustee to Sign Amendment, etc.	 	23
	ARTICLE X 	MISCELLANEOUS	 	24
	 	SECTION 10.01. Trust Indenture Act Controls	 	24
	 	SECTION 10.02. Notices	 	24
	 	SECTION 10.03. Communication by Holders with Other Holders	 	24
	 	SECTION 10.04. Certificate and Opinion as to Conditions Precedent	 	25
	 	SECTION 10.05. Statements Required in Certificate or Opinion	 	25
	 	SECTION 10.06. Rules by Trustee and Agents	 	25
	 	SECTION 10.07. Legal Holidays	 	25
	 	SECTION 10.08. Duplicate Originals	 	25
	 	SECTION 10.09. Governing Law	 	25
	 	SECTION 10.10. No Adverse Interpretation of Other Agreements	 	25
	 	SECTION 10.11. Successors	 	25
	 	SECTION 10.12. Severability	 	25
	 	SECTION 10.13. Counterpart Originals	 	25

 

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		CROSS-REFERENCE TABLE	 
	 	 	Indenture
	TIA Section	 	Section
	 	 	 
	Section 310 	(a)(1) 	7.10
	 	(a)(2)	7.10
	 	(a)(3)	N.A.
	 	(a)(4)	N.A.
	 	(a)(5)	7.10
	 	(b)	7.08; 7.10
	 	(c)	N.A.
	Section 311 	(a)	7.11
	 	(b)	7.11
	 	(c)	N.A.
	Section 312	(a)	2.05
	 	(b)(1)	N.A.
	 	(b)(2)	7.06
	 	(c)	7.06; 12.02
	 	(d)	7.06
	Section 314 (a)(1), (2), (3) 	4.03
	 	(a)(4)	4.04
	 	(b)	N.A.
	 	(c)(1)	10.04
	 	(c)(2)	10.04
	 	(c)(3)	N.A.
	 	(d)	N.A.
	 	(e)	10.05
	 	(f)	N.A.
	Section 315 (a) 	7.01(b)
	 	(b)	7.05; 10.02
	 	(c)	7.01(a)
	 	(d)	7.01(c)
	 	(e)	6.11
	Section 316(a) (last sentence) 	2.09
	 	(a)(1)(A)	6.05
	 	(a)(1)(B)	6.04
	 	(a)(2)	N.A.
	 	(b)	6.07
	 	(c)	9.04
	Section 317	(a)(1)	6.08
	 	(a)(2)	6.09
	 	(b)	2.04
	Section 318 (a) 	10.01

 

N.A. means Not Applicable

 

NOTE: This Cross-Reference Table shall not, for
any purpose, be deemed to be a part of the indenture.

 

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INDENTURE dated as of __________, 20___, between
SeqLL Inc., a Delaware corporation (the “Company”), as issuer, and [_______________], a [__________] banking corporation,
as Trustee (the “Trustee”).

 

The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of its debentures, notes or other evidences of indebtedness to
be issued in one or more series (the “Securities”), as herein provided, up to such principal amount as may from time
to time be authorized in or pursuant to one or more resolutions of the Board of Directors or by supplemental indenture.

 

Each party agrees as follows for the benefit of
the other party and for the equal and ratable benefit of the Holders of each series of the Securities:

 

ARTICLE I

 

A. DEFINITIONS AND INCORPORATION BY REFERENCE

 

SECTION 1.01. Definitions.

 

“Affiliate” means, when used with
reference to the Company or another person, any person directly or indirectly controlling, controlled by, or under direct or indirect
common control with, the Company or such other person, as the case may be. For the purposes of this definition, “control”
when used with respect to any specified person means the power to direct or cause the direction of management or policies of such person,
directly or indirectly, whether through the ownership of voting Securities, by contract or otherwise; and the terms “Controlling”
and “controlled” have meanings correlative of the foregoing.

 

“Agent” means any registrar, Paying
Agent, authenticating agent or co-registrar.

 

“Board of Directors” means, with
respect to any person, the Board of Directors of a person or any duly authorized committee of such Board of Directors.

 

“Board Resolution” means, with
respect to any person, a copy of a resolution certified by the secretary or an assistant secretary of such person to have been duly adopted
by the Board of Directors of such person or any duly authorized committee thereof and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

 

“Business Day” means a day that
is not a Legal Holiday as defined in Section 10.07.

 

“Company” means the party named
as such in this Indenture, or any other obligor under this Indenture, until a successor replaces it pursuant to this Indenture and thereafter
means the successor.

 

“Consolidated” or “consolidated”
means, when used with reference to any amount, such amount determined on a consolidated basis in accordance with GAAP, after the elimination
of intercompany items.

 

“Consolidated Assets” means, at
a particular date, all amounts which would be included under total assets on a consolidated balance sheet of the Company and its Subsidiaries
as at such date, determined in accordance with GAAP.

 

“Corporate Trust Office” means
the office of the Trustee at which at any particular time its corporate services business shall be principally administered, which office
at the date of execution of this Indenture is located at [__________________].

 

“Default” means any event which
is, or after notice or lapse of time or both would be, an Event of Default.

 

“Event of Default” has the meaning
provided in Section 6.01.

 

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“Exchange Act” means the Securities
Exchange Act of 1934, as amended any successor Statute.

 

“GAAP” means generally accepted
accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other
entity as have been approved by a significant segment of the accounting profession, which are applicable from time to time.

 

“Global Security” means a Security
issued to evidence all or a part of any series of Securities that is executed by the Company and authenticated and delivered by the Trustee
to a depositary or pursuant to such depositary’s instructions, all in accordance with this Indenture and pursuant to Section
2.01, which shall be registered as to principal and interest in the name of such depositary or its nominee.

 

“Holder” means the person in whose
name a Security is registered on the registrar’s books.

 

“Indebtedness” of a Person means
all obligations which would be treated as liabilities upon a balance sheet of such Person prepared on a consolidated basis in accordance
with GAAP.

 

“Indenture” means this Indenture,
as amended, supplemented or modified from time to time, and shall include the terms of a particular series of Securities established as
contemplated by Section 2.01.

 

“Lien” means any lien, security
interest, charge or encumbrance of any kind.

 

“Obligations” means all obligations
for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation
governing any Indebtedness.

 

“Officer” of any person means
the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer, the Secretary or the Controller
of such person.

 

“Officers’ Certificate”
means a certificate signed by two Officers or by an Officer and an Assistant Treasurer, Assistant Secretary or Assistant Controller of
any person.

 

“Opinion of Counsel” means a written
opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company.

 

“Original Issue Discount Security”
means any Security which provides that an amount less than its principal amount is due and payable upon acceleration after an Event of
Default.

 

“Person” or “person”
means any individual, corporation, partnership, joint venture, trust, association, limited liability company, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision thereof.

 

“Redemption Date” means, with
respect to any Security to be redeemed, the date fixed for such redemption pursuant to this Indenture.

 

“Redemption Price” has the meaning
provided in Section 3.03.

 

“SEC” means the Securities and
Exchange Commission and any government agency succeeding to its functions.

 

“Securities” means the means the
securities authenticated and delivered under this Indenture.

 

“Securities Act” means the Securities
Act of 1933, as amended.

 

“Series”
means a series of Securities established pursuant to this Indenture.

 

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“Subsidiary” of any Person means
(i) a corporation a majority of whose capital stock with voting power, under ordinary circumstances, to elect directors is at the time,
directly or indirectly, owned by such Person or by such Person and a subsidiary or subsidiaries of such Person or by a subsidiary or subsidiaries
of such Person or (ii) any other Person (other than a corporation) in which such Person or such Person and a subsidiary or subsidiaries
of such Person or a subsidiary or subsidiaries of such Persons, at the time, directly or indirectly, own at least a majority voting interest
under ordinary circumstances.

 

“TIA” means the Trust Indenture
Act of 1939 (15 U.S. Code Section 77aaa-77bbbb), as in effect on the date of this Indenture; provided, however, that in
the event the TIA is amended after such date, “TIA” means, to the extent required by such amendment, the Trust Indenture
Act of 1939, as so amended.

 

“Trustee” means the party named
as such above until a successor becomes such pursuant to this Indenture and thereafter means or includes each party who is then a trustee
hereunder, and if at any time there is more than one such party, “Trustee” as used with respect to the Securities of
any series means the Trustee with respect to Securities of that series. If Trustees with respect to different series of Securities are
Trustees under this Indenture, nothing herein shall constitute the Trustees co-Trustees of the same trust, and each Trustee shall be the
Trustee of a trust separate and apart from any trust administered by any other Trustee with respect to a different series of Securities.

 

“Trust Officer” means any officer
in the corporate trust department of the Trustee or any other officer of the Trustee assigned by the Trustee to administer this Indenture.

 

“U.S. Government Obligations”
means (i) direct obligations of the United States of America for the payment of which the full faith and credit of the United States of
America is pledged or (ii) obligations of a person controlled or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America
and which in either case, are non-callable at the option of the issuer thereof.

 

SECTION 1.02. Other Definitions.

 

	Term	 	Defined in

 Section	 
	 	 	 	 
	“Bankruptcy Law”	 	 	6.01	 
	“Custodian”	 	 	6.01	 
	“Legal Holiday” 	 	 	10.07	 
	“Paying Agent”	 	 	2.03	 
	“Registrar”	 	 	2.03	 

 

SECTION 1.03. Incorporation by Reference of
Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and
made a part of this Indenture.

 

The following TIA terms used in this Indenture have
the following meanings:

 

“indenture Securities” means the
Securities;

 

“indenture Security holder” means
a Holder;

 

“indenture to be qualified” means
this Indenture;

 

“indenture Trustee” or “institutional
Trustee” means the Trustee; and

 

“obligor” on the Securities means
the Company and any other obligor on the indenture Securities.

 

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All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions.

 

SECTION 1.04. Rules of Construction.
Unless the context otherwise requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with GAAP; (iii) “or” is not exclusive; (iv) words in the singular include the plural,
and in the plural include the singular; (v) provisions apply to successive events and transactions; and (vi) statements relating to the
payment of principal and interest shall include the payment, premium (if any) and interest.

 

ARTICLE II

 

THE SECURITIES

 

SECTION 2.01. Unlimited in Amount, Issuable
in Series, Form and Dating.

 

The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall
be established pursuant to a Board Resolution or an Officers’ Certificate pursuant to authority granted under a Board Resolution
or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series:

 

(a) The title, ranking and authorized denominations
of such Securities;

 

(b) The aggregate principal amount of such Securities
and any limit on such aggregate principal amount;

 

(c) The price (expressed as a percentage of the principal
amount thereof) at which such Securities will be issued and, if other than the principal amount thereof, the portion of the principal
amount thereof payable upon declaration of acceleration of the maturity thereof;

 

(d) The date or dates, or the method for determining
such date or dates, on which the principal of such Securities will be payable;

 

(e) The rate or rates (which may be fixed or variable),
or the method by which such rate or rates shall be determined, at which such Securities will bear interest, if any;

 

(f) The date or dates, or the method for determining
such date or dates, from which any such interest will accrue, the dates on which any such interest will be payable, the record dates for
such interest payment dates, or the method by which such dates shall be determined, the persons to whom such interest shall be payable,
and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months;

 

(g) The place or places where the principal of and
interest, if any, on such Securities will be payable, where such Securities may be surrendered for registration of transfer or exchange
and where notices or demands to or upon the Company in respect of such Securities and this Indenture may be served;

 

(h) The period or periods, if any, within which,
the price or prices at which and the other terms and conditions upon which such Securities may, pursuant to any optional or mandatory
redemption provisions, be redeemed, as a whole or in part, at the option of the Company;

 

(i) The obligation, if any, of the Company to redeem,
repay or purchase such Securities pursuant to any sinking fund or analogous provision or at the option of a holder thereof, and the period
or periods within which, the price or prices at which and the other terms and conditions upon which such Securities will be redeemed,
repaid or purchased, as a whole or in part, pursuant to such obligation;

 

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(j) If other than U.S. dollars, the currency or currencies
in which such Securities are denominated and payable, which may be a foreign currency or units of two or more foreign currencies or a
composite currency or currencies, and the terms and conditions relating thereto;

 

(k) Whether the amount of payments of principal of
(and premium, if any) or interest, if any, on such Securities may be determined with reference to an index, formula or other method (which
index, formula or method may, but need not be, based on the yield on or trading price of other Securities, including United States Treasury
Securities, or on a currency, currencies, currency unit or units, or composite currency or currencies) and the manner in which such amounts
shall be determined;

 

(l) Whether the principal of or interest on the Securities
of the series is to be payable, at the election of the Company or a holder thereof, in a currency or currencies, currency unit or units
or composite currency or currencies other than that in which such Securities are denominated or stated to be payable, the period or periods
within which, and the terms and conditions upon which, such election may be made, and the time and manner of, and identity of the exchange
rate agent with responsibility for, determining the exchange rate between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to be payable and the currency or currencies, currency unit
or units or composite currency or currencies in which such Securities are to be so payable;

 

(m) Provisions, if any, granting special rights to
the holders of Securities of the series upon the occurrence of such events as may be specified;

 

(n) Any deletions from, modifications of or additions
to the Events of Default or covenants of the Company with respect to Securities of the series, whether or not such Events of Default or
covenants are consistent with the Events of Default or covenants described herein;

 

(o) Whether and under what circumstances the Company
will pay any additional amounts on such Securities in respect of any tax, assessment or governmental charge and, if so, whether the Company
will have the option to redeem such Securities in lieu of making such payment;

 

(p) Whether Securities of the series are to be issuable
as registered Securities, bearer Securities (with or without coupons) or both, any restrictions applicable to the offer, sale or delivery
of bearer Securities and the terms upon which bearer Securities of the series may be exchanged for registered Securities of the series
and vice versa (if permitted by applicable laws and regulations), whether any Securities of the series are to be issuable initially in
temporary global form and whether any Securities of the series are to be issuable in permanent global form with or without coupons and,
if so, whether beneficial owners of interests in any such permanent Global Security may exchange such interests for Securities of such
series and of like tenor or any authorized form and denomination and the circumstances under which any such exchanges may occur, if other
than in the manner provided in this Indenture, and, if registered Securities of the series are to be issuable as a Global Security, the
identity of the depositary for such series;

 

(q) The date as of which any bearer Securities of
the series and any temporary Global Security representing outstanding Securities of the series shall be dated if other than the date of
original issuance of the first Security of the series to be issued;

 

(r) The person to whom any interest on any registered
Security of the series shall be payable, if other than the person in whose name that Security (or one or more predecessor Securities)
is registered at the close of business on the regular record date for such interest, the manner in which, or the person to whom, any interest
on any bearer Security of the series shall be payable, if otherwise than upon presentation and surrender of the coupons appertaining thereto
as they severally mature, and the extent to which, or the manner in which, any interest payable on a temporary Global Security on an interest
payment date will be paid if other than in the manner provided in this Indenture;

 

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(s) Whether such Securities will be issued in certificated
or book entry form;

 

(t) The applicability, if any, of the legal defeasance
and covenant defeasance provisions of this Indenture to the Securities of the series;

 

(u) If the Securities of such series are to be issuable
in definitive form (whether upon original issue or upon exchange of a temporary Security of such series) only upon receipt of certain
certificates or other documents or satisfaction of other conditions, then the form and/or terms of such certificates, documents or conditions;

 

(v) Whether the Securities will be listed for trading
on an exchange and the identity of such exchange;

 

(w) Whether any underwriters will act as market makers
for the Securities;

 

(x) Any guarantees of such Securities by the Company’s
Subsidiaries or others;

 

(y) The date or dates, if any, after which the Securities
may be converted or exchanged into or for shares of the Company’s common stock or another company’s securities or properties
or cash and the terms for any such conversion or exchange;

 

(z) Any other terms of the series.

 

The Securities of any series shall be substantially
of the tenor and purport as set forth in one or more indentures supplemental hereto or as provided in a written order of the Company,
in each case with such insertions, omission, substitutions and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved
thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which
Securities of that series may be listed or of the depository, or to conform to usage.

 

The Trustee’s Certificate of Authentication
shall be in substantially the following form:

 

“This is one of the Securities
of the series designated in accordance with, and referred to in the within-mentioned Indenture.

 

	 	Dated:	 
	 	 	 
	 	[____________________], as Trustee	 
	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory”	 

 

SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Security no
longer holds that office at the time the Security is authenticated, the Security shall be valid nevertheless.

 

A Security shall not be valid until authenticated
by the manual signature of the Trustee. The signature shall be conclusive evidence that the Security has been authenticated under this
Indenture.

 

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The Trustee shall authenticate Securities for original
issue upon a written order of the Company signed by one Officer of the Company.

 

The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate Securities. Unless limited by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company.

 

If the Company shall establish pursuant to Section
2.01 that the Securities of a series are to be issued in the form of one or more Global Securities, then the Company shall execute
and the Trustee shall authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount
equal to the aggregate principal amount of all of the Securities of such series to be issued in the form of Global Securities and not
yet canceled, (ii) shall be registered in the name of the depositary for such Global Security or Securities or the nominee of such depositary,
(iii) shall be delivered by the Trustee to such depositary or pursuant to such depositary’s instructions, and (iv) shall bear a
legend substantially to the following effect: “Unless and until it is exchanged in whole or in part for Securities in definitive
registered form, this Security may not be transferred except as a whole by the depositary to the nominee of the depositary or by a nominee
of the depositary to the depositary or another nominee of the depositary or by the depositary or any such nominee to a successor depositary
or a nominee of such successor depositary.”

 

Each depositary designated pursuant to Section
2.01 must, at the time of its designation and at all times while it services as depositary, be a clearing agency registered under
the Exchange Act.

 

SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities of a particular series may be presented for registration of transfer or
for exchange (the “Registrar”) and an office or agency where Securities may be presented for payment (the “Paying
Agent”). The registrar for a particular series of Securities shall keep a register of the Securities of that series and of their
transfer and exchange. The Company may appoint one or more co-registrars and one or more additional Paying Agents for each series of Securities.
The term “Paying Agent” includes any additional paying agent and the term “Registrar” includes any additional
registrar. The Company may change any Paying Agent or registrar without prior notice to any Holder.

 

The Company shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which shall incorporate the terms of the TIA and implement the terms of this Indenture
which relate to such Agent. The Company shall give prompt written notice to the Trustee of the name and address of any Agent who is not
a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall
act as such. The Company or any Affiliate of the Company may act as Paying Agent or Registrar.

 

The Company hereby initially appoints the Trustee
as Registrar and Paying Agent for each series of Securities unless another Registrar or Paying Agent, as the case may be, is appointed
prior to the time the Securities of that series are first issued.

 

SECTION 2.04. Paying Agent to Hold Assets in
Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold
in trust for the benefit of Holders or the Trustee all assets held by the Paying Agent for the payment of principal of and interest on
the Securities (whether such money has been paid to it by the Company or any other obligor on the Securities) and shall notify the Trustee
of any failure by the Company (or any other obligor on the Securities) in making any such payment. While any such failure continues, the
Trustee may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. The Company at any
time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other
than the Company or a Subsidiary of the Company) shall have no further liability for the money so paid over to the Trustee. If the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent.

 

    7

     

    

 

SECTION 2.05. Holder Lists. The Trustee
shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders,
separately by series, and shall otherwise comply with TIA Section 312(a). If the Trustee is not the registrar, the Company shall furnish
to the Trustee on or before each interest payment date for the Securities and at such other times as the Trustee may request in writing
a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders, separately by series,
relating to such interest payment date or request, as the case may be.

 

SECTION 2.06. Registration of Transfer and
Exchange. When Securities of a series are presented to the registrar or a co-registrar with a request to register their transfer
or to exchange them for an equal principal amount of Securities of other denominations, the registrar or co-registrar shall register the
transfer or make the exchange if its requirements for such transaction are met. To permit registrations of transfer and exchanges, the
Company shall issue and the Trustee shall authenticate Securities at the registrar’s or co-registrar’s request. No service
charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with registration, transfer or exchange of Securities other than exchanges
pursuant to Section 2.10, 3.06 or 9.05 not involving any transfer.

 

The registrar or co-registrar shall not be required
to register the transfer or exchange of (i) any Security of a particular series selected for redemption in whole or in part, except the
unredeemed portion of any Security of that series being redeemed in part, or (ii) any Security of a particular series during a period
beginning at the opening of business 15 days before the day of any selection of Securities of that series for redemption under Section
3.02 and ending at the close of business on the date of selection.

 

Any Holder of a beneficial interest in a Global Security
shall, by acceptance of such beneficial interest, agree that transfers of beneficial interest in such Global Security may be effected
only through a book entry system maintained by the holder of such Global Security (or its agent), and that ownership of a beneficial interest
in the Security shall be required to be reflected in a book entry system.

 

SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder of a Security claims that the Security has been lost, destroyed
or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Security of the same series if the requirements
of the Trustee and the Company are met; provided that, if any such Security has been called for redemption in accordance with the
terms thereof, the Trustee may pay the Redemption Price thereof on the Redemption Date without authenticating or replacing such Security.
The Trustee or the Company may, in either case, require the Holder to provide an indemnity bond sufficient in the judgment of each of
the Trustee and the Company to protect the Company, the Trustee or any Agent from any loss which any of them may suffer if a Security
is replaced or if the Redemption Price therefor is paid pursuant to this Section. The Company may charge the Holder who has lost a Security
for its expenses in replacing a Security.

 

Every replacement Security is an obligation of the
Company and shall be entitled to the benefits of this Indenture equally and proportionately with any and all other Securities of the same
series.

 

SECTION 2.08. Outstanding Securities.
The Securities of any series outstanding at any time are all the Securities of that series authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.

 

If a Security is replaced pursuant to Section
2.07, it ceases to be outstanding and interest ceases to accrue unless the Trustee receives proof satisfactory to it that the replaced
Security is held by a bona fide purchaser.

 

If all principal of and interest on any of the Securities
are considered paid under Section 4.01, such Securities shall cease to be outstanding and interest on them shall cease to accrue.

 

Except as provided in Section 2.09, a Security
does not cease to be outstanding because the Company or an Affiliate of the Company holds such Security.

 

For each series of Original Issue Discount Securities,
the principal amount of such Securities that shall be deemed to be outstanding and used to determine whether the necessary Holders have
given any request, demand, authorization, direction, notice, consent or waiver, shall be the principal amount of such Securities that
could be declared to be due and payable upon acceleration upon an Event of Default as of the date of such determination. When requested
by the Trustee, the Company will advise the Trustee of such amount, showing its computations in reasonable detail.

 

    8

     

    

 

SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of Securities of any series have concurred in any direction, waiver
or consent, Securities owned by the Company or an Affiliate of the Company shall be considered as though they are not outstanding, except
that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only
Securities which such Trustee actually knows are so owned shall be so disregarded.

 

SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may prepare and execute and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities but may have variations that the Company considers appropriate
for temporary Securities. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Securities
in exchange for temporary Securities. Holders of temporary Securities shall be entitled to all of the benefits of this Indenture.

 

SECTION 2.11. Cancellation. The
Company at any time may deliver Securities to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange, payment or repurchase. The Trustee shall cancel all Securities
surrendered for registration of transfer, exchange, payment, repurchase, redemption, replacement or cancellation and shall destroy such
Securities (subject to the record retention requirements of the Exchange Act). Certification of the destruction of all cancelled Securities
shall be promptly delivered to the Company. The Company may not issue new Securities to replace Securities that it has paid or that have
been delivered to the Trustee for cancellation.

 

SECTION 2.12. CUSIP Numbers. The Company
in issuing the Securities may use “CUSIP” numbers (if then generally in use), and the Trustee shall use CUSIP numbers in notices
of redemption or exchange as a convenience to Holders; provided that any such notice shall state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as contained in any such notice and that reliance may be
placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company shall promptly notify the Trustee of any change in the CUSIP numbers.

 

SECTION 2.13. Defaulted Interest. If
the Company fails to make a payment of interest on any series of Securities, it shall pay such defaulted interest plus (to the extent
lawful) any interest payable on the defaulted interest, in any lawful manner. It may elect to pay such defaulted interest, plus any such
interest payable on it, to the Persons who are Holders of such Securities on which the interest is due on a subsequent special record
date. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each such Security. The
Company shall fix any such record date and payment date for such payment. At least 15 days before any such record date, the Company shall
mail to Holders affected thereby a notice that states the record date, payment date, and amount of such interest to be paid.

 

SECTION 2.14. Special Record Dates.
The Company may, but shall not be obligated to, set a record date for the purpose of determining the identity of Holders entitled to consent
to any supplement, amendment or waiver permitted by this Indenture. If a record date is fixed, the Holders of Securities of that series
outstanding on such record date, and no other Holders, shall be entitled to consent to such supplement, amendment or waiver or revoke
any consent previously given, whether or not such Holders remain Holders after such record date. No consent shall be valid or effective
for more than 90 days after such record date unless consents from Holders of the principal amount of Securities of that series required
hereunder for such amendment or waiver to be effective shall have also been given and not revoked within such 90-day period.

 

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ARTICLE III

 

REDEMPTION

 

SECTION 3.01. Notices to Trustee. If
the Company elects to redeem Securities of any series pursuant to any optional redemption provisions thereof, it shall notify the Trustee
of the intended Redemption Date and the principal amount of Securities of that series to be redeemed.

 

The Company shall give each notice provided for in
this Section and an Officers’ Certificate at least 45 days before the Redemption Date (unless a shorter period shall be satisfactory
to the Trustee).

 

SECTION 3.02. Selection of Securities to Be
Redeemed. If fewer than all the Securities of any series are to be redeemed, the Trustee shall select the Securities of that series
to be redeemed from the outstanding Securities of that series to be redeemed by a method that complies with the requirements of any exchange
on which the Securities of that series are listed, or, if the Securities of that series are not listed on an exchange, on a pro rata basis
or by lot, which in any case shall be in accordance with a method the Trustee considers fair and appropriate.

 

Except as otherwise provided as to any particular
series of Securities, Securities and portions thereof that the Trustee selects shall be in amounts equal to the minimum authorized denomination
for Securities of the series to be redeemed or any integral multiple thereof. Provisions of this Indenture that apply to Securities called
for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly in writing of
the Securities or portions of Securities to be called for redemption.

 

SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before the Redemption Date, the Company shall mail a notice of redemption by first-class mail
to each Holder whose Securities are to be redeemed at the address of such Holder appearing in the register.

 

The notice shall identify the Securities of the series
to be redeemed and shall state:

 

(1) the Redemption Date;

 

(2) the redemption price fixed in accordance
with the terms of the Securities of the series to be redeemed, plus accrued interest, if any, to the date fixed for redemption (the “Redemption
Price”);

 

(3) if any Security is being redeemed
in part, the portion of the principal amount of such Security to be redeemed and that, after the Redemption Date, upon surrender of such
Security, a new Security or Securities in principal amount equal to the unredeemed portion will be issued;

 

(4) the name and address of the Paying
Agent;

 

(5) that Securities called for redemption
must be surrendered to the Paying Agent to collect the Redemption Price;

 

(6) that, unless the Company defaults
in payment of the Redemption Price, interest on Securities called for redemption ceases to accrue on and after the Redemption Date; and

 

(7) the CUSIP number, if any, of the
Securities to be redeemed.

 

At the Company’s written request, the Trustee
shall give the notice of redemption in the Company’s name and at its expense. The notice mailed in the manner herein provided shall
be conclusively presumed to have been duly given whether or not the Holder receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the Holder of any Security shall not affect the validity of the proceeding for the redemption of
any other Security.

 

SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called for redemption become due and payable on the Redemption Date at the Redemption
Price. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price.

 

SECTION 3.05. Deposit of Redemption Price.
On or before the Redemption Date, the Company shall deposit with the Trustee or with the Paying Agent (or if the Company or any Subsidiary
of the Company is acting as its own Paying Agent, the Company or such Subsidiary shall segregate and hold in trust) money sufficient to
pay the Redemption Price on all Securities to be redeemed on that date other than Securities or portions thereof called for redemption
on that date which have been delivered by the Company to the Trustee for cancellation. The Paying Agent shall promptly return to the Company
any money not required for that purpose.

 

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SECTION 3.06. Securities
Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Company shall issue and the Trustee shall authenticate
for the Holder at the expense of the Company, a new Security of the same series equal in principal amount to the unredeemed portion of
the Security surrendered.

 

 

ARTICLE IV

 

COVENANTS

 

SECTION 4.01. Payment of Securities.
The Company shall pay or cause to be paid the principal of and interest on the Securities on the dates and in the manner provided in this
Indenture and the Securities. Principal and interest shall be considered paid on the date due if the Paying Agent, if other than the Company
or an Affiliate, holds as of 11:00 a.m., New York time, on that date immediately available funds designated for and sufficient to pay
all principal and interest then due. To the extent lawful, the Company shall pay interest on overdue principal and overdue installments
of interest at the rate per annum borne by the applicable series of Securities.

 

SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, the City of New York, or in [_______________], an office or agency (which
may be an office of the Trustee or an affiliate of the Trustee or registrar) where Securities may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect of the Securities and this Indenture may be served. The Company
shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

 

The Company may also from time to time designate
one or more other offices or agencies where the Securities may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve
the Company of its obligation to maintain an office or agency in the Borough of [___________], the City of [___________], or [___________],
for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.

 

The Company hereby designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.

 

SECTION 4.03. SEC Reports. The Company
shall deliver to the Trustee within 15 days after it files them with the SEC copies of the annual reports and of the information, documents,
and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Company
is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act; provided, however, the Company shall not be required
to deliver to the Trustee any materials for which the Company has sought and received confidential treatment by the SEC. The Company also
shall comply with the other provisions of TIA Section 314 (a).

 

SECTION 4.04. Compliance Certificate.
The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company, an Officers’ Certificate
stating that in the course of the performance by the signers of their duties as officers of the Company, they would normally have knowledge
of any failure by the Company to comply with all conditions, or default by the Company with respect to any covenants, under this Indenture,
and further stating whether or not they have knowledge of any such failure or default and, if so, specifying each such failure or default
and the nature thereof. For purposes of this Section, such compliance shall be determined without regard to any period of grace or requirement
of notice provided for in this Indenture. The certificate need not comply with Section 10.04.

 

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SECTION 4.05. Taxes. The Company shall
pay prior to delinquency, all material taxes, assessments, and governmental levies except as contested in good faith by appropriate proceedings.

 

SECTION 4.06. Corporate Existence.
Subject to Article V hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and
effect (i) its corporate existence and (ii) the material rights (charter and statutory), licenses and franchises of the Company and its
Subsidiaries taken as a whole; provided, however, that the Company shall not be required to preserve any such right, license
or franchise if the Board of Directors or management of the Company shall determine that the preservation thereof is no longer in the
best interests of the Company, and that the loss thereof is not adverse in any material respect to the Holders.

 

ARTICLE V

 

MERGER, ETC.

 

SECTION 5.01. When Company May Merge, etc.
(a) The Company shall not consolidate or merge with or into, or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its assets to, any Person unless: (i) the Person formed by or surviving any such consolidation or merger (if other than the Company),
or to which such sale, assignment, transfer, lease, conveyance or disposition has been made, is a corporation organized and existing under
the laws of the United States of America, any state thereof or the District of Columbia; (ii) the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, lease, conveyance or disposition has
been made, assumes by supplemental indenture satisfactory in form to the Trustee all the obligations of the Company under the Securities
and this Indenture; and (iii) immediately after such transaction, and giving effect thereto, no Default or Event of Default shall have
occurred and be continuing. Notwithstanding the foregoing, the Company may merge with another Person or acquire by purchase or otherwise
all or any part of the property or assets of any other corporation or Person in a transaction in which the surviving entity is the Company.

 

(b) In connection with any consolidation, merger,
sale, assignment, transfer or lease contemplated by this Section 5.01, the Company shall deliver, or cause to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, an Officers’ Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, sale, assignment, transfer or lease and the supplemental indenture in respect thereof comply with Article
V and the TIA and that all conditions precedent herein provided for relating to such transaction have been complied with.

 

SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all
the assets of the Company in accordance with Section 5.01, the successor corporation formed by such consolidation or into which
the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor
corporation had been named as the Company herein. In the event of any such sale or conveyance, but not any such lease, the Company or
any successor corporation which thereafter shall have become such in the manner described in this Article V shall be discharged
from all obligations and covenants under this Indenture and the Securities and may be dissolved, wound up or liquidated.

 

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ARTICLE VI

 

DEFAULTS AND REMEDIES

 

SECTION 6.01. Events of Default. An
“Event of Default” occurs with respect to Securities of any particular series, unless in the establishing Board Resolutions,
Officers’ Certificate or supplemental indenture hereto, it is provided that such series shall not have the benefit of any such Event
of Default, when any of the following occurs:

 

(i) the Company defaults in the payment
of interest on any Security of that series when it becomes due and payable and such default continues for a period of 30 days;

 

(ii) the Company defaults in the payment
of the principal of any Security of that series when the same becomes due and payable at maturity, upon acceleration, redemption or otherwise;

 

(iii) the Company fails to comply with
any of its other agreements or covenants in, or provisions of, the Securities of that series or this Indenture and the Default continues
for the period and after the notice specified below;

 

(iv) the Company pursuant to or within
the meaning of any Bankruptcy Law: (A) commences a voluntary case or proceeding, (B) consents to the entry of an order for relief against
it in an involuntary case or proceeding, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property,
or (D) makes a general assignment for the benefit of its creditors; or

 

(v) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Company in an involuntary case or proceeding, (B)
appoints a Custodian for the Company or for all or substantially all of the Company’s property, or (C) orders the liquidation of
the Company;

 

and in case of (v) the order or decree remains unstayed and in effect
for 60 days.

 

The term “Bankruptcy Law” means
Title 11 of the U.S. Code or any similar Federal or state law for the relief of debtors. The term “Custodian” means
any receiver, Trustee, assignee, liquidator, sequestrator or similar official under any Bankruptcy Law.

 

A Default under clause (iii) of this Section 6.01
is not an Event of Default with respect to a particular series of Securities until the Trustee notifies the Company in writing, or the
Holders of at least 25% in principal amount of the outstanding Securities of that series notify the Company and the Trustee, in writing,
of the Default, and the Company does not cure the Default within 30 days after receipt of the notice. The notice must specify the Default,
demand that it be remedied and state that the notice is a “Notice of Default”.

 

SECTION 6.02. Acceleration. If an Event
of Default (other than an Event of Default specified in clause (iv) or (v) of Section 6.01) occurs and is continuing, the Trustee or the
Holders of at least 25% of the principal amount of the outstanding Securities of that series, by written notice to the Company may declare
due and payable 100% of the principal amount (or, in the case of Original Issue Discount Securities, such lesser amount as may be provided
for in such Securities) of the Securities of that series plus any accrued interest to the date of payment. Upon a declaration of acceleration,
such principal (or such lesser amount) and accrued interest to the date of payment shall be due and payable. If an Event of Default specified
in clause (iv) or (v) of Section 6.01 occurs, all unpaid principal and accrued interest on the Securities shall become and be immediately
due and payable without any declaration or other act on the part of the Trustee or any Holder.

 

The Holders of a majority of the outstanding principal
amount of the Securities of that series by written notice to the Trustee may rescind an acceleration and its consequences if (i) all existing
Events of Default other than the nonpayment of principal (or such lesser amount) of or interest on the Securities of that series which
have become due solely because of the acceleration, have been cured or waived and (ii) the rescission would not conflict with any judgment
or decree of a court of competent jurisdiction.

 

SECTION 6.03. Other Remedies. If an
Event of Default occurs and is continuing with respect to any series of Securities, the Trustee may pursue any available remedy by proceeding
at law or in equity to collect the payment of principal of or interest on the Securities of that series or to enforce the performance
of any provision of the Securities of that series or this Indenture.

 

The Trustee may maintain a proceeding even if it
does not possess any of the Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder
in exercising any right or remedy accruing upon the Event of Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All remedies are cumulative to the extent permitted
by law.

 

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SECTION 6.04. Waiver of Past Defaults.
Subject to Sections 6.07 and 9.02, the Holders of at least a majority in principal amount of the outstanding Securities
of any series by notice to the Trustee may waive an existing Default or Event of Default and its consequences with respect to that series,
except a Default in the nonpayment of the principal of or interest on any Security of that series (provided, however, that
the Holders of a majority in principal amount of the then outstanding Securities of any series may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration) . When a Default or Event of Default is waived, it is cured
and ceases.

 

SECTION 6.05. Control by Majority.
The Holders of at least a majority in principal amount of the outstanding Securities of any series may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture, that the Trustee determines may be unduly prejudicial to
the rights of other Holders or that may involve the Trustee in personal liability. The Trustee may take any other action which it deems
proper which is not inconsistent with any such direction.

 

SECTION 6.06. Limitation on Suits.
A Holder of Securities of any series may not pursue a remedy with respect to this Indenture or the Securities of that series unless: (i)
the Holder gives to the Trustee written notice of a continuing Event of Default with respect to such series; (ii) the Holders of at least
25% in principal amount of the outstanding Securities of that series make a written request to the Trustee to pursue the remedy; (iii)
such Holder or Holders offer to the Trustee indemnity satisfactory to the Trustee against any loss, liability, cost or expense; (iv) the
Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and (v) during such 60-day
period the Holders of at least a majority in principal amount of the outstanding Securities of that series do not give the Trustee a direction
inconsistent with the request.

 

A Holder may not use this Indenture to prejudice
the rights of another Holder or to obtain a preference or priority over another Holder.

 

SECTION 6.07. Rights of Holders To Receive
Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Security to receive payment of principal
of or interest, if any, on the Security on or after the respective due dates expressed or provided for in the Security, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of the
Holder.

 

SECTION 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(i) or (ii) occurs and is continuing with respect to Securities of any series,
the Trustee may recover judgment in its own name and as Trustee of an express trust against the Company for the whole amount of principal
(or such portion of the principal as may be specified as due upon acceleration at that time in the terms of that series of Securities)
and accrued interest, if any, remaining unpaid on the outstanding Securities of that series, together with (to the extent lawful) interest
on overdue principal and interest, and such further amount as shall be sufficient to cover the costs and, to the extent lawful, expenses
of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and
any other amounts due the Trustee under Section 7.07.

 

SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of
the Trustee and the Holders allowed in any judicial proceeding relative to the Company (or any other obligor upon the Securities), its
creditors or its property and shall be entitled and empowered to participate as a member, voting or otherwise, of any official committee
of creditors appointed in such matter and to collect and receive any moneys or other property payable or deliverable on any such claims
and to distribute the same, and any custodian in any such judicial proceedings is hereby authorized by each Holder to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07. Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder
in any such proceeding.

 

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SECTION 6.10. Priorities. If the Trustee
collects any money pursuant to this Article VI, it shall pay out the money in the following order:

 

FIRST:to the Trustee, its agents
and attorneys for amounts due under Section 7.07, including payment of all compensation, expense and liabilities incurred, and
all advances made by the Trustee and the costs and expenses of collection;

 

SECOND: to Holders of any particular
series of Securities for amounts due and unpaid on the Securities of such series for principal and interest, if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on the Securities of such series for principal and interest,
respectively; and

 

THIRD:to the Company or any other
obligors on the Securities of that series, as their interests may appear, or as a court of competent jurisdiction may direct.

 

The Trustee, upon prior written notice to the Company,
may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. The Trustee shall notify the Company
in writing reasonably in advance of any such record date and payment date.

 

SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses,
against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders
of more than 10% in principal amount of the outstanding Securities of that series.

 

ARTICLE VII

 

TRUSTEE

 

SECTION 7.01. Duties of Trustee. (a)
If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the
conduct of such person’s own affairs.

 

(b) Except during the continuance of an Event of
Default: (1) the Trustee need perform only those duties that are specifically set forth in this Indenture or the TIA, and no implied covenants
or obligations shall be read into this Indenture against the Trustee and (2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall examine the certificates and
opinions to determine whether or not, on their face, they conform to the requirements of this Indenture.

 

(c) The Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own willful misconduct except that: (1) this paragraph does not
limit the effect of paragraph (b) of this Section 7.01, (2) the Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer or other officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts and
(3) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.

 

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(d) Whether or not therein expressly so provided,
every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
7.01.

 

(e) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or incur any liability. The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss, liability, cost or expense (including, without limitation, reasonable
fees of counsel).

 

(f) The Trustee shall not be obligated to pay interest
on any money or other assets received by it unless otherwise agreed in writing with the Company. Assets held in trust by the Trustee need
not be segregated from other funds except to the extent required by law.

 

SECTION 7.02. Rights of Trustee. Subject
to Section 7.01:

 

(a) The Trustee may conclusively rely on any document
(whether in its original or facsimile form) reasonably believed by it to be genuine and to have been signed or presented by the proper
person. The Trustee need not investigate any fact or matter stated in the document. The Trustee shall receive and retain financial reports
and statements of the Company as provided herein, but shall have no duty to review or analyze such reports or statements to determine
compliance under covenants or other obligations of the Company.

 

(b) Before the Trustee acts or refrains from acting,
it may require an Officers’ Certificate and/or an Opinion of Counsel. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

 

(c) The Trustee may act through its attorneys and
agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

 

(d) The Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or within its rights or powers, unless the Trustee’s
conduct constitutes willful misconduct or negligence.

 

(e) The Trustee may consult with counsel of its selection,
and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete
authorization and protection from liability in respect of any action taken, omitted or suffered by it hereunder in good faith and in accordance
with the advice or opinion of such counsel.

 

(f) The Trustee shall not be deemed to have notice
of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee and such notice references
the Securities and this Indenture.

 

(g) The rights, privileges, protections, immunities
and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable
by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

 

(h) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions
of this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses
and liabilities which may be incurred therein or thereby.

 

(i) Whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically prescribed) may request, and in the absence of bad faith or willful misconduct
on its part, rely upon an Officers’ Certificate and an Opinion of Counsel.

 

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(j) The Trustee may request that the Company deliver
an Officers’ Certificate setting for the names of individuals and/or titles of officers authorized at such times to take specified
actions pursuant to this Indenture, which Officers’ Certificate may be signed by any person specified as so authorized in any such
certificate previously delivered and not superseded.

 

SECTION 7.03. Individual Rights of Trustee.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Securities and may otherwise deal with the Company or an Affiliate of the Company with the same rights
it would have if it were not Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to Sections 7.10
and 7.11.

 

SECTION 7.04. Trustee’s Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for
the Company’s use of the proceeds from the Securities and it shall not be responsible for any statement in the Securities other
than its certificate of authentication.

 

SECTION 7.05. Notice of Defaults. If
a Default or Event of Default with respect to the Securities of any series occurs and is continuing, and if it is known to the Trustee,
the Trustee shall mail to Holders a notice of the Default or Event of Default within 90 days after the occurrence thereof. Except in the
case of a Default or Event of Default in payment of any such Security, the Trustee may withhold the notice if and so long as it in good
faith determines that withholding the notice is in the interests of the Holders.

 

SECTION 7.06. Reports by Trustee to Holders.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required by TIA
Section 3.13 at the times and in the manner provided by the TIA, which shall initially be not less than every twelve months commencing
on and may be dated as of a date up to 75 days prior to such transmission.

 

A copy of each report at the time of its mailing
to Holders shall be filed with the SEC, if required, and each stock exchange, if any, on which the Securities are listed. The Company
shall promptly notify the Trustee when the Securities of any series are listed on any stock exchange.

 

SECTION 7.07. Compensation and Indemnity.
The Company shall be liable for paying to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and
services hereunder as the Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not
be limited by any law on compensation of a trustee of an express trust. The Company shall be liable for reimbursing the Trustee upon request
for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, costs of preparing and reviewing reports,
certificates and other documents, costs of preparation and mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or otherwise, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel,
accountants and experts. The Company shall indemnify the Trustee against any and all loss, liability, damages, claims or expense (including
reasonable attorneys’ fees and expenses) incurred by it without negligence, bad faith or willful misconduct on its part in connection
with the administration of this trust and the performance of its duties hereunder, including the costs and expense of enforcing this Indenture
(including this Section 7.07) and of defending itself against any claims (whether asserted by any Securityholder, the Company or
otherwise). Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall
defend the claim, and the Trustee shall provide reasonable cooperation at the Company’s expense in the defense. The Trustee may
have separate counsel and the Company shall pay the fees and expenses of such counsel, provided that the Company shall not be required
to pay such fees and expenses if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee,
there is no conflict of interest between the Company and the Trustee in connection with such defense. Notwithstanding the foregoing, the
Company need not reimburse any expense or indemnify against any loss, liability or expense which is finally determined by a court of competent
jurisdiction to have been incurred by the Trustee through the Trustee’s own willful misconduct, negligence or bad faith.

 

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To secure the Company’s payment obligations
in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other
than money or property held in trust to pay principal of and interest on particular Securities. Such lien shall survive the satisfaction
and discharge of this Indenture. The Trustee’s right to receive payment of any amounts due under this Section 7.07 shall
not be subordinate to any other liability or Indebtedness of the Company.

 

The Company’s and the Subsidiary Guarantors’
payment obligations pursuant to this Section shall survive the discharge of this Indenture. When the Trustee incurs expenses after the
occurrence of an Event of Default specified in clause (iv) or clause (v) of Section 6.01 with respect to the Company, the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.

 

SECTION 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee’s
acceptance of appointment as provided in this Section 7.08.

 

The Trustee may resign and be discharged from the
trust hereby created with respect to one or more or all series of Securities by so notifying the Company in writing. The Holders of a
majority in principal amount of the then outstanding Securities of any series may remove the Trustee with respect to that series by so
notifying the Trustee and the Company in writing. The Company may remove the Trustee with respect to one or more or all series of Securities
if: (i) the Trustee fails to comply with Section 7.10 or TIA Section 310; (ii) the Trustee is adjudged a bankrupt or an insolvent
or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (iii) a Custodian or public officer takes charge
of the Trustee or its property; or (iv) the Trustee becomes incapable of acting.

 

If, as to any series of Securities, the Trustee resigns
or is removed or if a vacancy exists in the office of the Trustee for any reason, the Company shall promptly appoint a successor Trustee
for that series of Securities. The Trustee shall be entitled to payment of its fees and reimbursement of its expenses while acting as
Trustee. Within one year after the successor Trustee takes office, the Holders of at least a majority in principal amount of then outstanding
Securities of that series may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

 

Any Holder of Securities of that series may petition
any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee if the Trustee fails to
comply with Section 7.10.

 

A successor Trustee as to any series of Securities
shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The Company shall mail a notice of the successor Trustee’s succession to the Holders. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.07.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company’s obligations under Section 7.07
hereof shall continue for the benefit of the retiring Trustee with respect to expenses, losses and liabilities incurred by it prior to
such replacement.

 

In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee
with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm
to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those series to which the appointment of such successor Trustee relates, (2) shall contain such provisions as shall be necessary
or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary or desirable to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee; provided, however, that nothing herein or in such supplemental indenture
shall constitute such Trustees to be co-Trustees of the same trust and that each such Trustee shall be Trustee of a trust hereunder separate
and apart from any trust hereunder administered by any other such Trustee.

 

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Upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.

 

SECTION 7.09. Successor Trustee by Merger,
Etc. Subject to Section 7.10, if the Trustee consolidates with, merges or converts into, or transfers all or substantially all
of its corporate trust business to, another corporation or national banking association, the successor entity without any further act
shall be the successor Trustee as to that series of Securities.

 

SECTION 7.10. Eligibility; Disqualification.
Each series of Securities shall always have a Trustee who satisfies the requirements of TIA Section 310(a) (1), (2) and (5). The Trustee
as to any series of Securities shall always have a combined capital and surplus of at least $100 million as set forth in its most recent
published annual report of condition. The Trustee is subject to TIA Section 310(b).

 

SECTION 7.11. Preferential Collection of Claims
Against the Company. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311
(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein.

 

ARTICLE VIII

DISCHARGE OF INDENTURE

 

SECTION 8.01. Satisfaction and Discharge of
Indenture. This Indenture shall cease to be of further effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when

 

(a) either

 

(i) all Securities theretofore authenticated and delivered
(other than Securities that have been destroyed, lost or stolen and that have been replaced or paid) have been delivered to the Trustee
for cancellation; or

 

(ii) all such Securities not theretofore delivered to the Trustee
for cancellation

 

(1) have become due and payable, or

 

(2) will become due and payable at their stated maturity
within one year, or

 

(3) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the
Company, or

 

(4) are deemed paid and discharged pursuant to Section 8.03,
as applicable;

 

and the Company, in the case of (1), (2) or (3) above, has
deposited or caused to be deposited with the Trustee as trust funds in trust an amount sufficient for the purpose of paying and discharging
the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Securities which have become due and payable on or prior to the date of such deposit) or to the stated
maturity or redemption date, as the case may be;

 

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(b) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and

 

(c) the Company has delivered to the Trustee an Officers’
Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.

 

Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company to the Trustee under Section 7.07, and, if money shall have been deposited with
the Trustee pursuant to clause (a) of this Section or if money or obligations shall have been deposited with or received by the Trustee
pursuant to Section 8.03, the obligations of the Trustee under Section 8.02 and Section 8.05 shall survive.

 

SECTION 8.02. Application of Trust Funds; Indemnification.

 

(a) Subject to the provisions of Section 8.05,
all money deposited with the Trustee pursuant to Section 8.01, all money and U.S. Government Obligations deposited with the Trustee
pursuant to Section 8.03 or 8.04 and all money received by the Trustee in respect of U.S. Government Obligations deposited
with the Trustee pursuant to Section 8.03 or 8.04, shall be held in trust and applied by it, in accordance with the provisions
of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the persons entitled thereto, of the principal and interest for whose payment such
money has been deposited with or received by the Trustee or to make mandatory sinking fund payments or analogous payments as contemplated
by Sections 8.03 and 8.04.

 

(b) The Company shall pay and shall indemnify the
Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations deposited pursuant to Sections
8.03 or 8.04 or the interest and principal received in respect of such obligations other than any payable by or on behalf of
Holders.

 

(c) The Trustee shall deliver or pay to the Company
from time to time upon the request of the Company any U.S. Government Obligations or money held by it as provided in Sections 8.03
or 8.04 which, in the opinion of a nationally recognized firm of independent certified public accountants expressed in a written
certification thereof delivered to the Trustee, are then in excess of the amount thereof which then would have been required to be deposited
for the purpose for which such U.S. Government Obligations or money were deposited or received. This provision shall not authorize the
sale by the Trustee of any U.S. Government Obligations held under this Indenture.

 

SECTION 8.03. Legal Defeasance of Securities
of any Series. Unless this Section 8.03 is otherwise specified to be inapplicable to Securities of any series, the Company
shall be deemed to have paid and discharged the entire indebtedness on all the outstanding Securities of any such series on the 91st day
after the date of the deposit referred to in subparagraph (a) hereof, and the provisions of this Indenture, as it relates to such outstanding
Securities of such series, shall no longer be in effect (and the Trustee, at the expense of the Company, shall, upon the request of the
Company, execute proper instruments acknowledging the same), except as to:

 

(i) the rights of Holders of Securities of such series
to receive, from the trust funds described in subparagraph (d) hereof, (x) payment of the principal of an each installment of principal
of or interest on the outstanding Securities of such series on the stated maturity of such principal of or interest and (y) the benefit
of any mandatory sinking fund payments applicable to the Securities of such series on the day on which such payments are due and payable
in accordance with the terms of this Indenture and the Securities of such series;

 

(ii) the Company’s obligations with respect
to such Securities of such series under Sections 2.03, 2.06 and 2.07; and

 

(iii) the rights, powers, trust and immunities of
the Trustee hereunder and the duties of the Trustee under Section 8.02 and the duty of the Trustee to authenticate Securities of
such series issued on registration of transfer of exchange;

 

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provided that, the following conditions shall have
been satisfied:

 

(a) the Company shall have deposited or caused to
be deposited irrevocably with the Trustee as trust funds in trust for the purpose of making the following payments, specifically pledged
as Security for and dedicated solely to the benefit of the Holders of such Securities, cash in U.S. Dollars and/or U.S. Government Obligations
which through the payment of interest and principal in respect thereof, in accordance with their terms, will provide (and without reinvestment
and assuming no tax liability will be imposed on such Trustee), not later than one day before the due date of any payment of money, an
amount in cash, sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of principal (including mandatory sinking fund or analogous payments)
of and interest, if any, on all the Securities of such series on the dates such installments of interest or principal are due;

 

(b) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture;

 

(c) no Default or Event of Default with respect to
the Securities of such series shall have occurred on the date of such deposit and 91 days shall have passed after the deposit has been
made, and, during such 91 day period, no Default specified in Section 6.0l(iv) or (v) with respect to the Company occurs which is continuing
at the end of such period;

 

(d) the Company shall have delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel to the effect that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable
Federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of
the Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have
been the case if such deposit, defeasance and discharge had not occurred;

 

(e) the Company shall have delivered to the Trustee
an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of the Securities
of such series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors
of the Company;

 

(f) such deposit shall not result in the trust arising
from such deposit constituting an investment company (as defined in the Investment Company Act of 1940, as amended), or such trust shall
be qualified under such Act or exempt from regulation thereunder; and

 

(g) the Company shall have delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the defeasance contemplated
by this Section have been complied with.

 

SECTION 8.04. Covenant Defeasance.
Unless this Section 8.04 is otherwise inapplicable to Securities of any series, on and after the 91st day after the date of the
deposit referred to in subparagraph (a) hereof, the Company may omit to comply with any term, provision or condition set forth under Sections
4.03, 4.04 and 4.05 as well as any additional covenants contained in a supplemental indenture hereto for a particular
series of Securities or a Board Resolution or an Officers’ Certificate delivered pursuant to Section 2.01 (and the failure
to comply with any such provisions shall not constitute a Default or Event of Default under Section 6.01) and the occurrence of
any event described in clause (e) of Section 6.01 shall not constitute a Default or Event of Default hereunder, with respect to
the Securities of such series, provided that the following conditions shall have been satisfied:

 

(a) With reference to this Section 8.04, the
Company has deposited or caused to be irrevocably deposited (except as provided in Section 8.03) with the Trustee as trust funds
in trust, specifically pledged as Security for, and dedicated solely to, the benefit of the Holders of such Securities, cash in U.S. Dollars
and/or U.S. Government Obligations which through the payment of interest and principal in respect thereof, in accordance with their terms,
will provide (and without reinvestment and assuming no tax liability will be imposed on such Trustee), not later than one day before the
due date of any payment of money, an amount in cash, sufficient, in the opinion of a nationally recognized firm of independent certified
public accountants expressed in a written certification thereof delivered to the Trustee, to pay principal and interest, if any, on and
any mandatory sinking fund in respect of the Securities of such series on the dates such installments of interest or principal are due;

 

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(b) Such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture;

 

(c) No Default or Event of Default with respect to
the Securities of such series shall have occurred on the date of such deposit and 91 days shall have passed after the deposit has been
made, and, during such 91 day period, no Default specified in Section 6.01(iv) or (v) with respect to the Company occurs which is continuing
at the end of such period;

 

(d) The Company shall have delivered to the Trustee
an Opinion of Counsel confirming that Holders of the Securities of such series will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and defeasance and will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such deposit and defeasance had not Occurred;

 

(e) The Company shall have delivered to the Trustee
an Officers’ Certificate stating the deposit was not made by the Company with the intent of preferring the Holders of the Securities
of such series over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors
of the Company; and

 

(f) The Company shall have delivered to the Trustee
an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the
defeasance contemplated by this Section have been complied with.

 

SECTION 8.05. Repayment to Company.
The Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal or interest
that remains unclaimed for two years after the date upon which such payment shall have become due. After payment to the Company, Holders
entitled to the money must look to the Company for payment as general creditors unless an applicable abandoned property law designates
another Person.

 

ARTICLE IX

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may amend this Indenture or the Securities without the consent of any Holder: (i) to cure any ambiguity, defect
or inconsistency or make any change required to qualify the indenture under the TIA, provided that such change does not adversely affect
the rights hereunder of any Holder in any material respect; (ii) to comply with Section 5.01; (iii) to provide for uncertificated
Securities in addition to certificated Securities; (iv) to make any change that does not adversely affect in any material respect the
rights hereunder of any Holder; (v) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series
of Securities, provided, however, that any such addition, change or elimination (A) shall neither (i) apply to any Security
of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify
the rights of the holder of any such Security with respect to such provision or (B) shall become effective only when there is no outstanding
Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provisions; or
(vi) to establish additional series of Securities as permitted by Section 2.01.

 

SECTION 9.02. With Consent of Holders.
The Company and the Trustee as to any series of Securities may amend this Indenture or the Securities of that series or waive compliance
in any particular instance with any provision of this Indenture or the Securities of that series, in each case with the written consent
of the Holders of at least a majority in principal amount of the then outstanding Securities of that series.

 

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Without the consent of each Holder affected, an amendment
or waiver under this Section may not: (i) reduce the principal amount of Securities, whose Holders must consent to an amendment or waiver;
(ii) reduce the rate of or change the time for payment of interest on any Security; (iii) change the date on which any Security may be
subject to redemption or repurchase, or reduce the redemption or repurchase price therefor; (iv) make any Security payable in currency
other than that stated in the Security; or (v) make any change in Section 6.04, 6.07 or this sentence.

 

It shall not be necessary for the consent of the
Holders under this Section to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent
approves the substance thereof.

 

An amendment or waiver under this Section which waives,
changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one
or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series.

 

The Company will mail supplemental indentures to
Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or
affect the validity of any such supplemental indenture or waiver.

 

SECTION 9.03. Compliance with Trust Indenture
Act. Every amendment to this Indenture or the Securities shall be set forth in a supplemental indenture that complies with the
TIA as then in effect.

 

SECTION 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a Holder of a Security is a continuing consent by the Holder and
every subsequent Holder of a Security or portion of a Security that evidences the same debt as the consenting Holder’s Security,
even if notation of the consent is not made on any Security; provided, however, that unless a record date shall have been
established pursuant to Section 2.14, any such Holder or subsequent Holder may revoke the consent as to his Security or portion
of a Security if the Trustee receives written notice of revocation before the date the amendment or waiver becomes effective. An amendment
or waiver becomes effective on receipt by the Trustee of consents from the Holders of the requisite percentage principal amount of the
outstanding Securities of any series, and thereafter shall bind every Holder of Securities of that series.

 

SECTION 9.05. Notation on or Exchange of Securities.
If an amendment or waiver changes the terms of a Security: (a) the Trustee may require the Holder of the Security to deliver such Security
to the Trustee, the Trustee may place an appropriate notation on the Security about the changed terms and return it to the Holder and
the Trustee may place an appropriate notation on any Security thereafter authenticated; or (b) if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall authenticate a new Security that reflects the changed terms.

 

SECTION 9.06. Trustee to Sign Amendment, etc.
The Trustee shall sign any amendment authorized pursuant to this Article IX if the amendment does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not sign it. In signing or refusing to sign such
amendment, the Trustee shall be entitled to receive and shall be fully protected in relying upon an Officers’ Certificate and an
Opinion of Counsel as conclusive evidence that such amendment is authorized or permitted by this Indenture and that such amendment, supplement
or waiver is the legal, valid and binding obligation of the Company, enforceable against it in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).

 

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ARTICLE X

MISCELLANEOUS

 

SECTION 10.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA which are required to be part of this Indenture, and shall, to the extent applicable,
be governed by such provisions.

 

SECTION 10.02. Notices. Any notice
or communication to the Company or the Trustee is duly given if in writing and delivered in person or mailed by first-class mail to the
address set forth below:

 

If to the Company:

 

SeqLL Inc.  

3 Federal Street

Billerica, Massachusetts
01821

Attn: Daniel Jones, Chief
Executive Officer

(781) 469-6016

 

with a copy to:

 

Pryor Cashman LLP

7 Times Square

New York, New York 10036

Attention: Eric M. Hellige, Esq.

 

If to the Trustee:

 

[____________________]

_____________________

_____________________

_____________________

Attention: ____________

 

With a copy to:

_____________________

_____________________

_____________________

Attention: ____________

 

The Company or the Trustee by notice to the other
may designate additional or different addresses for subsequent notices or communications.

 

Any notice or communication to a Holder shall be
mailed by first-class mail to his address shown on the register kept by the registrar. Failure to mail a notice or communication to a
Holder or any defect in such notice or communication shall not affect its sufficiency with respect to other Holders.

 

If a notice or communication is mailed or sent in
the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it, except that notice to
the Trustee shall only be effective upon receipt thereof by the Trustee.

 

If the Company mails a notice or communication to
Holders, it shall mail a copy to the Trustee and each Agent at the same time.

 

SECTION 10.03. Communication by Holders with
Other Holders. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the registrar and anyone else shall have the protection of TIA Section 312 (c)

 

    24

     

    

 

SECTION 10.04. Certificate and Opinion as to
Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the
Company shall furnish to the Trustee: (1) an Officers’ Certificate (which shall include the statements set forth in Section 10.05)
stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to
the proposed action have been complied with; and (ii) an Opinion of Counsel (which shall include the statements set forth in Section 10.05)
stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

 

SECTION 10.05. Statements Required in Certificate
or Opinion. Each certificate (other than certificates provided pursuant to Section 4.04) or opinion with respect to compliance
with a condition or covenant provided for in this Indenture shall include: (i) a statement that the person making such certificate or
opinion has read such covenant or condition; (ii) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based; (iii) a statement that, in the opinion of such person,
he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of such person, such condition
or covenant has been complied with; provided, however, that with respect to matters of fact, an Opinion of Counsel may rely
on an Officers’ Certificate or certificate of public officials.

 

SECTION 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or for a meeting of Holders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.

 

SECTION 10.07. Legal Holidays. A “Legal
Holiday” is a Saturday, a Sunday or a day on which banking institutions in the City of New York are not required or authorized
to be open. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that
is not a Legal Holiday, and no interest shall accrue for the intervening period.

 

SECTION 10.08. Duplicate Originals.
The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture.

 

SECTION 10.09. Governing Law. The internal
laws of the State of New York shall govern this Indenture and the Securities, without regard to the conflicts of Law rules thereof.

 

SECTION 10.10. No Adverse Interpretation of
Other Agreements. This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any
subsidiary. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

 

SECTION 10.11. Successors. All agreements
of the Company in this Indenture and the Securities shall bind their respective successors. All agreements of the Trustee in this Indenture
shall bind its successor.

 

SECTION 10.12. Severability. In case
any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 10.13. Counterpart Originals. This
Indenture may be signed in one or more counterparts. Each signed copy shall be an original, but all of them together represent the same
agreement.

 

	 	SeqLL Inc.
	 	 
	 	By:	 
	 	Name: 	 
	 	Title:	 
	 	 
	 	Dated:	 

 

	 	[	 	]

 

	 	By:	 
	 	Name: 	 
	 	Title:	 
	 	 
	 	Dated:	 

 

 

25​

EXHIBIT 10.1
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. OMITTED INFORMATION HAS BEEN REPLACED WITH [*****].
​

Water Authority of the Cayman Islands
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Procurement of and Operating Agreement for
a Sea Water Desalination Plant at
Red Gate Water Works
Grand Cayman, Cayman Islands
using
the Reverse Osmosis Process (2021)
​

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Water Authority of the Cayman Islands
​
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	​
Procurement of and Operating Agreement for
a Sea Water Desalination Plant at
Red Gate Water Works
Grand Cayman, Cayman Islands
using
the Reverse Osmosis Process (2021)
Request for Tender
​

​
​
​
Request for Tender No.: PPC-2021-WAC-047-RFP
Issued: Tuesday 5 October 2021
Submission Deadline: Friday 14 January 2022 12:00 PM EST
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	TABLE OF CONTENTS

	PART 1 - INVITATION AND SUBMISSION INSTRUCTIONS
	5

	1.1
	Introduction
	5

	1.2
	Invitation
	5

	1.3
	Procurement Contact
	5

	1.4
	Type of Contract for Deliverables
	5

	1.5
	Timetable
	6

	1.6
	Submission of Proposals
	6

	​
	​

	PART 2 - EVALUATION AND AWARD
	9

	2.1
	Stages of Evaluation
	9

	2.2
	Stage I — Mandatory Submission Requirements
	9

	2.3
	Stage II —Mandatory Technical Requirements
	9

	2.4
	Stage III — Pricing
	9

	2.5
	Selection of Top-Ranked Proponent
	9

	2.6
	Notice to Proponent and Execution of Agreement
	9

	2.7
	Failure to Enter into Agreement
	10

	​
	​

	PART 3 -TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS
	11

	3.1
	General Information and Instructions
	11

	3.2
	Communication after Issuance of Procurement Documents
	12

	3.3
	Notification and Debriefing
	12

	3.4
	Conflict of Interest and Prohibited Conduct
	13

	3.5
	Confidential Information
	14

	3.6
	Reserved Rights and Limitation of Liability
	15

	​
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	APPENDIX A - CONDITIONS OF ENGAGEMENT
	17

	​
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	APPENDIX B - SUBMISSION FORM
	47

	​
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	APPENDIX C - PROJECT PARTICULARS
	51

	A.
	THE DELIVERABLES
	51

	B.
	MANDATORY SUBMISSION REQUIREMENTS
	51

	C.
	MANDATORY TECHNICAL REQUIREMENTS
	52

	D.
	ASSESSMENT CRITERIA
	53

	E.
	PRE-CONDITIONS OF AWARD
	56

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	APPENDIX D - REFERENCES FORM
	57

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	APPENDIX E - ANALYSIS OF WELL WATER (TYPICAL VALUES)
	59

	​
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	APPENDIX F - QUALITY OF PRODUCT WATER
	61

	​
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	APPENDIX G - SPECIFICATIONS FOR CONSTRUCTING FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS
	63

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	APPENDIX H - OPERATION OF FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS
	75

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	APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS
	77

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	APPENDIX J - MANDATORY SPARES INVENTORY
	83

	​
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	APPENDIX K - DRAWINGS
	87

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PART 1 - INVITATION AND SUBMISSION INSTRUCTIONS
1.1 Introduction
This Procurement Document issued by the Water Authority – Cayman (“the Authority”) is:
	◻
	A request for proposal (RFP) to companies to submit proposals for the procurement of professional design services,

	⬛
	A request for tenders (RFT) to companies to submit a tender for the construction of certain facilities or for the supply of certain products or services.

1.2 Invitation
This is an invitation by the Authority to eligible prospective respondents (“Proponents”) to submit a tender for the Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021) contract, as further described in APPENDIX C- PROJECT PARTICULARS, Section A (the “Deliverables”).
1.3 Procurement Contact
If a Proponent is in doubt as to the true meaning of any part of this Procurement Document or other documents contained herein, the Proponent shall submit questions only via the Bonfire platform (for the relevant project):
https://cayman.bonfirehub.com/opportunities
Except in so far as may be directed by the Authority in writing neither the Authority, nor any agent or servant in their employment has any authority to make any representation or explanation to Proponents as to the meaning of this Procurement Document.
Proponents and their representatives are not permitted to contact any employees, officers, agents, elected or appointed officials or other representatives of the Authority concerning matters regarding this Procurement Document. Failure to adhere to this rule may result in the disqualification of the Proponent and the rejection of the Proponent’s proposal.
Questions regarding the response and submission process only shall be submitted in writing to the Authority:
Tom van Zanten, Deputy Director (Tom.vanZanten@waterauthority.ky )
1.4 Type of Contract for Deliverables
The selected Proponent will be required to enter into an agreement with the Authority for the provision of the Deliverables in the form included in APPENDIX A — CONDITIONS OF ENGAGEMENT to the Procurement Document (the “Agreement”).
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1.5 Timetable
​
	Issue Date of Procurement Document
	Tuesday 5 October 2021

	Site Visit
	Not Applicable

	Deadline for Questions
	Tuesday 28 December 2021 12:00 PM EST (GMT-5)

	Deadline for Issuing Addenda
	Wednesday 5 January 2022

	Submission Deadline
	Friday 14 January 2022 12:00 PM EST (GMT-5)

	Rectification Period
	Five (5) Business Days from Notification of Rectification

	Anticipated Ranking of Proponents
	Friday 18 March 2022

	Anticipated Execution of Agreement
	Friday 17 June 2022

	Irrevocability Period
	165 days

​
The above timetable is tentative only, and may be changed by the Authority at any time.
1.6 Submission of Proposals
Please follow these instructions to submit via our electronic Public Portal.
Prepare your submission materials:
Requested Information
	​

	​

	​

	​

	

Name
	Type
	# Files
	Requirement

	APPENDIX A - CONDITIONS OF ENGAGEMENT
	File Type: PDF (.pdf)
	1
	Required

	APPENDIX B - SUBMISSION FORM
	File Type: PDF (.pdf)
	1
	Required

	APPENDIX C - PROJECT PARTICULARS
	File Type: PDF(.pdf)
	1
	Required

	APPENDIX D - REFERENCES FORM
	File Type: PDF (.pdf)
	1
	Required

	PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH
	File Type: PDF (.pdf)
	1
	Required

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Other Information (These will be part of the Contract)
	​

	​

	​

	Name
	Type
	# Files

	APPENDIX E - ANALYSIS OF WELL WATER (TYPICAL VALUES)
	File Type: PDF (.pdf)
	1

	APPENDIX F - QUALITY OF PRODUCT WATER
	File Type: PDF (.pdf)
	1

	APPENDIX G - SPECIFICATIONS FOR CONSTRUCTING FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS
	File Type: PDF (.pdf)
	1

	APPENDIX H - OPERATION OF FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS
	File Type: PDF (.pdf)
	1

	APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS -
	File Type: PDF (.pdf)
	1

	APPENDIX J - MANDATORY SPARES INVENTORY
	File Type: PDF (.pdf)
	1

	APPENDIX K - DRAWINGS
	File Type: PDF (.pdf)
	1

​
Requested Documents:
Please note the type and number of files allowed. The maximum upload file size is 100 MB.
Please note that only ONE (1) file can be uploaded for each Requested Document above. If you upload more than one file into the same slot, the previous file will he overwritten.
Do not embed any documents within your uploaded files, as they will not be accessible or evaluated.
	1.6.1
	Proposals to be Submitted at Prescribed Location:

Proposals shall be submitted electronically at the following platform: 
https://cayman.bonfirehub.com/opportunities
	1.6.2
	Proposals to be Submitted on Time

Proposals must be submitted on or before the Submission Deadline. Proposals submitted after the Submission Deadline will be rejected.
We strongly recommend that you give yourself sufficient time and at least ONE (1) hour before Submission Deadline to begin the uploading process and to finalize your submission.
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Important Notes:
Each Requested Document is instantly (automatically) sealed and will only be visible after the Submission Deadline.
Uploading large documents may take significant time, depending on the size of the file(s) and your Internet connection speed.
You will receive an email confirmation receipt with a unique confirmation number once you finalize your submission.
Minimum system requirements: Internet Explorer 8/9/10+, Google Chrome, or Mozilla Firefox. JavaScript must be enabled.
Need Help?
The Authority uses a Bonfire portal for accepting and evaluating proposals digitally. Please contact Bonfire at Support@GoBonfire.com for technical questions related to your submission. You can also visit their help forum at https://bonfirehub.zendesk.com/hc
	1.6.3
	Amendment of Proposals

Proponents may amend their proposals prior to the Submission Deadline by uploading (a) new file(s) as only ONE (1) file can be uploaded for each Requested Document above. If you upload more than one file into the same slot, the previous file will be overwritten.
	1.6.4
	Proposals Irrevocable after Submission Deadline

Proposals shall be irrevocable for a period of 165 days running from the moment that the Submission Deadline passes.
No proposal shall be altered or amended after the Submission Deadline other than those alterations necessary to correct any arithmetic errors. Rates shall prevail where there is an arithmetic error in extension. Discrepancies in the quantity multiplied by unit price and the extended total amount will be resolved in favour of the quantity multiplied by unit price. Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved in favour of the correct sum.
[End of Part 1]
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PART 2 – EVALUATION AND AWARD
2.1Stages of Evaluation
The Authority will conduct the evaluation of proposals in the following stages:
2.2Stage I – Mandatory Submission Requirements
Stage I will consist of a review to determine whether proposals comply with all of the mandatory submission requirements. If a proposal fails to satisfy all of the mandatory submission requirements, the Authority will issue the respondent a rectification notice identifying the deficiencies and providing the respondent an opportunity to rectify the deficiencies. If the respondent fails to satisfy the mandatory submission requirements within the Rectification Period, its proposal will be excluded from further consideration. The Rectification Period will begin to run from the date and time that the Authority issues a rectification notice to the respondent. The mandatory submission requirements are listed in Section B of APPENDIX C - PROJECT PARTICULARS.
2.3Stage II – Mandatory Technical Requirements
The Authority will review the proposals to determine whether the mandatory technical requirements as set out in Section C of APPENDIX C - PROJECT PARTICULARS have been met. Questions or queries on the part of the Authority as to whether a proposal has met the mandatory technical requirements will be subject to the verification and clarification process set out in PART 3-TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS.
The Authority will evaluate each qualified proposal on the basis of the rated criteria as set out in Section D of APPENDIX C - PROJECT PARTICULARS.
2.4Stage III – Pricing
The Authority will score the submitted price offering of each qualified proposal in accordance with the price evaluation method set out in Section D of APPENDIX C - PROJECT PARTICULARS. The evaluation of the price offerings will be undertaken after the evaluation of the mandatory requirements and the rated criteria has been completed.
2.5Selection of Top-Ranked Proponent
After the completion of Stage III, all scores from Stage II and Stage III will be added together and the Proponents will be ranked based on their total scores. The award will be made on the basis of that proposal from the responsible Proponent with the highest score using the Proposal Evaluation Criteria as set out in Section D of APPENDIX C - PROJECT PARTICULARS and which will best serve the interest of the Authority. Subject to the reserved rights of the Authority, the top-ranked Proponent will be selected to enter into the Agreement in accordance with the following section.
2.6Notice to Proponent and Execution of Agreement
The notice of selection by the Authority to the selected Proponent shall be in writing. The selected Proponent shall satisfy any other applicable conditions of this Procurement Document, including the pre-conditions of award listed in Section E of APPENDIX C - PROJECT PARTICULARS, within
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forty-five (45) days of the notice of selection, before the Agreement in the form included in APPENDIX A – CONDITIONS OF ENGAGEMENT to the Procurement Document (the “Agreement”) shall be executed. This provision is solely for the benefit of the Authority and may be waived by the Authority.
	2.7
	Failure to Enter into Agreement

In addition to all of the Authority’s other remedies, if a selected Proponent fails to satisfy all of the applicable conditions within forty-five (45) days of the notice of selection, and the Agreement therefore cannot be not executed, the Authority may, without incurring any liability, withdraw the selection of that Proponent and proceed with the next highest ranked Proponent.
[End of Part 2]
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PART 3 – TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS
	3.1
	General Information and Instructions

	3.1.1
	Procurement Document Incorporated into Proposal

All of the provisions of this Procurement Document are deemed to be accepted by each Proponent and incorporated into each Proponent’s proposal. A Proponent who submits conditions, options, variations or contingent statements inconsistent with the terms set out in this Procurement Document, either as part of its proposal or after receiving the notice of selection, may be disqualified.
	3.1.2
	Proponents to Follow Instructions

Proponents should structure their proposals in accordance with the instructions in this Procurement Document. Where information is requested in this Procurement Document, any response made in a proposal should reference the applicable section numbers of this Procurement Document.
	3.1.3
	Proposals in English

All proposals are to be in English only.
	3.1.4
	No Incorporation by Reference

The entire content of the Proponent’s proposal should be submitted in a fixed form, and the content of websites or other external documents referred to in the Proponent’s proposal but not attached will not be considered to form part of its proposal.
	3.1.5
	References and Past Performance

In the evaluation process the Authority may include information provided by the Proponent’s references and may also consider the Proponent’s past performance or conduct on previous contracts with the Authority or other institutions.
	3.1.6
	Information in Procurement Document Only an Estimate

The Authority makes no representation, warranty or guarantee as to the accuracy of the information contained in this Procurement Document or issued by way of addenda. Any quantities shown or data contained in this Procurement Document or provided by way of addenda are estimates only, and are for the sole purpose of indicating to the Proponents the general scale and scope of the Deliverables. It is the Proponent’s responsibility to obtain all the information necessary to prepare a proposal in accordance with this Procurement Document.
	3.1.7
	Proponents to Bear Their Own Costs

The Proponent will bear all costs associated with or incurred in the preparation and presentation of its proposal, including, if applicable, costs incurred for interviews or demonstrations.
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	3.1.8
	Proposal to be Retained by the Authority

The Authority will not return the proposal or any accompanying documentation submitted by a Proponent.
	3.2
	Communication after Issuance of Procurement Documents

	3.2.1
	Proponents to Review Procurement Documents

Proponents shall promptly examine all of the Procurement Documents, and
	(a)
	shall report any errors, omissions or ambiguities; and

	(b)
	may direct questions or seek additional information

in writing by email via the Bonfire platform on or before the Deadline for Questions, as described in PART 1 – INVITATION AND SUBMISSION INSTRUCTIONS. All such questions or comments shall be deemed to be received once the email has been submitted to the Bonfire platform. No such communications are to be directed to anyone else. The Authority is under no obligation to provide additional information, and the Authority shall not be responsible for any information provided by or obtained from any other source. It is the responsibility of the Proponent to seek clarification via the Bonfire platform on any matter it considers to be unclear. The Authority shall not be responsible for any misunderstanding on the part of the Proponent concerning this Procurement Document or its process.
	3.2.2
	All New Information to Proponents by Way of Addenda

This Procurement Document may be amended only by addendum in accordance with this section. If the Authority, for any reason, determines that it is necessary to provide additional information relating to this Procurement Document, such information will be communicated to all Proponents by addendum. Each addendum shall have a serial number and shall become a part of this Procurement Document. An addendum may contain important information, including significant changes to the Procurement Document. Proponents are responsible for obtaining all addenda issued by the Authority. In the Submission Form (APPENDIX B), Proponents should confirm their receipt of all addenda by setting out the number of each addendum in the space provided.
	3.2.3
	Post-Deadline Addenda and Extension of Submission Deadline

If the Authority determines that it is necessary to issue an addendum after the Deadline for Issuing Addenda, the Authority may extend the Submission Deadline by a reasonable period of time.
	3.2.4
	Verify, Clarify and Supplement

When evaluating proposals, the Authority may request further information from the Proponent or third parties in order to verify, clarify or supplement the information provided in the Proponent’s proposal. The response received by the Authority shall, if accepted by the Authority, form an integral part of the Proponent’s proposal.
	3.3
	Notification and Debriefing

	3.3.1
	Notification to Other Proponents

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Once the Agreement is executed between the Authority and a Proponent, the other Proponents will be notified directly in writing of the outcome of the procurement process.
	3.3.2
	Debriefing

Proponents may request a debriefing after receipt of a notification of the outcome of the procurement process. All requests must be in writing to the Procurement Contact and must be made within thirty (30) days of such notification. The intent of the debriefing information session is to aid the Proponent in presenting a better proposal in subsequent procurement opportunities. Any debriefing provided is not for the purpose of providing an opportunity to challenge the procurement process or its outcome.
	3.3.3
	Procurement Protest Procedure

If a Proponent wishes to challenge the procurement process, it should provide written notice to the Procurement Contact. The notice must provide a detailed explanation of the Proponent’s concerns with the procurement process or its outcome.
	3.4
	Conflict of Interest and Prohibited Conduct

	3.4.1
	Conflict of Interest

The Authority may disqualify a Proponent for any conduct, situation or circumstances, determined by the Authority, in its sole and absolute discretion, to constitute a Conflict of Interest, as defined in the Submission Form (APPENDIX B).
	3.4.2
	Disqualification for Prohibited Conduct

The Authority may disqualify a Proponent, rescind a notice of selection or terminate a contract subsequently entered into if the Authority determines that the Proponent has engaged in any conduct prohibited by this Procurement Document.
	3.4.3
	Prohibited Proponent Communications

Proponents must not engage in any communications that could constitute a Conflict of Interest and should take note of the Conflict of Interest declaration set out in the Submission Form (APPENDIX B).
	3.4.4
	Proponent Not to Communicate with Media

Proponents must not at any time directly or indirectly communicate with the media in relation to this procurement process or any agreement entered into pursuant to this Procurement Document without first obtaining the written permission of the Procurement Contact.
	3.4.5
	No Lobbying

Proponents must not, in relation to this Procurement Document or the evaluation and selection process, engage directly or indirectly in any form of political or other lobbying whatsoever to influence the selection of the successful Proponent.
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	3.4.6
	Illegal or Unethical Conduct

Proponents must not engage in any illegal business practices, including activities such as bid-rigging, price-fixing, bribery, fraud, coercion or collusion. Proponents must not engage in any unethical conduct, including lobbying, as described above, or other inappropriate communications; offering gifts to any employees, officers, agents, elected or appointed officials or other representatives of the Authority; deceitfulness; submitting proposals containing misrepresentations or other misleading or inaccurate information; or any other conduct that compromises or may be seen to compromise the competitive process provided for in this Procurement Document.
	3.4.7
	Past Performance or Past Conduct

The Authority may prohibit a company from participating in a procurement process based on past performance or based on inappropriate conduct in a prior procurement process, including but not limited to the following:
	(a)
	illegal or unethical conduct as described above;

	(b)
	the refusal of the company to honour its submitted pricing or other commitments; or

	(c)
	any conduct, situation or circumstance determined by the Authority, in its sole and absolute discretion, to have constituted an undisclosed Conflict of Interest.

	3.5
	Confidential Information

	3.5.1
	Confidential Information of the Authority

All information provided by or obtained from the Authority in any form in connection with this procurement process either before or after the issuance of this Procurement Document
	(a)
	is the sole property of the Authority and must be treated as confidential;

	(b)
	is not to be used for any purpose other than replying to this Procurement Document and the performance of any subsequent contract for the Deliverables, except as required by law or by order of a court;

	(c)
	must not be disclosed without prior written authorization from the Authority; and

	(d)
	must be returned by the Proponent to the Authority immediately upon the request of the Authority.

	3.5.2
	Confidential Information of Proponent

All proposals and other information submitted to the Authority in relation to this Procurement Document become property of the Authority and, subject to the provisions of the Freedom of Information Law (latest revision), will be held in confidence.
A Proponent should identify any specific information in its proposal or any accompanying
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Page 14 | 87

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documentation supplied in confidence for which confidentiality is expected to be maintained by the Authority. The confidentiality of such information will be maintained where it is legally protected, or by order of a court,
Proponents are advised that their proposals will, as necessary, be disclosed on a confidential basis to advisers retained by the Authority to advise or assist with the procurement process, including the evaluation of proposals. If a Proponent has any questions about the collection and use of any information, including personal information, pursuant to this procurement process, these should be submitted to the Procurement Contact.
	3.6
	Reserved Rights and Limitation of Liability

	3.6.1
	Reserved Rights of the Authority

The Authority reserves the right to
	(a)
	make public the names of any or all Proponents;

	(b)
	make changes, including substantial changes, to this Procurement Document provided that those changes are issued by way of addendum in the manner set out in this Section;

	(c)
	request written clarification or the submission of supplementary written information in relation to the clarification request from any Proponent and incorporate a Proponent’s response to that request for clarification into the Proponent’s proposal;

	(d)
	assess a Proponent’s proposal on the basis of: (i) a financial analysis determining the actual cost of the proposal when considering factors including quality, service, price and transition costs arising from the replacement of existing goods, services, practices, methodologies and infrastructure (howsoever originally established); and (ii) in addition to any other evaluation criteria or considerations set out in this Procurement Document, consider any other relevant information that arises during this procurement process;

	(e)
	waive formalities and accept proposals that substantially comply with the requirements of this Procurement Document;

	(f)
	verify with any Proponent or with a third party any information set out in a proposal;

	(g)
	check references other than those provided by any Proponent;

	(h)
	disqualify a Proponent, rescind a notice of selection or terminate a contract subsequently entered into if the Proponent has engaged in any conduct that breaches the process rules or otherwise compromises or may be seen to compromise the competitive process;

	(i)
	select a Proponent other than the Proponent whose proposal reflects the lowest cost to the Authority;

	(j)
	cancel this procurement process at any stage;

	(k)
	cancel this procurement process at any stage and issue a new Procurement Document for the same or similar deliverables;

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	(I)
	accept any proposal in whole or in part;

(m)reject any or all non-conforming, non-responsive, unbalanced or conditional proposals, or
(n)reject the proposal of any Proponent if the Authority believes that it would not be in the best interest of the Authority to make an award to that Proponent, whether because the proposal is not responsive or fails to meet any other pertinent standard or criteria established by Authority.
These reserved rights are in addition to any other express rights or any other rights that may be implied in the circumstances.
	3.6.2
	Limitation of Liability

By submitting a proposal, each Proponent agrees that
(a)neither the Authority nor any of its employees, officers, agents, elected or appointed officials, advisors or representatives will be liable, under any circumstances, for any claim arising out of this procurement process including but not limited to costs of preparation of the proposal, loss of profits, loss of opportunity or for any other claim; and
(b)the Proponent waives any claim for any compensation of any kind whatsoever, including claims for costs of preparation of the proposal, loss of profit or loss of opportunity by reason of the Authority’s decision to not accept the proposal submitted by the Proponent, to enter into an agreement with any other Proponent or to cancel this procurement process, and the Proponent shall be deemed to have agreed to waive such right or claim.
	3.7
	Governing Law and Interpretation

These Terms and Conditions of the Procurement Process (Part 3)
(a)are intended to be interpreted broadly and independently (with no particular provision intended to limit the scope of any other provision);
(b)are non-exhaustive and shall not be construed as intending to limit the pre-existing rights of the Authority; and
(c)are to be governed by and construed in accordance with the laws of the Cayman Islands.
[End of Part 3]
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APPENDIX A – CONDITIONS OF ENGAGEMENT
	1.
	INTRODUCTION

The Water Authority of the Cayman Islands (hereinafter called “the Authority”) intends to proceed with a project known as “Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021)”
The Sea Water Reverse Osmosis (SWRO) Plant shall be located at the Authority’s Red Gate Water Works at Red Gate Road, George Town, Grand Cayman, Cayman Islands, Block 20B, Parcel 410, property owned by the Authority.
The Plant shall have a design water production capacity of 10,000 cubic metres of potable water per day (2.64 million US gallons per day) and shall be designed in such a way that the production capacity is achieved by no less than two (2) independent RO trains.
The successful Contractor shall:
		a)
	design, plan, construct, install, and implement the Plant;

		b)
	operate and maintain the Plant for a period of ten (10) years and keep all plant equipment, instrumentation, processes, facilities, systems, and utilities in good condition and working order, and

		c)
	satisfy the demand for water, as determined by the Authority, up to the limit of the design water production capacity throughout the ten (10) year operating period.

All as further described in APPENDIX C, Section A (the “Deliverables”).
	2.
	ELIGIBILITY CRITERIA

Tenderers shall meet the following eligibility criteria in order to be considered and evaluated:
a.Tenderers must:
		i)
	either comply with all applicable local laws and regulations, including business regulations, including, but not limited to, having a Trade and Business license, and comply with the Local Companies (Control) Law (latest revision) and the Companies Law (latest revision), or

		ii)
	provide confirmation that they have sought independent legal and any other appropriate advice on all applicable local laws and regulations relating to carrying on business in the Cayman Islands and that if their tender is accepted, and they are the selected Proponent they will be in a position to comply with all such local laws and regulations within forty-five (45) days of the notice of selection (as per PART 2 — EVALUATION AND AWARD),

		b.
	Tenderers must provide Past Performance Data and References for at least three (3) similar SWRO plants, each with a design water production capacity of not less than 2,500 m3/d (0.66 MGD) (at least one of which must have a design water production capacity of not less than 5,000 m3/d (1.32 MGD)) which use commercially available isobaric energy recovery devices, that will confirm that the company has successfully designed, constructed and continuously operated these SWRO plants for a period of not less than seven (7) years. Prior experience with SWRO plants using (saline groundwater containing hydrogen sulphide) feed water wells rather than sea water intakes will be an advantage. The Past Performance Data shall clearly identify and describe these SWRO plants and the Tenderer’s involvement. The

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ability of a Tenderer to show an operational plant under an agreement, similar to this one, will be advantageous.
		c.
	Tenderers must provide their Corporate Information which shall include, as a minimum, the following:

		1.
	Certificate of Incorporation.

		2.
	Memorandum and Articles of Association.

		3.
	Copy of any Shareholders’ or Partnership Agreement(s).

		4.
	The Proponent’s contact for the procurement process (complete APPENDIX B - SUBMISSION FORM)

		5.
	Certified copy of board resolution or minute approving the submission and contents of the Tender.

		6.
	For a Joint Venture also add a copy of the joint venture agreement between or among the joint venture parties.

		i.
	Tenderers shall provide references for each firm participating in a Joint Venture or teaming arrangement, and specifying what each firm will contribute to that arrangement

		7.
	Audited financial statements for the last five (5) years or such other documentation that can be independently verified.

		d.
	Tenderers must provide the name(s) and resume(s) of the intended principal(s) that will be employed full-time on Grand Cayman to oversee and manage the operations for a minimum of the first three (3) years after the First Delivery Date

		1.
	All such principals shall have an Engineering degree and at least seven (7) years’ experience with operating and maintaining SWRO plants with isobaric energy recovery systems.

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3. CONDITIONS OF CONTRACT
Definition of Terms
	1.
	The following words shall have the meanings herein assigned to them unless there is something in the subject matter or context inconsistent with such construction.

The “Agreement” shall mean the agreement between the Authority and the Contractor incorporating these Conditions of Contract (including Appendices A through J) and the Contract Drawings included in APPENDIX K;
The “Agreement Date” shall mean the date of the Agreement;
The “Authority” shall mean the Water Authority of the Cayman Islands incorporated by the Water Authority Act, and of P.O. Box 1104, Grand Cayman KY1- 1102; and shall be deemed to include, where appropriate, its duly authorized representatives or agents;
“Clcurrent” shall mean on any given date the Cayman Islands Consumer Price Index on the previous 30 September;
The “Conditions of Contract” shall mean these Conditions;
The “Contract Drawings” shall mean the Drawings referred to in the Agreement and included in APPENDIX K;
The “Contractor” shall mean the Contractor whose tender has been accepted by the Authority and shall include the Contractor’s legal personal representatives, successors and assigns;
A “Critical Spare” shall mean those Plant parts that are essential to meet the conditions of the Agreement, in particular the delivery requirements for Water, as defined in APPENDIX J.
A “cubic metre” shall mean a cubic metre of volumetric measure, and for the purposes of the Agreement shall be deemed equal to 264.2 US gallons;
The “Delivery Point” shall mean the location of the sampling tap adjacent to the Authority’s totalizing flow meter provided under Clause 47, at which point the ownership of and responsibility for the Water passes to the Authority;
The “Electrical Conductivity” (E.C.) shall mean the parameter used to determine the salt content (or total dissolved solids level) of the Water as measured using an Electrical Conductivity sensor, normalized to a specific reference temperature (25°C or 77°F), calibrated in accordance with the manufacturer’s recommendations using standards appropriate for the Water, and measured in units of micro-Siemens/centimetre (μS/cm);
“Ecurrent” shall mean on any given date the actual average cost of electricity (CI $/kWh), provided by Caribbean Utilities Company Ltd., and consumed by the Plant for the month under consideration, expressed in four (4) decimals of Cayman Islands dollars per kWh. For the avoidance of doubt, the actual average cost of electricity is calculated as the total cost of electricity during the previous month divided by the total number of kWhs of electricity consumed by the Plant. This calculation shall be substantiated by monthly invoices (i.e., CUC bills) which shall reflect the quantity (in kWhs) and cost (in CI$) of electricity supplied in the previous month;
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“ENCONspec” shall mean the specific energy consumption of the Plant and shall be deemed to mean the number of kWh of electric power required by the Plant to produce one (1) cubic metre of potable water, and deliver it to the Reservoir, as specified by the Contractor in Item No. 7 of the completed Schedule of Fees (in the Appendix to the Agreement). This shall be deemed to include all ancillary electricity usage (i.e., for air-conditioning, area lighting of the administration offices, product water pumps, etc.);
The “Exchange Rate” shall mean at any time during the Term the buying rate for Cayman Islands dollars (Cl$), using United States dollars (US$), as charged by the Cayman National Bank and Trust Company Limited on the date of the Invoice. (Please note that at present the exchange rate is fixed, and is CI$ 1.00 = US$ 1.20);
The “First Delivery Date” shall mean the date upon which the Contractor first demonstrates the ability of the Plant to deliver to the Reservoir a quantity of 10,000 cubic metres of Water within a period of 24 hours, at the ENCONspec, and which meets the specified quality requirements;
“Membrane” shall mean the complete reverse osmosis membrane assembly, comprising the membrane, membrane supports, flow distribution channels, provisions for brine and product outlets, and pressure vessels. The membranes shall be specifically designed for the production of potable water from seawater and/or brackish water using the reverse osmosis process. The membranes shall offer high salt rejection, high flux rates, and long life.
A “Non-Critical Spare” shall mean those Plant parts that are not essential to meet the conditions of the Agreement, in particular the delivery requirements for Water, as defined in APPENDIX J.
“Penalty” shall mean the stipulated sum to be paid by the Contractor to the Authority in the event of a breach.
The “Plant” shall mean all or any part of the mechanical, electrical and other equipment and all or any part of the civil engineering works including appurtenances which are in the possession of the Contractor and used by the Contractor to provide feed water, purify sea water and convey water to the Reservoir, more particularly described in Clauses 4 through 23;
“Quantity” shall mean the actual quantity of Water, measured in cubic metres, in accordance with Clause 47, delivered to the Authority by the Contractor;
The “Reservoir” shall mean the Authority’s water storage reservoir or reservoirs, located on the Site;
The “Site” shall mean Registration Section George Town Block 20B, Parcel 410 being the Red Gate Water Works located at Red Gate Road, George Town, Grand Cayman;
The “Term” shall mean the term of the Agreement as provided for in Clause 35;
“UScurrent” shall mean on any given date the last published US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data) on the previous 30 September;
“Water” shall mean potable water processed by the Contractor from sea water and delivered to the Authority in accordance with the terms of this Agreement.
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	2.
	The Contractor

		(a)
	shall be deemed to have satisfied himself as regards existing roads or other means of communication with and access to the Site, the affecting contours thereof, the risk of injury or execution of the damage to the property adjacent to the Site, or the occupiers of such property, the nature of the materials (whether natural or otherwise) to be excavated, the conditions under which the construction of the plant are to be carried out, the supply of and conditions affecting labour, the facilities for obtaining any things and generally to have obtained his own information on all matters affecting the execution of the construction and operation of the plant.

		(b)
	shall not be permitted to make any claim for additional payment on the ground of any misunderstanding or misinterpretation by him of the terms of the Agreement nor shall the Contractor be released from any risks or obligations imposed or undertaken by him under the Agreement on any matter which might affect or have affected the execution of the construction and operation of the Plant.

Scope of Works
	3.
	The Contractor shall be responsible for all costs (i.e., labour, plant and materials) associated with the design, planning, construction, installation, and implementation of the Plant and for any and all associated or ancillary costs. All equipment incorporated in the Plant shall be new and unused.

	4.
	The Contractor shall provide a seawater reverse osmosis plant with a Water production capacity of 10,000 cubic metres per day (2,642,000 US gallons per day) (hereinafter also referred to as the design capacity of the Plant). The Water production capacity shall be provided by at least two (2) individual and fully independent units (or trains). At least one unit (or train) shall be capable of being operated using an emergency generator.

	5.
	The Plant shall incorporate all pre-treatment and post-treatment necessary to achieve the standards laid down in the Agreement. This shall include all monitoring and recording equipment necessary to determine the current condition and operational states of all parts of the Plant including quality of the product and reject water. The Plant shall consist of:

		(a)
	An electricity-driven sea water reverse osmosis plant, including isobaric energy recovery systems and a computer-based control system, including all civil engineering works and ancillary erections.

		(b)
	A reinforced concrete or concrete-block building to house the Plant, a workshop and stores. The building shall be of adequate size to house all equipment required for the water production capacity of 10,000 cubic metres of Water per day, with adequate clearances between and around the equipment to facilitate ease of maintenance. The building shall also include an adequate washroom and toilet facilities for the Contractor’s personnel.

		(c)
	All feed water pumps, controls and associated civil engineering works of adequate capacity to provide the Plant with sufficient feed water to produce 10,000 cubic metres of Water per day.

		(d)
	All disposal facilities including pumps, controls and associated civil engineering works to dispose of all effluent brine produced by the Plant in accordance with the Agreement. The brine disposal well shall also accept the scrubber blow-down and the flow from the floor drains in the Plant building, unless other arrangements have been made and for which the Authority has given its written consent.

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		(e)
	All pumps, controls and civil engineering works to transfer 10,000 cubic metres of Water per day from the Plant to the Reservoir. The systems shall be designed to allow the flow of Water from the Plant to be stopped by the Authority without prior notice and without causing any adverse effects to the Plant.

		(f)
	Motor speed control via variable-frequency drives (VFD’s) shall be provided for the feed water pumps, high-pressure pumps, booster pumps, and second-pass pumps to ensure maximum operational flexibility. The associated pump motors shall be designed for use with Variable Frequency Drives (VFDs).

		(g)
	An air stripping tower and wet gas scrubber to remove hydrogen sulphide from the product water and the process air stream respectively, in accordance with the Agreement. The air stripping tower and wet gas scrubber shall be designed for the water production capacity of 10,000 cubic metres per day. Sampling taps shall be provided upstream and downstream of the air stripping tower.

		(h)
	A waste water dump system, monitored and controlled by conductivity and pH sensors, to divert the product water to the brine disposal wells whenever the quality of the product water does not meet the specified quality.

		(i)
	A small pump station to receive all waste water from the washroom and toilet facilities.

		(j)
	An emergency generator sized to operate at least one (1) unit (or train), including all requisite pumps (including the pumps and blowers for the air stripping tower and wet gas scrubber), controls, building lights, air-conditioning etc. The emergency generator shall be equipped with a manual transfer switch, and a fuel storage tank (of double-wall design) with adequate capacity to provide at least 72 hours supply. The generator fuel storage system (tank, piping, and accessories) shall comply with NFPA 30 and NFPA 37.

		(k)
	Any other necessary and reasonable works or equipment that the Contractor is of the opinion shall be required to operate efficiently within the terms and conditions of the Agreement.

	6.
	The Contractor shall provide and maintain the drilled feed water (abstraction) well or wells. The capacity of all feed water wells combined shall be sufficient to provide the full feed water flow required for the design production capacity of the Plant. All well drilling procedures shall be in strict compliance with the requirements as set out in APPENDIX G. The feed water wells shall be operated in strict compliance with the requirements as set out in APPENDIX H. Each feed water well shall be equipped with a sampling tap.

	7.
	The Contractor shall install all pipes and fittings between the feed water (abstraction) wells and the Plant building.

	8.
	The Contractor shall provide, joint and install all pipes and fittings for the product water between the Plant building and the product water pipeline as provided by the Authority in compliance with Clause 29 at the product water pipeline connection point as indicated on the Contract Drawings.

	9.
	The Contractor shall provide and maintain one (1) drilled brine disposal well of adequate capacity to accept the quantity of brine water generated by the Plant. All well drilling procedures shall be in strict compliance with the requirements as set out in APPENDIX G. The brine disposal well shall be operated in strict compliance with the requirements as set out in APPENDIX H. The brine disposal well shall be equipped with a sampling tap.

	10.
	The Contractor shall provide, joint and install all pipes and fittings for the brine between the Plant building and the brine pipeline connection point as provided by the Authority in compliance with Clause 29 and as indicated on the Contract Drawings.

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	11.
	The Contractor shall provide and maintain the feed water well pumps, motors and controls. The duty well pump or pumps shall be capable of providing at least 100% of the feed water required for the design capacity of the Plant. The feed water well pumps shall be submersible pumps. The submersible pump and motor casing shall be constructed of 316SS construction (or better).

The Contractor shall provide and install the underground power and control cables (between the feed water wells and the Plant building) in suitably sized electrical ducts, and in strict compliance with the applicable NEC code requirements.
	12.
	The Contractor shall provide and maintain the product water pumps, motors and controls. The duty product water pump or pumps shall be capable of delivering at least 100% of the design capacity of product water to the storage Reservoir. A sampling tap shall be provided immediately downstream of the product water pumps.

	13.
	The Contractor shall provide and maintain the brine disposal pumps, motors and controls, if required by the Plant. The duty brine disposal pump or pumps shall be capable of disposing all effluent brine produced by the Plant into the brine disposal well.

	14.
	The Contractor shall provide and maintain all disposal wells, floor drains, gutters and down-spouts, waste drains, and all other pipework (such as for the scrubber blow-down, diverted product water, brine etc.). The Contractor shall ensure that no waste materials (e.g., oil, grease, chemicals) other than brine, scrubber blow-down, membrane cleaning solutions and diverted product water are discharged in the brine disposal well.

	15.
	The Contractor shall provide a small wastewater pump station to receive all waste water from the Plant building’s washroom and toilet facilities, and shall provide, joint and install all pipes and fittings

		(a)
	between the Plant building and this wastewater pump station, and

		(b)
	between this wastewater pump station and the sewer connection point as indicated on the Contract Drawings.

The wastewater pump station shall be provided with two (2) grinder pumps (one duty pump and one stand-by pump with an automatic change-over relay) with SS guide-rails for ease of maintenance of the pumps.
The Contractor shall ensure that only domestic wastewater is discharged into this wastewater pump station.
	16.
	The Contractor shall provide, and submit proven performance records for, all proposed pumps (i.e., high pressure pumps, second pass pumps, feed water well pumps etc.), motors and Membranes. All pumps shall be electricity-driven. Diesel-driven pumps shall not be allowed.

	17.
	The Contractor shall provide detailed design drawings of the Plant which are certified by a professional engineer, and an affidavit which specifies the operating pressures of Membranes and any other pertinent data on the Plant equipment as shall be determined by the Authority.

	18.
	The Contractor shall within 60 days of the Agreement Date provide the necessary drawings, standards and specifications for the Plant and the required civil works (including foundations and buildings), all in sufficient detail for the Authority to approve them.

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	19.
	The Contractor shall be responsible for procuring, and paying all costs associated with, all requisite permissions and approvals as required by the Planning Department, the Building Control Unit, the Electrical Inspector, the Plumbing Inspector, and any other Government Department, for the construction of the Plant. The Authority shall provide reasonable assistance to the Contractor in procuring Planning permission.

	20.
	The Contractor shall be responsible for the provision and installation of the underground electrical duct and cable between the Plant and the transformer, and for the connection of the secondary of the transformer to the main disconnect at the Plant building. The secondary power supply shall be 480 Volts, 3 phase, 60 Hertz. The Contractor shall be responsible for the provision and installation of the electrical totalizing meter, any other necessary transformers, the main circuit breaker, and all internal electrical wiring. The main electrical service entrance for the Plant shall be designed and constructed for the water production capacity of 10,000 cubic metres of Water per day. The Contractor shall be responsible for the connection of the generator to the manual transfer switch. The emergency generator shall be situated in the vicinity of the Plant building (and within the area designated for the equipment slabs as shown on the Contract Drawings).

	21.
	The Contractor shall operate the Plant so as to minimize the environmental impact on the surrounding residential area. The building in which the Plant shall be housed shall be constructed with due consideration for the reduction of noise and odour emissions and in doing so the Contractor shall conform to good and commonly accepted standards within the building industry for such applications, but in any event shall comply with the following requirements:

		(a)
	The Contractor shall conform to the requirements of the Central Planning Authority of the Cayman Islands.

		(b)
	The Contractor shall design the building and operate the Plant so that the noise emissions shall contribute no more than 50 dB(A) to the normal sound level at a distance of 50 feet from the Plant building. The noise emission limitation shall apply only during “normal” operation of the Plant and shall not apply during the operation of the emergency generator.

		(c)
	The Contractor shall design, build and operate a wet gas scrubber in such a way that the percentage of removal of hydrogen sulphide in the wet gas scrubber is at least 99%. In any event the concentration of hydrogen sulphide emissions shall not exceed 0.01 ppmv at a distance of 50 feet from the Plant building.

		(d)
	The building and ancillary works shall be designed and built in strict accordance with the SBBCI Standard Building Code to withstand hurricane force wind loadings (150 mph maximum wind velocity).

		(e)
	The finished floor elevation of the Plant building shall be at least thirty (30) inches above the existing site elevation.

		(f)
	The Plant and Plant building shall be designed to withstand the corrosive effects of both the natural environment and the reverse osmosis process, and more specifically:

		i.
	Walls shall be concrete block or reinforced concrete.

		ii.
	Plant building shall have a reinforced concrete roof.

		iii.
	Exposed metal roof beams, exposed permanent metal formwork and/or exposed metal columns shall not be allowed.

		iv.
	All doors shall be constructed of corrosion resistant material (e.g., stainless steel, fibreglass)

		v.
	The motor control centres (MCCs), data acquisition and control equipment shall be located in an air-conditioned area.

		vi.
	High-pressure piping shall be electropolished and passivated 316SS, or better.

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		vii.
	All mounting hardware (e.g., bolts, nuts, non-wetted flanges) shall be at least 316SS.

		viii.
	Membrane vessels shall meet or exceed the applicable ASME Boiler and Pressure Vessel Code (BPVC) Section X (fiber-reinforced plastic pressure vessels) specification.

		ix.
	The isobaric energy recovery system shall be PX® Pressure Exchanger® (PX) units as manufactured by Energy Recovery.

If it is proven to the satisfaction of the Authority that the Plant is not operating within the allowable noise and hydrogen sulphide emission levels the Authority may stop the operation of the Plant until such time as the Plant is able to operate within the allowable emission levels. The Authority shall not be responsible for any loss, cost or expense that this might cause to the Contractor.
	22.
	The Contractor shall provide an adequate security fence around any hazardous equipment and chemical storage not contained within the Plant building. All chemical storage shall be provided with secondary containment protection. Incompatible chemicals (e.g., acids and caustic solutions) shall be stored in separate areas. The Contractor shall ensure that all equipment and chemicals are locked to prevent tampering. (All chemical storage shall be within the area designated for the equipment slabs as shown on the Contract Drawings).

Before the First Delivery Date, the Contractor shall provide the Authority with a Waste Management Plan for all chemicals, lubricants, fuels and any other hazardous materials used in the Plant, for approval by the Authority, as per APPENDIX I.
	23.
	The Contractor shall operate the Plant in a workmanlike and efficient manner, and shall meet all costs of and associated with its operation and maintenance.

The Plant shall be designed to operate unattended, with automatic notification (i.e., using auto-dialer equipment) to on-call operating personnel in the event of failure of the Plant. Unattended operation shall include the automatic shut-down of the Plant immediately following the occurrence of major operating problems, such as pipe breakages, malfunctioning of the air stripper and/or wet gas scrubber, or other problems which result in one or more of the constituents of Water significantly exceeding the values set out in APPENDIX F.
	24.
	The Contractor shall provide all chemicals, filter cartridges, replacement membranes, replacement parts and other consumables.

Insurance
	25.
	The Contractor shall keep the Authority wholly indemnified from and against any act loss damage or liability suffered or incurred by the Authority or any third party in or arising out of the exercise by the Contractor of the rights or wayleaves (see Clauses 32 and 34) or the operation of the Plant.

	26.
	Without prejudice to the generality of Clause 25 the Contractor shall within 60 days of the Agreement Date insure in the joint names of the Contractor and the Authority against liability for damage or injury to any person (including any employee of the Contractor or the Authority) or to any property due to or arising out of the construction or operation of the Plant or the exercise by the Contractor of any rights or wayleaves (provided as per Clauses 32 and 34). Such insurance shall be effected for an amount not less than one million United States dollars (U.S. $1,000,000.00) per claim with an insurer and in terms to be approved in writing by the Authority. The Contractor shall from time to time when so required by the Authority produce the

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policy and the receipts for the premiums or other satisfactory evidence of insurance cover as aforesaid.
27.
		(a)
	In addition to the insurance referred to in Clause 26, the Contractor shall within 60 days of the Agreement Date to the end of the Term or earlier termination of the Agreement, insure or cause to be insured in the joint names of the Contractor and the Authority against loss or damage caused by fire, lightning, explosion, aircraft (including articles dropped from aircraft), earthquake, shock, hurricane, flood, riot, civil commotion, malicious persons, overflowing of water pipes, tanks and other apparatus, impact by road vehicles and such other insurable risks against which a reasonable and knowledgeable contractor would insure. Such insurance shall be in an amount equal to the full cost of reinstating the plant (or such part of the plant as shall from time to time have been carried out) in the event of their total destruction together with the cost of demolition, site clearance, architects’ and other professional fees.

		(b)
	All insurances referred to in this clause and in Clause 26 shall be effected with insurers previously approved in writing by the Authority, such approval not to be unreasonably withheld or delayed.

		(c)
	The Contractor shall pay or procure the payment of all premiums and other money necessary to effect and maintain all insurances referred to in this clause, and shall produce to the Authority on demand the policy or policies of insurance and the receipt or receipts for the then current year’s premium.

		(d)
	If the Contractor shall fail to insure or to procure the insurance in accordance with this clause then the Authority may (but without prejudice to any other right or remedy of the Authority in respect of such failure) itself effect and maintain such insurance and all premiums and other money paid by the Authority for such purpose shall be repaid by the Contractor to the Authority on demand with interest at the rate which the Cayman National Bank and Trust Company Limited would pay for a call deposit of such amount on the date of payment by the Authority, until the date of repayment by the Contractor.

		(e)
	The Contractor shall comply with all requirements of the insurers and neither the Authority nor the Contractor shall do or permit or suffer to be done on the Site or in relation to the Plant anything which might render void or voidable any policy of insurance effected in accordance with the provisions of this clause, or as a result of which payment of the policy money might be withheld in whole or in part.

		(f)
	The Contractor shall notify the Authority immediately upon the occurrence of any damage or destruction of the plant and in any such case promptly reinstate the plant.

		(g)
	All money received under any policy of insurance effected in accordance with this clause shall be placed in a bank account in the joint names of the Authority and the Contractor and shall subsequently be released to the Contractor from the account in instalments against certificates issued by an Architect, or other evidence acceptable to the Authority (such acceptance not to be unreasonably withheld) of expenditure actually incurred by the Contractor in reinstating the plant.

Items To Be Provided by the Authority
	28.
	The Authority shall provide the Reservoir with a total minimum Water storage capacity of 20,000 cubic metres in the vicinity of the Plant. The Reservoir shall be provided with an altitude valve on the fill line which will close without notice once the shut-off point in the Reservoir is reached. The Authority shall provide a connection on the Reservoir for the Contractor’s level measuring equipment.

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The Authority shall manage the Reservoir in such a manner to ensure that the head required at the outlet of the Contractor’s flow meter, provided for under Clause 47, shall not exceed 18 meters (60 feet) at design capacity (10,000 cubic metres per day product water), unless the Reservoir is full and the altitude valve on the fill line is closed.
	29.
	The Authority shall provide the following:

		(a)
	a pipeline for the product water from the Plant building to the Reservoir.

		(b)
	a pipeline for the brine from the Plant building to the brine disposal well.

Both the product water pipeline and the brine pipeline provided by the Authority shall be 12-inch PVC pipe to ASTM D2241 SDR 26 (160), installed with approximately 30 inches ground cover. The Contractor shall join his pipework at the respective connection points as indicated on the Contract Drawings.
The Authority shall install all pipes and fittings between the existing brine pipeline, provided by the Authority in compliance with Sub-Clause 29 (b), and the brine disposal well, provided by the Contractor in compliance with Clause 9.
	30.
	The Authority shall arrange for the provision and installation of a suitably sized electrical transformer in the vicinity of the Plant, as indicated on the Contract Drawings, at no cost to the Contractor. The Authority shall be responsible for the connection of the primary side of the transformer to the mains power. The secondary power supply shall be 480 Volts, 3 phase, 60 Hertz.

	31.
	All items to be provided by the Authority pursuant to Clauses 28, 29, 30, 34(b) and 47 shall be maintained at the expense of the Authority throughout the Term.

	32.
	The Authority shall procure for the Contractor all requisite approvals and/or licences to carry out the abstraction of water from wells, the disposal of all brine produced by the Plant, and to continuously operate the Plant without the necessity of paying or applying for any further licence or approval during the Term.

	33.
	The Authority shall be responsible for performing and paying all costs associated with the disinfection and pH stabilization of the Water, and the distribution of the Water from the Reservoir.

34.
		(a)
	Immediately after the Agreement Date, vacant possession of the Site shall be given to the Contractor, and the Contractor shall have licence and authority to enter upon the Site for the purpose of the construction of the Plant in accordance with the plans approved by the Central Planning Authority.

		(b)
	The Authority shall provide all roads, paving, walkways and similar works on the Site.

Term of Agreement
	35.
	This Agreement shall commence on the Agreement Date and shall, subject to the provisions for termination contained herein, continue for a period of ten (10) years from the First Delivery Date.

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Feed Water Quality
	36.
	The composition of well water, as indicated in the analyses shown in APPENDIX E, is provided for information only. The Contractor shall have fully informed and satisfied himself by his own independent observations and inquiries as to the composition of the ground water, and any variation thereof. The Contractor shall not be entitled to negotiate a change in the Agreement in the event that his own independent analysis of the feed water differs from that shown in APPENDIX E, and that this difference has an effect on the operation of the Plant, unless the Contractor can provide evidence that shows that this change is due to un-natural causes (e.g., increase in temperature due to third parties injecting heated water into the ground; contamination of the groundwater).

Electric Power Supply
	37.
	During the Term the Authority shall enter into an electricity supply agreement with the electricity provider (Caribbean Utilities Company (CUC) for the Plant and shall pay, on behalf on the Contractor, the monthly invoices (i.e., CUC bills) in accordance with the supply agreement.

	38.
	In the event of an interruption in the electrical power supply occurring through no fault of the Contractor, the provisions of Clause 79 in respect of penalties shall not be applied in respect of the quantity lost owing to the interruption of electrical power. However, the Water Authority shall not be responsible for, nor pay for, any losses to the Contractor caused by any interruption to the supply of electricity.

	39.
	All apparatus and wiring shall be suitable for use with a three phase, three live wires one neutral wire 480 Volts, 60 Hertz neutral ground supply system.

Critical Spares Inventory
	40.
	The Contractor shall maintain an inventory of Critical Spares throughout the Term. Critical Spares and other Mandatory Spares, as detailed in APPENDIX J, shall be held in a suitable storage facility on or near the Site, and shall be immediately re-ordered when used. The Contractor shall, within 120 days of the Agreement Date, submit to the Authority a list of spare parts to be stored on Grand Cayman

	41.
	If the Contractor shall fail to purchase some of the Critical Spares used at the Plant in accordance with clause 40, then the Authority may itself purchase such items and any money paid by the Authority for such purpose shall be deducted from any money owed to the Contractor in the month following the date of payment for such items by the Authority.

	42.
	At the end of the Term, unless the Agreement is terminated as per Clause 85 or 86, the Authority shall purchase all Critical Spares; the Purchase Price of Critical Spares shall be the Invoice Value (substantiated with copies of invoices) less depreciation since the date of purchase. For the purpose of this clause a depreciation rate of 10% per annum shall apply.

	43.
	In the event the Agreement is terminated as per Clause 85 or 86, all Critical Spares shall become the property of the Authority without further payment.

	44.
	At the end of the Term, Non-Critical Spares, chemicals and supplies may be purchased by the Authority, at a price to be agreed between the parties.

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Quantity of Water Produced
	45.
	On the demand of the Authority the Contractor shall supply to the Authority in any one month an average daily quantity of Water of 9,000 cubic metres per day, which is 90% of the specified design capacity of the Plant.

	46.
	The Authority shall not be responsible for any variations in demand nor any additional or associated costs that may be incurred by the Contractor in meeting a higher or lower, or any, demand within the limits of the Plant. The Authority shall take all reasonable steps to perform its obligations under the Agreement in a timely manner and so as not to hinder or delay the Contractor in the discharge of the Contractor’s obligations under the Agreement.

	47.
	Water delivered to the Delivery Point shall be measured by means of a totalizing magnetic flow meter, i.e., a Rosemount Flow Tube Series 8700, 250mm (10 inch) nominal diameter with metric registration, or similar. Water pumped by the Plant shall be measured by an identical magnetic flow meter, installed downstream of the product water pumps. The register of the Plant flow meter shall be easily accessible by the Authority, without the need to access the Plant building. Both flow meters shall be provided by the Authority and shall be installed as recommended by the flow meter manufacturer. At the end of each measurement period both meters will be read simultaneously and the average value of these two readings shall be deemed to be the Quantity for that period. However, if it is evident that one of the meters is malfunctioning then the other meter’s registration shall be deemed correct. The meters shall be regularly maintained and checked by an independent agency approved by both parties. The Authority shall keep in stock one spare meter identical to that in operation which shall be used during the maintenance periods of the operational meter. The Authority shall be responsible for the maintenance of the pipeline between the totalizing flow meters and any leakage that the Contractor can prove took place in this pipeline shall be included in the Quantity. However, any difference between the accumulated readings of each meter shall not, on its own, constitute such proof.

Maintenance of the Plant
	48.
	The Contractor shall satisfy the demand for Water as determined by the Authority to the limit of the design capacity of the Plant, taking due and reasonable allowance for maintenance time for the Plant, ensuring that scheduling of any intended maintenance is notified to the Authority, it being accepted that the Contractor shall wherever possible carry out maintenance of the Plant at a time convenient to the Authority.

	49.
	The Contractor shall be allowed to make modifications to the Plant to improve performance, reduce operating cost, and/or improve the maintainability of the Plant, with the prior consent of the Authority in writing. All costs associated with these modifications shall be to the Contractor’s account.

	50.
	Throughout the Term the Contractor shall ensure that all replacement and spare parts shall be equal or better in substance, quality and function than those included in the initial Plant design, which was submitted to and approved by the Authority as per Clauses 16 through 18.

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Quality of Water Produced
	51.
	The Contractor shall only deliver Water to the Delivery Point which shall have an Electrical Conductivity (E.C.) of no more than 400 μS/cm, as determined by the Authority, and otherwise shall meet the requirements of Clause 55.

	52.
	The Contractor shall ensure that the Water is not contaminated by any noxious chemical or other substance which in the opinion of the Chief Environmental Health Officer would be harmful to the health of the community or any chemical or substance that imparts odour, taste or colour which in the opinion of the Authority renders it unacceptable to its customers.

	53.
	The Authority shall regularly monitor the quality of Water at the Delivery Point and shall be entitled at any reasonable time and without prior notice to take samples of Water or effluent from the Plant. The Authority shall provide the Contractor with the results of all such tests.

	54.
	Notwithstanding the above the Contractor shall continuously monitor the Electrical Conductivity (E.C.) and provide, maintain and calibrate the monitoring equipment.

	55.
	The quality of the Water at the Delivery Point shall be such that the individual constituents shall not exceed the allowable values as set out in APPENDIX F.

	56.
	The Contractor shall ensure that all materials and equipment upstream of the Delivery Point that come into contact with the Water are clean and all such equipment shall be approved by the American Water Works Association (AWWA) or National Sanitation Foundation (NSF) for use with potable water.

	57.
	The Contractor shall ensure that all chemicals used in the Plant that come in direct contact with the Water shall be approved by the American Water Works Association (AWWA) or National Sanitation Foundation (NSF) for use with potable water. No later than 6 months after the Agreement Date, the Contractor shall submit a detailed list of all chemicals to be used in the Plant, accompanied by relevant data sheets, to the Authority for approval. The Contractor shall submit a revised list immediately following any change of chemicals to be used in the Plant.

	58.
	In the event of Water being delivered to the Reservoir which has been contaminated upstream of the Delivery Point by any noxious or dangerous chemical or substance, the Contractor shall bear the full cost of any claim on or against the Authority due to or arising out of such contamination and the cost of cleansing the Reservoir and works from any such contamination, and the cost of all water wasted as a consequence of the contamination. The latter shall be calculated as the sum of the Quantity Fee (calculated as per Clause 71) and the Energy Fee (calculated as per Clause 73) for each cubic metre of Water wasted. The Authority and the Contractor shall make every effort to remedy any problem without delay but their works shall only be reopened on certification of the Authority. Any efforts by the Authority to cooperate with the Contractor in rectifying any contamination problem shall not be construed as a waiver of the right to terminate under Clause 85 or any other Clause of this Agreement.

Performance Testing
59.
		(a)
	Commencing on the First Delivery Date, and thereafter at intervals as determined by the Authority (which shall not be more frequent than once every three (3) calendar months), the Contractor shall demonstrate that over a 24-hour period, or any shorter period as may

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be determined by the Authority, the Plant can produce Water at the specified rate of 417 cubic metres per hour (10,000 cubic metres per day) at the ENCONspec, and which meets the quality requirements.
		(b)
	Commencing on the First Delivery Date, and thereafter once every calendar month, the Contractor shall test the operation of the emergency generator under load for a period of no less than two hours and no more than twenty-four hours as determined by the Authority.

	60.
	The Contractor and the Authority shall agree on a procedure for the performance testing, as specified in sub-clause 59(a), which shall be designed to minimize the amount of manual activity by each party and shall include the method of calibration of the relevant instruments. During the performance tests the membrane elements shall not be operated at a feed pressure exceeding the maximum pressure allowed by the membrane element manufacturer, or exceeding the operating pressures indicated in the professional engineer’s certificate for the Plant design, provided as per Clause 17.

	61.
	In the event that the performance tests are not successfully performed at any time after the First Delivery Date, subject to Force Majeure (see Clause 107) or acts of the Authority, the Contractor shall be subject to a daily penalty of Cl$ 5,000.00 until such time that the test is successfully performed.

Notwithstanding the above, no penalty shall be charged in the event the results of the performance test are within 2% of the relevant production rate, quality requirements and the ENCONspec, and the performance test is successfully performed within 48 hours after the initial, unsuccessful, performance test.
Sale of Plant
	62.
	The Authority agrees to purchase the Plant from the Contractor. The purchase price shall be the amount or amounts indicated in the Schedule of Fees, Items 1 and 2, of the Appendix to the Agreement, to be paid in accordance with the provisions of Clause 63.

The purchase price of the Plant may consist of two (2) elements:
		(a)
	A portion of the purchase price for expenses incurred outside the Cayman Islands, expressed in United States dollars (“US $”).

		(b)
	A portion of the purchase price for expenses incurred locally, expressed in Cayman Islands (“Cl $”) dollars.

	63.
	The purchase price of the Plant shall be paid by the Authority as follows:

		(a)
	90% of the purchase price after the First Delivery Date, and after it has been confirmed that the Contractor has the full inventory of Mandatory Spares, as specified in APPENDIX J, in a suitable storage facility on or near the Site, and

		(b)
	10% of the purchase price, twelve (12) months after the First Delivery Date/ 

Payments
	64.
	Payments by the Authority to the Contractor for the Water shall consist of three (3) elements – 

(a) a Monthly Overheads Fee, for each calendar month (see Clauses 65 through 68), plus
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		(b)
	a Quantity Fee, based upon the Quantity delivered each calendar month (see Clauses 69 through 72), plus

		(c)
	an Energy Fee, based upon the Quantity delivered each calendar month, and based upon the specific energy consumption guarantee (ENCONspec) and the actual average cost of electricity Ecurrent (see Clauses 73 through 75).

Monthly Overheads Fee
	65.
	The Authority shall pay the Contractor a Monthly Overheads Fee which shall cover:

		(a)
	Staff salaries

		(b)
	Accident and Public Liability Insurance

		(c)
	On-site spare parts

		(d)
	General Administration

		(e)
	Any other costs the Contractor may deem necessary

	66.
	The Base Monthly Overheads Fee consists of a United States dollar amount (US $) and a Cayman Islands dollar amount (CI $).

		(a)
	The United States dollar portion of the Base Monthly Overheads Fee covers expenses incurred outside the Cayman Islands, expressed in United States (“US $”) dollars, adjustable for inflation.

		(b)
	The Cayman Islands dollar portion of the Base Monthly Overheads Fee covers expenses incurred locally, expressed in Cayman Islands (“Cl $”) dollars, adjustable for inflation.

The Base Monthly Overheads Fee shall be the amount or amounts indicated in the Schedule of Fees, Items 3 and 4, of the Appendix to the Agreement.
	67.
	Beginning on the First Delivery Date, and on every 1st January thereafter, the Monthly Overheads Fee shall be calculated as follows:

		(a)
	The United States dollar portion of the Monthly Overheads Fee shall be:

“Amount of Sub-Clause 66 (a)” x (UScurrent / 208.1)
(Note: “208.1” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted – Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2020)
		(b)
	The Cayman Islands dollar portion of the Monthly Overheads Fee shall be:

“Amount of Sub-Clause 66 (b)” x (Clcurrent / 110.9)
(Note: “110.9” is the value of the Cayman Islands Consumer Price Index on 30 September 2020)
	68.
	Without exception, the Authority shall, after the First Delivery Date, make payment every calendar month to the Contractor of the Monthly Overheads Fee, as defined in Clause 66.

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Quantity Fee
	69.
	The Authority shall pay the Contractor a Quantity Fee for each cubic metre of Water delivered during the Term which shall cover the cost of:

		(a)
	Chemicals

		(b)
	Filter Cartridges

		(c)
	Replacement Membranes

		(d)
	Any other spare parts and other consumables, and costs, which the Contractor considers necessary

	70.
	The Base Quantity Fee for Water consists of a United States dollar amount (US $) and a Cayman Islands dollar amount (CI $).

		(a)
	The United States dollar portion of the Base Quantity Fee covers expenses incurred outside the Cayman Islands, expressed in United States (“US $”) dollars per cubic metre, adjustable for inflation.

		(b)
	The Cayman Islands dollar portion of the Base Quantity Fee covers expenses incurred locally, expressed in Cayman Islands (“Cl $”) dollars per cubic metre, adjustable for inflation.

The Base Quantity Fee shall be the amount or amounts indicated in the Schedule of Fees, Items 5 and 6, of the Appendix to the Agreement.
	71.
	Beginning on the First Delivery Date, and on every 1st January thereafter, the Quantity Fee shall be calculated as follows:

		(a)
	The United States dollar portion of the Quantity Fee shall be:

“Amount of Sub-Clause 70 (a)” x (UScurrent / 208.1)
(Note: “208.1” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2020)
		(b)
	The Cayman Islands dollar portion of the Quantity Fee shall be: 

“Amount of Sub-Clause 70 (b)” x (Clcurrent / 110.9)
(Note: “110.9” is the value of the Cayman Islands Consumer Price Index on 30 September 2020)
	72.
	Without exception, the Authority shall, after the First Delivery Date, make payment every calendar month to the Contractor of the Quantity Fee, as defined in Clause 71, for the Quantity delivered to the Authority during the preceding calendar month.

Energy Fee
	73.
	The Contractor shall warrant and guarantee the specific electrical energy consumption of the Plant. This specific energy consumption guarantee (ENCONspec) shall be specified as the number of kWh of electric power required to produce one (1) cubic metre of Water.

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The Energy Fee shall be calculated as: ENCONspec x Ecurrent
The Specific Energy Consumption Guarantee (ENCONspec) shall be the number indicated in the Schedule of Fees, Item 7, of of the Appendix to the Agreement.
	74.
	Without exception, the Authority shall, after the First Delivery Date, make payment every calendar month to the Contractor of the Energy Fee, as defined in Clause 73, for the Quantity delivered to the Authority during the preceding calendar month.

	75.
	As per Clause 37, the Authority shall pay, on behalf of the Contractor, for all electric power consumed by the Plant. The Authority shall deduct any payments for electricity made to the electricity provider, at cost, from the Energy Fee for the Quantity delivered to the Authority during the preceding calendar month.

Time for Payment
	76.
	At the beginning of each month, following the First Delivery Date, the Contractor shall invoice the Authority the Monthly Overheads Fee for that month. The Authority shall, within 28 days of receiving such invoice, pay the Monthly Overheads Fee.

	77.
	At the beginning of each month, following the First Delivery Date, the Contractor shall invoice the Authority the Quantity Fee (calculated as per Clause 71) and the Energy Fee (calculated at per Clause 73) for the Quantity delivered to the Authority during the preceding month. The Authority shall, within 28 days of receiving such invoice, pay the Quantity Fee and Energy Fee for the Quantity delivered to the Authority.

	78.
	In the event of the failure of the Authority to make payment within the times stated, the Authority shall pay to the Contractor interest upon all sums unpaid at a rate per annum equivalent to the interest rate at which the Cayman National Bank and Trust Company Limited would pay for a call deposit of such an amount on the date upon which such payment first becomes overdue. In the event of any variation in the said Bank Rate being announced whilst such payment remains overdue the interest payable to the Contractor for the period that such payment remains overdue shall be correspondingly varied from the date of each such variation.

Deductions
Failure to meet the Guaranteed Quantity
	79.
	On the demand of the Authority the Contractor shall supply to the Authority in any one calendar month an average daily quantity of 9,000 cubic metres of Water.

The penalty provision hereinafter written shall come into effect if all of the following conditions are met:
		(a)
	Subject to Force Majeure (see Clause 107), if in any one day the Contractor whether by its own default or that of any other person and for whatever reason shall have failed to deliver the quantity of Water demanded by the Authority up to a maximum amount of 9,000 cubic metres per day; and

		(b)
	The quantity of Water demanded by the Authority in the relevant calendar month can be accepted in the Reservoir; and

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		(c)
	The Plant has produced less than 90% of its rated capacity in the relevant calendar month (i.e., 9,000 cubic metres per day multiplied by the number of days in the relevant calendar month) during the month in which the Water is demanded.

In this event the Contractor shall pay to the Authority a penalty. This penalty shall be calculated as the difference between (A) the current Public Authority rate of water (CI$ per cubic metre) sold by the Water Authority on Grand Cayman, and (B) the sum of the Quantity Fee (calculated as per Clause 71) and the Energy Fee (calculated as per Clause 73), for each cubic metre of Water less than 9,000 cubic metres in any one day that the Contractor is unable to supply on the demand of the Authority.
The Authority may recover the penalty by deducting it from the following month’s monies owed to the Contractor.
	80.
	Failure by the Authority to provide a minimum Water storage as specified in Clause 28 shall result in the Authority being unable to apply the remedy specified in Clause 79 for the whole of any calendar month in which the Authority is in default at any time, but shall give rise to no other liability, claim, remedy or cause of action whatsoever.

	81.
	In the event of Force Majeure, or interruption in the electrical power supply through no fault of the Contractor, during part of the month under consideration, the quantity of Water that can be demanded by the Authority (as per Clause 79) during that month shall be 9,000 cubic metres per day multiplied by the number of days that Force Majeure, or interruption in the electrical power supply, was not in force during that month.

Remedy for lower quality water
	82.
	Notwithstanding Clauses 51 and 55, in the event that the Contractor is unable to deliver Water to the Delivery Point of such quality that the individual constituents do not exceed the allowable values as set out in APPENDIX F then the Contractor may deliver Water to the Authority provided that the individual constituents do not exceed the maximum values as set out in APPENDIX F. In such case the Contractor shall be subject to a penalty.

The penalty, for each individual constituent exceeding the allowable value as set out in APPENDIX F, shall be calculated as follows:
0.30 x (QF + EF) x (actual value — allowable value)/(maximum value — allowable value)
whereby
QF = the Quantity Fee (calculated as per Clause 71) and
EF = the Energy Fee (calculated as per Clause 73)
actual value = the actual value for the individual constituent
allowable value = the allowable value for the individual constituent as set out in APPENDIX F
maximum value = the maximum value for the individual constituent as set out in APPENDIX F
The penalty shall be deducted from the agreed price of Water, using a weighted average calculation for each individual constituent for each day the allowable value thereof, as set out in APPENDIX F, is exceeded, and applied to the Quantity delivered to the Authority.
The overall penalty shall be the sum of the penalties for each individual constituent as itemized in APPENDIX F, but the overall penalty shall not exceed the sum of the Quantity Fee (calculated
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as per Clause 71) and the Energy Fee (calculated as per Clause 73) multiplied by the Quantity delivered to the Authority during the calendar month.
	83.
	In the event that the Authority allows delivery of Water for which the individual constituents exceed the maximum values as set out in APPENDIX F, then the above penalty calculation shall only apply up to the maximum values as set out in APPENDIX F.

	84.
	In the event that Water is delivered with individual constituents exceeding the maximum values as set out in APPENDIX F, or with any E-coli or total coliform bacteria, the Authority may immediately stop that Water entering the Reservoir and shall not be responsible for any loss, damage, cost or expense that this might cause to the Plant. The Contractor shall make good, at his expense, any damage caused to the Plant by this action.

Termination of the Agreement
	85.
	Without prejudice to the provisions of Clauses 79 through 84, in the event of a breach by the Contractor of any of the terms of the Agreement, the Authority, on becoming aware of such breach, shall immediately notify the Contractor by notice in writing, delivered to the registered office of the Contractor, and specifying the breach, and the date when the breach occurred and informing the Contractor of the action it is required to take to remedy the breach and of the time period allowed for this action to be taken (the “Allowed Period”, which period shall include any extensions given hereunder). The Allowed Period shall be a reasonable time, but shall not in any event exceed two months, and in the case of the Contractor’s delivering Water to the Reservoir with one or more individual constituents exceeding the maximum values as set out in APPENDIX F without the permission of the Authority shall not exceed 10 days. In the event that the Contractor fails to remedy the breach within the Allowed Period the Authority may extend the Allowed Period or may immediately terminate this Agreement on the expiration of the Allowed Period by a further notice in writing, provided the date of such termination notice is within 15 days of the expiration of the Allowed Period. The Contractor shall immediately cease operating the Plant upon receipt of the notice of termination

	86.
	If the Contractor

		(a)
	petitions for relief or has a petition filed against it which is not dismissed within thirty (30) days under the provisions of any bankruptcy or insolvency legislation;

		(b)
	goes into compulsory liquidation;

		(c)
	is adjudicated as bankrupt;

		(d)
	has a receiver appointed for its business or;

		(e)
	makes an assignment for the benefit of its creditors

then the Authority may give notice terminating this Agreement. The Contractor shall immediately cease operating the Plant upon receipt of the notice of termination.
	87.
	In the event of termination of the Agreement, the obligations of both parties related to any amounts owing shall subsist and the parties may take such action allowed under law to settle such obligations.

Delivery Period and Operation of the Plant
	88.
	In the event that the First Delivery Date is later than fifteen (15) calendar months after the Agreement Date, the Contractor shall pay to the Authority a penalty of CI$ 5,000 per calendar

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day. Monies due as a result of this penalty may be deducted from any monies later due to the Contractor from the sale of Water to the Authority. This deduction may be made as a 20% reduction of the monthly invoiced amount until such time as the penalty has been paid.
	89.
	In the event that the First Delivery Date has not occurred within eighteen (18) calendar months of the Agreement Date, then the Contractor shall be in breach of the Agreement and subject to an extension of time under Clause 100 the Authority may terminate the Agreement and the Authority shall in the notice of termination in its absolute discretion exercise either of the two following options:

		(a)
	require the Contractor at its own expense to remove the Plant from the Site, with the exception of all buildings and civil works which shall become the property of the Authority without further payment; or

		(b)
	within thirty (30) days of the date of termination, purchase the Plant, at a price to be agreed between the parties.

	90.
	In the event of Agreement Termination under sub-clause 89 (a) the Authority shall assist and cooperate with the Contractor for the procurement of any export, repatriation, or other licence or permit which may be required for the removal of the Plant save for all buildings and civil works and its return to the country of the Contractor’s choice provided however that all costs for dismantling the Plant and transporting equipment and personnel shall be borne by the Contractor. Further, the Authority shall provide the Contractor with uninterrupted access to and use of the Site for the purpose of removing the Plant for a period of two (2) months following Agreement Termination, all at no charge to the Contractor.

Extension of Agreement
	91.
	Six months prior to the end of the Term, the Authority shall advise the Contractor in writing whether or not the Authority intends to extend the Agreement for an additional period, commencing at the end of the Term. In the event that the Authority exercises its option to extend the Agreement for an additional period, revised rates for the Base Monthly Overheads Fee (See Clause 66), Base Quantity Fee (See Clause 70), and ENCONspec (See Clause 73) shall be negotiated and agreed upon between the Contractor and the Authority.

Construction of Agreement
	92.
	The Agreement shall in all respects be construed and operate as a Cayman Islands Agreement and in conformity with Cayman Islands Law and the Cayman Islands courts shall have exclusive jurisdiction over any matter arising in connection with the Agreement.

	93.
	Information concerning the Agreement and any information obtained either by the Contractor or the Authority in the course of execution of the Agreement or by any person employed by him or it in connection with the Agreement in the course of such employment is confidential and shall be used by the Contractor, by the Authority and by any such person solely for the purpose of the Agreement and shall not at any time be disclosed by the Contractor, by the Authority or by any such person without the consent of the other party to the Agreement except to such persons and to such extent as may be necessary for the execution of the Agreement.

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Non-assignability of the Agreement
	94.
	The Agreement shall not be assigned nor transferred in whole or in part without the prior written consent of the parties.

Binding Effect of Agreement
	95.
	This Agreement shall be binding upon the parties and their respective successors and assigns and may be amended or modified only by a formal agreement signed by an officer of both parties.

	96.
	This Agreement sets forth the entire agreement of the parties with respect to its subject matter.

	97.
	The parties acknowledge and confirm that they have not entered into this Agreement on the basis of any warranties or representations, whether orally or in writing, that are not expressly incorporated into this Agreement.

Notices
	98.
	Notices may be served upon the registered office of the Contractor and upon the Authority. Any written notice required or permitted under the terms of the Agreement shall be sent by certified or registered mail, e-mail or courier, or be delivered by hand during business hours.

	99.
	Notices shall be deemed received seven (7) business days following the date post-marked in the case of notices sent by certified or registered mail, two (2) business days if sent by e-mail or courier, and immediately if delivered by hand.

100. The extension of time for the performance by the Contractor of its obligations under the Agreement or the failure or forbearance on the part of the Authority immediately to enforce any right penalty or obligation under the terms of the Agreement shall not be construed as a waiver of any such right penalty or obligation which may accrue or arise out of the Agreement.
101. The Authority’s address is: Water Authority - Cayman, 13G Red Gate Road, P.O. Box 1104, Grand Cayman KY1-1102, Cayman Islands.
Customs duties
102. The Authority is exempt from duty on all materials and equipment imported into the Islands to be used on any project, as per section 11.6 of the Water Authority Act (2018 Revision). Therefore, no Customs duties and package tax are payable upon all Plant, and associated materials and equipment, imported into the Islands, and which will become part of the Plant.
103. In order to avoid that any import duties are being levied, the Contractor shall ensure that:
		(a)
	all shipments for Plant, materials, equipment, (spare) parts, membranes, computer equipment, chemicals, filters, expendables, and all other items required for the construction, operation, control, monitoring, and maintenance of the Plant are consigned to the Authority; and

		(b)
	all Customs Importation Forms are stamped and signed by the Authority

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104. The Contractor shall pay all Customs duties and package tax due upon the items covered by Clause 103 and which are charged as a result of the Contractor failing to comply with the requirements of that clause.
105. Notwithstanding Clause 102, the Contractor shall pay all Customs duties and package tax due upon tools and test equipment required for the operation and maintenance of the Plant, but which will not become part of the Plant.
106. In the event that during the Term the Customs duties increase, then, if the Contractor provides evidence of payment of the additional duties, the Authority shall reimburse the Contractor in full for these additional Customs duties paid. Likewise, if during the Term the Customs duties reduce, the Contractor shall credit the Authority in full for any savings resulting from the reduction in Customs duties charged. The Contractor shall ensure that all correspondence with the Customs Department is copied to the Authority in a timely manner.
Force Majeure
107.
(a)The Contractor shall have no liability for a consequence of any of the following events:
		(i)
	a flood, storm, hurricane or other natural event; or

		(ii)
	any war, hostilities, revolution, riot or civil disorder; or

		(iii)
	any destruction, breakdown (permanent or temporary) or malfunction of, damage to any premises, plant, equipment or materials of the Contractor if that event and consequence was not preventable and foreseeable; or

		(iv)
	the introduction of, or any amendment to a law or regulation or any change in its interpretation or application by any authority; or

		(v)
	any action taken by a government or public authority including any failure or delay to grant a consent exemption or clearance if that event and consequence was not preventable and foreseeable; or

		(vi)
	any strike, lockout or other industrial action; or

		(vii)
	any unavailability of or difficulty in obtaining any plant, equipment or materials if that event and consequence was not preventable and foreseeable; or

(viii) any breach of contract or default by or insolvency of, a third party including an agent or sub-contractor.
		(b)
	For this purpose an event or the consequence of an event is not preventable and foreseeable if and only if the Contractor could not have prevented it by taking steps which it could reasonably be expected to have taken.

		(c)
	Sub-Clause (a) does not apply unless the Contractor

		(i)
	notifies the Authority of the relevant event and consequence as soon as possible after it occurs;

		(ii)
	promptly provides the Authority with any further information which the Authority requests about the event (or its causes) or the consequence; and

		(iii)
	promptly takes any steps (except steps involving significant additional costs) which the Authority reasonably requires in order to reduce the Authority’s losses or risk of losses.

		(d)
	It is for the Contractor to show that a matter is a consequence of an event covered by Sub-Clause (a), that the event and the consequence was not preventable and foreseeable and

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that it has satisfied the conditions set out in Sub-Clause (c). The duty of the Contractor to perform its obligation under this Agreement shall be suspended until such circumstance shall have ceased without the imposition of any penalty as provided for in Clauses 79 and 89.
Rates of Exchange
108. All payments shall be made in United States dollars (US$) and Cayman Islands dollars (Cl$), as specified in the various clauses. However, if, at any time during the Agreement, it is deemed necessary to convert Cayman Islands dollars (Cl$) into United States dollars (US$), or vice versa, the conversion will be made at the Exchange Rate.
Change in Local Legislation
109. If, there occur in the Cayman Islands changes to Law or any regulation of any duly constituted authority, or the introduction of any such Law or regulation which causes additional or reduced costs to the Contractor, or should any approvals or concessions granted under Clause 32 not be provided or be withdrawn, and the Contractor can prove that he thereby incurs additional cost, then the fees set out in Clauses 65 through 73 shall be modified accordingly to take in to account such additional costs and these revised fees shall be paid by the Authority. Any such increase in the fees shall reflect only the actual increase in the cost of production of water without any element of profit. Where any subsequent changes in Cayman Islands legislation can be proven to reduce the Contractor’s costs then the fees set out in Clauses 65 through 73 shall be reduced accordingly to take into account such reduced costs and these revised fees shall be paid by the Authority.
Work Permits for Expatriate Personnel
110. The Contractor shall use its best endeavours to employ persons possessing Caymanian status in various categories of employment in its operation, it being understood that the Contractor has the right to import key trained or skilled personnel (and their dependants) or otherwise recruit such personnel for employment in accordance with the laws of the Cayman Islands for the time being in force relating to work permits.
111. The Authority shall support the Contractor in its application for Work Permits for key trained or skilled expatriate persons to be employed to ensure the proper operation of the Plant. However, the Contractor shall use its best endeavours to employ persons possessing Caymanian status in all categories of employment in its operation and to train them for higher categories wherever possible.
112. The Contractor shall obtain and pay all fees for any required work permits for expatriate personnel.
Training of Authority Staff
113. During the Term the Contractor shall provide hands-on training to Authority staff in the general operation and maintenance of the Plant. The training will be primarily concerned with the start­-up, control and other general operating procedures for the Plant. The training shall be scheduled so as not to interrupt the production of Water.
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Additional Documentation to be provided
114.On or before the First Delivery Date, the Contractor shall provide the Authority with a Hurricane Contingency (Preparedness and Recovery) Plan for the Plant, for approval by the Authority (refer to APPENDIX I).
115.No later than three (3) months after the First Delivery Date, the Contractor shall provide the Authority with complete Operation and Maintenance manual(s) for the Plant, in addition to the Operations Service Plan provided as per APPENDIX I.
116.No later than three (3) months after the First Delivery Date, the Contractor shall provide the Authority with detailed as-built drawings of the Plant, including workshop drawings for the various pipe manifolds, equipment skids, equipment supports etc. (All drawings shall be provided in AutoCAD format)
Arbitration
117.Save as otherwise expressly provided, any dispute, difference or question which may arise between the Authority and the Contractor as to any matter arising under or by virtue of the Agreement or as to their respective rights and liabilities in respect thereof, and in respect of which amicable settlement cannot be reached within ninety (90) days of either Party advising the other in writing of such dispute, difference or question, may be referred to arbitration, and such arbitration shall take place in accordance with the Arbitration Law, 2012. The model clause of the said law shall apply. The result of such arbitration shall be binding unless the arbitrator has made obvious legal mistakes or behaved improperly.
Severability
118. If any provision or part-provision of the Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of the Agreement.
Counterparts
119. The Agreement may be executed in any number of counterparts, each of which, when executed, shall be an original. All counterparts together shall constitute one and the same Agreement. The Agreement shall not be effective until each party has signed at least one counterpart.
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AGREEMENT
The Employer is The Water Authority of the Cayman Islands, P.O. Box 1104, 13G Red Gate Road, George Town, Grand Cayman KY1-1102, Cayman Islands.
The Contractor is Ocean Conversion Cayman Limited, a subsidiary of Consolidated Water Co. Ltd. of PO Box 1114GT, Regatta Office Park, Windward 3, 4th Floor, Grand Cayman Cayman Islands, KY1-1102 .
The Employer desires the execution of certain Works known as
Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021)
OFFER
	(1)
	We, the undersigned, have examined all the Procurement Documents for the execution of the above-named Works, comprising Part1 through Part 3, and Appendices A through K, and Addenda Nos.   1, 2 and 3                                     , and offer to construct, operate and maintain the Works in conformity with the said Procurement Documents and Addenda in consideration of the payments, as specified in the Schedule of Fees in the APPENDIX to the Agreement, to be made by the Authority at the times and in the manner prescribed in the Conditions of Contract.

	(2)
	We acknowledge that all Procurement Documents and Addenda shall be incorporated into and read and construed as part of the Agreement.

	(3)
	We acknowledge that the Appendix to the Agreement forms part of our Tender.

	(4)
	We undertake, if our Tender is accepted, to commence the Works as soon as is reasonably possible after the receipt of the formal Agreement, and to complete the construction of the civil works and deliver the required quantity of potable water within the time stated in the Contract.

	(5)
	We agree to abide by this Tender for the period of 165 days from the day fixed for receiving the same and it shall remain binding upon us and may be accepted at any time before the expiration of that period.

	(6)
	Unless and until a formal Agreement is prepared and executed this Tender, together with your written acceptance thereof, shall, subject to us satisfying all other applicable conditions of the Procurement Documents within the specified time of the notice of selection, constitute a binding Contract between us.

	(7)
	We understand that you are not bound to accept the lowest or any Tender you may receive 

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Dated this                      14th                       day of                      January                      2022.
Signature  in the capacity of _President and CEO                      
duly authorized to sign tenders for and on behalf of:                      
    OCEAN CONVERSION CAYMAN LIMITED                      (IN BLOCK CAPITALS)
Address _PO BOX 1114 GT, Grand Cayman, Cayman Islands, KY1-1102                      
Witness                                                                                                                                 
Address
    PO BOX 1114 GT, Grand Cayman, Cayman Islands, KY1-1102                      
Occupation    Executive Vice President and Chief Operations Officer                      
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ACCEPTANCE
The Employer has, by signing below, accepted the Contractor’s offer and agrees that in consideration for the execution of the Works by the Contractor, the Employer shall pay the Contractor at the times and in the manner prescribed in the Conditions of Contract. This Agreement comes into effect on the date when the Contractor receives a copy of this document signed by the Employer.
	​

	​

	​

	Signature: 
	/s/ GELIA FREDERICK-VAN GENDEREN
	    
	Date: 
	09 MAY 2022

	​
	​
	​
	​

	Name:
	GELIA FREDERICK-VAN GENDEREN
	​
	Authorized to sign on behalf of the

	​
	​
	​
	​

	​
	​
	​
	Water Authority of the Cayman Islands

	Capacity:
	DIRECTOR
	​
	​

	​
	​
	​
	​

	In the presence of:
	/s/ Tom van Zanten
	​
	​

	​
	​
	​
	​

	Name:
	Tom van Zanten
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	​

	​
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	Capacity:
	Deputy Director
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APPENDIX TO THE AGREEMENT
This Appendix forms part of the Agreement.
SCHEDULE OF FEES
​
	Item No.

	Reference

	Item Description

	Unit

	Amount

	 ​

	 ​

	 ​

	 ​

	 ​

	Purchase Price

	 ​

	 ​

	 ​

	1

	Clause 62 (a)

	A portion of the purchase price for expenses incurred outside the Cayman Islands, expressed in United States dollars.

	US$

	[*****]

	2

	Clause 62 (b)

	A portion of the purchase price for expenses incurred locally, expressed in Cayman Islands dollars.

	Cl$

	[*****]

	 ​

	 ​

	 ​

	 ​

	 ​

	Base Monthly Overheads Fee:

	​

	 ​

	​

	United States dollar portion
	 ​
	 ​
	​

	3

	Clause 66 (a)

	Fee, for expenses incurred outside the Cayman Islands, expressed in United States Dollars, adjustable for inflation.

	US$/month

	[*****]

	 ​

	 ​

	 ​

	 ​

	 ​

	Cayman Islands dollar portion
	 ​
	 ​
	 ​

	4

	Clause 66 (b)

	Fee, for expenses incurred locally, expressed in Cayman Islands Dollars, adjustable for inflation.

	Cl$/month

	[*****]

	 ​

	 ​

	 ​

	 ​

	 ​

	Base Quantity Fee:

	 ​

	 ​

	United States dollar portion
	 ​
	 ​
	 ​

	5

	Clause 70 (a)

	Fee, for expenses incurred outside the Cayman Islands, expressed in United States Dollars, adjustable for inflation.

	US$/m3 

	[*****]

	 ​

	 ​

	 ​

	 ​

	 ​

	Cayman Islands dollar portion
	 ​
	 ​
	​

	6

	Clause 70 (b)

	Fee, for expenses incurred locally, expressed in Cayman Islands Dollars, adjustable for inflation.

	Cl$/m3

	[*****]

	​

	​

	 ​

	​

	Specific Energy Consumption:

	​

	 ​

	​

	7

	Clause 73

	Specific Energy Consumption Guarantee of Plant (ENCONspec)

	kWh/m3

	[*****]

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Attachments to Agreement:
​
Addendum 1
Addendum 2
Addendum 3
​
As issued by the Water Authority Cayman
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​
Procurement of and Operating Agreement for
a Sea Water Desalination Plant at
Red Gate Water Works
Grand Cayman, Cayman Islands
using
the Reverse Osmosis Process (2021)
TENDER ADDENDUM No. 1
CLARIFICATION:
Site Visit
It is the Proponent’s responsibility to obtain all the information necessary to prepare a proposal (see item 3.1.6. on page 11 of the Procurement Document).
Proponents can arrange a visit to the site to familiarize themselves regarding the site conditions, the extent of the work etc. Requests for a site visit can be made via the Bonfire platform. Please allow at least 24 hours’ notice and we will respond with a suitable day and time. Please note, however, that the site presently still has a lot of vegetation on it, and it is anticipated that the site will not be cleared until early January 2022.
Proponents are reminded that, as per item 1.3 (PART 1 – INVITATION AND SUBMISSION INSTRUCTIONS) (see page 5 of the Procurement Document), “Except in so far as may be directed by the Authority in writing neither the Authority, nor any agent or servant in their employment has any authority to make any representation or explanation to Proponents as to the meaning of this Procurement Document.”
Additionally, as per item 3.2.1 (PART 3 – TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS) (see page 12 of the Procurement Document), ”The Authority is under no obligation to provide additional information, and the Authority shall not be responsible for any information provided by or obtained from any other source. It is the responsibility of the Proponent to seek clarification via the Bonfire platform on any matter it considers to be unclear. The Authority shall not be responsible for any misunderstanding on the part of the Proponent concerning this Procurement Document or its process.”
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Information to be submitted with “PROPOSAL SUBMISSION”
As per APPENDIX C— PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS (see page 53 of the Procurement Document):
“The names and the resume of the principals and all the other information listed above must be submitted under the section “PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH” as indicated in PART 1 - INVITATION AND SUBMISSION INSTRUCTION Section 1.6 Submission of Proposals.”
For the avoidance of doubt, “all the other Information listed above” refers to the items listed on pages 52 and 53 of the Procurement Document, such as:
		1.a
	Confirm compliance with the specified eligibility criteria, either item i) or item ii), provided in sufficient detail to allow evaluation.

		1.b
	Past Performance Data.

		1.c
	Corporate Information, with, as a minimum, the items specified.

		2
	A preliminary layout of the Plant building.

		3
	A programme for the completion and installation of the Plant, provided in the form of a Gantt Chart.

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Procurement of and Operating Agreement for
a Sea Water Desalination Plant at
Red Gate Water Works
Grand Cayman, Cayman Islands
using
the Reverse Osmosis Process (2021)
TENDER ADDENDUM No. 2
GENERAL NOTES: 
Submission Deadline
After due consideration, the Authority has decided not to change the Submission Deadline, which will remain as Friday 14 January 2022 12:00 PM EST (GMT-5), as indicated in item 1.5 (PART 1 - INVITATION AND SUBMISSION INSTRUCTIONS) (see page 6 of the Procurement Documents).
Alternative Operating Agreements
Since the late 1980s, the Authority has structured the operating agreements for its water production plants such that, in addition to the design, construction and operation of the plants, the successful contractor was also responsible to finance the project. The capital cost of the water production plant was then amortized over the operating period (i.e., a build, own, operate and transfer (BOOT) contract).
The Framework for Fiscal Responsibility for the Cayman Islands prevents the Water Authority from entering into any long-term borrowing (which includes long-term financing). Therefore, the Authority cannot consider a BOO or BOOT model for this project.
AutoCAD drawing of the Site
An AutoCAD drawing of the Site, including adjacent properties, and showing the extent of the lay-down area for use by the Contractor during construction (as per Drawing C-01), will be published on Bonfire as a Public File.
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Unless noted otherwise, all comments hereafter refer to the clauses in section 3 CONDITIONS  OF CONTRACT (APPENDIX A - CONDITIONS OF ENGAGEMENT)
CLARIFICATION:
ELIGIBILITY CRITERIA (as per APPENDIX A – CONDITIONS OF ENGAGEMENT) (on pages 17 and 18 of the Procurement Documents)
As the Contractor must design, plan, construct, install, and operate and maintain the Plant, and the proposals will be evaluated on the basis of the cost of water, the experience of the Tenderers, and the proven performance record of the equipment offered (see Item A THE DELIVERABLES (as per APPENDIX C — PROJECT PARTICULARS) on page 51 of the Procurement Documents), Past Performance Data and References must be provided for at least three (3) similar SWRO plants, which use commercially available isobaric energy recovery devices, that will confirm that the company has successfully designed, constructed and continuously operated these SWRO plants for a period of not less than seven (7) years.
Sub-Clause 5 (j) (on page 22 of the Procurement Documents)
The emergency generator shall be sized (and wired) to ensure that, under emergency power, the reverse osmosis plant can still produce at least 5,000 cubic metres of Water per day, with the proper operation of all requisite pumps (including the pumps and blowers for the air stripping tower and wet gas scrubber), controls, building lights, air-conditioning etc.
Clause 16 (on page 23 of the Procurement Documents)
Performance records for the pumps refer to demonstrated records of each pump’s performance under controlled conditions (e.g., pump curves showing flow rate, head, and efficiency etc.)
Performance records for Membranes refer to the demonstrated performance of the membranes in respect of salt rejection, flux rates, life expectancy etc. under similar conditions as envisaged for the Plant.
Clause 17 (on page 23 of the Procurement Documents)
The detailed design drawings of the Plant must be certified by a professional engineer. In accordance with Clause 19 and Sub-Clause 21 (a), the Contractor must meet the requirements of the Planning Department, the Building Control Unit (BCU), etc. for the construction of the Plant, and this engineer may therefore have to be registered with BCU.
The affidavit specifying the operating pressures of the Membranes is needed to be able to verify whether the membranes are operated at pressures allowed by the membrane element manufacturer, or those envisaged during the plant design stage.
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Clause 19 (on page 24 of the Procurement Documents)
Planning permission for this project has not yet been obtained. The development on this parcel (previously Block 20B Parcel 34 (F98-0344)) was always intended to be a phased construction over a number of years. In early 2001 a Master Site Plan was submitted to the Planning department together with the Phase One Site Plan.
		●	Planning permission for the existing Water Production plant (RO Building #2) on this site was obtained from the Central Planning Authority on 6 April 2001 (P01-105199).

		●	Planning permission for a vehicle maintenance building, storage building and pump station (P11-0125) was obtained from the Central Planning Authority on 23 May 2011. A modified planning permission was obtained on 11 December 2013.

The Site (Block 20B Parcel 410) is zoned Light Industrial. The zoning guidelines by the Department of Planning allow 75% of the lot area to be covered, which includes paved surfaces. Currently, the site coverage is around 30%.
Electrical Transformer
The Authority is responsible for the provision and installation of the electrical transformer and vault, including the installation of the underground (primary) ducts.
As per Clause 20 (on page 24 of the Procurement Documents), the Contractor shall be responsible for the provision and installation of the underground electrical duct and cable between the Plant and the transformer (i.e., the secondary side of the transformer), and for the connection of the secondary of the transformer to the main disconnect at the Plant building.
As per Clause 30 (on page 27 of the Procurement Documents), the Authority shall arrange for the provision and installation of a suitably sized electrical transformer in the vicinity of the Plant at no cost to the Contractor. The Authority shall be responsible for the connection of the primary side of the transformer to the mains power.
Sub-Clause 21 (f)(viii) (on page 25 of the Procurement Documents)
Membrane vessels shall be manufactured by ASME BPVC Certificate Holders and shall be certified and stamped with the Certification Mark in accordance with the applicable ASME BPVC Section.
Clause 22 (on page 25 of the Procurement Documents)
The Waste Management Plan does not specifically mention refuse (non-hazardous solid waste) that requires collection and transport to a processing or disposal site.
There is already a garbage container enclosure on the Site, readily accessible by a service vehicle (garbage truck) from Department of Environmental Health (situated immediately east of the transformer vault for RO building #2, or approximately 100 feet north-east of the laydown
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area). However, the Planning Department may require an additional garbage container enclosure for the Plant building.
Clause 29 (on page 27 of the Procurement Documents)
The product water from the Plant building will be connected to the existing product water pipeline from RO Building #1 (see Drawing C-01).
The brine pipeline from the Plant building will be connected to a 24-inch HDPE pipeline, independent of the existing brine pipeline from RO Building #1 (see under section MODIFICATIONS below).
It is anticipated that the water production at RO Building #1 will cease soon after the First Delivery Date.
Clauses 45 and 46 (on page 29 of the Procurement Documents)
This is not a “take-or-pay contract”.
Under the Contract there is no obligation by the Authority to take a minimum, or any, amount of Water from the Plant. However, the Contractor must meet any daily demand for Water by the Authority within the limits of the Plant, and must deliver, when required by the Authority, in any one month an average daily quantity of Water of 9,000 cubic metres.
The Contractor’s overheads are covered by the Monthly Overheads Fee, as defined in Clause 66.
Clause 63 (on page 31 of the Procurement Documents)
The Payment Terms, as detailed in this clause, are deemed to limit the risk to the Authority.
As the Contractor is responsible to design, plan, construct, install, and implement the Plant, the Authority’s interests are protected by requiring that, before any payment is made, that
		(a)
	the Contractor has demonstrated that the Plant can produce Water at the specified rate and at the ENCONspec, and which meets the quality requirements, and that

		(b)
	the Contractor has the full inventory of Mandatory Spares in a suitable storage facility on or near the Site.

The Contractor will need to obtain funds, either from its own assets, bank overdrafts or some other form of financing, to bridge the time period between incurring expenditures and obtaining the payments from the Authority. The Contractor must include these construction financing cost in his prices/rates.
The Payment Terms, as included in the Procurement Documents, will therefore remain unchanged.
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Clauses 73 through 75 (on pages 33 and 34 of the Procurement Documents)
The Contractor guarantees the specific electrical energy consumption (ENCONspec) of the Plant, which is the number of kWh of electric power required to produce one cubic metre of Water, and deliver it to the Reservoir, and this is deemed to include all ancillary electricity usage (i.e., for air-conditioning, area lighting of the administration offices, product water pumps, etc.);
The Authority pays for all electric power consumed by the Plant. The Authority deducts any such payments for electricity from the Energy Fee for the Quantity delivered to the Authority.
If, in any month, the electricity bill amount is higher than the Energy Fee for the Quantity delivered, the Plant’s electrical energy consumption was higher than the guaranteed ENCONspec. Consequently, the net result of “Energy Fee for the Quantity delivered to the Authority less payments made for electricity” will be a negative amount. It is the Contractor’s responsibility to operate and maintain the Plant in such a manner that the Plant’s actual electrical energy consumption does not exceed the guaranteed ENCONspec.
Clause 107 (on page 39 of the Procurement Documents):
Some COVID-19 Supply Chain Disruptions are covered by Sub-Clause 107 (a)(vii), subject to the provisions of Sub-Clauses 107 (b) through (d).
Therefore, the Contractor shall only be entitled to an extension to the Delivery Period based on unexpected (at the time of the tender submission) or unpreventable delays to the project caused by supply chain disruptions associated with COVID-19
Information to be submitted with “PROPOSAL SUBMISSION”
The required information, as per APPENDIX C – PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS (see pages 52 and 53 of the Procurement Document), must be submitted under the section “PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH” as indicated in PART 1 – INVITATION AND SUBMISSION INSTRUCTION Section 1.6 Submission of Proposals”, unless that information is already included elsewhere, e.g., as part of APPENDIX B - SUBMISSION FORM or APPENDIX D – REFERENCES FORM. The same information does not need to be provided more than once.
Lay-down Area (as indicated on Drawing C-01 (see APPENDIX K — DRAWINGS)):
Prior to the Agreement Date, the Authority shall have removed all vegetation from the lay-down area on the Site.
A geotechnical survey was not carried out for this project. However, it has been previously determined (for other projects on the Site, such as the construction of several large water storage tanks) that the allowable bearing capacity of the Red Gate Water Works is around 1,800 psf.
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The elevation of the site is approximately five (5) feet above mean sea level (and therefore approximately four (4) feet above the local groundwater table).
Well Testing (see Appendix H - OPERATION OF FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS)
It is anticipated that any well testing, after the initial development of the feed water abstraction wells and the brine disposal well, will not be more frequent than once every two (2) years, unless the Monthly Operating Reports (see APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS) indicate a negative trend (i.e., increases) in the drawdown in the feed water abstraction well and/or the head build-up in the casing of the brine disposal well.
The Contractor and the Authority shall agree on a procedure for the well testing, which shall be designed to minimize the disruption to the regular Plant operation, minimize the amount of manual activity by each party and shall include the method of calibration of the relevant instruments.
CORRECTIONS
Sub-Clause 107 (d) (on pages 39 and 40 of the Procurement Documents):
Delete the reference to “Clause 89” and replace with “Clause 88”.
MODIFICATIONS:
Clause 11 (on page 23 of the Procurement Documents)
Modify the second paragraph of this clause to:
The Contractor shall provide and install the underground power and control cables (between the feed water wells and the Plant building), either in suitably sized electrical ducts, or using direct buried armoured cable with corrosion resistant jackets and wet location rated conductors. All cables and their installation shall be in strict compliance with the applicable NEC code requirements.
Sub-Clause 21 (d) (on page 24 of the Procurement Documents)
Delete the entire sub-clause and replace with the following:
The building and ancillary works shall be designed and built in strict accordance with the Department of Planning’s Technical Bulletin TB 0001-May 2020 — Design Criteria for the 2016 Cayman Islands Building Codes.
(see also: https://www.planning.ky/wp-content/uploads/docs/TB0001-Desion-Criteria-for-the-2016-Cayman-Island-Building-Codes.pdf).
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Clause 29 (on page 27 of the Procurement Documents)
Delete the entire clause and replace with the following:
The Authority shall provide the following:
		(a)
	a 12-inch PVC pipe to ASTM D2241 SDR 26 (160) for the product water from the Plant building to the Reservoir.

		(b)
	a 24-inch HDPE pipe to AWWA C-906 IPS-DR11 for the brine from the Plant building to the brine disposal well, provided by the Contractor in compliance with Clause 9.

The product water and brine pipelines shall be installed with approximately 30 inches ground cover.
The Contractor shall join his pipework at the respective connection points as indicated on the Contract Drawings.
Adjustment of Delivery Period by three (3) calendar months to allow for COVID-19 Supply Chain Disruptions and Planning and Building Control Unit (BCU) turnaround times
Clause 88 (on page 36 of the Procurement Documents):
Delete the reference to “fifteen (15) calendar months” and replace with “eighteen (18) calendar months”
Clause 89 (on page 37 of the Procurement Documents):
Delete the reference to “eighteen (18) calendar months” and replace with “twenty-one (21) calendar months”
Drawing C-01 (see APPENDIX K — DRAWINGS)):
The footprint of the new Plant building indicated on Drawing C-01 as “proposed RO building #3”) may, if deemed necessary, be increased beyond the maximum extent (70 feet x 85’) specified. The maximum footprint of the equipment slabs, however, cannot exceed the maximum extent (100 feet x 120 feet) specified.
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Procurement of and Operating Agreement for
a Sea Water Desalination Plant at
Red Gate Water Works
Grand Cayman, Cayman Islands
using
the Reverse Osmosis Process (2021)
TENDER ADDENDUM No. 3
Unless noted otherwise, all comments hereafter refer to the clauses in section 3 CONDITIONS OF CONTRACT (APPENDIX A – CONDITIONS OF ENGAGEMENT)
CLARIFICATION
Clause 6 (on page 22 of the Procurement Documents)
The location and number of proposed abstraction wells, as shown on Drawing C-01 (see APPENDIX K — DRAWINGS), is indicative only; the combined capacity of all abstraction wells must be sufficient to provide the full feed water flow required for the design production capacity of the Plant. However, all abstraction wells must be situated within the lay-down area.
The following is provided for information purposes only:
		●	The four (4) feedwater abstraction wells for RO Building #1, which has a design water production capacity of 5,000 cubic metres per day, were drilled to 150 feet total depth and each has a 10” well casing 100 feet deep.

		●	The three (3) feedwater abstraction wells for RO Building #2, which has a design water production capacity of 6,000 cubic metres per day, comprise two (2) wells drilled to a total depth of 160 feet, with a 14” well casing 100 feet deep; and one (1) well drilled to a total depth of 154 feet, with a 16” well casing 96 feet deep.

		●	The three (3) feedwater abstraction wells for RO Building #2 are not shown on Drawing C-01, but the closest one is situated approximately 300 feet south-east of the proposed sewer connection point “C”.

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Clause 9 (on page 22 of the Procurement Documents) 
The following is provided for information purposes only:
		●	The brine disposal well for RO Building #1 was drilled to 250 feet total depth and has a 12” well casing 200 feet deep.

		●	The brine disposal well for RO Building RO Building #2 was drilled to 300 feet total depth and has a 14” well casing 211 feet deep.

MODIFICATIONS:
Adjustment of Prices/Rates to allow for COVID-19 Supply Chain Disruptions
As per item 1.6.4 (Part 1 - INVITATION AND SUBMISSION INSTRUCTIONS) (page 8 of the Procurement Documents) and item 8 on APPENDIX B -SUBMISSION FORM (page 49 of the Procurement Documents) the proposal shall be irrevocable for a period of 165 days following the Submission Deadline. This requirement remains to allow a proper evaluation of the various proposals.
Item 4 on APPENDIX B -SUBMISSION FORM (page 48 of the Procurement Documents) states that “no adjustment shall be made to any prices/rates as a consequence of any variations in the cost of labour, plant, materials or transport”.
The above notwithstanding, the Authority acknowledges that a 165-day irrevocable period in an inflationary environment and a time of volatility in the commodity markets could expose a Contractor to considerable market risk, and an adjustment to the purchase price of the Plant is therefore reasonable.
Clause 62 (on page 31 of the Procurement Documents)
Add the following at the end of this clause:
The purchase price of the Plant shall be adjusted as follows:
		(c)
	The United States dollar portion of the purchase price (Item 1 in the Schedule of Fees) shall be:

“Amount of Sub-Clause 62 (a)” x ( YY / XX)
(Note: “XX” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 31 December 2021; and
“YY” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted – Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 31 December 2022)
​
​

​

​

		(d)
	The Cayman Islands dollar portion of the purchase price (Item 2 in the Schedule of Fees) shall be:

“Amount of Sub-Clause 62 (b)” x (AA/ZZ)
(Note: “ZZ” is the value of the Cayman Islands Consumer Price Index on 31 December 2021; and
“AA” is the value of the Cayman Islands Consumer Price Index on 31 December 2022)
Clause 63 (on page 31 of the Procurement Documents)
Add the following at the end of this clause:
		(c)
	The “purchase price of the Plant” as referred to in this Clause 63 shall mean the purchase price of the Plant (as per the Schedule of Fees, Items 1 and 2), adjusted as per sub-clauses 62 (c) and 62 (d)

Updated reference dates for annual inflation adjustment.
Clause 67 Monthly Overheads Fee
Delete the entire clause and replace with the following:
Beginning on the First Delivery Date, and on every 1st January thereafter, the Monthly Overheads Fee shall be calculated as follows:
(a)The United States dollar portion of the Monthly Overheads Fee shall be:
“Amount of Sub-Clause 66 (a)” x (UScurrent / AAA)
(Note: “AAA” is the final value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2021. (At the time the Tender Addendum No. 3 was issued, the published value was 239.976, but this is only a preliminary index, and still subject to revision)).
		(b)
	The Cayman Islands dollar portion of the Monthly Overheads Fee shall be:

“Amount of Sub-Clause 66 (b)” x (Clcurrent / 118.0)
(Note: “118.0” is the value of the Cayman Islands Consumer Price Index on 30 September 2021)
​

​

​

Clause 71 Quantity Fee
Delete the entire clause and replace with the following:
Beginning on the First Delivery Date, and on every 1st January thereafter, the Quantity Fee shall be calculated as follows:
		(a)
	The United States dollar portion of the Quantity Fee shall be: 

“Amount of Sub-Clause 70 (a)” x (UScurrent / AAA)
(Note: “AAA” is the final value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2021. (At the time the Tender Addendum No. 3 was issued, the published value was 239.976, but this is only a preliminary index, and still subject to revision)).
		(b)
	The Cayman Islands dollar portion of the Quantity Fee shall be:

“Amount of Sub-Clause 70 (b)” x (Clcurrent / 118.0)
(Note: “118.0” is the value of the Cayman Islands Consumer Price Index on 30 September 2021)
APPENDIX C - PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS
Add the following at the end of item 2 (see page 53 of the Procurement Document):
Provide with the preliminary layout of the Plant building, the manufacturer’s name and product description for the major Plant equipment proposed.
The following is an Authority-preferred, but not exclusive, list of manufacturers for certain Plant equipment items.
	Item Description
	Manufacturer

	Membranes
	Dow Filmtec; Toray;

	Membrane Pressure Vessels
	Bel; CodeLine

	High Pressure Pumps
	Fedco; Flowserve; KSB; Sulzer

	Variable Frequency Drives (VFDs)
	Allen Bradley; Square-D; Cutler-Hammer; General Electric

	Pump Motors
	Siemens; Marathon; TECO; WEG

	Energy Recovery Vessels
	Energy Recovery (ER)

	Second Pass Pumps
	Goulds; Flowserve

	Motor Starters
	Allen Bradley; Square-D; Cutler-Hammer; General Electric

	Emergency Generator
	Kohler; Onan-Cummings; Caterpillar

	Water Quality Monitoring Equipment
	GF Signet

​
​

​

​

APPENDIX B - SUBMISSION FORM
1.Proponent Information
	​

	​

	Please fill out the following form, naming one person to be the Proponent’s contact for the procurement process and for any clarifications or communication that might be necessary.

	Full Legal Name of Proponent:
	Ocean Conversion Cayman Limited

	Any Other Relevant Name under which Proponent Carries on Business:
	N/A

	Street Address:
	PO Box 1114, Regatta Office Park, Windward 3, 4th Floor

	City, Province/State:
	Seven Mile Beach, Grand Cayman, Cayman Islands

	Postal Code:
	KY1-1102

	Phone Number:
	345-945-4277

	E-mail Address:
	fmctaggart@cwco.com

	Company Website (if any):
	www.cwco.com (Parent Company)

	Proponent Contact 
Name and Title:
	Frederick W. McTaggart, President & CEO

	Proponent Contact Phone:
	345-945-4277

	Proponent Contact Email:
	fmctaggart@cwco.com 

​
	2.
	Offer

The Proponent has carefully examined the Procurement Documents and has a clear and comprehensive knowledge of the Deliverables required. By submitting a proposal, the Proponent agrees and consents to the terms, conditions and provisions of the Procurement Documents, including the form of Agreement, and offers to provide the Deliverables in accordance therewith at the prices/rates set out in the completed Schedule of Fees (in the Appendix to the Agreement) in APPENDIX A - CONDITIONS OF ENGAGEMENT.
	3.
	Acknowledgement of Non-binding Procurement Process

The Proponent acknowledges that the procurement process will be governed by the terms and conditions of the Procurement Document, and that, among other things, such terms and conditions confirm that this procurement process does not constitute a formal, legally binding bidding process (and for greater clarity, does not give rise to a process contract), and that no legal relationship or obligation regarding the procurement of any goods or service will be created between the Authority and the Proponent unless and until the Authority and the Proponent execute a written agreement for the Deliverables.
​
​

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	4.
	Prices/Rates

The Proponent has submitted its prices/rates in accordance with the instructions in the Procurement Documents. The Proponent confirms that the prices/rates inserted in the Schedule of Fees (in the Appendix to the Agreement) are the full inclusive value of the work described in the Procurement Documents, including all costs and expenses which may be required in and for the work and/or activities described, together with all general risks, liabilities and obligations set forth or implied therein.
No adjustment shall be made to any prices/rates as a consequence of any variations in the cost of labour, plant, materials or transport.
All prices/rates submitted shall be in United States dollars (US$) and Cayman Islands dollars (Cl$), as specified in the various clauses.
	5.
	Addenda

The Proponent is deemed to have read and accepted all addenda issued by the Authority prior to the Deadline for Issuing Addenda. The onus is on Proponents to make any necessary amendments to their proposals based on the addenda. The Proponent is requested to confirm that it has received all addenda by listing the addenda numbers, or if no addenda were issued by writing the word “None”, on the following line:  Addenda #1, #2 and #3.
Proponents who fail to complete this section will be deemed to have received all posted addenda.
	6.
	No Prohibited Conduct

The Proponent declares that it has not engaged in any conduct prohibited by this Procurement Document.
	7.
	Conflict of Interest

For the purposes of this Procurement Document, the term “Conflict of Interest” includes, but is not limited to, any situation or circumstance where:
	(a)
	in relation to the procurement process, the Proponent has an unfair advantage or engages in conduct, directly or indirectly, that may give it an unfair advantage, including but not limited to (i) having, or having access to, confidential information of the Authority in the preparation of its proposal that is not available to other Proponents, (ii) communicating with any person with a view to influencing preferred treatment in the procurement process (including but not limited to the lobbying of decision makers involved in the procurement process), or (iii) engaging in conduct that compromises, or could be seen to compromise, the integrity of the open and competitive procurement process or render that process non-competitive or unfair; or

	(b)
	in relation to the performance of its contractual obligations contemplated under a contract for the Deliverables, the Proponent’s other commitments, relationships or financial interests (i) could, or could be seen to, exercise an improper influence over the objective, unbiased and impartial exercise of its independent judgement, or (ii) could, or could be seen to, compromise, impair or be incompatible with the effective performance of its

​
​

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contractual obligations.
For the purposes of section (a)(i) above, Proponents should disclose the names and all pertinent details of all individuals (employees, advisers, or individuals acting in any other capacity) who (a) participated in the preparation of the proposal; AND (b) were employees of the Authority within twelve months prior to the Submission Deadline.
If the box below is left blank, the Proponent will be deemed to declare that (a) there was no Conflict of Interest in preparing its proposal; and (b) there is no foreseeable Conflict of Interest in performing the contractual obligations contemplated in the Procurement Documents.
Otherwise, if the statement below applies, check the box.
	☐
	The Proponent declares that there is an actual or potential Conflict of Interest relating to the preparation of its proposal, and/or the Proponent foresees an actual or potential Conflict of Interest in performing the contractual obligations contemplated in the Procurement Documents.

If the Proponent declares an actual or potential Conflict of Interest by marking the box above, the Proponent must set out below details of the actual or potential Conflict of Interest:
	N/A
	​

	​
	​

​
8. Proposal Irrevocable
The Proponent agrees that its proposal shall be irrevocable for a period of 165 days following the Submission Deadline.
9. Disclosure of Information
The Proponent hereby acknowledges that any information provided in this proposal, even if it is identified as being supplied in confidence, is subject to the provisions of the Freedom of Information Law (latest revision), and may be disclosed where required by law or by order of a court. The Proponent hereby consents to the disclosure, on a confidential basis, of this proposal by the Authority to the advisers retained by the Authority to advise or assist with the procurement process, including with respect to the evaluation this proposal.
​
​

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	10.
	Execution of Agreement

The Proponent agrees that in the event its proposal is selected by the Authority, it will finalize and execute the Agreement in the form set out in APPENDIX A - CONDITIONS OF ENGAGEMENT in accordance with the terms of this Procurement Document.
​
	​

	​

	​

	
	​
	

	Signature of Witness
	    
	Signature of Proponent Representative

	​
	​
	​

	Ramjeet Jerrybandan
	​
	Frederick McTaggart

	Name of Witness
	​
	Name of Proponent Representative

	​
	​
	​

	​
	​
	President and CEO

	​
	​
	Title of Proponent Representative

	​
	​
	​

	​
	​
	January 14, 2022

	​
	​
	Date

	​
	​
	​

	​
	​
	I have the authority to bind the Proponent

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​

Page 50 | 87

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January 14, 2022
Tom van Zanten, Deputy Director
Water Authority Cayman
Box 1104
Grand Cayman, KY1-1102
Cayman Islands
Dear Mr. van Zanten,
	Re:
	Proposal for Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021)

Ocean Conversion Cayman confirms the submission of all Mandatory Technical requirements, per the Tender document, Appendix C, Section C, enclosed.
Yours sincerely,
FOR OCEAN CONVERSION (CAYMAN) LIMITED
	/s/ Frederick W. McTaggart
	​

	Frederick W. McTaggart
	​

	Director
	​

​
​

​
​

Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax (345) 949-2957, Email: info@cwco.com

​

APPENDIX C- PROJECT PARTICULARS
A.THE DELIVERABLES
Project Overview
The purpose of the Works is to provide and operate a Reverse Osmosis Plant designed to process potable water from sea water and deliver the potable water by means of a pipeline to water storage reservoirs owned and operated by the Water Authority (“Authority”).
The Plant shall be located at the Authority’s Red Gate Water Works at Red Gate Road, George Town, Grand Cayman, Cayman Islands, Block 20B, Parcel 410, property owned by the Authority.
The Plant shall have a production capacity of 10,000 cubic metres of potable water per day (2.64 million US gallons per day) and shall be designed in such a way that the production capacity is achieved by no less than two (2) independent RO trains (except for the feedwater pumps and wells, brine disposal well and post-treatment system (i.e., air stripping tower and wet gas scrubber) which may be common to both trains).
The quality of the potable water produced shall be within the maximum permissible levels as set out in APPENDIX F.
The Authority shall be responsible for the post-treatment (e.g., disinfection, corrosion inhibition, and pH stabilization) and for the distribution of the water.
The successful Tenderer shall operate and maintain the Plant for a period of ten (10) years. The Authority shall pay a fixed amount (adjusted for inflation) each month to cover the Tenderer’s overheads, in addition to a fee (adjusted for inflation) and an energy fee for each cubic metre of potable water produced.
The Tenders shall be evaluated on the basis of the cost of water, the experience of the Tenderers, and the proven performance record of the equipment offered.
For consideration of his Tender, the Tenderer shall submit a Testimonial Letter demonstrating that he has designed, built and continuously operated at least three (3) similar sea water reverse osmosis (“SWRO”) plants of similar design, each with a design water production capacity of not less than 2,500 m3/d (0.66 MGD) (at least one of which must have a design water production capacity of not less than 5,000 m3/d (1,32 MGD)), and utilizing similar membranes as specified in his Tender. These aforementioned plants shall have been in successful operation for a period of not less than seven (7) years. Also, the ability of a Tenderer to show an operational plant provided under a similar agreement will be an advantage.
B.MANDATORY SUBMISSION REQUIREMENTS
		1.
	Proposed Contract (APPENDIX A — CONDITIONS OF ENGAGEMENT)

Each proposal must include the duly completed form of Agreement, comprising AGREEMENT and OFFER
​
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		2.
	Submission Form (APPENDIX B - SUBMISSION FORM)

Each proposal must include the duly completed Submission Form (APPENDIX B), with items 1, 4 and 6 completed, and item 9 completed and signed by an authorized representative of the Proponent.
		3.
	Schedule of Fees (APPENDIX A - CONDITIONS OF ENGAGEMENT)

Each proposal must include a duly completed Schedule of Fees (Appendix to the Agreement
		4.
	Other Mandatory Submission Requirements

None
	C.
	MANDATORY TECHNICAL REQUIREMENTS

The Tender shall be clear and concise and shall include sufficient detail for effective evaluation and for substantiating the validity of stated claims. The Tenderer shall assume that the Authority has no prior knowledge of the Tenderer’s experience and will base its evaluation on the information presented in the Tender.
The Tender must include, but does not necessarily have to be limited to, the following:
		1.
	Confirmation that the Tenderer meets the specified eligibility criteria, as per Item 2 of APPENDIX A - CONDITIONS OF ENGAGEMENT.

		a.
	Tenderers must:

		i)
	either comply with all applicable local laws and regulations, including business regulations, including, but not limited to, having a Trade and Business license, and comply with the Local Companies (Control) Law (latest revision) and the Companies Law (latest revision), or

		ii)
	provide confirmation that they have sought independent legal and any other appropriate advice on all applicable local laws and regulations relating to carrying on business in the Cayman Islands and that if their tender is accepted, and they are the selected Proponent, they will be in a position to comply with all such local laws and regulations within forty-five (45) days of the notice of selection (as per PART 2 – EVALUATION AND AWARD)

		b.
	Tenderers must provide Past Performance Data and References for at least three (3) similar SWRO plants, each with a design water production capacity of not less than 2,500 m3/d (0.66 MGD) (at least one of which must have a design water production capacity of not less than 5,000 m3/d (1.32 MGD)) which use commercially available isobaric energy recovery devices, that will confirm that the company has successfully designed, constructed and continuously operated these SWRO plants for a period of not less than seven (7) years. Prior experience with SWRO plants using (saline groundwater containing hydrogen sulphide) feed water wells rather than sea water intakes will be an advantage. The Past Performance Data shall clearly identify and describe these SWRO plants and the Tenderer’s involvement. The ability of a Tenderer to show an operational plant under an agreement, similar to this one, will be advantageous (also refer to APPENDIX D – REFERENCES FORM).

​

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		c.
	Tenderers must provide their Corporate Information which shall include, as a minimum, the following:

		1.
	Certificate of Incorporation.

		2.
	Memorandum and Articles of Association,

		3.
	Copy of any Shareholders’ or Partnership Agreement(s).

		4.
	The Proponent’s contact for the procurement process (complete APPENDIX B - Submission Form)

		5.
	Certified copy of board resolution or minute approving the submission and contents of the Tender.

		6.
	For a Joint Venture also add a copy of the joint venture agreement between or among the joint venture parties.

		i.
	Tenderers shall provide references for each firm participating in a Joint Venture or teaming arrangement, and specifying what each firm will contribute to that arrangement

		7.
	Audited financial statements for the last five (5) years or such other documentation that can be independently verified.

		d.
	Tenderers must provide the name(s) and resume(s) of the intended principal(s) that will be employed full-time on Grand Cayman to oversee and manage the operations for a minimum of the first three (3) years after the First Delivery Date

		1.
	All such principals shall have an Engineering degree and at least seven (7) years’ experience with operating and maintaining SWRO plants with isobaric energy recovery systems.

		2.
	A preliminary layout of the Plant building, clearly indicating the R.O. equipment modules, and the space available between and around them for maintenance accessibility.

		3.
	A programme for the completion and installation of the Plant, provided in the form of a Gantt Chart with (as a minimum) information on the following activities:

		a.
	design of the civil works and Plant

		b.
	approval of the civil works by the relevant authorities

		c.
	construction of the civil works,

		d.
	construction of the feed water abstraction wells

		e.
	manufacture and shipment of Plant equipment to the site

		f.
	installation of the Plant equipment

		g.
	commissioning of the Plant.

The names and the resume of the principals and all the other information listed above must be submitted under the section “PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH” as indicated in PART 1 - INVITATION AND SUBMISSION INSTRUCTION Section 1.6 Submission of Proposals.
	D.
	ASSESSMENT CRITERIA

Stage I — Mandatory Submission Requirements (as per PART 2 — EVALUATION AND AWARD)
Tender Evaluation Criteria: Certain elements of the Tender are mandatory, the submission of these will determine whether a Tender is “compliant or not”, failure to submit any mandatory items will result in a “failed” Tender and will not be assessed further.

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a)Mandatory items (Pass or Fail):
		(1)
	One (1) completed and signed copy of APPENDIX A – CONDITIONS OF ENGAGEMENT, including the completed form of Agreement and the Appendix to the Agreement (Schedule of Fees)

		(2)
	Confirmation of ability to comply with all applicable local laws and regulations relating to carrying on business in the Cayman Islands within forty-five (45) days of the notice of selection.

		(3)
	Past Performance Data (incl. References).

		(4)
	Corporate Information (incl. financial data).

		(5)
	Staff Experience, particularly those of principal and plant senior staff.

		(6)
	Any other required information as indicated in the Procurement Documents

The Technical Assessment (Criteria b) and Costing Analysis (Criteria c) and will only be carried out for those Tenderers that have satisfactorily passed this item a) Assessment Criteria (Mandatory Items (Pass or Fail)).
Stage II – Mandatory Technical Requirements (as per PART 2 — EVALUATION AND AWARD)
		b)
	Evaluation of Mandatory Technical Requirements

The assessment of the Rated Criteria is by definition subjective. Therefore, a small number of Authority staff (up to three (3)) will review and score each proposal independently. The scoring for the Mandatory Technical Requirements shall be the average of the independent scores.
Assessment of Mandatory Technical Requirements (max. 20 points):
		1.
	Standard of Tender Submission (i.e., Quality/Comprehensiveness) (max 5 points)

		2.
	Company Information, including References (***)(max 5 points)

		3.
	Experience of principal and plant senior staff (max 5 points)

		4.
	Past Performance Data (Experience, Relevance) (max 5 points)

		(***):
	The Company Information referred to in this item should be relevant to this contract, i.e., covering the operation and maintenance of SWRO plants (as stated in the Tender Documents)

For each proposal, each category of the Rated Criteria will be scored between 0 (poor) and 5 (excellent).
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The following summarizes the categories and the descriptions of the rated criteria.
	​

	​

	​

	#

	Category

	Maximum Score

	1

	Standard of Tender Submission (i.e., quality, comprehensiveness)

	5

	2

	Company Information, including References

	5

	3

	Experience of principal and plant senior staff

	5

	4

	Past Performance Data (Experience, Relevance)

	5

	​

	Sub-Total

	20

​
Stage III — Pricing (as per PART 2 — EVALUATION AND AWARD)
		c)
	Pricing (Cost Analysis) (max. 150 points):

Three (3) scenarios will be reviewed:
		1.
	Immediate Monthly Cost: using the fees as per the Tender (i.e., Base Monthly Overheads Fees, Base Quantity Fees, and Specific Energy Consumption Guarantee of Plant (ENCONspec)) and a cost of electricity of CI $ 0.27/kWh), applied to an average daily quantity of 5,000 cubic metres (**) for a period of 30 days.

		2.
	Future Monthly Cost (i): using the fees inflated as per the Tender (assuming a cumulative inflation of 16%) and a cost of electricity of CI $ 0.34/kWh), applied to an average daily quantity of 6,500 cubic metres for a period of 30 days.

		3.
	Future Monthly Cost (ii):  using the fees inflated as per the Tender (assuming a cumulative inflation of 23%) and a cost of electricity of CI $ 0.40/kWh), applied to an average daily quantity of 8,000 cubic metres for a period of 30 days.

		(**):
	The quantity of water produced by the existing Red Gate SWRO plant in the last 17 months (April 2020-August 2021) averaged 3,430 cubic metres per day.(The quantity of water produced by the existing Red Gate SWRO plant in the prior 14-month period (pre-COVID) averaged 4,280 cubic metres per day).

In order to properly account for the purchase price of the Plant in the Cost Analysis, a Monthly Capital Cost will be added in each of the aforementioned three (3) scenarios.
The Monthly Capital Cost will be calculated as the purchase price amortized over ten (10) years using an annual interest rate of 4.0%, or
		●	0.0101 * purchase price of the Plant for expenses incurred outside the Cayman Islands expressed in United States dollars (“US $”), PLUS

		●	0.0101 * purchase price of the Plant for expenses incurred locally, expressed in Cayman Islands (“Cl $”) dollars.

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For each of these 3 scenarios, each proposal will be awarded points as follows: 50 * P;
where
P = (Lowest Total Monthly Cost of All Proposals/Each Proposal’s Total Monthly Cost)
	​

	​

	​

	#

	Category

	Maximum Score

	5

	Pricing — Immediate Monthly Cost

	50

	6

	Pricing — Future Monthly Cost (i)

	50

	7

	Pricing — Future Monthly Cost (ii)

	50

	​

	Sub-Total

	150

​
The successful Tenderer will be the company that has the highest combined score of Assessment Criteria b and c (max possible score 170 points)
E. PRE-CONDITIONS OF AWARD
1.Proof of Trade and Business license
2.Proof of compliance with the Local Companies (Control) Law (latest revision)
3.Proof of compliance with the Companies Law (latest revision)
4.Use of Acceptable Sub-Contractors
		a.
	The selected Proponent shall provide a list of the Sub-Contractors he proposes to use on the Works and the activities that each of the Sub-Contractors is to carry out. The selected Proponent shall submit an experience statement with pertinent information regarding similar projects and other evidence of qualification for each such Sub-Contractor.

		b.
	Any Sub-Contractor listed and to whom the Authority makes written objection prior to the giving of the Letter of Acceptance (Issued as per APPENDIX A – CONDITIONS OF ENGAGEMENT) will be deemed unacceptable to the Authority and shall be substituted with a Sub-Contractor acceptable to the Authority. If the selected Proponent declines to make a substitution of a Sub-Contractor acceptable to the Authority, the Authority may award the contract to the next highest ranked Proponent that proposes to use acceptable Sub-Contractors.

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​
January 14, 2022
Tom van Zanten, Deputy Director
Water Authority Cayman
Box 1104
Grand Cayman, KY1-1102
Cayman Islands
Dear Mr. van Zanten,
	Re:
	Proposal for Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021)

Please find enclosed Appendix D References including Past Plant Performance Data, per the Tender request, Appendix D and Appendix C, Section C1b.
Yours sincerely,
FOR OCEAN CONVERSION (CAYMAN) LIMITED
​
	​

	​

	/s/ Frederick W. McTaggart
	​

	Frederick W. McTaggart
	​

	Director
	​

​
​

Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax (345) 949-2957, Email; info@cwco.com

​

[*****]
​
​

​

​

All correspondence to the Respondent should be directed to:
Frederick W. McTaggart
Ocean Conversion (Cayman) Limited
P.O. Box 1114
Windward Three, Fourth Floor
Regatta Office Park, West Bay Road
Grand Cayman, KY1-1102
Cayman Islands
Tel: 345-945-4277
Fax: 345-949-2957
Email: fmctaggart@cwco.com
I confirm that we have received and read the following Addenda:
1.Addendum No. 1
2.Addendum No. 2
3.Addendum No. 3
I trust that the information provided in this document is satisfactory and look forward to hearing from you when you have made a decision regarding award of the tender.
Yours sincerely,
FOR OCEAN CONVERSION (CAYMAN) LIMITED
​
	​

	​

	/s/ Frederick W. McTaggart
	​

	Frederick W. McTaggart
	​

	Director
	​

​
​

Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax (345) 949-2957, Email; info@cwco.com

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APPENDIX E - ANALYSIS OF WELL WATER (TYPICAL VALUES)
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	Parameter
	​
	Testing Method
	​
	Red Gate RO
	​
	North Sound RO

	​
	​
	​
	​
	Plant
	​
	Plant Feed Wells

	​
	​
	​
	​
	Feed Wells (*)
	​
	(**)

	Alkalinity
	    
	Titration
	    
	180
	    
	150

	Bicarbonate
	​
	Calculation
	​
	220
	​
	185

	Calcium
	​
	EDTA Titrimetric
	​
	740
	​
	470

	Chloride
	​
	Argentometric
	​
	19,900
	​
	19,450

	Hardness
	​
	EDTA Titrimetric
	​
	6,400
	​
	6,800

	Magnesium
	​
	Calculation
	​
	1,200
	​
	1,370

	pH (units)
	​
	Electrometric
	​
	7.1
	​
	7.1

	Sodium
	​
	Na-selective  electrode
	​
	10,150
	​
	n/d

	Sulphate
	​
	Turbidimetric (barium chloride)
	​
	3,100
	​
	3,100

	Sulphide
	​
	Methylene Blue
	​
	4.3
	​
	4.0

	Electrical Conductivity
	​
	Electrometric
	​
	52,750
	​
	54,000

	(μS/cm)
	​
	  
	​
	  
	​
	  

	Total Dissolved Solids
	​
	Gravimetric
	​
	37,100
	​
	38,050

	​
	​
	(Dried @ 180°C)
	​
	​
	​
	​

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Notes:
All values are in mg/I, unless stated otherwise
(*)Average results from samples of feed water taken (annually) during the period February 1996 to July 2017.
(**)Average results from samples of feed water taken (annually) during the period November 2002 to July 2017.
Results of individual sampling tests are provided on the next page.
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APPENDIX F - QUALITY OF PRODUCT WATER
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	Parameter
	​
	Testing
	​
	Allowable
	​
	Maximum
	​
	Notes

	​
	​
	Method
	​
	Value
	​
	Value
	​
	​

	​
	​
	​
	​
	(mg/I, unless
	​
	(mg/I, unless
	​
	​

	​
	​
	​
	​
	stated
	​
	stated
	​
	​

	​
	​
	​
	​
	otherwise)
	​
	otherwise)
	​
	​

	​
	​
	​
	​
	​
	​
	​
	​
	(1, 2)

	pH (units)
	    
	Electrometric
	    
	6.5 - 7.5
	    
	6.0 - 8.0
	    
	​

	Boron
	​
	Colorimetric
	​
	1.2
	​
	2.4
	​
	​

	Sulphide
	​
	Methylene Blue
	​
	0.01
	​
	0.02
	​
	(3)

	Total Chlorine Residual
	​
	Colorimetric
	​
	0.00
	​
	0.10
	​
	(3)

	Electrical Conductivity (μS/cm)
	​
	Electrometric
	​
	400
	​
	800
	​
	(4)

	Total coliform bacteria
	​
	Enzyme
	​
	0
	​
	1
	​
	​

	(cfu/100ml)
	​
	Substrate
	​
	​
	​
	​
	​
	​

	E. Coli
	​
	Enzyme
	​
	0
	​
	1
	​
	​

	​
	​
	Substrate
	​
	​
	​
	​
	​
	​

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Notes:
Note 1: All water quality testing shall be conducted by the Water Authority Laboratory, or by a laboratory accredited for testing of potable water.
Note 2: All other parameters of the product water shall not exceed the values as published in the latest edition of the WHO Guidelines for Drinking Water Quality.
Note 3: The specified sulphide levels of the product water shall be achieved by the proper design and operation of the air stripper (99.7% or better removal efficiency). However, in the event that additional post-treatment is required to lower the sulphide levels to acceptable levels, these post-treatment methods shall be submitted to the Authority for approval. Chlorination of the product water shall not be an acceptable method to further reduce the sulphide levels.
Note 4: Electrical Conductivity meters shall be calibrated with appropriate standards relevant to product water quality.
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APPENDIX G - SPECIFICATIONS FOR CONSTRUCTING FEED WATER
ABSTRACTION AND BRINE DISPOSAL WELLS
1. GENERAL
	1.
	These specifications describe the minimum requirements for constructing the feed water abstraction and brine disposal wells at the Water Authority’s Red Gate Water Works.

	2.
	The wells are expected to range in total depth from about 150 to 300 feet below land surface. The production (feed water abstraction) wells shall be approximately 200 feet in total depth with the cased portion extending from land surface to a depth of at least 150 feet. The cased portion of the brine disposal well shall extend at least 50 feet deeper than the deepest production well (see Figure 1).

	3.
	Well construction shall generally be in accordance with the EPA/NWWA “Manual of Water Well Construction Practices” (EPA-570/9-75-001).

	4.
	The only allowed well construction method shall be the (mudless) reverse circulation rotary drilling method (Note: Straight air rotary drilling will be allowed up to approximately 40 feet depth below water table). Due to the sensitive area (i.e., situated close to existing residences and Water Authority facilities) well drilling methods that (may) transfer large quantities of saline water to the surface in an uncontrolled manner (e.g., air rotary drilling method) cannot be allowed. Although the conventional fluid rotary drilling method would not present this problem, the anticipated cavities in the geology may result in loss of circulation which would be difficult (i.e., expensive) to restore and this method is therefore not considered a practical alternative. The cable tool method is considered impractical due to the large well diameter required.

	5.
	All labour, materials and equipment shall be provided by the Contractor.

2. SUBSURFACE INFORMATION
	1.
	The Cayman Islands are formed on Bluff and Ironshore Formations. The Oligocene-Miocene Bluff Formation is a massive, dense, white to light tan, finely crystalline dolostone. A rugged karst terrain characterizes surface exposures and extensive cave systems occur in the subsurface. The Pleistocene Ironshore Formation, which unconformably overlies the Bluff Formation, is formed of poorly lithified limestone. The Red Gate Site is situated over the Ironshore Formation.

	2.
	A significant number of publications are available describing the geology of Grand Cayman. The following references are given for information only:

Jones, B., 2000. Geology of the Cayman Islands, University of Alberta, Edmonton.
Ng, K. - C., 1990. Diagenesis of the Oligocene - Miocene Bluff Formation of the Cayman Islands - a petrographic and hydrogeochemical approach. Ph.D. Dissertation, University of Alberta, Edmonton, 344p.
Ng, K. - C., Jones, B. and Beswick, R., 1992. Hydrogeology of Grand Cayman, British West Indies: a karstic dolostone aquifer. J. Hydrol., 134: 273-295.
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3.PERMITS
The Contractor shall procure all permits required of him by law for the execution of the work. Abstraction and disposal permits can be obtained from the Water Authority.
4.EQUIPMENT AND PERSONNEL
The Contractor shall furnish capable and experienced personnel and suitable equipment to construct the wells and perform the required tests. The Authority shall reserve the right to inspect the equipment of the Contractor to assure qualification.
5.MATERIALS
1.   Well Casing
All well casing shall be new and shall be made of PVC and conforms to (or exceeds) one of the following standards:
a)ASTM D1785 Schedule 80, or
b)ASTM D2241 SDR 21, or
c)ASTM F-480-77 SDR 21.
All well casing shall have markings identifying the manufacturer, nominal size, type of material, dimension ratio and manufacturer’s code. Well casing shall also include the seal or mark of the laboratory making the evaluation for potable water applications.
2.   Annular Grout:
The following grout mixtures shall be used. (Note: The actual choice shall depend on the grouting method adopted):
		(i)
	Concrete Grout: A mixture of Portland cement (ASTM C150), sand, coarse aggregate and water in the proportion of at least five (5) bags of cement per cubic yard of concrete to not more than six (6) gallons of clean water per bag of cement (one cubic foot or 94 pounds) shall be used.

		(ii)
	Sand-Cement Grout: A mixture of Portland cement (ASTM C150), sand and water in the proportion of not more than two parts by weight of sand to one part of cement with not more than six (6) gallons of clean water per bag of cement (one cubic foot or 94 pounds) shall be used.

		(iii)
	Neat-Cement Grout: A mixture of Portland cement (ASTM C150) and water with not more than six (6) gallons of clean water per bag of cement (one cubic foot or 94 pounds) shall be used.

The following grouting materials shall be used for the above mixtures:
		(i)
	ASTM C150 Type II cement (API Class B Portland cement) shall be used for all well casing grout.

		(ii)
	Only fresh water shall be used for any grout mix.

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		(iii)
	Grout mixtures shall contain 3 to 5 lb. of bentonite for each 94 lb, sack of cement to reduce shrinkage. The bentonite shall be mixed with the water prior to adding the cement.

		(iv)
	The use of other admixtures (ASTM C494) to reduce permeability, increase fluidity, and/or control time of set, and the composition of the resultant slurry shall be approved by the Authority.

6. WELL CONSTRUCTION
Well Construction
	1.
	The only allowed construction method shall be the (mudless) reverse circulation rotary drilling method. The Contractor shall provide all equipment that will assure the proper execution of the drilling method. The Contractor shall provide a pump or pumps to properly operate the equipment.

	2.
	Any borehole shall be drilled five (5) to eight (8) inches larger than the nominal size of the casing to be installed, so as to provide an annular seal of at least two (2) inches thickness.

Well Casing Installation
	3.
	Casing lengths shall be joined watertight by an appropriate method, so that the resulting joint shall have the same structural integrity as the casing itself. Solvent welding shall be carried out in strict accordance with the manufacturer’s recommendations. Curing time for solvent cemented joints shall not be less than five (5) minutes, however actual set times shall be the responsibility of the Contractor. Well casing using mechanical joining shall be installed in strict accordance with the manufacturer’s recommendations.

	4.
	The well casing for the feed water abstraction well shall be suitably sized to accommodate the submersible feed water well pump and shall also provide sufficient clearances that will ensure good hydraulic efficiency at the well yield range. In any event the nominal size of the well easing shall be at least two (2) inches greater than the nominal feed water well pump size.

	5.
	The well casing for the brine disposal well shall be at least twelve (12) inches nominal diameter.

	6.
	The jointed casing string shall be lowered in the bore hole with the drilling machine, utilizing clamps, elevators or other mechanical devices.

	7.
	Centralizers shall be installed on the well casings and shall be spaced at a minimum of fifteen (15) feet intervals, but not exceeding thirty (30) feet intervals.

	8.
	The permanent deep well casing shall extent at least 100 feet below ground level (See Figure 1).

Annular Grout Seal
	9.
	The annular space between the casing and the borehole shall be grouted under pressure to provide an annular seal, from the base of the casing to land surface. To assure that grouting provides a satisfactory seal, the grout mixture shall be introduced at the base to minimize contamination and bridging, and shall be placed by a continuous operation before initial setting of the cement.

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	10.
	Prior to grouting the annular space shall be flushed with water to assure that the space is open and ready to receive the sealing material (Note: air lifting shall not be allowed).

	11.
	The preferred grouting method is the positive displacement - exterior method, using a concrete grout. However, as an alternative and after approval by the Authority, the Contractor may use either the positive displacement - exterior method using a sand-cement grout, or the float shoe continuous injection method using a sand-cement grout.

(i) The positive displacement - exterior method: Grout shall be injected in the annular space between the casing and the borehole. The annular space shall not be less than three times the size of the largest coarse aggregate used for concrete grout. The grout pipe shall extend from the surface to the bottom of the zone to be grouted. The grout pipe shall have a minimum inside diameter of one (1) inch for sand-cement grout. It shall have a minimum inside diameter of 1-1/2 inches for concrete grout. Grout shall be placed, from bottom to top, in one continuous operation. The grout pipe may be slowly raised as the grout is placed but the discharge end of the grout pipe must be submerged in the emplaced grout at all times until grouting is completed. The grout pipe shall be maintained full, to the surface, at all times until the completion of the grouting of the entire specified zone. In the event of interruption in the grouting operation, the bottom of the pipe shall be raised above the grout level and shall not be re-submerged until all air and water have been displaced from the grout pipe and the pipe flushed clean with clear water.
(ii) The float shoe continuous injection method: The bottom of the casing shall be fitted with a suitable drillable float shoe equipped with a back pressure valve. Tubing or pipe shall be run to the float shoe to which it shall be connected by a bayonet fitting, left hand thread coupling, or similar release mechanism. Water or other drilling fluid shall be circulated through the tubing and up through the annular space outside the casing. When the annular space is clean and open, grout shall be pumped down the pipe or tubing and forced by continual pumping out into the annular space surrounding the casing. Pumping shall continue until the entire zone to be grouted is filled. The grout pipe shall then be detached from the float shoe and raised to the surface for flushing. After the grout has set the float shoe, back pressure valve, and any concrete plug remaining in the bottom of the casing shall be drilled out. A sand-cement grout shall be used for this procedure. Concrete grout cannot be used with this method.
Location of Grout
	12.
	The surface formation grout seal surrounding the permanent well casing at the upper terminus of the well shall stabilizes the borehole wall. The length of the surface formation grout seal shall be determined by the contractor but shall not exceed 30 feet. The surface formation grout seal shall be completed and cured prior to drilling the well to the specified full depth.

	13.
	Grout shall normally be placed in the annular space surrounding the casing by the method specified. Grouting shall be continuous from the bottom of the casing to the land surface. However in the event that extensive fluid loss zones occur, grouting may be done in stages through the lowering and then raising the tremie pipe for a second pumping at a later time (which shall not occur until at least 24 hours have elapsed). In addition, portions of the annulus may, upon approval by the Authority, be filled with materials or mixtures of cement, drill cuttings, gravel, and bentonite.

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	14.
	The annular grout shall be allowed to cure at least 36 hours before drilling operations are resumed.

Open Hole Interval
	15.
	The Contractor shall select the open hole interval, provided however that the resulting average calculated entrance velocity at the ultimate pumping rate shall not exceed 1.2 feet per minute (0.02 foot per second). In any event the length of the open hole interval shall be at least fifty (50) feet for feed water wells, and at least sixty (60) feet for disposal wells.

Well development
	16.
	Well development, if required, shall be achieved by uninterrupted pumping, water jetting, and/or acidizing (washing with acid).

	17.
	Well development through uninterrupted pumping shall comprise a submersible pump or a vertical line-shaft turbine pump operating at pumping rates up to 2 times the ultimate design pumping capacity. The pumping rates shall be slowly increased from 1/4 to 2 times the ultimate design pumping capacity. The discharge of the pump shall be measured by a flow meter or other approved method.

	18.
	During well development through uninterrupted pumping the water levels shall be measured. A 1/2 inch nominal diameter or larger pipe shall be installed in the well from the well head to two (2) feet above the pump intake. The top of the pipe shall be readily accessible to insert, remove, and read the depth to water measurements on a 2-wire electric sonde, which shall be used to measure the static water level and drawdown in the well. A clearly marked convenient reference point shall be set at the top of the pipe. The sonde shall be furnished by the Contractor. The pumping water level shall be measured to the nearest 1/2 inch.

	19.
	As an alternative method, well developing by water jetting may also be used to produce the required yield. (Note: airlift surging will not be allowed). This method shall comprise simultaneous high-velocity, horizontal-jetting and pumping, commencing at the bottom of the bore hole and proceeding upwards to the bottom of the well casing. Pumping from the well shall be at a rate of 5 to 15 percent more than the rate at which water is introduced through the jetting tool.

	20.
	Discharged water resulting from the well development operation shall be conducted from the well to the nearest disposal well, as directed by the Authority, through approved piping. It is imperative to ensure that no damage by flooding is caused to the site or neighbouring properties.

	21.
	Acids for washing limestone may be used with approval of or direction by the Authority.

Well testing for performance
	22.
	After development, and at the discretion of the Authority, the well shall be pumped to verify that the allowed drawdown (for feed water wells) or head build-up (for brine disposal wells) is not exceeded at the anticipated pump rates (see APPENDIX H).

	23.
	The Contractor shall furnish, install and remove the necessary measuring instruments and pumping equipment capable of pumping to the required point of discharge at least twice the anticipated pump rate from the well being tested, and with satisfactory throttling devices, so that the discharge may be reduced to 25% of that pump rate The pumping unit shall be complete

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with an ample power source, controls and appurtenances and shall be capable of being operated without interruption for a period of eight (8) hours.
	24.
	The method of taking water level measurements shall be at the discretion of the Contractor; however, an accuracy to within 1/4 inch must be attained.

	25.
	Prior to starting the pump, water level measurements shall be made at least hourly, for a minimum of eight (8) hours, in the well to be tested and all observation wells, and these measurements shall be recorded on the same note sheets to be used during the pumping test.

	26.
	The well shall be “step” tested at rates of approximately 1/2, 3/4, 1 and 11/2 times the design pumping rate. The complete test is estimated to require approximately eight (8) hours. The Contractor shall operate the pump and change the discharge as directed by the Authority. Discharge of the pump shall be controlled by a gate valve, if electric driven, and both gate valve and engine throttle if engine driven. The discharge shall be controlled and maintained at approximately the desired discharge for each step with an accuracy of plus or minus 5 percent. Pump discharge shall be measured with an accurate totalizing meter and stopwatch, a circular orifice meter, or a Venturi meter, as approved by the Authority.

	27.
	Measurements of pumping rate and water levels shall be made every 1 minute for the first 10 minutes of the test, every two minutes for the next 10 minutes, every 5 minutes for the next 40 minutes, every 15 minutes for the next hour, every 30 minutes for the next 3 hours, and hourly for the remainder of the pumping period. Recovery water level measurements shall be made with the same frequency until sufficient data have been collected to extrapolate the full recovery of the well or until the Authority requires no further data.

	28.
	Failure of pump operation for a period greater than one percent of the elapsed pumping time shall require suspension of the test until the water level in the pumped well has recovered to its original level. For the purpose of this Clause, recovery shall be considered “complete” after the well has been allowed to rest for a period at least equal to the elapsed pumping time of the aborted test- except that if any three successive water level measurements spaced at least 20 minutes apart show no further rise in the water level in the pumped well, the test may be resumed immediately. The Authority shall be the sole judge as to whether this latter condition exists.

	29.
	Discharged water shall be conducted from the pump to the nearest disposal well, as directed by the Authority, through approved piping to prevent recirculation of discharged water into the aquifer being tested. It is imperative to ensure that no damage by flooding is caused to the site or neighbouring properties.

7. RECORD KEEPING
	1.
	During the drilling of the hole, the Contractor shall prepare and maintain a daily, detailed driller’s report. This report shall be delivered upon request to the Authority. The report shall give a complete description of all formations encountered, number of feet (meters) drilled, the depth at which the first water was encountered, number of hours on the job, shutdown due to breakdown, feet of casing set, and such other pertinent data as requested by the Authority.

	2.
	During the drilling of the hole, a time log shall be kept by the Contractor showing the actual penetration time required to drill each foot of hole. The type of bits used in each portion of the hole shall be noted in this log and whether designed for soft, medium, or hard formations,

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together with approximate weight of the bits during the drilling of the various types of formation in the various sections of the hole. This report shall be delivered upon request to the Authority.
3.The Contractor shall afford all reasonable opportunities for geologists employed by the Authority to collect, identify and store representative drilling samples. Flow samples shall be taken by removing from the circulating drilling fluid representative samples of the formation by either collecting same in a cutting sample box, a “shale shaker”, a baffle in a ditch, or catching them in a bucket and allowing the samples to settle out.
4.The Contractor shall keep accurate records of the pumping test and furnish copies of all records to the Authority upon completion of the test. The records shall also be available to the Authority for inspection at any time during the test. For each well used in the test, the records shall include physical data describing the construction features such as, but not limited to: well depth and diameter; open hole interval; a description of the measuring point and its measured height above land surface and/or mean sea level; the methods used in measuring water levels and pumping rates. An accurate description or sketch map of the well locations with identifying names or numbers and distances between wells shall be provided on each set of records. Records of measurements shall include the date of the test, the clock time and elapsed pumping time of each measurement, the depth to water below the measuring point, the pumping rate at the time of measurement, and any pertinent comments on conditions that may affect the measurements. Frequency of water-level measurements before, during, and after pumping shall be as specified by the Authority.
8. WELL PLUMBNESS AND ALIGNMENT
1.The completed well shall be sufficiently plumb and straight so that there will be no interference with the installation, alignment, operation, or future removal of the permanent well pump.
2.To demonstrate the compliance of the work with the requirements, the Contractor shall furnish all labour, tools and equipment and perform the tests described herein. The test for plumbness and alignment shall be made following construction of the well.
3.Alignment shall be tested by lowering into the well to a depth of at least fifty (50) feet (lowest anticipated pump setting) a section of pipe forty (40) feet long or a dummy of the same length. The outside diameter of the test pipe or dummy shall not be more than 1 inch smaller than the inside diameter of that part of the casing or hole being tested. The dummy when lowered into the casing shall pass freely the specified length of casing.
4.The test for plumbness shall be made with a plummet. Construct a tripod or frame similar to that shown in Figure 2. The centre of the pulley should be exactly ten (10) feet above the top of the well. The pulley shall be so located that the plumb line will come off its outer edge exactly over the centre of the well casing.
Make the plumb ring or plunger 1/4 inch smaller in diameter than the inside diameter of the well casing. It can be made from a piece of sheet steel or a short piece of pipe. Whichever is used, it must be heavy enough to keep the plumb line taut. The hub of the ring must not be solid as the water must pass through it as it is lowered in the well. The hole through which the plumb line passes must be in the exact centre of the ring. Knots or marks should be made every ten (10) feet on the plumb line, to indicate the depth the ring has been lowered in the well.
The well characteristics are determined by lowering the plumb ring ten (10) feet at a time and
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taking a reading at each location. If the plumb line passes exactly through the centre line at any location, the well is plumb at the depth the plumb ring is suspended. However, if the line does not pass through the well centre the well at that depth is out of plumb by an amount equal to the distance between the line and the well centre, plus an equal distance for each ten (10) feet that the plumb ring is below the floor level.
	5.
	Should the plumb or dummy fail to move freely through the specified length of casing or hole, or should the well vary from the vertical in excess of 1-1/2 times the smallest inside diameter of that part of the well being tested per hundred (100) feet of depth, the plumbness and alignment of the well shall be corrected by the Contractor at his own expense. Records of deflection readings and all other pertinent information shall be kept and made part of the permanent well log and record.

	6.
	Should the Contractor fail to correct the faulty alignment and plumbness, the Authority may refuse to accept the well.

9. WELL TOP TERMINATION
	1.
	At all times during the progress of the work and at completion, the Contractor shall use reasonable precautions to prevent either tampering with the well or the entrance of foreign material into it.

	2.
	Any well that is left uncompleted due to a recess (e.g., at the end of each work day) or delay in construction shall be capped with a water-tight threaded cap or equipped with some other type of ‘vandal-proof’ cover as approved by the Authority.

	3.
	Upon completion of the well, the Contractor shall install a suitable threaded, flanged, or solvent welded cap or compression seal so as to prevent any pollutants from entering the well.

	4.
	The watertight casing of any well shall extend not less than two (2) feet above the ground level elevation. There shall be no openings in the casing wall below its top.

	5.
	All well casings that project above ground shall be suitably protected against direct sunlight by the use of a water-based paint or placement of a cover or any sunlight screening material.

	6.
	The Contractor shall clean the well as soon as construction and testing of the well has been completed. The Contractor shall carry out adequate cleaning procedures where evidence indicates that normal well construction and development work have not adequately cleaned the well. All oil, grease, soil and other materials shall be removed from the interior of the well casing. Unless prior approval is obtained for employing chemicals or unusual cleaning methods, the cleaning operation shall be carried out by pumping and swabbing only.

10. SITE RESTORATION
	1.
	Upon completion of work the site shall be restored to its original contours. All equipment, materials, grouting and drilling fluids shall be removed from the site.

11. WORKING HOURS
	1.
	None of the Works shall be carried out during the night or on locally recognized days of rest without the consent of the Authority, except when work is unavoidable or absolutely necessary

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for the saving of life or property or for the safety of the Works, in which case the Contractor shall immediately advise the Authority.
12. PROTECTION OF SERVICES
	1.
	The Contractor shall contact representatives of all utilities to ascertain the location of all known underground apparatus and ensure that its position is clearly marked before drilling commences. The Contractor shall be fully responsible for any costs involved in repairing any apparatus previously located and marked by the utility where the damage has been caused by his operation.

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FIGURE 1
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APPENDIX H - OPERATION OF FEED WATER ABSTRACTION AND BRINE
DISPOSAL WELLS
	1.
	All wells shall be tested, both after initial development of the well and during the operation of the Plant, at intervals determined by the Authority, at the anticipated peak abstraction (or disposal) rate.

	2.
	The drawdown in the feed water abstraction well at peak abstraction rate shall not exceed three (3) feet (corrected for friction losses in the casing). In the event that the measured drawdown exceeds this maximum, the open hole interval shall be increased.

	3.
	Head build-up in the casing of the brine disposal well(s) at peak disposal rate shall not exceed seven (7) feet (3 psi) to avoid overstressing the annulus seal, which could result in excessive upward leakage of brine. In the event that the measured head build-up (corrected for friction losses in the casing) exceeds this maximum, the open hole interval shall be increased.

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APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS
1.    GENERAL
The Contractor shall operate and maintain all Plant (e.g., equipment, instrumentation, systems (SCADA, controls etc.), structures, and utilities) in such a manner as to satisfy the Plant performance standards and in accordance with the Operation Management Requirements as described in this APPENDIX I.
The Contractor shall maintain the Plant in good working order.
The Contractor shall maintain the aesthetic quality of the Plant, with due allowance for reasonable wear and tear.
The Contractor shall maintain adequate equipment inventory to facilitate the repair and replacement of equipment.
All operation services shall meet the Authority’s requirements and meet prudent industry practice standards and shall include, but shall not be limited to:
		(a)
	Operating and maintaining (to include repair and replacement) the Plant whilst meeting the water quality and quantity obligations under the Agreement, and in such a manner that the assets can achieve their design lives.

		(b)
	Operating the Plant in compliance with industry practices and appropriate Environmental and Safety standards;

		(c)
	Purchasing the necessary chemicals, membranes and other consumables required to achieve plant operation;

		(d)
	Determining appropriate staffing levels and maintaining these levels with competent staff;

		(e)
	Maintaining comprehensive records relating to Plant performance;

		(f)
	Providing monthly reports and invoices to the Authority and any additional reports as may be reasonably required;

		(g)
	Conducting appropriate inspections and making the Plant available for inspections by the Authority;

		(h)
	Obtaining and maintaining water and telecommunications services; (note: The Authority will enter into an electricity supply agreement with the electricity provider (Caribbean Utilities Company (CUC)) for the Plant and shall pay, on behalf on the Contractor, the monthly invoices (i.e., CUC bills) in accordance with the supply agreement.

		(i)
	Developing, implementing and enforcing of programs for safety, quality assurance and quality control;

		(j)
	Disposing appropriately of all discharge water and concentrate, and all other waste, (e.g., wastewater, spent chemicals);

		(k)
	Complying with all permits and Governmental approvals related to Plant operation;

		(I)
	Supporting the Authority for maintaining good relationships with the general public (including Plant tours, etc.).

		(m)
	Cleaning up and disposing of any chemical spills as instructed or required by the Authority, and/or the Chief Environmental Health Officer).

		(n)
	Carrying out the services in a safe manner that protects the health and safety of all operating personnel and people on or near the Site.

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2.    REPORTING
Within thirty (30) days prior to the anticipated First Delivery Date, the Contractor shall develop and submit for the Authority’s approval reporting procedures and forms for recording of Plant performance during the Term.
As a minimum, the Contractor shall provide the following reports:
a)Monthly Operating Report
b)Annual Operating Report
2.1  Monthly Operating Report Requirements
The Authority shall at all times have the right to enter any part of the Plant to carry out any inspection provided that Authority staff are fully conversant with and follow the Contractor’s health and safety requirements.
The Authority shall jointly with the Contractor conduct a walk through the Plant to verify that Plant operations and maintenance is being properly performed. Typically this joint walk through shall not be more frequent than once every month.
The Contractor shall prepare a Monthly Operating Report regarding the Plant performance, operations and maintenance. This report shall be submitted to the Authority no later than fifteen (15) days after the end of the Month.
The Monthly Operating Report shall include as a minimum the following:
		a)
	Compilations of the daily records of Water quantity (cubic metres) delivered to each Delivery Point.

		b)
	A summary of all test reports prepared during the month with respect to source (feed) water quality characteristics and parameters (e.g., temperature (degree Celsius), conductivity (μS/cm)).

		c)
	A summary of all test reports prepared during the month with respect to Water quality characteristics and parameters as specified in APPENDIX F.

		d)
	A copy of all test reports prepared during the month with respect to the pumping rate and the drawdown in the feed water abstraction wells.

		e)
	A description of recommended Plant or unit shutdowns for maintenance and repairs during the current month and anticipated during the following month.

		f)
	Description of unscheduled repairs.

		g)
	A list of significant preventive maintenance activities performed during this month and similar activities anticipated for the following month.

		h)
	Information on the performance of the RO membrane system (*)

		i)
	Any anticipated adverse conditions that may affect the ability of the Plant to receive and treat source water and deliver Water to each of the points of delivery.

		j)
	The results of any inspections conducted by governmental regulatory authorities during the current month, including recommended or required follow-up actions by the Contractor.

		k)
	The amount of electricity used during such month (in kWh).

		I)
	Information on any power outages that have occurred during the current month that have an impact on the ability of the Contractor to perform its obligations under this Agreement.

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		m)
	A description of all incidents wherein the Water quality standards and/or Water quantity requirements were not met, including the follow-up actions recommended by the Contractor to taken to eliminate or reduce the likelihood of re-occurrence.

		n)
	A description of any incidents (hazardous materials emergencies, security breaches, etc.) that adversely impacted Plant operations and Contractor’s ability to fulfil its obligations under this agreement.

		o)
	Summary of Contractor worker claims filed, third party claims filed, and updates on the status of existing claims.

		p)
	An update of the Mandatory Parts inventory.

		q)
	Semi-annually, an update of the total spare parts inventory.

		r)
	Any other data or information as requested by the Authority.

(*)  RO Membrane Performance
A normalization program shall be provided by the Contractor on the main control console in the control room. The normalization calculation algorithm shall be in accordance with the latest version of ASTM D4516 (Standard Practice for Standardizing Reverse Osmosis Performance Data) and must also be approved by the membrane manufacturer. Most data required for input to the normalization program shall be collected automatically through the programmable logic controller (PLC). The Contractor shall collect all other additional data (if any) and input the values in the PLC software interface program daily.
The Contractor shall consult with the membrane manufacturer to obtain the membrane manufacturer’s membrane performance guidelines prior to initiating a cleaning. These guidelines shall include the following information for each array:
		a)
	Normalized permeate flow, percent decrease;

		b)
	Pressure drop over a stage or the system; percent increase;

		c)
	Normalized salt passage (or permeate TDS increase); percent increase.

The Contractor shall monitor the key performance parameters listed above daily to determine if the RO system requires cleaning. Additionally, the following conditions will be graphed daily as a troubleshooting tool and to ascertain the performance of the membrane system:
		a)
	Normalized Salt Passage vs. Time;

		b)
	Normalized Permeate Flow vs. Time;

		c)
	Salt Transport Coefficient vs. Time;

		d)
	Water Transport Coefficient vs. Time; and

		e)
	Normalized Differential Pressure (Delta P) vs. Time.

RO membrane cleaning criteria shall be based on the normalized flux decline of the membrane treatment system.
2.2 Annual Operation Report Requirements
Once per year the walk-through Plant review (as mentioned under 2.1 above) will coincide with a more thorough annual review and preparation of an Annual Operation Report.
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Approximately two weeks prior to the annual walk-through Plant review, and not later than thirty (30) days after the completed year’s operation, the Contractor shall submit to the Authority one electronic copy of the Contractor’s Annual Operation Report. This report shall include, at a minimum:
		a)
	A summary of the information provided in the Monthly Operation Reports, including Total Water quantity (in cubic metres) and Water quality characteristics for parameters specified in APPENDIX F delivered to the Delivery Point.

		b)
	A summary of environmental and safety regulatory compliance.

		c)
	Updated Annual Operation and Maintenance Plan.

		d)
	An assessment of outstanding issues, including any recommendations for changes to Plant operation or Plant equipment.

The results from the joint Authority / Contractor annual survey will be compiled for use as an annual addendum to the Contractor’s Annual Operation Report. Approximately two weeks following the distribution of the addendum, the Authority and the Contractor will hold an Annual Review Meeting during which the results of the joint Authority / Contractor annual survey and the Contractor’s comments and responses will be discussed and all other matters of common interest and concern will be discussed and resolved. The Annual Operation Report will be finalized by the Contractor and issued within two weeks of the Annual Review Meeting.
3. OPERATION SERVICE PLAN
The Contractor shall prepare an operations and maintenance plan (Operation Service Plan), which shall be submitted for approval by the Authority.
The Operation Service Plan shall describe the principal aspects of routine and emergency operating procedures, repair and replacement, predictive and preventive maintenance, corrosion protection, and staffing. The Operation Service Plan will be consistent with the Contractor’s ability to perform its obligations in accordance with terms and provisions of the Agreement.
The Operation Service Plan will contain as a minimum an overview description of the following:
		a)
	Plan for Day-to-Day Operations of the Plant (Operations Plan);

		b)
	Maintenance, Repair and Replacement Plan (Maintenance Plan);

		c)
	Liquid and Solid Waste Stream Handling and Disposal Plan (Waste Management Plan); and

		d)
	Emergency Management Plan

The Contractor shall provide to the Authority:
		a)
	a draft Operation Service Plan thirty (30) days prior to the anticipated First Delivery Date; and

		b)
	a final Operation Service Plan no later than three (3) months after the First Delivery Date.

The Contractor shall update and submit to the Authority any material changes to the Operation Service Plan at least sixty (60) days prior to the commencement of each calendar year for the duration of the Term. The Authority may also each year request reasonable updates to the Operation Service Plan.
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Specific requirements related to the individual plans, which are integral parts of the Operation Service Plan are presented in the following sections.
3.1 Operations Plan
The Operations Plan shall describe principal procedures for normal, emergency and standby Plant operations to meet the Contractor’s obligations under the Agreement, including overall Plant start-up and shutdown during unusual source water quality events or other conditions which require such shutdown (hurricanes etc.). This plan shall include all sampling and analyses procedures and related QA/QC reports.
3.2 Maintenance Plan
The Maintenance Plan shall describe how the Contractor will:
		a)
	Perform predictive and preventive maintenance, repair and replacement activities on all equipment and buildings in accordance with the recommendations of the equipment manufacturer (OEM), Standard Industry Practices and this Agreement.

		b)
	Perform corrective maintenance in such a manner that the equipment operation is not impacted and the performance standards are not threatened.

		c)
	Prepare reports on maintenance, repairs, and replacements of any major equipment components

The maintenance plan must contain a comprehensive proposed maintenance schedule. This schedule will be used for monitoring and reporting requirements.
The Contractor shall develop and implement a comprehensive computerized maintenance management system (CMMS) that will collect historical data, including an inventory of spare parts, and a description of the repair work performed.
Scheduling of all maintenance task shall be done using the CMMS and the Authority shall be given (read-only) access to the CMMS no later than three (3) months after the First Delivery Date. All licenses, schedules, and work order history shall be transferred, at no cost, to the Authority at the end of the Term
3.3 Waste Management Plan
The Contractor shall prepare a Waste Management Plan describing the quantities, purpose of use. handling, storage and disposal methods for all chemicals, lubricants, fuels and any other hazardous materials used or generated at the Plant. The Waste Management Plan shall include a detailed list of all chemicals and hazardous materials to be used in the Plant, accompanied by relevant Material Safety Data Sheets. The Contractor shall submit a revised list immediately following any change of chemicals to be used in the Plant.
3.4 Emergency Management Plan
The Contractor shall prepare an Emergency Management Plan (EMP). The objective of the EMP is to eliminate or minimize personal injuries or property damage that could potentially be the consequence of an emergency. The EMP must properly handle the situation until the emergency authorities (Fire Department, Ambulance, Police Department, etc.) can arrive to
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take over an emergency situation.
As a minimum, the EMP shall address the following issues:
	(a)
	Chemical spill reporting procedures and chemical storage, personal protective equipment (PPE) inspection forms, and spill kit and PPE locations;

	(b)
	Personnel emergencies;

	(c)
	Fire and explosions and fire extinguisher location maps;

	(d)
	Pipe, valve, or pump failure;

	(e)
	Equipment and process failure;

	(f)
	Power failure;

	(g)
	Acts of God (hurricanes, wind storms, floods, and earthquakes);

	(h)
	Emergency telephone numbers;

	(i)
	Records preservations;

	(j)
	Chemical storage inventory and monitoring system;

	(k)
	Coordinating instructions with public emergency authorities; 

	(I)
	Troubleshooting guides;

	(m)
	Evacuation Plan including evacuation meeting location and first aid trained personnel; and

	(n)
	Weather-related emergency procedures (incl. Hurricane Contingency (Preparedness and Recovery) Plan).

​
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APPENDIX J - MANDATORY SPARES INVENTORY
General
The Contractor is required to supply to the Authority in any one month an average daily quantity of Water of 9,000 cubic metres per day, which is 90% of the specified design capacity of the Plant, and which meet the requirements of APPENDIX C.
If the failure of a Plant part would impact on achieving these requirements, then that part is considered a ‘Critical Spare’.
If the failure of a part does not impact on the plant achieving this reliability, then the part is considered a Non-Critical Spare.
A failure in a Non-Critical Spare may, however, have other consequences, such as an adverse impact on safety, disruption to the overall functioning or efficiency of the plant, or result in an environmental non-compliance. Some Non-Critical Spares, which include some consumables (e.g., filter cartridges, chemicals) therefore play an important part in the inventory of the Plant and should be stocked as a mitigation measure to any of the above impacts.
The Contractor shall within 180 days of the Agreement Date submit a list of suggested Non-Critical Spares, for review by the Authority. Some of the Non-Critical Spares on this list may be included as part of the inventory of Mandatory Spares.
A Mandatory Spare is defined as
		(i)
	a Critical Spare; or

		(ii)
	a Non-Critical Spare where the failure would disrupt the overall functioning or efficiency of the plant; or

		(iii)
	a Non-Critical Spare where the failure of a part would result in a breach of the Contractor’s safety or environmental requirements.

All Mandatory Spares shall be purchased and held in store prior to the First Delivery Date. 
The Contractor shall maintain an inventory of Mandatory Spares throughout the Term.
Mandatory Spares must be held in a suitable storage facility on or near the Site. The storage facility shall be secure and shall be used exclusively for the storage of Mandatory Spares used for this Agreement. The Contractor may use this storage facility to store Non-Critical Spares as well.
Mandatory Spares must be available in such numbers as to ensure that the contractual requirements can be achieved.
Mandatory Spares must be readily available for inspection by the Authority.
Mandatory Spares shall be immediately re-ordered when used and shall be restocked as soon as practical. The Contractor shall provide evidence of having placed an order for any Mandatory Spares that have been used at the Plant.
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Critical Spares List
​
	 ​
	Quantity

	Submersible Well Pump
	1

	Submersible Well Pump Motor
	1

	Submersible Well Pump Motor Cable
	1

	Submersible Well Pump Motor Cable underwater splice kit
	1

	Submersible Well Pump VFD
	1

	 ​
	 ​

	High Pressure Pump Motor
	1

	High Pressure Pump Coupling
	1

	High Pressure Pump Rotating element
	1

	High Pressure Pump Bearings and seals
	1

	High Pressure Pump VFD
	1

	High Pressure Brine Booster Pump Motor
	1

	High Pressure Brine Booster Pump Motor Frame
	1

	High Pressure Brine Booster Pump
	1

	High Pressure Brine Booster Pump VFD
	1

	 ​
	 ​

	2nd Pass Pump Complete (motor, pump, coupling)
	1

	2nd Pass Pump VFD
	1

	 ​
	 ​

	Product Delivery Pump Impeller
	1

	Product Delivery Pump Bearings and seal kit
	1

	Product Delivery Pump Coupling
	1

	Product Delivery Pump Motor
	1

	Product Delivery Pump Starter or VFD
	1

	 ​
	 ​

	PX ERI Seal Kit
	1

	PX ERI Complete Assembly
	1

	PX ERI Special Maintenance Tool
	1

	 ​
	 ​

	Degassifier Blower Motor
	1

	Degassifier Blower Belts (complete sets)
	2

	Degassifier Blower Impeller Shaft Bearings
	1

	Degassifier Blower motor starter or VFD
	1

​
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Critical Spares List (continued)
​
	​

	​

	​
	Quantity

	Scrubber Recirculation Pump Complete Assembly
	1

	Scrubber Recirculation Pump Starter or VFD
	1

	​
	 ​

	Product Delivery Control Valve positioner
	1

	​
	 ​

	HMI computer with control software already installed and up-to-date
	1

	PLC with control software pre-installed
	2

	One each of all the PLC controller modules including all the communication modules
	?

	One each of all the various PLC controller backplanes types
	?

	​
	 ​

	One each of all the various MCC circuit breakers/ fuse types for 480V
	1 lot

	Two each of all the various circuit breakers/ fuse types for control system
	1 lot

	Two each of all the various relays analog or solid state used in MCC and control panel(s)
	1 lot

	Two each of all the various low voltage power supplies used in MCC and control panel(s)
	1 lot

	One each of all the various disconnect switches used in MCC and control panel(s)
	1 lot

	One each of all the various transformers used in MCC and control panel(s)
	1 lot

	Assorted bulbs and panel switches used in MCC and control panel(s)
	1 lot

	480V to 120V step down transformer sized for the largest sub panel service
	1

	One each of any line or load reactors
	1 lot

	​
	 ​

	Flow Meters 1 each of each flow range for HP & LP
	1 lot

	pH sensor, one each for each different pH range required at the total facility
	1 lot

	Conductivity sensor, one each for each different range required at the total facility
	1 lot

	Pressure sensor two each of each pressure range required
	1 lot

	Temperature sensor one each of each range and duty required
	1 lot

	Transmitters for sensors above as required if not integral
	1 lot

	​
	 ​

	Valve Actuators 2 each of each size and type (air/elec) throughout the plant
	1 lot

	Solenoid valves for air operated valve actuators complete sets
	2

	LP Valves 2 each of each size and type throughout the plant
	1 lot

	Assorted LP & HP gaskets for the various size pipe connections
	1 lot

	​
	 ​

​

Page 85 ǀ 87

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