Document:

Unassociated Document

    EXHIBIT
10.1

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    Blue
Hills Seawater Reverse

     

    Osmosis
Plant

    

    FORM OF
AGREEMENT

    FOR

    DESALINATED
WATER SUPPLY

    

    Between:

     

    Water
and Sewerage

    Corporation

     

    

     

    And:

     

    
      
        
          	
                  

                	
                  

                
	
                  CONSOLIDATED

                  WATER

                
	
                  Waterfields
      Company Limited

                

        

      

    

     

    MAY
2005

    
      
        CONFIDENTIAL

         

      

      
         

        
          

        

      

      
         

      

    

    BLUE
HILLS SEAWATER REVERSE OSMOSIS PLANT

    PART
2 - BIDDING AND CONTRACT DOCUMENTS

     

    FORM
OF AGREEMENT FOR DESALINATED WATER SUPPLY

    

    TABLE OF
CONTENTS

     

    
      
        
          
            
              
                	 
      	 
      	 
      	 
      	
                        Page

                      
	 
      	 
      	 
      	 
      	 
      
	
                        1.

                      	 
      	
                        GENERAL

                      	 
      	
                        1

                      
	 
      	 
      	 
      	 
      	 
      
	
                        2.

                      	 
      	
                        DEFINITIONS

                      	 
      	
                        1

                      
	 
      	 
      	 
      	 
      	 
      
	
                        3.

                      	 
      	
                        CONTRACTOR'S
      CONSTRUCTION OBLIGATIONS

                      	 
      	
                        5

                      
	 
      	 
      	 
      	 
      	 
      
	
                        4.

                      	 
      	
                        SITE
      USAGE

                      	 
      	
                        7

                      
	 
      	 
      	 
      	 
      	 
      
	
                        5.

                      	 
      	
                        TERM
      AND DURATION

                      	 
      	
                        7

                      
	 
      	 
      	 
      	 
      	 
      
	
                        6.

                      	 
      	
                        ELECTRICAL
      POWER SUPPLY AND FUEL OIL SUPPLY

                      	 
      	
                        8

                      
	 
      	 
      	 
      	 
      	 
      
	
                        7.

                      	 
      	
                        PURCHASE
      BY THE CORPORATION OF SATISFACTORY DESALINATED WATER

                      	 
      	
                        10

                      
	 
      	 
      	 
      	 
      	 
      
	
                        8.

                      	 
      	
                        BASIC
      ELEMENTS OF THE PRICE PER 1000 IMPERIAL GALLONS DELIVERED

                      	 
      	
                        13

                      
	 
      	 
      	 
      	 
      	 
      
	
                        9.

                      	 
      	
                        DELIVERED
      AND ACCEPTED DESALINATED WATER AMOUNTS

                      	 
      	
                        13

                      
	 
      	 
      	 
      	 
      	 
      
	
                        10.

                      	 
      	
                        ADJUSTMENTS
      IN THE PAYMENTS FOR DESALINATED WATER DELIVERED

                      	 
      	
                        15

                      
	 
      	 
      	 
      	 
      	 
      
	
                        11.

                      	 
      	
                        PARTIES
      TO WHOM DESALINATED WATER MAY BE SOLD

                      	 
      	
                        18

                      
	 
      	 
      	 
      	 
      	 
      
	
                        12.

                      	 
      	
                        PAYMENTS

                      	 
      	
                        18

                      
	 
      	 
      	 
      	 
      	 
      
	
                        13.

                      	 
      	
                        UNSATISFACTORY
      DESALINATED WATER

                      	 
      	
                        19

                      
	 
      	 
      	 
      	 
      	 
      
	
                        14.

                      	 
      	
                        PLANT
      "SERVICE" WATER

                      	 
      	
                        19

                      
	 
      	 
      	 
      	 
      	 
      
	
                        15.

                      	 
      	
                        OWNERSHIP
      OF THE PLANT AND DISPOSITION OF THE PLANT AT THE END OF THE CONTRACT
      PERIOD

                      	 
      	
                        20

                      
	 
      	 
      	 
      	 
      	 
      
	
                        16.

                      	 
      	
                        PLANT
      BUYOUT PRICE SCHEDULE

                      	 
      	
                        21

                      
	 
      	 
      	 
      	 
      	 
      
	
                        17.

                      	 
      	
                        SECURITIES

                      	 
      	
                        21

                      
	 
      	 
      	 
      	 
      	 
      
	
                        18.

                      	 
      	
                        INSURANCES

                      	 
      	
                        23

                      
	 
      	 
      	 
      	 
      	 
      
	
                        19.

                      	 
      	
                        DAMAGES
      TO THE CORPORATION'S AND OTHERS PROPERTY

                      	 
      	
                        27

                      
	 
      	 
      	 
      	 
      	 
      
	
                        20.

                      	 
      	
                        THE
      CONTRACTOR'S RESPONSIBILITY FOR DESALINATED WATER AFTER DELIVERY TO THE
      CORPORATION

                      	 
      	
                        27

                      
	 
      	 
      	 
      	 
      	 
      
	
                        21.

                      	 
      	
                        LAND
      FOR PLANT CONSTRUCTION PURPOSES

                      	 
      	
                        28

                      
	 
      	 
      	 
      	 
      	 
      
	
                        22.

                      	 
      	
                        RESPONSIBILITY
      FOR THE PHYSICAL CONDITION AND SECURITY OF THE PLANT DURING THE PERIOD OF
      AGREEMENT

                      	 
      	
                        28

                      

              

            

          

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        
          	
                  23.

                	 
      	
                  THE
      CONTRACTOR'S REGULAR REPORTS TO THE CORPORATION

                	 
      	
                  28

                
	 
      	 
      	 
      	 
      	 
      
	
                  24.

                	 
      	
                  APPROVAL
      OF THE CONTRACTOR'S OPERATING AND MAINTENANCE PERSONNEL

                	 
      	
                  28

                
	 
      	 
      	 
      	 
      	 
      
	
                  25.

                	 
      	
                  PERSONNEL
      ENGAGED BY THE CONTRACTOR

                	 
      	
                  29

                
	 
      	 
      	 
      	 
      	 
      
	
                  26.

                	 
      	
                  WORK
      PERMITS

                	 
      	
                  29

                
	 
      	 
      	 
      	 
      	 
      
	
                  27.

                	 
      	
                  CORPORATION'S
      RIGHTS TO VISIT AND INSPECT THE PLANT

                	 
      	
                  29

                
	 
      	 
      	 
      	 
      	 
      
	
                  28.

                	 
      	
                  RECTIFICATION
      OF DEFECTS AND DEFICIENCIES

                	 
      	
                  29

                
	 
      	 
      	 
      	 
      	 
      
	
                  29.

                	 
      	
                  NOTICE
      OF CESSATION OF PRODUCTION

                	 
      	
                  30

                
	 
      	 
      	 
      	 
      	 
      
	
                  30.

                	 
      	
                  REPLACEMENT
      OF DEFECTIVE MEMBRANES, MICRON SIZE CARTRIDGE FILTER ELEMENTS AND
      MULTIMEDIA FILTRATION MATERIALS

                	 
      	
                  30

                
	 
      	 
      	 
      	 
      	 
      
	
                  31.

                	 
      	
                  CORPORATION'S
      INSPECTION OF THE PLANT DURING THE CONSTRUCTION PERIOD

                	 
      	
                  30

                
	 
      	 
      	 
      	 
      	 
      
	
                  32.

                	 
      	
                  VERIFICATION
      OF DESALINATED WATER QUANTITY, QUALITY AND PLANT PERFORMANCE
      GUARANTEES

                	 
      	
                  31

                
	 
      	 
      	 
      	 
      	 
      
	
                  33.

                	 
      	
                  THE
      CONTRACTOR'S OBLIGATIONS AT THE COMPLETION OF THE DESALINATED WATER
      DELIVERY PERIOD

                	 
      	
                  33

                
	 
      	 
      	 
      	 
      	 
      
	
                  34.

                	 
      	
                  PLANT
      DESIGN FOR MINIMUM WATER TREATMENT CHEMICALS, FUEL OIL AND ELECTRIC POWER
      CONSUMPTIONS

                	 
      	
                  33

                
	 
      	 
      	 
      	 
      	 
      
	
                  35.

                	 
      	
                  CONSTRUCTION
      PROGRESS REPORTS

                	 
      	
                  33

                
	 
      	 
      	 
      	 
      	 
      
	
                  36.

                	 
      	
                  CAPITAL
      COST (VALUE) OF THE PLANT

                	 
      	
                  33

                
	 
      	 
      	 
      	 
      	 
      
	
                  37.

                	 
      	
                  CHANGE
      ORDERS

                	 
      	
                  34

                
	 
      	 
      	 
      	 
      	 
      
	
                  38.

                	 
      	
                  LIQUIDATED
      DAMAGES

                	 
      	
                  34

                
	 
      	 
      	 
      	 
      	 
      
	
                  39.

                	 
      	
                  UPKEEP,
      LOSS AND DAMAGE

                	 
      	
                  34

                
	 
      	 
      	 
      	 
      	 
      
	
                  40.

                	 
      	
                  CONTRACTOR'S
      RESPONSIBILITY TO ITS SUPPLIERS AND SUBCONTRACTORS

                	 
      	
                  34

                
	 
      	 
      	 
      	 
      	 
      
	
                  41.

                	 
      	
                  STANDBY
      FEE

                	 
      	
                  35

                
	 
      	 
      	 
      	 
      	 
      
	
                  42.

                	 
      	
                  DEFAULT
      AND TERMINATION

                	 
      	
                  35

                
	 
      	 
      	 
      	 
      	 
      
	
                  43.

                	 
      	
                  CONTRACTOR'S
      REPRESENTATIONS

                	 
      	
                  37

                
	 
      	 
      	 
      	 
      	 
      
	
                  44.

                	 
      	
                  CONTRACT
      DOCUMENTS

                	 
      	
                  38

                
	 
      	 
      	 
      	 
      	 
      
	
                  45.

                	 
      	
                  ENTIRE
      AGREEMENT, BINDING EFFECT AND MODIFICATION

                	 
      	
                  39

                
	 
      	 
      	 
      	 
      	 
      
	
                  46.

                	 
      	
                  GOVERNING
      LAWS AND ARBITRATION

                	 
      	
                  39

                
	 
      	 
      	 
      	 
      	 
      
	
                  47.

                	 
      	
                  TRANSFER
      AND ASSIGNMENT

                	 
      	
                  39

                
	 
      	 
      	 
      	 
      	 
      
	
                  48.

                	 
      	
                  NOTICE

                	 
      	
                  39

                
	 
      	 
      	 
      	 
      	 
      
	
                  49.

                	 
      	
                  SIGNATURES
      AND SEALS

                	 
      	
                  40

                

        

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    
      
        
          
            
              	
                      APPENDIX
      A

                    	 
      	
                      42

                    
	 
      	 
      	 
      
	
                      APPENDIX
      B

                    	 
      	
                      46

                    
	 
      	 
      	 
      
	
                      APPENDIX
      C

                    	 
      	
                      50

                    
	 
      	 
      	 
      
	
                      APPENDIX
      D

                    	 
      	
                      51

                    
	 
      	 
      	 
      
	
                      APPENDIX
      E

                    	 
      	
                      57

                    
	 
      	 
      	 
      
	
                      APPENDIX
      F

                    	
                        

                    	
                      58

                    

            

          

        

      

    

    

      
        
          CONFIDENTIAL

           

        

        
           

          
            

          

        

        
           

        

      

    

    
    

        

    BLUE
HILLS SEAWATER REVERSE OSMOSIS PLANT

    TENDER
DOCUMENTS

    PART
2 — BIDDING AND CONTRACT DOCUMENTS

     

    FORM
OF AGREEMENT FOR DESALINATED WATER SUPPLY

     

    
      	
              1. 

            	
              GENERAL

            

    

     

    This
Agreement is made this 20th day of May, 2005 by and between the Water and
Sewerage Corporation, a statutory corporation established and doing business
pursuant to the Water and Sewerage Corporation Act, Chapter 196 Statute Laws of
The Bahamas 2000 edition, with its principal office of business at 87 Thompson
Blvd., Nassau, New Providence, The Bahamas (hereinafter called "the Corporation"
which term shall include the Corporation's representatives, agents, duly
authorized and accredited by the Corporation, in writing to act on behalf of the
Corporation) the party of the one part and WATERFIELDS COMPANY LIMITED a company
incorporated and existing under the laws of Commonwealth of The Bahamas and
having its registered office in the City of Nassau on the Island of New
Providence, one of the Islands of the Commonwealth of The Bahamas and
CONSOLIDATED WATER CO. LTD. a company incorporated and existing under the laws
of the Cayman Islands and having its registered office on the island of Grand
Cayman (hereinafter together called "the Contractor") of the other
part.

     

    WHEREAS, the Corporation is
desirous to obtain on the said Island of New Providence a new reliable supply of
desalinated water for public consumption, with the desalinated water produced by
means of a reverse osmosis desalination plant, with no capital investment by the
Corporation other than that of land on which the plant shall be
sited.

     

    WHEREAS, the Contractor
desires to supply desalinated water to the Corporation from a reverse osmosis
desalination plant on a build, own, and operate ("BOO") basis, with the
Contractor agreeing to detail design, engineer (corresponding to the
Corporation's Specifications), fabricate, supply, deliver to site, install,
erect, construct, equip, outfit, commission, bond, insure, guarantee performance
and test, all at its own expense, and thereafter, for a continuous period, of
duration as defined herein, to properly operate, service, replenish, maintain,
bond, insure and renovate, all at its own expense, a seawater reverse osmosis
desalination plant to meet the requirement stated above, and to sell the
desalinated water thus produced to the Corporation, exclusively, on terms and
prices and conditions as set forth herein.

     

    NOW, THEREFORE, for and in
consideration of the mutual promises, covenants, terms and conditions set forth
herein and the monies to be paid hereunder the above mentioned two (2) parties
(i.e. the Corporation and the Contractor) agree and declare as
follows:

     

    
      	
              2. 

            	
              DEFINITIONS

            

    

     

    In this
Agreement, unless the context otherwise requires the following terms shall have
the following meanings:

     

    
      
        CONFIDENTIAL

        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              a.

            	
              "B$" or "Bahamian Dollars" means
      the lawful currency of the Commonwealth of The
  Bahamas.

            

    

     

    
      	
               
      

            	
              b.

            	
              "Bahamas Electricity
      Corporation" or "BEC" means the Bahamas
      Electricity Corporation.

            

    

     

    
      	
               
      

            	
              c.

            	
              "Bid" means the bid
      submitted by the Contractor to the Corporation for the construction,
      ownership and operation of the Plant dated the 31st
      day of March, 2004 as amended on the 6th
      day of July, 2004, the 7th
      day of July, 2004, the 1st
      day of October, 2004, and the 21st
      day of April, 2005.

            

    

     

    
      	
               
      

            	
              d.

            	
              "Bidding and Contract
      Documents" means the bidding and contract documents contained in
      Part 2 of the Tender Documents.

            

    

     

    
      	
               
      

            	
              e.

            	
              "Catastrophic Damage"
      means widespread and severe damage to the Plant caused by Force Majeure
      which renders it inoperable.

            

    

     

    
      	
               
      

            	
              f.

            	
              "Construction Period"
      means the period described in Clause 5.1(i)
  hereof.

            

    

     

    
      	
               
      

            	
              g.

            	
              The
      "Delivery Points",
      of the Desalinated Water shall be at the Corporation's existing storage
      tanks, adjacent to the Plant Site.  The "Terminal Point" for the
      supply of Desalinated Water by the Contractor shall be the Water Tariff
      Meter.

            

    

     

    
      	
               
      

            	
              h.

            	
              "Demobilization Period"
      means the period described in clause 5.1(iii)
  hereof.

            

    

     

    
      	
               
      

            	
              i.

            	
              "Desalinated Water" or
      "Satisfactory Desalinated
      Water" shall be the desalinated water, as produced by the Plant,
      and delivered to the Corporation having a chloride concentration not
      exceeding 250 mg/L and meeting all quality requirements as stated on the
      Plant Performance Guarantees, and meeting World Health Organization (WHO)
      guidelines, latest issue as of December 1, 2003, for potable water,
      with the exception of boron.  The standard for boron shall be
      less than 1.5 mg/1 for the purposes of this Agreement.  The
      Desalinated Water shall be free of any contaminants, in quantities, which
      may be injurious to the public health, shall be odorless and colorless and
      have a pleasant taste to the average person, and shall be fully safe and
      suitable for ingestion by human beings, long term, all as set forth in the
      said guidelines.

            

    

     

    
      	
               
      

            	
              j.

            	
              The
      "Desalinated Water
      Delivered per week" shall be the total amount of Satisfactory
      Desalinated Water delivered per week, as measured by the Water Tariff
      Meter reading, at 12:00 noon on Monday of each week.  (Daily
      readings of Desalinated Water delivered shall also be taken at 12:00 noon
      each day.)

            

    

     

    
      	
               
      

            	
              k.

            	
              "Desalinated Water Delivery
      Period" means the period described in Clause 5.1(ii) and which
      may be extended in accordance with the provisions of Clause 15.2
      hereof.

            

    

     

    
      	
               
      

            	
              l.

            	
              "Desalinated Water Sale Price
      per MG" means the price at which the Contractor has agreed to
      supply and which the Corporation has agreed to pay for each KIG of
      Desalinated Water supplied pursuant to the terms hereof and more
      particularly described in Clauses 7 and 8 hereof and Appendix A
      hereto.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              m.

            	
              "Force Majeure" in so far
      as it affects the Contractor's supply and construction of the Plant and
      the Contractor's operation of the Plant and production of Desalinated
      Water, and the ability of the Corporation to take delivery of Desalinated
      Water, is:

            

    

     

    
      	
               
      

            	
              i.

            	
              war,
      hostilities (whether war be declared or not), invasion, act of foreign
      enemies;

            

    

     

    
      	
               
      

            	
              ii.

            	
              rebellion,
      revolution, insurrection, or military or usurped power, or civil
      war;

            

    

     

    
      	
               
      

            	
              iii.

            	
              ionizing
      radiations, or contamination by radio-activity from any nuclear fuel, or
      from any nuclear waste from the combustion of nuclear fuel, radio-active
      toxic explosive, or other hazardous properties of any explosive nuclear
      assembly or nuclear component
thereof;

            

    

     

    
      	
               
      

            	
              iv.

            	
              pressure
      waves caused by aircraft or other aerial devices traveling at sonic or
      supersonic speeds;

            

    

     

    
      	
               
      

            	
              v.

            	
              riot,
      serious commotion or serious
disorder;

            

    

     

    
      	
               
      

            	
              vi.

            	
              any
      operation of the forces of nature or other catastrophe or act of God
      against which an experienced contractor could not reasonably have been
      expected to take precautions;

            

    

     

    
      	
               
      

            	
              vii.

            	
              pre-existing
      man-made environmental site contamination or impacts;
  or

            

    

     

    
      	
               
      

            	
              n.

            	
              "Guaranteed Interim Production
      Quantity" is the quantity of Satisfactory Desalinated Water that
      the Contractor guarantees to deliver and the Corporation guarantees to
      accept over a period of 24 consecutive hours during the Construction
      Period as specified in
Clause 5.1(i).

            

    

     

    
      	
               
      

            	
              o.

            	
              "Guaranteed Water
      Quantity" is the quantity of Satisfactory Desalinated Water that
      the Contractor guarantees to deliver and the Corporation guarantees to
      accept per week of 168 consecutive hours, at any time during the
      Desalinated Water Delivery Period of this Agreement and more particularly
      defined in Clause 9.3 hereof.

            

    

     

    
      	
               
      

            	
              p.

            	
              "Guarantees of
      Performance" or "Performance Guarantees,"
      are guarantees given by the Contractor to the Corporation in the form set
      out in section 8 of Part 2 of the Bidding and Contract Documents and
      dated 31st
      day of March, 2004 as amended on the 6th
      day of July, 2004, the 7th
      day of July, 2004, the 1st
      day of October, 2004, and the 21st
      day of April, 2005, of Satisfactory Desalinated Water delivery per 168
      hours, Desalinated Water salinity, electricity kwh consumption per 1000
      Imperial Gallons of Satisfactory Desalinated Water delivered, electricity
      KVA Maximum Demand, fuel oil consumption per 1000 Imperial Gallons of
      Satisfactory Desalinated Water delivered, maximum diesel engine noise and
      air emissions, and chemical consumption in pounds of chemical per 1000
      Imperial Gallons of Desalinated Water
delivered.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              q.

            	
              "IGPD" is Imperial
      Gallons per day, "IGPH" is Imperial
      Gallons per hour, "IGPW" is Imperial
      Gallons per week, "IGPM" is Imperial
      Gallons per minute, "KIG" is one thousand
      Imperial Gallons, "MIG" is one million
      Imperial Gallons.  "MIGD" is millions of
      Imperial Gallons per day, "IG" is Imperial
      Gallons.  One Imperial Gallon equals 1.201 U.S.
      gallons.

            

    

     

    
      	
               
      

            	
              r.

            	
              "KVA Maximum Demand"
      means the overall Plant maximum electrical demand in kilovolt amperes when
      the Plant is producing the Rated
Capacity.

            

    

     

    
      	
               
      

            	
              s.

            	
              "Letter of Acceptance"
      means the letter of acceptance dated the 11th
      day of March, 2005 issued by the Corporation to the Contractor and
      delivered by the Contractor to the Corporation on the 11th
      day of April, 2005.

            

    

     

    
      	
               
      

            	
              t.

            	
              The
      "Plant" shall
      include the seawater reverse osmosis plant to be constructed and operated
      on the Site pursuant to the terms hereof together with all equipment,
      buildings, infrastructure, fixtures, appurtenances, auxiliaries,
      ancillaries, supplies inventories and materials of the complete reverse
      osmosis desalination plant, all within and including the plant enclosing
      boundary fence, and otherwise, and including all pipework and equipment
      and works necessary for supply of feedwater to the plant and disposal of
      effluents (including desalinated water), from the plant, and an electrical
      power supply system.

            

    

     

    
      	
               
      

            	
              u.

            	
              The
      "Rated Capacity"
      of the Plant is the volume of Satisfactory Desalinated Water which the
      Plant can produce in one week (168 consecutive hours) as stated in the
      Performance Guarantees at any time, during the Desalinated Water Delivery
      Period of this Agreement.

            

    

     

    
      	
               
      

            	
              v.

            	
              The
      "Site" shall be
      the real property on which the Plant is constructed, operated and
      maintained as shown in the Specifications, hereto, and including land
      occupied by pipework and equipment necessary for feedwater supply to the
      plant and effluents (including Desalinated Water) disposal from the
      Plant.

            

    

     

    
      	
               
      

            	
              w.

            	
              The
      "Specifications"
      shall be specifications of the Plant contained in the Bidding and Contract
      Documents, the Bid and more particularly described in Appendix F
      hereto.  The Plant shall be designed and equipped in accordance
      with the Specifications, except only that where the Contractor wishes to
      deviate from the Specifications, the Contractor shall obtain the written
      consent of the Corporation.

            

    

     

    
      	
               
      

            	
              x.

            	
              "Substantial Completion"
      means the completion of construction and performance testing of the Plant
      at the Rated Capacity sufficient for the concomitant delivery of the
      Guaranteed Water Quantity to the
Corporation.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              y.

            	
              "Tender Documents" means
      the tender documents prepared by the WSC inviting the submission of bids
      for the supply of water from a seawater reverse osmosis plant dated
      December, 2003, as amended from time to
time.

            

    

     

    
      	
               
      

            	
              z.

            	
              "Total Desalinated Water
      Delivery Amount" means the total amount of Desalinated Water that
      the Contractor agrees to deliver to the Corporation over the entire length
      of the Desalinated Water Delivery Period as defined in
      Clause 3.

            

    

     

    
      	
               
      

            	
              aa.

            	
              The
      "Water Tariff
      Meter" or "Revenue
      Meter") shall be a device, registering in Imperial Gallons, which
      measures (totalizes) the total quantity of Desalinated Water delivered by
      the Plant.  The Water Tariff Meter shall be calibrated no less
      often than once every six (6) months, or more often as reasonably required
      by the Corporation, with such calibration to the satisfaction of the
      Corporation, to maintain an accuracy not less than plus or minus one
      percent when water flows through it at the obligated water rated divided
      by 7, Imperial Gallons per day.

            

    

     

    
      	
               
      

            	
              bb.

            	
              "Work" means the work to
      be carried out by the Contractor, inter alia, in
      constructing and operating the Plant as more particularly described in
      Part 5 of Section 2 of the Bidding and Contract
      Documents.

            

    

     

    
      	
               
      

            	
              cc.

            	
              "US$" is United States
      Dollars.

            

    

     

    
      	
               
      

            	
              dd.

            	
              "US" means the United
      States of America.

            

    

     

    
      	
               
      

            	
              ee.

            	
              "Unsatisfactory Desalinated
      Water" means desalinated water produced by the Plant (i) having a
      chloride concentration exceeding 250 mg/L or (ii) failing to meet the
      definition of Satisfactory Desalinated Water
  herein.

            

    

     

    
      	
               
      

            	
              ff.

            	
              "Windsor Plant" means the
      seawater desalination plant owned and operated by the Contractor and
      located adjacent to the Nassau International Airport, New
      Providence.

            

    

     

    3.           CONTRACTOR'S
CONSTRUCTION OBLIGATIONS

     

    
      	
               
      

            	
              3.1

            	
              The
      Contractor shall, entirely at its own expense, design, engineer,
      manufacture, fabricate, supply, deliver to Site, install, construct,
      insure, bond, equip and outfit, commission and test the
    Plant.

            

    

     

    
      	
               
      

            	
              3.2

            	
              As
      a minimum, the Contractor shall submit to the Corporation, for approval,
      which approval shall not be unreasonably withheld, the
      following:

            

    

     

    
      	
               
      

            	
              a.

            	
              the
      following drawings:

            

    

     

    
      	
               
      

            	
              1.

            	
              Site
      plan

            

    

    
      	
               
      

            	
              2.

            	
              process
      flow

            

    

    
      	
               
      

            	
              3.

            	
              general
      equipment arrangement

            

    

    
      	
               
      

            	
              4.

            	
              one-line
      electrical

            

    

    
      	
               
      

            	
              5.

            	
              process
      and instrumentation (P&I)

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              6.

            	
              instrumentation
      and loop sheets

            

    

    
      	
               
      

            	
              7.

            	
              structural
      drawings for the Plant reverse osmosis
building

            

    

    
      	
               
      

            	
              8.

            	
              control
      system block diagram

            

    

    
      	
               
      

            	
              9.

            	
              conduit
      and cable schedules

            

    

    

    
      	
               
      

            	
              b.

            	
              Drawings,
      catalog cuts, pumps curves, calculations, etc. for the major equipment
      submittals listed in
Appendix E.

            

    

     

    
      	
               
      

            	
              c.

            	
              Other
      information as shall be reasonably required to satisfy the Corporation as
      to the suitability and adequacy of the design and the Plant as a
      whole.

            

    

     

    
      	
               
      

            	
              d.

            	
              Operation
      and maintenance manuals together with drawings of the Plant as-built, in
      sufficient detail to enable the proper and efficient operation,
      maintenance, dismantling, re-assembly and adjustment of the
      Plant.  The Plant shall not be considered completed until such
      operation and maintenance manuals, together with as-built drawings, have
      been submitted and approved by the Corporation.  The Contractor
      shall be responsible for the periodic updating of the Corporation's sets
      of operations and maintenance manuals for the Plant to reflect equipment
      modifications, changes in parts lists, changes in operating procedures,
      discontinued parts, etc. As a minimum, the Contractor shall update the
      operations and maintenance manuals on an annual
  basis.

            

    

     

    
      	
               
      

            	
              e.

            	
              Sample
      forms for invoices and weekly and monthly
  reports.

            

    

     

    
      	
               
      

            	
              3.3

            	
              Approval
      by the Corporation, as per (a) through (e) of Clause 3.2 above, shall
      not relieve the Contractor of any of his responsibilities under this
      Agreement.

            

    

     

    The
Corporation shall not unreasonably delay approval of the documentation in (a)
through (e) of Clause 3.2 above.  Four (4) copies each of the
documents required in (a) through (e) of Clause 3.2 above shall be
furnished to the Corporation by the Contractor on completion of construction of
the Plant.

     

    
      	
               
      

            	
              3.4

            	
              In
      the event of the Contractor desires to deviate from the Specifications,
      the Contractor shall first obtain Corporation's written agreement to such
      deviations.

            

    

     

    
      	
               
      

            	
              3.5

            	
              The
      Contractor shall comply in full with all relevant Bahamian labor laws,
      Bahamian Government Ordinances and the like and with all relevant Bahamian
      and such other accepted construction codes, regulations and standards as
      the Corporation may approve provided that all codes, regulations and
      standards approved by the Corporation are notified to the Contractor in
      writing.

            

    

     

    
      	
               
      

            	
              3.6

            	
              On
      completion of construction of the Plant, the Contractor shall ensure the
      complete Site is neat and tidy in all respects, with all trash, junk,
      garbage, surplus spoil, surplus materials and the like properly disposed
      of and removed to, approved permissible remote locations, all to the
      satisfaction of the Corporation.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    
      	
              4. 

            	
              SITE
      USAGE

            

    

     

    
      	
               
      

            	
              4.1

            	
              The
      Corporation grants the Contractor an irrevocable license to use, occupy
      and have access to the Plant Site at no cost to the Contractor during the
      period that this Agreement is in force, for the purposes of performing its
      obligations and exercising its rights under the Contract
      Documents.

            

    

     

    
      	
              5. 

            	
              TERM
      AND DURATION

            

    

     

    
      	
               
      

            	
              5.1

            	
              The
      term of this Agreement shall consist of three periods,
  viz:

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Construction Period

            

    

     

    The
Construction Period shall commence on the date of issue to the Contractor of the
Corporation's Authorization to Proceed with construction (to be issued pursuant
to paragraph 33 of Section 3, Part 2 of the Bidding and Contract Documents) and
shall continue thereafter for a maximum period of sixty five (65) consecutive
weeks.  The Contractor shall within the Construction Period commence
to deliver to the Corporation Satisfactory Desalinated Water in accordance with
the following schedule:

     

    
      	
               
      

            	
              a.

            	
              Interim
      Delivery Period 1 shall commence at the beginning of week 26 of the
      Construction Period and expire at the end of Week 52 of the Construction
      Period during which time the Contractor shall deliver 1.0 MIGD from the
      Windsor Plant.

            

    

     

    
      	
               
      

            	
              b.

            	
              Interim
      Delivery Period 2 shall commence at the beginning of week 53 of the
      Construction Period and expire upon Substantial Completion during which
      time the Contractor shall deliver 1.0 MIGD from the Windsor Plant, plus
      1.6 MIGD from the Plant.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Desalinated
      Water Delivery Period

            

    

     

    The
Desalinated Water Delivery Period shall commence on the date that the
Corporation acknowledges and notifies the Contractor, in writing, that the Plant
has achieved Substantial Completion and is producing Satisfactory Desalinated
Water.  The Desalinated Water Delivery Period shall continue for such
period, unless otherwise adjusted or shortened or lengthened under the
provisions of this Agreement, which is the longer of the following: (a) such
period as is necessary for the Contractor to deliver to the Corporation a total
of 29,200 million Imperial Gallons of Satisfactory Desalinated Water (the "Total
Desalinated Water Delivery Amount"); or (b) 20 (twenty) consecutive years from
the date of Substantial Completion.  For the avoidance of doubt the
Desalinated Water Delivery Period shall not include Interim Delivery
Period 1 or Interim Delivery Period 2.

     

    
      
        CONFIDENTIAL

        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    
      	
               
      

            	
              iii.

            	
              The
      Demobilization Period

            

    

     

    The
Contractor's Demobilization Period shall begin at the end of the Desalinated
Water Delivery Period and shall continue for a period not exceeding six
months.

     

    
      	
              6. 

            	
              ELECTRICAL
      POWER SUPPLY AND FUEL OIL SUPPLY

            

    

     

    
      	
               
      

            	
              6.1

            	
              During
      the Desalinated Water Delivery Period, the high pressure reverse osmosis
      pumps will be powered by diesel engines.  Electrical power for
      the operation of the balance of plant loads, which shall include all other
      motors, controls, lighting, heating/ventilation/air conditioning ("HVAC"),
      etc. will normally be purchased from the Bahamas Electricity
      Corporation.  In the event of a BEC power supply failure,
      operation of the standby diesel generator will be permitted for the
      duration of such power failure.  The electricity generated by
      the standby diesel generator will be metered and billed to the Corporation
      in accordance with the provisions of Clauses 6.8 and 9.5 of this
      Agreement.

            

    

     

    
      	
               
      

            	
              6.2

            	
              Electrical
      power costs, installation, supply and usage, during the Construction
      Period shall be to the account of the
  Contractor.

            

    

     

    
      	
               
      

            	
              6.3

            	
              The
      Contractor shall, at its own expense, representing part of the capital
      cost of the Plant, pay BEC for the installation and connection charges for
      the complete electrical power supply to the Plant, needed during the
      Desalinated Water Delivery Period.  Payment for this capital
      cost shall be made in accordance with
  Clause 12.1.

            

    

     

    
      	
               
      

            	
              6.4

            	
              Subject
      to certain provisos in this Agreement relating to electrical power
      consumption per 1000 Imperial Gallons of Satisfactory Desalinated Water
      delivered to the Corporation and KVA Maximum Demand per annum not
      exceeding the Performance Guarantees made by the Contractor at the time of
      its Bid, the Corporation shall incur the actual net billed costs of
      electrical power (Kilowatt Hours and KVA Maximum Demand per annum)
      consumed during the Desalinated Water Delivery
  Period.

            

    

     

    Notwithstanding
any provisions to the contrary contained herein, the Contractor shall pay all
invoices presented by BEC for the electricity and maximum demand required to
operate the Plant during the Desalinated Water Delivery Period.  The
Contractor shall charge back to the Corporation the full amount of the BEC
invoices * * * * *.  The cost associated with electricity consumption
and/or KVA Maximum Demand charge per annum in excess of the amounts set out in
the Performance Guarantees will be deducted from the Corporation's monthly
payment to the Contractor at BEC's published rate as of the date the
Contractor's invoice is submitted.

    
    

    
      
        CONFIDENTIAL

        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              6.5

            	
              All
      electrical power (kilowatt hours and KVA Maximum Demand) supplied to the
      Plant during the Desalinated Water Delivery Period, by the BEC, shall be
      metered by the BEC's tariff meter for the
Plant.

            

    

     

    
      	
               
      

            	
              6.6

            	
              With
      the exception of fuel oil for emergency use for the production of
      electricity by the standby diesel generator as described in
      Clauses 6.1 and 6.8 and for the high pressure reverse osmosis pumps
      as described hereafter and the electricity charges and handling fee
      described in Clause 6.4 above, the Contractor shall be responsible
      for payment of all costs associated with the supply, delivery, unloading,
      storage, and consumption of fuel oil and disposal of fuel oil sludge in an
      environmentally responsible manner during the Desalinated Water Delivery
      Period.  The Contractor will purchase fuel oil on a contract
      basis from a local fuel oil supplier.  The Contractor is
      required to solicit competitive bids for long term contracts for the
      supply of fuel oil.  The Contractor will be obligated to select
      the lowest evaluated bid price for fuel oil.  The Corporation
      reserves the right to review the bids received by the Contractor and
      approve the Contractor's selection of a fuel oil supplier prior to the
      placement of a contract between the Contractor and the fuel oil
      supplier.  It is anticipated that the long term fuel oil supply
      contract will have a term of three years.  Since the fuel oil
      supply contract will be competitively bid at regular intervals, price
      variations due to escalation will be reflected in these fuel bid prices
      and the terms of the fuel oil supply contract and no further adjustments
      for escalation will be required.  Fuel oil price adjustments
      will be required periodically in accordance with the terms of the approved
      fuel oil supply contract as outlined in the calculation procedure for
      annual price escalation set out in
  Appendix B.

            

    

     

    The
Corporation shall each month during the Desalinated Water Delivery Period or any
extension thereof pay the Contractor a monthly fee for fuel oil used by the high
pressure reverse osmosis pumps during the invoice period which is equal to the
average cost of fuel oil per US gallon paid by the Contractor during the invoice
period, multiplied by the Performance Guarantee of fuel oil consumption,
multiplied by the quantity of Satisfactory Desalinated Water delivered to the
Corporation during that invoice period.

     

    
      	
               
      

            	
              6.7

            	
              In
      respect to the foregoing, the Contractor shall provide and install as part
      of the Plant an accurate and certified fuel oil metering system (U.S.
      Gallons) to check all fuel oil deliveries and all quantities of fuel oil
      used.

            

    

     

    
      	
               
      

            	
              6.8

            	
              In
      the event of BEC power supply failure or excursion, fuel oil used by the
      standby diesel generator for the production of electricity for Desalinated
      Water production shall be paid by the Contractor to the fuel oil supplier
      and the Corporation will reimburse the Contractor in accordance with
      Clause 9.5 of the Agreement.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              PURCHASE
      BY THE CORPORATION OF SATISFACTORY DESALINATED
  WATER

            

    

     

    
      	
               
      

            	
              7.1

            	
              The
      unit amount of Satisfactory Desalinated Water for billing and other
      purposes shall be 1000 Imperial Gallons (1000 I.G.), expressed also as
      KIG.

            

    

     

    
      	
               
      

            	
              7.2

            	
              During
      the Desalinated Water Delivery Period, the Contractor shall submit to the
      Corporation a weekly report which summarizes the amount of Desalinated
      Water (in KIG) delivered by the Contractor to the Corporation in that
      week.  The report shall also summarize all cost elements
      associated with the supply of Desalinated Water by the Contractor during
      the week which will be billed to the Corporation as part of the monthly
      invoice.  These cost elements shall be in accordance with the
      current Desalinated Water Sale Price per KIG of Satisfactory Desalinated
      Water delivered and shall include all costs listed in the Desalinated
      Water Sale Price per KIG of Satisfactory Desalinated Water including fixed
      charges - capital repayment (capital repayment and interest thereto),
      general & administration (including administration, insurance,
      bonding securities), operation & maintenance labor, overhead and
      profit on labor, spare parts, replacement membranes, cartridge filters
      & miscellaneous consumables, consumption of fuel oil, feedwater and
      product water treatment chemicals, and cleaning
  chemicals.

            

    

     

    The
weekly report shall also include calculations for costs which the Corporation
will incur in association with the Desalinated Water delivered in the week
including the cost of fuel oil, electrical power consumption, maximum KVA
demand, and emergency fuel oil consumption for the standby diesel
generator.  The report shall document BEC outage time, if
any.  The report shall also summarize outstanding sums which are
chargeable to the Corporation by the Contractor and vice versa.

     

    
      	
               
      

            	
              7.3

            	
              Invoices
      shall be presented by the Contractor at the end of each month of the
      Desalinated Water Delivery Period.

            

    

     

    
      	
               
      

            	
              7.4

            	
              At
      the commencement of the Construction Period and for the first three years
      of the Desalinated Water Delivery Period, the Desalinated Water Sale Price
      per KIG of Satisfactory Desalinated Water delivered by the Contractor to
      the Corporation, shall be as stated in Appendix A, subject only to
      adjustments in the price of fuel oil as stipulated in the terms of the
      approved fuel oil supply contract.

            

    

     

    In the
event that in any week the Corporation at its sole discretion elects to take,
and the Contractor is able to supply, Desalinated Water in excess of 28.0 MIG,
the price to be paid by the Corporation for water in excess of 28.0 MIG shall be
the current Contract Desalinated Water Sale Price per KIG less the following
cost components:

     

    
      	
            	
              n

            	
              fixed
      charges

            

    

    
      	
            	
              n

            	
              general
      & administrative charges

            

    

    
      	
            	
              n

            	
              labor

            

    

    
      	
            	
              n

            	
              overhead
      and profit on labor

            

    

    
      
        CONFIDENTIAL

         

      

      
        10

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    
      

      
        	
                 
      

              	
                7.5

              	
                For each monthly billing period,
      the Contractor shall submit a report to the Corporation summarizing all
      costs associated with the production of Desalinated Water which occurred
      during the billing period.  This report shall contain all
      consumption figures, cost elements and cost calculations as specified for
      the weekly
      reports in Clause 7.2 above.  The report shall include all
      relevant details for the billing period's electrical power consumption
      from BEC in kilowatt hours (total amount), KVA Maximum Demand reading,
      consumption (each) of feedwater and product continuously dosed water
      treatment chemicals (pounds weight totals) and fuel oil.  These
      details shall be verified and certified by the Contractor to the
      satisfaction of the Corporation, when so requested by the
      Corporation.  The Corporation reserves the right to attend the
      Plant to witness readings relative to the above, on a daily basis and on
      the last day of each billing
period.

              

      

    

     

    
      	
               
      

            	
              7.6

            	
              The
      Contractor shall at all times procure fully suitable water treatment
      chemicals at the lowest available competitive commercial
      prices.

            

    

     

    
      	
               
      

            	
              7.7

            	
              * *
      * * *  The most current version of the above adjustment and
      formulae available shall be used to calculate the
    adjustments.

            

    

     

    The cost
elements per KIG delivered, of capital recovery and interest thereto, shall
remain fixed during the Desalinated Water Delivery Period.  The cost
element of fuel oil shall be adjusted in accordance with the terms of the
approved fuel oil supply contract.

     

    The cost
elements of all other items shall be subject to escalation and shall include for
the Contractor's profit * * * * *.

     

    
      	
               
      

            	
              7.8

            	
              The
      Contractor is responsible to include in its price per KIG of Satisfactory
      Desalinated Water delivered all associated and miscellaneous costs
      including, but not limited to any income tax, value added tax, duties or
      taxes which may be imposed by any authority having power in the
      jurisdiction wherein the Plant Site is located, and/or any other
      jurisdiction in which the Contractor is doing
  business.

            

    

     

    The
Contractor is also responsible to include in its price for its employees
supplying the services or performing the work herein in connection with the
Contractor's obligations under this Agreement, or any other tax, levy or
compulsory payment levied by the Government of The Bahamas, and/or the country
of domicile of the Contractor, or to any other lawful authority in connection
with the performance of this Agreement.

     

    If during
the term of this Agreement any additional tax or taxes not imposed at the time
of the signing of this Agreement is imposed by the Government of The Bahamas
directly upon the production, sale or supply of Desalinated Water by the
Contractor including any sales tax, gross turnover tax, excise or license duty,
land tax, or any tax upon the income or net profits of the Contractor, the price
payable by the Corporation for each KIG of Satisfactory Desalinated Water shall
be increased in accordance with accepted accounting procedures to reflect the
cost impact, to the Contractor on the production of Desalinated Water by reason
of 

    such
tax.

     

    
      
        CONFIDENTIAL

        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              7.9

            	
              The
      Corporation is permitted to import in The Bahamas certain (but not all)
      goods, materials, plant and equipment free of customs duty, according to
      the Water and Sewerage Corporation Act, 1976.  Correspondingly,
      the Desalinated Water Sale Price per KIG delivered, shall be exclusive of
      customs duty on materials, plant and equipment incorporated in the Plant
      which are imported into The Bahamas, and on consumables imported into The
      Bahamas for the operation of the Plant during the Desalinated Water
      Delivery Period.

            

    

     

    
      	
               
      

            	
              7.10

            	
              The
      Contractor shall acquaint himself with and observe all the regulations
      pertaining to the importation of materials and constructional plant
      including Section 36 of the Water and Sewerage Corporation Act,
      1976.  The Contractor shall allow in his prices for all freight
      brokerage and stamp duty on the materials and plant he
      imports.

            

    

     

    
      	
               
      

            	
              7.11

            	
              The
      Contractor shall consign to the Corporation all constructional plant,
      materials and equipment to be used for the construction of and
      incorporation into the Plant which the Contractor imports into The
      Bahamas.  In addition, all consumables to be used in the
      operation of the Plant during the Desalinated Water Delivery Period that
      the Contractor imports into The Bahamas are to be consigned to the
      Corporation.

            

    

     

    
      	
               
      

            	
              7.12

            	
              The
      Desalinated Water Sale Price per KIG as billed shall be inclusive of the
      current Bahamian stamp tax for importation of all imported materials,
      equipment and consumables, including items that are supplied and installed
      for the construction and operation of the Plant.  For all and
      any purposes (as of March 2005) this stamp tax was 7% on the delivered
      cost, but is subject to any alteration that the Bahamas Government may
      make.  Should the rate of stamp duty be increased (or
      decreased), the price payable by the Corporation for each KIG of
      Satisfactory Desalinated Water shall be increased (or decreased) in
      accordance with accepted accounting procedures to reflect the cost impact,
      to the Contractor on the production of Desalinated Water by reason of such
      stamp tax rate change.

            

    

     

    
      	
               
      

            	
              7.13

            	
              The
      Contractor shall be solely responsible for the condition of, and any
      damage to goods, materials, equipment and plant consigned to the
      Corporation, as above, through to their delivery at the Plant Site or
      elsewhere in The Bahamas.

            

    

     

    
      	
               
      

            	
              7.14

            	
              Any
      plant or materials imported into The Bahamas under this Agreement and not
      incorporated in the Plant, or not consumed in the Plant, and not
      re-exported from The Bahamas, shall be liable to assessment and consequent
      payment of customs and import duties by the
  Contractor.

            

    

    
      
        CONFIDENTIAL

         

      

      
        12

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    
      	
               
      

            	
              7.15

            	
              The
      Contractor shall not claim or be allowed a refund of customs duty and
      allied charges on any materials, goods, plant or equipment purchases in
      the Bahamas where customs duty and allied charges have already been
      paid.

            

    

     

    
      	
              8.

            	
              BASIC
      ELEMENTS OF THE PRICE PER 1000 IMPERIAL GALLONS
  DELIVERED

            

    

     

    The basic
elements of the Desalinated Water Sale Price per KIG of Satisfactory Desalinated
Water, as delivered by the Contractor to the Corporation, are as set out in
Appendix A, and are subject to escalation in accordance with
Appendix B.

     

    
      	
               
      

            	
              8.1

            	
              The
      capital cost repayment element shall be fixed during the Desalinated Water
      Delivery Period and shall not incorporate escalation, handling charges or
      profit.

            

    

     

    
      	
               
      

            	
              8.2

            	
              Interest
      on capital cost shall be fixed during the Desalinated Water Delivery
      Period and shall not incorporate escalation, handling charges or
      profit.

            

    

     

    
      	
               
      

            	
              8.3

            	
              The
      price of each continuously dosed water treatment chemical shall be stated
      and must include stamp tax.

            

    

     

    
      	
               
      

            	
              8.4

            	
              The
      price of labor and labor allied costs shall be
  stated.

            

    

     

    
      	
               
      

            	
              8.5

            	
              Consumables
      (other than electricity, fuel oil, and continuously dosed water treatment
      chemicals, listed in items 8.3 and 8.4 above) shall include spare parts,
      replacement membranes, replacement micron cartridge filter intervals and
      multi-media filtration media and must include stamp
  tax.

            

    

     

    
      	
               
      

            	
              8.6

            	
              General
      and administration costs shall be
stated.

            

    

     

    
      	
               
      

            	
              8.7

            	
              The
      cost of fuel oil consumed by the Plant shall be charged back to the
      Corporation in accordance with Clause 6.6 and
      Clause 9.5.

            

    

     

    The
interest on capital during the Desalinated Water Delivery Period is a fixed sum
for the period of this Agreement.  Hence, item 2 above shall
remain fixed, price wise, throughout the Desalinated Water Delivery
Period.

     

    Items 8.3
through 8.5 above shall be subject to escalation * * * * *.

     

    
      	
              9. 

            	
              DELIVERED
      AND ACCEPTED DESALINATED WATER
AMOUNTS

            

    

     

    
      	
               
      

            	
              9.1

            	
              The
      Contractor confirms that the Plant has been designed and will be
      constructed and equipped to afford a continuous production of Satisfactory
      Desalinated Water, at all times during the Desalinated Water Delivery
      Period of not less than 35,000,000 Imperial Gallons in any week of 168
      consecutive hours.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              9.2

            	
              The
      Corporation shall take delivery from the Contractor during the Desalinated
      Water Delivery Period of not more than 35,000,000 Imperial Gallons in any
      week of 168 consecutive hours, prior to instruction by the Corporation to
      increase the installed membrane capacity to 6 MIGD in accordance with
      Clause 9.7 below.

            

    

     

    
      	
               
      

            	
              9.3

            	
              The
      Contractor guarantees to deliver to the Corporation, during the
      Desalinated Water Delivery Period 28,000,000 Imperial Gallons of
      Satisfactory Desalinated Water (the "Guaranteed Water Quantity" which term
      shall include any increase in the Guaranteed Water Quantity in accordance
      with the provisions of Clause 9.7 hereof) in any week of 168
      consecutive hours.

            

    

     

    
      	
               
      

            	
              9.4

            	
              The
      Corporation guarantees to take delivery, from the Contractor, during the
      Desalinated Water Delivery Period of at least the Guaranteed Water
      Quantity in any week of 168 consecutive
hours.

            

    

     

    
      	
               
      

            	
              9.5

            	
              In
      the event(s) of BEC power supply failure(s) or excursion(s), occurring
      during the Desalinated Water Delivery Period the standby electrical
      generating set incorporated in the Plant shall be operated by the
      Contractor during the period(s) that such BEC electrical power supply
      failures, or excursions, occur.  The Contractor will purchase
      fuel from the fuel oil supplier selected by the Contractor in accordance
      with the provisions of Clause 6.6 hereof and will be reimbursed by
      the Corporation based on the kilowatt hours generated by the standby
      diesel generator for the production of Desalinated Water during such
      periods multiplied by the guaranteed fuel consumption for the standby
      diesel generator in US gal/kwh contained in the Performance Guarantees
      multiplied by the current contract price per US gallon for the fuel oil
      provided that this electrical power consumption does not exceed the amount
      contained in the Performance Guarantees.  In addition, the
      Corporation will reimburse the Contractor in a similar manner for kilowatt
      hours generated during "exercise test" operation of the diesel generator
      under load for one hour per week for maintenance purposes in the event
      that operation of this unit is not required as a result of BEC power
      supply failures or excursions.  Fuel oil supply to the standby
      diesel generating set shall be independently
  metered.

            

    

     

    
      	
               
      

            	
              9.6

            	
              In
      the event(s) that a proven case of Force Majeure, prevents the Contractor
      from delivering or the Corporation from taking delivery of, during the
      Desalinated Water Period, the Guaranteed Water Quantity in a week of 168
      consecutive hours, any shortfall in Guaranteed Water Quantity that this
      represents shall reduce the Guaranteed Water Quantity for the week
      accordingly.  However, the Total Desalinated Water Delivery
      Amount shall not be reduced on this
account.

            

    

     

    
      	
               
      

            	
              9.7

            	
              The
      Corporation reserves the right to instruct the Contractor in writing to
      increase the Guaranteed Water Quantity to 35,000,000 Imperial Gallons of
      Satisfactory Desalinated Water in any week of 168 consecutive hours,
      PROVIDED that such instruction shall not be given earlier than 24 months
      after the Authorization to Proceed, and no later than the fifteenth (15th)
      anniversary of the date of Substantial Completion.  In the event
      that such instruction is given, the Contractor shall have twelve (12)
      months from the date that such instruction was received by the Contractor
      to increase the Guaranteed Water
Quantity.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    
      	
              10.

            	
              ADJUSTMENTS
      IN THE PAYMENTS FOR DESALINATED WATER
DELIVERED

            

    

     

    
      	
               
      

            	
              10.1

            	
              Liquidated
      Damages

            

    

     

    In the
event that the Contractor does not deliver to the Corporation Satisfactory
Desalinated Water, in accordance with Clause 5.1 (i), liquidated damages
compensating the Corporation at the Contractor's expense, shall
apply.  The said liquidated damages shall be as follows:

    

      
        
          
            
              
                
                  
                    
                      
                        	
                                Weeks from

                                the issuance of

                                the authorization

                                to Proceed

                                (Weeks)

                              	 	
                                Guaranteed Interim

                                Production Quantity of

                                Satisfactory

                                Desalinated Water

                                (KIG)

                              	 	
                                Maximum No of

                                Days Liquidated

                                Damages Apply

                              	 	
                                Amount of

                                liquidated damages

                                per day in B$ if the

                                Guaranteed Interim

                                Production Quantity

                                of Satisfactory

                                Desalinated Water is

                                not delivered by the

                                deadline indicated in

                                column 1

                              
	
                                26

                              	 	
                                1000

                              	 	
                                30

                              	 	
                                3,600

                              
	
                                53

                              	 	
                                2600

                              	 	
                                55

                              	 	
                                5,760

                              
	
                                65

                              	 	
                                4000

                              	 	
                                70

                              	 	
                                5,040

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    The
liquidated damages (if any) shall be cumulative if multiple deadlines are missed
and shall be accommodated by an equal (to the liquidated damages sum calculated)
reduction in the fixed capital cost of the Plant contained in the Bid, which
will represent a reduction in the fixed capital cost element of the Desalinated
Water Sale Price per KIG of Satisfactory Desalinated Water delivered during the
Desalinated Water Delivery Period.  For example, if the Contractor
fails to produce the Guaranteed Interim Production Quantity of Satisfactory
Desalinated Water fifty three (53) weeks after the issuance of the Authorization
to Proceed and previously also failed to produce the specified Guaranteed
Interim Production Quantity twenty six (26) weeks after the issuance of the
Authorization to Proceed, the amount of liquidated damages per day shall be the
sum of $3,600 and $5,760.

     

    If the
delay in producing the guaranteed output of Satisfactory Desalinated Water
exceeds the number of days set out in the third column of the above table, the
Contractor shall be held in default, in accordance with the Default and
Termination clauses herein.

     

    
      	
               
      

            	
              10.2

            	
              Electrical
      Power Consumption is Greater or Less than Performance
      Guarantee

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    The
Contractor has made a Performance Guarantee in its Bid in respect of the BEC
supplied electrical power consumption of the Plant, in terms of total kilowatt
hours consumed per KIG of Satisfactory Desalinated Water delivered to the
Corporation.

     

    The
Corporation has assessed the total cost to the Corporation of Satisfactory
Desalinated Water delivered, including electrical power consumption per 1000
Imperial Gallons delivered, based on the above Performance
Guarantee.  In the event that at any time during the Desalinated Water
Delivery Period, when the Contractor is producing the Guaranteed Water Quantity,
the actual kilowatt hours of electrical power consumed total, per KIG of
Satisfactory Desalinated Water delivered, exceeds that guaranteed by the
Contractor the Corporation shall be compensated for the period in which the
fault (i.e. the difference between the actual and the guaranteed kilowatt hours
of electrical power consumption per KIG delivered) persists.

     

    Compensation
for the above will be by means of the Corporation deducting from the
Contractor's billings sums equal in amount to the difference between the actual
and guaranteed kilowatt hours per KIG delivered, multiplied by the current
published BEC commercial rate per kilowatt hour multiplied by the actual
delivery of Desalinated Water (in 1000 Imperial Gallons units) over the period
in which the fault persisted.

     

    In the
event that at any time during the Desalinated Water Delivery Period, when the
Contractor is producing the Guaranteed Water Quantity, the actual kilowatt hours
of electrical power consumed total, per KIG of Satisfactory Desalinated Water
delivered, is less than that guaranteed by the Contractor in the Performance
Guarantee, the Corporation and the Contractor shall equally share the cost
savings.  This savings shall be credited to the Contractor's account
by way of a debit to the Contractor's billing that is equal to half of the
difference between the guaranteed kilowatt hours per KIG delivered multiplied by
the current published BEC commercial rate per kilowatt hour multiplied by the
actual delivery of Satisfactory Desalinated Water (in KIG) over the billing
period, less the actual electricity used by the Plant over the billing period
multiplied by the current published BEC commercial rate per kilowatt
hour.

     

    
      	
               
      

            	
              10.3

            	
              KVA
      Maximum is Greater or Less than Performance
  Guarantee

            

    

     

    The
Contractor has made a Performance Guarantee in its Bid in respect of the maximum
kilovolt amps that will be registered due to the total electrical power supply
to the Plant when the Plant is producing the Rated Capacity.  The
Corporation has assessed the cost of the KVA Maximum Demand per year based on
the above.  If in any year of the Desalinated Water Delivery Period
the actual kilovolt amps registered by the Plant, during the Desalinated Water
Delivery Period, when the Plant is producing the Rated Capacity, exceeds that
guaranteed, the Corporation shall be compensated for the year, by the Contractor
by an amount (compensatory sum) equal to the difference between the actual
kilovolt amps registered and the guaranteed KVA Maximum multiplied by the
current published BEC commercial rate for KVA of Maximum Demand per
annum.  The compensation shall be in the form of deductions made over
the year following the year in which the fault (i.e. actual KVA Maximum Demand
exceeding guaranteed KVA Maximum Demand) occurred.  The total
deduction shall be made by way of deductions from the Contractor's billings
during the following year, at the rate of one twelfth of the compensatory sum
involved, per month.

     

    
      
        CONFIDENTIAL

        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    If in any
year of the Desalinated Water Delivery Period, when the Contractor is producing
the Rated Capacity, the actual kilovolt amps registered by the Plant, during the
Desalinated Water Delivery Period, when the Plant is producing the Rated
Capacity, is less than that guaranteed by the Contractor in the Performance
Guarantee, the Corporation and the Contractor shall equally share the resulting
cost savings.  This savings shall be credited to the Contractor's
account by way of a debit to the Contractor's billings during the following year
that is equal to one twenty-fourth of the savings per month.

     

    
      	
               
      

            	
              10.4

            	
              Corporation
      Does Not Take Delivery of the Guaranteed Amount in a
  Week

            

    

     

    During
the Desalinated Water Delivery Period if the Corporation fails to accept, during
any week, delivery of the Guaranteed Water Quantity and the Contractor is able
and willing at the time to make delivery of such Guaranteed Water Quantity the
Corporation shall, at that time, pay the Contractor at the then current
Desalinated Water Sale Price per KIG of Desalinated Water quantity actually
delivered during the week and such amount shall be included in the invoice
presented by the Contractor at the end of the relevant month in accordance with
the provisions of Clause 7.3 hereof.  In addition, the
Corporation shall compensate the Contractor, in respect of the difference
between the Guaranteed Water Quantity and the actual quantity delivered at the
then current rates for the cost components of fixed charges, general &
administrative charges, labor, overhead and profit on labor per KIG
only.

     

    
      	
               
      

            	
              10.5

            	
              Contractor
      Does Not Make Delivery of the Guaranteed Water Quantity in a
      Week

            

    

     

    During
the Desalinated Water Delivery Period, if for reasons within the control and/or
responsibility of the Contractor, the Contractor, during a week, fails to make
delivery of the Guaranteed Water Quantity of Desalinated Water and the
Corporation is at the time, able and willing to take delivery of such Guaranteed
Water Quantity, the Contractor shall, at the time, be paid at the then current
Desalinated Water Sale price per KIG of Desalinated Water delivered, for the
Desalinated Water Quantity actually delivered in the week and shall compensate
the Corporation, for the week, in respect of the difference between the
Guaranteed Water Quantity and the actual quantity delivered.  This
compensation to the Corporation shall be equal in amount to the difference
between the Guaranteed Water Quantity and the actual quantity delivered at then
current Desalinated Water Sale Price per KIG of Desalinated Water
delivered.

     

    
      
        CONFIDENTIAL

        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    The
Contractor will, however, be allowed to schedule a total of twenty-one (21)
non-continuous days, per year for scheduled Plant maintenance.  During
the scheduled periods, the Contractor will not be required to compensate the
Corporation for failure to produce the Guaranteed Water Quantity per week but
the Contractor shall be required to compensate the Corporation at the rate
described above if the Contractor fails to produce at least 21.0 MIG per week
during any week when the Contractor carries out scheduled Plant
maintenance.  The Plant maintenance must be scheduled at least two
weeks in advance.  Once established the scheduled Plant maintenance
may only be revised with the written approval of the
Corporation.  This allowance of reduced capacity during the weeks of
scheduled Plant maintenance will not, however, relieve the Contractor of its
obligation to produce 1,460 MIG of Desalinated Water in each year commencing on
the date of Substantial Completion and thereafter commencing on each anniversary
thereafter.  In the weeks preceding Plant maintenance the Contractor
shall coordinate with the Corporation and make its best efforts to increase the
production of Desalinated Water as necessary to ensure that the Corporation's
tanks are full prior to the Plant shutdown for scheduled
maintenance.  Similarly, in the weeks following the scheduled
maintenance, the Contractor shall coordinate with the Corporation and make its
best efforts to increase the production of Desalinated Water as necessary to
restore the Corporation's tanks to the normal reserve operating
levels.

     

    
      	
              11. 

            	
              PARTIES
      TO WHOM DESALINATED WATER MAY BE
SOLD

            

    

     

    
      	
               
      

            	
              11.1

            	
              The
      Contractor shall deliver and sell Desalinated Water produced by the Plant
      to the Corporation only.  The Corporation may sell the
      Desalinated Water produced by the Plant to any
  party.

            

    

     

    
      	
              12. 

            	
              PAYMENTS

            

    

     

    
      	
               
      

            	
              12.1

            	
              All
      costs and prices in the Bid shall be expressed in Bahamian Dollars and all
      payments will be made in Bahamian Dollars.  A one-time payment
      of B$250,000 for a technical services allowance shall be made by the
      Contractor to the Corporation within 14 days of the receipt by the
      Contractor of the Authorization to Proceed with the construction of the
      Plant.  An allowance of B$300,000 for BEC electrical power
      supply has been included in the capital cost of the Plant given in
      clause 36.1.  The payment for the electrical power supply
      shall be made to BEC by the Contractor upon receipt of a quote for the
      same, and the balance, if any, shall be paid to the Corporation within 14
      days of payment to BEC.

            

    

     

    
      	
               
      

            	
              12.2

            	
              The
      Contractor shall provide a weekly report to the Corporation, not later
      than 2 business days following the completion of the week, in respect to
      Satisfactory Desalinated Water delivered to the Corporation during the
      week, for any outstanding sums chargeable to the Corporation by the
      Contractor and containing all other matters described in
      Clause 7.2.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        18

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              12.3

            	
              For
      the purposes of payment with respect to monthly billings for Desalinated
      Water delivered, payment shall be made in Bahamian
      Dollars.  Subject to Clause 7.7, the Desalinated Water Sale
      Price per KIG shall be adjusted during the Desalinated Water Delivery
      Period on account of escalation in accordance with Appendix B to this
      Agreement and the terms hereof.

            

    

     

    
      	
               
      

            	
              12.4

            	
              Payments
      due to the Contractor, from the Corporation as per the terms and
      conditions of this Agreement, shall be made by the Corporation to the
      Contractor, not later than 30 days following the date of receipt by the
      Corporation of the corresponding
billing.

            

    

     

    
      	
               
      

            	
              12.5

            	
              Any
      payments due to the Corporation from the Contractor as per the terms and
      conditions of this Agreement shall be made by the Contractor to the
      Corporation, not later than 30 days following the date of receipt by the
      Contractor of the corresponding billing.  However, billings by
      the Corporation shall not be made at intervals less than one
      month.

            

    

     

    
      	
               
      

            	
              12.6

            	
              Payments
      due to the Contractor from the Corporation, and vice versa, if not paid by
      the due date, shall, until paid, accrue interest at the current prime
      interest rate as advised by the Central Bank of The
    Bahamas.

            

    

     

    
      	
               
      

            	
              12.7

            	
              i.

            	
              The
      Contractor shall issue with each invoice statement a written undertaking
      that all sums: owing to suppliers or sub-contractors as of the date
      thereof have been or will be paid in accordance with the terms of the
      Contractor's agreement with such suppliers or
    subcontractors.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Should
      the Contractor not make any payments due under part (i) of this sub-clause
      within the stated period the Corporation shall be entitled to pay such
      sums provided for in the sub-contract direct to the supplier or
      sub-contractor provided the monies to be paid do not exceed approved
      invoices to the Corporation submitted by the Contractor.  The
      Corporation shall deduct such payments from any sums due or which may
      become due to the Contractor.

            

    

     

    
      	
              13. 

            	
              UNSATISFACTORY
      DESALINATED WATER

            

    

     

    
      	
               
      

            	
              13.1

            	
              The
      Plant shall be so designed and equipped to fully and unfailingly
      automatically "dump" (dispose of to waste) all and any Unsatisfactory
      Desalinated Water produced; that is Desalinated Water having (i) having a
      chloride concentration exceeding 250 mg/L or (ii) failing to meet the
      definition of Satisfactory Desalinated Water
      herein.  Unsatisfactory Desalinated Water shall under no
      circumstances pass through the Water Tariff Meter or be billed or supplied
      to the Corporation.

            

    

     

    
      	
              14. 

            	
              PLANT
      "SERVICE" WATER

            

    

     

    
      	
               
      

            	
              14.1

            	
              Any
      potable water fed into the Plant from the Corporation's adjacent potable
      water systems, during the period of the Agreement, shall be metered by the
      Corporation and paid for by the Contractor to the Corporation at the
      Corporation's current New Providence public supply rates and
      charges.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	
              15.

            	
              OWNERSHIP
      OF THE PLANT AND DISPOSITION OF THE PLANT AT THE END OF THE CONTRACT
      PERIOD

            

    

     

    
      	
               
      

            	
              15.1

            	
              Whilst
      this Agreement is in existence and for the term hereof, ownership of the
      Plant, together with any parts thereof, including without limitation, any
      parts consigned to the Corporation in accordance with the provisions of
      Clause 7.11 hereof, shall be vested 100% in the
      Contractor.

            

    

     

    
      	
               
      

            	
              15.2

            	
              At
      the end of the Desalinated Water Delivery Period, the Corporation reserves
      the right to extend the Desalinated Water Delivery Period for an
      additional five (5) year period PROVIDED THAT where the Corporation wishes
      to extend the Desalinated Water Delivery Period, notice thereof shall be
      given to the Contractor at least six (6) months prior to the expiration of
      the initial Desalinated Water Delivery Period.  The Contractor
      also reserves the right to present a proposal to the Corporation for
      extension of the Desalinated Water Delivery Period at least six (6) months
      prior to the expiration of the initial Desalinated Water Delivery
      Period.  If the Corporation and the Contractor agree to extend
      the Desalinated Water Delivery Period, the price of Desalinated Water per
      KIG shall be renegotiated based on the deletion of the fixed capital cost
      and interest elements of the then current Desalinated Water Sale Price per
      KIG.  All other provisions of this Agreement shall remain in
      force unless amended in writing by mutual agreement of the Corporation and
      Contractor.  Ownership of the Plant during the extended
      Desalinated Water Delivery period shall continue to be vested in the
      Contractor.

            

    

     

    
      	
               
      

            	
              15.3

            	
              At
      the end of the Desalinated Water Delivery Period or at the end of the
      extended Contract period, if the Contract is extended in accordance with
      the provisions of Clause 15.2
hereof:

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Contractor shall have a six (6) month Demobilization Period in which to
      demobilize.  The Contractor shall leave the Plant Site in neat,
      clean and tidy condition with all junk, garbage, and other miscellaneous
      rubbish removed to the satisfaction of the Corporation.  All
      materials to be removed from the site for disposal shall be disposed of in
      an environmentally sound manner in compliance with the Laws of the
      Commonwealth of The Bahamas and to the satisfaction of the
      Corporation.

            

    

     

    
      	
               
      

            	
              ii.

            	
              The
      Contractor shall submit a comprehensive list of materials, equipment,
      parts, chemicals and consumables, and facilities that the Contractor
      intends to remove from the Site to the Corporation for review and
      approval.  The Corporation shall have 30 days to review the list
      for completeness and to indicate in writing any items which the
      Corporation would like to purchase.  The Corporation shall be
      given the first right of refusal to purchase any equipment and/or
      facilities on the Contractor's list.  The purchase price for all
      items of equipment and facilities which the Corporation intends to
      purchase will be negotiated between the Corporation and the
      Contractor.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        20

        
          

        

      

      
        
        

      

    

     

    
      	
              16. 

            	
              PLANT
      BUYOUT PRICE SCHEDULE

            

    

     

    
      	
               
      

            	
              16.1

            	
              The
      Corporation reserves the right to purchase and take possession of the
      Plant in the circumstances described in Clause 42 "Default and
      Termination".  In the event of Plant purchase the Corporation
      will pay the Plant Buyout Purchase Price which will be determined from the
      agreed Plant Buyout Purchase Price Schedule which is attached as Appendix
      C to this Agreement.  The Contractor's proposed Plant buyout
      purchase price schedule was required to be submitted with the Bid in
      accordance with Section 3, Clause 11, Part 2 of the Bidding
      and Contract Documents.

            

    

     

    
      	
              17. 

            	
              SECURITIES

            

    

     

    The
Contractor shall furnish at its own expense and acceptable to the Corporation a
Construction Performance Security, and a Performance and Operation Security all
favoring the Corporation, as security for the due and faithful performance by
the Contractor of all its obligations under this Agreement as
follows:

     

    
      	
               
      

            	
              17.1

            	
              Construction
      Performance Security

            

    

     

    The
Construction Performance Security shall either be:

     

    
      	
               
      

            	
              a.

            	
              A
      bank guarantee in the form attached hereto in Appendix D and in an
      amount equal to 10% of the total capital cost of the Plant contained in
      the Bid.

            

    

     

    or:

     

    
      	
               
      

            	
              b.

            	
              A
      Performance Bond in the form set out in Appendix D in an amount equal
      to 25% of the total capital cost of the Plant contained in the
      Bid.

            

    

     

    
      	
               
      

            	
              17.2

            	
              Performance
      and Operations Security

            

    

     

    The
Performance and Operations Security shall be in the form of either:

     

    
      	
               
      

            	
              a.

            	
              Bank
      Guarantees, for each upcoming year of the Desalinated Water Delivery
      Period, in an amount equal in value to 50% of the following
      sum:

            

    

     

    Guaranteed
Water Quantity for the upcoming year multiplied by the then current Desalinated
Water Sale Price per KIG of Satisfactory Desalinated Water to be delivered to
the Corporation in the upcoming year;

     

    or

     

    
      
        CONFIDENTIAL

        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              b.

            	
              A
      Performance Bond, for each upcoming year of the Desalinated Water Delivery
      Period, in an amount for each upcoming year, equal in value to 110% of the
      following sum:

            

    

     

    Guaranteed
Water Quantity for the upcoming year multiplied by the Desalinated Water Sale
Price per KIG of Satisfactory Desalinated Water to be delivered to the
Corporation the upcoming year.

     

    
      	
               
      

            	
              17.3

            	
              Securities

            

    

     

    If the
securities as outlined above are provided by the Contractor in the form of bank
guarantees, they shall be issued either at the Contractor's option by a bank
located in The Bahamas, or a reputable foreign bank through a correspondent bank
located in The Bahamas.

     

    If the
securities as outlined above are provided by the Contractor in the form of
bonds, they should be issued by a reputable bonding/insurance Company or bank
located in The Bahamas and acceptable to the Corporation or by a reputable
foreign bonding/insurance Company or bank through a correspondent insurance
company or bank located in the Bahamas.

     

    The
Performance Security for Construction must be executed within 30 days of the
Letter of Acceptance and shall remain in effect for at least one year after the
date of Substantial Completion.

     

    All bonds
signed by an agent must be accompanied by a certified copy of the authority to
act.

     

    The
format and wording of all securities must be approved by the
Corporation.

     

    Performance
and Operations Securities must be executed at least 30 days before their
validity commences.  All securities must be in Bahamian or U.S.
Dollars.

     

    The
Performance and Operation Security shall be renewed annually on the anniversary
date of the commencement of the Desalinated Water Delivery Period.

     

    Evidence
of renewal of the Performance and Operation Security shall be submitted with the
invoice for the next to the last month in the year preceding the effective date
of such renewal.  The value of the Performance and Operation Security
shall be adjusted annually to reflect annual adjustments in the Desalinated
Water Sale Price per KIG of Desalinated Water delivered.  If the
surety on any bond furnished by the Contractor is declared bankrupt or becomes
insolvent or its right to do business is terminated in The Bahamas, the
Contractor shall within five days thereafter substitute another bond and surety,
both of which must be acceptable to the Corporation.

     

    
      
        CONFIDENTIAL

        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    
      	
              18. 

            	
              INSURANCES

            

    

     

    
      	
               
      

            	
              18.1

            	
              The
      Contractor without limiting its obligations shall purchase and maintain,
      for the Construction Period and the Desalinated Water Delivery Period,
      comprehensive general liability and other insurances for the Work being
      performed and furnished pursuant to the terms hereof such as will provide
      protection from claims set forth below, which may arise out of or result
      from the Contractor's performance and furnishing of the Work and the
      Contractor's other obligations under this Agreement.  This shall
      apply whether the contracted obligations are to be performed or furnished
      by the Contractor, any sub-contractor to the Contractor or by anyone
      directly or indirectly employed by any of them to perform or furnish any
      of the Work, or by anyone for whose acts any of them may be
      liable:

            

    

     

    
      	
               
      

            	
              a.

            	
              Claims
      under worker's or workmen's compensation, disability benefits and other
      similar employee benefit acts (as per The Bahamas statutory requirements
      and otherwise);

            

    

     

    
      	
               
      

            	
              b.

            	
              Claims
      for damages because of bodily injury, occupational sickness or disease, or
      death of Contractor's and sub-contractor's
  employees;

            

    

     

    
      	
               
      

            	
              c.

            	
              Claims
      for damages because of bodily injury, sickness or disease, or death of any
      person other than the Contractor's employees;
  and

            

    

     

    
      	
               
      

            	
              d.

            	
              Claims
      for damages insured by personal injury liability coverage which are
      sustained (a) by any person as a result of the Contractor's performance of
      its obligations hereunder an offense directly or indirectly related to the
      employment of such person by the Contractor, or (b) by any other person
      for any other reason, and;

            

    

     

    
      	
               
      

            	
              e.

            	
              Claims
      for damages, other than to the Works themselves because of injury to or
      destruction of tangible property wherever located, including loss of use
      resulting therefrom.

            

    

     

    The
minimum amount of the above listed insurances shall be B$2,000,000 per
occurrence, with the number of occurrences unlimited.

     

    The
comprehensive general liability insurance shall include completed operations
insurance.  All of the policies of insurance so required to be
purchased or maintained (or the certificates or other evidence thereof) shall
contain a provision or endorsement that the coverage afforded will not be
cancelled, materially changed or renewal refused until at least thirty days'
prior written notice has been given to the Corporation by certified mail All
such insurance shall remain in effect throughout the entire period of this
Agreement.  The Contractor shall furnish the Corporation with evidence
of continuation of such insurance within 30 days after signing the Letter of
Acceptance and on an annual basis.

     

    
      
        CONFIDENTIAL

        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              18.2

            	
              Contractual
      Liability Insurance

            

    

     

    
      	
               
      

            	
              18.2.1

            	
              The
      comprehensive general liability insurance required, as above shall include
      contractual liability insurance applicable to the Contractor's obligations
      herein.  These obligations shall include the
      following:

            

    

     

    
      	
               
      

            	
              18.2.1.1

            	
              The
      Contractor shall pay all license fees and royalties and assume all costs
      incident to the use in the performance of the Work or the incorporation in
      the Work of any invention, design, process, product or device which is the
      subject of patent rights or copyrights held by others.  If a
      particular invention, design, process, product or device is specified in
      the Bidding and Contract Documents for use in the performance of the Work
      and if to the actual knowledge of the Corporation or its engineer its use
      is subject to patent rights or copyrights calling for the payment of any
      license fee or royalty to others, the existence of such rights shall be
      disclosed by the Corporation in the Bidding and Contract
      Documents.  The Contractor shall indemnify and hold harmless the
      Corporation and their engineer and anyone directly or indirectly employed
      by either of them from and against all claims, damages, losses and
      expenses (including attorneys' fees and court costs) arising out of any
      infringement of patent rights or copyrights incident to the use in the
      performance of the Work or resulting from the incorporation in the Work of
      any invention, design, process, product or device not specified in the
      Bidding and Contract Documents, and shall defend all such claims in
      connection with any alleged infringement of such
  rights.

            

    

     

    
      	
               
      

            	
              18.2.1.2

            	
              To
      the fullest extent permitted by laws and regulations, the Contractor shall
      indemnify and hold harmless the Corporation and their engineer and
      consultants, agents and employees from and against all claims, damages,
      losses and expenses, direct, indirect or consequential (including but not
      limited to fees and charges of engineers, architects, attorneys and other
      professionals and court costs) arising out of or resulting from the
      performance of the Work, provided that any such claim, damage, loss or
      expense (a) is attributable to bodily injury, sickness, disease or death
      or to injury to or destruction of tangible property (other than the Work
      itself) including the loss of use resulting therefrom and (b) is caused in
      whole or in part by any negligent act or omission of the Contractor, any
      subcontractor, any person or organization directly or indirectly employed
      by any of them to perform or furnish any of the Work or anyone for whose
      acts any of them may be liable, regardless of whether or not caused in
      part by a party indemnified hereunder or arises by or is imposed by laws
      and regulations regardless of the negligence of any such
      party.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
    

    
      	
               
      

            	
              18.2.1.3

            	
              In
      any and all claims against the Corporation or their engineer or any of
      their consultants, agents or employees, by any employee of the Contractor,
      any subcontractor, any person or organization directly or indirectly
      employed by any of them to perform or furnish any of the Work or anyone
      for whose acts any of them may be liable, the indemnification obligation
      under Clause 18.2.1.2 above shall not be limited in any way by any
      limitation on the amount or type of damages, compensation or benefits
      payable by or for the Contractor or any such subcontractors or other
      person or organization under workers' or workmen's compensation acts,
      disability benefit acts or other employee benefit
  acts.

            

    

     

    
      	
               
      

            	
              18.3

            	
              Corporation's
      Liability Insurance

            

    

     

    The
Corporation shall be responsible for purchasing and maintaining the
Corporation's own liability insurance and, at the Corporation's option, may
purchase and maintain such insurance as will protect the Corporation against
claims which may rise from operations under this Agreement.

     

    
      	
               
      

            	
              18.4

            	
              Property
      Insurance

            

    

     

    The
Contractor shall purchase and maintain property insurance upon the Work at the
Site to the full insurable value thereof (subject to such deductible amounts as
may be required by applicable laws and regulations) within 30 days after signing
the Letter of Acceptance and for the duration of this entire Agreement and
annually therefrom.  The value of such insurance shall be the complete
current replacement value of the Plant.  This insurance shall include
and adequately provide for the interests of and services provided by BEC, the
Corporation, the Contractor, sub-contractors and consultants in the Work (if
any) all of whom shall be listed as insured or additional insured parties and
shall insure against the perils of fire and extended
coverage.  Included shall be "all risk" insurance for physical loss
and damage including theft, vandalism and malicious mischief, collapse, water
damage and other perils.  Also covered shall be losses, and expenses
arising out of or resulting from any insured loss or incurred in the repair or
replacement of any insured property (including but not limited to fees and
charges of engineers, architects, attorneys and other
professionals).  If not covered under the "all risk" insurance, the
Contractor shall purchase and maintain similar property insurance on portions of
the Work stored on and off the site or in transit when such portions of the Work
is to be included in the capital cost of the Plant.

     

    
      	
               
      

            	
              18.5

            	
              The
      Contractor shall purchase and maintain such machinery insurance or
      additional property insurance as may be required by applicable laws and
      regulations which will include the interests of BEC, the Corporation, the
      Contractor, sub-contractors, and consultants in the Work (if any) all of
      whom shall be listed as insured or additional insured
    parties.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              18.6

            	
              All
      the policies of the insurance (or the certificates or other evidence
      thereof) required to be purchased and maintained by the Contractor shall
      contain a provision or endorsement that the coverage afforded will not be
      cancelled, materially changed or renewal refused until at least thirty
      days (30) prior written notice has been given to the Contractor by
      certified mail and shall contain waiver provisions as
    follow:

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Contractor shall be responsible for purchasing and maintaining any
      property insurance to protect their interests and that of the
      sub-contractors or others involved in the Work in excess of any deductible
      amounts.  The risk of loss within the deductible amount will be
      borne by the Contractor or others suffering any such loss.  If
      any of them wishes property insurance coverage within the limits of such
      amount, each may purchase and maintain it at the purchaser's
      expense.

            

    

     

    
      	
               
      

            	
              ii.

            	
              Should
      the Corporation request in writing that other special coverage be included
      in the property insurance policy, the Contractor shall, if possible,
      include such insurance.  The cost thereof will be charged to the
      Corporation by an adjustment in the capital cost by appropriate change
      order (agreed by the parties and effected in the manner described in
      Clause 37 hereof) or written amendment.  Prior to
      commencement of the Work at the Site, the Contractor shall, in writing,
      advise the Corporation whether or not such other insurance has been
      procured by the Contractor.

            

    

     

    
      	
               
      

            	
              iii.

            	
              The
      Contractor shall at all times furnish certified proof to the Corporation
      that all insurances are kept updated and renewed and that insurance
      premiums have been paid prior to their due
  dates.

            

    

     

    
      	
               
      

            	
              18.7

            	
              Waiver
      of Rights

            

    

     

    
      	
               
      

            	
              18.7.1

            	
              The
      Corporation and the Contractor waive all rights against each other for all
      losses and damages caused by any of the perils covered by the policies of
      insurance provided in response to the above and any other property
      insurance applicable to the Work, and also waive all such rights against
      the sub-contractors, consultants (if any) and all other parties named as
      insureds in such policies for losses and damages so caused.  It
      is required that each sub-contract between the Contractor and a
      sub-Contractor will contain similar waiver provisions by the
      sub-contractor in favor of the Corporation, the Contractor, consultants
      (if any) and all other parties, named as insured.  None of the
      above waivers shall be extended to the rights that any of the insured
      parties may have to the proceeds of insurance payable under any policy so
      issued.

            

    

     

    
      	
               
      

            	
              18.7.2

            	
              The
      Corporation and the Contractor intend that any policies provided shall
      protect all of the parties insured and provide primary coverage for all
      losses and damages caused by the perils covered
      thereby.  Accordingly, all such policies shall contain
      provisions to the effect that in the event of payment of any loss or
      damage the insurer will have no rights of recovery against any of the
      parties named as insured or additional insured, and if the insurers
      require separate waiver forms to be signed by consultants (if any) the
      Corporation will obtain the same, if such waiver forms are required of any
      sub-contractor, the Contractor will obtain the
  same.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              18.8

            	
              Submission
      of Claims

            

    

     

    Each
insured shall submit an independent claim in respect of any loss suffered by
such insured and covered by the policies of insurance maintained pursuant to the
terms of this clause 18.

     

    
      	
               
      

            	
              18.9

            	
              Acceptance
      of Insurance

            

    

     

    
      	
               
      

            	
              18.9.1

            	
              If
      the Corporation has any objections to the coverage afforded by or other
      provisions of the insurance required to be purchased and maintained by the
      Contractor, the Corporation shall notify the Contractor in writing thereof
      within 30 days of the date of delivery of such certificate to the
      Corporation.  The Corporation and the Contractor shall each
      provide to the other such additional information in respect of insurance
      provided by each as the other may reasonably request.  Failure
      by the Corporation or the Contractor to file any notice of objection
      within the time provided shall constitute acceptance of such insurance
      purchased by the other.

            

    

     

    
      	
               
      

            	
              18.9.2

            	
              All
      insurances shall be effected at least 30 days before their period of
      validity commences, with copies of the policies and premium paid lodged
      with the Corporation at the time of their
  execution.

            

    

     

    
      	
              19. 

            	
              DAMAGES
      TO THE CORPORATION'S AND OTHERS
PROPERTY

            

    

     

    
      	
               
      

            	
              19.1

            	
              The
      Contractor shall assume full responsibility for any damage inflicted by
      the Contractor or its agents on property owned by the Corporation and
      others, due to and arising from, but not limited to, the Contractor's
      construction, operation and maintenance of the
  Plant.

            

    

     

    
      	
              20.

            	
              THE
      CONTRACTOR'S RESPONSIBILITY FOR DESALINATED WATER AFTER DELIVERY TO THE
      CORPORATION

            

    

     

    
      	
               
      

            	
              20.1

            	
              Provided
      that the Desalinated Water produced by the Plant conforms with the
      definition of Satisfactory Desalinated Water, as herein, the Contractor
      will assume no responsibility for the Desalinated Water, its storage, its
      ultimate use and its disposal after it has passed through the water Tariff
      Meter, with the exception of loss of product water, that is Desalinated
      Water stored by the Corporation in the ground storage tank to be provided
      by the Contractor in accordance with the terms of the Bid, due to the
      Contractor's failure to properly maintain such ground storage
      tank.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    
      	
              21. 

            	
              LAND
      FOR PLANT CONSTRUCTION PURPOSES

            

    

     

    
      	
               
      

            	
              21.1

            	
              If
      available the Corporation shall, at no cost to the Contractor, temporarily
      allocate sufficient area adjacent to the Plant being constructed for the
      Contractor's Plant construction purposes.  On the completion of
      construction of the Plant this area shall be left neat and clean, free of
      all garbage, junk, trash, surplus spoil, and miscellaneous garbage by the
      Contractor and shall not thereafter be available for use by the
      Contractor.  The Contractor shall be responsible for determining
      the environmental condition of the said area prior to the Construction
      Period and after the Desalinated Water Delivery Period, and these
      assessments must be agreed by the Corporation.  The Contractor
      shall be responsible at its own expense for rectifying any environmental
      damage it may cause during the Construction period and Desalinated Water
      Delivery Period.

            

    

     

    
      	
               
      

            	
              21.2

            	
              The
      Corporation accepts no responsibility for the Contractor's labor,
      construction materials, equipment, plant, or other belongings whilst in
      the above mentioned construction area or any area allocated for the
      Contractor during construction.

            

    

     

    
      	
              22.

            	
              RESPONSIBILITY
      FOR THE PHYSICAL CONDITION AND SECURITY OF THE PLANT DURING THE PERIOD OF
      AGREEMENT

            

    

     

    
      	
               
      

            	
              22.1

            	
              Responsibility
      for the physical condition and security of the Plant shall rest entirely
      with the Contractor during the period of this Agreement.  The
      Contractor shall be responsible for determining the environmental
      condition of the said area prior to and during the Desalinated Water
      Delivery Period, and these assessments must be agreed by the
      Corporation.  The Contractor shall be responsible at its own
      expense for rectifying any environmental damage it may cause during the
      Construction period and Desalinated Water Delivery Period At all times
      during the Desalinated Water Delivery Period the Contractor shall keep the
      Plant Site neat, clean, tidy and free of
  garbage.

            

    

     

    
      	
              23. 

            	
              THE
      CONTRACTOR'S REGULAR REPORTS TO THE
CORPORATION

            

    

     

    
      	
               
      

            	
              23.1

            	
              During
      the Desalinated Water Delivery Period the Contractor shall make monthly
      reports to the Corporation regarding maintenance, operation, replacement
      of parts (including membranes and cartridge filter elements), operating
      periods, staff employed, incidents (if any), and any other inputs
      considered necessary by the Contractor concerning the Plant in
      general.  The format of the above mentioned reports, their
      contents, matter covered, etc., shall be approved by the
      Corporation.

            

    

     

    
      	
              24.

            	
              APPROVAL
      OF THE CONTRACTOR'S OPERATING AND MAINTENANCE
  PERSONNEL

            

    

     

    
      	
               
      

            	
              24.1

            	
              All
      personnel employed by the Contractor in The Bahamas shall be fully
      qualified and experienced in their particular
  duties.

            

    

     

    
      	
               
      

            	
              24.2

            	
              The
      Contractor shall remove from the Plant, any of its suppliers or
      sub-contractors employees to whom the Corporation take reasonable
      objection.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
              25. 

            	
              PERSONNEL
      ENGAGED BY THE CONTRACTOR

            

    

     

    
      	
               
      

            	
              25.1

            	
              Resident
      persons engaged by the Contractor to construct, operate and maintain the
      Plant during the Desalinated Water Delivery Period shall be (a) Bahamian
      citizens; or (b) permanent residents of The Bahamas with the right to be
      gainfully employed in the Bahamas; or (c) expatriates in possession of
      work permits.

            

    

     

    
      	
              26. 

            	
              WORK
      PERMITS

            

    

     

    
      	
               
      

            	
              26.1

            	
              Procurement
      of work permits for expatriate personnel shall be the responsibility of
      the Contractor, including payment for same, but the Corporation may offer
      such assistance as it can in the procurement of work permits where
      qualified Bahamians could not be
found.

            

    

     

    
      	
              27. 

            	
              CORPORATION'S
      RIGHTS TO VISIT AND INSPECT THE
PLANT

            

    

     

    
      	
               
      

            	
              27.1

            	
              During
      the Construction Period the Corporation and/or its representatives shall
      have the right to enter upon the Plant Site at any reasonable time to
      check and ensure that the Plant is being constructed, installed, equipped,
      outfitted and otherwise, in accordance with Specifications and approved
      design and requirements of this Agreement.  During the
      Construction Period the Corporation shall have the right, if it so
      desires, to have its accredited inspectors at the
  site.

            

    

     

    
      	
               
      

            	
              27.2

            	
              During
      the Desalinated Water Delivery Period, the Corporation shall have the
      rights to (a) enter upon the Plant Site at any reasonable time to check
      the condition, operation, maintenance, and efficiency of the Plant, and to
      (b) visit the Plant Site with the Corporation's personnel or other
      accredited representatives.  The Contractor shall, when
      requested by the Corporation in writing, familiarize the Corporation's
      personnel or accredited representatives in the on-going operations and
      maintenance of the Plant.

            

    

     

    
      	
               
      

            	
              27.3

            	
              During
      the Desalinated Water Delivery Period, the Corporation reserves the right
      to station an engineer at the Plant to observe operations, review
      maintenance logs, and monitor water quantity, quality, and the usage of
      consumables.  Office space of no more than 200 square feet shall
      be provided at the Plant for use by the Corporation's
      personnel.

            

    

     

    
      	
              28. 

            	
              RECTIFICATION
      OF DEFECTS AND DEFICIENCIES

            

    

     

    
      	
               
      

            	
              28.1

            	
              The
      Plant shall be kept at all times in satisfactory operating condition and
      satisfactorily repaired by the
Contractor.

            

    

     

    
      	
               
      

            	
              28.2

            	
              The
      Contractor shall submit its proposed maintenance program to the
      Corporation for approval, which approval shall not be unreasonably
      withheld.  All requests for approval shall be answered within 10
      business days of the submission by the Contractor of such
      request.  If such request is not answered within the said 10
      business day period, the maintenance program shall be deemed to have been
      approved by the Corporation.  During the Desalinated Water
      Delivery Period, the Corporation reserves the right to inspect the Plant
      logs on a quarterly basis to ensure that the Contractor is conscientiously
      adhering to the maintenance
program.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              28.3

            	
              Defects
      and deficiencies in the Plant and its operation, maintenance and repair
      shall be fully rectified by the Contractor.  Catastrophic Damage
      shall be rectified only upon agreement in writing between the Contractor
      and the Corporation regarding the effect of such rectification on this
      Agreement and the allocation of costs for
same.

            

    

     

    
      	
              29. 

            	
              NOTICE
      OF CESSATION OF PRODUCTION

            

    

     

    
      	
               
      

            	
              29.1

            	
              Any
      cessation of Desalinated Water production by the Plant exceeding one day,
      due to any cause, shall be immediately notified to the Corporation by the
      Contractor by facsimile or email (together with the time and reason for
      such cessation and the estimated time needed to resume
      production).  On resumption of production the Contractor shall
      notify the Corporation by facsimile or email of the date and time of such
      resumption.  Failure of the Contractor to so comply with the
      above shall cause the Corporation to advise the Contractor by facsimile or
      email of the dates and times of cessation and resumption of production as
      assessed by the Corporation, which shall then
  prevail.

            

    

     

    
      	
               
      

            	
              29.2

            	
              The
      Corporation shall notify the Contractor by facsimile or email of any
      foreseen requirement on the part of the Corporation that would require
      that Desalinated Water production should cease or be curtailed
      temporarily.

            

    

     

    
      	
              30.

            	
              REPLACEMENT
      OF DEFECTIVE MEMBRANES, MICRON SIZE CARTRIDGE FILTER ELEMENTS AND
      MULTIMEDIA FILTRATION MATERIALS

            

    

     

    
      	
               
      

            	
              30.1

            	
              During
      the Desalinated Water Delivery Period, the Contractor shall replace all
      membranes, micron size cartridge filter elements, and multi-media
      filtration materials that are or have become defective or unfit for their
      purposes.

            

    

     

    
      	
              31.

            	
              CORPORATION'S
      INSPECTION OF THE PLANT DURING THE CONSTRUCTION
  PERIOD

            

    

     

    
      	
               
      

            	
              31.1

            	
              During
      the Construction Period the Corporation shall have the right to enter upon
      the Plant Site at any reasonable time to check and ensure that the Plant
      is being constructed, installed, equipped, outfitted and otherwise, in
      accordance with Specifications, approved design and requirements of this
      Agreement.  Any deficiencies, defects, and/or shortcomings noted
      by the Corporation in regard to the foregoing, shall be notified to the
      Contractor and upon receipt of the notification they shall be rectified by
      the Contractor.  Also, on receipt of the notification, the
      Contractor shall advise within 5 business days what corresponding action
      it will be taking.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    
      	
              32.

            	
              VERIFICATION
      OF DESALINATED WATER QUANTITY, QUALITY AND PLANT PERFORMANCE
      GUARANTEES

            

    

     

    
      	
               
      

            	
              32.1

            	
              Requirements
      for performance testing of the Plant prior to acceptance by the
      Corporation are specified in Section 10.3.2.2 of the Bidding and
      Contract Documents.

            

    

     

    
      	
               
      

            	
              32.2

            	
              The
      Contractor shall purchase, install and calibrate at its own expense the
      following measurement and testing
devices:

            

    

     

    
      	
               
      

            	
              n

            	
              the
      Water Tariff Meter or Revenue Meter

            

    

    
      	
               
      

            	
              n

            	
              a
      Corporation's Check Meter (the "Corporation's Check
  Meter")

            

    

    
      	
               
      

            	
              n

            	
              a
      Desalinated Water Quality Meter (the "Desalinated Water Quality
      Meter")

            

    

     

    Provided
however, that the Corporation shall be entitled to verify the quality,
suitability, installation and calibration of such
devices.  Specifications for these measurement and testing devices are
contained in Section 10.2.3.6 of Part 2 of the Bidding and Contract
Documents.  These measurement and testing devices shall be used to
verify the Contractor's compliance with the quantity and quality requirements of
this Agreement.

     

    
      	
               
      

            	
              32.3

            	
              In
      event that the Water Tariff Meter and the Corporation's Check Meter differ
      by more than two percent (2%), the calibration of such meters shall be
      checked and brought into agreement by a certified factory representative
      of the meter manufacturer at the Contractor's expense.  In the
      event that this calibration check indicates that the Water Tariff Meter
      readings were in error, the correct amount of Satisfactory Desalinated
      Water delivered during the period in which the incorrect measurements were
      taken shall be determined by applying the meter correction factor,
      calculated by the factory representative, to the amount of water produced
      during the period over which inaccurate meter readings were
      made.  In the event that the parties hereto cannot agree on the
      actual period during which the inaccurate readings were made, the period
      during which the measurements are to be adjusted shall be the last
      one-half of the period from the most recent previous calibration of the
      Water Tariff Meter until the meter reading was corrected by the factory
      representative.  To the extent that such an adjustment covers a
      period for which an invoice has been issued pursuant to Clause 12
      "Payments", any corrections to the amount of such invoice as a result of
      the flow correction adjustment shall be added to or credited against, as
      applicable, the amount of the next invoice issued after such adjustment is
      made.

            

    

     

    
      	
               
      

            	
              32.4

            	
              In
      the event the Desalinated Water Quality Meter indicates that the
      conductivity exceeds a value corresponding to the maximum allowable stated
      in the Performance Guarantee, the Desalinated Water shall be sampled
      within one hour and analyzed using an approved analytical method for
      chlorides to determine the chloride concentration in the Desalinated
      Water.  Chloride concentration analysis shall be completed
      according to the testing procedures described in the Standard Methods for
      Examination of Water and Wastewater, latest edition.  The
      Contractor shall notify the Corporation by telephone within twelve (12)
      hours if analytical tests confirm that chloride levels exceed 250 mg/1 at
      any time and shall furnish copies of all analytical test results to the
      Corporation upon receipt.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        31

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              32.5

            	
              The
      Contractor shall prepare and deliver to the Corporation a monitoring and
      sampling protocol for review and comment prior to Substantial Completion,
      which shall be attached as Exhibit 1 hereto.  The monitoring and
      sampling protocol shall be based on the standards set forth in
      Section 8 of Part 2 (Performance Guarantees) of the Bidding and
      Contract Documents and shall include the point and frequency of sampling
      for each constituent to be monitored.  The Contractor shall
      furnish copies of water quality monitoring results to the Corporation with
      such frequency and such form as may be agreed upon.  The
      Contractor shall monitor and sample water in accordance with the
      monitoring and sampling protocol and shall furnish the Corporation with a
      summary of all analytical test results required during each invoice period
      on a monthly basis.  The Contractor shall also monitor
      Desalinated Water quality on a continuous basis by measuring conductivity
      with the Desalinated Water Quality Meter.  During the
      Desalinated Water Delivery Period (and prior to such period as is
      appropriate) the Corporation shall have the right to enter upon the Plant
      Site and take samples of and test the Desalinated Water for its compliance
      with the above mentioned Desalinated Water quality requirements, listed
      herein.  Certified accuracy apparatus for conducting such test
      shall be provided by the Contractor and be readily available to the
      Corporation at all times during the period of this
      Agreement.  However, any such sampling or testing shall not
      excuse the Contractor's compliance with this
  Agreement.

            

    

     

    
      	
               
      

            	
              32.6

            	
              The
      Contractor shall have the calibration of the Water Tariff Meter,
      Corporation's Check Meter, and Desalinated Water Quality Meter checked on
      a scheduled basis by a manufacturer's certified factory representative in
      accordance with the manufacturer's specifications, guidelines or
      recommendations.  Each time the meter is checked or calibrated,
      the Contractor shall deliver to the Corporation a written certification,
      which shall include the date and time at which the meter was calibrated
      and the name, address, and telephone number for the manufacturer's
      representative who performed the calibration.  The Corporation
      shall have the right to inspect and verify that such calibrations have
      been performed.  The Corporation shall also have the right to
      collect samples and take measurements to confirm the accuracy of these
      devices, at the Corporation's expense upon reasonable notification to the
      Contractor.  However, any such sampling or testing by the
      Corporation shall not interfere with operation and maintenance of the
      Plant.  The Corporations sampling and testing shall not excuse
      Contractor's obligations to calibrate and adjust all the measuring devices
      as specified herein.

            

    

     

    
      	
               
      

            	
              32.7

            	
              As
      and when requested by the Corporation, during the Desalinated Water
      Delivery Period, the Contractor shall, to the satisfaction of the
      Corporation and as witnessed by the authorized Corporation personnel,
      check the Plant Performance Guarantees contained in the
    Bid.

            

    

    
      
        CONFIDENTIAL

         

      

      
        32

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    
      	
              33.

            	
              THE
      CONTRACTOR'S OBLIGATIONS AT THE COMPLETION OF THE DESALINATED WATER
      DELIVERY PERIOD

            

    

     

    
      	
               
      

            	
              33.1

            	
              The
      Contractor's obligations at the end of the Desalinated Water Delivery
      Period shall be as described in Clause 15 of this
      Agreement.  In addition, the Contractor will be responsible for
      rectifying environmental damage, if any, caused by the Contractor to the
      Plant Site during the Agreement Period as described in accordance with
      Clauses 21 and 22 of this
Agreement.

            

    

     

    
      	
              34.

            	
              PLANT
      DESIGN FOR MINIMUM WATER TREATMENT CHEMICALS, FUEL OIL AND ELECTRIC POWER
      CONSUMPTIONS

            

    

     

    
      	
               
      

            	
              34.1

            	
              The
      Contractor acknowledges and agrees that the Plant shall be designed and
      equipped for minimum water treatment chemicals consumption, the practical
      minimum fuel oil consumption, the practical minimum electrical power
      consumption and KVA Maximum Demand over its operating life.  All
      the above shall be consistent with a durable and highly efficient
      Plant.  The Plant shall at all times be operated in the most
      efficient manner to afford the lowest practical cost Desalinated Water to
      the satisfaction of the
Corporation.

            

    

     

    
      	
               
      

            	
              34.2

            	
              In
      the event that the Contractor identifies any opportunities for reduction
      of the Desalinated Water Sale Price per KIG through the application of new
      technology, plant modifications to improve efficiency, improved operating
      techniques or procedures, the Contractor and the Corporation shall share
      equally the cost savings which would result from the implementation of
      such improvements.

            

    

     

    
      	
              35. 

            	
              CONSTRUCTION
      PROGRESS REPORTS

            

    

     

    
      	
               
      

            	
              35.1

            	
              During
      the Construction Period the Contractor shall furnish to the Corporation,
      at four (4) week intervals, a Plant procurement and construction progress
      report, illustrated with suitable color photographs to the satisfaction of
      the Corporation.

            

    

     

    
      	
              36. 

            	
              CAPITAL
      COST (VALUE) OF THE PLANT

            

    

     

    
      	
               
      

            	
              36.1

            	
              The
      Contractor advises the Corporation that the capital cost (value) of the
      Plant completely constructed, equipped, outfitted, and tested for
      reliability and performance is * * * * *.  This capital cost
      shall be in respect of the price of Desalinated Water per KIG delivered to
      the Corporation and regarded as a fixed sum not subject to
      escalation.

            

    

     

    This
capital cost represents the financing, detail design, detail engineering,
manufacture, delivery, construction, erection, bonding, insurances,
commissioning, testing and labor through completion of the reliability and
performance tests, interest during construction, and all other items relevant to
the capital cost of the complete Plant through its completion.

     

    
      
        CONFIDENTIAL

        
        

      

      
        33

        
          

        

      

      
        
        

      

    

     

    
      	
              37. 

            	
              CHANGE
      ORDERS

            

    

     

    
      	
               
      

            	
              37.1

            	
              If
      prior to completion of construction of the Plant, but subsequent to
      signing this Agreement, either the Corporation or the Contractor seeks
      modifications or alterations to the Plant or the Specifications, such
      modifications or alternations and their effect on the capital cost of the
      plant and the length of the Construction Period, shall be first mutually
      agreed to in writing by the Contractor before their
      implementation.  The effect of such modifications and
      alterations on the Desalinated Water Sale Price per KIG delivered shall
      also be agreed in writing between the Corporation and the
      Contractor.

            

    

     

    
      	
              38. 

            	
              LIQUIDATED
      DAMAGES

            

    

     

    
      	
               
      

            	
              38.1

            	
              In
      the event that Satisfactory Desalinated Water is not delivered within the
      period guaranteed by the Contractor, as stated herein, then the
      Corporation shall be compensated by the Contractor, as per the
      requirements of Clause 10.1
herein.

            

    

     

    
      	
              39. 

            	
              UPKEEP,
      LOSS AND DAMAGE

            

    

     

    
      	
               
      

            	
              39.1

            	
              The
      Contractor shall be fully responsible for the upkeep and maintenance of
      all equipment and facilities which comprise the Plant including the ground
      storage tank.  Such upkeep and maintenance shall include
      maintaining all equipment in functional condition, maintaining the Plant's
      appearance and aesthetics, and maintaining compliance with all safety
      requirements.  The upkeep and maintenance shall include
      corrosion protection and repainting of painted areas and items on which
      the original painting has
deteriorated.

            

    

     

    
      	
               
      

            	
              39.2

            	
              If
      any loss or damage happens to the Work, or any part thereof, or materials
      or equipment for incorporation therein during the Construction Period and
      during the Desalinated Water Delivery Period for which the Contractor is
      responsible for the care thereof, the Contractor shall, at his own cost
      rectify such loss or damage such that the Plant conforms in every respect
      with that described in the Bid.  The Contractor shall also be
      liable for any loss or damage to the Work caused by it in the course of
      any operations carried out by it for the purpose of complying with its
      obligations.  Catastrophic Damage to the Plant shall be
      rectified as described in
Clause 28.3.

            

    

     

    
      	
              40.

            	
              CONTRACTOR'S
      RESPONSIBILITY TO ITS SUPPLIERS AND
  SUBCONTRACTORS

            

    

     

    
      	
               
      

            	
              40.1

            	
              In
      no way shall the Corporation be responsible for any acts and omissions of
      the Contractor's sub-contractors, suppliers and other persons and
      organization performing or furnishing any of the Work under direct or
      indirect contracts, arrangements or agreements with the
      Contractor.  Nothing in this Agreement shall constitute or
      create any contractual relationship between the Corporation and the
      Contractor's sub-contractors, suppliers and other persons and
      organizations performing any of the Work, nor shall it create any
      obligation on the part of the Corporation to pay, or to attend to the
      payment of any monies due such sub-contractor, supplier, or other person
      or organization.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    
      	
              41. 

            	
              STANDBY
      FEE

            

    

     

    
      	
               
      

            	
              41.1

            	
              In
      the event that due to circumstances outside the control of the Corporation
      it becomes necessary for the Corporation to request cessation of operation
      of the Plant for an indefinite period, the Contractor shall whilst the
      period of such cessation of operation is valid, place the Plant on
      standby.  For such period, the Corporation shall pay to the
      Contractor for each day of standby, the Contractor's per diem fixed
      capital recovery and interest charge, and the Contractor's current per
      diem labor charge element and associated general & administrative
      charge element per KIG at the production rate in Imperial Gallons per day
      stated in Appendix A.  In the event that the Corporation
      notifies the Contractor that the period of Plant shutdown will be in
      excess of 30 days, the Contractor shall take cost reduction measures as it
      deems appropriate and the Corporation will reduce compensation to 55
      percent of the subtotal of fixed costs, excluding fixed charges-capital
      repayment, as stated in Appendix A and escalated to the current rates
      per Appendix B.

            

    

     

    The
Corporation shall afford the Contractor at least 10 business days written notice
of such request for cessation of operation.  If the period of
cessation exceeds 90 days, operation of the Plant shall resume within five (5)
days of the Corporation's written notice to resume operation.  In the
case of production of the Total Desalinated Water Delivery Amount being the
limiting factor for the duration of the Desalinated Water Delivery Period, the
Total Desalinated Water Delivery Amount shall remain unchanged, and in the case
of 20 years being the limiting factor for the duration of the Desalinated Water
Delivery Period, the total duration of the periods of such cessation of
operation shall be added to the 20 years.  In the event that the
duration of this Agreement is extended as a result of the Plant being placed on
standby, the Corporation shall pay the capital repayment element of the
Desalinated Water Sale Price per KIG up to a maximum aggregate amount equal to
twenty (20) times the capital repayment - annual cost as stated in
Appendix A and adjusted in accordance with Appendix B.  Once
this aggregate amount has been paid, the capital repayment element will be
eliminated from the Desalinated Water Sale Price per KIG of Desalinated Water
delivered.

     

    The
maximum allowed total of the periods of cessation of operation shall be one
hundred eighty (180) days.

     

    
      	
              42. 

            	
              DEFAULT
      AND TERMINATION

            

    

     

    
      	
               
      

            	
              42.1

            	
              If
      either the Contractor or the Corporation is placed in provisional or final
      liquidation or under judicial management other than for purposes of a
      scheme of reconstruction or amalgamation, the other party shall be
      entitled without prejudice to any other rights or remedies available at
      law or in equity to terminate this Agreement.  This shall be
      achieved by giving notices in writing that this Agreement will be canceled
      unless such situation is remedied within 30
  days.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        35

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              42.2

            	
              If
      either party defaults under this Agreement, then the non-defaulting party
      shall give the defaulting party written notice describing such
      default.  For all defaults the defaulting party shall be given
      30 days from the receipt of such notice to cure such
      default.  However, if the default cannot be cured within 30
      days, with the exercise of reasonable diligence, the non-defaulting party
      may grant a reasonable additional period of time in which to cure such
      default.  If the defaulting party fails to cure such default
      within the prescribed period, then, in addition to any other rights or
      remedies available at law or in equity, the non-defaulting party may
      consider the defaulting party in material breach of its obligations under
      this Agreement and immediately terminate the
  Agreement.

            

    

     

    
      	
               
      

            	
              42.3

            	
              In
      the event that the Contractor is unable for reasons within its
      responsibilities under this Agreement, or unwilling, to deliver
      Satisfactory Desalinated Water to the Corporation for a period exceeding
      60 consecutive days, then the Contractor shall be considered in default of
      its obligations under this Agreement (except only in the case of Force
      Majeure applying to the
Contractor).

            

    

     

    In
addition, if the Contractor fails to meet the Guaranteed Water Quantity for 90
days total in any period of 183 consecutive days, the Contractor shall be
considered in default of its obligations under this Agreement.

     

    
      	
               
      

            	
              42.4

            	
              In
      the event that the Corporation terminates this Agreement as a result of
      the Contractor defaulting prior to Substantial Completion of the
      construction of the Plant, the Corporation may retain or draw upon all of
      the security provided in the Construction Performance Security, referred
      to herein, to offset damages the Corporation incurs or reasonably expects
      to incur as a result of the Contractor's
  default.

            

    

     

    
      	
               
      

            	
              42.5

            	
              In
      the event the Corporation terminates this Agreement after Substantial
      Completion of construction of the Plant, i.e. during the Desalinated Water
      Delivery Period, as a result of the Contractor defaulting, the Corporation
      in addition to any other rights or remedies available at law, in equity or
      stipulated in this Agreement, may retain or draw upon all of the current
      Performance and Operations Security, referred to herein, and upon payment
      of then current Plant buyout purchase price described in Schedule C hereto
      at the time of termination along with any outstanding amounts due to the
      Contractor with regard to the Desalinated Water produced and delivered to
      the Corporation, and fuel, chemicals, materials, spare parts and specific
      spare items inventory less any amounts owed by the Contractor to the
      Corporation, may take title to the Plant and its assets including but not
      limited to stored Desalinated Water, fuel, chemicals, materials, spare
      parts and specific spare items
inventory.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              42.6

            	
              In
      the event that this Agreement is terminated by the Contractor before
      Substantial Completion of the construction of the Plant due to the
      Corporation's default, or due to the order of the Government of The
      Bahamas the Contractor will be entitled to all expenses for the
      construction of the Plant arising before the date of termination, for all
      reasonable and unavoidable expenses incurred before and after the date of
      termination, and for any loss of profits on such expenses provided that
      such loss of profits can be proven.  The said expenses and loss
      of profits shall be duly proved and supported by
      documentation.  After payment of the above expenses and loss of
      profits by the Corporation to the Contractor, the Plant as it is
      constructed, materials and all interest in the site shall be transferred
      to the Corporation upon payment by the Corporation of one Bahamian
      dollar.

            

    

     

    
      	
               
      

            	
              42.7

            	
              In
      the event that this Agreement is terminated by the Contractor after
      Substantial Completion of construction of the Plant (i.e. during the
      Desalinated Water Delivery Period) due to default by the Corporation, or
      due to order of the Government of The Bahamas, then the Contractor will be
      entitled to payment of then current Plant buyout purchase price described
      in Schedule C hereto at the time of termination along with any outstanding
      amounts due to the Contractor with regard to the desalinated water
      produced and delivered to the Corporation, and fuel, chemicals, materials,
      spare parts and specific spare items inventory less any amounts owed by
      the Contractor to the Corporation.

            

    

     

    After
payment of the above amount by the Corporation, the Plant as it is constructed
and equipped and all other beneficial interests to the Corporation in the Plant
and its Site, including movable and immovable property, shall be transferred to
and become the sole property of the Corporation

     

    
      	
               
      

            	
              42.8

            	
              The
      Contractor shall co-operate with the Corporation, in regard to the
      foregoing, as the Corporation exercises its rights under this
      Clause 42, by:

            

    

     

    
      	
               
      

            	
              a.

            	
              providing
      to the Corporation all documentation necessary, relevant and
      appropriate;

            

    

     

    
      	
               
      

            	
              b.

            	
              executing
      all documents necessary, relevant and appropriate to the transfer of title
      in the Plant to the Corporation;

            

    

     

    
      	
               
      

            	
              c.

            	
              providing
      the Corporation with good and marketable title to the Plant free of all
      liens and encumbrances; and

            

    

     

    
      	
               
      

            	
              d.

            	
              leaving
      the Plant in good operating
condition.

            

    

     

    
      	
              43. 

            	
              CONTRACTOR'S
      REPRESENTATIONS

            

    

     

    
      	
               
      

            	
              43.1

            	
              In
      the context of this Agreement, the Contractor makes the following
      representations:

            

    

     

    
      	
               
      

            	
              i.

            	
              The
      Contractor has familiarized itself with the full nature and extent of the
      documents pertaining to this Agreement, the work, the Site and all local
      conditions, laws and regulations that in any manner affects the cost,
      progress, performance and furnishing of the
  Work.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        37

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              ii.

            	
              The
      Contractor acknowledges that the Corporation has only afforded typical
      feedwater analysis, hydraulic, hydrogeological and geological data and
      information for the Island of New Providence, and that the Contractor will
      conduct his own specific Site investigation in these
      matters.  The finding, of the Contractor's investigations will
      determine the precise nature, sizing, complement and extent of the Plant
      as to be built and equipped by the Contractor, at the Contractor's expense
      and at no increase in capital cost or the Desalinated Water Sale Price per
      KIG and/or with no increase in the consumption rates or guarantee figures
      as stated on the Plant Performance Guarantees.  Specifically,
      the Contractor stipulates that all the equipment required to meet the
      Performance Guarantees given by the Contractor will be included with no
      increase in Plant capital cost or in the Desalinated Water Sale Price per
      KIG versus the amounts stated in Appendix A as adjusted by
      Appendix B.

            

    

     

    
      	
               
      

            	
              iii.

            	
              The
      Contractor has given the Corporation notice of all conflicts, errors or
      discrepancies that it has discovered in the Bidding and Contract
      Documents, and the written resolution thereof by the Corporation is
      acceptable to the Contractor.

            

    

     

    
      	
              44. 

            	
              CONTRACT
      DOCUMENTS

            

    

     

    
      	
               
      

            	
              44.1

            	
              The
      Contract Documents (the "Contract Documents") which comprise the entire
      contract between the Corporation and the Contractor concerning the Work
      consist of the following:

            

    

     

    
      	
               
      

            	
              1.

            	
              this
      Agreement.

            

    

    
      	
               
      

            	
              2.

            	
              Appendix
      A - Contract Water Sale Price of Desalinated
  Water

            

    

    
      	
               
      

            	
              3.

            	
              Appendix
      B - Annual Price Adjustment

            

    

    
      	
               
      

            	
              4.

            	
              Appendix
      C - Plant Buyout Purchase Price
Schedule

            

    

    
      	
               
      

            	
              5.

            	
              Appendix
      D - Securities (as per Article 17 of this
  Agreement)

            

    

    
      	
               
      

            	
              6.

            	
              Appendix
      E - Submittals During Construction

            

    

    
      	
               
      

            	
              7.

            	
              Appendix
      F - The Specifications

            

    

    
      	
               
      

            	
              8.

            	
              The
      Tender Documents and addenda (not
attached)

            

    

    
      	
               
      

            	
              9.

            	
              Letter
      of Acceptance and the Bid

            

    

    
      	
               
      

            	
              10.

            	
              Correspondence
      between the Corporation and the Contractor prior to issue of the Letter of
      Acceptance, list as follows:

            

    

    

    
      	
               
      

            	
              a.

            	
              Letter
      from Contractor to Corporation dated July 6,
  2004

            

    

    
      	
               
      

            	
              b.

            	
              Letter
      from Contractor to Corporation dated July 7,
  2004

            

    

    
      	
               
      

            	
              c.

            	
              Letter
      from Contractor to Hon. Minister of Works and Utilities dated
      October 1, 2004

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        38

        
          

        

      

      
        
        

      

    

     

    
      	
              45. 

            	
              ENTIRE
      AGREEMENT, BINDING EFFECT AND
MODIFICATION

            

    

     

    
      	
               
      

            	
              45.1

            	
              The
      Contract Documents shall be binding upon the parties and their respective
      successors and assigns and may be amended or modified only by further
      writing signed by both parties.  The Contract Documents set
      forth the entire agreement of the parties with respect to the subject
      matter hereof and supersede any prior agreements and understandings
      whether oral or written relating to the subject matter
    hereof.

            

    

     

    
      	
              46. 

            	
              GOVERNING
      LAWS AND ARBITRATION

            

    

     

    
      	
               
      

            	
              46.1

            	
              The
      Contract Documents and their implementation shall be construed under and
      governed by the laws of the Commonwealth of The
  Bahamas.

            

    

     

    
      	
               
      

            	
              46.2

            	
              The
      settlement of disputes not amicably resolved between the Corporation and
      the Contractor shall be settled by the courts of the Commonwealth of The
      Bahamas.

            

    

     

    
      	
              47.

            	
              TRANSFER AND
      ASSIGNMENT

            

    

     

    
      	
               
      

            	
              47.1

            	
              This
      Agreement may only be transferred or assigned if and when the present
      parties agree to the same in writing provided that the Corporation hereby
      consents to the immediate transfer by Consolidated Water Co. Ltd. of its
      rights and obligations under this Agreement, the Letter of Acceptance and
      the Bid to Waterfields Company Limited upon the execution
      hereof.

            

    

     

    
      	
              48. 

            	
              NOTICE

            

    

     

    
      	
               
      

            	
              48.1

            	
              Any
      written notice required or permitted under the terms of this Agreement
      shall be sent by certified or registered mail, by Facsimile, or email to
      the following addresses:

            

    

    

    
      
        
          
            
              
                
                  	
                          THE CORPORATION

                        	 	
                          THE CONTRACTOR

                        
	 
      	 	 
      
	
                          General
      Manager

                        	 	
                          The
      General Manager

                        
	
                          Water
      and Sewerage Corporation

                        	 	
                          Waterfields
      Company Limited

                        
	
                          87
      Thompson Boulevard

                        	 	
                          Windsor
      Fields

                        
	
                          P.O.
      Box N-3905

                        	 	
                          P.O.
      Box N-54030

                        
	
                          Nassau,
      Bahamas

                        	 	
                          Nassau,
      New Providence, Bahamas

                        
	
                          Facsimile
      No.:  242-322-5080

                        	 	
                          Facsimile
      No:  242-377-3459

                        
	
                          Telephone
      No.:  242-302-5509

                        	 	
                          Telephone
      No:  242-377-3451

                        
	 
      	 	 
      
	 
      	 	
                                                  
      and

                        
	 
      	 	 
      
	 
      	 	
                          Consolidated
      Water Co. Ltd.

                        
	 
      	 	
                          P.
      O. Box 1114GT

                        
	 
      	 	
                          Grand
      Cayman, Cayman Islands

                        
	 
      	 	
                          British
      West Indies

                        
	 
      	 	
                          Facsimile
      No:  345-949-2957

                        
	 
      	 	
                          Telephone
      No:  345-945-4277

                        

                

              

            

          

        

      

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        39

        
          

        

      

      
        
        

      

    

     

    Or such
other party address, facsimile number, or email address as the parties may
designate from time to time by written notice to each other.  Notice
shall be deemed received eight (8) business days following the date post-marked
in the event of mailing, in the Bahamas, or upon the first business day
following transmission by facsimile.

     

    
      	
              49. 

            	
              SIGNATURES
      AND SEALS

            

    

     

    In
witness hereof the parties hereto have caused this Agreement to be executed the
day and year first before witness in accordance with their respective
laws.

     

    THE
COMMON SEAL of

     

    WATERFIELDS
COMPANY LIMITED

     

    was
hereunto affixed by:

     

    
      
        
          
            	/s/
      Frederick W. McTaggart	
                     (Signature)

                  

          

        

      

    

    Frederick
W. McTaggart

    Secretary
and a Director of Waterfields Company Limited

    

    in the
presence of

    

    
      
        
          
            
              
                
                  
                    	/s/
      Gerrard Pereira	 
	
                            (Witness) (Signature)

                          	 

                  

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        40

        
          

        

      

      
         

      

    

    

    THE
COMMON SEAL of

     

    CONSOLIDATED
WATER CO. LTD.

     

    was
hereunto affixed by:

     

    
      
        
          
            	/s/
      Frederick W. McTaggart	
                     (Signature)

                  

          

        

      

    

    Frederick
W. McTaggart

    President,
CEO and a Director of Consolidated Water Co. Ltd.

    

    in the
presence of

    

    
      
        
          
            	/s/
      Gerrard Pereira	 
      
	
                    (Witness)
      (Signature)

                  	 
      

          

        

      

    

    

    THE
COMMON SEAL of

     

    WATER
AND SEWERAGE CORPORATION

     

    was
hereunto affixed by:

     

    
      
        
          
            	/s/
      Donald P. Demerite	
                     (Signature)

                  

          

        

      

    

    Donald
P. Demeritte

    

    the Chairman

    and

    

    
      
        
          
            	/s/
      Robert P. Wells	
                     (Signature)

                  

          

        

      

    

    Robert
P. Wells

    

    The Deputy Chairman of the
said

    

    WATER
AND SEWERAGE CORPORATION

    

    in the
presence of

    

    
      
        
          
            	/s/
      illegible	
                     (Witness
      Signature)

                  

          

        

      

    

     

    
      
        CONFIDENTIAL

         

      

      
        41

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    APPENDIX
A

     

    
      
        
          	
                  TABLE
      6-1A

                  BID
      PRICE FOR DESALINATED WATER

                  Guaranteed
      NRW Reduction Option

                
	
                  Plant
      Production Rate, IGPD

                	
                  4,000,000

                	
                  Availability
      Factor

                	
                  1.0000

                
	
                  Annual
      Prod. kgal/yr

                	
                  1,460,000

                	
                  Annual
      Interest Rate

                	
                  *****

                
	
                  Plant
      Capital Cost

                	
                  *****

                	
                  Number
      of Years

                	
                  20

                
	
                  Production
      Costs (Annual)

                  FIXED
      COSTS

                	
                  Annual
      Cost

                	
                  B$/kigal

                  Total

                
	 
      	 
      	 
      
	
                  Fixed
      Charges - Capital Repayment

                	
                  *****

                	
                  *****

                
	
                  General
      & Administrative (Note 1)

                	
                  *****

                	
                  *****

                
	
                  Operation
      & Maintenance Labor

                	
                  *****

                	
                  *****

                
	
                  Overhead
      & Profit on Labor

                	
                  *****

                	
                  *****

                
	
                  SUBTOTAL
      FIXED COSTS

                	
                  *****

                	
                  *****

                
	
                  Note
      1: includes allowance for bonding and insurance

                	 
      	 
      
	
                  CONSUMABLES

                	 
      	 
      	 
      
	
                  B$/US
      gal

                	
                  US
      gal/klgal

                
	
                  Diesel
      Fuel

                	
                  1.094

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Chemicals

                	
                  B$/lb

                	
                  lb/klgal

                	 
      
	
                  Flocon

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Gaseous
      Chlorine

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Caustic
      Soda

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Calcite

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Carbon
      Dioxide

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Cleaning
      Chem

                  (low
      & hi pH)

                	
                  *****

                	
                  *****

                	
                  *****

                	
                  *****

                
	
                  Spare
      Parts

                	
                  *****

                	
                  *****

                
	
                  Replacement
      Membranes

                	
                  *****

                	
                  *****

                
	
                  Cartridge
      Filters & Misc Consumables

                	
                  *****

                	
                  *****

                
	
                  Other

                	
                  *****

                	
                  *****

                
	
                  Subtotal
      Consumables-less Profit

                	
                  *****

                	
                  *****

                
	
                  Overhead
      & Profit on Consumables

                	
                  *****

                	
                  *****

                
	
                  SUBTOTAL
      CONSUMABLES

                	
                  *****

                	
                  *****

                
	
                  TOTAL
      BID PRICE:

                	
                  *****

                	
                  *****

                

        

      

    

    
      

        
          
            CONFIDENTIAL

             

          

          
            42

            
              

            

          

          
             

          

        

      

    

    
      
        
          
            
              
                
                  
                    	
                            Portions
      of this document have been omitted

                            pursuant
      to a request for confidential treatment.  The

                            omitted
      portions are marked ***** and have been

                            filed
      separately with the Commission.

                             

                          
	
                            TABLE
      6-1B

                            BID
      PRICE FOR DESALINATED WATER

                            Guaranteed
      NRW Reduction Option

                          	 
      
	
                            Plant
      Production Rate, IGPD

                          	
                            5,000,000

                          	
                            Availability
      Factor

                          	
                            1.0000

                          	 
      
	
                            Annual
      Prod. kgal/yr

                          	
                            1,825,000

                          	
                            Annual
      Interest Rate

                          	
                            *****

                          	 
      
	
                            Plant
      Capital Cost

                          	
                            *****

                          	
                            Number
      of Years

                          	
                            20

                          	 
      
	
                            Production
      Costs
(Annual) FIXED COSTS

                          	
                            Annual
      Cost

                          	
                            B$/kigal

                            Total

                          	 
      
	 
      	 
      	 
      	 
      
	
                            Fixed
      Charges - Capital Repayment

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            General
      & Administrative (Note 1)

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Operation
      & Maintenance Labor

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Overhead
      & Profit on Labor

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            SUSTOTAL
      FIXED COSTS

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Note
      1: includes allowance for bonding and insurance

                          	 
      	 
      	 
      
	
                            CONSUMABLES

                          	 
      	 
      	 
      	 
      	 
      
	
                            B$/US
      gal

                          	
                            US
      gal/klgal

                          	 
      
	
                            Diesel
      Fuel

                          	
                            1.094

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Chemicals

                          	
                            B$/lb

                          	
                            lb/klgal

                          	 
      	 
      	 
      
	
                            Flocon

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Gaseous
      Chlorine

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Caustic
      Soda

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Calcite

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Carbon
      Dioxide

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Cleaning
      Chem

                            (low
      & hi pH)

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Spare
      Parts

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Replacement
      Membranes

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Cartridge
      Filters & Misc Consumables

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Other

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Subtotal
      Consumables-less Profit

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Overhead
      & Profit on Consumables

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            SUBTOTAL
      CONSUMABLES

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            TOTAL
      BID PRICE:

                          	
                            *****

                          	
                            *****

                          	 
      

                  

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        43

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                
                  	
                          Portions
      of this document have been omitted

                          pursuant
      to a request for confidential treatment.  The

                          omitted
      portions are marked ***** and have been

                          filed
      separately with the Commission.

                           

                        
	
                          TABLE
      6-2A

                          COMMERCIAL
      BID EVALUATION FORM

                          Guaranteed
      NRW Reduction Option

                        	 
      
	
                          Plant
      Production Rate, IGPD

                        	
                          4,000,000

                        	
                          Availability
      Factor

                        	
                          1.0000

                        	 
      
	
                          Annual
      Prod. kgal/yr

                        	
                          1,460,000

                        	
                          Annual
      Interest Rate

                        	
                          *****

                        	 
      
	
                          Plant
      Capital Cost

                        	
                          *****

                        	
                          Number
      of Years

                        	
                          20

                        	 
      
	
                          Production
      Costs
(Annual) FIXED COSTS

                        	
                          Annual
      Cost

                        	
                          B$/kigal

                          Total

                        	 
      
	 
      	 
      	 
      	 
      
	
                          Fixed
      Charges - Capital Repayment

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          General
      & Administrative (Note 1)

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Operation
      & Maintenance Labor

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Overhead
      & Profit on Labor

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          SUSTOTAL
      FIXED COSTS

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Note
      1: includes allowance for bonding and insurance

                        	 
      	 
      	 
      
	
                          CONSUMABLES

                        	
                          B$/US
      gal

                        	
                          US
      gal/klgal

                        	 
      	 
      	 
      
	
                          Diesel
      Fuel

                        	
                          1.094

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Electricity

                        	
                          B$/kwh

                        	
                          kwh/klgal

                        	 
      	 
      	 
      
	
                          Power
      Consumption

                        	
                          0.1285

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	 
      	
                          B$/kVA/yr

                        	
                          Max.
      kVA

                        	 
      	 
      	 
      
	
                          Demand
      Charge

                        	
                          123.96

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Chemicals

                        	
                          B$/lb

                        	
                          lb/klgal

                        	 
      	 
      	 
      
	
                          Flocon

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Gaseous
      Chlorine

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Caustic
      Soda

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Calcite

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Carbon
      Dioxide

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Cleaning
      Chem

                          (low
      & hi pH)

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Spare
      Parts

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Replacement
      Membranes

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Cartridge
      Filters & Misc Consumables

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Other
      (Standby Diesel Generator Lube & Parts)

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Subtotal
      Consumables-less Profit

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          Overhead
      & Profit on Consumables

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          SUBTOTAL
      CONSUMABLES

                        	
                          *****

                        	
                          *****

                        	 
      
	
                          TOTAL
      BID PRICE:

                        	
                          *****

                        	
                          *****

                        	 
      

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        44

        
          

        

      

      
         

      

    

    
      
        
          
            
              
                
                  
                    	
                            Portions
      of this document have been omitted

                            pursuant
      to a request for confidential treatment.  The

                            omitted
      portions are marked ***** and have been

                            filed
      separately with the Commission.

                             

                          
	
                            TABLE
      6-2B

                            COMMERCIAL
      BID EVALUATION FORM

                            Guaranteed
      NRW Reduction Option

                          	 
      
	
                            Plant
      Production Rate, IGPD

                          	
                            5,000,000

                          	
                            Availability
      Factor

                          	
                            1.0000

                          	 
      
	
                            Annual
      Prod. kgal/yr

                          	
                            1,825,000

                          	
                            Annual
      Interest Rate

                          	
                            *****

                          	 
      
	
                            Plant
      Capital Cost

                          	
                            *****

                          	
                            Number
      of Years

                          	
                            20

                          	 
      
	
                            Production
      Costs (Annual)

                            FIXED
      COSTS

                          	
                            Annual
      Cost

                          	
                            B$/kigal

                            Total

                          	 
      
	 
      	 
      	 
      
	
                            Fixed
      Charges - Capital Repayment

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            General
      & Administrative (Note 1)

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Operation
      & Maintenance Labor

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Overhead
      & Profit on Labor

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            SUSTOTAL
      FIXED COSTS

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Note
      1: includes allowance for bonding and insurance

                          	 
      	 
      	 
      
	
                            CONSUMABLES

                          	
                            B$/US
      gal

                          	
                            US
      gal/klgal

                          	 
      	 
      	 
      
	
                            Diesel
      Fuel

                          	
                            1.094

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Electricity

                          	
                            B$/kwh

                          	
                            kwh/klgal

                          	 
      	 
      	 
      
	
                            Power
      Consumption

                          	
                            0.1285

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	 
      	
                            B$/kVA/yr

                          	
                            Max.
      kVA

                          	 
      	 
      	 
      
	
                            Demand
      Charge

                          	
                            123.96

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Chemicals

                          	
                            B$/lb

                          	
                            lb/klgal

                          	 
      	 
      	 
      
	
                            Flocon

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Gaseous
      Chlorine

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Caustic
      Soda

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Calcite

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Carbon
      Dioxide

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Cleaning
      Chem (low & hi pH)

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Spare
      Parts

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Replacement
      Membranes

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Cartridge
      Filters & Misc Consumables

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Other
      (Standby Diesel Generator Lube & Parts)

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Subtotal
      Consumables-less Profit

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            Overhead
      & Profit on Consumables

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            SUBTOTAL
      CONSUMABLES

                          	
                            *****

                          	
                            *****

                          	 
      
	
                            TOTAL
      BID PRICE:

                          	
                            *****

                          	
                            *****

                          	 
      

                  

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        45

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    APPENDIX
B

    

    ANNUAL
PRICE ADJUSTMENT

    ESCALATION
CALCULATION

    

    Referring
to the "Annual Price Adjustment" form attached:

    

    Fixed
Costs:

    

    
      	
              1.

            	
              The
      fixed charges including capital repayment and the associated interest
      shall remain fixed with no escalation throughout the term of this
      Agreement.

            

    

     

    
      	
              2.

            	
              General
      and administrative costs including insurance and bonding shall be
      escalated on the third anniversary of Substantial Completion and on every
      subsequent anniversary during the term of this Agreement, in accordance
      with the International Monetary Fund Consumer Price Index ("CPI") for The
      Bahamas. The original price contained in the Bid for general and
      administrative costs will be adjusted by the ratio of the current CPI to
      the CPI on the second anniversary of Substantial
    Completion.

            

    

     

    
      	
              3.

            	
              Operation
      & Maintenance Labor shall be escalated on the third anniversary of
      Substantial Completion and on every subsequent anniversary during the term
      of this Agreement, based on the International Monetary Fund Consumer Price
      Index for The Bahamas.  The original price contained in the Bid
      for operation & maintenance labor will be adjusted by the ratio of the
      current CPI to the CPI on the second anniversary of Substantial
      Completion.

            

    

     

    
      	
              4.

            	
              Overhead
      and profit on labor ("OHPL") shall be escalated by the Consumer Price
      Index ("CPI") for the Bahamas as described in 2 & 3
    above.

            

    

     

    Consumables:

    

    
      	
              5.

            	
              Fuel
      oil: The Contractor will be required to purchase fuel oil under long term
      contract.  The formula to be used in Appendix B for fuel oil
      price adjustment will be based on the terms of the current approved fuel
      oil supply contract.  Price adjustments will be made at
      intervals which are determined by the terms of the fuel oil supply
      contract and may occur on a more frequent basis than the annual escalation
      interval specified for other consumables.  Since the fuel oil
      supply contracts will be competitively bid at regular intervals, price
      variations due to escalation will be reflected in the prices contained in
      the Bid and the terms set out in the Contract Documents and no further
      escalation calculation is required.

            

    

     

    
      
        CONFIDENTIAL

        
        

      

      
        46

        
          

        

      

      
        
        

      

    

     

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

     

    
      
        	
                6.

              	
                Chemical
      prices shall be escalated * * * * * during the term of this Agreement,
      based on the Industrial Chemical Index ("ICI") from the US Department of
      Commerce Producer Price Index.  The original price for chemicals
      contained in the Bid will be adjusted by the ratio of * * * *
      *.  Chemical prices shall also be adjusted to account for
      changes in the rate of stamp tax, if any, as applied to the escalated
      chemical prices multiplied by the current exchange rate of Bahamian
      Dollars to US Dollars at the prevailing rate of the Central Bank of The
      Bahamas 30 days prior to commencement of the new year of operations on the
      Desalinated Water Delivery Period annual anniversary
  date.

              

      

    

     

    
      	
              7.

            	
              The
      price for spare parts & equipment consumables shall include spare
      parts, replacement membranes, cartridge filters & miscellaneous
      consumables, etc.  The price for spare parts &
      equipment consumables shall be escalated * * * * * the term of this
      Agreement, based on the Construction Cost Index for Plant ("CCI")
      published by the US Department of Commerce.  The original price
      contained in the Bid for spare parts & equipment consumables will be
      adjusted by the ratio of * * * * *.  The spare parts &
      equipment consumables price shall also be adjusted to account for changes
      in the rate of stamp tax, if any, as applied to the escalated spare parts
      & equipment consumables prices multiplied by the prevailing exchange
      rate as described in 6 above.

            

    

     

    
      	
              8.

            	
              Overhead
      and profit on consumables shall be escalated on an annual
      basis.  Overhead and profit on consumables shall always remain
      at the same ratio to the subtotal of consumables less profit as the prices
      contained in the Bid.

            

    

    
      
        CONFIDENTIAL

         

      

      
        47

        
          

        

      

      
         

      

    

    APPENDIX
B

    

    ANNUAL
PRICE ADJUSTMENT

    

    
      
        
          
            
              	
                      PRODUCTION
      COSTS (ANNUAL)

                    	
                      FORMULA
      FOR ADJUSTMENT

                    	
                      ADJUSTED
      CONTRACT PRICE
($/kigal)

                    
	
                      FIXED
      COSTS

                    	 
      	 
      
	
                      Fixed
      Charges - Capital Repayment

                    	
                      No
      annual adjustment required

                    	 
      
	
                      General
      & Administrative

                    	
                      G&An=(CPIc/CPIs)*(G&Ao)

                    	 
      
	
                      Operation
      & Maintenance Labor

                    	
                      O&MLn=(CPIc/CPIs)*(O&MLo)

                    	 
      
	
                      Overhead
      & Profit on Labor

                    	
                      OHPLn=(CPIc/CPIs)*(OHPLo)

                    	 
      
	
                      SUBTOTAL
      FIXED COSTS

                    	 
      	 
      
	
                      CONSUMABLES

                    	 
      	 
      
	 
      
	
                      Fuel
      oil

                    	
                      In
      accordance with the terms of the approved fuel oil supply agreement
      pursuant to Clause 6.6.

                    	 
      
	
                      Chemicals

                    	
                      CHEMn=(STc/STo)*(XRc)*(ICIc/ICIs)*(CHEMo)

                    	 
      
	
                      Spare
      Parts & Equipment Consumables

                    	
                      SPCEn=
      (STc/STo)*(XRc)*(CCIc/CCIs)*(SPECo)

                    	 
      
	
                      SUBTOTAL
      CONSUMABLES-LESS PROFIT

                    	 
      	 
      
	
                      Overhead
      & Profit on Consumables

                    	
                      OHPCn=[(CHEMn+SPCEn)/(CHEMo+SPECo)]*(OHPCo)

                    	 
      
	
                      SUBTOTAL
      CONSUMABLES

                    	 
      	 
      
	
                      TOTAL
      PRICE FOR THE NEW CONTRACT YEAR

                    	 
      	 
      

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        48

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    

    Where:

    
      	
              G&A 

            	
              =           General
      & Administrative Costs

            

    

    
      	
              CPI 

            	
              =           International
      Monetary Fund Consumer Price Index for the
  Bahamas

            

    

    
      	
              O&ML 

            	
              =          O&M
      Labor Cost

            

    

    
      	
              OHPL 

            	
              =           Overhead
      & Profit on Labor

            

    

    
      	
              ST 

            	
              =           Stamp
      Tax (percent)(i.e. STo=7.0%=.07)

            

    

    
      	
              CHEM 

            	
              =           Chemical
      Cost per 1000 igal

            

    

    
      	
              XRc 

            	
              =           Current
      exchange rate $B/$US at time of annual escalation
    calculation

            

    

    
      	
              ICI 

            	
              =           Industrial
      Chemical Index - US Dept Commerce Producer Price
  Index

            

    

    
      	
              SPCE 

            	
              =           Spare
      Parts and Equipment Consumables Cost per 1000
  igal

            

    

    
      	
              CCI 

            	
              =           Construction
      Cost Index for Plant - US Dept of
Commerce

            

    

    
      	
              OHPC 

            	
              =           Overhead
      & Profit on Consumables

            

    

    
      	
              c 

            	
              =           tax
      rate or index on the last anniversary of Substantial
      Completion

            

    

    
      	
              o 

            	
              =           tax
      rate or price contained in the Bid

            

    

    
      	
              s 

            	
              =           index
      on the * * * * *

            

    

    
      	
              n 

            	
              =           index
      or price for the new operating
year

            

    

    
      
        CONFIDENTIAL

         

      

      
        49

        
          

        

      

      
         

      

    

    Portions
of this document have been omitted

    pursuant
to a request for confidential treatment.  The

    omitted
portions are marked ***** and have been

    filed
separately with the Commission.

    APPENDIX
C

    

    
      
        
          
            	
                    BUYOUT
      PURCHASE PRICE

                  
	
                    END
      OF WATER DELIVERY PERIOD *:

                  	
                    BUYOUT
      PURCHASE PRICE

                  
	
                    Year
      1

                  	
                    * *
      * * *

                  
	
                    Year
      2

                  	
                    * *
      * * *

                  
	
                    Year
      3

                  	
                    * *
      * * *

                  
	
                    Year
      4

                  	
                    * *
      * * *

                  
	
                    Year
      5

                  	
                    * *
      * * *

                  
	
                    Year
      6

                  	
                    * *
      * * *

                  
	
                    Year
      7

                  	
                    * *
      * * *

                  
	
                    Year
      8

                  	
                    * *
      * * *

                  
	
                    Year
      9

                  	
                    * *
      * * *

                  
	
                    Year
      10

                  	
                    * *
      * * *

                  
	
                    Year
      11

                  	
                    * *
      * * *

                  
	
                    Year
      12

                  	
                    * *
      * * *

                  
	
                    Year
      13

                  	
                    * *
      * * *

                  
	
                    Year
      14

                  	
                    * *
      * * *

                  
	
                    Year
      15

                  	
                    * *
      * * *

                  
	
                    Year
      16

                  	
                    * *
      * * *

                  
	
                    Year
      17

                  	
                    * *
      * * *

                  
	
                    Year
      18

                  	
                    * *
      * * *

                  
	
                    Year
      19

                  	
                    * *
      * * *

                  
	
                    Year
      20

                  	
                    * *
      * * *

                  

          

        

      

    

    

    Formula
used:

              

    pv +
CUMPRINC (rate,nper,pv,start_period,end_period,type)

               

    where,

              

    pv =
Capital Cost

          

    CUMPRINC
= Excel function to return the cumulative principal paid on a loan between two
periods

     

    rate = monthly interest rate =
1.000%

    nper=
total number of periods = 180

    

    start_period
= 1

    end_period
= end period = completed years times 12 months

    type = 0,
which means payment is at the end of each period

    
      
        CONFIDENTIAL

         

      

      
        50

        
          

        

      

      
         

      

    

    APPENDIX
D

    

    SECURITIES

    

    The
following pages contain example security forms, as discussed in Clause
17.

    
      
        CONFIDENTIAL

         

      

      
        51

        
          

        

      

      
         

      

    

    FORM
OF OPERATIONS PERFORMANCE BANK GUARANTEE

    

    
      
        	
                To:

              	 
      
	 
      	
                [name
      of Employer]

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                [address
      of Employer]

              	 
      
	 
      	 
      	 
      
	
                WHEREAS

              	 
      
	 
      	
                [name and address of
      Contractor]

              
	 
      	 
      	 
      
	
                (hereinafter
      called "the Contractor") has undertaken, to execute

              	 
      
	 
      	 
      	 
      
	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      
	
                [name
      of Contract and brief description of Works]

              	 
      
	 
      	 
      	 
      
	
                (hereinafter
      called the "Contract");

              	 
      
	 
      	 
      	 
      
	
                AND
      WHEREAS it has been stipulated by you in the said Contract that the
      Contractor shall furnish you with a Bank Guarantee by a recognized bank
      for the sum specified herein as security for compliance with his
      obligation in accordance with the Contract;

              
	 
      	 
      	 
      
	
                AND
      WHEREAS we have agreed to give the Contractor such a Bank
      Guarantee;

              
	 
      	 
      	 
      
	
                NOW
      THEREFORE we hereby affirm that we are the Guarantor and responsible to
      you, on behalf of the Contract, up to a total of

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                [amount
      of Guarantee and

              
	
                currency
      in which it is payable]

              	 
      
	 
      	 
      	 
      
	 
      	
                [in
      words], such sum being

              
	
                payable
      in the circumstances described in the Contract and in accordance with the
      terms hereof, and we undertake to pay you, upon your first written demand
      and without cavil or argument, any sum or sums within the limits of
      _______________________ [amount of Guarantee] as aforesaid without your
      needing to prove or to show grounds or reasons for your demand for the sum
      specified herein.

              

      

    

    

    We hereby
waive the necessity of your demanding the said debt from the Contractor before
presenting us with the demand.

     

    
      
        CONFIDENTIAL

        
        

      

      
        52

        
          

        

      

      
        
        

      

    

     

    We
further agree that no change or addition to or other modification of the terms
of the Contract or of the work to be performed thereunder or of any of the
Contract documents which may be made between you and the Contractor shall in any
way release us from any liability under this Guarantee, and we hereby waive
notice of any such change, addition or modification.

     

    The
guarantee shall be valid until [

     

    
      
        
          	
                  SIGNATURE
      AND SEAL OF THE GUARANTOR

                	 
      

        

      

       

      
        
          	
                  NAME
      OF THE BANK

                	 
      

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        53

        
          

        

      

      
         

      

    

    FORM
OF CONSTRUCTION PERFORMANCE BOND

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    BOND
      NO.

                                  	 
      	 
      	
                                    DATE
      BOND EXECUTED

                                  	 
      
	By this Bond we 	
                                     
      

                                  	 
      	 
      
	 
      	
                                    [name
      and address of Contractor]

                                  	 
      
	 
      	 
      	 
      
	
                                    as
      Principal (hereinafter called "the Contractor") and

                                  	 
      
	 
      	
                                     [name,
      legal title and address of surety, bond company or insurance
      company]

                                  
	 
      	 
      
	
                                    as
      Surety (hereinafter called "the Surety"), are held and firmly bound unto
      THE WATER AND

                                  
	
                                    SEWERAGE
      CORPORATION as Obligee (hereinafter called "the
  Employer")

                                  
	in the amount of 	
                                     
      

                                  	 
      	
                                     [Amount
      of Bond]

                                  
	
                                    [in
      words], for the payment of which sum well and truly to be made in
      accordance with the provisions of the Contract (as defined hereafter) and
      the terms hereof , the Contractor and the Surety Bind themselves, their
      heirs, executors, administrators, successors and assigns, jointly and
      severally, firmly by these presents.

                                  
	 
      	
                                    WHEREAS
      the Contractor has entered into a written Agreement

                                  
	with
      the Employer dated 	 
      	
                                     day
      of

                                  	 
      
	
                                    2005
      for

                                  	 
      	
                                     [name
      of Contract] in accordance with the documents, plans,

                                  
	
                                    specifications
      and amendments referred to therein, which to the extent herein provided
      for, are by reference made part hereof and are referred to hereinafter to
      as the "Contract".

                                  
	
                                    1.

                                  	
                                    An
      amount is to be inserted by the Surety in the amount specified in clause
      17 of the Contract, and denominated either in the currency(ies) of the
      Contract or in a freely convertible currency acceptable to the
      Employer.

                                  
	
                                     NOW,
      THEREFORE, the condition of this obligation is such that, if the
      Contractor shall promptly and faithfully perform the said Contract
      (including any amendments thereto) then this obligation shall be null and
      void; otherwise it shall remain in full force and
      effect.  Whenever the Contractor is declared by the Employer to
      be, in material default under the Contract, the Surety shall
      promptly:

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
            
              
                	 
      	
                        (1)

                      	
                        complete
      the Contract in accordance with its terms and conditions;
    or

                      
	 	 	 
	 
      	
                        (2)

                      	
                        obtain
      a bid or bids from qualified Bidders for submission to the Employer for
      completing the Contract in accordance with its terms and conditions, upon
      determination by the Employer and the Surety of the lowest responsive
      bidder, arrange for the contract between such Bidder and Employer and make
      available as work progresses (even though there should be a default or a
      succession of defaults under the contract or contracts of completion
      arranged under this paragraph) sufficient funds to pay the cost of
      completion; but not exceeding, including other costs and damages for which
      the Surety may be liable hereunder, the amount set forth in the first
      paragraph hereof; or

                      
	 	 	 
	 
      	
                        (3)

                      	
                        pay
      the Employer the amount required by the Employer to complete the Contract
      in accordance with its terms and conditions up to a total not exceeding
      the amount of this
Bond.

                      

              

            

          

        

      

    

     

    
      
        CONFIDENTIAL

      

      
        54

        
          

        

      

      
        
        

      

    

     

    
      The
Surety shall not be liable for a greater sum than the specified amount of this
Bond.

         

      The
Surety hereby waives the necessity of the Employer demanding the said debt from
the Contractor before presenting the Surety with the demand.

        

      The
Surety further agrees that no change or addition to or other modification of the
terms of the Contact or of the work to be performed thereunder or of any of the
Contract documents which may be made between the Employer and the Contractor
shall in any way release the Surety from any liability under this guarantee, and
the Surety hereby waives notice of any such change, addition or
modification.

        

      Any suit
under this Bond must be instituted before the expiration of one year from the
date of Substantial Completion.

         

      No right
of action shall accrue on this Bond to or for the use of any person or
corporation other than the Employer named herein or the heirs, executors,
administrators, successors and assigns of the Employer.

        

      In
witness whereof, the Contractor and the Surety have caused these presents to be
sealed with their respective corporate seals.

    

        

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    On behalf of

                                  	 
      
	 
      	
                                    (Contractor - Corporation)

                                  
	 
      	 
      
	
                                    By

                                  	 
      
	 
      	 
      
	
                                    In the capacity of 

                                  	 
      
	 
      	 
      
	
                                    In the presence of

                                  	 
      
	 
      	 
      
	
                                    Signed on

                                  	 
      
	 
      	 
      
	 
      	 
      
	
                                    On behalf of

                                  	 
      
	 
      	
                                    (Guarantee/Sureties)

                                  
	 
      	 
      
	
                                    By

                                  	 
      
	 
      	 
      
	
                                    In the capacity of

                                  	 
      
	 
      	 
      
	
                                    In the presence of

                                  	 
      

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        55

        
          

        

      

      
         

      

    

    FORM
OF CONSTRUCTION PERFORMANCE BANK GUARANTEE

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      	
                                                                                              To:

                                                                                            	 
      
	 
      	
                                                                                              [name
      of Employer]

                                                                                            	 
      
	 
      	 
      	 
      
	 
      	 
      	
                                                                                               [address
      of Employer]

                                                                                            
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                                                              WHEREAS

                                                                                            	 	 	   
      
	 	 	 	[name
      and address of Contractor]
	 
      	 
      	 
      
	
                                                                                              (hereinafter
      called "the Contractor") has undertaken, in pursuance of Contract No.
      __________________

                                                                                            
	to
      execute	 	   
       	
                                                                                               [description
      of Contract and brief

                                                                                            
	
                                                                                              description
      of Works]

                                                                                            
	 
      	 
      	 
      
	
                                                                                              (hereinafter
      called the "Contract");

                                                                                            	 
      
	 
      	 
      	 
      
	
                                                                                              AND
      WHEREAS it has been stipulated by you in the said Contract that the
      Contractor shall furnish you with a Bank Guarantee by a recognized bank
      for the sum specified herein as security for compliance with his
      obligation in accordance with the Contract;

                                                                                            
	 
      	 
      	 
      
	
                                                                                              AND
      WHEREAS we have agreed to give the Contractor such a Bank
      Guarantee;

                                                                                            
	 
      	 
      	 
      
	
                                                                                              NOW
      THEREFORE we hereby affirm that we are the Guarantor and responsible to
      you, on behalf of the Contract, up to a total of

                                                                                            
	 
      	 
      	 
      
	 
      	
                                                                                               [amount
      of Guarantee]

                                                                                            
	 
      	 
      
	 
      	
                                                                                               [in
      words], such sum being

                                                                                            
	
                                                                                              payable
      in accordance with the provisions of the Contract (as defined hereafter)
      and the terms hereof, and we undertake to pay you, upon your first written
      demand and without cavil or argument, any sum or sums within the limits
      of  [amount of Guarantee] as aforesaid without your needing to
      prove or to show grounds or reasons for your demand for the sum specified
      herein.

                                                                                            
	 
      	 
      	 
      
	
                                                                                              We
      hereby waive the necessity of your demanding the said debt from the
      Contractor before presenting us with the demand.

                                                                                            
	 
      
	
                                                                                              We
      further agree that no change or addition to or other modification of the
      terms of the Contract or of the works to be performed thereunder or of any
      of the contract documents which may be made between you and the Contractor
      shall in any way release us from any liability under this Guarantee, and
      we hereby waive notice of any such change, addition or
      modification.

                                                                                            
	 
      
	
                                                                                              The
      guarantee shall be valid until the date of issue by
      [                                                                                                            ]
      of Substantial Completion.

                                                                                            
	 
      
	
                                                                                              SIGNATURE
      AND SEAL OF THE GUARANTOR

                                                                                            	 
      
	 
      	 
      
	
                                                                                              NAME OF BANK

                                                                                            	 	 	 
      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        56

        
          

        

      

      
         

      

    

    APPENDIX
E

    

    SUBMITTALS
DURING CONSTRUCTION

    

    As a
minimum, the following submittals shall be made during construction of the
Plant:

    

    ENVIRONMENTAL
IMPACT STATEMENT

     

    WELL
PUMPS

     

    FEEDWATER
AND EFFLUENT BOREHOLES

     

    FIRST
PASS RO SYSTEM

     

    HIGH
PRESSURE FEED PUMPS AND DRIVERS- FIRST PASS

     

    ENERGY
RECOVERY DEVICES

     

    SECOND
PASS RO SYSTEM

     

    HIGH
PRESSURE FEED PUMPS AND DRIVERS- SECOND PASS

     

    PRODUCT
TRANSFER PUMPS

     

    PRODUCT
STORAGE TANK

     

    PRODUCT
WATER DEGASIFIER

     

    DOSING
SYSTEMS

     

    MEDIA
FILTERS

     

    CARTRIDGE
FILTERS

     

    DIESEL
GENERATOR (INCLUDING VOLTAGE DROP CALCULATION)

     

    FLOW AND
CONDUCTIVITY METERS (REVENUE METERS)

     

    PLC

     

    BUILDING(S)

     

    RO
BUILDING CRANE(S)

     

    AIR
CONDITIONING

     

    PIPING
MATERIALS

    
      
        CONFIDENTIAL

         

      

      
        57

        
          

        

      

      
         

      

    

    APPENDIX
F

    

    SPECIFICATIONS

     

    The
following pages contain the Diesel Drive Bid Documents dated 21st April,
2005.

    
      
        CONFIDENTIAL

         

      

      
        58

        
          

        

      

      
         

      

    

    WATER
AND SEWERAGE CORPORATION

    NASSAU,
BAHAMAS

    

    

    

    PROVISION
OF DESALINATED WATER

    FROM

    BLUE
HILLS SEAWATER REVERSE OSMOSIS PLANT

    

    

    WATERFIELDS
COMPANY LIMITED,

    DIESEL
DRIVE BID

    

    Table
of Contents

    

    Note:     
Underlined text
used for divider tab labels.

    

    
      
        
          
            
              	
                      i.

                    	
                      Form of Bid
      (Section 4)

                    	
                      x.

                    	
                      Diesel Fuel Oil
      Price Commitment

                    
	
                      ii.

                    	
                      Accounting
      for Bid
      Prices of Desalinated

                    	
                      xi.

                    	
                      Summary
      of Fuel and
      Power

                    
	 
      	
                      Water
      Delivered (Section 6)

                    	 
      	
                      Consumptions
      (Table 10-3)

                    
	 
      	
                      a.Tables
      6-1(A and B), Bid Price for

                    	
                      xii.

                    	
                      Plant
      Mass
      Balances

                    
	 
      	
                      Desalinated
    Water

                    	
                      xiii.

                    	
                      Piping
      & Instrumentation Diagrams (P&IDs)

                    
	 
      	
                      b.Table
      6-2(A and B), Commercial Bid

                    	
                      xiv.

                    	
                      RO Membranes

                    
	 
      	
                      Evaluation
Form

                    	
                      xv.

                    	
                      Plant Layout
      Drawings

                    
	
                      iii.

                    	
                      Plant
      Capital
      Cost Tables 7-1(A and B)

                    	
                      xvi.

                    	
                      Building Layout
      Drawings

                    
	
                      iv.

                    	
                      Performance
      Guarantees (Section 8)

                    	
                      xvii.

                    	
                      Major Sub-Contractors

                    
	
                      v.

                    	
                      Estimated
      Performance
      Data (Section 9)

                    	
                      xviii

                    	
                      Organization
      Chart (construction)

                    
	
                      vi.

                    	
                      Technical
      Data
      Sheets (Section 10)

                    	
                      xix.

                    	
                      Organization
      Chart (delivery)

                    
	 
      	
                      a.Table
      10-1 General Technical Data

                    	
                      xx.

                    	
                      Project Financing

                    
	 
      	
                      b.Table
      10-2 Building Size

                    	
                      xxi.

                    	
                      Plant
      Buyout
      Schedule

                    
	 
      	
                      c.Estimated
      Fuel and Power Consumption

                    	
                      xxii.

                    	
                      Supplemental Information

                    
	
                      vii.

                    	
                      Bid Security

                    	 
      	
                      a.       Clarification

                    
	
                      viii.

                    	
                      Joint Venture
      Documents

                    	 
      	
                      b.       Work
      Exchanger Experience

                    
	
                      ix.

                    	
                      Form of
      Agreement for Desalinated Water Supply

                    	 
      	 
      
	 	 	 	 
	
                      

                    	
                      

                    	 
      
	
                      CONSOLIDATED

                      WATER

                    	 
      
	
                      Waterfields
      Company Limited

                    	 
      

            

          

        

      

    

    
      
        CONFIDENTIAL

         

      

      
        59EXHIBIT
10.2

      

      Portions
of this document have been omitted

      pursuant
to a request for confidential treatment.  The

      omitted
portions are marked ***** and have been

      filed
separately with the Commission.

      

      
        
          	
                  

                	
                  WATER
      AND SEWERAGE CORPORATION

                  87
      Thompson Blvd.

                  P.O.
      Box N-3905, Nassau, Bahamas

                  www.wsc.com.bs

                   

                  “Committed to Growth,
      Committed to
      Quality”

                	
                  

                

        

      

      LETTER
OF ACCEPTANCE

       

      
        	
                Our Ref:  WSC
      236/13

              	
                Date:  January
      25, 2011

              

      

      

      CONSOLIDATED
WATER CO. LTD.

      Trafalgar
Place

      P.O. Box
1114 GT

      George
Town, Grand Cayman

      Cayman
Islands

       

      
        	
                ATTN.: 

              	
                MR.
      FREDERICK McTAGGART

              

      

      PRESIDENT
& CEO

       

      Dear
Sir,

       

      BLUE
HILLS SEAWATER REVERSE OSMOSIS PLANT EXPANSION

       

      The Water
and Sewerage Corporation (“WSC”) hereby accepts Consolidated Water Co. Ltd.
(“CWCO”) Proposal dated December 8, 2010, for the expansion of the existing Blue
Hills Seawater Reverse Osmosis (BHRO) Plant on a Build Own, and Operate
(BOO).

       

      The
expansion shall have an installed production capacity of 4.0
Migd.  The WSC will guarantee to purchase 3.5 Migd
at a price of * * * *
*/1000imperial gallons from the expansion plant in accordance with the
attached rate sheet.  It is agreed that discussions are ongoing
regarding combining the rate sheets for the expansion and existing plant however
these discussions must not and will not delay the commencement of
construction.

       

      The
expansion plant is to be commissioned no later than eight (8)
months from the date of issue of this Letter of Acceptance which also
serves as an Authorization to Proceed.  Terms and conditions will
remain as per the existing contract.

       

      CONFIDENTIAL

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        
          	
                  BLUE
      HILLS SWRO EXPANSION

                	
                  25-JAN-2011

                
	
                  LETTER
      OF ACCEPTANCE

                	 
      

        

      

       

      Until a
formal Amendment to the existing contract is executed, this Letter of
Acceptance, together with your Proposal, will constitute a full and binding
agreement between CONSOLIDATED
WATER CO. LTD. and the WATER AND SEWERAGE
CORPORATION.

       

      Please
acknowledge receipt and acceptance of the above conditions by signing and
returning the enclosed copy of this letter.

       

      Yours
faithfully,

       

      
        
          
            	
                    WATER
      AND SEWERAGE CORPORATION

                  
	 
      	 
      
	
                    Signature: 

                  	
                    /s/ Glen F. Laville

                  
	 
      	
                      Glen
      F. Laville

                  

          

        

      

      

      
        
          
            	
                    Title: 

                  	
                    General
Manager

                  

          

        

      

       

      Acknowledged
and Accepted on behalf of: 

      
CONSOLIDATED WATER CO.
LTD.

       

      
        
          
            
              	
                      Signature: 

                    	
                      /s/ Frederick W.
  McTaggart

                    
	 
      	
                       
      Frederick W.
McTaggart

                    

            

          

        

      

      

      
        
          
            
              	
                      Title: 

                    	
                      President & CEO

                    
	 
      	 
      
	
                      Date:

                    	
                      January 31,
2011

                    

            

          

        

      

      

      CONFIDENTIAL
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Portions
of this document have been omitted

      pursuant
to a request for confidential treatment.  The

      omitted
portions are marked ***** and have been

      filed
separately with the Commission.

      

      
        	
                Blue
      Hills Expansion

                4
      MIGPD expanded capacity

                3.5
      MIGPD Guarantee

              
	
                Plant
      Production Rate, IGPD

              	
                3,500,000

              	
                Availability
      Factor

              	
                1.0000

              
	
                Annual
      Prod. kgal/yr

              	
                1,277,500

              	
                Annual
      Interest Rate

              	
                *****

              
	
                Plant
      Capital Cost

              	
                *****

              	
                Number
      of Years

              	
                20

              
	
                Production
      Costs (Annual)

              	
                Annual
      Cost

              	
                B$/kigal

              
	
                FIXED
      COSTS

              	 
      	
                Total

              
	
                Fixed
      Charges – Capital Repayment

              	
                *****

              	
                *****

              
	
                General
      & Administrative (Note 1)

              	
                *****

              	
                *****

              
	
                Operation
      & Maintenance Labor

              	
                *****

              	
                *****

              
	
                Overhead
      & Profit on Labor

              	
                *****

              	
                *****

              
	
                SUBTOTAL
      FIXED COSTS

              	
                *****

              	
                *****

              
	
                Note
      1:  includes allowance for bonding and insurance

              	 
      	 
      
	
                CONSUMABLES

              	
                B$/US
      gal

              	
                US
      gal/klgal

              	 
      	 
      
	
                Diesel
      Fuel

              	
                2.350

              	
                *****

              	
                *****

              	
                *****

              
	
                Electricity

              	
                B$/kwh

              	
                kwh/klgal

              	 
      	 
      
	
                Power
      Consumption

              	
                0.2720

              	
                *****

              	
                *****

              	
                *****

              
	 
      	
                B$/kVA/yr

              	
                Max.
      kVA

              	 
      	 
      
	
                Demand
      Charge

              	
                136.32

              	
                *****

              	
                *****

              	
                *****

              
	 
      	
                B$/lb

              	
                Ib/klgal

              	 
      	 
      
	
                Total
      Chemical Consumables

              	 
      	 
      	
                *****

              	
                *****

              
	 
      	 
      	
                -

              	
                *****

              
	
                Spare
      Parts & Equipment Consumables

              	
                *****

              	
                *****

              
	 
      	
                *****

              	
                *****

              
	
                Subtotal
      Consumables-less Profit

              	
                *****

              	
                *****

              
	
                Overhead
      & Profit on Consumables

              	
                *****

              	
                *****

              
	
                SUBTOTAL
      CONSUMABLES

              	
                *****

              	
                *****

              
	
                TOTAL
      PRICE:

              	
                *****

              	
                *****

              

      

       

      CONFIDENTIAL

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00183-of-00352.parquet"}]]