Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands, using the Reverse Osmosis Process (2021), effective as of May 10, 2022, by and between The Water Authority of the Cayman Islands and Ocean Conversion (Cayman) Limited

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EXHIBIT 10.1

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

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Water Authority of the Cayman Islands

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Water Authority of the Cayman Islands

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Request for Tender No.: PPC-2021-WAC-047-RFP

Issued: Tuesday 5 October 2021

Submission Deadline: Friday 14 January 2022 12:00 PM EST

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PART 1 - INVITATION AND SUBMISSION INSTRUCTIONS

1.1 Introduction

This Procurement Document issued by the Water Authority – Cayman (“the Authority”) is:

1.2 Invitation

This is an invitation by the Authority to eligible prospective respondents (“Proponents”) to submit a tender for the Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021) contract, as further described in APPENDIX C- PROJECT PARTICULARS, Section A (the “Deliverables”).

1.3 Procurement Contact

If a Proponent is in doubt as to the true meaning of any part of this Procurement Document or other documents contained herein, the Proponent shall submit questions only via the Bonfire platform (for the relevant project):

https://cayman.bonfirehub.com/opportunities

Except in so far as may be directed by the Authority in writing neither the Authority, nor any agent or servant in their employment has any authority to make any representation or explanation to Proponents as to the meaning of this Procurement Document.

Proponents and their representatives are not permitted to contact any employees, officers, agents, elected or appointed officials or other representatives of the Authority concerning matters regarding this Procurement Document. Failure to adhere to this rule may result in the disqualification of the Proponent and the rejection of the Proponent’s proposal.

Questions regarding the response and submission process only shall be submitted in writing to the Authority:

Tom van Zanten, Deputy Director ***@*** )

1.4 Type of Contract for Deliverables

The selected Proponent will be required to enter into an agreement with the Authority for the provision of the Deliverables in the form included in APPENDIX A — CONDITIONS OF ENGAGEMENT to the Procurement Document (the “Agreement”).

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1.5 Timetable

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The above timetable is tentative only, and may be changed by the Authority at any time.

1.6 Submission of Proposals

Please follow these instructions to submit via our electronic Public Portal.

Prepare your submission materials:

Requested Information

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Name	Type	# Files	Requirement
APPENDIX A - CONDITIONS OF ENGAGEMENT	File Type: PDF (.pdf)	1	Required
APPENDIX B - SUBMISSION FORM	File Type: PDF (.pdf)	1	Required
APPENDIX C - PROJECT PARTICULARS	File Type: PDF(.pdf)	1	Required
APPENDIX D - REFERENCES FORM	File Type: PDF (.pdf)	1	Required
PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH	File Type: PDF (.pdf)	1	Required

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Other Information (These will be part of the Contract)

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Requested Documents:

Please note the type and number of files allowed. The maximum upload file size is 100 MB.

Please note that only ONE (1) file can be uploaded for each Requested Document above. If you upload more than one file into the same slot, the previous file will he overwritten.

Do not embed any documents within your uploaded files, as they will not be accessible or evaluated.

Proposals shall be submitted electronically at the following platform:

https://cayman.bonfirehub.com/opportunities

Proposals must be submitted on or before the Submission Deadline. Proposals submitted after the Submission Deadline will be rejected.

We strongly recommend that you give yourself sufficient time and at least ONE (1) hour before Submission Deadline to begin the uploading process and to finalize your submission.

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Important Notes:

Each Requested Document is instantly (automatically) sealed and will only be visible after the Submission Deadline.

Uploading large documents may take significant time, depending on the size of the file(s) and your Internet connection speed.

You will receive an email confirmation receipt with a unique confirmation number once you finalize your submission.

Minimum system requirements: Internet Explorer 8/9/10+, Google Chrome, or Mozilla Firefox. JavaScript must be enabled.

Need Help?

The Authority uses a Bonfire portal for accepting and evaluating proposals digitally. Please contact Bonfire at ***@*** for technical questions related to your submission. You can also visit their help forum at https://bonfirehub.zendesk.com/hc

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

Proposals shall be irrevocable for a period of 165 days running from the moment that the Submission Deadline passes.

No proposal shall be altered or amended after the Submission Deadline other than those alterations necessary to correct any arithmetic errors. Rates shall prevail where there is an arithmetic error in extension. Discrepancies in the quantity multiplied by unit price and the extended total amount will be resolved in favour of the quantity multiplied by unit price. Discrepancies between the indicated sum of any column of figures and the correct sum thereof will be resolved in favour of the correct sum.

[End of Part 1]

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PART 2 – EVALUATION AND AWARD

2.1Stages of Evaluation

The Authority will conduct the evaluation of proposals in the following stages:

2.2Stage I – Mandatory Submission Requirements

Stage I will consist of a review to determine whether proposals comply with all of the mandatory submission requirements. If a proposal fails to satisfy all of the mandatory submission requirements, the Authority will issue the respondent a rectification notice identifying the deficiencies and providing the respondent an opportunity to rectify the deficiencies. If the respondent fails to satisfy the mandatory submission requirements within the Rectification Period, its proposal will be excluded from further consideration. The Rectification Period will begin to run from the date and time that the Authority issues a rectification notice to the respondent. The mandatory submission requirements are listed in Section B of APPENDIX C - PROJECT PARTICULARS.

2.3Stage II – Mandatory Technical Requirements

The Authority will review the proposals to determine whether the mandatory technical requirements as set out in Section C of APPENDIX C - PROJECT PARTICULARS have been met. Questions or queries on the part of the Authority as to whether a proposal has met the mandatory technical requirements will be subject to the verification and clarification process set out in PART 3-TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS.

The Authority will evaluate each qualified proposal on the basis of the rated criteria as set out in Section D of APPENDIX C - PROJECT PARTICULARS.

2.4Stage III – Pricing

The Authority will score the submitted price offering of each qualified proposal in accordance with the price evaluation method set out in Section D of APPENDIX C - PROJECT PARTICULARS. The evaluation of the price offerings will be undertaken after the evaluation of the mandatory requirements and the rated criteria has been completed.

2.5Selection of Top-Ranked Proponent

After the completion of Stage III, all scores from Stage II and Stage III will be added together and the Proponents will be ranked based on their total scores. The award will be made on the basis of that proposal from the responsible Proponent with the highest score using the Proposal Evaluation Criteria as set out in Section D of APPENDIX C - PROJECT PARTICULARS and which will best serve the interest of the Authority. Subject to the reserved rights of the Authority, the top-ranked Proponent will be selected to enter into the Agreement in accordance with the following section.

2.6Notice to Proponent and Execution of Agreement

The notice of selection by the Authority to the selected Proponent shall be in writing. The selected Proponent shall satisfy any other applicable conditions of this Procurement Document, including the pre-conditions of award listed in Section E of APPENDIX C - PROJECT PARTICULARS, within

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forty-five (45) days of the notice of selection, before the Agreement in the form included in APPENDIX A – CONDITIONS OF ENGAGEMENT to the Procurement Document (the “Agreement”) shall be executed. This provision is solely for the benefit of the Authority and may be waived by the Authority.

In addition to all of the Authority’s other remedies, if a selected Proponent fails to satisfy all of the applicable conditions within forty-five (45) days of the notice of selection, and the Agreement therefore cannot be not executed, the Authority may, without incurring any liability, withdraw the selection of that Proponent and proceed with the next highest ranked Proponent.

[End of Part 2]

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PART 3 – TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS

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

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

All proposals are to be in English only.

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

In the evaluation process the Authority may include information provided by the Proponent’s references and may also consider the Proponent’s past performance or conduct on previous contracts with the Authority or other institutions.

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

The Proponent will bear all costs associated with or incurred in the preparation and presentation of its proposal, including, if applicable, costs incurred for interviews or demonstrations.

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The Authority will not return the proposal or any accompanying documentation submitted by a Proponent.

Proponents shall promptly examine all of the Procurement Documents, and

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

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

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

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

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

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

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

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

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

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

Proponents must not at any time directly or indirectly communicate with the media in relation to this procurement process or any agreement entered into pursuant to this Procurement Document without first obtaining the written permission of the Procurement Contact.

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

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

The Authority may prohibit a company from participating in a procurement process based on past performance or based on inappropriate conduct in a prior procurement process, including but not limited to the following:

All information provided by or obtained from the Authority in any form in connection with this procurement process either before or after the issuance of this Procurement Document

All proposals and other information submitted to the Authority in relation to this Procurement Document become property of the Authority and, subject to the provisions of the Freedom of Information Law (latest revision), will be held in confidence.

A Proponent should identify any specific information in its proposal or any accompanying

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documentation supplied in confidence for which confidentiality is expected to be maintained by the Authority. The confidentiality of such information will be maintained where it is legally protected, or by order of a court,

Proponents are advised that their proposals will, as necessary, be disclosed on a confidential basis to advisers retained by the Authority to advise or assist with the procurement process, including the evaluation of proposals. If a Proponent has any questions about the collection and use of any information, including personal information, pursuant to this procurement process, these should be submitted to the Procurement Contact.

The Authority reserves the right to

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(m)reject any or all non-conforming, non-responsive, unbalanced or conditional proposals, or

(n)reject the proposal of any Proponent if the Authority believes that it would not be in the best interest of the Authority to make an award to that Proponent, whether because the proposal is not responsive or fails to meet any other pertinent standard or criteria established by Authority.

These reserved rights are in addition to any other express rights or any other rights that may be implied in the circumstances.

By submitting a proposal, each Proponent agrees that

(a)neither the Authority nor any of its employees, officers, agents, elected or appointed officials, advisors or representatives will be liable, under any circumstances, for any claim arising out of this procurement process including but not limited to costs of preparation of the proposal, loss of profits, loss of opportunity or for any other claim; and

(b)the Proponent waives any claim for any compensation of any kind whatsoever, including claims for costs of preparation of the proposal, loss of profit or loss of opportunity by reason of the Authority’s decision to not accept the proposal submitted by the Proponent, to enter into an agreement with any other Proponent or to cancel this procurement process, and the Proponent shall be deemed to have agreed to waive such right or claim.

These Terms and Conditions of the Procurement Process (Part 3)

(a)are intended to be interpreted broadly and independently (with no particular provision intended to limit the scope of any other provision);

(b)are non-exhaustive and shall not be construed as intending to limit the pre-existing rights of the Authority; and

(c)are to be governed by and construed in accordance with the laws of the Cayman Islands.

[End of Part 3]

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APPENDIX A – CONDITIONS OF ENGAGEMENT

The Water Authority of the Cayman Islands (hereinafter called “the Authority”) intends to proceed with a project known as “Procurement of and Operating Agreement for a Sea Water Desalination Plant at Red Gate Water Works, Grand Cayman, Cayman Islands using the Reverse Osmosis Process (2021)”

The Sea Water Reverse Osmosis (SWRO) Plant shall be located at the Authority’s Red Gate Water Works at Red Gate Road, George Town, Grand Cayman, Cayman Islands, Block 20B, Parcel 410, property owned by the Authority.

The Plant shall have a design water production capacity of 10,000 cubic metres of potable water per day (2.64 million US gallons per day) and shall be designed in such a way that the production capacity is achieved by no less than two (2) independent RO trains.

The successful Contractor shall:

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

Tenderers shall meet the following eligibility criteria in order to be considered and evaluated:

a.Tenderers must:

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ability of a Tenderer to show an operational plant under an agreement, similar to this one, will be advantageous.

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3. CONDITIONS OF CONTRACT

Definition of Terms

The “Agreement” shall mean the agreement between the Authority and the Contractor incorporating these Conditions of Contract (including Appendices A through J) and the Contract Drawings included in APPENDIX K;

The “Agreement Date” shall mean the date of the Agreement;

The “Authority” shall mean the Water Authority of the Cayman Islands incorporated by the Water Authority Act, and of P.O. Box 1104, Grand Cayman KY1- 1102; and shall be deemed to include, where appropriate, its duly authorized representatives or agents;

“Clcurrent” shall mean on any given date the Cayman Islands Consumer Price Index on the previous 30 September;

The “Conditions of Contract” shall mean these Conditions;

The “Contract Drawings” shall mean the Drawings referred to in the Agreement and included in APPENDIX K;

The “Contractor” shall mean the Contractor whose tender has been accepted by the Authority and shall include the Contractor’s legal personal representatives, successors and assigns;

A “Critical Spare” shall mean those Plant parts that are essential to meet the conditions of the Agreement, in particular the delivery requirements for Water, as defined in APPENDIX J.

A “cubic metre” shall mean a cubic metre of volumetric measure, and for the purposes of the Agreement shall be deemed equal to 264.2 US gallons;

The “Delivery Point” shall mean the location of the sampling tap adjacent to the Authority’s totalizing flow meter provided under Clause 47, at which point the ownership of and responsibility for the Water passes to the Authority;

The “Electrical Conductivity” (E.C.) shall mean the parameter used to determine the salt content (or total dissolved solids level) of the Water as measured using an Electrical Conductivity sensor, normalized to a specific reference temperature (25°C or 77°F), calibrated in accordance with the manufacturer’s recommendations using standards appropriate for the Water, and measured in units of micro-Siemens/centimetre (µS/cm);

“Ecurrent” shall mean on any given date the actual average cost of electricity (CI $/kWh), provided by Caribbean Utilities Company Ltd., and consumed by the Plant for the month under consideration, expressed in four (4) decimals of Cayman Islands dollars per kWh. For the avoidance of doubt, the actual average cost of electricity is calculated as the total cost of electricity during the previous month divided by the total number of kWhs of electricity consumed by the Plant. This calculation shall be substantiated by monthly invoices (i.e., CUC bills) which shall reflect the quantity (in kWhs) and cost (in CI$) of electricity supplied in the previous month;

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“ENCONspec” shall mean the specific energy consumption of the Plant and shall be deemed to mean the number of kWh of electric power required by the Plant to produce one (1) cubic metre of potable water, and deliver it to the Reservoir, as specified by the Contractor in Item No. 7 of the completed Schedule of Fees (in the Appendix to the Agreement). This shall be deemed to include all ancillary electricity usage (i.e., for air-conditioning, area lighting of the administration offices, product water pumps, etc.);

The “Exchange Rate” shall mean at any time during the Term the buying rate for Cayman Islands dollars (Cl$), using United States dollars (US$), as charged by the Cayman National Bank and Trust Company Limited on the date of the Invoice. (Please note that at present the exchange rate is fixed, and is CI$ 1.00 = US$ 1.20);

The “First Delivery Date” shall mean the date upon which the Contractor first demonstrates the ability of the Plant to deliver to the Reservoir a quantity of 10,000 cubic metres of Water within a period of 24 hours, at the ENCONspec, and which meets the specified quality requirements;

“Membrane” shall mean the complete reverse osmosis membrane assembly, comprising the membrane, membrane supports, flow distribution channels, provisions for brine and product outlets, and pressure vessels. The membranes shall be specifically designed for the production of potable water from seawater and/or brackish water using the reverse osmosis process. The membranes shall offer high salt rejection, high flux rates, and long life.

A “Non-Critical Spare” shall mean those Plant parts that are not essential to meet the conditions of the Agreement, in particular the delivery requirements for Water, as defined in APPENDIX J.

“Penalty” shall mean the stipulated sum to be paid by the Contractor to the Authority in the event of a breach.

The “Plant” shall mean all or any part of the mechanical, electrical and other equipment and all or any part of the civil engineering works including appurtenances which are in the possession of the Contractor and used by the Contractor to provide feed water, purify sea water and convey water to the Reservoir, more particularly described in Clauses 4 through 23;

“Quantity” shall mean the actual quantity of Water, measured in cubic metres, in accordance with Clause 47, delivered to the Authority by the Contractor;

The “Reservoir” shall mean the Authority’s water storage reservoir or reservoirs, located on the Site;

The “Site” shall mean Registration Section George Town Block 20B, Parcel 410 being the Red Gate Water Works located at Red Gate Road, George Town, Grand Cayman;

The “Term” shall mean the term of the Agreement as provided for in Clause 35;

“UScurrent” shall mean on any given date the last published US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data) on the previous 30 September;

“Water” shall mean potable water processed by the Contractor from sea water and delivered to the Authority in accordance with the terms of this Agreement.

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Scope of Works

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The Contractor shall provide and install the underground power and control cables (between the feed water wells and the Plant building) in suitably sized electrical ducts, and in strict compliance with the applicable NEC code requirements.

The wastewater pump station shall be provided with two (2) grinder pumps (one duty pump and one stand-by pump with an automatic change-over relay) with SS guide-rails for ease of maintenance of the pumps.

The Contractor shall ensure that only domestic wastewater is discharged into this wastewater pump station.

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If it is proven to the satisfaction of the Authority that the Plant is not operating within the allowable noise and hydrogen sulphide emission levels the Authority may stop the operation of the Plant until such time as the Plant is able to operate within the allowable emission levels. The Authority shall not be responsible for any loss, cost or expense that this might cause to the Contractor.

Before the First Delivery Date, the Contractor shall provide the Authority with a Waste Management Plan for all chemicals, lubricants, fuels and any other hazardous materials used in the Plant, for approval by the Authority, as per APPENDIX I.

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

Insurance

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policy and the receipts for the premiums or other satisfactory evidence of insurance cover as aforesaid.

27.

Items To Be Provided by the Authority

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

Both the product water pipeline and the brine pipeline provided by the Authority shall be 12-inch PVC pipe to ASTM D2241 SDR 26 (160), installed with approximately 30 inches ground cover. The Contractor shall join his pipework at the respective connection points as indicated on the Contract Drawings.

The Authority shall install all pipes and fittings between the existing brine pipeline, provided by the Authority in compliance with Sub-Clause 29 (b), and the brine disposal well, provided by the Contractor in compliance with Clause 9.

34.

Term of Agreement

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Feed Water Quality

Electric Power Supply

Critical Spares Inventory

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Quantity of Water Produced

Maintenance of the Plant

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Quality of Water Produced

Performance Testing

59.

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be determined by the Authority, the Plant can produce Water at the specified rate of 417 cubic metres per hour (10,000 cubic metres per day) at the ENCONspec, and which meets the quality requirements.

Notwithstanding the above, no penalty shall be charged in the event the results of the performance test are within 2% of the relevant production rate, quality requirements and the ENCONspec, and the performance test is successfully performed within 48 hours after the initial, unsuccessful, performance test.

Sale of Plant

The purchase price of the Plant may consist of two (2) elements:

Payments

(a) a Monthly Overheads Fee, for each calendar month (see Clauses 65 through 68), plus

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Monthly Overheads Fee

The Base Monthly Overheads Fee shall be the amount or amounts indicated in the Schedule of Fees, Items 3 and 4, of the Appendix to the Agreement.

“Amount of Sub-Clause 66 (a)” x (UScurrent / 208.1)

(Note: “208.1” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted – Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2020)

“Amount of Sub-Clause 66 (b)” x (Clcurrent / 110.9)

(Note: “110.9” is the value of the Cayman Islands Consumer Price Index on 30 September 2020)

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Quantity Fee

The Base Quantity Fee shall be the amount or amounts indicated in the Schedule of Fees, Items 5 and 6, of the Appendix to the Agreement.

“Amount of Sub-Clause 70 (a)” x (UScurrent / 208.1)

(Note: “208.1” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted — Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 30 September 2020)

“Amount of Sub-Clause 70 (b)” x (Clcurrent / 110.9)

(Note: “110.9” is the value of the Cayman Islands Consumer Price Index on 30 September 2020)

Energy Fee

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The Energy Fee shall be calculated as: ENCONspec x Ecurrent

The Specific Energy Consumption Guarantee (ENCONspec) shall be the number indicated in the Schedule of Fees, Item 7, of of the Appendix to the Agreement.

Time for Payment

Deductions

Failure to meet the Guaranteed Quantity

The penalty provision hereinafter written shall come into effect if all of the following conditions are met:

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In this event the Contractor shall pay to the Authority a penalty. This penalty shall be calculated as the difference between (A) the current Public Authority rate of water (CI$ per cubic metre) sold by the Water Authority on Grand Cayman, and (B) the sum of the Quantity Fee (calculated as per Clause 71) and the Energy Fee (calculated as per Clause 73), for each cubic metre of Water less than 9,000 cubic metres in any one day that the Contractor is unable to supply on the demand of the Authority.

The Authority may recover the penalty by deducting it from the following month’s monies owed to the Contractor.

Remedy for lower quality water

The penalty, for each individual constituent exceeding the allowable value as set out in APPENDIX F, shall be calculated as follows:

0.30 x (QF + EF) x (actual value — allowable value)/(maximum value — allowable value)

whereby

QF = the Quantity Fee (calculated as per Clause 71) and

EF = the Energy Fee (calculated as per Clause 73)

actual value = the actual value for the individual constituent

allowable value = the allowable value for the individual constituent as set out in APPENDIX F

maximum value = the maximum value for the individual constituent as set out in APPENDIX F

The penalty shall be deducted from the agreed price of Water, using a weighted average calculation for each individual constituent for each day the allowable value thereof, as set out in APPENDIX F, is exceeded, and applied to the Quantity delivered to the Authority.

The overall penalty shall be the sum of the penalties for each individual constituent as itemized in APPENDIX F, but the overall penalty shall not exceed the sum of the Quantity Fee (calculated

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as per Clause 71) and the Energy Fee (calculated as per Clause 73) multiplied by the Quantity delivered to the Authority during the calendar month.

Termination of the Agreement

then the Authority may give notice terminating this Agreement. The Contractor shall immediately cease operating the Plant upon receipt of the notice of termination.

Delivery Period and Operation of the Plant

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day. Monies due as a result of this penalty may be deducted from any monies later due to the Contractor from the sale of Water to the Authority. This deduction may be made as a 20% reduction of the monthly invoiced amount until such time as the penalty has been paid.

Extension of Agreement

Construction of Agreement

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Non-assignability of the Agreement

Binding Effect of Agreement

Notices

100. The extension of time for the performance by the Contractor of its obligations under the Agreement or the failure or forbearance on the part of the Authority immediately to enforce any right penalty or obligation under the terms of the Agreement shall not be construed as a waiver of any such right penalty or obligation which may accrue or arise out of the Agreement.

101. The Authority’s address is: Water Authority - Cayman, 13G Red Gate Road, P.O. Box 1104, Grand Cayman KY1-1102, Cayman Islands.

Customs duties

102. The Authority is exempt from duty on all materials and equipment imported into the Islands to be used on any project, as per section 11.6 of the Water Authority Act (2018 Revision). Therefore, no Customs duties and package tax are payable upon all Plant, and associated materials and equipment, imported into the Islands, and which will become part of the Plant.

103. In order to avoid that any import duties are being levied, the Contractor shall ensure that:

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104. The Contractor shall pay all Customs duties and package tax due upon the items covered by Clause 103 and which are charged as a result of the Contractor failing to comply with the requirements of that clause.

105. Notwithstanding Clause 102, the Contractor shall pay all Customs duties and package tax due upon tools and test equipment required for the operation and maintenance of the Plant, but which will not become part of the Plant.

106. In the event that during the Term the Customs duties increase, then, if the Contractor provides evidence of payment of the additional duties, the Authority shall reimburse the Contractor in full for these additional Customs duties paid. Likewise, if during the Term the Customs duties reduce, the Contractor shall credit the Authority in full for any savings resulting from the reduction in Customs duties charged. The Contractor shall ensure that all correspondence with the Customs Department is copied to the Authority in a timely manner.

Force Majeure

107.

(a)The Contractor shall have no liability for a consequence of any of the following events:

(viii) any breach of contract or default by or insolvency of, a third party including an agent or sub-contractor.

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that it has satisfied the conditions set out in Sub-Clause (c). The duty of the Contractor to perform its obligation under this Agreement shall be suspended until such circumstance shall have ceased without the imposition of any penalty as provided for in Clauses 79 and 89.

Rates of Exchange

108. All payments shall be made in United States dollars (US$) and Cayman Islands dollars (Cl$), as specified in the various clauses. However, if, at any time during the Agreement, it is deemed necessary to convert Cayman Islands dollars (Cl$) into United States dollars (US$), or vice versa, the conversion will be made at the Exchange Rate.

Change in Local Legislation

109. If, there occur in the Cayman Islands changes to Law or any regulation of any duly constituted authority, or the introduction of any such Law or regulation which causes additional or reduced costs to the Contractor, or should any approvals or concessions granted under Clause 32 not be provided or be withdrawn, and the Contractor can prove that he thereby incurs additional cost, then the fees set out in Clauses 65 through 73 shall be modified accordingly to take in to account such additional costs and these revised fees shall be paid by the Authority. Any such increase in the fees shall reflect only the actual increase in the cost of production of water without any element of profit. Where any subsequent changes in Cayman Islands legislation can be proven to reduce the Contractor’s costs then the fees set out in Clauses 65 through 73 shall be reduced accordingly to take into account such reduced costs and these revised fees shall be paid by the Authority.

Work Permits for Expatriate Personnel

110. The Contractor shall use its best endeavours to employ persons possessing Caymanian status in various categories of employment in its operation, it being understood that the Contractor has the right to import key trained or skilled personnel (and their dependants) or otherwise recruit such personnel for employment in accordance with the laws of the Cayman Islands for the time being in force relating to work permits.

111. The Authority shall support the Contractor in its application for Work Permits for key trained or skilled expatriate persons to be employed to ensure the proper operation of the Plant. However, the Contractor shall use its best endeavours to employ persons possessing Caymanian status in all categories of employment in its operation and to train them for higher categories wherever possible.

112. The Contractor shall obtain and pay all fees for any required work permits for expatriate personnel.

Training of Authority Staff

113. During the Term the Contractor shall provide hands-on training to Authority staff in the general operation and maintenance of the Plant. The training will be primarily concerned with the start­-up, control and other general operating procedures for the Plant. The training shall be scheduled so as not to interrupt the production of Water.

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Additional Documentation to be provided

114.On or before the First Delivery Date, the Contractor shall provide the Authority with a Hurricane Contingency (Preparedness and Recovery) Plan for the Plant, for approval by the Authority (refer to APPENDIX I).

115.No later than three (3) months after the First Delivery Date, the Contractor shall provide the Authority with complete Operation and Maintenance manual(s) for the Plant, in addition to the Operations Service Plan provided as per APPENDIX I.

116.No later than three (3) months after the First Delivery Date, the Contractor shall provide the Authority with detailed as-built drawings of the Plant, including workshop drawings for the various pipe manifolds, equipment skids, equipment supports etc. (All drawings shall be provided in AutoCAD format)

Arbitration

117.Save as otherwise expressly provided, any dispute, difference or question which may arise between the Authority and the Contractor as to any matter arising under or by virtue of the Agreement or as to their respective rights and liabilities in respect thereof, and in respect of which amicable settlement cannot be reached within ninety (90) days of either Party advising the other in writing of such dispute, difference or question, may be referred to arbitration, and such arbitration shall take place in accordance with the Arbitration Law, 2012. The model clause of the said law shall apply. The result of such arbitration shall be binding unless the arbitrator has made obvious legal mistakes or behaved improperly.

Severability

118. If any provision or part-provision of the Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of the Agreement.

Counterparts

119. The Agreement may be executed in any number of counterparts, each of which, when executed, shall be an original. All counterparts together shall constitute one and the same Agreement. The Agreement shall not be effective until each party has signed at least one counterpart.

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AGREEMENT

The Employer is The Water Authority of the Cayman Islands, P.O. Box 1104, 13G Red Gate Road, George Town, Grand Cayman KY1-1102, Cayman Islands.

The Contractor is Ocean Conversion Cayman Limited, a subsidiary of Consolidated Water Co. Ltd. of PO Box 1114GT, Regatta Office Park, Windward 3, 4th Floor, Grand Cayman Cayman Islands, KY1-1102 .

The Employer desires the execution of certain Works known as

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

OFFER

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Dated this                      14th                       day of                      January                      2022.

Signature in the capacity of _President and CEO                      

duly authorized to sign tenders for and on behalf of:                      

    OCEAN CONVERSION CAYMAN LIMITED                      (IN BLOCK CAPITALS)

Address _PO BOX 1114 GT, Grand Cayman, Cayman Islands, KY1-1102                      

Witness                                                                                                                                 

Address

    PO BOX 1114 GT, Grand Cayman, Cayman Islands, KY1-1102                      

Occupation    Executive Vice President and Chief Operations Officer                      

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ACCEPTANCE

The Employer has, by signing below, accepted the Contractor’s offer and agrees that in consideration for the execution of the Works by the Contractor, the Employer shall pay the Contractor at the times and in the manner prescribed in the Conditions of Contract. This Agreement comes into effect on the date when the Contractor receives a copy of this document signed by the Employer.

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APPENDIX TO THE AGREEMENT

This Appendix forms part of the Agreement.

SCHEDULE OF FEES

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Attachments to Agreement:

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Addendum 1

Addendum 2

Addendum 3

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As issued by the Water Authority Cayman

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Procurement of and Operating Agreement for

a Sea Water Desalination Plant at

Red Gate Water Works

Grand Cayman, Cayman Islands

using

the Reverse Osmosis Process (2021)

TENDER ADDENDUM No. 1

CLARIFICATION:

Site Visit

It is the Proponent’s responsibility to obtain all the information necessary to prepare a proposal (see item 3.1.6. on page 11 of the Procurement Document).

Proponents can arrange a visit to the site to familiarize themselves regarding the site conditions, the extent of the work etc. Requests for a site visit can be made via the Bonfire platform. Please allow at least 24 hours’ notice and we will respond with a suitable day and time. Please note, however, that the site presently still has a lot of vegetation on it, and it is anticipated that the site will not be cleared until early January 2022.

Proponents are reminded that, as per item 1.3 (PART 1 – INVITATION AND SUBMISSION INSTRUCTIONS) (see page 5 of the Procurement Document), “Except in so far as may be directed by the Authority in writing neither the Authority, nor any agent or servant in their employment has any authority to make any representation or explanation to Proponents as to the meaning of this Procurement Document.”

Additionally, as per item 3.2.1 (PART 3 – TERMS AND CONDITIONS OF THE PROCUREMENT PROCESS) (see page 12 of the Procurement Document), ”The Authority is under no obligation to provide additional information, and the Authority shall not be responsible for any information provided by or obtained from any other source. It is the responsibility of the Proponent to seek clarification via the Bonfire platform on any matter it considers to be unclear. The Authority shall not be responsible for any misunderstanding on the part of the Proponent concerning this Procurement Document or its process.”

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Information to be submitted with “PROPOSAL SUBMISSION”

As per APPENDIX C— PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS (see page 53 of the Procurement Document):

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

For the avoidance of doubt, “all the other Information listed above” refers to the items listed on pages 52 and 53 of the Procurement Document, such as:

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Procurement of and Operating Agreement for

a Sea Water Desalination Plant at

Red Gate Water Works

Grand Cayman, Cayman Islands

using

the Reverse Osmosis Process (2021)

TENDER ADDENDUM No. 2

GENERAL NOTES:

Submission Deadline

After due consideration, the Authority has decided not to change the Submission Deadline, which will remain as Friday 14 January 2022 12:00 PM EST (GMT-5), as indicated in item 1.5 (PART 1 - INVITATION AND SUBMISSION INSTRUCTIONS) (see page 6 of the Procurement Documents).

Alternative Operating Agreements

Since the late 1980s, the Authority has structured the operating agreements for its water production plants such that, in addition to the design, construction and operation of the plants, the successful contractor was also responsible to finance the project. The capital cost of the water production plant was then amortized over the operating period (i.e., a build, own, operate and transfer (BOOT) contract).

The Framework for Fiscal Responsibility for the Cayman Islands prevents the Water Authority from entering into any long-term borrowing (which includes long-term financing). Therefore, the Authority cannot consider a BOO or BOOT model for this project.

AutoCAD drawing of the Site

An AutoCAD drawing of the Site, including adjacent properties, and showing the extent of the lay-down area for use by the Contractor during construction (as per Drawing C-01), will be published on Bonfire as a Public File.

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Unless noted otherwise, all comments hereafter refer to the clauses in section 3 CONDITIONS  OF CONTRACT (APPENDIX A - CONDITIONS OF ENGAGEMENT)

CLARIFICATION:

ELIGIBILITY CRITERIA (as per APPENDIX A – CONDITIONS OF ENGAGEMENT) (on pages 17 and 18 of the Procurement Documents)

As the Contractor must design, plan, construct, install, and operate and maintain the Plant, and the proposals will be evaluated on the basis of the cost of water, the experience of the Tenderers, and the proven performance record of the equipment offered (see Item A THE DELIVERABLES (as per APPENDIX C — PROJECT PARTICULARS) on page 51 of the Procurement Documents), Past Performance Data and References must be provided for at least three (3) similar SWRO plants, which use commercially available isobaric energy recovery devices, that will confirm that the company has successfully designed, constructed and continuously operated these SWRO plants for a period of not less than seven (7) years.

Sub-Clause 5 (j) (on page 22 of the Procurement Documents)

The emergency generator shall be sized (and wired) to ensure that, under emergency power, the reverse osmosis plant can still produce at least 5,000 cubic metres of Water per day, with the proper operation of all requisite pumps (including the pumps and blowers for the air stripping tower and wet gas scrubber), controls, building lights, air-conditioning etc.

Clause 16 (on page 23 of the Procurement Documents)

Performance records for the pumps refer to demonstrated records of each pump’s performance under controlled conditions (e.g., pump curves showing flow rate, head, and efficiency etc.)

Performance records for Membranes refer to the demonstrated performance of the membranes in respect of salt rejection, flux rates, life expectancy etc. under similar conditions as envisaged for the Plant.

Clause 17 (on page 23 of the Procurement Documents)

The detailed design drawings of the Plant must be certified by a professional engineer. In accordance with Clause 19 and Sub-Clause 21 (a), the Contractor must meet the requirements of the Planning Department, the Building Control Unit (BCU), etc. for the construction of the Plant, and this engineer may therefore have to be registered with BCU.

The affidavit specifying the operating pressures of the Membranes is needed to be able to verify whether the membranes are operated at pressures allowed by the membrane element manufacturer, or those envisaged during the plant design stage.

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Clause 19 (on page 24 of the Procurement Documents)

Planning permission for this project has not yet been obtained. The development on this parcel (previously Block 20B Parcel 34 (F98-0344)) was always intended to be a phased construction over a number of years. In early 2001 a Master Site Plan was submitted to the Planning department together with the Phase One Site Plan.

The Site (Block 20B Parcel 410) is zoned Light Industrial. The zoning guidelines by the Department of Planning allow 75% of the lot area to be covered, which includes paved surfaces. Currently, the site coverage is around 30%.

Electrical Transformer

The Authority is responsible for the provision and installation of the electrical transformer and vault, including the installation of the underground (primary) ducts.

As per Clause 20 (on page 24 of the Procurement Documents), the Contractor shall be responsible for the provision and installation of the underground electrical duct and cable between the Plant and the transformer (i.e., the secondary side of the transformer), and for the connection of the secondary of the transformer to the main disconnect at the Plant building.

As per Clause 30 (on page 27 of the Procurement Documents), the Authority shall arrange for the provision and installation of a suitably sized electrical transformer in the vicinity of the Plant at no cost to the Contractor. The Authority shall be responsible for the connection of the primary side of the transformer to the mains power.

Sub-Clause 21 (f)(viii) (on page 25 of the Procurement Documents)

Membrane vessels shall be manufactured by ASME BPVC Certificate Holders and shall be certified and stamped with the Certification Mark in accordance with the applicable ASME BPVC Section.

Clause 22 (on page 25 of the Procurement Documents)

The Waste Management Plan does not specifically mention refuse (non-hazardous solid waste) that requires collection and transport to a processing or disposal site.

There is already a garbage container enclosure on the Site, readily accessible by a service vehicle (garbage truck) from Department of Environmental Health (situated immediately east of the transformer vault for RO building #2, or approximately 100 feet north-east of the laydown

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area). However, the Planning Department may require an additional garbage container enclosure for the Plant building.

Clause 29 (on page 27 of the Procurement Documents)

The product water from the Plant building will be connected to the existing product water pipeline from RO Building #1 (see Drawing C-01).

The brine pipeline from the Plant building will be connected to a 24-inch HDPE pipeline, independent of the existing brine pipeline from RO Building #1 (see under section MODIFICATIONS below).

It is anticipated that the water production at RO Building #1 will cease soon after the First Delivery Date.

Clauses 45 and 46 (on page 29 of the Procurement Documents)

This is not a “take-or-pay contract”.

Under the Contract there is no obligation by the Authority to take a minimum, or any, amount of Water from the Plant. However, the Contractor must meet any daily demand for Water by the Authority within the limits of the Plant, and must deliver, when required by the Authority, in any one month an average daily quantity of Water of 9,000 cubic metres.

The Contractor’s overheads are covered by the Monthly Overheads Fee, as defined in Clause 66.

Clause 63 (on page 31 of the Procurement Documents)

The Payment Terms, as detailed in this clause, are deemed to limit the risk to the Authority.

As the Contractor is responsible to design, plan, construct, install, and implement the Plant, the Authority’s interests are protected by requiring that, before any payment is made, that

The Contractor will need to obtain funds, either from its own assets, bank overdrafts or some other form of financing, to bridge the time period between incurring expenditures and obtaining the payments from the Authority. The Contractor must include these construction financing cost in his prices/rates.

The Payment Terms, as included in the Procurement Documents, will therefore remain unchanged.

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Clauses 73 through 75 (on pages 33 and 34 of the Procurement Documents)

The Contractor guarantees the specific electrical energy consumption (ENCONspec) of the Plant, which is the number of kWh of electric power required to produce one cubic metre of Water, and deliver it to the Reservoir, and this is deemed to include all ancillary electricity usage (i.e., for air-conditioning, area lighting of the administration offices, product water pumps, etc.);

The Authority pays for all electric power consumed by the Plant. The Authority deducts any such payments for electricity from the Energy Fee for the Quantity delivered to the Authority.

If, in any month, the electricity bill amount is higher than the Energy Fee for the Quantity delivered, the Plant’s electrical energy consumption was higher than the guaranteed ENCONspec. Consequently, the net result of “Energy Fee for the Quantity delivered to the Authority less payments made for electricity” will be a negative amount. It is the Contractor’s responsibility to operate and maintain the Plant in such a manner that the Plant’s actual electrical energy consumption does not exceed the guaranteed ENCONspec.

Clause 107 (on page 39 of the Procurement Documents):

Some COVID-19 Supply Chain Disruptions are covered by Sub-Clause 107 (a)(vii), subject to the provisions of Sub-Clauses 107 (b) through (d).

Therefore, the Contractor shall only be entitled to an extension to the Delivery Period based on unexpected (at the time of the tender submission) or unpreventable delays to the project caused by supply chain disruptions associated with COVID-19

Information to be submitted with “PROPOSAL SUBMISSION”

The required information, as per APPENDIX C – PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS (see pages 52 and 53 of the Procurement Document), must be submitted under the section “PROPOSAL SUBMISSION - EXPERIENCE, TEAM & APPROACH” as indicated in PART 1 – INVITATION AND SUBMISSION INSTRUCTION Section 1.6 Submission of Proposals”, unless that information is already included elsewhere, e.g., as part of APPENDIX B - SUBMISSION FORM or APPENDIX D – REFERENCES FORM. The same information does not need to be provided more than once.

Lay-down Area (as indicated on Drawing C-01 (see APPENDIX K — DRAWINGS)):

Prior to the Agreement Date, the Authority shall have removed all vegetation from the lay-down area on the Site.

A geotechnical survey was not carried out for this project. However, it has been previously determined (for other projects on the Site, such as the construction of several large water storage tanks) that the allowable bearing capacity of the Red Gate Water Works is around 1,800 psf.

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The elevation of the site is approximately five (5) feet above mean sea level (and therefore approximately four (4) feet above the local groundwater table).

Well Testing (see Appendix H - OPERATION OF FEED WATER ABSTRACTION AND BRINE DISPOSAL WELLS)

It is anticipated that any well testing, after the initial development of the feed water abstraction wells and the brine disposal well, will not be more frequent than once every two (2) years, unless the Monthly Operating Reports (see APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS) indicate a negative trend (i.e., increases) in the drawdown in the feed water abstraction well and/or the head build-up in the casing of the brine disposal well.

The Contractor and the Authority shall agree on a procedure for the well testing, which shall be designed to minimize the disruption to the regular Plant operation, minimize the amount of manual activity by each party and shall include the method of calibration of the relevant instruments.

CORRECTIONS

Sub-Clause 107 (d) (on pages 39 and 40 of the Procurement Documents):

Delete the reference to “Clause 89” and replace with “Clause 88”.

MODIFICATIONS:

Clause 11 (on page 23 of the Procurement Documents)

Modify the second paragraph of this clause to:

The Contractor shall provide and install the underground power and control cables (between the feed water wells and the Plant building), either in suitably sized electrical ducts, or using direct buried armoured cable with corrosion resistant jackets and wet location rated conductors. All cables and their installation shall be in strict compliance with the applicable NEC code requirements.

Sub-Clause 21 (d) (on page 24 of the Procurement Documents)

Delete the entire sub-clause and replace with the following:

The building and ancillary works shall be designed and built in strict accordance with the Department of Planning’s Technical Bulletin TB 0001-May 2020 — Design Criteria for the 2016 Cayman Islands Building Codes.

(see also: https://www.planning.ky/wp-content/uploads/docs/TB0001-Desion-Criteria-for-the-2016-Cayman-Island-Building-Codes.pdf).

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Clause 29 (on page 27 of the Procurement Documents)

Delete the entire clause and replace with the following:

The Authority shall provide the following:

The product water and brine pipelines shall be installed with approximately 30 inches ground cover.

The Contractor shall join his pipework at the respective connection points as indicated on the Contract Drawings.

Adjustment of Delivery Period by three (3) calendar months to allow for COVID-19 Supply Chain Disruptions and Planning and Building Control Unit (BCU) turnaround times

Clause 88 (on page 36 of the Procurement Documents):

Delete the reference to “fifteen (15) calendar months” and replace with “eighteen (18) calendar months”

Clause 89 (on page 37 of the Procurement Documents):

Delete the reference to “eighteen (18) calendar months” and replace with “twenty-one (21) calendar months”

Drawing C-01 (see APPENDIX K — DRAWINGS)):

The footprint of the new Plant building indicated on Drawing C-01 as “proposed RO building #3”) may, if deemed necessary, be increased beyond the maximum extent (70 feet x 85’) specified. The maximum footprint of the equipment slabs, however, cannot exceed the maximum extent (100 feet x 120 feet) specified.

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Procurement of and Operating Agreement for

a Sea Water Desalination Plant at

Red Gate Water Works

Grand Cayman, Cayman Islands

using

the Reverse Osmosis Process (2021)

TENDER ADDENDUM No. 3

Unless noted otherwise, all comments hereafter refer to the clauses in section 3 CONDITIONS OF CONTRACT (APPENDIX A – CONDITIONS OF ENGAGEMENT)

CLARIFICATION

Clause 6 (on page 22 of the Procurement Documents)

The location and number of proposed abstraction wells, as shown on Drawing C-01 (see APPENDIX K — DRAWINGS), is indicative only; the combined capacity of all abstraction wells must be sufficient to provide the full feed water flow required for the design production capacity of the Plant. However, all abstraction wells must be situated within the lay-down area.

The following is provided for information purposes only:

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Clause 9 (on page 22 of the Procurement Documents)

The following is provided for information purposes only:

MODIFICATIONS:

Adjustment of Prices/Rates to allow for COVID-19 Supply Chain Disruptions

As per item 1.6.4 (Part 1 - INVITATION AND SUBMISSION INSTRUCTIONS) (page 8 of the Procurement Documents) and item 8 on APPENDIX B -SUBMISSION FORM (page 49 of the Procurement Documents) the proposal shall be irrevocable for a period of 165 days following the Submission Deadline. This requirement remains to allow a proper evaluation of the various proposals.

Item 4 on APPENDIX B -SUBMISSION FORM (page 48 of the Procurement Documents) states that “no adjustment shall be made to any prices/rates as a consequence of any variations in the cost of labour, plant, materials or transport”.

The above notwithstanding, the Authority acknowledges that a 165-day irrevocable period in an inflationary environment and a time of volatility in the commodity markets could expose a Contractor to considerable market risk, and an adjustment to the purchase price of the Plant is therefore reasonable.

Clause 62 (on page 31 of the Procurement Documents)

Add the following at the end of this clause:

The purchase price of the Plant shall be adjusted as follows:

“Amount of Sub-Clause 62 (a)” x ( YY / XX)

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

“YY” is the value of the US Producer Price Index for Industrial Commodities less Fuels, Not Seasonally Adjusted – Series ID: WPU03T15M05, as published by United States Department of Labor on their website (http://www.bls.gov/data ), on 31 December 2022)

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“Amount of Sub-Clause 62 (b)” x (AA/ZZ)

(Note: “ZZ” is the value of the Cayman Islands Consumer Price Index on 31 December 2021; and

“AA” is the value of the Cayman Islands Consumer Price Index on 31 December 2022)

Clause 63 (on page 31 of the Procurement Documents)

Add the following at the end of this clause:

Updated reference dates for annual inflation adjustment.

Clause 67 Monthly Overheads Fee

Delete the entire clause and replace with the following:

Beginning on the First Delivery Date, and on every 1st January thereafter, the Monthly Overheads Fee shall be calculated as follows:

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

“Amount of Sub-Clause 66 (a)” x (UScurrent / AAA)

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

“Amount of Sub-Clause 66 (b)” x (Clcurrent / 118.0)

(Note: “118.0” is the value of the Cayman Islands Consumer Price Index on 30 September 2021)

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Clause 71 Quantity Fee

Delete the entire clause and replace with the following:

Beginning on the First Delivery Date, and on every 1st January thereafter, the Quantity Fee shall be calculated as follows:

“Amount of Sub-Clause 70 (a)” x (UScurrent / AAA)

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

“Amount of Sub-Clause 70 (b)” x (Clcurrent / 118.0)

(Note: “118.0” is the value of the Cayman Islands Consumer Price Index on 30 September 2021)

APPENDIX C - PROJECT PARTICULARS, Section C MANDATORY TECHNICAL REQUIREMENTS

Add the following at the end of item 2 (see page 53 of the Procurement Document):

Provide with the preliminary layout of the Plant building, the manufacturer’s name and product description for the major Plant equipment proposed.

The following is an Authority-preferred, but not exclusive, list of manufacturers for certain Plant equipment items.

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APPENDIX B - SUBMISSION FORM

1.Proponent Information

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

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

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The Proponent has submitted its prices/rates in accordance with the instructions in the Procurement Documents. The Proponent confirms that the prices/rates inserted in the Schedule of Fees (in the Appendix to the Agreement) are the full inclusive value of the work described in the Procurement Documents, including all costs and expenses which may be required in and for the work and/or activities described, together with all general risks, liabilities and obligations set forth or implied therein.

No adjustment shall be made to any prices/rates as a consequence of any variations in the cost of labour, plant, materials or transport.

All prices/rates submitted shall be in United States dollars (US$) and Cayman Islands dollars (Cl$), as specified in the various clauses.

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

Proponents who fail to complete this section will be deemed to have received all posted addenda.

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

For the purposes of this Procurement Document, the term “Conflict of Interest” includes, but is not limited to, any situation or circumstance where:

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contractual obligations.

For the purposes of section (a)(i) above, Proponents should disclose the names and all pertinent details of all individuals (employees, advisers, or individuals acting in any other capacity) who (a) participated in the preparation of the proposal; AND (b) were employees of the Authority within twelve months prior to the Submission Deadline.

If the box below is left blank, the Proponent will be deemed to declare that (a) there was no Conflict of Interest in preparing its proposal; and (b) there is no foreseeable Conflict of Interest in performing the contractual obligations contemplated in the Procurement Documents.

Otherwise, if the statement below applies, check the box.

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

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8. Proposal Irrevocable

The Proponent agrees that its proposal shall be irrevocable for a period of 165 days following the Submission Deadline.

9. Disclosure of Information

The Proponent hereby acknowledges that any information provided in this proposal, even if it is identified as being supplied in confidence, is subject to the provisions of the Freedom of Information Law (latest revision), and may be disclosed where required by law or by order of a court. The Proponent hereby consents to the disclosure, on a confidential basis, of this proposal by the Authority to the advisers retained by the Authority to advise or assist with the procurement process, including with respect to the evaluation this proposal.

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

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January 14, 2022

Tom van Zanten, Deputy Director

Water Authority Cayman

Box 1104

Grand Cayman, KY1-1102

Cayman Islands

Dear Mr. van Zanten,

Ocean Conversion Cayman confirms the submission of all Mandatory Technical requirements, per the Tender document, Appendix C, Section C, enclosed.

Yours sincerely,

FOR OCEAN CONVERSION (CAYMAN) LIMITED

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Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax ###-###-####, Email: ***@***

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APPENDIX C- PROJECT PARTICULARS

A.THE DELIVERABLES

Project Overview

The purpose of the Works is to provide and operate a Reverse Osmosis Plant designed to process potable water from sea water and deliver the potable water by means of a pipeline to water storage reservoirs owned and operated by the Water Authority (“Authority”).

The Plant shall be located at the Authority’s Red Gate Water Works at Red Gate Road, George Town, Grand Cayman, Cayman Islands, Block 20B, Parcel 410, property owned by the Authority.

The Plant shall have a production capacity of 10,000 cubic metres of potable water per day (2.64 million US gallons per day) and shall be designed in such a way that the production capacity is achieved by no less than two (2) independent RO trains (except for the feedwater pumps and wells, brine disposal well and post-treatment system (i.e., air stripping tower and wet gas scrubber) which may be common to both trains).

The quality of the potable water produced shall be within the maximum permissible levels as set out in APPENDIX F.

The Authority shall be responsible for the post-treatment (e.g., disinfection, corrosion inhibition, and pH stabilization) and for the distribution of the water.

The successful Tenderer shall operate and maintain the Plant for a period of ten (10) years. The Authority shall pay a fixed amount (adjusted for inflation) each month to cover the Tenderer’s overheads, in addition to a fee (adjusted for inflation) and an energy fee for each cubic metre of potable water produced.

The Tenders shall be evaluated on the basis of the cost of water, the experience of the Tenderers, and the proven performance record of the equipment offered.

For consideration of his Tender, the Tenderer shall submit a Testimonial Letter demonstrating that he has designed, built and continuously operated at least three (3) similar sea water reverse osmosis (“SWRO”) plants of similar design, each with a design water production capacity of not less than 2,500 m3/d (0.66 MGD) (at least one of which must have a design water production capacity of not less than 5,000 m3/d (1,32 MGD)), and utilizing similar membranes as specified in his Tender. These aforementioned plants shall have been in successful operation for a period of not less than seven (7) years. Also, the ability of a Tenderer to show an operational plant provided under a similar agreement will be an advantage.

B.MANDATORY SUBMISSION REQUIREMENTS

Each proposal must include the duly completed form of Agreement, comprising AGREEMENT and OFFER

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Each proposal must include the duly completed Submission Form (APPENDIX B), with items 1, 4 and 6 completed, and item 9 completed and signed by an authorized representative of the Proponent.

Each proposal must include a duly completed Schedule of Fees (Appendix to the Agreement

None

The Tender shall be clear and concise and shall include sufficient detail for effective evaluation and for substantiating the validity of stated claims. The Tenderer shall assume that the Authority has no prior knowledge of the Tenderer’s experience and will base its evaluation on the information presented in the Tender.

The Tender must include, but does not necessarily have to be limited to, the following:

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

Stage I — Mandatory Submission Requirements (as per PART 2 — EVALUATION AND AWARD)

Tender Evaluation Criteria: Certain elements of the Tender are mandatory, the submission of these will determine whether a Tender is “compliant or not”, failure to submit any mandatory items will result in a “failed” Tender and will not be assessed further.

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a)Mandatory items (Pass or Fail):

The Technical Assessment (Criteria b) and Costing Analysis (Criteria c) and will only be carried out for those Tenderers that have satisfactorily passed this item a) Assessment Criteria (Mandatory Items (Pass or Fail)).

Stage II – Mandatory Technical Requirements (as per PART 2 — EVALUATION AND AWARD)

The assessment of the Rated Criteria is by definition subjective. Therefore, a small number of Authority staff (up to three (3)) will review and score each proposal independently. The scoring for the Mandatory Technical Requirements shall be the average of the independent scores.

Assessment of Mandatory Technical Requirements (max. 20 points):

For each proposal, each category of the Rated Criteria will be scored between 0 (poor) and 5 (excellent).

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The following summarizes the categories and the descriptions of the rated criteria.

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Stage III — Pricing (as per PART 2 — EVALUATION AND AWARD)

Three (3) scenarios will be reviewed:

In order to properly account for the purchase price of the Plant in the Cost Analysis, a Monthly Capital Cost will be added in each of the aforementioned three (3) scenarios.

The Monthly Capital Cost will be calculated as the purchase price amortized over ten (10) years using an annual interest rate of 4.0%, or

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For each of these 3 scenarios, each proposal will be awarded points as follows: 50 * P;

where

P = (Lowest Total Monthly Cost of All Proposals/Each Proposal’s Total Monthly Cost)

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The successful Tenderer will be the company that has the highest combined score of Assessment Criteria b and c (max possible score 170 points)

E. PRE-CONDITIONS OF AWARD

1.Proof of Trade and Business license

2.Proof of compliance with the Local Companies (Control) Law (latest revision)

3.Proof of compliance with the Companies Law (latest revision)

4.Use of Acceptable Sub-Contractors

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January 14, 2022

Tom van Zanten, Deputy Director

Water Authority Cayman

Box 1104

Grand Cayman, KY1-1102

Cayman Islands

Dear Mr. van Zanten,

Please find enclosed Appendix D References including Past Plant Performance Data, per the Tender request, Appendix D and Appendix C, Section C1b.

Yours sincerely,

FOR OCEAN CONVERSION (CAYMAN) LIMITED

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Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax ###-###-####, Email; ***@***

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[*****]

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All correspondence to the Respondent should be directed to:

Frederick W. McTaggart

Ocean Conversion (Cayman) Limited

P.O. Box 1114

Windward Three, Fourth Floor

Regatta Office Park, West Bay Road

Grand Cayman, KY1-1102

Cayman Islands

Tel: 345 ###-###-####

Fax: 345 ###-###-####

Email: ***@***

I confirm that we have received and read the following Addenda:

1.Addendum No. 1

2.Addendum No. 2

3.Addendum No. 3

I trust that the information provided in this document is satisfactory and look forward to hearing from you when you have made a decision regarding award of the tender.

Yours sincerely,

FOR OCEAN CONVERSION (CAYMAN) LIMITED

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Executive Offices, P.O. Box 1114, Grand Cayman, Cayman Islands, KY1-1102 Tel: (345) 945-4277, Fax ###-###-####, Email; ***@***

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APPENDIX E - ANALYSIS OF WELL WATER (TYPICAL VALUES)

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Notes:

All values are in mg/I, unless stated otherwise

(*)Average results from samples of feed water taken (annually) during the period February 1996 to July 2017.

(**)Average results from samples of feed water taken (annually) during the period November 2002 to July 2017.

Results of individual sampling tests are provided on the next page.

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APPENDIX F - QUALITY OF PRODUCT WATER

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Notes:

Note 1: All water quality testing shall be conducted by the Water Authority Laboratory, or by a laboratory accredited for testing of potable water.

Note 2: All other parameters of the product water shall not exceed the values as published in the latest edition of the WHO Guidelines for Drinking Water Quality.

Note 3: The specified sulphide levels of the product water shall be achieved by the proper design and operation of the air stripper (99.7% or better removal efficiency). However, in the event that additional post-treatment is required to lower the sulphide levels to acceptable levels, these post-treatment methods shall be submitted to the Authority for approval. Chlorination of the product water shall not be an acceptable method to further reduce the sulphide levels.

Note 4: Electrical Conductivity meters shall be calibrated with appropriate standards relevant to product water quality.

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APPENDIX G - SPECIFICATIONS FOR CONSTRUCTING FEED WATER

ABSTRACTION AND BRINE DISPOSAL WELLS

1. GENERAL

2. SUBSURFACE INFORMATION

Jones, B., 2000. Geology of the Cayman Islands, University of Alberta, Edmonton.

Ng, K. - C., 1990. Diagenesis of the Oligocene - Miocene Bluff Formation of the Cayman Islands - a petrographic and hydrogeochemical approach. Ph.D. Dissertation, University of Alberta, Edmonton, 344p.

Ng, K. - C., Jones, B. and Beswick, R., 1992. Hydrogeology of Grand Cayman, British West Indies: a karstic dolostone aquifer. J. Hydrol., 134: 273-295.

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3.PERMITS

The Contractor shall procure all permits required of him by law for the execution of the work. Abstraction and disposal permits can be obtained from the Water Authority.

4.EQUIPMENT AND PERSONNEL

The Contractor shall furnish capable and experienced personnel and suitable equipment to construct the wells and perform the required tests. The Authority shall reserve the right to inspect the equipment of the Contractor to assure qualification.

5.MATERIALS

1.   Well Casing

All well casing shall be new and shall be made of PVC and conforms to (or exceeds) one of the following standards:

a)ASTM D1785 Schedule 80, or

b)ASTM D2241 SDR 21, or

c)ASTM F-480-77 SDR 21.

All well casing shall have markings identifying the manufacturer, nominal size, type of material, dimension ratio and manufacturer’s code. Well casing shall also include the seal or mark of the laboratory making the evaluation for potable water applications.

2.   Annular Grout:

The following grout mixtures shall be used. (Note: The actual choice shall depend on the grouting method adopted):

The following grouting materials shall be used for the above mixtures:

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6. WELL CONSTRUCTION

Well Construction

Well Casing Installation

Annular Grout Seal

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(i) The positive displacement - exterior method: Grout shall be injected in the annular space between the casing and the borehole. The annular space shall not be less than three times the size of the largest coarse aggregate used for concrete grout. The grout pipe shall extend from the surface to the bottom of the zone to be grouted. The grout pipe shall have a minimum inside diameter of one (1) inch for sand-cement grout. It shall have a minimum inside diameter of 1-1/2 inches for concrete grout. Grout shall be placed, from bottom to top, in one continuous operation. The grout pipe may be slowly raised as the grout is placed but the discharge end of the grout pipe must be submerged in the emplaced grout at all times until grouting is completed. The grout pipe shall be maintained full, to the surface, at all times until the completion of the grouting of the entire specified zone. In the event of interruption in the grouting operation, the bottom of the pipe shall be raised above the grout level and shall not be re-submerged until all air and water have been displaced from the grout pipe and the pipe flushed clean with clear water.

(ii) The float shoe continuous injection method: The bottom of the casing shall be fitted with a suitable drillable float shoe equipped with a back pressure valve. Tubing or pipe shall be run to the float shoe to which it shall be connected by a bayonet fitting, left hand thread coupling, or similar release mechanism. Water or other drilling fluid shall be circulated through the tubing and up through the annular space outside the casing. When the annular space is clean and open, grout shall be pumped down the pipe or tubing and forced by continual pumping out into the annular space surrounding the casing. Pumping shall continue until the entire zone to be grouted is filled. The grout pipe shall then be detached from the float shoe and raised to the surface for flushing. After the grout has set the float shoe, back pressure valve, and any concrete plug remaining in the bottom of the casing shall be drilled out. A sand-cement grout shall be used for this procedure. Concrete grout cannot be used with this method.

Location of Grout

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Open Hole Interval

Well development

Well testing for performance

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with an ample power source, controls and appurtenances and shall be capable of being operated without interruption for a period of eight (8) hours.

7. RECORD KEEPING

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together with approximate weight of the bits during the drilling of the various types of formation in the various sections of the hole. This report shall be delivered upon request to the Authority.

3.The Contractor shall afford all reasonable opportunities for geologists employed by the Authority to collect, identify and store representative drilling samples. Flow samples shall be taken by removing from the circulating drilling fluid representative samples of the formation by either collecting same in a cutting sample box, a “shale shaker”, a baffle in a ditch, or catching them in a bucket and allowing the samples to settle out.

4.The Contractor shall keep accurate records of the pumping test and furnish copies of all records to the Authority upon completion of the test. The records shall also be available to the Authority for inspection at any time during the test. For each well used in the test, the records shall include physical data describing the construction features such as, but not limited to: well depth and diameter; open hole interval; a description of the measuring point and its measured height above land surface and/or mean sea level; the methods used in measuring water levels and pumping rates. An accurate description or sketch map of the well locations with identifying names or numbers and distances between wells shall be provided on each set of records. Records of measurements shall include the date of the test, the clock time and elapsed pumping time of each measurement, the depth to water below the measuring point, the pumping rate at the time of measurement, and any pertinent comments on conditions that may affect the measurements. Frequency of water-level measurements before, during, and after pumping shall be as specified by the Authority.

8. WELL PLUMBNESS AND ALIGNMENT

1.The completed well shall be sufficiently plumb and straight so that there will be no interference with the installation, alignment, operation, or future removal of the permanent well pump.

2.To demonstrate the compliance of the work with the requirements, the Contractor shall furnish all labour, tools and equipment and perform the tests described herein. The test for plumbness and alignment shall be made following construction of the well.

3.Alignment shall be tested by lowering into the well to a depth of at least fifty (50) feet (lowest anticipated pump setting) a section of pipe forty (40) feet long or a dummy of the same length. The outside diameter of the test pipe or dummy shall not be more than 1 inch smaller than the inside diameter of that part of the casing or hole being tested. The dummy when lowered into the casing shall pass freely the specified length of casing.

4.The test for plumbness shall be made with a plummet. Construct a tripod or frame similar to that shown in Figure 2. The centre of the pulley should be exactly ten (10) feet above the top of the well. The pulley shall be so located that the plumb line will come off its outer edge exactly over the centre of the well casing.

Make the plumb ring or plunger ¹/₄ inch smaller in diameter than the inside diameter of the well casing. It can be made from a piece of sheet steel or a short piece of pipe. Whichever is used, it must be heavy enough to keep the plumb line taut. The hub of the ring must not be solid as the water must pass through it as it is lowered in the well. The hole through which the plumb line passes must be in the exact centre of the ring. Knots or marks should be made every ten (10) feet on the plumb line, to indicate the depth the ring has been lowered in the well.

The well characteristics are determined by lowering the plumb ring ten (10) feet at a time and

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taking a reading at each location. If the plumb line passes exactly through the centre line at any location, the well is plumb at the depth the plumb ring is suspended. However, if the line does not pass through the well centre the well at that depth is out of plumb by an amount equal to the distance between the line and the well centre, plus an equal distance for each ten (10) feet that the plumb ring is below the floor level.

9. WELL TOP TERMINATION

10. SITE RESTORATION

11. WORKING HOURS

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for the saving of life or property or for the safety of the Works, in which case the Contractor shall immediately advise the Authority.

12. PROTECTION OF SERVICES

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FIGURE 1

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APPENDIX H - OPERATION OF FEED WATER ABSTRACTION AND BRINE

DISPOSAL WELLS

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APPENDIX I - OPERATION MANAGEMENT REQUIREMENTS

1.    GENERAL

The Contractor shall operate and maintain all Plant (e.g., equipment, instrumentation, systems (SCADA, controls etc.), structures, and utilities) in such a manner as to satisfy the Plant performance standards and in accordance with the Operation Management Requirements as described in this APPENDIX I.

The Contractor shall maintain the Plant in good working order.

The Contractor shall maintain the aesthetic quality of the Plant, with due allowance for reasonable wear and tear.

The Contractor shall maintain adequate equipment inventory to facilitate the repair and replacement of equipment.

All operation services shall meet the Authority’s requirements and meet prudent industry practice standards and shall include, but shall not be limited to: