Exhibit 10.7

 

CERTAIN INFORMATION OF THIS DOCUMENT HAS BEEN REDACTED BECAUSE IT IS BOTH (I)
NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED.
INFORMATION THAT WAS OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER
IDENTIFIED BY THE MARK “[***].”

FIXED PRICE TURNKEY AGREEMENT

 

for the

 

ENGINEERING, PROCUREMENT AND CONSTRUCTION

 

OF TRAINS 1 AND 2

 

of the

 

RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

 

by and between

 

RIO GRANDE LNG, LLC

 

as Owner

 

and

 

BECHTEL OIL, GAS AND CHEMICALS, INC.

 

as Contractor

 

Dated as of the 24th Day of May, 2019

 

 

 

 

TABLE OF CONTENTS

 

 

 

 

 

 

RECITALS

    

1

 

 

 

 

 

ARTICLE 1 DEFINITIONS

 

1

1.1

 

Definitions

 

1

1.2

 

Interpretation

 

18

 

 

 

 

 

ARTICLE 2 RELATIONSHIP OF OWNER, CONTRACTOR AND SUBCONTRACTORS

 

19

2.1

 

Status of Contractor

 

19

2.2

 

Key Personnel, Organization Chart and Contractor Representative.

 

19

2.3

 

Subcontractors and Sub-subcontractors

 

20

2.4

 

Subcontracts and Sub-subcontracts.

 

20

2.5

 

Contractor Acknowledgements.

 

22

 

 

 

 

 

ARTICLE 3 CONTRACTOR’S RESPONSIBILITIES

 

24

3.1

 

Scope of Work.

 

24

3.2

 

Specific Obligations

 

25

3.3

 

Design and Engineering Work.

 

26

3.4

 

Spare Parts.

 

29

3.5

 

Training Program in General

 

30

3.6

 

Environmental Regulations and Environmental Compliance

 

31

3.7

 

Contractor’s Tools and Construction Equipment

 

31

3.8

 

Employment of Personnel.

 

31

3.9

 

Clean-up

 

33

3.10

 

Safety and Security

 

33

3.11

 

Emergencies

 

34

3.12

 

Approvals, Certificates, Permits and Licenses.

 

34

3.13

 

Books, Records and Audits.

 

35

3.14

 

Tax Accounting.

 

35

3.15

 

Temporary Utilities, Roads, Facilities and Storage.

 

36

3.16

 

Subordination of Liens

 

36

3.17

 

Hazardous Materials

 

37

3.18

 

Quality Assurance

 

37

3.19

 

Reports and Meetings.

 

38

3.20

 

Payment

 

39

3.21

 

Commercial Activities

 

39

3.22

 

Title to Materials Found

 

39

3.23

 

Survey Control Points and Layout

 

39

3.24

 

Cooperation with Others

 

39

3.25

 

Responsibility for Property

 

40

3.26

 

Explosives

 

40

3.27

 

No Interference with Train 1.

 

41

3.28

 

Equipment Not Incorporated into the Facility

 

42

3.29

 

Operation Personnel.

 

42

3.30

 

Compliance with Real Property Interests

 

42

i

3.31

 

Taxes

 

43

3.32

 

Electronic File Sharing Site

 

43

 

 

 

 

 

ARTICLE 4 OWNER’S RESPONSIBILITIES

 

43

4.1

 

Payment

 

43

4.2

 

Permits

 

43

4.3

 

Access on the Site

 

43

4.4

 

Operation Personnel

 

44

4.5

 

Legal Description and Survey

 

44

4.6

 

Owner-Furnished Items.

 

44

4.7

 

Owner Representative

 

45

4.8

 

Texas Sales and Use Tax.

 

45

4.9

 

Hazardous Materials

 

47

4.10

 

LNG Tanker Release

 

47

 

 

 

 

 

ARTICLE 5 COMMENCEMENT OF WORK, KEY DATES, AND SCHEDULING OBLIGATIONS

 

47

5.1

 

Commencement of Work

 

47

5.2

 

Limited Notice to Proceed/Notice to Proceed.

 

47

5.3

 

Key Dates

 

49

5.4

 

CPM Schedule.

 

50

5.5

 

Recovery and Recovery Schedule

 

52

5.6

 

Acceleration and Acceleration Schedule

 

54

 

 

 

 

 

ARTICLE 6 CHANGES; FORCE MAJEURE; AND OWNER CAUSED DELAY

 

55

6.1

 

Owner’s Right to Change Order

 

55

6.2

 

Change Orders Requested by Contractor.

 

57

6.3

 

Changed Criteria Adjustment; Contractor Documentation

 

59

6.4

 

Change Orders Act as Accord and Satisfaction

 

59

6.5

 

Timing Requirements for Change Notices Issued by Contractor

 

60

6.6

 

Adjustment Only Through Change Order

 

61

6.7

 

Force Majeure.

 

61

6.8

 

Delay Caused by Owner or for Which Owner Is Responsible

 

62

6.9

 

Delay

 

62

6.10

 

Contractor Obligation to Mitigate Delay

 

63

6.11

 

Separated Contract Price Adjustments in Change Orders

 

63

 

 

 

 

 

ARTICLE 7 CONTRACT PRICE AND PAYMENTS TO CONTRACTOR

 

63

7.1

 

Contract Price

 

63

7.2

 

Interim Payments.

 

64

7.3

 

Final Completion and Final Payment

 

66

7.4

 

Payments Not Acceptance of Work

 

66

7.5

 

Payments Withheld

 

66

7.6

 

Payment of Amounts Withheld or Collected on Letter of Credit

 

67

7.7

 

Interest on Late Payments

 

67

7.8

 

Offset

 

68

7.9

 

Currency

 

68

ii

7.10

 

Conditions Precedent to Payment

 

68

7.11

 

[***]

 

68

 

 

 

 

 

ARTICLE 8 TITLE AND RISK OF LOSS

 

69

8.1

 

Title.

 

69

8.2

 

Risk of Loss.

 

69

 

 

 

 

 

ARTICLE 9 INSURANCE AND LETTER OF CREDIT

 

70

9.1

 

Insurance.

 

70

9.2

 

Irrevocable Standby Letter of Credit.

 

72

 

 

 

 

 

ARTICLE 10 OWNERSHIP OF DOCUMENTATION

 

74

10.1

 

Ownership of Work Product

 

74

10.2

 

Contractor’s Intellectual Property and Third Party Intellectual Property

 

75

10.3

 

Limitations on Use of Work Product

 

76

10.4

 

Owner Provided Documents

 

76

10.5

 

License to Use Liquefaction Technology

 

77

10.6

 

APCI Third Party Intellectual Property

 

77

10.7

 

License to Use Liquefaction Technology.

 

77

 

 

 

 

 

ARTICLE 11 COMPLETION AND PERFORMANCE LIQUIDATED DAMAGES

 

78

11.1

 

Notice and Requirements for Mechanical Completion and RFSU.

 

78

11.2

 

Ready to Load First Cargo.

 

78

11.3

 

Notice and Requirements for Substantial Completion

 

81

11.4

 

Owner Acceptance of Mechanical Completion, RFSU, RLFC and Substantial Completion

 

82

11.5

 

Performance Guarantees and Minimum Acceptance Criteria

 

82

11.6

 

Punchlist

 

84

11.7

 

Notice and Requirements for Final Completion

 

84

11.8

 

Partial Occupancy and Use

 

85

11.9

 

Advice and Assistance after Substantial Completion

 

85

11.10

 

Long-Term Obligations

 

86

 

 

 

 

 

ARTICLE 12 WARRANTY AND CORRECTION OF WORK

 

86

12.1

 

Warranty.

 

86

12.2

 

Correction of Work Prior to Substantial Completion of Each Train.

 

87

12.3

 

Correction of Work After Substantial Completion of Each Train.

 

89

12.4

 

Assignability of Warranties

 

91

12.5

 

Waiver of Implied Warranties

 

91

 

 

 

 

 

ARTICLE 13 GUARANTEE OF TIMELY COMPLETION, DELAY LIQUIDATED DAMAGES, AND EARLY
COMPLETION BONUS

 

92

13.1

 

Delay Liquidated Damages.

 

92

13.2

 

Payment of Liquidated Damages

 

92

13.3

 

Early Completion Bonus.

 

92

iii

ARTICLE 14 CONTRACTOR’S REPRESENTATIONS

 

93

14.1

 

Contractor Representations

 

93

 

 

 

 

 

ARTICLE 15 OWNER’S REPRESENTATIONS

 

94

15.1

 

Owner Representations

 

94

15.2

 

Financial Solvency

 

95

 

 

 

 

 

ARTICLE 16 DEFAULT, TERMINATION AND SUSPENSION

 

95

16.1

 

Default by Contractor.

 

95

16.2

 

Termination for Convenience by Owner

 

98

16.3

 

Suspension of Work

 

98

16.4

 

Suspension by Contractor

 

99

16.5

 

Termination by Contractor.

 

99

 

 

 

 

 

ARTICLE 17 INDEMNITIES

 

100

17.1

 

Contractor’s General Indemnification

 

100

17.2

 

Owner’s Indemnity for Personal Injury and Property Damage

 

102

17.3

 

Indemnification of Port Indemnified Parties

 

102

17.4

 

Pre-Existing Hazardous Material

 

102

17.5

 

Patent and Copyright Indemnification.

 

103

17.6

 

Lien Indemnification

 

103

17.7

 

Legal Defense

 

104

17.8

 

Enforceability.

 

105

 

 

 

 

 

ARTICLE 18 DISPUTE RESOLUTION

 

105

18.1

 

Negotiation

 

105

18.2

 

Arbitration

 

106

18.3

 

Continuation of Work during Dispute

 

107

 

 

 

 

 

ARTICLE 19 CONFIDENTIALITY

 

107

19.1

 

Contractor’s Obligations

 

107

19.2

 

Owner’s Obligations

 

108

19.3

 

Definitions

 

109

19.4

 

Exceptions

 

109

19.5

 

Equitable Relief

 

109

19.6

 

Term

 

109

 

 

 

 

 

ARTICLE 20 LIMITATION OF LIABILITY

 

110

20.1

 

Contractor Aggregate Liability

 

110

20.2

 

Limitation on Contractor’s Liability for Liquidated Damages.

 

110

20.3

 

Liquidated Damages in General.

 

111

20.4

 

Consequential Damages

 

112

20.5

 

Exclusive Remedies

 

112

20.6

 

Application of Liability Limitations

 

112

 

 

 

 

 

ARTICLE 21 MISCELLANEOUS PROVISIONS

 

113

21.1

 

Entire Agreement

 

113

iv

21.2

 

Amendments

 

113

21.3

 

Joint Effort

 

113

21.4

 

Captions

 

113

21.5

 

Notice

 

113

21.6

 

Severability

 

114

21.7

 

Assignment

 

115

21.8

 

No Waiver

 

115

21.9

 

Governing Law

 

115

21.10

 

Foreign Corrupt Practices Act

 

115

21.11

 

Successors and Assigns

 

116

21.12

 

Attachments and Schedules

 

116

21.13

 

Obligations

 

116

21.14

 

Further Assurances

 

116

21.15

 

Priority

 

116

21.16

 

Restrictions on Public Announcements

 

116

21.17

 

Parent Guarantee

 

117

21.18

 

Language

 

117

21.19

 

Counterparts

 

117

21.20

 

Owner’s Lender

 

117

21.21

 

Train 3 Liquefaction Facility.

 

117

21.22

 

Potential Lenders, Potential Equity Investors and Equity Participants.

 

118

21.23

 

Survival

 

118

 

v

LIST OF ATTACHMENTS AND SCHEDULES

 

 

 

 

ATTACHMENT A

    

Scope of Work and Basis of Design

SCHEDULE A-1

 

Scope of Work

SCHEDULE A-2

 

Basis of Design 

ATTACHMENT B

 

Contractor Deliverables

ATTACHMENT C

 

Payment Schedule

SCHEDULE C-1

 

Earned Value Contract Price Breakdown

SCHEDULE C-2

 

Payment Milestones

SCHEDULE C-3

 

Maximum Cumulative Payment Schedule

SCHEDULE C-4

 

Additional Work Options Pricing

SCHEDULE C-5

 

Escalation Table

ATTACHMENT D

 

Form of Change Order

SCHEDULE D-1

 

Change Order Form

SCHEDULE D-2

 

Change Directive Form

SCHEDULE D-3

 

Owner’s Change Request Form

SCHEDULE D-4

 

Contractor’s Change Notice Form 

SCHEDULE D-5

 

Pricing for Change Orders and Change Directives

ATTACHMENT E

 

Key Dates and Delay Liquidated Damages

SCHEDULE E-1

 

Key Dates

SCHEDULE E-2

 

Delay Liquidated Damages

ATTACHMENT F

 

Key Personnel and Contractor’s Organization

ATTACHMENT G

 

Approved Subcontractors and Sub-subcontractors

ATTACHMENT H

 

Notice to Proceed Forms

 

vi

SCHEDULE H-1

 

Form of Limited Notice to Proceed

SCHEDULE H-2

 

Form of Notice to Proceed

SCHEDULE H-3

 

LNTP No. 1

ATTACHMENT I

 

Form of Contractor’s Invoices

SCHEDULE I-1

 

Form of Contractor’s Interim Invoice

SCHEDULE I-2

 

Form of Contractor’s Final Invoice

ATTACHMENT J

 

Health, Safety and Environmental Policies

ATTACHMENT K

 

Form of Lien and Claim Waivers

SCHEDULE K-1

 

Contractor’s Interim Conditional Lien Waiver and Release upon Progress Payment

SCHEDULE K-2

 

Contractor’s Interim Conditional Claim Waiver upon Progress Payment

SCHEDULE K-3

 

Subcontractor’s Interim Conditional Lien Waiver and Release upon Progress
Payment

SCHEDULE K-4

 

Subcontractor’s Interim Conditional Claim Waiver upon Progress Payment

SCHEDULE K-5

 

Contractor’s Final Lien Waiver and Release upon Final Payment

SCHEDULE K-6

 

Contractor’s Final Claim Waiver and Release upon Final Payment

SCHEDULE K-7

 

Subcontractor’s Final Lien Waiver and Release upon Final Payment

SCHEDULE K-8

 

Subcontractor’s Final Claim Waiver and Release upon Final Payment

ATTACHMENT L

 

Form of Completion Certificates

SCHEDULE L-1

 

Form of Mechanical Completion Certificate

SCHEDULE L-2

 

Not Used

vii

SCHEDULE L-3

 

Form of RFSU Certificate

SCHEDULE L-4

 

Form of RLFC Certificate

SCHEDULE L-5

 

Form of Substantial Completion Certificate

SCHEDULE L-6

 

Form of Final Completion Certificate

ATTACHMENT M

 

Pre-Commissioning, Commissioning, Start-up, Training and Turnover Program

ATTACHMENT N

 

Not Used

ATTACHMENT O

 

Insurance Requirements

ATTACHMENT P

 

Contractor Permits

ATTACHMENT Q

 

Owner Permits

ATTACHMENT R

 

Form of Irrevocable, Standby Letter of Credit

ATTACHMENT S

 

Performance Tests

ATTACHMENT T

 

Minimum Acceptance Criteria, Performance Guarantees and Performance Liquidated
Damages

ATTACHMENT U

 

Form of Parent Guarantee

ATTACHMENT V

 

Owner-Furnished Items

ATTACHMENT W

 

Capital Spare Parts List

ATTACHMENT X

 

Meeting and Reporting Requirements

ATTACHMENT Y

 

Quality Plan

ATTACHMENT Z

 

Site Plan

ATTACHMENT AA

 

Form of Direct Agreements

ATTACHMENT BB

 

Rely Upon Information

ATTACHMENT CC

 

Not used

ATTACHMENT DD

 

List of Equipment and Texas Direct Pay Exemption Certificate

viii

ATTACHMENT EE

 

Not Used

ATTACHMENT FF

 

Relief for changes in U.S. Tariffs or Duties

ATTACHMENT GG

 

Additional Work Options

ATTACHMENT HH

 

List of Post-Substantial Completion Interfering Work

 

 

 

 

ix

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT (this “Agreement”),
dated the 24th Day of May, 2019 (the “Effective Date”), is entered into by and
between Rio Grande LNG, LLC a limited liability company organized under the laws
of Texas (“Owner”), and Bechtel Oil, Gas and Chemicals, Inc., a corporation
organized under the laws of Delaware (hereinafter referred to as “Contractor”),
each sometimes referred to individually herein as a “Party” and collectively as
the “Parties.”

RECITALS

WHEREAS, Owner desires to enter into an agreement with Contractor to perform the
engineering, procurement, construction, pre-commissioning, commissioning,
start-up and testing of a greenfield turnkey liquefied natural gas (“LNG”)
liquefaction facility and export terminal, consisting of two (2) liquefaction
units, each having an aggregate nominal LNG production capacity of up to
approximately 5.87 million metric tonnes per annum (“mtpa”) and associated
facilities, for the purpose of liquefying natural gas to form LNG, including
feed gas treatment facilities, and all systems and infrastructure, including
temporary facilities, from the feed gas pipeline tie-in to storage and marine
facilities and the loading arms, and all related appurtenances thereto (the
“Facility,” as defined in greater detail herein) located at a site south of the
Brownsville-Port Isabel Highway and north of the Brownsville Ship Channel in
Cameron County near Brownsville, Texas (the “Site,” as defined in greater detail
herein); and

WHEREAS, Contractor, itself or through its vendors, suppliers, and
subcontractors, desires to perform the foregoing engineering, procurement,
construction, pre-commissioning, commissioning, start-up and testing on a fixed
price turnkey basis (which fixed price is separated for tax purposes);

NOW THEREFORE, in consideration of the mutual covenants herein contained and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1
DEFINITIONS

1.1        Definitions.  In addition to other defined terms used throughout this
Agreement, when used herein, the following capitalized terms have the meanings
specified in this Section 1.1.

“AAA Rules” has the meaning set forth in Section 18.2.

“Abandonment” or “Abandon”  means, prior to the acceptance by Owner of the
Substantial Completion Certificates for both Trains, Contractor’s cessation of
all or substantially all of the Work (unless Contractor is entitled to stop,
suspend or terminate the performance of the Work under the Agreement).

“Acceleration Schedule” has the meaning set forth in Section 5.6.

1

“Additional Work Options” has the meaning set forth in Section 7.1B.3.

“Affiliate” means (i) any Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common control with
a Party, and (ii) any Person that, directly or indirectly, is the beneficial
owner of fifty percent (50%) or more of any class of equity securities of, or
other ownership interests in, a Party or of which the Party is directly or
indirectly the owner of fifty percent (50%) or more of any class of equity
securities or other ownership interests.  For purposes of this definition,
“control” (including, with correlative meanings, the terms “controlled by” and
“under common control with”) means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or otherwise.

“Agreement” means this Agreement for the performance of the Work (including all
Attachments and Schedules attached hereto), as it may be amended from time to
time in accordance with this Agreement.

“Aggregate Cap” has the meaning set forth in Section 20.1.

“Aggregate Equipment Price” has the meaning set forth in Section 7.1B.1.

“Aggregate Labor and Skills Price” has the meaning set forth in Section 7.1B.2.

“APCI” means Air Products and Chemicals, Inc., a Subcontractor providing certain
Equipment and engineering services related to the wound coil aluminum heat
exchangers LNG liquefaction units pursuant to the equipment purchase agreement
between Contractor and Air Products and Chemicals, Inc.

“APCI License” has the meaning set forth in Section 10.7A.

“APCI Assignment Agreement” has the meaning set forth in Section 10.7A.

“Appellate Rules” has the meaning set forth in Section 18.2.

“Applicable Codes and Standards” means any and all codes, standards or
requirements set forth in Attachment A) or in any Applicable Law, which codes,
standards and requirements shall govern Contractor’s performance of the Work, as
provided herein.  In the event of an inconsistency or conflict between any of
the Applicable Codes and Standards, the highest performance standard as
contemplated therein shall govern Contractor’s performance under this Agreement.

“Applicable Law” means all laws, statutes, ordinances, certifications, orders,
(including presidential orders), decrees, proclamations, injunctions, licenses,
Permits, approvals, rules and regulations, including any conditions thereto, of
any Governmental Instrumentality having jurisdiction over any Party, all or any
portion of the Site or the Facility or performance of all or any portion of the
Work or the operation of the Facility or the Train 3 Liquefaction Facility, or
other legislative or administrative action of a Governmental Instrumentality
having jurisdiction over all or any portion of the Site or the Project or

2

performance of all or any portion of the Work or the operation of the Project,
or a final decree, judgment or order of a court which relates to the performance
of Work hereunder or the interpretation or application of this Agreement,
including (i) any and all Permits, (ii) any Applicable Codes and Standards set
forth in Applicable Law, (iii) tariffs, quotas, and duties, and (iv) Applicable
Law related to (y) conservation, improvement, protection, pollution,
contamination or remediation of the environment or (z) Hazardous Materials or
any handling, storage, release or other disposition of Hazardous Materials.

“approval” and “consent” means, unless specified otherwise herein, written
approval and written consent.  Wherever in this Agreement a provision is made
for the giving or issuing of any consent by a Party, unless otherwise specified,
such consent shall be in writing and the words “consent”, “approve”, “accept” or
“certify” (or words to similar effect) are to be construed accordingly.

“Authorized Documents” means such documents, drawings, and specifications
provided by Owner to Contractor pursuant to the ITB Agreement, which Contractor
has modified and resubmitted to Owner as part of the FEED verification process
performed by Contractor prior to the Effective Date.

“BASF” means BASF SE.

“BASF License” has the meaning set forth in Section 10.7B.

“Basis of Design” means the basis of design of the Facility as set forth in
Schedule A-2.

“BHGE” means Baker Hughes GE.

“Books and Records” has the meaning set forth in Section 3.13A.

“Business Day” means every Day other than a Saturday, a Sunday or a Day that is
an official holiday for employees of the federal government of the United States
of America.

“CAD” has the meaning set forth in Section 3.3E.

“Capital Spare Parts” means those capital spare parts listed in Attachment W for
use after Substantial Completion which are to be included in the Work and the
Contract Price, as further set forth in Section 3.4B.

“Change Directive” is a written order issued by Owner to Contractor after the
execution of this Agreement in the form of Schedule D-2 that requires Contractor
to commence and execute an addition to, omission from, deletion from, suspension
of, or any other modification or adjustment to the requirements of this
Agreement, the Work or any Changed Criteria.

“Change Order” means a written instrument signed by both Parties after the
execution of this Agreement in the form of Schedule D-1, that authorizes an
addition to, deletion from, suspension of, or any other modification or
adjustment to the requirements of this Agreement, including an addition to,
deletion from or suspension of the Work or any

3

modification or adjustment to any Changed Criteria.  Owner and Contractor are
entitled to a Change Order in accordance with ARTICLE 6.

“Changed Criteria” means the Contract Price, the Key Dates, the Basis of Design,
the Payment Schedule, any of the Minimum Acceptance Criteria or Performance
Guarantees, or any other obligation or potential liability of Contractor under
the Agreement.

“Changes in Law” means any amendment, modification, superseding act, deletion,
addition or change in or to Applicable Law (other than tariffs, quotas, and
duties, which are addressed separately in Attachment FF), including changes to
Tax laws that directly impact the Work (but excluding changes to Tax laws where
such Taxes are based upon Contractor’s revenue, income, profits/losses or cost
of finance)  that occurs and takes effect after the Effective Date.  Change in
Law shall include any official change in the interpretation or application of
Applicable Law (including Applicable Codes and Standards set forth in Applicable
Law) that is not due to an act or omission of Contractor or its Subcontractors
or Sub-subcontractors, provided that such Governmental Instrumentality making
such official change expressly states in writing that it is officially changing
the interpretation or applicable of such Applicable Law.

“Change in U.S. Tariffs or Duties” has the meaning set forth in Attachment FF.

“Collateral Agent” has the meaning set forth in Attachment O.

“Commissioning” means, with respect to the applicable system or subsystem of the
Equipment, all activities required subsequent to achieving Mechanical Completion
of such system or subsystem and prior to RFSU, including the introduction of
inert gas to oxygen free the systems and subsystems, commencement of the drying
out process and tightness tests performed with inert gas at operating pressures,
as further set forth in Attachment A and the performance and completion of the
activities or the Commissioning checklists agreed to by Owner and Contractor.

“Common Systems” means those portions of the Facility that will be utilized by
both Train 1 and Train 2, including, for example, certain utilities,
instruments, control systems and piping.  The applicable Common Systems will be
designed, procured and constructed such that both Train 1 and Train 2 may be
operated simultaneously or individually at the design conditions set forth in
this Agreement.  The Common Systems are set forth in Attachment A.

“Competitors of Contractor” has the meaning set forth in Section 19.2.

“Confidential Information” has the meaning set forth in Section 19.3.

“[***]”.

“Consequential Damages” has the meaning set forth in Section 20.4.

“Construction Equipment” means the equipment, machinery, temporary structures,
scaffolding, materials, tools, supplies and systems, purchased, owned, rented or
leased by

4

Contractor or its Subcontractors or Sub-subcontractors for use in accomplishing
the Work, but not intended for incorporation into the Facility.

“Contract Price” has the meaning set forth in Section 7.1.

“Contractor” has the meaning set forth in the preamble.

“Contractor’s Change Notice” has the meaning set forth in Section 6.2B.

“Contractor Indemnified Parties” means (i) Contractor and its Affiliates, and
(ii) the respective officers, directors, agents, members, shareholders,
invitees, representatives and employees of each Person specified in clause (i)
above.  A “Contractor Indemnified Party” means any one of the Contractor
Indemnified Parties.

“Contractor Permits” has the meaning set forth in Section 3.12A.

“Contractor Representative” means that Person or Persons designated by
Contractor in Section 2.2B, or in a notice to Owner pursuant to the process in
Section 2.2A, who shall have complete authority to act on behalf of Contractor
on all matters pertaining to this Agreement or the Work, including giving
instructions and making changes in the Work, except for any limitations
specified in such notice.

“Contractor’s Confidential Information” has the meaning set forth in
Section 19.2.

“Contractor’s Intellectual Property” has the meaning set forth in Section 10.2.

“[***]”.

“Corrective Work” has the meaning set forth in Section 12.3.

“CPM Schedule” has the meaning set forth in Section 5.4A.

“Cure Period” has the meaning set forth in Section 16.1C.

“Day” means a calendar day.

“Default” has the meaning set forth in Section 16.1A.

“Defect” or “Defective” has the meaning set forth in Section 12.1A.

“Defect Correction Period” means:

(i)       with respect to the Train 1 Work (except for Structural Work described
in clause (iii) below), the period commencing upon Substantial Completion of
Train 1 and ending eighteen (18) months thereafter, as may be extended in
accordance with Sections 12.3C and 12.3D;

(ii)       with respect to the Train 2 Work (except for Structural Work
described in this clause (iii) below), the period commencing upon Substantial

5

Completion of Train 2 and ending eighteen (18) months thereafter, as may be
extended in accordance with Sections 12.3C and 12.3D; and

(iii)      with respect to Structural Work, the period commencing upon
Substantial Completion of Train 2 and ending three (3) years thereafter.

“Delay Liquidated Damages” means one, a combination of, or all of the Train 1
Delay Liquidated Damages, Train 2 Delay Liquidated Damages and RLFC Delay
Liquidated Damages as the context requires.

“DFCD Date for Train 1” has the meaning set forth in Section 13.3B.

“DFCD Date for Train 2” has the meaning set forth in Section 13.3B.

“Disclosing Party” has the meaning set forth in Section 19.3.

“Dispute” has the meaning set forth in Section 18.1.

“Dispute Notice” has the meaning set forth in Section 18.1.

“Drawings” means the graphic and pictorial documents (in written or electronic
format) showing the design, location and dimensions of the Work, generally
including plans, elevations, sections, details, schedules and diagrams, which
are prepared as a part of and during the performance of the Work.

“Early Completion Bonus” means one, some, or all of the bonuses referred to in
Sections 13.3A and 13.3B, as the context requires.

“Early Completion Bonus for Train 1” has the meaning set forth in Section 13.3A.

“Early Completion Bonus for Train 2” has the meaning set forth in Section 13.3A.

“Earned Value” has the meaning set forth in Section 7.2A.

“Earned Value Contract Price Breakdown” has the meaning set forth in Section
7.2A.

“Effective Date” has the meaning set forth in the preamble.

“Equipment” means all equipment, materials, supplies and systems required for
the completion of and incorporation into the Facility.  Equipment excludes
Construction Equipment.  Notwithstanding the foregoing, equipment required to be
engineered, procured or constructed under the Train 3 EPC Agreement shall not be
considered Equipment under this Agreement.

“Expanded Facility” means the additional liquefaction units (beyond those
included in the Facility and the Train 3 Liquefaction Facility) and associated
facilities at the Site, to achieve a total of up to twenty-seven (27) mtpa.

“Facility” has the meaning set forth in the recitals.

6

“FCPA” has the meaning set forth in Section 21.10.

“FERC” means the Federal Energy Regulatory Commission.

“FERC Authorization” means a written authorization issued from time to time by
the FERC director of the Office of Energy Projects, authorizing Owner to
commence construction of the Facility, or take such other actions with respect
to the Facility as set forth therein.

“Final Completion” means that all Work and all other obligations under this
Agreement (except for that Work and obligations that survive the termination or
expiration of this Agreement, including obligations for Warranties, correction
of Defective Work and those covered by Section 11.10), are fully and completely
performed in accordance with the terms of this Agreement, including: (i) the
achievement of Substantial Completion of all Trains; (ii) the achievement of all
Performance Guarantees or payment of all Performance Liquidated Damages due and
owing; (iii) the completion of all Punchlist items; (iv) delivery by Contractor
to Owner of a fully executed Final Lien and Claim Waiver in the form of
Schedules K-5 and K-6; (v) delivery by Contractor to Owner of all documentation
required to be delivered under this Agreement, including Record As-Built
Drawings and Specifications, test reports and the final operations and
maintenance manuals for the Facility; (vi) delivery to Owner, in content and
form reasonably satisfactory to Owner, copies of all required Subcontracts,
written assignments of Subcontractor warranties and a list of the names,
addresses and telephone numbers of the Subcontractors providing such warranties;
(vii) removal from the Site of all of Contractor’s, Subcontractors’ and
Sub-subcontractors’ personnel, supplies, waste, materials, rubbish, Hazardous
Materials, Construction Equipment, and temporary facilities for which Contractor
is responsible under ARTICLE 3, other than as required by Contractor to fulfill
its obligations under Section 12.3A; (viii) delivery by Contractor to Owner of
fully executed Final Lien and Claim Waivers from all Major Subcontractors in the
form in Schedules K-7 and K-8; (ix) if, requested by Owner, fully executed Final
Lien and Claim Waivers from Major Sub-subcontractors in a form substantially
similar to the form in Schedules K-7 and K-8; and (x) delivery by Contractor to
Owner of a Final Completion Certificate in the form of Schedule L-6 and as
required under Section 11.7, which Owner has accepted by signing such
certificate.

“Final Completion Certificate” has the meaning set forth in Section 11.7.

“Final Completion Date” has the meaning set forth in Section 5.3B.

“Final Lien and Claim Waiver” means the waiver and release provided to Owner by
Contractor, Major Subcontractors and Major Sub-subcontractors in accordance with
the requirements of Section 7.3, which shall be in the form of Schedule K-5,
 Schedule K-6,  Schedule K-7, and Schedule K-8.

“Final NTP Deadline” has the meaning set forth in Section 5.2E.3.

“First RLFC Window Period” has the meaning set forth in Section 11.2B.1.

7

“Force Majeure” means catastrophic storms, lightning or floods, tornadoes,
hurricanes, typhoons, cyclones, [***], earthquakes, and other acts of God,
accidents at sea, wars, civil disturbances, Regional Strikes or other similar
national labor actions, terrorist attacks, revolts, insurrections, sabotage,
commercial embargoes, epidemics, fires, explosions, and actions of a
Governmental Instrumentality that were not requested, promoted, or caused by the
affected Party; provided that such act or event (1) delays or renders impossible
the affected Party’s performance of its obligations under this Agreement, (2) is
beyond the reasonable control of the affected Party and not due to its or its
Subcontractor’s fault or negligence, and (3) could not have been prevented or
avoided by the affected Party through the exercise of reasonable due
diligence.  For avoidance of doubt, Force Majeure shall not include any of the
following:  (1) economic hardship, (2) changes in market conditions, (3) late
delivery or failure of Construction Equipment or Equipment unless such late
delivery or failure of Construction Equipment or Equipment was otherwise caused
by Force Majeure, (4) labor availability, strikes, or other similar labor
actions, other than Regional Strikes or other similar national labor actions, or
(5) climatic conditions (including rain, snow, wind, temperature and other
weather conditions), tides, and seasons, regardless of the magnitude, severity,
duration or frequency of such climatic conditions, tides or seasons, but
excluding catastrophic storms or floods, lightning, tornadoes, hurricanes,
typhoons, cyclones, [***] and earthquakes.

“Fourth RLFC Window Period” has the meaning set forth in Section 11.2B.4.

“GAAP” means generally accepted accounting principles in the United States of
America.

“Good Engineering and Construction Practices” or “GECP” means the generally
recognized and accepted reasonable and prudent practices, methods, skill, care,
techniques and standards employed by the international LNG liquefaction and
storage engineering and construction industries with respect to: (i) the
engineering, procurement, construction, pre-commissioning, Commissioning,
testing and start-up of natural gas liquefaction and storage facilities of
similar size and type as the Facility and in accordance with Applicable Codes
and Standards and Applicable Law; (ii) personnel and facility safety and
environmental protection; (iii) efficient scheduling of the Work; and (iv) the
reliability and availability of the Facility under the operating conditions
reasonably expected at the Site, as specified in Attachment A.

“Governmental Instrumentality” means any federal, state or local department,
office, instrumentality, agency, authority, board or commission having
jurisdiction over a Party or any portion of the Work, the Facility or the Site.

“Guarantee Conditions” means the conditions upon which the Minimum Acceptance
Criteria and Performance Guarantees are based and shall be tested, as further
defined in Attachment T.

“Guaranteed Dates” mean the Guaranteed Substantial Completion Dates and the
Final Completion Date.

8

“Guaranteed Substantial Completion Date” or “Guaranteed Substantial Completion
Dates” has the meaning set forth in Section 5.3A.

“Guaranteed Train 1 Substantial Completion Date” has the meaning set forth in
Section 5.3A.1 as may be adjusted by Change Order in accordance with the terms
of this Agreement.

“Guaranteed Train 2 Substantial Completion Date” has the meaning set forth in
Section 5.3A.2 as may be adjusted by Change Order in accordance with the terms
of this Agreement.

“Guarantor” means Bechtel Global Energy, Inc.

“Hazardous Materials” means any substance that under Applicable Law is
considered to be hazardous or toxic or is or may be required to be remediated,
including (i) any petroleum or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls and processes and certain cooling systems
that use chlorofluorocarbons, (ii) any chemicals, materials or substances which
are now or hereafter become defined as or included in the definition of
“hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely
hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic
pollutants,” or any words of similar import pursuant to Applicable Law, or (iii)
any other chemical, material, substance or waste, exposure to which is now or
hereafter prohibited, limited or regulated by any Governmental Instrumentality,
or which may be the subject of liability for damages, costs or remediation.

“Indemnified Party” means any Owner Indemnified Party or Contractor Indemnified
Party, as the context requires.

“Indemnifying Party” means Owner or Contractor, as the context requires.

“Independent Engineer” means the engineer(s) employed by Owner or Lender.

“Initial NTP Deadline” has the meaning set forth in Section 5.2E.

“Interim Lien and Claim Waiver” means the waiver and release provided to Owner
by Contractor, Major Subcontractors and Major Sub-subcontractors in accordance
with the requirements of Section 7.2C, which shall be in the form of Schedule
K-1,  Schedule K-2,  Schedule K-3, and Schedule K-4.

“Investment Grade” means a rating of at least A- by Standard & Poor’s and at
least A3 by Moody’s Investors Service.

“Invoice” means Contractor’s request for an interim payment pursuant to
Section 7.2 and for final payment pursuant to Section 7.3, which invoice shall
be in the form of Schedule I-1 for interim payments and Schedule I-2 for final
payment.

“ISO” means the International Organization for Standardization.

9

“ITB Agreement” means the Invitation to Bid (“ITB”) Services Agreement between
Owner and Contractor dated August 31, 2018.

“Key Dates” means the schedule of dates listed in Schedule E-1 and the
Guaranteed Dates in which Contractor is required to achieve certain stages of
completion of the Facility.

“Key Personnel” or “Key Persons” has the meaning set forth in Section 2.2A.

“Lender” means any entity or entities providing temporary or permanent debt or
equity financing to Owner for the Facility, including interest rate hedge
providers and any entity or entities involved in the refinancing of such debt or
equity financing.

“Letter of Credit” has the meaning set forth in Section 9.2.

“Limited Notice to Proceed” or “LNTP” means any limited notice to proceed issued
in accordance with Schedule H-1 and Section 5.2B, authorizing and requiring
Contractor to proceed with the Work identified in such LNTP.

“LNTP No. 1” has the meaning set forth in Section 5.2A.

“Liquidated Damages” means Performance Liquidated Damages, Delay Liquidated
Damages and RLFC Delay Liquidated Damages.

“LNG” means liquefied natural gas.

“LNG Storage Tanks” means LNG Storage Tank 1 and LNG Storage Tank 2.

“LNG Storage Tank 1” means the first full containment, double walled LNG storage
tank to be constructed, with a working capacity of approximately one hundred and
eighty thousand cubic meters (180,000 m3), as further defined herein.

“LNG Storage Tank 2” means the second full containment, double walled LNG
storage tank to be constructed, with a working capacity of approximately one
hundred and eighty thousand cubic meters (180,000 m3), as further defined
herein.

“LNG Tanker” means any ocean-going vessel used by Owner, a customer of the
Facility or the Train 3 Liquefaction Facility or their designee for the
transportation of LNG.

“Major Subcontract” means (i) any Subcontract having an aggregate value in
excess of [***] U.S. Dollars (U.S. $[***]), (ii) multiple Subcontracts with one
Subcontractor that have an aggregate value in excess of [***] U.S. Dollars (U.S.
$[***]), or (iii) any Subcontract entered into with a Subcontractor for Work
listed in Sections 2 and 3 of Attachment G. The foregoing dollar amount
threshold shall be calculated by adding up the relevant amounts across this
Agreement and the Train 3 EPC Agreement, provided that Contractor is
concurrently performing Work under this Agreement and work under the Train 3 EPC
Agreement.

10

“Major Subcontractor” means any Subcontractor with whom Contractor enters, or
intends to enter, into a Major Subcontract and the Subcontractors listed as such
in Attachment G.

“Major Sub-subcontract” means (i) any Sub-subcontract having an aggregate value
in excess of [***] U.S. Dollars (U.S. $[***]), (ii) multiple Sub-subcontracts
with one Sub-subcontractor that have an aggregate value in excess of [***] U.S.
Dollars (U.S. $[***]), or (iii) any Sub-subcontract entered into with a
Sub-subcontractor for Work listed in Sections 2 and 3 of Attachment G.  The
foregoing dollar amount threshold shall be calculated by adding up the relevant
amounts across this Agreement and the Train 3 EPC Agreement, provided that
Contractor is concurrently performing Work under this Agreement and work under
the Train 3 EPC Agreement.

“Major Sub-subcontractor” means any Sub-subcontractor with whom a Subcontractor
or Sub-subcontractor enters, or intends to enter, into a Major Sub-subcontract
and the Sub-subcontractors listed as such in Attachment G.

“Maximum Cumulative Payment Schedule” has the meaning set forth in Section 7.2E.

“Mechanical Completion Certificate” has the meaning set forth in Section 11.1A.

“Mechanical Completion” means, with respect to (a) the applicable system or
subsystem of the Equipment or (b) a Train, that, with the exception of Punchlist
items, all of the following have occurred: (i) Contractor has completed all
design, procurement, fabrication, assembly, erection, installation and
pre-commissioning of all Equipment (including all systems and components of
Equipment, such as all operating, protection, fire, safety and other related
systems required or necessary prior to start-up) for such applicable system or
subsystem of the Equipment or a Train to ensure that all such Equipment or Train
was correctly fabricated, assembled, erected, installed, tested and
pre-commissioned and is capable of being operated safely and reliably within the
requirements and specifications contained in this Agreement, all as set forth in
greater detail in Attachment A and the Mechanical Completion checklists agreed
by Owner and Contractor in accordance with Section 11.1A; (ii) the applicable
system, subsystem of Equipment or Trains ready for the commencement of
Commissioning; (iii) Contractor and Owner have agreed upon an initial Punchlist
of items as set forth in Section 11.6; (iv) Contractor has delivered to Owner a
Mechanical Completion Certificate for the applicable system or subsystem or
Train in the form of Schedule L-1 and Owner has accepted such certificate by
signing such certificate; and (v) performance by Contractor of all other
obligations required under this Agreement for Mechanical Completion.

“Minimum Acceptance Criteria” or “MAC” means the minimum acceptance criteria
specified in Attachment T.

“Minimum Acceptance Criteria Correction Period” has the meaning set forth in
Section 11.5B.

“Minimum Acceptance Criteria Correction Plan” has the meaning set forth in
Section 11.5B.

11

“Minimum LNTP No. 1 Performance Period” has the meaning set forth in Section
5.2F.

“Month” means a Gregorian calendar month; “month” means any period of thirty
(30) consecutive Days.

“Monthly” means an event occurring, or an action taken, once every Month.

“Monthly Progress Reports” has the meaning set forth in Section 3.19A.4.

“Monthly Updated CPM Schedule” has the meaning set forth in Section 5.4C.

“mtpa” has the meaning set forth in the recitals.

“Notice to Proceed” or “NTP” means the full notice to proceed issued in
accordance with Schedule H-2 and Section 5.2D, authorizing and requiring
Contractor to commence the performance of the entire Work.

“OECD” has the meaning set forth in Section 21.10.

“OSHA” means the United States Department of Labor’s Occupational Safety and
Health Administration.

“Owner” has the meaning set forth in the preamble hereto.

“Owner-Furnished Items” has the meaning set forth in Section 4.6B.

“Owner Indemnified Parties” means (i) Owner, Owner’s Lenders, Owner’s limited or
general partners,  Owner’s members, Owner’s joint venturers and each of their
respective Affiliates, and (ii) the respective officers, directors, agents,
members, shareholders, invitees, representatives and employees of each Person
specified in clause (i) above.

“Owner Indemnified Party” means any one of the Owner Indemnified Parties.

“Owner Representative” means that Person or Persons designated by Owner in a
notice to Contractor who shall have complete authority to act on behalf of Owner
on all matters pertaining to the Work, including giving instructions and making
changes in the Work, except for any limitations specified in such notice.

“Owner’s Change Request” means the form of Owner’s request for a proposed Change
Order attached hereto as Schedule D-3.

“Owner’s Confidential Information” has the meaning set forth in Section 19.1.

“Owner/TL CAs” has the meaning set forth in Section 19.2.

“Parent Guarantee” has the meaning set forth in Section 21.17.

“Party” or “Parties” has the meaning set forth in the preamble.

12

“Payment Milestone” means a designated portion of the Work as shown in the
Payment Schedule.

“Payment Schedule” means the schedule set forth in Attachment C, which sets out
the payments to be paid based on achievement of Earned Value and Payment
Milestones.

“Performance Guarantee(s)” means the performance guarantees specified in
Attachment T.

“Performance Liquidated Damages” means the liquidated damages associated with
the failure to achieve one or more of the Performance Guarantees as specified in
Attachment T.

“Performance Tests” means those tests performed by Contractor to determine
whether the Facility meets the Performance Guarantees and Minimum Acceptance
Criteria, which tests shall be set forth in Attachment S and, to the extent not
specified therein, as developed in accordance with Section 11.3.

“Permit” means any valid waiver, certificate, approval, consent, license,
exemption, variance, franchise, permit, authorization or similar order or
authorization from any Governmental Instrumentality required to be obtained or
maintained in connection with the Facility, the Site or the Work.

“Person” means any individual, company, joint venture, corporation, partnership,
association, joint stock company, limited liability company, trust, estate,
unincorporated organization, Governmental Instrumentality or other entity having
legal capacity.

“Port Indemnified Parties” means (i) Brownsville Navigation District of Cameron
County and its Affiliates, successors and assigns and (ii) the respective
directors, officers, shareholders and employees of each entity or person
specified in clause (i) above.  A “Port Indemnified Party” means any one of the
Port Indemnified Parties.

“Potential Lender” has the meaning set forth in Section 21.21.

“Pre-Existing Hazardous Materials” means Hazardous Materials on the Site that
are not brought on to the Site by or on behalf of Contractor or any of its
Subcontractors or Sub-subcontractors.

“Pre-Existing Owner Proprietary Work Product” has the meaning set forth in
Section 10.4.

“Primavera Project Planner” has the meaning set forth in Section 5.4A.

“Progress As-Built Drawings and Specifications” means Drawings and
Specifications that show all current “as-built” conditions, as required under
Attachment B.

“Project” means the engineering, design, procurement, manufacturing,
fabrication, assembly, transportation and delivery of Equipment, construction,
pre-commissioning,

13

Commissioning, testing and start-up of the Facility and all other Work required
to be performed under this Agreement.

“Punchlist” means those finishing items required to complete the Work, the
completion of which shall not interrupt, disrupt or interfere with the safe and
reliable operation or use of all or any part of the Facility as contemplated by
this Agreement, as more fully described in Section 11.6 of this Agreement.

“[***]”.

“Quality Plan” has the meaning set forth in Section 3.18.

“Ready for Start Up” or “RFSU” means, with respect to each Train, that all of
the following have occurred: (i) Contractor has achieved Mechanical Completion
of such Train, including Mechanical Completion of all systems and subsystems of
Equipment for such Train; (ii) all activities necessary to support the
introduction of hydrocarbons, including all utility and process utility,
safeguarding and shutdown systems have been pre-commissioned, commissioned and
integrity verified; (iii) Commissioning is complete, cool down can commence for
such Train, and such Train is ready for startup and acceptance of feed gas; (iv)
Equipment vendor representatives and other specialist Subcontractors required to
support RFSU and early operations are mobilized at the Site; (v) Contractor has
delivered to Owner a RFSU Certificate in the form of Schedule L-3 and Owner has
accepted such certificate by signing such certificate; and (vi) performance by
Contractor of all other obligations required under this Agreement for RFSU of
such Train.

“Ready to Load First Cargo” or “RLFC” means that all of the following have
occurred with respect to the applicable Train: (i) Contractor has achieved and
maintained RFSU for such Train; (ii) the applicable LNG Storage Tank(s)
designated to be completed as part of such Train have been successfully cooled
down and is operating normally with LNG stored in such tank(s); (iii) such Train
has liquefied natural gas into LNG meeting all specifications and requirements
of this Agreement (other than the Minimum Acceptance Criteria and Performance
Guarantees) and successfully transferred and stored such LNG into the applicable
LNG Storage Tank(s); (iv) the LNG Storage Tank(s) and all LNG loading and
unloading lines (and equipment and systems related thereto) necessary for
transfer of LNG from such LNG Storage Tank(s) to the loading dock have been
cooled down and filled with LNG while remaining at cryogenic temperatures via
circulation to the LNG berth and are ready for transfer of LNG to an LNG Tanker
and for return of vapor and boil-off gas to the LNG tanks, and the loading dock
or berth have successfully passed and Owner has approved the pre-LNG arrived
berth readiness review; (v) LNG is ready for delivery to, and capable of being
delivered to and loaded into, an LNG Tanker via the loading dock; (vi)
Contractor has delivered to Owner an RLFC Certificate for such Train in the form
of Schedule L-4 and Owner has accepted such certificate by signing such

14

certificate; and (vii) performance by Contractor of all other obligations
required under this Agreement for RLFC of such Train.

“Receiving Party” has the meaning set forth in Section 19.3.

“Record As-Built Drawings and Specifications” means final, record Drawings and
Specifications of the Facility showing the “as-built” conditions of the
completed Facility, as required under Attachment B.

“Recovery Schedule” has the meaning set forth in Section 5.5.

“Regional Strikes” means strikes or similar labor actions by craft construction
labor occurring in the entire Gulf coast region in Texas and Louisiana,
including the Site.

“Rely Upon Information” means that certain information provided by Owner, which
is expressly identified in Attachment BB as being Rely Upon Information.

“RFSU Certificate” has the meaning set forth in Section 11.1B.

“RLFC Certificate” has the meaning set forth in Section 11.2A.

“RLFC Delay Liquidated Damages” has the meaning set forth in Section 11.2C.2.

“RLFC Window Period” has the meaning set forth in Section 11.2B.

“Scope of Work” means the description of Work to be performed by Contractor as
set forth in this Agreement, including Attachment A.

“Second NTP Deadline” has the meaning set forth in Section 5.2E.1.

“Second RLFC Window Period” has the meaning set forth in Section 11.2B.2.

“Shiploading Performance Test” or “Shiploading Performance Testing” shall have
the meaning set forth Attachment S.

“Site” means those parcels of land where the Facility shall be located, as shown
in greater detail in Attachment Z.  For the avoidance of doubt, the Site does
not include any restricted areas designated in Attachment Z.

“Soils Data” has the meaning set forth in Section 2.5B.

“Specifications” means those documents consisting of the written requirements
for Equipment, standards and workmanship for the Work and performance of related
services, which are prepared as a part of and during the performance of the
Work.

“Structural Work” means any and all engineering, procurement or construction of
the Facility or components thereof relating to the structural capacity,
integrity or suitability of any load bearing elements or underlying civil work
for any portion of the Facility.

15

“Subcontract” means an agreement by Contractor with a Subcontractor for the
performance of any portion of the Work.

“Subcontractor” means any Person (other than an Affiliate of Contractor),
including an Equipment supplier or vendor, who has a direct contract with
Contractor to manufacture or supply Equipment which is a portion of the Work, to
lease Construction Equipment to Contractor in connection with the Work, to
perform a portion of the Work or to otherwise furnish labor or materials.

“Subcontractor Proprietary Information” has the meaning set forth in Section
19.3.

“Substantial Completion” means that all of the following have occurred with
respect to a Train: (i) Mechanical Completion of such Train, including
Mechanical Completion of all systems and subsystems of Equipment of such Train;
(ii) RFSU has been achieved for such Train; (iii) RLFC has been achieved for
such Train; (iv) all Minimum Acceptance Criteria have been achieved; (v) in the
case that all Performance Guarantees have not been achieved, Owner has accepted
(such acceptance not to be unreasonably withheld)  Contractor’s corrective work
plan, and Contractor has turned over the Train pursuant to Section 11.5A; (vi)
Contractor and Owner have agreed upon a list of Punchlist items as set forth in
Section 11.6; (vii) any Delay Liquidated Damages due and owing have been paid to
Owner in accordance with Section 13.2; (viii) the entire Work related to such
Train (including training and the delivery of all documentation, manuals and
instruction books necessary for safe and proper operation) has been completed,
except for Punchlist items, in accordance with the requirements and
Specifications of this Agreement; (ix) Contractor has delivered to Owner all
Capital Spare Parts for such Train in accordance with Section 3.4B; (x)
Contractor has delivered to Owner the applicable Substantial Completion
Certificate in the form of Schedule L-5 and as required under Section 11.3 and
Owner has accepted such certificate by signing such certificate; (xi) such Train
is available for commercial operation in accordance with the requirements of
this Agreement, and with respect to Substantial Completion of Train 2, Train 2
has been integrated with Train 1; (xii) Contractor has obtained all Permits
required to be obtained by Contractor under this Agreement; and (xiii)
Contractor has delivered to Owner a fully executed Interim Lien and Claim Waiver
in the form of Schedules K-1 and K-2, fully executed Interim Lien and Claim
Waivers from all Major Subcontractors in the form of Schedules K-3 and K-4 and,
if requested by Owner, fully executed Interim Lien and Claim Waivers from all
Major Sub-subcontractors substantially in the form of Schedules K-3 and K-4,
covering all Work up to the date of Substantial Completion.

“Substantial Completion Certificate” has the meaning set forth in Section 11.3.

“Sub-subcontract” means any agreement by a Subcontractor with a
Sub-subcontractor or by a Sub-subcontractor with another Sub-subcontractor for
the performance of any portion of the Work.

“Sub-subcontractor” means any Person (other than an Affiliate of Contractor),
including an Equipment supplier or vendor, who has a direct or indirect contract
with a Subcontractor or another Sub-subcontractor to manufacture or supply
Equipment which comprises a

16

portion of the Work, to perform a portion of the Work or to otherwise furnish
labor, materials or equipment (including Equipment).

“Taxes” means any and all taxes, assessments, levies, tariffs, duties, fees,
charges and withholdings of any kind or nature whatsoever and howsoever
described, including sales and use taxes (excluding any Texas Sales and Use Tax
on Equipment), value-added, sales, use, gross receipts, license, payroll,
federal, state, local or foreign income, environmental, profits, premium,
franchise, property, excise, capital stock, import, stamp, transfer, employment,
occupation, generation, privilege, utility, regulatory, energy, consumption,
lease, filing, recording and activity taxes, levies, fees, charges, imposts and
withholding, together with any and all penalties, interest and additions
thereto.

“Technology Licensor” means any one of the following technology licensors that
are licensing its technology to Owner, either directly with Owner or as a
Subcontractor, to be incorporated in the Work: APCI, BASF and [***].

“Texas Sales and Use Tax” means Texas state and applicable local sales and use
taxes.

“Third Party” means any Person other than Owner Indemnified Parties and
Contractor Indemnified Parties.

“Third Party Intellectual Property” has the meaning set forth in Section 10.2.

“Third RLFC Window Period” has the meaning set forth in Section 11.2B.3.

“Total Reimbursement Amount” has the meaning set forth in Section 7.1A.

“Train” means one or both of Train 1 or Train 2, as the context requires.

“Train 1” means the first part of the Work to be designed, procured,
constructed, pre-commissioned, Commissioned, started up and tested for the
Facility (as further defined in Attachment A).

“Train 1 Delay Liquidated Damages” has the meaning set forth in Section 13.1A.

“Train 1 Work” means the Work required to be performed pursuant to this
Agreement for Train 1.

“Train 2” means the second part of the Work to be designed, procured,
constructed, pre-commissioned, Commissioned, started up and tested for the
Facility (as further defined in Attachment A).

“Train 2 Delay Liquidated Damages” has the meaning set forth in Section 13.1B.

“Train 2 Work” means the Work required to be performed pursuant to this
Agreement for Train 2.

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“Train 3” means the work to be designed, procured, constructed,
pre-commissioned, commissioned, started up and tested as further described in
the Train 3 EPC Agreement.

“Train 3 EPC Agreement” means the engineering, procurement and construction
agreement between Owner and Contractor dated May 24th, 2019 for the engineering,
procurement, construction, commissioning, start-up and testing of Train 3, to be
located at the Site.

“Train 3 Liquefaction Facility” has the same meaning as Train 3.

“UK Bribery Act” has the meaning set forth in Section 21.10.

“Unforeseen Subsurface Conditions” means any unforeseen (i) substantial voids,
seismic faults or caverns, (ii) substantial man-made or natural subsurface
obstructions, or (iii) fossils, antiquities or other things of archeological
interest, that (a) are not identified in any Soils Data or any other documents
provided to Contractor by Owner and (b) were not discovered by Contractor or any
of its Subcontractors or Sub-subcontractors, acting in accordance with GECP,
from inspections and investigations performed by Contractor or any of its
Subcontractors or Sub-subcontractors prior to the Effective Date.

“U.S. Dollars” or “U.S.$” means the legal tender of the United States of
America.

“U.S. Tariffs and Duties”  means the following U.S. import laws, regulations,
tariffs, duties and restrictions: Section 232 of the Trade Expansion Act of 1962
(as amended), Section 301 of the Trade Act of 1974 (as amended), and Section 201
of the Trade Act of 1974 (as amended).

“Warranty” or “Warranties” has the meaning set forth in Section 12.1A.

“Weekly Progress Report” has the meaning set forth in Section 3.19A.3.

“Windstorms” has the meaning set forth in Section 8.2A.

“Work” means all obligations, duties and responsibilities required of Contractor
pursuant to this Agreement, including all Equipment, Construction Equipment,
spare parts, procurement, engineering, design, fabrication, erection,
installation, manufacture, delivery, transportation, storage, construction,
workmanship, labor, pre-commissioning, Commissioning, inspection, training,
Performance Tests, other tests, start-up and any other services, work or things
furnished or used or required to be furnished or used, by Contractor in the
performance of this Agreement, including that set forth in Attachment A and
Section 3.1A and any Corrective Work.  For the avoidance of doubt, the Work
shall include the Train 1 Work and the Train 2 Work.

“Work Product” has the meaning set forth in Section 10.1.

1.2         Interpretation.  The meanings specified in this ARTICLE 1 are
applicable to both the singular and plural.  As used in this Agreement, the
terms “herein,” “herewith,” “hereunder” and “hereof” are references to this
Agreement taken as a whole, and the terms “include,”

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“includes” and “including” mean “including, without limitation,” or variant
thereof.  Unless expressly stated otherwise, reference in this Agreement to an
Article or Section shall be a reference to an Article or Section contained in
this Agreement (and not in any Attachments or Schedules to this Agreement) and
reference in this Agreement to an Attachment or Schedule shall be a reference to
an Attachment or Schedule attached to this Agreement.

ARTICLE 2

RELATIONSHIP OF OWNER, CONTRACTOR AND SUBCONTRACTORS

2.1         Status of Contractor.  The relationship of Contractor to Owner shall
be that of an independent contractor.  Any provisions of this Agreement which
may appear to give Owner or the Owner Representative the right to direct or
control Contractor as to details of performing the Work, or to exercise any
measure of control over the Work, shall be deemed to mean that Contractor shall
follow the desires of Owner or the Owner Representative in the results of the
Work only and not in the means by which the Work is to be accomplished, and
Contractor shall have the complete right, obligation and authoritative control
over the Work as to the manner, means or details as to how to perform the
Work.  Nothing herein shall be interpreted to create a master-servant or
principal-agent relationship between Contractor, or any of its Subcontractors or
Sub-subcontractors, and Owner.  Nevertheless, Contractor shall strictly comply
with all provisions, terms and conditions of this Agreement, and the fact that
Contractor is an independent contractor does not relieve it from its
responsibility to fully, completely, timely and safely perform the Work in
strict compliance with this Agreement.

2.2         Key Personnel, Organization Chart and Contractor Representative.

A.        Key Personnel and Organization Chart.  Attachment F sets forth
Contractor’s organizational chart to be implemented for the Work and also
contains a list of key personnel (“Key Personnel” or “Key Persons”) from
Contractor’s organization who will be assigned to the Work.  Key Personnel
shall, unless otherwise expressly stated in Attachment F, be devoted full-time
to the Work for the entire duration of the Project, and Key Personnel shall not
be removed or reassigned without Owner’s prior approval (such approval not to be
unreasonably withheld).  [***].  All requests for the substitution of Key
Personnel shall include a detailed explanation and reason for the request and
the résumés of professional education and experience for a minimum of two (2)
candidates with the requisite qualifications and experience.  Should Owner
approve of the replacement of a Key Person, not to be unreasonably withheld,
Contractor shall allow for an overlap of three (3) weeks during which both the
Key Person to be replaced and the Owner-approved new Key Person shall work
together full time.  The additional cost of any replacement of such Key
Personnel and overlap time shall be entirely at Contractor’s expense.  Owner has
the right, but not the obligation, to require Contractor to remove or cause to
be removed Key Persons who are not, in Owner’s reasonable judgment, using GECP
in the performance of the portion of the Work assigned to such Key Persons.

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B.        Contractor Representative.  Contractor designates [***] as the
Contractor Representative.  Notification of a proposed change in Contractor
Representative shall be provided in advance, in writing, to Owner.  The
Contractor Representative is a Key Person.

2.3         Subcontractors and Sub-subcontractors.  Owner acknowledges and
agrees that Contractor intends to have portions of the Work accomplished by
Subcontractors pursuant to written Subcontracts between Contractor and such
Subcontractors and by Contractor’s Affiliates, and that such Subcontractors may
have certain portions of the Work performed by Sub-subcontractors.  All
Subcontractors and Sub-subcontractors shall be reputable, qualified firms with
an established record of successful performance in their respective trades
performing identical or substantially similar work.  Subject to Section 2.4E,
Contractor shall use commercially reasonable efforts to require that all
contracts with Subcontractors and Sub-subcontractors be consistent with the
terms or provisions of this Agreement.  EXCEPT AS STATED IN SECTION 20.4, NO
SUBCONTRACTOR OR SUB-SUBCONTRACTOR IS INTENDED TO BE OR SHALL BE DEEMED A
THIRD-PARTY BENEFICIARY OF THIS AGREEMENT.  Contractor shall be fully
responsible to Owner for the acts and omissions of Subcontractors and
Sub-subcontractors and of its Affiliates performing any Work and of Persons
directly or indirectly engaged by any of them, as Contractor is for the acts or
omissions of Persons directly or indirectly engaged by Contractor.  The work of
any Subcontractor or Sub-subcontractor and Contractor’s Affiliates shall be
subject to inspection by Owner, Lender, or Independent Engineer to the same
extent as the Work of Contractor.  All Subcontractors and Sub-subcontractors and
Contractor’s Affiliates and their respective personnel performing Work on Site
are to be instructed by Contractor in the terms and requirements of the safety
and environmental protection policies and procedures established under Section
3.10 and shall be expected to comply with such policies and procedures with
respect to Work performed on Site.  In the event that any personnel do not
adhere to such policies and procedures, such personnel shall be removed by
Contractor.  In no event shall Contractor be entitled to any adjustment of the
Contract Price or Key Dates as a result of compliance with such policies and
procedures or any removal of personnel necessitated by non-compliance.  Nothing
contained herein shall (i) create any contractual relationship between any
Subcontractor and Owner, or between any Sub-subcontractor and Owner, or between
any of Contractor’s Affiliates performing Work and Owner or (ii) obligate Owner
to pay or cause the payment of any amounts to any Subcontractor or
Sub-subcontractor or any of Contractor’s Affiliates.  For purposes of Texas
Sales and Use Tax, all Subcontracts and Sub-subcontracts will be separated
contracts pursuant to Tex. Tax Code § 151.056(b) and 34 Tex. Admin. Code Rule §
3.291(a)(13).

2.4         Subcontracts and Sub-subcontracts.

A.        Approved List.  Section 1 and Section 3 of Attachment G set forth the
lists of Subcontractors and Sub-subcontractors that Contractor and Owner have
agreed are approved Subcontractors and Sub-subcontractors for the performance of
that portion of the Work specified in Section 1 and Section 3 of
Attachment G.  Section 2 of Attachment G sets forth a list of Subcontractors and
Sub-subcontractors that Contractor has agreed to subcontract with for that
portion of the Work specified in Section 2 of Attachment G.  Approval by Owner
of any Subcontractors or Sub-subcontractors does not relieve Contractor of any
responsibilities under this Agreement.

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B.        Additional Proposed Major Subcontractors and Major
Sub-subcontractors.  In the event that Contractor is considering the selection
of a Subcontractor or Sub-subcontractor not listed on Attachment G that would
qualify as a Major Subcontractor or Major Sub-subcontractor, Contractor shall
(i) notify Owner of its proposed Major Subcontractor or Major Sub-subcontractor
as soon as practicable during the selection process and furnish to Owner all
information reasonably requested by Owner with respect to Contractor’s selection
criteria (including information regarding the Major Subcontractor or Major
Sub-subcontractor’s qualifications, safety performance and the agreed scope of
work but excluding Major Subcontractor’s or Major Sub-subcontractor’s
(i)  pricing (other than unit rates), discount or credit information, payment
terms, payment schedules and retention and (ii) performance security, liquidated
damages and limitations on liability), and (ii) notify Owner no less than ten
(10) Business Days prior to the execution of a Major Subcontract with a Major
Subcontractor or Major Sub-subcontract with a Major Sub-subcontractor not listed
on Attachment G.  Owner shall have the discretion, not to be unreasonably
exercised, to reject any proposed Major Subcontractor or Major Sub-subcontractor
not listed on Attachment G for a Major Subcontract or Major Sub-subcontract for
failing to meet the standard set out in Section 2.3. Contractor shall not enter
into any Major Subcontract with a proposed Major Subcontractor or Major
Sub-subcontract with a Major Sub-subcontractor that is rejected by Owner in
accordance with the preceding sentence.  Owner shall undertake in good faith to
review the information provided by Contractor pursuant to this Section 2.4B
expeditiously and shall notify Contractor of its decision to accept or reject a
proposed Major Subcontractor or Major Sub-subcontractor as soon as practicable
after such decision is made.  Failure of Owner to respond within ten (10) Days
after Owner’s receipt of Contractor’s notice of a proposed Major Subcontractor
or Major Sub-subcontractor shall be deemed to be an acceptance of such Major
Subcontractor or Major Sub-subcontractor.

C.        Other Additional Proposed Subcontractors and Sub-subcontractors.  For
any Subcontractor or Sub-subcontractor performing Work on Site and not otherwise
covered by Sections 2.4A or 2.4B, Contractor shall, within fourteen (14) Days
after execution of a Subcontract with such Subcontractor or Sub-subcontractor,
notify Owner in writing of the selection of such Subcontractor or
Sub-subcontractor and inform Owner generally what portion of the Work such
Subcontractor or Sub-subcontractor is performing.

D.        Delivery of Major Subcontracts and Major Sub-subcontracts.  Contractor
shall furnish Owner with a redacted copy of all Major Subcontracts and Major
Sub-subcontracts (excluding only provisions regarding pricing, discount or
credit information, payment terms, payment schedules, retention, performance
security, liquidated damages and limitations on liability, except that such
exclusions shall not apply to Major Subcontracts or Major Sub-subcontracts with
APCI, GE and ABB within ten (10) Days after execution thereof and, within ten
(10) Days after Owner’s request, furnish Owner with a price redacted copy of any
other Subcontracts or Sub-subcontracts.  Notwithstanding the above, Owner’s
receipt and review (or non-review) of any Subcontracts or Sub-subcontracts shall
not relieve the Contractor of any obligations under this Agreement nor shall
such action constitute a waiver of any right or duty afforded Owner under this
Agreement or approval of or acquiescence in a breach hereunder.

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E.        Terms of Major Subcontracts and Major Sub-subcontracts.  In addition
to the requirements in Section 2.3 and without in any way relieving Contractor
of its full responsibility to Owner for the acts and omissions of Subcontractors
and Sub-subcontractors, Contractor shall:

1.        include in each Major Subcontract and each Major Sub-subcontract
provisions allowing each Major Subcontract and Major Sub-subcontract to be
assigned to Owner, at Owner’s sole discretion, without the consent of the
respective Major Subcontractor or Major Sub-subcontractor; provided that with
respect to APCI, [***] and BASF, such assignment shall be subject to APCI, [***]
and BASF’s consent (as applicable), but such consent shall not be withheld
unless the assignee is a competitor of APCI, [***] or BASF (as applicable) for
such licensed technology or the assignment would cause a violation of Applicable
Law; and

2.        use reasonable commercial efforts to include in each Major Subcontract
and Major Sub-subcontract a provision requiring each such Major Subcontractor
and Major Sub-subcontractor to comply with all requirements and obligations of
Contractor to Owner under this Agreement, as such requirements and obligations
are applicable to the performance of the Work under their respective Major
Subcontract or Major Sub-subcontract, provided however, notwithstanding the
foregoing, Contractor shall, at a minimum, include in each Major Subcontract and
Major Sub-subcontract, to the extent such requirements and obligations are
applicable to the performance of the Work under their respective Major
Subcontract or Major Sub-subcontract, the following:

(i)        for all Major Subcontractors and Major Sub-subcontractors, provisions
substantially similar to: ARTICLE 10, ARTICLE 17, and ARTICLE 19; Sections 2.3,
2.5C, 3.3D, 3.13, 3.16, 3.18, 8.1, 9.1 (and Attachment O), 12.1C, 12.2A, 16.1E,
16.3, the Interim Lien and Claim Waiver requirements in Section 7.2 and the
Final Lien and Claim Waiver requirements in Section 7.3; and

(ii)         for all Major Subcontractors and Major Sub-subcontractors
performing Work at the Site, provisions substantially similar to: Sections 3.6,
3.7, 3.8, 3.10, 3.17, 3.24, 3.25, 3.27 in addition to the requirements and
obligations set forth in Section 2.4E.2(i).

2.5         Contractor Acknowledgements.

A.        This Agreement.  Prior to the execution of this Agreement, Contractor
or Contractor’s Affiliate performed engineering, cost estimating and related
services and developed and provided, or verified, the information that forms the
Scope of Work and Basis of Design in Attachment A, which was performed or
verified pursuant to the ITB Agreement.  Subject to Section 4.6A, Contractor
hereby agrees and acknowledges that the Scope of Work and Basis of Design are
accurate, adequate and sufficiently complete for Contractor to engineer,
procure, construct, pre-commission, commission, start-up and test a fully
operational natural gas liquefaction facility, export terminal and associated
facilities

22

for the Contract Price and in accordance with all requirements of this
Agreement, including Applicable Codes and Standards, Applicable Law, and the
Warranties, Minimum Acceptance Criteria and Performance
Guarantees.  Accordingly, except for Section 4.6A, Contractor hereby (i) agrees
that it shall have no right to claim or seek an increase in the Contract Price
or an adjustment to the Key Dates with respect to any incomplete, inaccurate or
inadequate information or requirements that may be contained or referenced in
Attachment A, and (ii) waives and releases Owner from and against such
claims.  Owner makes no guaranty or warranty, express or implied, as to the
accuracy, adequacy or completeness of any such information that is contained or
referenced in Attachment A.

B.        Conditions of the Site.

1.        In addition to Section 2.5A, Contractor further agrees and
acknowledges that it has made all investigations and inspections that it deems
necessary to perform the Work in accordance with this Agreement, has conducted a
review of the legal description of the Site, and understands the climate,
terrain, topography, subsurface conditions and other difficulties that it may
encounter in performing the Work in accordance with this Agreement.  Contractor
warrants that it has the experience, resources, qualifications and capabilities
to perform the Work in accordance with this Agreement.  Except as provided in
Section 2.5B.2 or for Force Majeure, Contractor, as between Contractor and
Owner, assumes all risks related to, and waives any right to claim an adjustment
in the Contract Price or the Key Dates as a result of any conditions at the Site
or at any other location where the Work is performed, including river levels,
topography and subsurface soil conditions.  Contractor agrees and acknowledges
that: (a) any information provided by Owner to Contractor prior to the Effective
Date of this Agreement relating to subsurface soil conditions or topographical
conditions at the Site (the “Soils Data”) was provided to Contractor for its
convenience only; (b) the Soils Data shall not be considered a warranty or
guarantee, express or implied, of subsurface conditions or topographical
conditions existing at the Site; (c) the Soils Data does not constitute a part
of this Agreement; and (d) Owner assumes no responsibility for the accuracy and
sufficiency of the data contained within the Soils Data nor for Contractor’s
interpretation of such data, including the projection of soil-bearing values;
rock profiles; soil stability; or the presence, level and extent of underground
water.

2.        Contractor, as between Contractor and Owner, assumes all risks related
to, and waives any right to claim an adjustment for, any and all subsurface
conditions of whatever nature or condition, except as expressly provided in this
Section 2.5B.2:

(i)        Unforeseen Subsurface Conditions.  If Contractor encounters
Unforeseen Subsurface Conditions in the performance of the Work that adversely
affects Contractor’s actual costs (which costs shall be adequately documented
and supported by Contractor) of performance of the Work or ability to perform
any material requirement of this Agreement, Contractor shall be entitled to a
Change Order adjusting the Contract Price and/or the Key Dates, as applicable,
pursuant to Sections 6.2A.5 and 6.8,

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provided that Contractor complies with the notice and Change Order request
requirements set forth in Sections 6.2 and 6.5, uses reasonable efforts not to
disturb such Unforeseen Subsurface Conditions prior to Owner’s investigation
and, with respect to claims for costs for delay or schedule relief for delay,
satisfies the requirements of Section 6.8.  Notwithstanding the foregoing,
Contractor is responsible for the proper interpretation of the Soils Data,
including in accordance with GECP.

C.        Applicable Law and Applicable Codes and Standards.  Contractor has
investigated to its satisfaction Applicable Law and Applicable Codes and
Standards and warrants that it can perform the Work at the Contract Price and
within the Key Dates in accordance with Applicable Law and Applicable Codes and
Standards.  Contractor shall perform the Work in accordance with Applicable Law
and Applicable Codes and Standards, whether or not such Applicable Law or
Applicable Codes and Standards came into effect before the Effective Date or
during the performance of the Work; provided, however, Contractor shall be
entitled to a Change Order for Changes in Law to the extent allowed under
Section 6.2A.6.  Except for any Changes in Law for which Contractor is entitled
to a Change Order under Section 6.2A.6, Contractor hereby waives any right to
make any claim for adjustment of the Contract Price or the Key Dates in relation
to any change in Applicable Law or Applicable Codes and
Standards.  Notwithstanding anything provided in this Agreement, the Parties
agree that Contractor’s sole and exclusive remedy for any change in tariffs,
quotas, or duties is set forth in Attachment FF.

D.        Owner’s Consultants.  Owner may designate consultants that are not an
employee of Owner to provide certain administrative, management, planning and
other services as it deems appropriate to assist with Owner’s rights, remedies
and obligations under this Agreement.  Such consultants or professionals may, to
the extent specified in this Agreement between Owner and such consultants or
professionals, act for or on behalf of Owner with respect to Owner’s rights,
remedies and obligations under this Agreement, which may include receiving and
reviewing certain deliverables and submittals from Contractor, inspecting
certain portions of the Work and receiving Contractor’s Confidential Information
to the extent necessary to perform such services (having first been bound to an
obligation of confidentiality in accordance with this Agreement) to the extent
Owner is permitted to do the same under this Agreement, as further specified by
Owner to Contractor in writing.  Under no circumstances shall such consultants
or professionals have any authority to amend this Agreement, sign any Change
Order or issue any Change Directive. In no event will Owner retain as a
consultant on this Project any Person that is a Competitor of Contractor.

ARTICLE 3

CONTRACTOR’S RESPONSIBILITIES

3.1         Scope of Work.

A.        Generally.  Subject to Section 3.1B, the Work shall be performed on a
fixed price turnkey basis and shall include all engineering, procurement,
construction, pre-commissioning, Commissioning, start-up and testing of the
Facility, all Equipment,

24

Construction Equipment, spare parts, labor, workmanship, inspection,
manufacture, fabrication, installation, design, delivery, transportation,
storage, training of Owner’s operation personnel and all other items or tasks
that are set forth in Attachment A, or otherwise required to achieve Mechanical
Completion, RFSU, RLFC, and Substantial Completion of each Train and Final
Completion of the Facility in accordance with the requirements of this
Agreement, including achieving the Minimum Acceptance Criteria and Performance
Guarantees.  Contractor shall be required to integrate and use such Owner’s
personnel in Contractor’s pre-commissioning, Commissioning, testing and start-up
efforts.  Contractor shall perform the Work in accordance with GECP, Applicable
Law, Applicable Codes and Standards, and all other terms and provisions of this
Agreement, with the explicit understanding that the Facility will operate as a
natural gas liquefaction facility and export terminal meeting all requirements
and specifications of this Agreement, including Applicable Codes and Standards,
Applicable Law, Warranties, Minimum Acceptance Criteria and Performance
Guarantees.  It is understood and agreed that the Work shall include any
incidental work that can reasonably be inferred as required and necessary to
complete the Facility in accordance with GECP, Applicable Law, Applicable Codes
and Standards, and all other terms and provisions of this Agreement, excluding
only those items which Owner has specifically agreed to provide under the terms
of this Agreement.  Without limiting the generality of the foregoing, the Work
is more specifically described in Attachment A.

B.        Exception to Scope of Work.  Contractor shall not be responsible for
providing those items identified in ARTICLE 4 as Owner’s obligations.

3.2        Specific Obligations.  Without limiting the generality of Section 3.1
or the requirements of any other provision of this Agreement, Contractor shall:

A.        procure, supply, transport, handle, properly store, assemble, erect
and install all Equipment;

B.        provide construction, construction management (including the
furnishing of all Construction Equipment, and all Site supervision and craft
labor), civil/structural, electrical, instrumentation, field design, inspection
and quality control services required to ensure that the Work is performed in
accordance herewith;

C.        negotiate all guarantees, warranties, delivery schedules and
performance requirements with all Subcontractors so that all Subcontracts are
consistent with this Agreement, as set forth in Sections 2.3 and 2.4;

D.        perform shop and other inspections of the work of Subcontractors and
Sub-subcontractors to ensure that such work meets all of the requirements of
this Agreement;

E.        pay Subcontractors in accordance with the respective Subcontracts;

F.        pay all Taxes incurred by Contractor in connection with the Work in a
timely fashion, and as between Owner and Contractor, be responsible for all
Taxes incurred by any Subcontractor or Sub-subcontractor;

25

G.        ensure that the Work is performed in accordance with the Key Dates;

H.        until Substantial Completion of each Train, conduct and manage all
pre-commissioning, start-up operations, Commissioning, Performance Tests and
other testing of such Train, while directing operation personnel provided by
Owner pursuant to Section 4.4;

I.        obtain all Permits required per Section 3.12;

J.        provide prompt assistance, information and documentation required or
requested by Owner to enable Owner to obtain or modify the Permits listed in
Attachment Q,  provided that such assistance, information and documentation
shall not include Contractor’s provision of information, testimony, documents or
data by Contractor’s employees under oath during litigation (unless specifically
authorized by Contractor) and activities outside the field of Contractor’s
expertise, training or experience of personnel assigned to the performance of
the Work under this Agreement (except to the extent provided for by Change Order
issued pursuant to Section 6.1 and agreed by Contractor);

K.        provide training for Owner’s operation personnel per Section 3.5;

L.        ensure all Subcontractors perform their Subcontract obligations;

M.        cooperate with and respond promptly to reasonable inquiries from
Owner;

N.        obtain and manage all temporary utilities for the performance of the
Work;

O.        manage on behalf of Owner the engineering, procurement, construction
and start-up of all permanent utilities provided outside the Site to the Site as
specified in Schedule A-1;

P.        supply all fills of lubricants, refrigerants and chemicals and
transformer oils and all consumables necessary to perform the Work through
Substantial Completion of the applicable Train, excluding Owner’s supply
requirements of natural gas feed for Commissioning, start-up, testing and
operations as set forth in this Agreement, and as a condition of Substantial
Completion with respect to a Train, completely re-filling all fills,
refrigerants, chemicals and oils for such Train; and

Q.        perform all design and engineering Work in accordance with this
Agreement, including that specified in Section 3.3.

3.3        Design and Engineering Work.

A.        General.  Contractor shall, as part of the Work, perform, or cause to
be performed, all design and engineering Work in accordance with this Agreement
and cause the Work to meet and achieve the requirements of this Agreement,
including achieving the Minimum Acceptance Criteria and Performance Guarantees.

26

B.        Drawings and Specifications.  Upon receipt of an LNTP or the NTP
issued in accordance with Section 5.2, Contractor shall commence the preparation
of the Drawings and Specifications for all Work relating to such LNTP or
NTP.  The Drawings and Specifications shall conform and comply with the
requirements of this Agreement, including the Scope of Work, Basis of Design,
GECP, Applicable Codes and Standards, Applicable Law, and all applicable
provisions of this Agreement.  Contractor shall develop a design document
submittal schedule in the form of a master document register and issue to Owner
no later than thirty (30) Days after the Effective Date.

C.        Review Process.

1.        Drawing and Specifications Review.  During the development of the
Drawings and Specifications, Contractor shall provide Owner with the opportunity
to perform regular reviews of the design and engineering in progress on a
regular basis.  Such reviews may be conducted at Contractor’s offices, at any of
its Major Subcontractor’s or Major Sub-subcontractor’s offices with Contractor’s
presence, or remotely by electronic internet access (except that electronic
access of Major Subcontractor and Major Sub-subcontractor work shall be provided
only where reasonably available to Contractor).  The reviews may be of progress
prints, computer images, draft documents, working calculations, draft
specifications or reports, Drawings, Specifications or other design documents
determined by Owner.

2.        Submission by Contractor.  Contractor shall submit copies of the
Drawings and Specifications to Owner for formal review, comment, approval or
disapproval in accordance with Attachment B and the submittal schedule mutually
agreed to by the Parties each Month, as applicable.  Each submission of Drawings
and Specifications shall include a statement that to the best of Contractor’s
knowledge such Drawings and Specifications comply with Section 3.3B.  In
addition, if Contractor makes any changes to any Drawings or Specifications
after they have been submitted to Owner (including after Owner has already
reviewed, commented, approved or disapproved such Drawings and Specifications),
Contractor shall re-submit such Drawings and Specifications to Owner in
accordance with this Section.

3.        Review Periods.  Owner shall have up to ten (10) Business Days after
its receipt of Drawings and Specifications submitted in accordance with Section
3.3C.2 to issue to Contractor one (1) set of consolidated written comments,
proposed changes and/or approvals or disapprovals of the submission of such
Drawings and Specifications.

4.        No Owner Response.  If Owner does not issue any comments, proposed
changes or approvals or disapprovals within such time periods set forth in
Section 3.3C.3, Contractor may proceed with the development of such Drawings and
Specifications and any construction relating thereto, but Owner’s lack of
comments, approval or disapproval, if applicable, shall in no event constitute
an approval of the matters received by Owner.

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5.        Disapproval by Owner.  If Owner disapproves of the Drawings or
Specifications, Owner shall provide Contractor with a written statement of the
reasons for such disapproval within the time period required for Owner’s
response for disapproval of Drawings and Specifications set forth in Section
3.3C.3.  Contractor shall provide Owner with revised and corrected Drawings and
Specifications as soon as possible thereafter and Owner’s rights with respect to
issuing comments, proposed changes or approvals or disapprovals of such revised
and corrected Drawings or Specifications are governed by the procedures
specified above in this Section  3.3C; provided that Contractor shall not be
entitled to any extensions of time to the Key Dates, an adjustment to the
Contract Price or any adjustment to any other Changed Criteria; provided
further, however, to the extent Owner’s disapproval of the Drawings or
Specifications is due to one or more changes required by Owner to any such
Drawings or Specifications that have an impact on the Work, and such disapproval
is not the result of such Drawings’ or Specifications’ non-compliance with the
requirements of this Agreement, Contractor shall be entitled to a Change Order
to the extent such Owner-required change adversely affects the Key Dates or the
Contract Price and Contractor complies with and meets the requirements of
ARTICLE 6.

6.        Approval by Owner.  Upon Owner’s approval of the Drawings and
Specifications, such Drawings and Specifications shall be the Drawings and
Specifications that Contractor shall use to construct the Work; provided that
Owner’s review or approval of any Drawings and Specifications (or Owner’s lack
of comments, proposed changes or approval) shall not in any way be deemed to
limit or in any way alter Contractor’s responsibility to perform and complete
the Work in accordance with the requirements of this Agreement, and in the event
that there is a discrepancy, difference or ambiguity between the terms of this
Agreement and any Drawings and Specifications, the interpretation imposing the
greater obligation on Contractor shall control.  Due to the limited time for
Owner’s review of Drawings and Specifications, Contractor’s or its
Subcontractors’ or Sub-subcontractors’ expertise in the Work and Owner’s
contractual expectation for Contractor to prepare accurate and complete Drawings
and Specifications, Contractor recognizes and agrees that Owner is not required
or expected to make detailed reviews of Drawings and Specifications, but instead
Owner’s review of Drawings and Specifications may be of only a general, cursory
nature.  Accordingly, any review or approval given by Owner under this Agreement
(or Owner’s non-response) with respect to any Drawings or Specifications shall
not in any way be, or deemed to be, an approval of any Work, Drawings or
Specifications not meeting the requirements of this Agreement, as Contractor has
the sole responsibility for performing the Work in accordance with this
Agreement.

D.        Design Licenses.  Contractor shall perform, or cause to be performed,
all design and engineering Work in accordance with Applicable Law and Applicable
Codes and Standards, and all Drawings, Specifications and design and engineering
Work shall be signed and stamped by design professionals licensed to the extent
required by Applicable Law.

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E.        CAD Drawings.  Unless otherwise expressly provided under this
Agreement, all Drawings and Record As-Built Drawings prepared by Contractor or
its Subcontractors under this Agreement shall be prepared using computer aided
design (“CAD”).  All CAD drawing files shall be in fully operable and editable
Microstation (Version 8) format, unless otherwise specified in Attachment
B.  Contractor shall use reasonable efforts to also provide Drawings, including
Record As-Built Drawings, in other formats requested by Owner.

F.        As-Built Drawings and Specifications.  During construction, Contractor
shall keep a redlined, marked, up-to-date set of Progress As-Built Drawings and
Specifications on the Site as required under Attachment B.  Contractor shall
make redlined documents available to Owner for inspection upon request during
the course of construction.  As a condition precedent to Final Completion,
Contractor shall deliver to Owner the Record As-Built Drawings and
Specifications in accordance with Attachment B, which shall include delivery of
final as-built drawing files in fully operable and editable format in CAD.

G.        Other Information.  Contractor shall deliver copies of all other
documents required to be delivered pursuant to Attachment B within and in
accordance with the requirements and timing set forth in Attachment B.

3.4        Spare Parts.

A.        Commissioning Spare Parts. Contractor shall provide all
pre-commissioning, commissioning, testing and start-up spare parts necessary for
each Train to achieve Substantial Completion and shall, prior to and as a
condition precedent to achieving RLFC for each Train, deliver such spare parts
for the Train to the Site.  The cost associated with all Work related to such
pre-commissioning, commissioning, testing and start-up spare parts is included
in the Contract Price, including all Work related to procuring and storing the
commissioning spare parts and the purchase price for such parts.

B.        Capital Spare Parts. Prior to and as a condition precedent to
Substantial Completion of each Train, Contractor shall deliver to the Site all
the Capital Spare Parts that pertain to such Train.  Such Capital Spare Parts
are listed in Attachment W, and the cost associated with all Work related to
such Capital Spare Parts is included in the Contract Price, including the cost
of procurement of such spare parts and the actual out-of-pocket purchase price
of such spare parts.  To the extent that Contractor desires to use any Capital
Spare Parts, Contractor must obtain Owner’s prior approval, not to be
unreasonably withheld, and replace all such spare parts in new and unused
condition as a condition of Substantial Completion unless otherwise approved by
Owner.  Capital Spare Parts shall be treated, as applicable, as Equipment or as
a component of the Aggregate Labor and Skills Price.

C.        Operating Spare Parts.  With respect to operating spare parts for use
after Substantial Completion (but only to the extent not taken into
consideration by the Capital Spare Parts listed in Attachment W), Contractor
shall deliver to Owner for Owner’s approval, not to be unreasonably withheld, a
detailed priced list of the manufacturer and

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Contractor-recommended operating spare parts for each applicable item of
Equipment necessary for operating such Equipment for two (2) years.  The
purchase price of each operating spare part shall be provided to Owner for each
item of Equipment for which there is manufacturer or Contractor-recommended
operating spare parts no later than thirty (30) Days after the execution of the
applicable Subcontract for such Equipment, and such purchase prices will be
valid for one hundred and eighty (180) Days after Contractor’s execution
thereof.  Within such one hundred and eighty (180) Days, Owner may respond to
Contractor identifying which operating spare parts, if any, that Owner wishes
Contractor to procure under each Subcontract.  The cost associated with all Work
related to the two (2) years’ operating spare parts is included in the Contract
Price, except for the purchase price of such operating spare parts.  In the
event Owner requests in writing that Contractor procure any operating spare
parts on Owner’s behalf, Contractor shall be entitled to a Change Order in
accordance with Section 6.2A.6 to increase the Contract Price for the actual
purchase price and delivery costs of such requested operating spare parts, plus
costs of transportation, preservation and a profit of five percent (5%) on such
price and costs.  To the extent that Contractor desires to use any Operating
Spare Parts, Contractor must obtain Owner’s prior approval, not to be
unreasonably withheld, and replace all such spare parts as a condition of
Substantial Completion in new and unused condition unless otherwise approved by
Owner.  Operating spare parts shall be treated, as appropriate, as Equipment or
as a component of the Aggregate Labor and Skills Price.

3.5        Training Program in General.  As part of the Work, a reasonable
number of competent personnel, who are capable of being trained by Contractor,
designated by Owner in its sole discretion (but not to exceed the number of
Persons listed in Attachment V) shall be given training designed and
administered by Contractor at its expense, which shall be based on the program
requirements contained in Attachment A and shall cover at a minimum the
following topics: (i) the testing of each item of Equipment; (ii) the start-up,
operation and shut-down of each item of Equipment; (iii) the performance of
routine, preventative and emergency maintenance for each item of Equipment; and
(iv) spare parts to be maintained for each item of Equipment, and their
installation and removal.  Such training shall include instruction for Owner’s
operations personnel in the operation and routine maintenance of each item of
Equipment prior to completion of Commissioning of each item of Equipment.  As
part of the training, Contractor shall provide Owner’s operating personnel with
access to the Facility during Commissioning, testing and start-up. Training
shall be provided by personnel selected by Contractor who, in Contractor’s and
the Equipment Subcontractor’s or Sub-subcontractor’s judgment, are qualified to
provide such training, and shall take place at such locations and at such times
as agreed upon by the Parties.  Contractor shall provide trainees with materials
described in Attachment A.  Contractor shall also provide to Owner all training
materials and aids developed to conduct such training in order to facilitate
future training by Owner of personnel hired after Substantial Completion.  If
Contractor determines, using GECP, that a member of the operations personnel
provided by Owner who is under the control of Contractor pursuant to Section
3.29 is not competent, or is not adequately participating in the training, or is
not sufficiently capable of performing his or her duties in connection with the
Facility, and such deficiencies are not the fault of Contractor and cannot be
cured by Contractor using GECP, the Contractor may require Owner to remove and
replace that member of the operations personnel (provided such personnel have
not been designated as Owner’s key personnel).

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3.6        Environmental Regulations and Environmental Compliance.  No later
than thirty (30) Days after the Effective Date, Contractor shall submit for
Owner’s approval, not to be unreasonably withheld, Project-specific
environmental policies and procedures.  Such policies and procedures shall be in
compliance with requirements of this Agreement, including Applicable Law and the
plan and procedures set forth in Attachment J.  Without limitation of
Section 3.1, Contractor is responsible for performing the Work in compliance
with all provisions of this Agreement regarding the environment and Applicable
Law and in compliance with the policies and procedures set forth in Attachment J
and the Project-specific policies and procedures approved by Owner.  Contractor
shall maintain all environmental compliance records required by Applicable Law
and shall provide, or cause to be provided, necessary training to its employees,
Subcontractors and Sub-subcontractors to ensure their compliance with the
environmental rules and requirements of this Agreement.  Contractor shall, at
its sole cost and expense, dispose of all non-hazardous wastes and Hazardous
Materials generated or brought onto the Site by Contractor, any Subcontractor or
Sub-subcontractor during performance of the Work at off-Site disposal facilities
permitted to receive such wastes and Hazardous Materials.  Contractor shall
provide copies of all waste and disposal records and reports to
Owner.  Contractor shall report to Owner, as soon as reasonably possible after
having knowledge thereof and in no event later than one (1) Day after such
occurrence, any violation of the foregoing.  Contractor shall, at its sole cost
and expense, remediate the release of any Hazardous Materials generated or
brought onto the Site by Contractor, any Subcontractor or Sub-subcontractor or
other event in violation of this Section 3.6.  Contractor’s obligations under
this Section 3.6 shall survive termination of this Agreement.

3.7        Contractor’s Tools and Construction Equipment.  Contractor shall
furnish all Construction Equipment necessary and appropriate for the timely and
safe completion of the Work in compliance with this Agreement.  Notwithstanding
anything to the contrary contained in this Agreement, Contractor shall be
responsible for damage to or destruction or loss of, from any cause whatsoever,
all Construction Equipment owned, rented or leased by Contractor or its
Subcontractors or Sub-subcontractors for use in accomplishing the
Work.  Contractor shall require all insurance policies (including policies of
Contractor and all Subcontractors and Sub-subcontractors) in any way relating to
such Construction Equipment to include clauses stating that each underwriter
will waive all rights of recovery, under subrogation or otherwise, against the
Owner Indemnified Parties.

3.8        Employment of Personnel.

A.        Contractor shall not engage or retain or permit any Subcontractor or
Sub-subcontractor to engage or retain, in connection with its performance under
this Agreement, anyone who is unsafe, not skilled, or not qualified to perform
the work assigned to such Person.  Contractor agrees to promptly remove or
reassign (or to require any Subcontractor or Sub-subcontractor to remove or
reassign) from its services in connection with the Work any Person who does not
meet the foregoing requirements, excluding vendors or suppliers who are not
performing Work on the Site, laydown areas or modular fabrication yards.  In
addition, Contractor agrees that within forty-eight (48) hours after receipt of
notice from Owner, it shall remove from the Work any employee or agent of
Contractor or of Contractor’s Subcontractors or Sub-subcontractors who, in
Owner’s reasonable opinion, is unsafe, incompetent, careless, unqualified to
perform the Work assigned to such Person, creates an unsafe or hostile work
environment, persists in

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any conduct which is prejudicial to safety, health, or the protection of the
environment, disregards the terms and conditions of this Agreement, or is
interrupting, interfering with or impeding the timely and proper completion of
the Work.  NOTWITHSTANDING THE FOREGOING, OWNER SHALL HAVE NO LIABILITY AND
CONTRACTOR AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE OWNER
INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL CLAIMS, CAUSES OF ACTION,
DAMAGES, COSTS, LOSSES AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES
AND LITIGATION OR ARBITRATION EXPENSES) AND LIABILITIES, OF WHATSOEVER KIND OR
NATURE, WHICH MAY DIRECTLY OR INDIRECTLY ARISE OR RESULT FROM CONTRACTOR OR ANY
SUBCONTRACTOR OR SUB-SUBCONTRACTOR TERMINATING THE EMPLOYMENT OF OR REMOVING
FROM THE WORK ANY SUCH EMPLOYEE OR AGENT WHO FAILS TO MEET THE FOREGOING
REQUIREMENTS FOLLOWING A REQUEST BY OWNER TO HAVE SUCH EMPLOYEE OR AGENT REMOVED
FROM THE WORK.  Contractor shall replace any such employee or agent at its sole
cost and expense.

B.        Contractor is responsible for maintaining labor relations in such
manner that there is reasonable harmony among the employees of Contractor and
its Subcontractors and Sub-subcontractors performing Work at the
Site.  Contractor and its Subcontractors and Sub-subcontractors performing Work
at the Site shall conduct their labor relations in accordance with the
recognized prevailing local area practices.  Contractor shall inform Owner
promptly of any labor dispute, anticipated labor dispute, request or demand by a
labor organization, its representatives or members which may reasonably be
expected to affect the Work.  Contractor further agrees to inform Owner, before
any commitments are made, about the negotiations of any agreements or
understandings with local or national labor organizations.

C.        Contractor and its Subcontractors and Sub-subcontractors and the
personnel of any of them shall not bring onto the Site any: (i) firearm of
whatsoever nature, knife with a blade exceeding four (4) inches (100
millimeters) in length or other object which in the sole judgment of Owner is
determined to be a potential weapon; (ii) alcoholic beverages or intoxicants of
any nature; (iii) substance that creates a hazard and not related to the Work;
(iv) animal; (v) illegal drugs of any nature; (vi) drugs (whether prescription
or non-prescription) which impair physical or mental faculties; or (vii)
prescription drugs without a valid prescription.

D.        In connection with the enforcement of this Section 3.8D, all employees
and agents of Contractor and its Subcontractors and Sub-subcontractors shall
successfully complete a drug screening test prior to performing Work at the
Site, and periodically thereafter in accordance with the requirements of
Attachment J.  Contractor and its Subcontractors and Sub-subcontractors shall
abide by and enforce the requirements of this Section 3.8D, and shall
immediately remove from the Work and the Site to the extent permitted by
Applicable Law any employee or agent of Contractor, Subcontractor or
Sub-subcontractor who has violated the requirements of this Section 3.8D.  The
provisions of Section 3.8A with regard to liability of any of the Owner
Indemnified Parties and Contractor’s release, indemnification, defense and hold
harmless obligations shall apply to the removal of any such Person under this
Section 3.8D.

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3.9        Clean-up.  Contractor shall keep the Site free from all waste
materials or rubbish caused by the activities of Contractor or any of its
Subcontractors or Sub-subcontractors.  As soon as practicable after the
completion of all Punchlist items, Contractor shall remove, at its own cost, all
Construction Equipment and other items not constituting part of the Facility
(other than as required by Contractor to fulfil its obligations under Section
12.3A) and remove all waste material and rubbish brought on to or generated by
Contractor from the Site and restore the Site in accordance with this
Agreement.  In the event of Contractor’s failure to comply with any of the
foregoing, Owner may accomplish the same; provided, however, that Contractor
shall be liable for and pay to Owner (directly, by offset, or by collection on
the Letter of Credit, at Owner’s sole option) all reasonable costs associated
with such removal and/or restoration, including costs associated with
permitting, transportation and disposal at an authorized location.

3.10        Safety and Security.  Contractor recognizes and agrees that safety
and physical security are of paramount importance in the performance of the Work
and that Contractor is responsible for performing the Work in a safe and
physically secure manner.  No later than thirty (30) Days after the Effective
Date, Contractor shall deliver to Owner a safety program for Owner’s approval,
not to be unreasonably withheld.  Once Owner has approved Contractor’s safety
program, Contractor shall seek approval from Owner of any material changes to
such safety program. Contractor’s safety program shall specify the written
policies and procedures for maintaining and supervising all environmental,
health and safety precautions and programs in connection with the performance of
the Work, including appropriate precautions and Work-specific detailed programs
for areas in and around the Site and the handling, collecting, removing,
transporting or disposing of Hazardous Materials in order to ensure prudent
practice on the Site for the safety of all Persons on the Site.  Contractor
further agrees to perform the Work in accordance with the safety and health
rules and standards of Applicable Law (including OSHA) and such safety program,
and Contractor shall assume all costs associated with compliance
therewith.  Contractor’s safety program shall include the standards set forth in
Attachment J.  Owner’s review and approval of Contractor’s safety program shall
not in any way relieve Contractor of its responsibility regarding safety, and
Owner, in reviewing and approving such safety program, assumes no liability for
such safety program.  Contractor shall appoint one or more (as appropriate)
safety representative(s) acceptable to Owner who shall be resident at the Site,
have responsibility to immediately correct unsafe conditions or unsafe acts
associated with the Work and the Facility, act on behalf of Contractor on safety
and health matters, and participate in periodic safety meetings with Owner after
Work has commenced on the Site.  Contractor further agrees to provide or cause
to be provided necessary training and safety Construction Equipment to its
employees, Subcontractors and Sub-subcontractors to ensure their compliance with
the foregoing safety and health rules and standards and enforce the use of such
training and Construction Equipment.  Contractor shall maintain all accident,
injury and any other records required by Applicable Law or Contractor’s safety
program and shall furnish Owner a Monthly summary of injuries and labor hours
lost due to injuries.  Should Owner at any time observe Contractor, or any of
its Subcontractors or Sub-subcontractors, performing the Work in an unsafe
manner, or in a manner that may, if continued, become unsafe, then Owner shall
have the right (but not the obligation) to require Contractor to stop the Work
until such time as the manner of performing the Work has been rendered safe to
the satisfaction of Owner; provided, however, that at no time shall Contractor
be entitled to an adjustment of the Contract Price or Key Dates based on such
work stoppage.  Contractor shall be responsible for the security, fencing,
guarding, temporary facilities, lighting, and supervision each as required and
described in Attachment A until all of the

33

requirements of Substantial Completion for an applicable Train have been
satisfied.  Nothing in this Section 3.10 shall affect Contractor’s status as an
independent contractor.  With respect to (i) the Site’s access requirements,
restrictions and procedures, (ii) Owner’s safety and security rules and
procedures and (iii) other such safety rules and procedures as required by the
Site’s landowner or Applicable Law and Regulations, Contractor acknowledges that
it has fully investigated and has taken such requirements, rules and procedures
into account in planning the Work to be performed in accordance with the Key
Dates.  Further, regarding Site access and performance of the Work on the Site,
Contractor shall comply with any Site access, safety, security requirements,
restrictions, rules and procedures imposed by (i) the Site’s landowner and (ii)
Owner after Substantial Completion of each Train.  As such, Contractor shall not
be entitled to a Change Order to adjust the Contract Price or Key Dates as a
result of Contractor’s (including its Subcontractors and Sub-subcontractors)
compliance with such access, safety and security requirements, rules and
procedures, except to the extent of any material changes made thereto by the
Site’s landowner subsequent to the Effective Date.

3.11        Emergencies.  In the event of any emergency endangering life or
property in any way relating to the Work, the Facility or the Site, whether on
the Site or otherwise, Contractor shall take such action as may be reasonable
and necessary to prevent, avoid or mitigate injury, damage, or loss and shall,
as soon as possible, report any such incidents, including Contractor’s response
thereto, to Owner.  If Contractor fails to take such action and the emergency
requires immediate action, then Owner, with or without notice to Contractor may,
but shall be under no obligation to, take reasonable action as required to
address such emergency.  The taking of any such action by Owner, or Owner’s
failure to take any action shall not limit Contractor’s liability. Contractor
shall reimburse Owner for the performance of any work or furnishing of any
equipment or other items in connection with any emergency in an amount equal to
the reasonable costs incurred by Owner in such performance of work or furnishing
of equipment or other items.

3.12        Approvals, Certificates, Permits and Licenses.

A.        Contractor shall obtain the Permits listed in Attachment P as well as
(i) those Permits for the Project that are required to be maintained in
Contractor’s name and (ii) those Permits necessary to perform the Work
(“Contractor Permits”), as well as cause its Subcontractors and
Sub-subcontractors to obtain those Permits in (i) and (ii).

B.        Contractor shall provide information, assistance and documentation to
Owner as reasonably requested in connection with the Permits to be obtained by
Owner in Attachment Q.  Without limiting the generality of the foregoing,
Contractor acknowledges that Owner is required to provide regular reports and
other information to FERC during the design and construction of the Facility,
and that the Facility will be subject to regular inspections by FERC staff, and
continuous monitoring by inspectors providing reports to FERC.  Contractor shall
provide continuing support services relating to the FERC and regulatory
processes, including the preparation of all design and engineering documentation
necessary to conform and update Owner’s FERC, TCEQ and other filings to the
Scope of Work, either prior to or following the issuance of the final FERC Order
for the Project.  Contractor shall also perform the engineering with respect to
the Owner Permits in accordance with Exhibit A, and shall cooperate with FERC
staff and inspectors, and take such actions as necessary to facilitate FERC
monitoring and inspection programs.

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C.        Contractor shall not be entitled to an adjustment to the Contract
Price, Key Dates or Changed Criteria to the extent Owner’s failure to obtain a
FERC Authorization or another Owner Permit is due to Contractor’s failure to
comply with Section 3.12B or to cooperate with Owner or any relevant
Governmental Instrumentality.

3.13        Books, Records and Audits.

A.        Contractor shall keep full and detailed books, construction and
manufacturing logs, records, daily reports, accounts, schedules, payroll
records, receipts, statements, electronic files, correspondence and other
pertinent documents as may be necessary for proper management under this
Agreement, as required under Applicable Law or this Agreement (“Books and
Records”).  Contractor shall maintain all such Books and Records in accordance
with generally accepted accounting principles applicable in the United States
and shall retain all such Books and Records for a minimum period of time equal
to the greater of: (i) three (3) years after Final Completion, (ii) such period
of time as may be required under Applicable Law, or (iii) the time period
required for resolution of all third-party claims arising out of or relating to
this Agreement, the Work or the Facility.

B.        Upon reasonable notice, Owner, Lender, and Independent Engineer shall
have the right to audit or to appoint an independent public accounting firm to
audit Contractor’s Books and Records; provided,  however, with respect to an
independent public accounting firm, such Lender, Independent Engineer and
independent public accounting firm and their representatives shall first execute
a confidentiality agreement with Contractor.  Contractor’s Books and Records may
be audited as necessary to (i) validate all amounts billed under any Change
Orders that are not a fixed price, and (ii) review and confirm safety
records.  When requested by Owner, Contractor shall provide the auditors with
reasonable access to all relevant Books and Records, and Contractor’s personnel
shall cooperate with the auditors to effectuate the audit or audits
hereunder.  The auditors shall have the right to copy such Books and Records at
Owner’s expense.  Contractor shall bear all reasonable costs and expenses
incurred by it in assisting Owner with audits performed pursuant to this
Section 3.13.  Contractor shall include audit provisions identical to this
Section 3.13 in all Subcontracts.  The restrictions in this Section 3.13B to the
audit rights of Owner, Lender or Independent Engineer shall not control over any
rights such parties have under Applicable Law, in discovery in any arbitration
or litigation arising out of ARTICLE 18 or in any arbitration or litigation
against Guarantor or in any litigation between Owner and any Governmental
Instrumentality.

3.14        Tax Accounting.

A.        Within a reasonable period of time (not to exceed thirty (30) Days)
following Contractor’s receipt of Owner’s written request therefor, Contractor
shall provide Owner with any information regarding quantities, descriptions and
sales prices of any Equipment installed on or ordered for the Facility and any
other information, including Books and Records, subject to the extent of the
audit rights in Section 3.13, as Owner may deem reasonably necessary in
connection with the preparation of its tax returns or other tax documentation in
connection with the Project or the determination of Equipment listed in

35

Attachment DD.  No access to the aforementioned information (including Books and
Records) shall be granted to Owner’s tax consultant until such tax consultant
has signed a confidentiality agreement with Contractor in accordance with the
standard practice in the auditing industry for audits of this kind.

B.        Contractor acknowledges that Owner is pursuing ad valorem tax
abatement through the Texas Comptroller of Public Accounts, and upon request,
Contractor shall provide to Owner and Owner’s tax consultant access to
documentation required or requested by the Texas Comptroller of Public Accounts
or any other Governmental Instrumentality in order for Owner to perfect such
abatement related to the sales price of Equipment, including Equipment sales
price, price of fabrication and design specifications, installation labor costs
and overhead and other indirect costs.  Documentation shall consist of asset
name or Equipment reference number, a description of the asset, and amount
charged by Contractor to Owner.  Contractor agrees to offer similar assistance
to Owner toward any other federal, state or local program that is enacted and
would allow for a reduction, rebate, abatement or exemption of (i) Taxes or (ii)
Texas Sales and Use Tax on Equipment listed in Attachment DD.

3.15        Temporary Utilities, Roads, Facilities and Storage.

A.        Prior to Substantial Completion of the relevant Train and except for
those utilities designated to be provided by Owner pursuant to ARTICLE 4,
Contractor shall provide and pay for all utilities (e.g., electricity, water,
communication, cable, telephone, waste and sewer) with respect to such Train,
including all connections and substations, necessary for the performance of the
Work, including installation, Permit and usage costs.

B.        Contractor shall construct and maintain temporary access and haul
roads as may be necessary for the proper performance of this Agreement.  Roads
constructed on the Site shall be subject to Owner’s approval, not to be
unreasonably withheld.  Contractor shall provide Owner with sufficient office
space at the time of Contractor’s mobilization at the Site to accommodate
Owner’s Representative and support staff.  Contractor shall provide Owner with
all office space, construction trailers, utilities, storage and warehousing,
security, telephones, furnishings, and other temporary facilities required for
their oversight of the Work, as set forth in more detail in Attachment A.

C.        All Equipment and other items or components thereof comprising part of
the Work stored at a location other than on the Site shall be segregated from
other goods, and shall be clearly marked as “Property of Rio Grande LNG, LLC”.

3.16        Subordination of Liens.  Contractor hereby subordinates any
mechanics’ and materialmen’s liens or other claims or encumbrances that may be
brought by Contractor against any or all of the Work, the Site,, the Train 3
Liquefaction Facility or the Facility to any liens granted in favor of Lender,
whether such lien in favor of Lender is created, attached or perfected prior to
or after any such liens, claims or encumbrances, and shall require its
Subcontractors and Sub-subcontractors to similarly subordinate their lien, claim
and encumbrance rights.  Contractor agrees to comply with reasonable requests of
Owner for supporting documentation required by Lender, including any necessary
lien subordination agreements, affidavits or other documents that

36

may be required to demonstrate that Owner’s property and the Site are free from
liens, claims and encumbrances arising out of the furnishing of Work under this
Agreement.  Nothing in this Section 3.16 shall be construed as a limitation on
or waiver by Contractor of any of its rights under Applicable Law to file a lien
or claim or otherwise encumber the Project as security for any undisputed
payments owed to it by Owner hereunder that are past due, provided that such
lien or claim is subordinate to any liens granted in favor of Lender.

3.17        Hazardous Materials.  Contractor shall not, nor shall it permit or
allow any Subcontractor or Sub-subcontractor to, bring any Hazardous Materials
on the Site and shall bear all responsibility and liability for such materials;
provided, however, that Contractor may bring onto the Site such Hazardous
Materials as are necessary to perform the Work so long as the same is done in
compliance with Applicable Law, Applicable Codes and Standards, and the
requirements specified in Attachment J, and Contractor shall remain responsible
and liable for all such Hazardous Materials.  If Contractor or any Subcontractor
or Sub-subcontractor encounters Pre-Existing Hazardous Materials at the Site,
Contractor and its Subcontractors and Sub-subcontractors shall immediately stop
Work in the affected area and notify Owner. Contractor and its Subcontractors
and Sub-subcontractors shall not be required to resume Work in connection with
such Pre-Existing Hazardous Materials or in any area affected thereby until
Owner has: (i) obtained any required permits or other approvals related thereto;
and (ii) delivered to Contractor a written notice (x) specifying that any
affected area is or has been rendered suitable for the resumption of Work in
compliance with Applicable Law or (y) specifying any special conditions under
which such Work may be resumed in compliance with Applicable Law.  To the extent
that any such suspension adversely affects Contractor’s or its Subcontractors’
or Sub-subcontractors’ cost or time for performance of the Work in accordance
with the requirements of this Agreement, Contractor shall be entitled to an
appropriate Change Order pursuant to Section 6.2A.8. If under such circumstances
Contractor or any of its Subcontractors or Sub-subcontractors fail to stop Work
and notify Owner, Contractor shall be responsible and liable to Owner in
accordance with Section 17.1B for all damages, costs, losses and expenses to the
extent relating to such failure, subject to an aggregate cap of [***] U.S.
Dollars (U.S.$[***]) and Owner hereby releases Contractor, its Subcontractors or
Sub-subcontractors from any such liability in excess thereof.  For the avoidance
of doubt, any such liability of Contractor shall not exceed [***] U.S. Dollars
(U.S.$[***]) in the total cumulative aggregate under the Train 3 EPC Agreement
and this Agreement.

3.18        Quality Assurance.  No later than thirty (30) Days after the
Effective Date, Contractor shall submit to Owner for its review and approval,
not to be unreasonably withheld, a Facility-specific quality control and quality
assurance plan and an inspection plan detailing Contractor’s quality plan
(“Quality Plan”) and Subcontractor source inspection plan as required by
Attachment Y.  No later than thirty (30) Days after the Effective Date,
Contractor shall submit to Owner for its approval, not to be unreasonably
withheld, detailed inspection and test plans and supporting construction
procedures as required by Attachment Y.  Prior to the commencement of the Work
related to each Train, detailed quality assurance and quality control procedures
and plans applicable to that portion of the Work shall be issued to Owner in
accordance with Attachment Y.  Owner’s review and approval of Contractor’s
Quality Plan, Subcontractor source inspection plan, detailed construction
inspection and test plans and supporting construction procedures, and detailed
quality assurance and quality control procedures and plans shall in no way
relieve Contractor of its responsibility for performing the Work in compliance
with this Agreement.  As

37

part of such plans, Contractor agrees that it shall keep a daily record of
inspections performed, and Contractor shall make available at the Site for
Owner’s and Lender’s (including Independent Engineer) review a copy of all such
inspections.

3.19        Reports and Meetings.

A.        Reports.  Contractor shall provide Owner with one (1) hardcopy and one
(1) electronic copy of the following reports and such other information required
in this Agreement:

1.        minutes for all weekly status and Project-related meetings with Owner
within five (5) Business Days following such meeting;

2.        safety or environmental incident reports within three (3) Business
Days following the occurrence of any such incident (including “near miss”
incidents where no individual was injured or property was damaged), except for
any safety or environmental incident involving a significant non-scheduled event
such as LNG or natural gas releases, fires, explosions, mechanical failures,
unusual over-pressurizations or major injuries which shall be provided to Owner
within eight (8) hours of the occurrence of such incident; provided, however,
notification shall be provided to Owner immediately if any safety or
environmental incident threatens public or employee safety, causes significant
property damage, or interrupts the Work;

3.        weekly (or such longer duration as otherwise agreed by Owner in
writing) progress reports (“Weekly Progress Reports”), in a form reasonably
acceptable to Owner and containing the information required in Attachment X,
which shall be provided one (1) Day prior to the weekly progress meeting and
shall cover all activities up to the end of the previous week; and

4.        Monthly progress reports, in a form reasonably acceptable to Owner and
containing the information required in Attachment X (“Monthly Progress
Reports”).  Contractor shall provide the Monthly Progress Report no later than
ten (10) Days after the end of each Month, and the Monthly Progress Report shall
cover activities up through the end of the previous Month.  Contractor shall
provide Owner with the number of copies of such reports and shall arrange for
the distribution thereof as Owner may reasonably request.

5.        At Owner’s request, Contractor shall consolidate any or all reports
and other documentation required under this Section 3.19 (or other provisions
under this Agreement) for Train 1 and Train 2 with the reports required under
similar provisions for Train 3 in the Train 3 EPC Agreement

B.        Meetings.

1.        A weekly progress meeting with Owner shall occur every week, on a
weekday to be agreed to by the Parties, at the Site, or at an alternate site
agreeable to the Parties, to discuss the matters described in Attachment X for
the prior week. 

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The meetings shall be attended by Contractor and those Contractor employees and
Subcontractors reasonably requested by Owner.

2.        A Monthly progress meeting shall be held within  one (1) week after
the issuance of the Monthly Progress Report at the Site, or at an alternate site
agreeable to Owner and Contractor, to discuss the matters described in
Attachment X for the prior Month and to review the Monthly Progress Report for
that Month with Owner.  The Monthly progress meeting shall be attended by the
Owner Representative, the Contractor Representative and those Contractor
employees, Subcontractors and Sub-Subcontractors reasonably requested by
Owner.  The meetings may be attended by any authorized representative or agent
of Lender or the Independent Engineer.

3.20       Payment.  Contractor shall timely make all payments required to be
paid to Owner pursuant to the terms of this Agreement.

3.21       Commercial Activities.  Neither Contractor nor its employees shall
establish any commercial activity or issue concessions or permits of any kind to
third parties for establishing commercial activities on the Site or any other
lands owned or controlled by Owner; provided, however, temporary lunch wagons
and vending machines may be permitted upon prior approval by Owner, not to be
unreasonably withheld.

3.22       Title to Materials Found.  As between Owner and Contractor, the title
to water, soil, rock, gravel, sand, minerals, timber, and any other materials
developed or obtained in the excavation or other operations of Contractor, any
Subcontractor or Sub-subcontractor and the right to use said materials or
dispose of same is hereby expressly reserved by Owner.  Contractor may use in
the Work mesquite and top soil and fill for leveling, provided that such
materials comply with the requirements of this Agreement.  Notwithstanding the
above, Contractor shall remain liable for, at its sole cost and expense, the
disposal of all materials developed or obtained in the excavation or other
operations of Contractor, any Subcontractor or Sub-subcontractor (excluding
Pre-Existing Hazardous Materials and Unforeseen Subsurface Conditions, if any).

3.23       Survey Control Points and Layout.  Contractor shall establish all
survey control points and layout the entire Work in accordance with the
requirements of this Agreement, which shall be based on the survey control
points established by Owner pursuant to Section 4.5.  Contractor acknowledges
that, prior to commencement of the Work, it has independently confirmed with a
surveyor, licensed in the state of Texas, the proper placement of such survey
control points.  If Contractor or any of its Subcontractors, Sub-subcontractors
or any of the representatives or employees of any of them move or destroy or
render inaccurate the survey control points provided by Owner, such control
points shall be replaced by Contractor at Contractor’s own expense.

3.24       Cooperation with Others. Subject to the provisions of this Agreement,
including Section 4.3, Contractor acknowledges that Owner, its consultants and
professionals described in Section 2.5D and other contractors and other
subcontractors or other Persons may be working at the Site during the
performance of this Agreement.  Owner shall, and shall require that such
consultants and professionals described in Section 2.5D and other contractors
and other

39

subcontractors or other Persons working at the Site (except with respect to
Contractor’s work performed under the Train 3 EPC Agreement) during the
performance of this Agreement prior to Substantial Completion of each Train, at
all times while on the Site comply with Contractor’s safety program approved by
Owner pursuant to Section 3.12 that is applicable to the Site.  To minimize
interference with the work of any other parties, Contractor and its
Subcontractors and Sub-subcontractors shall not, unless permitted by Owner in
writing, perform the Work in the restricted work areas set forth in
Attachment Z.  No later than thirty (30) Days after the Effective Date,
Contractor shall provide to Owner, for its review and comment, a Site access
plan designating the entrances and exits to the Site that will be used during
construction and providing Contractor’s proposed Site access policies, all in
accordance with the requirements of this Agreement and Attachment J.  In
addition, Contractor shall reasonably cooperate and coordinate its Work with
Owner’s other contractors performing services on the Site (and Contractor shall
fully cooperate and coordinate its Work with its separate work under the Trains
1 and 2 EPC Agreement) and shall not obstruct or restrict Owner’s access to and
on the Site.  Owner’s Site access shall in no way relieve Contractor from its
obligations to carry out the Work in accordance with this Agreement.

3.25       Responsibility for Property.  Contractor shall plan and conduct its
operations so that neither Contractor nor any of its Subcontractors or
Sub-subcontractors shall (i) enter upon private lands (other than the Site) or
water bodies in their natural state unless authorized by the owners of such
lands; (ii) enter any restricted areas set forth in Schedule A-1; (iii) close or
obstruct any utility installation, highway, waterway, harbor, road or other
property unless and until applicable Permits have been obtained and, to the
extent such items are located on the Site, Owner’s permission has been obtained;
(iv) disrupt or otherwise interfere with the operation of any portion of any
pipeline, telephone, ship or barge operation, dredging activities, activities of
the Port Authority Indemnified Parties, conduit or electric transmission line,
railroad, ditch, navigational aid, dock or structure unless otherwise
specifically authorized by Owner in writing, the appropriate entity or
authority, or otherwise provided in Attachment A; (v) damage any property listed
in (iii) or (iv); and (vi) damage or destroy maintained, cultivated or planted
areas or vegetation such as trees, plants, shrubs, shore protection, paving, or
grass adjacent to the Site.  The foregoing includes damage arising from
performance of the Work through operation of Construction Equipment or
stockpiling of materials.  Contractor shall be responsible for all damages,
costs, losses and expenses arising out of non-compliance with this Section 3.25
(in accordance with the indemnification and defense obligations set forth in
Section 17.1I) and shall, as soon as reasonably possible, restore at its own
cost and expense such property to the condition it was in before such
damage.  If damage occurs to Train 3 prior to substantial completion of Train 3,
liability for such damage shall be governed by the Train 3 EPC
Agreement.  Contractor and its Subcontractors and Sub-subcontractors shall
coordinate and conduct the performance of the Work so as to not unreasonably
interfere with or disrupt the use and peaceful enjoyment of any adjacent
property to the Site.

3.26       Explosives.  Explosives shall not be transported to the Site without
Owner’s prior approval.  In the event that Contractor receives such approval,
explosives shall be transported to the Site only when required to perform the
Work under this Agreement and with at least thirty (30) Days’ prior notice to
and approval of Owner.  Contractor shall be responsible for properly purchasing,
transporting, storing, safeguarding, handling and using explosives required to
perform the Work under this Agreement.  Contractor shall employ competent and
qualified personnel for

40

the use of explosives.  Residual surplus explosives shall be promptly removed
from the Site and properly disposed of by Contractor.  Contractor shall strictly
comply with Applicable Law and Applicable Codes and Standards in the handling of
explosives pursuant to this Agreement (including the U.S. Patriot Act of 2001
and any and all rules and regulations promulgated by the U.S. Department of
Homeland Security and the U.S. Bureau of Alcohol, Tobacco, Firearms and
Explosives), shall perform all obligations and obtain all Permits with respect
to explosives, and shall develop and file and provide copies to Owner of all
documentation regarding same.

3.27       No Interference with Train 1.

A.       Contractor understands that upon Substantial Completion of Train 1,
Train 1 will be under full commercial operation and it is the Parties’ intent
that the performance of the Work and Contractor’s other obligations under this
Agreement, including with respect to the Train 2 Work, will not interfere with
the commercial operation of Train 1, except to the extent and for the durations
specified in Attachment HH.  No later than fourteen (14) Days’ prior to the time
that Contractor plans to perform such interfering Work, Contractor shall propose
a detailed plan setting out how Contractor intends that such interfering Work
will be performed to minimize, to the greatest extent reasonably possible,
interference with the operation of Train 1, while at all times complying with
the requirements in Attachment HH.  Prior to performing such Work, Owner and
Contractor shall mutually agree in writing on a final plan for Contractor to
execute such Work.  Owner may, in its sole discretion, subsequently prohibit
such interfering Work from being performed in accordance with the final plans
agreed by the Parties, but in such case, Contractor shall be entitled to a
Change Order to the extent permitted under Sections 6.2A.1 and 6.8.

B.       It is the Parties’ intent that, except for the activities listed in
Attachment HH, the performance of the Work and Contractor’s other obligations
under this Agreement will not interfere with the operation of Train 1 after it
has achieved Substantial Completion.  During the performance of the Work, should
an unforeseeable situation arise that requires access to or has the potential of
interfering with the operation of Train 1, Contractor shall, except in an
emergency endangering property or any Persons, give Owner written notice as soon
as possible but no later than thirty (30) Days’ prior to the time that
Contractor plans to perform such interfering Work, detailing a plan that
proposes in detail how Contractor intends that such Work will be performed to
minimize, to the greatest extent reasonably possible, interference with the
operation of Train 1.  Such plan proposed by Contractor shall be the least
disruptive to operations of Train 1, unless such plan is disproportionately
expensive when compared to the impact on the operations of Train 1.  Emergency
actions are governed by Section 3.11.  Prior to performing such Work, Owner and
Contractor shall mutually agree in writing on a final plan for Contractor to
execute such interfering Work.  Owner may, in its sole discretion, subsequently
prohibit such interfering Work from being performed in accordance with the final
plans agreed by the Parties, but in such case, Contractor shall be entitled to a
Change Order to the extent permitted under Sections 6.2A.1 and 6.8.

C.       Contractor acknowledges the risks, hazards and constraints relating to
performing Work adjacent to, and within the confines of operating facilities,
including

41

Train 1 after it has achieved Substantial Completion.  This requires significant
planning and attention to safe work practices to ensure the safety and
reliability of the operating facilities and the safety of the construction and
operational personnel.  Such detailed planning activities and safe work plans
shall be provided to Owner for its approval, not to be unreasonably withheld,
within a reasonable period of time prior to performing any Work affecting the
operation of the Facility.

3.28       Equipment Not Incorporated into the Facility.  If, after Substantial
Completion for Train 2 and prior to Final Completion, Contractor has any
Equipment that it purchased for the Facility but did not incorporate into the
Facility, Owner has the option of either purchasing such Equipment at fair
market value, plus applicable sales tax (unless an applicable exemption or
direct payment  permit exemption certificate is provided to Contractor), and
customs and import duties if the item was intended for re-export, or requiring
that Contractor haul off such Equipment at Contractor’s own cost and expense
(and if required to haul off such Equipment, Owner shall transfer title to such
Equipment to Contractor); provided that, if such Equipment was purchased on a
basis other than a lump sum basis (such as on a time and material basis under a
Change Order), then if Owner elects to take such Equipment, it may take such
Equipment at no cost to Owner, and title to such Equipment shall remain with
Owner in accordance with Section 8.1B.

3.29       Operation Personnel.

A.       Until Substantial Completion of the applicable Train, Owner’s operating
personnel shall be under the control of and supervised by Contractor, and
Contractor shall (subject to Owner’s indemnification obligations under Section
17.2) be fully responsible for the acts and omissions of such personnel;
provided, however, notwithstanding the foregoing, such operating and maintenance
personnel shall remain employees or agents of Owner and shall not be considered
employees of Contractor for any reason.

B.       To the extent not set forth in Attachment A, Contractor shall, no later
than [***]  ([***]) Days prior to the Guaranteed Substantial Completion Date of
the applicable Train, prepare for Owner’s review a proposed plan regarding the
utilization of Owner’s operation personnel during Commissioning and for the
conduct of Performance Tests and any other tests.  Each such plan shall be
prepared to avoid any impact on the operation of a Train after Substantial
Completion and to take into account Owner’s operating and maintenance
procedures, the number of operating and maintenance personnel available to Owner
for participation in pre-commissioning, Commissioning, start-up and Performance
Testing, safety issues for the Train and the type of activities to be
performed.  Such plan shall be mutually agreed-upon by the Parties in writing no
later than forty-five (45) Days after Owner’s receipt of Contractor’s proposed
plan.  Nothing in this Agreement, including this Section 3.29 or Section 3.2H,
shall be interpreted to create a master-servant or principal-agent relationship
between Contractor and any of Owner’s operation or maintenance personnel.

3.30       Compliance with Real Property Interests.  Contractor shall, in the
performance of the Work, comply, and cause all Subcontractors and
Sub-subcontractors to comply, with any easement, lease, right-of-way or other
property interests that are clearly delineated in Attachment

42

Z and affect or govern the Site or any other real property used for the purposes
of completing the Work.

3.31       Taxes.  Subject to Section 7.1, the Contract Price includes all Taxes
imposed on or payable by Contractor, its Subcontractors and Sub-subcontractors
in connection with the Work.  Contractor shall be responsible for the payment of
all Taxes imposed on or payable by Contractor, its Subcontractors and
Sub-subcontractors in connection with the Work.

3.32       Electronic File Sharing Site.  Commencing on the Effective Date and
until the expiration of the Defect Correction Period, Contractor shall create
and maintain an electronic file sharing site that can be accessible by Owner,
Owner’s Affiliates, Lenders, Independent Engineer and any other Persons
designated by Owner, and their respective employees, officers and directors
(using their own or their respective company’s computers or electronic devices).
Such electronic file share site shall be subject to approval by Owner, not to be
unreasonably withheld. Contractor shall upload, in native format, onto such
electronic file sharing site all Work Product, reports, schedules, Drawings,
Specifications and project specific policies and procedures (other than Invoices
or Change Orders) contemporaneously with, or immediately after, such document,
data and information was submitted to Owner. Such electronic file sharing site
shall not be a substitute for the submission of documents to Owner as required
herein, but instead shall serve as an additional service provided to Owner
enabling Owner, Owner, Owner’s Affiliates, Lenders, Independent Engineer and any
other Persons designated by Owner to have another source of access to such
documents, data and information.

ARTICLE 4

OWNER’S RESPONSIBILITIES

Owner shall comply with the following provisions in a timely manner:

4.1       Payment.  Owner shall timely pay the Contract Price in accordance with
the provisions of ARTICLE 7 hereof.

4.2       Permits.    Owner shall be responsible for obtaining and maintaining
(i) the Permits listed in Attachment Q, (ii) those Permits for the Project that
are required to be maintained in Owner’s name and (iii) those Permits required
for the operation of the Facility.  To the extent Owner has not obtained any
Permits prior to the Effective Date, Owner shall obtain such Permits in
accordance with the schedule contained in Attachment Q and Owner shall provide
Contractor with copies of such Permits within five (5) Business Days after
obtaining them.

4.3       Access on the Site.

A.       Owner shall provide Contractor with access on the Site to the extent
necessary to perform any LNTP Work and, in any event, upon issuance of
NTP.  Subject to Sections 3.24 and 3.25, such access shall be sufficient to
permit Contractor to progress with construction on a continuous basis without
material interruption or interference.

B.       Contractor understands that Owner may choose to develop the Expanded
Facility under one or more separate agreements (the “Expanded Facility
Work”).  Such other agreements may or may not involve Contractor and may be
performed during the

 

43

 

course of the completion of the Work covered under this Agreement. If such
Expanded Facility Work does not involve Contractor, and as a result of such
concurrent activities, impacts the performance of the Work on the Site, then
Contractor shall be entitled to a Change Order to the extent such Expanded
Facility Work adversely affects the Key Dates or Contractor’s costs of
performance of the Work to the extent permitted in Section 6.2A.1 and 6.8,
provided that Contractor complies with the notice and Change Order request
requirements set forth in Sections 6.2 and 6.5.

4.4       Operation Personnel.  Owner shall retain sixty (60) competent
operating personnel (who are capable of being trained by Contractor) to assist
Contractor with the commissioning and start-up  of the Facility under the
supervision of Contractor during commissioning as set forth in Attachment T and
to operate the Facility prior to Substantial Completion of each Train under the
supervision of Contractor as set forth in Attachment A and Attachment V (Owner’s
“operation personnel”).  Until Substantial Completion of the applicable Train,
such personnel shall be under the control of and supervised by Contractor in
accordance with Section 3.29, subject to Owner’s indemnity obligations in
Section 17.2.

4.5        Legal Description and Survey.  Owner shall provide to Contractor for
Contractor’s information a survey of the Site showing the boundaries of the Site
and three (3) survey control points, the proper placement of which Contractor
has confirmed as set forth in Section 3.23.

4.6        Owner-Furnished Items.

A.     Rely Upon Information. Owner shall be responsible for the Rely Upon
Information identified in Attachment BB.  Should Contractor discover an error,
omission or inaccuracies in such information, Contractor shall be entitled to a
Change Order to the extent permitted under Sections 6.2A.9 and 6.8.

B.     Owner-Furnished Items.  Owner shall, at no cost to Contractor, provide
the items listed in Attachment V (“Owner-Furnished Items”) within the times and
at the locations set forth therein, subject to the conditions specified therein.

C.     Natural Gas Feed to Achieve Substantial Completion.  As between Owner and
Contractor under this Agreement and subject to Section 4.6D, Owner shall procure
and make natural gas feed available for the Commissioning, start-up, cool down
and testing of each Train (including natural gas utilized in the initial
cool-down) subject to the conditions in Attachment V.  The natural gas feed to
each Train will meet the pressure, temperature and quality requirements set
forth in Schedule A-2.  Such natural gas feed shall be made available by (or on
behalf of) Owner at the inlet facilities to be constructed by Contractor as part
of the Work. As between Owner and Contractor under this Agreement, Owner shall
procure, at its sole cost, all natural gas feed in order for Contractor to
achieve Substantial Completion of each Train.  Contractor shall use GECP to
minimize the amount of natural gas flaring or venting (and at all times
complying with any restrictions required under Applicable Law) that is necessary
to achieve Substantial Completion, and the start-up, Commissioning and testing
procedures agreed upon by the Parties shall be developed and administered in a
manner to minimize natural gas flaring and venting.

44

D.     Feed Gas Delivery.

1.      In connection with each Train, Contractor shall give its best estimate
of when natural gas feed is required to produce the LNG necessary to achieve
RLFC of such Train, and such estimate shall be given in a written notice with
each RLFC Window Period notice as set forth in Section 11.2B.  Such notice shall
include the quantities of feed gas needed, including a range of Days and range
of flows for each Day.

2.      For all other circumstances that Contractor may require natural gas feed
up to the achievement of Substantial Completion of a Train, Contractor shall
provide Owner:

(i)    written notice at least sixty (60) Days prior to Contractor needing its
first deliveries of natural gas feed including a range of Days and a range of
flows for each Day which Contractor, using GECP, believes it will need for
delivery of natural gas feed; and

(ii)    a second written notice at least thirty (30) Days prior to Contractor
needing its first deliveries of natural gas feed, with an updated forecast of
the Days and amounts of natural gas feed deliveries (within the ranges provided
by Contractor in its initial notice delivered pursuant to Section 4.6D.2(i)).

3.      Provided Contractor provides notice in accordance with Section 4.6D.1
and 4.6D.2, Owner will procure such natural gas feed subject to the conditions
in Attachment V;  provided, however, notwithstanding anything to the contrary in
this Agreement, Owner is not obligated to provide any natural gas feed for Train
1 and Train 2 prior to the dates set forth in Attachment V.

E.    LNG Tankers.  Owner will provide LNG Tanker capacity in accordance with
Section 11.2, provided, however, notwithstanding anything to the contrary in
this Agreement, Owner is not obligated to provide any LNG Tanker capacity for
Train 1 or Train 2 prior to the dates set forth in Attachment V.

F.    Electrical Power.  Owner shall procure and make permanent electric power
available for the operation of such Train in accordance with Attachment V.  Such
electric power shall be made available by (or on behalf of) Owner at the Pompano
switch yard to be located at the Site.

4.7        Owner Representative.  Owner designates [***] as the Owner
Representative.  Notification of a change in Owner Representative shall be
provided in advance, in writing, to Contractor.

4.8        Texas Sales and Use Tax.

45

A.    Sales and Use Taxes Exemption Certificates on Equipment.

1.      For Texas Sales and Use Tax, this Agreement shall be considered to be a
separated contract for the construction of new non-residential real property as
defined under Applicable Law, including 34 Tex. Admin Code Rule §
3.291(a)(13).  Contractor shall ensure that all Subcontracts are separated for
Sales and Use Tax purposes.

2.      The associated portion of the Contract Price attributable to each piece
of Equipment is located in Attachment DD, which has been prepared to satisfy the
requirements of Applicable Law of Texas for a separated contract.  Contractor
shall, with respect to any Change Order entered into between Owner and
Contractor that results in an update to Attachment DD, provide such update to
Owner for its review as part of the documentation required in ARTICLE 6.

3.      Prior to issuance of NTP or any LNTP directing Contractor to procure any
Equipment, and to the extent not already included in Attachment DD, Owner shall
issue a Texas direct pay exemption certificate to Contractor, and Contractor
shall not invoice Owner for any Texas Sales and Use Tax on Equipment.  Pursuant
to direct pay permit status, Owner shall pay applicable Texas Sales and Use Tax
on Equipment directly to the State of Texas.  Contractor shall provide the
documents and information necessary to allow the Owner to properly determine
this tax liability.  Contractor shall maintain for Owner’s review copies of
exemption certificates and other similar documentation necessary to support all
Texas Sales and Use Tax exemptions that may be available to Owner, Contractor or
any Subcontractor or Sub-subcontractor in connection with the Work.

4.      Contractor shall reasonably cooperate with Owner to minimize any and all
Texas Sales and Use Tax relating to the Project.  If Contractor or any
Subcontractor or Sub-subcontractor incurs any Texas Sales and Use Tax on any
items of Equipment listed in Attachment DD for which Owner provided Contractor
with a valid direct pay exemption certificate, Contractor shall be responsible
for the payment of such Texas Sales and Use Tax without reimbursement by Owner
and Contractor shall indemnify, defend and hold harmless any and all Owner
Indemnified Parties from and against any claims by a Governmental
Instrumentality for such Texas Sales and Use Tax.

B.    Additional Contractor Texas Sales and Use Tax Responsibilities.  For Texas
Sales and Use Tax purposes, Contractor shall be considered a retailer of all
Equipment incorporated into the Work. Contractor shall issue a valid Texas Sales
and Use Tax resale exemption certificate for such Equipment to its
Subcontractors, and Contractor shall not pay, consistent with such exemption
certificate, any sales and use tax on such Equipment to
Subcontractors.  Notwithstanding the foregoing, Contractor shall remain
responsible for the payment of all Taxes on account of the Work, including Texas
Sales and Use Tax on any purchase, lease or rental of construction equipment and
on any other purchases related to Work other than the Equipment.

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C.    Taxes on Delivered Property.  Owner shall be responsible for all property
tax on Equipment that has been delivered to the Site and laydown areas.

4.9        Hazardous Materials.  If Pre-Existing Hazardous Materials are
discovered at the Site, Owner shall, at the sole cost, expense and liability of
Owner (except for those costs, damages, losses and expenses for which Contractor
is responsible and/or liable under Section 3.17), remediate, remove, transport,
and dispose of such Pre-Existing Hazardous Materials.

4.10       LNG Tanker Release.  Owner shall endeavor to obtain a release of
Contractor Indemnified Parties and Owner Indemnified Parties from the owner of
any LNG Tanker and related LNG cargo from any and all damages, losses, costs and
expenses arising out of or resulting from claims for damage to or destruction of
an LNG Tanker and loss of the related LNG cargo or personal injury or death of
any employee, officer or director employed by the company operating, owning or
leasing such LNG Tanker or owning the related LNG cargo in connection with the
delivery of LNG of any LNG Tanker to the Project where such damage, destruction,
loss, injury or death occurs prior to Substantial Completion of the applicable
Train.  Owner shall endeavor to obtain a release which shall apply regardless of
the cause of such damage, destruction, injury or death, including the sole or
joint negligence, breach of contract or other basis of liability of any member
of the Contractor Indemnified Parties and any member of the Owner Indemnified
Parties.

ARTICLE 5

COMMENCEMENT OF WORK, KEY DATES, AND SCHEDULING OBLIGATIONS

5.1        Commencement of Work.  Upon Contractor’s receipt from Owner of an
LNTP or NTP, Contractor shall immediately commence with the performance of the
Work specified in such LNTP or NTP.

5.2         Limited Notice to Proceed/Notice to Proceed.

A.    Limited Notice to Proceed.  On the Effective Date, Owner shall issue an
LNTP authorizing and requiring Contractor to commence performance of the Work
described in Schedule H-3 (“LNTP No. 1”), subject to the maximum cost agreed
upon by the Parties as set forth in LNTP No. 1 (and such maximum cost may be
increased by written agreement of the Parties).  All Work performed under LNTP
No. 1 shall be performed in accordance with the terms and conditions of this
Agreement.  Contractor shall be paid for such LNTP No. 1 Work pursuant to the
terms and conditions of this Agreement and LNTP No. 1, with all payment for Work
under LNTP No. 1 credited against the Contract Price.

B.    Additional LNTPs.  At any time prior to the date of issuance of NTP, Owner
may issue additional LNTPs using the form attached hereto as Schedule H-1, which
shall authorize and require Contractor to commence performance of a specified
portion of the Work (provided that the Parties must mutually agree to any LNTPs
that require procurement of Equipment or construction Work). All Work performed
under such LNTP shall be performed in accordance with the terms and conditions
of this Agreement. An LNTP shall specify the maximum total cost of such
specified Work, and Contractor shall be paid for such specified Work pursuant to
the terms and conditions of this Agreement, with the payments under such LNTP
credited against the Contract Price.

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C.    With respect to any LNTP that is issued by Owner, Owner shall not be
liable for any cancellation payments under an LNTP if Owner does not issue NTP,
unless Owner issued an LNTP that included the ordering of Equipment and such
cancellation charges are specifically agreed upon in such LNTP.

D.    Notice to Proceed.  Unless otherwise specifically set forth in an LNTP,
Contractor shall not commence performance of the Work until Owner issues NTP
authorizing the same pursuant to the terms and conditions of this
Agreement.  Upon Contractor’s receipt from Owner of NTP, Contractor shall
immediately commence with the performance of the Work.  NTP shall be issued in
the form attached hereto as Schedule H-2. Owner shall not issue NTP until the
following conditions precedent have been fulfilled or waived by Contractor:

1.      Owner has furnished Contractor with documentation demonstrating Owner
has sufficient funds to fulfill its payment obligations under this Agreement as
payments become due hereunder, or Owner has obtained firm commitments from
Lenders that are sufficient (when taken together with Owner’s funds and the
amount of equity that has been committed to Owner) to fulfill such payment
obligations under this Agreement, including (a) satisfaction, or waiver by
Lenders, of all applicable conditions precedent to the occurrence of the closing
date of the financing, which shall be prior to or contemporaneous with the
issuance of the NTP, and (b) a signed declaration by an officer of Owner
certifying that the credit agreement with respect to such financing has been
executed by Owner and Lenders, to be delivered prior to or contemporaneously
with NTP;

2.      Owner has provided, or is able to provide, Contractor with access on the
Site in accordance with Section 4.3;

3.      Owner has obtained all Owner Permits which are shown in Attachment Q as
required to be obtained prior to the issuance of the NTP;

4.      Owner has made payment to Contractor of all undisputed amounts due and
owing as of the date of NTP that were invoiced in connection with Contractor’s
performance of the LNTP Work; and

5.      If Owner fails to issue NTP on or before the Second NTP Deadline, the
Parties have agreed to the adjustments to the Contract Price and Guaranteed
Substantial Completion Dates as provided in Section 5.2E.2, and shall execute
the applicable Change Order.

E.    Delay in NTP.  In the event Owner fails to issue NTP in accordance with
Section 5.2D on or before January 2, 2020 (the “Initial NTP Deadline”), then
Contractor shall be entitled to a Change Order as set forth in this Section
5.2E.

1.      If Owner issues NTP after the Initial NTP Deadline but on or before
April 22, 2020 (the “Second NTP Deadline”), then Contractor shall be entitled to
a Change Order adjusting the Contract Price (including the pricing of any
Additional Work Options elected by Owner), as applicable, upward in the
applicable amount set forth

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in Schedule C-5.  Such adjustment to the Contract Price shall be Contractor’s
sole and exclusive remedy for Owner’s delay in issuing NTP after the Initial NTP
Deadline but prior to the Second NTP Deadline.  For the avoidance of doubt,
Owner’s delay in issuing NTP as described in this Section 5.2E.1 shall not under
any circumstances result in a Change Order adjusting the Guaranteed Substantial
Completion Date.

2.      If Owner desires to issue NTP after the Second NTP Deadline, Contractor
shall, at Owner’s request, provide its revised proposal for the Work, including
revised Contract Price and/or pricing for Additional Work Options and/or
Guaranteed Substantial Completion Dates. If Owner agrees to such proposal, all
elements of the agreed changes shall be set forth in a Change Order, provided
that Contractor shall not be entitled to an adjustment to the Contract Price or
to an adjustment to the Guaranteed Substantial Completion Dates for any (i)
changes in design, quantities or Equipment (unless Owner directs such changes in
design, quantities or Equipment through a Change Order) or (ii) errors or
omissions of Contractor (other than errors or omissions in Contractor’s
assumptions related to a change in market conditions occurring after the end of
the Second NTP Deadline).  Such adjustment to the Contract Price and Guaranteed
Substantial Completion Dates shall be Contractor’s sole and exclusive remedy for
Owner’s delay in issuing NTP after the Second NTP Deadline (except as set forth
in Section 5.2E.3).

3.      If Owner fails to issue NTP on or before April 22, 2021 (the “Final NTP
Deadline”), Contractor may terminate this Agreement without liability to Owner,
provided that Contractor issues written notice to Owner within seven (7) Days
after the Final NTP Deadline stating its intent to terminate this Agreement and
Owner has not, within thirty (30) Days after receipt of such notice, issued NTP
in accordance with Section 5.2D.  Notwithstanding the foregoing, Contractor may
not terminate this Agreement if Contractor is performing Work under an LNTP.  In
the event of such termination under this Section 5.2E.3, Contractor shall have
the rights (and Owner shall make the payments) provided for in Section 16.2 in
the event of an Owner termination for convenience.

F.    Contractor shall not be entitled to any increase in the Contract Price or
any adjustment to the Guaranteed Substantial Completion Dates as a result of
Owner issuing NTP on any date prior to the Initial NTP Deadline, and Contractor
shall not be entitled to any adjustment to the Guaranteed Substantial Completion
Dates as a result of Owner issuing NTP on any date after the Initial NTP
Deadline but prior to the Second NTP Deadline.  Notwithstanding the forgoing, if
Owner issues NTP prior to the expiration of the Minimum LNTP No. 1 Performance
Period, Contractor shall be entitled to increase the Guaranteed Substantial
Completion Dates a Day for every Day that Owner issues NTP prior to date on
which the Minimum LNTP No. 1 Performance Period expires.  The “Minimum LNTP No.
1 Performance Period” is [***] ([***]) Days.

5.3        Key Dates.  The Key Dates may only be adjusted by Change Order as
provided under this Agreement.

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A.    Guaranteed Substantial Completion Dates.  Contractor shall achieve:

1.      Substantial Completion of Train 1 no later than [***] ([***]) Days
following Contractor’s receipt of NTP (“Guaranteed Train 1 Substantial
Completion Date”); and

2.      Substantial Completion of Train 2 no later than [***] ([***]) Days
following Contractor’s receipt of NTP (“Guaranteed Train 2 Substantial
Completion Date”),

each a “Guaranteed Substantial Completion Date” and collectively, the
“Guaranteed Substantial Completion Dates.”  The Guaranteed Substantial
Completion Dates shall only be adjusted by Change Order as provided under this
Agreement.

B.    Final Completion Date.  Contractor shall achieve Final Completion no later
than [***] ([***]) Days after achieving Substantial Completion of Train 2
(“Final Completion Date”).  The Final Completion Date shall only be adjusted by
Change Order as provided under this Agreement.

5.4        CPM Schedule.

A.    CPM Schedule.  No later than thirty (30) Days after the Effective Date,
Contractor shall prepare and submit to Owner for Owner’s review and approval,
not to be unreasonably withheld: (i) a detailed level 3 resource/man-hour loaded
critical path method schedule for the Work using the latest version of Primavera
Project Planner (“Primavera Project Planner”) and meeting all requirements of
this Section 5.4A (such schedule, once approved by Owner, is hereinafter
referred to as the “CPM Schedule”) and (ii) a detailed resource plan generated
by the CPM Schedule and developed in accordance with Attachment B and Attachment
X.  Such submission to Owner of the CPM Schedule shall be in hard copy and
native electronic format. The CPM Schedule shall be consistent with the Key
Dates and shall represent Contractor’s best judgment as to how it shall complete
the Work in compliance with the Guaranteed Dates.  The CPM Schedule shall, at a
minimum, be detailed at a level 3 (with each activity containing Work for on
discipline or craft having a maximum duration of twenty (20) Days, except in
limited circumstances when, due to the nature of the activity, a longer duration
is necessary) for all activities for the Facility (including engineering,
procurement, prefabrication or pre-assembly prior to erection, delivery of
equipment, construction, required Owner or government agency inspections,
procurement of Contractor permits, construction, pre-commissioning,
Commissioning, testing and startup) and shall comply with GECP.  Without
limitation of the foregoing, the CPM Schedule shall: (i) show the duration,
early/late start dates, early/late finish dates and available total float value
for each activity, show a unique activity number, activity description, actual
start/finish dates, remaining duration, physical percent complete and reflect
logical relationships between activities, show an uninterrupted critical path
from NTP through each of the Key Dates including Substantial Completion of each
Train and Final Completion of the Facility; (ii) be tagged by activity codes to
allow sorting and filtering by responsible Contractor, Subcontractor,
Sub-subcontractor, Owner activities, discipline, craft, major work area,
engineering, procurement, construction and

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commissioning (iii) the Work Breakdown Structure  identifier shall be included
for each activity, and (iv) be man-hour loaded to reflect the projected manpower
to be used per activity (whether provided by Contractor or any Subcontractor or
Sub-subcontractor), showing the number of personnel, and a general description
of the Work being performed.  Contractor shall submit with the CPM Schedule the
following: (a) progress “S” curve, showing the baseline plan, actual and
forecast progress by Month for total progress of the Work, which shall be based
on the CPM Schedule; (b) engineering discipline and overall engineering and
construction area and overall manpower histograms showing forecast manpower
required by Month, for scheduled completion of the Work; (c) Drawing log showing
the Drawing number, title, planned, actual and forecast released for
construction dates by discipline and reporting period; and (d) cost reporting as
set forth in Attachment X.  Contractor shall use the CPM Schedule in planning,
organizing, directing, coordinating, performing and executing the Work, and the
CPM Schedule shall be the basis for evaluating progress of the Work.  The CPM
Schedule shall reflect the critical path to Substantial Completion to each
Train.

B.    Owner Review of the CPM Schedule.  Owner may review the CPM Schedule for
general conformance with this Agreement, and issue written comments and proposed
changes of such CPM Schedule.  If Owner reasonably determines that the CPM
Schedule does not conform to this Agreement Contractor shall promptly revise and
resubmit the CPM Schedule to Owner.  Once the CPM Schedule and the required
submittals have been approved by Owner, this version of the CPM Schedule shall
be the baseline CPM Schedule for the Work.  Owner’s review or acceptance of the
CPM Schedule shall not relieve Contractor of any obligations for the performance
of the Work, change any Key Date, nor shall it be construed to establish the
reasonableness of the CPM Schedule.

C.    Monthly Updates to CPM Schedule.  After acceptance by Owner of the CPM
Schedule, Contractor shall manage and update the CPM Schedule no less frequently
than once per Month with Primavera Project Planner, using the critical path
method, to reflect the actual progress to date (“Monthly Updated CPM Schedule”);
provided, however, Contractor may not modify any Key Date without a Change Order
executed pursuant to this Agreement, nor shall Contractor change any dates that
relate to Owner’s obligations without obtaining Owner’s written consent.  The
Monthly Updated CPM Schedule shall be in the same detail and form and meet all
of the other requirements specified for the CPM Schedule and shall be submitted
by Contractor to Owner in native electronic format and hard copy with each
Invoice.  Contractor shall provide all supporting data reasonably necessary to
validate the progress shown in each schedule update including: (a) percent
complete curves for the total project, (b) engineering and design, (c)
procurement, (d) construction, and (e) start-up and Commissioning.  Contractor
shall also provide key commodity installation data including: (f) budgeted
quantity, (g) current estimated quantity, (h) quantity installed by period, (i)
overall quantity installed and forecast to complete to validate claimed overall
project completion status.  Contractor shall promptly correct any material
errors or inconsistencies in the updates to the CPM Schedule identified to
Contractor by Owner and resubmit a corrected Monthly Updated CPM Schedule for
Owner’s review.

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D.    Other Reporting.  Without limitation to Contractor’s other reporting
requirements under this Agreement, Contractor shall provide to Owner the
following reports on a weekly or Monthly basis, as required and described in
greater detail in Attachment X: (i) Gantt charts organized by work breakdown or
activity codes, (ii) engineering deliverable logs showing budgeted quantities,
achieved quantities and forecast quantities by date, (iii) major Equipment logs
showing bid, purchase order, inspection points and delivery dates, (iv)
construction installation logs showing budget quantities, achieved quantities
and forecast quantities for key commodities, (v) manpower curves for engineering
showing discipline budget quantities, achieved quantities and forecast
quantities, (vi) manpower curves for construction showing craft planned
manpower, actual manpower, and forecast manpower, (vii) Invoice and payment log
showing Invoice numbers, dates, and amounts and payment receipt dates, and
(viii) Change Order logs showing tracking numbers, descriptions, amounts,
submittal dates and status (pending, approved or rejected).

E.    Form of Submittals.  All submittals by Contractor to Owner of the CPM
Schedule, Recovery Schedule, Acceleration Schedule and any Monthly Updated CPM
Schedule shall be in both hard copy and native electronic Primavera Project
Planner format.  One (1) hard copies of each submittal shall be provided to
Owner and one (1) electronic copy shall be provided to Owner in a mutually
agreeable form.

5.5        Recovery and Recovery Schedule.  If, at any time during the
prosecution of the Work, should (i) the Monthly Updated CPM Schedule shows (or
if Contractor has not provided the Monthly Updated CPM Schedule and Owner
reasonably determines) that any activity on the critical path of the Monthly
Updated CPM Schedule is delayed such that achievement of a Key Date (including a
Guaranteed Date) is forecasted to occur thirty (30) or more Days after the
applicable Key Date, or (ii) Contractor fails to achieve a Key Date within
thirty (30) Days after the applicable Key Date, then Owner may, in addition to
any other remedies that it may have under this Agreement, require that, as soon
as reasonably possible, Contractor prepare a schedule to explain and display how
it intends to regain compliance with the CPM Schedule to the extent required to
achieve Substantial Completion of the applicable Train prior to the Guaranteed
Substantial Completion Date for such Train (“Recovery Schedule”).  Contractor
shall do the following after written notification by Owner of the requirement
for a Recovery Schedule:

A.    Within ten (10) Business Days after such notice, Contractor shall prepare
the Recovery Schedule and submit it to Owner for its review and approval, not to
be unreasonably withheld.  Contractor shall prepare the Recovery Schedule even
if Contractor disputes Owner’s determination of the need for a Recovery
Schedule.  The Recovery Schedule shall represent Contractor’s best judgment as
to how it shall regain compliance with the CPM Schedule to the extent required
to achieve Substantial Completion of the applicable Train prior to the
Guaranteed Substantial Completion Date for such Train.  The Recovery Schedule
shall (i) be prepared in accordance with GECP, (ii) have a similar level of
detail as the CPM Schedule and (iii) meet the requirements specified for the CPM
Schedule.

B.    Within ten (10) Business Days after Owner’s receipt of such Recovery
Schedule, Contractor shall participate in a conference with Owner, and with any
other

52

Person, including Subcontractors and Sub-subcontractors, whom the Parties
mutually agree to participate, to review and evaluate the Recovery
Schedule.  Any revisions necessary as a result of this review shall be
resubmitted for review by Owner within three (3) Days following the
conference.  The revised Recovery Schedule shall then be used by Contractor in
planning, organizing, directing, coordinating, performing, and executing the
Work (including all activities of Subcontractors and Sub-subcontractors) for the
duration specified in Section 5.5A, to regain compliance with the CPM Schedule
to the extent required to achieve Substantial Completion of the applicable Train
prior to the Guaranteed Substantial Completion Date for such Train.

C.    Contractor shall perform the Work in accordance with the Recovery
Schedule.

D.     Five (5) Days prior to the expiration of the Recovery Schedule,
Contractor shall meet with Owner at the Site to determine the effectiveness of
the Recovery Schedule and to determine whether Contractor has regained
compliance with the CPM Schedule and the Key Dates to the extent required for
Substantial Completion of the applicable Train to occur before the applicable
Guaranteed Substantial Completion Date.  At the direction of Owner, one of the
following shall happen:

1.      If, in the reasonable opinion of Owner, Contractor is still behind
schedule, Contractor shall be required to prepare another Recovery Schedule
pursuant to Section 5.5A above, to take effect during the immediate subsequent
pay period or other period selected in writing by Owner.  Contractor shall
prepare such Recovery Schedule even if Contractor disputes Owner’s opinion.

2.      If, in the reasonable opinion of Owner, Contractor has sufficiently
regained compliance with the CPM Schedule and the Key Dates, so that the
applicable Train will achieve Substantial Completion on or before the applicable
Guaranteed Substantial Completion Date, Contractor shall not be required to
submit a new Recovery Schedule and shall perform in accordance with the CPM
Schedule.

E.      In preparing and executing the Recovery Schedule, Contractor shall take
the steps necessary to regain compliance with the CPM Schedule so that the
applicable Train will achieve Substantial Completion on or before the applicable
Guaranteed Substantial Completion Date, including establishing additional
shifts, hiring additional manpower, paying or authorizing overtime, providing
additional Construction Equipment, and resequencing activities.

F.     The cost of preparing and performance in accordance with the Recovery
Schedule shall be for Contractor’s account.

G.     Owner’s requirement, review and approval of the Recovery Schedule shall
not relieve Contractor of any obligations for the performance of the Work,
change any Key Dates, or be construed to establish the reasonableness of the
Recovery Schedule.

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H.     If, at any time prior to the applicable Guaranteed Substantial Completion
Date, Contractor’s performance of the Work is delayed such that Substantial
Completion of a Train is projected to achieve Substantial Completion beyond the
applicable Guaranteed Substantial Completion Date (as may be adjusted by Change
Order) to such an extent that the Delay Liquidated Damages cap in Section 20.2
would apply, and (i) Contractor fails to provide a Recovery Schedule in
accordance with this Section 5.5 or (ii) Contractor provides a Recovery Schedule
but Contractor fails to materially comply with such Recovery Schedule, then
Contractor shall be in Default and Owner, after written notice to Contractor,
and a cure period of fifteen (15) Days from the date of Owner’s notice, shall
have the right, prior to the applicable Guaranteed Substantial Completion Date,
to terminate Contractor’s performance of the Work in accordance with Section
16.1A.

5.6         Acceleration and Acceleration Schedule.  Even if the Work is
otherwise in compliance with the CPM Schedule and Key Dates, Owner may, at any
time, direct Contractor by Change Order or Change Directive to accelerate the
Work by, among other things, establishing additional shifts, performing overtime
Work, providing additional Construction Equipment or expediting Equipment;
provided, however, (i) in no event shall Owner order with a Change Directive
acceleration of the Work requiring Contractor to achieve any Substantial
Completion or the Final Completion prior to the respective, original Guaranteed
Substantial Completion Dates or the Final Completion Date or if such
acceleration is not technically feasible and (ii) Contractor’s obligation with
respect to an acceleration directive from Owner shall be limited to using
commercially reasonable efforts to accelerate the CPM Schedule.  In the event of
this directive, Owner shall pay to Contractor any (i) documented direct and
indirect costs (and profit) clearly and solely attributable to such
acceleration; and (ii) appropriate incentives, if any, that the Parties agree to
in advance and which are set forth in the Change Order or Change Directive, as
applicable.  Any Change Directive shall be governed by Sections 6.1E and
6.2D.  Any adjustment to the Contract Price or any other Changed Criteria that
the Parties agree in a Change Order will be changed by such acceleration for
Owner’s acceleration of the Work shall be implemented by Change Order.  If Owner
directs Contractor to accelerate the Work, Contractor shall promptly commence
and diligently perform the acceleration of the Work as directed by Owner, and
shall prepare a schedule to explain and display how it intends to accelerate the
Work and how that acceleration will affect a critical path of the CPM Schedule
(the “Acceleration Schedule”).  With respect to the Acceleration Schedule,
Contractor shall do the following:

A.    No later than the thirtieth (30th) Day after such directive, Contractor
shall prepare the Acceleration Schedule and submit it to Owner for its
review.  The Acceleration Schedule shall represent Contractor’s best judgment as
to how it shall satisfy such acceleration directive.  The Acceleration Schedule
shall be prepared using GECP and to a similar level of detail as the CPM
Schedule.

B.    On the thirtieth (30th) Day after issuance of such directive (or such
longer time as specified in writing by Owner), Contractor shall participate in a
conference with Owner, and with any other Person, including Subcontractors and
Sub-subcontractors, whom Owner requests and Contractor agrees (with such
agreement not to be unreasonably withheld) to participate, to review and
evaluate the Acceleration Schedule.  Any revisions to the Acceleration Schedule
necessary as a result of this review shall be resubmitted for review by Owner as
soon as reasonably practicable.  The revised Acceleration Schedule

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shall then be the schedule which Contractor shall use in planning, organizing,
directing, coordinating, performing, and executing that portion of the Work that
is affected by such acceleration, with the CPM Schedule governing the
performance of all other Work.

C.    Owner’s review and approval of the Acceleration Schedule shall not
constitute an independent evaluation or determination by Owner of the
workability, feasibility, or reasonableness of that schedule.

ARTICLE 6

CHANGES; FORCE MAJEURE; AND OWNER CAUSED DELAY

6.1        Owner’s Right to Change Order.  Owner may, at any time, instruct
Contractor to alter, amend, omit, or suspend the Work or modify the requirements
of this Agreement in accordance with this Section 6.1.

A.    Prior to the execution of any Change Order under this Section 6.1, Owner
shall notify Contractor of the nature of the proposed addition to, omission
from, deletion from, suspension of, or any other modification or adjustment to
the requirements of this Agreement, by issuing an Owner’s Change Request to
Contractor in the form of Schedule D-3.

B.    Within fourteen (14) Business Days after Contractor’s receipt of such
Owner’s Change Request (when reasonably possible but if it is not reasonably
possible for Contractor to provide all of the information required under this
Section 6.1B within such fourteen (14) Business Day period, Contractor shall
provide Owner with as much information as reasonably possible as well as a
written explanation of the reason that additional time is required, but in no
event later than thirty (30) Business Days following Contractor’s receipt of
Owner’s written request for a change).  Contractor shall respond to Owner with a
written statement in the form of Schedule D-3 detailing:

1.      the description of Work to be performed and a program for its execution;

2.      a preliminary assessment of the effect (if any) such request, were it to
be implemented by Change Order, would have on the Changed Criteria; and

3.      the original Owner’s Change Request number and revision numbers.

C.    After submission of Contractor’s written assessment in accordance with
Section 6.1B and upon Owner’s written request, Contractor shall provide Owner
within fourteen (14) Business Days (or if Contractor requires third party quotes
in order to prepare the comprehensive written estimate required under this
Section 6.1C or states that a longer time period is reasonably required at the
time Contractor provides the preliminary assessment, within thirty (30) Days or
such longer period of mutually agreed by the Parties in writing), a
comprehensive written estimate setting forth in detail the effect, if any, which
such request, if implemented by Change Order, would have on the Changed
Criteria.  This detailed estimate shall (i) include a fixed price breakdown
(unless otherwise agreed by the Parties in writing) for the Work to be performed
derived from the unit rates set forth in

55

Schedule D-5 to the extent applicable or, if not stated therein, derived from
rates not to exceed then-current market rates, (ii) include all information
required by Section 6.5B, and (iii) supplement and supersede the assessment
provided under Section 6.1B.

D.     If the Parties agree on such Changed Criteria for such request, the
Parties shall execute a Change Order, which shall be in the form of Schedule D-1
and such Change Order shall become binding on the Parties, as part of this
Agreement.

E.     If the Parties cannot agree on such Changed Criteria for such request
within fourteen (14) Days of Owner’s receipt of Contractor’s comprehensive
written estimate specified in Section 6.1C, unless mutually extended in writing
by the Parties, or if Owner desires that the proposed changed Work set forth in
the Owner’s Change Request commence immediately without the requirement of an
estimation or a detailed estimate by Contractor as required under Sections 6.1B
or 6.1C, Owner may, by issuance of a Change Directive in the form attached
hereto as Schedule D-2, require and authorize Contractor to commence and perform
the changed Work specified in such Change Directive in accordance with the rates
specified in Schedule D-5 (or if not set forth therein, at rates not to exceed
then current market rates) with the effect of such unilateral Change Order on
the Changed Criteria (or if the Parties agree on the effect of such unilateral
Change Order for some but not all of the Changed Criteria, the impact of each of
the components of the Changed Criteria on which the Parties disagree) to be
determined as soon as possible but without prejudice to Contractor’s right to
refer any Dispute for resolution in accordance with ARTICLE 18. Notwithstanding
the foregoing, Owner may not issue a Change Directive that would cause an
adjustment to the Minimum Acceptance Criteria, the Performance Guarantees or
require Contractor to handle, transport or remediate any Pre-Existing Hazardous
Materials without Contractor’s agreement in the form of a mutual Change
Order.  After Owner’s issuance of a Change Directive, the Parties shall continue
to negotiate in good faith to reach agreement on the Changed Criteria.  If the
Parties cannot agree on the effect of such Change Directive within a reasonable
period of time but no longer than [***]  ([***]) Days after Owner’s receipt of
all supporting documentation reasonably required by Owner to evaluate the
Changed Criteria, then the Dispute shall be resolved as provided in ARTICLE
18.  Pending resolution of the Dispute, Contractor shall perform the Work as
specified in such Change Directive, and Owner shall pay Contractor on a Monthly
basis for (i) additional design and engineering Work related to the changed Work
specified in the Change Directive in accordance with the rates set forth in
Schedule D-5; (ii) the actual purchase price of Equipment procured by
Contractor, plus associated margin of six percent (6%) on such purchase price
for profit and corporate overhead; and (iii) Work involving minor changes to be
performed in the field (such as relocation of Equipment within the Facilities)
where unit rates are provided in this Agreement.  When Owner and Contractor
agree on the effect of such Change Directive on all of the Changed Criteria,
such agreement shall be recorded by execution by the Parties of a Change Order
in the form attached hereto as Schedule D-1, which shall supersede the Change
Directive previously issued and relating to such changed Work.  Contractor shall
be considered to be in Default under Section 16.1 should it (i) fail to commence
(which may include planning or design activities) the performance of the changed
Work or other obligations required in such Change Directive within seven (7)
Business Days after receipt of such Change Directive (or within such other time
as specified in writing by Owner) or (ii) fail to

56

diligently perform the changed Work or other obligations required in such Change
Directive; provided, however, in no event shall Owner be entitled to issue any
unilateral Change Directive (a) where such unilateral Change Directive would
result in an increase in the Contract Price exceeding [***] U.S. Dollars (U.S.$
[***]), or (b) if in conjunction with other outstanding unilateral Change
Directives issued by Owner, such unilateral Change Directives would in
themselves result in an increase in the Contract Price equal to or exceeding to
[***] U.S. Dollars (U.S.$ [***]).

6.2        Change Orders Requested by Contractor.

A.    Contractor shall only have the right to a Change Order in the event of any
of the following occurrences:

1.      Acts or omissions of an Owner Indemnified Party, Owner’s consultants
under Section 2.5D or any other Person acting on behalf of or under the control
of Owner that constitute a failure to perform an express term of this Agreement
by Owner and that adversely affect Contractor’s actual cost (which costs shall
be adequately documented and supported by Contractor) of performance of the Work
or ability to perform any material requirement under this Agreement.  If such
acts or omissions cause a delay (as that term is defined in Section 6.9),
Contractor shall be entitled to relief to the extent allowed under Section 6.8;

2.      Force Majeure to the extent allowed under Section 6.7A;

3.      Acceleration of the Work ordered by Owner pursuant to Section 5.6;

4.      Owner’s request for an increase in coverage under the Letter of Credit
pursuant to Section 9.2 to cover any increase in the Contract Price as a result
of Change Orders;

5.      To the extent expressly permitted under Sections 2.5B.2(i), 3.3C.5,
3.10, 3.12C, 3.17, 3.27A, 3.27B, 5.2E.2, 7.2D, 8.2C, 11.2D and 12.2A;

6.      To the extent expressly permitted under Sections 3.4C, 5.2E.1, 7.9 and
9.1C;

7.      Changes in Law that occur after the Effective Date and that adversely
affect Contractor’s actual cost (which costs shall be adequately documented and
supported by Contractor) of performance of the Work or ability to perform any
requirement under this Agreement.  If such Changes in Law causes a delay (as
that term is defined Section 6.9), Contractor shall be entitled to relief to the
extent allowed under Section 6.8.  Notwithstanding anything provided in this
Agreement, any change in Applicable Law related to tariffs, quotas, or duties
shall be addressed exclusively and Contractor shall be entitled to a Change
Order only to the extent permitted in Attachment FF (Relief for Changes in U.S.
Tariffs or Duties);

8.      Suspension in Work pursuant to Section 16.3 or 16.4;

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9.      Changes to the Rely Upon Information, or errors, omissions or
inaccuracies in the Rely Upon Information that adversely affect Contractor’s (i)
actual cost (which costs shall be adequately documented and supported by
Contractor) of performance of the Work, or (ii) ability to perform any material
requirement under this Agreement. If such errors, omissions or inaccuracies in
the Rely Upon Information cause a delay (as that term is defined in Section
6.9), Contractor shall be entitled to relief to the extent allowed under Section
6.8;

10.       To the extent expressly permitted elsewhere in Attachment O and,
further, delay beyond the permissible times specified in Section 1A(x)(g)(2) or
Section 1A(xii)(g)(2) of Attachment O for the delivery by Owner to Contractor of
builder’s risk or marine cargo insurance proceeds received by the Collateral
Agent (or if no Collateral Agent, a mutually agreed upon escrow agent) shall
relieve Contractor of any obligation under this Agreement to effect repairs or
other restoration of the Work affected by the insured occurrence for any costs
of repairs or restoration exceeding the sum of the deductible under such
insurance and any amounts previously paid to Contractor under such insurance and
shall entitle Contractor to a Change Order adjusting the Contract Price and Key
Dates, but only to the extent such delay adversely affects (i) Contractor’s cost
of performance of the Work, (ii) Contractor’s ability to perform the Work in
accordance with the Monthly Updated CPM Schedule, or (iii) Contractor’s ability
to perform any material obligation under this Agreement; provided that,
notwithstanding the foregoing, in no event shall this Section 6.2A.10 in any way
relieve Contractor from any obligation to perform any work necessary to maintain
the builder’s risk and marine cargo insurance in full force and effect; and

11.      To the extent expressly permitted by Attachment FF.

B.    Should Contractor desire a Change Order under this Section 6.2, Contractor
shall, pursuant to Section 6.5, notify Owner in writing and issue to Owner, at
Contractor’s expense, a notice in the form of Schedule D-4 (“Contractor’s Change
Notice”) with a detailed explanation of the proposed change and Contractor’s
reasons for proposing the change, all documentation necessary to verify the
effects of the change on the Changed Criteria, and all other information
required by Section 6.5.  Any adjustments to the Contract Price shall be
requested on a fixed price basis (unless otherwise agreed by the Parties in
writing) and shall be derived from the rates set forth in Schedule D-5 to the
extent applicable or, if not stated therein, derived from rates not to exceed
then-current market rates.

C.    Owner shall respond to Contractor’s Change Notice within thirty (30) Days
of receipt (unless Owner requests additional information in order to respond),
stating (i) whether Owner agrees that Contractor is entitled to a Change Order
and (ii) the extent, if any, to which Owner agrees with Contractor’s statement
regarding the effect of the proposed Change Order on the Changed Criteria,
including any adjustment to the Contract Price. If Owner agrees that a Change
Order is necessary and agrees with Contractor’s statement regarding the effect
of the proposed Change Order on the Changed Criteria, then Owner shall issue
such Change Order, which shall be in the form of Schedule D-1, and

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such Change Order shall become binding on the Parties as part of this Agreement
upon execution thereof by the Parties.

D.      If the Parties agree that Contractor is entitled to a Change Order but
cannot agree on the effect of the proposed Change Order on the Changed Criteria
within fourteen (14) Days after Owner’s receipt of Contractor’s written notice
and proposed Change Order and all other required information, or if Owner
desires that the proposed changed Work set forth in the proposed Change Order
commence immediately, the rights, obligations and procedures set forth in
Section 6.1E are applicable.

E.      If the Parties cannot agree upon whether Contractor is entitled to a
Change Order within fourteen (14) Days after Owner’s receipt of Contractor’s
Change Notice and proposed Change Order, then the dispute shall be resolved as
provided in ARTICLE 18.  Pending resolution of the dispute, Contractor shall
continue to perform the Work required under this Agreement, and Owner shall
continue to pay Contractor in accordance with the terms of this Agreement, as
modified by any previously agreed Change Orders or Change Directives.

6.3        Changed Criteria Adjustment; Contractor
Documentation.  Notwithstanding anything to the contrary, Owner shall not be
obligated to make any payment to Contractor for Work performed under a Change
Directive pursuant to Sections 6.1E and 6.2D (except to the extent specified in
Sections 6.1E and 6.2D), and the Contract Price, Key Dates and any other Changed
Criteria (other than the change in the Scope of Work) shall not be adjusted
unless and until a Change Order (the value of which shall be derived from (i)
the rates, prices and markups contained in Schedule D-5 to the extent
applicable, or (ii) if not specified in Schedule D-5, rates not to exceed
then-current market rates), has been executed.  In the event Owner requires
supplemental documentation to the information provided in Schedule D-5,
Contractor shall provide third party supporting documentation and other
supporting information as Owner may require to allow Owner to conduct a detailed
analysis of, and value, the proposed Change Order, provided that Contractor
shall not be required to provide the composition of any fixed rates or mark-ups
except as permitted in Section 3.13B.

6.4         Change Orders Act as Accord and Satisfaction.  Change Orders agreed
pursuant to Section 6.1D or 6.2C by the Parties, and Change Directives entered
into pursuant to Section 6.1E or 6.2D in which the Parties have subsequently
agreed upon the effect of such Change Directive and executed a superseding
Change Order as provided in Section 6.1D or 6.2C, shall, unless otherwise
expressly reserved in such Change Order, constitute a full and final settlement
and accord and satisfaction of all effects of the change as described in the
Change Order upon the Changed Criteria and shall be deemed to compensate
Contractor fully for all direct and indirect impacts of such
change.  Accordingly, unless otherwise expressly reserved in such Change Order,
Contractor expressly waives and releases any and all right to make a claim or
demand or to take any action or proceeding against Owner for any other
consequences arising out of, relating to, or resulting from such change
reflected in such Change Order, whether the consequences result directly or
indirectly from such change reflected in such Change Order, including any claim
or demand for damages due to delay, disruption, hindrance, impact, interference,
inefficiencies or extra work arising out of, resulting from, or related to, the
change reflected in that Change Order (including any claims or demands that any
Change Order or number of Change Orders,

59

individually or in the aggregate, have impacted the unchanged Work).  If
Contractor expressly reserves its right in a Change Order to maintain a claim
arising out of the change in the Change Order, then such reservation shall only
be effective for the earlier of Contractor’s achievement of Substantial
Completion of the applicable Train to which the Change Order relates or one
hundred eighty (180) Days after execution of the Change Order, and afterwards
Contractor waives and releases any and all right to make a claim or demand
relating to such Change Order as specified in this Section 6.4.

6.5         Timing Requirements for Change Notices Issued by Contractor.  Should
any circumstance that Contractor has reason to believe may give rise to the
right to a Change Order, Contractor shall, with respect to each such
circumstance:

A.      issue a Contractor’s Change Notice to Owner within fourteen (14) Days
following the date that Contractor knew of or sixty (60) Days after the date
that Contractor reasonably should have known of the first occurrence or
beginning of such circumstance; provided that if such occurrence or circumstance
is an emergency, oral notice shall be given immediately, followed by a
Contractor’s Change Notice within seventy-two (72) hours after such oral notice
is provided.

1.      In such Contractor’s Change Notice, Contractor shall state in detail all
known and presumed facts upon which its claim is based, including the character,
duration and extent of such circumstance, the date Contractor first knew of such
circumstance, any activities impacted by such circumstance, the estimated cost
and time consequences of such circumstance (including showing a good faith
estimate of the impact of such circumstance, if any, on the critical path of the
Monthly Updated CPM Schedule) and any other details or information that are
expressly required under this Agreement.

2.      Contractor shall only be required to comply with the notice requirements
of this Section 6.5A once for continuing circumstances, provided the notice
expressly states that the circumstance is continuing and includes Contractor’s
best estimate of the impact on any Changed Criteria by such circumstance; and

B.      submit to Owner a comprehensive written estimate no later than forty
five (45) Days (unless mutually extended by the Parties in writing) after the
later of (a) the date that the notice in Section 6.5A.1 is given and (b) the
completion of each such circumstance, setting forth in detail (i) why Contractor
believes that a Change Order should be issued, plus all documentation reasonably
requested by or necessary for Owner to determine the factors necessitating the
possibility of a Change Order and all other information and details expressly
required under this Agreement, including the information required by Schedule
D-4, applicable detailed estimates and cost records, time sheet summaries and a
graphic demonstration using the CPM Schedule showing Contractor’s entitlement to
a time extension to the Key Dates pursuant to the terms of this Agreement, which
shall be provided in its native electronic format and (ii) the effect, if any,
which such proposed Change Order would have for the Work on any of the Changed
Criteria.

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C.     The Parties acknowledge that the notice requirements contained in this
Agreement are an express condition precedent necessary to any right for an
adjustment to the Changed Criteria or any other modification to any other
obligation of Contractor under this Agreement, provided that Owner demonstrates
it was prejudiced by Contractor’s failure to provide such notice in accordance
with the terms of this Agreement; however, in any event, if Contractor fails to
provide the required notice within sixty (60) Days of when such notice was
required to be given under the terms of this Agreement, such failure is deemed a
complete bar to Contractor’s claim for which such notice was required.  Oral
notice, shortness of time, or Owner’s actual knowledge of a particular
circumstance shall not waive, satisfy, discharge or otherwise excuse
Contractor’s strict compliance with this Section 6.5.

6.6         Adjustment Only Through Change Order.  No change in the requirements
of this Agreement, whether an addition to, deletion from, suspension of or
modification to this Agreement, including any Work, shall be the basis for an
adjustment to any Changed Criteria or any other obligations of Contractor or
right of Owner under this Agreement unless and until such addition, deletion,
suspension or modification has been authorized by a Change Order executed and
issued in accordance with and in strict compliance with the requirements of this
ARTICLE 6, except that the Work may be changed by a Change
Directive.  Contractor shall not perform any change in the Work unless and until
such change is authorized pursuant to a Change Order or Change Directive in
accordance with this ARTICLE 6, and all costs incurred by Contractor prior to
authorization by Change Order shall be for Contractor’s account.  No course of
conduct or dealings between the Parties (including the issuance of an Owner’s
Change Request or Contractor’s Change Notice), nor express or implied acceptance
of additions, deletions, suspensions or modifications to this Agreement, and no
claim that Owner has been unjustly enriched by any such addition, deletion,
suspension or modification to this Agreement, whether or not there is in fact
any such unjust enrichment, shall be the basis for any claim for an adjustment
to the Changed Criteria or any other obligations of Contractor under this
Agreement.

6.7        Force Majeure.

A.    Contractor Relief.  If the commencement, prosecution or completion of the
Work is delayed by Force Majeure, then Contractor shall be entitled to an
extension to the applicable Key Dates if such delay affects the performance of
any Work that is on the critical path of the Monthly Updated CPM Schedule, but
only if Contractor complies with the notice and Change Order request
requirements in Section 6.5 and the mitigation requirements in Section
6.10.  Subject to Section 6.7A.1, the Parties agree that Contractor’s sole
remedy for such delay shall be an adjustment to such applicable Key Dates
pursuant to a Change Order.  In addition, if Force Majeure prevents Contractor’s
performance with respect to any portion of the Work, Contractor shall be
relieved from performance of such portion of the Work for the time period that
such Force Majeure are continuing and preventing such performance.

1.      Contractor shall be entitled to an adjustment to the Contract Price for
any delay that meets the requirements of Section 6.7A, if such delay, alone or
aggregated with other Force Majeure events, causes delay in the performance of
any Work that is on the critical path of the Monthly Updated CPM Schedule in

61

excess of thirty (30) Days in the aggregate. Any such Contract Price adjustments
shall be for reasonable costs necessarily incurred by Contractor for delay
occurring after the expiration of such thirty (30) Day aggregate period;
provided that Owner’s total liability under this Agreement for any such Contract
Price adjustment(s) for all such events occurring during the term of this
Agreement shall not exceed fifty million U.S. Dollars (U.S.$50,000,000) in the
aggregate.

B.    Owner Relief.  Subject to Section 6.7A, Owner’s obligations under this
Agreement shall be suspended to the extent that performance of such obligations
is delayed by Force Majeure (but without prejudice to Contractor’s entitlement
to a Change Order for the events described in Section 6.2A).

C.    Payment Obligations.  No obligation of a Party to pay moneys under or
pursuant to this Agreement shall be excused by reason of Force Majeure affecting
such Party.

6.8         Delay Caused by Owner or for Which Owner Is Responsible.  If (a) any
Owner Indemnified Party or any Person acting on behalf of or under the control
of Owner delays the commencement, prosecution or completion of the Work,
including Owner’s failure to provide an Owner-Furnished Items, and to the extent
such delay is not attributable to Contractor or its Subcontractors or
Sub-subcontractors but is caused by Owner’s breach of an express obligation
under this Agreement, or (b) the commencement, prosecution or completion of the
Work be delayed as a result of (1) Changes in Law for which Contractor is
entitled to relief under Section 6.2A.7, (2) changes to or errors or omissions
in Rely Upon Information for which Contractor is entitled to relief under
Section 6.2A.9, (3) a suspension of the Work for which Contractor is entitled to
relief under Section 6.2A.8, or (4) an event entitling Contractor to a Change
Order as set forth in Section 6.2A.5 or 6.2A.11 for a Change in Quotas (as
defined in Attachment FF), then Contractor shall, with respect to any of the
above, be entitled to an adjustment in the Contract Price and an extension to
the applicable Guaranteed Substantial Completion Dates if such delay affects the
performance of any Work that is on the critical path of the Monthly Updated CPM
Schedule, and Contractor complies with the notice and Change Order request
requirements in Section 6.5 and the mitigation requirements of Section 6.10,
provided that Contractor shall be entitled to an adjustment to the Contract
Price which shall be limited to the reasonable, additional costs incurred by
Contractor for such delay, plus associated profit margin of six percent (6%) on
such costs. Any adjustments to the Contract Price or a Key Date shall be
recorded in a Change Order.  The Parties agree that if they execute a Change
Order with respect to any change in the Scope of Work described in this
Section 6.8, any delay arising out of such change in the Scope of Work and
meeting the requirements of this Section 6.8 shall be included in the Change
Order incorporating such change in the Scope of Work.

6.9         Delay.  For the purposes of Sections 6.2A.1, 6.2A.6, 6.2A.9, 6.7 and
6.8, the term “delay” shall include hindrances, disruptions, preventions or
obstructions, or any other similar term in the industry and the resulting impact
from such hindrances, disruptions or obstructions, including inefficiency,
impact, ripple or lost production.  For the avoidance of doubt, the Parties
recognize and agree that for the purposes of Sections 6.7 and 6.8, a Work
activity not on the critical path can become on the critical path, and if a
delay causes a Work activity off the critical path to become a critical path
activity, Contractor is entitled to an extension to the Key Dates for those

62

days of delay after which the non-critical path activity became a critical path
activity, provided that such delay satisfies the other applicable requirements
under Sections 6.7 and 6.8.

6.10       Contractor Obligation to Mitigate Delay.  With respect to
Sections 6.7 and 6.8, in no event shall Contractor be entitled to any adjustment
to the Key Dates or adjustment to the Contract Price for (i) that portion of
delay to the extent Contractor could have taken, but failed to take, reasonable
actions to mitigate such delay or (ii) that portion of delay that would
nevertheless been experienced had such delay event in Section 6.7 or 6.8 not
occurred.

6.11       Separated Contract Price Adjustments in Change Orders.  Any
adjustment by Change Order to the Contract Price which is made on a fixed price
separated basis shall be separated pursuant to 34 Tex. Admin. Code Rule §
3.291(a)(13) to specify the applicable adjustments to the Aggregate Equipment
Price and Aggregate Labor and Skills Price in accordance with ARTICLE 7.

ARTICLE 7

CONTRACT PRICE AND PAYMENTS TO CONTRACTOR

7.1         Contract Price.  As compensation in full to Contractor for the full
and complete performance of the Work and all of Contractor’s other obligations
under this Agreement, Owner shall pay and Contractor shall accept Seven Billion
Forty Two Million Fifty Two Thousand U.S. Dollars (US$ 7,042,052,000) (the
“Contract Price”).  The Contract Price is subject to adjustment only by Change
Order as provided in ARTICLE 6, and includes all Taxes (excluding U.S. Tariffs
and Duties, as further described in Section 7.1A) payable by Contractor and its
Subcontractors and Sub-subcontractors in connection with the Work.  For the
avoidance of doubt, the Contract Price does not include Texas Sales and Use Tax
on Equipment (which is subject to exemption as provided under Section 4.8A).

A.     The Contract Price excludes U.S. Tariffs and Duties, and Contractor shall
invoice separately to recover its costs for U.S. Tariffs and Duties pursuant to
Attachment FF, provided that Contractor may not invoice any more than Sixty One
Million Four Hundred Ninety Five Thousand Seven Hundred Thirty U.S. Dollars (US$
$61,495,730) (“Total Reimbursement Amount”) in total for U.S. Tariffs and Duties
(unless reduced or increased via Change Order pursuant to Attachment FF (Relief
for Changes in U.S. Tariffs or Duties) for a Change in U.S. Tariffs or Duties),
and any additional costs related to any tariffs, quotas, and duties are for
Contractor’s account.

B.     The Contract Price is separated, in accordance with the definition of
separated contract as defined in 34 Tex. Admin Code Rule § 3.291(a)(13), as
follows:

1.      [***] U.S. Dollars (U.S.$ [***]) for Equipment (“Aggregate Equipment
Price”).    The Aggregate Equipment Price equates to the portion of the Contract
Price attributable to all Equipment and includes the cost of every piece of
Equipment, including markup, overhead, freight and profit, but excludes labor.

2.      [***] U.S. Dollars (U.S.$ [***])  

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for all Work in this Agreement other than for Equipment (“Aggregate Labor and
Skills Price”), which such Work includes all labor, engineering, design,
services, installation, consumables, freight on Construction Equipment, overhead
and all other items of whatever nature applicable to the Work.  Excluding only
the Aggregate Equipment Price, the Aggregate Labor and Skills Price shall
include all costs, charges and expenses of whatever nature applicable to the
Work, including Taxes (except for U.S. Tariffs and Duties) on all Work and Texas
Sales and Use Tax on all Work other than on Equipment.

3.      Attachment GG provides a list of options (“Additional Work Options”) for
additional Work that Owner may elect to have Contractor perform, as further
specified in this Section 7.1B.3.  Owner may, at any time within the time
periods specified in Attachment GG for each Additional Work Option, elect (by
giving written notice to Contractor) to have Contractor perform any Additional
Work Options for the corresponding amounts set forth in Attachment GG.  The
amount listed for each Additional Work Option is compensation in full for
Contractor’s complete performance of each Additional Work Option selected by
Owner and includes all costs and expenses of any nature associated with such
Additional Work Option. In the event that Owner selects any Additional Work
Options, the Parties shall enter into a Change Order that adjusts the Contract
Price in an amount equal to total of the Additional Work Options selected by
Owner.  Other than the adjustment to the Contract Price, Contractor shall
receive no other adjustments to any Changed Criteria as a result of Owner’s
selection of any Additional Work Options.

7.2         Interim Payments.

A.     Payments.  Interim payments shall be made by Owner to Contractor in
accordance with the Payment Schedule set forth in Attachment C (as may be
amended by Change Order pursuant to Section 6.1C or 6.2C), which allocates (i)
[***] U.S. Dollars (U.S.$ [***]) of the Contract Price to be paid based on
percent completion of the Work (“Earned Value”) using the detailed breakdown of
the Work and the procedures set forth in Schedule C-1 (the “Earned Value
Contract Price Breakdown”), and (ii) [***] U.S. Dollars (U.S.$ [***]) of the
Contract Price to be paid based on completion of Payment Milestones set forth in
Schedule C-2,  provided that Contractor is otherwise in material compliance with
the terms of this Agreement.  Each payment shall be subject to Owner’s right to
withhold payments under this Agreement, including Sections 3.3G, 7.5, 11.5A and
13.1.  Payments shall be made in U.S. Dollars to an account designated by
Contractor.  The Payment Schedule, including the Earned Value Contract Price
Breakdown and the Payment Milestones, shall be amended only by Change Order
pursuant to this Agreement.

B.     Invoices.  Within [***]  ([***]) Days after the end of each Month (or the
next Business Day if the [***]th Day is not a Business Day), Contractor shall
submit to Owner an Invoice for (i) all Work completed during the prior Month in
accordance with the Earned Value Contract Price Breakdown, (ii) all Payment
Milestones completed during the prior Month, if any and (iii) reimbursement for
U.S. Tariffs and Duties, if any.  Contractor shall not be entitled to any
payment whatsoever for any portion of the Work relating to a

64

particular Payment Milestone until such Payment Milestone is fully
completed.  Such Monthly Invoice shall also include amounts properly due and
owing for Work performed during the prior Month under Change Directives.  All
Invoices, other than the Invoice for final payment under this Agreement, shall
be in the form of Schedule I-1, and shall include all documentation supporting
its request for payment as required under this Agreement.  All Invoices issued
to Owner hereunder shall separately state charges for Equipment and skill, labor
and other costs for the Project.

C.     Interim Lien and Claim Waivers.  Each Invoice received by Owner prior to
Final Completion shall be accompanied by (i) a fully executed Interim Lien and
Claim Waiver from Contractor in the form of Schedules K-1 and K-2 for all Work
performed through the date for which payment is requested, (ii) fully executed
Interim Lien and Claim Waivers from each Major Subcontractor in the form set
forth in Schedules K-3 and K-4 for all Work performed through the date for which
payment is requested and (iii) if requested by Owner, fully executed Interim
Lien and Claim Waivers from all Major Sub-subcontractors in the form set forth
in Schedules K-3 and K-4 for all Work performed through the date for which
payment is requested.  Interim Lien and Claim Waivers, however, shall not be
required from Major Subcontractors, Major Sub-subcontractors, Subcontractors or
Sub-subcontractors until they have performed and invoiced Contractor for their
Work, and Major Subcontractors, Major Sub-subcontractors, Subcontractors and
Sub-subcontractors shall be required to submit additional Interim Lien and Claim
Waivers only if they have performed Work not covered by a previous Interim Lien
and Claim Waiver. Submission of all Interim Lien and Claim Waivers are a
condition precedent to payment of any Invoice (provided that if Contractor does
not submit an Interim Lien and Claim Waiver for a Major Subcontractor or Major
Sub-subcontractor in accordance with this Section 7.2C, Owner may withhold
payment for the amount allocated to such Major Subcontractor or Major
Sub-subcontractor that has not provided an Interim Lien and Claim Waiver).

D.    Review and Approval.  Each Invoice shall be reviewed by Owner and, upon
Owner’s reasonable request, Contractor shall furnish such supporting
documentation and certificates and provide such further information as may be
reasonably requested by Owner.  Unless disputed by Owner, each Invoice (less any
withholdings allowed under this Agreement) shall be due and payable [***]
 ([***]) Days after it, and all documentation required under this Agreement, is
received by Owner.  Notwithstanding the above, prior to receipt of NTP,
Contractor may submit an Invoice to Owner for the NTP milestone payment, and
such Invoice shall be due and payable within [***]  ([***]) Days after NTP, and
Contractor shall have no obligation to commence the Work under the NTP until
such payment is received by Contractor (but for the avoidance of doubt, the
Guaranteed Substantial Completion Dates for each Train shall not be altered
despite Contractor’s right not to commence the Work until such payment is
received,  unless such payment is received after such ten (10) Day period above,
in which case Contractor shall be entitled to a Change Order adjusting the
Contract Price and/or the Key Dates, as applicable, pursuant to Section 6.8,
provided that Contractor complies with the notice and Change Order request
requirements set forth in Sections 6.2 and 6.5.   If an Invoice is disputed by
Owner, then payment shall be made for all undisputed amounts and the Dispute
shall be resolved

65

pursuant to ARTICLE 18.  Payment on disputed amounts shall be made as soon as
such Dispute is resolved.

E.    Maximum Cumulative Payment Amounts.  The Parties have agreed upon and set
forth in Schedule C-3 a schedule of the maximum cumulative amounts that
Contractor is allowed to Invoice Owner at any one time during the performance of
the Work (the “Maximum Cumulative Payment Schedule”).  The Maximum Cumulative
Payment Schedule shall only be subject to adjustment pursuant to a Change Order.

7.3         Final Completion and Final Payment.  Upon Final Completion,
Contractor shall, in addition to any other requirements in this Agreement for
achieving Final Completion, including those requirements set forth in
Section 1.1 for the definition of Final Completion, submit a fully executed
final Invoice in the form attached hereto as Schedule I-2, along with (i) a
statement summarizing and reconciling all previous Invoices, payments and Change
Orders, (ii) an affidavit that all payrolls, Taxes, liens, charges, claims,
demands, judgments, security interests, bills for Equipment, and any other
indebtedness connected with the Work have been paid, (iii) fully executed Final
Lien and Claim Waiver from Contractor in the form of Schedules K-5 and K-6, (iv)
fully executed Final Lien and Claim Waivers from each Major Subcontractor in the
form set forth in Schedules K-7 and K-8, and (v) if requested by Owner, fully
executed Final Lien and Claim Waivers from each Major Sub-subcontractor in the
form set forth in Schedules K-7 and K-8.  No later than [***]  ([***]) Days
after receipt by Owner of such final Invoice and all requested documentation and
achieving Final Completion, Owner shall, subject to its rights to withhold
payment under this Agreement, pay Contractor the balance of the Contract Price.

7.4         Payments Not Acceptance of Work.  No payment made hereunder by Owner
shall be considered as approval or acceptance of any Work by Owner or a waiver
of any claim or right Owner may have hereunder.  All payments shall be subject
to correction or adjustment in subsequent payments.

7.5         Payments Withheld.  In addition to disputed amounts set forth in an
Invoice, Owner may, in addition to any other rights under this Agreement,
withhold payment on an Invoice or a portion thereof, or collect on the Letter of
Credit, in an amount and to such extent as may be reasonably necessary to
protect Owner from loss due to:

A.    Defective Work not remedied in accordance with this Agreement;

B.     liens, stop notices or other encumbrances on all or a portion of the
Site,, the Work, the Train 3 Liquefaction Facility or the Facility, which are
filed by any Subcontractor, any Sub-subcontractor or any other Person acting
through or under any of them,  provided that Owner has made payment to
Contractor of all undisputed amounts due to Contractor in accordance with the
terms of this Agreement and further provided that, with respect to liens and
other encumbrances, Contractor has not removed or discharged such lien or
encumbrance in accordance with Section 17.6;

C.     any material breach by Contractor of any term or provision of this
Agreement;

 

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D.    the assessment of any fines or penalties against Owner as a result of
Contractor’s failure to comply with Applicable Law or Applicable Codes and
Standards;

E.    a discovery that a Payment Milestone or other Work associated with a prior
payment was not in fact achieved;

F.    amounts paid by Owner to Contractor in a preceding Month incorrectly;

G.    Liquidated Damages that Contractor owes under the terms of this Agreement;

H.    failure of Contractor to make payments to Subcontractors in accordance
with their respective Subcontracts, provided that Owner has made payment to
Contractor of all undisputed amounts owed to Contractor in accordance with the
terms of this Agreement with respect to the applicable Subcontracts;

I.    any other costs or liabilities which Owner has incurred or will incur for
which Contractor is responsible under this Agreement; or

J.    failure of Contractor to comply with its Monthly Progress Report
obligations or scheduling obligations as set forth in Section 5.4.

7.6      Payment of Amounts Withheld or Collected on Letter of Credit.  Prior to
drawing down or collecting on the Letter of Credit in accordance with this
Agreement, Owner shall provide Contractor with the written notice in accordance
with Section 9.2A(b).  For amounts actually withheld or collected on the Letter
of Credit, Owner shall pay Contractor the amount Owner withheld or collected on
the Letter of Credit under Section 7.5 if Contractor (i) pays, satisfies or
discharges the applicable claim of Owner against Contractor under or by virtue
of this Agreement and provides Owner with reasonable evidence of such payment,
satisfaction or discharge, (ii) cures the applicable breach described in Section
7.5 or the applicable Default (i.e., the breach described in Section 7.5 or
Default on which Owner’s withholding or collection on the Letter of Credit was
based), (iii) with respect to item 7.5B, removes the lien or other encumbrance
in question in accordance with Applicable Law, or (iv) provides Owner with a
Letter of Credit reasonably satisfactory to Owner in the amount of the withheld
payment.  In the event Owner draws down or collects any amount on the Letter of
Credit pursuant to this Section 7.6, and Contractor acts in accordance with
either (i), (ii) or (iii) above so as to require payment from Owner, Contractor
shall, within [***]  ([***]) Days after Owner’s payment to Contractor, restore
the Letter of Credit to the amount the Letter of Credit had immediately prior to
Owner’s collection on the Letter of Credit under this Section 7.6, failing
which, Owner may withhold all payments otherwise due Contractor until Contractor
so restores such Letter of Credit.  Owner’s failure to withhold or draw down or
collect against the Letter of Credit in the event of any of the circumstances
described in this Section 7.6 shall not be deemed to be a waiver of any of
Owner’s rights under this Agreement, including Owner’s right to withhold or draw
down on the Letter of Credit at any time one of the circumstances in Section 7.5
exists.

7.7       Interest on Late Payments.  Any undisputed amounts due but not paid
when such amounts are due and payable hereunder shall bear interest at the
lesser of (i) an annual rate equal

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to the prime rate published by the Wall Street Journal on the date such amounts
were due and payable plus three percent (3%) or (ii) the maximum rate permitted
under Applicable Law.

7.8       Offset.  Owner may, upon prior notice to Contractor, offset any debt
due and payable from Contractor to Owner against any amount due and payable to
Contractor hereunder.

7.9       Currency.  All amounts contained herein are in and shall be paid in
U.S. Dollars. Included in the Contract Price are the following amounts in U.S.
Dollars based upon the following foreign (non-U.S. Dollar) currencies at the
following exchange rates to the U.S. Dollar:

 

 

 

 

Foreign Currency

Value of Foreign Currency

Initial Exchange Rate

Initial Equivalent U.S. Dollar Value

Euro

€ 326,000,000

[***] U.S. $ to Euro

U.S. $ [***]

 

Contemporaneously with Owner’s issuance of the NTP Payment Milestone payment,
the Contract Price shall be subject to an upward or downward adjustment by
Change Order to account for changes in the exchange rates during the time period
between the Effective Date and Owner’s issuance of the NTP milestone payment,
and such adjusted Contract Price shall be stated in U.S. Dollars.

The adjustment to the Contract Price for each foreign currency will be
determined as follows:

(a) the equivalent U.S. Dollar value at the time of Owner’s issuance of the NTP
Payment Milestone payment

(determined by multiplying the value of foreign currency listed above by the
exchange rate quoted by Bloomberg FX Fixings rate for such foreign currency as
of 9:00am NY time on the next banking day following Owner’s issuance of the NTP
Payment Milestone payment)

minus

(b) the initial equivalent U.S. Dollar value listed in the table above for such
foreign currency.

The Contract Price adjustment shall be the sum of the adjustments for each
currency, and shall be stated in U.S. Dollars.  After Owner’s issuance of the
NTP Payment Milestone payment, Contractor assumes all risk relating to
fluctuation of any foreign currency.

7.10       Conditions Precedent to Payment. It shall be a condition precedent to
Contractor’s entitlement to receive any payment from Owner under this Agreement
that Contractor has provided to Owner, and is maintaining the (i) Parent
Guarantee in accordance with Section 21.17, (ii) Letter of Credit in accordance
with Section 9.2, and (iii) insurance policies in accordance with Section 9.1.

7.11       [***].

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ARTICLE 8

TITLE AND RISK OF LOSS

8.1       Title.

A.   Clear Title.  Contractor warrants and guarantees that Owner will receive
good and legal title to and ownership of the Work and the Facility (including
each component thereof) shall be free and clear of any and all liens, claims,
security interests or other encumbrances when title thereto passes to Owner.

B.   Title to Work.  Title to all or any portion of the Work (other than Work
Product) shall pass to Owner (or its designee) upon the earlier of (i) payment
by Owner therefor, (ii) delivery of the Work to the Site, or (iii) incorporation
of such Work into the Facility, except in the case of Work Product, which is
governed by ARTICLE 10.  Transfer of title to Work shall be without prejudice to
Owner’s right to reject Defective Work, or any other right in this Agreement.

8.2       Risk of Loss.

A.       Risk of Loss Prior to Substantial Completion.  Contractor shall bear
the risk of physical loss and damage to each Train and all Equipment and Work
incorporated or to be incorporated into such Train until the earlier of
Substantial Completion of such Train or termination of the Agreement, provided
that Owner shall at all times bear the risk of physical loss and damage to the
extent arising from (i) war (whether declared or undeclared), civil war, act of
terrorism, sabotage, blockade, insurrection; or (ii) ionizing radiation, or
contamination by radioactivity from nuclear fuel, or from any nuclear waste from
the combustion of nuclear fuel properties of any explosive nuclear assembly or
nuclear component thereof; or (iii) a significant atmospheric disturbance marked
by high winds, with or without precipitation, including such events as
hurricane, typhoon, monsoon, cyclone, rainstorm, tempest, hailstorm, tornado, or
any combination of the foregoing events, including any resulting flood, tidal or
wave action (collectively, “Windstorms”) and earthquake to the extent that such
Windstorms and earthquakes result in loss or damage in excess of [***] U.S.
Dollars (U.S.$ [***]) (or such greater amount obtained in the Builder’s Risk
policy) in the cumulative aggregate with respect to the Work, the Facility and
the Train 3 Liquefaction Facility.  The full amount of [***] U.S. Dollars (U.S.$
[***]) (or such greater amount obtained in the Builder’s Risk policy) may be
satisfied under either the Train 3 EPC Agreement or this Agreement.

B.       Transfer of Risk of Loss After Substantial Completion.  Upon the
earlier termination of the Agreement or after Substantial Completion of each
Train together with the related Common Systems as described in Attachment A,
Owner shall bear the risk of physical loss and damage to such Train (including
all Equipment and Work incorporated into such Train), related Common Systems and
any other portion of the Work or Facility transferred to Owner prior to
Substantial Completion in accordance with Section 11.8.  In accordance with
Section 17.1F, Contractor shall be liable to Owner for physical loss and damage
to any portion of a Train after such Train achieves Substantial Completion to
the

69

extent such physical loss and damage arises out of or results from or is related
to the negligence or fault of any Contractor Indemnified Party or Subcontractors
or Sub-subcontractors, subject to a cap in liability of [***] Dollars (U.S.
$[***]) per occurrence, with a cumulative per occurrence of [***] U.S. Dollars
(U.S. $[***]) under the Train 3 EPC Agreement and this Agreement. Under no
circumstances shall this Section 8.2B be interpreted to relieve Contractor of
its obligations with respect to Warranties, Defective Work and Corrective Work.

C.       With respect to any physical loss or physical damage to a Train
(including Equipment or Work incorporated into such Train) caused by (a) Force
Majeure (including any of the events listed in Section 8.2A(i), (ii), or (iii));
(b) any member of Owner Indemnified Parties or any other Person for whom Owner
is responsible, or (c) any Third Party over whom neither Contractor nor Owner
are responsible and such Third Party is beyond the reasonable control of
Contractor and such loss or damage was not due to Contractor’s fault or
negligence and could not have been prevented or avoided by Contractor through
the exercise of due diligence, Contractor shall be entitled to a Change Order
adjusting the Key Dates if and to the extent permitted under (y) Section 6.7 if
caused by Force Majeure (including any of the events listed in Section 8.2A(i),
(ii), or (iii)), and (z) Section 6.8 if caused by any member of Owner
Indemnified Parties or any other person for whom Owner is responsible or a Third
Party pursuant to Section 8.2C(c) above.  In the event that any physical loss or
damage to a Train (or any Equipment or Work incorporated or to be incorporated
in such Train) arises from one or more of the events set forth in 8.2A(i), 8.2A
(ii), or 8.2A (iii), and Owner elects to rebuild such physical loss or damage,
Contractor shall be entitled to a Change Order to adjust the Contract Price to
the extent such event adversely affects Contractor’s costs of performance of the
Work, provided that Contractor complies with the requirements in Section 6.5 and
the mitigation requirements in Section 6.10.

D.       For the avoidance of doubt, this Section 8.2 shall apply to any loss or
damage to the Work caused by, arising out of or resulting from, any activities,
events or omissions occurring in connection with this Agreement.  Similarly, for
the avoidance of doubt, the risk of loss and damage to the Train 3 Liquefaction
Facility shall be determined in accordance with Section 8.2 of the Train 3 EPC
Agreement, notwithstanding that such loss or damage to the Train 3 Liquefaction
Facility was caused by, arose out of or resulted from activities or events
occurring during the performance of this Agreement.

ARTICLE 9

INSURANCE AND LETTER OF CREDIT

9.1         Insurance.

A.       Provision of Insurance.  The Parties shall provide the insurance as
specified in Attachment O on terms and conditions stated therein.

B.       No Cancellation.  All policies providing coverage hereunder shall
contain a provision that at least [***]  ([***]) Days’ prior notice shall be
given to the non-procuring

70

Parties and additional insureds prior to cancellation, non-renewal or material
change in the coverage.

C.       Additional Insurance.  Upon Owner’s request, and at Owner’s sole
option, Contractor shall increase its insurance required under this Agreement
(as long as such insurance coverage is available in the commercial insurance
market); provided however, that the payment of any incremental increase in the
cost of such insurance shall be reimbursed by Owner at cost via Change Order.

D.       Obligations Not Relieved.  Anything in this Agreement to the contrary
notwithstanding, the occurrence of any of the following shall in no way relieve
Contractor from any of its obligations under this Agreement: (i) failure by
Contractor to secure or maintain the insurance coverage required hereunder; (ii)
failure by Contractor to comply fully with any of the insurance provisions of
this Agreement; (iii) failure by Contractor to secure such endorsements on the
policies as may be necessary to carry out the terms and provisions of this
Agreement; (iv) the insolvency, bankruptcy or failure of any insurance company
providing insurance to Contractor; (v) failure of any insurance company to pay
any claim accruing under its policy; or (vi) losses by Contractor or any of its
Subcontractors or Sub-subcontractors not covered by insurance policies.

E.       Failure to Provide Required Insurance.  IN THE EVENT THAT LIABILITY FOR
ANY LOSS OR DAMAGE IS DENIED BY THE UNDERWRITER OR UNDERWRITERS IN WHOLE OR IN
PART DUE TO THE BREACH OF CONTRACTOR’S INSURANCE BY CONTRACTOR, OR IF CONTRACTOR
FAILS TO MAINTAIN ANY OF THE CONTRACTOR’S INSURANCE HEREIN REQUIRED, THEN
CONTRACTOR SHALL DEFEND, INDEMNIFY AND HOLD THE OWNER INDEMNIFIED PARTIES
HARMLESS AGAINST ALL LOSSES WHICH WOULD OTHERWISE HAVE BEEN COVERED BY SAID
INSURANCE.

F.       Unavailable Insurance. If any insurance (including the limits or
deductibles thereof) hereby required to be maintained, other than insurance
required by Applicable Law to be maintained, shall not be reasonably available
in the commercial insurance market, Owner and Contractor shall not unreasonably
withhold their agreement to waive such requirement to the extent that
maintenance thereof is not so available; provided, however, that the Party shall
first request any such waiver in writing from the other Party, which request
shall be accompanied by written reports prepared by two (2) independent
advisors, including insurance brokers, of recognized international standing
certifying that such insurance is not reasonably available in the commercial
insurance market (and, in any case where the required amount is not so
available, explaining in detail the basis for such conclusions), such insurance
advisers and the form and substance of such reports to be reasonably acceptable
to the other Party; and provided further that such waiver is permitted pursuant
to any agreements between Owner and its Lenders.  Any such waiver shall be
effective only so long as such insurance shall not be available and commercially
feasible in the commercial insurance market.

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9.2         Irrevocable Standby Letter of Credit.

A.       As a condition precedent to Contractor’s right to receive any payments
under this Agreement (except payments expressly permitted pursuant to an LNTP),
Contractor shall deliver to Owner an irrevocable standby letter of credit,
naming Owner as beneficiary, in the amount of ten percent (10%) of the Contract
Price (as adjusted by Change Order) and in the form of Attachment R, and issued
and confirmed by a commercial bank in the United States of America reasonably
acceptable to Owner with a long-term rating of at least Investment Grade
(“Letter of Credit”).  Upon Owner’s written request, Contractor shall increase
the dollar value of the Letter of Credit issued to Owner in proportion to any
increases to the Contract Price pursuant to a Change Order, or the aggregate of
multiple Change Orders, that equal or exceed one hundred million U.S. Dollars
(U.S. $100,000,000); provided that if Owner so requests an adjustment to the
value of the Letter of Credit, Contractor shall be entitled to a Change Order
for the cost of the increase in the Letter of Credit. If at any time the rating
of the U.S. commercial bank that issued the Letter of Credit falls below
Investment Grade, Contractor shall replace the Letter of Credit within [***]
 ([***]) Days with a letter of credit or, if permitted by Owner in its sole
discretion, an equivalent instrument, issued by a commercial bank in the United
States of America reasonably acceptable to Owner meeting such rating
requirements.  Owner shall have the right to draw down on or collect against
such Letter of Credit upon Owner’s demand in the event of the following: (a) a
Default by Contractor or the owing by Contractor to Owner under this Agreement
for Liquidated Damages or any other liabilities, damages, costs, losses or
expenses arising out of or relating to a breach of any obligation under this
Agreement by Contractor, such Default or otherwise and (b) Owner has
provided [***]  ([***]) Business Days’ written notice to Contractor stating
Owner’s intent to draw against the Letter of Credit and the amount to be drawn
and specifying the reason for the draw on the Letter of Credit.  The amount
drawn on the Letter of Credit shall not be greater than the amount that Owner,
at the time of the drawing, reasonably estimates is owed it under this Agreement
for Liquidated Damages, liabilities, damages, costs, losses or expenses or is
necessary to remedy the Default or breach of this Agreement.  In addition to the
foregoing draw rights, (i) Owner shall also have the right to draw down on or
collect against the Letter of Credit for all remaining funds in the Letter of
Credit upon Owner’s demand if Contractor has not, prior to [***]  ([***]) Days
before the then current expiration date, delivered to Owner a replacement letter
of credit substantially identical to the Letter of Credit and from a U.S.
commercial bank meeting the requirements in this Section 9.2 and extending the
expiration date for the shorter of (a) a period of one (1) year, or (b) the
expiration of such Defect Correction Period, and (ii) Owner shall also have the
right to draw down on or collect against the Letter of Credit for all remaining
funds available under such Letter of Credit upon Owner’s demand if the issuing
bank is no longer Investment Grade and Contractor has not, within the applicable
time period set forth in this Section 9.2, delivered to Owner a replacement
letter of credit substantially identical to the Letter of Credit from a U.S.
commercial bank meeting the requirements set forth in this Section 9.2.  Except
for sums due and owing for LNTP Work (if any), Contractor shall not be entitled
to any compensation under this Agreement unless and until Contractor provides
the Letter of Credit to Owner in accordance with this Section 9.2.

1.         Contractor may fulfill the requirements set forth in this Section 9.2
through multiple, co-existent Letters of Credit issued to Owner with no more
than a total of two (2) Letters of Credit being provided under this Section 9.2;
provided

72

that each Letter of Credit shall meet the requirements of Section 9.2 and the
amounts of such Letters of Credit shall, in the aggregate, equal an amount equal
to ten percent (10%) of the Contract Price (as may be increased or decreased
pursuant to Section 9.2).  Owner may in accordance with Section 9.2 draw down or
collect on any one of the Letters of Credit, or all of the Letter of Credits, or
any combination thereof, in any amounts Owner determines with respect to each
Letter of Credit in order to collect all the amounts permitted under Section
9.2, which such allocation and collection on any one or more of the Letters of
Credit shall be determined in Owner’s sole discretion.  Any reference to “Letter
of Credit” in this Agreement shall mean any one, any combination, or all of the
Letters of Credit provided under this Agreement pursuant to this Section 9.2A.1,
at Owner’s sole discretion.

B.          The amount of the Letter of Credit shall decrease to an aggregate
amount equal to:

1.       seven percent (7%) of the Contract Price upon the commercial bank’s
receipt from Owner of a written notice that (i) Substantial Completion of Train
1 has occurred (including Contractor’s payment of all Delay Liquidated Damages
due and owing under this Agreement for Train 1), and (ii) Contractor has
achieved the Performance Guarantees for Train 1 or paid all Performance
Liquidated Damages due and owing under this Agreement for Train 1 (including any
potential Performance Liquidated Damage exposure based upon the results of the
Performance Tests conduction prior to Substantial Completion);

2.       provided that the conditions of clauses (i) and (ii) of Section 9.2B.1
have occurred, five percent (5%) of the Contract Price upon the commercial
bank’s receipt from Owner of a written notice that (i) Substantial Completion of
Train 2 has occurred (including Contractor’s payment of all Delay Liquidated
Damages due and owing under this Agreement for Train 2), and (ii) Contractor has
achieved the Performance Guarantees for Train 2 or paid all Performance
Liquidated Damages due and owing under this Agreement for Train 2 (including any
potential Performance Liquidated Damage exposure based upon the results of the
Performance Tests conduction prior to Substantial Completion);

3.       provided that the conditions of clauses (i) and (ii) of Section 9.2B.2
have occurred, two percent (2%) of the Contract Price upon the commercial’s bank
receipt from Owner of written notice of the expiration of the period specified
in clause (i) of the definition of “Defect Correction Period”; provided that if
the expiration of such Defect Correction Period occurs before Substantial
Completion of Train 2, such decrease shall not occur until after the conditions
for decreasing the Letter of Credit for Substantial Completion of Train 2
occurs; and

4.       zero percent (0%) of the Contract Price within [***]  ([***]) Days
after the issuing commercial bank’s receipt from Owner of a written notice of
the

73

expiration of the period specified in clause (ii) of the definition of “Defect
Correction Period”, except that the Letter of Credit shall remain in effect in
an aggregate amount equal to the reasonable value of any claims that Owner has
against Contractor arising out of this Agreement and which remain unresolved at
the expiration of the period specified in clause (ii) of the definition of
“Defect Correction Period.”  Upon the resolution of such claims, the Letter of
Credit shall be decreased to an aggregate amount equal to zero percent.

C.         The Letter of Credit shall remain in full force and effect from the
issuance of the Letter of Credit through the expiration of the period specified
in clause (ii) of the definition of “Defect Correction Period” (i.e., the [***]
 ([***]) month period following Substantial Completion of Train 2) in accordance
with Section 9.2B.4.  Partial drawings are permitted under the Letter of
Credit.  No later than [***]  ([***]) Days after the satisfaction of the
conditions listed in 9.2B.1, 9.2B.2, 9.2B.3, or 9.2B.4 above, Owner shall
provide the commercial bank that issued the Letter of Credit with the written
notice as specified in that particular section.  No later than [***]  ([***])
Days after expiration of the Defect Correction Period, Owner shall provide the
commercial bank that issued Letter of Credit with written notice of the
expiration of such period.

D.         Owner shall copy Contractor on the notices provided to the commercial
bank described in Section 9.2B.

ARTICLE 10

OWNERSHIP OF DOCUMENTATION

10.1       Ownership of Work Product.  Owner and Contractor acknowledge that
during the course of, and as a result of, the performance of the Work and prior
work related to the Facility done by Contractor for Owner (including any work
done by Contractor or any of its Affiliates under the ITB Agreement or any other
agreements between the Parties related to the Project), Contractor or its
Affiliates, Subcontractors or Sub-subcontractors will create or have created for
the Project and will deliver to Owner certain written materials, plans,
Drawings, Specifications, or other tangible manifestations of Contractor’s
performance of the Work (hereinafter individually or collectively referred to as
“Work Product”).  Subject to Section 10.2, and to the use restrictions in the
licenses described in Section 10.7A-C, Work Product prepared by Contractor, its
Affiliates, Subcontractors or Sub-Subcontractors shall be “works made for hire,”
and all rights, title and interest to the Work Product, including any and all
copyrights in the Work Product, shall be owned by Owner irrespective of any
copyright notices or confidentiality legends to the contrary which may have been
placed in or on such Work Product by Contractor, its Affiliates, Subcontractors,
Sub-Subcontractors or any other Person.  Contractor, its Subcontractors and its
Sub-Subcontractors waive in whole all moral rights which may be associated with
such Work Product.  If, for any reason, any part of or all of the Work Product
is not considered a work made for hire for Owner or if ownership of all right,
title and interest in the Work Product shall not otherwise vest in Owner, then
Contractor agrees, subject to Section 10.2, that such ownership and copyrights
in the Work Product, whether or not such Work Product is fully or partially
complete, shall be automatically assigned from Contractor to Owner without
further consideration, and Owner shall thereafter own

74

all right, title and interest in the Work Product, including all copyright
interests.  IF OWNER USES ANY WORK PRODUCT FOR PURPOSES OTHER THAN THOSE
RELATING TO THE FACILITY, AND CONTRACTOR IS NOT INVOLVED IN THE ENGINEERING,
PROCUREMENT, OR CONSTRUCTION OF SUCH OTHER PROJECT, OWNER SHALL INDEMNIFY,
DEFEND, AND HOLD HARMLESS CONTRACTOR INDEMNIFIED PARTIES WITH RESPECT TO ANY
CLAIMS, DAMAGES, LOSSES, LIABILITIES, OR OTHER CAUSES OF ACTION ARISING FROM
SUCH USE, REGARDLESS OF THE CAUSE SUCH CLAIMS, DAMAGES, LOSSES, LIABILITIES, OR
OTHER CAUSES OF ACTION, INCLUDING THE SOLE OR JOINT NEGLIGENCE OF ANY CONTRACTOR
INDEMNIFIED PARTIES.  LIKEWISE, IF THIS AGREEMENT IS TERMINATED, AND OWNER
THEREAFTER MODIFIES THE WORK PRODUCT WITHOUT THE INVOLVEMENT OF CONTRACTOR, AND
SUCH MODIFIED WORK PRODUCT IS USED TO ENGINEER OR CONSTRUCT THE FACILITY, AND
SUCH MODIFICATIONS TO THE WORK PRODUCT INFRINGES UPON THE INTELLECTUAL PROPERTY
RIGHTS OF A THIRD PARTY, OWNER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS
CONTRACTOR INDEMNIFIED PARTIES WITH RESPECT TO ANY CLAIMS, DAMAGES, LOSSES,
LIABILITIES OR OTHER CAUSES OF ACTION BROUGHT BY SUCH THIRD PARTY ARISING FROM
SUCH MODIFICATION.

10.2       Contractor’s Intellectual Property and Third Party Intellectual
Property.  As between Owner and Contractor, Contractor and its Affiliates shall
retain ownership of (i) all proprietary intellectual property rights owned by
Contractor or its Affiliates prior to the Effective Date; (ii) any improvements
to the intellectual property developed by Contractor or its Affiliates as part
of this Agreement, including proprietary software, proprietary program settings
or other proprietary engineering tools used, modified or adapted for performance
of the Work; and (iii) all proprietary intellectual property rights developed by
Contractor or its Affiliates outside this Agreement, the ITB Agreement or any
other agreements between the Parties related to the Project (hereinafter
referred to as “Contractor’s Intellectual Property”), regardless of whether such
Contractor’s Intellectual Property is included in the Work Product, and nothing
in this Agreement shall result in a transfer of ownership of any Contractor’s
Intellectual Property or the proprietary intellectual property owned and
developed by Subcontractors or Sub-subcontractors (“Third Party Intellectual
Property”).  With respect to such Contractor’s Intellectual Property and Third
Party Intellectual Property relating to the Facility (but subject to Section
10.5 and to the use restrictions in the licenses described in Section 10.7A-C),
Contractor grants to Owner (when the Work Product is conveyed or assigned
pursuant to Section 10.1) an irrevocable, perpetual, non-exclusive and
royalty-free license (including with right to assign such license) to use,
modify and copy such Contractor’s Intellectual Property and Third Party
Intellectual Property for any purpose relating to (a) the Facility (including
any expansions thereto), (b) the Expanded Facility, or (c) any other related
facility, project or program that the Owner, including its Affiliates, joint
ventures, partners and assigns, may choose to develop, expand, design, procure
or construct, provided that with respect to (b) and (c), such license shall only
apply to Authorized Documents.  Subject to Sections 10.6 and 10.7, all
Subcontracts and Sub-subcontracts shall contain provisions consistent with
Section 10.1 and Section 10.2.  Contractor warrants that it is entitled to grant
licenses under any Contractor’s Intellectual Property and Third Party
Intellectual Property (but subject to Section 10.6 below regarding APCI, and
subject to Sections 10.7A, 10.7B and 10.7C regarding the APCI License, BASF
License and [***] License, respectively) necessary for Owner to exploit and have
exploited its full and unrestricted rights regarding the use of the Work Product
for any purpose relating to (a) the Facility (including any expansions thereto),
(b) the Expanded Facility or (c) [***].  If Owner or any of its Affiliates,
joint ventures, partners and assigns uses Contractor’s Intellectual Property or
Third Party Intellectual Property on any project, facility or program that does
not involve Contractor or any of its Affiliates, Owner shall indemnify
Contractor from any

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claims brought against Contractor relating to Contractor’s Intellectual Property
or Third Party Intellectual Property.

10.3       Limitations on Use of Work Product.  The Work Product, including all
copies thereof, shall not be used by Contractor or its Subcontractors,
Sub-subcontractors or any other Persons on any other project for a Person
without first removing all information provided in Section 10.4, all Owner’s
Confidential Information in Section 19.1(ii) and any other information
identifying Owner, the Project, the Facility or the Site.  Pursuant to the
requirements of this Section 10.3, Owner grants Contractor an irrevocable,
perpetual and royalty-free license to use, modify and copy the Work Product for
any other project, except for any of the following which may be in such Work
Product: (i) any proprietary intellectual property rights owned by Owner or any
Affiliate of Owner; or (ii) any proprietary intellectual property rights in
which Owner or an Affiliate of Owner has a license.  As a condition of using on
another project any Work Product that Contractor has a license under this
Section 10.3, Contractor shall remove from the Work Product any reference to the
Project or Owner.  The foregoing license and rights to use any Work Product
granted to Contractor shall be subject to any limitations imposed on Contractor
by third parties which have any ownership interest in such Work Product or any
proprietary intellectual property embedded therein.

10.4       Owner Provided Documents.  Owner represents that it owns or has a
license to the information, data and documentation referenced within Attachment
M of the ITB Agreement, and that Contractor had and continues to have the right
to use such information as the basis of the design of the Facility.  All written
materials, plans, drafts, specifications, computer files or other documents (if
any) prepared or furnished to Contractor by Owner, the Owner Indemnified Parties
or any of Owner’s other consultants, suppliers or contractors shall at all times
remain the property of Owner, and Contractor shall not make use of any such
documents or other media for any other project or for any other purpose other
than to perform the Work and fulfill its obligations under the Agreement.  All
such documents and other media, including all copies thereof, shall be returned
to Owner upon Final Completion or the earlier termination of this Agreement,
except that Contractor and its Subcontractors may, subject to their respective
confidentiality obligations as set forth in ARTICLE 19, retain one (1) record
set of such documents or other media as required by Section 3.13A.
Notwithstanding anything to the contrary in this Agreement, Contractor’s and its
Subcontractors’ computer systems may automatically make and retain back-up
copies of emails containing written materials, plans, drafts, specifications,
computer files or other documents (if any) prepared or furnished by any member
of the Owner Indemnified Parties or any of the Owner Indemnified Parties’ other
consultants, suppliers or contractors and Contractor and any such Subcontractors
may retain such copies in its archival or back-up computer storage for the
period that Contractor and any such Subcontractors normally archive backed-up
computer records, provided that Contractor and any such Subcontractors shall not
access or use such archival or back-up copies for any purpose without the
knowledge and approval of its respective legal counsel, and other than for
compliance with any legal, regulatory or information audit purposes after the
earlier of the completion of the Services or the termination of this Agreement;
provided, further, that such copies are subject to the confidentiality
obligations set forth in ARTICLE 19 until destroyed.  Owner hereby grants to
Contractor, its Affiliates and Subcontractors a non-exclusive, royalty-free,
irrevocable, non-transferable license to use and modify Pre-Existing Owner
Proprietary Work Product (and all Intellectual Property existing or referenced
therein) to the extent required to perform Contractor’s obligations under this
Agreement.  For the purposes of this Agreement, “Pre-

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Existing Owner Proprietary Work Product” means Intellectual Property and written
materials, plans, drafts, specifications, or computer files or other documents,
owned by Owner or its Affiliates prior to the Effective Date or developed or
acquired by Owner or its Affiliates independently of this Agreement.

10.5       License to Use Liquefaction Technology.  Contractor represents that
the rights granted in this ARTICLE 10 are sufficient for the engineering,
procurement, construction, commissioning, pre-commissioning, start-up, testing,
operation, maintenance and repair of the Facility, including for natural gas
pre-treatment, condensate production and the liquefaction of natural gas into
LNG, practicing such technology in the Facility, and transporting, making,
selling, offering to sell, exporting, importing or offering to import throughout
the world, condensate and LNG produced at the Facility.

10.6       APCI Third Party Intellectual Property.  Notwithstanding anything to
the contrary, but subject to the APCI License described in Section 10.7A, (i)
title to drawings, specifications and other data prepared by APCI, or containing
the Third Party Intellectual Property of APCI, shall remain vested in APCI; and
(ii) Owner’s disclosure of any APCI confidential information shall be subject
to, and governed by, Owner’s separate non-disclosure agreement with APCI.

10.7       License to Use Liquefaction Technology.

A.       APCI License.  Contractor shall, prior to and as a condition precedent
to achievement of Substantial Completion of each Train, obtain and grant to
Owner a non-exclusive, paid-up, irrevocable license and transferable right to
(i) use, operate, maintain, repair, and modify all Equipment furnished by APCI;
(ii) practice the APCI natural gas liquefaction process in respect of such
Equipment incorporated into the Facility; and (iii) make, use and sell products
obtained by such use, operation or practice of the Equipment furnished by APCI
to any country in the world (the “APCI License”).  The Parties shall, mutually
agree to, and Contractor shall cause APCI to agree to, a form of assignment of
the APCI License within [***]  ([***]) Days after the Effective Date.

B.       BASF License.  With respect to the BASF gas processing technologies
(including BASF OASE technology and products) that Contractor is providing as
part of the Work, Contractor shall, no later than [***]  ([***]) Days after NTP,
and in any event, prior to and as a condition precedent to achievement of
Substantial Completion of each Train, obtain and grant to Owner an irrevocable,
perpetual, non-exclusive and royalty-free sublicense (including with right to
assign such license other than to a competitor to BASF) to use, modify and copy
BASF gas processing technologies for any purposes related to the Facility (the
“BASF License”).  For purposes of this Section 10.7B, “competitor of BASF” means
any third party who – either itself, or whose Affiliate – develops, owns and/or
markets to any other third parties a process for the removal of acid gases from
gaseous streams by absorption in a liquid absorbent.  The Parties shall mutually
agree to, and Contractor shall cause BASF to agree to, a form of sublicense of
the BASF License within [***]  ([***]) Days after the Effective Date.

C.       [***].

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ARTICLE 11

COMPLETION AND PERFORMANCE LIQUIDATED DAMAGES

11.1        Notice and Requirements for Mechanical Completion and RFSU.

A.        Notice and Requirements for Mechanical Completion.  No later than
[***]  ([***]) Months prior to the Guaranteed Substantial Completion Date for
each Train, Contractor shall provide to Owner for its review and comment
detailed Mechanical Completion requirements, in the form of checklists, for
completion of each system or subsystem of Equipment for each Train.  Once
Contractor has incorporated all of Owner’s comments and/or proposed revisions to
the Mechanical Completion checklists, such Mechanical Completion checklists
shall form a part of the requirements for achieving Mechanical
Completion.  Contractor shall comply with all requirements for Mechanical
Completion set forth in this Agreement, including those requirements set forth
in the definition of the term Mechanical Completion, Attachment A,  Attachment M
and the Mechanical Completion checklists agreed by Owner and Contractor pursuant
to this Section 11.1.  Upon Mechanical Completion of each system or subsystem of
Equipment for the Facility or each Train, Contractor shall certify to Owner in
the form of Schedule L-1 for such system or subsystem or Train (“Mechanical
Completion Certificate”) that all requirements under this Agreement for
Mechanical Completion have occurred, including all of the requirements specified
in the applicable Mechanical Completion checklist have been completed.  The
Mechanical Completion Certificate shall be accompanied by all other supporting
documentation as may be required under this Agreement to establish that the
requirements for Mechanical Completion have been met.

B.        Notice and Requirements of Ready for Start Up.  No later than [***]
 ([***]) Months prior to the Guaranteed Substantial Completion Date for each
Train, Contractor shall provide to Owner for its review and comment detailed
RFSU requirements, in the form of checklists, for each Train.  Once Contractor
has incorporated all of Owner’s comments and/or proposed revisions to such RFSU
checklists, such RFSU checklists shall form a part of the requirements for
achieving RFSU of each Train.  Contractor shall comply with all requirements for
RFSU set forth in this Agreement, including those requirements set forth in the
definition of the term RFSU, Attachment A,  Attachment M and the RFSU checklists
agreed by Owner and Contractor pursuant to this Section 11.1B.  Upon RFSU of a
Train, Contractor shall certify to Owner in the form of Schedule L-3 (“RFSU
Certificate”) that all requirements under this Agreement for RFSU have occurred
with respect to such Train, including all of the requirements specified in the
applicable RFSU checklist have been completed.  The RFSU Certificate shall be
accompanied by all other supporting documentation as may be required under this
Agreement to establish that the requirements for RFSU for such Train have been
met.

11.2        Ready to Load First Cargo.

A.        Notice and Requirements of Ready to Load First Cargo.  Contractor
shall comply with all requirements for RLFC for each Train set forth in this
Agreement, including those requirements set forth in the definition of the
applicable RLFC and those set forth in Attachments A and T.  To the extent not
specified in Attachments A and T, the

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Parties shall, no later than [***]  ([***]) Days prior to the Guaranteed
Substantial Completion Date for the applicable Train, mutually agree upon the
requirements for achieving RLFC for such Train.  At such time as the applicable
Train has achieved RLFC, Contractor shall certify to Owner in the form of
Schedule L-4 (“RLFC Certificate”) that all requirements under this Agreement for
RLFC for such Train have occurred.  The RLFC Certificate for each Train shall be
accompanied by all other supporting documentation as may be required under this
Agreement to establish that the requirements for such RLFC have been
met.  Notwithstanding the foregoing and prior to the First RLFC Window Period
for each Train, Contractor shall cooperate with Owner to propose an alternative
notice and windowing procedure that is more cost efficient and economically
feasible to Owner.  If such alternative is accepted by Owner in its sole
discretion, the foregoing notice and windowing procedure shall be modified by
Change Order.

B.        RLFC Window Period.  Without limitation of any other scheduling
requirements contained in this Agreement, Contractor shall, for each Train,
provide Owner with the following written notices, notifying Owner of the period
when Contractor expects to achieve RLFC for such Train (each period of time
being a  “RLFC Window Period”):

1.        At least [***]  ([***]) Days prior to achievement of RLFC for such
Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period
in which Contractor expects to achieve RLFC for such Train (such [***]  ([***])
Day period referred to as the “First RLFC Window Period”);

2.        At least [***]  ([***]) Days prior to achievement of RLFC for such
Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period
falling within the First RLFC Window Period in which Contractor expects to
achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the
“Second RLFC Window Period”); provided that if Contractor fails to give timely
notice of same, the Second RLFC Window Period shall be the latest [***]  ([***])
Day period within the First RLFC Window Period;

3.        At least [***]  ([***]) Days prior to achievement of RLFC for such
Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period
falling within the Second RLFC Window Period in which Contractor expects to
achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the
“Third RLFC Window Period”);  provided that if Contractor fails to give timely
notice of same, the Third RLFC Window Period shall be the latest [***]  ([***])
Day period within the Second RLFC Window Period; and

4.        At least [***]  ([***]) Days prior to achievement of RLFC for such
Train,  Contractor shall notify Owner in writing of a [***]  ([***]) Day period
falling within the Third RLFC Window Period in which Contractor expects to
achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the
“Fourth RLFC Window Period”); provided that if Contractor fails to give timely
notice of same, the Fourth RLFC Window Period shall be the latest [***]  ([***])
Day period within the Third RLFC Window Period.

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Owner shall be entitled to rely upon such first, second, third and fourth
notices, which are set forth in this Section 11.2B, in scheduling the LNG
Tankers for the purpose of loading the first LNG cargo for each Train; provided,
however, such reliance shall not relieve Owner of its obligation to provide LNG
Tankers for RLFC.  In the event that Contractor at any time becomes aware or has
reason to believe that its ability to achieve RLFC for a Train will be delayed
beyond the applicable RLFC Window Period specified in the then current written
notice given pursuant to this Section 11.2B, Contractor will immediately give
Owner written notice of such fact and of the date on which Contractor then
expects to achieve RLFC for such Train, but such notice shall not relieve
Contractor of its responsibility to achieve RLFC for such Train within the then
current RLFC Window Period or pay RLFC Delay Liquidated Damages.  Owner shall
provide operating personnel pursuant to Section 4.4 and the natural gas feed
pursuant to Section 4.6D for Contractor to achieve RLFC for each Train in
accordance with this Section 11.2.

C.        Delay in RLFC.  If through no fault of Owner Indemnified Parties (i)
RLFC for a Train occurs after the Fourth RLFC Window Period or (ii) the Facility
is unable to load an LNG Tanker to demonstrate RLFC for a Train, then Contractor
shall be liable to and pay to Owner the amounts in Sub-section 11.2C.1 or
11.2C.2 as applicable:

1.        After such LNG Tanker arrives at the Site, [***] U.S. Dollars (U.S.
$[***]) per Day for each Day, or portion thereof, after the Fourth RLFC Window
Period expires until the completion of LNG Tanker loading, subject to a cap of
[***] U.S. Dollars (U.S. $[***]) per applicable Train and subject to
Contractor’s overall liability for Delay Liquidated Damages set forth in Section
20.2; or

2.        If Owner cancels or turns away the LNG Tanker before it arrives at the
Site as a result of notice provided by Contractor to Owner, or if Contractor
fails to provide such notice, through reasonable evidence provided by Contractor
to Owner (such as through schedules, reports or other documents provided by
Contractor) that the Facility will be unable to load an LNG Tanker during the
Fourth RLFC Window Period to demonstrate RLFC for a Train,  then [***] U.S.
Dollars (U.S. $[***]) per LNG Tanker, subject to a cap of [***] U.S. Dollars
(U.S. $[***]) per applicable Train and subject to Contractor’s overall liability
for Delay Liquidated Damages set forth in Section 20.2 (the amounts in clause
11.2C.1 and 11.2C.2 are hereinafter referred to as “RLFC Delay Liquidated
Damages”).

D.        Owner Does Not Timely Deliver LNG Tanker.  If Owner does not deliver
the LNG Tanker to load the first LNG cargo for a Train within the Fourth RLFC
Window Period and Contractor is ready to receive such LNG Tanker and ready to
load LNG into such LNG Tanker, Contractor shall be entitled to a Change Order if
and to the extent permitted under Section 6.8.

E.        LNG Production Plan.  At least [***]  ([***]) months prior to RLFC of
each Train, Contractor shall prepare and provide Owner with Contractor’s LNG
production plan, prepared by Contractor using GECP, detailing Contractor’s
estimated production of LNG prior to Substantial Completion of each Train,
including the dates and volumes of LNG to be produced and the dates in which it
forecasts that such LNG would need to be removed

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from the LNG Storage Tanks to allow for such LNG production.  Such plan shall be
in sufficient detail to allow for Owner to schedule for providing the means for
the removal of LNG from the LNG Storage Tanks, whether by LNG Tankers or
otherwise.  Contractor shall provide Owner with monthly written notices updating
its LNG production plan until [***]  ([***]) months prior to RLFC and then
weekly thereafter, provided, however, such written notices shall not require
Owner to reschedule any LNG Tankers.  As between Owner and Contractor, Owner
shall own all LNG produced by each Train and will be the party responsible for
providing the means for removal of such LNG.  Owner will provide sufficient LNG
tank capacity for Contractor to perform the Performance Tests based on
Contractor’s LNG production plan.

F.        Shiploading Performance Testing.  Contractor shall utilize an LNG
Tanker that arrives at the Facility after RLFC to perform the LNG Shiploading
Performance Test in accordance with the requirements of this Agreement,
including Attachment S and Section 11.2B.  Contractor shall provide Owner with
[***]  ([***]) Days prior written notice of its intent to perform the LNG
Shiploading Performance Test.

11.3        Notice and Requirements for Substantial Completion.  Contractor
shall comply with all requirements for Substantial Completion of each Train
herein, including as set forth in the definition of the term Substantial
Completion and in Attachments A,  S and T.  For the initial Performance Test for
each Train, Contractor shall give Owner not less than [***]  ([***]) Days’ prior
notice of its intention to commence each initial Performance Test for a Train,
and, on the [***]  ([***]) Day and thirtieth (30th) Day immediately prior to
Contractor’s intention to commence such testing activities, Contractor shall
provide notice to Owner.  For all Performance Tests other than the initial
Performance Test for each Train, Contractor shall give the Owner not less than
[***]  ([***]) Days’ written notice of its intention to commence a Performance
Test.  To the extent not specified in Attachment S, the Parties shall, no later
than [***]  ([***]) Days prior to the Guaranteed Substantial Completion Date for
the applicable Train, agree upon final test procedures for the conduct of the
Performance Tests applicable to such Train and the achievement of Substantial
Completion of such Train.  Except for the items listed in Attachment V, the
natural gas feed pursuant to Section 4.6C, and operation personnel to be
provided by Owner under Section 4.4, Contractor shall provide labor, equipment,
supplies, and all other items necessary for the conduct of the Performance
Tests.  Contractor shall analyze the data obtained during all Performance Tests
and ensure that such data reflects the performance standards required
hereunder.  A complete electronic native copy of all raw performance data and a
detailed listing of all testing instrumentation utilized shall be provided to
Owner at the completion of testing.  Upon achieving all requirements under this
Agreement for Substantial Completion of each Train, Contractor shall certify to
Owner in the form of Schedule L-5 (“Substantial Completion Certificate”) that
all of the requirements under this Agreement for Substantial Completion have
occurred and provide Owner with a Substantial Completion Certificate, a
Performance Test report, and analysis to Owner for the applicable Train.  Each
Performance Test report shall include, at minimum: (i) the raw data, (ii) the
procedures and instrumentation utilized for the applicable Performance Test,
(iii) test calculations and information in Microsoft Excel format, and a full
explanation concerning same, for adjustments to the Guarantee Conditions, as and
to the extent specified in Attachment S, and (iv) any other supporting
information used to demonstrate that the Work has met the Minimum Acceptance
Criteria and other requirements of this Agreement.  The Substantial Completion
Certificate for each Train shall be accompanied by all other supporting

81

documentation as may be required to establish that the requirements for
Substantial Completion of such Train have been met.

11.4        Owner Acceptance of Mechanical Completion, RFSU, RLFC and
Substantial Completion.  Owner shall notify Contractor whether it accepts or
rejects a Mechanical Completion Certificate, RFSU Certificate, RLFC Certificate
or Substantial Completion Certificate, as the case may be, within [***]  ([***])
Days following Owner’s receipt thereof.  All Work shall continue during pendency
of Owner’s review.  Acceptance of such Mechanical Completion Certificate, RFSU
Certificate, RLFC Certificate or Substantial Completion Certificate shall be
evidenced by Owner’s signature on such Mechanical Completion Certificate, RFSU
Certificate, RLFC Certificate or Substantial Completion Certificate, which shall
be forwarded to Contractor with such notice.  If Owner does not agree that
Mechanical Completion, RFSU, RLFC or Substantial Completion has occurred (as the
case may be), then Owner shall state the basis for its rejection in reasonable
detail in a notice provided to Contractor.  The Parties shall thereupon promptly
and in good faith confer and make all reasonable efforts to resolve such
issue.  In the event such issue is not resolved within [***]  ([***]) Business
Days following the delivery by Owner of its notice, Owner and Contractor shall
resolve the Dispute in accordance with the Dispute resolution procedures
provided for under ARTICLE 18 herein.  Owner’s acceptance shall not relieve
Contractor of any of its obligations to perform the Work in accordance with the
requirements of this Agreement. If Owner accepts Contractor’s Substantial
Completion Certificate, the calculation of Delay Liquidated Damages shall be
based on the date Owner received such certificate; provided, however, for the
avoidance of doubt, this sentence shall not be construed to mean that
Substantial Completion occurs on the date Owner received such certificate, as
Substantial Completion shall occur only on the date Owner accepts Substantial
Completion.

11.5        Performance Guarantees and Minimum Acceptance Criteria.  Contractor
shall achieve all Minimum Acceptance Criteria and Performance Guarantees for
each Train or pay Performance Liquidated Damages, as described in greater detail
in this Section 11.5.  The Performance Tests for determining whether a Train
achieves the Minimum Acceptance Criteria and Performance Guarantees are
described in Attachment S.  Performance Tests and any repeat Performance Tests
shall be performed as specified in Attachment S.

A.        Minimum Acceptance Criteria Achieved.  In the event that Contractor
fails to achieve any of the Performance Guarantees for a Train, as evidenced by
the Performance Test results, but meets all of the Minimum Acceptance Criteria
for such Train, then Contractor shall prepare a corrective work plan based on
information then currently known that describes in reasonable detail the process
Contractor intends to follow to achieve such Performance Guarantees and submit
such plan to Owner for its review and approval, not to be unreasonably
withheld.  Within [***]  ([***]) Days after Owner’s receipt of such plan and
Contractor’s achievement of, and notification to Owner and Owner’s acceptance
of, all requirements for Substantial Completion for such Train (other than
achievement of such Performance Guarantees), Contractor shall turn over such
Train to Owner and take corrective actions to achieve such Performance
Guarantees.  Upon satisfaction of all of the requirements for Substantial
Completion for such Train (other than achievement of such Performance
Guarantees), Substantial Completion for such Train shall be achieved.  And, for
purposes of the application of Delay Liquidated Damages, Owner’s acceptance of
Substantial Completion shall be deemed to have occurred on the date listed on
the

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Substantial Completion Certificate; provided that all requirements under this
Agreement for Substantial Completion were achieved on such date listed on the
Substantial Completion Certificate (including the applicable Train achieving the
Minimum Acceptance Criteria). Contractor shall only be responsible for the
payment of applicable Delay Liquidated Damages owing up to the date of
Substantial Completion.  After Substantial Completion of such Train, Contractor
shall perform corrective actions to achieve such Performance Guarantees.  Owner
shall give Contractor access to the Site sufficient to perform any corrective
actions, but Contractor shall, at all times, perform such corrective actions so
as not to interfere with the receipt of feed gas or loading of LNG into LNG
Tankers or materially interfere with the production of LNG, unless otherwise
agreed by Owner in its sole discretion, and Owner’s security and safety
requirements.  If such Train has not achieved all of the Performance Guarantees
within [***]  ([***]) Days after the Guaranteed Substantial Completion Date for
such Train (as may be extended as specified below in this Section 11.5A, or as
may be otherwise extended if the Parties agree in writing to so extend), then
Contractor shall cease taking corrective actions to achieve the Performance
Guarantees for such Train, and in that event, Contractor shall pay to Owner in
accordance with Section 13.2 the applicable Performance Liquidated Damages for
such Performance Guarantees based on the results of the last performance test
conducted by Contractor.  The Performance Liquidated Damages shall be calculated
in accordance with Attachment T.  If Owner does not provide Contractor with
access to the Site sufficient to perform such corrective actions in accordance
with the corrective work plan agreed upon by the Parties within such [***]
 ([***]) Day period, such [***]  ([***]) Day timeframe may, at Contractor’s
written request, be extended to the extent necessary for Contractor to perform
such corrective actions in accordance with the corrective work plan agreed by
the Parties.  Contractor’s liability under this Section 11.5A shall be in
addition to any Delay Liquidated Damages owed under this Agreement.

B.        Minimum Acceptance Criteria Not Achieved.  In the event that a Train
fails to achieve any of the Minimum Acceptance Criteria, as evidenced by
Performance Test results, by the applicable Guaranteed Substantial Completion
Date, as such date may be extended by Change Order as provided herein, then (i)
Substantial Completion for such Train shall not occur and (ii) the provisions of
Section 13.1 shall apply.  In addition to the foregoing, Contractor shall
prepare a corrective work plan to achieve such Minimum Acceptance Criteria and
submit such plan to Owner for its review and comment.  Contractor shall
commence, on the date on which the Work for such Train or component thereof was
shown, through the Performance Tests, to have failed to achieve one or more
Minimum Acceptance Criteria for the applicable Train, to correct the Work to
enable such Train to achieve all of the Minimum Acceptance Criteria and
otherwise achieve Substantial Completion for such Train, and Contractor shall
achieve all such Minimum Acceptance Criteria and otherwise achieve Substantial
Completion for such Train no later than a period of [***]  ([***]) months after
the Guaranteed Substantial Completion Date (“Minimum Acceptance Criteria
Correction Plan”).  If, on the one hand, such Train has not achieved all of the
Minimum Acceptance Criteria and Substantial Completion, upon the termination of
the Minimum Acceptance Criteria Correction Period, then Owner may, in its sole
discretion, either (a) grant Contractor an additional [***]  ([***]) month
period to achieve all such Minimum Acceptance Criteria and otherwise achieve
Substantial Completion for such

83

Train (“Additional Minimum Acceptance Criteria Period”)  under the same terms
and conditions as the first, including the application of Section 13.1, or (b)
claim Contractor in Default pursuant to Section 16.1.  In the event that Owner
claims such a Default at the end of either the Minimum Acceptance Criteria
Correction Period or the optional Additional Minimum Acceptance Criteria Period,
Owner shall be entitled to any and all damages, costs, losses and expenses to
which Owner is entitled under Section 16.1D.  If, on the other hand, such Train
has achieved all of the Minimum Acceptance Criteria and Substantial Completion
during the Minimum Acceptance Criteria Correction Period (or during the optional
Additional Minimum Acceptance Criteria Period, should Owner elect that option),
then Contractor shall be liable to Owner for all Liquidated Damages under
Section 13.1.

11.6        Punchlist.  Prior to Mechanical Completion, RFSU, RLFC, and
Substantial Completion of each Train, as applicable, Owner and Contractor shall
inspect the Work related to such Train, and Contractor shall prepare a proposed
a list of Punchlist items identified as needing to be completed or corrected as
a result of such inspection.  Contractor shall promptly provide the proposed
Punchlist to Owner for its review and approval, together with an estimate of the
time and cost necessary to complete or correct each Punchlist item.  Contractor
shall add to the proposed Punchlist any items that are identified by Owner
during its review, and Contractor shall immediately initiate measures to
complete or correct, as appropriate, any Punchlist item on Contractor’s proposed
list or otherwise that Owner in the exercise of its reasonable judgment,
believes must be completed or corrected for such Train to achieve Substantial
Completion.  Upon Contractor’s completion or correction of any Punchlist item
necessary to achieve Mechanical Completion, RFSU, RLFC, and Substantial
Completion, as applicable, and the Parties agreement on Contractor’s proposed
Punchlist, as modified by any Owner additions, such Punchlist shall govern
Contractor’s performance of the Punchlist up to RFSU, RLFC, Substantial
Completion or Final Completion, as applicable; provided that the failure to
include any items on the Punchlist shall not alter the responsibility of
Contractor to complete all Work in accordance with the terms and provisions of
this Agreement.  After Substantial Completion of the applicable Train, Owner
shall provide reasonable access to those portions of the Site sufficient for
Contractor to perform its Punchlist so long as such activities do not interfere
with the operation of the Facility or Train 3 after substantial completion of
Train 3 under the Train 3 EPC Agreement and subject to Owner’s permit to work
system.  The Punchlist shall be completed within [***]  ([***]) Days after
Substantial Completion of each Train, as applicable, failing which, Owner may,
in addition to any other rights that it may have under this Agreement, complete
such Punchlist at the expense of Contractor.  In the event Owner elects to
complete such Punchlist, Contractor shall immediately pay Owner (directly, by
offset, or by collection on the Letter of Credit, at Owner’s sole discretion)
all costs and expenses incurred in performing such Punchlist.

11.7        Notice and Requirements for Final Completion.  Final Completion
shall be achieved when all requirements for Final Completion under this
Agreement, including those set forth in the definition of Final Completion under
Section 1.1, have been satisfied.  Upon Final Completion, Contractor shall
certify to Owner in the form of Schedule L-6 (“Final Completion Certificate”)
that all of the requirements under this Agreement for Final Completion have
occurred.  Owner shall notify Contractor whether it accepts or rejects the Final
Completion Certificate within [***]  ([***]) Days following Owner’s receipt
thereof.  Acceptance of such certificate shall be evidenced by Owner’s signature
on such certificate, which shall be forwarded to Contractor with such
notice.  If Owner does not agree that Final Completion has occurred, then

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Owner shall state the basis for its rejection in reasonable detail in a notice
provided to Contractor.  The Parties shall thereupon promptly and in good faith
confer and make all reasonable efforts to resolve such issue.  In the event such
issue is not resolved within [***]  ([***]) Business Days following the delivery
by Owner of its notice, Owner and Contractor shall resolve the Dispute in
accordance with the Dispute resolution procedures provided for under ARTICLE 18;
provided, however, if such deficiencies relate to the failure to complete the
Punchlist, Owner may, in addition to any other rights that it may have under
this Agreement, complete such Punchlist at the expense of Contractor in
accordance with Section 11.6.

11.8        Partial Occupancy and Use.  Prior to Contractor achieving
Substantial Completion of a Train, Owner may, upon giving written notice to
Contractor, occupy and use all or any portion of the buildings (excluding
warehouses) identified in Attachment A for such Train (and with the Parties’
mutual agreement, any other portion of the Work related to such Train) then
capable of functioning safely, provided that such occupancy or use is authorized
by the Governmental Instrumentality (to the extent such authorization is
necessary) and Owner’s insurance company or companies providing property
insurance and builder’s risk coverage have consented to such partial occupancy
or use (to the extent such consent is necessary) and Owner shall insure that
portion of such buildings it takes occupancy and use upon taking such occupancy
and use.  Contractor shall assist Owner and take reasonable steps in obtaining
consent of the insurance company or companies and applicable Governmental
Instrumentalities.  Immediately prior to such partial occupancy or use, Owner
and Contractor shall jointly inspect the area to be occupied or portion of the
Work to be used in order to determine and record the condition of the Work and
all personnel and environmental safety aspects of the Work and Owner shall
insure such building(s) immediately upon taking over such building(s).  Such
occupancy or use shall not in any way release Contractor or any surety of
Contractor from any obligations or liabilities pursuant to this Agreement,
including the obligation to engineer, procure and construct a fully operational
natural gas liquefaction facility and export terminal within the required times
set forth in the Key Dates and otherwise in accordance with all requirements of
this Agreement, nor shall such occupancy or use be deemed to be an acceptance by
Owner of such portion of the Work.  For any portion of the Work that Owner
occupies and uses pursuant to this Section 11.8, the Defect Correction Period
for that portion of the Work shall commence upon Owner’s occupancy and use of
such portion of the Work and the risk of loss for such portion of the Work shall
transfer to Owner, notwithstanding Section 8.2; provided that, the risk of loss
shall not transfer, and the Defect Correction Period shall not commence, for any
Equipment housed but not operating within such portion of the Work (other than
HVAC and lighting).

11.9        Advice and Assistance after Substantial Completion.  After
Substantial Completion of a Train and for a period of [***]  ([***]) Days,
Contractor shall, if requested by Owner, provide up to twenty (20) Contractor
personnel who participated in the pre-commissioning, commissioning, start-up,
operating and testing of the applicable Train to provide advice and assistance
to Owner in the operation of the Facility under Owner’s direction and
control.  The names and positions of such personnel shall be provided to Owner
for its approval, not be unreasonably withheld, within [***]  ([***]) Days
before the anticipated date to achieve Substantial Completion for the applicable
Train.  Such personnel shall be paid on a cost-reimbursable basis in accordance
with the rates specified in Schedule D-5 for a duration not to exceed [***]
 ([***]) Days, unless otherwise agreed to by the Parties in writing.  Contractor
shall not remove or replace such personnel, except as permitted under Section
2.2A.  Owner may terminate

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the performance of such personnel at any time by providing two (2) weeks’
written notice to Contractor thereof at no additional cost, except for the value
of the work performed by such personnel prior to termination in accordance with
Schedule D-5.

11.10        Long-Term Obligations.  No acceptance by Owner of any or all of the
Work or any other obligations of Contractor under this Agreement, including
acceptance of any Mechanical Completion, RFSU, RLFC, Substantial Completion, or
Final Completion, nor any payment made hereunder, whether an interim or final
payment, shall in any way release Contractor or any surety of Contractor from
any obligations or liability pursuant to this Agreement, including Warranty
obligations, any liabilities for which insurance is required or any other
responsibility of Contractor, including the payment of any and all fines and
penalties assessed to the extent caused by Contractor’s failure to comply with
any Applicable Law.  It is expressly understood and agreed by the Parties that
nothing in this ARTICLE 11 shall in any way modify or alter Contractor’s
obligations under ARTICLE 12 and ARTICLE 13 hereof.

ARTICLE 12

WARRANTY AND CORRECTION OF WORK

12.1        Warranty.

A.        General.  The warranties set forth in this ARTICLE 12 (each
a  “Warranty” or collectively, the “Warranties”) are in addition to any of the
Minimum Acceptance Criteria or Performance Guarantees set forth in this
Agreement.  Any Work, or component thereof, that is not in conformity with any
Warranty is defective (“Defective”) and contains a defect (“Defect”).

B.        Warranty of Work.  Contractor hereby warrants that the Facility and
the Work, including Equipment, and each component thereof shall be:

1.        new, complete, and of suitable grade for the intended function and use
in accordance with this Agreement;

2.        in accordance with all of the requirements of this Agreement,
including in accordance with GECP, Applicable Law and Applicable Codes and
Standards;

3.        free from encumbrances to title (provided that Owner has made payment
to Contractor of all undisputed amounts owed to Contractor in accordance with
the terms of this Agreement), as set forth in greater detail in Section 8.1;

4.        free from defects in design, material and workmanship, provided that
tolerances or deviations in design, material and workmanship allowable by
Applicable Law or Applicable Codes and Standards or GECP (where no such
Applicable Law or Applicable Codes and Standards apply) shall not be considered
a defect unless this Agreement sets forth stricter deviations or tolerances;

5.        capable of operating in accordance with all requirements of this
Agreement, including Applicable Law and Applicable Codes and Standards; and

 

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6.        unless agreed to by Owner, composed and made of only proven
technology, of a type in commercial operation at the Effective Date of this
Agreement.

C.       Assignment and Enforcement of Subcontractor Warranties.  Contractor
shall, without additional cost to Owner, use all commercially reasonable efforts
to obtain warranties from Major Subcontractors and Major Sub-subcontractors that
meet or exceed the requirements of this Agreement; provided,  however,
Contractor shall not in any way be relieved of its responsibilities and
liability to Owner under this Agreement, regardless of whether such Major
Subcontractor or Major Sub-subcontractor warranties meet the requirements of
this Agreement, as Contractor shall be fully responsible and liable to Owner for
its Warranty and Corrective Work obligations and liability under this Agreement
for all Work.  All such warranties shall be deemed to run to the benefit of
Owner and Contractor.  Such warranties, with duly executed instruments assigning
the warranties to Owner, shall be delivered to Owner upon Substantial Completion
of each Train, as applicable.  All warranties provided by any Subcontractor or
Sub-subcontractor shall be deemed to run to the benefit of Owner and Contractor,
except that Owner may only directly enforce such Subcontractor or
Sub-subcontractor warranty directly against such Subcontractor or
Sub-subcontractor after the expiration of the applicable Defect Correction
Period; provided that such Subcontractor or Sub-subcontractor warranty extends
beyond such Defect Correction Period.  Contractor agrees that Contractor’s
Warranties, as provided under this ARTICLE 12 shall apply to all Work regardless
of the provisions of any Subcontractor or Sub-subcontractor warranty, and such
Subcontractor or Sub-subcontractor warranties shall not be a limitation of such
Contractor Warranties.  This Section 12.1C shall not in any way be construed to
limit Contractor’s liability under this Agreement for the entire Work or its
obligation to enforce Subcontractor warranties.

D.        Exceptions to Warranty.  The Warranty excludes remedy, and Contractor
shall have no liability to Owner, for damage or Defect occurring after
Substantial Completion of each Train to the extent caused by: (i) improper
repairs or alterations, misuse, neglect or accident by Owner or any Third Party;
(ii) operation, maintenance or use of Work or any component thereof in a manner
not in compliance with a material requirement of operations and maintenance
manuals delivered by Contractor to Owner; or (iii) normal wear, tear and
corrosion.

12.2       Correction of Work Prior to Substantial Completion of Each Train.

A.     General Rights.  All Work shall be subject to inspection by Owner,
Lender, Independent Engineer, and either of their representatives at all times
to determine whether the Work conforms to the requirements of this Agreement as
specified herein, provided that Owner shall conduct its inspections during
regular business hours and provide Contractor with reasonably prior written
notice of such inspections (except that these limitations on notice and regular
business hours to not apply to inspections at the Site, laydown areas in the
vicinity of the Site, or any location at which Work is performed which is
controlled by Contractor, and such inspections may occur at any time without
restriction), provided further that this requirement for notice shall in no way
limit Owner’s rights under Section 3.3.  Contractor shall furnish Owner, Lender,
Independent Engineer,

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and either of their representatives with access to all locations where Work is
in progress on the Site, laydown areas in the vicinity of the Site, or any
location where Work is performed which is controlled by Contractor and, upon
reasonable advance notice, other Contractor and Major Subcontractor and
Sub-Subcontractor locations where Work is performed.  If prior to Substantial
Completion of a Train, in the judgment of Owner, any Work is Defective, then
Contractor shall, at its own cost and expense, promptly and on an expedited
basis correct such Defective Work and any other portions of the Facility damaged
or affected by such Defective Work, whether by repair, replacement or otherwise
upon written notice from Owner.  Subject to Contractor’s right to pursue a
Dispute under ARTICLE 18, the decision of Owner as to whether the Work is
conforming or Defective shall be followed by Contractor, and Contractor shall
comply with the instructions of Owner in all such matters while pursuing any
such Dispute.  Owner shall not direct how, or the timing of when, Contractor
will perform such repair or replacement Work, and Contractor shall have the
right to consider efficiency and cost concerns in scheduling such repair or
replacement Work in preparing its plan for carrying out such repair or
replacement Work, as long as its repair or replacement is performed and
completed prior to Substantial Completion of the applicable Train, provided that
if (i) such Defective Work (a) relates to safety, (b) relates to Owner’s other
contractors’ tie-ins to the Facility or the Train 3 Liquefaction Facility or
structural integrity, or (c) impacts operation of Train 1, Train 2 or Train 3 or
(ii) there will be additional Work coupled (physically, mechanically,
electrically, operationally or otherwise) to the Defective Work, Contractor
shall repair or replace such Defective Work within a reasonable time, provided
further that if the Defective Work materially affects the operation or use of
any Train that has achieved Substantial Completion or Train 3 after it has
achieved substantial completion under the Train 3 EPC Agreement or presents an
imminent threat to the safety or health of any Person, then Contractor shall
commence to repair or replace the Defective Work within twenty-four (24) hours
after receipt of notice of such Defective Work, and thereafter continue to
proceed diligently to complete the same.  If it is later determined that the
Work was not Defective, then Owner shall reimburse Contractor for all costs
incurred in connection with such repair or replacement (including markups for
Contractor’s profits and overhead) and a Change Order shall be issued for such
amount (including costs incurred in disassembling, making safe and reassembling
such Work) and shall address any impact the repair or replacement may have had
on the Key Dates.  If Contractor fails to commence to repair (which such
commencement may include detailed planning activities) or replace any Defective
Work as required above, then Owner may (after providing [***]  ([***]) Days’
prior written notice to Contractor, but such notice is not required if the
Defective Work materially affects the operation or use of any Train that has
achieved Substantial Completion or Train 3 after it has achieved substantial
completion under the Train 3 EPC Agreement or presents an imminent threat to the
safety or health of any Person) repair or replace such Defective Work and the
reasonable expense thereof shall be paid by Contractor.

B.     Witness Points.  No later than [***]  ([***]) Days after NTP, Contractor
shall submit to Owner for its approval a proposed list of witness points for
each item of the Work. Contractor shall modify such list of witness points based
on any additional or different witness points Owner desires.  After Owner’s
approval of the witness points, Contractor shall provide Owner with at [***]
 ([***]) Days’ prior notice of the actual scheduled date of each of the tests
relating to such witness points at the Site and [***]  ([***]) Days’ prior

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notice of the actual scheduled date of each of the tests relating to such
witness points.  Notwithstanding such right to witness tests, Owner, Lender, and
Independent Engineer shall not interrupt or interfere with any test or require
changes while witnessing such tests (unless such interruption relates to
safety).  Contractor shall cooperate with Owner, Lender and Independent Engineer
if Owner, Lender or Independent Engineer elects to witness any additional tests,
and Contractor acknowledges that Owner, Lender and Independent Engineer shall
have the right to witness all tests being performed in connection with the
Work.  Owner’s, Lender’s and Independent Engineer’s right of inspection as set
forth herein applies only to its witnessing of witness points for Work and shall
not be construed to imply a limitation on Owner’s, Lender’s or Independent
Engineer’s right to inspect any portion on the Work (including Equipment) at any
time in its sole discretion and in accordance with this Agreement.

C.      No Obligation to Inspect.  Owner’s, Lender’s, and Independent Engineer’s
right to conduct inspections under Sections 12.2A and 12.2B shall not obligate
Owner, Lender or Independent Engineer to do so.  Neither the exercise of Owner,
Lender or Independent Engineer of any such right, nor any failure on the part of
Owner, Lender, or Independent Engineer to discover or reject Defective Work
shall be construed to imply an acceptance of such Defective Work or a waiver of
such Defect.

D.      Cost of Disassembling.  The cost of disassembling, dismantling or making
safe finished Work for the purpose of inspection, and reassembling such portions
(and any delay associated therewith) shall be borne by Owner if such Work is
found to conform with the requirements of this Agreement and by Contractor if
such Work is found to be Defective.

12.3      Correction of Work After Substantial Completion of Each Train.

A.      Corrective Work.  If, during the Defect Correction Period for either
Train, any Work for such Train is found to be Defective and Contractor is aware
of such Defect or Owner provides written notice to Contractor within such Defect
Correction Period regarding such Defect, Contractor shall, at its sole cost and
expense, promptly and on an expedited basis (i) correct such Defective Work,
whether by repair, replacement or otherwise, including any and all obligations
in connection with such repair, replacement or otherwise, such as in and out
costs and open and close costs, storage costs, labor, testing, Taxes, expediting
costs, Texas Sales and Use Tax, transportation costs and any other costs
necessary to fully correct the Work and (ii) any other physical loss or damage
to any portions of the Facility damaged or affected by such Defective Work
(“Corrective Work”), provided, however, with respect to item (ii), Contractor’s
liability shall be limited to [***] U.S. Dollars (U.S. $[***]) per occurrence in
accordance with Section 17.1F, with a cumulative per occurrence of [***] U.S.
Dollars (U.S. $[***]) under the Train 3 EPC Agreement and this Agreement.  Any
such notice from Owner shall state with reasonable specificity the date of
occurrence or observation of the Defect and the reasons supporting Owner’s
belief that Contractor is responsible for performing Corrective Work. After
Substantial Completion of the applicable Train, Owner shall provide Contractor
with access on the Facility and the Train 3 Liquefaction Facility and
de-energize and de-pressurize the applicable Equipment sufficient to perform the
Corrective Work, so long as

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such access does not interfere with the construction or operation of the
Facility or the Train 3 Liquefaction Facility and subject to Owner’s permit to
work system.  In the event Contractor utilizes spare parts owned by Owner in the
course of performing the Corrective Work, Contractor shall supply Owner free of
charge with new spare parts equivalent in quality and quantity to all such spare
parts used by Contractor as soon as possible following the utilization of such
spare parts.

B.          Owner Right to Correct or Complete Defective Work.

1.      After Substantial Completion of the applicable Train, and during the
Defect Correction Period, and subject to Section 12.3B.2, if Contractor fails to
commence the Corrective Work (which commencement may include the detailed
planning associated with the on-Site implementation of the Corrective Work)
within a reasonable period of time not to exceed [***]  ([***]) Business Days
after Contractor’s receipt of written notice from Owner or does not diligently
perform such Corrective Work on an expedited basis (provided that Contractor’s
timeline for performance shall be extended to the extent that Contractor is not
provided reasonable access to those portions of the Facility or Train 3
Liquefaction Facility that have achieved Substantial Completion so that
Contractor may commence, continue and complete the Corrective Work), then Owner,
upon written notice to Contractor, may (as its sole and exclusive remedy for the
Defect (except for its right to enforce Contractor’s indemnification obligations
under the Agreement) perform such Corrective Work, and Contractor shall be
liable to Owner for all reasonable costs and expenses incurred by Owner in
connection with such Corrective Work and shall pay Owner (directly, by offset or
by collection on the Letter of Credit, at Owner’s sole discretion) an amount
equal to such costs and expenses; or

2.      If any Defective Work (i) materially affects Train 1’s, Train 2’s or
Train 3’s production or loading capabilities and would put the Facility at risk
of being unable to operate or (ii) presents an imminent threat to the safety or
health of any Person and Owner knows of such Defective Work, Owner may (in
addition to any other remedies that it has under this Agreement) perform the
Corrective Work without giving prior notice to Contractor (provided that Owner
shall give Contractor notice of such event as soon as reasonably possible after
becoming aware of such Defective Work), and, in such event, Contractor shall be
liable to Owner for all reasonable costs and expenses incurred by Owner in
connection with such Corrective Work and shall pay Owner (directly, by offset or
by collection on the Letter of Credit, at Owner’s sole discretion) an amount
equal to such costs and expenses (which costs and expenses shall be adequately
documented and supported by Owner).  If Corrective Work is performed by Owner on
Defective Work without providing any advance notice to Contractor, then
Contractor’s obligations to perform Corrective Work on such Defective Work shall
no longer apply to such Defective Work  (it being understood that, at
Contractor’s cost, and in Owner’s sole discretion, Owner may be able to obtain a
replacement warranty from a third-party with respect to such item of Defective
Work), provided that Contractor’s obligations under this Agreement with respect
to all other portions of the Facility (including an portion of Equipment) shall
continue in full force and effect,

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including continuing in full force and effect with respect to any portions of
the item of the same Equipment or portion of the Facility in which Owner
performed the Corrective Work (except for the specific Defect being addressed).

C.      Extended Defect Correction Period for Corrective Work.  With respect to
any Corrective Work except for the Corrective Work for which Contractor’s
warranty obligations do not apply as specified in Section 12.3B.2, the Defect
Correction Period for such Corrective Work shall be extended for an additional
one (1) year from the date of the completion of such Corrective Work; provided,
 however, in no event shall (i) the Defect Correction Period for such Corrective
Work be less than the original Defect Correction Period or, except for
Structural Work, extend beyond [***]  ([***]) Months after Contractor’s
achievement of Substantial Completion of the applicable Train, and (ii) the
Defect Correction Period for Structural Work be extended beyond the original
three (3) year period.

D.     Extension for Downtime.  If at any time any Equipment or component of
Equipment ceases to operate solely due to a Defect, then the Defect Correction
Period for such Equipment shall be automatically extended without the further
action of either Party by a period equal to the full duration of such period of
non-performance, subject to a cap on the Defect Correction Period of [***]
 ([***]) Months after Contractor’s achievement of Substantial Completion for the
applicable Train and provided that this Section 12.3D shall not apply to
Structural Work.

E.     Standards for Corrective Work.  All Corrective Work shall be performed
subject to the same terms and conditions under this Agreement as the original
Work is required to be performed.  Any change to parts or Equipment that would
alter the requirements of this Agreement may be made only with prior approval of
Owner.

F.     No Limitation.  Nothing contained in this Section 12.3 shall be construed
to establish a period of limitation with respect to other obligations which
Contractor might have under this Agreement.  However, Contractor shall not be
obligated to perform any Corrective Work discovered after the expiration of the
Defect Correction Period of the relevant Train.

12.4      Assignability of Warranties.  The Warranties made in this Agreement
shall be for the benefit of Owner and its successors and assigns and the
respective successors and assigns of any of them, and are fully transferable and
assignable.

12.5      Waiver of Implied Warranties. Except for any express warranties under
this Agreement (including the Warranties), the Parties hereby (i) disclaim any
and all other warranties, including the implied warranty of merchantability and
implied warranty of fitness for a particular purpose, and (ii) waive the
equitable remedy of rescission available under the law for a breach of warranty
or a claim for Defective Work (but such waiver shall not affect any of Owner’s
rights under this Agreement, including termination pursuant to Article 16).  The
Parties agree that after Substantial Completion of the applicable Train, the
remedies set forth in this ARTICLE 12 shall be the Owner’s sole and exclusive
remedy for a breach of warranty or any other claim for Defective Work related to
such Train, whether based in contract, tort (including negligence and strict

91

liability) or otherwise, provided that this shall not limit Contractor’s
obligations to achieve the Performance Guarantees, Contractor’s Punchlist
obligations, Contractor’s indemnity obligations under this Agreement, or the
Owner’s rights to withhold or draw on the letter of credit under this Agreement
with respect to such Train.

ARTICLE 13

GUARANTEE OF TIMELY COMPLETION, DELAY LIQUIDATED DAMAGES, AND EARLY COMPLETION
BONUS

13.1       Delay Liquidated Damages.

A.      Delay in Substantial Completion of Train 1.  If Substantial Completion
of Train 1 occurs after the Guaranteed Train 1 Substantial Completion Date,
Contractor shall be liable and pay to Owner the amounts listed in Schedule E-2
per Day for each Day, or portion thereof, of delay until Substantial Completion
of Train 1 occurs (the “Train 1 Delay Liquidated Damages”) subject to the
aggregate limit of such payments in Section 20.2A.

B.      Delay in Substantial Completion of Train 2.  If Substantial Completion
of Train 2 occurs after the Guaranteed Train 2 Substantial Completion Date,
Contractor shall be liable and pay to Owner the amounts listed in Schedule E-2
per Day for each Day, or portion thereof, of delay until Substantial Completion
of Train 2 occurs (the “Train 2 Delay Liquidated Damages”) subject to the
aggregate limit of such payments in Section 20.2B.

C.      RLFC Delay Liquidated Damages.  RLFC Delay Liquidated Damages shall be
assessed in accordance with Section 11.2C.

13.2      Payment of Liquidated Damages.  With respect to any Liquidated Damages
that Contractor is liable for under this Agreement, Owner, at its sole
discretion, may either (i) invoice Contractor for such Liquidated Damages, and
within [***]  ([***]) Days after Contractor’s receipt of such invoice,
Contractor shall pay Owner Liquidated Damages, (ii) withhold from Contractor
amounts that are otherwise due and payable to Contractor in the amount of such
Liquidated Damages, or (iii) collect on the Letter of Credit in the amount of
such Liquidated Damages.  In addition, with respect to the achievement of
Substantial Completion of each Train, Contractor shall pay Owner all Delay
Liquidated Damages, if any, owed under this Agreement for such respective
Substantial Completion as a condition precedent to achieving Substantial
Completion of such Train.

13.3      Early Completion Bonus.

A.          Early Completion Bonus for Production Prior to the Early Completion
Bonus Date.

1.      If Substantial Completion of Train 1 occurs on or before the Guaranteed
Train 1 Substantial Completion Date,, Owner shall pay Contractor a bonus in the
amount of [***] (U.S.$ [***]) per MMBtu of the LNG that is both (i) produced by
Train 1 between the period of first production of LNG from Train 1 and the
Guaranteed Train 1 Substantial Completion Date and (ii) loaded onto an

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LNG Tanker for delivery to Owner’s third-party customers prior to the Guaranteed
Train 1 Substantial Completion Date (“Early Completion Bonus for Train 1”).

2.      If Substantial Completion of Train 2 occurs on or before the Guaranteed
Train 2 Substantial Completion Date, Owner shall pay Contractor a bonus in the
amount of [***] (U.S.$ [***]) per MMBtu of the LNG that is both (i) produced by
Train 2 between the period of first production of LNG from Train 2 and the
Guaranteed Train 2 Substantial Completion Date and (ii) loaded onto an LNG
Tanker for delivery to Owner’s third-party customers prior to the Guaranteed
Train 2 Substantial Completion Date (“Early Completion Bonus for Train 2”).

B.          Early Completion Bonus for Production Prior to the DFCD Date.

1.       If Substantial Completion of Train 1 occurs on or before the Guaranteed
Train 1 Substantial Completion Date,, then in addition to the Early Completion
Bonus for Train 1, Owner shall pay Contractor a bonus in the amount of [***]
(U.S.$ [***]) per MMBtu of the LNG that is both (i) produced by Train 1 on or
after the Guaranteed Train 1 Substantial Completion Date, and (ii) loaded onto
an LNG Tanker for delivery to Owner’s third-party customers prior to the date on
which the first commercial delivery is declared under the first LNG sales and
purchase agreement to declare commercial deliveries for Train 1 (“DFCD Date for
Train 1”).

2.       If Substantial Completion of Train 2 occurs on or before the Guaranteed
Train 2 Substantial Completion Date,, then in addition to the Early Completion
Bonus for Train 2, Owner shall pay Contractor a bonus in the amount of
[***]  (U.S.$ [***]) per MMBtu of the LNG that is both (i) produced by Train 2
on or after the Guaranteed Train 2 Substantial Completion Date, and (ii) loaded
onto an LNG Tanker for delivery to Owner’s third-party customers prior to the
date on which the first commercial delivery is declared under the first LNG
sales and purchase agreement to declare commercial deliveries for Train 2 (“DFCD
Date for Train 2”).

C.         Owner shall pay any Early Completion Bonus accruing for each Train
within [***]  ([***]) Days after (i) the DFCD Date for Train 1 or the DFCD Date
for Train 2, as applicable, and (ii) Owner’s receipt of an invoice for such
Early Completion Bonus.

ARTICLE 14

CONTRACTOR’S REPRESENTATIONS

14.1      Contractor Representations.  Contractor represents and warrants, as
applicable that:

A.      Corporate Standing.  It is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, is authorized and
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a material adverse effect on its financial condition,
operations, prospects, taxes or business.

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B.      No Violation of Law; Litigation.  It is not in violation of any
Applicable Law or judgment entered by any Governmental Instrumentality, which
violations, individually or in the aggregate, would affect its performance of
any obligations under this Agreement.  There are no legal or arbitration
proceedings or any proceeding by or before any Governmental Instrumentality, now
pending or (to the best knowledge of Contractor) threatened against Contractor
that, if adversely determined, could reasonably be expected to have a material
adverse effect on the financial condition, operations, prospects or business, as
a whole, of Contractor, or its ability to perform under this Agreement.

C.      Licenses.  It is the holder of all business licenses and registrations
required to permit it to operate or conduct its business now and as contemplated
by this Agreement.

D.      No Breach.  Neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof will conflict with or result in a breach of, or
require any consent under, the charter or by-laws of Contractor, or any
Applicable Law or regulation, or any order, writ, injunction or decree of any
court, or any agreement or instrument to which Contractor is a party or by which
it is bound or to which it or any of its property or assets is subject, or
constitute a default under any such agreement or instrument.

E.      Corporate Action.  It has all necessary power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by Contractor of this Agreement has been duly
authorized by all necessary action on its part; and this Agreement has been duly
and validly executed and delivered by Contractor and constitutes a legal, valid
and binding obligation of Contractor enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to the enforcement
of creditors’ rights generally.

F.      Financial Solvency.  It is financially solvent, able to pay all debts as
they mature and possesses sufficient working capital to complete the Work and
perform its obligations hereunder.  Guarantor, guaranteeing the obligations of
Contractor pursuant to Section 21.17 of this Agreement, is financially solvent,
able to pay all debts as they mature, and possesses sufficient working capital
to perform the Parent Guarantees.

ARTICLE 15

OWNER’S REPRESENTATIONS

15.1       Owner Representations.  Owner represents and warrants that:

A.      Corporate Standing.  It is a limited liability company duly organized,
validly existing and in good standing under the laws of Texas, is qualified to
do business in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary and where failure so to qualify would
have a material adverse effect on its financial condition, operations, prospects
or business.

B.      No Violation of Law; Litigation.  It is not in violation of any
Applicable Law, or judgment entered by any Governmental Instrumentality, which
violations,

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individually or in the aggregate, would affect its performance of any
obligations under this Agreement.  There are no legal or arbitration proceedings
or any proceeding by or before any Governmental Instrumentality, now pending or
(to the best knowledge of Owner) threatened against Owner that, if adversely
determined, could reasonably be expected to have a material adverse effect on
the financial condition, operations, prospects or business, as a whole, of
Owner, or its ability to perform under this Agreement.

C.      No Breach.  Neither the execution and delivery of this Agreement, nor
the consummation of the transactions herein contemplated or compliance with the
terms and provisions hereof and thereof will conflict with or result in a breach
of, or require any consent under, the operating agreement or by-laws of Owner,
any Applicable Law, any order, writ, injunction or decree of any court, or any
agreement or instrument to which Owner is a party or by which it is bound or to
which it or any of its property or assets is subject, or constitute a default
under any such agreement or instrument.

D.      Corporate Action.  It has all necessary power and authority to execute,
deliver and perform its obligations under this Agreement; the execution,
delivery and performance by Owner of this Agreement has been duly authorized by
all necessary action on its part; and this Agreement has been duly and validly
executed and delivered by Owner and constitutes a legal, valid and binding
obligation of Owner enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization
or moratorium or other similar laws relating to the enforcement of creditors’
rights generally.

E.      Other Owners.  Owner represents that it is authorized to bind and does
bind all owners with an interest in the Project, or an interest in the product
of the Work (or who may claim any such interest through Owner), to the releases,
limitations on liability and other protections of Contractor set forth in this
Agreement.  Owner’s successors, assigns and any future recipient of any equity
ownership in the Project or the Facility shall be bound by the releases,
limitations on liability and other protections of Contractor set forth in this
Agreement, and Owner shall obtain the express written agreement of such equity
participants to be bound by such releases, limitations of liability and other
protections of Contractor.

15.2      Financial Solvency.  Upon issuance of NTP, it will be financially
solvent, able to pay its debts as they mature and will have access to sufficient
working capital to perform its obligations hereunder.

ARTICLE 16

DEFAULT, TERMINATION AND SUSPENSION

16.1      Default by Contractor.

A.      Owner Rights Upon Contractor Default.  Contractor shall be in “Default”
if Contractor shall at any time (i) materially fails to prosecute the Work in a
safe manner (i.e., in accordance with Applicable Law and the material provisions
of the safety program developed by Contractor and approved by Owner under this
Agreement); (ii) fail to

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commence the Work in accordance with the provisions of this Agreement; (iii)
Abandon the Project; (iv) fail to maintain insurance required under this
Agreement; (v) fail to provide or maintain the Parent Guarantee in accordance
with Section 21.17; (vi) fail to discharge liens filed by any Subcontractor or
Sub-subcontractor as required under this Agreement; (vii) cause, by any action
or omission, any material interference with operation of the Facility or its
pipeline contractors or subcontractors, unless Contractor is entitled to stop,
suspend, terminate or refuse to perform Work under this Agreement; (viii) fail
to make payment to Subcontractors for labor or materials owed in accordance with
the respective Subcontracts (provided that Owner has made payment to Contractor
of all undisputed amounts owed to Contractor in accordance with the terms of
this Agreement); (ix) disregard Applicable Law or Applicable Codes and
Standards; (x) fail to comply with any material provision of this Agreement;
(xi) fail to commence performance of changed Work under a Change Directive
issued by Owner under this  Agreement in accordance with Section 6.1E; (xii) be
in Default pursuant to Section 5.5H or Section 11.5B; (xiii) violate the
provisions of Section 21.10;  or (xiv) become, or if the Guarantor becomes,
insolvent, has a receiver appointed, makes a general assignment or filing for
the benefit of its creditors or files for bankruptcy protection.    In addition,
a default under the Train 3 EPC Agreement by Contractor shall, if elected by
Owner in its sole discretion, constitute a Default by Contractor under this
Agreement, and in that case the liability for a default under the Train 3 EPC
Agreement is handled under article 16 of the Train 3 EPC Agreement and the
liability for a Default under this Agreement is handled in this Article 16.

B.      Following Owner’s notice to Contractor specifying the general nature of
the Default, unless Contractor cures such condition within the applicable Cure
Period in Section 16.1C, Owner, at its sole option and without prejudice to any
other rights that it has under this Agreement and without further notice to
Contractor, may (1) take such steps as are necessary to overcome the Default
condition, in which case Contractor shall be liable to Owner for any and all
reasonable, additional costs, and expenses incurred by Owner in connection
therewith, or (2) terminate for Default Contractor’s performance of all or any
part of the Work.

C.      The applicable “Cure Period” with respect to the Defaults referenced in
Section 16.1A for items (i) through (x), the Cure Period shall be [***]  ([***])
Days after Owner’s notice of Default to Contractor, unless such Default cannot
be cured within such [***]  ([***]) Day period, in which case the Cure Period
shall be a total of [***]  ([***]) Days after Owner’s notice (or as may be
extended if agreed in writing by Owner and Contractor).  There is no cure period
for any other Default except as expressly stated in this Section 16.1C.

D.       Additional Rights of Owner Upon Termination.  In the event that Owner
terminates this Agreement for Default in accordance with Section 16.1A, then
Owner may, at its sole option, (i) enter onto the Site and any other locations
where Contractor is performing the Work, for the purpose of completing the Work,
(ii) take possession of all Equipment and spare parts wherever located, and all
Construction Equipment on the Site that is not owned by Contractor, in any case
which required to complete the Work (subject to the terms of any lease
agreements for Construction Equipment with non-Affiliated third parties), Work
Product (subject to the use restrictions in the licenses described in Section

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10.7A-C), including Drawings and Specifications, Permits, and licenses, (iii)
take assignment of any or all of the Subcontracts, and/or (iv) complete the Work
either itself or through others.  If the unpaid balance of the Contract Price
shall exceed all damages, costs, losses and expenses incurred by Owner
(including the cost to complete the Facility, all attorneys’ fees, consultant
fees and litigation or arbitration expenses, costs to complete the Work,
Liquidated Damages described in this Section 16.1D below and any and all damages
for failure of performance and interest on such expense from the date such
expense was incurred by Owner at the rate specified in Section 7.7), then such
excess shall be paid by Owner to Contractor, but such amount shall not be paid
until after Final Completion has been achieved.  If such amount incurred by
Owner shall exceed the unpaid balance of the Contract Price, then, at Owner’s
sole option and subject to the limitation of liability set forth in Section
20.1, (a) Contractor shall pay Owner the difference within [***]  ([***]) Days
after Owner submits to Contractor written notice of the difference, (b) Owner
shall have the right and authority to offset or collect on the Letter of Credit
in the amount of such difference in accordance with Section 9.2A, or (c) Owner
may elect to pursue both options (a) and (b).  Subject to Section 20.1,
Contractor’s liability under this Section 16.1D is in addition to any other
liability provided for under this Agreement and Owner shall have the right and
authority to set off against and deduct from any such excess due Contractor by
Owner any other liability of Contractor to Owner under this Agreement.  Owner
agrees to act reasonably to mitigate any costs it might incur in connection with
any termination for Default.  In the event of a termination for Default, subject
to Section 20.1, the Parties agree that Owner shall be entitled to “damages for
delay” under this Section 16.1D which, for purposes of this Section 16.1D only,
means (i) Delay Liquidated Damages owed by Contractor to Owner under this
Agreement up to the date of the termination (provided that such termination date
was after the applicable Guaranteed Substantial Completion Date), and (ii)
during the period upon the date of termination and ending on the date
Substantial Completion is achieved by a substitute contractor, the costs
incurred during such period by such substitute contractor to accelerate such
substitute contractor’s work in order to achieve the applicable Guaranteed
Substantial Completion Date (as may have been adjusted by Change Order)
contemplated under this Agreement. Notwithstanding anything to the contrary, in
no event shall Owner be entitled under this Section 16.1D to recover
restitutionary damages.  Any damages recoverable by Owner under this Section
16.1D shall be subject to the limitation of liability in Section 20.1, and the
waiver and release in Section 20.4.

E.       Obligations Upon Termination.  Upon termination for Default, Contractor
shall (i) immediately discontinue Work on the date and to the extent specified
in the notice, (ii) place no further orders for Subcontracts, Equipment, or any
other items or services except as may be necessary for completion of such
portion of the Work as is not discontinued, (iii) inventory, maintain and turn
over to Owner all Construction Equipment that is not owned by Contractor
(subject to the terms of any lease agreements with non-Affiliated third parties)
or any other equipment or other items provided by Owner for performance of the
terminated Work, (iv) promptly make every reasonable effort to procure
assignment or cancellation upon terms satisfactory to Owner of all Subcontracts
and rental agreements to the extent they relate to the performance of the Work
that is discontinued; (v) cooperate with Owner in the transfer of Work Product,
including Drawings and Specifications, Permits, licenses and any other items or
information and disposition of

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Work in progress so as to mitigate damages; (vi) comply with other reasonable
requests from Owner regarding the terminated Work; (vii) thereafter execute that
portion of the Work as may be necessary to preserve and protect Work already in
progress and to protect Equipment at the Site or in transit thereto, and to
comply with any Applicable Law and any Applicable Codes and Standards; and
(viii) perform all other obligations under Section 16.1D.

16.2      Termination for Convenience by Owner.  Owner shall have the right to
terminate for convenience Contractor’s performance of all of the Work by
providing Contractor with [***]  ([***]) Days’ written notice of
termination.  Upon termination for convenience, Contractor shall (i) immediately
discontinue the Work on the date and to the extent specified in such notice,
(ii) place no further orders for Subcontracts, Equipment, or any other items or
services except as may be necessary for completion of such portion of the Work
as is not discontinued, (iii) promptly make every reasonable effort to procure
cancellation upon terms satisfactory to Owner of all Subcontracts and rental
agreements to the extent they relate to the performance of the Work that is
discontinued unless Owner elects to take assignment of any such Subcontracts,
(iv) assist Owner in the maintenance, protection, and disposition of Work in
progress, (v) cooperate with Owner for the efficient transition of the Work,
(vi) cooperate with Owner in the transfer of Work Product (and to the use
restrictions in the licenses described in Section 10.7A-C), including Drawings
and Specifications, Permits, licenses and any other items or information and
disposition of Work in progress; and (vii) thereafter execute only that portion
of the Work as may be necessary to preserve and protect Work already in progress
and to protect Equipment at the Site or at any other location or in transit
thereto, and to comply with any Applicable Law and Applicable Codes and
Standards and Owner may, at its sole option, take assignment of any or all of
the Subcontracts.  Upon termination for convenience, Contractor shall be paid
(a) the reasonable value of the Work performed (the basis of payment being based
on the terms of this Agreement) prior to termination, less that portion of the
Contract Price previously paid to Contractor (including down payments, if any,
made under this Agreement), plus (b) actual costs that are reasonably incurred
and properly demonstrated by Contractor to have been sustained in the
performance of the Work up to the date of termination or as a result of
termination, plus associated profit margin of five percent (5%) on such costs,
submitted in accordance with this Section 16.1E, but in no event shall
Contractor be entitled to receive any amount for unabsorbed overhead,
contingency, risk, or anticipatory profit.  Contractor shall submit all
reasonable direct close-out costs to Owner for verification and audit
within [***]  ([***]) Days following the effective date of termination (or as
may be extended if agreed in writing by the Parties).  If no Work (including
Work under an LNTP) has been performed by Contractor at the time of termination,
Contractor shall be paid the sum of one hundred U.S. Dollars (U.S. $100) for its
undertaking to perform.

16.3     Suspension of Work.  Owner may, for any reason, upon written notice to
Contractor at any time and from time to time, suspend carrying out the Work or
any part thereof, whereupon Contractor shall suspend the carrying out of such
suspended Work for such time or times as Owner may require and shall take
reasonable steps to minimize any costs associated with such suspension.  During
any such suspension, Contractor shall properly protect and secure such suspended
Work in such manner as Owner may reasonably require.  Unless otherwise
instructed by Owner, Contractor shall during any such suspension maintain its
staff and labor on or near the Site and otherwise be ready to proceed
expeditiously with the Work upon receipt of Owner’s further
instructions.  Except where such suspension ordered by Owner is the result of or
due to the

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fault or negligence of Contractor or any Subcontractor or Sub-subcontractor,
Contractor shall be entitled to the reasonable costs (including actual, but not
unabsorbed, overhead, contingency, risk and reasonable profit) of such
suspension under a Change Order, including demobilization and remobilization
costs, if necessary, along with appropriate supporting documentation to evidence
such costs, and a time extension to the Key Dates if and to the extent permitted
under Section 6.8.  Upon receipt of notice to resume suspended Work, Contractor
shall promptly resume performance of the Work to the extent required in the
notice.  In no event shall Contractor be entitled to any additional profits or
damages due to such suspension beyond the costs for the suspension as defined
above.

16.4      Suspension by Contractor.  Notwithstanding anything to the contrary in
this Agreement, Contractor shall have the responsibility at all times to
prosecute the Work diligently and shall not suspend, stop or cease performance
hereunder or permit the prosecution of the Work to be delayed; provided,
 however, subject to Owner’s right to withhold or offset payment to Contractor
as specified in this Agreement, if Owner fails to pay undisputed amounts due and
owing to Contractor and Owner has failed to cure such failure within [***]
 ([***]) Days beyond the date such amounts became due, then, following
Contractor’s [***]  ([***]) Day notice to Owner to cure such failure (which
[***]  ([***]) Days’ notice may be given during the [***]  ([***]) Day window
for  non-payment), Contractor may suspend performance of the Work until
Contractor receives such undisputed amounts.  Contractor shall be entitled to a
Change Order for any costs incurred by Contractor resulting from such suspension
and shall be entitled to an extension in the applicable Key Dates to the extent
permitted under Section 6.8.

16.5      Termination by Contractor.

A.       Non-Payment.  Contractor may terminate this Agreement if, continuing at
the time of such termination, Contractor has stopped the performance of all Work
under this Agreement pursuant to Section 16.4 for [***]  ([***]) Days, and after
the expiration of such [***]  ([***]) Day period, Contractor gives Owner notice
specifying the nature of the default and its intent to terminate this Agreement,
and Owner fails to cure such default within [***]  ([***]) Days after receipt of
Contractor’s notice.  Contractor shall be entitled to interest on all late
payments in accordance with Section 7.7.

B.      Extended Owner’s Suspension.  After issuance of NTP and subject to
Section 16.5A, if Owner suspends substantially all of the Work for an aggregate
period exceeding three hundred sixty five (365) consecutive Days and such
suspension is not due to the fault or negligence of Contractor, Subcontractor or
Sub-subcontractor, or an event of Force Majeure, then Contractor shall have the
right to terminate this Agreement by providing fourteen (14) Days written notice
to Owner.

C.      Termination in the Event of Delayed Notice to Proceed.  Contractor may
terminate this Agreement pursuant to Section 5.2E.3.

D.      Termination for an Extended Force Majeure Event.  After Owner’s issuance
of NTP, if any single Force Majeure event causes suspension of substantially all
of the Work for a period exceeding three hundred sixty-five (365) Days, then
Contractor

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shall have the right to terminate this Agreement by providing [***]  ([***])
Days written notice of termination to Owner.

E.      Contractor’s Right to Terminate.  This Section 16.5 set forth
Contractor’s only rights to terminate this Agreement.  In the event of any such
termination under this Section 16.5, Contractor and Owner shall have the rights
and obligations set forth in Section 16.1E.  Contractor’s sole right to
terminate this Agreement is set forth in this Section 16.5.

 

ARTICLE 17

INDEMNITIES

17.1      Contractor’s General Indemnification.  In addition to its
indemnification, defense and hold harmless obligations contained elsewhere in
this Agreement, Contractor shall release, and as a separate obligation,
indemnify, hold harmless and defend Owner Indemnified Parties from and against
any and all damages, costs, losses and expenses (including reasonable attorneys’
fees, and litigation or arbitration expenses) arising out of any of the
following:

A.      ACTUAL OR ALLEGED FAILURE OF CONTRACTOR OR ANY OF ITS SUBCONTRACTORS OR
SUB-SUBCONTRACTORS TO COMPLY WITH APPLICABLE LAW APPLICABLE CODES AND STANDARDS
OR SAFETY REQUIREMENTS UNDER THIS AGREEMENT, PROVIDED THAT CONTRACTOR’S
INDEMNITY OBLIGATIONS UNDER THIS SECTION 17.1A SHALL BE LIMITED TO THE
REASONABLE SETTLEMENT PAYMENTS RELATED TO SUCH FAILURE AND ANY FINES,  PENALTIES
OR OTHER SANCTIONS IMPOSED BY ANY GOVERNMENTAL INSTRUMENTALITY (INCLUDING THE
COST OF REQUIRED REMEDIAL MEASURES)  ON OWNER INDEMNIFIED PARTIES OR ON THE WORK
RESULTING FROM THE FAILURE OF CONTRACTOR OR ANY OF ITS SUBCONTRACTORS OR
SUB-SUBCONTRACTORS TO COMPLY WITH APPLICABLE LAW, APPLICABLE CODES AND STANDARDS
OR SAFETY REQUIREMENTS UNDER THIS AGREEMENT, EXCLUDING ANY PORTION OF THE AMOUNT
OF SUCH FINES, PENALTIES OR OTHER SANCTIONS ATTRIBUTABLE TO VIOLATIONS BY OWNER
OF APPLICABLE LAW, INCLUDING PRIOR VIOLATIONS BY OWNER OF APPLICABLE LAWS
RELATING TO HAZARDOUS MATERIALS FOR WHICH OWNER IS RESPONSIBLE UNDER SECTION
17.4;

B.      ACTUAL OR ALLEGED CONTAMINATION, SPILL, RELEASE, DISCHARGE OR POLLUTION
ARISING OUT OF ACTS OR OMISSIONS OF CONTRACTOR’S OR ANY SUBCONTRACTOR’S OR
SUB-SUBCONTRACTOR’S USE, HANDLING OR DISPOSAL OF HAZARDOUS MATERIALS GENERATED
OR BROUGHT ON THE SITE OR ANY OTHER PROPERTY WHERE WORK IS PERFORMED DURING THE
PERFORMANCE OF THE WORK AND CONTRACTOR’S FAILURE TO STOP WORK AND NOTIFY OWNER
OF PRE-EXISTING HAZARDOUS MATERIALS AS REQUIRED BY SECTION 3.17, SUBJECT TO THE
CAP SET FORTH THEREIN ;

C.      A FAILURE BY CONTRACTOR OR ANY SUBCONTRACTOR OR SUB-SUBCONTRACTOR TO PAY
TAXES FOR WHICH SUCH PERSON IS LIABLE;

D.       FAILURE OF CONTRACTOR TO MAKE PAYMENTS TO ANY SUBCONTRACTOR IN
ACCORDANCE WITH THE RESPECTIVE SUBCONTRACT, PROVIDED THAT, OWNER HAS MADE

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PAYMENT TO CONTRACTOR OF ALL UNDISPUTED AMOUNTS OWED TO CONTRACTOR IN ACCORDANCE
WITH THE TERMS OF THIS AGREEMENT;

E.       DAMAGE TO OR DESTRUCTION OF PROPERTY OF CONTRACTOR INDEMNIFIED PARTIES
OR ANY OF ITS SUBCONTRACTORS, SUB-SUBCONTRACTORS OR ANY EMPLOYEE, OFFICER OR
DIRECTOR OF ANY OF THEM (EXCLUDING THE WORK, THE FACILITY AND THE TRAIN 3
LIQUEFACTION FACILITY), TO THE EXTENT THAT SUCH PROPERTY DAMAGE OR DESTRUCTION
IS CAUSED BY THE NEGLIGENCE OF ANY CONTRACTOR INDEMNIFIED PARTY OR ANY
SUBCONTRACTOR OR SUB-SUBCONTRACTOR;

F.      DAMAGE TO OR DESTRUCTION OF TRAIN 1 OR TRAIN 2 (OR THE COMMON FACILITIES
INCORPORATED THEREIN) AFTER THE EARLIER OF SUBSTANTIAL COMPLETION OF EACH SUCH
TRAIN OR TERMINATION OF THIS AGREEMENT OR TRAIN 3 AFTER THE EARLIER OF
SUBSTANTIAL COMPLETION OR TERMINATION OF THE TRAIN 3 EPC AGREEMENT, TO THE
EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, IN CONNECTION WITH THE
WORK, OF ANY MEMBER OF THE CONTRACTOR INDEMNIFIED PARTIES OR ANY SUBCONTRACTOR
OR SUB-SUBCONTRACTOR OR ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY THEM, PROVIDED
THAT CONTRACTOR’S LIABILITY HEREUNDER FOR DAMAGE TO OR DESTRUCTION OF (I) TRAIN
1 OR TRAIN 2 (OR THE COMMON FACILITIES INCORPORATED THEREIN) AFTER THE EARLIER
OF SUBSTANTIAL COMPLETION OF EACH SUCH TRAIN OR TERMINATION OF THE AGREEMENT
SHALL NOT EXCEED [***] U.S. DOLLARS (U.S.$ [***]) PER OCCURRENCE OR (II) TRAIN 3
AFTER THE EARLIER OF SUBSTANTIAL COMPLETION OR TERMINATION OF THE TRAIN 3 EPC
AGREEMENT SHALL NOT EXCEED [***] U.S. DOLLARS (U.S.$ [***]) PER OCCURRENCE, AND
OWNER HEREBY RELEASES CONTRACTOR FROM ANY SUCH LIABILITY IN EXCESS THEREOF.  FOR
THE AVOIDANCE OF DOUBT, ANY SUCH LIABILITY OF CONTRACTOR SHALL NOT EXCEED [***]
U.S. DOLLARS (U.S.$ [***]) PER OCCURRENCE, WITH A CUMULATIVE PER OCCURRENCE OF
[***] U.S. DOLLARS (U.S. $[***]) UNDER THE TRAIN 3 EPC AGREEMENT AND THIS
AGREEMENT;

G.      DAMAGE TO OR DESTRUCTION OF PROPERTY OF OWNER INDEMNIFIED PARTIES
(EXCLUDING THE WORK, THE FACILITY, AND THE TRAIN 3 LIQUEFACTION FACILITY) TO THE
EXTENT ARISING OUT OF OR RESULTING FROM THE NEGLIGENCE, IN CONNECTION WITH THE
WORK, OF ANY MEMBER OF THE CONTRACTOR INDEMNIFIED PARTIES OR ANY SUBCONTRACTOR
OR SUB-SUBCONTRACTOR OR ANYONE DIRECTLY OR INDIRECTLY EMPLOYED BY THEM, PROVIDED
THAT CONTRACTOR’S LIABILITY HEREUNDER FOR DAMAGE TO OR DESTRUCTION OF SUCH
PROPERTY OF OWNER INDEMNIFIED PARTIES (EXCLUDING THE WORK, FACILITY, THE TRAIN 3
LIQUEFACTION FACILITY AND THE PROJECT) SHALL NOT EXCEED [***] U.S. DOLLARS
(U.S.$ [***]) PER OCCURRENCE, WITH A CUMULATIVE PER OCCURRENCE OF [***] U.S.
DOLLARS (U.S. $[***]) UNDER THE TRAIN 3 EPC AGREEMENT AND THIS AGREEMENT, AND
OWNER HEREBY RELEASES CONTRACTOR FROM ANY SUCH LIABILITY IN EXCESS THEREOF;

H.      PERSONAL OR BODILY INJURY TO, ILLNESS, OR DEATH OF ANY EMPLOYEE, OFFICER
OR DIRECTOR OF ANY CONTRACTOR INDEMNIFIED PARTY, ANY SUBCONTRACTOR OR
SUB-SUBCONTRACTOR OR ANY EMPLOYEE, OFFICER OR DIRECTOR OF ANY OF THEM,

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REGARDLESS OF THE CAUSE SUCH DAMAGES, COSTS, LOSSES AND EXPENSES, INCLUDING THE
SOLE OR JOINT NEGLIGENCE OF ANY OWNER INDEMNIFIED PARTIES;

I.      DAMAGE TO OR DESTRUCTION OF PROPERTY OF ANY PERSON (OTHER THAN THE
PROPERTY COVERED IN SECTION 17.1E, 17.1F, 17.1G AND 17.2A) TO THE EXTENT THAT
SUCH INJURY IS CAUSED BY THE NEGLIGENCE OF ANY CONTRACTOR INDEMNIFIED PARTY OR
ANY SUBCONTRACTOR OR SUB-SUBCONTRACTOR; OR

J.      PERSONAL OR BODILY INJURY TO, ILLNESS, OR DEATH OF ANY PERSON (OTHER
THAN THOSE PERSONS COVERED IN SECTION 17.1H AND SECTION 17.2B) TO THE EXTENT
THAT SUCH INJURY IS CAUSED BY THE NEGLIGENCE OF ANY CONTRACTOR INDEMNIFIED PARTY
OR ANY SUBCONTRACTOR OR SUB-SUBCONTRACTOR.

17.2      Owner’s Indemnity for Personal Injury and Property Damage.  OWNER
SHALL RELEASE, AND AS A SEPARATE OBLIGATION INDEMNIFY, HOLD HARMLESS AND DEFEND
CONTRACTOR INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL DAMAGES, COSTS,
LOSSES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES, AND LITIGATION OR
ARBITRATION EXPENSES) DIRECTLY OR INDIRECTLY ARISING OUT OF ANY OF THE
FOLLOWING:

A.      DAMAGE TO OR DESTRUCTION OF PROPERTY OF THE OWNER INDEMNIFIED PARTIES
(OTHER THAN THE WORK, CONSTRUCTION EQUIPMENT, THE FACILITY, OR THE TRAIN 3
LIQUEFACTION FACILITY), TO THE EXTENT THAT SUCH DAMAGE OR DESTRUCTION IS CAUSED
BY THE NEGLIGENCE OF ANY OWNER INDEMNIFIED PARTY.

B.       PERSONAL OR BODILY INJURY TO, ILLNESS, OR DEATH OF ANY EMPLOYEE,
OFFICER OR DIRECTOR OF ANY OWNER INDEMNIFIED PARTY, REGARDLESS OF THE CAUSE SUCH
DAMAGES, COSTS, LOSSES AND EXPENSES, INCLUDING THE SOLE OR JOINT NEGLIGENCE OF
ANY CONTRACTOR INDEMNIFIED PARTIES.

17.3      Indemnification of Port Indemnified Parties.  To the fullest extent
permitted by Applicable Law, Contractor shall indemnify, hold harmless and
defend Port Indemnified Parties from any and all damages, claims, losses, costs
and expenses  arising out of or resulting from the acts or omissions of any
member of the Contractor Indemnified Parties or any Subcontractor or
Sub-subcontractor on account of (1) personal or bodily injury, illness or death
any person, (2) damage or destruction to property of any Person or (3) fines and
penalties attributable to any violation of any Applicable Law.  Contractor’s
defense and indemnity obligations in this Section 17.3 extend to and include
liabilities caused or alleged to be caused by strict liability, fault,
concurrent, or contributory partial negligence or fault of any of the Port
Indemnified Parties, provided, however, that in no event shall Contractor’s
indemnification obligations hereunder include claims arising out of the willful
misconduct, sole or gross negligence or fraud of any Port Indemnified Parties.

17.4      Pre-Existing Hazardous Material.  SUBJECT TO SECTION 17.1B, OWNER
SHALL BE RESPONSIBLE FOR AND SHALL SAVE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE
CONTRACTOR INDEMNIFIED PARTIES FROM THE ABATEMENT, REMEDIATION, TRANSPORT, AND
DISPOSAL OF ANY PRE-EXISTING HAZARDOUS MATERIAL AT THE SITE, AND EXCLUDING ANY
DAMAGES, COSTS, EXPENSES OR LOSSES TO THE EXTENT RELATED TO CONTRACTOR’S OR ANY
OF ITS

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SUBCONTRACTOR’S OR SUB-SUBCONTRACTOR’S FAILURE TO STOP WORK AND NOTIFY OWNER
UPON ENCOUNTERING PRE-EXISTING HAZARDOUS MATERIAL AT THE SITE AS REQUIRED BY
SECTION 3.17 (AND SUBJECT TO THE CAP SET FORTH IN SUCH SECTION) .

17.5      Patent and Copyright Indemnification.

A.      IN ADDITION TO ITS INDEMNIFICATION, DEFENSE AND HOLD HARMLESS
OBLIGATIONS CONTAINED ELSEWHERE IN THIS AGREEMENT AND SUBJECT TO OWNER’S
COMPLIANCE WITH THE USE RESTRICTIONS IN THE LICENSES DESCRIBED IN SECTION 10.7
WITH RESPECT TO THE CONFIDENTIAL INFORMATION OR OTHER PROPRIETARY RIGHTS THAT
ARE THE SUBJECT MATTER OF THE VIOLATION, INFRINGEMENT, MISAPPROPRIATION OR
IMPROPER USE, CONTRACTOR SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND OWNER
INDEMNIFIED PARTIES FROM ANY AND ALL THIRD PARTY CLAIMS FOR DAMAGES, COSTS,
LOSSES AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES AND LITIGATION OR
ARBITRATION EXPENSES) ARISING OUT OF ANY ACTUAL OR ASSERTED VIOLATION OR
INFRINGEMENT OF ANY DOMESTIC OR FOREIGN PATENTS, COPYRIGHTS OR TRADEMARKS OR
OTHER INTELLECTUAL PROPERTY, OR ANY MISAPPROPRIATION OR IMPROPER USE OF
CONFIDENTIAL INFORMATION OR OTHER PROPRIETARY RIGHTS, IN EACH CASE ATTRIBUTABLE
TO CONTRACTOR OR ANY SUBCONTRACTOR OR SUB-SUBCONTRACTOR IN CONNECTION WITH THE
WORK.

B.      IN THE EVENT THAT ANY VIOLATION OR INFRINGEMENT FOR WHICH CONTRACTOR IS
RESPONSIBLE TO INDEMNIFY THE OWNER INDEMNIFIED PARTIES AS SET FORTH IN SECTION
17.5A RESULTS IN ANY SUIT, CLAIM, TEMPORARY RESTRAINING ORDER OR PRELIMINARY
INJUNCTION IS GRANTED IN CONNECTION WITH SECTION 17.5A, CONTRACTOR SHALL, IN
ADDITION TO ITS OBLIGATION UNDER SECTION 17.5A, MAKE EVERY REASONABLE EFFORT, BY
GIVING A SATISFACTORY BOND OR OTHERWISE, TO SECURE THE SUSPENSION OF THE
INJUNCTION OR RESTRAINING ORDER.  IF, IN ANY SUCH SUIT OR CLAIM, THE WORK, THE
FACILITY, OR ANY PART, COMBINATION OR PROCESS THEREOF, IS HELD TO CONSTITUTE AN
INFRINGEMENT AND ITS USE IS PRELIMINARILY OR PERMANENTLY ENJOINED, CONTRACTOR
SHALL PROMPTLY MAKE EVERY REASONABLE EFFORT TO SECURE FOR OWNER A LICENSE, AT NO
COST TO OWNER, AUTHORIZING CONTINUED USE OF THE INFRINGING WORK.  IF CONTRACTOR
IS UNABLE TO SECURE SUCH A LICENSE WITHIN A REASONABLE TIME, CONTRACTOR SHALL,
AT ITS OWN EXPENSE AND WITHOUT IMPAIRING PERFORMANCE REQUIREMENTS, EITHER
REPLACE THE AFFECTED WORK, IN WHOLE OR PART, WITH NON-INFRINGING COMPONENTS OR
PARTS OR MODIFY THE SAME SO THAT THEY BECOME NON-INFRINGING.  FOLLOWING
SUBSTANTIAL COMPLETION OF THE APPLICABLE TRAIN, OWNER SHALL RENDER SUCH
ASSISTANCE AS CONTRACTOR MAY REASONABLY REQUIRE IN THE DEFENSE OF ANY CLAIM OF
INFRINGEMENT PURSUANT TO SECTION 17.5A.

17.6      Lien Indemnification.  Should any Subcontractor or Sub-subcontractor
or any other Person acting through or under Contractor or any Subcontractor or
Sub-subcontractor file a lien or other encumbrance against all or any portion of
the Work, the Site, the Facility or the Train 3 Liquefaction Facility,
Contractor shall, at its sole cost and expense, remove or discharge, by payment,
bond or otherwise, such lien or encumbrance within [***]  ([***]) Days after
Contractor’s receipt of written notice from Owner notifying Contractor; provided
that, Owner has made payment to Contractor of all undisputed amounts owed to
Contractor in accordance with the terms

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of this Agreement.  If Contractor fails to remove and discharge any such lien or
encumbrance within such [***]  ([***]) Day period, then Owner may, in its sole
discretion and in addition to any other rights that it has under this Agreement,
at law or equity, take any one or more of the following actions:

A.      REMOVE AND DISCHARGE SUCH LIEN AND ENCUMBRANCE USING WHATEVER MEANS THAT
OWNER, IN ITS SOLE DISCRETION, DEEMS APPROPRIATE, INCLUDING THE PAYMENT OF
SETTLEMENT AMOUNTS THAT IT DETERMINES IN ITS SOLE DISCRETION AS BEING NECESSARY
TO DISCHARGE SUCH LIEN OR ENCUMBRANCE.  IN SUCH CIRCUMSTANCE, CONTRACTOR SHALL
BE LIABLE TO OWNER FOR ALL DAMAGES, COSTS, LOSSES AND EXPENSES (INCLUDING ALL
ATTORNEYS’ FEES AND LITIGATION OR ARBITRATION EXPENSES, AND SETTLEMENT PAYMENTS)
INCURRED BY OWNER ARISING OUT OF OR RELATING TO SUCH REMOVAL AND DISCHARGE.  ALL
SUCH DAMAGES, COSTS, LOSSES AND EXPENSES SHALL BE PAID BY CONTRACTOR NO LATER
THAN [***]  ([***]) DAYS AFTER RECEIPT OF EACH INVOICE FROM OWNER;

B.      SEEK AND OBTAIN AN ORDER GRANTING SPECIFIC PERFORMANCE FROM A COURT OF
COMPETENT JURISDICTION, REQUIRING THAT CONTRACTOR IMMEDIATELY DISCHARGE AND
REMOVE, BY BOND, PAYMENT OR OTHERWISE, SUCH LIEN OR ENCUMBRANCE.  THE PARTIES
EXPRESSLY AGREE THAT OWNER SHALL BE ENTITLED TO SUCH SPECIFIC PERFORMANCE AND
THAT CONTRACTOR SHALL BE LIABLE TO OWNER FOR ALL DAMAGES, COSTS, LOSSES AND
EXPENSES (INCLUDING ALL ATTORNEYS’ FEES, CONSULTANT FEES AND LITIGATION OR
ARBITRATION EXPENSES) INCURRED BY OWNER ARISING OUT OF OR RELATING TO SUCH
SPECIFIC PERFORMANCE ACTION.  CONTRACTOR AGREES THAT THE FAILURE TO DISCHARGE
AND REMOVE ANY SUCH LIEN OR ENCUMBRANCE WILL GIVE RISE TO IRREPARABLE INJURY TO
OWNER AND OWNER’S AFFILIATES, AND FURTHER, THAT OWNER AND SUCH OWNER AFFILIATES
WILL NOT BE ADEQUATELY COMPENSATED BY DAMAGES; OR

C.       CONDUCT THE DEFENSE OF ANY ACTION IN RESPECT OF (AND ANY COUNTERCLAIMS
RELATED TO) SUCH LIENS OR ENCUMBRANCES AS SET FORTH IN SECTION 17.7 BELOW,
WITHOUT REGARD TO CONTRACTOR’S RIGHTS UNDER SUCH SECTION.

17.7      Legal Defense.  Not later than [***]  ([***]) Days after receipt of
written notice from the Indemnified Party to the Indemnifying Party of any
claims, demands, actions or causes of action asserted against such Indemnified
Party for which the Indemnifying Party has indemnification, defense and hold
harmless obligations under this Agreement, whether such claim, demand, action or
cause of action is asserted in a legal, judicial, arbitral or administrative
proceeding or action or by notice without institution of such legal, judicial,
arbitral or administrative proceeding or action, the Indemnifying Party shall
affirm in writing by notice to such Indemnified Party that the Indemnifying
Party will indemnify, defend and hold harmless such Indemnified Party and shall,
at the Indemnifying Party’s own cost and expense, assume on behalf of the
Indemnified Party and conduct with due diligence and in good faith the defense
thereof with counsel selected by the Indemnifying Party and reasonably
satisfactory to such Indemnified Party; provided, however, that such Indemnified
Party shall have the right to be represented therein by advisory counsel of its
own selection, and at its own expense; and provided further that if the
defendants in any such action or proceeding include the Indemnifying Party and
an Indemnified Party and the Indemnified Party shall have reasonably concluded
that there may be legal defenses

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available to it which are different from or additional to, or inconsistent with,
those available to the Indemnifying Party, such Indemnified Party shall have the
right to select up to one (1) separate counsel to participate in the defense of
such action or proceeding on its own behalf at the expense of the Indemnifying
Party.  In the event of the failure of the Indemnifying Party to perform fully
in accordance with the defense obligations under this Section 17.7, such
Indemnified Party may, at its option, and without relieving the Indemnifying
Party of its obligations hereunder, so perform, but all damages, costs, losses
and expenses (including all attorneys’ fees, consultant fees and litigation or
arbitration expenses, settlement payments and judgments) so incurred by such
Indemnified Party in that event shall be reimbursed by the Indemnifying Party to
such Indemnified Party, together with interest on same from the date any such
cost and expense was paid by such Indemnified Party until reimbursed by the
Indemnifying Party at the interest rate set forth in this Agreement.

17.8      Enforceability.

A.      EXCEPT AS OTHERWISE SET FORTH ABOVE, THE INDEMNITY, DEFENSE AND HOLD
HARMLESS OBLIGATIONS FOR PERSONAL INJURY, ILLNESS OR DEATH OR PROPERTY DAMAGE
UNDER THIS AGREEMENT SHALL APPLY REGARDLESS OF WHETHER THE INDEMNIFIED PARTY WAS
CONCURRENTLY NEGLIGENT (WHETHER ACTIVELY OR PASSIVELY), IT BEING AGREED BY THE
PARTIES THAT IN THIS EVENT, THE PARTIES’ RESPECTIVE LIABILITY OR RESPONSIBILITY
FOR SUCH DAMAGES, COSTS, LOSSES AND EXPENSES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH THE PRINCIPLES OF COMPARATIVE NEGLIGENCE.

B.      IN THE EVENT THAT ANY INDEMNITY PROVISIONS IN THIS AGREEMENT ARE
CONTRARY TO THE LAW GOVERNING THIS AGREEMENT, THEN THE INDEMNITY OBLIGATIONS
APPLICABLE HEREUNDER SHALL BE APPLIED TO THE MAXIMUM EXTENT ALLOWED BY
APPLICABLE LAW.

C.      THE WAIVERS AND DISCLAIMERS OF LIABILITY, RELEASES FROM LIABILITY,
EXCLUSIONS, LIMITATIONS AND APPORTIONMENTS OF LIABILITY AND INDEMNITIES
EXPRESSED IN THIS AGREEMENT SHALL EXTEND TO EACH PARTY’S DIRECTORS, OFFICERS AND
EMPLOYEES.

ARTICLE 18

DISPUTE RESOLUTION

18.1      Negotiation.  In the event that any claim, dispute, controversy,
difference, disagreement, or grievance (of any and every kind or type, whether
based on contract, tort, statute, regulation or otherwise) arising out of,
connected with or relating in any way to this Agreement (including the
construction, validity, interpretation, termination, enforceability or breach of
this Agreement) (“Dispute”) cannot be resolved informally within [***]  ([***])
Days after the Dispute arises (or such longer period of time if agreed to in
writing by the Parties), either Party may give written notice of the Dispute
(“Dispute Notice”) to the other Party requesting that a representative of
Owner’s senior management and Contractor’s senior management meet in an attempt
to resolve the Dispute.  Each such senior executive shall have full authority to
resolve the Dispute and shall promptly begin discussions in an effort to agree
on a resolution of the Dispute within [***]  ([***])

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Days after receipt by the non-notifying Party of such Dispute Notice, with such
negotiations being held in Harris County, Texas or at another location if agreed
upon by the Parties in writing.  In no event shall this Section 18.1 be
construed to limit either Party’s right to take any action under this Agreement,
including Owner’s rights under Section 16.1, provided that such rights are not
the subject of the Dispute.

18.2      Arbitration.  If the Dispute is not resolved by negotiation within
[***]  ([***]) Days after the date of a Party’s written notice requesting that
representatives of each Party’s senior management meet (or such other time as
may be agreed in writing by the Parties), then the Parties agree that the
Dispute shall be decided by final and binding arbitration. Such arbitration
shall be held in Harris County, Texas, unless otherwise agreed by the Parties,
shall be administered by the AAA’s office in Harris County, Texas, shall be
conducted by three (3) arbitrators (or for Claims involving less than [***] U.S.
Dollars (U.S.$ [***]), one (1) arbitrator) chosen in accordance with Section
18.2A, and shall, except as otherwise agreed by the Parties, be governed by the
AAA’s Construction Industry Arbitration Rules and Mediation Procedures then in
effect (“AAA Rules”).  For the purposes of determining the number of
arbitrators, the total value of the Claims and counterclaims reasonably asserted
by all the Parties shall be used to determine whether the [***] U.S. Dollars
(U.S.$ [***]) threshold has been met.  The arbitration tribunal shall determine
the rights and obligations of the Parties according to the laws of Texas,
excluding its conflict of law principles; provided, however, the law applicable
to the validity of the arbitration clause, the enforcement of any award and any
other question of arbitration law or procedure shall be the Federal Arbitration
Act, 9 U.S.C.A. § 2.  Issues concerning the arbitrability of a matter in dispute
shall be decided by a court with proper jurisdiction.  The arbitration shall be
conducted in the English language and all submissions shall be made in the
English language or with an English translation; provided that witnesses may
provide testimony in a language other than English if a simultaneous English
translation is provided.  The Parties shall be entitled to engage in reasonable
discovery, including the right to production of relevant and material documents
by the opposing Party and the right to take depositions reasonably limited in
number, time and place; provided that in no event shall any Party be entitled to
refuse to produce relevant and non-privileged documents or copies thereof
requested by the other Party within the time limit set and to the extent
required by order of the arbitration tribunal.  All Disputes regarding discovery
shall be promptly resolved by the arbitration tribunal.  The award of the
arbitration tribunal shall be in writing, state the reasons upon which the award
thereof is based, be signed by all arbitrators, and be final and binding. At
Owner’s sole option, any other person may be joined as an additional party to
any arbitration conducted under this Section 18.2, provided that the party to be
joined is or may be liable to either Party in connection with all or any part of
any Dispute between the Parties. The Parties agree that judgment on the
arbitration award may be entered by any court having jurisdiction
thereof.  Without limiting the foregoing, if there are common issues of fact or
law in connection with any Disputes in an arbitration conducted under this
Article 18 and any disputes in connection with any arbitration under the Train 3
EPC Agreement, either Party may consolidate the two arbitrations.

A.          The arbitrators for any arbitration under Section 18.2 shall be
selected in accordance with this Section 18.2A.

1.      For Claims less than [***] U.S. Dollars (U.S.$ [***]), Owner and
Contractor shall jointly select one arbitrator within [***] Days of the filing
of the

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demand for arbitration with the AAA, or if the Parties fail to appoint such
arbitrator within the applicable time period, then the AAA shall appoint the
arbitrator in accordance with the AAA rules.

2.      For Claims [***] U.S. Dollars (U.S.$ [***]) or more, Owner and
Contractor shall each appoint one (1) arbitrator within [***]  ([***]) Days of
the filing of the demand for arbitration with the AAA, and the two (2)
arbitrators so appointed shall select the presiding arbitrator within [***]
 ([***]) Days after the latter of the two (2) arbitrators has been appointed by
the Parties.  If either Party fails to appoint its party-appointed arbitrator or
if the two (2) party-appointed arbitrators cannot reach an agreement on the
presiding arbitrator within the applicable time period, then the AAA shall
appoint the remainder of the three (3) arbitrators not yet appointed.  Each
arbitrator shall be and remain at all times wholly impartial, and, once
appointed, no arbitrator shall have any ex parte communications with any of the
Parties or any other parties to the Dispute concerning the arbitration or the
underlying Dispute, provided, however, that the Parties may have ex parte
communications with their appointed arbitrators until the third arbitrator is
selected.

18.3      Continuation of Work during Dispute.  Notwithstanding any Dispute, it
shall be the responsibility of Contractor to continue to prosecute all of the
Work diligently and in a good and workmanlike manner in conformity with this
Agreement.  Except to the extent provided in Sections 16.4 or 16.5, Contractor
shall have no right to cease performance hereunder or to permit the prosecution
of the Work to be delayed.  Owner shall, subject to its right to withhold or
offset amounts pursuant to this Agreement, continue to pay Contractor undisputed
amounts in accordance with this Agreement; provided, however, in no event shall
the occurrence of any negotiation or litigation or arbitration prevent or limit
either Party from exercising its rights under this Agreement, including either
Party’s right to terminate pursuant to ARTICLE 16.

ARTICLE 19

CONFIDENTIALITY

19.1      Contractor’s Obligations.  Contractor hereby covenants and warrants
that Contractor and its employees, officers, directors and agents shall not
(without in each instance obtaining Owner’s prior written consent) disclose,
make commercial or other use of, or give or sell to any Person any of the
following information, whether disclosed prior to or after the Effective Date:
(i) any Work Product other than to Subcontractors or Sub-subcontractors as
necessary to perform the Work or (ii) any other information relating to the
business, products, services, research or development, actual or potential
clients or customers, financing of the Project, designs, methods, discoveries,
trade secrets, research, development or finances of Owner or any Owner
Affiliate, or relating to similar information of a third party who has entrusted
such information to Owner or any Owner Affiliate (hereinafter individually or
collectively, “Owner’s Confidential Information”).  Prior to disclosing any
information in clause (i) of this Section 19.1 to any Subcontractor or
Sub-subcontractor necessary to perform the Work, Contractor shall bind such
Subcontractor or Sub-subcontractor to confidentiality obligations substantially
similar to those contained in this Section 19.1.  Nothing in this Section 19.1
or this Agreement shall in any way prohibit Contractor or any of its
Subcontractors or Sub-subcontractors from making commercial or other use of,
selling, or disclosing any of their respective Contractor’s Intellectual
Property or

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Third Party Intellectual Property, nor be used to curtail Contractor’s rights
under Section 10.3 (provided that Contractor complies with its obligations in
Section 10.3).

19.2      Owner’s Obligations.  Owner hereby covenants and warrants that Owner
and its employees and agents shall not (without in each instance obtaining
Contractor’s prior written consent) disclose, make commercial or other use of,
or give or sell to any Person any estimating or pricing methodologies or
estimating or pricing information of Contractor or its Subcontractors relating
to the Work, including the Equipment, or any schedule information of Contractor
or its Subcontractors relating to the Work, each of which is conspicuously
marked and identified in writing as confidential by Contractor, (iii) any
confidential technical information provided by APCI, BASF or [***] under this
Agreement, which is conspicuously marked and identified in writing as
confidential by Contractor, or (iv) any Subcontractor Proprietary Information
provided by those Subcontractors which are specifically identified in Part II of
Attachment G (hereinafter individually or collectively, “Contractor’s
Confidential Information”).  The Parties agree that Owner may disclose
Contractor’s Confidential Information to any member of the Owner Indemnified
Parties, Owner’s (or Owner’s Affiliates’) consultants, contractors (provided
that with respect to (i) and (iv) above, such consultants and contractors are
not Competitors of Contractor, with the term “Competitors of Contractor” meaning
any entity that is an EPC contractor in the LNG liquefaction industry),
underwriters and attorneys, a bona fide prospective or actual purchaser of all
or a portion of Owner’s or any Owner Indemnified Party’s assets or ownership
interests, a bona fide prospective assignee of all or a portion of Owner’s
interest in this Agreement, any proposed or actual users of the Facility, any
prospective or actual buyers of LNG, Lenders, financial advisors and their
respective representatives, rating agencies or any other party in relation to
project financing for or the development of (a) the Project (including any
expansion of the Facilities) or (b) the Expanded Facility or any other facility
or project that Owner, including its Affiliates, joint ventures, partners or
assigns, may choose to develop, design, procure or construct, provided that with
respect to (b), such license shall only apply to Authorized Documents, further
provided that Owner binds such persons to the confidentiality obligations no
less restrictive than those contained in this Section 19.2; and further provided
that APCI, BASF and [***] confidential technical information is not disclosed to
direct competitors to APCI in the licensing of LNG liquefaction process
technology and to direct competitors to BASF and [***] in the licensing of acid
gas removal process technology without the applicable APCI’s, BASF’s or [***]’s
approval. Direct competitors to APCI in the licensing of LNG liquefaction
process technology are [***], Black & Veatch, Linde and Chart.  Direct
competitors to BASF and [***] in the licensing of acid gas removal process
technology are Sulfinol and Huntsman.  Contractor shall, from time to time, have
the right to inform Owner by notice in writing whether any other parties are to
be treated as competitors of APCI, BASF or [***] with respect to the
aforementioned technology, as the case may be, for the purposes of this Section
19.2, and such competitors of APCI, BASF or [***] shall be treated as
competitors upon approval of Owner (not to be unreasonably withheld).  Other
than as set forth in this Section 19.2, Owner shall not be restricted in any way
from the disclosure of the Work Product. Owner shall be entitled to disclose to
Persons that portion of Contractor’s Intellectual Property and Third Party
Intellectual Property for which Owner has a license to use to the extent such
disclosure is consistent with the purposes for which such license is granted
pursuant to Section 10.2 and provided that such recipients are bound to the
confidentiality obligations similar to those in this Section 19.2 to the extent
information disclosed to such recipients contains Contractor’s Confidential
Information.  Further, Owner acknowledges that it has entered into that certain
Confidentiality Agreements with the Technology Licensors (as required by the
Technology

108

Licensors), as amended, modified and/or supplemented from time to time
(“Owner/TL CAs”). Notwithstanding anything to the contrary herein, the Owner/TL
CAs are the exclusive document governing the access, use, handling,
safeguarding, disclosure, and all other treatment by Owner of all data and other
information of the applicable Technology Licensors provided pursuant to this
Agreement.  Owner hereby agrees to defend, indemnify and hold Contractor
Indemnified Parties harmless from and against all damages, costs, losses and
expenses (including all reasonable attorneys’ fees and litigation or arbitration
expenses) relating in any way to or arising out of any breach by Owner
Indemnified Parties of the Owner/TL CAs that is not due to the fault of any
Contractor Indemnified Party or any Subcontractor or Sub-subcontractor.

19.3      Definitions.  The term “Confidential Information” means one or both of
Contractor’s Confidential Information and Owner’s Confidential Information, as
the context requires.  The Party having the confidentiality obligations with
respect to such Confidential Information shall be referred to as the “Receiving
Party” and the Party to whom such confidentiality obligations are owed shall be
referred to as the “Disclosing Party.”  The term “Subcontractor Proprietary
Information”  means, with respect to only to the Subcontractors identified in
Part II of Attachment G, proprietary technical information, techniques,
trademarks, trade secrets, know-how or other proprietary rights relating to the
Work, including Equipment, that is conspicuously marked as such in any Work
Product submitted by Contractor to Owner.

19.4      Exceptions.  Notwithstanding Sections 19.1 and 19.2, Confidential
Information shall not include: (i) information which at the time of disclosure
or acquisition is in the public domain, or which after disclosure or acquisition
becomes part of the public domain without violation of this ARTICLE 19; (ii)
information which at the time of disclosure or acquisition was already in the
possession of the Receiving Party or its employees or agents and was not
previously acquired from the Disclosing Party or any of its employees or agents
directly or indirectly; (iii) information which the Receiving Party can show was
acquired by such entity after the time of disclosure or acquisition hereunder
from a third party without any confidentiality commitment, if, to the best of
Receiving Party’s or its employees’ or agent’s knowledge, such third party did
not acquire it, directly or indirectly, from the Disclosing Party or any of its
employees or agents; (iv) information independently developed by the Receiving
Party without benefit of the Confidential Information; and (v) information which
is required by Applicable Law, including the Securities and Exchange Commission
or other agencies in connection with the Facility to be disclosed; provided,
 however, that prior to such disclosure, the Receiving Party gives reasonable
notice to the Disclosing Party of the information required to be disclosed.

19.5      Equitable Relief.  The Parties acknowledge that in the event of a
breach of any of the terms contained in this ARTICLE 19, the Disclosing Party
would suffer irreparable harm for which remedies at law, including damages,
would be inadequate, and that the Disclosing Party shall be entitled to seek
equitable relief therefor by injunction, in addition to any and all rights and
remedies available to it at law and in equity, without the requirement of
posting a bond.

19.6     Term.  The confidentiality obligations of this ARTICLE 19 shall survive
the expiration or termination of this Agreement for a period of ten (10) years
following the expiration or earlier termination of this Agreement; provided,
however, the confidentiality obligations of Owner in Section 19.2 (ii) shall
survive the expiration or termination of this Agreement for a period of fifteen
(15) years following the expiration of the Defect Correction Period of this
Agreement.

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ARTICLE 20

LIMITATION OF LIABILITY

20.1        Contractor Aggregate Liability.  NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT, CONTRACTOR INDEMNIFIED PARTIES SHALL NOT BE LIABLE
TO OWNER INDEMNIFIED PARTIES UNDER THIS AGREEMENT OR UNDER ANY CAUSE OF ACTION
RELATED TO THE SUBJECT MATTER OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCTS LIABILITY, INDEMNITY,
CONTRIBUTION OR ANY OTHER CAUSE OF ACTION FOR CUMULATIVE AGGREGATE AMOUNTS IN
EXCESS OF AN AMOUNT EQUAL TO [***] U.S. DOLLARS (U.S. $[***]) (“AGGREGATE CAP”)
AND OWNER SHALL RELEASE CONTRACTOR INDEMNIFIED PARTIES FROM ANY LIABILITY IN
EXCESS THEREOF; PROVIDED THAT, NOTWITHSTANDING THE FOREGOING, THE LIMITATION OF
LIABILITY AND RELEASE SET FORTH IN THIS SECTION 20.1 SHALL NOT (I) APPLY TO
CONTRACTOR’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO
CLAIMS BROUGHT BY A THIRD PARTY UNDER SECTIONS 17.1A, 17.1B, 17.1C, 17.1E,
17.1H, 17.1I, 17.1J, OR 17.3 OR ITS OBLIGATIONS UNDER SECTIONS 8.2A, 9.1E, 17.5,
OR 17.6; (II) APPLY TO CONTRACTOR’S OBLIGATION TO DELIVER TO OWNER FULL LEGAL
TITLE TO AND OWNERSHIP OF ALL OR ANY PORTION OF THE WORK AND FACILITY AS
REQUIRED UNDER THIS AGREEMENT; (III) INCLUDE THE PAYMENT OF PROCEEDS UNDER ANY
INSURANCE POLICY OF CONTRACTOR OR ANY OF ITS SUBCONTRACTORS OR
SUB-SUBCONTRACTORS REQUIRED UNDER THIS AGREEMENT; OR (IV) APPLY IN THE EVENT OF
CONTRACTOR’S FRAUD, OR ABANDONMENT OF THE WORK.  IN NO EVENT SHALL THE
LIMITATION OF LIABILITY SET FORTH IN THIS SECTION 20.1 BE IN ANY WAY DEEMED TO
LIMIT CONTRACTOR’S OBLIGATIONS TO (A) COMPLETE THE WORK FOR THE COMPENSATION
PROVIDED UNDER THIS AGREEMENT OR (B) PERFORM ALL WORK REQUIRED TO ACHIEVE
SUBSTANTIAL COMPLETION OF EACH TRAIN AND FINAL COMPLETION.  THE COSTS INCURRED
BY CONTRACTOR IN PERFORMING THE WORK SHALL NOT BE COUNTED AGAINST THE LIMITATION
OF LIABILITY SET FORTH IN THIS SECTION 20.1.  FOR AVOIDANCE OF DOUBT, AMOUNTS
PAID TO OWNER BY CONTRACTOR FOR LIQUIDATED DAMAGES SHALL BE COUNTED AGAINST THE
LIMITATION OF LIABILITY SET FORTH IN THIS SECTION 20.1.  ADDITIONALLY, THE
AGGREGATE CAP SHALL BE INCREASED IN AN AMOUNT EQUAL TO [***] PERCENT  ([***]%)
OF THE PRICE OF ANY ADDITIONAL WORK OPTIONS THAT ARE SELECTED BY OWNER IN
ACCORDANCE WITH ATTACHMENT GG.

20.2       Limitation on Contractor’s Liability for Liquidated Damages.

A.         DELAY LIQUIDATED DAMAGES FOR TRAIN 1.  SUBJECT TO SECTION 20.2D,
CONTRACTOR’S MAXIMUM LIABILITY TO OWNER FOR TRAIN 1 DELAY LIQUIDATED DAMAGES AND
RLFC DELAY LIQUIDATED DAMAGES FOR TRAIN 1 SHALL BE [***] U.S. DOLLARS (U.S. $
[***]).

B.         DELAY LIQUIDATED DAMAGES FOR TRAIN 2.  SUBJECT TO SECTION 20.2D,
CONTRACTOR’S MAXIMUM LIABILITY TO OWNER FOR TRAIN 2 DELAY LIQUIDATED DAMAGES AND
RLFC DELAY LIQUIDATED DAMAGES FOR TRAIN 2 SHALL BE [***] U.S. DOLLARS (U.S. $
[***]).  ADDITIONALLY, THE DELAY LIQUIDATED DAMAGES CAP FOR TRAIN 2 SHALL BE
INCREASED IN AN AMOUNT EQUAL TO [***] PERCENT ([***]%) OF THE PRICE OF ANY
ADDITIONAL WORK OPTIONS THAT ARE SELECTED BY OWNER IN ACCORDANCE WITH ATTACHMENT
GG.

110

C.        PERFORMANCE LIQUIDATED DAMAGES.  SUBJECT TO SECTION 20.2D,
CONTRACTOR’S MAXIMUM LIABILITY TO OWNER FOR PERFORMANCE LIQUIDATED DAMAGES SHALL
BE [***] U.S. DOLLARS (U.S. $ [***]).

D.         Exceptions to Limitations of Liability under Section
20.2.  SECTIONS 20.2A AND 20.2B SHALL NOT BE CONSTRUED TO LIMIT CONTRACTOR’S
OTHER OBLIGATIONS OR LIABILITIES UNDER THIS AGREEMENT (INCLUDING (I) ITS
OBLIGATIONS TO COMPLETE THE WORK FOR THE COMPENSATION PROVIDED UNDER THIS
AGREEMENT, (II) ITS OBLIGATIONS TO ACHIEVE THE KEY DATES (INCLUDING SUBSTANTIAL
COMPLETION OF EACH TRAIN AND FINAL COMPLETION OF THE FACILITY) AND (III) ITS
OBLIGATIONS WITH RESPECT TO MINIMUM ACCEPTANCE CRITERIA AND WARRANTIES), NOR
SHALL THE LIMITS SPECIFIED IN THIS SECTION 20.2 OR THE LIMITATIONS IN SECTION
20.3B APPLY IN THE EVENT OF CONTRACTOR’S FRAUD, OR ABANDONMENT OF THE WORK.

20.3       Liquidated Damages in General.

A.          Liquidated Damages Not Penalty.  It is expressly agreed that
Liquidated Damages payable under this Agreement do not constitute a penalty and
that the Parties, having negotiated in good faith for such specific Liquidated
Damages and having agreed that the amount of such Liquidated Damages is
reasonable in light of the anticipated harm caused by the breach related thereto
and the difficulties of proof of loss and inconvenience or nonfeasibility of
obtaining any adequate remedy, are estopped from contesting the validity or
enforceability of such Liquidated Damages.  If Contractor, Guarantor or anyone
on their behalf successfully challenges the enforceability of the per Day amount
of any Delay Liquidated Damages or the per unit rate of any Performance
Liquidated Damages, Contractor specifically agrees to pay Owner all actual
damages incurred by Owner in connection with such breach, including any and all
Consequential Damages (such as loss of profits and revenues, business
interruption, loss of opportunity and use) and all costs incurred by Owner in
proving the same (including all attorneys’ fees, and litigation or arbitration
expenses) without regard to any limitations whatsoever set forth in this
Agreement other than Section 20.1 and Section 20.2.  For the avoidance of doubt,
this Section 20.3A shall not preclude Contractor from contesting whether it is
responsible for (a) delays giving rise to Owner’s claims for Delay Liquidated
Damages or (b) the failure to achieve the Performance Guarantees.

B.          Liquidated Damages as Exclusive Remedy.  PAYMENT OF ANY LIQUIDATED
DAMAGES SHALL IN NO WAY AFFECT OWNER’S RIGHT TO TERMINATE THIS AGREEMENT UNDER
SECTION 16.1A(XII), OR RECEIVE OTHER LIQUIDATED DAMAGES CONTEMPLATED IN THIS
AGREEMENT FOR ANY OTHER ASPECT OF CONTRACTOR’S OBLIGATIONS HEREUNDER.  WITHOUT
LIMITATION OF OWNER’S RIGHTS UNDER SECTION 16.1A(XII) AND SUBJECT TO SECTION
20.3A:

1.      Delay Liquidated Damages shall be the sole and exclusive remedy owed by
Contractor for delay in achieving the Guaranteed Substantial Completion Dates
set forth in Section 5.3A and for delay in readiness to load the LNG Tanker as
set forth in Section 11.2C; and

111

2.      Performance Liquidated Damages shall be the sole and exclusive remedy
owed by Contractor for failure of the Work to achieve any of the Performance
Guarantees provided that the Minimum Acceptance Criteria is achieved and
Contractor complies with its corrective action obligations under Section 11.5A.

20.4      Consequential Damages.  NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS
AGREEMENT TO THE CONTRARY, NEITHER THE OWNER INDEMNIFIED PARTIES NOR CONTRACTOR
INDEMNIFIED PARTIES (NOR THEIR SUBCONTRACTORS OR SUB-SUBCONTRACTORS) SHALL BE
LIABLE UNDER THIS AGREEMENT OR UNDER ANY CAUSE OF ACTION RELATED TO THE SUBJECT
MATTER OF THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE),
STRICT LIABILITY, PRODUCTS LIABILITY, INDEMNITY, CONTRIBUTION, OR ANY OTHER
CAUSE OF ACTION FOR SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL LOSSES OR DAMAGES, OR FOR THE FOLLOWING SPECIFIC HEADS OF LOSS
WHETHER SUCH LOSS IS DIRECT, INDIRECT OR CONSEQUENTIAL: LOSS OF PROFITS, LOSS OF
USE, LOSS OF OPPORTUNITY, LOSS OF REVENUES, LOSS OF FINANCING, LOSS OF BONDING
CAPACITY, COSTS OF CAPITAL OR OF OBTAINING OR MAINTAINING FINANCING, LOSS OF
GOODWILL, LOSS OF PRODUCTION, LOSS OF PRODUCTIVITY, BUSINESS INTERRUPTION,
CLAIMS BY OWNER’S CUSTOMERS FOR ECONOMIC LOSS OR BUSINESS INTERRUPTION, OR
DAMAGES OR LOSSES FOR PRINCIPAL OFFICE EXPENSES INCLUDING COMPENSATION OF
PERSONNEL STATIONED THERE, COST OF OBTAINING AND MAINTAINING FINANCE (ALL THE
ABOVE TYPES OF DAMAGE BEING “CONSEQUENTIAL DAMAGES”), AND OWNER INDEMNIFIED
PARTIES SHALL RELEASE THE CONTRACTOR INDEMNIFIED PARTIES AND THEIR
SUBCONTRACTORS OR SUB-SUBCONTRACTORS, AND CONTRACTOR INDEMNIFIED PARTIES AND
THEIR SUBCONTRACTORS OR SUB-SUBCONTRACTORS SHALL RELEASE OWNER INDEMNIFIED
PARTIES, FROM AND AGAINST ANY LIABILITY FOR SUCH CONSEQUENTIAL DAMAGES; PROVIDED
THAT THE EXCLUSION OF LIABILITY SET FORTH IN THIS SECTION 20.4 (I) IS NOT
INTENDED TO PREVENT CONTRACTOR FROM RECEIVING PROFIT TO THE EXTENT THAT
CONTRACTOR IS ENTITLED TO RECEIVE SUCH PROFIT UNDER THE PROVISIONS OF THIS
AGREEMENT; (II) SHALL NOT APPLY TO LIQUIDATED DAMAGES; (III) SHALL NOT APPLY TO
CONTRACTOR’S INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT FOR DAMAGES
CLAIMED BY ANY THIRD PARTY UNDER SECTIONS 17.1E, 17.1H, 17.1I, 17.1J AND 17.5;
AND (IV) SHALL NOT APPLY WHERE CONSEQUENTIAL DAMAGES ARE EXPRESSLY PERMITTED
UNDER SECTION 20.3A.  FOR THE PURPOSES OF SECTION 20.1 AND THIS SECTION 20.4,
THE TERM “THIRD PARTY” MEANS ANY PERSON OTHER THAN OWNER INDEMNIFIED PARTIES AND
CONTRACTOR INDEMNIFIED PARTIES EXCEPT FOR EMPLOYEES, OFFICERS AND DIRECTORS OF
OWNER INDEMNIFIED PARTIES AND CONTRACTOR INDEMNIFIED PARTIES.

20.5      Exclusive Remedies.  WHERE A REMEDY SPECIFIED IN THIS AGREEMENT IS
EXPRESSLY STATED TO BE A PARTY’S SOLE AND EXCLUSIVE REMEDY, IT IS INTENDED THAT
SUCH REMEDY SHALL BE THE SOLE AND EXCLUSIVE REMEDY OF SUCH PARTY FOR THE MATTER
IN QUESTION, NOTWITHSTANDING ANY REMEDY OTHERWISE AVAILABLE AT LAW OR IN EQUITY.

20.6     Application of Liability Limitations.  EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY APPLICABLE LAW, THE WAIVERS AND DISCLAIMERS OF LIABILITY, RELEASES
FROM LIABILITY, EXCLUSIONS, LIMITATIONS AND APPORTIONMENTS OF LIABILITY AND
INDEMNITIES EXPRESSED IN THIS AGREEMENT SHALL APPLY EVEN IN THE EVENT OF FAULT,
NEGLIGENCE (IN WHOLE OR IN PART), STRICT LIABILITY, BREACH OF CONTRACT OR
OTHERWISE OF THE PARTY RELEASED OR WHOSE LIABILITY IS WAIVED, DISCLAIMED,
LIMITED, FIXED OR INDEMNIFIED AND

112

SHALL EXTEND IN FAVOR OF MEMBERS OF THE OWNER INDEMNIFIED PARTIES AND THE
CONTRACTOR INDEMNIFIED PARTIES.

ARTICLE 21

MISCELLANEOUS PROVISIONS

21.1     Entire Agreement.  This Agreement, including the Attachments and
Schedules attached to and incorporated into this Agreement, contains the entire
understanding of the Parties with respect to the subject matter hereof and
incorporates any and all prior agreements, including the ITB Agreement, and
commitments with respect thereto.  There are no other oral understandings, terms
or conditions, and neither Party has relied upon any representation, express or
implied, not contained in this Agreement.  General or special conditions
included in any of Contractor’s price lists, invoices, tickets, receipts or
other such documents presented to Owner shall have no applicability to Owner
with respect to this Agreement.  Without limitation, this Agreement supersedes
in its entirety the ITB Agreement any other agreements between the Parties or
their Affiliates related to the Facility (including any confidentiality or
non-disclosure agreements).  All services performed under the ITB Agreement
shall be governed by the terms and conditions set forth in this Agreement,
except that Contractor agrees that it has been fully paid for any services
performed under the ITB Agreement, and any disclosures made prior to the
Effective Date under any confidentiality or non-disclosure agreements between
Owner or its Affiliates and Contractor with respect to the Facility shall be
governed under this Agreement.

21.2      Amendments.  Other than Change Directives issued by Owner to
Contractor pursuant to Section 6.1E or Section 6.2D, no change, amendment or
modification of this Agreement shall be valid or binding upon the Parties hereto
unless such change, amendment or modification is in writing and duly executed by
both Parties hereto.

21.3      Joint Effort.  Preparation of this Agreement has been a joint effort
of the Parties and the resulting document shall not be construed more severely
against one of the Parties than against the other.

21.4      Captions.  The captions contained in this Agreement are for
convenience and reference only and in no way define, describe, extend or limit
the scope of intent of this Agreement or the intent of any provision contained
herein.

21.5      Notice.  Any notice, demand, offer, or other written instrument
required or permitted to be given pursuant to this Agreement shall be in writing
signed by the Party giving such notice and shall be either (i) hand delivered;
(ii) delivered by same-Day or overnight courier; or (iii) delivered by certified
mail, return receipt requested, to the other Party at the address set forth
below.  Notices, demands, offers and other communications may be delivered via
email as a courtesy; however, delivery in such manner shall not be deemed to
fulfill the notice requirements of this Section 21.5.

113

 

A.        If delivered to Owner:

Rio Grande LNG, LLC

1000 Louisiana Street

39th Floor

Houston, Texas 77002

Attn: [***]

E-mail: [***]

 

with a copy to:

Rio Grande LNG, LLC

1000 Louisiana Street

39th Floor

Houston, Texas 77002

Attn: [***]

E-mail:  [***]

 

B.        If delivered to Contractor:

Bechtel Oil, Gas and Chemicals, Inc.

3000 Post Oak Boulevard

Houston, Texas 77056

Facsimile: [***] 

Attn: [***]

 

with a copy to:

 

Bechtel Oil, Gas and Chemicals, Inc.

3000 Post Oak Boulevard

Houston, Texas 77056

Facsimile: [***] 

Attn: [***] 

 

Each Party shall have the right to change the place to which notice shall be
sent or delivered by sending a similar notice to the other Party in like
manner.  Notices, demands, offers or other written instruments shall be deemed
to be received: (1) if delivered by hand, by same-day or overnight courier
service, or certified mail on the date actually received at the address of the
intended recipient; or (2) if sent by facsimile, upon receipt by the sender of
an acknowledgment or transmission report generated by the machine from which the
facsimile was sent indicating that the facsimile was sent in its entirety to the
recipient’s facsimile number.

21.6      Severability.  If any provision or part thereof in this Agreement is
determined to be illegal, invalid or unenforceable, such illegality, invalidity
or unenforceability will not impair the operation of or affect those remaining
portions of such provision and this Agreement that are legal, valid and
enforceable.  Such provision or part thereof will be modified so as to be legal,

114

valid and enforceable consistent as closely as possible with the intent of the
original language of such provision or part thereof and shall be enforced to the
extent possible consistent with Applicable Law.  If the illegality, invalidity
or unenforceability of such provision or part thereof cannot be modified
consistent with the intent of the original language, such provision will be
deleted and treated as if it were never a part of this Agreement and shall not
affect the validity of the remaining portions of the provision or this
Agreement.

21.7      Assignment.  Neither Party may assign its rights or responsibilities
under this Agreement without the prior written consent of the
non-assigning/novating Party hereto; provided that Owner may assign and/or
novate this Agreement, and any rights, title and interest in this Agreement, the
Work Product and all intellectual property rights, and all liabilities and
obligations related thereto, in whole or part, to any of the Owner Indemnified
Parties (including any of their respective successors in interest), Owner’s
potential or actual business partners, investors or lenders, any purchaser of an
interest in all or part of the Facility or the operator of the Facility without
first obtaining such consent.  Furthermore, Owner may assign, pledge and/or
grant a security interest in this Agreement to any Lender without Contractor’s
consent.  Upon written notice to Contractor, Contractor will execute any
document required by Owner, acting reasonably, to effect such assignment and/or
novation.  When duly assigned and/or novated in accordance with the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
assignee.  Any assignment and/or novation not in accordance with this
Section 21.7 shall be void and without force or effect.

21.8      No Waiver.  Any failure of either Party to enforce any of the
provisions of this Agreement or to require compliance with any of its terms at
any time during the term of this Agreement shall in no way affect the validity
of this Agreement, or any part hereof, and shall not be deemed a waiver of the
right of such Party thereafter to enforce any and each such provisions.

21.9      Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the laws of the state of Texas (without giving effect to the
principles thereof relating to conflicts of law).  The United Nations Convention
on Contracts for the International Sale of Goods shall not apply to this
Agreement and shall be disclaimed in and excluded from any Subcontracts entered
into by Contractor in connection with the Work or the Facility.

21.10     Foreign Corrupt Practices Act.  Contractor shall, and Contractor shall
require each of its Subcontractors and Sub-subcontractors, and the agents and
employees of such Subcontractors and Sub-subcontractors, to comply with all
provisions of the Foreign Corrupt Practices Act of the United States 15 U.S.C. §
78dd-1 to -3, as amended (“FCPA”), the UK Bribery Act 2010 (“UK Bribery Act”)
and the requirements of the Organization for Economic Co-operation and
Development’s (“OECD”) Convention on Combating Bribery of Foreign Public
Officials in International Business Transactions.  Contractor shall not, and
Contractor shall require each of its Subcontractors and Sub-subcontractors (and
the agents and employees of such Subcontractors and Sub-subcontractors) not to
(i) make direct or indirect payments of a corrupt nature, to employees, agents
or public employees of a government, or candidates or active members of
political parties, in order to obtain or maintain business, or (ii) take any
action that could result in Contractor, Owner or any of their Affiliates
becoming subject to any action, penalty or loss of benefits under the FCPA or
OECD.

115

21.11      Successors and Assigns.  This Agreement shall be binding upon the
Parties hereto, their successors and permitted assigns.

21.12      Attachments and Schedules.  All Attachments and Schedules are
incorporated into this Agreement by such reference and shall be deemed to be an
integral part of this Agreement.

21.13      Obligations.  Nothing contained in this Agreement shall be construed
as constituting a joint venture or partnership between Contractor and Owner.

21.14      Further Assurances.  Contractor and Owner agree to provide such
information, execute and deliver any such instruments and documents and to take
such other actions as may be necessary or reasonably requested by the other
Party that are not inconsistent with the provisions of this Agreement and that
do not involve the assumptions of obligations (including liabilities) greater
than those provided for in this Agreement, in order to give full effect to this
Agreement and to carry out the intent of this Agreement.  In addition,
Contractor agrees to cooperate with Owner and any Lender (i) to supply such
information and documentation, (ii) to grant such written consents to the
assignment of this Agreement, (iii) to execute such amendments to this Agreement
as any Lender may require to the extent that the requested changes do not
materially adversely affect the rights and obligations or limitations of
liability of Contractor hereunder, and (iv) to take such action or execute such
documentation as any Lender shall reasonably require.

21.15      Priority.  The documents that form this Agreement are listed below in
order of priority, with the document having the highest priority listed first
and the one with the lowest priority listed last.  Subject to Section 1.1 under
the definition of Applicable Codes and Standards regarding conflicts or
inconsistencies between any Applicable Codes and Standards, in the event of any
conflict or inconsistency between a provision in one document and a provision in
another document, the document with the higher priority shall control.  In the
event of a conflict or inconsistency between provisions contained within the
same document, then the provision that requires the highest standard of
performance on the part of Contractor shall control.  This Agreement is composed
of the following documents, which are listed in priority:

A.      Change Orders or written amendments to this Agreement;

B.       this Agreement; and

C.       Attachments and Schedules to this Agreement.

21.16      Restrictions on Public Announcements.  Neither Contractor nor its
Subcontractors or Sub-subcontractors shall (i) publish or cause to be made
public any photographs of any part of the Facility or (ii) issue a press
release, advertisement, publicity material, prospectus, financial document or
similar matter, or (iii) participate in a media interview that mentions or
refers to the Work, the Project or any part of the Facility without the prior
written consent of Owner, not to be unreasonably withheld,  provided that
Contractor shall not be required to obtain Owner’s prior written consent of
Contractor’s issuance of a press release to correct any errors made by Owner
concerning Contractor in a prior press release issued by Owner if Contractor
first gives Owner [***]  ([***]) Days’ prior written notice of Contractor’s
intent to issue such corrective press release and an opportunity of Owner to
correct such error within such [***]  ([***]) Day period.  Under

116

no circumstance shall Contractor permit access on the Site of Third Parties who
are not involved in the performance of the Work without prior written consent of
Owner.

21.17      Parent Guarantee.  On or before the Effective Date, Guarantor shall
provide an irrevocable, unconditional parent guarantee in the form attached as
Attachment U (“Parent Guarantee”) guaranteeing the full and faithful performance
of Contractor under this Agreement.

21.18      Language.  This Agreement and all notices, communications and
submittals between the Parties pursuant to this Agreement shall be in the
English language.

21.19       Counterparts.  This Agreement may be signed in any number of
counterparts and each counterpart (when combined with all other counterparts)
shall represent a fully executed original as if one copy had been signed by each
of the Parties.  Facsimile signatures shall be deemed as effective as original
signatures.

21.20       Owner’s Lender.  In addition to other assurances provided in this
Agreement, Contractor acknowledges that Owner intends to obtain project
financing associated with the Project and Contractor agrees to cooperate with
Owner and Lender (including Independent Engineer) in connection with such
project financing, including entering into direct agreements with Lender (which
shall be substantially in the form of Attachment AA), covering matters that are
customary in project financings of this type such as Lender assignment or
security rights with respect to this Agreement, direct notices to Lender,
step-in/step-out rights, access by Lender’s representative and other matters
applicable to such project financing.  Subject to the terms of this Agreement,
such cooperation includes cooperation with lenders with respect to any expansion
to the Facility.  Contractor acknowledges and agrees that NTP is contingent upon
obtaining such non-recourse project financing and agrees further that in the
event Owner does not obtain such project financing, Owner shall not be liable to
Contractor by reason of any terms and conditions contained in or connected with
this Agreement, except for any Work performed by Contractor in accordance with
this Agreement under an LNTP and any amounts owed under Section 16.2.

21.21      Train 3 Liquefaction Facility.

A.       Notwithstanding anything to the contrary in this Agreement, the work
performed under the Train 3 EPC Agreement is governed by the Train 3 EPC
Agreement, and the Work performed under this Agreement is governed by this
Agreement.

B.        In addition and notwithstanding anything to the contrary in this
Agreement, Contractor acknowledges that it shall not be entitled to any
modification of the Contract Price, Guaranteed Dates or any other Changed
Criteria under this Agreement arising out of or relating to (i) any acts or
omissions of Contractor or any of its subcontractors or sub-subcontractors in
connection with the Train 3 EPC Agreement or the Train 3 Liquefaction Facility,
or (ii) any act, instruction or direction by Owner or anyone acting for or on
behalf of Owner in accordance with the Train 3 EPC Agreement; provided that in
no case shall this be interpreted to entitle Contractor to a change, but instead
Contractor shall only be entitled to relief to the extent permitted under
ARTICLE 6.  Similarly, notwithstanding anything to the contrary in this
Agreement, Contractor acknowledges that it shall not be entitled to any
modification of the contract price, guaranteed dates or any other changed

117

criteria under the Train 3 EPC Agreement arising out of or relating to (i) any
acts or omissions of Contractor or any of its Subcontractors or
Sub-subcontractors in connection with this Agreement, Train 1 or Train 2, or
(ii) any act, instruction or direction by Owner or anyone acting for or on
behalf of Owner in accordance with this Agreement.

C.      Without limiting the foregoing, the waivers and disclaimers of
liability, releases from liability, exclusions, limitations and apportionments
of liability and indemnities expressed in the Train 3 EPC Agreement and this
Agreement shall apply to the work performed under each agreement respectively
and shall not supersede any such rights, obligations or liabilities that arise
out of the other agreement

21.22     Potential Lenders, Potential Equity Investors and Equity Participants.

A.          Potential Lenders.  Owner shall provide to Contractor the identity
of Potential Lenders that have signed confidentiality agreements with Owner.  As
used herein, “Potential Lender” shall mean any commercial bank, insurance
company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended) and which extends credit, buys loans and is
in the business of lending as one of its businesses.

B.          Potential Equity Investors.  Prior to disclosure of any Work Product
by Owner to any potential equity investor in Owner in connection with the
Project, Owner shall obtain a waiver from such potential equity investor
agreeing that it is not relying upon such Work Product in making any investment
decision in connection with the Project and waiving and releasing any claim it
may have against Contractor or Contractor’s Affiliates on account of any such
reliance or purported reliance.

C.         Equity Participants.  Owner’s successors, assigns and any future
recipient of any equity ownership in Owner (excluding Lenders) shall be bound by
the releases and limitations on liability set forth in Sections 2.2A, 8.2B,
12.5, 16.1B, 17.1B, 20.1, 20.2, 20.3 and 20.4  of this Agreement, and Owner
shall obtain the express written agreement of such equity participants to be
bound by such releases, limitations of liability and other protections of
Contractor.

21.23     Survival.  ARTICLE 9, ARTICLE 10, ARTICLE 12, ARTICLE 14, ARTICLE 15,
ARTICLE 16, ARTICLE 17, ARTICLE 18 and ARTICLE 19, ARTICLE 20, Sections 3.6,
3.8, 3.13, 3.17, 8.1, 11.10, 21.7, 21.9, 21.17, and this Section 21.23 shall
survive termination or expiration of this Agreement, in addition to any other
provisions which by their nature should, or by their express terms do, survive
or extend beyond the termination or expiration of this Agreement.

 

[Signature Page Follows]

 

118

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the Effective Date:

 

 

 

 

Owner:

 

 

 

RIO GRANDE LNG, LLC

 

 

 

By:

[***]

 

Name:

[***]

 

Title:

[***]

 

 

 

Contractor:

 

 

 

BECHTEL OIL, GAS AND CHEMICALS, INC.

 

 

 

By:

[***]

 

Name:

[***]

 

Title:

[***]

 

 

 

119

ATTACHMENT A

 

SCOPE OF WORK AND BASIS OF DESIGN

 

 

 

 

ATTACHMENT A

SCOPE OF WORK

 

 

Page 1 of 68

 

SCHEDULE A-1

EPC SCOPE OF WORK

FOR

RIO GRANDE LNG FACILITY

RG-000-PE-SOW-0001

REV

DATE

REVISION DESCRIPTION

ORIGINATOR

REVIEWER/
ENDORSER

APPROVER

0

14 Aug 2018

Issued for Use

[***]

[***]

[***]

1

22 Aug 2018

Issued for Use

[***]

[***]

[***]

2

26 Mar 2019

Interim update per EPC bid correspondence applicable to all bidders

[***]

[***]

[***]

 

Page 2 of 68

 

Table of Contents

1.0

INTRODUCTION

6

 

1.1

Project Description

6

 

1.2

Scope of document

6

2.0

BASIS FOR EPC EXECUTION

6

3.0

DEFINITIONS

6

4.0

OWNERS EXECUTION PHILOSOPHY

16

 

4.1

Project management

16

 

4.2

Health, Safety and Security

17

 

4.3

Environmental

17

 

4.4

Permitting

17

 

4.5

Quality

17

 

4.6

Cost and Schedule Balance

18

 

4.7

Commercial

18

 

4.8

Engineering

18

 

4.9

Construction Management, Startup and Operations

18

 

4.10

Community and Stakeholder Engagement

18

 

4.11

Reporting

19

5.0

EPC AGREEMENT REFERENCE DOCUMENT LIST

19

6.0

SCOPE OF FACILITIES

19

7.0

CONTRACTOR SCOPE OF WORK

23

 

7.1

Home Office Services

23

 

7.2

Supply of Equipment and Materials Required to Construct the Facility

23

 

7.3

Traffic and Logistics Services

23

 

7.4

Materials Management Services

24

 

7.5

Subcontracted Services

24

 

7.6

Services Required to Construct the Facility

24

 

7.7

Precomissioning and Commissioning Services

24

 

7.8

SIMOPS

25

 

7.9

Training of Owner Personnel

25

 

7.10

Assistance to Owner

25

 

7.11

Third-party Interfaces

25

 

7.12

Facilities for Owner Personnel

25

 

7.13

Performance Tests

25

 

7.14

Process License Fees

25

 

7.15

Record As-Built Drawings and SpecIfications

26

 

7.16

Handover Documentation

26

 

7.17

Information Systems for Owner Use

26

 

7.18

Exclusions from Contractor’s Scope of Work

26

8.0

PROJECT MANAGEMENT AND ADMINISTRATION

26

9.0

QUALITY ASSURANCE

26

10.0

ENGINEERING

27

 

10.1

General

27

 

10.2

Specific Tasks by Discipline

28

11.0

ENGINEERING: THIRD-PARTY CONSULTANTS

36

12.0

PROCUREMENT

37

 

12.1

General

37

 

12.2

Purchasing Procedure

37

 

12.3

Requisitions/Purchases

37

Page 3 of 68

 

 

12.4

Expediting and Inspection

37

 

12.5

Factory Acceptance Tests

38

 

12.6

Supply of Equipment – Tagged Equipment Items

38

 

12.7

Supply of Equipment – Bulk Materials

38

 

12.8

Spare Parts

39

 

12.9

Catalysts & Chemicals, Oils & Lubricants

39

 

12.10

Miscellaneous Materials Supply

40

 

12.11

Traffic and Logistics Services

41

13.0

MATERIALS MANAGEMENT

41

 

13.1

Home Office Materials Management

41

 

13.2

Site Materials Management

41

14.0

SUBCONTRACT SERVICES

41

 

14.1

Engineering Design & Consultancy Subcontracts

42

 

14.2

Site Construction Subcontracts

42

 

14.3

Subcontracts during Commissioning, Start-up, and Initial Operation up to
Substantial Completion of Train 1

42

 

14.4

Contractor Provided Service Subcontracts

42

15.0

CONSTRUCTION

42

 

15.1

General

42

 

15.2

Construction Scope of Work

42

 

15.3

Rules and Regulations

43

 

15.4

Community Engagement

44

 

15.5

Construction Labor

44

 

15.6

Construction Equipment

44

 

15.7

Consumable Construction Materials

44

 

15.8

Subcontracts

44

 

15.9

Site Preparation and Levee

44

 

15.10

Marine Works

45

 

15.11

Site Facilities and Construction Utilities

47

 

15.12

Disposal of Construction Waste

48

 

15.13

Security

48

 

15.14

Heavy Lifts

49

 

15.15

Construction Temporary Facilities

50

 

15.16

Contractor’s Tools and Construction Equipment

51

 

15.17

Construction Permits

52

16.0

PRE-COMMISSIONING, COMMISSIONING, COMPLETION AND ACCEPTANCE

52

 

16.1

General

52

 

16.2

Commencement of Commissioning and Start-up

52

 

16.3

Operator Training

53

 

16.4

OPERATIONS TESTS

53

17.0

SIMULTANEOUS OPERATIONS

53

18.0

OPERATIONS AND MAINTENANCE MANAGEMENT SYSTEMS AND PROCEDURES

54

 

18.1

Asset Integrity MANAGEMENT SYSTEMS

54

 

18.2

Operations Management Procedures

54

 

18.3

OPERATIONS AND Maintenance Procedures AND MANUALS

54

19.0

PREPARATION OF PRECOMMISSIONING, COMMISSIONING, AND INITIAL START-UP PROCEDURES
AND MANUALS

55

20.0

CONTRACTOR PROVIDED TRAINING FOR OWNER PERSONNEL

56

 

20.1

PROVISION OF OPERATIONS TRAINING SIMULATOR

56

 

20.2

Preparation of Training Materials

56

 

20.3

Preparation of Training Materials for Subcontractor Equipment Packages

56

Page 4 of 68

 

 

20.4

Training Courses

57

 

20.5

Training Courses for Vendor Equipment Packages

57

21.0

ASSISTANCE TO OWNER

57

 

21.1

Required Submissions to Regulatory Agencies

57

 

21.2

Technical Support to Owner’s Regulatory Services Consultants

57

22.0

THIRD-PARTY INTERFACES

57

 

22.1

Feed Gas Supply Interface with Rio Bravo Pipeline

57

 

22.2

Fresh Water Supply Interface with BND

58

 

22.3

Sewage Collection Interface with BND

58

 

22.4

138 kV Switchyard Interface with AEP (POMPANO)

59

 

22.5

Local Telecommunications Interface with AT&T

59

 

22.6

Nitrogen Supply Interface with Owner’s Nitrogen Supplier

59

 

22.7

Temporary fencing and utilities for expansion options

60

 

22.8

Brownsville Navigation District TARIFF

60

 

22.9

ENVIRONMENTAL IMPACT STATEMENT DIVISION OF RESPONSIBILITY

60

23.0

FACILITIES FOR OWNER PERSONNEL

60

 

23.1

Office Accommodation for Owner personnel in Contractor’s Home Office

60

 

23.2

Temporary Facilities Provided at Site by Contractor for Owner’s Project
Personnel

60

24.0

PERFORMANCE GUARANTEES AND PERFORMANCE TESTING

61

25.0

PROCESS LICENSE FEES

61

26.0

DOCUMENT NUMBERING

61

27.0

RECORD AS-BUILT DRAWINGS AND SPECIFICATIONS

61

28.0

HANDOVER DOCUMENTATION

61

29.0

INFORMATION SYSTEMS FOR OWNER USE

61

30.0

EXCLUSIONS FROM CONTRACTOR’S SCOPE OF WORK

62

31.0

[***]

62

APPENDIX A-1:      NOT USED

63

APPENDIX A-2:      PRICED OPTION – LNG STORAGE TANK 3

64

APPENDIX A-3:      PRICED OPTION – JETTY 2

65

APPENDIX A-4:      PRICED OPTION – LNG TRUCK LOADING

66

APPENDIX A-5:      ENVIRONMENTAL IMPACT STATEMENT COMMITMENTS

67

APPENDIX A-6:      [***] 

68

 

Page 5 of 68

 

1.0        INTRODUCTION

1.1        PROJECT DESCRIPTION

Contractor shall perform the engineering, procurement, construction,
pre-commissioning, commissioning, start-up and testing of a turnkey liquefied
natural gas (“LNG”) liquefaction facility and export terminal, consisting of two
(2) liquefaction units, each having an aggregate nominal LNG production capacity
of approximately [***] million metric tonnes per annum (“mtpa”) and associated
facilities, for the purpose of liquefying natural gas to form LNG, including
feed gas treatment facilities, and all systems and infrastructure, including
temporary facilities, from the feed gas pipeline tie-in to storage and marine
facilities and the loading arms, and all related appurtenances thereto (the
“Facility”) located at a site south of the Brownsville-Port Isabel Highway and
north of the Brownsville Ship Channel in Cameron County near Brownsville, Texas
(the “Site”), and owned by Rio Grande LNG, LLC (“Owner”);

1.2        SCOPE OF DOCUMENT

This document defines the Scope of Work (the “SOW”) to be performed by
Contractor during the EPC phase for implementation of Train 1 and Train 2 of the
Facility.

The Facility will be constructed in several successive phases of development. At
full build-out the Facility will ultimately be comprised of six (6) LNG
liquefaction trains, four (4) LNG storage tanks, two (2) marine loading jetties
with associated utilities and infrastructure as further described in the Basis
of Design (the “BOD”).

2.0        BASIS FOR EPC EXECUTION

Contractor shall develop detailed engineering design for Train 1 and Train 2,
and undertake procurement, construction, commissioning, start-up and initial
operation of the Facility in accordance with the BOD, and as defined in the EPC
Agreement (the “EPC Agreement”).

Contractor shall design and construct the Facility in compliance with the EPC
Agreement, Applicable Law, and Applicable Codes and Standards.

3.0        DEFINITIONS

Definitions are provided below. Capitalized terms set forth herein that are not
defined will have the meaning as agreed in the EPC Agreement, as applicable.  In
the event that there is a conflict between the Agreement and this document, the
terms and conditions in the Agreement prevail.

 

 

 

Term

    

Definition

3D

 

Three-dimensional

2D

 

Two-dimensional

Agreement

 

EPC Agreement

AIMS

 

Asset Integrity Management System

AEP 138 kV Electrical Switchyard (also called Pompano Switchyard)

 

Public Utility Electrical Switchyard being installed by others

APCI

 

Air Products and Chemicals, Inc.

ASME

 

American Society Mechanical Engineers

BASF

 

BASF SE

Page 6 of 68

 

Term

    

Definition

BND

 

Brownsville Navigation District

BOG

 

Boil-off Gas

BOM (Bill of Material)

 

List of all required components of an assembly of parts or complete item -
usually shown on the drawing

CAD

 

Computer-aided design

Capital Spare Parts

 

Those capital spare parts listed in Attachment W for use after Substantial
Completion which are to be included in the Work and the Contract Price, as
further set forth in Section 3.4B of the EPC Agreement

Central Control Building or CCB

 

A-7007 listed in the building list, document number 195910-000-CA-LI-1001 

CFD

 

Computational fluid dynamics – computational method (software) used to analyze
complex engineering scenarios / systems

Change Order

 

A written instrument signed by both Parties after the execution of this
Agreement in the form of Schedule D-1, that authorizes an addition to, deletion
from, suspension of, or any other modification or adjustment to the requirements
of this Agreement, including an addition to, deletion from or suspension of the
Work or any modification or adjustment to any Changed Criteria.  Owner and
Contractor are entitled to a Change Order in accordance with Article 6 of the
EPC Agreement

CMT

 

Construction management team

CMMS

 

Computerized maintenance management system also sometimes referred to as
computerized maintenance management and inspection system (CMMIS)

Commissioning

 

With respect to the applicable system or subsystem of the Equipment, all
activities required subsequent to achieving Mechanical Completion of such system
or subsystem and prior to RFSU, including the introduction of inert gas to
oxygen free the systems and subsystems, commencement of the drying out process
and tightness tests performed with inert gas at operating pressures, as further
set forth in Attachment A and the performance and completion of the activities
or the Commissioning checklists agreed to by Owner and Contractor.

Commissioning Spare Parts

 

Spare parts for pre-commissioning, Commissioning, testing and start-up
activities required to achieve Substantial Completion

Page 7 of 68

 

Term

    

Definition

Common Systems

 

Those portions of the Facility that will be utilized by both Train 1 and Train
2, including, for example, certain utilities, instruments, control systems and
piping.  The applicable Common Systems will be designed, procured and
constructed such that both Train 1 and Train 2 may be operated simultaneously or
individually at the design conditions set forth in this Agreement.  The Common
Systems are set forth in this Attachment A.

Construction Equipment

 

The equipment, machinery, temporary structures, scaffolding, materials, tools,
supplies and systems, purchased, owned, rented or leased by Contractor or its
Subcontractors or Sub-subcontractors for use in accomplishing the Work, but not
intended for incorporation into the Facility.

Contractor

 

Bechtel Oil, Gas and Chemicals, Inc.

Day

 

A calendar day

Drawings

 

The graphic and pictorial documents (in written or electronic format) showing
the design, location and dimensions of the Work, generally including plans,
elevations, sections, details, schedules and diagrams, which are prepared as a
part of and during the performance of the Work.

EDMS

 

Electronic data management systems

EPC

 

Engineering, Procurement, Construction and Commissioning.

EPC Work

 

See “Work” below

Equipment

 

All equipment, materials, supplies and systems required for the completion of
and incorporation into the Facility.  Equipment excludes Construction Equipment.

Facility

 

A greenfield turnkey liquefied natural gas (“LNG”) liquefaction facility and
export terminal, consisting of two (2) liquefaction units, each having an
aggregate nominal LNG production capacity of up to approximately [***] million
metric tonnes per annum (“mtpa”) and associated facilities, for the purpose of
liquefying natural gas to form LNG, including feed gas treatment facilities, and
all systems and infrastructure, including temporary facilities, from the feed
gas pipeline tie-in to storage and marine facilities and the loading arms, and
all related appurtenances thereto, as further described in the EPC Agreement and
attachments.

FEED

 

Front End Engineering Design or Basic Engineering

FERC

 

Federal Energy Regulatory Commission

Page 8 of 68

 

Term

    

Definition

GECP or Good Engineering and Construction Practices

 

The generally recognized and accepted reasonable and prudent practices, methods,
skill, care, techniques and standards employed by the international LNG
liquefaction and storage engineering and construction industries with respect
to: (i) the engineering, procurement, construction, pre-commissioning,
Commissioning, testing and start-up of natural gas liquefaction and storage
facilities of similar size and type as the Facility and in accordance with
Applicable Codes and Standards and Applicable Law; (ii) personnel and facility
safety and environmental protection; (iii) efficient scheduling of the Work; and
(iv) the reliability and availability of the Facility under the operating
conditions reasonably expected at the Site, as specified in this Attachment A. 

Governmental Instrumentality

 

Any federal, state or local department, office, instrumentality, agency,
authority, board or commission having jurisdiction over a Party or any portion
of the Work, the Facility or the Site.

HAZID

 

Hazard identification

HAZOP

 

Hazardous operations

ICSS

 

Integrated Control and Safety System

Industrial Cyber Security System

 

Software used to mitigate cyber threats and attacks.

IT

 

Information technology

Jetty

 

Jetty is as defined and used in the LNG industry. It is also used
interchangeably with “Berth” in this SOW.

Marine Facilities

 

The marine facilities as detailed in 195910-000-MFNL-DB-1001. 

Material Selection Diagrams

 

Drawing which shows material selection information and Specification.

Page 9 of 68

 

Term

    

Definition

Mechanical Completion

 

With respect to (a) the applicable system or subsystem of the Equipment or (b) a
Train, that, with the exception of Punchlist items, all of the following have
occurred: (i) Contractor has completed all design, procurement, fabrication,
assembly, erection, installation and pre-commissioning of all Equipment
(including all systems and components of Equipment, such as all operating,
protection, fire, safety and other related systems required or necessary prior
to start-up) for such applicable system or subsystem of the Equipment or a Train
to ensure that all such Equipment or Train was correctly fabricated, assembled,
erected, installed, tested and pre-commissioned and is capable of being operated
safely and reliably within the requirements and specifications contained in this
Agreement, all as set forth in greater detail in Attachment A and the Mechanical
Completion checklists agreed by Owner and Contractor in accordance with Section
11.1A; (ii) the applicable system, subsystem of Equipment or Trains ready for
the commencement of Commissioning; (iii) Contractor and Owner have agreed upon
an initial Punchlist of items as set forth in Section 11.6; (iv) Contractor has
delivered to Owner a Mechanical Completion Certificate for the applicable system
or subsystem or Train in the form of Schedule L-1 and Owner has accepted such
certificate by signing such certificate; and (v) performance by Contractor of
all other obligations required under this Agreement for Mechanical Completion.

MCHE

 

Main Cryogenic Heat Exchanger

Minimum Acceptance Criteria

 

The minimum acceptance criteria specified in Attachment T.

NDT

 

Non-destructive testing

Noise Philosophies

 

The philosophy that describes the requirements for noise control for the
Facility.

OREDA

 

Offshore and onshore reliability data.

Party or Parties

 

Rio Grande LNG, LLC a limited liability company organized under the laws of
Texas, and/or Bechtel Oil, Gas and Chemicals, Inc., a corporation organized
under the laws of Delaware, as the circumstance requires.

Performance Guarantees

 

The performance guarantees specified in the EPC Agreement.

Page 10 of 68

 

Term

    

Definition

Performance Tests

 

Those tests performed by Contractor to determine whether the Facility meets the
Performance Guarantees and Minimum Acceptance Criteria, which tests shall be set
forth in Attachment S and, to the extent not specified therein, as developed in
accordance with Section 11.3 of the EPC Agreement.

Permanent Buildings

 

Permanent Buildings shall mean those buildings listed in Buildings List
195910-000-CA-LI-1001 referenced in the BOD required to be constructed for
operation of Train 1 and Train 2.

Permit

 

Any valid waiver, certificate, approval, consent, license, exemption, variance,
franchise, permit, authorization or similar order or authorization from any
Governmental Instrumentality required to be obtained or maintained in connection
with the Facility, the Site or the Work.

Person

 

Any individual, company, joint venture, corporation, partnership, association,
joint stock company, limited liability company, trust, estate, unincorporated
organization, Governmental Instrumentality or other entity having legal
capacity.

Priced Options

 

Optional additional facilities which may be selected during execution of the
Facility, and comprising a third tank, a second jetty and LNG truck loading
facilities.

Punchlist

 

Those finishing items required to complete the Work, the completion of which
shall not interrupt, disrupt or interfere with the safe and reliable operation
or use of all or any part of the Facility as contemplated by the EPC Agreement,
as more fully described in Section 11.6 of the EPC Agreement.

Project

 

The engineering, design, procurement, manufacturing, fabrication, assembly,
transportation and delivery of Equipment, construction, pre-commissioning,
Commissioning, testing and start-up of the Facility and all other Work required
to be performed under the EPC Agreement.

Project Philosophies

 

Engineering design documents defining the engineering and design philosophies to
be embodied in the design engineering, construction and operating requirements
for the Facilities developed during FEED engineering studies as referenced in
the BOD.

Project Requirements

 

The Applicable Codes and Standards, Project Philosophies, and Specifications as
described in the BOD

Quality Management System (QMS)

 

Integrated suite of quality assurance plans, procedures and working practices
aimed at delivering Project quality.

Page 11 of 68

 

Term

    

Definition

RAM

 

Reliability and Maintenance

Record As-Built Drawings and Specifications

 

Final, record Drawings and Specifications of the Facility showing the “as-built”
conditions of the completed Facility

Ready for Start-up or RFSU

 

With respect to each Train, that all of the following have occurred: (i)
Contractor has achieved Mechanical Completion of such Train, including
Mechanical Completion of all systems and subsystems of Equipment for such Train;
(ii) all activities necessary to support the introduction of hydrocarbons,
including all utility and process utility, safeguarding and shutdown systems
have been pre-commissioned, commissioned and integrity verified; (iii)
Commissioning is complete, cool down can commence for such Train, and such Train
is ready for startup and acceptance of feed gas; (iv) Equipment vendor
representatives and other specialist Subcontractors required to support RFSU and
early operations are mobilized at the Site; (v) Contractor has delivered to
Owner a RFSU Certificate in the form of Schedule L-3 and Owner has accepted such
certificate by signing such certificate; and (vi) performance by Contractor of
all other obligations required under this Agreement for RFSU of such Train. 

Page 12 of 68

 

Term

    

Definition

Ready to Load First Cargo or RLFC

 

That all of the following have occurred with respect to the applicable Train:
(i) Contractor has achieved and maintained RFSU for such Train; (ii) the
applicable LNG Storage Tank(s) designated to be completed as part of such Train
have been successfully cooled down and is operating normally with LNG stored in
such tank(s); (iii) such Train has liquefied natural gas into LNG meeting all
specifications and requirements of this Agreement (other than the Minimum
Acceptance Criteria and Performance Guarantees) and successfully transferred and
stored such LNG into the applicable LNG Storage Tank(s); (iv) the LNG Storage
Tank(s) and all LNG loading and unloading lines (and equipment and systems
related thereto) necessary for transfer of LNG from such LNG Storage Tank(s) to
the loading dock have been cooled down and filled with LNG while remaining at
cryogenic temperatures via circulation to the LNG berth and are ready for
transfer of LNG to an LNG Tanker and for return of vapor and boil-off gas to the
LNG tanks, and the loading dock or berth have successfully passed and Owner has
approved the pre-LNG arrived berth readiness review; (v) LNG is ready for
delivery to, and capable of being delivered to and loaded into, an LNG Tanker
via the loading dock; (vi) Contractor has delivered to Owner an RLFC Certificate
for such Train in the form of Schedule L-4 and Owner has accepted such
certificate by signing such certificate; and (vii) performance by Contractor of
all other obligations required under this Agreement for RLFC of such Train.

Rio Bravo Pipeline custody transfer battery limit metering station

 

Rio Bravo Pipeline receiving Project comprising Pipeline Receivers, Separators,
Metering, and HIPPS, to be supplied and constructed by others.

SEAMS

 

Safety and environmental action management system

SIL

 

Safety integrity level

Site

 

Those parcels of land where the Facility shall be located, as shown in greater
detail in Attachment Z.  For the avoidance of doubt, the Site does not include
any restricted areas designated in Attachment Z.

Spare Parts

 

Commissioning spare parts, Capital Spare Parts and Operating Spare Parts

Specifications

 

Those documents consisting of the written requirements for Equipment, standards
and workmanship for the Work and performance of related services, which are
prepared as a part of and during the performance of the Work.

Page 13 of 68

 

Term

    

Definition

Subcontract

 

An agreement by Contractor with a Subcontractor for the performance of any
portion of the Work.

Subcontractor

 

Any Person (other than an Affiliate of Contractor), including an Equipment
supplier or vendor, who has a direct contract with Contractor to manufacture or
supply Equipment which is a portion of the Work, to lease Construction Equipment
to Contractor in connection with the Work, to perform a portion of the Work or
to otherwise furnish labor or materials. 

Sub-subcontractor

 

Any Person (other than an Affiliate of Contractor), including an Equipment
supplier or vendor, who has a direct or indirect contract with a Subcontractor
or another Sub-subcontractor to manufacture or supply Equipment which comprises
a portion of the Work, to perform a portion of the Work or to otherwise furnish
labor, materials or equipment (including Equipment).

Page 14 of 68

 

Term

    

Definition

Substantial Completion or SC

 

That all of the following have occurred with respect to a Train: (i) Mechanical
Completion of such Train, including Mechanical Completion of all systems and
subsystems of Equipment of such Train; (ii) RFSU has been achieved for such
Train; (iii) RLFC has been achieved for such Train; (iv) all Minimum Acceptance
Criteria have been achieved; (v) in the case that all Performance Guarantees
have not been achieved, Owner has accepted (such acceptance not to be
unreasonably withheld) Contractor’s corrective work plan, and Contractor has
turned over the Train pursuant to Section 11.5A; (vi) Contractor and Owner have
agreed upon a list of Punchlist items as set forth in Section 11.6; (vii) any
Delay Liquidated Damages due and owing have been paid to Owner in accordance
with Section 13.2; (viii) the entire Work related to such Train (including
training and the delivery of all documentation, manuals and instruction books
necessary for safe and proper operation) has been completed, except for
Punchlist items, in accordance with the requirements and Specifications of this
Agreement; (ix) Contractor has delivered to Owner all Capital Spare Parts for
such Train in accordance with Section 3.4B; (x) Contractor has delivered to
Owner the applicable Substantial Completion Certificate in the form of Schedule
L-5 and as required under Section 11.3 and Owner has accepted such certificate
by signing such certificate; (xi) such Train is available for commercial
operation in accordance with the requirements of this Agreement, and with
respect to Substantial Completion of Train 2, Train 2 has been integrated with
Train 1; (xii) Contractor has obtained all Permits required to be obtained by
Contractor under this Agreement; and (xiii) Contractor has delivered to Owner a
fully executed Interim Lien and Claim Waiver in the form of Schedules K-1 and
K-2, fully executed Interim Lien and Claim Waivers from all Major Subcontractors
in the form of Schedules K-3 and K-4 and, if requested by Owner, fully executed
Interim Lien and Claim Waivers from all Major Sub-subcontractors substantially
in the form of Schedules K-3 and K-4, covering all Work up to the date of
Substantial Completion. 

TBE

 

Technical bid evaluation

Page 15 of 68

 

Term

    

Definition

Train 1

 

The first phase of the Work to be designed, procured, constructed,
pre-commissioned, Commissioned, started up and tested for the Facility,
including a nominal [***] mtpa natural gas liquefaction unit, a comparably-sized
natural gas pretreatment unit, LNG Storage Tank 1 and Tank 2, an LNG loading
dock and marine structures capable of berthing and loading LNG Tankers with
capacities from 125,000 m3 to 185,000 m3, the Common Systems necessary to
operate Train 1, the control room and other systems.

Train 2

 

The second phase of the Work to be designed, procured, constructed,
pre-commissioned, Commissioned, started up and tested for the Facility,
including a nominal [***] mtpa  natural gas liquefaction unit, a
comparably-sized natural gas pretreatment unit, the Common Systems necessary to
operate Train 2 (but not needed for Train 1) and other systems.

Unit

 

An individual, and complete process component which is regarded as a single
entity, but which can also form an individual component of a larger, more
complex system.

UPS

 

Uninterrupted Power Supply

Work

 

All obligations, duties and responsibilities required of Contractor pursuant to
this Agreement, including all Equipment, Construction Equipment, spare parts,
procurement, engineering, design, fabrication, erection, installation,
manufacture, delivery, transportation, storage, construction, workmanship,
labor, pre-commissioning, Commissioning, inspection, training, Performance
Tests, other tests, start-up and any other services, work or things furnished or
used or required to be furnished or used, by Contractor in the performance of
this Agreement, including that set forth in Attachment A and Section 3.1A and
any Corrective Work.  For the avoidance of doubt, the Work shall include the
Train 1 Work and the Train 2 Work.

(W)PQR

 

(Weld) Procedure Qualification Record

WPS

 

Weld Procedure Specification

 

4.0         OWNERS EXECUTION PHILOSOPHY

Key philosophies and guiding principles that Owner strives to adopt for the
Project are discussed in this section.

4.1         PROJECT MANAGEMENT

·

Contractor and Owner shall work together in an open, transparent, and
cooperative manner in the interest of the Project to deliver a Project that is
successful for both Parties;

·

Contractor and Owner shall work together to minimize risk exposure for both
Parties;

Page 16 of 68

 

·

Owner’s Project team shall be structured on a lean, fit- for-purpose basis,
applying spot checks in witness points and selective audits. It shall be
structured to engage with the Contractor’s team in an efficient manner;

·

Contractor shall submit to Owner a Project Execution Plan which details their
organization structure (e.g. sole execution or joint venture, construction
management team / Subcontractor), number and location of operating centers, and
modular versus stick-built erection);

·

After the Effective Date of the EPC contract, the Owner and its advisors as well
as representatives from Owner’s insurers and Lenders, have the right to access
all areas in the operating centers (home office, fabrication facilities and
Site) where Work is under control or being performed by Contractor without
obtaining Contractor’s permission. As such those accessing shall comply with
prevailing safety and security regulations; and

·

Contractor shall turn over specified Drawings, Specifications and other design
documents, construction documents and databases, that are to be delivered to
Owner, including the 3D model, in native format as part of the Facility
turnover.

4.2         HEALTH, SAFETY AND SECURITY

·

Contractor shall comply with all obligations found in the Agreement, as well as
local safety regulations for all operating centers (home office, engineering
centers, fabrication facilities and Site) as a minimum;

·

Contractor shall supply Owner with a copy of their HSSE philosophies and derived
policies;

·

Contractor shall update their most recent OSHA 300 Safety Logs covering the last
3 years prior to bid submission;

·

All Project related safety statistics shall be included in the Contractor’s
weekly and monthly reports;

·

Contractor shall conduct safety audits during the life of the Project and
provide summaries of the results to Owner;

·

Design and construction method selections shall incorporate related safety
aspects;

·

Owner shall be invited to be an active participant in all safety audits and
shall be involved in all incident investigations with appropriate provisions are
made to preserve applicable legal privileges;

·

The design shall take into consideration ergonomics; and

·

SIMOPS requirements to be addressed.

4.3         ENVIRONMENTAL

·

Contractor shall demonstrate compliance with all environmental requirements for
air, water and noise emissions and select engineering, construction and
logistics solutions that minimize the impact on the environment and surrounding
infrastructure as far as practical, and within the limits as stipulated in the
Permits; and

·

Contractor shall have a well-developed environmental management plan with
execution strategies for dealing with emergency and adverse weather events.

4.4         PERMITTING

·

Contractor shall support all Permit filings as required.

4.5         QUALITY

·

Contractor shall provide for Owner’s review an external audit schedule within
[***] ([***]) Days of LNTP.

·

Owner shall have access to review external & internal quality audit
noncompliances and close-out actions, except those that have a commercial
nature.

Page 17 of 68

 

4.6         COST AND SCHEDULE BALANCE

·

Contractor shall propose an execution plan which provides optimal overall cost
given schedule constraints.

4.7         COMMERCIAL

·

Contractor shall make full use of frame work agreements, master service
agreements and master purchase agreements put in place by Owner; and

4.8         ENGINEERING

·

Parties shall strive to minimize change to the Project once the EPC contract has
been executed. The ultimate goal shall be to limit changes to those required by
regulations or changes in legislation. Contractor shall utilize an efficient and
robust change management process for the benefit of both Parties. This shall
also ease the processing of detailed work packages and change management with
FERC;

·

Owner shall have ongoing access to EPC design and construction records for
review purposes through the Contractor’s electronic data management system;

·

Design shall comply with codes, standards and Applicable Law;

·

GECP level of plant automation and state-of-the-art plant condition monitoring,
to support a lean operations and maintenance Owner’s team;

·

GECP level of overall Facility availability;

·

Design considerations include: ability to construct, commission, test, operate
and maintain the Facility in a safe and efficient manner; and

·

Equipment design and selection shall respect the desire to avoid excessive
maintenance. Owner desires Contractor to include in the selection the life-cycle
cost.

4.9         CONSTRUCTION MANAGEMENT, STARTUP AND OPERATIONS

·

In addition to the design, engineering and construction of the Facility,
Contractor shall be expected to start-up, maintain and operate the Facility
through SC of Train 1, Train 2 and any selected options. Activities include:

1.

Preparation of training, maintenance and operations manuals;

2.

Training of Owner operations and maintenance personnel;

3.

Supervision of Owners operations and maintenance personnel;

4.

Commissioning;

5.

Start-up;

6.

Initial operations;

7.

Performance Tests and operations tests;

8.

Maintenance and upkeep of the Site and Facility until SC is achieved; and

9.

Loading of Equipment and plant data, inclusive of baseline readings, into
applicable plant integrity and maintenance management systems in time to work
with these support systems from Ready for Start Up (“RFSU”).

·

Owner shall have the right to occupy and make use of the permanent buildings at
an agreed upon time with Contractor in advance of SC of Train 1.

4.10       COMMUNITY AND STAKEHOLDER ENGAGEMENT

·

Contractor shall implement a community engagement program which takes into
consideration active participation of the local vendors and contractors; and

·

Contractor shall work together with Owner in local and regional stake holder
interactions.

Page 18 of 68

 

4.11       REPORTING

·

Contractor shall provide, but not limited to the below, reports subject to those
defined within the EPC Agreement executed between Owner and Contractor;

·

Contractor shall inform Owner and provide copies of any communications with
applicable Governmental Instrumentalities;

·

Contractor shall supply all required information to support Owner tax-related
filings; and

·

Contractor shall submit comprehensive and transparent progress reports.

 

5.0          EPC AGREEMENT REFERENCE DOCUMENT LIST

The EPC Agreement will have two sets of reference documents:

             Documents listed in the BOD, Appendix 5, and

             A complete set of verified FEED documents

6.0          SCOPE OF FACILITIES

The scope of Contractor supplied facilities shall include the facilities for
Train 1, Train 2 and Common Systems as listed below, as further defined in this
SOW hereafter, and as described in the BOD.

Train 1 facilities:

             Natural gas pretreatment units, including:

             Acid gas removal unit (includes H2S scavenging & mercury removal),
([***]);

             Dehydration unit ([***]);

The specification of treated gas exiting the dehydration unit shall be as per
the BOD and Process Design Basis);

             Heavies Removal Units (HRU), ([***]); and

The specification of treated gas exiting the dehydration unit shall be as per
the BOD and Process Design Basis);

             Natural gas liquefaction unit, including:

           Refrigeration, ([***]);

           Compressor string A, ([***]);

           Compressor string B, ([***]); and

           Liquefaction, ([***])

             LNG Train 1 North Substation, [***]

             LER-[***]

             Train 1 ASDS Substation 1, [***]

             Train 1 ASDS Substation 2, [***]

             Train 1 Recompressor ASDS Substation, [***]

             LNG Train 1 South Substation, [***]

             LNG Train Main Rack

             LNG Train 1 Underground Works

             LNG Storage Tank 1, ([***]);

             LNG Storage Tank 2, ([***]);

             LNG Storage Area facilities common to LNG Storage Tank 1 and LNG
Storage Tank 2

             LNG Rundown and Loading Pipe Racks for LNG Storage Tanks 1 and 2

             Tie-ins for expansion to Train 2 rundown, additional LNG storage,
and Jetty 2, to facilitate expansion without disrupting operations.

Page 19 of 68

 

 

             LNG marine loading facilities, including:

             Berth Pocket and Turning Basin non-dredging scope (dry excavation
of approximately [***] cubic yards)

             Jetty 1, including land-based piling and shoreline protection

             Jetty 2, limited to land-based head piling and concrete caps for
monopiles and loading platform bulkhead wall, including land-based piling and
shoreline protection

             Jetty Head 1

             Jetty 1 Monitoring Building / Substation ([***]), [***]

             LNG marine loading facilities common to the above

             Shoreline protection

             Common Systems and infrastructure required for the operation of
Train 1, including:

             Feed gas supply line from the battery limit of the Rio Bravo
custody metering battery limit station to LNG Train 1 battery limit valve,
([***]). Line carries tie-in provisions to also feed Train 2 and Train 3.

             Propane and Ethane Refrigerant storage, purification and truck
unloading facilities, ([***]), designed to serve the full masterplan;

             Condensate storage facility, ([***]), designed to serve the full
masterplan;

             Condensate truck loading facility, ([***]),

             Racks for piping to/from refrigerant and condensate storage
facilities, and condensate truck loading facility,

             Boil-off gas compression facilities for Train 1 and Train 2 with
two compressor sets installed and ready for operation at RFSU Train 1, ([***]),

             LNG Tank and Ship BOG Vent, ([***]), serving full masterplan;

             BOG Rack to/from boil-off gas compressors, ([***]),

             BOG Compressor & Truck Loading Substation, [***], equipped for the
above facilities only.

             Ground Flare system, including:

             Wet and Dry Gas Ground Flare Box 1, ([***]), Phase 1 Wet Gas Flare
KO Drum, [***], and Phase 1 Dry Gas Flare KO Drum, [***], and associated
Equipment),

             Facilities common to the above,

             Main East–West Pipe-rack and track

             Utility Systems, including the following. (Equipment items
required for operation of Train 1 and Train 2 are indicated in Major Equipment
List, 26210-000-M0X-0000-00001):

§

Essential Power Generation Systems including the following:

§

Essential power generators, ([***]) (two units for Train 1 and 2)

§

Essential & Firewater Substation, [***], equipped to serve Train 1 Equipment and
systems

§

Essential Power Distribution to Train 1 users

§

Water Storage and Water Supply Systems, comprising the following:

§

Fresh water system, ([***])

Potable quality fresh water shall be supplied to the Facility by third-party.
Interface point and date of supply by Owner.

§

Drinking water system, ([***]), serving the full masterplan development;

§

Demineralized water system, ([***]), tank designed for 6 trains, unit sized for
the operations of 3 trains, but expandable for full masterplan;

§

Firewater, firefighting and safety systems, ([***]), serving Train 1 facilities,
serving the full masterplan, but distribution extended for each staged
development

Page 20 of 68

 

§

Seawater intake system for back-up fire water supply, ([***]), serving the full
masterplan

§

Plant and instrument air system, ([***]), sized to serve initially 3 Trains;

§

Nitrogen distribution system, ([***]), sized to serve initially up to 3 Trains.

Generation and supply will be from third-party facility located in the Facility.

Interface point and date of supply by Owner.

Contractor scope for third party nitrogen supply facility shall be as described
in section 22.6 hereafter.

§

Fuel gas system, ([***])

§

Utilities Substation 1, [***], sized to serve 3 Trains

§

Electric power distribution and lighting systems serving Train 1 and extended
for Train 2

138 kV power will be supplied from AEP Pompano Compound.

Interface point and date of supply by Owner.

           Amine storage and Hot Oil Storage, including (serving full
masterplan):

§

Amine Storage, ([***]),

§

Hot Oil Storage, ([***]),

           Refrigerant storage, purification and truck unloading, [***],
(serving full masterplan);

           Common Infrastructure for the Facility, including:

§

Permanent architectural buildings, comprising the following:

§

Security Building

§

Warehouse

§

Workshop & Laboratory Building

§

Fire Truck Garage

§

Central Control Building Substation, [***]

§

Administration Building Substation, [***]

§

Canteen, Visitor and Training Center

§

Chemical Storage Building

§

Industrial Buildings Area Substation, [***]

§

Main Intake Station 1, [***] for Trains 1 and Train 2, supporting also power
distribution to the masterplan utilities, general buildings, BOG handling and
storage & loading facilities.

§

MOF Area Substation, [***], including local equipment room,

§

The following local equipment rooms equipped initially only for Train 1 and
Train 2 facilities:

§

LER [***], BOG, Condensate and Refrigerant Storage

§

LER [***], Utilities and Firewater

§

LER [***], Ground Flare

§

LER [***], Condensate and LNG Road Tanker Loading

§

TER [***], Telecommunication Equipment Room (North-West)

§

Process control, safety control and telecommunications systems for Train 1 and
Train 2

§

Security and access control system;

§

Levee, the complete levee will be constructed to also provide protected laydown
and temporary facilities area west of the first Trains under construction;

§

MOF, the MOF shall be of permanent construction for use during later phases of
Facility construction and for use when necessary during the operating phase of
the Facility.

Page 21 of 68

 

§

Site roads,

§

Fencing

§

Contractor shall procure, assemble, and install all security and perimeter
fencing as indicated on Unit Plot Plans, Overall Plot Plan, and other relevant
project drawings and specifications;

§

Contractor shall remove and dispose of any existing fencing on the north and
south side of the Site after installation of perimeter and security fencing
around the entire Site;

Texas State Highway 48 modifications with 2 road junctions. Contractor shall
provide suitable protection for third party services where Site access roads
cross the utilities corridor.  Note: Owner shall interface with Texas DOT to
obtain Highway 48 permit(s) based on detailed design data provided by
Contractor;

§

EPC Contractor shall identify, engineer, obtain permits (or assist Owner in
obtaining permits in the event such permits are to be applied for by Owner), and
install any temporary access roads required for performing its scope of Work to
construct the facilities.  When such access roads are no longer required the
affected area shall be returned to its original condition if outside the Site
boundary;

§

Surface water drainage systems segregated by source, or potential contamination;

§

Effluent water treatment, [***] (primary treatment only – including Holding
Ponds and Outfalls, and First Flush Basins for Train 1 and 2);

§

Sanitary effluent collection and pump-out, [***] (discharge to third-party at
Facility fence-line for offsite treatment and disposal, interface point and date
of supply by Owner); and

            Temporary Facilities required for construction and initial
operation of the facilities.

Train 2 facilities:

Train 2 is an identical copy of Train 1 LNG liquefaction and pre-treatment
facilities, and ties into to a common NG supply, LNG and condensate run-down
lines, and is connected to extended utilities distribution and process control.
The scope includes amongst others:

             Natural gas pretreatment units, including:

             Acid gas removal unit (including H2S scavenging & Hg removal),
([***]),

             Dehydration unit ([***])

The specification of treated gas exiting the Dehydration Unit shall be pursuant
to the BOD and the Process Design Basis,

           HRU, ([***])

             Natural gas liquefaction unit, including:

             Refrigeration, ([***]),

             Compressor string A, ([***]),

             Compressor string B, ([***]),

             Liquefaction, ([***])

             Common Systems and infrastructure Equipment required for the
operation of Train 2 but not required for the operation of Train 1, as indicated
in Major Equipment List, 195910-000-PE-LI-1010), such as:

     Wet and Dry Gas Ground Flare Box 2, ([***])

     AGRU oxidizer to similar design as in train 1 to also handle condensate
storage vapor return, similar to train 1. Oxidizers for trains 3 to 6 are not
designed to treat condensate storage vapor returns;

Page 22 of 68

 

 

     Extended electrical power distribution, ICSS, and Telecoms network,
inclusive CCB added Equipment;

     Site drainage system;

     Fire water and utilities distribution extensions;

     Roads and paving to serve the train 2 area.

     Additional detail:

     Train 2 North Substation, [***]

     LER-[***]

     Train 2 South Substation, [***],

     Train 2 ASDS Substation 1, [***]

     Train 2 ASDS Substation 2, [***]

     Train 2 Recompressor ASDS Substation, [***]

7.0         CONTRACTOR SCOPE OF WORK

Contractor shall perform the Work described in this SOW in accordance with the
requirements of the EPC Agreement.

7.1         HOME OFFICE SERVICES

Contractor shall include but not be limited to providing the following home
office services:

             Project Management and Administration (Refer to Section 8 of this
SOW);

             Quality Assurance (Refer to Section 9 of this SOW);

             Engineering (Refer to Section 10 of this SOW);

             Engineering by specialist third-party consultants required to
support and/or validate Contractor’s engineering design (Refer to Section 11 of
this SOW); and

            Procurement (Refer to Section 12 of this SOW).

7.2        SUPPLY OF EQUIPMENT AND MATERIALS REQUIRED TO CONSTRUCT THE FACILITY

Contractor shall include but not be limited to supplying Equipment required to
construct the Facility, including the following:

            All tagged Equipment (Refer to Section 12.6 of this SOW);

            Bulk material items to be incorporated as part of the permanent
works (Refer to Section 12.7 of this SOW);

            Spare parts (Refer to Section 12.8 of this SOW);

            Catalysts and chemicals (Refer to Section 12.9.1 of this SOW);

            Oils and lubricants (Refer to Section 12.9.2 of this SOW);

            Furnishings, fittings and special Equipment for installation within
Facility buildings (Refer to Section 12.10.1 of this SOW);

            Workshop Equipment (Refer to Section 12.10.2 of this SOW);

            Portable firefighting and miscellaneous safety Equipment (Refer to
Section 12.10.3 of this SOW); and

            Plant mobile Equipment (Refer to Section 12.10.4 of this SOW).

7.3          TRAFFIC AND LOGISTICS SERVICES

Contractor shall include but not be limited to providing the traffic and
logistic services defined in Section 12.11 of this SOW.

Page 23 of 68

 

7.4          MATERIALS MANAGEMENT SERVICES

Contractor shall include but not be limited to providing the materials
management services defined in Section 13 of this SOW.

7.5          SUBCONTRACTED SERVICES

Contractor shall include but not be limited to providing the subcontracted
services defined in Section 14 of this SOW.

7.6          SERVICES REQUIRED TO CONSTRUCT THE FACILITY

Contractor shall include but not be limited to providing the construction
services required to construct the Facility listed in Section 6 of this SOW.

            General (Refer to Section 15.1 of this SOW);

            Summary construction scope of work (Refer to Section 15.2 of this
SOW);

            Rules & regulations (Refer to Section 15.3 of this SOW);

            Community awareness (Refer to Section 15.4 of this SOW);

            Construction direct labor (Refer to Section 15.5 of this SOW);

            Provision of construction plant and equipment required to build the
facilities (Refer to Section 15.6 of this SOW);

            Supply of the construction consumables (Refer to Section 15.7 of
this SOW);

            Subcontracts for the supply and erection of Equipment and materials
forming part of the Project (Refer to Section 15.8 of this SOW);

            Preparation of the Site for construction, including construction of
site access via two highway junctions, site clearance, cut and fill, soil
improvement and piling and construction of the levee (Refer to Section 15.9 of
this SOW);

            Subcontract for the construction of the required marine works
(Refer to Section 15.10 of this SOW);

            Construction of the LNG loading berth and dredging and construction
of the MOF (Refer to Section 15.10 of this SOW);

            Supply of the construction utilities, including fresh water supply
and construction power supply: (Refer to Section 15.11 of this SOW);

            Sewage disposal (Refer to Section 15.11 of this SOW);

            Waste material handling and disposal (Refer to Section 15.12 of
this SOW);

            Provision of Site security (Refer to Section 15.13 of this SOW);

            Provision of heavy lift equipment (Refer to Section 15.14 of this
SOW);

            Temporary facilities required to support construction and
Commissioning of the facilities (Refer to Section 15.15 of this SOW);

            Provision of Construction Equipment (Refer to Section 15.16 of this
SOW);

            Provision of Contractor’s construction permits (Refer to Section
15.17 of this SOW); and

7.7          PRECOMISSIONING AND COMMISSIONING SERVICES

Contractor shall include but not be limited to providing pre-commissioning and
Commissioning services as follows:

            General (Refer to Section 16.1 of this SOW);

            Commencement of Commissioning and start-up (Refer to Section 16.2
of this SOW);

            Performance Tests to demonstrate that the facilities meet the
Performance Guarantees and Minimum Acceptance Criteria. Performance Tests shall
be carried out in accordance with the requirements stated in the EPC Agreement;

            Preparation of operations management procedures (Refer to Section
18.2 of this SOW);

Page 24 of 68

 

            Preparation of Site security procedures (Refer to Section 15.13 of
this SOW);

            Preparation of maintenance procedures (Refer to Section 18.3.1 of
this SOW);

            Preparation of statutory maintenance and inspection procedures
(Refer to Section 18.3.2 of this SOW);

            Preparation of pre-commissioning and Commissioning instructions
(Refer to Section 19.0 of this SOW);

            Preparation of start-up, operations and shut-down materials (Refer
to Section 19.0 of this SOW); and

            Preparation of operation and maintenance procedures (Refer to
Section 19.0 of this SOW).

7.8          SIMOPS

Contractor shall ensure simultaneous operations provisions (Refer to Section 17
of this SOW). The overall design philosophy shall include the provision of
tie-ins to allow sequential expansion of the Expanded Facility without the need
for extensive and complete shutdowns of operations.

7.9          TRAINING OF OWNER PERSONNEL

Contractor shall include but not be limited to provide training for Owner
personnel as detailed in Section 20 of this SOW.

7.10        ASSISTANCE TO OWNER

Contractor shall include but not be limited to the following assistance to
Owner:

            Input for regulatory submissions by the Owner (Refer to Section
21.1 of this SOW); and

            Technical support for Owner’s regulatory consultants (Refer to
Section 21.2 of this SOW)

            Home office services for spare parts with reference to the Spares
Philosophy which contains estimated lists.

            Labor statistics on extent of actual local content to allow Owner
to interact with Cameron County on property tax and possible rebates.

            Contractor is to include in its Monthly Progress Reports the local
labor content percentage as of the reporting period in the applicable month for
the Project through the latest reporting period. [***].

7.11        THIRD-PARTY INTERFACES

Contractor shall include but not be limited to work with respect to Project
third-party interfaces as described in Section 22 of this SOW.

7.12        FACILITIES FOR OWNER PERSONNEL

Contractor shall include but not be limited to providing the following
facilities for Owner’s personnel:

            Office accommodations for Owner personnel in Contractor’s home
office (Refer to Section 23.1 of this SOW); and

            Office accommodations for Owner personnel at Site (Refer to Section
23.2 of this SOW).

7.13        PERFORMANCE TESTS

Contractor shall undertake performance testing of the completed facilities as
detailed in Section 24 of this SOW.

7.14        PROCESS LICENSE FEES

Contractor shall include the cost of third-party process license fees as
detailed in Section 25 of this SOW.

Page 25 of 68

 

7.15        RECORD AS-BUILT DRAWINGS AND SPECIFICATIONS

Contractor shall update Drawings and Specifications to Record As-Built status as
indicated under Section 26 of this SOW.

7.16        HANDOVER DOCUMENTATION

Contractor shall provide documentation as described in Section 27 of this SOW.

7.17        INFORMATION SYSTEMS FOR OWNER USE

Contractor shall specify and set up information software systems for Owner’s use
following handover as described under Section 28 of this SOW.

7.18        EXCLUSIONS FROM CONTRACTOR’S SCOPE OF WORK

Exclusions from Contractor’s SOW are listed under Section 29.

8.0         PROJECT MANAGEMENT AND ADMINISTRATION

Contractor shall assign a qualified and experienced Project management team for
effective control and coordination of all aspects of Project execution
throughout all phases of EPC execution through to contract closeout.

Contractor shall maintain a Project-specific EPC Project Execution Plan. The EPC
Project Execution Plan shall be a comprehensive project management document that
describes the overall execution strategy for the Project; establishes the
methods by which the Contractor executes, monitors, and controls the Project;
and consolidates the integration of a number of discrete function specific
execution plans created for managing all elements of the Project execution.

[***].

9.0         QUALITY ASSURANCE

Contractor shall prepare and implement a Project-specific quality plan approved
by Owner.  The Plan shall define the Quality Assurance (QA) and Quality Control
(QC) services that will be carried out by Contractor during the Engineering,
Procurement and Construction (EPC) phase of the Project to design, build,
commission and start-up a safe, legally complaint, repeatable, and fully
functional Facility.  The quality plan will comply with the requirements for a
quality plan stated in the EPC Agreement.

Contractor shall:

            Require that Subcontractors and Sub-Subcontractors comply with the
quality requirements in the EPC Agreement, and develop their own quality plans
that meet the intent of the requirements in the Contractor’s Quality Plan;

            Operate a quality management system throughout execution of the
Project;

            Appoint a dedicated management representative, with responsibility
for ensuring that the quality management system is maintained and implemented;

            Organize and facilitate Quality Workshops for the project team.
Owner will be invited to attend these workshops.

            Undertake quality surveillance activities and audits associated
with engineering, procurement and construction in accordance with the EPC
Agreement.

            Include in the overall Project Quality Plan the execution of two
(independent) joint PEER reviews, each lasting 1 to 2 weeks and attended by
senior staff not directly involved in the project. These shall cover:

     Detailed design & engineering close-out review when progress beyond 80%;

Page 26 of 68

 

     Pre-operations readiness review, between MC and prior to RFSU, to a) check
proper close-out on plant changes, b) spot check as-built plant line-up, c)
check available documentation to safely start-up the Plant, and d) level of
integration and training of the joint commissioning team;

            [***].

The Project quality plan shall identify a program of quality audits to be
performed. Owner will be given notification of the scope and date of planned
quality audits specified in the Project quality plan to enable Owner’s
participation in non-commercial quality audits as an observer. The quality
auditing will cover key Contractor Project activities, including the activities
of Major Subcontractors and Major Sub-subcontractors. If a noncompliance is
identified during a quality audit, Contractor shall inform Owner on the
corrective action to be taken, report status updates, and inform when the
corrective action is closed out, as part of monthly progress reporting. Where
the Contractor performs ad-hoc non-commercial internal quality audits without
invitation to the Owner, then any corrective actions and follow-up will be
shared with Owner, as part of monthly progress reporting.

10.0       ENGINEERING

10.1       GENERAL

Contractor shall perform engineering necessary to define the technical
requirements for the Facility listed under Section 6 of this SOW to the extent
necessary for the procurement of Equipment, including bulk materials and
consumables necessary to construct the Facility, and to safely construct,
commission, start-up, and operate the facilities. Technical requirements shall
be in accordance with the requirements defined within the BOD and the Project
Drawings and Specifications referenced therein plus the full set of updated
verified FEED documents.

Contractor’s engineering services shall comprise the following:

a.    Any FEED-identified actions to be performed as part of the EPC Work, e.g.,
HAZOP recommendations, SEAMS actions, etc.

b.    Contractor shall prepare engineering Drawings and Specifications or other
documentation necessary to safely construct, commission, start-up, and operate
the Facility.

c.    EPC-specific HAZOP and LOPA workshops with any items of non-conformance
with Project codes, standards, philosophies, and specifications that are
identified as being required to be implemented by Contractor;

d.    Preparation of material take-offs listing bulk materials required to
construct the permanent works;

e.    Preparation of material requisitions for the procurement of Equipment,
bulk materials and consumables required for the Work;

f.     Review and evaluation of Subcontractor quotations received, bid
conditioning, and technical recommendation for award;

g.    Review and approval of Subcontractor documentation to ensure compliance
with Project Specifications;

h.    Performance of design reviews such that the integrity, maintainability,
operability and constructability are addressed by Contractor’s engineering in
accordance with the EPC Agreement;

i.     Provision of technical assistance to Owner, as listed under Section 21 of
this SOW;

j.     Witnessing of Equipment and materials testing, and Subcontractor
performance tests where required based on criticality rating and purchase order
requirements;

k.    Recommendations for Operating Spare Parts for Owner, as listed under
Section 12.8 of this SOW;

Page 27 of 68

 

Operating spare parts exclude the Capital Spare Parts notionally listed in the
Spares Philosophy.

l.     Preparation of Record As-Built Drawings and Specifications, as listed
under Section 26 of this SOW;

m.   Preparation of handover documentation, as specified under Section 27 of
this SOW and in accordance with the EPC Agreement;

n.    Preparation of technical documentation packages for review and approval by
Governmental Instrumentalities when required to obtain necessary Permits for the
Work, as listed under Section 21.1 of this SOW;

o.    Contractor shall incorporate the latest OSHA design requirements into the
Facility and Expanded Facility design.  This includes, for example,
OSHA-required changes in handrail design; and

p.    Any other activity identified by Contractor required to perform the Work
to deliver the Project.

Contractor shall enter into and administer (i) process licenses and (ii)
technical services Subcontracts with process licensors APCI, BASF and [***] for
the LNG liquefaction, carbon dioxide removal, and HRU, respectively.

Contractor will develop and implement a safety in design program for the
detailed design of the Facility to ensure that the engineering and design
developed by the Contractor integrates elements of hazard identification and
risk assessment methods to select design solutions and details that reduce risks
of injury from construction through operations and maintenance to a level that
is as low as reasonably practical.  This program will include and be applicable
to all engineering disciplines and to all aspects of the Work and will be made
available to the Owner for review. This safety in design program shall also
encompass ergonomic reviews to ensure operability is duly considered (including
operability Model reviews).

10.2       SPECIFIC TASKS BY DISCIPLINE

Contractor shall, in addition to preparation of engineering deliverables,
perform the following discipline specific engineering tasks.

10.2.1   Process Engineering

Contractor shall prepare process engineering deliverables and documentation.

Contractor process engineering activities shall, in addition to the above,
comprise the following:

1.    Contractor shall obtain and incorporate into the engineering design for
the LNG liquefaction Unit necessary engineering information from APCI.

2.    Contractor shall obtain and incorporate into the engineering design for
the acid gas removal Unit necessary engineering information from BASF.

3.    Contractor shall obtain and incorporate into the engineering design for
the HRU Unit necessary engineering information from [***].

4.    Dynamic Simulation

Contractor shall prepare a number of discrete process dynamic simulations to
model system performance for the following critical areas of the process system
design:

1.    MR compressor simulation

2.    PR compressor simulation

3.    BOG compressor simulation

4.    Regen compressor simulation

For each of the above Contractor shall perform the following:

a.    Anti-surge system study

Page 28 of 68

 

b.    Start-up study (including whether there is a necessity for suction
de-superheater for the propane compressors during start-up of second compressor
string with first compressor string operating)

c.    Blocked outlet scenario study (compressor flare load study)

d.    Control scheme validation study

5.    Surge analysis of main loading lines (LNG tank to jetty)

6.    Surge analysis of rundown lines (LNG Train to LNG storage tank)

Contractor shall include control logic and equipment design details based on the
Equipment selected.

The purpose of the dynamic simulations is to prove the satisfactory operation of
the subject Equipment concerned over the range of operations specified by the
BOD. A Report on the simulation findings shall be made available to Owner.

5.    LNG Production Model

Contractor shall develop and maintain an LNG production model that will be used
to forecast LNG production based on the range of constraints defined in the BOD.
The model will be updated to reflect the latest P&ID issue and incorporate
relevant final vendor data. Contractors projections for LNG production shall be
made available to Owner.

In detailed design Contractor shall clearly identify Equipment and system
bottlenecks in the LNG train (and ship-loading system) to ensure that the upper
and lower limits of safe operating envelopes are well defined prior to train 1
reaching MC, and well defined in the operating instructions. Contractor shall
also verify that under extreme temperatures, i.e. between 99.9% exceedance and
0.1% exceedance, LNG production is not interrupted.

If in the design development it is discovered there are some select bottlenecks
that can readily be removed to allow for example full utilization of available
power to the liquefaction process, then such proposed change(s) shall be
discussed with Owner.

6.    Condensate Backflow

During detailed design, EPC Contractor shall ensure backflow is not possible
from the condensate header into the LNG Trains. Refer to P&ID
195910-000-PR-PI-0101, line number HL-17329-3”.

10.2.2    Materials Design Technology

Contractor shall prepare material design technology deliverables and
documentation.

Contractor material design technology activities shall, in addition to the
above, comprise the following:

1.    Welding

Contractor shall prepare Welding Procedure Specifications (WPS) for all relevant
combinations of material, material thickness and size of material to be welded,
including requirements for pre- and post-weld heat treatment if applicable.  The
Specifications shall include requirements for weld procedure qualification and
welding operator qualifications.

Contractor shall prepare Specifications to define requirements for
non-destructive testing (NDT) and pressure testing applicable to all welding
operations.

Subcontractor WPSs and procedure qualification records (PQRs) shall be reviewed
and approved by Contractor.  Contractor shall also review and approve
Subcontractor procedures

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for non-destructive examination, post weld heat treatment and pressure testing.
Contractor shall require that no Subcontractor welding is carried out until
Contractor has reviewed Subcontractors WPSs and PQRs and has given written
authorization to proceed.

Welding records shall be submitted as part of the Record As-Built Drawings and
Specifications provided by Contractor to record the weld identification number,
WPS, date of welding, welding operator, NDT record identification number and
initials of inspector for every weld. These shall be accompanied by weld maps to
identify the location and identification number of each weld.

2.    Chemical Cleaning

Contractor shall identify the extent of chemical cleaning to be carried out for
each system. Contractor shall indicate the extent of chemical cleaning on the
P&IDs. Contractor will prepare a specification and procedure that defines
fluids, temperatures, and durations to be used which complies with the Project
HSE requirements.

3.    Cathodic Protection

Contractor shall develop Specifications for the, design, supply and installation
of cathodic protection systems required for the Project.

4.    Material Certification

Contractor shall require that pressure containing Equipment, bulk piping and
other applicable materials are supplied with material certification in
accordance with Applicable Codes and Standards.

5.    Positive Material Identification

Contractor shall implement a program of Positive Material Identification (PMI)
for materials used in cryogenic service. Carbon steel materials do not require
PMI certification.

6.    Noise

The Project is subject to regulatory requirements on noise emissions to the
environment.  The requirements of document 195910-000-ME-PH-0001, Noise
Philosophy, referenced in the BOD and all Permit requirements pertaining to
noise shall be incorporated into all aspects of the facilities design.

Contractor shall develop a noise model based on the Noise Philosophy which shall
be updated during the course of detail design and Equipment procurement.

Contractor shall carry out a post start-up noise survey to demonstrate
compliance with the noise limits specified in the Noise Philosophy and Permits.
As an operational test, three noise model calibration points will be set within
the Site boundaries to check overall noise generation. Noise generation shall
also be checked inside the facilities to verify correct marking of PPE zones.

7.    Acoustically Induced Vibration

Contractor shall carry out checks for acoustically induced vibration. Contractor
shall prepare a report documenting this investigation for review by Owner. This
report shall identify remedial measures and Contractor shall incorporate such
remedial measures in the design.

8.    Reliability, Availability and Maintainability Analysis

Contractor shall develop a RAM model to determine the expected overall
availability of the Project. The model shall be developed using input data from
Subcontractor and Equipment Suppliers information and industry standards, such
as OREDA.

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10.2.3    Piping Design & Engineering

Contractor shall prepare piping design & engineering deliverables and
documentation.

Contractor piping design & engineering activities shall, in addition to the
above, encompass but not be limited to the following:

1.    Electronic Design Model

Contractor shall generate a three-dimensional (3D) computer-aided design (CAD)
electronic model for the Project. Database files for Contractor’s final 3D
Model, with full attributes, shall be provided to Owner.

            [***].

10.2.4    Civil Engineering

Contractor shall prepare civil engineering deliverables and documentation.

Contractor civil engineering activities shall, in addition to the above,
encompass the following:

1.    Site Surveys

Contractor shall review Site survey reports and geotechnical information made
available during front-end engineering and design and carry out additional
investigations as deemed necessary by Contractor for detailed design. Contractor
shall issue the report on any additional surveys or geotechnical investigation
to Owner for information and review.

[***].

2.    Clearing and Grubbing

The first phase of Site preparation shall be to clear the Site of loose debris
and surface vegetation.

3.    Cut and Fill

Contractor shall prepare detailed Site preparation drawings showing cut and fill
requirements, and rough and finished grade elevations respectively, for use by
the Site preparation subcontractor.

4.    Highway 48 Modifications

[***].

5.    Levee

Engineer and construct the levee to the height, and with flood gates around the
Facility, in accordance with the levee details on 195910-000-CV-DR-1033, Civil
Standards – Levee Typical Section, referenced in the BOD.

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Vehicle access through and partly over the levee shall be provided as shown on
Overall Site Plan, 26210-000-P1-0000-00001. As a minimum the firm road elevation
across the levee shall be in excess of the once per 100-year storm surge plus
long-term sea-water rise allowance, with allowance to close the remaining
approximately five to six feet with engineered and fabricated closure facilities
to protect the site against flooding in a once per 500-year storm surge.

Contractor shall conduct calculations to confirm the levee will withstand loads
imposed by retained water, and that seepage rates are within allowable limits.

6.    Soil Improvement

Contractor shall, in accordance with the geotechnical consultant’s
recommendations, carry out soil improvement necessary to achieve required load
bearing capacity as required for structures and buildings. [***].

[***].

7.    Foundations for Equipment and civil / steelwork structures

Contractor shall design all foundations required for supporting Equipment and
civil / steelwork structures.

The location of foundations shall be included in the 3D CAD model for the
Project.

8.    Drainage Systems

Contractor shall design and construct the drainage systems in accordance with
the Drainage and Wastewater Treatment Philosophy, 195910-000-PR-PH-0004,
referenced referenced in the BOD.

Contractor shall prepare drainage system drawings as required for construction
and to support Owner’s Permit applications.

Design details of drainage systems shall be included in the 3D CAD model for the
Project.

9.    LNG Impoundment and Spill Containment Systems

The design and sizing of the LNG impoundment basins shall be based on a design
spill of LNG as defined by the code of federal regulations, title 49:
Transportation, part 193: "Liquefied Natural Gas Facilities: Federal Safety
Standards".

Design details of LNG impoundment and spill containment systems shall be
included in the 3D CAD model for the Project.

10.2.5    Structural Engineering

Contractor shall prepare structural engineering deliverables and documentation.

Contractor structural engineering activities shall, in addition to the above,
encompass the following:

1.            Piling Design

Design details of the piling required to support Equipment and civil / steelwork
structures. Location of piles shall be included in the 3D CAD model for the
Project. Where piles are selected, they shall be executed so as to minimize
noise.

2.            Structural Members (Columns, Beams, and Other Supports)

Contractor shall design and specify all steelwork structures, and hand-over the
structural calculation models as designed to support possible future plant
changes.

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Design details of all structural members shall be included in the 3D CAD model
for the Project.

Contractor shall undertake calculations to verify that all structural components
meet the requirements of applicable codes listed in 195910-000-PE-LI-1008, Codes
and Standards List referenced in the BOD and shall determine loads imposed on
foundations.

10.2.6    Mechanical Engineering

Contractor shall prepare mechanical engineering deliverables and documentation.

Contractor mechanical engineering activities shall, in addition to the above,
include the following:

1.    Preparation of Equipment specifications and mechanical datasheets for
mechanical equipment falling within Contractor’s scope of supply.

2.    Preparation of requisitions for mechanical equipment for inquiry and for
purchase.

3.    Review of Subcontractor bids, preparation of technical bid evaluations
(TBEs), and technical conditioning of Subcontractor bids.

4.    Review of Subcontractor supplied documentation including the consolidation
of comments received from other engineering disciplines.

5.    Review and resolution of Subcontractor concession requests.

6.    Review of Subcontractor spare parts recommendations and consolidation of
recommended list of Operating Spare Parts.

7.    Attendance at, and witnessing of, Equipment performance testing, and
factory and site acceptance tests where required by the inspection and test plan
for the Equipment concerned.

8.    Mechanical engineering support during Commissioning, start-up and initial
operation of the Project.

10.2.7    Process Safety, Fire Protection Engineering and Environmental
Engineering

Contractor shall be responsible for the design and specification of safety and
fire and gas detection and protection systems for the Facility.  Contractor
shall prepare the fire protection and safety engineering deliverables and
documentation.

Contractor process safety and fire protection engineering activities shall, in
addition to the above, provide the following:

1.    Perform consequence modelling / blast analysis.

2.    Plan, perform, participate and track status of actions resulting from
design safety reviews and Process Hazards Analyses including hazard
identification (“HAZID”), design hazardous operations (“HAZOPs”) and vendor
package HAZOPs using Contractor’s safety and environmental action management
systems (“SEAMS”). Contractor will incorporate outstanding action items from the
FEED level HAZOP as well as perform a HAZOP and other PHA activities as part of
this SOW.

3.    Prepare or provide necessary safety and environmental protection input to
requisitions for fire and safety equipment, for environmental protection
equipment, and for the review and technical evaluation of technical bids for the
same.

4.    Review Subcontractor documents and drawings for compliance with the
Project fire, safety and environmental protection philosophies and
specifications in the Codes and Standards list referenced in the BOD.

5.    Provide necessary safety and environmental design input to submissions by
Owner to responsible Governmental Instrumentalities, and also verify that design
and engineering complies with agreed standards and Permit requirements.

Page 33 of 68

 

10.2.8    Instrumentation and Control Engineering

Contractor shall prepare instrumentation and control engineering deliverables
and documentation.

Contractor shall during the course of detailed engineering design finalize
input/output (I/O) counts and the numbers of remote I/O cabinets etc., and
co-ordinate with Owner’s nominated electrical, instrumentation &
telecommunications (EI&T) equipment provider, ABB, for the necessary changes in
systems design and equipment supply.

Contractor instrumentation and control engineering activities shall, in addition
to the above, comprise the following:

1.    Ensure incorporation of instrument and control requirements into Project
P&IDs, and specifications and datasheets for equipment prepared by other
engineering disciplines.

2.    Preparation of requisitions for instrument and control equipment for
inquiry and for purchase for any Equipment not supplied by Owner’s nominated
electrical, instrumentation and telecommunications equipment supplier.

3.    Review of Subcontractor bids, preparation of TBEs, and technical
conditioning of Subcontractor bids prior to purchase.

4.    Review engineering design deliverables provided by Owner’s nominated EI&T
equipment provider for compliance with Project instrument and control system
design philosophies and specifications.

5.    Coordinate its Work with that of Owner nominated third parties supplying
and/or installing facilities or equipment within the Facility.

6.    Review Subcontractor documents and drawings for compliance with the
Project instrument and control system design philosophies and specifications
referenced in the BOD.

7.    Attendance at, and witnessing of, equipment performance testing, and
factory and site acceptance tests where required by the inspection and test plan
developed by Contractor.

8.    Attend factory and site acceptance for integrated control and safety
system (ICSS) main subsystems.

9.    Instrumentation and control systems engineering support during
Commissioning, start-up and initial operation of the Project.

10.2.9    Electrical Engineering

Contractor shall prepare electrical engineering design deliverables and
documentation.

Contractor shall during the course of detailed engineering design finalize
electrical equipment design requirements and co-ordinate with Owner’s nominated
EI&T equipment provider, ABB, to ensure that changes in FEED design due to
Contractor’s design development is properly and cost-effectively reflected in
ABB systems design and equipment supply.

Contractor electrical engineering activities shall, in addition to the above,
include to the following:

1.    Incorporate electrical design requirements into Project specifications and
datasheets for equipment prepared by other engineering disciplines.

2.    Perform or Subcontract to Owner’s nominated electrical, instrumentation
and telecommunications equipment provider the following electrical studies:

     Load Flow and Power Factor Correction Studies

     Fault Current Studies

     Transient Stability Studies

     Dynamic Performance Studies under Motor Starting Conditions

     Harmonic Distortion Studies

     Arc-Flash Study

Page 34 of 68

 

     Protection and Relay Coordination Studies

     Cable sizing calculations

     Equipment sizing calculations

     Illumination levels

     Motor restart study

     Electric Magnetic Compatibility Review

3.    Preparation of requisitions for electrical equipment for inquiry and for
purchase for any Equipment not supplied by Owner’s nominated electrical,
instrumentation and telecommunications equipment supplier.

4.    Review of Subcontractor bids, preparation of TBEs, and technical
conditioning of Subcontractor bids prior to purchase.

5.    Review engineering design deliverables provided by Owner’s nominated EI&T
equipment provider, ABB, for compliance with Project electrical engineering
design philosophies and specifications.

6.    Review Subcontractor documents and drawings for compliance with the
Project electrical design philosophies and specifications specified in the BOD.

7.    Attendance at, and witnessing of, equipment performance testing, and
factory and site acceptance tests where required by the inspection and test
plan.

8.    Electrical engineering support during Commissioning, start-up and initial
operation of the Project as set forth in this SOW.

10.2.10  Telecommunications Engineering

Contractor shall design and engineer in close cooperation with Owner’s nominated
electrical, instrumentation and telecommunication equipment supplier the
following telecommunication systems in accordance with the Project
Telecommunication and Security System Philosophy, referenced in the BOD:

     Office LAN

     Security LAN

     Telephone System

     PAGA System

     CCTV System

     Access Control System

     Hotline System

     Plant Radio System

     Plant Paging System

     Intruder Detection System

     Telecoms Management System

     Marine Radio System

     Ship to Shore Communication System

     Video Conferencing System

     Entertainment System

     Intercom System

     Fiber Optic Trunk System

Contractor shall prepare telecommunications engineering deliverables and
documentation.

Page 35 of 68

 

Contractor telecommunications engineering activities shall, in addition to the
above, include the following:

1.            Preparation of requisitions for telecommunications equipment for
inquiry and for purchase for any Equipment not supplied by Owner’s nominated
electrical, instrumentation and telecommunications equipment supplier.

e.    Review of Subcontractor bids, preparation of TBEs, and technical
conditioning of Subcontractor bids prior to purchase.

f.    Review engineering design deliverables provided by Owner’s nominated EI&T
equipment provider for compliance with Project telecommunications design
philosophies and specifications.

g.    Attendance at, and witnessing, of equipment performance testing, and
factory and site acceptance tests where required by the inspection and test
plan.

h.    Telecommunications system design support during Commissioning, start-up
and initial operation of the Project as set forth in this SOW.

10.2.11  Information Technology & Information Management

Contractor shall implement a comprehensive information management plan covering
all aspects of the Work including provision, resource, execution and management
of the Project. Contractor’s information management plan shall include cyber
security requirements and shall be subject to review by Owner.

Contractor scope of work comprises:

1.    Provide and manage secure information technology (IT) facilities,
including hardware, software, networks, applications and systems capable of
supporting the Work.

2.    Provide cyber security for all information management aspects of the Work.

3.    Provide and manage communications facilities required to support the Work.

4.    Provide and manage an electronic document management system (EDMS) to
support the Work.

5.    Provide and manage document scanning facilities.

6.    Manage the development of engineering deliverables via the use of
Contractor’s CAD applications.

7.    Install and manage remote access facilities as required in this SOW for
effective management of the Work.

8.    Provide and manage two-dimensional (2D) drafting systems.

9.    Provide and manage 3D plant modelling systems to develop the plant model.

10.2.12  Document Management

Contractor shall prepare and implement a document management plan covering all
aspects of the management and control, including change control, of Project
documentation.

Contractor shall manage Project documentation using Contractor’s electronic
document management system (EDMS).

11.0       ENGINEERING: THIRD-PARTY CONSULTANTS

Contractor shall employ the services of specialist third-party consultants where
the Contractor determines the services are necessary due to the unique nature of
the engineering work concerned.

[***].

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12.0        PROCUREMENT

12.1        GENERAL

Contractor is responsible for the procurement of Equipment, bulk materials and
consumable items necessary to construct, pre-commission, commission, start up,
and operate Train 1 up to SC of Train 1, and Train 2 up to SC of Train 2, as
further defined hereafter. Contractor’s procurement activities shall include the
following:

     Obtaining quotations for the supply of Equipment, bulk materials and
consumables;

     Commercial evaluation of quotations received;

     Bid conditioning;

     Negotiation and placement of Subcontracts for Equipment, bulk materials,
and consumables;

     Expediting and inspection in accordance with Contractor’s supplier quality
surveillance (SQS) plan;

     Definition of requirements for protection and packaging during shipment;

     Definition of requirements for preservation while during shipment and
during storage on Site;

     Delivery to Site;

     Obtaining required insurance coverage; and

     Administration of Subcontracts with Subcontractors.

12.2        PURCHASING PROCEDURE

Contractor shall develop and issue to Owner for review a procurement plan, (the
“Procurement Plan”) consistent with this SOW and the overall Project schedule
for purchasing tagged Equipment and engineered bulk materials.

Contractor’s procurement plan shall include but not be limited to the following:

     Purchasing activities;

     Preparation of the general terms and conditions that the Contractor will
use to procure Equipment and services;

     Subcontract formation for Equipment;

     Home office and/or area expediting;

     Field procurement activities;

     Procured Equipment quality control including material and/or shop
inspection, and witness and hold points;

     Traffic and logistics activities; transportation of procured goods to the
Site; and

     Material control at the Site including details of Equipment received,
storage, and in quarantine.

12.3        REQUISITIONS/PURCHASES

Contractor and its Subcontractors shall prepare requisitions for Equipment in
accordance with the Drawings and Specifications and Contractor’s Procurement
Plan.

12.4       EXPEDITING AND INSPECTION

Contractor shall be responsible for expediting and inspecting Equipment in
accordance with the EPC Agreement and Contractor’s supplier quality surveillance
(SQS) Plan.

The level of inspection to be applied shall be based on the commodity,
Contractor’s standard work processes, and the individual Subcontractor’s
performance history.  Contractor shall work with Owner to develop criticality
rating within [***]  ([***]) Days of LNTP.

An inspection and test plan shall be prepared for each Equipment.

Page 37 of 68

 

12.5       FACTORY ACCEPTANCE TESTS

Contractor shall undertake factory acceptance testing of components and systems
provided by Equipment Subcontractors as required by the Project Specifications
and by the inspection & test plans prepared by Subcontractors.

Requirements for factory acceptance testing shall be based on Equipment
criticality rating and specified in the Equipment Subcontract. Factory
acceptance tests on critical Equipment and systems shall be witnessed by
Contractor and by Owner, at the Owner’s discretion.

12.6       SUPPLY OF EQUIPMENT – TAGGED EQUIPMENT ITEMS

12.6.1    Mechanical Equipment

Contractor shall purchase and install all mechanical Equipment listed in Major
Equipment List 195910-000-PE-LI-1010, as referenced in the BOD.

12.6.2    Tagged Electrical, Instrumentation and Telecommunication Equipment
supply by ABB

Owner has entered into an Option Framework Agreement with ABB (“ABB Agreement”)
for the supply of certain electrical, ICSS, telecommunications and security
Equipment. Contractor shall purchase such Equipment from ABB at pricing and on
terms and conditions as specified in the ABB Agreement.

ABB scope of supply includes electrical, instrumentation and control, and
telecoms described by the ABB Agreement.

Substations and local equipment rooms (“LER”) supplied by ABB are to be fully
equipped and tested modules for installation on Site by the Contractor. Where a
complete substation or LER requires disassembly for shipment to Site, the
substation or LER architectural components may be reassembled on Site by
Contractor.

12.6.3    Single Source of Supply

             Main Refrigerant Compression Packages

Contractor shall purchase the main refrigerant compression packages, [***],
[***], [***], [***], and related ancillary Equipment for both Train 1 and Train
2 from Baker Hughes, a GE Company (“GE”). Contractor shall install the main
refrigerant compression package Equipment in accordance with GE’s installation
instructions.

             Boil-off Gas Compressor Packages

Contractor shall purchase the Boil-off Gas (“BOG”) Compression Packages, [***]
and [***], and related ancillary Equipment from Siemens. Contractor shall
install the boil-off gas compression package Equipment in accordance with
Siemens’ installation instructions.

             Main Cryogenic Heat Exchanger

Contractor shall purchase the main cryogenic heat exchanger (“MCHE”) for Train 1
and Train 2 from APCI. Contractor shall dress and install the MCHEs in
accordance with the APCI’s installation instructions.

12.7        SUPPLY OF EQUIPMENT – BULK MATERIALS

Contractor shall provide bulk materials required to be installed as part of the
Work. Such materials shall include civil and structural bulk materials, piping
bulk materials, electrical bulk materials and cabling, and instrument and
telecommunications bulk materials and cabling all to be specified in accordance
with the requirements stated in the documentation referenced in the BOD.

Page 38 of 68

 

12.8        SPARE PARTS

Contractor shall provide all pre-commissioning, commissioning, testing and
start-up spare parts necessary for each Train to achieve SC and shall, prior to
and as a condition precedent to achieving RLFC for each Train, deliver such
spare parts for the Train to the Site, including all Work related to procuring
and storing the commissioning spare parts.

Contractor shall provide home office services to identify, recommend, and
procure (upon agreement with Owner the list to be procured) Capital Spare Parts
and Operating (2-year) Spare Parts. FEED deliverable, Spares Philosophy,
provides estimated lists. Spare parts receiving, storage and preservation until
SC shall be included in Contractor’s EPC Contract Price.

Contractor shall deliver Capital Spare Parts and 2-year Operating Spare Parts to
the permanent Site warehouse. Contractor shall be responsible for control and
operation of the permanent Site warehouse up to SC of Train 1. Receipt,
inventory control, logging, preservation and storage of Capital Spare Parts and
Operating Spare Parts in the permanent Site warehouse up to SC of Train 1 shall
be Contractor’s responsibility and by Contactor’s personnel.

12.9        CATALYSTS & CHEMICALS, OILS & LUBRICANTS

12.9.1    Catalysts & Chemicals

Contractor shall supply first fill chemicals and catalysts. Contractor shall
replenish chemical and catalyst usage between RFSU and SC as necessary up until
SC of each Train as required by the EPC Agreement. Following SC of Train 1,
Contractor shall record usage by Train 2 and replenish usage by Train 2 only
when necessary up until SC of Train 2.

Contractor shall provide catalysts and chemicals at recommended warehouse
inventory quantities to be held as inventory on Site for plant operation as
specified in Section 12.9.3 of this SOW, and shall provide these in the
warehouse at SC. Information to be provided by Contractor shall be at minimum as
listed under 12.9.3 of this SOW. Contractor may draw down from warehouse
quantities during start-up or initial operations only upon prior agreement with
Owner. Any quantities drawn down by Contractor between RFSU and SC shall be
replaced by Contractor at its own expense to ensure the full inventory is
available within the Catalyst and Chemicals warehouse at SC.

Catalysts and chemicals are to be provided sufficient to support operations for
a [***]-month period after Substantial Completion of Train 1.

12.9.2    Oils & Lubricants

Contractor shall supply first fill oils and lubricants for Equipment as
recommended by the Equipment Subcontractor. Contractor shall replenish oil and
lubricant usage by Train 1 Equipment up until SC of Train 1 in accordance with
the EPC Agreement. Following SC of Train 1 Contractor shall remain responsible
for usage by Train 2 and replenish usage by Train 2 only as and when necessary
up until SC of Train 2. Contractor shall perform a final top up of oils and
lubricants to the Equipment manufacturer’s recommended fill level prior to
handover to Owner at SC of each Train.

Contractor shall prepare a recommended list of oils and lubricant quantities to
be held as warehouse inventory on Site for plant operation as specified at
minimum in Section 12.9.3 of this SOW, and shall provide same in Owner’s
warehouse at SC of Train 1.

Contractor may draw down from warehouse quantities during start-up or initial
operations only upon prior agreement with Owner. Any quantities drawn down by
Contractor between RFSU and SC shall be replaced by Contractor at its own
expense.

Page 39 of 68

 

Oils and lubricants are to be provided sufficient to support operations for a
[***]-month period after Substantial Completion of Train 1.

12.9.3    Listing of Operating Catalyst & Chemicals, Oils & Lubricants, and
Protective Coatings

Contractor shall determine for Owner the operating requirements for chemicals,
catalysts, oils, lubricants and protective coatings.  This list shall include:

             Initial fill or charge (unit of measure);

             Annual indicated rate of consumption;

             Quantity for initial purchase (and required date);

             Quantity for operating and back-up supplies;

             Method of delivery;

             Required date for first operating inventory delivery;

             Specifications;

             Special storage conditions (if applicable); and

             Material safety data sheets (MSDS).

12.10      MISCELLANEOUS MATERIALS SUPPLY

Contractor shall specify, procure, and install the following miscellaneous
material items as described below.

12.10.1    Furnishings, Fittings and Special Equipment for installation within
Facility Buildings

Contractor shall be responsible for specification, procurement, and installation
of fixed fittings, fixed or built-in furniture, fixed or built-in furnishings,
and any special fixed or built-in Equipment and appliances for all buildings.

Contactor shall handover Facility buildings to Owner at ready for occupancy
which shall be preceded by all building Permits being obtained.

Contractor shall work with Owner during EPC execution to identify suitable
furnishing materials, coherent color schemes etc. for offices, workspaces and
common areas.

12.10.2    Workshop Equipment

Contractor shall obtain from Subcontractors recommendations for maintenance and
on-Site repair of Equipment and assist Owner in identifying the list of workshop
equipment for the main mechanical workshop, electrical workshop, and instrument
workroom. Workshop equipment will be procured by Owner. Workshop shall be
conveyed to Owner upon receipt of ready for occupancy certificate which shall be
in time for Owner to install workshop equipment prior to SC of Train 1.

12.10.3    Portable Fire-fighting and Miscellaneous Safety Equipment

Contractor shall provide Portable Fire-fighting and Miscellaneous Safety
Equipment required for the safe start-up and operation of the Facility,
including but not limited to, that listed in Fire and Safety Equipment List,
195910-000-SA-LI-1001.

12.10.4    Plant Mobile Equipment

Contractor shall provide home office services to identify, recommend, and
procure (upon agreement with Owner the list to be procured) plant mobile
Equipment for operations of the Facility. The foregoing shall include assistance
to Owner in developing plant mobile Equipment Specifications. The actual

Page 40 of 68

 

purchase and delivery price of plant mobile Equipment shall not be included in
Contractor’s scope. For any plant mobile equipment elected by Owner to be
purchased for Facility operations, Contractor shall submit a Change Order. Plant
mobile Equipment receiving, storage and preservation until SC shall be included
in Contractor’s EPC Contract Price. Plant mobile equipment shall be delivered to
Site as a condition precedent to SC of Train 1, provided that Owner has given
Contractor sufficient notice to order such equipment.  To the extent that
Contractor desires to use any plant mobile Equipment prior to SC, Contractor
must obtain Owner’s prior approval.

[***].

12.10.5    Seismic Monitoring System

Contractor shall provide a seismic monitoring system and workstation.

12.11      TRAFFIC AND LOGISTICS SERVICES

Contractor shall implement a Logistics Plan for the movement of all Equipment,
including engineered bulk materials, required for the Work under the EPC
Agreement. Logistics scope shall be inclusive of points of origination to the
Site. Contractor’s Logistics Plan shall be prepared in advance of any movement
of materials.

[***].

13.0       MATERIALS MANAGEMENT

13.1       HOME OFFICE MATERIALS MANAGEMENT

Contractor shall prepare and implement a materials management plan. Contractor’s
materials management plan describes the roles and responsibilities, home office
material management activities, site materials management activities, materials
management at fabrication yards, and materials management systems to be used by
the Contractor.

13.2       SITE MATERIALS MANAGEMENT

The Contractor’s materials management plan shall address the following Site
materials management activities:

            Material receiving;

            Inspection of materials upon receipt;

            Equipment and material storage;

            Record of condition of Equipment and materials received;

            Preservation and preventative maintenance;

            Material control and issuing;

            Shortage and damage reports;

            Storage locations including lay down control, layout and sizing,
warehousing and climate-controlled storage requirements; and

            Surplus materials control.

Contractor shall undertake the activities described in its materials management
plan in support of the Project.

14.0       SUBCONTRACT SERVICES

The Contractor shall perform or cause to be performed any subcontracted
services, including by Subcontractors and Sub-subcontractors, required to
perform the Work during engineering, construction, pre-commissioning,
Commissioning, start-up and initial operation of the Facility until, and as
applicable to, SC of Train 1 and SC of Train 2.

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[***]

Subcontractors and Sub-subcontractors shall be selected from Contractor’s
proposed list of approved contractors, subcontractors, sub-subcontractors,
vendors and suppliers.

14.1        ENGINEERING DESIGN & CONSULTANCY SUBCONTRACTS

Contractor shall use engineering design & consultancy Subcontracts to the
benefit of the Project.  [***].

14.2        SITE CONSTRUCTION SUBCONTRACTS

Contractor shall use Subcontractors and Sub-subcontractors to the benefit of the
Project. [***]:

14.3        SUBCONTRACTS DURING COMMISSIONING, START-UP, AND INITIAL OPERATION
UP TO SUBSTANTIAL COMPLETION OF TRAIN 1

Subcontracts required during commissioning, start-up, and initial operation may
include, but not necessarily be limited to, the following:

            Propane supply for initial fill, start-up and initial operation;

            Ethane / Ethylene supply for initial fill, start-up and initial
operation; and

            Relief valve OPEX testing & inspection services.

14.4        CONTRACTOR PROVIDED SERVICE SUBCONTRACTS

Contractor shall enter into service (including call-off) Subcontracts with
specialist Subcontractors to maintain the Facility as required for the provision
of specialist services until SC of each Train and as may be required under the
EPC Agreement. [***].

15.0        CONSTRUCTION

15.1        GENERAL

Contractor shall complete the construction of the Project as required by the EPC
Agreement and perform such Work in accordance with the EPC Agreement.

Contractor shall provide construction support services, Subcontractor
representatives and technicians necessary to install, prepare, test, and
complete construction of the Project as required by the EPC Agreement.

15.2        CONSTRUCTION SCOPE OF WORK

The construction scope of work shall include the following:

            Site preparation;

            Site development;

            Installation of fill and construction of embankments;

            Construction of the levee;

            Erosion and sediment control;

            Formation of foundations for Equipment, structures, pipe-racks and
pipe tracks, and buildings, including piling and/or soils mixing where required;

            Installation of underground piping and drainage systems;

            Finished area grading and paving;

            Installation of structural components of the Project;

            Installation of the vessels, tanks, buildings, ground flares, and
other Equipment;

            Installation of the rotating equipment, motors, turbines,
compressors, pumps and blowers;

            Installation of piping components and systems;

            Installation of electrical substations and installation of power
distribution Equipment;

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            Installation of the fire water system;

            Installation of the power and control cabling systems;

            Installation of the instrument and control devices and systems;

            Installation of telecommunication & security equipment and systems;

            Installation of the instrument, control devices and systems and
telecommunication & security systems cabling systems;

            Installation of Electrical, ICSS, Instrument, Telecom & Security
Fiber Optic cabling systems;

            Application of paint, insulation, and fireproofing systems;

            Installation of permanent plant buildings, roads, security fences;

            Provide landscaping design and implement. The extent of landscaping
and green spaces, type of vegetation used, etc. will be determined during
detailed design

            Installation, maintenance and removal of temporary facilities;

            Provision of temporary facilities for the supply of electricity,
water, and telephone / communication systems for construction of the works;

            Provision of temporary facilities for the disposal of sewage from
the construction worksite up to that time that connection to the new sanitary
effluent return line to local sewage treatment plant is available; and

            Contractor shall ensure temporary strainers or other methods of
protecting Equipment are included for all Equipment that is susceptible to
damage from construction debris. Contractor shall follow suppliers’
recommendations as to which Equipment this applies as a minimum requirement.

Construction works include the following marine construction activities:

            Dredging for the MOF;

            Construction of the LNG carrier loading berth number 1, and the MOF
(loading berth 1 will be constructed primarily using land-based equipment) and
piling for loading berth 2;

            Installation of loading berth 1 topside Equipment;

            Installation of mooring & breasting dolphins; and

            Shoreline slope protection works in the MOF, LNG berth, and vessel
turning area (as in other parts shoreline protection will have been installed
prior during site preparation)

Upon completion of the construction scope of work, Contractor shall remove from
Site all above ground temporary facilities, except for those agreed with Owner
to be retained for future stages of Facility development for which Contractor
shall be suitably compensated.  For underground temporary utilities see section
15.15.3.

15.3        RULES AND REGULATIONS

Contractor shall produce written rules of conduct for review and agreement by
Owner within [***] ([***]) Days following the start of LNTP, which shall apply
to all of Contractor’s, and its Subcontractor’s, personnel at the Site.
Contractor shall enforce all Applicable Laws, and Applicable Codes and
Standards. Such rules of conduct shall cover all employees of Contractor, its
Subcontractors, and any visitors.

Contractor shall provide a system to identify all personnel working at the
Site.  This system shall include its own employees and those of its
Subcontractors and the Owner.  Each employee authorized to be on Site shall wear
an identification tag, which shall include a unique pass number of the
individual.  Visitors and Subcontractors authorized to be on Site shall also
display an appropriate pass.

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Contractor shall prominently display statutory notices and Site working and
safety regulations, including OSHA required notices.  Contractor shall bring to
its employees’ attention, and to the attention of the employees of its
Subcontractors, notices and instructions as posted, or issued.

15.4       COMMUNITY ENGAGEMENT

Contractor shall develop a local content plan for review by Owner and
stakeholder engagement plan for review and agreement by Owner.

[***].

15.5       CONSTRUCTION LABOR

Contractor shall fulfill direct and indirect labor needs. Contractor shall use a
qualified work force to construct the Project.

Contractor shall provide a construction management team (CMT) to manage,
supervise and execute the Work.

15.6       CONSTRUCTION EQUIPMENT

Contractor shall provide, and cause its Subcontractors to provide, Construction
Equipment necessary for construction of the Facility and installation of
Equipment.

All vehicle drivers shall hold a current valid government issued driver license
applicable to the class of vehicle they are responsible for driving.

All machinery operators shall be qualified to operate their allocated
machine.  This shall be verifiable by an appropriate certification, which shall
be available for review by Owner at any time.

It shall be Contractor’s responsibility to maintain all Contractor vehicles at
its own cost.  Equipment that Contractor deems unfit shall be either repaired or
removed from the Site.

All Contractor vehicles and those of its Subcontractors and Sub-subcontractors
used on public roads shall comply with public road inspection requirements and
be duly licensed and insured. Records shall be readily available for Owners
audits and review.

15.7       CONSUMABLE CONSTRUCTION MATERIALS

Contractor shall supply all necessary consumables, including fuels, lubricants,
welding rods, welding gases, gaskets, miscellaneous hardware and test materials
required to complete construction and installation of the Facility through SC of
each Train.

15.8       SUBCONTRACTS

Contractor shall develop a Subcontract execution plan that outlines the division
and definition of the work scope per Subcontract.

Contractor shall develop, pre-qualify, tender, award and administer each
Subcontract including those Subcontracts with a design, material supply and shop
fabrication element.

Refer also to Section 14.0 above.

15.9       SITE PREPARATION AND LEVEE

Contractor’s SOW includes Site preparation, and construction of the levee around
the Site.

Site preparation shall include but not necessarily be limited to:

            Clearing of the Site and grubbing of vegetation and other surface
debris;

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            Removal of the partially visible, semi-completed and redundant
pipeline shown on the topographical survey drawings for the Site, and removal,
or otherwise making safe, as necessary, of the two redundant well facilities
located within the Facility perimeter. (The exact location of the two old wells
in the northeast vicinity of the lease area is not yet established as historical
records identified to date are inconsistent. Investigation on where these two
plugged wells are is still ongoing by Owner. The locations may not impact on the
proposed Facility plan.)  Any work required to identify, examine and render safe
these abandoned wells on the project site is the responsibility of the EPC
Contractor. Any information gathered by Owner will be provided to the EPC
Contractor for additional exploratory investigations if necessary, determine
conditions and make the wells safe for abandonment and development of the RGLNG
site.   Such removals or remedies shall be documented separately and, if
required, shall be made in a safe and environmentally sound manner;

            Stripping of topsoil and/or other surface layers to expose a
subgrade capable of supporting backfill at locations requiring grade raise or
capable of supporting construction traffic; and

            Rough grading by cutting back the existing surface, or filling, to
the required grade elevation proposed in the Drainage System Design Criteria,
195910-000-CV-DB-1002, referenced in the BOD.

Contractor should be aware that the site is subject to wave action from passing
vessels and erosion. It is the Contractor responsibility to determine if
shoreline protection is necessary in order to protect the early phases of
construction along the shoreline.

It is anticipated grubbing and top-soils removed from the developed area of the
Site will be one of the first activities to support further Site investigations
and test-pile programs. Contractor shall determine a suitable location on Site
(outside the developed acreage) for future re-use around general buildings,
land-scaping or left without further use.

[***].

15.10      MARINE WORKS

The EPC SOW related to the marine facilities shall be as follows:

            LNG berth number 1 (west) structures and piling for LNG berth
number 2;

            LNG berth pocket and vessel turn area slope protection;

            Marine traffic management, including the provision and installation
of new navigational aids where required as indicated in the Marine Facilities
Basis of Design; and

            MOF structures and dredging.

15.10.1     LNG Berth 1 Structures

            LNG loading platform scope shall include engineering, procurement
and construction of coated steel tubular steel piles, reinforced concrete pile
plugs and pile caps, pre-cast concrete deck panels, reinforced concrete topping
slab, reinforced concrete equipment pedestals, reinforced concrete containment
curbs, reinforced concrete curbs with scuppers and cathodic protection via
sacrificial anodes.

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            LNG trestle structure scope shall include engineering, procurement
and construction of coated steel pipe piles reinforced concrete pile plugs and
pile caps, pre-cast concrete box beams or girders, box beam / girder bearing
pads, reinforced concrete topping slab with expansion joints, reinforced
concrete curbs with scuppers for the roadway portion of the trestle structure
and reinforced concrete containment curbs for the pipe rack portion of the
trestle structure, galvanized steel guardrails for the roadway portion of the
trestle structure and galvanized steel handrails for the outboard side of the
pipe rack portion of the trestle structure.

            Breasting dolphins scope shall include the engineering, procurement
and construction of coated steel pipe piles, coated steel pipe pile top pieces
including reinforced concrete pile plug and decks, complete marine fenders with
panels, complete double 150 MT quick-release mooring hooks with integrated
capstan and mooring line load monitoring system, galvanized steel handrails, rub
rails, access ladders, life ring cabinets (complete with life rings and lines),
cathodic protection via sacrificial anodes.

            Mooring Dolphins scope shall include the engineering, procurement
and construction of coated steel pipe piles, coated steel pipe pile top pieces
including reinforced concrete pile plug and decks, complete 150 MT quick-release
mooring hooks with integrated capstan and mooring line load monitoring system
(quadruple mooring hooks required on outer four (4) mooring dolphins and triple
mooring hooks required in the inner two (2) mooring dolphins), galvanized steel
handrails, rub rails, access ladders, life ring cabinets (complete with life
rings and lines), and cathodic protection via sacrificial anodes.

            Walkways scope shall include the engineering, procurement and
construction of coated structural steel walkways (inclusive of galvanized steel
deck grating, handrails and toe boards), coated steel pipe piles, reinforced
concrete pile plugs and pile caps (inclusive of reinforced concrete foundations
for walkway landings on land), and cathodic protection via sacrificial anodes.

15.10.2 LNG Slope Protection and Aids to Navigation

Slope Protection

Contractor shall be responsible for the installation of toe slope protection,
inclusive of all geotextile fabric underlayment, bedding stone and armor stone
(class II) as indicated on the LNG jetty shore protection plan (Drawing
195910-000-MFNL-DR-1018 contained as an attachment to the BOD).

Aids to Navigation

Contractor shall also be responsible for the installation of two (2) new
floating private aids to navigation and one (1) new fixed structure private aid
to navigation as defined in the Marine Facilities Basis of Design (document
195910-000-MFNL-DB-1001, contained as an attachment to the BOD).

Additionally, Contractor shall be responsible for the demolition and removal of
foundation piles of one (1) existing federal aid to navigation range tower
structure, which is located in the LNG berth dredging area, and prior to
demolition  construct  one (1) new federal aid to navigation range tower
structure to be located to the east of the LNG berth dredging area as also
defined in the Marine Facilities Basis of Design, and further base design
details as included in RG-000-MA-SOW-0001, Requirements for Aids to Navigation
Structure.

15.10.3 Marine Traffic Management

Contractor shall coordinate marine activities, and movement of any ships, barges
and vessels with other users of the Brownsville ship channel.  Contractor shall
agree to procedures for management of marine traffic and dredging operations by
others with Owner, the BND and U.S. Coast Guard.

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15.10.4 MOF Structures and Dredging

The MOF will be comprised of the following features per the Marine Facilities
Basis of Design (document 195910-000-MFNL-DB-1001, contained as an attachment to
the BOD) and as further defined in the marine drawings 195910-000-MFNL-DR-1043 /
1044 / 1045 / 1047 / 1048, all contained as attachments to the BOD.

            MOF structures, including the procurement and construction of
coated sheet piling, uncoated steel pipe piles (or concrete piles), reinforced
concrete pile plugs (for steel piles only), reinforced concrete bulkhead pile
cap, reinforced concrete slab on grade (pile supported), and sacrificial
cathodic protection system.

            MOF marine appurtenances, including the procurement and
construction of fenders, and mooring bollards; and

[***].

            MOF aid to navigation, including the procurement and construction
of two fixed aids to navigation lights to include galvanized steel pedestal and
optic and two floating aids to navigation buoys to include mooring system and
buoy outfitted with navigational light.

MOF Dredging

The baseline MOF Dredging requirement is to dredge the area to a depth of 25
feet (reference MLLW), with an over-dredge allowance of 2 feet.

15.11    SITE FACILITIES AND CONSTRUCTION UTILITIES

15.11.1 Construction Power

Contractor shall design and install a construction power distribution system to
supply construction power to the main construction work areas.  Contractor shall
negotiate with AEP for the supply of a connection to AEP’s existing power supply
network for use for construction, if applicable.

Connection to the AEP existing power supply network for construction power
distribution shall be to the Contractor’s account.

Additionally, Contractor shall engage into a contract for construction energy
supply with any of the Texas available REP’s. Construction electrical energy
usage shall be to the Contractor’s account.

Contractor shall provide and maintain all construction electrical facilities to
the individual process units and area battery limits.  Contractor is not
required to supply construction power to the Rio Bravo Pipeline custody transfer
battery limit metering station, or to the AEP 138 kV electrical switchyard
construction sites, except where required by fence line security systems.

Contractor shall design, provide, and install transformation, and distribution
of construction power as necessary within the Site boundary. Contractor shall
provide generation of construction power by temporary diesel generators up until
that time construction power supply is available, and for use in parts of the
Site remote from Contractor’s Site construction power distribution system and/or
where cable supplied construction power does not fully meet the demand.

The permanent power supply to the Facility will be provided from AEP’s Pompano
switchyard, which will be located within the Facility fence line at its northern
perimeter and constructed by a third party. Power from the Pompano switchyard is
expected to become available by Mechanical Completion before Contractor’s
pre-commissioning activities are due to commence. The connection of the Facility
to the AEP grid is at Transmission line level. Contractor may, subject to prior
agreement with AEP and Owner,

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arrange for supply of construction power for use during construction to be
changed over from contractor’s connection to AEP to supply from the Pompano
switchyard, or part of the permanent power supply system for the Project fed
from the Pompano switchyard, should this be beneficial to the Project. Costs for
this change in power source shall be to Contractor’s account. Contractor shall
in such event remain liable for payment of electrical power usage for
construction and power usage shall be metered accordingly.

Contractor shall remain liable for payment of power usage by permanent
facilities up to commencement of commissioning activities of Train 1.

15.11.2 Temporary Sanitation Facilities

Contractor shall provide toilets and washing facilities for use by workers on
Site. These facilities shall be strategically located within Contractor's
designated compounds in the vicinity of major Work areas. Facilities shall be
segregated for male and female use.

[***].

Cost for treatment of sanitary sewage from Contractor’s construction workforce
shall be to Contractor’s account based on potable water usage by Contractor’s
construction personnel, which shall be metered separately from water usage for
other construction purposes.

Contractor shall be responsible for cost of treatment of sanitary sewage from
permanent facilities up until RFSU of Train 1 based on metered freshwater
make-up to the Potable Water Storage Tank (dosed with dry chlorine, as
necessary).

Contractor is not responsible for disposal of sewage from the Rio Bravo Pipeline
custody transfer battery limit metering station, or the American electric power
(AEP) 138 kV electrical switchyard construction sites.

15.11.3 Water Supply for Construction

Owner will make arrangements with the BND for the provision of a permanent piped
fresh water supply to the Site.

Contractor shall meter all freshwater used for construction purposes. Cost of
all freshwater usage for construction purposes including use by Contractor’s
construction personnel shall be to Contractor’s account.

[***].

15.12     DISPOSAL OF CONSTRUCTION WASTE

Contractor shall be responsible for the safe disposal of construction wastes
and, where practical, recycle in accordance with the EPC Agreement.

15.13     SECURITY

Contractor shall prepare a site security plan that complies with all Applicable
Law.

Owner will prepare the Project Security Plan per 33 CFR 105 Subpart D for review
and approval by the US Coast Guard with assistance by external consultants.
Contractor shall provide required engineering design input only.

Contractor shall provide a secure boundary around all construction areas and its
establishment area with adequate security services.  Contractor shall provide
controlled access points between Contractor’s area

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and public areas, shall man such access points during working hours, and shall
keep such access points securely locked at all other times.

Contractor shall be responsible for security at the Site until all of the
requirements of SC for each Train have been satisfied.  Contractor shall provide
all security personnel and liaison with government authorities as
needed.  Fencing and security devices shall be provided and maintained to
prevent unauthorized access to the Site and to prevent theft or
damage.  Contractor shall employ security personnel to police the Site
entrances, fencing and secure areas at all times (including weekends and nights)
and shall carry out random searches of vehicles arriving or leaving the Site.

Contractor shall, pursuant to the EPC Agreement, prepare a Site access plan for
review and approval by Owner. Contractor’s Site access plan shall include
measures related to Site access described in the EPC Agreement. The plan shall
contain procedures for security operations, access and egress, employee
identification, employee screening for alcohol and drugs, random searches,
videography and photography and emergency and contingency plans.

Contractor shall only permit access onto the Site by authorized personnel of the
Contractor, its Subcontractors and Sub-Subcontractors, and by authorized
personnel of the Owner and the Owner’s other contractors, consultants,
representatives or invitees. Contractor shall not permit access to the Site by
personnel not engaged in performance of the Work without prior written consent
of Owner. Contractor shall ensure that the Site rules and regulations clearly
state the names and status of the personnel who are authorized to grant access
to the Site.

Contractor and Subcontractor employees, consultants and authorized visitors will
be allowed to park on Site, in areas as agreed with Owner as part of the
temporary facilities plan. Parking lots and temporary roads will have temporary
surfacing for dust mitigation (i.e., use of crushed concrete or gravel for
surfacing and operation of water trucks) and be fenced and lighted with regular
security surveillance. Security personnel and off duty policemen will be used to
assist with traffic control at the beginning and end of the work day.

Only authorized vehicles will be allowed access to the Site.  Vehicles entering
or leaving the Site and parked on Site will be subjected to random search as
considered necessary by either Contractor or Owner.

15.14     HEAVY LIFTS

All heavy and/or critical lifts on the Project shall be performed in accordance
with Contractor’s rigging plans, practices and rigging procedures.

The land-based portion of the Project’s crane operations and rigging gear shall
conform to Applicable Codes and Standards and Applicable Law.

Whenever a crane is used from land to work-on or load a ship or barge which is
in navigable waters, maritime regulations shall apply to the crane and all
lifting attachments.  Detailed crane operation and rigging procedures to be
prepared for the marine portion of the Work will reflect these different
standards.

Rigging studies shall be prepared for all heavy or critical lifts. Heavy or
critical lifts are defined as those where:

            Lifted item weighs 50 tons or more;

            Lifted item’s weight exceeds 85% of the maximum rated load for the
lifting equipment;

            Any multiple crane lift where two or more cranes are used, not
including tailing crane;

            Any lift where the crane load line will not be vertical; or

Page 49 of 68

 

            Any lift that requires special handling because of location and/or
configuration as required by engineering or Subcontractor

Critical lift plans shall consider soil investigation to determine soil bearing
capacity and subsurface hazard location in order to define corrective action if
found deficient.

Contractor shall carry out necessary lifting/rigging studies and calculations
and make them available for Owner’s review [***]  ([***]) working days prior to
the scheduled lift.  Contractor shall only employ cranes and lifting equipment
that have been tested and certified and have required tagged identification and
current and valid inspection records.

Contractor shall keep records of tests and certification of all lifting
equipment, cranes and operators employed on the Project, for inspection by
Owner.

All machinery and lifting appliances shall be inspected, tested and certified in
accordance with statutory requirements and current certification shall be
produced for inspection by Owner upon any request during the progress of the
Work.

Contractor shall prepare the necessary notification to FAA for cranes with an
operating height greater than 200 feet considering the minimum [***]  ([***])
month duration required by FAA to process the notification.

15.15     CONSTRUCTION TEMPORARY FACILITIES

Contractor is responsible for temporary facilities.  Access, egress, drainage,
utilities, parking, lay down areas, and temporary utility routings shall all be
reviewed to enable a safe, functional, and environmentally sensitive
installation.

Contractor is not responsible for temporary facilities to support construction
on the Rio Bravo Pipeline custody transfer battery limit metering station, or
the AEP 138 kV electrical switchyard sites, except for the erection, and later
removal, of the temporary security fencing and security equipment and for the
installation of permanent fencing and access gates as per Project standards
around both plots where required by the EPC Agreement,

15.15.1 Contractor Offices and Facilities

Contractor shall be responsible for providing its own offices and facilities.
This shall include offices, induction center, training facilities, medical
Project facilities, gate houses, warehousing, pipe fabrication, painting
facilities, toilets, network systems and connections, phones and internet
connection.

This includes temporary internet and telecom connection to a service providers
network at a remote location.

Permanent internet and telecom connection will become available after central
control and administration buildings are erected and permanent internet and
telecom connection is established.

Contractor may, subject to prior agreement with internet/telecom provider and
Owner, arrange for internet and telecom connection for use during construction
to be changed over from temporary to permanent internet and telecom connection
should this be beneficial to the Project.

Buildings shall be equipped with smoke detectors and fire extinguishers.
Construction utilities shall be provided by Contractor per the EPC Agreement.

Contractor shall provide necessary communication systems during construction,
Commissioning, and initial operation of the Facilities up to SC of Train 1, and
thereafter up to SC of Train 2 for facilities forming part of the Train 2
Work.  Contractor shall include for the needs of Contractor’s Subcontractors

Page 50 of 68

 

and visitors. Contractor shall be responsible for obtaining any licenses and
permits necessary to operate the Equipment that it uses during construction,
Commissioning, start-up and initial operation of the facilities.

Contractor shall provide Site accommodation for Owner’s personnel as provided
for under Section 23 below.

15.15.2 Material Storage and Laydown

Contractor shall provide warehousing and laydown facilities sufficient to ensure
the efficient handling and safe storage of materials and Equipment.  (Contractor
may wish to consider offsite storage locations at Port Isabel or within BND
controlled areas), Contractor shall agree to a traffic management plan for
transfer of materials to Site which will be provided to the Owner for review.

15.15.3 Underground Utilities

Contractor shall be responsible for all utilities required for operation of
temporary facilities and Equipment.  In the event such utilities are installed
underground, associated trenching, bedding, installation of the utility
cables/piping, installation of any required protective materials, and filling
and compacting the trench is the Contractor's responsibility.

Temporary underground services shall be indicated on an underground services
drawing. These will be cut-off just below grade, capped, and abandoned in place
before SC of the applicable Train (unless agreed with Owner to be retained for
future stages of Facility development) and shall be included in the Record
As-Built Drawings and Specifications to be handed over by Contractor upon SC.

15.15.4 Parking Facilities

A plan for adequate parking facilities for all vehicles directly or indirectly
involved in performance of the Site Work shall be submitted by Contractor.

Contractor shall submit a plan for Owner’s approval that shows the layout and
size of planned parking facilities, along with any associated bussing
considerations and traffic flows.  Parking and traffic flow relative to Site
Work shall be consistent with any Permit requirements.

Contractor’s plans for the provision of parking facilities at the Site are to
comply with the Temporary Facilities Plan.

15.15.5 Site Clean-up at the end of Construction

Except as provided in section 15.15.3 above, temporary facilities shall be
removed from Site by SC of the applicable Train, unless agreed with Owner to
remain in situ, or relocated elsewhere, on the Site for use in a future stage of
Facility development.

15.16     CONTRACTOR’S TOOLS AND CONSTRUCTION EQUIPMENT

Construction Equipment shall be supplied by Contractor or be provided by
Contractor’s Subcontractors for the Subcontract work scope required. Contractor
shall inspect Construction Equipment prior to it being mobilized to the Site and
shall maintain up-to-date inspection certificates, evidenced in the field by
colored tags.  Contractor shall require that Construction Equipment be inspected
at least quarterly, maintained, and, when necessary, necessary repairs are
carried out and completed before the Construction Equipment concerned is used on
Site. Contractor shall maintain records of inspections, repairs and tests at the
Site.

Contractor’s Construction Equipment shall conform to any requirements stated in
the EPC Agreement.

All machinery operators shall be qualified to operate their allocated
machine.  This shall be verifiable by an appropriate certification, which shall
be available for review by Owner at any time.

Page 51 of 68

 

15.17     CONSTRUCTION PERMITS

Contractor shall be responsible for obtaining the Permits necessary for the
execution of Contractor’s Work.

Contractor shall provide all necessary technical information required to support
Contractor’s Permit applications. For such Permits Contractor is required to
obtain pursuant the EPC Agreement, Contractor shall pay for applicable fees or
charges.

Contractor shall also provide prompt assistance, information and documentation
reasonably requested by Owner in connection with Permits for which Owner is
responsible and as further described under Section 21.1 of this SOW.

16.0       PRE-COMMISSIONING, COMMISSIONING, COMPLETION AND ACCEPTANCE

16.1       GENERAL

Contractor shall be responsible for pre-commissioning, Commissioning, start-up,
and initial operation of the Train 1 Facilities up to SC of Train 1, and of the
Train 2 Facilities up to SC of Train 2. Contractor will be assisted by Owner’s
operating and maintenance personnel, once fully trained, in accordance with the
EPC Agreement.

Contractor shall submit a high-level Commissioning and start-up strategy
document for Owner review and acceptance within [***] ([***]) Days following
NTP. The Commissioning and start-up strategy document shall provide the
framework and outline schedule for Contractor’s subsequent development of
detailed Commissioning and start-up plans, procedures, manuals, method
statements and other pre-commissioning, Commissioning and start-up documentation
necessary for Commissioning and start-up of the Facilities.

The Contractor's Commissioning and start-up plan will utilize Contractor's
standard procedures and work processes to execute Commissioning and start-up
activities, modified as necessary to address Project specific requirements.

Contractor shall provide detailed procedures for Commissioning and start-up
activities for each Equipment system and subsystem, and detail specific
provisions for commissioning the interfaces with the Rio Bravo Pipeline and the
AEP projects.

Contractor's Commissioning and start-up plan shall define the forms, document
flow, schedule, certification scheme, status monitoring methods, and
commissioning and start-up requirements check-lists for each Equipment system
and subsystem.

Pre-commissioning includes tests, inspections, cleaning and other activities
which are carried out after construction completion for a given system/subsystem
has been achieved, at ambient temperature and without the presence of process
fluids.

16.2       COMMENCEMENT OF COMMISSIONING AND START-UP

Contractor shall commence Commissioning activities promptly after issuance of
Mechanical Completion Certificate for each system or subsystem, as
applicable.  Contractor shall execute all Work required for pre-commissioning,
commissioning and start-up of each Train. This Work includes all
pre-commissioning, commissioning, the provision of start-up spare parts and the
scheduling of Contractor's commissioning team's construction support personnel,
commissioning specialists, vendor representatives, Subcontractor and other
necessary parties required.

Page 52 of 68

 

Contractor shall include for the cost of Subcontractor (including vendor)
technical representatives required at Site to support construction,
Commissioning and/or start-up of the Facility up to SC of Train 2.

Contractor shall provide a commissioning manager and a commissioning team. The
commissioning team shall interface with the construction team to ensure that
commissioning is completed in the correct sequence by system, that all
commissioning inspections and tests are conducted, and that all necessary
certificates and documents are completed as required by the EPC Agreement for
turnover at SC. Owner will monitor and liaise with Contractor's commissioning
manager.

Commissioning includes tests, inspections and adjustments carried out after
pre-commissioning activities for a given system/subsystem have been completed,
as far as practical and prior to the introduction of hydrocarbons (Feed Gas).

Chemicals will be charged as part of the commissioning program when safe to do
so.

16.3       OPERATOR TRAINING

See Section 20 of this SOW.

16.4       OPERATIONS TESTS

Contractor shall perform certain operations tests, in compliance with all
applicable requirements of the EPC Agreement. The operations tests shall be
performed prior to SC of each Train. Any issues that adversely impact the
applicable operations tests that are identified during the performance of the
operations tests shall be corrected and the operations tests repeated prior to
SC of such Train.

[***].

17.0       SIMULTANEOUS OPERATIONS

Contractor shall avoid impact to operations of and LNG production from Train 1
while Train 2 is being constructed or commissioned. Contractor shall also design
the Facility in such a manner that the Expanded Facilities may be commissioned
and constructed without impact to operations and LNG production. Contractor
shall, working closely with Owner personnel, prepare a plan for simultaneous
operations (SIMOPS). The SIMOPS plan shall address the measures to be taken to
address the risks to operating plant, personnel, and the environment posed when
construction activities are going on in close proximity to the operating
facilities. [***].

Contractor shall supply and erect a temporary fence between Contractor’s
construction area and the construction areas of the AEP’s 138 kV electrical
switchyard and the Rio Bravo Pipeline custody transfer battery limit metering
station. Contractor shall include removal and disposal of the fences when AEP or
Rio Bravo Pipeline, whichever is the applicable party, notify the Contractor
that construction of their facilities is complete and request Contractor to
remove the temporary fence and erect permanent fencing. Contractor shall supply
and erect permanent fencing around the AEP and Rio Bravo Pipeline sites where
required by the EPC Agreement.

Contractor shall supply and erect temporary fences between areas of the Site
where construction, pre-commissioning or commissioning is ongoing and those
areas of the Site in which plant Equipment is live and operational.  Gates shall
be provided in the temporary fencing to permit access between the live operating
areas of Train 1 and the Train 2 Facilities and other construction work areas
still under Contractor’s control during construction and pre-commissioning.
Access between the Train 1 live working areas and the Train 2 and other
non-operational work areas shall be restricted and controlled by security
guards. Contractor shall remove and dispose of temporary fences between live
operating areas following SC of Train 2.

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Contractor shall engineer, procure, install, commission and test piping tie-ins
in Trains 1 through 2 and common facilities as required to tie-in future Trains
4 through 6.  This includes both process and utilities connections, and is
required for any connection that would otherwise necessitate a shutdown of any
of Trains 1 through 3 or the common facilities.

18.0       OPERATIONS AND MAINTENANCE MANAGEMENT SYSTEMS AND PROCEDURES

Contractor shall jointly with Owner develop the operations and maintenance
management systems and procedures described below.

18.1       ASSET INTEGRITY MANAGEMENT SYSTEMS

Contractor shall undertake, in collaboration with Owner’s personnel, a review of
commercially available asset integrity management systems (AIMS) and
computerized maintenance management systems (CMMS). Contractor is to assist
Owner in identifying and selecting systems suitable for deployment for
operations with the relative costs and benefits of the systems factored into the
selection.

Contractor shall provide home office services for the above, and to procure,
upon agreement with Owner, such systems. The actual purchase of such systems
shall not be included in Contractor’s scope.

Contractor shall obtain and load all relevant baseline data into such systems.
Such systems shall be ready for use for RFSU for Train 1 and shall be used in
start-up and initial operations. Such systems shall be loaded, launched and
maintained such that Contractor will provide to Owner a seamless transfer at SC.

[***].

18.2       OPERATIONS MANAGEMENT PROCEDURES

Contractor shall prepare the operations management procedures necessary for the
activities listed below, working closely with Owner’s operations and maintenance
personnel to agree the content and level of detailing required.

[***].

18.3       OPERATIONS AND MAINTENANCE PROCEDURES AND MANUALS

Contractor shall provide any operations and maintenance manuals and procedures
necessary for the Facility, working closely with Owner’s operations and
maintenance personnel to agree the content and level of detail required.

18.3.1 Maintenance Procedures

Contractor shall provide maintenance procedures, including but limited to, those
listed below:

            Catalyst change-out on a piece-of-equipment-basis and including an
isolation procedure (E-N/P);

            Non-statutory preventative maintenance (PM) program on a
piece-of-equipment-basis including an isolation procedure (E-N/P) and condition
monitoring system (CMS) set up for applicable rotating equipment items; and

            Inspection, and repair procedures for plant equipment including
rotating equipment, pressure vessels (including internals), instrumentation,
electrical equipment, and package equipment.

Page 54 of 68

 

18.3.2    Statutory Maintenance / Inspection Procedures

Contractor shall provide the statutory maintenance / inspection procedures,
including but limited to, those listed below:

            Set up of statutory examination procedures for pressure vessels and
pressure systems in accordance with 49CFR 193/API 510;

            Set of statutory examination procedures for pressure relieving
devices in accordance with 49CFR 193;

            Set of statutory examination procedures for pressure systems
(piping) in accordance with 49CFR 193 including recording as built thickness
measurements;

            SIL level 3 periodic maintenance inspection procedures including
alarm and shutdown procedures verification record and software backups;

            Fiscal metering calibration details and test protocol;

            Cathodic protection inspection;

            Set up MSDS database and inventories record;

            Lifting equipment inspection;

            Inspection and maintenance of fire and gas (F&G) detection system
equipment and fire extinguishers;

            Water discharge monitoring for compliance with regulatory and
permitted requirements; and

            Hazardous inventory reporting (FERC).

18.3.3 Operations and Maintenance Manuals

Contractor shall prepare all required Facility operations and maintenance
manuals for review and agreement by Owner, and shall include but not necessarily
be limited to:

            Operation and maintenance manuals for each process system;

            Marine facilities operating procedures manual.

Preparation of the operations manual required under 33 CFR 127.305 and 49 CFR
193.2509 (and FERC guidelines) and the marine operations manual shall be the
responsibility of Owner based on the operating and maintenance manuals provided
by Contractor.

The schedule for preparation of these documents shall be mutually agreed by
Contractor and Owner.

Contractor shall provide electronic copies of the final versions of the forgoing
documents upon agreement with Owner.

19.0       PREPARATION OF PRECOMMISSIONING, COMMISSIONING, AND INITIAL START-UP
PROCEDURES AND MANUALS

Contractor shall prepare the following pre-commissioning and Commissioning
instructions, start-up and shutdown procedures, and operating and maintenance
manuals for review and agreement by Owner.

            Pre-commissioning and Commissioning instructions;

            Initial Start-up and shut down procedures including both normal and
emergency shutdown (E-N/P);

            Operation and maintenance manuals; and

            Marine facilities operating procedures manual.

The schedule for preparation of pre-commissioning, commissioning and start-up
documentation shall be mutually agreed by Contractor and Owner.

Contractor shall provide electronic copies of the final versions of the forgoing
documents upon agreement with Owner.

Manuals and procedures shall include the specific training subjects listed under
Section 20.2 of this SOW.

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Preparation of the operations manual required under 33 CFC 127.305 and 49 CFR
193.2509 (and FERC guidelines) and the marine operations manual shall be the
responsibility of Owner based on the operating and maintenance manuals provided
by Contractor.

20.0       CONTRACTOR PROVIDED TRAINING FOR OWNER PERSONNEL

Contractor shall provide training for up to [***]  ([***]) Owner’s operations
and maintenance personnel. Owner’s operations personnel will assist Contractor
in start-up and initial operations of the Facility.

Owner will provide operating and maintenance personnel for training in
accordance with the EPC Agreement.

20.1       PROVISION OF OPERATIONS TRAINING SIMULATOR

Contractor shall provide an operations training simulator for training Owner's
operations personnel. The training simulator shall be used for typical start-up,
operating, and upset scenarios. Contractor shall propose a list of scenarios to
include with the training simulator. The training simulator shall be ready to
begin operator training not later than one (1) year prior to RFSU for Train 1.

The Operations Training Simulator will be located in the operator training room
in the central control building. The operator training room shall contain the
following equipment:

            Two (2) Training Simulator Operator Consoles, complete with ICCS
workstations;

            Trainer ICCS workstation; and

            ICCS Printer.

20.2       PREPARATION OF TRAINING MATERIALS

Contractor shall prepare and provide training materials necessary for training
of Owner’s operations and maintenance personnel in all activities, including but
not necessarily limited to:

            Process overview;

            First aid;

            OSHA compliance training;

            Visitor induction (training for general visitors to Site before
access to Site);

            General Subcontractor induction (training for Subcontractor before
access to Site);

            Fire & emergency response;

            Permit to work training;

            Confined space entry / awareness;

            Lock-out / tag-out;

            Storage & handling of hazardous wastes;

            Operations training simulator (See Section 20.1);

            Mechanical discipline specific training;

            Electrical discipline specific training;

            Instrument & control discipline specific training;

            Telecoms systems discipline specific training; and

            Certification of inspectors (to relevant code requirements).

20.3       PREPARATION OF TRAINING MATERIALS FOR SUBCONTRACTOR EQUIPMENT
PACKAGES

Contractor shall arrange for Subcontractor (vendor) Equipment package providers
to prepare and supply training materials necessary for training of Contractor’s
and Owner’s personnel in installation, commissioning, start-up, operation and
maintenance of such Equipment.

Page 56 of 68

 

20.4       TRAINING COURSES

Contractor shall provide all required training courses, including any by
Subcontractors, for Owners operations and maintenance personnel. Training shall
be based on operational roles and responsibilities. Contractor shall advise and
get agreement with Owner for use of any third-party training programs or
providers. [***].

20.5       TRAINING COURSES FOR VENDOR EQUIPMENT PACKAGES

Contractor shall arrange for Equipment Subcontractors to provide training of
Owner’s operation and maintenance personnel.

All course manuals and instruction books shall be provided to trainees at the
beginning of the course. Training and training materials shall be in the English
language.

21.0       ASSISTANCE TO OWNER

21.1       REQUIRED SUBMISSIONS TO REGULATORY AGENCIES

Contractor shall be responsible to maintain any Permit-required design change
logs. Any logs already in progress will be handed over to Contractor’s custody
upon EPC Agreement execution.

Contractor shall, when requested, provide technical assistance to Owner in
relation to the engineering specification and operation of the facilities and
systems included in Contractor’s scopes of work. Such technical information
shall include preparation and packaging of the design documentation required to
support each Permit application or submission for regulatory purposes, including
submissions for release of construction packages, and documentation needed to
obtain operating license(s).

21.2       TECHNICAL SUPPORT TO OWNER’S REGULATORY SERVICES CONSULTANTS

Contractor shall provide technical information related to the design,
construction, commissioning, start-up and operation of the Facility to Owner’s
third-party regulatory consultants when requested and to the extent necessary to
support Owner’s regulatory obligations.

22.0       THIRD-PARTY INTERFACES

Third-party interfaces and associated dates of supply for the Work will be per
the EPC Agreement. The following sections address the main Project third-party
interfaces:

22.1       FEED GAS SUPPLY INTERFACE WITH RIO BRAVO PIPELINE

Contractor shall perform the following:

            Exchange of engineering information necessary to define the
operating and design conditions for both the Facility and the Rio Bravo Pipeline
Company LLC custody transfer battery limit metering station;

            Site preparation of the area designated for the Rio Bravo Pipeline
Company LLC custody transfer battery limit metering station to the agreed
surface elevation, including any required cut, fill and grading of the battery
limit site;

            Erect temporary and permanent fencing (and gates) around the area
allocated for construction of the Rio Bravo Pipeline custody transfer battery
limit metering station;

            Exchange of engineering information necessary to define the precise
locations and details for the following connections between Rio Bravo Pipeline
Company LLC and the Project:

§

Piping (assumed at fence-line perimeter), and

§

Electrical, instrument and telecommunications cabling, coiled for installation
in the local equipment room;

Page 57 of 68

 

            Mount Rio Bravo Pipeline cabinets in the CCB, and connect to
ABB-provided operator panels in the Central Control Room; and

            Coordinate construction activities with Rio Bravo Pipeline Company
LLC to minimize interference between each other’s activities.

All other works within the Rio Bravo Pipeline Company LLC custody transfer
battery limit metering station shall be performed by Rio Bravo Pipeline Company
LLC.

22.2       FRESH WATER SUPPLY INTERFACE WITH BND

It will be Owner’s responsibility to arrange with the local utility provider BND
for installation of a fresh water pipeline from the local municipal supply to
provide fresh water for construction and operation of the Facility. [***].

Contractor shall perform the following:

            Exchange of engineering information necessary with the BND, or its
contractor responsible for design, construction, commissioning, and start-up of
the new fresh water supply main to fully define the operating and design
parameters, and precise locations and details for connection to the new line;
and

            Tie-in to the new line when available in accordance with the
agreement reached between the Owner and the BND, and commission and operate the
interconnection in accordance with procedure agreed with the water supply
company.

[***].

22.3       SEWAGE COLLECTION INTERFACE WITH BND

It will be Owner’s responsibility to arrange with the local utility provider for
the installation of a pipeline or pipelines for the return of sanitary sewage
from the Facility to a nearby public treatment works for treatment.  Contractor
shall provide lift stations within the Facility and pipe sewage to tie-ins to
the new sewage return line at points located within the utility corridor running
along the northern perimeter of the Facility near to the eastern entry access
road, and possibly with a second tie-in connection near the main West entry to
the site (serving the temp facilities area).

Contractor shall perform the following:

            Exchange of engineering information necessary with the contractor
responsible for design, construction, commissioning, and start-up of the new
sewage collection main to fully define the operating and design parameters, and
precise locations and details for the connection to the new line; and

            Tie-in to the new line when available in accordance with agreement
reached with the sewage pipeline operator, and commission and operate the
interconnection in accordance with procedure agreed with the sewage handling
company (BND).

Provisional locations for connection by Contractor to the new sewage return
pipeline are indicated on the Battery Limit Schedule (BL-04) referenced in the
BOD.

Contractor shall also be responsible to liaise with the sewage treatment plant
on the discharge of trucks collecting sewage until the permanent pressurized
header(s) are available. Truck use is not excluded to cover some of the peak
demand on site in construction, subject to peak manning levels projected by the
Contractor.

Page 58 of 68

 

22.4       138 KV SWITCHYARD INTERFACE WITH AEP (POMPANO)

Contractor shall supply and install cables for 2 off 138 kV feeders from the new
AEP’s 138 kV Pompano switchyard to the Facility’s main intake substation number
1.  Cable installation will be including the part in Pompano switchyard up to
the AEP switchgear. AEP shall connect the 138kV feeder cables to their own
switchgear.

Contractor shall supply and install all control- and fiber optic cables required
for the connection between AEP’s and Main Intake switchgear including the part
in Pompano switchyard. AEP shall make the required connections onto their own
equipment

[***]

22.5       LOCAL TELECOMMUNICATIONS INTERFACE WITH [***]

Contractor shall perform the following:

            Exchange of information necessary with the telecommunications
systems provider required for supply of the required connection(s); and

            Reasonably assist [***], as necessary, during connection to the
Facility system.

22.6       NITROGEN SUPPLY INTERFACE WITH OWNER’S NITROGEN SUPPLIER

Contractor shall perform the following:

1.

Be responsible for engineering and design interface management for the interface
with Owner’s nitrogen supply facility provider.

2.

Exchange engineering information necessary with Owner’s nitrogen supplier to
define operating and design conditions, precise locations and details for all
connections for both the Facility and the nitrogen supplier’s Equipment;

3.

Coordinate Construction activities with the contractor responsible for
construction, installation, start-up and operation of the nitrogen supply to
minimize interference between each other’s activities;

4.

Site preparation of the area designated for the nitrogen supply to the agreed
surface elevation, including any required cut, fill and grading of the battery
limit site;

5.

Erect temporary (and possibly permanent) fencing and gates around the area
allocated for construction of the new nitrogen supply facility.

6.

Provide road access into the facility and construct internal roads within the
facility in accordance with nitrogen supply provider’s plot plan and layout
drawings.

7.

Install foundations, and piling where necessary, for the new nitrogen supply
facility based on location drawings and foundation design drawings provided by
the nitrogen supply provider.

8.

Design, supply and construct drainage for the new nitrogen supply facility to
connect into the surrounding drainage network. Location for drainage channels
and pipes shall be based nitrogen supply provider’s facility layout drawings /
plot plan.

9.

Design, supply, and install power supply feeders and ICSS links to nitrogen
supply facility switchgear. Power distribution from nitrogen supply facility
switchgear to users within the facility to be by contractor responsible for
nitrogen plan equipment.

10.

Provide electrical earthing for the new nitrogen facility.

11.

Design, supply and install telephone and internet access to the nitrogen supply
facility local equipment / switchgear building.

12.

Provide surface finishes, hard standing areas, and stoning in accordance with
nitrogen supply provider’s plot plan and layout drawings.

Page 59 of 68

 

22.7      TEMPORARY FENCING AND UTILITIES FOR EXPANSION OPTIONS

In a similar fashion as the SIMOPS description for Train 2, future options on
expansion steps, such as the construction of a third tank, a second jetty, the
LNG truck-loading bays, and Train 3, followed by further masterplan components
of the Expanded Facility, shall always be accompanied by a detailed plan to:

            Regulate construction access and temporary facilities segregation
from operating units;

            Contain extra safety precautions and readiness to stop work and
evacuate on demand;

            Provide laydown areas and access routes to support expansion steps;

            Arrange for metering to segregate utilities used for construction
from Owners operations usage; and

            Embed in the design of various disciplines space and tie-in
provisions for expansion steps, to avoid Facility shutdowns.

22.8       BROWNSVILLE NAVIGATION DISTRICT TARIFF

Contractor shall familiarize itself with the Port of Brownsville Tariff No. 6
issued on December 6, 2016 and effective as of March 1, 2017 (as amended) and
the authorized rates, rules and regulations governing the use of the BSC.
Contractor shall include in its scope the cost of all wharfage, port, harbor and
other charges incurred through Contractor and its Subcontractors’ and
Sub-subcontractor’s use of the POB facilities to access the Site during
construction, Commissioning, start-up and testing of the Facility.

22.9       ENVIRONMENTAL IMPACT STATEMENT DIVISION OF RESPONSIBILITY

FERC issued a Draft Environmental Impact Statement in October 2018 and a Final
Environmental Impact Statement on April 26, 2019 (collectively, the “EISs”). 
Contractor and Owner have reviewed the action items set forth in such EISs and,
as between Owner and Contractor, have developed and agreed a division of
responsibilities (“DOR”) for each Party’s obligations in relation to the action
items set forth in the EISs.  The items identified in Appendix A-5 as being
Contractor actions are included within this SOW. Any changes to Appendix A-5
shall be implemented in accordance with the terms of the Agreement.

23.0       FACILITIES FOR OWNER PERSONNEL

23.1       OFFICE ACCOMMODATION FOR OWNER PERSONNEL IN CONTRACTOR’S HOME OFFICE

Contractor shall provide the following serviced office accommodation for Owner
personnel in Contractor’s Home Office:

            Ten (10) offices (walled, standard size);

            Twenty (20) cubicles (standard size); and

            One (1) 12-person capacity dedicated conference room.

Contractor shall provide Owner with access to Contractor’s networked printer and
scanning facilities locally. Owner will supply all computers for Owner’s
personnel.

23.2       TEMPORARY FACILITIES PROVIDED AT SITE BY CONTRACTOR FOR OWNER’S
PROJECT PERSONNEL

Contractor shall provide the following serviced temporary Project Site offices
for Owner’s project personnel up to SC of Train 2

Page 60 of 68

 

[***]

24.0       PERFORMANCE GUARANTEES AND PERFORMANCE TESTING

Contractor shall provide Performance Guarantees as required by the EPC
Agreement.

Contractor shall carry out Performance Tests to demonstrate the Facilities meet
the Performance Guarantees and Minimum Acceptance Criteria specified in the EPC
Agreement.

25.0       PROCESS LICENSE FEES

Contractor shall obtain the APCI, BASF and [***] process licenses and novate to
Owner. Contractor shall include the cost of APCI, BASF and [***] process license
fees required for the design of the Project.

26.0       DOCUMENT NUMBERING

Contractor shall number general project documents and engineering deliverables
by the Owner numbering specification which will be revised and updated as an
early issuance by Owner in LNTP. This will require Contractor to request
document numbers for Engineering Technical Documents before they are issued. For
Contractor's documents that are other than Engineering Technical Documents (such
as material requisitions and PO's, subcontracts, supplier/subcontractor
documents) Owner will require Contractor to provide its intended Document
Numbering, Revision and Issue States Specification for such items during early
LNTP. While Owner does not intend to impose a numbering system on such
documents, understanding how they will eventually be numbered is necessary to
finalize the set-up of Owner’s document management system at that time.

27.0       RECORD AS-BUILT DRAWINGS AND SPECIFICATIONS

Contractor shall provide Record As-built Drawings and Specifications as required
by the EPC Agreement.

28.0        HANDOVER DOCUMENTATION

Contractor shall provide handover documentation as part of SC of Train 1 and SC
of Train 2, as required by the EPC Agreement. Most information shall be
available prior to RFSU to support start-up and initial operations

29.0       INFORMATION SYSTEMS FOR OWNER USE

Contractor shall set up and implement those information systems necessary to
perform detailed engineering, design, procurement, construction,
pre-commissioning, Commissioning and start-up of the facilities, and for initial
operation of Train 1, and subsequently for Train 2, between RFSU and SC of the
respective Trains.

Contractor to carry out a review, jointly with Owner, of commercially available
information management systems in order for Owner to select the most suitable
information management system(s) for future operation of the Facility, and for
Contractor to set up and implement those systems for operation of the Facility;

Contractor shall obtain, provide and load data into Owner’s operations and
maintenance information management tools to deliver seamless transition to Owner
for Owner’s operation and maintenance commencing at SC of each Train.

[***].

Page 61 of 68

 

30.0       EXCLUSIONS FROM CONTRACTOR’S SCOPE OF WORK

Owner will provide:

            Natural Gas Supply

Owner will supply sufficient natural gas as required by Contractor for efficient
commissioning, start-up and operation of the Project.

            Permanent Power Supply

Owner will provide power for the start-up and initial operation of each Train
from commencement of commissioning activities for Train 1.

            Permanent Water Supply

Owner will provide water for the start-up and initial operation of each Train
from RFSU.

            Permanent Sewage Disposal

Owner will provide for sewage disposal from the permanent Facility from RFSU of
each Train.

            Permanent Internet Connection

Owner will provide for permanent internet service for the Facility following SC
of Train 1.

            Plant Security

Following SC for Train 1, Owner will provide security for all facilities forming
Train 1.

Prior to SC Train 2, Train 2 shall be separated from Train 1 using a temporary
fence provided and installed by Contractor. Access to and from Train 1
(including Utilities, LNG Tank area and Jetty) will be controlled by Owner.

The flare area will be temporarily fenced off by Contractor to allow for access
to be strictly controlled by Owner’s security personnel during startup and
operation of Train 1.

            Call-off and General Service Contracts

The following call-off services will be supplied by Owner as of SC of each
Train:

            Equipment maintenance contracts (LTSA);

            General maintenance and turnaround contracts;

            ICSS support;

            Laboratory operations

            Jetty line handling contract;

            Tug boat contract;

            Pilotage contract (shipping); and

            Analyzer reference gas supply.

            Computer hardware (laptops, desktops, work stations) and software
for Owner’s use will be provided by Owner.

            Owner will obtain certain Permits listed in the EPC Agreement.

31.0       [***]

[***].

 

 

 

Page 62 of 68

 

 

APPENDIX A-1:NOT USED

Page 63 of 68

 

APPENDIX A-2:     PRICED OPTION – LNG STORAGE TANK 3

The scope of Priced Option, LNG Storage Tank 3, also referenced in FEED
deliverables as Option B, is indicated on drawing 195910-000-PI-DR-1003 showing
scope options beyond the Facility.

In summary:

1.    The design and details of the LNG Storage Tank 3 shall be a copy of the
first two LNG storage tanks, be it that foundation details may differ a little,
subject to the findings of soils investigations;

2.    To create process connections to LNG run-down, vapor return and
ship-loading, the main east-west pipe-track in the storage tank area will need
to extend beyond Jetty 1 and LNG Storage Tank 2 connections, using pre-installed
tie-ins.;

3.    The piping scope shall include the installation of tie-ins for main piping
to and from LNG Storage Tank 4. (Should the actual sequence become different,
e.g. by first building the third storage tank, before the second berth, then
additional supporting infra such as LNG loading balance line and east-west track
extension will need to be added to the third tank scope);

4.    LNG Storage Tank 3 will require utility connections for supply of water,
fire water, electric power, instrument air, and nitrogen, while the ICSS and
telecoms systems will also require additions to support operations of Tank 3:

a.    The base assumption is Jetty 2 will constructed concurrent, or earlier
than Tank 3. The Jetty Monitoring Building that also provides electrical
substation and LER functionalities will for the Tank 3 only require addition of
required Equipment;

b.    If Tank 3 as an option is taken before Jetty 2, the Jetty Monitoring
Building will be part of the Tank 3 scope; and

5.    Site grading, roads, and drainage will need additions to support Tank 3.
On the basis the LNG impoundment basin scope is part of Jetty 2, a connecting
LNG drain channel will need to connect to that basin.

6.    Option B adds Utility 2 Substation, [***] and Jetty Monitoring Building
Substation, [***] (includes LER [***])

Page 64 of 68

 

APPENDIX A-3:     PRICED OPTION – JETTY 2

The scope of Priced Option, Jetty 2 (or Berth 2), also referenced in FEED
deliverables as Option C, is indicated on drawing 195910-000-PI-DR-1003 showing
scope options beyond the Facility .

In summary:

1.    The design and details of Jetty 2 shall be a copy of Jetty 1, be it that
foundation details may differ a little, subject to the findings of soils
investigations;

2.    Installing (mattress based) shore protection under the jetty structure
substructures for Jetty 2 are completed;

3.    To create process connections to LNG loading and the jettys’
interconnecting lines, LNG circulation lines, the main vapor return, and the
main east-west pipe track in the storage tank area will need extending beyond
Jetty 1 and LNG Storage Tank 2 connections utilizing pre-installed tie-ins:

a.    The base assumption shall be that Jetty 2 precedes Tank 3, and thus
includes the pipe-track expansion. The piping scope shall include tie-ins to
facilitate future connections of Tank 3 and Tank 4. The piping scope shall also
include the pipe-track towards the south levee and crossing up to the new jetty
trestle;

4.    Jetty 2 shall require utility connections for supply of water, fire water,
electric power, instrument air, and nitrogen, while the ICSS and telecoms
systems will also require additions to support operations.

a.    With the base assumption that Jetty 2 precedes Tank 3, the Jetty
Monitoring Building that provides electrical substation and LER functionalities
for Tanks 3 and 4 will for Jetty 2 require building erection and fit out.
(Additional electrical, instrumentation and telecommunications Equipment for LNG
Storage Tanks 3 and 4 will be added later);

5.    Jetty 2 enables the hook-up of 2 LNG carriers at the same time, and once a
third tank is added with associated loading pumps installed, allows increased
total vessel loading rates; and

6.    Site grading, roads, and drainage will need additions. The LNG impoundment
basin will be assigned to the scope of Jetty 2.

7.    Option C adds Utility 2 Substation, [***] and Jetty Monitoring Building
Substation, [***] (includes LER [***])

Page 65 of 68

 

APPENDIX A-4:     PRICED OPTION – LNG TRUCK LOADING

The scope of Priced Option for truck loading facilities, or the first 2 LNG
truck-loading bays, and also referenced in FEED deliverables as Option D, is
indicated on drawing 195910-000-PI-DR-1003 showing scope options beyond the
Facility.

In summary:

1.    The detailed design and engineering of the first two LNG truck-loading
bays shall be part of the EPC Work, as it allows OSBL integration of pipe-tracks
and racks, and proper arranging of associated utilities and drainage facilities
in the OSBL area;

2.    The piping design shall allow for the LNG loading and circulation lines
and the vapor return line, with capacity allowances to add in future
truck-loading bays 3 and 4;

3.    The area needed for the construction of the first 2 truck-loading bays
will largely have been graded and paved concurrent with the condensate
truck-loading bays as part of the base scope. Paving and structures will need to
be added to support utilities like fire water deluge, and enable expansion of
two future LNG truck-loading bays;

4.    Each LNG truck-loading bay shall have its own dedicated weigh-bridge to
accurately monitor the LNG loading, in particular if warm trucks need gassing-up
and/or cool-down. The LNG truck-loading bays will use electrical substation, LER
and local monitoring room facilities, already included in the Facility scope for
C5+ truck-loading;

5.    The LNG truck-loading bays will require utility connections for supply of
water, fire water, electric power, instrument air, and nitrogen, while the ICSS
and telecoms systems will also require additions to support operations of the
loading bays. It is assumed this Equipment can be installed inside architectural
buildings already included in the Facility for condensate loading.

6.    Site grading, roads, and drainage will need additions. The LNG impoundment
basin and drain channels leading to it will be part of the option of LNG
truck-loading bays.

Page 66 of 68

 

APPENDIX A-5:     ENVIRONMENTAL IMPACT STATEMENT COMMITMENTS

The “Appendix A-5 Environmental Impact Statement Commitments” document was
transmitted through Asite from Owner to Contractor on May 24, 2019.  The Parties
hereby agree that this document is incorporated by reference into this Agreement
and forms a part of the Scope of Work, and such document is fully incorporated
into this Agreement as if fully repeated herein.

Page 67 of 68

 

APPENDIX A-6:     [***] 

[***] 

 

 

Page 68 of 68

 

EXHIBIT A-6.1

[***]

[***]

 

 

 

 

Appendix A-6

 

 

[***]

 

 

 

 

 

 

 

 

EXHIBIT A-6.4

 

[***]

 

 

EXHIBIT A-6.5

[***]

[***]

 

 

Picture 2 [next20190630ex107a47daf001.jpg]

 

Schedule A-2

EPC BASIS OF DESIGN

FOR

RIO GRANDE LNG FACILITY

RG-000-PE-DB-0001

[***]

 

 

 

 

 

ATTACHMENT B

CONTRACTOR DOCUMENT DELIVERABLES

B-1

 

1.    INTRODUCTION

In addition to the other requirements under the Agreement, Contractor shall be
responsible for providing Owner with all the Drawings, Specifications,  other
documents, electronic models and electronic databases required under this
Attachment B but not strictly limited to those listed below but required to be
provided by Contractor to Owner under the Agreement. Hereinafter, any reference
to documents shall mean the Drawings, Specifications and other documents,
electronic models and electronic databases (the “Documents”) required under this
Attachment B, unless specifically stated otherwise.

2.    OBJECTIVES

The objective of this Attachment B is to provide the requirements for the
creation, issuance,  review, approval, incorporation of comments, as-built, and
handover of documents required to be provided by Contractor to Owner under the
Agreement.

Where Contractor uses Subcontractor for documents listed in Schedule B-1, the
requirements in Attachment B on Contractor will apply to Subcontractor.

3.    DOCUMENT MANAGEMENT, DISTRIBUTION, AND OWNER RESPONSE

Contractor and its Subcontractors shall prepare all documents as and when
necessary for the performance of the Work, and in addition, Contractor shall
distribute or make available to Owner the documents described in this Attachment
B within the times required under this Attachment B.

Within [***] ([***]) Days after issuance of LNTP, Contractor shall issue a
document register (hereinafter “Master Document Register”) containing a listing
of the required documents pertinent to the Work authorized by such Notice that
Contractor is aware of at the time of its issuance as defined in Section 3.3B of
Agreement. This Master Document Register shall be updated throughout the Project
as the design, engineering, procurement,  construction, commissioning, start-up,
and training progresses and the need for further documentation is identified.  A
separate document register will be developed by Contractor for Equipment
Subcontractor documentation and issued to Owner for review.

Except as otherwise provided in the Agreement, Contractor shall issue the
document transmittal by email to an email address designated by Owner.  The
transmittal for the associated documents shall state the action to be taken,
i.e. “For Review” or “For Information.”

Schedule B-2 provides a representative listing of the requirements for Equipment
Subcontractor documentation and descriptions of the contents of such
documentation to be provided by Equipment Subcontractors.  Contractor shall
distribute to Owner the Equipment Subcontractor documentation in Schedule B-2 in
accordance with the timing defined by Schedule B-2.  For purposes of this
Attachment B, “Equipment Subcontractor” shall mean any Subcontractor or
Sub-subcontractor that manufactures or supplies Equipment.

B-2

 

3.1.  Contractors Document Management System

Contractor shall populate and maintain a common to industry electronic document
management system (“EDMS”) for the duration of the Project.  The Contractor EDMS
shall maintain historical versions of previously issued documents as well as
recordings of revision logs.  The EDMS shall facilitate access to Project
documentation from any location where Work is performed including engineering
offices, fabrication facilities and the Site.  Contractor’s EDMS shall be the
storage location for all Project electronic documentation.  Any hard copy
(paper) documents shall be filed and maintained in a structured filing system
residing at Contractor’s home office or Site.

3.2.  Document Issuance Classification

In addition to other requirements of the Agreement, Schedule B-1 provides
details of documents Owner requires for its review and comment, or for its
approval or not approved as provided in Section 3.3C of the Agreement (labeled
in Schedule B-1 as “Review” or “Approval” accordingly, or for its information
only (labeled in Schedule B-1 as “For Information”).

3.2.1.  For Review

In accordance with Section 3.3C of the Agreement, Owner shall be entitled to
review and provide comments, which Contractor shall consider but is not
obligated to incorporate unless the comment relates to a non-compliance with the
requirements of the Agreement, are listed as “For Review” in Schedule B-1 and
Schedule B-2.

3.2.2.  For Approval

In accordance with Section 3.3C of the Agreement, Owner shall be entitled to
review and approve or not approve all documents listed as “For Approval” in
Schedule B-1 and Schedule B-2.

3.2.3.  For Information

Documents labeled in Schedule B-1 and Schedule B-2 as “For Information” is to
keep Owner informed as to the development and progress of the
Project.  Contractor shall review any comments provided by Owner with respect to
such “For Information” documents and advise Owner of their disposition.

3.3.  Document Return Classification

When Contractor issues a document “For Approval”, Owner may at its discretion
undertake a review of the document in accordance with Section 3.3C of the
Agreement.  Owner will issue a response to Contractor containing the return
classification and associated comments in accordance with Section 3.3C.3 of the
Agreement.

B-3

 

Contractor shall review one (1) set of consolidated written comments provided by
Owner,  in a format to be mutually agreed by the Parties, with respect to such
“For Approval” documents and advise Owner of their disposition.  Owner’s return
classification and any associated comments with respect to such documents shall
in no way limit or alter Contractor’s responsibility to perform and complete the
Work in accordance with the requirements of the Agreement.

3.3.1.     Approved

When Owner takes no exception to any information presented in the document and
has no associated comments, Owner will issue to Contractor a response as
“Approved” in accordance with Section 3.3C of the Agreement.  In this case
Contractor may proceed with the Work as so indicated in the document.

3.3.2.     Approved with Comments

When Owner takes no exception to the overall document but has specific comments
in relation to the document, Owner will issue to Contractor a response as
“Approved with Comments”  in accordance with Section 3.3C.3 of the Agreement.
 In this case Contractor shall incorporate Owner’s comments in the document,
issue the document for use (and in parallel issue the revised document to Owner
for information) and proceed with the Work as so indicated in the revised
document. At Owner’s discretion, Owner will review the issued document to
confirm that comments are appropriately reflected in the document and, where
necessary, notify Contractor of any discrepancies related to such
comments.  Upon Contractor’s receipt of such notification, Owner and Contractor
will in a timely manner agree as to the final content of the document and
Contractor will revise and re-issue the document accordingly.

3.3.3.     Not Approved

When Owner takes specific exception to the document, Owner will issue to
Contractor a response as “Not Approved” and provide Contractor a written
statement describing the reasons for such non-approval in accordance with
Section 3.3C.3 of the Agreement.  In this case Contractor shall promptly revise
and re-submit the document “For Approval” in accordance with Section 3.3C.5 of
the Agreement.

If Owner does not issue any comments, proposed changes or approvals or
non-approvals within such time periods set forth in Section 3.3C.3 of the
Agreement, Contractor may proceed in accordance with 3.3C.4 of the Agreement.

4.    AS-BUILT DOCUMENT CLASSIFICATION

Contractor shall develop a procedure describing the process for the management
of Progress As-

B-4

 

Built documents and Record As-Built documents (collectively, “As-Builts”), which
shall include:

·

identification of deliverables to be As-Built

·

the handover of As-Builts

·

the approach that shall be used to verify the technical correctness and
completeness of the information in relation to the As-Builts

·

criteria used to determine whether any particular document categorized as
As-Built in Schedule B-1 shall be revised to represent the observed as-built
condition.

Such procedure shall be submitted to Owner within [***] ([***]) Days after
issuance of NTP, for Owner’s review.

Contractor shall utilize the following two (2) criteria to define the completed
status of documents:

4.1. As-Built (“AB”)

The information contained in this category of Drawings and Specifications is
subject to satellite verified dimensional control and/or visual survey and shall
be verified by Contractor as (i) conforming to the tolerances specified on the
Drawings and Specifications, and (ii) being a true representation of the
as-built condition of the Work.

During the Commissioning and start-up of various portions of the Facility,
Progress As-Builts (redline mark-ups) shall be maintained in a conspicuous
location in the administration building and upon request be made available to
Owner’s representatives for inspection.

Record As-Builts shall be revised to the next available revision number and
date-stamped as a Contractor authorized “As-Built.” The incorporation of
as-built information into documents to produce the Record As-Builts shall be
undertaken using the same means by which prior revisions were produced. 
Issuance of Record As-Built documents containing any hand written or redline
mark-up information, discoloration, holds or clouds is strictly not allowed.

The requirements for As-Built documents pursuant to Section 3.3F of the
Agreement shall apply equally to documents created by Contractor and those
documents issued to Contractor by its Subcontractors and Sub-subcontractors.

The categories of documents required to be verified in accordance with this
Section 4.1 are shown in Schedule B-1.

4.2. Latest Issue Revision (“LR”)

This category of documents is limited to its latest issued revision, including
those documents that have been updated in accordance with the Contractor change
control system to reflect the latest “Issued for Construction” or “Issued for
Design” or “Issued for

B-5

 

Information” status of the document.

The accuracy of the content of “LR”  Drawings, Specifications and other
documents may not be verified by dimensional or visual survey and is only
representative.

5.    DOCUMENT HANDOVER

Contractor shall develop a detailed procedure describing handover of
documentation to Owner including:

·

how documents will be indexed and organized for handover

·

the transmittal media to be used for electronic file handover

·

the packaging and shipping of hard-copy documents

·

type and structure of associated metadata

·

the schedule identifying the dates by which documents will be handed over.

·

detailed formats for hard-copy documentation

Such procedure shall be submitted to Owner within [***] ([***]) Days after
issuance of NTP, for Owner’s review.

Unless otherwise prescribed in the Agreement, Contractor shall provide to Owner
an electronic copy of all documents required in this Attachment  B and elsewhere
in the Agreement.  For Record As-Built documents required under the Agreement,
Contractor shall provide Owner with Record As-Built Drawings in electronic
format identified in Schedule B-1 and the formats set forth in Section 3.3F of
the Agreement.

For certain categories of documents specified in Schedule B-1 Contractor shall
provide to Owner one (1) paper hard copy in the format described in this
Attachment B.

Equipment Subcontractor documentation may be delivered in the same format as
received from the Equipment Subcontractor provided they follow the requirements
herein (including those set forth in Section 5.4 below) or otherwise mutually
agreed upon by Owner and Contractor that the information is structured and
indexed in a consistent format.

Documents shall contain specific references (by document number, title, and
revision number) to related documentation.  Where documents refer to specific
equipment, the full equipment tag numbers shall be identified.  Any exceptions
to this requirement shall be subject to approval by Owner.

All documentation included in the handover document package shall be issued with
a formal handover transmittal that indexes all Drawings and documents included
in the handover document package.

B-6

 

5.1. General Requirements for Electronic Documents

For any documents for which i) Adobe PDF files are required, ii) the native
software application file is available and iii) the document requires a
certification stamp or signature on one page, Contractor shall provide the PDF
produced directly from the native software application and append a scanned
image of the stamp or signature page to the electronic Adobe PDF file.

Wherever Adobe PDF files are produced from scanning hard copies, the resulting
files shall be searchable Adobe PDF files.

All Contractor-generated Drawings shall be provided in Adobe PDF format and the
native file format indicated in Schedule B-1.  The conversion of Drawings
originating in native file formats other than the format indicated in Schedule
B-1 shall not result in the loss of data imbedded references, scaling, or impair
its legibility.

All custom files required to display and/or edit native files within their
respective applications shall be turned over to Owner along with the associated,
application configuration files, external reference files, custom fonts, custom
drawing borders, material databases and materials specifications to the extent
required to display and/or edit native files.  The use of custom fonts shall be
avoided where reasonably possible.

5.1.1.     Preparation for Handover

For the final document handover of electronic files, such files shall be
imbedded in a folder structure that replicates the document indices and
categories defined elsewhere in this Attachment B.  The “file name” shall be the
assigned document number, and the following information shall be ascribed to the
files as metadata:

·

Document title;

·

Originating computer program (e.g., MS Word, AutoCAD);

·

Discipline (e.g., electrical, process, construction);

·

Revision Number;

·

Issuance Date;

·

Source Company (either Contractor or Subcontractor);

5.1.2.     Electronic Databases

Schedule B-1 includes as part of the Documents certain electronic models,
simulations, and database files.  Such Documents shall be provided in fully
native format along with all associated setup, configuration and reference files
necessary to assure full functionality.  In addition, no such models,
simulations or database files shall be restricted by password protection or
other security features that in any way limits their functionality.

B-7

 

5.2. General Requirements for Paper (Hard Copy) Documents

Any paper hard copy of documentation required to be provided to Owner pursuant
to Schedule B-1 shall also be provided in electronic form in accordance with
Section 5.1 of this Attachment B.

All hard copies of Drawings, Specifications and other documents shall, unless
specified otherwise, be clean, legible 11” x 17” size for Drawings and 8-1/2” x
11” size for other documents, free from any type of handwritten or redline
mark-up information or discoloration.  The legibility of Drawings shall not be
impaired if they are photo-reduced to 11” x 17” size or have punched holes. The
technical content of a Drawing or Specification shall not be obscured by the
inclusion of foreign stamps.

5.3. Engineering Documentation Requirements

5.3.1.     Engineering Documentation General Requirements

Document number and document revision shall be consistent, complete and clearly
visible on all documents. Page numbers shall be clearly visible on multi-page
documents and on each page show the page number and total number of
pages.  Document attributes shall be visible on the document front sheet or
drawing.

For engineering documentation, electronic Adobe PDF files shall be created
directly from the native application software and be fully searchable without
the need for optical character recognition.

All engineering documents shall be issued final according to their appropriate
classification as defined in Schedule B-1, including any that are As-Built and
shall be issued with a formal handover transmittal.

A complete handover document index shall be provided meeting the requirements of
this Attachment B.    This index shall be issued to Owner for review no later
than [***]  ([***]) Days prior to RFSU of Train 1.

5.3.2.     Engineering Documentation Handover

All Contractor submittals of engineering documents to Owner shall be organized
in categories, with each category organized based on the type of document
submitted.   Listed below are illustrative examples of categories.

·

Specifications

·

Calculations

·

Drawings

·

General Documents and Reports

·

Agreement Procedures

·

Electronic Databases

B-8

 

5.4. Equipment Subcontractor Documentation Requirements

5.4.1.     General Requirements

Contractor shall require that Equipment Subcontractor data books and
manufacturing record books containing the documents required by Schedule B-2,
the format of which shall be defined in the procedure described in Section 5.0.

All documents and Drawings shall be individually numbered and registered in the
EDMS in a manner consistent with the structure and indexing requirements set
forth herein or otherwise agreed upon in writing between Owner and Contractor.
The integrity of internal cross-references shall be maintained.

Document number and document revision shall be consistent, complete and clearly
visible on all documents. Page numbers shall be clearly visible on multi-page
documents.

All documents within the Equipment Subcontractor data books and manufacturing
record books shall be Adobe PDF files created from the native application
software or a scanned image meeting the requirements of this Attachment B.

All final Equipment Subcontractor handover document packages shall have a
Contractor acceptance stamp signed by the package engineer verifying that the
required documentation has been approved and all other documentation has been
reviewed, is complete and technically accurate.

5.4.2.     Equipment Subcontractor Documentation Handover

All Contractor submittals of Equipment Subcontractor documentation to Owner
shall be organized in categories, with each category organized based on the type
of document submitted.  Listed below are examples of categories.

·

Equipment Subcontractor Purchase Order Information – this shall include
Equipment Subcontractor contract information, copy of purchase order (unpriced
except for any spare parts which shall be priced), master index;

·

Equipment Subcontractor Engineering Documents

·

Equipment Subcontractor Engineering Drawings

·

Equipment Subcontractor Manufacturing Records – this shall include certificate
of conformity, ITP’s, WPS, weld maps, list of tagged items, certificates and
reports by tagged item; and

·

Equipment Operating Information – this shall include installation information,
operation information, maintenance information, special tools, consumables,
utility requirements.

B-9

 

5.5. Commissioning, Start-up, and Performance Testing Documentation Requirements

Commissioning, start-up, and Performance Testing documentation shall comply with
the requirements of this Attachment B,  Attachment M, and Attachment S.

5.6. Documents to Support Regulatory Submissions

Contractor shall provide documentation required to support periodic filings with
regulatory agencies including the FERC in accordance with Section 3.12 of the
Agreement.

6.    FILES NEEDED FOR MAINTENANCE OF PLANT SOFTWARE

Contractor shall prepare and maintain a list of all handheld devices, laptops
and related software packages that are required for future maintenance
adjustments associated with Equipment-related local logic control stations.

For all computer based programmable Equipment supplied by Contractor as part of
the Work, Contractor shall provide Owner with a list of all software necessary
to maintain the programmable Equipment,  and provide any Contractor owned
customized configuration files needed for the use of such software, in both
Adobe PDF and native file formats.

 

 

B-10

 

SCHEDULE B-1

OUTLINE OF OWNER DOCUMENT SUBMITTAL REQUIREMENTS
FOR REVIEW OR INFORMATION

In addition to the requirements under the Agreement, Contractor shall be
responsible for providing Owner with the documents required under this Schedule
B-1 and Drawings, Specifications and other documents not listed below but
required under the Agreement.  This Schedule B-1 is applicable to documents
Contractor is responsible to provide, unless otherwise addressed in Schedule
B-2.  Where a Hard Copy is required, it will only be required at the As Built
stage.

[***]

 

B-1-1

 

SCHEDULE B-2

OUTLINE OF MINIMUM EQUIPMENT SUBCONTRACTOR DOCUMENT REQUIREMENTS
BY EQUIPMENT CATEGORY

In addition to the requirements elsewhere in the Agreement, Contractor shall be
responsible for providing Owner with Equipment Subcontractor documentation,
issued “For Information” or “For Review” (including Drawings and Specifications)
required under this Schedule B-2 and other Equipment Subcontractor documentation
not listed below but required under the Agreement.  The listing below represents
the expected types of documents typically produced by Subcontractors for the
listed Equipment categories.  The list is indicative only, and Contractor shall
provide a listing as part of the register that will be developed by Contractor
specifically for Equipment Subcontractor documentation.  Contractor will issue
to Owner the document list specific to each item of Equipment provided during
the execution of the Work.  Documents identified by “R”, “A”, and “I” shall be
issued “For Review”, “For Approval”, and “For Information” respectively.

Contractor shall issue to Owner the documents described in this Schedule B-2
within [***] ([***]) Days of receiving such documents from the Subcontractor. 
Comments from Owner shall be consolidated with Contractor’s comments prior to
the issuance of comments to the Sub-contractor.

[***]

 

 

B-2-1

 

ATTACHMENT C

PAYMENT SCHEDULE

[***]

 

 

 

C-1

 

Schedule C‐1

Estimated Earned Value Payment Schedule

 

[***]

 

 

 

Appendix 1 to Contract Attachment C: Contract Price Breakdown

 

[***]

 

 

 

 

 

Schedule C‐2

Payment Milestones

 

[***]

 

 

 

 

Schedule C‐3

Maximum Cumulative Payment Schedule

 

 

[***]

 

 

Table C-3A

 

Base – Train 1 and 2

Baseline Schedule Payment Curve and Maximum Cumulative Payment Curve

 

[***]

 

 

TABLE C-3B

 

Base – Train 1 and 2

Baseline Schedule Payment Curve and Maximum Cumulative Payment Curve

 

[***]

 

 

 

 

Schedule C-4

Priced Options

 

 

 

 

 

 

Option #

    

Title

    

Contact Value

Option A

 

[***]

 

$[***]

Option B

 

[***]

 

$[***]

Option C

 

[***]

 

$[***]

Option D

 

[***]

 

$[***]

 

If the Owner exercises any of the Priced Options, the following adjustment(s)
will be made to the Total Reimbursement Amount:

 

Option B: U.S. $ [***]

Option C: U.S. $ [***]

Option D: U.S. $ [***]

 

 

 

SCHEDULE C-5

ESCALATION TABLE

 

In the event Owner issues NTP after [***] but prior to [***], the Contract Price
will increase, in accordance with Section 5.2E(1) of the Agreement, by the
following amounts based on the day upon which Owner issues NTP.

 

Delay in NTP Escalation to Contract Price (Base Scope)

[***] – [***]

[***]-  [***]

[***] -  [***]

[***] - [***]

 

$[***]

 

$[***]

 

$[***]

 

$[***]

 

 

 

ATTACHMENT D

 

FORM OF CHANGE ORDER

 

 

 

 

 

SCHEDULE D-1

CHANGE ORDER FORM

(for use when the Parties mutually agree upon and execute the Change Order
pursuant to Section 6.1D or 6.2C)

 

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey EPC Agreement of Trains 1 and 2

 

OWNER: Rio Grande LNG, LLC

 

CONTRACTOR:  Bechtel Oil, Gas and Chemicals, Inc.

DATE OF AGREEMENT: May 24, 2019

 

CHANGE ORDER NUMBER: _____________

 

EFFECTIVE DATE OF CHANGE ORDER: _____________________________________

 

The EPC Agreement between the Parties listed above is changed as follows:
(attach additional documentation if necessary)

 

 

 

 

Adjustment to Contract Price

 

The original Contract Price was

$

 

Net change by previously authorized Change Orders (#______)

$

 

The Contract Price prior to this Change Order was

$

 

The Aggregate Equipment Price will be (increased) (decreased) (unchanged) by
this Change Order

 

 

in the amount of

$

 

The Aggregate Labor and Skills Price will be (increased) (decreased) (unchanged)
by this Change Order

 

 

in the amount of

$

 

The new Contract Price including this Change Order will be

$

 

 

Adjustment to Key Dates

The following Key Dates are modified (list all Key Dates modified; insert N/A if
no Key Dates modified):

 

The Key Date for __________________ will be (increased)(decreased) by _______
(__) Days.

The Key Date for __________________ as of the date of this Change Order
therefore is _________ (__) Days after NTP.

(list all Key Dates that are modified by this Change Order using the format set
forth above)

 

The Guaranteed Date of __________________ will be (increased)(decreased) by
_______ (__) Days.

The Guaranteed Date of __________________ as of the effective date of this
Change Order therefore is _________ (__) Days after NTP.

(list all Guaranteed Dates that are modified by this Change Order using the
format set forth above)

 

Attached to this Change Order is an updated Schedule E-1 which shall reflect and
highlight any adjustment(s) to the Key Dates agreed to in this Change Order.

 

Impact to other Changed Criteria (insert N/A if no changes or impact; attach
additional documentation if necessary)

 

Impact on Payment Schedule (including, as applicable, Payment Milestones):

 

Impact on Maximum Cumulative Payment Schedule:

 

Impact on Minimum Acceptance Criteria:

 

Impact on Performance Guarantees:

D-1-2

 

Impact on Basis of Design:

 

Impact on the Total Reimbursement Amount:

 

Any other impacts to obligation or potential liability of Contractor or Owner
under the EPC Agreement:

 

Select either A or B:

 

 

[A]     This Change Order shall constitute a full and final settlement and
accord and satisfaction of all effects of the changes reflected in this Change
Order upon the Change Criteria and shall be deemed to compensate Contractor
fully for such change.   Initials:  _____ Contractor _____ Owner

 

[B]      Pursuant to Section 6.4 of the Agreement, this Change Order shall not
constitute a full and final settlement and accord and satisfaction of all
effects of the change reflected in this Change Order upon the Change Criteria
and shall not be deemed to compensate Contractor fully for such
change.    Initials:  _____ Contractor   _____ Owner

 

Upon execution of this Change Order by Owner and Contractor, the
above-referenced change shall become a valid and binding part of the original
EPC Agreement without exception or qualification.    Except as modified by this
and any previously issued Change Orders or any amendments to the EPC Agreement,
all other terms and conditions of the EPC Agreement shall remain in full force
and effect.  This Change Order is executed by each of the Parties’ duly
authorized representatives. This Change Order represents full and final
consideration and/or adjustments for the above change, except as set out above.

 

 

 

 

 

 

 

Owner

 

Contractor

 

 

 

Name

 

Name

 

 

 

Title

 

Title

 

 

 

Date of Signing

 

Date of Signing

 

 

D-1-3

 

SCHEDULE D-2

 

CHANGE DIRECTIVE FORM

 

(for use when Owner issues a Change Directive pursuant to Section 6.1E or 6.2D)

 

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey Agreement for Trains 1 and 2

 

OWNER:  Rio Grande LNG, LLC

 

CONTRACTOR:  Bechtel Oil, Gas and Chemicals, Inc.

DATE OF AGREEMENT: May 24, 2019

 

CHANGE DIRECTIVE NUMBER: _________________________________________

 

EFFECTIVE DATE OF CHANGE DIRECTIVE: ____________________________

 

You are hereby directed to make the following change(s) in the EPC Agreement:
(attach additional documentation if necessary)

 

 

 

 

 

 

 

Consideration for the Work specified for this Change Directive shall be paid as
provided in the EPC Agreement.

 

When signed by Owner and received by Contractor, this document becomes effective
IMMEDIATELY as a Change Directive, and Contractor shall commence with the
performance of the change(s) described above within [***] (***) Business Days of
its receipt unless another time is expressly stated above.  This Change
Directive is signed by Owner’s duly authorized representative.

 

 

 

 

 

 

 

 

Owner

 

 

 

 

 

Name

 

 

 

 

 

Title

 

 

 

 

 

Date of Signing

 

 

 

D-4

 

SCHEDULE D-3

 

OWNER’S CHANGE ORDER REQUEST FORM

 

D-5

 

OWNER’S CHANGE ORDER REQUEST FORM – PART 1 of 2

OWNER NOTIFICATION

(To be completed by Owner)

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey Agreement for Trains 1 and 2

 

OWNER:  Rio Grande LNG, LLC

 

CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.

DATE OF AGREEMENT: May 24, 2019

 

OWNER’S CHANGE ORDER REQUEST NUMBER: ______________________________

 

DATE OF THIS CHANGE ORDER REQUEST: ____________________________

 

Description of the Proposed Change to the Work:  

Owner requests Contractor to review and respond to this Owner’s Change Order
Request, as follows:

 

Reference Documents:

 

 

Owner:

 

 

 

 

 

 

 

By

 

 

 

 

 

Name

 

 

 

 

 

Title

 

 

 

 

 

Date

 

 

 

Contractor shall reply within the time required under Section 6.1 of the EPC
Agreement by completing Part 2 of the Change Order Request Form and submitting
it to Owner.

This Change Order Request shall not be considered a Change Order or Change
Directive to the EPC Agreement.  A Change Order may only occur by the Parties
executing a Change Order in the form of Schedule D-1 to the EPC Agreement, and a
Change Directive may only occur by Owner issuing a Change Directive in the form
of Schedule D-2 to the EPC Agreement.

D-6

 

OWNER’S CHANGE ORDER REQUEST FORM – PART 2 of 2

CONTRACTOR RESPONSE

(To be completed by Contractor)

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey Agreement for Trains 1 and 2

 

OWNER:  Rio Grande LNG, LLC

 

CONTRACTOR:  Bechtel Oil, Gas and Chemicals, Inc.

DATE OF AGREEMENT: May 24, 2019

 

OWNER’S CHANGE ORDER REQUEST NUMBER: _______________________________

 

DATE OF THIS CHANGE ORDER REQUEST: ______________________________

 

Description of the Work to be performed and a program for its execution:

 

Reference Documents:

 

Preliminary assessment of the effect (if any) such request, were it to be
implemented by Change Order, would have on the Changed Criteria (including any
changes to the Contract Price, Key Dates, the Scope of Work or any other Changed
Criteria):

 

 

(Attach additional documentation if necessary)

 

Contractor shall provide the following as part of Contractor’s preliminary
assessment:

 

 

Commencement Date

 

Estimated Duration

 

Change in Contract Price

 

Change in Aggregate Equipment Price

 

Change in Aggregate Labor and Skills Price

 

Change in Total Reimbursement Amount

 

Change in Payment Schedule

 

Impact on Key Dates (Y/N), if “yes,” ROM impact on such Key Dates

 

 

 

 

 

 

Owner:

 

Contractor:

 

 

 

 

 

By

 

By

 

 

 

 

 

Name

 

Name

 

 

 

 

 

Title

 

Title

 

 

 

 

 

Date

 

Date

 

 

This Change Order Request shall not be considered a Change Order or Change
Directive to the EPC Agreement.  A Change Order may only occur by the Parties
executing a Change Order in the form of Schedule D-1 to the EPC Agreement, and a
Change Directive may only occur by Owner issuing a Change Directive in the form
of Schedule D-2 to the EPC Agreement.

 

D-7

 

SCHEDULE D-4

 

CONTRACTOR’S CHANGE NOTICE FORM

 

D-8

 

CONTRACTOR’S INITIAL CHANGE NOTICE FORM – PART 1 of 2

(To be completed by Contractor in accordance with Sections 6.2B and 6.5A of the
EPC Agreement)

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey Agreement for Trains 1 and 2

 

OWNER:  Rio Grande LNG, LLC

 

CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.

DATE AGREEMENT OF: May 24, 2019

 

CONTRACTOR’S CHANGE NOTICE NUMBER: _______________________________

 

DATE OF THIS CHANGE NOTICE:   _________________________________________

 

 

Contractor provides notice of the following proposed change(s) in the EPC
Agreement: (attach additional documentation, if necessary)

 

Detailed Explanation, Facts and Reasons Upon Which Contractor’s Notice of
Proposed Change(s) is Based: (provide details of all known and presumed facts
upon which Contractor’s claim is based, including the character, duration and
extent of such circumstance, the date Contractor first knew of such
circumstance, any activities impacted by such circumstance, the estimated cost
and time consequences of such circumstance (including showing the impact of such
circumstance, if any, on the critical path of the CPM Schedule) and any other
reasons, details, or information that are expressly required under the EPC
Agreement)

 

Contractor shall provide the following as part of Contractor’s preliminary
assessment:

 

 

Commencement Date

 

Estimated Duration

 

Change in Contract Price

 

Change in Aggregate Equipment Price

 

Change in Aggregate Labor and Skills Price

 

Change in Total Reimbursement Amount

 

Change in Payment Schedule

 

Impact on Maximum Cumulative Payment Schedule:

 

Impact on Minimum Acceptance Criteria:

 

Impact on Performance Guarantees:

 

Impact on Basis of Design:

 

Any other impacts to obligation or potential liability of Contractor or Owner
under the EPC Agreement:

 

Impact on Key Dates (Y/N), if “yes,” ROM impact on such Key Dates

 

 

 

This Contractor’s Initial Change Notice is signed by Contractor’s duly
authorized representative.

 

 

 

 

 

 

By

 

 

 

 

 

Name

 

 

 

 

 

Title

 

 

 

 

 

Date

 

 

 

D-9

 

CONTRACTOR’S DETAILED CHANGE NOTICE FORM – PART 2 of 2

(To be completed by Contractor in accordance with Section 6.5B of the EPC
Agreement)

PROJECT NAME:  Rio Grande Natural Gas Liquefaction Facility

 

AGREEMENT:  Fixed Price Turnkey Agreement for Trains 1 and 2

 

OWNER:  Rio Grande LNG, LLC

 

CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.

DATE OF AGREEMENT: May 24, 2019

 

CONTRACTOR’S CHANGE NOTICE NUMBER: _____________________________

 

DATE OF THIS CHANGE NOTICE: ______________________________________

 

 

Contractor proposes the following change(s) in the EPC Agreement: (attach Part
1: CONTRACTOR’S INITIAL CHANGE NOTICE FORM), and provide any further detailed
explanation of the proposed change(s) and attach additional documentation, if
necessary)

Detailed Reasons for Proposed Change(s) (in addition to Part 1: CONTRACTOR’S
INITIAL CHANGE NOTICE FORM), provide any further detailed reasons for the
proposed change, and attach all documentation reasonably requested by or
necessary for Owner to determine the factors necessitating the possibility of a
Change Order)

 

Requested Adjustments to EPC Agreement (attach all documentation and details
required by the EPC Agreement to provide to Owner a comprehensive written
estimate, including applicable detailed estimates and cost records, time sheets
summary, and a graphic demonstration using the CPM Schedule, showing
Contractor’s entitlement to a time extension to the Key Dates)

 

The effect, if any, which such proposed Change Order would have on any Changed
Criteria

Contract Price Adjustment (including adjustments to Tax Exempt Equipment Price,
Taxable Equipment Price, and Labor and Skills Price):

Adjustment to Key Dates:

Adjustment to Guaranteed Train 1 Substantial Completion Date:

Adjustment to Guaranteed Train 2 Substantial Completion Date:

Adjustment to Final Completion Date:

Adjustment to Payment Schedule:

Adjustment to Performance Guarantees:

Adjustment to Minimum Acceptance Criteria:

Adjustment to Basis of Design:

Adjustment to Total Reimbursement Amount:

Adjustment to Scope of Work:

D-10

 

Other adjustments to liability or obligations of Contractor or Owner under the
EPC Agreement:

(Attached to this Contractor’s Change Notice is a breakdown of the requested
Contract Price adjustment between Tax Exempt Equipment, Taxable Equipment, Labor
and Skills Price and all other Work.)

 

 

This Contractor’s Change Notice is signed by Contractor’s duly authorized
representative.

 

 

 

 

 

 

By

 

 

 

 

 

Name

 

 

 

 

 

Title

 

 

 

 

 

Date

 

 

 

D-11

 

SCHEDULE D-5

 

PRICING FOR CHANGE ORDERS AND CHANGE DIRECTIVES

 

Rates for Changes - Home Office Hourly Labor Rates

 

Line
Item
Number

Job Description

[***]

[***]

S.T. Rate,
(US$)

O.T. Rate,
(US$)

S.T. Rate,
(US$)

O.T. Rate,
(US$)

Work Week (Days / Hours)

 

 

 

 

Available Work Hours per Year

 

 

 

Project Management

 

 

 

 

1

Project Director

[***]

[***]

[***]

[***]

2

Project Manager

[***]

[***]

[***]

[***]

3

Commercial Manager

[***]

[***]

[***]

[***]

4

Project Management Clerical

[***]

[***]

[***]

[***]

 

HSE

 

 

 

 

5

Safety Manager

[***]

[***]

[***]

[***]

6

Environmental Manager

[***]

[***]

[***]

[***]

7

Project Safety Personnel

[***]

[***]

[***]

[***]

8

Safety Clerical

[***]

[***]

[***]

[***]

 

QA/QC

 

 

 

 

9

QA/QC Management

[***]

[***]

[***]

[***]

10

Quality Assurance Engineers

[***]

[***]

[***]

[***]

11

Quality Control Engineers

[***]

[***]

[***]

[***]

12

QA/QC Clerical

[***]

[***]

[***]

[***]

 

Estimating

 

 

 

 

13

Estimator

[***]

[***]

[***]

[***]

14

Estimating Clerical

[***]

[***]

[***]

[***]

 

Project Controls

 

 

 

 

15

PC Manager

[***]

[***]

[***]

[***]

16

PC Cost

[***]

[***]

[***]

[***]

17

PC Planning & Scheduling

[***]

[***]

[***]

[***]

18

PC Quantity Surveying & Progress

[***]

[***]

[***]

[***]

19

PC Clerical

[***]

[***]

[***]

[***]

 

Finance & Accounting

 

 

 

 

20

Project Controller

[***]

[***]

[***]

[***]

21

Accounting Manager

[***]

[***]

[***]

[***]

 

D-12

 

 

22

Sr. Project Accountant

[***]

[***]

[***]

[***]

23

Project Accountant/Biller

[***]

[***]

[***]

[***]

24

Accounting Clerical

[***]

[***]

[***]

[***]

 

Other Support Staff

 

 

 

 

25

HR / Admin

[***]

[***]

[***]

[***]

26

IT

[***]

[***]

[***]

[***]

 

Procurement

 

 

 

 

27

Procurement Management

[***]

[***]

[***]

[***]

28

Logistics Specialist

[***]

[***]

[***]

[***]

29

Buyers

[***]

[***]

[***]

[***]

30

Expeditors

[***]

[***]

[***]

[***]

31

Inspectors

[***]

[***]

[***]

[***]

32

Purchasing Clerical

[***]

[***]

[***]

[***]

33

Materials Manager

[***]

[***]

[***]

[***]

34

Materials Control Lead

[***]

[***]

[***]

[***]

35

Materials Specialist

[***]

[***]

[***]

[***]

36

Preservation Coordination

[***]

[***]

[***]

[***]

37

Materials Clerical

[***]

[***]

[***]

[***]

 

Construction - Home Office

 

 

 

 

38

Sr. Construction Director

[***]

[***]

[***]

[***]

39

Construction Manager

[***]

[***]

[***]

[***]

40

Technical Services Manager

[***]

[***]

[***]

[***]

41

Project Field Engineer

[***]

[***]

[***]

[***]

42

Discipline Engineer

[***]

[***]

[***]

[***]

43

Discipline Superintendents

[***]

[***]

[***]

[***]

44

Construction Coordinators

[***]

[***]

[***]

[***]

45

Construction Automation

[***]

[***]

[***]

[***]

46

Workforce Planner

[***]

[***]

[***]

[***]

47

IR Manager

[***]

[***]

[***]

[***]

48

Area Manager

[***]

[***]

[***]

[***]

49

Construction Clerical

[***]

[***]

[***]

[***]

 

Subcontracts

 

 

 

 

50

Subcontracts

[***]

[***]

[***]

[***]

51

Subcontracts Administrator

[***]

[***]

[***]

[***]

 

Commissioning and Startup

 

 

 

 

52

Commissioning & Startup Manager

[***]

[***]

[***]

[***]

53

Commissioning & Startup Personnel

[***]

[***]

[***]

[***]

 

Project Engineering Management & Support

 

 

 

 

 

D-13

 

 

54

Project Engineering Manager

[***]

[***]

[***]

[***]

55

Senior Project Engineer

[***]

[***]

[***]

[***]

56

Project Engineer

[***]

[***]

[***]

[***]

57

Project Engineering Clerical

[***]

[***]

[***]

[***]

 

PROCESS ENGINEERING & DESIGN

 

 

 

 

58

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

59

Engineer - Senior

[***]

[***]

[***]

[***]

60

Engineer

[***]

[***]

[***]

[***]

61

Designer - Principal / Lead

[***]

[***]

[***]

[***]

62

Designer - Senior

[***]

[***]

[***]

[***]

63

Designer

[***]

[***]

[***]

[***]

 

SAFETY & ENVIRONMENTAL ENGINEERING & DESIGN

 

 

 

64

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

65

Engineer - Senior

[***]

[***]

[***]

[***]

66

Engineer

[***]

[***]

[***]

[***]

67

Designer - Principal / Lead

[***]

[***]

[***]

[***]

68

Designer - Senior

[***]

[***]

[***]

[***]

69

Designer

[***]

[***]

[***]

[***]

 

CIVIL/STRUCTURAL ENGINEERING & DESIGN

 

 

 

70

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

71

Engineer - Senior

[***]

[***]

[***]

[***]

72

Engineer

[***]

[***]

[***]

[***]

73

Designer - Principal / Lead

[***]

[***]

[***]

[***]

74

Designer - Senior

[***]

[***]

[***]

[***]

75

Designer

[***]

[***]

[***]

[***]

 

MECHANICAL ENGINEERING & DESIGN

 

 

 

 

76

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

77

Engineer - Senior

[***]

[***]

[***]

[***]

78

Engineer

[***]

[***]

[***]

[***]

79

Designer - Principal / Lead

[***]

[***]

[***]

[***]

80

Designer - Senior

[***]

[***]

[***]

[***]

81

Designer

[***]

[***]

[***]

[***]

 

PIPING ENGINEERING & DESIGN

 

 

 

 

82

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

83

Engineer - Senior

[***]

[***]

[***]

[***]

84

Engineer

[***]

[***]

[***]

[***]

85

Designer - Principal / Lead

[***]

[***]

[***]

[***]

86

Designer - Senior

[***]

[***]

[***]

[***]

87

Designer

[***]

[***]

[***]

[***]

 

D-14

 

 

 

 

 

 

 

 

 

ELECTRICAL ENGINEERING & DESIGN

 

 

 

 

88

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

89

Engineer - Senior

[***]

[***]

[***]

[***]

90

Engineer

[***]

[***]

[***]

[***]

91

Designer - Principal / Lead

[***]

[***]

[***]

[***]

92

Designer - Senior

[***]

[***]

[***]

[***]

93

Designer

[***]

[***]

[***]

[***]

 

I&C ENGINEERING & DESIGN

 

 

 

 

94

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

95

Engineer - Senior

[***]

[***]

[***]

[***]

96

Engineer

[***]

[***]

[***]

[***]

97

Designer - Principal / Lead

[***]

[***]

[***]

[***]

98

Designer - Senior

[***]

[***]

[***]

[***]

99

Designer

[***]

[***]

[***]

[***]

 

Engineering Systems (IT, Idocs etc)

 

 

 

 

100

Information Management

[***]

[***]

[***]

[***]

101

EDMS (iDocs) Support

[***]

[***]

[***]

[***]

102

CAD Support

[***]

[***]

[***]

[***]

103

Engineering IT (EIT) Support

[***]

[***]

[***]

[***]

 

DOCUMENT MANAGEMENT

 

 

 

 

104

Manager / Lead

[***]

[***]

[***]

[***]

105

Supervisor / Lead

[***]

[***]

[***]

[***]

106

Specialist - Principal

[***]

[***]

[***]

[***]

107

Specialist - Senior

[***]

[***]

[***]

[***]

108

Specialist

[***]

[***]

[***]

[***]

 

ADDS

 

 

 

 

 

Process Safety

 

 

 

 

109

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

110

Engineer - Senior

[***]

[***]

[***]

[***]

111

Engineer

[***]

[***]

[***]

[***]

 

Geotech

 

 

 

 

112

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

113

Engineer - Senior

[***]

[***]

[***]

[***]

114

Engineer

[***]

[***]

[***]

[***]

 

MET

 

 

 

 

115

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

116

Engineer - Senior

[***]

[***]

[***]

[***]

117

Engineer

[***]

[***]

[***]

[***]

 

D-15

 

 

 

Marine

 

 

 

 

118

Engineer - Principal / Lead

[***]

[***]

[***]

[***]

119

Engineer - Senior

[***]

[***]

[***]

[***]

120

Engineer

[***]

[***]

[***]

[***]

 

Rates for Changes - Office Space

 

Line
Item
Number

Job Description

[***]

[***]

Daily

Weekly

Monthly

Daily

Weekly

Monthly

 

Home Office

 

 

 

 

 

 

1

Office - Large (195 sf)

[***]

[***]

[***]

[***]

[***]

[***]

2

Office - Small (150 sf)

[***]

[***]

[***]

[***]

[***]

[***]

3

Cubicle - (60 sf)

[***]

[***]

[***]

[***]

[***]

[***]

4

Conference Room - Small (800 sf)

[***]

[***]

[***]

[***]

[***]

[***]

 

Site

 

 

 

 

 

 

5

Prefabricated Office Unit (11.75' x 60')

[***]

[***]

[***]

 

 

 

6

Site Bathroom Trailer (11.75' x 56')

[***]

[***]

[***]

 

 

 

7

 

 

 

 

 

 

 

 

Rates for Changes - Field Indirect Staff Labor Rates

 

Line Item
Number

Job Description

Operation Center 1

S.T. Rate, (US$)

O.T. Rate, (US$)

Work Week (Days / Hours)

 

 

Available Work Hours per Year

 

 

Project Management

 

 

1

Proj Dir

[***]

[***]

2

Sr Proj Mgr

[***]

[***]

3

Proj Mgr

[***]

[***]

4

Sr Commercial Mgr

[***]

[***]

5

Commercial Mgr

[***]

[***]

6

Commercial Spec

[***]

[***]

7

Estimator

[***]

[***]

 

Safety

 

 

8

Site HSE Dir

[***]

[***]

9

HSE Mgr

[***]

[***]

 

D-16

 

 

10

HSE Supv

[***]

[***]

11

Safety Technician

[***]

[***]

12

Environmental Mgr

[***]

[***]

13

HSE Technician

[***]

[***]

 

Project Controls

 

 

14

Proj Ctrls Mgr

[***]

[***]

15

Lead Cost Spec

[***]

[***]

16

Sr Cost Spec

[***]

[***]

17

Cost Spec

[***]

[***]

18

Lead Scheduling Spec

[***]

[***]

19

Sr Scheduling Spec

[***]

[***]

20

Scheduling Spec

[***]

[***]

21

Lead Quantity Surv/Prog Spec

[***]

[***]

22

Sr Quantity Surv/Prog Spec

[***]

[***]

23

Quantity Surv/Prog Spec

[***]

[***]

 

Construction

 

 

24

Sr Const Director

[***]

[***]

25

Sr Const Mgr

[***]

[***]

26

Const Mgr

[***]

[***]

27

Sr Const Tech Svs Mgr

[***]

[***]

28

Const Tech Svs Mgr

[***]

[***]

29

Const Tech Svs Coord

[***]

[***]

30

Const Tech Svs Spec

[***]

[***]

31

General Supt

[***]

[***]

32

Area Supt

[***]

[***]

33

Const TES Mgr

[***]

[***]

34

Completions Mgr

[***]

[***]

 

Human Resources

 

 

35

Sr HR Mgr

[***]

[***]

36

HR Mgr I

[***]

[***]

37

HR Admin/Coord I

[***]

[***]

 

Administration

 

 

38

Const Admin Mgr (Office Manager)

[***]

[***]

39

Const Admin Supv

[***]

[***]

40

Sr Admin Asst

[***]

[***]

41

Admin Asst I

[***]

[***]

 

Document Management

 

 

42

Document Ctrls Mgr

[***]

[***]

43

Document Ctrls Supv

[***]

[***]

 

D-17

 

 

 

 

 

 

44

Sr Document Ctrls Spec

[***]

[***]

45

Document Ctrls Spec

[***]

[***]

46

Document Control

[***]

[***]

 

Quality Management

 

 

47

Sr Quality Mgr

[***]

[***]

48

Quality Mgr

[***]

[***]

49

Quality Supv

[***]

[***]

50

Quality Engr

[***]

[***]

51

Quality Insp

[***]

[***]

52

Quality Spec

[***]

[***]

 

Finance / Accounting

 

 

53

Proj Sr. Acctnt

[***]

[***]

54

Proj Acctnt

[***]

[***]

55

Payroll Clerk

[***]

[***]

56

Timekeeper

[***]

[***]

 

IT

 

 

57

IT/Information Management Manager

[***]

[***]

58

IT/Information Management Technician

[***]

[***]

59

Procurement & Material Management

 

 

60

Buyer

[***]

[***]

61

Sr. Expeditor

[***]

[***]

62

Expeditor

[***]

[***]

63

Purchasing Clerk

[***]

[***]

64

Matls Mgmt Supv

[***]

[***]

65

Matls Mgmt Coord

[***]

[***]

66

Matls Mgmt Spec

[***]

[***]

67

Material Control

[***]

[***]

68

Whse Supv

[***]

[***]

69

Toolroom

[***]

[***]

 

Subcontracts

 

 

70

Subcontracts Mgr

[***]

[***]

71

Subcontracts Coordinator

[***]

[***]

72

Subcontracts Administrator

[***]

[***]

 

Commissioning

 

 

73

Sr Commissioning Mgr

[***]

[***]

74

Commissioning Supt

[***]

[***]

75

Sr Commissioning Spec

[***]

[***]

76

Commissioning Spec

[***]

[***]

 

D-18

 

Rates for Changes - Field Direct Craft Labor Rates

 

Line
Item
Number

Job Description

Operation Center 1

S.T. Rate,
(US$)

O.T. Rate,
(US$)

Work Week (Days / Hours)

 

 

Available Work Hours per Year

 

 

Boiler Maker

 

 

1

General Foreman

[***]

[***]

2

Foreman

[***]

[***]

3

Journeyman

[***]

[***]

4

Apprentice / Helper

[***]

[***]

 

Bricklayer / Mason

 

 

5

General Foreman

[***]

[***]

6

Foreman

[***]

[***]

7

Journeyman

[***]

[***]

8

Apprentice / Helper

[***]

[***]

 

Carpenter

 

 

9

General Foreman

[***]

[***]

10

Foreman

[***]

[***]

11

Journeyman

[***]

[***]

12

Apprentice / Helper

[***]

[***]

 

Electrician

 

 

13

General Foreman

[***]

[***]

14

Foreman

[***]

[***]

15

Journeyman

[***]

[***]

16

Apprentice / Helper

[***]

[***]

 

Instrument

 

 

17

General Foreman

[***]

[***]

18

Foreman

[***]

[***]

19

Journeyman

[***]

[***]

20

Apprentice / Helper

[***]

[***]

 

Iron Worker

 

 

21

General Foreman

[***]

[***]

22

Foreman

[***]

[***]

23

Journeyman

[***]

[***]

24

Apprentice / Helper

[***]

[***]

 

Laborer

 

 

25

General Foreman

[***]

[***]

 

D-19

 

 

26

Foreman

[***]

[***]

27

Journeyman

[***]

[***]

28

Apprentice / Helper

[***]

[***]

 

Millwrights

 

 

29

General Foreman

[***]

[***]

30

Foreman

[***]

[***]

31

Journeyman

[***]

[***]

32

Apprentice / Helper

[***]

[***]

 

Operators

 

 

33

General Foreman

[***]

[***]

34

Foreman

[***]

[***]

35

Journeyman

[***]

[***]

36

Apprentice / Helper

[***]

[***]

 

Painters

 

 

37

General Foreman

[***]

[***]

38

Foreman

[***]

[***]

39

Journeyman

[***]

[***]

40

Apprentice / Helper

[***]

[***]

 

Pipe Fitters

 

 

41

General Foreman

[***]

[***]

42

Foreman

[***]

[***]

43

Journeyman

[***]

[***]

44

Apprentice / Helper

[***]

[***]

 

Scaffold Builders

 

 

45

General Foreman

[***]

[***]

46

Foreman

[***]

[***]

47

Journeyman

[***]

[***]

48

Apprentice / Helper

[***]

[***]

 

 

 

D-20

 

ATTACHMENT E

 

KEY DATES AND DELAY LIQUIDATED DAMAGES

 

E-1

 

SCHEDULE E-1

KEY DATES

 

 

 

EVENT

 

DAYS FROM NTP

CONTRACTOR KEY DATES – TRAIN 1

1.   Mechanical Completion – Train 1

 

[***] Days after NTP

2.   RFSU – Train 1

 

[***] Days after NTP

3.   RLFC – Train 1

 

[***] Days after NTP

4.   Guaranteed Train 1 Substantial Completion Date

 

[***]

 

 

 

CONTRACTOR KEY DATES – TRAIN 2

5.   Mechanical Completion – Train 2

 

[***] Days after NTP

6.   RFSU – Train 2

 

[***] Days after NTP

7.   RLFC – Train 2 

 

[***] Days after NTP

8.   Guaranteed Train 2 Substantial Completion Date

 

[***]

 

Attached hereto in Schedule E-1.1 is a level 1 schedule for the Project.

 

E-2

 

SCHEDULE E-1.1

 

RIO GRANDE LNG LIQUEFACTION PROJECT

TRAINS 1 & 2 AND OSBL ([***])

 

[***]

 

E-3

 

SCHEDULE E-2

 

SUBSTANTIAL COMPLETION DELAY LIQUIDATED DAMAGES

 

Substantial Completion Delay Liquidated Damages

 

In accordance with Sections 13.1A and 13.1.B of the EPC Agreement, if
Substantial Completion occurs after the Guaranteed Substantial Completion Date
(as adjusted by Change Order), for the applicable Train, Contractor shall pay to
Owner Substantial Completion Delay Liquidated Damages in the amounts set forth
in this Attachment E for each Day, or portion thereof, of delay until
Substantial Completion occurs for the applicable Train, subject to the
limitations in Section 20.2 of the EPC Agreement.

 

[***].

 

 

 

SUBSTANTIAL COMPLETION DELAY OF TRAIN 1

Per Day Delay
Liquidated Damages
Amount

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

More than [***] Days after the Guaranteed Substantial Completion Date

$[***]

 

 

 

 

SUBSTANTIAL COMPLETION DELAY OF TRAIN 2

Per Day Delay
Liquidated Damages
Amount

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

E-4

 

 

 

[***] to [***] Days after the Guaranteed Substantial Completion Date

$[***]

More than [***] Days after the Guaranteed Substantial Completion Date

$[***]

 

[***].

 

 

E-5

 

ATTACHMENT F

 

KEY PERSONNEL AND CONTRACTOR’S ORGANIZATION

 

The persons named in the table below, in accordance with Section 2.2A of the
Agreement, are designated by Contractor and approved by Owner as Key Personnel.
Key Personnel shall be assigned full time to the Work for the entire duration of
the Project unless otherwise specified in this Attachment F.  Without limiting
the requirements of the Agreement, before any Key Personnel are assigned to the
Project, the full names and 1-2 page résumés of nominated Key Personnel shall be
provided to and approved by Owner.

 

[***].

 

Replacements of any Key Personnel during the Project shall be in accordance with
Section 2.2A of the EPC Agreement.

 

 

 

 

 

NAME

POSITION

MOBILIZATION
DATE (no later than
referenced milestone)

DEMOBILIZATION
DATE (no earlier than
referenced milestone)

[***]

[***]

[***]

Train 1 Substantial Completion

[***]

[***]

[***]

Train 2 Substantial Completion 

[***]

[***]

[***]

Train 2 Substantial Completion

[***]

[***]

[***]

Train 2 Substantial Completion

[***]

[***]

[***]

Final Completion

[***]

[***]

[***]

Final Completion

[***]

[***]

[***]

Train 1 Substantial Completion

[***]

[***]

[***]

Train 2 Engineering substantially complete

[***]

[***]

[***]

Final Completion

 

F-1

 

CONTRACTOR’S ORGANIZATION

The diagram below illustrates the organizational structure to be implemented for
the Work by Contractor, which includes significant roles to be filled by any
Subcontractor personnel.

[***]

 

 

 

F-2

 

ATTACHMENT G

 

APPROVED SUBCONTRACTORS AND SUB-SUBCONTRACTORS

 

G-1

 

SECTION 1

 

List of potential Subcontractors and Sub-subcontractors that may have
Subcontracts or Sub-subcontracts with an aggregate value in excess of [***] U.S.
Dollars (U.S. $[***])

 

[***]

 

G-2

 

SECTION 2

 

List of Subcontractors and Sub-subcontractors with whom Contractor has agreed to
subcontract on a sole-source basis for that portion of the Work specified.

 

[***]

G-3

 

SECTION 3

 

List of potential Subcontractors and Sub-subcontractors that may have
Subcontracts or Sub-Subcontracts with an aggregate value less than [***] U.S.
Dollars (U.S. $[***]) but nevertheless are providing work deemed critical by
Owner.

 

[***]

 

 

G-4

ATTACHMENT H

 

NOTICE TO PROCEED FORMS

 

 

SCHEDULE H-1

 

FORM OF LIMITED NOTICE TO PROCEED

 

 

 

Date:

 

 

 

 

Via Electronic and Certified Mail

 

 

[                                                   ]

 

 

[                                                   ]

 

 

[                                                   ]

 

 

Attention:

[                               ]

 

 

 

Re:        Limited Notice to Proceed

 

Pursuant to Section 5.2B of the Fixed Price Turnkey Agreement for the
Engineering, Procurement and Construction of the Rio Grande Natural Gas
Liquefaction Facility, by and between Rio Grande LNG, LLC (“Owner”) and Bechtel
Oil, Gas and Chemicals, Inc. (“Contractor”), dated as of May 24, 2019 (the
“Agreement”), this letter shall serve as a Limited Notice to Proceed from Owner
to Contractor authorizing Contractor to proceed with that certain portion of the
Work as described below pursuant to the terms and conditions of the Agreement:

 

 

 

 

 

 

(“LNTP  Work”).

 

Contractor is authorized under this Limited Notice to Proceed to incur no more
than ____________________________U.S. Dollars (U.S. $              ) for
performance of the foregoing LNTP Work with cancellation costs not to exceed
_______________U.S. Dollars (U.S. $              ).  The amount for the LNTP
Work shall cover these activities for the time frame from the Effective Date
through the [                 ].  No other amounts are authorized under this
Limited Notice to Proceed for any other services, labor or Work. Contractor
shall be paid for such specified LNTP Work pursuant to the terms and conditions
of the Agreement.

 

 

 

 

Owner:

    

Contractor:

 

 

 

 

 

 

 

 

By

 

 

By

 

 

 

 

 

 

 

 

 

 

 

Name

 

 

Name

 

 

 

 

 

 

 

 

 

 

 

Title

 

 

Title

 

 

 

 

 

 

 

 

 

 

 

Date

 

 

Date

 

 

 

cc:        [                                      ]

             [                                     ]

 

H-6

 

SCHEDULE H-2

 

FORM OF NOTICE TO PROCEED

 

 

 

Date:

 

 

 

 

Via Electronic and Certified Mail

 

 

[                                                   ]

 

 

[                                                   ]

 

 

[                                                   ]

 

 

Attention:

[                               ]

 

 

 

Re:           Notice to Proceed

 

Pursuant to Section 5.2D of the Fixed Price Turnkey Agreement for the
engineering, procurement and construction of the Rio Grande Natural Gas
Liquefaction Facility, by and between Rio Grande LNG, LLC (“Owner”) and Bechtel
Oil, Gas and Chemicals, Inc. (“Contractor”), dated as of May 24, 2019 (the
“Agreement”), Owner having fulfilled all conditions precedent set forth in
Section 5.2D of the Agreement for the issuance of the Notice to Proceed, this
letter shall serve as the Notice to Proceed from Owner to Contractor authorizing
Contractor to immediately proceed with the Work upon receipt of this letter
pursuant to the terms and conditions of the Agreement.

 

 

 

 

 

 

 

 

For and on behalf of

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

cc:        [                                      ]

             [                                     ]

 

 

 

H-7

 

SCHEDULE H-3

 

LNTP No. 1

 

 

 

LNTP-1

 

LIMITED NOTICE TO PROCEED #1

 

Date: May 24, 2019

 

Via Electronic and Certified Mail

Bechtel Oil, Gas and Chemicals, Inc.

3000 Post Oak Boulevard

Houston, Texas 77056

Attention: [***]

 

Re:        Limited Notice to Proceed #1

 

Pursuant to Section 5.2A of the Fixed Price Turnkey Agreement for the
Engineering, Procurement and Construction of the Rio Grande Natural Gas
Liquefaction Facility, by and between Rio Grande LNG, LLC (“Owner”) and Bechtel
Oil, Gas and Chemicals, Inc. (“Contractor”), dated as of May 24, 2019 (the
“Agreement”), this letter shall serve as a Limited Notice to Proceed from Owner
to Contractor authorizing Contractor to proceed with that certain portion of the
Work as described below pursuant to the terms and conditions of the Agreement:

 

See attached Exhibit A (“LNTP #1 Work”).

 

Contractor is authorized under this Limited Notice to Proceed to invoice no more
than thirty million three hundred ten thousand U.S. Dollars (U.S.
$30,310,000.00) for performance of the foregoing LNTP #1 Work.  The amount for
the LNTP #1 Work shall cover these activities for the time frame from the
Effective Date through January 1, 2020.  No other amounts are authorized under
this Limited Notice to Proceed for any other services, labor or Work. Contractor
shall be paid for such specified LNTP #1 Work pursuant to the terms and
conditions set forth in Exhibit B (“LNTP #1 Payment Terms”).

 

If Owner terminates the Agreement for convenience prior to the issuance of NTP,
or if Contractor terminates this Agreement pursuant to Section 16.5 of the
Agreement, then Contractor shall be entitled to (i) those amounts owed to
Contractor by Owner pursuant to Exhibit B of this LNTP No. 1 prior to
termination, plus (ii) actual costs reasonably incurred by Contractor on account
of such termination (which costs shall be adequately documented and supported by
Contractor, including any cancelation costs incurred with respect to
Subcontractors) plus associated profit margin of five percent 5%, provided
however that in no event shall Contractor be entitled to receive any amount for
unabsorbed overhead, contingency, risk, anticipatory profit or other form of
cancellation charges under this LNTP.  Notwithstanding anything to the contrary
herein, Owner’s total liability to Contractor for LNTP No. 1 shall not exceed
those amounts specified in the immediately preceding paragraph.

 

Owner:

    

Contractor:

 

 

 

 

 

 

 

 

Name: [***]

 

 

Name: [***]

 

Title: [***]

 

 

Title: [***]

 

Rio Grande LNG, LLC

 

 

Bechtel Oil, Gas & Chemicals, Inc.

 

 

-1-

 

EXHIBIT A TO LNTP #1

 

LNTP #1 SCOPE OF WORK

 

[***]

 

-2-

 

EXHIBIT B

 

LNTP #1 PAYMENT TERMS

 

 

In consideration of Contractor’s performance of the Work described in Exhibit A
to LNTP #1, Owner agrees to pay Contractor in accordance with the following
terms and conditions (which shall apply only to this LNTP #1):

 

(i)

On [***], Owner will pay Contractor the amount of [***] dollars (U.S.$ [***]) in
cash, upon receipt of an Invoice for such amount from Contractor (“LNTP Payment
1”). In order to facilitate LNTP Payment 1, Contractor is requested to submit an
Invoice for the amount of LNTP Payment 1 by [***] indicating a due date of
[***];

 

(ii)

On [***], Owner will pay Contractor the amount of [***] dollars (U.S.$ [***])
(“LNTP Payment 2”). In order to facilitate LNTP Payment 2, Contractor is
requested to submit an Invoice for the amount of LNTP Payment 2 (and such other
documentation as may reasonably be required by Owner in accordance with the
Agreement) by [***] indicating a due date of [***];  

 

(iii)

Upon receipt of revised APCI Greenbook deliverables, Owner will pay Contractor
the amount of [***] dollars (U.S.$ [***]) (“LNTP Payment 3”). In order to
facilitate LNTP Payment 3, Contractor is requested to submit an Invoice for the
amount of LNTP Payment 3 (and such other documentation as may reasonably be
required by Owner in accordance with the Agreement) two weeks prior to the
anticipated date of Owner’s receipt of such deliverables;

 

(iv)

On [***],  Owner will pay Contractor the amount of [***] dollars (U.S.$ [***])
in cash, upon receipt of an Invoice for such amount from Contractor (“LNTP
Payment 4). In order to facilitate LNTP Payment 4, Contractor is requested to
submit an Invoice for the amount of LNTP Payment 4 (and such other documentation
as may reasonably be required by Owner in accordance with the Agreement) by
[***] indicating a due date of [***].

 

 

 

-3-

 

ATTACHMENT I

 

FORM OF CONTRACTOR’S INVOICES

 

 

 

 

 

SCHEDULE I-1

FORM OF CONTRACTOR’S INTERIM INVOICE

 

PROJECT NAME: Rio Grande Natural Gas Liquefaction Facility

    

INVOICE NUMBER:

 

 

 

 

 

 

DATE OF INVOICE:

 

, 20

 

 

OWNER: Rio Grande LNG, LLC

 

 

 

 

 

CONTRACTOR: Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

 

 

DATE OF EPC AGREEMENT: May 24, 2019

 

 

 

 

This Invoice covers Payment Milestone No(s). _______ set forth in Schedule C-2
of the EPC Agreement and covers the Month ending ______________, 20___ (“Current
Date”).

 

Contractor hereby makes application for payment to Owner as shown below in
connection with the above referenced Contract between the Parties.

 

 

 

 

 

1.

Original Aggregate Equipment Price (Section 7.1B.1 of EPC Agreement)

U.S.$

 

2.

Net change by executed Change Orders (Exhibit 1, column D total)

U.S.$

 

3.

Aggregate Equipment Price to date (Line 1 + Line 2)

U.S.$

 

4.

Original Aggregate Labor and Skills Price (Section 7.1B.2 of Agreement)

U.S.$

 

5.

Net change by executed Change Orders (Exhibit 1, column C total)

U.S.$

 

6.

Aggregate Labor and Skills Price to date (Line 4 + Line 5)

U.S.$

 

7.

Total for completion of Work based on Earned Value for this Month (Attachment C)

U.S.$

 

8.

Total for completion of Work based on Payment Milestones for this Month
(Attachment C)

U.S.$

 

9.

Total earned on Change Directives for this Month (Exhibit 2)

U.S.$

 

10.

Total for this Month (Line 7 + Line 8 + Line 9)

U.S.$

 

11.

Previous cumulative amount Invoiced

U.S.$

 

12.

Carry over amount from previous Month (Line 17 from prior Invoice)

U.S.$

 

13.

Total carry over from previous Month plus total for this Month (Line 10 + Line
12)

U.S.$

 

14.

Maximum cumulative Invoice amount through this Month (from Schedule C-3)

U.S.$

 

15.

Maximum Invoice amount for this Month (Line 14 – Line 11)

U.S.$

 

16.

Acceptable Invoice amount for this Month (lesser of Line 13 and Line 15)

U.S.$

 

17.

Carry over to next Month due to Maximum Cumulative Payment Schedule (Line 13 –
Line 16)

U.S.$

 

18.

U.S. Duties and Tariff costs

U.S.$

 

19.

Current Payment Due

U.S.$

 

 

Contractor certifies that (i) the Work is progressing in accordance with the Key
Dates and Monthly Updated CPM Schedule, except to the extent (if any) expressly
set forth in the current Monthly Progress Report; (ii) the Work described in or
relating to this Invoice has been performed and supplied in accordance with the
EPC Agreement; (iii) all quantities and prices in this Invoice or attached
Exhibits are correct and in accordance with the EPC Agreement and the referenced
Payment Milestone(s) and Work for which Earned Value payments are requested are
complete; (iv) Contractor is entitled to payment of the amount set forth as
“Current Payment Due” in this Invoice, and such Current Payment Due constitutes
in full all amounts due and owing as of the Current Date; (v) the Work and any
portion thereof described in or relating to this Invoice and all previous
invoices are free and clear of all liens, security interests and encumbrances
through the date of this Invoice; (vi) all Subcontractors have been paid the
monies due and payable for Work performed in connection with the Project (except
for any amounts owed such Subcontractors for Work billed under this Invoice);
(vi) fully completed and executed Interim Lien and Claim Waivers from Contractor
and all Major Subcontractors, are attached to this Invoice; (vii) if requested
by Owner, fully completed and executed Interim Lien and Claim Waivers from each
Major Sub-subcontractor; (viii) Contractor has attached to this Invoice an
itemization of the Texas state sales and use tax in the form of Exhibit 3 to
this Schedule I-1 (“Contract Price Itemization for Sales and Use Tax Purposes”);
(ix) attached to this Invoice is all documentation supporting Contractor’s
request for payment as required under the EPC Agreement; and (x) this Invoice is
signed by an authorized representative of Contractor.

I-1-1

 

 

 

 

 

 

Contractor

Subscribed and sworn to before me this _______________ day of ______________,
20__

 

 

Signed: _________________________

 

 

 

Name: __________________________

 

 

 

Title: ___________________________

Notary Public____________________________

 

 

Date: _____________________, 20___

My Commission Expires: _________________________, 20____

 

I-1-2

 

RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

 

 

 

 

 

 

 

 

INVOICE NUMBER

 

 

INVOICE DATE

 

, 20

 

 

 

OWNER APPROVAL

 

AMOUNT APPROVED by Owner for Payment: US$_________________________________

 

Owner

 

Signed: _________________________

 

Name: __________________________

 

Title: ___________________________

 

Date: _____________________, 20___

 

The AMOUNT APPROVED by Owner is without prejudice to any rights of Owner under
the EPC Agreement.

 

Explanation is listed below or attached if the AMOUNT APPROVED is less than the
amount requested by Contractor under this Invoice:

 

I-1-3

 

EXHIBIT 1

 

LIST OF EXECUTED CHANGE ORDERS

 

The following Change Orders have been executed as of the Current Date by Owner
and Contractor pursuant to Section 6.1D or Section 6.2C.

 

 

 

 

 

 

A

B

C

D

E

No.

Description of Change Order

Aggregate
Labor and
Skills Price
Change
(U.S.$)

Aggregate
Equipment
Price Change
(U.S.$)

Total Price
Change
(U.S.$)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

I-1-4

 

EXHIBIT 2

 

CHANGE DIRECTIVES

 

WORK COMPLETED UNDER CHANGE DIRECTIVES:  The following Work has been completed
for active Change Directives executed by Owner in accordance with Section 6.1E
or Section 6.2D of the EPC Agreement up through the Month ending
____________________, 20_____ (“Current Date”).

 

Table 1

 

 

 

 

 

 

Change
Directive
No.

Description of Change Directive

Month

Monthly Value of
Work Completed
(U.S.$) for each
Active Change
Directive

Total Value of
Work Completed
(U.S.$) for each
Active Change
Directive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Change Directive Work earned for the invoiced Month

 

 

Note:  Closed Change Directives converted to executed Change Orders are
excluded.

 

I-1-5

 

EXHIBIT 3

 

CONTRACT PRICE ITEMIZATION FOR SALES AND USE TAX PURPOSES

 

 

 

 

 

 

 

Component

Original Value

Adjustments due to
Change Order(s)

Current Value

Amount Earned
To Date

Amount
Remaining

Aggregate Equipment Price

 

 

 

 

 

Aggregate Labor and Skills Price

 

 

 

 

 

Contract Price
(total from above lines)

 

 

 

 

 

 

I-1-6

 

EXHIBIT 4

 

INTERIM LIEN AND CLAIM WAIVERS

 

I-1-7

 

EXHIBIT 5

 

INFORMATION REQUIRED OR REQUESTED BY OWNER

 

 

 

I-1-8

 

SCHEDULE I-2

 

FORM OF CONTRACTOR’S FINAL INVOICE

 

Project Name: Rio Grande Natural Gas Liquefaction Facility

 

 

 

Invoice Date:

Contract Date:

Invoice Number:

Payment Terms:

 

 

 

 

Attention:

Remittance Information:

 

 

Rio Grande LNG, LLC

Bank:

[Name]

Address:

[Title]

Account Name:

[Address]

Sort Code:

[Address]

Account Number:

 

SWIFT Code:

 

This Invoice covers Payment Milestone No(s). _______ for the Work as further set
forth in Schedule C-2 of the Agreement and covers the period from
_______________, 201__ to ________________, 201__ (“Current Date”).

 

Contractor hereby makes application for payment to Owner for the Work as shown
below in connection with the above referenced Agreement between the Parties.

 

 

 

 

 

 

 

 

 

 

 

Train 1
Amount

Train 2
Amount

Total
Amount

1

Original Aggregate Equipment Price (Section 7.1B.1 of EPC Agreement)

 

 

 

2

Net change by executed Change Orders

 

 

 

3

Aggregate Equipment Price to date

 

 

 

4

Original Aggregate Labor and Skills Price (Section 7.1B.2 of Agreement)

 

 

 

5

Net change by executed Change Orders

 

 

 

6

Aggregate Labor and Skills Price to date

 

 

 

 

 

 

 

 

7

Original Contract Price

$0.00  

$0.00  

$0.00  

8

Net change by Change Order (Exhibit 1)

 

 

 

9

Contract Price to date

 

 

 

 

 

 

 

 

10

Cumulative amount previously invoiced

 

 

 

 

 

 

 

 

11

Current month amount invoiced for the Earned Value achieved (see Exhibit 2)

 

 

 

12

Current month amount invoiced for Milestones completed (see Exhibit 3)

 

 

 

I-2-1

 

13

Total current month amount invoiced (current payment due)

 

 

 

 

 

 

 

 

14

Cumulative amount invoiced to date

 

 

 

 

 

 

 

 

15

Balance of Contract Price remaining (Line 9 less line 14)

 

 

 

 

 

 

 

Submitted by:

 

 

[_____]

 

 

 

 

By:

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

REMIT VIA WIRE TRANSFER TO:

 

 

[_____]

 

 

[Address]

 

[City], TX [Zip]

 

 

 

 

Bank Name:

 

 

Bank Account#:

 

 

ABA/Routing #:

 

 

CHIPS ID#:

 

 

 

I-2-2

 

EXHIBIT 1 – LIST OF EXECUTED CHANGE ORDERS

 

 

 

 

 

 

 

 

 

Change
Order No.

Change Order Description

Train 1
Amount

Train 2
Amount

Total
Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$0.00   

$0.00  

$0.00  

 

I-2-3

 

EXHIBIT 2 – CURRENT MONTH AMOUNT INVOICED FOR THE EARNED VALUE ACHIEVED

 

 

 

 

 

 

 

 

Train 1

Train 2

Total

 

 

$0.00  

$0.00  

$0.00  

1.

Contract Price to date

 

 

 

2.

Cumulative Percent Completion % Achieved by end of current month

 

 

 

3.

Cumulative Earned Value Achieved (Line 2 multiplied by Line 3)

 

 

 

4.

Cumulative amount previously invoiced for Earned Value Achieved

 

 

 

5.

Current month amount invoiced for the Earned Value achieved (Line 4 less Line 5)

 

 

 

 

Note: Required supporting documentation is attached hereto.

 

I-2-4

 

EXHIBIT 3 – CURRENT MONTH AMOUNT INVOICED FOR MILESTONES COMPLETED

 

 

 

 

 

 

 

 

Milestone
No.

Milestone Description

Train 1
Amount

Train 2
Amount

Total
Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current month amount invoiced for Milestones completed

$0.00  

$0.00  

$0.00  

 

Note: Required supporting documentation is attached hereto.

 

I-2-5

 

EXHIBIT 4 – CONTRACT PRICE ITEMIZATION FOR SALES AND USE TAX PURPOSES

 

 

 

 

 

 

 

Component

Original
Value

Adjustments
due to
Change
Order(s)

Current
Value

Amount
Earned To
Date

Amount
Remaining

Aggregate Equipment Price

 

 

 

 

 

Aggregate Labor and Skills Price

 

 

 

 

 

 

I-2-6

 

EXHIBIT 5 – LIST OF FINAL LIEN AND CLAIM WAIVERS ATTACHED

 

 

 

No.

Name

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note: Required supporting documentation is attached hereto.

 

I-2-7

 

EXHIBIT 6 – CONTRACTOR STATEMENT SUMMARIZING AND RECONCILING ALL PREVIOUS
INVOICES

 

[Contractor to attach final statement]

 

I-2-8

 

EXHIBIT 7 – CONTRACTOR AFFIDAVIT

 

Contractor certifies that (i) all Work (except for that Work and obligations
that survive the termination or expiration of the Agreement) has been fully and
completely performed in accordance with the terms of the Agreement, including
the completion of all Punchlist items; (ii) all quantities and prices in this
final Invoice or attached Exhibits are correct and in accordance with the
Agreement; (iii) fully completed and executed Final Lien and Claim Waivers from
Contractor, all Major Subcontractors, as provided in Section 7.3 of the
Agreement, are attached to this final Invoice; (iv) if requested by Owner, fully
executed Interim Lien and Claim Waivers from all Major Sub-subcontractors; (v)
all documentation and electronic databases required to be delivered by
Contractor to Owner under the Agreement, including Record As-Built Drawings and
Specifications, and test reports, have been delivered to Owner; (vi) all of
Contractor’s, Subcontractors’ and Sub-subcontractors personnel, supplies, waste,
materials, rubbish, and temporary facilities have been removed from the Site,
except as permitted under Section 12.3A of the Agreement; (vii) all
Subcontractors and Sub-subcontractors have been fully paid in accordance with
the terms of their Subcontracts or Sub-subcontracts, except for amounts that are
the subject of this final Invoice, and attached is evidence acceptable to Owner
that all Subcontractors and Sub-subcontractors have been fully paid, less
amounts that are the subject of this final Invoice; (viii) all payrolls, Taxes,
liens, charges, claims, demands, judgments, security interests, bills for
Equipment, and any other indebtedness connected with the Work has been paid;
(ix) Contractor has attached to this Invoice an itemization of the Texas state
sales and use tax in the form of Exhibit 4 to this Schedule I-2 (“Contract Price
Itemization for Sales and Use Tax Purposes”); (x) Contractor has delivered an
executed Final Completion Certificate, which has been accepted by Owner by
signing such certificate; (xi) attached to this final Invoice is all
documentation supporting Contractor’s request for payment as required under the
Agreement; and (xi) this final Invoice is signed by an authorized representative
of Contractor

 

 

 

FOR CONTRACTOR:

 

APPLICABLE TO INVOICE NO(S). ALL (IF ALL, PRINT ALL)

 

 

 

 

DATE:

 

SIGNED:

 

BY:

 

TITLE:

 

 

On this      day of                     , 20      , before me appeared the
above‑signed, known or identified to me personally, who, being first duly sworn,
did say that s/he is the authorized representative of Contractor and that this
document was signed under oath personally and on behalf of Contractor.

 

 

 

 

 

 

Notary Public

 

My term expires (date):

 

 

 

 

 

I-2-9

 

ATTACHMENT  J

 

Health, Safety, Security and Environmental Policies

 

J-1

 

Table of Contents

 

 

 

 

1.0

INTRODUCTION

3

2.0

OBJECTIVES

3

3.0

DEFINITIONS AND INTERPRETATION

3

3.1

Definitions

3

3.2

Interpretation

3

4.0

RIGHTS AND RESPONSIBILITIES

3

5.0

PLANNING

4

5.1

Safety in Engineering and Design

4

5.2

Subcontractor and Sub-subcontractor Safety

4

5.3

Construction

4

5.4

Commissioning

5

5.5

Environmental

5

5.6

Security

5

6.0

PROJECT HSSE EXECUTION

5

6.1

Audits

5

6.2

Inspections

6

6.3

Regulatory Inspections

6

6.4

Owner Communication

6

6.5

Training and Certification

6

6.6

Emergency Response Team

6

6.7

Subcontractors and Sub-subcontractors

6

7.0

REPORTING

7

7.1

Incidents

7

7.2

Leading and Lagging Indicators

7

7.3

Safety Committees

7

7.4

Lessons Learned

7

 

 

J-2

 

1.0         INTRODUCTION

In addition to the requirements specified in any other provision of the
Agreement, this Attachment J sets out the requirements and resultant scope of
activities for health, safety, security and environment (“HSSE”) to be performed
by Contractor for the Project.  This Attachment J does not constitute a
substitute for the Contractor HSSE Plan.

2.0         OBJECTIVES

The objective of this Attachment J is to provide the standards and requirements
for:

·

Compliance with relevant regulations, permits and consents;

·

Contractor HSSE procedures; and

·

Subcontractor HSSE procedures.

3.0         DEFINITIONS AND INTERPRETATION

3.1         Definitions

Capitalized terms have the meaning in the Agreement.  Unless otherwise
specified, Sections and Articles referenced herein refer to the applicable
Section or Article in this Attachment J.

3.2         Interpretation

To the extent there is a conflict between this Attachment J and the terms and
conditions of the Agreement, the terms and conditions of the Agreement shall
prevail.

4.0         RIGHTS AND RESPONSIBILITIES

In addition to the other responsibilities set forth herein, the Parties shall
have the following responsibilities:

4.1.1      Owner rights and responsibilities:

·

Stop the Work in accordance with the Agreement; and

·

Participate in Monthly HSSE reviews organized by the Contractor.

·

Owner’s personnel shall adhere to Contractor’s HSSE plans and procedures in all
areas where Work is being performed under the direction of Contractor.

4.1.2      Contractor rights and responsibilities:

·

Be responsible for health, safety, security, and environment in relation to the
Project to the extent set forth in the Agreement;

·

Develop and maintain HSSE organization charts for Contractor’s HSSE personnel on
the Project at the Site;

·

Review Subcontractor HSSE plans for alignment with Agreement requirements;

·

Develop an HSSE strategy and detailed execution plan for Owner’s comment and
approval.

·

Develop and apply specific HSSE procedures necessary to implement Contractor’s
detailed HSSE execution plan.

·

HSSE execution plan and procedures shall be consistent with Contractor’s
corporate policies and business practices as they relate to HSSE.

J-3

 

5.0         PLANNING

Contractor shall prepare an overall HSSE execution plan and procedures covering
all Work (“HSSE Plan”). The HSSE Plan shall detail the HSSE requirements for the
Contractor and Subcontractors for areas in and around the Site and other areas
where Work is being performed by Contractor.  The HSSE Plan will comply with
requirements of Sections 2.3, 2.4, 3.6, 3.8, 3.10, 3.17, 3.19, 3.24, and 3.27 of
the Agreement.  Contractor shall provide to Owner the HSSE Plan for approval
pursuant to Section 3.10 of the Agreement.

5.1         Safety in Engineering and Design

Contractor will develop and implement a safety in design program for the
detailed design and engineering to ensure that the design developed by the
Contractor integrates elements of hazard identification and risk assessment
methods.  This program will include and be applicable to all aspects of the Work
and will be made available to the Owner for review. This safety in design
program shall also include ergonomic and human factors reviews of designs to
ensure operability, maintainability, access and egress are duly
considered.  Reviews of the 3D model shall incorporate such safety in design
requirements.

5.2         Subcontractor and Sub-subcontractor Safety

Contractor will require that all Subcontractors and Sub-subcontractors comply
with the HSSE Plan.

5.3         Construction

Section 6.0 further details HSSE requirements for the Contractor to implement at
Site and for all elements of the Work during construction and pre-Commissioning.

The HSSE Plan and procedures for the Site shall contain multiple elements to
increase the visibility of HSSE protection during execution of the Work and
shall include:

·

Posters with performance to date and safety themes;

·

Site induction and regular tool-box meetings;

·

Training of workers prior to commencing special tasks;

·

Competent and qualified persons list;

·

Identification badges that ensure controlled and necessary access to Site;

·

Inspection of all vehicles and Construction Equipment prior to first use on
Site, with up to date testing certificates (as applicable) and/or color (tape)
labelling (as applicable);

·

Periodic (quarterly) re-inspection and updating of color tape identification to
mark fit-for use Construction Equipment;

·

Testing and/or verification of skills of specific groups of workers, such as
divers, scaffolders, truck drivers, signal persons, excavator operators, and
crane operators;

·

Define or make reference to scaffold tagging procedure, lock-out/tag-out
procedure, permit-to-work procedure.

5.3.1      Marine Construction

The provisions of Section 6.0 shall apply to all marine construction. Further,
Contractor shall include in its HSSE Plan and procedures provisions to address
the

J-4

 

risks to workers and the environment during construction of the marine
structures and facilities such as the marine offloading facilities, loading
jetties, and any other open water activities.

5.4         Commissioning

All provisions of Section 6.0 shall apply from the start of Commissioning to
handover to Owner at Substantial Completion.

5.5         Environmental

As part of the HSSE Plan, Contractor will develop and implement an environmental
plan and associated procedures which is compliant with the requirements of the
Agreement, including Sections 3.6 and 3.17 thereof, and all Applicable Law.  The
environmental plan will detail Contractor participation and compliance with
Owner’s regulatory compliance reporting, as well as Contractor generated plans
to perform the Work including storm-water pollution prevention plan, and other
remedial action identification and close-out procedures. Regular Construction
Equipment inspections to prevent spills and pollution shall be part of the
environmental plan.

5.6         Security

Contractor will develop and implement a security plan which is compliant with
the requirements of the Agreement, including Sections 3.10, 3.24, 3.25, and 4.3
of the Agreement, and all Applicable Law.  The security plan will detail the
requirements for the physical and cyber security of offices, Subcontractor
facilities, and Site. The security plan will also address the control of access
for personnel (both physical and cyber), vehicles, Equipment, Construction
Equipment and Hazardous Materials (including gate passes for removal from Site),
and logging of access card swipes at Site. The access card system will also host
the records on personnel induction training for gate entry and cross-referenced
to other records for personnel allowed to enter the Site.

Contractor shall deliver to Owner the security plan the earlier of [***] ([***])
Days after NTP or [***] ([***]) Days prior to commencement of the Work at the
Site for Owner’s for review and approval.

6.0         PROJECT HSSE EXECUTION

Contractor will regularly assess the implementation of, and compliance with, the
HSSE Plan.

6.1         Audits

Contractor’s HSSE Plan shall include a HSSE internal audit plan. HSSE internal
audits will be scheduled and executed for the measurement of compliance to and
effectiveness of HSSE processes and procedures.

Contractor will initiate corrective actions for findings arising from such
audits and track the implementation and closeout of corrective actions prior to
the next scheduled audit.

J-5

 

Planned internal audits specified in the HSSE Plan will be notified to the
Owner. Summaries of Contractor’s HSSE audit reports, corrective actions and
close out documentation will be made available to the Owner upon request.

6.2         Inspections

As part of the HSSE Plan, Contractor will develop a Project-specific plan and
schedule of weekly inspections of the Site. These inspections will be carried
out by Contractor personnel with participation of Owner’s Representative, at
Owners discretion.

At weekly Contractor meetings, the results of the HSSE inspections will be
discussed and where applicable follow-up actions and responsibilities will be
assigned. Subcontractor’s own HSSE personnel shall carry out their own worksite
inspections.

6.3         Regulatory Inspections

As part of the HSSE Plan, Contractor will implement a procedure to address
regulatory inspections.  This procedure will include a requirement to inform
Owner of regulatory inspections, request participation, and make available the
findings of the inspections to the extent specified in the Agreement.

6.4         Owner Communication

Communication requirements are described in Attachment X.

6.5         Training and Certification

As part of the HSSE Plan, Contractor will develop and implement a procedure and
processes to train Contractor personnel, Subcontractor personnel, and Owners
personnel on the HSSE rules, guidelines and expectations for performing Work at
the Site or other locations where construction, fabrication, or heavy lift
operations are being performed.

This training program will comply with all applicable federal, state and local
regulatory requirements.  This training program will also ensure that
Contractor, Subcontractor and Sub-subcontractor personnel are trained on the
pertinent Site specific HSSE requirements for their work scope.

6.6         Emergency Response Team

As part of the HSSE Plan, Contractor will establish an emergency response team
(“ERT”) at the Site, and the ERT will be responsible for responding to incidents
at the Site, as established in the Owner and Contractor emergency response plans
(“ERP”).

6.7         Subcontractors and Sub-subcontractors

Contractor will require that all Subcontractors and Subcontractors’ personnel
comply with the requirements of the HSSE Plan when they work at the Site or
remote locations. Subcontractors are also required to adhere to Contractor’s
HSSE plan, or have an HSSE plan which is compliant with Project and all federal,
state and local regulatory requirements.  Subcontractors are responsible for
Subcontractors’ personnel compliance to the Subcontractors’ HSSE plans.

Where a Subcontractor hires a Sub-subcontractor to perform work, it is the
responsibility of the Subcontractor to ensure Sub-subcontractor compliance with
the

J-6

 

HSSE Plan.  This includes the training of Sub-subcontractor personnel. Records
of Subcontractor training compliant with the HSSE Plan shall be kept on Site.

7.0         REPORTING

7.1         Incidents

Contractor will require that all Contractor, Subcontractor and Sub-subcontractor
personnel in the home office, at Site or remote locations report any accident or
incident as soon as possible to Contractor.  This reporting will also include
near-misses and any unsafe conditions. Any near miss that could have resulted in
an LTA or any LTA will be subject to a root cause analysis to identify any
potential unsafe working practices.

[***].

For any construction, fabrication or heavy lift operations performed off Site,
Contractor shall also report incidents that occur at such locations if they
occur in relation to the performance of the Work.

All incidents at Site and other areas where Work is being performed shall be
investigated by Contractor and reported to Owner.

7.2         Leading and Lagging Indicators

As part of the HSSE Plan, Contractor will develop and implement a system for
tracking and reporting to the Owner all leading and lagging indicators
associated with the execution of the Work.  This system will also use, as a
basis, lagging indicators from previous Contractor projects to form the basis
for the leading indicators associated with analogous elements of the Work.  This
system will, at a minimum, be based upon GECP.

7.3         Safety Committees

As part of the HSSE Plan, Contractor will establish one or more safety
committees at the Site. Such safety committee(s) shall be comprised of
Contractor personnel on Site, Owner HSSE leadership personnel and, if Contractor
deems necessary, Major Subcontractor personnel performing Work on Site. The Site
safety committee shall meet no less than once per [***] (***) Month period to
review HSSE trends and develop specific HSSE themes and actions to actively
address trends.

7.4         Lessons Learned

As part of the HSSE Plan, Contractor will capture, document, report on and make
available to the Owner all HSSE lessons learned associated with the execution of
the Work. These shall be used to upgrade Site job-specific safety induction
briefings, and also serve as input in developing safety initiatives and focus
programs by the safety committee(s).

 

 

J-7

 

ATTACHMENT K

 

FORM OF LIEN AND CLAIM WAIVERS

 

 

 

 

 

SCHEDULE K-1

 

CONTRACTOR’S INTERIM CONDITIONAL LIEN WAIVER AND RELEASE UPON

PROGRESS PAYMENT

(To be provided by Contractor with each invoice for progress payment)

STATE OF TEXAS

COUNTY OF CAMERON

PROJECT: RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

JOB NO. ___________________

On receipt by the signer of this document, Bechtel Oil, Gas and Chemicals, Inc.
(“Contractor”), of a check, wire transfer or other valid form of payment from,
or on behalf of, Rio Grande LNG, LLC (“Owner”), in the sum of U.S. $__________
payable to Contractor and when the check has been properly endorsed and has been
paid by the bank on which it is drawn, or the wire transfer payment is received
by Contractor, or Contractor is in possession of such other valid form of
payment, as applicable, this document becomes effective to release any
mechanic’s lien right, any right arising from a payment bond that complies with
a state or federal statute, any common law payment bond right, any claim for
payment, and any rights under any similar ordinance, rule, or statute related to
claim or payment rights for persons in Contractor’s position that Contractor has
on the property of Rio Grande LNG, LLC located south of the Brownsville-Port
Isabel Highway and north of the Brownsville Ship Channel in Cameron County near
Brownsville, Texas to the following extent:

For purposes of the provision of labor, services, equipment and/or materials for
the Rio Grande Natural Gas Liquefaction Facility pursuant to that certain Fixed
Price Turnkey Agreement for the Engineering, Procurement and Construction of the
Rio Grande Natural Gas Liquefaction Facility by and between Contractor and
Owner.

This Waiver and Release covers a progress payment for all labor, services,
equipment, and/or materials furnished to the property or to ___________________
(Owner Parties) as indicated in the attached statement(s) or progress payment
request(s), except for unpaid retention, pending modifications and changes, or
other items furnished.

Before any recipient of this document relies on this document, the recipient
should verify evidence of payment to Contractor.

Contractor warrants that Contractor has already paid or will use the funds
received from this progress payment to promptly pay in full all of Contractor’s
laborers, subcontractors, materialman, and suppliers for all work, materials,
equipment, and/or services provided for or to the above referenced Project in
regard to the attached statement(s) or progress payment request(s).

FOR CONTRACTOR:

Applicable to Invoice(s) No(s).

 

 

Date:

 

 

Signed:

 

 

By:

 

 

Title:

 

 

 

AFFIDAVIT

On this       day of               , 20      , before me appeared the
above‑signed, known or identified to me personally, who, being first duly sworn,
did say that s/he is the authorized representative of Contractor and that this
document was signed on behalf of Contractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-1-1

 

SCHEDULE K-2

 

CONTRACTOR’S INTERIM CONDITIONAL CLAIM WAIVER

UPON PROGRESS PAYMENT

(To be provided by Contractor with each invoice for progress payment)

 

STATE OF TEXAS

COUNTY OF CAMERON

 

The undersigned, Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”), has been
engaged under a contract with Rio Grande LNG, LLC (“Owner”) to furnish certain
materials, equipment, services, and/or labor for the construction of
improvements to the Rio Grande Natural Gas Liquefaction Facility Project,
together with all improvements and appurtenances attendant thereto (the
“Facility”), which is located near Brownsville, Texas, and more particularly
described as follows: south of the Brownsville-Port Isabel Highway and north of
the Brownsville Ship Channel in Cameron County near Brownsville, Texas.

 

Upon receipt of the sum of U.S. $___________________________, Contractor waives
and releases any and all claims and demands (except those concerning lien or
bond rights which are separately waived pursuant to TEX. PROP. CODE ANN.
§ 53.284 by the Contractor’s Interim Conditional Waiver and Release on Progress
Payment, which is executed concurrently with this form) against Owner for
payment for work, materials, equipment, services, labor, and other items
performed or provided through the date of _______________, 20___ (include the
Current Date as defined in the Invoice) except this Waiver and Release does not
foreclose and Contractor reserves (i) claims for payment related to work,
materials, equipment, services, labor, and other items performed or provided
pursuant to a Change Directive; or (ii) retained or escrowed amounts, on account
of materials, equipment, services and/or labor furnished by the undersigned to
or on account of Owner or any other entity for said Facility.  For the avoidance
of doubt, this Waiver and Release does not foreclose and Contractor reserves (a)
Change Order rights under the Agreement for unknown claims unrelated to payment
for work, materials, equipment, services, labor, and other items performed or
provided through the date above (except to the extent precluded by the
Agreement), (b) claims for payment for work, materials, equipment, services,
labor, and other items performed or provided which are known but the required
notice period has not expired, or (c) claims for payment for work, materials,
equipment, services, labor, and other items performed or provided for which
notice was given by Contractor as required under Section 6.5 of the
Agreement;  Exceptions as follows:

___________________________________________________________________________________

 

___________________________________________________________________________________

(If no exceptions or “none” is entered above, undersigned shall be deemed not to
have reserved any claim.)

 

This Waiver and Release is freely and voluntarily given, and the undersigned
acknowledges and represents that it has fully reviewed the terms and conditions
of this Waiver and Release, that it is fully informed with respect to the legal
effect of this Waiver and Release, and that it has voluntary chosen to accept
the terms and conditions of this Waiver and Release in return for the payment
recited above.

 

FOR CONTRACTOR:

 

 

 

 

 

 

Dated:

 

 

    

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

Applicable to Invoice No.

 

 

By: 

 

 

 

 

 

(signature)

 

 

 

 

Print Name:

 

 

 

 

 

Title:

 

 

 

 

 

K-2-1

 

SCHEDULE K-3

 

SUBCONTRACTOR’S INTERIM CONDITIONAL LIEN WAIVER AND RELEASE UPON PROGRESS
PAYMENT

(To be provided by Subcontractor with each invoice for progress payment)

 

STATE OF TEXAS

COUNTY OF CAMERON

PROJECT: RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

JOB NO. ___________________

 

Upon receipt by the signer of this document, [______________] (“Subcontractor”),
of a check, wire transfer or other valid form of payment from, or on behalf of
Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”), in the sum of U.S.
$__________ payable to Subcontractor and when the check has been properly
endorsed and has been paid by the bank on which it is drawn, or the wire
transfer payment is received by Subcontractor, or Subcontractor is in possession
of such other valid form of payment, as applicable, this document becomes
effective to release any mechanic’s lien right, any right arising from a payment
bond that complies with a state or federal statute, any common law payment bond
right,  any claim for payment, and any rights under any similar ordinance, rule,
or statute related to claim or payment rights for persons in Subcontractor’s
position that Subcontractor has on the property of Rio Grande LNG, LLC, located
south of the Brownsville-Port Isabel Highway and north of the Brownsville Ship
Channel in Cameron County near Brownsville, Texas to the following extent:

 

For purposes of the provision of labor, services, equipment and/or materials for
the Rio Grande Natural Gas Liquefaction Facility.

 

This Waiver and Release covers a progress payment for all labor, services,
equipment, and/or materials furnished to the property or to Contractor, or to
___________________ (Owner Parties) as indicated in the attached statement(s) or
progress payment request(s), except for unpaid retention, pending modifications
and changes, or other items furnished.

 

Before any recipient of this document relies on this document, the recipient
should verify evidence of payment to Subcontractor.

 

Subcontractor warrants that Subcontractor has already paid or will use the funds
received from this progress payment to promptly pay in full all of
Subcontractor’s laborers, subcontractors, materialman, and suppliers for all
work, materials, equipment, and/or services provided for or to the above
referenced Project in regard to the attached statement(s) or progress payment
request(s).

 

 

 

 

FOR SUBCONTRACTOR:

 

 

Applicable to Invoice(s) No(s).

 

 

 

 

Date:

 

 

Signed:

 

 

By:

 

 

Title:

 

 

 

K-3-1

 

AFFIDAVIT

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Subcontractor and that this document was signed
on behalf of Subcontractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-3-2

 

SCHEDULE K-4

 

SUBCONTRACTOR’S INTERIM CONDITIONAL CLAIM WAIVER UPON PROGRESS PAYMENT

(To be provided by Subcontractor with each invoice for progress payment)

 

STATE OF TEXAS

COUNTY OF CAMERON

 

The undersigned, _______________________ (“Subcontractor”), has been engaged
under a contract with Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”) to
furnish certain materials, equipment, services, and/or labor for the
construction of improvements to the Rio Grande Natural Gas Liquefaction Facility
Project, together with all improvements and appurtenances attendant thereto (the
“Facility”), which is located near Brownsville, Texas, and more particularly
described as follows:  south of the Brownsville-Port Isabel Highway and north of
the Brownsville Ship Channel in Cameron County near Brownsville, Texas.

 

Upon receipt of the sum of U.S. $___________________________, the Subcontractor
waives and releases any and all claims, demands, actions, causes of action or
other rights (except those concerning lien or bond rights which are separately
waived pursuant to TEX. PROP. CODE ANN. § 53.284 by the Subcontractor’s Interim
Conditional Waiver and Release on Progress Payment, which is executed
concurrently with this form) against Contractor or Rio Grande LNG, LLC (“Owner”)
for payment for work, materials, equipment, services, labor, and other items
performed or provided through the date of _______________, 20___ and reserving
those rights that the Subcontractor might have in any retained amounts, on
account of materials, equipment, services and/or labor furnished by the
undersigned to or on account of Owner or any other entity for said
Facility.  Exceptions as follows: _____________________________

_____________________________________________________________________________________

 

(If no exceptions or “none” is entered above, undersigned shall be deemed not to
have reserved any claim.)

 

This Waiver and Release is freely and voluntarily given, and the undersigned
acknowledges and represents that it has fully reviewed the terms and conditions
of this Waiver and Release, that it is fully informed with respect to the legal
effect of this Waiver and Release, and that it has voluntary chosen to accept
the terms and conditions of this Waiver and Release in return for the payment
recited above.

 

FOR SUBCONTRACTOR:

 

 

 

 

 

 

Dated:

 

    

[Name of Subcontractor]

 

 

 

Applicable to Invoices No.

 

 

By: 

 

 

 

 

(signature)

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

AFFIDAVIT

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Subcontractor and that this document was signed
on behalf of Subcontractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-4-1

 

SCHEDULE K-5

 

CONTRACTOR’S FINAL LIEN WAIVER AND RELEASE UPON FINAL PAYMENT

 

STATE OF TEXAS

COUNTY OF CAMERON

PROJECT: RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

JOB NO. ___________________

 

Upon receipt by the signer of this document, Bechtel Oil, Gas and Chemicals,
Inc. (“Contractor”), of a check, wire transfer or other valid form of payment
from, or on behalf of, Rio Grande LNG, LLC (“Owner”), in the sum of U.S.
$__________ payable to Contractor and when the check has been properly endorsed
and has been paid by the bank on which it is drawn, or the wire transfer payment
is received by Contractor, or Contractor is in possession of such other valid
form of payment, as applicable, this document becomes effective to release any
mechanic’s lien right, any right arising from a payment bond that complies with
a state or federal statute, any common law payment bond right, any claim for
payment, and any rights under any similar ordinance, rule, or statute related to
claim or payment rights for persons in Contractor’s position that Contractor has
on the property of Rio Grande LNG, LLC located south of the Brownsville-Port
Isabel Highway and north of the Brownsville Ship Channel in Cameron County near
Brownsville, Texas to the following extent:

 

For purposes of the provision of labor, services, equipment and/or materials for
the Rio Grande Natural Gas Liquefaction Facility pursuant to that certain Fixed
Price Turnkey Agreement for the Engineering, Procurement and Construction of the
Rio Grande Natural Gas Liquefaction Facility by and between Contractor and
Owner.

 

This Waiver and Release covers the final payment to the Contractor for all
labor, services, equipment, and/or materials furnished to the property, or to
____________ (Owner Parties).

 

Before any recipient of this document relies on this document, the recipient
should verify evidence of payment to Contractor.

 

Contractor warrants that Contractor has already paid or will use the funds
received from this final payment to promptly pay in full all of Contractor’s
laborers, subcontractors, materialman, and suppliers for all work, materials,
equipment, and/or services provided for or to the above referenced Project up to
the date of this Waiver and Release.

 

 

 

 

FOR CONTRACTOR:

 

Applicable to Invoice No(s). ALL (if all, print all)

 

 

 

Date:

 

 

Signed:

 

 

By:

 

 

Title:

 

 

 

AFFIDAVIT

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Contractor and that this document was signed on
behalf of Contractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

K-5-1

 

SCHEDULE K-6

 

CONTRACTOR’S FINAL CLAIM WAIVER AND RELEASE UPON FINAL PAYMENT

(To be executed by Contractor with the invoice for final payment)

 

STATE OF TEXAS

COUNTY OF CAMERON

 

The undersigned, Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”), has been
engaged under a contract with Rio Grande LNG, LLC (“Owner”) to furnish certain
materials, equipment, services, and/or labor for the construction of
improvements to the Rio Grande Natural Gas Liquefaction Facility Project,
together with all improvements and appurtenances attendant thereto (the
“Facility”), which is located near Brownsville, Texas, and more particularly
described as follows:  south of the Brownsville-Port Isabel Highway and north of
the Brownsville Ship Channel in Cameron County near Brownsville, Texas.

 

Upon receipt of the sum of U.S. $___________________________ (amount in invoice
for final payment), Contractor waives and releases all claims, demands, actions,
causes of actions or other rights at law, in contract, tort, equity or otherwise
(except those concerning lien or bond rights which are separately waived
pursuant to TEX. PROP. CODE ANN. § 53.284 by the Contractor’s Conditional Waiver
and Release on Final Payment, which is executed concurrently with this form)
that Contractor has, may have had or may have in the future against Owner for
payment for work, materials, equipment, services, labor, and other items
performed under the contract with Owner.  This Waiver and Release applies to all
facts, acts, events, circumstances, changes, constructive or actual delays,
accelerations, extra work, disruptions, interferences and the like which have
occurred, or may be claimed to have occurred prior to the date of this Waiver
and Release, whether or not known to Contractor at the time of the execution of
this Waiver and Release.

 

Contractor represents that all of its obligations, legal, equitable, or
otherwise, relating to or arising out of its work on the Facility have been
fully satisfied (except for that work and obligations that survive the
termination or expiration of the contract, including warranties and correction
of defective work), including, but not limited to, payment to subcontractors and
employees and payment of taxes.

 

This Waiver and Release is freely and voluntarily given, and Contractor
acknowledges and represents that it has fully reviewed the terms and conditions
of this Waiver and Release, that it is fully informed with respect to the legal
effect of this Waiver and Release, and that it has voluntarily chosen to accept
the terms and conditions of this Waiver and Release in return for the payment
recited above.  Contractor understands, agrees and acknowledges that, upon
payment, this document waives rights unconditionally and is fully enforceable to
extinguish all claims (except those concerning lien or bond rights which are
separately waived pursuant to TEX PROP. CODE § 53.284 by the Contractor’s Final
Conditional Lien Waiver and Release on Final Payment, which is executed
concurrently with this form) of Contractor against Owner for payment for work,
materials, equipment, services, labor, and other items performed under the
contract with Owner as of the date of execution of this document by Contractor.

 

FOR CONTRACTOR:

 

 

 

 

 

 

Dated:

 

    

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

Applicable to Invoice No(s):      ALL        .

 

 

By: 

 

 

 

 

(signature)

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

AFFIDAVIT

K-6-1

 

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Contractor and that this document was signed on
behalf of Contractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-6-2

 

SCHEDULE K-7

 

SUBCONTRACTOR’S FINAL LIEN WAIVER AND RELEASE UPON FINAL PAYMENT

 

STATE OF TEXAS

COUNTY OF CAMERON

PROJECT: RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

JOB NO. ___________________

 

Upon receipt by the signer of this document, [___________________]
(“Subcontractor”), of a check, wire transfer or other valid form of payment
from, or on behalf of Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”), in
the sum of U.S. $__________ payable to Subcontractor and when the check has been
properly endorsed and has been paid by the bank on which it is drawn, or the
wire transfer payment is received by Subcontractor, or Subcontractor is in
possession of such other valid form of payment, as applicable, this document
becomes effective to release any mechanic’s lien right, any right arising from a
payment bond that complies with a state or federal statute, any common law
payment bond right, any claim for payment, and any rights under any similar
ordinance, rule, or statute related to claim or payment rights for persons in
Subcontractor’s position that Subcontractor has on the property of Rio Grande
LNG, LLC, located south of the Brownsville-Port Isabel Highway and north of the
Brownsville Ship Channel in Cameron County near Brownsville, Texas to the
following extent:

 

For purposes of the provision of labor, services, equipment and/or materials for
the Rio Grande Natural Gas Liquefaction Facility.

 

This Waiver and Release covers the final payment to the Contractor for all
labor, services, equipment, and/or materials furnished to the property, to the
Contractor, or to ____________ (Owner Parties).

 

Before any recipient of this document relies on this document, the recipient
should verify evidence of payment to Subcontractor.

 

Subcontractor warrants that Subcontractor has already paid or will use the funds
received from this final payment to promptly pay in full all of Subcontractor’s
laborers, subcontractors, materialman, and suppliers for all work, materials,
equipment, and/or services provided for or to the above referenced Project up to
the date of this Waiver and Release.

 

 

 

 

FOR SUBCONTRACTOR:

 

 

Applicable to Invoice No. ALL (if all, print all)

 

 

 

Date:

 

(SEAL)

Signed:

 

 

By:

 

 

Title:

 

 

 

AFFIDAVIT

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Subcontractor and that this document was signed
on behalf of Subcontractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-7-1

 

SCHEDULE K-8

 

SUBCONTRACTOR’S FINAL CLAIM WAIVER AND RELEASE UPON

FINAL PAYMENT

 

STATE OF TEXAS

COUNTY OF CAMERON

 

The undersigned, ___________________________ (“Subcontractor”), has been engaged
under a contract with Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”) to
furnish certain materials, equipment, services, and/or labor for the
construction of improvements to the Rio Grande Natural Gas Liquefaction Facility
Project, together with all improvements and appurtenances attendant thereto (the
“Facility”), which is located near Brownsville, Texas, and more particularly
described as follows: south of the Brownsville-Port Isabel Highway and north of
the Brownsville Ship Channel in Cameron County near Brownsville, Texas.

 

Upon receipt of the sum of U.S. $___________________________ (amount in invoice
for final payment), Subcontractor waives and releases all claims, demands,
actions, causes of actions or other rights at law, in contract, tort, equity or
otherwise (except those concerning lien or bond rights which are separately
waived pursuant to TEX. PROP. CODE § 53.284 by the Subcontractor’s Final Lien
Waiver and Release Upon Final Payment, which is executed concurrently with this
form) that Subcontractor has, may have had or may have in the future against
Contractor or Rio Grande LNG, LLC (“Owner”) (i) for payment for work, materials,
equipment, services, labor, and other items performed or (ii) arising out of, or
in any way related to, Subcontractor’s contract with Contractor or the
Facility.  This Waiver and Release applies to all facts, acts, events,
circumstances, changes, constructive or actual delays, accelerations, extra
work, disruptions, interferences and the like which have occurred, or may be
claimed to have occurred prior to the date of this Waiver and Release, whether
or not known to Subcontractor at the time of the execution of this Waiver and
Release.

 

Except for work and obligations that survive the termination or expiration of
the agreement between Subcontractor and Contractor, including warranties and
correction of defective work, Subcontractor represents that all of its
obligations, legal, equitable, or otherwise, relating to or arising out of its
work on the Facility have been fully satisfied, including, but not limited to,
payment to lower tiered subcontractors and employees and payment of taxes.

 

This Waiver and Release is freely and voluntarily given, and Subcontractor
acknowledges and represents that it has fully reviewed the terms and conditions
of this Waiver and Release, that it is fully informed with respect to the legal
effect of this Waiver and Release, and that it has voluntarily chosen to accept
the terms and conditions of this Waiver and Release in return for the payment
recited above.  Subcontractor understands, agrees and acknowledges that, upon
payment, this document waives rights unconditionally and is fully enforceable to
extinguish all claims (except those concerning lien or bond rights which are
separately waived pursuant to TEX. PROP. CODE § 53.284 by the Subcontractor’s
Final Lien Waiver and Release Upon Final Payment, which is executed concurrently
with this form) of Subcontractor as of the date of execution of this document by
Subcontractor.

 

FOR SUBCONTRACTOR:

 

 

 

 

 

 

Dated:

 

    

[Name of Subcontractor]

 

 

 

Applicable to Invoice No(s):          ALL       .

 

By: 

 

 

 

 

(signature)

 

 

 

 

Print Name:

 

 

 

 

Title:

 

 

K-8-1

 

AFFIDAVIT

On this __ day of _________, 20__, before me appeared the above‑signed, known or
identified to me personally, who, being first duly sworn, did say that s/he is
the authorized representative of Subcontractor and that this document was signed
on behalf of Subcontractor.

 

 

 

Notary Public:

 

 

My term expires (date):

 

 

 

 

 

K-8-2

 

ATTACHMENT L

 

FORM OF COMPLETION CERTIFICATES

 

 

 

 

 

SCHEDULE L-1

 

FORM OF MECHANICAL COMPLETION CERTIFICATE

 

FOR [______________________] (insert applicable system or subsystem)

 

Date: ______________

 

[______________]

[______________]

[______________]

[______________]

Attn: [______________]

 

Re:Mechanical Completion Certificate for ________________________ (insert
applicable system or subsystem or Train) for the Fixed Price Turnkey Agreement
for the Engineering, Procurement and Construction of Trains 1 and 2 of the Rio
Grande Natural Gas Liquefaction Facility (the “Project”), dated as of May 24,
2019 (the “EPC Agreement”), by and between Rio Grande LNG, LLC (“Owner”) and
Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”)

 

Pursuant to Section 11.1A of the EPC Agreement, Contractor hereby certifies all
of the following have occurred with respect to ______________ (insert applicable
system or subsystem or Train), with the exception of Punchlist items, including:
(i) Contractor has completed all design, procurement, fabrication, assembly,
erection, installation and pre-commissioning of all Equipment (including all
systems and components of Equipment, such as all operating, protection, fire,
safety and other related systems required or necessary prior to start-up) for
such applicable system or subsystem of the Equipment or a Train to ensure that
all such Equipment or Train was correctly fabricated, assembled, erected,
installed, tested and pre-commissioned and is capable of being operated safely
and reliably within the requirements and specifications contained in the EPC
Agreement, all as set forth in greater detail in Attachment A and the Mechanical
Completion checklists agreed by Owner and Contractor in accordance with Section
11.1A of the EPC Agreement; (ii) the applicable system, subsystem of Equipment
or Train is ready for the commencement of Commissioning; (iii) Contractor and
Owner have agreed upon an initial Punchlist of items set forth in Section 11.6
of the EPC Agreement, (iv) Contractor hereby delivers to Owner this Mechanical
Completion Certificate for the applicable system or subsystem or Train; and (v)
Contractor has performed all other obligations required under the EPC Agreement
for Mechanical Completion of such system or subsystem.

Contractor certifies that all requirements under the EPC Agreement for
Mechanical Completion with respect to _______________________ (insert applicable
system or subsystem) were achieved on _____, 20__.

 

Attached is all documentation required to be provided by Contractor under the
EPC Agreement to establish that all requirements under the EPC Agreement for
Mechanical Completion of the applicable system or subsystem have been achieved.

 

L-1-1

 

IN WITNESS WHEREOF, Contractor has caused this Mechanical Completion Certificate
to be duly executed and delivered as of the date first written above.

 

 

 

 

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

cc:

 

[__________]

[__________]

Attention: [__________]

Telephone: (___) ___-____

 

L-1-2

 

Owner Acceptance or Rejection of Mechanical Completion Certificate

 

Pursuant to Section 11.4 of the EPC Agreement, Owner ___ accepts or ___ rejects
(check one) the Mechanical Completion Certificate for _____________________
(insert applicable system or subsystem).

 

If the Mechanical Completion Certificate was rejected, the basis for any such
rejection of Mechanical Completion is attached hereto.

 

 

 

 

For and on behalf of

 

 

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

 

L-1-3

 

SCHEDULE L-2

 

NOT USED

 

 

 

L-2-1

 

SCHEDULE L-3

 

FORM OF RFSU CERTIFICATE

 

FOR [_________________] (insert applicable Train)

 

Date: ______________

 

[______________]

[______________]

[______________]

[______________]

Attn: [______________]

 

Re:Ready for Start Up (hereinafter “RFSU”) Certificate for
________________________ (insert applicable Train) for the Fixed Price Turnkey
Agreement for the Engineering, Procurement and Construction of Trains 1 and 2 of
the Rio Grande Natural Gas Liquefaction Facility (the “Project”), dated as of
May 24, 2019 (the “EPC Agreement”), by and between Rio Grande LNG, LLC (“Owner”)
and Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”)

 

Pursuant to Section 11.1B of the EPC Agreement, Contractor hereby certifies all
of the following have occurred with respect to ______________ (insert applicable
Train) with the exception of Punchlist items, including: (i) Contractor has
achieved Mechanical Completion of such Train, including Mechanical Completion of
all systems and subsystems of Equipment for such Train; (ii) all activities
necessary to support the introduction of hydrocarbons, including all utility and
process utility, safeguarding and shutdown systems have been pre-commissioned,
commissioned and integrity verified; (iii) Commissioning is complete, cool down
can commence for such Train, and such Train is ready for startup and acceptance
of feed gas; (iv) Equipment vendor representatives and other specialist
Subcontractors required to support RFSU and early operations are mobilized at
the Site; (v) Contractor hereby delivers to Owner a RFSU Certificate; and (vi)
Contractor has performed all other obligations required under the EPC Agreement
for RFSU of such Train.

Contractor certifies that all requirements under the EPC Agreement for RFSU with
respect to _______________________ (insert applicable Train) were achieved
on_____, 20__.

 

Attached is all documentation required to be provided by Contractor under the
EPC Agreement to establish that all requirements under the EPC Agreement for
RFSU of the applicable Train have been achieved.

 

[signature page follows]

 

L-3-1

 

IN WITNESS WHEREOF, Contractor has caused this RFSU Certificate to be duly
executed and delivered as of the date first written above.

 

 

 

 

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

cc:

 

[__________]

[__________]

Attention: [__________]

Telephone: (___) ___-____

 

L-3-2

 

Owner Acceptance or Rejection of RFSU Certificate

 

Pursuant to Section 11.4 of the EPC Agreement, Owner ___ accepts or ___ rejects
(check one) the RFSU Certificate for _____________________ (insert the
applicable Train).

 

If the RFSU Certificate was rejected, the basis for any such rejection of RFSU
is attached hereto.

 

 

 

 

For and on behalf of

 

 

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

 

L-3-3

 

SCHEDULE L-4

 

FORM OF RLFC CERTIFICATE

 

FOR [______________________] (insert applicable Train)

 

Date: ______________

[______________]

[______________]

[______________]

[______________]

Attn: [______________]

 

Re:Ready to Load First Cargo (hereinafter “RLFC”) Certificate for
____________________ (insert applicable Train) –  for the Fixed Price Turnkey
Agreement for the Engineering, Procurement and Construction of Trains 1 and 2 of
the Rio Grande Natural Gas Liquefaction Facility (the “Project”), dated as of
May 24, 2019 (the “Agreement”), by and between Rio Grande LNG, LLC (“Owner”) and
Bechtel Oil, Gas and Chemicals, Inc. (“Contractor”)

 

Pursuant to Section 11.2 of the Agreement, Contractor hereby certifies all of
the following have occurred with respect to ______________ (insert applicable
Train) with the exception of Punchlist items, including: (i) Contractor has
achieved and maintained RFSU for such Train; (ii) the applicable LNG Storage
Tank(s) designated to be completed as part of such Train have been successfully
cooled down and is operating normally with LNG stored in such tank(s); (iii)
such Train has liquefied natural gas into LNG meeting all specifications and
requirements of the Agreement (other than the Minimum Acceptance Criteria and
Performance Guarantees) and successfully transferred and stored such LNG into
the applicable LNG Storage Tank(s); (iv) the LNG Storage Tank(s) and all LNG
loading and unloading lines (and equipment and systems related thereto)
necessary for transfer of LNG from such LNG Storage Tank(s) to the loading dock
have been cooled down and filled with LNG while remaining at cryogenic
temperatures via circulation to the LNG berth and are ready for transfer of LNG
to an LNG Tanker and for return of vapor and boil-off gas to the LNG tanks, and
the loading dock or berth have successfully passed and Owner has approved the
pre-LNG arrived berth readiness review; (v) LNG is ready for delivery to, and
capable of being delivered to and loaded into, an LNG Tanker via the loading
dock; (vi) Contractor and Owner have agreed upon a list of Punchlist items as
set forth in Section 11.6; (vii) Contractor hereby delivers to Owner this RLFC
Certificate for such Train; and (ix) Contractor has performed all other
obligations required under the Agreement for RLFC of such Train.

Contractor certifies that all requirements under the Agreement for RLFC with
respect to _______________________ (insert applicable Train) were achieved
on          , 20   .

 

Attached is all documentation required to be provided by Contractor under the
Agreement to establish that all requirements under the Agreement for RLFC of
_______________________ (insert applicable Train) have been achieved.

 

L-4-1

 

IN WITNESS WHEREOF, Contractor has caused this RLFC Certificate to be duly
executed and delivered as of the date first written above.

 

 

 

 

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

cc:

 

[__________]

[__________]

Attention: [__________]

Telephone: (___) ___-____

 

L-4-2

 

Owner Acceptance or Rejection of RLFC Certificate

 

Pursuant to Section 11.4 of the Agreement, Owner ___ accepts or ___ rejects
(check one) the RLFC Certificate for _____________________ (insert applicable
Train).

 

If the RLFC Certificate was rejected, the basis for any such rejection of RLFC
is attached hereto.

 

 

 

 

 

For and on behalf of

 

 

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

 

L-4-3

 

SCHEDULE L-5

 

FORM OF SUBSTANTIAL COMPLETION CERTIFICATE

 

FOR [______________________] (insert applicable Train)

 

Date: ______________

 

[______________]

[______________]

[______________]

[______________]

Attn: [______________]

 

Re:Substantial Completion Certificate for ________________________ (insert
applicable Train) for the Fixed Price Turnkey Agreement for the Engineering,
Procurement and Construction of Trains 1 and 2 of the Rio Grande Natural Gas
Liquefaction Facility (the “Project”), dated as of May 24, 2019 (the “EPC
Agreement”), by and between Rio Grande LNG, LLC (“Owner”) and Bechtel Oil, Gas
and Chemicals, Inc. (“Contractor”)

 

Pursuant to Section 11.3 of the EPC Agreement, Contractor hereby certifies all
of the following have occurred with respect to ______________ (insert applicable
Train): (i) Mechanical Completion of such Train, including Mechanical Completion
of all systems and subsystems of Equipment of such Train; (ii) RFSU has been
achieved for such Train; (iii) RLFC has been achieved for such Train; (iv) all
Minimum Acceptance Criteria have been achieved; (v) in the case that all the
Performance Guarantees have not been achieved, Owner has accepted (such
acceptance not to be unreasonably withheld) Contractor’s corrective work plan,
and Contractor has turned over the Train pursuant to Section 11.5A; (vi)
Contractor and Owner have agreed upon a list of Punchlist items as set forth in
Section 11.6; (vii) any Delay Liquidated Damages due and owing have been paid to
Owner in accordance with Section 13.2; (viii) the entire Work related to such
Train (including training and the delivery of all documentation, manuals and
instruction books necessary for safe and proper operation) has been completed,
except for Punchlist items, in accordance with the requirements and
Specifications of the EPC Agreement; (ix) Contractor has delivered to Owner all
Capital Spare Parts for such Train in accordance with Section 3.4B; (x)
Contractor hereby delivers to Owner this Substantial Completion Certificate as
required under Section 11.3; (xi) such Train is available for commercial
operation in accordance with the requirements of the EPC Agreement, and with
respect to Substantial Completion of Train 2, Train 2 has been integrated with
Train 1; (xii) Contractor has obtained all Permits required to be obtained by
Contractor under the EPC Agreement; and (xiii) Contractor has delivered to Owner
a fully executed Interim Lien and Claim Waiver in the form of Schedules K-1 and
K-2, fully executed Interim Lien and Claim Waivers from all Major Subcontractors
in the form of Schedules K-3 and K-4 and, if requested by Owner, fully executed
Interim Lien and Claim Waivers from all Major Sub-subcontractors substantially
in the form of Schedules K-3 and K-4, covering all Work up to the date of
Substantial Completion.

Contractor certifies that it achieved Substantial Completion of Train [__]
on ______________, 20__.

L-5-1

 

Attached is all documentation required to be provided by Contractor under the
EPC Agreement to establish that Contractor has achieved all requirements under
the EPC Agreement for Substantial Completion, including the Performance Test
reports and analysis.

 

IN WITNESS WHEREOF, Contractor has caused this Substantial Completion
Certificate to be duly executed and delivered as of the date first written
above.

 

 

 

 

 

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

cc:

 

[__________]

[__________]

Attention: [__________]

Telephone: (___) ___-____

 

L-5-2

 

Owner Acceptance or Rejection of Substantial Completion Certificate

 

Pursuant to Section 11.4 of the EPC Agreement, Owner ___ accepts or ___ rejects
(check one) the Substantial Completion Certificate for _____________________
(insert applicable Train).

 

If the Substantial Completion Certificate was rejected, the basis for any such
rejection of Substantial Completion is attached hereto.

 

 

 

 

 

For and on behalf of

 

 

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

 

L-5-3

 

SCHEDULE L-6

 

FORM OF FINAL COMPLETION CERTIFICATE

 

Date: ______________

[______________]

[______________]

[______________]

[______________]

Attn: [______________]

 

Re:Final Completion Certificate for the Fixed Price Turnkey Agreement for the
Engineering, Procurement and Construction of Trains 1 and 2 of the Rio Grande
Natural Gas Liquefaction Facility (the “Project”), dated as of May 24, 2019 (the
“EPC Agreement”), by and between Rio Grande LNG, LLC (“Owner”) and Bechtel Oil,
Gas and Chemicals, Inc. (“Contractor”)

 

Pursuant to Section 11.7 of the EPC Agreement, Contractor hereby certifies all
of the following have occurred with respect to the Project, and that all Work
and all other obligations under the EPC Agreement (except for that Work and
obligations that survive the termination or expiration of the EPC Agreement,
including obligations for Warranties, correction of Defective Work and those
covered by Section 11.10), are fully and completely performed in accordance with
the terms of the EPC Agreement, including: (i) the achievement of Substantial
Completion of all Trains; (ii) the achievement of all Performance Guarantees or
payment of all Performance Liquidated Damages due and owing; (iii) the
completion of all Punchlist items; (iv) delivery by Contractor to Owner of a
fully executed Final Lien and Claim Waiver in the form of Schedules K-5 and K-6;
(v) delivery by Contractor to Owner of all documentation required to be
delivered under the EPC Agreement, including Record As-Built Drawings and
Specifications, test reports and the final operations and maintenance manuals
for the Facility; (vi) delivery to Owner, in content and form reasonably
satisfactory to Owner, copies of all required Subcontracts, written assignments
of Subcontractor warranties and a list of the names, addresses and telephone
numbers of the Subcontractors providing such warranties; (vii) removal from the
Site of all of Contractor’s, Subcontractors’ and Sub-subcontractors’ personnel,
supplies, waste, materials, rubbish, Hazardous Materials, Construction
Equipment, and temporary facilities for which Contractor is responsible under
Article 3 of the EPC Agreement; (viii) delivery by Contractor to Owner fully
executed Final Lien and Claim Waivers from all Major Subcontractors in the forms
of Schedules K-7 and K-8; (ix) if, requested by Owner, fully executed Final Lien
and Claim Waivers from Major Sub-subcontractors in a form substantially similar
to the forms of Schedules K-7 and K-8; and (x) Contractor hereby delivers to
Owner this Final Completion Certificate as required under Section 11.7.

Contractor certifies that it achieved Final Completion on            , 20    .

L-6-1

 

IN WITNESS WHEREOF, Contractor has caused this Final Completion Certificate to
be duly executed and delivered as of the date first written above.

 

 

 

 

 

Bechtel Oil, Gas and Chemicals, Inc.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

cc:

 

[__________]

[__________]

Attention: [__________]

Telephone: (___) ___-____

 

L-6-2

 

Owner Acceptance or Rejection of Final Completion Certificate

 

Pursuant to Section 11.7 of the EPC Agreement, Owner ___ accepts or ___ rejects
(check one) the Final Completion Certificate.

 

If the Final Completion Certificate was rejected, the basis for rejection of
Final Completion is attached hereto.

 

 

 

 

 

For and on behalf of

 

 

 

Rio Grande LNG, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Date:

 

 

 

 

L-6-3

 

ATTACHMENT M

 

PRE-COMMISSIONING, COMMISSIONING, START-UP, TRAINING AND TURNOVER PROGRAM

 

[***]

 

 

M-1

 

ATTACHMENT N

 

NOT USED

 

 

 

N-1

 

ATTACHMENT O

 

INSURANCE REQUIREMENTS 

 

1.            Contractor’s Insurance.

A.           Types and Amounts of Insurance.  Contractor shall, at its own cost
and expense, procure and maintain in full force and effect at all times from the
commencement of the Work through Final Completion (and in the case of products
and completed operations coverage, for a further period of ten (10) years after
Final Completion or the applicable statute of repose pursuant to the governing
law under Section 21.9 of the Agreement (“Statute of Repose”), whichever is
greater) the following insurances on an occurrence basis for coverages with the
following prescribed limits of liability; provided however, the insurances
addressed in subsections (iv), (v), (vi), (vii), (viii), (ix), (x), (xi), (xii)
and (xiii) do not need to be maintained until Owner’s issuance of the Notice to
Proceed (or Limited Notice to Proceed as applicable) under the Agreement and the
insurances in subsections (x), (xi), (xii) and (xiii) are required to be
maintained until Substantial Completion of each applicable Train. All required
limits may be met with any combination of primary and excess limits:

i.            Workers’ Compensation and Employers’ Liability
Insurance.  Contractor shall comply with Applicable Law with respect to workers’
compensation and employer’s liability requirements and other similar
requirements where the Work is performed and shall procure and maintain workers’
compensation and employer’s liability policies in accordance with Applicable Law
and the requirements of this Agreement.  These policies shall include coverage
for all states and other applicable jurisdictions, voluntary compensation
coverage and occupational disease and for all temporary and/or leased employees
and Alternate Employer endorsement (WC 00 03 01, or equivalent). To the extent
applicable, if the Work is to be performed on or near navigable waters, the
policies shall include coverage for United States Longshoremen’s and Harbor
Workers’ Act, the Jones Act and/or any other Applicable Law regarding maritime
law.  A maritime employers’ liability policy may be used to satisfy applicable
parts of this requirement with respect to Work performed on or near navigable
waters.

Limits:

Worker’s Compensation: Statutory

Employers’ Liability: US $2,000,000 each accident, US $2,000,000 disease each
employee and US $2,000,000 disease policy limit or amounts required by
Applicable Law, whichever is greater

Maritime Employers’ Liability: US $2,000,000 each accident, US $2,000,000
disease each employee and US $2,000,000 disease policy limit or amounts required
by Applicable Law, whichever is greater

ii.           Commercial General Liability Insurance.  This policy shall be
written as a Contractor Controlled Insurance Policy (as defined in Section 1(D)
below) and provide

O-1

 

coverage against claims for bodily injury (including bodily injury and death),
advertising injury, property damage (including loss of use), and shall include
blanket contractual liability insuring the indemnity obligations under the
Agreement, products and completed operations coverage (for a minimum of ten (10)
years after Final Completion or the Statute of Repose, whichever is greater),
premises and operations coverage, independent contractors, medical expense,
cross liabilities/separation of insureds, temporary storage locations, punitive
damages (to the extent allowed by Applicable Law), sound location/subsidence,
and fire, explosion, collapse, or underground damage.  Such insurance shall not
include any exclusions for X.C.& U., operations within 50 feet of a railroad,
rigging, lifting or boom overload exposures.  Such insurance shall not include
the professional services exclusion. The aggregate limits shall apply separately
to each annual policy period.

Limits:          US $ 2,000,000 each occurrence

US $ 2,000,000 general aggregate with dedicated limits to the Project

US $ 4,000,000 products and completed operations aggregate dedicated to the
Project

iii.           Commercial Automobile Insurance.  This policy shall include
coverage for all owned, hired, rented, and non-owned automobiles and equipment
(if required to be licensed under the applicable vehicle code), and shall
include contractual liability, employees as insured, loading and unloading of
automotive equipment, deletion of the fellow employee exclusion,
uninsured/underinsured motorist and no-fault insurance provisions wherever
applicable and liabilities for the death of or injury to any one person and
liabilities for loss of or damage to property resulting from any one accident
and otherwise comply with Applicable Law.  If Hazardous Materials are to be
hauled, then the policy shall contain an MCS-90 endorsement that evidences a
policy limit of U.S. $5,000,000.

Limit:          US $ 25,000,000 each occurrence

iv.           Umbrella or Excess Liability Insurance.  This policy shall be
written as a Contractor Controlled Insurance Policy (as defined in Section 1(D)
below) on a “following form” basis and shall provide coverage in excess of the
coverages required to be provided by Contractor for employers’ liability
insurance, commercial general liability insurance and maritime employer’s
liability. The aggregate limit shall apply separately to each annual policy
period.

Limits:          US $ 200,000,000 each occurrence dedicated to the Project

US $ 200,000,000 aggregate limit with dedicated limits to the Project

v.            Comprehensive Aircraft Liability Insurance.  If applicable, for
all aircraft owned (including drones), operated, chartered, or brokered by or
for Contractor or its

O-2

 

Subcontractors or Sub-subcontractors in connection with the Work under the
Agreement, Contractor shall carry or require the owner or operator of such
aircraft to carry:

(a)          Aircraft Hull Insurance for agreed value, including breach of
warranty, coverage to present value each aircraft, or breach of warranty amount,
whichever is greater.

(b)          Aircraft Liability Insurance, including coverage for bodily injury
liability, property damage liability and passenger liability, and including
coverage for contractual liability for those liabilities assumed by Contractor,
including liability for damage due to collision, pollution and removal of wreck.
If aircraft will be used to perform lifts at the Site or any Project related
site, a “slung cargo” endorsement must be included to cover the full replacement
value of any equipment being lifted.

Limit:          US $ 10,000,000 per occurrence

(c)          The policy listed in clause (b) above shall provide a breach of
warranty in favor of Owner Indemnified Parties.

vi.          Watercraft Insurance.  If applicable, for all vessels owned,
operated, chartered, or brokered by or for Contractor or any of its
Subcontractors or Sub-subcontractors in connection with its Work under the
Agreement, Contractor or its Subcontractors shall carry or require the owner or
operator of such vessels to carry:

(a)          Hull Insurance for full market value of each vessel,

(b)          Protection and Indemnity Insurance to cover liabilities arising out
of the ownership, operation and use of any vessel, including coverage for
contractual liability for those liabilities assumed by Contractor herein,
including pollution liability and coverage for crew and personnel on such
vessels (if not covered under Workers’ Compensation Insurance), with no
exclusion for activities arising from the use of  remote operated vehicles and
submarines and diving operations (if these operations are to be performed under
this Agreement), and including collision and tower’s liability, cargo legal
liability (to the extent applicable), and coverage for liabilities for the
removal of wreck or debris.  The clause “As Owner other than Owner” shall be
deleted.  Insurers shall waive any right to limit liability to the value of the
vessel, but only with respect to Owner Indemnified Parties, and the phrase “as
owner of vessel named herein” and all similar phrases purporting to limit the
insurer’s liability to that of an owner shall be deleted.  Contractor may
satisfy the obligation to provide this insurance coverage by causing its marine
Subcontractor(s) or Sub-subcontractor(s) to provide and maintain such insurance.

Limit:          US $50,000,000 per occurrence

O-3

 

(c)          Charterer’s Legal Liability Insurance to cover liabilities arising
out of operation and use of any time or voyage chartered vessel including
coverage for contractual liability for those liabilities assumed by Contractor
herein.

Limit:          US $50,000,000 per occurrence

(d)          Vessel Pollution Coverage with limits of US $25,000,000 per
occurrence

(e)          The insurance listed in clauses (a) and (b) above shall provide
that seaworthiness of vessels used to perform Work under this Agreement is
accepted by insurers (or that insurers shall waive in favor of Owner Indemnified
Parties, the vessel owner’s and/or Contractor’s warranty of seaworthiness).

vii.         Contractor’s Equipment Floater.  Contractor shall maintain or
self-insure, and shall cause all Subcontractors and Sub-subcontractors to
maintain or self-insure, equipment insurance covering all materials, tools,
equipment, and items (whether owned, rented, or borrowed) of Contractor, its
Subcontractors and Sub-subcontractors that will not become part of the finished
Work, including loss or damage during loading, unloading and while in
transit.  Such coverage shall be on an all-risk basis to the full value of the
materials, tools, equipment, and items with any and all deductibles to be
assumed by, for the account of, and at Contractor’s, Subcontractor’s, and
Sub-subcontractor’s sole risk. Contractor waives, and shall cause all of its
Subcontractors and Sub-subcontractors to waive, all rights against Owner
Indemnified Parties for loss or damage to any Construction Equipment used in
connection with the Project.

viii.        Contractor’s Pollution Liability Insurance.  This policy shall be
written as a Contractor Controlled Insurance Policy (as defined in Section 1(D)
below) and provide coverage against claims for bodily injury (including bodily
injury and death) and property damage (including loss of use) caused by or
arising out of pollution incidents arising from the activities of Contractor or
any of its Subcontractors or Sub-subcontractors at or near the Site, and shall
include contractual liability per the terms and conditions of such
policy.  Coverage shall apply to sudden and gradual pollution events and mold
and fungus damage, shall include all transportation-related events, and respond
to cleanup both on and off the Site.  Coverage shall include completed
operations coverage for two (2) years after Final Completion.

(a)          Such insurance shall include by its terms or appropriate
endorsements: completed operations limited cancellation clause; silt, soil and
sediment as pollutants; any locations other than the Site or any other site
where materials are received or stored; and discovery-triggered coverage for
emergency response costs.

(b)          Coverage must be evidenced for on and off-site transportation which
may result in a pollution incident/event and non-owned disposal site

O-4

 

coverage (if applicable), and shall not include a lead-based paint or asbestos
exclusion if such materials are included in the Equipment and materials supplied
as part of the Work or are present at the Site or any Project-related site.

Limits:          US $ 50,000,000 each occurrence

US $ 100,000,000 in the aggregate with limits dedicated to the Project

ix.          Marine Liability Insurance.  If a dock or wharf is used to perform
any part of the Work (or Work is otherwise performed on, over, or in close
proximity to navigable waters), Contractor shall, or shall cause the relevant
Subcontractor to, provide marine liability insurance covering liabilities
arising from the use or operation of the dock or wharf in the care, custody or
control of the Contractor or for Work performed on, over, or in close proximity
to navigable waters.  This requirement does not apply to transport providers if
coverage is provided under a separate protection and indemnity policy.  Coverage
shall include the following: wharfinger’s/stevedores/MTOL with respect to
operations at the construction dock, contractual liability (if not provided in
the policy form, is to be provided by endorsement), sudden and accidental
pollution, “in rem” liability and charterer’s legal liability and deletion of
the care, custody and control exclusion.

Limits:          US $ 25,000,000 each occurrence

US $ 50,000,000 general aggregate

US $ 50,000,000 products and completed operations aggregate

x.           Builder's Risk Insurance.  Property damage insurance on an "all
risk" basis insuring Contractor, Owner and Lender, as their interests may
appear, including coverage against loss or damage from the perils of earth
movement (including earthquake, landslide, subsidence and volcanic eruption),
Windstorms, startup and testing, strike, riot, civil commotion, malicious damage
, and terrorism (such terrorism policy may be obtained under a separate policy).

(a)          Property Covered:  The insurance policy shall  provide coverage for
(i) the buildings, structures, boilers, machinery, Equipment, facilities,
fixtures, supplies, fuel, and other properties constituting a part of the
subject Train, (ii) free issue items used in connection with the subject Train,
(iii) the inventory of spare parts to be included in the subject Train, (iv)
property of others in the care, custody or control of Contractor or Owner in
connection with the subject Train, (v) all preliminary works, temporary works
and interconnection works, (vi) foundations and other property below the surface
of the ground, and (vii) electronic equipment and media.

(b)          Additional Coverages:  The insurance policy shall insure (i) the
cost of preventive measures to reduce or prevent a loss (sue & labor) in an
amount not less than U.S.$5,000,000, (ii) operational and performance

O-5

 

testing for a period not less than ninety (90) Days, (iii) unless otherwise
covered under the marine cargo policy, inland transit with sub-limits sufficient
to insure the largest single shipment to or from the Site from anywhere
worldwide, (iv) expediting expenses (defined as extraordinary expenses incurred
after an insured loss to make temporary repairs and expedite the permanent
repair of the damaged property) in an amount not less than U.S.$15,000,000,
which such amount shall be specific to Section 1 of the Builder’s Risk policy,
(v) off-Site storage with sub-limits sufficient to insure the full replacement
value of any property or Equipment not stored on the Site, and (vi) the removal
of debris with a sub-limit not less than twenty-five percent (25%) of the loss
amount, but subject to a minimum of U.S.$25,000,000.

(c)          Special Clauses:  The insurance policy shall include (i) a
seventy-two (72) hour flood/storm/earthquake clause, (ii) unintentional errors
and omissions clause, (iii) a 50/50 clause, (iv) an other insurance clause
making this insurance primary over any other insurance, (v) a clause stating
that the policy shall not be subject to cancellation by the insurer except for
non-payment of premium and (vi) an extension clause allowing the policy period
to be extended up to six (6) months with respect to physical loss or damage
without modification to the terms and conditions of the policy and a pre-agreed
upon premium, with an option to extend for an additional six (6) months (for a
total of twelve (12) months) for an additional premium to be agreed.

(d)          Prohibited Exclusions:  The insurance policy shall not contain any
(i) coinsurance provisions, (ii) exclusion for loss or damage resulting from
freezing and mechanical breakdown, (iii) exclusion for loss or damage covered
under any guarantee or warranty arising out of an insured peril, (iv) exclusion
for resultant damage caused by ordinary wear and tear, gradual deterioration,
normal subsidence, settling, cracking, expansion or contraction and faulty
workmanship, design or materials no more restrictive than the LEG 3/96 or DE-5
exclusion.

(e)          Sum Insured:  The insurance policy shall (i) be on a replacement
cost form, with no periodic reporting requirements with the exception of
material changes in the sum insured, (ii) insure each Train for an amount no
less than an amount to be determined based upon a probable maximum loss study
for such Train performed by a reputable and experienced firm reasonably
satisfactory to Contractor, Owner and Owner’s Lenders, with such maximum
probable loss approved by the Parties within such time; (iii) value losses at
replacement cost, without deduction for physical depreciation or obsolescence
including custom duties, Taxes and fees, (v) insure loss or damage from earth
movement without a   sub-limit, (vi) insure the Facility for property loss or
damage from Named Windstorm and water damage (including flood and storm surge)
with a sub-limit of not less than U.S.$250,000,000 or other such greater sum as
determined by Owner,

O-6

 

subject to commercial availability, and such sublimit shall apply to the
combined loss covered under Section 1.A.x Builder’s Risk and Section1.A.xi
Builder’s Risk Delayed Startup, and (viii) insure with a sub-limit not less than
U.S.$250,000,000 for loss or damage from strikes, riots and civil commotion.

(f)          Deductible:  The insurance policy covering each Train shall have no
deductible greater than U.S.$500,000 per occurrence; provided, however, (i) for
Windstorms and water damage (including flood and storm surge), the deductible
shall not be greater than two percent (2%) of values at risk for the Facility,
subject to a minimum deductible of U.S.$1,000,000 and a maximum deductible of
U.S.$7,500,000 for Windstorms for the Facility, and (ii) for wet works, the
deductible shall not be greater than U.S.$1,000,000 for the Facility, (iii) for
claims arising from testing and commissioning, the deductible shall not be
greater than U.S.$1,000,000, (iv) for claims where defects exclusion LEG3/06
applies, the deductible shall not be greater than U.S.$1,000,000 and (v) for
claims arising from tank fill the deductible shall not be greater than
U.S.$1,000,000.

(g)          Payment of Insurance Proceeds:  The property damage proceeds under
the builder’s risk policy shall be paid as follows with respect to any one
occurrence:

1)           the first Ten Million U.S. Dollars (U.S.$10,000,000) of amounts
paid under the builder’s risk insurance policy for property damage to the
Facility shall be paid by the insurance carrier directly to Contractor, which
shall be used by Contractor in connection with the repair, replacement or other
necessary work in connection with the loss or damage to the Facility; and

2)           any amounts in excess of Ten Million U.S. Dollars (U.S.$10,000,000)
for property damage to the Facility shall (x) be paid by the insurance carrier
directly to the Collateral Agent (or if there is no Collateral Agent, a mutually
agreed upon escrow agent), and Owner shall pay such insurance proceeds to
Contractor for the completion (or, if agreed by the Lenders, Collateral Agent or
escrow agent, the planned completion) by Contractor of repairs, replacement and
other necessary work in accordance with the restoration plan (unless such plan
is not required by the Lenders or Collateral Agent) prepared by Contractor and
approved by Owner, and (y), provided that the conditions set forth in this
clause (x) have been satisfied,  be paid by Owner to Contractor in accordance
with the following schedule: (a) for any interim payment(s) or final settlement
payment of the  builder’s  risk  proceeds  received by the Collateral Agent (or
escrow agent) for the Facility, Owner shall have five (5) Business Days after
the Collateral Agent’s (or escrow agent’s) receipt of all proceeds to 

O-7

 

pay Contractor; (b) however, for any interim payment(s) or final settlement
payment received by the Collateral Agent (or escrow agent) for the Facility,
Owner shall not have more than sixty (60) Days to pay any portion of the
builder’s risk proceeds received to date. Notwithstanding the foregoing, under
no circumstances shall Owner be required to pay any builder’s risk insurance
proceeds to Contractor if Owner or Lender elects not to repair or rebuild the
damaged aspect of the Facility, except to the extent Contractor has incurred
costs in excess of the Ten Million U.S. Dollars (U.S.$10,000,000) of the
builder’s risk proceeds paid directly to Contractor for safety, protection and
salvage for the Facility.  For the avoidance of doubt, if there is a delay in
the approval of the restoration plan beyond the times specified in Section
1.A.x(g)2)(y) through no fault of Contractor, and Contractor satisfies the
conditions in this Section 1.A.x(g)2) for the payment of builder’s risk proceeds
received by the Collateral Agent (or escrow agent), then Contractor shall not be
required to effect repairs or other restoration of the Work affected by the
insured occurrence for any costs of repairs or restoration exceeding the sum of
the deductible under such insurance and any amounts previously paid to
Contractor under such insurance and Contractor shall be entitled to relief to
the extent permitted under Section 6.2A10. of the Agreement. “Collateral Agent”
means the collateral agent under the credit agreement with Owner for the
financing of the Project.

xi.          Builder’s Risk Delayed Startup Insurance.  Delayed startup coverage
insuring Owner and Lender, as their interests may appear, covering the Owner’s
debt servicing expenses, fixed costs, and / or gross profit as determined by
Owner  as a result of any loss or damage insured by Section 1.A.x above
resulting in a delay in Substantial Completion beyond the applicable Guaranteed
Substantial Completion Date in an amount to be determined by Owner, subject to
commercial availability at a reasonable cost.  This coverage shall be on an
actual loss-sustained basis.  Any proceeds from delay in startup insurance, with
the exception of payments for increased cost of working costs incurred by the
Contractor, shall be payable solely to the Lender or its designee and shall not
in any way reduce or relieve Contractor of any of its obligation or liabilities
under the Agreement.  The increased cost of working costs shall not erode the
delayed startup limit and is paid in addition to the delayed startup proceeds.
Any claims under the builder’s risk delayed startup insurance shall be handled
and adjusted by Owner, with cooperation by Contractor.

(a)          Such insurance shall (a) have a deductible of not greater than
sixty (60) Days aggregate for all occurrences, except ninety (90) Days in the
aggregate in the respect of Windstorms and water damage (including flood and
storm surge),  (b) include an interim payments clause allowing for the monthly
payment of a claim pending final determination of the full claim amount, (c)
cover loss sustained when access to the Site is prevented due to an insured
peril at premises in the vicinity of the Site for a period not less 

O-8

 

than sixty (60) Days, (d) cover loss sustained due to the action of a public
authority preventing access to the Site due to imminent or actual loss or
destruction arising from an insured peril at premises in the vicinity of the
Site for a period not less than sixty (60) Days, (e) insure loss caused by FLEXA
named perils to finished Equipment (including machinery) while awaiting shipment
at the premises of a Subcontractor or Sub-subcontractor, (f) not contain any
form of a coinsurance provision or include a waiver of such provision, (g) cover
loss sustained due to the accidental interruption or failure, caused by an
insured peril of supplies of electricity, gas, sewers, water or
telecommunication up to the terminal point of the utility supplier with the Site
for a period not less than sixty (60) Days, and (h) an extension clause allowing
the policy period to be extended up to six (6) months without modification to
the terms and conditions (other than the deductible) of the policy and a
pre-agreed premium, if commercially available.

(b)          Owner may communicate all financial information directly to
Contractor’s insurance broker.  Contractor shall not be entitled to receive any
such information.

(c)          The Contract Price includes a premium price of [***] U.S. Dollars
(U.S.$ [***]) for the provision of the Builder’s Risk Delayed Startup Insurance
and Marine Cargo Delayed Startup Insurance meeting the requirements contained
herein, including a [***] percent ([***]%) markup.   If the actual premium cost
of such insurance, together with a [***] percent ([***]%) markup on such actual
costs, as determined at NTP, is different than U.S.$ [***], then a Change Order
shall be executed by the Parties increasing or decreasing the Contract Price in
the amount of such difference (together with [***]% on such difference.)

xii.         Marine Cargo Insurance.  Cargo insurance insuring Contractor, Owner
and Lender, as their interests may appear, on a “warehouse to warehouse” basis
including land, air and marine transit insuring “all risks” of loss or damage on
a C.I.F. basis plus ten percent (10%) from the time the goods are in the process
of being loaded for transit until they are finally delivered to the Site
including shipment deviation, delay, forced discharge, re-shipment and
transshipment.  Such insurance shall (a) include coverage for war, strikes,
theft, pilferage, non-delivery, charges of general average sacrifice or
contribution, salvage expenses, temporary storage in due course of transit,
consolidation, repackaging, refused and returned shipments, debris removal, (b)
contain a replacement by air extension clause, a 50/50 clause, a difference in
conditions for C.I.F. shipments, an errors and omissions clause, an import duty
clause and a non-vitiation clause (but subject to a paramount warranty for
surveys of critical items), (c) include an insufficiency of packing clause, (d)
provide coverage for sue and labor in an amount not less than $1,000,000 and
(e) insure for the replacement value of the largest single shipment on a C.I.F.
basis plus ten percent (10%).

(a)          The physical damage proceeds under the marine cargo policy shall be
paid as follows with respect to any one occurrence:

O-9

 

1)           the first Ten Million U.S. Dollars (U.S.$10,000,000) of amounts
paid under the marine cargo insurance policy for physical damage to the interest
insured (i.,e., equipment, materials, machinery, spares, etc.)  shall be paid by
the insurance carrier directly to Contractor, which shall be used by Contractor
in connection with the repair, replacement or other necessary work in connection
with the Facility; and

2)           any amounts in excess of Ten Million U.S. Dollars (U.S.$10,000,000)
for physical damage to the interests insured (i.e., equipment, materials,
machinery, spares, etc.) shall be paid by the insurance carrier directly to the
Collateral Agent (or if there is no Collateral Agent, a mutually agreed upon
escrow agent), and Owner shall pay such insurance proceeds to Contractor, for
the completion (or, if agreed by the Lenders, Collateral Agent or escrow agent,
the planned completion) by Contractor of repairs, replacement and other
necessary work in accordance with the restoration plan (unless such plan is not
required by the Lenders or Collateral Agent) prepared by Contractor and approved
by Owner, and (y) provided that the conditions set forth in this clause (x) have
been satisfied, be paid by Owner to Contractor in accordance with the following
schedule: (a) for any interim payment(s) or final settlement payment of
the  marine cargo  proceeds  received by the Collateral Agent (or escrow agent)
for the Facility, Owner shall have five (5) Business Days after the Collateral
Agent’s (or escrow agent’s) receipt of all proceeds to pay Contractor;  (b)
however, for any interim payment(s) or final settlement payment received by the
Collateral Agent (or escrow agent) for the Facility, Owner shall not have more
than sixty (60) Days to pay any portion of the marine cargo proceeds received to
date.  Notwithstanding the foregoing, under no circumstances shall Owner be
required to pay any marine cargo insurance proceeds to Contractor if Owner or
Lender elects not to repair or rebuild the damaged insured interests (i.e.,
equipment, materials, machinery, spares, etc.), except to the extent Contractor
has incurred costs in excess of the Ten Million U.S. Dollars (U.S.$10,000,000)
of the marine cargo proceeds paid directly to Contractor for safety, protection
and salvage for the insured interests (i.e. equipment, materials, machinery,
spares, etc.).  For the avoidance of doubt, if there is a delay in the approval
of the restoration plan beyond the times specified in Section 1.A.xii(a)2)(y)
through no fault of Contractor, and Contractor satisfies the conditions in this
Section 1.A.xii(a)2) for the payment of marine cargo proceeds received by the
Collateral Agent (or escrow agent), then Contractor shall not be required to
effect repairs or other restoration of the Work affected by the insured
occurrence for any costs of repairs or 

O-10

 

restoration exceeding the sum of the deductible under such insurance and any
amounts previously paid to Contractor under such insurance and shall be entitled
to relief to the extent permitted under Section 6.2A10. of the Agreement.

xiii.        Marine Cargo Delayed Startup Insurance.  Delayed startup insurance
insuring Owner and Lender, as their interests may appear, for the Owner’s debt
servicing expenses, fixed costs, and / or gross profit as determined by Owner
due to a delay in achievement of Substantial Completion beyond the applicable
Guaranteed Substantial Completion Date arising out of an event insured by the
marine cargo insurance.  Such insurance shall (a) cover the actual loss
sustained due to blockage/closure of specified waterways, (b) include an interim
payments clause allowing for the monthly payment of a claim where liability is
admitted, pending final determination of the full claim amount and (c) cover
delay caused by loss, breakdown or damage to the hull, machinery or equipment of
the vessel or aircraft on which the insured property is being transported,
resulting in a delay in achievement of Substantial Completion beyond the
applicable Guaranteed Substantial Completion Date in an amount to be determined
by Owner and Lender but subject to commercial availability at a reasonable
cost.  Prior to the shipment of any Equipment under this Agreement but in any
event no later than NTP, Contractor shall insure Project for an amount to be
determined by Owner and Lender’s insurance advisor and subject to commercial
availability at a reasonable cost.  Such insurance shall have a deductible of
not greater than sixty (60) Days aggregate for all occurrences during the policy
period.  Any proceeds from delay in startup insurance shall be payable solely to
Lender or its designee and shall not in any way reduce or relieve Contractor of
any of its obligation or liabilities under the Agreement.  Any claims under the
marine cargo delayed startup insurance shall be handled and adjusted by Owner,
with the cooperation by Contractor. Owner may communicate all financial
information directly to Contractor’s insurance broker.  Contractor shall not be
entitled to receive any such information.

B.          Insurance Companies.  All insurance required to be obtained by
Contractor pursuant to this Agreement shall be from an insurer or insurers
permitted to conduct business as required by Applicable Law and shall be rated
either by Best’s Insurance Guide Ratings (or equivalent) as an “A-” or better
with a financial category of “VIII” or better, or by Standard and Poor’s (or
equivalent) as a “A-”.

C.          Subcontractor and Sub-Subcontractor’s Insurance Requirements.  If
Contractor subcontracts any part of the Work, Contractor shall obtain or require
its Subcontractors and Sub-subcontractors to maintain similar insurance coverage
and amounts that Contractor is required to maintain pursuant to the Agreement,
as applicable and appropriate to the work of such Subcontractor and
Sub-subcontractor sufficient to cover risks inherent in the work of such
Subcontractor or Sub-subcontractor.  Upon Owner’s written request, Contractor
shall promptly furnish to Owner certificates of insurance evidencing coverage
for each Subcontractor and Sub-subcontractor.  Any deficiency in the coverage,
policy limits, or endorsements of said Subcontractor or Sub-subcontractor
insurance will be the sole responsibility of Contractor.

D.          Additional Insured.  All Project-specific insurance policies
provided by Contractor pursuant to the Agreement shall: (i) name Owner
Indemnified Parties as Additional Named

O-11

 

Insureds; and (ii) name Port Indemnified Parties as Additional Insureds to the
extent of Contractor’s indemnity obligations set forth in the
Agreement.  Project-specific insurance means the insurances dedicated to the
Project, which are commercial general liability, umbrella or excess liability,
Contractor’s pollution liability insurance, builder’s risk insurance and marine
cargo insurance (each a “Contractor Controlled Insurance Policy”).  Owner
Indemnified Parties shall be a Named Insured under the builder’s risk delayed
startup insurance and the marine cargo delayed startup insurance.  Except for
Contractor Controlled Insurance Policies and the builder’s risk delayed startup
insurance and marine cargo delayed startup insurance, all insurance policies
provided by Contractor or any of its Subcontractors or Sub-subcontractors
pursuant to the Agreement (except for Workers’ Compensation, Employer’s
Liability and Contractor’s Equipment Floater) shall include Owner Indemnified
Parties and Port Indemnified Parties as Additional Insureds (utilizing to the
extent commercially available CG2010 1001 and CG2037 1001) to the extent of
Contractor’s indemnity obligations in the Agreement or the respective
Subcontractor’s or Sub-subcontractor’s indemnity obligations set forth in their
respective Subcontracts.

E.          Waiver of Subrogation.  Unless prohibited by Applicable Law, all
policies of insurance provided by Contractor or any of its Subcontractors or
Sub-subcontractors pursuant to this Agreement shall include clauses providing
that each underwriter shall waive its rights of recovery, under subrogation or
otherwise, against Owner Indemnified Parties and Port Indemnified Parties.

F.          Contractor’s Insurance is Primary.  Except for the insurance
provided by Owner under this Attachment O, the insurance policies of Contractor
and its Subcontractors or Sub-subcontractors shall state that such coverage is
primary and non-contributing to any other insurance available to or provided by
Owner Indemnified Parties and Port Indemnified Parties.

G.          In Rem.  The insurance policies of Contractor and any of its
Subcontractors or Sub-subcontractors shall, where applicable, contain a clause
providing that a claim “in rem” shall be treated as a claim against the
respective Contractor, Subcontractor, Sub-subcontractor or Owner Indemnified
Parties, as applicable.

H.          Severability.  The insurance policies of Contractor and of its
Subcontractors and Sub-subcontractors shall, where applicable, contain a
severability of interest clause or a standard cross liability endorsement.

I.          Non-Vitiation.  The insurance policies of Contractor and of its
Subcontractors and Sub-subcontractors shall provide a “Multiple Insured Clause”
or “Separation of Insureds Clause” which includes language substantially similar
to the following:

i.            It is noted and agreed that coverage under the aforementioned
policies shall apply in the same manner and to the same extent as if individual
policies had been issued to each insured party, provided that the total
liability of the insurers to all the insured parties collectively shall not
exceed the sums insured and limits of indemnity stated in such policy.

ii.            It is further understood and agreed that, under such policy’s
terms and conditions, the insurers may be entitled to avoid liability to the
insured parties in circumstances of fraud, misrepresentation, non-disclosure or
breach of any warranty or

O-12

 

condition of said policy or committed by an insured party, which shall herein be
referred to in this section as a “Vitiating Act”.

iii.            It is however agreed that a Vitiating Act committed by one
insured party shall not prejudice the right to indemnity of any other insured
party who has an insurable interest and who has not committed a Vitiating Act by
including language such as that the policy shall treat each Named Insured as if
they were the only Named Insured and as to any claim separately to each insured
as if they were the only insured.

J.          Copy of Policy.  At Owner’s written request, Contractor shall
promptly provide Owner valid copies of each of the Contractor Controlled
Insurance Policies, the builder’s risk delayed startup insurance policy and the
marine cargo delayed startup insurance policy procured by Contractor pursuant to
this Attachment O, or if such policies have not yet been received by Contractor,
then with binders of insurance, duly executed by the insurance agent, broker or
underwriter fully describing the insurance coverages affected.

K.          Subject to Change.  All insurance requirements for this Agreement
are subject to change at the reasonable discretion of Owner, provided the
insurances required to be procured by Contractor to comply with such changes are
available in the market. Such changed insurance requirements shall be documented
pursuant to a Change Order pursuant to this Agreement to reimbursement of the
costs associated with such changes, without any markup. Such change shall
include any requirements of Lenders, if applicable.

L.          Limitation of Liability.  Types and limits of insurance shall not in
any way limit any of Contractor’s obligations, responsibilities or liabilities
under this Agreement.

M.          Jurisdiction.  All insurance policies shall include coverage for
jurisdiction within the United States of America and shall comply with
Applicable Laws.  To the extent Work is performed outside of the United States
of America, Contractor shall, or cause it Subcontractors to maintain coverage
for the applicable jurisdiction and comply with Applicable Laws.

N.          Miscellaneous.  Contractor and its Subcontractors and
Sub-subcontractors shall do nothing to void or make voidable any of the
insurance policies purchased and maintained by Contractor or its Subcontractors
or Sub-subcontractors hereunder.  Contractor shall promptly give Owner notice in
writing of the occurrence of any casualty or significant injury that may give
rise to a claim and arising out of or relating to the performance of the Work;
provided, however, in no event shall such notice be more than three (3) Days
after the occurrence of such casualty on injury.  In addition, Contractor shall
ensure that Owner is kept fully informed of any subsequent action and
developments concerning the same, and assist in the investigation of any such
casualty, claim, event, circumstance or occurrence.  The insurance policies
required under this Section 1 shall include a statement that the insurance
coverage shall not be canceled, restricted or reduced without at least thirty
(30) Days prior written notice by Contractor to Owner.

O.          Instructions for Certificate of Insurance.  Contractor’s certificate
of insurance form, completed by Contractor’s insurance agent, broker or
underwriter, shall reflect the recognition of additional  named insured status,
additional insured status, waivers of subrogation, and primary insurance
requirements contained in this Attachment O.

O-13

 

P.          Certificate of Insurance Requirements.  Contractor shall furnish to
Owner, (a) no later than thirty (30) Days prior to the commencement of Work at
the Site and (b) any other time upon Owner’s request, certificates of insurance,
on the most recent edition of the ACORD form, or equivalent, reflecting all of
the insurance required of Contractor under this Agreement; provided that
Contractor shall not be required to deliver certificates of insurance for any
insurance provided by any Subcontractors or Sub-subcontractors unless requested
in writing by Owner.  Neither Owner’s review nor failure to review such
certificates shall constitute acquiescence thereto or be deemed to waive or
diminish Owner’s rights under the Agreement.  All certificates of insurance and
associated notices and correspondence concerning such insurance shall be
addressed to the contact information listed in the Agreement for notices, plus
the following: [_________________], Attn: [__________].

Q.          Policy Form and Approval.  Except as specifically set forth in this
Section 1 of this Attachment O, all policies of insurance required to be
maintained by Contractor and its Subcontractors and Sub-subcontractors shall be
written on reasonable and customary terms, conditions and exclusions for
facilities of similar size and scope as the Facility.  The commercial general
liability insurance, Contractor’s pollution liability insurance, umbrella or
excess liability insurance, builder’s risk insurance, marine cargo insurance,
builder’s risk delayed start up insurance, marine cargo delayed startup
insurance and any other Contractor Controlled Insurance Policy required to be
provided by Contractor shall be subject to Owner’s written approval, not to be
unreasonably withheld.

R.          Deductibles.   Contractor shall bear the costs of all deductibles
under insurances provided by Contractor under this Agreement, and Contractor or
its Subcontractors or Sub-subcontractors shall bear the cost of all deductibles
under insurances provided by Contractor’s Subcontractors or Sub-subcontractors
under this Agreement.

S.          Owner’s Right to Remedy.  In addition to the rights under Sections
9.1D and 9.1E of the Agreement, if Contractor fails to provide or maintain
insurance as required herein, including any insurance required to cover its
Subcontractors or Sub-subcontractors, Owner shall have the right but not the
obligation to purchase such insurance.  In such event, the Contract Price shall
be reduced by the amount paid for such insurance.

2.          Owner’s Insurance.

A.          Types and Limits of Insurance.  Owner shall, at its own cost and
expense, procure and maintain (or require to be procured and maintained) in full
force and effect at all times for the applicable Train of the Facility (to the
extent described below), the following insurance:

i.           Property Insurance.  After Substantial Completion of each Train and
until the expiration of the Defect Correction Period for such Train, Owner shall
obtain property insurance and such insurance shall contain a waiver of
subrogation in favor of Contractor and its Subcontractors and Sub-subcontractors
(except for Vitiating Acts) during the Defect Correction Period for such Train.

ii.          Stevedores/Wharfingers Liability.  On or prior to thirty (30) Days
prior to RLFC of Train 1, Owner shall procure and maintain
stevedores/wharfingers liability 

O-14

 

consistent with prudent practices associated with the operation of the Facility
and its dock facilities with minimum limits of [US$300,000,000] per occurrence
and in the aggregate (which such limits may be met using a
stevedores/wharfingers excess liability policy).  Such policy shall cover
liability.

(a)         As a wharfinger, for physical loss of or damage to LNG Tanker, the
property of others while the LNG Tankers are in the custody of Owner at the
landing and mooring facilities of the Facility;

(b)         As a stevedore, for physical loss of or damage to LNG Tankers, the
property of others arising from loading or unloading operations performed by or
for Owner or Owner Indemnified Parties at the Facility; and

(c)         For physical loss of or damage to property of others arising out of
loading, unloading, docking and undocking, including LNG Tankers approaching, at
and departing from the landing and mooring facilities of the Facility or for
loss of life or personal injury, if arising only out of those operations covered
by these Sections 2.A.ii(a), 2.A.ii(b) and 2.A.ii(c).

Owner shall procure for Contractor, its Subcontractors and its
Sub-subcontractors an additional insured endorsement under this policy.   A
waiver of subrogation will be provided in the policy in favor of Contractor,
Subcontractors and its Sub-subcontractors.  The additional insured endorsement
shall be in effect, at a minimum, prior to RLFC of Train 1 through Substantial
Completion of Train 2.

B.          Limitation of Insurance.  The insurance provided by Owner shall not
in any way limit or reduce Contractor’s liability to Owner under the Agreement.

C.          Claims.  Contractor shall promptly give Owner notice in writing of
the occurrence of any casualty or injury that may give rise to a significant
claim under an insurance policy required to be provided hereunder; provided,
however, in no event shall such notice be more than three (3) Days after
Contractor has received notice of a claim or intent to file a claim.  In
addition, Contractor shall ensure that Owner is kept fully informed of any
subsequent action and developments concerning the same, assist in the
investigation of any such casualty or injury, and assist in the preparation and
negotiation of any such claims.

D.          Disclosure to Insurers.  Contractor shall ensure that full
disclosure is made to the insurers providing insurance to Owner under this
Agreement, including: (i) all information which such insurers specifically
request to be disclosed; (ii) all information which is of a type which insurance
brokers in relation to the relevant policy notify Contractor should be disclosed
to such insurers; (iii) reports required by such insurers; and (iv) details of
any significant problems encountered in the Work which may be relevant to or
impact the insurance covering the Work.  Contractor shall put in place
appropriate internal reporting procedures to ensure that full disclosure
required by this Section 2.D is made by Contractor’s staff.

E.          Miscellaneous.  Contractor and its Subcontractors and
Sub-subcontractors shall do nothing to void or make voidable any of the
insurance policies purchased and maintained by Owner hereunder.  All insurance
required to be obtained by Owner pursuant to the Agreement shall be

O-15

 

from an insurer or insurers permitted to conduct business as required by
Applicable Law and shall either (1) be acceptable to Lender’s collateral agent
or (2) be rated with either (a) an “A-” or better and a financial category of
“VIII” or better by Best’s Insurance Guide Ratings (or equivalent) or (b) a “A-”
or better by Standard and Poor’s (or equivalent).

 Any time after issuance of NTP, at Contractor’s written request, Owner shall
deliver to Contractor certificates of insurance reflecting all of the insurance
required of Owner under this Agreement.  Types and limits of insurance provided
by Owner shall not in any way limit any of Owner’s or Contractor’s obligations,
responsibilities or liabilities under the Agreement.

 

 

 

O-16

 

ATTACHMENT P

 

CONTRACTOR PERMITS

 

[***]

 

 

 

P-1

 

ATTACHMENT Q

 

OWNER PERMITS

 

Owner shall obtain, or cause to be obtained, the Permits listed below.

 

[***]

 

 

 

Q-1

 

ATTACHMENT R

FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT

[To be issued on letterhead of Issuing Bank]

IRREVOCABLE STANDBY LETTER OF CREDIT NO. ________

DATE:                   , 20          

AMOUNT OF: U.S.$  [                                      ]

 

ISSUING BANK:

 

[INSERT ISSUING BANK’S NAME AND ADDRESS]

 

 

BENEFICIARY:

APPLICANT AND ACCOUNT PARTY:

 

 RIO GRANDE LNG, LLC

BECHTEL OIL, GAS AND CHEMICALS, INC.

 1000 LOUISIANA STREET

3000 POST OAK BOULEVARD

 39TH FLOOR

HOUSTON, TEXAS 77056

 HOUSTON, TEXAS 77002

FACSIMILE: [                             ]

 FACSIMILE: [                            ]

ATTN: [                                 ]

 ATTN: [                          ]

 

 

WE HEREBY ISSUE OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO.                    
(THIS “LETTER OF CREDIT”) IN FAVOR OF RIO GRANDE LNG, LLC, AS BENEFICIARY, FOR
AN INITIAL AMOUNT OF [                               DOLLARS
(U.S.$                         )  (e.g. INSERT AMOUNT EQUAL TO TEN PERCENT (10%)
OF THE CONTRACT PRICE UNDER THE AGREEMENT (AS DEFINED BELOW))] (THE “STATED
AMOUNT”) AT THE REQUEST AND FOR THE ACCOUNT OF BECHTEL OIL, GAS AND CHEMICALS,
INC., AS APPLICANT.

WE ARE INFORMED THAT THIS LETTER OF CREDIT IS ISSUED ON BEHALF OF THE APPLICANT
TO SUPPORT APPLICANT’S OBLIGATIONS UNDER THAT CERTAIN FIXED PRICE TURNKEY
AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THE RIO GRANDE
NATURAL GAS LIQUEFACTION FACILITY (“PROJECT”), DATED AS OF MAY 24TH, 2019, BY
AND BETWEEN APPLICANT AND BENEFICIARY (AS AMENDED, RESTATED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME, THE “AGREEMENT”). “CONTRACTOR” AS USED
HEREIN MEANS BECHTEL OIL, GAS AND CHEMICALS, INC. AND ITS PERMITTED SUCCESSORS
AND ASSIGNS UNDER THE AGREEMENT. “BENEFICIARY” AS USED HEREIN MEANS RIO GRANDE
LNG, LLC AND ITS PERMITTED SUCCESSORS AND ASSIGNS UNDER THE AGREEMENT.

FUNDS UNDER THIS LETTER OF CREDIT ARE AVAILABLE BY PAYMENT IN U.S. DOLLARS IN
IMMEDIATELY AVAILABLE FUNDS AGAINST THE PRESENTATION OF YOUR WRITTEN DEMAND TO
[INSERT ISSUING BANK’S NAME] (THE “ISSUING BANK”) AT [INSERT ISSUING BANK’S
ADDRESS AND FACSIMILE NUMBER], IN PERSON, IN THE FORM OF ANNEX I ATTACHED HERETO
APPROPRIATELY COMPLETED AND ACCOMPANIED BY A DRAWING CERTIFICATE DULY SIGNED BY
BENEFICIARY IN THE FORM OF ANNEX II OR ANNEX VII ATTACHED HERETO APPROPRIATELY
COMPLETED.

MULTIPLE AND PARTIAL DRAWINGS ARE PERMITTED.  THE STATED AMOUNT SHALL BE
AUTOMATICALLY AND PERMANENTLY REDUCED BY THE AMOUNT OF ANY DRAWING RECEIVED BY
BENEFICIARY PURSUANT TO THIS LETTER OF CREDIT.  ALL BANKING CHARGES UNDER THIS
LETTER OF CREDIT ARE FOR ACCOUNT OF THE APPLICANT.

THIS LETTER OF CREDIT IS TRANSFERABLE IN ITS ENTIRETY AND NOT IN PART TO A
PERMITTED

R-1

 

ASSIGNEE AS SPECIFIED IN THE AGREEMENT.  BENEFICIARY’S DRAWING RIGHTS UNDER THIS
LETTER OF CREDIT SHALL BE TRANSFERRED IN THEIR ENTIRETY BY PRESENTATION TO
ISSUING BANK (AT THE ABOVE-STATED PLACE FOR PRESENTATION) OF A DEMAND FOR
TRANSFER, SUBSTANTIALLY IN THE FORM OF ANNEX III ATTACHED HERETO APPROPRIATELY
COMPLETED.  UPON PRESENTATION OF A COMPLYING DEMAND FOR TRANSFER, THE PERSON
IDENTIFIED AS THE TRANSFEREE SHALL BECOME THE BENEFICIARY, WHOSE NAME AND
ADDRESS SHALL BE SUBSTITUTED FOR THAT OF THE TRANSFEROR ON ANY DEMANDS,
REQUESTS, OR CONSENTS THEN OR THEREAFTER REQUIRED OR PERMITTED TO BE MADE BY
BENEFICIARY.  SUBJECT TO COMPLIANCE WITH THE NEXT SENTENCE, WE SHALL ACKNOWLEDGE
AND SHALL EFFECT THE DEMANDED TRANSFER AND SHALL ISSUE OUR ADVICE OF TRANSFER TO
THE TRANSFEROR AND TRANSFEREE. NOTWITHSTANDING THE FOREGOING, THIS LETTER OF
CREDIT MAY NOT BE TRANSFERRED TO ANY PERSON IF SUCH TRANSFER TO, OR DRAWING
UNDER THIS LETTER OF CREDIT BY, SUCH PERSON WOULD BE PROHIBITED OR BLOCKED UNDER
ANY U.S. EXECUTIVE ORDER, LAW OR ANY RULE OR REGULATION OF THE OFFICE OF FOREIGN
ASSETS CONTROL OF THE U.S. TREASURY DEPARTMENT OR THE U.S. COMMERCE DEPARTMENT,
AND ANY ATTEMPTED TRANSFER WHICH VIOLATES THIS PROVISION SHALL BE NULL AND VOID.

THE STATED AMOUNT OF THIS LETTER OF CREDIT SHALL DECREASE TO AN AGGREGATE AMOUNT
OF [                                                   DOLLARS
(U.S.$                                      ) (e.g. INSERT AMOUNT EQUAL TO SEVEN
PERCENT (7%) OF THE CONTRACT PRICE)] UPON THE ISSUING BANK’S RECEIPT FROM
BENEFICIARY OF WRITTEN NOTICE, WHICH SHALL BE IN THE FORM OF ANNEX IV ATTACHED
HERETO APPROPRIATELY COMPLETED, THAT (A) SUBSTANTIAL COMPLETION OF TRAIN 1 HAS
OCCURRED (INCLUDING APPLICANT’S PAYMENT OF ALL DELAY LIQUIDATED DAMAGES DUE AND
OWING UNDER THE AGREEMENT FOR TRAIN 1), AND (B) APPLICANT HAS ACHIEVED THE
PERFORMANCE GUARANTEES FOR TRAIN 1 OR PAID ALL PERFORMANCE LIQUIDATED DAMAGES
DUE AND OWING UNDER THE AGREEMENT FOR TRAIN 1 (INCLUDING ANY POTENTIAL
PERFORMANCE LIQUIDATED DAMAGES EXPOSURE BASED UPON THE RESULTS OF THE
PERFORMANCE TESTS CONDUCTED PRIOR TO SUBSTANTIAL COMPLETION).

PROVIDED THAT THE CONDITIONS FOR DECREASING THE LETTER OF CREDIT TO AN AGGREGATE
AMOUNT OF [                                            DOLLARS
(U.S.$                              ) (E.G. INSERT AMOUNT EQUAL TO SEVEN PERCENT
(7%) OF THE CONTRACT PRICE) HAVE OCCURRED, THE STATED AMOUNT OF THIS LETTER OF
CREDIT SHALL DECREASE TO AN AGGREGATE AMOUNT OF
[                                                   DOLLARS
(U.S.$                                      ) (E.G. INSERT AMOUNT EQUAL TO FIVE
PERCENT (5%) OF THE CONTRACT PRICE) UPON THE ISSUING BANK’S RECEIPT FROM
BENEFICIARY OF WRITTEN NOTICE, WHICH SHALL BE IN THE FORM OF ANNEX IV ATTACHED
HERETO APPROPRIATELY COMPLETED, THAT (I) SUBSTANTIAL COMPLETION OF TRAIN 2 HAS
OCCURRED (INCLUDING APPLICANT’S PAYMENT OF ALL DELAY LIQUIDATED DAMAGES DUE AND
OWING UNDER THE AGREEMENT FOR TRAIN 2), AND (II) CONTRACTOR HAS ACHIEVED THE
PERFORMANCE GUARANTEES FOR TRAIN 2 OR PAID ALL PERFORMANCE LIQUIDATED DAMAGES
DUE AND OWING UNDER THE AGREEMENT FOR TRAIN 2 (INCLUDING ANY POTENTIAL
PERFORMANCE LIQUIDATED DAMAGE EXPOSURE BASED UPON THE RESULTS OF THE PERFORMANCE
TESTS CONDUCTED PRIOR TO SUBSTANTIAL COMPLETION). [BENEFICIARY SHALL PROVIDE A
COPY OF SUCH NOTICE TO APPLICANT CONCURRENTLY WITH ITS PROVISION TO THE ISSUING
BANK OF SUCH NOTICE.

PROVIDED THAT THE CONDITIONS FOR DECREASING THE LETTER OF CREDIT TO AN AGGREGATE
AMOUNT OF [                     ] DOLLARS (U.S.$                     ) (E.G.
INSERT AMOUNT EQUAL TO FIVE PERCENT (5%) OF THE CONTRACT PRICE) HAVE OCCURRED,
THE STATED AMOUNT OF THIS LETTER OF CREDIT SHALL DECREASE TO AN AGGREGATE AMOUNT
OF [                                DOLLARS
(U.S.$                                        ) (e.g. INSERT AMOUNT EQUAL TO TWO
PERCENT (2%) OF THE CONTRACT PRICE)] UPON THE ISSUING BANK’S RECEIPT FROM
BENEFICIARY OF WRITTEN NOTICE, WHICH SHALL BE IN THE FORM OF ANNEX V ATTACHED
HERETO APPROPRIATELY COMPLETED,  THAT  THE PERIOD SPECIFIED IN CLAUSE (I) OF THE
DEFINITION OF DEFECT CORRECTION PERIOD IN THE AGREEMENT HAS EXPIRED (I.E., THE
[***] (***) MONTH PERIOD FOLLOWING SUBSTANTIAL COMPLETION OF TRAIN 1); PROVIDED
THAT IF THE EXPIRATION OF SUCH DEFECT

R-2

 

CORRECTION PERIOD OCCURS BEFORE SUBSTANTIAL COMPLETION OF TRAIN 2, SUCH DECREASE
SHALL NOT OCCUR UNTIL AFTER THE CONDITIONS FOR DECREASING THE LETTER OF CREDIT
FOR SUBSTANTIAL COMPLETION OF TRAIN 2 OCCURS.  BENEFICIARY SHALL PROVIDE A COPY
OF SUCH NOTICE TO CONTRACTOR CONCURRENTLY WITH ITS PROVISION TO THE ISSUING BANK
OF SUCH NOTICE.

PROVIDED THAT THE CONDITIONS FOR DECREASING THE LETTER OF CREDIT TO AN AGGREGATE
AMOUNT OF [                       ] DOLLARS (U.S.$                     ) (E.G.
INSERT AMOUNT EQUAL TO TWO PERCENT (2%) OF THE CONTRACT PRICE) HAVE OCCURRED,
THE STATED AMOUNT OF THIS LETTER OF CREDIT SHALL DECREASE TO THE AGGREGATE
AMOUNT STATED IN BENEFICIARY’S WRITTEN NOTICE TO THE ISSUING BANK (WHICH SHALL
BE IN THE FORM OF ANNEX VI ATTACHED HERETO APPROPRIATELY COMPLETED), WHICH SUCH
DECREASE SHALL OCCUR UPON THE ISSUING BANK’S RECEIPT OF SUCH WRITTEN NOTICE.
BENEFICIARY SHALL PROVIDE A COPY OF SUCH NOTICE TO CONTRACTOR CONCURRENTLY WITH
ITS PROVISION TO THE ISSUING BANK OF SUCH NOTICE.

ALL DEMANDS FOR PAYMENT MUST BE PRESENTED TO THE ISSUING BANK LOCATED AT [INSERT
ISSUING BANK’S NAME AND ADDRESS], NOT LATER THAN 5:00 P.M., CENTRAL STANDARD
TIME (“C.S.T.”).

THIS LETTER OF CREDIT SHALL EXPIRE ON [                    ], 20[      ] BUT
SUCH EXPIRATION DATE SHALL BE AUTOMATICALLY EXTENDED FOR A PERIOD OF ONE (1)
YEAR ON [                 ], 20[    ], AND ON EACH SUCCESSIVE EXPIRATION DATE
THEREAFTER, UNLESS (A) AT LEAST [***] (***) CALENDAR DAYS BEFORE THE THEN
CURRENT EXPIRATION DATE WE NOTIFY BOTH BENEFICIARY AND APPLICANT, BY CERTIFIED
MAIL OR COURIER (WITH RECEIPT ACKNOWLEDGED BY BENEFICIARY), AT THEIR RESPECTIVE
ADDRESSES SET FORTH ABOVE, THAT WE HAVE DECIDED NOT TO EXTEND THIS LETTER OF
CREDIT BEYOND THE THEN CURRENT EXPIRATION DATE, OR (B) BEFORE THE THEN CURRENT
EXPIRATION DATE, BENEFICIARY PROVIDES WRITTEN NOTICE TO US IN SUBSTANTIALLY THE
FORM OF ANNEX VI THAT THE  PERIOD SPECIFIED IN CLAUSE (II) OF THE DEFINITION OF
DEFECT CORRECTION PERIOD IN THE AGREEMENT HAS EXPIRED (I.E., [***] (***) MONTH
PERIOD FOLLOWING SUBSTANTIAL COMPLETION OF TRAIN 2), AND THAT THERE ARE NO
CLAIMS THAT BENEFICIARY HAS AGAINST CONTRACTOR ARISING OUT OF THIS AGREEMENT
THAT REMAIN UNRESOLVED, AND THAT  BENEFICIARY HEREBY REQUESTS TERMINATION OF
THIS LETTER OF CREDIT.

UPON RECEIPT OF YOUR DRAFT AND DRAWING CERTIFICATE IN FULL COMPLIANCE WITH THE
TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, WE WILL HONOR YOUR DEMAND FOR
PAYMENT WITHIN THREE (3) BUSINESS DAYS FOLLOWING SUCH RECEIPT.  “BUSINESS DAY”
MEANS ANY DAY OTHER THAN A SATURDAY, A SUNDAY OR ANY OTHER DAY COMMERCIAL BANKS
IN THE UNITED STATES OF AMERICA ARE AUTHORIZED OR REQUIRED TO BE CLOSED, AND A
DAY ON WHICH PAYMENTS CAN BE EFFECTED ON THE FEDWIRE SYSTEM.

IF A DEMAND FOR PAYMENT MADE BY BENEFICIARY HEREUNDER DOES NOT, IN ANY INSTANCE,
CONFORM TO THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, THE ISSUING BANK
SHALL GIVE BENEFICIARY AND APPLICANT PROMPT NOTICE THAT THE DEMAND FOR PAYMENT
WAS NOT EFFECTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF
CREDIT, STATING THE REASONS THEREFORE AND THAT THE ISSUING BANK WILL HOLD ANY
DOCUMENTS AT BENEFICIARY’S DISPOSAL OR UPON BENEFICIARY’S INSTRUCTIONS RETURN
THE SAME TO BENEFICIARY.  UPON BEING NOTIFIED THAT THE DEMAND FOR PAYMENT WAS
NOT MADE IN CONFORMITY WITH THIS LETTER OF CREDIT, BENEFICIARY MAY ATTEMPT TO
CORRECT ANY SUCH NON-CONFORMING DEMAND FOR PAYMENT PRIOR TO THE EXPIRATION OF
THIS LETTER OF CREDIT.

EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO
THE INTERNATIONAL STANDBY PRACTICES (1998), INTERNATIONAL CHAMBER OF COMMERCE
PUBLICATION NO. 590 (“ISP98”), WHICH SHALL IN ALL RESPECTS BE DEEMED A PART
HEREOF AS FULLY AS IF INCORPORATED IN FULL HEREIN, EXCEPT AS MODIFIED
HEREBY.  THIS LETTER OF

R-3

 

CREDIT IS ALSO SUBJECT TO THE LAWS OF THE STATE OF NEW YORK AND SHALL, AS TO
MATTERS NOT GOVERNED BY ISP98, BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT WOULD
REQUIRE THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.  THE UNCITRAL
CONVENTION ON INDEPENDENT GUARANTEES AND STANDBY LETTERS OF CREDIT DOES NOT
APPLY TO THIS LETTER OF CREDIT.

THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED OR AMPLIFIED BY REFERENCE TO ANY
DOCUMENT, INSTRUMENT, OR AGREEMENT REFERRED TO HEREIN OTHER THAN ISP98 OR OTHER
THAN BY AGREEMENT IN WRITING BETWEEN BENEFICIARY AND APPLICANT AND CONSENTED TO
BY US.

 

[NAME OF ISSUING U.S. BANK]

 

 

 

 

BY:

 

 

NAME:

 

 

TITLE:

 

 

R-4

 

ANNEX I

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

 

DRAFT

 

______________________, 20___

 

PAY AT SIGHT TO ORDER OF THE UNDERSIGNED
                                                  AND        /100 U.S. DOLLARS
(U.S.$                         ).  THIS DRAFT IS PRESENTED UNDER IRREVOCABLE
STANDBY LETTER OF CREDIT NO.                      DATED
                             , ISSUED FOR THE ACCOUNT OF
[                                                     ].

 

THE UNDERSIGNED, BENEFICIARY, CERTIFIES THAT IN ACCORDANCE WITH THAT CERTAIN
FIXED PRICE TURNKEY AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND CONSTRUCTION
OF THE RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY, DATED AS OF MAY 24TH, 2019,
BY AND BETWEEN BECHTEL OIL, GAS AND CHEMICALS, INC. (“APPLICANT”) AND
BENEFICIARY (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME
TO TIME, THE “AGREEMENT”), IT IS ENTITLED TO PAYMENT OF THE AMOUNTS SET FORTH
ABOVE.

 

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

R-5

 

ANNEX II

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER                         

 

DRAWING CERTIFICATE

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.                         

GENTLEMEN:

REFERENCE IS MADE TO THAT CERTAIN IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                         (THE “LETTER OF CREDIT”) ISSUED BY YOU IN FAVOR OF RIO
GRANDE LNG, LLC (“BENEFICIARY”) AT THE REQUEST AND FOR THE ACCOUNT OF BECHTEL
OIL, GAS AND CHEMICALS, INC. (“APPLICANT”).  UNLESS OTHERWISE DEFINED HEREIN,
TERMS DEFINED IN THE LETTER OF CREDIT SHALL HAVE THE SAME MEANING WHEN USED
HEREIN.

IN ACCORDANCE WITH THAT CERTAIN FIXED PRICE TURNKEY AGREEMENT FOR THE
ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THE RIO GRANDE NATURAL GAS
LIQUEFACTION FACILITY, DATED AS OF MAY 24TH, 2019, BY AND BETWEEN BENEFICIARY AS
OWNER AND APPLICANT AS CONTRACTOR (AS AMENDED, RESTATED, SUPPLEMENTED OR
OTHERWISE MODIFIED FROM TIME TO TIME, THE “AGREEMENT”), THE UNDERSIGNED DOES
HEREBY CERTIFY THAT:

a.        PURSUANT TO THE AGREEMENT BENEFICIARY IS ENTITLED TO DRAW UNDER THE
LETTER OF CREDIT; OR

b.        THE ISSUING BANK FOR THE LETTER OF CREDIT NO LONGER HAS THE INVESTMENT
GRADE RATING AND [***] (***) CALENDAR DAYS OR MORE HAVE ELAPSED SINCE THE DATE
IN WHICH YOUR RATING FELL BELOW INVESTMENT GRADE (AS DEFINED IN THE AGREEMENT)
AND A REPLACEMENT LETTER OF CREDIT COMPLYING WITH SECTION 9.2 OF THE AGREEMENT
HAS NOT BEEN RECEIVED BY BENEFICIARY.

YOU ARE REQUESTED TO REMIT PAYMENT OF THIS DRAWING IN IMMEDIATELY AVAILABLE
FUNDS BY WIRE TRANSFER TO THE FOLLOWING ACCOUNT:

[ACCOUNT INFORMATION]

IN WITNESS WHEREOF, THE UNDERSIGNED HAS EXECUTED AND DELIVERED THIS CERTIFICATE
AS OF THIS                 DAY OF                                , 20        .

 

 

RIO GRANDE LNG, LLC

 

 

 

 

BY:

 

 

NAME:

 

 

TITLE:

 

 

R-6

 

ANNEX III

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

 

FORM OF TRANSFER NOTICE

 

DATE:                                           

 

TO:        [ISSUING BANK]

[ISSUING BANK ADDRESS]

 

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                                  

 

GENTLEMEN:

 

FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

 

 

NAME OF TRANSFEREE

 

ADDRESS

 

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT IN ITS ENTIRETY.

 

BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE AND THE TRANSFEREE SHALL HAVE THE SOLE
RIGHTS AS BENEFICIARY THEREOF, INCLUDING ALL DRAWING RIGHTS UNDER THE LETTER OF
CREDIT, ALL RIGHTS TO TRANSFER SET FORTH IN THE LETTER OF CREDIT AND SOLE RIGHTS
RELATING TO ANY AMENDMENTS WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS
AND WHETHER NOW EXISTING OR HEREAFTER MADE. ALL AMENDMENTS ARE TO BE DIRECTED TO
THE TRANSFEREE WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED
BENEFICIARY.

 

THE ORIGINAL OF SUCH LETTER OF CREDIT ALONG WITH ALL AMENDMENTS, IF ANY, IS
RETURNED HEREWITH, AND WE ASK YOU TO ENDORSE THE TRANSFER ON THE REVERSE
THEREOF, AND FORWARD IT DIRECTLY TO THE TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF
TRANSFER.

 

 

SINCERELY,

 

 

 

RIO GRANDE LNG, LLC

 

NAME OF BENEFICIARY

 

 

 

AUTHORIZED NAME & TITLE

 

 

 

AUTHORIZED SIGNATURE

 

 

 

 

 

TELEPHONE NUMBER

 

 

 

 

ACCEPTED AND AGREED:

 

 

 

NAME & ADDRESS OF BANK                                              

FOR BANK USE ONLY

                                                                                                   

  Confirmation of Authenticating Bank’s signature performed by:

AUTHORIZED NAME & TITLE                                            

  Date:                                     Time:                           a.m/p.m

 

 

 

  Addl
Info.:                                                                             

R-7

 

AUTHORIZED SIGNATURE                                                 

 

TELEPHONE NO.                                                                   

 

 

 

 

 

THIS FORM MUST BE EXECUTED IN DUPLICATE.

 

 

R-8

 

ANNEX IV

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

 

FORM OF NOTICE OF SUBSTANTIAL COMPLETION FOR TRAIN [___] OF THE RIO GRANDE
NATURAL GAS LIQUEFACTION FACILITY

 

DATE:                                                

 

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

 

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.                           

 

GENTLEMEN:

 

REFERENCE IS MADE TO THAT CERTAIN IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                        (THE “LETTER OF CREDIT”) ISSUED BY YOU IN FAVOR OF RIO
GRANDE LNG, LLC (“BENEFICIARY”), AND THE FIXED PRICE TURNKEY AGREEMENT FOR THE
ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THE RIO GRANDE NATURAL GAS
LIQUEFACTION FACILITY (“PROJECT”) DATED AS OF MAY 24TH, 2019, BY AND BETWEEN
BENEFICIARY AND BECHTEL OIL, GAS AND CHEMICALS, INC. (“APPLICANT”) (AS AMENDED,
RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME).

 

[IF TRAIN 1] [IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CREDIT, BENEFICIARY
HEREBY NOTIFIES YOU THAT (I) SUBSTANTIAL COMPLETION OF TRAIN 1 HAS OCCURRED
(INCLUDING APPLICANT’S PAYMENT OF ALL DELAY LIQUIDATED DAMAGES DUE AND OWING
UNDER THE AGREEMENT FOR TRAIN 1), AND (II) APPLICANT HAS ACHIEVED THE
PERFORMANCE GUARANTEES FOR TRAIN 1 OR PAID ALL PERFORMANCE LIQUIDATED DAMAGES
DUE AND OWING UNDER THE AGREEMENT FOR TRAIN 1 (INCLUDING ANY POTENTIAL
PERFORMANCE LIQUIDATED DAMAGE EXPOSURE BASED UPON THE RESULTS OF THE PERFORMANCE
TESTS CONDUCTED PRIOR TO SUBSTANTIAL COMPLETION).]

 

[IF TRAIN 2] [IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CREDIT, BENEFICIARY
HEREBY NOTIFIES YOU THAT (I) SUBSTANTIAL COMPLETION OF TRAIN 2 HAS OCCURRED
(INCLUDING APPLICANT’S PAYMENT OF ALL DELAY LIQUIDATED DAMAGES DUE AND OWING
UNDER THE AGREEMENT FOR TRAIN 2), AND (II) APPLICANT HAS ACHIEVED THE
PERFORMANCE GUARANTEES FOR TRAIN 2 OR PAID ALL PERFORMANCE LIQUIDATED DAMAGES
DUE AND OWING UNDER THE AGREEMENT FOR TRAIN 2 (INCLUDING ANY POTENTIAL
PERFORMANCE LIQUIDATED DAMAGE EXPOSURE BASED UPON THE RESULTS OF THE PERFORMANCE
TESTS CONDUCTED PRIOR TO SUBSTANTIAL COMPLETION).]

 

THE UNDERSIGNED HEREBY REQUESTS THAT THE STATED AMOUNT OF THIS LETTER OF CREDIT
DECREASE TO AN AGGREGATE AMOUNT OF U.S. DOLLARS ($[                       ]).

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

R-9

 

ANNEX V

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER                       

 

FORM OF NOTICE FOR EXPIRATION OF DEFECT CORRECTION PERIOD OF TRAIN 1 OF THE RIO
GRANDE NATURAL GAS LIQUEFACTION FACILITY

 

DATE:                                                    

 

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

 

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.                       

 

GENTLEMEN:

 

REFERENCE IS MADE TO THAT CERTAIN IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                         (THE “LETTER OF CREDIT”) ISSUED BY YOU IN FAVOR OF RIO
GRANDE LNG, LLC (“BENEFICIARY”).

 

IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CREDIT, BENEFICIARY HEREBY
NOTIFIES YOU THAT (A) SUBSTANTIAL COMPLETION OF TRAIN 2 HAS OCCURRED (INCLUDING
APPLICANT’S PAYMENT OF ALL DELAY LIQUIDATED DAMAGES DUE AND OWING UNDER THE
AGREEMENT FOR TRAIN 2), (B) CONTRACTOR HAS ACHIEVED THE PERFORMANCE GUARANTEES
FOR TRAIN 2 OR PAID ALL PERFORMANCE LIQUIDATED DAMAGES DUE AND OWING UNDER THE
AGREEMENT FOR TRAIN 2 (INCLUDING ANY POTENTIAL PERFORMANCE LIQUIDATED DAMAGE
EXPOSURE BASED UPON THE RESULTS OF THE PERFORMANCE TESTS CONDUCTED PRIOR TO
SUBSTANTIAL COMPLETION), AND (C) THE PERIOD SPECIFIED IN CLAUSE (I) OF THE
DEFINITION OF “DEFECT CORRECTION PERIOD” HAS EXPIRED AS SET FORTH IN THAT
CERTAIN FIXED PRICE TURNKEY AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND
CONSTRUCTION OF THE RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY, DATED AS OF
MAY 24TH, 2019, BY AND BETWEEN BECHTEL OIL, GAS AND CHEMICALS, INC.
(“APPLICANT”) AND BENEFICIARY (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME TO TIME, THE “AGREEMENT”).

 

THE UNDERSIGNED HEREBY REQUESTS THAT THE STATED AMOUNT OF THIS LETTER OF CREDIT
DECREASE TO AN AGGREGATE AMOUNT OF U.S. DOLLARS ($[                  ]).

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

R-10

 

ANNEX VI

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

 

FORM OF NOTICE FOR EXPIRATION OF DEFECT CORRECTION PERIOD OF TRAIN 2 OF THE RIO
GRANDE NATURAL GAS LIQUEFACTION FACILITY

 

DATE:                                                

 

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

 

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.                        

 

GENTLEMEN:

 

REFERENCE IS MADE TO THAT CERTAIN IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                         (THE “LETTER OF CREDIT”) ISSUED BY YOU IN FAVOR OF RIO
GRANDE LNG, LLC (“BENEFICIARY”).

 

IN ACCORDANCE WITH THE TERMS OF THE LETTER OF CREDIT, BENEFICIARY HEREBY
NOTIFIES YOU THAT THE PERIOD SPECIFIED IN CLAUSE (II) OF THE DEFINITION OF
“DEFECT CORRECTION PERIOD” (I.E., THE [[***] (***)] MONTH PERIOD FOLLOWING
SUBSTANTIAL COMPLETION OF TRAIN 2) HAS EXPIRED AS SET FORTH IN THAT CERTAIN
FIXED PRICE TURNKEY AGREEMENT FOR THE ENGINEERING, PROCUREMENT AND CONSTRUCTION
OF THE RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY, DATED AS OF MAY 24TH, 2019,
BY AND BETWEEN BECHTEL OIL, GAS AND CHEMICALS, INC. (“APPLICANT”) AND
BENEFICIARY (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME
TO TIME, THE “AGREEMENT”).

 

[IF CLAIMS REMAIN BETWEEN OWNER AND CONTRACTOR] THE UNDERSIGNED HEREBY REQUESTS
THAT THE STATED AMOUNT OF THIS LETTER OF CREDIT DECREASE TO AN AGGREGATE AMOUNT
OF U.S. DOLLARS ($[                   ]).

 

[IF NO CLAIMS REMAIN BETWEEN OWNER AND CONTRACTOR] THE UNDERSIGNED HEREBY
REQUESTS THAT THE STATED AMOUNT OF THIS LETTER OF CREDIT DECREASE TO AN
AGGREGATE AMOUNT OF ZERO U.S. DOLLARS ($0.00) AND TERMINATION OF THIS LETTER OF
CREDIT AND CONFIRMATION TO APPLICANT OF SAID TERMINATION.

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

R-11

 

ANNEX VII

 

IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________

 

DRAWING CERTIFICATE

 

DATE:                                  , 20      

 

TO:        [ISSUING BANK NAME]

[ISSUING BANK ADDRESS]

 

RE:        IRREVOCABLE STANDBY LETTER OF CREDIT NO.                         

 

GENTLEMEN:

 

REFERENCE IS MADE TO THAT CERTAIN IRREVOCABLE STANDBY LETTER OF CREDIT NO.
                     (THE “LETTER OF CREDIT”) ISSUED BY YOU IN FAVOR OF RIO
GRANDE LNG, LLC (“BENEFICIARY”).

 

IN ACCORDANCE WITH THAT CERTAIN FIXED PRICE TURNKEY AGREEMENT FOR THE
ENGINEERING, PROCUREMENT AND CONSTRUCTION OF THE RIO GRANDE NATURAL GAS
LIQUEFACTION FACILITY, DATED AS OF MAY 24TH, 2019, BY AND BETWEEN BECHTEL OIL,
GAS AND CHEMICALS, INC. (“APPLICANT”) AND BENEFICIARY (AS AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “AGREEMENT”), THE
UNDERSIGNED, AN OFFICER OF BENEFICIARY, DOES HEREBY CERTIFY THAT:

 

1.        BENEFICIARY HAS BEEN NOTIFIED THAT YOU HAVE DECIDED NOT TO EXTEND THE
LETTER OF CREDIT BEYOND THE CURRENT EXPIRATION DATE AND [***] (***) OR LESS
CALENDAR DAYS REMAIN BEFORE THE EXPIRATION OF THE CURRENT EXPIRATION DATE;

 

AND

 

2.        APPLICANT HAS NOT DELIVERED TO BENEFICIARY A REPLACEMENT LETTER OF
CREDIT EQUIVALENT TO THE LETTER OF CREDIT (I.E., IRREVOCABLE STANDBY LETTER OF
CREDIT NO.                     ) FROM A COMMERCIAL BANK IN THE UNITED STATES OF
AMERICA MEETING THE REQUIREMENTS OF SECTION 9.2 OF THE AGREEMENT; AND

 

3.        BENEFICIARY IS ENTITLED TO PAYMENT OF U.S.
$[                        ].

 

YOU ARE REQUESTED TO REMIT PAYMENT OF THIS DRAWING IN IMMEDIATELY AVAILABLE
FUNDS BY WIRE TRANSFER TO THE FOLLOWING ACCOUNT:

 

[ACCOUNT INFORMATION]

 

IN WITNESS WHEREOF, THE UNDERSIGNED HAS EXECUTED AND DELIVERED THIS CERTIFICATE
AS OF THIS                    DAY OF                                 , 20
      .

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

R-12

 

ATTACHMENT S

PERFORMANCE TESTS

[***]

 

 

 

ATTACHMENT T

MINIMUM ACCEPTANCE CRITERIA, PERFORMANCE GUARANTEES

AND PERFORMANCE LIQUIDATED DAMAGES

[***]

 

 

 

ATTACHMENT U

 

FORM OF PARENT GUARANTEE

This GUARANTEE (this “Guarantee”), dated as of [____________], 20[__], is made
by Bechtel Global Energy, Inc., a public company organized under the laws of
Delaware (“Guarantor”), in favor of Rio Grande LNG, LLC, a limited liability
company organized under the laws of Texas (“Owner,” and, together with
Guarantor, each a “Party” and, collectively, the “Parties”).

RECITALS

WHEREAS, Owner has agreed to enter into the Fixed Price Turnkey Agreement for
the Engineering, Procurement and Construction of Trains 1 and 2 of the Rio
Grande Natural Gas Liquefaction Facility to be located in Cameron County, Texas
(“Project”), dated as of May 24th, 2019, with Bechtel Oil, Gas and Chemicals,
Inc. (“Contractor”), a subsidiary of Guarantor (the “Agreement”); and

WHEREAS, it is a condition to Owner and Contractor entering into the Agreement
that Guarantor execute and deliver this Guarantee.

NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:

1.         Guarantee.

(a)          On the terms and subject to the conditions contained herein,
Guarantor hereby absolutely, unconditionally and irrevocably guarantees, to and
for the benefit of Owner, the full and punctual performance and payment, as and
when each such payment or performance becomes due, by or on behalf of Contractor
of any and all obligations or amounts owed by Contractor to Owner arising under
the Agreement (the “Guaranteed Obligations”).  The Guaranteed Obligations of
Guarantor hereunder are primary obligations.

(b)          This Guarantee is an absolute, unconditional, present, and
continuing guarantee of performance and payment, and not of collection, is in no
way conditioned or contingent upon any attempt to collect from or enforce
performance or payment by Contractor, and shall remain in full force and effect
and be binding upon and against Guarantor and its successors and permitted
assigns (and shall inure to the benefit of Owner and its successors, endorsees,
transferees, and permitted assigns) without regard to the validity or
enforceability of the Agreement.  If, for any reason, Contractor shall fail or
be unable duly, punctually, and fully to perform or pay, as and when such
performance or payment is due, any of the Guaranteed Obligations, Guarantor
shall promptly upon written notice from Owner perform or pay, or cause to be
performed or paid, such Guaranteed Obligations.

(c)          Guarantor agrees that any court judgment or arbitration award
between Contractor and Owner under the Agreement shall be conclusive and binding
on the Parties (subject to either Parties’ right to appeal) for the purposes of
determining Guarantor’s obligations under the Guarantee but no such judgment
shall be required to enforce the Guarantor’s obligations under this Guarantee.

(d)          Guarantor further agrees to pay to Owner any and all reasonable
direct costs, expenses (including, without limitation, all reasonable fees and
disbursements of counsel), and damages paid or incurred by Owner in enforcing
any rights pursuant to this Guarantee, including, without limitation, collecting
against Guarantor under this Guarantee.

2.        Obligations Absolute and Unconditional, Continuing.  Guarantor agrees
that the obligations of Guarantor set forth in this Guarantee shall be direct
obligations of Guarantor, and such obligations shall be

U-1

 

absolute, irrevocable and unconditional, and shall remain in full force and
effect without regard to and shall not be released, discharged or in any way
affected or impaired by, any circumstance or condition whatsoever (other than
full and strict compliance by Guarantor with its obligations hereunder) (whether
or not Guarantor shall have any knowledge or notice thereof), including, without
limitation:

(a)          the existence, validity, enforceability, perfection, release, or
impairment of value of any collateral for such Guaranteed Obligations;

(b)         any amendment or modification of or supplement to or other change in
the Agreement or any other document, including, without limitation, any change
order, renewal, extension, acceleration or other changes to time, manner, place
or terms of payment thereunder;

(c)         any failure, omission or delay on the part of Owner to confirm or
comply with any term of the Agreement or any other document;

(d)         any waiver, consent, extension, indulgence, compromise, release or
other action or inaction under or in respect of the Agreement or any other
agreement or instrument or any obligation or liability of Owner or any other
Person, or any exercise or non-exercise of any right, remedy, power, or
privilege under or in respect of any such instrument or agreement or any such
obligation or liability;

(e)         any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, or similar proceeding with respect to Owner or any of
its respective properties, or any action taken by any trustee or receiver or by
any court in any such proceeding;

(f)         any bankruptcy, insolvency, reorganization, arrangement,
readjustment, liquidation, or similar proceeding with respect to Contractor or
any of its respective properties, any rejection, invalidity or unenforceability
of all or any portion of the Agreement arising from same, or any action taken by
any trustee or receiver or by any court in any such proceeding;

(g)         any discharge, termination, cancellation, frustration, irregularity,
invalidity or unenforceability, in whole or in part, of the Agreement or any
other document or any term or provision thereof;

(h)         any merger or consolidation of Guarantor or Contractor into or with
any other Person or any sale, lease or transfer of all or any of the assets of
Guarantor or Contractor;

(i)          any change in the ownership of Guarantor or Contractor;

(j)          any winding up or dissolution of Contractor or Guarantor;

(k)         any assignment of, or the creation of any mortgage, pledge, charge
or other encumbrance over or in respect of, this Guarantee, the Agreement, or
any of the Owner’s rights, benefits, or obligations under or pursuant to this
Guarantee or the Agreement; or

(l)          to the fullest extent permitted under Applicable Law, any other
occurrence or circumstance whatsoever, whether similar or dissimilar to the
foregoing, which might otherwise constitute a legal or equitable defense or
discharge of the liabilities of a guarantor or surety or which might otherwise
limit recourse against Guarantor

The Guaranteed Obligations constitute the full recourse obligations of Guarantor
enforceable against it to the full extent of all its assets and
properties.  Without limiting the generality of the foregoing, Guarantor

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agrees that repeated and successive demands may be made and recoveries may be
had hereunder as and when, from time to time, Contractor shall fail to perform
obligations or pay amounts owed by Contractor under the Agreement and that
notwithstanding the recovery hereunder for or in respect of any given failure to
so comply by Contractor under the Agreement, this Guarantee shall remain in full
force and effect and shall apply to each and every subsequent such failure.

Notwithstanding anything else in this Guarantee,
the Guarantor’s duties, obligations and liability under this Guarantee shall be
no greater (including in duration) than the duties, obligations and liabilities
of Contractor under the Agreement, and Guarantor shall have the right to avail
itself of any equivalent rights of defense, claim, right,
privilege, counterclaim, set-off, waiver, release, exclusions and/or limitation
of liability which are or would have been available to Contractor; provided
that, the foregoing statement shall not be interpreted to relieve Guarantor of
any Guaranteed Obligations due to any of the circumstances in Sections 2(f),
2(h), 2(i) or 2(j) above, or due to the cancellation or termination of the
Agreement or due to the invalidity or unenforceability of the Agreement (such as
Contractor’s lack of authority to enter into the Agreement). The Owner agrees
that in determining whether any limit on liability under the Agreement has been
reached or exceeded, the liabilities of the Guarantor under this Guarantee shall
be taken into account as if the amount of the relevant liability has been
recovered by the Owner from the Contractor under the Agreement.

3.         Reinstatement.  Guarantor agrees that this Guarantee shall be
automatically reinstated with respect to any payment made by or on behalf of
Contractor pursuant to the Agreement if and to the extent that such payment is
rescinded or must be otherwise restored, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise.

4.         Waiver of Demands, Notices.  Guarantor hereby unconditionally waives,
to the fullest extent permitted by Applicable Law: (i) notice of any of the
matters referred to in Section Error! Reference source not found. hereof; (ii)
all notices which may be required by Applicable Law, or otherwise, now or
hereafter in effect, to preserve any rights against Guarantor hereunder,
including, without limitation, any demand, proof, or notice of non-payment or
non-performance of any Guaranteed Obligation; (iii) notice of acceptance of this
Guarantee, demand, protest, presentment, notice of failure of performance or
payment, and any requirement of diligence; and (iv) any requirement to exhaust
any remedies resulting from failure of performance or payment by Contractor
under the Agreement or by any other Person under the terms of the Agreement.

5.         No Subrogation.  Notwithstanding any performance, payment or payments
made by Guarantor hereunder (or any set-off or application of funds of Guarantor
by Owner), Guarantor shall not be entitled to be subrogated to any of the rights
of Contractor (or of any rights of Owner hereunder), or any collateral,
security, or guarantee or right of set-off held by Owner, for the performance or
payment of the obligations guaranteed hereunder, nor shall Guarantor seek or be
entitled to assert or enforce any right of contribution, reimbursement,
indemnity or any other right to payment from Contractor as a result of
Guarantor’s performance of its obligations pursuant to this Guarantee until all
Guaranteed Obligations are performed or paid in full.  If any amount shall be
paid to Guarantor on account of such subrogation, contribution, reimbursement or
indemnity rights at any time when all of the Guaranteed Obligations and all
amounts owing hereunder shall not have been performed and paid in full, such
amount shall be held by Guarantor in trust for Owner, segregated from other
funds of Guarantor, and shall, forthwith upon receipt by Guarantor, be turned
over to Owner in the exact form received by Guarantor (duly endorsed by
Guarantor to Owner, if required), to be applied against the Guaranteed
Obligations, whether or not matured, in such order as Owner may determine.

U-3

 

6.        Representations and Warranties.  Guarantor represents and warrants
that:

(a)         it is a corporation duly organized, validly existing and is in good
standing under the laws of Delaware, and has the corporate power and authority
to execute, deliver and carry out the terms and provisions of the Guarantee;

(b)         the execution, delivery and performance of this Guarantee will not
violate or conflict with its charter or by-laws (or comparable constituent
documents), any law, regulation or order of any governmental authority or any
court or other agency of government applicable to it or the terms of any
agreement to which it is a party;

(c)         no authorization, approval, consent or order of, or registration or
filing with, any court or other governmental entity having jurisdiction over
Guarantor is required on the part of Guarantor for the execution, delivery and
performance of this Guarantee;

(d)         the execution, delivery and performance of this Guarantee has been
and remains duly authorized by all necessary corporate action and does not
contravene the Guarantor's constitutional documents or any contractual
restriction binding on the Guarantor or its assets;

(e)         this Guarantee, when executed and delivered, will constitute a valid
and legally binding agreement of Guarantor, enforceable against Guarantor in
accordance with its terms, except as the enforceability of this Guarantee may be
limited by the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally and by general
principles of equity as they apply to the Guarantor; and

(f)         Such Guarantor is financially solvent, able to pay all debts as they
mature, and possesses sufficient working capital to perform its obligations
under this Guarantee.

7.        Conveyance or Transfer.  Without Owner’s written consent (not to be
unreasonably withheld, conditioned or delayed), Guarantor shall not convey,
sell, lease or transfer its properties or assets to any Person to the extent
that such conveyance, sale, lease or transfer could have a material adverse
effect on Guarantor’s ability to fulfill its obligations under this Guarantee
(“Material Transaction”). For the avoidance of doubt, a sale of property, assets
or Affiliates for market value in an arm’s length transaction (a) by Guarantor
or (b) by an Affiliate of Guarantor shall not be considered a Material
Transaction as long as Guarantor or a wholly owned subsidiary of Guarantor
receives all of the proceeds from such sale.  In case of a proposed Material
Transaction, Guarantor shall provide Owner with reasonable advance notice of
such proposed Material Transaction. Guarantor shall then meet with Owner and,
pursuant to a written confidentiality agreement, will provide to Owner all
necessary information, reasonably requested by Owner, regarding the proposed
Material Transaction for the purpose of receiving Owner’s written consent to
such Material Transaction (and as described above such consent shall not be
unreasonably withheld, conditioned or delayed).  For the avoidance of doubt,
such restriction on conveyances, sales, leases and transfers shall include
conveyances, sales, leases or transfers to Guarantor’s Affiliates other than any
of Guarantor’s wholly owned subsidiaries.

8.        Miscellaneous.

(a)          This Guarantee shall inure to the benefit of and be binding upon
the Parties hereto and their respective successors and permitted
assigns.  Guarantor may not assign or transfer this Guarantee or any rights or
obligations hereunder without Owner’s prior written consent, which consent may
be withheld in Owner’s sole and absolute discretion.  Owner, without the consent
of Guarantor:  (i) may assign, pledge and/or grant a security interest in this
Guarantee to any lender; and (ii) may assign this Guarantee to any

U-4

 

Person who is a permitted successor or assignee of Owner under the
Agreement.  Except as otherwise provided in this Section  8, nothing herein,
express or implied, is intended or shall be construed to confer upon or to give
to any Person other than the Parties hereto any rights, remedies, or other
benefits.

(b)         This Guarantee shall be governed by, interpreted and construed in
accordance with the laws of the State of Texas, without giving effect to any
choice or conflict of law provision or rule that would cause the application of
the laws of any jurisdiction other than the State of Texas.

(c)         In the event that any claim, dispute, controversy, difference,
disagreement, or grievance (of any and every kind or type, whether based on
contract, tort, statute, regulation or otherwise) arising out of, connected with
or relating in any way to this Guarantee (including the construction, validity,
interpretation, termination, enforceability or breach of this Guarantee)
(“Dispute”) cannot be resolved informally within [***] ([***]) Days after the
Dispute arises (or such longer period of time if agreed to in writing by the
Parties), either Party may give written notice of the Dispute (“Dispute Notice”)
to the other Party requesting that a representative of Owner’s senior management
and Guarantor’s senior management meet in an attempt to resolve the
Dispute.  Each such senior executive shall have full authority to resolve the
Dispute and shall promptly begin discussions in an effort to agree on a
resolution of the Dispute within [***] ([***]) Days after receipt by the
non-notifying Party of such Dispute Notice, with such negotiations being held in
Harris County, Texas or at another location if agreed upon by the Parties in
writing.  In no event shall this Section 8(c) be construed to limit either
Party’s right to take any action under this Guarantee, provided that such rights
are not the subject of the Dispute.

(d)         If the Dispute is not resolved by negotiation within [***] ([***])
Days after the date of a Party’s written notice requesting that representatives
of each Party’s senior management meet (or such other time as may be agreed in
writing by the Parties), then the Parties agree that the Dispute shall be
decided by final and binding arbitration. Such arbitration shall be held in
Harris County, Texas, unless otherwise agreed by the Parties, shall be
administered by the AAA’s office in Harris County, Texas, shall be conducted by
three (3) arbitrators (or for Claims involving less than [***] U.S. Dollars
(U.S.$ [***]), one (1) arbitrator) chosen in accordance with Section 8(d)(i),
and shall, except as otherwise agreed by the Parties, be governed by the AAA’s
Construction Industry Arbitration Rules and Mediation Procedures then in effect
(“AAA Rules”).  For the purposes of determining the number of arbitrators, the
total value of the Claims and counterclaims reasonably asserted by all the
Parties shall be used to determine whether the [***] U.S. Dollars (U.S.$ [***])
threshold has been met.  The arbitration tribunal shall determine the rights and
obligations of the Parties according to the laws of Texas, excluding its
conflict of law principles; provided, however, the law applicable to the
validity of the arbitration clause, the enforcement of any award and any other
question of arbitration law or procedure shall be the Federal Arbitration Act, 9
U.S.C.A. § 2.  Issues concerning the arbitrability of a matter in dispute shall
be decided by a court with proper jurisdiction.  The arbitration shall be
conducted in the English language and all submissions shall be made in the
English language or with an English translation; provided that witnesses may
provide testimony in a language other than English if a simultaneous English
translation is provided.  The Parties shall be entitled to engage in reasonable
discovery, including the right to production of relevant and material documents
by the opposing Party and the right to take depositions reasonably limited in
number, time and place; provided that in no event shall any Party be entitled to
refuse to produce relevant and non-privileged documents or copies thereof
requested by the other Party within the time limit set and to the extent
required by order of the arbitration tribunal.  All Disputes regarding discovery
shall be promptly resolved by the arbitration tribunal.  The award of the
arbitration tribunal shall be in writing, state the reasons upon which the award
thereof is based, be signed by all arbitrators, and be final and binding. Any
other person may be joined as an additional party to any arbitration conducted
under this Section 8(d), provided that joinder is permitted under and in
accordance with the Agreement. The Parties agree that judgment on the
arbitration award may be entered by any court having jurisdiction thereof.

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(i)        The arbitrators for any arbitration under Section 8(d) shall be
selected in accordance with this Section 8(d).

a)                   For Claims less than [***] U.S. Dollars (U.S.$ [***]),
Owner and Guarantor shall jointly select one arbitrator within ([***]) Days of
the filing of the demand for arbitration with the AAA, or if the Parties fail to
appoint such arbitrator within the applicable time period, then the AAA shall
appoint the arbitrator in accordance with the AAA rules.

b)                   For Claims [***] U.S. Dollars (U.S.$ [***]) or more, Owner
and Guarantor shall each appoint one (1) arbitrator within [***] ([***]) Days of
the filing of the demand for arbitration with the AAA, and the two (2)
arbitrators so appointed shall select the presiding arbitrator within [***]
([***]) Days after the latter of the two (2) arbitrators has been appointed by
the Parties.  If either Party fails to appoint its party-appointed arbitrator or
if the two (2) party-appointed arbitrators cannot reach an agreement on the
presiding arbitrator within the applicable time period, then the AAA shall
appoint the remainder of the three (3) arbitrators not yet appointed.  Each
arbitrator shall be and remain at all times wholly impartial, and, once
appointed, no arbitrator shall have any ex parte communications with any of the
Parties or any other parties to the Dispute concerning the arbitration or the
underlying Dispute, provided, however, that the Parties may have ex parte
communications with their appointed arbitrators until the third arbitrator is
selected.

(e)         No modification or amendment of this Guarantee shall be of any force
or effect unless made in writing, signed by the Parties hereto, and specifying
with particularity the nature and extent of such modification or
amendment.  This Guarantee constitutes the entire and only understanding and
agreement among the Parties hereto with respect to the subject matter hereof and
cancels and supersedes any prior negotiations, proposals, representations,
understandings, commitments, communications, or agreements, whether oral or
written, with respect to the subject matter hereof.

(f)        All notices, demands, offers, requests and other written instruments
required or permitted to be given pursuant to this Guarantee shall be in writing
signed by the Party giving such notice and shall be hand delivered or sent by
overnight courier, messenger, facsimile or certified mail, return receipt
requested, to the other Parties at the address set forth below.

If to Owner:

 

Rio Grande LNG, LLC

1000 Louisiana Street

39th Floor

Houston, Texas 77002

Attn: [***]

E-mail:  [***]

 

If to Guarantor:

 

Bechtel Global Energy, Inc.

3000 Post Oak Blvd.

Houston, Texas 77056

Phone: [***]

Facsimile: [***]

Attn: [***]

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With a copy to:

Bechtel Oil, Gas and Chemicals, Inc.

3000 Post Oak Blvd.

Houston, Texas 77056

Phone: [***]

Facsimile: [***]

Attn: [***]

Each Party shall have the right to change the place to which such notices shall
be sent or delivered by sending a similar notice to the other Parties in like
manner.  Notices, demands, offers, requests or other written instruments shall
be deemed to have been duly given on the date actually received by the intended
recipient, provided that if the day of receipt is not a Business Day then it
shall be deemed to have been received on the next succeeding Business Day.

(g)         The headings of the several provisions of this Guarantee are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Guarantee.

(h)         No forbearance or delay by Owner in asserting rights against
Contractor or Guarantor shall affect or impair in any way Guarantor’s
obligations hereunder or the rights of Owner hereunder.

(i)          In addition to other assurances provided in this Guarantee,
Guarantor acknowledges that Owner may obtain financing associated with the
Project and Guarantor agrees to provide reasonable cooperation to Owner and
Lenders in connection with such project financing, including, but not limited
to, entering into direct agreements with Lenders (which shall be substantially
in the form of Exhibit 1 with such other changes thereto as are reasonably
requested by Lenders), as required by Lenders, covering matters that are
reasonable and customary in project financings of this type such as Lenders
assignment or security rights with respect to this Guarantee, direct notices to
Lenders, step-in/step-out rights, opinions, access by Lenders’ representatives
and other reasonable and customary matters applicable to such project financing.

(j)          Definitions.

(i)        Capitalized terms used, but not otherwise defined, herein shall have
the respective meanings ascribed to such terms in the Agreement.

(ii)        “Applicable Law” means all laws, statutes, ordinances,
certifications, orders, decrees, injunctions, licenses, Permits, approvals,
agreements, rules and regulations, including any conditions thereto, of any
Governmental Instrumentality having jurisdiction over any Party or Contractor,
or other legislative or administrative action of a Governmental Instrumentality,
or a final decree, judgment or order of a court which relates to the performance
of Work under the Agreement or the interpretation or application of this
Guarantee or the Agreement.

(iii)      The term “Person” shall mean any individual, company, joint venture,
corporation, partnership, association, joint stock company, limited liability
company, trust, estate, unincorporated organization, governmental entity or
other entity having legal capacity.

(k)        Any provision in this Guarantee which is illegal, void or
unenforceable will be ineffective to the extent only of such illegality,
voidness or unenforceability and the invalidity of one or more phrases,
sentences, clauses, Sections or Articles contained in this Guarantee shall not
affect the validity of the remaining portions of this Guarantee.

U-7

 

(l)       This Guarantee may be executed in any number of separate counterparts
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.

[Signature page follows.]

U-8

 

IN WITNESS WHEREOF, the undersigned have duly executed this Guarantee as of the
date first above written.

 

 

BECHTEL GLOBAL ENERGY, INC.

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

RIO GRANDE LNG, LLC

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

U-9

 

EXHIBIT 1 TO THE PARENT GUARANTEE

FORM OF ACKNOWLEDGMENT AND CONSENT AGREEMENT WITH LENDER

 

 

U-10

 

ATTACHMENT V

 

OWNER FURNISHED ITEMS

 

V-1

 

With respect to any furnished items that are tied to the issuance of NTP (i.e.,
NTP + X months), if a Change Order involves an adjustment to a Key Date
(including the Guaranteed Substantial Completion Dates), the dates upon which
such items are required to be furnished shall also be adjusted accordingly,
provided that such adjusted dates shall in no event be earlier than the original
date listed below.  All such adjusted dates shall be included in any Change
Order that adjusts a Key Date or a Guaranteed Substantial Completion Date.

 

[***]

 

 

 

V-2

 

ATTACHMENT W

 

SPARE PARTS LIST

Commissioning spare parts, Capital Spare Parts, and Operating Spare Parts as
described in Section 3.4 of the Agreement are further defined in this Attachment
W and Schedule W-1 (Capital Spare Parts).  Schedule W-1 also provides a list of
Capital Spare Parts that are included in the Contract Price.

1.           Commissioning Spare Parts

Commissioning spare parts are those spare parts necessary for Contractor to
achieve Substantial Completion of each Train and are specified and purchased by
Contractor for Contractor’s own use through Substantial Completion of Train 2.
Until such time, commissioning spare parts shall be stored in the Contractor’s
construction warehouse. Any commissioning spare parts not incorporated into the
Facility may be assumed by Owner at no cost after Substantial Completion of
Train 2.

 

2.           Capital Spare Parts

Capital Spare Parts are spare parts with a low probability of use, which
typically have long procurement times and significant cost, and are critical to
the Plant operation in terms of safety or lost production.  Capital Spare Parts
are classified as part of the Project capital investment and valued as part of
the asset.  Capital Spare Parts are non-depreciable and are not treated as
normal inventory. Capital Spare Parts can be refurbished to an “as new”
condition.

 

In the course of the Work, Contractor shall identify all potential additions to
the Capital Spare Parts listed in Schedule W-1 based on Contractor’s experience,
expertise, procurement processes (requisitions to include requests for spare
parts recommendations), and GECP.  For any Capital Spare Parts identified by
Contractor (which are not already included in the Capital Spare Parts listed in
Schedule W-1) (“Additional Capital Spare Parts”), Contractor shall deliver to
Owner for Owner’s approval, not to be unreasonably withheld, the detailed priced
lists obtained from the Additional Capital Spare Parts manufacturer(s) along
with Contractor’s own recommendations for such Additional Capital Spare Parts
for each applicable item of Equipment, including components and systems of such
Equipment. Such priced lists shall originate from the Equipment supplier(s) and
shall be provided to Owner no later than [***] (***) Days after the execution of
the applicable Subcontract for such Equipment, and such purchase prices will be
valid for one hundred and [***] (***) Days after Contractor’s execution thereof.

 

Within such [***] (***) Days, Owner may respond to Contractor identifying which
Additional Capital Spare Parts, if any, that Owner wishes Contractor to procure
under each Subcontract.  The cost associated with all Work related to Additional
Capital Spare Parts is included in the Contract Price, except for the purchase
and delivery price of such Additional Capital Spare Parts.  In the event Owner
requests in writing that Contractor procure any Additional Capital Spare Parts
on Owner’s behalf, Contractor shall be entitled to a Change Order in accordance
with Section 6.1 of the Agreement increase the Contract Price for the actual
purchase price and delivery costs of such requested

 

W-1

 

Additional Capital Spare Parts, plus costs of transportation, preservation and a
profit of [***] ([***]%) on such price and costs.

 

Capital Spare Parts will be delivered by Contractor to Site (or other designated
warehouse location as determined by Owner) at or before Substantial Completion
of Train 1 as required by the Agreement.

 

3.           Operating Spare Parts

Operating Spare Parts are those spare parts necessary for ongoing Facility
operation sufficient for [***] (***) years after Substantial Completion (but
only to the extent not taken into consideration by Capital Spare Parts) and are
based upon Plant maintenance requirements including preventative maintenance and
unplanned, or breakdown, maintenance.

 

In the course of the Work, Contractor shall identify, based on Contractor’s
experience, expertise, procurement processes (requisitions to include requests
for spare parts recommendations), and GECP recommended Operating Spare
Parts.  In accordance with Article 3.4C of the Agreement, Contractor shall
deliver to Owner for Owner’s approval detailed priced lists for Operating Spare
Parts along with Contractor’s recommendations regarding such spare parts for
each applicable item of Equipment (including components and systems of such
Equipment). Such priced lists shall originate from the Equipment supplier(s).

 

In accordance with Article 3.4C of the Agreement, Owner shall respond to
Contractor identifying which Operating Spare Parts, if any, Owner wishes to be
procured. The cost associated with all Work related to Operating Spare Parts is
included in the Contract Price, except for the purchase and delivery price of
those Operating Spare Parts. Costs for purchase and delivery of any Operating
Spare Parts shall be addressed through Change Order in accordance with Section
6.1 of the Agreement and such Change Order shall specify whether each item of
Operating Spare Part is to be delivered by Contractor to Site at or before
Substantial Completion or Final Completion.

 

4.           Standardization and Interchangeability

Contractor shall develop a material and Equipment standardization procedure to
minimize required spare parts inventories.

 

Subcontractors and Sub-subcontractors shall complete Contractor issued spare
parts interchangeability record forms, including original equipment manufacturer
(“OEM”) catalogue numbers, and any associated information required to determine
the interchangeability of components.  Contractor will provide such records to
Owner along with its recommend spare parts lists.

 

5.           Quality Requirements

Contractor shall supply packing, shipping, storage and preservation procedures
for all spare parts.

W-2

 

Contractor shall provide Owner with all spare part procurement records,
including quality records, including material traceability, SDS’s, test and
calibration certificates and Contractor’s receiving inspection reports as
specified in Attachment Y or otherwise required by Owner.

6.           Deductions of Capital Spare Parts from Schedule W-1

Schedule W-1 also includes pricing for each Capital Spare Part (which is
included in the Contract Price and includes all Work related to the procurement
and delivery of such spare part). At any time prior to the execution of the
Subcontract for the purchase of any Capital Spare Part listed in Schedule W-1,
Owner may elect to reduce the quantity of each such Capital Spare Part or remove
the Capital Spare Part listed entirely, and in such case Owner shall be entitled
to a Change Order reducing the Contract Price in an amount equal to the amount
listed in Schedule W-1 for each such Capital Spare Part.

 

 

 

W-3

 

SCHEDULE W-1

 

CAPITAL SPARE PARTS

W-4

 

 

 

 

CAPITAL SPARES LIST (PRICED)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[***]

 

 

W-5

 

ATTACHMENT X

 

REPORTING AND MEETINGS REQUIREMENTS

 

[***]

 

 

 

ATTACHMENT Y

 

QUALITY PLAN REQUIREMENTS

 

 

 

Table of Contents

 

 

 

1.0     INTRODUCTION

2

2.0     OBJECTIVES

2

3.0     DEFINITIONS AND INTERPRETATION

2

3.1     Definitions

2

3.2     Interpretation

2

4.0     RIGHTS AND RESPONSIBILITIES

2

4.1     Owner Rights and Responsibilities

2

4.2     Contractor Responsibilities

3

5.0     PLANNING

3

5.1     Owner Communication

3

5.2     Inspection and Test Plans

3

5.3     Control of Nonconformities

3

5.4     Control of Measuring and Testing Equipment

4

5.5     Engineering, Design, and Development

4

5.5.1     Design Inputs and Outputs

4

5.5.2     Design Verification and Control

4

5.5.3     Design Review

4

5.5.4     Control of Design Changes and Deviations

4

5.6     Construction

5

5.7     Subcontractor

5

6.0     MEASUREMENT, ANALYSIS AND IMPROVEMENT

5

6.1     Internal Quality Audit

5

6.2     Improvement

6

6.2.1     Corrective Action

6

6.2.2     Preventive Action

6

 

 

 

 

 

 

1.0         INTRODUCTION

In addition to the requirements specified in any other provision of the EPC
Agreement, this Attachment Y sets out the general requirements and scope of
activities for quality to be performed by Contractor for the Project.

This Attachment Y does not constitute a substitute for the Facility-specific
quality control and quality assurance plan, inspection plan or Subcontractor
source inspection plan.

2.0         OBJECTIVES

The objective of this Attachment Y is to provide the requirements for the
following:

·

Contractor quality assurance and quality control plan, and the supporting
detailed inspection and quality assurance and quality control procedures;

·

Contractor construction inspection and test plan and supporting construction
procedures; and

·

Subcontractor source inspection plan.

3.0         DEFINITIONS AND INTERPRETATION

3.1         DEFINITIONS

Capitalized terms not defined herein have the meaning in the EPC
Agreement.  Unless otherwise specified, sections and articles referenced herein
refer to the applicable section or article in this Attachment Y.

·

“Key Performance Indicator” or “KPI” means a quantifiable measure used to
evaluate the success of the Contractor and Subcontractor(s) in meeting the
objectives for performance of the Project, as mutually agreed upon between Owner
and Contractor;

·

“Nonconformance” means any item in which one or more characteristics fails to
conform to the requirements of the EPC Agreement associated with the Work;

·

“Project Quality Manager” means Contractor’s designated Person responsible for
quality activities of Contractor described in the EPC Agreement associated with
the Work;

·

“Quality Assurance” or “QA” means the system by which the Contractor shall
monitor the performance of stages of the Work to a level of quality as agreed
between Owner and Contractor in the Quality Plan;

·

“Quality Control” or “QC” means the system by which the Contractor shall test
the Work to ensure that the Work is performed in accordance with the Sections
and Articles of this EPC Agreement; and

3.2         INTERPRETATION

To the extent there is a conflict between this Attachment Y and the terms and
conditions of the EPC Agreement, the terms and conditions of the EPC Agreement
shall control.

4.0         RIGHTS AND RESPONSIBILITIES

In addition to the other responsibilities set forth herein, the Parties shall
have the following responsibilities.

4.1         OWNER RIGHTS AND RESPONSIBILITIES

·

Pursuant to Section 12.2 of the EPC Agreement, Owner, Lender, Independent
Engineer, and either of their representative have the right to inspect all Work
(including Equipment) at all times; and

Y-2

 

·

Owner’s engineering and quality staff may attend and observe all internal audits
or surveillance reviews organized by the Contractor.  However, Owner reserves
the right to waive attendance and observation in any such witness point.  Owner
also reserves the right to attend and observe in any such witness point.

4.2         CONTRACTOR RESPONSIBILITIES

Contractor shall:

·

Develop a quality strategy and detailed Quality Plan for Owner’s comment and
approval no later than [***] ([***]) Days after the date Owner issues LNTP;

·

Be responsible for all quality requirements of the Work;

·

Develop and maintain quality organization charts and staffing plans for
Contractor’s home office, the Site and remote Work locations;

·

Establish and implement the basis for evaluating QA/QC activities on the
Project;

·

Provide Owner with summary reports of internal audits;

·

Provide Owner with summary reports related to any quality control or quality
assurance issue with completed Work;

·

Maintain Project quality documents and records as specified in the EPC
Agreement; and

·

Implement quality requirements related to Contractor activities contemplated
under the EPC Agreement and this Attachment Y.

5.0         PLANNING

5.1         OWNER COMMUNICATION

Reporting requirements for quality control and quality assurance activities
shall be described in detail in the Quality Plan, and shall be included in
reports named in Attachment X.

5.2         INSPECTION AND TEST PLANS

Inspection and test plans (“ITPs”) shall be prepared by Contractor for the Work.
An ITP is a document which shall detail the required inspection points for both
the Contractor and Owner for each portion of the Work. Contractor shall submit
each ITP for Owner for approval at least [***] ([***]) Days after NTP.

Each Contractor and Subcontractor ITP shall include the following information:

·

Inspection activities;

·

Quality Control requirements;

·

Responsibility for inspections or tests;

·

Applicable procedures and numbering;

·

Acceptance criteria;

·

Verifying documents;

·

Inspection parties and responsibilities; and

·

Inspection points (hold, witness, and review).

5.3         CONTROL OF NONCONFORMITIES

Contractor shall:

·

Issue Nonconformance Reports (“NCRs”) for nonconformance of Work with the
Quality Plan and applicable Project Drawings and Specifications. Contractor
shall maintain a status summary of open NCRs and provide them to Owner as part
of the Monthly Progress Report;

·

Segregate nonconforming materials and assemblies to a clearly designated
rejection site. Contractor shall track and control nonconforming Equipment or
materials until it is repaired, exported, or otherwise disposed.

Y-3

 

The responsibility for review and authority for disposition of non-conformances
against Owner approved procedures shall be defined in the Contractor Quality
Plan and applicable project procedures.

5.4         CONTROL OF MEASURING AND TESTING EQUIPMENT

Contractor shall identify, maintain, control, adjust, and calibrate tools,
gauges, instruments, and other measuring and testing devices used by Contractor
to make and perform tests in the field at Site with instructions for their use,
calibration, and storage.

5.5         ENGINEERING, DESIGN, AND DEVELOPMENT

5.5.1      Design Inputs and Outputs

All input data is to be complete, of current issue, and in compliance with the
EPC Agreement. Design outputs shall:

·

Identify the characteristics of the design which are applicable to safe
operation of the Facility;

·

Consider safeguards against misuse or mal-operation; and

·

Define the technical data for procurement.

5.5.2      Design Verification and Control

Contractor deliverables shall:

·

Be presented in a manner that enables traceability to the Basis of Design; and

·

Be checked (including inter-discipline checks where appropriate) and approved by
authorized personnel of Contractor independent of the deliverable’s originator

5.5.3       Design Review

Contractor shall perform design reviews to address both the specific aspects of
the design and the compliance of the overall design with the requirements of the
EPC Agreement.  Design reviews shall include the following:

·

HAZOP;

·

SIL;

·

3D Model;

·

SIMOPs;

·

Constructability;

·

Ergonomics (to be reviewed as part of 3D Model Reviews); and

·

Any other reviews described in Contractor’s project execution plan, including
any discipline-specific subplans.

Prior to the above listed design reviews, relevant procedures and terms of
reference shall be issued by the Contractor to Owner for review.  Contractor
shall organize the design reviews, present information, issue review reports,
and close out any issues identified during design reviews.  Contractor shall
actively involve Owner in the above reviews.

5.5.4       Control of Design Changes and Deviations

All changes from the approved EPC Agreement baseline shall be comprehensively
reviewed and approved prior to implementation. Contractor, using the change
management system defined and provisioned herein and in Attachment D, shall
document the review and approval of any design changes that deviate from the
approved baseline design.

All changes shall be in accordance with the requirements contained in Attachment
D and elsewhere in the EPC Agreement.

Y-4

 

Contractor’s change management system shall achieve the following:

·

Changes shall be identified and recognized;

·

Risks associated with any change shall be highlighted and managed accordingly;

·

Communicate and implement any change thoroughly and accurately to the Project;
and

All Owner-initiated design changes and Change Directives, along with Contractor
initiated technical queries and Change Orders, shall be controlled through the
change management process.

5.6         CONSTRUCTION

Contractor shall develop and implement construction inspection and test plans
and supporting construction procedures, and review and approve Subcontractor
source inspection plans.

Procedures for construction activities at Site shall be developed, reviewed and
approved by Contractor.

Where the Contractor’s inspector(s) identify or is informed of nonconforming
products or materials, Contractor may either replace such nonconforming products
or materials or repair the products or materials in accordance with Section
12.2A of the terms and conditions of the EPC Agreement.

5.7         SUBCONTRACTOR

Subcontractor quality plans and/or ITPs shall be reviewed and approved by
Contractor, and issued to Owner for review prior to commencement of the
applicable Work.

Contractor shall maintain records of qualified special processes, Construction
Equipment and Contractor personnel.

Subcontractor construction execution performance shall be monitored through
regular progress meetings between Contractor and Subcontractors. Subcontractor
quality audits shall be performed by Subcontractors. Contractor may conduct
quality audits on Subcontractors work in accordance with the Contractor’s
internal quality audit schedule to evaluate their quality plan implementation.

6.0         MEASUREMENT, ANALYSIS AND IMPROVEMENT

The Project quality manager shall be responsible for defining, planning,
documenting and implementing a system to monitor, measure, and analyze the Key
Performance Indicators, as appropriate for the various stages of the Project.

Contractor quality personnel shall have well-defined responsibilities,
qualifications, authority, and organizational freedom to identify quality
concerns and non-conformance, and to initiate, recommend, and implement
corrective actions.

6.1         INTERNAL QUALITY AUDIT

Contractor shall include an internal quality audit plan and schedule as part of
the Project Quality Plan.

Contractor shall perform internal quality audits to measure the compliance to
work processes.

Internal quality audits shall be executed by quality auditors not directly
responsible for the Work being audited and the auditors shall be qualified in
auditing and competent in the area(s) being audited.

Y-5

 

Contractor shall investigate root causes where Contractor deems appropriate in
accordance with the Quality Plan and initiate corrective actions for
non-compliances identified in each internal quality audit. Contractor shall
verify implementation and closeout of corrective actions.

Contractor shall notify Owner [***] ([***]) Days prior to any internal quality
audit. Quality audit reports, corrective actions and close out documentation
shall be made available to Owner for review, upon request.

6.2         IMPROVEMENT

Contractor procedures for continual improvement shall capture measurement,
analysis, and improvement of the KPIs and objectives.

6.2.1      Corrective Action

Contractor is responsible for (i) maintaining a list of internal quality audit
non-compliances and Corrective Action Requests (“CARs”), (ii) monitoring
responses and the timely close-out and completion of the internal quality audit
non-compliances and (iii) including the status of open internal quality audit
non-compliances and CARs as part of the Monthly Progress Report.

6.2.2      Preventive Action

Contractor procedures for preventive actions shall describe the requirements for
evaluating the need for additional mitigation actions to prevent occurrence of
previous lessons learned.

 

 

 

Y-6

 

ATTACHMENT Z

SITE PLAN

The parcels of land where the Facility and Expanded Facility shall be located is
shown below in Figure 1 and in Schedule Z-1. Site does not include the
restricted areas designated.

After Substantial Completion of Train 1, the “Site” does not include the parcels
of land on which such Train is located after such Train achieves Substantial
Completion.

Owner may reduce the size of the Site by removing areas from the Site where
future trains 4, 5, and 6 will be located as long as Owner provides Contractor
with a reasonable alternative for its laydown areas.  Such reduction shall be
captured in a mutual Change Order.

[***]

 

Figure 1 - Rio Grande LNG Site Plan

 

Z-1

 

 

ATTACHMENT AA

FORM OF ACKNOWLEDGMENT AND CONSENT AGREEMENT WITH LENDER

Date:  [__]

Bechtel Oil, Gas and Chemicals, Inc. (“Contracting Party”) hereby acknowledges
the existence of (but has not reviewed) the [Security Agreement, dated as of
[__] (as from time to time amended, supplemented or modified, the “Security
Agreement”), among [Rio Grande LNG, LLC] (the “Borrower”) and [__], as
collateral agent (in such capacity, the “Collateral Agent”) for the benefit of
various financial institutions providing financing to the Borrower
(collectively, the “Secured Parties”)], and hereby executes this Acknowledgement
and Consent Agreement (this “Consent”) and agrees as follows:

1.     The Contracting Party hereby acknowledges and consents in accordance with
the terms and conditions set forth below to the Borrower’s pledge and collateral
assignment of all its right, title and interest in, to and under that certain
Fixed Price Turnkey Agreement for the Engineering, Procurement and Construction
of Trains 1 and 2 of the Rio Grande Natural Gas Liquefaction Facility, dated as
of May 24, 2019, between the Contractor and [the Borrower] (the “Assigned
Agreement”) to the Collateral Agent pursuant to the Security Agreement.
Capitalized terms used, but not otherwise defined, herein shall have the
respective meanings ascribed to such terms in the Assigned Agreement.

2.     The Contracting Party represents and warrants as of the date hereof as
follows:

(a)          The Contracting Party is a corporation duly organized, validly
existing and in good standing under the laws of Delaware, is authorized and
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a material adverse effect on its financial condition,
operations, prospects, taxes or business.

(b)          The Contracting Party is not in violation of any Applicable Law or
judgment entered by any Governmental Instrumentality, which violations,
individually or in the aggregate, would affect its performance of any
obligations under this Consent or the Assigned Agreement in any material
respect. There are no legal or arbitration proceedings or any proceeding by or
before any Governmental Instrumentality, now pending or (to the current actual
knowledge of the Contracting Party) threatened against the Contracting Party
that, if adversely determined, could reasonably be expected to have a material
adverse effect on its ability to perform under this Consent or the Assigned
Agreement.

(c)          The Contracting Party is the holder of all licenses, other than
Ordinary Course Consents (as defined below), required to permit it to operate or
conduct its business in Texas, and each other jurisdiction in which the nature
of the business conducted by it makes such licenses necessary, now and as
contemplated by the Assigned Agreement. No consent or approval of, or other
action by or any notice to or filing with, any Governmental Instrumentality
(except those previously obtained) was required in connection with the execution
and delivery by the Contracting Party of the Assigned Agreement, or to the
current actual knowledge of the Contracting Party, is required in connection
with the execution and delivery of this Consent, or the performance of its
obligations under this

 

 

 

 

Consent. The Contracting Party has obtained all permits, licenses, approvals,
consents and exemptions with respect to the performance of its obligations under
the Assigned Agreement required by Applicable Law in effect as of the date
hereof, except those permits, licenses, approvals, consents and exemptions that
the Contracting Party is permitted to obtain in the ordinary course of business
in the performance of its obligations under the Assigned Agreement
(collectively, the “Ordinary Course Consents”).

(d)          Neither the execution and delivery of this Consent and the Assigned
Agreement by the Contracting Party, the consummation of the transactions herein
contemplated by the Contracting Party, nor compliance with the terms and
provisions hereof by the Contracting Party, will:

(i)          conflict with, result in a breach of or default under, or require
any consent (other than consents already obtained and the Ordinary Course
Consents) under: (A) the charter or by-laws of the Contracting Party, (B) any
Applicable Law, (C) any order, writ, injunction or decree of any court
applicable to the Contracting Party, or (D) any agreement or instrument to which
the Contracting Party is a party or by which it is bound or to which it or any
of its property or assets is subject in any such case under this clause (i) that
would result in a material adverse effect upon the ability of the Contracting
Party to perform its obligations under this Consent and the Assigned Agreement;
or

(ii)         result in the creation or imposition of (or the obligation to
create or impose) any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Contracting Party.

(e)          The Contracting Party has all necessary power and authority to
execute, deliver and perform its obligations under this Consent and the Assigned
Agreement; the execution, delivery and performance by the Contracting Party of
this Consent and the Assigned Agreement have been duly authorized by all
necessary action on its part; and this Consent and the Assigned Agreement have
been duly and validly executed and delivered by the Contracting Party and each
constitutes a legal, valid and binding obligation of the Contracting Party
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization or moratorium or other
similar laws relating to the enforcement of creditors’ rights generally, and by
general principles of equity. There are no amendments, modifications or
supplements (whether by waiver, consent or otherwise) to the Assigned Agreement,
either oral or written.

(f)          The Contracting Party is financially solvent, able to pay all debts
as they mature and possesses sufficient working capital to guarantee the
completion of the Work under the Assigned Agreement and perform its obligations
hereunder.

(g)          To the Contracting Party’s current actual knowledge, the Borrower
(a) has complied with all conditions precedent required to be complied with by
or on behalf of the Borrower on or prior to the date hereof pursuant to the
Assigned Agreement and (b) is not in default under any covenant or obligation of
the Assigned Agreement and no such default has occurred prior to the date
hereof.

(h)          The Contracting Party is not, to its current actual knowledge, in
default under any covenant or obligation hereunder or under the Assigned
Agreement and no such default has

Page 2 of 10

 

occurred prior to the date hereof. After giving effect to the pledge and
assignment referred to in paragraph 1, and after giving effect to the consent to
such pledge and assignment by the Contracting Party, to the current actual
knowledge of the Contracting Party, (a) there exists no event or condition that
would, either immediately or with the passage of time or giving of notice, or
both, entitle the Contracting Party or the Borrower to terminate or suspend its
obligations under the Assigned Agreement, (b) all amounts due under the Assigned
Agreement as of the date hereof have been paid in full and (c) there are no
claims or rights of set-off pending by any party to the Assigned Agreement.

(i)          The Contracting Party affirms that it has no written notice or
current actual knowledge of any pledge or assignment relative to the right,
title and interest of the Borrower in, to and under the Assigned Agreement other
than the pledge and assignment referred to in paragraph 1.

3.

(a)          From and after the date hereof and unless and until the Contracting
Party shall have received written notice from the Collateral Agent that the lien
of the Security Agreement has been released in full and provided that an event
of default by the Borrower shall have occurred and be continuing pursuant to the
loan documents executed in connection with the Security Agreement, the
Collateral Agent shall have the right, but not the obligation, to pay all sums
due under the Assigned Agreement by the Borrower and to perform any other act,
duty or obligation required of the Borrower thereunder (to the same extent as
the Borrower has the right to perform any such other act, duty or obligation
thereunder) at any time and, without limiting the generality of the foregoing,
shall have the full right and power to enforce directly against the Contracting
Party following written notice to Contracting Party that the Collateral Agent is
exercising such rights and remedies (subject to all of the Contracting Party’s
defenses and other rights under the Assigned Agreement in accordance with the
terms thereof) all obligations of the Contracting Party under the Assigned
Agreement and otherwise to exercise all remedies thereunder and to make all
demands and give all notices and make all requests required or permitted to be
made by the Borrower under the Assigned Agreement, all in accordance with the
terms thereof; provided that no such payment or  performance shall be construed
as an assumption by the Collateral Agent or any Secured Party of any covenants,
agreements or obligations of the Borrower under or in respect of the Assigned
Agreement, except to the extent the Assigned Agreement shall have been expressly
assumed by the Collateral Agent pursuant to paragraph 5 hereof. Any action taken
by the Collateral Agent pursuant to this paragraph 3(a) in accordance with the
Security Agreement shall be binding on the Borrower.  If the Contracting Party
receives any demands, notices or requests made from the Collateral Agent in
accordance with this paragraph 3(a) which are conflicting with that made by the
Borrower, the Collateral Agent’s demands, notices and requests shall control
over those conflicting demands, notices or requests made by the Borrower.

(b)          The Contracting Party agrees that it will not terminate or suspend
its obligations under the Assigned Agreement without giving the Collateral Agent
concurrent notice with notice(s) provided the Borrower pursuant to the
applicable provisions of the Assigned Agreement, and, in the case of the
termination of obligations, an opportunity to cure as provided in paragraph 3(c)
below.

Page 3 of 10

 

(c)          If (i) the Contracting Party is entitled to terminate the Assigned
Agreement pursuant to the terms of such Assigned Agreement (“Termination
Event”), (ii) the Contracting Party desires to terminate its obligations under
the Assigned Agreement, and (iii) notice(s) with respect to clauses (i) and (ii)
shall have been provided to the Collateral Agent by the Contracting Party as
provided in paragraph 3(b) above, then, and in any such case: the Collateral
Agent may elect to exercise its right to cure by providing, within [***] days
after the receipt by it of the notices referred to in the preceding clause
(iii), to the Contracting Party, written notice stating that the Collateral
Agent has elected to exercise such right to cure (or cause to be cured),
together with a written statement of the Collateral Agent that it will promptly
commence to cure (or cause to be cured) all Termination Events susceptible of
being cured (including, as appropriate, by the payment of money damages), and
that it will, during the cure period, diligently attempt in good faith to
complete (or cause to be completed) the curing of all such Termination Events to
the reasonable satisfaction of Contracting Party. If the Contracting Party is
entitled to suspend performance of the Work for an event under Section 16.4 of
the Assigned Agreement (“Suspension Event”), the Contracting Party may, provided
that notice to the Collateral Agent shall have been provided to the Collateral
Agent as provided in paragraph 3(b) above, suspend performance of the Work in
accordance with the terms  of the Assigned Agreement until such time as (a) the
Borrower has cured the Suspension Event or (b) the Collateral Agent has cured
(or caused to be cured) such Suspension Event in accordance with paragraph 3(d).
The preceding sentence shall in no way limit any rights the Contracting Party
may otherwise have to terminate the Assigned Agreement, subject to the other
provisions of this Consent. Notwithstanding anything to the contrary in this
paragraph 3(c), in no event shall this paragraph 3(c) be interpreted to change
the Contracting Party’s rights to suspend performance of the Work under the
Assigned Agreement or terminate the Assigned Agreement, except to the extent of
the Collateral Agent’s right to effect a cure in accordance with paragraph 3(c)
for a Termination Event or Suspension Event and paragraph 3(d) for a Termination
Event.

(d)          The Collateral Agent shall have a period equal to [***] in the
event of default in payment of undisputed amounts under the Assigned Agreement
or [***]  ([***]) days in other cases, after the delivery of the notice by the
Collateral Agent referred to in paragraph 3(c) in which to cure the Termination
Event(s) specified in such notice; provided that if such cure of any non-payment
default can only be effected through a foreclosure on the Project (as defined in
the Security Agreement), then the Collateral Agent shall have such additional
reasonable period of time as is necessary to effect such foreclosure and
provided further that the Contracting Party shall have been provided assurances
of payment and security for payment reasonably satisfactory to the Contracting
Party. Notwithstanding the foregoing, no such cure of a payment shall be
construed as an assumption by the Collateral Agent or any Secured Party of any
covenants, agreements or obligations of the Borrower under or in respect of the
Assigned Agreement.

(e)          If, before the Collateral Agent shall have cured any Termination
Event pursuant to paragraph 3(d), the Borrower shall have cured such Termination
Event, the Contracting Party promptly shall provide the Collateral Agent with
notice of such cure and the discontinuance of such Termination Event.

Page 4 of 10

 

(f)          In the event any delay and incremental costs are due and payable to
the Contracting Party under the terms of this Consent, the Contracting Party
shall take, without prejudice to its rights under the Assigned Agreement for
change relief, commercially reasonable steps necessary to mitigate such delay
and incremental costs.

4.

(a)          Notwithstanding any provision in the Assigned Agreement to the
contrary, in the event of the rejection or termination of the Assigned Agreement
by a receiver of the Borrower or otherwise pursuant to bankruptcy or insolvency
proceedings, then the Contracting Party will enter into a new agreement with the
Collateral Agent or, at the Collateral Agent’s request, with the Collateral
Agent’s nominee, effective as of the date of such rejection, with substantially
the same covenants, agreements, terms, provisions and limitations as are
contained in such Assigned Agreement; provided that the Collateral Agent shall
have made a request to the Contracting Party for such new agreement within [***]
 ([***]) days in the event of default in payment of undisputed amounts under the
Assignment Agreement or [***]  ([***]) days after the date the Collateral Agent
receives notice from the Contracting Party of the rejection of the Assigned
Agreement and provided further that the Contracting Party shall have been
provided assurances of payment and security for payment reasonably satisfactory
to the Contracting Party.

(b)          If the Collateral Agent or its nominee is prohibited by any process
or injunction issued by any court having jurisdiction of any bankruptcy or
insolvency proceeding involving the Borrower, from continuing the Assigned
Agreement in place of the Borrower or from otherwise exercising any of its
rights or remedies hereunder or under the Security Agreement in respect of the
Assigned Agreement, then the times specified herein for the exercise by the
Collateral Agent of any right or benefit granted to it hereunder (including
without limitation the time period for the exercise of any cure rights granted
hereunder) shall be extended for  the period of such prohibition; provided that
the Collateral Agent is diligently pursuing such rights or remedies (to the
extent permitted) in such bankruptcy or insolvency proceeding or otherwise and
provided further that the Contracting Party shall have been provided assurances
of payment and security for payment reasonably satisfactory to the Contracting
Party.

5.     The Collateral Agent shall provide Contracting Party with notice, within
[***] ([***]) Business Days of the event, if there is an event of default by
Borrower shall have occurred under the applicable loan documents executed in
connection with the Security Agreement or the Collateral Agent otherwise refuses
to fund a draw or payment under  such loan documents; provided, however, that
such notice shall not grant Contracting Party a right to suspend performance of
the Assigned Agreement before any of the conditions set forth in Section 16.4
thereof have been satisfied or waived.  Provided that an event of default by
Borrower shall have occurred and be continuing pursuant to the loan documents
executed in connection with the Security Agreement, the Contracting Party agrees
that the Collateral Agent may (but shall not be obligated to) pursuant to the
terms of the Security Agreement assume, or cause any purchaser at any
foreclosure sale or any assignee or transferee under any instrument of
assignment or transfer in lieu of foreclosure to assume, all of the interests,
rights and all of the obligations of the Borrower thereafter arising under the
Assigned Agreement, provided that as conditions precedent to or concurrent with
any such assignment or transfer, (a) the Collateral Agent shall have made or
caused to be made payment to the Contracting Party of all sums due hereunder or
the Assigned Agreement and, subject to

Page 5 of 10

 

paragraph 3(f) hereof, all reasonably delay and incremental costs incurred by
the Contracting Party during the period of time preceding the assignment or
transfer, and (b) the assuming party shall have executed an agreement in writing
to be bound by and to assume all of the obligations to the Contracting Party
arising or accruing thereunder from and after the date of such assumption, and
shall have provided the Contracting Party with assurances of future payment and
security for future payment reasonably satisfactory to the Contracting Party. If
the interests, rights and obligations of the Borrower in the Assigned Agreement
shall be assumed, sold or transferred as provided herein, then the Contracting
Party shall continue to perform its obligations under such Assigned Agreement in
favor of the assuming party as if such party had thereafter been named as the
Borrower under such Assigned Agreement, provided that if the Collateral Agent
(or any entity acting on behalf of the Collateral Agent or any of the other
Secured Parties) or such assuming party, as applicable, assumes the Assigned
Agreement as provided above, such party shall not be liable for the performance
of the obligations thereunder except to the extent of all of its rights, title,
and interest in and to the Project (as defined in the Security Agreement).
Notwithstanding any such assumption or disposition by the Collateral Agent, a
purchaser, an assignee or a transferee, the Borrower shall not be released or
discharged from and shall remain liable for any and all of its obligations to
the Contracting Party arising or accruing under such Assigned Agreement prior to
such assumption and the Contracting Party retains all rights under such Assigned
Agreement relating to any breach thereof by the Borrower or the assuming party.

6.     The Contracting Party shall make all payments due to the Borrower under
the Assigned Agreement to [__], acting as the Collateral Agent to Account No.
[__], ABA No. [__]. All parties hereto agree that each payment by the
Contracting Party to the Collateral Agent of amounts due to the Borrower from
the Contracting Party under the Assigned Agreement shall satisfy the Contracting
Party’s corresponding payment obligation under the Assigned Agreement.

7.     The Contracting Party shall not agree to amend or modify the Assigned
Agreement in any material respect, and shall not  be required to enter into any
Change Order in excess of [***] for any single Change Order or in excess of
[***] in the case of a Change Order in conjunction with other Change Orders,
unless the Contracting Party has received a duly executed certificate of an
authorized officer of the Borrower that such amendment, modification or Change
Order, as applicable, is (i) permitted under the loan documents executed in
connection with the Security Agreement or (ii) permitted on the basis of the
prior written consent of the Collateral Agent obtained by the Borrower.  The
Contracting Party may rely on such certificate and may waive the requirement of
a certificate with respect to Change Orders. Nothing herein shall prejudice the
Contracting Party’s right to a Change Order under the Assigned Agreement.

8.     The Contracting Party shall deliver to the Collateral Agent concurrently
with the delivery thereof to the Borrower, a copy of the following items if and
when provided by the Contracting Party to the Borrower pursuant to the Assigned
Agreement: (a) notification prior to cancellation, non-renewal or a material
change in the insurance coverage required under the terms of the Assigned
Agreement; (b) notification of termination; (c) notification of suspension of
all of the Work; (d) notification of default by the Borrower; (e) notification
of claims, demands, actions or causes of actions asserted against the
Contracting Party for which the Borrower has indemnification obligations; and
(f) notification of request for arbitration.

9.     The Contracting Party shall provide to the Collateral Agent any
information or documentation as reasonably requested by the Collateral Agent in
connection with the financing of the Borrower’s obligations under the Assigned
Agreement including, without limitation, the following: (a) an

Page 6 of 10

 

opinion of counsel of the Contracting Party customary for a project financing
with respect to the authorization, execution, delivery and enforceability, and
other similar issues, of the Assigned Agreement and this Consent; (b) a
certificate of an authorized officer of the Contracting Party certifying that
(i) all amounts due and payable under the Assigned Agreement have been paid
other than those amounts payable in respect of the current invoice and (ii) no
event or condition exists to the Contracting Party’s current actual knowledge
which constitutes a default by the Borrower under the Assigned Agreement; and
(c) a copy of a certificate of good standing of, and payment of franchise taxes
by, the Contracting Party issued by the Secretary of State of Delaware.

10.     Notice to any party hereto shall be deemed to be delivered on the
earlier of: (a) the date of personal delivery and (b) if deposited in a United
States Postal Service depository, postage prepaid, registered or certified mail,
return receipt requested, addressed to such party at the address indicated below
(or at such other address as such party may have theretofore specified by
written notice delivered in accordance herewith), upon delivery or refusal to
accept delivery, in each case as evidenced by the return receipt:

The Collateral Agent:

[__]

[__]

Facsimile: [__] Attn: [__]

The Borrower:

[__]

[__]

Facsimile: [__] Attn: [__]

The Contracting Party:

[__]

[__]

Facsimile: [__] Attn: [__]

11.   This Consent shall be binding upon and shall inure to the benefit of the
respective successors and permitted assigns of the Contracting Party, the
Borrower, the Collateral Agent and the Secured Parties (provided, however, that
the Contracting Party shall not assign or transfer it rights hereunder without
the prior written consent of the Collateral Agent).

12.   This Consent may be executed in one or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Consent shall become effective at such time as the Collateral Agent shall
have received counterparts hereof signed by all of the intended parties hereto.
Neither this Consent nor any of the terms hereof may be terminated, amended,
supplemented, waived or modified except by an instrument in writing signed by
the Contracting Party, the Borrower and the Collateral Agent.

13.   For purposes of this Consent, the term “day” or “days” shall mean calendar
days unless otherwise defined herein.

14.   No failure on the part of any party or any of its agents to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
power or privilege hereunder shall operate as a waiver thereof (subject to any
statute of limitations), and no single or partial exercise of any right,

Page 7 of 10

 

power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right power or privilege.

15.   If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (a) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed to carry out the intentions of the parties hereto as nearly
as may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.

16.   The agreements of the parties hereto are solely for the benefit of the
Contracting Party, the Borrower, the Collateral Agent and the Secured Parties,
and no Person (other than the parties hereto and the Secured Parties and their
successors and assigns permitted hereunder) shall have any rights hereunder.

17.   This Consent shall terminate upon the indefeasible payment in full of all
amounts owed under any financing documents executed in connection with the
Security Agreement.

18.   THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS
THEREOF OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW. THE
CONTRACTING PARTY, THE COLLATERAL AGENT AND THE BORROWER HEREBY SUBMIT TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
CONSENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, EXCEPT FOR DISPUTES ARISING OUT
OF OR RELATING TO THE ASSIGNED AGREEMENT WHICH WILL CONTINUE TO BE GOVERNED
EXCLUSIVELY BY ARTICLE 18 OF THE ASSIGNED AGREEMENT. THE CONTRACTING PARTY, THE
COLLATERAL AGENT AND THE BORROWER IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT
ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.

19.   EACH OF THE CONTRACTING PARTY, THE COLLATERAL AGENT AND THE BORROWER
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS CONSENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

20.   NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT, NONE OF THE
CONTRACTING PARTY, THE COLLATERAL AGENT, NOR THE BORROWER, SHALL BE LIABLE UNDER
THIS CONSENT, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE), STRICT
LIABILITY, PRODUCTS LIABILITY, PROFESSIONAL LIABILITY, INDEMNITY, CONTRIBUTION,
OR ANY OTHER CAUSE OF ACTION FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
LOSSES OR DAMAGES, OR LOSS OF PROFITS, LOSS OF USE, LOSS OF OPPORTUNITY, LOSS OF
REVENUES, LOSS OF FINANCING, LOSS OR INCREASE OF BONDING CAPACITY, COSTS OF
OBTAINING OR MAINTAINING FINANCING, LOSS OF GOODWILL, OR

Page 8 of 10

 

BUSINESS INTERRUPTION, OR DAMAGES OR LOSSES FOR PRINCIPAL OFFICE EXPENSES
INCLUDING COMPENSATION OF PERSONNEL STATIONED THERE (“CONSEQUENTIAL DAMAGES”),
AND THE CONTRACTING PARTY, THE COLLATERAL AGENT, AND THE BORROWER DO HEREBY
RELEASE EACH OTHER FROM ANY LIABILITY FOR SUCH LOSSES AND DAMAGES; PROVIDED THAT
THE EXCLUSION OF LIABILITY SET FORTH IN THIS SECTION IS NOT INTENDED TO PRECLUDE
RECOVERIES AS PERMITTED PURSUANT TO SECTION 20.4 OF THE ASSIGNED AGREEMENT WITH
RESPECT TO OBLIGATIONS UNDER THE ASSIGNED AGREEMENT ONLY.

[Signature pages follow]

Page 9 of 10

 

 

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Consent as of the day and year first above
written.

 

 

[CONTRACTOR]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

[COLLATERAL AGENT]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

ACKNOWLEDGED and AGREED

 

 

 

[BORROWER]

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

Page 10 of 10

 

 

 

ATTACHMENT BB

RELY UPON INFORMATION

The following information shall be Rely Upon Information for the purposes of the
EPC Agreement:

[***]

Unless expressly referenced above, no other data, information or documentation
shall be Rely Upon Information.

 

 

BB-1

 

ATTACHMENT CC

NOT USED

 

 

CC-1

 

ATTACHMENT DD

OWNER PROVIDED LIST OF TAX EXEMPT AND TAXABLE EQUIPMENT

The below list shall be updated as part of the LNTP No. 1 scope.  Contractor
shall assist Owner on an ongoing basis to refine this Attachment DD.  Such
refinements shall be completed no later than [***] ([***]) months after NTP.

[***]

 

 

DD-1

 

ATTACHMENT EE

NOT USED

 

 

EE-1

 

ATTACHMENT FF

RELIEF FOR CHANGES IN U.S. TARIFFS AND DUTIES

[***]

 

 

FF-1

 

ATTACHMENT GG

ADDITIONAL WORK OPTIONS

At Owner’s sole discretion at any time prior to the Second NTP Deadline, Owner
may elect to have Contractor perform the following work for the corresponding
amount set forth in Attachment C:

·

LNG Storage Tank 3;

·

A second jetty; or

·

LNG truck loading.

These Additional Work Options are set out in more detail in the Scope of
Work.  Any Additional Work Options that Owner elects for Contractor to perform
shall become part of the Train 2 Work.  Contractor shall only perform Additional
Work Options pursuant to the requirements of Article 6 of the EPC Agreement.

 

 

GG-1

 

ATTACHMENT HH

LIST OF POST-SUBSTANTIAL COMPLETION INTERFERING WORK

The table below identifies Work to be undertaken for Train 2, after Substantial
Completion of Train 1, that may interfere with the commercial operation of Train
1.  Contractor shall perform such interfering Work as specified in Section 3.27
of the Agreement.

[***]

 

HH-1