EXECUTION VERSION

Exhibit 10.1

***
Indicates material omitted pursuant to a confidential treatment request. Such
material has been separately filed with the SEC.

LIMITED LIABILITY COMPANY AGREEMENT
OF
ELBA LIQUEFACTION COMPANY, L.L.C.
(A Delaware Limited Liability Company)
THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY AGREEMENT
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITY ACT OF 1933, AS
AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS. SUCH INTERESTS MAY NOT
BE SOLD, ASSIGNED, PLEDGED OR OTHERWISE DISPOSED OF AT ANY TIME WITHOUT
EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS (OR EXEMPTION THEREFROM) AND
WITHOUT COMPLIANCE WITH THE OTHER SUBSTANTIAL RESTRICTIONS ON TRANSFERABILITY
SET FORTH HEREIN.
CERTAIN OF THE COMPANY INTERESTS REPRESENTED BY THIS LIMITED LIABILITY COMPANY
AGREEMENT ARE SUBJECT TO CONDITIONS AND RESTRICTIONS ON TRANSFER SET FORTH
HEREIN, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF SUCH
INTERESTS UNLESS AND UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO
THE REQUESTED TRANSFER.

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EXECUTION VERSION

TABLE OF CONTENTS
 
 
Page No.
 
SECTION 1 DEFINITIONS
1

1.1
Definitions
 
1

SECTION 2 FORMATION
1

2.1
Formation
 
1

2.2
Name
 
2

2.3
Purposes
 
2

2.4
Principal Place of Business
 
2

2.5
Registered Agent and Registered Office
 
2

2.6
Term
 
3

2.7
Foreign Qualification
 
3

2.8
Powers of the Company
 
3

2.9
No State-Law Partnership
 
3

2.10
Title to Company Assets
 
3

2.11
Transaction Agreements
 
3

SECTION 3 REPRESENTATIONS AND WARRANTIES
5

3.1
SUSGP Representations and Warranties
 
5

3.2
SLC Representations and Warranties
 
6

SECTION 4 COMPANY MANAGEMENT AND RELATED MATTERS
8

4.1
Directors
 
8

4.2
Power of the Board
 
10

4.3
Officers and Other Agents
 
12

4.4
The Operator
 
15

4.5
Annual Budget
 
15

4.6
Accounting; Books and Records; Financial Statements
 
16

4.7
Tax Matters
 
17

4.8
Insurance
 
18

4.9
Bank Accounts
 
20

4.10
Other Activities of the Members and Their Affiliates
 
20

4.11
Interim Period Construction Management
 
21

SECTION 5 REGULATORY STATUS
22

5.1
Regulatory Status
 
22

5.2
Cooperation
 
22

SECTION 6 FINANCIAL MATTERS
22

6.1
Capital Contributions
 
22

6.2
No Reliance by Parties Extending Credit
 
29

6.3
Allocation of Profits and Losses
 
29

6.4
Distributions
 
32

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EXECUTION VERSION

SECTION 7 TRANSFER OF MEMBERSHIP INTEREST
32

7.1
General
 
32

7.2
Permitted Transfers and Right of First Refusal
 
34

7.3
Documentation; Validity of Transfer
 
38

7.4
Intentionally Omitted
 
39

7.5
Additional Members; Substituted Members
 
39

7.6
Fair Market Value
 
40

7.7
Distributions and Allocations Upon Transfers
 
40

7.8
Certificates
 
41

7.9
Additional Members/Directors
 
41

SECTION 8 EVENTS OF DISSOCIATION; WITHDRAWAL; DISSOLUTION
41

8.1
No Withdrawal or Dissolution
 
41

8.2
Dissolution Events
 
41

8.3
Winding Up
 
42

8.4
Options Prior to Dissolution upon Expiration or Termination of the LSA
 
43

8.5
No Deficit Capital Account Makeup Obligation
 
44

8.6
Deemed Contribution and Distribution
 
44

8.7
Limitations on Rights of Members
 
44

8.8
Certificate of Cancellation
 
44

8.9
Deficit Capital Accounts
 
44

SECTION 9 INVESTMENT REPRESENTATIONS OF THE MEMBERS
45

9.1
Investment Intent
 
45

9.2
Restrictions on Transfer
 
45

SECTION 10 CONFIDENTIALITY
45

10.1
Confidential Information
 
45

10.2
Remedies
 
46

10.3
Disclosure of Certain Information
 
46

10.4
Survival
 
46

SECTION 11 EXCULPATION AND INDEMNIFICATION
47

11.1
Exculpation
 
47

11.2
Indemnification by Company
 
47

11.3
Nonexclusivity
 
47

11.4
Indemnification by Members
 
48

11.5
Authorization
 
48

11.6
Survival
 
48

11.7
Other Proceedings
 
48

SECTION 12 DEADLOCKS; DISPUTE RESOLUTION
49

12.1
Board Deadlocks and Disputes
 
49

12.2
Applicability
 
51

12.3
Limitation on Liability
 
51

12.4
Litigation
 
52

12.5
Effect of Board Deadlocks
 
52

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EXECUTION VERSION

SECTION 13 BUSINESS AND HSSE PRINCIPLES
53

13.1
HSSE
 
53

13.2
Business Conduct Standards
 
53

13.3
Manual of Technical Design, HSSE and Operating Standards
 
53

SECTION 14 MISCELLANEOUS
54

14.1
Notices
 
54

14.2
Binding Effect
 
55

14.3
Entire Agreement
 
55

14.4
Construction
 
55

14.5
Amendment
 
55

14.6
Waivers
 
55

14.7
Headings
 
56

14.8
Severability
 
56

14.9
Incorporation by Reference
 
56

14.10
Further Action
 
56

14.11
Governing Law
 
56

14.12
Waiver of Action for Partition
 
56

14.13
No Third Party Beneficiaries
 
56

14.14
Expenses
 
56

14.15
Counterpart Execution
 
57

Attachments:
 
Exhibit A
Definitions
Exhibit B
Insurance Requirements
Schedule 1
Member’s Names and Membership Interests
Schedule 2.1
Directors by Member
Schedule 2.2
Officers
Schedule 3
ELC Facilities
Schedule 4
Policies
Schedule 4.1
Statement of HSSE Policy
Schedule 4.2
HSSE Management System and Policy
Schedule 4.3
Business Principles
Schedule 4.4
Statement of Risk Management
Schedule 4.5
Treasury Policy
Schedule 4.6
Compliance with Anti-Bribery Laws
Schedule 4.7
Social Performance Policy

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EXECUTION VERSION

LIMITED LIABILITY COMPANY AGREEMENT OF
ELBA LIQUEFACTION COMPANY, L.L.C.

THIS LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of ELBA LIQUEFACTION
COMPANY, L.L.C. (the “Company”) is made and entered into as of the 25th day of
January, 2013, by and between SOUTHERN LIQUEFACTION COMPANY, LLC, a Delaware
limited liability company (“SLC”), and SHELL US GAS & POWER LLC, a Delaware
limited liability company (“SUSGP”), each of which is a Member as more
specifically reflected herein.

RECITALS

WHEREAS, SLC and SUSGP as the original members of the Company wish to establish
the Company in the form of a limited liability company under the Act for the
purposes described herein; and
WHEREAS, the Members seek herein to establish the terms and conditions under
which the Company will operate and pursue its business interests; and
WHEREAS, SLNG (herein defined) will be the Operator of the Company and the
Operator of its assets, including the ELC Facilities (as defined herein).
In consideration of the mutual promises and agreements set forth herein, the
value, sufficiency and receipt of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
SECTION 1
DEFINITIONS
1.1    Definitions. The capitalized words and phrases set forth on Exhibit A
hereto, and the capitalized words and phrases defined elsewhere in this
Agreement, have the indicated meanings for purposes of this Agreement. Where the
context so indicates, the masculine shall include the feminine and neuter and
the singular will include the plural and vice versa. If a word or phrase is
defined, its other grammatical forms will have a corresponding meaning
consistent with the defined term. With respect to the determination of any
period of time, “from” shall mean “from and including,” and “to” shall mean “to
but excluding,” and “through” shall mean “through and including.”
SECTION 2
FORMATION
2.1    Formation. It shall be a condition precedent to the obligations of SUSGP
under this Agreement (other than those provisions herein expressly designated as
surviving termination) that the execution of this Agreement has been supported
by the governing body of Royal Dutch Shell plc (“Shell Board”) on or before
January 31, 2013; provided, however, notwithstanding anything in this or any
other agreement between the Parties or any of their Affiliates, the Shell Board
shall

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EXECUTION VERSION

have full, unfettered, and unconditional discretion in electing whether to
support or not support such execution. Any failure of satisfaction of the
condition precedent set forth in this Section 2.1 shall be without any liability
whatsoever to Royal Dutch Shell plc or any of its Affiliates. In the event the
Shell Board supports this Agreement, SUSGP will issue a notice (the “Notice of
Effective Date”) to SLC certifying that this condition precedent has been
satisfied and the Effective Date of this Agreement. In the event SUSGP fails to
deliver the Notice of Effective Date on or prior to 11:59 p.m. U.S. Central Time
on January 31, 2013 then this Agreement shall terminate automatically at such
time (except for clauses expressly designated as surviving termination), and the
Parties expressly assume the risk of the non-occurrence of this condition
precedent and disclaim any basis for detrimental reliance on the prospect of
entering into this Agreement. Each Party further waives its right to bring any
and all action at law or in equity arising out of or in relation to the failure
of satisfaction of the condition precedent set forth in this Section 2.1 and any
related termination of any of the Transaction Agreements. The Company shall be
formed on the Effective Date and this Agreement shall become effective on such
formation by filing the certificate of formation (the “Certificate”) with the
Delaware Secretary of State pursuant to the Act. The rights and liabilities of
the Members are as provided in the Act, except as otherwise set forth herein.
The Members shall, when required, execute and file such amendments to or
restatements of the Certificate in such public offices in the State of Delaware
or elsewhere as the Members deem advisable to give effect to the provisions of
this Agreement and the Certificate, and to preserve the status of the Company as
a limited liability company.
2.2    Name. The name of the Company shall be “Elba Liquefaction Company,
L.L.C.”, and all business of the Company shall be conducted in such name or in
any other name or names that are selected by the Board. If the Company does
business under a name other than as set forth under this Section 2.2, the Board
will file or cause to be filed as assumed name or fictitious name certificate or
any other document as required by applicable law in appropriate jurisdictions,
and the Members will execute such certificates, documents, or other writings as
may be reasonably requested by the Board in connection therewith.
2.3    Purposes. The purposes of the Company shall be to receive and liquefy
natural gas, and to deliver such liquefied natural gas (“LNG”) to the SLNG Elba
Island LNG Terminal located in Chatham County, Georgia, (“Elba Terminal”) for
storage, export, vaporization or other delivery at or from the Elba Terminal and
to fund, develop, construct and operate the liquefaction facilities necessary to
perform such business and to conduct such other business activities as are
necessary or incidental in connection thereto.
2.4    Principal Place of Business. The principal place of business of the
Company will be: Colonial Brookwood Center, 569 Brookwood Village, Suite 749,
Birmingham, AL 35209. The Company may have such other offices as the Board may
designate from time to time.
2.5    Registered Agent and Registered Office. The registered office of the
Company in the State of Delaware shall be located at The Corporation Trust
Center, 1209 Orange Street, New Castle County, Wilmington, Delaware 19801. The
initial registered agent for service of process at the registered office of the
Company in Delaware shall be The Corporation Trust Company.

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EXECUTION VERSION

2.6    Term. The Company commenced on the date of the filing of the Certificate
of Formation with the Delaware Secretary of State and will continue in
perpetuity, unless its existence is sooner terminated or dissolved in accordance
with either the provisions of this Agreement or the Act.
2.7    Foreign Qualification. Prior to the Company conducting business in any
jurisdiction other than Delaware, the Members shall cause the Company to comply,
to the extent procedures are available and those matters are reasonably within
the control of the Members, with all requirements necessary to qualify the
Company as a foreign limited liability company in that jurisdiction. Each Member
shall execute, acknowledge and swear to, and deliver all certificates and other
instruments conforming with this Agreement that are necessary or appropriate to
qualify, continue, and terminate the Company as a foreign limited liability
company in all such applicable jurisdictions in which the Company may conduct
business.
2.8    Powers of the Company. Subject to the provisions of this Agreement, the
Company will have the power to take all actions and engage in all activity
necessary, desirable, or convenient to carry out the purposes of the Company to
the extent the same may be legally exercised by limited liability companies
under the Act.
2.9    No State-Law Partnership. The Members intend that the Company and the
relationship between the parties hereto not constitute a partnership (including,
without limitation, a limited partnership) or joint venture or similar
arrangement, and that no Member be a partner or joint of any other Member as a
result of this Agreement, for any purposes other than federal and state tax
purposes, and this Agreement may not be construed to suggest otherwise.
2.10    Title to Company Assets. Title to the Company’s assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Company as an entity. All Company assets shall be recorded as the
property of the Company, in its books and records, irrespective of the name in
which record title to such Company assets is held or constructed.
2.11    Transaction Agreements. Either simultaneously with the execution of this
Agreement or within one hundred and eighty (180) days of the Effective Date:
(a)    the Company and SNG Pipeline Services Company, L.L.C will enter into a
Technical Services Agreement (the “KM TSA”), pursuant to which, subject to the
terms and conditions thereof, SNG Pipeline Services Company, L.L.C or its
Affiliate will provide employees to provide services in connection with the
design and construction of the ELC Facilities and provide advisory services to
the Company during design and construction of the ELC Facilities;
(b)    the Company and Shell Global Solutions (US) Inc. or its Affiliate will
enter into a Technical Services Agreement (the “Shell TSA”) pursuant to which,
subject to the terms and conditions thereof, Shell Global Solutions (US) Inc. or
its Affiliate will provide secondees or employees to Company to provide services
in connection with the design and construction of the ELC Facilities and provide
advisory services to the Company during design and construction of the ELC
Facilities;

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EXECUTION VERSION

(c)    the Company and SLNG will enter into the Maintenance, Administrative and
Operating Agreement (the “MAO”), pursuant to which, subject to the terms and
conditions thereof, SLNG will be responsible for operating, managing and
administering the operations of the Company, including the ELC Facilities, upon
completion of construction;
(d)    Shell Global Solutions (US) Inc. or its Affiliate and SLNG will enter
into an Operating Services Agreement (“OSA”) pursuant to which Shell Global
Solutions (US) Inc. or its Affiliate will provide advisory services to SLNG with
respect to SLNG’s operation of the ELC Facilities;
(e)    the Company and Shell NA LNG LLC, a Delaware limited liability company
(“SNALNG”) will enter into a service agreement (the “LSA”) under which the
Company will provide liquefaction of natural gas on behalf of SNALNG and SNALNG
will pay Company a certain rate and certain variable charges for a specified
amount of liquefaction capacity and the LSA will include general terms and
conditions applicable to the services to be performed;
(f)    Southern Natural Gas Company, L.L.C., a Delaware limited liability
company, as operator of the Twin 30s Pipelines, and the Company will enter into
an Interconnect Agreement (the “Interconnect Agreement”), pursuant to which,
subject to the terms and conditions thereof, the parties will provide the terms
and conditions for the design, construction and operations of the
interconnecting facilities to allow for the use of the ELC Facilities;
(g)    the Company and SLNG will enter into an Terminal Interconnect Agreement
(the “Terminal Interconnect Agreement”), pursuant to which, subject to the terms
and conditions thereof, the parties will provide the terms and conditions for
the design, construction, installation, operation, and ultimate disconnection of
the interconnecting facilities to allow for the use of the ELC Facilities;
(h)    SLNG and the Company will enter into a Land Lease (the “Land Lease”),
pursuant to which, subject to the terms and conditions thereof, the parties will
provide the terms and conditions for the Company to compensate SLNG for the use
of certain SLNG facilities and land use at the Elba Terminal in conjunction with
the ELC Facilities;
(i)    the Company and SUSGP or its Affiliate will enter into a Purchase
Agreement for the MMLS Units (the “MMLS Unit Purchase Agreement”), pursuant to
which, subject to the terms and conditions thereof, the Company will acquire the
MMLS Units for the Phase I ELC Facilities and, the Phase II ELC Facilities, if
applicable, as further described in Section 6.1(k);
(j)    the Integrated Project Oversight Team Agreement (the “IPOT Agreement”)
between the Company, SLNG, EEC and SUSGP or its Affiliate to form and define the
role of the IPOT with respect to the Project.
As used herein, the term “Transaction Agreements” shall individually or
collectively refer to the KM TSA, the Shell TSA, MAO, OSA, LSA, Interconnect
Agreement, Terminal Interconnect Agreement, Land Lease, IPOT Agreement and MMLS
Unit Purchase Agreement. The Members

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EXECUTION VERSION

hereby ratify, confirm and approve the Company entering into, and performing its
obligations under, each Transaction Agreement entered into on the Effective
Date.
SECTION 3
REPRESENTATIONS AND WARRANTIES
3.1    SUSGP Representations and Warranties. SUSGP represents and warrants to
SLC and to the Company that:
(a)    SUSGP is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware, and it has all
corporate power and authority necessary to carry on its business as it is now
being conducted, to enter into this Agreement, to own a membership interest in
the Company, and to perform its obligations hereunder.
(b)    All corporate and other proceedings and consents required to be taken by
or on behalf of SUSGP to authorize it to enter into and carry out this Agreement
have been duly taken, and this Agreement has been duly executed and delivered
by, and constitutes a legal, valid and binding obligation of, SUSGP, enforceable
against SUSGP in accordance with its terms, except (i) as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors’
rights generally, and (ii) to the extent that equitable remedies, such as
injunctive relief or specific performance, are within the discretion of courts
of competent jurisdiction.
(c)    The execution and delivery of this Agreement, the performance by SUSGP of
its terms, and the consummation of the transactions contemplated hereby, will
not result in any violation of, conflict to or default or loss of a benefit
under, or permit the acceleration of any obligation under, (i) the articles of
incorporation, certificate of formation, bylaws or other charter document of
SUSGP, (ii) any contract, agreement or commitment of SUSGP, or (iii) any permit,
concession, grant, franchise, license, judgment, order, injunction, decree,
statute, law, ordinance, rule or regulation applicable to SUSGP or to its
properties, in each case other than such conflicts, violations, defaults or
losses which do not and will not, individually or in the aggregate, have a
material adverse effect on the business or financial condition of SUSGP or on
the ability of SUSGP to perform its obligations hereunder.
(d)    Except for the filing of the Certificate of Formation, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority remains to be obtained or made in connection
with the execution and delivery of this Agreement by SUSGP or the consummation
by SUSGP of the transactions contemplated hereby.
(e)    There is no litigation, claim, proceeding or investigation of any nature
pending or, to SUSGP’s knowledge, threatened against or affecting SUSGP or any
of its Affiliates that would materially interfere with its ability to fully
perform its obligations under this Agreement. As used in this Section 3.1(e), a
litigation claim, proceeding or investigation shall be “threatened” if a
specific potential claimant has overtly manifested to SUSGP an awareness of and
present intention to assert or commence such litigation, claim, proceeding or
investigation on the basis of specified facts and theories.

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EXECUTION VERSION

(f)    All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by SUSGP or its Affiliates directly
with SLC, SLNG or their Affiliates thereof and without the intervention of any
agent, broker or Person who, either as a result of any act of SNALNG or
otherwise to the knowledge of SUSGP, has or will have a valid claim against any
of the Company, SUSGP, SLNG or their Affiliates for a finder’s fee, brokerage
commission or other like payment with respect to this Agreement or in connection
with the commercial transactions to be carried out by the Company hereunder.
(g)    SUSGP has funds available to it in amounts sufficient to enable it to
effect the initial capital contribution in accordance with Section 6.1. As of
the Effective Date, SUSGP has no reason to believe that it will not be able to
satisfy on a timely basis any of its obligations contained in this Agreement.
(h)    SUSGP hereby represents and warrants to the Company and other Members
hereunder that its acquisition of its Membership Interest is made for its own
account for investment and commercial purposes only and not with an intent to
resell its Membership Interest to third party investors. SUSGP acknowledges that
the Membership Interests have not been registered under the Act or applicable
state securities laws and that it has no present intention to do so. SUSGP
acknowledges that it understands the nature of the investment being made by
Members hereunder and that the Company as a newly organized Entity has no
history of operations or earnings such that there is a certain degree of risk
associated with the commercial transactions to be carried out by the Company
hereunder.
(i)    SUSGP represents and warrants that it will comply with all laws in
conjunction with its participation as a Member or the Company or as a party to
any Related Agreement hereto and that neither it nor any of its respective
Affiliates, officers, director, employees, consultants, agents or
representations will make any prohibited payment in conjunction with or
otherwise affecting the business or operations of the Company or any Subsidiary
thereto.
3.2    SLC Representations and Warranties. SLC represents and warrants to SUSGP
and to the Company that:
(a)    SLC is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Delaware, and it has all
corporate power and authority necessary to carry on its business as it is now
being conducted, to enter into this Agreement, to own a membership interest in
the Company, and to perform its obligations hereunder.
(b)    All corporate and other proceedings and consents required to be taken by
or on behalf of SLC to authorize it to enter into and carry out this Agreement
have been duly taken, and this Agreement has been duly executed and delivered
by, and constitutes a legal, valid and binding obligation of, SLC, enforceable
against SLC in accordance with its terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors’
rights generally, and (ii) to the extent that equitable remedies, such as
injunctive relief or specific performance, are within the discretion of courts
of competent jurisdiction.

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EXECUTION VERSION

(c)    The execution and delivery of this Agreement, the performance by SLC of
its terms, and the consummation of the transactions contemplated hereby, will
not result in any violation of, conflict to or default or loss of a benefit
under, or permit the acceleration of any obligation under, (i) the articles of
incorporation, certificate of formation, bylaws or other charter document of
SLC, (ii) any contract, agreement or commitment of SLC, or (iii) any permit,
concession, grant, franchise, license, judgment, order, injunction, decree,
statute, law, ordinance, rule or regulation applicable to SLC or to its
properties, other than such conflicts, violations, defaults or losses which do
not and will not, individually or in the aggregate, have a material adverse
effect on the business or financial condition of SLC or on the ability of SLC to
perform its obligations hereunder.
(d)    Except for the filing of the Certificate of Formation, no consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority remains to be obtained or made in connection
with the execution and delivery of this Agreement by SLC or the consummation by
SLC of the transactions contemplated hereby.
(e)    There is no litigation, claim, proceeding or investigation of any nature
pending or, to SLC’s knowledge, threatened against or affecting SLC or any of
its Affiliates that would materially interfere with its ability to fully perform
its obligations under this Agreement. As used in this Section 3.1(e), a
litigation claim, proceeding or investigation shall be “threatened” if a
specific potential claimant has overtly manifested to SLC an awareness of and
present intention to assert or commence such litigation, claim, proceeding or
investigation on the basis of specified facts and theories.
(f)    All negotiations relative to this Agreement and the transactions
contemplated hereby have been carried on by SLC, SLNG or their Affiliates
directly with SUSGP or its Affiliates thereof and without the intervention of
any agent, broker or Person who, either as a result of any act of SLC or
otherwise to the knowledge of SLC, has or will have a valid claim against any of
the Company, SLC, SLNG, SUSGP or their Affiliates for a finder’s fee, brokerage
commission or other like payment with respect to this Agreement or in connection
with the commercial transactions to be carried out by the Company hereunder.
(g)    SLC has funds available to it in amounts sufficient to enable it to
effect the initial capital contribution in accordance with Section 6.1. As of
the Effective Date, SLC has no reason to believe that it will not be able to
satisfy on a timely basis any of its obligations contained in this Agreement.
(h)    SLC hereby represents and warrants to the Company and other Member(s)
hereunder that its acquisition of its Membership Interest is made for its own
account for investment and commercial purposes only and not with an intent to
resell its Membership Interest to third party investors. SLC acknowledges that
the Membership Interests have not been registered under the Act or applicable
state securities laws and that it has no present intention to do so. SLC
acknowledges that it understands the nature of the investment being made by
Members hereunder and that the Company as a newly organized Entity has no
history of operations or earnings such that there is a certain degree of risk
associated with the commercial transactions to be carried out by the Company
hereunder.

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EXECUTION VERSION

(i)    SLC represents and warrants that it will comply with all laws in
conjunction with its participation as a Member or the Company or as a party to
any Related Agreement hereto and that neither it nor any of its respective
Affiliates, officers, director, employees, consultants, agents or
representations will make any prohibited payment in conjunction with or
otherwise affecting the business or operations of the Company or any Subsidiary
thereto.
SECTION 4
COMPANY MANAGEMENT AND RELATED MATTERS
4.1    Directors.
(a)    Subject to the further terms and conditions hereof, the Company shall be
exclusively managed by the Controlling Members, acting collectively through a
management board (the “Board”). The Board will consist of directors appointed by
the Controlling Members in accordance with this Section 4. The Company will not
have “managers,” as that term is used in the Act, it being understood that the
Directors do not constitute “managers.” Except as otherwise expressly provided
in this Agreement, each Member hereby (a) specifically delegates to the Board
its rights and powers to manage and control the business and affairs of the
Company in accordance with the provisions of Section 18-407 of the Act, and (b)
revokes its right to bind the Company, as contemplated by the provisions of
Section 18-402 of the Act. The initial Directors shall be set forth on Schedule
2.1 attached hereto. For the purposes hereof, “Controlling Members” means each
Original Member and each other Member designated as a “Controlling Member” by
the Board in accordance with Section 7.9. Only the Controlling Members shall
have the right to appoint Directors under the terms hereof.
(b)    Each Controlling Member shall be entitled to appoint one (1) Director;
provided, however, that by the provision of written notice to the other Members
at any time, any Controlling Member and any of its Affiliates who are also
Controlling Members may elect to together appoint one (1) Director to represent
their collective Membership Interests. The voting power of each Director shall
equal the percentage of the Membership Interests of the Controlling Member that
appointed such Director. Each Director will notify the other Directors, from
time to time, of the identity of one representative of such Director who will
represent it at any Board meeting at which such Director is unable to attend (an
“Alternate Director”). The term “Director” shall also refer to any Alternate
Director that is actually performing the duties of the applicable Director in
lieu of that Director. The initial Directors and initial Alternate Directors are
set forth on Schedule 2.1 attached hereto. Each Director shall have the full
authority to act on behalf of the Member or Members that appointed such
Director; the action of a Director at a meeting (or through a written consent)
of the Board shall bind the Member or Members that appointed such Director; and
the other Members shall be entitled to rely upon such action without further
inquiry or investigation as to the actual authority (or lack thereof) of such
Director. In addition, the act of an Alternate Director shall be deemed the act
of the Director for which such Alternate Director is acting, without the need to
produce evidence of the absence or unavailability of such Director. Each
Director appointed by a Member must be an employee of such Member or an
Affiliate of that Member.
(c)    Each Controlling Member shall have the right, at any time, with or
without cause, to replace and remove any Director appointed by it and to fill
any vacancy in the Board as

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EXECUTION VERSION

required to effectuate the terms of Section 4.1(b). The appointment and removal
of any Director shall be by written notice to all Members. Any Director may
resign at any time by giving written notice to the Board. The resignation of any
Director shall take effect upon receipt of notice thereof or at such later time
as shall be specified in such notice; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make it effective.
(d)    Each Director shall have a duty to the Company to take all actions
related to their duties and authorities in good faith and fair dealing, and not
in a manner such Director believes to be contrary to the best interests of the
Company, but otherwise no Director shall have any fiduciary or quasi-fiduciary
duty to the Company or the Members pursuant to this Agreement and any standard
of care and duty otherwise imposed on any Director by this Agreement or under
the Act or any applicable law shall be eliminated to the fullest extent
permitted by law.
(e)    No Member, acting solely in its capacity as a Member, shall have the
authority to bind the Company or to act as an agent of Company. Each Member will
pay separately, and not charge to the Company, the Director’s salary due with
regard to their employment by the Member or its Affiliate or any out‑of‑pocket
expenses incurred by the Directors appointed by such Member in connection with
such Directors’ performance of their duties as a Director or attendance at
Directors’ meetings and the like.
(f)    The Board shall hold regular meetings on such dates and at such times as
shall be specified from time to time by the Board at least once per year after
the Interim Period and at least once per quarter of a year during the Interim
Period. Any Member may also call a special Board meeting. Any topic relating to
the business of the Company may be discussed at any Board meeting, and each
Member shall require the Directors appointed by it to discuss in good faith any
topic brought to the attention of the Board by either Member. Unless the Members
or the Directors unanimously agree, written notice of Board meetings stating the
place, day, and hour of the meeting along with the agenda proposed for such
meeting shall be given by the Member calling the Board meeting to the other
Member not less than seven (7) days or more than sixty (60) days before the date
of the meeting. Unless the Members or the Directors unanimously agree, the Board
meetings shall be held in Houston, Texas. Directors may participate in Board
meetings by conference telephone, web-ex or other communications equipment
through which all Persons participating in the meeting can hear each other, and
such participation in a meeting shall constitute attendance in person at such
meeting. Any action taken by the Board without a meeting will be effective only
if the written consent sets forth the action so taken and is signed by the
Directors constituting a Required Consent or Unanimous Consent, as may be
required to approve such action at a meeting of the Board held for such purpose.
(g)    The attendance of Directors, represented in person or by proxy,
representing a Required Consent shall constitute a quorum of the Board for
purposes of conducting business (“Quorum”). If, however, such Quorum is not
present at any meeting of the Directors, the Directors entitled to vote at such
meeting may adjourn the meeting from time to time, without notice other than the
announcement at the meeting until the holders of the requisite amount of
Membership Interests are present or represented. All actions and approvals of
the Board shall be approved and passed at a meeting at which a Quorum is present
by the Required Consent, except where Unanimous

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Consent is specifically required under the terms of this Agreement. Any action
required or permitted to be taken at any meeting of the Board may be taken
without a meeting, without prior notice, and without a vote, if consents in
writing, setting forth the action so taken, are signed by Directors constituting
a Required Consent or Unanimous Consent, as may be required to approve such
action at a meeting of the Board held for such purpose. Each written consent
shall bear the date and signature of each Director who signs the consent and a
copy of such consent shall be promptly delivered to any Director who has not
signed such consent.
(h)    A Director may vote either in person or by proxy executed in writing by
the Director. Proxies for use at any meeting of the Directors or in connection
with the taking of any action by written consent shall be filed with the Company
before or at the time of the meeting or execution of the written consent, as the
case may be.
(i)    All actions of the Board shall be reflected in detailed minutes of the
meeting to be taken by the Secretary, which minutes shall be furnished to each
Member. Such minutes shall be signed by the Directors to indicate approval
thereof.
4.2    Power of the Board. Subject to the right and obligation of the Company
to, and the right and obligation of the Operator or the Officers to cause,
commit or permit the Company to, take actions in accordance with any Development
Budget, Annual Budget or contract or obligation previously approved by the
Required Consent, including, but not limited to the Transaction Agreements, the
Company shall not, and neither of the Members acting individually, nor the
Operator, the Officers nor any Director acting individually shall cause, commit
or permit the Company to, do any of the following without the consent of the
Board by Required Consent:
(a)    Approve or amend the construction and development budget for Phase I and
Phase II of the ELC Facilities (“Development Budget”). Such Development Budget
will include a monthly cash flow schedule to allow Members to prepare in advance
as to when funding will be required. In addition, such Development Budget will
include an initial amount of capital necessary during the front end engineering
and design process which will correlate to the FERC pre-filing timeframe up to
the start of construction;
(b)    For the post-Interim period, subject to Section 4.4(b), approve the
annual operating and capital expenditure budgets of the Company (“Annual
Budgets”) and any amendments, revisions, waivers or exceptions to the items
approved in the Annual Budgets which would affect the Annual Budgets by
increasing them or by deleting any items that were approved in the Annual
Budgets by an amount, on a category by category basis (as set forth in the
Annual Budget), ***. The Annual Budget will include a monthly cash flow schedule
to allow Members to prepare in advance as to when funding will be required;
(c)    (i) acquire any interest in any or all of the assets of any other entity
or business enterprise, (ii) the organization of, or participation in, any joint
venture or similar entity, (iii) any change in the nature of the Company’s
business or purpose, (iv) the formation of any Subsidiaries of the Company; (v)
the use of any property or Assets of Company for a reason other than to conduct
the Company’s business or to satisfy the business purpose of Company or its
Subsidiaries; (vi) any transaction the nature of which is not in the ordinary
course of business; (vii) any sale, lease,

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EXECUTION VERSION

exchange, transfer, mortgage, pledge, assignment or other disposition of any
properties or assets of Company or any Subsidiary; (viii) the purchase or
acquisition of any new or incremental real property or assets not otherwise
contemplated in the Development Budget or Annual Budgets; (ix) any
reorganization, merger, share exchange, consolidation, business combination or
other statutory reorganization or similar transaction, with or without
consideration, involving the Company or any of its Subsidiaries or substantially
all of the assets of the Company or any Subsidiary of the Company, (x) the
liquidation, termination or dissolution of the Company or any of its
Subsidiaries, except as provided in Section 8.2, (xi) the filing by the Company
or any of its Subsidiaries of any voluntary petition in bankruptcy or
insolvency, seeking or consenting to the appointment of a receiver, liquidator,
trustee or similar official, or the assignment of any assets in trust for the
benefit of creditors, in any such case with respect to the Company or any of its
Subsidiaries, or (xii) the expansion of the ELC Facilities, beyond the
facilities described in Schedule 3;
(d)    (i) incurrence or assumption by the Company or any of its Subsidiaries of
any indebtedness, loan or other obligation for borrowed money, including any
increase in borrowing pursuant to any line of credit or a revolving loan,
including capital leases, (ii) the granting of any security interest or pledge
in the assets of the Company or any of its Subsidiaries, or (iii) the guaranty
by the Company or any of its Subsidiaries of any indebtedness, loan or other
obligation;
(e)    authorize, declaration or payment of distributions of any kind, except as
provided in Section 6.4, including, but not limited to any non-cash
distributions;
(f)    increase or reduce the Capital Account of any Member other than as
expressly provided in this Agreement;
(g)    adopt or change any key policy of the Company, such as the Company’s
Policies related to business principles, HSSE, Treasury matters and Risk
Management and the Company’s accounting policy, tax policy, risk and insurance
policy and distribution policy, except as provided in Section 6.4;
(h)    enter into any contract, agreement, transaction or other undertaking
involving the Company or its Subsidiaries with a value of more than *** in any
one year or in the aggregate over the term of the contract, agreement,
transaction or other undertaking, or the modification of any material term of
any such contract, agreement, transaction or undertaking approved by the Board,
including, without limitation, modifications of payment terms, extensions and
cancellations, an expansion of the ELC Facilities or the rendering of any
service, involving the Company or any of its Subsidiaries unless such action is
approved by the Board as a part of the Development Budget or Annual Budget or
otherwise;
(i)    incur capital expenditures and investments (including capitalized leases)
in the aggregate in excess of *** annually for items not included in the
Development Budget or Annual Budget;
(j)    (i) admit any Person as a Member in the Company, other than as provided
in Section 7 below; (ii) the issuance, sale, transfer, redemption, purchase,
repurchase or other acquisition of any equity interests or securities
representing equity interests in the Company or any

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EXECUTION VERSION

Subsidiary of the Company, other than a Membership Interest the terms and
conditions of which Transfer are set forth below in Section 7.1; (iii) the
granting of any option or right to acquire any equity interests of the Company
or any Subsidiary of the Company; (iv) once authorized, any increase or decrease
in the authorized equity interests or securities of the Company or any
Subsidiary of the Company;
(k)    approve the execution of, assignment of, and any amendment to,
termination of (other than by expiration of the term thereof) or waiver of the
Related Agreements or any provision thereof;
(l)    change the name of Company;
(m)    any act in contravention of the Act;
(n)    make any change to material accounting policies applicable to the
Company;
(o)    engage attorneys, accountants, auditors and other advisors and
consultants on behalf of the Company where the individual engagement of an
attorney, accountant or other advisor or consultant is initially expected to
exceed one hundred thousand dollars ($100,000) unless such engagement has been
approved by the Board in the Annual Budget;
(p)    consent or waiver of any conflict of interest by an attorney, accountant
or other advisor or consultant representing the Company;
(q)    initiate litigation or arbitration proceedings or other claims or causes
of action in court or with any Governmental Authority or settling claims or
causes of action asserted in litigation, or an arbitration proceeding or with
any Governmental Authority;
(r)    settle claims on behalf of the Company, whether as a plaintiff or
defendant;
(s)    require a Capital Contribution other than as provided for under Section
6.1 below;
(t)    open or closing any bank accounts for the Company;
(u)    establish procedures related to or contract for the purchase of liability
and other insurance described in Exhibit B to protect the Company or its
business or assets;
(v)    permit LNG to be delivered to any third party or customer other than
SNALNG under the LSA or other than SLNG for purposes of boil off gas recycling
or replenishing of the Heel;
4.3    Officers and Other Agents.
(a)    The Members hereby establish the following officers of the Company (the
“Officers”), each such Officer to have the rights, powers and obligations
specifically delegated and assigned to such Officer in accordance with the terms
of this Agreement: (i) President, (ii) Vice

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EXECUTION VERSION

President – Finance, (iii) Vice President – Commercial, (iv) Vice President –
Technical, and (v) Secretary. So long as there is a Shell Member, the Vice
President-Financial and the Vice President – Technical shall be appointed by the
Shell Member (otherwise, the Board shall appoint such Officers). So long as
there is a Kinder Morgan Member, the President, Vice President – Commercial and
Secretary shall be appointed by the Kinder Morgan Member (otherwise, the Board
shall appoint such Officers). The Board, in its discretion, may establish and
delegate its rights, powers and obligations to specific agents of the Company in
accordance with the terms of this Agreement. The Officers shall act at the
specific direction of the Board. The agents of the Company may act only in
accordance with the terms of their engagement with the Company, which engagement
shall be approved by the Board, or in accordance with the terms of their
contract with Company which may be entered into by the Operator only within its
authority under the MAO or as approved by the Board. Notwithstanding anything to
the contrary contained herein, no Officer or agent of the Company shall have the
authority to take or authorize any action that the Board has not authorized them
to take under the terms of this Agreement or any other Transaction Agreement.
(b)    Officers shall be and remain employees of a Member (or the Affiliate
thereof) and each such Member (or Affiliate thereof) shall remain responsible
for the Officer’s salary and out‑of‑pocket expenses incurred by the Officers in
connection with the performance of their duties as an Officer; provided that the
Company shall reimburse such Persons for any authorized out-of-pocket expenses
reasonably incurred on behalf of the Company, as approved by the Board. No
Officer need be a Member, Director, or resident of the State of Delaware. Each
Officer shall have a duty to the Company to take all actions related to their
duties and authorities in good faith and fair dealing and in a manner such
Officer believes to be in, or not contrary to, the best interests of the
Company, but otherwise the Officers have no fiduciary or quasi-fiduciary duty to
the Company or the Members and any additional standard of care or duty otherwise
imposed on any Officer by this Agreement or under the Act or any applicable law
shall be eliminated to the fullest extent permitted by law. Any two or more
offices may be held by the same Person. The Members acknowledge and agree that
all Officers may continue to perform services for their employer or its
Affiliates while they perform services for the Company.
(c)    Unless the Board decides otherwise by Required Consent, the assignment of
a title to any Officer shall not on its face constitute the general delegation
to such Person or assumption of such Person any particular rights, authority or
obligations. An Officer’s rights, authority and obligations may only arise from
a specific delegation provided in this Agreement, a Transaction Agreement or as
approved by the Board by Required Consent. The following Officers shall have the
authority and duties particularly described below:
(i)President. The President shall have such general executive powers to manage
the business and operations of the Company as the Board may from time to time
prescribe.
(ii)    Vice President – Financial. The Vice President-Financial shall have such
powers and perform such duties as the Board may from time to time prescribe. In
addition, the Vice President-Financial shall have the right to review and
comment on (1) all financial books kept by the Company on a regular basis at any
reasonable time upon reasonable request and (2) all

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EXECUTION VERSION

financial reports prepared by the Company for the Board prior to the time that
such reports are presented to the Board or at any reasonable time upon
reasonable request.
(iii)    Vice President – Commercial. The Vice President – Commercial shall be
responsible for commercial strategy and development of the business and provides
interface with SNALNG on behalf of the Company and will execute on behalf of the
Company contracts and invoices in accordance with the Annual Budget and
Development Budget and shall have such powers and perform such duties as the
Board may from time to time prescribe.
(iv)    Vice President – Technical. The Vice President – Technical shall have
such powers and perform such duties as the Board may from time to time
prescribe. In addition, the Vice President – Technical shall have the right and
obligation to (1) review and comment on all technical reports and proposals
regarding the operation and performance of the MMLS Units prepared by the
Company for the Board prior to the time that such reports and proposals are
presented to the Board or at any reasonable time upon reasonable request and (2)
advise the Board regarding the technical activities of the MMLS Units and HSSE
matters regarding the ELC Facilities and perform such duties as the Board may
from time to time prescribe.
(v)    Secretary. The Secretary shall keep the minutes of the meetings of the
Board, and shall exercise general supervision over the files and records of the
Company. The Secretary shall give notice of meetings and other notices required
under this Agreement and the Act and shall perform other duties as the Board may
from time to time prescribe.
(d)    Each Member which has the right to appoint an Officer under this
Section 4.3 shall have the right, at any time, with or without cause, to replace
and remove any such Officer appointed by it and to fill any vacancy created with
respect to such Officer as required to effectuate the terms of this Section 4.3.
With respect to any Officer appointed by the Board (and not by a Member under
the terms of this Section 4.3), the Board shall have the right, at any time,
with or without cause, to replace and remove any such Officer and to fill any
vacancy created with respect to such Officer.
(e)    Each Officer will hold office until a successor is chosen and qualified
or until the death, resignation, or removal of such Officer. The initial
Officers of the Company are those Persons set forth on Schedule 4.4 attached
hereto and hereby made a part hereof.
(f)    Officers may resign at any time by giving written notice to the Board.
Such resignation will take effect at the time specified in the notice, and,
unless otherwise specified in the notice, the acceptance of such resignation
will not be necessary to make it effective. Such resignation will be without
prejudice to the contract rights, if any, of the Company.
(g)    A vacancy in an office because of death, resignation, removal, or other
cause will be filled in a reasonable amount of time in the manner prescribed in
this Agreement for appointment to such office.
(h)    The Officers will be indemnified by the Company to the extent and in the
manner described in Section 11.2.

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EXECUTION VERSION

4.4    The Operator.
(a)    So long as (i) any Controlling Member is a Kinder Morgan Member and (ii)
the MAO has not been terminated by the Company due to an event of default
thereof by the Operator or a resignation of the Operator, the Operator shall be
either (1) SLNG or (2) any other Affiliate of the Kinder Morgan Member, as
appointed by the Kinder Morgan Member with the approval of the Board by Required
Consent, such consent not to be unreasonably withheld. In the event any
Affiliate of the Kinder Morgan Member other than SLNG is appointed as the
Operator such new operator must assume all obligations of SLNG under the MAO. If
there is no Kinder Morgan Member as a Controlling Member or the MAO has been
terminated by the Company due to a material breach thereof by the Operator or a
resignation by the Operator, then the Board shall designate the replacement
Operator by Required Consent, provided, however, any Operator appointed by the
Board that is not an Affiliate of the Kinder Morgan Member shall be required to
execute a new operating agreement in such form as the Company and the new
operator consider appropriate; provided that the new operating agreement will
contain (X) indemnification by the new operator in favor of SLNG for any damages
to SLNG’s property and facilities at Elba Island caused by the new Operator,
subject to reasonable time limits, caps or other qualifications or limitations
acceptable to the Company and (Y) minimum tangible net worth and credit
standards for the new Operator at least as strong as those requirements for the
Operator under the MAO. In the event the Operator is to be replaced as provided
herein or as set forth in the MAO, the Operator being replaced shall remain the
Operator until a replacement Operator is in place or other arrangements can be
made to put in place the replacement Operator.
(b)    The Members hereby acknowledge and agree that, upon the execution and
delivery of the MAO by the parties thereto, the Operator is authorized,
empowered and directed to take any and all actions on behalf of the Company
required or permitted by the terms of such MAO in an emergency situation
requiring unexpected expenses that are not in the Annual Budget or immediate
actions where usual approval processes to seek consent of the Board are
inadequate to avoid or protect against imminent harm to persons or property
without the requirement of any additional authorization or approval other than
as specified in the MAO. In other circumstances, it is understood by the Members
that the Operator’s authority to act is subject to the restrictions contained in
Section 4.2 hereof requiring the consent of the Board by Required Consent for
certain matters.
4.5    Annual Budget. For each Fiscal Year of the Company commencing with 2014,
the President shall submit to the Board, at least sixty (60) days prior to the
start of such Fiscal Year, the Annual Budgets which shall consist of a budget
and projected cash flow statement for the Company for the ensuing Fiscal Year,
in such form as may be determined by the Board from time to time. For 2013, the
Annual Budget will be prepared consistent with the Development Budget. Such
Annual Budget and cash flow statement shall be prepared on a basis consistent
with the Company’s financial statements and GAAP, except as noted therein, and
shall be subject to the approval of the Board. From time to time during each
Fiscal Year of the Company, the Board may direct the President to prepare a
revised forecast against the Annual Budget of any or all of the items contained
therein. Copies of any such revised forecasts shall be furnished to each
Director promptly upon their

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EXECUTION VERSION

completion. If and when the Board approves the revised forecast, it shall take
the place of the Annual Budget from the date of approval thereunder.
4.6    Accounting; Books and Records; Financial Statements.
(a)    The books and records of the Company shall be maintained and prepared in
conformity with U.S. GAAP. The Fiscal Year of the Company shall be the calendar
year. The Accountants shall be the same accounting firm that is the auditor of
the Kinder Morgan Member so long as such accounting firm is an audit firm of
high international reputation such as a “Big Four” accounting firm (e.g. E&Y,
KPMG, PwC or Deloitte).
(b)    At all times during the continuance of the Company, the Operator shall
keep or cause to be kept full and complete books of account. The books of
account shall be maintained in a manner that provides sufficient assurance that:
(i) transactions of the Company are executed in accordance with the general or
specific authorization of this Agreement; (ii) transactions of the Company are
recorded in such form and manner as will (A) permit preparation of federal,
state and local income and franchise tax returns and information returns as
required by law, (B) permit preparation of the Company’s financial statements in
accordance with GAAP, and (C) maintain accountability for the Company’s assets;
(iii) operation of the assets is being performed in accordance with the general
or specific authorization of the Board and consistent with the MAO; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
difference.
(c)    In addition to any other rights which may be provided under the Act, each
Member shall have the right at all reasonable times during usual business hours
upon prior notice to Operator to designate representatives that may (i) audit,
examine and make copies of the books and records of the Company, (ii) visit the
facilities of the Company, (iii) observe and report on the construction and
operation of the ELC Facilities and the progress thereto and cause the Company
to do the same; or (iv) inspect the ELC Facilities or the construction thereof
with regard the Company’s compliance with all applicable safety, health and
similar requirements and cause the Company to do the same with regard to
requirements applicable to the Company, the ELC Facilities and Operator’s
operation of the ELC Facilities thereof. In addition, the Company has the right
to audit the Operator under the MAO. At the request of either Member, the
Company will exercise its right to audit the Operator pursuant to the terms of
the MAO. Whether such rights are exercised by a Member on its own behalf or on
behalf of the Company, such rights may be exercised through any agent,
representative or employee of such Member designated by it or by independent
certified public accountants or counsel designated by such Member. Each Member
shall bear its expenses incurred in any examination made by a Member or its
agents or representatives on its own behalf. Where a Member causes the Company
to initiate an audit of the Operator, the audit shall be at the expense of the
Company.
(d)    On or before the last Business Day of each May, August, and November, the
Company shall furnish or cause to be furnished each Member with a balance sheet,
an income statement, a statement of cash flows, a statement of changes in each
Member’s Capital Account, and a budget report (to include a comparison of actual
to budget expenses on a month-to-month and year-to-date basis with an
explanation of any material variances from budgeted entries) for, or

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EXECUTION VERSION

as of the end of, the fiscal quarter immediately preceding such calendar month.
On or before March 1 of each year, the Company shall furnish or cause to be
furnished to each Member a draft balance sheet, a draft income statement, a
draft statement of cash flows, and a draft statement of changes in each Member’s
Capital Account for the immediately preceding calendar year. On or before April
30 of each year, the Company shall furnish or cause to be furnished each Member
with audited financial statements, including a balance sheet, an income
statement, a statement of cash flows, and a statement of changes in each
Member’s Capital Account for the immediately preceding calendar year. Annual
financial statements must be prepared in accordance with GAAP and FERC
requirements and audited by the Company’s independent auditor.
4.7    Tax Matters.
(a)    The Company shall make the following elections on the appropriate tax
returns:
(i)    to adopt as the Company’s fiscal year the calendar year;
(ii)    to adopt the accrual method of accounting;
(iii)    to elect, pursuant to Section 754 of the Code in accordance with the
applicable Treasury Regulations thereunder, to adjust the basis of the Company’s
properties;
(iv)    to elect to amortize the organizational expenses of the Company ratably
over the period as permitted by Section 709(b) of the Code; and
(v)    any other election the Board may deem appropriate.
Neither the Company nor any Member shall make an election for the Company to be
excluded from the application of the provisions of subchapter K of chapter 1 of
subtitle A of the Code or any similar provisions of applicable state law and no
provision of this Agreement shall be construed to sanction or approve such an
election.
(b)    The Kinder Morgan Member is hereby designated as the “tax matters
partner” of the Company under Code Section 6231(a)(7) (the “Tax Matters
Member”). The Tax Matters Member shall prepare or cause to be prepared and
filed, on a timely basis, all Federal and State and local tax returns required
of the Company, which returns shall be reviewed and approved in advance of
filing by the other Member. At least thirty (30) days prior to the due date
(including extensions) of any applicable Federal or State income tax returns,
each Member shall be furnished with a draft of the proposed income tax return,
and shall be entitled to make suggestions and recommendations with respect to
those returns before they are filed with the applicable tax authorities. If the
non-Tax Matters Member objects to the draft of a proposed income tax return,
Members shall first negotiate in good faith to reach agreement on the disputed
item or items; failing such agreement, the Members shall jointly select a
nationally recognized independent accounting firm to review the disputed item or
items and provide a recommendation as to the proper treatment of the item or
items and the Tax Matters member shall follow such recommendation on the filed
return. The Tax Matters Member shall also obtain the approval of each other
Member(s) in advance of making any changes

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EXECUTION VERSION

to the tax status of the Company. Each Member shall furnish to the Tax Matters
Member all pertinent information in its possession relating to the Company’s
operations that is necessary to enable the Company’s tax returns to be timely
prepared and filed. The Company shall deliver to each Member a copy of the
Company’s federal and state income tax and information returns for each Fiscal
Year, together with any additional tax-related information in the possession of
the Company that such Member may reasonably and timely request in order to
prepare properly its own income tax returns. In addition, the Company will cause
each Member to be provided with estimates of all such information on or before
the first day of February of each Fiscal Year. The Company shall bear the costs
of the preparation and filing of its tax returns.
(c)    The Tax Matters Member must receive the consent of the other Member prior
to agreeing to waive any statute of limitations or agreeing to any settlement if
such waiver or settlement would bind each other Member or the Company. The Tax
Matters Member shall take such action as may be reasonably necessary to
constitute each other Member a “notice partner” as that term is defined in
Section 6231 of the Code and shall keep each other Member fully informed as to
any tax audits of the Company, including permitting each other Member to
participate in any conferences or meetings with any taxing authority and in any
subsequent administrative or judicial proceedings. The Tax Matters Member must
receive the consent of each other Member prior to the commencement of any
administrative or judicial proceeding with respect to any audit of the Company’s
tax return.
(d)    The Tax Matters Member may, if it determines that the retention of
accountants or other professionals would be in the best interests of the
Company, retain such accountants or professionals to assist the Tax Matters
Member in its duties as Tax Matters Member subject to Section 4.2 hereof
requiring the consent of both Members. The Company shall indemnify and reimburse
the Tax Matters Member for outside professional, legal and accounting fees borne
by the Tax Matters Member, incurred in connection with fulfilling its duties as
Tax Matters Member, including, without limitation, the preparation of the
Company’s tax returns and any administrative or judicial proceeding with respect
to any audit of the Company’s tax returns.
(e)    The Tax Matters Member must, in coordination with each other Member,
timely request and diligently manage processes to obtain sales and use tax,
property tax or any other tax exemption, abatements, incentives or credits that
may be provided by applicable Federal, State or local laws. The Tax Matter
Member must keep each other Member fully informed as to any process, including
permitting each other Member to participate in any conferences or meetings with
any taxing authority and advisor or reviewing requests or any other
documentation to be presented or filed before taxing authorities.
4.8    Insurance.
(a)    Prior to acceptance of the FERC Order, the Company shall procure and
maintain the types and amounts of insurance required by the Board. As of the
date that the Company accepts the FERC Order, the Company shall procure and
maintain the types and amounts of insurance required by applicable law and the
insurance described on Exhibit B hereto and such insurance shall remain in force
for the duration of this Agreement.

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EXECUTION VERSION

(b)    The Company shall procure and maintain different or additional insurance
coverage as the Board may from time to time require.
(c)    Unless otherwise approved by the Board, all insurance to be arranged by
Company shall be placed with (re-) insurers that have a credit/financial
strength rating of “A-“ or higher from A.M. Best or the equivalent from another
internationally recognized credit rating agency acceptable to the Board.
(d)    All insurance shall be placed with reputable licensed insurers, reinsured
if applicable, or otherwise to the Board’s satisfaction. To the extent permitted
by law, the Company shall ensure that participation in all insurance entered
into by it as insured is offered to the Affiliate insurance companies of the
Members at least to the extent of their Membership Interest in the Company,
provided that such Affiliate insurance companies met the minimum financial
security rating stipulated in Section 4.8(c).
(e)    To the extent permitted by law, a Member may elect not to participate in
the property damage insurance to be procured by the Company, provided such
Member provides to the Company either a current certificate of adequate
insurance coverage or other evidence of financial responsibility. Both the
certificate of insurance or the other evidence of financial responsibility must:
(i)    fully cover such non-participating Member’s share based on such
non-participating Member’s Membership Interest of the risks that would otherwise
be covered by the insurance to be procured by the Company;
(ii)    meet the relevant requirements set out in Exhibit “B” hereto;
(iii)    meet the credit/financial strength rating stipulated for insurance
companies under Section 4.8(c), and
(iv)    be formally approved as acceptable by the Board.
(f)    Coverage shall be written such that the applicable insurer(s) shall waive
any right of recovery, under subrogation or otherwise, which the insurer(s) may
have or acquire against each Member or their respective subsidiaries,
Affiliates, directors, partners, officers or agents for claims under such
policies.
(g)    All insurance coverage obtained in relation to this Agreement shall be
endorsed to provide that cancellation or termination shall not be effective
without thirty (30) days prior written notice to the insured excepting only
cancellation for non-payment of premium where such notice period shall be ten
(10) days.
(h)    All such coverage shall, where applicable, name each Member as an
additional insured.
(i)    The insurance policies placed by or on behalf of Company shall, where
applicable, contain a severability of interest clause and a standard cross
liability clause.

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(j)    The Company shall require all contractors and subcontractors engaged by
the Company to maintain all insurance coverages required to be carried by such
Person or business under any Applicable Law, and such other insurance coverage
as the Company may deem advisable and to provide, upon request, certificates
reflecting such insurance.
(k)    All policies of insurance maintained by the Company shall be primary to
and non-contributing with any other policies of the Members.
(l)    Members’ individual global and/or corporate insurance program(s) is/are
stand alone and do not operate as excess or umbrella insurance(s) for the
Company or any other Members except as otherwise expressly agreed and
specifically arranged for the Company by the Members.
4.9    Bank Accounts. Withdrawals from any bank account of the Company shall be
made only upon (i) the signature of such Officer(s) as the Board from time to
time shall designate through a written resolution consenting to such delegation
of authority or (ii) the Operator under the authority set forth in the MAO to
receive and disburse funds as required under the Annual Budget or Development
Budget or as set forth in this Agreement in Section 4.4(b).
4.10    Other Activities of the Members and Their Affiliates. Each Member and
their respective Affiliates are free to engage in, conduct, transact or
participate in any business or activity whatsoever, including without
limitation, the business or activities of the same or similar nature conducted
by the Company and its Subsidiaries without any accountability, liability, or
obligation whatsoever to the Company, its Subsidiaries or the other Member(s).
Each Member may enter into the Related Agreements with Company and such Member
negotiating with Company shall be entitled to protect its own business interests
or those of its Affiliates without breaching any implied duty to Company;
provided, however, once such Related Agreements are executed, nothing contained
herein shall prevent, encumber or waive Company’s right to enforce or defend
such Related Agreements or to take any position or action necessary to enforce
such Related Agreements or otherwise protect Company’s interest. No Member or
any Affiliate of any Member shall be obligated to present, offer, transfer or
assign to the Company any particular investment or business opportunity
presented to such Member or Affiliate thereof, regardless of whether the Company
could take advantage of such opportunity if it were presented to the Company,
but is entitled to avail itself of any such opportunity for its own behalf.
Nothing herein is intended to create a fiduciary or quasi-fiduciary duties or
similar duties or obligations or subject the Members to joint and several or
vicarious liability or to impose any duty, obligation or liability that would
arise therefrom with respect to any or all of the Members or the Company. To the
extent that, at law or in equity, a Member has any fiduciary or other duty to
the Company or any other Member pursuant to this Agreement, such duty is hereby
eliminated pursuant to Section 18-1101(c) of the Act; provided, however, that
the foregoing does not eliminate the implied contractual covenant of good faith
and fair dealing. Notwithstanding anything to the contrary in this Agreement,
the doctrine of corporate opportunity, or any analogous doctrine, shall not
apply to a Member, and each Member (and its appointed Director) shall be
permitted to vote its Membership Interest in its own self-interest. No Member
who (directly or through an Affiliate) acquires knowledge of a potential
transaction, agreement, arrangement or other matter that may be an opportunity
for the Company shall have any duty to

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EXECUTION VERSION

communicate or offer such opportunity to the Company or any other Member, and
such Member shall not be liable to the Company, to any Member or any other
Person for breach of any fiduciary or other duty by reason of the fact that such
Member or its Affiliates pursue or acquire such opportunity for itself or
directs such opportunity to another Person or does not communicate such
opportunity or information to the Company. By way of example and not in
limitation of the foregoing, any pipeline or liquefied natural gas project may
be separately pursued by one or more of the Members or their respective
Affiliates. Neither the Company nor any Member shall have any right, by virtue
of this Agreement, to share or participate in such other businesses, investments
or activities of a Member or to the income or proceeds derived therefrom.
Further, it will not constitute a breach of fiduciary or other duty for a Member
or any Affiliate thereof (i) to engage in activities or business transactions of
the same type conducted by the Company or its Subsidiaries or other Members; or
(ii) to devote any amount of time to any other matters not related to the
activities of the Company.
4.11    Interim Period Construction Management. During the Interim Period and
for any subsequent period of time until any and all construction-related issues
have been completed, subject to the power and authority of the Board, the
Company will form a Joint Owners Team (“Joint Owners Team”) to manage
implementation and construction of the ELC Facilities (the “ELC Project”). The
Joint Owners Team will consist of employees or secondees of each Member to the
Company under the Shell TSA and the KM TSA, respectively. The Members agree to
provide dedicated employees to support the Joint Owners Team, as appropriate. A
Shell secondee or employee will be the Project Manager of the ELC Project unless
otherwise agreed by SUSGP. During the Interim Period, the Operator shall provide
administrative and supporting services relating to the implementation of the
construction of the ELC Project under the terms and conditions of the MAO. The
Joint Owners Team shall coordinate and consult with the Board on any issue
arising out of the construction, operation and maintenance of the ELC Project,
including, but not limited to the Development Budget, contracts, claims, delays,
overruns, contractor breach or default or other project matters.

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The ELC Project is part of a total project (the “Total Project”) consisting of
(i) the ELC Project, (ii) a project to upgrade SLNG’s existing terminal
facilities pursuant to a Ship Loading Precedent Agreement between SLNG and
SNALNG of even date herewith (the “SLNG Project”) and (iii) a project to upgrade
EEC’s existing pipeline facilities pursuant to a Pipeline Precedent Agreement
between EEC and SNALNG of even date herewith (the “EEC Project”). The EEC
Project together with the SLNG Project are referred to herein as the “Related
Projects”. Pursuant to the IPOT Agreement, an Integrated Project Oversight Team
(“IPOT”) shall be formed to oversee the implementation of the construction of
the Total Project, provide coordination and synchronization and provide a means
to resolve any conflict among the ELC Project, the SLNG Project and the EEC
Project. The IPOT shall include both Directors of the Company, the Vice
President – Commercial of the Company, the Vice President – Technical of the
Company, one representative from Kinder Morgan to represent the Related
Projects, and one representative from SUSGP to represent the design, manufacture
and delivery of the MMLS Units. The Company, SLNG and EEC will each appoint the
same employee or contractor of the Kinder Morgan Member or its Affiliate to be
the Project Director to provide oversight of the Total Project. The Project
Manager for the ELC Project will report to the Project Director. The Project
Director will report to the IPOT in accordance with the terms of the IPOT
Agreement and to the Company, EEC and SLNG under its contractual arrangements
with each company.
SECTION 5
REGULATORY STATUS
5.1    Regulatory Status. Company and SLNG will file with the FERC an
Application to obtain a FERC Order to construct and install the ELC Facilities
at the Elba Terminal and to integrate them, as necessary, with the SLNG
Facilities. SLNG has filed with the U.S. Department of Energy (“DOE”) an
application for authorization to export LNG from the Elba Terminal to non-FTA
countries. The Company will be subject to all Applicable Laws, rules,
regulations and orders of any Governmental Authority having jurisdiction.
5.2    Cooperation. Each Member agrees to support the Company and SLNG in
securing the Governmental Approvals, including without limitation, preparing,
filing and prosecuting the FERC and DOE Applications and providing any
information requested by any Governmental Authority or Company that they deem
necessary to obtain such approvals.
SECTION 6
FINANCIAL MATTERS
6.1    Capital Contributions. The Members shall make Capital Contributions in
accordance with the following:
(a)    Within sixty (60) days following the Effective Date, each Member will
provide to the other Member a full accounting of their Development Costs
incurred up to the Effective Date, together with sufficient supporting detail
for the Members to verify the Development Costs. Each Member shall have thirty
(30) days from receipt of the other Member’s detailed listing of Development
Costs to accept or challenge the appropriateness of including such Development
Costs as costs appropriately incurred in developing the Project. At such time as
each Member has accepted

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EXECUTION VERSION

the other Member’s Development Costs as appropriately incurred in the
development of the Project, such Development Cost shall be deemed contributed.
The Development Costs paid by each Member through the Effective Date shall be
deemed Capital Contributions to the Company and shall be credited to their
respective Capital Accounts as of the Effective Date. Each Member’s initial
Membership Interests in the Company shall be set forth opposite such Member’s
Name on Schedule 1 attached hereto and made a part thereof. During the Interim
Period, in the event that Development Costs are not contributed by the Members
prorata in conformity with their initial Membership Interest, the Capital
Accounts of the Members shall be trued up to be in proportion to each Members’
initial Membership Interest by the use of one or more disproportionate cash call
requirements to fund the Development Contribution Amounts, calculated as if the
cash call and the deemed Capital Contribution of Development Costs both occurred
on the Effective Date.
(b)    On the In Service Date, the Members will fund the Company’s initial
working capital requirements in accordance with their Membership Interests in an
amount to be determined by the Board,, in each case to the Company in cash by
wire transfer to the Company's bank account and will be credited to their
respective Capital Accounts as of the In Service Date.
(c)    The Members shall contribute to the Company the sums required for the
Company to fund the Development Budget (the "Development Contribution Amount").
Such Capital Contributions shall be made pursuant to cash calls issued by the
Operator from time to time, in accordance with this Agreement and the MAO in
order to fund the Company’s Contractual Obligations under the MMLS Purchase
Agreement and the cash flow schedule approved by the Board as a part of the
Development Budget, and setting forth the Capital Contribution Date(s) (the
first of which shall not be earlier than the 30th calendar day following the
giving of such notice, unless an earlier date is otherwise agreed by the Board)
for such Capital Contributions. The Company shall use such Capital Contributions
exclusively for the purposes set forth in the Development Budget.
(d)    Excluding amounts included in the Development Contribution Amount, which
shall be funded as described in Section 6.1(c) above, to the extent there are
insufficient funds to satisfy obligations of the Company, which such obligations
were incurred or effectuated in accordance with Section 4.2 above, from (i) cash
on hand or (ii) indebtedness approved by the Board in accordance with the terms
hereof, the Members shall contribute to the Company the sums required for the
Company to pay all amounts necessary to satisfy its Contractual Obligations (the
“Company Contribution Amount”). Such Capital Contributions shall be made
pursuant to cash calls issued by the Operator or any Member, from time to time,
in accordance with this Agreement and the MAO in order to fund the monthly cash
flow schedule approved by the Board as a part of the Annual Budget, and setting
forth the Capital Contribution Date(s) (the first of which shall not be earlier
than the 30th calendar day following the giving of such notice, unless an
earlier date is otherwise agreed by the Board) for such Capital Contributions.
The Company shall use such Capital Contributions exclusively for the purposes of
satisfying the Contractual Obligations.
(e)    At any time and from time to time during any Fiscal Year after the
Interim Period, the Board by Required Consent may issue capital calls to the
Members for Capital Contributions which shall state with sufficient detail and
clarity the purpose of the capital call and

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EXECUTION VERSION

other information reasonably necessary in order for the Members to make a
decision regarding the capital call; provided, however, that prior to taking any
such action the Board shall discuss (i) the proposed use of the funds described
in reasonable detail, (ii) the events and circumstances giving rise to the need
for such Capital Contribution; (iii) whether or not the Capital Contributions
could be funded through (x) a loan from a Member or Members or (y) borrowing
from Third Parties through traditional means and the pros and cons of such
financing to Company and the Members; and (iv) why the funds generated by the
business of the Company with respect to proposed Capital Contributions are
insufficient or incapable of meeting the increased financial requirements of
Company. A Member shall have an opportunity to object to any capital call under
this Section 6.1(e) by providing notice at the time the respective Capital
Contribution is discussed. If after such discussion the Board decides to proceed
with such Capital Contribution, such approved Capital Contributions shall be
made, under the parameters determined by the Board. The Operator shall establish
the Capital Contribution Date(s) (the first of which shall not be earlier than
the 30th calendar day, unless the Board agrees otherwise to an earlier date
following the giving of such notice) for such Capital Contributions.
Notwithstanding the foregoing, the Board may, prior to any Member making its
Capital Contribution requested under this Section 6.1(e), withdraw any request
pursuant to this Section 6.1(e) upon written notice to the Members.
Notwithstanding the foregoing, no Member shall be obligated to make any Capital
Contributions to the Company under this Section 6.1(e) in the event of a
bankruptcy of the Company.
(f)    Except for events described in Section 6.1(a), (b), (c), (d) and (e) no
Member shall make, or be required to make, any additional Capital Contributions.
Except as otherwise provided in this Agreement, no Member shall be entitled to
demand or receive a return of its Capital Contributions. On each Capital
Contribution Date, each Member shall make a Capital Contribution to the Company
in cash in an amount equal to its Membership Interest in the Company multiplied
by the aggregate amount of the Capital Contributions due on such date. All
Capital Contributions pursuant to this Section 6.1 shall be made by wire
transfer of immediately available funds to the bank account of the Company
specified in the applicable capital call notice. Any Dispute or Board Deadlock
regarding a Capital Contribution under this Section 6.1 will be resolved in
accordance with Article 12.
(g)    If any Member (the “Non-Funding Member”) fails to make on the applicable
Capital Contribution Date all or any part of a Board approved Capital
Contribution then due and does not cure such failure within three (3) Business
Days following the receipt of written notice of such failure from the Company or
any other Member, (a) any Member which is not a Non-Funding Member shall have
the right to exercise any and all rights or remedies available at law or equity
against such Non-Funding Member; (b) in addition (and without limitation on the
right of any Member which is not a Non-Funding Member to seek any and all rights
or remedies at law or equity), any such Member which is not a Non-Funding Member
(a “Contributing Member”) may, but shall not be required, to advance on a pro
rata basis, based upon the respective Membership Interest of each Contributing
Member, the portion of such Board approved Capital Contribution that the
Non-Funding Member failed to contribute (the “Delinquent Contribution”), and (c)
if the Delinquent Contribution is not fully funded pursuant to clause (b), any
Contributing Member who agrees to advance a portion of the Delinquent
Contribution pursuant to clause (b), may, but shall not be required to, advance
any portion of the unfunded Delinquent Contribution (allocated pro rata

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EXECUTION VERSION

among each Contributing Member who agrees to fund under this clause (c)). The
Operator shall be entitled to specify deadlines for Contributing Members to
respond to requests for and to fund Delinquent Contributions that are reasonable
in the circumstances. Subject to Section 6.1(g)(vii), any such advances pursuant
to this Section 6.1(g) shall constitute a loan to the Non-Funding Member from
the Contributing Member and have the following results:
(i)    the sum advanced by the Contributing Members shall constitute a loan from
such Contributing Members to the Non-Funding Member and a Capital Contribution
of that sum to the Company by the Non-Funding Member;
(ii)    the principal balance of the loan and all accrued unpaid interest
thereon (collectively, the “Obligation”), together with all interest accrued
thereon and all costs and expenses associated therewith (“Costs”), shall be due
and payable in whole on the fifteenth (15th) Business Day after the day written
demand requesting payment is made by a Contributing Member to the Non-Funding
Member; provided, however, that the Non-Funding Member may prepay the Obligation
in whole or in part at any time prior to the date due;
(iii)    the amount advanced by the Contributing Member(s) shall bear interest
at the Stated Rate from the day that the advance is made (the “Subsequent
Funding Date”) until the date that the loan, together with all interest accrued
thereon and all Costs, is repaid to each Contributing Member;
(iv)    all Distributions from the Company that otherwise would be made to the
Non-Funding Member (whether before or after dissolution of the Company) instead
shall be paid to each Contributing Member until the Obligation and any Costs
have been paid in full to such Contributing Member (with payments being applied
first to Costs, second to accrued and unpaid interest, and finally to
principal);
(v)    each Contributing Member shall have the right, in addition to the other
rights and remedies granted to it pursuant to this Agreement or available to it
at law or in equity, to take any action (including court proceedings and
exercising the rights of a secured party under the Uniform Commercial Code of
the State of Texas or any other appropriate State that the Contributing Member
may deem appropriate to obtain payment from the Non-Funding Member of the
Obligation and all Costs;
(vi)    the Non-Funding Member deemed to have received a loan from a
Contributing Member under the terms of this Section 6.1(g) shall continue to be
deemed in Default until all Obligations and all Costs under such loan have been
paid and satisfied in full; and
(vii)    If the Obligation and Costs are not repaid to each Contributing Member
by the Non-Funding Member within fifteen (15) Business Days after the day
written demand requesting payment is made by such Contributing Member to the
Non-Funding Member, then the loan described above in this Section 6.1(g) shall
be cancelled, and the amount of such unpaid Obligation and Costs shall be
transferred to and increase such Contributing Member’s Capital Account with a
corresponding decrease in the Capital Account of the Non-Funding Member. Upon
such transfer, the Membership Interest for each such Member shall be
automatically adjusted to

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EXECUTION VERSION

equal the percentage obtained by dividing (A) if such loan was made due to the
failure of a Member to make a Capital Contribution before or during the Interim
Period, (I) the sum of all Capital Contributions made by such Member or its
predecessors in interest by (II) the sum of all Capital Contributions made by
all Members or their respective predecessors in interest and (B) if such loan
was made due to the failure of a Member to make a Capital Contribution after the
Interim Period, (I) the Capital Account of such Member by (II) the aggregate
Capital Accounts of all Members; provided that the adjustments to the Membership
Interests provided in this subsection (B) shall occur after adjustment of the
Capital Accounts as provided in Section 6.1(h)(v) as if additional Membership
Interests were being issued. Upon the adjustment of the Membership Interests in
the manner set forth in the preceding sentence, Schedule I shall be deemed to be
amended to reflect such adjusted Membership Interests.
(h)    Capital Accounts.
(i)    A Capital Account will be established and maintained by the Company for
each Member in accordance with this Section 6.1(h).
(ii)    A Member’s Capital Account will be increased by (i) the amount of money,
the pre-formation development costs paid by each Member, and the initial Gross
Asset Value of any property contributed by such Member to the Company, (ii) such
Member’s allocable share of Profits, income, and gain based on their Membership
Interest, and (iii) the amount of any Company liabilities that are expressly
assumed by such Member or that are secured by any Company property distributed
to such Member.
(iii)    In the event that any Member makes a loan to the Company, the loan will
not be considered a contribution to the capital of the Company and will not
increase the Capital Account of the lending Member. Repayment of such loans will
not be deemed withdrawals from the capital of the Company.
(iv)    A Member’s Capital Account will be decreased by (i) the amount of money
or the Gross Asset Value of any property distributed to such Member pursuant to
any provision of this Agreement, (ii) such Member’s allocable share of Losses
and any items in the nature of expenses or losses that are specially allocated
pursuant to Section 6.3 hereof, and (iii) the amount of any liabilities of such
Member that are expressly assumed by the Company or that are secured by any
property contributed by such Member to the Company.
(v)    In determining the amount of any liability for purposes of subparagraphs
(ii) and (iv) above there shall be taken into account Section 752(c) of the Code
and any other applicable provisions of the Code and Regulations.
(vi)    In accordance with Section 1.704-1(b)(2)(iv)(f), of the Regulations, the
Board shall increase or decrease the Capital Accounts of the Members to reflect
a reevaluation of Company property on the Company’s books to its Fair Market
Value (as determined by the Board and taking into account Section 7701(g) of the
Code); provided however, that the Capital Accounts of the Members will not be
adjusted to the extent that the Board reasonably determines that an

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EXECUTION VERSION

adjustment pursuant to Section 6.1(h)(v) hereof is not necessary to reflect the
relative economic interests of the Members in the Company.
(vii)    The Capital Account of each Member will be determined after giving
effect to all transactions which have been effected prior to the time when such
determination is made giving rise to the allocation of income, gain, profits,
losses, deductions, and other expenses and to all contributions and
distributions theretofore made. No Member shall have the right to withdraw all
or any part of its Capital Account or to receive any return on any portion of
its Capital Account, except as may be otherwise specifically provided in this
Agreement. A Person who acquires a Membership Interest from a Member will have a
Capital Account balance of the Membership Interest so acquired or transferred.
The Company will not pay interest on any Capital Contribution or Capital
Account.
(viii)    All fees, salary, interest, or similar items payable to a Member
pursuant to this Agreement or the Related Agreements will be deemed a guaranteed
payment for federal income tax purposes and not a distribution to such Member.
Such fees or payments to a Member will not reduce the Capital Account of the
Member, except to the extent of its distributive share of any Company Losses or
other downward capital adjustment resulting from such payment.
(ix)    From time to time the Tax Matters Member may make such modifications to
the manner in which the Capital Accounts are computed to comply with Regulations
Section 1.704-1(b) and 1.704-2; provided that such modification is not likely to
have a material effect on the amounts distributable to any Member pursuant to
this Agreement.
(x)    The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b) and should be interpreted and applied in a manner
consistent with such Regulations.
(xi)    Any Member with a deficit balance in its Capital Account because of a
Delinquent Contribution for which there was no payment by a Contributing Member
or adjustment in Membership Interest shall be in default to the Company and
Company may take any action permitted by law to recover such Delinquent
Contribution from a Member. In addition, no member, partner, or shareholder in
any Member will have any liability to the Company or any other Member for any
deficit balance in the Capital Account of the Member in which it is a member,
partner, or shareholder. Furthermore, a deficit Capital Account balance of a
Member (or a deficit Capital Account of a member, shareholder or partner in a
Member) will not be deemed to be a Company asset or Company property.
(i)    Withdrawal of or Return on Capital Account. No Member has the right to
withdraw all or part of its Capital Account or to receive any return on any
portion of its Capital Account, except as may be otherwise specifically provided
in this Agreement.
(j)    Distributions other than Cash. Except as set forth in Section 8.4, under
circumstances involving a return of Capital Contributions or other distribution
by the Company, no Member will have the right to receive property of the Company
other than cash.

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(k)    Option for Phase II of ELC Facilities.
(i)    On or before the date that is *** days after the date that FERC approves
the Company’s request to enter the prefiling process for the construction and
installation of the ELC Facilities including Phase I and Phase II of the ELC
Facilities (“First Election Date”), SUSGP shall notify the Company in writing of
its election of whether or not to proceed with Phase II of the ELC Facilities.
In the event the Company does not receive any such notice from SUSGP on or
before the First Election Date, then the lack of notice shall be treated as
though SUSGP elected not to proceed with Phase II of the ELC Facilities. In the
event no notice in writing is received by the Company or SUSGP affirmatively
elects not to proceed with Phase II, the Company shall have no obligation to
proceed with the construction and installation of any of the Phase II ELC
Facilities and there shall be no Second Election as provided in Section
6.1(l)(ii) below. If SUSGP does not elect Phase II, the Company’s obligations
with respect to the construction, operation and maintenance of the Phase I ELC
Facilities shall continue in full force and effect and any references in this
Agreement to the ELC Facilities shall refer to the Phase I ELC Facilities. In
the event SUSGP makes an election by the First Election Date to proceed with
Phase II of the ELC Facilities (“First Election”), then, provided that all of
the conditions precedent set forth in the LSA are met or waived, the Company
shall either (x) amend the existing MMLS Unit Purchase Agreement with SUSGP to
provide for the purchase of the additional MMLS Units associated with the Phase
II ELC Facilities, or (y) enter into a purchase agreement for the additional
MMLS Units with the Third Party manufacturer of the units under contract with
SUSGP in a form substantially similar to the contract for the MMLS Units that
SUSGP has with such Third Party manufacturer. The Company will then construct
and install at least two (2) additional MMLS units and appurtenances beyond the
six (6) MMLS units installed or to be installed as part of the Phase I ELC
Facilities. SUSGP shall specify in the First Election the proposed in-service
date for the Phase II ELC Facilities; provided however, such proposed in-service
date shall be no later than two (2) years after the in-service date for the
Phase I ELC Facilities.
(ii)    In the event SUSGP makes the First Election as provided above in Section
6.1(k)(i), then on or before the date that is *** days after the date that FERC
approves the Company’s request to enter the prefiling process for the
construction and installation of the ELC Facilities (“Second Election Date”),
SUSGP shall notify the Company in writing of its election to increase the scope
of the Phase II ELC Facilities from two (2) to four (4) additional MMLS units
(“Second Election”). In the event the Company does not receive any such notice
from SUSGP on or before the Second Election Date, then the lack of notice shall
be treated as though SUSGP elected to proceed with only two (2) additional MMLS
Units to be included as the Phase II ELC Facilities. In the event SUSGP makes an
election on or before the Second Election Date to proceed with the installation
of four (4) additional MMLS units as part of Phase II of the ELC Facilities,
then, provided that all of the conditions precedent set forth in the LSA are met
or waived, the Company shall construct and install four (4) additional MMLS
units for Phase II.
(iii)    If, as of the First Election Date, a First Election is not received by
the Company or SUSGP has affirmatively elected not to proceed with Phase II
under the First Election in Section 6.1(k)(i) above, then if (A) DOE grants SLNG
a non-FTA export permit for the Export Operations within twenty-four (24) months
from the filing date of SLNG’s application

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EXECUTION VERSION

therefor with the DOE and (B) FERC has not denied or rejected construction and
operation of the ELC Facilities consisting of ten (10) MMLS Units as of the
First Election Date and FERC grants approval for at least six (6) MMLS Units
within thirty (30) months from the filing date of the FERC Application (the
“Phase II Withdrawal Fee Conditions”), then SUSGP shall pay to SLC a Phase II
withdrawal fee of *** (“Phase II Withdrawal Fee”). In the event the Phase II
Withdrawal Fee Conditions are not satisfied, the Phase II Withdrawal Fee shall
not become due or be payable. In the event the Phase II Withdrawal Fee
Conditions are satisfied and SUSGP elects, or is deemed to have elected, to not
proceed with Phase II, SUSGP will make payment of the Phase II Withdrawal Fee to
SLC within sixty (60) days of the later of (X) the First Election Date or (Y)
the date the conditions precedent in (A) and (B) above are both satisfied.
Payment by SUSGP and receipt by SLC of the Phase II Withdrawal Fee shall not be
deemed a Capital Contribution and shall have no effect in any manner upon, and
shall be made separate and apart from either Member’s Capital Account
established hereunder. Notwithstanding any other term herein, SLC shall have all
rights and privileges hereunder to initiate a cause of action against SUSGP for
nonpayment of any or all of the Phase II Withdrawal Fee once the Phase II
Withdrawal Fee Conditions are satisfied and the Phase II Withdrawal Fee is due
and unpaid. In addition, if the Phase II Withdrawal Fee becomes due and payable
and the Phase II Withdrawal Fee Conditions are satisfied, SUSGP agrees to
reimburse the Company for any Development Costs that are associated with the
Phase II ELC Facilities that are paid or committed through the First Election
Date. In the event the Second Election is not received by the Company or SUSGP
affirmatively elects not to proceed with the additional MMLS Units for Phase II
under the Second Election set forth in Section 6.1(k)(ii) above, SUSGP agrees to
reimburse the Company, separate and apart from SUSGP’s Capital Account
hereunder, for any Development Costs that are paid or committed through the
Second Election Date that are associated with the additional two (2) MMLS Units
which were proposed as part of the Phase II ELC Facilities, but not elected by
SUSGP in the Second Election.
(iv)    During the option time period through the Second Election Date as set
forth in Section 6.1(k)(ii) above, SLC will not, and will cause its Affiliates
to not, market additional liquefaction at the Elba Terminal other than for a
liquefaction project primarily focused on peak shaving for two existing firm
shippers of SLNG and SNG, respectively, with which negotiations are ongoing as
of the effective date of this Agreement.
(l)    Under the LSA, *** SNALNG’s obligations to the Company are guaranteed by
Shell Oil Company pursuant to the terms of a guaranty in the form of Exhibit “H”
to the LSA to which SLC is the sole beneficiary. Any payments made by Shell Oil
Company to SLC under such Guaranty shall not be deemed a Capital Contribution
and shall have no effect in any manner upon, and shall be made separate and
apart from either Member’s Capital Account established hereunder.
6.2    No Reliance by Parties Extending Credit. Without limiting the generality
of Section 14.13, the provisions of Section 6.1 above are hereby expressly
stated not to be for the benefit of any Person other than the Members, including
without limitation, any Person now or hereafter extending credit to the Company,
and it is the intent of the Members that reliance by any such Person other than
the Members should be deemed unreasonable for purposes of the Act. No Member or
Operator will be liable for the debts, loans, liabilities, contracts or other
obligations of the Company,

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except to the extent expressly provided herein or in the Act. No Member or
Operator shall be liable for the debts or liabilities of any other Member. No
Member or Operator will be required to loan the Company any funds.
6.3    Allocation of Profits and Losses.
(a)    After giving effect to the special allocations set forth in Section
6.3(d), Profits for any Allocation Year shall be allocated to the Members in
proportion to their respective Membership Interests.
(b)    After giving effect to the special allocations set forth in Section
6.3(d), Losses of the Company for each Allocation Year shall be allocated to the
Members in proportion to their respective Membership Interests.
(c)    Losses allocated pursuant to Section 6.3(b) hereof shall not exceed the
maximum amount of Losses that can be allocated without causing any Member to
have an Adjusted Capital Account Deficit at the end of any Allocation Year. In
the event some but not all of the Members would have Adjusted Capital Account
Deficits as a consequence of an allocation of Losses pursuant to Section 6.3(b)
hereof, the limitation set forth in this Section 6.3(c) shall be applied on a
Member by Member basis and Losses not allocable to any Member as a result of
such limitation shall be allocated to the other Member(s) in accordance with the
positive balances in such Member’s Capital Accounts so as to allocate the
maximum permissible Losses to each Member under Section 1.704-1(b)(2)(ii)(d) of
the Regulations.
(d)    The following special allocations shall be made in the following order:
(i)    Except as otherwise provided in Regulations Section 1.704-2(f), if there
is a net decrease in Minimum Gain during any Allocation Year, each Member who
has a share of the Member Nonrecourse Debt Minimum Gain attributable to such
Member Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Company income and gain for
the Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Member’s share of the net decrease in Company Minimum Gain,
determined in accordance with Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Member pursuant thereto. The items to
be so allocated shall be determined in accordance with Regulations Sections
1.704‑2(f)(6) and 1.704-2(j)(2). This paragraph (i) is intended to comply with
the minimum gain chargeback requirement in Regulations Section 1.704-2(f) and
shall be interpreted consistently therewith.
(ii)    Except as otherwise provided in Regulations Section 1.704-2(i)(4), if
there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to
a Member Nonrecourse Debt during any Allocation Year, each Member who has a
share of the Member Nonrecourse Debt Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Company income and gain for
the Allocation Year (and, if necessary, subsequent Allocation Years) in an
amount equal to such Member’s share of the net decrease in the Member
Nonrecourse Debt

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EXECUTION VERSION

determined in accordance with Regulations Section 1.704-2(j)(2). The items to be
so allocated shall be determined in accordance with Regulation Sections
1.704‑2(i)(4) and (j)(2). This paragraph (ii) is intended to comply with the
minimum gain chargeback requirement in Regulations Section 1.704-2(i)(4) and
shall be interpreted consistently therewith.
(iii)    If any Member unexpectedly receives any adjustments, allocations, or
distributions described in Regulation Sections 1.704‑1(b)(2)(ii)(d)(4), (5), or
(6), items of Company income and gain shall be specially allocated to such
Member in an amount and manner sufficient to eliminate the Adjusted Capital
Account Deficit of the Member as quickly as possible, provided that an
allocation pursuant to this paragraph (iii) shall be made only if and to the
extent that the Member would have an Adjusted Capital Account Deficit after all
other allocations provided for in this Section 6.3 have been tentatively made as
if this paragraph (iii) were not in this Agreement. This paragraph (iii) is
intended to constitute a “qualified income offset” under Regulation Section
1.704‑1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(iv)    Nonrecourse Deductions for any Allocation Year shall be allocated to the
Members in accordance with their respective Membership Interests.
(v)    Member Nonrecourse Deductions for any Allocation Year shall be specially
allocated to the Member that bears the economic risk of loss with respect to the
Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable (as determined under Regulation Section 1.704‑2(b)(4) and (i)(1)).
(vi)    To the extent an adjustment to the adjusted tax basis of any Company
asset, pursuant to Code Section 734(b) or Section 743(b) is required, pursuant
to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as a result of a distribution to a Member in complete liquidation of
such Member’s interest in the Company, the amount of such adjustment to Capital
accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be specially allocated to the Members in accordance with
their interests in the Company in the event Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Member to whom such distribution was
made in the event Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(e)    Tax Allocations; Code Section 704(c).
(i)    Subject to paragraph (ii), each item of income, gain, loss, deduction,
and credit of the Company for federal income tax purposes shall be allocated
among the Members in the same manner as such items are allocated for book
purposes under Section 6.3.
(ii)    In accordance with Code Section 704(c) and the Regulations thereunder,
income, gain, loss and deduction with respect to and property contributed to the
capital of the Company shall, solely for tax purposes, be allocated among the
Members so as to take into account any variation between the adjusted basis of
such property to the Company for federal income tax purposes and its initial
Gross Asset Value (computed in accordance with the definition of Gross Asset
Value) using the remedial allocation method pursuant to Regulations Section
1.704-3(d). In

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EXECUTION VERSION

the event the Gross Asset Value of any Company asset is adjusted pursuant to
subparagraph (a) of the definition of Gross Asset Value, subsequent allocations
of income, gain, loss and deduction with respect to such asset shall take
account of any variation between the adjusted basis of such asset for federal
income tax purposes and its Gross Asset Value using the remedial allocation
method pursuant to Regulations Section 1.704-3(d).
(iii)    Allocations pursuant to this Section 6.3(e) are solely for purposes of
federal, state and local taxes and shall not affect, or in any way be taken into
account in computing, any Member’s Capital Account or share of Profits, Losses,
other items, or distributions pursuant to any provision of this Agreement.
(f)    Other Allocation Rules.
(i)    For purposes of determining the Profits, Losses or any other item
allocable to any period, Profits, Losses, and other items will be determined on
a daily, monthly or other basis as determined by the Tax Matters Member using a
permissible method under Code Section 706 and the related Regulations.
(ii)    Except as otherwise specifically provided in this Agreement, all items
of Company income, gain, loss, deduction, credit and other allocations will be
divided among the Members in the same proportions as they would otherwise share
Profits and Losses consistent with their Membership Interests.
The Members agree to follow the provisions of this Section 6.3 when reporting
their respective shares of Company income and loss for income tax purposes.
6.4    Distributions.
(a)    Distributions shall be made to the Members (“Distributions”) to the
extent that the Company has net cash from any and all sources remaining after
providing for payment of current, prospective or contingent obligations,
including working capital and operating costs of the Company and any other
amounts approved by the Board for reserves (“Available Cash Flow”). In making
this determination of whether or not the Company has Available Cash Flow, the
Operator shall examine and consider cash flow projections in accordance with the
Annual Budgets, including, without limitation, such items as earnings, taxes,
capital expenditures and working capital requirements of the Company. Once the
Operator has made a determination that the Company has Available Cash Flow, then
the Company shall make Distributions to the Members in an aggregate amount equal
to such Available Cash Flow in accordance with this Section 6.4(a). Subject to
its evaluation of the Company’s Available Cash Flow as provided above, Operator
will make Distributions to the Members at least as often as each fiscal quarter.
(b)    Distributions shall be made only to the Members simultaneously in
proportion to their respective Membership Interests at the time thereof, except
as provided above in Section 6.1(g). No member in default of making a Capital
Contribution pursuant to this Agreement shall receive a Distribution until such
Capital Contribution is paid by the Non-Funding Member.

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(c)    The Company shall withhold and pay over to the Internal Revenue Service
or other applicable taxing authority all taxes or withholdings, and all
interest, penalties, additions to tax, and similar liabilities in connection
therewith or attributable thereto (hereinafter “Withholding Taxes”) to the
extent that the Operator determines that such withholding and/or payment is
required by the Code or any other law, rule, or regulation, including, without
limitation, Sections 1441, 1442, 1445, or 1446 of the Code. The Operator shall
determine to which Member such Withholding Taxes are attributable. All amounts
withheld pursuant to this Section 6.4(d) with respect to any allocation, payment
or distribution to any Member shall be treated as amounts distributed to such
Member pursuant to Section 6.4(a) hereof for all purposes of this Agreement.
(d)    Notwithstanding anything to the contrary set forth in this Section 6.4,
neither the Company nor the Operator on behalf of the Company will make a
distribution to any Member on account of its interest in the Company, if such
distribution would be prohibited by or in violation of the Act or other
applicable law.
SECTION 7
TRANSFER OF MEMBERSHIP INTEREST
7.1    General. A Member may not Transfer all or any portion of a Membership
Interest unless such Transfer is made in accordance with the securities laws and
in accordance with, and as expressly authorized by, the provisions of this
Agreement, including, in particular, the provisions of this Section 7.1 and 7.2
and 7.5 below. Any purported Transfer in breach of the terms of this Agreement
shall be null and void ab initio, and the Company shall not recognize the
Transferee with respect to any such prohibited Transfer as a Member or an
assignee of a Member.
(a)    Notwithstanding anything to the contrary contained herein, unless such
action is approved by the Board by Unanimous Consent, no Member may effect a
Transfer either (i) during the Interim Period or (ii) except as provided in
Section 7.2(a), if such Transfer constitutes a Transfer of less than 100% of
such Member's Membership Interest.
(b)    A Membership Interest shall not be Transferred except pursuant to an
applicable exemption from registration under the Securities Act of 1933, as
amended, and other applicable securities laws.
(c)    Except as provided in Section 7.5, (i) no Transferee shall have the right
to become a Substituted Member and (ii) unless and until a Transferee is
admitted as a Substituted Member, (A) such Transferee shall have no right to
exercise any of the powers, rights and privileges of a Member hereunder other
than to receive its share of allocations and distributions pursuant to this
Agreement and (B) the Member who has Transferred all or any part of its
Membership Interest to such Transferee shall cease to be a Member with respect
to such Membership Interest so Transferred upon Transfer of such Membership
Interest and thereafter shall have no further powers, rights and privileges as a
Member hereunder with respect to such Membership Interest (to the extent so
Transferred), but shall, unless otherwise relieved of such obligations by the
Company, remain liable for all obligations and duties as a Member with respect
to such Membership Interest ; provided, however, that if the Transferee
reconveys such Membership Interest to the Transferring Member within thirty (30)
days after the Transferring Member has received written notice from the Company

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EXECUTION VERSION

that the Transferee will not become a Substituted Member, the Transferring
Member shall once again be entitled to all of the powers, rights and privileges
of a Member hereunder.
(d)    The Company may, in its reasonable discretion, charge a Member a
reasonable fee to cover administrative expenses necessary to effect a Transfer
with respect to any or all of such Member’s Membership Interest.
(e)    In the absence of the substitution (as provided herein) of a Transferee
for a Transferring Member, any payment by the Company to the Transferring Member
shall acquit the Company and the Members of all liability to any other Persons
who may be interested in such payment by reason of a Transfer by such Member.
(f)    After the Interim Period, a Member may effectuate or be the subject of a
Transfer, a Change of Control, or any other direct or indirect transfer of its
Membership Interest that would result in a termination of the Company for
purposes of Section 708 of the Code only if the transferring Member meets the
requirements of this Section 7.1(f) and otherwise complies with the applicable
provisions of this Article 7. Prior to any Transfer, Change of Control, or other
transfer that would result in such a termination after the Interim Period, the
applicable Member or its Parent or its designee must offer to pay to each other
Member(s) prior to the applicable action in cash the amount (the “Make-whole
Amount”) necessary to hold that other Member(s) harmless against any deferral of
state or federal income tax depreciation or other increase in liability for such
tax (including any change in the present value of such liability) that such
termination would cause. For purposes of calculating the Make-whole Amount, such
other Member(s) will be treated as if they are corporations for federal and
state income tax purposes. In the case of any Transfer, Change of Control, or
other transfer that would result in such a termination, and to which this
Section 7.1(f) applies, the Make-whole Amount for each Member entitled to be
paid that amount will be computed on a net present value basis using: (i) the
Agreed Rate in effect on the date of payment and (ii) the highest marginal
applicable state and federal corporate income tax rates for the year of payment
and (iii) the end date of the Primary Term as the latest date for the period of
calculation. Using those same highest marginal rates, the amount that is
determined pursuant to the preceding sentence will be grossed up such that the
increased amount reduced by the state and federal income tax that are deemed
paid by reason of the receipt thereof is equal to the amount that is determined
pursuant to the preceding sentence. If the applicable state income tax is
deductible for federal income tax purposes, effect will be given to that
deduction in calculating the Make-whole Amounts. Each Member may accept this
payment or, at its sole option, receive full indemnity on such after-tax basis
from the applicable Member for all state and federal income tax impacts relating
to that Member directly resulting from the Section 708 termination. Neither the
Company nor any Member shall be bound or otherwise affected by any Transfer of
any Membership Interest of which such Person has not received notice pursuant to
Section 7.3 below.
(g)    Except as specifically provided under Section 7.2(c) or 7.2(d) below, a
Member in Default shall not effect or permit a Transfer of all or any portion of
its Membership Interest.
7.2    Permitted Transfers and Right of First Refusal.

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EXECUTION VERSION

(a)    Transfers Not Subject to Section 7.2(b).
(i)    After the Interim Period, any Member may Transfer all but not less than
all of its Membership Interest to a Wholly-Owned Subsidiary of its Parent
without such Transfer being subject to the right of first refusal set forth in
Section 7.2(b); provided that (A) any such Transfer otherwise complies with the
terms of this Agreement and (B) such Wholly-Owned Subsidiary either meets the
Credit Standards or delivers to the Company and other Members a Guaranty
Agreement from a Creditworthy Affiliate of such Wholly-Owned Subsidiary, as
guarantor of the Wholly-Owned Subsidiary’s assumed obligations.
(ii)    After the Interim Period, each of the Kinder Morgan Member and the Shell
Member may Transfer one time up to a ten percent (10%) Membership Interest to
one Person (i.e., one Person transferee with respect to the Kinder Morgan Member
and one Person transferee with respect to the Shell Member, regardless of
whether or not the percentage Membership Interest transferred is less than or
equal to the ten percent (10%) limit), without such Transfer being subject to
the right of first refusal set forth in Section 7.2(b); provided that (A) any
such Transfer otherwise complies with the terms of this Agreement and (B) in
connection with any such Transfer to such Person, such Person either meets the
Credit Standards or delivers to the Company and other Members a Guaranty
Agreement from a Person that meets the Credit Standards, as guarantor of such
transferee’s assumed obligations.
(iii)    Any Member may Transfer all or any portion of its Membership Interest
to a Person without being subject to the right of first refusal set forth in
Section 7.2(b); provided that (A) such Transfer is approved by the Board by
Unanimous Consent, which Unanimous Consent states that such Transfer is not
subject to such right of first refusal and (B) such Transfer otherwise complies
with the terms of this Agreement.
(b)    Right of First Refusal.
(i)    Any Member may Transfer all, but not less than all, of its Membership
Interest to a Person other than those authorized in Section 7.2(a) under the
terms of this Section 7.2(b); provided that such Transfer and Transferee
otherwise complies with the terms of this Agreement.
(ii)    Except with respect to Transfers according to the terms of
Section 7.2(a), any Member who receives, and desires to accept, a Qualifying
Offer for the Transfer (or whose Affiliate receives and desires to accept, a
Qualifying Offer for the Transfer, or is obligated to enter into a transaction
which, is a Qualifying Offer and which, if consummated, would constitute a
Transfer) of all or any portion of its Membership Interest (such Member and any
other Member deemed to have made a Transfer under Sections 7.2(c) or 7.2(d),
each a “Transferring Member”) to a ready, willing and able Transferee shall
first offer to transfer such Membership Interest (the “Subject Interest”) to the
other Member(s) (the “Non-Transferring-Members”) as a group for each
Non-Transferring Member’s proportionate share of the Subject Interest based on
the Non-Transferring Member’s Membership Interest. Such offer shall be made by
an irrevocable written offer (the “Offer Notice”) to transfer all or, as
applicable, if there is more than one Non-Transferring Member, a portion of the
Subject Interest which the Transferring Member desires to Transfer and shall
contain a complete description of the price and other terms and conditions of
the transaction

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EXECUTION VERSION

in which the Transferring Member proposes to Transfer the Subject Interest,
including, without limitation, the name of the ready, willing and able
Transferee, the consideration specified, the proposed closing date of the
transaction, and a copy of the Qualifying Offer. Each Non-Transferring Member
shall have 30 days (the “Option Period”) after actual receipt of the Offer
Notice within which to give notice to the Transferring Member (the “Purchase
Notice”) whether or not it wishes to acquire all of such Subject Interest upon
the terms and conditions contained in the Offer Notice. Each Non-Transferring
Member may, in its Purchase Notice, offer to purchase more than its pro rata
share of the Subject Interest (any such Non-Transferring Member, an
“Oversubscribing Purchaser”). If one or more Non-Transferring Members do not
elect to acquire their pro rata shares of the Subject Interest (the
“Unsubscribed Interests”), the Unsubscribed Interests shall be allocated pro
rata among the Oversubscribing Purchasers based on the Membership Interests of
each Oversubscribing Purchasers (provided that the portion of the Unsubscribed
Interests allocated to any Oversubscribing Purchaser shall not exceed the
percentage of the Unsubscribed Interests that it offered to purchase in its
Purchase Notice), or in such proportions as the Oversubscribing Purchasers may
otherwise agree. If after such allocation there remain any Unsubscribed
Interests that have not been so allocated, then the allocation process provided
for in the preceding sentence shall be successively repeated with respect to
each Oversubscribing Purchaser which has been allocated a percentage of the
Unsubscribed Interests that is less than the percentage of the Unsubscribed
Interests that it offered to purchase in is Purchase Notice, until all the
Unsubscribed Interests have been allocated. The right herein created in favor of
the Non-Transferring Members as a group is an option to acquire all, or none, of
the Subject Interest offered for sale by the Transferring Member.
(iii)    If, within the Option Period, one or more Non-Transferring Members
elect to acquire such Subject Interest, then such Non-Transferring Member or
Members shall close such transaction in accordance with this Section 7.2(b) no
later than the later to occur of (i) the closing date set forth in the Offer
Notice and (ii) the date that is sixty (60) days after the last day of the
Option Period.
(iv)    If the Non-Transferring Members as a group do not elect to acquire all
of the Subject Interest of the Transferring Member in accordance with this
Section 7.2(b), the Transferring Member may Transfer such Subject Interest to
the Transferee named in the Offer Notice delivered to the Non-Transferring
Members upon the terms described in such Offer Notice. If such Transfer does not
occur in accordance with the terms of such Offer Notice, such attempted Transfer
shall be null and void ab initio and the Transferring Member shall again be
subject to the provisions of this Section 7.2(b).
(v)    Upon consummation of any such Transfer (whether to a Member or any other
Person), such Transferee and its Membership Interest shall become a party to and
be bound by this Agreement and such Transferee shall thereafter have all of the
rights and obligations of a Member hereunder at such time as it has complied
will all other conditions for becoming a Substituted Member under Section 7.5.
(c)    Encumbering Member. No Member may grant or suffer a Security Interest on
all or any portion of its Membership Interest without the Unanimous Consent of
the Directors.

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EXECUTION VERSION

Notwithstanding such prohibition, if any Member (“Encumbering Member”) should
permit or suffer a Security Interest on any of its Membership Interests
(“Encumbrance”) without the Unanimous Consent of the Directors, the Encumbering
Member shall be obligated to notify the other Members in writing (and such
notice shall be the Offer Notice) and the Encumbrance shall be deemed to be a
Qualifying Offer from the other Members to purchase all the Membership Interests
of the Encumbering Member at eighty percent (80%) of the Fair Market Value of
such Membership Interest subject to the Encumbrance and, therefore, a Subject
Interest offered to other Members under Section 7.2(b) at a price equal to
eighty percent (80%) of the Fair Market Value of such Membership Interest. Such
Encumbering Member shall be obligated to sell its Membership Interest in
accordance with Section 7.2(b) and this Section 7.2(c). If an Encumbrance is
approved under the terms of this Section 7.2(c), and a creditor or
trustee-in-bankruptcy forecloses upon all or any portion of the Membership
Interests of an Encumbering Member by a legal or equitable proceeding, the
Encumbering Member shall be obligated to notify the other Members in writing
(and such notice shall be the Offering Notice) and the Transfer shall be deemed
to be a proposed Transfer of all the Membership Interests subject to the
Encumbrance and, therefore, a Subject Interest offered to other Members under
Section 7.2(b) at a price equal to the Fair Market Value of such Membership
Interest, and such Encumbering Member shall be obligated to sell its Membership
Interest in accordance with Section 7.2(b) and this Section 7.2(c); provided,
however, that if the Encumbering Member removes the Encumbrance from the
Membership Interest within thirty (30) days after the Offer Notice, the Offer
Notice shall be deemed to have not taken place and the right to purchase the
Subject Interest shall terminate.
(d)    If a Member (i) undergoes a Change in Control, (ii) is dissolved and
wound up (unless the sole distributee of the Member’s Membership Interest is a
Wholly-Owned Subsidiary or Parent of the Person that was such Member’s Parent
immediately prior to such event or series of related events), or (iii) becomes a
Bankrupt Member, the affected Member (the “Affected Member”) shall be obligated
to notify the other Members in writing of such occurrence (and such notice shall
be deemed to be the Offer Notice) and such Affected Member shall be deemed a
Transferring Member making a proposed Transfer after receipt of a Qualifying
Offer for all of the Affected Member’s Membership Interests at the Fair Market
Value of such Membership Interest and, therefore, a Subject Interest offered to
other Members under Section 7.2(b) at a price equal to the Fair Market Value of
such Membership Interest, and such Affected Member shall be obligated to sell
its Membership Interest in accordance with Section 7.2(b) and this Section
7.2(d); provided, however, that if the Affected Member removes, corrects or
reverses such occurrence within thirty (30) days after the date of such Offer
Notice, the Offer Notice shall be deemed to have not taken place and the right
to purchase the Subject Interest shall terminate.
(e)    Whenever the Fair Market Value of a Membership Interest is determined as
a result of a deemed Transfer under Sections 7.2(c) or 7.2(d), the Fair Market
Value shall be determined as of the last day of the calendar month immediately
preceding the occurrence of the Encumbrance or foreclosure, Change in Control,
dissolution, bankruptcy, as applicable, that is deemed a Transfer, except that
such determination shall take into account such occurrence. Such determination
shall also take into account the restrictions on transfer of the Membership
Interests under the securities laws or provided for in this Agreement and the
lack of liquidity of the Membership Interests.

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EXECUTION VERSION

(f)    Whenever an option arises as a result of a deemed Transfer under Sections
7.2(c) or 7.2(d), the Option Period shall begin upon the occurrence of the event
constituting the deemed Transfer and shall continue until the end of the stated
period following the giving of the notification to the other Members referenced
in the applicable provision of Sections 7.2(c) or 7.2(d).
(g)    At the closing of the Transfer of a Membership Interest pursuant to this
Agreement, the Transferee shall deliver to the Transferring Member the full
consideration agreed upon. Any membership interest transfer or similar taxes
involved in such sale shall be paid by the Transferring Member, and the
Transferring Member shall provide the Transferee with evidence of the
Transferring Member’s authority to Transfer hereunder and such tax lien waivers
and similar instruments as the Transferee may reasonably request.
(h)    If any governmental consent or approval or compliance with any waiting
period is required with respect to any Transfer, the Transferee shall have a
reasonable amount of time (not to exceed 180 days from the date upon which such
Transfer would have been otherwise consummated in accordance with the terms of
this Agreement) to obtain such consent or approval. All Members shall use
reasonable, good faith efforts to cooperate with the Transferee attempting to
obtain, and to assist in timely obtaining, such consent or approval; provided
that no Member shall be required to incur any out-of-pocket costs or additional
liability in connection with such cooperation and assistance. After the
expiration of such waiting period, such Transferee shall forfeit its rights to
acquire the Subject Interest with respect to such specific transaction;
provided, however, that such forfeiture shall not limit or otherwise affect the
forfeiting Transferee’s rights with respect to any subsequent proposed Transfer
made in accordance herewith.
(i)    No Transfer of a Membership Interest shall affect a release of the
Transferring Member (or its applicable Affiliates) from any liabilities or
obligations to the Company or the other Members that accrued prior to the
Transfer.
(j)    If SUSGP or SLC has closed the acquisition of all of the ELC Facilities
under an Option Notice pursuant to Section 8.4(c) below, then SLC shall have a
period of thirty (30) days beginning on the date of such closing of the sale of
the ELC Facilities, to elect to purchase all (but not less than all) of the
Membership Interest of SUSGP by delivering a written notice (a “Purchase
Notice”) to SUSGP stating that it elects to purchase such Membership Interests
for a purchase price equal to the amount that would be distributed to SUSGP in
the event of dissolution of the Company as provided in Section 8.3 below. Any
Purchase Notice so delivered shall be binding upon delivery and irrevocable by
SLC. If SLC provides a Purchase Notice, SLC and SUSGP shall take such action as
may be necessary to enter into a definitive membership assignment agreement
within thirty (30) days of the date of the determination of the purchase price
for SUSGP’s Membership Interests. In such membership assignment agreement, SUSGP
will provide representations, warranties, covenants and indemnities in
connection with such transaction, and such representations, warranties,
covenants and indemnifications shall be limited to customary fundamental
representations and warranties of (i) SUSGP’s title to its Membership Interests,
free of all liens and encumbrances, and (ii) SUSGP’s authority, power and right
to enter into and consummate the transaction without violating any other
Transaction Agreement or applicable law. SUSGP’s liability under the definitive

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membership assignment agreement with respect to such transaction will not exceed
the total purchase price paid by SLC and received by SLC in such transaction,
except for liability resulting from fraud or knowing and intentional breach.
7.3    Documentation; Validity of Transfer. The Company shall not recognize for
any purpose any purported Transfer of all or any part of a Membership Interest
unless and until (a) the applicable provisions of Sections 7.2 and 7.5 and this
Section 7.3 have been satisfied, (b) each Member has received prior written
notice of any proposed Transfer under Section 7.2(a) and (c) the Company has
received, on behalf of the Company, a document in a form acceptable to the
Company executed by both the Transferring Member (or if the Transfer is on
account of the death, incapacity, or liquidation of the Member, its
representative) and the Transferee. Such document shall (i) include the notice
address of the potential Transferee and such Person’s agreement to be bound by
this Agreement with respect to the Membership Interest or part thereof being
obtained, (ii) set forth the Membership Interest after the Transfer of the
Transferring Member and the Person to which the Membership Interest or part
thereof is Transferred (which together must total the Membership Interest of the
Transferring Member before the Transfer), (iii) contain a representation and
warranty that the Transfer was made in accordance with all Laws (including state
and federal securities Laws) and the terms and conditions of this Agreement,
(iv) include a legally binding agreement of the Transferee to be bound by this
Agreement as a Member of the Company from and after the date such Transferee
becomes a Member and (vi) if the Person to which the Membership Interest or part
thereof is Transferred is to be admitted to the Company as a Member, its
representation and warranty that the representations and warranties in Section
3.1 (with respect to SUSGP) are true and correct with respect to such Person.
Each Transfer and, if applicable, admission complying with the provisions of
this Section 7.3 and Sections 7.1, 7.2 and 7.5(b) is effective against the
Company as of the first Business Day of the calendar month immediately
succeeding the month in which (y) the Company receives the document required by
this Section 7.3 reflecting such Transfer, and (z) the other requirements of
Sections 7.1, 7.2 and 7.5(b) have been met.
7.4    [Intentionally Omitted].
7.5    Additional Members; Substituted Members.
(a)    Additional Persons, including Transferees, may be admitted to the Company
as Members or Substituted Members only as provided under the terms of this
Section 7.5. Any admission of an additional Member (including a new Member for
new value provided to the Company) involving the issuance of additional
Membership Interests requires the approval of the Board by Required Consent.
Such Required Consent associated with the admission of a new Member for new
value will approve the adjustments, if any, made to the existing Members’
Membership Interests to reflect such admission. Any Transferee with respect to a
Transfer made in accordance with Sections 7.2(a) or 7.2(b) shall be admitted
automatically as a Substituted Member upon compliance with the applicable
portions of Sections 7.1, 7.2, 7.3 and 7.5(b) with respect to such Transfer,
without Required Consent or the further consent or approval of the
Non-Transferring Member(s); provided, however, that any Transferee that is not
already a Member at the time of the Transfer and acquires a Membership Interest
by foreclosure shall not be admitted as a Substituted Member without the
Required Consent of the Board. In connection with the admission of any new

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Member, Schedule 1 hereof shall be amended to reflect the name, address and
Membership Interest of the new Member.
(b)    Notwithstanding anything to the contrary contained herein, a Person may
be admitted as a new Member or Substituted Member only if (i) such Person either
meets the Credit Standards or delivers to the Company and the other Members a
Guaranty Agreement from a Creditworthy Affiliate of such Person, as guarantor,
and (ii) such Person is an Eligible Person.
(c)    If the admission of any new Member (other than a Substituted Member)
pursuant to this Section 7.5 occurs, the Membership Interests of the Members
will be reduced pro rata to reflect such admission in accordance with the terms
of the Required Consent by which the new Member was admitted so that the total
Membership Interests of all Members equal 100% on a percentage basis.
(d)    Upon becoming a Substituted Member, (i) such Substituted Member shall
have all of the powers, rights, privileges, duties, obligations and liabilities
of a Member, as provided in this Agreement and by Laws to the extent of the
Membership Interest so Transferred; (ii) the Membership Interest of the
Transferring Member shall be reduced by the Membership Interest so Transferred;
and (iii) the Member who Transferred the Membership Interest (and its guarantor)
shall be relieved of all of the obligations and liabilities with respect to the
Membership Interest so Transferred; provided that such Member (and its
guarantor) shall remain fully liable for all liabilities and obligations
relating to such Membership Interest that accrued prior to the applicable
Transfer and all liabilities and obligations relating to any remaining
Membership Interest still held by the Member.
7.6    Fair Market Value.
(a)    The Fair Market Value of the Subject Interest deemed to be Transferred
under Sections 7.2(c) or 7.2(d) shall be determined by mutual agreement of the
Transferring Member (or its representative) and the Non-Transferring Members;
provided, however, that if such Persons do not agree on the Fair Market Value of
such Subject Interest or Membership Interest during the first 30 days of the
Option Period, then (i) any Member, by written notice to the other Members (the
“Valuation Notice”), may require the determination of Fair Market Value to be
made in accordance with Section 7.2(b), and (ii) the “Option Period” shall
thereafter be extended until the 20th day following the final determination of
Fair Market Value in accordance with the terms thereof.
(b)    If a Valuation Notice is given pursuant to Section 7.6(a), then the
Transferring Member, on the one hand, and the Non-Transferring Members
collectively, on the other hand, will each select and engage an investment and
banking or other appraisal firm (each, an “Appraiser”), each of which Appraisers
will (i) perform its own appraisal with respect to the Fair Market Value of such
Subject Interest or Membership Interest, and (ii) agree, with the other
designated Appraiser, to select a third Appraiser, which will perform its own
appraisal with respect to the Fair Market Value of such Subject Interest or
Membership Interest. Each of the three designated Appraisers will perform its
appraisal and communicate its final valuation to the parties, and the Fair
Market Value (which will be determined within 90 days following the Valuation
Notice), will equal the arithmetic average of the two closest valuations thus
delivered. In the event one of the three

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valuations is the arithmetic average of the other two valuations, then the final
valuation will equal such arithmetic average. The Fair Market Value as
determined in accordance with this Section 7.6(b) shall be final and binding on
the parties. The Transferring Member, on the one hand, and the Non-Transferring
Members who have not irrevocably withdrawn as potential purchaser(s) prior to
the date of the engagement by the Non-Transferring members of the Appraiser
selected by them, collectively, on the other hand, will be responsible for the
cost of the Appraiser selected by such Member(s), and will split the costs of
the third Appraiser on a 50/50% basis. The Company shall, and shall instruct the
Operator to, provide the independent appraiser with all information and data
reasonably necessary to make a determination of Fair Market Value, subject to a
customary confidentiality agreement.
(c)    Unless otherwise agreed to by the Transferring Member and the
Non-Transferring Members who have elected to acquire a portion of such Subject
Interest or Membership Interest, the purchase price for such Subject Interest or
Membership Interest shall be payable only in cash.
7.7    Distributions and Allocations Upon Transfers. If during any Fiscal Year
there is a Permitted Transfer of an interest in the Company in compliance with
the provisions of this Article 7, Profits and Losses, each item thereof, and all
other items attributable to the Transferred Membership Interest for such period
shall be divided and allocated between the Transferor and the Transferee by
taking into account their varying interests during the period in accordance with
Code Section 706(d), using any conventions permitted by law and selected by the
Board. All distributions of Available Cash Flow (with respect to the Transferred
Membership Interest) on or before the date of the Transfer shall be made to the
Transferor, and all distributions thereafter (with respect to the Transferred
Membership Interest) shall be made to the Transferee. Neither the Company, the
Operator, nor any Director shall incur any liability for making allocations and
distributions in accordance with the provisions of this Section 7.7.
7.8    Certificates. As permitted by the Act, interests in the Company may be
(but are not required to be) represented by certificates, and the Company shall
issue such a certificate to any Member who reasonably requests such a
certificate.
7.9    Additional Members/Directors. In connection with the admission of
additional Members (including new Members or Substituted Members) in accordance
with Section 7.5, the Board by Required Consent may designate such additional
Members as “Controlling Members” for the purposes of this Agreement. In
connection with any such designation, Schedule 2.1 shall be amended to reflect
the name of any additional Controlling Member and the additional Director
appointed by such Controlling Member. The admission of additional Members under
Section 7.5 does not by itself create a requirement or obligation by the Members
or Board to create or appoint additional Directors, grant “Controlling Member”
status to any Member or dilute the voting rights of the existing Directors under
Section 4.1 above.
SECTION 8
EVENTS OF DISSOCIATION;
WITHDRAWAL; DISSOLUTION

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8.1    No Withdrawal or Dissolution. No Member shall at any time withdraw,
resign or retire from the Company under Section 18‑603 of the Act or otherwise.
No Member shall take any action to dissolve the Company except as expressly
contemplated by this Agreement. Each Member covenants not to apply to any court
for a decree of dissolution of the Company, under Section 18‑802 of the Act or
otherwise.
8.2    Dissolution Events. The Company shall dissolve and commence winding up
and liquidating upon, and only upon, the first to occur of the following events
(“Dissolution Events”):
(a)    The unanimous determination of the Members that the Company shall be
dissolved;
(b)    By notice from any Original Member to the other Members, if (i) the LSA
terminates under its terms other than in circumstances giving rise to a Design
Failure Dissolution Event or expires at the end of the Primary Term or Extended
Term (as applicable) and (ii) neither the Shell Member nor the Kinder Morgan
Member elect to purchase the ELC Facilities as provided in Section 8.4(a) or
(b), as applicable;
(c)    By notice from any Original Member to the other Member if the LSA is
terminated by SNALNG pursuant to Section 5.01(f) of the LSA and the cause for
such inability to meet the Final In-Service Deadline Date (as such term is
defined in the LSA) is a defect, flaw, or failure in the Basis for Design (as
such term is defined in the LSA) (the Dissolution Event under this Section
8.2(c) is herein referred to as the “Design Failure Dissolution Event”);
(d)    By notice from any Original Member to the other Members to dissolve
because any of the Transaction Agreements have not been signed and delivered by
each of the applicable parties thereto (including such Member or its Affiliates)
by the one hundred and eightieth (180th) day after the Effective Date hereof.
(e)    By notice from any Original Member to the other Members if the Shell
Member or Kinder Morgan Member elects to purchase all of the ELC Facilities
pursuant to Section 8.4 below and the Kinder Morgan Member does not exercise its
rights to purchase the Shell Member’s Membership Interest as provided in Section
7.2(j) above; or
(f)    Upon the occurrence of any event that causes a Member to become a
Bankrupt Member, by notice from any Original Member (other than such Bankrupt
Member) to the other Members.
Except as provided above in Section 8.2, no event that causes a Member to cease
to be a member of the Company shall cause the Company to dissolve. The Members
may extend the date of a Dissolution Event beyond the time periods set forth
above upon approval of the Board by Unanimous Consent if necessary to avoid an
automatic dissolution of the Company.
8.3    Winding Up. Upon the occurrence of a Dissolution Event, the Company shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Members.
During the period commencing on the date

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on which a Dissolution Event occurs and ending on the date on which the assets
of the Company are distributed pursuant to this Section 8.3, Profits and Losses
and other items of Company income, gain, loss, or deduction shall continue to be
allocated in the manner provided in Section 6.3 hereof. During such period, no
Member shall take any action that is inconsistent with, or not necessary to or
appropriate for, the winding up of the Company’s business and affairs. The Board
or any Person (the “Liquidating Trustee”) designated by the Board shall be
responsible for overseeing the winding up of the Company. In the event of a
Design Failure Dissolution Event, SUSGP will unwind the sale of all the MMLS
Units purchased by the Company from SUSGP and reimburse to Company the purchase
price paid by the Company to SUSGP under the MMLS Purchase Agreement(s). Subject
to the further provisions of this Section 8.3, the assets of the Company shall
be liquidated to the extent determined to be appropriate by the Board or
Liquidating Trustee, but in no event at a price that is less than salvage value
of the ELC Facilities, and, after the Company has paid for the ELC Facilities to
be removed from the Elba Terminal as required under the Land Lease, the proceeds
thereof, together with such assets as the Board determines to distribute in kind
(valued at the Gross Asset Value thereof), shall be applied and distributed in
the following order:
(a)    First, to creditors, including Members who are creditors, to the extent
otherwise permitted by law, in satisfaction of liabilities of the Company
(whether by payment or by making of reasonable provision for payment) other than
liabilities for Distributions to Members on account of their respective
interests in the Company; and
(b)    The balance, if any, to the Members to the extent of, and in proportion
to, the positive balances of their respective Capital Accounts.
8.4    Options Prior to Dissolution upon Expiration or Termination of the LSA.
(a)    In the event ELC receives notice during the Primary Term of the LSA the
LSA in whole or in part is scheduled to be terminated other than as a result of
(i) a termination of the LSA by SNALNG under Section 5.01(f) of the LSA in
circumstances giving rise to a Design Failure Dissolution Event or (ii) an Event
of Default by SNALNG, on or subsequent to *** of the Liquefaction Threshold Date
as defined in the LSA where such termination is associated with the production
of the Phase I and Phase II ELC Facilities in aggregate or the Phase II ELC
Facilities only; *** the Shell Member first and, absent the Board’s decision to
find another use for the ELC Facilities affected by the termination or partial
termination of the LSA, then the Kinder Morgan Member (each potentially a
“Purchasing Member”), upon election by such Purchasing Member and acceptance by
Company of a Primary Term Option Notice (as defined below) shall have the option
to purchase and remove the Phase I ELC Facilities (as a group) and/or the Phase
II ELC Facilities (as a group), that are affected by the LSA termination or
partial termination, as applicable.
Such ELC Facilities to be purchased shall include the MMLS Units and any and all
appurtenant and ancillary facilities that are used in conjunction with the
operation of the MMLS Units which are not needed by the Company to sufficiently
operate the remaining ELC Facilities that are not being purchased, if any ELC
Facilities are to remain with Company. ***.
(b)    Any Primary Term Option Notice so delivered after receipt of the final
valuation shall be binding upon delivery and irrevocable by the

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Purchasing Member, subject solely to the termination of the LSA or portion
thereto, as specifically provided above.
(c)    After the LSA has terminated at the end of the Primary Term or any
extension thereof (as such may be extended under the terms thereof, the
“Extended Term”), whichever is longer, the Board shall hold a Request for
Proposal (“RFP”) to solicit binding bids for the purchase and sale of the ELC
Facilities, including the MMLS Units and any and all appurtenant and ancillary
facilities that are used in conjunction with the operation of the MMLS Units
affected by such whole or partial LSA termination ***.
(d)    If SUSGP or SLC provides the Expiration Option Notice or a Primary Term
Option Notice (such Expiration Option Notice, together with the Primary Term
Option Notice herein collectively referred to as the “Option Notice”), the
Company and SUSGP or SLC shall take such action as may be necessary to enter
into a definitive sales agreement within thirty (30) days of the date of the
Option Notice to transfer the ELC Facilities to SUSGP or SLC. In any such sales
agreement the Company will provide representations, warranties, covenants and
indemnities in connection with such transaction, and such representations,
warranties, covenants and indemnifications shall be limited to customary
fundamental representations and warranties of (i) the Company’s title to the ELC
Facilities, free of all liens and encumbrances; (ii) Company’s proprietary
rights in the ELC Facilities; and (iii) the Company’s authority, power and right
to enter into and consummate the transaction without violating any other
Transaction Agreement or applicable law. The Company’s liability under the
definitive sales agreement with respect to such transaction will not exceed the
total purchase price paid by SUSGP or SLC and received by the Company in such
transaction, except for liability resulting from fraud or knowing and
intentional breach. In any such sales agreement between SUSGP and Company, SUSGP
shall be obligated to remove the ELC Facilities from the Elba Terminal within a
defined period of time that is reasonable to SLNG at SUSGP’s sole cost and
expense, SLNG shall perform or arrange to perform the disconnection of the ELC
Facilities from the SLNG Facilities and Twin 30s Pipelines at SUSGP’s sole cost
and expense, and SUSGP shall indemnify the Company for any and all liabilities
arising from or related to such removal. Company shall act reasonably to
accommodate SUSGP to schedule the removal of the applicable ELC Facilities. In
any such sales agreement between SLC and Company, SLC shall not be required to
remove the ELC Facilities unless required to do so by SLNG.
(e)    In the event no bids as provided in Section 8.4(c) are received at the
conclusion of the RFP, or neither SUSGP nor SLC elect to purchase the ELC
Facilities as provided in Section 8.4(a) or 8.4(c) above, the Board may elect to
sell the ELC Facilities ***.
8.5    No Deficit Capital Account Makeup Obligation. No Member with a deficit
balance in its Capital Account shall have any obligation to make any
contribution to the capital of the Company with respect to such deficit, and
such deficit shall not be considered a debt owed to the Company or to any other
Person for any purpose whatsoever.
8.6    Deemed Contribution and Distribution. Notwithstanding any other provision
of this Section 8, if the Company is liquidated within the meaning of
Regulations Section 1.704‑1(b)(2)(ii)(g) but no Dissolution Event has occurred,
the property of the Company shall not be liquidated, the Company’s debts and
other liabilities shall not be paid or discharged, and the Company’s affairs

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shall not be wound up. Instead, solely for federal income tax purposes, the
Company shall be deemed to have contributed all of its assets and liabilities to
a new limited liability company in exchange for an interest in such new company
and, immediately thereafter, the Company will be deemed to liquidate by
distributing interests in the new company to the Members.
8.7    Limitations on Rights of Members. (a) Each Member shall look solely to
the assets of the Company for the return of its Capital Contribution as provided
in Section 8.3 above, and (b) no Member shall have priority over any other
Member or the right to obtain from any other Member the return of its Capital
Contribution, Distributions, or allocations of Profits or Losses.
8.8    Certificate of Cancellation. Upon the dissolution and the completion of
winding up of the Company, the Members shall promptly execute and cause to be
filed a certificate of cancellation in accordance with the Act and appropriate
instruments under the laws of any other states or jurisdictions in which the
Company has engaged in business. Upon such Certificate of Cancellation becoming
effective, the Company shall be terminated.
8.9    Deficit Capital Accounts. In the event the Company is liquidated within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be
made pursuant to this Article 8 to the Members who have positive Capital
Accounts in compliance with Regulations Section 1.704(b)(2)(ii)(b)(2).
SECTION 9
INVESTMENT REPRESENTATIONS OF THE MEMBERS
9.1    Investment Intent. Each Member does hereby represent and warrant to the
Company that such Member has acquired such Member’s interest in the Company
solely for investment for such Member’s own account with the intention of
holding such interest for its own investment, without any intention of
participating directly or indirectly in any distribution of any portion of such
interest, and without the financial participation of any Third Party in
acquiring such Member’s interest in the Company.
9.2    Restrictions on Transfer. Each Member does hereby acknowledge that
(a) such Member is aware that such Member’s interest in the Company is subject
to the restrictions on transfer and other terms and conditions set forth in this
Agreement and may not be offered for sale, pledged, hypothecated, sold,
assigned, or transferred at any time except in compliance with the terms and
conditions hereof; (b) such Member will be required to bear the risk of its
investment for an indefinite period of time; (c) such Member’s interest in the
Company has not been registered (i) under any state securities laws (the “State
Acts”), (ii) under the United States Securities Act of 1933, as amended (the
“Federal Act”), or (iii) under the securities laws of any foreign jurisdiction
(the “Foreign Acts”), and neither such interest nor any part thereof may be
offered for sale, pledged, hypothecated, sold, assigned, or transferred at any
time except in compliance with the terms and conditions of this Agreement and
(1) pursuant to an effective registration statement under any applicable State
Acts or in a transaction that is exempt from registration under such State Acts
or for which such registration otherwise is not required, (2) pursuant to an
effective registration statement under the Federal Act or in a transaction that
is exempt from registration under the Federal Act or for which such registration
otherwise is not required, and (3) pursuant to an effective

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registration statement under any applicable Foreign Acts or in a transaction
that is exempt from registration under any applicable Foreign Acts or for which
such registration is not otherwise required. Each Member further understands and
acknowledges that such Member’s representations and warranties contained in this
Section 9 are being relied upon by the Company as the basis for the exemption of
the purchase of its interest in the Company from the registration requirements
of the Federal Act, the applicable State Acts, and the applicable Foreign Acts.
Each Member further acknowledges that the Company will not and has no obligation
to recognize any sale, transfer, or assignment of all or any part of such
Member’s interest in the Company to any person unless and until the provisions
of this Agreement have been fully satisfied.
SECTION 10
CONFIDENTIALITY
10.1    Confidential Information. The Members acknowledge that, from time to
time, they may receive information from or regarding the Company, its customers
or any other Member or its Affiliates in the nature of trade secrets or secret
or proprietary information or information that is otherwise confidential, the
release of which may be damaging to the Company or the Member or its Affiliates,
as applicable, or Persons with whom they do business (“Confidential
Information”). Each Member shall hold and shall direct its directors, officers,
employees, agents, advisors and representatives to hold in strict confidence any
such Confidential Information it receives and may not disclose such Confidential
Information to any Person other than another Member, except for disclosures (i)
to comply with any applicable laws or regulations, including any tax or
securities filings required under the Code or the Act, (ii) to Affiliates,
advisors, agents or representatives of the Member or Persons to which that
Members’ Membership Interest may be Transferred as permitted by this Agreement,
but only if the recipients of such information have agreed to be bound by
provisions no less stringent than this Section 10.1, (iii) of information that a
Member also has received from a source independent of the Company and that such
Member reasonably believes such source obtained the information without breach
of any obligation of confidentiality, (iv) of information obtained prior to the
formation of the Company, provided that this clause (iv) shall not relieve any
Member or any of its Affiliates from any obligations it may have to any other
Member or any of its Affiliates under any pre-existing confidentiality
agreement, (v) to lenders, bankers, accountants, attorneys or advisors and other
representatives of Company or the disclosing Member with a need to know such
information, provided that the disclosing Member shall be responsible for such
representatives’ use and disclosure of any such information, (vi) of information
relating solely to the Company (and not relating to the other Member) to any
prospective acquirer of the assets or securities of a Member or any of its
Affiliates (including without limitation such Members’ Membership Interest),
whether by purchase, merger, consolidation or otherwise, so long as prior to
such disclosure such prospective acquirer agrees to be bound by confidentiality
restrictions which are at least as restrictive as the provisions of this Section
10, or (vii) of public information.
10.2    Remedies. The Members acknowledge that a breach of the provisions of
this Section 10 may cause irreparable injury to the Company or another Member
for which monetary damages are inadequate, difficult to compute, or both,
Accordingly, the Members agree that the provisions of this Section 10 may be
enforced by injunctive action or specific performance. Notwithstanding the
above, in no event shall any Member or its Affiliates be entitled to use the
Confidential

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Information for its own business interest not involving the Company or for any
purpose other than as a Member of the Company for the benefit of Company and its
Subsidiaries.
10.3    Disclosure of Certain Information. The Members acknowledge that, from
time to time, the Company may need information from any or all of such Members
for various reasons, including, without limitation, for complying with various
federal and state regulations and obtaining Government Approvals. Each Member
shall provide to the Company all information reasonably requested by the Company
within a reasonable amount of time from the date such Member receives such
request; provided, however, that no Member shall be obligated to provide such
information to the Company to the extent such disclosure (i) could reasonably be
expected to result in the breach or violation of any contractual obligation (if
a waiver of such restriction cannot reasonably be obtained) or applicable law or
regulations or (ii) involves secret, confidential or proprietary information
which, if disclosed, could reasonably cause harm to such Member or put its
business or financial interests at risks.
10.4    Survival. The obligations of each Member under this Section 10 shall
survive for a period of five (5) years from the occurrence of any (i) Transfer
by a Member of its entire interest in the Company pursuant to Section 7 above
and (ii) dissolution and winding-up of the Company pursuant to Section 8 above.
The foregoing time limits shall not apply, however, to any obligation on the
part of SLC to maintain the confidentiality of technical information provided to
Company by SUSGP or any of its Affiliates or technical information that is
subject to an obligation of confidentiality and/or restricted use on the part of
Company to SUSGP or any of its Affiliates.
SECTION 11
EXCULPATION AND INDEMNIFICATION
11.1    Exculpation. No Member, Director or Officer shall have any personal
liability whatsoever to the Company or any other Member, Officer or Director on
account of such Member’s, Officer’s or Director’s status as a Member, Officer or
Director or by reason of such Member’s, Officer’s or Director’s acts or
omissions as a Member in connection with the conduct of the business of the
Company; provided, however, that nothing contained herein shall protect any
Member, Officer or Director against any liability to the Company or the Members
to which such Member, Officer or Director would otherwise be subject by reason
of (i) any act or omission of such Member, Officer or its Directors that
involves actual fraud or willful misconduct or (ii) any transaction from which
such Officers or Directors derived improper personal benefit.
11.2    Indemnification by Company. Except as provided below, the Company shall
indemnify and hold harmless each Member and the Affiliates of any Member, each
Member’s Directors and alternate Directors, Officers and employees and agents of
the Company or the officers, employees or agents of any of the Members (each an
“Indemnified Person”) against any and all losses, claims, damages, expenses and
liabilities (including, but not limited to, any investigations, legal and other
reasonable expenses incurred in connection with, and any amounts paid in
settlement of, any action, suit, proceeding or claim) of any kind or nature
whatsoever that such Indemnified Person may at any time become subject to or
liable for by reason of (i) the formation, operation or termination of the
Company or (ii) death or injury to individuals while employed or engaged on
Company business and/or arising out of or connected with the performance of this
Agreement, including employees

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of Members seconded to the Company under the Shell TSA or the OSA, but not to
include a Member’s own employees, agents or representatives; provided however,
that no Indemnified Person shall be entitled to indemnification if and to the
extent that the liability otherwise to be indemnified for results from any act
or omission of such Indemnified Person that involves (i) such Indemnified
Person’s gross negligence, actual fraud or willful misconduct or (ii) breach of
contract by such Indemnified Person; further, provided, however, ***. The
indemnities provided hereunder shall survive termination of the Company and this
Agreement. Each Indemnified Person shall have a claim against the property and
assets of the Company for payment of any indemnity amounts from time to time due
hereunder, which amounts shall be paid or properly reserved for prior to the
making of distributions by the Company to Members. Costs and expenses that are
subject to indemnification hereunder shall, at the request of any Indemnified
Person, be advanced by the Company to or on behalf of such Indemnified Person
prior to final resolution of a matter, so long as such Indemnified Person shall
have provided the Company with a written undertaking to reimburse the Company
for all amounts so advanced if it is ultimately determined that the Indemnified
Person is not entitled to indemnification hereunder.

11.3    Nonexclusivity. The contract rights to indemnification and to the
advancement of expenses conferred in this Section 11 shall not be exclusive of
any other right that any Person may have or hereafter acquire under any statute,
agreement, vote of the Members or otherwise. Unless the context specifically
requires otherwise, the rights and remedies of the Parties hereunder are not
mutually exclusive; the exercise of one or more of the provisions hereunder will
not preclude the exercise of any other provision hereof.
11.4    Indemnification by Members. The Members hereby agree that each Member
shall, to the fullest extent permitted by applicable law, indemnify and hold
harmless the other Members and each Person who is or was a director, officer or
employee of such Member or any of its Affiliates, including, without limitation,
those Persons who at any time on or after the date of this Agreement shall be or
have been a Director or Officer of the Company, while acting in their capacity
as such or claimed against them solely by reason of their being a Director or
Officer, from and against any and all losses, claims, damages, expenses and
liabilities that may be incurred by each such Person in connection with or by
reason of (i) any action, suit or proceeding in which such Person may be
involved, or threatened to be involved, as a director, officer or employee of
such Member or any of its Affiliates or (ii) death or injury to such Member’s
employees, agents, or representatives while employed or engaged on Company
business and/or arising out of or connected with the performance of this
Agreement, except for those employees seconded to the Company under the KM TSA,
the Shell TSA or the OSA; provided, however, that this Section 11.4 shall not
apply to any such losses or claims resulting from (i) any Error or Omission of
such Person that involves such Person’s gross negligence or breach of duty or
such Person’s actual fraud or willful misconduct or (ii) any transaction from
which such Person derived improper personal benefit.
11.5    Authorization. Except as provided in Section 11.4 above, the Company
may, to the extent authorized from time to time by the Board, grant rights to
indemnification and to advancement of expenses to any employee or agent of the
Company to the fullest extent of the provisions of this Section 11 with respect
to the indemnification and advancement of expenses of Members of the Company.

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11.6    Survival. The agreements contained in this Section 11 shall survive (i)
any Transfer by a Member of its entire interest in the Company pursuant to
Section 7 above and (ii) any dissolution and winding-up of the Company pursuant
to Section 8 above for events or obligations that occur prior to such Transfer
or dissolution.
11.7    Other Proceedings. If any Member or Affiliate of a Member becomes
involved in legal proceedings unrelated to the business of the Company or
Related Agreements in which the Company is called upon to provide information,
give a deposition or otherwise respond to such claim or demand, the affected
Member will indemnify and hold harmless the Company against all costs and
expenses, including, without limitation, fees and expenses of attorneys and
other advisors or support staff incurred by the Company in preparing or
producing the required information or deposition or in resisting or limiting the
obligation of Company to disclose such information or respond to the request.

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SECTION 12
DEADLOCKS; DISPUTE RESOLUTION
12.1    Board Deadlocks and Disputes.
(a)    In the event of any Dispute, or if any matter or proposal requiring the
Required Consent or Unanimous Consent of the Board for approval thereof (x) is
brought before the Board and receives neither (1) at least the Required
Percentage voting for such matter or proposal nor (2) at least the Required
Percentage voting against (not including abstentions or other non-votes) such
matter or proposal or (y) is proposed by a Director to be brought before the
Board at a meeting thereof and a quorum is not present at three consecutive
meetings called for purposes including such matter or proposal (such
circumstances in (x) or (y) to this Section above collectively being referred to
as a “Board Deadlock”), then any Member wishing to submit such Dispute or Board
Deadlock to further negotiation in accordance with Section 12.1(a) (i) or (ii),
as applicable, may do so by giving written notice of further negotiation (1) in
the case of a Dispute, to the other Members that are Disputing Parties, and (2)
in the case of a Board Deadlock, to the other Controlling Members, in each case
containing a brief description of the nature of the Dispute or Board Deadlock to
be further negotiated and the position of the Member initiating further
negotiation.
(i)    In the event of a Dispute, the Disputing Parties shall first seek to
resolve the Dispute by negotiation between the senior management representatives
of each Disputing Party by meeting in person at least once; provided, however,
that unless otherwise agreed by the Disputing Parties, if the Disputing Parties
are unable to resolve such Dispute within thirty (30) days from receipt of the
written notice of the Dispute provided under Section 12.1(a) above, then either
Disputing Party shall be entitled to declare an Impasse as set forth in Section
12.1(b)(i) below.
(ii)    In the event of a Board Deadlock, upon receipt of the notice provided
under Section 12.1(a) above, the Board shall immediately meet at a time and
place mutually agreed upon or, if no time and place is agreeable, at the
principal office of the Company at 10:00 a.m. local time on the Fifth (5th)
Business Day after the date of receiving the notice of further negotiations to
attempt to resolve the Board Deadlock. Notwithstanding anything in this
Agreement to the contrary, if any Director does not attend such meeting such
that a Quorum is not reached to take action on the Board Deadlock, any Director
shall be entitled to declare an Impasse as set forth in Section 12.1(b)(ii)
below.
(b)    Further Negotiation.
(i)    If, at any meeting contemplated in Section 12.1(a)(i) above, the
Disputing Parties are unable to agree on a course of action to resolve such
Dispute, any Disputing Party may declare an impasse (an “Impasse”) by giving
written notice to each other Disputing Party (an “Impasse Notice”). Within
twenty (20) Business Days after receipt of such Impasse Notice, the chief
executive officer, president or a senior executive of the Parent of each
Disputing Party shall meet in a good faith effort to reach accords that will end
the Impasse. If a resolution is not effectuated by common accord that ends the
Impasse within thirty (30) days after the date that such senior executive
officers meet, any Disputing Party may declare a final Impasse (“Final Impasse”)

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by written notice to the Company and may, subject to Section 12.1(c) below,
pursue litigation under Section 12.4.
(ii)    If, at any meeting contemplated in Section 12.1(a)(ii) above, the Board
is unable to agree on a course of action to resolve such Board Deadlock, any
Director may declare an Impasse by giving an Impasse Notice to the other
Directors. Within twenty (20) Business Days after receipt of such Impasse
Notice, the chief executive officer, president or a senior executive of each
Parent of a Controlling Member shall meet in a good faith effort to reach
accords that will end the Impasse. If a decision is not made by common accord
that ends the Impasse within thirty (30) days after the date that such senior
executive officers meet, any Member may declare a Final Impasse by written
notice to the other Members.
(iii)    Prior to reaching a Final Impasse, the Board may decide to establish a
subcommittee to pursue a resolution of the Dispute or Board Deadlock or to frame
the Dispute or Board Deadlock for the executive meeting. The subcommittee shall
function in only an advisory capacity or as otherwise determined unanimously by
the Board. Each Controlling Member shall have the right to appoint a
representative to such subcommittee, but if the subcommittee does not reach a
resolution that resolves the Board Deadlock or Dispute within the timeframe
specified by the Board in establishing the subcommittee, then a Final Impasse
may be declared by any Member upon written notice to the other Members.
(c)    Matters for Resolution by an Expert.
(i)    If the Dispute is not resolved within ten (10) Business Days following
receipt of a notice of Final Impasse, then, to the extent such Dispute relates
to the payment (or non-payment) of Capital Contributions under Section 6.1
above, any Disputing Party shall be entitled to require resolution of such
Dispute through the arbitration process by an Expert under Section 12.1(d)
below.
(ii)    If a Board Deadlock is not resolved within ten (10) Business Days
following receipt of a notice of Final Impasse, then, to the extent such Board
Deadlock relates to: (A) the payment or nonpayment or reimbursement by Company
or the eligibility of any cost owed by Company to any Person under a Transaction
Agreement, (B) the inability of the Board to approve the Development Budget, any
Annual Budget or annual operating plan or any cash flow schedule in connection
with the Development Budget or the Annual Budget, or any amendment thereto, (C)
the disallowance or adjustment of costs pursuant to an audit finding, (D) the
development or construction of Phase I and Phase II, if applicable, including,
but not limited to, the timing or proceeding with development or construction
activities or the procurement of materials, or Company procedures and standards;
(E) performance standards or service interruptions by the Company under the LSA,
(F) Capital Contributions that have been approved by the Board as part of the
Development Budget or Annual Budget or Required Consent, valuation of the assets
of the Company to be liquidated upon the occurrence of a Dissolution Event as
set forth in Section 8.3 above or (I) any other matter that must be resolved by
the Board to ensure the safe and efficient operations of the Company, maintain
the Company’s finances, maintain the Company’s ongoing activities or prevent a
violation of or ensure compliance with the Laws, or regulations of any
Governmental Authority,

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any Disputing Party shall be entitled to require resolution of such Dispute or
Board Deadlock through the arbitration process by an Expert under Section
12.1(d) below.
(iii)    Except as specifically provided in this Section 12.1(c), no other
Disputes or Board Deadlocks shall be subject to arbitration by an Expert or any
other arbitration procedure, unless otherwise agreed by all of the Disputing
Parties or Members.
(d)    Upon written notice to the other Disputing Parties or Controlling Members
that a Disputing Party or Director has elected under Section 12.1(c)(i) or
12.1(c)(ii), respectively, above to submit a Dispute or Board Deadlock to
binding arbitration with an Expert for resolution, upon receipt of such written
notice from the Disputing Party or Director giving such notice, the Disputing
Parties or Members shall attempt to agree upon one mutually acceptable
independent and neutral Person with experience as an arbitrator with at least
ten (10) years’ experience as an expert in the commercial management and/or
operation and maintenance of liquefaction facilities (the “Expert”); provided
that if they are unable to do so within thirty (30) Business Days following the
notice, any Disputing Party or Director may request the regional office of the
CPR Institute covering Houston, Texas to designate the Expert, and, failing
designation by the regional office of the CPR Institute, any Disputing Party or
Director may in writing request the judge of the United States District Court
for the Southern District of Texas senior in terms of service to appoint the
Expert. If the Expert so chosen shall die, resign or otherwise fail or becomes
unable to serve as Expert, a replacement Expert shall be chosen in accordance
with this subsection (d).
(e)    The Disputing Party or Director, as applicable, that has requested
resolution by the Expert of an applicable Dispute or Board Deadlock (the
“Initiating Party”) set forth in Section 12.(c) above shall submit to the Expert
the matter to be decided and shall set forth the Initiating Party’s proposed
resolution of the matter submitted. Within ten (10) business days thereafter,
each other Disputing Party or Director, as applicable (the “Responding Party”)
shall submit to the Expert its respective response to the Initiating Party’s
description of the matter to be decided and shall set forth the Responding
Party’s proposed resolution of the matter. The Expert shall choose one (and only
one) of the proposed resolutions submitted by each party. The determination by
the Expert shall be final and binding upon the Parties. The cost of the process
of resolution by the Expert (including fees of the CPR Institute and the Expert)
shall be borne by the Party who proposed the resolution that was not chosen by
the Expert.
12.2    Applicability. Notwithstanding anything to the contrary contained
herein, the provisions of this Section 12 shall not apply to any matters among
or between the Members that are outside the business of the Company and/or this
Agreement or outside the Related Agreements.
12.3    Limitation on Liability. NOTWITHSTANDING ANY PROVISIONS CONTAINED IN
THIS AGREEMENT OR THE LSA OR THE MAO TO THE CONTRARY, NEITHER MEMBER NOR ITS
OFFICERS, DIRECTORS, PRINCIPALS, AGENTS, CONTRACTORS, SUBCONTRACTORS, VENDORS,
EMPLOYEES, AFFILIATES OR RELATED ENTITIES SHALL BE LIABLE TO THE OTHER FOR ANY
CLAIM FOR LOSS OF PROFITS OR ANY OTHER PUNITIVE, SPECIAL, CONSEQUENTIAL,
INCIDENTAL OR INDIRECT LOSSES OR DAMAGES, INCLUDING BUT NOT LIMITED TO, LOSS OF
REVENUE, LOSS OF CAPITAL, LOSS OF INTEREST, LOSS OF BUSINESS REPUTATION

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OR OPPORTUNITY WHETHER SUCH LIABILITY ARISES OUT OF CONTRACT, OR IS SUFFERED
OTHERWISE BY ANY OF THE OTHER MEMBERS. THE MEMBERS FURTHER AGREE THAT THIS
LIMITATION ON LIABILITY SHALL SURVIVE THE TERMINATION OR EXPIRATION OF THIS
AGREEMENT AND SHALL APPLY (WHETHER IN CONTRACT, EQUITY, TORT, STATUTE OR
OTHERWISE) EVEN IN THE EVENT OF THE FAULT, NEGLIGENCE (INCLUDING THE SOLE
NEGLIGENCE), STRICT LIABILITY OR BREACH OF WARRANTY OF THE MEMBER WHOSE
LIABILITIES ARE LIMITED. THIS LIMITATION SHALL NOT, HOWEVER, LIMIT A MEMBER’S
RIGHT TO RECOVER DIRECT DAMAGES AVAILABLE UNDER APPLICABLE CONTRACT LAW FOR THE
OTHER MEMBER’S BREACH OF THIS AGREEMENT OR A MEMBER’S RIGHT TO ANY REMEDY OR
INDEMNITY EXPRESSLY PROVIDED FOR IN THIS AGREEMENT.
12.4    Litigation. Except as provided in Section 12.1(c)-(e) above, any Dispute
may be subject to litigation initiated by any Member exclusively in a federal or
state court within Harris County, Texas.  Each Member hereby consents to
personal jurisdiction in any legal action, suit, or proceeding brought in any
court, federal or state, within Harris County, Texas, having subject matter
jurisdiction and irrevocably waives, to the fullest extent permitted by
applicable law, any claim or any objection it may now or hereafter have, that
venue or personal jurisdiction is not proper with respect to any such legal
action, suit, or proceeding brought in such a court in Harris County, Texas,
including any claim that such legal action, suit, or proceeding brought in such
court has been brought in an inconvenient forum.  Each Member further consents
to service of process out of any of the aforementioned courts in any such action
or proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such Member at its address specified herein for the giving
of notices, or by such other notice given in accordance with the rules and
procedures of such courts.  Each Member further agrees to the joinder in such
action of any third party that may be found ultimately liable for some or all of
any judgment rendered against it in such dispute, including any of such Member’s
Affiliates. The Members agree to waive their right to a jury trial in the event
litigation of a dispute is brought under the terms of this Section 12.4.
12.5    Effect of Board Deadlocks. If a Board Deadlock on a matter or proposal
not specified in Section 12.1(c)(ii) above is not resolved or approved by the
Board within ten (10) Business Days following receipt of a notice of Final
Impasse, then, to the extent such Board Deadlock relates to (i) issues which do
not jeopardize the fiscal or operational condition of the Company or prevent or
harm its ability to perform its obligations hereunder or under any valid
contract or comply with the Laws; (ii) issues which seek to expand the ELC
Facilities, other than the Phase II Option, or change the business purpose of
the Company; (iii) a capital call for Capital Contributions that are outside of
the Development Budget or Annual Budget or amendments thereto; (iv) issues that
do not involve the Transaction Agreements; or (v) the sale of the MMLS Units
under Section 8.4(e), a Board Deadlock will be treated as though the Board has
denied the matter or proposal related to a Board Deadlock and not subject to
Section 12.1(d).

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SECTION 13
BUSINESS AND HSSE PRINCIPLES

13.1    HSSE. The Company hereby adopts a Health, Safety and Environment
(“HSSE”) Policy, a Business Principles Policy, the Statement of Risk Management,
a Treasury policy, principles prohibiting bribery or corruption and a Social
Performance Policy (collectively “Policies”), which Policies shall reflect the
Company’s policies on environmental performance, standards for business probity
and ethics, prohibiting bribery or corruption, and a commitment to local benefit
in contracting and procurement as set forth in Schedules 4.1 – 4.7 attached
hereto. Upon approval by the Board, the Policies may be amended, superseded or
replaced and new Policies to be incorporated herein may be adopted by the Board
from time to time.
13.2    Business Conduct Standards. Company shall cause the Operator to adhere
to such Policies in the conduct of Company’s business. In addition, the Company
shall cause the Operator to be responsible for all required or recommended
documentation, including, but not limited to any testing or evaluation to
demonstrate compliance under these Policies.
13.3    Manual of Technical Design, HSSE and Operating Standards. Upon approval
by the Board, the Company will adopt a Manual of Technical Design, HSSE and
Operating Standards containing the Company’s standards (the “Standards”)
applicable to design, construction and operation of the ELC Facilities,
including Technical Standards, Operational Standards, HSSE & SP Standards and
Project Delivery Standards. The Company will utilize the Standards in the design
and construction of the ELC Facilities, and the Company will require the
Operator to utilize the Standards in the operation of the ELC Facilities.
(a)    Technical Design Standards. The Company hereby adopts the technical
standards of Shell Oil Company (the “Technical Design Standards”). The Technical
Design Standards will be included in the Manual of Technical Design, HSSE and
Operating Standards for the Company. The Company will utilize these Technical
Design Standards in the design and construction of the ELC Facilities, and the
Company will require the Operator to utilize these Technical Design Standards in
the operation of the ELC Facilities.
(b)    Operational Standards. The Members will develop a mutually agreed
operational management system of standards (the “Operational Standards”). Upon
approval of the Board, these Operational Standards will be adopted as the
Operational standards of the Company and included in the Manual of Technical
Design, HSSE and Operating Standards for the Company. The Company will utilize
these Operational Standards in the design and construction of the ELC
Facilities, and the Company will require the Operator to utilize these
Operational Standards in the operation of the ELC Facilities.
(c)    HSSE & SP Standards. The Members will develop a mutually agreed HSSE & SP
management system of standards (the “HSSE & SP Standards”) which is aligned with
the Company’s HSSE Management System Policy described in Schedule 4.2 hereto.
Upon approval of the Board, these HSSE & SP Standards will be adopted as the
HSSE & SP Standards of the Company and included in the manual of Technical
Design, HSSE and Operating Standards for the Company. The Company will utilize
these HSSE & SP standards in the design and construction of

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the ELC Facilities, and the Company will require the Operator to utilize the
HSSE & SP Standards in the operation of the ELC Facilities.
(d)    Project Delivery Standards. The Members will develop a set of mutually
agreed project delivery standards (the “Project Delivery Standards”). Upon
approval of the Board, the Project Delivery Standards will be adopted as the
Project Delivery Standards of the Company and included in the Manual of
Technical Design, HSSE and Operating Standards for the Company. The Company will
utilize these Project Delivery Standards in the design and construction of the
ELC Facilities, and the Company will require the Operator to utilize the Project
Delivery Standards in the operation of the ELC Facilities.
SECTION 14
MISCELLANEOUS
14.1    Notices. Any notice, payment, demand, or communication required or
permitted to be given pursuant to any provision of this Agreement shall be in
writing and shall be (i) delivered personally (ii) sent by postage prepaid,
certified mail, (iii) transmitted by facsimile, or (iv) delivered by nationally
recognized overnight courier, addressed as follows, or to such other address or
Person as the Parties may from time to time specify by notice to the Members:
(a)    If to Shell Member:
Vice President Finance and Treasurer
Shell US Gas & Power LLC
150 N. Dairy Ashford Road
Building C
Houston, TX 77079
Telephone No.: (832) 337‑2405
Attention: Mr. John V. Cramer
van.cramer@shell.com
and
(b)    If to Kinder Morgan Member:

Southern Liquefaction Company, LLC
569 Brookwood Village, Suite 749
Birmingham, Alabama 35209
Telephone No.: (205) 325‑7185
Attention: Mr. Michael J. Varagona
Mike_Varagona@KinderMorgan.com.
and

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Southern Liquefaction Company, LLC
1001 Louisiana Street, Suite 1000
Houston, TX 77002
Attention: Ms. Kim Dang
Telephone No. (713) 369‑9470
Kim_Dang@KinderMorgan.com

Any such notice, payment, demand, or communication shall be deemed to be
delivered, given, and received for all purposes hereof (w) on the date of
receipt if delivered personally or by courier, (x) five (5) days after posting
if transmitted by mail, or (y) the date of transmission by facsimile, provided
that the Person to whom the facsimile was sent acknowledges that such facsimile
was received by such Person in legible form, or that such Person responds to the
facsimile without indicating that any part of it was received in illegible form,
whichever shall first occur. The Parties may hereafter specify a change in such
addresses or specify use of a different address in writing consistent with this
Section 14.1.
14.2    Binding Effect. Except as otherwise provided in this Agreement, every
covenant, term, and provision of this Agreement shall be binding upon and inure
to the benefit of the Members and their respective successors, transferees and
(subject to the limitations in Section 7 hereof) assigns.
14.3    Entire Agreement. This Agreement and the Schedules and Exhibits hereto,
together with the documents and Related Agreements referenced herein, contain
the complete understandings and agreements of whatsoever kind and nature of the
Parties hereto with respect to the Company and the subject matter hereof and
shall supersede all prior discussions, negotiations, agreements, and
undertakings with respect thereto.
14.4    Construction. Every covenant, term, and provision of this Agreement
shall be construed simply according to its fair meaning and not strictly for or
against any Member.
14.5    Amendment. Except as otherwise set forth herein, this Agreement and the
Certificate of Formation may be amended, supplemented or modified only by a
written agreement executed by the Board as set forth above in Section 4.2.
14.6    Waivers. Any Party may for purposes of this Agreement, for itself only,
(i) extend the time for the performance of any obligations by the other Party;
(ii) waive any inaccuracies or discrepancies in the representations and
warranties of the other Party; (iii) waive the presence of its appointed
Directors at a Meeting to constitute a Quorum, provided that at least one of its
appointed Directors is in attendance; (iv) waive the number of signatories to a
Board resolution or consent, provided at least one Director with the requisite
delegation of authority for that Party executes such Board resolution or
consent; or (v) waive the enforcement of rights, actions or obligations of the
other Party. Any waiver or extension on the part of any waiving Party shall not
operate to permanently waive the obligation or amend or change the obligations
or provisions hereto or be construed as a waiver of any future defaults or
rights to enforce future actions or obligations whether of a like or different
character.

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14.7    Headings. Section and other headings contained in this Agreement are for
reference purposes only and are not intended to describe, interpret, define, or
limit the scope, extent, or intent of this Agreement or the text of any
provision hereof.
14.8    Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the validity or
legality of the remainder of this Agreement.
14.9    Incorporation by Reference. Every Exhibit and Schedule referred to
herein is hereby incorporated in this Agreement by reference.
14.10    Further Action. Each Member, upon the request or delegation of the
Board, agrees to perform all further acts necessary, appropriate, or desirable
to carry out the provisions of this Agreement including, but not limited to, the
execution, acknowledgement, and delivery of any documents or instruments or the
delivery of any information which are reasonably required to effectuate this
Agreement, ensure the proper formation of the Company, comply with any law,
including the Act or carry out the business purpose of the Company.
14.11    Governing Law. The laws of the State of Delaware (without giving effect
to the conflict of laws principles thereof) shall govern the validity of this
Agreement, the construction of its terms, and the interpretation of the rights
and duties of the Members without regard to principles of conflict of laws.
14.12    Waiver of Action for Partition. Except for SUSGP’s or SLC’s right to
reacquire the ELC Facilities pursuant to Section 8.4 hereof, each of the Members
irrevocably waives any right that it may have to maintain any action for
partition with respect to any of the Company’s assets.
14.13    No Third Party Beneficiaries. Subject only to Sections 11.2 and 11.4,
(a) this Agreement is for the benefit solely of, and shall inure solely to the
benefit of, each of the Members; (b) this Agreement is not intended for the
benefit of any third party creditors; and (c) this Agreement is not enforceable
by any Person other than the Members and the Company. Further, none of the
rights or obligations of the Members herein set forth to make Capital
Contributions or loans to the Company will be deemed an asset of the Company for
any purpose by any creditor or other third party. Prior to the payment to
Company of such Capital Contribution by a Member, such obligation or right may
not be pledged, assigned or encumbered by the Company to secure any debt or
other obligation of the Company or any of the Members. In addition, it is the
intent of the parties hereto that no distribution to any Member will be deemed a
return of money or property in contravention of the Act.
14.14    Expenses. Except as expressly set forth herein, each party hereto shall
assume and pay its own expenses incident to the negotiation and execution of
this Agreement and the Related Agreements, the preparation for carrying it into
effect and the consummation of the transactions contemplated hereby. Without
limiting the generality of the foregoing, except as expressly set forth herein
or in any Related Party Agreement, each Member shall pay all legal and
accounting fees, and other fees to consultants and advisers, incurred by it,
including, if any, brokers’ or investment

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banking fees relating to this Agreement and shall indemnify and hold the Company
and the other Member free and harmless from any of such expenses and fees.
14.15    Counterpart Execution. This Agreement may be executed in any number of
counterparts with the same effect as if the Members had all signed the same
document. All counterparts shall be construed together and shall constitute one
agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement under
seal as of the date first above written.

SOUTHERN LIQUEFACTION COMPANY, LLC
 
 
 
By: /s/ Kimberly S. Watson
 
Name: Kimberly S. Watson
 
Title: President
 
 
 
 
SHELL US GAS & POWER LLC
 
 
 
By: /s/ John V. Cramer
 
Name: John V. Cramer
 
Title: Vice President Finance and Treasurer
 

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Exhibit A

DEFINITIONS

“Accountants” shall mean the independent certified public accountants of the
Company.
“Act” means the Delaware Limited Liability Company Act, as amended from time to
time (and any corresponding provisions of succeeding law).
“Adjusted Capital Account Deficit” means, with respect to any Member, the
deficit balance, if any, in such Member’s Capital Account as of the end of the
relevant Allocation Year, after giving effect to the following adjustments:
(a)Credit to such Capital Account any amounts that such Member is deemed to be
obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704‑2(g)(1)(ii) and 1.704‑2(i)(5);
(b)Debit to such Capital Account the items described in Sections
1.704‑1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations;
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Section 1.704‑1(b)(2)(ii)(d) of the Regulations
and shall be interpreted consistently therewith.
“Affected Member” is defined in Section 7.2(d).
“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, (ii) any officer, director, or employee of such Person, or (iii) any
Person who is an officer, director, or employee of any Person described in
clause (i) of this definition. For purposes of this definition, the term
“control” (including the terms “controlled by” and “under common control with”)
shall mean the possession, direct or indirect, of the power to direct or cause
the direction of the management policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
“Affiliate Contract” means any agreement, contract, obligation or commitment
between the Company and a Member or an Affiliate of a Member. The Transaction
Agreements shall be considered to be Affiliate Contracts, unless the
counterparty is amended to substitute or replace the Affiliate with a
non-affiliated party.
“Agreed Rate” means the lesser of ***.
“Agreement” means this Agreement, as amended in writing by the Members from time
to time. Words such as “herein,” “hereinafter,” “hereof,” “hereto,” and
“hereunder,” refer to this Agreement as a whole, including all Exhibits and
Schedules hereto unless the context otherwise requires.

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“Allocation Year” means (i) the period commencing on the date of this Agreement
and ending on December 31, 2013, (ii) any subsequent twelve (12) month period
commencing on January 1 and ending on December 31 or (iii) any portion of the
period described in clauses (i) or (ii) for which the Company is required to
allocate Profits, Losses and other items of Company income, gain, loss or
deduction pursuant to Section 6.3.
“Annual Budget” is defined in Section 4.2(b).
“Available Cash Flow” is cash in excess of the Company’s projected cash needs as
further described in Section 6.4(b).
“Appraiser” is defined in Section 7.6(b).
“Bankrupt Member” means any Member:
(a)    that (i) makes a general assignment for the benefit of creditors; (ii)
files a voluntary bankruptcy petition; (iii) becomes the subject of an order for
relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceeding; (iv) files a petition or answer in a proceeding seeking for such
Member a reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any law for the relief of debtors; (v)
files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against such Member in a proceeding of the type
described in subclauses (i) through (iv) of this clause (a); or (vi) seeks,
consents, or acquiesces to the appointment of a trustee, receiver, or liquidator
of such Member or of all or any substantial part of such Member’s properties; or
(b)    against which a proceeding seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution, or similar relief under any
law has been commenced and 90 days have expired without dismissal thereof or
with respect to which, without such Member’s consent or acquiescence, a trustee,
receiver, or liquidator of such Member or of all or any substantial part of such
Member’s properties has been appointed and 60 days have expired without such
appointments having been vacated or stayed, or 60 days have expired after the
date of expiration of a stay, if the appointment has not previously been
vacated.
“Best Bid” is defined in Section 8.4(b).
“Board” is defined in Section 4.1(a).
“Board Deadlock” is defined in Section 12.1(a).
“Business Day” shall mean any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized by law to close. If
any action or obligation is required to be taken or performed on any day which
is not a Business Day, such action or obligation shall be performed on or before
the next succeeding Business Day.
“Capital Account” means, with respect to any Member, the capital account
maintained for such Member pursuant to Section 6.1(h).

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“Capital Contribution” means, with respect to a Member as of any date, the
amount of cash, and Development Costs paid by each Member, and the initial Gross
Asset Value of any other property actually contributed to the Company by such
Member , including any contributions made pursuant to Section 6.1.
“Capital Contribution Date” means the date on which a Capital Contribution is
required to be made pursuant to this Agreement.
“Certificate” means the certificate of formation of the Company, filed with the
Secretary of State of the State of Delaware.
“Change in Control” means with respect to any Member, the occurrence of any
event or series of related events that result in such Member ceasing to be under
the Control of the Person that was considered to be such Member’s Parent (as
defined herein) immediately prior to such event or series of related events.
“Code” means the Internal Revenue Code of 1986, as amended from time to time (or
any corresponding provisions of succeeding law).
“Company” means Elba Liquefaction Company, L.L.C.
“Company Minimum Gain” has the same meaning as the term “partnership minimum
gain” in Regulations Section 1.704-2(b)(2) and 1.704-2(d).
“Contractual Obligations” means any and all obligations of the Company under the
Transaction Agreements.
“Contributing Member” is defined in Section 6.1(g).
“Control” means possessing, directly or indirectly, the power to direct or cause
the direction of the management and policies of any such relevant Person by
ownership of voting interest, by contract or otherwise; provided, however, that
solely having the power to act as the operator of a Person’s day-to-day
commercial operations, without otherwise having the direct or indirect power to
direct or cause the direction of the management and policies of such Person,
shall not satisfy the foregoing definition of “Control.”
“Controlling Members” is defined in Section 4.1(a).
“Costs” is defined in Section 6.1(g)(ii).
“Credit Standards” means, with respect to any Person, that such Person has a
long term issuer rating of at least *** by Standard and Poor’s Rating Group
(S&P) or at least *** by Moody’s Investors Service, Inc. (or, if either entity
changes its rating system, the comparable rating under such changed system), or
equivalent ratings from another ratings agency that is classified as a
nationally recognized statistical ratings organization by the US Securities &
Exchange Commission if S&P or Moody’s ceases to exist or to issue credit
ratings, and in any case, as applicable, with a

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stable or better outlook; provided, however, that if such Person is rated
differently by multiple agencies, the lowest rating shall be used in making such
determination.
“Creditworthy Affiliate” means a Member’s Affiliate that meets the Credit
Standards or that is otherwise determined by Unanimous Consent to be
sufficiently creditworthy to provide the guaranties in accordance with such
Sections.
“Default” means, in respect of any Member, the occurrence and continuation of
any of the following events: (a) the failure to remedy, within three (3)
Business Days of such Member’s receipt of written notice thereof from the
Company or any other Member, such Member’s delinquency in making any Capital
Contribution to the Company approved by the Board or as otherwise required
pursuant to Section 6.1; (b) the occurrence of any event that causes such Member
to become a Bankrupt Member; or (c) the failure to remedy, within ten (10)
Business Days of receipt of written notice thereof by a Member or its Affiliate
from the Company or any other Member, the non-performance of or non-compliance
with in any material respect any other Transaction Agreements, obligations or
undertakings of such Member or such Member’s Affiliate contained in this
Agreement; provided, that if such non-performance or non-compliance is capable
of being remedied but cannot be remedied within such ten (10) Business Day
period and such Member or such Member’s Affiliate has commenced using and
continues to use reasonable commercial efforts to remedy such non-performance or
non-compliance as quickly as possible, in which case, “Default” shall occur upon
the failure to remedy such non-performance or non-compliance within one hundred
twenty (120) calendar days of receipt of such written notice.
“Delinquent Contribution” is defined in Section 6.1(g).
“Depreciation” means, for each Allocation Year, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such Allocation Year, except that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Allocation Year, Depreciation shall be an
amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
allowable for such Allocation Year bears to such beginning adjusted tax basis,
provided, however, that if the adjusted basis for federal income tax purposes of
an asset at the beginning of such Allocation Year is zero, Depreciation shall be
determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Tax Matters Member.
“Design Failure Dissolution Event” is defined in Section 8.2(c).
“Development Budget” means that budget established under Section 4.2(a).
“Development Contribution Amount” has the meaning set forth in Section 6.1(c).
“Development Costs” means third party costs and expenses incurred by SLC or its
Affiliates or SUSGP in developing the ELC Facilities prior to the Effective
Date, including without limitation, all preliminary engineering, design,
permitting and related costs in accordance herewith.

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“Director” means the natural Person appointed to the Board pursuant to
Section 4.1(b).
“Dispute” is any controversy or claim arising between any Members based in
contract, tort, statute or other legal or equitable theory (including but not
limited to any claim of fraud, misrepresentation or fraudulent inducement or any
question of validity or effect of this Agreement including this clause) arising
out of or related to this Agreement (including any amendments or extensions
thereto), or the breach thereof.
“Disputing Parties” are the Members engaged in a Dispute.
“Dissolution Events” is defined in Section 8.2.
“Distribution” is defined in Section 6.4(b).
“DOE” means the United States Department of Energy and all of its agencies
thereto.
“Dollar” or “$” shall mean lawful currency of the United States of America.
“EEC” shall mean Elba Express Company L.L.C.
“Effective Date” shall be the date certified by SUSGP in the Notice of Effective
Date to be the effective date of this Agreement in accordance with Section 2.1.
“Elba Terminal” shall mean the SLNG LNG Terminal located near Savannah, Georgia,
where the ELC Facilities will be sited and operated.
“ELC Facilities” means the real, personal, mixed and contractual property
(whether tangible or intangible) to be owned and operated by the Company. ELC
Facilities includes LNG trains for the liquefaction and purification of natural
gas in two phases, all as more fully described in Schedule 3, and as added from
time to time under the terms of this Agreement. *** for a total capacity of 2.5
MTPA (“Phase II”). The ELC Facilities are more particularly shown on Schedule 3
attached hereto.
“ELC Project” is defined in Section 4.11 hereto.
“Eligible Person” means, (i) an entity (i.e., not a natural person) that is not
engaged in any activities that would qualify it as a Marketing Affiliate of the
Company or any Member or (ii) if the Shell Member is the Transferring Member, an
entity that is not a) engaged as the Controlling owner or the operator of an LNG
terminal located or proposed to be located as of the Effective Date herein in
the United States or Canada, except for non-U.S./Canadian national oil companies
or non-U.S./Canadian utilities, or b) a U.S. Interstate pipeline or affiliate
thereof; or (iii) if the Kinder Morgan Member is the Transferring Member, an
entity that is not primarily and directly engaged in US domestic or global LNG
supply or trading activities.
“Encumbrance” is defined in Section 7.2(c).
“Encumbering Member” is defined in Section 7.2(c).

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“Expert” is defined in Section 12.1(d).
“Expiration Option Notice” is defined in Section 8.4(b).
“Export Operations” means those operations at the Elba Terminal necessary to
place or transfer LNG to ships in order to export such LNG from the United
States to Free Trade Agreement (“FTA”) and non-FTA foreign countries.
“Extended Term” means any extension of the Primary Term as permissible under the
terms of the LSA.
“Fair Market Value” or “FMV” shall mean, as to the Company or other property,
the price at which a willing seller would sell and a willing buyer would buy
such property having full knowledge of the facts, in an arm’s-length transaction
without time constraints, and without being under any compulsion to buy or sell.
“FERC” means the Federal Energy Regulatory Commission or any commission, agency
or other governmental body succeeding to the powers of such commission.
“FERC Application” means the documents pursuant to which application for
authorization is made to the FERC by the Company and SLNG for authority to
construct and install the ELC Facilities and to make any necessary modifications
to the SLNG Facilities at the Elba Terminal to accommodate the construction,
installation and operation of the ELC Facilities and the Export Operations. The
FERC Application shall seek authority to operate the ELC Facilities under
Section 3 of the Natural Gas Act on an unregulated basis in accordance with the
Energy Policy Act of 2005.
“FERC Order” means the authorization to be issued to Company and SLNG in
response to the FERC Application.
“Final Impasse” is defined in Section 12.1(b).
“First Election” and “First Election Date” shall have the meanings set forth in
Section 6.1(l)(i).
“Fiscal Year” shall mean the fiscal year of the Company, which shall be the
calendar year unless otherwise determined by the Board with the affirmative vote
of at least one Director appointed by each Member.
“FTA” shall mean any Free Trade Agreement between the United States and a
foreign country.
“GAAP” means generally accepted accounting principles.
“Governmental Approvals” means all consents, approvals and other authorizations
as may be required from Governmental Authorities in connection with (a) the
construction, installation and operation of the ELC Facilities, (b) the
modification of the SLNG Facilities, including the Export Operations, (c) the
formation of the Company, and (d) the conduct of the business of the Company.

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“Governmental Authority” means any federal, state, county, parish, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for federal income tax purposes, except as follows:
(a)The Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross Fair Market Values (taking Code Section 7701(g) into account,
as determined by the Board, as of (A) the liquidation of the Company within the
meaning of Regulations Section 1.704‑1(b)(2)(ii)(g), other than pursuant to Code
Section 708(b)(1)(B);(B) the acquisition of an additional interest in the
Company by any new or existing Member in exchange for more than a de minimis
Capital Contribution; and (C) the distribution by the Company to a Member of
more than a de minimis amount of property as consideration for the Member’s
interest in the Company; provided that an adjustment described in clauses (B)
and (C) of this paragraph shall be made only if the Board reasonably determines
that such adjustment is necessary to reflect the relative economic interests of
the Members in the Company;
(b)The Gross Asset Value of any Company asset distributed to any Member shall be
the gross Fair Market Value (taking Code Section 7701(g) into account) of such
asset, as determined by the Board, on the date of distribution;
(c)The Gross Asset Values of Company assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code
Section 734(b) or Code Section 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulation Section 1.704‑1(b)(2)(iv)(m); provided, however, that Gross Asset
Values shall not be adjusted pursuant to this clause (iii) to the extent that an
adjustment pursuant to the foregoing clause (i) is made in connection with a
transaction that would otherwise result in an adjustment pursuant to this clause
(iii); and
(d)The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be its agreed upon Fair Market Value, as determined by the Board.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
subparagraph (a), (c) or (d), such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset, for
purposes of computing Profits and Losses.
“Guaranty Agreement” means the guaranty agreement in a form approved by the
Board to be executed and delivered to the other Members by a new Member or
Substitute Member, or an Affiliate thereof, on the Effective Date of the
Transfer or adoption of the new Member as provided in Article VII. herein,.
“Heel” shall mean that residual amount of LNG in each LNG storage tank at the
Elba Terminal, in excess of the sum of SNALNG and all other customers’
inventories of LNG in such storage tank, as recommended by the tank manufacturer
or consistent with accepted industry practice for such purpose in order to
maintain an operationally cryogenic state in each LNG storage tank.
“Impasse” is defined in Section 12.1(b).

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“Impasse Notice” is defined in Section 12.1(b).
“Initiating Party” is defined in Section 12.1(e).
“In-Service Date” means the in service date of the ELC Facilities.
“Interconnect Agreement” is defined in Section 2.11(f).
“Interim Period” means the period of time prior to the in service date of the
ELC Facilities.
“IPOT” is defined in Section 4.11.
“IPOT Agreement” is defined in Section 2.11(j).
“Kinder Morgan” means Kinder Morgan Inc.
“Kinder Morgan Member” means, as of any particular time, collectively, Kinder
Morgan and any of its Affiliates that are Controlling Members (and as of the
Effective Date, SLC).
“KM TSA” is defined in Section 2.11(a).
“Land Lease” is defined in Section 2.11(h).
“Laws” means any applicable law, regulation, rule, ordinance, statute, act
(including the Act), code (including the Code), constitutional provision, order,
decree, ruling, proclamation, resolution, judgment, decision, declaration, or
interpretative or advisory opinion or letter of a domestic, foreign, tribal or
international governmental authority or any political subdivision thereof.
“Liquidating Trustee” has the meaning ascribed to it in Section 8.3.
“LNG” means liquefied natural gas.
“Losses” is defined in the definition of “Profits” below.
“LSA” is defined in Section 2.11(e).
“MAO” is defined in Section 2.11(c).
“Marketing Affiliate” has the meaning given to such term in applicable FERC
Standards of Conduct set forth in Part 358 of the FERC Regulations, 18 CFR §358.
“Member” means SUSGP or SLC or such other Person that is duly appointed to be a
Member under the terms of Section 7.5 herein.
“Member Nonrecourse Deductions” shall have the meaning set forth in Regulations
Section 1.704‑2(i)(2).

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“Membership Interest” means the ownership interest (on a percentage basis) of a
Member in the Company, including rights to distributions (liquidating or
otherwise), allocations, information, and to consent or approve, which ownership
interest is more particularly described and identified in Schedule 1, which
schedule shall be amended by the Board as necessary to reflect changes and
adjustments resulting from the admission of any Member or any Transfer or
adjustment in Membership Interests made in accordance with the terms of this
Agreement (provided that a failure to reflect any such change or adjustment on
Schedule 1 shall not prevent any such change or adjustment from being
effective), which includes the right to vote or participate in management of the
Company only to the extent the party holding the Membership Interest has been
admitted as a Member to the Company.
“Minimum Gain” shall have the meaning set forth in Regulations
Section 1.704‑2(b)(2).
“Minimum Gain Attributable to Member Nonrecourse Debt” shall mean “partner
nonrecourse debt minimum gain” as determined in accordance with Regulations
Section 1.704‑2(i)(3).
“MMLS Unit Purchase Agreement” means that agreement or those agreements defined
in Section 2.11(i).
“MMLS Units” means one or more moveable modular LNG units to be installed at the
Elba Terminal.
“Non-Funding Member” is defined in Section 6.1(g).
“Nonrecourse Deductions” shall have the meaning set forth in Regulations
Section 1.704‑2(c).
“Non-Transferring Member” has the meaning set forth in Section 7.2(b)(ii).
“Notice of Effective Date” is defined in Section 2.1.
“Obligation” is defined in Section 6.1(g)(ii).
“Offer Notice” has the meaning set forth in Section 7.2(b)(ii).
“Officers” is defined in Section 4.3(a).
“Operator” means any Person who is serving as the operator under the MAO (or any
replacement thereof). The initial Operator is SLNG.
“Option Notice” is defined in Section 8.4(d).
“Option Period” (a) is, for purposes of Section 7.2(b) defined in Section
7.2(b)(ii) and (b) is, for purposes of Section 7.6, defined in Section 7.6(a).

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“Original Members” means each of (i) the Shell Member or, if the Shell Member
Transfers 100% of its Membership Interest to a Substitute Member (which is not a
Shell Member), such Substitute Member and (ii) the Kinder Morgan Member or, if
the Kinder Morgan Member Transfers 100% of its Membership Interest to a
Substitute Member (which is not a Kinder Morgan Member), such Substitute Member.
“OSA” is defined in Section 2.11(d).
“Oversubscribing Purchaser” has the meaning set forth in Section 7.2(b)(ii).
“Parent” means (a) in the case of the Kinder Morgan Member or any Affiliate
thereto, Kinder Morgan, Inc. and (b) in the case of the Shell Member or any
Affiliate thereto, Shell Oil Company, and (c) in the case of any other Member,
the Person that is designated by the Board as the Parent of such other Member in
connection with its admission to the Company or provides a Guarantee Agreement
on behalf of the new Member or Substitute Member, or if no such designation is
made, the Person that at the time of such admission controls such Member and
that has no other Person that controls it. For purposes of this definition, the
term “control” shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
“Party” means those Persons that executed this Agreement.
“Person” means any individual, corporation, limited liability company,
partnership, trust, or other entity.
“Phase I and Phase II” shall mean those phases defined above in the “ELC
Facilities.”
“Phase I ELC Facilities” shall consist of six (6) MMLS Units, and the necessary
appurtenant facilities including measurement and the interconnections with the
Twin 30s and SLNG.
“Phase II ELC Facilities” shall consist of an additional two (2) or four (4)
MMLS Units and the necessary appurtenant facilities as elected by SUSGP as
provided in Section 6.1(k).
“Phase II Withdrawal Fee” shall have the meaning as set forth in Section
6.1(k)(iii).
“Phase III Withdrawal Fee Conditions” shall have the meaning as set forth in
Section 6.1(k)(iii).
“Primary Term” means the primary term of the LSA.
“Primary Term Option Notice” is defined in Section 8.4(a).
“Profits” and “Losses,” for each Allocation Year, means an amount equal to the
Company’s taxable income or loss for such Allocation Year, determined in
accordance with Code Section 703(a) (for this purpose, all items of income,
gain, loss, or deduction required to be stated separately pursuant to Code
Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

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(a)    Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Profits or Losses pursuant to this
definition shall be added to such taxable income or loss;
(b)    Any expenditures of the Company described in Code Section 705(a)(2)(B) or
treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations
Section 1.704‑1(b)(2)(iv)(i), and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be subtracted from such
taxable income or loss;
(c)    In the event the Gross Asset Value of any Company asset is adjusted
pursuant to clause (a) or clause (b) of the definition of Gross Asset Value, the
amount of such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses;
(d)    Gain or loss resulting from any disposition of property with respect to
which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;
(e)    Notwithstanding any other provision of this definition, any items that
are specially allocated pursuant to Section 6.3(d) hereof shall not be taken
into account in determining Profits and Losses; and
(f)    If the Gross Asset Value of any Company asset is different from its
adjusted tax basis at the beginning of the Fiscal Year, then, in lieu of the
depreciation, amortization, and other cost recovery deductions taken into
account, Depreciation for such Allocation Year, computed in accordance with the
definition of Depreciation, shall be taken into account.
(g)    To the extent an adjustment to the adjusted tax basis of any Company
asset pursuant to Code Section 734(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a Member’s
interest in the Company, the amount of such adjustment shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis) from the disposition of such asset and
shall be taken into account for purposes of computing Profits or Losses.
The amounts of the items of Company income, gain, loss or deduction to be
specially allocated pursuant to Section 6.3(d) hereof shall be determined by
applying rules analogous to those set forth in subparagraphs (a) through (g)
above.
“Purchase Notice” (a) is, for purposes of Section 7.2(b)(ii), defined in Section
7.2(b)(ii) and (b) is, for purposes of Section 7.2(j), defined in
Section 7.2(j).
“Purchased ELC Facilities” is defined in Section 8.4(a).
“Purchasing Member” shall have the meaning as set forth in Section 8.4(a).

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“Qualifying Offer” means an offer to purchase a Membership Interest if it meets
all of the following criteria:
(a)    the offer is a written offer, in good faith and at arms’ length, from an
Eligible Person that is not an Affiliate of the Transferring Member to purchase
all (but not less than all) of the Transferring Member’s Membership Interest;
(b)    the offer is for a price payable solely in cash;
(c)    the offer does not include consideration unrelated to the sale of the
Membership Interest;
(d)    the offer is subject in all respects to the right of the other Members to
first purchase the Membership Interest pursuant to Section 7.1(b);
(e)    the proposed Transferee is a principal, identified in the offer, and not
an agent acting on behalf of an undisclosed principal; and
(f)    the offer contains all material terms and conditions of the proposed
Transfer of the Membership Interest, provides for a closing not earlier than the
term specified in Section 7.1(b)(ii) and is not assignable.
“Quorum” is defined in Section 4.1(g).
“Regulations” means the Income Tax Regulations, including Temporary Regulations,
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
“Related Agreement” means the Transaction Agreements together with any other
agreement between the Company, on the one hand, and any Member or any Affiliate
of any Member, on the other hand, related to the subject matter of this
Agreement.
“Related Person” means (i) each Person who at any time on or after the date
hereof shall have been an Affiliate of any Member, and (ii) each Person who at
any time on or after the date hereof shall have been a Representative of any
Member or any of its Affiliates.
“Related Projects” is defined in Section 4.11.
“Required Consent” means the consent of Directors appointed by one or more
Controlling Members collectively holding sixty two percent (62%) or more of all
of the Membership Interests held by the Controlling Members at the time such
action is being taken; provided, however, that (a) if a Controlling Member is in
Default, “Required Consent” means the consent of Directors appointed by one or
more Controlling Members collectively holding sixty-two percent (62%) or more of
all the Membership Interests held by Controlling Members which are not, and
whose Affiliates are not, in Default at the time such action is being taken; (b)
with respect to any Conflict Activity, “Required Consent” means the consent of
Directors appointed by one or more Controlling Members collectively holding
sixty two percent (62%) or more of all the Membership Interests held by
Controlling Members excluding such Controlling Member in which it or its
Affiliates are the counterparty to the Related Agreement at the time such action
is being taken. For the purposes hereof, “Conflict Activity” means (a) the
waiver of any obligation of Company or the counterparty

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under any Affiliate Contract, (b) the enforcement or waiver of any rights of the
Company under or with respect to any Affiliate Contract (including enforcing any
rights of the Company under any Affiliate Contract in connection with any breach
or default or nonperformance (or alleged breach or default or nonperformance)
thereunder by the Member that is (or has an Affiliate that is) a party to such
Affiliate Contract, or making or enforcing any claims by the Company for
indemnification or payment under any Affiliate Contract) or exercising a right
of the Company to audit or seek information under an Affiliate Contract, or (c)
any action to be taken by the Company under an Affiliate Contract that generally
does not include day to day, routine decisions to be made with respect to the
obligations, rights and responsibilities of Company, a Member, the Operator or
an Affiliate that are consistent with or pursuant to the terms of the respective
Affiliate Contract.

“Required Percentage” means the percentage of Membership Interests needed in
order to approve or consent to or resolve a matter by either Required Consent or
Unanimous Consent as required by this Agreement.
“Responding Party” is defined in Section 12.1(e).
“Second Election” and “Second Election Date” shall have the meanings set forth
in Section 6.1(k)(ii).
“Security Interest” means any security interest, lien, mortgage, hypothecation,
pledge or similar form of encumbrance whether created by any Person, or by
operation of law in any of its property or rights, excluding any inchoate liens
created by law or other liens created by operation of law to the extent any such
other liens are removed within 180 days following notice from the Company or
another Member to cause such lien to be removed from such property or rights.
“Shell Board” is defined in Section 2.1.
“Shell Member” means, as of any particular time, collectively, Shell US Gas &
Power LLC and any of its Affiliates that are Controlling Members (and as of the
Effective Date, SUSGP).
“Shell TSA” is defined in Section 2.11(b).
“SLNG” means Southern LNG Company, L.L.C., a Delaware limited liability company,
and, as of the Effective Date, a wholly owned subsidiary of El Paso Pipeline
Partners, L.P. a Delaware limited partnership.
“SLNG Facilities” means those storage tanks, piping, vaporization, compression,
measurement, dock, dock loading and other ancillary facilities owned by SLNG at
the Elba Terminal.
“SLC” means Southern Liquefaction Company, LLC, a Delaware limited liability
company, or if Southern Liquefaction Company, LLC is no longer a Controlling
Member, the applicable Kinder Morgan Member, if any.
“SNALNG” means Shell N.A. LNG, L.L.C., which is the customer under the LSA.
“Standards” are defined in Section 13.3.

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“Stated Rate” means the interest rate per annum equal to ***.
“Subject Interest” is defined in Section 7.2(b)(ii).
“Subsequent Funding Date” is defined in Section 6.1(g)(iii).
“Subsidiary” shall mean, with respect to any specified Person, each of (i) any
other Person not less than a majority of the overall economic equity in which is
owned, directly or indirectly through one of more intermediaries, by such
specified Person, (ii) any other Person in respect of which such specified
Person has the power, directly or indirectly through one or more intermediaries,
to elect a majority of the board of directors or other persons performing
similar functions (it being understood that such other persons performing
similar functions may include, for example and without limitation, the board of
directors of the sole, or managing, corporate general partner of a limited
partnership or the members of a management committee of a partnership, limited
partnership or limited liability company performing functions similar to that of
a board of directors) and (iii) without limitation of clauses (i) and (ii), any
other Person who or which, directly or indirectly through one or more
intermediaries, is controlled by such specific Person.
“Substituted Member” means a Person who is admitted as a Member of the Company,
at such time as such Person has complied with the requirements of Section 7.5,
in place of and with all the rights of a Transferring Member with respect to the
Membership Interest transferred and who is shown as a Member on the books and
records of the Company.
“SUSGP” means Shell US Gas & Power LLC, a Delaware limited liability company, or
if Shell US Gas & Power LLC is no longer a Controlling Member, the applicable
Shell Member, if any.
“Tangible Net Worth” means total assets, less total liabilities, less intangible
assets (including goodwill, patents, and unamortized loan costs), less
non-controlling interests, less off-balance sheet obligations.
“Tax Matters Member” is defined in Section 4.7(b).
“Terminal Interconnect Agreement” is defined in Section 2.11(g).
“Third Party” means any Person other than a Member or any of its Affiliates.
“Transaction Agreement” shall have the meaning set forth in Section 2.11.
“Transfer” means, as a noun, any voluntary or involuntary transfer, sale,
assignment, pledge, hypothecation, or other disposition and, as a verb,
voluntarily or involuntarily to transfer, sell, assign, pledge, hypothecate, or
otherwise dispose of; provided however, that Transfer shall not include the
acquisition by merger, consolidation, purchase or otherwise by any person,
entity or group of a majority of the outstanding voting shares any Member or any
of their Parents or the sale of all or substantially all of the assets of any
Member or any of their Parents.

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“Transferee” means a Person who receives all or part of a Member’s Membership
Interest through a Transfer.
“Transferring Member” has the meaning set forth in Section 7.2(b)(ii).
“Twin 30s Pipelines” means the 13.25-mile Twin 30s pipelines, which extend from
SLNG’s Elba Terminal to an interconnection with the rest of Southern Natural Gas
Company, L.L.C.’s pipeline system near Port Wentworth, Georgia. Southern Natural
Gas Company, L.L.C., a Delaware limited liability company, Elba Express Company
L.L.C., a Delaware limited liability company, and Carolina Gas Transmission
Corporation collectively own an undivided interest in the Twin 30s Pipelines.
“Unanimous Consent” means the consent of Directors appointed by one or more
Controlling Members collectively holding one hundred percent (100%) of all of
the Membership Interests held by Controlling Members at the time such action is
being taken; provided, however, that if a Controlling Member is in Default,
“Unanimous Consent” means the consent of Directors appointed by one or more
Controlling Members collectively holding one hundred percent (100%) of all the
Membership Interests held by Controlling Members which are not, and whose
Affiliates are not, in Default at the time such action is being taken.
“Valuation Notice” is defined in Section 7.6(a).
“Wholly-Owned Subsidiary” shall mean, with respect to any specified Person, (a)
any other Person (i) as to which such specified Person owns, directly or
indirectly through other Wholly-Owned Subsidiaries, of record and beneficially,
(x) all of the voting power and (y) (A) if such other Person is a corporation,
all of the outstanding capital stock, and (B) if such other Person is not a
corporation, all of the equity and profits interests at the time any
determination thereof is being made, and (ii) which such specified Person in any
event controls, directly or indirectly, or (b) if all of the equity and profits
interests of such other Person are owned, directly or indirectly, of record and
beneficially, by a master limited partnership and, if applicable, its general
partner, any such other Person (i) as to which such specified Person or any of
its Wholly-Owned Subsidiaries is the sole general partner of such master limited
partnership and (ii) which such specified Person in any event controls, directly
or indirectly.
“Withholding Taxes” is defined in Section 6.4(c).

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EXHIBIT “B”
Insurance Requirements
Coverage
Policy Limits
Automobile Liability
***
Workers’ Compensation or its equivalent, including Occupational Disease coverage
As required by applicable law for all employees
Employer’s Liability
***
Property Damage
***
General Liability
***
Construction All Risk (CAR) Insurance
***
Construction Third Party Liability Insurance
***

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Marine Cargo Insurance (if applicable)
Protection and Indemnity Insurance
***
Directors and Officers Insurance for Directors and Officers solely employed by
Company
***
Any other insurance required by local law.

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SCHEDULE 1

Member’s Names and Membership Interests

Member
 
Membership Interest
Shell US Gas & Power LLC

 
49.00%
Southern Liquefaction Company LLC

 
51.00%
 
 
100.00%

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SCHEDULE 2.1

Directors by Member

SLC:

Director – Kimberly S. Watson
Alternate Director – Norman G. Holmes

SUSGP:

Director – Seng-Kee Wong
Alternate Director – Brian Eggleston

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SCHEDULE 2.2

Officers

President
Norman G. Holmes
Vice President – Financial
Brian Eggleston
Vice President – Commercial
Michael J. Varagona
Vice President – Technical
Steve Corbin
Secretary
Patricia S. Francis

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SCHEDULE 3

ELC Facilities

The Movable Modular Liquefaction System (MMLS) and the balance of plant (BoP)
design are illustrated as follows:

***

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SCHEDULE 4

Policies

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Schedule 4.1

Statement of HSSE Policy

The Company has a commitment to the protection of the health, safety and
security of the people working at the ELC Facilities and to the protection of
the environment.

(a)
The Company shall require the Operator to operate its business in accordance
with the Company’s health, safety and environmental policy and high standards of
LNG industry practice with special regard to protection of health, safety, and
the environment.

(b)
The Company’s health, safety and environmental policy commits the Company to:

(i)
Have a systematic approach to HSSE & SP management designed to ensure compliance
with the law and to achieve continuous performance improvement;

(ii)
Set targets for improvement and measure, appraise and report performance;

(iii)
Require contractors to manage HSSE & SP in line with this policy; and

(iv)
Engage effectively with neighbors and impacted communities

(v)
Include HSSE & SP performance in the appraisal of staff.

The Company’s health, safety and environmental policy may be amended, superseded
or replaced by approval from the Board from time to time;
(c)
The Company shall require the Operator to keep the relevant records of its HSSE
performance. The Board shall meet annually to review such performance for the
operations at the ELC Facilities. The Company shall require the Operator to
establish a program for regular HSSE audits in accordance with its HSSE
management system and require the Operator to provide copies of any HSSE audits
conducted of operations at the ELC Facilities to any member upon request. Upon
reasonable notice to Operator, any Controlling Member shall have the right to
participate in HSSE assessments and audits; and

(d)
The Company shall adopt generally accepted information security management
standards where the Company has access to Shell’s information technology
network.

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Schedule 4.2

HSSE Management System and Policy

Further to the Company’s HSSE Policy, the Members will develop a health, safety,
security and environmental (“HSSE”) management system that will effectively
implement the following elements:

i.
The HSSE standards identified in the Company’s Manual of Technical Design, HSSE
and Operating Standards; and

ii.
The process safety management standards identified in the Company’s Manual of
Technical, Design

iii.
HSSE and Operating Standards; and

iv.
Conduct operations at the ELC Facilities in a safe and diligent manner; and

v.
Ensure that HSSE is the responsibility of all Company representatives; and

vi.
Permit Operator or any Company representative to stop work, or prevent any work
from starting, where adequate controls of HSSE risks are found not to be in
place; and

The Company will require the Operator to conduct operations of the ELC
Facilities according to the Company’s HSSE management system and policies. The
Company’s HSSE management system and policies may be amended, superseded or
replaced by approval by the Board from time to time.

The Board shall review Operator’s HSSE management system and policies on a
regular basis.

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Schedule 4.3

Business Principles

The Company shall ensure that its business in all respects is conducted in
accordance with all aspects of applicable law and high standards of business
probity and business ethics. The Company has core corporate values of honesty,
integrity and respect for people, which guide the Company in its internal
actions, as well as its external endeavors with stakeholders, governments,
contractors, vendors, joint venture partners and other companies.

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Schedule 4.4

Statement of Risk Management

The Company recognizes that managing risk effectively is critical to achieving
business objectives. On an annual basis, the Board will review the environment,
state clear objectives and:

•
Identify risks to the achievement of those objectives;

•
Assess the impact and likelihood of the risks materializing;

•
Implement effective actions designed to:

◦
Achieve business objectives;

◦
Safeguard Company assets from inappropriate use, loss or fraud;

◦
Facilitate economic, effective, efficient and safe operations;

◦
And, enable compliance with the boundaries set by the Board.

The Company will also require the Operator to monitor, communicate and report to
the Board changes in the risk environment and the effectiveness of actions taken
to manage identified risks on an ongoing basis.

The Board will adopt a control framework that delivers financial information
reasonably required by the Members to produce their consolidated financial
statements and provide reasonable assurance of meeting the Company’s business
objectives.

The Company will establish an assurance committee. The members of the assurance
committee shall include the President or his or her representative, the Vice
President Financial or his or her representative and a representative from the
Operator’s risk management committee. The assurance committee will provide:

Ongoing review of the control framework;
i.
The adoption of a single integrated audit plan;

ii.
Proposing for adoption by the Board improvements to the control framework to
take account of any weaknesses identified by the committee, including in
accordance with the advice or reports of the Operator’s internal auditors;

iii.
All internal audits shall be carried out in accordance with the Operator’s
internal audit methodology. The Company may require the audit committee to
provide detailed recommendations of their audit reports to the Board. The
Company will require prompt notification to the assurance committee of any
significant weaknesses identified in the control framework or its application to
enable the assurance committee to ensure that appropriate follow-up mechanisms
are in operation.

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Schedule 4.5

Treasury Policy

The Company shall establish treasury procedures by adopting a treasury Policy in
the form attached.

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Treasury Policy

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ARTICLE I. Objective
Elba Liquefaction Company LLC (“The Company”) endorses the following Treasury
Policies.

The objective of the Treasury Policy is to maximise shareholder value and to
manage financial risk appropriately.

The Treasury Policy will be reviewed every two years or when circumstances in
The Company change materially. Any suggested changes need to be approved by the
Board.

ARTICLE II. Treasury Activities

The Company operates its treasury activities as a cost centre. Treasury
activities are undertaken solely to facilitate the needs of the business. No
treasury activities are undertaken with the aim to making a profit.

The Company will not obtain any credit rating without the prior support from the
Board.

The Company shall have a process to identify, assess and respond to Treasury
risks together with mechanisms for bringing significant issues to the attention
of management. There shall be an annual assurance process in place to confirm
implementation of the Treasury Policy.

ARTICLE III. Capital Structure

The Company’s capital structure relies on equity financing from the Members.

ARTICLE IV. Utilization of Funds/Distributions

On a quarterly basis, the Company shall distribute the lower of (a) its
available cash (after deducting its operating and capital expenditures) and (b)
distributable retained earnings. The required legal documentation must be in
place prior to the declaration of a dividend.

The Company shall keep local cash balances as low as possible by having cash
calls on monthly or more frequent basis. The Company’s investment policy for its
surplus cash is based, in order of importance, on Security, Liquidity and Yield.
The Company will assess counterparty risks of the third party based on its
financial strength, quality of management, ownership structure, regulatory
environment and exposure to risk (diversification). Minimum rating for deposit
transactions is A-.

The Company is not authorised to provide debt funding or advances to any third
party under any circumstances.

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ARTICLE V. Bank Accounts and Facilities

The Company shall keep the number of its bank accounts at a minimum necessary to
meet its business requirements and shall monitor and review its bank account
structure periodically. The opening or closing of bank accounts shall require
prior approval from the Board.

The Company shall ensure that incumbency certificates evidence that its Officers
are authorized to engage in financial transactions as contained in the Articles
of Association. Further, the Company shall ensure there is evidence that all
Delegation of Financial Authority is properly authorised by the Board.

ARTICLE VI. Guarantees and Credit Support

The Company shall not issue guarantees or letters of awareness, comfort or
support to any 3rd party without prior approval from the Board. However the
Company can indemnify and guarantee on its own performance e.g. counter
indemnify a Bank for any letter of credit or similar instrument issued on its
behalf to a third party and issue guarantees for business related matters on its
own strength e.g. custom duty bonds.

All guarantees to be given shall be explicitly limited in both value and time
and after seeking approval from the Members who shall either (a) indemnify the
Company for its issuance of the guarantee based on the Member’s respective
shareholding in the Company or (b) the Members will each directly issue the
guarantee on behalf of the Company to the third-party beneficiary for an amount
proportionate to their respective shareholding. Exceptions regarding guarantees
shall only be acceptable if indisputable legal constraints exist.

ARTICLE VII. Financial Risk Management

The Company shall have a process to identify, assess and mitigate Treasury
risks.

No hedging of foreign exchange, interest rate or commodity exposure is allowed.

ARTICLE VIII. Business Continuity Plan

In the event of a major disaster, preventing or limiting access to the Company’s
offices, critical business activities need to be performed. The Company shall
ensure that there are business continuity plans and procedures in place to
fulfil the essential commitments of cash management and exposure management.

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Schedule 4.6

Compliance with Anti-Bribery Laws

The Company insists on honesty, integrity and fairness in all aspects of its
business and expects the same in its relationships with all those with whom it
does business. The direct or indirect offer, payment, soliciting and acceptance
of bribes in any form are unacceptable practices. The Company will require the
Operator to warrant that (a) it is knowledgeable about Anti-Bribery Laws
applicable to the performance of the services under the MAO and will comply with
all such laws in the performance of its duties under the MAO; (b) no payments
received by Operator from Company or SNALNG will be made in violation of any
Anti-Bribery Law nor will any payments be made to any Government Official or
other person for the purpose of; (i) influencing an act or decision of such
Government Official in any capacity; (ii) inducing the Government Official to
use his or her influence with any agency or instrumentality of government; (iii)
assisting Company in securing or retaining any business from any agency or
instrumentality of government; or (iv) inducing any person to perform improperly
a relevant function or activity or to reward them for doing so. Operator’s
breach of the obligations contained in this clause relating to the services
provided by Operator to Owner under the MAO shall be deemed a material breach of
the MAO; provided, however, in no event shall Operator be responsible for a
violation of any Anti-Bribery Laws by SUSGP, Shell Global Solutions (US) Inc. or
any of their Affiliates where the violation that occurred was not the result of
activities performed at the direction, recommendation or suggestion of Operator.
As used in this clause, the following terms have the following meanings:

The term “Governmental Official” means:

(a)    Any official or employee of a government, government instrumentality,
government-controlled entity or public international organization;
(b)    any person acting in an official capacity for such government,
instrumentality, entity or organization;
(c)    Any political party, party official or candidate for political office; or
(d)    Anyone who holds the duties of any appointment created by custom or
convention.
The term “Anti-Bribery Laws” means:

(a)    The governing law of this Agreement pursuant to Article 14.11;
(b)    The U.S. Foreign Corrupt Practices Act, Mail Fraud Act, Wire Fraud Act
and Travel Act and various U.S. State laws that may be applicable to such party
or its contracting activities; and

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(c)    Any other applicable anti-bribery and corruption law applicable to
Operator and the services performed under the MAO.

Each Party commits to:

(a)    Respond in reasonable detail to any notice or question from any other
Party reasonably connected with the representations and warranties to be made by
Operator in the MAO; and
(b)    Furnish applicable documentary support for such response upon request
from such other party.

No Party may, on behalf of any other Party, make:

(a)    any political donation to a political party, party official or candidate
for political office; or
(b)    any financial or other contribution of any kind to influence or attempt
to influence the outcome of public referenda, elections or appointments to a
government office.
With respect to the subject matter of this Agreement, the Company will require
the Operator in performance of its duties under the MAO to agree to:

(a)    make and keep books, records and accounts that, in reasonable detail,
accurately and fairly reflect transactions and dispositions of assets (including
the purpose of each transaction and to whom it was made or from whom it was
received) for a period of five (5) years after the date of the relevant
transaction or disposition; and
(b)    promptly devise and maintain a system of internal accounting controls in
conformity with GAAP sufficient to provide reasonable assurance that:

(i)    Transactions are executed and access to assets is permitted only in
accordance with such party’s management’s general or specific authorization;
(ii)    Transactions are recorded as necessary to permit preparation of periodic
financial statements and to maintain accountability for assets;
(iii)    The recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to
any differences; and
(iv)    Any violation of any Anti-Bribery Law is likely to be detected and
therefore deterred; and

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(v)    adopt and implement written policies and procedures (including those
relating to giving or offering charitable donations, participating in community
development programs, political contributions, gifts and entertainment and
payment of travel costs, participating in business transactions with
Governmental Officials or their relatives and close associates, “facilitation
payments”, especially in connection with customs, taxes, and immigration
matters, due diligence for purposes of Anti-Bribery Laws, training on
Anti-Bribery Laws, contracting and monitoring procedures for the retention of or
partnering with agents and other suppliers of services) that are reasonably
designed to cause Operator and its officers, employees and agents to comply with
Anti-Bribery Laws.
The Company will require the Operator to do the following with respect to any
person, firm or joint venture that is engaged in any way to represent Owner
before a Government Official or to obtain any benefit from a Government Official
(a “Government Intermediary”) it may engage in connection with the services
provided in accordance with the MAO:
(a)    Conduct appropriate due diligence prior to appointing or engaging such
Government Intermediary to ensure that is duly qualified to perform the services
for which it has been engaged and is of good reputation;
(b)    Cause such Government Intermediary to:
(i)    Represent and warrant that it has not made, offered, promised or given,
and shall not make, offer, promise or give, any payment, gift, service, thing of
value or other advantage, directly or indirectly, to or for the use or benefit
of any Government Official or other Person that would violate or be contrary to
any Anti-Bribery Law, or give a representation and warranty substantially
similar in principle thereto; and
(ii)    Ensure that such Government Intermediary is obliged to impose the
requirement of paragraph (A) above on any subcontractor or other Person from
which products or services are procured in connection with the ELC Facilities;
(iii)    Use reasonable efforts to ensure that such Government Intermediaries
agree, in writing, to a right of the Operator to conduct, or appoint a third
party to conduct, audits of the books and records of such Government
Intermediary relating to this Agreement to verify such Government Intermediary’s
compliance with the requirements of its agreement; and
(iv)    Exercise the audit rights in paragraph (iii) above (if applicable) for
the purpose of verifying such Government Intermediary’s compliance with the
requirements in paragraph (ii) above upon the reasonable request by any party
and promptly report back to the parties on the results of such audit; provided
that the requesting party shall pay for the costs of the audit in circumstances
other than those in which the audit evidences a failure to comply with the
Anti-Bribery Laws, in which case the costs of the audit shall be borne by the
Operator.

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The Company will require the Operator in performance of its duties under the MAO
to:

(a)    ensure that an internal accounting controls system is in place that is
sufficient (i) to ensure the proper authorization, recording and reporting of
all transactions and preparation of financial statements in conformity with GAAP
and (ii) to provide reasonable assurance that any violation of any Anti-Bribery
Law will be detected and therefore deterred.
(b)    acknowledge and agree that Company shall have the right, not more
frequently than once each calendar year, to appoint an independent third party
to review and/or audit relevant books, records, accounts and procedures (other
than those that are of a proprietary or confidential nature) of the Operator
relating to the services to be provided by Operator under the MAO for the
purposes of verifying the Operator’s compliance with Anti-Bribery Laws and
reporting back to the Board on the results of such review and/or audit. The
Company shall also have the right to make and retain copies of any such books,
records, accounts and procedures. Save for the report back to the Parties, the
independent third party shall agree in writing with the Operator to keep all
information from such review and/or audit strictly confidential.
(c)    Agree to cooperate in any such review and/or audit.
The Company will require the Operator in performance of its duties under the MAO
to:
(a)    certify to the Company in writing its compliance with the anti-bribery
clauses to be included in the MAO on an annual basis; and
(b)    notify the Board immediately with all relevant information if it suspects
a breach of the anti-bribery clauses to be included in the MAO.
Each Member shall certify to each other Member in writing its compliance with
Anti-Bribery Laws on an annual basis with regard to matters that are the subject
of this Agreement.
Each Member shall promptly notify the other Members in writing if it has reason
to suspect that any Anti-Bribery Law has not been complied with or fulfilled by
such Member or any of its Affiliates in any material respect.
Notwithstanding any other provision of this Agreement, no Party shall be
obligated to take any action or omit to take any action under this Agreement or
in connection with the matters that are subject to this Agreement that will
cause it to be subject to fines or other penalties under any Anti-Bribery Law
applicable to it.
If any Party in good faith reasonably believes that any other Party has breached
or violated or is about to breach or violate any applicable Anti-Bribery Law
with regard to the matters that are the subject of this Agreement, the Party
that raised the concern shall, at its expense, have the right to cause an
independent Person experienced in Anti-Bribery Laws (e.g., a “Big Four”
accounting firm) to conduct an audit of the books, records, accounts and
information (other than those that are of a proprietary or confidential nature)
of such other Party with regard to the

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matters that are subject to this Agreement relevant to the potential or alleged
breach or violation and to report back to the Parties on the results of such
audit. Save for the report back to the Parties, such independent Person shall
agree in writing to keep all information from such audits strictly confidential
subject to usual exceptions for disclosures that are required by law or an order
of a court or regulatory agency.
Each Party shall fully cooperate in any audit conducted, including in making
such Party’s books, records, and personnel available to:
(a)    the independent auditor in connection with any audit; and
(b)    any investigation conducted by a Governmental Authority of competent
jurisdiction administering an Anti-Bribery Law having grounds to suspect a
breach of an applicable Anti-Bribery Law with regard to the matters that are the
subject of this Agreement, including by ensuring full and frank disclosure of
the facts and of financial and other data relating to thereto.
If any audit confirms an alleged breach or violation of an Anti-Bribery Law with
regard to the matters that are subject to this Agreement, if a Party has caused
or contributed to the alleged breach or violation, then until the matter is
remedied, the breaching Party shall cooperate fully in resolving the matter and
do all things necessary to immediately stop the conduct causing the breach or
violation and discipline the offending employees and take such other remedial
actions as they deem appropriate.
Each Party agrees that full disclosure of information relating to a possible
breach or violation of the Anti-Bribery Laws, or the existence of any terms of
this Agreement, may be made by any Party at any time and for any reason to
Government Authorities of competent jurisdiction of the U.S., in connection with
such breach or violation.
Conflicts of Interest
The Company will require the Operator in performance of its duties under the MAO
to undertake to avoid any conflict of interest between its own interests
(including the interests of Affiliates) and the interests of the Company in
dealing with suppliers and all other organizations or individuals doing or
seeking to do business with the Company in connection with activities
contemplated under this Agreement.
This clause regarding conflicts of interest does not apply to:
(a)    the Operator’s performance that is in accordance with the local
preference laws or policies of any Governmental Authority;
(b)    the Operator’s acquisition of products or services from an Affiliate, or
the sale thereof to an Affiliate, made in accordance with the terms of this
Agreement;

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EXECUTION VERSION

(c)    commercial activities undertaken by the Operator at the Elba Island
Terminal regarding the SLNG Facilities; or
(d)    commercial activities undertaken by the Operator’s Affiliates.
The Company will further require the Operator to cause its contractors or other
intermediaries or suppliers of services in performance of duties undertaken
through the MAO to comply with the provisions of this clause regarding conflicts
of interest as if it were the Operator.
Unless otherwise agreed, the Parties and their Affiliates are free to engage or
invest (directly or indirectly) in an unlimited number of activities or
businesses, any one or more of which may be related to or in competition with
the business activities contemplated under this Agreement, including operation
of the LNG Facilities, without having or incurring any obligation to offer any
interest in such business activities to any Party.

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EXECUTION VERSION

Schedule 4.7

Social Performance Policy

The Company shall endeavor to encourage local content with consideration for
local workforce and subcontracting opportunities.

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