EFFECTIVE THE
DATE COMMERCIAL OPERATIONS COMMENCE WITH RESPECT TO THE EXPANSION.
THE
EXPANSION QUANTITY SHALL BE SUBJECT TO THE SAME TERMS AND CONDITIONS AS
CURRENTLY SET FORTH IN THE TUA EXCEPT THAT THE RESERVATION FEE FOR THE EXPANSION
QUANTITY SHALL EQUAL $0.28 MULTIPLIED BY THE EXPANSION QUANTITY OR, IF THE
OPTION PROVIDED IN CLAUSE 4.1(B) HAS BEEN PREVIOUSLY EXERCISED AND CONSUMMATED,
THE RESERVATION FEE FOR SUCH EXPANSION QUANTITY SHALL EQUAL $0.20 MULTIPLIED BY
THE EXPANSION QUANTITY.
THE OPERATING FEE FOR ANY EXPANSION QUANTITY SHALL BE
CALCULATED IN ACCORDANCE WITH THE TERMS OF THE TUA.
ANY REQUESTS MADE BY
CUSTOMER FOR EXPANSION BEYOND THE AFOREMENTIONED TWO (2) YEAR PERIOD OR BEYOND
THE FIRST EXPANSION, IF ANY, SHALL REQUIRE THE MUTUAL AGREEMENT OF THE PARTIES.
ADDITIONALLY, NOTWITHSTANDING THE FOREGOING UNDERTAKING OF THE PARTIES TO
NEGOTIATE THE PROPOSED TERMS AND CONDITIONS OF THE EXPANSION IN GOOD FAITH,
CUSTOMER ACKNOWLEDGES AND AGREES THAT THE TIMING OF THE DEVELOPMENT AND
CONSTRUCTION OF THE EXPANSION SHALL BE AT SABINE'S SOLE AND ABSOLUTE DISCRETION.
ARTICLE 5
TUG AND LINE HANDLING BOATS
The Parties acknowledge that three (3) 5,000-horsepower, greater than 50 ton
bollard pull tug boats with fire-fighting capability and two (2) line handling
boats to assist with the safe berthing of LNG Vessels will be dedicated to the
Sabine Pass Facility.
Such tug and line handling boats will be available to
Customer and all Other Customers of the Sabine Pass Facility on a
non-discriminatory basis.
The Parties agree to cooperate in seeking competitive
bids to fulfill the dedication requirements for these tugs in accordance with
the TUA.
Customer shall have the right to nominate potential vendors to bid on
these services for SABINE.
It is the intent of SABINE to select the supplier
which has the most competitive bid taking into account multiple factors
including, without limitation, price, contractual terms
5
and conditions, specifications of the bid, the reputation, financial condition
and technical capability of the bidders and responsiveness of service.
ARTICLE 6
Customer Equity Participation
6.1
CUSTOMER
AND SABINE AGREE TO NEGOTIATE
EXPEDITIOUSLY AND IN GOOD FAITH MUTUALLY AGREEABLE DEFINITIVE AGREEMENTS (
"EQUITY AGREEMENT") PROVIDING FOR THE CONTRIBUTION OF $200 MILLION BY CUSTOMER
IN CONSIDERATION OF THE ACQUISITION OF A TWENTY PERCENT (20%) LIMITED
PARTNERSHIP INTEREST IN SABINE PASS LNG,L.P.
6.2
THE PARTIES AGREE THAT CUSTOMER'S OPPORTUNITY
TO NEGOTIATE FOR AND ACQUIRE EQUITY IN SABINE SHALL EXPIRE ON DECEMBER 21, 2004.
ARTICLE 7
PIPELINE COORDINATION
SABINE AND CUSTOMER AGREE TO COLLABORATE IN THE ASSESSMENT AND SELECTION OF THE
OPTIMUM PIPELINE ROUTE FROM THE SABINE PASS FACILITY TO ADJACENT INTERSTATE
PIPELINES.
ARTICLE 8
APPLICABLE LAW
The substantive laws of the State of New York, United States of America,
exclusive of any conflicts of laws principles that could require the application
of any other law, shall govern this Agreement for all purposes, including the
resolution of Disputes between the Parties.
ARTICLE 9
DISPUTE RESOLUTION
ANY DISPUTE ARISING UNDER THIS AGREEMENT SHALL BE EXCLUSIVELY AND DEFINITIVELY
RESOLVED THROUGH FINAL AND BINDING ARBITRATION PURSUANT TO THE PROVISIONS OF