Document:

Exhibit 10.6

 

This
contract for the supply of Gas is entered into by and between Pluspetrol Perú
Corporation S.A. (“Pluspetrol”), Pluspetrol Camisea S.A. (“Pluspetrol
Camisea”), Hunt Oil Company of Peru L.L.C., Sucursal del Peru (“Hunt”),
SK Energy, Sucursal Peruana (“SK”), Tecpetrol del Perú S.A.C. (“Tecpetrol”),
Sonatrach Perú Corporation
S.A.C. (“Sonatrach”), Repsol Exploración Perú, Sucursal del Perú (“Repsol,” and,
together with Pluspetrol, Pluspetrol Camisea, Hunt, SK, Tecpetrol and
Sonatrach, “Sellers” and each company, individually, as “Seller”)
and CF Industries Perú S.A.C., with RUC No. 20492304604, with domicile at Av.
De La Floresta 497, Piso 5, San Borja, Lima (hereinafter, the “Buyer”), on
the following terms and conditions:

 

RECITALS

 

The
Sellers are the licensees of the license agreement for the exploration and
production of hydrocarbons in the Camisea Reservoir, dated December 9, 2000
(hereinafter, the “License”). The participating interests of the Sellers
in the License (hereinafter, the “Participating Interests”) are as
follows:

 

	
  Pluspetrol

  	
   

  	
  2.2

  	
  %

  
	
  Pluspetrol Camisea

  	
   

  	
  25.0

  	
  %

  
	
  Hunt

  	
   

  	
  25.2

  	
  %

  
	
  SK

  	
   

  	
  17.6

  	
  %

  
	
  Sonatrach

  	
   

  	
  10.0

  	
  %

  
	
  Tecpetrol

  	
   

  	
  10.0

  	
  %

  
	
  Repsol

  	
   

  	
  10.0

  	
  %

  

 

The
Sellers declare that they have rights to volumes of natural gas according to
the License, which are (a) available for the supply and delivery to the Buyer, (b)
in accordance with the quality standards set forth in Annex A and (c) in
sufficient quantities to satisfy the obligations of the Sellers hereunder, in
each case, subject to the terms and conditions described hereinafter.

 

The
Buyer declares its intention to be supplied and receive Gas from the Sellers,
in accordance with the terms and conditions described hereinafter.

 

The
Gas to be supplied by the Sellers to the Buyer will be used by the Buyer in the
Plant to be built by the Buyer.

 

In
consequence of the above, the Parties agree on the following:

 

ARTICLE I

 

DEFINITIONS

 

Capitalized terms used in this Contract (including the preamble and
recitals hereto) shall have the meanings indicated herein below:

 

 

1.1           Affected Party: has the
meaning set forth in Point 12.6.

 

1.2           Affiliate: any Person which,
directly or indirectly, controls, is controlled by or is under common control
with another Person; and, for the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled by” or “under
common control with”) means the power to direct or cause the direction of the
management and policies of any Person, whether through the ownership of shares
or other economic interests, the holding of voting rights or contractual rights
or otherwise.

 

1.3           Applicable Cure Payment: (a) $25,000,000
for any Cure Payment made prior to the date that is seventy-two (72) Months
after the Date of Execution and (b) $50,000,000 for any Cure Payment made on or
after the date that is seventy-two (72) Months after the Date of Execution.

 

1.4           Applicable Law: collectively,
all statutes, laws, rules, regulations, ordinances, writs, judgments, decrees,
and injunctions of any Government Authority of the Republic of Perú affecting
the Buyer, the Sellers and/or this Contract and all Government Authorizations
relating thereto. Unless the context clearly requires otherwise, “Applicable
Laws” shall include each of the foregoing (and each provision thereof) as in
effect at the time in question, including any amendments, supplements,
replacements, or other modifications thereto or thereof, and whether or not in
effect as of the date hereof.

 

1.5           Article: each one of the
articles hereof.

 

1.6           Base Conditions: as used in
relation to the Gas, means the temperature of 15°C measured with a mercury
thermometer at a pressure of 1,013 Bar or 760 mm of mercury column, measured
with a Fortin-type barometer and adjusted at 0°C with a normal gravity
acceleration value. All measurements mentioned herein shall be understood as
expressed in “Base Conditions,” unless others are otherwise specifically
indicated.

 

1.7           BTU: the abbreviation for
“British Thermal Unit,” which is the heat unit in the “British Measuring System”
and is equivalent to 0.251996 kcal.

 

1.8           Business Day: any day (except
Saturdays, Sundays and public holidays in the City of Lima, Republic of Perú).

 

1.9           Buyer Milestones: has the
meaning set forth in Point 3.4.

 

1.10         Buyer’s Deferred Quantities: has
the meaning set forth in Point 5.3. 

 

1.11         Buyer’s Excused Quantities: has
the meaning set forth in Point 5.1. 

 

1.12         Camisea Reservoir: the reservoir
located at Block 88.

 

1.13         Commercial Operation Date (COD):
the Day on which commercial operation occurs in accordance with the
requirements of the EPC Contract, as declared by the Buyer to the Sellers and
written notice of which shall be given to the Sellers by the Buyer in
accordance with Point 3.4.

 

 

1.14         Conditions Precedent: has the
meaning set forth in Point 2.5.

 

1.15         Contract: this contract for the
supply of Gas together with all its Annexes, as may be amended, modified or
supplemented from time to time.

 

1.16         Contractual Month: the period
starting on the first Day of a calendar month and ending on (and including) the
last Day of that calendar month. The first Contractual Month shall begin on the
COD and shall end on (and include) the last Day of that calendar month.

 

1.17         Contractual Year: the period
starting on the first Day of a calendar year and ending on (and including) the
last Day of that calendar year; provided that (a) the first Contractual Year
shall begin on the Commercial Operation Date and shall end on (and include) the
last Day of the calendar year in which Commercial Operation Date occurs and (b)
the last Contractual Year shall begin on the first Day of the calendar year in
which the twentieth (20th) anniversary
of the Commercial Operation Date occurs and shall end on the Termination Date.

 

1.18         Cubic Meter (m3): the quantity
of steam-free Gas which in the Base Conditions occupies a volume of one cubic
meter. One (1) MMcfd means one (1) Million Cubic Feet per Day. One (1) Mcfd
means one (1) Thousand Cubic Feet per Day.

 

1.19         Cure Payment: has the meaning
set forth in Point 13.5(f).

 

1.20         Daily Contractual Quantity (DCQ):
the daily quantity of Gas designated by the Buyer for each Contractual Year.
The initial DCQ shall be designated by the Buyer no later than thirty (30) Days
prior to the COD. This initial DCQ will not be lower than eighty five per cent
(85%) of the MDCQ. No later than thirty (30) Days prior to the first Day of
each Contractual Year thereafter, Buyer shall have the right to vary the DCQ to
be effective for such Contractual Year between ninety per cent (90%) of the
original DCQ and the MDCQ.

 

1.21         Date of Execution: the day on
which the last of the Parties execute this Contract.

 

1.22         Day or Days: unless otherwise
expressly indicated, the period of time of twenty-four (24) consecutive hours
starting at 6 o’clock (6 a.m.) of any given day in the City of Lima, Republic
of Peru, and ending at five fifty nine with fifty nine seconds (5: 59,59 a.m.)
of the following day in the City of Lima, Republic of Peru, or such other
period set forth in the future pursuant to Peruvian regulations in order to
control and meter the natural gas transportation operations.

 

1.23         Default Interest Rate: the
lesser of (i) LIBOR rate + 3.5 % or (ii) the highest rate of interest allowed
under Applicable Law.

 

1.24         Defaulted Amount: has the
meaning set forth in Point 11.4.

 

1.25         Defaulting Period: has the
meaning set forth in Point 11.4.

 

1.26         Deferred Quantities Recovery Period
(DQRP): twelve (12) Contractual Months following the Contractual Month in
which the Buyer pays for the relevant Deferred Quantity, as set forth in Article
Five.

 

 

1.27         Deferred Quantity: the Gas
volume paid for but not consumed by the Buyer under the terms set forth in
Point 5.3.

 

1.28         Deliver or Pay Quantity (DOPQ):
the minimum quantity of Gas that the Sellers are obligated to make available to
the Buyer as established in Article Six.

 

1.29         Dispute: has the meaning set forth
in Point 14.2.

 

1.30         Distribution Company: the
Company that has been granted the distribution concession from the Department
of Ica, Perú.

 

1.31         Dollar or US$: the legal
currency of the United States of America.

 

1.32         DOP Make Up Gas: has the meaning
set forth in Point 6.5(i).

 

1.33         EPC Contract: the engineering,
procurement and construction contract to be entered into by the Buyer for the
construction of the Plant; provided, that such engineering, procurement and
construction contract may, at the Buyer’s sole discretion, be more than one
contract and all such contracts shall, at the Buyer’s sole discretion, be
deemed to constitute the same EPC Contract.

 

1.34         Financing: has the meaning set
forth in Point 16.2.

 

1.35         Financing Consent: has the
meaning set forth in Point 16.2.

 

1.36         Fixed Date Notice: any notice
delivered by the Parties to the addresses indicated in Article Seventeen and
with the formalities established therein.

 

1.37         Force Majeure: has the meaning
set forth in Article Twelve.

 

1.38         Gas: the natural gas produced
from the Camisea Reservoir and subject matter hereof, which is a mixture of
hydrocarbons in gaseous state essentially comprised by methane in accordance
with the quality standards set forth in Annex A.

 

1.39         Gas Sale Price: the price of the
Gas calculated in accordance with the formula set forth in Annex B and
expressed in US$/MMBTU (Dollars per million BTU).

 

1.40         Government Authority: any
national, state, regional, municipal, local, judicial, legislative, administrative
or other government authority, ministry, department, agency, unit, office or
organization (including Perupetro S.A.), which has jurisdiction over a Party or
over the properties or the assets of that Party.

 

1.41         Government Authorization: any
authorization, consent, approval, license, resolution, permit, easement,
certification, exemption, exception, registration or filing by any Government
Authority.

 

1.42         Higher Calorific Value: The
total amount of heat produced by the combustion, at a constant pressure, of a
mass of dry gas occupying a volume of one Cubic Meter, in humidity saturated
air, at a temperature for both of 15°C and at an absolute pressure of seven
hundred and

 

 

sixty
millimeters (760 mm) of mercury column adjusted at zero degrees (0° C) with
combustion steam condensation converted to a dry base. Its measurement unit
shall be the Kilocalorie per Cubic Meter (Kcal/m3).

 

1.43         ICC: has the meaning set forth
in Point 14.2

 

1.44         ICC Rules: has the meaning set
forth in Point 14.2.

 

1.45         Independent Engineer: means a
technical consultant to be reasonably acceptable to the Buyer and the Sellers.

 

1.46         Initial Expected COD Period: has
the meaning set forth in Point 3.4.

 

1.47         Kcal: the abbreviation of
Kilocalorie,  which is the
unit of heat equivalent to 3.96832 BTU as defined in the Metric System.

 

1.48         Lenders: has the meaning set
forth in Point 16.2.

 

1.49         LIBOR: means the average of the
rates per annum for deposits in Dollars for a period equal to or nearest the
number of days in a Defaulting Period which appear on the LIBOR 01 page of the
Reuter Monitor Rates Service displaying London Interbank offered rates for US
Dollars of leading banks at approximately 11: 00 a. m. (London time) on the
relevant Rate Fixing Date, provided that if one only or no offered rate appears
on the LIBOR 01 page of the Reuters Monitor Rates Service or if there is no
relevant page on the Reuters Monitor Rates Service, the rate per annum for
deposits in Dollars as of on or about 11 am (London time) on the Rate Fixing
Date for a period equivalent, so far as practicable, to the Defaulting Period
concerned and for an amount, so far as practicable, comparable to the Defaulted
Amount, which appears on the display designated as “Page 3750” on the Telerate
Service (or such other page as may replace Page 3750 on that service for the
purpose of displaying such London Interbank offered rates for deposits in
Dollars) provided that if the Telerate Service is not available or no such rate
is published or available then the average, determined by the Buyer or the
Sellers, whichever is the non-defaulting party, of the rates per annum,
supplied to it at its request, quoted by three leading international banks as the
Buyer may reasonably select from the following: BBVA, HSBC, JP Morgan Chase,
Bank of America, in the London interbank market at or about 11:00 a.m. (London
time) on the relevant Rate Fixing Date for the offering of Dollar deposits in
amounts and for a period comparable, so far as practicable, to the Defaulted
Amount and Defaulting Period. Buyer or the Sellers, whichever is the
non-defaulting party, shall inform the other party of the three leading banks
selected by it as aforesaid and of the average of the said rates.

 

1.50         License: has the meaning set
forth in the Recitals.

 

1.51         Maximum Daily Contractual Quantity
(MDCQ): shall be ninety-nine (99) MMCFD, which shall be the maximum
quantity of Gas that the Buyer may schedule for delivery by the Sellers per any
Day at the Receiving Point. Unless otherwise agreed by the Parties, the Sellers
shall not be obligated to deliver a quantity of Gas on any Day that is larger
than the MDCQ and the Buyer shall not be authorized to nominate a DCQ for
delivery on any Day that is larger than the MDCQ.

 

 

1.52         Measuring Equipment: all the
facilities used to quantify and register volumes, pressures, temperatures,
specific gravity, calorific value, and Gas composition.

 

1.53         Nomination: the monthly
communication forwarded by the Buyer to the Sellers, regarding the daily
quantity of Gas to be provided by the Sellers to the Buyer at the Receiving
Point, including any updates given in accordance with Article 7.

 

1.54         Notice of Assignment: has the
meaning set forth in Point 16.5.

 

1.55         Operational Period Effective Date:
the Day when all the Conditions Precedent become satisfied or waived.

 

1.56         OSINERGMIN: the Supervisory
Board for Investment in Energy and Mining, of Perú

 

1.57         Participating Interest: has the meaning
set forth in the Recitals.

 

1.58         Parent Company: means CF
Industries Holdings, Inc., CF Industries, Inc., or any other entity that,
directly or indirectly, owns at least 50.01% of CF Industries Perú S.A.C.

 

1.59         Party: The Sellers or the Buyer.
Parties.: both, the
Sellers and the Buyer. Pluspetrol, Pluspetrol Camisea, Hunt, SK, Sonatrach, Tecpetrol,
Repsol and the Buyer are sometimes referred to collectively as the “Parties” or
individually as a “Party”.

 

1.60         Person: an individual,
partnership, corporation (including a business trust), limited liability
company, joint stock company, trust, unincorporated association, joint venture
or other entity, or a government or any political subdivision or agency
thereof.

 

1.61         Petroleum Engineer: means De
Golyer & McNaughton, Netherland Sewell, Ryder Scott, Gaffney & Cline,
or such other internationally recognized independent petroleum engineering and
consulting firm of recognized standing in the petroleum industry that is
reasonably acceptable to the Buyer and the Sellers.

 

1.62         Petrochemical Plant: (a) the
Plant; (b) any and all pipelines connecting the Plant or other facilities with
the pipelines of the Transporter and the Distribution Company; (c) any related
port facilities that handle or transport a substantial amount of the Plant’s
output; and (d) any land (including real estate rights or rights on the ocean
bed, as the case may be) on which the Plant and/or its port facilities and its
related infrastructure are placed.

 

1.63         Plant: the Buyer’s plant to be
located in Perú, which will serve as the final destination of the Gas for the
production of petrochemicals, as well as its additional facilities, equipment
and infrastructure, including the related facilities, as these may be built or
modified from time to time.

 

1.64           Point: any point of the
Articles hereof.

 

1.65         Rate Fixing Date: has the
meaning set forth in Point 11.4.

 

 

1.66         Receiving Point: the place
existing at the beginning of the gas transportation system, located in the
liquid separation plant in Malvinas, Perú, owned by the Sellers, MAU Unit 5700,
where Sellers shall put Gas at disposal of the Buyer.

 

1.67         Required Rating: has the meaning
set forth in Point 15.1.

 

1.68         Scheduled Completion Date: the
Day that is forty-eight (48) months after the Date of Execution.

 

1.69         Scheduled Maintenance: the
periods of time in which the production site or facilities of the Sellers or
the Buyer are out of service due to a scheduled maintenance as set forth in
Points 4.3 and 4.4.

 

1.70         Sellers Coordinator: Pluspetrol,
as performing the duties set forth in Point 18.2.

 

1.71         Sellers’ Excused Quantities: has
the meaning set forth in Point 6.2.

 

1.72         Starting Date of Gas Supply: the
first Day following the Commercial Operation Date on which the Buyer makes a
Nomination.

 

1.73         Subsequent Expected COD Period:
has the meaning set forth in Point 3.4.

 

1.74         Take or Pay Percentage (TOPP):
the take or pay percentage designated by the Buyer (within the range of numbers
detailed in Annex B, Point 2.2, first column) no later than 30 Days prior to the
COD to be effective for the term of this Contract.

 

1.75         Take or Pay Quantity (TOPQ): the
minimum quantity of Gas that the Buyer is obligated to take from the Sellers,
or pay for if not taken, as established in Article Five.

 

1.76         Term: has the meaning set forth
in Point 3.1.

 

1.77         Termination Date: the date
determined in accordance with Point 3.1. 

 

1.78         Transporter: Transportadora de
Gas del Perú S.A.

 

1.79         Trigger Date: the date that is
forty-eight (48) months after the Date of Execution and each six (6) months’
anniversary of such date.

 

1.80         Yuhzny Urea Price (YUP): for any
Day, the arithmetical average of the most recent average FOB prices for Yuhzny
Prilled Urea as published by Fertecon and FMB in their weekly publications. If
only one such publication has a price available, that price will form the basis
for the calculation. If both such publications cease publishing a price, the
Parties will work together to develop a mutually acceptable substitute price
reference.

 

 

ARTICLE II

 

PURPOSE

 

2.1                                 The purpose of
this Contract is the supply of Gas (produced from the Camisea Reservoir) by the
Sellers to the Buyer, up to MDCQ, to be used at the Plant to produce
petrochemicals and generate electricity for use within the Plant. The Buyer
shall pay to the Sellers the Gas Sale Price or, in the case of the Gas used for
the generation of electricity within the Plant, such price as will be
determined in accordance with the License (as amended from time to time).

 

2.2                                 Due to the fact
that this Contract is allocated to an activity promoted by Applicable Laws, in
particular, to the supply of natural gas to produce petrochemicals and generate
electricity to be used within the Plant, the Gas to be sold under this Contract
shall not be used for any other purpose unless otherwise expressly provided
under the Applicable Laws, as may be amended, supplemented or modified from
time to time (including, but not limited to, its resale by the Buyer).

 

2.3                                 Subject to
Point 4.2, solely in relation to the supply of Gas up to the MDCQ, this Contract
shall be governed by the exclusivity clause referred to in Article 1616 of the
Peruvian Civil Code. The Buyer may acquire the Gas in excess of the MDCQ from
any supplier.

 

2.4                                 The Sellers
agree to sell and deliver the Gas at the Receiving Point, and the Buyer agrees to
be supplied, receive and pay for it at the price, terms and conditions set
forth herein.

 

2.5                                 Notwithstanding
any provision hereof to the contrary, after the Commercial Operation Date has
occurred, the duties and obligations of the Sellers to deliver Gas in
accordance with this Contract and the obligations of the Buyer to pay for this
Gas in accordance with the terms and provisions set forth in this Contract
become effective upon the satisfaction (or waiver by the Party in whose benefit
they operate) of the following conditions precedent (the “Conditions
Precedent”):

 

2.5.1.                     Existence of the Plant (with
a capacity capable of consuming 99 MMcfd), holding all material Government
Authorizations (including those determined by Supreme Decree Nr. 054-2007-EM)
necessary for its installation and operation.

 

2.5.2.                     Existence of a gas pipeline
linking the Plant to the transportation or distribution system, and other
related facilities (all of which shall be capable of transporting and
distributing Gas to the Plant).

 

2.5.3.                     Effectiveness of a gas
transportation contract between the Transporter and the Buyer.

 

2.5.4.                     If necessary, by virtue of
Buyer’s decision, in its sole discretion, to locate the Plant at a location not
serviced directly by the Transporter’s pipeline facilities, effectiveness of a
gas distribution contract between the Distribution Company and the Buyer.

 

 

2.5.5.                Existence of a port
facility, together with other related facilities, capable of handling and
transporting the output of the Plant.

 

2.5.6.                The Government
Authorizations related to the application of the Gas Sale Price and other
Government Authorizations and/or third party authorizations, in each case,
which are necessary for the supply of the Gas beginning on the Commercial
Operation Date, shall have been obtained and be in full force and effect.

 

2.5.7.                The issuance of an affidavit
by the Buyer, stating that the Conditions Precedent set forth in Points 2.5.1,
2.5.2, 2.5.3, 2.5.4 and 2.5.5 have been satisfied, and the issuance of an
affidavit by the Sellers, stating that the Conditions Precedent set forth in
Point 2.5.6 have been satisfied.

 

ARTICLE III

 

EFFECTIVENESS AND TERM OF THIS
CONTRACT

 

3.1                                 This Contract
shall become effective as and from the Date of Execution, and shall be in effect
during construction, initial startup and testing of the Plant. Beginning on the
first Day of the first Contractual Year, this Contract shall continue in effect
thereafter for a period of twenty-one (21) Contractual Years (the “Term”)
and, subject to Point 3.2, shall terminate on the 20th (twentieth)
anniversary of the first Commercial Operation Date (“Termination Date”).

 

3.2                                 After the Term
(or any extension thereof in accordance with this Point 3.2) has elapsed, this
Contract may be extended for periods of one (1) year, upon written agreement by
the Parties. For the purposes of any such extension, the Buyer shall notify the
Sellers in writing of its intention to begin negotiations, at least six (6) months
prior to the Termination Date.

 

3.3                                 The Buyer shall
be entitled, upon written notice to the Sellers, to suspend (for technical matters,
or matters related to testing activities) Articles Five and Six for a maximum
period of one hundred and eighty (180) Days, beginning with the Commercial
Operation Date. The Buyer shall promptly notify the Sellers of the termination
of such suspension and Articles Five and Six will become effective upon the
earlier of (i) the receipt of such notification and (ii) the expiry of the 180
Day period.

 

3.4                                 In order to
demonstrate the progress of the construction of the Plant, the Buyer shall perform
a number of milestones set forth in Annex C (the “Buyer Milestones”) and
submit a certificate to the Sellers stating that a certain Buyer Milestones has
been achieved. Failure to achieve Buyer Milestones shall not give rise to a
termination right or other remedies of Sellers except to the extent
specifically set forth in Point 13.5.

 

On or prior to the second (2nd) anniversary of the Date of Execution,
the Buyer shall notify the Sellers in writing of the six (6) month period
during which it reasonably anticipates the Commercial Operation Date to occur;
provided that the failure of the Commercial Operation Date to occur during such
six (6) month period shall not give rise to any right or remedy of the Sellers.

 

 

Not
later than one (1) year prior to the Scheduled Completion Date, the Buyer shall
notify the Sellers in writing of the 90-Day period during which it reasonably
anticipates the Commercial Operation Date will occur (the “Initial Expected
COD Period”). Not later than thirty (30) Days prior to the commencement of
the Initial Expected COD Period, the Buyer shall notify the Sellers in writing (a)
of the Day during the Initial Expected COD Period on which the Buyer reasonably
anticipates that the Commercial Operation Date will occur or (b) that the
Commercial Operation Date is not expected to occur during the Initial Expected
COD Period, in which event the Buyer shall state the new 90-Day period during
which it reasonably anticipates the Commercial Operation Date will occur (a “Subsequent
Expected COD Period”). Not later than thirty (30) Days prior to the
commencement of a Subsequent Expected COD Period, the Buyer shall notify the Sellers
in writing (i) of the Day during such Subsequent Expected COD Period on which
the Buyer reasonably anticipates that the Commercial Operation Date will occur
or (ii) that it is establishing a new Subsequent Expected COD Period in
accordance with the preceding clause (b), in which case the process
contemplated by this sentence shall be repeated until the Buyer notifies the
Sellers in writing of the Day during the applicable Subsequent Expected COD
Period on which the Buyer reasonably anticipates that the Commercial Operation
Date will occur. Notwithstanding anything to the contrary contained in this
Point 3.4, and except as provided in Point 13.5, the failure of the Commercial
Operation Date to occur during the Initial Expected COD Period, during a Subsequent
Expected COD Period or on the Day established in accordance with clause (a) or (i)
above shall not give rise to any right or remedy of the Sellers.

 

The
Sellers may, at their option (at any time, but not to be exercised more than
three times in any calendar year), request that the Buyer provide them with the
Buyer’s reasonable anticipation as to the six (6) month period during which the
Commercial Operation Date will occur, and the Buyer shall provide same to the
Sellers within thirty (30) Days after such request is made; provided
that the failure of the Commercial Operation Date to occur during such six (6) month
period shall not give rise to any right or remedy of the Sellers except as
provided in Point 13.5. The Sellers will have the option to sell the Gas to
third parties until the Commercial Operation Date occurs, provided that
such sale shall not impede the Sellers’ ability to deliver the Gas to the Buyer
for testing and commissioning activities in accordance with Point 3.5.

 

3.5                                 No later than
sixty (60) Days before the scheduled testing and commissioning activities  of the Plant
(the “Testing Period”), the Buyer shall submit a notice to the Sellers
that will set forth the starting Day of the Testing Period and the estimated
final Day of the Testing Period. The Sellers shall provide Gas at the Receiving
Point reasonably needed to conduct tests during the Testing Period and to
establish the Commercial Operation Date in such quantities as nominated by the
Buyer. The Parties understand that during the Testing Period the nominations
may vary and the requirements of Articles 5, 6, or 7 shall not apply. The Buyer
shall notify the Sellers of the Buyer’s good faith nomination of the quantity
of Gas required in connection with any such tests no later than two Days before
the Day of delivery. The sale and delivery of any Gas provided under this Point
3.5 shall be subject to the terms and conditions of this Contract (other than
the requirements set forth in Articles 5, 6 and 7) and the Buyer shall pay the
Sellers for Gas provided under this Point 3.5 the Gas Sale Price for the Day of
delivery determined according to the conditions stated in Annex B.

 

 

ARTICLE IV

 

SUPPLY

 

4.1                                 The Sellers
hereby undertake to make available to the Buyer, at the Receiving Point, the quantity
of Gas nominated for each Day, up to the agreed MDCQ, transfer of ownership and
risk of which shall be governed by Point 8.3.

 

4.2                                 During the
Term, the Buyer undertakes to purchase Gas up to the MDCQ exclusively from the
Sellers, unless the Sellers fail to supply the Gas in the quantities requested
by the Buyer for any reason. For the avoidance of doubt, the Buyer shall be
entitled to purchase the Gas in excess of the MDCQ from a third party at any
time during the term of this Contract.

 

4.3                                 The Sellers may
interrupt their obligations under Article 6 without being obligated to pay to
the Buyer any compensation and/or damages if:

 

(i)                                     they are
required to perform Scheduled Maintenance (including expansion works at their
processing plants in Malvinas and/or Pisco and their various facilities) in
which case the Sellers’ Coordinator shall notify the Buyer at least one hundred
and fifty (150) Days in advance of such Scheduled Maintenance, stating the
first and the last Day of such Scheduled Maintenance; and

 

(ii)                                  the Scheduled
Maintenance does not exceed a period of twenty (20) Days per Contractual Year,
provided that any period of Scheduled Maintenance works of the Buyer shall not
count against such period even if planned outage of the Sellers occurs during
such period of Scheduled Maintenance of the Buyer. If such 20-Day period is
exceeded, the provisions set forth in Article Six shall apply to the Days in
excess of such limits.

 

For
the avoidance of doubt, the terms of Point 4.2 shall not apply during any
Scheduled Maintenance by the Sellers.

 

4.4                                 The Buyer may
interrupt its obligations under Article 5 without being obligated to pay to Sellers
any compensation and /or damages if:

 

(i)                                     it is required
to perform Scheduled Maintenance (including expansion works at the Plant) in
which case the Buyer shall notify the Sellers at least ninety (90) Days in
advance of such Scheduled Maintenance, stating the first and the last Day of
such Scheduled Maintenance; and

 

(ii)                                  the Scheduled
Maintenance works of the Buyer shall not exceed sixty (60) Days per period of
four (4) consecutive Contractual Years, provided that any period of Scheduled
Maintenance works of the Sellers shall not count against such 60-Day limit even
if a planned outage of the Buyer occurs during such period of Scheduled
Maintenance of the Sellers. If such 60-Day limit is exceeded, the provisions
set forth in Article Five shall apply to the Days in excess of such 60-Day
limit.

 

 

4.5                                 The Parties
understand that a certain period of time per Contractual Year is required for the
Transporter and the Distribution Company, as the case may be, to carry out
maintenance works pursuant to the provisions set forth in the respective BOOT
Concession Contracts for the Pipeline Transportation of Natural Gas from Camisea
to the City Gate, for the Liquid Transportation Pipeline System and for the
Distribution of Natural Gas by Pipeline Network in the Department of Ica,
respectively. The Buyer and the Sellers will each use their best commercial
efforts in order to cause all Scheduled Maintenances to occur concurrently with
each other, and with the Transporter and the Distribution Company. The
provisions of Articles Five and Six shall be suspended during the period the
Transporter’s and the Distribution Company’s scheduled maintenance is being
carried out, in each case, to the extent such scheduled maintenance prevents
Buyer from taking Gas.

 

4.6                                 If the Sellers
should interrupt the supply of Gas (for any period of time) due to maintenance
works other than Scheduled Maintenance and for reasons other than Force Majeure
events, the Sellers shall pay to the Buyer the compensation set forth in Article
Six for any such period. In such case, Article Five and the exclusivity
obligation indicated in Point 4.2 shall not be applicable to the Buyer during
the period of time of the said unscheduled maintenance works.

 

ARTICLE V 

 

TAKE OR PAY

 

The
Take-Or-Pay Quantity is the minimum amount of Gas that the Buyer must either
take, or pay for if not taken, during each Contractual Month.

 

5.1                                 In any
Contractual Month, the Buyer shall be excused from any obligation to take delivery
of a quantity of Gas (“Buyer’s Excused Quantities”) equal to the sum
over all the Days in the Contractual Month of: (i) any quantities of natural
Gas not taken by the Buyer due to Force Majeure affecting the Buyer, including
without limitation any quantities of Gas that cannot be delivered for the
reasons set forth in Point 12.2(d) whether or not Force Majeure was declared by
the Buyer; plus (ii) any quantities of Gas that the Buyer schedules for
delivery and the Sellers fail to deliver for any reason (including for the
reasons of Scheduled Maintenance set forth in Point 4.3); plus (iii) any Gas
properly rejected by the Buyer or the Transporter at the Receiving Point for
not satisfying the quality specifications; plus (iv) any quantities of Gas that
the Buyer does not require due to Scheduled Maintenance in accordance with
Point 4.4.

 

5.2                                 The TOPQ for
any Contractual Month shall equal: (i) the product of (A) the DCQ designated by
the Buyer for the applicable Contractual Year multiplied by (B) the TOPP,
multiplied by (C) the number of Days in such Contractual Month; less (ii) any
quantities of Gas that are Buyer’s Excused Quantities for such Contractual
Month.

 

5.3                                 In any
Contractual Month, if the Buyer takes a total quantity of Gas in such Contractual Month that is
less than the TOPQ for such Contractual Month, then the Buyer must pay to the
Sellers a take-or-pay charge equal to the product of: (i) the Gas Sale Price
multiplied by (ii) a quantity of Gas (“Buyer’s Deferred Quantities”) equal
to (A) the TOPQ for such Contractual Month, less (B) the quantity of Gas
actually taken in such Contractual Month.

 

 

5.4                                 The Buyer is
entitled to recover, within the DQRP, the Buyer’s Deferred Quantities following
the sequential order in which they occurred. This recovery shall be effected
with the quantities of Gas taken during the DQRP in excess of the TOPQ in
effect during such DQRP, provided that such quantities in excess of the TOPQ
may not exceed the MDCQ without the consent of the Sellers. If on expiry of
this Contract there should remain Buyer’s Deferred Quantities pending recovery,
the Buyer may recover the corresponding quantities after such expiry, within a
maximum period of twelve (12) months, as may be extended by such period of time
(if any) during which the Sellers fail to deliver the Deferred Quantities (as
requested by the Buyer) for reasons other than Force Majeure.

 

5.5                                 At any time
that the most recently determined weekly YUP closes below one hundred and
twenty-five Dollars (US$125) per tonne, the Buyer shall have the right to
suspend the application of a take or pay charge by giving the Sellers not less
than seven (7) Days’ prior written notice (a “Suspended TOPQ”). After
such written notice is given, a Suspended TOPQ shah be in effect on each Day
from the Day set forth in such notice until the earlier of (a) seven (7) Days
after the Day on which the Buyer gives the Sellers written notice that it is
terminating the Suspended TOPQ and (b) seven (7) Days after the most recently
determined YUP closes above one hundred and twenty-five Dollars (US$125) per
tonne. The volume of Gas not taken by the Buyer during a Suspended TOPQ can be
used freely by the Sellers. Notwithstanding anything to the contrary contained
herein, in the event Suspended TOPQs are in effect for more than three hundred
and sixty-five (365) Days, in the aggregate, the Sellers shall have the right
to terminate this Contract by giving the Buyer at least thirty (30) Days’ prior
written notice.

 

For
the purposes of this Point 5.5, the TOPQ for any Contractual Month in which a
Suspended TOPQ is in effect shall equal: (i) the product of (A) the DCQ
designated by the Buyer for the applicable Contractual Year multiplied by (B) the
TOPP designated by the Buyer for the term of this Contract, multiplied by (C) the
number of Days in such Contractual Month other than Days in Which a Suspended
TOPQ was in effect; less (ii) any quantity of Gas that are the Buyer’s Excused
Quantities for such Contractual Month.

 

5.6                                 Subject to
Point 19.6, if the Buyer fails to comply with its obligations to take Gas from the
Sellers in accordance with this Contract and such failure is not otherwise
excused under this Contract, (a) the Sellers’ remedies will be limited solely
to those described in this Article Five and no additional penalties will apply;
(b) the Buyer shall not be responsible for any Consequential Damages (as
defined in Point 19.6); and (c) the Sellers hereby
waive any claim of indemnity that may arise from the Buyer’s failure to take
the TOPQ of the Gas in accordance with this Article 5.

 

ARTICLE VI

 

DELIVER OR PAY

 

6.1                                 The Deliver or
Pay Quantity is the amount of Gas scheduled by the Buyer for delivery in any
Contractual Month that the Sellers must pay for if not delivered during such
Contractual Month.

 

 

6.2                                 On any Day
during the Term, the Sellers shall be excused from any obligation to deliver a
quantity of Gas (“Sellers’ Excused Quantities”) equal to the sum of: (i)
any quantities of Gas scheduled by the Buyer but not delivered by the Sellers
due to Force Majeure affecting the Sellers, including without limitation any
quantities of Gas that cannot be delivered for the reasons set forth in Point
12.2(d) whether or not Force Majeure was declared by the Sellers; plus (ii) any
quantities of Gas scheduled by the Buyer but which the Buyer fails to take for
any reason, other than quantities of Gas properly rejected by the Buyer or the
Transporter at the Receiving Point for not satisfying the quality
specifications; plus (iii) the amount, if any, by which the DCQ exceeds the
quantity of natural gas scheduled by the Buyer for that Day; plus (iv) any
quantities of Gas that the Sellers are not required to deliver due to Scheduled
Maintenance in accordance with Point 4.3.

 

6.3                                 The DOPQ for
any Contractual Month shall be equal to the sum for all of the Days in such
Contractual Month of: (i) the DCQ; less (ii) the quantity of Gas actually
delivered by the Sellers to the Buyer at the Receiving Point on each Day of
such Contractual Month; less (iii) any quantities of Gas that are the Sellers’
Excused Quantities for each Day of such Contractual Month.

 

6.4                                 On any Day
during the Term, if any Gas is tendered, for delivery at the Receiving Point that
does not meet the Gas quality specifications and the Transporter or the Buyer
rejects such Gas, then any such rejected Gas quantities shall be considered as
quantities of Gas that were not delivered by the Sellers for such Day, and will
not be considered as part of the Sellers’ Excused Quantities for such Day.

 

6.5                                 If in any
Contractual Month the DOPQ for such Contractual Month is a non-zero positive  quantity, then
the Sellers may:

 

(i)                                     provided the
Buyer can make use of the Gas at the Plant, deliver to the Buyer quantities of
Gas up to 100% of the DOPQ (“DOP Make Up Gas”), in which case the Buyer
shall not be obligated to make any payment to the Sellers in respect of such
DOP Make Up Gas. The performance of this option shall not increase the
corresponding TOPQ; or

 

(ii)                                  pay to the
Buyer a Deliver-or-Pay charge equal to the product of: (x) the Gas Sale Price
multiplied by (y) the DOPQ for such Contractual Month. Any such Deliver-or-Pay
charge that is undisputed may be set-off against the invoice corresponding to
the Gas consumption of the following month in which the Sellers incurred a DOP
charge; provided, however, that if (i) the Buyer is not in breach of its
payment obligations hereunder and (ii) there are not enough amounts invoiced by
the Sellers so that such charges cannot be set-off against any such invoices
for a period of ninety (90) days following the last day of the Contractual
Month in which the DOP charge was incurred, then any such undisputed
Deliver-or-Pay charge that remains unpaid after such ninety (90) day period,
shall be paid by the Sellers to the Buyer within ten (10) Business Days as from
the lapse of such 90-day period.

 

 

6.6                                 Subject to
Point 19.6, if the Sellers fail to comply with their obligations to deliver Gas
to the Buyer in accordance with this Contract and such failure is not otherwise
excused under this Contract, (a) the Buyer’s remedies will be limited solely to
those described in this Article Six and compensation of the Buyer by the
Sellers for any additional transportation and/or distribution costs (if any)
actually incurred by the Buyer as a result of such failure, and no additional
penalties will apply; (b) the Sellers shall not be responsible for any
Consequential Damages (as defined in Point 19.6); and (c) the Buyer hereby
waives any claim of indemnity that may arise from the Sellers’ failure to
deliver the DOPQ of the Gas in accordance with this Article Six.

 

6.7                                 The Sellers
agree that, provided they are producing gas at the Camisea Reservoir and injecting
it into the Transporter’s pipeline, they will be obligated to sell Gas
hereunder to Buyer up to the MDCQ. In cases where the Sellers cannot make
available to the Buyer, at the Receiving Point, the quantity of Gas nominated
for each Day, up to the agreed MDCQ, due to Force Majeure or Emergency Events
(as defined hereunder), the priority for available supplies of Gas shall be
determined (a) if there is Applicable Law or binding legal direction of any
Government Authority, according to such Applicable Law or such binding legal
direction of the Government Authority; or (b) if there is no Applicable Law or
binding legal direction of any Government Authority, on a pro-rata basis,
considering the Gas quantities properly nominated for the relevant Day by Buyer
pursuant to the Contract and by other buyers under all existing gas supply
contracts from the Camisea Reservoir between Sellers and third parties. For the
avoidance of doubt, nothing in this Section 6.7 shall affect nor increase or
decrease the Sellers’ liabilities under Sections 6.1, 6.2, 6.3, 6.4, 6.5 and
6.6.

 

“Emergency
Event”: means an emergency event, as defined in the Glossary of the
Hydrocarbons Sector (“Glosario, Siglas y Abreviaturas del Subsector
Hidrocarburos”), as approved by Supreme Decree No. 032-2002-EM, as amended by
Supreme Decree No. 048-2009-EM, in each case as effective as of the date of
this Agreement. For the avoidance of doubt, an Emergency Event does not include
shortages of Gas that may arise (i) due to the Sellers’ over commitment to
deliver Gas to other customers in excess of the amount of Gas they are capable
of producing at the Camisea Reservoir and injecting into the Transporter’s
pipeline (whether pursuant to gas supply agreements or otherwise) or (ii) due
to the capacity of the Sellers to sell Gas at a higher or more favorable price
than that established herein.

 

ARTICLE VII

 

NOMINATIONS

 

7.1                                 Subject to
Point 3.5, the Buyer shall nominate the daily quantities of Gas by twelve o’clock
(12 p.m.) on the Business Day immediately preceding the Day on which the Gas
volumes shall be made available to it by the Sellers at the Receiving Point.
The Sellers’ Coordinator shall confirm such quantities before 2 p.m. on the
Business Day the Buyer nominates the daily quantities of Gas. This activity
shall be done each and every Business Day from the Starting Date of Gas Supply.
If the Buyer does not make such Nomination on a certain Business Day, this
shall mean it is nominating the quantity nominated on the preceding Business
Day or the last quantity the Buyer had nominated. If the Sellers’ Coordinator
does not confirm the Nomination by the Buyer, it shall be understood as
confirmed.

 

 

7.2                                 In those cases where the Sellers agree
with the Transporter on an operational balance, they shall implement an account
to inject Gas into the Transporter’s pipeline from which the Sellers may
perform the delivery of Gas to the Buyer, following authorization of the
Transporter. The Sellers’s Coordinator shall be responsible for securing
authorization from the Transporter and coordinating with it.

 

7.3                                 In none of the Contractual Days shall the
Sellers be obligated to deliver or the Buyer to  take Gas volumes exceeding the MDCQ, unless the
Parties agree otherwise.

 

ARTICLE VIII

 

RECEIVING POINT - TRANSFER
OF OWNERSHIP, MEASUREMENTS.

 

8.1                                 The Gas shall be delivered
by the Sellers to the Buyer at the Receiving Point.

 

8.2                                 The Sellers may modify the Receiving
Point, subject to the consent of the Buyer, not to be unreasonably withheld and
provided such modification shall not affect the supply of Gas to the Plant,
including the quality standards set forth in Annex A and the ability to conduct
accurate measurements in accordance with this Article Eight. Any costs caused
by the change shall be borne by the Sellers and not by the Buyer.

 

8.3                                 Subject to Point 6.5, by 6:00 a.m. on the
Day following the Day when the Nomination is made (or deemed made) by the Buyer
in accordance with Point 7.1 and confirmed (or deemed confirmed) by the Sellers
in accordance with Point 7.1, the Sellers shall make the quantity of Gas set
forth in such Nomination available to the Buyer at the Receiving Point. The
transfer of ownership and risk over the Gas shall pass from the Sellers to the
Buyer once the Gas has been made available to the Buyer at the Receiving Point
in accordance with the preceding sentence. The Buyer shall have exclusive
ownership and control of the Gas once the Gas has been made available to the
Buyer at the Receiving Point. The Buyer will be responsible for the Gas
transportation from the Receiving Point to the Plant.

 

8.4                                 The Sellers shall maintain a register of
the measurements and quantities of Gas delivered by the Sellers to Buyer at the
Receiving Point which register will be used by the Sellers to prepare and issue
the invoices in accordance with Article Eleven. Such measurement system shall
be approved by the Transporter.

 

8.5                                 The quantity and heat contents of the
supplied Gas shall be determined at the Receiving Point by using the Sellers’
Measuring Equipment, which the Sellers shall, or shall cause to, install, operate
and maintain under their responsibility at the Receiving Point, duly equipped
and operated as required by Applicable Law. Each Party has the right to
inspect, verify and participate in the adjustments and audits of the Sellers’
Measuring Equipment, which shall be performed with reasonable frequency, prior
notice and without unnecessarily interrupting or interfering with the Sellers’
activities related to this Contract.

 

8.6                                 The price, the quantities consumed, the
billing and the DCQ, MDCQ, DOPQ and TOPQ shall be adjusted in energy units
(MMBTU). The installed Sellers’ Measuring Equipment shall facilitate such
calculation.

 

 

8.7                                 The Buyer shall
install, operate and maintain under its responsibility and within the Plant the
Measuring Equipment solely for the purposes of measuring the amount of Gas used
to produce electricity for the Plant for the purposes of Annex B, Point 5. The
Sellers have the right to inspect, verify and participate in the adjustments
and audits of such Measuring Equipment, which shall be performed at reasonable
frequency, with reasonable prior notice and without unnecessarily interrupting
or interfering with the Buyer’s activities at the Plant.

 

ARTICLE IX

 

QUALITY

 

9.1                                 The Sellers
shall deliver the Gas in accordance with the quality standards set forth in Annex
A and shall maintain the quality of gas within the specifications set forth in
Annex A.

 

9.2                                 In the event
that the quality of Gas does not conform to the standards of Annex A, the Sellers’
Coordinator shall notify the Buyer as soon as reasonably possible that the Gas
available for delivery does not meet the quality specifications of Annex A,
providing details on the nature and magnitude of the difference, the reason for
the failure to comply and the probable duration of such situation. Any amount
of Gas that does not meet the specifications and is rejected by the Buyer or
the Transporter in accordance with Point 6.4 shall be considered to have not
been made available by the Sellers for the purposes of Article Six.

 

9.3                                 The Buyer will
be deemed to have rejected the Gas that does not meet the specifications, in
which case the remedies of the Buyer will be determined in accordance with Article
Six and Point 13.2, unless the Buyer at any time notifies the Sellers that the
Buyer accepts the total or partial delivery of such Gas, in which case the
Sellers shall deliver the Gas only after receipt of Buyer’s acceptance. If the
Buyer accepts the Gas that does not meet the specifications, unless such Gas is
rejected by the Transporter in accordance with Point 6.4, the Buyer will not
have right to make any future claim with respect to such Gas and the provisions
of Article Six with respect to non-conforming Gas will not apply. The Buyer’s
partial or total acceptance of non-conforming Gas at any time shall not be
construed to limit its ability to reject any non-conforming Gas that may be
delivered by the Sellers at any future time.

 

ARTICLE X

 

PRICE - TAXES

 

10.1                           The Gas Sale
Price shall be determined according to the conditions stated in Annex B. For
the purposes of Point 5 of Annex B, the YUP will be determined in accordance
with its definition. Neither the Buyer nor the Sellers will undertake any
activities or roles in an effort to lobby the Government Authorities to alter
the Gas Sale Price agreed in this Contract.

 

10.2                           The Gas Sale
Price shall not include any indirect consumption tax that may be applicable to
the transference of Gas and which by Applicable Law must be shifted by the
Sellers to the Buyer, such as Impuesto
General a las Ventas, Impuesto de Promoción Municipal, Impuesto Selectivo al
Consumo, and any other tax of similar nature, which shall be
added to the pertinent invoicing.

 

 

10.3        With respect to taxes, it is
further agreed by the Parties that:

 

(a)                            the Sellers
shall be liable for all taxes, rates, encumbrances, contributions, royalties
and other tax costs, present and future, which shall be applicable to and/or
originated with respect to the Gas prior to the Receiving Point, including all
taxes specific to the activities of producing and/or selling the Gas, except
for any indirect consumption tax that may be applicable to the transference of
Gas and which by Applicable Law must be shifted by the Sellers to the Buyer,
such as Impuesto General a las Ventas,
Impuesto de Promoción
Municipal, Impuesto Selectivo al Consumo, and any other of similar
nature; and

 

(b)                            the Buyer shall
be liable for all taxes, rates, encumbrances, contributions, royalties and
other tax costs, present and future, which shall be applicable and/or
originated with respect to the Gas at and after the Receiving Point, including
all taxes specific to the activities of manufacturing and selling of nitrogen
fertilizers, and/or buying of Gas. For the avoidance of doubt, the Buyer will
not be responsible for the income tax resulting from the Sellers’ sale of Gas
to the Buyer or the royalties on natural gas production.

 

ARTICLE XI

 

INVOICING AND PAYMENT

 

11.1        The quantities of Gas
acquired by the Buyer shall be measured by the heat content (BTU), referring to
the Higher Calorific Value, and then invoiced in Dollars. The invoice shall be
issued on the basis of measurements made at the Receiving Point by the Sellers’
Measuring Equipment, and shall be certified by the Transporter.

 

11.2        The Sellers shall provide
monthly invoices to the Buyer, all amounts in Dollars, due and owing under this
Contract for each Contractual Month. Within ten (10) Days immediately after the
last Day in each Contractual Month, the Sellers shall bill the Buyer for the
quantities of Gas delivered in such month specifying the quantity corresponding
to the TOPQ, if applicable, also taking into account the provisions of Article Five
and Article Six. The Buyer shall pay each such monthly invoice in Dollars on or
before the Day that is ten (10) Days after Buyer’s receipt of each invoice. If
the due date falls on a Saturday, the payment shall be made on the preceding
Business Day. If the due date falls on a Sunday or non-working holiday, the
payment shall be made by the following Business Day.

 

With
respect to any amounts due from the Sellers to the Buyer, the Buyer may invoice
the Sellers in Dollars, monthly, and the Sellers shall pay in Dollars on or
before the last Day of the ten (10) Days after Sellers’ receipt of each invoice
or set off the undisputed amounts due against any amount due from Buyer to
Sellers under this Contract. If the Sellers have to pay any amount to the Buyer,
if the due date falls on a Saturday, the payment shall be made on the preceding
Business Day. If the due date falls on a Sunday or a non-working holiday, the
payment shall be made by the following Business Day.

 

 

11.3        Invoices issued by the
Sellers shall include the Gas supplies made during the pertinent period,
detailing the volumes of Gas, the heat contents, the unit price, discounts and
the total amount. Should the Buyer require additional information with respect
to the billing and/or measurement, such information shall be provided by the
Sellers within ten (10) Business Days after submission of such request.

 

11.4        All payments or amounts to
be made or discharged hereunder in cash, shall be made in immediately
available, unencumbered and freely transferable US Dollars funds, made not
later than 12:00 pm (noon) City of Lima time on the Day in question to the
nominated account.

 

Without
prejudice of the foregoing, and without limiting obligations to discharge and
settle in US Dollars hereunder, the Parties undertake, in the event of any
foreign exchange restriction or prohibition in Peru being in effect which
restricts the ability to perform US Dollar denominated payment obligations,
that the paying Party shall (x) utilize and implement every available lawful
mechanism in Peru (but solely to the extent it is commercially reasonable to do
so) for the acquisition of US Dollars in any local or international exchange
market and (y) if there are no available lawful mechanisms in Peru, or it is
not commercially reasonable to implement them, each Seller hereby agrees that
the Buyer shall be required to make any and all US Dollar denominated payments
hereunder to such Seller at an account or address outside Peru; provided
that, in each case, no default of the provisions of this Agreement shall be
deemed to have occurred due to any delay in payment of the amounts due while
the paying Party is fulfilling, complying or following any of the lawful
mechanisms available in Peru for the acquisition of US Dollars. All costs
including any taxes, relating to any transaction related to this clause shall
be borne by the paying Party.

 

In
case of any failure by a Party to make a timely payment of any amount owed to
the other Party under this Contract (the “Defaulted Amount”), such
amounts shall accrue interest for the period of time (the “Defaulting Period”)
beginning on the Day immediately following the due date (the “Rate Fixing- Date”) under this Contract and
continuing until the date such amounts are paid, without the need of a judicial
or extrajudicial demand. The interest owed on any such amounts shall accrue at
an annual percentage rate equal to Default Interest Rate. In case of failure by
the Buyer to pay the undisputed portion of any three (3) monthly invoices
outstanding at any one time, the Sellers shall be able to interrupt the supply
of Gas upon ten (10) Business Days’ notice until such time as the Buyer has
cured such failure.

 

11.5        In case of any disputes with
respect to any of the invoices submitted in accordance with this Article 11,
the Buyer shall pay the undisputed sum within ten (10) Days of receipt of such
invoice and may file a written claim to the Sellers with respect to the
disputed portion of such invoice.

 

11.6        If, within ten (10) Days
after the due date with respect to any invoice, the Buyer has not filed any
written claim in accordance with Point 11.5, the Buyer shall fully pay the
disputed amount without prejudice to the exercising of its right to file a
claim at a later date.

 

 

11.7        In the event the Buyer has
filed a written claim with respect to any invoice which has been accepted by
the Sellers in writing, invoicing differences shall be applied to the invoice
of the following Contractual Month.

 

11.8        If, as a result of a written
claim with respect to any invoice, the Parties are not able to reach an
agreement with respect to the disputed amount, they may submit the Dispute to
arbitration as provided for in Article Fourteen.

 

11.9        If the award settling any
Dispute initiated in accordance with Point 11.8 is unfavorable to the Buyer, it
shall pay the amount claimed and unpaid, plus the default interest established
pursuant to Point 11.4, taking into account the application of the Default
Interest Rate as from the due date on which the claimed amount was to be paid.
Otherwise, the Sellers shall reimburse the Buyer for any amount paid which
claim is favorable to the Buyer, adding thereto the Default Interest Rate
calculated as from the date on which the Buyer made such payment in favor of
the Sellers.

 

11.10      An account statement or invoice
may only be questioned within a term of twelve (12) Contractual Months
following their receipt. The Buyer shall notify the Sellers of a mistake made
and request the pertinent correction. If a term of twelve (12) Contractual
Months following the receipt of notice has elapsed, an invoice or account
statement shall be considered correct, final and acceptable for both Parties,
except for the items, as applicable, which have been objected to in accordance
with the foregoing.

 

ARTICLE XII

 

FORCE MAJEURE

 

12.1        None of the Parties shall be
responsible for non-compliance or for partial, late or defective compliance
with an obligation during the time such Party is affected by a Force Majeure
event, provided such Party has provided evidence that such cause impeded its
due compliance.

 

12.2        For the purposes hereof,
Force Majeure shall include events beyond the reasonable control of a Party and
which cannot be avoided by due diligence and reasonable care of such Party,
including (but not limited to), among others:

 

(a)                                 Any act of
external war (whether declared or not), invasion, armed conflict, roadblocks,
embargo, revolution, riots, insurrection, civil commotion or acts of terrorism
or threat thereof, civil disturbance, sanction or any other restriction on the
export of goods.

 

(b)                                 Any workers’
strike (whether declared or not, legal or not) affecting the Parties hereto.

 

(c)                                  Any earthquake,
flood, storm, hurricane, tornado, thunderstorm, fire, explosion,
extreme weather or similar event, provided it directly affects the Sellers’ or
the Buyer’s facilities, in whole or in part.

 

 

(d)                                 A Force Majeure
event declared by the Transporter or the technical impossibility by the
Transporter to carry the Gas (including any interruption, curtailment or
cessation of transportation, but excluding any maintenance works in respect of
the Transporter in excess of the periods contemplated by Article 4), which may
include the transportation system of Gas or natural gas liquids by pipeline,
and/or the facilities of the Distribution Company by the pipeline network in
the Department of Ica, if applicable, as from the moment it occurs, provided it
prevents the Buyer from receiving the agreed TOPQ
or prevents the Sellers from complying with their commitment to supply
the Gas as per this Contract, as applicable.

 

(e)                                  In the case of
the Sellers, the loss, serious damage or the inoperability of the processing
plants of Las Malvinas and/or Pisco, including the freezing or rupture of the
pipelines and auxiliary facilities related to the transportation of unprocessed
Gas from the Camisea Reservoir to Las Malvinas plant.

 

(f)                                   In the case of
the Sellers, damage or destruction of the Camisea Reservoir (including (i) inexistence,
loss or failure of gas reserves and (ii) depletion or lack of economically
recoverable Gas and natural liquids in the Camisea Reservoir, in each case, as
a consequence of such damage or destruction) due to events beyond the
reasonable control of the Sellers (provided that, it shall not be a Force
Majeure event if it results from the Sellers’ commitments to sell Gas beyond
the gas reserves existing at the time of each sale, as they were described in
the most recent certification of such reserves made by a recognized independent
international petroleum engineering firm in accordance with standard industry
practices at the time of relevant sale).

 

(g)                                    The loss,
serious accidental damage or inoperability of the Plant or inability of any of
its facilities (including port facilities, whether or not owned by the Buyer)
to receive the Gas, store or dispatch the products of the Plant.

 

(h)                                 Failure to
obtain Government Authorizations and/or private authorizations (excluding the
invalidity, refusal or expiration of any approval or permit from any Government
Authority or the impossibility of obtaining them, to the extent the affected
Party may request and obtain, maintain or execute, or was able to reasonably
request, obtain, maintain or execute such approval or permit, or in the event
of failure to act by the affected Party, failure to observe the terms and
conditions of any existing approval or authorization, or any other legal
requirement).

 

(i)                                     The acts or
failures to act of any Government Authority, the effect of which would prevent,
delay or make unlawful or commercially uneconomic Sellers’ or Buyer’s
performance hereunder, or would require

 

 

the Sellers or the Buyer, in order to comply with said act, to take
measures which are commercially unreasonable in the circumstances.

 

12.3        For the avoidance of doubt,
Force Majeure events shall not include:

 

(a)                                 The breakdown
or failure of equipment caused by normal wear and tear, lack of adequate
maintenance of the equipment or spare parts.

 

(b)                                 The
unavailability or lack of funds.

 

(c)                                  The capacity of
the Sellers to sell Gas at a higher or more favorable price than that
established herein, or the capacity of the Buyer to acquire the Gas at a lesser
or more favorable price than that established herein.

 

12.4        A Force Majeure event shall
not relieve the Parties from the duty of compliance with any of their duties
not partially or totally affected by such events. In such case, the affected
duties shall be suspended for the entire time the Force Majeure event lasts and
the term of this Contract shall be extended, if the Parties so agree and if
possible, for a period equal to the event giving rise to such suspension.

 

12.5        The Party invoking a Force
Majeure event shall inform the other Party regarding the facts constituting
such Force Majeure event within forty-eight (48) hours following its
occurrence, providing details of the event and stating the obligations the
execution of which is or will be impeded, delayed or prevented, and (both in
the original notice and any additional notices) indicating: (i) an estimate in
good faith of the likely duration of the event of Force Majeure and the period
during which its performance may be suspended or diminished, including, to the
extent that it may be communicated or established, the estimated scope of such
diminishment in performance; and (ii) the details of the schedule to be
implemented and any other corrective measure already taken to assure the total
resumption of the normal performance established herein. Delivery of such
notice by the Sellers, through the Sellers’ Coordinator, shall constitute a
declaration by the Sellers that they are entitled and authorized to make such
determination and issue said declaration. In order to resume the normal
performance of this Contract as soon as possible, the affected Party shall
adopt all reasonable commercial measures according to the circumstances and for
the purposes thereof, taking into account the consequences arising from such
event of Force Majeure for the affected Party. Before the resumption of normal
performance, the Parties shall continue complying with their obligations as
established herein to the extent that these are not exempted or prevented by
said event of Force Majeure. The failure by an affected Party to submit a
notice of a Force Majeure event in accordance with this Point 12.5 will not
prevent such Party from claiming the Force Majeure event, unless the other
Party can show that it was materially prejudiced and suffered actual damages as
a result of such failure.

 

12.6        If (i) an event of Force
Majeure prevents a Party declaring a Force Majeure (an “Affected Party”)
from supplying (in the case of the Sellers) or receiving (in the case of the
Buyer) of any amount of Gas provided herein for an uninterrupted period of more
than twelve (12) Contractual Months and (ii) there is no reasonable prospect
that such supply or receipt (as the case may be) be resumed, the unaffected
Party shall be entitled, though not obliged, to terminate this Contract after
ninety (90) Days as from the receipt of such notice at any moment following the
expiration

 

 

of
such period of twelve (12) Contractual Months. Any valid termination shall not
result in any liability for the unaffected Party. For the avoidance of doubt,
the Affected Party shall not be entitled to terminate this Contract under this
Point 12.6.

 

12.7        In the event that one of the
Parties is not in agreement with the qualification of the event as a Force
Majeure event, such party shall initiate the procedure for settling Disputes in
accordance with Article Fourteen, within fifteen (15) Business Days from the
notice of the event issued by the Party invoking it. Once such period elapses
without any objections having been raised by the Party notified of the event
and provided that Point 12.5 has been complied with, it shall be understood
that such Party has accepted the event as such, unless facts or circumstances
discovered by such Party after said period clearly demonstrate that the event
does not constitute a Force Majeure event.

 

12.8        Once the claimed and
accepted Force Majeure cases are settled, the Parties shall recommence full
compliance with their contractual duties with reasonable promptness, and none
of the Parties shall have the right to request any services or claim
indemnities for the period of inactivity.

 

12.9        No Force Majeure event can
be claimed in order to justify the default on payment of sums of money.

 

ARTICLE XIII

 

TERMINATION OF THIS CONTRACT

 

13.1        The Sellers may terminate
this Contract if the Buyer is in default on the payment of the undisputed
portion of any three (3) monthly invoices concurrently outstanding, which
default is not cured within a period of three (3) months of receipt by the
Buyer of the Fixed Date Notice from the Sellers notifying the Buyer of such
default.

 

13.2        If the Sellers fail to
comply with their obligation to deliver Gas or pay any undisputed portion of
the DOPQ charge due to causes other than a Force Majeure event or Scheduled
Maintenance for ninety (90) (consecutive or non-consecutive) Days within a
period of one (1) year, the Buyer may terminate this Contract following a Fixed
Date Notice to the Sellers and this Contract shall be terminated if the default
is not fully cured by either delivery of the missing quantities of Gas or by
payment of the appropriate undisputed DOPQ charge in accordance with Article 6
within a period of fifteen (15) Days after receipt by the Sellers of such Fixed
Date Notice.

 

13.3        The Sellers or the Buyer may
terminate this Contract, pursuant to article 1430 of the Peruvian Civil Code,
in the event the authorizations for the installation of the Plant granted by
the applicable Government Authority to the Buyer is rendered null and void
through an administrative act of the highest instance. In such case,
termination of this Contract shall not result in a claim by the Buyer or the
Sellers for any indemnity and/or payments agreed on by them.

 

13.4        The Sellers may terminate
this Contract in case the Buyer (i) is dissolved (by a process other than
consolidation or merger); or (ii) has initiated (or other person has initiated
against it) a

 

 

process
seeking a declaration of insolvency or bankruptcy under the provisions of the
Bankruptcy System Act, Act 27809, as amended, and such proceeding results in a
declaration of insolvency or bankruptcy; or (iii) makes a general assignment,
arrangement or settlement with or for the benefit of its creditors without the
consent of the Sellers; or (iv) pursues or is subject to the appointment of an
administrator, temporary liquidator, custodian, receiver, trustee, depositary
or similar officer for itself or for the entirety of its assets.

 

13.4.1      The Buyer may
terminate this Contract, pursuant to what is established in article 1430 of the
Peruvian Civil Code, in case the License is terminated.

 

13.5        The Sellers shall have the
following termination rights in respect of the Buyer’s failure to achieve
certain Buyer Milestones:

 

(a)                                      The Sellers
shall be entitled to terminate this Contract upon thirty (30) days’ notice to
the Buyer unless the Buyer shall have cured such failure within such thirty
(30) day period, in the event that (i) the Buyer has not obtained requisite
internal approval to commence a FEED study in respect of the Plant on or before
March 1, 2009 (as certified in writing by the Buyer to the Sellers) and (ii) Buyer
has not provided a workaround plan that maintains the proposed schedule for
completion of the Plant (such workaround plan to be certified as reasonable by
an independent Engineer); provided, however, that if a
workaround plan is provided as set forth in item (ii), the action referred to
in item (i) shall be postponed for the period of time set forth in such
workaround plan, which shall not exceed one hundred and eighty (180) days as
from the date set forth in item (i);

 

(b)                                      The Sellers
shall be entitled to terminate this Contract upon thirty (30) days’ notice to
the Buyer unless the Buyer shall have cured such failure within such thirty
(30) day period, in the event that (i) the Buyer has not engaged a third party
contractor to prepare a FEED Study in respect of the Plant on or before April 1,
2009 (as certified in writing by the Buyer to the Sellers) and (ii) the Buyer
has not provided a workaround plan that maintains the proposed schedule for
completion of the Plant (such workaround plan to be certified as reasonable by
an Independent Engineer); provided, however, that if a
workaround plan is provided as set forth in item (ii), the action referred to
in item (i) shall be postponed for the period of time set forth in such
workaround plan, which shall not exceed one hundred and eighty (180) days as
from the date set forth in item (i);

 

(c)                                       The Sellers
shall be entitled to terminate this Contract upon thirty (30) days’ notice to
the Buyer unless the Buyer shall have cured such failure within such thirty
(30) day period, in the event that (i) on or before March 16, 2010 the Buyer
has not submitted an environmental assessment and detailed environmental work
to the Governmental Authorities in respect of the Plant (as certified in
writing by the Buyer to the Sellers) and (ii) the

 

 

Buyer
has not provided a workaround plan that maintains the proposed schedule for
completion of the Plant (such workaround plan to be certified as reasonable by
an independent Engineer); provided,
however, that if a workaround plan is provided as set forth in item
(ii), the action referred to in item (i) shall be postponed for the period of
time set forth in such workaround plan, which shall not exceed one hundred and
eighty (180) days as from the date set forth in item (i);

 

(d)                                      The Sellers
shall be entitled to terminate this Contract upon thirty (30) days’ notice to
the Buyer unless the Buyer shall have cured such failure within such thirty
(30) day period, in the event that (i) the FEED Study contemplated by clause (b)
above has not been completed on or before May 1, 2010 (as certified in writing
by the Buyer to the Sellers) and (ii) the Buyer has not provided a workaround
plan that maintains the proposed schedule for completion of the Plant (such
workaround plan to be certified as reasonable by an Independent Engineer); provided, however, that
if a workaround plan is provided as set forth in item (ii), the action referred
to in item (i) shall be postponed for the period of time set forth in such
workaround plan, which shall not exceed one hundred and eighty (180) days as
from the date set forth in item (i);

 

(e)                                       The Sellers
shall be entitled to terminate this Contract upon thirty (30) days’ notice to
the Buyer unless the Buyer shall have cured such failure within such thirty
(30) day period, in the event that (i) the Buyer has not entered into the EPC
Contract and commenced detailed engineering work on or before July 1, 2010 (as
certified in writing by the Buyer to the Sellers) and (ii) the Buyer has not
provided a workaround plan that maintains the proposed schedule for completion
of the Plant (such workaround plan to be certified as reasonable by an
Independent Engineer); provided,
however, that if a workaround plan is provided as set forth in item
(ii), the action referred to in item (i) shall be postponed for the period of
time set forth in such workaround plan, which shall not exceed one hundred and
eighty (180) days as from the date set forth in item (i); and

 

(f)                                        In the event
that, on any Trigger Date, the Operational Period Effective Date has not
occurred and the Commercial Operation Date has not occurred, the Sellers shall
be entitled to terminate this Contract upon thirty (30) Days’ notice to the
Buyer, provided, however, that for a Trigger Date that occurs not later than
ninety-six (96) months after the Date of Execution, the Buyer shall be entitled
to avoid termination in that case if, during such thirty (30) day period, the
Buyer makes a payment (any such payment, a “Cure Payment”) in an amount
equal to the Applicable Cure Payment (such Cure Payment to be applied as a
prepayment of the Buyer’s obligations under this Contract following the
Operational Period Effective Date or as a non-refundable security deposit in
the event the Operational Period Effective Date never occurs). For the
avoidance of doubt, in the

 

 

event
Buyer has previously made a Cure Payment, this clause (e) shall not be
applicable (and Sellers shall not be entitled to attempt to terminate this
Contract in accordance with this clause (f)) until the next Trigger Date to
occur after such Cure Payment is made.

 

ARTICLE XIV

 

GOVERNING LAW - SETTLEMENT OF DISPUTES

 

14.1        This Contract shall be
governed by and construed in accordance with the laws of the Republic of Peru.

 

14.2        Any dispute, controversy or
claim arising out of, relating to or in connection with this Contract (“Dispute”),
including any question regarding its existence, validity or termination, or
regarding a material breach thereof which cannot be resolved by good faith
discussions between the Parties within 60 (sixty) days (or such longer period
as may be agreed by the claimant Party) shall be referred to, and shall be
finally settled by the Court of Arbitration of the International Chamber of
Commerce (the “ICC”) in accordance with the Rules of Arbitration of the
International Chamber of Commerce then in effect (“ICC Rules”).

 

The
place of arbitration shall be New York City, New York, U.S.A., the arbitration
language shall be the English language, and any arbitral award shall be deemed
to have been made in New York City, New York, U.S.A. The arbitration tribunal
shall consist of three (3) independent arbitrators, with one arbitrator to be
appointed by the Sellers, another arbitrator to be appointed by the Buyer, and
a third arbitrator, to be appointed by the two appointed arbitrators, who shall
head the arbitration panel. Except as otherwise provided herein, the
appointment of arbitrators shall be performed in accordance with the ICC Rules.
The decision of the arbitration panel shall include a statement of reasons for
such decision, and the award shall be final and binding on the Parties.

 

14.3        Each of the Parties hereby
irrevocably and unconditionally waives any right to immunity regarding itself
and its property and agrees not to claim or have any immunity with respect to
the issues provided herein, or in any arbitration, trial or action hereunder,
whether initiated as provided for by law or in any other manner, which it may
have or may acquire in the future, including the rights provided for in the
doctrine of the sovereign immunity of the state, immunity before legal
proceedings (including notices of procedural acts or judicial notices,
pre-judgment attachment before the award, or attachment supporting the
execution), immunity from jurisdiction or decision issued by any arbitration
court (including any questioning or complaint of forum non conveniens), and the
immunity against the demand or execution of any award, judgment or any other
remedy.

 

14.4        The Parties have undertaken
to resolve all Disputes promptly and efficiently. Consequently, if two (2) or
more Disputes arise between the same Parties, any of such Disputes may be
submitted to a single arbitration proceeding or be contained in a single
arbitration proceeding. If one (1) or more arbitration proceedings is already
pending between the same Parties with respect to a Dispute, then any of the
Parties may request that a new Dispute be consolidated into any prior
arbitration. If more than one (1) arbitration is pending between the

 

 

same
Parties, then the Parties to the Dispute shall designate, within twenty (20)
days following the request to consolidate a new Dispute, one (1) of the pending
arbitrations into which the new Dispute shall be consolidated. If the
arbitration Parties are not able to choose the arbitration within a term of
twenty (20) days, the ICC shall designate the proper arbitration within twenty
(20) days from the written request by any of the Parties. The new Dispute will
be consolidated, provided the arbitration court in charge of the selected
arbitration finds that: (i) the new Dispute has findings of fact or conclusions
of law common to the pending arbitration; (ii) none of the Parties shall be
wrongfully harmed; and (iii) the consolidation under these circumstances shall
not unreasonably delay the pending arbitration. Any order for consolidation
issued by the arbitration court shall be final and conclusive for the Parties.
The Parties hereby waive their right to receive counsel for appeal or seek the
interpretation, review or annulment of such order for accumulation in
accordance with ICC Rules or before any other court. The arbitration court in
charge of the arbitration into which the new Dispute is consolidated shall
serve as the arbitration court for the consolidated arbitration. The Parties
agree that if an order for consolidation is issued, they shall immediately
dismiss any arbitration started as provided for herein which purpose has been
consolidated into other arbitration proceeding.

 

ARTICLE XV

 

GUARANTEE

 

15.1        At all times after the
Starting Date of Gas Supply, the Buyer shall be required to comply with any one
of the following conditions, in the Buyer’s sole discretion:

 

(a)                                      Risk Rating: Maintenance of a credit
rating (the “Required
Rating”) as follows: (i) for its unsecured long-term senior
debt obligations, not lower than “BB” or its equivalent (international rating
scale) granted by Standard & Poor’s, Moody’s Investors Service, Inc., Fitch
Ratings or any other recognized international rating agency or (ii) for common
shares, not lower than “Ba-2” or its equivalent (international rating scale),
granted by an international rating agency; or (iii) for long-term unsecured
senior debt obligations, not lower than “AA-” (local scale), granted by Apoyo y
Asociados Internacionales S.A.C., Pacific Credit Rating, Equilibrium or any
other recognized local rating agency; or (iv) for common shares, not lower than
“A-1” (local scale), granted by a local rating agency; or, if the Buyer does
not have the Required Rating or fails to maintain the Required Rating, but the
Parent Company of Buyer does have the Required Rating, the Parent Company of
Buyer may provide to the Sellers a guarantee of the Buyer’s obligations under
this Contract in form and substance satisfactory to the Sellers, as informed by
Sellers’ Coordinator.

 

(b)                                      Letter of Credit: The Buyer shall give to the
Sellers a bank letter of credit (LC) (satisfactory to the Sellers’) to
guarantee the Buyer’s obligations hereunder, or any liability related to the
payment of invoices for the supply of Gas issued according to this Contract,
including interest, issued by JPMorgan Chase Bank, or any other institution
satisfactory to the Sellers that maintains the credit rating set forth in the
last sentence of this

 

 

clause
(b); provided that, the Buyer shall, if it selects this option initially,
deliver such LC to the Sellers not later than thirty (30) Days prior to the
Starting Date of Gas Supply. This letter of credit can be either a standby LC
or a documentary LC, and will be irrevocable and unconditional without
requirement of demand (sin beneficio de excusión) and with
automatic extension, for an amount that corresponds to twenty-five per cent
(25%) of the MDCQ applied for a period of twelve (12) months. The LC shall be
in force for a period of not less than one hundred eighty (180) Days as of the
moment of delivery to the Sellers, and shall be automatically renewed thirty
(30) Days prior to its termination. The issuer bank shall maintain a credit
rating not lower than “A-” (international scale), granted by an international
credit risk agency (Standard & Poor’s, Moody’s or Fitch Rating), or a
credit rating not lower than “A” (local scale), granted by a Peruvian risk
rating agency (Apoyo y Asociados Internacionales S.A.C., Pacific Credit rating
or Equilibrium), provided that the Buyer shall have the right to replace the LC
in accordance with clause (d) below if the issuing bank fails to maintain such
rating.

 

(c)                                  Pre-Payment: The Buyer shall
make an advance payment for an amount corresponding to the MDCQ applied to
sixty (60) Days, such payment to be deposited in an interest bearing escrow
account that can be drawn on by the Sellers in the event of non-payment by the
Buyer hereunder; provided that, the Buyer shall, if it selects this option
initially, make such prepayment not later than fifteen (15) Days prior to the
Starting Date of Gas Supply.

 

(d)                                 Buyer’s
Discretion: The Buyer is entitled to choose any option
outlined in Point (a), (b) or (c) above in its sole discretion at any time. The
Buyer is entitled to replace an option adopted pursuant to the foregoing with
any other option referred to in this Article at any time. If the first option
was adopted and at any time the Required Rating is lost, Buyer must adopt another
option within fifteen (15) Days.

 

ARTICLE XVI

 

ASSIGNMENTS

 

16.1         Except as
otherwise provided in this Article 16, neither Party shall assign its rights, obligations
and/or its position with respect to this Contract, in whole or in part, without
the prior written consent of the other Party, unless (i) such assignment is
carried out in favor of an assigning Party’s Affiliate and the
Assigning Party remains liable for all obligations relating to the assigned
interest or, (ii) in the case of the Sellers, in favor of another Seller or of
a company which owns a Participating Interest in the License (each, the “Assignee”):
provided that, after giving effect to such assignment, the Assignee is
capable, in all material respects, of performing its obligations under this
Contract.

 

 

16.2         The Buyer
contemplates obtaining debt financing (in the form of loans, bonds, notes,
letters of credit or other indebtedness) to be secured by a collateral
assignment of all or a portion of the Plant and its rights under this Contract
(each, a “Financing”).  Any such collateral assignment shall be
permitted hereunder without the consent of any Seller, and in the event the
Buyer applies for or obtains any Financing (or any refinancing thereof), the
Sellers shall, notwithstanding the existence of any claim, dispute or
litigation between the parties hereto, promptly execute (a) a consent and
agreement in substantially the form attached hereto as Annex D (a “Financing
Consent”) with such changes as are reasonably satisfactory to the Sellers
and Buyer and the lenders or other holders of debt under such
Financing (collectively, the “Lenders”), including any additional
reasonable terms or provisions negotiated in good faith among the parties and
the Lenders, (b) one or more opinions of counsel to any Lender regarding the
enforceability of the Sellers’ obligations under this Contract and such other
matters reasonably requested by such Lender negotiated in good faith among the
parties and the Lenders, and (c) any other reasonable document negotiated in
good faith among the parties and the Lenders requested to enable the Buyer to
finance the construction of the Plant (including a consent to a pledge of the
equity interests in the Buyer); provided, however, that (a) with respect to any
confidential information received from the Sellers, such Lenders are subject to
confidentiality obligations consistent with international standards and
practices for lenders in similar transactions, and (b) subject to this Point
16.2, a Party shall not be required to execute and deliver any documents and/or
certificates that would materially alter that Party’s rights and obligations
under this Agreement. The Buyer agrees to pay promptly on demand all reasonable
expenses and taxes incurred by the Sellers in connection with the actions
contemplated in this Point 16.2.

 

16.3         Any Seller may
assign all or any part of its credit rights to amounts of money receivable by
said Seller as a result of the signing, implementation and fulfillment of this
Contract in favor of its lenders. Any such collateral assignment shall be
permitted hereunder without the consent of the Buyer, and in the event such
Seller applies for or obtains any financing (or any refinancing thereof), the
Buyer shall, notwithstanding the existence of any claim, dispute or litigation
between the parties hereto, promptly execute (a) a consent and agreement in
substantially the form of the Financing Consent with such changes as are
reasonably satisfactory to the Sellers and Buyer and the lenders or other
holders of debt under such financing, including any additional reasonable terms
or provisions negotiated in good faith among the parties and the lenders, (b) one
or more opinions of counsel to any lender regarding the enforceability of the
Buyer’s obligations under this Contract and such other matters reasonably
requested by such lender negotiated in good faith among the parties and the
lenders, and (c) any other reasonable document negotiated in good faith among
the parties and the lenders requested to enable the Sellers to assign their
credit rights (including a consent to a pledge of the equity interests in the
Sellers); provided, however, that (a) with respect to any confidential
information received from the Buyer, such lenders are subject to
confidentiality obligations consistent with international standards and
practices for lenders in similar transactions, and (b) subject to this Point
16.3, a Party shall not be required to execute and deliver any documents and/or
certificates that would materially alter that Party’s rights and obligations
under this Agreement. The Sellers agree to pay promptly on demand all
reasonable expenses and taxes incurred by the Buyer in connection with the
actions contemplated in this Point 16.3.

 

 

16.4         The Buyer’s
parent company may sell, assign or pledge equity interests in the Buyer to
third party investors, including selling part or all of its interests in the
Buyer, together with the Petrochemical Plant, to any third party subject to the
Sellers’ prior written approval, which shall not be unreasonably withheld,
conditioned or delayed. In determining whether or not to provide such approval,
the Sellers shall consider the ability (both financially and operationally) of
the Buyer to perform its obligations under this Contract.

 

16.5         Pursuant to Section
1435, Paragraph 3 of the Civil Code, the assignments expressly approved in
advance in the preceding points shall have full force and effect from the date
on which the assignment contract has been notified through a Fixed Date Notice
forwarded to the Sellers or to the Buyer, as applicable (“Notice of
Assignment”).

 

16.6         The Parties may
hire services from third parties for the administration of the rights and
obligations assumed, being able to assign operating and/or administrative
activities, serving notice of their decision to the other Party. In this case,
the Party hiring such services from third parties shall be responsible for the
actions carried out by such third parties as if they were its own acts.

 

ARTICLE XVII

 

ADDRESS FOR SERVICE OF NOTICES

 

17.1         All notices or
correspondence (including the invoices related to this Contract, which shall  be in Spanish
language as established by the Applicable Law, with duplicates in English) from
one Party to the other shall be carried out in writing and with acknowledgement
of receipt (forwarded personally or by courier) and shall be submitted to the
following addresses or the address that the Party requests through a notice, or
sent by fax or e mail, addressed to the person(s) indicated below or to any
other person(s) that the other Party requests through a notice. Any notice or
communication forwarded by one Party to the other pursuant to the foregoing
shall be considered received by the other Party, if it is forwarded personally
or by means of a courier, on the date on which it is delivered to the address
of such Party, or if sent by fax or e mail, on the Business Day immediately
following the date on which it was sent to the address of that Party, as
follows:

 

 

(a)                                  Sellers’
address:

 

PLUSPETROL

Av.
República de Panamá 3055 

San
Isidro, Lima, Perú

Fax:
511 411 7117

 

Attention:                                         Sergio Eduardo
CAVALLIN

scavallin@pluspetrol.net

Commercial
Manager

 

Cc:
Guillermo Carlos Schinelli 

Buenos
Aires, Argentina

Fax:
5411 4340 2310

 

HUNT

Av.
V.A. Belaúnde 147, Vía Principal 140 

Torre
Real Seis, Of. 503

San
Isidro- Lima, Perú

 

To
the attention of:

Mr
Carlos del Solar 

cdelsolar@huntoil.com

Fax:
(511) 707-4199

 

SK

Calle
Amador Merino Reyna N° 267, Of 702

Edificio
“Parque Plaza”

San
Isidro, Lima 27 - Perú

 

To
the attention of:

General
Manager 

camisea@skenergy.com

(511)
421 3783

 

SONATRACH

Av.
V.A. Belaunde 147, Vía Principal 110 

Torre
Real Cinco

San
Isidro- Lima, Perú

 

To
the attention of:

Mr
Mahtali Ketfi 

mahtali.ketfi@sonatrach.com.pe

(511)
221 4774

 

TECPETROL

C.M.
Della Parlera 299,Piso 20 C1001ADA 

Buenos
Aires, Argentina

 

To
the attention of:

Mr.
German Crivelli

german.crivelli@tecpetrol.com

(5411)
4018 5812

 

REPSOL

Av.
V.A. Belaunde 147, Vía Principal 140

San
Isidro- Lima, Perú

 

To
the attention of:

Mr.
Evandro Correa 

enacul@repsolypf.com

(5411) 421 7757

 

(b)                              Buyer’s address:

 

Av. De La Floresta 497,
Piso 5 

San Borja, Lima, Perú

 

To
the attention of:

Mr.
Lynn F. White

lynnwhite@cfindustries.com

(847)
405-2531

cc:
Mr. Douglas C. Barnard

 

17.2         Either Party
may change its address, serving notice of this change to the other as
established in Point 17.1. This new address shall be valid as from the date on
which the change of address is notified.

 

17.3         The
communications forwarded to the Sellers at the address indicated in Point 17.1(a)
shall be considered submitted to each company that is a Seller. Likewise, the
communications forwarded to the Buyer by the Sellers Coordinator shall be
considered as submitted by all the Sellers, unless any of them decides to
individually submit a claim, which shall be considered to be carried out up to
the limits of its Participating Interest.

 

ARTICLE XVIII

 

OBLIGATIONS AND RESPONSIBILITIES OF THE SELLERS. COORDINATION.

 

18.1         All the
liabilities of the Sellers under this Contract, in its various Articles, Points
and  Annexes, shall be several but not joint, up to their respective
Participating Interest in the License (as they are detailed in the Recitals
hereto). Accordingly, the responsibility for damages, losses, claims for
failure to comply with the obligations set forth or any other hereunder shall
be assumed by each of the Sellers according to their Participating Interest. In
the same manner, the Sellers rights set forth in this Contract will be
exercised by each of the Sellers in accordance with their respective
Participating Interests, except otherwise stated herein.

 

18.2         Pluspetrol
shall act as Sellers’ Coordinator in relation to the operational aspects
related to this Contract.

 

ARTICLE XIX

 

MISCELLANEOUS PROVISION

 

19.1         The official
language of this Contract will be Spanish. However, any communication under or
in connection with this Contract shall be in the English language or, if in any
other language, accompanied by a translation into English. In the event of any
conflict between the English text and the text in any other language
corresponding to those communications, the English text shall prevail.

 

19.2         No amendment,
modification or addition to this Contract shall be valid or binding between the
Parties, unless otherwise agreed to in writing by all of the Parties.

 

 

19.3         Interpretation:

 

(a)                                  References in this Contract
to Articles, Points and Annexes are made to the Articles, Points and Annexes of
this Contract, unless otherwise stated. The headings are only given for
purposes of convenience, and shall not be used for interpretation of this
Contract.

 

(b)                                 The words “includes” or
“including” shall be construed as “includes without limitation” and “including
without limitation” whether or not so stated. Furthermore, the examples given
shall not be construed as limited, expressly or implicitly, to the matters
which they illustrate. Reference to a contract or Contract shall mean the
contract or Contract as it may be amended at any moment, unless otherwise
stated. The measurement units from the International System of Units (and not
as defined hereunder) shall have the meanings set forth in the ISO 1000
standard publications (1992 SI units). The values expressed in any unit shall
be converted into another unit according to the equivalencies set forth in the
ISO 1000 standard publications (1992 SI units).

 

(c)                                  In order to calculate the
terms as from a Day (or a day) or specified Day (or day) up to a Day (or a day)
or specified Day (or day), the word “as from” means “as from but including” and
the words “up to” and “to” mean “up to and including”.

 

(d)                                 Any provision or resolution
that establishes that an action may or shall be adopted within a determined
number of Days shall mean that such action must be adopted within such term, as
from six o’clock (6:00 a.m.) of the Day on which the right or obligation to
adopt such action originated.

 

(e)                                  Any date or terms shall be
established in reference to the Gregorian calendar. References to a certain
hour of the Day or the day shall refer to the hour in Lima, Peru, unless
otherwise stated.

 

(f)                                    If any dispute arises
between the contents of this Contract or the content of its Annexes, the
contents of this Contract shall prevail.

 

(g)                                 The meanings given to terms
or expressions defined in Article 1 or any other part herein shall be, as
allowed by the context, equally applicable in singular or plural.

 

(h)                                 References to a Party, the
Sellers or the Buyer shall include their  successor(s) or authorized
assignee(s).

 

19.4         The Buyer
represents and warrants to the Sellers and each of the Sellers represent to the
Buyer that:

 

(a)          It is fully authorized to act as a
legal entity and enter into this Contract.

 

 

(b)                                 All the
necessary actions as a legal entity to authorize the execution and delivery of
this Contract and the compliance with its obligations provided hereunder have
been duly adopted;

 

(c)                                  This Contract
has been duly executed and delivered by an authorized officer or other
representative of such Party and constitutes the legal, valid and binding
obligation of such Party, enforceable according to the terms hereunder, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors’ rights generally or by
equitable principles relating to enforceability;

 

(d)                                 The consent or
approval by any other Person in connection with the execution or granting of
this Contract is not required by such Party; and

 

(e)                                  The execution,
granting and performance of this Contract does not violate the articles of
incorporation of such Party or any other material document in which such Party
acted as a signatory or is bound by virtue thereof.

 

19.5.        The Sellers
hereby represent and warrant to the Buyer that, on the Date of Execution, the
License is in full force and effect, the Sellers have title to the Gas under
the License and the Applicable Laws, and the Sellers have not committed any
breach, violation or infringement under the terms of the License. At any time
after the Date of Execution, at the Buyer’s request (but not more frequently
than once per calendar year), the Sellers shall provide to the Buyer at the
Sellers’ expense, a copy of the most recent reserve certificate (prepared by
the Petroleum Engineer) issued during the previous calendar year, as it may be
reasonably necessary to facilitate the financing, project development and
marketing efforts of the Buyer in respect of the Plant. The existing most
recent reserve certificate is attached as Annex E hereto. Subject to the
Buyer’s confidentiality obligations to the Sellers in respect of this Contract,
the Sellers shall make their best reasonable efforts to provide complementary
information regarding reserves, as long as this information (i) is requested by
the Buyer’s lenders that intend to provide financing of the Plant; or (ii) is
determined by the Buyer’s Board of Directors as reasonably necessary to be
obtained prior to the entry into the engineering, procurement and construction
contract for the Plant.

 

l9.6          Except in case
of gross negligence and willful misconduct, none of  the Parties shall be liable
to any other Party for any indirect, special or punitive damage or loss, loss
of profit or interruption of activities (the “Consequential Damages”),
suffered or incurred by such other Party arising from this Contract, in
connection to it or resulting therefrom, whether or not any claim for such
damage or loss is based on tort (including negligence but not gross
negligence), objective responsibility, contractual responsibility (including
the violation or infringement of this Contract or failure to comply with any
statement or guarantee, whether express or implicit, contained herein) or
otherwise. This limitation shall not apply to or limit, in any manner
whatsoever, the responsibility of any of the Parties regarding an indemnity for
determined damages pursuant to this Contract. For the avoidance of doubt, this
Point 19.6 shall not limit the

 

 

Consequential
Damages that may be recoverable by a Party in case of gross negligence or
willful misconduct of the other Party, and shall be construed so as to be in
compliance with Articles 1328 of the Civil Code and Article 1986 of the Civil
Code.

 

19.7         Any delay by
the Parties in exercising or enforcing their rights or actions established
herein shall not be interpreted, under any circumstance, as waiving them or
releasing the other Party from the violations occurred without affecting the
right of the Parties to enforce such provisions as provided for hereunder,
unless otherwise expressly stated.

 

19.8         If any
provision established herein is declared unenforceable, null or contrary to
law, this shall not render any other provision of this Contract unenforceable,
null or contrary to law, and this Contract shall continue in full force and
effect pursuant to the remaining provisions, unless such provision renders void
the purpose or intention of this Contract.

 

ARTICLE XX

 

ADDITIONAL ARTICLE

 

(i)           It is hereby
certified that on January 18, 2006, the Trust Administration Contract was entered
into by and between Pluspetrol Camisea, as Trustor; Banco de Crédito del Perú,
as Trust Beneficiary; and La Fiduciaria S.A., as Trustee.
By virtue thereof, Pluspetrol Camisea transferred to the Trust Assets
administered by La Fiduciaria S.A., among others, the collection rights corresponding
to the amounts to be received by Pluspetrol Camisea by virtue of this Contract
for the Exclusive Supply entered into with the Buyer.

 

(ii)          For the
purposes thereof, the Parties to this Contract and the Additional Article do
hereby certify that the payments in favor of Pluspetrol Camisea by virtue of
this Contract for the Exclusive Supply shall be made to Account Number No. 000-000-739-382233
opened by La Fiduciaria at JP Morgan Chase & Company.

 

(iii)         The Parties
also hereby state that as long as written instructions to the contrary are not
received from La Fiduciaria S.A., the entirety of the amounts of money to be
paid by the Buyer by virtue hereof as provided by Item (i) shall be made as
provided for in this Additional Article.

 

(iv)                         Any amendment
or suspension of the form in which payments shall be made shall be requested by
La Fiduciaria S.A. in order to be effective. Pluspetrol Camisea does hereby
irrevocably state that in the event it sends instructions to the contrary, this
instruction shall continue in full force and effect. Therefore, the Buyer shall
continue to make the payments to La Fiduciaria S.A. with no responsibility at
all for the Buyer, considering these payments as correctly made (in all cases).

 

IN
WITNESS WHEREOF, this Contract is executed in eight (8) counterparts
under the same terms and conditions, in the city of Lima, this 7th of October of 2009.

 

 

	
   

  	
  PLUSPETROL
  PERU CORPORATION S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Claudio de Diego

  
	
   

  	
   

  	
  Name:  Claudio de Diego

  
	
   

  	
   

  	
  Position:
  General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLUSPETROL
  CAMISEA S.A.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Claudio de Diego

  
	
   

  	
   

  	
  Name:  Claudio de Diego

  
	
   

  	
   

  	
  Position:
  General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HUNT OIL COMPANY OF PERU
  L.L.C.,

  
	
   

  	
  Sucursal
  del Perú

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jerome Bell

  
	
   

  	
   

  	
  Name:  Jerome Bell

  
	
   

  	
   

  	
  Position:  Apoderado

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SK
  CORPORATION, Sucursal Peruana

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Han Yin Joo

  
	
   

  	
   

  	
  Name:  Han Yin Joo

  
	
   

  	
   

  	
  Position:  General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SONATRACH
  PERU CORPORATION S.A.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mahtali Ketfi

  
	
   

  	
   

  	
  Name:  Mahtali Ketfi

  
	
   

  	
   

  	
  Position:  General Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TECPETROL
  DE PERU S.A.C.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rosa Maria del Carmen Ludowieg

  
	
   

  	
   

  	
  Name:
  Rosa Maria del Carmen Ludowieg

  
	
   

  	
   

  	
  Alvarez
  Calderon

  
	
   

  	
   

  	
  Position:  Representante

  

 

 

	
   

  	
  TECPETROL
  DE PERU S.A.C.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Fabio Alberto Gaudelli

  
	
   

  	
   

  	
  Name:  Fabio Alberto Gaudelli

  
	
   

  	
   

  	
  Position:  Representante

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  REPSOL
  EXPLORACIÓN PERU, Sucursal del Perú

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Evandro Correa Nacul

  
	
   

  	
   

  	
  Name:  Evandro Correa Nacul

  
	
   

  	
   

  	
  Position:  Representante

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BUYER

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eduardo Guevara

  
	
   

  	
   

  	
  Name:  Eduardo Guevara

  
	
   

  	
   

  	
  Position:  Representante

  

 

CERTIFICO:  Que la firma que
antecede corresponde a Don (a): Eduardo Alfredo Guevara Dodds con DNI 07871820
firma que legalizo, sin responsabilidad sobre el contenido del documento.

 

	
   

  	
  Lima,
  13 OCT. 2009

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ David Sanchez-Manrique Tavella

  
	
   

  	
  DAVID SANCHEZ-MANRIQUE TAVELLA

  
	
   

  	
  NOTARIO DE LIMA

  

 

 

 

 

ANNEX A

 

GAS QUALITY

 

The
technical characteristics of the Gas to be delivered are detailed hereinbelow,
in a description that is merely a reference, because such characteristics may
change with the development and evolution of the reservoir:

 

The
qualitative specifications of the Gas subject matter of this process shall be
those established in the Seventh Complementary Resolution of the Rules for
the Service of Transport of Natural Gas by Pipelines, approved by Supreme
Decree No. 018-2004-EM including any further modification derived from the
installation of a ethane extraction project, and they are the following
(without prejudice to the compliance, as the case may be, with the other
characteristics set forth in article 44 of the Regulations of the Natural Gas
Distribution by means of Net of Pipelines, approved by Supreme Decree N°
042-99-EM):

 

1.             Pollutants
in Gas

 

The
Gas provided shall not exceed the following pollutant limits:

 

	
  Total sulphur

  	
  :

  	
  15
  mg/m3

  
	
  H2S

  	
  :

  	
  3
  mg/m3

  
	
  CO2

  	
  :

  	
  2
  % in volume

  
	
  Total
  inert content

  	
  :

  	
  4
  % in volume

  
	
  Free
  water

  	
  :

  	
  0

  
	
  Water
  vapor

  	
  :

  	
  65
  mg/m3

  
	
  Hydrocarbons
  dew point

  	
  :

  	
  -4°C
  to 5500 kPa

  

 

Gas
must be free of sand, dust, rubber, oils, glycols and other kind of
impurities.

 

The
Gas maximum temperature shall be of 50°C.

 

2.             Gas
Calorific Power

 

The
gross calorific power of the Gas provided shall be between 8,800 and 10,300
kcal/m3 (36.84 and 43.12  MJ/m3).

 

 

ANNEX B

 

GAS PRICE

 

1.             BASE
FLOOR PRICE

 

1.00
One U.S. Dollar per million of BTU (US$/MMBTU)

 

2.             FACTORS
TO DETERMINE THE PRICE

 

They
shall be defined according to the Daily Contractual Quantity - DCQ and the percentage
“take or pay” specified for each year.

 

2.1          FACTOR “A” ACCORDING TO THE DCQ 

 

	
  DCQ – Mcmd

  	
   

  	
  FACTOR “A”

  
	
  30.0

  	
   

  	
  1.000

  
	
  55.0

  	
   

  	
  0.995

  
	
  85.0

  	
   

  	
  0.990

  
	
  115.0

  	
   

  	
  0.985

  
	
  140.0

  	
   

  	
  0.980

  
	
  285.0

  	
   

  	
  0.970

  
	
  550.0

  	
   

  	
  0.960

  

 

For
intermediate DCQ values up to 550.0 Mcmd (thousands m3 per Day), factor “A” is
obtained by linear interpolation between close values.

 

2.2          FACTOR “B” ACCORDING TO
PERCENTAGE TAKE OR PAY

 

	
  PERCENTAGE TAKE OR

  PAY

  	
   

  	
  FACTOR “B”

  
	
  100

  	
   

  	
  0.95

  
	
  90

  	
   

  	
  0.97

  
	
  80

  	
   

  	
  0.98

  
	
  70

  	
   

  	
  0.99

  
	
  60

  	
   

  	
  1.00

  

 

For
intermediate values of percentage “take or pay” factor “B” is obtained by
linear interpolation between close values.

 

 

3.             FORMULA
FOR THE ADJUSTMENT OF THE BASE FLOOR PRICE

 

The
Base Floor Price shall be annually adjusted the first Business Day of each
calendar year according to the application of the following formula (resulting
from the present text of the License Contract for the exploitation of
hydrocarbons in the Camisea Reservoir):

 

PPBt = PPB * FA

 

Where:

 

PPBt
= Base Floor Price at the Fiscalization Point, applicable to the new period.
PPB = Base Floor Price defined in numeral 1 of the present Annex (1.00 US$/MMBTU)

 

FA
= Adjustment Factor determined as a result of:

 

FA = (0.60 * Ind1j /Ind 10+
0.40 * Ind2j/Ind2o)

 

Ind
l= Arithmetic Average of the Oil Field and Gas Field Machinery Index,
(WPS1191), published by the Department of Labor - USA, corresponding to the
period (j) or (0).

 

Ind2=
Arithmetic Average of the Fuels and related products and power Index, (WPU05)
published by the Department of Labor - USA, corresponding to the period (j) or
(0).

 

(j) =
Period of 12 months published before the adjustment period. 

(o) =
Period between December 1999 and November 2000.

 

Period of determination of Adjustment Factor (FA):

 

The
Adjustment Factor (FA) shall be determined for each calendar year on the first
Business Day of each calendar year with the last 12 published indexes, which
for the purpose of these calculation shall be considered final.

 

If
the Adjustment Factor for any year results in FA < 1, then it shall be
considered that FA = 1.

 

4.             FLOOR
PRICE

 

Floor Price = PPBt x Factor “A” x Factor “B”

 

5.             WELLHEAD
FINAL PRICE

 

Wellhead
Final Price (US$/MMBTU) = Wellhead Base Price * Factor “A” * Factor “B”

 

Where:

 

 

Wellhead
Base Price in US$/MMBTU for Gas used as a feedstock for the Petrochemical Plant
or for other uses within the Petrochemical Plant, other than Gas used for the
generation of electricity that will be used exclusively within the plant, shall
be the greatest of a), b) or c):

 

a)
3,09

 

b)
3,09 + [(YUP — 350) * 0,01619]

 

c)
Floor Price (1)

 

Factor
A and Factor B: Discount factors calculated according to the established in
Points 2.1 and 2.2 of Annex B will be applied to prices a) and b) .

 

(1) In
case c) Floor Price it has been calculated according to Section 4)
applying Factor A and Factor B.

 

The
Wellhead Base Price for Gas used for the generation of electricity that will be
used exclusively within the Petrochemical Plant shall be determined in
accordance with the price set forth in the License (as amended from time to
time).

 

6.             PRICE
APPROVAL

 

The
effective application of the price referred above, freely agreed by the
Parties, shall be subject to the Government Authorizations which may be
necessary.

 

 

ANNEX C

BUYER MILESTONESQuickLinks
 -- Click here to rapidly navigate through this document

 Exhibit 10.2  

 
 

  CH2M HILL Companies, Ltd.    
    
    Supplemental Executive Retirement and Retention Plan    
    

Effective
January 1, 2009 

 

  CH2M HILL Companies, Ltd.

Supplemental Executive Retirement and Retention Plan  

 ARTICLE I

INTRODUCTION  

        1.1    Amendment and Restatement of Existing Plan.    CH2M HILL Companies, Ltd., an
Oregon corporation, hereby amends and restates the CH2M HILL Companies, Ltd. Deferred Compensation Retirement Plan in the form of this CH2M HILL Companies, Ltd. Supplemental Executive
Retirement and Retention Plan. The Plan is intended to be an unfunded plan maintained primarily for the purpose of providing deferred compensation for a select group of management or highly
compensated employees within the meaning of Title I of the Employee Retirement Income Security Act of 1974, as amended. 

        1.2    Purposes.    The purposes of the Plan are to provide those Employees who are selected
for participation in the Plan with added incentives to continue in the long-term service of the Company, to provide a financial incentive that will help the Company attract, retain and
motivate the Employees, and to recognizes the valuable services performed on its behalf by certain employees of the Company and Affiliated Companies. 

 ARTICLE II

DEFINITIONS  

        2.1   "Account" shall mean a recordkeeping account under the Plan for a Participant as set forth or established in
Section 4.1. 

        2.2   "Affiliated Companies" means any corporation or other entity that is affiliated with the Plan Sponsor through stock or
other equity ownership or otherwise which is designated by either the Committee or the Board as an entity whose Employees may be selected to participate in the Plan. The Committee may select an entity
to be designated as an Affiliated Company if the Plan Sponsor owns directly or indirectly at least 50% of the entity. The Board, in its sole discretion, may select an entity to be designated as an
Affiliated Company if the Plan Sponsor owns directly or indirectly at least 10% of the entity. 

        2.3   "Benefit" shall mean the value of the Participant's Account. 

        2.4   "Base Salary" means the annual base salary of the Employee effective on January 1 of the Plan Year, excluding
distributions from nonqualified deferred compensation plans, bonuses, other incentive pay paid to the Employee from the Company and Affiliated Companies, commissions, fringe benefits, stock options,
relocation expenses, non-monetary awards, automobile and other allowances and compensation paid during any period of disability as determined under the Company's short term or long term
disability plan. Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or nonqualified plans of any
Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income pursuant to a cafeteria plan or 401(k) plan established by any Employer; provided, however,
that all such amounts will be included in compensation only to the extent that had there been no such plan, the amount would have been payable in cash to the Employee. 

        2.5   "Beneficiary" means the person or persons or other entity or entities that have been designated by the Employee to
receive, after the Employee's death, benefits under the Plan in accordance with the terms of the Plan. The designation by the Employee must be on forms prescribed by the Company and must be filed with
the Company. If the Employee fails to designate a Beneficiary, 

2

 

or
if the designated Beneficiary fails to survive the Employee, the benefits due hereunder shall be paid to the Employee's estate. Beneficiary designations may be revoked or changed by filing a new
Beneficiary designation with the Company. 

        2.6   "Board" means the Board of Directors of the Plan Sponsor. 

        2.7   "Cause" shall mean a Participant's: 

          (i)  conviction
for commission of a felony or a crime involving moral turpitude;  

	(ii)
	willful
commission of any act of theft, fraud, embezzlement or misappropriation against the Company or its subsidiaries or affiliates; or

	(iii)
	willful
neglect or gross misconduct in the performance of the Participant's duties hereunder (other than such failure resulting from the Participant's
incapacity due to physical or mental illness). 

No
act, or failure to act, on the part of the Participant shall be deemed "willful" unless done, or omitted to be done, by the Participant without reasonable belief that his action or omission was in
the best interest of the Company. 

Notwithstanding
the foregoing, a Participant other than the Chief Executive Officer ("CEO") shall not be deemed to have been terminated for Cause unless and until the CEO reasonably determines that
the Participant is guilty of conduct constituting Cause and a written copy of such determination is delivered to the compensation committee of the Board. The Participant shall have 30 days to
submit a written appeal challenging the CEO's written determination of Cause. The CEO shall then have
another 30 days to consider the appeal and make a final determination a written copy of which shall be delivered to the compensation committee of the Board. 

Notwithstanding
any other provision in this Section 2.7, the CEO shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the CEO a copy of the
resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the members of the Board at a meeting of the Board (after reasonable notice to the CEO and an opportunity for
the CEO, together with the CEO's counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the CEO was guilty of conduct set forth above in this definition and
specifying the particulars thereof in detail. 

        2.8   "Change of Control" shall have the meaning assigned to it by Article VII. 

        2.9   "Code" means the Internal Revenue Code of 1986, as amended from time to time. 

        2.10 "Committee" means a committee established under Article VIII of the Plan. 

        2.11 "Company" means the Plan Sponsor and the Affiliated Companies. 

        2.12 "Company DCRP Contributions Account" means the Company Contributions Account as defined in and established pursuant to
Section 4.1(b) of the DCRP, prior to its amendment and restatement as this Plan. 

        2.13 "DCRP Account Value" means the Account Value as defined in and established pursuant to Section 4.1(a) of the
DCRP, prior to its amendment and restatement as this Plan. 

        2.14 "DCRP" means the CH2M HILL Companies, Ltd. Deferred Compensation Retirement Plan. 

        2.15 "Disability" means disability of the Employee pursuant to which the Employee is entitled to disability benefits from the
Company's long term disability program. 

        2.16 "Effective Date" means the effective date of the restated Plan which is  
[                        ], 2009. 

3

 

        2.17 "Employees" means those individuals who are employed by the Company or an Affiliated Company (including, without
limitation, officers and directors who are also employees of the Company) and who are part of the executive leadership team or senior executives. 

        2.18 "Employer" means the Company and/or any of its subsidiaries and any Affiliated Companies (now in existence or hereafter
formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor. 

        2.19 "Fair Market Value" means the price per share denominated in United States dollars, as determined by the Board from time
to time, on the date Fair Market Value is being determined, in accordance with Section 409A. 

        2.20 "Internal Market" means the limited internal market maintained by the Company for the purchase and sale of its Stock. 

        2.21 "Normal Retirement Age" means age 65, or such earlier age as is specified by the Board. 

        2.22 "Participant" means an Employee designated by the Committee to participate in the Plan. 

        2.23 "Plan" means the CH2M HILL Companies, Ltd. Supplemental Executive Retirement and Retention Plan. 

        2.24 "Plan Sponsor" means CH2M HILL Companies, Ltd. 

        2.25 "Plan Year" means the 12 consecutive month period ending each December 31. 

        2.26 "Section" means a reference to a section of the Plan, unless another reference specifically applies. 

        2.27 "Section 409A" means Section 409A of the Internal Revenue Code of 1986, as amended. 

        2.28 "SERRP Base Salary Contributions Account" means a recordkeeping account under the Plan for a Participant established
pursuant to Section 4.1(a) of the Plan. 

        2.29 SERRP Short-Term Incentive Contributions Account" means a recordkeeping account under the Plan for a
Participant established pursuant to Section 4.1(b) of the Plan. 

        2.30 "Short Term Incentive" means a Participant's incentive compensation awarded pursuant to the CH2M HILL
Companies, Ltd. Short Term Incentive Plan. 

        2.31 "Stock" means the common stock of the Plan Sponsor and any stock issued or issuable subsequent to the Effective Date in
substitution for the common stock. 

        2.32 "Supplemental SERRP Contributions Account" means a recordkeeping account under the Plan for a Participant established
pursuant to Section 4.1(c) of the Plan. 

        2.33 "Trade Date" means each date as determined by the Board on which Stock may be bought or sold in the Internal Market. 

 ARTICLE III

PARTICIPATION  

        The Committee, in its sole discretion, shall designate the Employees who may participate in the Plan for a Plan Year from among the
Employees of the Company. The Employees who are eligible for designation for participation shall be those Employees who are members of a select group of management or highly compensated employees. 

4

 
 ARTICLE IV

CONTRIBUTIONS AND ALLOCATIONS TO ACCOUNTS  

        4.1    Accounts.    Each Participant's Account shall consist of the
value of the sum of (1) the Participant's DCRP Account Value determined as of December 31, 2008, (2) the balance of the Participant's Company DCRP Contributions Account determined
as of December 31, 2008, (3) the Participant's SERRP Contributions Account, (4) the Participant's SERRP Short-Term Incentive Contributions Account, (5) the
Participant's Supplemental SERRP Contributions Account and (6) any additional Company contribution accounts that the Company may, in its sole discretion, create for any purpose. 

	(a)
	SERRP Base Salary Contributions Account. The Company may make a contribution to a SERRP Contributions
Account on behalf of a Participant for a specified amount of the Participant's Base Salary as set forth in a separate participation notice provided by the Company to the Participant.

	(b)
	SERRP Short-Term Incentive Contributions Account. The Company may make a contribution to a SERRP
Short-Term Incentive Contributions Account on behalf of a Participant in an amount of the Participant's Short-Term Incentive set forth in a separate participation notice
provided by the Company to the Participant.

	(c)
	Supplemental SERRP Contributions Account. The Company may make contributions to a Supplemental SERRP
Contributions Account on behalf of a Participant for those Participants who have attained age 55 at the time of initial Plan eligibility, such amounts to be set forth in a separate participation
agreement entered into between the Company and the Participant. 

        4.2    Crediting of Earnings, Gain or Loss on Participant Accounts.    The Participant's
Account shall be credited with earnings, gain or loss in accordance with the provisions of this Section. 

         Trust Investments May Be Different Than Participant Accounts.    The selection of investment vehicles shall be taken into account solely
for the purpose
of crediting earnings, gain or loss on the Participant's Account. Regardless of whether the trustee invests the Trust in Stock, a Participant's hypothetical investment in Stock shall be treated as
held directly by the Participant solely for the purpose of determining whether the Participant has exceeded the employee ownership limitations established by the Company and the Board. 

         Deemed Investments.    The Company shall select the investment vehicles that are available for investment under the Plan. For the purpose
of crediting
earnings, gain or loss on Company contributions, Company contributions shall be deemed to be credited as of December 31 of the Plan Year. Earnings, gain or loss shall continue to be credited
until the balance in the Participant's Account is eliminated. 

        SERRP Short-Term Incentive Contributions Account Deemed Invested in Stock.    For the proportion of SERRP Short-Term Incentive
Contributions Account deemed invested in Stock, the Committee shall accumulate the amount of such Company contributions until the next Trade Date. From the December 31 of the Plan Year until
the next Trade Date, the Committee shall accumulate earnings on the Company contributions by using the rate of return on a money market fund selected by the Committee from time to time in its
discretion. As of the next Trade Date, the Committee shall, for bookkeeping purposes only, convert that portion of the Company contributions plus accumulated earnings to a number of whole and
fractional shares of Stock (calculated to 3 decimal points) by dividing the dollar value of that portion of the Participant's accumulated amounts by the Fair Market Value of the Stock as of the Trade
Date next following the December 31 of the Plan Year. The accounting records for the portion of the Participant's SERRP Short-Term Incentive Contributions Account invested in Stock
shall be maintained in shares rather than dollar values. 

5

 

        Crediting of Earnings Based on Selected Investment Vehicles.    Following the end of day the New York Stock Exchange is open for business,
the
Participant's Account shall be credited with earnings, gain or loss equal to the rate of return earned on investment vehicles with respect to any portion of the Participant's Account not invested in
Stock. 

         Crediting of Earnings, Gain or Loss Based on a Stock Investment.    Stock allocated to a Participant's
Account shall be valued at Fair Market Value. No dividends or other distributions which would be paid with respect to Stock allocated to a Participant's Account shall be credited to the Participant's
Account. 

        If
there is any increase or decrease in the number of outstanding shares of Stock or any change in the rights and privileges of shares of Stock (a) as a result of the payment of a
Stock dividend or any other distribution payable in Stock, or (b) through a stock split, subdivision, consolidation, combination, reclassification or recapitalization involving the Stock, the
Stock portion of a Participant's Account shall be adjusted accordingly. 

        If
the Plan Sponsor distributes assets or securities of persons other than the Plan Sponsor with respect to the Stock, or if the Plan Sponsor grants rights to subscribe pro rata for
additional shares of Stock or for any other securities of the Plan Sponsor to the holders of its Stock, or if there is any other change in the number or kind of outstanding shares or of any stock or
other securities into which the Stock will be changed or for which it has been exchanged, and if the Committee in its discretion determines that the
event equitably requires an adjustment to any Participant's Account, then such adjustments shall be made, or other action shall be taken, by the Committee as the Committee in its discretion deems
appropriate. 

         Changes in Investment Vehicle Selection.    If the Committee, in its discretion, authorizes Participants to select the investment
vehicle(s) in which
their Account is deemed invested, the Committee shall establish rules and procedures for the timing and frequency of investment vehicle selection. 

        4.3    Withholding Requirement.    The Company shall withhold any taxes owed from other
compensation payable to the Participant. All payments under the Plan are subject to withholding of all taxes, government mandated social benefit contributions, or other payments required to be
withheld which are applicable to the Participant. 

 ARTICLE V

VESTING AND INVESTMENT OF BENEFIT  

        5.1   Vesting.

        (a)    DCRP Account Value and Company DCRP Contributions Account.    A Participant shall be 100% vested in the
Participant's DCRP Account Value and the Participant's Company DCRP Contributions Account. 

        (b)    SERRP Base Salary Contributions Account and SERRP Short-Term Incentive Contributions Account.    A
Participant shall vest 20% at the end of each Plan Year for five Plan Years in each annual contribution made by the Company into the SERRP Base Salary Contributions Account and the SERRP
Short-Term Incentive Contributions Account including the Plan Year for which the contribution is made. Notwithstanding the foregoing, a Participant shall be 100% vested upon the earlier of
(i) attainment of age 60 and 10 years of service at the Board's discretion, (ii) upon attainment of Normal Retirement Age; (iii) death and (iv) termination of
employment due to Disability. 

        (c)    Supplemental SERRP Contributions Account.    A Participant shall be 100% vested in the Participant's
Supplemental SERRP Contributions Account upon the later of (i) the fifth Plan Year anniversary of the contribution made by the Company; (ii) upon attainment of Normal Retirement Age;
(iii) death and (iv) termination of employment due to Disability. No incremental vesting shall occur before such aforementioned event. 

6

 

        (d)    Additional Accounts.    The Company shall establish vesting periods for any additional accounts it creates
pursuant to Section 4.1. 

        5.2    Subject to Claims of General Creditors.    A Participant's
Benefit under the Plan shall be subject to the claims of general creditors of the Company and Affiliated Companies. 

        5.3    Insurance.    The Company and Affiliated Companies, on their
own behalf, and, in their sole discretion, may apply for and procure insurance on the life of any Participant, in such amounts and in such forms as the Plan Sponsor may choose. The Plan Sponsor shall
be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Plan Sponsor, the Participant shall
submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Plan Sponsor has applied for insurance. 

 ARTICLE VI

PAYMENT OF BENEFIT  

        6.1    Irrevocable Elections.    Payment of the Participant's Benefit shall be governed by the
election made by the Participant on a form provided by the Committee which specifies the manner in which the Participant's Benefit will be distributed. The Participant may elect any of the forms of
payment permitted and the timing of payment from the methods permitted, except that if the Participant's Benefit is less than $10,000 on the date benefits will commence, the Participant shall receive
a lump sum payment of his Benefit. 

        The
Participant's election with respect to the form of payment and with respect to the timing of payment shall be made within 30 days of the Employee first becoming eligible to
participate in the Plan. 

        For
amounts accrued as a Participant's Benefit on or after January 1, 2005, the Participant may submit a subsequent election with respect to the form of payment; however, such
subsequent election shall be effective only if: (a) the election is submitted at least 13 months prior to the earlier of the Participant's date of termination of employment or the date
elected by the Participant with respect to distribution timing, (b) it is approved by the Committee, in its sole discretion and (c) the first payment pursuant to the subsequent election
is no earlier than 5 years from the date the payment would otherwise be paid. The Participant's election under this Section 6.1 will apply to the Participant's entire Benefit. 

        The
Participant's elections made under the DCRP prior to the effective date of this Plan shall remain effective for the Participant's DCRP Account Value and the Participant's DCRP
Contributions Account, including any elections made pursuant to Section 6.9 of the DCRP, unless further modified pursuant to this Section 6.1. 

        6.2    Timing of Payment Permitted.    Subject to Section 6.1,
each Participant may elect the time when distributions of the Participant's Benefit will commence from among the following options: (a) the first of the month following the date the Participant
terminates full-time employment following attainment of the Normal Retirement Age, (b) the date specified by the Participant following the date the Participant terminates
full-time employment and attains the Normal Retirement Age, and (c) any additional times permitted by the Committee, in its sole discretion, from time to time. 

        6.3    Forms of Payment Permitted.    Subject to Section 6.1,
each Participant may elect one or more of the following the forms of payment: (a) single sum payment in cash, (b) annual installment payments in cash over 5, 10, or 15 years, and
(c) any additional forms permitted by the Committee, in its sole discretion, from time to time. Each annual installment shall be determined by dividing the Participant's Benefit by the number
of remaining installments. Each annual installment shall be determined by 

7

 

dividing
the Benefit by the number of remaining installments. Notwithstanding any other provision of this Section 6.3, the Committee, in its sole discretion, may provide for a single sum
payment in cash regardless of any Participant election upon the Participant's death or Disability. 

        6.4    Designation of Beneficiary.    Each Participant may designate
one or more Beneficiaries (who may be designated contingently or successively) to whom the Participant's Benefit is payable in the event of the Participant's death. Each designation will automatically
revoke any prior designations by the same Participant. The beneficiary designation shall be in writing on a form prescribed by the Committee. Any beneficiary designation will be effective as of the
date on which the written designation is received by the Committee during the lifetime of the Participant. 

        6.5    Death or Disability Prior to Commencement.    If the
Participant dies or suffers a Disability prior to commencement of distribution of the Participant's Benefit, the Participant's Benefit shall be distributed in a lump sum to the Participant or
Participant's Beneficiary. 

        6.6    Death After Commencement.    If the Participant dies after
commencement of distribution of benefits, but prior to the complete distribution of all benefits to which the Participant is entitled under the Plan, payment of the remaining balance of the
Participant's Benefit shall be distributed in a lump sum to the Participant's Beneficiary. 

        6.7    Termination of Employment after Change of
Control.    Notwithstanding anything to the contrary in this Plan, if a Participant's employment is terminated (other than by death,
Disability or retirement) within two years after a Change of Control, the Participant's entire Benefit shall be 100% vested and payment of the Participant's entire Benefit shall be made to the
Participant in a lump sum regardless of the Participant's election as soon as practical after termination of employment. 

        6.8    Termination of Employment Prior to Change of
Control.    Notwithstanding anything to the contrary in this Plan, if a Participant's employment is terminated (including a termination of
employment by the Participant pursuant to a Constructive Termination) prior to a Change of Control, and the Participant reasonably demonstrates that such termination was at the request or suggestion
of a third party who has indicated an intention or taken steps reasonably calculated to effect a Change of Control and a Change of Control involving such third party occurs, the Participant's entire
Benefit shall be 100% vested and payment of the Participant's entire Benefit shall be made to the Participant in a lump sum regardless of the Participant's election as soon as practical after the
Change of Control. No lump sum
payment will be made pursuant to this Section 6.8 unless a Change of Control actually occurs following termination of employment. 

        6.9    Termination of Employment for Cause.    Notwithstanding
anything to the contrary in this Plan, if a Participant's employment is terminated for Cause at any time, the Participant's entire Benefit will be forfeited upon termination. 

        6.10    Forfeiture.    If the Participant should take actions in
violation or breach of or in conflict with any non-competition agreement, any agreement prohibiting solicitation of employees or clients of the Company thereof or any confidentiality
obligation with respect to the Company thereof, or, during the period the Participant is employed by the Company and for a period of one (1) year after termination of employment, the
Participant, directly or indirectly, for the Participant or on behalf of or in conjunction with any other person or entity, without the prior written consent of the Board, work for, become employed
by, or provide services to (whether as an employee, consultant, independent contractor, officer, director, or board member) any company that is a "Top 25" company on any Engineering National Record
Top List that ranks the Company in the "Top 10", the Company has the right to cause an immediate forfeiture of the Participant's rights in the Account awarded under the Plan. In addition, if any
portion of the Participant's Account was distributed from the Plan within the 12 month period prior to the Participant's actions, the Participant will make a cash payment to the Company equal
to such amount. 

8

 
 ARTICLE VII

CHANGE OF CONTROL  

        7.1    Change of Control.    For purposes of the Plan, a Change of
Control within the meaning of Section 409A will occur if any one of the following events occurs:  

	(a)
	Unapproved Acquisition of 25% Stake. Any Person is or becomes a Beneficial Owner, directly or indirectly, of
25% or more of the Voting Securities of the Plan Sponsor; provided, however, that the event described in this Section 7.1(a) shall not be deemed to be a Change of Control by virtue of any of
the following:

	(i)
	an
acquisition entered into by the Plan Sponsor,

	(ii)
	a
sale of Voting Securities entered into by the Plan Sponsor,

	(iii)
	an
acquisition of Voting Securities by any employee benefit plan sponsored or maintained by the Plan Sponsor or any of its Affiliated Companies,

	(iv)
	an
acquisition of Voting Securities by any underwriter temporarily holding securities pursuant to an offering of such securities, or

	(v)
	pursuant
to a Non-COC Transaction.

	(b)
	Change in the Majority of the Board. During the course of one Plan Sponsor fiscal year, Incumbent Directors
cease for any reason to constitute at least a majority of the Board.

	(c)
	Significant Merger or Consolidation. The consummation of a Business Combination,  unless the Business
Combination is a Non-COC Transaction.

	(d)
	Liquidation. The stockholders of the Plan Sponsor approve a plan of liquidation or dissolution of the Plan
Sponsor or the direct or indirect sale or other disposition of all or substantially all of the assets of the Plan Sponsor and its Affiliated Entities. 

        7.2    Definitions.    The following definitions shall apply for
purposes of this Article:  

	(a)
	"Beneficial Owner" shall mean a beneficial owner as defined in Rule 13(d)(3) under the Securities
Exchange Act of 1934.

	(b)
	"Business Combination" shall mean a merger, consolidation, share exchange or similar form of corporate
reorganization of the Plan Sponsor or any such type of transaction involving the Plan Sponsor or any of its Affiliated Entities that requires the approval of the Plan Sponsor's stockholders.

	(c)
	"Constructive Termination" means, without the Participant's express written consent, the occurrence of any
of the following:

	(i)
	Change in Responsibilities. (1) The assignment to the Participant of any duties or responsibilities
inconsistent in any material adverse respect with the Participant's position(s), duties, responsibilities or status immediately prior to such Change of Control (including any diminution of such duties
or responsibilities); or (2) A material adverse change in the Participant's reporting responsibilities, titles or offices with the Plan Sponsor or successor as in effect immediately prior to
such Change of Control.

	(ii)
	Change in Compensation. Any material reduction by the Plan Sponsor or successor in the Participant's total
compensation package, including any material adverse change in the annual salary, the incentive bonus ranges and targets, or the timing of payment of same as compared to the compensation package in
effect immediately prior to such Change of Control. 

9

 

	(iii)
	Change in Location. Any requirement of the Plan Sponsor or successor that the Participant (1) be
based anywhere more than 25 miles from the facility where the Participant is located at the time of the Change of Control; or (2) travel on the Plan Sponsor's or successor's business to an
extent substantially greater than the travel obligations of the Participant immediately prior to such Change of Control.

	(iv)
	Change in Benefits. (1) The failure of the Plan Sponsor or successor to continue in effect any
employee benefit and fringe benefit plans and policies or deferred compensation plans in which the Participant is participating immediately prior to such Change of Control,  unless the Participant is
permitted to participate in other plans providing the Participant with substantially comparable benefits; or (2) the
taking of any action by the Plan Sponsor or successor which would adversely affect the Participant's prior participation in or reduce the Participant's accrued benefits under any employee benefit and
fringe plans or deferred compensation plans in which the Participant is participating immediately prior to a Change of Control; or (3) the failure of the Plan Sponsor or successor to provide
the Participant and the Participant's dependents welfare benefits that are substantially comparable to the benefits available to them immediately prior to such Change of Control at a substantially
comparable cost to Participant; or (4) the failure of the Plan Sponsor or successor to provide the Participant with paid vacation at levels in effect for the Participant immediately prior to
such Change of Control or as the same may be increased from time to time thereafter.

	(v)
	Reimbursement of Expenses. The failure of the Plan Sponsor or successor to promptly reimburse the
Participant for all reasonable expenses incurred by the Participant in accordance with the most favorable policies, practices and procedures of the Plan Sponsor or successor in effect for the
Participant at any time during the 120-day period immediately preceding the Change of Control or, if more favorable to the Participant, as in effect generally at any time thereafter with
respect to other peer executives of the Plan Sponsor or successor.

	(vi)
	Office and Support Staff. The failure by the Plan Sponsor or successor to provide the Participant with an
office or offices of substantially similar size, furnishings and other appointments, personal secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the
Participant by the Plan Sponsor at any time during the 120-day period immediately preceding the Change of Control or, if more favorable to the Participant, as provided generally at any
time thereafter with respect to other peer executives of the Plan Sponsor or successor.

	(vii)
	Assumption of this Agreement. The failure of the Plan Sponsor to assign and obtain the assumption of the
Participant's Change of Control Agreement from any successor. 

         Inadvertent Action.    An action taken in good faith and which is remedied by the Plan Sponsor or successor within 15 calendar days after
receipt of
notice thereof given by the Participant shall not constitute Constructive Termination. The Participant must provide notice of termination of employment within 30 calendar days of the Participant's
knowledge of an event constituting Constructive Termination or such event shall not constitute Constructive Termination.  

	(d)
	"Incumbent Directors" shall mean:

	(i)
	individuals
who on March 31, 2000 constitute the Board; and 

10

 

 

	(ii)
	any
person who becomes a director subsequent to March 31, 2000, provided his/her election or nomination for election was recommended by the
Nominating Committee of the Board (or its successor in responsibilities) or approved by at least a majority of the Incumbent Directors who remain on the Board (either by a specific vote or by approval
of the Plan Sponsor or successor's proxy statement in which such person is named as a nominee for a director, without objection to such nomination); provided that individuals initially elected or
nominated as directors of the Plan Sponsor or successor as a result of an actual or threatened election contest with respect to directors or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall not be deemed to be Incumbent Directors.

	(e)
	"Non-COC Transaction" shall include any Business Combination in
which:

	(i)
	at
least 75% of the total voting power eligible to elect directors of the entity resulting from such Business Combination is represented by shares that were
Voting Securities immediately prior to such Business Combination (either by remaining outstanding or being converted),

	(ii)
	no
Person, other than any employee benefit plan sponsored or maintained by the Plan Sponsor, becomes the "beneficial owner", directly or indirectly, of 25%
or more of the total voting power of the outstanding voting securities eligible to elect directors of the entity resulting from such Business Combination,

	(iii)
	at
least a majority of the members of the board of directors of the entity resulting from such Business Combination were Incumbent Directors at the time
of the Board's approval of the execution of the initial agreement providing for such Business Combination.

	(f)
	"Person" shall mean Person as defined in Section 3(a)(9) and as used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934.

	(g)
	"Voting Securities" shall mean either (a) the then-outstanding shares of Stock of the
Plan Sponsor or (b) the combined voting power of the Plan Sponsor's then-outstanding securities eligible to vote for the election of the Board. 

 ARTICLE VIII

PLAN ADMINISTRATION  

        8.1    Committee.    The Plan shall be administered by the
Compensation and Work Force Committee appointed by and serving at the pleasure of the Board. The Committee shall at all times consist of at least two Directors and shall include other members (which
may be either Directors or non-Directors) as the Board may determine. The Board may from time to time remove members from or add members to the Committee, and vacancies on the Committee
shall be filled by the Board. Members of the Committee may resign at any time upon written notice to the Board. 

        8.2    Committee Meetings and Actions.    The Committee shall hold meetings at such times and
places as it may determine. A majority of the members of the Committee shall constitute a quorum, and the acts of the majority of the members present at a meeting or a consent in writing signed by all
members of the Committee shall be the acts of the Committee and shall be final, binding and conclusive upon all persons, including the Company, its shareholders, and all persons having any interest in
Participants' Accounts. 

        8.3    Powers of Committee.    The Committee shall, in its sole discretion, select the
Participants from among the Employees and establish such other terms under the Plan as the Committee may deem necessary or desirable and consistent with the terms of the Plan. The Committee shall
determine the form or forms of the agreements with Participants that shall evidence the particular provisions, terms, 

11

 

conditions,
rights and duties of the Plan Sponsor and the Participants. The Committee may from time to time adopt such rules and regulations for carrying out the purposes of the Plan as it may deem
proper and in the best interests of the Company. The Committee may from time to time delegate its responsibilities as it determines is necessary, in its sole discretion. The Committee may correct any
defect, supply any omission, reconcile any inconsistency in the Plan or in any agreement entered into under the Plan, and reconcile any inconsistency between the Plan and any Agreement in the manner
and to the extent it shall deem expedient, and the Committee shall be the sole and final judge of such expediency. No member of the Committee shall be liable for any action or determination made in
good faith. The determinations, interpretations and other actions of the Committee pursuant to the provisions of the Plan shall be binding and conclusive for all purposes and on all persons. 

        8.4    Interpretation of Plan.    The determination of the Committee as to any disputed
question arising under the Plan, including questions of construction and interpretation, shall be final, binding and conclusive upon all persons, including the Company, its shareholders, and all
persons having any interest in Participants' Accounts. 

        8.5    Indemnification.    Each person who is or shall have been a
member of the Committee or of the Board shall be indemnified and held harmless by the Plan Sponsor against and from any loss, cost, liability or expense that may be imposed upon or reasonably incurred
in connection with or resulting from any claim, action, suit or proceeding to which such person may be a party or in which such person may be involved by reason of any action taken or failure to act
under the Plan and against and from any and all amounts paid in settlement thereof, with the Company's approval, or paid in satisfaction of a judgment in any such action, suit or proceeding against
him, provided such person shall give the Company an opportunity, at its own expense, to handle and defend the same before undertaking to handle and defend it on such person's own behalf. The foregoing
right of indemnification shall not be exclusive of, and is in addition to, any other rights of indemnification to which any person may be entitled under the Plan Sponsor's Articles of Incorporation or
Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 

 ARTICLE IX

CLAIMS PROCEDURE  

        9.1    Determination of Benefits.    The Company shall distribute benefit statements
reflecting the current amount of the Participant's Benefit to the Participants on an annual basis. 

        9.2    Denial of Claims.    The Committee shall make all determinations as to the right of any
person to a benefit or the amount of such benefit under this Plan. The Committee shall provide adequate notice in writing to any claimant whose claim for benefits under the Plan has been denied. The
Committee's claim denial notice shall set forth:  

	(a)
	the
specific reason or reasons for the denial;

	(b)
	specific
references to pertinent Plan provisions on which the denial is based;

	(c)
	a
description of any additional material and information needed for the claimant to perfect the claim and an explanation of why the material or information
is needed; and

	(d)
	an
explanation of the Plan's claims review procedure describing the steps to be taken by a Participant or Beneficiary who wishes to submit his or her claim
for review, including any applicable time limits, and a statement of the Participant's or Beneficiary's right to bring a civil action under ERISA § 502(a) if the claim is denied on
review. 

        A
Participant or Beneficiary who wishes to appeal the adverse determination must request a review in writing to the Committee within 60 days after the appealing Participant or
Beneficiary received the denial of benefits. 

12

 

        9.3    Appeal Procedure.    A Participant or Beneficiary may appeal a
denial of benefits. Appeals must be made in writing to the Committee within 60 days after the claimant receives the notice of denial. A Participant or Beneficiary appealing a denial of benefits
(or the authorized representative of the Participant or Beneficiary) shall be entitled to:  

	(a)
	submit
in writing any comments, documents, records and other information relating to the claim and request a review;

	(b)
	review
pertinent Plan documents; and

	(c)
	upon
request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim. A document,
record, or other information shall be considered relevant to the claim if such document, record, or other information (i) was relied upon in making the benefit determination, (ii) was
submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit
determination, or (iii) demonstrates compliance with the administrative processes and safeguards designed to ensure and verify that benefit claim determinations are made in accordance with the
Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated Participants or Beneficiaries. 

The
Committee shall reexamine all facts related to the appeal and make a final determination as to whether the denial of benefits is justified under the circumstances. 

        9.4    Decision on Review.    The decision on review of a denied claim
shall be made in the following manner:  

	(a)
	The
decision on review shall be made by the Committee, who may in its discretion hold a hearing on the denied claim. The Committee shall make its decision
solely on the basis of the written record, including documents and written materials submitted by the Participant or Beneficiary (or the authorized representative of the Participant or Beneficiary).
The Administrator shall make its decision promptly, which shall ordinarily be not later than 60 days after the Plan's receipt of the request for review, unless special circumstances (such as
the need to hold a hearing) require an extension of time for processing. In that case a decision shall be rendered as soon as possible, but not later than 120 days after receipt of the request
for review. If an extension of time is required due to special circumstances, the Committee will provide written notice of the extension to the Participant or Beneficiary prior to the time the
extension commences, stating the special circumstances requiring the extension and the date by which a final decision is expected.

	(b)
	The
decision on review shall be in writing, written in a manner calculated to be understood by the Participant or Beneficiary. If the claim is denied, the
written notice shall include specific reasons for the decision, specific references to the pertinent Plan provisions on which the decision is based, a statement of the Participant's or Beneficiary's
right to bring an action under ERISA § 502(a), and a statement that the Participant or Beneficiary is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to the claimant's claim for benefits. A document, record, or other information shall be considered relevant to the claim if such
document, record, or other information (i) was relied upon in making the benefit determination, (ii) was submitted, considered, or generated in the course of making the benefit
determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination, or (iii) demonstrates compliance with the
administrative processes and safeguards designed to ensure and verify that benefit claim determinations are 

13

 

made
in accordance with the Plan and that, where appropriate, the Plan provisions have been applied consistently with respect to similarly situated claimants. 

The
Committee's decision on review shall be final. In the event the decision on review is not provided to the Participant or Beneficiary within the time required, the claim shall be deemed denied on
review. 

 ARTICLE X

AMENDMENT, MODIFICATION AND TERMINATION  

        The Plan Sponsor reserves the right to amend or terminate this Plan at any time by action of the Board, directly or through delegation
by the Board to one of its committees. The Company may terminate further deferrals under the Plan for any reason with respect to deferrals for Plan Years beginning after the date of the Company's
termination of the Plan. In the event of such cessation of deferrals, all other rights and obligations shall continue until all Participants' Benefits have been paid to all Participants under the
terms of the Plan. At any time following a Change of Control, the Company may terminate the Plan. If the Company terminates the Plan following a Change in Control within the meaning of
Section 409A, each Participant's Account shall become immediately due and payable. 

 ARTICLE XI

MISCELLANEOUS  

        11.1    Gender and Number.    Except when otherwise indicated by the context, the masculine
gender shall also include the feminine gender, and the definition of any term herein in the singular shall also include the plural. 

        11.2    No Right to Continued Employment.    Nothing contained in the Plan or in any Award
granted under the Plan shall confer upon any Participant any right with respect to the continuation of the Participant's employment by, or consulting relationship with, the Company, or interfere in
any way with the right of the Company, subject to the terms of any separate employment agreement or other contract to the contrary, at any time to terminate such services or to increase or decrease
the compensation of the Participant. Nothing in this Plan shall limit or impair the Company's right to terminate the employment of any employee. Whether an authorized leave of absence, or absence in
military or government service, shall constitute a termination of service shall be determined by the Committee in its sole discretion. Participation in this Plan is a matter entirely separate from any
pension right or entitlement the Participant may have and from the terms or conditions of the Participant's employment. Participation in this Plan shall not affect in any way a Participant's pension
rights or entitlements or terms or conditions of employment. Any Participant who leaves the employment of the Company shall not be entitled to any compensation for any loss of any right or any benefit
or prospective right or benefit under this Plan which the Participant might otherwise have enjoyed whether such compensation is claimed by way of damages for wrongful dismissal or other breach of
contract or by way of compensation for loss of office or otherwise. 

        11.3    Non-Assignability.    Neither a Participant nor a
Beneficiary may voluntarily or involuntarily anticipate, assign, or alienate (either at law or in equity) any benefit under the Plan, and the Committee shall not recognize any such anticipation,
assignment, or alienation. Furthermore, a benefit under the Plan shall not be subject to attachment, garnishment, levy, execution, or other legal or equitable process. Any attempted sale, conveyance,
transfer, assignment, pledge or encumbrance of the rights, interests or benefits provided pursuant to the terms of the Plan or the levy of any attachment or similar process thereupon, shall by null
and void and without effect. 

        11.4    Participation in Other Plans.    Nothing in this Plan shall
affect any right which the Participant may otherwise have to participate in any retirement plan or agreement which the Company or an Affiliated Company has adopted or may adopt hereafter. 

14

 

        11.5    Governing Law.    To the extent not preempted by federal law,
this Plan shall be construed in accordance with, and shall be governed by, the laws of the State of Colorado. 

        11.6    Entire Understanding.    This instrument contains the entire
understanding between the Company and the Employees participating in the Plan relating to the Plan, and supersedes any prior agreement between the parties, whether written or oral. Neither this Plan
nor any provision of the Plan may be waived, modified, amended, changed, discharged or terminated without action by the Board. 

        11.7    Provisions Severable.    To the extent that any one or more of
the provisions of the Plan shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or
impaired. 

        11.8    Headings.    The article and section headings are for
convenience only and shall not be used in interpreting or construing the Plan. 

        11.9    Successors, Mergers, or Consolidations.    Any Agreement under
the Plan shall inure to the benefit of and be binding upon (a) the Company and its successors and assigns and upon any corporation into which the Company may be merged or consolidated, and
(b) the Participant, and his heirs, executors, administrators and legal representatives. 

        11.10    Section 409A.    Anything in this Plan to the contrary
notwithstanding, no payment to the Participant under this Plan shall be payable prior to the date that is the earliest of (1) 6 months and 1 day after the Participant's
termination date, (2) the Participant's death or (3) such other date as will cause such payment not to be subject to interest and additional tax under Section 409A (with a
catch-up payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment). 

        For
purposes of the Plan, a termination of employment shall be considered to occur only upon a "separation from service" within the meaning of Section 409A and the regulations
issue pursuant to Section 409A. 

        It
is the intention of the Company and the Participant that payments or benefits payable under this Plan not be subject to the additional tax imposed pursuant to Section 409A. To
the extent such potential payments or benefits could become subject to such Section, the Company and Participant shall cooperate to structure the payments with the goal of giving the Participant the
economic benefits described herein in a manner that does not result in such tax being imposed. 

        The
Plan Sponsor hereby agrees to the provisions of the Plan and in witness of its agreement, the Plan Sponsor by its duly authorized officer has executed the Plan on the date written
below. 

 

 

					
	

 	
 	
 CH2M HILL COMPANIES, LTD.

Plan Sponsor
	

 	
 	
 By:	
 	
/s/ ROBERT C. ALLEN

 
	

 	
 	
Title	
 	
Vice President Human Resources

 
	

 	
 	
Date	
 	
August 7, 2009

 

 

 15

QuickLinks

CH2M HILL Companies, Ltd. Supplemental Executive Retirement and Retention Plan

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