Document:

EX-4.1

 Exhibit 4.1 

BANK OF THE CAROLINAS CORPORATION 

AND 
 BROADRIDGE
CORPORATE ISSUER SOLUTIONS, INC. 
 TAX BENEFITS PRESERVATION PLAN 

DATED AS OF JULY 11, 2014 

 TABLE OF CONTENTS 

 

							
	 TAX BENEFITS PRESERVATION PLAN
	  	 	2	  
	 SECTION 1.
	  	 CERTAIN DEFINITIONS
	  	 	2	  
	 SECTION 2.
	  	 OTHER DEFINITIONAL AND INTERPRETATIVE PROVISIONS
	  	 	6	  
	 SECTION 3.
	  	 APPOINTMENT OF RIGHTS AGENT
	  	 	6	  
	 SECTION 4.
	  	 ISSUE OF RIGHT CERTIFICATES
	  	 	6	  
	 SECTION 5.
	  	 FORM OF RIGHT CERTIFICATES
	  	 	7	  
	 SECTION 6.
	  	 COUNTERSIGNATURE AND REGISTRATION
	  	 	8	  
	 SECTION 7.
	  	 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHT
CERTIFICATES
	  	 	8	  
	 SECTION 8.
	  	 EXERCISE OF RIGHTS
	  	 	9	  
	 SECTION 9.
	  	 CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES
	  	 	10	  
	 SECTION 10.
	  	 RESERVATION AND AVAILABILITY OF CAPITAL STOCK
	  	 	10	  
	 SECTION 11.
	  	 PREFERRED SHARES RECORD DATE
	  	 	11	  
	 SECTION 12.
	  	 ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS
	  	 	11	  
	 SECTION 13.
	  	 CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES
	  	 	15	  
	 SECTION 14.
	  	 FRACTIONAL RIGHTS AND FRACTIONAL SHARES
	  	 	15	  
	 SECTION 15.
	  	 RIGHTS OF ACTION
	  	 	15	  
	 SECTION 16.
	  	 AGREEMENT OF RIGHT HOLDERS
	  	 	16	  
	 SECTION 17.
	  	 RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
	  	 	16	  
	 SECTION 18.
	  	 CONCERNING THE RIGHTS AGENT
	  	 	17	  
	 SECTION 19.
	  	 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
	  	 	17	  
	 SECTION 20.
	  	 DUTIES OF RIGHTS AGENT
	  	 	18	  
	 SECTION 21.
	  	 CHANGE OF RIGHTS AGENT
	  	 	19	  
	 SECTION 22.
	  	 ISSUANCE OF NEW RIGHT CERTIFICATES
	  	 	19	  
	 SECTION 23.
	  	 REDEMPTION
	  	 	19	  
	 SECTION 24.
	  	 EXCHANGE
	  	 	20	  
	 SECTION 25.
	  	 NOTICE OF CERTAIN EVENTS
	  	 	21	  
	 SECTION 26.
	  	 NOTICES
	  	 	21	  
	 SECTION 27.
	  	 SUPPLEMENTS AND AMENDMENTS
	  	 	22	  
	 SECTION 28.
	  	 SUCCESSORS
	  	 	22	  
	 SECTION 29.
	  	 DETERMINATION AND ACTIONS BY THE BOARD, ETC.
	  	 	22	  
	 SECTION 30.
	  	 BENEFITS OF THIS PLAN
	  	 	22	  
	 SECTION 31.
	  	 SEVERABILITY
	  	 	22	  
	 SECTION 32.
	  	 GOVERNING LAW
	  	 	22	  
	 SECTION 33.
	  	 COUNTERPARTS
	  	 	23	  
	 SECTION 34.
	  	 DESCRIPTIVE HEADINGS
	  	 	23	  

 LIST OF EXHIBITS 
  

			
	Exhibit A	  	Articles of Amendment of Bank of the Carolinas Corporation, Junior Participating Preferred Stock, Series B
	Exhibit B	  	Form of Right Certificate
	Exhibit C	  	Form of Summary of Terms

  
 1 

 TAX BENEFITS PRESERVATION PLAN 

TAX BENEFITS PRESERVATION PLAN (this “Plan”), dated as of July 11, 2014 between Bank of the Carolinas Corporation, a
corporation organized under the laws of the State of North Carolina (the “Company”), and Broadridge Corporate Issuer Solutions, Inc. (the “Rights Agent”). 

WHEREAS, the Company and one or more of its Subsidiaries (as defined below) have generated certain Tax Benefits (as defined below) for United
States federal income tax purposes, and the Company desires to avoid an “ownership change” within the meaning of Section 382 of the Code (as defined below) and thereby preserve the Company’s ability to utilize such Tax Benefits;

 WHEREAS, the Company anticipates entry into stock purchase agreements with various institutional investors (collectively, the
“Investment Agreements”), requiring the Company to take action necessary to implement a Section 382 shareholder rights plan as soon as practicable but in any event prior to the closing date under the Investment Agreements; 

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized and declared a dividend of one preferred share purchase
right (a “Right”) in respect of each Common Share (as defined below) of the Company outstanding at the Close of Business (as defined below) on July 15, 2014 (the “Record Date”), each such Right representing the right to
purchase 1/1,000th of a Preferred Share (as defined below) upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right (subject to adjustment) in respect of each Common Share that
shall become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are defined below); and 

WHEREAS, the Company desires to appoint the Rights Agent to act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Right Certificates (as defined below), the exercise of Rights and other matters referred to herein. 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows: 

SECTION 1. CERTAIN DEFINITIONS. For purposes of this Plan, the following terms have the meanings indicated: 

(a) “Acquiring Person” shall mean any Threshold Holder except:

 

	 	(i)	the U.S. Government; 

  

	 	(ii)	any Exempt Person; 

  

	 	(iii)	any Grandfathered Person, unless such Grandfathered Person’s percentage Beneficial Ownership increases on or after the Record Date, other than any increase pursuant to or as a result of (A) a stock dividend,
stock split, reverse stock split or similar transaction effected by the Company, (B) any anti-dilution or similar adjustment in accordance with the terms of any Company Securities or (C) any redemption or repurchase of Company Securities
by the Company; 

  

	 	(iv)	any Person who or which the Board determines, in its sole discretion, has inadvertently become a Threshold Holder, so long as such Person (or its Affiliate) promptly enters into, and delivers to the Company, an
irrevocable commitment promptly to divest and thereafter promptly divests (without exercising or retaining any power, including voting, with respect to such securities), sufficient Company Securities so that such Person is no longer a Threshold
Holder; 

  
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	 	(v)	any Person that has become a Threshold Holder as the result of an acquisition of any class of Company Securities by the Company which, by reducing the number of shares of that class outstanding, increases the
proportionate number of Company Securities of that class Beneficially Owned by such Person so that such Person would otherwise become an Acquiring Person; provided, however, that if such Person shall thereafter become the Beneficial Owner of any
additional Company Securities of that class (other than Beneficial Ownership resulting from events of the type described in sub-clauses (A) and (B) of clause (iii) above), such Person shall be deemed to be an “Acquiring
Person” unless upon becoming the Beneficial Owner of such additional Company Securities, such Person does not Beneficially Own 4.99% or more of that class of Company Securities; and 

 

	 	(vi)	any Person that has become a Threshold Holder if the Board in good faith determines that the attainment of such status has not jeopardized or endangered the Company’s utilization of the Tax Benefits.

 (b) “Affiliate” shall have the meaning ascribed to such term in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, and to the extent not included within the foregoing, shall also include with respect to any Person, any other Person whose Company Securities would be deemed to be (i) constructively owned by such first Person, or
(ii) otherwise aggregated with shares owned by such first Person (other than any aggregation solely by reason of such shares being part of the same “public group” as defined under Treasury Regulation Section 1.382-2T(f)(13)), in
each case pursuant to the provisions of Section 382 of the Code, or any successor or replacement provision, and the Treasury Regulations thereunder. 

(c) “Bank” shall mean Bank of the Carolinas. 

(d) “Bank Regulatory Authority” shall mean the North Carolina Office of the Commissioner of Banks, the Federal Deposit Insurance
Corporation, the Federal Reserve Bank of Richmond, and the Board of Governors of the Federal Reserve System. 
 (e) A Person shall be deemed
the “Beneficial Owner” of, and shall be deemed to “Beneficially Own,” and shall have “Beneficial Ownership” of, any Company Securities or any Rights, as applicable, (i) which such Person directly owns or
(ii) which such Person would be deemed to own constructively pursuant to Section 382 of the Code and the Treasury Regulations promulgated thereunder (including as a result of the deemed exercise of an “option” pursuant to
Treasury Regulation Section 1.382-4(d) and including, without duplication, Company Securities or Rights, as applicable, owned by any Affiliate of such Person); provided that a Person shall not be treated as “Beneficially Owning”
Company Securities pursuant to clause (i) above to the extent that such Person does not have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such Company Securities. 

(f) “Board” shall have the meaning set forth in the Recitals. 

(g) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in North Carolina are
authorized or obligated by law or executive order to close. 
 (h) “Close of Business” on any given date shall mean 5:00 p.m.,
Eastern Time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 p.m., Eastern Time, on the next succeeding Business Day. 

(i) “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute. 

  
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 (j) “Common Shares” when used with reference to the Company shall mean the shares of
common stock, no par value per share, of the Company. 
 (k) “Company Securities” shall mean Common Shares and any other interest
that would be treated as “stock” of the Company for purposes of Section 382 of the Code (including pursuant to Treasury Regulation Section 1.382-2T(f)(18)). 

(l) “Consent Order” shall mean the Consent Order, No. FDIC-11-064b, dated April 27, 2011, entered into between the Bank, the
Federal Deposit Insurance Corporation and the North Carolina Commissioner of Banks. 
 (m) “Distribution Date” shall mean the
earlier of (i) the Close of Business on the tenth (10th) Business Day after a Shares Acquisition Date and (ii) the Close of Business on the tenth (10th) Business Day (or such later day as may be designated prior to a Shares Acquisition Date by the Board) after the date of the commencement of a tender or exchange offer by any Person if, upon
consummation thereof, such Person would or could be an Acquiring Person; provided, however, that if either of such dates occurs after the date of this Plan and on or prior to the Record Date, then the Distribution Date shall be the Record Date. 

(n) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 

(o) “Exempt Person” shall mean the Company, any Subsidiary (in each case including, without limitation, in any fiduciary capacity),
any employee benefit plan or compensation arrangement of the Company or any Subsidiary, or any entity or trustee holding Company Securities to the extent organized, appointed or established by the Company or any Subsidiary for or pursuant to the
terms of any such employee benefit plan or compensation arrangement. 
 (p) “Expiration Date” shall mean the earliest of
(i) the Final Expiration Date, (ii) the Redemption Date, (iii) the time at which all Rights (other than Rights that have become null and void pursuant to Section 8(e) hereof) are exchanged as provided in Section 24 hereof,
(iv) such time as the Board determines, in its sole discretion, that the Rights and the Plan are no longer necessary for the preservation of existence of the Tax Benefits, (v) a date prior to a Shares Acquisition Date on which the Board
determines, in its sole discretion, that the Rights and this Plan are no longer in the best interests of the Company and its shareholders, (vi) a Regulatory Event and (vii) the Close of Business on July 10, 2015, unless this Plan is
approved by the Company’s shareholders at a meeting of shareholders duly held prior to such date. 
 (q) “Final Expiration
Date” shall mean the Close of Business on July 11, 2017; provided that if a Shares Acquisition Date occurs fewer than thirty (30) days prior to such date, then the Final Expiration Date shall be the date that is thirty (30) days
after the Shares Acquisition Date. 
 (r) “Grandfathered Person” shall mean any Person who or which, together with all Affiliates
of such Person, was on the Record Date, the Beneficial Owner of 4.99% or more of the Company Securities outstanding on such date. Any Grandfathered Person who, together with all of its Affiliates, subsequently becomes the Beneficial Owner of
less than 4.99% of the Company Securities shall cease to be a Grandfathered Person. 
 (s) “Independent Director” shall mean a
member of the Board who (i) is independent under the independence standards of Item 407(a) of Regulation S-K of the Securities and Exchange Commission and (ii) who is not affiliated with any shareholder owning or controlling the
power to vote 5% or more of the Common Shares. 
 (t) “Person” shall mean any individual, firm, corporation, partnership, trust
association, limited liability company, limited liability partnership, governmental entity, or other entity, or any group of Persons making a “coordinated acquisition” of shares or otherwise treated as an entity within the meaning of
Treasury Regulation Section 1.382-3(a)(1)(i) and shall include any successor (by merger or otherwise) of any such entity. 

  
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 (u) “Preferred Shares” shall mean shares of the Company’s Junior Participating
Preferred Stock, Series B, no par value per share, having the rights and preferences set forth in the form of Articles of Amendment attached as Exhibit A to this Plan. 

(v) “Purchase Price” shall mean the price (subject to adjustment as provided herein) at which a holder of a Right may purchase
1/1,000th of a Preferred Share (subject to adjustment as provided herein) upon exercise of a Right, which price shall initially be $0.10. 

(w) “Redemption Date” shall mean the time at which the Rights are redeemed as provided in Section 23 hereof. 

(x) “Regulatory Event” shall mean the receipt by the Company and/or the Bank of a written notice, dated as of a date subsequent to
the date of this Plan, from a Bank Regulatory Authority providing that (1) the Company and/or the Bank must raise additional capital to satisfy required regulatory capital standards, and (2) in furtherance of such capital raising efforts,
the Company and/or the Bank shall be required to terminate this Plan. 
 (y) “Section 382” means Section 382 of the Code, or
any comparable successor provision. 
 (z) “Securities Act” means the Securities Act of 1933, as amended. 

(aa) “Shares Acquisition Date” shall mean the date of the first public announcement by the Company or an Acquiring Person
(including, in the case of an announcement by an Acquiring Person, the filing of a report on Schedule 13D or Schedule 13G under the Exchange Act or any similar or successor report) indicating that an Acquiring Person has become such. 

(bb) “Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly, by such Person. 
 (cc) “Tax Benefits” means the net
operating loss carryovers, capital loss carryovers, general business credit carryovers, alternative minimum tax credit carryovers and foreign tax credit carryovers, as well as any loss or deduction attributable to a “net unrealized built-in
loss” within the meaning of Section 382 and the Treasury Regulations promulgated thereunder, of the Company or any Subsidiary. 

(dd) “Threshold Holder” means any Person who or which, together with all Affiliates of such Person, shall be the Beneficial Owner of
4.99% or more of (i) the Common Shares then outstanding or (ii) any class of Company Securities (other than Common Shares) then outstanding. 

(ee) “Trading Day” means a day on which the principal national securities exchange or over-the-counter market on which the Common
Shares are listed or admitted to trading is open for the transaction of business or, if the Common Shares are not listed or admitted to trading on any national securities exchange or over-the-counter market, a Business Day. 

(ff) “Treasury Regulation” means any final, proposed or temporary regulation of the U.S. Department of the Treasury under the Code
and any successor regulation. 
 (gg) “U.S. Government” means any of (i) the federal government of the United States of
America, (ii) any instrumentality or agency of the federal government of the United States of America and (iii) any Person wholly-owned by, or the sole beneficiary of which is, the federal government of the United States of America or any
instrumentality or agency thereof. 
 (hh) “Written Agreement” shall mean the Written Agreement, Docket No. 11-103-WA/RB-HC,
dated as of August 26, 2011, by and between the Company and the Federal Reserve Bank of Richmond. 

  
 5 

 SECTION 2. OTHER DEFINITIONAL AND INTERPRETATIVE PROVISIONS. The words “hereof,”
“herein” and “hereunder” and similar terms used in this Plan shall refer to this Plan as a whole and not to any particular provision of this Plan. The captions herein are included for convenience of reference only and shall
be ignored in the construction or interpretation hereof. References to Sections and Exhibits are to Sections and Exhibits of this Plan unless otherwise specified. All Exhibits annexed hereto or referred to herein are hereby incorporated in
and made a part of this Plan as if set forth in full herein. Any capitalized terms used in any Exhibit but not otherwise defined therein, shall have the meaning as defined in this Plan. Any singular term in this Plan shall be deemed to
include the plural, and any plural term the singular. Whenever the words “include,” “includes” or “including” are used in this Plan, they shall be deemed to be followed by the words “without limitation,”
whether or not they are in fact followed by those words or similar terms. “Writing,” “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible
form. References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and
permitted assigns of that Person. References from or through any date mean, unless otherwise specified, from and including or through and including, respectively. References to any statute, rules or regulations shall be deemed to refer to
such statute, rules or regulations as amended from time to time and to any successors thereto. 
 SECTION 3. APPOINTMENT OF RIGHTS
AGENT. The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable and, upon acceptance of such appointment by a co-Rights Agent, the provisions of this Plan applicable to the Rights Agent shall be deemed also to apply to such co-Rights Agent. 

SECTION 4. ISSUE OF RIGHT CERTIFICATES.

(a) Prior to a Distribution Date, (x) the Rights will be evidenced (subject to the provisions of Section 4(b) hereof) by the
certificates for Common Shares registered in the names of the holders thereof (or, if Common Shares are uncertificated, the registration of such Common Shares on the stock transfer books of the Company) and not by separate Right Certificates, and
(y) the Rights will be transferable only in connection with the transfer of Common Shares. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will
send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Distribution Date (other than the holder of any Rights that
have become null and void pursuant to Section 8(e) hereof), at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a “Right Certificate”) and
provided by the Company, evidencing one Right for each Common Share so held. As of and after the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 

(b) As soon as practicable after the Record Date, the Company will send a copy of a Summary of Terms, in substantially the form of
Exhibit C hereto (the “Summary of Terms”), by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Close of Business on the Record Date, at the address of such holder shown on the records of the Company,
and also will make a copy of the Summary of Terms publicly available through a filing with the Securities and Exchange Commission. With respect to certificates representing Common Shares outstanding as of the Record Date (or, if Common Shares
are uncertificated, shares registered on the stock transfer books of the Company), or issued subsequent to the Record Date, unless and until the Distribution Date shall occur, the Rights will be evidenced by the certificates representing such Common
Shares (or, if Common Shares are uncertificated, by an appropriate notation in the stock transfer books of the Company) and the registered holders of the Common Stock shall also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date and the Expiration Date, the surrender for transfer of any certificate for Common Shares (or, if Common Shares are uncertificated, the transfer on the stock transfer books of the Company of such Common Shares)
outstanding on the Record Date, with or without a copy of the Summary of Terms attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares represented thereby. 

  
 6 

 (c) Rights shall be issued in respect of all Common Shares which are issued by the Company after
the Record Date but prior to the earlier of the Distribution Date and the Expiration Date. Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this
paragraph (c)) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date shall have impressed on, printed on, written on or otherwise affixed to such certificates a legend in substantially the following form:

 THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A TAX BENEFITS PRESERVATION PLAN BETWEEN
BANK OF THE CAROLINAS CORPORATION AND BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. DATED AS OF JULY 11, 2014 (AS IT MAY BE AMENDED FROM TIME TO TIME, THE “PLAN”), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF BANK OF THE CAROLINAS CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE PLAN, SUCH RIGHTS MAY BE REDEEMED, MAY BECOME EXERCISABLE FOR SECURITIES OR ASSETS OF THE
COMPANY, MAY BE EXCHANGED FOR COMMON SHARES OR OTHER SECURITIES OR ASSETS OF THE COMPANY, MAY EXPIRE, MAY BECOME VOID (INCLUDING IF THEY ARE “BENEFICIALLY OWNED” BY AN “ACQUIRING PERSON” OR AN AFFILIATE THEREOF, AS SUCH TERMS ARE
DEFINED IN THE PLAN, OR BY ANY TRANSFEREE OF ANY OF THE FOREGOING) OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. BANK OF THE CAROLINAS CORPORATION WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A
COPY OF THE PLAN WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. 
 If any uncertificated Common Shares become outstanding
(including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earlier of the Distribution Date and the Expiration Date, the registration of such Common Shares
on the stock transfer books of the Company shall evidence one Right for each such Common Share and the Company shall mail to every Person that holds such Common Shares a confirmation of the registration of such Common Share and Right on the stock
transfer books of the Company, which confirmation will contain a legend indicating that a full copy of any rights, privileges, restrictions and conditions which may be attached to the Common Shares can be obtained without charge by contacting the
Secretary of the Company. 
 In the event that the Company purchases or acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares that are no longer outstanding. 

(d) The Company shall provide written notice to the Federal Reserve Bank of Richmond of a Shares Acquisition Date, which notice shall be
provided prior to the corresponding Distribution Date. 
 SECTION 5. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase and of assignment to be printed on the reverse thereof) shall be substantially the same as the form in Exhibit B hereto and may have such marks of identification or designation and such legends, summaries, or
endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Plan, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to custom and common usage. 

  
 7 

 SECTION 6. COUNTERSIGNATURE AND REGISTRATION. 

(a) The Right Certificates shall be executed on behalf of the Company by its Chief Executive Officer or President, any of its Vice
Presidents, or its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Company’s seal or a facsimile thereof, and shall be attested by the Secretary or any Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile signature, and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force and effect as though the Person who signed such Right Certificates had not ceased to be such officer of the Company and any Right Certificate may be signed on behalf of the
Company by any Person who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Plan any such Person was not such an
officer. 
 (b) Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Right Certificates upon exercise, transfer or exchange, books for registration and transfer of the Right Certificates. Such books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates. 

SECTION 7. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHT
CERTIFICATES. 
 (a) Subject to the provisions of Section 14 hereof, at any time after the Distribution Date, and prior to the
Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become null and void pursuant to Section 8(e) hereof or that have been exchanged pursuant to Section 24 hereof) may
be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates, entitling the registered holder to purchase a like number of 1/1,000ths of a Preferred Share (or Common Shares, in the event the Rights become
exercisable for Common Shares in accordance with Section 12(a)(ii) hereof) as the Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate or Right Certificates until the
registered holder of the Right Certificate has complied with the requirements of Section 8(f). Upon satisfaction of the foregoing requirements, the Rights Agent shall, subject to Sections 8(e), 8(f), 14 and 24 hereof, countersign and
deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right Certificates. 
 (b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to the Company and the Rights Agent of the loss, theft, destruction or mutilation of the Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to the Company
and the Rights Agent, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated,
the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated. 

(c) Notwithstanding anything in this Plan to the contrary, Rights Certificates shall not be transferable, except by a registered holder
(i) to an affiliate of such registered holder; (ii) to the Company; (iii) in a public distribution; (iv) in a transaction after which no transferee or group of transferees would hold 2% or more of any class of the Company’s
Common Shares; or (v) to a transferee that owns at least 50% of the Company’s Common Shares prior to such transfer. 

  
 8 

 SECTION 8. EXERCISE OF RIGHTS. 

(a) Subject to Sections 8(e) and 24 hereof, the registered holder of any Right Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein) in whole or in part at any time after the Distribution Date and prior to the Expiration Date upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the Rights Agent designated for such purpose, together with payment of the aggregate Purchase Price with respect to the Rights then to be exercised. 

(b) The Purchase Price shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. 

(c) Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the total number of 1/1,000ths of a Preferred Share to be purchased and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 10
hereof by certified check, cashier’s check, or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent therefor) certificates for the number of Preferred Shares to be purchased (or, if the Preferred Shares are uncertificated, request from such transfer agent a statement setting forth such number of Preferred Shares
to be purchased for which registration will be made on the stock transfer books of the Company) and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or (B) if the Company shall have elected to
deposit the Preferred Shares issuable upon exercise of the Rights with a depositary agent, requisition from the depositary agent depositary receipts representing such number of 1/1,000ths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent with the depositary agent or registrations in the depositary agent’s name shall be made on the stock transfer books of the Company if
the Preferred Shares are uncertificated) and the Company hereby directs the depositary agent to comply with such request, and (ii) after receipt of such certificates (or, if the Preferred Shares are uncertificated, such statement) or depositary
receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder. If the Company is obligated to deliver Common Shares or
other securities or assets pursuant to this Plan, upon exercise of the Rights or otherwise, the Company will make all arrangements necessary so that such securities and assets are available for delivery by the Rights Agent, if and when appropriate.

 (d) In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to such Person’s duly authorized assigns, subject to the provisions of
Section 14 hereof. 
 (e) Notwithstanding anything in this Plan to the contrary, any Rights Beneficially Owned by (i) an Acquiring
Person or an Affiliate of an Acquiring Person from and after the date on which the Acquiring Person becomes such or (ii) a transferee of Rights Beneficially Owned by an Acquiring Person (or by an Affiliate of an Acquiring Person) who
(A) becomes a transferee after the public announcement relating to a Shares Acquisition Date with respect to an Acquiring Person who was identified on the Shares Acquisition Date or (B) becomes a transferee with respect to an Acquiring
Person (or an Affiliate thereof) and receives such Rights (I) with actual knowledge that the transferor is or was an Acquiring Person (or an Affiliate of an Acquiring Person) or (II) pursuant to either (x) a transfer (whether or not for
consideration) from the Acquiring Person (or an Affiliate thereof) to holders of equity interests in such Acquiring Person (or in such Affiliate thereof) or to any Person with whom the Acquiring Person (or an Affiliate thereof) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or (y) a transfer which the Board determines in good faith is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this
Section 8(e), shall become null and void without any further action, and no holder of such Rights (other than a transferee not of a type described in 

  
 9 

 
clause (ii)) shall have any rights whatsoever with respect to such Rights, whether under this Plan or otherwise. The Company shall use all reasonable efforts to ensure that the provisions of
this Section 8(e) are complied with, but shall have no liability to any holder of Right Certificates or other Person as a result of its failure to make any determinations with respect to an Acquiring Person or any transferee of an Acquiring
Person hereunder. No Right Certificate shall be issued pursuant to Section 4 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Affiliate thereof or to any nominees of such Acquiring Person or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. 

(f) Notwithstanding anything in this Plan to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action
with respect to any purported transfer pursuant to Section 7 hereof or exercise pursuant to this Section 8 unless the registered holder of the applicable Rights (i) shall have completed and signed the certificate contained in the form
of assignment or election to purchase, as the case may be, set forth on the reverse side of the Right Certificate surrendered for such transfer or exercise, as the case may be, and (ii) shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) thereof as the Company shall reasonably request.
 (g) The Company hereby
waives application of each standstill or other similar provision relating to Company Securities by which a registered holder of Rights is bound as of the date of this Plan to the extent necessary to permit such registered holder to exercise such
Rights in accordance with this Plan. 
 SECTION 9. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Plan. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Right Certificates to the
Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company. 

SECTION 10. RESERVATION AND AVAILABILITY OF CAPITAL STOCK. 

(a) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred
Shares, the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 8 hereof. The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and
fully-paid and nonassessable shares. The foregoing covenants and agreements of the Company shall apply with respect to the Common Shares in the event the Rights become exercisable for Common Shares in accordance with Section 12(a)(ii)
hereof. 
 (b) So long as the Preferred Shares or other securities issuable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from and after such time as the Rights become exercisable, all securities reserved for such issuance to be listed on any such exchange upon official notice of issuance upon such
exercise. 
 (c) The Company shall use its reasonable best efforts to (i) file, as soon as practicable following the earliest
date after a Shares Acquisition Date and determination of the consideration to be delivered by the Company upon exercise of the Rights in accordance with Section 12(a)(ii), or as soon as is required by law following a Distribution Date, as the
case may be, a registration statement under the Securities Act with respect to the securities issuable upon exercise of the Rights, (ii) cause such registration statement to become 

  
 10 

 
effective as soon as practicable after such filing and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company shall also take such action as may be appropriate to ensure compliance with the
securities or blue sky laws of the various states in connection with the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the date set forth in clause (i) of the first
sentence of this Section 10(c), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as a public announcement when the suspension is no longer in effect.

Notwithstanding anything contained in this Plan to the contrary, the Rights shall not be exercisable for securities in any jurisdiction if the requisite
qualification in such jurisdiction has not been obtained, such exercise is not permitted under applicable law or a registration statement in respect of such securities has not been declared effective. 

(d) The Company covenants and agrees that it will take all such action as may be necessary to ensure that all 1/1000ths of a Preferred Share
(or Common Shares, in the event the Rights become exercisable for Common Shares in accordance with Section 12(a)(ii) hereof) shall, at the time of delivery of such securities (subject to payment of the Purchase Price), be duly authorized,
validly issued, fully paid and nonassessable. 
 (e) The Company further covenants and agrees that it will pay when due and payable any and
all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates (or, if uncertificated, the registration on the stock transfer books of the
Company) or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates (or, if uncertificated, to
register on the stock transfer books of the Company) or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax is due. 
 SECTION
11. PREFERRED SHARES RECORD DATE. Each Person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares
represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein. The foregoing also shall apply with respect to the Common Shares, in the event the Rights become exerciseable for Common Shares in accordance with Section 12(a)(ii) hereof. 

SECTION 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number of shares
covered by each Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 12. 

(a) (i) In the event the Company shall at any time after the date of this Plan (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares, or (D) issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as provided in this Section 12(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective date 

  
 11 

 
of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the
Company were open, such Person would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the
exercise of Rights be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Rights. 

(ii) Subject to Section 24 hereof, from and after the Shares Acquisition Date, each holder of a Right, other than Rights which have
become null and void pursuant to the provisions of Section 8(e) hereof, shall have a right to receive, upon exercise thereof pursuant to Section 8(a) hereof at a price equal to the then current Purchase Price multiplied by the number of
1/1,000ths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Plan and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of 1/1,000ths of a Preferred Share for which a Right is then exercisable and dividing that product by (y) 85% of the then current per share market price of the Company’s Common Shares
(determined pursuant to Section 12(d) hereof) on the date of the occurrence of such event. 
 (iii) In the event that there shall not
be sufficient Common Shares authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing paragraph (ii), the Company may substitute, for each Common Share that would otherwise be issuable upon exercise of a
Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof. 
 (b) In case the Company shall fix a record date for the issuance of rights,
options, or warrants to all holders of Preferred Shares entitling such holders (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares or securities convertible into Preferred Shares at a
price per Preferred Share (or having a conversion price per share, if a security is convertible into Preferred Shares) less than the then current per share market price of the Preferred Shares (as defined in Section 12(d) hereof) on such record
date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of Rights be less than the aggregate par value of the shares of capital stock
of the Company issuable upon exercise of such Rights. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith
by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options, or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (c) In case the Company shall
fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 12(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the 

  
 12 

 
numerator of which shall be the then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the Preferred Shares. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. 
 (d) For
the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 12(d)) on any date shall be deemed to be the average of the daily closing bid
prices per share of such Security for the thirty (30) consecutive Trading Days immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following
the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of thirty (30) Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the
current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The bid price at market close for each Trading Day shall be the quoted bid price, regular way, at market
close as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NASDAQ Stock Market or, if the Security is not listed or admitted to trading on the NASDAQ Stock Market, as
reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted
to trading on any national securities exchange the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by such system then in use, or, if on any such date the Security
is not quoted by any such system, the average of the closing bid prices as furnished by a professional market maker making a market in the Security selected by the Board. If the Preferred Shares are not publicly held or so listed or traded,
“current per share market price” shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to the foregoing provisions of this Section 12(d) (appropriately adjusted to reflect
any stock split, stock dividend, or similar transaction occurring after the date hereof), multiplied by one thousand (1,000). If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “current per
share market price” shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. 

(e) No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any adjustments which by reason of this Section 12(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 12 shall be made to the nearest cent or to the nearest 1/1,000th of a Preferred Share. Notwithstanding the first sentence of this Section 12(e), any adjustment required by this Section 12 shall be
made no later than the Expiration Date. 
 (f) If as a result of an adjustment made pursuant to Section 12(a) hereof, the holder
of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 12(a), (b), (c), (e), (g), (h), (i), (k) and (m), and the provisions of
Sections 7, 8, 10, 11 and 14 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares. 
 (g) All
Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of 1/1,000ths of a Preferred Share purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. 

  
 13 

 (h) Unless the Company shall have exercised its election as provided in Section 12(i)
hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 12(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of 1/1,000ths of a Preferred Share (calculated to the nearest 1/1,000th of a Preferred Share) obtained by (i) multiplying (x) the number of 1/1,000ths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the
Purchase Price. 
 (i) The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of 1/1,000ths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of
1/1,000ths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest
1/1,000th) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record date for the adjustment, and if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at least ten (10) days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant
to this Section 12(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior
to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holder shall be entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 

(j) Irrespective of any adjustment or change in the Purchase Price or the number of 1/1,000ths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of 1/1,000ths of a Preferred Share which was expressed in the initial Right Certificates issued hereunder. 

(k) [reserved]. 
 (l) In any
case in which this Section 12 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right
to receive such additional shares upon the occurrence of the event requiring such adjustment. 
 (m) Anything in this Section 12 to the
contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that (i) any consolidation or subdivision of the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the current per share market price, (iii) issuance wholly for cash of
Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares payable in Preferred Shares, or (v) issuance of rights, options, or warrants referred to
hereinabove in Section 12(b), hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such shareholders. 

  
 14 

 (n) In the event that at any time after the date of this Plan and prior to the Distribution
Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of Common Shares, then in any such case (A) the number of 1/1,000ths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by
multiplying the number of 1/1,000ths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is
the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments provided for in this Section 12(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.

 SECTION 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever an adjustment is made as provided in
Section 12 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment, and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and (c) mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof. 

SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. 

(a) The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, such number of Rights or Right Certificates shall be rounded to the nearest whole number and thereafter such whole number of Rights or Right Certificates, as applicable, shall be issued or distributed.

 (b) The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of
1/1,000th of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of 1/1,000th of a Preferred Share). Fractions of Preferred
Shares in integral multiples of 1/1,000th of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges, and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu
of fractional Preferred Shares that are not integral multiples of 1/1,000th of a Preferred Share, the Company shall round the Preferred Shares to the nearest 1/1,000th of a Preferred Share. 

(c) In the event the Rights become exercisable for Common Shares in accordance with Section 12(a)(ii) hereof or in the event of an
exchange in accordance with Section 24 hereof, the Company shall not be required to issue fractions of Common Shares upon exercise or exchange of the Rights or to distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company shall round the number of shares of Common Shares to the nearest whole number of shares. 
 (d) The
holder of a Right by the acceptance of the Right expressly waives such Person’s right to receive any fractional Rights or any fractional shares upon exercise or exchange of a Right (except as provided above). 

SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this Plan, excepting the rights of action given to the
Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the

  
 15 

 
Common Shares), may, in such Person’s own behalf and for such Person’s own benefit, enforce, and may institute and maintain any suit, action, or proceeding against the Company to
enforce, or otherwise act in respect of, such Person’s right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Plan. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Plan and will be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of any Person subject to, this Plan. 
 SECTION 16. AGREEMENT OF
RIGHT HOLDERS. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 

(a) prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 

(b) after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; 
 (c) subject to Sections 7 and 8(f)
hereof, the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Share) is registered as the absolute owner of such certificate and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the second to last sentence of Section 8(e) hereof, shall be affected by any notice to the contrary; 

(d) notwithstanding anything in this Plan to the contrary, a majority of the Independent Directors shall have full authority to revoke or
suspend this Plan without notice and to declare all Rights and/or Rights Certificates null, void and of no further effect if, in the unilateral discretion of such Independent Directors, it is determined in good faith that the Plan (i) is no
longer in the best interests of the Company; (ii) is no longer necessary to preserve Tax Benefits of the Company; (iii) is contrary to the safe and sound operation of the Company or the Company’s subsidiary bank; or (iv) impedes
the ability of the Company to serve as a source of strength to the Company’s subsidiary bank; and 
 (e) notwithstanding anything in
this Plan to the contrary, neither the Company, the Rights Agent, nor any member of the Board shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Plan by reason
of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation; provided that the Company must use its reasonable best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as reasonably practicable. 
 SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends, or be deemed for any purpose the holder of the shares of capital stock which may at any time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. 

  
 16 

 SECTION 18. CONCERNING THE RIGHTS AGENT. 

(a) The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this Plan and the exercise and performance of its duties hereunder. The Company shall indemnify the
Rights Agent for, and hold it harmless against, any loss, liability, claim or expense (“Loss”) arising out of or in connection with its duties under this Plan, including the costs and expenses of defending itself against any Loss, unless
such Loss shall be a result of the Rights Agent’s gross negligence, bad faith or willful misconduct. 
 (b) The Rights Agent shall be
protected, held harmless, and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Plan in reliance upon (i) any Right Certificate or certificate for the
Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof; (ii) any written or oral instructions,
representations or certifications received from any person it believes in good faith to be an officer, authorized agent, employee or shareholder of the Company; and (iii) any information, records and documents provided to the Rights Agent by
the Company’s current or former transfer agent or registrar. 
 (c) Rights Agent’s aggregate liability for any and all damages
arising from or relating to any and all claims and causes of action in connection with its duties under the Plan, shall not exceed the lesser of: (i) the amount of actual damages incurred by Company; and (ii) an amount equal to the fees
(excluding pass-through charges) paid by Company to Rights Agent with respect to its duties under the Plan during the twelve (12) month period immediately preceding the date of occurrence of the event upon which a claim is asserted, less any
amounts previously paid by Rights Agent in satisfaction or settlement of other claims applicable to Rights Agent’s duties under the Plan giving rise to such claim or cause of action, regardless of the basis on which Company is entitled to claim
damages (including, without limitation breach, negligence, misrepresentation, or other contract or tort claim) and shall constitute Company’s sole monetary remedy. 

(d) IN NO EVENT WILL RIGHTS AGENT BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATED
TO THIS AGREEMENT (INCLUDING LOST PROFITS, DAMAGE TO REPUTATION OR LOST SAVINGS), EVEN IF FORESEEABLE OR EVEN IF RIGHTS AGENT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. 

SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Plan without the execution or filing of any paper or any further act on the part of any of the parties
hereto, provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. If at the time such successor Rights Agent shall succeed to the agency created by this Plan any of
the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and if at that time any of
the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates and in this Plan. 
 If at any time the name of the Rights
Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and if at
the time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Plan. 

  
 17 

 SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Plan upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: 

(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion. 

(b) Whenever in the performance of its duties under this Plan the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chief Executive Officer or President, any of the Vice Presidents, or the Chief Financial Officer of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the provisions of this Plan in reliance upon such certificate. 

(c) The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or
willful misconduct.
 (d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained
in this Plan or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. 

(e) The Rights Agent shall not be under any responsibility in respect of the validity of this Plan or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition
contained in this Plan or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 8(e) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 4, 12, 23, or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred or Common
Shares to be issued pursuant to this Plan or any Right Certificate or as to whether any Preferred or Common Shares will, when issued, be validly authorized and issued, fully-paid and non assessable. 

(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Plan. 

(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder
from the Chief Executive Officer or President, any of the Vice Presidents, or the Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. 

(h) The Rights Agent and any shareholder, director, officer, or employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not the Rights Agent
under this Plan. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or any other legal entity. 

  
 18 

 (i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in
it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect, or misconduct of any such attorneys or agents or for any loss to the
Company or to any holder of Rights resulting from any such act, default, neglect, or misconduct, provided reasonable care was exercised in the selection and continued employment thereof. 

SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights Agent may resign and be discharged from its
duties under this Plan upon thirty (30) days’ notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and after a Distribution Date, to the holders of the
Right Certificates by first class mail. The Company may, in its sole discretion, remove the Rights Agent or any successor Rights Agent upon thirty (30) days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit such holder’s Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. After appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties, and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment the Company shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares or Preferred Shares, and after a Distribution Date, mail a notice thereof in writing to the registered holders of the Right Certificates by first class mail. Failure to give any notice provided
for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the provisions of this Plan or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in accordance with the provisions of this Plan. 
 SECTION
23. REDEMPTION. 
 (a) The Board may, at its option, at any time prior to the Distribution Date, redeem all but not less than
all the then outstanding Rights at a redemption price of $0.0001 per Right, appropriately adjusted to reflect any stock split, stock dividend, or similar transaction occurring after the date hereof (such redemption price being hereinafter referred
to as the “Redemption Price”). The redemption of the Rights by the Board may be made effective at such time on such basis and with such conditions as the Board in its sole discretion may establish. 

(b) Immediately upon the action of the Board ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23
and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within ten (10) days after such action of the Board ordering the redemption of
the Rights pursuant to paragraph (a), the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear on the registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made.

  
 19 

 SECTION 24. EXCHANGE. 

(a) The Board may, at its option, at any time after a Shares Acquisition Date, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 8(e) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any
stock split, stock dividend, or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). The exchange of the Rights by the Board may be made effective at such
time, on such basis and with such conditions as the Board in its sole discretion may establish. Promptly after the action of the Board electing to exchange the Rights, the Company shall give notice thereof (specifying the steps to be taken to
receive Common Shares in exchange for Rights) to the Rights Agent and the holders of the Rights (other than Rights that have become null and void pursuant to Section 8(e) hereof) outstanding immediately prior thereto by mailing such notice in
accordance with Section 26 hereof. Before effecting an exchange pursuant to this Section 24, the Board may direct the Company to enter into a Trust Agreement in such form and with such terms as the Board shall then approve (the
“Trust Agreement”). If the Board so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by such agreement (the “Trust”) all or some (as designated by the Board) of the Common Shares
(or other securities) issuable pursuant to the exchange, and all or some (as designated by the Board) holders of Rights entitled to receive shares pursuant to the exchange shall be entitled to receive such shares (and any dividends paid or
distributions made thereon after the date on which such shares are deposited in the Trust) only from the Trust and solely upon compliance with the relevant terms and provisions of the Trust Agreement. Prior to effecting an exchange and
registering Common Shares (or other such securities) in any Person’s name, including any nominee or transferee of a Person, the Company may require (or cause the trustee of the Trust to require), as a condition thereof, that any holder of
Rights provide evidence, including, without limitation, the identity of the Beneficial Owners thereof and their Affiliates (or former Beneficial Owners thereof and their Affiliates) as the Company shall reasonably request in order to determine if
such Rights are null and void. If any Person shall fail to comply with such request, the Company shall be entitled conclusively to deem the Rights formerly held by such Person to be null and void pursuant to Section 8(e) hereof and not
transferable or exerciseable or exchangeable in connection herewith. Any Common Shares or other securities issued at the direction of the Board in connection herewith shall be validly issued, fully paid and nonassessable Common Shares or of
such other securities (as the case may be), and the Company shall be deemed to have received as consideration for such issuance a benefit having a value that is at least equal to the aggregate par value of the shares so issued. Approval by the
Board of this Plan shall constitute a determination by the Board that such consideration is adequate. 
 Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or
pursuant to the terms of any such plan), together with all Affiliates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. 

(b) Immediately upon the effective date of the action of the Board ordering the exchange of any Rights pursuant to subsection
(a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent on the effective date of said
action of the Board ordering the exchange of Rights. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 8(e) hereof) held by each holder of Rights. 

  
 20 

 (c) In the event that there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with subsection (a) of this Section 24, the Company may substitute, for each Common Share that would otherwise be issuable upon exchange
of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof. 
 SECTION 25. NOTICE OF CERTAIN EVENTS. 

(a) If the Company shall propose, at any time after the Distribution Date and prior to the Expiration Date, (i) to pay any dividend
payable in stock of any class to the holders of the Preferred Shares or to make any other distribution to the holders of the Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights, or options, (iii) to effect any reclassification of the Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company,
or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination, or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares)
then, in each such case, the Company shall give to each holder of a Right Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purpose of
such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding up is to take place and the date of participation therein by the
holders of the Preferred Shares or Common Shares, as the case may be, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least ten (10) days prior to the
record date for determining holders of the Preferred Shares or Common Shares, as the case may be, for purposes of such action, and in the case of any such other action, at least ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Preferred Shares or Common Shares, as the case may be. 
 (b) If a
Stock Acquisition Date shall occur, then (i) the Company shall as soon as practicable thereafter give to each holder of a Right Certificate, to the extent feasible and in accordance with Section 26 hereof, a notice of the occurrence of
such event which notice shall describe such event and the consequences of such event to holders of Rights under Section 12(a)(ii) hereof and (ii) all references to Preferred Shares in paragraph (a) of this Section 25 shall be
deemed to refer to Common Shares or other securities, as the case may be. 
 SECTION 26. NOTICES. Notices or demands
authorized by this Plan to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage-prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows: 
 Bank of the Carolinas Corporation 

135 Boxwood Village Drive 

Mocksville, NC 27028 
 Attention:
Chief Executive Officer 
 Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Plan to be given or
made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage-prepaid, addressed (until another address is filed in writing with the Company) as
follows: 
 Broadridge Corporate Issuer Solutions, Inc. 

1717 Arch Street, Suite 1300 

Philadelphia, PA 19103 

Attention: Reorganization Department 

  
 21 

 Notices or demands authorized by this Plan to be given or made by the Company or the Rights Agent
to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage-prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company (or the Rights Agent on and
after the Distribution Date). 
 SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time supplement or
amend this Plan without the approval of any holders of Right Certificates to make any provision with respect to the Rights which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent whether or not it would adversely affect the holders of Right Certificates; provided, however, that from and after the Distribution Date, this Plan shall not be amended in any manner which would adversely affect the
interests of the holders of Rights (other than a holder of Rights that have become null and void pursuant to Section 8(e) hereof). Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or amendment and, except for supplements or amendments described in the last sentence of this Section 27, such
amendment shall become effective immediately upon execution by the Company, whether or not also executed by the Rights Agent. Notwithstanding anything contained in this Plan to the contrary, the Rights Agent may, but shall not be obligated to, enter
into any supplement or amendment that affects the Rights Agent’s own rights, duties, obligations or immunities under this Plan. 

SECTION 28. SUCCESSORS. All the covenants and provisions of this Plan by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 SECTION 29. DETERMINATION AND
ACTIONS BY THE BOARD, ETC. The Board shall have the exclusive power and authority to administer this Plan and to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the
administration of this Plan, including the right and power to (i) interpret the provisions of this Plan and (ii) make all determinations deemed necessary or advisable for the administration of this Plan (including a determination to redeem
or exchange or not to redeem or exchange the Rights or to amend the Plan). All such actions, calculations, interpretations and determinations which are done or made by the Board in good faith shall be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties. 
 SECTION 30. BENEFITS OF THIS PLAN. Nothing
in this Plan shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy, or
claim under this Plan; but this Plan shall be for the sole and exclusive benefit of the Company, the Rights Agent, and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares). 

SECTION 31. SEVERABILITY. If any term, provision, covenant, or restriction of this Plan is held by a court of competent
jurisdiction or other authority to be invalid, void, or unenforceable, the remainder of the terms, provisions, covenants, and restrictions of this Plan shall remain in full force and effect and shall in no way be affected, impaired, or
invalidated. However, in the event that any such provision, covenant, or restriction of this Plan, or any portion thereof, shall be declared unenforceable because of its scope, breadth, or duration, then it shall be modified to the scope,
breadth, or duration permitted by law and shall continue to be fully enforceable in such jurisdiction as so modified. 
 SECTION
32. GOVERNING LAW. This Plan and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of North Carolina and for all purposes shall be governed by and construed in accordance with the
laws of such state applicable to contracts made and to be performed entirely 

  
 22 

 
within such state, without regard to any conflicts of laws principles thereof, provided, however, that all provisions regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed entirely within such state, without regard to any conflicts of laws principles thereof. 

SECTION 33. COUNTERPARTS. This Plan may be executed in counterparts and each of such counterparts shall for all purposes be
deemed to be an original and both counterparts shall together constitute one and the same instrument. 
 SECTION 34. DESCRIPTIVE
HEADINGS. Descriptive headings of the several sections of this Plan are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. 

[Signature Page Follows] 

  
 23 

 The parties hereto have caused this Plan to be duly executed by their respective authorized
officers as of the day and year first above written. 
  

			
	BANK OF THE CAROLINAS CORPORATION
		
	By:	 	 /s/ Stephen R. Talbert

	Name:	 	Stephen R. Talbert
	Title:	 	President and Chief Executive Officer
	
	BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
		
	By:	 	 /s/ John P. Dunn

	Name:	 	John P. Dunn
	Title:	 	Senior Vice President

 [Signature Page to Tax Benefits Preservation Plan] 

  
 24 

 EXHIBIT A 

ARTICLES OF AMENDMENT 

OF 
 BANK OF THE CAROLINAS
CORPORATION 
 Bank of the Carolinas Corporation, a corporation organized and existing under the laws of the State of North Carolina,
for the purpose of amending its articles of incorporation to fix the preferences, limitations, and relative rights of a new series of its preferred stock in accordance with the provisions of sections 55-6-02 and 55-10-06 of the General Statutes of
North Carolina, hereby submits these articles of amendment: 
 1. The name of the corporation is Bank of the Carolinas Corporation. 

2. The articles of incorporation of the corporation are hereby amended by inserting the following new Article 2B (For the avoidance of doubt,
it is noted that Article 2 and Article 2A of the articles of incorporation shall remain unchanged by these articles of amendment): 
 3.
These articles will become effective upon filing with the North Carolina Secretary of State. 
  

			
	This the [    ] day of July, 2014.
	
	BANK OF THE CAROLINAS CORPORATION
		
	By:	 	  

		 	Stephen R. Talbert
		 	President and Chief Executive Officer

  
 25 

 2B. 

Part 1. DESIGNATION AND AMOUNT. The shares of such series shall be designated as “Junior Participating Preferred Stock, Series
B” (the “Series B Preferred Stock”), and the number of shares constituting the Series B Preferred Stock shall be 500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series B Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation that are convertible into Series B Preferred Stock. 
 Part
2. DIVIDENDS AND DISTRIBUTIONS. 
 (A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or
other capital stock) ranking prior and superior to the Series B Preferred Stock with respect to dividends, the holders of shares of Series B Preferred Stock, in preference to the holders of the common stock, no par value per share (the “Common
Stock”), of the Corporation and of any other stock ranking junior to the Series B Preferred Stock as to dividends, shall be entitled to receive, when, as, and if declared by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first business day of March, June, September and December in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or a fraction of a share of Series B Preferred Stock, in an amount per share (rounded to the nearest cent) equal to (subject to the provision for adjustment hereinafter set forth) 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Preferred Stock. In the event the Corporation shall at any time after July 21, 2014 (the “Rights Declaration Date”) declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

(B) The Board of Directors shall declare a dividend or distribution on the Series B Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise)).

 (C) The Board of Directors may fix a record date for the determination of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof. 

Part 3. VOTING RIGHTS. In addition to any other voting rights required by law, the holders of shares of Series B Preferred Stock
shall have the following voting rights: 
 (A) Subject to the provision for adjustment hereinafter set forth, each share of Series B
Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event. 

  
 26 

 (B) Except as otherwise provided herein, in the Corporation’s charter or by law, the
holders of shares of Series B Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of shareholders
of the Corporation. 
 (C) Except as set forth herein or as otherwise provided in the Corporation’s charter or by law, holders of
Series B Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for the taking of any corporate action. 

SECTION 4. CERTAIN RESTRICTIONS. 

(A) Whenever any dividend or distribution declared and payable on the Series B Preferred Stock as provided in Section 2 shall remain
unpaid, thereafter and until all declared but unpaid dividends and distributions on shares of Series B Preferred Stock outstanding shall have been paid in full, the Corporation shall not: 

(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up of the Corporation) to the Series B Preferred Stock; 
 (ii) declare or pay dividends, or make
any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up of the Corporation) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred
Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; 

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up of the Corporation) to the Series B Preferred Stock provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (as to dividends and upon dissolution, liquidation or winding up of the Corporation) to the Series B Preferred Stock; or 

(iv) redeem or purchase or otherwise acquire for consideration any shares of Series B Preferred Stock, or any shares of stock ranking on
a parity with the Series B Preferred Stock (either as to dividends or upon liquidation, dissolution or winding up of the Corporation), except in accordance with a purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or classes. 
 (B) The Corporation shall not permit any
subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner. 
 (C) The Series B Preferred Stock shall not be transferable, except by a registered holder (i) to an
affiliate of such registered holder; (ii) to the Corporation; (iii) in a public distribution; (iv) in a transaction after which no transferee or group of transferees would hold 2% or more of any class of the Corporation’s Common
Shares; or (v) to a transferee that owns at least 50% of the Corporation’s Common Shares prior to such transfer 
 Part
5. REACQUIRED SHARES. Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and canceled promptly after the acquisition

  
 27 

 
thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of the Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Articles of Incorporation of the Corporation or in any other Articles of Amendment creating a series of Preferred Stock or any similar stock or as otherwise required by law. 

Part 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made (A) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up of the Corporation) to the Series B Preferred Stock unless, prior thereto,
the holders of shares of Series B Preferred Stock shall have received $100 per share, plus an amount equal to any declared but unpaid dividends and distributions thereon to the date of such payment; provided that the holders of shares of Series B
Preferred Stock shall also be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of such stock
ranking junior to the Series B Preferred Stock, or (B) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up of the Corporation) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time after the Rights Declaration Date declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series B Preferred Stock were entitled immediately prior to such event under the
proviso in clause (A) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to such event. 
 Part 7. CONSOLIDATION, MERGER,
ETC. In the event the Corporation shall enter into any consolidation, merger, share exchange, combination, or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash or any other
property, or any combination of the foregoing, then in any such case each share of Series B Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 1,000 times the aggregate amount of stock, securities, cash or any other property, as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time
after the Rights Declaration Date declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Preferred Stock shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

 Part 8. NO REDEMPTION. The shares of Series B Preferred Stock shall not be redeemable. 

Part 9. RANK. Unless otherwise provided in the charter of the Corporation or in articles supplementary relating to a subsequent
series of Preferred Stock, the Series B Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporation’s Preferred Stock and shall rank senior to
the Common Stock as to such matters.
 Part 10. AMENDMENT. The charter of the Corporation shall not be amended in any manner
which would materially alter or change the powers, preferences, or special rights of the Series B Preferred Stock so as to affect the holders thereof adversely without the affirmative vote of the holders of a majority of the outstanding shares of
Series B Preferred Stock, voting separately as a class. 

  
 28 

 Part 11. FRACTIONAL SHARES. Series B Preferred Stock may be issued in fractions of a
share, which shall entitle the holder, in proportion to such holder’s fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have all other rights of holders of Series B Preferred Stock. 

  
 29 

 EXHIBIT B 

FORM OF RIGHT CERTIFICATE 
 Certificate
No. R-             
 NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE (AS DEFINED IN THE
PLAN) OR EARLIER IF REDEMPTION, EXCHANGE OR OTHER EXPIRATION EVENT OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AND EXCHANGE ON THE TERMS SET FORTH IN THE PLAN. 

BANK OF THE CAROLINAS CORPORATION 

Right Certificate 
 This
certifies
that                                         
, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Tax Benefits Preservation Plan, dated as of July 11 , 2014
(as it may be amended from time to time, the “Plan”), between Bank of the Carolinas Corporation, a corporation organized under the laws of the State of North Carolina (the “Company”), and Broadridge Corporate Issuer Services (the
“Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Plan) and prior to the Expiration Date (as such term is defined in the Plan), at the principal office of the Rights
Agent, or at the office of its successor as Rights Agent, 1/1,000th of a share of Junior Participating Preferred Stock, Series B, no par value per share (“Preferred Shares”), of the Company, at a purchase price of $0.10 per 1/1,000th of a
Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase and related certificate duly executed. The number of Rights evidenced by this Right Certificate
(and the number of shares which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of July 21, 2014, based on the Preferred Shares as constituted at such
date. As provided in the Plan, the Purchase Price and the number and kind of securities which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of
certain events, as described in the Plan. Capitalized terms used but not defined in this Right Certificate have the meanings assigned to them in the Plan. 

If the Rights evidenced by this Right Certificate are Beneficially Owned by (i) an Acquiring Person or an Affiliate of an Acquiring
Person after the date on which the Acquiring Person becomes such or (ii) a transferee of Rights Beneficially Owned by an Acquiring Person (or by an Affiliate of an Acquiring Person) who (A) becomes a transferee after the public
announcement relating to a Shares Acquisition Date with respect to an Acquiring Person who was identified on the Shares Acquisition Date or (B) becomes a transferee with respect to an Acquiring Person (or an Affiliate thereof) and receives such
Rights (I) with actual knowledge that the transferor is or was an Acquiring Person (or an Affiliate of an Acquiring Person) or (II) pursuant to either (x) a transfer (whether or not for consideration) from the Acquiring Person (or an
Affiliate thereof) to holders of equity interests in such Acquiring Person (or in such Affiliate thereof) or to any Person with whom the Acquiring Person (or an Affiliate thereof) has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (y) a transfer which the Board determines in good faith is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of the restriction described in this paragraph, then such
Rights shall become null and void without any further action, and no holder of such Rights (other than a transferee not of a type described in clause (ii)) shall have any rights whatsoever with respect to such Rights, whether under the Plan or
otherwise 
 This Right Certificate is subject to all of the terms, provisions, and conditions of the Plan, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof and to which Plan 

  
 30 

 
reference is hereby made for a full description of the rights, limitations of rights, obligations, duties, and immunities hereunder of the Rights Agent, the Company, and the holders of the Right
Certificates. Copies of the Plan are on file at the principal executive offices of the Company and the offices of the Rights Agent. 

At any time after the Distribution Date and prior to the Expiration Date, this Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of shares as the
Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not exercised. 
 Subject to the provisions of the Plan, the Rights
evidenced by this Certificate (i) may, at any time prior to the Distribution Date, be redeemed by the Company at a redemption price of $0.0001 per Right or (ii) may, at any time after a Shares Acquisition Date, be exchanged by the Company
in whole or in part for Common Shares. 
 No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced
hereby (other than fractions which are integral multiples of 1/1,000th of a Preferred Share and which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof such number of Preferred Shares shall be rounded to
a whole number of Preferred Shares, as provided in the Plan. 
 No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Plan or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings of other actions affecting shareholders (except as provided in the Plan), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate
shall have been exercised as provided in the Plan. 
 This Right Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Rights Agent. 
 WITNESS the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of July [    ], 2014. 
  

			
	BANK OF THE CAROLINAS CORPORATION
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

  
 31 

 Form of Reverse Side of Right Certificate 

FORM OF ASSIGNMENT 
 (To be executed by
the registered holder if such holder desires to transfer the Right Certificate.) 
 FOR VALUE RECEIVED hereby sells, assigns and transfers unto 

(Please print name and address of transferee) 
 this Right
Certificate, together with all right, title, and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the within Right Certificate on the books of BANK OF THE CAROLINAS CORPORATION, with full power of
substitution. 
  

			
	Dated:	 	  

  

			
	By:	 	  

	Name:	 	
	Title:	 	

 Signature Medallion Guaranteed: 

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or
a commercial bank or trust company having an office or correspondent in the United States. 
 Certificate: 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) this Right Certificate [            ] is
[            ] is not being sold, assigned and transferred by or on behalf of a Person who is or was an Acquiring Person or an Affiliate of any such Acquiring Person (as such terms are
defined in the Plan); and 
 (2) after due inquiry and to the best knowledge of the undersigned, it
[            ] did [            ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate of an Acquiring Person. 
  

			
	By:	 	  

	Name:	 	
	Title:	 	

  
 32 

 Form of Reverse Side of Right Certificate - continued 

 

 FORM OF ELECTION TO PURCHASE 

(To be executed by the registered holder if such holder desires to exercise Rights represented by the Right Certificate.) 

To: BANK OF THE CAROLINAS CORPORATION 
 The undersigned
hereby irrevocably elects to exercise                      Rights represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of the Rights (or such other securities which may be issuable upon exercise of the Rights) and requests that certificates for such shares be issued (or registration for such shares be made, if such shares are to be issued in
uncertificated form) in the name of and delivered to: 
 Please insert social security or other identifying number

(Please print name and address) 
 If such number of Rights shall
not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to: 

Please insert social security or other identifying number

(Please print name and address) 
  

									
	Dated:	 	  
	 		 	By:	 	  

		 		 		 	Name:	 	
		 		 		 	Title:	 	

 Signature Guaranteed: 

Signatures must be guaranteed by a member firm of a registered national securities exchange, a member of the Financial Industry Regulatory Authority, Inc., or
a commercial bank or trust company having an office or correspondent in the United States. 
 Certificate: 

The undersigned hereby certifies by checking the appropriate boxes that: 

(1) the Rights evidenced by this Right Certificate [            ] are
[            ] are not being exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate of any such Acquiring Person (as such terms are defined in the Plan);
and 
 (2) after due inquiry and to the best knowledge of the undersigned, it [            ] did
[            ] did not acquire the Rights evidenced by this Right Certificate from any Person who is, was or became an Acquiring Person or an Affiliate of an Acquiring Person. 

 

									
	Dated:	 	  
	 		 	By:	 	  

		 		 		 	Name:	 	
		 		 		 	Title:	 	

  
 33 

 NOTICE 

The signatures in the foregoing Forms of Assignment and Election must conform to the name written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever. 
 In the event the certifications set forth above in the Form of Assignment or the Form of
Election to Purchase, as the case may be, are not completed, Bank of the Carolinas Corporation and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate thereof
(as defined in the Plan) and such Assignment or Election to Purchase will not be honored. 

  
 34 

 EXHIBIT C 

BANK OF THE CAROLINAS CORPORATION 

TAX BENEFITS PRESERVATION PLAN 

SUMMARY OF TERMS 
  

			
	Purpose	  	The purpose of the Tax Benefits Preservation Plan (the “Plan”) described in this summary of terms is to preserve the value of certain tax benefits (“Tax Benefits”) of Bank of the Carolinas Corporation (the
“Company”) for U.S. federal income tax purposes.
		
	Rights	  	The Board of Directors of the Company (the “Board”) intends to declare a dividend of one preferred share purchase right (a “Right”) in respect of each share of common stock, no par value per share, of the Company
(“Common Share”) outstanding at the close of business on July 15, 2014 (the “Record Date”) and to become outstanding between the Record Date and the earlier of the Distribution Date and the Expiration Date (as such terms are
defined below).
		
	Exercise	  	Prior to the Distribution Date (as defined below), the Rights are not exercisable. After the Distribution Date, each Right is exercisable to purchase, for $0.10 (the “Purchase Price”), 1/1,000th of a share of the
Junior Participating Preferred Stock, Series B, no par value per share (“Preferred Shares”), of the Company, subject to adjustment in accordance with the terms of the Plan. The Preferred Shares are designed so that each 1/1,000th of a
Preferred Share has economic and voting terms similar to those of one Common Share.
		
	Distribution Date	  	 Initially, the Rights will be attached to all Common Shares then outstanding, and no separate Right certificates will be distributed. On
or after the Distribution Date, the Rights will separate from the Common Shares and become exercisable.
  

The “Distribution Date” will occur on the earlier of (i) the close of business on the tenth business day after a Shares Acquisition Date (as defined
below) and (ii) the close of business on the tenth business day (or such later day as may be designated prior to a Shares Acquisition Date by the Company’s Board of Directors) after the date of the commencement of a tender or exchange offer by
any person if, upon consummation thereof, such person would or could be an Acquiring Person (as defined below); provided, however, that if either of such dates occurs prior to the Record Date, then the Distribution Date will be the Record Date.

 
 A “Shares Acquisition Date” is the date of the first public announcement by the
Company or an Acquiring Person indicating that an Acquiring Person has become such.
  
 An
“Acquiring Person” means any person who or which, together with its affiliates, beneficially owns 4.99% or more of the Common Shares (or any other securities of the Company then outstanding that would be treated as “stock” under
Section 382 of the Internal Revenue Code of 1986, as amended), other than (i) the U.S.

  
 35 

			
		  	Government; (ii) the Company or any subsidiary or employee benefit plan or compensation arrangement of the Company; (iii) any person or entity who or which, together with its affiliates, was on the Record Date, the beneficial owner
of 4.99% or more of the Common Shares, unless that person or entity subsequently increases their beneficial ownership percentage (other than as a result of any stock dividend, stock split or similar transaction or stock repurchase by the Company);
(iv) any person or entity who or which the Board determines, in its sole discretion, has inadvertently become a 4.99% or greater shareholder so long as such person or entity promptly divests sufficient shares to no longer be a 4.99% or greater
shareholder; (v) any person or entity who or which has become the beneficial owner of 4.99% or more of the Common Shares as a result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increased the
proportionate number of shares beneficially owned by that person or entity, provided that the person or entity does not acquire any additional shares other than as a result of any stock dividend, stock split or similar transaction; and (vi) any
person or entity who or which has become a 4.99% or greater shareholder if the Company’s Board of Directors in good faith determines that the attainment of such status has not jeopardized or endangered the Company’s utilization of the tax
benefits sought to be preserved by the Company.
		
	Flip-In	  	From and after a Shares Acquisition Date, (i) Rights owned by the Acquiring Person and its affiliates and certain of their transferees will automatically be void; and (ii) each other Right will automatically become a Right to buy,
for the Purchase Price, that number of Common Shares equal to (a) the Purchase Price multiplied by the number of 1/1000ths of a Preferred Share for which the Right is then exercisable divided by (b) 85% of the then-current per share market price of
the Common Shares.
		
	Exchange	  	At any time after a Shares Acquisition Date, the Company’s Board of Directors may, at its option, exchange all or part of the then outstanding and exercisable Rights for Common Shares at an exchange ratio of one Common Share
per Right, subject to adjustments and limitations described in the Plan. The Board may enter into a trust agreement pursuant to which the Company would deposit into a trust Common Shares that would be distributable to shareholders (excluding
the Acquiring Person and its affiliates) in the event the exchange is implemented. This feature is intended to facilitate a more orderly distribution of Common Shares in the event that a Shares Acquisition Date occurs.
		
	Restrictions on Transfer	  	Rights and Rights Certificates shall not be transferable, except by a registered holder (i) to an affiliate of such registered holder; (ii) to the Company; (iii) in a public distribution; (iv) in a transaction after which no
transferee or group of transferees would hold 2% or more of any class of the Company’s Common Shares; or (v) to a transferee that owns at least 50% of the Company’s Common Shares prior to such
transfer.

  
 36 

			
	Redemption	  	At any time prior to the Distribution Date, the Company’s Board of Directors may, at its option, redeem all, but not fewer than all, of the then outstanding Rights at a redemption price of $0.0001 per Right.
		
	Amendments	  	The Company may from time to time before the Distribution Date supplement or amend the Plan without the approval of any holders of Rights. After the Distribution Date, the Plan may not be amended in any manner that would
adversely affect the interests of the holders of Rights.
		
	Expiration	  	The Rights will expire on the earliest of (i) July 11, 2017, (ii) the time at which all Rights have been redeemed by the Company, (iii) the time at which all Rights have been exchanged by the Company, (iv) such time as the
Company’s Board of Directors determines, in its sole discretion, that the Rights and the Plan are no longer necessary for the preservation of existence of the Tax Benefits, (v) a date prior to a Shares Acquisition Date on which the Board
determines, in its sole discretion, that the Rights and the Plan are no longer in the best interests of the Company and its shareholders and (vi) the close of business on July 10, 2015, unless the Plan is approved by the Company’s shareholders
at a meeting of shareholders duly held prior to such date.

 A copy of the Plan was attached as an exhibit to the Current Report on 8-K filed by the Company with the Securities and
Exchange Commission on July [    ], 2014. A copy of the Plan is available free of charge from the Company. This summary description does not purport to be complete and is qualified in its entirety by reference to the Plan,
as amended from time to time, the complete terms of which are incorporated herein by reference. 

  
 37CEI 2014 Form 8K Ex 10.1 EDF SPA

Exhibit 10.1

LNG SALE AND PURCHASE AGREEMENT
(FOB)

Dated 17 July 2014
BETWEEN
CORPUS CHRISTI LIQUEFACTION, LLC
(Seller)
AND
ÉLECTRICITÉ DE FRANCE, S.A.

(Buyer)

Table of Contents
	
				
	 
	 
	 
	Page No.

	1.
	Definitions and Interpretation
	5

	 
	1.1
	Definitions
	5

	 
	1.2
	Interpretation
	18

	 
	1.3
	Replacement of Rates and Indices No Longer Available
	19

	2.
	Approvals and Conditions Precedent
	20

	 
	2.1
	Approvals
	20

	 
	2.2
	Conditions Precedent
	21

	3.
	Subject Matter
	22

	 
	3.1
	Sale and Purchase
	22

	 
	3.2
	Facilities
	23

	 
	3.3
	Destination
	24

	4.
	Term
	24

	 
	4.1
	Term
	24

	 
	4.2
	Date of First Commercial Delivery
	25

	 
	4.3
	Progress Reports
	26

	 
	4.4
	Delayed Date of First Commercial Delivery
	26

	 
	4.5
	Contract Year
	27

	 
	4.6
	Bridging Volumes
	27

	5.
	Quantities
	28

	 
	5.1
	ACQ
	28

	 
	5.2
	Adjusted Annual Contract Quantity
	29

	 
	5.3
	Round-Up/Round-Down Quantities
	29

	 
	5.4
	Major Scheduled Maintenance
	30

	 
	5.5
	Buyer's Purchase Obligation
	30

	 
	5.6
	Seller's Delivery Obligation
	32

	 
	5.7
	Buyer's Right to Suspend Deliveries
	33

	6.
	Delivery Point, Title and Risk
	34

	 
	6.1
	Delivery Point
	34

	 
	6.2
	Title and Risk
	34

	7.
	Transportation and Loading
	34

	 
	7.1
	Transportation by Buyer
	34

	 
	7.2
	Corpus Christi Facility
	35

	 
	7.3
	Compatibility of the Sabine Pass Facility with LNG Tankers
	36

	 
	7.4
	Buyer Inspection Rights in Respect of the Corpus Christi Facility
	37

	 
	7.5
	LNG Tankers
	38

	 
	7.6
	LNG Tanker Inspections; LNG Tanker Vetting Procedures; Right to Reject LNG Tanker
	41

	 
	7.7
	Port Liability Agreement
	42

	 
	7.8
	Corpus Christi Marine Operations Manual
	43

	 
	7.9
	Loading of LNG Tankers
	43

	 
	7.10
	Notice of Readiness
	45

	 
	7.11
	Berthing Assignment
	46

	 
	7.12
	Berth Laytime
	47

	
				
	 
	7.13
	LNG Transfers at the Corpus Christi Facility
	48

	 
	7.14
	LNG Tanker Not Ready for LNG Transfer; Excess Laytime
	49

	 
	7.15
	Cooperation
	50

	 
	7.16
	Cool-Down and Gas-Up of LNG Tankers
	51

	8.
	Annual Delivery Program
	52

	 
	8.1
	Programming Information
	52

	 
	8.2
	Determination of Annual Delivery Program
	54

	 
	8.3
	Changes to Annual Delivery Program
	55

	 
	8.4
	Ninety Day Schedule
	56

	 
	8.5
	Force Majeure Affecting LNG Tanker
	56

	9.
	Contract Sales Price
	56

	 
	9.1
	Contract Sales Price
	56

	10.
	Invoicing and Payment
	58

	 
	10.1
	Invoices
	58

	 
	10.2
	Payment
	59

	 
	10.3
	Disputed Invoice
	60

	 
	10.4
	Delay in Payment
	61

	 
	10.5
	Audit Rights
	61

	 
	10.6
	Seller's Right to Suspend Performance
	62

	 
	10.7
	Final Settlement
	62

	11.
	Taxes
	62

	 
	11.1
	Responsibility
	62

	 
	11.2
	Seller Taxes
	63

	 
	11.3
	Buyer Taxes
	63

	 
	11.4
	Withholding Taxes
	64

	 
	11.5
	Transfer Tax
	64

	 
	11.6
	Mitigation
	64

	 
	11.7
	Refunds
	65

	12.
	Quality
	65

	 
	12.1
	Specification
	65

	 
	12.2
	Determining LNG Specifications
	66

	 
	12.3
	Off-Specification LNG
	66

	13.
	Measurements and Tests
	68

	 
	13.1
	LNG Measurement and Tests
	68

	 
	13.2
	Parties to Supply Devices
	68

	 
	13.3
	Selection of Devices
	68

	 
	13.4
	Tank Gauge Tables of LNG Tanker
	68

	 
	13.5
	Gauging and Measuring LNG Volumes Loaded
	69

	 
	13.6
	Samples for Quality Analysis
	69

	 
	13.7
	Quality Analysis
	69

	 
	13.8
	Operating Procedures
	69

	 
	13.9
	MMBtu Quantity Delivered
	69

	 
	13.10
	Verification of Accuracy and Correction for Error
	69

	 
	13.11
	Costs and Expenses
	70

	14.
	Force Majeure
	70

	 
	14.1
	Force Majeure
	70

2

	
				
	 
	14.2
	Limitations on Force Majeure
	71

	 
	14.3
	Notification
	73

	 
	14.4
	Measures
	73

	 
	14.5
	No Extension of Term
	73

	 
	14.6
	Settlement of Industrial Disturbances
	73

	 
	14.7
	Foundation Customer Priority
	73

	15.
	Liabilities and Indemnification
	74

	 
	15.1
	General
	74

	 
	15.2
	Limitations on Liability
	74

	 
	15.3
	Buyer's Credit; Credit Support
	76

	 
	15.4
	Third Party Liability
	77

	 
	15.5
	Seller's Insurance
	78

	 
	15.6
	Buyer's Insurance
	78

	16.
	Safety
	79

	 
	16.1
	General
	79

	 
	16.2
	Third Parties
	79

	17.
	Representations, Warranties and Undertakings
	79

	 
	17.1
	Representations and Warranties of Buyer
	79

	 
	17.2
	Representations and Warranties of Seller
	80

	 
	17.3
	Business Practices
	80

	18.
	Exchange of Information
	80

	19.
	Confidentiality
	81

	 
	19.1
	Duty of Confidentiality
	81

	 
	19.2
	Permitted Disclosures
	81

	 
	19.3
	Duration of Confidentiality
	83

	20.
	Default and Termination
	83

	 
	20.1
	Termination Events
	83

	 
	20.2
	Termination
	84

	 
	20.3
	Survival
	85

	21.
	Dispute Resolution and Governing Law
	85

	 
	21.1
	Dispute Resolution
	85

	 
	21.2
	Expert Determination
	88

	 
	21.3
	Governing Law
	89

	 
	21.4
	Immunity
	89

	22.
	Assignments
	90

	 
	22.1
	Merger, Consolidation
	90

	 
	22.2
	Assignment by Buyer
	90

	 
	22.3
	Assignments by Seller
	91

	 
	22.4
	Seller Financing
	92

	23.
	Contract Language
	93

	24.
	Miscellaneous
	93

	 
	24.1
	Disclaimer of Agency
	93

	 
	24.2
	Entire Agreement
	93

	 
	24.3
	Third Party Beneficiaries
	93

	 
	24.4
	Amendments and Waiver
	93

	 
	24.5
	Exclusion
	94

3

	
				
	 
	24.6
	Further Assurances
	94

	 
	24.7
	Severability
	94

	25.
	Notices
	94

	 
	25.1
	Form of Notice
	94

	 
	25.2
	Effective Time of Notice
	95

	26.
	Business Practices
	96

	 
	26.1
	Trade Law Compliance
	96

	 
	26.2
	Use of LNG
	96

	 
	26.3
	Prohibited Practices
	96

	 
	26.4
	Records; Audit
	97

	 
	26.5
	Indemnity
	97

	
		
	 
	 

	Exhibit A
	Measurements

	Exhibit B
	Form of Port Liability Agreement

	Exhibit C
	Form of Guaranty

	Exhibit D
	Form of Direct Agreement

4

LNG SALE AND PURCHASE AGREEMENT
THIS LNG SALE AND PURCHASE AGREEMENT (“Agreement”) is made and entered into as of 17 July 2014 (the “Effective Date”), by and between Corpus Christi Liquefaction, LLC, a Delaware limited liability company whose principal place of business is located at 700 Milam St., Suite 800, Houston, TX 77002 (U.S.A.) (“Seller” or “CCLNG”), and Électricité de France, S.A., a company registered in France whose principal place of business is located at 20 Place de la Défense, 92000 Paris-La Défense, France (“Buyer”).  Buyer and Seller are each referred to herein as a “Party” and collectively as the “Parties”.
Recitals
		
	(1)
	Seller is developing and intends to construct, own and operate a liquefied natural gas (“LNG”) facility, including up to three (3) modules, each capable of producing approximately four decimal two (4.2) million metric tonnes per annum of LNG, port and marine facilities, and related facilities in San Patricio and Nueces Counties, Texas, in the vicinity of Portland, Texas, on the La Quinta Channel in the Corpus Christi Bay;

		
	(2)
	Buyer desires to be engaged in the purchase of LNG at the Corpus Christi Facility and transportation of such LNG to one or more Discharge Terminals; and

		
	(3)
	Seller and Buyer have agreed to execute a definitive agreement setting out the Parties’ respective rights and obligations in relation to the sale and purchase of LNG.

It is agreed:
		
	1.
	Definitions and Interpretation

		
	1.1
	Definitions

The words and expressions below shall, unless the context otherwise requires, have the meanings respectively assigned to them:
		
	AAA:
	as defined in Section 21.1.2;

		
	Acceptable Credit Rating:
	two (2) Credit Ratings that are each equal to or better than the following: (i) Baa3 by Moody’s Investors Service, Inc., (ii) BBB- by Standard & Poor’s Rating Services, a division of McGraw-Hill Companies, (iii) BBB- by Fitch Ratings, Inc., or (iv) any comparable Credit Ratings by any other nationally recognized statistical rating organizations registered with the U.S. Securities and Exchange Commission, including any successors to Moody’s Investors Service, Inc., Standard & Poor’s Rating Services, or Fitch Ratings, Inc.;

5

		
	Acceptable Guarantor:
	an Affiliate of Buyer that has an Acceptable Credit Rating;

		
	ACQ:
	as defined in Section 5.1.1;

		
	Actual Laytime:
	as defined in Section 7.12.2;

Adjusted Annual Contract Quantity
		
	or AACQ:
	as defined in Section 5.2;

		
	Adverse Weather Conditions:
	weather or sea conditions actually experienced at or near the Corpus Christi Facility that are sufficiently severe: (i) to prevent an LNG Tanker from proceeding to berth, or loading or departing from berth, in accordance with one or more of the following: (a) regulations published by a Governmental Authority; (b) an Approval; or (c) an order of a Pilot; (ii) to cause an actual determination by the master of an LNG Tanker that it is unsafe for such LNG Tanker to berth, load, or depart from berth; or (iii) to prevent or severely limit the production capability of the Corpus Christi Facility;

		
	Affiliate:
	with respect to any Person, any other Person which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with such Person; for purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the direct or indirect ownership of fifty percent (50%) or more of the voting rights in a Person or the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or otherwise;

		
	Agreement:
	this agreement, including the Exhibits hereto, as the same may be amended, modified or replaced from time to time;

		
	Allotted Laytime:
	as defined in Section 7.12.1;

		
	Annual Delivery Program or ADP:
	as defined in Section 8.2.3;

		
	Applicable Laws: 
	in relation to matters covered by this Agreement, all applicable laws, statutes, rules, regulations, 

6

ordinances, codes, standards and rules of common law, and judgments, decisions, interpretations, orders, directives, injunctions, writs, decrees, stipulations, or awards of any applicable Governmental Authority or duly authorized official, court or arbitrator thereof, in each case, now existing or which may be enacted or issued after the Effective Date;
		
	Approvals:
	any and all permits (including work permits), franchises, authorizations, approvals, grants, licenses, visas, waivers, exemptions, consents, permissions, registrations, decrees, privileges, variances, validations, confirmations or orders granted by or filed with any Governmental Authority, including the Export Authorizations;

		
	Bankruptcy Event:
	with respect to any Person: (i) such Person’s suspension of payment of, or request to any court for a moratorium on payment of, all or a substantial part of such Person’s debts, (ii) such Person’s making of a general assignment or any composition with or for the benefit of its creditors except to the extent otherwise permitted by Section 22, (iii) any filing, or consent by answer by such Person to the filing against it, of a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, or (iv) any order under the bankruptcy or insolvency laws of any jurisdiction: (a) entered for the winding up, bankruptcy, liquidation, dissolution, custodianship or administration with respect to such Person or any substantial part of such Person’s property; (b) constituting an order for relief with respect to such Person; (c) approving a petition for relief or reorganization or any other petition in bankruptcy or insolvency law with respect to such Person; or (d) approving any petition filed in bankruptcy or insolvency law against such Person;

		
	Bridging Period:
	as defined in Section 4.6.1;

		
	Bridging Start Date:
	as defined in Section 4.6.1;

		
	Bridging Volume:
	as defined in Section 4.6.2;

7

		
	Btu:
	the amount of heat equal to one thousand fifty-five decimal zero five six (1,055.056) Joules;

		
	Business Day:
	any Day (other than Saturdays, Sundays and national holidays in the United States of America) on which commercial banks are normally open to conduct business in the United States of America;

		
	Buyer:
	as defined in the Preamble;

		
	Buyer Taxes:
	as defined in Section 11.3;

		
	Cargo DoP Payment:
	as defined in Section 5.6.2;

		
	Cargo DoP Quantity:
	as defined in Section 5.6.2;

		
	Cargo Shortfall Quantity:
	as defined in Section 5.5.2;

		
	CCLNG:
	as defined in the Preamble; 

		
	Claim: 
	all claims, demands, legal proceedings, or actions that may exist, arise, or be threatened currently or in the future at any time following the Effective Date, whether or not of a type contemplated by any Party, and whether based on federal, state, local, statutory or common law or any other Applicable Law;

		
	Composite ADP: 
	as defined in Section 8.2.4;

		
	Conditions Precedent:
	as defined in Section 2.2.1;

		
	Confidential Information:
	as defined in Section 19.1;

		
	Connecting Pipeline:
	any pipeline as may be directly interconnected to the Corpus Christi Facility, including the Corpus Christi Pipeline;

		
	Contract Year:
	as defined in Section 4.5;

		
	Corpus Christi Facility:
	the facilities that CCLNG intends to develop, own and operate (or have operated on its behalf) in San Patricio  and Nueces Counties, Texas, in the vicinity of Portland, Texas, on the La Quinta Channel in the Corpus Christi Bay, including the Gas pretreatment and processing facilities, liquefaction facility, storage tanks, utilities, terminal facilities, and associated port and marine facilities, and all other related facilities both inside and outside the LNG plant, inclusive of the Designated Train and all other Trains;

8

Corpus Christi Marine Operations Manual:  as defined in Section 7.8;
		
	Corpus Christi Pipeline:
	that certain Gas pipeline, intended to be constructed, owned and operated by Cheniere Corpus Christi Pipeline, L.P., which will interconnect the Corpus Christi Facility with interstate and intrastate Gas pipelines in Texas;

		
	Cover Damages:
	as defined in Section 5.5.3(a);

		
	CP Deadline:
	as defined in Section 2.2.3;

		
	CP Fulfillment Date:
	as defined in Section 2.2.2;

		
	Credit Rating:
	a credit rating in respect of the senior, unsecured, long-term debt (not supported by third party credit enhancement) of a Person;

		
	CSP:
	as defined in Section 9.1.1;

		
	Cubic Meter:
	in relation to Gas, the quantity of dry ideal Gas, at a temperature of fifteen (15) degrees Celsius and a pressure of one hundred one decimal three two five (101.325) kilopascals absolute contained in a volume of one (1) cubic meter;

Date of First 
		
	Commercial Delivery or DFCD:
	as defined in Section 4.2;

		
	Day:
	a period of twenty-four (24) consecutive hours starting at 00:00 hours local time in San Patricio County, Texas;

		
	Delivery Point:
	as defined in Section 6.1;

		
	Delivery Window:
	a twenty-four (24) hour period starting at 6:00 a.m. Central Time on a specified Day and ending twenty-four (24) consecutive hours thereafter that is allocated to Buyer under the ADP or Ninety Day Schedule, as applicable;

		
	Demurrage Event:
	as defined in Section 7.12.3;

9

		
	Designated Train:
	the third (3rd) Train that is commercially operable, as determined in accordance with Section 4.4; 

		
	Direct Agreement:
	as defined in Section 22.4.2;

		
	Discharge Terminal:
	with respect to each cargo of LNG taken or scheduled to be taken by Buyer pursuant to this Agreement, the facilities intended by Buyer to be utilized for the unloading, reception, discharge, storage, treatment (if necessary), and regasification of the LNG and the processing and send-out of Gas or regasified LNG, and other relevant infrastructure, including marine facilities (such as breakwaters and tugs) for the safe passage to berth of LNG Tankers, terminal facilities for the berthing and discharging of LNG Tankers, LNG storage tanks and the regasification plant as specified in the ADP or Ninety Day Schedule, as applicable;

		
	Dispute:
	any dispute or difference of whatsoever nature arising under, out of, in connection with or in relation (in any manner whatsoever) to this Agreement or the subject matter of this Agreement, including (a) any dispute or difference concerning the initial or continuing existence of this Agreement or any provision of it, or as to whether this Agreement or any provision of it is invalid, illegal or unenforceable (whether initially or otherwise); or (b) any dispute or claim which is ancillary or connected, in each case in any manner whatsoever, to the foregoing;

		
	Effective Date:
	as defined in the Preamble;

		
	EPC Contract:
	that certain Engineering Procurement and Construction Contract entered into by Seller for the construction of the Designated Train;

		
	ETA:
	with respect to an LNG Tanker, the estimated time of arrival of such LNG Tanker at the PBS;

		
	Expert:
	a Person agreed upon or appointed in accordance with Section 21.2.1;

		
	Export Authorizations:
	the FTA Export Authorization and the Non-FTA Export Authorization, either individually or together (as the context requires);

10

		
	FID:
	as defined in Section 2.2.1(c);

		
	Final Contract Year:
	as defined in Section 4.5(b);

		
	Final Window Period:
	as defined in Section 4.2.4;

		
	First Contract Year:
	as defined in Section 4.5(a);

		
	First Window Period:
	as defined in Section 4.2.1;

		
	Force Majeure:
	as defined in Section 14.1;

		
	Foundation Customer:
	(a) Buyer; and (b) any other customer of Seller, that enters into an LNG purchase agreement with an annual contract quantity of no less than zero decimal seven (0.7) million metric tonnes per annum of LNG on a firm basis from the Corpus Christi Facility, with a minimum term of twenty (20) years;

		
	Foundation Customer Priority:
	as defined in Section 14.7;

		
	FTA Export Authorization:
	an order from the Office of Fossil Energy of the U.S. Department of Energy granting to Seller, or an Affiliate of Seller, the long-term authorization to export at least the volume per annum of LNG sold and delivered pursuant to this Agreement by vessel from the Corpus Christi Facility to countries that have entered into a free trade agreement with the United States of America requiring the national treatment for trade in natural gas, for a term which is at least twenty (20) years, as the same may be supplemented, amended, modified, changed, superseded or replaced from time to time;

		
	Gas:
	any hydrocarbon or mixture of hydrocarbons consisting predominantly of methane that is in a gaseous state;

		
	Governmental Authority:
	any national, regional, state, or local government, or any subdivision, agency, commission or authority thereof (including any maritime authorities, port authority or any quasi-governmental agency), having jurisdiction over a Party (or any Affiliate or direct or indirect owner thereof), a Connecting Pipeline, Gas in a Connecting Pipeline or the Corpus Christi Facility, the Corpus Christi Facility, LNG in the Corpus Christi Facility, an LNG Tanker, a Transporter, the last disembarkation port of an LNG Tanker, a 

11

Discharge Terminal, or any Gas pipeline which interconnects with a Connecting Pipeline and which transports Gas to or from a Connecting Pipeline, as the case may be, and acting within its legal authority;
		
	Gross Heating Value:
	the quantity of heat expressed in Btu produced by the complete combustion in air of one (1) cubic foot of anhydrous gas, at a temperature of sixty (60) degrees Fahrenheit and at an absolute pressure of fourteen decimal six nine six (14.696) pounds per square inch, with the air at the same temperature and pressure as the gas, after cooling the products of the combustion to the initial temperature of the gas and air, and after condensation of the water formed by combustion;

		
	Guarantor:
	any Acceptable Guarantor executing a Guaranty for delivery to Seller hereunder; 

		
	Guaranty:
	an irrevocable payment guaranty, in the form attached as Exhibit C hereto, which is executed by a Guarantor in favor of Seller; 

		
	HH:
	the final settlement price (in USD per MMBtu) for the New York Mercantile Exchange’s Henry Hub natural gas futures contract for the Month in which the relevant cargo’s Delivery Window is scheduled to begin;

		
	ICC:
	as defined in Section 21.2.1;

		
	Indemnified Party:
	as defined in Section 15.4(a);

		
	Indemnifying Party:
	as defined in Section 15.4(a);

		
	International LNG Terminal Standards:
	to the extent not inconsistent with the express requirements of this Agreement, the international standards and practices applicable to the design, construction, equipment, operation or maintenance of LNG liquefaction terminals, established by the following (such standards to apply in the following order of priority): (i) a Governmental Authority having jurisdiction over the Corpus Christi Facility, Seller, or Seller’s operator; (ii) the Society of International Gas Tanker and Terminal Operators (to the extent applicable); and (iii) any other internationally recognized non-governmental agency or organization with whose standards and practices it 

12

is customary for Reasonable and Prudent Operators of LNG liquefaction terminals, to comply, provided, however, that in the event of a conflict between any of the priorities noted above, the priority with the lowest roman numeral noted above shall prevail;
		
	International LNG Vessel Standards:
	the standards and practices from time to time in force applicable to the ownership, design, equipment, operation or maintenance of LNG vessels established by: (i) the International Maritime Organization; (ii) the Oil Companies International Marine Forum (OCIMF); (iii) the Society of International Gas Tanker and Terminal Operators (SIGTTO) (or any successor body of the same); (iv) the International Navigation Association (PIANC); (v) the International Association of Classification Societies; and (vi) any other internationally recognized agency or non-governmental organization with whose standards and practices it is customary for Reasonable and Prudent Operators of LNG vessels similar to those applicable to this Agreement, to comply, provided, however, that in the event of a conflict between any of the priorities noted above, the priority with the lowest roman numeral noted above shall prevail;

		
	International Standards: 
	(i) with respect to Buyer, the International LNG Vessel Standards; (ii) with respect to Seller, the International LNG Terminal Standards;

		
	In-Transit Final Notice:
	as defined in Section 7.9.3(d);

		
	In-Transit First Notice:
	as defined in Section 7.9.2;

		
	In-Transit Second Notice:
	as defined in Section 7.9.3(a);

		
	In-Transit Third Notice:
	as defined in Section 7.9.3(c);

		
	Lender:
	any Person, other than a shareholder of either Party, duly authorized in its principal place of business to lend monies, to finance or to provide financial support in any form in respect of the Corpus Christi Facility, including any export credit agency, funding agency, bondholder, insurance agency, underwriter, or similar institution in relation to the provision of finance or financial support;

		
	Lenders’ Agent:
	as defined in Section 22.4.1;

13

		
	LIBOR:
	on or from any Day, the percentage rate per annum published two (2) London Banking Days before that Day (or, if that Day is not a London Banking Day, published two (2) London Banking Days before the nearest preceding London Banking Day) at 11:00 a.m. London time, by the British Bankers Association that appears on the Reuters Screen LIBOR01 page as three (3) Month USD LIBOR or, if no such rate is published, such other rate representing the cost of three (3) Month USD funds in the London interbank lending market on that Day as reasonably agreed by the Parties;

		
	LNG:
	Gas in a liquid state at or below its point of boiling and at or near atmospheric pressure;

		
	LNG Tanker(s):
	an ocean-going vessel suitable for transporting LNG which complies with the requirements of this Agreement and which Buyer uses, or intends to use, in connection with this Agreement;

		
	Loading Port:
	the port where the Corpus Christi Facility is located, in the vicinity of Portland, Texas, or the port at an alternate supply source pursuant to Section 3.1.2;

		
	London Banking Day:
	any Day (other than Saturdays, Sundays and national holidays in London, England) on which banks are normally open to conduct business in London, England;

		
	Loss:
	any and all losses, liabilities, damages, costs, judgments, settlements and expenses (whether or not resulting from Claims by Third Parties), including interest and penalties with respect thereto and reasonable attorneys’ and accountants’ fees and expenses;

		
	Major Scheduled Maintenance Quantity:
	as defined in Section 5.4.1;

		
	Measurement Dispute:
	as defined in Section 21.2.1;

		
	Mitigation Sale:
	as defined in Section 5.5.3(b);

		
	MMBtu:
	one million (1,000,000) Btus;

		
	Month:
	each period of time which starts at 00:00 local time in Portland, Texas on the first Day of each calendar month and ends at 24:00 local time in Portland, Texas, on the last Day of the same calendar month;

14

		
	Ninety Day Schedule:
	as defined in Section 8.4;

		
	Non-FTA Export Authorization:
	an order from the Office of Fossil Energy of the U.S. Department of Energy granting to Seller, or an Affiliate of Seller, the long-term authorization to export at least the volume per annum of LNG sold and delivered pursuant to this Agreement by vessel from the Corpus Christi Facility, to all countries that have not entered into a free trade agreement with the United States of America requiring the national treatment for trade in natural gas, which currently has or in the future develops the capacity to import LNG, and with which trade is not prohibited by United States law or policy, for a term which is at least twenty (20) years, as the same may be supplemented, amended, modified, changed, superseded or replaced from time to time;

		
	Notice of Readiness or NOR:
	the notice of readiness issued by an LNG Tanker in accordance with Section 7.10.1;

		
	Off-Spec LNG:
	as defined in Section 12.3.1;

		
	Operational Tolerance:
	as defined in Section 5.5.3(c);

		
	P&I Club:
	a Protection and Indemnity Club that is a member of the International Group of P&I Clubs;

		
	P&I Insurance:
	as defined in Section 15.6(b);

		
	Party:
	Buyer or Seller, and Parties means both Buyer and Seller;

		
	Payment Business Day:
	as defined in Section 10.2.8;

		
	Payor:
	as defined in Section 11.4;

		
	PBS:
	the customary Pilot boarding station at the Loading Port where the Pilot boards the LNG Tanker, as determined by the applicable Governmental Authority or other entity with authority to regulate transit and berthing of vessels at the Loading Port;

15

		
	Person:
	any individual, corporation, partnership, trust, unincorporated organization or other legal entity, including any Governmental Authority;

		
	Pilot:
	any Person engaged by Transporter to come on board the LNG Tanker to assist the master in pilotage, mooring and unmooring of such LNG Tanker;

		
	Port Charges:
	all charges of whatsoever nature (including rates, tolls, dues, fees, and imposts of every description) in respect of an LNG Tanker entering or leaving the Loading Port or loading LNG, including wharfage fees, in-and-out fees, franchise fees, line handling charges, and charges imposed by fire boats, tugs and escort vessels, the U.S. Coast Guard, a Pilot, and any other authorized Person assisting an LNG Tanker to enter or leave the Loading Port, and further including port use fees, throughput fees and similar fees payable by users of the Loading Port (or by Seller or its operator on behalf of such users);

		
	Port Liability Agreement:
	an agreement for use of the port and marine facilities located at the Loading Port, to be entered into as described in Section 7.7.1, in the form attached in Exhibit B hereto as may be amended pursuant to Section 7.7.4;

		
	Prorated Bridging Volume:
	as defined in Section 4.6.2;

		
	Provisional Invoice:
	as defined in Section 10.1.8(a);

		
	Reasonable and Prudent Operator:
	a Person seeking in good faith to perform its contractual obligations, and in so doing, and in the general conduct of its undertaking, exercising that degree of skill, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator, complying with all applicable International Standards and practices and regulations and approvals of Governmental Authorities, engaged in the same type of undertaking under the same or similar circumstances and conditions;

		
	Round-Down Quantity:
	as defined in Section 5.3.2;

16

		
	Round-Up Quantity:
	as defined in Section 5.3.1;

		
	Rules:
	as defined in Section 21.1.2;

		
	SCF:
	for Gas, the quantity of anhydrous Gas that occupies one (1) cubic foot of space at a temperature of sixty (60) degrees Fahrenheit and a pressure of fourteen decimal six nine six (14.696) pounds per square inch absolute;

		
	Scheduled Cargo Quantity:
	the quantity of LNG (in MMBtus) identified in the ADP or Ninety Day Schedule to be loaded onto an LNG Tanker in a Delivery Window in accordance with Section 8;

		
	Second Train:
	the second (2nd) Train that is commercially operable, as determined in accordance with Section 4.4;

		
	Second Window Period:
	as defined in Section 4.2.2;

		
	Seller:
	as defined in the Preamble;

		
	Seller Aggregate Liability:
	as defined in Section 15.2.6(b);

		
	Seller Liability Cap:
	as defined in Section 15.2.6(c);

		
	Seller Taxes:
	as defined in Section 11.2;

		
	SI:
	the International System of Units;

		
	Specifications:
	as defined in Section 12.1.1;

		
	Suspension Fee:
	as defined in Section 5.7.2;

		
	Term:
	as defined in Section 4.1.1;

		
	Terminating Party:
	as defined in Section 20.2.1;

		
	Termination Events:
	as defined in Section 20.1;

		
	Third Party:
	a Person other than a Party;

		
	Third Party Claim:
	as defined in Section 15.4(a);

		
	Third Window Period:
	as defined in Section 4.2.3;

		
	Train:
	an LNG production train located at the Corpus Christi Facility, including those facilities included in the Corpus Christi Facility that are necessary to enable 

17

Seller to fulfill its obligations to Buyer from such LNG production train;
		
	Transporter:
	any Person who is a registered or disponent owner of, or any Person who contracts with the same or with Buyer for the purposes of providing, operating, or chartering any of the LNG Tankers;

		
	USD or US$:
	the lawful currency from time to time of the United States of America; 

		
	X0:
	the constant applicable on the Effective Date and equal to USD three decimal fifty per MMBtu (US$3.50/MMBtu); and

		
	Xy:
	the constant applicable for a given Contract Year expressed in USD per MMBtu and calculated in accordance with Section 9.1.2.

		
	1.2
	Interpretation

For purposes of this Agreement:
		
	1.2.1
	The titles, headings, and numbering in this Agreement are included for convenience only and will have no effect on the construction or interpretation of this Agreement.

		
	1.2.2
	References in this Agreement to Sections and Exhibits are to those of this Agreement unless otherwise indicated.  References to this Agreement and to agreements and contractual instruments will be deemed to include all exhibits, schedules, appendices, annexes, and other attachments thereto and all subsequent amendments and other modifications to such instruments, to the extent such amendments and other modifications are not prohibited by the terms of this Agreement.

		
	1.2.3
	The word “include” or “including” will be deemed to be followed by “without limitation.”  The term “will” has the same meaning as “shall,” and thus imposes an obligation.

		
	1.2.4
	Whenever the context so requires, the singular includes the plural and the plural includes the singular, and the gender of any pronoun includes the other gender.

		
	1.2.5
	Unless otherwise indicated, references to any statute, regulation or other law will be deemed to refer to such statute, regulation or other law as amended or any successor law.

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	1.2.6
	All references to a Person shall include such Person’s successors and permitted assigns.

		
	1.2.7
	Unless otherwise indicated, any reference to a time of Day shall be to Central Time in the United States of America.

		
	1.2.8
	Approximate conversions of any unit of measurement contained in parenthesis following the primary unit of measurement included in Sections 1 through 26 of this Agreement are inserted as a matter of operational convenience only to show the approximate equivalent in such different measurement.  The obligations of the Parties under Sections 1 through 26 of this Agreement will be undertaken in respect of the primary unit of measurement and not in respect of any such approximate conversion.

		
	1.3
	Replacement of Rates and Indices No Longer Available

		
	1.3.1
	If (a) a publication that contains a rate or index used in this Agreement ceases to be published for any reason or (b) such a rate or index ceases to exist, is materially modified, or no longer is used as a liquid trading point for Gas (as applicable), so as systematically to change its economic result, or is disaggregated, displaced or abandoned, for any reason, the Parties shall promptly discuss, with the aim of jointly selecting a rate or index or rates or indices to be used in place of such rates and indices that maintains the intent and economic effect of those original rates or indices.

		
	1.3.2
	If the Parties fail to agree on a replacement rate or index within thirty (30) Days, the Parties may submit such issue to an Expert pursuant to Section 21.2, as amended by the provisions of this Section 1.3.2. Any Expert selected shall be instructed to select the published rate or index, or a combination of published rates or indices, with adjustments as necessary or appropriate, that most nearly preserves the intent and economic result of the original rates or indices. If the Parties are not able to agree upon an Expert within ten (10) Days after the receipt of the notice of request for expert determination, either Party may elect to refer the determination of the replacement rate or index for arbitration in accordance with Section 21.1.

		
	1.3.3
	If any rate used in this Agreement is not published for a particular date, but the publication containing such rate continues to be published and the rate itself continues to exist, the Parties shall use the published rate in effect for the date such rate was most recently published prior to the particular date, unless otherwise provided in this Agreement.

		
	1.3.4
	If any index used in this Agreement is not published for a particular date, but the publication containing such index continues to be published and the index itself continues to exist, the Parties shall use the index from the

19

geographic location closest in proximity to the unpublished index from the same publication in effect for the particular date adjusted by the difference between the same indices from the most recent publication published prior to the particular date, unless otherwise provided in this Agreement.
		
	1.3.5
	If an incorrect value is published for any rate or index used in this Agreement and such error is corrected and published within ninety (90) Days of the date of the publication of such incorrect rate or index, such corrected rate or index will be substituted for the incorrect rate or index and any calculations involving such rate or index will be recalculated and the Parties will take any necessary actions based upon these revised calculations, including adjustments of amounts previously invoiced and/or paid.

		
	2.
	Approvals and Conditions Precedent

		
	2.1
	Approvals

		
	2.1.1
	Except as may be excused by Force Majeure (a) Seller or an Affiliate of Seller shall obtain and maintain, or cause to be obtained and maintained, in force the Export Authorizations at all times commencing no later than the CP Deadline, (b) Seller shall secure sufficient rights to benefit from the Export Authorizations commencing no later than the CP Deadline, and (c) in case either of the Export Authorizations is to expire before the expiration of the Term, Seller or an Affiliate of Seller shall use its reasonable efforts to obtain one or more extensions of the same in aggregate up to or beyond the end of the Term.  Buyer and Seller shall use reasonable efforts to obtain and maintain in force, and shall use reasonable efforts to cause its Affiliates to obtain and maintain in force, the other Approvals (other than the Export Authorizations) which are required for the performance of this Agreement, and shall cooperate fully with each other whenever necessary for this purpose.

		
	2.1.2
	If the laws of the United States of America do not require maintenance of or compliance with one or both Export Authorization(s) to export LNG from the United States of America, then for so long as the laws of the United States of America do not require such maintenance or compliance, the Parties agree that this Agreement shall be read and construed to omit those provisions of this Agreement relating to such affected Export Authorization(s) and neither Party shall have any rights or obligations (including obligations to maintain such affected Export Authorization(s), rights to terminate this Agreement and claims of Force Majeure) in respect of any such Export Authorization(s). 

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	2.2
	Conditions Precedent

		
	2.2.1
	The Parties recognize and agree that this Agreement (other than the provisions of this Section 2.2 and Sections 1, 2.1, 4.1, 14.1 to 14.6, and 15 to 26, which shall all be in full force and effect as of the Effective Date) shall not become effective unless and until each of the following conditions precedent (the “Conditions Precedent”) have been satisfied or waived:

		
	(a)
	Seller has received all Approvals required to construct and operate the Designated Train and any new or modified existing facilities at the Corpus Christi Facility needed to enable Seller to fulfill its obligations under this Agreement (not including any Approvals which will not be issued until after construction is commenced);

		
	(b)
	Seller has secured the necessary financing arrangements to construct and operate the Corpus Christi Facility and any facilities related thereto in respect of the Designated Train;

		
	(c)
	Seller has taken a positive final investment decision in respect of the Designated Train and any other facilities at the Corpus Christi Facility needed to enable Seller to fulfill its obligations under this Agreement (“FID”), in its sole discretion, to construct the liquefaction facilities and to construct any other required facilities, in relation to the addition of any liquefaction facilities in respect of the Designated Train; 

		
	(d)
	Seller or an Affiliate of Seller has obtained the FTA Export Authorization and the Non-FTA Export Authorization and Seller has secured sufficient rights to benefit therefrom; 

		
	(e)
	the Approvals required for Seller or an Affiliate of Seller to export LNG from the Designated Train are in full force and effect; and

		
	(f)
	Seller has issued to the Person primarily responsible for construction of the Designated Train and any other facilities at the Corpus Christi Facility needed to enable Seller to fulfill its obligations under this Agreement, an unconditional full notice to proceed with the construction of Designated Train and any other facilities at the Corpus Christi Facility needed to enable Seller to fulfill its obligations under this Agreement.

		
	2.2.2
	Promptly upon satisfaction of each of the Conditions Precedent, Seller shall notify Buyer of such satisfaction.  Except in respect of the Condition Precedent set forth in Section 2.2.1(d) which can be waived only by agreement of both Parties, satisfaction of each Condition Precedent can be waived only by Seller upon notice to Buyer.  The date that the last of the Conditions Precedent is fulfilled or waived shall be the “CP Fulfillment 

21

Date”.  At Buyer’s request, Seller shall meet with Buyer on a reasonably frequent basis (but not less than one meeting every three (3) Months) to advise Buyer on the progress of the satisfaction of each of the Conditions Precedent.
		
	2.2.3
	Seller shall endeavor in good faith to satisfy or procure the satisfaction of each Condition Precedent by June 30, 2015 (as may be revised in accordance with Section 2.2.4, the “CP Deadline”).

		
	2.2.4
	If any Condition Precedent is not satisfied by the CP Deadline (as such CP Deadline may be revised pursuant to this Section 2.2.4), in circumstances other than where it has been waived in accordance with Section 2.2.2, Seller shall give notice to that effect to Buyer and, if requested by Buyer, shall provide an explanation of the reason for the delay in satisfaction of the Conditions Precedent and the revised date by which it is reasonably expected that all Conditions Precedent will be satisfied.  If the Parties agree in writing to change the deadline for satisfaction of the Conditions Precedent to the revised date notified by Seller or another later date, such revised date shall be deemed the CP Deadline for all purposes of this Agreement.

		
	2.2.5
	If any Condition Precedent has been neither satisfied nor waived by the CP Deadline (as such CP Deadline may be revised pursuant to Section 2.2.4), then at any time after such CP Deadline either Party may give to the other Party a notice of termination of this Agreement.  Such notice of termination shall be effective in accordance with Section 20.2 if any Condition Precedent remains neither satisfied nor waived prior to such date.

		
	3.
	Subject Matter

		
	3.1
	Sale and Purchase

		
	3.1.1
	Seller shall sell and make available for delivery, or compensate Buyer if not made available for delivery, LNG in cargoes at the Delivery Point, and Buyer shall take and pay for, or compensate Seller if not taken, such LNG, in the quantities and at the prices set forth in and otherwise in accordance with and subject to the provisions of this Agreement.

		
	3.1.2
	Seller intends to load cargoes from the Corpus Christi Facility, but, subject to the prior written consent of Buyer (such consent not to be unreasonably withheld), Seller may deliver cargoes to Buyer from any alternate source; provided, that:

		
	(a)
	LNG from such alternate source shall, when made available by Seller to Buyer, comply with the Specifications;

22

		
	(b)
	Seller has agreed to reimburse Buyer an amount equal to Buyer’s reasonable estimate of the increased costs that would be incurred as a result of the delivery of LNG at such alternate source;

		
	(c)
	the delivery of LNG at an alternate source is necessitated by operational conditions affecting the Corpus Christi Facility that have reduced the capability of the Corpus Christi Facility to produce or load LNG;

		
	(d)
	the receipt of LNG at an alternate source will not affect the ability of LNG Tankers to perform other cargo receipts and deliveries in a timely fashion;

		
	(e)
	the facilities at the alternate source are compatible with LNG Tankers;  

		
	(f)
	any other condition reasonably imposed by Buyer has been satisfied by Seller to Buyer's reasonable satisfaction; and

		
	(g)
	the alternate source and the voyage thereto do not present added risks or dangers to any LNG Tanker or personnel of Buyer or any Affiliate of Buyer.

		
	3.1.3
	If the alternate source proposed by Seller is located in the United States of America Gulf Coast, then the conditions set forth in Sections 3.1.2(c) and (f) above shall not apply.

		
	3.1.4
	Subject to Section 3.1.2(b), all savings, profits and optimizations realized by Seller as a result of delivering cargoes from an alternate source shall remain for the benefit of Seller without profit sharing.

		
	3.2
	Facilities

		
	3.2.1
	During the period from the Effective Date and continuing through the Date of First Commercial Delivery, Seller shall proceed diligently to construct, test, commission, maintain and operate the Corpus Christi Facility in accordance with the standards and specifications set forth in Section 7.2.2, or cause same to occur, so as to enable Seller to fulfill its obligations to Buyer under this Agreement.

		
	3.2.2
	Subject to Section 2.1.1, Seller covenants that, acting as a Reasonable and Prudent Operator, it shall at all relevant times from the Date of First Commercial Delivery and continuing throughout the Term own, or have access to and use of, and maintain and operate or cause to be maintained and operated, consistent with International Standards and subject to all Applicable Laws, the Corpus Christi Facility so as to enable Seller to fulfill its obligations to Buyer under this Agreement.

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	3.3
	Destination

Subject to Section 26.1 and notwithstanding the Discharge Terminal corresponding to any cargo in the ADP or Ninety Day Schedule, Buyer shall be free to (i) sell such LNG free on board at the Corpus Christi Facility or at any other point during a voyage, or at or after the unloading of any LNG purchased hereunder and (ii) transport the LNG to, and market the LNG at, any destination of its choosing, in accordance with the provisions of this Agreement.
		
	4.
	Term

		
	4.1
	Term

		
	4.1.1
	Term.  This Agreement shall enter into force and effect as set forth in Section 2.2.1 and, subject to Section 20, shall continue in force and effect until the twentieth (20th) anniversary of the Date of First Commercial Delivery, unless extended pursuant to Section 4.1.2 (the “Term”).

		
	4.1.2
	Extension of Term.

		
	(a)
	On or before the seventeenth (17th) anniversary of the Date of First Commercial Delivery, Buyer may, by notice to Seller, extend the Term of this Agreement as to any portion of the ACQ by a period of up to ten (10) years beyond the initial twenty (20) years as set forth in Section 4.1.1, provided that:

		
	(i)
	(x) the sum of the portion of the ACQ that Buyer has elected to extend, and the ACQs of all other customers purchasing LNG or liquefaction services from the Corpus Christi Facility at all times during the extension period elected by Buyer is equal to or greater than one hundred eighty-two million five hundred thousand (182,500,000) MMBtu, or (y) Buyer agrees to increase its ACQ during the extension period elected by Buyer such that the sum of Buyer’s ACQ and the ACQs of all other customers purchasing LNG or liquefaction services from the Corpus Christi Facility during the extension period elected by Buyer is equal to or greater than one hundred eighty-two million five hundred thousand (182,500,000) MMBtu; and

		
	(ii)
	Seller or an Affiliate of Seller is able, by the exercise of reasonable efforts, to maintain in effect all Approvals, including LNG export licenses, necessary for the continued operation of the Corpus Christi Facility during the extension period elected by Buyer.

24

		
	(b)
	If Seller or an Affiliate of Seller is unable to maintain in effect all such Approvals during the entire extension period elected by Buyer, Seller shall inform Buyer of the period during which it can maintain such Approvals, and Buyer shall, by giving Seller notice no later than thirty (30) Days following receipt of Seller’s notice pursuant to this Section 4.1.2(b): (i) modify its election made pursuant to Section 4.1.2(a) such that the extension period is coincident with or less than the period during which Seller can maintain such Approvals or (ii) withdraw its election made pursuant to Section 4.1.2(a).

		
	(c)
	If the Term is extended pursuant to this Section 4.1.2, the Parties shall make such revisions to this Agreement as are necessary to give effect to such extension, including Sections 5.1.1, 5.4.1(e), and 7.16.1(a).

		
	4.2
	Date of First Commercial Delivery

The Day notified by Seller to Buyer on which Seller anticipates that the Designated Train will become commercially operable shall be the “Date of First Commercial Delivery”, which Day shall be determined by taking into account development and construction schedules, as set forth below.
		
	4.2.1
	The period that begins on the first Day of the Month that follows the date that is sixty (60) Months after the CP Fulfillment Date and ends four hundred and fifty (450) Days later shall be the “First Window Period”.

		
	4.2.2
	Seller shall notify Buyer, at least one hundred twenty (120) Days prior to the commencement of the First Window Period of a ninety (90) Day period falling within the First Window Period (“Second Window Period”) during which the Date of First Commercial Delivery shall occur, or, in the absence of notification by Seller in accordance with this Section 4.2.2, the Second Window Period shall be deemed to be the last ninety (90) Days of the First Window Period.

		
	4.2.3
	Seller shall notify Buyer at least ninety (90) Days prior to the commencement of the Second Window Period of a sixty (60) Day period falling within the Second Window Period (“Third Window Period”) during which the Date of First Commercial Delivery shall occur, or, in the absence of notification by Seller in accordance with this Section 4.2.3, the Third Window Period shall be deemed to be the last sixty (60) Days of the Second Window Period.

		
	4.2.4
	Seller shall notify Buyer at least sixty (60) Days prior to the commencement of the Third Window Period of a thirty (30) Day period falling within the Third Window Period (“Final Window Period”) during which the Date of First Commercial Delivery shall occur, or, in the absence of notification by Seller in accordance with this Section 4.2.4, the 

25

Final Window Period shall be deemed to be the last thirty (30) Days of the Third Window Period.
		
	4.2.5
	Seller shall notify Buyer at least forty-five (45) Days prior to the commencement of the Final Window Period of the Day within the Final Window Period which shall be the Date of First Commercial Delivery, or, in the absence of notification by Seller in accordance with this Section 4.2.5, the Date of First Commercial Delivery shall be deemed to be the last Day of the Final Window Period.

		
	4.2.6
	The Date of First Commercial Delivery shall be the date so notified pursuant to this Section 4.2, regardless of whether any LNG is scheduled for delivery to Buyer or whether any LNG is in fact so delivered.  Seller will provide non-binding good faith estimates of the Date of First Commercial Delivery from time to time, as credible and relevant information is available (but not less frequently than one (1) update every six (6) Months).  Each window period identified in this Section 4.2 may be extended, and the Date of First Commercial Delivery may be deferred on a Day-for-Day basis, in the event of Force Majeure affecting Seller that delays the Designated Train becoming commercially operable; provided that such extension or deferral shall not exceed four hundred fifty-five (455) Days.

		
	4.3
	Progress Reports

Buyer and Seller shall meet periodically (but in any event not less than once every sixty (60) Days) to discuss the progress of construction of the Designated Train.
		
	4.4
	Delayed Date of First Commercial Delivery

		
	4.4.1
	Notwithstanding Section 4.2 to the contrary, if the Designated Train has not become commercially operable by the last Day of the Final Window Period as specified in Section 4.2.4, the Date of First Commercial Delivery shall be the first Day on which the Designated Train is commercially operable, as notified by Seller.  

		
	4.4.2
	For all purposes of this Agreement, a Train shall not be considered “commercially operable” unless it has been commissioned, it is capable of delivering LNG in quantities sufficient and quality necessary to permit Seller to perform its obligations hereunder, and its obligations in respect of such Train to every other customer who has an LNG sale and purchase agreement for the purchase and export of LNG from such Train and such Train is constructed in compliance with Section 7.2.2.

		
	4.4.3
	If the Date of First Commercial Delivery does not occur within one hundred eighty (180) Days after the last Day of the Final Window Period (as such window period may have been extended pursuant to Section 4.2.6 due to 

26

Force Majeure), Buyer may elect to terminate this Agreement pursuant to Section 20.1.9 by delivering notice of such election to Seller no later than two hundred ten (210) Days after the last Day of the Final Window Period (as such window period may have been extended pursuant to Section 4.2.6 due to Force Majeure). 

		
	4.5
	Contract Year

References to a “Contract Year” mean a period of time from and including January 1st through and including December 31st of the same calendar year, provided that:
		
	(a)
	the first Contract Year is the period of time beginning on the Bridging Start Date and ending on December 31st of the same calendar year (the “First Contract Year”); and

		
	(b)
	the final Contract Year is the period of time beginning on the January 1st immediately preceding the final Day of the Term and ending on the final Day of the Term (the “Final Contract Year”).

		
	4.6
	Bridging Volumes

		
	4.6.1
	Beginning on the date on which the Second Train becomes commercially operable, as notified by Seller to Buyer, which shall be no earlier than the first date on which the date of first commercial delivery has occurred for each Foundation Customer with the Second Train as its designated train (“Bridging Start Date”), and ending on the earlier of (i) the Date of First Commercial Delivery, or (ii) the date of termination of this Agreement (the “Bridging Period”), Seller shall sell and make available for delivery, or compensate Buyer if not made available for delivery, and Buyer shall take and pay for, or compensate Seller if not taken, LNG in cargoes at the Delivery Point pursuant to the provisions of this Section 4.6.  Seller shall provide to Buyer notices on a good faith basis of the Bridging Start Date that reflect, mutatis mutandis, the dates for notices of the Date of First Commercial Delivery as set forth in Sections 4.2, 4.3 and 4.4; provided, however, that if the Second Train has not become commercially operable by the last Day of the final window period for the Second Train, the Bridging Start Date shall be the first Day on which the Second Train is commercially operable, as notified by Seller, and Section 4.4.3 shall not apply with respect to the Second Train.

		
	4.6.2
	The ACQ for any Contract Year which commences during the Bridging Period shall be an amount equal to twenty million (20,000,000) MMBtus (the “Bridging Volume”); provided, however, if such Contract Year does not begin on January 1st, or if the Bridging Period ends prior to December 31st of such Contract Year, then the Bridging Volume for such Contract Year 

27

shall be prorated and equal to twenty million (20,000,000) MMBtus multiplied by the number of Days in the Bridging Period in such Contract Year, divided by three hundred sixty-five (365) Days (or in the case of a leap year, three hundred sixty-six (366) Days) (the “Prorated Bridging Volume”).  Notwithstanding the foregoing, for any Contract Year during which the Date of First Commercial Delivery occurs, the ACQ for that Contract Year shall equal the Bridging Volume (or the Prorated Bridging Volume, as relevant) plus the ACQ determined pursuant to Section 5.1.1, as adjusted pursuant to Section 5.1.4.
		
	4.6.3
	Prior to the Date of First Commercial Delivery, Seller shall amend the ADP for the Contract Year that includes the Date of First Commercial Delivery to schedule cargoes resulting from the increase in the ACQ for such Contract Year determined pursuant to Section 4.6.2.  In amending such ADP, Seller shall solicit a proposed amended ADP from Buyer similar to that specified in Section 8.1.2, and such amended ADP promulgated by Seller shall reflect the exercise by Seller of reasonable efforts to assign to Buyer Delivery Windows that are as close as reasonably practicable to the Delivery Windows proposed by Buyer.  The provisions of Section 8.3 shall not apply to such ADP amendment, but shall apply with respect to any further amendment thereto.  Any Bridging Volume cargo scheduled for delivery after the Date of First Commercial Delivery shall be included in such amended ADP for the applicable Contract Year.

		
	4.6.4
	Unless otherwise expressly stated in this Section 4.6, all other provisions contained in this Agreement shall apply mutatis mutandis to this Section 4.6 during the Bridging Period.  With respect to the Bridging Period, Sections 5.1, 20.1.7, 20.1.8, 20.1.12 and 20.1.13 shall not apply.

		
	5.
	Quantities

		
	5.1
	ACQ

		
	5.1.1
	Subject to Section 5.1.4, the annual contract quantity (“ACQ”) for any Contract Year shall be an amount equal to forty million (40,000,000) MMBtu.

		
	5.1.2
	The ACQ for purposes of determining all obligations under this Agreement shall be the amount expressed in MMBtus.  All references in this Agreement to cargoes or other quantities are solely for operational convenience.

		
	5.1.3
	With respect to each Contract Year, the AACQ for the relevant Contract Year shall be scheduled for delivery in the relevant ADP on a reasonably even and ratable basis throughout the relevant Contract Year, taking into consideration planned maintenance at the Corpus Christi Facility.

28

		
	5.1.4
	In respect of the Contract Year in which the Date of First Commercial Delivery occurs, the ACQ pursuant to Section 5.1.1 will be proportionally reduced by the proportion that the number of Days in such Contract Year that occur after the Date of First Commercial Delivery bears to the total number of Days in the calendar year in which such Contract Year occurs.  In respect of the Final Contract Year, if the Final Contract Year does not end on December 31st then the ACQ will be proportionally reduced in such Contract Year by the proportion that the number of Days in such Contract Year bears to the total number of Days in the calendar year in which such Contract Year occurs.

		
	5.2
	Adjusted Annual Contract Quantity

The “Adjusted Annual Contract Quantity” or “AACQ”, expressed in MMBtu, for each Contract Year shall be equal to the ACQ for the relevant Contract Year, plus the following:
		
	5.2.1
	Round-Up Quantity for such Contract Year, determined in accordance with Section 5.3.1; and

		
	5.2.2
	Round-Down Quantity for the previous Contract Year, determined in accordance with Section 5.3.2, and carried forward to the current Contract Year;

less any of the following:
		
	5.2.3
	Major Scheduled Maintenance Quantities for such Contract Year, if any, determined in accordance with Section 5.4;

		
	5.2.4
	Round-Up Quantity taken in the previous Contract Year, determined in accordance with Section 5.3.1, and carried forward as a deduction to the current Contract Year; and

		
	5.2.5
	Round-Down Quantity for the current Contract Year, determined in accordance with Section 5.3.2.

		
	5.3
	Round-Up/Round-Down Quantities

		
	5.3.1
	If, during the development of the Annual Delivery Program, it appears that the delivery during such Contract Year of the ACQ plus the quantities specified in Section 5.2.2, less the quantities specified in Sections 5.2.3 and 5.2.4 would require Seller to make available and Buyer to take a quantity of LNG that is less than a full cargo lot, then Buyer may request, pursuant to Section 8.1.2, that the AACQ be increased by a quantity of LNG sufficient to deliver the AACQ in full cargo lots, and Seller shall use reasonable efforts to accommodate such request.  Any quantity included in the Annual Delivery Program pursuant to this Section 5.3.1 shall be considered a “Round-Up 

29

Quantity”.  In granting requests for Round-Up Quantities, Seller shall act in a non-discriminatory manner among Foundation Customers and shall give priority to the requests of Foundation Customers over the requests of other customers.
		
	5.3.2
	If, during the development of the Annual Delivery Program, it appears that the delivery during such Contract Year of the ACQ plus the quantities specified in Section 5.2.2 less the quantities specified in Sections 5.2.3 and 5.2.4 would require Seller to make available and Buyer to take a quantity of LNG that is less than a full cargo lot, but Buyer does not request an increase in the AACQ, or Buyer requests an increase but Seller is unable by the exercise of reasonable efforts to accommodate such request, then the AACQ shall be reduced by an amount (the “Round-Down Quantity”) such that the resulting AACQ can be delivered in full cargo lots.

		
	5.4
	Major Scheduled Maintenance

		
	5.4.1
	Seller shall be entitled to reduce the AACQ in order to perform major scheduled maintenance to the Corpus Christi Facility (the “Major Scheduled Maintenance Quantity”) subject to the following conditions:

		
	(a)
	Seller may only exercise its right to such reduction in a Contract Year to the extent it determines, as a Reasonable and Prudent Operator, that major scheduled maintenance is required for operational reasons;

		
	(b)
	Seller shall exercise reasonable efforts to schedule such reduction during the Months of April through September;

		
	(c)
	Seller shall notify Buyer of its exercise of, and the amount of, Major Scheduled Maintenance Quantity pursuant to Section 8.1.1(b);

		
	(d)
	the Major Scheduled Maintenance Quantity reduction elected by Seller during any Contract Year may not exceed seven decimal five percent (7.5%) of the ACQ for such Contract Year; and

		
	(e)
	the cumulative amount of all Major Scheduled Maintenance Quantity reductions elected by Seller pursuant to this Section 5.4.1 shall not exceed twenty-five percent (25%) of the ACQ during any six (6) consecutive Contract Years.

		
	5.5
	Buyer’s Purchase Obligation

		
	5.5.1
	During any Contract Year, Buyer shall take and pay for the Scheduled Cargo Quantity with respect to each cargo included in the AACQ and scheduled in the ADP for such Contract Year, less:

30

		
	(a)
	any quantities of LNG not made available by Seller for any reasons attributable to Seller (other than quantities for which Seller is excused pursuant to this Agreement from making available due to Buyer’s breach of this Agreement) including quantities not made available by Seller due to Force Majeure affecting Seller or the Corpus Christi Facility;

		
	(b)
	any quantities of LNG not taken by Buyer for reasons of Force Majeure;

		
	(c)
	quantities of LNG for which Buyer has provided a notice of suspension pursuant to Section 5.7; and

		
	(d)
	any quantity that the relevant LNG Tanker is not capable of loading due to the Seller’s delivery of LNG that has a Gross Heating Value that is less than the value identified by Seller pursuant to Section 8.1.1(a); and

		
	(e)
	quantities rejected by Buyer in accordance with Section 5.6.6.

		
	5.5.2
	If, with respect to any cargo identified in Section 5.5.1, Buyer does not take all or part of the Scheduled Cargo Quantity of such cargo, and such failure to take is not otherwise excused pursuant to Section 5.5.1, then the amount by which the Scheduled Cargo Quantity for such cargo exceeds the quantity of LNG taken by Buyer in relation to such cargo shall be the “Cargo Shortfall Quantity”.

		
	5.5.3
	With respect to any Cargo Shortfall Quantity, Buyer shall pay to Seller Cover Damages in accordance with the following, if Cover Damages are a positive amount.

		
	(a)
	“Cover Damages” shall be equal to: (i) the CSP multiplied by the Cargo Shortfall Quantity; minus (ii) the proceeds of any Mitigation Sale, if any; minus (iii) reasonable and verifiable savings obtained by Seller (including savings related to avoided fuel Gas for LNG production, transportation and Third Party costs avoided) as a result of the Mitigation Sale as opposed to the sale to Buyer; plus (iv) actual, reasonable, verifiable, incremental costs incurred by Seller as a result of such Mitigation Sale (including costs related to transporting, marketing, selling, and delivery of the Cargo Shortfall Quantity).  For purposes of calculating Cover Damages, the CSP shall be determined as of the Month in which the applicable Delivery Window begins.

		
	(b)
	Seller shall use reasonable efforts to mitigate its Losses and reduce Cover Damages payable resulting from Buyer’s failure to take such Cargo Shortfall Quantity by reselling such Cargo Shortfall Quantity 

31

(whether as LNG or Gas), to Third Parties (each such sale a “Mitigation Sale”); except that any sale of a quantity of LNG (or Gas) by Seller to any Third Party that Seller was already obligated to make at the earlier to occur of (i) Buyer’s failure to take such LNG; or (ii) Buyer’s notice to Seller that it will not take such LNG, is not a Mitigation Sale.
		
	(c)
	Notwithstanding the foregoing, if the Cargo Shortfall Quantity is within the operational tolerance of two percent (2%) of the Scheduled Cargo Quantity (“Operational Tolerance”) (such Operational Tolerance to be exercised by Buyer only with respect to operational matters regarding the LNG Tanker, and without regard to Gas markets or other commercial considerations), the Cover Damages shall be zero USD (US$0.00).

		
	5.5.4
	Any payment that Buyer makes under this Section 5.5 shall not be treated as an indirect, incidental, consequential or exemplary loss or a loss of income or profits for purposes of Section 15.2.1.

		
	5.6
	Seller’s Delivery Obligation

		
	5.6.1
	During any Contract Year, Seller shall make available to Buyer the Scheduled Cargo Quantity with respect to each cargo in the AACQ and scheduled in the ADP for such Contract Year, less;

		
	(a)
	quantities of LNG not taken by Buyer for any reason attributable to Buyer (other than quantities for which Buyer is excused pursuant to this Agreement from taking due to Seller’s breach of this Agreement), including Force Majeure affecting Buyer; 

		
	(b)
	quantities of LNG for which Buyer has provided a notice of suspension pursuant to Section 5.7; and

		
	(c)
	quantities of LNG not made available by Seller due to Force Majeure.

		
	5.6.2
	Except as otherwise excused in accordance with the provisions of this Agreement, if, during any Contract Year, for any reason other than those specified in Section 5.6.1, Seller does not make available the Scheduled Cargo Quantity with respect to any cargo identified in Section 5.6.1 then the amount by which the Scheduled Cargo Quantity exceeds the quantity of LNG made available by Seller shall be the “Cargo DoP Quantity”.  Seller shall make a payment to Buyer for each MMBtu of the Cargo DoP Quantity in an amount equal to: (a) the actual, documented price incurred by Buyer for the purchase of a replacement quantity of LNG or Gas (not to exceed the MMBtu equivalent of the Cargo DoP Quantity), or, in respect of any Cargo DoP Quantity for which a replacement quantity cannot be purchased, the market 

32

price of LNG at such time at the cargo’s originally scheduled destination; less (b) the CSP; plus (c) any actual, reasonable, and verifiable costs (if any), incurred by Buyer due to such failure, including costs associated with transportation; plus (d) any actual, verifiable costs incurred by Buyer in respect of idling the LNG Tanker scheduled to load the Cargo DoP Quantity;  less (e) actual, reasonable, and verifiable cost savings realized by Buyer due to Seller’s failure to make the Scheduled Cargo Quantity available (the “Cargo DoP Payment”).  For purposes of calculating the Cargo DoP Payment, CSP shall be determined as of the Month in which the applicable Delivery Window begins.  
		
	5.6.3
	Notwithstanding the foregoing, if the Cargo DoP Quantity is within the Operational Tolerance (such Operational Tolerance to be exercised by Seller only with respect to operational matters regarding the Corpus Christi Facility, and without regard to Gas markets or other commercial considerations), the Cargo DoP Payment shall be zero USD (US$0.00).

		
	5.6.4
	Buyer shall use reasonable efforts to mitigate Seller’s liability to make any payments pursuant to this Section 5.6.

		
	5.6.5
	In the event the ability of the Corpus Christi Facility to produce and deliver LNG is impaired due to an unscheduled services interruption that does not constitute Force Majeure, then during such event of interruption, Seller shall comply with the Foundation Customer Priority in allocating the LNG that is available from the Corpus Christi Facility.

		
	5.6.6
	If as a result of Seller’s failure to make available the Scheduled Cargo Quantity, a partial cargo is made available to Buyer, and the master of the relevant LNG Tanker deems in his sole discretion the loading of such quantity unsafe for loading and/or transporting to the relevant Discharge Terminal, then Buyer may reject such quantity and such quantity shall be added to the Cargo DoP Quantity.

		
	5.6.7
	Any payment that Seller makes under this Section 5.6 shall not be treated as an indirect, incidental, consequential or exemplary loss or a loss of income or profits for purposes of Section 15.2.1.

		
	5.7
	Buyer’s Right to Suspend Deliveries

		
	5.7.1
	Subject to the remainder of this Section 5.7, Buyer may elect to suspend deliveries of any of the cargoes scheduled in the ADP for the relevant Month by providing notice of such election to Seller on or prior to the twentieth (20th) Day of the Month that is two (2) Months prior to the Month for which Buyer is suspending deliveries. Once cargoes have been suspended pursuant to this Section 5.7.1, Seller shall be relieved of its obligation to make available such cargoes pursuant to Section 5.6.

33

		
	5.7.2
	During the period of suspension, Buyer shall pay a suspension fee (the “Suspension Fee”) for each cargo suspended during a Month equal to:

Xy x ∑SCQM 
where:
Xy is as set forth in Section 9.1.2; and
∑SCQM is equal to the Scheduled Cargo Quantity scheduled in the ADP for such cargo.
Suspension Fees shall be paid in accordance with Section 10.2.2. 
		
	5.7.3
	Buyer may elect to resume delivery of cargoes previously suspended by delivering a notice to Seller stating such election.  A notice provided pursuant to this Section 5.7.3 shall be made on or prior to the twentieth (20th) Day of any Month that is two (2) Months prior to the Month for which Buyer is electing to resume delivery of a cargo scheduled in the ADP.  

		
	5.7.4
	If, at the time of issuance of an ADP for a Contract Year, Buyer has elected suspension of performance pursuant to the terms of this Section 5.7, and Buyer desires such suspension of performance to continue into the Contract Year that is the subject of the newly issued ADP, Buyer shall provide a notice to Seller not later than the twentieth (20th) Day of the eleventh (11th) month of the prior Contract Year stating such election, and the provisions of this Section 5.7 shall apply.

		
	6.
	Delivery Point, Title and Risk

		
	6.1
	Delivery Point

Seller shall deliver LNG to Buyer, subject to the terms and conditions of this Agreement, at the point at which the flange coupling of the LNG loading line at the Corpus Christi Facility joins the flange coupling of the LNG intake manifold of the relevant LNG Tanker (“Delivery Point”).
		
	6.2
	Title and Risk

Title to, and all risks in respect of, the LNG sold by Seller pursuant to this Agreement shall pass from Seller to Buyer as the LNG passes the Delivery Point.
		
	7.
	Transportation and Loading

		
	7.1
	Transportation by Buyer

Buyer shall, in accordance with this Agreement, Applicable Laws, Approvals and International Standards, provide, or cause to be provided, transportation from the Delivery Point of all quantities of LNG delivered hereunder to Buyer. Buyer shall 

34

notify Seller by the 15th day following the end of each calendar quarter of any 
cargo loadings at the Corpus Christi Facility (or at any alternate source in the United States pursuant to Section 3.1.2) that are the subject of this Agreement using an LNG Tanker operated or owned by Buyer or an Affiliate of Buyer.  As requested by Seller, Buyer shall use reasonable efforts to provide additional information regarding LNG Tanker delivery terms.  Buyer shall cause any Third Party that has purchased a cargo that is the subject of this Agreement, to provide the information required by this Section 7.1 as if such Third Party were Buyer.
		
	7.2
	Corpus Christi Facility

		
	7.2.1
	Prior to the Date of First Commercial Delivery and provided the Conditions Precedent set forth in this Agreement are satisfied or waived in accordance herewith, Seller shall cause the Corpus Christi Facility to be constructed and commissioned so as to be able to provide liquefaction services and otherwise to achieve commercial operations completion for making available LNG.  During the Term, Seller shall at all times cause to be provided, maintained and operated the Corpus Christi Facility in accordance with the following:  (a) International Standards; (b) all terms and conditions set forth in this Agreement; (c) Applicable Laws; and (d) to the extent not inconsistent with International Standards, such good and prudent practices as are generally followed in the LNG industry by Reasonable and Prudent Operators of similar LNG liquefaction terminals.

		
	7.2.2
	The Corpus Christi Facility shall include the following:

		
	(a)
	appropriate systems for communications with LNG Tankers;

		
	(b)
	a berth, capable of berthing and mooring an LNG Tanker having a displacement of no more than one hundred sixty-six thousand (166,000) tons, an overall length of no more than one thousand one hundred forty (1,140) feet (approximately 347 meters), a beam of no more than one hundred seventy-five (175) feet (approximately 53 meters), and a draft of no more than forty (40) feet (approximately 12 meters), which LNG Tankers can safely reach, fully laden, and safely depart, fully laden, and at which LNG Tankers can lie safely berthed and load and unload safely afloat;

		
	(c)
	lighting sufficient to permit loading operations by day or by night, to the extent permitted by Governmental Authorities and Pilots (it being acknowledged, however, that Seller shall in no event be obligated to allow nighttime berthing operations at the Corpus Christi Facility if Seller determines that such operations during nighttime hours could pose safety or operational risks to the Corpus Christi Facility, an LNG Tanker, or a Third Party);

		
	(d)
	facilities capable of transferring LNG at a rate of up to an average of twelve thousand (12,000) Cubic Meters per hour at the Delivery 

35

Point, with three (3) LNG transfer arms each having a reasonable operating envelope to allow for ship movement and manifold strainers of sixty (60) mesh;
		
	(e)
	a vapor return line system of sufficient capacity to allow for transfer of Gas necessary for safe cargo operations of an LNG Tanker at the required rates, pressures and temperatures;

		
	(f)
	facilities allowing ingress and egress between the Corpus Christi Facility and the LNG Tanker by (i) representatives of Governmental Authorities for purposes of LNG transfer operations; and (ii) an independent surveyor for purposes of conducting tests and measurements of LNG on board the LNG Tanker;

		
	(g)
	emergency shut down systems;

		
	(h)
	LNG storage facilities with a total gross capacity of not less than three hundred twenty thousand (320,000) cubic meters;

		
	(i)
	LNG liquefaction facilities having the capacity to liquefy Gas and produce not less than two hundred ninety-one thousand seven hundred (291,700) tonnes per Month of LNG, using the ConocoPhillips Optimized Cascade process under license from ConocoPhillips which will include, as necessary, the following equipment, gas turbines, compressor sets, heat exchanger systems, heavies removal system; acid gas removal unit and a mercury removal system for the pre-treatment of feed Gas received at the inlet of the Corpus Christi Facility; propane, ethylene, and amine storage tanks and control and measurement systems, flares, ancillary systems;

		
	(j)
	qualified and competent personnel, fluent in English to coordinate with the LNG Tanker during loading operations; and

		
	(k)
	facilities for the sampling and analysis of LNG.

		
	7.2.3
	Services and facilities not provided by Seller include the following:  (a) facilities and loading lines for liquid or gaseous nitrogen to service an LNG Tanker; (b) facilities for providing bunkers; (c) facilities for the handling and delivery to the LNG Tanker of ship’s stores, provisions and spare parts; and (d) nitrogen rejection or natural gas liquids (NGL) removal.  Buyer shall be required to obtain towing, escort, line handling, and pilot services as described in Section 7.5.3.

		
	7.3
	Compatibility of the Corpus Christi Facility with LNG Tankers

		
	7.3.1
	Buyer shall ensure, at no cost to Seller, that each of the LNG Tankers is fully compatible with the general specifications set forth in Section 7.2.2 and any modifications made to the Corpus Christi Facility in accordance with Section 7.3.2.  Should an LNG Tanker fail materially either to be compatible with 

36

the Corpus Christi Facility, or to be in compliance with the provisions of Sections 7.5 and 7.6, Buyer shall not employ such LNG Tanker until it has been modified to be so compatible or to so comply.
		
	7.3.2
	The Parties agree that, after the Effective Date, Seller shall be entitled to modify the Corpus Christi Facility in any manner whatsoever, provided that: (x) such modifications do not render the Corpus Christi Facility incompatible with an LNG Tanker that is compatible with the general specifications set forth in Section 7.2.2; (y) such modifications, once finalized, do not reduce the ability of Seller to make available LNG in accordance with the terms of this Agreement; and (z) such modifications do not otherwise conflict with Seller’s obligations hereunder.  Notwithstanding the foregoing, Seller may modify the Corpus Christi Facility in a manner that would render it incompatible with an LNG Tanker provided that such modification is required by and is made pursuant to a change in Applicable Laws, Approvals, or International Standards, or is reasonably required for safety or environmental reasons.

		
	7.3.3
	In the event the LNG Tanker fails to be compatible with the Corpus Christi Facility due to a modification of the facility that is not provided for in Section 7.3.2, the reasonable cost of the modifications of the LNG Tanker directly caused by such modification shall be reimbursed by Seller to Buyer.

		
	7.4
	Buyer Inspection Rights in Respect of the Corpus Christi Facility

		
	7.4.1
	Upon obtaining Seller’s prior written consent, which consent shall not be unreasonably withheld or delayed, a reasonable number of Buyer’s designated representatives may from time to time (including during the period of construction of the liquefaction facilities) inspect the operation of the Corpus Christi Facility so long as such inspection occurs from 8:00 a.m. Central Time to 5:00 p.m. Central Time on a business day in the United States of America.  Any such inspection shall be at Buyer’s sole risk and expense.  In conjunction with any such inspection, Seller shall provide Buyer access at reasonable times and places (taking into consideration cost and schedule impacts) to (a) relevant qualified employees and contractors of Seller or its Affiliates in order to discuss the progress of the construction of the Corpus Christi Facility and the operation and maintenance of the Corpus Christi Facility (as applicable) and (b) relevant documentation, if any, available to Seller or its Affiliates in support of such discussions.  Buyer (and its designees) shall carry out any such inspection without any interference with or hindrance to the safe and efficient operation of the Corpus Christi Facility.  Buyer’s right to inspect and examine the Corpus Christi Facility shall be limited to verifying Seller’s compliance with Seller’s obligations under this Agreement.  No inspection (or lack thereof) of the Corpus Christi Facility by Buyer hereunder, or any requests or observations made to Seller or its 

37

representatives by or on behalf of Buyer in connection with any such inspection, shall (a) modify or amend Seller’s obligations, representations, warranties and covenants hereunder; or (b) constitute an acceptance or waiver by Buyer of Seller’s obligations hereunder.
		
	7.4.2
	Buyer shall indemnify and hold Seller and its Affiliates harmless from any Claims and Losses resulting from Buyer’s inspection of the Corpus Christi Facility pursuant to Section 7.4.1.

		
	7.5
	LNG Tankers

		
	7.5.1
	Buyer shall cause each LNG Tanker to comply with the requirements of this Section 7.5 and the requirements of Section 7.6 in all respects.

		
	7.5.2
	Each LNG Tanker shall comply with the regulations of, and obtain all Approvals required by, Governmental Authorities to enable such LNG Tanker to enter, leave and carry out all required operations at the Corpus Christi Facility.  Each LNG Tanker shall at all times have on board valid documentation evidencing all such Approvals.  Each LNG Tanker shall comply fully with the International Safety Management Code for the Safe Operation of Ships and Pollution Prevention effective July 1st, 1998, as amended from time to time, and at all times be in possession of valid documents of compliance and safety management certificates, and can demonstrate that the LNG Tanker has an effective management system in operation that addresses all identified risks, and provides proper controls for dealing with these risks.

		
	7.5.3
	Buyer shall cause Transporter to enter into a tug services agreement to provide such number and types of tugs, fireboats and escort vessels as are (i) acceptable to Seller, and (ii) required by Governmental Authorities to attend the LNG Tanker and (iii) necessary and appropriate to permit safe and efficient movement of the LNG Tanker within the maritime safety areas located in the approaches to and from the Corpus Christi Facility.  An Affiliate of Seller may, at its option, procure tug services at the Corpus Christi Facility.  In such event, Buyer shall cause Transporter to enter into a tug services agreement with such Affiliate of Seller.  Such agreement shall provide that the fees for tug services shall be applied on a non-discriminatory basis among all long-term customers and shall be reasonably similar to the fees for tug services at the Sabine Pass LNG facility as may be adjusted to take into account differences including with respect to available technology, government regulations, capital or lease costs, fuel selection and prices, operating and maintenance expenses, taxation and local market competition.  If Seller’s Affiliate elects to procure tug services for the Corpus Christi Facility Seller shall so notify Buyer no later than thirty-six (36) months prior to the first day of the First Window Period. Seller shall not be required to provide tugs, fireboats and escort vessels to attend any LNG Tanker and shall 

38

not be liable to Buyer in connection with Transporter’s failure to enter into such arrangements.
		
	7.5.4
	Buyer shall pay or cause to be paid: (a) all Port Charges directly to the appropriate Person(including reimbursing Seller for any documented Port Charges paid by Seller or its operator on Buyer’s behalf); and (b) all documented charges payable by reason of any LNG Tanker having to shift from berth at the Corpus Christi Facility as a result of the action or inaction of Buyer.

		
	7.5.5
	Each LNG Tanker must satisfy the following requirements:

		
	(a)
	Except as otherwise mutually agreed in writing by the Parties, each LNG Tanker shall be compatible with the specifications of the Corpus Christi Facility identified in Section 7.2.2 and any modifications to the Corpus Christi Facility pursuant to Section 7.3.2, and shall be of a sufficient size to load the applicable Scheduled Cargo Quantity (subject to the Operational Tolerance).  If Buyer’s LNG Tanker is not capable of loading the applicable Scheduled Cargo Quantity (subject to the Operational Tolerance), Buyer shall be deemed to have failed to take the shortfall quantity and Section 5.5 shall apply, except to the extent that such failure is attributable to Seller’s delivery of LNG that has a Gross Heating Value that is less than the value identified by Seller pursuant to Section 8.1.1(a).

		
	(b)
	Except as otherwise agreed in writing by Seller, which agreement shall not be unreasonably withheld, each LNG Tanker shall have a gross volumetric capacity between one hundred twenty-five thousand (125,000) Cubic Meters and one hundred eighty thousand (180,000) Cubic Meters.

		
	(c)
	Each LNG Tanker shall be, in accordance with International Standards, (i) fit in every way for the safe loading, unloading, handling and carrying of LNG in bulk at atmospheric pressure; and (ii) tight, staunch, strong and otherwise seaworthy with cargo handling and storage systems (including instrumentation) necessary for the safe loading, unloading, handling, carrying and measuring of LNG in good order and condition.

		
	(d)
	Each LNG Tanker shall at all times be maintained in class with any of the following: American Bureau of Shipping, Lloyd’s Register, Bureau Veritas, Det Norske Veritas or any other classification society that is a member of International Association of Classification Societies Ltd. (IACS).

		
	(e)
	Each LNG Tanker shall have been constructed to all applicable International Standards (including the International Code for the 

39

Construction and Equipment of Ships Carrying Liquefied Gases in Bulk).
		
	(f)
	Each LNG Tanker shall comply with, and shall be fully equipped, supplied, operated, and maintained to comply with, all applicable International Standards and Applicable Laws, including those that relate to seaworthiness, design, safety, environmental protection, navigation, and other operational matters, and all procedures, permits, and approvals of Governmental Authorities for LNG vessels that are required for the transportation and loading of LNG at the Loading Port.  Unless approved by Seller in writing, which approval shall not be unreasonably withheld or delayed, an LNG Tanker shall be prohibited from engaging in any maintenance, repair or in-water surveys while berthed at the Corpus Christi Facility.  Each LNG Tanker shall comply fully with the guidelines of any Governmental Authority of the United States of America, including the National Oceanographic and Atmospheric Administration (NOAA), in relation to actions to avoid strikes in the waters of the United States of America with protected sea turtles and cetaceans (e.g., whales and other marine mammals) and with regard to the reporting of any strike by the LNG Tanker which causes injury to such protected species.

		
	(g)
	The officers and crew of each LNG Tanker shall have the ability, experience, licenses and training commensurate with the performance of their duties in accordance with internationally accepted standards with which it is customary for Reasonable and Prudent Operators of LNG vessels to comply and as required by Governmental Authorities and any labor organization having jurisdiction over the LNG Tanker or her crew.  Without in any way limiting the foregoing, the master, chief engineer, all cargo engineers and all deck officers shall be fluent in written and oral English and shall maintain all records and provide all reports with respect to the LNG Tanker in English.

		
	(h)
	Each LNG Tanker shall have communication equipment complying with applicable regulations of Governmental Authorities and permitting such LNG Tanker to be in constant communication with the Corpus Christi Facility and with other vessels in the area (including fireboats, escort vessels and other vessels employed in port operations).

		
	(i)
	Provided that the Corpus Christi Facility supplies a suitable vapor return line meeting the requirements of Section 7.2.2, then:

		
	(i)
	an LNG Tanker with an LNG cargo containment capacity less than or equal to one hundred forty thousand (140,000) Cubic 

40

Meters shall be capable of loading a full cargo of LNG in a maximum of fifteen (15) hours; and
		
	(ii)
	an LNG Tanker with an LNG cargo containment capacity greater than one hundred forty thousand (140,000) Cubic Meters shall be capable of loading a full cargo of LNG in the number of hours derived after applying the following formula:

15 + x  =  maximum LNG transferring time (in hours)
where:
x   =   y/12,000 Cubic Meters; and
y   =  the LNG cargo containment capacity of the LNG Tanker in excess of one hundred forty thousand (140,000) Cubic Meters.
Time for connecting, cooling, draining, purging and disconnecting of liquid arms shall not be included in the computation of pumping time.
		
	(j)
	Each LNG Tanker shall procure and maintain Hull and Machinery Insurance and P&I Insurance in accordance with Section 15.6.

		
	7.6
	LNG Tanker Inspections; LNG Tanker Vetting Procedures; Right to Reject LNG Tanker

		
	7.6.1
	During the Term, on prior reasonable notice to Buyer, Seller may, at its sole risk, send its representatives (including an independent internationally recognized maritime consultant) to inspect during normal working hours any LNG Tanker as Seller may consider necessary to ascertain whether the LNG Tanker complies with this Agreement.  Seller shall bear the costs and expenses in connection with any inspection conducted hereunder.  Any such inspection may include, as far as is practicable having regard to the LNG Tanker’s operational schedule, examination of the records related to the LNG Tanker’s hull, cargo and ballast tanks, machinery, boilers, auxiliaries and equipment; examination of the LNG Tanker’s deck, engine and official log books; review of records of surveys by the LNG Tanker’s classification society and relevant Governmental Authorities; and review of the LNG Tanker’s operating procedures and performance of surveys, both in port and at sea.  Any inspection carried out pursuant to this Section 7.6.1: (a) shall not interfere with, or hinder, any LNG Tanker’s safe and efficient construction or operation; and (b) shall not entitle Seller or any of its representatives to make any request or recommendation directly to Transporter except through Buyer.  No inspection (or lack thereof) of an LNG Tanker hereunder shall: (i) modify 

41

or amend Buyer’s obligations, representations, warranties, and covenants hereunder; or (ii) constitute an acceptance or waiver by Seller of Buyer’s obligations hereunder.
		
	7.6.2
	Seller shall indemnify and hold Buyer and its Affiliates harmless from any Claims and Losses resulting from Seller’s inspection of any LNG Tanker pursuant to Section 7.6.1.

		
	7.6.3
	Buyer shall comply with all LNG Tanker vetting procedures, as set forth in the Corpus Christi Marine Operations Manual.

		
	7.6.4
	Seller shall have the right to reject any LNG vessel that Buyer intends to use to take delivery of LNG hereunder at the Corpus Christi Facility if such LNG vessel does not comply materially with the provisions of this Agreement, provided that:

		
	(a)
	neither the exercise nor the non-exercise of such right shall reduce the responsibility of Buyer to Seller in respect of such LNG vessel and her operation, nor increase Seller’s responsibilities to Buyer or Third Parties for the same; and

		
	(b)
	Buyer’s obligations under this Agreement shall not be excused or suspended by reason of Buyer’s inability (pursuant to the foregoing) to use a vessel as an LNG Tanker.

		
	7.7
	Port Liability Agreement

		
	7.7.1
	Buyer shall cause Transporter or the master of each LNG Tanker (acting on behalf of the ship-owner and charterer) making use of the port or marine facilities at the Corpus Christi Facility or the Loading Port thereof on behalf of Buyer, to execute the Port Liability Agreement prior to such LNG Tanker’s arrival at the Corpus Christi Facility or the Loading Port thereof.  In the event the master of an LNG Tanker fails to execute such Port Liability Agreement, Buyer shall indemnify and hold Seller and its Affiliates harmless from any Claims brought against, or Losses incurred by Seller or any of its Affiliates arising from such failure.

		
	7.7.2
	Subject to Section 7.7.1 and without prejudice to the terms of the Port Liability Agreement, Seller releases Buyer, its Affiliates, and their respective shareholders, officers, members, directors, employees, designees, representatives, and agents from liability to Seller incident to all Claims and Losses that may exist, arise or be threatened currently or in the future at any time following the Effective Date and whether or not of a type contemplated by either Party at any time, brought by any Person for injury to, illness or death of any employee of Seller, or for damage to or loss of the Corpus Christi Facility, which injury, illness, death, damage or loss arises out of, is incident to, or results from the performance or failure to perform this Agreement by 

42

Buyer, or any of its Affiliates, shareholders, officers, members, directors, employees, designees, representatives and agents.
		
	7.7.3
	Subject to Section 7.7.1 and without prejudice to the terms of Section 12 or the Port Liability Agreement, Buyer releases Seller, its Affiliates, and their respective shareholders, officers, members, directors, employees, designees, representatives, and agents from liability to Buyer incident to all Claims and Losses that may exist, arise or be threatened currently or in the future at any time following the Effective Date and whether or not of a type contemplated by either Party at any time, brought by any Person for injury to, illness or death of any employee of Buyer, or for damage to or loss of any LNG Tanker, which injury, illness, death, damage or loss arises out of, is incident to, or results from the performance or failure to perform this Agreement by Seller or its Affiliates, shareholders, officers, members, directors, employees, designees, representatives and agents.

		
	7.7.4
	The form of Port Liability Agreement may be amended from time to time without consent of Buyer only if after any such amendment the revised terms of such Port Liability Agreement: (a) do not negatively impact Buyer’s ability to perform its obligations or exercise its rights under this Agreement, (b) treat Transporter in a non-discriminatory manner in comparison to all other owners and charterers of LNG vessels that use or transit the Loading Port, and (c) do not prevent any Transporter from obtaining, on commercially reasonable terms, full P&I indemnity coverage from a P&I Club, and such P&I indemnity will cover all Claims and Losses pursuant to such Port Liability Agreement in relation to use of the Loading Port by an LNG Tanker.  Seller shall promptly notify Buyer upon any amendment to the Port Liability Agreement and shall provide a copy of the amended Port Liability Agreement to Buyer.

		
	7.8
	Corpus Christi Marine Operations Manual

The Parties acknowledge that Seller shall deliver to Buyer not later than twelve (12) Months prior to the DFCD a copy of the marine operations manual developed for the Corpus Christi Facility (as amended from time to time, the “Corpus Christi Marine Operations Manual”) which governs activities at the Corpus Christi Facility, consistent with International Standards, and which applies to each LNG Tanker and each other LNG vessel berthing at the Corpus Christi Facility.  In the event of a conflict between this Agreement and the Corpus Christi Marine Operations Manual, the provisions of this Agreement shall control.  Seller shall promptly notify Buyer upon any amendment to the Corpus Christi Marine Operations Manual and shall provide a copy of the amended Corpus Christi Marine Operations Manual to Buyer.  
		
	7.9
	Loading of LNG Tankers

43

		
	7.9.1
	Except as otherwise specifically provided, the terms of this Section 7.9 shall apply to all LNG Tankers calling at the Corpus Christi Facility.

		
	7.9.2
	As soon as practicable after the LNG Tanker’s departure from the point of departure en route to the Corpus Christi Facility, Buyer shall notify, or cause the master of the LNG Tanker to notify, Seller of the information specified below  (“In-Transit First Notice”):

		
	(a)
	name of the LNG Tanker and, in reasonable detail, the dimensions, specifications, tank temperatures, volume of LNG onboard, operator, and owner of such LNG Tanker;

		
	(b)
	any operational deficiencies in the LNG Tanker that may affect its performance at the Corpus Christi Facility or berth; and

		
	(c)
	the ETA.

		
	7.9.3
	With respect to each LNG Tanker scheduled to call at the Corpus Christi Facility, Buyer shall give, or cause the master of the LNG Tanker to give, to Seller the following notices:

		
	(a)
	A second notice (“In-Transit Second Notice”), which shall be sent ninety-six (96) hours prior to the ETA set forth in the In-Transit First Notice or as soon as practicable prior to such ETA if the sea time between the point of departure of the LNG Tanker and the Loading Port is less than ninety six (96) hours, stating the LNG Tanker’s then ETA.  If, thereafter, such ETA changes by more than six (6) hours, Buyer shall give promptly, or cause the master of the LNG Tanker to give promptly, to Seller notice of the corrected ETA;

		
	(b)
	The forty-eight (48) hour informational notice as required by the Corpus Christi Marine Operations Manual;

		
	(c)
	A third notice (“In-Transit Third Notice”), which shall be sent twenty-four (24) hours prior to the ETA set forth in the In-Transit Second Notice (as corrected), confirming or amending such ETA.  If, thereafter, such ETA changes by more than three (3) hours, Buyer shall give promptly, or cause the master of the LNG Tanker to give promptly, to Seller notice of the corrected ETA;

		
	(d)
	A fourth notice (“In-Transit Final Notice”), which shall be sent twelve (12) hours prior to the ETA set forth in the In-Transit Third Notice (as corrected), confirming or amending such ETA.  If, thereafter, such ETA changes by more than one (1) hour, Buyer shall give promptly, or cause the master of the LNG Tanker to give promptly, to Seller notice of the corrected ETA; and

44

		
	(e)
	An NOR, which shall be given at the time prescribed in Section 7.10.

		
	7.9.4
	Buyer shall have the right to cause a LNG Tanker to burn Gas as fuel during operations at the Corpus Christi Facility (including while conducting cargo transfer operations).  The quantity of Gas burned as fuel pursuant to this Section 7.9.4 shall be determined in accordance with Exhibit A.  If Buyer exercises its right pursuant to this Section 7.9.4, all amounts of Gas burned as fuel shall be added to the quantity loaded included in Seller’s invoice pursuant to Section 10.1.1, but shall have no impact in respect of Buyer’s obligations under Section 5.

		
	7.9.5
	All vapor returned to Seller during cool-down or loading operations may be used or disposed of by Seller without compensation to Buyer.

		
	7.10
	Notice of Readiness

		
	7.10.1
	The master of an LNG Tanker arriving at the Corpus Christi Facility, or such master’s agent, shall give to Seller its NOR for loading upon arrival of such LNG Tanker at the PBS, provided that such LNG Tanker has all required Approvals from the relevant Governmental Authorities, and is ready, willing, and able, to proceed to berth and load LNG or to commence cool-down operations (as applicable).

		
	7.10.2
	A valid NOR given under Section 7.10.1 shall become effective as follows:

		
	(a)
	For an LNG Tanker arriving at the PBS at any time prior to the Delivery Window allocated to such LNG Tanker, an NOR shall be deemed effective at the earlier of 6:00 a.m. Central Time on such Delivery Window or the time at which the LNG Tanker is all fast at the berth;

		
	(b)
	For an LNG Tanker arriving at the PBS at any time during the Delivery Window allocated to such LNG Tanker, an NOR shall become effective at the time of its issuance; or

		
	(c)
	For an LNG Tanker arriving at the PBS at any time after the expiration of the Delivery Window, an NOR shall become effective upon Seller’s notice to the LNG Tanker that it is ready to receive the LNG Tanker at berth.

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	7.11
	Berthing Assignment

		
	7.11.1
	Seller shall berth an LNG Tanker which has tendered NOR before or during its Delivery Window promptly after Seller determines such LNG Tanker will not interfere with berthing and loading or unloading of any other scheduled LNG vessel with a higher berthing priority but in no event later than the end of the Delivery Window allocated to such LNG Tanker; provided, however, that if Seller does not berth such LNG Tanker by the end of the Delivery Window, but berths such LNG Tanker within seventy-two (72) hours after the end of its Delivery Window, Buyer’s sole recourse and remedy for Seller’s failure to berth the LNG Tanker by the end of the Delivery Window is demurrage pursuant to Section 7.12.3, payment for excess boil-off pursuant to Section 7.12.4 and provision by Seller of a cool-down pursuant to Section 7.16.1(b).  If, as of the seventy-second (72nd) hour after the end of the Delivery Window, Seller has not berthed the LNG Tanker, and such delay is not attributable to a reason that would result in an extension of Allotted Laytime under Section 7.12.1, Seller shall be deemed to have failed to make the Scheduled Cargo Quantity of the relevant cargo available for delivery and the provisions of Section 5.6.2 shall apply. 

		
	7.11.2
	For each delivery window period, Seller shall determine the berthing priority among LNG vessels which have tendered NOR before or during their scheduled delivery window as follows:

		
	(a)
	The first berthing priority for a delivery window period shall be for an LNG vessel scheduled for such delivery window period.  Priority within this group shall be given to the LNG vessel which has first tendered Seller its NOR.  Once an LNG vessel achieves a first berthing priority pursuant to this Section 7.11.2(a) or 7.11.2(b), such LNG vessel shall maintain such priority until such LNG vessel is berthed, so long as its tendered NOR remains valid; and

		
	(b)
	The second berthing priority for a delivery window period shall be for an LNG vessel scheduled for arrival after such delivery window period.  Priority within this group shall be given to the LNG vessel which has first tendered Seller its NOR.  An LNG vessel with second berthing priority pursuant to this Section 7.11.2(b) will achieve a first berthing priority on its scheduled delivery window pursuant to Section 7.11.2(a) if such LNG vessel has not been berthed prior to such date, so long as its tendered NOR remains valid. 

		
	7.11.3
	If an LNG Tanker tenders NOR after the end of its Delivery Window, Seller shall use reasonable efforts to berth such LNG Tanker as soon as reasonably practical; provided, however, that, unless otherwise agreed with Buyer, Seller 

46

shall have no obligation to use such efforts to berth an LNG Tanker that tenders NOR more than seventy-two (72) hours after the end of its Delivery Window.  If, as of the seventy-second (72nd) hour after the end of the Delivery Window, the LNG Tanker has not tendered NOR, and such delay is not attributable to a reason that would result in an extension of allowed berth time under Section 7.14.2(b), Buyer shall be deemed to have failed to take delivery of the Scheduled Cargo Quantity of the relevant cargo and the provisions of Sections 5.5.2 and 5.5.3 shall apply.
		
	7.12
	Berth Laytime

		
	7.12.1
	The allotted laytime for each LNG Tanker (“Allotted Laytime”) shall be (i) for an LNG Tanker with an LNG cargo containment capacity of one hundred forty thousand (140,000) Cubic Meters or less, thirty-six (36) hours and (ii) for an LNG Tanker with an LNG cargo containment capacity of greater than one hundred forty thousand (140,000) Cubic Meters, according to the following formula:

36 + x  =  Allotted Laytime (in hours)
where:
x  =  y/12,000 Cubic Meters; and
y  =  the LNG cargo containment capacity of the LNG Tanker in excess of one hundred forty thousand (140,000) Cubic Meters)
Allotted Laytime shall be extended by any period of delay that is caused by:
		
	(a)
	reasons attributable to Buyer, a Governmental Authority, Transporter, the LNG Tanker or its master, crew, owner or operator or any Third Party outside of the reasonable control of Seller;

		
	(b)
	Force Majeure or Adverse Weather Conditions;

		
	(c)
	unscheduled curtailment or temporary discontinuation of operations at the Corpus Christi Facility necessary for reasons of safety, except to the extent such unscheduled curtailment or temporary discontinuation of operations is due to Seller’s failure to operate and maintain its facilities as a Reasonable and Prudent Operator; 

		
	(d)
	time at berth during cool-down pursuant to Sections 7.16.1(a) and (c); and  

		
	(e)
	nighttime transit restrictions, if applicable.

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	7.12.2
	The actual laytime for each LNG Tanker (“Actual Laytime”) shall commence when the NOR is effective and shall end when (i) the LNG transfer and return lines of the LNG Tanker are disconnected from the Corpus Christi Facility’s LNG transfer and return lines, (ii) the cargo documents are on board of the LNG Tanker and (iii) the LNG Tanker is cleared for departure and able to depart.

		
	7.12.3
	In the event Actual Laytime exceeds Allotted Laytime (including any extension in accordance with Section 7.12.1) (“Demurrage Event”), Seller shall pay to Buyer as liquidated damages demurrage in USD (which shall be prorated for a portion of a Day) at a rate of USD eighty thousand (US$80,000) per Day.  If a Demurrage Event occurs, Buyer shall invoice Seller for such demurrage within one hundred eighty (180) Days pursuant to Section 10.1.5.

		
	7.12.4
	If an LNG Tanker is delayed in berthing at the Corpus Christi Facility and/or commencement of LNG transfer due to an event occurring at the Corpus Christi Facility and for a reason that would not result in an extension of Allotted Laytime under Section 7.12.1, and if, as a result thereof, the commencement of LNG transfer is delayed beyond twenty-four (24) hours after NOR is effective, then, for each full hour by which commencement of LNG transfer is delayed beyond such twenty-four (24) hour period, Seller shall pay Buyer as liquidated damages an amount, on account of excess boil-off, equal to the CSP for such Month multiplied by a quantity (in MMBtu) equal to zero decimal zero zero five seven three percent (0.00573%) of the cargo containment capacity of such LNG Tanker; provided that in no event shall the quantity of MMBtu used in the calculation of this Section 7.12.4 exceed the quantity of LNG on board the LNG Tanker at the time it issued its valid NOR.  Buyer shall invoice Seller for such excess boil-off within one hundred eighty (180) Days after the applicable event pursuant to Section 10.1.5.

		
	7.13
	LNG Transfers at the Corpus Christi Facility

		
	7.13.1
	Seller shall cooperate with Transporters (or their agents) and with the master of each LNG Tanker to facilitate the continuous and efficient transfer of LNG hereunder.

		
	7.13.2
	During LNG transfer, Seller shall provide or take receipt of (as applicable), through the Corpus Christi Facility vapor return line, Gas in such quantities as are necessary for the safe transfer of LNG at such rates, pressures and temperatures as may be required by the design of the LNG Tanker.

		
	7.13.3
	Promptly after completion of loading of each cargo, Seller shall send to Buyer a certificate of origin, together with such other documents concerning the cargo as may reasonably be requested by Buyer.

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	7.13.4
	Buyer, in cooperation with Seller, shall cause the LNG Tanker to depart safely and expeditiously from the berth upon completion of LNG transfer.

		
	7.14
	LNG Tanker Not Ready for LNG Transfer; Excess Laytime

		
	7.14.1
	Except in the event Seller provides a cool-down service under Section 7.16.1(b), if any LNG Tanker previously believed to be ready for LNG transfer is determined to be not ready after being berthed, the NOR shall be invalid, and Seller may direct the LNG Tanker’s master to vacate the berth and proceed to anchorage, whether or not other LNG vessels are awaiting the berth, unless it appears reasonably certain to Seller that such LNG Tanker can be made ready without disrupting the overall berthing schedule of the Corpus Christi Facility or operations of the Corpus Christi Facility.  When an unready LNG Tanker at anchorage becomes ready for LNG transfer, its master shall notify Seller.  If, as a result of such LNG Tanker’s not being ready to load, Buyer fails to take a cargo, the provisions of Sections 5.5.2 and 5.5.3 shall apply.

		
	7.14.2
	The following shall apply with respect to berthing:

		
	(a)
	An LNG Tanker shall complete LNG transfer and vacate the berth as soon as possible but not later than the following allowed laytime:

		
	(i)
	twenty-four (24) hours from the time the LNG Tanker is all fast at the berth, in the case of an LNG Tanker with an LNG cargo containment capacity less than or equal to one hundred forty thousand (140,000) Cubic Meters; or

		
	(ii)
	in accordance with the following formula, in the case of an LNG Tanker with an LNG cargo containment capacity greater than one hundred forty thousand (140,000) Cubic Meters:

24 + x   =   allowed laytime (in hours)
where:
x   =   y/12,000 Cubic Meters; and
y   =  the LNG cargo containment capacity of the LNG Tanker in excess of one hundred forty thousand (140,000) Cubic Meters.
		
	(b)
	Notwithstanding the foregoing, the allowed laytime shall be extended for: (i) reasons attributable to Seller, the operator of the Corpus Christi Facility; (ii) reasons attributable to a Governmental Authority; (iii) reasons attributable to any Third Party outside of the reasonable control of Buyer; (iv) time at berth during cool-down pursuant to 

49

Sections 7.16.1(a)-(c); (v) unscheduled curtailment or temporary discontinuation of operations at the Corpus Christi Facility necessary for reasons of safety, except to the extent attributable to Buyer or Transporter; (vi) Force Majeure; and (vii) nighttime transit restrictions.
		
	(c)
	If an LNG Tanker fails to depart at the end of its allowed laytime (as extended pursuant to Section 7.14.2(b)), another LNG vessel is awaiting the berth and the LNG Tanker’s continued occupancy of the berth will disrupt the overall berthing schedule of the Corpus Christi Facility or operations of the Corpus Christi Facility, Seller may direct the LNG Tanker to vacate the berth and proceed to sea at utmost dispatch.

		
	(d)
	If an LNG Tanker fails to depart the berth at the end of its allowed laytime (as extended pursuant to Section 7.14.2(b)) and as a result the subsequent LNG vessel is prevented from or delayed in loading or unloading, Buyer shall reimburse Seller for any and all actual documented demurrage or excess boil-off that Seller becomes contractually obligated to pay to any Third Party with respect to such subsequent LNG vessel, as a result of the LNG Tanker not completing LNG transfer and vacating the berth as required by this Section 7.14.2; provided that Buyer shall not be required to reimburse Seller for any amounts based on a demurrage rate or excess boil-off rate or price in excess of the amounts specified in Section 7.12.3 and Section 7.12.4, as applicable.  Seller shall invoice Buyer for any amounts due under this Section 7.14.2(d) pursuant to Section 10.1.5 within one hundred eighty (180) Days after the relevant Delivery Window.

		
	(e)
	In the event an LNG Tanker fails to vacate the berth pursuant to this Section 7.14 and Buyer is not taking actions to cause it to vacate the berth, Seller may effect such removal at the expense of Buyer.  

		
	7.15
	Cooperation

		
	7.15.1
	If any circumstance occurs or is foreseen to occur so as to cause delay to an LNG Tanker or any other LNG vessel in berthing, loading, unloading or departing, Buyer and Seller shall, without prejudice to any other provision of this Agreement, discuss the problem in good faith with each other and, if appropriate, with other users of the Loading Port, and the Parties shall use reasonable efforts to minimize or to avoid the delay, and at the same time shall cooperate with each other and with such other users of the Loading Port, as appropriate, to find countermeasures to minimize or to avoid the occurrence of any similar delay in the future.

50

		
	7.15.2
	With respect to an LNG Tanker scheduled to load a cargo at the Corpus Christi Facility, if such LNG Tanker is unable to berth at the Corpus Christi Facility by the end of its Delivery Window solely due to a Force Majeure event, then the relevant cargo shall be cancelled, to the extent affected; provided, however, that if requested by Buyer, Seller shall use reasonable efforts to change the ADP or Ninety Day Schedule in order to maximize the safe, reliable and efficient usage of the Corpus Christi Facility and to assist Buyer,  other Foundation Customers, or other buyers having a firm contract to purchase LNG from the Corpus Christi Facility to load quantities of LNG which would otherwise have been loaded at the Corpus Christi Facility during such cancelled Delivery Windows or other affected delivery windows allocated to such other Foundation Customers, or other buyers having a firm contract to purchase LNG from the Corpus Christi Facility.

		
	7.16
	Cool-Down and Gas-Up of LNG Tankers

		
	7.16.1
	Buyer shall be solely responsible for ensuring that each LNG Tanker elected by Buyer for taking a cargo arrives at the Corpus Christi Facility cold and in a state of readiness.  Notwithstanding the foregoing and subject to Section 7.16.2, Seller shall provide cool-down service to LNG Tankers at Buyer’s request as follows:

		
	(a)
	Seller shall use reasonable efforts (taking into account availability of sufficient berth time) to accept Buyer’s request to provide cool-down service for any LNG Tanker, subject to Buyer requesting such cool-down service by notice to Seller as far in advance of the relevant cargo’s Delivery Window as is reasonably practicable but in no case less than thirty (30) Days before the relevant cargo’s Delivery Window, provided that Seller shall accept Buyer’s request to provide a cool-down service if (i) Buyer makes such request by notice at the time Buyer proposes its schedule of receipt of cargoes pursuant to Section 8.1.2 for the relevant Contract Year or (ii) at the time of the request, the Composite ADP for the relevant Contract Year indicates sufficient available berth time to accommodate such cool-down service.  Seller shall have no obligation to provide a cool-down service pursuant to this Section 7.16.1(a) in excess of: (A) two (2) total cool-downs during any Contract Year and (B) eighteen (18) total cool-downs during the initial Term.  All LNG provided by Seller for cooling such LNG Tankers shall be sold, delivered and invoiced by Seller, and paid for by Buyer, at a price equal to the CSP;

		
	(b)
	Seller shall provide cool-down service without charge to any LNG Tankers requiring cool-down solely as a result of a delay caused by Seller, but only if such LNG Tanker made no other call between the original Delivery Window and the requested cool-down time; and

51

		
	(c)
	Seller shall use reasonable efforts, contingent on the availability of sufficient berth time and facilities status to provide cool-down service at any time other than as described in Sections 7.16.1(a)-(b) upon request by Buyer, provided that all LNG provided by Seller for cooling such LNG Tankers shall be sold, delivered and invoiced by Seller, and paid for by Buyer, at a price equal to the CSP.

		
	7.16.2
	The following shall apply to any cool-down service provided by Seller pursuant to Section 7.16.1:

		
	(a)
	the MMBtu content of the total liquid quantities delivered for cooling, measured before evaporation (without deduction of the quantity of vapor returned from the LNG Tanker), shall be determined by reference to the relevant LNG Tanker’s cool-down tables;  

		
	(b)
	the Parties will determine by mutual agreement the rates and pressures for delivery of LNG for cool-down, but always in full accordance with safe operating parameters and procedures mutually established and agreed by both the LNG Tanker and the Corpus Christi Facility; and

		
	(c)
	LNG provided during cool down by Seller pursuant to Section 7.16.1 shall not be applied against the Scheduled Cargo Quantity for the relevant cargo. 

		
	7.16.3
	If requested by Buyer, Seller shall use reasonable efforts to obtain all relevant Approvals needed to allow Seller to offer gas-up service to LNG Tankers at the Corpus Christi Facility.

		
	8.
	Annual Delivery Program

		
	8.1
	Programming Information

		
	8.1.1
	No later than one hundred eighty (180) Days before the start of each Contract Year, Seller shall provide Buyer with:

		
	(a)
	Seller’s good faith estimate of the Gross Heating Value of LNG to be delivered during the coming Contract Year; and

		
	(b)
	the Major Scheduled Maintenance Quantity for the Contract Year, if any.

		
	8.1.2
	No less than one hundred ten (110) Days before the start of each Contract Year, Buyer shall notify Seller of Buyer’s proposed schedule of receipt of cargoes for each Month of such Contract Year.  Such schedule shall be on a reasonably even and ratable basis in accordance with Section 5.1.3, and Buyer’s notice shall include the following information:

52

		
	(a)
	the LNG Tanker (if known) for each proposed cargo;

		
	(b)
	the Scheduled Cargo Quantity for each proposed cargo;

		
	(c)
	the proposed Delivery Window for each cargo;

		
	(d)
	Buyer’s request (if any) for a Round-Up Quantity for such Contract Year;

		
	(e)
	the anticipated Discharge Terminal for each proposed cargo, subject to Section 26.1; and

		
	(f)
	any other information that may affect annual scheduling.

Buyer shall also inform Seller of any anticipated periods for maintenance to be conducted with respect to the LNG Tankers identified in (a) above.
		
	8.1.3
	Seller will then notify Buyer no less than eighty-five (85) Days before the start of such Contract Year of Seller’s proposed schedule of cargoes to be made available in each Month of such Contract Year, exercising reasonable efforts to adopt Buyer’s proposed schedule of receipts requested in accordance with Section 8.1.2; provided that if Buyer fails to deliver the notice according to Section 8.1.2, Seller may nevertheless propose a schedule according to the terms of this Section 8.1.3.  Such notice shall include the following information:

		
	(a)
	the AACQ for the Contract Year;

		
	(b)
	the Round-Up Quantity or Round-Down Quantity for the Contract Year;

		
	(c)
	any Round-Down Quantity not taken in the previous Contract Year and carried forward to the current Contract Year;

		
	(d)
	any Round-Up Quantity taken in the previous Contract Year and carried forward as a deduction in the current Contract Year;

		
	(e)
	the Major Scheduled Maintenance Quantity (if any) for the Contract Year identified by Seller pursuant to Section 8.1.1(b);

		
	(f)
	for each cargo:

		
	(i)
	the LNG Tanker (if specified by Buyer);

		
	(ii)
	the Scheduled Cargo Quantity specified in the notice sent by Buyer pursuant to Section 8.1.2;

		
	(iii)
	the proposed Delivery Window; and

53

		
	(iv)
	the Discharge Terminal specified in the notice sent by Buyer pursuant to Section 8.1.2, subject to such Discharge Terminal complying with Section 26.1; and

		
	(g)
	any other information that may affect annual scheduling.

		
	8.2
	Determination of Annual Delivery Program

		
	8.2.1
	Not later than ten (10) Days after receipt of Seller’s proposed schedule provided under Section 8.1.3, Buyer shall notify Seller if Buyer desires to consult with Seller regarding the proposed schedule, and Seller shall, no later than fifteen (15) Days after receipt of Buyer’s notice, meet and consult with Buyer.

		
	8.2.2
	If, prior to the date that is sixty (60) Days before the start of the coming Contract Year, the Parties have agreed on a schedule of deliveries for such coming Contract Year, then Seller shall issue the delivery schedule agreed by the Parties.  If the Parties are unable to agree on a schedule of deliveries for the coming Contract Year, then not later than sixty (60) Days before the start of such Contract Year, Seller shall issue the delivery schedule for such Contract Year containing the information set forth in Section 8.1.3, modified to reflect any changes agreed by the Parties pursuant to Section 8.2.1.  The schedule promulgated by Seller shall reflect the exercise of reasonable efforts by Seller to (i) assign to Buyer Delivery Windows that are as close as reasonably practicable to the Delivery Windows proposed by Buyer, and (ii) specify the Scheduled Cargo Quantity with respect to each LNG Tanker as notified by Buyer pursuant to Section 8.1.2.   In assigning Delivery Windows Seller shall act in a non-discriminatory manner among Foundation Customers and shall give priority to the requests of Foundation Customers over the requests of other customers.

		
	8.2.3
	The schedule for deliveries of LNG during the Contract Year established pursuant to this Section 8.2, as amended from time to time in accordance with Section 8.3, is the “Annual Delivery Program” or “ADP”.  If Seller fails to issue the schedule provided for in Sections 8.1.3 or 8.2.2, if applicable, then the schedule proposed by Buyer under Section 8.1.2 shall be the ADP for the relevant Contract Year.

		
	8.2.4
	Seller shall combine the ADP with the similar schedules for the loading of cargoes for the account of other Persons having contractual rights to receive cargoes from Seller at the Corpus Christi Facility, and shall provide to Buyer a combined schedule (the “Composite ADP”) showing all delivery windows and scheduled cargo quantities that have been committed by Seller, along with available, uncommitted loading windows at the Corpus Christi Facility.  Seller shall promptly update the Composite ADP as the ADP is changed 

54

pursuant to Section 8.3 or other Persons’ delivery windows are changed pursuant to their respective agreements.
		
	8.3
	Changes to Annual Delivery Program

		
	8.3.1
	Subject to the remainder of this Section 8.3, Buyer may request by notice a change in the ADP or Ninety Day Schedule for a Contract Year for any reason.  Seller may request by notice a change in the Scheduled Cargo Quantity or the Delivery Window for any cargo in the ADP (including any Ninety Day Schedule) for such Contract Year for operational causes affecting Seller, including Force Majeure.

		
	8.3.2
	As soon as possible after notice has been received pursuant to this Section 8.3, the Parties shall consult with one another in order to examine whether such ADP or Ninety Day Schedule can be revised to accommodate such proposed change(s).  Neither Party shall unreasonably withhold its consent to revise the ADP or Ninety Day Schedule in accordance with changes proposed by the other Party; provided that neither Party shall be under any obligation to consent thereto if, in the case of Seller, it is unable to agree after the exercise of reasonable efforts to any necessary changes in its arrangements with other Foundation Customers or other buyers of LNG from the Corpus Christi Facility or if, in the case of Buyer, it is unable to agree after the exercise of reasonable efforts to any necessary changes in its arrangements with the LNG Tankers or Buyer’s customers or the requested change would impose additional costs or risks upon Buyer.  Seller may not withhold its consent to revise the ADP or Ninety Day Schedule if Buyer’s proposed change: (a) consists of the movement of a Delivery Window to dates not committed under the Composite ADP at the time of Buyer’s request and does not result in a change to the Scheduled Cargo Quantity; (b) the proposed change is, by the exercise of reasonable efforts on the part of Seller, operationally feasible; and (c) the proposed change does not result in increased costs to Seller.  Seller may not withhold its approval to a requested change on the grounds of Section 8.3.2(c) if Buyer agrees to reimburse Seller for such increased costs.

		
	8.3.3
	Any change to the ADP or Ninety Day Schedule shall not, unless expressly agreed otherwise by both Parties in such amended ADP or Ninety Day Schedule, (a) affect the obligations pursuant to Section 5 of the Party requesting such change; or (b) result in unreasonably unratable deliveries at any time during a Contract Year.

55

		
	8.3.4
	Upon a change to the Delivery Window for a cargo, the ADP and/or Ninety Day Schedule shall be amended accordingly and an updated ADP and/or Ninety Day Schedule shall promptly be provided in writing by Seller to Buyer.

		
	8.4
	Ninety Day Schedule

No later than the twenty-fifth (25th) Day of each Month, Seller shall issue a forward plan of deliveries for the three (3)-Month period commencing on the first Day of the following Month thereafter (e.g., the Ninety Day Schedule for the three (3)-Month period commencing on May 1st shall be issued no later than the twenty-fifth (25th) Day of April) (such plan, as amended from time to time in accordance with procedures set forth in this Agreement, the “Ninety Day Schedule”).  The Ninety Day Schedule shall set forth by cargo the forecast pattern of deliveries, including the Delivery Window, LNG Tanker and Scheduled Cargo Quantity for each cargo.  In the absence of agreement between the Parties otherwise, the Ninety Day Schedule will maintain the Scheduled Cargo Quantities and Delivery Windows as identified in the Annual Delivery Program.
		
	8.5
	Force Majeure Affecting LNG Tanker

With respect to any particular cargo, Buyer shall not be entitled to claim Force Majeure relief for an event affecting the LNG Tanker nominated for such cargo if such LNG Tanker was affected by, or should reasonably have been expected by Buyer (in each case acting as a Reasonable and Prudent Operator) to be affected by, such Force Majeure event at the time it was nominated by Buyer pursuant to Section 8.1.2 or Section 8.3, as applicable, for the relevant cargo.
		
	9.
	Contract Sales Price 

		
	9.1
	Contract Sales Price

		
	9.1.1
	The contract sales price (“CSP”) (expressed in USD per MMBtu) for all LNG made available by Seller to Buyer shall be as follows:

CSP = (1.15 x HH) + Xy 
where:
		
	Xy = 
	the constant applicable for the current Contract Year, as calculated in accordance with Section 9.1.2.

		
	9.1.2
	In each Contract Year, Xy shall be increased annually, effective as of the first Day of each Contract Year, as soon as the relevant data is available from the 

56

US Department of Labor Bureau of Labor Statistics on or after January 1st of each calendar year, by adjusting X0 as follows:
Xy = (0.86 + 0.14 x CPI(y-1) / CPI0) x X0 
where:
Xy = the constant for the current Contract Year;
CPI(y-1) = The arithmetic average of the US Department of Labor Bureau of Labor Statistics CPI (All Urban Consumers, U.S., All Items, 1982 – 1984, Not Seasonally Adjusted, Series I.D. CUUR0000SA0) for the twelve (12) Months preceding the relevant January 1st determination date;
CPI0 = The arithmetic average of the US Department of Labor Bureau of Labor Statistics CPI (All Urban Consumers, U.S., All Items, 1982 – 1984, Not Seasonally Adjusted, Series I.D. CUUR0000SA0) for the twelve (12) Month period between January 1st and December 31st 2017;
Provided, however, that:
		
	(i)
	if at any time the US Department of Labor Bureau of Labor Statistics CPI (All Urban Consumers, U.S., All Items, 1982 - 1984, Not Seasonally Adjusted, Series I.D. CUUR0000SA0) statistics are adjusted for a relevant period following the adjustment of Xy for that period pursuant to this Section 9.1.2, then (A) Xy during that period shall be recalculated pursuant to this Section 9.1.2, (B) all invoices previously issued by Seller  during such period shall be treated as Provisional Invoices, and (C) Seller shall issue a revised invoice reflecting any aggregate credit for Buyer, or debit owed by Buyer, as applicable, in respect of all such Provisional Invoices, as soon as reasonably practicable thereafter;

		
	(ii)
	if at any time prior to the end of the Term, any index is discontinued or otherwise no longer published, a comparable index will be substituted pursuant to Section 1.3; and

		
	(iii)
	if at any time prior to the end of the Term, any index is rebased, the formula in this Section 9.1.2 shall be adjusted accordingly to properly reflect the rebasing.

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	10.
	Invoicing and Payment

		
	10.1
	Invoices

		
	10.1.1
	Invoices for Cargoes.  Invoices for each cargo made available by Seller and taken by Buyer, together with relevant supporting documents including a certificate of quantity loaded, shall be prepared and delivered by Seller to Buyer promptly following each Delivery Window and receipt of the final inspection certificate applicable to the loading of such cargo.  The invoice amount shall be the CSP, multiplied by the quantity of LNG loaded on Buyer’s LNG Tanker net of Gas returned to Seller during loading.

		
	10.1.2
	Invoices for Suspension Fees.  Invoices for Suspension Fee(s) shall be prepared and delivered by Seller to Buyer on or about the first Day of each Month that a suspension notice is in effect, together with relevant supporting documents showing the basis for the calculation thereof.

		
	10.1.3
	Invoices for Cargo DoP Payments.  Invoices for Cargo DoP Payments owed to Buyer by Seller shall be prepared by Buyer and delivered to Seller promptly following the Delivery Window of each affected cargo and completion of mitigation efforts.

		
	10.1.4
	Invoices for Cover Damages.  Invoices for Cover Damages owed to Seller by Buyer shall be prepared by Seller and delivered to Buyer promptly following the Delivery Window for each affected cargo.

		
	10.1.5
	Invoices for Various Sums Due. In the event that any sums are due from one Party to the other Party under Section 7.5.4(b), 7.12.3, 7.12.4, 7.14.2(d), 7.16.1, 10.3.3, 10.4.1, 11.5, 12.3.1(c), or 12.3.2(a) of this Agreement, the Party to whom such sums are owed shall furnish an invoice therefor, describing in reasonable detail the basis for such invoice and providing relevant documents supporting the calculation thereof.

		
	10.1.6
	Invoices for Other Sums Due.  In the event that any sums are due from one Party to the other Party under this Agreement, other than for a reason addressed in Section 10.1.1 through 10.1.5, the Party to whom such sums are owed shall furnish an invoice therefor, describing in reasonable detail the basis for such invoice and providing relevant documents supporting the calculation thereof.

		
	10.1.7
	Notice.  Invoices shall be sent in accordance with Section 25. 

		
	10.1.8
	Provisional Invoices.

		
	(a)
	In the event (i) a rate or index used in the calculation of an amount is not available on a temporary or permanent basis; or (ii) any other relevant information necessary to compute an invoice is not available, 

58

the invoicing Party may issue a provisional invoice (“Provisional Invoice”) in an amount calculated, in the case of subsection (i) of this Section 10.1.8(a), in accordance with Section 1.3, and, in the case of subsection (ii) of this Section 10.1.8(a), based on the best estimate of the unavailable information by the Party issuing the Provisional Invoice.  A Provisional Invoice shall be deemed to be an invoice issued pursuant to Section 10.1.1 through 10.1.4, as applicable, for the purposes of the payment obligations of Seller or Buyer, as applicable, and shall be subject to subsequent adjustment in accordance with Section 10.1.8(b).
		
	(b)
	If a Provisional Invoice has been issued, the invoicing Party shall issue a final invoice reflecting any credit or debit, as applicable, to the Provisional Invoice as soon as reasonably practicable after the information necessary to compute the payment has been obtained by such Party.  Seller and Buyer shall settle such debit or credit amount, as the case may be, when payment of the next invoice is due pursuant to Section 10.2 or, if earlier, upon the termination of this Agreement.

		
	10.2
	Payment

All amounts invoiced under this Agreement that are due and payable shall be paid in accordance with this Section 10.2. 
		
	10.2.1
	Payments for Cargoes. Invoices issued in accordance with Section 10.1.1 for cargoes made available and taken shall become due and payable by Buyer on the tenth (10th) Day after the date on which Buyer received such invoice.

		
	10.2.2
	Payments for Suspension Fees.  Invoices issued in accordance with Section 10.1.2 shall become due and payable by Buyer on the later of (a) the fifteenth (15th) Day of the Month for which the Suspension Fee(s) apply or (b) ten (10) Days after Buyer receives Seller’s invoice.

		
	10.2.3
	Cargo DoP Payments.  Invoices issued in accordance with Section 10.1.3 shall become due and payable on the tenth (10th) Day following receipt by Seller.

		
	10.2.4
	Payments for Cover Damages.  Invoices issued in accordance with Section 10.1.4 shall become due and payable on the tenth (10th) Day following receipt by Buyer.

		
	10.2.5
	Payments for Other Sums Due.  An invoice issued pursuant to Section 10.1.5 or 10.1.6 shall be paid by the paying Party thereunder not later than twenty (20) Days after receipt of such invoice.

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	10.2.6
	Payment Method.  All invoices shall be settled by payment in USD of the sum due by wire transfer of immediately available funds to an account with the bank designated by the other Party in accordance with Section 10.2.7.

		
	10.2.7
	Designated Bank.  Each Party shall designate a bank in a location reasonably acceptable to the other Party for payments under this Agreement.  A Party shall designate its bank by notice to the other Party initially not later than one hundred twenty (120) Days prior to the Date of First Commercial Delivery and thereafter not less than thirty (30) Days before any redesignation is to be effective.

		
	10.2.8
	Payment Date.  If any invoice issued pursuant to Section 10.1 would result in a Party being required to make a payment on a Day that is not a Business Day, then the due date for such invoice shall be the immediately succeeding Business Day; provided, however, if Buyer is required to make a payment for any invoice issued pursuant to Section 10.1 on a Day that is not a Payment Business Day (and in this Section 10.2.8 “Payment Business Day” means each Business Day on which commercial banks are normally open to conduct business in France), then the due date for such invoice shall be the immediately succeeding Payment Business Day.

		
	10.3
	Disputed Invoice

		
	10.3.1
	Payment Pending Dispute.  Absent manifest error, each Party invoiced pursuant to Section 10.1.1, 10.1.2, 10.1.3, 10.1.4, or 10.1.5 shall pay all disputed and undisputed amounts due under such invoice without netting or offsetting any amounts owed by the Party receiving the invoice, including taxes (except as provided in Section 11.4), exchange charges, or bank transfer charges.  In the case of manifest error, the correct amount shall be paid disregarding such error, and necessary correction and consequent adjustment shall be made within five (5) Business Days after agreement or determination of the correct amount.

		
	10.3.2
	Timing.  Except with respect to Sections 1.3, 10.3.4, and 14, any invoice may be contested by the receiving Party only pursuant to Section 10.5 or if, within a period of thirteen (13) Months after its receipt thereof, that Party serves notice to the other Party questioning the correctness of such invoice.  Subject to Section 10.5, if no such notice is served, the invoice shall be deemed correct and accepted by both Parties.

		
	10.3.3
	Interest.  The Party who invoiced and received payment of a sum, subsequently determined not to have been payable under this Agreement to such Party, shall pay interest to the other Party on such amount, at a rate per annum equal to two percent (2%) above LIBOR (as in effect on the Day when such sum was originally paid) on and from the Day when such sum was originally paid until the date of its repayment, provided that, without 

60

prejudice to the other terms of this Agreement, if such period lasts longer than ninety (90) Days, the applicable LIBOR rate for each successive term of ninety (90) Days during that period shall be that in effect on the first Day of that ninety (90) Day period.  Interest shall accrue from Day to Day and be calculated on the basis of a three hundred sixty (360) Day year.
		
	10.3.4
	Measurement or Analyzing Errors.  Any errors found in an invoice or credit note which are caused by the inaccuracy of any measuring or analyzing equipment or device shall be corrected in accordance with Exhibit A hereto, as applicable, and shall be settled in the same manner as is set out above in this Section 10.3.

		
	10.4
	Delay in Payment

		
	10.4.1
	Interest.  If either Seller or Buyer fails to make payment of any sum as and when due under this Agreement, it shall pay interest thereon to the other Party at a rate per annum equal to two percent (2%) above LIBOR (as in effect on the Day when such sum was originally due) on and from the Day when payment was due until the date of payment, provided that, without prejudice to the other terms of this Agreement, if such period lasts longer than ninety (90) Days, the applicable LIBOR rate for each successive term of ninety (90) Days during that period shall be that in effect on the first Day of that ninety (90) Day period.  Interest shall accrue from Day to Day and be calculated on the basis of a three hundred sixty (360) Day year.

		
	10.4.2
	Costs and Expenses.  Subject to Section 21.1.12, each Party shall bear its own costs (including attorneys’ or Experts’ fees or costs) in respect of enforcement of such Party’s rights in any Dispute proceeding as a result of the other Party failing to perform or failing timely to perform its obligations under this Agreement including failing timely to make any payment in accordance with this Agreement.

		
	10.5
	Audit Rights

Each Party shall have the right to cause an independent auditor, appointed by such Party at such Party’s sole cost and expense, to audit the books, records and accounts of the other Party that are directly relevant to the determination of any amounts invoiced, charged, or credited by the other Party within the previous twelve (12) Months or as otherwise required by this Agreement.  Such audit shall be conducted at the office where the records are located, during the audited Party’s regular business hours and on reasonable prior notice, and shall be completed within thirty (30) Days after the audited Party’s relevant records have been made available to the auditing Party.  The independent auditor shall be a major international accountancy firm, and the Party appointing such auditor shall cause the auditor to execute a confidentiality agreement acceptable to the Party being audited. If the audit discloses an error in any invoiced amount under this Agreement, then the auditing Party shall, within 

61

thirty (30) Days following completion of the audit pertaining to the affected invoice or statement, provide  notice to the audited Party describing the error and the basis therefor.  Promptly thereafter, the Parties shall commence discussions regarding such error in order to expeditiously, and in good faith, achieve resolution thereof, provided that any adjustments arising from such audit shall be made and all credits or charges finalized within forty-five (45) Days of completion of any relevant audit.
		
	10.6
	Seller’s Right to Suspend Performance

If Seller has not received payment in respect of any amounts due under any invoice(s) under this Agreement totaling in excess of USD thirty million (US$30,000,000) within five (5) Business Days after the due date thereof, or if at any time Buyer is not in compliance with Section 15.3, then without prejudice to any other rights and remedies of Seller arising under this Agreement or by Applicable Laws or otherwise, upon giving five (5) Business Days’ notice to Buyer:
		
	10.6.1
	Seller may suspend delivering any or all subsequent cargoes until the amounts outstanding under such invoice(s) and interest thereon have been paid in full and Buyer is in compliance with Section 15.3.

		
	10.6.2
	In the event of such suspension, Buyer shall not be relieved of any of its obligations under this Agreement, including its obligation to take any LNG, and Section 5.5 will apply with respect to each cargo scheduled in the Annual Delivery Program or Ninety Day Schedule which is not delivered during the suspension.

		
	10.6.3
	During the period that such suspension is effective, Seller shall have no obligation to make available any cargoes to Buyer.

		
	10.7
	Final Settlement

Within sixty (60) Days after expiration of the Term or the earlier termination of this Agreement, Seller and Buyer shall determine the amount of any final reconciliation payment.  After the amount of the final settlement has been determined, Seller shall send a statement to Buyer, or Buyer shall send a statement to Seller, as the case may be, for amounts due under this Section 10.7, and Seller or Buyer, as the case may be, shall pay such final statement no later than twenty (20) Business Days after the date of receipt thereof.
		
	11.
	Taxes

		
	11.1
	Responsibility

Buyer shall indemnify and hold Seller and its direct or indirect owners and Affiliates harmless from any and all Buyer Taxes, and Seller shall indemnify and hold Buyer and its Affiliates harmless from any and all Seller Taxes.

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	11.2
	Seller Taxes

“Seller Taxes” means any taxes imposed from time to time:
		
	(a)
	solely on account of the corporate existence of Seller or its Affiliates;

		
	(b)
	in respect of the property, revenue, income, or profits of Seller or its Affiliates (other than taxes required to be deducted or withheld by Buyer from or in respect of any payments (whether in cash or in kind) under this Agreement);

		
	(c)
	subject to Section 11.5, in the United States of America or any political subdivision thereof, that may be levied or assessed upon the sale, use or purchase of LNG up to and at the Delivery Point;

		
	(d)
	in the United States of America or any political subdivision thereof, that may be levied or assessed upon the export, loading, storage, processing, transfer, transport, ownership of title, or delivery of LNG, up to and at the Delivery Point; and

		
	(e)
	payable by Buyer by reason of a failure by Seller to properly deduct, withhold or pay any taxes described in Section 11.4.

		
	11.3
	Buyer Taxes

“Buyer Taxes” means any taxes imposed from time to time:

		
	(a)
	solely on account of the corporate existence of Buyer or its Affiliates;

		
	(b)
	in respect of the property, revenue, income, or profits of Buyer or its Affiliates (other than taxes required to be deducted or withheld by Seller from or in respect of payments (whether in cash or in kind) under this Agreement);

		
	(c)
	in the United States of America (or any political subdivision thereof) or in any jurisdiction in which any of Buyer’s Discharge Terminals are located (or any political subdivision thereof), or any jurisdiction through which any LNG Tanker transits or on which any LNG Tanker calls (or any political subdivision thereof),  in each case that may be levied or assessed upon the sale, use, purchase, import, unloading, export, loading, storage, processing, transfer, transport, ownership of title, receipt or delivery of LNG after the Delivery Point; and

		
	(d)
	payable by Seller by reason of a failure by Buyer to properly deduct, withhold or pay any taxes described in Section 11.4.

63

		
	11.4
	Withholding Taxes

If Seller or Buyer (in either case, the “Payor” for purposes of this Section 11.4), is required to deduct or withhold taxes from or in respect of any payments (whether in cash or in kind) to the other Party under this Agreement, then:  (a) the Payor shall make such deductions and withholdings; (b) the Payor shall pay the full amount deducted or withheld to the appropriate Governmental Authority in accordance with Applicable Laws; (c) the Payor shall promptly furnish to the other Party the original or a certified copy of a receipt evidencing such payment; and (d) the sum payable by the Payor to the other Party shall be increased by such additional sums as necessary so that after making all required deductions and withholdings of taxes (including deductions and withholdings of taxes applicable to additional sums payable under this Section 11.4), the other Party receives an amount equal to the sum it would have received had no such deductions or withholdings of taxes been made. For the avoidance of doubt, the payment mechanism described in this Section 11.4 does not affect the tax rights and responsibilities among the Parties provided under Section 11.1.
		
	11.5
	Transfer Tax

In the event that the United States or any political subdivision thereof, including the State of Texas or any of its political subdivisions, levies or assesses a value added tax, sales or use tax, or other transfer tax on the transfer of LNG pursuant to this Agreement, Seller shall promptly notify Buyer and shall remit such tax to the appropriate Governmental Authority and Buyer shall reimburse Seller for the amount of such tax.  Pursuant to Section 10.1.5, Seller shall furnish Buyer with an invoice of the taxes required to be reimbursed to Seller.  Buyer shall pay such invoice in accordance with Section 10.2.5.

If Buyer claims an exemption from sales or use tax imposed by the State of Texas or a political subdivision thereof with respect to the transfer of LNG pursuant to this Agreement, Buyer shall provide documentation to Seller demonstrating its entitlement to such exemption. A properly executed Texas resale or exemption certificate shall be deemed to be sufficient documentation demonstrating such exemption, except to the extent Buyer claims an import or export exemption, in which case Buyer shall provide any additional documentation required by Applicable Laws. Buyer shall remain liable for sales and use taxes, including penalties and interest, imposed on Seller as a result of Buyer’s failure to qualify for an exemption claimed by Buyer.
		
	11.6
	Mitigation

Each Party shall use reasonable efforts to take actions or measures requested by the other Party in order to minimize taxes for which the other Party is liable under this Section 11, including filing for available refunds or rebates, provided that the other Party shall pay such Party’s reasonable costs and expenses in relation thereto.

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	11.7
	Refunds

If a Party has made an indemnification payment to the other Party pursuant to this Section 11 with respect to any amount owed or paid by the indemnified Party and the indemnified Party thereafter receives a refund or credit of any such amount, such indemnified Party shall pay to the indemnifying Party the amount of such refund or credit promptly following the receipt thereof.  The indemnified Party shall provide such assistance as the indemnifying Party may reasonably request to obtain such a refund or credit.
		
	12.
	Quality

		
	12.1
	Specification

		
	12.1.1
	LNG delivered under this Agreement shall, when converted into a gaseous state, comply with the following specifications (“Specifications”):

Minimum Gross Heat Content (dry)         1000 BTU/SCF
Maximum Gross Heat Content (dry)        1150 BTU/SCF
Minimum methane (C1)        84.0 MOL%
Maximum H2S        0.25 grains per 100 SCF
Maximum Sulfur        1.35 grains per 100 SCF
Maximum N2        1.5 MOL%
Maximum Ethane (C2)        11 MOL%
Maximum Propane (C3)        3.5 MOL%
Maximum Butane (C4) and heavier        2 MOL%
LNG shall contain no water, active bacteria or bacterial agents (including sulfate-reducing bacteria or acid producing bacteria) or other contaminants or extraneous material.
		
	12.1.2
	With respect to each cargo to be delivered to Buyer under this Agreement, Seller shall provide Buyer with a report indicating Seller’s best estimate of what the actual loaded quality composition of the LNG to be delivered to Buyer in such cargo is likely to be.  Seller shall endeavor to provide such report as early as possible during the thirty (30) Day period immediately preceding the relevant cargo’s Delivery Window.

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	12.2
	Determining LNG Specifications

LNG shall be tested pursuant to Exhibit A to determine whether such LNG complies with the Specifications.
		
	12.3
	Off-Specification LNG

		
	12.3.1
	If Seller, acting as a Reasonable and Prudent Operator, determines prior to loading a cargo that the LNG is expected not to comply with the Specifications (“Off-Spec LNG”) upon loading, then:

		
	(a)
	Seller shall give notice to Buyer of the extent of the expected variance as soon as practicable (but in no case later than the commencement of loading of the cargo);

		
	(b)
	Buyer shall use reasonable efforts, including coordinating with the Transporter and the operator of the Discharge Terminal, to accept such LNG where the LNG would be acceptable to the Transporter and the operator of the Discharge Terminal, each of them acting in their sole discretion (unless Transporter or such operator is Buyer or an Affiliate of Buyer), and would not prejudice the safe and reliable operation of any LNG Tanker, the Discharge Terminal, and any downstream facilities being supplied regasified LNG;

		
	(c)
	if Buyer can accept delivery of such cargo, then Buyer shall notify Seller of Buyer’s estimate of the direct costs to be incurred by Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal in transporting and treating such Off-Spec LNG (or to otherwise make such LNG marketable), and, to the extent Seller agrees to such estimate, Buyer shall take delivery of such cargo, and Seller shall reimburse Buyer for all reasonable documented direct costs incurred by Buyer (including costs owed to any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal in transporting and treating such Off-Spec LNG (or to otherwise make such LNG marketable) prior to and at the Discharge Terminal), provided, however, that Seller’s liability shall not exceed one hundred and twenty percent (120%) of the estimate notified by Buyer and agreed by Seller; and

		
	(d)
	if Buyer determines in good faith that it cannot, using reasonable efforts, receive such cargo, or (1) Seller rejects the cost estimate or (2) Buyer anticipates that it might be liable for costs that would not otherwise be reimbursed pursuant to Section 12.3.1(c), then Buyer shall be entitled to reject such cargo by giving Seller notice of 

66

rejection within seventy-two (72) hours of Buyer’s receipt of Seller’s notice.
		
	12.3.2
	If Off-Spec LNG is delivered to Buyer without Buyer being made aware of the fact that such Off-Spec LNG does not comply with the Specifications, or without Buyer being made aware of the actual extent to which such Off-Spec LNG does not comply with the Specifications, then:

		
	(a)
	if Buyer is able, using reasonable efforts, to transport and treat the Off-Spec LNG to meet the Specifications (or to otherwise make such LNG marketable), then Seller shall reimburse Buyer for all reasonable documented direct costs incurred by Buyer (including direct costs owed to any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal in transporting and treating such Off-Spec LNG received at the Discharge Terminal to meet the Specifications (or to otherwise make such LNG marketable)), in an amount not exceeding one hundred percent (100%) of the product of the delivered quantity of such Off-Spec LNG and the CSP; provided, however, that Buyer, any Affiliate of Buyer, Transporter, and the operator of the Discharge Terminal shall not be required to incur costs in excess of those reimbursable by Seller; or

		
	(b)
	if Buyer determines in good faith that it cannot, using reasonable efforts, transport and treat such Off-Spec LNG to meet the Specifications (or to make such LNG marketable) or the cost of transporting and treating Off-Spec LNG is estimated by Buyer, acting reasonably and in good faith, to exceed one hundred percent (100%) of the product of the quantity of Off-Spec LNG and the CSP, then: (i) Buyer shall be entitled to reject such Off-Spec LNG by giving Seller notice of such rejection as soon as practicable, and in any case within ninety-six (96) hours after (A) Seller notifies Buyer in writing that such LNG is Off-Spec LNG and the actual extent to which such Off-Spec LNG does not comply with the Specifications or (B) Buyer becomes aware that such LNG is Off-Spec LNG, whichever occurs first; (ii) Buyer shall be entitled to dispose of the loaded portion of such Off-Spec LNG (or regasified LNG produced therefrom) in any manner that Buyer, acting in accordance with the standards of a Reasonable and Prudent Operator, deems appropriate including by directing Seller to offload such Off-Spec LNG at the Loading Port; and (iii) Seller shall reimburse Buyer in respect of and indemnify and hold Buyer harmless from all direct loss, damage, costs and expenses incurred by Buyer, any Affiliate of Buyer, or Transporter as a result of the delivery of such Off-Spec LNG, including in connection with the handling, treatment or safe disposal of such Off-Spec LNG or other LNG being held at the Discharge Terminal or being carried 

67

onboard the LNG Tanker which was contaminated by it, cleaning or clearing the LNG Tanker and Discharge Terminal, and damage caused to the LNG Tanker and Discharge Terminal.
		
	12.3.3
	If Buyer rejects a cargo in accordance with Section 12.3.1(d) or 12.3.2(b), Seller shall be deemed to have failed to make available such cargo and Section 5.6.2 shall apply.

		
	13.
	Measurements and Tests

		
	13.1
	LNG Measurement and Tests

LNG delivered to Buyer, and Gas used as fuel by Buyer, pursuant to this Agreement shall be measured and tested in accordance with Exhibit A.
		
	13.2
	Parties to Supply Devices

		
	13.2.1
	Buyer shall supply, operate and maintain, or cause to be supplied, operated and maintained, suitable gauging devices for the LNG tanks of the LNG Tanker, as well as pressure and temperature measuring devices, in accordance with Section 13.3 and Exhibit A, and any other measurement, gauging or testing devices which are incorporated in the structure of such LNG Tanker or customarily maintained on shipboard.

		
	13.2.2
	Seller shall supply, operate and maintain, or cause to be supplied, operated and maintained, devices required for collecting samples and for determining quality and composition of the delivered LNG, in accordance with Section 13.3 and Exhibit A, and any other measurement, gauging or testing devices which are necessary to perform the measurement and testing required hereunder at the Loading Port.

		
	13.3
	Selection of Devices

Each device provided for in this Section 13 shall be selected and verified in accordance with Exhibit A.  Any devices that are provided for in this Section 13 not previously used in an existing LNG trade shall be chosen by written agreement of the Parties and shall be such as are, at the time of selection, accurate and reliable in their practical application. The required degree of accuracy of such devices shall be agreed in writing by Buyer and Seller in advance of their use, and such degree of accuracy shall be verified by an independent surveyor who is agreed by Buyer and Seller.

		
	13.4
	Tank Gauge Tables of LNG Tanker

Buyer shall furnish to Seller, or cause Seller to be furnished, a certified copy of tank gauge tables as described in Exhibit A for each LNG tank of the LNG Tanker and 

68

of tank gauge tables revised as a result of any recalibration of an LNG tank of an LNG Tanker.
		
	13.5
	Gauging and Measuring LNG Volumes Loaded

Volumes of LNG delivered under this Agreement will be determined by gauging the LNG in the LNG tanks of the LNG Tanker immediately before and after loading in accordance with the terms of Exhibit A.
		
	13.6
	Samples for Quality Analysis

Representative samples of the delivered LNG shall be obtained by Seller as provided in Exhibit A.
		
	13.7
	Quality Analysis

The samples referred to in Section 13.6 shall be analyzed, or caused to be analyzed, by Seller in accordance with the terms of Exhibit A, in order to determine the molar fractions of the hydrocarbons and components in the sample.
		
	13.8
	Operating Procedures

		
	13.8.1
	Prior to carrying out measurements, gauging and analyses hereunder, the Party responsible for such operations shall notify the designated representative(s) of the other Party, allowing such representative(s) a reasonable opportunity to be present for all operations and computations; provided, however, that the absence of such representative(s) after notification and reasonable opportunity to attend shall not affect the validity of any operation or computation thereupon performed.

		
	13.8.2
	At the request of either Party, any measurements, gauging and/or analyses provided for in Sections 13.5, 13.6, 13.7 and 13.10.1 shall be witnessed and verified by an independent surveyor agreed upon in writing by Buyer and Seller. The results of verifications and records of measurement shall be maintained in accordance with the terms of Exhibit A.

		
	13.9
	MMBtu Quantity Delivered

The number of MMBtus sold and delivered shall be calculated at the Delivery Point by Seller and witnessed and verified by a mutually appointed independent surveyor agreed upon in writing by the Parties following the procedures set forth in Exhibit A.
		
	13.10
	Verification of Accuracy and Correction for Error

		
	13.10.1
	Each Party shall test and verify the accuracy of its devices at intervals to be agreed between the Parties. In the case of gauging devices of the LNG 

69

Tanker, such tests and verifications shall take place during each scheduled dry-docking, provided that the interval between such dry dockings shall not exceed five (5) years.  Indications from any redundant determining devices should be reported to the Parties for verification purposes.  Each Party shall have the right to inspect and if a Party reasonably questions the accuracy of any device, to require the testing or verification of the accuracy of such device in accordance with the terms of Exhibit A.
		
	13.10.2
	Permissible tolerances of the measurement, gauging and testing devices shall be as described in Exhibit A.

		
	13.11
	Costs and Expenses

		
	13.11.1
	Except as provided in this Section 13.11, all costs and expenses for testing and verifying measurement, gauging or testing devices shall be borne by the Party whose devices are being tested and verified; provided, however, that representatives of the Parties attending such tests and verifications shall do so at the cost and risk of the Party they represent.

		
	13.11.2
	In the event that a Party inspects or requests the testing/verification of any of the other Party’s devices on an exceptional basis in each case as provided in Section 13.10.1, the Party requesting the testing/verification shall bear all costs thereof.

		
	13.11.3
	The costs of the independent surveyor:

		
	(a)
	requested by a Party in accordance with Section 13.8.2 shall be borne by the requesting Party; and

		
	(b)
	referred to in Section 13.9 shall be borne equally by Buyer and Seller.

		
	14.
	Force Majeure

		
	14.1
	Force Majeure

Neither Party shall be liable to the other Party for any delay or failure in performance under this Agreement if and to the extent such delay or failure is a result of Force Majeure.  To the extent that the Party so affected fails to use commercially reasonable efforts to overcome or mitigate the effects of such events of Force Majeure, it shall not be excused for any delay or failure in performance that would have been avoided by using such commercially reasonable efforts. Subject to the provisions of this Section 14, the term “Force Majeure” shall mean any act, event or circumstance, whether of the kind described herein or otherwise, that is not reasonably within the control of, does not result from the fault or negligence of, and would not have been avoided or overcome by the exercise of reasonable diligence by, the Party claiming Force Majeure or an Affiliate of the Party claiming Force Majeure, such Party and, 

70

as applicable, its Affiliate having observed a standard of conduct that is consistent with a Reasonable and Prudent Operator, and that prevents or delays in whole or in part such Party’s performance of one or more of its obligations under this Agreement.
		
	14.1.1
	Force Majeure may include circumstances of the following kind, provided that such circumstances satisfy the definition of Force Majeure set forth above:

		
	(a)
	acts of God, the government, or a public enemy; strikes, lockout, or other industrial disturbances;

		
	(b)
	wars, blockades or civil disturbances of any kind; epidemics, Adverse Weather Conditions, fires, explosions, arrests and restraints of governments or people;

		
	(c)
	the breakdown or failure of, freezing of, breakage or accident to, or the necessity for making repairs or alterations to any facilities or equipment;

		
	(d)
	in respect of the Seller: (i) loss of, accidental damage to, or inaccessibility to or inoperability of (x) the Corpus Christi Facility or any Connecting Pipeline or (y) the liquefaction and loading  facilities at the alternate source agreed by the Parties pursuant to Section 3.1.2 but only with respect to those cargoes which Buyer has agreed may be supplied from such alternate source; and (ii) any event that would constitute an event of force majeure under an agreement between Seller and the operator or operators of any Connecting Pipeline for Gas transportation services, provided however, that an event of force majeure affecting a party to any such agreement shall constitute Force Majeure under this Agreement only to the extent such event meets the definition of Force Majeure in this Section 14.1;

		
	(e)
	in respect of Buyer, events affecting the ability of any LNG Tanker to receive and transport LNG, subject to Section 14.2.3; and

		
	(f)
	the withdrawal, denial, or expiration of, or failure to obtain, any Approval.

		
	14.1.2
	Nothing in this Section 14.1 shall be construed to require a Party to observe a higher standard of conduct than that required of a Reasonable and Prudent Operator as a condition to claiming the existence of Force Majeure.

		
	14.2
	Limitations on Force Majeure

		
	14.2.1
	Indemnity and Payment Obligations.  Notwithstanding Section 14.1, no Force Majeure shall relieve, suspend, or otherwise excuse either Party from 

71

performing any obligation to indemnify, reimburse, hold harmless or otherwise pay the other Party under this Agreement.
		
	14.2.2
	Events Not Force Majeure.  The following events shall not constitute Force Majeure:

		
	(a)
	a Party’s inability to finance its obligations under this Agreement or the unavailability of funds to pay amounts when due in the currency of payment;

		
	(b)
	the unavailability of, or any event affecting, any facilities at or associated with any loading port or unloading port other than the Corpus Christi Facility or any alternate source agreed by the Parties pursuant to Section 3.1.2;

		
	(c)
	the ability of Seller or Buyer to obtain better economic terms for LNG or Gas from an alternative supplier or buyer, as applicable;

		
	(d)
	changes in either Party’s market factors, default of payment obligations or other commercial, financial or economic conditions, including failure or loss of any of Buyer’s or Seller’s Gas or LNG markets;

		
	(e)
	breakdown or failure of plant or equipment caused by normal wear and tear or by a failure to properly maintain such plant or equipment; 

		
	(f)
	the non-availability or lack of economically obtainable Gas reserves;

		
	(g)
	in the case of the Seller, any event arising from an action or omission of (i) any Affiliate of Seller, (ii) the contractor or sub-contractor or agent of Seller or Affiliate of Seller, (iii) the operator of any part of the Corpus Christi Facility to the extent that, had the Seller taken such action or experienced such event, such event would not constitute Force Majeure pursuant to the provisions of this Section 14; and

		
	(h)
	the loss of interruptible or secondary firm transportation service on a Connecting Pipeline or any pipeline upstream of a Connecting Pipeline unless the cause of such loss was an event that would satisfy the definition of Force Majeure hereunder and primary in-the-path transportation service on such pipeline was also interrupted as a result of such event.

		
	14.2.3
	Force Majeure relief in respect of Buyer for an event described in Section 14.1.1(e) affecting a specific LNG Tanker shall only be available with respect to cargoes that are scheduled to be transported on such LNG Tanker in the applicable Ninety Day Schedule or ADP for such Contract Year, or (to the 

72

extent that the ADP for the following Contract Year has been issued by Seller) in the ADP for the following Contract Year.
		
	14.3
	Notification

A Force Majeure event shall take effect at the moment such an event or circumstance occurs.  Upon the occurrence of a Force Majeure event that prevents, interferes with or delays the performance by Seller or Buyer, in whole or in part, of any of its obligations under this Agreement, the Party affected shall give notice thereof to the other Party describing such event and stating the obligations the performance of which are affected (either in the original or in supplemental notices) and stating, as applicable:
		
	14.3.1
	the estimated period during which performance may be prevented, interfered with or delayed, including, to the extent known or ascertainable, the estimated extent of such reduction in performance;

		
	14.3.2
	the particulars of the program to be implemented to resume normal performance under this Agreement; and

		
	14.3.3
	the anticipated portion of Buyer’s AACQ for a Contract Year that will not be made available or taken, as the case may be, by reason of Force Majeure.

Such notices shall thereafter be updated at least monthly during the period of such claimed Force Majeure specifying the actions being taken to remedy the circumstances causing such Force Majeure.
		
	14.4
	Measures

Prior to resumption of normal performance, the Parties shall continue to perform their obligations under this Agreement to the extent not excused by such event of Force Majeure.
		
	14.5
	No Extension of Term

The Term shall not be extended as a result of or by the duration of an event of Force Majeure.
		
	14.6
	Settlement of Industrial Disturbances

Settlement of strikes, lockouts, or other industrial disturbances shall be entirely within the discretion of the Party experiencing such situations, and nothing in this Agreement shall require such Party to settle industrial disputes by yielding to demands made on it when it considers such action inadvisable.
		
	14.7
	Foundation Customer Priority

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Notwithstanding any other provision in this Section 14, during any event of Force Majeure affecting Seller, Seller shall apportion the remaining capacity at the Corpus Christi Facility according to the Foundation Customer Priority.  
“Foundation Customer Priority” means that Buyer and other Foundation Customers will receive priority for receiving LNG from the remaining available LNG production capacity, if any, at the Corpus Christi Facility in the following manner: all such remaining available LNG production capacity at the Corpus Christi Facility (and the LNG produced therefrom) will be allocated, to the extent practicable, to Buyer based upon the proportionate share of Buyer’s AACQ to the sum of all Foundation Customers’ adjusted annual contract quantities (including Buyer), without regard to whether the underlying event affects the Designated Train or another liquefaction train, and without regard to whether the remaining available LNG production capacity includes the Designated Train.
		
	15.
	Liabilities and Indemnification

		
	15.1
	General

Subject to Section 15.2, and without prejudice to any indemnity provided under this Agreement, Seller shall be liable to Buyer, and Buyer shall be liable to Seller, for any loss which has been suffered as a result of the breach by the Party liable of any one or more of its obligations under this Agreement, to the extent that the Party liable should reasonably have foreseen the loss.
		
	15.2
	Limitations on Liability

		
	15.2.1
	Incidental and Consequential Losses.  Neither Party shall be liable to the other Party hereunder as a result of any act or omission in the course of or in connection with the performance of this Agreement, for or in respect of:

		
	(a)
	any indirect, incidental, consequential or exemplary losses;

		
	(b)
	any loss of income or profits;

		
	(c)
	except as expressly provided in this Agreement, any failure of performance or delay in performance to the extent relieved by the application of Force Majeure in accordance with Section 14; or

		
	(d)
	except as expressly provided in this Agreement, any losses arising from any claim, demand or action made or brought against the other Party by a Third Party.

		
	15.2.2
	Exclusive Remedies.  A Party’s sole liability, and the other Party’s exclusive remedy, arising under or in connection with Sections 5.5, 5.6, 5.7, 7.12.3, 7.12.4, 7.14.2(d) and 12.3 and this Section 15 shall be as set forth in each such provision, respectively.

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	15.2.3
	Liquidated Damages.  The Parties agree that it would be impracticable to determine accurately the extent of the loss, damage and expenditure that either Party would have in the circumstances described in Sections 5.5, 5.6, 5.7, 7.12.3 and 7.12.4.  Accordingly, the Parties have estimated and agreed in advance that the sole liability, and exclusive remedy for such circumstances shall be as provided in those Sections, and neither Party shall have additional liability as a result of any such circumstances.  Each amount described in or determined by the provisions of Sections 5.5, 5.6, 5.7, 7.12.3 and 7.12.4 is intended to represent a genuine pre-estimate by the Parties as to the loss or damage likely to be suffered by the Party receiving the payment or benefit in each such circumstance.  Each Party waives any right to claim or assert, in any arbitration or expert determination pursuant to Section 21 in any action with respect to this Agreement, that any of the exclusive remedies set forth in Sections 5.5, 5.6, 5.7, 7.12.3 and 7.12.4 do not represent a genuine pre-estimate by the Parties as to the loss or damage likely to be suffered by the Party receiving the payment or benefit in each such circumstance or otherwise are not valid and enforceable damages.

		
	15.2.4
	Express Remedies.  The Parties agree that Section 15.2.1 shall not impair a Party’s obligation to pay the amounts specified in, or the validity of or limitations imposed by, Sections 5.5, 5.6, 5.7, 7.12.3, 7.12.4, 7.14.2(d) and 12.3.  Neither Party shall have a right to make a claim for actual damages (whether direct or indirect) or other non-specified damages under any circumstances for which an express remedy or measure of damages is provided in this Agreement.

		
	15.2.5
	Remedies in Contract.  Except with respect to claims for injunctive relief under Sections 19 and 21.1.11 and without prejudice to Section 20.2.6, a Party’s sole remedy against the other Party for nonperformance or breach of this Agreement or for any other claim of whatsoever nature arising out of or in relation to this Agreement shall be in contract and no Party shall be liable to another Party (or its Affiliates and contractors and their respective members, directors, officers, employees and agents) in respect of any damages or losses suffered or claims which arise out of, under or in any alleged breach of statutory duty or tortious act or omission or otherwise.

		
	15.2.6
	Seller Aggregate Liability for Certain Events.

		
	(a)
	Notwithstanding any provision herein to the contrary, the maximum Seller Aggregate Liability as of any given date in respect of any occurrence or series of occurrences shall not exceed the Seller Liability Cap.

		
	(b)
	“Seller Aggregate Liability” shall mean, as of any date of determination, any and all liability of Seller to Buyer under this Agreement, excluding (i) any Seller liabilities under this Agreement 

75

for which Seller has already made payment to Buyer as of such date, (ii) any liability caused by the gross negligence or willful misconduct of Seller or an Affiliate of Seller and (iii) any amounts related to an indemnity obligation of Seller.
		
	(c)
	The “Seller Liability Cap” shall be an amount (in USD) equal to:

		
	(i)
	on or prior to the fifth (5th) anniversary of the Date of First Commercial Delivery, USD one hundred and thirty-one million five hundred and seven thousand (US$131,507,000); and

		
	(ii)
	after the fifth (5th) anniversary of the Date of First Commercial Delivery, USD one hundred and seventy-five million three hundred and forty two thousand (US$175,342,000).

		
	15.2.7
	EXCEPT FOR WARRANTIES OF TITLE AND NO LIENS OR ENCUMBRANCES, AND SUBJECT TO THE PROVISIONS OF THIS AGREEMENT CONCERNING THE QUALITY OF LNG TO BE DELIVERED UNDER THIS AGREEMENT, SELLER EXPRESSLY NEGATES ANY WARRANTY WITH RESPECT TO LNG DELIVERED UNDER THIS AGREEMENT, WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY WITH RESPECT TO CONFORMITY TO SAMPLES, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

		
	15.3
	Buyer’s Credit; Credit Support

		
	15.3.1
	Buyer shall at all times maintain an Acceptable Credit Rating or provide or cause to be provided a Guaranty.  In the event a guarantor that has provided a guaranty hereunder no longer has an Acceptable Credit Rating or is otherwise no longer an Acceptable Guarantor, Buyer shall provide either (a) a replacement Guaranty or if unable to comply with the requirements of a Guaranty because no Guarantor exists, (b) an alternative credit support acceptable to Lenders at all times. Any Guaranty required to be delivered to Seller pursuant to this Section 15.3.1 shall be delivered within ten (10) Business Days of such requirement arising.

		
	15.3.2
	If Buyer, or Buyer’s Guarantor, merges or consolidates, sells all or substantially all of its assets, novates or assigns this Agreement, then the surviving entity, asset purchaser or assignee, as the case may be, shall either have and maintain an Acceptable Credit Rating or upon ceasing to have such rating, provide or cause to be provided a Guaranty. Any Guaranty required to be delivered to Seller pursuant to this Section 15.3.2 shall be delivered within twenty (20) Business Days of such requirement arising. 

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	15.4
	Third Party Liability

With respect to Third Party liabilities:
		
	(a)
	If any Third Party shall notify either Party (the “Indemnified Party”) with respect to any matter (a “Third Party Claim”) that may give rise to a claim for indemnification against the other Party (the “Indemnifying Party”) under this Section 15 or elsewhere in this Agreement, then the Indemnified Party shall promptly notify the Indemnifying Party thereof in writing; provided, however, that no delay on the part of the Indemnified Party in notifying the Indemnifying Party shall relieve the Indemnifying Party from any obligation hereunder unless (and then solely to the extent) the Indemnifying Party thereby is materially prejudiced.

		
	(b)
	The Indemnifying Party will have the right to defend against the Third Party Claim with counsel of its choice reasonably satisfactory to the Indemnified Party so long as (i) the Indemnifying Party notifies the Indemnified Party in writing within fifteen (15) Days after the Indemnified Party has given notice of the Third Party Claim that the Indemnifying Party will indemnify the Indemnified Party from and against any damages the Indemnified Party may suffer resulting from, arising out of, relating to, in the nature of, or caused by the Third Party Claim; (ii) the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the Indemnified Party that the Indemnifying Party will have the financial resources to defend against the Third Party Claim and fulfill its indemnification obligations hereunder; (iii) the Third Party Claim involves only money damages and does not seek an injunction or other equitable relief; (iv) settlement of, or an adverse judgment with respect to, the Third Party Claim is not in the good faith judgment of the Indemnified Party, likely to establish a precedential custom or practice materially adverse to the continuing business interests of the Indemnified Party; and (v) the Indemnifying Party conducts the defense of the Third Party Claim actively and diligently.

		
	(c)
	So long as the Indemnifying Party is conducting the defense of the Third Party Claim in accordance with Section 15.4(b):  (i) the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of the Third Party Claim; (ii) the Indemnified Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld); and (iii) the 

77

Indemnifying Party will not consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld).
		
	(d)
	In the event any of the conditions in Section 15.4(b) is or becomes unsatisfied, or a conflict arises, with regard to the Third Party Claim, between the Indemnified Party and the Indemnifying Party in respect of such Third Party Claim the Indemnified Party may defend against the Third Party Claim in any manner it reasonably may deem appropriate.

		
	(e)
	If either Party gives notice to the other Party of a Third Party Claim pursuant to the provisions of Section 15.4(a) and the notified Party does not give notice that it will indemnify the notifying Party in the manner set out in Section 15.4(b), the notifying Party shall nevertheless send copies of all pleadings and other documents filed in any such Third Party lawsuit to the notified Party and such notified Party may have the right to participate in the defense of the Third Party Claim in any manner permitted by Applicable Law.

		
	15.5
	Seller’s Insurance

		
	15.5.1
	Seller shall obtain and maintain or cause to be obtained and maintained:

		
	(a)
	insurance for the Corpus Christi Facility to the extent required by Applicable Law, and

		
	(b)
	additional insurance, as is reasonably necessary and available on reasonable commercial terms, against such other risks and at such levels as a Reasonable and Prudent Operator of a liquefaction terminal would obtain.

		
	15.5.2
	Seller shall obtain or cause to be obtained the insurance required by Section 15.5.1 from a reputable insurer (or insurers) reasonably believed to have adequate financial reserves.  Seller shall exercise its best efforts, or shall cause the applicable insured Person to use its best efforts, to collect any amount due under such insurance policies.

		
	15.6
	Buyer’s Insurance

Buyer shall ensure that insurances are procured and maintained for each LNG Tanker in accordance with the following provisions.  In all cases, such insurance shall establish insurance coverages consistent with insurances to the standards which a ship owner operating reputable LNG vessels, as a Reasonable and Prudent Operator, should observe in insuring LNG vessels of similar type, size, age and trade as such LNG Tanker.  In this regard:

78

		
	(a)
	Hull and Machinery Insurance shall be placed and maintained with reputable marine underwriters; and

		
	(b)
	Protection & Indemnity Insurance (“P&I Insurance”) shall be placed and maintained with full P&I indemnity cover in the ordinary course from a P&I Club, and such LNG Tanker shall be entered for insurance with a P&I Club, including pollution liability standard for LNG vessel and Certificate of Financial Responsibility.

		
	16.
	Safety

		
	16.1
	General

The Parties recognize the importance of securing and maintaining safety in all matters contemplated in this Agreement, including the construction and operation of their respective facilities and the LNG Tankers and transportation of LNG. It is their respective intentions to secure and maintain high standards of safety in accordance with the generally accepted standards prevailing in the LNG and LNG transportation industries from time to time.
		
	16.2
	Third Parties

Both Parties shall endeavor to ensure that their respective employees, agents, operators, Transporter, contractors and suppliers shall have due regard to safety and abide by the relevant regulations while they are performing work and services in connection with the performance of this Agreement, including such work and services performed within and around the area of the Corpus Christi Facility and on board the LNG Tankers.
		
	17.
	Representations, Warranties and Undertakings

		
	17.1
	Representations and Warranties of Buyer

As of the Effective Date and until the expiration or termination of this Agreement, Buyer represents, undertakes and warrants that:
		
	17.1.1
	Buyer is and shall remain duly formed and in good standing under the laws of France;

		
	17.1.2
	Buyer has the requisite power, authority and legal right to execute and deliver, and to perform its obligations under, this Agreement;

		
	17.1.3
	Buyer has not incurred any liability to any financial advisor, broker or finder for any financial advisory, brokerage, finder’s or similar fee or commission in connection with the transactions contemplated by this Agreement for which Seller or any of its Affiliates could be liable; and

79

		
	17.1.4
	neither the execution, delivery, nor performance of this Agreement violates or will violate, results or will result in a breach of or constitutes or will constitute a default under any provision of Buyer’s organizational documents, any law, judgment, order, decree, rule, or regulation of any court, administrative agency, or other instrumentality of any Governmental Authority or of any other material agreement or instrument to which Buyer is a party.

		
	17.2
	Representations and Warranties of Seller

As of the Effective Date and until the expiration or termination of this Agreement, Seller represents, undertakes and warrants that:
		
	17.2.1
	Seller is and shall remain duly formed and in good standing under the laws of the State of Delaware and duly qualified to do business in the State of Texas;

		
	17.2.2
	Seller has the requisite power, authority and legal right to execute and deliver, and to perform its obligations under this Agreement;

		
	17.2.3
	Seller has not incurred any liability to any financial advisor, broker or finder for any financial advisory, brokerage, finder’s or similar fee or commission in connection with the transactions contemplated by this Agreement for which Buyer or any of its Affiliates could be liable; and

		
	17.2.4
	neither the execution, delivery, nor performance of this Agreement, violates or will violate, results or will result in a breach of, or constitutes or will constitute a default under, any provision of Seller’s organizational documents, any law, judgment, order, decree, rule, or regulation of any court, administrative agency, or other instrumentality of any Governmental Authority or of any other material agreement or instrument to which Seller is a party.

		
	17.3
	Business Practices

Each Party represents and warrants to the other, as of the Effective Date, that it has not taken any actions that would, if such actions were undertaken after the Effective Date, conflict with such Party’s obligations under Section 26.3.
		
	18.
	Exchange of Information

The Parties shall maintain close communication and mutually provide and shall use reasonable efforts to exchange available information directly relevant to the fulfillment of the terms and conditions of this Agreement.

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	19.
	Confidentiality

		
	19.1
	Duty of Confidentiality

The (i) terms of this Agreement and (ii) any information disclosed by either Party to the other Party in connection with this Agreement which is not:
		
	(a)
	already known to the recipient from sources other than the other Party;

		
	(b)
	already in the public domain (other than as a result of a breach of the terms of this Section 19.1); or

		
	(c)
	independently developed by the recipient;

shall be “Confidential Information” and shall, unless otherwise agreed in writing by the disclosing Party, be kept confidential and shall not be used by the receiving Party other than for a purpose connected with this Agreement or, except as provided below, disclosed to Third Parties by the receiving Party.

		
	19.2
	Permitted Disclosures

		
	19.2.1
	The Confidential Information, which either Party receives from the other, may be disclosed by such Party:

		
	(a)
	to any Person who is such Party’s legal counsel, other professional consultant or adviser, Transporter, insurer, accountant or construction contractor; provided that such disclosure is solely to assist the purpose for which such Person was so engaged;

		
	(b)
	if required and to the extent required by the rules of any recognized stock exchange or agency established in connection therewith upon which the securities of such Party or a company falling within Section 19.2.1(e) are quoted;

		
	(c)
	if required and to the extent required by the U.S. Department of Energy;

		
	(d)
	without limiting Section 19.2.1(c), if required and to the extent required by any Applicable Laws, or such Party becomes legally required (by oral questions, interrogatories, request for information or documents, orders issued by any Governmental Authority or any other process) to disclose such information, or to the extent necessary to enforce Section 21.1 or 21.2 or any arbitration award  or binding decision of an Expert (including by filing Confidential Information 

81

in proceedings before a court or other competent judicial authority) or to enforce other rights of a party to the Dispute; provided that such Party shall, to the extent practicable, give prior notice to the other Party of the requirement and the terms thereof and shall cooperate with the other Party to minimize the disclosure of the information, seek a protective order or other appropriate remedy, and if such protective order or other remedy is not obtained, then such Party will furnish only that portion of such information that it is legally required to furnish;
		
	(e)
	to any of its Affiliates or shareholders (or any company involved in the provision of advice to any such Affiliate or shareholder for the purposes of this Agreement) and any employee of that Party or of a company to which disclosure is permitted pursuant to this Section 19.2.1(e);

		
	(f)
	to any bona fide intended assignees of a Party’s interests under this Agreement;

		
	(g)
	to any Third Party as reasonably necessary for the performance of a Party’s obligations under this Agreement;

		
	(h)
	to any arbitrator appointed in accordance with Section 21.1.4, or Expert appointed pursuant to Section 21.2.1, or to any other party to an arbitration or Expert proceeding arising under or in connection with this Agreement, or to any witnesses appearing in an arbitration under Section 21.1 or in an Expert proceeding under Section 21.2; or

		
	(i)
	to any Person reasonably required to see such Confidential Information, including the Lenders, in connection with any bona fide financing or offering or sale of securities by Seller or Buyer or any Affiliate of Seller or Buyer or any Affiliate of any of the shareholders of Seller or Buyer, to comply with the disclosure or other requirements of Applicable Law or of financial institutions or other participants (including rating agencies) in such financing, offering or sale.

		
	19.2.2
	The Party making the disclosure shall ensure that any Person listed in Section 19.2.1(a), (e), (f), (g), (h) or (i) to which it makes the disclosure (excluding any legal counsel, arbitrator or Expert already bound by confidentiality obligations) undertakes to hold such Confidential Information subject to confidentiality obligations equivalent to those set out in Section 19.1.  In the case of a disclosure to an employee made in accordance with Section 19.2.1(e), the undertaking shall be given by the company on its own behalf and in respect of all its employees.

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	19.2.3
	Seller may disclose Confidential Information to its Foundation Customers related to scheduling, operations and other relevant technical information to comply with Seller’s performance of Section 8, only to the extent necessary to ensure the effective implementation thereof.

		
	19.2.4
	No press release concerning the execution of this Agreement or resolution of any Disputes shall be issued unless agreed by the Parties.

		
	19.3
	Duration of Confidentiality

The foregoing obligations with regard to the Confidential Information shall remain in effect for three (3) years after this Agreement is terminated or expires.
		
	20.
	Default and Termination 

		
	20.1
	Termination Events

The following circumstances (each, a “Termination Event”) shall give rise to the right for either or both of Seller and Buyer (as the case may be) to terminate this Agreement:
		
	20.1.1
	in respect of either Party, if a Bankruptcy Event has occurred with respect to the other Party;

		
	20.1.2
	in respect of either Party, if the other Party fails to pay or cause to be paid any amount or amounts in the aggregate due that are in excess of USD thirty million (US$30,000,000), for a period of ten (10) Days or more following the due date of the relevant invoice;

		
	20.1.3
	in respect of either Party, violation of Sections 17.3 or 26.3.1(ii) by the other Party;

		
	20.1.4
	in respect of either Party, in accordance with Section 2.2.5 of the Agreement;

		
	20.1.5
	in respect of Seller, if Buyer fails to comply with (a) Section 15.3.1, (b) Section 15.3.2 or (c) Section 22 of the Agreement;

		
	20.1.6
	in respect of Seller, if Buyer or any Guarantor under any Guaranty  required to be delivered to Seller pursuant to the terms of this Agreement fails to execute any Direct Agreement with Seller’s Lenders within sixty (60) Days after Seller’s request thereof, provided that such Direct Agreement complies with the requirements in Section 22.4.2;

		
	20.1.7
	in respect of Buyer, if (a) Seller has declared Force Majeure one or more times and the interruptions resulting from such Force Majeure total twenty-four (24) Months during any thirty-six (36) Month period, and (b) such Force Majeure has resulted in Seller being prevented from making available fifty 

83

percent (50%) or more of the annualized ACQ during such periods of Force Majeure; 
		
	20.1.8
	in respect of Seller, if (a) Buyer has declared Force Majeure one or more times and the interruptions resulting from such Force Majeure total twenty-four (24) Months during any thirty-six (36) Month period, and (b) such Force Majeure has resulted in Buyer being prevented from taking fifty percent (50%) or more of the annualized ACQ during such periods of Force Majeure;

		
	20.1.9
	in respect of Buyer, pursuant to the terms of Section 4.4.3;

20.1.10in respect of Seller, violation of Section 26.1 by Buyer;
20.1.11in respect of Seller, violation of Section 26.2 by Buyer;
20.1.12in respect of Buyer, if Seller fails to make available (as such obligation for any cargo is set forth in Section 5.6.1) fifty percent (50%) of the cargoes scheduled in any given twelve (12) Month period; and
20.1.13in respect of Seller, if Buyer fails to take (as such obligation for any cargo is set forth in Section 5.5.1) fifty percent (50%) of the cargoes scheduled in any given twelve (12) Month period.
		
	20.2
	Termination

		
	20.2.1
	Notice of Termination.  Upon the occurrence of any Termination Event, subject to Section 20.2.5, the Party which has the right under Section 20.1 to terminate this Agreement (“Terminating Party”) may give notice thereof to the other Party, specifying in reasonable detail the nature of such Termination Event (except that any termination notice with respect to a Termination Event identified in Section 20.1.12 or 20.1.13 shall only be valid if notice thereof is provided within ninety (90) Days after such Termination Event first arose).

		
	20.2.2
	Timing.  Except with respect to the Termination Events described in Section 20.2.3, at any time after the expiry of a period of forty-five (45) Days after the Terminating Party gave notice of a Termination Event pursuant to Section 20.2.1, unless the circumstances constituting the Termination Event have been fully remedied or have ceased to apply, the Terminating Party may terminate this Agreement with immediate effect by giving notice of such termination to the other Party.

		
	20.2.3
	Certain Events.  Upon the occurrence of a Termination Event described in Sections 20.1.1, 20.1.3, 20.1.5, 20.1.6, 20.1.7, 20.1.8, 20.1.10, 20.1.11, 20.1.12, and 20.1.13 the Terminating Party’s notice pursuant to Section 20.2.1 shall terminate this Agreement immediately.  

84

		
	20.2.4
	Rights Accrued Prior to Termination.  Termination of this Agreement shall be without prejudice to:

		
	(a)
	the rights and liabilities of the Parties accrued prior to or as a result of such termination; and 

		
	(b)
	claims for breaches of Section 19 that occur during the three (3) year period after termination of this Agreement.

		
	20.2.5
	Limits to Termination.  Neither Seller nor Buyer, respectively, may terminate this Agreement if the Termination Event occurs solely because of a breach by the non-terminating Party arising from events for which that non-terminating Party would otherwise be entitled to terminate this Agreement.

		
	20.2.6
	Termination for Credit Events.  Seller hereby waives any right it may have to seek monetary damages arising solely as a result of a Termination Event set forth in Section 20.1.5(a), provided that such Termination Event is not a result of Buyer, Guarantor and/or its Affiliate or their successor intending to avoid its liabilities or obligations under this Agreement or intentionally failing to deliver a Guaranty or alternative credit support.  This waiver shall be without prejudice to any other right available to Seller following a breach by Buyer of any of its obligations under this Agreement, including Seller’s rights of suspension.  Nothing in this Section 20.2.6 shall act as a waiver of any right Seller may have to seek monetary damages in respect of any other Termination Event, whether or not the circumstances giving rise to such other Termination Event would also have entitled Seller to terminate the Agreement pursuant to Section 20.1.5(a).

		
	20.3
	Survival

The following provisions shall survive expiration or termination of this Agreement: Sections 1, 10, 11, 13.8.2, 15, 19 (to the extent provided therein),  and 21 to 26, in addition to this Section 20.3.
		
	21.
	Dispute Resolution and Governing Law

		
	21.1
	Dispute Resolution

		
	21.1.1
	Arbitration. Any Dispute (other than a Dispute initially submitted to an Expert under Section 21.2.1) shall be exclusively and definitively resolved through final and binding arbitration, it being the intention of the Parties that this is a broad form arbitration agreement designed to encompass all possible claims and disputes under this Agreement.

85

		
	21.1.2
	Rules. The arbitration shall be conducted in accordance with the International Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) (as then in effect).

		
	21.1.3
	Number of Arbitrators.  The arbitral tribunal shall consist of three (3) arbitrators, who shall endeavor to complete the final hearing in the arbitration within six (6) Months after the appointment of the last arbitrator.

		
	21.1.4
	Method of Appointment of the Arbitrators.  If there are only two (2) parties to the Dispute, then each party to the Dispute shall appoint one (1) arbitrator within thirty (30) Days of the filing of the arbitration, and the two arbitrators so appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute.  If a party to the Dispute fails to appoint its party-appointed arbitrator or if the two party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then the AAA shall serve as the appointing authority and shall appoint the remainder of the three arbitrators not yet appointed.  If the arbitration is to be conducted by three arbitrators and there are more than two parties to the Dispute, then within thirty (30) Days of the filing of the arbitration, all claimants shall jointly appoint one arbitrator and all respondents shall jointly appoint one arbitrator, and the two arbitrators so appointed shall select the presiding arbitrator within thirty (30) Days after the latter of the two arbitrators has been appointed by the parties to the Dispute.  For the purposes of appointing arbitrators under this Section 21, (a) Buyer, any guarantor under any guaranty required to be delivered to Seller pursuant to the terms of this Agreement and all persons whose interest in this Agreement derives from them shall be considered as one party; and (b) Seller and all persons whose interest in this Agreement derives from Seller shall be considered as one party.  If either all claimants or all respondents fail to make a joint appointment of an arbitrator, or if the party-appointed arbitrators cannot reach an agreement on the presiding arbitrator within the applicable time period, then the AAA shall serve as the appointing authority and shall appoint the remainder of the three (3) arbitrators not yet appointed.

		
	21.1.5
	Consolidation.  If the Parties initiate multiple arbitration proceedings under this Agreement and/or under any guaranty required to be delivered to Seller pursuant to the terms of this Agreement, the subject matters of which are related by common questions of law or fact and which could result in conflicting awards or obligations, then either Party may request prior to the appointment of the arbitrators for such multiple or subsequent Disputes that all such proceedings be consolidated into a single arbitral proceeding.  Such request shall be directed to the AAA, which shall consolidate appropriate proceedings into a single proceeding unless consolidation would result in undue delay for the arbitration of the Disputes.

86

		
	21.1.6
	Place of Arbitration.  Unless otherwise agreed by all parties to the Dispute, the place of arbitration shall be New York, New York.

		
	21.1.7
	Language.  The arbitration proceedings shall be conducted in the English language, and the arbitrators shall be fluent in the English language.

		
	21.1.8
	Entry of Judgment.  The award of the arbitral tribunal shall be final and binding.  Judgment on the award of the arbitral tribunal may be entered and enforced by any court of competent jurisdiction.  The Parties agree that service of process for any action to enforce an award may be accomplished according to the procedures of Section 25, as well as any other procedure authorized by law.

		
	21.1.9
	Notice.  All notices required for any arbitration proceeding shall be deemed properly given if given in accordance with Section 25.

21.1.10Qualifications and Conduct of the Arbitrators.  All arbitrators shall be and remain at all times wholly impartial, and, once appointed, no arbitrator shall have any ex parte communications with any of the parties to the Dispute concerning the arbitration or the underlying Dispute other than communications directly concerning the selection of the presiding arbitrator, where applicable.
21.1.11Interim Measures.  Any party to the Dispute may apply to a court in Harris County, Texas for interim measures (a) prior to the constitution of the arbitral tribunal (and thereafter as necessary to enforce the arbitral tribunal’s rulings); or (b) in the absence of the jurisdiction of the arbitral tribunal to rule on interim measures in a given jurisdiction.  The Parties agree that seeking and obtaining such interim measures shall not waive the right to arbitration.  The arbitrators (or in an emergency the presiding arbitrator acting alone in the event one or more of the other arbitrators is unable to be involved in a timely fashion) may grant interim measures including injunctions, attachments and conservation orders in appropriate circumstances, which measures may be immediately enforced by court order.  Hearings on requests for interim measures may be held in person, by telephone, by video conference or by other means that permit the parties to the Dispute to present evidence and arguments.
21.1.12Costs and Attorneys’ Fees.  The arbitral tribunal is authorized to award costs of the arbitration in its award, including: (a) the fees and expenses of the arbitrators; (b) the costs of assistance required by the tribunal, including its Experts; (c) the fees and expenses of the administrator; (d) the reasonable costs for legal representation of a successful Party; and (e) any such costs incurred in connection with an application for interim or emergency relief and to allocate those costs between the parties to the Dispute.  The costs of 

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the arbitration proceedings, including attorneys’ fees, shall be borne in the manner determined by the arbitral tribunal.
21.1.13Interest.  The award shall include pre-award and post-award interest, as determined by the arbitral award, from the date of any default or other breach of this Agreement until the arbitral award is paid in full.  Interest shall accrue at a rate per annum equal to two percent (2%) above LIBOR (as in effect on the Day such award was issued) on and from the Day when such award was issued until the date of its repayment, provided that, without prejudice to the other terms of this Agreement, if such period lasts longer than ninety (90) Days, the applicable LIBOR rate for each successive term of ninety (90) Days during that period shall be that in effect on the first Day of that ninety (90) Day period.  Interest shall accrue from Day to Day and be calculated on the basis of a three hundred sixty (360) Day year.
21.1.14Currency of Award.  The arbitral award shall be made and payable in USD, free of any tax or other deduction.
21.1.15Waiver of Challenge to Decision or Award.  To the extent permitted by law, the Parties hereby waive any right to appeal from or challenge any arbitral decision or award, or to oppose enforcement of any such decision or award before a court or any governmental authority, except with respect to the limited grounds for modification or non-enforcement provided by any applicable arbitration statute or treaty.
21.1.16Confidentiality.  Any arbitration or Expert determination relating to a Dispute (including an arbitral award, a settlement resulting from an arbitral award, documents exchanged or produced during an arbitration or Expert proceeding, and memorials, briefs or other documents prepared for the arbitration or Expert proceeding) shall be Confidential Information subject to the confidentiality provisions of Section 19; provided, however, that breach of such confidentiality provisions shall not void any settlement, determination or award.
		
	21.2
	Expert Determination

		
	21.2.1
	General.  In the event of any disagreement between the Parties regarding a measurement under Exhibit A hereto or any other Dispute which the Parties agree to submit to an Expert (in either case, a “Measurement Dispute”), the Parties hereby agree that such Measurement Dispute shall be resolved by an Expert selected as provided in this Section 21.2.1.  The Expert is not an arbitrator of the Measurement Dispute and shall not be deemed to be acting in an arbitral capacity.  The Party desiring an expert determination shall give the other Party to the Measurement Dispute notice of the request for such determination.  If the Parties to the Measurement Dispute are unable to agree upon an Expert within ten (10) Days after receipt of the notice of request for 

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an expert determination, then, upon the request of any of the Parties to the Measurement Dispute, the International Centre for Expertise of the International Chamber of Commerce (“ICC”) shall appoint such Expert and shall administer such expert determination through the ICC’s Rules for Expertise.  The Expert shall be and remain at all times wholly impartial, and, once appointed, the Expert shall have no ex parte communications with any of the Parties to the Measurement Dispute concerning the expert determination or the underlying Measurement Dispute.  The Parties to the Measurement Dispute shall cooperate fully in the expeditious conduct of such expert determination and provide the Expert with access to all facilities, books, records, documents, information and personnel necessary to make a fully informed decision in an expeditious manner.  Before issuing a final decision, the Expert shall issue a draft report and allow the Parties to the Measurement Dispute to comment on it.  The Expert shall endeavor to resolve the Measurement Dispute within thirty (30) Days (but no later than sixty (60) Days) after his appointment, taking into account the circumstances requiring an expeditious resolution of the matter in dispute. 
		
	21.2.2
	Final and Binding. The Expert’s decision shall be final and binding on the Parties to the Measurement Dispute unless challenged in an arbitration pursuant to Section 21.1 within thirty (30) Days of the date the Expert’s decision.  If challenged, (a) the decision shall remain binding and be implemented unless and until finally replaced by an award of the arbitrators; (b) the decision shall be entitled to a rebuttable presumption of correctness; and (c) the Expert shall not be appointed in the arbitration as an arbitrator or as advisor to either Party without the written consent of both Parties.

		
	21.2.3
	Arbitration of Expert Determination.  In the event that a Party requests expert determination for a Measurement Dispute which raises issues that require determination of other matters in addition to correct measurement under Exhibit A hereto, then either Party may elect to refer the entire Measurement Dispute for arbitration under Section 21.1.1.  In such case, the arbitrators shall be competent to make any measurement determination that is part of a Dispute.  An expert determination not referred to arbitration shall proceed and shall not be stayed during the pendency of an arbitration.

		
	21.3
	Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New York (United States of America) without regard to principles of conflict of laws that would specify the use of other laws.
		
	21.4
	Immunity

		
	21.4.1
	Each Party, as to itself and its assets, hereby irrevocably, unconditionally, knowingly and intentionally waives any right of immunity (sovereign or 

89

otherwise) and agrees not to claim, or assert any immunity with respect to the matters covered by this Agreement in any arbitration, Expert proceeding, or other action with respect to this Agreement, whether arising by statute or otherwise, that it may have or may subsequently acquire, including rights under the doctrines of sovereign immunity and act of state, immunity from legal process (including service of process or notice, pre-judgment or pre-award attachment, attachment in aid of execution, or otherwise), immunity from jurisdiction or judgment of any court, arbitrator, Expert or tribunal (including any objection or claim on the basis of inconvenient forum), and immunity from enforcement or execution of any award or judgment or any other remedy.
		
	21.4.2
	Each Party irrevocably, unconditionally, knowingly and intentionally:

		
	(a)
	agrees that the execution, delivery and performance by it of this Agreement constitute private and commercial acts rather than public or governmental acts;

		
	(b)
	consents in respect of the enforcement of any judgment against it in any such proceedings in any jurisdiction and to the giving of any relief or the issue of any process in connection with such proceedings (including the making, enforcement or execution of any such judgment or any order arising out of any such judgment against or in respect of any property whatsoever irrespective of its use or intended use).

		
	22.
	Assignments

		
	22.1
	Merger, Consolidation

This Agreement shall be binding upon and inure to the benefit of any successor to each of Seller and Buyer by merger, or consolidation, provided in the case of Buyer, the successor shall either have and maintain an Acceptable Credit Rating or provide or cause to be provided a Guaranty prior to such event. 
		
	22.2
	Assignment by Buyer

		
	22.2.1
	Prior Written Consent.  Buyer may novate or assign this Agreement in its entirety to another Person, for the remainder of the Term, upon the prior written consent of Seller (which consent shall not be unreasonably withheld or delayed), provided that:

		
	(a)
	unless such Person has an Acceptable Credit Rating, a Guaranty is provided to Seller prior to such novation or assignment; and

90

		
	(b)
	such assignee assumes all of the obligations of Buyer under this Agreement commencing as of the date of the assignment by execution of a copy of this Agreement in its own name (countersigned by Seller) or by execution of a binding assignment and assumption agreement which is enforceable by Seller.

		
	22.2.2
	Without Prior Consent.  Buyer may novate or assign this Agreement in its entirety, for the remainder of the Term, without Seller’s prior consent, to an Affiliate of Buyer, provided that:

		
	(a)
	such assignee shall have an Acceptable Credit Rating or provide or cause to be provided a Guaranty to Seller prior to such novation or assignment;

		
	(b)
	such Affiliate assignee assumes all of the obligations of Buyer under this Agreement commencing as of the date of the novation or the assignment by execution of a copy of this Agreement in its own name (countersigned by Seller) or by execution of a binding assignment and assumption agreement which is enforceable by Seller; and

		
	(c)
	performance of this Agreement by Seller with such Affiliate assignee would comply with Applicable Laws and all relevant Approvals.

		
	22.2.3
	Further Obligations.  Upon a novation or assignment in whole by Buyer in accordance with this Section 22.2, the assignor shall be released from all further obligations, duties and liabilities under this Agreement, other than any obligations, duties and liabilities arising prior to the date of effectiveness of such novation or assignment.

		
	22.3
	Assignments by Seller

		
	22.3.1
	Prior Written Consent.  Seller may novate or assign this Agreement in its entirety, for the remainder of the Term, upon the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed), provided that the assignee assumes all of the obligations of Seller under this Agreement commencing as of the date of the assignment or novation by execution of a copy of this Agreement in its own name (countersigned by Buyer) or by execution of a binding assignment and assumption agreement which is enforceable by Buyer;  provided, however, that if the assignee is an Affiliate of Seller, will be the sole owner of the Corpus Christi Facility and will have all Approvals and access to export authorizations equivalent to the Export Authorizations to the extent needed to perform Seller’s obligations under this Agreement, Buyer shall be deemed to consent to such assignment or novation of this Agreement.

91

		
	22.3.2
	Pursuant to Direct Agreement. At any time that an event of default has occurred and is continuing under any loan agreements to which Seller is a party, Seller may novate or assign this Agreement in its entirety, for the remainder of the Term, to the extent that Buyer has so consented in the Direct Agreement.

		
	22.3.3
	Further Obligations.  Upon a novation or assignment by Seller, in accordance with this Section 22.3, the assignor shall be released from all further obligations, duties and liabilities under this Agreement, other than any obligations, duties and liabilities arising prior to the date of effectiveness of such novation or assignment.

		
	22.4
	Seller Financing

		
	22.4.1
	Lender Financing.  Seller shall have the right to obtain financing from Lenders.  In connection with any financing or refinancing of the Corpus Christi Facility, Buyer, shall, if so requested by Seller, deliver to Seller’s Lenders or the agent acting on behalf of any such Lenders (“Lenders’ Agent”) certified copies of its corporate charter and by-laws, resolutions, incumbency certificates, financial statements, and such other items as available and upon reasonable request by Lenders or Lenders’ Agent.  Buyer shall not be required to provide any documents or information which would cause it to be in breach of Applicable Laws, including the rules of any recognized stock exchange on which Buyer’s stock is quoted.

		
	22.4.2
	Assignment as Security.  Buyer further acknowledges and agrees that Seller may assign, transfer, or otherwise encumber, all or any of its rights, benefits and obligations under this Agreement or any guaranty required to be delivered to Seller pursuant to the terms of this Agreement to such Lenders or Lenders’ Agent as security for its obligations to Lenders.  Accordingly, upon Seller’s request pursuant to a notice hereunder, Buyer shall enter into, and shall cause any guarantor under any guaranty required to be delivered to Seller pursuant to the terms of this Agreement to enter into, direct agreements (each, a “Direct Agreement”) that:

		
	(a)
	provide for the assignment and transfer of the assigning Person’s rights and obligations under this Agreement or the relevant other agreement to a nominee of Lender following a default by the assigning Person under its lending arrangement; and

		
	(b)
	(i) are substantially in the form of Exhibit D (or in the case of a guarantor under any guaranty required to be delivered to Seller pursuant to the terms of this Agreement, Exhibit D with appropriate modifications), with such revisions as may be required by the Lenders or Lenders’ Agent so long as such changes do not materially affect Buyer’s or such guarantor’s rights or obligations under this 

92

Agreement or any such guaranty, and (ii) contain such further undertakings that are normal and customary in project financings or refinancings of this type; provided, however, that, Buyer shall not be required to provide (or cause to be provided) any guaranty or similar commitment in favor of the Lenders, Seller or any other Person, other than any guaranty required to be delivered to Seller pursuant to the terms of this Agreement.
		
	23.
	Contract Language

This Agreement, together with the Exhibits hereto, shall be made and originals executed in the English language.  In case of any difference in meaning between the English language original version and any translation thereof, the English language original version shall be applicable.
		
	24.
	Miscellaneous

		
	24.1
	Disclaimer of Agency

This Agreement does not appoint either Party as the agent, partner or legal representative of the other for any purposes whatsoever, and neither Party shall have any express or implied right or authority to assume or to create any obligation or responsibility on behalf of or in the name of the other Party.
		
	24.2
	Entire Agreement

This Agreement, together with the Exhibits hereto, constitutes the entire agreement between the Parties and includes all promises and representations, express or implied, and supersedes all other prior agreements and representations, written or oral, between the Parties relating to the subject matter. Anything that is not contained or expressly incorporated by reference in this instrument, is not part of this Agreement.
		
	24.3
	Third Party Beneficiaries

The Parties do not intend any term of this Agreement to be for the benefit of, or enforceable by, any Third Party except as expressly provided in Section 7.7.  The Parties may rescind or vary this Agreement, in whole or in part, without the consent of any Third Party, including those Third Parties referred to under Section 7.7, even if as a result such Third Party’s rights to enforce a term of this Agreement will be varied or extinguished.
		
	24.4
	Amendments and Waiver

This Agreement may not be supplemented, amended, modified or changed except by an instrument in writing signed by Seller and Buyer and expressed to be a supplement, amendment, modification or change to this Agreement. A Party shall 

93

not be deemed to have waived any right or remedy under this Agreement by reason of such Party’s failure to enforce such right or remedy.
		
	24.5
	Exclusion

The United Nations Convention on Contracts for the International Sale of Goods (and the Convention on the Limitation Period in the International Sale of Goods) shall not apply to this Agreement and the respective rights and obligations of the Parties hereunder.
		
	24.6
	Further Assurances

Each Party hereby agrees to take all such action as may be necessary to effectuate fully the purposes of this Agreement, including causing this Agreement or any document contemplated herein to be duly registered, notarized, attested, consularized and stamped in any applicable jurisdiction.
		
	24.7
	Severability

If and for so long as any provision of this Agreement shall be deemed to be judged invalid for any reason whatsoever, such invalidity shall not affect the validity or operation of any other provision of this Agreement except only so far as shall be necessary to give effect to the construction of such invalidity, and any such invalid provision shall be deemed severed from this Agreement without affecting the validity of the balance of this Agreement.
		
	25.
	Notices

		
	25.1
	Form of Notice

		
	25.1.1
	Except as expressly set forth herein, any notice, invoice or other communication from one of the Parties to the other Party (or, where contemplated in this Agreement, from or to the Transporter or the master of the LNG Tanker), which is required or permitted to be made by the provisions of this Agreement shall be:

		
	(a)
	made in the English language;

		
	(b)
	made in writing;

		
	(c)
	(i) delivered by hand or sent by courier to the address of the other Party which is shown below or to such other address as the other Party shall by notice require or; (ii) be sent by facsimile to the facsimile number of the other Party which is shown below or to such other facsimile number as the other Party shall by notice require or; (iii) with respect to any notice, invoice or other communication to be sent pursuant to Sections 7, 8 or 12 (or others as may be agreed by 

94

the Parties), be sent by electronic mail to the e-mail address of the other Party which is shown below or to such other e-mail address as the other Party shall by notice require; and
		
	(d)
	marked for the attention of the Person(s) there referred to or to such other Person(s) as the other Party shall by notice require.

		
	25.1.2
	The addresses of the Parties for service of notices are as follows:

Seller:    Corpus Christi Liquefaction, LLC
700 Milam Street
Suite 800
Houston, TX 77002
Telephone: (713) 375-5121
Fax: (713) 375-6121
E-mail: Customer.Coordination@Cheniere.com
Attention:  Commercial Operations
Buyer:Électricité de France, S.A.
20 Place de la Défense, 
92000 Paris-La Défense, France
Telephone: 
Telephone: + 33 1 56 65 02 73
Fax: + 33 1 56 65 22 26
Email: jacques.schutz@edf.fr

Attention:  Direction Gaz - Jacques Schutz

With copy to Direction Juridique Gaz
Fax: + 33 1 56 65 08 40 

		
	25.2
	Effective Time of Notice

		
	25.2.1
	Any notice, invoice or other communication made by one Party to the other Party in accordance with the foregoing provisions of this Section 25 shall be deemed to be received by the other Party if delivered by hand or by courier, on the Day on which it is received at that Party’s address or, if sent by facsimile, on the next Day on which the office of the receiving Party is normally open for business following the Day on which it is received in a legible form at the address to which it is properly addressed. The foregoing shall not apply to notices or communications sent by facsimile or e-mail under Sections 7.9.2, 7.9.3, and 7.10, which shall be deemed effective at the time transmitted to the facsimile number shown above or such other number or electronic mail address previously notified by the receiving Party.

95

		
	25.2.2
	Without limiting the meaning of the word “received” for the purpose of the preceding paragraph, a notice which is delivered by hand or by courier shall be deemed to have been received at a Party’s address if it is placed in any receptacle normally used for the delivery of post to the address of that Party.

		
	25.2.3
	Any notice given by facsimile or electronic mail shall be subsequently confirmed by letter, unless otherwise agreed, but without prejudice to the validity of the original notice.

		
	26.
	Business Practices

		
	26.1
	Trade Law Compliance

Each Party agrees to comply with the Export Authorizations, including incorporating into any resale contract for LNG sold under this Agreement the necessary conditions to ensure compliance with the Export Authorizations.  Buyer 
shall promptly provide to Seller all information required by Seller or Seller’s Affiliate to comply with the Export Authorizations.  If any Export Authorization requires conditions to be included in this Agreement then, within fifteen (15) days following the issuance of the Export Authorization imposing such condition, the Parties shall discuss the appropriate changes to be made to this Agreement to comply with such Export Authorization and shall amend this Agreement accordingly.  Buyer acknowledges and agrees that it may resell or transfer LNG purchased hereunder for delivery only to the countries identified in an Export Authorization and/or to purchasers that have agreed in writing to limit their direct or indirect resale or transfer of such LNG to such countries.  Buyer represents and warrants that the final delivery of LNG received pursuant to the terms of this Agreement are permitted and lawful under United States of America laws and policies, including the rules, regulations, orders, policies, and other determinations of the United States Department of Energy, the Office of Foreign Assets Control of the United States Department of the Treasury and the Federal Energy Regulatory Commission, and Buyer shall not take any action which would cause any Export Authorization to be withdrawn, revoked, suspended or not renewed.
		
	26.2
	Use of LNG

At all times during the Term, Buyer shall, with respect to all LNG delivered by Seller to Buyer pursuant to this Agreement: (a) utilize such LNG as a refined product or chemical feedstock; (b) use or consume such LNG to produce power for sale to customers; (c) market such LNG to distributors or wholesalers for resale to their own customers; or (d) resell such LNG to other Persons provided that the transfer by Buyer to a Transporter of gas that boils off from a cargo in transit from the Delivery Point shall be considered to be a sale.
		
	26.3
	Prohibited Practices

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	26.3.1
	Each Party agrees that in connection with this Agreement and the activities contemplated herein, it will take no action, or omit to take any action, which would (i) violate any Applicable Law applicable to that Party, or (ii) cause the other Party to be in violation of any Applicable Law applicable to such other Party, including the U.S. Foreign Corrupt Practices Act, the OECD convention on anti-bribery, the U.K. Bribery Act of 2010, E.U. and E.U. member country anti-bribery and corruption laws, and corruption or any similar statute, regulation, order or convention binding on such other Party, as each may be amended from time to time, and including any implementing regulations promulgated pursuant thereto.

		
	26.3.2
	Without limiting Section 26.3.1, each Party agrees on behalf of itself, its directors, officers, employees, agents, contractors, and Affiliates, not to pay any fees, commissions or rebates to any employee, officer or agent of the other Party or its Affiliates or shareholders nor provide or cause to be provided to any of them any gifts or entertainment of significant cost or value in connection with this Agreement or in order to influence or induce any actions or inactions in connection with the commercial activities of the Parties hereunder.

		
	26.4
	Records; Audit

Each Party shall keep all records necessary to confirm compliance with Sections 26.1, 26.2, 26.3.1(ii), and 26.3.2 for a period of five (5) years following the year for which such records apply.  If either Party asserts that the other Party is not in compliance with Sections 26.1, 26.2, 26.3.1(ii), or 26.3.2, the Party asserting noncompliance shall send a notice to the other Party indicating the type of noncompliance asserted.  After giving such notice, the Party asserting noncompliance may cause an independent auditor to audit the records of the other Party in respect of the asserted noncompliance.  The costs of any independent auditor under this Section 26.4 shall be paid (i) by the Party being audited, if such Party is determined not to be in compliance with Sections 26.1, 26.2, 26.3.1(ii) or 26.3.2, as applicable, and (ii) by the Party requesting the audit, if the Party being audited is determined to be in compliance with Sections 26.1, 26.2, 26.3.1(ii), or 26.3.2, as applicable.
		
	26.5
	Indemnity

Each Party agrees to indemnify and hold the other Party harmless from any Losses arising out of the indemnifying Party’s breach of any or all of Section 26.1, Section 26.3, or Section 26.4 or the breach of the representation and warranty in Section 17.3.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written.
	
					
	SELLER:
	 
	BUYER:

	 
	 
	 
	 
	 

	CORPUS CHRISTI LIQUEFACTION, LLC
	 
	ÉLECTRICITÉ DE FRANCE, S.A.

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	/s/ R. KEITH TEAGUE
	 
	/s/ BRUNO LESCOEUR

	Name:
	R. KEITH TEAGUE
	 
	Name:
	BRUNO LESCOEUR

	Title:
	PRESIDENT
	 
	Title:
	SENIOR EXECUTIVE V.P. GAS & SOUTHERN EURPOE.

98

EXHIBIT A

MEASUREMENT
1.    Parties to Supply Devices
a)    General.  Unless otherwise agreed, Buyer and Seller shall supply equipment and conform to procedures that are in accordance with the latest version of the standards referred to in this document.
b)    Buyer Devices.  Buyer or Buyer’s agent shall supply, operate and maintain, or cause to be supplied, operated and maintained, suitable gauging devices for the liquid level in LNG tanks of the LNG Tankers, pressure and temperature measuring devices, and any other measurement or testing devices which are incorporated in the structure of LNG vessels or customarily maintained on board ship.
c)    Seller Devices.  Seller shall supply, operate and maintain, or cause to be supplied, operated and maintained, devices required for collecting samples and for determining quality and composition of the LNG and any other measurement or testing devices which are necessary to perform the measurement and testing required hereunder at the Corpus Christi Facility.
d)    Dispute.  Any Dispute arising under this Exhibit A shall be submitted to an Expert under Section 21.2 of this Agreement.
2.    Selection of Devices
All devices provided for in this Exhibit A shall be approved by Seller, acting as a Reasonable and Prudent Operator.  The required degree of accuracy (which shall in any case be within the permissible tolerances defined herein and in the applicable standards referenced herein) of such devices selected shall be mutually agreed upon by Buyer and Seller.  In advance of the use of any device, the Party providing such device shall cause tests to be carried out to verify that such device has the required degree of accuracy.
3.    Verification of Accuracy and Correction for Error
a)    Accuracy.  Accuracy of devices used shall be tested and verified at the request of either Party, including the request by a Party to verify accuracy of its own devices.  Each Party shall have the right to inspect at any time the measurement devices installed by the other Party, provided that the other Party is notified in advance.  Testing shall be performed only when both Parties are represented, or have received adequate advance notice thereof, using methods recommended by the manufacturer or any other method agreed to by Seller and Buyer.  At the request of any Party hereto, any test shall be witnessed and verified by an independent surveyor mutually agreed upon by Buyer and Seller.  Permissible tolerances shall be as defined herein or as defined in the applicable standards referenced herein.

b)    Inaccuracy.  Inaccuracy of a device exceeding the permissible tolerances shall require correction of previous recordings, and computations made on the basis of those recordings, to zero

error with respect to any period which is definitely known or agreed upon by the Parties as well as adjustment of the device.  All invoices issued during such period shall be amended accordingly to reflect such correction, and an adjustment in payment shall be made between Buyer and Seller.  If the period of error is neither known nor agreed upon, and there is no evidence as to the duration of such period of error, corrections shall be made and invoices amended for each delivery of LNG made during the last half of the period since the date of the most recent calibration of the inaccurate device.  However, the provisions of this Paragraph 3 shall not be applied to require the modification of any invoice that has become final pursuant to Section 10.3.2 of this Agreement.
c)    Costs and Expenses of Test Verification.  All costs and expenses for testing and verifying Seller’s measurement devices shall be borne by Seller, and all costs and expenses for testing and verifying Buyer’s measurement devices shall be borne by Buyer.  The fees and charges of independent surveyors for measurements and calculations shall be borne by the Parties in accordance with Section 13.11.3 of this Agreement.
4.    Tank Gauge Tables of LNG Tankers
a)    Initial Calibration.  Buyer shall arrange or caused to be arranged, for each tank of each LNG Tanker, a calibration of volume against tank level. Buyer shall provide Seller or its designee, or cause Seller or its designee to be provided, with a certified copy of tank gauge tables for each tank of each LNG Tanker verified by a competent impartial authority or authorities mutually agreed upon by the Parties.  Such tables shall include correction tables for list, trim, tank contraction and any other items requiring such tables for accuracy of gauging.
Tank gauge tables prepared pursuant to the above shall indicate volumes in cubic meters expressed to the nearest thousandth (1/1000), with LNG tank depths expressed in meters to the nearest hundredth (1/100).
b)    Presence of Representatives.  Seller and Buyer shall each have the right to have representatives present at the time each LNG tank on each LNG Tanker is volumetrically calibrated.
c)    Recalibration.  If the LNG tanks of any LNG Tanker suffer distortion of such nature as to create a reasonable doubt regarding the validity of the tank gauge tables described herein (or any subsequent calibration provided for herein), Buyer or Buyer’s agent shall recalibrate the damaged tanks, and the vessel shall not be employed as an LNG Tanker hereunder until appropriate corrections are made.  If mutually agreed between Buyer and Seller representatives, recalibration of damaged tanks can be deferred until the next time when such damaged tanks are warmed for any reason, and any corrections to the prior tank gauge tables will be made from the time the distortion occurred.  If the time of the distortion cannot be ascertained, the Parties shall mutually agree on the time period for retrospective adjustments.
5.    Units of Measurement and Calibration
The Parties shall co-operate in the design, selection and acquisition of devices to be used for measurements and tests in order that all measurements and tests may be conducted in the SI system of units, except for the quantity delivered which is expressed in MMBtu, the Gross Heating Value (volume based) which is expressed in Btu/SCF and the pressure which is expressed in millibar and 

 2

temperature in Celsius.  In the event that it becomes necessary to make measurements and tests using a new system of units of measurements, the Parties shall establish agreed upon conversion tables.
6.    Accuracy of Measurement
All measuring equipment must be maintained, calibrated and tested in accordance with the manufacturer’s recommendations.  In the absence of a manufacturer’s recommendation, the minimum frequency of calibration shall be one hundred eighty (180) days, unless otherwise mutually agreed between the Parties.  Documentation of all tests and calibrations will be made available by the Party performing the same to the other Party.  Acceptable accuracy and performance tolerances shall be:
a)    Liquid Level Gauging Devices.
Each LNG tank of the LNG Tanker shall be equipped with primary and secondary liquid level gauging devices as per Paragraph 7(b) of this Exhibit A.
The measurement accuracy of the primary gauging devices shall be plus or minus seven point five (± 7.5) millimeters and the secondary liquid level gauging devices shall be plus or minus ten (± 10) millimeters.
The liquid level in each LNG tank shall be logged or printed.
b)    Temperature Gauging Devices.
The temperature of the LNG and of the vapor space in each LNG tank shall be measured by means of a number of properly located temperature measuring devices sufficient to permit the determination of average temperature.
The measurement accuracy of the temperature gauging devices shall be as follows:
(i)    in the temperature range of minus one hundred sixty five to minus one hundred forty degree Celsius (-165C to -140°C), the accuracy shall be plus or minus zero point two degree Celsius (± 0.2 °C);
(ii)    in the temperature range of minus one hundred forty to plus forty degree Celsius (-140C to +40 °C), the accuracy shall be plus or minus one point five degree Celsius (± 1.5 °C).
The temperature in each LNG tank shall be logged or printed.
c)    Pressure Gauging Devices.
Each LNG tank of the LNG Tanker shall have one (1) absolute pressure gauging device.
The measurement accuracy of the pressure gauging device shall be plus or minus one percent (± 1%) of the measuring range.
The pressure in each LNG tank shall be logged or printed.

 3

d)    List and Trim Gauging Devices.
A list gauging device and a trim gauging device shall be installed.  These shall be interfaced with the custody transfer system.
The measurement accuracy of the list and the trim gauging devices shall be better than plus or minus zero point zero five (±0.05) degrees for list and: (i) in respect of LNG Tankers constructed, commissioned and owned by Buyer prior to the Effective Date, plus or minus zero point zero two (±0.02) degrees for trim; or (ii) otherwise, plus or minus zero point zero one (± 0.01) degrees for trim.
7.    Gauging and Measuring LNG Volumes Delivered
a)    Gauge Tables.  Upon Seller’s representative and the independent surveyor, if present, arriving on board the LNG Tanker prior to the commencement of or during loading, Buyer or Buyer’s representative shall make available to them a certified copy of tank gauge tables for each tank of the LNG Tanker.
b)    Gauges.  Volumes of LNG delivered pursuant to this Agreement shall be determined by gauging the LNG in the tanks of the LNG Tankers before and after loading.  Each LNG Tanker’s tank shall be equipped with a minimum of two (2) independent sets of level gauges, each set utilizing preferably a different measurement principle.  Comparison of the two (2) systems, designated as Primary and Secondary Measurement Systems, shall be performed from time to time to ensure compliance with the acceptable performance tolerances stated herein.
c)    Gauging Process.  Gauging the liquid in the tanks of the LNG Tankers and measuring of liquid temperature, vapor temperature and vapor pressure in each LNG tank, trim and list of the LNG Tankers, and atmospheric pressure shall be performed, or caused to be performed, by Buyer before and after loading.  Seller’s representative shall have the right to be present while all measurements are performed and shall verify the accuracy and acceptability of all such measurements.  The first gauging and measurements shall be made immediately before the commencement of loading.  The second gauging and measurements shall take place immediately after the completion of loading.
d)    Records.  Copies of gauging and measurement records shall be furnished to Seller immediately upon completion of loading.
e)    Gauging Liquid Level of LNG.  The level of the LNG in each LNG tank of the LNG Tanker shall be gauged by means of the primary gauging device installed in the LNG Tanker for that purpose.  The level of the LNG in each tank shall be logged or printed.
Measurement of the liquid level in each LNG tank of the LNG Tanker shall be made to the nearest millimeter by using the primary liquid level gauging devices. Should the primary devices fail, the secondary device shall be used.
Five (5) readings shall be made following manufacturer’s recommendations on reading interval. The arithmetic average of the readings rounded to the nearest millimeter using one (1) decimal place shall be deemed the liquid level.

 4

f)    Determination of Temperature.  The temperature of the LNG and of the vapor space in each LNG tank shall be measured by means of a sufficient number of properly located temperature measuring devices to permit the determination of average temperature.  Temperatures shall be measured at the same time as the liquid level measurements and shall be logged or printed.
In order to determine the temperature of liquid and vapor respectively in the LNG Tanker one (1) reading shall be taken at each temperature gauging device in each LNG tank.  An arithmetic average of such readings rounded to the nearest zero point one degree Celsius (0.1 °C) using two (2) decimal places with respect to vapor and liquid in all LNG tanks shall be deemed the final temperature of the vapor and liquid respectively.
Buyer shall cause each cargo tank in the LNG Tanker to be provided with a minimum of five (5) temperature measuring devices.  One such measuring device shall be located in the vapor space at the top of each cargo tank, one near the bottom of each cargo tank and the remainder distributed at appropriate intervals from the top to the bottom of the cargo tank.  These devices shall be used to determine the average temperatures of the liquid cargo and the vapor in the cargo tank.
The average temperature of the vapor in an LNG Tanker shall be determined immediately before loading by means of the temperature measuring devices specified above at the same time as when the liquid level is measured.  The temperature measuring devices shall be fully surrounded by the vapor.  This determination shall be made by taking the temperature readings of the temperature measuring devices in question to the nearest zero point zero one degrees Celsius (0.01°C), and if more than one of the devices are fully surrounded by the vapor, by averaging those readings, and rounding to one (1) decimal place.
The average temperature of the liquid in an LNG Tanker shall be determined immediately after loading by means of the temperature measuring devices specified above.
g)    Determination of Pressure.  The pressure of the vapor in each LNG tank shall be determined by means of pressure measuring devices installed in each LNG tank of the LNG Tankers.  The atmospheric pressure shall be determined by readings from the standard barometer installed in the LNG Tankers.  Pressures shall be measured at the same time as the liquid level measurements, and shall be logged or printed.
Buyer shall cause the LNG Tanker to be provided with pressure measuring equipment capable of determining the absolute pressure of the vapor in each cargo tank with an accuracy equal to or better than plus or minus one percent (± 1%) of the measuring range.
The pressure of the vapor in an LNG Tanker shall be determined immediately before loading at the same time as when the liquid level is measured.
Such determination shall be made by taking the pressure readings of the pressure measuring devices to the nearest millibar, then averaging these readings and rounding to a whole millibar.
h)    Determination of Density.  The LNG density shall be calculated using the revised Klosek-McKinley method. Should any improved data, method of calculation or direct measurement device become available which is acceptable to both Buyer and Seller, such improved data, method or device shall then be used.

 5

8.    Samples for Quality Analysis
a)    General.  Representative liquid samples shall be collected from an appropriate point located as close as practical to the loading line starting one (1) hour after full loading rate is reached and ending one (1) hour before ramping down from the full loading rate.  A sample shall be taken and analyzed at least once every twenty (20) minutes by an on-line chromatograph during this period; provided, however, that no less than forty (40) samples shall be taken per cargo loading operation.  Samples taken when biphasic or overheated LNG is suspected to be in the main transfer line will be disregarded.  These incremental samples will be passed through a vaporizer, and samples of the vaporized liquid will be analyzed.  The resulting analyses, which are generally proportional to time, will be arithmetically averaged to yield an analysis that is representative of the loaded LNG cargo.  This arithmetically averaged analysis shall be used for all appropriate calculations associated with the delivered LNG cargo.  If both Seller and the Buyer agree that the result of the arithmetic average does not give a fair representation of the composition of the LNG, both Parties shall meet and decide in good faith the appropriate method to determine the composition of the LNG. Should the automatic sampling system fail during the loading, manual samples shall be collected and analyzed for accounting purposes.
b)    Manual Samples.  Prior to the end of the loading cycle, three (3) sets of spot samples shall be collected from the vaporizer at the following intervals during loading, when loading is twenty-five percent (25%), fifty percent (50%), and seventy-five percent (75%) complete.  Spot samples shall be collected in accordance with Gas Processors Association (“GPA”) Standard 2166 - Methods for Obtaining Gas Samples for Analysis by Gas Chromatography - or by other mutually agreeable methods.  The samples shall be properly labeled and then distributed to Buyer and Seller.  Seller shall retain one (1) sample for a period of forty (40) days, unless the analysis is in dispute.  If the analysis is in dispute, the sample will be retained until the dispute is resolved.
Sampling and analysis methods and procedures that differ from the above may be employed with the mutual agreement of the Parties.
9.    Quality Analysis
a)    Certification and Deviation.  Chromatograph calibration gasses shall be provided and their composition certified by an independent third party.  From time to time, deviation checks shall be performed to verify the accuracy of the gas composition mole percentages and resulting calculated physical properties.  Analyses of a sample of test gas of known composition resulting when procedures that are in accordance with the above mentioned standards have been applied will be considered as acceptable if the resulting calculated gross heating value is within plus or minus zero point three percent (± 0. 3%) of the known gross heating value of the test gas sample.  If the deviation exceeds the tolerance stated, the gross real heating value, relative density and compressibility previously calculated will be corrected immediately.  Previous analyses will be corrected to the point where the error occurred, if this can be positively identified to the 

 6

satisfaction of both Parties.  Otherwise it shall be assumed that the drift has been linear since the last recalibration and correction shall be based on this assumption.
b)    GPA Standard 2261.  All samples shall be analyzed by Seller to determine the molar fraction of the hydrocarbon and other components in the sample by gas chromatography using a mutually agreed method in accordance with GPA Standard 2261 - Method of Analysis for Gas and Similar Gaseous Mixtures by Gas Chromatography, current as of January 1st, 1990 and as periodically updated or as otherwise mutually agreed by the Parties.  If better standards for analysis are subsequently adopted by GPA or other recognized competent impartial authority, upon mutual agreement of Buyer and Seller, they shall be substituted for the standard then in use, but such substitution shall not take place retroactively.  A calibration of the chromatograph or other analytical instrument used shall be performed by Seller immediately prior to the analysis of the sample of LNG delivered.  Seller shall give advance notice to Buyer of the time Seller intends to conduct a calibration thereof, and Buyer shall have the right to have a representative present at each such calibration; provided, however, Seller will not be obligated to defer or reschedule any calibration in order to permit the representative of Buyer to be present.
c)    GPA Standard 2377 and 2265.  Seller shall determine the presence of Hydrogen Sulfide (H2S) by use of GPA Standard 2377 - Test of Hydrogen Sulfide and Carbon Dioxide in Gas Using Length of Stain Tubes.  If necessary, the concentration of H2S and total sulfur will be determined using one or more of the following methods as is appropriate: gas chromatography, Gas Processors Standard 2265 - Standard for Determination of Hydrogen Sulfide and Mercaptan Sulfur in Gas (Cadmium Sulfate - Iodometric Titration Method) or any other method that is mutually acceptable.  If Hydrogen Sulfide or Carbon Dioxide are detected by the above methods then Seller shall confirm the presence of Hydrogen Sulfide or Carbon Dioxide in accordance with GPA Standard 2261-00 (Analysis for Natural Gas and Similar Gaseous Mixtures by Gas Chromatography).
10.    Operating Procedures
a)    Notice.  Prior to conducting operations for measurement, gauging, sampling and analysis provided in this Exhibit A, the Party responsible for such operations shall notify the appropriate representatives of the other Party, allowing such representatives reasonable opportunity to be present for all operations and computations; provided that the absence of the other Party’s representative after notification and opportunity to attend shall not prevent any operations and computations from being performed.
b)    Independent Surveyor.  At the request of either Party any measurement, gauging, sampling and analysis shall be witnessed and verified by an independent surveyor mutually agreed upon by Buyer and Seller.  The results of such surveyor’s verifications shall be made available promptly to each Party.
c)    Preservation of Records.  All records of measurement and the computed results shall be preserved by the Party responsible for taking the same, or causing the same to be taken, and made available to the other Party for a period of not less than three (3) years after such measurement and computation.

 7

11.    Quantities Delivered
a)    Calculation of MMBtu Quantities.  The quantity of MMBtu delivered shall be calculated by Seller and verified by Buyer.  Either Party may, at its own expense, require the measurements and calculations and/or their verification by an independent surveyor, mutually agreed upon by the Parties.  Consent to an independent surveyor proposed by a Party shall not be unreasonably withheld by the other Party.
b)    Determination of Gross Heating Value.  All component values shall be in accordance with the latest revision of GPA Standard 2145 SI (2009) - Physical Constants for Hydrocarbons & Other Compounds of Interest to the Natural Gas Industry and the latest revision of the reference standards therein. Standard reference conditions for Hi component should be 15°C & 101.325 kPa.
c)    Determination of Volume of LNG Loaded.
(i)    The LNG volume in the tanks of the LNG Tanker before and after loading (valves have to be closed) shall be determined by gauging on the basis of the tank gauge tables provided for in Paragraph 6.  During the period when measurement is occurring, no LNG cargo, ballast, boil-off gas, fuel oil or other cargo transfer activity will be carried out on the LNG Tanker.  Measurements shall first be made immediately before loading commences.  Accordingly, after connection of the loading arms, but prior to their cool down, and immediately before opening the manifold ESD valves of the LNG Tanker, the initial gauging shall be conducted upon the confirmation of stoppage of all spray pumps and compressors and shut-off of the gas master valve to the LNG Tanker’s boilers or any other gas consuming unit.  The gas master valve to the LNG Tanker’s boilers or any other gas consuming unit shall remain closed until after the second gauging, unless a regulatory change requires the consumption of gas during the vessel loading operations and/or upon mutual agreement between all parties upon which event the procedure for the measurement of gas consumed during loading shall be calculated in accordance with Paragraph 12.4 of this Exhibit A.  A second gauging shall be made immediately after loading is completed.  Accordingly, the second gauging shall be conducted upon the confirmation of shut-off of the manifold ESD valves, with transfer pumps off and allowing sufficient time for the liquid level to stabilize.  Measurements prior to loading and after loading will be carried out based on the condition of the LNG Tanker’s lines upon arrival at berth.  Since significant volumes of LNG may remain in the LNG Tanker’s manifold and crossover, gauging will be performed with these lines in the same condition prior to loading and after loading.  If the LNG Tanker’s manifold and crossover lines are empty (warm) when measurement is taken before loading commences, they will be emptied prior to measurement following the completion of loading.  If the crossover lines are liquid filled (cold) when measurement is taken before loading commences, they will remain full (cold) until measurement is taken following the completion of loading.  The volume of LNG remaining in the tanks immediately before loading of the LNG Tanker shall be subtracted from the volume immediately after loading and the resulting volume shall be taken as the volume of the LNG delivered from the terminal to the LNG Tanker.
The volume of LNG stated in cubic meters to the nearest zero point zero zero one (0.001) cubic meter, shall be determined by using the tank gauge tables and by applying the volume corrections set forth therein.

 8

(ii)    Gas returned to the terminal and gas consumed by the LNG Tanker during loading shall be taken into account to determine the volume loaded for Buyer’s account in accordance with the formula in Paragraph 12.4 of this Exhibit A - MMBtu Calculation of the Quantity of LNG Loaded.
(iii)    If failure of the primary gauging and measuring devices of an LNG Tanker should make it impossible to determine the LNG volume, the volume of LNG loaded shall be determined by gauging the liquid level using the secondary gauging and measurement devices. If an LNG Tanker is not so equipped, the volume of LNG loaded shall be determined by gauging the liquid level in Seller’s onshore LNG storage tanks immediately before and after loading the LNG Tanker, in line with the terminal procedures, and such volume shall have subtracted from it an estimated LNG volume, agreed upon by the Parties, for boil-off from such tanks during the loading of such LNG Tanker.  Seller shall provide Buyer, or cause Buyer to be provided with, a certified copy of tank gauge tables for each onshore LNG tank which is to be used for this purpose, such tables to be verified by a competent impartial authority.
12.    Calculations
The calculation procedures contained in this Paragraph 12 are generally in accordance with the Institute of Petroleum Measurement Manual, Part XII, the Static Measurement of Refrigerated Hydrocarbon Liquids, Section 1, IP 251/76.
d     =    density of LNG loaded at the prevailing composition and temperature Tl in kg/m3, rounded to two (2) decimal places, calculated according to the method specified in Paragraph 12.1 of this Exhibit A.
Hi    =    gross heating value (mass based) of component “i” in MJ/kg, in accordance with Paragraph 12.6(a) of this Exhibit A.
Hm    =    gross heating value (mass based) of the LNG loaded in MJ/kg, calculated in accordance with the method specified in Paragraph 12.3 of this Exhibit A, rounded to four (4) decimal places.
Hv    =    gross heating value (volume based) of the LNG loaded in Btu/SCF, calculated in accordance with  the method specified in Paragraph 12.5 of this Exhibit A.
K1    =     volume correction in m3/kmol, at temperature Tl, obtained by linear interpolation from Paragraph 12.6(c) of this Exhibit A, rounded to six (6) decimal places.
K2    =    volume correction in m3/kmol, at temperature Tl obtained by linear interpolation from Paragraph 12.6(d) of this Exhibit A, rounded to six (6) decimal places.
Mi    =    molecular mass of component “i” in kg/kmol, in accordance with Paragraph 12.6(a) of this Exhibit A.
P     =    average absolute pressure of vapor in an LNG Tanker immediately before loading, in millibars, rounded to a whole millibar.

 9

Q    =    number of MMBtu contained in the LNG delivered, rounded to the nearest ten (10) MMBtu.
Tl     =    average temperature of the liquid cargo in the LNG Tanker immediately after loading, in degrees Celsius, rounded to one (1) decimal place.
Tv     =     average temperature of the vapor in an LNG Tanker immediately before loading, in degrees Celsius, rounded to one (1) decimal place.
V    =    the volume of the liquid cargo loaded, in cubic meters, rounded to three (3) decimal places.
Vh    =    the volume of the liquid cargo in an LNG Tanker immediately before loading, in cubic meters, rounded to three (3) decimal places.
Vb    =    the volume of the liquid cargo in an LNG Tanker immediately after loading, in cubic meters, rounded to three (3) decimal places.
Vi    =    molar volume of component “i” at temperature Tl, in m3/kmol, obtained by linear interpolation from Paragraph 12.6(b) of this Exhibit A, rounded to six (6) decimal places.
Xi    =    molar fraction of component “i” of the LNG samples taken from the loading line, rounded to four (4) decimal places, determined by gas chromatographic analysis.
Xm    =    the value of Xi for methane.
Xn    =    the value of Xi for nitrogen.
12.1     Density Calculation Formula
The density of the LNG loaded which is used in the MMBtu calculation in 12.4 of this Exhibit A shall be calculated from the following formula derived from the revised Klosek-McKinley method:

In the application of the above formula, no intermediate rounding shall be made if the accuracy of “d” is thereby affected.
12.2    Calculation of Volume Delivered
The volume, in cubic meters, of each LNG cargo loaded shall be calculated by using the following formula:
V = Vb - Vh 

 10

12.3     Calculation of Gross Heating Value (Mass Based)
The gross heating value (mass based), in MJ/kg, of each LNG cargo loaded shall be calculated by using the following formula:

12.4    MMBtu Calculation of the Quantity of LNG Loaded
The number of MMBtu contained in the LNG loaded shall be calculated using the following formula:

The derivation of the conversion factor 1/1055.12 in the formula in this Paragraph for the conversion of MJ into MMBtu is obtained from GPA-2145:1994 and IP-251:1976 as follows:
(a)    q(T,P) means the gross heating value (measured at temperature T and pressure P), contained in a given quantity of gas;
(b)    q(60°F, 14.696 psia) in MJ = 1/1.00006 x q(15°C, 1013.25 millibar) in MJ;
(c)    1 MMBtu corresponds to 1055.06 MJ;
(d)    q(60°F, 14.696 psia) in MMBtu = 1/1055.06 x q(60°F, 14.696 psia) in MJ; and
(e)    Combining (b) and (d) above yields:
q(60°F, 14.696 psia) in MMBtu = 1/1055.12 x q(15°C, 1013.25 millibar) in MJ.
Hence the number of MJ derived shall be divided by 1055.12 to obtain the number of MMBtu for invoicing purposes.
		
	QBOG
	=    the quantity of boil off gas in MJ consumed by the LNG tanker during loading, calculated as follows:

QBOG = (V2 x 55.575)
where:
		
	V2
	=    the quantity of natural gas consumed by the LNG tanker during loading (as calculated pursuant to the below formula), stated in kg and rounded to the nearest kg; and

 11

		
	55.575 =
	the heating value of the vapor (assumed to be 100% of methane) stated in MJ/kg at standard reference conditions (15 ̊C, 1.01325 bar) for both combustion & metering references (tables below).

Quantity of Natural Gas Consumed by LNG Tanker (V2)
The quantity of natural gas consumed by the LNG tanker during loading shall be computed by taking the initial and the final reading of Natural Gas Consumption Meter on board the tanker (i.e. final reading of Natural Gas Consumption Meter after completion of loading minus initial reading of Natural Gas Consumption Meter before the start of loading) and is calculated by using the following formula:
V2    =    Vf - Vi
where:
		
	V2
	=    the quantity of natural gas consumed by the LNG tanker during loading, stated in kg;

		
	Vf
	=    the reading of Natural Gas Consumption Meter on board the tanker after the completion of loading, stated in kg; and

		
	Vi
	=    the reading of Natural Gas Consumption Meter on board the tanker before the start of loading, stated in kg.

12.5    Calculation of Gross Heating Value (Volume Based)
The calculation of the Gross Heating Value (volume based) in Btu/SCF shall be derived from the same compositional analysis as is used for the purposes of calculating the Gross Heating Value (mass based) Hm and the following formula shall apply:

The derivation of the conversion factor 1.13285 for the conversion of MJ/kmol into Btu/SCF is obtained as follows:
(a)    molar gross heating value = ∑ (Xi x Mi x Hi) MJ/kmol;
(b)    1 kmol = 2.20462 lbmol;
(c)    1 lbmol = 379.482 SCF;
(d)    hence 1 kmol = 836.614 SCF; and
(e)    Hv= 1,000,000/ (1055.12 x 836.614) x  ∑ (Xi x Mi x Hi) Btu/SCF

 12

12.6    Data
(a)    Values    of Hi and Mi
	
			
	Component
	Hi (in MJ/kg)
	Mi (in kg/kmol)

	Methane
	55.575
	16.0425

	Ethane
	51.951
	30.0690

	Propane
	50.369
	44.0956

	Iso-Butane
	49.388
	58.1222

	N-Butane
	49.546
	58.1222

	Iso-Pentane
	48.950
	72.1488

	N-Pentane
	49.045
	72.1488

	N-Hexane
	48.715
	86.1754

	Nitrogen
	0
	28.0134

	Carbon Dioxide
	0
	44.0095

	Oxygen
	0
	31.9988

Source:  GPA Publication 2145 Sl-2009: “Table of Physical Properties for Hydrocarbons and Other Compounds of Interest to the Natural Gas Industry”.

(b)    Values of Vi (cubic meter/kmol)
	
								
	Temperature
	-150°C
	-154°C
	-158°C
	-160°C
	-162°C
	-166°C
	-170°C

	Methane
	0.039579
	0.038983
	0.038419
	0.038148
	0.037884
	0.037375
	0.036890

	Ethane
	0.048805
	0.048455
	0.048111
	0.047942
	0.047774
	0.047442
	0.047116

	Propane
	0.063417
	0.063045
	0.062678
	0.062497
	0.062316
	0.061957
	0.061602

	Iso-Butane
	0.079374
	0.078962
	0.078554
	0.078352
	0.078151
	0.077751
	0.077356

	N-Butane
	0.077847
	0.077456
	0.077068
	0.076876
	0.076684
	0.076303
	0.075926

	Iso-Pentane
	0.092817
	0.092377
	0.091939
	0.091721
	0.091504
	0.091071
	0.090641

	N-Pentane
	0.092643
	0.092217
	0.091794
	0.091583
	0.091373
	0.090953
	0.090535

	N-Hexane
	0.106020
	0.105570
	0.105122
	0.104899
	0.104677
	0.104236
	0.103800

	Nitrogen
	0.055877
	0.051921
	0.048488
	0.046995
	0.045702
	0.043543
	0.041779

	Carbon Diox
	0.027950
	0.027650
	0.027300
	0.027200
	0.027000
	0.026700
	0.026400

	Oxygen
	0.03367
	0.03275
	0.03191
	0.03151
	0.03115
	0.03045
	0.02980

Source:   National Bureau of Standards Interagency Report 77-867, Institute of Petroleum IP251/76 for Oxygen.
Note:    For intermediate values of temperature and molecular mass a linear interpolation shall be applied

 13

(c)    Values of Volume Correction Factor, K1 (cubic meter/kmol)
	
								
	Molecular Mass of Mixture
	-150°C
	-154°C
	-158°C
	-160°C
	-162°C
	-166°C
	-170°C

	16.0
	-0.000012
	-0.000010
	-0.000009
	-0.000009
	-0.000008
	-0.000007
	-0.000007

	16.5
	0.000135
	0.000118
	0.000106
	0.000100
	0.000094
	0.000086
	0.000078

	17.0
	0.000282
	0.000245
	0.000221
	0.000209
	0.000197
	0.000179
	0.000163

	17.2
	0.000337
	0.000293
	0.000261
	0.000248
	0.000235
	0.000214
	0.000195

	17.4
	0.000392
	0.000342
	0.000301
	0.000287
	0.000274
	0.000250
	0.000228

	17.6
	0.000447
	0.000390
	0.000342
	0.000327
	0.000312
	0.000286
	0.000260

	17.8
	0.000502
	0.000438
	0.000382
	0.000366
	0.000351
	0.000321
	0.000293

	18.0
	0.000557
	0.000486
	0.000422
	0.000405
	0.000389
	0.000357
	0.000325

	18.2
	0.000597
	0.000526
	0.000460
	0.000441
	0.000423
	0.000385
	0.000349

	18.4
	0.000637
	0.000566
	0.000499
	0.000477
	0.000456
	0.000412
	0.000373

	18.6
	0.000677
	0.000605
	0.000537
	0.000513
	0.000489
	0.000440
	0.000397

	18.8
	0.000717
	0.000645
	0.000575
	0.000548
	0.000523
	0.000467
	0.000421

	19.0
	0.000757
	0.000685
	0.000613
	0.000584
	0.000556
	0.000494
	0.000445

	19.2
	0.000800
	0.000724
	0.000649
	0.000619
	0.000589
	0.000526
	0.000474

	19.4
	0.000844
	0.000763
	0.000685
	0.000653
	0.000622
	0.000558
	0.000503

	19.6
	0.000888
	0.000803
	0.000721
	0.000688
	0.000655
	0.000590
	0.000532

	19.8
	0.000932
	0.000842
	0.000757
	0.000722
	0.000688
	0.000622
	0.000561

	20.0
	0.000976
	0.000881
	0.000793
	0.000757
	0.000721
	0.000654
	0.000590

	25.0
	0.001782
	0.001619
	0.001475
	0.001407
	0.001339
	0.001220
	0.001116

	30.0
	0.002238
	0.002043
	0.001867
	0.001790
	0.001714
	0.001567
	0.001435

Source:  National Bureau of Standards Interagency Report 77-867.
Note 1:    Molecular mass of mixture equals ∑ (Xi x Mi).
Note 2:    For intermediate values of temperature and molecular mass a linear interpolation shall be applied.

 14

(d)    Values of Volume Correction Factor, K2 (cubic meter/kmol)
	
								
	Molecular Mass of Mixture
	-150°C
	-154°C
	-158°C
	-160°C
	-162°C
	-166°C
	-170°C

	16.0
	-0.000039
	-0.000031
	-0.000024
	-0.000021
	-0.000017
	-0.000012
	-0.000009

	16.5
	0.000315
	0.000269
	0.000196
	0.000178
	0.000162
	0.000131
	0.000101

	17.0
	0.000669
	0.000568
	0.000416
	0.000377
	0.000341
	0.000274
	0.000210

	17.2
	0.000745
	0.000630
	0.000478
	0.000436
	0.000397
	0.000318
	0.000246

	17.4
	0.000821
	0.000692
	0.000540
	0.000495
	0.000452
	0.000362
	0.000282

	17.6
	0.000897
	0.000754
	0.000602
	0.000554
	0.000508
	0.000406
	0.000318

	17.8
	0.000973
	0.000816
	0.000664
	0.000613
	0.000564
	0.000449
	0.000354

	18.0
	0.001049
	0.000878
	0.000726
	0.000672
	0.000620
	0.000493
	0.000390

	18.2
	0.001116
	0.000939
	0.000772
	0.000714
	0.000658
	0.000530
	0.000425

	18.4
	0.001184
	0.001000
	0.000819
	0.000756
	0.000696
	0.000567
	0.000460

	18.6
	0.001252
	0.001061
	0.000865
	0.000799
	0.000735
	0.000605
	0.000496

	18.8
	0.001320
	0.001121
	0.000912
	0.000841
	0.000773
	0.000642
	0.000531

	19.0
	0.001388
	0.001182
	0.000958
	0.000883
	0.000811
	0.000679
	0.000566

	19.2
	0.001434
	0.001222
	0.000998
	0.000920
	0.000844
	0.000708
	0.000594

	19.4
	0.001480
	0.001262
	0.001038
	0.000956
	0.000876
	0.000737
	0.000623

	19.6
	0.001526
	0.001302
	0.001078
	0.000992
	0.000908
	0.000765
	0.000652

	19.8
	0.001573
	0.001342
	0.001118
	0.001029
	0.000941
	0.000794
	0.000681

	20.0
	0.001619
	0.001382
	0.001158
	0.001065
	0.000973
	0.000823
	0.000709

	25.0
	0.002734
	0.002374
	0.002014
	0.001893
	0.001777
	0.001562
	0.001383

	30.0
	0.003723
	0.003230
	0.002806
	0.002631
	0.002459
	0.002172
	0.001934

Source: National Bureau of Standards Interagency Report 77-867.
Note 1:    Molecular mass of mixture equals ∑ (Xi x Mi).
Note 2:    For intermediate values of temperature and molecular mass a linear interpolation shall be applied.

 15

EXHIBIT B 
FORM OF PORT LIABILITY AGREEMENT

EXHIBIT C
FORM OF GUARANTY

EXHIBIT D
FORM OF DIRECT AGREEMENT

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