Document:

exhibit101dingogspa

Exhibit 10.1   CONFIDENTIAL TREATMENT REQUESTED.  INFORMATION FOR WHICH   CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED   WITH “[***]”.  AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN   FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.                        Magellan Petroleum (NT) Pty Ltd   Power and Water Corporation   Gas Supply and   Purchase Agreement                  Dingo Gas Field        

 

    page i   Contents   1 Definitions and interpretation 1   1.1 Definitions 1   1.2 Interpretation 11   2 Measurement 12   2.1 Units of Measurement 12   2.2 Rounding of Dollars 12   2.3 Rounding of Gas Quantities 12   2.4 Contract Years of less than 365 Days 12   3 Conditions Precedent 13   3.1 Conditions 13   3.2 Board Approval 13   3.3 Seller Conditions 13   3.4 Satisfaction date 14   3.5 Extension of CP Date 14   3.6 Termination 14   4 Warranties 14   4.1 Warranties by Seller 14   4.2 Implied warranties 15   4.3 Warranties by Buyer 15   5 Construction and Commencement of Supply 15   5.1 Construction of Upstream Facilities 15   5.2 Supply Commencement Date 15   5.3 Determination of Commencement Date 15   5.4 Delays in Commencement Date 16   6 Supply Period 16   6.1 Supply Period 16   6.2 Expiry Date 16   7 Sale and purchase of Gas 16   7.1 Sale and purchase of Gas 16   7.2 Reserves Report 17   7.3 Annual Contract Quantity 17   7.4 Obligation to pay 19   7.5 Reduction in Annual take or pay quantity 19   7.6 Maximum Hourly Quantity 19   7.7 Increase in MDQ 20   7.8 Right of first refusal 20   7.9 Reduction in basic obligation 20   8 Make-up Gas 21   8.1 Make-up Gas 21     

 

       page ii   9 Nomination of quantities 22   9.1 Annual Forecast 22   9.2 Quarterly and Monthly Forecasts 22   9.3 Change in Forecasts 22   9.4 Daily Nomination 22   9.5 Form of nomination 23   10 Continuity of Supply 23   10.1 Planned Maintenance 23   10.2 Permitted interruptions – Seller 23   10.3 Permitted interruptions – Buyer 24   10.4 Reserves Shortfall 24   10.5 Priority 24   10.6 Source 24   11 Gas Quality 24   11.1 Specification 24   11.2 Delivery pressure 25   11.3 Notice of Off-Specification Gas 25   11.4 Return to Specification 25   11.5 Undelivered Off-Specification Gas 25   11.6 Dispute to be referred to expert 25   11.7 Limitation of liability for Off-Specification Gas 26   11.8 Odourisation 26   11.9 Removal of Certain Elements 26   12 Title and measurement 26   12.1 Title and risk 26   12.2 Provision of Metering Equipment 26   12.3 Check Measuring Equipment 27   12.4 Calibration 27   12.5 Correction 27   12.6 Inspection of Equipment and Records 27   12.7 Seller's Agent 27   12.8 Method of Measurement 28   12.9 Unit of Measurement 28   12.10 Atmospheric Pressure 28   12.11 Flowing Temperature 28   12.12 Determination of Gas Characteristics 28   12.13 Exchange of Metering Information 28   12.14 Preservation of Measurement Records 29   13 Price 29   13.1 Contract Price 29   13.2 Variation of Contract Price 29   14 Carbon 29   14.1 General 29     

 

       page iii   14.2 Definitions 29   14.3 Embodied Emissions Charges 31   14.4 Exclusive Application 31   14.5 Quotation of OTN 31   14.6 Survival 32   15 Change in Law 32   15.1 Change Events 32   15.2 Notification of Increased Costs Event 32   15.3 Increased Costs 32   15.4 Parties to meet and talk 33   15.5 Pass on of Financial Adjustment 33   16 Imposts 33   16.1 Seller liability 33   16.2 Buyer liability 33   17 Goods and Services Tax 34   17.1 GST 34   17.2 Invoices and statements 34   18 Billing and payment 35   18.1 Unit of billing 35   18.2 Monthly statements 35   18.3 Annual reconciliation 35   18.4 Time for payment 36   18.5 Interest 36   18.6 Disputed statements 36   18.7 Audit 36   18.8 Error in statements 37   19 Force majeure 37   19.1 Definition 37   19.2 Performance suspended by Event of Force Majeure 38   19.3 Mitigation 39   19.4 Notification and diligence 39   19.5 Consultation 40   19.6 End of Event of Force Majeure 40   19.7 Termination for prolonged Event of Force Majeure 40   20 Failure to supply 40   20.1 Failure to Supply 40   20.2 Exclusive Remedy 41   20.3 Audit 41   21 Default by Seller 42   21.1 Events of Default and Termination 42   21.2 Liability for failure to deliver 42   21.3 Effect of Termination 42     

 

       page iv   22 Default by Buyer 42   22.1 Default 42   22.2 Effect of Termination 43   23 Disputes and Independent Expert 43   23.1 Separate Agreement 43   23.2 Method 43   23.3 Senior Officer Resolution 43   23.4 Expert 44   23.5 Decision of Independent Expert 46   23.6 Costs 46   23.7 Information and Representation 46   23.8 Arbitration 46   23.9 Arbitration Procedure 46   23.10 Confidentiality of Arbitration Proceedings 47   23.11 Interlocutory or urgent relief 47   24 Seller’s and Buyer’s limitation of liability 47   24.1 General Limitation of Liability 47   24.2 Survival 47   25 Assignment 48   25.1 Assignment by Seller 48   25.2 Assignment by Buyer 48   25.3 Assignment to Related Corporation 48   25.4 Change of control 49   25.5 Right to Charge 49   26 Notices 49   26.1 Method of notice 49   26.2 Change of address 51   27 Confidentiality 51   27.1 Duty of confidentiality 51   27.2 Public Announcements 52   28 Miscellaneous 52   28.1 Governing law 52   28.2 Costs and stamp duty 52   28.3 Entire agreement 52   28.4 Severability 53   28.5 Amendment 53   28.6 Further assurances 53   28.7 No waiver 53   28.8 Partnership 53   28.9 Counterparts 53     

 

       page v   Schedule 1 - Specification 54   Schedule 2 - Contract Price 55        

 

    page 1   Date      Parties   Magellan Petroleum (NT) Pty Ltd ABN 95 009 718 183 of Level 1, 167 Eagle street,   Brisbane, Queensland (Seller)    Power and Water Corporation ABN 15 947 352 360 of Level 2, Mitchell Centre, 55-59   Mitchell Street, Darwin, Northern Territory (Buyer)      Background   A The Seller has agreed to sell and deliver Gas to the Buyer on the terms and   conditions contained in this Gas Supply Agreement.   B The Buyer has agreed to purchase and take delivery of Gas from the Seller on   the terms and conditions contained in this Gas Supply Agreement.         Agreed terms   1 Definitions and interpretation   1.1 Definitions   In this Agreement unless the contrary intention appears:   1P Reserves means Proved Reserves including developed reserves and   undeveloped reserves as defined and assessed in accordance with the SPE   Code.   Aboriginal Lands Act means the Aboriginal Land Rights (Northern Territory)   Act 1976 (Cth).    Accumulated Make-up Gas means at the commencement of any Contract   Year the aggregate quantity of Make-up Gas less all quantities of Make-up Gas   which the Buyer has recovered over preceding Contract Years.   Act means the Petroleum Act of the Northern Territory.   Affected Party means a Party whose ability to perform its obligations under this   Agreement is prevented or deemed to be prevented, wholly or in part, by an   Event of Force Majeure.   Agreement means this agreement including its recitals and schedules.     

 

    page 2   Aggregate Delivery Quantity or ADQ has the meaning under clause 18.3(c).   Annual Contract Quantity or ACQ means the maximum quantity of Gas the   Seller may be required to deliver over a Contract Year as determined under   clause 7.3.   Annual Take or Pay Quantity or ATPQ means 100% of the ACQ.   Applicable Carbon Scheme means each of the Clean Energy Scheme and   New Emissions Scheme as applicable.   Authorisation includes:   (a) any consent, authorisation, registration, filing, recording, agreement,   notarisation, certificate, permission, licence, approval, permit, authority or   exemption, including a pipeline licence under the Pipelines Act and a   production licence under the Act; or   (b) in relation to any act, matter or thing which may be proscribed or restricted   in whole or in part by law or otherwise if a Government Body intervenes or   acts in any way within a specified period after lodgement, registration or   other notification of such act, matter or thing, the expiration of such period   without such intervention or action.   Bank Bill Rate means the Australia & New Zealand Banking Group Limited   Reference Rate from time to time provided that if the said bank ceases to publish   or use such rate then the “Bank Bill Rate” will be such rate as charged from time   to time by Australia & New Zealand Banking Group Limited on overdraft   accounts for amounts in excess of $100,000.00 as advised to the Seller by that   bank.   Board of Directors means the directors of a Party or sufficient of them to make   a decision which binds the Party in accordance with its constituent documents.    Business Day means a day on which banks are open for business in Darwin,   excluding a Saturday, Sunday or a public holiday.   Buyer Permitted Interruption means any discontinuance or cessation or   reduction by the Buyer in taking Gas due to the shutdown or reduction in   operation of the Buyer’s Plant because of any of the following:   (a) any planned interruption of the Buyer’s Plant required by the Buyer having   regard to Good Engineering and Operating Practices including any   suspension of operations required to allow interconnection of processing   and transportation facilities and infrastructure for gas, for a maximum of   10 days in each Contract Year; and     (b) any unplanned interruption of the Buyer's Plant for a maximum of 5 days in   each Contract Year.     Buyer’s Plant means Owen Springs Power Station at Brewer Estate near Alice   Springs and any part of that facility.    Carbon Cost means any liabilities, charges, expenses, duties, or taxes or   Imposts that:    (a) are imposed upon or incurred by:     

 

    page 3   (i) the Seller; or   (ii) any supplier, transporter (including a pipeline operator), wholesaler,   distributor, retailer or other person and passed on to the Seller,   in respect of the production, recovery, processing, transportation, handling   or supply of Gas under this Agreement up to the Delivery Point; and   (b) directly arise out of or result from implementation of a Carbon Scheme and   include, without limitation:   (i) import or excise costs or sales tax;   (ii) energy or fuel costs being higher than they would otherwise be in   the absence of the Carbon Scheme; and   (iii) the amount of any Impost or charge imposed under the Carbon   Scheme (except where arising as a result of non-compliance by the   Seller or any person with the Carbon Scheme);   but excluding any Embodied Emissions Charges.   Carbon Scheme means any law or regulation with respect to the production, or   emission of, or to reduce, limit, cease, prevent, offset, manage, remove or   sequester, greenhouse gas emissions, including without limitation the Clean   Energy Scheme and any other mandatory emissions trading scheme or carbon   tax for the reduction or management of greenhouse gas emissions or   concentrations.   Carbon Scheme Change means the introduction of a new Carbon Scheme or   amendment to an existing Carbon Scheme.    Clean Energy Scheme means the clean energy future scheme of the   Commonwealth of Australia established under the Clean Energy Act 2011 (Cth)   and its associated Acts, regulations, determinations and guidelines as amended   from time to time provided that the scheme continues to include a Transfer   Mechanism.   Commencement Date means the date for commencement of supply of Gas   determined under clause 5.3.   Conditions means the conditions precedent to this Agreement set out in   clause 3.1.   Connection Pipeline means the pipeline for the transmission of gas from the   Gas Production Area to the Treatment Plant, which will be approximately 43kms   in length.   Contract Day means any Day in the Supply Period.   Contract Month means each Month during a Contract Year.   Contract Year means each period of 12 consecutive Months during the Supply   Period commencing at 8.00 am on 1 January and ending at 8.00 am on 1   January in the following calendar year except that:   (a) the first Contract Year will commence at 8.00 am on the Commencement   Date and end at 8.00 am on the immediately following 1 January; and     

 

    page 4   (b) the final Contract Year shall end at 8.00 am on the last day of the Supply   Period.   Contract Price means the GST exclusive price for the Gas as calculated in   accordance with Schedule 2.   CP Date is defined in clause 3.4.   CPI means the Consumer Price Index Weighted Average of 8 Capital Cities (All   Groups) as determined by the Australian Bureau of Statistics, and if that index is   discontinued or if its basis of assessment is changed so that it no longer   accurately reflects changes in the prevailing levels of prices substantially in the   same manner as it did prior to the change in basis, then such other index in   substitution for that index:   (a) as may be provided by the Australian Bureau of Statistics; or   (b) if no index is provided by the Australian Bureau of Statistics, as may be   agreed by the Seller and the Buyer; or   (c) if no index is provided by the Australian Bureau of Statistics and the Seller   and the Buyer are unable to agree within 30 days, as may be provided, at   the request of either the Buyer or the Seller, by the President for the time   being of the Institute of Actuaries of Australia, or by that person’s nominee,   which will provide a basis for comparison equivalent to the Consumer   Price Index Weighted Average of 8 Capital Cities (All Groups).   Daily Contract Quantity or DCQ means for any Day in a Contract Year the   ACQ for that Contract Year divided by the number of days in the relevant   Contract Year.   Day means a period of 24 consecutive hours beginning at 8.00 a.m. on a day   and ending at 8.00 a.m. on the following day.   Default means a breach of this Agreement by a Party.    Default Quantity has the meaning under clause 20.1.   Default Rate means the Bank Bill Rate plus 2% per annum.   Defaulting Party means, in the case of a Default by or in respect of:   (a) the Seller, the Seller; and   (b) the Buyer, the Buyer.   Delivery Point means the flange on the spurline of the Palm Valley – Alice   Springs Pipeline, in the immediate vicinity of the Buyer’s Plant at the location to   be determined in accordance with clause 5.1(b).    Delivery Shortfall has the meaning under clause 20.1.   Dispute has the meaning given to that term in clause 23.2.   Dispute Notice has the meaning given to that term in clause 23.2.   Economically Deliverable Reserves means the level of 1P Reserves within   the Gas Production Area identified as deliverable during each Contract Year in     

 

    page 5   the Reserves Report, with the criteria for the Independent Certifier to conclude   that reserves are economically deliverable during a Contract Year to be in   accordance with the SPE Code and by reference to each of the following:   (a) the only available market for gas from the Gas Production Area is   constituted by the terms of this Agreement, including Contract Price;   (b) the costs of processing and transporting the Gas to the Delivery Point are   the  actual costs to the Seller of operating and maintaining the Upstream   Facilities either directly or through tolling and use charges payable to third   parties;   (c) the Seller is not required to incur any additional capital expenditure in   respect of production, processing and transportation from the Gas   Production Area which would not be economic under then current   economic conditions as those terms are defined in the SPE Code; and   (d) the Seller must derive a minimum acceptable rate of return on the capital   investment involved in the production, processing and transporting of the   Gas which rate of return reasonably reflects the weighted average cost of   capital or the minimum acceptable rate of return of the Seller but must be   consistent with Australian petroleum industry norms for a company the   size of the Seller as at the relevant date.   Eligible Emissions Unit has the same meaning as in the Clean Energy Act   2011 (Cth).   Embodied Emissions Charges means any liability, cost or expense (whether   by way of Impost, levy, fee, tax, charge or otherwise), directly imposed on or   incurred by the Seller pursuant to:   (a) the Clean Energy Scheme (including the cost of paying an Acceptable   Shortfall Charge or the cost of acquiring Eligible Emissions Units for the   purposes of discharging its compliance liability or avoiding a liability under   the Clean Energy Scheme); or   (b) a New Emissions Scheme,   in each case, in respect of the number of tonnes of potential greenhouse gas   emissions (measured in the Relevant Substance) embodied in an amount of   Gas supplied at the Delivery Point under this Agreement calculated in   accordance with the requirements of the Clean Energy Scheme (or a New   Emissions Scheme).    Environmental Authorities means all permits, consents, licences, authorities   and approvals under the laws of the Northern Territory and/or the   Commonwealth relating to the environment required in respect of the   construction and operation of the Upstream Facilities and the Production   Licence.   Event of Force Majeure has the meaning given to that term in clause 19.1.   Expiry Date means the date the Supply Period ends as determined under   clause 6.2.     

 

    page 6   Export Pipeline means any necessary compressors and the pipeline running   from the Treatment Plant to the Delivery Point, including all metering and testing   equipment upstream of the Delivery Point.   Financial Adjustment means an adjustment in the amounts payable under this   Agreement (whether in the form of a lump sum or recurrent payment or increase   in the Contract Price or otherwise) pursuant to clause 15.   gas means a mixture of one or more hydrocarbons and other gases which, at   atmospheric pressure and 15oC, is in a gaseous state.   Gas means gas which meets the Specification and includes any   Off-Specification Gas delivered to the Buyer in accordance with clause 11.5(b).   Gas Production Area means the natural gas reservoir or series of reservoirs   within the Arumbera Sandstone and Julie Formation within the Retention   Licence or within any Production Licence succeeding to the Retention License   and referred to as the “Dingo Field”.    GJ means one gigajoule which is equal to 109 joules.   Good Engineering and Operating Practices means recognised practices,   methods and acts, together with the exercise of that degree of skill, diligence,   prudence and foresight that reasonably would be expected from Australian and   internationally recognised operators under conditions comparable to those   applicable to the relevant facility in the light of known facts or facts which should   reasonably have been known at the time and consistent with applicable law,   regulations, Authorisations, consents and licences and having regard to the   need for:   (a) adequate materials;   (b) suitable personnel;   (c) appropriate maintenance procedures;   (d) ongoing monitoring and testing of plant and equipment performance; and   (e) safe operating procedures.   goods means goods as defined in the GST Law.   Government Body means any government, governmental or semi-government   or judicial entity, any ministry and any public, statutory or administrative entity,   whether domestic, federal, state or local.   Gross Heating Value means the gross number of joules produced by the   complete combustion of 1 cubic metre of gas at a temperature of 15°C and under   an absolute pressure of 101.325 kPa with air of the same temperature and   pressure as the gas, when the products of combustion are cooled to the initial   temperature of the gas and air, and when the water formed by combustion is   condensed to the liquid state, corrected to a water vapour free basis and   expressed at a pressure base of 101.325 kPa.   GST means any tax on goods, services or goods and services, including any   value-added tax, broad-based consumption tax or other similar tax.     

 

    page 7   GST Law means A New Tax System (Goods and Services Tax) Act 1999 (Cth)   (as amended from time to time) or any replacement or other relevant legislation   and regulations, and includes any other legislation enacted to validate, recapture   or recoup tax collected as GST.   Impost means any royalty (whether based on value, profit or otherwise), tax   (other than GST and tax on income or tax on gains of a capital nature), including   petroleum resource rent tax,  environmental tax, excise, levy, fee, rate, or other   charge imposed by any Government Body (Federal, State or local in Australia)   (other than a Carbon Cost or Embodied Emissions Charge) which is or may   become payable in respect of the recovery, production, transportation,   processing, export, import, supply, sale or use of Gas delivered under this   Agreement.    Increased Costs Event means where:   (a) an Impost which was not in force as at the date of this Agreement is   imposed or the basis for imposing or calculating any Impost changes; or   (b) any liability, cost or reduction in benefit is incurred in connection with the   production, recovery, processing, transportation, handling or sale of the   Gas to be supplied under this Agreement due to or arising from the   introduction of, or a change in a Law or a change to the interpretation or   effect of a Law (other than a Carbon Scheme Change) which occurs after   the date of this Agreement;   (c) Carbon Costs increase as the result of a Carbon Scheme Change which   occurs after the date of this Agreement;   but does not include an Embodied Emissions Charge.   Increased Costs Event Notice has the meaning given in clause 15.2.   Independent Certifier means an internationally recognised firm or company   which carries out certification of gas reserves, or a member of such a firm or   company, selected by the Seller with the consent of the Buyer, such consent not   to be unreasonably withheld.    Independent Expert means an expert appointed under and for the purposes of   clauses 23.3 and 23.4.   Input Tax Credit has the meaning given to that term in the GST Law.   Invoice includes a document deemed to constitute a Tax Invoice under the GST   Law.   kPa means kilopascal.   Law means common law, equity, any statute, regulation, order, rule, subordinate   legislation or other document enforceable under any statute, regulation, order,   rule or subordinate legislation and includes the amendment, modification,   consolidation, re-enactment or replacement of any of them.   Loss includes loss, costs, damages, liabilities and expenses.   Make-up Gas or MUG means the quantity of Gas which is paid for but not taken   by the Buyer in any Contract Year.     

 

    page 8   Material Default means a Default which causes or is likely to cause to the   Non-Defaulting Party damages, costs or expenses either directly or if it is not   rectified, of at least $500,000 or which would otherwise remove or substantially   vitiate for the Non-Defaulting Party a benefit or consideration under this   Agreement.   Maximum Daily Quantity or MDQ means the maximum quantity of Gas which   the Seller can be required to deliver on any Day during a Contract Year being   120% of DCQ for the relevant Day.   Maximum Hourly Quantity or MHQ means the maximum quantity of Gas which   the Seller can be required to deliver over any hour of any Day during a Contract   Year being the MDQ for the Day divided by 24.   Metering Equipment means suitable equipment of a standard of manufacture   approved for use in the Northern Territory for measuring the rate and quantity of   gas delivered to the Delivery Point and to be located on the Export Pipeline in the   vicinity of the Delivery Point.   MJ means one megajoule which is equal to 106 joules.   Month means a period commencing at 8.00 a.m. on the first day of a calendar   month and ending at 8.00 a.m. on the first day of the next calendar month.   MUG Reserve Amount means the lesser of;   (a) Accumulated Make-up Gas; and   (b) 0.315 PJ (i.e., 60 x MDQ).   Native Title Act means the Native Title Act 1993 (Cth).   Net Financial Effect means the net effect in financial terms of an Increased   Costs Event on the costs incurred by the Seller in producing, processing,   transporting or selling the Gas to be supplied under this Agreement, taking into   account any offsetting benefit available to the Seller which is related to the   Increased Costs Event.   New Emissions Scheme means the introduction of a new Carbon Scheme that   directly imposes a liability, cost or expense on the Seller in respect of the number   of tonnes of potential greenhouse gas emissions (measured in the Relevant   Substance) embodied in an amount of Gas supplied at the Delivery Point under   this Agreement.   NDQ or Nominated Daily Quantity means the quantity of Gas which the Buyer   nominates in accordance with clause 9 for delivery to the Delivery Point on any   Day but which cannot exceed on any Day the MDQ for that Day.   Non-Defaulting Party means the Party which is not the Defaulting Party in   respect of a Default.    Nominations means nominations for the quantity of Gas to be delivered on any   Day as given by the Buyer in accordance with clause 9.   Notice has the meaning given in clause 26.1.   Off-Specification Gas means gas which does not meet the Specification.     

 

    page 9   Palm Valley – Alice Springs Pipeline means the pipeline from the Palm Valley   gas field to Alice Springs including the spurline to the Buyer’s Plant.    Party means a party to this Agreement and are collectively referred to as the   Parties.   Permitted Interruptions means each and both of Buyer Permitted Interruption   and Seller Permitted Interruption.    Pipelines Act means Energy Pipelines Act of the Northern Territory.    Pipeline Licence means a pipeline licence under the Pipelines Act granted in   respect of the Connection Pipeline.   Planning Approval means the permit, approval or consent required under   Northern Territory planning and development laws to permit the lawful   construction and operation of the Treatment Plant.   PJ means one petajoule which is equal to 1015 joules.   Production Plant means a gas gathering system and plant located at the Gas   Production Area intended to produce, gather and process gas for transport in the   Connection Pipeline.    Production Licence means a production licence under the Act granted to the   Seller in respect of the Gas Production Area.   Proposed Financial Adjustment has the meaning given in clause 15.3(d).   Quarter means a period of 3 calendar months commencing on the first day of   July, October, January or April and Quarterly has a corresponding meaning.   Reasonable and Prudent Operator means a person who exercises that   degree of diligence, prudence and foresight reasonably and ordinarily exercised   by skilled and experienced operators under similar circumstances and   conditions and in accordance with applicable laws, regulations and standards.   Reckless means where the Party did not actually intend or foresee the relevant   consequence/s of its action or omission but there was a reasonably apparent   risk that such consequences would occur, and the Party took the action or made   the omission as a result of a mental attitude of indifference to the existence of the   risk or deliberate failure to investigate the existence of the risk, where that   attitude or failure was caused by or constitutes more than negligence, or a failure   to take reasonable care or an error of judgement, but was rather so wanton and   reckless that a reasonable person considering the results of the Party’s acts or   omissions on an objective basis would be justified acting reasonably in   concluding that the Party actually foresaw and intended the consequences or   had an utter disregard for the obvious and foreseeable consequences.   Reduction has the meaning given in clause 7.5   Related Corporation means, in relation to:   (a) the Seller, a body corporate that is a related body corporate of the Seller   within the meaning of section 50 of the Corporations Act 2001; and     

 

    page 10   (b) the Buyer, a body corporate that is a related body corporate of the Buyer   within the meaning of section 50 of the Corporations Act 2001.     Relevant Substance means CO2-e or such other substance stipulated under   the Applicable Carbon Scheme from time to time by which potential greenhouse   gas emissions embodied in the Gas delivered under this Agreement must be   measured.    Requested Commencement Date means the date which is 18 months from the   date of this Agreement, as extended under clause 3.5(c).   Retention Licence means retention licence 2 granted under the Act.   Reserves has the meaning ascribed to that term under the SPE Code.   Reserves Report is defined in clause 7.2.    Reserves Shortfall has the meaning under clause 10.4.   Seller Conditions has the meaning under clause 3.3(a).   Seller Permitted Interruption means any discontinuance or cessation or   reduction by the Seller in the supply or delivery of Gas against the NDQ due to   the shutdown or reduction in operation of the Seller’s Facilities because of any of   the following:   (a) any planned interruption of the Seller’s Facilities, required by the Seller or   the operators of those facilities having regard to Good Engineering and   Operating Practices including any suspension of operations required to   allow interconnection of processing and transportation facilities and   infrastructure for gas, for a maximum period of 10 Days in each Contract   Year;    (b) any unplanned interruption of the Seller’s Facilities (other than under   subclause (c)), required by the Seller or the operators of those facilities for   a maximum period of 5 Days in each Contract Year; and    (c) any unexpected  or unplanned  problem or event which arises within  the   first 30 days on and from the Commencement Date , for a maximum   period of 72 hours.   Seller’s Facilities means the wells, pipelines, plant and equipment for the   production, transportation, processing, measuring and testing of gas upstream   of the Delivery Point which are necessary to produce or deliver Gas to the Buyer   at the Delivery Point, including the Upstream Facilities (whether or not owned by   or operated for the Seller) and any one or more of them and any part of them.   Senior Officer means a person having authority, without recourse to the Party   that designated him or her for further authority or instructions, to settle the matter   requiring resolution.   Specification means the Gas Specification Dingo Field set out in schedule 1.   SPE Code means the document called “Petroleum Resources Management   System” published in 2007 and the document called “Guidelines for the   Application of the Petroleum Resources Management System” published in   November 2011, each by the Society of Petroleum Engineers.      

 

    page 11   Supply has the meaning given to that term in the GST Law.   Supply Period has the meaning given to that term in clause 6.1.   Tax Invoice has the meaning given to that term in the GST Law.   Term Sheet means the document entitled “Dingo Gas Supply Terms Sheet –   11 April 2013” between the Parties relating to the subject matter of this   Agreement.   TJ means one terajoule which is equal to 1012 joules.   Transfer Mechanism means a statutory mechanism under a Carbon Scheme   for transferring from the Seller to the Buyer the Seller’s direct liability under that   scheme for the potential greenhouse gas emissions embodied in the Gas   supplied under this Agreement.   Treatment Plant means a gas processing plant intended to process gas from   the Gas Production Area to meet the Specification, which plant is to be located   within Brewer Estate near Alice Springs at a place determined by the Seller.   Upstream Facilities means each of the Production Plant, Connection Pipeline,   Treatment Plant and Export Pipeline.   Wilful Misconduct means a deliberate or Reckless refusal to comply with the   terms of this Agreement by a Party where that Party otherwise has the ability to   comply. For the avoidance of doubt, Wilful Misconduct does not include a Party's   negligence (as defined by common law and/or statute from time to time).   1.2 Interpretation    In this Agreement:   (a) headings are for convenience only and do not affect interpretation;    (b) unless the context indicates a contrary intention:   (i) "person" includes an individual, the estate of an individual, a   corporation, an authority, an association or a joint venture (whether   incorporated or unincorporated), a partnership, a trust, state or   government;   (ii) a reference to a party includes that party's executors,   administrators, successors and permitted assigns, including   persons taking by way of novation;   (iii) a reference to a document (including this Agreement) is to that   document as varied, novated, ratified or replaced from time to time;   (iv) a reference to a statute includes its delegated legislation and a   reference to a statute or delegated legislation or a provision of either   includes consolidations, amendments, re-enactments and   replacements;    (v) a reference to any authority, association or body whether statutory   or otherwise shall, in the event of any such authority, association or   body ceasing to exist or being re-constituted, re-named or replaced   or the powers or functions thereof being transferred to any other     

 

    page 12   authority, association or body, be deemed to refer respectively to   the authority, association or body established or constituted in lieu   thereof or as nearly as may be succeeding to the powers or   functions thereof;   (vi) a word importing the singular includes the plural (and vice versa),   and a word indicating a gender includes the other gender;   (vii) a reference to this Agreement includes all schedules, exhibits,   attachments and annexures to it;   (viii) if a word or phrase is given a defined meaning, any other part of   speech or grammatical form of that word or phrase has a   corresponding meaning;   (ix) "includes" in any form is not a word of limitation;   (x) a reference to "$" or "dollar" is to Australian currency; and   (xi) references to time are references to time in Darwin, Northern   Territory and “month” is a reference to “calendar month”.   2 Measurement   2.1 Units of Measurement   Terminology used to describe units will be, unless otherwise stated, in   accordance with Australian Standard AS1000-1998 “The International System of   Units (SI) and its Application”, the National Measurement Act 1960 of the   Commonwealth of Australia and Regulations thereunder and Australian   Standard AS/NZS1376-1996 “Conversion Factors”.   2.2 Rounding of Dollars   For the purpose of this Agreement any fractional part of a dollar must be rounded   to four places after the decimal point with the fourth decimal being rounded up if   the fifth decimal is “5” or a greater number and rounded down if the fifth decimal   is less than “5”.   2.3 Rounding of Gas Quantities   (a) For billing purposes under this Agreement all quantities of Gas must be   rounded to the nearest GJ.   (b) Unless otherwise specified, gas and Gas measured and stated for the   purposes of this Agreement are to be measured and stated by reference to   the Gross Heating Value.   2.4 Contract Years of less than 365 Days   Any quantity expressed in this Agreement which is applied to or by reference to a   Contract Year will, in the case of a Contract Year comprising less than 365 days,   be reduced on a pro rata basis based on the number of days in that Contract   Year.     

 

    page 13   3 Conditions Precedent   3.1 Conditions    This Agreement (other than this clause and clauses 1,19, 23,24, 25, 26, 27 and   28) is subject to and conditional upon the following:   (a) the Board of Directors of each of the Seller and Buyer approving this   Agreement;    (b) the acquisition by the Seller of land within Brewer Estate for the location of   the Treatment Plant;   (c) the Seller obtaining the Planning Approval;    (d) the Seller obtaining the Pipeline Licence;   (e) the Seller obtaining the Production Licence;     (f) the Seller entering into agreements with all relevant native title parties and   Aboriginal people representative bodies or groups as may be required   under the Native Title Act and the Aboriginal Lands Act to:   (i) allow the grant of the Pipeline Licence and the Production Licence;   and   (ii) secure access to and use of the pipeline corridor for the Connection   Pipeline  and the Export Pipeline;   (g) the Seller obtaining the Environmental Authorities; and   (h) the Seller obtaining financing for the construction of the Upstream   Facilities in an amount and on terms acceptable to the Seller.   3.2 Board Approval   (a) Each Party must seek the approval of its Board of Directors to this   Agreement either prior to or as soon as practicable after its execution.    (b) If that approval is not obtained by a Party within 45 days of the date of this   Agreement then that Party may terminate this Agreement by notice in   writing to the other Party without liability and thereupon the Parties shall be   released from all and any obligations and liabilities under this Agreement.   (c) Each Party must notify the other of receipt of approval of its Board of   Directors within one Business Day of that approval being given.   (d) If a Party has not provided a notification under clause 3.2(c) by no later   than one Business Day after the expiration of the 45 days of the date of   this Agreement, then it will be deemed not to have obtained approval of its   Board of Directors within the said 45 days.   3.3 Seller Conditions   (a)  The Seller shall be responsible for satisfying the Conditions at clauses   3.1(b) to (h)inclusive (Seller Conditions) and must use its reasonable   endeavours to do so provided that the Seller will not be required to act to     

 

    page 14   its financial detriment (as reasonably determined by the Seller) in   satisfying any of those Conditions.   (b) The Seller must keep the Buyer informed on a monthly basis as to   progress in satisfaction of the Seller Conditions.   (c) The Buyer must give, at the Seller’s cost, any reasonable assistance   which the Seller requests of the Buyer in satisfying any of the Seller   Conditions, including, accepting gas at the Delivery Point to enable   commissioning of any of the Upstream Facilities.   3.4 Satisfaction date   (a) Each of the Seller Conditions must be satisfied or waived by the date that   is the first anniversary of the date of this Agreement (CP Date).    The Seller Conditions are for the sole benefit of the Seller and may be   waived by the Seller in its absolute discretion.   3.5 Extension of CP Date   (a) Provided the Seller has complied with clause 3.3(a) and has used   reasonable endeavours to overcome or minimise the extent of the delay,   the Seller may  extend the  CP Date for the period of the estimated delay   on one or more occasions, but in any event by no more than six months in   aggregate from the original CP Date, by written notice to the Buyer given   not later than 28 days prior to the then current CP Date if it considers that   the Seller Conditions will not be satisfied prior to the then current CP Date.     (b) Each notice under clause 3.5(a) will set out the causes of the delay and   the steps which the Seller has taken to overcome or minimise the extent of   the delay.     (c) Each time the CP Date is extended under this clause 3.5, the Requested   Commencement Date will be extended by an equivalent period of time.   3.6 Termination   If any of the Seller Conditions are not satisfied or waived by the CP Date   (including as extended under clause 3.5), then either Party may by notice in   writing to the other terminate this Agreement whereupon the Parties shall be   released from all or any further obligation or liability under this Agreement. Prior   to the  CP Date neither Party may terminate this Agreement except pursuant to   clause 3.2(b) or clause 19.   4 Warranties   4.1 Warranties by Seller   The Seller represents and warrants to and for the benefit of the Buyer that:   (a) it will have good title to all Gas delivered to the Buyer under this   Agreement and that at the Delivery Point such Gas will be free from all   mortgages, charges, liens and other encumbrances and adverse claims;     

 

    page 15   (b) it is a body corporate duly incorporated in its place of incorporation and   validly existing; and   (c) it has full power, authority and legal right to execute and deliver and   perform its obligations under this Agreement.   4.2 Implied warranties   To the full extent permitted by law, any warranties regarding the quality of the   Gas, its fitness for any particular purpose and its merchantability, other than   those expressly stated in this Agreement, are excluded from and shall form no   part of the agreement between the Parties.   4.3 Warranties by Buyer   The Buyer represents and warrants to and for the benefit of the Seller that:   (a) it is a body corporate duly incorporated in its place of incorporation and   validly existing; and   (b) it has full power, authority and legal right to execute and deliver and   perform its obligations under this Agreement.   5 Construction and Commencement of Supply   5.1 Construction of Upstream Facilities   (a) The Seller will commence the work required to construct and commission   the Upstream Facilities and use its reasonable endeavours to complete   construction and commissioning to be in a position to commence the   supply of gas by the Requested Commencement Date.    (b) The Buyer must at its cost cause the Delivery Point to be constructed   through its arrangements with the owner/operator of the Palm Valley-Alice   Springs Pipeline. The Buyer must ensure the Delivery Point is available for   tie-in or connection with the Export Pipeline in sufficient time to allow the   supply of gas by the Requested Commencement Date. Each Party must   give reasonable assistance to the other Party, as requested by it, and   consult with the other Party concerning construction of the Delivery Point.   Further the exact location of the Delivery Point must be agreed by both   Parties.    5.2 Supply Commencement Date   The supply of Gas in accordance with this Agreement shall commence on and   from the Commencement Date.    5.3 Determination of Commencement Date   The Seller shall provide notice of the Commencement Date to the Buyer within   14 days after the completion of construction and commissioning of the Upstream   Facilities (including the obtaining of all approvals and licences required to   operate the Upstream Facilities) and the Delivery Point. The Commencement   Date must be no later than the first day of that Month which first commences on   or after 14 days after the date of the notice.      

 

    page 16   5.4 Delays in Commencement Date   Where, other than due to any of:    (a) a delay in completion of construction or commissioning of the Upstream   Facilities because of an Event of Force Majeure; or    (b) termination of this Agreement under clause 3.6 or    (c) a delay in the construction and commissioning of the Delivery Point,    the Commencement Date has not occurred within 90 days of the Requested   Commencement Date, then the Commencement Date will be deemed to be the   date which is 90 days after the Requested Commencement Date.   6 Supply Period   6.1 Supply Period   The Supply Period will start on the Commencement Date and end on the earlier   to occur of:   (a) 8.00 a.m. on the Expiry Date; and   (b) the date upon which this Agreement is terminated in accordance with the   provisions of this Agreement.   6.2 Expiry Date   The Expiry Date is the first to occur of:   (a) the day which is the 20th anniversary of the Commencement Date; and   (b) the day by when the aggregate quantity of Gas delivered to the Buyer   under this Agreement since the Commencement Date is 31 PJ; and   (c) the expiration of the last Contract Year as determined under clause   7.3(e).    7 Sale and purchase of Gas   7.1 Sale and purchase of Gas   During the Supply Period, subject to the terms and conditions of this Agreement:   (a) the Seller agrees to sell and make available for delivery to the Buyer at the   Delivery Point, Gas at a rate equal to the NDQ;   (b) the Seller is not required to deliver more than MDQ on any Day;    (c) subject to clause 8.1(b), the Seller is not required to deliver more than   ACQ in any Contract Year, but the Seller will use its reasonable   endeavours to supply more than ACQ in any Contract Year where   requested by the Buyer; and     

 

    page 17   (d) the Buyer agrees to nominate, purchase and take delivery of Gas made   available for delivery by the Seller at the Delivery Point in accordance with   this Agreement.   7.2 Reserves Report    The Seller must at its own cost procure a reserves report on the level of gas   reserves within the Gas Production Area as identified in accordance with the   SPE Code, prepared by an Independent Certifier, and which sets out (with   reasonable explanation):   (a) the Economically Deliverable Reserves  estimated for each Contract Year   over the balance of the Supply Period;   (b) any increase in ACQ which could be offered under clause 7.3(f);   (c) the quantity (if any) of any gas falling within clause 7.8(a) and the Contract   Price in respect of such quantity,   and provide that report to the Buyer at least 90 days before:   (d) the expiration of each Contract Year up to and including the 10th Contract   Year; and    (e) the expiration of each alternate Contract Year beginning with the 12th   Contract Year,   the most recent such report at any time being the Reserves Report.   7.3 Annual Contract Quantity   (a) The Annual Contract Quantity for each Contract Year shall (subject to   variation in accordance with clauses 7.3 and 7.8) be as follows:   Contract Year ACQ   First Contract Year  1.2 PJ    Second Contract Year  1.4 PJ   Contract Years 3 to 10 inclusive  1.6 PJ   Contract Years 11 to 21 inclusive up to 1.6 PJ as determined in   accordance with clause 7.3(c)       (b) Subject to Permitted Interruptions, Events of Force Majeure, Reserves   Shortfall and the default of the Buyer, the Seller acknowledges and agrees   that its basic obligation under this Agreement is to deliver against   nominations made by the Buyer a minimum of 15.4 PJ of Gas within the   period on and from the Commencement Date up to and including the tenth   anniversary of that date.  Subject to Clause 7.9, the ACQ for the 11th   Contract Year will be increased to the extent necessary for the Seller to   meet its basic obligation under this clause 7.3(b) to deliver against   Nominations a minimum of 15.4 PJ of Gas.     

 

    page 18   (c) For the 11th to 21st Contract Years inclusive (and subject to clause   7.3(b)) the ACQ shall be the Economically Deliverable Reserves for the   relevant Contract Year as indicated in the last Reserves Report as of the   date of commencement of the relevant Contract Year but up to and not   exceeding 1.6 PJ, provided that and subject to clause 7.3(e), for the 21st   Contract Year ACQ shall be the Economically Deliverable Reserves (up to   1.6 PJ pro-rated) for that Contract Year less the MUG Reserve Amount.   The 21st Contract Year means the Contract Year ending on the 20th   anniversary of the Commencement Date.    (d) For each of the 11th to 21st Contract Years, Economically Deliverable   Reserves shall be determined by reference to the Reserves Report.   (e) Where in respect of a Contract Year after Contract Year 10, the   Economically Deliverable Reserves are zero, subject to clause 7.3(b),   unless the Parties otherwise agree or the Buyer agrees to take an amount   of gas under clause 7.8, then the preceding Contract Year shall be the   last Contract Year of the Supply Period and the ACQ for that last Contract   Year shall be the Economically Deliverable Reserves for that Contract   Year less the MUG Reserve Amount, and the MUG may be taken by the   Buyer in accordance with clause 8.1 during that last Contract Year.    (f) This subclause applies only in respect of Contract Years in respect of   which the ACQ is 1.6 PJ. Where at any time the Seller (acting as a   Reasonable and Prudent Operator and having regard to the Reserves   Report) considers that the deliverability and capacity of Reserves from the   Gas Production Area is such as to permit an increase in the ACQ above   1.6 PJ for certain Contract Years:   (i) it may (but is not obliged to) notify the Buyer of what the Seller   considers to be that increase for one or more Contract Years;   (ii) within 30 Business Days of receiving that notification, the Buyer   must indicate whether it is prepared to accept the increased quantity   or part of it as ACQ for the relevant Contract Years;   (iii) if the Buyer so notifies the Seller, the increased quantity will become   ACQ for the relevant Contract Years for the purposes of this   Agreement; and   (iv) if the Buyer does not respond within the said 30 Business Days   there shall be no adjustment to the ACQ.    (g) If  the Seller in respect of any or all of the first and second Contract Years   offers (in writing prior to the commencement of that Contract Year) to   increase ACQ to 1.6 PJ then the Buyer must accept that offer and the ACQ   for the relevant Contract Years will be increased to 1.6 PJ.   (h) At the beginning of each Contract Year, the Seller will provide the Buyer   with a table showing the ACQ (adjusted in accordance with this clause 7)   for each Contract Year.     

 

    page 19   7.4 Obligation to pay   In respect of each Contract Year of the Supply Period the Buyer must pay   for the greater of ATPQR (ATPQ as reduced in accordance with   clause 7.5) or the quantity of Gas nominated by the Buyer and made   available for delivery at the Delivery Point by the Seller in accordance with   this Agreement over that Contract Year, at the Contract Price.   7.5 Reduction in Annual take or pay quantity   (a) The ATPQ for a Contract Year will be reduced in accordance with the   following formula:   ATPQR = ATPQ - Reduction   Where   ATPQR = the ATPQ which is reduced to take account of   any Reduction;   Reduction = the sum during the Contract Year of the   reductions, being the aggregate quantity of   Gas which the Seller did not make available for   delivery or the Buyer did not take on any Day   during the Contract Year as a result of any of   the following:   (i) an Event of Force Majeure entitling   the Buyer or Seller to suspend   performance of its obligations   under this Agreement;    (ii) any Buyer or Seller Permitted   Interruptions;    (iii) Off-Specification Gas delivered   without the Buyer’s consent or any   interruption to supply associated   with Off-Specification Gas;   (iv) Reserves Shortfall; and   (v) any Delivery Shortfall.   (b) In the absence of a nomination by the Buyer because of any of the events   within subparagraphs (i) to (iv) above, then the reductions shall be   calculated against the lesser of DCQ and the quantities of Gas last   nominated by the Buyer under clause 9 in relation to the relevant period.   7.6 Maximum Hourly Quantity   The hourly rate of delivery of the Gas on any Day shall not exceed MHQ.     

 

    page 20   7.7 Increase in MDQ   If requested by the Buyer in respect of any Day the Seller will use reasonable   endeavours to supply a quantity of Gas in excess of the MDQ, but the Seller   shall have no liability to the Buyer for any failure to supply in excess of the MDQ.   The Buyer cannot make requests for deliveries in excess of the MDQ throughout   a Contract Year in such a way as would cause the ACQ for that Contract Year to   be exceeded unless the Seller otherwise agrees in its absolute discretion.   7.8 Right of first refusal   (a) This clause only applies for a Contract Year or Years on and from Contract   Year 11 where in respect of that Contract Year (and before the application   of this clause) the ACQ is less than 1.6 PJ.   (b) From Contract Year 11 onwards, if based on a Reserves Report, the Seller    reasonably determines that any gas, up to a maximum quantity which   when added to the then existing ACQs for each of the relevant remaining   Contract Years would not exceed 1.6 PJ per Contract Year (Additional   Quantity), that was not considered as Economically Deliverable   Reserves, however, would become  Economically Deliverable Reserves if   the Contract Price were increased to offset increases in capital and   operating expenditure to produce, process and transport such Additional   Quantities of gas, then the Seller must offer to the Buyer to increase  the   ACQ for each remaining Contract Year by the Additional Quantity at the   increased Contract Price, on a first right of refusal basis.    (c) The Buyer shall have 60 days after receipt of that offer to accept that offer.    (d) If the Buyer accepts an offer made under paragraph (b) within the time   referenced above in paragraph (c), then the ACQ for each remaining   Contract Year of the Supply Period shall be increased by the Additional   Quantity and the Contract Price shall be adjusted to be the price contained   in the offer and the terms of this Agreement with all necessary changes   including provisions concerning the adjustment of the Contract Price in   Schedule 2, shall apply to the Seller’s obligation to sell and the Buyer’s   obligation to buy those increased ACQs  at the increased Contract Price   on and from the Contract Years indicated in the Seller’s offer.   (e) If the Buyer does not accept the offer or makes no response within the   60 days then the Seller is free to sell or otherwise dispose of the additional   quantities of gas on such terms, as it sees fit but at no lesser price than   that offered to the Buyer.    (f) Subject to clause 7.3(f)(iii), during any Contract Year the Seller is not   restricted from selling or disposing of quantities of Gas from the Gas   Production Area which are over and above the maximum ACQ of 1.6 PJ   allocated to this Agreement.   7.9 Reduction in basic obligation   (a) Pursuant to clause 7.3(b), the basic obligation to deliver against   Nominations made by the Buyer a minimum quantity of 15.4 PJ of Gas   (Basic Obligation Quantity) within the period on and from the     

 

    page 21   Commencement Date up to and including the tenth anniversary of that   date, may be reduced by the effects of Permitted Interruptions, Events of   Force Majeure, Reserves Shortfall and the default of the Buyer   (Reduction Events).   (b) Subject to clause 7.7, where deliveries of Gas against Nominations are in   excess of the ACQ in a Contract Year there shall be no reduction in the   Basic Obligation Quantity due to Reduction Events which may have   occurred during that Contract Year.   (c) If during a Contract Year during which Reduction Events occur, deliveries   of Gas against Nominations are less than the ACQ, then the Basic   Obligation Quantity shall be reduced by the lesser of:   (i) the difference between the ACQ and the actual quantity of Gas   delivered against Nominations during that Contract Year; and   (ii) the quantity equal to the DCQ for each day of each period of each   Reduction Event during that Contract Year (Basic Obligation   Quantity Reduction Amount).   8 Make-up Gas   8.1 Make-up Gas    (a) During  the Supply Period, the Buyer will be entitled to the delivery of   quantities of Gas paid for under clause 18 but not required to be delivered   or not taken by the Buyer during the previous periods (Make-up Gas or   MUG) provided deliveries of MUG and NDQ in aggregate on any Day   cannot exceed MDQ for that Day and provided that during the Supply   Period no Make-up Gas may be taken by the Buyer unless and until ACQ   has been taken for that Contract Year.    (b) During the Supply Period, the Seller will use reasonable endeavours to   deliver quantities of MUG over and above the ACQ where so nominated   by the Buyer.   (c) Gas paid for but not taken by the expiration of the Supply Period shall be   forfeited by the Buyer and no compensation is payable to the Buyer.    (d) The Buyer must pay for the MUG at the Contract Price prevailing at the   time the quantity of MUG is taken less the Contract Price paid for the   relevant quantity as part of the ATPQ. The prevailing Contract Price shall   be determined as if Schedule 2 continued to apply for that period.   (e) MUG will be deemed to be taken on a “first banked, first taken” basis.   (f) The Buyer must use reasonable endeavours to take delivery of MUG    continuously and as quickly as reasonably possible but at a rate that does   not exceed MDQ for any Day unless the Seller otherwise agrees.     

 

    page 22   (g) The Seller is not required to incur any capital costs to establish or maintain   facilities to enable the MUG Reserve Amount to be available or to be   delivered during the last Contract Year.    9 Nomination of quantities   9.1 Annual Forecast   At least 60 Days prior to the commencement of each Contract Year, the Buyer   must give notice to the Seller of:   (a) its forecast annual requirements of Gas under this Agreement for the next   5 Contract Years or the number of Contract Years remaining if less than 5;   and   (b) its forecast monthly  requirements of Gas under this Agreement for each   Month for the forthcoming Contract Year specifying for each Month its   forecast peak and average demands.   9.2 Quarterly and Monthly Forecasts   At least 7 Days prior to the commencement of each Quarter, the Buyer must give   notice to the Seller of its forecast requirements of Gas under this Agreement for   each of the following 12 Months specifying for each Month its forecast peak and   average demands.   At least 7 Days prior to the commencement of each Month, the Buyer must give   notice to the Seller of its forecast requirements of Gas under this Agreement for   each Day of that Month.   9.3 Change in Forecasts   The Buyer must give to the Seller as much notice as is reasonably possible of   any substantial changes in the forecast provided for in clauses 9.1 and 9.2 and   of any likely departures from such forecasts in the Buyer's actual requirements of   Gas.   9.4 Daily Nomination   The Seller and the Buyer agree as follows:   (a) By 10.00 am on each Day, the Buyer must nominate to the Seller, the   Buyer’s requirements for Gas for the next Day.   (b) The Buyer may amend its nomination given in accordance with paragraph   (a) of this clause 9.4 provided that notice of such amended nomination is   given not later than 2.00 pm on the day prior to the Day for which the   amended nomination is given.   (c) The Buyer may not give a Nomination which requires delivery of a quantity   of Gas in excess of the ACQ in any Contract Year or at a rate which would   cause the MDQ on any Day in any Contract Year to be exceeded unless   otherwise agreed by the Seller pursuant to clause 7.7.     

 

    page 23   (d) If the Buyer fails to notify the Seller of its requirements in accordance with   this clause 9.4, the Seller will continue to make Gas available for delivery   at the Delivery Point in accordance with the last nomination properly made   by the Buyer pursuant to clause 9.2. The Buyer must use its reasonable   endeavours to minimise the rate at which it varies its requirements for Gas   under this Agreement.   9.5 Form of nomination   (a) Nominations pursuant to this clause 9 may be made by facsimile or email   or another system as mutually agreed between the Parties.   (b) The Nomination is taken to be received when the Seller sends a Notice to   the Buyer acknowledging receipt and confirmation of the Nomination but   the Seller must acknowledge such receipt as soon as possible after   receiving the Nomination.   10 Continuity of Supply   10.1 Planned Maintenance   (a) In the third Month prior to the end of each Contract Year, the Parties must   meet and discuss maintenance requirements for the following Contract   Year and attempt to coordinate planned maintenance between the Parties   to minimise shortfalls in deliveries of Gas. The Buyer will at this time   provide to the Seller a schedule of the time during which it is anticipated   that planned maintenance will be undertaken by the Buyer on the Buyer’s   Plant.   (b) All planned maintenance requirements which may interrupt deliveries or   receipt of Gas must be advised to the other Party in advance upon   reasonable notice but at least 20 Business Days which notice must advise   of the anticipated period of interruption.   (c) Each Party must keep the other Party advised of progress during any   planned maintenance period.   10.2 Permitted interruptions – Seller    (a) The Seller may interrupt or curtail the delivery of Gas to the Buyer for a   Seller Permitted Interruption.    (b) In the case of a Seller Permitted Interruption for planned maintenance to   the Seller’s Facilities (as contained at paragraph (a) of the definition of   Seller Permitted Interruption) the Seller shall give not less than 20    Business Days’ notice to the Buyer of the Seller Permitted Interruption.    (c) In the case of a Seller Permitted Interruption as defined at paragraphs (b)   and (c) of the definition of that term the Seller shall give as much notice of   the Seller Permitted Interruption to the Buyer as is reasonably practicable   in the circumstances.      

 

    page 24   10.3 Permitted interruptions – Buyer    (a) The Buyer may discontinue or cease or reduce taking Gas from the Seller   for a Buyer Permitted Interruption.    (b) In the case of a Buyer Permitted Interruption for planned maintenance to   the Buyer’s Plant (as contained at paragraph (a) of the definition of Buyer   Permitted Interruption) the Buyer shall give not less than 20  Business   Days’ notice to the Seller of the Buyer Permitted Interruption.    (c) In the case of a Buyer Permitted Interruption as defined at paragraph (b) of   the definition of that term the Buyer shall give as much notice of the Buyer   Permitted Interruption to the Seller as is reasonably practicable in the   circumstances.    10.4 Reserves Shortfall   (a) The Seller will not be liable for a failure to deliver Gas to the extent that   such failure is due to a restriction on or impediment to the quantity or rate   of production of Gas from the Gas Production Area due to any natural or   geological cause, including the effective exhaustion of Reserves   (Reserves Shortfall), and subject to the Seller having:   (i) provided as much notice to PWC as is reasonably practicable of the   likelihood, extent and timing of the Reserves Shortfall; and   (ii) taken steps in accordance with Good Engineering and Operating   Practices to develop any undeveloped 1P Reserves within the Gas   Production Area, to meet its obligations to supply Gas under this   Agreement.   (b) Any Dispute in relation to the matters set out in clause 10.4(a) will be   determined by an Independent Expert as a technical matter.   10.5 Priority   On each Contract Day the Buyer has priority of gas supply from the Gas   Production Area for NDQ for that Contract Day.    10.6 Source   The Seller may at any time perform its obligation to deliver Gas under this   Agreement by delivering Gas to the Delivery Point from a source other than the   Gas Production Area, but the Seller is not obliged to do so.   11 Gas Quality   11.1 Specification   The gas to be delivered by the Seller under this Agreement must be in   accordance with the Specification at the Delivery Point.      

 

    page 25   11.2 Delivery pressure   The Seller must make Gas available for delivery to the Buyer at the Delivery   Point in accordance with this Agreement at a pressure not in excess of 6,800   kPa and at a pressure not below 6,500 kPa.    11.3 Notice of Off-Specification Gas   (a) Without derogating from the Seller’s obligation under clause 11.1 to   deliver Gas in accordance with the Specification, the Seller must notify the   Buyer as soon as practicable after the Seller becomes aware that gas   delivered or available to be delivered at the Delivery Point fails, or is   expected to fail, to meet the Specification and of the anticipated duration of   such failure, if known.    (b) The notification must include the details of the failure or expected failure to   meet the Specification.   (c) The Seller must advise the Buyer as soon as practicable of when it can   resume delivery of gas which meets the Specification.   11.4 Return to Specification   The Seller must, in accordance with Good Engineering and Operating Practices,   take all steps as are reasonably practicable and in a timely manner to ensure all   gas subsequently tendered for delivery complies with the Specification.   11.5 Undelivered Off-Specification Gas   Upon receipt of a notice under clause 11.3(a), the Buyer may:   (a) refuse to accept all or part of such Off-Specification Gas until the   non-conformity has been remedied (and to avoid doubt, gas not delivered   as a result of that refusal shall be taken into accounting in determining   Delivery Shortfalls) provided that the Buyer must use reasonable   endeavours to accept Off-Specification Gas; or   (b) consent in writing to take delivery of all or part of the Off Specification Gas,   in which case it will be deemed to be Gas and must be paid for at the   Contract Price, and the Seller shall have no liability arising out of the gas   not meeting the Specification (including liability under clause 11.7)   provided the Buyer will not be taken to have accepted gas which has been   incorrectly described by the Seller in a material way with respect to its   variance from the Specification.   The Buyer must notify the Seller of its election under this clause as soon as   practicable after receiving the Seller’s notification under clause 11.3.   11.6 Dispute to be referred to expert   Any dispute as to whether gas delivered to the Buyer complies with the   Specification will be referred to an Independent Expert for determination in   accordance with clause 23.4 but only in relation to technical matters.     

 

    page 26   11.7 Limitation of liability for Off-Specification Gas   If Off-Specification Gas is delivered to the Buyer without its written consent and   that Off-Specification Gas causes physical damage to, or interferes with the   proper operation of the Buyer’s Plant, then the Buyer may, at the Buyer’s sole   discretion, take all necessary steps to clear, clean, repair or replace that plant,   equipment or pipelines to the extent necessary to remedy the damage or   interference caused by the Off-Specification Gas. The Seller must pay or   reimburse the Buyer on demand for the reasonable direct costs and expenses   incurred in doing so.  Except to the extent that the delivery of the   Off-Specification Gas arises as a result of the Seller's Wilful Misconduct, the   Seller shall have no other liability to the Buyer for the delivery, without consent,   of Off-Specification Gas.   11.8 Odourisation   The Gas supplied under this Agreement will be odorised.    11.9 Removal of Certain Elements   Provided that Gas delivered under this Agreement remains in accordance with   the Specification, the Seller may, prior to delivery, submit natural gas from the   Gas Field to any process for the removal of constituents or elements therein   other than for the removal of methane (except where the removal of methane is   an unavoidable consequence of the removal of other constituents).  Any   constituents or elements removed from that natural gas will be and remain the   property of the Seller.   12 Title and measurement   12.1 Title and risk   The title to, custody of and risk in the Gas sold and purchased under this   Agreement will pass from the Seller to the Buyer at the Delivery Point.   12.2 Provision of Metering Equipment   (a) The Metering Equipment will be used to measure:   (i) the quantity of Gas delivered under this Agreement; and    (ii) the composition of Gas delivered under this Agreement, for the   purpose of determining whether gas supplied meets the   Specification.   (b) The Seller will provide or cause to be provided the Metering Equipment   and necessary measurement and flow control equipment upstream of the   Delivery Point for operation of this Agreement.   (c) The Seller must install, operate and maintain the Metering Equipment in   accordance with Good Engineering and Operating Practices.     

 

    page 27   12.3 Check Measuring Equipment   The Buyer may install and operate check measuring equipment as near as   practicable to the Delivery Point provided it does not interfere with the operation   of the Export Pipeline or the Metering Equipment.   12.4 Calibration   (a) The accuracy of the Metering Equipment must be tested and verified by   the Seller once each Month or at such other intervals as may be required   by the type of equipment, but at least Quarterly.   (b) Reasonable notice of the time and nature of each test must be given to the   Buyer to permit it to arrange for a representative to observe the test and   any adjustments resulting from such test.  If, after notice, the Buyer fails to   have a representative present, the results of the test will nevertheless be   considered accurate.   12.5 Correction   If at any time, any of the Metering Equipment is found to be out of service or   registering inaccurately, it must be adjusted at once to read as accurately as   possible and the readings of that equipment must be adjusted to zero error for a   period definitely known or agreed upon, or if not known or agreed upon, for a   period of sixteen (16) days or one-half (1⁄2) of the elapsed time since the last test,   whichever is shorter. Measurement during the appropriate period shall be   determined on the basis of the best data available using the first of the following   methods which is feasible or such other method as the Buyer and Seller may   agree:   (a) by using data recorded by any check measuring equipment if installed and   accurately registering; or   (b) by making the appropriate correction if the deviation from the accurate   reading is ascertainable by calibration test or mathematical calculation; or   (c) by estimating based upon receipts or deliveries under similar conditions   during a period when the equipment was registering accurately.   12.6 Inspection of Equipment and Records   (a) The Buyer will have the right at all times to have access to and to inspect   the Metering Equipment but will be subject to all reasonable requirements   of the Seller with regard to the security of the equipment.   (b) The reading, calibration and adjustment of that equipment must be done   by the Seller and a representative of the Buyer will be entitled to be   present at that time.   12.7 Seller's Agent    For the purpose of this clause 12 the Seller may appoint any person as its agent   to perform or act in its stead.     

 

    page 28   12.8 Method of Measurement   All measurements, calculations and procedures used in determining volume,   except for the correction for deviation from Boyle's Law, must be made in   accordance with the instructions Measurement of Delivered Gas contained in the   Gas Measurement Committee Report Number 3 of the American Gas   Association, dated April 1955, together with all presently existing supplements,   amendments and appendices to that Report.  Those instructions will be   converted where necessary for compliance with Australia Standard   AS1000-1979 “The International System of Units (SI) and Its Application”, the   National Measurement Act 1960 and Regulations under that Act and the   Australian Gas Association publication “Metric Units and Conversion Factors for   Use in the Australian Gas Industry”.  The correction for deviation from Boyle's   Law shall be determined from the data contained in “PAR Research Project   NX-19” as published by the American Gas Association in 1962, or any revision of   it acceptable to the Buyer and the Seller jointly.   12.9 Unit of Measurement   The unit of volume for purposes of measurement under this Agreement will be   one cubic metre (m3) of Gas and be expressed to the nearest m3 or another unit   of volume agreed to by the Buyer and the Seller jointly.   12.10 Atmospheric Pressure   For the purposes of measurement, atmospheric pressure will be determined by   a recognised formula applied to the nearest one hundredth of a kilopascal   absolute (.01 kPa) and deemed to be a constant.   12.11 Flowing Temperature   The flowing temperature of Gas will be determined by means of an approved   recording thermometer of standard make. The arithmetic mean of all readings   each Day will be deemed to be the Gas temperature and will be used in   computing volume.   12.12 Determination of Gas Characteristics   The gas characteristics including, Gross Heating Value, relative density,   nitrogen and carbon dioxide content of gas will be determined by continuous   recording equipment or by laboratory equipment.  If continuous recording   equipment is used the arithmetic mean of all recordings for each Day will be   used to determine gas characteristics.  If spot samples are taken or a spot   sampler is used, gas characteristics will be determined from the analysis of the   samples using laboratory equipment and recognised analytical methods.   12.13 Exchange of Metering Information   (a) The Seller must send to the Buyer copies of all measuring and testing data   and measuring information promptly after receiving them.   (b) Without limiting paragraph (a), the Seller must make available to the Buyer   on a daily basis the information recorded by the Metering Equipment in     

 

    page 29   relation to the quality and composition of Gas delivered at the Delivery   Point for the previous Day.   (c) The Buyer will cause to be sent to the Seller promptly upon request,   copies of the information kept or obtained by it with respect to   measurement of the Gas at the Delivery Point where that information is not   derived from the Metering Equipment.   12.14 Preservation of Measurement Records   The Parties must preserve all measurement test data, measurement charts and   other similar records for the greater of a period of seven (7) years or the   minimum period required by record retention rules of any Government Body   having jurisdiction or the currency of this Agreement.   13 Price   13.1 Contract Price   The Buyer must pay to the Seller the Contract Price for all Gas delivered by the   Seller under this Agreement.   13.2 Variation of Contract Price   The Contract Price will be varied Quarterly on the first day of January, April, July   and October in each year commencing on 1 April 2013 in accordance with   Schedule 2.   14 Carbon    14.1 General    The Parties acknowledge that under the Clean Energy Scheme the Seller incurs:   (a) Embodied Emissions Charges in respect to its liability under section 33 of   the Clean Energy Act 2011 (Cth) for the potential greenhouse gas   emissions (measured in the Relevant Substance) embodied in an amount   of Gas supplied at the Delivery Point under this Agreement (which is   addressed in this clause 14); and   (b) Carbon Costs in respect to its production, recovery, processing,   transportation, handling or supply of Gas under this Agreement up to the   Delivery Point (which are addressed in clauses 15 and 16).   14.2 Definitions   In this clause 14 the following words have the following meanings.   Acceptable Shortfall Charge means the proportion of:   (a) any unit shortfall charge (as defined under the Clean Energy Scheme) that   is imposed on the Seller or a Related Corporation under the Clean Energy   Scheme; or     

 

    page 30   (b) a charge under a New Emissions Scheme that is equivalent to the charge   in (a) and imposed because the Seller or its Related Corporations did not   surrender the required number of relevant units in respect of an amount of   Gas delivered at the Delivery Point under this Agreement by the due date   under the New Emissions Scheme;    and that was incurred because the cost of acquiring Eligible Emissions Units or   equivalent units under a New Emissions Scheme  would have been greater than   incurring the charge.   OTN means an Obligation Transfer Number within the meaning of that term in   the Clean Energy Act 2011 (Cth).   Preliminary Embodied Emissions means the number of tonnes of potential   greenhouse gas emissions (measured in the Relevant Substance) embodied in   an amount of Gas supplied at the Delivery Point under this Agreement in a   Contract Month calculated in accordance with the requirements of the Clean   Energy Scheme (or a New Emissions Scheme) based on the latest   measurement available to the Seller of the relevant amount of Gas supplied at   the Delivery Point under this Agreement.    Unit Price means:   (a) in relation to an Eligible Emissions Unit:   (i) during the fixed price period (as defined in the Clean Energy   Scheme) the price at which Eligible Emissions Units can be   purchased from the Clean Energy Regulator (as defined under the   Clean Energy Scheme); or   (ii) during the flexible price period (as defined in the Clean Energy   Scheme), the carbon reference price (in Australian dollars/tonne of   Relevant Substance) for a Contract Month, determined in   accordance with the methodology for determination of the Carbon   Reference Price (CRP) referred to in clause 3 of the August 2010   Australian Carbon Benchmark Addendum published by the   Australian Financial Markets Association (Carbon Addendum) and   references in the Carbon Addendum to:   (A) a "Calculation Period" or "Billing Period" are taken to be   references to the Contract Month in which the Unit Price is   being determined,    (B) the "parties" are to the Parties to this Agreement; and   (C) "Carbon Scheme" are taken to refer to the Applicable Carbon   Scheme.   (b) In relation to a unit that is eligible for use, surrender, acquittal or   relinquishment pursuant to a New Emissions Scheme:   (i)  for the relevant Contract Month the arithmetic average of the   market price (published at or after the close of business for a   Business Day) for the purchase of those units for each Business     

 

    page 31   Day occurring during that Contract Month, where agreed by the   Parties; or    (ii) failing agreement between the Parties under paragraph (b)(i) within   5 Business Days of the end of that Contract Month,  the price   determined as a financial matter by an Independent Expert pursuant   to clause 23.4.    14.3 Embodied Emissions Charges   (a) If the Seller or its Related Corporation has incurred  Embodied Emissions   Charges during a Contract Month or any prior Contract Month, the Seller   may include in statements to the Buyer in accordance with clause 18.2  or   clause 18.3 the amount of the Embodied Emissions Charges that it has   incurred with respect to the Gas delivered to the Delivery Point in the   relevant Contract Month or prior Contract Month including in aggregate   over a number of Contract Months (provided that it has not previously   included the relevant Embodied Emissions Charges in a prior statement to   the Buyer in accordance with clause 18.2).     (b) The amount of the Embodied Emissions Charges for the relevant Contract   Month or relevant prior Contract Months will be calculated by multiplying   the Unit Price for the relevant Contract Month by the Preliminary   Embodied Emissions for the relevant Contract Month and adding any   Acceptable Shortfall Charges incurred by the Seller or its Related   Corporations. The Buyer must pay the Seller the amount claimed on   account of such Embodied Emissions Charges.   (c) If the Buyer validly quotes an OTN (or equivalent notification or consent for   the transfer of liability in respect to the Preliminary Emissions Number   under a New Emissions Scheme) to the Seller in relation to the supply of   any particular delivery of Gas under this Agreement, the Buyer will not be   required to pay the Seller any amount on account of Embodied Emissions   Charges with respect to that delivery of Gas to the extent that the   consequence of the quotation of the OTN (or equivalent notification) is that   responsibility for liability under the Clean Energy Scheme or New   Emissions Scheme for the potential greenhouse gas emissions embodied   in that Gas is effectively transferred to the Buyer.   14.4 Exclusive Application   (a) No claim or adjustment for Embodied Emissions Charges may be made as   between the Parties other than in accordance with clause 14.3 .Nothing in   this clause limits the operation or effect of clause14.5.    (b) To the extent of any conflict between this clause 14 and any other   provision of this Agreement that may allow for pass through of Embodied   Emissions Charges, this clause 14 prevails.    14.5 Quotation of OTN   (a) If the Buyer is permitted or required to obtain an OTN under the Clean   Energy Scheme in relation to Gas to be delivered to the Buyer at the     

 

    page 32   Delivery Point under this Agreement, the Buyer must apply for an OTN in   accordance with the Clean Energy Scheme.   (b) If the Buyer is granted an OTN pursuant to the Buyer's application in   accordance with clause 14.5(a) then:   (i) if permitted or required to do so by the Clean Energy Scheme, the   Buyer must quote that OTN in accordance with the Clean Energy   Scheme to the Seller in respect of Gas delivered or to be delivered   by the Seller under this Agreement;   (ii) the Seller will accept the quotation of the Buyer's OTN in   accordance with the Clean Energy Scheme; and   (iii) the Buyer must not surrender or otherwise cease to hold that OTN   without the Seller’s prior written consent, unless required by law.  In   the case of surrender, expiry, or revocation pursuant to a   requirement of law, the Buyer must promptly notify the Seller of that   requirement.   (c) The Seller and the Buyer acknowledge and agree that, by each signing   this Agreement, the Buyer will be deemed to have provided written notice   to the Seller of the Buyer's intention to quote to the Seller an OTN held by   the Buyer in relation to natural gas to be delivered to the Buyer at the   Delivery Point under this Agreement.   14.6 Survival   This clause 14 survives the expiry or termination of this Agreement.   15 Change in Law   15.1 Change Events   If an Increased Costs Event occurs at any time after the date of execution of this   Agreement then a Financial Adjustment shall be made in accordance with this   clause 15 based on the Net Financial Effect of the Increased Costs Event.    15.2 Notification of Increased Costs Event   The Seller shall notify the Buyer promptly when the occurrence of an Increased   Costs Event becomes known to the Seller (Increased Costs Event Notice).   15.3 Increased Costs   An Increased Costs Event Notice shall:   (a) specify the Increased Costs Event and the date when the Increased Costs   Event is expected to first affect net costs of supplying Gas to the Buyer,   undertaking any of the Seller's obligations or exercising any of its rights   under this Agreement;   (b) establish the connection between the Increased Costs Event and its effect   on the Seller's costs;     

 

    page 33   (c) include details of the nature of the Net Financial Effect of the Increased   Costs Event, and the estimated period over which the Increased Costs   Event will have a financial effect;   (d) propose an adjustment to charges under this Agreement for the Net   Financial Effect required to put the Seller into the position it would have   been in had it not been for the Increased Costs Event as determined in   accordance with this clause 15 (Proposed Financial Adjustment); and   (e) attach relevant data and documentation to support the Seller's calculation   of the Net Financial Effect and Proposed Financial Adjustment.   15.4 Parties to meet and talk   (a) Within 30 Business Days of the delivery of an Increased Costs Event   Notice pursuant to clause 15.3 the Parties shall:   (i) appoint nominees to meet and determine the Net Financial Effect of   the Increased Costs Event;   (ii) convene a meeting of the nominees; and   (iii) ensure the nominees meet and negotiate to determine an   adjustment to the Contract Price to compensate the Seller for the   Net Financial Effect of the Increased Costs Event.   (b) If the nominees appointed by the Parties pursuant to clause 15.4(a) do   not reach agreement on the amount and method of payment of the   Financial Adjustment, within 40 Business Days of the delivery of an   Increased Costs Event Notice pursuant to clause 15.3, either Party may   refer the matter for resolution by an Independent Expert pursuant to   clause 23.4 as a financial matter.   15.5 Pass on of Financial Adjustment   Upon the determination of the amount and manner of payment of the Financial   Adjustment in accordance with clause 15.4 the Buyer must pay to the Seller the   Financial Adjustment in accordance with that determination on and from the date   so determined.    16 Imposts    16.1 Seller liability   Except to the extent provided in clauses 14 and 15, the Seller will bear all   Imposts and Carbon Costs attributable to the Gas delivered up to the Delivery   Point.    16.2 Buyer liability   The Buyer will bear all Imposts attributable to the Gas on and from the Delivery   Point.     

 

    page 34   17 Goods and Services Tax   17.1 GST   (a) For the purpose of this clause 17 the following words have the following   meanings:   Recipient means a recipient of a Supply.   Supplier means the maker of a Supply.   Terms not defined in this clause have the meaning given to them in the   GST Law.   (b) Notwithstanding any other clause in this Agreement, but subject to the   operations of (d) below, if GST is payable on a Supply made under, or in   connection with, this Agreement, then the Supplier must determine and   the Recipient must pay to the Supplier the amount of the GST in addition   to any amount or consideration expressed as payable elsewhere in this   Agreement.   (c) Payment of the GST shall be made at the same time as payment for the   relevant Supply is required to be made.   (d) If a party is required under this Agreement to reimburse or pay to another   party an amount calculated by reference to a cost, expense, or an amount   paid or incurred by that party, the amount of the reimbursement or   payment will be reduced by the amount of any input tax credits to which   that party (or an entity on whose behalf the party is acting) is entitled in   respect of any acquisition relating to that cost, expense or other amount.   (e) If the amount of GST paid or payable by the Supplier on any Supply made   under this Agreement differs from the amount of GST paid by the   Recipient by reason of the Australian Commissioner of Taxation lawfully   adjusting the value of the Supply for the purpose of calculating GST, then   the amount of GST paid by the Recipient shall be adjusted accordingly, by   a further payment by the Recipient to the Supplier or by the Supplier to the   Recipient as the case requires.   (f) The Recipient shall not be required to pay an amount of GST to the   Supplier in accordance with (b) above where the Recipient has, in respect   of that Supply already paid to the Supplier, an amount of GST thereon.   17.2 Invoices and statements   Any invoice or statement which purports to charge GST on a Supply under this   Agreement must comply with the requirements of a Tax Invoice and record   keeping of recipients of taxable supplies for the purpose of claiming Input Tax   Credits. A Party is not required to make payments under an invoice or statement   if the invoice or statement does not comply with the requirements of this   clause 17.2.     

 

    page 35   18 Billing and payment   18.1 Unit of billing   The unit of billing is one GJ.   18.2 Monthly statements   On or before the tenth Business Day of each Month the Seller must send the   Buyer a monthly statement and Tax Invoice (which may be combined in one   document) showing in respect of the previous Month the following information:   (a)  the Contract Price applied to the total quantity of Gas made available to   the Buyer at the Delivery Point over the previous Month in accordance with   the Buyer Nominations under Clause 9 for each Day;    (b) the quantity of Accumulated Make-up Gas and Make-up Gas delivered, if   any, and the additional amount payable for any Make-up Gas delivered by   comparison to the Contract Price originally paid for that quantity; and   (c) any Embodied Emissions Charges (including detailed calculations of the   same) that it has incurred with respect to the Gas delivered to the Delivery   Point in the relevant Contract Month or a prior Contract Month (provided   that it has not previously included the relevant Embodied Emissions   Charges in a prior statement to the Buyer in accordance with this clause   18.2)   The Seller must include with the statement reasonable detail of the calculation of   the amount payable by the Buyer.   18.3 Annual reconciliation   On or before 30 days after the end of each Contract Year the Seller must send   the Buyer an annual reconciliation statement and Tax Invoice (which may be   combined in one document) showing in respect of the previous Contract Year   the following information:   (a) the ACQ for that Contract Year showing any relevant adjustments or   calculations under clause 7.2 or clause 7.8;   (b) the Contract Price for each Quarter of that Contract Year ;   (c) the aggregate quantity of Gas delivered over that Contract Year   (Aggregate Delivered Quantity or ADQ);   (d) the aggregate quantity of Gas delivered since the Commencement Date;   (e) the aggregate of all Reduction quantities for that Contract Year;   (f) the quantity of Accumulated Make-up Gas delivered over the Contract   Year;   (g) a schedule of the Buyer’s outstanding entitlements to Accumulated   Make-up Gas, if any, including Make-up Gas accrued during the Contract   Year;    (h) the aggregate amount paid to date by the Buyer to the Seller against the   monthly statements previously rendered for the Contract Year;      

 

    page 36   (i) the amount, if any, owing by the Buyer to the Seller in respect of the   Contract Year. Where the Aggregate Delivered Quantity is less than the   ATPQ (as reduced under clause 7.5) for the Contract Year then the Buyer   must pay to the Seller an amount equal to the Contract Price applying as   at the last Quarter for the relevant Contract Year multiplied by the quantity   of Gas in GJ which is equal to the difference between ADQ and the ATPQ   (as reduced under clause 7.5) for the Contract Year;   (j) the aggregate Embodied Emissions Charges that it has incurred with   respect to the Gas delivered to the Delivery Point in the relevant Contract   Year, including detailed calculations of the Embodied Emissions Charges;    (k) the aggregate Embodied Emissions Charges invoiced over the Contract   Year; and   (l) the Basic Obligation Quantity Reduction Amount under clause 7.9 for that   Contract Year, if any, the revised  Basic Obligation Quantity as at the end   of the Contract Year and the aggregate quantity of Gas delivered against   that revised Basic Obligation Quantity over that Contract Year and all   preceding Contract Years.   18.4 Time for payment   Within 10 Business Days after receipt of each monthly statement and tax invoice   and the annual reconciliation statement, the Buyer must pay to the Seller the   amounts due as shown by the statements.    18.5 Interest   If the Buyer fails to pay moneys due to the Seller by the due date, the Buyer must   pay interest on the unpaid moneys at the Default Rate applicable on the due   date and calculated on a daily basis from the date when such payment is due   until the date payment is made.   18.6 Disputed statements   (a) In the event of any bona fide dispute in respect of any invoice or   statement, the Buyer must notify the Seller as to the sum in dispute,   provide details of the reasons for the dispute and pay the full amount of the   relevant invoice or statement including the amount in dispute by the due   date.   (b) Moneys in dispute and subsequently found to be not payable by the Buyer   must be paid to the Buyer within 14 days after resolution of the dispute,   together with interest on that amount calculated on a daily basis from the   original due date for payment at the Default Rate applicable on the original   due date and compounded on a monthly basis.   18.7 Audit   The Buyer may examine, by an independent auditor approved by the Seller   (such approval not to be unreasonably withheld), the books and records of the   Seller relevant to this Agreement to the extent necessary to verify the accuracy     

 

    page 37   of any statement, invoice, charge or computation, provided that books and   records need not be preserved longer than the greater of:   (a) 3 years; or   (b) the minimum period required by record retention rules of any Government   Body having jurisdiction.   18.8 Error in statements   If an error is discovered in the amount shown due in any statement rendered by   or on behalf of the Seller (including statements paid by the Buyer and later found   to contain an error) and a written claim in respect of that error is made by the   Buyer or the Seller an adjustment must be made between the Buyer and the   Seller to compensate for that error. Interest at the Default Rate must be paid on   the amount paid to compensate for the error calculated from the date on which   the erroneous invoice was paid by the Buyer. The adjustment must be paid   within 14 days of the date on which the sum of the error is determined between   the parties.   19 Force majeure   19.1 Definition   The term "Event of Force Majeure" means any event or circumstance, or a   combination of events and circumstances, which is beyond the reasonable   control of the Affected Party acting as a Reasonable and Prudent Operator and   exercising Good Engineering and Operating Practices and which the Affected   Party is reasonably unable to prevent or overcome, which occurs after the date   of this Agreement and subject to satisfying the above conditions includes:   (a) acts of God including but not limited to landslides, earthquakes, floods,   washouts, lightning, storms and the elements;   (b) claims made under or the operation of the Native Title Act 1993 of the   Commonwealth of Australia which cause delays beyond the Affected   Party’s reasonable control;   (c) acts of the enemy, acts of terrorists, wars (declared or undeclared),   blockades or insurrections, riots and civil disturbances, arrest and restraint   of rulers and peoples, revolution;   (d) actual or reasonably perceived security threats to a Party’s property or   operations;   (e) radioactive contaminants or toxic or dangerous chemical contamination;   (f) fire or explosion;   (g) epidemic or quarantine;   (h) breakage or accident to plant, machinery or pipelines of the Buyer or   Seller or any interruptions, curtailments or restrictions in respect of the   Gas being able to be received at or transported to the Delivery Point;     

 

    page 38   (i) action or inaction by, or the order, judgment, ruling, decision, enforcement   action, act or omission of any Government Body having jurisdiction   (including denial, refusal or failure to grant any permit, Authorisation,   licence, approval or acknowledgment despite timely reasonable   endeavours to obtain same) or compliance with Australian laws;   (j) strikes, lockouts, industrial and/or labour disputes and/or difficulties, work   bans, blockades or picketing;   (k) an Event of Force Majeure affecting the owner or operator of any of the   Upstream Facilities which excuses that person from liability for failing to   process or transport Gas under the relevant agreement (Upstream   Agreement) and which results in a total or partial inability of the Seller to   make quantities of Gas available, or have quantities of Gas which are   made available for supply, transmitted to the Delivery Point or which   results in a total or partial inability of the Buyer to take Gas at the Delivery   Point, provided that the corresponding definition in the Upstream   Agreement of Event of Force Majeure is not materially broader than the   definition in this Agreement;   but does not include any such event or circumstance affecting a customer of or   buyer of product from the Buyer.    Events of Force Majeure do not include:   (l) economic hardship to a Party in discharging its obligations under this   Agreement, including where the Buyer could buy Gas from third parties at   prices lower than the Contract Price or where the Seller could sell Gas to   third parties at prices higher than the Contract Price; and   (m) any loss or reduction in markets for the Buyer; and   (n) any inability by the Buyer to use or resell the Gas supplied under this   Agreement.   19.2 Performance suspended by Event of Force Majeure   (a) Performance by the Seller or the Buyer of any obligation or condition to be   performed under this Agreement:   (i) will be suspended during the time and to the extent that such   performance is prevented, wholly or in part, by an Event of Force   Majeure; and   (ii) no liability will accrue to the Affected Party for loss or damage of any   kind arising out of or in any way connected with that   non-performance.   (b) Suspension of any obligations pursuant to this clause 19.2 will not relieve   a Party of its obligation to pay amounts owing to the other Party, including   amounts owing for Gas delivered to the Buyer, the ATPQ as adjusted by   clause 7.5, or damages owing in accordance with this Agreement, nor will   it affect any obligations which may have accrued prior to such suspension   or, if such circumstance affects only some obligations, any other   obligations of the Affected Party.     

 

    page 39   (c) The period of suspension of any obligations under this clause 19.2 will   exclude any delay in the performance by the Affected Party of those   obligations which is attributable to a failure by the Affected Party to comply   with clause 19.3.   (d) The period of suspension of any obligation or condition under this   clause 19.2  (other than for the supply of Gas) will be added to the time for   the performance of that obligation or condition under this Agreement and   the time required for the performance of any act dependent on the   performance of that obligation or condition provided that in no   circumstances shall the Supply Period be extended beyond the Expiry   Date.   19.3 Mitigation   The Affected Party must use all commercially reasonable endeavours to avoid,   remove or mitigate the effect of the circumstance constituting the Event of Force   Majeure and to mitigate the effect of that Event of Force Majeure. The other   Party must co-operate and provide such assistance as the Affected Party may   reasonably request provided that the settlement of strikes and other events in   clause 19.1(j) will be entirely within the discretion of the Affected Party.   19.4 Notification and diligence    If the Affected Party is, by reason of an Event of Force Majeure, unable to   perform any obligation or condition to be performed under this Agreement, it   must:   (a) notify the other Party as soon as reasonably practicable but certainly   within 48 hours giving:   (i) reasonably full particulars of the event or circumstance;   (ii) the date of commencement of the event or circumstance and an   estimate of the period of time required to enable it to resume full   performance of its obligations; and   (iii) where possible, the means proposed to be adopted to remedy,   mitigate or abate the Event of Force Majeure;   (b) if the Event of Force Majeure continues beyond one week of the   notification in (a) above, the Affected Party shall, on the fortnightly   anniversary of the date of notification in (a) above, provide additional   notice to the other Party, in the same form as (a) above;   (c) resume performance as expeditiously as possible after termination of the   Event of Force Majeure or after the Event of Force Majeure has abated to   an extent which permits resumption of performance;   (d) notify the other Party when the Event of Force Majeure has terminated or   abated to an extent which permits resumption of performance to occur;   and   (e) notify the other Party when resumption of performance has occurred.     

 

    page 40   19.5 Consultation   Following receipt of the notice in clause 19.4, the Parties must consult in good   faith to assess the Event of Force Majeure and any ways in which it might be   avoided or its effects mitigated, having regard to each Party’s rights and   obligations under any relevant agreement to which it is a party.   19.6 End of Event of Force Majeure   (a) The period of an Event of Force Majeure will end at the earlier of the time   when the Affected Party:   (i) is able to recommence performance of all of its obligations pursuant   to this Agreement; or   (ii) recommences the performance of all of its obligations pursuant to   this Agreement.   (b) The other Party must use reasonable endeavours to comply with the   recommencement of the performance of the Affected Party.   19.7 Termination for prolonged Event of Force Majeure   If, by reason of an Event or Events of Force Majeure, the Seller or the Buyer is   unable to perform any material covenant or obligation under this Agreement and   that non-performance continues for a period of 12 consecutive months then the   Parties must negotiate in good faith to agree what steps may be taken to carry   out the intention of this Agreement. If after 30 days the Parties have not been   able to agree then either Party may give 60 days’ notice of termination to the   other Party and this Agreement shall terminate at the expiration of that period if   the Event of Force Majeure still subsists at that time.    20 Failure to supply   20.1 Failure to Supply   The Seller will not be liable to the Buyer for any failure, in whole or in part, to   supply NDQ on any Day except in either of the following situations:   (a) where on any Day less than 90% of the NDQ is delivered; or   (b) where on any Day at least 90% but not all of the NDQ is delivered ( First   Day) and  the Seller has failed to supply over a period of 3 consecutive   Days commencing on the First Day , the aggregate NDQ for those 3 Days.   In this case, the Seller will be liable only in respect of the difference   between the aggregate NDQs for the 3 consecutive Days and the   aggregate amount of Gas or an equivalent quantity of alternative energy   acceptable to the Buyer, delivered to the Buyer over those 3 consecutive   Days.    Each such failure is referred to as a Delivery Shortfall and the quantity of the   difference between the quantity of Gas delivered and the NDQ or aggregate   NDQs ,as applicable, is the Default Quantity.     

 

    page 41   Where there is a Delivery Shortfall for any reason other than:   (a) Event of Force Majeure; or   (b) Permitted Interruptions; or   (c) Reserves Shortfall; or   (d) the Buyer’s default;   and the Buyer as a consequence of the Seller's failure to supply the Default   Quantity has actually incurred cost in respect of the acquisition of substitute   energy equal to the Default Quantity then, subject to clause 20.2, the Seller   must pay to the Buyer by way of liquidated damages an amount equal to the   lesser of:   (e) the amount of the cost actually incurred by the Buyer as referred to in this   clause 20.1 less the Contract Price for a quantity of Gas equal to the   Default Quantity; and   (f)  the Contract Price for a quantity of Gas equal to the Default Quantity.   Those payments will be made by the Seller within thirty (30) days of receipt from   the Buyer of an invoice for the relevant amount together with any documentation   which the Seller may reasonably require to enable the Seller to verify the   accuracy of the invoice.   Where the amount calculated under subclause (i) is negative then the Seller has   no liability for the Delivery Shortfall.   The Buyer must use its reasonable endeavours to obtain a quantity of gas or   substitute energy equivalent to the aggregate Default Quantity from another   source at the best available price for a buyer and otherwise do all things   reasonably within its power to mitigate and reduce the costs of obtaining   substitute gas or energy for the Default Quantity.    20.2 Exclusive Remedy    (a) Except to the extent that the Delivery Shortfall arises from the Seller's   Wilful Misconduct, the amount which the Seller must pay under clause   20.1 is capped at $500,000 per Contract Year, escalated as for the   Contract Price, in accordance with Schedule 2.   (b) The remedy provided in clause 20.1 is:   (i) in full satisfaction and discharge of the Buyer's rights and remedies   in respect of the Delivery Shortfall howsoever caused; and   (ii) exhaustive of any rights or remedies otherwise available to the   Buyer under this Agreement, at common law, under statute or   otherwise in respect of that Delivery Shortfall.    20.3 Audit   At the request of the Seller the Buyer will permit a registered company auditor   nominated by the Seller to have access to those books and records of the Buyer     

 

    page 42   as may be necessary to check and verify any claims by the Buyer under this   clause.   21 Default by Seller   21.1 Events of Default and Termination   If any one or more of the following events occurs, namely:   (a) the Seller fails to deliver any Gas against NDQ for a period of thirty (30)    consecutive Days  and that failure is not due to Permitted Interruptions,   Event of Force Majeure, Reserves Shortfall or the default of the Buyer;   (b) the Seller makes default in the due payment of any moneys payable to the   Buyer and that default remains unremedied for a period exceeding thirty   (30) Business Days after notice specifying the default is given to the   Seller;  or   (c) the Seller commits a Material Default (not being a Default of the kind   referred to in paragraphs (a) or (b) of this clause) and the Seller fails to   remedy that default within a reasonable time after notice specifying the   default is given to the Seller,   then and in any such event the Buyer may by notice in writing to the Seller   terminate this Agreement.   21.2 Liability for failure to deliver   Without limiting the Buyer’s right to terminate this Agreement under clause   21.1(a), the Seller’s sole liability for any failure to deliver or supply Gas under this   Agreement is limited to what is provided in clause 20.   21.3 Effect of Termination   Termination of this Agreement will not affect any rights or obligations which may   have accrued prior to termination, including any in respect of any prior breach   and does not affect the continued application of any liability cap, including under   clauses 20.1 and 20.2.   22 Default by Buyer   22.1 Default   If any one or more of the following events occurs namely:   (a) the Buyer defaults in the payment of any moneys payable under this   Agreement and such default remains unremedied for a period exceeding   thirty (30) Business Days after notice specifying the default is given to the   Buyer;  or   (b) the Buyer commits a Material Default (not being a Default of the kind   referred to in paragraph (a) of this clause) and the Buyer fails to remedy     

 

    page 43   that default within a reasonable time after notice specifying the default is   given to the Buyer;   then the Seller may by notice in writing to the Buyer:   (c) suspend deliveries of Gas until the default is remedied and the Seller shall   not be liable for any Delivery Shortfall but the Buyer will remain liable to   pay the amount due in respect of the  DCQ for each Day that deliveries are   suspended and those payments will result in an entitlement to Make-up   Gas;  or   (d) terminate this Agreement; or   (e) after a period of suspension pursuant to paragraph (c) above, terminate   this Agreement.   22.2 Effect of Termination   Termination of this Agreement will not affect any rights or obligations which may   have accrued prior to termination, including any in respect of any prior breach.   23 Disputes and Independent Expert   23.1 Separate Agreement   This clause 23 sets out a separate and severable agreement to the Agreement.    Accordingly, if the Agreement is void or voidable for any reason, the dispute   resolution procedure in this clause 23 will be unaffected and will survive any   determination that the Agreement is void or has been avoided.   23.2 Method   If any claim, dispute or question arises between the Seller and the Buyer   concerning:   (a) any clause or anything contained in this Agreement;    (b) the breach, termination, or claimed invalidity of the Agreement;   (c) either Party's conduct prior to entering into the Agreement;   (d) the meaning or construction of any matter or thing in any way connected   with this Agreement; or   (e) the rights, duties or liabilities of either the Seller or the Buyer in, under or in   connection with this Agreement,   (“Dispute”), then unless otherwise expressly provided to the contrary in this   Agreement that Dispute shall be resolved in accordance with this clause 23 and   any Party may give to the other Party or Parties to the Dispute a notice in writing   (a “Dispute Notice”) specifying the Dispute and requiring that it be dealt with in   the manner set out in this clause 23.   23.3 Senior Officer Resolution   (a) Within seven (7) days of a Party receiving a Dispute Notice that Dispute   must (before any other steps are taken in respect of that Dispute) be     

 

    page 44   referred to the officer nominated by the Buyer as the representative of the   Buyer and the person nominated by the Seller as the representative of  the   Seller for the purposes of this clause 23.3 for resolution.    (b) Each representative must be a Senior Officer of the nominating Party.    (c) Failing resolution within fourteen (14) days (or such longer period as the   Senior Officers may agree in writing), either Party may refer the Dispute   for determination by:   (i) an Independent Expert in accordance with clause 23.4, in the case   of a financial matter or a technical matter, or where under the   Agreement a matter is to be referred to an Independent Expert for   resolution or where the Parties agree; or   (ii) in any other case, arbitration in accordance with clause 23.8.   23.4 Expert   (a) Where any Dispute is referred to an expert pursuant to clause 23.3 or is   otherwise referred to an expert in accordance with the terms of this   Agreement, an expert will be appointed by the Parties, or in default of that   appointment within thirty (30) days of the need to refer the matter to an   expert or of the agreement of the Parties to do so, in the case of financial   matters, by the President for the time being of the Institute of Chartered   Accountants, and, in the case of technical matters, the Chairman for the   time being of Australian Petroleum Production & Exploration Association   Limited. The Parties agree to accept and comply with any terms and   conditions of the appointing party and appointee to the making of the   appointment of the Independent Expert and where the appointing party will   only provide a list of possible appointees the Independent Expert will be   the first person on that list who agrees to act and otherwise has the   qualities under clause 23.4(b).  For the purpose of this clause 23:   (i) “technical matter” means a matter involving issues relating to the   exploration for, production, treatment, metering or measurement of   petroleum which is capable of determination by reference to   engineering or scientific knowledge and practice;   (ii) “financial matter” means a matter involving financial calculations   which is capable of determination by audit or reference to   accounting practices; and   (iii) in the case of a matter involving both technical and financial issues,   unless the Parties otherwise agree, it will be regarded as a technical   matter.   (b) In any event, the expert must:   (i) have reasonable qualifications and practical experience in the area   of the Dispute;     

 

    page 45   (ii) have no interest or duty which conflicts or may conflict with his   function as expert, he being required to fully disclose any relevant   interest or duty before his appointment; and   (iii) not be an employee of any Seller or the Buyer or of a Related   Corporation of any of them.   (c) The expert appointed pursuant to this clause (“Independent Expert”)   must:   (i) promptly fix a reasonable time and place for receiving submissions   or information from the Parties or from any persons as he may think   fit;   (ii) accept oral or written submissions from the Parties as to the subject   matter of the Dispute within twenty-one (21) days of his   appointment;   (iii) not be bound by the rules of evidence;   (iv) prior to making a binding determination, publish a draft   determination to the Parties within twenty-eight (28) days of his   appointment and then the Parties may within thirty-five (35) days of   his appointment make written submissions on that draft   determination to the Independent Expert and the Independent   Expert may amend his draft determination prior to making his final   determination; and   (v) state his final determination in writing within forty-two (42) days of   his appointment.   (d) The Independent Expert will be required to undertake to keep confidential   all matters coming to his knowledge by reason of his appointment and the   performance of his duties.   (e) The Independent Expert will have the following powers:   (i) to inform himself independently as to facts and if necessary   technical and/or financial matters to which the Dispute relates;   (ii) to receive written submissions, sworn and unsworn written   statements and photocopy documents and to act upon them;   (iii) to consult with such other professional qualified persons as he in his   absolute discretion thinks fit; and   (iv) to take such measures as he thinks fit to expedite the completion of   the resolution of the Dispute.   (f) Any person nominated as an Independent Expert pursuant to this clause   23 will be deemed to act as an expert and not an arbitrator and the law   relating to arbitration will not apply to him or his determination or the   procedures by which he may reach his determination.   (g) Resolution of the Dispute by the Independent Expert will be held at Darwin   in the Territory unless the Parties otherwise agree.     

 

    page 46   23.5 Decision of Independent Expert   The decision of the Independent Expert will be valid and binding upon the Parties   unless:   (a) the value of the determination, as assessed by the Independent Expert in   his or her determination, or, failing an assessment by the Independent   Expert, a reasonable assessment of the value, is greater than $500,000;   and   (b) either Party gives a notice to the other Party within 21 calendar days after   the determination has been issued requiring the Dispute to be referred to   arbitration.   23.6 Costs   The costs of the Independent Expert and any advisers to the Independent Expert   will be paid by the Seller and the Buyer in such proportion as they may agree.  If   the Seller and the Buyer fail to reach agreement then the Independent Expert   must determine the proportion of costs to be paid by the Seller and the Buyer   within fourteen (14) days of his determination on the Dispute.  In determining   how those costs are to be borne, the Independent Expert must have regard to his   decision and to the extent to which the Independent Expert considers the Seller   and the Buyer respectively were at fault or unreasonable in failing to agree in   respect of the Dispute.   23.7 Information and Representation   The Parties will give the Independent Expert all information and assistance that   the Independent Expert may reasonably require.  The Parties will be entitled to   be legally represented in respect of any representations that they may wish to   make to the Independent Expert, whether orally or in writing.   23.8 Arbitration   If:   (a) a notice to refer the Dispute to arbitration is given in accordance with and   within the time prescribed by clause 23.5(b);   (b) a Dispute is, pursuant to this Agreement or this clause 23, to be referred   to arbitration; or   (c) the Parties otherwise agree to refer a Dispute to arbitration,   the arbitration will be conducted in accordance with the procedure below.   23.9 Arbitration Procedure   (a) The arbitration, including the appointment of the arbitrator, will be   conducted in accordance with the arbitration rules of the Australian Centre   for International Commercial Arbitration.   (b) The seat of the arbitration will be Darwin.   (c) Any hearing shall be held in Darwin.   (d) The number of arbitrators will be one.     

 

    page 47   (e) The award shall be final and binding.   (f) The Parties agree to the following general principles relating to the   procedure of arbitration:   (i) that they have chosen arbitration for the purpose of achieving a just,   quick and cost-effective resolution for any Dispute;   (ii) that any arbitration conducted pursuant to this clause 23 shall not   mimic court proceedings and the practices of those courts will not   regulate the conduct of the proceedings before the arbitrator;   (iii) that in conducting the arbitration, the arbitrator must take into   account the matters set out above;   (iv) that the arbitrator will conduct the arbitration as expeditiously as   possible and neither party will unnecessarily delay the arbitration   proceedings;   (v) that, unless the Parties otherwise agree,  a transcript shall be made   of the arbitration proceedings; and   (vi) that the arbitrator will have the power to grant all legal, equitable and   statutory remedies.   (g) Any award will be final and binding on the Parties.   (h) The rules of evidence will not apply in respect of the arbitration.   23.10 Confidentiality of Arbitration Proceedings   All arbitration proceedings, pleadings, witness statements and other evidence   (including the existence of the arbitration itself) will be kept confidential and not   disclosed other than for the purposes of the arbitration.  All materials held by or   on behalf of the arbitrator will be retained for a period of 12 months from the   conclusion of the arbitration and will then be confidentially destroyed unless a   Party requests otherwise.   23.11 Interlocutory or urgent relief   This clause 23 does not prevent a Party from seeking urgent interlocutory or   declaratory relief from a court of competent jurisdiction where, in that Party's   reasonable opinion, that action is necessary to protect that Party's rights.   24 Seller’s and Buyer’s limitation of liability   24.1 General Limitation of Liability   Neither Party will be liable to the other for any indirect or consequential Loss   (and any loss of profit, business or opportunity) suffered by the other Party   howsoever arising in respect of any circumstances under or in relation to this   Agreement.   24.2 Survival   This clause 24 survives the expiry or termination of this Agreement.     

 

    page 48   25 Assignment   25.1 Assignment by Seller   (a) Subject to clause 25.3,no assignment by the Seller of this Agreement or   of its rights, obligations and interests under it will be of any effect   whatsoever unless with the written consent of the Buyer. That consent   must not be unreasonably withheld.    (b) Consent must be given and if refused will be deemed to be unreasonably   withheld where the assignee has or has access to, through Related   Corporations, sufficient financial capacity and technical ability concerning   the production of gas, to enable it to meet the obligations of the Seller   under this Agreement (Acceptable Assignee). For example, and without   limitation, an assignee with interests either directly, or held by a Related   Corporation, in a producing oil or gas field in Australia from which oil or gas   is being sold on a commercial basis, is an Acceptable Assignee .    (c) Where a proposed assignee does not itself have the financial capacity and   technical ability to be an Acceptable Assignee but does so through a   Related Corporation, then the Buyer may make it a condition of its consent   to the assignment that that Related Corporation guarantee the   performance of the obligations of the assignee under this Agreement.   25.2 Assignment by Buyer   No assignment by the Buyer of this Agreement or of its rights, obligations and   interests under it will be of any effect whatsoever unless with the written consent   of the Seller.  That consent must not be unreasonably withheld where the   assignee is of sufficient financial capacity and technical ability concerning the   operation of power stations, to enable it to meet the obligations of the Buyer   under this Agreement(Acceptable Buyer Assignee).     25.3 Assignment to Related Corporation   (a) A Party may at any time assign its rights, obligations and interests under   this Agreement to a Related Corporation.  Such an assignment is   conditional upon and will not be effective until each of the following   conditions have been satisfied:   (i) an assignment and assumption deed has been executed in relation   to the assignment; and   (ii) any necessary consent, approval, registration or the like under any   relevant laws or any relevant government policy which is required to   render the assignment valid and effective has been obtained.   (b) Where a Party assigns to a Related Corporation in accordance with   clause 25.3(a), that Party will remain liable to the other Party for all   obligations and liabilities under the Agreement until such time as the other   Party agrees (such agreement not to be unreasonably withheld) to provide   it with a release of those obligations and liabilities.       

 

    page 49   25.4 Change of control   (a) Except where a Party has consented to the change in ownership or control   of the other Party or its Related Corporation, if the Related Corporation to   which an assignment has been made under clause 25.3 (Related   Corporation Assignee), or the Party ceases to be a Related Corporation   of the body corporate that was the Ultimate Holding Company of the   Related Corporation Assignee or the Party (as applicable) on the date of   this Agreement (or the date the Related Corporation Assignee became the   Seller or Buyer, as applicable, if later) (respectively for the purpose of this   clause 25.4, Former Ultimate Holding Company) then the Related   Corporation Assignee or the Party (as applicable) must forthwith assign   the whole of its rights, obligations and interests under this Agreement to   the Former Ultimate Holding Company or a Related Corporation of the   Former Ultimate Holding Company.  The provisions of clause 25.3 apply   to that assignment, and, for the avoidance of doubt, the provisions of this   clause 25.4 do not apply to that assignment.   (b) For the purposes of this clause 25.4, Ultimate Holding Company has   the meaning given to that term in section 9 of the Corporations Act 2001   and, for clarity, has that meaning whether the Ultimate Holding Company   or the "body corporate", as that term is referred to in section 9 of the   Corporations Act 2001, is incorporated in or outside of Australia.   Where a Party’s consent to the change in ownership or control of the other   Party or its Related Corporation is sought then that Party must not   unreasonably withhold its consent and must give that consent where the   proposed new Ultimate Holding Company of that Party or Related   Corporation would be an Acceptable Assignee or Acceptable Buyer   Assignee (as applicable) if that Party were assigning its rights and   interests under this Agreement direct to that person.  However the Party   giving its consent may require the new Ultimate Holding Company to   guarantee the performance of the obligations of the Party or its Related   Corporation under this Agreement.   25.5 Right to Charge   The restrictions on assignment contained in this clause will not in any way   prevent the Seller from pledging, mortgaging, encumbering or assigning by way   of security its rights under this Agreement for the purpose of securing the   payment of moneys borrowed or guaranteed or other financial accommodation.   The party to whom such security is to be provided must covenant in writing with   the Buyer acknowledging the rights of the Buyer under this Agreement.   26 Notices   26.1 Method of notice   (a) All notices, consents, requests or notifications authorised or required to be   given by one Party to another under this Agreement (Notice) must be in   writing, unless otherwise specifically provided, and sent to the intended     

 

    page 50   recipient at the address it has from time to time notified to the other Party   for this purpose.   (b) Unless a later time is specified in it, a Notice takes effect from the time it is   actually received or taken to be received.     (c) A Notice sent by post or facsimile or (in the case of Nominations) email is   taken to be received:   (i) in the case of a letter, if posted within Australia to an Australian   address, on the 3rd Business Day after posting, and in any other   case, on the 7th Business Day after posting; and   (ii) in the case of a facsimile, on production of a transmission report by   the machine from which the facsimile was sent which indicates that   the facsimile was sent in its entirety to the facsimile number of the   recipient notified for the purpose of this clause if produced before   5.00 p.m. on a Business Day otherwise on the next Business Day;   and   (iii) in the case of email for Nominations, when the recipient sends an   email back to the sender acknowledging receipt of the Notice.   (d) The address for service of a Notice on each Party is:   Seller Magellan Petroleum (NT) Pty Ltd   Address: Level 1, 167 Eagle Street, Brisbane Qld 4000   Postal address: GPO Box 2766, Brisbane Qld 4001   Facsimile number: (07) 3224-1699   Attention: Operations Director   Buyer Power and Water Corporation   Address: Level 2, Mitchell Centre, 55-59 Mitchell Street,   Darwin NT 0800   Postal address: GPO Box 1921, Darwin NT 0801   Facsimile number: (08) 8923-9527   Attention: General Manager Gas Unit   (e) For the purpose of giving Nominations and notifications pursuant to   clause 9 of this Agreement the following notice details apply for the Seller.   Address of Seller for notices for daily nominations:   Contact: Plant Supervisor   Address:  8 Coulthard Court, Alice Springs NT 0870   Phone:  (08) 8952-5344   Facsimile:  (08) 8952-6077   Email: pvgasplant@bigpond.com.au     

 

    page 51   (f) For the purpose of giving Notifications pursuant to clause 9 of this   Agreement the following notice details apply for the Buyer.   Address of Buyer for notices for confirmation of Nominations:   Contact: Gas Coordinator   Address:  Level 2, Mitchell Centre, 55-59 Mitchell Street,   Darwin NT 0800   Phone:  (08) 8985-8533   Facsimile:  (08) 8923-9527   Email: steve.carter@powerwater.com.au      26.2 Change of address   A Party may change its address for the service of notices at any time and from   time to time by giving notice of the change to the other Party in accordance with   the provisions of this clause 26.   27 Confidentiality   27.1 Duty of confidentiality   During the period from the date of this Agreement until 2 years after  the earlier   termination or expiry of this Agreement, each Party must treat as confidential all   the provisions of this Agreement and any information disclosed by the other   Party pursuant to this Agreement and each Party must not disclose such   information to third persons without the prior written consent of the other and it   must take all reasonable precautions to ensure that its employees maintain the   confidentiality of such information, except:   (a) each Party may disclose such confidential information under similar   conditions of confidentiality to any Related Corporation;     (b) the provisions of this clause will not apply to information which is or   becomes part of the public knowledge or literature or which is lawfully   obtained by a Party from sources other than this Agreement or the other   Party;   (c) each Party and any Related Corporation may make such disclosures as   are required by law or by the rules of any stock exchange or regulatory   agency having jurisdiction over such Party or Related Corporation;    (d) each Party and any Related Corporation may disclose such confidential   information to any of the undermentioned persons provided that the   disclosing Party first obtains a binding confidentiality undertaking from   them in favour of the other Party which reflects the intent of this clause:   (i) any professional adviser;     

 

    page 52   (ii) any assignee (including by share acquisition or merger) or financier   or prospective assignee or financier; or   (iii) an auditor; or   (iv) any department or agency of the government of the Northern   Territory or Commonwealth of Australia;    (e) where the disclosure is in a prospectus issued by that Party or a Related   Corporation as required by securities laws governing that Party or Related   Corporation;   (f) the Buyer may disclose such confidential information to any minister of the   government of the Northern Territory for the purpose of the proper   discharge of such minister’s functions and responsibilities; and    (g) to the extent required for the purpose of any litigation arising from this   Agreement.   27.2 Public Announcements   Either Party may make a public announcement or statement concerning this   Agreement, but the Party wishing to make such announcement (Disclosing   Party) shall first consult with the other Party about the terms of the   announcement and that other Party shall reasonably co-operate with the   Disclosing Party to co-ordinate the making of the announcement and the   finalising of its terms.   28 Miscellaneous   28.1 Governing law   This Agreement is governed by the law in force in the Northern Territory. The   Parties consent and submit to the jurisdiction of the courts of the Northern   Territory.   28.2 Costs and stamp duty   Each Party must bear its own costs of and incidental to the preparation and   execution of this Agreement but the Buyer must pay any stamp duty payable in   respect of the Agreement. The Buyer indemnifies the Seller against liability to   any such duty.   28.3 Entire agreement   This Agreement constitutes the entire agreement between the Parties with   respect to its subject matter and contains all of the representations,   undertakings, warranties, covenants and agreements of the Parties. This   Agreement supersedes all prior negotiations, contracts, arrangements,   understandings and agreements with respect to that subject matter, including,   without limitation, the Term Sheet. There are no representations, undertakings,   warranties, covenants or agreements between the Parties, express or implied,   except as contained in this Agreement.      

 

    page 53   28.4 Severability   If any provision of this Agreement is construed as illegal or invalid or void, the   legality or validity or enforceability of any other provision in this Agreement will   not be affected, and the illegal or invalid or void provisions will be deemed to be   deleted from this Agreement to the same extent and effect as if they were never   incorporated in the Agreement, but all other provisions of this Agreement will   continue in force unless the deletion of the provisions would substantially alter   the commercial efficacy of this Agreement.   28.5 Amendment   This Agreement may be amended only by written instrument duly executed by all   Parties.   28.6 Further assurances   Each Party must from time to time and at all times do all such further acts and   execute and deliver all such further deeds and documents as may be reasonably   required in order to fully perform and carry out the terms of this Agreement.   28.7 No waiver   No waiver by or on behalf of a Party of any breach of a provision of this   Agreement will be binding upon that Party unless the waiver is expressed in   writing and duly executed by that Party. Any waiver by any Party of any one or   more defaults by the other Party in the performance of this Agreement will not   operate or be construed as a waiver of any other default or defaults by the other   Party, whether of the same or a different character and whether occurring before   or after that waiver.   28.8 Partnership   This Agreement in no way constitutes a partnership or agency between the   Parties.   28.9 Counterparts   This Agreement may consist of a number of counterparts and if so, the   counterparts taken together constitute one and the same instrument.     

 

    page 54   Schedule 1   Gas Specification - Dingo Field   Gas Specification Dingo Field means the specification for gas for receipt into the   regulated Amadeus Gas Pipeline (running from the Amadeus Basin to Darwin) as   published from time to time by the owner/operators of that pipeline and currently available   at the website   http://www.apa.com.au/media/192989/gas_specification_-_amadeus_gas_pipeline_111   2%20dec2011.pdf_v0_0_1.pdf    which specification as at the date of this Agreement is as follows :         amended as follows:   (a) the maximum limit for methanol shall be 400 Mg/sm3 ; and   (b) the gas must have a minimum methane number of 70 using the Caterpillar   Company method of calculation.     

 

    page 55   CONFIDENTIAL TREATMENT REQUESTED.  INFORMATION FOR WHICH   CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND MARKED   WITH “[***]”.  AN UNREDACTED VERSION OF THE DOCUMENT HAS ALSO BEEN   FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.   Schedule 2   Contract Price   1 Price and escalation   1.1 Base Price   The Contract Price is $[***] per GJ (exclusive of GST) as at 1 January 2013.   1.2 Escalation of Base Price      The Contract Price for Gas will be escalated on and from 1 April 2013 and on the   first day of each Quarter thereafter (each a Review Date) by 100% of the   variation of the CPI over the previous Quarter provided that the escalation   adjustment shall be limited to a maximum increase of an annualised 6% of   the prior Quarter Contract Price and no less than an increase of an   annualised 2% per annum calculated to 4 significant figures in accordance with   the following formula:      Escalated Contract Price = Current Contract Price x Y    Where:   Y   = the lesser of:     1.015; and      the higher of CPI 2 / CPI 1 and 1.005;   Current Contract Price = the Contract Price applying on the Day   immediately prior to the Review Date;   CPI 2 = CPI for the Quarter ended immediately prior   to the Review Date ( for example, where the   Review Date is 1 July then CPI 2 would be   CPI for the Quarter ended 30 June);   CPI 1 = CPI for the Quarter which immediately   preceded the Quarter for CPI 2 (for example,   where the Review Date is 1 July then CPI 1   would be CPI for the Quarter ended 31   March);   1.015 = (1+6%)^0.25 calculated to 4 significant   figures; and     

 

    page 56   1.005 = (1+2%)^0.25 calculated to 4 significant   figures.     

 

    page 57   Executed as an agreement.         The Common Seal of    Magellan Petroleum (N.T) Pty Ltd    was affixed in accordance with its   Constitution in the presence of                      Signature of director   Signature of    company secretary/director         Full name of director   Full name of    company secretary/director         The Common Seal of the    Power and Water Corporation    ABN 15 947 352 360    was affixed in the presence of:                              (Signature)           (Signature)   Name (Printed)           Name (Printed)   (Position)   (Position)EX10.3.2013.2Q.10Q

 
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT 
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”), dated as of July 1, 2013, between CALVIN KLEIN, INC., a New York corporation (“CKI,” together with its affiliates, including, without limitation, its parent corporation, PVH Corp. (the “Company”; the Company shall refer to CKI or PVH Corp. (“PVH”) or PVH and its affiliates and subsidiaries, including CKI, collectively, as the context may require), and PAUL THOMAS MURRY (the “Executive”).
W I T N E S S E T H:
WHEREAS, the Company has previously entered into a Second Amended and Restated Employment Agreement with the Executive, dated as of December 23, 2008 and as further amended from time to time (the “Existing Agreement”), and the parties desire to amend and restate the Existing Agreement to make certain changes to the Existing Agreement so as to ensure that the Executive is retained in accordance with the terms set forth herein; and 
WHEREAS, the Executive desires to be employed by the Company on the terms and conditions set forth herein, and agrees that this Agreement shall amend and supercede the terms and conditions of the Existing Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the parties hereto hereby agree as follows:
1.Employment.

(a)Effective Date. This Agreement shall be effective as of July 1, 2013 (the “Effective Date”).
(b)Employment Period. The Company agrees to continue to employ the Executive, and the Executive agrees to continue to be employed by the Company, in accordance with the terms and conditions hereof for a four-year period commencing on the Effective Date and ending on the fourth anniversary of the Effective Date (the “Original Term”) and, in the event that the parties mutually agree at any time prior to end of the Original Term, for an additional one-year extension period (such one-year period, together with the Original Term, the “Term”), subject to earlier termination in accordance with the provisions of Section 3. The Executive shall be an employee at will and this Agreement shall not constitute a guarantee of employment. Each of the parties acknowledges and agrees that either party may terminate the Executive's employment at any time, for any reason, with or without Cause (as defined in Section 3(a)). The period commencing on the Effective Date and ending on the first to occur of the end of the Term or the effective date of the termination of the Executive's employment is hereinafter referred to as the “Employment Period.”

(c)Position and Duties. 

(i)During the period commencing on the Effective Date and ending on the third anniversary of the Effective Date (the “Initial Period”), (A) the Executive shall serve as Chief Executive Officer of CKI, with such duties and responsibilities as shall from time to time be assigned to him and as are consistent and commensurate with his title and position, (B) the Executive's services shall be performed at the Company's headquarters in New York, New York or such other location as may be mutually agreed between the Company and the Executive, except for travel, and visits to Company offices and facilities worldwide, reasonably required to attend to the Company's business, and (C) the Executive shall serve on the Company's Operating Committee; provided, however, that the Company may disband the Operating Committee at any time prior to a Change in Control (as hereinafter defined); provided further, that after the 

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Initial Period, the Executive shall serve on the Company's Operating Committee at the discretion of the principal executive officer of PVH (“PVH's CEO”). 

(ii)During the Initial Period, and excluding any periods of vacation and sick leave to which the Executive is entitled, the Executive agrees to devote substantially all of his business attention and time (with business time determined in accordance with the Company's usual and customary standards for its senior executives) to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Executive hereunder, to use the Executive's reasonable best efforts to perform faithfully and conscientiously such responsibilities. During the Employment Period, the Executive shall be entitled to serve as a member of the board of directors of a reasonable number of other companies, to serve on civic and charitable boards and to manage his personal and family investments, in each case, to the extent such activities do not materially interfere, in the reasonable judgment of PVH's Board of Directors (which, for purposes of this Agreement, includes any committee thereof, unless the context requires otherwise (the “Board”)), with the performance of his duties for the Company and are otherwise consistent with the Company's governance policies.

(iii)In addition to the duties and responsibilities outlined in Sections 1(c)(i) and 1(c)(ii) above, it is acknowledged and agreed that during the Initial Period, the Executive is expected to train a successor Chief Executive Officer of CKI and to fully transition his responsibilities to such person on the third anniversary of the Effective Date (the “Transition Date”). Prior to the Transition Date, the Executive shall report regularly to the PVH's CEO on the progress of the development of the Executive's successor and provide for appropriate interactions between the successor and PVH's CEO. On the Transition Date, the Executive shall transition to the role of “Executive Chairman of CKI” and shall no longer hold the title of “Chief Executive Officer of CKI.”  As Executive Chairman of CKI, the Executive shall be involved in establishing the overall strategy of CKI but shall no longer be responsible for day-to-day operations of CKI. The Executive shall also serve as an advisor to his successor to the role of Chief Executive Officer of CKI. Following the Transition Date, the Executive's working hours shall be reduced to 50% of his working hours prior to the Transition Date (although the Executive's responsibilities may from time to time require that the Executive's working hours be adjusted by plus or minus 10%) or approximately two to three days per business week; provided, however, that in no event will the Executive work less than 1,000 hours per year. For the avoidance of doubt, it is the intent of the parties that the Executive's transition to the role of Executive Chairman of CKI shall not constitute a “separation from service” (within the meaning of Section 409A (as defined below)). Following the Transition Date, (A) the Executive's services shall be performed at the Company's headquarters in New York, New York or such other location as may be mutually agreed between the Company and the Executive, except for travel, and visits to Company offices and facilities worldwide, reasonably required to attend to the Company's business, and (B) the Executive may regulate his working hours as he reasonably determines so long as he continues to satisfy his responsibilities pursuant to this Agreement.  

2.Compensation.

(a)Base Salary. During the Employment Period and prior to the Transition Date, the Company shall pay the Executive a salary at the annual rate of $1,000,000 (“Base Salary”), payable in accordance with the normal payroll procedures of the Company in effect from time to time. The Executive's Base Salary shall be reviewed for increase at least annually by the Board pursuant to its normal performance review policies for senior executives. Except as otherwise provided in the following sentence, the Base Salary shall not be reduced after any increase. From and after the Transition Date, the Base Salary shall be reduced by 50%. If the Executive remains as Executive Chairman of CKI for more than one year beyond the Initial Period, the Base Salary, as reduced pursuant to the foregoing sentence, may (but is not required to) be reviewed for increase by the Board. The term Base Salary as utilized in this Agreement shall refer to the Executive's annual base salary as then in effect. 

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(b)Incentive and Bonus Compensation. The Executive shall be eligible to participate in the Company's existing and future bonus and stock plans and other incentive compensation programs for similarly situated executives (collectively, “Plans”), to the extent that the Executive is qualified to participate in any such Plan under the generally applicable provisions thereof in effect from time to time; provided, however, that it is acknowledged and agreed that the Executive will receive an option to purchase shares of the Company's common stock in PVH's 2013 fiscal year as described in Section 2(e) and no further option awards will be made to him in PVH's 2013, 2014 or 2015 fiscal years. The Executive acknowledges and agrees that eligibility to participate in a Plan is not a guarantee of participation in or of the receipt of any award, payment or other compensation under any Plan. 

(i)Notwithstanding anything herein to the contrary, the Executive acknowledges and agrees that following the Transition Date, the Executive's bonus opportunity under any such Plan shall be reduced by 50%; provided, however, that the Executive shall be eligible to receive with respect to the year in which the Transition Date occurs any bonus earned multiplied by a fraction, the numerator of which is equal to the sum of (A) the number of days during the year prior to the Transition Date plus (B) the product of (x) the number of days during such year from and after the Transition Date multiplied by (y) 0.5 and the denominator of which is 365. 

(ii)To the extent the Executive does participate in a Plan and the Plan does not expressly provide otherwise, the PVH's CEO and/or the Board, as appropriate, may determine all terms of participation (including, without limitation, the type and size of any award, payment or other compensation and the timing and conditions of receipt thereof by the Executive) in PVH's CEO's or the Board's sole and absolute discretion. Nothing herein shall be deemed to prohibit the Company or the Board from amending or terminating any and all Plans in its sole and absolute discretion. Except as otherwise provided herein, the terms of each Plan shall govern the Executive's rights and obligations thereunder during the Executive's employment and upon the termination thereof. Without limiting the generality of the foregoing, the definition of “Cause” hereunder shall not supersede the definition of “cause” in any Plan (unless the Plan expressly defers to the definition of “cause” under an executive's employment agreement) and any rights of the Executive hereunder upon and subsequent to the termination of the Executive's employment shall be in addition to, and not in lieu of, any right of the Executive under any Plan then in effect upon or subsequent to a termination of employment.

(c)Benefits. The Executive shall be eligible to participate in all employee benefit and insurance plans sponsored or maintained by the Company for similarly situated executives (including any savings, retirement, life, health and disability plans), to the extent that the Executive is qualified to participate in any such plan under the generally applicable provisions thereof in effect from time to time. Nothing herein shall be deemed to prohibit the Company or the Board from amending or terminating any such plan in its sole and absolute discretion. Except as otherwise provided herein, the terms of each such plan shall govern the Executive's rights and obligations thereunder during the Executive's employment and upon the termination thereof.

(d)Expenses. The Company shall pay or reimburse the Executive for reasonable expenses incurred or paid by the Executive in the performance of the Executive's duties hereunder in accordance with the generally applicable policies and procedures of the Company, as in effect from time to time and subject to the terms and conditions thereof. Such procedures include the reimbursement of approved expenses within 30 days after approval. Section 409A (as defined in Section 7(l)) prohibits reimbursement payments from being made any later than the end of the calendar year following the calendar year in which the applicable expense is incurred or paid. Also under Section 409A (i) the amount of expenses eligible for reimbursement during any calendar year may not affect the amount of expenses eligible for reimbursement in any other calendar year, and (ii) the right to reimbursement under this Section 2(d) cannot be subject to liquidation or exchange for another benefit.

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(e)Option Award. As consideration for the Executive's agreement to enter into this Agreement, the Executive shall be granted on the first business day of the month following the Effective Date an award of a stock option with a fair market value on the date of grant of approximately $1,000,000, such award to be granted in accordance with and under the Company's 2006 Stock Incentive Plan and subject to the terms and conditions set forth in the applicable option agreement (the “Option”). The Option shall vest as to one-third of the shares underlying the Option on each of the first, second and third anniversaries of the Effective Date. The Option shall not be subject to accelerated vesting upon retirement.

(f)Clothing Allowance. The Executive shall be eligible to participate in any clothing allowance program developed for executives of CKI, the terms of such participation to be established by the Company.  

3.Termination of Employment. The Executive's employment hereunder shall terminate, or shall be subject to termination at any time, as described in this Section 3. A termination of employment shall mean that the Executive has ceased to provide any services as an employee of the Company.

(a)Termination for Cause by the Company. The Company may terminate the Executive's employment with the Company at any time for Cause. Upon such termination, the Company shall have no further obligation to the Executive hereunder except for the payment or provision, as applicable, of (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (ii) all unreimbursed expenses (if any), subject to Section 2(d), and (iii) other payments, entitlements or benefits, if any, in accordance with terms of the applicable plans, programs, arrangements or other agreements of the Company or any affiliate thereof (other than any severance plan or policy) as to which the Executive held rights to such payments, entitlements or benefits, whether as a participant, beneficiary or otherwise on the date of termination ("Other Benefits”). For the avoidance of doubt, the Executive shall have no right to receive any amounts under the Company's severance policy upon his termination for Cause.

(i)For purposes of this Agreement, “Cause” shall be defined as: (1) gross negligence or willful misconduct, as the case may be, in the performance of the material responsibilities of the Executive's office or position, which results in material economic harm to the Company or its affiliates or in material reputational harm causing demonstrable injury to the Company or its affiliates; (2) the willful and continued failure of the Executive to perform substantially the Executive's duties with the Company or any affiliate (other than any such failure resulting from incapacity due to physical or mental illness), after a written demand for substantial performance is delivered to the Executive by the Board or the Company that specifically identifies the manner in which the Board or the Company believes that the Executive has not substantially performed the Executive's duties, and the Executive has not cured such failure to the reasonable satisfaction of the Board or the Company within 20 days following the Executive's receipt of such written demand; (3) the Executive is convicted of, or pleads guilty or nolo contendere to, a felony within the meaning of U.S. Federal, state or local law (other than a traffic violation); (4) the Executive having willfully divulged, furnished or made accessible to anyone other than the Company, its directors, officers, employees, auditors and legal advisors, otherwise than in the ordinary course of business, any Confidential Information (as hereinafter defined); or (5) any act or failure to act by the Executive, which, under the provisions of applicable law, disqualifies the Executive from acting in any or all capacities in which he is then acting for the Company.

(ii)For purposes of this provision, no act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive's action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or upon the instructions of the Board or PVH's CEO or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.

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(b)Termination without Cause by the Company or for Good Reason by the Executive Prior to a Change in Control. The Company may also terminate the Executive's employment with the Company at any time without Cause, and the Executive may terminate his employment with the Company at any time for Good Reason (as defined in Section 3(f)(i)(B)). For the avoidance of doubt, the expiration of the Term (including the decision of either or both parties not to extend the Original Term pursuant to Section 1(b)) shall be deemed to be a retirement and shall not constitute a termination without Cause by the Company or constitute the basis for the Executive to terminate his employment for Good Reason. 

(i)If the Company terminates the Executive's services without Cause or the Executive terminates his employment with the Company for Good Reason, other than during the two-year period following a Change in Control (as defined in Section 3(f)(i)(A)), the Executive shall be entitled to receive from the Company (W) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any); (X) all unreimbursed expenses (if any), subject to Section 2(d); (Y) an aggregate amount (the “Severance Amount”) equal to one and a half (1.5) times the sum of (1) the Base Salary plus (2) an amount equal to the bonus that would be payable if “target” level performance were achieved under the Company's annual bonus plan (if any) in respect of the fiscal year during which the termination occurs (or the prior fiscal year if bonus levels have not yet been established for the year of termination); and (Z) the payment or provision of any Other Benefits. The Severance Amount shall be paid in 36 substantially equal payments, and on the same schedule that Base Salary was paid immediately prior to the Executive's date of termination, commencing on the first such scheduled payroll date that occurs on or following the date that is 30 days after the Executive's termination of employment, subject to the Executive's compliance with the requirement to deliver the release contemplated pursuant to Section 4(a). Each such installment payment shall be treated as a separate payment as defined under Treasury Regulation §1.409A-2(b)(2). If the Executive is a “specified employee” (as determined under the Company's policy for identifying specified employees) on the date of his “separation from service” (within the meaning of Section 409A) and if any portion of the Severance Amount would be considered “deferred compensation” under Section 409A, all payments of the Severance Amount (other than payments that satisfy the short-term deferral rule, as defined in Treasury Regulation §1.409A-1(b)(4), or that are treated as separation pay under Treasury Regulation §1.409A-1(b)(9)(iii) or §1.409A-1(b)(9)(v)) shall not be paid or commence to be paid on any date prior to the first business day after the date that is six months following the Executive's separation from service. The first payment that can be made shall include the cumulative amount of any amounts that could not be paid during such six-month period. In addition, interest will accrue at the 10-year T-bill rate (as in effect as of the first business day of the calendar year in which the separation from service occurs) on all payments not paid to the Executive prior to the first business day after the sixth month anniversary of his separation from service that otherwise would have been paid during such six-month period had this delay provision not applied to the Executive and shall be paid with the first payment after such six-month period. Notwithstanding the foregoing, payments delayed pursuant to this six-month delay requirement shall commence earlier in the event of the Executive's death prior to the end of the six-month period. For purposes hereof, the Executive shall have a “separation from service” upon his death or other termination of employment for any reason.

(ii)In addition, if the Company terminates the Executive's employment with the Company without Cause or the Executive terminates his employment with the Company for Good Reason, then the Company shall also provide to the Executive, during the 18-month period following the Executive's date of termination, medical, dental, life and disability insurance coverage for the Executive and the members of his family which is not less favorable to the Executive than the group medical, dental, life and disability insurance coverage carried by the Company for the Executive and the members of his family immediately prior to such termination of employment; provided, however, that the obligations set forth in this sentence shall terminate to the extent the Executive obtains comparable medical, dental, life or disability insurance coverage from any other employer during such period, but the Executive shall not have any obligation to seek or accept employment during such period, whether or not any such employment would provide 

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comparable medical and dental insurance coverage; and provided further, however, that the Executive shall be obligated to pay an amount equal to the active employee contribution, if any, for each such coverage.  

(iii)For the avoidance of doubt, (x) the payment of the Severance Amount shall be in lieu of any amounts payable under the Company's severance policy (as then in effect) and the Executive hereby waives any and all rights thereunder and (y) if a termination of employment covered by Section 3(b) occurs at any time from and after the Transition Date, then the Severance Amount shall be calculated using the post-Transition Date reduced Base Salary and target level bonus opportunity provided pursuant to Sections 2(a) and 2(b)(i).

(c)Termination by Voluntary Resignation (without Good Reason) by the Executive. The Executive may terminate his employment with the Company without Good Reason at any time by voluntary resignation. Upon such termination, the Company shall have no further obligation to the Executive hereunder except for the payment of (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (ii) all unreimbursed expenses (if any), subject to Section 2(d), and (iii) the payment or provision of any Other Benefits. Notwithstanding the foregoing, the Executive shall provide no less than 90 days' prior written notice of the effective date of his resignation (other than for Good Reason). The Company shall continue to pay the Executive his Base Salary during such 90-day period. Notwithstanding the foregoing, the Company, in its sole and absolute discretion, may waive the requirement for prior notice of the Executive's resignation or decrease the notice period, in which event the Company shall have no continuing obligation to pay the Executive's Base Salary or shall only have such obligation with respect to the shortened period, as the case may be.

(d)Disability. The Executive's employment shall be terminable by the Company, subject to applicable law and the Company's short-term and long-term disability policies then in effect, if the Executive becomes physically or mentally disabled, whether totally or partially, such that he is prevented from performing his usual duties and services hereunder for a period of 180 consecutive days as determined by a medical doctor selected by the Company and reasonably acceptable to the Executive or his legal representative (“Disability”). If the Executive's employment is terminated by the Company due to his Disability, the Company shall have no further obligation to the Executive hereunder, except for the payment to the Executive or his legal guardian or representative, as appropriate, of (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (ii) all unreimbursed expenses (if any), subject to Section 2(d), and (iii) the payment or provision of any Other Benefits.

(e)Death. If the Executive shall die during the Employment Period, this Agreement shall terminate on the date of the Executive's death and the Company shall have no further obligation to the Executive hereunder except for the payment to the Executive's estate of (i) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any), (ii) all unreimbursed expenses (if any), subject to Section 2(d) and (iii) the payment or provision of any Other Benefits.

(f)Termination by the Company without Cause or by the Executive For Good Reason Subsequent to a Change in Control.

(i)For purposes of this Agreement, the following terms shall have the meanings set forth below:

(A)“Change in Control” shall be deemed to occur upon the first to occur of the following events:

(1)Any “person” (as such term is used in Sections 3(a)(9) and 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)), other than a “person” 

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who as of the Effective Date was the owner of at least 8% of the combined voting power of the then-outstanding voting securities of PVH entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”), becomes (A) a “beneficial owner,” as such term is used in Rule 13d-3 of the Exchange Act, of at least one-quarter but less than one-half of the Outstanding Company Voting Securities, unless such acquisition has been approved within thirty (30) days thereafter by at least a majority of the Incumbent Board (as defined in clause (2) below taking into account the provisos), or (B) a “beneficial owner,” as such term is used in Rule 13d-3 of the Exchange Act, of at least one-half of the Outstanding Company Voting Securities; provided, however, that, for purposes of this Section 3(f)(i)(A)(1), the following acquisitions shall not constitute a Change in Control: (I) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (II) any acquisition by the Company, (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its affiliates, or (IV) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of Section 3(f)(i)(A)(3) below;

(2)Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board;

(3)Consummation of a reorganization, merger, consolidation or a sale or other disposition of all or substantially all of the assets of PVH (each, a “Business Combination”), in each case unless, following such Business Combination, (A) all or substantially all of the individuals and entities that were the beneficial owners of the outstanding shares of common stock of PVH (the “Outstanding Company Common Stock”) and the Outstanding Company Voting Securities, immediately prior to such Business Combination, beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and more than 50% of the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation that, as a result of such transaction, owns PVH or all or substantially all of PVH's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no person (other than the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Business Combination or the outstanding voting securities of such corporation entitled to vote generally in the election of directors, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the 

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Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination, whichever occurs first; or 

(4)The approval by the stockholders of PVH of a complete liquidation or dissolution of PVH.

(B)“Good Reason” shall mean the occurrence of any of the following events or circumstances without the Executive's prior written consent:

(1)the assignment to the Executive of any duties inconsistent in any material respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1(c) (or following a Change in Control, as in effect immediately prior to such Change in Control), or any other action by the Company that results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and that is remedied by the Company promptly after receipt of notice thereof given by the Executive and the assignment of additional or alternate duties or responsibilities to the Executive in connection with his professional development or the reallocation of some of the Executive's duties or responsibilities to other executives of the Company in connection with the evolution of the Executive's position; provided, however, that the Executive's removal from the Company's Operating Committee (including the Executive's removal from, or failure to be appointed to, any analogous committee of any successor to the Company following a Change in Control) shall be conclusively presumed to a material diminution of the Executive's authority, duties and responsibilities;

(2)a reduction of the Executive's Base Salary;

(3)the taking of any action by the Company that substantially diminishes (A) the aggregate value of the Executive's total compensation opportunity, and/or (B) the aggregate value of the employee benefits provided to the Executive pursuant to the Company's employee benefit and insurance plans as in effect on the Effective Date (or, following a Change in Control, as in effect immediately prior to such Change in Control);

(4)the Company requiring that the Executive's services be rendered primarily at a location or locations more than 35 miles from the location set forth in Section 1(c), except for travel, and visits to Company offices and facilities worldwide, reasonably required to attend to the Company's business; or

(5)the failure of the Company to require any successor to the Company (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

For the avoidance of doubt, the Executive's transition to the role of Executive Chairman of CKI pursuant to Section 1(c)(iii) will not be regarded as constituting Good Reason and, from and after the Transition Date, the determination of whether “Good Reason” exists shall be determined by reference to the Executive's new and adjusted position, authority, duties, responsibilities, compensation and other terms and conditions of employment, as provided in Sections 1(c)(iii), 2(a), 2(b), 2(e), 3(b)(i) and 3(f)(ii), as applicable.   

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(ii)If within two years after the occurrence of a Change in Control, the Executive terminates his employment with the Company for Good Reason or the Company terminates the Executive's employment for any reason other than death, Disability or Cause, the Company (or the then former Company subsidiary employing the Executive), or the consolidated, surviving or transferee person in the event of a Change in Control pursuant to a consolidation, merger or sale of assets, the Executive shall be entitled to receive from the Company (A) the portion of the Base Salary for periods prior to the effective date of termination accrued but unpaid (if any); (B) all unreimbursed expenses (if any), subject to Section 2(d); (C) an aggregate amount (the “Change in Control Severance Amount”) equal to two times the sum of (I) the Base Salary plus (II) an amount equal to the bonus that would be payable if the “target” level performance were achieved under the Company's annual bonus plan (if any) in respect of the fiscal year during which the termination occurs (or the prior fiscal year if bonus levels have not yet been established for the year of termination); and (D) the payment or provision of any Other Benefits. The Change in Control Severance Amount shall be paid (x) in a lump sum, if the Change in Control event constitutes a “change in the ownership” or a “change in the effective control” of the Company or a “change in the ownership of a substantial portion of a corporation's assets” (each within the meaning of Section 409A), or (y) in 48 substantially equal payments, if the Change in Control event does not so comply with Section 409A. The lump sum amount shall be paid, or the installment payments shall commence, as applicable, on the first scheduled payroll date (in accordance with the Company's payroll schedule in effect for the Executive immediately prior to such termination) that occurs on or following the date that is 30 days after the Executive's termination of employment; provided, however, that the payment of such severance amount is subject to the Executive's compliance with the requirement to deliver the release contemplated pursuant to Section 4(a). Any such installment payment shall be treated as a separate payment as defined under Treasury Regulation §1.409A-2 (b)(2). If the Executive is a “specified employee” (as determined under the Company's policy for identifying specified employees) on the date of his “separation from service” (within the meaning of Section 409A) and if any portion of the severance amount described in clause (C) would be considered “deferred compensation” under Section 409A, such severance amount shall not be paid or commence to be paid on any date prior to the first business day after the date that is six months following the Executive's separation from service (unless any such payment(s) shall satisfy the short-term deferral rule, as defined in Treasury Regulation §1.409A-1(b)(4), or shall be treated as separation pay under Treasury Regulation §1.409A-1(b)(9)(iii) or §1.409A-1(b)(9)(v)). If paid in installments, the first payment that can be made shall include the cumulative amount of any amounts that could not be paid during such six-month period. In addition, interest will accrue at the 10-year T-bill rate (as in effect as of the first business day of the calendar year in which the separation from service occurs) on such lump sum amount or installment payments, as applicable, not paid to the Executive prior to the first business day after the sixth month anniversary of his separation from service that otherwise would have been paid during such six-month period had this delay provision not applied to the Executive and shall be paid at the same time at which the lump sum payment or the first installment payment, as applicable, is made after such six-month period. Notwithstanding the foregoing, a payment delayed pursuant to the preceding three sentences shall commence earlier in the event of the Executive's death prior to the end of the six-month period. Upon the termination of employment with the Company for Good Reason by the Executive or upon the involuntary termination of employment with the Company of the Executive for any reason other than death, Disability or Cause, in either case within two years after the occurrence of a Change in Control, the Company (or the then former Company subsidiary employing the Executive), or the consolidated, surviving or transferee person in the event of a Change in Control pursuant to a consolidation, merger or sale of assets, shall also provide, for the period of two consecutive years commencing on the date of such termination of employment, medical, dental, life and disability insurance coverage for the Executive and the members of his family which is not less favorable to the Executive than the group medical, dental, life and disability insurance coverage carried by the Company for the Executive and the members of his family either 

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immediately prior to such termination of employment or immediately prior to the occurrence of such Change in Control, whichever is greater; provided, however, that the obligations set forth in this sentence shall terminate to the extent the Executive obtains comparable medical, dental, life or disability insurance coverage from any other employer during such two-year period, but the Executive shall not have any obligation to seek or accept employment during such two-year period, whether or not any such employment would provide comparable medical, dental, life and disability insurance coverage. For the avoidance of doubt, (X) the amounts payable under clause (C) of this Section 3(f)(ii) as severance shall be in lieu of any amounts payable under the Company's severance policy and the Executive hereby waives any and all rights thereunder and (Y) if a termination of employment covered by Section 3(f) occurs at any time from and after the Transition Date, then the Change In Control Severance Amount shall be calculated using the post-Transition Date reduced Base Salary and target level bonus opportunity provided pursuant to Sections 2(a) and 2(b)(i). 

(iii)Excise Taxes. Notwithstanding anything in the foregoing to the contrary, if Independent Tax Counsel (as that term is defined below) determines that the aggregate payments and benefits provided or to be provided to the Executive pursuant to this Agreement, and any other payments and benefits provided or to be provided to the Executive from the Company or affiliates or any successors thereto constitute “parachute payments” as defined in Section 280G (or any successor provision thereto)  of the Internal Revenue Code of 1986, as amended (the “Code” and any such payments and benefits, “Parachute Payments”) that would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then, except as otherwise provided in the next sentence, such Parachute Payments shall be reduced to the extent the Independent Tax Counsel shall determine is necessary (but not below zero) so that no portion thereof shall be subject to the Excise Tax. If Independent Tax Counsel determines that the Executive would receive in the aggregate greater payments and benefits on an after tax basis if the Parachute Payments were not reduced pursuant to this Section 3(f)(iii), then no such reduction shall be made. The determination of which payments or benefits shall be reduced to avoid the Excise Tax shall be made by the Independent Tax Counsel, provided that the Independent Tax Counsel shall reduce or eliminate, as the case may be, payments or benefits in the order that it determines will produce the required reduction in total Parachute Payments with the least reduction in the after-tax economic value to the Executive of such payments. If the after-tax economic value of any payments are equivalent, such payments shall be reduced in the inverse order of when the payments would have been made to the Executive until the reduction specified herein is achieved. The determination of the Independent Tax Counsel under this Section 3(f)(iii) shall be final and binding on all parties hereto. For purposes of this Section 3(f)(iii), “Independent Tax Counsel” shall mean a lawyer, a certified public accountant with a nationally recognized accounting firm, or a compensation consultant with a nationally recognized actuarial and benefits consulting firm with expertise in the area of executive compensation tax law, who shall be selected by the Company and shall be acceptable to the Executive (the Executive's acceptance not to be unreasonably withheld), and whose fees and disbursements shall be paid by the Company. Notwithstanding anything herein to the contrary, this Section 3(f)(iii) shall be interpreted (and, if determined by the Company to be necessary, reformed) to the extent necessary to fully comply with Section 409A of the Code; provided that the Company agrees to maintain, to the maximum extent practicable, the original intent and economic benefit to the Executive of the applicable provision without violating the provisions of Section 409A of the Code.

(g)Notice of Termination. Any termination by the Company or by the Executive, other than a termination by reason of the Executive's death, shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 7(c). “Notice of Termination” means a written notice that (i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and (iii) if the date of termination is other than the date of receipt of such notice, specifies the date of termination.

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(h)Date of Termination. For purposes of this Agreement the Executive's date of termination of employment shall be (i) if the Executive's employment is terminated by the Company with or without Cause, by the Executive for Good Reason, or due to the Executive's Disability, the date of termination shall be the date on which the other party receives the Notice of Termination, unless a later date is mutually agreed, (ii) if the Executive's employment is terminated by the Executive other than for Good Reason, the 90th day following the Company's receipt of the Notice of Termination, unless the Company waives or reduces such period as provided in Section 3(c), and (iii) if the Executive's employment is terminated by reason of death, the date of termination shall be the date of death.

(i)Resignation. Upon termination of the Executive's employment for any reason, the Executive agrees to resign, effective as of the date of termination, from any positions that the Executive holds with the Company and its affiliates, the Board (and any committees thereof), unless the Board requests otherwise and the Executive agrees, and the board of directors (and any committees thereof) of any of the Company's subsidiaries and affiliates.

4.Effect of Termination. 

(a)Full Settlement. The amounts paid to the Executive pursuant to Section 3(b) or 3(f)(ii), as applicable, following termination of his employment shall be in full and complete satisfaction of the Executive's rights under this Agreement and any other claims he may have with respect to his employment by the Company and the termination thereof, other than as expressly provided in Section 2(b). Such amounts shall constitute liquidated damages with respect to any and all such rights and claims. In consideration of the Executive's receipt thereof, the Executive shall execute a release in favor of the Company, substantially in the form of Exhibit A hereto. Pursuant to said release, the Company shall be released and discharged from any and all liability to the Executive in connection with this Agreement and otherwise in connection with the Executive's employment with the Company and the termination thereof, including, without limitation, any claims arising under federal, state or local labor, employment and employment discrimination laws, but excluding claims with respect to this Agreement and any Plan. The payments and provision of benefits to the Executive required by Sections 3(b) and 3(f)(ii), other than amounts that are required to be paid to the Executive under applicable law, shall be conditioned upon the Executive's delivery (and non-revocation prior to the expiration of the revocation period contained in the release) of such release in favor of the Company, provided that such conditions are met on or before the date that is 30 days after the date of the Executive's termination of employment. If such conditions are not met by such date, the Executive shall forfeit such payments and benefits. Notwithstanding the foregoing, nothing herein shall be construed to release the Company from its obligations to indemnify the Executive (as set forth in Section 7(h)).

(b)No Duplication; No Mitigation; Limited Offset. In no event shall the Executive be entitled to duplicate payments or benefits under different provisions of this Agreement or pursuant to the terms of any other plan, program or arrangement of the Company or its affiliates. In the event of any termination of the Executive's employment, the Executive shall be under no obligation to seek other employment, and, there shall be no offset against amounts due the Executive under this Agreement or pursuant to any plan of the Company or any of its affiliates on account of any remuneration attributable to any subsequent employment or any claim asserted by the Company or any of its affiliates, except with respect to the continuation of benefits under Sections 3(b) and 3(f)(ii), which shall terminate immediately upon obtaining comparable coverage from another employer. 

5.Restrictive Covenants.

(a)Confidentiality. The Executive recognizes that any knowledge and information of any type whatsoever of a confidential nature relating to the business of the Company, including, without limitation, all types of trade secrets, vendor and customer lists and information, employee lists and 

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information, information regarding product development, marketing plans, management organization information, operating policies and manuals, sourcing data, performance results, business plans, financial records, and other financial, commercial, business and technical information (collectively, “Confidential Information”), must be protected as confidential, not copied, disclosed or used, other than for the benefit of the Company, at any time. The Executive further agrees that at any time during the Employment Period or thereafter he will not divulge to anyone (other than the Company or any person employed or designated by the Company), publish or make use of any Confidential Information without the prior written consent of the Company, except as (and only to the extent) (i) required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency and then only after providing the Company with the reasonable opportunity to prevent such disclosure or to receive confidential treatment for the Confidential Information required to be disclosed, (ii) with respect to any other litigation, arbitration or mediation involving this Agreement, including, but not limited to the enforcement of this Agreement or (iii) as to Confidential Information that becomes generally known to the public or within the relevant trade or industry other than due to the Executive's violation of this Section 5(a). The Executive further agrees that following the termination of the Employment Period for whatever reason, (A) the Company shall keep all tangible property assigned to the Executive or prepared by the Executive and (B) the Executive shall not misappropriate or infringe upon the Confidential Information of the Company (including the recreation or reconstruction of Confidential Information from memory).

(b)Non-Interference. The Executive acknowledges that information regarding the Company's business and financial relations with its vendors and customers is Confidential Information and proprietary to the Company and that any interference with such relations based directly or indirectly on the use of such information would cause irreparable damage to the Company. The Executive acknowledges that by virtue of his employment with the Company, he has gained or may gain knowledge of such information concerning the Company's vendors and customers (respectively “Vendor Information” or “Customer Information”), and that he would inevitably have to draw on this Vendor Information and Customer Information and on other Confidential Information if he were to solicit or service the Company's vendors or customers on behalf of a competing business enterprise. Accordingly, and subject to the immediately following sentence, the Executive agrees that during the Employment Period and for a period of 18 months following the termination thereof, other than by reason of a termination by the Company without Cause or by the Executive for Good Reason, the Executive will not, on behalf of himself or any other person, other than the Company, directly or indirectly do business with, solicit the business of, or perform any services for any actual vendor or customer of the Company, any person that has been a vendor or customer of the Company within the 12-month period preceding such termination or any actively solicited prospective vendor or customer as to whom or which the Executive provided any services or as to whom or which the Executive has knowledge of Vendor Information, Customer Information or Confidential Information. The foregoing restrictive covenant shall only apply to business activities engaged in by the Executive on behalf of himself or any other person that are directly competitive with those of the operating divisions of the Company in which the Executive has worked or over which he has or has had supervisory responsibility, in terms of channels of distribution, types of products, gender for which the products have been designed and similarity of price range. In addition, the Executive agrees that, during the Employment Period and such 18-month period thereafter, he will not, directly or indirectly, seek to encourage or induce any such vendor or customer to cease doing business with, or lessen its business with, the Company, or otherwise interfere with or damage (or attempt to interfere with or damage) any of the Company's relationships with its vendors and customers, except in the ordinary course of the Company's business.

(c)Non-Competition. The Executive agrees that, during the Employment Period and for a period of 12 months following his termination of employment, other than upon a termination by the Company without Cause or by the Executive for Good Reason, the Executive shall not, without the prior written consent of the Company, directly or indirectly, on the Executive's behalf or on behalf of any other person, firm, corporation, association or other entity, as an employee, director, advisor, partner, consultant 

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or otherwise, engage in any business of, provide services to, enter the employ of, or have any interest in, any other person, firm, corporation or other entity that is engaged in a business that is in competition with the primary businesses or products of the Company as of the Executive's date of termination (following a Change in Control, such businesses or products shall be limited to those in which the Executive has worked or over which he has or has had supervisory responsibility, in terms of channels of distribution, types of products, gender for which the products have been designed and similarity of price range, as of his date of termination). Nothing herein shall restrict the Executive from owning, for personal investment purposes only, less than 5% of the voting stock of any publicly held corporation or 2% of the ownership interest in any non-publicly held company, if the Executive has no other connection or relationship with the issuer of such securities.

(d)Non-Solicitation. The Executive agrees that during the Employment Period and for a period of 18 months following the termination thereof for any reason, he will not hire or solicit to hire, whether on his own behalf or on behalf of any other person (other than the Company), any employee of the Company or any individual who had left the employ of the Company within 12 months of the termination of the Executive's employment with the Company. In addition, during the Employment Period and such 18-month period thereafter, the Executive will not, directly or indirectly, encourage or induce any employee of the Company to leave the Company's employ, except in the ordinary course of the Company's business.

(e)Public Comment. The Executive, during the Employment Period and at all times thereafter, shall not make any derogatory comment concerning the Company or any of its current or former directors, officers, stockholders or employees. Similarly, the then current (i) members of the Board and (ii) members of the Company's senior management shall not make any derogatory comment concerning the Executive, and the Company shall use reasonable efforts to ensure that the former (A) members of the Board and (B) members of the Company's senior management do not make any derogatory comment concerning the Executive.

(f)Blue Penciling. If any of the restrictions on competitive or other activities contained in this Section 5 shall for any reason be held by a court of competent jurisdiction to be excessively broad as to duration, geographical scope, activity or subject, such restrictions shall be construed so as thereafter to be limited or reduced to be enforceable to the extent compatible with the applicable law; it being understood that by the execution of this Agreement, (i) the parties hereto regard such restrictions as reasonable and compatible with their respective rights and (ii) the Executive acknowledges and agrees that the restrictions will not prevent him from obtaining gainful employment subsequent to the termination of his employment. The existence of any claim or cause of action by the Executive against the Company shall not constitute a defense to the enforcement by the Company of the foregoing restrictive covenants, but such claim or cause of action shall be determined separately.

(g)Injunctive Relief. The Executive acknowledges and agrees that the covenants and obligations of the Executive set forth in this Section 5 relate to special, unique and extraordinary services rendered by the Executive to the Company and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law. Therefore, the Executive agrees that the Company shall be entitled to seek an injunction, restraining order or other temporary or permanent equitable relief (without the requirement to post bond) restraining the Executive from committing any violation of the covenants and obligations contained herein. These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.

6.Work for Hire. The Executive agrees that all marketing, operating and training ideas, sourcing data, processes and materials, including all inventions, discoveries, improvements, enhancements, written materials and development related to the business of the Company (“Proprietary Materials”) to which the 

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Executive may have access or that the Executive may develop or conceive while employed by the Company shall be considered works made for hire for the Company and prepared within the scope of employment and shall belong exclusively to the Company. Any Proprietary Materials developed by the Executive that, under applicable law, may not be considered works made for hire, are hereby assigned to the Company without the need for any further consideration, and the Executive agrees to take such further action, including executing such instruments and documents as the Company may reasonably request, to evidence such assignment.

7.Miscellaneous.

(a)Assignment and Successors. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, legatees, executors, administrators, legal representatives, successors and assigns.

Notwithstanding anything in the foregoing to the contrary, the Executive may not assign any of his rights or obligations under this Agreement without first obtaining the written consent of the Company. The Company may assign this Agreement in connection with a sale of all or substantially all of its business and/or assets (whether direct or indirect, by purchase, merger, consolidation or otherwise) and will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. “Company” means the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law or otherwise.
(b)Survival. The provisions of Sections 3, 4, 5, 6 and 7 shall survive the termination of this Agreement pursuant to Section 3.

(c)Notices. Any notices to be given hereunder shall be in writing and delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid as follows:

If to the Executive, addressed to the Executive at the address then shown in the Executive's employment records
If to the Company at:
PVH Corp.
200 Madison Avenue 
New York, New York 10016 
Attention: Chairman 
With a copy to:
PVH Corp.
200 Madison Avenue 
New York, New York 10016 
Attention: Senior Vice President, General Counsel and Secretary  
Any party may change the address to which notices are to be sent by giving notice of such change of address to the other party in the manner provided above for giving notice.

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(d)Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without regard to the principles thereof relating to the conflict of laws.

(e)Consent to Jurisdiction. Any judicial proceeding brought against the Executive with respect to this Agreement may be brought in any court of competent jurisdiction in the Borough of Manhattan in the City and State of New York and, by execution and delivery of this Agreement, the Executive: (i) accepts, generally and unconditionally, the nonexclusive jurisdiction of such courts and any related appellate courts, and irrevocably agrees to be bound by any final judgment (after exhausting all appeals therefrom or after all time periods for such appeals have expired) rendered thereby in connection with this Agreement, and (ii) irrevocably waives any objection the Executive may now or hereafter have as to the venue of any such suit, action or proceeding brought in such a court or that such court is an inconvenient forum.

(f)Severability. The invalidity of any one or more provisions of this Agreement or any part thereof shall not affect the validity of any other provision of this Agreement or part thereof; and in the event that one or more provisions contained herein shall be held to be invalid, the Agreement shall be reformed to make such provisions enforceable.

(g)Waiver. The Company, in its sole discretion, may waive any of the requirements imposed on the Executive by this Agreement. The Company, however, reserves the right to deny any similar waiver in the future. Each such waiver must be express and in writing and there will be no waiver by conduct. Pursuit by the Company of any available remedy, either in law or equity, or any action of any kind, does not constitute waiver of any other remedy or action. Such remedies and actions are cumulative and not exclusive. The Executive's or the Company's failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason or the Company's right to terminate the Executive's employment for Cause, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

(h)Indemnification. The Executive shall be entitled to indemnification (and the advancement of expenses) in connection with a litigation or proceeding arising out of the Executive's acting as Chief Executive Officer of CKI, or Executive Chairman of CKI or an employee, officer or director of the Company (or, to the extent such service is requested by the Company, any of its affiliates), to the maximum extent permitted by applicable law; provided, however, that in the event that it is finally determined that the Executive is not entitled to indemnification, the Executive shall promptly return any advanced amounts to the Company. In addition, the Executive shall be entitled to liability insurance coverage pursuant to a Company-purchased directors' and officers' liability insurance policy on the same basis as other directors and officers of the Company.

(i)Legal Fees. The Company agrees to reimburse the Executive (within 10 days following the Company's receipt of an invoice from the Executive), at any time from the Effective Date of this Agreement through the Executive's remaining lifetime (or, if longer, through the 20th anniversary of the Effective Date) to the fullest extent permitted by law, for all legal fees and expenses that the Executive may reasonably incur as a result of any contest by the Company, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), provided, that the Executive prevails with respect to at least one substantive issue in dispute. In order to comply with Section 409A, in no event shall the payments by the Company under this Section 7(i) be made later than the end of the calendar year next following the calendar year in which any such contest is finally resolved, provided, that the Executive shall have submitted an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such 

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contest is finally resolved. The amount of such legal fees and expenses that the Company is obligated to pay in any given calendar year shall not affect the legal fees and expenses that the Company is obligated to pay in any other calendar year, and the Executive's right to have the Company pay such legal fees and expenses may not be liquidated or exchanged for any other benefit.

(j)Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.

(k)Withholding. Any payments provided for herein shall be reduced by any amounts required to be withheld by the Company from time to time under applicable Federal, State or local employment or income tax laws or similar statutes or other provisions of law then in effect.

(l)Section 409A of the Code. The provisions of this Agreement and any payments made herein are intended to comply with, and should be interpreted consistent with, the requirements of Section 409A of the Code and any related regulations or other effective guidance promulgated thereunder (collectively, “Section 409A”). The time or schedule of a payment to which the Executive is entitled under this Agreement may be accelerated at any time that this Agreement fails to meet the requirements of Section 409A and any such payment will be limited to the amount required to be included in the Executive's income as a result of the failure to comply with Section 409A.

(m)Entire Agreement. This Agreement contains the entire understanding, and cancels and supersedes all prior agreements, including, without limitation, the Existing Agreement, and any agreement in principle or oral statement, letter of intent, statement of understanding or guidelines of the parties hereto with respect to the subject matter hereof, excluding the Plans or the plans referred to in Section 2(c), the terms and conditions of which shall not be affected hereby. This Agreement may be amended, supplemented or otherwise modified only by a written document executed by each of the parties hereto or their respective successors or assigns. The Executive acknowledges that he is entering into this Agreement of his own free will and accord with no duress, and that he has read this Agreement and understands it and its legal consequences.

(n)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on July 23, 2013.
    
	
		
	 
	CALVIN KLEIN, INC.

	By:
	   /s/ Mark D. Fischer

	Name:
	Mark D. Fischer

	Title:
	Executive Vice President

	 
	 

	 
	 

	 
	   /s/ Paul Thomas Murry

	 
	Paul Thomas Murry

  

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                                                                                                                     EXHIBIT A 
RELEASE 
TO ALL TO WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW THAT PAUL THOMAS MURRY (the “Releasor”), on behalf of himself and his heirs, executors, administrators and legal representatives, in consideration of the severance to be paid and other benefits provided pursuant to Section [3(b)][3(f)] of the Third Amended and Restated Employment Agreement between the Releasor and CALVIN KLEIN, INC., dated as of June [__], 2013 (as the same may have been heretofore amended, the “Agreement”), hereby irrevocably, unconditionally, generally and forever releases and discharges Calvin Klein, Inc., its parent corporation, PVH Corp., and their respective current and former affiliates (collectively, the “Company”), each of their respective current and former officers, directors, employees, agents, representatives and advisors and their respective heirs, executors, administrators, legal representatives, receivers, affiliates, beneficial owners, successors and assigns (collectively, the “Releasees”), from, and hereby waives and settles, any and all, actions, causes of action, suits, debts, promises, damages, or any liability, claims or demands, known or unknown and of any nature whatsoever and which the Releasor ever had, now has or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date of this Release arising directly or indirectly pursuant to or out of his employment with the Company or the termination of such employment (collectively, “Claims”), including, without limitation, any Claims (i) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship and/or worker or workplace protection and/or specifically prohibit discrimination based upon age, race, religion, gender, national origin, disability, sexual orientation or any other unlawful bases, including, without limitation, the Age Discrimination in Employment Act of 1967, as amended, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights Acts of 1866 and 1871, as amended, the Americans with Disabilities Act of 1990, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Family and Medical Leave Act of 1993, as amended, the New Jersey Law Against Discrimination, as amended, the New York State and New York City Human Rights Laws, as amended, the laws of the States of New York and New Jersey, the City of New York and Somerset County, New Jersey relating to discrimination, as amended, and any and all applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes; (ii) arising under or pursuant to any contract, express or implied, written or oral, including, without limitation, the Agreement; (iii) for wrongful dismissal or termination of employment; (iv) for tort, tortious or harassing conduct, infliction of mental or emotional distress, fraud, libel or slander; and (v) for damages, including, without limitation, punitive or compensatory damages or for attorneys' fees, expenses, costs, wages, injunctive or equitable relief. This Release shall not apply to any claim that the Releasor may have for a breach of Section [3(b)] [3(f)], 5(e), 7(h) or 7(i) of the Agreement or any plan or program referred to in Section 2(b) or 2(c) of the Agreement. 
The Releasor agrees not to file, assert or commence any Claims against any Releasee with any federal, state or local court or any administrative or regulatory agency or body. Notwithstanding the foregoing, nothing herein shall constitute a release by the Releasor of a claim to the extent such claim is not waivable as a matter of applicable law. Without limiting the generality of the foregoing, nothing herein shall affect any right to file an administrative charge with the Equal Employment Opportunity Commission, subject to the restriction that if any such charge is filed, the Releasor agrees not to violate the confidentiality provisions of the Agreement and further agrees and covenants that should he or any other person, organization, or other entity file, charge, claim, sue or cause or permit to be filed any charge with the Equal Employment Opportunity Commission, civil action, suit or legal proceeding against the Releasees (or any of them) involving any matter occurring at any time in the past, the Releasor will not seek or accept any personal relief (including, but not limited to, a monetary award, recovery, relief or settlement) in such charge, civil action, suit or proceeding.

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The Releasor represents and warrants that there has been no assignment or other transfer of any interest in any Claim which the Releasor may have against the Releasees, or any of them, and the Releasor agrees to indemnify and hold the Releasees, and each of them, harmless from any Claims, or other liability, demands, damages, costs, expenses and attorneys' fees incurred by the Releasees, or any of them, as a result of any person asserting any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the Releasor under this indemnity. 
The Releasor agrees that if he hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any Claim released hereunder, or in any manner asserts against the Releasees, or any of them, any Claim released hereunder, then the Releasor shall pay to the Releasees, and each of them, in addition to any other damages caused to the Releasees thereby, all attorneys' fees incurred by the Releasees in defending or otherwise responding to said suit or Claim. 
The Releasor hereby waives any right to, and agrees not to, seek reinstatement of his employment with the Company or any Releasee. The Releasor acknowledges that the amounts to be paid to him under Section [3(b)][3(f)] of the Agreement do not include any benefit, monetary or otherwise, which the Releasor has earned or accrued, or to which he is already entitled. 
The Releasor acknowledges that he was advised by the Company to consult with his attorney concerning the waivers contained in this Release, that he has consulted with counsel, and that the waivers the Releasor has made herein are knowing, conscious and with full appreciation that he is forever foreclosed from pursuing any of the rights so waived. The Releasor has a period of 21 days from the date on which a copy of this Release has been delivered to him to consider whether to sign it. In addition, in the event that the Releasor elects to sign and return to PVH Corp. a copy of this Release, the Releasor has a period of seven days (the “Revocation Period”) following the date of such return to revoke this Release, which revocation must be in writing and delivered to PVH Corp., 200 Madison Avenue, New York, New York 10016, Attention: General Counsel, within the Revocation Period. This Release, and the Releasor's right to receive the amounts to be paid to him under Section [3(b)] [3(f)(ii)], shall not be effective or enforceable until the expiration of the Revocation Period without the Releasor's exercise of his right of revocation.
This Release shall not be amended, supplemented or otherwise modified in any way except in a writing signed by the Releasor and PVH Corp.
This Release shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, without reference to its principles of conflicts of law.

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IN WITNESS WHEREOF, the Releasor has caused this Release to be executed as of ___________________, 20__.

__________________________________________
Paul Thomas Murry

SWORN TO AND SUBSCRIBED
BEFORE ME THIS ____ DAY OF
____________________, 20__.

                    
Notary Public

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