Common use of Take or Pay Clause in Contracts

Take or Pay. (a) The Parties agree that the Purchaser will purchase and accept from the Seller in each Delivery Year the Annual Base Quantity specified for that Delivery Year in Schedule 2 (Annual Base Quantities) (as amended in accordance with Clause 7.2 (Annual Base Quantity Revision) above). (b) In the event that the Purchaser fails to accept (or indicates to the Seller that it intends not to accept) delivery of a Shipment which has been scheduled as part of the Annual Operational Delivery Schedule or has otherwise been ordered and scheduled in accordance with Clause 8.3 (Option Quantities) (but which has not been removed from the Annual Operational Delivery Schedule under Clause 12.3(c) or (d) (Variations to Delivery Schedules)), or the Seller elects to cause title to revert to the Seller in accordance with Clause 14.5(b) other than as a result of: (i) a valid full or partial rejection of that Shipment as contemplated under Clause 10.6 (Rejection); or (ii) Force Majeure as contemplated under Clause 15.4 (Effect of Force Majeure), then the quantity of the relevant Shipment not taken shall be the Take or Pay Shortfall provided that, for the avoidance of doubt, volumes of Biomass in relation to which the Storage Option is implemented shall not constitute a Take or Pay Shortfall volume. (c) In relation to any Take or Pay Shortfall: (i) the Seller shall use reasonable endeavours to sell the Take or Pay Shortfall at the best price reasonably obtainable in the market after taking into account any potential buyers of biomass notified to the Seller by the Purchaser; and (ii) the Seller will calculate the Difference Price in relation to the Take or Pay Shortfall which shall be equal to: (A) the amount of the Shipment Value for that Take or Pay Shortfall (assuming a figure of V (as defined in Clause 14.1 (Shipment Value)) equal to seventeen (17) for the first Shipment and thereafter the weighted average Net Calorific Value of Shipments delivered over the prior 365-day period); plus (B) any reasonable and documented additional direct losses, costs or expenses incurred by the Seller in relation to the Purchaser failing to take delivery of the Take or Pay Shortfall (including additional transportation charges, transaction costs associated with unwinding agreements to hedge foreign exchange risk, legal costs, deadfreight, storage costs, handling costs, Taxes or duties, and interest), and actual damages and expenses suffered or incurred by the Seller as a result of entering into any agreements relating to that Take or Pay Shortfall; less (C) the Market Price for that Take or Pay Shortfall. If the Difference Price as calculated under this paragraph (ii) would be a negative number, the Difference Price shall be deemed to be zero for that Take or Pay Shortfall. The Seller will promptly notify the Difference Price to the Purchaser with reasonable supporting documentation. (iii) If the Difference Price calculated under paragraph (ii) above is a positive number an amount equal to the Difference Price (less any amount actually paid by the Purchaser in relation to that Take or Pay Shortfall in accordance with Clause 14.2 (Payment)) shall be payable by the Purchaser to the Seller in accordance with Clause 14.3 (Other Invoices).

Take or Pay. (a) The Parties agree Take-Or-Pay Quantity is the minimum amount of Gas that the Purchaser will purchase Buyer must either take, or pay for if not taken, during each Contractual Month. 5.1 In any Contractual Month, the Buyer shall be excused from any obligation to take delivery of a quantity of Gas (“Buyer’s Excused Quantities”) equal to the sum over all the Days in the Contractual Month of: (i) any quantities of natural Gas not taken by the Buyer due to Force Majeure affecting the Buyer, including without limitation any quantities of Gas that cannot be delivered for the reasons set forth in Point 12.2(d) whether or not Force Majeure was declared by the Buyer; plus (ii) any quantities of Gas that the Buyer schedules for delivery and accept from the Seller Sellers fail to deliver for any reason (including for the reasons of Scheduled Maintenance set forth in each Delivery Year Point 4.3); plus (iii) any Gas properly rejected by the Annual Base Quantity specified Buyer or the Transporter at the Receiving Point for not satisfying the quality specifications; plus (iv) any quantities of Gas that Delivery Year in Schedule 2 (Annual Base Quantities) (as amended the Buyer does not require due to Scheduled Maintenance in accordance with Clause 7.2 (Annual Base Quantity Revision) above)Point 4.4. (b) In the event that the Purchaser fails to accept (or indicates to the Seller that it intends not to accept) delivery of a Shipment which has been scheduled as part of the Annual Operational Delivery Schedule or has otherwise been ordered and scheduled in accordance with Clause 8.3 (Option Quantities) (but which has not been removed from the Annual Operational Delivery Schedule under Clause 12.3(c) or (d) (Variations to Delivery Schedules)), or the Seller elects to cause title to revert to the Seller in accordance with Clause 14.5(b) other than as a result of: (i) a valid full or partial rejection of that Shipment as contemplated under Clause 10.6 (Rejection); or (ii) Force Majeure as contemplated under Clause 15.4 (Effect of Force Majeure), then the quantity of the relevant Shipment not taken 5.2 The TOPQ for any Contractual Month shall be the Take or Pay Shortfall provided that, for the avoidance of doubt, volumes of Biomass in relation to which the Storage Option is implemented shall not constitute a Take or Pay Shortfall volume. (c) In relation to any Take or Pay Shortfall: equal: (i) the Seller shall use reasonable endeavours to sell the Take or Pay Shortfall at the best price reasonably obtainable in the market after taking into account any potential buyers product of biomass notified to the Seller by the Purchaser; and (ii) the Seller will calculate the Difference Price in relation to the Take or Pay Shortfall which shall be equal to: (A) the amount DCQ designated by the Buyer for the applicable Contractual Year multiplied by (B) the ▇▇▇▇, multiplied by (C) the number of Days in such Contractual Month; less (ii) any quantities of Gas that are Buyer’s Excused Quantities for such Contractual Month. 5.3 In any Contractual Month, if the Buyer takes a total quantity of Gas in such Contractual Month that is less than the TOPQ for such Contractual Month, then the Buyer must pay to the Sellers a take-or-pay charge equal to the product of: (i) the Gas Sale Price multiplied by (ii) a quantity of Gas (“Buyer’s Deferred Quantities”) equal to (A) the TOPQ for such Contractual Month, less (B) the quantity of Gas actually taken in such Contractual Month. 5.4 The Buyer is entitled to recover, within the DQRP, the Buyer’s Deferred Quantities following the sequential order in which they occurred. This recovery shall be effected with the quantities of Gas taken during the DQRP in excess of the Shipment Value TOPQ in effect during such DQRP, provided that such quantities in excess of the TOPQ may not exceed the MDCQ without the consent of the Sellers. If on expiry of this Contract there should remain Buyer’s Deferred Quantities pending recovery, the Buyer may recover the corresponding quantities after such expiry, within a maximum period of twelve (12) months, as may be extended by such period of time (if any) during which the Sellers fail to deliver the Deferred Quantities (as requested by the Buyer) for reasons other than Force Majeure. 5.5 At any time that Take the most recently determined weekly YUP closes below one hundred and twenty-five Dollars (US$125) per tonne, the Buyer shall have the right to suspend the application of a take or Pay Shortfall pay charge by giving the Sellers not less than seven (assuming 7) Days’ prior written notice (a figure “Suspended TOPQ”). After such written notice is given, a Suspended TOPQ shah be in effect on each Day from the Day set forth in such notice until the earlier of V (a) seven (7) Days after the Day on which the Buyer gives the Sellers written notice that it is terminating the Suspended TOPQ and (b) seven (7) Days after the most recently determined YUP closes above one hundred and twenty-five Dollars (US$125) per tonne. The volume of Gas not taken by the Buyer during a Suspended TOPQ can be used freely by the Sellers. Notwithstanding anything to the contrary contained herein, in the event Suspended TOPQs are in effect for more than three hundred and sixty-five (365) Days, in the aggregate, the Sellers shall have the right to terminate this Contract by giving the Buyer at least thirty (30) Days’ prior written notice. For the purposes of this Point 5.5, the TOPQ for any Contractual Month in which a Suspended TOPQ is in effect shall equal: (i) the product of (A) the DCQ designated by the Buyer for the applicable Contractual Year multiplied by (B) the ▇▇▇▇ designated by the Buyer for the term of this Contract, multiplied by (C) the number of Days in such Contractual Month other than Days in Which a Suspended TOPQ was in effect; less (ii) any quantity of Gas that are the Buyer’s Excused Quantities for such Contractual Month. 5.6 Subject to Point 19.6, if the Buyer fails to comply with its obligations to take Gas from the Sellers in accordance with this Contract and such failure is not otherwise excused under this Contract, (a) the Sellers’ remedies will be limited solely to those described in this Article Five and no additional penalties will apply; (b) the Buyer shall not be responsible for any Consequential Damages (as defined in Clause 14.1 (Shipment Value)) equal to seventeen (17) for the first Shipment and thereafter the weighted average Net Calorific Value of Shipments delivered over the prior 365-day periodPoint 19.6); plus and (Bc) the Sellers hereby waive any reasonable and documented additional direct losses, costs or expenses incurred by claim of indemnity that may arise from the Seller in relation to the Purchaser failing Buyer’s failure to take delivery the TOPQ of the Take or Pay Shortfall (including additional transportation charges, transaction costs associated with unwinding agreements to hedge foreign exchange risk, legal costs, deadfreight, storage costs, handling costs, Taxes or duties, and interest), and actual damages and expenses suffered or incurred by the Seller as a result of entering into any agreements relating to that Take or Pay Shortfall; less (C) the Market Price for that Take or Pay Shortfall. If the Difference Price as calculated under this paragraph (ii) would be a negative number, the Difference Price shall be deemed to be zero for that Take or Pay Shortfall. The Seller will promptly notify the Difference Price to the Purchaser with reasonable supporting documentation. (iii) If the Difference Price calculated under paragraph (ii) above is a positive number an amount equal to the Difference Price (less any amount actually paid by the Purchaser in relation to that Take or Pay Shortfall Gas in accordance with Clause 14.2 (Payment)) shall be payable by the Purchaser to the Seller in accordance with Clause 14.3 (Other Invoices)this Article 5.

Take or Pay. 16.1 It is recognized that (a) The Parties agree Seller is making a considerable financial investment in the capital cost of the LNG Plant and a financial return is required and Seller is relying solely on Buyer’s commitments and obligations under this Sales Agreement for such return and that the Purchaser will purchase and accept from the Seller in each Delivery Year the Annual Base Quantity specified for that Delivery Year in Schedule 2 (Annual Base Quantities) (as amended in accordance with Clause 7.2 (Annual Base Quantity Revision) above). is granting an exclusive marketing arrangement to Buyer pursuant to this Sales Agreement; (b) In [***] Confidential portions of this document have been redacted and filed separately with the event that Commission. Seller would not undertake the Purchaser fails cost of building the LNG Plant were it not for Buyer’s agreement as set forth herein to accept (or indicates agree to purchase the entire Plant Capacity. Therefore, Buyer agrees to pay Seller that it intends not to accept) delivery of a Shipment which has been scheduled as part of the Annual Operational Delivery Schedule or has otherwise been ordered and scheduled in accordance with Clause 8.3 (Option Quantities) (but which has not been removed from the Annual Operational Delivery Schedule under Clause 12.3(c) or (d) (Variations to Delivery Schedules)), or the Seller elects to cause title to revert to the Seller in accordance with Clause 14.5(b) other than as a result of: (i) a valid full or partial rejection of that Shipment as contemplated under Clause 10.6 (Rejection); or (ii) Force Majeure as contemplated under Clause 15.4 (Effect of Force Majeure), then the quantity of the relevant Shipment not taken shall be for the Take or Pay Shortfall provided that, for the avoidance Monthly Quantity regardless of doubt, volumes Buyer’s ability to take Delivery of Biomass in relation to which the Storage Option is implemented shall not constitute a Take or Pay Shortfall volume. (c) In relation to any Take or Pay Shortfall: (i) the Seller shall use reasonable endeavours to sell the Take or Pay Shortfall at Monthly Quantity of LNG and thus, the best price reasonably obtainable in Market Risk is fully assumed by Buyer by its execution of this Sales Agreement. In the market after taking into account event Buyer for any potential buyers of biomass notified to the Seller by the Purchaser; and (ii) the Seller will calculate the Difference Price in relation to the Take or Pay Shortfall which shall be equal to: (A) the amount of the Shipment Value for that Take or Pay Shortfall (assuming a figure of V (as defined in Clause 14.1 (Shipment Value)) equal to seventeen (17) for the first Shipment and thereafter the weighted average Net Calorific Value of Shipments delivered over the prior 365-day period); plus (B) any reasonable and documented additional direct lossesreason, costs or expenses incurred by the Seller in relation to the Purchaser failing other than Force Majeure, fails to take delivery of the Take or Pay Shortfall (including additional transportation chargesMonthly Quantity of LNG from Seller, transaction costs associated with unwinding agreements to hedge foreign exchange risk, legal costs, deadfreight, storage costs, handling costs, Taxes or duties, and interest), and actual damages and expenses suffered or incurred by where the Seller as a result of entering into any agreements relating to that Take or Pay Shortfall; less (C) the Market Price for that Take or Pay Shortfall. If the Difference Price as calculated under this paragraph (ii) would be a negative number, the Difference Price shall be deemed Plant Capacity was available to be zero for that Take or Pay Shortfall. The taken, Buyer will pay Seller will promptly notify the Difference Price to the Purchaser with reasonable supporting documentation. (iii) If the Difference Price calculated under paragraph (ii) above is a positive number an amount equal to (1) the Difference Price (less any amount actually paid Liquefaction Fee multiplied by the Purchaser in relation to that Take or Pay Shortfall Monthly Quantity, (2) the actual demand charge and other fixed, monthly charges from APS, and (3) any unavoidable Gas Costs related to the shortfall of LNG gallons taken below the Take or Pay Monthly Quantity. Buyer agrees that the Take or Pay Monthly Quantity for each Month shall be equal to the number of days in such Month multiplied by 45,000 GPD (the “Take or Pay Monthly Quantity”). By way of example, if a particular Month contains thirty (30) days, the Take or Pay Monthly Quantity for such Month would be (30 days X 45,000 GPD) or 1,350,000 Gallons. Take or Pay shall apply when the LNG Plant is not experiencing a Seller’s Shut Down, and the Plant Capacity is available to produce LNG and Buyer does not take Delivery of its Take or Pay Monthly Quantity for reasons other than a Force Majeure, Buyer must pay Seller as if Buyer had taken Delivery of the Take or Pay Monthly Quantity of LNG, subject to the provisions of this Article 16. 16.2 Notwithstanding Article 16.1 above, at times when the quality of LNG delivered by Seller does not meet the specifications set forth in Article 6, Buyer shall only be required to purchase and take delivery of fifty percent (50%) of the Take or Pay Monthly Quantity during such period, but in no case shall Buyer be required to take Delivery of LNG that is less than 92 mole percent methane and not more than 4 mole percent ethane but otherwise meets the specifications listed in Article 6. In such event, Seller shall have the right to sell the quantities of the off specification LNG not purchased by Buyer to others. Buyer agrees to use its commercially reasonable efforts to market all of the Plant Capacity during such upset periods and Seller agrees to use commercially reasonable efforts to resolve the composition issue and deliver LNG meeting the specifications set forth in Article 6.1 as soon as practicable. Both Parties recognize that the composition of the Feedstock Gas might vary from time to time and there is a remote chance that the Feedstock Gas may be too ethane rich for the Plant to remove it to less than the one mole percent (1%) level. 16.3 Notwithstanding Article 16.1 above, in the event of a Seller’s Shut Down, Buyer is relieved from any Take or Pay liability during the actual period of the Seller’s Shut Down or a Force Majeure event and during the first twenty-four (24) hours after the LNG Plant is restarted. 16.4 In the event that the Plant Capacity is less than 50,000 GPD as determined in accordance with Clause 14.2 (Payment)) shall be payable Article 5.4 or as agreed to by the Purchaser to Parties, the Seller Take or Pay Quantity of 45,000 GPD in accordance with Clause 14.3 (Other Invoices)Article 16.1 will be reduced on a pro rata basis.