FIXED PRICE TURNKEY AGREEMENT for the ENGINEERING, PROCUREMENT AND CONSTRUCTION OF TRAINS 1 AND 2 of the RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY by and between RIO GRANDE LNG, LLC as Owner and BECHTEL OIL, GAS AND CHEMICALS, INC. as Contractor...

Exhibit 10.7

 

CERTAIN INFORMATION OF THIS DOCUMENT HAS BEEN REDACTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM IF PUBLICLY DISCLOSED. INFORMATION THAT WAS OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE ▇▇▇▇ “[***].”

FIXED PRICE TURNKEY AGREEMENT

 

for the

 

ENGINEERING, PROCUREMENT AND CONSTRUCTION

 

OF TRAINS 1 AND 2

 

of the

 

RIO GRANDE NATURAL GAS LIQUEFACTION FACILITY

 

by and between

 

RIO GRANDE LNG, LLC

 

as Owner

 

and

 

▇▇▇▇▇▇▇ OIL, GAS AND CHEMICALS, INC.

 

as Contractor

 

Dated as of the 24th Day of May, 2019

 

 

 

 

TABLE OF CONTENTS

 

 

LIST OF ATTACHMENTS AND SCHEDULES

 

 

 

 

 

 

ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT

THIS ENGINEERING, PROCUREMENT AND CONSTRUCTION AGREEMENT (this “Agreement”), dated the 24th Day of May, 2019 (the “Effective Date”), is entered into by and between Rio Grande LNG, LLC a limited liability company organized under the laws of Texas (“Owner”), and ▇▇▇▇▇▇▇ Oil, Gas and Chemicals, Inc., a corporation organized under the laws of Delaware (hereinafter referred to as “Contractor”), each sometimes referred to individually herein as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Owner desires to enter into an agreement with Contractor to perform the engineering, procurement, construction, pre-commissioning, commissioning, start-up and testing of a greenfield turnkey liquefied natural gas (“LNG”) liquefaction facility and export terminal, consisting of two (2) liquefaction units, each having an aggregate nominal LNG production capacity of up to approximately 5.87 million metric tonnes per annum (“mtpa”) and associated facilities, for the purpose of liquefying natural gas to form LNG, including feed gas treatment facilities, and all systems and infrastructure, including temporary facilities, from the feed gas pipeline tie-in to storage and marine facilities and the loading arms, and all related appurtenances thereto (the “Facility,” as defined in greater detail herein) located at a site south of the Brownsville-Port ▇▇▇▇▇▇ Highway and north of the Brownsville Ship Channel in Cameron County near Brownsville, Texas (the “Site,” as defined in greater detail herein); and

WHEREAS, Contractor, itself or through its vendors, suppliers, and subcontractors, desires to perform the foregoing engineering, procurement, construction, pre-commissioning, commissioning, start-up and testing on a fixed price turnkey basis (which fixed price is separated for tax purposes);

NOW THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1
DEFINITIONS

1.1        Definitions.  In addition to other defined terms used throughout this Agreement, when used herein, the following capitalized terms have the meanings specified in this Section 1.1.

“AAA Rules” has the meaning set forth in Section 18.2.

“Abandonment” or “Abandon”  means, prior to the acceptance by Owner of the Substantial Completion Certificates for both Trains, Contractor’s cessation of all or substantially all of the Work (unless Contractor is entitled to stop, suspend or terminate the performance of the Work under the Agreement).

“Acceleration Schedule” has the meaning set forth in Section 5.6.

“Additional Work Options” has the meaning set forth in Section 7.1B.3.

“Affiliate” means (i) any Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with a Party, and (ii) any Person that, directly or indirectly, is the beneficial owner of fifty percent (50%) or more of any class of equity securities of, or other ownership interests in, a Party or of which the Party is directly or indirectly the owner of fifty percent (50%) or more of any class of equity securities or other ownership interests.  For purposes of this definition, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or otherwise.

“Agreement” means this Agreement for the performance of the Work (including all Attachments and Schedules attached hereto), as it may be amended from time to time in accordance with this Agreement.

“Aggregate Cap” has the meaning set forth in Section 20.1.

“Aggregate Equipment Price” has the meaning set forth in Section 7.1B.1.

“Aggregate Labor and Skills Price” has the meaning set forth in Section 7.1B.2.

“APCI” means Air Products and Chemicals, Inc., a Subcontractor providing certain Equipment and engineering services related to the wound coil aluminum heat exchangers LNG liquefaction units pursuant to the equipment purchase agreement between Contractor and Air Products and Chemicals, Inc.

“APCI License” has the meaning set forth in Section 10.7A.

“APCI Assignment Agreement” has the meaning set forth in Section 10.7A.

“Appellate Rules” has the meaning set forth in Section 18.2.

“Applicable Codes and Standards” means any and all codes, standards or requirements set forth in Attachment A) or in any Applicable Law, which codes, standards and requirements shall govern Contractor’s performance of the Work, as provided herein.  In the event of an inconsistency or conflict between any of the Applicable Codes and Standards, the highest performance standard as contemplated therein shall govern Contractor’s performance under this Agreement.

“Applicable Law” means all laws, statutes, ordinances, certifications, orders, (including presidential orders), decrees, proclamations, injunctions, licenses, Permits, approvals, rules and regulations, including any conditions thereto, of any Governmental Instrumentality having jurisdiction over any Party, all or any portion of the Site or the Facility or performance of all or any portion of the Work or the operation of the Facility or the Train 3 Liquefaction Facility, or other legislative or administrative action of a Governmental Instrumentality having jurisdiction over all or any portion of the Site or the Project or

performance of all or any portion of the Work or the operation of the Project, or a final decree, judgment or order of a court which relates to the performance of Work hereunder or the interpretation or application of this Agreement, including (i) any and all Permits, (ii) any Applicable Codes and Standards set forth in Applicable Law, (iii) tariffs, quotas, and duties, and (iv) Applicable Law related to (y) conservation, improvement, protection, pollution, contamination or remediation of the environment or (z) Hazardous Materials or any handling, storage, release or other disposition of Hazardous Materials.

“approval” and “consent” means, unless specified otherwise herein, written approval and written consent.  Wherever in this Agreement a provision is made for the giving or issuing of any consent by a Party, unless otherwise specified, such consent shall be in writing and the words “consent”, “approve”, “accept” or “certify” (or words to similar effect) are to be construed accordingly.

“Authorized Documents” means such documents, drawings, and specifications provided by Owner to Contractor pursuant to the ITB Agreement, which Contractor has modified and resubmitted to Owner as part of the FEED verification process performed by Contractor prior to the Effective Date.

“BASF” means BASF SE.

“BASF License” has the meaning set forth in Section 10.7B.

“Basis of Design” means the basis of design of the Facility as set forth in Schedule A-2.

“BHGE” means ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.

“Books and Records” has the meaning set forth in Section 3.13A.

“Business Day” means every Day other than a Saturday, a Sunday or a Day that is an official holiday for employees of the federal government of the United States of America.

“CAD” has the meaning set forth in Section 3.3E.

“Capital Spare Parts” means those capital spare parts listed in Attachment W for use after Substantial Completion which are to be included in the Work and the Contract Price, as further set forth in Section 3.4B.

“Change Directive” is a written order issued by Owner to Contractor after the execution of this Agreement in the form of Schedule D-2 that requires Contractor to commence and execute an addition to, omission from, deletion from, suspension of, or any other modification or adjustment to the requirements of this Agreement, the Work or any Changed Criteria.

“Change Order” means a written instrument signed by both Parties after the execution of this Agreement in the form of Schedule D-1, that authorizes an addition to, deletion from, suspension of, or any other modification or adjustment to the requirements of this Agreement, including an addition to, deletion from or suspension of the Work or any

modification or adjustment to any Changed Criteria.  Owner and Contractor are entitled to a Change Order in accordance with ARTICLE 6.

“Changed Criteria” means the Contract Price, the Key Dates, the Basis of Design, the Payment Schedule, any of the Minimum Acceptance Criteria or Performance Guarantees, or any other obligation or potential liability of Contractor under the Agreement.

“Changes in Law” means any amendment, modification, superseding act, deletion, addition or change in or to Applicable Law (other than tariffs, quotas, and duties, which are addressed separately in Attachment FF), including changes to Tax laws that directly impact the Work (but excluding changes to Tax laws where such Taxes are based upon Contractor’s revenue, income, profits/losses or cost of finance)  that occurs and takes effect after the Effective Date.  Change in Law shall include any official change in the interpretation or application of Applicable Law (including Applicable Codes and Standards set forth in Applicable Law) that is not due to an act or omission of Contractor or its Subcontractors or Sub-subcontractors, provided that such Governmental Instrumentality making such official change expressly states in writing that it is officially changing the interpretation or applicable of such Applicable Law.

“Change in U.S. Tariffs or Duties” has the meaning set forth in Attachment FF.

“Collateral Agent” has the meaning set forth in Attachment O.

“Commissioning” means, with respect to the applicable system or subsystem of the Equipment, all activities required subsequent to achieving Mechanical Completion of such system or subsystem and prior to RFSU, including the introduction of inert gas to oxygen free the systems and subsystems, commencement of the drying out process and tightness tests performed with inert gas at operating pressures, as further set forth in Attachment A and the performance and completion of the activities or the Commissioning checklists agreed to by Owner and Contractor.

“Common Systems” means those portions of the Facility that will be utilized by both Train 1 and Train 2, including, for example, certain utilities, instruments, control systems and piping.  The applicable Common Systems will be designed, procured and constructed such that both Train 1 and Train 2 may be operated simultaneously or individually at the design conditions set forth in this Agreement.  The Common Systems are set forth in Attachment A.

“Competitors of Contractor” has the meaning set forth in Section 19.2.

“Confidential Information” has the meaning set forth in Section 19.3.

“[***]”.

“Consequential Damages” has the meaning set forth in Section 20.4.

“Construction Equipment” means the equipment, machinery, temporary structures, scaffolding, materials, tools, supplies and systems, purchased, owned, rented or leased by

Contractor or its Subcontractors or Sub-subcontractors for use in accomplishing the Work, but not intended for incorporation into the Facility.

“Contract Price” has the meaning set forth in Section 7.1.

“Contractor” has the meaning set forth in the preamble.

“Contractor’s Change Notice” has the meaning set forth in Section 6.2B.

“Contractor Indemnified Parties” means (i) Contractor and its Affiliates, and (ii) the respective officers, directors, agents, members, shareholders, invitees, representatives and employees of each Person specified in clause (i) above.  A “Contractor Indemnified Party” means any one of the Contractor Indemnified Parties.

“Contractor Permits” has the meaning set forth in Section 3.12A.

“Contractor Representative” means that Person or Persons designated by Contractor in Section 2.2B, or in a notice to Owner pursuant to the process in Section 2.2A, who shall have complete authority to act on behalf of Contractor on all matters pertaining to this Agreement or the Work, including giving instructions and making changes in the Work, except for any limitations specified in such notice.

“Contractor’s Confidential Information” has the meaning set forth in Section 19.2.

“Contractor’s Intellectual Property” has the meaning set forth in Section 10.2.

“[***]”.

“Corrective Work” has the meaning set forth in Section 12.3.

“CPM Schedule” has the meaning set forth in Section 5.4A.

“Cure Period” has the meaning set forth in Section 16.1C.

“Day” means a calendar day.

“Default” has the meaning set forth in Section 16.1A.

“Defect” or “Defective” has the meaning set forth in Section 12.1A.

“Defect Correction Period” means:

(i)       with respect to the Train 1 Work (except for Structural Work described in clause (iii) below), the period commencing upon Substantial Completion of Train 1 and ending eighteen (18) months thereafter, as may be extended in accordance with Sections 12.3C and 12.3D;

(ii)       with respect to the Train 2 Work (except for Structural Work described in this clause (iii) below), the period commencing upon Substantial

Completion of Train 2 and ending eighteen (18) months thereafter, as may be extended in accordance with Sections 12.3C and 12.3D; and

(iii)      with respect to Structural Work, the period commencing upon Substantial Completion of Train 2 and ending three (3) years thereafter.

“Delay Liquidated Damages” means one, a combination of, or all of the Train 1 Delay Liquidated Damages, Train 2 Delay Liquidated Damages and RLFC Delay Liquidated Damages as the context requires.

“DFCD Date for Train 1” has the meaning set forth in Section 13.3B.

“DFCD Date for Train 2” has the meaning set forth in Section 13.3B.

“Disclosing Party” has the meaning set forth in Section 19.3.

“Dispute” has the meaning set forth in Section 18.1.

“Dispute Notice” has the meaning set forth in Section 18.1.

“Drawings” means the graphic and pictorial documents (in written or electronic format) showing the design, location and dimensions of the Work, generally including plans, elevations, sections, details, schedules and diagrams, which are prepared as a part of and during the performance of the Work.

“Early Completion Bonus” means one, some, or all of the bonuses referred to in Sections 13.3A and 13.3B, as the context requires.

“Early Completion Bonus for Train 1” has the meaning set forth in Section 13.3A.

“Early Completion Bonus for Train 2” has the meaning set forth in Section 13.3A.

“Earned Value” has the meaning set forth in Section 7.2A.

“Earned Value Contract Price Breakdown” has the meaning set forth in Section 7.2A.

“Effective Date” has the meaning set forth in the preamble.

“Equipment” means all equipment, materials, supplies and systems required for the completion of and incorporation into the Facility.  Equipment excludes Construction Equipment.  Notwithstanding the foregoing, equipment required to be engineered, procured or constructed under the Train 3 EPC Agreement shall not be considered Equipment under this Agreement.

“Expanded Facility” means the additional liquefaction units (beyond those included in the Facility and the Train 3 Liquefaction Facility) and associated facilities at the Site, to achieve a total of up to twenty-seven (27) mtpa.

“Facility” has the meaning set forth in the recitals.

“FCPA” has the meaning set forth in Section 21.10.

“FERC” means the Federal Energy Regulatory Commission.

“FERC Authorization” means a written authorization issued from time to time by the FERC director of the Office of Energy Projects, authorizing Owner to commence construction of the Facility, or take such other actions with respect to the Facility as set forth therein.

“Final Completion” means that all Work and all other obligations under this Agreement (except for that Work and obligations that survive the termination or expiration of this Agreement, including obligations for Warranties, correction of Defective Work and those covered by Section 11.10), are fully and completely performed in accordance with the terms of this Agreement, including: (i) the achievement of Substantial Completion of all Trains; (ii) the achievement of all Performance Guarantees or payment of all Performance Liquidated Damages due and owing; (iii) the completion of all Punchlist items; (iv) delivery by Contractor to Owner of a fully executed Final Lien and Claim Waiver in the form of Schedules K-5 and K-6; (v) delivery by Contractor to Owner of all documentation required to be delivered under this Agreement, including Record As-Built Drawings and Specifications, test reports and the final operations and maintenance manuals for the Facility; (vi) delivery to Owner, in content and form reasonably satisfactory to Owner, copies of all required Subcontracts, written assignments of Subcontractor warranties and a list of the names, addresses and telephone numbers of the Subcontractors providing such warranties; (vii) removal from the Site of all of Contractor’s, Subcontractors’ and Sub-subcontractors’ personnel, supplies, waste, materials, rubbish, Hazardous Materials, Construction Equipment, and temporary facilities for which Contractor is responsible under ARTICLE 3, other than as required by Contractor to fulfill its obligations under Section 12.3A; (viii) delivery by Contractor to Owner of fully executed Final Lien and Claim Waivers from all Major Subcontractors in the form in Schedules K-7 and K-8; (ix) if, requested by Owner, fully executed Final Lien and Claim Waivers from Major Sub-subcontractors in a form substantially similar to the form in Schedules K-7 and K-8; and (x) delivery by Contractor to Owner of a Final Completion Certificate in the form of Schedule L-6 and as required under Section 11.7, which Owner has accepted by signing such certificate.

“Final Completion Certificate” has the meaning set forth in Section 11.7.

“Final Completion Date” has the meaning set forth in Section 5.3B.

“Final Lien and Claim Waiver” means the waiver and release provided to Owner by Contractor, Major Subcontractors and Major Sub-subcontractors in accordance with the requirements of Section 7.3, which shall be in the form of Schedule K-5,  Schedule K-6,  Schedule K-7, and Schedule K-8.

“Final NTP Deadline” has the meaning set forth in Section 5.2E.3.

“First RLFC Window Period” has the meaning set forth in Section 11.2B.1.

“Force Majeure” means catastrophic storms, lightning or floods, tornadoes, hurricanes, typhoons, cyclones, [***], earthquakes, and other acts of God, accidents at sea, wars, civil disturbances, Regional Strikes or other similar national labor actions, terrorist attacks, revolts, insurrections, sabotage, commercial embargoes, epidemics, fires, explosions, and actions of a Governmental Instrumentality that were not requested, promoted, or caused by the affected Party; provided that such act or event (1) delays or renders impossible the affected Party’s performance of its obligations under this Agreement, (2) is beyond the reasonable control of the affected Party and not due to its or its Subcontractor’s fault or negligence, and (3) could not have been prevented or avoided by the affected Party through the exercise of reasonable due diligence.  For avoidance of doubt, Force Majeure shall not include any of the following:  (1) economic hardship, (2) changes in market conditions, (3) late delivery or failure of Construction Equipment or Equipment unless such late delivery or failure of Construction Equipment or Equipment was otherwise caused by Force Majeure, (4) labor availability, strikes, or other similar labor actions, other than Regional Strikes or other similar national labor actions, or (5) climatic conditions (including rain, snow, wind, temperature and other weather conditions), tides, and seasons, regardless of the magnitude, severity, duration or frequency of such climatic conditions, tides or seasons, but excluding catastrophic storms or floods, lightning, tornadoes, hurricanes, typhoons, cyclones, [***] and earthquakes.

“Fourth RLFC Window Period” has the meaning set forth in Section 11.2B.4.

“GAAP” means generally accepted accounting principles in the United States of America.

“Good Engineering and Construction Practices” or “GECP” means the generally recognized and accepted reasonable and prudent practices, methods, skill, care, techniques and standards employed by the international LNG liquefaction and storage engineering and construction industries with respect to: (i) the engineering, procurement, construction, pre-commissioning, Commissioning, testing and start-up of natural gas liquefaction and storage facilities of similar size and type as the Facility and in accordance with Applicable Codes and Standards and Applicable Law; (ii) personnel and facility safety and environmental protection; (iii) efficient scheduling of the Work; and (iv) the reliability and availability of the Facility under the operating conditions reasonably expected at the Site, as specified in Attachment A.

“Governmental Instrumentality” means any federal, state or local department, office, instrumentality, agency, authority, board or commission having jurisdiction over a Party or any portion of the Work, the Facility or the Site.

“Guarantee Conditions” means the conditions upon which the Minimum Acceptance Criteria and Performance Guarantees are based and shall be tested, as further defined in Attachment T.

“Guaranteed Dates” mean the Guaranteed Substantial Completion Dates and the Final Completion Date.

“Guaranteed Substantial Completion Date” or “Guaranteed Substantial Completion Dates” has the meaning set forth in Section 5.3A.

“Guaranteed Train 1 Substantial Completion Date” has the meaning set forth in Section 5.3A.1 as may be adjusted by Change Order in accordance with the terms of this Agreement.

“Guaranteed Train 2 Substantial Completion Date” has the meaning set forth in Section 5.3A.2 as may be adjusted by Change Order in accordance with the terms of this Agreement.

“Guarantor” means Bechtel Global Energy, Inc.

“Hazardous Materials” means any substance that under Applicable Law is considered to be hazardous or toxic or is or may be required to be remediated, including (i) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls and processes and certain cooling systems that use chlorofluorocarbons, (ii) any chemicals, materials or substances which are now or hereafter become defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” or any words of similar import pursuant to Applicable Law, or (iii) any other chemical, material, substance or waste, exposure to which is now or hereafter prohibited, limited or regulated by any Governmental Instrumentality, or which may be the subject of liability for damages, costs or remediation.

“Indemnified Party” means any Owner Indemnified Party or Contractor Indemnified Party, as the context requires.

“Indemnifying Party” means Owner or Contractor, as the context requires.

“Independent Engineer” means the engineer(s) employed by Owner or Lender.

“Initial NTP Deadline” has the meaning set forth in Section 5.2E.

“Interim Lien and Claim Waiver” means the waiver and release provided to Owner by Contractor, Major Subcontractors and Major Sub-subcontractors in accordance with the requirements of Section 7.2C, which shall be in the form of Schedule K-1,  Schedule K-2,  Schedule K-3, and Schedule K-4.

“Investment Grade” means a rating of at least A- by Standard & Poor’s and at least A3 by ▇▇▇▇▇’▇ Investors Service.

“Invoice” means Contractor’s request for an interim payment pursuant to Section 7.2 and for final payment pursuant to Section 7.3, which invoice shall be in the form of Schedule I-1 for interim payments and Schedule I-2 for final payment.

“ISO” means the International Organization for Standardization.

“ITB Agreement” means the Invitation to Bid (“ITB”) Services Agreement between Owner and Contractor dated August 31, 2018.

“Key Dates” means the schedule of dates listed in Schedule E-1 and the Guaranteed Dates in which Contractor is required to achieve certain stages of completion of the Facility.

“Key Personnel” or “Key Persons” has the meaning set forth in Section 2.2A.

“Lender” means any entity or entities providing temporary or permanent debt or equity financing to Owner for the Facility, including interest rate hedge providers and any entity or entities involved in the refinancing of such debt or equity financing.

“Letter of Credit” has the meaning set forth in Section 9.2.

“Limited Notice to Proceed” or “LNTP” means any limited notice to proceed issued in accordance with Schedule H-1 and Section 5.2B, authorizing and requiring Contractor to proceed with the Work identified in such LNTP.

“LNTP No. 1” has the meaning set forth in Section 5.2A.

“Liquidated Damages” means Performance Liquidated Damages, Delay Liquidated Damages and RLFC Delay Liquidated Damages.

“LNG” means liquefied natural gas.

“LNG Storage Tanks” means LNG Storage Tank 1 and LNG Storage Tank 2.

“LNG Storage Tank 1” means the first full containment, double walled LNG storage tank to be constructed, with a working capacity of approximately one hundred and eighty thousand cubic meters (180,000 m3), as further defined herein.

“LNG Storage Tank 2” means the second full containment, double walled LNG storage tank to be constructed, with a working capacity of approximately one hundred and eighty thousand cubic meters (180,000 m3), as further defined herein.

“LNG Tanker” means any ocean-going vessel used by Owner, a customer of the Facility or the Train 3 Liquefaction Facility or their designee for the transportation of LNG.

“Major Subcontract” means (i) any Subcontract having an aggregate value in excess of [***] U.S. Dollars (U.S. $[***]), (ii) multiple Subcontracts with one Subcontractor that have an aggregate value in excess of [***] U.S. Dollars (U.S. $[***]), or (iii) any Subcontract entered into with a Subcontractor for Work listed in Sections 2 and 3 of Attachment G. The foregoing dollar amount threshold shall be calculated by adding up the relevant amounts across this Agreement and the Train 3 EPC Agreement, provided that Contractor is concurrently performing Work under this Agreement and work under the Train 3 EPC Agreement.

“Major Subcontractor” means any Subcontractor with whom Contractor enters, or intends to enter, into a Major Subcontract and the Subcontractors listed as such in Attachment G.

“Major Sub-subcontract” means (i) any Sub-subcontract having an aggregate value in excess of [***] U.S. Dollars (U.S. $[***]), (ii) multiple Sub-subcontracts with one Sub-subcontractor that have an aggregate value in excess of [***] U.S. Dollars (U.S. $[***]), or (iii) any Sub-subcontract entered into with a Sub-subcontractor for Work listed in Sections 2 and 3 of Attachment G.  The foregoing dollar amount threshold shall be calculated by adding up the relevant amounts across this Agreement and the Train 3 EPC Agreement, provided that Contractor is concurrently performing Work under this Agreement and work under the Train 3 EPC Agreement.

“Major Sub-subcontractor” means any Sub-subcontractor with whom a Subcontractor or Sub-subcontractor enters, or intends to enter, into a Major Sub-subcontract and the Sub-subcontractors listed as such in Attachment G.

“Maximum Cumulative Payment Schedule” has the meaning set forth in Section 7.2E.

“Mechanical Completion Certificate” has the meaning set forth in Section 11.1A.

“Mechanical Completion” means, with respect to (a) the applicable system or subsystem of the Equipment or (b) a Train, that, with the exception of Punchlist items, all of the following have occurred: (i) Contractor has completed all design, procurement, fabrication, assembly, erection, installation and pre-commissioning of all Equipment (including all systems and components of Equipment, such as all operating, protection, fire, safety and other related systems required or necessary prior to start-up) for such applicable system or subsystem of the Equipment or a Train to ensure that all such Equipment or Train was correctly fabricated, assembled, erected, installed, tested and pre-commissioned and is capable of being operated safely and reliably within the requirements and specifications contained in this Agreement, all as set forth in greater detail in Attachment A and the Mechanical Completion checklists agreed by Owner and Contractor in accordance with Section 11.1A; (ii) the applicable system, subsystem of Equipment or Trains ready for the commencement of Commissioning; (iii) Contractor and Owner have agreed upon an initial Punchlist of items as set forth in Section 11.6; (iv) Contractor has delivered to Owner a Mechanical Completion Certificate for the applicable system or subsystem or Train in the form of Schedule L-1 and Owner has accepted such certificate by signing such certificate; and (v) performance by Contractor of all other obligations required under this Agreement for Mechanical Completion.

“Minimum Acceptance Criteria” or “MAC” means the minimum acceptance criteria specified in Attachment T.

“Minimum Acceptance Criteria Correction Period” has the meaning set forth in Section 11.5B.

“Minimum Acceptance Criteria Correction Plan” has the meaning set forth in Section 11.5B.

“Minimum LNTP No. 1 Performance Period” has the meaning set forth in Section 5.2F.

“Month” means a Gregorian calendar month; “month” means any period of thirty (30) consecutive Days.

“Monthly” means an event occurring, or an action taken, once every Month.

“Monthly Progress Reports” has the meaning set forth in Section 3.19A.4.

“Monthly Updated CPM Schedule” has the meaning set forth in Section 5.4C.

“mtpa” has the meaning set forth in the recitals.

“Notice to Proceed” or “NTP” means the full notice to proceed issued in accordance with Schedule H-2 and Section 5.2D, authorizing and requiring Contractor to commence the performance of the entire Work.

“OECD” has the meaning set forth in Section 21.10.

“OSHA” means the United States Department of Labor’s Occupational Safety and Health Administration.

“Owner” has the meaning set forth in the preamble hereto.

“Owner-Furnished Items” has the meaning set forth in Section 4.6B.

“Owner Indemnified Parties” means (i) Owner, Owner’s Lenders, Owner’s limited or general partners,  Owner’s members, Owner’s joint venturers and each of their respective Affiliates, and (ii) the respective officers, directors, agents, members, shareholders, invitees, representatives and employees of each Person specified in clause (i) above.

“Owner Indemnified Party” means any one of the Owner Indemnified Parties.

“Owner Representative” means that Person or Persons designated by Owner in a notice to Contractor who shall have complete authority to act on behalf of Owner on all matters pertaining to the Work, including giving instructions and making changes in the Work, except for any limitations specified in such notice.

“Owner’s Change Request” means the form of Owner’s request for a proposed Change Order attached hereto as Schedule D-3.

“Owner’s Confidential Information” has the meaning set forth in Section 19.1.

“Owner/TL CAs” has the meaning set forth in Section 19.2.

“Parent Guarantee” has the meaning set forth in Section 21.17.

“Party” or “Parties” has the meaning set forth in the preamble.

“Payment Milestone” means a designated portion of the Work as shown in the Payment Schedule.

“Payment Schedule” means the schedule set forth in Attachment C, which sets out the payments to be paid based on achievement of Earned Value and Payment Milestones.

“Performance Guarantee(s)” means the performance guarantees specified in Attachment T.

“Performance Liquidated Damages” means the liquidated damages associated with the failure to achieve one or more of the Performance Guarantees as specified in Attachment T.

“Performance Tests” means those tests performed by Contractor to determine whether the Facility meets the Performance Guarantees and Minimum Acceptance Criteria, which tests shall be set forth in Attachment S and, to the extent not specified therein, as developed in accordance with Section 11.3.

“Permit” means any valid waiver, certificate, approval, consent, license, exemption, variance, franchise, permit, authorization or similar order or authorization from any Governmental Instrumentality required to be obtained or maintained in connection with the Facility, the Site or the Work.

“Person” means any individual, company, joint venture, corporation, partnership, association, joint stock company, limited liability company, trust, estate, unincorporated organization, Governmental Instrumentality or other entity having legal capacity.

“Port Indemnified Parties” means (i) Brownsville Navigation District of Cameron County and its Affiliates, successors and assigns and (ii) the respective directors, officers, shareholders and employees of each entity or person specified in clause (i) above.  A “Port Indemnified Party” means any one of the Port Indemnified Parties.

“Potential Lender” has the meaning set forth in Section 21.21.

“Pre-Existing Hazardous Materials” means Hazardous Materials on the Site that are not brought on to the Site by or on behalf of Contractor or any of its Subcontractors or Sub-subcontractors.

“Pre-Existing Owner Proprietary Work Product” has the meaning set forth in Section 10.4.

“Primavera Project Planner” has the meaning set forth in Section 5.4A.

“Progress As-Built Drawings and Specifications” means Drawings and Specifications that show all current “as-built” conditions, as required under Attachment B.

“Project” means the engineering, design, procurement, manufacturing, fabrication, assembly, transportation and delivery of Equipment, construction, pre-commissioning,

Commissioning, testing and start-up of the Facility and all other Work required to be performed under this Agreement.

“Punchlist” means those finishing items required to complete the Work, the completion of which shall not interrupt, disrupt or interfere with the safe and reliable operation or use of all or any part of the Facility as contemplated by this Agreement, as more fully described in Section 11.6 of this Agreement.

“[***]”.

“Quality Plan” has the meaning set forth in Section 3.18.

“Ready for Start Up” or “RFSU” means, with respect to each Train, that all of the following have occurred: (i) Contractor has achieved Mechanical Completion of such Train, including Mechanical Completion of all systems and subsystems of Equipment for such Train; (ii) all activities necessary to support the introduction of hydrocarbons, including all utility and process utility, safeguarding and shutdown systems have been pre-commissioned, commissioned and integrity verified; (iii) Commissioning is complete, cool down can commence for such Train, and such Train is ready for startup and acceptance of feed gas; (iv) Equipment vendor representatives and other specialist Subcontractors required to support RFSU and early operations are mobilized at the Site; (v) Contractor has delivered to Owner a RFSU Certificate in the form of Schedule L-3 and Owner has accepted such certificate by signing such certificate; and (vi) performance by Contractor of all other obligations required under this Agreement for RFSU of such Train.

“Ready to Load First Cargo” or “RLFC” means that all of the following have occurred with respect to the applicable Train: (i) Contractor has achieved and maintained RFSU for such Train; (ii) the applicable LNG Storage Tank(s) designated to be completed as part of such Train have been successfully cooled down and is operating normally with LNG stored in such tank(s); (iii) such Train has liquefied natural gas into LNG meeting all specifications and requirements of this Agreement (other than the Minimum Acceptance Criteria and Performance Guarantees) and successfully transferred and stored such LNG into the applicable LNG Storage Tank(s); (iv) the LNG Storage Tank(s) and all LNG loading and unloading lines (and equipment and systems related thereto) necessary for transfer of LNG from such LNG Storage Tank(s) to the loading dock have been cooled down and filled with LNG while remaining at cryogenic temperatures via circulation to the LNG berth and are ready for transfer of LNG to an LNG Tanker and for return of vapor and boil-off gas to the LNG tanks, and the loading dock or berth have successfully passed and Owner has approved the pre-LNG arrived berth readiness review; (v) LNG is ready for delivery to, and capable of being delivered to and loaded into, an LNG Tanker via the loading dock; (vi) Contractor has delivered to Owner an RLFC Certificate for such Train in the form of Schedule L-4 and Owner has accepted such certificate by signing such

certificate; and (vii) performance by Contractor of all other obligations required under this Agreement for RLFC of such Train.

“Receiving Party” has the meaning set forth in Section 19.3.

“Record As-Built Drawings and Specifications” means final, record Drawings and Specifications of the Facility showing the “as-built” conditions of the completed Facility, as required under Attachment B.

“Recovery Schedule” has the meaning set forth in Section 5.5.

“Regional Strikes” means strikes or similar labor actions by craft construction labor occurring in the entire Gulf coast region in Texas and Louisiana, including the Site.

“Rely Upon Information” means that certain information provided by Owner, which is expressly identified in Attachment BB as being Rely Upon Information.

“RFSU Certificate” has the meaning set forth in Section 11.1B.

“RLFC Certificate” has the meaning set forth in Section 11.2A.

“RLFC Delay Liquidated Damages” has the meaning set forth in Section 11.2C.2.

“RLFC Window Period” has the meaning set forth in Section 11.2B.

“Scope of Work” means the description of Work to be performed by Contractor as set forth in this Agreement, including Attachment A.

“Second NTP Deadline” has the meaning set forth in Section 5.2E.1.

“Second RLFC Window Period” has the meaning set forth in Section 11.2B.2.

“Shiploading Performance Test” or “Shiploading Performance Testing” shall have the meaning set forth Attachment S.

“Site” means those parcels of land where the Facility shall be located, as shown in greater detail in Attachment Z.  For the avoidance of doubt, the Site does not include any restricted areas designated in Attachment Z.

“Soils Data” has the meaning set forth in Section 2.5B.

“Specifications” means those documents consisting of the written requirements for Equipment, standards and workmanship for the Work and performance of related services, which are prepared as a part of and during the performance of the Work.

“Structural Work” means any and all engineering, procurement or construction of the Facility or components thereof relating to the structural capacity, integrity or suitability of any load bearing elements or underlying civil work for any portion of the Facility.

“Subcontract” means an agreement by Contractor with a Subcontractor for the performance of any portion of the Work.

“Subcontractor” means any Person (other than an Affiliate of Contractor), including an Equipment supplier or vendor, who has a direct contract with Contractor to manufacture or supply Equipment which is a portion of the Work, to lease Construction Equipment to Contractor in connection with the Work, to perform a portion of the Work or to otherwise furnish labor or materials.

“Subcontractor Proprietary Information” has the meaning set forth in Section 19.3.

“Substantial Completion” means that all of the following have occurred with respect to a Train: (i) Mechanical Completion of such Train, including Mechanical Completion of all systems and subsystems of Equipment of such Train; (ii) RFSU has been achieved for such Train; (iii) RLFC has been achieved for such Train; (iv) all Minimum Acceptance Criteria have been achieved; (v) in the case that all Performance Guarantees have not been achieved, Owner has accepted (such acceptance not to be unreasonably withheld)  Contractor’s corrective work plan, and Contractor has turned over the Train pursuant to Section 11.5A; (vi) Contractor and Owner have agreed upon a list of Punchlist items as set forth in Section 11.6; (vii) any Delay Liquidated Damages due and owing have been paid to Owner in accordance with Section 13.2; (viii) the entire Work related to such Train (including training and the delivery of all documentation, manuals and instruction books necessary for safe and proper operation) has been completed, except for Punchlist items, in accordance with the requirements and Specifications of this Agreement; (ix) Contractor has delivered to Owner all Capital Spare Parts for such Train in accordance with Section 3.4B; (x) Contractor has delivered to Owner the applicable Substantial Completion Certificate in the form of Schedule L-5 and as required under Section 11.3 and Owner has accepted such certificate by signing such certificate; (xi) such Train is available for commercial operation in accordance with the requirements of this Agreement, and with respect to Substantial Completion of Train 2, Train 2 has been integrated with Train 1; (xii) Contractor has obtained all Permits required to be obtained by Contractor under this Agreement; and (xiii) Contractor has delivered to Owner a fully executed Interim Lien and Claim Waiver in the form of Schedules K-1 and K-2, fully executed Interim Lien and Claim Waivers from all Major Subcontractors in the form of Schedules K-3 and K-4 and, if requested by Owner, fully executed Interim Lien and Claim Waivers from all Major Sub-subcontractors substantially in the form of Schedules K-3 and K-4, covering all Work up to the date of Substantial Completion.

“Substantial Completion Certificate” has the meaning set forth in Section 11.3.

“Sub-subcontract” means any agreement by a Subcontractor with a Sub-subcontractor or by a Sub-subcontractor with another Sub-subcontractor for the performance of any portion of the Work.

“Sub-subcontractor” means any Person (other than an Affiliate of Contractor), including an Equipment supplier or vendor, who has a direct or indirect contract with a Subcontractor or another Sub-subcontractor to manufacture or supply Equipment which comprises a

portion of the Work, to perform a portion of the Work or to otherwise furnish labor, materials or equipment (including Equipment).

“Taxes” means any and all taxes, assessments, levies, tariffs, duties, fees, charges and withholdings of any kind or nature whatsoever and howsoever described, including sales and use taxes (excluding any Texas Sales and Use Tax on Equipment), value-added, sales, use, gross receipts, license, payroll, federal, state, local or foreign income, environmental, profits, premium, franchise, property, excise, capital stock, import, stamp, transfer, employment, occupation, generation, privilege, utility, regulatory, energy, consumption, lease, filing, recording and activity taxes, levies, fees, charges, imposts and withholding, together with any and all penalties, interest and additions thereto.

“Technology Licensor” means any one of the following technology licensors that are licensing its technology to Owner, either directly with Owner or as a Subcontractor, to be incorporated in the Work: APCI, BASF and [***].

“Texas Sales and Use Tax” means Texas state and applicable local sales and use taxes.

“Third Party” means any Person other than Owner Indemnified Parties and Contractor Indemnified Parties.

“Third Party Intellectual Property” has the meaning set forth in Section 10.2.

“Third RLFC Window Period” has the meaning set forth in Section 11.2B.3.

“Total Reimbursement Amount” has the meaning set forth in Section 7.1A.

“Train” means one or both of Train 1 or Train 2, as the context requires.

“Train 1” means the first part of the Work to be designed, procured, constructed, pre-commissioned, Commissioned, started up and tested for the Facility (as further defined in Attachment A).

“Train 1 Delay Liquidated Damages” has the meaning set forth in Section 13.1A.

“Train 1 Work” means the Work required to be performed pursuant to this Agreement for Train 1.

“Train 2” means the second part of the Work to be designed, procured, constructed, pre-commissioned, Commissioned, started up and tested for the Facility (as further defined in Attachment A).

“Train 2 Delay Liquidated Damages” has the meaning set forth in Section 13.1B.

“Train 2 Work” means the Work required to be performed pursuant to this Agreement for Train 2.

“Train 3” means the work to be designed, procured, constructed, pre-commissioned, commissioned, started up and tested as further described in the Train 3 EPC Agreement.

“Train 3 EPC Agreement” means the engineering, procurement and construction agreement between Owner and Contractor dated May 24th, 2019 for the engineering, procurement, construction, commissioning, start-up and testing of Train 3, to be located at the Site.

“Train 3 Liquefaction Facility” has the same meaning as Train 3.

“UK Bribery Act” has the meaning set forth in Section 21.10.

“Unforeseen Subsurface Conditions” means any unforeseen (i) substantial voids, seismic faults or caverns, (ii) substantial man-made or natural subsurface obstructions, or (iii) fossils, antiquities or other things of archeological interest, that (a) are not identified in any Soils Data or any other documents provided to Contractor by Owner and (b) were not discovered by Contractor or any of its Subcontractors or Sub-subcontractors, acting in accordance with GECP, from inspections and investigations performed by Contractor or any of its Subcontractors or Sub-subcontractors prior to the Effective Date.

“U.S. Dollars” or “U.S.$” means the legal tender of the United States of America.

“U.S. Tariffs and Duties”  means the following U.S. import laws, regulations, tariffs, duties and restrictions: Section 232 of the Trade Expansion Act of 1962 (as amended), Section 301 of the Trade Act of 1974 (as amended), and Section 201 of the Trade Act of 1974 (as amended).

“Warranty” or “Warranties” has the meaning set forth in Section 12.1A.

“Weekly Progress Report” has the meaning set forth in Section 3.19A.3.

“Windstorms” has the meaning set forth in Section 8.2A.

“Work” means all obligations, duties and responsibilities required of Contractor pursuant to this Agreement, including all Equipment, Construction Equipment, spare parts, procurement, engineering, design, fabrication, erection, installation, manufacture, delivery, transportation, storage, construction, workmanship, labor, pre-commissioning, Commissioning, inspection, training, Performance Tests, other tests, start-up and any other services, work or things furnished or used or required to be furnished or used, by Contractor in the performance of this Agreement, including that set forth in Attachment A and Section 3.1A and any Corrective Work.  For the avoidance of doubt, the Work shall include the Train 1 Work and the Train 2 Work.

“Work Product” has the meaning set forth in Section 10.1.

1.2         Interpretation.  The meanings specified in this ARTICLE 1 are applicable to both the singular and plural.  As used in this Agreement, the terms “herein,” “herewith,” “hereunder” and “hereof” are references to this Agreement taken as a whole, and the terms “include,”

“includes” and “including” mean “including, without limitation,” or variant thereof.  Unless expressly stated otherwise, reference in this Agreement to an Article or Section shall be a reference to an Article or Section contained in this Agreement (and not in any Attachments or Schedules to this Agreement) and reference in this Agreement to an Attachment or Schedule shall be a reference to an Attachment or Schedule attached to this Agreement.

ARTICLE 2

RELATIONSHIP OF OWNER, CONTRACTOR AND SUBCONTRACTORS

2.1         Status of Contractor.  The relationship of Contractor to Owner shall be that of an independent contractor.  Any provisions of this Agreement which may appear to give Owner or the Owner Representative the right to direct or control Contractor as to details of performing the Work, or to exercise any measure of control over the Work, shall be deemed to mean that Contractor shall follow the desires of Owner or the Owner Representative in the results of the Work only and not in the means by which the Work is to be accomplished, and Contractor shall have the complete right, obligation and authoritative control over the Work as to the manner, means or details as to how to perform the Work.  Nothing herein shall be interpreted to create a master-servant or principal-agent relationship between Contractor, or any of its Subcontractors or Sub-subcontractors, and Owner.  Nevertheless, Contractor shall strictly comply with all provisions, terms and conditions of this Agreement, and the fact that Contractor is an independent contractor does not relieve it from its responsibility to fully, completely, timely and safely perform the Work in strict compliance with this Agreement.

2.2         Key Personnel, Organization Chart and Contractor Representative.

A.        Key Personnel and Organization Chart.  Attachment F sets forth Contractor’s organizational chart to be implemented for the Work and also contains a list of key personnel (“Key Personnel” or “Key Persons”) from Contractor’s organization who will be assigned to the Work.  Key Personnel shall, unless otherwise expressly stated in Attachment F, be devoted full-time to the Work for the entire duration of the Project, and Key Personnel shall not be removed or reassigned without Owner’s prior approval (such approval not to be unreasonably withheld).  [***].  All requests for the substitution of Key Personnel shall include a detailed explanation and reason for the request and the résumés of professional education and experience for a minimum of two (2) candidates with the requisite qualifications and experience.  Should Owner approve of the replacement of a Key Person, not to be unreasonably withheld, Contractor shall allow for an overlap of three (3) weeks during which both the Key Person to be replaced and the Owner-approved new Key Person shall work together full time.  The additional cost of any replacement of such Key Personnel and overlap time shall be entirely at Contractor’s expense.  Owner has the right, but not the obligation, to require Contractor to remove or cause to be removed Key Persons who are not, in Owner’s reasonable judgment, using GECP in the performance of the portion of the Work assigned to such Key Persons.

B.        Contractor Representative.  Contractor designates [***] as the Contractor Representative.  Notification of a proposed change in Contractor Representative shall be provided in advance, in writing, to Owner.  The Contractor Representative is a Key Person.

2.3         Subcontractors and Sub-subcontractors.  Owner acknowledges and agrees that Contractor intends to have portions of the Work accomplished by Subcontractors pursuant to written Subcontracts between Contractor and such Subcontractors and by Contractor’s Affiliates, and that such Subcontractors may have certain portions of the Work performed by Sub-subcontractors.  All Subcontractors and Sub-subcontractors shall be reputable, qualified firms with an established record of successful performance in their respective trades performing identical or substantially similar work.  Subject to Section 2.4E, Contractor shall use commercially reasonable efforts to require that all contracts with Subcontractors and Sub-subcontractors be consistent with the terms or provisions of this Agreement.  EXCEPT AS STATED IN SECTION 20.4, NO SUBCONTRACTOR OR SUB-SUBCONTRACTOR IS INTENDED TO BE OR SHALL BE DEEMED A THIRD-PARTY BENEFICIARY OF THIS AGREEMENT.  Contractor shall be fully responsible to Owner for the acts and omissions of Subcontractors and Sub-subcontractors and of its Affiliates performing any Work and of Persons directly or indirectly engaged by any of them, as Contractor is for the acts or omissions of Persons directly or indirectly engaged by Contractor.  The work of any Subcontractor or Sub-subcontractor and Contractor’s Affiliates shall be subject to inspection by Owner, Lender, or Independent Engineer to the same extent as the Work of Contractor.  All Subcontractors and Sub-subcontractors and Contractor’s Affiliates and their respective personnel performing Work on Site are to be instructed by Contractor in the terms and requirements of the safety and environmental protection policies and procedures established under Section 3.10 and shall be expected to comply with such policies and procedures with respect to Work performed on Site.  In the event that any personnel do not adhere to such policies and procedures, such personnel shall be removed by Contractor.  In no event shall Contractor be entitled to any adjustment of the Contract Price or Key Dates as a result of compliance with such policies and procedures or any removal of personnel necessitated by non-compliance.  Nothing contained herein shall (i) create any contractual relationship between any Subcontractor and Owner, or between any Sub-subcontractor and Owner, or between any of Contractor’s Affiliates performing Work and Owner or (ii) obligate Owner to pay or cause the payment of any amounts to any Subcontractor or Sub-subcontractor or any of Contractor’s Affiliates.  For purposes of Texas Sales and Use Tax, all Subcontracts and Sub-subcontracts will be separated contracts pursuant to Tex. Tax Code § 151.056(b) and 34 Tex. Admin. Code Rule § 3.291(a)(13).

2.4         Subcontracts and Sub-subcontracts.

A.        Approved List.  Section 1 and Section 3 of Attachment G set forth the lists of Subcontractors and Sub-subcontractors that Contractor and Owner have agreed are approved Subcontractors and Sub-subcontractors for the performance of that portion of the Work specified in Section 1 and Section 3 of Attachment G.  Section 2 of Attachment G sets forth a list of Subcontractors and Sub-subcontractors that Contractor has agreed to subcontract with for that portion of the Work specified in Section 2 of Attachment G.  Approval by Owner of any Subcontractors or Sub-subcontractors does not relieve Contractor of any responsibilities under this Agreement.

B.        Additional Proposed Major Subcontractors and Major Sub-subcontractors.  In the event that Contractor is considering the selection of a Subcontractor or Sub-subcontractor not listed on Attachment G that would qualify as a Major Subcontractor or Major Sub-subcontractor, Contractor shall (i) notify Owner of its proposed Major Subcontractor or Major Sub-subcontractor as soon as practicable during the selection process and furnish to Owner all information reasonably requested by Owner with respect to Contractor’s selection criteria (including information regarding the Major Subcontractor or Major Sub-subcontractor’s qualifications, safety performance and the agreed scope of work but excluding Major Subcontractor’s or Major Sub-subcontractor’s (i)  pricing (other than unit rates), discount or credit information, payment terms, payment schedules and retention and (ii) performance security, liquidated damages and limitations on liability), and (ii) notify Owner no less than ten (10) Business Days prior to the execution of a Major Subcontract with a Major Subcontractor or Major Sub-subcontract with a Major Sub-subcontractor not listed on Attachment G.  Owner shall have the discretion, not to be unreasonably exercised, to reject any proposed Major Subcontractor or Major Sub-subcontractor not listed on Attachment G for a Major Subcontract or Major Sub-subcontract for failing to meet the standard set out in Section 2.3. Contractor shall not enter into any Major Subcontract with a proposed Major Subcontractor or Major Sub-subcontract with a Major Sub-subcontractor that is rejected by Owner in accordance with the preceding sentence.  Owner shall undertake in good faith to review the information provided by Contractor pursuant to this Section 2.4B expeditiously and shall notify Contractor of its decision to accept or reject a proposed Major Subcontractor or Major Sub-subcontractor as soon as practicable after such decision is made.  Failure of Owner to respond within ten (10) Days after Owner’s receipt of Contractor’s notice of a proposed Major Subcontractor or Major Sub-subcontractor shall be deemed to be an acceptance of such Major Subcontractor or Major Sub-subcontractor.

C.        Other Additional Proposed Subcontractors and Sub-subcontractors.  For any Subcontractor or Sub-subcontractor performing Work on Site and not otherwise covered by Sections 2.4A or 2.4B, Contractor shall, within fourteen (14) Days after execution of a Subcontract with such Subcontractor or Sub-subcontractor, notify Owner in writing of the selection of such Subcontractor or Sub-subcontractor and inform Owner generally what portion of the Work such Subcontractor or Sub-subcontractor is performing.

D.        Delivery of Major Subcontracts and Major Sub-subcontracts.  Contractor shall furnish Owner with a redacted copy of all Major Subcontracts and Major Sub-subcontracts (excluding only provisions regarding pricing, discount or credit information, payment terms, payment schedules, retention, performance security, liquidated damages and limitations on liability, except that such exclusions shall not apply to Major Subcontracts or Major Sub-subcontracts with APCI, GE and ABB within ten (10) Days after execution thereof and, within ten (10) Days after Owner’s request, furnish Owner with a price redacted copy of any other Subcontracts or Sub-subcontracts.  Notwithstanding the above, Owner’s receipt and review (or non-review) of any Subcontracts or Sub-subcontracts shall not relieve the Contractor of any obligations under this Agreement nor shall such action constitute a waiver of any right or duty afforded Owner under this Agreement or approval of or acquiescence in a breach hereunder.

E.        Terms of Major Subcontracts and Major Sub-subcontracts.  In addition to the requirements in Section 2.3 and without in any way relieving Contractor of its full responsibility to Owner for the acts and omissions of Subcontractors and Sub-subcontractors, Contractor shall:

1.        include in each Major Subcontract and each Major Sub-subcontract provisions allowing each Major Subcontract and Major Sub-subcontract to be assigned to Owner, at Owner’s sole discretion, without the consent of the respective Major Subcontractor or Major Sub-subcontractor; provided that with respect to APCI, [***] and BASF, such assignment shall be subject to APCI, [***] and BASF’s consent (as applicable), but such consent shall not be withheld unless the assignee is a competitor of APCI, [***] or BASF (as applicable) for such licensed technology or the assignment would cause a violation of Applicable Law; and

2.        use reasonable commercial efforts to include in each Major Subcontract and Major Sub-subcontract a provision requiring each such Major Subcontractor and Major Sub-subcontractor to comply with all requirements and obligations of Contractor to Owner under this Agreement, as such requirements and obligations are applicable to the performance of the Work under their respective Major Subcontract or Major Sub-subcontract, provided however, notwithstanding the foregoing, Contractor shall, at a minimum, include in each Major Subcontract and Major Sub-subcontract, to the extent such requirements and obligations are applicable to the performance of the Work under their respective Major Subcontract or Major Sub-subcontract, the following:

(i)        for all Major Subcontractors and Major Sub-subcontractors, provisions substantially similar to: ARTICLE 10, ARTICLE 17, and ARTICLE 19; Sections 2.3, 2.5C, 3.3D, 3.13, 3.16, 3.18, 8.1, 9.1 (and Attachment O), 12.1C, 12.2A, 16.1E, 16.3, the Interim Lien and Claim Waiver requirements in Section 7.2 and the Final Lien and Claim Waiver requirements in Section 7.3; and

(ii)         for all Major Subcontractors and Major Sub-subcontractors performing Work at the Site, provisions substantially similar to: Sections 3.6, 3.7, 3.8, 3.10, 3.17, 3.24, 3.25, 3.27 in addition to the requirements and obligations set forth in Section 2.4E.2(i).

2.5         Contractor Acknowledgements.

A.        This Agreement.  Prior to the execution of this Agreement, Contractor or Contractor’s Affiliate performed engineering, cost estimating and related services and developed and provided, or verified, the information that forms the Scope of Work and Basis of Design in Attachment A, which was performed or verified pursuant to the ITB Agreement.  Subject to Section 4.6A, Contractor hereby agrees and acknowledges that the Scope of Work and Basis of Design are accurate, adequate and sufficiently complete for Contractor to engineer, procure, construct, pre-commission, commission, start-up and test a fully operational natural gas liquefaction facility, export terminal and associated facilities

for the Contract Price and in accordance with all requirements of this Agreement, including Applicable Codes and Standards, Applicable Law, and the Warranties, Minimum Acceptance Criteria and Performance Guarantees.  Accordingly, except for Section 4.6A, Contractor hereby (i) agrees that it shall have no right to claim or seek an increase in the Contract Price or an adjustment to the Key Dates with respect to any incomplete, inaccurate or inadequate information or requirements that may be contained or referenced in Attachment A, and (ii) waives and releases Owner from and against such claims.  Owner makes no guaranty or warranty, express or implied, as to the accuracy, adequacy or completeness of any such information that is contained or referenced in Attachment A.

B.        Conditions of the Site.

1.        In addition to Section 2.5A, Contractor further agrees and acknowledges that it has made all investigations and inspections that it deems necessary to perform the Work in accordance with this Agreement, has conducted a review of the legal description of the Site, and understands the climate, terrain, topography, subsurface conditions and other difficulties that it may encounter in performing the Work in accordance with this Agreement.  Contractor warrants that it has the experience, resources, qualifications and capabilities to perform the Work in accordance with this Agreement.  Except as provided in Section 2.5B.2 or for Force Majeure, Contractor, as between Contractor and Owner, assumes all risks related to, and waives any right to claim an adjustment in the Contract Price or the Key Dates as a result of any conditions at the Site or at any other location where the Work is performed, including river levels, topography and subsurface soil conditions.  Contractor agrees and acknowledges that: (a) any information provided by Owner to Contractor prior to the Effective Date of this Agreement relating to subsurface soil conditions or topographical conditions at the Site (the “Soils Data”) was provided to Contractor for its convenience only; (b) the Soils Data shall not be considered a warranty or guarantee, express or implied, of subsurface conditions or topographical conditions existing at the Site; (c) the Soils Data does not constitute a part of this Agreement; and (d) Owner assumes no responsibility for the accuracy and sufficiency of the data contained within the Soils Data nor for Contractor’s interpretation of such data, including the projection of soil-bearing values; rock profiles; soil stability; or the presence, level and extent of underground water.

2.        Contractor, as between Contractor and Owner, assumes all risks related to, and waives any right to claim an adjustment for, any and all subsurface conditions of whatever nature or condition, except as expressly provided in this Section 2.5B.2:

(i)        Unforeseen Subsurface Conditions.  If Contractor encounters Unforeseen Subsurface Conditions in the performance of the Work that adversely affects Contractor’s actual costs (which costs shall be adequately documented and supported by Contractor) of performance of the Work or ability to perform any material requirement of this Agreement, Contractor shall be entitled to a Change Order adjusting the Contract Price and/or the Key Dates, as applicable, pursuant to Sections 6.2A.5 and 6.8,

provided that Contractor complies with the notice and Change Order request requirements set forth in Sections 6.2 and 6.5, uses reasonable efforts not to disturb such Unforeseen Subsurface Conditions prior to Owner’s investigation and, with respect to claims for costs for delay or schedule relief for delay, satisfies the requirements of Section 6.8.  Notwithstanding the foregoing, Contractor is responsible for the proper interpretation of the Soils Data, including in accordance with GECP.

C.        Applicable Law and Applicable Codes and Standards.  Contractor has investigated to its satisfaction Applicable Law and Applicable Codes and Standards and warrants that it can perform the Work at the Contract Price and within the Key Dates in accordance with Applicable Law and Applicable Codes and Standards.  Contractor shall perform the Work in accordance with Applicable Law and Applicable Codes and Standards, whether or not such Applicable Law or Applicable Codes and Standards came into effect before the Effective Date or during the performance of the Work; provided, however, Contractor shall be entitled to a Change Order for Changes in Law to the extent allowed under Section 6.2A.6.  Except for any Changes in Law for which Contractor is entitled to a Change Order under Section 6.2A.6, Contractor hereby waives any right to make any claim for adjustment of the Contract Price or the Key Dates in relation to any change in Applicable Law or Applicable Codes and Standards.  Notwithstanding anything provided in this Agreement, the Parties agree that Contractor’s sole and exclusive remedy for any change in tariffs, quotas, or duties is set forth in Attachment FF.

D.        Owner’s Consultants.  Owner may designate consultants that are not an employee of Owner to provide certain administrative, management, planning and other services as it deems appropriate to assist with Owner’s rights, remedies and obligations under this Agreement.  Such consultants or professionals may, to the extent specified in this Agreement between Owner and such consultants or professionals, act for or on behalf of Owner with respect to Owner’s rights, remedies and obligations under this Agreement, which may include receiving and reviewing certain deliverables and submittals from Contractor, inspecting certain portions of the Work and receiving Contractor’s Confidential Information to the extent necessary to perform such services (having first been bound to an obligation of confidentiality in accordance with this Agreement) to the extent Owner is permitted to do the same under this Agreement, as further specified by Owner to Contractor in writing.  Under no circumstances shall such consultants or professionals have any authority to amend this Agreement, sign any Change Order or issue any Change Directive. In no event will Owner retain as a consultant on this Project any Person that is a Competitor of Contractor.

ARTICLE 3

CONTRACTOR’S RESPONSIBILITIES

3.1         Scope of Work.

A.        Generally.  Subject to Section 3.1B, the Work shall be performed on a fixed price turnkey basis and shall include all engineering, procurement, construction, pre-commissioning, Commissioning, start-up and testing of the Facility, all Equipment,

Construction Equipment, spare parts, labor, workmanship, inspection, manufacture, fabrication, installation, design, delivery, transportation, storage, training of Owner’s operation personnel and all other items or tasks that are set forth in Attachment A, or otherwise required to achieve Mechanical Completion, RFSU, RLFC, and Substantial Completion of each Train and Final Completion of the Facility in accordance with the requirements of this Agreement, including achieving the Minimum Acceptance Criteria and Performance Guarantees.  Contractor shall be required to integrate and use such Owner’s personnel in Contractor’s pre-commissioning, Commissioning, testing and start-up efforts.  Contractor shall perform the Work in accordance with GECP, Applicable Law, Applicable Codes and Standards, and all other terms and provisions of this Agreement, with the explicit understanding that the Facility will operate as a natural gas liquefaction facility and export terminal meeting all requirements and specifications of this Agreement, including Applicable Codes and Standards, Applicable Law, Warranties, Minimum Acceptance Criteria and Performance Guarantees.  It is understood and agreed that the Work shall include any incidental work that can reasonably be inferred as required and necessary to complete the Facility in accordance with GECP, Applicable Law, Applicable Codes and Standards, and all other terms and provisions of this Agreement, excluding only those items which Owner has specifically agreed to provide under the terms of this Agreement.  Without limiting the generality of the foregoing, the Work is more specifically described in Attachment A.

B.        Exception to Scope of Work.  Contractor shall not be responsible for providing those items identified in ARTICLE 4 as Owner’s obligations.

3.2        Specific Obligations.  Without limiting the generality of Section 3.1 or the requirements of any other provision of this Agreement, Contractor shall:

A.        procure, supply, transport, handle, properly store, assemble, erect and install all Equipment;

B.        provide construction, construction management (including the furnishing of all Construction Equipment, and all Site supervision and craft labor), civil/structural, electrical, instrumentation, field design, inspection and quality control services required to ensure that the Work is performed in accordance herewith;

C.        negotiate all guarantees, warranties, delivery schedules and performance requirements with all Subcontractors so that all Subcontracts are consistent with this Agreement, as set forth in Sections 2.3 and 2.4;

D.        perform shop and other inspections of the work of Subcontractors and Sub-subcontractors to ensure that such work meets all of the requirements of this Agreement;

E.        pay Subcontractors in accordance with the respective Subcontracts;

F.        pay all Taxes incurred by Contractor in connection with the Work in a timely fashion, and as between Owner and Contractor, be responsible for all Taxes incurred by any Subcontractor or Sub-subcontractor;

G.        ensure that the Work is performed in accordance with the Key Dates;

H.        until Substantial Completion of each Train, conduct and manage all pre-commissioning, start-up operations, Commissioning, Performance Tests and other testing of such Train, while directing operation personnel provided by Owner pursuant to Section 4.4;

I.        obtain all Permits required per Section 3.12;

J.        provide prompt assistance, information and documentation required or requested by Owner to enable Owner to obtain or modify the Permits listed in Attachment Q,  provided that such assistance, information and documentation shall not include Contractor’s provision of information, testimony, documents or data by Contractor’s employees under oath during litigation (unless specifically authorized by Contractor) and activities outside the field of Contractor’s expertise, training or experience of personnel assigned to the performance of the Work under this Agreement (except to the extent provided for by Change Order issued pursuant to Section 6.1 and agreed by Contractor);

K.        provide training for Owner’s operation personnel per Section 3.5;

L.        ensure all Subcontractors perform their Subcontract obligations;

M.        cooperate with and respond promptly to reasonable inquiries from Owner;

N.        obtain and manage all temporary utilities for the performance of the Work;

O.        manage on behalf of Owner the engineering, procurement, construction and start-up of all permanent utilities provided outside the Site to the Site as specified in Schedule A-1;

P.        supply all fills of lubricants, refrigerants and chemicals and transformer oils and all consumables necessary to perform the Work through Substantial Completion of the applicable Train, excluding Owner’s supply requirements of natural gas feed for Commissioning, start-up, testing and operations as set forth in this Agreement, and as a condition of Substantial Completion with respect to a Train, completely re-filling all fills, refrigerants, chemicals and oils for such Train; and

Q.        perform all design and engineering Work in accordance with this Agreement, including that specified in Section 3.3.

3.3        Design and Engineering Work.

A.        General.  Contractor shall, as part of the Work, perform, or cause to be performed, all design and engineering Work in accordance with this Agreement and cause the Work to meet and achieve the requirements of this Agreement, including achieving the Minimum Acceptance Criteria and Performance Guarantees.

B.        Drawings and Specifications.  Upon receipt of an LNTP or the NTP issued in accordance with Section 5.2, Contractor shall commence the preparation of the Drawings and Specifications for all Work relating to such LNTP or NTP.  The Drawings and Specifications shall conform and comply with the requirements of this Agreement, including the Scope of Work, Basis of Design, GECP, Applicable Codes and Standards, Applicable Law, and all applicable provisions of this Agreement.  Contractor shall develop a design document submittal schedule in the form of a master document register and issue to Owner no later than thirty (30) Days after the Effective Date.

C.        Review Process.

1.        Drawing and Specifications Review.  During the development of the Drawings and Specifications, Contractor shall provide Owner with the opportunity to perform regular reviews of the design and engineering in progress on a regular basis.  Such reviews may be conducted at Contractor’s offices, at any of its Major Subcontractor’s or Major Sub-subcontractor’s offices with Contractor’s presence, or remotely by electronic internet access (except that electronic access of Major Subcontractor and Major Sub-subcontractor work shall be provided only where reasonably available to Contractor).  The reviews may be of progress prints, computer images, draft documents, working calculations, draft specifications or reports, Drawings, Specifications or other design documents determined by Owner.

2.        Submission by Contractor.  Contractor shall submit copies of the Drawings and Specifications to Owner for formal review, comment, approval or disapproval in accordance with Attachment B and the submittal schedule mutually agreed to by the Parties each Month, as applicable.  Each submission of Drawings and Specifications shall include a statement that to the best of Contractor’s knowledge such Drawings and Specifications comply with Section 3.3B.  In addition, if Contractor makes any changes to any Drawings or Specifications after they have been submitted to Owner (including after Owner has already reviewed, commented, approved or disapproved such Drawings and Specifications), Contractor shall re-submit such Drawings and Specifications to Owner in accordance with this Section.

3.        Review Periods.  Owner shall have up to ten (10) Business Days after its receipt of Drawings and Specifications submitted in accordance with Section 3.3C.2 to issue to Contractor one (1) set of consolidated written comments, proposed changes and/or approvals or disapprovals of the submission of such Drawings and Specifications.

4.        No Owner Response.  If Owner does not issue any comments, proposed changes or approvals or disapprovals within such time periods set forth in Section 3.3C.3, Contractor may proceed with the development of such Drawings and Specifications and any construction relating thereto, but Owner’s lack of comments, approval or disapproval, if applicable, shall in no event constitute an approval of the matters received by Owner.

5.        Disapproval by Owner.  If Owner disapproves of the Drawings or Specifications, Owner shall provide Contractor with a written statement of the reasons for such disapproval within the time period required for Owner’s response for disapproval of Drawings and Specifications set forth in Section 3.3C.3.  Contractor shall provide Owner with revised and corrected Drawings and Specifications as soon as possible thereafter and Owner’s rights with respect to issuing comments, proposed changes or approvals or disapprovals of such revised and corrected Drawings or Specifications are governed by the procedures specified above in this Section  3.3C; provided that Contractor shall not be entitled to any extensions of time to the Key Dates, an adjustment to the Contract Price or any adjustment to any other Changed Criteria; provided further, however, to the extent Owner’s disapproval of the Drawings or Specifications is due to one or more changes required by Owner to any such Drawings or Specifications that have an impact on the Work, and such disapproval is not the result of such Drawings’ or Specifications’ non-compliance with the requirements of this Agreement, Contractor shall be entitled to a Change Order to the extent such Owner-required change adversely affects the Key Dates or the Contract Price and Contractor complies with and meets the requirements of ARTICLE 6.

6.        Approval by Owner.  Upon Owner’s approval of the Drawings and Specifications, such Drawings and Specifications shall be the Drawings and Specifications that Contractor shall use to construct the Work; provided that Owner’s review or approval of any Drawings and Specifications (or Owner’s lack of comments, proposed changes or approval) shall not in any way be deemed to limit or in any way alter Contractor’s responsibility to perform and complete the Work in accordance with the requirements of this Agreement, and in the event that there is a discrepancy, difference or ambiguity between the terms of this Agreement and any Drawings and Specifications, the interpretation imposing the greater obligation on Contractor shall control.  Due to the limited time for Owner’s review of Drawings and Specifications, Contractor’s or its Subcontractors’ or Sub-subcontractors’ expertise in the Work and Owner’s contractual expectation for Contractor to prepare accurate and complete Drawings and Specifications, Contractor recognizes and agrees that Owner is not required or expected to make detailed reviews of Drawings and Specifications, but instead Owner’s review of Drawings and Specifications may be of only a general, cursory nature.  Accordingly, any review or approval given by Owner under this Agreement (or Owner’s non-response) with respect to any Drawings or Specifications shall not in any way be, or deemed to be, an approval of any Work, Drawings or Specifications not meeting the requirements of this Agreement, as Contractor has the sole responsibility for performing the Work in accordance with this Agreement.

D.        Design Licenses.  Contractor shall perform, or cause to be performed, all design and engineering Work in accordance with Applicable Law and Applicable Codes and Standards, and all Drawings, Specifications and design and engineering Work shall be signed and stamped by design professionals licensed to the extent required by Applicable Law.

E.        CAD Drawings.  Unless otherwise expressly provided under this Agreement, all Drawings and Record As-Built Drawings prepared by Contractor or its Subcontractors under this Agreement shall be prepared using computer aided design (“CAD”).  All CAD drawing files shall be in fully operable and editable Microstation (Version 8) format, unless otherwise specified in Attachment B.  Contractor shall use reasonable efforts to also provide Drawings, including Record As-Built Drawings, in other formats requested by Owner.

F.        As-Built Drawings and Specifications.  During construction, Contractor shall keep a redlined, marked, up-to-date set of Progress As-Built Drawings and Specifications on the Site as required under Attachment B.  Contractor shall make redlined documents available to Owner for inspection upon request during the course of construction.  As a condition precedent to Final Completion, Contractor shall deliver to Owner the Record As-Built Drawings and Specifications in accordance with Attachment B, which shall include delivery of final as-built drawing files in fully operable and editable format in CAD.

G.        Other Information.  Contractor shall deliver copies of all other documents required to be delivered pursuant to Attachment B within and in accordance with the requirements and timing set forth in Attachment B.

3.4        Spare Parts.

A.        Commissioning Spare Parts. Contractor shall provide all pre-commissioning, commissioning, testing and start-up spare parts necessary for each Train to achieve Substantial Completion and shall, prior to and as a condition precedent to achieving RLFC for each Train, deliver such spare parts for the Train to the Site.  The cost associated with all Work related to such pre-commissioning, commissioning, testing and start-up spare parts is included in the Contract Price, including all Work related to procuring and storing the commissioning spare parts and the purchase price for such parts.

B.        Capital Spare Parts. Prior to and as a condition precedent to Substantial Completion of each Train, Contractor shall deliver to the Site all the Capital Spare Parts that pertain to such Train.  Such Capital Spare Parts are listed in Attachment W, and the cost associated with all Work related to such Capital Spare Parts is included in the Contract Price, including the cost of procurement of such spare parts and the actual out-of-pocket purchase price of such spare parts.  To the extent that Contractor desires to use any Capital Spare Parts, Contractor must obtain Owner’s prior approval, not to be unreasonably withheld, and replace all such spare parts in new and unused condition as a condition of Substantial Completion unless otherwise approved by Owner.  Capital Spare Parts shall be treated, as applicable, as Equipment or as a component of the Aggregate Labor and Skills Price.

C.        Operating Spare Parts.  With respect to operating spare parts for use after Substantial Completion (but only to the extent not taken into consideration by the Capital Spare Parts listed in Attachment W), Contractor shall deliver to Owner for Owner’s approval, not to be unreasonably withheld, a detailed priced list of the manufacturer and

Contractor-recommended operating spare parts for each applicable item of Equipment necessary for operating such Equipment for two (2) years.  The purchase price of each operating spare part shall be provided to Owner for each item of Equipment for which there is manufacturer or Contractor-recommended operating spare parts no later than thirty (30) Days after the execution of the applicable Subcontract for such Equipment, and such purchase prices will be valid for one hundred and eighty (180) Days after Contractor’s execution thereof.  Within such one hundred and eighty (180) Days, Owner may respond to Contractor identifying which operating spare parts, if any, that Owner wishes Contractor to procure under each Subcontract.  The cost associated with all Work related to the two (2) years’ operating spare parts is included in the Contract Price, except for the purchase price of such operating spare parts.  In the event Owner requests in writing that Contractor procure any operating spare parts on Owner’s behalf, Contractor shall be entitled to a Change Order in accordance with Section 6.2A.6 to increase the Contract Price for the actual purchase price and delivery costs of such requested operating spare parts, plus costs of transportation, preservation and a profit of five percent (5%) on such price and costs.  To the extent that Contractor desires to use any Operating Spare Parts, Contractor must obtain Owner’s prior approval, not to be unreasonably withheld, and replace all such spare parts as a condition of Substantial Completion in new and unused condition unless otherwise approved by Owner.  Operating spare parts shall be treated, as appropriate, as Equipment or as a component of the Aggregate Labor and Skills Price.

3.5        Training Program in General.  As part of the Work, a reasonable number of competent personnel, who are capable of being trained by Contractor, designated by Owner in its sole discretion (but not to exceed the number of Persons listed in Attachment V) shall be given training designed and administered by Contractor at its expense, which shall be based on the program requirements contained in Attachment A and shall cover at a minimum the following topics: (i) the testing of each item of Equipment; (ii) the start-up, operation and shut-down of each item of Equipment; (iii) the performance of routine, preventative and emergency maintenance for each item of Equipment; and (iv) spare parts to be maintained for each item of Equipment, and their installation and removal.  Such training shall include instruction for Owner’s operations personnel in the operation and routine maintenance of each item of Equipment prior to completion of Commissioning of each item of Equipment.  As part of the training, Contractor shall provide Owner’s operating personnel with access to the Facility during Commissioning, testing and start-up. Training shall be provided by personnel selected by Contractor who, in Contractor’s and the Equipment Subcontractor’s or Sub-subcontractor’s judgment, are qualified to provide such training, and shall take place at such locations and at such times as agreed upon by the Parties.  Contractor shall provide trainees with materials described in Attachment A.  Contractor shall also provide to Owner all training materials and aids developed to conduct such training in order to facilitate future training by Owner of personnel hired after Substantial Completion.  If Contractor determines, using GECP, that a member of the operations personnel provided by Owner who is under the control of Contractor pursuant to Section 3.29 is not competent, or is not adequately participating in the training, or is not sufficiently capable of performing his or her duties in connection with the Facility, and such deficiencies are not the fault of Contractor and cannot be cured by Contractor using GECP, the Contractor may require Owner to remove and replace that member of the operations personnel (provided such personnel have not been designated as Owner’s key personnel).

3.6        Environmental Regulations and Environmental Compliance.  No later than thirty (30) Days after the Effective Date, Contractor shall submit for Owner’s approval, not to be unreasonably withheld, Project-specific environmental policies and procedures.  Such policies and procedures shall be in compliance with requirements of this Agreement, including Applicable Law and the plan and procedures set forth in Attachment J.  Without limitation of Section 3.1, Contractor is responsible for performing the Work in compliance with all provisions of this Agreement regarding the environment and Applicable Law and in compliance with the policies and procedures set forth in Attachment J and the Project-specific policies and procedures approved by Owner.  Contractor shall maintain all environmental compliance records required by Applicable Law and shall provide, or cause to be provided, necessary training to its employees, Subcontractors and Sub-subcontractors to ensure their compliance with the environmental rules and requirements of this Agreement.  Contractor shall, at its sole cost and expense, dispose of all non-hazardous wastes and Hazardous Materials generated or brought onto the Site by Contractor, any Subcontractor or Sub-subcontractor during performance of the Work at off-Site disposal facilities permitted to receive such wastes and Hazardous Materials.  Contractor shall provide copies of all waste and disposal records and reports to Owner.  Contractor shall report to Owner, as soon as reasonably possible after having knowledge thereof and in no event later than one (1) Day after such occurrence, any violation of the foregoing.  Contractor shall, at its sole cost and expense, remediate the release of any Hazardous Materials generated or brought onto the Site by Contractor, any Subcontractor or Sub-subcontractor or other event in violation of this Section 3.6.  Contractor’s obligations under this Section 3.6 shall survive termination of this Agreement.

3.7        Contractor’s Tools and Construction Equipment.  Contractor shall furnish all Construction Equipment necessary and appropriate for the timely and safe completion of the Work in compliance with this Agreement.  Notwithstanding anything to the contrary contained in this Agreement, Contractor shall be responsible for damage to or destruction or loss of, from any cause whatsoever, all Construction Equipment owned, rented or leased by Contractor or its Subcontractors or Sub-subcontractors for use in accomplishing the Work.  Contractor shall require all insurance policies (including policies of Contractor and all Subcontractors and Sub-subcontractors) in any way relating to such Construction Equipment to include clauses stating that each underwriter will waive all rights of recovery, under subrogation or otherwise, against the Owner Indemnified Parties.

3.8        Employment of Personnel.

A.        Contractor shall not engage or retain or permit any Subcontractor or Sub-subcontractor to engage or retain, in connection with its performance under this Agreement, anyone who is unsafe, not skilled, or not qualified to perform the work assigned to such Person.  Contractor agrees to promptly remove or reassign (or to require any Subcontractor or Sub-subcontractor to remove or reassign) from its services in connection with the Work any Person who does not meet the foregoing requirements, excluding vendors or suppliers who are not performing Work on the Site, laydown areas or modular fabrication yards.  In addition, Contractor agrees that within forty-eight (48) hours after receipt of notice from Owner, it shall remove from the Work any employee or agent of Contractor or of Contractor’s Subcontractors or Sub-subcontractors who, in Owner’s reasonable opinion, is unsafe, incompetent, careless, unqualified to perform the Work assigned to such Person, creates an unsafe or hostile work environment, persists in

any conduct which is prejudicial to safety, health, or the protection of the environment, disregards the terms and conditions of this Agreement, or is interrupting, interfering with or impeding the timely and proper completion of the Work.  NOTWITHSTANDING THE FOREGOING, OWNER SHALL HAVE NO LIABILITY AND CONTRACTOR AGREES TO RELEASE, INDEMNIFY, DEFEND AND HOLD HARMLESS THE OWNER INDEMNIFIED PARTIES FROM AND AGAINST ANY AND ALL CLAIMS, CAUSES OF ACTION, DAMAGES, COSTS, LOSSES AND EXPENSES (INCLUDING ALL REASONABLE ATTORNEYS’ FEES AND LITIGATION OR ARBITRATION EXPENSES) AND LIABILITIES, OF WHATSOEVER KIND OR NATURE, WHICH MAY DIRECTLY OR INDIRECTLY ARISE OR RESULT FROM CONTRACTOR OR ANY SUBCONTRACTOR OR SUB-SUBCONTRACTOR TERMINATING THE EMPLOYMENT OF OR REMOVING FROM THE WORK ANY SUCH EMPLOYEE OR AGENT WHO FAILS TO MEET THE FOREGOING REQUIREMENTS FOLLOWING A REQUEST BY OWNER TO HAVE SUCH EMPLOYEE OR AGENT REMOVED FROM THE WORK.  Contractor shall replace any such employee or agent at its sole cost and expense.

B.        Contractor is responsible for maintaining labor relations in such manner that there is reasonable harmony among the employees of Contractor and its Subcontractors and Sub-subcontractors performing Work at the Site.  Contractor and its Subcontractors and Sub-subcontractors performing Work at the Site shall conduct their labor relations in accordance with the recognized prevailing local area practices.  Contractor shall inform Owner promptly of any labor dispute, anticipated labor dispute, request or demand by a labor organization, its representatives or members which may reasonably be expected to affect the Work.  Contractor further agrees to inform Owner, before any commitments are made, about the negotiations of any agreements or understandings with local or national labor organizations.

C.        Contractor and its Subcontractors and Sub-subcontractors and the personnel of any of them shall not bring onto the Site any: (i) firearm of whatsoever nature, knife with a blade exceeding four (4) inches (100 millimeters) in length or other object which in the sole judgment of Owner is determined to be a potential weapon; (ii) alcoholic beverages or intoxicants of any nature; (iii) substance that creates a hazard and not related to the Work; (iv) animal; (v) illegal drugs of any nature; (vi) drugs (whether prescription or non-prescription) which impair physical or mental faculties; or (vii) prescription drugs without a valid prescription.

D.        In connection with the enforcement of this Section 3.8D, all employees and agents of Contractor and its Subcontractors and Sub-subcontractors shall successfully complete a drug screening test prior to performing Work at the Site, and periodically thereafter in accordance with the requirements of Attachment J.  Contractor and its Subcontractors and Sub-subcontractors shall abide by and enforce the requirements of this Section 3.8D, and shall immediately remove from the Work and the Site to the extent permitted by Applicable Law any employee or agent of Contractor, Subcontractor or Sub-subcontractor who has violated the requirements of this Section 3.8D.  The provisions of Section 3.8A with regard to liability of any of the Owner Indemnified Parties and Contractor’s release, indemnification, defense and hold harmless obligations shall apply to the removal of any such Person under this Section 3.8D.

3.9        Clean-up.  Contractor shall keep the Site free from all waste materials or rubbish caused by the activities of Contractor or any of its Subcontractors or Sub-subcontractors.  As soon as practicable after the completion of all Punchlist items, Contractor shall remove, at its own cost, all Construction Equipment and other items not constituting part of the Facility (other than as required by Contractor to fulfil its obligations under Section 12.3A) and remove all waste material and rubbish brought on to or generated by Contractor from the Site and restore the Site in accordance with this Agreement.  In the event of Contractor’s failure to comply with any of the foregoing, Owner may accomplish the same; provided, however, that Contractor shall be liable for and pay to Owner (directly, by offset, or by collection on the Letter of Credit, at Owner’s sole option) all reasonable costs associated with such removal and/or restoration, including costs associated with permitting, transportation and disposal at an authorized location.

3.10        Safety and Security.  Contractor recognizes and agrees that safety and physical security are of paramount importance in the performance of the Work and that Contractor is responsible for performing the Work in a safe and physically secure manner.  No later than thirty (30) Days after the Effective Date, Contractor shall deliver to Owner a safety program for Owner’s approval, not to be unreasonably withheld.  Once Owner has approved Contractor’s safety program, Contractor shall seek approval from Owner of any material changes to such safety program. Contractor’s safety program shall specify the written policies and procedures for maintaining and supervising all environmental, health and safety precautions and programs in connection with the performance of the Work, including appropriate precautions and Work-specific detailed programs for areas in and around the Site and the handling, collecting, removing, transporting or disposing of Hazardous Materials in order to ensure prudent practice on the Site for the safety of all Persons on the Site.  Contractor further agrees to perform the Work in accordance with the safety and health rules and standards of Applicable Law (including OSHA) and such safety program, and Contractor shall assume all costs associated with compliance therewith.  Contractor’s safety program shall include the standards set forth in Attachment J.  Owner’s review and approval of Contractor’s safety program shall not in any way relieve Contractor of its responsibility regarding safety, and Owner, in reviewing and approving such safety program, assumes no liability for such safety program.  Contractor shall appoint one or more (as appropriate) safety representative(s) acceptable to Owner who shall be resident at the Site, have responsibility to immediately correct unsafe conditions or unsafe acts associated with the Work and the Facility, act on behalf of Contractor on safety and health matters, and participate in periodic safety meetings with Owner after Work has commenced on the Site.  Contractor further agrees to provide or cause to be provided necessary training and safety Construction Equipment to its employees, Subcontractors and Sub-subcontractors to ensure their compliance with the foregoing safety and health rules and standards and enforce the use of such training and Construction Equipment.  Contractor shall maintain all accident, injury and any other records required by Applicable Law or Contractor’s safety program and shall furnish Owner a Monthly summary of injuries and labor hours lost due to injuries.  Should Owner at any time observe Contractor, or any of its Subcontractors or Sub-subcontractors, performing the Work in an unsafe manner, or in a manner that may, if continued, become unsafe, then Owner shall have the right (but not the obligation) to require Contractor to stop the Work until such time as the manner of performing the Work has been rendered safe to the satisfaction of Owner; provided, however, that at no time shall Contractor be entitled to an adjustment of the Contract Price or Key Dates based on such work stoppage.  Contractor shall be responsible for the security, fencing, guarding, temporary facilities, lighting, and supervision each as required and described in Attachment A until all of the

requirements of Substantial Completion for an applicable Train have been satisfied.  Nothing in this Section 3.10 shall affect Contractor’s status as an independent contractor.  With respect to (i) the Site’s access requirements, restrictions and procedures, (ii) Owner’s safety and security rules and procedures and (iii) other such safety rules and procedures as required by the Site’s landowner or Applicable Law and Regulations, Contractor acknowledges that it has fully investigated and has taken such requirements, rules and procedures into account in planning the Work to be performed in accordance with the Key Dates.  Further, regarding Site access and performance of the Work on the Site, Contractor shall comply with any Site access, safety, security requirements, restrictions, rules and procedures imposed by (i) the Site’s landowner and (ii) Owner after Substantial Completion of each Train.  As such, Contractor shall not be entitled to a Change Order to adjust the Contract Price or Key Dates as a result of Contractor’s (including its Subcontractors and Sub-subcontractors) compliance with such access, safety and security requirements, rules and procedures, except to the extent of any material changes made thereto by the Site’s landowner subsequent to the Effective Date.

3.11        Emergencies.  In the event of any emergency endangering life or property in any way relating to the Work, the Facility or the Site, whether on the Site or otherwise, Contractor shall take such action as may be reasonable and necessary to prevent, avoid or mitigate injury, damage, or loss and shall, as soon as possible, report any such incidents, including Contractor’s response thereto, to Owner.  If Contractor fails to take such action and the emergency requires immediate action, then Owner, with or without notice to Contractor may, but shall be under no obligation to, take reasonable action as required to address such emergency.  The taking of any such action by Owner, or Owner’s failure to take any action shall not limit Contractor’s liability. Contractor shall reimburse Owner for the performance of any work or furnishing of any equipment or other items in connection with any emergency in an amount equal to the reasonable costs incurred by Owner in such performance of work or furnishing of equipment or other items.

3.12        Approvals, Certificates, Permits and Licenses.

A.        Contractor shall obtain the Permits listed in Attachment P as well as (i) those Permits for the Project that are required to be maintained in Contractor’s name and (ii) those Permits necessary to perform the Work (“Contractor Permits”), as well as cause its Subcontractors and Sub-subcontractors to obtain those Permits in (i) and (ii).

B.        Contractor shall provide information, assistance and documentation to Owner as reasonably requested in connection with the Permits to be obtained by Owner in Attachment Q.  Without limiting the generality of the foregoing, Contractor acknowledges that Owner is required to provide regular reports and other information to FERC during the design and construction of the Facility, and that the Facility will be subject to regular inspections by FERC staff, and continuous monitoring by inspectors providing reports to FERC.  Contractor shall provide continuing support services relating to the FERC and regulatory processes, including the preparation of all design and engineering documentation necessary to conform and update Owner’s FERC, TCEQ and other filings to the Scope of Work, either prior to or following the issuance of the final FERC Order for the Project.  Contractor shall also perform the engineering with respect to the Owner Permits in accordance with Exhibit A, and shall cooperate with FERC staff and inspectors, and take such actions as necessary to facilitate FERC monitoring and inspection programs.

C.        Contractor shall not be entitled to an adjustment to the Contract Price, Key Dates or Changed Criteria to the extent Owner’s failure to obtain a FERC Authorization or another Owner Permit is due to Contractor’s failure to comply with Section 3.12B or to cooperate with Owner or any relevant Governmental Instrumentality.

3.13        Books, Records and Audits.

A.        Contractor shall keep full and detailed books, construction and manufacturing logs, records, daily reports, accounts, schedules, payroll records, receipts, statements, electronic files, correspondence and other pertinent documents as may be necessary for proper management under this Agreement, as required under Applicable Law or this Agreement (“Books and Records”).  Contractor shall maintain all such Books and Records in accordance with generally accepted accounting principles applicable in the United States and shall retain all such Books and Records for a minimum period of time equal to the greater of: (i) three (3) years after Final Completion, (ii) such period of time as may be required under Applicable Law, or (iii) the time period required for resolution of all third-party claims arising out of or relating to this Agreement, the Work or the Facility.

B.        Upon reasonable notice, Owner, Lender, and Independent Engineer shall have the right to audit or to appoint an independent public accounting firm to audit Contractor’s Books and Records; provided,  however, with respect to an independent public accounting firm, such Lender, Independent Engineer and independent public accounting firm and their representatives shall first execute a confidentiality agreement with Contractor.  Contractor’s Books and Records may be audited as necessary to (i) validate all amounts billed under any Change Orders that are not a fixed price, and (ii) review and confirm safety records.  When requested by Owner, Contractor shall provide the auditors with reasonable access to all relevant Books and Records, and Contractor’s personnel shall cooperate with the auditors to effectuate the audit or audits hereunder.  The auditors shall have the right to copy such Books and Records at Owner’s expense.  Contractor shall bear all reasonable costs and expenses incurred by it in assisting Owner with audits performed pursuant to this Section 3.13.  Contractor shall include audit provisions identical to this Section 3.13 in all Subcontracts.  The restrictions in this Section 3.13B to the audit rights of Owner, Lender or Independent Engineer shall not control over any rights such parties have under Applicable Law, in discovery in any arbitration or litigation arising out of ARTICLE 18 or in any arbitration or litigation against Guarantor or in any litigation between Owner and any Governmental Instrumentality.

3.14        Tax Accounting.

A.        Within a reasonable period of time (not to exceed thirty (30) Days) following Contractor’s receipt of Owner’s written request therefor, Contractor shall provide Owner with any information regarding quantities, descriptions and sales prices of any Equipment installed on or ordered for the Facility and any other information, including Books and Records, subject to the extent of the audit rights in Section 3.13, as Owner may deem reasonably necessary in connection with the preparation of its tax returns or other tax documentation in connection with the Project or the determination of Equipment listed in

Attachment DD.  No access to the aforementioned information (including Books and Records) shall be granted to Owner’s tax consultant until such tax consultant has signed a confidentiality agreement with Contractor in accordance with the standard practice in the auditing industry for audits of this kind.

B.        Contractor acknowledges that Owner is pursuing ad valorem tax abatement through the Texas Comptroller of Public Accounts, and upon request, Contractor shall provide to Owner and Owner’s tax consultant access to documentation required or requested by the Texas Comptroller of Public Accounts or any other Governmental Instrumentality in order for Owner to perfect such abatement related to the sales price of Equipment, including Equipment sales price, price of fabrication and design specifications, installation labor costs and overhead and other indirect costs.  Documentation shall consist of asset name or Equipment reference number, a description of the asset, and amount charged by Contractor to Owner.  Contractor agrees to offer similar assistance to Owner toward any other federal, state or local program that is enacted and would allow for a reduction, rebate, abatement or exemption of (i) Taxes or (ii) Texas Sales and Use Tax on Equipment listed in Attachment DD.

3.15        Temporary Utilities, Roads, Facilities and Storage.

A.        Prior to Substantial Completion of the relevant Train and except for those utilities designated to be provided by Owner pursuant to ARTICLE 4, Contractor shall provide and pay for all utilities (e.g., electricity, water, communication, cable, telephone, waste and sewer) with respect to such Train, including all connections and substations, necessary for the performance of the Work, including installation, Permit and usage costs.

B.        Contractor shall construct and maintain temporary access and haul roads as may be necessary for the proper performance of this Agreement.  Roads constructed on the Site shall be subject to Owner’s approval, not to be unreasonably withheld.  Contractor shall provide Owner with sufficient office space at the time of Contractor’s mobilization at the Site to accommodate Owner’s Representative and support staff.  Contractor shall provide Owner with all office space, construction trailers, utilities, storage and warehousing, security, telephones, furnishings, and other temporary facilities required for their oversight of the Work, as set forth in more detail in Attachment A.

C.        All Equipment and other items or components thereof comprising part of the Work stored at a location other than on the Site shall be segregated from other goods, and shall be clearly marked as “Property of Rio Grande LNG, LLC”.

3.16        Subordination of Liens.  Contractor hereby subordinates any mechanics’ and materialmen’s liens or other claims or encumbrances that may be brought by Contractor against any or all of the Work, the Site,, the Train 3 Liquefaction Facility or the Facility to any liens granted in favor of Lender, whether such lien in favor of Lender is created, attached or perfected prior to or after any such liens, claims or encumbrances, and shall require its Subcontractors and Sub-subcontractors to similarly subordinate their lien, claim and encumbrance rights.  Contractor agrees to comply with reasonable requests of Owner for supporting documentation required by Lender, including any necessary lien subordination agreements, affidavits or other documents that

may be required to demonstrate that Owner’s property and the Site are free from liens, claims and encumbrances arising out of the furnishing of Work under this Agreement.  Nothing in this Section 3.16 shall be construed as a limitation on or waiver by Contractor of any of its rights under Applicable Law to file a lien or claim or otherwise encumber the Project as security for any undisputed payments owed to it by Owner hereunder that are past due, provided that such lien or claim is subordinate to any liens granted in favor of Lender.

3.17        Hazardous Materials.  Contractor shall not, nor shall it permit or allow any Subcontractor or Sub-subcontractor to, bring any Hazardous Materials on the Site and shall bear all responsibility and liability for such materials; provided, however, that Contractor may bring onto the Site such Hazardous Materials as are necessary to perform the Work so long as the same is done in compliance with Applicable Law, Applicable Codes and Standards, and the requirements specified in Attachment J, and Contractor shall remain responsible and liable for all such Hazardous Materials.  If Contractor or any Subcontractor or Sub-subcontractor encounters Pre-Existing Hazardous Materials at the Site, Contractor and its Subcontractors and Sub-subcontractors shall immediately stop Work in the affected area and notify Owner. Contractor and its Subcontractors and Sub-subcontractors shall not be required to resume Work in connection with such Pre-Existing Hazardous Materials or in any area affected thereby until Owner has: (i) obtained any required permits or other approvals related thereto; and (ii) delivered to Contractor a written notice (x) specifying that any affected area is or has been rendered suitable for the resumption of Work in compliance with Applicable Law or (y) specifying any special conditions under which such Work may be resumed in compliance with Applicable Law.  To the extent that any such suspension adversely affects Contractor’s or its Subcontractors’ or Sub-subcontractors’ cost or time for performance of the Work in accordance with the requirements of this Agreement, Contractor shall be entitled to an appropriate Change Order pursuant to Section 6.2A.8. If under such circumstances Contractor or any of its Subcontractors or Sub-subcontractors fail to stop Work and notify Owner, Contractor shall be responsible and liable to Owner in accordance with Section 17.1B for all damages, costs, losses and expenses to the extent relating to such failure, subject to an aggregate cap of [***] U.S. Dollars (U.S.$[***]) and Owner hereby releases Contractor, its Subcontractors or Sub-subcontractors from any such liability in excess thereof.  For the avoidance of doubt, any such liability of Contractor shall not exceed [***] U.S. Dollars (U.S.$[***]) in the total cumulative aggregate under the Train 3 EPC Agreement and this Agreement.

3.18        Quality Assurance.  No later than thirty (30) Days after the Effective Date, Contractor shall submit to Owner for its review and approval, not to be unreasonably withheld, a Facility-specific quality control and quality assurance plan and an inspection plan detailing Contractor’s quality plan (“Quality Plan”) and Subcontractor source inspection plan as required by Attachment Y.  No later than thirty (30) Days after the Effective Date, Contractor shall submit to Owner for its approval, not to be unreasonably withheld, detailed inspection and test plans and supporting construction procedures as required by Attachment Y.  Prior to the commencement of the Work related to each Train, detailed quality assurance and quality control procedures and plans applicable to that portion of the Work shall be issued to Owner in accordance with Attachment Y.  Owner’s review and approval of Contractor’s Quality Plan, Subcontractor source inspection plan, detailed construction inspection and test plans and supporting construction procedures, and detailed quality assurance and quality control procedures and plans shall in no way relieve Contractor of its responsibility for performing the Work in compliance with this Agreement.  As

part of such plans, Contractor agrees that it shall keep a daily record of inspections performed, and Contractor shall make available at the Site for Owner’s and Lender’s (including Independent Engineer) review a copy of all such inspections.

3.19        Reports and Meetings.

A.        Reports.  Contractor shall provide Owner with one (1) hardcopy and one (1) electronic copy of the following reports and such other information required in this Agreement:

1.        minutes for all weekly status and Project-related meetings with Owner within five (5) Business Days following such meeting;

2.        safety or environmental incident reports within three (3) Business Days following the occurrence of any such incident (including “near miss” incidents where no individual was injured or property was damaged), except for any safety or environmental incident involving a significant non-scheduled event such as LNG or natural gas releases, fires, explosions, mechanical failures, unusual over-pressurizations or major injuries which shall be provided to Owner within eight (8) hours of the occurrence of such incident; provided, however, notification shall be provided to Owner immediately if any safety or environmental incident threatens public or employee safety, causes significant property damage, or interrupts the Work;

3.        weekly (or such longer duration as otherwise agreed by Owner in writing) progress reports (“Weekly Progress Reports”), in a form reasonably acceptable to Owner and containing the information required in Attachment X, which shall be provided one (1) Day prior to the weekly progress meeting and shall cover all activities up to the end of the previous week; and

4.        Monthly progress reports, in a form reasonably acceptable to Owner and containing the information required in Attachment X (“Monthly Progress Reports”).  Contractor shall provide the Monthly Progress Report no later than ten (10) Days after the end of each Month, and the Monthly Progress Report shall cover activities up through the end of the previous Month.  Contractor shall provide Owner with the number of copies of such reports and shall arrange for the distribution thereof as Owner may reasonably request.

5.        At Owner’s request, Contractor shall consolidate any or all reports and other documentation required under this Section 3.19 (or other provisions under this Agreement) for Train 1 and Train 2 with the reports required under similar provisions for Train 3 in the Train 3 EPC Agreement

B.        Meetings.

1.        A weekly progress meeting with Owner shall occur every week, on a weekday to be agreed to by the Parties, at the Site, or at an alternate site agreeable to the Parties, to discuss the matters described in Attachment X for the prior week. 

The meetings shall be attended by Contractor and those Contractor employees and Subcontractors reasonably requested by Owner.

2.        A Monthly progress meeting shall be held within  one (1) week after the issuance of the Monthly Progress Report at the Site, or at an alternate site agreeable to Owner and Contractor, to discuss the matters described in Attachment X for the prior Month and to review the Monthly Progress Report for that Month with Owner.  The Monthly progress meeting shall be attended by the Owner Representative, the Contractor Representative and those Contractor employees, Subcontractors and Sub-Subcontractors reasonably requested by Owner.  The meetings may be attended by any authorized representative or agent of Lender or the Independent Engineer.

3.20       Payment.  Contractor shall timely make all payments required to be paid to Owner pursuant to the terms of this Agreement.

3.21       Commercial Activities.  Neither Contractor nor its employees shall establish any commercial activity or issue concessions or permits of any kind to third parties for establishing commercial activities on the Site or any other lands owned or controlled by Owner; provided, however, temporary lunch wagons and vending machines may be permitted upon prior approval by Owner, not to be unreasonably withheld.

3.22       Title to Materials Found.  As between Owner and Contractor, the title to water, soil, rock, gravel, sand, minerals, timber, and any other materials developed or obtained in the excavation or other operations of Contractor, any Subcontractor or Sub-subcontractor and the right to use said materials or dispose of same is hereby expressly reserved by Owner.  Contractor may use in the Work mesquite and top soil and fill for leveling, provided that such materials comply with the requirements of this Agreement.  Notwithstanding the above, Contractor shall remain liable for, at its sole cost and expense, the disposal of all materials developed or obtained in the excavation or other operations of Contractor, any Subcontractor or Sub-subcontractor (excluding Pre-Existing Hazardous Materials and Unforeseen Subsurface Conditions, if any).

3.23       Survey Control Points and Layout.  Contractor shall establish all survey control points and layout the entire Work in accordance with the requirements of this Agreement, which shall be based on the survey control points established by Owner pursuant to Section 4.5.  Contractor acknowledges that, prior to commencement of the Work, it has independently confirmed with a surveyor, licensed in the state of Texas, the proper placement of such survey control points.  If Contractor or any of its Subcontractors, Sub-subcontractors or any of the representatives or employees of any of them move or destroy or render inaccurate the survey control points provided by Owner, such control points shall be replaced by Contractor at Contractor’s own expense.

3.24       Cooperation with Others. Subject to the provisions of this Agreement, including Section 4.3, Contractor acknowledges that Owner, its consultants and professionals described in Section 2.5D and other contractors and other subcontractors or other Persons may be working at the Site during the performance of this Agreement.  Owner shall, and shall require that such consultants and professionals described in Section 2.5D and other contractors and other

subcontractors or other Persons working at the Site (except with respect to Contractor’s work performed under the Train 3 EPC Agreement) during the performance of this Agreement prior to Substantial Completion of each Train, at all times while on the Site comply with Contractor’s safety program approved by Owner pursuant to Section 3.12 that is applicable to the Site.  To minimize interference with the work of any other parties, Contractor and its Subcontractors and Sub-subcontractors shall not, unless permitted by Owner in writing, perform the Work in the restricted work areas set forth in Attachment Z.  No later than thirty (30) Days after the Effective Date, Contractor shall provide to Owner, for its review and comment, a Site access plan designating the entrances and exits to the Site that will be used during construction and providing Contractor’s proposed Site access policies, all in accordance with the requirements of this Agreement and Attachment J.  In addition, Contractor shall reasonably cooperate and coordinate its Work with Owner’s other contractors performing services on the Site (and Contractor shall fully cooperate and coordinate its Work with its separate work under the Trains 1 and 2 EPC Agreement) and shall not obstruct or restrict Owner’s access to and on the Site.  Owner’s Site access shall in no way relieve Contractor from its obligations to carry out the Work in accordance with this Agreement.

3.25       Responsibility for Property.  Contractor shall plan and conduct its operations so that neither Contractor nor any of its Subcontractors or Sub-subcontractors shall (i) enter upon private lands (other than the Site) or water bodies in their natural state unless authorized by the owners of such lands; (ii) enter any restricted areas set forth in Schedule A-1; (iii) close or obstruct any utility installation, highway, waterway, harbor, road or other property unless and until applicable Permits have been obtained and, to the extent such items are located on the Site, Owner’s permission has been obtained; (iv) disrupt or otherwise interfere with the operation of any portion of any pipeline, telephone, ship or barge operation, dredging activities, activities of the Port Authority Indemnified Parties, conduit or electric transmission line, railroad, ditch, navigational aid, dock or structure unless otherwise specifically authorized by Owner in writing, the appropriate entity or authority, or otherwise provided in Attachment A; (v) damage any property listed in (iii) or (iv); and (vi) damage or destroy maintained, cultivated or planted areas or vegetation such as trees, plants, shrubs, shore protection, paving, or grass adjacent to the Site.  The foregoing includes damage arising from performance of the Work through operation of Construction Equipment or stockpiling of materials.  Contractor shall be responsible for all damages, costs, losses and expenses arising out of non-compliance with this Section 3.25 (in accordance with the indemnification and defense obligations set forth in Section 17.1I) and shall, as soon as reasonably possible, restore at its own cost and expense such property to the condition it was in before such damage.  If damage occurs to Train 3 prior to substantial completion of Train 3, liability for such damage shall be governed by the Train 3 EPC Agreement.  Contractor and its Subcontractors and Sub-subcontractors shall coordinate and conduct the performance of the Work so as to not unreasonably interfere with or disrupt the use and peaceful enjoyment of any adjacent property to the Site.

3.26       Explosives.  Explosives shall not be transported to the Site without Owner’s prior approval.  In the event that Contractor receives such approval, explosives shall be transported to the Site only when required to perform the Work under this Agreement and with at least thirty (30) Days’ prior notice to and approval of Owner.  Contractor shall be responsible for properly purchasing, transporting, storing, safeguarding, handling and using explosives required to perform the Work under this Agreement.  Contractor shall employ competent and qualified personnel for

the use of explosives.  Residual surplus explosives shall be promptly removed from the Site and properly disposed of by Contractor.  Contractor shall strictly comply with Applicable Law and Applicable Codes and Standards in the handling of explosives pursuant to this Agreement (including the U.S. Patriot Act of 2001 and any and all rules and regulations promulgated by the U.S. Department of Homeland Security and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives), shall perform all obligations and obtain all Permits with respect to explosives, and shall develop and file and provide copies to Owner of all documentation regarding same.

3.27       No Interference with Train 1.

A.       Contractor understands that upon Substantial Completion of Train 1, Train 1 will be under full commercial operation and it is the Parties’ intent that the performance of the Work and Contractor’s other obligations under this Agreement, including with respect to the Train 2 Work, will not interfere with the commercial operation of Train 1, except to the extent and for the durations specified in Attachment HH.  No later than fourteen (14) Days’ prior to the time that Contractor plans to perform such interfering Work, Contractor shall propose a detailed plan setting out how Contractor intends that such interfering Work will be performed to minimize, to the greatest extent reasonably possible, interference with the operation of Train 1, while at all times complying with the requirements in Attachment HH.  Prior to performing such Work, Owner and Contractor shall mutually agree in writing on a final plan for Contractor to execute such Work.  Owner may, in its sole discretion, subsequently prohibit such interfering Work from being performed in accordance with the final plans agreed by the Parties, but in such case, Contractor shall be entitled to a Change Order to the extent permitted under Sections 6.2A.1 and 6.8.

B.       It is the Parties’ intent that, except for the activities listed in Attachment HH, the performance of the Work and Contractor’s other obligations under this Agreement will not interfere with the operation of Train 1 after it has achieved Substantial Completion.  During the performance of the Work, should an unforeseeable situation arise that requires access to or has the potential of interfering with the operation of Train 1, Contractor shall, except in an emergency endangering property or any Persons, give Owner written notice as soon as possible but no later than thirty (30) Days’ prior to the time that Contractor plans to perform such interfering Work, detailing a plan that proposes in detail how Contractor intends that such Work will be performed to minimize, to the greatest extent reasonably possible, interference with the operation of Train 1.  Such plan proposed by Contractor shall be the least disruptive to operations of Train 1, unless such plan is disproportionately expensive when compared to the impact on the operations of Train 1.  Emergency actions are governed by Section 3.11.  Prior to performing such Work, Owner and Contractor shall mutually agree in writing on a final plan for Contractor to execute such interfering Work.  Owner may, in its sole discretion, subsequently prohibit such interfering Work from being performed in accordance with the final plans agreed by the Parties, but in such case, Contractor shall be entitled to a Change Order to the extent permitted under Sections 6.2A.1 and 6.8.

C.       Contractor acknowledges the risks, hazards and constraints relating to performing Work adjacent to, and within the confines of operating facilities, including

Train 1 after it has achieved Substantial Completion.  This requires significant planning and attention to safe work practices to ensure the safety and reliability of the operating facilities and the safety of the construction and operational personnel.  Such detailed planning activities and safe work plans shall be provided to Owner for its approval, not to be unreasonably withheld, within a reasonable period of time prior to performing any Work affecting the operation of the Facility.

3.28       Equipment Not Incorporated into the Facility.  If, after Substantial Completion for Train 2 and prior to Final Completion, Contractor has any Equipment that it purchased for the Facility but did not incorporate into the Facility, Owner has the option of either purchasing such Equipment at fair market value, plus applicable sales tax (unless an applicable exemption or direct payment  permit exemption certificate is provided to Contractor), and customs and import duties if the item was intended for re-export, or requiring that Contractor haul off such Equipment at Contractor’s own cost and expense (and if required to haul off such Equipment, Owner shall transfer title to such Equipment to Contractor); provided that, if such Equipment was purchased on a basis other than a lump sum basis (such as on a time and material basis under a Change Order), then if Owner elects to take such Equipment, it may take such Equipment at no cost to Owner, and title to such Equipment shall remain with Owner in accordance with Section 8.1B.

3.29       Operation Personnel.

A.       Until Substantial Completion of the applicable Train, Owner’s operating personnel shall be under the control of and supervised by Contractor, and Contractor shall (subject to Owner’s indemnification obligations under Section 17.2) be fully responsible for the acts and omissions of such personnel; provided, however, notwithstanding the foregoing, such operating and maintenance personnel shall remain employees or agents of Owner and shall not be considered employees of Contractor for any reason.

B.       To the extent not set forth in Attachment A, Contractor shall, no later than [***]  ([***]) Days prior to the Guaranteed Substantial Completion Date of the applicable Train, prepare for Owner’s review a proposed plan regarding the utilization of Owner’s operation personnel during Commissioning and for the conduct of Performance Tests and any other tests.  Each such plan shall be prepared to avoid any impact on the operation of a Train after Substantial Completion and to take into account Owner’s operating and maintenance procedures, the number of operating and maintenance personnel available to Owner for participation in pre-commissioning, Commissioning, start-up and Performance Testing, safety issues for the Train and the type of activities to be performed.  Such plan shall be mutually agreed-upon by the Parties in writing no later than forty-five (45) Days after Owner’s receipt of Contractor’s proposed plan.  Nothing in this Agreement, including this Section 3.29 or Section 3.2H, shall be interpreted to create a master-servant or principal-agent relationship between Contractor and any of Owner’s operation or maintenance personnel.

3.30       Compliance with Real Property Interests.  Contractor shall, in the performance of the Work, comply, and cause all Subcontractors and Sub-subcontractors to comply, with any easement, lease, right-of-way or other property interests that are clearly delineated in Attachment

Z and affect or govern the Site or any other real property used for the purposes of completing the Work.

3.31       Taxes.  Subject to Section 7.1, the Contract Price includes all Taxes imposed on or payable by Contractor, its Subcontractors and Sub-subcontractors in connection with the Work.  Contractor shall be responsible for the payment of all Taxes imposed on or payable by Contractor, its Subcontractors and Sub-subcontractors in connection with the Work.

3.32       Electronic File Sharing Site.  Commencing on the Effective Date and until the expiration of the Defect Correction Period, Contractor shall create and maintain an electronic file sharing site that can be accessible by Owner, Owner’s Affiliates, Lenders, Independent Engineer and any other Persons designated by Owner, and their respective employees, officers and directors (using their own or their respective company’s computers or electronic devices). Such electronic file share site shall be subject to approval by Owner, not to be unreasonably withheld. Contractor shall upload, in native format, onto such electronic file sharing site all Work Product, reports, schedules, Drawings, Specifications and project specific policies and procedures (other than Invoices or Change Orders) contemporaneously with, or immediately after, such document, data and information was submitted to Owner. Such electronic file sharing site shall not be a substitute for the submission of documents to Owner as required herein, but instead shall serve as an additional service provided to Owner enabling Owner, Owner, Owner’s Affiliates, Lenders, Independent Engineer and any other Persons designated by Owner to have another source of access to such documents, data and information.

ARTICLE 4

OWNER’S RESPONSIBILITIES

Owner shall comply with the following provisions in a timely manner:

4.1       Payment.  Owner shall timely pay the Contract Price in accordance with the provisions of ARTICLE 7 hereof.

4.2       Permits.    Owner shall be responsible for obtaining and maintaining (i) the Permits listed in Attachment Q, (ii) those Permits for the Project that are required to be maintained in Owner’s name and (iii) those Permits required for the operation of the Facility.  To the extent Owner has not obtained any Permits prior to the Effective Date, Owner shall obtain such Permits in accordance with the schedule contained in Attachment Q and Owner shall provide Contractor with copies of such Permits within five (5) Business Days after obtaining them.

4.3       Access on the Site.

A.       Owner shall provide Contractor with access on the Site to the extent necessary to perform any LNTP Work and, in any event, upon issuance of NTP.  Subject to Sections 3.24 and 3.25, such access shall be sufficient to permit Contractor to progress with construction on a continuous basis without material interruption or interference.

B.       Contractor understands that Owner may choose to develop the Expanded Facility under one or more separate agreements (the “Expanded Facility Work”).  Such other agreements may or may not involve Contractor and may be performed during the

 

 

course of the completion of the Work covered under this Agreement. If such Expanded Facility Work does not involve Contractor, and as a result of such concurrent activities, impacts the performance of the Work on the Site, then Contractor shall be entitled to a Change Order to the extent such Expanded Facility Work adversely affects the Key Dates or Contractor’s costs of performance of the Work to the extent permitted in Section 6.2A.1 and 6.8, provided that Contractor complies with the notice and Change Order request requirements set forth in Sections 6.2 and 6.5.

4.4       Operation Personnel.  Owner shall retain sixty (60) competent operating personnel (who are capable of being trained by Contractor) to assist Contractor with the commissioning and start-up  of the Facility under the supervision of Contractor during commissioning as set forth in Attachment T and to operate the Facility prior to Substantial Completion of each Train under the supervision of Contractor as set forth in Attachment A and Attachment V (Owner’s “operation personnel”).  Until Substantial Completion of the applicable Train, such personnel shall be under the control of and supervised by Contractor in accordance with Section 3.29, subject to Owner’s indemnity obligations in Section 17.2.

4.5        Legal Description and Survey.  Owner shall provide to Contractor for Contractor’s information a survey of the Site showing the boundaries of the Site and three (3) survey control points, the proper placement of which Contractor has confirmed as set forth in Section 3.23.

4.6        Owner-Furnished Items.

A.     Rely Upon Information. Owner shall be responsible for the Rely Upon Information identified in Attachment BB.  Should Contractor discover an error, omission or inaccuracies in such information, Contractor shall be entitled to a Change Order to the extent permitted under Sections 6.2A.9 and 6.8.

B.     Owner-Furnished Items.  Owner shall, at no cost to Contractor, provide the items listed in Attachment V (“Owner-Furnished Items”) within the times and at the locations set forth therein, subject to the conditions specified therein.

C.     Natural Gas Feed to Achieve Substantial Completion.  As between Owner and Contractor under this Agreement and subject to Section 4.6D, Owner shall procure and make natural gas feed available for the Commissioning, start-up, cool down and testing of each Train (including natural gas utilized in the initial cool-down) subject to the conditions in Attachment V.  The natural gas feed to each Train will meet the pressure, temperature and quality requirements set forth in Schedule A-2.  Such natural gas feed shall be made available by (or on behalf of) Owner at the inlet facilities to be constructed by Contractor as part of the Work. As between Owner and Contractor under this Agreement, Owner shall procure, at its sole cost, all natural gas feed in order for Contractor to achieve Substantial Completion of each Train.  Contractor shall use GECP to minimize the amount of natural gas flaring or venting (and at all times complying with any restrictions required under Applicable Law) that is necessary to achieve Substantial Completion, and the start-up, Commissioning and testing procedures agreed upon by the Parties shall be developed and administered in a manner to minimize natural gas flaring and venting.

D.     Feed Gas Delivery.

1.      In connection with each Train, Contractor shall give its best estimate of when natural gas feed is required to produce the LNG necessary to achieve RLFC of such Train, and such estimate shall be given in a written notice with each RLFC Window Period notice as set forth in Section 11.2B.  Such notice shall include the quantities of feed gas needed, including a range of Days and range of flows for each Day.

2.      For all other circumstances that Contractor may require natural gas feed up to the achievement of Substantial Completion of a Train, Contractor shall provide Owner:

(i)    written notice at least sixty (60) Days prior to Contractor needing its first deliveries of natural gas feed including a range of Days and a range of flows for each Day which Contractor, using GECP, believes it will need for delivery of natural gas feed; and

(ii)    a second written notice at least thirty (30) Days prior to Contractor needing its first deliveries of natural gas feed, with an updated forecast of the Days and amounts of natural gas feed deliveries (within the ranges provided by Contractor in its initial notice delivered pursuant to Section 4.6D.2(i)).

3.      Provided Contractor provides notice in accordance with Section 4.6D.1 and 4.6D.2, Owner will procure such natural gas feed subject to the conditions in Attachment V;  provided, however, notwithstanding anything to the contrary in this Agreement, Owner is not obligated to provide any natural gas feed for Train 1 and Train 2 prior to the dates set forth in Attachment V.

E.    LNG Tankers.  Owner will provide LNG Tanker capacity in accordance with Section 11.2, provided, however, notwithstanding anything to the contrary in this Agreement, Owner is not obligated to provide any LNG Tanker capacity for Train 1 or Train 2 prior to the dates set forth in Attachment V.

F.    Electrical Power.  Owner shall procure and make permanent electric power available for the operation of such Train in accordance with Attachment V.  Such electric power shall be made available by (or on behalf of) Owner at the Pompano switch yard to be located at the Site.

4.7        Owner Representative.  Owner designates [***] as the Owner Representative.  Notification of a change in Owner Representative shall be provided in advance, in writing, to Contractor.

4.8        Texas Sales and Use Tax.

A.    Sales and Use Taxes Exemption Certificates on Equipment.

1.      For Texas Sales and Use Tax, this Agreement shall be considered to be a separated contract for the construction of new non-residential real property as defined under Applicable Law, including 34 Tex. Admin Code Rule § 3.291(a)(13).  Contractor shall ensure that all Subcontracts are separated for Sales and Use Tax purposes.

2.      The associated portion of the Contract Price attributable to each piece of Equipment is located in Attachment DD, which has been prepared to satisfy the requirements of Applicable Law of Texas for a separated contract.  Contractor shall, with respect to any Change Order entered into between Owner and Contractor that results in an update to Attachment DD, provide such update to Owner for its review as part of the documentation required in ARTICLE 6.

3.      Prior to issuance of NTP or any LNTP directing Contractor to procure any Equipment, and to the extent not already included in Attachment DD, Owner shall issue a Texas direct pay exemption certificate to Contractor, and Contractor shall not invoice Owner for any Texas Sales and Use Tax on Equipment.  Pursuant to direct pay permit status, Owner shall pay applicable Texas Sales and Use Tax on Equipment directly to the State of Texas.  Contractor shall provide the documents and information necessary to allow the Owner to properly determine this tax liability.  Contractor shall maintain for Owner’s review copies of exemption certificates and other similar documentation necessary to support all Texas Sales and Use Tax exemptions that may be available to Owner, Contractor or any Subcontractor or Sub-subcontractor in connection with the Work.

4.      Contractor shall reasonably cooperate with Owner to minimize any and all Texas Sales and Use Tax relating to the Project.  If Contractor or any Subcontractor or Sub-subcontractor incurs any Texas Sales and Use Tax on any items of Equipment listed in Attachment DD for which Owner provided Contractor with a valid direct pay exemption certificate, Contractor shall be responsible for the payment of such Texas Sales and Use Tax without reimbursement by Owner and Contractor shall indemnify, defend and hold harmless any and all Owner Indemnified Parties from and against any claims by a Governmental Instrumentality for such Texas Sales and Use Tax.

B.    Additional Contractor Texas Sales and Use Tax Responsibilities.  For Texas Sales and Use Tax purposes, Contractor shall be considered a retailer of all Equipment incorporated into the Work. Contractor shall issue a valid Texas Sales and Use Tax resale exemption certificate for such Equipment to its Subcontractors, and Contractor shall not pay, consistent with such exemption certificate, any sales and use tax on such Equipment to Subcontractors.  Notwithstanding the foregoing, Contractor shall remain responsible for the payment of all Taxes on account of the Work, including Texas Sales and Use Tax on any purchase, lease or rental of construction equipment and on any other purchases related to Work other than the Equipment.

C.    Taxes on Delivered Property.  Owner shall be responsible for all property tax on Equipment that has been delivered to the Site and laydown areas.

4.9        Hazardous Materials.  If Pre-Existing Hazardous Materials are discovered at the Site, Owner shall, at the sole cost, expense and liability of Owner (except for those costs, damages, losses and expenses for which Contractor is responsible and/or liable under Section 3.17), remediate, remove, transport, and dispose of such Pre-Existing Hazardous Materials.

4.10       LNG Tanker Release.  Owner shall endeavor to obtain a release of Contractor Indemnified Parties and Owner Indemnified Parties from the owner of any LNG Tanker and related LNG cargo from any and all damages, losses, costs and expenses arising out of or resulting from claims for damage to or destruction of an LNG Tanker and loss of the related LNG cargo or personal injury or death of any employee, officer or director employed by the company operating, owning or leasing such LNG Tanker or owning the related LNG cargo in connection with the delivery of LNG of any LNG Tanker to the Project where such damage, destruction, loss, injury or death occurs prior to Substantial Completion of the applicable Train.  Owner shall endeavor to obtain a release which shall apply regardless of the cause of such damage, destruction, injury or death, including the sole or joint negligence, breach of contract or other basis of liability of any member of the Contractor Indemnified Parties and any member of the Owner Indemnified Parties.

ARTICLE 5

COMMENCEMENT OF WORK, KEY DATES, AND SCHEDULING OBLIGATIONS

5.1        Commencement of Work.  Upon Contractor’s receipt from Owner of an LNTP or NTP, Contractor shall immediately commence with the performance of the Work specified in such LNTP or NTP.

5.2         Limited Notice to Proceed/Notice to Proceed.

A.    Limited Notice to Proceed.  On the Effective Date, Owner shall issue an LNTP authorizing and requiring Contractor to commence performance of the Work described in Schedule H-3 (“LNTP No. 1”), subject to the maximum cost agreed upon by the Parties as set forth in LNTP No. 1 (and such maximum cost may be increased by written agreement of the Parties).  All Work performed under LNTP No. 1 shall be performed in accordance with the terms and conditions of this Agreement.  Contractor shall be paid for such LNTP No. 1 Work pursuant to the terms and conditions of this Agreement and LNTP No. 1, with all payment for Work under LNTP No. 1 credited against the Contract Price.

B.    Additional LNTPs.  At any time prior to the date of issuance of NTP, Owner may issue additional LNTPs using the form attached hereto as Schedule H-1, which shall authorize and require Contractor to commence performance of a specified portion of the Work (provided that the Parties must mutually agree to any LNTPs that require procurement of Equipment or construction Work). All Work performed under such LNTP shall be performed in accordance with the terms and conditions of this Agreement. An LNTP shall specify the maximum total cost of such specified Work, and Contractor shall be paid for such specified Work pursuant to the terms and conditions of this Agreement, with the payments under such LNTP credited against the Contract Price.

C.    With respect to any LNTP that is issued by Owner, Owner shall not be liable for any cancellation payments under an LNTP if Owner does not issue NTP, unless Owner issued an LNTP that included the ordering of Equipment and such cancellation charges are specifically agreed upon in such LNTP.

D.    Notice to Proceed.  Unless otherwise specifically set forth in an LNTP, Contractor shall not commence performance of the Work until Owner issues NTP authorizing the same pursuant to the terms and conditions of this Agreement.  Upon Contractor’s receipt from Owner of NTP, Contractor shall immediately commence with the performance of the Work.  NTP shall be issued in the form attached hereto as Schedule H-2. Owner shall not issue NTP until the following conditions precedent have been fulfilled or waived by Contractor:

1.      Owner has furnished Contractor with documentation demonstrating Owner has sufficient funds to fulfill its payment obligations under this Agreement as payments become due hereunder, or Owner has obtained firm commitments from Lenders that are sufficient (when taken together with Owner’s funds and the amount of equity that has been committed to Owner) to fulfill such payment obligations under this Agreement, including (a) satisfaction, or waiver by Lenders, of all applicable conditions precedent to the occurrence of the closing date of the financing, which shall be prior to or contemporaneous with the issuance of the NTP, and (b) a signed declaration by an officer of Owner certifying that the credit agreement with respect to such financing has been executed by Owner and Lenders, to be delivered prior to or contemporaneously with NTP;

2.      Owner has provided, or is able to provide, Contractor with access on the Site in accordance with Section 4.3;

3.      Owner has obtained all Owner Permits which are shown in Attachment Q as required to be obtained prior to the issuance of the NTP;

4.      Owner has made payment to Contractor of all undisputed amounts due and owing as of the date of NTP that were invoiced in connection with Contractor’s performance of the LNTP Work; and

5.      If Owner fails to issue NTP on or before the Second NTP Deadline, the Parties have agreed to the adjustments to the Contract Price and Guaranteed Substantial Completion Dates as provided in Section 5.2E.2, and shall execute the applicable Change Order.

▇.    ▇▇▇▇▇ in NTP.  In the event Owner fails to issue NTP in accordance with Section 5.2D on or before January 2, 2020 (the “Initial NTP Deadline”), then Contractor shall be entitled to a Change Order as set forth in this Section 5.2E.

1.      If Owner issues NTP after the Initial NTP Deadline but on or before April 22, 2020 (the “Second NTP Deadline”), then Contractor shall be entitled to a Change Order adjusting the Contract Price (including the pricing of any Additional Work Options elected by Owner), as applicable, upward in the applicable amount set forth

in Schedule C-5.  Such adjustment to the Contract Price shall be Contractor’s sole and exclusive remedy for Owner’s delay in issuing NTP after the Initial NTP Deadline but prior to the Second NTP Deadline.  For the avoidance of doubt, Owner’s delay in issuing NTP as described in this Section 5.2E.1 shall not under any circumstances result in a Change Order adjusting the Guaranteed Substantial Completion Date.

2.      If Owner desires to issue NTP after the Second NTP Deadline, Contractor shall, at Owner’s request, provide its revised proposal for the Work, including revised Contract Price and/or pricing for Additional Work Options and/or Guaranteed Substantial Completion Dates. If Owner agrees to such proposal, all elements of the agreed changes shall be set forth in a Change Order, provided that Contractor shall not be entitled to an adjustment to the Contract Price or to an adjustment to the Guaranteed Substantial Completion Dates for any (i) changes in design, quantities or Equipment (unless Owner directs such changes in design, quantities or Equipment through a Change Order) or (ii) errors or omissions of Contractor (other than errors or omissions in Contractor’s assumptions related to a change in market conditions occurring after the end of the Second NTP Deadline).  Such adjustment to the Contract Price and Guaranteed Substantial Completion Dates shall be Contractor’s sole and exclusive remedy for Owner’s delay in issuing NTP after the Second NTP Deadline (except as set forth in Section 5.2E.3).

3.      If Owner fails to issue NTP on or before April 22, 2021 (the “Final NTP Deadline”), Contractor may terminate this Agreement without liability to Owner, provided that Contractor issues written notice to Owner within seven (7) Days after the Final NTP Deadline stating its intent to terminate this Agreement and Owner has not, within thirty (30) Days after receipt of such notice, issued NTP in accordance with Section 5.2D.  Notwithstanding the foregoing, Contractor may not terminate this Agreement if Contractor is performing Work under an LNTP.  In the event of such termination under this Section 5.2E.3, Contractor shall have the rights (and Owner shall make the payments) provided for in Section 16.2 in the event of an Owner termination for convenience.

F.    Contractor shall not be entitled to any increase in the Contract Price or any adjustment to the Guaranteed Substantial Completion Dates as a result of Owner issuing NTP on any date prior to the Initial NTP Deadline, and Contractor shall not be entitled to any adjustment to the Guaranteed Substantial Completion Dates as a result of Owner issuing NTP on any date after the Initial NTP Deadline but prior to the Second NTP Deadline.  Notwithstanding the forgoing, if Owner issues NTP prior to the expiration of the Minimum LNTP No. 1 Performance Period, Contractor shall be entitled to increase the Guaranteed Substantial Completion Dates a Day for every Day that Owner issues NTP prior to date on which the Minimum LNTP No. 1 Performance Period expires.  The “Minimum LNTP No. 1 Performance Period” is [***] ([***]) Days.

5.3        Key Dates.  The Key Dates may only be adjusted by Change Order as provided under this Agreement.

A.    Guaranteed Substantial Completion Dates.  Contractor shall achieve:

1.      Substantial Completion of Train 1 no later than [***] ([***]) Days following Contractor’s receipt of NTP (“Guaranteed Train 1 Substantial Completion Date”); and

2.      Substantial Completion of Train 2 no later than [***] ([***]) Days following Contractor’s receipt of NTP (“Guaranteed Train 2 Substantial Completion Date”),

each a “Guaranteed Substantial Completion Date” and collectively, the “Guaranteed Substantial Completion Dates.”  The Guaranteed Substantial Completion Dates shall only be adjusted by Change Order as provided under this Agreement.

B.    Final Completion Date.  Contractor shall achieve Final Completion no later than [***] ([***]) Days after achieving Substantial Completion of Train 2 (“Final Completion Date”).  The Final Completion Date shall only be adjusted by Change Order as provided under this Agreement.

5.4        CPM Schedule.

A.    CPM Schedule.  No later than thirty (30) Days after the Effective Date, Contractor shall prepare and submit to Owner for Owner’s review and approval, not to be unreasonably withheld: (i) a detailed level 3 resource/man-hour loaded critical path method schedule for the Work using the latest version of Primavera Project Planner (“Primavera Project Planner”) and meeting all requirements of this Section 5.4A (such schedule, once approved by Owner, is hereinafter referred to as the “CPM Schedule”) and (ii) a detailed resource plan generated by the CPM Schedule and developed in accordance with Attachment B and Attachment X.  Such submission to Owner of the CPM Schedule shall be in hard copy and native electronic format. The CPM Schedule shall be consistent with the Key Dates and shall represent Contractor’s best judgment as to how it shall complete the Work in compliance with the Guaranteed Dates.  The CPM Schedule shall, at a minimum, be detailed at a level 3 (with each activity containing Work for on discipline or craft having a maximum duration of twenty (20) Days, except in limited circumstances when, due to the nature of the activity, a longer duration is necessary) for all activities for the Facility (including engineering, procurement, prefabrication or pre-assembly prior to erection, delivery of equipment, construction, required Owner or government agency inspections, procurement of Contractor permits, construction, pre-commissioning, Commissioning, testing and startup) and shall comply with GECP.  Without limitation of the foregoing, the CPM Schedule shall: (i) show the duration, early/late start dates, early/late finish dates and available total float value for each activity, show a unique activity number, activity description, actual start/finish dates, remaining duration, physical percent complete and reflect logical relationships between activities, show an uninterrupted critical path from NTP through each of the Key Dates including Substantial Completion of each Train and Final Completion of the Facility; (ii) be tagged by activity codes to allow sorting and filtering by responsible Contractor, Subcontractor, Sub-subcontractor, Owner activities, discipline, craft, major work area, engineering, procurement, construction and

commissioning (iii) the Work Breakdown Structure  identifier shall be included for each activity, and (iv) be man-hour loaded to reflect the projected manpower to be used per activity (whether provided by Contractor or any Subcontractor or Sub-subcontractor), showing the number of personnel, and a general description of the Work being performed.  Contractor shall submit with the CPM Schedule the following: (a) progress “S” curve, showing the baseline plan, actual and forecast progress by Month for total progress of the Work, which shall be based on the CPM Schedule; (b) engineering discipline and overall engineering and construction area and overall manpower histograms showing forecast manpower required by Month, for scheduled completion of the Work; (c) Drawing log showing the Drawing number, title, planned, actual and forecast released for construction dates by discipline and reporting period; and (d) cost reporting as set forth in Attachment X.  Contractor shall use the CPM Schedule in planning, organizing, directing, coordinating, performing and executing the Work, and the CPM Schedule shall be the basis for evaluating progress of the Work.  The CPM Schedule shall reflect the critical path to Substantial Completion to each Train.

B.    Owner Review of the CPM Schedule.  Owner may review the CPM Schedule for general conformance with this Agreement, and issue written comments and proposed changes of such CPM Schedule.  If Owner reasonably determines that the CPM Schedule does not conform to this Agreement Contractor shall promptly revise and resubmit the CPM Schedule to Owner.  Once the CPM Schedule and the required submittals have been approved by Owner, this version of the CPM Schedule shall be the baseline CPM Schedule for the Work.  Owner’s review or acceptance of the CPM Schedule shall not relieve Contractor of any obligations for the performance of the Work, change any Key Date, nor shall it be construed to establish the reasonableness of the CPM Schedule.

C.    Monthly Updates to CPM Schedule.  After acceptance by Owner of the CPM Schedule, Contractor shall manage and update the CPM Schedule no less frequently than once per Month with Primavera Project Planner, using the critical path method, to reflect the actual progress to date (“Monthly Updated CPM Schedule”); provided, however, Contractor may not modify any Key Date without a Change Order executed pursuant to this Agreement, nor shall Contractor change any dates that relate to Owner’s obligations without obtaining Owner’s written consent.  The Monthly Updated CPM Schedule shall be in the same detail and form and meet all of the other requirements specified for the CPM Schedule and shall be submitted by Contractor to Owner in native electronic format and hard copy with each Invoice.  Contractor shall provide all supporting data reasonably necessary to validate the progress shown in each schedule update including: (a) percent complete curves for the total project, (b) engineering and design, (c) procurement, (d) construction, and (e) start-up and Commissioning.  Contractor shall also provide key commodity installation data including: (f) budgeted quantity, (g) current estimated quantity, (h) quantity installed by period, (i) overall quantity installed and forecast to complete to validate claimed overall project completion status.  Contractor shall promptly correct any material errors or inconsistencies in the updates to the CPM Schedule identified to Contractor by Owner and resubmit a corrected Monthly Updated CPM Schedule for Owner’s review.

D.    Other Reporting.  Without limitation to Contractor’s other reporting requirements under this Agreement, Contractor shall provide to Owner the following reports on a weekly or Monthly basis, as required and described in greater detail in Attachment X: (i) ▇▇▇▇▇ charts organized by work breakdown or activity codes, (ii) engineering deliverable logs showing budgeted quantities, achieved quantities and forecast quantities by date, (iii) major Equipment logs showing bid, purchase order, inspection points and delivery dates, (iv) construction installation logs showing budget quantities, achieved quantities and forecast quantities for key commodities, (v) manpower curves for engineering showing discipline budget quantities, achieved quantities and forecast quantities, (vi) manpower curves for construction showing craft planned manpower, actual manpower, and forecast manpower, (vii) Invoice and payment log showing Invoice numbers, dates, and amounts and payment receipt dates, and (viii) Change Order logs showing tracking numbers, descriptions, amounts, submittal dates and status (pending, approved or rejected).

E.    Form of Submittals.  All submittals by Contractor to Owner of the CPM Schedule, Recovery Schedule, Acceleration Schedule and any Monthly Updated CPM Schedule shall be in both hard copy and native electronic Primavera Project Planner format.  One (1) hard copies of each submittal shall be provided to Owner and one (1) electronic copy shall be provided to Owner in a mutually agreeable form.

5.5        Recovery and Recovery Schedule.  If, at any time during the prosecution of the Work, should (i) the Monthly Updated CPM Schedule shows (or if Contractor has not provided the Monthly Updated CPM Schedule and Owner reasonably determines) that any activity on the critical path of the Monthly Updated CPM Schedule is delayed such that achievement of a Key Date (including a Guaranteed Date) is forecasted to occur thirty (30) or more Days after the applicable Key Date, or (ii) Contractor fails to achieve a Key Date within thirty (30) Days after the applicable Key Date, then Owner may, in addition to any other remedies that it may have under this Agreement, require that, as soon as reasonably possible, Contractor prepare a schedule to explain and display how it intends to regain compliance with the CPM Schedule to the extent required to achieve Substantial Completion of the applicable Train prior to the Guaranteed Substantial Completion Date for such Train (“Recovery Schedule”).  Contractor shall do the following after written notification by Owner of the requirement for a Recovery Schedule:

A.    Within ten (10) Business Days after such notice, Contractor shall prepare the Recovery Schedule and submit it to Owner for its review and approval, not to be unreasonably withheld.  Contractor shall prepare the Recovery Schedule even if Contractor disputes Owner’s determination of the need for a Recovery Schedule.  The Recovery Schedule shall represent Contractor’s best judgment as to how it shall regain compliance with the CPM Schedule to the extent required to achieve Substantial Completion of the applicable Train prior to the Guaranteed Substantial Completion Date for such Train.  The Recovery Schedule shall (i) be prepared in accordance with GECP, (ii) have a similar level of detail as the CPM Schedule and (iii) meet the requirements specified for the CPM Schedule.

B.    Within ten (10) Business Days after Owner’s receipt of such Recovery Schedule, Contractor shall participate in a conference with Owner, and with any other

Person, including Subcontractors and Sub-subcontractors, whom the Parties mutually agree to participate, to review and evaluate the Recovery Schedule.  Any revisions necessary as a result of this review shall be resubmitted for review by Owner within three (3) Days following the conference.  The revised Recovery Schedule shall then be used by Contractor in planning, organizing, directing, coordinating, performing, and executing the Work (including all activities of Subcontractors and Sub-subcontractors) for the duration specified in Section 5.5A, to regain compliance with the CPM Schedule to the extent required to achieve Substantial Completion of the applicable Train prior to the Guaranteed Substantial Completion Date for such Train.

C.    Contractor shall perform the Work in accordance with the Recovery Schedule.

D.     Five (5) Days prior to the expiration of the Recovery Schedule, Contractor shall meet with Owner at the Site to determine the effectiveness of the Recovery Schedule and to determine whether Contractor has regained compliance with the CPM Schedule and the Key Dates to the extent required for Substantial Completion of the applicable Train to occur before the applicable Guaranteed Substantial Completion Date.  At the direction of Owner, one of the following shall happen:

1.      If, in the reasonable opinion of Owner, Contractor is still behind schedule, Contractor shall be required to prepare another Recovery Schedule pursuant to Section 5.5A above, to take effect during the immediate subsequent pay period or other period selected in writing by Owner.  Contractor shall prepare such Recovery Schedule even if Contractor disputes Owner’s opinion.

2.      If, in the reasonable opinion of Owner, Contractor has sufficiently regained compliance with the CPM Schedule and the Key Dates, so that the applicable Train will achieve Substantial Completion on or before the applicable Guaranteed Substantial Completion Date, Contractor shall not be required to submit a new Recovery Schedule and shall perform in accordance with the CPM Schedule.

E.      In preparing and executing the Recovery Schedule, Contractor shall take the steps necessary to regain compliance with the CPM Schedule so that the applicable Train will achieve Substantial Completion on or before the applicable Guaranteed Substantial Completion Date, including establishing additional shifts, hiring additional manpower, paying or authorizing overtime, providing additional Construction Equipment, and resequencing activities.

F.     The cost of preparing and performance in accordance with the Recovery Schedule shall be for Contractor’s account.

G.     Owner’s requirement, review and approval of the Recovery Schedule shall not relieve Contractor of any obligations for the performance of the Work, change any Key Dates, or be construed to establish the reasonableness of the Recovery Schedule.

H.     If, at any time prior to the applicable Guaranteed Substantial Completion Date, Contractor’s performance of the Work is delayed such that Substantial Completion of a Train is projected to achieve Substantial Completion beyond the applicable Guaranteed Substantial Completion Date (as may be adjusted by Change Order) to such an extent that the Delay Liquidated Damages cap in Section 20.2 would apply, and (i) Contractor fails to provide a Recovery Schedule in accordance with this Section 5.5 or (ii) Contractor provides a Recovery Schedule but Contractor fails to materially comply with such Recovery Schedule, then Contractor shall be in Default and Owner, after written notice to Contractor, and a cure period of fifteen (15) Days from the date of Owner’s notice, shall have the right, prior to the applicable Guaranteed Substantial Completion Date, to terminate Contractor’s performance of the Work in accordance with Section 16.1A.

5.6         Acceleration and Acceleration Schedule.  Even if the Work is otherwise in compliance with the CPM Schedule and Key Dates, Owner may, at any time, direct Contractor by Change Order or Change Directive to accelerate the Work by, among other things, establishing additional shifts, performing overtime Work, providing additional Construction Equipment or expediting Equipment; provided, however, (i) in no event shall Owner order with a Change Directive acceleration of the Work requiring Contractor to achieve any Substantial Completion or the Final Completion prior to the respective, original Guaranteed Substantial Completion Dates or the Final Completion Date or if such acceleration is not technically feasible and (ii) Contractor’s obligation with respect to an acceleration directive from Owner shall be limited to using commercially reasonable efforts to accelerate the CPM Schedule.  In the event of this directive, Owner shall pay to Contractor any (i) documented direct and indirect costs (and profit) clearly and solely attributable to such acceleration; and (ii) appropriate incentives, if any, that the Parties agree to in advance and which are set forth in the Change Order or Change Directive, as applicable.  Any Change Directive shall be governed by Sections 6.1E and 6.2D.  Any adjustment to the Contract Price or any other Changed Criteria that the Parties agree in a Change Order will be changed by such acceleration for Owner’s acceleration of the Work shall be implemented by Change Order.  If Owner directs Contractor to accelerate the Work, Contractor shall promptly commence and diligently perform the acceleration of the Work as directed by Owner, and shall prepare a schedule to explain and display how it intends to accelerate the Work and how that acceleration will affect a critical path of the CPM Schedule (the “Acceleration Schedule”).  With respect to the Acceleration Schedule, Contractor shall do the following:

A.    No later than the thirtieth (30th) Day after such directive, Contractor shall prepare the Acceleration Schedule and submit it to Owner for its review.  The Acceleration Schedule shall represent Contractor’s best judgment as to how it shall satisfy such acceleration directive.  The Acceleration Schedule shall be prepared using GECP and to a similar level of detail as the CPM Schedule.

B.    On the thirtieth (30th) Day after issuance of such directive (or such longer time as specified in writing by Owner), Contractor shall participate in a conference with Owner, and with any other Person, including Subcontractors and Sub-subcontractors, whom Owner requests and Contractor agrees (with such agreement not to be unreasonably withheld) to participate, to review and evaluate the Acceleration Schedule.  Any revisions to the Acceleration Schedule necessary as a result of this review shall be resubmitted for review by Owner as soon as reasonably practicable.  The revised Acceleration Schedule

shall then be the schedule which Contractor shall use in planning, organizing, directing, coordinating, performing, and executing that portion of the Work that is affected by such acceleration, with the CPM Schedule governing the performance of all other Work.

C.    Owner’s review and approval of the Acceleration Schedule shall not constitute an independent evaluation or determination by Owner of the workability, feasibility, or reasonableness of that schedule.

ARTICLE 6

CHANGES; FORCE MAJEURE; AND OWNER CAUSED DELAY

6.1        Owner’s Right to Change Order.  Owner may, at any time, instruct Contractor to alter, amend, omit, or suspend the Work or modify the requirements of this Agreement in accordance with this Section 6.1.

A.    Prior to the execution of any Change Order under this Section 6.1, Owner shall notify Contractor of the nature of the proposed addition to, omission from, deletion from, suspension of, or any other modification or adjustment to the requirements of this Agreement, by issuing an Owner’s Change Request to Contractor in the form of Schedule D-3.

B.    Within fourteen (14) Business Days after Contractor’s receipt of such Owner’s Change Request (when reasonably possible but if it is not reasonably possible for Contractor to provide all of the information required under this Section 6.1B within such fourteen (14) Business Day period, Contractor shall provide Owner with as much information as reasonably possible as well as a written explanation of the reason that additional time is required, but in no event later than thirty (30) Business Days following Contractor’s receipt of Owner’s written request for a change).  Contractor shall respond to Owner with a written statement in the form of Schedule D-3 detailing:

1.      the description of Work to be performed and a program for its execution;

2.      a preliminary assessment of the effect (if any) such request, were it to be implemented by Change Order, would have on the Changed Criteria; and

3.      the original Owner’s Change Request number and revision numbers.

C.    After submission of Contractor’s written assessment in accordance with Section 6.1B and upon Owner’s written request, Contractor shall provide Owner within fourteen (14) Business Days (or if Contractor requires third party quotes in order to prepare the comprehensive written estimate required under this Section 6.1C or states that a longer time period is reasonably required at the time Contractor provides the preliminary assessment, within thirty (30) Days or such longer period of mutually agreed by the Parties in writing), a comprehensive written estimate setting forth in detail the effect, if any, which such request, if implemented by Change Order, would have on the Changed Criteria.  This detailed estimate shall (i) include a fixed price breakdown (unless otherwise agreed by the Parties in writing) for the Work to be performed derived from the unit rates set forth in

Schedule D-5 to the extent applicable or, if not stated therein, derived from rates not to exceed then-current market rates, (ii) include all information required by Section 6.5B, and (iii) supplement and supersede the assessment provided under Section 6.1B.

D.     If the Parties agree on such Changed Criteria for such request, the Parties shall execute a Change Order, which shall be in the form of Schedule D-1 and such Change Order shall become binding on the Parties, as part of this Agreement.

E.     If the Parties cannot agree on such Changed Criteria for such request within fourteen (14) Days of Owner’s receipt of Contractor’s comprehensive written estimate specified in Section 6.1C, unless mutually extended in writing by the Parties, or if Owner desires that the proposed changed Work set forth in the Owner’s Change Request commence immediately without the requirement of an estimation or a detailed estimate by Contractor as required under Sections 6.1B or 6.1C, Owner may, by issuance of a Change Directive in the form attached hereto as Schedule D-2, require and authorize Contractor to commence and perform the changed Work specified in such Change Directive in accordance with the rates specified in Schedule D-5 (or if not set forth therein, at rates not to exceed then current market rates) with the effect of such unilateral Change Order on the Changed Criteria (or if the Parties agree on the effect of such unilateral Change Order for some but not all of the Changed Criteria, the impact of each of the components of the Changed Criteria on which the Parties disagree) to be determined as soon as possible but without prejudice to Contractor’s right to refer any Dispute for resolution in accordance with ARTICLE 18. Notwithstanding the foregoing, Owner may not issue a Change Directive that would cause an adjustment to the Minimum Acceptance Criteria, the Performance Guarantees or require Contractor to handle, transport or remediate any Pre-Existing Hazardous Materials without Contractor’s agreement in the form of a mutual Change Order.  After Owner’s issuance of a Change Directive, the Parties shall continue to negotiate in good faith to reach agreement on the Changed Criteria.  If the Parties cannot agree on the effect of such Change Directive within a reasonable period of time but no longer than [***]  ([***]) Days after Owner’s receipt of all supporting documentation reasonably required by Owner to evaluate the Changed Criteria, then the Dispute shall be resolved as provided in ARTICLE 18.  Pending resolution of the Dispute, Contractor shall perform the Work as specified in such Change Directive, and Owner shall pay Contractor on a Monthly basis for (i) additional design and engineering Work related to the changed Work specified in the Change Directive in accordance with the rates set forth in Schedule D-5; (ii) the actual purchase price of Equipment procured by Contractor, plus associated margin of six percent (6%) on such purchase price for profit and corporate overhead; and (iii) Work involving minor changes to be performed in the field (such as relocation of Equipment within the Facilities) where unit rates are provided in this Agreement.  When Owner and Contractor agree on the effect of such Change Directive on all of the Changed Criteria, such agreement shall be recorded by execution by the Parties of a Change Order in the form attached hereto as Schedule D-1, which shall supersede the Change Directive previously issued and relating to such changed Work.  Contractor shall be considered to be in Default under Section 16.1 should it (i) fail to commence (which may include planning or design activities) the performance of the changed Work or other obligations required in such Change Directive within seven (7) Business Days after receipt of such Change Directive (or within such other time as specified in writing by Owner) or (ii) fail to

diligently perform the changed Work or other obligations required in such Change Directive; provided, however, in no event shall Owner be entitled to issue any unilateral Change Directive (a) where such unilateral Change Directive would result in an increase in the Contract Price exceeding [***] U.S. Dollars (U.S.$ [***]), or (b) if in conjunction with other outstanding unilateral Change Directives issued by Owner, such unilateral Change Directives would in themselves result in an increase in the Contract Price equal to or exceeding to [***] U.S. Dollars (U.S.$ [***]).

6.2        Change Orders Requested by Contractor.

A.    Contractor shall only have the right to a Change Order in the event of any of the following occurrences:

1.      Acts or omissions of an Owner Indemnified Party, Owner’s consultants under Section 2.5D or any other Person acting on behalf of or under the control of Owner that constitute a failure to perform an express term of this Agreement by Owner and that adversely affect Contractor’s actual cost (which costs shall be adequately documented and supported by Contractor) of performance of the Work or ability to perform any material requirement under this Agreement.  If such acts or omissions cause a delay (as that term is defined in Section 6.9), Contractor shall be entitled to relief to the extent allowed under Section 6.8;

2.      Force Majeure to the extent allowed under Section 6.7A;

3.      Acceleration of the Work ordered by Owner pursuant to Section 5.6;

4.      Owner’s request for an increase in coverage under the Letter of Credit pursuant to Section 9.2 to cover any increase in the Contract Price as a result of Change Orders;

5.      To the extent expressly permitted under Sections 2.5B.2(i), 3.3C.5, 3.10, 3.12C, 3.17, 3.27A, 3.27B, 5.2E.2, 7.2D, 8.2C, 11.2D and 12.2A;

6.      To the extent expressly permitted under Sections 3.4C, 5.2E.1, 7.9 and 9.1C;

7.      Changes in Law that occur after the Effective Date and that adversely affect Contractor’s actual cost (which costs shall be adequately documented and supported by Contractor) of performance of the Work or ability to perform any requirement under this Agreement.  If such Changes in Law causes a delay (as that term is defined Section 6.9), Contractor shall be entitled to relief to the extent allowed under Section 6.8.  Notwithstanding anything provided in this Agreement, any change in Applicable Law related to tariffs, quotas, or duties shall be addressed exclusively and Contractor shall be entitled to a Change Order only to the extent permitted in Attachment FF (Relief for Changes in U.S. Tariffs or Duties);

8.      Suspension in Work pursuant to Section 16.3 or 16.4;

9.      Changes to the Rely Upon Information, or errors, omissions or inaccuracies in the Rely Upon Information that adversely affect Contractor’s (i) actual cost (which costs shall be adequately documented and supported by Contractor) of performance of the Work, or (ii) ability to perform any material requirement under this Agreement. If such errors, omissions or inaccuracies in the Rely Upon Information cause a delay (as that term is defined in Section 6.9), Contractor shall be entitled to relief to the extent allowed under Section 6.8;

10.       To the extent expressly permitted elsewhere in Attachment O and, further, delay beyond the permissible times specified in Section 1A(x)(g)(2) or Section 1A(xii)(g)(2) of Attachment O for the delivery by Owner to Contractor of builder’s risk or marine cargo insurance proceeds received by the Collateral Agent (or if no Collateral Agent, a mutually agreed upon escrow agent) shall relieve Contractor of any obligation under this Agreement to effect repairs or other restoration of the Work affected by the insured occurrence for any costs of repairs or restoration exceeding the sum of the deductible under such insurance and any amounts previously paid to Contractor under such insurance and shall entitle Contractor to a Change Order adjusting the Contract Price and Key Dates, but only to the extent such delay adversely affects (i) Contractor’s cost of performance of the Work, (ii) Contractor’s ability to perform the Work in accordance with the Monthly Updated CPM Schedule, or (iii) Contractor’s ability to perform any material obligation under this Agreement; provided that, notwithstanding the foregoing, in no event shall this Section 6.2A.10 in any way relieve Contractor from any obligation to perform any work necessary to maintain the builder’s risk and marine cargo insurance in full force and effect; and

11.      To the extent expressly permitted by Attachment FF.

B.    Should Contractor desire a Change Order under this Section 6.2, Contractor shall, pursuant to Section 6.5, notify Owner in writing and issue to Owner, at Contractor’s expense, a notice in the form of Schedule D-4 (“Contractor’s Change Notice”) with a detailed explanation of the proposed change and Contractor’s reasons for proposing the change, all documentation necessary to verify the effects of the change on the Changed Criteria, and all other information required by Section 6.5.  Any adjustments to the Contract Price shall be requested on a fixed price basis (unless otherwise agreed by the Parties in writing) and shall be derived from the rates set forth in Schedule D-5 to the extent applicable or, if not stated therein, derived from rates not to exceed then-current market rates.

C.    Owner shall respond to Contractor’s Change Notice within thirty (30) Days of receipt (unless Owner requests additional information in order to respond), stating (i) whether Owner agrees that Contractor is entitled to a Change Order and (ii) the extent, if any, to which Owner agrees with Contractor’s statement regarding the effect of the proposed Change Order on the Changed Criteria, including any adjustment to the Contract Price. If Owner agrees that a Change Order is necessary and agrees with Contractor’s statement regarding the effect of the proposed Change Order on the Changed Criteria, then Owner shall issue such Change Order, which shall be in the form of Schedule D-1, and

such Change Order shall become binding on the Parties as part of this Agreement upon execution thereof by the Parties.

D.      If the Parties agree that Contractor is entitled to a Change Order but cannot agree on the effect of the proposed Change Order on the Changed Criteria within fourteen (14) Days after Owner’s receipt of Contractor’s written notice and proposed Change Order and all other required information, or if Owner desires that the proposed changed Work set forth in the proposed Change Order commence immediately, the rights, obligations and procedures set forth in Section 6.1E are applicable.

E.      If the Parties cannot agree upon whether Contractor is entitled to a Change Order within fourteen (14) Days after Owner’s receipt of Contractor’s Change Notice and proposed Change Order, then the dispute shall be resolved as provided in ARTICLE 18.  Pending resolution of the dispute, Contractor shall continue to perform the Work required under this Agreement, and Owner shall continue to pay Contractor in accordance with the terms of this Agreement, as modified by any previously agreed Change Orders or Change Directives.

6.3        Changed Criteria Adjustment; Contractor Documentation.  Notwithstanding anything to the contrary, Owner shall not be obligated to make any payment to Contractor for Work performed under a Change Directive pursuant to Sections 6.1E and 6.2D (except to the extent specified in Sections 6.1E and 6.2D), and the Contract Price, Key Dates and any other Changed Criteria (other than the change in the Scope of Work) shall not be adjusted unless and until a Change Order (the value of which shall be derived from (i) the rates, prices and markups contained in Schedule D-5 to the extent applicable, or (ii) if not specified in Schedule D-5, rates not to exceed then-current market rates), has been executed.  In the event Owner requires supplemental documentation to the information provided in Schedule D-5, Contractor shall provide third party supporting documentation and other supporting information as Owner may require to allow Owner to conduct a detailed analysis of, and value, the proposed Change Order, provided that Contractor shall not be required to provide the composition of any fixed rates or ▇▇▇▇-ups except as permitted in Section 3.13B.

6.4         Change Orders Act as Accord and Satisfaction.  Change Orders agreed pursuant to Section 6.1D or 6.2C by the Parties, and Change Directives entered into pursuant to Section 6.1E or 6.2D in which the Parties have subsequently agreed upon the effect of such Change Directive and executed a superseding Change Order as provided in Section 6.1D or 6.2C, shall, unless otherwise expressly reserved in such Change Order, constitute a full and final settlement and accord and satisfaction of all effects of the change as described in the Change Order upon the Changed Criteria and shall be deemed to compensate Contractor fully for all direct and indirect impacts of such change.  Accordingly, unless otherwise expressly reserved in such Change Order, Contractor expressly waives and releases any and all right to make a claim or demand or to take any action or proceeding against Owner for any other consequences arising out of, relating to, or resulting from such change reflected in such Change Order, whether the consequences result directly or indirectly from such change reflected in such Change Order, including any claim or demand for damages due to delay, disruption, hindrance, impact, interference, inefficiencies or extra work arising out of, resulting from, or related to, the change reflected in that Change Order (including any claims or demands that any Change Order or number of Change Orders,

individually or in the aggregate, have impacted the unchanged Work).  If Contractor expressly reserves its right in a Change Order to maintain a claim arising out of the change in the Change Order, then such reservation shall only be effective for the earlier of Contractor’s achievement of Substantial Completion of the applicable Train to which the Change Order relates or one hundred eighty (180) Days after execution of the Change Order, and afterwards Contractor waives and releases any and all right to make a claim or demand relating to such Change Order as specified in this Section 6.4.

6.5         Timing Requirements for Change Notices Issued by Contractor.  Should any circumstance that Contractor has reason to believe may give rise to the right to a Change Order, Contractor shall, with respect to each such circumstance:

A.      issue a Contractor’s Change Notice to Owner within fourteen (14) Days following the date that Contractor knew of or sixty (60) Days after the date that Contractor reasonably should have known of the first occurrence or beginning of such circumstance; provided that if such occurrence or circumstance is an emergency, oral notice shall be given immediately, followed by a Contractor’s Change Notice within seventy-two (72) hours after such oral notice is provided.

1.      In such Contractor’s Change Notice, Contractor shall state in detail all known and presumed facts upon which its claim is based, including the character, duration and extent of such circumstance, the date Contractor first knew of such circumstance, any activities impacted by such circumstance, the estimated cost and time consequences of such circumstance (including showing a good faith estimate of the impact of such circumstance, if any, on the critical path of the Monthly Updated CPM Schedule) and any other details or information that are expressly required under this Agreement.

2.      Contractor shall only be required to comply with the notice requirements of this Section 6.5A once for continuing circumstances, provided the notice expressly states that the circumstance is continuing and includes Contractor’s best estimate of the impact on any Changed Criteria by such circumstance; and

B.      submit to Owner a comprehensive written estimate no later than forty five (45) Days (unless mutually extended by the Parties in writing) after the later of (a) the date that the notice in Section 6.5A.1 is given and (b) the completion of each such circumstance, setting forth in detail (i) why Contractor believes that a Change Order should be issued, plus all documentation reasonably requested by or necessary for Owner to determine the factors necessitating the possibility of a Change Order and all other information and details expressly required under this Agreement, including the information required by Schedule D-4, applicable detailed estimates and cost records, time sheet summaries and a graphic demonstration using the CPM Schedule showing Contractor’s entitlement to a time extension to the Key Dates pursuant to the terms of this Agreement, which shall be provided in its native electronic format and (ii) the effect, if any, which such proposed Change Order would have for the Work on any of the Changed Criteria.

C.     The Parties acknowledge that the notice requirements contained in this Agreement are an express condition precedent necessary to any right for an adjustment to the Changed Criteria or any other modification to any other obligation of Contractor under this Agreement, provided that Owner demonstrates it was prejudiced by Contractor’s failure to provide such notice in accordance with the terms of this Agreement; however, in any event, if Contractor fails to provide the required notice within sixty (60) Days of when such notice was required to be given under the terms of this Agreement, such failure is deemed a complete bar to Contractor’s claim for which such notice was required.  Oral notice, shortness of time, or Owner’s actual knowledge of a particular circumstance shall not waive, satisfy, discharge or otherwise excuse Contractor’s strict compliance with this Section 6.5.

6.6         Adjustment Only Through Change Order.  No change in the requirements of this Agreement, whether an addition to, deletion from, suspension of or modification to this Agreement, including any Work, shall be the basis for an adjustment to any Changed Criteria or any other obligations of Contractor or right of Owner under this Agreement unless and until such addition, deletion, suspension or modification has been authorized by a Change Order executed and issued in accordance with and in strict compliance with the requirements of this ARTICLE 6, except that the Work may be changed by a Change Directive.  Contractor shall not perform any change in the Work unless and until such change is authorized pursuant to a Change Order or Change Directive in accordance with this ARTICLE 6, and all costs incurred by Contractor prior to authorization by Change Order shall be for Contractor’s account.  No course of conduct or dealings between the Parties (including the issuance of an Owner’s Change Request or Contractor’s Change Notice), nor express or implied acceptance of additions, deletions, suspensions or modifications to this Agreement, and no claim that Owner has been unjustly enriched by any such addition, deletion, suspension or modification to this Agreement, whether or not there is in fact any such unjust enrichment, shall be the basis for any claim for an adjustment to the Changed Criteria or any other obligations of Contractor under this Agreement.

6.7        Force Majeure.

A.    Contractor Relief.  If the commencement, prosecution or completion of the Work is delayed by Force Majeure, then Contractor shall be entitled to an extension to the applicable Key Dates if such delay affects the performance of any Work that is on the critical path of the Monthly Updated CPM Schedule, but only if Contractor complies with the notice and Change Order request requirements in Section 6.5 and the mitigation requirements in Section 6.10.  Subject to Section 6.7A.1, the Parties agree that Contractor’s sole remedy for such delay shall be an adjustment to such applicable Key Dates pursuant to a Change Order.  In addition, if Force Majeure prevents Contractor’s performance with respect to any portion of the Work, Contractor shall be relieved from performance of such portion of the Work for the time period that such Force Majeure are continuing and preventing such performance.

1.      Contractor shall be entitled to an adjustment to the Contract Price for any delay that meets the requirements of Section 6.7A, if such delay, alone or aggregated with other Force Majeure events, causes delay in the performance of any Work that is on the critical path of the Monthly Updated CPM Schedule in

excess of thirty (30) Days in the aggregate. Any such Contract Price adjustments shall be for reasonable costs necessarily incurred by Contractor for delay occurring after the expiration of such thirty (30) Day aggregate period; provided that Owner’s total liability under this Agreement for any such Contract Price adjustment(s) for all such events occurring during the term of this Agreement shall not exceed fifty million U.S. Dollars (U.S.$50,000,000) in the aggregate.

B.    Owner Relief.  Subject to Section 6.7A, Owner’s obligations under this Agreement shall be suspended to the extent that performance of such obligations is delayed by Force Majeure (but without prejudice to Contractor’s entitlement to a Change Order for the events described in Section 6.2A).

C.    Payment Obligations.  No obligation of a Party to pay moneys under or pursuant to this Agreement shall be excused by reason of Force Majeure affecting such Party.

6.8         Delay Caused by Owner or for Which Owner Is Responsible.  If (a) any Owner Indemnified Party or any Person acting on behalf of or under the control of Owner delays the commencement, prosecution or completion of the Work, including Owner’s failure to provide an Owner-Furnished Items, and to the extent such delay is not attributable to Contractor or its Subcontractors or Sub-subcontractors but is caused by Owner’s breach of an express obligation under this Agreement, or (b) the commencement, prosecution or completion of the Work be delayed as a result of (1) Changes in Law for which Contractor is entitled to relief under Section 6.2A.7, (2) changes to or errors or omissions in Rely Upon Information for which Contractor is entitled to relief under Section 6.2A.9, (3) a suspension of the Work for which Contractor is entitled to relief under Section 6.2A.8, or (4) an event entitling Contractor to a Change Order as set forth in Section 6.2A.5 or 6.2A.11 for a Change in Quotas (as defined in Attachment FF), then Contractor shall, with respect to any of the above, be entitled to an adjustment in the Contract Price and an extension to the applicable Guaranteed Substantial Completion Dates if such delay affects the performance of any Work that is on the critical path of the Monthly Updated CPM Schedule, and Contractor complies with the notice and Change Order request requirements in Section 6.5 and the mitigation requirements of Section 6.10, provided that Contractor shall be entitled to an adjustment to the Contract Price which shall be limited to the reasonable, additional costs incurred by Contractor for such delay, plus associated profit margin of six percent (6%) on such costs. Any adjustments to the Contract Price or a Key Date shall be recorded in a Change Order.  The Parties agree that if they execute a Change Order with respect to any change in the Scope of Work described in this Section 6.8, any delay arising out of such change in the Scope of Work and meeting the requirements of this Section 6.8 shall be included in the Change Order incorporating such change in the Scope of Work.

6.9         Delay.  For the purposes of Sections 6.2A.1, 6.2A.6, 6.2A.9, 6.7 and 6.8, the term “delay” shall include hindrances, disruptions, preventions or obstructions, or any other similar term in the industry and the resulting impact from such hindrances, disruptions or obstructions, including inefficiency, impact, ripple or lost production.  For the avoidance of doubt, the Parties recognize and agree that for the purposes of Sections 6.7 and 6.8, a Work activity not on the critical path can become on the critical path, and if a delay causes a Work activity off the critical path to become a critical path activity, Contractor is entitled to an extension to the Key Dates for those

days of delay after which the non-critical path activity became a critical path activity, provided that such delay satisfies the other applicable requirements under Sections 6.7 and 6.8.

6.10       Contractor Obligation to Mitigate Delay.  With respect to Sections 6.7 and 6.8, in no event shall Contractor be entitled to any adjustment to the Key Dates or adjustment to the Contract Price for (i) that portion of delay to the extent Contractor could have taken, but failed to take, reasonable actions to mitigate such delay or (ii) that portion of delay that would nevertheless been experienced had such delay event in Section 6.7 or 6.8 not occurred.

6.11       Separated Contract Price Adjustments in Change Orders.  Any adjustment by Change Order to the Contract Price which is made on a fixed price separated basis shall be separated pursuant to 34 Tex. Admin. Code Rule § 3.291(a)(13) to specify the applicable adjustments to the Aggregate Equipment Price and Aggregate Labor and Skills Price in accordance with ARTICLE 7.

ARTICLE 7

CONTRACT PRICE AND PAYMENTS TO CONTRACTOR

7.1         Contract Price.  As compensation in full to Contractor for the full and complete performance of the Work and all of Contractor’s other obligations under this Agreement, Owner shall pay and Contractor shall accept Seven Billion Forty Two Million Fifty Two Thousand U.S. Dollars (US$ 7,042,052,000) (the “Contract Price”).  The Contract Price is subject to adjustment only by Change Order as provided in ARTICLE 6, and includes all Taxes (excluding U.S. Tariffs and Duties, as further described in Section 7.1A) payable by Contractor and its Subcontractors and Sub-subcontractors in connection with the Work.  For the avoidance of doubt, the Contract Price does not include Texas Sales and Use Tax on Equipment (which is subject to exemption as provided under Section 4.8A).

A.     The Contract Price excludes U.S. Tariffs and Duties, and Contractor shall invoice separately to recover its costs for U.S. Tariffs and Duties pursuant to Attachment FF, provided that Contractor may not invoice any more than Sixty One Million Four Hundred Ninety Five Thousand Seven Hundred Thirty U.S. Dollars (US$ $61,495,730) (“Total Reimbursement Amount”) in total for U.S. Tariffs and Duties (unless reduced or increased via Change Order pursuant to Attachment FF (Relief for Changes in U.S. Tariffs or Duties) for a Change in U.S. Tariffs or Duties), and any additional costs related to any tariffs, quotas, and duties are for Contractor’s account.

B.     The Contract Price is separated, in accordance with the definition of separated contract as defined in 34 Tex. Admin Code Rule § 3.291(a)(13), as follows:

1.      [***] U.S. Dollars (U.S.$ [***]) for Equipment (“Aggregate Equipment Price”).    The Aggregate Equipment Price equates to the portion of the Contract Price attributable to all Equipment and includes the cost of every piece of Equipment, including markup, overhead, freight and profit, but excludes labor.

2.      [***] U.S. Dollars (U.S.$ [***])  

for all Work in this Agreement other than for Equipment (“Aggregate Labor and Skills Price”), which such Work includes all labor, engineering, design, services, installation, consumables, freight on Construction Equipment, overhead and all other items of whatever nature applicable to the Work.  Excluding only the Aggregate Equipment Price, the Aggregate Labor and Skills Price shall include all costs, charges and expenses of whatever nature applicable to the Work, including Taxes (except for U.S. Tariffs and Duties) on all Work and Texas Sales and Use Tax on all Work other than on Equipment.

3.      Attachment GG provides a list of options (“Additional Work Options”) for additional Work that Owner may elect to have Contractor perform, as further specified in this Section 7.1B.3.  Owner may, at any time within the time periods specified in Attachment GG for each Additional Work Option, elect (by giving written notice to Contractor) to have Contractor perform any Additional Work Options for the corresponding amounts set forth in Attachment GG.  The amount listed for each Additional Work Option is compensation in full for Contractor’s complete performance of each Additional Work Option selected by Owner and includes all costs and expenses of any nature associated with such Additional Work Option. In the event that Owner selects any Additional Work Options, the Parties shall enter into a Change Order that adjusts the Contract Price in an amount equal to total of the Additional Work Options selected by Owner.  Other than the adjustment to the Contract Price, Contractor shall receive no other adjustments to any Changed Criteria as a result of Owner’s selection of any Additional Work Options.

7.2         Interim Payments.

A.     Payments.  Interim payments shall be made by Owner to Contractor in accordance with the Payment Schedule set forth in Attachment C (as may be amended by Change Order pursuant to Section 6.1C or 6.2C), which allocates (i) [***] U.S. Dollars (U.S.$ [***]) of the Contract Price to be paid based on percent completion of the Work (“Earned Value”) using the detailed breakdown of the Work and the procedures set forth in Schedule C-1 (the “Earned Value Contract Price Breakdown”), and (ii) [***] U.S. Dollars (U.S.$ [***]) of the Contract Price to be paid based on completion of Payment Milestones set forth in Schedule C-2,  provided that Contractor is otherwise in material compliance with the terms of this Agreement.  Each payment shall be subject to Owner’s right to withhold payments under this Agreement, including Sections 3.3G, 7.5, 11.5A and 13.1.  Payments shall be made in U.S. Dollars to an account designated by Contractor.  The Payment Schedule, including the Earned Value Contract Price Breakdown and the Payment Milestones, shall be amended only by Change Order pursuant to this Agreement.

B.     Invoices.  Within [***]  ([***]) Days after the end of each Month (or the next Business Day if the [***]th Day is not a Business Day), Contractor shall submit to Owner an Invoice for (i) all Work completed during the prior Month in accordance with the Earned Value Contract Price Breakdown, (ii) all Payment Milestones completed during the prior Month, if any and (iii) reimbursement for U.S. Tariffs and Duties, if any.  Contractor shall not be entitled to any payment whatsoever for any portion of the Work relating to a

particular Payment Milestone until such Payment Milestone is fully completed.  Such Monthly Invoice shall also include amounts properly due and owing for Work performed during the prior Month under Change Directives.  All Invoices, other than the Invoice for final payment under this Agreement, shall be in the form of Schedule I-1, and shall include all documentation supporting its request for payment as required under this Agreement.  All Invoices issued to Owner hereunder shall separately state charges for Equipment and skill, labor and other costs for the Project.

C.     Interim Lien and Claim Waivers.  Each Invoice received by Owner prior to Final Completion shall be accompanied by (i) a fully executed Interim Lien and Claim Waiver from Contractor in the form of Schedules K-1 and K-2 for all Work performed through the date for which payment is requested, (ii) fully executed Interim Lien and Claim Waivers from each Major Subcontractor in the form set forth in Schedules K-3 and K-4 for all Work performed through the date for which payment is requested and (iii) if requested by Owner, fully executed Interim Lien and Claim Waivers from all Major Sub-subcontractors in the form set forth in Schedules K-3 and K-4 for all Work performed through the date for which payment is requested.  Interim Lien and Claim Waivers, however, shall not be required from Major Subcontractors, Major Sub-subcontractors, Subcontractors or Sub-subcontractors until they have performed and invoiced Contractor for their Work, and Major Subcontractors, Major Sub-subcontractors, Subcontractors and Sub-subcontractors shall be required to submit additional Interim Lien and Claim Waivers only if they have performed Work not covered by a previous Interim Lien and Claim Waiver. Submission of all Interim Lien and Claim Waivers are a condition precedent to payment of any Invoice (provided that if Contractor does not submit an Interim Lien and Claim Waiver for a Major Subcontractor or Major Sub-subcontractor in accordance with this Section 7.2C, Owner may withhold payment for the amount allocated to such Major Subcontractor or Major Sub-subcontractor that has not provided an Interim Lien and Claim Waiver).

D.    Review and Approval.  Each Invoice shall be reviewed by Owner and, upon Owner’s reasonable request, Contractor shall furnish such supporting documentation and certificates and provide such further information as may be reasonably requested by Owner.  Unless disputed by Owner, each Invoice (less any withholdings allowed under this Agreement) shall be due and payable [***]  ([***]) Days after it, and all documentation required under this Agreement, is received by Owner.  Notwithstanding the above, prior to receipt of NTP, Contractor may submit an Invoice to Owner for the NTP milestone payment, and such Invoice shall be due and payable within [***]  ([***]) Days after NTP, and Contractor shall have no obligation to commence the Work under the NTP until such payment is received by Contractor (but for the avoidance of doubt, the Guaranteed Substantial Completion Dates for each Train shall not be altered despite Contractor’s right not to commence the Work until such payment is received,  unless such payment is received after such ten (10) Day period above, in which case Contractor shall be entitled to a Change Order adjusting the Contract Price and/or the Key Dates, as applicable, pursuant to Section 6.8, provided that Contractor complies with the notice and Change Order request requirements set forth in Sections 6.2 and 6.5.   If an Invoice is disputed by Owner, then payment shall be made for all undisputed amounts and the Dispute shall be resolved

pursuant to ARTICLE 18.  Payment on disputed amounts shall be made as soon as such Dispute is resolved.

E.    Maximum Cumulative Payment Amounts.  The Parties have agreed upon and set forth in Schedule C-3 a schedule of the maximum cumulative amounts that Contractor is allowed to Invoice Owner at any one time during the performance of the Work (the “Maximum Cumulative Payment Schedule”).  The Maximum Cumulative Payment Schedule shall only be subject to adjustment pursuant to a Change Order.

7.3         Final Completion and Final Payment.  Upon Final Completion, Contractor shall, in addition to any other requirements in this Agreement for achieving Final Completion, including those requirements set forth in Section 1.1 for the definition of Final Completion, submit a fully executed final Invoice in the form attached hereto as Schedule I-2, along with (i) a statement summarizing and reconciling all previous Invoices, payments and Change Orders, (ii) an affidavit that all payrolls, Taxes, liens, charges, claims, demands, judgments, security interests, bills for Equipment, and any other indebtedness connected with the Work have been paid, (iii) fully executed Final Lien and Claim Waiver from Contractor in the form of Schedules K-5 and K-6, (iv) fully executed Final Lien and Claim Waivers from each Major Subcontractor in the form set forth in Schedules K-7 and K-8, and (v) if requested by Owner, fully executed Final Lien and Claim Waivers from each Major Sub-subcontractor in the form set forth in Schedules K-7 and K-8.  No later than [***]  ([***]) Days after receipt by Owner of such final Invoice and all requested documentation and achieving Final Completion, Owner shall, subject to its rights to withhold payment under this Agreement, pay Contractor the balance of the Contract Price.

7.4         Payments Not Acceptance of Work.  No payment made hereunder by Owner shall be considered as approval or acceptance of any Work by Owner or a waiver of any claim or right Owner may have hereunder.  All payments shall be subject to correction or adjustment in subsequent payments.

7.5         Payments Withheld.  In addition to disputed amounts set forth in an Invoice, Owner may, in addition to any other rights under this Agreement, withhold payment on an Invoice or a portion thereof, or collect on the Letter of Credit, in an amount and to such extent as may be reasonably necessary to protect Owner from loss due to:

A.    Defective Work not remedied in accordance with this Agreement;

B.     liens, stop notices or other encumbrances on all or a portion of the Site,, the Work, the Train 3 Liquefaction Facility or the Facility, which are filed by any Subcontractor, any Sub-subcontractor or any other Person acting through or under any of them,  provided that Owner has made payment to Contractor of all undisputed amounts due to Contractor in accordance with the terms of this Agreement and further provided that, with respect to liens and other encumbrances, Contractor has not removed or discharged such lien or encumbrance in accordance with Section 17.6;

C.     any material breach by Contractor of any term or provision of this Agreement;

 

 

D.    the assessment of any fines or penalties against Owner as a result of Contractor’s failure to comply with Applicable Law or Applicable Codes and Standards;

E.    a discovery that a Payment Milestone or other Work associated with a prior payment was not in fact achieved;

F.    amounts paid by Owner to Contractor in a preceding Month incorrectly;

G.    Liquidated Damages that Contractor owes under the terms of this Agreement;

H.    failure of Contractor to make payments to Subcontractors in accordance with their respective Subcontracts, provided that Owner has made payment to Contractor of all undisputed amounts owed to Contractor in accordance with the terms of this Agreement with respect to the applicable Subcontracts;

I.    any other costs or liabilities which Owner has incurred or will incur for which Contractor is responsible under this Agreement; or

J.    failure of Contractor to comply with its Monthly Progress Report obligations or scheduling obligations as set forth in Section 5.4.

7.6      Payment of Amounts Withheld or Collected on Letter of Credit.  Prior to drawing down or collecting on the Letter of Credit in accordance with this Agreement, Owner shall provide Contractor with the written notice in accordance with Section 9.2A(b).  For amounts actually withheld or collected on the Letter of Credit, Owner shall pay Contractor the amount Owner withheld or collected on the Letter of Credit under Section 7.5 if Contractor (i) pays, satisfies or discharges the applicable claim of Owner against Contractor under or by virtue of this Agreement and provides Owner with reasonable evidence of such payment, satisfaction or discharge, (ii) cures the applicable breach described in Section 7.5 or the applicable Default (i.e., the breach described in Section 7.5 or Default on which Owner’s withholding or collection on the Letter of Credit was based), (iii) with respect to item 7.5B, removes the lien or other encumbrance in question in accordance with Applicable Law, or (iv) provides Owner with a Letter of Credit reasonably satisfactory to Owner in the amount of the withheld payment.  In the event Owner draws down or collects any amount on the Letter of Credit pursuant to this Section 7.6, and Contractor acts in accordance with either (i), (ii) or (iii) above so as to require payment from Owner, Contractor shall, within [***]  ([***]) Days after Owner’s payment to Contractor, restore the Letter of Credit to the amount the Letter of Credit had immediately prior to Owner’s collection on the Letter of Credit under this Section 7.6, failing which, Owner may withhold all payments otherwise due Contractor until Contractor so restores such Letter of Credit.  Owner’s failure to withhold or draw down or collect against the Letter of Credit in the event of any of the circumstances described in this Section 7.6 shall not be deemed to be a waiver of any of Owner’s rights under this Agreement, including Owner’s right to withhold or draw down on the Letter of Credit at any time one of the circumstances in Section 7.5 exists.

7.7       Interest on Late Payments.  Any undisputed amounts due but not paid when such amounts are due and payable hereunder shall bear interest at the lesser of (i) an annual rate equal

to the prime rate published by the Wall Street Journal on the date such amounts were due and payable plus three percent (3%) or (ii) the maximum rate permitted under Applicable Law.

7.8       Offset.  Owner may, upon prior notice to Contractor, offset any debt due and payable from Contractor to Owner against any amount due and payable to Contractor hereunder.

7.9       Currency.  All amounts contained herein are in and shall be paid in U.S. Dollars. Included in the Contract Price are the following amounts in U.S. Dollars based upon the following foreign (non-U.S. Dollar) currencies at the following exchange rates to the U.S. Dollar:

 

Contemporaneously with Owner’s issuance of the NTP Payment Milestone payment, the Contract Price shall be subject to an upward or downward adjustment by Change Order to account for changes in the exchange rates during the time period between the Effective Date and Owner’s issuance of the NTP milestone payment, and such adjusted Contract Price shall be stated in U.S. Dollars.

The adjustment to the Contract Price for each foreign currency will be determined as follows:

(a) the equivalent U.S. Dollar value at the time of Owner’s issuance of the NTP Payment Milestone payment

(determined by multiplying the value of foreign currency listed above by the exchange rate quoted by Bloomberg FX Fixings rate for such foreign currency as of 9:00am NY time on the next banking day following Owner’s issuance of the NTP Payment Milestone payment)

minus

(b) the initial equivalent U.S. Dollar value listed in the table above for such foreign currency.

The Contract Price adjustment shall be the sum of the adjustments for each currency, and shall be stated in U.S. Dollars.  After Owner’s issuance of the NTP Payment Milestone payment, Contractor assumes all risk relating to fluctuation of any foreign currency.

7.10       Conditions Precedent to Payment. It shall be a condition precedent to Contractor’s entitlement to receive any payment from Owner under this Agreement that Contractor has provided to Owner, and is maintaining the (i) Parent Guarantee in accordance with Section 21.17, (ii) Letter of Credit in accordance with Section 9.2, and (iii) insurance policies in accordance with Section 9.1.

7.11       [***].

ARTICLE 8

TITLE AND RISK OF LOSS

8.1       Title.

A.   Clear Title.  Contractor warrants and guarantees that Owner will receive good and legal title to and ownership of the Work and the Facility (including each component thereof) shall be free and clear of any and all liens, claims, security interests or other encumbrances when title thereto passes to Owner.

B.   Title to Work.  Title to all or any portion of the Work (other than Work Product) shall pass to Owner (or its designee) upon the earlier of (i) payment by Owner therefor, (ii) delivery of the Work to the Site, or (iii) incorporation of such Work into the Facility, except in the case of Work Product, which is governed by ARTICLE 10.  Transfer of title to Work shall be without prejudice to Owner’s right to reject Defective Work, or any other right in this Agreement.

8.2       Risk of Loss.

A.       Risk of Loss Prior to Substantial Completion.  Contractor shall bear the risk of physical loss and damage to each Train and all Equipment and Work incorporated or to be incorporated into such Train until the earlier of Substantial Completion of such Train or termination of the Agreement, provided that Owner shall at all times bear the risk of physical loss and damage to the extent arising from (i) war (whether declared or undeclared), civil war, act of terrorism, sabotage, blockade, insurrection; or (ii) ionizing radiation, or contamination by radioactivity from nuclear fuel, or from any nuclear waste from the combustion of nuclear fuel properties of any explosive nuclear assembly or nuclear component thereof; or (iii) a significant atmospheric disturbance marked by high winds, with or without precipitation, including such events as hurricane, typhoon, monsoon, cyclone, rainstorm, tempest, hailstorm, tornado, or any combination of the foregoing events, including any resulting flood, tidal or wave action (collectively, “Windstorms”) and earthquake to the extent that such Windstorms and earthquakes result in loss or damage in excess of [***] U.S. Dollars (U.S.$ [***]) (or such greater amount obtained in the Builder’s Risk policy) in the cumulative aggregate with respect to the Work, the Facility and the Train 3 Liquefaction Facility.  The full amount of [***] U.S. Dollars (U.S.$ [***]) (or such greater amount obtained in the Builder’s Risk policy) may be satisfied under either the Train 3 EPC Agreement or this Agreement.

B.       Transfer of Risk of Loss After Substantial Completion.  Upon the earlier termination of the Agreement or after Substantial Completion of each Train together with the related Common Systems as described in Attachment A, Owner shall bear the risk of physical loss and damage to such Train (including all Equipment and Work incorporated into such Train), related Common Systems and any other portion of the Work or Facility transferred to Owner prior to Substantial Completion in accordance with Section 11.8.  In accordance with Section 17.1F, Contractor shall be liable to Owner for physical loss and damage to any portion of a Train after such Train achieves Substantial Completion to the

extent such physical loss and damage arises out of or results from or is related to the negligence or fault of any Contractor Indemnified Party or Subcontractors or Sub-subcontractors, subject to a cap in liability of [***] Dollars (U.S. $[***]) per occurrence, with a cumulative per occurrence of [***] U.S. Dollars (U.S. $[***]) under the Train 3 EPC Agreement and this Agreement. Under no circumstances shall this Section 8.2B be interpreted to relieve Contractor of its obligations with respect to Warranties, Defective Work and Corrective Work.

C.       With respect to any physical loss or physical damage to a Train (including Equipment or Work incorporated into such Train) caused by (a) Force Majeure (including any of the events listed in Section 8.2A(i), (ii), or (iii)); (b) any member of Owner Indemnified Parties or any other Person for whom Owner is responsible, or (c) any Third Party over whom neither Contractor nor Owner are responsible and such Third Party is beyond the reasonable control of Contractor and such loss or damage was not due to Contractor’s fault or negligence and could not have been prevented or avoided by Contractor through the exercise of due diligence, Contractor shall be entitled to a Change Order adjusting the Key Dates if and to the extent permitted under (y) Section 6.7 if caused by Force Majeure (including any of the events listed in Section 8.2A(i), (ii), or (iii)), and (z) Section 6.8 if caused by any member of Owner Indemnified Parties or any other person for whom Owner is responsible or a Third Party pursuant to Section 8.2C(c) above.  In the event that any physical loss or damage to a Train (or any Equipment or Work incorporated or to be incorporated in such Train) arises from one or more of the events set forth in 8.2A(i), 8.2A (ii), or 8.2A (iii), and Owner elects to rebuild such physical loss or damage, Contractor shall be entitled to a Change Order to adjust the Contract Price to the extent such event adversely affects Contractor’s costs of performance of the Work, provided that Contractor complies with the requirements in Section 6.5 and the mitigation requirements in Section 6.10.

D.       For the avoidance of doubt, this Section 8.2 shall apply to any loss or damage to the Work caused by, arising out of or resulting from, any activities, events or omissions occurring in connection with this Agreement.  Similarly, for the avoidance of doubt, the risk of loss and damage to the Train 3 Liquefaction Facility shall be determined in accordance with Section 8.2 of the Train 3 EPC Agreement, notwithstanding that such loss or damage to the Train 3 Liquefaction Facility was caused by, arose out of or resulted from activities or events occurring during the performance of this Agreement.

ARTICLE 9

INSURANCE AND LETTER OF CREDIT

9.1         Insurance.

A.       Provision of Insurance.  The Parties shall provide the insurance as specified in Attachment O on terms and conditions stated therein.

B.       No Cancellation.  All policies providing coverage hereunder shall contain a provision that at least [***]  ([***]) Days’ prior notice shall be given to the non-procuring

Parties and additional insureds prior to cancellation, non-renewal or material change in the coverage.

C.       Additional Insurance.  Upon Owner’s request, and at Owner’s sole option, Contractor shall increase its insurance required under this Agreement (as long as such insurance coverage is available in the commercial insurance market); provided however, that the payment of any incremental increase in the cost of such insurance shall be reimbursed by Owner at cost via Change Order.

D.       Obligations Not Relieved.  Anything in this Agreement to the contrary notwithstanding, the occurrence of any of the following shall in no way relieve Contractor from any of its obligations under this Agreement: (i) failure by Contractor to secure or maintain the insurance coverage required hereunder; (ii) failure by Contractor to comply fully with any of the insurance provisions of this Agreement; (iii) failure by Contractor to secure such endorsements on the policies as may be necessary to carry out the terms and provisions of this Agreement; (iv) the insolvency, bankruptcy or failure of any insurance company providing insurance to Contractor; (v) failure of any insurance company to pay any claim accruing under its policy; or (vi) losses by Contractor or any of its Subcontractors or Sub-subcontractors not covered by insurance policies.

E.       Failure to Provide Required Insurance.  IN THE EVENT THAT LIABILITY FOR ANY LOSS OR DAMAGE IS DENIED BY THE UNDERWRITER OR UNDERWRITERS IN WHOLE OR IN PART DUE TO THE BREACH OF CONTRACTOR’S INSURANCE BY CONTRACTOR, OR IF CONTRACTOR FAILS TO MAINTAIN ANY OF THE CONTRACTOR’S INSURANCE HEREIN REQUIRED, THEN CONTRACTOR SHALL DEFEND, INDEMNIFY AND HOLD THE OWNER INDEMNIFIED PARTIES HARMLESS AGAINST ALL LOSSES WHICH WOULD OTHERWISE HAVE BEEN COVERED BY SAID INSURANCE.

F.       Unavailable Insurance. If any insurance (including the limits or deductibles thereof) hereby required to be maintained, other than insurance required by Applicable Law to be maintained, shall not be reasonably available in the commercial insurance market, Owner and Contractor shall not unreasonably withhold their agreement to waive such requirement to the extent that maintenance thereof is not so available; provided, however, that the Party shall first request any such waiver in writing from the other Party, which request shall be accompanied by written reports prepared by two (2) independent advisors, including insurance brokers, of recognized international standing certifying that such insurance is not reasonably available in the commercial insurance market (and, in any case where the required amount is not so available, explaining in detail the basis for such conclusions), such insurance advisers and the form and substance of such reports to be reasonably acceptable to the other Party; and provided further that such waiver is permitted pursuant to any agreements between Owner and its Lenders.  Any such waiver shall be effective only so long as such insurance shall not be available and commercially feasible in the commercial insurance market.

9.2         Irrevocable Standby Letter of Credit.

A.       As a condition precedent to Contractor’s right to receive any payments under this Agreement (except payments expressly permitted pursuant to an LNTP), Contractor shall deliver to Owner an irrevocable standby letter of credit, naming Owner as beneficiary, in the amount of ten percent (10%) of the Contract Price (as adjusted by Change Order) and in the form of Attachment R, and issued and confirmed by a commercial bank in the United States of America reasonably acceptable to Owner with a long-term rating of at least Investment Grade (“Letter of Credit”).  Upon Owner’s written request, Contractor shall increase the dollar value of the Letter of Credit issued to Owner in proportion to any increases to the Contract Price pursuant to a Change Order, or the aggregate of multiple Change Orders, that equal or exceed one hundred million U.S. Dollars (U.S. $100,000,000); provided that if Owner so requests an adjustment to the value of the Letter of Credit, Contractor shall be entitled to a Change Order for the cost of the increase in the Letter of Credit. If at any time the rating of the U.S. commercial bank that issued the Letter of Credit falls below Investment Grade, Contractor shall replace the Letter of Credit within [***]  ([***]) Days with a letter of credit or, if permitted by Owner in its sole discretion, an equivalent instrument, issued by a commercial bank in the United States of America reasonably acceptable to Owner meeting such rating requirements.  Owner shall have the right to draw down on or collect against such Letter of Credit upon Owner’s demand in the event of the following: (a) a Default by Contractor or the owing by Contractor to Owner under this Agreement for Liquidated Damages or any other liabilities, damages, costs, losses or expenses arising out of or relating to a breach of any obligation under this Agreement by Contractor, such Default or otherwise and (b) Owner has provided [***]  ([***]) Business Days’ written notice to Contractor stating Owner’s intent to draw against the Letter of Credit and the amount to be drawn and specifying the reason for the draw on the Letter of Credit.  The amount drawn on the Letter of Credit shall not be greater than the amount that Owner, at the time of the drawing, reasonably estimates is owed it under this Agreement for Liquidated Damages, liabilities, damages, costs, losses or expenses or is necessary to remedy the Default or breach of this Agreement.  In addition to the foregoing draw rights, (i) Owner shall also have the right to draw down on or collect against the Letter of Credit for all remaining funds in the Letter of Credit upon Owner’s demand if Contractor has not, prior to [***]  ([***]) Days before the then current expiration date, delivered to Owner a replacement letter of credit substantially identical to the Letter of Credit and from a U.S. commercial bank meeting the requirements in this Section 9.2 and extending the expiration date for the shorter of (a) a period of one (1) year, or (b) the expiration of such Defect Correction Period, and (ii) Owner shall also have the right to draw down on or collect against the Letter of Credit for all remaining funds available under such Letter of Credit upon Owner’s demand if the issuing bank is no longer Investment Grade and Contractor has not, within the applicable time period set forth in this Section 9.2, delivered to Owner a replacement letter of credit substantially identical to the Letter of Credit from a U.S. commercial bank meeting the requirements set forth in this Section 9.2.  Except for sums due and owing for LNTP Work (if any), Contractor shall not be entitled to any compensation under this Agreement unless and until Contractor provides the Letter of Credit to Owner in accordance with this Section 9.2.

1.         Contractor may fulfill the requirements set forth in this Section 9.2 through multiple, co-existent Letters of Credit issued to Owner with no more than a total of two (2) Letters of Credit being provided under this Section 9.2; provided

that each Letter of Credit shall meet the requirements of Section 9.2 and the amounts of such Letters of Credit shall, in the aggregate, equal an amount equal to ten percent (10%) of the Contract Price (as may be increased or decreased pursuant to Section 9.2).  Owner may in accordance with Section 9.2 draw down or collect on any one of the Letters of Credit, or all of the Letter of Credits, or any combination thereof, in any amounts Owner determines with respect to each Letter of Credit in order to collect all the amounts permitted under Section 9.2, which such allocation and collection on any one or more of the Letters of Credit shall be determined in Owner’s sole discretion.  Any reference to “Letter of Credit” in this Agreement shall mean any one, any combination, or all of the Letters of Credit provided under this Agreement pursuant to this Section 9.2A.1, at Owner’s sole discretion.

B.          The amount of the Letter of Credit shall decrease to an aggregate amount equal to:

1.       seven percent (7%) of the Contract Price upon the commercial bank’s receipt from Owner of a written notice that (i) Substantial Completion of Train 1 has occurred (including Contractor’s payment of all Delay Liquidated Damages due and owing under this Agreement for Train 1), and (ii) Contractor has achieved the Performance Guarantees for Train 1 or paid all Performance Liquidated Damages due and owing under this Agreement for Train 1 (including any potential Performance Liquidated Damage exposure based upon the results of the Performance Tests conduction prior to Substantial Completion);

2.       provided that the conditions of clauses (i) and (ii) of Section 9.2B.1 have occurred, five percent (5%) of the Contract Price upon the commercial bank’s receipt from Owner of a written notice that (i) Substantial Completion of Train 2 has occurred (including Contractor’s payment of all Delay Liquidated Damages due and owing under this Agreement for Train 2), and (ii) Contractor has achieved the Performance Guarantees for Train 2 or paid all Performance Liquidated Damages due and owing under this Agreement for Train 2 (including any potential Performance Liquidated Damage exposure based upon the results of the Performance Tests conduction prior to Substantial Completion);

3.       provided that the conditions of clauses (i) and (ii) of Section 9.2B.2 have occurred, two percent (2%) of the Contract Price upon the commercial’s bank receipt from Owner of written notice of the expiration of the period specified in clause (i) of the definition of “Defect Correction Period”; provided that if the expiration of such Defect Correction Period occurs before Substantial Completion of Train 2, such decrease shall not occur until after the conditions for decreasing the Letter of Credit for Substantial Completion of Train 2 occurs; and

4.       zero percent (0%) of the Contract Price within [***]  ([***]) Days after the issuing commercial bank’s receipt from Owner of a written notice of the

expiration of the period specified in clause (ii) of the definition of “Defect Correction Period”, except that the Letter of Credit shall remain in effect in an aggregate amount equal to the reasonable value of any claims that Owner has against Contractor arising out of this Agreement and which remain unresolved at the expiration of the period specified in clause (ii) of the definition of “Defect Correction Period.”  Upon the resolution of such claims, the Letter of Credit shall be decreased to an aggregate amount equal to zero percent.

C.         The Letter of Credit shall remain in full force and effect from the issuance of the Letter of Credit through the expiration of the period specified in clause (ii) of the definition of “Defect Correction Period” (i.e., the [***]  ([***]) month period following Substantial Completion of Train 2) in accordance with Section 9.2B.4.  Partial drawings are permitted under the Letter of Credit.  No later than [***]  ([***]) Days after the satisfaction of the conditions listed in 9.2B.1, 9.2B.2, 9.2B.3, or 9.2B.4 above, Owner shall provide the commercial bank that issued the Letter of Credit with the written notice as specified in that particular section.  No later than [***]  ([***]) Days after expiration of the Defect Correction Period, Owner shall provide the commercial bank that issued Letter of Credit with written notice of the expiration of such period.

D.         Owner shall copy Contractor on the notices provided to the commercial bank described in Section 9.2B.

ARTICLE 10

OWNERSHIP OF DOCUMENTATION

10.1       Ownership of Work Product.  Owner and Contractor acknowledge that during the course of, and as a result of, the performance of the Work and prior work related to the Facility done by Contractor for Owner (including any work done by Contractor or any of its Affiliates under the ITB Agreement or any other agreements between the Parties related to the Project), Contractor or its Affiliates, Subcontractors or Sub-subcontractors will create or have created for the Project and will deliver to Owner certain written materials, plans, Drawings, Specifications, or other tangible manifestations of Contractor’s performance of the Work (hereinafter individually or collectively referred to as “Work Product”).  Subject to Section 10.2, and to the use restrictions in the licenses described in Section 10.7A-C, Work Product prepared by Contractor, its Affiliates, Subcontractors or Sub-Subcontractors shall be “works made for hire,” and all rights, title and interest to the Work Product, including any and all copyrights in the Work Product, shall be owned by Owner irrespective of any copyright notices or confidentiality legends to the contrary which may have been placed in or on such Work Product by Contractor, its Affiliates, Subcontractors, Sub-Subcontractors or any other Person.  Contractor, its Subcontractors and its Sub-Subcontractors waive in whole all moral rights which may be associated with such Work Product.  If, for any reason, any part of or all of the Work Product is not considered a work made for hire for Owner or if ownership of all right, title and interest in the Work Product shall not otherwise vest in Owner, then Contractor agrees, subject to Section 10.2, that such ownership and copyrights in the Work Product, whether or not such Work Product is fully or partially complete, shall be automatically assigned from Contractor to Owner without further consideration, and Owner shall thereafter own

all right, title and interest in the Work Product, including all copyright interests.  IF OWNER USES ANY WORK PRODUCT FOR PURPOSES OTHER THAN THOSE RELATING TO THE FACILITY, AND CONTRACTOR IS NOT INVOLVED IN THE ENGINEERING, PROCUREMENT, OR CONSTRUCTION OF SUCH OTHER PROJECT, OWNER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS CONTRACTOR INDEMNIFIED PARTIES WITH RESPECT TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES, OR OTHER CAUSES OF ACTION ARISING FROM SUCH USE, REGARDLESS OF THE CAUSE SUCH CLAIMS, DAMAGES, LOSSES, LIABILITIES, OR OTHER CAUSES OF ACTION, INCLUDING THE SOLE OR JOINT NEGLIGENCE OF ANY CONTRACTOR INDEMNIFIED PARTIES.  LIKEWISE, IF THIS AGREEMENT IS TERMINATED, AND OWNER THEREAFTER MODIFIES THE WORK PRODUCT WITHOUT THE INVOLVEMENT OF CONTRACTOR, AND SUCH MODIFIED WORK PRODUCT IS USED TO ENGINEER OR CONSTRUCT THE FACILITY, AND SUCH MODIFICATIONS TO THE WORK PRODUCT INFRINGES UPON THE INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY, OWNER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS CONTRACTOR INDEMNIFIED PARTIES WITH RESPECT TO ANY CLAIMS, DAMAGES, LOSSES, LIABILITIES OR OTHER CAUSES OF ACTION BROUGHT BY SUCH THIRD PARTY ARISING FROM SUCH MODIFICATION.

10.2       Contractor’s Intellectual Property and Third Party Intellectual Property.  As between Owner and Contractor, Contractor and its Affiliates shall retain ownership of (i) all proprietary intellectual property rights owned by Contractor or its Affiliates prior to the Effective Date; (ii) any improvements to the intellectual property developed by Contractor or its Affiliates as part of this Agreement, including proprietary software, proprietary program settings or other proprietary engineering tools used, modified or adapted for performance of the Work; and (iii) all proprietary intellectual property rights developed by Contractor or its Affiliates outside this Agreement, the ITB Agreement or any other agreements between the Parties related to the Project (hereinafter referred to as “Contractor’s Intellectual Property”), regardless of whether such Contractor’s Intellectual Property is included in the Work Product, and nothing in this Agreement shall result in a transfer of ownership of any Contractor’s Intellectual Property or the proprietary intellectual property owned and developed by Subcontractors or Sub-subcontractors (“Third Party Intellectual Property”).  With respect to such Contractor’s Intellectual Property and Third Party Intellectual Property relating to the Facility (but subject to Section 10.5 and to the use restrictions in the licenses described in Section 10.7A-C), Contractor grants to Owner (when the Work Product is conveyed or assigned pursuant to Section 10.1) an irrevocable, perpetual, non-exclusive and royalty-free license (including with right to assign such license) to use, modify and copy such Contractor’s Intellectual Property and Third Party Intellectual Property for any purpose relating to (a) the Facility (including any expansions thereto), (b) the Expanded Facility, or (c) any other related facility, project or program that the Owner, including its Affiliates, joint ventures, partners and assigns, may choose to develop, expand, design, procure or construct, provided that with respect to (b) and (c), such license shall only apply to Authorized Documents.  Subject to Sections 10.6 and 10.7, all Subcontracts and Sub-subcontracts shall contain provisions consistent with Section 10.1 and Section 10.2.  Contractor warrants that it is entitled to grant licenses under any Contractor’s Intellectual Property and Third Party Intellectual Property (but subject to Section 10.6 below regarding APCI, and subject to Sections 10.7A, 10.7B and 10.7C regarding the APCI License, BASF License and [***] License, respectively) necessary for Owner to exploit and have exploited its full and unrestricted rights regarding the use of the Work Product for any purpose relating to (a) the Facility (including any expansions thereto), (b) the Expanded Facility or (c) [***].  If Owner or any of its Affiliates, joint ventures, partners and assigns uses Contractor’s Intellectual Property or Third Party Intellectual Property on any project, facility or program that does not involve Contractor or any of its Affiliates, Owner shall indemnify Contractor from any

claims brought against Contractor relating to Contractor’s Intellectual Property or Third Party Intellectual Property.

10.3       Limitations on Use of Work Product.  The Work Product, including all copies thereof, shall not be used by Contractor or its Subcontractors, Sub-subcontractors or any other Persons on any other project for a Person without first removing all information provided in Section 10.4, all Owner’s Confidential Information in Section 19.1(ii) and any other information identifying Owner, the Project, the Facility or the Site.  Pursuant to the requirements of this Section 10.3, Owner grants Contractor an irrevocable, perpetual and royalty-free license to use, modify and copy the Work Product for any other project, except for any of the following which may be in such Work Product: (i) any proprietary intellectual property rights owned by Owner or any Affiliate of Owner; or (ii) any proprietary intellectual property rights in which Owner or an Affiliate of Owner has a license.  As a condition of using on another project any Work Product that Contractor has a license under this Section 10.3, Contractor shall remove from the Work Product any reference to the Project or Owner.  The foregoing license and rights to use any Work Product granted to Contractor shall be subject to any limitations imposed on Contractor by third parties which have any ownership interest in such Work Product or any proprietary intellectual property embedded therein.

10.4       Owner Provided Documents.  Owner represents that it owns or has a license to the information, data and documentation referenced within Attachment M of the ITB Agreement, and that Contractor had and continues to have the right to use such information as the basis of the design of the Facility.  All written materials, plans, drafts, specifications, computer files or other documents (if any) prepared or furnished to Contractor by Owner, the Owner Indemnified Parties or any of Owner’s other consultants, suppliers or contractors shall at all times remain the property of Owner, and Contractor shall not make use of any such documents or other media for any other project or for any other purpose other than to perform the Work and fulfill its obligations under the Agreement.  All such documents and other media, including all copies thereof, shall be returned to Owner upon Final Completion or the earlier termination of this Agreement, except that Contractor and its Subcontractors may, subject to their respective confidentiality obligations as set forth in ARTICLE 19, retain one (1) record set of such documents or other media as required by Section 3.13A. Notwithstanding anything to the contrary in this Agreement, Contractor’s and its Subcontractors’ computer systems may automatically make and retain back-up copies of emails containing written materials, plans, drafts, specifications, computer files or other documents (if any) prepared or furnished by any member of the Owner Indemnified Parties or any of the Owner Indemnified Parties’ other consultants, suppliers or contractors and Contractor and any such Subcontractors may retain such copies in its archival or back-up computer storage for the period that Contractor and any such Subcontractors normally archive backed-up computer records, provided that Contractor and any such Subcontractors shall not access or use such archival or back-up copies for any purpose without the knowledge and approval of its respective legal counsel, and other than for compliance with any legal, regulatory or information audit purposes after the earlier of the completion of the Services or the termination of this Agreement; provided, further, that such copies are subject to the confidentiality obligations set forth in ARTICLE 19 until destroyed.  Owner hereby grants to Contractor, its Affiliates and Subcontractors a non-exclusive, royalty-free, irrevocable, non-transferable license to use and modify Pre-Existing Owner Proprietary Work Product (and all Intellectual Property existing or referenced therein) to the extent required to perform Contractor’s obligations under this Agreement.  For the purposes of this Agreement, “Pre-

Existing Owner Proprietary Work Product” means Intellectual Property and written materials, plans, drafts, specifications, or computer files or other documents, owned by Owner or its Affiliates prior to the Effective Date or developed or acquired by Owner or its Affiliates independently of this Agreement.

10.5       License to Use Liquefaction Technology.  Contractor represents that the rights granted in this ARTICLE 10 are sufficient for the engineering, procurement, construction, commissioning, pre-commissioning, start-up, testing, operation, maintenance and repair of the Facility, including for natural gas pre-treatment, condensate production and the liquefaction of natural gas into LNG, practicing such technology in the Facility, and transporting, making, selling, offering to sell, exporting, importing or offering to import throughout the world, condensate and LNG produced at the Facility.

10.6       APCI Third Party Intellectual Property.  Notwithstanding anything to the contrary, but subject to the APCI License described in Section 10.7A, (i) title to drawings, specifications and other data prepared by APCI, or containing the Third Party Intellectual Property of APCI, shall remain vested in APCI; and (ii) Owner’s disclosure of any APCI confidential information shall be subject to, and governed by, Owner’s separate non-disclosure agreement with APCI.

10.7       License to Use Liquefaction Technology.

A.       APCI License.  Contractor shall, prior to and as a condition precedent to achievement of Substantial Completion of each Train, obtain and grant to Owner a non-exclusive, paid-up, irrevocable license and transferable right to (i) use, operate, maintain, repair, and modify all Equipment furnished by APCI; (ii) practice the APCI natural gas liquefaction process in respect of such Equipment incorporated into the Facility; and (iii) make, use and sell products obtained by such use, operation or practice of the Equipment furnished by APCI to any country in the world (the “APCI License”).  The Parties shall, mutually agree to, and Contractor shall cause APCI to agree to, a form of assignment of the APCI License within [***]  ([***]) Days after the Effective Date.

B.       BASF License.  With respect to the BASF gas processing technologies (including BASF OASE technology and products) that Contractor is providing as part of the Work, Contractor shall, no later than [***]  ([***]) Days after NTP, and in any event, prior to and as a condition precedent to achievement of Substantial Completion of each Train, obtain and grant to Owner an irrevocable, perpetual, non-exclusive and royalty-free sublicense (including with right to assign such license other than to a competitor to BASF) to use, modify and copy BASF gas processing technologies for any purposes related to the Facility (the “BASF License”).  For purposes of this Section 10.7B, “competitor of BASF” means any third party who – either itself, or whose Affiliate – develops, owns and/or markets to any other third parties a process for the removal of acid gases from gaseous streams by absorption in a liquid absorbent.  The Parties shall mutually agree to, and Contractor shall cause BASF to agree to, a form of sublicense of the BASF License within [***]  ([***]) Days after the Effective Date.

C.       [***].

ARTICLE 11

COMPLETION AND PERFORMANCE LIQUIDATED DAMAGES

11.1        Notice and Requirements for Mechanical Completion and RFSU.

A.        Notice and Requirements for Mechanical Completion.  No later than [***]  ([***]) Months prior to the Guaranteed Substantial Completion Date for each Train, Contractor shall provide to Owner for its review and comment detailed Mechanical Completion requirements, in the form of checklists, for completion of each system or subsystem of Equipment for each Train.  Once Contractor has incorporated all of Owner’s comments and/or proposed revisions to the Mechanical Completion checklists, such Mechanical Completion checklists shall form a part of the requirements for achieving Mechanical Completion.  Contractor shall comply with all requirements for Mechanical Completion set forth in this Agreement, including those requirements set forth in the definition of the term Mechanical Completion, Attachment A,  Attachment M and the Mechanical Completion checklists agreed by Owner and Contractor pursuant to this Section 11.1.  Upon Mechanical Completion of each system or subsystem of Equipment for the Facility or each Train, Contractor shall certify to Owner in the form of Schedule L-1 for such system or subsystem or Train (“Mechanical Completion Certificate”) that all requirements under this Agreement for Mechanical Completion have occurred, including all of the requirements specified in the applicable Mechanical Completion checklist have been completed.  The Mechanical Completion Certificate shall be accompanied by all other supporting documentation as may be required under this Agreement to establish that the requirements for Mechanical Completion have been met.

B.        Notice and Requirements of Ready for Start Up.  No later than [***]  ([***]) Months prior to the Guaranteed Substantial Completion Date for each Train, Contractor shall provide to Owner for its review and comment detailed RFSU requirements, in the form of checklists, for each Train.  Once Contractor has incorporated all of Owner’s comments and/or proposed revisions to such RFSU checklists, such RFSU checklists shall form a part of the requirements for achieving RFSU of each Train.  Contractor shall comply with all requirements for RFSU set forth in this Agreement, including those requirements set forth in the definition of the term RFSU, Attachment A,  Attachment M and the RFSU checklists agreed by Owner and Contractor pursuant to this Section 11.1B.  Upon RFSU of a Train, Contractor shall certify to Owner in the form of Schedule L-3 (“RFSU Certificate”) that all requirements under this Agreement for RFSU have occurred with respect to such Train, including all of the requirements specified in the applicable RFSU checklist have been completed.  The RFSU Certificate shall be accompanied by all other supporting documentation as may be required under this Agreement to establish that the requirements for RFSU for such Train have been met.

11.2        Ready to Load First Cargo.

A.        Notice and Requirements of Ready to Load First Cargo.  Contractor shall comply with all requirements for RLFC for each Train set forth in this Agreement, including those requirements set forth in the definition of the applicable RLFC and those set forth in Attachments A and T.  To the extent not specified in Attachments A and T, the

Parties shall, no later than [***]  ([***]) Days prior to the Guaranteed Substantial Completion Date for the applicable Train, mutually agree upon the requirements for achieving RLFC for such Train.  At such time as the applicable Train has achieved RLFC, Contractor shall certify to Owner in the form of Schedule L-4 (“RLFC Certificate”) that all requirements under this Agreement for RLFC for such Train have occurred.  The RLFC Certificate for each Train shall be accompanied by all other supporting documentation as may be required under this Agreement to establish that the requirements for such RLFC have been met.  Notwithstanding the foregoing and prior to the First RLFC Window Period for each Train, Contractor shall cooperate with Owner to propose an alternative notice and windowing procedure that is more cost efficient and economically feasible to Owner.  If such alternative is accepted by Owner in its sole discretion, the foregoing notice and windowing procedure shall be modified by Change Order.

B.        RLFC Window Period.  Without limitation of any other scheduling requirements contained in this Agreement, Contractor shall, for each Train, provide Owner with the following written notices, notifying Owner of the period when Contractor expects to achieve RLFC for such Train (each period of time being a  “RLFC Window Period”):

1.        At least [***]  ([***]) Days prior to achievement of RLFC for such Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period in which Contractor expects to achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the “First RLFC Window Period”);

2.        At least [***]  ([***]) Days prior to achievement of RLFC for such Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period falling within the First RLFC Window Period in which Contractor expects to achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the “Second RLFC Window Period”); provided that if Contractor fails to give timely notice of same, the Second RLFC Window Period shall be the latest [***]  ([***]) Day period within the First RLFC Window Period;

3.        At least [***]  ([***]) Days prior to achievement of RLFC for such Train, Contractor shall notify Owner in writing of a [***]  ([***]) Day period falling within the Second RLFC Window Period in which Contractor expects to achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the “Third RLFC Window Period”);  provided that if Contractor fails to give timely notice of same, the Third RLFC Window Period shall be the latest [***]  ([***]) Day period within the Second RLFC Window Period; and

4.        At least [***]  ([***]) Days prior to achievement of RLFC for such Train,  Contractor shall notify Owner in writing of a [***]  ([***]) Day period falling within the Third RLFC Window Period in which Contractor expects to achieve RLFC for such Train (such [***]  ([***]) Day period referred to as the “Fourth RLFC Window Period”); provided that if Contractor fails to give timely notice of same, the Fourth RLFC Window Period shall be the latest [***]  ([***]) Day period within the Third RLFC Window Period.

Owner shall be entitled to rely upon such first, second, third and fourth notices, which are set forth in this Section 11.2B, in scheduling the LNG Tankers for the purpose of loading the first LNG cargo for each Train; provided, however, such reliance shall not relieve Owner of its obligation to provide LNG Tankers for RLFC.  In the event that Contractor at any time becomes aware or has reason to believe that its ability to achieve RLFC for a Train will be delayed beyond the applicable RLFC Window Period specified in the then current written notice given pursuant to this Section 11.2B, Contractor will immediately give Owner written notice of such fact and of the date on which Contractor then expects to achieve RLFC for such Train, but such notice shall not relieve Contractor of its responsibility to achieve RLFC for such Train within the then current RLFC Window Period or pay RLFC Delay Liquidated Damages.  Owner shall provide operating personnel pursuant to Section 4.4 and the natural gas feed pursuant to Section 4.6D for Contractor to achieve RLFC for each Train in accordance with this Section 11.2.

▇.        ▇▇▇▇▇ in RLFC.  If through no fault of Owner Indemnified Parties (i) RLFC for a Train occurs after the Fourth RLFC Window Period or (ii) the Facility is unable to load an LNG Tanker to demonstrate RLFC for a Train, then Contractor shall be liable to and pay to Owner the amounts in Sub-section 11.2C.1 or 11.2C.2 as applicable:

1.        After such LNG Tanker arrives at the Site, [***] U.S. Dollars (U.S. $[***]) per Day for each Day, or portion thereof, after the Fourth RLFC Window Period expires until the completion of LNG Tanker loading, subject to a cap of [***] U.S. Dollars (U.S. $[***]) per applicable Train and subject to Contractor’s overall liability for Delay Liquidated Damages set forth in Section 20.2; or

2.        If Owner cancels or turns away the LNG Tanker before it arrives at the Site as a result of notice provided by Contractor to Owner, or if Contractor fails to provide such notice, through reasonable evidence provided by Contractor to Owner (such as through schedules, reports or other documents provided by Contractor) that the Facility will be unable to load an LNG Tanker during the Fourth RLFC Window Period to demonstrate RLFC for a Train,  then [***] U.S. Dollars (U.S. $[***]) per LNG Tanker, subject to a cap of [***] U.S. Dollars (U.S. $[***]) per applicable Train and subject to Contractor’s overall liability for Delay Liquidated Damages set forth in Section 20.2 (the amounts in clause 11.2C.1 and 11.2C.2 are hereinafter referred to as “RLFC Delay Liquidated Damages”).

D.        Owner Does Not Timely Deliver LNG Tanker.  If Owner does not deliver the LNG Tanker to load the first LNG cargo for a Train within the Fourth RLFC Window Period and Contractor is ready to receive such LNG Tanker and ready to load LNG into such LNG Tanker, Contractor shall be entitled to a Change Order if and to the extent permitted under Section 6.8.

E.        LNG Production Plan.  At least [***]  ([***]) months prior to RLFC of each Train, Contractor shall prepare and provide Owner with Contractor’s LNG production plan, prepared by Contractor using GECP, detailing Contractor’s estimated production of LNG prior to Substantial Completion of each Train, including the dates and volumes of LNG to be produced and the dates in which it forecasts that such LNG would need to be removed

from the LNG Storage Tanks to allow for such LNG production.  Such plan shall be in sufficient detail to allow for Owner to schedule for providing the means for the removal of LNG from the LNG Storage Tanks, whether by LNG Tankers or otherwise.  Contractor shall provide Owner with monthly written notices updating its LNG production plan until [***]  ([***]) months prior to RLFC and then weekly thereafter, provided, however, such written notices shall not require Owner to reschedule any LNG Tankers.  As between Owner and Contractor, Owner shall own all LNG produced by each Train and will be the party responsible for providing the means for removal of such LNG.  Owner will provide sufficient LNG tank capacity for Contractor to perform the Performance Tests based on Contractor’s LNG production plan.

F.        Shiploading Performance Testing.  Contractor shall utilize an LNG Tanker that arrives at the Facility after RLFC to perform the LNG Shiploading Performance Test in accordance with the requirements of this Agreement, including Attachment S and Section 11.2B.  Contractor shall provide Owner with [***]  ([***]) Days prior written notice of its intent to perform the LNG Shiploading Performance Test.

11.3        Notice and Requirements for Substantial Completion.  Contractor shall comply with all requirements for Substantial Completion of each Train herein, including as set forth in the definition of the term Substantial Completion and in Attachments A,  S and T.  For the initial Performance Test for each Train, Contractor shall give Owner not less than [***]  ([***]) Days’ prior notice of its intention to commence each initial Performance Test for a Train, and, on the [***]  ([***]) Day and thirtieth (30th) Day immediately prior to Contractor’s intention to commence such testing activities, Contractor shall provide notice to Owner.  For all Performance Tests other than the initial Performance Test for each Train, Contractor shall give the Owner not less than [***]  ([***]) Days’ written notice of its intention to commence a Performance Test.  To the extent not specified in Attachment S, the Parties shall, no later than [***]  ([***]) Days prior to the Guaranteed Substantial Completion Date for the applicable Train, agree upon final test procedures for the conduct of the Performance Tests applicable to such Train and the achievement of Substantial Completion of such Train.  Except for the items listed in Attachment V, the natural gas feed pursuant to Section 4.6C, and operation personnel to be provided by Owner under Section 4.4, Contractor shall provide labor, equipment, supplies, and all other items necessary for the conduct of the Performance Tests.  Contractor shall analyze the data obtained during all Performance Tests and ensure that such data reflects the performance standards required hereunder.  A complete electronic native copy of all raw performance data and a detailed listing of all testing instrumentation utilized shall be provided to Owner at the completion of testing.  Upon achieving all requirements under this Agreement for Substantial Completion of each Train, Contractor shall certify to Owner in the form of Schedule L-5 (“Substantial Completion Certificate”) that all of the requirements under this Agreement for Substantial Completion have occurred and provide Owner with a Substantial Completion Certificate, a Performance Test report, and analysis to Owner for the applicable Train.  Each Performance Test report shall include, at minimum: (i) the raw data, (ii) the procedures and instrumentation utilized for the applicable Performance Test, (iii) test calculations and information in Microsoft Excel format, and a full explanation concerning same, for adjustments to the Guarantee Conditions, as and to the extent specified in Attachment S, and (iv) any other supporting information used to demonstrate that the Work has met the Minimum Acceptance Criteria and other requirements of this Agreement.  The Substantial Completion Certificate for each Train shall be accompanied by all other supporting