Harpswell Information

2000 K Street NW Suite 500
Washington, D.C. 20006-1872
Phone: 202.828.5800
Fax: 202.223.1225

September 29, 2003

Town of Harpswell
P.O. Box 39
Harpswell, Maine 04079

Attention: Kristi K. Eiane Town Administrator

Re: Engagement of Bracewell & Patterson, L.L.P.

Ladies and Gentlemen:

Thank you for engaging Bracewell & Patterson, L.L.P. to represent the Town of Harpswell (the "Town") as set forth in this letter. We appreciate the confidence you have shown in us and we look forward to the opportunity to work with the Town's representatives on behalf of the Town.

It is our practice to specify our engagement arrangements with our clients and that is the purpose of this letter and the attached Terms of Engagement. If you have any questions about this letter, the Terms of Engagement, or any aspect of the engagement or representation at any time, please contact me.

We have agreed that Bracewell & Patterson, L.L.P. will represent the Town in connection with the LNG terminal facility ground lease and other transactional and regulatory matters described and contemplated in the Memorandum of Offer for the Lease and Re-Use of the Former US Navy Fuel Depot in Harpswell, Maine dated September 17, 2003 by a venture (the "Venture"), the members of which are ConocoPhillips Company and TransCanada Pipelines Limited, to the Town, and such other matters that we agree to discharge upon your request from time to time (collectively, the "Project").

We have been engaged to represent the Town only. As such, we will not be representing any individual Selectmen, employees or other representatives of the Town or its agencies or subparts. In the event we are asked to undertake representation of any such individual,

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agency or subpart, we will do so only after obtaining your approval and a written engagement letter.

We understand that our point of contact for the purposes of this representation will be the Town's Board of Selectmen, and that we should direct all correspondence to Kristi K. Eiane, Town Administrator, until advised to the contrary.

The firm will treat all information received during this engagement as confidential. In addition to the normal protections afforded to firm clients, the firm will maintain all confidential documents received or generated during the engagement in a secure location. Further, the firm attorneys and staff who work on this representation will be instructed not to discuss the details of the representation with any other firm personnel.

It is possible that during or after this representation. Bracewell & Patterson. L.L.P. may represent clients, including without limitation Shell. that are adverse to the Town. We all agree that our representation of the Town will not disqualify or in any way limit this firm in representing clients adverse to the Town, unless the subject matter of such representation is specifically, factually and substantially related to our representation of the Town. This agreement will apply to any actions that might be taken in representing our clients in such unrelated matters. Further, in the event that Shell desires to become or becomes a shipper or capacity holder in the Harpswell LNG terminal, the Town agrees that the firm may represent Shell and agrees that the Town will not seek to disqualify the firm from representing Shell.

I will be the principal partner at Bracewell & Patterson, L.L.P. who will work on and supervise our discharge of matters for the Town under this engagement. Other attorneys, consultants and legal assistants employed by the firm may participate in the representation from time to time as necessary. We look forward to an active, collaborative working relationship with the Town, and we will, of course, keep you

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informed of significant events in the progress of the matters discharged hereunder and respond to your questions.

We generally charge for our services based upon the time devoted to the matter and the hourly rates of the lawyers, consultants and legal assistants that work on the representation. We review our billing rates periodically and generally revise them annually. If you ever have billing questions by all means give me a call.

The attached Terms of Engagement call for our billing the Town, as our client, directly for our fees and other charges. At your request we will submit copies or summaries of our invoices for services rendered to the Town Curtis Thaxter Stevens Broder & Micoleau, LLC, legal counsel to the Venture, for payment by the Venture or its counsel in accordance with the Town's agreement with the Venture and its counsel. Neither the submission of copies or summaries of our invoices as described above, nor the unavailability of funds for the payment thereof by the Venture or its counsel, will in any way relieve the Town from its primary responsibility for payment of our invoices in the time and manner described in the Terms of Engagement, or the consequences of our failure to receive payment in such time and manner described.

Please let me know if you would like to discuss any aspect of this engagement or the attached Terms of Engagement. If this letter and the Terms of Engagement accurately reflect our agreement, please sign and date the enclosed copy of this letter and return it to

Thank you again for the opportunity to represent the Town, and we look forward to developing our relationship with you and providing the Town with legal services of the highest quality.

GI-IW/ga
Enclosure

These are the Terms of Engagement referred to in our engagement letter. Because they are an integral part of our agreement to provide legal services, we ask that you review this document carefully and retain it for your files. If you have any questions after reading it, please contact us promptly.

In most cases, one attorney will be your principal contact. From time to time, that attorney may delegate parts of your work to other lawyers or to legal assistants or nonlegal professionals in the firm. For example, we do this in order to involve those with special knowledge or experience in an area and to provide service to you in a timely and efficient manner.

As lawyers, we undertake to provide representation and advice on the legal matters for which we are engaged, and it is important that we both have a clear understanding of the legal services that the firm has agreed to provide. In our engagement letter with you, we specify generally the scope of the services we will provide. If there are any questions about the terms of engagement, including the scope of the representation that we are to provide on the matters subject to this engagement, please raise those questions promptly with your principal contact at the firm.

We cannot guarantee the outcome of any matter. Any expression of our professional judgment regarding your matters or the potential outcome is, of course, limited by our knowledge of the facts and based on the law at the time of expression. It is also subject to any unknown or uncertain factors or conditions beyond our control.

Our law firm represents many companies and individuals. In some instances, the applicable rules of professional conduct may limit our ability to represent clients with conflicting or potentially conflicting interests. Those rules of conduct often allow us to exercise our independent judgment in determining whether our relationship with one client prevents us from representing another. In other situations, we may be permitted to represent a client only if the other clients consent to that representation.

If a controversy unrelated to the subject matter of the representation develops between you and any other client of the firm, we will follow the applicable rules of professional responsibility to determine whether we may represent either you or the other client in the unrelated controversy. In making this determination, we will consider your agreement to the Conflicts of Interest provisions in these Terms of Engagement.

In addition to our representation of other companies and individuals, we also regularly represent lawyers and law firms. As a result, opposing counsel in the matter may be a lawyer or law firm that we may represent now or in the future. Likewise, opposing counsel in the matter may represent our firm now or in the future. Further, we have professional and personal relationships with many other attorneys, often because of our participation in bar associations and other professional organizations. We believe that these relationships with other attorneys do not adversely affect our ability to represent any client and, in some circumstances, may enhance our representation. Your acceptance of our engagement letter means you consent to any such relationships between our firm and other lawyers or law firms, even counsel who is representing a party that is adverse to you in the matter that is the subject of this engagement or in some other matter.

Increasingly, conflict of interest is a concern for lawyers and their clients today. We attempt to identify actual and potential conflicts at the outset of any engagement, and may request that you sign a conflict waiver before we accept an engagement from you. Occasionally, other clients or prospective clients may ask us to seek a conflict waiver from you so that we can accept an engagement on their behalf. Please do not take such a request to mean that we will represent you less zealously; we make such requests because we take our professional responsibilities to all clients and prospective clients very seriously.

Unfortunately, conflicts sometimes arise or become apparent after work begins on an engagement. When that happens, we will do our best to address and resolve the situation in the manner that best serves the interests of all of our affected clients.

Because we are a large firm, we may be asked to represent someone whose interests may be adverse to yours. We are accepting this engagement on the understanding that our representation of you will not preclude us from accepting any other engagement from any existing or new client, including litigation adverse to you, provided that (i) such engagement is not substantially related to the subject matter of any services we are providing to you and (ii) in accepting such other engagement we would not impair the confidentiality of proprietary, sensitive or otherwise confidential information you have provided to us.

Rules concerning conflicts of interest vary with the jurisdiction. In order to avoid any uncertainty, our policy is that the Texas Disciplinary Rules of Professional Conduct will be applicable to the representation. Your acceptance of our engagement letter means you agree with that policy, unless the engagement letter specifically states that some other rules of professional responsibility will govern our attorney-client relationship.

The basis for determining our fee for legal services is set forth in the engagement letter itself. If you are unclear about the basis for determining your fee, please raise any questions you may have with your principal contact at the firm.

Clients frequently ask us to estimate the fees and other charges they are likely to incur in connection with a particular matter. We are pleased to respond to such requests, whenever possible, with an estimate based on our professional judgment. This estimate always carries the understanding that, unless we agree otherwise in writing, it does not represent a maximum, minimum, or fixed-fee quotation.^r The ultimate cost frequently is more or less than the amount estimated.

As an adjunct to providing legal services, we may incur and pay a variety of charges on your behalf or charge for certain ancillary support services. Whenever we incur such charges on your behalf or charge for such ancillary support services, we will bill them to you as part of your monthly invoice. Accordingly, our invoices usually will include amounts, not only for legal services rendered, but also for other expenses and services. Examples include charges for photocopying, postage, facsimiles, long-distance telephone calls, travel and conference expenses, delivery charges, computerized research, and facsimile and other electronic transmissions. Outside expenses will generally be billed at cost, while some in-house expenses (e.g., copying, telecopying, computer services and in-house research) will include a reasonable allocation of overhead. In appropriate cases, reimbursable expenses will also include overtime charges for secretaries and other staff.

You may authorize us to retain third-parties, such as consultants, experts and investigators, as may be necessary to the representation. Although we advance third-party disbursements in reasonable amounts, we will ask you to pay larger third-party invoices (usually those over $200) directly to the third party providing the services. Because we often have ongoing professional relationships with the persons who render such services, we also ask that you pay such bills promptly and send us notice of your payment.

We generally make and retain copies of all documents generated or received by us in the course of your representation. Should you request documents from us at the conclusion of our representation (other than your original documents), you agree that we may generate copies for our files at your expense, including both the reproduction charges and professional fees for time expended in reviewing files to be returned to you.

We will bill you on a regular basis, normally each month, for both fees and other charges. You agree to make payment within 30 days of the date of our invoice.

Should your account become delinquent and satisfactory payment terms are not arranged, as permitted under the rules regulating our profession we will be required to withdraw from the representation. In most cases, and except as prohibited by ethical considerations, if your account becomes more than 60 days delinquent, we will cease representation until we can arrive at a mutually satisfactory arrangement for payment of the delinquent account and the resumption of services.

If the representation will require a concentrated period of activity, such as a trial, arbitration, or hearing, we reserve the right to require the payment of all amounts then owing to us and the prepayment to us of the fees and expenses we estimate will be incurred in preparing for and completing the trial, arbitration, or hearing, as well as arbitration fees likely to be assessed. If you fail to timely pay any additional deposit requested, we will have the right to cease performing further work and the right to withdraw from the representation.

Payment of our fees and costs is not contingent on the ultimate outcome of our representation.

We look to you, the client, for payment regardless of whether you are insured to cover the particular risk. From time-to-time, we assist clients in pursuing third-parties for recovery of attorneys' fees and other charges resulting from our services. These situations include payments under contracts, statutes or insurance policies. However, it remains your obligation to pay all amounts due to us within 30 days of the date of our statement.

We look forward to the opportunity to complete our representation of you in the matters you specify. You may, however, terminate our representation or this engagement at any time, with or without cause, by notifying us in writing. We will return your papers and other property to you promptly upon receipt of your request for those materials unless they are appropriately subject to a lien. You agree that we will own and retain our own files pertaining to any matter or case, including, for example, firm administrative records, time and expense reports, personnel and staffing materials, credit and accounting records, and internal lawyer's work product such as drafts, notes, internal memoranda, and legal and factual research including investigative reports, prepared by or for the internal use of lawyers.

The termination of our services will not affect your responsibility for payment of legal services rendered and other charges incurred before termination and in connection with an orderly transition of the matter.

At the conclusion of the engagement, we generally return to the client the client's original documents and any other documents that are specifically requested to be returned. As to any original documents so returned, we may elect to keep, at our expense, a copy of the documents in our stored files. Should you request other documents from us at the conclusion of our representation of you, you agree that we may generate copies for our files at your expense, including both the reproduction charges and professional fees for time expended in reviewing files to be returned to you.

At the close of any matter, we usually send the pertinent parts of our files in that matter to a storage facility for storage at our expense. However, we do not store voluminous papers at our expense. The attorney closing the file will determine what part of the file is sent to storage and how long we will maintain the files in storage. Documents we choose not to store will be returned to you or destroyed.

By signing the engagement letter or otherwise indicating your acceptance of the engagement letter and these Terms of Engagement, you acknowledge that Bracewell & Patterson, L.L.P. has made no promises or guarantees to you about the outcome of the representation, and nothing in these Terms of Engagement shall be construed as such a promise or guarantee. Either at the commencement or during the course of the representation, we may express opinions or beliefs about matters or various courses of action and the results that might be anticipated. Any expressions on our part concerning the outcome of any matter, or any other legal issues, are based on our professional judgment and are not guarantees.

The code of professional responsibility to which we are subject lists several types of conduct or circumstances that require or allow us to withdraw from representing a client. These include, for example, nonpayment of fees or charges, misrepresentation or failure to disclose material facts, action contrary to our advice, and conflict of interest with another client.

We try to identify in advance and discuss with our clients any situation that may lead to our withdrawal. If withdrawal ever becomes necessary, we give our client written notice as soon as practicable.

The engagement letter and these Terms of Engagement reflect our entire agreement on the terms of this engagement. These written terms of engagement are not subject to any oral agreements or understandings, and any change in those terms can only be made in writing signed by both Bracewell & Patterson, L.L.P., and you.

We look forward to a long and mutually satisfying relationship with you. Again, if at any time you have a question or concern, please feel free to bring it to the attention of your principal contact at our firm.