Exhibit 10.1

 

CONSENT AND WAIVER NO. 1

TO CREDIT AGREEMENT

 

This CONSENT AND WAIVER NO. 1 TO CREDIT AGREEMENT (this “Consent and Waiver”),
dated as of April 4, 2005, is made among Sabine Pass LNG, L.P., a Delaware
limited partnership (the “Borrower”), Société Générale, in its capacity as
administrative agent for the Lenders (the “Agent”) and HSBC Bank USA, National
Association, in its capacity as collateral agent for the Lenders (the
“Collateral Agent”).

 

W I T N E S S E T H

 

WHEREAS, the Borrower, the Agent and the Collateral Agent are party to a Credit
Agreement dated as of February 25, 2005 (as amended, modified and supplemented
and in effect from time to time, the “Credit Agreement”), pursuant to which the
lenders from time to time party thereto (the “Lenders”) have agreed to make
loans to the Borrower in an aggregate principal amount of $822,000,000;

 

WHEREAS, the Borrower has requested that the provisions of the EPC Contract and
the Credit Agreement requiring the Borrower and the EPC Contractor to procure
certain insurance coverage no later than the Notice to Proceed be amended to
permit such coverage to be procured within 60 days of the date on which the
Borrower issues the Notice to Proceed;

 

WHEREAS, the Borrower desires to conduct certain preliminary planning work in
connection with a potential expansion of the Project as more fully described in
the waiver request letter (the “Waiver Request Letter”) attached hereto as
Exhibit A (the “Expansion Preparation”);

 

WHEREAS, pursuant to the Waiver Request Letter, the Borrower has requested that
the Lenders (i) consent to a modification to the EPC Contract and a waiver of
certain provisions of the Credit Agreement to extend the time period for the
procurement of insurance and (ii) waive certain provisions of the Credit
Agreement to permit the Expansion Preparation;

 

NOW THEREFORE, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound hereby,
agree as follows:

 

Section 1. Definitions. Capitalized terms (including those used in the preamble
and the recitals above) not otherwise defined herein shall have the meanings
assigned to such terms in the Credit Agreement and the principles of
interpretation set forth therein shall apply herein.

 

Section 2. Consent. The Agent, acting with the consent of the Majority Lenders,
hereby consents to (a) the Borrower entering into a modification of paragraph 1B
of Attachment O to the EPC Contract and (b) a waiver of compliance with the
provisions of Schedule 8.05 of the Credit Agreement, solely to the extent such
modification and waiver extend

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the date by which the Borrower and the EPC Contractor are required to procure
the insurance set forth therein from Notice to Proceed to a date which is no
more than 60 days following issuance of Notice to Proceed.

 

Section 3. Waiver. The Agent, acting with the consent of the Majority Lenders,
hereby waives compliance with Sections 7.11 and 8.17 of the Credit Agreement
solely to the extent necessary to permit the Borrower to conduct the Expansion
Preparation as expressly contemplated by the Waiver Request Letter and all
activities reasonably incidental thereto, provided that (i) all costs and
expenses incurred in connection with such Expansion Preparation and reasonably
incidental activities shall be funded by third parties and shall not be paid out
of the Equity Contribution Amount or proceeds of the Loans and (ii) other than
as provided in Section 2 hereof, nothing herein shall be construed as a consent
to or a waiver of the Lenders’ or Agent’s rights pursuant to Sections 8.20 or
8.21 of the Credit Agreement.

 

Section 4. Effectiveness. This Consent and Waiver shall become effective upon
receipt by the Agent of the counterparts of this Consent and Waiver duly
executed and delivered by each of the Borrower, the Agent and the Collateral
Agent.

 

Section 5. Miscellaneous.

 

(a) Limited Waiver.

 

(i) Except as expressly consented to or waived hereby, all of the
representations, warranties, terms, covenants, conditions and other provisions
of the Credit Agreement and the other Financing Documents shall remain unchanged
and unwaived and shall continue to be and shall remain in full force and effect
in accordance with their respective terms.

 

(ii) The consent and waiver set forth herein shall be limited precisely as
provided for herein to the provisions expressly consented to or waived herein
and shall not be deemed to be a waiver of any right, power or remedy of any
Lender, the Agent or the Collateral Agent under, or a waiver of, consent to or
modification of any other term or provision of the Credit Agreement, any other
Financing Document referred to therein or herein or of any transaction or
further or future action on the part of the Borrower which would require the
consent of the Lenders under the Credit Agreement or any of the other Financing
Documents.

 

(iii) Except as provided in Sections 2 and 3 hereof, nothing contained in this
Consent and Waiver shall abrogate, prejudice, diminish or otherwise affect any
powers, rights, remedies or obligations of any Person arising before the date of
this Consent and Waiver.

 

(b) Financing Document. This Consent and Waiver shall be deemed to be a
Financing Document referred to in the Credit Agreement and shall be construed,
administered and applied in accordance with the terms and provisions thereof.

 

(c) Counterparts; Integration; Effectiveness. This Consent and Waiver may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any parties hereto may execute this
Consent and Waiver by signing any such counterpart.

 

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(d) Costs and Expenses. The Borrower agrees to pay and reimburse the Agent for
all its reasonable costs and out-of-pocket expenses (including, without
limitation, the reasonable fees and expenses of counsel to the Agent and the
Lenders) incurred in connection with the preparation and delivery of this
Consent and Waiver and such other related documents.

 

(e) Governing Law. THIS CONSENT AND WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

 

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Consent and Waiver to be
duly executed and delivered as of the day and year first above written.

 

SABINE PASS LNG, L.P.,

      as Borrower

By:

 

Sabine Pass LNG – GP, Inc.,

its General Partner

By:

 

/s/ Graham McArthur

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Name:

 

Graham McArthur

Title:

 

Treasurer

Address for Notices:

717 Texas Avenue, Suite 3100

Houston, TX 77002

Attn: Treasurer

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SOCIÉTÉ GÉNÉRALE,

      as Agent

By:

 

/s/ Robert J. Preminger

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Name:

 

Robert J. Preminger

Title:

 

Director

Address for Notices:

1221 Avenue of the Americas

New York, NY 10020

Attn: Robert Preminger

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HSBC BANK USA, NATIONAL ASSOCIATION,

      as Collateral Agent

By:

 

/s/ Deirdra N. Ross

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Name:

 

Deirdra N. Ross

Title:

 

Assistant Vice President

Address for Notices:

HSBC Bank USA, National Association

452 Fifth Avenue

New York, NY 10018

Attn: Corporate Trust

With a copy to:

DLA Piper Rudnick Gray Cary US LLP

One Liberty Place

1650 Market Street, Suite 4900

Philadelphia, PA 19103

Attn: Peter Tucci, Esq.

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Exhibit A

to Consent and Waiver

 

Waiver Request Letter

 

(see attached)

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[CHENIERE LETTERHEAD]

 

March 16, 2005

 

Société Générale

1221 Avenue of the Americas

New York, NY 10020

Attn: Robert Preminger

 

Re: Sabine Pass LNG, L.P. (Sabine)

  Credit Agreement Dated as of February 25, 2005

 

Dear Robert:

 

Per our conversation Sabine is requesting the following amendments to the above
referenced credit agreement:

 

Section 8.05 - Insurance: Events of Loss

 

Sabine hereby requests that all required insurance provisions currently required
to be in place by the Notice to Proceed date (NTP), as defined in the Bechtel
Engineering, Procurement and Construction Agreement, be amended to be in place
no later than 60 days from the NTP. NTP is currently contemplated to be April 4,
2005. Please note that there is no equipment anticipated to be delivered during
this 60 day period. The insurance that was required to be in place at closing
will remain in full force and effect during this period.

 

Please be advised that in we are going to have to request modifications to the
insurance requirements stipulated under Schedule 8.05 due to the commercial
unfeasibility of some of the required coverages. We plan on using the 60 day
extension requested above to solidify the terms of the proposed insurance
placement and to gain the required lender approval.

 

Sections 7.11 and 8.17 - Nature of Business

 

Sabine hereby requests that the Nature of Business covenant be expanded to allow
for preliminary planning work to be performed in connection with a contemplated
expansion of the Sabine facility. This preliminary planning work will entail:

 

Technical and Project Management

 

•   Overall Project Management

 

•   Assemble Resource Reports 1, 10, 11, 13 for Environmental Assessment

 

•   MHI prepares LSTK price for Tanks and dikes

 

•   Negotiate Site sharing Issues with Bechtel

 

•   Develop EPC package

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Environmental

 

•   FERC Environmental Report (ER) Preparation

 

•   Preparation of Applicant prepared Environmental Assessment

 

  •   Federal Permitting

 

  •   USACE Jurisdictional determination

 

  •   NOAA Fisheries essential fish habitat (if needed)

 

  •   USFWS

 

•   State and local Permitting

 

  •   LDEQ Air permit modification

 

  •   LDEQ Construction Storm water NOI Modification

 

  •   LDWF T/E Species annual reconsult

 

  •   SHPO reconsult

 

  •   LDNR Coastal use solicitation of views

 

  •   Cameron Parish Building Permit

 

Geotechnical

 

•   Site Geotechnical work

 

•   Preliminary report for FERC

 

•   Lab work and Final Report

 

All costs associated with these activities will be funded entirely outside of
the current project finance structure.

 

Sincerely,

 

SABINE PASS LNG, L.P.

By: Sabine Pass LNG-GP, Inc., its General Partner

By:

 

/s/ Graham A. McArthur

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Graham A. McArthur

   

Treasurer