Exhibit 10.1

 

EXECUTION COPY

 

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CREDIT AGREEMENT

 

Dated as of February 25, 2005

 

among

 

SABINE PASS LNG, L.P.,

as the Borrower

 

SOCIÉTÉ GÉNÉRALE,

as the Agent

 

HSBC BANK USA, NATIONAL ASSOCIATION,

as the Collateral Agent

 

and

 

LENDERS PARTY TO THIS AGREEMENT

FROM TIME TO TIME

 

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TABLE OF CONTENTS

 

This Table of Contents is not part of the Agreement to which it is attached but
is inserted for convenience only.

 

               Page

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ARTICLE I DEFINITIONS AND INTERPRETIVE MATTERS

   1              1.01    Certain Defined Terms    1              1.02   
Accounting Terms and Determinations    27              1.03    Certain
Principles of Interpretation    27              1.04    Consent Not to be
Unreasonably Delayed    28

ARTICLE II COMMITMENTS

   28              2.01    Loans    28              2.02    Borrowings    28  
           2.03    Changes of Commitments    28              2.04    Fees    29
             2.05    Lending Offices    29              2.06    Several
Obligations; Remedies Independent    29              2.07    Maintenance of
Records    30

ARTICLE III PAYMENTS OF PRINCIPAL AND INTEREST

   30              3.01    Repayment of Loans    30              3.02   
Interest    30              3.03    Optional Prepayments of Loans    31     
        3.04    Mandatory Prepayments    31

ARTICLE IV PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

   32      4.01    Payments    32      4.02    Pro Rata Treatment    32     
4.03    Computations    33      4.04    Minimum Amounts    33      4.05   
Certain Notices    33      4.06    Non-Receipt of Funds by the Agent    33     
4.07    Sharing of Payments; Etc.    34

ARTICLE V YIELD PROTECTION; ETC.

   35      5.01    Alternate Rate of Interest    35      5.02    Increased Costs
   36      5.03    Break Funding Payments    37      5.04    Taxes    38     
5.05    Mitigation of Obligations; Replacement of Lenders    39      5.06   
Illegality    40

ARTICLE VI CONDITIONS PRECEDENT

   41      6.01    Closing Date    41      6.02    Funding Date    45

 

    - i -   CREDIT AGREEMENT

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             6.03    Conditions Precedent to all Loans    48      6.04    Final
Funding Date    50

ARTICLE VII REPRESENTATIONS AND WARRANTIES

   53      7.01    Existence    53      7.02    Financial Condition    53     
7.03    Action    53      7.04    No Breach    54      7.05    Government
Approvals; Government Rules    54      7.06    Proceedings    55      7.07   
Environmental Matters    56      7.08    Taxes    56      7.09    Tax Status   
57      7.10    ERISA; ERISA Event    57      7.11    Nature of Business    57  
   7.12    Security Documents    57      7.13    Subsidiaries    57      7.14   
Status    57      7.15    Material Project Documents; Licenses    58      7.16
   Margin Stock    59      7.17    Disclosure    59      7.18    Insurance    59
     7.19    Indebtedness; Investments    60      7.20    No Material Adverse
Effect    60      7.21    Absence of Default    60      7.22    Ownership    60
     7.23    Property    60      7.24    No Force Majeure    60      7.25   
Ranking    60      7.26    Labor Matters    60      7.27    Operating
Arrangements    60

ARTICLE VIII COVENANTS

   61      8.01    Reporting Requirements    61      8.02    Maintenance of
Existence, Etc.    62      8.03    Compliance with Government Rules, Etc.    63
     8.04    Environmental Compliance    63      8.05    Insurance; Events of
Loss    64      8.06    Proceedings    65      8.07    Taxes    66      8.08   
Books and Records; Inspection Rights    66      8.09    Use of Proceeds    66  
   8.10    Maintenance of Lien    66      8.11    Prohibition of Fundamental
Changes    67      8.12    Restricted Payments    67      8.13    Liens    68  
   8.14    Investments    69

 

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             8.15    Hedging Arrangements    69      8.16    Indebtedness    69
     8.17    Nature of Business    70      8.18    Project Construction;
Maintenance of Properties    71      8.19    Construction Reports    71     
8.20    EPC Contract    72      8.21    Project Documents, Etc.    74      8.22
   Operating Budgets    75      8.23    Operating Statements and Reports    76  
   8.24    Transactions with Affiliates    76      8.25    Other Documents and
Information    77      8.26    Debt Service Coverage Ratio    77      8.27   
Cooperation    77      8.28    Auditors    77      8.29    Accounts    77     
8.30    Guarantees    78      8.31    Events of Abandonment    78      8.32   
GAAP    78      8.33    Terminal Use Agreements    78      8.34    Updated
Surveys and Title Policies Following Facility Final Completion    78      8.35
   EPC Contract Letters of Credit    79      8.36    Certificate of Occupancy   
79      8.37    Noble Purchase Option    79      8.38    Lien Waivers    79     
8.39    Lease Amendments    79

ARTICLE IX EVENTS OF DEFAULT

   80      9.01    Events of Default; Remedies    80

ARTICLE X THE AGENT

   83      10.01    Appointment, Powers and Immunities    83      10.02   
Reliance by Agent    83      10.03    Defaults    84      10.04    Rights as a
Lender    84      10.05    Indemnification    84      10.06    Non-Reliance on
Agent, Collateral Agent and Other Lenders    85      10.07    Failure to Act   
85      10.08    Resignation or Removal of Agent    85      10.09    Consents
under Transaction Documents    86      10.10    Appointment of Collateral Agent
   86

ARTICLE XI MISCELLANEOUS

   86      11.01    Waiver    86      11.02    Notices    87      11.03   
Expenses; Etc.    87      11.04    Amendments, Etc.    88      11.05   
Successors and Assigns    89

 

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        11.06

   Assignments and Participations    89

11.07

   Marshalling; Recapture    91

11.08

   Treatment of Certain Information; Confidentiality    91

11.09

   Limitation of Liability    92

11.10

   Survival    93

11.11

   Captions    93

11.12

   Counterparts; Integration; Effectiveness    93

11.13

   Reinstatement    94

11.14

   Severability    94

11.15

   Remedies    94

11.16

   NO THIRD PARTY BENEFICIARIES    94

11.17

   SPECIAL EXCULPATION    94

11.18

   GOVERNING LAW; SUBMISSION TO JURISDICTION    95

11.19

   WAIVER OF JURY TRIAL    95

 

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APPENDICES, SCHEDULES AND EXHIBITS

 

APPENDIX A

   –    Lender Commitments

APPENDIX B

   –    Amortization Schedule

APPENDIX C

   –    Wire Transfer Details of Agent

APPENDIX D

   –    Project Documents with Affiliates

APPENDIX E

   –    Lease Agreements

APPENDIX F

   –    Construction Budget and Schedule

SCHEDULE 6.01(j)

   –    UCC Filing Jurisdictions

SCHEDULE 7.05(a)

   –    Government Approvals – Closing Date

SCHEDULE 7.05(b)

   –    Government Approvals – Post-Closing Date

SCHEDULE 7.07

   –    Environmental Matters

SCHEDULE 8.05

   –    Insurance Requirements

SCHEDULE 8.15(a)

   –    Permitted Swap

EXHIBIT A

   –    Form of Notice of Borrowing

EXHIBIT B-1

   –    Form of Borrowing Certificate

EXHIBIT B-2

   –    Form of Final Borrowing Certificate

EXHIBIT C-1

   –    Form of Initial Independent Engineer’s Certificate

EXHIBIT C-2

   –    Form of Independent Engineer’s Certificate

EXHIBIT C-3

   –    Form of Final Independent Engineer’s Certificate

EXHIBIT D

   –    Form of Pending Disbursements Clause

EXHIBIT E

   –    Form of Pledge Agreement

EXHIBIT F

   –    Terms of Subordination

EXHIBIT G

   –    Form of Construction Report

EXHIBIT H

   –    Form of Assignment and Acceptance

EXHIBIT I

   –    Form of Confidentiality Agreement

EXHIBIT J

   –    Form of Security Agreement

EXHIBIT K

   –    Form of Collateral Agency Agreement

EXHIBIT L

   –    Form of Consent and Agreement

EXHIBIT M

   –    Form of Mortgage

 

    - v -   CREDIT AGREEMENT

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This CREDIT AGREEMENT (this “Agreement”), dated as of February 25, 2005, is made
among SABINE PASS LNG, L.P., a Delaware limited partnership (the “Borrower”),
each of the lenders that is a signatory to this Agreement identified as a
“Lender” on the signature pages to this Agreement or that, pursuant to Section
11.06(b) of this Agreement, shall become a “Lender” under this Agreement
(individually, a “Lender” and, collectively, the “Lenders”), Société Générale,
as administrative agent for the Lenders (in such capacity, together with all
successors and assigns in such capacity, the “Agent”), and HSBC Bank USA,
National Association, as collateral agent for the Lenders (in such capacity,
together with all successors and assigns in such capacity, the “Collateral
Agent”).

 

The Borrower intends to construct, install and operate the Project (as defined
below) in Cameron Parish, Louisiana.

 

The Borrower has appointed (a) HSBC Securities (USA), Inc. and Société Générale
to act as Lead Arrangers (each, a “Lead Arranger” and, collectively, the “Lead
Arrangers”) and (b) HSBC Securities (USA) Inc. as Syndication Agent, and the
Lenders have appointed (a) Société Générale as Agent and (b) HSBC Bank USA,
National Association, as Collateral Agent.

 

The Borrower has requested that the Lenders make loans to the Borrower for the
purpose of financing certain costs of developing, constructing and operating the
Project, in an aggregate principal amount not exceeding $822,000,000. The
Lenders are prepared to make such loans upon the terms and conditions hereof,
and, accordingly, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS AND INTERPRETIVE MATTERS

 

1.01 Certain Defined Terms. In addition to the terms defined in the preamble
above, and unless otherwise specified in this Agreement, capitalized terms used
in this Agreement shall have the meanings assigned to such terms below.
Capitalized terms and other terms used in this Agreement shall be interpreted in
accordance with Sections 1.02 and 1.03, as applicable.

 

“Acceptable Bank” shall mean any bank or trust company which is organized under
the laws of, or is a foreign bank that is licensed to do business in, the United
States or any state thereof which has capital, surplus and undivided profits of
at least $500,000,000 and has outstanding unguaranteed and unsecured long-term
indebtedness which is rated “A-” or better by S&P and “A3” or better by Moody’s
(or an equivalent rating by another nationally recognized statistical rating
organization of similar standing if neither such corporation is in the business
of rating unsecured bank indebtedness).

 

“Additional Project Document” shall mean any Material Project Document or Other
Project Document entered into by the Borrower, or by an agent on behalf of the
Borrower, subsequent to the Closing Date.

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“Administrative Fee” shall have the meaning assigned to such term in Section
2.04(b).

 

“Advance Date” shall have the meaning assigned to such term in Section 4.06.

 

“Affected Property” shall mean the Property of the Borrower lost, destroyed,
damaged or otherwise taken as a result of any Event of Loss.

 

“Affiliate” shall mean, with respect to any Person, another Person that directly
or indirectly Controls, or is under common Control with, or is Controlled by,
such Person and, if such Person is an individual, any member of the immediate
family (including parents, spouse, children and siblings) of such individual and
any trust whose principal beneficiary is such individual or one or more members
of such immediate family and any Person who is Controlled by any such member or
trust. Notwithstanding the foregoing, the definition of “Affiliate” shall not
encompass (a) any individual solely by reason of his or her being a director,
officer or employee of any Person and (b) the Agent, the Collateral Agent or any
Lender.

 

“Agency Fee Letter” shall mean that certain letter agreement dated as of the
Closing Date, entered into between the Borrower and the Agent with respect to,
among other matters, certain fees payable by the Borrower.

 

“Agent” shall have the meaning assigned to such term in the preamble.

 

“Agreement” shall have the meaning assigned to such term in the preamble.

 

“Anchor Tenant” shall mean Total LNG USA, Inc., Chevron U.S.A. Inc. and any
replacement for Total LNG USA, Inc. or Chevron U.S.A. Inc. as permitted pursuant
to the terms hereof.

 

“Ancillary Documents” shall mean, with respect to each Additional Project
Document: (a) each security agreement or instrument, if any, necessary to grant
to the Collateral Agent a perfected Lien in such Additional Project Document
with the priority contemplated by the Security Documents, (b) an opinion of
counsel to each Person party to such Additional Project Document with respect to
the due authorization, execution and delivery of such document and its validity
and enforceability against such Person and such other matters as the Agent may
reasonably request, (c) a Consent and Agreement from each Person party to such
Additional Project Document and any other Person guaranteeing or otherwise
supporting such Project Party’s obligations, (d) evidence of the authorization
of the Borrower to execute, deliver and perform such Additional Project Document
and (e) evidence that all Government Approvals then necessary for the execution,
delivery and performance of such Additional Project Document have been duly
obtained, were validly issued and are in full force and effect, all in form and
substance reasonably satisfactory to the Majority Lenders.

 

“Applicable Lending Office” shall mean, for each Lender, the “Lending Office” of
such Lender (or of an Affiliate of such Lender) designated for such Loan on
Appendix A or such other office of such Lender (or of an Affiliate of such
Lender) as such Lender may from time to time specify to the Agent and the
Borrower as the office for its Loans; provided, that any Lender may from time to
time change its “Applicable Lending Office” for each Loan by delivering notice
of such change to the Agent and the Borrower.

 

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“Applicable Margin” shall mean:

 

(a) from the Funding Date until the Availability End Date, 1.50% per annum;

 

(b) for the period from the Availability End Date to the third anniversary
thereof, 1.25% per annum; and

 

(c) thereafter until the Final Maturity Date, 1.625% per annum.

 

“Approved Transferee” shall mean any Person who is not (and is not an Affiliate
of a Person who is) (a) currently engaged in material litigation with the
Borrower or any Pledgor, (b) in default under any material indebtedness owing to
any Pledgor or the Borrower or (c) identified by the Office of Foreign Assets
Control of the U.S. Department of the Treasury as subject to sanctions imposed
by the U.S. Government on the basis that such Person, its Affiliates or the
government of its or any of its Affiliates’ home jurisdiction has engaged in or
supports terrorism or other international criminal activity, provided, that no
Approved Transferee individually or in aggregate with all other Approved
Transferees shall own more than 50% of the Borrower.

 

“Authorized Officer” shall mean: (a) with respect to any Person that is a
corporation, the chairman, president, vice president or treasurer of such
Person, (b) with respect to any Person that is a partnership, the chairman,
president, vice president or treasurer of a general partner of such Person and
(c) with respect to any Person that is a limited liability company, the manager,
the managing member or the chairman, president, vice-president or treasurer of
such Person.

 

“Availability End Date” shall mean the earlier to occur of (a) date which is one
calendar month following the Term Conversion Date and (b) April 1, 2009.

 

“Bankruptcy” shall mean, with respect to any Person, the occurrence of any of
the following events, conditions or circumstances: (a) such Person shall file a
voluntary petition in bankruptcy or shall be adjudicated a bankrupt or
insolvent, or shall file any petition or answer or consent seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief for itself under the Bankruptcy Code or any present or future
applicable federal, state or other statute or law relating to bankruptcy,
insolvency, reorganization or other relief for debtors, or shall seek or consent
to or acquiesce in the appointment of any trustee, receiver, conservator or
liquidator of such Person or of all or any substantial part of its properties
(the term “acquiesce,” as used in this definition, includes the failure to file
in a timely manner a petition or motion to vacate or discharge any order,
judgment or decree after entry of such order, judgment or decree), (b) an
involuntary case or other proceeding shall be commenced against such Person
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief with respect to such Person or its debts under the
Bankruptcy Code or any present or future applicable federal, state or other
statute or law relating to bankruptcy, insolvency, reorganization or other
relief for debtors, or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of

 

     - 3 -    CREDIT AGREEMENT

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its property, and such involuntary case or other proceeding shall remain
undismissed or unstayed for a period of 90 consecutive days, (c) a court of
competent jurisdiction shall enter an order, judgment or decree approving a
petition filed against such Person seeking a reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
Bankruptcy Code, or any other present or future applicable federal, state or
other statute or law relating to bankruptcy, insolvency, reorganization or other
relief for debtors, and such Person shall acquiesce in the entry of such order,
judgment or decree or such order, judgment or decree shall remain undischarged,
unvacated or unstayed for 90 days (whether or not consecutive) from the date of
entry thereof, or any trustee, receiver, conservator or liquidator of such
Person or of all or any substantial part of its property shall be appointed
without the consent or acquiescence of such Person and such appointment shall
remain unvacated and unstayed for an aggregate of 90 days (whether or not
consecutive), (d) such Person shall admit in writing its inability to pay its
debts as they mature or shall generally not be paying its debts as they become
due, (e) such Person shall make an assignment for the benefit of creditors or
take any other similar action for the protection or benefit of creditors, (f)
such Person shall take any corporate or partnership action for the purpose of
effecting any of the foregoing or (g) an order for relief shall be entered in
respect of such Person under the Bankruptcy Code.

 

“Bankruptcy Code” shall mean the United States Bankruptcy Reform Act of 1978, as
heretofore and hereafter amended, and codified as 11 U.S.C. Section 11 et seq.

 

“Base Case Forecast” shall mean the financial projections dated the Closing Date
relating to the Development from the Closing Date through and including the
tenth anniversary of the Closing Date prepared by the Borrower in form and
substance reasonably acceptable to the Lenders, together with a certificate of
the Borrower executed by an Authorized Officer of the Borrower to the effect
that (a) such projections were made in good faith and (b) the assumptions on the
basis of which such projections were made were (when made) reasonable and
consistent with the Construction Budget and Schedule and the Transaction
Documents (other than the Non-Material Project Documents).

 

“Board” shall mean the Board of Governors of the Federal Reserve System.

 

“Borrower” shall have the meaning assigned to such term in the preamble.

 

“Borrower’s Knowledge” shall mean the earlier of actual knowledge or receipt of
notice by an Authorized Officer of the Borrower or an Authorized Officer of an
Affiliate of the Borrower with respect to a matter relating to a part of the
Borrower’s business for which such Authorized Officer is responsible for the
management or day-to-day operations.

 

“Borrowing Certificate” shall mean a borrowing certificate and related
attachments and certifications, substantially in the form of Exhibit B-1 to this
Agreement, executed by an Authorized Officer of the Borrower requesting a Loan
and otherwise duly completed.

 

“Business Day” shall mean any day on which commercial banks are not authorized
or required to be closed in New York, New York, and, if such day relates to a
borrowing of, a payment or prepayment of principal of or interest on, or an
Interest Period for, a

 

     - 4 -    CREDIT AGREEMENT

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Loan or a notice by the Borrower with respect to any such borrowing, payment,
prepayment or Interest Period, which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.

 

“Capacity Reservation Fees” shall have the meaning assigned to such term in the
Omnibus Agreements.

 

“Capital Expenditures” shall mean, for any period, capital expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) computed in accordance with GAAP (other than Project Costs or
expenditures paid out of casualty insurance proceeds).

 

“Capital Lease Obligations” shall mean, for any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property of such Person to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP (including Statement of Financial
Accounting Standards No. 13 of the Financial Accounting Standards Board) and,
for purposes of this Agreement, the amount of such obligations shall be the
capitalized amount of such obligations, determined in accordance with GAAP
(including such Statement No. 13).

 

“Cash Flow Available for Debt Service” shall mean, for any applicable period,
the amount of all Project Revenues received during such period but excluding (a)
net amounts received under Permitted Swap Agreements, Net Available Amounts,
proceeds of Permitted Indebtedness, contributions to capital and other
extraordinary revenue items and (b) dispositions outside the ordinary course of
business minus the amount of all Operation and Maintenance Expenses (exclusive,
in each case, of all non-cash items).

 

“Change in Law” shall mean, with respect to any Lender (or its Applicable
Lending Office), the occurrence after the date of the execution and delivery of
this Agreement of the following events: (a) the adoption of any applicable
Government Rule, (b) any change in any applicable Government Rule (including
Regulation D) or in the interpretation or administration of any Government Rule
(including Regulation D) by any Government Authority charged with its
interpretation or administration or (c) the adoption or making of any
interpretation, directive, guideline, policy or request applying to a class of
Lenders including such Lender of or under any Government Rule or in the
interpretation or administration of any Government Rule (including Regulation D)
(whether or not having the force of law and whether or not failure to comply
would be unlawful, but with respect to which similarly situated banks generally
comply) by any Government Authority charged with its interpretation or
administration.

 

“Change Order” shall have the meaning assigned to such term in the EPC Contract.

 

“Chevron Consent” shall mean the Consent and Agreement among Chevron U.S.A.
Inc., the Borrower and the Collateral Agent with respect to the Chevron TUA.

 

“Chevron TUA” shall mean the Terminal Use Agreement dated as of November 8, 2004
between Chevron U.S.A. Inc. and the Borrower.

 

     - 5 -    CREDIT AGREEMENT

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“Closing Date” shall mean the date on which this Agreement is executed and
delivered by the Borrower, the Agent, the Collateral Agent and the Lenders party
hereto and the Agent shall have notified the Borrower that all of the conditions
set forth in Section 6.01 shall have been satisfied (or waived by the Lenders).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

 

“Collateral” shall mean: (a) the “Collateral” as defined in the Security
Agreement and the Pledge Agreements and (b) all other collateral of whatsoever
nature purported to be subject to the Lien of any Security Document.

 

“Collateral Accounts” shall mean the Construction Account (including the
Construction Payment Subaccount and the Punchlist Retention Subaccount), the
Debt Service Reserve Account, the Debt Service Accrual Account, the Insurance
Proceeds Account, the Operating Account, the Income Tax Reserve Account, the
Distribution Account and the Revenue Account, as each such term is defined in
the Collateral Agency Agreement.

 

“Collateral Agency Agreement” shall mean the Collateral Agency Agreement dated
as of February 25, 2005, among the Collateral Agent, the Securities
Intermediary, the Agent and the Borrower substantially in the form of Exhibit K
to this Agreement.

 

“Collateral Agency Fee” shall have the meaning assigned to such term in Section
2.04(b).

 

“Collateral Agent” shall have the meaning assigned to such term in the preamble.

 

“Collateral Agent Fee Letter” shall mean that certain letter agreement dated as
of the Closing Date entered into between the Borrower and the Collateral Agent
with respect to, among other matters, certain fees payable to the Collateral
Agent.

 

“Commercial Start Date” shall have the meaning assigned to such term in the
Total TUA.

 

“Commitment” shall mean, at any time for any Lender, the amount set forth next
to such Lender’s name on Appendix A to this Agreement under the heading “Loan
Commitment” (as the same may be adjusted from time to time pursuant to Section
2.03 or as a consequence of an assignment in accordance with Section 11.06(b)).
On the Funding Date, the initial aggregate amount of the Commitments of the
Lenders shall not exceed $822,000,000.

 

“Commitment Fee” shall have the meaning assigned to such term in Section
2.04(a).

 

“Consent and Agreement” shall mean (a) each TUA Consent, (b) the EPC Consent,
(c) each other Consent and Agreement among a Material Project Party (other than
each counterparty to a Lease Agreement or the Noble Option Agreement), the
Borrower and the Collateral Agent substantially in the form attached to this
Agreement as Exhibit L (as applicable) (or such other form as is reasonably
acceptable to the Agent and the Borrower) and (d) the Estoppel Certificates.

 

     - 6 -    CREDIT AGREEMENT

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“Construction Account” shall have the meaning given such term in the Collateral
Agency Agreement.

 

“Construction Budget and Schedule” shall mean (a) a budget as set forth in
Appendix F setting forth, on a monthly basis, the timing and amount of all
projected payments of Project Costs from the Closing Date through the projected
date of Final Completion and (b) a schedule setting forth the proposed
engineering, procurement, construction and testing milestone schedule for the
Project’s Development through the projected date of Final Completion, which
budget and schedule (i)(A) shall be certified by the Borrower as the best
reasonable estimate of the information set forth therein as of the Closing Date,
(B) shall be consistent with the requirements of the Transaction Documents
(other than the Non-Material Project Documents) and (C) shall be in form and
substance acceptable to the Lenders and (ii) may be modified from time to time
in conformance with the EPC Contract and the other Transaction Documents (other
than the Non-Material Project Documents) that are permitted hereunder.

 

“Construction Report” shall mean a “Construction Report”, substantially in the
form of Exhibit G to this Agreement, certified by an Authorized Officer of the
Borrower and delivered from time to time as contemplated by Section 8.19.

 

“Contest” shall mean, with respect to any Person, with respect to any Taxes or
any Lien imposed on Property of such Person (or the related underlying claim for
labor, material, supplies or services) by any Government Authority for Taxes or
with respect to obligations under ERISA or any Mechanics’ Lien (each, a “Subject
Claim”), a contest of the amount, validity or application, in whole or in part,
of such Subject Claim pursued in good faith and by appropriate legal,
administrative or other proceedings diligently conducted so long as: (a)
adequate reserves have been established with respect to such Subject Claim in
accordance with GAAP, (b) during the period of such contest the enforcement of
such Subject Claim is effectively stayed and any Lien (including any inchoate
Lien) arising by virtue of such Subject Claim shall, if required by applicable
Government Rule, be effectively secured by posting of cash collateral or a
surety bond (or similar instrument) by a reputable surety company, (c) neither
the Agent nor any Lender could reasonably be expected to be exposed to any risk
of criminal liability or civil liability as a result of such contest and (d) the
failure to pay such Subject Claim under the circumstances described above could
not otherwise reasonably be expected to have a Material Adverse Effect. The term
“Contest” used as a verb shall have a correlative meaning.

 

“Contingency” shall mean the Dollar amount identified as “Contingency” in the
Construction Budget and Schedule to be used to fund payment of Project Costs
reasonably and necessarily incurred by the Borrower that are not line items, or
are in excess of the line item amounts (except as contingency line items), in
the Construction Budget and Schedule.

 

“Control” (including, with its correlative meanings, “Controlled by” and “under
common Control with”) shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by contract
or otherwise) and, in any event, any Person owning at least fifty percent (50%)
of the voting securities of another Person shall be deemed to Control that
Person.

 

     - 7 -    CREDIT AGREEMENT

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“Debt Service” shall mean, for any period, the sum, computed without
duplication, of the following: (a) all amounts payable by the Borrower in
respect of scheduled payments of principal of Permitted Indebtedness for such
period (other than prepayments of Loans payable during such period pursuant to
Section 3.04 and, for the avoidance of doubt, any payments of Subordinated
Indebtedness) plus (b) all amounts payable by the Borrower in respect of
Interest Expense for such period plus (c) all commitment fees payable in
accordance with Section 2.04(a), all fees payable in accordance with the Fee
Letters during such period and all other commitment fees, agency fees, trustee
fees or other fees, costs or expenses payable in connection with the
Indebtedness referred to in clause (a) above during such period plus (d) all
amounts, if any, due and payable to the applicable Lenders in respect of
settlement or termination payments under Permitted Swap Agreements.

 

“Debt Service Accrual Account” shall have the meaning assigned to such term in
the Collateral Agency Agreement.

 

“Debt Service Coverage Ratio” shall mean, as at each Quarterly Date, the ratio
of Cash Flow Available for Debt Service to the aggregate amount of Debt Service
with respect to the Permitted Indebtedness referred to in Section 8.16(a) and
(b) payable for the preceding 12-month period; provided, that (a) for each
calendar quarter prior to the first anniversary of the Term Conversion Date, the
Debt Service Coverage Ratio shall be calculated using the quarterly financial
statements available as of such calculation date and (b) the Debt Service
Coverage Ratio shall not be calculated for the first calendar quarter following
the Term Conversion Date.

 

“Debt Service Reserve Account” shall have the meaning assigned to such term in
the Collateral Agency Agreement.

 

“Debt to Equity Ratio” shall mean the ratio of (a) the sum of (i) aggregate
outstanding Permitted Indebtedness (other than Subordinated Indebtedness) plus
(ii) the aggregate amount of the final Loan requested pursuant to the final
Notice of Borrowing to (b) the sum of (i) Total Partners’ Equity of the Borrower
plus (ii) Subordinated Indebtedness owed to the partners in the Borrower, if any
plus (iii) the Capacity Reservation Fees paid pursuant to the Omnibus Agreements
between the Closing Date and the Funding Date.

 

“Default” shall mean an Event of Default or an event or condition which, with
the giving of notice, lapse of time or upon a declaration or determination being
made (or any combination thereof), would become an Event of Default.

 

“Development” shall mean the development, acquisition, ownership, occupation,
construction, equipping, testing, repair, operation, maintenance and use of the
Project and the sale of Services or other products or by-products of the
Project. “Develop” and “Developed” shall have the correlative meanings.

 

“Distribution Account” shall have the meaning assigned to such term in the
Collateral Agency Agreement.

 

     - 8 -    CREDIT AGREEMENT

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“Dollars” and “$” shall mean lawful money of the United States.

 

“Easement Properties” shall mean the licenses, tenements, hereditaments,
easements and rights of way, as further described in the Mortgage.

 

“Emergency Capex” shall mean any Capital Expenditures that (a) are required as a
result of an emergency that poses a material threat to the health, safety or the
environment and (b) do not exceed in aggregate $3,500,000 for any given year.

 

“Environmental Claim” shall mean any claim or demand (collectively, a “claim”)
by any Person alleging or asserting liability for investigatory costs, cleanup
or other remedial costs, legal costs, environmental consulting costs,
governmental response costs, damages to natural resources or other property,
personal injuries, fines or penalties related to (a) the presence, or Release
into the environment, of any Hazardous Material at any location, whether or not
owned by the person against whom such claim is made, or (b) any violation of any
Environmental Law. The term “Environmental Claim” shall include, without
limitation, any claim by any person or Government Authority for enforcement,
cleanup, removal, response, remedial action or damages pursuant to any
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
under any Environmental Law.

 

“Environmental Law” shall mean all federal, state, and local statutes, laws,
regulations, rules, judgments, orders or decrees, in each case as modified and
supplemented and in effect from time to time relating to the regulation or
protection of the environment, health and safety, natural resources or to
emissions, discharges, Releases or threatened Releases of Hazardous Materials
into the environment, including, without limitation, ambient air, soil, surface
water, groundwater, wetlands, coastal waters, land or subsurface strata, or
otherwise relating to the generation, manufacture, processing, distribution,
Use, treatment, storage, disposal, transport or handling of Hazardous Materials.

 

“EPC Consent” shall mean the Acknowledgement and Consent Agreement between the
EPC Contractor, the Borrower and the Collateral Agent dated as of February 25,
2005.

 

“EPC Contract” shall mean the lump sum turnkey agreement for the engineering,
procurement and construction of the Project by and between the Borrower and the
EPC Contractor dated as of December 18, 2004.

 

“EPC Contractor” shall mean Bechtel Corporation.

 

“Equity Contribution Amount” shall mean $216,000,000.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

 

“ERISA Affiliate” shall mean any corporation or trade or business which is a
member of any group of organizations: (a) described in Section 414(b) or (c) of
the Code of which the Borrower is a member and (b) solely for purposes of
potential liability under

 

     - 9 -    CREDIT AGREEMENT

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Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien
created under Section 302(f) of ERISA and Section 412(n) of the Code, described
in Section 414(m) or (o) of the Code of which the Borrower is a member.

 

“ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived), (b) the existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, (c) the
filing pursuant to Section 412(d) of the Code or Section 303 of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan,
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan, (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.

 

“Escrow Account” shall mean an escrow account established pursuant to Section
18.4 of the EPC Contract.

 

“Estimated Amounts” shall have the meaning given to such term in Section
6.02(d)(ii).

 

“Estoppel Certificate” shall mean each certificate of a counterparty to a Lease
Agreement (other than the counterparty to the Lease Agreement referred to in
paragraph 3 of Appendix E) delivered pursuant to Section 13.4 of such Lease
Agreement.

 

“Event of Abandonment” shall mean: (a) a formal, public announcement by the
Borrower of a decision to abandon or indefinitely defer the construction,
completion or operation of the Project for any reason, (b) the suspension for
more than 120 days or abandonment of the Development of the Project or (c) the
Borrower shall make any filing with FERC giving notice of the intent or
requesting authority to abandon the construction, completion or operation of the
Project for any reason; provided, however, that any suspension or delays in
construction, completion or operation of the Project caused by a force majeure
event as defined in the EPC Contract occurring prior to Substantial Completion
or as defined in the O&M Agreement or the Management Services Agreement on or
after Substantial Completion, as applicable, shall not constitute an “Event of
Abandonment” so long as the Borrower is diligently attempting to restart the
construction, operation or completion of the Project, as the case may be.

 

“Event of Default” shall have the meaning assigned to such term in Section 9.01.

 

“Event of Loss” shall mean any loss of, destruction of or physical damage to any
Property of the Borrower and shall include an Event of Taking.

 

     - 10 -    CREDIT AGREEMENT

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“Event of Taking” shall mean any taking, seizure, confiscation, requisition,
exercise of rights of eminent domain, public improvement, inverse condemnation,
condemnation or similar action of or proceeding by any Government Authority
relating to all or any part of the Project.

 

“Excluded Taxes” shall mean, with respect to the Agent, the Collateral Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States, or by the jurisdiction
under the laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its Applicable Lending
Office is located, (b) any branch profits taxes imposed by the United States or
any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 5.05(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign
Lender’s failure or inability to comply (other than as a result of a Change in
Law after the date hereof) with Section 5.04(e) or Section 5.05(b), except to
the extent that such Foreign Lender’s assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with respect
to such withholding tax pursuant to Section 5.04(a).

 

“Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided, that (a) if the day for which such rate is to be determined is
not a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average of the quotations for
such day on such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it.

 

“Fee Letters” shall mean, collectively, the Agency Fee Letter and each other fee
letter between the Borrower, each of the Lead Arrangers and the Collateral
Agent.

 

“FERC” shall mean the United States Federal Energy Regulatory Commission or any
successor thereto having jurisdiction over the transportation of natural gas
through the Project.

 

“Final Borrowing Certificate” shall mean the Final Borrowing Certificate and
related attachments and certifications substantially in the form of Exhibit B-2
to this Agreement, executed by an Authorized Officer of the Borrower requesting
a final Loan pursuant to Section 6.04 and otherwise duly completed.

 

“Final Completion” shall have the meaning assigned to such term in the EPC
Contract.

 

     - 11 -    CREDIT AGREEMENT

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“Final Funding Date” shall mean the date on which all of the conditions set
forth in Section 6.04 shall have been satisfied (or waived by the Lenders).

 

“Final Maturity Date” shall mean the date which is the tenth anniversary of the
Closing Date; provided, that if such date is not a Business Day, the Final
Maturity Date shall be the next preceding Business Day.

 

“Financing Documents” shall mean (a) this Agreement, (b) the Fee Letters, (c)
each of the Security Documents, (d) the Permitted Swap Agreements and (e) each
Consent and Agreement.

 

“Foreign Lender” shall mean any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

 

“Funding Date” shall mean the date on which all of the conditions set forth in
Section 6.02 shall have been satisfied (or waived by the Lenders).

 

“Gas” shall mean any hydrocarbon or mixture of hydrocarbons consisting
predominantly of methane which is in a gaseous state.

 

“GAAP” shall mean generally accepted accounting principles in the United States
applied on a basis consistent with those principles set forth in Section
1.02(a).

 

“Government Approval” shall mean (a) any authorization, consent, approval,
license, lease, ruling, permit, tariff, rate, certification, waiver, exemption,
filing, variance, claim, order, judgment or decree of, by or with, (b) any
required notice to, (c) any declaration of or with or (d) any registration by or
with, any Government Authority, in each case relating to the Development except
to the extent routine or ministerial in nature or not otherwise material to the
Development or the Borrower’s compliance with any Government Rule or obtaining
or maintaining any Government Approval.

 

“Government Authority” shall mean any federal, state or local government or
political subdivision thereof or other entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and having jurisdiction over the person or matters in question.

 

“Government Rule” shall mean any statute, law, regulation, ordinance, rule,
judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, requirement of, or other governmental restriction or any
similar binding form of decision of or determination by, or any binding
interpretation or administration of any of the foregoing by, any Government
Authority, including all common law, whether now or hereafter in effect.

 

“Guarantee” shall mean a guarantee, an endorsement, a contingent agreement to
purchase or to furnish funds for the payment or maintenance of, or otherwise to
be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other

 

     - 12 -    CREDIT AGREEMENT

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distributions upon the stock or equity interests of any Person, or an agreement
to purchase, sell or lease (as lessee or lessor) Property of any Person,
products, materials, supplies or services primarily for the purpose of enabling
a debtor to make payment of his, her or its obligations or an agreement to
assure a creditor against loss, and including causing a bank or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding (a) endorsements for collection or
deposit in the ordinary course of business and (b) indemnity or hold harmless
provisions included in contracts with non-Affiliates entered into in the
ordinary course of business. The terms “Guarantee” and “Guaranteed” used as
verbs shall have correlative meanings.

 

“Guaranteed Substantial Completion Date” shall have the meaning assigned to such
term in the EPC Contract, without giving effect to any Change Order that affects
such date except any such Change Order which has been approved by the Agent and
the Majority Lenders.

 

“Hazardous Material” shall mean: (a) any petroleum or petroleum products,
flammable materials, explosives, radioactive materials, friable asbestos, urea
formaldehyde foam insulation and polychlorinated biphenyls (PCBs), (b) any
chemicals, other materials, substances or wastes 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”,
“contaminants”, “pollutants” or words of similar import under any Environmental
Law and (c) any other chemical, material, substance or waste which is now or
hereafter regulated under or with respect to which liability or standards of
conduct are imposed under any Environmental Law.

 

“Hedging Agreement” shall mean any agreement in respect of any interest rate,
swap, forward rate transaction, commodity swap, commodity option, interest rate
option (other than this Agreement), interest or commodity cap, interest or
commodity collar transaction, currency swap agreement, currency future or option
contract, or other similar agreements.

 

“Impairment” shall mean, with respect to any Transaction Document (other than a
Non-Material Project Document) or Government Approval, (a) the rescission, early
termination, cancellation, repeal or invalidity thereof, (b) the suspension or
injunction thereof or (c) the inability to satisfy in a timely manner stated
conditions to effectiveness or amendment, modification or supplementation (other
than, in the case of a Transaction Document (other than a Non-Material Project
Document), any such amendment, modification or supplementation effected in
accordance with Section 8.21 and, in the case of a Government Approval, any such
amendment, modification or supplementation effected in accordance with Section
8.03(b)) of such Transaction Document or Government Approval in whole or in
part. The verb “Impair” shall have a correlative meaning.

 

“Income Tax Reserve Account” shall have the meaning assigned to such term in the
Collateral Agency Agreement.

 

“Indebtedness” shall mean, for any Person, without duplication, (a) all
obligations of such Person for borrowed money or in respect of deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations

 

     - 13 -    CREDIT AGREEMENT

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of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of such Person
in respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations of
such Person in respect of any Hedging Agreement and (k) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” shall mean Taxes other than Excluded Taxes.

 

“Indemnitee” shall have the meaning assigned to such term in Section 11.03.

 

“Independent Engineer” shall mean Stone & Webster Management Consultants, Inc.
or such other Person, so long as no Default has occurred and is continuing,
reasonably acceptable to the Borrower, as the Agent may engage on behalf of the
Lenders to act as Independent Engineer for the purposes of this Agreement.

 

“Insurance Advisor” shall mean Aon Risk Services Inc. or such other Person, so
long as no Default has occurred and is continuing, reasonably acceptable to the
Borrower, as the Agent may engage on behalf of the Lenders to act as Insurance
Advisor for the purposes of this Agreement.

 

“Insurance Proceeds Account” shall have the meaning assigned to such term in the
Collateral Agency Agreement.

 

“Interest Expense” shall mean, for any period, the sum, computed without
duplication, of the following: (a) all interest in respect of Permitted
Indebtedness accrued or capitalized during such period (whether or not actually
paid during such period) (other than, for the avoidance of doubt, any payments
of Subordinated Indebtedness) plus (b) the net amounts payable (or minus the net
amounts receivable) under Permitted Swap Agreements accrued during such period
(whether or not actually paid or received during such period).

 

“Interest Period” shall mean, (a) prior to the Final Funding Date, with respect
to any Loan, each period commencing on the date such Loan is made or the last
day of the next preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first calendar month thereafter and (b)
following the Final Funding Date, with respect to any Loan, each period
commencing on the last day of the next preceding Interest Period for such Loan
and ending on the numerically corresponding day in the sixth calendar month
thereafter, or if any such day is not a Business Day, the next preceding
Business Day.

 

     - 14 -    CREDIT AGREEMENT

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Notwithstanding the foregoing paragraph: (a) no Interest Period may commence
before and end after the Final Maturity Date, any Principal Payment Date or any
Semi-Annual Date, (b) each Interest Period which would otherwise end on a day
which is not a Business Day shall end on the next succeeding Business Day (or,
if such next succeeding Business Day falls in the next succeeding calendar
month, on the next preceding Business Day) and (c) notwithstanding clause (a)
above, no Interest Period shall have a duration of less than one month and, if
the Interest Period would otherwise be a shorter period, such Loan shall not be
available under this Agreement.

 

“Interest Rate Protection Agreement” shall mean, for any Person, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more financial institutions providing for the transfer or mitigation
of interest rate risks either generally or under specific contingencies.

 

“International LNG Terminal Standards” shall mean to the extent not inconsistent
with the express requirements of this Agreement, the international standards and
practices applicable to the design, construction, equipment, operation or
maintenance of LNG receiving and regasification terminals, established by the
following (such standards to apply in the following order of priority): (i) a
Government Authority having jurisdiction over the Borrower, (ii) the Society of
International Gas Tanker and Terminal Operators (“SIGTTO”) and (iii) any other
internationally recognized non-governmental agency or organization with whose
standards and practices it is customary for reasonable and prudent operators of
LNG receiving and regasification terminals to comply. In the event of a conflict
between any of the priorities noted above, the priority with the lowest roman
numeral noted above shall prevail.

 

“Investment” shall mean, for any Person: (a) the acquisition (whether for cash,
Property of such Person, services or securities or otherwise) of capital stock,
bonds, notes, debentures, partnership or other ownership interests or other
securities of any other Person or any agreement to make any such acquisition
(including any “short sale” or any other sale of any securities at a time when
such securities are not owned by the Person entering into such sale), (b) the
making of any deposit with, or advance, loan or other extension of credit to,
any other Person (including the purchase of Property from another Person subject
to an understanding or agreement, contingent or otherwise, to resell such
Property to such Person, but excluding any such advance, loan or extension of
credit having a term not exceeding 90 days representing the purchase price of
inventory or supplies sold in the ordinary course of business) and (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person.

 

“J&S Cheniere Terminal Use Agreement” shall mean the terminal use or similar
agreement to be entered into pursuant to the Option Agreement dated December 23,
2003 between Cheniere LNG Inc. and J&S Cheniere S.A.

 

“Lead Arrangers” shall have the meaning assigned to such term in the preamble.

 

“Lease Agreement” shall mean the agreements between the Borrower and any
landowner listed on Appendix E granting a lease or an option to lease real
property situated in Cameron Parish, Louisiana in connection with the Project.

 

     - 15 -    CREDIT AGREEMENT

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“Lender” and “Lenders” shall have the meanings assigned to such terms in the
preamble.

 

“LIBO Rate” shall mean, with respect to any Loan for any Interest Period, the
rate appearing on Page 3750 of the Dow Jones Markets (Telerate) Service (or on
any successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to Dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, on the day that is two Business Days prior to the commencement of
such Interest Period, as the rate for the offering of Dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the LIBO Rate for such Interest
Period shall be the rate at which Dollar deposits of $5,000,000 and for a
maturity comparable to such Interest Period are offered by the principal London
office of the Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.

 

“Lien” shall mean, with respect to any Property of any Person, any mortgage,
lien, pledge, charge, lease, easement, servitude, security interest or
encumbrance of any kind in respect of such Property of such Person. For purposes
of this Agreement and the other Financing Documents, a Person shall be deemed to
own subject to a Lien any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an operating lease)
relating to such Property.

 

“LNG” shall mean Gas in a liquid state at or below its boiling point at a
pressure of approximately one atmosphere.

 

“LNG Vessel” shall mean an ocean-going vessel suitable for transporting LNG.

 

“Loan” or “Loans” shall mean the loans provided for by Section 2.01.

 

“Loss Proceeds” shall mean insurance proceeds, condemnation awards or other
compensation, awards, damages and other payments or relief (exclusive, in each
case, of the proceeds of liability insurance and business interruption insurance
and other payments for interruption of operations) with respect to any Event of
Loss.

 

“Majority Lenders” shall mean, subject to the last paragraph of Section 11.04,
Lenders holding over 50% of the aggregate outstanding Commitments or, if the
Commitments have terminated, Lenders holding over 50% of the aggregate unpaid
principal amount of the Loans.

 

“Management Services Agreement” shall mean the agreement dated February 25, 2005
between the Borrower and the Manager for the management and administration of
the Borrower.

 

“Manager” shall mean Sabine Pass LNG – GP, Inc., a Delaware corporation.

 

     - 16 -    CREDIT AGREEMENT

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“Margin Stock” shall mean margin stock within the meaning of Regulation U and
Regulation X.

 

“Material Adverse Effect” shall mean any act, event or condition which has a
material adverse effect on one or more of the following: (a) the business or
financial condition of the Borrower or the ability of the Borrower to perform
its payment obligations under any Financing Document, (b) the ability of any
Project Party to comply with its material obligations under any Material Project
Document to which it is a party or (c) the enforceability of any Financing
Document or Material Project Document or the rights or remedies of the Lenders
thereunder.

 

“Material Project Documents” shall mean (a) each TUA signed with an Anchor
Tenant (together with each guarantee thereof), (b) the EPC Contract, (c) the O&M
Agreement, (d) each Omnibus Agreement, (e) the Lease Agreements, (f) the
Partnership Agreement, (g) the Management Services Agreement, (h) the Noble
Option Agreement and (i) any replacement of (or guarantee or credit support
related to) any of the foregoing.

 

“Material Project Parties” shall mean each Pledgor, the Operator, each other
party to a Material Project Document (other than the Borrower) and each Person
party to a credit support instrument provided in connection with any Material
Project Document.

 

“Mechanics’ Liens” shall mean carriers’, warehousemen’s, mechanics’, workmen’s,
materialmen’s, construction or other like statutory Liens.

 

“Moody’s” shall mean Moody’s Investors Service, Inc.

 

“Mortgage” shall mean the mortgage granted by the Borrower for the benefit of
the Collateral Agent, substantially in the form of Exhibit M.

 

“Multiemployer Plan” shall mean a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.

 

“Negotiation Period” shall have the meaning assigned to such term in Section
5.01(b)(i).

 

“Net Available Amount” shall mean the aggregate amount of Loss Proceeds received
by the Borrower in respect of such Event of Loss net of reasonable expenses
incurred by the Borrower in connection with the collection of such Loss
Proceeds.

 

“Net Worth” shall mean, as to any Person, as of any date of determination, the
sum of (a) the consolidated common and preferred stockholders’ equity of such
Person and its consolidated Subsidiaries, plus (b) the cumulative amount by
which the stockholders’ equity of such Person shall have been reduced by reason
of non-cash write downs of long-term assets from December 31, 2004, plus (c)
those items included as “preferred interests of consolidated subsidiaries” (or
analogous line item) as listed on the consolidated balance sheet of such Person
as of the date of the annual financial statement issued prior to the date of
determination used for this definition and regardless of any change after
December 31, 2004 in accounting treatment

 

     - 17 -    CREDIT AGREEMENT

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thereof, plus (d) those items included as “minority interests of consolidated
subsidiaries” (or analogous line item) as listed on the consolidated balance
sheet of such Person as of the date of the annual financial statement issued
prior to the date of determination used for this definition and regardless of
any change after December 31, 2004 in accounting treatment thereof, and minus
(e) accumulated other comprehensive income (loss) (or analogous line item).

 

“NGA” shall mean the United States Natural Gas Act of 1938, as heretofore and
hereafter amended, and codified 15 U.S.C. §717 et seq.

 

“Noble Option Agreement” shall have the meaning assigned to such term in Section
8.37.

 

“Non-Material Project Documents” shall mean each contract or agreement other
than Material Project Documents and Other Project Documents to which the
Borrower is a party, including, without limitation, contracts or agreements for
legal, accounting, engineering, environmental consulting or other professional
services in connection with the Development (other than to the extent such are
Material Project Documents, Other Project Documents or contracts or agreements
in substitution of any Material Project Document or Other Project Documents) in
accordance with the Construction Budget and Schedule or the then current
Operating Budget, as the case may be.

 

“Nonrecourse Persons” shall have the meaning assigned to that term in Section
11.09.

 

“Notice of Borrowing” shall mean the notice of borrowing referred to in Section
4.05.

 

“O&M Agreement” shall mean the agreement dated February 25, 2005 between the
Borrower and the Operator for the operation and maintenance of the Project.

 

“Omnibus Agreement” shall mean (a) the Omnibus Agreement dated as of September
2, 2004 between Total LNG USA, Inc. and the Borrower and (b) the Omnibus
Agreement dated as of November 8, 2004 between the Borrower and Chevron U.S.A.
Inc.

 

“Operating Account” shall have the meaning assigned to such term in the
Collateral Agency Agreement.

 

“Operating Budget” shall mean a budget, prepared and certified by the Borrower,
in accordance with Section 8.22, of Operation and Maintenance Expenses expected
to be incurred by the Borrower during the relevant fiscal year to which such
budget applies.

 

“Operation and Maintenance Expenses” shall mean, for any period, the sum,
computed without duplication, of the following: (a) general and administrative
expenses including expense reimbursement payable to the Manager pursuant to
Section 6.7 of the Partnership Agreement and for ordinary course fees and costs
of the Manager pursuant to the Management Services Agreement plus (b) expenses
for operating the Project and maintaining it in good repair and operating
condition payable during such period, including the ordinary course fees and
costs of the Operator payable pursuant to the O&M Agreement plus (c) insurance
costs

 

     - 18 -    CREDIT AGREEMENT

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payable during such period plus (d) applicable sales and excise taxes (if any)
payable or reimbursable by the Borrower during such period plus (e) franchise
taxes payable by the Borrower during such period plus (f) property taxes payable
by the Borrower during such period plus (g) any other direct taxes (if any)
payable by the Borrower during such period plus (h) costs and fees attendant to
the obtaining and maintaining in effect the Government Approvals payable during
such period plus (i) legal, accounting and other professional fees attendant to
any of the foregoing items payable during such period plus (j) any fees and
expenses of the Secured Parties during such period not included in Debt Service
plus (k) all other cash expenses payable by the Borrower in the ordinary course
of business. Operation and Maintenance Expenses shall exclude, to the extent
included above: (i) payments into any of the Collateral Accounts during such
period, (ii) payments of any kind with respect to Restricted Payments during
such period, (iii) depreciation for such period, (iv) any Capital Expenditure
including Permitted Capital Expenditures and (v) any payments of any kind with
respect to any Restoration during such period. Notwithstanding the foregoing,
for the purpose of calculating the Debt Service Coverage Ratio, Operation and
Maintenance Expenses shall not include the actual cash expenditures for items
(c), (e), (f) and (g) above, but shall instead include the appropriate accrual
for such items.

 

“Operator” shall mean Cheniere LNG O&M Services, L.P., a Delaware limited
partnership, or any replacement thereof in accordance with the terms of this
Agreement.

 

“Other Project Documents” shall mean: (a) the J&S Cheniere Terminal Use
Agreement, (b) each other contract or agreement entered into by the Borrower
related to the Development (other than the Material Project Documents) which
has, or as a result of any amendment to a Non-Material Document would have, a
term of more than five years (with respect to any contract that involves
payments to or by the Borrower in excess of $5,000,000) or involves payments to
or by the Borrower of amounts in excess of $50,000,000 (including any related
guarantee or credit support agreement or instrument) and (c) each contract
entered into by the Borrower with an Affiliate of the Borrower pursuant Section
8.24(d).

 

“Other Taxes” shall mean any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Financing Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Financing
Document.

 

“Participant” shall have the meaning assigned to such term in Section 11.06(c).

 

“Partnership Agreement” shall mean the Fourth Amended and Restated Agreement of
Limited Partnership of Sabine Pass, LNG L.P., effective as of February 25, 2005.

 

“Patriot Act” shall mean the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub.
L .107-56, signed into law October 26, 2001.

 

“Payor” shall have the meaning assigned to such term in Section 4.06.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation or any successor
trustee.

 

     - 19 -    CREDIT AGREEMENT

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“Permitted Capital Expenditures” shall mean Capital Expenditures that (a) are
Emergency Capex, (b) are incurred prior to the Final Maturity Date and are less
than $5,000,000 in any given fiscal year or $15,000,000 in the aggregate or (c)
are otherwise used for the Project and, with respect to clause (c), (i) are
funded entirely by equity or Permitted Indebtedness, (ii) are funded entirely
from the Distribution Account as set forth in Section 4.07(b) of the Collateral
Agency Agreement or (iii) are funded by insurance proceeds each as expressly
permitted herein and, in the case of clauses (i), (ii) or (iii), could not
reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the Borrower’s rights, duties, obligations or liabilities under
any TUA with an Anchor Tenant.

 

“Permitted Indebtedness” shall mean the Indebtedness permitted under Section
8.16.

 

“Permitted Investments” shall mean (a) marketable direct obligations of the
United States of America, (b) marketable obligations directly and fully
guaranteed as to interest and principal by the United States of America, (c)
demand deposits with the Collateral Agent, and time deposits, certificates of
deposit and banker’s acceptances issued by an Acceptable Bank, (d) commercial
paper or tax-exempt obligations given the highest rating by S&P and Moody’s, (e)
obligations of the Collateral Agent meeting the requirements of clause (c) above
or any other bank meeting the requirements of clause (c) above, in respect of
the repurchase of obligations of the type as described in clauses (a) and (b),
provided, that such repurchase obligations shall be fully secured by obligations
of the type described in said clauses (a) and (b) above, and the possession of
such obligations shall be transferred to, and segregated from other obligations
owned by, the Collateral Agent or such other bank, (f) a money market fund or a
qualified investment fund (including any such fund for which the Collateral
Agent or any Affiliate thereof acts as an advisor or a manager) given one of the
two highest long-term ratings available from S&P and Moody’s, and (g) eurodollar
certificates of deposit issued by the Collateral Agent meeting the requirements
of clause (c) above or any other bank meeting the requirements of clause (c)
above. In no event shall any cash be invested in any obligation, certificate of
deposit, acceptance, commercial paper or instrument which by its terms matures
more than 90 days after the date of investment, unless the Collateral Agent or a
bank meeting the requirements of clause (c) above shall have agreed to
repurchase such obligation, certificate of deposit, acceptance, commercial paper
or instrument at its purchase price plus earned interest within no more than 90
days after its purchase hereunder. With respect to any rating requirement set
forth above, if the relevant issuer is rated by either S&P or Moody’s, but not
both, then only the rating of such rating agency shall be utilized for the
purpose of this definition.

 

“Permitted Liens” shall mean the Liens permitted under Section 8.13.

 

“Permitted Swap Agreement” shall mean any Interest Rate Protection Agreement
between the Borrower and any Lender that is an Acceptable Bank entered into in
accordance with the terms of Section 8.15; provided, that, such Interest Rate
Protection Agreement shall not rank greater than pari passu with this Agreement.

 

“Person” shall mean any individual, corporation, company, voluntary association,
partnership, joint venture, trust, limited liability company, unincorporated
organization or Government Authority.

 

     - 20 -    CREDIT AGREEMENT

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“Pipeline” shall mean the 16-mile long, 42-inch diameter pipeline from the
Project to Johnsons Bayou, Louisiana authorized by FERC pursuant to Section 7(c)
of the NGA or any extension or replacement thereof or any other pipeline on the
Site requiring authorization from FERC pursuant to Section 7(c) of the NGA.

 

“Plan” shall mean any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledge Agreement” shall mean the Pledge Agreements executed by any Person
holding any direct equity interest in the Borrower.

 

“Pledgor” shall mean, at any time, any Person holding any direct equity interest
in the Borrower who has entered into a Pledge Agreement.

 

“Post-Default Rate” shall mean 2% above the interest rate otherwise applicable
to a Loan in accordance with this Agreement.

 

“Principal Payment Dates” shall mean (a) the earlier of (i) the date which is
the six month anniversary of the Term Conversion Date and (ii) October 1, 2009,
and each six month anniversary thereafter, or, if any such date is not a
Business Day, the next preceding Business Day and (b) the Final Maturity Date.

 

“Project” shall mean the LNG receiving terminal in Cameron Parish, Louisiana,
featuring a regasification design capacity of approximately 2.6 billion cubic
feet per day, two docks and three storage tanks with an aggregate capacity of
approximately 10.1 billion cubic feet and all other facilities and activities
incidental to the foregoing, to be constructed and owned by the Borrower but
excluding the Pipeline or any other pipeline outside the Site.

 

“Project Costs” shall mean all costs, fees, taxes and expenses incurred by the
Borrower to complete the Project as contemplated by (and consistent with) the
Transaction Documents (including the Construction Budget and Schedule) and
Government Approvals.

 

“Project Documents” shall mean each Material Project Document, Other Project
Document and Non-Material Project Document.

 

“Project Party” shall mean each Person from time to time party to a Project
Document.

 

“Project Revenues” shall mean, for any period, all cash revenues (without
duplication) received by the Borrower during such period from: (a) the sale of
Services and other services during such period, (b) all interest earned with
respect to such period on Permitted Investments held in the Collateral Accounts,
(c) amounts received by the Borrower from Project Parties or other Persons
constituting the refund of deposits during such period, (d) the proceeds of any
delay in start-up or business interruption insurance and other payments received
for interruption of operations or damage to the Project during such period
(other than Loss Proceeds) and (e) all other income or revenue, however earned
or received, by the Borrower during such period including, without limitation,
any tax refunds or liquidated damages.

 

     - 21 -    CREDIT AGREEMENT

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“Property” shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.

 

“Prudent Industry Practices” means, at a particular time, any of the practices,
methods, standards and procedures that, at that time, in the exercise of
reasonable judgment in light of the facts known at the time a decision was made,
could reasonably have been expected to accomplish the desired result consistent
with good business practices, including due consideration of the Project’s
reliability, environmental compliance, economy, safety and expedition, and which
practices, methods, standards and acts generally conform to International LNG
Terminal Standards.

 

“PUHCA” shall mean the Public Utility Holding Company Act of 1935.

 

“Quarterly Date” shall mean the last day of March, June, September and December
in each year, the first of which shall be the first such day after the date of
this Agreement; provided, that if any such day is not a Business Day, then such
Quarterly Date shall be the next preceding Business Day.

 

“Ready for Cool Down” shall have the meaning assigned to such term in the EPC
Contract.

 

“Ready for Performance Testing” shall have the meaning assigned to such term in
the EPC Contract.

 

“Regulation D”, “Regulation U” and “Regulation X” shall mean, respectively,
Regulation D, Regulation U and Regulation X of the Board.

 

“Release” shall mean, with respect to any Hazardous Material, any release,
spill, emission, leaking, pumping, injection, deposit, disposal, discharge,
dispersal, leaching or migration of such Hazardous Material into the
environment, including the movement of such Hazardous Material through ambient
air, soil, surface water, ground water, wetlands, land or subsurface strata.

 

“Required Debt Service Reserve Amount” shall mean as of any date on and after
the Term Conversion Date, an amount projected by the Agent equal to the amount
necessary to pay the forecasted Debt Service in respect of Secured Obligations
from the immediately preceding (or if the date of calculation is a Principal
Payment Date, such) Principal Payment Date (or the Term Conversion Date, if
there has not yet been a Principal Payment Date) through (and including) the
next Principal Payment Date (assuming that no Default will occur during such
period taking into account, with respect to interest, the amount of Interest
Expense that would accrue on the aggregate principal amount of the Loans for the
next six months .

 

“Required Payment” shall have the meaning assigned to such term in Section 4.06.

 

     - 22 -    CREDIT AGREEMENT

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“Restore” shall mean, with respect to any Affected Property, to rebuild, repair,
restore or replace such Affected Property. The term “Restoration” shall have a
correlative meaning.

 

“Restricted Payment” shall mean (a) all distributions by the Borrower (in cash,
Property of the Borrower or obligations) on, or other payments or distributions
on account of, or the setting apart of money for a sinking or other analogous
fund for, or the purchase, redemption, retirement or other acquisition by the
Borrower of, any portion of any partnership interest in the Borrower (other than
any distribution to the Pledgors of any Capacity Reservation Fee received by the
Borrower pursuant to an Omnibus Agreement after the Funding Date) and (b) all
payments (in cash, Property of the Borrower or obligations) of principal of,
interest on and other amounts with respect to, or other payments on account of,
or the setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition by the Borrower of, any
Indebtedness owed to a Pledgor or any other Person party to a Pledge Agreement
or any Affiliate thereof (including, without limitation, any Subordinated
Indebtedness incurred to fund the Equity Contribution Amount). For the avoidance
of doubt, payments to the Manager pursuant to Section 6.7 of the Partnership
Agreement and for fees and costs pursuant to the Management Services Agreement,
payments to the Operator pursuant to the O&M Agreement and income tax
distributions paid in accordance with Sections 4.02(c) and 4.06 of the
Collateral Agency Agreement are not Restricted Payments.

 

“Restricted Payment Date” shall have the meaning assigned to such term in
Section 8.12.

 

“Revenue Account” shall have the meaning assigned to such term in the Collateral
Agency Agreement.

 

“S&P” shall mean Standard & Poor’s Ratings Group, a division of McGraw-Hill,
Inc.

 

“Secured Obligations” shall mean, as at any date, the sum, computed without
duplication, of the following: (a) the aggregate outstanding principal amount of
the Loans plus all accrued interest on such amount plus (b) all other amounts
from time to time payable by the Borrower under the Financing Documents plus
accrued interest on such amounts plus (c) all amounts payable by the Borrower to
any Lender in connection with any Permitted Swap Agreement plus (d) any and all
obligations of the Borrower to the Agent, the Collateral Agent or any other
Secured Party for the performance of its agreements, covenants or undertakings
under or in respect of any Financing Document.

 

“Secured Parties” shall mean the Agent, the Collateral Agent and each of the
Lenders (as a “Lender” hereunder and, if applicable, as a provider of any
Permitted Swap Agreement).

 

“Securities Intermediary” shall have the meaning assigned to such term in the
Collateral Agency Agreement.

 

“Security Agreement” shall mean the Security Agreement between the Borrower and
the Collateral Agent, substantially in the form of Exhibit J to this Agreement.

 

     - 23 -    CREDIT AGREEMENT

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“Security Documents” shall mean (a) the Security Agreement, (b) the Collateral
Agency Agreement, (c) each Pledge Agreement, (d) the Mortgage and (e) any such
other security agreement, control agreement, patent and trademark assignment,
lease, mortgage, assignment and other similar agreement securing the Secured
Obligations between any Person and the Collateral Agent on behalf of the Secured
Parties and all financing statements, agreements or other instruments to be
filed in respect of the Liens created under each such agreement.

 

“Semi-Annual Dates” shall mean (a) prior to the Term Conversion Date, the date
which is six months following the Closing Date and each six-month anniversary
thereof and (b) following the Term Conversion Date, each Principal Payment Date;
provided, that if any such day is not a Business Day, then such Semi-Annual Date
shall be the next preceding Business Day.

 

“Services” shall mean (a) the berthing of LNG Vessels at the Project, (b) the
unloading and receipt of LNG from LNG Vessels, (c) storage of inventory of the
Anchor Tenants or other customers, (d) the regasification of the LNG held in
storage, (e) the transportation and delivery of the regasified LNG to the point
of delivery as specified by the Anchor Tenant or other customers, as applicable
or (f) other activities directly related to the performance by the Borrower of
the foregoing.

 

“Site” shall mean the Easement Properties and any leasehold interests described
in the Mortgage.

 

“Subcontractors” shall have the meaning assigned to such term in the EPC
Contract.

 

“Subordinated Indebtedness” shall mean any unsecured Indebtedness of the
Borrower to any Person permitted by clause (e) of Section 8.16 which is
subordinated to the Secured Obligations pursuant to an instrument in writing
satisfactory in form and substance to the Majority Lenders and containing
subordination provisions substantially in the form of Exhibit F.

 

“Subsidiary” shall mean, for any Person, any corporation, partnership or other
entity of which at least a majority of the securities or other ownership
interests having by their terms ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions of such
corporation, partnership or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or might have voting
power by reason of the happening of any contingency) is at the time directly or
indirectly owned or Controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.

 

“Substantial Completion” shall have the meaning assigned to such term in the EPC
Contract.

 

“Substantial Completion Date” shall mean the date on which Substantial
Completion has occurred in accordance with the EPC Contract, provided that the
Independent Engineer shall have confirmed that the conditions thereto have been
satisfied.

 

     - 24 -    CREDIT AGREEMENT

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“Supermajority Lenders” shall mean Lenders holding over 66 2/3% of the aggregate
outstanding Commitments or, if the Commitments have terminated, Lenders holding
over 66 2/3% of the aggregate unpaid principal amount of the Loans.

 

“Survey” shall mean an as-built survey of the Site which survey shall:

 

(a) be a current “as-built” metes and bounds survey of the Site, including
Easement Properties that benefit such Site;

 

(b) be made in accordance with the “Minimum Standard Detail Requirement for
ALTA/ACSM Land Title Surveys” jointly established and adopted by ALTA, ACSM and
NSPS in 1999 with all measurements made in accordance with the “Minimum Angle,
Distance and Closure Requirements for Survey Measurements Which Control Land
Boundaries for ALTA/ACSM Land Title Surveys”;

 

(c) be prepared by a surveyor acceptable to the Lenders;

 

(d) contain “Optional Survey Responsibilities and Specifications” 1, 2, 3, 6,
7(a), 7(b), 7(c), 8, 9, 10, 11(b), 13, 14, 15 and 16 as specified on Table A to
the “Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys”; and

 

(e) contain a certification from said surveyor in form and substance
satisfactory to each of the Lenders and the Title Company.

 

“Taxes” shall mean, with respect to any Person, all taxes, assessments, imposts,
duties, governmental charges or levies imposed directly or indirectly on such
Person or its income, profits or Property by any Government Authority. The term
“Tax” shall have a correlative meaning.

 

“Term Conversion Date” shall mean the later to occur of (a) the Substantial
Completion Date and (b) the earlier of (i) the Commercial Start Date under (and
as defined in) the Total TUA and (ii) such date as may be nominated by the
Borrower; provided that the Borrower shall have previously deposited in the Debt
Service Accrual Account an amount equal to the aggregate amount of all
principal, interest and fees that will become due and payable from the date of
such nomination until either (I) to the extent the Commercial Start Date under
the Total TUA has been determined pursuant to the terms thereof, the Commercial
Start Date, or (II) to the extent the Commercial Start Date under the Total TUA
has not been determined pursuant to the terms thereof, the last day of the
window period in effect (pursuant to Section 6.2 of the Total TUA) on the date
of such nomination.

 

“Termination Date” shall mean the date on which (a) the Agent, the Collateral
Agent and the Lenders shall have received final indefeasible payment in full in
cash of all of the Secured Obligations and all other amounts owing to the Agent,
the Collateral Agent and the Lenders under the Financing Documents, (b) the
Commitments shall have terminated, expired or been reduced to zero (other than
upon the occurrence of the Final Funding Date) and (c) each Permitted Swap
Agreement that would constitute a Secured Obligation shall have terminated or
expired.

 

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“Title Company” shall mean Commonwealth Land Title Insurance Company.

 

“Title Policy” shall mean the American Land Title Association 1970 (revised
10/17/84) Form extended coverage mortgagee’s policy of title insurance or such
other form as is reasonably acceptable to the Agent and the Lenders or a binding
marked commitment deleting all requirements to issue such policy dated on the
Closing Date and to be redated the date of recording of the Mortgage, issued by
the Title Company, in an amount reasonably acceptable to the Agent insuring the
validity of the Mortgage and the priority of the mortgage lien in favor of the
Collateral Agent for the benefit of the Secured Parties created by the Mortgage,
subject only to those exceptions approved by the Agent, containing such
endorsements and affirmative assurances as the Agent shall require and which are
obtainable from title companies in the State of Louisiana, and including such
reinsurance as the Agent may require, using forms acceptable to the Agent.

 

“Total Consent” shall mean the Consent and Agreement among Total LNG USA, Inc.
the Borrower and the Collateral Agent with respect to the Total TUA.

 

“Total Partners’ Equity” shall mean the sum of (i) all Project Costs paid by or
on behalf of the Borrower on or prior to the Closing Date plus (ii) all cash in
the Construction Account on the Closing Date plus (iii) all equity capital
contributions to the Borrower after the Closing Date.

 

“Total TUA” shall mean the Terminal Use Agreement dated as of September 2, 2004
between Total LNG USA, Inc. and the Borrower; as amended by the Amendment of LNG
Terminal Use Agreement, dated as of January 24, 2005.

 

“Transaction Documents” shall mean each Financing Document and each Project
Document.

 

“TUA” or “Terminal Use Agreement” shall mean any agreement between the Borrower
and a counterparty for the provision of Services.

 

“TUA Consents” shall mean the Total Consent and the Chevron Consent.

 

“United States” and “U.S.” shall mean the United States of America.

 

“Use” shall mean, with respect to any Hazardous Material and with respect to any
Person, the generation, manufacture, processing, distribution, handling, use,
treatment, recycling, storage or arrangement for disposal or disposal of such
Hazardous Material or transportation to or from the Property of such Person of
such Hazardous Material.

 

“Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

 

     - 26 -    CREDIT AGREEMENT

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1.02 Accounting Terms and Determinations.

 

(a) Except as otherwise expressly provided in this Agreement, all accounting
terms used in this Agreement shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders under this Agreement shall (unless otherwise disclosed to the
Lenders in writing at the time of delivery in the manner described in subsection
(b) below) be prepared, in accordance with generally accepted accounting
principles as in effect from time to time, including applicable statements,
bulletins and interpretations issued by the Financial Accounting Standards Board
and applicable statements, bulletins, opinions and interpretations issued by the
American Institute of Certified Public Accountants or its successor, and all
calculations made for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided in this Agreement) be made by
application of generally accepted accounting principles referred to above;
provided, however, that if any financial statements shall be prepared in
accordance with generally accepted accounting principles that are not the same
as the principles used for the preparation of the financial statements for the
preceding applicable period or if any calculations shall be made for the
purposes of determining compliance with this Agreement on a basis that is not
the same as was used for purposes of determining compliance for the preceding
applicable period, then the financial statements for the comparable prior period
shall be restated and the calculations re-made as specified above to enable a
comparison to be made with such prior period; provided, further, that the
restatement and remaking of such calculations shall be made solely for
comparison purposes and shall not result in any finding of non-compliance
hereunder.

 

(b) The Borrower shall deliver to the Lenders at the same time as the delivery
of any annual or quarterly financial statement under Section 8.01 (i) a
description in reasonable detail of any material variation between the
application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the next preceding annual or quarterly financial statements and
(ii) reasonable estimates of the difference between such statements arising as a
consequence of any such difference.

 

(c) To enable the ready and consistent determination of compliance with the
terms of this Agreement, the Borrower will not change the last day of its fiscal
year from December 31 of each year, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September 30 of
each year, respectively.

 

1.03 Certain Principles of Interpretation. In this Agreement, unless otherwise
indicated, the singular includes the plural and plural the singular; words
importing any gender include the other gender; references to statutes or
regulations are to be construed as including all statutory or regulatory
provisions consolidating, amending or replacing the statute or regulation
referred to; references to “writing” include printing, typing, lithography and
other means of reproducing words in a tangible visible form; the words
“including,” “includes” and “include” shall be deemed to be followed in each
instance by the words “without limitation”; references to articles, sections (or
subdivisions of sections), exhibits, annexes or schedules are to this Agreement
(unless otherwise specified); references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments, extensions and
other modifications and substitutions thereof (including by change orders where
applicable) (without,

 

     - 27 -    CREDIT AGREEMENT

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however, limiting any prohibition on any such amendments, extensions and other
modifications and substitutions by the terms of this Agreement); references to
Persons include their respective permitted successors and assigns and, in the
case of Government Authorities, Persons succeeding to their respective functions
and capacities; references to “real property” shall be deemed to include
“immovable property”; references to “personal property” shall be deemed to
include “movable property”; and references to “easements” shall be deemed to
include “servitudes”.

 

1.04 Consent Not to be Unreasonably Delayed. In this Agreement, references to
any consent to be provided by or required from the Agent, the Collateral Agent
or the Lenders or requiring consent of any such party in consultation with the
Independent Engineer are to be construed as including the requirement that such
consent not be unreasonably withheld or delayed.

 

ARTICLE II

 

COMMITMENTS

 

2.01 Loans. Each Lender severally agrees, on the terms and conditions of this
Agreement, to make loans (the “Loans”) to the Borrower in Dollars from time to
time during the period from and including the Funding Date to and including the
Availability End Date in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of the Commitment of such Lender
as in effect from time to time; provided, that in no event shall the aggregate
Loans of any Lender exceed the Commitment of such Lender; provided, further,
that in no event shall the aggregate principal amount of all Loans at any one
time outstanding exceed the aggregate amount of the Commitments as in effect
from time to time.

 

2.02 Borrowings. The Borrower shall give the Agent (which shall promptly notify
the Lenders) three Business Days’ prior notice of each borrowing under this
Agreement as provided in Section 4.05. Not later than 11:00 a.m. (New York City
time) on the date specified for each borrowing under this Agreement, each Lender
shall make available the amount of the Loan to be made by it on such date to the
Agent, in immediately available funds, by wire transfer to the account specified
on the attached Appendix C.

 

The amount with respect to the Loans so received by the Agent for the account of
the Borrower shall, subject to the terms and conditions of this Agreement, be
made available to the Borrower by remitting the same by 3:00 p.m. (New York City
time) to the Collateral Agent, in immediately available funds, for deposit in
the Construction Account, as set forth in the applicable Notice of Borrowing.

 

Notwithstanding anything to the contrary herein provided, the Borrower shall
only be permitted to make borrowings on the twenty-fifth day of the calendar
month or, if such day is not a Business Day, the next preceding Business Day and
there shall be no more than one borrowing of Loans in any calendar month.

 

2.03 Changes of Commitments.

 

(a) Optional Changes of Commitment. Subject to Section 2.03(b), the Borrower
shall have the right at any time or from time to time (i) to terminate the
Commitments

 

     - 28 -    CREDIT AGREEMENT

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and (ii) to reduce the aggregate unused amount of the Commitments; provided,
that: (A) the Borrower shall give notice of each such termination or reduction
as provided in Section 4.05, (B) each reduction of Commitments shall be in an
aggregate amount at least equal to $1,000,000 (or, if less, the full amount of
Commitments outstanding), and if greater, in integral multiples of $500,000 in
excess thereof and (C) either (I) the Substantial Completion Date has occurred
or (II) the Borrower and the Agent shall have received written concurrence from
the Independent Engineer that the remaining aggregate unused amount of the
Commitments after such termination or reduction, together with the Equity
Contribution Amount (and other funds committed in a form satisfactory to the
Majority Lenders) is sufficient, in the reasonable judgment of the Independent
Engineer, to achieve Substantial Completion on or prior to the Guaranteed
Substantial Completion Date.

 

(b) Mandatory Changes of Commitments. The aggregate amount of the Commitments
shall be automatically reduced to zero (i) at the close of business on the
Availability End Date or (ii) upon the occurrence of an Event of Default
described in Section 9.01(f) as set forth in the last paragraph of Section 9.01.

 

(c) No Reinstatement. The Commitments, once terminated or reduced, may not be
reinstated.

 

2.04 Fees.

 

(a) Commitment Fee. The Borrower shall pay to the Agent for the account of each
Lender a commitment fee (the “Commitment Fee”) on the daily average unused
amount of such Lender’s Commitment at a rate per annum equal to 0.50%, for the
period from and including the Closing Date to but not including the dates the
Commitments are reduced to zero pursuant to Section 2.03. The accrued Commitment
Fee shall be payable in arrears on each Semi-Annual Date and on the date the
Commitments are reduced to zero pursuant to Section 2.03.

 

(b) Administrative Fees. The Borrower shall pay to the Agent, for its own
account, a non-refundable agency fee (the “Administrative Fee”) and to the Agent
for the account of the Collateral Agent, a non-refundable agency fee (the
“Collateral Agency Fee”) for each year in the amounts set forth in the Agency
Fee Letter and the Collateral Agent Fee Letter, respectively. The Administrative
Fee and the Collateral Agency Fee shall be payable on the Closing Date and on
each annual anniversary of the Closing Date until the Termination Date.

 

(c) Other Fees. The Borrower shall pay to the Agent (for the account of the
Person to whom such payment is owed) all fees payable in the amounts and at
times separately agreed upon in each other Fee Letter between the Borrower and
the respective parties thereto.

 

2.05 Lending Offices. The Loans made by each Lender shall be made and maintained
at such Lender’s Applicable Lending Office.

 

2.06 Several Obligations; Remedies Independent. The failure of any Lender to
make any Loan to be made by it on the date specified therefor shall not relieve
any other Lender of its obligation to make its Loan on such date, but neither
any Lender nor the Agent shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender.

 

     - 29 -    CREDIT AGREEMENT

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The amounts payable by the Borrower at any time under this Agreement, or any
other Financing Document to each Lender shall be a separate and independent debt
and, subject to the Collateral Agency Agreement, each Lender shall be entitled
to protect and enforce its rights arising out of this Agreement, and it shall
not be necessary for any other Lender or the Agent to consent to, or be joined
as an additional party in, any proceedings for such purposes.

 

2.07 Maintenance of Records.

 

(a) Maintenance of Records by the Agent. The Agent shall maintain records in
which it shall record (i) the amount of each Loan made hereunder and each
Interest Period therefor, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder,
(iii) the amount of any sum received by the Agent hereunder for the account of
the Lenders and each Lender’s share thereof and (iv) a copy of each assignment
and acceptance delivered to it pursuant to Section 11.06(b). Upon reasonable
notice to the Agent, the Borrower and each Lender shall have the right to
inspect such records from time to time during normal business hours.

 

(b) Effect of Entries. Absent manifest error, the entries made in the records
maintained pursuant to paragraph (a) of this Section 2.07 shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided, that the failure of the Agent to maintain such records or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.

 

ARTICLE III

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

3.01 Repayment of Loans. The Borrower hereby agrees to pay to the Agent for the
account of each Lender the principal of such Lender’s Loans outstanding on each
Principal Payment Date in accordance with the amortization schedule attached as
Appendix B to this Agreement. All unpaid principal of each Loan shall be due and
payable in full in a single installment on the Final Maturity Date.

 

3.02 Interest. The Borrower hereby agrees to pay to the Agent for account of
each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period from and including the date of such Loan to but excluding
the date such Loan shall be paid in full at the rate equal to the LIBO Rate for
such Loan for the applicable Interest Periods plus the Applicable Margin.

 

Notwithstanding the foregoing, the Borrower hereby agrees that upon the
occurrence of any Event of Default, all then-outstanding Loans shall bear
interest at a rate per annum equal to the Post-Default Rate for the period from
and including the date of the occurrence of such Event of Default to but
excluding the date such Event of Default is remedied or waived.

 

Accrued interest on each Loan shall be payable in arrears (a) on each
Semi-Annual Date and (b) upon the payment or prepayment of such Loan (but only
on the principal amount so paid or prepaid), except that interest payable at the
Post-Default Rate shall be payable

 

     - 30 -    CREDIT AGREEMENT

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from time to time on demand (or, if no demand is made during any month, on the
last day of such month). Promptly after the determination of any interest rate
provided for in this Agreement or any change in any such rate, the Agent shall
give notice of such interest rate to the Lenders to which such interest is
payable and to the Borrower.

 

3.03 Optional Prepayments of Loans. Subject to Section 4.04, the Borrower shall
have the right to prepay Loans at any time after the Availability End Date;
provided, that the Borrower shall give the Agent notice of each such prepayment
as provided in Section 4.05 and, upon the date specified in any such notice of
prepayment, the amount to be prepaid shall become due and payable. Any
prepayment by the Borrower pursuant to this Section 3.03 shall be made
simultaneously with, and is conditioned upon, (a) the prepayment under any
Permitted Swap Agreement (if then in effect) to the extent the aggregate
notional amount under all such Permitted Swap Agreements exceeds the aggregate
amount of Loans outstanding after giving effect to the prepayment contemplated
by this Section 3.03 and (b) the payment by the Borrower of any costs, expenses
or other amounts incurred by any Lender in connection with such prepayment
(including amounts payable by the Borrower under any such Permitted Swap
Agreement with such Lender as a result of such early termination effected
pursuant to clause (a) above and any breakage costs due in accordance with
Section 5.03 hereof). Any prepayment by the Borrower in this Section 3.03 shall
be applied pro rata to the remaining scheduled principal repayment amounts of
the Loans.

 

3.04 Mandatory Prepayments. In addition to mandatory repayments of principal of
Loans as set forth in Section 3.01 above, the Borrower shall make the following
mandatory payments (as prepayments to be effected in each case in the manner
specified in paragraph (d) below):

 

(a) Event of Loss. The Borrower shall prepay the Loans in an amount equal to
100% of the Net Available Amount not otherwise applied in accordance with
Section 8.05(b) or Section 8.05(c), as applicable.

 

(b) Asset Sales. The Borrower shall prepay the Loans in an aggregate amount
equal to 100% of the net proceeds resulting from the disposition of any of its
physical assets (other than dispositions of assets permitted pursuant to the
second sentence of Section 8.11(a)) to the extent the Borrower has not either
(i) reinvested such proceeds within 60 days to acquire substitute or replacement
assets of equal or greater value than the assets disposed or (ii) reduced the
Commitments.

 

(c) Tax Refunds. Following the Term Conversion Date, the Borrower shall prepay
the Loans in an aggregate amount equal to 100% of any tax refunds pertaining to
taxes disbursed as part of the Project Costs.

 

(d) Application. Prepayments described in this Section 3.04 shall be applied to
the Loans in the inverse order of the maturities of such Loans.

 

     - 31 -    CREDIT AGREEMENT

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ARTICLE IV

 

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

 

4.01 Payments.

 

(a) Except to the extent otherwise provided in this Agreement, all payments of
principal, interest, fees and other amounts to be made by the Borrower under
this Agreement and, except to the extent otherwise provided in any of the other
Financing Documents, all payments to be made by the Borrower under any such
other Financing Documents, shall be made in Dollars, in immediately available
funds, without deduction, set-off or counterclaim, to the Agent by wire transfer
to the account specified on the attached Appendix C. No payment shall be made
later than 11:00 a.m. (New York time) on the date on which such payment shall
become due (each such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).

 

(b) The Borrower shall, at the time of making each payment under this Agreement
for account of any Lender, specify to the Agent (which shall so notify the
intended recipient or recipients) the Loans or other amounts payable by the
Borrower under this Agreement to which such payment is to be applied (and in the
event that it fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payment to the Lenders for application
in such manner as it or the Majority Lenders, subject to Section 4.02, may
determine to be appropriate).

 

(c) Each payment received by the Agent under this Agreement for account of any
Lender shall be paid by the Agent promptly to such Lender, in immediately
available funds, for account of such Lender’s Applicable Lending Office for the
Loan or other obligation in respect of which such payment is made.

 

(d) If the due date of any payment under this Agreement would otherwise fall on
a day which is not a Business Day such date shall be extended to the next
succeeding Business Day (except in the case where such payment due date is a
Semi-Annual Date or Principal Payment Date, in which case the terms set forth in
Section 1.01 for “Semi-Annual Date” or “Principal Payment Date”, as the case may
be, are applicable) and interest shall be payable for any principal so extended
for the period of such extension.

 

4.02 Pro Rata Treatment. Except to the extent otherwise provided in this
Agreement: (a) each borrowing of Loans under Section 2.01 shall be made from the
Lenders, each payment of commitment fee under Section 2.04 shall be made for
account of the Lenders, and each termination or reduction of the amount of the
Commitments under Section 2.03 shall be applied to the respective Commitments of
the Lenders pro rata according to the amounts of their respective Commitments,
(b) except as otherwise specified herein, each payment or prepayment of
principal of Loans by the Borrower shall be made for account of the Lenders pro
rata in accordance with the respective unpaid principal amounts of the Loans
held by them; provided, that if immediately prior to giving effect to any such
payment in respect of any Loan, the outstanding principal amount of the Loans
shall not be held by the Lenders pro rata in accordance with their respective
Commitments in effect at the time such Loans were made (by

 

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reason of a failure of a Lender to make a Loan in the circumstances described in
the last paragraph of Section 11.04), then such payment shall be applied to the
Loans in such manner as shall result, as nearly as is practicable, in the
outstanding principal amount of the Loans being held by the Lenders pro rata in
accordance with their respective Commitments following such payment and (c) each
payment of interest on the Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the amounts of interest on such Loans
then due and payable to the respective Lenders.

 

4.03 Computations. Interest and fees on Loans and on other obligations of the
Borrower or the Lenders shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last day)
occurring in the period for which payable.

 

4.04 Minimum Amounts. Except for (a) mandatory prepayments made pursuant to
Section 3.04 and (b) prepayments made pursuant to Section 5.03, each borrowing
and partial prepayment of principal of Loans shall be in an amount equal to
$2,000,000 or any higher multiple of $500,000 (or, if less, the full amount of
such Loans outstanding) (borrowings or prepayments of Loans having different
Interest Periods at the same time being deemed separate borrowings and
prepayments for purposes of the foregoing, one for each Interest Period).

 

4.05 Certain Notices. Notices by the Borrower to the Agent of terminations or
reductions of the Commitments, of borrowings and optional prepayments of Loans
shall be irrevocable and shall be effective only if received by the Agent not
later than 11:00 a.m. (New York City time) on the number of Business Days prior
to the date of the relevant termination, reduction, borrowing or prepayment or
the first day of such Interest Period specified below:

 

Notice

--------------------------------------------------------------------------------

   Number of
Business Days Prior

--------------------------------------------------------------------------------

Termination or reduction of the Commitments

   5

Borrowing of Loans

   3

Prepayment of Loans

   5

 

Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced and submission of such notice shall be
subject to the satisfaction of the conditions set forth in Section 2.03. Each
such notice of borrowing shall be in the form of Exhibit A and shall be subject
to the satisfaction of the conditions set forth in Article VI (each, a “Notice
of Borrowing”). Each such notice of optional prepayment shall specify the amount
(subject to Section 4.04) of each Loan prepaid and the date of such optional
prepayment (which shall be a Business Day). The Agent shall promptly notify the
Lenders of the contents of each such notice.

 

4.06 Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Borrower (the “Payor”) prior to the date on which
the Payor is to make payment to the Agent of (in the case of a Lender) the
proceeds of a Loan to be made by such Lender or (in the case of the Borrower) a
payment to the Agent for account of one or more

 

     - 33 -    CREDIT AGREEMENT

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of the Lenders (any such payment, a “Required Payment”), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption, (but shall not be required to)
make the amount of such payment available to the intended recipient (or
recipients) on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient (or recipients) of such payment shall, on
demand, repay to the Agent the amount so made available together with interest
on such amount in respect of each day during the period commencing on the date
(the “Advance Date”) such amount was so made available by the Agent until the
date the Agent recovers such amount at a rate per annum equal to the Federal
Funds Rate for such day and, if such recipient (or recipients) shall fail
promptly to make such payment, the Agent shall be entitled to recover such
amount, on demand, from the Payor, together with interest as provided above;
provided, that if neither the recipient (or recipients) nor the Payor shall
return the Required Payment to the Agent within three Business Days of the
Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient (or recipients) shall each be obligated to pay interest on the
Required Payment as follows:

 

(a) if the Required Payment shall represent a payment to be made by the Borrower
to the Lenders, the Borrower and the recipient (or recipients) shall each be
obligated retroactively to the Advance Date to pay interest in respect of the
Required Payment at the Post-Default Rate (and, in case the recipient (or
recipients) shall return the Required Payment to the Agent, without limiting the
obligation of the Borrower under Section 3.02 to pay interest to such recipient
(or recipients) at the Post-Default Rate in respect of the Required Payment),
and

 

(b) if the Required Payment shall represent proceeds of a Loan to be made by the
Lenders to the Borrower, the Payor and the Borrower shall each be obligated
retroactively to the Advance Date to pay interest in respect of the Required
Payment at the rate of interest provided for such Required Payment pursuant to
Section 3.02 (and, in case the Borrower shall return the Required Payment to the
Agent, without limiting any claim the Borrower may have against the Payor in
respect of the Required Payment, subject to Section 11.13).

 

4.07 Sharing of Payments; Etc.

 

(a) The Borrower agrees that, in addition to (and without limitation of) any
right of set-off, banker’s lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled, at its option, to offset balances held by it for
account of the Borrower at any of its offices, in Dollars or in any other
currency, against any principal of or interest on any of such Lender’s Loans or
any other amount payable to such Lender under this Agreement, that is not paid
when due (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent of such action;
provided, that such Lender’s failure to give such notice shall not affect the
validity of such action.

 

(b) If any Lender shall obtain from the Borrower payment of any principal of or
interest on any Loan owing to it or payment of any other amount under this
Agreement held by it or any other Financing Document or through the exercise of
any right of set-off, banker’s lien or counterclaim or similar right or
otherwise (other than from the Agent as provided in this

 

     - 34 -    CREDIT AGREEMENT

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Agreement), and, as a result of such payment, such Lender shall have received a
greater percentage of the principal of or interest on the Loans or such other
amounts then due hereunder by the Borrower to such Lender than the percentage
received by any other Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or such other amounts, respectively, owing to such other
Lenders (or in interest due on such Loans or other amounts, as the case may be)
in such amounts, and make such other adjustments from time to time as shall be
equitable, with the effect that all the Lenders shall share the benefit of such
excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders; provided, that if at the time of
such payment the outstanding principal amount of the Loans shall not be held by
the Lenders, pro rata in accordance with their respective Commitments in effect
at the time such Loans were made (by reason of a failure of a Lender to make a
Loan hereunder in the circumstances described in the last paragraph of Section
11.04), then such purchases of participations or direct interests shall be made
in such manner as will result, as nearly as is practicable, in the outstanding
principal amount of the Loans being held by the Lenders, pro rata according to
the amounts of such Commitments. To such end all the Lenders shall make
appropriate adjustments among themselves (by the resale of participations sold
or otherwise) if such payment is rescinded or must otherwise be restored.

 

(c) The Borrower agrees that any Lender so purchasing such a participation (or
direct interest) may exercise all rights of set-off, banker’s liens,
counterclaims or similar rights with respect to such participation as fully as
if such Lender were a direct holder of Loans or other amounts (as the case may
be) owing to such Lender in the amount of such participation.

 

(d) Nothing contained in this Agreement shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other indebtedness or
obligation of the Borrower. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.07 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.07 to share in the
benefits of any recovery on such secured claim.

 

ARTICLE V

 

YIELD PROTECTION; ETC.

 

5.01 Alternate Rate of Interest. If prior to the commencement of any Interest
Period with respect to a making (for the purposes of this Section 5.01, a
“borrowing”) of Loans:

 

(a) the Agent reasonably determines that adequate and reasonable means do not
exist for ascertaining the LIBO Rate for such Interest Period; or

 

(b) the Agent is advised by the Majority Lenders that such Lenders have
reasonably determined that the LIBO Rate for that Interest Period will not
adequately and fairly reflect the cost to those Lenders of making or maintaining
their Loans included in such borrowing for such Interest Period;

 

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then the Agent will give notice of those circumstances to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable and:

 

(i) during the 15-day period next succeeding the date of any such notice (the
“Negotiation Period”), the Agent and the Borrower will negotiate in good faith
for the purpose of agreeing upon an alternate, mutually acceptable basis (the
“Substitute Basis”) for determining the rate of interest to be applicable to
such Loans or amounts for such Interest Period;

 

(ii) if at the expiry of the Negotiation Period, the Agent and the Borrower have
agreed upon a Substitute Basis and the Agent has received confirmation from its
counsel that such Substitute Basis has received all necessary Government
Approvals and consents, such Substitute Basis shall be retroactive to, and take
effect from, the beginning of such Interest Period;

 

(iii) if at the expiry of the Negotiation Period, a Substitute Basis shall not
have been agreed upon as aforesaid or the Agent shall not have received the
above-mentioned confirmation as to requisite governmental approvals or consents,
each Lender shall notify the Borrower of the cost to such Lender (as determined
by it in good faith) of funding and maintaining the Loan for such Interest
Period; and the interest payable to such Lender on such Loan or amount for such
Interest Period shall be a rate per annum equal to the Applicable Margin above
the cost to such Lender of funding and maintaining such Loan or amount for such
Interest Period as so notified by such Lender (or, as to any principal of such
Loan or, to the extent permitted by applicable law, other amount payable to such
Lender on or in respect of such Loan that is then past due, 2% plus the
Applicable Margin above such cost); and

 

(iv) the procedures specified in clauses (i), (ii) and (iii) above shall apply
to each Interest Period for such Loans or amounts succeeding the first Interest
Period to which they were applied unless and until the Agent shall determine
that the conditions referred to in clause (a) or (b) above no longer exist and
so notifies the Borrower, whereupon interest on such Loans or amounts shall
again be determined in accordance with the provisions of Section 3.02 commencing
on the first day of the Interest Period for such Loans or amounts next
succeeding the date of such notice.

 

5.02 Increased Costs.

 

(a) If any Change in Law:

 

(i) imposes, modifies or deems applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender (except any such reserve requirement reflected in
the LIBO Rate); and/or

 

     - 36 -    CREDIT AGREEMENT

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(ii) imposes on any Lender or the London interbank market any other condition
materially affecting this Agreement or Loans made by such Lender;

 

and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any Loan (or of maintaining its obligation to make any
such Loan) or to reduce the amount of any sum received or receivable by such
Lender under any Financing Document, in each case by an amount that such Lender
reasonably deems to be material, then the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for the additional
costs incurred or reduction suffered (except to the extent the Borrower is
excused from payment pursuant to Section 5.05).

 

(b) If any Lender reasonably determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender’s capital or (without duplication) on the capital of its holding company,
if any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or its holding company could have achieved
but for that Change in Law (taking into consideration such Lender’s and its
holding company’s policies with respect to capital adequacy), in each case by an
amount that such Lender reasonably deems to be material, then from time to time
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or (without duplication) its holding company for any such
reduction suffered (except to the extent the Borrower is excused from payment
pursuant to Section 5.05).

 

(c) To claim any amount under this Section 5.02, a Lender must deliver to the
Borrower a certificate setting forth in reasonable detail the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
under Section 5.02(a) or Section 5.02(b). The Borrower shall pay such Lender the
amount due and payable and set forth on any such certificate within 30 days
after its receipt.

 

(d) Failure or delay on the part of any Lender to demand compensation pursuant
to this Section 5.02 shall not constitute a waiver of such Lender’s right to
demand that compensation; provided, that the Borrower shall not be required to
compensate a Lender pursuant to this Section 5.02 for any increased costs or
reductions incurred more than 180 days prior to the date on which such Lender
notifies the Borrower of the Change in Law giving rise to those increased costs
or reductions and of such Lender’s intention to claim compensation for those
circumstances; provided, further, that if the Change in Law giving rise to those
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include that period of retroactive effect.

 

5.03 Break Funding Payments. In the event of (a) the payment of any principal of
any Loan other than on the last day of the Interest Period for that Loan
(including under Section 3.04 or as a result of an Event of Default), (b) the
failure to borrow on the date specified in any borrowing notice or failure to
repay or prepay any Loan on any scheduled repayment or prepayment date or (c)
the assignment of any Loan other than on the last day of its Interest Period as
a result of a request by the Borrower pursuant to Section 5.05, then, in any
such event, the Borrower shall compensate each Lender for the loss, cost and
expense attributable to any such event. Such loss, cost or expense to any Lender
shall be deemed to include an amount reasonably determined by such Lender to be
the excess, if any, of (i) the amount of interest that

 

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would have accrued on the principal amount of such Loan had such event not
occurred, at the LIBO Rate that would have been applicable to such Loan, for the
period from the date of such event to the last day of the then current Interest
Period for such Loan (or, in the case of a failure to borrow, for the period
that would have been the Interest Period for such Loan) over (ii) the amount of
interest that would accrue on such principal amount for that period at the
interest rate that such Lender would bid were it to bid, at the commencement of
that period, for Dollar deposits of a comparable amount and period from other
banks in the eurodollar market. To claim any amount under this Section 5.03, the
Lender must deliver to the Borrower a certificate setting forth in reasonable
detail any amount or amounts that such Lender is entitled to receive pursuant to
this Section 5.03 (including calculations, in reasonable detail, showing how
such Lender computed such amount or amounts). The Borrower shall pay such Lender
the amount due and payable and set forth on any such certificate within 30 days
after its receipt.

 

5.04 Taxes.

 

(a) Any and all payments by or on account of any Secured Obligation shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided, that if the Borrower is required to deduct any Indemnified
Taxes or Other Taxes from those payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.04) each
Person entitled thereto receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make those
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Government Authority in accordance with any applicable Government Rule.

 

(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Government Authority in accordance with any applicable Government Rule.

 

(c) The Borrower shall indemnify the Agent, the Collateral Agent and each
Lender, within 30 days after written demand, for the full amount of any
Indemnified Taxes or Other Taxes paid by such Person on or with respect to any
payment by or on account of any Secured Obligation (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 5.04) and any penalties, interest and reasonable expenses arising
from, or with respect to, those Indemnified Taxes or Other Taxes, whether or not
those Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Government Authority. To claim any amount under this
Section 5.04(c), the Agent, Collateral Agent or a Lender must deliver to the
Borrower a certificate setting forth in reasonable detail as to the amount of
such payment or liability. If the Agent, Collateral Agent or a Lender receives a
final refund of an Indemnified Tax or Other Tax from the Government Authority to
which any Indemnified Tax or Other Tax was paid, and such refund is clearly
identifiable and attributable, in such Person’s sole discretion, to any
Indemnified Taxes or Other Taxes in respect of this Agreement that the Borrower
has either paid on behalf of such Person or for which such Person was
indemnified, then such Person shall pay over such refund to the Borrower as soon
as reasonably practicable following receipt thereof.

 

(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Government Authority, the Borrower shall deliver to the
Agent the

 

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original or a certified copy of a receipt issued by such Government Authority
evidencing such payment, a copy of the return reporting that payment or other
evidence of such payment reasonably satisfactory to the Agent.

 

(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under any applicable Government Rule or treaty between the
United States and the jurisdiction in which the Borrower is located, with
respect to payments of any Secured Obligations will deliver to the Borrower
(with a copy to the Agent), at the time or times prescribed by applicable
Government Rule, such properly completed and executed documentation prescribed
by applicable Government Rule and reasonably requested by the Borrower in
writing as will permit those payments to be made without withholding or at a
reduced rate.

 

(f) Without limiting the generality of the foregoing, each Foreign Lender shall
deliver to the Borrower and the Agent on the Closing Date or not later than 10
Business Days following the effectiveness of any assignment pursuant to Section
11.06 by which it becomes a party to this Agreement (i) two duly completed
copies of United States Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP or
W-8IMY or successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income Taxes and (ii) any
other governmental forms which are necessary or required under an applicable Tax
treaty or otherwise by law to eliminate any withholding Tax, which have been
reasonably requested in writing by the Borrower. Each Lender which delivers to
the Borrower and the Agent a Form W-8ECI, W-8BEN, W-8EXP or W-8IMY pursuant to
the preceding sentence further undertakes to deliver to the Borrower and the
Agent (A) promptly following written notice from the Borrower two further copies
of such form on or before the date that any such form expires or becomes
obsolete and such amendments thereto or extensions or renewals thereof as may
reasonably be requested by the Borrower or the Agent and (B) without notice from
the Borrower promptly after the occurrence of any event relating solely to the
status of the Foreign Lender requiring a change in the most recent form so
delivered by it, in each case certifying that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income Taxes, unless an event (including any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income Taxes and in any such event, the Borrower shall withhold
Taxes at the rate and in the manner required by the laws of the United States
with respect to payments made to such a Lender and shall be required to pay any
additional amounts or indemnify such a Lender pursuant to this Section 5.04 with
respect to such withheld Taxes.

 

5.05 Mitigation of Obligations; Replacement of Lenders.

 

(a) If any Lender requests compensation under Section 5.02 or if the Borrower is
required to pay any additional amount to any Lender or any Government Authority
for the account of any Lender pursuant to Section 5.04, then such Lender, if
requested by the Borrower, will use reasonable efforts to designate a different
lending office for funding or

 

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booking its Loans or to assign its rights and obligations under the Financing
Documents to another of its offices, branches or Affiliates, if such designation
or assignment (i) would eliminate or reduce amounts payable pursuant to Section
5.02 or 5.04, as the case may be, in the future and (ii) in the Lender’s sole
discretion would not subject such Lender to any unreimbursed cost or expense and
would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment unless it shall withdraw its
request in a timely manner that the Lender designate a different lending office.

 

(b) If any Lender requests compensation under Section 5.02, if the Borrower is
required to pay any additional amount to any Lender or any Government Authority
for the account of any Lender pursuant to Section 5.04, if Section 5.06 becomes
applicable to any Lender or if any Lender defaults in its obligation to fund
Loans, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions, including required
consents, contained in Section 11.06), all its interests, rights and obligations
under this Agreement to an assignee that assumes those obligations (which
assignee may be another Lender); provided, that (i) such Lender receives payment
of an amount equal to the Secured Obligations owing to it from the assignee (to
the extent of the outstanding principal, accrued interest and fees included in
those Secured Obligations) or the Borrower (in the case of all other amounts so
included) and (ii) in the case of any such assignment resulting from a claim for
compensation under Section 5.02 or payments required to be made pursuant to
Section 5.04, such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, as a result of a waiver by such Lender of its right under Section
5.02, 5.04 or 5.06, as applicable, the circumstances entitling the Borrower to
require such assignment and delegation have ceased to apply. If a Lender refuses
to be replaced pursuant to this Section 5.05 and Section 11.06(b), the Borrower
shall not be obligated to pay such Lender any of the compensation referred to in
this Section 5.05 or any additional amounts incurred or accrued under this
Article V from and after the date in excess of those that would have been
incurred for such replacement.

 

5.06 Illegality. In the event that it becomes unlawful or, by reason of a Change
in Law, any Lender is unable to honor its obligation to make or maintain Loans,
then such Lender will promptly notify the Borrower of such event (with a copy to
the Agent) and such Lender’s obligation to make Loans shall be suspended until
such time as such Lender may again make and maintain Loans. Each Lender agrees
to use reasonable efforts, including using reasonable efforts to designate a
different lending office for funding or booking its Loans or to assign its
rights and obligations under the Financing Documents to another of its offices,
branches or Affiliates, if such designation or assignment (a) would eliminate or
avoid such illegality and (b) in the Lender’s sole discretion, would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment; provided, that prior to incurring any such costs or
expenses such Lender provides written notice to the Borrower setting forth in
reasonable detail a good faith estimate of such costs and expenses.

 

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ARTICLE VI

 

CONDITIONS PRECEDENT

 

6.01 Closing Date. The occurrence of the Closing Date is subject to the receipt
by the Agent of each of the agreements and other documents, and the satisfaction
of the conditions precedent, set forth below, each of which shall be (x) in form
and substance satisfactory to the Lenders in their sole discretion and (y) if
applicable, in full force and effect (unless, in each case, waived by each
Lender):

 

(a) Financing Documents. Each Financing Document (other than the Permitted Swap
Agreements), duly executed and delivered by the parties thereto.

 

(b) Project Documents. An original or certified copy of each Material Project
Document (other than Additional Project Documents and each Ancillary Document
related thereto and the Noble Option Agreement) and each Change Order issued
pursuant to the EPC Contract, each duly executed and delivered by the intended
parties thereto.

 

(c) Corporate Documents. The following documents, each certified as indicated
below:

 

(i) in the case of each of the Borrower, each Pledgor and the Operator, a copy
of such Person’s articles of incorporation or certificate of formation (as the
case may be), together with any amendments thereto, certified by the Secretary
of State of the Person’s state of organization as of a recent date;

 

(ii) in the case of each of the Borrower, each Pledgor and each other Material
Project Party (other than each counterparty (other than the Borrower) to a Lease
Agreement and the Noble Option Agreement), a copy of a certificate as to the
good standing of and payment of franchise taxes by such Person from the
Secretary of State of such Person’s jurisdiction of organization dated as of a
recent date; and

 

(iii) a certificate of the Borrower, each Pledgor, the Manager and the Operator
executed by an Authorized Officer of such Person certifying:

 

(A) that (I) in the case of the Borrower and the Operator, attached to such
certificate is a true and complete copy of the limited partnership agreement of
such Person, as in effect on the date of such certificate and (II) in the case
of each Pledgor, attached to such Person’s certificate is a true and complete
copy of the by-laws, operating agreement or other organizational documents of
such Person, as in effect on the date of such certificate,

 

(B) that attached to such certificate is a true and complete copy of resolutions
duly adopted by the authorized governing body of such Person, authorizing the
execution, delivery and performance of such of the Transaction Documents to
which such Person is or is intended to be a

 

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party (including, in the case of each Pledgor, authorizing such Pledgor’s
commitment to fund, directly or indirectly, the Equity Contribution Amount), and
that such resolutions have not been modified, rescinded or amended and are in
full force and effect,

 

(C) that the articles of incorporation or certificate of formation (as the case
may be) of such Person has not been amended since the date of the certification
furnished pursuant to paragraph (c)(i) or (c)(ii) of this Section 6.01, and

 

(D) as to the incumbency and specimen signature of each officer, member or
partner (as applicable) of such Person executing the Transaction Documents
(other than Non-Material Project Documents) to which such Person is or is
intended to be a party and each other document to be delivered by such Person
from time to time pursuant to the terms thereof (and the Agent and each Lender
may conclusively rely on such incumbency certification until it receives notice
in writing from such Person);

 

(d) Project Development.

 

(i) Construction Budget and Schedule. The Construction Budget and Schedule
certified as such by an Authorized Officer of the Borrower and in form and
substance satisfactory to the Independent Engineer.

 

(ii) Base Case Forecast. The Base Case Forecast certified as such by an
Authorized Officer of the Borrower.

 

(iii) Report of Independent Engineer. A recent report of the Independent
Engineer favorably reviewing: (A) the technical and economic feasibility of the
Project and the environmental compliance and environmental risks relating to the
Project, (B) the reasonableness and consistency of the Construction Budget and
Schedule, the EPC Contract and the assumptions related to the costs and
operating performance of the Project, (C) the reasonableness of the assumptions
underlying the Base Case Forecast (taking into account, among other things, the
TUAs with Anchor Tenants) and (D) such other matters as the Agent may reasonably
request.

 

(e) Financial Statements. Certified copies of (i) the most recent unaudited
financial statements of the Borrower, the Pledgors and the Operator and (ii) to
the extent available to the Borrower, the most recent audited financial
statements of the other Material Project Parties (other than each counterparty
(other than the Borrower) to a Lease Agreement and the Noble Option Agreement).

 

(f) Payment of Fees. Payment by or on behalf of the Borrower of such fees and
expenses payable by the Borrower pursuant to Section 2.04 (to the extent such
fees are due and payable as of the Closing Date), Section 11.03, the Fee Letters
and any other fees and expenses, if any, that the Borrower and the Agent shall
have agreed shall be due and payable on the Closing Date.

 

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(g) Collateral Accounts. Evidence of the establishment of the Collateral
Accounts.

 

(h) Borrower’s Certificate. A certificate of the Borrower executed by an
Authorized Officer certifying that each of the representations and warranties of
the Borrower contained in Article VII is (i) if such representation and warranty
is qualified as to materiality or by reference to the existence of a Material
Adverse Effect, true and complete to the extent of such qualification on and as
of such date as if made on and as of such date (or, if stated to have been made
solely as of an earlier date, as of such earlier date) or (ii) if such
representation and warranty is not so qualified, true and complete in all
material respects on and as of such date as if made on and as of such date (or,
if stated to have been made solely as of an earlier date, as of such earlier
date).

 

(i) Insurance Report. Report from the Insurance Advisor confirming, among other
things, that the insurance policies provided as of the Closing Date pursuant to
and in accordance with Section 8.05 are typical for undertakings similar to the
Project, are in full force and effect, the premiums due thereon have been paid
and that such policies otherwise conform with the requirements specified in the
Financing Documents.

 

(j) Filings, Registrations and Recordings; Fees and Taxes.

 

(i) Filings, Registrations and Recordings. Executed UCC-1 financing statements
under the Uniform Commercial Code with respect to the Borrower and each Pledgor,
in the relevant jurisdictions listed on the attached Schedule 6.01(j) and any
other jurisdiction in which financing statements are necessary or, in the
opinion of the Agent, desirable to perfect the Liens created under the Security
Documents and copies of Uniform Commercial Code search reports and tax lien,
judgment and litigation search reports with respect to the Borrower and each
Pledgor, and all other instruments to be recorded or filed or delivered in
connection with the Security Documents (including with respect to the letters of
credit or any other credit support instruments issued in support of Project
Documents as of the Closing Date (if any), acknowledgments required to perfect
such Liens and possession (if required for perfection) of such instruments).

 

(ii) Fees and Taxes. Evidence that all filing, recordation, subscription and
inscription fees and all recording and other similar fees, and all recording,
stamp and other taxes and other expenses related to such filings, registrations
and recordings necessary for the consummation of the transactions contemplated
by this Agreement and the other Financing Documents have been paid in full by or
on behalf of the Borrower.

 

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(k) Real Property Documents; Title Insurance; Survey.

 

(i) the Title Policy;

 

(ii) the Survey; and

 

(iii) Proof of payment to the Title Company of (A) all expenses and premiums of
the Title Company in connection with the issuance of the Title Policy and (B) an
amount equal to the recording and stamp taxes payable in connection with
recording the Mortgage in the appropriate parish clerk of court office(s).

 

(l) “Know Your Customer” and Anti-Money Laundering Rules and Regulations.
Documentation and other information required by bank regulatory authorities
under applicable “know your customer” and anti-money laundering rules and
regulations, including, without limitation, the Patriot Act, shall have been
received by the Agent and shall include, without limitation, evidence consisting
of the following information (i) the Borrower’s full legal name, (ii) the
Borrower’s address and mailing address, (iii) the Borrower’s W-9 forms including
its tax identification number, (iv) the Borrower’s certificate of formation, (v)
a list of directors of the Borrower or list of such persons controlling the
Borrower, (vi) a list of the partners of the Borrower and (vii) an executed
resolution or other such documentation stating who is authorized to open an
account for the Borrower, in each case in form and substance reasonably
satisfactory to the Agent, and such other information as may reasonably be
requested by the Agent.

 

(m) Government Approvals. Evidence that all material Government Approvals set
forth on Schedule 7.05(a) have been duly obtained, were validly issued and are
in full force and effect.

 

(n) Opinions of Counsel. Opinions of counsel, each in form and substance
satisfactory to the Lenders:

 

(i) An opinion of Andrews Kurth LLP, special New York and Texas counsel to the
Borrower, Pledgors, Manager and Operator.

 

(ii) An opinion of Ottinger Hebert, L.L.C., special Louisiana counsel to the
Borrower.

 

(iii) An opinion of (i) Vinson & Elkins, special New York counsel to Total LNG
USA, Inc. and the guarantor pertaining to the Total TUA and (ii) in-house
counsel to Total LNG, USA, Inc. and Total S.A.

 

(iv) A Secretary’s Certificate from each of Chevon USA Inc. and the guarantor
pertaining to the Chevron TUA.

 

(v) An opinion of (i) Thelen, Reid and Preist, New York counsel to the EPC
Contractor, (ii) Bracewell & Patterson LLP, Texas counsel to the EPC Contractor
and (ii) in-house counsel to the EPC Contractor pertaining to the EPC Contract.

 

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(vi) Opinions of special regulatory counsel to the Borrower.

 

(o) FERC Approval. The Borrower shall have received authorization from FERC
pursuant to Section 3(a) of the NGA to site, construct and operate the Project
as a place of entry for the importation of liquefied natural gas and the Agent
shall have received certification from the Borrower, as verified by the
Independent Engineer, that all conditions therein required to be completed for
the stage of Development as of the Closing Date shall have been satisfied.

 

(p) Appointment of Process Agent; Independent Accounting Firm. Delivery of
evidence that (i) each of the Borrower, the Pledgors and the Operator has
appointed an agent in the State of New York to receive service of process under
the Financing Documents and (ii) the Borrower has appointed UHY/Mann, Frankfort,
Stein and Lipp CPAs LLC as its independent accounting firm and has authorized
such firm to communicate directly with the Agent.

 

6.02 Funding Date. The occurrence of the Funding Date and the obligation of the
Lenders to make the initial extension of credit under the Commitments is subject
to the satisfaction on such date of the conditions precedent set forth below and
in Section 6.03 in form and substance satisfactory to the Lenders, unless in
each case, waived by each Lender:

 

(a) Payment of Fees. Payment by or on behalf of the Borrower of such fees and
expenses which are payable by the Borrower on the Funding Date pursuant to
Section 2.04, Section 11.03, the Fee Letters and any other fees and expenses, if
any, that the Borrower and the Agent have agreed shall be due and payable on the
Funding Date (including the fees and expenses of legal counsel in accordance
with Section 11.03).

 

(b) Insurance Report and Insurance Advisor’s Certificate. Report from the
Insurance Advisor confirming, among other things, that the insurance policies
provided pursuant to and in accordance with Section 8.05 are in full force and
effect and the premiums due thereon have been paid and if more than 180 days
have passed since the date of issuance of Notice to Proceed (as defined in the
EPC Contract), a certificate of the Insurance Advisor, dated the Funding Date,
to the effect that no act, event or condition has occurred since the date of the
Insurance Advisor’s report provided pursuant to Section 6.01(i) that adversely
affects the information and conclusions set forth therein. The foregoing report
and certificate shall be in form and substance acceptable to the Agent.

 

(c) Independent Engineer’s Certificate. If more than 180 days have passed since
the Closing Date, a certificate dated the Funding Date confirming that no act,
event or condition has occurred since the date of the report provided pursuant
to Section 6.01(d)(iii) that would have a material affect on the findings and
conclusions set forth therein or which could reasonably be expected to have a
Material Adverse Effect.

 

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(d) Required Equity Contribution.

 

(i) The Equity Contribution Amount shall have been irrevocably paid in cash and
in full to the Borrower by way of a cash contribution from the Pledgors and
shall have been deposited into the Construction Account, and such amount shall
have been used to pay for Project Costs. Notwithstanding the previous sentence,
the Equity Contribution Amount shall be deemed contributed to the Borrower if
evidence of payment satisfactory to the Agent and the Independent Engineer of
Project Costs by or on behalf of the Borrower shall have been received by the
Agent and the Independent Engineer and the Agent and the Independent Engineer
shall have received copies of all invoices and other evidence of Project Costs
paid with the Equity Contribution Amount and such documentation shall be in form
and substance satisfactory to the Agent and Independent Engineer.

 

(ii) If the aggregate Project Costs reasonably expected to be incurred by or on
behalf of the Borrower through the Funding Date exceed the Equity Contribution
Amount, the Borrower may include in the initial borrowing request a request for
funds to be utilized for reimbursement to the Borrower or the Pledgors for the
portion of Project Costs reasonably expected to be expended by or on behalf of
the Borrower in excess of the Equity Contribution Amount. If such initial
borrowing request contains an estimate of Project Costs to be incurred between
the date of submission of such borrowing request and the Funding Date
(“Estimated Amounts”), at least two Business Days before the Funding Date the
Borrower shall provide to the Agent and the Independent Engineer copies of all
invoices and other evidence satisfactory to them that such Estimated Amounts
have been used to pay for Project Costs. The Independent Engineer shall confirm
the use of Estimated Amounts by providing the certificate attached as Exhibit
C-1 dated as of the Funding Date. If the Independent Engineer does not confirm
the use of the Estimated Amounts as of the Funding Date, the Estimated Amounts
(A) shall be deposited into the Construction Account, (B) shall not be eligible
for a Restricted Payment and (C) will be used to reduce the amount the Borrower
would otherwise be entitled to borrow in its next borrowing. For the avoidance
of doubt, this clause (ii) relates only to amounts in excess of the Equity
Contribution Amount, and nothing in this clause (ii) shall be deemed to alter
the requirement in clause (i) above that the Equity Contribution Amount be fully
and irrevocably paid in full to the Borrower prior to the Funding Date.

 

(iii) The Agent shall have received a certificate of each Pledgor executed by an
Authorized Officer of each Pledgor, in each case as of the Funding Date, stating
(A) the amount, form and dates of the portion of the Equity Contribution Amount
paid by it and (B) that such Equity Contribution Amount was made in exchange for
not less than reasonably equivalent value.

 

(iv) Without limiting items (i)-(iii) above, the Pledgors shall have irrevocably
paid $18,000,000 in cash into the Construction Account (“Adjustment Amount”).
The Adjustment Amount has been determined in anticipation of a

 

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potential change to the price index start date in Attachment EE of the EPC
Contract. Notwithstanding the foregoing, in the event that the Independent
Engineer certifies in writing that the effect of such modification to the price
index start date in Attachment EE is less than the Adjustment Amount, the
Adjustment Amount shall be reduced by the amount of the difference between the
Adjustment Amount and the Independent Engineer’s assessment of the effect of
such modification.

 

(e) [INTENTIONALLY OMITTED]

 

(f) Insurance Policies. Certificates of insurance evidencing the existence of
all insurance required to be maintained by the Borrower pursuant to Section
8.05, such certificates to be in such form and contain such information as is
specified in Section 8.05. In addition, the Borrower shall have delivered a
certificate of the Borrower signed by an Authorized Officer of the Borrower
setting forth the insurance obtained and stating that such insurance and, to its
knowledge, all insurance required to be obtained by a Material Project Party
pursuant to a Material Project Document (i) has been obtained and in each case
is in full force and effect, (ii) that such insurance materially complies with
the requirements of Section 8.05 and Schedule 8.05 and (iii) that all premiums
then due and payable on all insurance required to be obtained by the Borrower
have been paid.

 

(g) Bringdown of Legal Opinions. Bringdown opinions of counsel referred to in
Sections 6.01(n)(i), (ii) and (vi), each in substantially the same form as the
opinions delivered by such counsel pursuant to said sections on the Closing
Date.

 

(h) EPC Contractor Certificate. A certificate of an Authorized Officer of the
EPC Contractor certifying that (i) all amounts due and payable under the EPC
Contract have been paid other than those amounts payable in respect of the
current Loan and (ii) no event or condition exists which constitutes a default
by the Borrower under the EPC Contract.

 

(i) Anchor Tenant Certificates. (i) A certificate of an Authorized Officer of
each Anchor Tenant certifying that the TUA to which it is a party is in full
force and effect and (ii) a certificate of an Authorized Officer of each
guarantor of an Anchor Tenant of its obligations under a TUA certifying that
such guarantee is in full force and effect.

 

(j) ERISA. A certificate of an Authorized Officer of each Pledgor certifying
that in respect of such Pledgor or any ERISA Affiliate, no ERISA Event has
occurred and that the present value of all accumulated benefit obligations under
each Plan (based on the assumptions used for purposes of Statement of Financial
Accounting Standards No. 87) did not, as of the date of the most recent annual
financial statements of such Pledgor reflecting such amounts, exceed 10% of the
Net Worth of the Pledgor.

 

(k) Corporate Documents. Each of the documents listed in Section 6.01(c), each
certified as of a recent date.

 

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(l) Transaction Documents. An original or certified copy of each Material
Project Document or Other Project Document not previously delivered pursuant to
Section 6.01(b), each duly executed and delivered by the parties thereto.

 

6.03 Conditions Precedent to all Loans. The obligation of the Lenders to make
any Loan (including the initial extension of credit on the Funding Date but
excluding the final extension of credit on the Final Funding Date) is subject to
the satisfaction on the date of such extension of credit of the conditions
precedent set forth below in form and substance satisfactory to the Lenders,
unless in each case, waived by each Lender:

 

(a) Notice of Borrowing. The Agent shall have received from the Borrower, with a
copy for each Lender, a Notice of Borrowing conforming to the requirements of
Section 2.02 and Section 4.05.

 

(b) Independent Engineer’s Certificate. The Agent shall have received a
certificate of the Independent Engineer dated as of the date of the Notice of
Borrowing, satisfactory to the Agent, certifying (i) that the progress of
construction of the Project is in accordance with the Construction Budget and
Schedule, (ii) as to the current utilization of previous borrowings, (iii) that
the Project is reasonably expected to achieve Substantial Completion by the
Guaranteed Substantial Completion Date and (iv) as to the existence of
sufficient funds needed to achieve Final Completion, which such certificate
shall be substantially in the form of Exhibit C-1 or C-2, as applicable.

 

(c) Construction Report. The Agent shall have received the Construction Reports
contemplated in Section 8.19, substantially in the form of Exhibit G, which are
due on or before the date of the Notice of Borrowing.

 

(d) Borrowing Certificate. The Agent and the Independent Engineer shall have
received, at least five Business Days prior to the date of the Notice of
Borrowing, a Borrowing Certificate dated as of the date of the proposed Loan
which shall be substantially in the form attached as Exhibit B-1.

 

(e) Payment of Project Costs. The amount of each Loan requested by the Borrower
on the date of the Borrowing Certificate shall not exceed the sum (without
duplication) of (i) Project Costs due and to be paid on or prior to the date of
such certificate or reasonably expected to be due or incurred within the next 30
days succeeding the date of such certificate (without duplication of any other
Borrowing Certificate), (ii) the Required Debt Service Reserve Amount, if then
applicable and (iii) any Operation and Maintenance Expense to be paid on or
prior to the date of such certificate or reasonably expected to be due or
incurred within the next 30 days succeeding the date of such certificate
(without duplication of any other Borrowing Certificate); provided, that (A) no
cost overruns shall have occurred and be continuing which could reasonably be
expected to result in Project Costs in excess of funds available to pay such
Project Costs and (B) the loan proceeds to be disbursed shall be reduced in
accordance with the proviso to paragraph (f) below.

 

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(f) Evidence of Project Costs. The Agent and the Independent Engineer shall have
received (i) a copy of all monthly invoices issued under the EPC Contract and
all invoices in connection with any other Project Costs and Operation and
Maintenance Expenses which the Borrower intends to pay with such Loan and (ii)
projections of invoices expected to be received within 30 days after the date of
the applicable Borrowing Certificate under the EPC Contract and any other
Project Costs which the Borrower intends to pay with such Loan, in each case not
less than five Business Days prior to the date of the Notice of Borrowing, as
evidence of the Project Costs related to the applicable Borrowing Certificate;
provided, that the Borrower shall (A) submit evidence, satisfactory to the Agent
and certified by the Independent Engineer, demonstrating that all amounts
borrowed pursuant to the preceding Borrowing Certificate which were expended
were used to pay Project Costs or, in respect of any disputed amounts, deposited
to the Escrow Account or retained in the Construction Account pending resolution
of the dispute, (B) certify that Loan proceeds borrowed pursuant to the
preceding Borrowing Certificate and not yet expended as previously projected
shall be expended during the next 30 days or, in respect of any disputed
amounts, deposited to the Escrow Account or retained in the Construction Account
pending resolution of the dispute, as certified by the Independent Engineer or
(C) reduce the amount of the Loans requested pursuant to the current Notice of
Borrowing in an amount equal to the Loan proceeds not previously expended or, in
respect of any disputed amounts, deposited to the Escrow Account or retained in
the Construction Account pending resolution of the dispute and not contemplated
to be spent pursuant to clause (B) above; provided, that in no event shall the
borrowing be reduced below $2,000,000.

 

(g) Substantial Completion Schedule. The Agent shall have received certification
by the Borrower that the Project is reasonably expected to achieve Substantial
Completion by the Guaranteed Substantial Completion Date and that sufficient
funds exist in order to achieve Substantial Completion.

 

(h) Lien Waivers. The Agent shall have received (i) interim conditional lien
waivers executed by the EPC Contractor in respect of the current monthly invoice
and interim unconditional lien waivers in respect of all Work (as such term is
defined in the EPC Contract) completed as of the date of the previous invoice
(other than work in progress) and (ii) evidence that the EPC Contractor has
received interim conditional lien waivers in respect of the current invoices and
interim unconditional lien waivers in respect of all Work (as such term is
defined in the EPC Contract) completed as of the date of the previous invoice
(other than work in progress) from all of their Major Subcontractors and Major
Sub-Subcontractors (each as defined in the EPC Contract), which interim lien
waivers shall be satisfactory to the Agent and the Independent Engineer.

 

(i) Borrower’s Certificate. The Agent shall have received a certificate of the
Borrower signed by an Authorized Officer of the Borrower certifying that: (i)
each of the representations and warranties of the Borrower contained in Article
VII is (A) if such representation and warranty is qualified as to materiality or
by reference to the existence of a Material Adverse Effect, true and complete to
the extent of such qualification on and as of the date of such extension of
credit (both immediately prior to such extension of

 

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credit and also after giving effect to such extension of credit and to the
intended use of such extension of credit) as if made on and as of such date (or,
if stated to have been made solely as of an earlier date, as of such earlier
date) or (B) if such representation and warranty is not so qualified, true and
complete in all material respects on and as of the date of such extension of
credit (both immediately prior to such extension of credit and also after giving
effect to such extension of credit and to the intended use of such extension of
credit) as if made on and as of such date (or, if stated to have been made
solely as of an earlier date, as of such earlier date), (ii) no Default or Event
of Default has occurred and is continuing as of the date of such disbursement
and no Default or Event of Default will result from the requested disbursement
or the consummation of the transactions contemplated by the Transaction
Documents, (iii) no act, event or circumstance affecting the Borrower has arisen
that could reasonably be expected to have a Material Adverse Effect and (iv) the
Collateral is subject to the perfected first priority Lien (subject only to
Permitted Liens) and the security interest established pursuant to the Security
Documents.

 

(j) No Event of Abandonment. Confirmation that no Event of Abandonment has
occurred, provided, that if an Event of Abandonment has occurred that such Event
of Abandonment has not otherwise resulted in an Event of Default and if the
Borrower satisfies the other conditions set forth in this Article VI, the
Borrower will be able to request drawdowns only for the purpose of paying
Project Costs incurred prior to the Event of Abandonment and to satisfy interest
and other Secured Obligations.

 

(k) Title Policy Endorsement. A continuation report of and an endorsement to the
Title Policy to the date of such extension of credit in the form reasonably
approved by the Agent conforming to the pending disbursement requirements set
forth in Exhibit D and setting forth no additional exceptions (including without
limitation Survey exceptions) except those approved by the Agent and, on the
Funding Date, an endorsement to the Title Policy (i) deleting therefrom any
exception for reservations of minerals, oil and gas leases, seismic permits or
other mineral interests, or (ii) modifying any such existing exceptions in the
Title Policy to indicate that the rights of the holders of such mineral
interests to use the surface of the Site are limited as provided in the Noble
Option Agreement.

 

(l) Absence of Default; Material Adverse Effect. No Default or Event of Default
shall have occurred and be continuing. There has been no event or occurrence
which has had or could reasonably be expected to have a Material Adverse Effect.

 

6.04 Final Funding Date. The occurrence of the Final Funding Date and the
obligation of the Lenders to make the final extension of credit under the
Commitment is subject to the satisfaction on such date of the conditions
precedent set forth below in form and substance satisfactory to the Lenders
unless, in each case, waived by each Lender:

 

(a) Payment and Evidence of Project Costs. The amount of the final Loan
requested by the Borrower on the date of the Final Borrowing Certificate shall
not exceed the sum of (i) Project Costs, if any, which are due and to be paid on
or prior to the date of such certificate and which are reasonably expected to be
due or incurred from the date of

 

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such certificate to Final Completion including Project Costs which are
reasonably projected to be incurred for punch list items and payment retainage
and disputed payments in each case as contemplated in the Construction Budget
and Schedule (all as confirmed by the Independent Engineer) (without duplication
of any other Borrowing Certificate), (ii) the Required Debt Service Reserve
Amount, if then applicable, and (iii) an amount equal to the Restricted Payment,
if any, permitted under Section 8.12(g). In respect of Project Costs, if any,
due and to be paid within the next 30 days succeeding the date of the Final
Borrowing Certificate, the Agent and the Independent Engineer shall have
received a copy of all monthly invoices issued under the EPC Contract and
invoices in connection with any other Project Costs which the Borrower intends
to pay with such final Loan; provided, that the Borrower shall (A) submit
evidence, satisfactory to the Agent and certified by the Independent Engineer,
demonstrating that all amounts borrowed pursuant to the preceding Borrowing
Certificate which were expended were used to pay Project Costs or, in respect of
any disputed amounts, deposited to the Escrow Account or retained in the
Construction Account pending resolution of the dispute, (B) certify that Loan
proceeds borrowed pursuant to the preceding Borrowing Certificate and not yet
expended as previously projected shall be expended during the next 30 days or,
in respect of any disputed amounts, deposited to the Escrow Account or retained
in the Construction Account pending resolution of the dispute, as certified by
the Independent Engineer or (C) reduce the amount of the Loans requested
pursuant to the current Notice of Borrowing in an amount equal to the Loan
proceeds not previously expended or, in respect of any disputed amounts,
deposited to the Escrow Account or retained in the Construction Account pending
resolution of the dispute and not contemplated to be spent pursuant to clause
(B) above. In respect of punch list items, the Agent and the Independent
Engineer shall have received certification from the Borrower that the
projections of punch list items expected to be paid with the final Loan shall be
in accordance with the Construction Budget and Schedule. In respect of payment
retainage specified in the EPC Contract and any payment dispute in connection
with such EPC Contract, the Agent and the Independent Engineer shall have
received copies of documentation and such documentation shall have been
confirmed by the Independent Engineer prior to payment of such retainage.

 

(b) Final Borrowing Certificate. The Agent and the Independent Engineer shall
have received at least five Business Days prior to the date of the Notice of
Borrowing, a Final Borrowing Certificate dated as of the date of the proposed
borrowing, which shall be substantially in the form of the attached Exhibit B-2.

 

(c) Notice of Borrowing. The Agent shall have received from the Borrower with a
copy for each Lender, a Notice of Borrowing conforming to the requirements of
Sections 2.02 and 4.05.

 

(d) Independent Engineer’s Certificate. The Agent shall have received a
certificate of the Independent Engineer dated as of the date of the final Notice
of Borrowing, satisfactory to the Agent, certifying (i) as to the current
utilization of previous borrowings, (ii) that the Project has achieved
Substantial Completion and (iii) that sufficient funds are on deposit in the
Collateral Accounts to, and the amount of the proposed final borrowing is
sufficient to, achieve Final Completion, which such certificate shall be
substantially in the form of Exhibit C-3.

 

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(e) Construction Report. The Agent shall have received the Construction Reports
contemplated in Section 8.19 substantially in the form of Exhibit G, which are
due on or before the date of the Notice of Borrowing.

 

(f) Lien Waivers. The Agent shall have received (i) interim conditional lien
waivers executed by the EPC Contractor in respect of the current monthly invoice
and interim unconditional lien waivers in respect of all Work (as such term is
defined in the EPC Contract) completed as of the date of the previous invoice
(other than work in progress) and (ii) evidence that the EPC Contractor has
received interim conditional lien waivers in respect of the current monthly
invoice and interim unconditional lien waivers in respect of all Work (as such
term is defined in the EPC Contract) completed as of the date of the previous
invoice (other than work in progress) from all of the Major Subcontractors and
Major Sub-Subcontractors (each as defined in the EPC Contract), which interim
lien waivers shall be satisfactory to the Agent and the Independent Engineer.

 

(g) Borrower’s Certificate. The Agent shall have received a certificate of the
Borrower signed by an Authorized Officer of the Borrower certifying that: (i)
each of the representations and warranties of the Borrower contained in Article
VII is (A) if such representation and warranty is qualified as to materiality or
by reference to the existence of a Material Adverse Effect, true and complete to
the extent of such qualification on and as of the date of such extension of
credit (both immediately prior to such extension of credit and also after giving
effect to such extension of credit and to the intended use of such extension of
credit) as if made on and as of such date (or, if stated to have been made
solely as of an earlier date, as of such earlier date) or (B) if such
representation and warranty is not so qualified, true and complete in all
material respects on and as of the date of such extension of credit (both
immediately prior to such extension of credit and also after giving effect to
such extension of credit and to the intended use of such extension of credit) as
if made on and as of such date (or, if stated to have been made solely as of an
earlier date, as of such earlier date), (ii) no Default or Event of Default has
occurred and is continuing as of the date of such disbursement and will not
result from the requested disbursement or the consummation of the transactions
contemplated by the Transaction Documents, (iii) no act, event or circumstance
affecting the Borrower has arisen that could reasonably be expected to have a
Material Adverse Effect and (iv) the Collateral is subject to the perfected
first priority Lien (subject only to Permitted Liens) and the security interest
established pursuant to the Security Documents.

 

(h) No Event of Abandonment. Confirmation that no Event of Abandonment has
occurred.

 

(i) Title Policy Endorsement. A continuation report of and an endorsement to the
Title Policy to the date of such extension of credit in the form reasonably
approved by the Agent conforming to the pending disbursement requirements set
forth in Exhibit D and setting forth no additional exceptions (including without
limitation Survey exceptions) except those approved by the Agent.

 

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(j) Absence of Default; Material Adverse Effect. No Default or Event of Default
shall have occurred and be continuing. There shall have been no event or
occurrence which has had or could reasonably be expected to have a Material
Adverse Effect.

 

(k) Term Conversion Date. The Term Conversion Date shall have occurred.

 

ARTICLE VII

 

REPRESENTATIONS AND WARRANTIES

 

The Borrower represents and warrants to the Lenders that:

 

7.01 Existence. The Borrower is a limited partnership duly formed, validly
existing and in good standing under the laws of the State of Delaware and is
duly qualified to do business as a foreign partnership in the State of Louisiana
and in all other places where necessary in light of the business it conducts and
intends to conduct and the Property it owns and intends to conduct and own and
in light of the transactions contemplated by the Transaction Documents, except
for where the failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect. No filing, recording, publishing or other act by
the Borrower that has not been made or done is necessary in connection with the
existence or good standing of the Borrower.

 

7.02 Financial Condition. The financial statements of the Borrower, Pledgors and
Operator furnished to the Agent (a) pursuant to Section 6.01(e) and (b) pursuant
to Section 8.01 (as applicable), fairly present in all material respects the
financial condition of such Person as of the date thereof, all in accordance
with GAAP (subject to normal year-end adjustments). As of such date of such
financial statements, neither the Borrower, the Pledgors nor the Operator has
any material contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments which are required by GAAP to be disclosed in the foregoing
financial statements, except as referred to or reflected or provided for in such
financial statements or as arising solely from the execution and delivery of the
Transaction Documents. There has been no material adverse change in the
financial condition, operations or business of the Borrower, the Pledgors or the
Operator from that set forth in such financial statements as of the date
thereof.

 

7.03 Action. The Borrower has full limited partnership power, authority and
legal right to execute and deliver, and to perform its obligations under, the
Transaction Documents to which the Borrower is a party. The execution, delivery
and performance by the Borrower of each of the Transaction Documents to which it
is a party have been duly authorized by all necessary limited partnership action
on the part of the Borrower. Each of the Transaction Documents to which the
Borrower is a party has been duly executed and delivered by the Borrower and is
in full force and effect and constitutes the legal, valid and binding obligation
of the Borrower, enforceable against the Borrower in accordance with its terms,
except as limited

 

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by general principles of equity and bankruptcy, insolvency and similar laws. To
the Borrower’s Knowledge, (a) each Pledgor and each Material Project Party has
the full power, authority and legal right to execute and deliver, and to perform
its obligations under, the Transaction Documents to which such Person is a
party, (b) the execution, delivery and performance by each Pledgor and each
Material Project Party of each of the Transaction Documents to which it is a
party and the consummation of the transactions contemplated thereby have been
duly authorized by all necessary corporate or partnership action on the part of
such Person and (c) each of the Transaction Documents to which any such Person
is a party has been duly executed, and delivered by such Person and constitutes
the legal, valid and binding obligation of such Person enforceable against such
Person in accordance with its terms, except as such enforceability may be
limited by general principles of equity and bankruptcy, insolvency and similar
laws.

 

7.04 No Breach. The execution, delivery and performance by the Borrower and, to
the Borrower’s Knowledge, each Pledgor and each Material Project Party, of each
of the Transaction Documents to which it is or is intended to be a party do not
and will not: (a) require any consent or approval of any Person that has not
been obtained and remains in full force and effect (other than Government
Approvals that are not required to be obtained and to be in full force and
effect for the then relevant stage of the Development), (b) violate any
provision of any Government Rule or Government Approval applicable to the
Borrower or the Project, (c) violate, result in a breach of or constitute a
default under any Transaction Document to which the Borrower is a party or by
which it or its Property may be bound or affected or (d) result in, or create
any Lien (other than a Permitted Lien) upon or with respect to any of the
Properties now owned or hereafter acquired by the Borrower, other than as to
Non-Material Project Documents where failing to obtain such consent or approval,
or such violation, or creation of lien could not reasonably be expected to
result in a Material Adverse Effect.

 

7.05 Government Approvals; Government Rules.

 

(a) All material Government Approvals for the Development (including sale of
Services) that have been obtained by the Borrower or for the benefit of the
Project by third parties as of the Closing Date are set forth on Schedule
7.05(a). Except as otherwise noted on Schedule 7.05(a), all Government Approvals
set forth on Schedule 7.05(a) have been duly obtained, were validly issued, are
in full force and effect, and are not the subject of any pending appeal and all
applicable appeal periods have expired (except Government Approvals which do not
have limits on appeal periods under Government Rules or appeals which could not
reasonably be expected to have a Material Adverse Effect), are held in the name
of the Borrower or such third party as indicated on such Schedule 7.05(a) and
are free from conditions or requirements which (i) could reasonably be expected
to have a Material Adverse Effect or (ii) the Borrower or such third party (as
applicable) does not expect to be able to satisfy on or prior to the
commencement of the relevant stage of Development, except to the extent that a
failure to so satisfy such condition or requirement could not reasonably be
expected to have a Material Adverse Effect. No Material Adverse Effect could
reasonably be expected to result from any such Government Approvals being held
by or in the name of Persons other than the Borrower.

 

(b) All material Government Approvals not obtained as of the Closing Date but
necessary for the Development (including the sale of Services) to be obtained by
the Borrower or for the benefit of the Project by third parties after the
Closing Date are set forth on Schedule 7.05(b). No Material Adverse Effect could
reasonably be expected to result from any such Government Approvals being
obtained in the name of Persons other than the Borrower.

 

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(c) All material Government Approvals required to be held by the Borrower or the
third party indicated on Schedule 7.05(b) for the current stage of Development
(as identified by the dates on Schedule 7.05(b) for which such Government
Approvals are reasonably projected to be required), have been duly obtained and
validly issued, are in full force and effect, are not the subject of any pending
or threatened appeal (except appeals which, could not reasonably be expected to
have a Material Adverse Effect), are held in the name of the Borrower or such
third party and are free from conditions or requirements which (i) could
reasonably be expected to have a Material Adverse Effect or (ii) the Borrower or
such third party (as applicable) does not expect to be able to satisfy on or
prior to the commencement of the relevant stage of Development, except to the
extent that a failure to so satisfy such condition or requirement could not
reasonably be expected to have a Material Adverse Effect.

 

(d) The Borrower reasonably believes that any material Government Approvals
which have not been obtained by the Borrower or the relevant third party as of
the Funding Date, but which shall be required to be obtained in the future by
the Borrower or such third party for the Development, shall be obtained in due
course on or prior to the commencement of the appropriate stage of Development
for which such Government Approval would be required and shall not contain any
condition or requirements, the compliance with which could reasonably be
expected to result in a Material Adverse Effect or which the Borrower or the
relevant third party (as the case may be) does not expect to satisfy on or prior
to the commencement of the appropriate stage of Development, except to the
extent that a failure to so satisfy such condition or requirement could not
reasonably be expected to have a Material Adverse Effect. The Project, if
constructed in accordance with the Construction Budget and Schedule and
otherwise Developed as contemplated by the Material Project Documents, will
conform to and comply with all covenants, conditions, restrictions and
reservations in the applicable Government Approvals and all applicable
Government Rules, except to the extent that a failure to so conform or comply
could not reasonably be expected to have a Material Adverse Effect.

 

(e) The Borrower is in compliance in all material respects with, all Government
Rules and Government Approvals applicable to the Borrower.

 

7.06 Proceedings. There is (a) no action, suit or proceeding at law or in equity
or by or before any Government Authority or arbitral tribunal now pending or, to
the Borrower’s Knowledge, threatened against the Borrower or the Project or with
respect to any Material Project Document or Government Approval related to the
Project and (b) no existing default by the Borrower under any applicable order,
writ, injunction or decree of any Government Authority or arbitral tribunal,
which in the case of clause (a) could reasonably be expected to have a Material
Adverse Effect.

 

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7.07 Environmental Matters. Except as otherwise specified on Schedule 7.07 to
this Agreement:

 

(a) The Project has (i) at all times complied and is in compliance with all
Environmental Laws and all Government Approvals required under any Environmental
Laws and (ii) obtained and maintained in full force and effect all Government
Approvals required for the Project under Environmental Laws, except for any
non-compliance or failure to obtain or maintain in full force and effect that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.

 

(b) There are no facts, circumstances, conditions or occurrences regarding the
Project that could reasonably be expected (i) to form the basis of a material
Environmental Claim or give rise to a material liability or material obligation
under any Environmental Law, with respect to the Project, or against the Project
or the Borrower, that individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect or (ii) to cause the Project to be
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law that would materially hinder or restrict the
Borrower or any other Person from operating the Project as intended under the
Material Project Documents (excluding restrictions on the transferability of
Government Approvals upon the transfer of ownership of assets subject to such
Government Approval).

 

(c) There are (i) no past Environmental Claims, (ii) no pending Environmental
Claims and (iii) to the Borrower’s Knowledge, no threatened Environmental
Claims, in each case arising with respect to the Project against the Project or
the Borrower, that individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect.

 

(d) Hazardous Materials have not at any time been Released at, on, under or from
the Project other than in compliance at all times with all applicable
Environmental Laws or so as not to give rise to a material Environmental Claim
or a material liability or obligation under any Environmental Law.

 

(e) There have been no material environmental investigations, studies, audits,
reviews or other analyses relating to environmental site conditions that have
been conducted by, or which are in the possession of the Borrower in relation to
the Project which have not been provided to the Agent and the Lenders.

 

7.08 Taxes. The Borrower has timely filed or caused to be filed all tax returns
that are required to be filed, and has paid all taxes shown to be due and
payable on such returns or on any assessments made against the Borrower or any
of its Property and all other Taxes imposed on the Borrower or its Property by
any Government Authority (other than Taxes the payment of which are not yet due
or which are being Contested and other than Taxes the nonpayment of which could
not reasonably be expected to have a Material Adverse Effect), and no tax Liens
(other than Permitted Liens) have been filed and no claims are being asserted
with respect to any such Taxes.

 

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7.09 Tax Status. The Borrower is a limited partnership, and is separate from its
owner and not an association taxable as a corporation.

 

7.10 ERISA; ERISA Event.

 

(a) The Borrower does not employ any employees and does not sponsor, maintain,
administer, contribute to, participate in, or have any obligation to contribute
to, or any liability under, any Plan or Multiemployer Plan nor has the Borrower
established, sponsored, maintained, administered, contributed to, participated
in, or had any obligation to contribute to or liability under any Plan or
Multiemployer Plan.

 

(b) No ERISA Event has occurred or is reasonably expected to occur that, when
taken together with all other such ERISA Events for which liability is
reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect. The present value of all accumulated benefit
obligations under each Plan (based on the assumptions used for purposes of
Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent annual financial statements reflecting such amounts, exceed 10%
of the Net Worth of any Pledgor.

 

7.11 Nature of Business. The Borrower has not engaged in any business other than
the Development as contemplated by the Transaction Documents.

 

7.12 Security Documents. The Borrower owns good and valid title to all of its
property, free and clear of all Liens other than Permitted Liens. The provisions
of the Security Documents are effective to create, in favor of the Collateral
Agent for the benefit of the Secured Parties, a legal, valid and enforceable
Lien on and security interest in all of the Collateral purported to be covered
thereby, and all necessary recordings and filings have been made in all
necessary public offices (or adequate provision therefor has been made in a
manner acceptable to the Lenders), and all other necessary and appropriate
action has been taken, so that each such Security Document creates a perfected
Lien on and security interest in all right, title and interest of the Borrower
in the Collateral covered thereby, prior and superior to all other Liens other
than Permitted Liens and all necessary and appropriate consents to the creation,
perfection and enforcement of such Liens have been obtained from each of the
parties to the Material Project Documents and the Other Project Documents.

 

7.13 Subsidiaries. The Borrower has no Subsidiaries.

 

7.14 Status.

 

(a) The Borrower is not (i) an “investment company” or a company “Controlled” by
an “investment company” within the meaning of the Investment Company Act of 1940
or an “investment advisor” within the meaning of the Investment Company Act of
1940 or (ii) a “holding company”, “subsidiary company” or an “affiliate” of a
“holding company” as defined in or subject to regulation under PUHCA.

 

(b) None of the Borrower, the Agent, the Collateral Agent or the Lenders, solely
by virtue of the execution, delivery and performance of, or its consummation of
the transactions contemplated by Financing Documents shall be or become: (i) a
“gas utility

 

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company”, a “public-utility company”, a “holding company” or either a
“subsidiary company” or an “affiliate” of either a “registered holding company”,
as such terms are defined in PUHCA, or subject to regulation under PUHCA, except
regulation pursuant to Section 9(a)(2) thereof, (ii) a “natural-gas company” as
such terms are defined in the NGA or subject to regulation pursuant to the NGA,
(iii) subject to regulation under the law of the State of Louisiana with respect
to rates, or subject to material financial and organizational regulation under
such law or (iv) subject to regulation under the law of the State of Louisiana
as a “public utility”, a “gas utility”, a “public service corporation” or other
similar term.

 

7.15 Material Project Documents; Licenses.

 

(a) The Project Documents in effect on the Closing Date and the Additional
Project Documents (together with each Ancillary Document related thereto)
entered into in accordance with this Agreement, constitute and include all
material contracts and agreements relating to the Development and, other than
the Financing Documents, the Borrower is not and will not be a party to any
contract or agreement that is not a Project Document that it is permitted to
enter into pursuant to the terms hereof. There are no material contracts,
services, materials or rights (other than Government Approvals) required for the
current stage of the Development other than those granted by, or to be provided
to the Borrower pursuant to, the Material Project Documents, the Other Project
Documents and the Financing Documents. The Agent has received a certified copy
of each Material Project Document and Other Project Document as in effect on the
date of its delivery to the Agent and each amendment, modification or supplement
to each such Project Document. None of the Project Documents has been amended,
modified, supplemented, transferred or assigned, except as permitted by this
Agreement or has been materially Impaired except, with respect to Non-Material
Project Documents or Other Project Documents, such amendments, modifications or
supplements (and, with respect to Non-Material Project Documents, such transfers
or assignments) which could not reasonably be expected to have a Material
Adverse Effect, and all of the Project Documents (other than those that are not
required to be entered into pursuant to this Agreement as of the date of the
making of this representation or that have been cancelled or terminated as
permitted under this Agreement) are in full force and effect except, with
respect to Non-Material Project Documents or Other Project Documents, such
cancellations or terminations or failures to be in full force and effect which
could not reasonably be expected to have a Material Adverse Effect. All
conditions precedent to the obligations of the Borrower under the Material
Project Documents have been satisfied or waived except for such conditions
precedent which need not and cannot be satisfied until a later stage of
Development. The Borrower has not given or received a notice of default under
any Project Document except, with respect to Non-Material Project Documents or
Other Project Documents, those which could not reasonably be expected to have a
Material Adverse Effect and, to the Borrower’s Knowledge, no Project Party is in
default of any material covenant or material obligation set forth in any Project
Document and no condition has occurred that would become such a default with the
giving of notice or lapse of time except, with respect to Non-Material Project
Documents or Other Project Documents, those conditions which could not
reasonably be expected to have a Material Adverse Effect.

 

(b) All material permits, licenses, trademarks, patents or agreements with
respect to the usage of technology that are necessary for the current stage of
the Development have been obtained, are final and are in full force and effect,
and the use thereof by the Borrower

 

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does not infringe upon the rights of any other person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The Borrower reasonably believes
that all such permits, licenses, trademarks, patents or agreements necessary for
all future stages of the Development will be timely obtained in the ordinary
course and will not be subject to terms or conditions which could reasonably be
expected to result in a Material Adverse Effect.

 

(c) Except as listed on Appendix D or as otherwise permitted pursuant to Section
8.24, the Borrower has not entered into any agreements with any Pledgor or any
of its Affiliates other than transactions entered into in the ordinary course of
business, on terms no less favorable to the Borrower than the Borrower would
obtain in a comparable arm’s length transaction with a Person that is not an
Affiliate of the Borrower or a Pledgor.

 

7.16 Margin Stock. No part of the proceeds of any Loan will be used for the
purpose, whether immediate, incidental or ultimate, of buying or carrying any
Margin Stock or to extend credit to others for such purpose.

 

7.17 Disclosure. The Borrower has disclosed to the Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect.
Neither this Agreement nor any Financing Document nor any reports, financial
statements, certificates or other written information furnished to the Lenders
by or on behalf of the Borrower in connection with the negotiation of, and the
extension of credit under, this Agreement and the other Financing Documents and
the transactions contemplated by the Material Project Documents or delivered to
the Agent or the Lenders hereunder or thereunder (as modified or supplemented by
other information so furnished), when taken as a whole, contains any untrue
statement of a material fact pertaining to the Borrower or the Project or omits
to state a material fact pertaining to the Borrower or the Project necessary to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading, in any material respect; provided,
that with respect to any projected financial information, forecasts, estimates,
or forward-looking information, including that contained in the Construction
Budget and Schedule and the Base Case Forecast, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time and the Borrower makes no representation as to the
actual attainability of any projections set forth in the Base Case Forecast, the
Construction Budget and Schedule or any such other items listed in this
sentence. Without limiting the generality of the foregoing, no representation or
warranty is made by the Borrower as to any information or material provided to
the Borrower, the Agent or the Lenders by the Independent Engineer or the
Insurance Advisor (except to the extent such information or material originated
with the Borrower).

 

7.18 Insurance. All insurance required to be obtained by the Borrower has been
obtained and is in full force and effect and materially complies with Section
8.05 and Schedule 8.05, and all premiums then due and payable on all such
insurance have been paid, and to the Borrower’s Knowledge, all insurance
required to be obtained by a Material Project Party pursuant to a Material
Project Document has been obtained and is in full force and effect and
materially complies with Section 8.05 and Schedule 8.05.

 

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7.19 Indebtedness; Investments. The Borrower (a) does not have any Investments
except Permitted Investments and (b) has not incurred any Indebtedness other
than Permitted Indebtedness.

 

7.20 No Material Adverse Effect. To the Borrower’s Knowledge, there are no facts
or circumstances which, individually or in the aggregate, have resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

7.21 Absence of Default. No Default or Event of Default has occurred and is
continuing.

 

7.22 Ownership. As of the Closing Date, the Borrower is an indirect wholly-owned
Subsidiary of Cheniere Energy, Inc.

 

7.23 Property. All material real and personal property rights necessary for the
current stage of Development have been obtained by the Borrower and are in good
standing.

 

7.24 No Force Majeure. No event of force majeure or other event or condition
exists which (a) permits any Material Project Party to cancel or terminate its
performance under any Material Project Documents to which it is a party in
accordance with the terms thereof or (b) permits any Material Project Party to
suspend its performance under any Material Project Document to which it is a
party in accordance with the terms thereof, which suspension could reasonably be
expected to have a Material Adverse Effect or (c) which could excuse any such
party from liability for nonperformance under any Material Project Document to
which it is a party, which excuse from liability could reasonably be expected to
have a Material Adverse Effect.

 

7.25 Ranking. The Financing Documents (other than the Consents and Agreements)
and the Secured Obligations evidenced thereby are and will at all times be
secured obligations of the Borrower, and rank and will at all times rank senior
in right of payment and otherwise at least pari passu with all other
Indebtedness of the Borrower (other than Indebtedness permitted by Section
8.16(c)), whether now existing or hereafter outstanding.

 

7.26 Labor Matters. No labor problems or disturbances in connection with the
Borrower or the Project exist or, to the Borrower’s Knowledge, are threatened
which could reasonably be expected to have a Material Adverse Effect.

 

7.27 Operating Arrangements. The management, administration and
operating-related responsibilities delegated to the Manager and the Operator
pursuant to the Management Services Agreement and the O&M Agreement,
collectively, constitute all of the management, administration and
operating-related obligations, respectively, of the Borrower pursuant to the
Transaction Documents and the Manager and Operator are capable of fulfilling and
are bound to fulfill such obligations pursuant to the terms of the Management
Services Agreement and the O&M Agreement.

 

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ARTICLE VIII

 

COVENANTS

 

The Borrower covenants and agrees with the Lenders and the Agent that until the
Termination Date:

 

8.01 Reporting Requirements. The Borrower shall deliver to the Agent (in
sufficient numbers for the Agent and each of the Lenders):

 

(a) as soon as available and in any event within 60 days after the end of each
of the first three quarterly fiscal periods of each fiscal year of the Borrower,
(i) unaudited statements of income and cash flows of the Borrower for such
period and for the period from the beginning of the respective fiscal year to
the end of such period, (ii) the related balance sheet as at the end of such
period, setting forth in each case in comparative form the corresponding figures
for the corresponding period in the preceding fiscal year and (iii) commencing
with the second quarterly fiscal period of the Borrower following the Term
Conversion Date, a compliance certificate executed by the treasurer or the chief
financial officer of the Borrower setting forth the calculation of the Debt
Service Coverage Ratio for such period;

 

(b) as soon as available and in any event within 120 days after the end of each
fiscal year of the Borrower, audited statements of income, partners’ equity and
cash flows of the Borrower for such year and the related balance sheets as at
the end of such year, setting forth in each case, in comparative form the
corresponding figures for the preceding fiscal year, and accompanied by (i) an
opinion of UHY/Mann, Frankfort, Stein and Lipp CPAs LLC or such other
independent certified public accountants of recognized national standing as are
reasonably acceptable to the Majority Lenders, which opinion shall state that
such financial statements fairly present in all material respects the financial
condition and results of operations of the Borrower as at the end of, and for,
such fiscal year in accordance with GAAP (subject to normal year-end audit
adjustments) and shall state (for each fiscal year other than 2004)whether any
knowledge of any Default or Event of Default was obtained during the course of
their examination of such financial statements and (ii) commencing with the
first fiscal year of the Borrower following the Term Conversion Date, a
compliance certificate executed by the treasurer or the chief financial officer
of the Borrower setting forth the calculation of the Debt Service Coverage Ratio
for such period;

 

(c) as soon as practicable and in any event, unless otherwise specified, within
ten Business Days after the Borrower obtains actual knowledge of any of the
following, give written notice to the Agent of: (i) the occurrence of any
Default or Event of Default and describing any action being taken or proposed to
be taken with respect thereto, (ii) the occurrence of any casualty, loss or
damage, or condemnation or eminent domain taking, with respect to the Project in
excess of $10,000,000 in value or any series of such events or circumstances
during any 12-month period in excess of $10,000,000 in value in the aggregate,
(iii) any litigation or similar proceeding affecting the Project or the Borrower
in which the amount involved is in excess of $10,000,000, (iv) any dispute,

 

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litigation, investigation or proceeding which may exist at any time between any
Government Authority and the Borrower to the extent such dispute, litigation,
investigation or proceeding involves the Project and could reasonably be
expected to result in a Material Adverse Effect, (v) any written notice of the
occurrence of any event giving rise (or that could reasonably be expected to
give rise) to a claim under any insurance policy maintained with respect to the
Project with copies of any material document relating thereto that are in the
possession of the Borrower, (vi) notice of the occurrence of any force majeure
event (together with a description of its expected duration) or (vii) any event
or circumstance that could reasonably be expected to result in a material
liability of the Borrower under ERISA or under the Internal Revenue Code with
respect to any pension plan;

 

(d) promptly upon (i) delivery to another Material Project Party pursuant to a
Material Project Document, copies of all material notices or other material
documents delivered to such Material Project Party by the Borrower and (ii) such
documents becoming available, copies of all material notices or other material
documents received by the Borrower pursuant to any Material Project Document
(including any notice or other document relating to a failure by the Borrower to
perform any of its covenants or obligations under such Material Project
Document, termination of a Material Project Document or a force majeure event
under a Material Project Document) other than notices or other documents
delivered in the ordinary course of administration of such Agreements;

 

(e) at the time it furnishes each set of financial statements pursuant to
paragraph (a) or (b) above, a certificate of the Borrower executed by an
Authorized Officer of the Borrower stating that no Default has occurred and is
continuing (or, if any Default has occurred and is continuing, describing the
same in reasonable detail and describing the action that the Borrower has taken
and proposes to take with respect to such Default);

 

(f) promptly after receipt thereof, a copy of each material statement or report
received by the Borrower from the Operator pursuant to the O&M Agreement; and

 

(g) promptly after the occurrence of an ERISA Event, written notice of the
occurrence of such ERISA Event.

 

8.02 Maintenance of Existence, Etc.

 

(a) The Borrower shall preserve and maintain its legal existence as a Delaware
limited partnership and all of its licenses, rights, privileges and franchises
necessary for the Development.

 

(b) The Borrower shall at all times maintain its status as a partnership for
U.S. federal income tax purposes. All of the owners of interests in the Borrower
that are treated as equity for U.S. federal income tax purposes will be United
States persons within the meaning of Code section 7701(a)(30).

 

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8.03 Compliance with Government Rules, Etc.

 

(a) The Borrower shall comply in all material respects with all applicable
Government Rules and shall from time to time obtain and renew, and shall comply
in all material respects with, Government Approvals as are or in the future
shall be necessary for the Development under applicable Government Rules.

 

(b) Except as provided in paragraph (c) below, the Borrower shall not petition,
request or take any legal or administrative action that seeks to amend,
supplement or modify any Government Approval in any material respect unless (i)
the Borrower shall have furnished to the Agent a copy (certified by an
Authorized Officer of the Borrower) of the proposed amendment, supplement or
modification and a description of the actions that the Borrower proposes to take
and (ii) such amendment, supplement or modification could not reasonably be
expected to result in a Material Adverse Effect. The Borrower shall promptly
upon receipt or publication furnish a copy (certified by an Authorized Officer
of the Borrower) of each such amendment, supplement or modification to any such
Government Approval to the Agent.

 

(c) If any Impairment of any Government Approval of the Borrower or related to
the Project which could reasonably be expected to have a Material Adverse Effect
shall occur, then the Borrower shall either (i) within 60 days obtain a
replacement Government Approval on terms and conditions that are in all material
respects the same as those of such Impaired Government Approval or (ii) within
60 days, take such lawful action as shall be necessary so that (A) such
Impairment does not become final and non-appealable or otherwise irrevocable,
(B) the effectiveness of such Impairment is postponed or (C) such Impairment is
revoked, amended or modified so as to eliminate the reasonable possibility of
such Material Adverse Effect.

 

(d) The Borrower shall issue such notices of transfer and shall take such other
actions as the Agent, acting for the benefit of itself and the Lenders,
reasonably requests, without undue expense or delay, to secure for the Agent and
the Lenders the benefit of each Government Approval related to the Project set
forth on Schedule 7.05(a) and, when obtained, Schedule 7.05(b) upon the exercise
of remedies under the Security Documents.

 

(e) The Borrower shall at all times obtain and maintain in full force and effect
all permits, licenses, trademarks, patents, agreements or Government Approvals
necessary for the construction, operation and maintenance of the Project, except
where failure to maintain such permits, licenses, trademarks, patents,
agreements or Government Approvals could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

8.04 Environmental Compliance.

 

(a) The Borrower shall (i) comply in all material respects with all
Environmental Laws, including, without limitation, any Government Approvals
required under any Environmental Laws and the environmental compliance and
reporting requirements in connection with the FERC authorization referred to in
Section 6.01(o) and (ii) conduct and complete any investigation, study, sampling
and testing, and undertake any corrective, cleanup,

 

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removal, response, remedial or other action necessary to identify, report,
remove and clean up all Hazardous Materials Released at, on, in, under or from
the Project, to the extent required by and in accordance with the requirements
of all applicable Environmental Laws.

 

(b) The Borrower shall deliver to the Agent (with sufficient copies for each
Lender) (i) notice of (A) any pending or threatened material Environmental Claim
with respect to the Project and (B) information that could reasonably be
expected to lead to a material Environmental Claim, in either case promptly upon
obtaining knowledge thereof, describing the same in reasonable detail, together
with such notice, or as soon thereafter as possible, a description of the action
that the Borrower has taken or proposes to take with respect thereto and,
thereafter, from time to time, such detailed reports with respect thereto as the
Agent or any Lender may reasonably request and (ii) promptly upon their becoming
available, copies of written communications with any Government Authority
relating to any such material Environmental Claim and any such other matter as
is reported to the Agent or the Lenders pursuant to this Section 8.04(b).

 

(c) The Borrower shall not Release, or permit the Release of Hazardous Materials
at the Project in violation of applicable Government Rules and Government
Approvals or so as to give rise to a material Environmental Claim or a material
liability or obligation under any Environmental Law.

 

8.05 Insurance; Events of Loss.

 

(a) Insurance Maintained by the Borrower, the EPC Contractor, the Anchor Tenants
and the Operator. The Borrower shall (i) procure at its own expense and maintain
in full force and effect and (ii) cause the EPC Contractor, the Anchor Tenants
(to the extent applicable), the Operator and each other Material Project Party
to procure at such Person’s own expense and maintain in full force and effect,
the insurance set forth on Schedule 8.05 to this Agreement and any insurance
required to be maintained by such Person pursuant to its applicable Project
Document.

 

(b) Restoration Prior to Substantial Completion. Subject to Section 4.08 of the
Collateral Agency Agreement, amounts to be made available to the Borrower from
the Insurance Proceeds Account for Restoration following any Event of Loss shall
be remitted to or as directed by the Borrower by the Collateral Agent to be used
for Restoration in the event that the Net Available Amount for each Event of
Loss is equal to or greater than $5,000,000 if the Independent Engineer shall
have delivered to the Agent a certificate to the effect that the sum of (i) the
Net Available Amount deposited in the Insurance Proceeds Account plus (ii) the
amount of Loss Proceeds already paid to the EPC Contractor plus (iii) other
amounts deposited in the Insurance Proceeds Account by any Pledgor or other
Persons is sufficient (together with all other monies reasonably expected to be
available to the Borrower as determined by the Agent in consultation with the
Independent Engineer, including amounts available to be drawn under this
Agreement), in the reasonable opinion of the Independent Engineer, to complete
such Restoration and to achieve Substantial Completion in accordance with the
Construction Budget and Schedule and the Borrower’s obligations under the TUAs
then in effect, provided, that if the Independent Engineer is unable to provide
such a certificate, such Net Available Amounts may be used for Restoration upon
receipt of written consent of the Majority Lenders (such consent to

 

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be given or withheld at the sole discretion of the Majority Lenders). Amounts
made available to the Borrower under this Section 8.05(b) shall only be utilized
for Restoration and, if not so utilized within 30 days of receipt thereof, shall
be used to prepay the Loans.

 

(c) Restoration Following Substantial Completion.

 

(i) Subject to Section 4.08 of the Collateral Agency Agreement, amounts to be
made available to the Borrower from the Insurance Proceeds Account for
Restoration following any Event of Loss shall be remitted to the Borrower by the
Agent, in the event that the Net Available Amount is less than $25,000,000 to be
used for Restoration or (A) in the event that the failure by the Borrower to
Restore the Affected Property could not reasonably be expected to result in a
Material Adverse Effect and the Borrower and the Agent have received a
certificate of the Independent Engineer certifying the same, for any purpose, at
the discretion of the Borrower or otherwise or (B) to prepay the Loans.

 

(ii) Amounts to be made available to the Borrower from the Insurance Proceeds
Account for Restoration following any Event of Loss shall be remitted to the
Borrower by the Agent to be used for Restoration in the event that the Net
Available Amount is equal to or greater than $25,000,000 if the Independent
Engineer shall have delivered to the Agent a certificate to the effect that the
sum of (A) the Net Available Amount deposited in the Insurance Proceeds Account
plus (B) other amounts deposited in the Insurance Proceeds Account by the
Borrower, any Pledgor or other Persons is sufficient (together with all other
monies reasonably expected to be available to the Borrower as determined by the
Agent in consultation with the Independent Engineer, including amounts available
to be drawn under this Agreement), in the reasonable opinion of the Independent
Engineer to complete such Restoration, provided, that if the Independent
Engineer is unable to provide such a certificate, such Net Available Amounts may
be used for Restoration upon receipt of written consent of the Majority Lenders
(such consent to be given or withheld at the sole discretion of the Majority
Lenders). Amounts made available to the Borrower under this clause (ii) shall
only be used for Restoration and, if not so utilized within 90 days of receipt
thereof, shall be used to prepay the Loans.

 

8.06 Proceedings. The Borrower shall (a) promptly upon obtaining knowledge of
each action, suit or proceeding at law or in equity by or before any Government
Authority, arbitral tribunal or other body pending or threatened against the
Borrower involving (i) claims against the Borrower or the Project in excess of
$10,000,000 individually or (ii) injunctive or declaratory relief and (b)
promptly upon becoming aware of other circumstance, act or condition (including
the adoption, amendment or repeal of any Government Rule or the Impairment of
any Government Approval or written notice of the failure to comply with the
terms and conditions of any Government Approval) which could reasonably be
expected to result in a Material Adverse Effect, in each event described in
clauses (a) and (b) above, furnish to the Agent a notice of such event
describing it in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Borrower has taken
and proposes to take with respect to such event.

 

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8.07 Taxes. The Borrower shall pay and discharge all Taxes imposed on the
Borrower or on its income or profits or on any of its Property prior to the date
on which any penalties may attach; provided, that the Borrower shall have the
right to Contest the validity or amount of any such Tax. The Borrower shall
promptly pay any valid, final judgment rendered upon the conclusion of the
relevant Contest, if any, enforcing any such Tax and cause it to be satisfied of
record.

 

8.08 Books and Records; Inspection Rights. The Borrower shall keep proper books
of record in accordance with GAAP and permit representatives and advisors of the
Agent or any Lender, upon reasonable notice to the Borrower, to visit and
inspect its properties, to examine, copy or make excerpts from its books,
records and documents (at the expense of the Borrower) and to discuss its
affairs, finances and accounts with its principal officers, engineers and
independent accountants, all at such times during normal business hours as such
representatives may reasonably request.

 

8.09 Use of Proceeds.

 

(a) The Borrower shall use the proceeds of the Loans as follows: (i) to pay
Project Costs, (ii) to pay Project Costs reasonably and necessarily incurred by
the Borrower that are not included in the Construction Budget and Schedule
solely to the extent of the Contingency, (iii) to pay Debt Service, (iv) with
respect to the initial Loan made on the Funding Date, to reimburse the Borrower
or the Pledgors for any Project Costs paid by or on behalf of the Borrower in
excess of the Equity Contribution Amount prior to the Funding Date, as more
fully described in Sections 6.02(d) and 8.12(f), (v) with respect to the final
Loan made on the Final Funding Date, to reimburse the Pledgors for excess
capital contributions, if any, as more fully described in Section 8.12(g), (vi)
to fund the Debt Service Reserve Account up to the Required Debt Service Reserve
Amount and (vii) with respect to any Loan made prior to the Term Conversion
Date, to pay Operation and Maintenance Expenses.

 

(b) The Borrower shall use the proceeds of each Loan solely for the costs and
expenses specified in the related Notice of Borrowing and any related
certificates delivered by the Borrower in connection therewith.

 

8.10 Maintenance of Lien. The Borrower shall grant a security interest in the
Borrower’s interest in all Project assets and Additional Project Documents
acquired or entered into, as applicable, from time to time and shall take, or
cause to be taken, all action reasonably required to maintain and preserve the
Liens created by the Security Documents to which it is a party and the priority
of such Liens. The Borrower shall from time to time execute or cause to be
executed any and all further instruments (including financing statements,
continuation statements and similar statements with respect to any Security
Document) reasonably requested by the Agent for such purposes. The Borrower
shall promptly discharge at the Borrower’s cost and expense, any Lien (other
than Permitted Liens) on the Collateral. Without limiting the foregoing, the
Borrower shall cause any Person holding any direct equity interest in the
Borrower (including transfers thereof) to execute a Pledge Agreement
substantially in the form of Exhibit E.

 

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8.11 Prohibition of Fundamental Changes.

 

(a) The Borrower shall not change its legal form, amend its Partnership
Agreement (except any amendments in connection with permitted sales or transfers
of ownership interests in the Borrower, provided, that the Borrower shall have
delivered to the Agent a copy of such amendment together with a certificate of
an Authorized Officer of the Borrower certifying that no changes have been made
to the Partnership Agreement other than such changes as are necessary solely to
reflect the change in ownership) or any other organizational document, merge
into or consolidate with, or acquire all or any substantial part of the assets
or any class of stock of (or other equity interest in), any other Person and
shall not liquidate or dissolve. The Borrower shall not convey, sell, lease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, any assets in excess of $2,000,000 per year except: (i) sales of
assets no longer used or useful in the Borrower’s business in the ordinary
course of the Borrower’s business, (ii) sales, transfers or other dispositions
of Permitted Investments, (iii) Restricted Payments made in accordance with the
Financing Documents, (iv) sales of Services in the ordinary course of business
and (v) sales of surplus retained Gas obtained by the Borrower under the TUAs as
well as LNG used for testing and commissioning and the Gas produced from said
LNG. The Borrower shall not issue any equity interests (or enter into any option
agreement, subscription agreement or other agreement for the issuance of any
equity interests) in the Borrower to any Person, except to (A) any Person who
shall be an Approved Transferee at the time such equity interests are issued or
(B) any Person reasonably acceptable to the Lenders, who in either case has
executed and delivered to the Collateral Agent a Pledge Agreement substantially
in the form of Exhibit E for the benefit of the Secured Parties and provided
such other instruments as reasonably requested by the Agent; provided, that such
equity issuance under either clause (A) or (B) shall not cause a Default,
including under Section 9.01(t).

 

(b) The Borrower shall not purchase or acquire any assets other than: (i) the
purchase of assets reasonably required for the completion of the Project as
contemplated by the Transaction Documents, and in any event in accordance with
applicable Government Approvals and applicable Government Rules and as
contemplated by the Construction Budget and Schedule, (ii) the purchase of
assets reasonably required in connection with Restorations in accordance with
Section 8.05(b) or 8.05(c), (iii) the purchase of assets in the ordinary course
of business reasonably required in connection with the operation and maintenance
of the Project contemplated by the Transaction Documents, (iv) the purchase of
assets reasonably required in connection with Permitted Capital Expenditures and
(v) Permitted Investments.

 

8.12 Restricted Payments. The Borrower shall not make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except that the Borrower may, on
any Quarterly Date following the Term Conversion Date, make a Restricted Payment
in cash from and to the extent of cash then on deposit in the Distribution
Account, subject to the satisfaction of each of the following conditions on the
date of such Restricted Payment (a “Restricted Payment Date”) and after giving
effect thereto:

 

(a) the first Principal Payment Date shall have occurred or shall be concurrent
with the proposed Restricted Payment Date;

 

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(b) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence of such Restricted Payment;

 

(c) the Debt Service Reserve Account is fully funded in an amount at least equal
to the Required Debt Service Reserve Amount;

 

(d) the Debt Service Coverage Ratio for the most recent calendar quarter is not
less than 1.25 to 1.0;

 

(e) the Borrower shall have delivered to the Agent, at least five Business Days
prior to the proposed Restricted Payment Date, a certificate of the Borrower
executed by an Authorized Officer dated the Restricted Payment Date:

 

(i) to the effect that each of the foregoing conditions shall have been
satisfied as at such Restricted Payment Date; and

 

(ii) setting out in reasonable detail the calculations for computing the Debt
Service Coverage Ratio for the relevant period and stating that such
calculations were prepared in good faith and were based on reasonable
assumptions.

 

(f) Notwithstanding the foregoing provisions of this Section 8.12, the Borrower
shall be permitted to make a one-time Restricted Payment from the net available
proceeds of the initial Loan made on the Funding Date in an amount equal to the
amount of Project Costs paid prior to the Funding Date in excess of the Equity
Contribution Amount.

 

(g) Notwithstanding the foregoing provisions of this Section 8.12, on the Final
Funding Date, the Borrower shall be permitted to make a one-time Restricted
Payment from the net available proceeds of the final Loan in an amount such
that, after giving effect to such Restricted Payment, the Debt to Equity Ratio
is not greater than 80:20. The Borrower shall give the Agent notice in writing,
to be delivered five Business Days prior to the Term Conversion Date, of any
proposed distribution to be made pursuant to this Section 8.12(g), setting forth
the proposed date and amount thereof, with all supporting calculations in
reasonable detail.

 

8.13 Liens. The Borrower shall preserve and maintain good and valid title to, or
rights in, the Collateral and its Property and shall not create, incur, assume
or suffer to exist any Lien on any of the Collateral or any of its other
Property except:

 

(a) (i) Liens, pledges or deposits under worker’s compensation, unemployment
insurance or other social security legislation (other than ERISA), (ii) Liens
imposed by any Government Authority for Taxes that are not yet due or that are
being Contested, or (iii) Mechanics’ Liens arising in the ordinary course of
business or incident to the Development or any Restoration, in each case, in
respect of obligations that are not yet due or that are being Contested,

 

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(b) minor defects, easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances,
licenses, restrictions on the use of property or minor imperfections in title
that (i) do not (A) materially impair the property affected thereby for the
purpose for which title was acquired or (B) interfere with the Development of
the Project and (ii) that individually or in the aggregate could not reasonably
be expected to result in a Material Adverse Effect,

 

(c) Liens created pursuant to this Agreement and the Security Documents,

 

(d) Liens incurred in connection with Indebtedness permitted under clauses (c)
and (d) of Section 8.16,

 

(e) Liens which are exceptions to the Title Policy on the Closing Date, and

 

(f) pledges or deposits to secure the performance of (i) bids, trade contracts
(other than for borrowed money), operating leases, statutory obligations, surety
bonds, performance bonds, letters of credit and other obligations of a like
nature incurred in the ordinary course of business in an aggregate amount not
greater than $10,000,000 or (ii) appeal bonds and letters of credit in an
aggregate amount not in excess of $20,000,000 issued for the benefit of
suppliers of LNG to be used in the cool down of the Project.

 

8.14 Investments. The Borrower shall not make, and shall not instruct the
Collateral Agent to make, any Investments except Permitted Investments.

 

8.15 Hedging Arrangements.

 

(a) No later than 5 days following the Closing Date, the Borrower shall enter
into and thereafter maintain in full force and effect, from time to time, one or
more Permitted Swap Agreements (in form and substance satisfactory to the
Agent), provided, that, on the Term Conversion Date, the Permitted Swap
Agreements shall amount to no less than $700,000,000 and shall be placed in
accordance with a schedule substantially similar to Schedule 8.15(a).

 

(b) The Borrower shall not enter into any Hedging Agreements other than
Permitted Swap Agreements.

 

8.16 Indebtedness. The Borrower shall not directly or indirectly create, incur,
assume, suffer to exist or otherwise be or become liable with respect to any
Indebtedness except:

 

(a) Indebtedness created pursuant to this Agreement,

 

(b) unsecured Indebtedness of the Borrower incurred to finance working capital
and other general corporate purposes; provided, that such Indebtedness shall be
used (i) to finance working capital in an amount not to exceed $20,000,000 or
(ii) for general corporate purposes (including leases and sale-leaseback
transactions) in an amount not to exceed $10,000,000 (in addition to the leases
permitted pursuant to paragraph (c) of this Section 8.16),

 

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(c) purchase money or Capital Lease Obligations to the extent incurred in the
ordinary course of business to finance the acquisition or licensing of
intellectual property or items of equipment (and Indebtedness incurred to
finance any such obligations); provided, that (i) if such obligations are
secured, they are secured only by Liens upon the equipment or intellectual
property being financed and (ii) the aggregate principal amount and the
capitalized portion of such obligations do not at any time exceed $5,000,000 in
the aggregate,

 

(d) Indebtedness in respect of the Permitted Swap Agreements,

 

(e) other unsecured Indebtedness for borrowed money subordinated to the Secured
Obligations pursuant to an instrument in writing satisfactory in form and
substance to the Majority Lenders and substantially in the form of Exhibit F,

 

(f) any other unsecured Indebtedness of the Borrower, provided, that (i) any
such Indebtedness shall be repaid or cancelled in full prior to or concurrent
with the Funding Date and (ii) the proceeds of the Loans shall not be used to
repay any such Indebtedness, and

 

(g) reimbursement obligations with respect to letters of credit to secure the
purchase of LNG for cool down of the Project in the aggregate amount not greater
than $20,000,000.

 

provided, that the Borrower may only incur the Indebtedness referred to in
paragraph (b), (c) or (e) above following the Term Conversion Date.

 

8.17 Nature of Business.

 

(a) The Borrower shall not engage in any business other than the Development and
any activities incidental thereto.

 

(b) The Borrower shall not permit to exist any Subsidiary of the Borrower.

 

(c) The Borrower shall not directly or by way of derivative or synthetic
transactions engage in the sale, trading or hedging of Gas or LNG or any related
product or by-product except with respect to (i) acquiring and selling LNG for
the testing and commissioning of the Project pursuant to the EPC Contract and
selling the Gas resulting therefrom, (ii) selling LNG or Gas after the failure
of a customer to take delivery as contemplated by a TUA and (iii) selling LNG or
Gas derived from retainage in accordance with a TUA that is excess to the
Borrower’s requirements to perform the Services.

 

(d) The Borrower shall not employ or engage any employees nor enter into any
contractual or other arrangements with any Person that would require the
Borrower to be subject to or to comply with ERISA or any other Government Rule
concerning labor, employment, wages or worker benefits.

 

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8.18 Project Construction; Maintenance of Properties.

 

(a) The Borrower shall cause the Project to be constructed and completed
substantially in accordance with, and otherwise take such actions in respect of
the Project as are required by, Prudent Industry Practices, applicable
Government Rules, the EPC Contract, the Construction Budget and Schedule and the
other relevant Material Project Documents.

 

(b) The Borrower shall maintain and preserve the Project and all of its other
material Properties necessary or useful in the proper conduct of its business in
good working order and condition (ordinary wear and tear excepted),
substantially in accordance with Prudent Industry Practices, the Project
Documents and the operating manuals. The Borrower shall operate (or cause to be
operated ) the Project substantially in accordance with Prudent Industry
Practices, the Project Documents, the Operating Budget and the operating
manuals.

 

(c) The Borrower shall not make any Capital Expenditures except Permitted
Capital Expenditures. All assets or property built or acquired with Capital
Expenditures shall be part of the Collateral.

 

8.19 Construction Reports. Prior to Substantial Completion, together with the
submission of each Borrowing Certificate, the Borrower shall deliver to the
Agent a Construction Report, substantially in the form of Exhibit G in form and
substance satisfactory to the Agent and the Independent Engineer, accompanied by
a certificate of an Authorized Officer of the Borrower setting forth in
reasonable detail:

 

(a) estimated dates on which Ready for Cool Down, Ready for Performance Testing
and Substantial Completion shall be achieved,

 

(b) the Borrower’s then-current estimate of anticipated Project Costs through
Ready for Cool Down, Ready for Performance Testing and Substantial Completion as
compared to the Construction Budget and Schedule and reasons for material
variances, and in the event of a material variance, the reasons therefor, and
such other information reasonably requested by Agent,

 

(c) any occurrence of which the Borrower is aware that could reasonably be
expected to (i) increase the total Project Costs above those set forth in the
Construction Budget and Schedule, (ii) delay Substantial Completion beyond the
Guaranteed Substantial Completion Date or (iii) have a Material Adverse Effect,

 

(d) if Substantial Completion is not anticipated to occur on or before the
Guaranteed Substantial Completion Date (as such term is defined in the EPC
Contract), the reasons therefor (and a schedule recovery plan),

 

(e) the status of construction of the Project, including progress under the EPC
Contract (and a description of any material defects or deficiencies with respect
thereto) and the proposed construction schedule for the following month,

 

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(f) the status of the Government Approvals necessary for the Development,
including the dates of applications submitted or to be submitted and the
anticipated dates of actions by Government Authorities with respect to such
Government Approvals, and

 

(g) a listing of reportable environmental, health and safety incidents as well
as any unplanned related impacts, events, accidents or issues that occurred
during the report period and the compliance with Environmental Laws.

 

If during any fiscal quarter of the Borrower prior to Term Conversion Date there
are no Loans requested, by the final Business Day of the month following the end
of such fiscal quarter the Borrower shall deliver to the Agent the
above-referenced Construction Report and certificate.

 

8.20 EPC Contract. The Borrower shall not:

 

(a) initiate or consent to (without the consent of the Majority Lenders in
consultation with the Independent Engineer) any change in the description of
work under the EPC Contract that, directly or indirectly, could be reasonably
expected to or in fact does:

 

(i) increase the contract price of the EPC Contract; provided, that (A) the
Borrower may, without the consent of the Majority Lenders, enter into any Change
Order or make payment of any claim under the EPC Contract, if (I) the amount of
any such Change Order or payment is less than $5,000,000 and the aggregate of
all such Change Orders or payments is less than $15,000,000 and (II) the Agent
has received a certificate of the Independent Engineer confirming that after
giving effect to such Change Orders or payments (x) the ability of the Borrower
to achieve Substantial Completion in accordance with the Construction Budget and
Schedule has not been adversely and materially affected and (y) no cost overruns
shall have occurred and be continuing which could reasonably be expected to
result in Project Costs exceeding the funds then available to pay such Project
Costs; (B) if an event of force majeure, Change in Law or Borrower-Caused Delay
(as described in the EPC Contract) prompts the EPC Contractor to request a
Change Order to which it is entitled under the terms of the EPC Contract, the
Borrower shall be entitled to authorize such change without first obtaining the
consent of the Lenders if the amount of such change is within the remaining
Contingency set forth in the Construction Budget and Schedule; and (C) the
Borrower may enter into any Change Order under the EPC Contract for amounts in
excess of the amounts specified in clause (i)(A) above, provided, that (1) the
Borrower or any other Person on behalf of the Borrower shall have transferred to
the Collateral Agent for deposit to the Construction Account an amount
sufficient to pay the maximum amount that may become due and payable pursuant to
such Change Order and (2) the Agent shall have received a certificate of the
Independent Engineer confirming that after giving effect to such Change Order or
payments (X) the ability of the Borrower to achieve Substantial Completion by
the Guaranteed Substantial Completion Date has not been materially adversely
affected and (Y) such Change Order will not result in Project Costs exceeding
the funds then available to pay such Project Costs;

 

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(ii) extend the Guaranteed Substantial Completion Date or adversely affect the
likelihood of achieving Substantial Completion by such date;

 

(iii) except as a result of a buydown of the Performance Guarantees pursuant to
Section 11.5 of the EPC Contract which is otherwise permitted pursuant to the
terms hereof, modify the Performance Guarantees, any other performance guarantee
of the EPC Contractor or the criteria or procedures for the conduct or measuring
the results of the Performance Tests (as each capitalized term used in this
clause and not otherwise defined in this Agreement is defined in the EPC
Contract);

 

(iv) adjust the Payment Schedules (other than as a result of a Change Order
permitted by Section 8.20(a)(i) or otherwise permitted by this Agreement), or
Schedule Bonus (as each such term is defined in the EPC Contract) or agree to
any additional bonus to be paid to the EPC Contractor;

 

(v) cause any material component or material design feature or aspect of the
Project to materially deviate in any fundamental manner from the description
thereof set forth in the schedules, exhibits, appendices or annexes to the EPC
Contract (other than as the result of a Change Order for an amount not greater
than $35,000,000 which is permitted by Section 8.20(a)(i) or otherwise permitted
by this Agreement);

 

(vi) diminish or otherwise alter in any material respect any EPC Contractor’s
liquidated damages obligations under the EPC Contract;

 

(vii) waive or alter the provisions under the EPC Contract relating to default,
termination or suspension or the waiver by the Borrower of any event that, with
the giving of notice or the lapse of time or both, would entitle the Borrower to
terminate the EPC Contract; or

 

(viii) otherwise materially diminish, lessen or waive in any manner any material
liability, obligation or undertaking of the EPC Contractor under the EPC
Contract.

 

(b) approve any remedial plan under Section 11 of the EPC Contract;

 

(c) without limiting any restrictions set forth in Section 8.20(a) or (b) above,
issue, direct, authorize, consent to or suffer the occurrence of, any variation,
Change Order, amendment or modification or suspension of or to the EPC Contract
that, directly or indirectly, constitutes or could reasonably be expected to
result in a Material Adverse Effect;

 

(d) certify to, consent to or otherwise request or permit through a Change Order
or otherwise without the consent of the Majority Lenders (in consultation with
the

 

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Independent Engineer) the occurrence of Substantial Completion, Final
Completion, Ready for Performance Testing or Ready for Cool Down or make any
election to take care, custody and control of the Project (or any portion
thereof) pursuant to Section 11.5B (or any other provision thereof) of the EPC
Contract; provided, however, that the Agent shall use reasonable efforts to
promptly review relevant documentation provided to it by the Borrower; and

 

(e) initiate or consent to any modification or amendment (whether pursuant to
Change Order or otherwise) to Attachment EE to the EPC Contract other than any
amendments to the price index start date, the effect of which change to the
price index start date in Attachment EE is less than or equal to the Adjustment
Amount as evaluated by the Independent Engineer pursuant to Section 6.02(d)(iv).

 

8.21 Project Documents, Etc.

 

(a) The Borrower shall (i) perform and observe in all material respects all of
its covenants and obligations contained in each of the Project Documents, (ii)
take all reasonable and necessary action to prevent the termination or
cancellation of any Project Document in accordance with the terms of such
Project Documents or otherwise (except for the expiration of any Project
Document in accordance with its terms and not as a result of a breach or default
thereunder) and (iii) enforce against the relevant Project Party each material
covenant or material obligation of each Project Document to which such Person is
a party in accordance with its terms, except in each of clauses (i), (ii) or
(iii) with respect to any Non-Material Project Document or Other Project
Document any such act or failure to act, perform, observe, enforce, terminate or
cancel which could not reasonably be expected to have a Material Adverse Effect
or materially and adversely affect the Borrower’s rights, duties, obligations or
liabilities under any TUA with an Anchor Tenant.

 

(b) The Borrower shall not, without the prior written consent of the Majority
Lenders in consultation with the Independent Engineer, (i) suspend, cancel or
terminate any Project Document or consent to or accept any cancellation or
termination thereof, (ii) sell, transfer, assign (other than pursuant to the
Security Documents) or otherwise dispose of (by operation of law or otherwise)
or consent to any such sale, transfer, assignment or disposition of any part of
its interest in any Project Document (other than the sub-license of EPC
Contract-related intellectual property rights to an Affiliate of the Borrower),
(iii) waive any material default under, or material breach of, any Project
Document or waive, fail to enforce, forgive, compromise, settle, adjust or
release any material right, interest or entitlement, howsoever arising, under,
or in respect of, any Project Document, (iv) initiate or settle a material
arbitration proceeding under any Project Document, (v) agree to or petition,
request or take any other material legal or administrative action that seeks, or
may reasonably be expected, to Impair any Project Document or (vi) amend,
supplement or modify or in any way vary, or agree to the variation of, any
material provision of a Project Document or of the performance of any material
covenant or obligation by any other Person under any Project Document (other
than Change Orders with respect to the EPC Contract, which Change Order protocol
is addressed in Section 8.20). Notwithstanding the preceding sentence, the
Borrower may, with prior written notice to the Agent, take any of the actions
described in clauses (i) or (iii) through (vi) inclusive with respect to Other
Project Documents or in clauses (i) through (vi) with respect to Non-Material

 

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Project Documents, which could not reasonably be expected to have a Material
Adverse Effect or materially and adversely affect the Borrower’s rights, duties,
obligations or liabilities under any TUA with an Anchor Tenant.

 

(c) Subject to the next sentence of this paragraph (c), the Borrower shall not
enter into any Additional Project Document without the prior written consent of
the Majority Lenders in consultation with the Independent Engineer (which
consent shall not be unreasonably withheld). Notwithstanding the prior sentence,
the Borrower may, with prior written notice to the Agent, enter into any
Non-Material Project Document or Other Project Document including, without
limitation, a Project Document of the type described in Section 8.24(d) provided
that such new Non-Material Project Document or Other Project Document (i) could
not reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the Borrower’s rights, duties, obligations or liabilities under
any TUA with an Anchor Tenant (including, for the avoidance of doubt, triggering
the provisions of Article 13 of the Omnibus Agreement with Total USA LNG, Inc.)
and (ii) the Agent shall have received a certificate of an Authorized Officer of
the Borrower certifying as to the items set forth in clause (i) of this
paragraph (c). The Borrower must obtain the requisite Ancillary Documents prior
to, or contemporaneously with, the execution of any Additional Project Document.

 

(d) The Borrower shall cause all Project Revenues received from any Project
Party or any other Person to be deposited in the Revenue Account. Without
limiting the Borrower’s obligation to procure all Consent and Agreements, the
Borrower shall send a letter (on the Borrower’s letterhead and signed by an
Authorized Officer of the Borrower) notifying each other Project Party not party
to a Consent and Agreement (i) that its Project Document and all associated
documents and obligations have been pledged as collateral security to the
Secured Parties and are subject to the Secured Parties’ Lien on such Property
and (ii) if such Project Party’s Project Document requires any payment of
Project Revenues specified in clause (a) of the definition of Project Revenues
that, in addition to the assignment specified in clause (i) above, it shall pay
all such “Project Revenues” directly into the Revenue Account.

 

(e) The Borrower shall furnish the Agent, the Independent Engineer and the
Lenders with (i) certified copies of (A) all amendments, supplements or
modifications of any Material Project Documents and Other Project Documents and
(B) all Additional Project Documents and (ii) all Ancillary Documents relating
to any Additional Project Document, in each case, promptly after execution and
delivery of such documents to the Borrower.

 

(f) The Borrower shall not permit any counterparty to a Project Document to
substitute, diminish or otherwise replace any performance security, letter of
credit or guarantee supporting such counterparty’s obligations thereunder
(except with respect to Non-Material Project Documents or Other Project
Documents if such permission could not reasonably be expected to result in a
Material Adverse Effect).

 

8.22 Operating Budgets. The Borrower shall, on or prior to the commencement of
commercial operations, adopt an Operating Budget for the period from such date
to the conclusion of the then current fiscal year (and for each month during
such period), and, prior to the beginning of each fiscal year of the Borrower
thereafter, the Borrower shall adopt an Operating Budget for the succeeding
fiscal year (and for each month during such period) which

 

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such Operating Budget shall be prepared and observed substantially in accordance
with the standards set forth in Section 3.7 of the O&M Agreement. Copies of the
proposed Operating Budget, together with a comparison of the costs in the
proposed Operating Budget with the costs set forth in the Operating Budget for
the current fiscal year and an explanation of the reasons for any significant
increase or decrease in any category shall be furnished to the Agent at least 60
days before the beginning of the fiscal year to which such proposed Operating
Budget applies.

 

8.23 Operating Statements and Reports. The Borrower shall furnish to the Agent
and the Independent Engineer quarterly, not more than 30 days after the end of
the last month of each quarter, commencing with the close of the first full
fiscal quarter after the Term Conversion Date, an operating statement of the
Project for such quarterly period and for the portion of the Borrower’s fiscal
year then ended, and, not more than 120 days after the end of each fiscal year
of the Borrower, an operating statement of the Project for such fiscal year.
Such operating statements shall correspond to the classifications and monthly
periods of the current annual Operating Budget and shall show all Project
Revenues and all expenditures for Operation and Maintenance Expenses. The
quarterly operating statement shall include (a) updated estimates of Operation
and Maintenance Expenses for the balance of such fiscal year to which the
operating statement relates, (b) any material developments during such fiscal
quarter which could reasonably be expected to have a Material Adverse Effect,
(c) summary of statistical data relating to the operation of the Project during
such fiscal quarter and (d) the cause, duration and projected loss of Project
Revenues attributable to each scheduled and unscheduled interruption in the
Services by the Project during such fiscal quarter and, with respect to any
interruptions caused by a material defect or failure, the cause of and cost to
repair such defect or failure. Both the quarterly and annual operating
statements shall be certified as materially complete and correct by an
Authorized Officer of the Borrower. Each operating statement will be accompanied
by a statement of sources and uses of funds for the periods covered by it and a
discussion of the reason for any material variance from the amount budgeted
therefor in the relevant Operating Budget.

 

8.24 Transactions with Affiliates. The Borrower shall not directly or indirectly
enter into any transaction that is otherwise permitted hereunder with or for the
benefit of an Affiliate (including guarantees and assumptions of obligations of
an Affiliate) except (a) to the extent required by applicable Government Rule,
(b) the transactions listed on Appendix D, (c) upon terms no less favorable to
the Borrower than would be obtained in a comparable arm’s-length transaction
with a Person that is not an Affiliate or (d) for any processing agreement with
an Affiliate of the Borrower for the uncommitted capacity of the Project,
provided that the terms of such agreement provide for the recovery of at least
the incremental Operation and Maintenance Expenses associated with operations
pursuant to such agreement and such agreement complies with the second sentence
of Section 8.21(c). Prior to entering into any agreement with an Affiliate, the
Borrower shall deliver to the Agent a certificate of an Authorized Officer of
the Borrower describing such transaction in reasonable detail and certifying as
to the condition set forth in clause (b), (c) or (d) of this Section 8.24.

 

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8.25 Other Documents and Information. The Borrower shall furnish the Agent (with
sufficient copies for each Lender):

 

(a) promptly after the filing thereof, a copy of each filing made by the
Borrower with FERC, except such as are routine or ministerial in nature; and
promptly after obtaining knowledge thereof, a copy of each filing with respect
to the Project made with FERC by any Person other than the Borrower, except for
such filings as are routine or ministerial in nature in any proceeding before
FERC in which the Borrower is the captioned party or respondent;

 

(b) promptly after the filing thereof, a copy of each filing, certification,
waiver, exemption, claim, declaration, or registration made with respect to
Government Approvals to be obtained or filed by the Borrower with any Government
Authority, other than such filings, certifications, waivers, exemptions, claims,
declarations, or registrations that are routine or ministerial in nature and in
respect of which a failure to file could not reasonably be expected to have a
Material Adverse Effect;

 

(c) promptly after receipt or publication thereof, a copy of each Government
Approval obtained by the Borrower; and

 

(d) promptly upon obtaining knowledge thereof, a description of each material
change in the status of any Government Approval identified on Schedule 7.05(a)
and Schedule 7.05(b).

 

8.26 Debt Service Coverage Ratio. The Borrower shall not permit the Debt Service
Coverage Ratio as of the end of any calendar quarter beginning with the second
calendar quarter following the Term Conversion Date to be less than 1.15 to
1.00.

 

8.27 Cooperation. The Borrower shall perform such acts as are reasonably
requested by the Agent to carry out the intent of, and transactions contemplated
by, this Agreement and the other Financing Documents. The Borrower will
cooperate with and provide all necessary information available to it on a timely
basis to the Independent Engineer and the Insurance Advisor so that the
Independent Engineer and the Insurance Advisor may complete and deliver the
reports as required herein.

 

8.28 Auditors. The Borrower shall appoint and maintain as auditor UHY/Mann,
Frankfort, Stein and Lipp CPAs LLC (or such other auditor as is reasonably
acceptable to the Majority Lenders) to audit financial statements.

 

8.29 Accounts. The Borrower shall not open or maintain or permit or instruct any
other Person to open or maintain on its behalf, any account other than (a) the
Collateral Accounts and (b) the account held by the Borrower at JPMorgan Chase
(f/k/a Bank One) with the account name of Sabine Pass LNG, LP and account number
653519421, provided that such account shall be closed by the Borrower and the
remaining balance transferred to the Construction Account upon the clearance of
all checks issued with respect to such account as of the Closing Date.

 

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8.30 Guarantees. The Borrower shall not directly or indirectly create, incur or
assume or otherwise be or become liable with respect to any Guarantee, except as
any such Guarantee is Permitted Indebtedness.

 

8.31 Events of Abandonment. The Borrower shall not cause or permit an Event of
Abandonment.

 

8.32 GAAP. The Borrower shall not change accounting or financial reporting
policies, except as required to comply with GAAP.

 

8.33 Terminal Use Agreements.

 

(a) The Borrower shall not issue to any Anchor Tenant any notice to commence, or
otherwise commence, operations under a TUA without the prior consent of the
Agent, which such consent shall be provided upon the receipt of a certificate
from the Independent Engineer certifying that (i)(A) Substantial Completion has
occurred or (B) that the Project has been completed to the extent required for
the Borrower to meet its obligations under such TUA and each other TUA then in
effect and (ii) if Substantial Completion has not been achieved, the Operations
Activity (as defined in the EPC Contract) or other transfer of care, custody and
control to the Borrower shall not materially interfere with the EPC Contractor’s
performance of its obligations under the EPC Contract so as to trigger the EPC
Contractor’s rights to cease Operations Activity pursuant to Section 11.8A of
the EPC Contract or get a Change Order, which such certification, in the case of
clause (ii), shall be countersigned by the EPC Contractor. The Borrower shall
not, without the prior consent of the Agent, select a window period pursuant to
Section 6.2 of the Total TUA which shall terminate prior to (i) the date
Substantial Completion is expected to occur pursuant to the Construction Budget
and Schedule then in effect or (ii) the date on which the Project has been
completed to the extent required for the Borrower to meet its obligations under
the Total TUA and each other TUA then in effect, as certified by the Independent
Engineer.

 

(b) The Borrower shall elect a Second Window Period (as defined in the Total
TUA) which shall terminate on April 1, 2009 or such other date at the election
of the Borrower with the consent of the Majority Lenders.

 

8.34 Updated Surveys and Title Policies Following Facility Final Completion.

 

(a) Surveys. The Borrower shall promptly, and in any event no later than 30 days
following Final Completion, deliver to the Agent a survey of the Site of the
Project certified to the Borrower, the Title Company and the Agent, updated,
with respect to all relevant requirements and information required for the
initial Survey, to within 30 days of the date of receipt by the Agent.

 

(b) Title Policies. The Borrower shall promptly, and in any event no later than
30 days after Final Completion, cause the Title Company to deliver to the Agent
an endorsement of the Title Policy deleting: (i) any exception in connection
with pending disbursements; (ii) any exception with respect to mechanics’ and
materialmen’s liens; and (iii) any exception with respect to survey matters.

 

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8.35 EPC Contract Letters of Credit. The Borrower shall deliver to the
Collateral Agent promptly, but in any event within five Business Days following
the issuance of the Notice to Proceed (as defined in the EPC Contract), the
Performance Letter of Credit and the Payment Letter of Credit (each as defined
in the EPC Contract).

 

8.36 Certificate of Occupancy. On or prior to the date of Final Completion, the
Borrower shall deliver to the Agent a certified copy of a permanent and
unconditional certificate of occupancy permitting the fully functioning
operation and occupancy of the Site issued by the Government Authority having
jurisdiction over the Site if such a certificate is required by any Governmental
Rule for the Development, in form and substance acceptable to the Agent.

 

8.37 Noble Purchase Option.

 

(a) Without being deemed to be in breach of its representations under Section
7.11 or its obligations under Section 8.11 or Section 8.17, (a) on or prior to
the Funding Date (provided that the Well (as defined below) has not already
ceased operations or been abandoned and properly plugged), (A) the Borrower
shall purchase the Well and the associated leasehold rights or shall enter into
an agreement to take the actions described in paragraph (b) of this Section 8.37
and (B) the original owners of the Well shall relinquish their rights to conduct
additional drilling activities or install additional pipelines or surface
facilities on the lands included in the area established for the Well. The
foregoing items (A) and (B) shall be set forth in an agreement (“Noble Option
Agreement”) between the Borrower and the owners of the Noble W&T Offshore Well
#1 (“Well”).

 

(b) Without being deemed to be in breach of its representations under Section
7.11 or its obligations under Section 8.11 or Section 8.17, the Borrower further
covenants, prior to the Funding Date, to select one or more of the following
actions, which actions shall be implemented prior to cool-down of the Project
and at the Borrower’s sole cost and expense: (i) install modifications of the
surface facilities of the Well as may be necessary to meet the proper electrical
area classification and render them intrinsically safe, (ii) relocate the
surface facilities of the Well to a site owned or leased by Borrower which is
located more than 2000 feet from center line of the LNG tanks or (iii) plug the
Well to make it non-operable. The Borrower shall only be entitled to select item
(i) or (ii) above if (X) the Borrower certifies (and the Independent Engineer
agrees, such agreement not to be unreasonably withheld) that continued operation
of the Well or the surface facilities with respect thereto are not incompatible
with the construction or operation of the Project, (Y) the Borrower engages a
third party to operate and maintain the Well and (Z) the required Government
Approvals have been obtained..

 

8.38 Lien Waivers. Within 60 days of Final Completion, promptly following the
receipt thereof, the Borrower shall deliver to the Agent the final unconditional
lien waivers with respect to all Work (as defined in the EPC Contract) from the
EPC Contractor and each of the Major Sub-Contractors and Major
Sub-Subcontractors (each as defined in the EPC Contract).

 

8.39 Lease Amendments. Within 10 Business Days of the Closing Date, the Borrower
shall deliver original executed signature pages to the amendment to the Lease
Agreement referred to in item 1 of Appendix E.

 

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ARTICLE IX

 

EVENTS OF DEFAULT

 

9.01 Events of Default; Remedies. If one or more of the following events (each,
an “Event of Default”) shall occur and be continuing:

 

(a) The Borrower shall (i) default in the payment when due of any principal of
any Loan or (ii) default in the payment when due of any interest on any Loan or
any fee or any other amount payable by it under this Agreement or under any
other Financing Document and the default described in clause (ii) shall continue
unremedied for a period of three Business Days after the occurrence of such
default; or

 

(b) A default shall have occurred with respect to the payment of principal or
interest on any Indebtedness of the Borrower (other than any amount due under
any Financing Document) and continued beyond any applicable grace period
aggregating $10,000,000 or more the effect of which has been to cause the entire
amount of such Indebtedness to become due (whether by redemption, purchase,
offer to purchase or otherwise) and the Indebtedness remains unpaid or the
acceleration of its stated maturity unrescinded; or

 

(c) (i) Any representation or warranty made or deemed made by the Borrower or
any Material Project Party in this Agreement or any other Financing Document or
(ii) any representation, warranty or statement in any certificate, financial
statement or other document furnished to the Agent or any Lender by or on behalf
of the Borrower or any Material Project Party, shall prove to have been false or
misleading in any material respect as of the time made or deemed made, confirmed
or furnished, and such condition or circumstance could reasonably be expected to
have a Material Adverse Effect; provided, that such misrepresentation or such
false statement shall not constitute an Event of Default if such condition or
circumstance is (A) subject to cure, as determined by the Majority Lenders in
their reasonable judgment and (B) remedied within 30 days after the earlier of
(I) written notice of such default from the Agent or (II) the Borrower’s
Knowledge of such default; or

 

(d) The Borrower shall fail to observe or perform any covenant or agreement
contained in Section 8.02, 8.04(c), 8.09, 8.10, 8.11(a), 8.12, 8.13, 8.15(b),
8.16, 8.29, 8.30 or 8.31; or

 

(e) The Borrower shall default in the performance of any of its covenants or
material agreements to be performed or observed by it under the Financing
Documents (not otherwise addressed in this Section 9.01) and such default, if
capable of remedy, shall continue unremedied for a period of 30 days after
written notice of such default (specifying such default and requiring remedy
thereof) from the Agent; provided, that if such failure is not capable of remedy
within such 30-day period, such 30-day period shall be extended to a total
period of 60 days so long as (i) such default is subject to cure, (ii) the
Borrower is diligently and continuously proceeding to cure such default and
(iii) such additional cure period could not reasonably be expected to result in
a Material Adverse Effect or materially and adversely affect the Borrower’s
rights, duties, obligations or liabilities under any TUA with an Anchor Tenant;
or

 

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(f) A Bankruptcy shall occur with respect to the Borrower or Pledgor; or

 

(g) A Bankruptcy shall occur with respect to (i) an Anchor Tenant (or a
guarantor of an Anchor Tenant), (ii) the Operator or (iii) prior to Substantial
Completion, the EPC Contractor; or

 

(h) Except as expressly permitted under Section 8.13 hereof, Liens in favor of
the Secured Parties under the Security Documents shall at any time cease to
constitute valid and perfected Liens granting a first priority security interest
in the Collateral (subject to Permitted Liens) to the Secured Parties or;

 

(i) Except as otherwise addressed in this Section 9.01, the Borrower or any
obligor under a Security Document shall default in the performance of any of its
obligations (other than payment obligations) under such Security Document and
such default shall continue unremedied for more than 30 days after the
occurrence thereof; provided, that if such default constitutes a Contest or
repudiation of the enforceability of such Security Document against such
obligor, such event shall be governed by either paragraph (h) or (n) of this
Section 9.01; or

 

(j) A final judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate shall be rendered by one or more Government
Authorities, arbitral tribunals or other bodies having jurisdiction of the
Borrower and the same shall not be discharged (or provision shall not be made
for such discharge), dismissed or stayed, within 30 days from the date of entry
of such judgment or judgments; in the case of more than one judgment within 30
days from the date of entry of the last such judgment; or

 

(k) An ERISA Event shall have occurred that, in the opinion of the Majority
Lenders, when taken together with all other ERISA Events that have occurred,
could reasonably be expected to result in a Material Adverse Effect; or

 

(l) The Borrower shall default in the performance of its obligation to maintain
in full force and effect the insurance required under Section 8.05 and such
insurance is not replaced with insurance complying with the requirements of such
sections within 15 days after such default; or

 

(m) Any Government Approval shall be Impaired and (i) such Impairment continues
to exist for more than 30 days or such Government Approval is not replaced
within 30 days and (ii) such Impairment could reasonably be expected to have a
Material Adverse Effect; or

 

(n) This Agreement or any other Financing Document or any material provision of
any Financing Document, (i) is declared in a final non-appealable judgment to be
illegal or unenforceable, (ii) should otherwise cease to be valid and binding or
in full force and effect or shall be materially Impaired (in each case, except
in connection

 

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with its expiration in accordance with its terms in the ordinary course (and not
related to any default hereunder or (iii) is (including the enforceability
thereof) expressly terminated, Contested or repudiated by any party thereto
other than a Lender or the Collateral Agent; or

 

(o) (i) Any Material Project Document shall at any time for any reason cease to
be valid and binding or in full force and effect or shall be materially Impaired
(in each case, except in connection with its expiration in accordance with its
terms in the ordinary course (and not related to any default thereunder) or as
permitted pursuant to Section 8.21) or (ii) any Material Project Party shall be
in default under any Material Project Document or a Consent and Agreement or
(iii) any other Project Party shall be in default under a Non-Material Project
Document, Other Project Document or a Consent and Agreement and in the case of
any such event set forth in clause (iii), such event could reasonably be
expected to result in a Material Adverse Effect; provided, that no Event of
Default shall have occurred pursuant to this Section 9.01(o) if (A) in the case
of the occurrence of an event under clause (ii) or (iii) above, such default is
cured within the lesser of 30 days and the cure period permitted under the
applicable Project Document or Consent and Agreement with respect to such
default or (B) in the case of the occurrence of any of the events set forth in
clause (i), (ii) or (iii) above, the applicable Project Document is replaced
within 60 days with a Project Document or Additional Project Document, as
applicable, with a new Project Party acceptable to the Majority Lenders; or

 

(p) An Event of Abandonment; or

 

(q) Cheniere Energy, Inc.’s failure to (i) hold directly or indirectly at least
50% of the ownership interests in the Borrower or (ii) control, directly or
indirectly (without granting to any other Person any negative controls over its
right to exercise such control), voting rights with at least 50% of the votes of
all classes in the Borrower; or

 

(r) An Event of Loss occurs with respect to all or substantially all of the
Project; or

 

(s) Any Secured Party shall become, solely by virtue of (i) the ownership or the
operation of the Project or (ii) the execution, delivery or performance of the
Financing Documents, (A) a “gas utility company”, a “public-utility company”, a
“holding company” or either a “subsidiary company” or an “affiliate” of a
“registered holding company”, as such terms are defined in PUHCA, (B) subject to
regulations under PUHCA, except pursuant to Section 9(a)(2) thereof, (C) subject
to regulation under the law of the State of Louisiana with respect to rates, or
subject to material financial and organizational regulation under such law or
(D) subject to regulation under the law of the State of Louisiana as a “public
utility”, a “gas utility”, a “public service corporation” or other similar term
with respect to rates or material financial matters; or

 

(t) The failure of the Project to achieve Substantial Completion by May 1, 2009.

 

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THEREUPON: (1) in the case of an Event of Default other than one referred to in
paragraph (f) above with respect to the Borrower, the Agent may, and, upon
request of the Supermajority Lenders, shall, by notice to the Borrower,
terminate the Commitments or declare the principal amount then outstanding of,
and the accrued interest on, the Loans and all other amounts payable by the
Borrower hereunder (including any amounts payable under Section 5.02 or 5.03) to
be forthwith due and payable (or both), whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower and (2) in the case of the occurrence of an Event of Default referred
to in paragraph (f) above, the Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Borrower under this Agreement and the other
Financing Documents (including any amounts payable under Section 5.02 or 5.03)
shall automatically become immediately due and payable without presentment,
demand, protest or other formalities of any kind, all of which are hereby
expressly waived by the Borrower. In the case of any Event of Default, in
addition to the exercise of remedies set forth in clauses (1) and (2) above, the
Collateral Agent shall have the right, upon the consent or at the request of the
Supermajority Lenders, to exercise any and all rights of a secured creditor with
respect to the Collateral.

 

ARTICLE X

 

THE AGENT

 

10.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent under this Agreement and
the other Financing Documents with such powers as are specifically delegated to
the Agent by the terms of the Financing Documents, together with such other
powers as are reasonably incidental to such powers. The Agent (which term as
used in this sentence and in Section 10.05 and the first sentence of Section
10.06 shall include reference to its Affiliates and its own and its Affiliates’
officers, directors, employees, representatives and agents): (a) shall have no
duties or responsibilities except those expressly set forth in the Financing
Documents, and shall not by reason of any Financing Document be a trustee for
any Lender; (b) shall not be responsible to the Lenders for any recitals,
statements, representations or warranties contained in any Financing Document,
or in any certificate or other document referred to or provided for in, or
received by any of them under, any Financing Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Financing Document or any other document referred to or provided for in any
Financing Document or for any failure by the Borrower or any other Person to
perform any of its obligations under any Financing Document; (c) shall not be
required to initiate or conduct any litigation or collection proceedings under
any Financing Document and (d) shall not be responsible for any action taken or
omitted to be taken by it under any Financing Document or under any other
document or instrument referred to or provided for in any Financing Document or
in connection with any Financing Document, except for its own gross negligence
or willful misconduct. The Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.

 

10.02 Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any made by telephone,
telecopy, telex,

 

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telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Agent. As to any matters not expressly provided for by any
Financing Document, the Agent shall in all cases be fully protected in acting,
or in refraining from acting, under any Financing Document in accordance with
instructions given by the Majority Lenders or, if provided in this Agreement, in
accordance with the instructions given by the Majority Lenders, Supermajority
Lenders or all Lenders as is required in such circumstance, and such
instructions of such Lenders and any action taken or failure to act pursuant to
such instructions shall be binding on all of the Lenders.

 

10.03 Defaults. The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default (other than the nonpayment of principal of or interest
on Loans or of fees payable hereunder) unless the Agent has received notice from
a Lender or the Borrower specifying such Default and stating that such notice is
a “Notice of Default”. In the event that the Agent receives such a notice of the
occurrence of a Default, the Agent shall give prompt notice of such receipt to
the Lenders (and shall give each Lender prompt notice of each such nonpayment).
The Agent shall (subject to Section 10.07) take such action with respect to such
Default as shall be directed by the Majority Lenders; provided, that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable in the best interest of the
Lenders except to the extent that this Agreement expressly requires that such
action be taken, or not be taken, only with the consent or upon the
authorization of the Majority Lenders, Supermajority Lenders or all of the
Lenders, as the case may be.

 

10.04 Rights as a Lender. With respect to its Commitments and the Loans made by
it, Société Générale (and any successor acting as Agent) in its capacity as a
Lender under the Financing Documents shall have the same rights, privileges and
powers under the Financing Documents as any other Lender and may exercise the
same as though it were not acting as the Agent, and the term “Lender” or
“Lenders” shall, unless the context otherwise indicates, include the Agent in
its individual capacity. Société Générale (and any successor acting as Agent)
and its Affiliates may (without having to account for the same to any Lender)
accept deposits from, lend money to, make investments in and generally engage in
any kind of banking, trust or other business with the Borrower (and any of its
Subsidiaries or Affiliates) as if it were not acting as the Agent, and Société
Générale and its Affiliates may accept fees and other consideration from the
Borrower for services in connection with this Agreement or otherwise without
having to account for the same to the Lenders.

 

10.05 Indemnification. The Lenders agree to indemnify the Agent and the
Collateral Agent (to the extent not reimbursed under Section 6.06 of the
Collateral Agency Agreement or Section 11.03, as applicable, but without
limiting the obligations of the Borrower under such Section 6.05 or Section 6.06
of the Collateral Agency Agreement or Section 11.03, as applicable) ratably in
accordance with the aggregate principal amount of the Loans held by the Lenders
(or, if no Loans are at the time outstanding, ratably in accordance with their
respective Commitments), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against such Person (including by any Lender) including, without
limitation, any Environmental Claims or other obligations or liabilities arising
under any

 

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Environmental Law arising out of or by reason of any investigation or any way
relating to or arising out of this Agreement or any other Transaction Document
or any other documents contemplated by or referred to in this Agreement or in
the other Transaction Documents or the transactions contemplated by this
Agreement (including the costs and expenses which the Borrower is obligated to
pay under Section 6.06 of the Collateral Agency Agreement or Section 11.03, as
applicable, but excluding, unless a Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties) or the enforcement of any of the terms of this Agreement or of
the other Transaction Documents or of any such other documents; provided, that
no Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Person to be indemnified.

 

10.06 Non-Reliance on Agent, Collateral Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent, the
Collateral Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent, the Collateral Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any other Transaction
Document. Neither the Agent nor the Collateral Agent shall be required to keep
itself informed as to the performance or observance by the Borrower or any other
Person of this Agreement or any other Transaction Document or any other document
referred to or provided for in this Agreement or in any other Transaction
Document or to inspect the Properties or books of the Borrower or such other
Person. Without limiting the generality of the foregoing, reference is hereby
made to the provisions of Article VI of the Collateral Agency Agreement, and the
limitations on certain responsibilities of the Collateral Agent contained
therein; the provisions of Article VI of the Collateral Agency Agreement are
incorporated by this reference as if set forth in full herein. The Agent and the
Collateral Agent shall promptly make available to the Lenders (through
Intralinks or otherwise) copies of all notices, reports and other documents that
the Borrower is required to provide to the Lenders (including the materials
contemplated in Section 8.01 hereof) pursuant to the terms of the Financing
Documents.

 

10.07 Failure to Act. Except for action expressly required of the Agent under
this Agreement and under the other Financing Documents to which the Agent is
intended to be a party, the Agent shall in all cases be fully justified in
failing or refusing to act under this Agreement and under the other Financing
Documents unless it shall receive further assurances to its satisfaction from
the Lenders of their indemnification obligations under Section 10.05 against any
and all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

 

10.08 Resignation or Removal of Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent may resign at any time by
notice to the Lenders and the Borrower, and the Agent may be removed at any time
with or without cause by the Majority Lenders. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a successor Agent,
which successor Agent shall (so long as no Event of Default has occurred and is
continuing) be reasonably acceptable to the Borrower. If no

 

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successor Agent shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within 30 days after the retiring Agent’s giving
of notice of resignation or the Majority Lenders’ removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be an Acceptable Bank which has an office in New York, New
York, which successor Agent shall (so long as no Event of Default has occurred
and is continuing) be reasonably acceptable to the Borrower. Upon the acceptance
of any appointment as Agent by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement and the other Financing Documents to
which it is intended to be a party. After any retiring Agent’s resignation or
removal as Agent, the provisions of this Article X shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Agent.

 

10.09 Consents under Transaction Documents. Except as otherwise provided in
Section 11.04 with respect to any modification, supplement or waiver under this
Agreement, the Agent shall, upon the prior consent of the Majority Lenders
(except to the extent otherwise provided in this Agreement), consent to (and
shall direct the Collateral Agent, if applicable, to enter into) any
modification, supplement or waiver under any other such Financing Document to
which the Agent or the Collateral Agent is intended to be a party; provided,
that without the prior consent of each Lender, the Agent shall not (and, if
applicable, shall not direct the Collateral Agent to) (except as contemplated in
this Agreement or in the Security Documents) release any Collateral or otherwise
terminate any Lien under any Security Document, or agree to additional
obligations being secured by the Collateral (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the other obligations
secured by such Security Document and is otherwise permitted under this
Agreement or the Security Documents), except that no such consent shall be
required, and the Agent is hereby authorized, to release (and to direct the
Collateral Agent to release) any Lien covering Property of the Borrower or any
other Person which is the subject of a disposition of Property of the Borrower
or such other Person which is permitted or contemplated under this Agreement or
under the relevant Security Document or to which the Lenders have otherwise
consented.

 

10.10 Appointment of Collateral Agent. Each Lender hereby irrevocably authorizes
the Agent to act as its agent under the Collateral Agency Agreement to appoint
the Collateral Agent and Securities Intermediary thereunder on behalf of such
Lender and the other Secured Parties, such appointment subject to the terms and
conditions of such agreement.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.01 Waiver. No failure on the part of the Agent or any Lender to exercise and
no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or any other Financing Document shall
operate as a waiver of such right, remedy, power or privilege, and no single or
partial exercise of any right, power or privilege under this Agreement or any
other Financing Document shall preclude any other or further exercise of such
right, remedy, power or privilege, or the exercise of any other right, power or

 

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privilege. The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. All covenants of the Borrower and the
Pledgors set forth in this Agreement and the other Financing Documents and all
Events of Default set forth in Section 9.01 shall be given independent effect so
that, in the event that a particular action or condition is not permitted by the
terms of any such covenant or would result in a Default, the fact that such
event or condition could be permitted by an exception to, or be otherwise within
the limitations of, another covenant or another Event of Default shall not avoid
the occurrence of a Default or an Event of Default in the event that such action
is taken or condition exists.

 

11.02 Notices. All notices, requests and other communications provided for in
this Agreement and under the Financing Documents (including any modifications
of, or waivers or consents under, this Agreement) shall be given or made in
writing (including by telecopy) delivered to the intended recipient at the
“Address for Notices” specified below its name on the signature pages of this
Agreement or in the relevant section as specified in other Financing Documents,
as to any party, or at such other address as shall be designated by such party
in a notice to each other party. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given when transmitted
by telecopy or personally delivered or, in the case of a mailed notice or notice
sent by courier, upon receipt, in each case given or addressed as set forth
above.

 

11.03 Expenses; Etc. The Borrower agrees to pay or reimburse each of the Lenders
and the Agent for: (a) all reasonable out-of-pocket costs and expenses of the
Agent (including the reasonable fees and expenses of Milbank, Tweed, Hadley &
McCloy LLP, counsel to the Agent (or such other counsel that the Agent may
select from time to time which, so long as no Default has occurred and is
continuing, shall be reasonably satisfactory to the Borrower)) and experts
(including the Independent Engineer and the Insurance Advisor) engaged by the
Agent or the Lenders from time to time, in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the other Transaction
Documents and the extensions of credit under this Agreement, (ii) any amendment,
modification or waiver of any of the terms of this Agreement or any other
Transaction Document and (iii) the syndication of Commitments or Loans, (b) all
reasonable costs and expenses of the Lenders and the Agent (including reasonable
counsels’ fees and expenses and reasonable experts’ fees and expenses) in
connection with (i) any Default and any enforcement or collection proceedings
resulting from such Default or in connection with the negotiation of any
restructuring or “work-out” (whether or not consummated) of the obligations of
the Borrower under this Agreement or the obligations of any Project Party under
any other Transaction Document and (ii) the enforcement of this Section 11.03(b)
and all transfer, stamp, documentary or other similar taxes, assessments or
charges levied by any Government Authority in respect of this Agreement or any
other Transaction Document or any other document referred to in this Agreement
or in any such other Transaction Document and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any Lien contemplated by this Agreement
or any other Transaction Document to which the Agent or the Collateral Agent is
intended to be a party or any other document referred to in this Agreement or in
any such other Transaction Document.

 

The Borrower hereby agrees to indemnify the Agent and each Lender and their
respective officers, directors, employees, representatives, attorneys and agents
(each, an

 

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“Indemnitee”) from, and shall hold each of them harmless against, any and all
losses, liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including the reasonable fees and expenses of counsel for each Indemnitee in
connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not such Indemnitee shall be designated a
party to any such proceeding) that may at any time (including at any time
following the Termination Date) be imposed on, asserted against or incurred by
an Indemnitee as a result of, or arising out of, or in any way related to or by
reason of any claim of third parties with respect to (a) any of the transactions
contemplated by this Agreement or by any other Transaction Document or the
execution, delivery or performance of this Agreement or any other Transaction
Document, (b) the extensions of credit under this Agreement or the actual or
proposed use by the Borrower of any of the extensions of credit under this
Agreement or the grant to the Agent or the Collateral Agent for the benefit of,
or to any of, the Secured Parties of any Lien on the Collateral or in any other
Property of the Borrower or any other Person or any membership, partnership or
equity interest in the Borrower or any other Person and (c) the exercise by the
Agent or the Collateral Agent (or the other Secured Parties) of their rights and
remedies (including foreclosure) under any Security Document (but excluding, as
to any Indemnitee, any Excluded Taxes, any such losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements incurred solely by reason of the gross negligence or willful
misconduct of such Indemnitee as finally determined by a court of competent
jurisdiction or attributable to actions or events occurring after the Borrower
is divested of the applicable Collateral). Without limiting the generality of
the foregoing, the Borrower hereby agrees to indemnify each Indemnitee from, and
shall hold each Indemnitee harmless against, any losses, liabilities, claims,
damages, reasonable expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements described in the preceding sentence (including any Lien
filed against the Project by any Government Authority but excluding, as provided
in the preceding sentence, any such losses, liabilities, claims, damages,
expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements incurred directly and primarily by reason of the gross negligence
or willful misconduct of such Indemnitee as finally determined by a court of
competent jurisdiction) (collectively, “Losses”) arising under any Environmental
Law including any Environmental Claims or other Losses arising as a result of
the past, present or future operations of the Borrower, or the past, present or
future condition of the Project, or any Release or Use or threatened Release of
any Hazardous Materials with respect to the Project (including any such Release
or Use or threatened Release which shall occur during any period when such
Indemnitee shall be in possession of any such site or facility following the
exercise by the Agent or any other Secured Party of any of its rights and
remedies under this Agreement or under any Financing Document or any other
Transaction Document where such Use or Release commenced or occurred prior to
such period); provided, however, that the Borrower shall have no such obligation
to indemnify any Indemnitee to the extent that any such Release or Use is caused
by such Indemnitee’s gross negligence or willful misconduct as determined by a
final non-appealable judgment.

 

11.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement,
any provision of this Agreement may be amended or modified only by an instrument
in writing signed by the Borrower, the Agent, the Collateral Agent and the
Majority Lenders, or by the Borrower and the Agent with the consent of the
Majority Lenders, and any provision of this Agreement may be waived by the
Majority Lenders or by the Agent acting with the consent

 

     - 88 -    CREDIT AGREEMENT

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of the Majority Lenders; provided, that (a) no amendment, modification or waiver
shall, unless by an instrument signed by all of the Lenders or by the Agent
acting with the consent of all of the Lenders (i) increase or extend the term,
or extend the time or waive any requirement for the reduction or termination, of
the Commitments, (ii) extend the date fixed for the payment of principal of or
interest on any Loan or any fee under this Agreement, (iii) reduce the amount of
any such payment of principal, (iv) reduce the rate at which interest is payable
on any such amount or any fee is payable under this Agreement, (v) alter the
rights or obligations of the Borrower to prepay Loans, (vi) alter the terms of
this Section 11.04 or (vii) release any material portion of any Collateral in
any transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on any material portion of the
Collateral in any transaction or series of related transactions to secure any
obligations other than the Secured Obligations owing to the Secured Parties
under the Financing Documents or as may be permitted by Section 8.13 or the
other Financing Documents or (viii) amend the definition of the term (A)
”Majority Lenders” or “Supermajority Lenders” or modify in any other manner the
number or percentage of the Lenders required to make any determinations or waive
any rights under this Agreement or to modify any provision of this Agreement,
(B) ”Permitted Indebtedness” or (C) “Permitted Swap Agreements”, (b) any
amendment, modification, waiver or supplement of Article X shall require the
consent of the Agent and, only to the extent Section 10.05 or Section 10.06 of
Article X would be amended, modified or supplemented as a result thereof, the
Collateral Agent and (c) no amendment, modification or waiver shall, unless by
an instrument signed by the Supermajority Lenders or by the Agent with the
consent of the Supermajority Lenders, (i) amend the definition of “Term
Conversion Date” or (ii) amend, modify or waive the provisions of Section
8.12(g).

 

Anything in this Agreement to the contrary notwithstanding, if at any time when
the conditions precedent set forth in Article VI to any extension of credit
under this Agreement are, in the opinion of the Majority Lenders, satisfied, any
Lender shall fail to fulfill its obligations to make such extension of credit,
then, for so long as such failure shall continue, such Lender shall (unless the
Majority Lenders determined as if such Lender were not a “Lender” under this
Agreement, shall otherwise consent in writing) be deemed for all purposes
relating to amendments, modifications, waivers or consents under this Agreement,
any other Financing Document (including under this Section 11.04 and under
Section 10.09) to have no Loans or Commitments, shall not be treated as a
“Lender” under this Agreement when performing the computation of Majority
Lenders, and shall have no rights under the preceding paragraph of this Section
11.04; provided, that any action taken by the other Lenders with respect to the
matters referred to in clause (a) of the preceding paragraph shall not be
effective as against such Lender.

 

11.05 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties to this Agreement and their respective successors and
permitted assigns.

 

11.06 Assignments and Participations.

 

(a) The Borrower may not assign its rights or obligations under this Agreement
without the prior consent of all of the Lenders and the Agent.

 

     - 89 -    CREDIT AGREEMENT

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(b) Each Lender may assign any or all of its Loans and its Commitments (i)
during the syndication by the Lead Arrangers (which shall continue until written
notice of completion of syndication is provided by the Lead Arrangers), with the
consent of the Lead Arrangers (not to be unreasonably withheld or delayed),
after consultation with the Borrower, (ii) during the continuance of an Event of
Default, with the consent of the Agent (not to be unreasonably withheld or
delayed), (iii) at any time not otherwise included in clause (i) or (ii), with
the consent of the Agent (not to be unreasonably withheld or delayed) and the
consent of the Borrower (not to be unreasonably withheld or delayed) and (iv) at
any time to any Affiliate of any Lender or funding vehicle established by such
Lender, without the consent of the Borrower or the Agent, provided, that (A) in
the case of clause (iii), the Borrower may withhold its consent if such
assignment is expected to result in increased costs to the Borrower under
Section 5.02, (B) in each case, any such partial assignment shall be in an
amount at least equal to $5,000,000 and (C) in the case of any partial
assignment, the assigning Lender shall retain Loans or commitments of at least
$5,000,000. Upon execution and delivery by the assignee to the Borrower and the
Agent of an assignment and acceptance substantially in the form of the attached
Exhibit H, and upon consent to such assignment and acceptance by the Agent and
the Borrower, to the extent required above, the assignee shall have, to the
extent of such assignment (unless otherwise provided in such assignment with the
consent of the Borrower and the Agent), the obligations, rights and benefits of
a Lender under this Agreement holding the Commitment and Loans (or portions
thereof) assigned to it (in addition to the Commitment and Loans, if any,
previously held by such assignee) and the assigning Lender shall, to the extent
of such assignment, be released from the Commitment (or portion thereof) so
assigned. Upon each such assignment (other than such an assignment by the Agent)
the assigning Lender shall pay the Agent an assignment fee of $3,500.

 

(c) A Lender, without the consent of the Borrower or the Agent, may sell or
agree to sell to one or more other Persons a participation in all or any part of
any Loan held by it, or in its Commitments (provided, that partial
participations shall be in an amount at least equal to $5,000,000 and the
assigning Lender shall retain Loans or commitments of at least $5,000,000), in
which event each purchaser of a participation (a “Participant”) shall have the
rights, benefits and obligations of the provisions of Section 5.02 (except that
any such Participant shall be entitled only to the extent that the Lender from
which such Participant acquired its participation is entitled, and such Lender
makes such claim on its own behalf because it would have otherwise incurred the
same costs) and of Section 5.04 with respect to its participation in such Loans
and Commitments (and the Borrower shall be directly obligated to such
Participant under such provisions) in each case as if such Participant were a
“Lender” for purposes of such Section, but, except as otherwise provided in
Section 4.07(c), shall not have any other rights or benefits under this
Agreement or any other Financing Document (the Participant’s rights against such
Lender in respect of such participation to be those set forth in the agreements
executed by such Lender in favor of the Participant). In no event shall a Lender
that sells a participation agree with the Participant to take or refrain from
taking any action under this Agreement or under any other Financing Document
except that such Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (i) increase or extend the term, or
extend the time or waive any requirement for the reduction or termination, of
such Lender’s Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the related Loan or Loans, or any portion of any fee
payable to the Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable on any amount under
this

 

     - 90 -    CREDIT AGREEMENT

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Agreement, or reduce any fee or other amount payable to the Participant to a
level below the rate at which the Participant is entitled to receive such
interest or fee, (v) alter the rights or obligations of the Borrower to prepay
the related Loans or (vi) consent to any modification or waiver of this
Agreement or of any Security Document to the extent that such waiver or
modification, under Section 10.09 requires the consent of each Lender.

 

(d) Anything in this Section 11.06 to the contrary notwithstanding, any Lender
may assign or pledge all or any portion of its rights under this Agreement to
secure any obligations of such Lender, including any such pledge or assignment
to any federal reserve lender or any assignment to a special purpose trust or
other entity for purposes of securitization of such Lender’s loans. No such
assignment shall release the assigning Lender from its obligations hereunder.

 

(e) A Lender may furnish any information concerning the Borrower in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants), subject, however, to the
provisions of Section 11.08(b).

 

(f) In connection with any assignment or sale of a participation pursuant to
this Article XI, such assignee or Participant shall comply with Section 5.04(e).

 

(g) Anything in this Section 11.06 to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan held by it to the Borrower or
any of its Affiliates without the prior consent of each Lender.

 

11.07 Marshalling; Recapture. None of the Agent, the Collateral Agent or any
Lender shall be under any obligation to marshal any assets in favor of the
Borrower or any other party or against or in payment of any or all of the
Secured Obligations. To the extent any Lender receives any payment by or on
behalf of the Borrower, all or a portion of which payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to the Borrower or its estate, trustee, receiver, custodian or any
other party under any bankruptcy or insolvency law, state or federal law, common
law or equitable cause, then to the extent of such payment or repayment, the
obligation or part thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of the Borrower to such Lender as of the date
such initial payment, reduction or satisfaction occurred.

 

11.08 Treatment of Certain Information; Confidentiality.

 

(a) The Borrower acknowledges that (i) from time to time financial advisory,
investment banking and other services may be offered or provided to it (in
connection with this Agreement or otherwise) by each Lender or by one or more
subsidiaries or Affiliates of such Lender and (ii) information delivered to each
Lender by the Borrower may be provided to each such subsidiary and Affiliate, it
being understood that any such subsidiary or Affiliate receiving such
information shall be bound by the provisions of Section 11.08(b) as if it were a
Lender under this Agreement.

 

(b) Each Lender, the Agent and the Collateral Agent agrees (on behalf of itself
and each of its Affiliates, directors, officers, employees and representatives)
to keep

 

     - 91 -    CREDIT AGREEMENT

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confidential, in accordance with their customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by the Borrower
pursuant to this Agreement that is identified by the Borrower as being
confidential at the time the same is delivered to such Lender, the Agent or the
Collateral Agent, including information provided by the EPC Contractor pursuant
to Section 9.3 of the EPC Contract; provided, that nothing in this Agreement
shall limit the disclosure of any such information (i) to the extent required by
any Government Rule or judicial process, (ii) to counsel for any of the Lenders,
the Collateral Agent or the Agent, so long as counsel to such parties agrees to
maintain the confidentiality of the information as provided in this Section
11.08(b), (iii) to bank examiners, auditors or accountants, (iv) to the Agent,
the Collateral Agent or any other Lender (or any subsidiary or Affiliate of any
Lender referred to in Section 11.08(a)), (v) after notice to the Borrower (to
the extent such prior notice is legally permitted), in connection with any
litigation to which any one or more of the Lenders, the Collateral Agent or the
Agent is a party and pursuant to which such Lender, the Collateral Agent or the
Agent has been compelled or required to disclose such information in the
reasonable opinion of counsel to such Lender, the Collateral Agent or Agent,
(vi) to the Independent Engineer or the Insurance Advisor or to other experts
engaged by the Agent, the Collateral Agent or any Lender in connection with the
Agreement and the transactions contemplated by this Agreement and the other
Financing Documents, so long as such parties agree to maintain the
confidentiality of the information as provided in this Section 11.08(b), (vii)
to the extent that such information is required to be disclosed to a Government
Authority in connection with a tax audit or dispute, (viii) in connection with
any Default and any enforcement or collection proceedings resulting from such
Default or in connection with the negotiation of any restructuring or “work-out”
(whether or not consummated) of the obligations of the Borrower under this
Agreement or the obligations of any Project Party under any other Project
Document or (ix) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or prospective assignee or
participant) first executes and delivers to the respective Lender a
Confidentiality Agreement substantially in the form of Exhibit I. In no event
shall any Lender, the Collateral Agent or the Agent be obligated or required to
return any materials furnished by the Borrower; provided, however, that any
confidential information retained by such Lender, the Collateral Agent or the
Agent shall continue to be subject to the provisions of this Section 11.08(b).
The obligations of each Lender under this Section 11.08 shall supersede and
replace the obligations of such Lender under any confidentiality letter, or
other confidentiality obligation, in respect of this financing effective prior
to the date of the execution and delivery of this Agreement.

 

11.09 Limitation of Liability. Notwithstanding any other provision of this
Agreement or of any of the other Financing Documents, there shall be no recourse
against any Affiliates of the Borrower or any of their respective stockholders,
partners, members, officers, directors, employees or agents (collectively, the
“Nonrecourse Persons”), for any liability to the Lenders, the Agent or the
Collateral Agent arising under this Agreement or any other Financing Document
and the Lenders, the Agent and the Collateral Agent shall look solely to the
Borrower and the Collateral in exercising their rights and remedies in
connection therewith; provided, however, that (a) the foregoing provisions of
this Section 11.09 shall not constitute a waiver, release or discharge of the
Borrower for any of the Indebtedness or Secured Obligations of the Borrower
under, or any terms, covenants, conditions or provisions of, this Agreement or
any other Financing Document, and the same shall continue until fully and
indefeasibly paid,

 

     - 92 -    CREDIT AGREEMENT

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discharged, observed or performed, (b) the foregoing provisions of this Section
11.09 shall not limit or restrict the right of any Secured Party to name the
Borrower or any other Person as defendant in any action or suit for a judicial
foreclosure or for the exercise of any other remedy under or with respect to
this Agreement, any of the Security Documents or any other Financing Document to
which such Person is a party, or for injunction or specific performance, so long
as no judgment in the nature of a deficiency judgment shall be enforced against
any Nonrecourse Person out of any Property other than the Property of the
Borrower or the Collateral, (c) the foregoing provisions of this Section 11.09
shall not in any way limit, reduce, restrict or otherwise affect any right,
power, privilege or remedy of the Secured Parties (or any assignee or
beneficiary thereof or successor thereto) with respect to, and each and every
Person (including each and every Nonrecourse Person) shall remain fully liable
to the extent that such Person would otherwise be liable for its own actions
with respect to, any fraud, gross negligence or willful misrepresentation, or
willful misappropriation of Project Revenues or any other earnings, revenues,
rents, issues, profits or proceeds from or of the Borrower, the Project or the
Collateral that should or would have been paid as provided in the Financing
Documents or paid or delivered to the Agent (or any assignee or beneficiary
thereof or successor thereto) for any payment required under this Agreement or
any other Financing Document and (d) nothing contained herein shall limit the
liability of: (i) any Person who is a party to any Transaction Document or (ii)
any Person rendering a legal opinion pursuant to Sections 6.01(n) and 6.02(g) or
otherwise, in each case under this clause (d) relating solely to such liability
of such Person as may arise under such referenced agreement, instrument or
opinion. The limitations on recourse set forth in this Section 11.09 shall
survive the termination of this Agreement and the full and indefeasible payment
and performance of the Secured Obligations.

 

11.10 Survival. The obligations under Sections 5.02, 5.03, 5.04, 11.03, 11.17,
11.18, and 11.19 and the obligations of the Lenders under Section 10.05 shall
survive after the Termination Date. In addition, each representation and
warranty made, or deemed to be made by a notice of any extension of credit, in
this Agreement or pursuant to this Agreement shall survive the making of such
representation and warranty, and no Lender shall be deemed to have waived, by
reason of making any extension of credit under this Agreement, any Default which
may arise by reason of such representation or warranty proving to have been
false or misleading.

 

11.11 Captions. The table of contents and captions and section headings
appearing in this Agreement are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.

 

11.12 Counterparts; Integration; Effectiveness. This Agreement may be executed
in any number of counterparts, all of which taken together shall constitute one
and the same instrument and any party to this Agreement may execute this
Agreement by signing any such counterpart; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signatures are physically attached to the same counterpart. This Agreement and
the other Financing Documents constitute the entire agreement and understanding
among the parties to this Agreement with respect to the matters covered by this
Agreement and the other Financing Documents and supersede any and all prior
agreements and understandings, written or oral, with respect to such matters.
This Agreement shall become effective at such time as the Agent shall have
received counterparts of this Agreement signed by all of the intended parties to
this Agreement.

 

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11.13 Reinstatement. The obligations of the Borrower under this Agreement shall
be automatically reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must be otherwise restored by any holder of any of the Secured
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Borrower agrees that it will indemnify each
Secured Party on demand for all reasonable costs and expenses (including fees of
counsel) incurred by such Secured Party in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.

 

11.14 Severability. Any provision of this Agreement held to be invalid, illegal
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions of this Agreement; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

 

11.15 Remedies. The Borrower agrees that, as between the Borrower and the
Lenders, the obligations of the Borrower under this Agreement may be declared to
be forthwith due and payable as provided in Article IX (and shall be deemed to
have become automatically due and payable in the circumstances provided in
Article IX), and that, in the event of such declaration (or such obligations
being deemed to have become automatically due and payable), such obligations
shall forthwith become due and payable by the Borrower.

 

11.16 NO THIRD PARTY BENEFICIARIES. THE AGREEMENT OF THE LENDERS TO MAKE THE
LOANS TO THE BORROWER, ON THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT,
IS SOLELY FOR THE BENEFIT OF THE BORROWER, THE AGENT, THE COLLATERAL AGENT,
SECURITIES INTERMEDIARY AND THE LENDERS, AND NO OTHER PERSON (INCLUDING ANY
OTHER PROJECT PARTY, CONTRACTOR, SUBCONTRACTOR, SUPPLIER, WORKMAN, CARRIER,
WAREHOUSEMAN OR MATERIALMAN FURNISHING LABOR, SUPPLIES, GOODS OR SERVICES TO OR
FOR THE BENEFIT OF THE PROJECT) SHALL HAVE ANY RIGHTS UNDER THIS AGREEMENT OR
UNDER ANY OTHER TRANSACTION DOCUMENT AS AGAINST THE AGENT OR ANY LENDER OR WITH
RESPECT TO ANY EXTENSION OF CREDIT CONTEMPLATED BY THIS AGREEMENT.

 

11.17 SPECIAL EXCULPATION. TO THE EXTENT PERMITTED BY APPLICABLE GOVERNMENT
RULE, NO CLAIM MAY BE MADE BY ANY PARTY HERETO AGAINST ANY OTHER PARTY HERETO OR
ANY OF THEIR RESPECTIVE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR
AGENTS FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT
OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT
OF OR RELATING TO, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION WITH
THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR THE OTHER

 

     - 94 -    CREDIT AGREEMENT

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FINANCING DOCUMENTS (OTHER THAN THE RIGHTS OF THE LENDERS EXPRESSLY SET FORTH IN
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS), AND EACH PARTY HEREBY WAIVES,
RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR
NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

 

11.18 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE. THE PARTIES
HEREBY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT AND STATE COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS. EACH OF THE
PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER
HEREBY APPOINTS AND DESIGNATES CT CORPORATION SYSTEM, WHOSE ADDRESS IS 111
EIGHTH AVENUE, 13TH FLOOR, NEW YORK, NY 10011, OR ANY OTHER PERSON HAVING AND
MAINTAINING A PLACE OF BUSINESS IN THE STATE OF NEW YORK WHOM SUCH PLEDGOR MAY
FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN 30 DAYS’ NOTICE THEREOF TO
THE COLLATERAL AGENT AND EACH HOLDER OF A NOTE THEN OUTSTANDING), AS THE DULY
AUTHORIZED AGENT FOR RECEIPT OF SERVICE OF LEGAL PROCESS. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE PARTIES TO BRING PROCEEDINGS IN THE COURTS OF ANY OTHER
JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW.

 

11.19 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT, THE COLLATERAL AGENT AND
THE LENDERS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS.

 

     - 95 -    CREDIT AGREEMENT

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

 

BORROWER:

SABINE PASS LNG, L.P.

By:

 

Sabine Pass LNG – GP, Inc.,

   

its General Partner

   

By:

 

/s/ Don A. Turkleson

--------------------------------------------------------------------------------

   

Name:

 

Don A. Turkleson

   

Title:

 

Secretary

Address for Notices:

717 Texas Avenue, Suite 3100

Houston, Texas 77002

Attn: Treasurer

With a copy to:

Andrews Kurth LLP

600 Travis, Suite 4200

Houston, Texas 77002

Attn: Timothy J. Unger, Esq.

 

Credit Agreement

--------------------------------------------------------------------------------

AGENT:

SOCIÉTÉ GÉNÉRALE

By:

 

/s/ Leon Valera

--------------------------------------------------------------------------------

Name:

 

Leon Valera

Title:

 

Director

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

Address for Notices:

1221 Avenue of the Americas

New York, NY 10020

Attn: Robert Preminger

Telephone: 212-278-5703

Fax: 212-278-6136

 

Credit Agreement

--------------------------------------------------------------------------------

COLLATERAL AGENT:

HSBC BANK USA, NATIONAL ASSOCIATION

By:

 

/s/ Deirdra N. Ross

--------------------------------------------------------------------------------

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.

 

Credit Agreement

--------------------------------------------------------------------------------

LENDERS: HSBC BANK USA, NATIONAL ASSOCIATION By:  

/s/ George Linhart

--------------------------------------------------------------------------------

Name:   George Linhart Title:   Senior Vice President By:  

 

--------------------------------------------------------------------------------

Name:     Title:     Address for Notices: 452 Fifth Avenue New York, NY 10018
Attn: George Linhart Telephone: 212-525-3326 Fax: 212-525-2479 With a Copy to:
Telephone: Fax:

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

BANCA INTESA S.P.A. NEW YORK BRANCH By:  

/s/ Nicholas A. Matacchieri

--------------------------------------------------------------------------------

Name:   Nicholas A. Matacchieri Title:   Director By:  

/s/ Anthony F. Giobbi

--------------------------------------------------------------------------------

Name:   Anthony F. Giobbi Title:   First Vice President Address for Notices: 1
William Street New York, NY 10004 Attn: Nick Matacchieri Telephone: 212-607-3865
Fax: 212-809-9780 With a Copy to: 1 William Street New York, NY 10004 Attn: Alex
Papace Telephone: 212-607-3531 Fax: 212-607-3897

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

WESTLB AG, NEW YORK BRANCH By:  

/s/ Roland DaCosta

--------------------------------------------------------------------------------

Name:   Roland DaCosta Title:   Associate Director By:  

/s/ Eva Steinhaus

--------------------------------------------------------------------------------

Name:   Eva Steinhaus Title:   Manager Address for Notices: 1211 Avenue of the
Americas New York, NY 10036 Attn: Eva Steinhaus Telephone: 212-597-8529 Fax:
212-597-1157

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

BAYERISCHE LANDESBANK By:  

/s/ Norman McClave

--------------------------------------------------------------------------------

Name:   Norman McClave Title:   First Vice President By:  

/s/ James King

--------------------------------------------------------------------------------

Name:   James King Title:   First Vice President Address for Notices: 560
Lexington Avenue New York, NY 10022 Attn: Ed Fenk Telephone: 212-230-9074 Fax:
212-230-9117

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

  LRP LANDESBANK RHEINLAND- PFALZ By:  

/s/ Hr. Stahl

--------------------------------------------------------------------------------

Name:   Hr. Stahl Title:   SVP By:  

/s/ Schmidt

--------------------------------------------------------------------------------

Name:   Schmidt Title:   AVP Address for Notices: Grosse Bleiche 54-56 55098
Mainz Germany Attn: W.R. Stahl Telephone: 49-61-3113-2747 Fax: 49-61-3113-2266
With a Copy to: Grosse Bleiche 54-56 55098 Mainz Germany Attn: Mario Schmidt
Telephone: 49-61-3113-3206 Fax: 49-61-3113-2266

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

ERSTE BANK DER

OESTERREICHISCHEN SPARKASSEN AG

By:  

/s/ Patrick Kunkel

--------------------------------------------------------------------------------

Name:   Patrick Kunkel Title:   Director By:  

/s/ John Fay

--------------------------------------------------------------------------------

Name:   John Fay Title:   Director Address for Notices: 280 Park Avenue – West
Building New York, NY 10017 Attn: Patrick Kunkel Telephone: 212-984-5637 Fax:
212-984-5627

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

CIC CRÉDIT INDUSTRIEL ET COMMERCIAL By:  

/s/ Annick Kellerhals

--------------------------------------------------------------------------------

Name:   Annick Kellerhals Title:     By:  

/s/ Mark D. Palin

--------------------------------------------------------------------------------

Name:   Mark D. Palin Title:   Vice President Address for Notices: 4 rue Gaillon
75107 Paris Cedex 02 FRANCE Attn: Mark D. Palin Telephone: 33-1-42-66-76-27 Fax:
33-1-42-66-78-38 With a Copy to: 4 rue Gaillon 75107 Paris Cedex 02 FRANCE Attn:
Annick Kellerhals Telephone: 33-1-42-66-70-77 Fax: 33-1-42-66-78-97

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LANDESBANK SACHSEN GIROZENTRALE By:  

/s/ Olaf Müller

--------------------------------------------------------------------------------

Name:   Olaf Müller Title:   Head of Project Finance By:  

/s/ Markus Weber

--------------------------------------------------------------------------------

Name:   Markus Weber Title:   Senior Project Manager Address for Notices:
Humboldtstrasse 25 D-04105 Leipzig Germany Attn: Markus Weber Telephone:
49-341-979-3133 Fax: 49-341-979-3169 With a Copy to: Humboldtrstrasse 25 D-04105
Leipzig Germany Attn: Olaf Müller Telephone: 49-341-979-3179 Fax:
49-341-979-3169

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

MIZUHO CORPORATE BANK, LTD. By:  

/s/ Masatoshi Abe

--------------------------------------------------------------------------------

Name:   Masatoshi Abe Title:   Senior Vice President Address for Notices: 1251
Avenue of the Americas New York, NY 10020-1104 Attn: Hiroe Nikaido Telephone:
212-282-3552 Fax: 212-282-3618 With a Copy to: 1251 Avenue of the Americas New
York, NY 10020-1104 Attn: Evan Levy Telephone: Fax:

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DVB BANK AG By:  

/s/ Eckhard Aschermann

--------------------------------------------------------------------------------

Name:   Eckhard Aschermann Title:   Vice President By:  

/s/ Dr. Christoph Tomas

--------------------------------------------------------------------------------

Name:   Dr. Christoph Tomas Title:   Vice President Address for Notices:
Friedrich-Ebert-Anlage 2-14 60325 Frankfurt/Main Germany Attn: Thomas Meckel
Telephone: 49-69-97504-7933 Fax: 49-69-97504-477 With a Copy to:
Friedrich-Ebert-Anlage 60325 Frankfurt/Main Germany Attn: Burkhard Egbers
Telephone: 49-69-97504-543 Fax: 49-69-97504-323

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LANDESBANK SAAR By:  

/s/ Johannes Klumpp

--------------------------------------------------------------------------------

Name:   Johannes Klumpp Title:   Assistant Vice President By:  

/s/ Hans Jürgen Schmidt

--------------------------------------------------------------------------------

Name:   Hans Jürgen Schmidt Title:   Senior Vice President Address for Notices:
Ursulinenstraße 2 D-66111 Saarbrücken Germany Attn: Johannes Klumpp Telephone:
49-68-1383-1441 Fax: 49-68-1383-1208 With a Copy to: Ursulinenstraße 2 D-66111
Saarbrücken Germany Attn: Hans Jürgen Schmidt Telephone: 49-68-1383-1371 Fax:
49-68-1383-1234

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DEKABANK DEUTSCHE GIROZENTRALE By:  

/s/ Stephan Wagner

--------------------------------------------------------------------------------

Name:   Stephan Wagner Title:   Director By:  

/s/ Peter Bahn

--------------------------------------------------------------------------------

Name:   Peter Bahn Title:   Senior Credit Manager Address for Notices:
Taunusanlage 10 60329 Frankfurt am Main Germany Attn: Peter Bahn Telephone:
49-69-7147-2586 Fax: 49-69-7147-3809

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

COBANK, ACB By:  

/s/ Jose Torres-Monllor

--------------------------------------------------------------------------------

Name:   Jose Torres-Monllor Title:   Vice President Address for Notices: 5500
South Quebec St. Greenwood Village, CO 80111 Attn: Deann Sullivan Telephone:
303-740-4315 Fax: 303-740-4021 With a Copy to: 5500 South Quebec St. Greenwood
Village, CO 80111 Attn: Terry Fountain Telephone: 303-694-5864 Fax: 303-224-2553

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

UNION BANK OF CALIFORNIA, N.A. By:  

/s/ Bryan Read

--------------------------------------------------------------------------------

Name:   Bryan Read Title:   Vice President Address for Notices: 445 S. Figueroa
Street, 15th Floor Los Angeles, CA 90071 Attn: Chad Canfield Telephone:
213-236-6175 Fax: 213-236-4096 With a Copy to: 445 S. Figueroa Street, 15th
Floor Los Angeles, CA 90071 Attn: Bryan Read Telephone: 213-236-4128 Fax:
213-236-4096

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

UFJ BANK LIMITED By:  

/s/ James Boyle

--------------------------------------------------------------------------------

Name:   James Boyle Title:   Vice President Address for Notices: 55 East 52nd
Street New York, NY 10055 Attn: Marlin Chin, Loan Administration Telephone:
212-339-6392 Fax: 212-754-2368

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

FIRST COMMERCIAL BANK NEW YORK AGENCY By:  

/s/ Bruce M. J. Ju

--------------------------------------------------------------------------------

Name:   Bruce M. J. Ju Title:   General Manager Address for Notices: 750 Third
Avenue, 34th Floor New York, NY 10017 Attn: Marco Hsu Telephone: 212-599-6868
Ext 216 Fax: 212-599-6133

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

STANDARD CHARTERED BANK By:  

/s/ Paul Clifford

--------------------------------------------------------------------------------

Name:   Paul Clifford Title:   SVP&Head, PF Americas Address for Notices: One
Madison Avenue, 3rd Floor New York, NY 10010 Attn: Jowser De La Merced
Telephone: 212-667-0211 Fax: 212-667-0272 With a Copy to: One Madison Avenue,
3rd Floor New York, NY 10010 Attn: Paul Clifford Telephone: 212-667-0246 Fax:
212-667-0272

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

ING CAPITAL LLC By:  

/s/ Subha Pasumarti

--------------------------------------------------------------------------------

Name:   Subha Pasumarti Title:   Director Address for Notices: 1325 Avenue of
the Americas 8th Floor New York, NY 10019 Attn: Subha Pasumarti Telephone:
646-424-7769 Fax: 646-424-7484

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

ALLIED IRISH BANKS PLC By:  

/s/ Robert Moyle

--------------------------------------------------------------------------------

Name:   Robert Moyle Title:   Vice President By:  

/s/ Aidan Lanigan

--------------------------------------------------------------------------------

Name:   Aidan Lanigan Title:   Vice President Address for Notices: Allied Irish
Banks, p.l.c. 405 Park Ave 4th Floor New York, NY 10022 Attn: Robert Moyle
Telephone: 212-515-6744 Fax: 212-339-8325 With a Copy to: Allied Irish Banks,
p.l.c. 405 Park Ave 4th Floor New York, NY 10022 Attn: Aidan Lanigan Telephone:
212-515-6837 Fax: 212-339-8325

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DnB NOR BANK ASA By:  

/s/ Stig Kristiansen

--------------------------------------------------------------------------------

Name:   Stig Kristiansen Title:   Vice President By:  

/s/ Peter M. Dodge

--------------------------------------------------------------------------------

Name:   Peter M. Dodge Title:   Senior Vice President Address for Notices: 200
Park Avenue 31st Floor New York, NY 10166 Attn: Stig Kristiansen Telephone:
212-681-3865 Fax: 212-681-3900

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SOCIÉTÉ GÉNÉRALE By:  

/s/ Leon Valera

--------------------------------------------------------------------------------

Name:   Leon Valera Title:   Director By:  

 

--------------------------------------------------------------------------------

Name:     Title:     Address for Notices: 1221 Avenue of the Americas New York,
NY 10020 Attn: Robert Preminger Telephone: 212-278-5703 Fax: 212-278-6136

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE GOVERNOR AND COMPANY OF         THE BANK OF SCOTLAND By:  

/s/ Stuart A. Jones

--------------------------------------------------------------------------------

Name:   Stuart A. Jones Title:   Director Address for Notices: New Uberior House
12 Earl Grey Stret Edinburgh, UK Attn: Martin Metcalf Telephone:
44-0-131-659-0748 Fax: With a Copy to: New Uberior House 12 Earl Grey Street
Edinburgh, UK Attn: Alastair Malcolm Tel: Fax:

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SUMITOMO MITSUI BANKING         CORPORATION, NEW YORK BRANCH By:  

/s/ David Buck

--------------------------------------------------------------------------------

Name:   David Buck Title:   Senior Vice President By:  

 

--------------------------------------------------------------------------------

Name:     Title:     Address for Notices: Sumitomo Mitsui Banking Corp., New
York 277 Park Avenue New York, NY 10172 Attn: Kyle Blake Telephone: 212-224-4189
Fax: 212-224-5222

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

NORDDEUTSCHE LANDESBANK         GIRONZENTRALE NEW YORK         BRANCH AND/OR
CAYMAN         ISLANDS BRANCH By:  

/s/ Bruno J-M. Mejean

--------------------------------------------------------------------------------

 

/s/ Stefanie Scholz

--------------------------------------------------------------------------------

Name:   Bruno J-M. Mejean   Stefanie Scholz Title:   Senior Vice President  
Vice President Address for Notices: 1114 Avenue of the Americas, 37th Fl. New
York, NY 10036 Attn: Stefanie Scholz Telephone: 212-812-6834 Fax: 212-812-6888

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE BANK OF NOVA SCOTIA

By:

 

/s/ V. H. Gibson

--------------------------------------------------------------------------------

Name:

  V. H. Gibson

Title:

  Assistant Agent

Address for Notices:

The Bank of Nova Scotia

600 Peachtree St. NE, Suite 2700

Atlanta, GA 30308

Attn: Donna Gardner

Telephone: 404-877-1559

Fax: 404-888-8998

With a Copy to:

Houston Representative Office

1100 Louisiana, Suite 3000

Houston, TX 77002

Attn: Mike Roberts

Telephone: 713-759-3449

Fax: 713-752-2425

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

RZB FINANCE LLC

By:

 

/s/ Juan M. Csillagi

--------------------------------------------------------------------------------

Name:

  Juan M. Csillagi

Title:

  Group Vice President

By:

 

/s/ Christoph Hoedl

--------------------------------------------------------------------------------

Name:

  Christoph Hoedl

Title:

  Group Vice President

Address for Notices:

24 Grassy Plain Street

Bethel, CT 06801

Attn: Stephen Plauché

Telephone: 713-260-9697

Fax: 212-944-2093

With a Copy to:

24 Grassy Plain Street

Bethel, CT 06801

Attn: Shirley Ritch

Telephone: 203-207-7738

Fax: 203-744-6474

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE

By:

 

/s/ Erica Egan

--------------------------------------------------------------------------------

Name:

  Erica Egan

Title:

  Vice President

By:

 

/s/ Shan Chakraborty

--------------------------------------------------------------------------------

Name:

  Shan Chakraborty

Title:

  Assistant Vice President

Address for Notices:

420 Fifth Avenue, 24th Floor

New York, NY 10018-2729

Attn: David Leech

Telephone: 212-703-5303

Fax: 212-703-5256

With a Copy to:

420 Fifth Avenue, 24th Floor

New York, NY 10018-2729

Attn: Shan Chakraborty

Telephone:

Fax:

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

COMMERZBANK AG, NEW YORK AND

GRAND CAYMAN BRANCHES

By

  /s/ Andrew Campbell    

--------------------------------------------------------------------------------

    Andrew Campbell     Senior Vice President

By

  /s/ Barbara Stacks    

--------------------------------------------------------------------------------

    Barbara Stacks     Assistant Treasurer

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

CALYON NEW YORK BRANCH

By:

 

/s/ James Guidera

--------------------------------------------------------------------------------

Name:

  James Guidera

Title:

  Managing Director

By:

 

/s/ Francois Coussot

--------------------------------------------------------------------------------

Name:

  Francois Coussot

Title:

  Managing Director

Address for Notices:

1301 Avenue of the Americas

New York, NY 10019-6022

Attn: Ludovic Normand

Telephone: 212-261-7898

Fax: 212-261-3421

With a Copy to:

1301 Avenue of the Americas

New York, NY 10019-6022

Attn: Justine Ventrelli

Telephone: 212-261-7886

Fax: 212-261-3421

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

BANCO SANTANDER CENTRAL HISPANO, S.A., NEW YORK BRANCH

By:

 

/s/ R E Schlegel

--------------------------------------------------------------------------------

Name:

  R E Schlegel

Title:

  VP

By:

 

/s/ A. Cohen

--------------------------------------------------------------------------------

Name:

  A. Cohen

Title:

  VP

Address for Notices:

45 East 53rd Street

New York, NY 10022

Attn: Felipe González

Telephone: 212-407-0997

Fax: 212-350-0740

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

By:

 

/s/ Kristian Andersson

--------------------------------------------------------------------------------

Name:

  Kristian Andersson

Title:

  Head of Exp. & Proj. Finance/Germany

By:

 

/s/ Peter Wikström

--------------------------------------------------------------------------------

Name:

  Peter Wikström

Title:

   

Address for Notices:

Ulmenstrasse 30

D-60283 Frankfurt/Main, Germany

Attn: Peter Wikström

Telephone: 49-69-258-5758

Fax: 49-69-258-5513

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

GENERAL ELECTRIC CAPITAL CORPORATION

By:

 

/s/ Brian Ward

--------------------------------------------------------------------------------

Name:

  Brian Ward

Title:

  Manager – Operations

Address for Notices:

120 Long Ridge Rd.

Stamford, CT 06927-0001

Attn: Doug Sciullo

Telephone: 203-357-6822

Fax: 203-961-5861

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

FORTIS CAPITAL CORP.

By:

 

/s/ Waldo Abbot

--------------------------------------------------------------------------------

Name:

  Waldo Abbot

Title:

  CEO

By:

 

/s/ David James

--------------------------------------------------------------------------------

Name:

  David James

Title:

  Assistant Vice President

Address for Notices:

3 Stamford Plaza

301 Tresser Boulevard, 9th Floor

Stamford, CT 06901-3239

Attn: David James

Telephone: 203-705-5749

Fax: 203-705-5919

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

By:

 

/s/ Scott McInnis

--------------------------------------------------------------------------------

Name:

  Scott McInnis

Title:

  General Manager – Americas

Address for Notices:

1177 Avenue of the Americas, 6F

New York, NY 11036-2798

Attn: Ellen Turkel

Telephone: 212-801-9708

Fax: 212-536-9258

With a Copy to:

1177 Avenue of the Americas, 6F

New York, NY 11036-2798

Attn: Oliver Janin

Telephone: 212-801-9748

Fax: 212-536-4848

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE BANK OF TOKYO – MITSUBISHI, LTD.

By:

 

/s/ Michihiro Enomoto

--------------------------------------------------------------------------------

Name:

  Michihiro Enomoto

Title:

  Senior Vice President and Group Head

Address for Notices:

1251 Avenue of the Americas

10th Floor

New York, NY 10020

Attn: Alec Tasooji

Telephone: 212-782-4193

Fax: 212-782-5870

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

SANPAOLO IMI S.P.A.

By:

 

/s/ Renato Carducci

--------------------------------------------------------------------------------

Name:

  Renato Carducci

Title:

  General Manager

By:

 

/s/ Robert Wurster

--------------------------------------------------------------------------------

Name:

  Robert Wurster

Title:

  Senior Vice President

Address for Notices:

18-24 Warwick Lane

Paternoster Square

London EC4M 7LZ

England

Attn: Mark Cameron

Telephone: 44 0207 214-8027

Fax: 44 0207 236-2698

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

KfW

By:

 

/s/ Dirk Sindermann

--------------------------------------------------------------------------------

Name:

  Dirk Sindermann

Title:

  Vice President

By:

 

/s/ Margrit Nzuki

--------------------------------------------------------------------------------

Name:

  Margrit Nzuki

Title:

  Senior Project Manager

Address for Notices:

Palmengartenstr, 5-9

60325 Frankfurt a M.

Germany

Attn: Margrit Nzuki

Telephone: 49-69-7431-2474

Fax: 49-69-7431-2016

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

ROYAL BANK OF CANADA

By:

 

/s/ Linda M. Stephens

--------------------------------------------------------------------------------

Name:

  Linda M. Stephens

Title:

  Senior Manager

Address for Notices:

Royal Bank of Canada

Grand Cayman (No. American #1) Branch

c/o New York Branch

One Liberty Plaza, 3rd Floor

New York, NY 10006-1404

Attn: Loans Administration Officer-

Compton Singh

Tel: 212-428-6332

Fax: 212-428-2372

With copy to:

Royal Bank of Canada

5700 Williams Tower

2800 Post Oak Blvd.

Houston, TX 77056

Attn: Linda Stephens

Telephone: 713-403-5669

Fax: 713-403-5624

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LLOYDS TSB BANK PLC

By:

 

/s/ Russell Protti

--------------------------------------------------------------------------------

Name:

  Russell Protti

Title:

  Assistant Vice President

By:

 

/s/ Candi Obrentz

--------------------------------------------------------------------------------

Name:

  Candi Obrentz

Title:

  Assistant Vice President      

Address for Notices:

1251 Avenue of the Americas

39th Floor

New York, NY 10020

Attn: Paul Briamonte

Telephone: 212-930-8904

Fax: 212-930-5098

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

By:

 

/s/ Steve Moon

--------------------------------------------------------------------------------

Name:

  Steve Moon

Title:

  Head of Energy

By:

 

/s/ Hisham Faki

--------------------------------------------------------------------------------

Name:

  Hisham Faki

Title:

  Assistant Director

Address for Notices:

La Touche House,

IFSC

Dublin 1, Ireland

Attn: Donal Murphy

Telephone: 353 1 611 5396

Fax: 353 1 672 0046

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

LANDESBANK BADEN-WÜRTTEMBERG

By:

 

/s/ Jeannine Eder

--------------------------------------------------------------------------------

Name:

  Jeannine Eder

Title:

  Vice President

By:

 

/s/ Ute Schultens

--------------------------------------------------------------------------------

Name:

  Ute Schultens

Title:

  Project Manager

Address for Notices:

Friedrichstrasse 24

70174 Stuttgart

Germany

Attn: Ute Schultens

Telephone: 49-71-1124-49707

Fax: 49-71-1124-49747

With a Copy to:

Am Hauptbahnhof 2

70173 Stuttgart

Germany

Attn: Michael Thier

Telephone: 49-71-1127-23941

Fax: 49-71-1127-21687

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

HARRIS NESBITT FINANCING, INC.

By:

 

/s/ James B. Whitmore

--------------------------------------------------------------------------------

Name:

  James B. Whitmore

Title:

  Managing Director

Address for Notices:

700 Louisiana, Suite 4400

Houston, TX 77002

Attn: Cabal Carmody

Telephone: 713-546-9750

Fax: 713-223-4007

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

NEWCOURT CAPITAL USA INC.

By:

 

/s/ R. Clifford Wilson

--------------------------------------------------------------------------------

Name:

  R. Clifford Wilson

Title:

  Managing Director

By:

 

/s/ Daniel Morash

--------------------------------------------------------------------------------

Name:

  Daniel Morash

Title:

  Managing Director

Address for Notices:

1211 Avenue of the Americas, 22nd Floor

New York, NY 10036

Attn: Nicholas Whitcombe

Telephone: 212-382-9091

Fax: 212-382-9033

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DZ BANK AG DEUTSCHE ZENTRAL- GENOSSENSCHAFTSBANK, FRANKFURT AM MAIN, NEW YORK
BRANCH

By:

 

/s/ Daria A. Pishko

--------------------------------------------------------------------------------

Name:

  Daria A. Pishko

Title:

  First Vice President

By:

 

/s/ Glenn R. Patterson

--------------------------------------------------------------------------------

Name:

  Glenn R. Patterson

Title:

  Vice President

Address for Notices:

609 Fifth Avenue

New York, NY 10017-1021

Attn: Daria A. Pishko

Telephone: 212-745-1545

Fax: 212-745-1552

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

NATEXIS BANQUES POPULAIRES

By:

 

/s/ Anadi Jauhari

--------------------------------------------------------------------------------

Name:

  Anadi Jauhari

Title:

  Vice President/Group Manager

By:

 

/s/ Amit Roy

--------------------------------------------------------------------------------

Name:

  Amit Roy

Title:

  Vice President

Address for Notices:

1251 Avenue of the Americas

34th Floor

New York, NY 10020

Attn: Amit Roy

Telephone: 212-872-5123

Fax: 212-872-5162

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

DEXIA CRÉDIT LOCAL, NEW YORK BRANCH

By:

 

/s/ Marc Brugiere

--------------------------------------------------------------------------------

Name:

  Marc Brugiere

Title:

  General Manager – Americas

By:

 

/s/ Guy Cirincione

--------------------------------------------------------------------------------

Name:

  Guy Cirincione

Title:

  Deputy General Manager

Address for Notices:

445 Park Avenue

8th Floor

New York, NY 10022

Attn: Portfolion Management

Telephone: 212-515-7062

Fax: 212-753-5522

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

CAJA MADRID MIAMI AGENCY

By:

 

/s/ Ricardo Benedé

--------------------------------------------------------------------------------

Name:

  Ricardo Benedé

Title:

  Corporate Banking

By:

 

/s/ Gema Gámez

--------------------------------------------------------------------------------

Name:

  Gema Gámez

Title:

  Capital Markets

Address for Notices:

701 Brickell Avenue

Suite 2000

Miami, FL 33131

Attn: Ricardo Benedé

Telephone: 305-371-3833

Fax: 305-373-0402

With a Copy to:

701 Brickell Avenue

Suite 2000

Miami, FL 33131

Attn: Gema Gámez

Telephone: 305-371-3833

Fax: 305-373-0402

 

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX A

to Credit Agreement

 

LENDER COMMITMENTS

 

Institution

--------------------------------------------------------------------------------

   Allocation

--------------------------------------------------------------------------------

HSBC Securities (USA) Inc.

   $ 32,000,000.00

Société Générale

   $ 32,000,000.00

Mizuho Corporate Bank, Ltd.

   $ 25,000,000.00

The Bank of Tokyo-Mitsubishi, Ltd.

   $ 24,000,000.00

ING Capital LLC

   $ 24,000,000.00

Calyon New York Branch

   $ 24,000,000.00

WestLB AG, New York Branch

   $ 20,000,000.00

Allied Irish Banks plc

   $ 18,000,000.00

Australia and New Zealand Banking Group Limited

   $ 18,000,000.00

The Bank of Nova Scotia

   $ 18,000,000.00

Bayerische Landesbank

   $ 18,000,000.00

Caja Madrid Miami Agency

   $ 18,000,000.00

CIC Crédit Industriel et Commercial

   $ 18,000,000.00

CIT

   $ 18,000,000.00

CoBank, ACB

   $ 18,000,000.00

Commerzbank

   $ 18,000,000.00

DekaBank Deutsche Girozentrale

   $ 18,000,000.00

Dexia Credit Local

   $ 18,000,000.00

DnB NOR BANK ASA

   $ 18,000,000.00

DVB Bank AG

   $ 18,000,000.00

DZ Bank

   $ 18,000,000.00

Fortis Capital Group

   $ 18,000,000.00

GE Capital

   $ 18,000,000.00

The Governor and Company of the Bank of Ireland

   $ 18,000,000.00

The Governor and Company of the Bank of Scotland

   $ 18,000,000.00

Harris Nesbitt Financing, Inc.

   $ 18,000,000.00

KfW IPEX-Bank

   $ 18,000,000.00

Landesbank Baden-Württemberg

   $ 18,000,000.00

Landesbank Hessen-Thüringen Girozentrale

   $ 18,000,000.00

Lloyds TSB

   $ 18,000,000.00

LRP Landesbank Rheinland-Pfalz

   $ 18,000,000.00

Norddeutsche Landesbank Girozentrale New York Branch and/or Cayman Islands
Branch

   $ 18,000,000.00

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

Royal Bank of Canada

   $ 18,000,000.00

SANPAOLO IMI S.P.A.

   $ 18,000,000.00

Skandinaviska Enskilda Banken AB (publ)

   $ 18,000,000.00

SMBC

   $ 18,000,000.00

UFJ Bank Limited

   $ 18,000,000.00

Banco Santander Central Hispano, S.A., New York Branch

   $ 12,000,000.00

Banca Intesa S.p.A. New York Branch

   $ 12,000,000.00

Erste Bank der Oesterreichischen Sparkassen AG

   $ 12,000,000.00

Landesbank Sachsen Griozentrale

   $ 12,000,000.00

Natexis Banques Populaires

   $ 12,000,000.00

Standard Chartered Bank

   $ 12,000,000.00

Union Bank of California, N.A.

   $ 12,000,000.00

Landesbank Saar

   $ 7,000,000.00

First Commercial Bank New York Agency

   $ 5,000,000.00

RZB Finance LLC

   $ 5,000,000.00     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Total

   $ 822,000,000.00     

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX B

to Credit Agreement

 

AMORTIZATION SCHEDULE

 

Principal Payment Dates1

--------------------------------------------------------------------------------

   % of Principal of each Lender’s Loans
Outstanding on the Term Conversion
Date

--------------------------------------------------------------------------------

1

   1.35282

2

   1.39759

3

   1.44385

4

   1.49165

5

   1.54102

6

   1.59203

7

   1.59104

8

   1.64669

9

   1.70428

10

   1.76389

11

   1.82558

12

   1.88943

13

   1.85817

14

   1.92994

--------------------------------------------------------------------------------

1 Depending on the timing of the occurrence of the Term Conversion Date, there
may be fewer than 14 Principal Payment Dates since no Principal Payment Date may
occur later than the Final Maturity Date, which is the tenth anniversary of the
Closing Date, at which time all unpaid principal of each Loan shall be due and
payable in accordance with the terms of the Credit Agreement.

 

     - 1 -    APPENDIX B           CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX C

to Credit Agreement

 

WIRE TRANSFER DETAILS OF AGENT

 

Agent:

   Société Générale

ABA:

   026004226 or CHIPS #422

Name of Account:

   Loan Servicing Group

Account Number:

   9051422

Attention:

   Elise Cheung

 

     - 1 -    APPENDIX C           CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX D

to Credit Agreement

 

PROJECT DOCUMENTS WITH AFFILIATES

 

1. Operation and Maintenance Agreement, dated as of February 25, 2005, between
Cheniere LNG O&M Services, L.P., and Sabine Pass LNG, L.P.

 

2. Management Services Agreement, dated as of February 25, 2005, between Sabine
Pass LNG-GP, Inc., and Sabine Pass LNG, L.P.

 

3. J & S Cheniere Terminal Use Agreement.

 

     - 1 -    APPENDIX D           CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX E

to Credit Agreement

 

LEASE AGREEMENTS

 

1. Lease Agreement, dated January 15, 2005, among Crain Brothers Ranch, Inc.,
Marguerite Domatti as Trustee of M.A. Domatti Management Trust, Eva L. Domatti,
individually and as Trustee, Domatti Family Living Trust, Erika Domatti and
Renata Domatti, collectively as Lessor, and Sabine Pass LNG, L.P., as Lessee,
amended by that Amendment to Lease, dated as of February 24, 2005, among Lessor
and Lessee.

 

2. Lease Agreement, dated January 15, 2005, between Crain Lands, L.L.C., as
Lessor and Sabine Pass LNG, L.P., as Lessee, as amended by that Amendment to
Lease, dated as of February 24, 2005, among Lessor and Lessee.

 

3. Commercial Water Bottom Lease, dated February 24, 2005, between the State of
Louisiana, as lessor and Sabine Pass LNG, L.P., as lessee.

 

     - 1 -    APPENDIX E           CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX F

to Credit Agreement

 

CONSTRUCTION BUDGET AND SCHEDULE

 

     - 1 -    APPENDIX F           CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 6.01(j)

to Credit Agreement

 

UCC FILING JURISDICTIONS

 

1. Delaware Secretary of State

 

2. Clerk Court of Cameron Parish, Louisiana, for inclusion in the Louisiana
Secretary of State Master UCC Index.

 

     - 1 -    SCHEDULE 6.01(j)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 7.05(a)

to Credit Agreement

 

GOVERNMENT APPROVALS – CLOSING DATE

 

See attached

 

     - 1 -    SCHEDULE 7.05(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

RESPONSIBLE
AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

  

NAME IN WHICH ISSUED

--------------------------------------------------------------------------------

   DATE RECEIVED

--------------------------------------------------------------------------------

I. FEDERAL

1.0

   Federal Energy Regulatory Commission (FERC)    Authorization under Natural
Gas Act §3, to site, construct and operate LNG terminal in Cameron Parish, LA   
Sabine Pass LNG, L.P.    12/21/04

1.1

   FERC    Authorization to conduct soil testing and site preparation.    Sabine
Pass LNG, L.P.    2/15/05

2.0

   U.S. Army Corps of Engineers (USACE)    Section 10/404 jurisdictional
determination    Cheniere LNG    12/8/03

2.1

        Section 10/404 Construction Permit and Anchorage Area Use Approval   
Cheniere Energy, Inc.    2/11/05

3.0

   Environmental Protection Agency    Elutriate bioaccumulation testing   
Sabine Pass LNG, L.P.    1/26/05 email

4.0

   NOAA Fisheries    EFH    Cheniere Energy, Inc.    12/28/04

4.1

      Federal Endangered Species Consultation    Cheniere Energy, Inc.   
12/14/04

4.2

      DMPA Review    Cheniere Energy, Inc.    4/23/04

5.0

   U.S. Fish and Wildlife Service    FWS concurs that the project site will not
impact piping plover critical habitat. Endangered Species Act coordination
completed.    Cheniere LNG, Inc.    10/15/04,
10/20/04

5.1

        Responded to USACE that they approve of the ARMP    Cheniere Energy,
Inc.    12/17/04

 

     - 2 -    SCHEDULE 7.05(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

     RESPONSIBLE
AGENCY

--------------------------------------------------------------------------------

 

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

  

NAME IN WHICH ISSUED

--------------------------------------------------------------------------------

   DATE RECEIVED

--------------------------------------------------------------------------------

6.0

   Bureau of Indian
Affairs   Tribal Groups Consultation (deferred to local tribes).    Cheniere
Energy, Inc.    7/1/03

7.0

   Natural Resources
Conservation Service   Prime Farmlands Soil impacts coordination and seeding
plan.    Sabine Pass LNG, L.P.    4/6/04

8.0

   Federal Emergency
Management, Region
VI   Construction within a floodplain (Deferred to Local floodplain
administrator - Cameron Parish Police Jury).    N/A    3/5/04

9.0

   United States Coast
Guard   Navigation and Marine Safety issues associated with the LNG terminal
ship traffic    Cheniere LNP, Inc.    7/23/04 II. STATE

10.0

   Texas Commission
on Environmental
Quality, Air Permits
Division   Non-attainment review for air permit (SPLNG not within TCEQ
jurisdiction).    Cheniere LNG, Inc.    4/5/04

11.0

   Louisiana Department
of Environmental
Quality(LDEQ)   New Source Review Preconstruction Permit (Prevention of
Significant Deterioration and Non-Attainment Review)    Cheniere LNG, Inc.,
Sabine Pass LNG, L.P.    11/24/04

11.1

     Groundwater Certification as a part of the air permit approval process   
Cheniere Energy, Inc.    7/23/04

11.2

     Water Quality Certification, Section 401 of CWA (linked to CUP and USACE
Section 404 permits)    Cheniere Energy, Inc.    12/16/04

11.3

     LPDES Storm Water Construction Permit Notice of Intent    Sabine Pass LNG,
L.P.    2/11/2005

11.4

     DMPA review    Cheniere Sabine Pass LNG, L.P.    4/5/04

 

     - 3 -    SCHEDULE 7.05(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

RESPONSIBLE
AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

  

NAME IN WHICH ISSUED

--------------------------------------------------------------------------------

   DATE RECEIVED

--------------------------------------------------------------------------------

12.0

   Louisiana Department of Wildlife and Fisheries (LDWF) and U.S. Fish and
Wildlife    Warmwater Fisheries Time of Year Restrictions   
Cheniere Sabine Pass LNG, L.P.    10/5/04

12.1

        State threatened and endangered species clearance (except piping plover,
however, USFWS provided clearance 10/15/04)    Cheniere LNG, Inc    8/20/03

12.2

        Aquatic Resources Mitigation Plan approved    Cheniere Sabine Pass LNG,
L.P.    12/21/04

13.0

   Louisiana Department of Natural Resources (LDNR)    Coastal Use Permit &
approval for Beneficial Use Plan for Dredged Material    Cheniere Energy, Inc.
   1/7/05

14.0

   Lousiana State Land Office    Commercial Water Bottom Lease    Cheniere
Energy, Inc.    11/30/04, 2/12/05,
2/15/05

15.0

   Louisiana Division of Historic Preservation (LDHP)    Historic Preservation
Approval - Section 106 Environmental Review (applies to entire site)-Updated
Unanticipated Discoveries Plan    Cheniere Energy, Inc.    8/16/04

15.1

        Final Phase I Survey Report (terminal and pipeline combined)    Cheniere
Energy, Inc.    1/12/05

16.0

   Louisiana Department of Culture, Recreation and Tourism    Creole Nature
Trail View shed    Cheniere Energy, Inc.    3/30/04 (telephone
conversation)

17.0

   Louisiana Department of Transportation and Development    Traffic data for
SH82    Cheniere Energy, Inc.    3/23/04 III. LOCAL          

18.0

   Cameron Parish Floodplain Administrator    Permit for Construction in a Zone
“VE” or Variance as: functionality dependent use, Floodplain Development Permit
(linked to USACE permit approval)    Cheniere Energy    7/1/04

 

     - 4 -    SCHEDULE 7.05(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

RESPONSIBLE
AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

  

NAME IN WHICH ISSUED

--------------------------------------------------------------------------------

   DATE RECEIVED

--------------------------------------------------------------------------------

19.0

   Alabama-Coushatta Tribe of Texas    Native American consultation    Cheniere
Energy, Inc.    7/7/03

20.0

   Chitimaca Tribe of Louisiana    Native American consultation    Cheniere
Energy, Inc.    8/12/03

21.0

   Jena Band of Choctaw    Native American consultation    Cheniere Energy, Inc.
   3/30/04

22.0

   Caddo Nation    Native American consultation (Completed responsibility to
consult on Project)    Cheniere Energy, Inc.    7/7/03, 3/26/04 & 3/30/04
telephone calls

23.0

   Tunica-Biloxi Tribe    Native American consultation (Completed responsibility
to consult on Project)    Cheniere Energy, Inc.    7/7/03, 3/26/04 & 3/30/04
telephone calls

24.0

   Coushatta Tribe of Louisiana    Native American consultation (Completed
responsibility to consult on Project)    Cheniere Energy, Inc.    7/7/03,
3/26/04 & 3/30/04
telephone calls

25.0

   West Cameron Port Commission    Permit to Construct Permanent Commercial
Structure    Sabine Pass LNG, L.P.    2/22/05

 

     - 5 -    SCHEDULE 7.05(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 7.05(b)

to Credit Agreement

 

GOVERNMENT APPROVALS – POST-CLOSING DATE

 

See attached list.

 

     - 1 -    SCHEDULE 7.05(b)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

  

Company

--------------------------------------------------------------------------------

  

Date Required By

--------------------------------------------------------------------------------

  

COMMENTS

--------------------------------------------------------------------------------

I. FEDERAL 1.0    Federal Aviation Administration (FAA)    Notice of Proposed
Construction or Alteration - FAA Form 7460-1 (Construction or use of tall
structures including cranes).    Sabine Pass LNG, L.P.    Prior to construction
of Storage Tanks    An Obstruction Evaluation/Airport Airspace Analysis (OE/AAA)
is required if facility will have structures greater than 200 feet or will be
located less than 20,000 ft from an airport. Although the tanks are less than
200 feet tall, there are several public air strips in the vicinity; Therefore,
it is advisable to notify FAA of the project so they can conduct an OE/AAA to
determine if the tanks will require any special marking or additional lighting.
2.0    Federal Communications Commission (FCC)    Mobile Radio Transmitter
permit         Prior to operation of mobile radio transmitter on project site   
  II. STATE 3.0    LaDEQ    Spill Prevention, Control and Countermeasure Plan
(SPCC) for Operating Facility    Sabine Pass LNG, L.P./Bechtel    Plan to be
developed, if needed, 3-6 months prior to initial operation    Threshold level
is 660 gallons for a single, aboveground storage tank; 1,320 gallons for total
aboveground storage. Will likely need for lube oil storage. Prepare before
onsite storage. Plan need not be submitted. 3.1         RCRA Small Quantity
Hazardous Waste Generator Identification Number    Sabine Pass LNG, L.P.    File
if necessary, must obtain generator number prior to onsite storage and disposal
   Required if hazardous waste will exceed the 100 kg/month threshold. Bechtel
to confirm quantity to determine if needed. Cheniere to still get generator ID
number. 3.2         Temporary emergency and non-emergency diesel powered
electrical generators (Operation and emissions of generator engine).    Sabine
Pass LNG, L.P./Bechtel    Within 60 days of Initial Operation    Exhaust
emission testing and reporting required with 60 days of initial operation.

 

     - 2 -    SCHEDULE 7.05(b)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR APPROVAL

--------------------------------------------------------------------------------

    

Company

--------------------------------------------------------------------------------

    

Date Required By

--------------------------------------------------------------------------------

  

COMMENTS

--------------------------------------------------------------------------------

3.3         LDEQ hazardous waste stream notification (Generation of any amount
hazardous waste on the site.)      Sabine Pass LNG, L.P./Bechtel      Not
anticipated, check with Bechtel      3.4         LPDES sanitary wastewater
discharge permit      Sabine Pass LNG, L.P.      Not Anticipated      3.5     
   LPDES Storm Water Multi-sector General Permit (combined facilities)/
industrial water discharge permit application form SCC-2      Sabine Pass LNG,
L.P.      Required Prior to Operation      3.6         LPDES Storm Water
Construction Permit Notice of Intent      Cheniere Sabine Pass Pipeline Company
     48 hours Prior to Commencement of Pipeline Construction      3.7        
LPDES Storm Water Construction Permit Notice of Termination      Sabine Pass
LNG, L.P., Cheniere Sabine Pass Pipeline Company      After Successful
Restoration of Site Conditions, Following Construction      3.8         LPDES
hydrostatic test wastewater discharge permit      Sabine Pass LNG, L.P.,
Cheniere Sabine Pass Pipeline Company      Not Required if Discharging Into DMPA
Area      3.9         Concrete Batch Air Permit      Sabine Pass LNG,
L.P./Bechtel      To be Obtained by November 2005     

 

     - 3 -    SCHEDULE 7.05(b)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

    

AGENCY

--------------------------------------------------------------------------------

  

PERMIT OR
APPROVAL

--------------------------------------------------------------------------------

  

Company

--------------------------------------------------------------------------------

  

Date Required By

--------------------------------------------------------------------------------

  

COMMENTS

--------------------------------------------------------------------------------

4.0   

Louisiana

Department of

Wildlife and

Fisheries

(LDWF)

  

Water Bottom Dredge Permit (Dredging of fill material, sand and gravel from
state-owned water bottoms)

 

   Sabine Pass LNG, L.P.    Not Anticipated to be Needed      4.1       Spill
Prevention Plan (Storage of petroleum products in coastal tidal areas.)   
Sabine Pass LNG, L.P.    Prior to use of petroleum products storage tanks on
site.    LDWF can require that a plan to prevent spills from petroleum product
storage tanks be submitted and approved. This is normally not required for small
portable tanks used in construction work. However, the LDWF must be contacted to
determine requirement for the specific site and tank installation (Bechtel to
determine if needed. Will prepare plan as needed.) 5.0    La. Dept. of Forestry
   Burn Permit    Sabine Pass LNG, L.P.    Prior to Burning on Site (if
required)    We are currently checking with state and local authorities as to
whether this is required. 6.0    TCEQ    Surface Water Acquisition Permit
(Greater than 10-acre feet)    Sabine Pass LNG, L.P.    Prior to Water
Acquisition in Texas Waters    Only needed if acquiring water from Texas water
sources. III. LOCAL 7.0    Johnsons Bayou Fire Department    Fire Protection   
Sabine Pass LNG, L.P.    Prior to Operation of Facility    Checking to see what
is required for this. 8.0    Cameron Parish Police Jury    Occupancy Permit   
Sabine Pass LNG, L.P./Bechtel    To be obtained by October 2005      9.0   
Cameron Parish Police Jury    General Construction Permit    Sabine Pass LNG,
L.P./Bechtel    To be obtained by September 2005      10.0    Cameron Parish
Police Jury    Building Permit    Sabine Pass LNG, L.P.    Prior to Permanent
Building Construction on Site     

 

     - 4 -    SCHEDULE 7.05(b)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 7.07

to Credit Agreement

 

ENVIRONMENTAL MATTERS

 

None.

 

     - 1 -    SCHEDULE 7.07           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 8.05

to Credit Agreement

 

INSURANCE REQUIREMENTS

 

(A) Insurance by the EPC Contractor: The Borrower shall cause the EPC Contractor
to maintain in full force and effect the insurance required to be maintain by
the EPC Contractor pursuant to the EPC Contract.

 

(B) Insurance by the Operator, Anchor Tenants and the Manager: The Borrower
shall cause the Operator, Anchor Tenants to the extent applicable and the
Manager to maintain in full force and effect at all times during the term of the
O&M Agreement insurance policies which are required to be maintained by the
Operator under the O&M Agreement, the Anchor Tenants under the TUAs and the
Manager under the Management Services Agreement, as the case may be.

 

(C) Insurance by the Borrower: The Borrower shall procure or cause another
Person to procure and maintain in full force and effect at all times on and
after the Closing Date (unless otherwise specified below) and continuing
throughout the term of this Agreement (unless otherwise specified below)
insurance policies with insurance companies authorized to do business in
Louisiana (if required by law or regulation) with (i) a Best Insurance Reports
rating of “A-” or better and a financial size category of “IX” or higher, (ii) a
Standard & Poor’s financial strength rating of “BBB+” or higher, or (iii) other
companies acceptable to the Agent, with limits and coverage provisions
sufficient to satisfy the requirements set forth in each of the Material Project
Documents, but in no event less than the limits and coverage provisions set
forth below.

 

  (1) General Liability Insurance: Liability insurance on an occurrence basis
against claims filed anywhere in the world and occurring anywhere in the world
for the Borrower’s liability arising out of claims for personal injury
(including bodily injury and death) and property damage. Such insurance shall
provide coverage for, products-completed operations, blanket contractual, broad
form property damage, personal injury insurance and independent contractors,
with a $10,000,000, increasing to $100,000,000 on or before giving the Notice To
Proceed under the EPC Contract, minimum limit per occurrence for combined bodily
injury and property damage provided that policy aggregates, if any, shall apply
separately to claims occurring with respect to the Project. A maximum deductible
or self-insured retention of $250,000 per occurrence shall be allowed. Coverage
for terrorism shall be provided on or before the arrival of the first LNG
Vessel.

 

  (2) Automobile Liability Insurance: Automobile liability insurance for the
Borrower’s liability arising out of claims for bodily injury and property damage
covering all owned (if any), leased, non-owned and hired vehicles of the
Borrower, including loading and unloading, with a $10,000,000 (increased to
$25,000,000 on giving the Notice To Proceed under the EPC Contract) minimum
limit per accident for combined bodily injury and property damage and containing
appropriate no-fault insurance provisions wherever applicable. A maximum
deductible or self-insured retention of $250,000 per occurrence shall be
allowed.

 

     - 1 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

  (3) Marine General Liability Insurance: On or before giving the Notice To
Proceed under the EPC Contract, marine general liability insurance against
claims for bodily injury, property damage, marine contractual liability,
tankerman’s liability, pollution liability, removal of wreck and/or debris,
collision liability and tower’s liability with the sister-ship clause un-amended
arising out of any vessel or barge owned, rented or chartered by the Borrower,
EPC Contractor, subcontractors or Operator with a $100,000,000 limit per
occurrence provided that policy aggregates, if any, shall apply separately to
claims occurring with respect to the Project. A maximum deductible or
self-insured retention of $250,000 per occurrence shall be allowed.

 

  (4) Marine Terminal Operators Liability Insurance: No later than 3 months
prior to the arrival of the first LNG Vessel, marine terminal operators
liability insurance covering claims arising out of operations including products
and completed operations hazard and independent contractors for all sums which
Owner shall become obligated to pay by reason of bodily injury or property
damage as a result of loss, damage, injury or expense (including expenses for
removal of the spill of a pollutant) and including loss of use, to any vessel
and its equipment, cargo, freight or other interests onboard, the property of
others, including the cost of or expense for the removal of wreck or debris of
such property, while docking, undocking, or while in EPC Contractor’s, Owner’s
or Operator’s custody or possession at the Project Site or while proceeding to
or from the Project Site or caused directly or indirectly by the freeing or
breaking away from such premises. The limit for such insurance shall be set a
level that is reasonably acceptable to Owner and the Agent and sufficient to
cover the maximum probable loss to LNG owned by others and stored at the Site,
LNG Vessel and its contents, but in no case less than $150,000,000. A maximum
deductible or self-insured retention of $250,000 per occurrence shall be
allowed.

 

  (5) Aircraft Liability Insurance: Aircraft liability insurance if the
Borrower, EPC Contractor or any subcontractor uses an aircraft (fixed wing or
helicopter) that is owned, operated or chartered by the Borrower, for liability
arising out of the operation of such aircraft. The insurance shall be provided
for a combined single limit not less than $25,000,000 each occurrence and such
limit shall apply to bodily injury (including passengers) and property damage
liability. In the event the Borrower, EPC Contractor or subcontractor charters
aircraft, the foregoing insurance and evidence of insurance may be furnished by
the owner of the aircraft.

 

  (6) Pollution Liability Insurance: On or before giving the Notice To Proceed
under the EPC Contract, pollution legal liability insurance, in an amount not
less that $25,000,000 per occurrence insuring for (a) cleanup on or off the
Project Site for conditions or releases of pollutants and (b) third party
liability (including bodily injury, property damage, natural resources damages,
third party property loss of

 

     - 2 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

use/revenue, and cleanup) due to conditions or releases of pollutants. The
insurance policy providing this insurance shall be issued for a time period not
less that 5 years and renewed thereafter on substantially the same terms and
conditions. A maximum deductible or self-insured retention of $250,000 per
occurrence shall be allowed.

 

  (7) Builder’s Risk & Marine Cargo DSU Insurance Limits: The limit for the
builder’s risk delayed startup insurance required by section 1(A)(10) of
Attachment O to the EPC Contract shall at a minimum insure fixed costs plus debt
service of the Borrower for a period to be reasonably determined by the Majority
Lenders, taking into consideration the results of a probable maximum loss study.
The limit for the marine cargo delayed startup insurance required by section
1(A)(12) of Attachment O to the EPC Contract shall have a limit not less than 18
months projected fixed costs plus debt services of the Borrower.

 

  (8) Terrorism Insurance: On or before giving the Notice To Proceed under the
EPC Contract, terrorism insurance insuring property damage and delay in startup
under terms and conditions at least equal to coverage provided by the London T3
and T3(a) policy forms in general use as of the Closing Date. Such coverage
shall have a combined property damage and DSU limit of not less than
$25,000,000, increasing prior to the arrival of the first LNG Vessel to an
amount reasonably determined by the Majority Lenders taking into consideration
the results of a terrorism probable maximum loss study.

 

  (9) Operational Property Damage Insurance: On or prior to the Substantial
Completion Date or the expiration of the builder’s risk insurance required under
the terms of the EPC Contractor, whichever comes first, property damage
insurance on an “all risk” basis insuring the Borrower and Lenders, as their
interests may appear, including coverage against damage or loss caused by earth
movement (including but not limited to earthquake, landslide, subsidence and
volcanic eruption), flood, windstorm, boiler and machinery accidents, strike,
riot, civil commotion and sabotage, but excluding terrorism.

 

  (a) Property Insured: The property damage insurance shall provide coverage for
(i) the buildings, structures, boilers, machinery, equipment, facilities,
fixtures, supplies, and other properties constituting a part of the Project,
(ii) the cost of recreating plans, drawings or any other documents or computer
system records, (iii) electronic equipment, (iv) foundations and other property
below the surface of the ground and (v) LGN which is owned by the Borrower or
for which the Borrower is contractually required to insure.

 

  (b) Additional Coverages: The property damage policy shall insure (i) when
needed, insured property prior to its being moved to or from the Site and while
located away from the Site, including ocean marine and air transit coverage (if
applicable) with limits sufficient to insure the full replacement value of the
property or equipment, (ii) if not included in the

 

 

     - 3 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

definition of loss, attorney’s fees, engineering and other consulting costs, and
permit fees directly incurred in order to repair or replace damaged insured
property in a minimum amount of $1,000,000, (iii) the cost of preventive
measures to reduce or prevent a loss (sue & labor) in an amount not less than
$5,000,000, (iv) increased cost of construction and loss to undamaged property
as the result of enforcement of building laws or ordinances with sub-limits not
less than 10% of the “Full Insurable Value”, (v) debris removal with sub-limits
not less than $10,000,000 or 25% of the loss, whichever is greater and (vi)
expediting expenses (defined as extraordinary expenses incurred after an insured
loss to make temporary repairs and expedite the permanent repair of the damaged
property in excess of the business interruption even if such expense does not
reduce the business interruption loss) in an amount not less than $10,000,000.

 

  (c) Special Clauses: The property damage policy shall include (i) a 72 hour
clause for flood, windstorm and earthquakes, (ii) an unintentional errors and
omissions clause, (iii) a requirement that the insurer pay losses within 30 days
after receipt of an acceptable proof of loss or partial proof of loss and (iv)
an other insurance clause making this insurance primary over any other
insurance.

 

  (d) Sum Insured: The property damage policy shall (i) value losses at their
repair or replacement cost, without deduction for physical depreciation or
obsolescence, including custom duties, taxes and fees, (ii) insure the Project
in an amount not less than the “Full Insurable Value” (for purposes of this
Schedule 8.05, “Full Insurable Value” shall mean the full replacement value of
the Project, including any improvements, equipment, spare parts and supplies,
without deduction for physical depreciation and/or obsolescence and (iii) insure
flood and windstorm coverage with a sub-limit not less than 125% of the probable
maximum loss (including business interruption) as reasonably determined by the
Majority Lenders after taking into consideration the results of a probable
maximum loss study.

 

  (e) Deductibles: The property damage policy may have deductibles of not
greater than $1,000,000 per occurrence, except for the flood and windstorm
coverage which may have a deductible not greater than 3% of the values at risk,
subject to a maximum of $10,000,000.

 

  (f) Prohibited Exclusions: The property damage policy shall not contain any
(i) coinsurance provision, (ii) exclusion for loss or damage resulting from
freezing, mechanical breakdown, (iii) exclusion for loss or damage covered under
any guarantee or warranty arising out of an insured peril or (iv) exclusion for
resultant damage caused by ordinary wear and tear, gradual deterioration, normal
subsidence, settling cracking, expansion or contraction, faulty workmanship,
design or materials.

 

     - 4 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

  (10) Business Interruption Insurance: On or prior to the Substantial
Completion Date or the expiration of the delayed startup insurance required by
the EPC Contract, whichever comes first, business interruption insurance
insuring the Borrower and Lenders, as their interests may appear, covering 100%
of the Borrower’s continuing normal operating expenses including payroll and
debt service for a period to be reasonably determined by the Majority Lenders
after taking into consideration the results of the probable maximum loss study,
arising from any loss required to be insured by the operational property damage
insurance section above.

 

Such insurance shall (a) have a deductible no greater than 45 days per
occurrence, (b) include for a period of 3 months that portion of fixed expenses
and debt service not earned arising from (i) a loss or occurrence caused by the
blockage of the LNG receiving terminal arising from an accident of sinking or
stranding of a ship at the terminal or the denial of use of the LNG terminal
arising from ships being unable to gain access to such terminal by reason of the
accident, (ii) loss sustained when access to the Site is prevented due to an
insured peril at premises in the vicinity of the Site and (iii) any loss
sustained due to the action of a public authority preventing access to the Site
due to imminent or actual loss or destruction arising from an insured peril at
premises in the vicinity of the Site and (c) include a clause allowing interim
payments on account pending finalization of the claim payment. Such insurance
shall not contain any coinsurance clause or include a waiver of such clause.

 

  (11) Fidelity: On or before giving the Substantial Completion, fidelity
insurance, insuring the Borrower, Manager and Operator, providing coverage for
employee dishonesty including theft, computer funds transfer fraud, alteration
and forgery insuring loss of money, securities or other property resulting from
any fraudulent or dishonest act committed by the Borrower’s, Manager’s or
Operator’s employees, whether acting alone or in collusion with others in an
amount not less than $10,000,000 and a deductible not greater than $250,000 each
loss.

 

Such insurance shall also include (a) a discovery period not less than 12
months, (b) loss by unidentified employees, (c) temporary employees, (d)
automatic cover for all employees and officers and (e) auditor charges with a
limit not less than $20,000.

 

(D) Amendment of Requirements:

 

  (1) Amendment by the Agent: The Agent, with the consent of the Majority
Lenders may at any time amend the requirements and approved insurance companies
of this Schedule 8.05 due to (a) new information not known by the Lenders on the
Closing Date which poses a material risk to the Project or (b) changed
circumstances after the Closing Date which in the reasonable judgment of the
Agent renders such coverage materially inadequate.

 

     - 5 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

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In addition, promptly following the receipt of a notice from the Agent, the
Borrower will from time to time make such modifications to the amounts of any
insurance policy as the Agent specifies in that notice to take account of
inflationary and other relevant factors.

 

  (2) Amendment Due To Commercial Unfeasibility: In the event any insurance
(including the limits or deductibles thereof) hereby required to be maintained
shall not be reasonably available and commercially feasible in the commercial
insurance market, the Agent and the Majority Lenders shall not unreasonably
withhold their agreement to waive such requirement to the extent the maintenance
thereof is not so available; provided, however, that such waiver shall be
conditioned on the following:

 

  (a) the Borrower shall first request any such waiver in writing, which request
shall be accompanied by a written report prepared by the Insurance Advisor,
certifying that such insurance is “not reasonably available and commercially
feasible” (and, in any case where the required amount is not so available,
certifying as to the maximum amount which is so available) and explaining in
detail the basis for such conclusions;

 

  (b) at any time after the granting of any such waiver, but not more often than
once a year, the Agent may request, and the Borrower shall furnish to the Agent
on behalf of the Lenders within fifteen (15) days after such request,
supplemental reports reasonably acceptable to the Agent from the Insurance
Advisor updating their prior report and reaffirming such conclusion; and

 

  (c) any such waiver shall be effective only so long as such insurance shall
not be reasonable available and commercially feasible in the commercial
insurance market, it being understood that the failure of the Borrower to timely
furnish any such supplemental report shall be conclusive evidence that such
waiver is no longer effective because such condition no longer exists, provided
that such failure is not the only way to establish such non-existence.

 

The failure at any time to satisfy the condition to any waiver of an insurance
requirement set forth in the proviso to the preceding sentence shall not impair
or be construed as a relinquishment of the Borrower’s ability to obtain a waiver
of an insurance requirement pursuant to the preceding sentence at any other time
upon satisfaction of such conditions. For purposes of this sub-section,
insurance will be considered “not reasonably available and commercially
feasible” if it is obtainable only at excessive costs which are not justified in
terms of the risk to be insured and is generally not being carried by or
applicable to projects or operations similar to the Project because of such
excessive costs.

 

     - 6 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

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(E) Borrower Conditions and Requirements:

 

  (1) Loss Notification: The Borrower shall promptly notify the Agent of any
single loss or event likely to give rise to a claim against an insurer for an
amount in excess of $1,000,000 covered by any insurance policy.

 

  (2) Loss Adjustment and Settlement: A loss under the insurance policies
providing builder’s risk, construction all risk, operational property damage,
delayed startup, marine cargo, marine cargo delayed startup, terrorism or
business interruption, shall be adjusted with the insurance companies, including
the filing in a timely manner of appropriate proceedings, by the Borrower or EPC
Contractor, subject to the approval of the Agent if such loss is in excess of
$5,000,000 prior to the Substantial Completion Date and excess of $25,000,000 on
or after the Substantial Completion Date. In addition the Borrower may in its
reasonable judgment consent to the settlement of any loss, provided that in the
event that the amount of the loss exceeds $5,000,000 prior to the Substantial
Completion Date and excess of $25,000,000 on or after the Substantial Completion
Date the terms of such settlement is concurred with by the Agent (with the
consent of the Majority Lenders).

 

  (3) Compliance With Policy Requirements: The Borrower shall not violate or
permit to be violated any of the conditions, provisions or requirements of any
insurance policy required by this Schedule 8.05, and the Borrower shall perform,
satisfy and comply with, or cause to be performed, satisfied and complied with,
all conditions, provisions and requirements of all insurance policies if in any
such case the violation or failure to satisfy, comply or perform could
reasonably be expected to have a Material Adverse Effect.

 

  (4) Evidence of Insurance: On the initial date the insurance is required to be
in place and on an annual basis prior to each policy anniversary, the Borrower
shall furnish the Agent with (a) certificates of insurance or binders, in a form
acceptable to the Agent, evidencing all of the insurance required by the
provisions of this Schedule 8.05 and (b) a schedule of the insurance policies
held by or for the benefit of the Borrower and required to be in force by the
provisions of this Schedule 8.05. Such certificates of insurance/binders shall
be executed by each insurer or by an authorized representative of each insurer
where it is not practical for such insurer to execute the certificate itself.
Such certificates of insurance/binders shall identify underwriters, the type of
insurance, the insurance limits and the policy term and shall specifically list
the special provisions enumerated for such insurance required by this Schedule
8.05. Upon request, the Borrower will promptly furnish the Agent with copies of
all insurance policies, binders and cover notes or other evidence of such
insurance relating to the insurance required to be maintained by the Borrower.
The schedule of insurance shall include the name of the insurance company,
policy number, type of insurance, major limits of liability and expiration date
of the insurance policies.

 

     - 7 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

  (5) Reports: Concurrently with the furnishing of the certification referred to
in Section (4), the Borrower shall furnish the Agent with a report of the
Insurance Advisor stating that in the opinion of the Insurance Advisor, the
insurance then carried or to be renewed is in accordance with the terms of this
Schedule 8.05.

 

In addition the Borrower will advise the Agent in writing promptly of (a) any
material changes in the coverage or limits provided under any policy required by
this Schedule 8.05 and (b) any default in the payment of any premium and of any
other act or omission on the part of the Borrower which may invalidate or render
unenforceable, in whole or in part, any insurance being maintained by the
Borrower pursuant to this Schedule 8.05.

 

  (6) Maintenance of Insurance: The Borrower shall at all times maintain the
insurance coverage required to be maintained by it under the terms of the
Material Project Documents.

 

  (7) Deposits to Revenue Account: In the event that the Borrower, the
Collateral Agent or the Agent receives any amount of proceeds of business
interruption insurance, delay in startup insurance and other payments received
for interruption of operations in respect of any Event of Loss, such amounts
shall be deposited in the Revenue Account.

 

  (8) Deposits to Insurance Proceeds Account: In the event that the Borrower,
the Collateral Agent or the Agent receives an amount of Loss Proceeds in respect
of any Event of Loss, the Net Available Amount shall be deposited in the
Insurance Proceeds Account.

 

(F) Insurance Policy Conditions and Requirements

 

  (1) Control of Loss: If commercially feasible, all policies of insurance
required to be maintained pursuant to this Schedule 8.05, wherein more than one
insurer provides the coverage on any single policy, shall have clause (or a
separate agreement among the insurers) wherein all insurers have agreed that the
lead insurer shall have full settlement authority on behalf of the other
insurers.

 

  (2) Loss Survey: All policies of insurance required to be maintained pursuant
to this Schedule 8.05, wherein more than one insurer provides the coverage on
any single policy, shall have clause (or a separate agreement among the
insurers) wherein all insurers have agreed upon the employment of a single firm
to survey and investigate all losses on behalf of the insurers.

 

  (3) Policy Cancellation and Change: All policies of insurance required to be
maintained pursuant to this Schedule 8.05 shall be endorsed so that if at any
time they are canceled, or their coverage is reduced (by any party including the
insured) so as to affect the interests of the Lenders, such cancellation or
reduction shall not be effective as to the Lenders for 60 days, except for
non-payment of premium which shall be for 10 days, after receipt by the Agent of
written notice from such insurer of such cancellation or reduction.

 

     - 8 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

  (4) Miscellaneous Policy Provisions: All insurance policies providing
builder’s risk, construction all risk, operational property damage, delayed
startup, marine cargo, marine cargo delayed startup, terrorism or business
interruption, (a) shall not include any annual or term aggregate limits of
liability except for the perils of flood, windstorm, earth movement and
terrorism, (b) shall have any aggregate limits of liability apply separately
with respect to the Project, (c) shall not include a clause requiring the
payment of additional premium to reinstate the limits after loss except for
insurance covering the perils of flood, windstorm, earth movement and terrorism,
(d) shall include the Lenders as additional insureds as their interest may
appear, and (e) shall include a clause requiring the insurer to pay losses
within 30 days after receipt of an acceptable proof of loss or partial proof of
loss.

 

  (5) Separation of Interests: All policies shall insure the interests of the
Lenders regardless of any breach or violation by the Borrower or any other Party
of warranties, declarations or conditions contained in such policies, any action
or inaction of the Borrowers or others, or any foreclosure relating to the
Project or any change in ownership of all or any portion of the Project.

 

  (6) Waiver of Subrogation: All policies of insurance to be maintained by the
provisions of this Schedule 8.05 shall provide for waivers of subrogation in
favor of the Lenders and their respective officers and employees (and such other
Persons as may be required by the Project Documents).

 

  (7) Lender’s Endorsement: All policies required by Sections (C)(9), (C)(10)
and (C)(11) of this Schedule 8.05 shall include a lender’s endorsement which
includes (a) an acknowledgement of any assignment of the policies to the
Lenders, (b) a primary insurance clause, (c) a separation of interests or
non-vitiation clause, (d) a notice of cancellation or material change to the
Agent clause, (e) a waiver of subrogation and contribution clause, (f) a clause
making the Collateral Agent sole loss payee of all claim payments and (g) an
acknowledgement that the Lenders are not responsible for any premium payments.

 

  (8) Liability Insurance Endorsements: All policies of liability insurance
required to be maintained by the Borrower or any other Person under the terms of
this Schedule 8.05, shall be endorsed as follows:

 

  (a) To name the Lenders as additional insureds;

 

  (b) To provide a severability of interests and cross liability clause; and

 

  (c) That the insurance shall be primary and not excess to or contributing with
any insurance or self-insurance maintained by the Lenders.

 

  (9) Payment of Loss Proceeds: The insurance policies providing operational
property damage, terrorism or business interruption, shall specify that the
proceeds of such policies shall be payable solely to the Collateral Agent.

 

     - 9 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(G) Failure to Maintain Insurance: In the event the Borrower fails, or fails to
cause the EPC Contractor, the Manager, any Anchor Tenant or the Operator, to
take out or maintain the full insurance coverage required by this Schedule 8.05,
the Agent (with the consent of the majority Lenders), upon 30 days’ prior notice
(unless the aforementioned insurance would lapse within such period, in which
event notice should be given as soon as reasonably possible) to the Borrower of
any such failure, may or may direct the Collateral Agent to (but shall not be
obligated to) take out the required policies of insurance and pay the premiums
on the same. All amounts so advanced by the Agent or the Collateral Agent, as
applicable, shall become an additional obligation of the Borrower to the Agent
or the Collateral Agent, as applicable, and the Borrower shall forthwith pay
such amounts to the Agent or the Collateral Agent, as applicable, together with
interest thereon at the Post-Default Rate from the date so advanced.

 

(H) No Duty of Agent to Verify or Review: No provision of this Schedule 8.05 or
any provision of the Credit Agreement or any Material Project Document shall
impose on the Agent any duty or obligation to verify the existence or adequacy
of the insurance coverage maintained by the Borrower, nor shall the Agent be
responsible for any representations or warranties made by or on behalf of the
Borrower to any insurance company or underwriter. Any failure on the part of the
Agent to pursue or obtain the evidence of insurance required by this Agreement
from the Borrower and/or failure of the Agent to point out any non-compliance of
such evidence of insurance shall not constitute a waiver of any of the insurance
requirements in this Agreement.

 

(I) Acceptable Policy Terms and Conditions: All policies of insurance required
to be maintained pursuant to this Schedule 8.05 shall contain terms and
conditions reasonably acceptable to the Agent after consultation with the
Lenders and the Insurance Advisor.

 

     - 10 -    SCHEDULE 8.05           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE 8.15(a)

to Credit Agreement

 

PERMITTED SWAP AGREEMENTS

 

     - 1 -    SCHEDULE 8.15(a)           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT A

to Credit Agreement

 

[Form of Notice of Borrowing]

 

NOTICE OF BORROWING NO. [    ]

[Notices to be numbered consecutively in the order of the date of the Notices
for each Loan]

 

Reference is made to the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Agent”) and
HSBC BANK USA, NATIONAL ASSOCIATION, as collateral agent for the secured parties
specified therein (in such capacity, together with its successors in such
capacity, the “Collateral Agent”). All capitalized terms used but not defined
herein have the meanings assigned to such terms in the Credit Agreement.

 

This Notice of Borrowing (this “Notice”) is issued in connection with Borrowing
Certificate No. [    ] and is delivered to the Agent at least three Business
Days prior to the date of the proposed borrowing pursuant to Sections 2.02 and
4.05 of the Credit Agreement and in accordance with Section 4.04 of the Credit
Agreement.

 

The Borrower hereby irrevocably requests a borrowing under the Credit Agreement,
as follows:

 

(a)      Requested Borrowing Date:        [LIST] (b)      Amount of requested
Loans:        Interest Period(s):   Amount(s):        [LIST, IF ANY]   [LIST]
(c)      Amount into Construction Account:

 

     - 1 -    EXHIBIT A           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Notice this [    ] day of
[            ].

 

SABINE PASS LNG, L.P.

By:

 

Sabine Pass LNG – GP, Inc.,

   

its General Partner

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

     - 2 -    EXHIBIT A           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT B-1

to Credit Agreement

 

[Form of Borrowing Certificate]

 

BORROWING CERTIFICATE NO. [    ], dated as of date of proposed borrowing

[Certificates to be numbered consecutively in the order of the dates of the
Certificates]

Proposed borrowing date is [                    ]

 

Reference is made to the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”), among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the secured
parties specified therein (in such capacity, together with its successors in
such capacity, the “Agent”) and HSBC BANK USA, NATIONAL ASSOCIATION, as
collateral agent for the secured parties specified therein (in such capacity,
together with its successors in such capacity, the “Collateral Agent”). All
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Credit Agreement.

 

Pursuant to Section 6.03(d) of the Credit Agreement, the Borrower is hereby
submitting this Borrowing Certificate (this “Borrowing Certificate”), dated as
of the proposed borrowing date set forth above. The Borrower intends to submit a
Notice of Borrowing in connection with the proposed borrowing at least three
Business Days prior to the proposed borrowing date pursuant to Section 4.05 of
the Credit Agreement.

 

The Borrower hereby certifies after due inquiry, that:

 

1. Attached as Appendix I to this Borrowing Certificate is the Construction
Report and accompanying certificate of an Authorized Officer of the Borrower
required to be delivered by the Borrower to the Agent pursuant to Section 8.19
of the Credit Agreement.

 

2. The amount of the Loan requested pursuant to the Notice of Borrowing referred
to above shall not exceed the sum (without duplication) of (a) Project Costs due
and to be paid on or prior to the date of the proposed borrowing or reasonably
expected to be due or incurred within the next 30 days succeeding the date of
the proposed borrowing (without duplication of any other Borrowing Certificate),
(b) the Required Debt Service Reserve Amount, if then applicable and (c) any
Operation and Maintenance Expense to be paid on or prior to the date of the
proposed borrowing or reasonably expected to be due or incurred within the next
30 days succeeding the date of the proposed borrowing (without duplication of
any other Borrowing Certificate); provided, that (a) no cost overruns shall have
occurred and be continuing which could reasonably be expected to result in
Project Costs in excess of funds available to pay such Project Costs and (b) the
Loan proceeds to be disbursed shall be reduced in accordance with paragraph 4
below.

 

3. The Borrower hereby (a) attaches hereto, or has previously provided to the
Agent and the Independent Engineer, a copy of all monthly invoices issued under
the EPC Contract and all invoices in connection with any other Project Costs and
Operation

 

    - 1 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

and Maintenance Expenses which the Borrower intends to pay with the Loan
proceeds as set forth in Appendix II attached hereto and (b) sets forth
projections of invoices expected to be received within 30 days after the date
hereof under the EPC Contract and any other Project Costs which the Borrower
intends to pay with such Loan proceeds, as evidence of the Project Costs related
to this Borrowing Certificate; and (c)(i) attaches hereto, or has previously
provided to the Agent and the Independent Engineer, copies of invoices and
related documents for Project Costs evidencing the complete use of the Loan
proceeds borrowed for the payment of Project Costs as set forth in the previous
Borrowing Certificate or (ii) certifies that the Loan proceeds borrowed in the
preceding month and not expended during such month shall be expended during the
current month, as set forth in Appendix II attached hereto, in each case
satisfactory to the Independent Engineer. The Borrower intends to apply the
proceeds of the Loans requested pursuant to this Borrowing Certificate to the
payment of the Project Costs listed on Appendix II to this Borrowing Certificate
or to other Project Costs permitted under the Credit Agreement. No item shown on
Appendix II has been heretofore paid for with the proceeds of any previous Loan.

 

4. The Borrower (a) has applied the proceeds of the prior Loans to the payment
of Project Costs as such were listed on Appendix II attached to the preceding
Borrowing Certificate or, in respect of any disputed amounts, deposited to the
Escrow Account or retained in the Construction Account pending resolution of the
dispute, (b) reasonably expects that it will apply such proceeds from prior
Loans to the Project Costs listed on Appendix III hereto within the next 30 days
or, in respect of any disputed amounts, deposited to the Escrow Account or
retained in the Construction Account pending resolution of the dispute, or (c)
to the extent such proceeds were not so applied and are not reasonably expected
to be so applied during the next 30 days, such proceeds have been, or are being,
applied as a reduction to the current Notice of Borrowing in an amount equal to
the proceeds of Loans not previously expended or, in respect of any disputed
amounts, deposited to the Escrow Account or retained in the Construction Account
pending resolution of the dispute, and not contemplated to be spend pursuant to
clause (b) of this paragraph; provided, that in no event shall the amount in the
applicable Notice of Borrowing be reduced below $2,000,000.

 

5. Attached as Appendix IV to this Borrowing Certificate is a complete and
accurate listing of all approved, pending, and proposed Change Orders, together
with copies of all such Change Orders not previously delivered to the Agent.
With respect to each of these Change Orders, (a) the ability to achieve
Substantial Completion by the Guaranteed Substantial Completion Date has not
been adversely and materially affected and (b) no cost overruns shall have
occurred and be continuing which could reasonably be expected to result in
Project Costs exceeding the funds then available to pay such Project Costs.

 

6. With respect to invoices submitted in connection with the proposed borrowing,
the Borrower has reviewed the work performed, services rendered and material,
equipment or supplies delivered to date (either directly or in reliance on
sources of information deemed reliable by the Borrower), and the amounts that
have been paid or are to be paid are proper (and in the case of payments being
made to the EPC Contractor under the EPC Contract, are being made in accordance
with the provisions of the EPC Contract).

 

    - 2 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

7. The Project is reasonably expected to achieve Substantial Completion by the
Guaranteed Substantial Completion Date and sufficient funds exist in order to
achieve Substantial Completion.

 

8. Attached as Appendix V to this Borrowing Certificate are (a) copies of
interim conditional lien waivers executed by the EPC Contractor in respect of
the current monthly invoice and interim unconditional lien waivers in respect of
all Work (as such term is defined in the EPC Contract) completed as of the date
of the previous invoice (other than work in progress) and (b) evidence that the
EPC Contractor has received interim conditional lien waivers in respect of the
current invoices and interim unconditional lien waivers in respect of all Work
(as such term is defined in the EPC Contract) completed as of the date of the
previous invoice (other than work in progress) from all of its Major
Subcontractors and Major Sub-subcontractors (each as defined in the EPC
Contract), which interim lien waivers shall be satisfactory to the Agent and the
Independent Engineer.

 

9. This Borrowing Certificate (and each of the statements contained herein) is
intended to be for the sole and express benefit of the Agent and the other
Secured Parties and is not intended to be for the benefit of, or to be
enforceable by, the EPC Contractor or any subcontractor.

 

10. The conditions precedent in Section[s] [6.01, 6.02 and]1 6.03 of the Credit
Agreement have been satisfied. [With respect to the initial borrowing, the
amount of Project Costs paid by or on behalf of the Borrower through the date
hereof is [$        ] and the amount scheduled to be spent on Project Costs
during the next 30 days is [$            .]2

 

11. (a) Each of the representations and warranties of the Borrower contained in
Article VII of the Credit Agreement is (i) if such representation and warranty
is qualified as to materiality or by reference to the existence of a Material
Adverse Effect, true and complete to the extent of such qualification on and as
of the date of the proposed borrowing (both immediately prior to such proposed
borrowing and also after giving effect to such proposed borrowing and to the
intended use of such proposed borrowing) as if made on and as of such date (or,
if stated to have been made solely as of an earlier date, as of such earlier
date) or (ii) if such representation and warranty is not so qualified, true and
complete in all material respects on and as of the date of such proposed
borrowing (both immediately prior to such proposed borrowing and also after
giving effect to such proposed borrowing and to the intended use of such
proposed borrowing) as if made on and as of such date (or, if stated to have
been made solely as of an earlier date, as of such earlier date), (b) no Default
or Event of Default has occurred and is continuing as of the date of such
disbursement and no Default or Event of Default will

 

--------------------------------------------------------------------------------

1 To be included only in connection with the initial borrowing.

2 To be included only in connection with the initial borrowing.

 

    - 3 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

result from the requested disbursement or the consummation of the transactions
contemplated by the Transaction Documents, (c) no act, event or circumstance
affecting the Borrower has arisen that could reasonably be expected to have a
Material Adverse Effect and (d) the Collateral is subject to the perfected first
priority Lien (subject only to Permitted Liens) and the security interest
established pursuant to the Security Documents.

 

The Borrower hereby certifies, after due inquiry, that the facts stated by the
Borrower in this Borrowing Certificate are true and complete.

 

SABINE PASS LNG, L.P.

By:

 

Sabine Pass LNG – GP, Inc.

   

its General Partner

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

    - 4 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX I to

Borrowing Certificate

 

[CONSTRUCTION REPORT]

 

     - 5 -    EXHIBIT B-1           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX II to

Borrowing Certificate

 

[LIST PROJECT COSTS BY ITEM AND AMOUNT]

 

[COPIES OF MONTHLY INVOICES, IF NECESSARY]

 

    - 6 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX III to

Borrowing Certificate

 

[DESCRIPTION OF OTHER PROJECT COSTS THAT WERE LISTED ON PRIOR

APPENDIX I THAT ARE EXPECTED TO BE PAID DURING THE UPCOMING MONTH]

 

    - 7 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX IV to

Borrowing Certificate

 

[LIST AND DESCRIBE ANY “CHANGE ORDERS”]

 

[ATTACH EXHIBIT “A”, IF NECESSARY, TO EXPLAIN ANY DEVIATIONS

FROM THE CONSTRUCTION BUDGET AND SCHEDULE]

 

    - 8 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX V to

Borrowing Certificate

 

LIEN WAIVERS EXECUTED

 

    - 9 -   EXHIBIT B-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT B-2

to Credit Agreement

 

[Form of Final Borrowing Certificate]

 

FINAL BORROWING CERTIFICATE NO. [    ], dated as of date of proposed borrowing

[Certificates to be numbered consecutively in the order of the dates of the
Certificates]

Proposed borrowing date is [                    ]

 

Reference is made to the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”), among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the secured
parties specified therein (in such capacity, together with its successors in
such capacity, the “Agent”) and HSBC BANK USA, NATIONAL ASSOCIATION, as
collateral agent for the secured parties specified therein (in such capacity,
together with its successors in such capacity, the “Collateral Agent”). All
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Credit Agreement.

 

Pursuant to Section 6.04(b) of the Credit Agreement, the Borrower is hereby
submitting this Final Borrowing Certificate (this “Final Borrowing
Certificate”), dated as of the proposed borrowing date set forth above. The
Borrower intends to submit a Notice of Borrowing in connection with the proposed
borrowing at least three Business Days prior to the proposed borrowing date
pursuant to Section 4.05 of the Credit Agreement.

 

The Borrower hereby certifies after due inquiry, that:

 

1. Attached as Appendix I to this Final Borrowing Certificate is the
Construction Report and accompanying certificate of an Authorized Officer of the
Borrower required to be delivered by the Borrower to the Agent pursuant to
Section 8.19 of the Credit Agreement.

 

2. The amount of the final Loan requested pursuant to the Notice of Borrowing
referred to above shall not exceed the sum of (i) Project Costs, if any, which
are due and to be paid on or prior to the date of this Final Borrowing
Certificate and which are reasonably expected to be due or incurred from the
date of this Final Borrowing Certificate to Final Completion including Project
Costs which are reasonably projected to be incurred for punch list items and
payment retainage and disputed payments in each case as contemplated in the
Construction Budget and Schedule (without duplication of any other Borrowing
Certificate), (ii) the Required Debt Service Reserve Amount, if then applicable
and (iii) an amount, if any, which may be borrowed so that after giving effect
to the aggregate final Loan borrowing, the Debt to Equity Ratio is not greater
than 80:20.

 

3. The Borrower hereby (a) attaches hereto, or has previously provided to the
Agent and the Independent Engineer, a copy of all monthly invoices issued under
the EPC Contract and all invoices in connection with any other Project Costs
which the Borrower intends to pay with the Loan proceeds as set forth in
Appendix II attached

 

    - 1 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

hereto; (b) attaches hereto, or has previously provided to the Agent and the
Independent Engineer, a detailed breakdown of (i) each punchlist item and the
cost associated thereto, (ii) payment retainage amounts, (iii) each disputed
payment amount under the EPC Contract, (iv) the calculation of existing
shortfall of the Required Debt Service Amount, and (v) the calculation of the
amount of the true-up payment required to be made by the Borrower in order to
ensure that the Debt to Equity Ratio is no greater than 80:20 as set forth in
Appendix VI attached hereto; (c)(i) attaches hereto, or has previously provided
to the Agent and the Independent Engineer, copies of invoices and related
documents for Project Costs evidencing the complete use of the Loan proceeds
borrowed for the payment of Project Costs as set forth in the previous Borrowing
Certificate or (ii) certifies that the Loan proceeds borrowed in the preceding
month and not expended during such month shall be expended during the current
month, as set forth in Appendix II attached hereto, in each case satisfactory to
the Independent Engineer. The Borrower intends to apply the proceeds of the
Loans requested pursuant to this Borrowing Certificate to the payment of the
Project Costs listed on Appendix II to this Borrowing Certificate or to other
Project Costs permitted under the Credit Agreement. No item shown on Appendix II
has been heretofore paid for with the proceeds of any previous Loan.

 

4. The Borrower (a) has applied the proceeds of the prior Loans to the payment
of Project Costs as such were listed on Appendix II attached to the preceding
Borrowing Certificate or, in respect of any disputed amounts, deposited to the
Escrow Account or retained in the Construction Account pending resolution of the
dispute, (b) reasonably expects that it will apply such proceeds from prior
Loans to the Project Costs listed on Appendix III hereto prior to Final
Completion or, in respect of any disputed amounts, deposited to the Escrow
Account or retained in the Construction Account pending resolution of the
dispute, or (c) to the extent such proceeds were not so applied and are not
reasonably expected to be so applied prior to Final Completion, such proceeds
have been, or are being, applied as a reduction to the current Notice of
Borrowing in an amount equal to the proceeds of Loans not previously expended
or, in respect of any disputed amounts, deposited to the Escrow Account or
retained in the Construction Account pending resolution of the dispute, and not
contemplated to be spent pursuant to clause (b) of this paragraph.

 

5. The projections of punch list items expected to be paid with the proceeds of
the final Loan are in accordance with the Construction Budget and Schedule.

 

6. Attached as Appendix IV to this Borrowing Certificate is a complete and
accurate listing of all approved, pending, and proposed Change Orders, together
with copies of all such Change Orders not previously delivered to the Agent.
With respect to each of these Change Orders, (a) the ability to achieve Final
Completion in accordance with the Construction Budget and Schedule has not been
adversely and materially affected and (b) no cost overruns shall have occurred
and be continuing which could reasonably be expected to result in Project Costs
exceeding the funds then available to pay such Project Costs.

 

7. With respect to invoices submitted in connection with the proposed borrowing,
the Borrower has reviewed the work performed, services rendered and

 

    - 2 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

material, equipment or supplies delivered to date (either directly or in
reliance on sources of information deemed reliable by the Borrower), and the
amounts that have been paid or are to be paid are proper (and in the case of
payments being made to the EPC Contractor under the EPC Contract, are being made
in accordance with the provisions of the EPC Contract).

 

8. The Term Conversion Date has occurred.

 

9. Attached as Appendix V to this Borrowing Certificate are (a) interim
conditional lien waivers executed by the EPC Contractor in respect of the
current monthly invoice and interim unconditional lien waivers in respect of all
Work (as such term is defined in the EPC Contract) completed as of the date of
the previous invoice (other than work in progress) and (b) evidence that the EPC
Contractor has received interim conditional lien waivers in respect of the
current monthly invoice and interim unconditional lien waivers in respect of all
Work (as such term is defined in the EPC Contract) completed as of the date of
the previous invoice (other than work in progress) from all of the Major
Subcontractors and Major Sub-subcontractors (each as defined in the EPC
Contract), which interim lien waivers shall be satisfactory to the Agent the
Independent Engineer.

 

10. This Borrowing Certificate (and each of the statements contained herein) is
intended to be for the sole and express benefit of the Agent and the other
Secured Parties and is not intended to be for the benefit of, or to be
enforceable by, the EPC Contractor or any subcontractor.

 

11. The conditions precedent in Section 6.04 of the Credit Agreement have been
satisfied.

 

12. (a) Each of the representations and warranties of the Borrower contained in
Article VII of the Credit Agreement is (i) if such representation and warranty
is qualified as to materiality or by reference to the existence of a Material
Adverse Effect, true and complete to the extent of such qualification on and as
of the date of the proposed borrowing (both immediately prior to such proposed
borrowing and also after giving effect to such proposed borrowing and to the
intended use of such proposed borrowing) as if made on and as of such date (or,
if stated to have been made solely as of an earlier date, as of such earlier
date) or (ii) if such representation and warranty is not so qualified, true and
complete in all material respects on and as of the date of such proposed
borrowing (both immediately prior to such proposed borrowing and also after
giving effect to such proposed borrowing and to the intended use of such
proposed borrowing) as if made on and as of such date (or, if stated to have
been made solely as of an earlier date, as of such earlier date), (b) no Default
or Event of Default has occurred and is continuing as of the date of such
disbursement and no Default or Event of Default will result from the requested
disbursement or the consummation of the transactions contemplated by the
Transaction Documents, (c) no act, event or circumstance affecting the Borrower
has arisen that could reasonably be expected to have a Material Adverse Effect
and (d) the Collateral is subject to the perfected first priority Lien (subject
only to Permitted Liens) and the security interest established pursuant to the
Security Documents.

 

    - 3 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

The Borrower hereby certifies, after due inquiry, that the facts stated by the
Borrower in this Borrowing Certificate are true and complete.

 

SABINE PASS LNG, L.P.

By:

 

Sabine Pass LNG – GP, Inc.

   

its General Partner

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

 

    - 4 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX I to

Borrowing Certificate

 

[CONSTRUCTION REPORT]

 

    - 5 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX II to

Borrowing Certificate

 

[LIST PROJECT COSTS BY ITEM AND AMOUNT]

 

[COPIES OF MONTHLY INVOICES, IF NECESSARY]

 

    - 6 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX III to

Borrowing Certificate

 

[DESCRIPTION OF OTHER PROJECT COSTS THAT WERE LISTED ON PRIOR

APPENDIX I THAT ARE EXPECTED TO BE PAID PRIOR TO FINAL COMPLETION]

 

    - 7 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX IV to

Borrowing Certificate

 

[LIST AND DESCRIBE ANY “CHANGE ORDERS”]

 

[ATTACH EXHIBIT “A”, IF NECESSARY, TO EXPLAIN ANY DEVIATIONS

FROM THE CONSTRUCTION BUDGET AND SCHEDULE]

 

    - 8 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX V to

Borrowing Certificate

 

LIEN WAIVERS

 

    - 9 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

APPENDIX VI to

Borrowing Certificate

 

[LIST EACH PUNCHLIST ITEM AND COST ASSOCIATED THERETO]

 

[EVIDENCE OF PAYMENT RETAINAGE AMOUNTS]

 

[LIST EACH DISPUTED PAYMENT AMOUNT UNDER EPC CONTRACT]

 

[EVIDENCE OF ADEQUACY OF TRUE-UP PAYMENT]

 

    - 10 -   EXHIBIT B-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT C-1

to Credit Agreement

 

[Form of Independent Engineer’s Certificate (initial borrowing only)]

 

INDEPENDENT ENGINEER’S CERTIFICATE

 

Reference is made to: (i) the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Agent”) and
HSBC BANK USA, NATIONAL ASSOCIATION, as collateral agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Collateral
Agent”) and (ii) the letter dated July 1, 2004 from Stone & Webster Management
Consultants, Inc. to the Collateral Agent (collectively, the “Agreements”). All
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Credit Agreement.

 

The undersigned,                                                  , an
Authorized Officer of the Independent Engineer, hereby certifies that:

 

1. The Independent Engineer has reviewed the material and data provided by (a)
the Borrower and (b) the EPC Contractor in connection with Borrowing Certificate
No.          dated          (the “Borrowing Certificate”).

 

2. The Independent Engineer has reviewed technical aspects of the Project,
including engineering design, cost and scheduling estimates and the technical
provisions in the Project Documents related to Development and permits in
accordance with the scope of work under the Agreements.

 

3. The Independent Engineer has reviewed the balance of the Construction Account
and material and data provided by the Borrower evidencing that (i) the Equity
Contribution Amount has been irrevocably paid in cash and in full by the Pledgor
to the Borrower and (ii) the Equity Contribution Amount has been fully spent on
Project Costs.

 

4. The Independent Engineer has performed its review and observations in
accordance with generally accepted engineering practices and included such
investigation, observation and review as the Independent Engineer in its
professional capacity deemed necessary or appropriate in the circumstances and
within the scope of its appointment as described in paragraph 2 above. The
Independent Engineer has also reviewed the Borrowing Certificate, including any
appendices, schedules and requisitions and/or invoices attached thereto or
delivered therewith.

 

5. As of the Funding Date, the Estimated Amounts have been used to pay for
Project Costs and may be borrowed in accordance with the Borrower’s initial
Borrowing Certificate, as further described in Section 6.02(d)(ii) of the Credit
Agreement.

 

    - 1 -   EXHIBIT C-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Based on the review of the aforementioned information and data provided to the
Independent Engineer by others and the understanding and assumption that the
Independent Engineer has been provided true, correct and complete information,
the Independent Engineer is of the opinion that, as of the date hereof: (1) the
statements set forth in Paragraphs 2, 4(a), 4(b), and 7 and the second sentence
of Paragraph 10 of the Borrowing Certificate are true and correct, (2) the
Project Costs projected to be incurred between the date of submission of the
Borrowing Certificate and the date of this Certificate have been incurred, (3)
the progress of the Development is in accordance with the Construction Budget
and Schedule, (4) sufficient funds exist in order to achieve Final Completion
and (5) the Independent Engineer is not aware of any fact or circumstance which
would render any statement made by the Borrower in the attached Borrowing
Certificate untrue or misleading.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate
as a duly authorized representative of the Independent Engineer this
             day of                     , 2005.3

 

STONE & WEBSTER MANAGEMENT
    CONSULTANTS, INC. By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

--------------------------------------------------------------------------------

3 To be dated as of the Funding Date.

 

    - 2 -   EXHIBIT C-1         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT C-2

to Credit Agreement

 

[Form of Independent Engineer’s Certificate]

 

INDEPENDENT ENGINEER’S CERTIFICATE

 

Reference is made to: (i) the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Agent”) and
HSBC BANK USA, NATIONAL ASSOCIATION, as collateral agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Collateral
Agent”) and (ii) the letter dated July 1, 2004 from Stone & Webster Management
Consultants, Inc. to the Collateral Agent (collectively, the “Agreements”). All
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Credit Agreement.

 

The undersigned,                                                  , an
Authorized Officer of the Independent Engineer, hereby certifies that:

 

1. The Independent Engineer has reviewed the material and data provided by (a)
the Borrower and (b) the EPC Contractor since the date of the last Borrowing
Certificate (the “Borrowing Certificate”) consisting of: Borrowing Certificate
No.          dated          and work progress documents consisting of the EPC
Contractor’s monthly progress report, the Borrower’s Construction Report, and
schedule updates.

 

2. The Independent Engineer has reviewed technical aspects of the Project,
including engineering design, cost and scheduling estimates and the technical
provisions in the Project Documents related to Development and permits in
accordance with the scope of work under the Agreements.

 

3. The Independent Engineer has performed its review and observations in
accordance with generally accepted engineering practices and included such
investigation, observation and review as the Independent Engineer in its
professional capacity deemed necessary or appropriate in the circumstances and
within the scope of its appointment as described in the preceding paragraph. The
Independent Engineer has also reviewed the Borrowing Certificate, including any
appendices, schedules and requisitions and/or invoices attached thereto or
delivered therewith.

 

Based on the review of the aforementioned information and data provided to the
Independent Engineer by others and the understanding and assumption that the
Independent Engineer has been provided true, correct and complete information,
the Independent Engineer is of the opinion that, as of the date hereof: (1) the
statements set forth in Paragraphs 2, 4(a), 4(b) and 7 of the Borrowing
Certificate are true and correct, (2) the progress of the Development is in
accordance with the Construction Budget and Schedule, (3) the current
utilization of the Loan proceeds from previous borrowings is in accordance with
the uses contemplated in the

 

    - 1 -   EXHIBIT C-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Borrowing Certificate pursuant to which such Loans were borrowed, (4) sufficient
funds exist in order to achieve Final Completion and (5) the Independent
Engineer is not aware of any fact or circumstance which would render any
statement made by the Borrower in the attached Borrowing Certificate untrue or
misleading.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate
as a duly authorized representative of the Independent Engineer this
             day of                     , 2005.

 

STONE & WEBSTER MANAGEMENT

    CONSULTANTS, INC.

By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

    - 2 -   EXHIBIT C-2         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT C-3

to Credit Agreement

 

[Form of Independent Engineer’s Certificate (final borrowing only)]

 

INDEPENDENT ENGINEER’S CERTIFICATE

 

Reference is made to: (i) the Credit Agreement dated as of February 25, 2005 (as
amended, modified and supplemented and in effect from time to time, the “Credit
Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), each of the lenders from time to time party to the Credit Agreement
(the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Agent”) and
HSBC BANK USA, NATIONAL ASSOCIATION, as collateral agent for the Lenders (in
such capacity, together with its successors in such capacity, the “Collateral
Agent”) and (ii) the letter dated July 1, 2004 from Stone & Webster Management
Consultants, Inc. to the Collateral Agent (collectively, the “Agreements”). All
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Credit Agreement.

 

The undersigned,                                                  , an
Authorized Officer of the Independent Engineer, hereby certifies that:

 

1. The Independent Engineer has reviewed the material and data provided by (a)
the Borrower and (b) the EPC Contractor since the date of the last Borrowing
Certificate (the “Borrowing Certificate”) consisting of: Borrowing Certificate
No.          dated          and work progress documents consisting of the EPC
Contractor’s monthly progress report, the Borrower’s Construction Report, and
schedule updates.

 

2. The Independent Engineer has reviewed documentation relating to payment
retainage and payment disputes relating to the EPC Contract and hereby confirms
[the accuracy of the retainage amounts and disputed amounts evidenced by] such
documentation.

 

3. The Independent Engineer has reviewed technical aspects of the Project,
including engineering design, cost and scheduling estimates and the technical
provisions in the Project Documents related to Development and permits in
accordance with the scope of work under the Agreements.

 

4. The Independent Engineer has performed its review and observations in
accordance with generally accepted engineering practices and included such
investigation, observation and review as the Independent Engineer in its
professional capacity deemed necessary or appropriate in the circumstances and
within the scope of its appointment as described in the preceding paragraph. The
Independent Engineer has also reviewed the Borrowing Certificate, including any
appendices, schedules and requisitions and/or invoices attached thereto or
delivered therewith.

 

Based on the review of the aforementioned information and data provided to the
Independent Engineer by others and the understanding and assumption that the
Independent

 

    - 1 -   EXHIBIT C-3         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Engineer has been provided true, correct and complete information, the
Independent Engineer is of the opinion that, as of the date hereof: (1) the
statements set forth in Paragraphs 2, 4(a), 4(b) and 8 of the Borrowing
Certificate are true and correct, (2) the current utilization of the Loan
proceeds from previous borrowings is in accordance with the uses contemplated in
the Borrowing Certificate pursuant to which such Loans were borrowed, (3) the
Project has achieved Substantial Completion, (4) the funds which are on deposit
in the Collateral Accounts together with the amount of the proposed final
borrowing are sufficient to achieve Final Completion, and (5) the Independent
Engineer is not aware of any fact or circumstance which would render any
statement made by the Borrower in the attached Borrowing Certificate untrue or
misleading.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this certificate
as a duly authorized representative of the Independent Engineer this      day of
            , 2005.

 

STONE & WEBSTER MANAGEMENT CONSULTANTS, INC.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

    - 2 -   EXHIBIT C-3         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT D

to Credit Agreement

 

[Form of Pending Disbursements Clause]

 

PENDING DISBURSEMENTS CLAUSE

 

Pending disbursement of the full proceeds of the loans secured by the insured
mortgage described herein, this policy insures only to the extent of the amount
actually disbursed plus interest accrued thereon but increases up to the face
amount of the policy as disbursements are made.

 

Title shall be continued down to the date of each disbursement and the Company
shall furnish to the insured a continuation report and date down endorsement
which shall note (a) the new effective date of the policy and the endorsements
and the amount of the policy, (b) all assessments, taxes, liens, encumbrances,
leases, mortgages, easements and other items including survey variations,
encroachments and setback violations then affecting the insured premises which
have been filed of record or discovered by the Title Company since the original
date of the policy regardless of whether they affect the lien of the insured
mortgages, (c) which of the aforesaid items have been filed or recorded since
the date of the last preceding continuation report and (d) which of said items
are intended to be added as exceptions to the coverage of the policy as to (i)
all amounts secured by the insured mortgages and (ii) only amounts secured by
the insured mortgages advanced on or after the new effective date of the policy.

 

In addition, each continuation search will notify Lenders of any liens which
have been discharged by bonding, court deposit or any other means other than
full payment.

 

In the event that the lien of the insured mortgages described herein is insured
by more than one insurer, the Title Company agrees that it shall be bound by the
continuation reports of a single company specified as “lead” insurer herein.

 

     - 1 -    EXHIBIT D           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT E

to Credit Agreement

 

FORM OF PLEDGE AGREEMENT

 

This PLEDGE AGREEMENT, dated as of February 25, 2005 (this “Agreement”), is made
among SABINE PASS LNG – LP, LLC, a Delaware limited liability company (“Sabine
LP”) and SABINE PASS LNG – GP, INC., a Delaware corporation (“Sabine GP” and
each of Sabine LP and Sabine GP, a “Pledgor” and, collectively, the “Pledgors”),
SABINE PASS LNG, L.P., a Delaware limited partnership (the “Borrower”), SOCIÉTÉ
GÉNÉRALE, as administrative agent (in such capacity, together with its
successors and assigns in such capacity, the “Agent”) and HSBC BANK USA,
NATIONAL ASSOCIATION, acting hereunder as collateral agent (in such capacity,
together with its successors and assigns in such capacity, the “Collateral
Agent”) on behalf of and for the benefit of the Secured Parties.

 

RECITALS

 

A. Pursuant to the Credit Agreement, dated as of February 25, 2005 (the “Credit
Agreement”), among the Borrower, each of the lenders that is or may from time to
time become a party thereto (collectively, the “Lenders”), Société Générale in
its capacities as a Lender and as Agent and the Collateral Agent, the Lenders
have agreed to make certain Loans to the Borrower, on the terms and subject to
the conditions of the Credit Agreement.

 

B. It is a requirement under the Credit Agreement and a condition precedent to
the making of the Loans that the Pledgors shall have executed and delivered this
Agreement.

 

C. To induce the Lenders to enter into, and to extend credit under, the Credit
Agreement, the Pledgors have agreed to pledge and grant a security interest in
the Collateral (including the Pledge Agreement Collateral) to the Collateral
Agent as collateral security for the Secured Obligations.

 

NOW, THEREFORE, in consideration of the premises and covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE XII

 

DEFINITIONS

 

Capitalized terms that are defined herein shall have the meanings herein
specified and such definitions shall be equally applicable to the singular and
plural forms of the terms defined. Capitalized terms not otherwise defined
herein shall have the meanings set forth in, and the interpretations applicable
thereto under, the Credit Agreement. All terms used herein which are not defined
herein or in the Credit Agreement and are defined in the Uniform Commercial Code
shall have the meanings therein stated. Unless otherwise stated, any agreement,
contract or document defined or referred to herein shall mean such agreement,
contract or document and all schedules, exhibits and attachments thereto as in
effect as of the date hereof, as the same may thereafter be amended,
supplemented or modified and in effect from time to time in accordance

 

     - 1 -    EXHIBIT E           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

with the terms of this Agreement and the other Transaction Documents and shall
include any agreement, contract or document in substitution or replacement of
any of the foregoing in accordance with the terms of this Agreement and the
other Transaction Documents. Any reference to any Person shall include its
permitted successors and assigns in accordance with the terms of this Agreement
and the other Transaction Documents, and in the case of any Government
Authority, any Persons succeeding to its functions and capacities. Unless the
context clearly intends to the contrary, pronouns having a masculine or feminine
gender shall be deemed to include the other. All references in this Agreement to
designated “Articles”, “Sections” and other subdivisions are to the designated
Articles, Sections and other subdivisions of this Agreement. The words “herein”,
“hereof” and “hereunder” and other words of similar import refer to this
Agreement as a whole and not to any particular Article, Section or other
subdivision.

 

“Pledge Agreement Collateral” shall have the meaning assigned to such term in
Article III hereof.

 

“Permitted Pledgor Liens” shall mean (a) Liens imposed by any Government Rule
which are not yet due or which are being Contested, (b) Liens created pursuant
to this Agreement or (c) Liens in the nature of restrictions on transfer and
other restrictions, encumbrances or preferential rights under the Partnership
Agreement.

 

“Records” shall have the meaning assigned to such term in Article II(a) hereof.

 

“Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect
from time to time in the State of New York; provided, that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of any security interests hereunder in any Pledge Agreement
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than New York, “UCC” shall mean the Uniform Commercial Code
as in effect in such other jurisdiction for purposes of the provisions hereof
relating to such perfection or effect of perfection or non-perfection.

 

ARTICLE XIII

 

REPRESENTATIONS AND WARRANTIES

 

Each Pledgor represents and warrants with respect to itself to the Collateral
Agent for the benefit of the Secured Parties that:

 

(a) The principal place of business and chief executive office of such Pledgor
and the office where such Pledgor keeps its records concerning the Pledge
Agreement Collateral (hereinafter, collectively, the “Records”) is located at
such Pledgor’s address for notices set forth on the signature pages hereto.

 

(b) Sabine GP is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and is duly
qualified to do business and is in good standing in all places where necessary
in light of the business it conducts and the property it owns and in light of
the transactions contemplated by this Agreement, the Partnership Agreement and
each other Transaction Document to which it

 

     - 2 -    EXHIBIT E           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

is a party. Sabine LP is a limited liability company duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
formation and is duly qualified to do business and is in good standing in all
places where necessary in light of the business it conducts and the property it
owns and in light of the transactions contemplated by this Agreement, the
Partnership Agreement and each other Transaction Document to which it is a
party.

 

(c) Such Pledgor has the full corporate or limited liability company power, as
the case may be, authority and legal right to execute, deliver and perform its
obligations under this Agreement, the Partnership Agreement and each other
Transaction Document to which it is a party. The execution, delivery and
performance by such Pledgor of this Agreement, the Partnership Agreement and
each other Transaction Document to which it is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate and limited liability company action, as the case may
be, of such Pledgor. Each of this Agreement, the Partnership Agreement and each
other Transaction Document to which it is a party has been duly executed and
delivered by such Pledgor, is in full force and effect and is the legal, valid
and binding obligation of such Pledgor, enforceable against such Pledgor in
accordance with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, moratorium or other similar laws affecting
the enforcement of creditors’ rights generally and (ii) the application of
general principles of equity (regardless of whether enforcement thereof is
sought in a proceeding at law or in equity). Such Pledgor is not in default in
the performance of any covenant or obligation set forth in this Agreement, the
Partnership Agreement, any other Transaction Document to which it is a party or
any other indenture or loan or credit agreement or other agreement, lease or
instrument to which it is a party or by which any of its property may be bound
or affected except any such default that could not reasonably be expected to
result in a Material Adverse Effect.

 

(d) The execution, delivery and performance by such Pledgor of this Agreement,
the Partnership Agreement and each other Transaction Document to which it is a
party and the consummation of the transactions contemplated hereby and thereby
do not:

 

(i) require any consent or approval of the board of directors, any shareholder,
member or manager, as the case may be, of such Pledgor or any other Person that
has not been duly obtained and each such consent or approval that has been
obtained is in full force and effect,

 

(ii) violate any provision of the charter documents of such Pledgor or any
applicable Government Rule or Government Approval applicable to such Pledgor,

 

(iii) conflict with, result in a breach of or constitute a default under any
provision of any resolution of the board of directors or managers, as the case
may be, of such Pledgor or any indenture or loan or credit agreement or other
material agreement, lease or instrument to which such Pledgor is a party or by
which it or

 

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any of its property may be bound or affected except any such conflict, breach or
default that could not reasonably be expected to result in a Material Adverse
Effect, or

 

(iv) result in, or require the creation or imposition of, any Lien, upon or with
respect to the Pledge Agreement Collateral, except for Permitted Pledgor Liens.

 

Such Pledgor is not in violation of any applicable Government Rule except any
such violation that could not reasonably be expected to result in a Material
Adverse Effect.

 

(e) This Agreement creates in favor of the Collateral Agent, for the benefit of
the Secured Parties, a valid lien on and security interest in all of such
Pledgor’s right, title and interest in, to and under the Pledge Agreement
Collateral, subject to no other Lien except Permitted Pledgor Liens, securing
the payment and performance of the Secured Obligations, and all filings and
other actions necessary to create, preserve, validate, perfect and protect such
Lien and the priority thereof have been duly made or taken (other than any such
filings or other actions permitted to be made or taken after the Closing Date in
accordance with this Agreement and the other Financing Documents).

 

(f) No Government Approval by, and no filing with, any Government Authority is
required to be obtained by such Pledgor in connection with this Agreement, the
Partnership Agreement or any other Transaction Document to which it is a party
and the transactions contemplated hereby and thereby (except for such Government
Approvals and such filings heretofore obtained or made and in full force and
effect and for the filing of the financing statements in the relevant
jurisdictions).

 

(g) Such Pledgor is the sole legal and beneficial owner of the Pledge Agreement
Collateral in which it purports to grant a security interest pursuant to Article
III hereof, and no Lien exists upon the Pledge Agreement Collateral (and, with
respect to its partnership interest in the Borrower, no right or option, except
as provided in the Partnership Agreement, to acquire the same exists in favor of
any other Person), except for the pledge and security interest in favor of the
Collateral Agent for the benefit of the Secured Parties created or provided for
herein and except for Permitted Pledgor Liens.

 

(h) There is no action, suit or proceeding at law or in equity by or before any
Government Authority, arbitral tribunal or other body now pending, or to the
knowledge of such Pledgor, threatened, against or affecting such Pledgor or any
of its property or the Pledge Agreement Collateral which could reasonably be
expected to result in a Material Adverse Effect.

 

(i) Such Pledgor has filed, or caused to be filed, all tax and information
returns that are required to have been filed by it in any jurisdiction, and has
paid (prior to their delinquency dates) all Taxes shown to be due and payable on
such returns and all other Taxes payable by it, to the extent the same have
become due and payable, except to the extent there is Contest thereof by such
Pledgor or to the extent that the failure to file

 

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such returns or to pay such Taxes could reasonably be expected to result in a
Material Adverse Effect, and no tax Liens have been filed and no claims are
being asserted with respect to any such Taxes except any such tax Liens and
claims that could not be reasonably be expected to result in a Material Adverse
Effect.

 

(j) Such Pledgor is not (i) an “investment company” or an entity “controlled” by
an “investment company” as such terms are defined in the Investment Company Act
of 1940, as amended, or an “investment advisor” within the meaning of the
Investment Company Act of 1940, as amended or (ii) subject to regulation as a
“public-utility company,” a “holding company” or a “subsidiary company” or
“affiliate” of any of the foregoing, under the Public Utility Holding Company
Act of 1935, as amended.

 

(k) Such Pledgor is a partner in the Borrower and its partnership interest
together with the interest of the other Pledgor constitutes 100% of the
authorized, issued and outstanding partnership interests in the Borrower as of
the date hereof.

 

ARTICLE XIV

 

PLEDGE AGREEMENT COLLATERAL

 

As collateral security for the prompt payment in full when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations now
existing or hereafter arising, each Pledgor hereby pledges, assigns,
hypothecates and transfers to the Collateral Agent for the benefit of the
Secured Parties, and hereby grants to the Collateral Agent for the benefit of
the Secured Parties, a lien on and security interest in all of such Pledgor’s
right, title and interest in, to and under the following, whether now owned by
such Pledgor or hereafter acquired and whether now existing or hereafter coming
into existence and wherever located (all being collectively referred to herein
as the “Pledge Agreement Collateral”):

 

(a) its partnership interest in the Borrower, including, without limitation, all
of its right, title and interest in, to and under the Partnership Agreement,
including, without limitation, (i) all rights of such Pledgor to receive moneys
due but unpaid and to become due under or pursuant to the Partnership Agreement,
(ii) all rights of such Pledgor to participate in the operation or management of
the Borrower and to take actions or consent to actions in accordance with the
provisions of the Partnership Agreement, (iii) all rights of such Pledgor to
property of the Borrower, (iv) all rights of such Pledgor to receive proceeds of
any insurance, bond, indemnity, warranty or guaranty with respect to the
Partnership Agreement, (v) all claims of such Pledgor for damages arising out of
or for breach of or default under the Partnership Agreement and (vi) all rights
of such Pledgor to terminate, amend, supplement, modify or waive performance
under the Partnership Agreement, to perform thereunder and to compel performance
and otherwise to exercise all remedies thereunder;

 

(b) all certificates representing its partnership interest or a distribution or
return of capital upon or with respect to its partnership interest or resulting
from a split-up, revision, reclassification or other like change of the Pledge
Agreement Collateral or otherwise received in exchange therefor, and any
subscription warrants, rights or options issued to the holders of, or otherwise
in respect of the Pledge Agreement Collateral; and

 

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(c) to the extent not included in the foregoing, all proceeds, products,
offspring, rents, revenues, issues, profits, royalties, income, benefits,
accessions, additions, substitutions and replacements of and to any and all of
the foregoing.

 

ARTICLE XV

 

COVENANTS

 

Each Pledgor covenants and agrees that, until the Secured Obligations have been
indefeasibly paid in full:

 

(a) Such Pledgor shall not (i) cancel or terminate the Partnership Agreement or
consent to or accept any cancellation or termination thereof or (ii) amend,
supplement or modify (or petition, request or take any other legal or
administrative action that seeks to amend, supplement or modify) the Partnership
Agreement except as permitted pursuant to Section 8.11(a) of the Credit
Agreement or (iii) take or otherwise consent to any action that would result in
an Event of Default.

 

(b) Such Pledgor shall preserve and maintain its corporate or limited
liabilities company existence, as the case may be, and all of its rights,
privileges and franchises that are necessary for the maintenance of its
existence and the due performance of its obligations under this Agreement and
the Partnership Agreement.

 

(c) Such Pledgor shall pay and discharge all Taxes now or hereafter imposed on
such Pledgor, on its income or profits, on any of its property or upon the Liens
provided for herein, prior to the date on which penalties attach thereto, except
to the extent that the failure to pay such Taxes could not reasonably be
expected to result in a Material Adverse Effect; provided that such Pledgor
shall have the right to Contest the validity or amount of any such Tax.

 

(d) Such Pledgor shall not (i) create, incur, assume or suffer to exist any Lien
upon any of the Pledge Agreement Collateral other than Permitted Pledgor Liens,
(ii) directly or indirectly create or incur any debt except Indebtedness for
borrowed money under the Partnership Agreement or Indebtedness for borrowed
money owed to Affiliates of such Pledgor, (iii) directly or indirectly create,
incur, assume or otherwise become liable with respect to any Guaranty except any
Guaranty directly arising under the Partnership Agreement, (iv) make any
investments other than Permitted Investments and investments in the Borrower,
(v) engage in any business other than in connection with its partnership
interest in the Borrower and, with respect to Sabine GP, in connection with its
obligations pursuant to the Management Services Agreement, (vi) merge into or
consolidate with any Person or (vii) purchase or acquire any assets, or convey,
sell, lease transfer or otherwise dispose of, in one transaction or a series of
transactions, any assets except investments permitted under clause (iv) above.

 

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(e) Such Pledgor shall promptly but in no case later than five Business Days
upon obtaining knowledge of any action, suit or proceeding at law or in equity
by or before any Government Authority, arbitral tribunal or other body pending
or threatened against such Pledgor which could reasonably be expected to result
in a Material Adverse Effect with respect to it, furnish to the Collateral Agent
a notice of such event describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a description of the action
that such Pledgor has taken or proposes to take with respect thereto.

 

(f) Such Pledgor shall not sell, assign, transfer or otherwise dispose of all or
any part of its partnership interest in the Borrower, or consent to the creation
of any limited or partnership interest in the Borrower in a manner so as to
cause the occurrence of an Event of Default under Section 9.01(q) of the Credit
Agreement.

 

(g) Such Pledgor shall not voluntarily withdraw as a partner in the Borrower in
a manner so as to cause the occurrence of an Event of Default under Section
9.01(q) of the Credit Agreement.

 

(h) Such Pledgor shall not petition, request or take, or consent to, any action
to terminate, dissolve or liquidate the Borrower or commence or consent to the
commencement of any proceeding seeking the termination, dissolution or
liquidation of the Borrower.

 

ARTICLE XVI

 

FURTHER ASSURANCES; REMEDIES

 

In furtherance of the grant of the lien and security interest pursuant to
Article III hereof, each Pledgor hereby agrees with the Collateral Agent as
follows:

 

16.01 Delivery and Other Perfection. Such Pledgor shall:

 

(a) if any of the certificates, warrants, rights, options or other property
required to be pledged by such Pledgor under Article III hereof are received by
such Pledgor, forthwith:

 

(i) transfer and deliver to the Collateral Agent such certificates, warrants,
rights, options or other property so received by such Pledgor all of which
thereafter shall be held by the Collateral Agent, pursuant to the terms of this
Agreement, as part of the Pledge Agreement Collateral; and/or

 

(ii) take such other action as the Collateral Agent shall reasonably deem
necessary or appropriate to duly record the Lien created hereunder in such
certificates, warrants, rights, options or other property;

 

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(b) give, execute, deliver, file and/or record any financing statement,
continuation statement, notice, instrument, document, agreement or other papers
that may be required:

 

(i) to create, preserve, perfect or validate the security interest granted
pursuant hereto so that the Collateral Agent’s security interest in Pledge
Agreement Collateral shall at all times be valid, perfected and enforceable
against such Pledgor and all third parties, as security for the Secured
Obligations, and that the applicable Pledge Agreement Collateral shall not at
any time be subject to any Lien, other than a Permitted Pledgor Lien, that is
prior to, on parity with or junior to such security interest, or

 

(ii) to enable the Collateral Agent to exercise and enforce its rights hereunder
with respect to such pledge and security interest, including, without
limitation, causing any or all of the Pledge Agreement Collateral to be
transferred of record into the name of the Collateral Agent or its nominee (and
the Collateral Agent agrees that if any Pledge Agreement Collateral is
transferred into its name or the name of its nominee, the Collateral Agent shall
thereafter promptly give to such Pledgor copies of any notices and
communications received by it with respect to the Pledge Agreement Collateral).

 

Without limiting the generality of the foregoing, such Pledgor shall, if any
Pledge Agreement Collateral shall be evidenced by a promissory note or other
instrument, deliver and pledge to the Collateral Agent such note or instrument
duly endorsed or accompanied by duly executed instruments of transfer or
assignment, all in such form and substance as will allow the Collateral Agent to
realize upon the Pledge Agreement Collateral pursuant to Section 5.05 hereof;

 

(c) maintain, hold and preserve full and accurate records, and stamp or
otherwise mark such records in such manner as may reasonably be required in
order to reflect the security interests granted by this Agreement; and

 

(d) permit representatives of the Collateral Agent, upon reasonable notice, at
any time during normal business hours to conduct reasonable inspections and
examinations of, and make reasonable abstracts from, its Records and, upon
reasonable request of the Collateral Agent, forward to the Collateral Agent
copies of all communications relating to the Pledge Agreement Collateral and
copies of any material notices or communications received by such Pledgor with
respect to the Pledge Agreement Collateral, all in such manner as the Collateral
Agent may reasonably require.

 

16.02 Other Financing Statements and Liens. Without the prior consent of the
Collateral Agent (granted with the written authorization of the Secured Parties
in accordance with the Credit Agreement), no Pledgor shall file or suffer to be
on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Pledge Agreement Collateral in which the Collateral Agent is not named as the
sole secured party for the benefit of the Secured Parties.

 

16.03 Preservation of Rights. The Collateral Agent shall not be required to take
steps necessary to preserve any rights against prior parties to any of the
Pledge Agreement Collateral.

 

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16.04 Pledge Agreement Collateral.

 

(a) So long as no Event of Default shall have occurred and be continuing, each
Pledgor shall have the right to exercise all voting, consensual and other powers
of ownership pertaining to the Pledge Agreement Collateral for all purposes not
inconsistent with the terms of this Agreement, any Project Document or any other
Transaction Document; and the Collateral Agent shall execute and deliver to each
Pledgor or cause to be executed and delivered to each Pledgor all such proxies,
powers of attorney, dividend and other orders, and all such instruments, without
recourse, as such Pledgor may reasonably request for the purpose of enabling
such Pledgor to exercise the rights and powers which it is entitled to exercise
pursuant to this Section 5.04(a).

 

(b) Each Pledgor shall be entitled to receive and retain any and all Restricted
Payments to which it is entitled under the Partnership Agreement and, in the
case of Sabine Pass LNG – GP, Inc., all amounts payable to it in accordance with
the Management Services Agreement, and distribute as dividends or otherwise any
and all such Restricted Payments, to the extent that such Restricted Payments
are made by the Borrower in accordance with the Credit Agreement and the other
Financing Documents.

 

(c) If any Event of Default shall have occurred and be continuing, and whether
or not the Collateral Agent or any other Secured Party exercises any available
right to declare any Secured Obligation due and payable or seeks or pursues any
other relief or remedy available to it under applicable Government Rule or under
this Agreement or any other Financing Document, all Restricted Payments to which
any Pledgor is entitled under the Partnership Agreement, the Credit Agreement
and the other Financing Documents while such Event of Default continues, shall
be paid directly to the Collateral Agent and retained by it as part of the
Pledge Agreement Collateral, subject to the terms of this Agreement, and, if the
Collateral Agent shall so request, each Pledgor agrees to execute and deliver to
the Collateral Agent appropriate additional dividend, distribution and other
orders and documents to that end, provided that if such Event of Default is
waived or cured, any such Restricted Payment theretofore paid to the Collateral
Agent shall, upon request of such Pledgor (except to the extent theretofore
applied to the Secured Obligations), be returned by the Collateral Agent to such
Pledgor.

 

16.05 Event of Default. If any Event of Default shall occur and be continuing
then,

 

(a) the Collateral Agent shall have the rights and the obligations with respect
to this Agreement as more particularly provided in the Credit Agreement;

 

(b) the Collateral Agent, may, without notice to each Pledgor and at such time
or times as the Collateral Agent in its sole discretion may determine, exercise
any or all of such Pledgor’s rights in, to and under, or in any way connected
with or related to any of the Pledge Agreement Collateral and the Collateral
Agent shall otherwise have all of the rights and remedies with respect to the
Pledge Agreement Collateral of a secured party under the Uniform Commercial Code
(whether or not said Code is in effect in the jurisdiction where the rights and
remedies are asserted) and such additional rights and

 

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remedies to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted, including,
without limitation, the right, to the maximum extent permitted by applicable
Government Rule, to exercise all voting, consensual and other powers of
ownership pertaining to the Pledge Agreement Collateral as if the Collateral
Agent were the sole and absolute owner thereof (and each Pledgor agrees to take
all such action as may be appropriate to give effect to such right);

 

(c) the Collateral Agent may make any reasonable compromise or settlement deemed
desirable with respect to any of the Pledge Agreement Collateral and may extend
the time of payment, arrange for payment in installments, or otherwise modify
the terms, of any of the Pledge Agreement Collateral;

 

(d) the Collateral Agent may, in its name or in the name of each Pledgor or
otherwise, demand, sue for, collect or receive any money or property at any time
payable or receivable on account of or in exchange for any of the Pledge
Agreement Collateral, but shall be under no obligation to do so; and

 

(e) the Collateral Agent shall upon the request of the Majority Lenders upon 10
Business Days’ prior notice to each Pledgor of the time and place, with respect
to the Pledge Agreement Collateral or any part thereof which shall then be or
shall thereafter come into the possession, custody or control of the Collateral
Agent, the other Secured Parties or any of their respective agents, sell, lease,
assign or otherwise dispose of all or any part of such Pledge Agreement
Collateral, at such place or places as the Collateral Agent deems best, and for
cash or for credit or for future delivery (without thereby assuming any credit
risk), at public or private sale, without demand of performance or notice of
intention to effect any such disposition or of the time or place thereof (except
such notice as is required above or by applicable statute and cannot be waived),
and the Collateral Agent or any other Secured Party or anyone else may be the
purchaser, lessee, assignee or recipient of any or all of the Pledge Agreement
Collateral so disposed of at any public sale (or, to the maximum extent
permitted by applicable Government Rule, at any private sale) and thereafter
hold the same absolutely, free from any claim or right of whatsoever kind,
including any right or equity of redemption (statutory or otherwise), of any
Pledgor, any such demand, notice and right or equity being hereby expressly
waived and released to the maximum extent permitted by applicable Government
Rule. The Collateral Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for the sale, and such sale may be made
at any time or place to which the sale may be so adjourned.

 

The proceeds of each collection, sale or other disposition under this Section
5.05 shall be applied in accordance with Section 5.08 hereof.

 

Each Pledgor recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities laws, the
Collateral Agent may be compelled, with respect to any sale of all or any part
of the Pledge Agreement Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Pledge Agreement Collateral for their own
account, for investment and not with a view to the distribution or resale

 

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thereof. Each Pledgor acknowledges that any such private sale may be at prices
and on terms less favorable to the Collateral Agent than those obtainable
through a public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Collateral Agent shall
have no obligation to engage in public sales and no obligation to delay the sale
of any Pledge Agreement Collateral for the period of time necessary to permit
the respective issuer thereof to register it for public sale.

 

16.06 Removals, Etc. Without at least 30 days’ prior notice to the Collateral
Agent, no Pledgor shall:

 

(a) maintain any of its Records at any office or maintain its principal place of
business or chief executive office at any place other than at such Pledgor’s
address for notices set forth on the signature pages hereto, or

 

(b) change its corporate name, or the name under which it does business, from
the name shown on the signature pages hereto.

 

16.07 Private Sale. The Collateral Agent and the other Secured Parties shall
incur no liability as a result of the sale of the Pledge Agreement Collateral,
or any part thereof, at any private sale pursuant to Section 5.05 hereof
conducted in a commercially reasonable manner. Each Pledgor hereby waives, to
the maximum extent permitted by applicable Government Rule, any claims against
the Collateral Agent or any other Secured Party arising by reason of the fact
that the price at which the Pledge Agreement Collateral may have been sold at
such a commercially reasonable private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the
Secured Obligations, even if, to the extent that it is commercially reasonable
to do so, the Collateral Agent accepts the first offer received and does not
offer the Pledge Agreement Collateral to more than one offeree.

 

16.08 Application of Proceeds. Except as otherwise herein expressly provided,
the proceeds of any collection, sale or other realization of all or any part of
the Pledge Agreement Collateral pursuant hereto shall be remitted to the
Collateral Agent in the form received with all necessary endorsements and, to
the maximum extent permitted by applicable Government Rule, be applied in
accordance with Section 6.04 of the Security Agreement.

 

16.09 Attorney-in-Fact. Without limiting any rights or powers granted by this
Agreement to the Collateral Agent while no Event of Default has occurred and is
continuing, upon the occurrence and during the continuance of any Event of
Default the Collateral Agent is hereby appointed the attorney-in-fact of the
Pledgors for the purpose of carrying out the provisions of this Article V and
taking any action and executing any instruments which may be reasonably required
to accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, so long as the Collateral Agent shall be entitled under this Article
V to make collections in respect of the Pledge Agreement Collateral, the
Collateral Agent shall have the right and power to receive, endorse and collect
all checks made payable to the order of the Pledgors representing any dividend,
payment or other distribution in respect of the Pledge Agreement Collateral or
any part thereof and to give full discharge for the same.

 

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16.10 Perfection. Prior to the Closing Date, each Pledgor shall file or cause to
be filed such financing statements and other documents in the offices set forth
on Annex I hereto and such other offices as may be necessary to perfect the
security interests granted by Article III hereof. Each Pledgor hereby authorizes
the Collateral Agent to file one or more financing or continuation statements,
and amendments thereto, relating to all or any part of the Pledge Agreement
Collateral without the signature of such Pledgor where permitted by applicable
Government Rule; provided that such authorization shall not release such Pledgor
from its obligations under Section 5.01(b) hereof. Copies of any such statement
or amendment thereto shall promptly be delivered to such Pledgor.

 

16.11 Release and Termination.

 

(a) Upon any transfer of any Pledge Agreement Collateral by any Pledgor not
prohibited by this Agreement or the Financing Documents, the Collateral Agent
shall, upon the written request of (and at the sole cost and expense of) such
Pledgor, promptly execute and deliver to such Pledgor such Uniform Commercial
Code termination statements and such other documentation as shall be requested
by such Pledgor to effect the termination and release of the Liens on such
Pledge Agreement Collateral.

 

(b) Upon the date that the Secured Obligations are indefeasibly paid in full,
the security interest created by this Agreement shall terminate and all rights
to the Pledge Agreement Collateral shall revert to the Pledgors, and the
Collateral Agent shall, upon receipt of written notice from the Agent that the
Secured Obligations have been so paid, forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Pledge Agreement Collateral and money
received in respect thereof, to or on the order of the Pledgors. The Collateral
Agent shall also promptly execute and deliver to each Pledgor at such Pledgor’s
expense, upon receipt of such written notice from the Agent, such Uniform
Commercial Code termination statements and such other documentation as shall be
requested by such Pledgor to effect the termination and release of the Liens on
the Pledge Agreement Collateral.

 

16.12 Further Assurances. Each Pledgor agrees that, from time to time upon the
request of the Collateral Agent, each Pledgor shall execute and deliver such
further documents and do such other acts and things as the Collateral Agent may
reasonably request in order fully to effectuate the purposes of this Agreement.

 

ARTICLE XVII

 

MISCELLANEOUS

 

17.01 Expenses of Pledgor’s Agreements and Duties. The terms, conditions,
covenants and agreements to be observed or performed by each Pledgor under this
Agreement shall be observed or performed by it at its sole cost and expense.

 

17.02 Collateral Agent’s Right to Perform on Pledgor’s Behalf. If any Pledgor
shall fail to observe or perform any of the terms, conditions, covenants and
agreements to be observed or performed by it under this Agreement, the
Collateral Agent may (but shall not be

 

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obligated to), to the extent legally practicable (and so long as the rights of
the Collateral Agent shall not be adversely affected thereby (as determined by
the Collateral Agent)), upon reasonable notice to such Pledgor, do the same or
cause it to be done or performed or observed at the expense of such Pledgor,
either in its name or in the name and on behalf of such Pledgor, and such
Pledgor hereby authorizes the Collateral Agent so to do.

 

17.03 Waivers of Rights Inhibiting Enforcement. Each Pledgor waives:

 

(a) any claim that, as to any part of the Pledge Agreement Collateral, a public
sale, should the Collateral Agent elect so to proceed, is, in and of itself, not
a commercially reasonable method of sale for the Pledge Agreement Collateral,

 

(b) the right to assert in any action or proceeding between it and the
Collateral Agent relating to this Agreement any offsets or counterclaims (other
than mandatory counterclaims) that it may have,

 

(c) except as otherwise provided in this Agreement, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, NOTICE OR JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
AGENT’S TAKING POSSESSION OR DISPOSITION OF ANY OF THE PLEDGE AGREEMENT
COLLATERAL INCLUDING ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT SUCH PLEDGOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND
ALL OTHER REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE OR OTHER
REQUIREMENTS WITH RESPECT TO THE ENFORCEMENT OF THE COLLATERAL AGENT’S RIGHTS
HEREUNDER,

 

(d) all rights of redemption, appraisement, valuation, stay and extension or
moratorium, and

 

(e) all other rights the exercise of which would, directly or indirectly,
prevent, delay or inhibit the enforcement of any of the rights or remedies under
this Agreement or the absolute sale of the Pledge Agreement Collateral, now or
hereafter in force under any applicable Government Rule, and each Pledgor, for
itself and all who may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waive the benefit of all such laws and rights.

 

17.04 No Waiver. No failure on the part of the Collateral Agent or any of its
agents to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or remedy hereunder shall operate as a waiver
thereof, and no single or partial exercise by the Collateral Agent or any of its
agents of any right, power or remedy hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies provided herein are cumulative and are not exclusive of any
remedies provided by applicable Government Rule.

 

17.05 Notices. All notices, requests and other communications provided for in
this Agreement shall be given or made in writing (including by telecopy) and
delivered to the

 

     - 13 -    EXHIBIT E           TO CREDIT AGREEMENT

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intended recipient at the address specified below or, as to any party, at such
other address as is designated by that party in a notice to each other party.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have been duly given when transmitted by telecopy or personally
delivered or, in the case of a mailed notice or notice sent by courier, upon
receipt, in each case given or addressed as provided in this Section 6.05.

 

If to the Pledgors:

 

Sabine Pass LNG – LP, LLC

2215 –B Renaissance Drive, Suite 5

Las Vegas, NV 88119

 

Sabine Pass LNG – GP, Inc.

717 Texas Avenue, Suite 3100

Houston, TX 77002

 

If to the Collateral Agent:

 

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.

 

17.06 Waivers, Etc. This Agreement may be amended, supplemented or modified only
by an instrument in writing signed by each Pledgor and the Collateral Agent
acting in accordance with the Credit Agreement, and any provision of this
Agreement may be waived by the Collateral Agent acting in accordance with the
Credit Agreement; provided that no amendment, supplement, modification or waiver
shall, unless by an instrument in writing signed by the Collateral Agent acting
with the consent of all of the Secured Parties, alter the terms of this Section
6.06. Any waiver shall be effective only in the specific instance and for the
specified purpose for which it was given.

 

17.07 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the respective successors and assigns of each Pledgor, the
Collateral Agent, the other Secured Parties and each holder of any of the
Secured Obligations (provided, however, that no Pledgor shall assign or transfer
its rights hereunder without the prior consent of the Collateral Agent acting in
accordance with Credit Agreement).

 

     - 14 -    EXHIBIT E           TO CREDIT AGREEMENT

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17.08 Counterparts; Effectiveness. This Agreement may be executed in any number
of counterparts, all of which when taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall become effective at such time
as the Collateral Agent and the Pledgors shall have received counterparts hereof
signed by all of the intended parties hereto.

 

17.09 Agents, Etc. The Collateral Agent may employ agents and attorneys-in-fact
in connection herewith and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
Each Pledgor acknowledges that it has received a copy of the Credit Agreement
and the Security Agreement and acknowledges and agrees to the terms and
conditions of the Credit Agreement and the Security Agreement as the same apply
hereto.

 

17.10 Severability. If any provision hereof is invalid or unenforceable in any
jurisdiction, then, to the fullest extent permitted by applicable Government
Rule, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (b) the
invalidity or unenforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.

 

17.11 The Collateral Agent. As provided in Section 2.01 of the Collateral Agency
Agreement, the Secured Parties have appointed HSBC Bank USA, National
Association, as their Collateral Agent for purposes of this Agreement.

 

17.12 Headings. Headings appearing herein are used solely for convenience of
reference and are not intended to affect the interpretation of any provision of
this Agreement.

 

17.13 Limitation of Liability. NEITHER THE COLLATERAL AGENT NOR ANY OTHER
SECURED PARTY SHALL HAVE LIABILITY WITH RESPECT TO, AND EACH PLEDGOR HEREBY
WAIVES, RELEASES AND AGREES NOT TO SUE FOR:

 

(a) ANY LOSS OR DAMAGE SUSTAINED BY SUCH PLEDGOR, OR ANY LOSS, DAMAGE,
DEPRECIATION OR OTHER DIMINUTION IN THE VALUE OF ANY PLEDGE AGREEMENT
COLLATERAL, THAT MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY
WAY RELATED TO, ANY EXERCISE OF ANY RIGHT OR REMEDY UNDER THIS AGREEMENT EXCEPT
FOR ANY SUCH LOSS, DAMAGE, DEPRECIATION OR DIMINUTION TO THE EXTENT THAT THE
SAME IS THE RESULT OF ACTS OR OMISSIONS ON THE PART OF SUCH SECURED PARTY
CONSTITUTING WILLFUL MISCONDUCT OR GROSS NEGLIGENCE; OR

 

(b) ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES SUFFERED BY SUCH PLEDGOR IN
CONNECTION WITH ANY CLAIM RELATED TO THIS AGREEMENT.

 

     - 15 -    EXHIBIT E           TO CREDIT AGREEMENT

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17.14 Security Interest Absolute. The rights and remedies of the Collateral
Agent hereunder, the Liens created hereby and the obligations of each Pledgor
hereunder are absolute, irrevocable and unconditional, irrespective of:

 

(a) the validity or enforceability of any of the Secured Obligations, the
Partnership Agreement, any other Financing Document or any other agreement or
instrument relating thereto;

 

(b) any amendment to, waiver of, consent to or departure from, or failure to
exercise any right, remedy, power or privileges under or in respect of, any of
the Secured Obligations, the Partnership Agreement, any other Financing Document
or any other agreement or instrument relating thereto;

 

(c) the acceleration of the maturity of any of the Secured Obligations or any
other modification of the time of payment thereof;

 

(d) any substitution, release or exchange of any other security for or guarantee
of any of the Secured Obligations or the failure to create, preserve, validate,
perfect or protect any other Lien granted to, or purported to be granted to, or
in favor of, the Collateral Agent or any other Secured Party; or

 

(e) any other event or circumstance whatsoever which might otherwise constitute
a legal or equitable discharge of a surety or a guarantor other than payment or
performance of the Secured Obligations, it being the intent of this Section 6.14
that the obligations of each Pledgor hereunder shall be absolute, irrevocable
and unconditional under any and all circumstances.

 

17.15 Subrogation. To the greatest extent permitted by Government Rule, no
Pledgor shall exercise, and each Pledgor hereby irrevocably waives, any claim,
right or remedy that it may now have or may hereafter acquire against the
Borrower arising under or in connection with this Agreement, including, without
limitation, any claim, right or remedy of subrogation, contribution,
reimbursement, exoneration, indemnification or participation arising under
contract, by Government Rule or otherwise in any claim, right or remedy of the
Collateral Agent against the Borrower or any other Person or any Collateral
which the Collateral Agent may now have or may hereafter acquire until the date
the Secured Obligations are indefeasibly paid in full. If, notwithstanding the
preceding sentence, any amount shall be paid to any Pledgor on account of such
subrogation rights at any time when any of the Secured Obligations shall not
have been paid in full, such amount shall be held by such Pledgor in trust for
the Collateral Agent and the Secured Parties, segregated from other funds of
such Pledgor and be turned over to the Collateral Agent in the exact form
received by such Pledgor (duly endorsed by such Pledgor to the Collateral Agent,
if required), to be applied against the Secured Obligations, whether matured or
unmatured, in accordance with the Credit Agreement and the Security Documents.

 

17.16 Reinstatement. This Agreement and the Lien created hereunder shall
automatically be reinstated if and to the extent that for any reason any payment
by or on behalf of the Borrower in respect of the Secured Obligations is
rescinded or must otherwise be restored

 

     - 16 -    EXHIBIT E           TO CREDIT AGREEMENT

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by any holder of the Secured Obligations, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise, and each Pledgor shall indemnify
the Collateral Agent and its employees, officers and agents on demand for all
reasonable and documented fees, costs and expenses (including, without
limitation, the reasonable fees, costs and expenses of counsel) incurred by the
Collateral Agent or its employees, officers or agents in connection with such
rescission or restoration.

 

17.17 NO THIRD PARTY BENEFICIARIES. THE AGREEMENTS OF THE PARTIES HERETO ARE
SOLELY FOR THE BENEFIT OF EACH PLEDGOR, THE COLLATERAL AGENT AND THE OTHER
SECURED PARTIES, AND NO PERSON (OTHER THAN THE PARTIES HERETO, THE OTHER SECURED
PARTIES AND THEIR SUCCESSORS AND ASSIGNS PERMITTED HEREUNDER) SHALL HAVE ANY
RIGHTS HEREUNDER.

 

17.18 CONSENT TO JURISDICTION. ALL LEGAL ACTIONS OR PROCEEDINGS BROUGHT AGAINST
ANY PLEDGOR, SECURED PARTY OR THE BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER FINANCING DOCUMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE BOROUGH OF MANHATTAN IN THE STATE OF NEW YORK, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT EACH PLEDGOR, THE BORROWER AND THE
SECURED PARTIES ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES,
THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY
ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PLEDGOR,
THE BORROWER AND THE SECURED PARTIES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE ANY
CLAIM OR DEFENSE IN ANY SUCH ACTION OR PROCEEDING BASED ON ANY ALLEGED LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS OR ANY SIMILAR
BASIS. EACH PLEDGOR HEREBY APPOINTS AND DESIGNATES CT CORPORATION SYSTEM, WHOSE
ADDRESS IS 111 EIGHTH AVENUE, 13TH FLOOR, NEW YORK, NY 10011, OR ANY OTHER
PERSON HAVING AND MAINTAINING A PLACE OF BUSINESS IN THE STATE OF NEW YORK WHOM
SUCH PLEDGOR MAY FROM TIME TO TIME HEREAFTER DESIGNATE (HAVING GIVEN 30 DAYS’
NOTICE THEREOF TO THE COLLATERAL AGENT AND EACH HOLDER OF A NOTE THEN
OUTSTANDING), AS THE DULY AUTHORIZED AGENT FOR RECEIPT OF SERVICE OF LEGAL
PROCESS. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE PARTIES TO BRING
PROCEEDINGS IN THE COURTS OF ANY OTHER JURISDICTION OR TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW.

 

17.19 WAIVER OF JURY TRIAL. AS AMONG EACH PLEDGOR, THE BORROWER AND THE
COLLATERAL AGENT AND AS TO THIS AGREEMENT AND EACH FINANCING DOCUMENT AND
PROJECT DOCUMENT TO WHICH SUCH PERSONS ARE A PARTY, EACH PLEDGOR, THE BORROWER
AND THE COLLATERAL AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR

 

     - 17 -    EXHIBIT E           TO CREDIT AGREEMENT

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COUNTERCLAIM ARISING IN CONNECTION WITH THIS AGREEMENT, AND ANY SUCH FINANCING
DOCUMENT.

 

17.20 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, EXCEPT AS REQUIRED BY
MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, ARE
GOVERNED BY THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

     - 18 -    EXHIBIT E           TO CREDIT AGREEMENT

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

 

SABINE PASS LNG – LP, LLC By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

 

    - 19 -   EXHIBIT E         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SABINE PASS LNG – GP, INC. By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

 

    - 20 -   EXHIBIT E         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

HSBC BANK USA, NATIONAL ASSOCIATION,
    as Collateral Agent By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

    - 21 -   EXHIBIT E         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SABINE PASS LNG, L.P.

      as Borrower

By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

 

    - 22 -   EXHIBIT E         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SOCIÉTÉ GÉNÉRALE,

      as Agent

By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

    - 23 -   EXHIBIT E         TO CREDIT AGREEMENT

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EXHIBIT F

to Credit Agreement

 

TERMS OF SUBORDINATION

 

Section 1. Definitions. Terms used in these Terms of Subordination and not
defined in these Terms of Subordination shall have the meanings assigned to such
terms in the Credit Agreement, as defined below. The following terms shall have
the following respective meanings:

 

“Borrower” shall mean Sabine Pass LNG, L.P., a Delaware limited partnership.

 

“Credit Agreement” shall mean the Credit Agreement dated as of February 25, 2005
among the Borrower, each of the lenders party to the Credit Agreement (the
“Lenders”), SOCIÉTÉ GÉNÉRALE, as agent for the Lenders (in such capacity,
together with its successors in such capacity, the “Agent”) and HSBC BANK USA,
NATIONAL ASSOCIATION as collateral agent for the secured parties specified
therein (in such capacity, the “Collateral Agent”).

 

“Secured Parties” shall mean the Agent, the Collateral Agent and each of the
Lenders (as a Lender under the Credit Agreement and, if applicable, as a
provider of any Permitted Swap Agreements (as defined in the Credit Agreement)).

 

“Secured Obligations” shall mean, as at any date, the sum, computed without
duplication, of the following: (a) the aggregate outstanding principal amount of
the Loans plus all accrued interest on such amount plus (b) all other amounts
from time to time payable under the Financing Documents plus accrued interest on
such amounts plus (c) all amounts payable by the Borrower to any Lender in
connection with any Permitted Swap Agreement plus (d) any and all obligations of
the Borrower to the Agent, the Collateral Agent or any other Secured Party for
the performance of its agreements, covenants or undertakings under or in respect
of any Financing Document.

 

“Subordinated Indebtedness” shall mean any unsecured Indebtedness of the
Borrower to any Person permitted by Section 8.16 of the Credit Agreement which
is subordinated to the Secured Obligations pursuant to this Exhibit F.

 

“Subordinated Party” shall mean the Person that has agreed to be bound by these
Terms of Subordination, together with its successors and assigns.

 

Section 2. Terms of Subordination.

 

2.01 Subordination. The Borrower covenants and agrees, and the Subordinated
Party, on its own behalf and on behalf of each subsequent holder of Subordinated
Indebtedness, covenants and agrees, that the Subordinated Indebtedness is
subordinated in right of payment, to the extent and in the manner provided in
this Section 2, to the indefeasible prior payment in full in cash of all
existing and future Secured Obligations and that the subordination provided for
in this Section 2 is for the benefit of Persons holding Secured Obligations from
time to time, and their representatives. This Section 2 shall remain in full
force and effect as long as any Secured Obligations are outstanding or any
commitment to advance any Secured Obligations exists.

 

    - 1 -   EXHIBIT F         TO CREDIT AGREEMENT

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2.02 Liquidation; Dissolution; Bankruptcy. Upon any payment or distribution of
assets or securities of the Borrower of any kind or character, whether in cash,
securities or other property, to creditors of the Borrower in a liquidation
(total or partial), reorganization, winding-up or dissolution of the Borrower,
whether voluntary or involuntary, or in a bankruptcy, reorganization,
insolvency, receivership, assignment for the benefit of creditors, marshalling
of assets or similar proceeding relating to the Borrower or its Property or
creditors:

 

(a) the holders of Secured Obligations shall be entitled to receive indefeasible
payment in full, in cash, of such Secured Obligations before the Subordinated
Party shall be entitled to receive any payment of principal of or interest on,
or any other payment or distribution of assets or securities (other than any
interest or any securities the payment of which is subordinated at least to the
same extent as the Subordinated Indebtedness to the Secured Obligations, the
rate of interest on which does not exceed the effective rate of interest on the
Subordinated Indebtedness and the principal of which, in whole or in part, is
not due on or prior to the Final Maturity Date) with respect to, any
Subordinated Indebtedness or on account of any purchase or other acquisition of
any Subordinated Indebtedness by the Borrower; and

 

(b) until the Secured Obligations are indefeasibly paid in full in cash, any
payment or distribution of assets or securities of the Borrower of any kind or
character, whether in cash or other Property, to which the Subordinated Party
would be entitled but for this Section 2 shall be made by the Borrower or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment of distribution directly to the holders of Secured
Obligations to the extent necessary to pay all such Secured Obligations in full
in cash.

 

2.03 No Payment. Each Subordinated Party hereby agrees that: (a) unless and
until the principal of, and interest and premium (if any) on, and all other
amounts in respect of, the Secured Obligations then due shall have been paid
indefeasibly in full and in cash, no payment on account of the principal of, or
interest or premium (if any) on, or any other amount in respect of, the
Subordinated Indebtedness or any judgment with respect thereto (and no payment
on account of the purchase or redemption or other acquisition of the
Subordinated Indebtedness) shall be made by or on behalf of the Borrower and (b)
unless and until the principal of, and interest and premium (if any) on, and all
other amounts in respect of, the Secured Obligations shall have been paid
indefeasibly in full and in cash no Subordinated Party shall (i) ask, demand,
sue for, take or receive from the Borrower, by set-off or in any other manner
any payment on account of the principal of, or interest or premium (if any) on,
or any other amount in respect of, the Subordinated Indebtedness or (ii) seek
any other remedy allowed at law or in equity against the Borrower for breach of
the Borrower’s obligations under any instruments representing such Subordinated
Indebtedness. The provisions of this Section 2.03 shall not alter the rights of
the holders of Senior Obligations under the provisions of Section 2.02 hereof.

 

    - 2 -   EXHIBIT F         TO CREDIT AGREEMENT

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2.04 Payments In Trust. If the Subordinated Party shall at any time receive any
payment or distribution that is not permitted under this Section 2, such payment
or distribution shall be held by the Subordinated Party in trust for the benefit
of, and shall be promptly paid over and delivered to, in the form received but
with any necessary endorsements, the Agent for the benefit of the holders of
Secured Obligations (pro rata as to each of such holders on the basis of the
respective amounts of Secured Obligations held by them), for application to the
payment of all Secured Obligations remaining unpaid to the extent necessary to
pay all Secured Obligations in full in cash in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Secured Obligations.

 

2.05 Subrogation. After all Secured Obligations are indefeasibly paid in full in
cash and all commitments to advance any Secured Obligations have been
terminated, and until the Subordinated Indebtedness is paid in full, the
Subordinated Party shall be subrogated (equally and ratably with the holders of
all indebtedness of the Borrower that by its express terms is subordinated to
Secured Obligations of the Borrower to the same extent as the Subordinated
Indebtedness is subordinated and that is entitled to like rights of subrogation)
to the rights of the holders of Secured Obligations to receive distributions
applicable to Secured Obligations to the extent that distributions otherwise
payable to the Subordinated Party have been applied to payment of Secured
Obligations.

 

2.06 No Impairment.

 

(a) Nothing in this Section 2 shall (i) impair, as between the Borrower and the
Subordinated Party, the obligation of the Borrower to pay principal of and
interest on the Subordinated Indebtedness in accordance with their terms, (ii)
affect the relative rights of the Subordinated Party and the creditors of the
Borrower other than the holders of Secured Obligations, (iii) if applicable,
prevent the Subordinated Party from exercising remedies upon the occurrence of
an “event of default” under the applicable agreement between the Borrower and
the Subordinated Party, subject to the rights of holders of Secured Obligations
under this Section 2 or (iv) create or imply the existence of any commitment on
the part of the holders of Secured Obligations to extend credit to the Borrower.

 

(b) No right of any present or future holder of Secured Obligations to enforce
the subordination provisions of this Section 2 shall at any time in any way be
prejudiced or be impaired by any act or failure to act by the Borrower or anyone
in custody of its assets or property or by its failure to comply with this
Agreement. Without in any way limiting the generality of the foregoing, the
holders of the Secured Obligations may, at any time and from time to time,
without the consent of or notice to the Subordinated Party, without incurring
any responsibility to the Subordinated Party and without impairing, limiting or
releasing the subordination provided in this Section 2 or the obligations under
this Section 2 of the Subordinated Party to the holders of the Secured
Obligations, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Secured
Obligations or any instrument evidencing the same or any agreement under which
Secured Obligations are outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Secured
Obligations; (iii) release any Person guaranteeing or otherwise liable for
Secured Obligations; and (iv) exercise or refrain from exercising any rights
against the Borrower, any other Person or any collateral securing any Secured
Obligations.

 

    - 3 -   EXHIBIT F         TO CREDIT AGREEMENT

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2.07 Reliance by Holders of Senior Obligations on Subordination Provisions. Each
Subordinated Party by entering into the agreements or other instruments to which
it is a party or of which it is a beneficiary evidencing Subordinated
Indebtedness acknowledges and agrees that the provisions of this Section 2 are,
and are intended to be, an inducement and a consideration to each holder of any
Secured Obligations, whether such Secured Obligations were created or acquired
before or after the issuance or incurrence of the Subordinated Indebtedness, to
acquire and continue to hold, or to continue to hold, such Secured Obligations
and such holder of Secured Obligations shall be deemed conclusively to have
relied on such subordination provisions in acquiring and continuing to hold, or
in continuing to hold, such Secured Obligations. The provisions of this Section
2 may not be amended, altered or modified without the consent of the holders of
such Secured Obligations.

 

2.08 Agent to Effectuate Subordination. Each Subordinated Party hereby appoints
the Agent as its attorney-in-fact to take such actions as may be necessary to
effectuate the subordination provided for in this Section 2, including in any
proceeding referred to in Section 2.02. If a Subordinated Party does not file
any proof or claim of debt in any such proceeding within 30 days prior to the
last date for the filing of any such proof or claim of debt, then, so long as
any Secured Obligations shall be outstanding, the Agent shall be entitled, and
is hereby authorized, to file any appropriate proof or claim on behalf of the
Subordinated Party.

 

2.09 No Waiver of Provisions. No right of the Agent or any holder of any Secured
Obligations to enforce this Section 2 shall in any way be impaired by any act or
failure to act on the part of the Borrower or on the part of the Agent or any
such holder or by any noncompliance by the Borrower with the terms of any
agreement or instrument evidencing the Subordinated Indebtedness, the Credit
Agreement or any Financing Document, whether or not the Agent or any such holder
has knowledge of such noncompliance. Without limiting the generality of the
foregoing, the Agent and such holders may, without notice to or consent from the
Subordinated Party and without impairing the right of the Agent or any such
holder to enforce this Section 2, do any of the following:

 

(a) amend, modify, supplement, renew, replace, or extend the terms of all or any
part of the Secured Obligations or the Credit Agreement or any other Financing
Document in any respect whatsoever;

 

(b) sell or otherwise transfer, release, realize upon or enforce or otherwise
deal with, all or any part of the Secured Obligations or the Credit Agreement or
any other Financing Document or any collateral securing or guaranty supporting
all or any part of the Secured Obligations;

 

(c) settle or compromise all or any part of the Secured Obligations or any other
liability of the Borrower to the Agent or any such holder and apply any sums
received to the Secured Obligations or any such liability in such manner and
order as the Agent or any such holder may determine; and

 

    - 4 -   EXHIBIT F         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(d) fail to take or to perfect, for any reason or for no reason, any Lien
securing all or any part of the Secured Obligations, exercise or delay in or
refrain from exercising any remedy against the Borrower or any security or
guarantor for all or any part of the Secured Obligations, or make any election
of remedies or otherwise deal freely with respect to all or any part of the
Secured Obligations or any security or guaranty for all or any part of the
Secured Obligations.

 

    - 5 -   EXHIBIT F         TO CREDIT AGREEMENT

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EXHIBIT G

to Credit Agreement

 

FORM OF CONSTRUCTION REPORT

 

PART A – FORM OF REPORT – OUTLINE OF CONTENTS

 

1.0 Executive Summary

 

  •   Highlights for the Month

 

  •   Activities Planned for next Month

 

  •   Concerns

 

2.0 HSE Highlights

 

  •   Accomplishments

 

  •   Statistics

 

  •   Health/Safety

 

  •   Environmental

 

  •   Issues

 

  •   Activities planned for next month

 

3.0 Focus Areas

 

4.0 Schedule Status

 

  •   Planned versus Actual (CPM)

 

  •   Schedule Highlights

 

  •   Schedule Analysis

 

5.0 Engineering Highlights

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

6.0 Subcontracts and Procurement Highlights

 

  •   Subcontracts

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

  •   Procurement

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

     - 1 -    EXHIBIT G           TO CREDIT AGREEMENT

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7.0 Construction Highlights

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

8.0 Permitting and Environmental Highlights

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

9.0 Quality Assurance Highlights

 

  •   Accomplishments

 

  •   Issues

 

  •   Activities planned for next Month

 

10.0 Cost Status

 

  •   Status of Contract Price

 

  •   Original Contract Price

 

  •   Change Orders

 

  •   Current Approved Contract Price

 

Attachments

 

  •   Progress Photos

 

  •   Progress Status and Curves

 

  •   Trend List

 

  •   Payment Status

 

  •   Payment Milestones

 

  •   Drawing Status

 

  •   Purchase Order Status

 

  •   90 Day Schedule

 

     - 2 -    EXHIBIT G           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

PART B – SAMPLE CONSTRUCTION REPORT

 

See attached

 

     - 3 -    EXHIBIT G           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

[SAMPLE REPORT TO BE PROVIDED]

 

     - 4 -    EXHIBIT G           TO CREDIT AGREEMENT

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EXHIBIT H

to Credit Agreement

 

[Form of Assignment and Acceptance]

 

This ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of [                    ],
(this “Assignment Agreement”) is hereby entered into between
[                    ] (the “Assignor”) and [                    ] (the
“Assignee”).

 

Reference is made to that certain Credit Agreement dated as of February 25, 2005
(as amended, modified and supplemented and in effect from time to time, the
“Credit Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership
(the “Borrower”), each of the lenders from time to time party to the Credit
Agreement (the “Lenders”), SOCIÉTÉ GÉNÉRALE, as administrative agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Agent”) and HSBC BANK USA, NATIONAL ASSOCIATION, as collateral agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Collateral Agent”). All capitalized terms used but not defined herein have the
meanings assigned to such terms in the Credit Agreement.

 

The Assignor named below hereby sells and assigns, without recourse, to the
Assignee named below, and the Assignee hereby purchases and assumes, without
recourse, from the Assignor, effective as of the Assignment Date set forth
below, the interests set forth below (the “Assigned Interest”) in the Assignor’s
rights and obligations under the Credit Agreement, including the interests set
forth below in the Commitment of the Assignor on the Assignment Date and Loans
owing to the Assignor which are outstanding on the Assignment Date, together
with unpaid interest accrued on the assigned Loans to the Assignment Date held
by the Assignor on the Assignment Date, and the amount, if any, set forth below
of the fees accrued to the Assignment Date for account of the Assignor. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (a) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (b) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.

 

This Assignment and Acceptance is being delivered to the Administrative Agent
together with (a) if the Assignee is a Foreign Lender, any documentation
required to be delivered by the Assignee pursuant to Section 5.04 of the Credit
Agreement, duly completed and executed by the Assignee, and (b) if the Assignee
is not already a Lender under the Credit Agreement, additional information
reasonably required by the Administrative Agent, duly completed by the Assignee.
The Assignor shall pay the fee payable to the Administrative Agent pursuant to
Section 11.06 of the Credit Agreement.

 

This Assignment and Acceptance shall be governed by and construed in accordance
with the laws of the State of New York.

 

     - 1 -    EXHIBIT H           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

[Lender]

 

Date of Assignment:

 

Legal Name of Assignor:

 

Legal Name of Assignee:

 

Assignee’s Address for Notices:

 

Effective Date of Assignment (“Assignment Date”):

 

     Principal Amount
Assigned

--------------------------------------------------------------------------------

   Percentage Assigned of
Commitment/Loans (set forth, to
at least 8 decimals, as a
percentage of the aggregate
Commitments of all Lenders
thereunder)

--------------------------------------------------------------------------------

Commitment Assigned:

   $      %

Loans:

           

 

Fees Assigned (if any):

 

     - 2 -    EXHIBIT H           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

The terms set forth above are hereby agreed to:

 

[NAME OF ASSIGNOR],

    as Assignor

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

[NAME OF ASSIGNEE],

    as Assignee

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

The undersigned hereby consent to the within assignment:4

 

SABINE PASS LNG, L.P.

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

SOCIÉTÉ GÉNÉRALE

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

--------------------------------------------------------------------------------

4 Consents to be included to the extent required by Section 11.06(b) of the
Credit Agreement.

 

     - 3 -    EXHIBIT H           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT I

to Credit Agreement

 

FORM OF CONFIDENTIALITY AGREEMENT

 

[Date]

 

[Name of Prospective Participant or Assignee]

[address]

 

Re:    [SABINE PASS LNG PROJECT]

 

Ladies and Gentlemen:

 

Reference is made to that certain Credit Agreement, dated as of February 25,
2005 (as amended, modified and supplemented and in effect from time to time, the
“Credit Agreement”) among SABINE PASS LNG, L.P., a Delaware limited partnership
(the “Borrower”), each of the lenders party to the Credit Agreement from time to
time (individually, a “Lender” and collectively, the “Lenders”), SOCIÉTÉ
GÉNÉRALE, as agent for the Lenders (in such capacity, together with its
successors in such capacity, the “Agent”) and HSBC BANK USA, NATIONAL
ASSOCIATION, as collateral agent for the secured parties specified therein.
Capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Credit Agreement.

 

As a Lender party to the Credit Agreement, the undersigned (“we” or “us”) have
agreed with the Borrower pursuant to Section 11.08(b) of the Credit Agreement to
keep confidential, in accordance with our customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to the Lenders by the
Borrower that is identified by the Borrower as being confidential at the time
the same is provided to us\, other than information provided by the Borrower
before the Closing Date and information provided by the EPC Contractor pursuant
to Section 9.3 of the EPC Contract, all of which shall be treated as
confidential (“Confidential Information”).

 

As provided in Section 11.08(b) of the Credit Agreement, we are permitted to
provide you, as a prospective Participant or assignee, with Confidential
Information subject to your agreement to maintain the confidentiality of such
Confidential Information as provided pursuant to Section 11.08(b) of the Credit
Agreement. To comply with the terms of Section 11.08(b), Confidential
Information will not be made available to you until your execution and delivery
to us of this Confidentiality Agreement.

 

Accordingly, in consideration of the foregoing, you agree (on behalf of yourself
and each of your subsidiaries, affiliates, directors, officers, employees,
attorneys, advisors and representatives) that (a) Confidential Information will
not be used by you except in connection with the proposed participation or
assignment mentioned above and (b) you shall diligently use precautions, in
accordance with your customary procedures for handling confidential information
and in accordance with safe and sound banking practices to keep Confidential
Information confidential; provided, that nothing herein shall limit the
disclosure of any Confidential

 

     - 1 -    EXHIBIT I           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Information: (i) to the extent required by any Government Rule or judicial
process, (ii) to your counsel or to counsel for the Agent, or any of the
Lenders, or the Collateral Agent (to the extent not otherwise subject to this
Confidentiality Agreement or to Section 11.08(b) of the Credit Agreement), (iii)
to auditors or accountants in connection with financial or regulatory auditing
or reporting functions, (iv) after notice to the Borrower (to the extent such
prior notice is legally permitted), in connection with any litigation to which
you or the Agent or any one or more of the Lenders are a party and pursuant to
which any such Person has been compelled or required to disclose such
information in the reasonable opinion of counsel to such Person, (v) to a
subsidiary or affiliate of yours, but subject to Section 11.08(b) of the Credit
Agreement, provided, that such subsidiary or affiliate shall be informed by you
of the confidential nature of such information and shall be directed by you to
treat such information in accordance with the terms of this Confidentiality
Agreement (vi) to the Independent Engineer, the Insurance Advisor or to other
experts engaged by the Agent, any Lender or the Collateral Agent in connection
with the Credit Agreement and the transactions contemplated thereby (provided,
that such other expert first executes and delivers to you a Confidentiality
Agreement substantially in the form hereof), (vii) to the extent that such
Confidential Information is required to be disclosed to a Government Authority
in connection with a tax audit or dispute, (viii) in connection with any Default
and any enforcement or collection proceedings resulting therefrom or in
connection with the negotiation of any restructuring or “work-out” (whether or
not consummated) of the obligations of the Borrower under the Credit Agreement
or the obligations of any Project Party under any other Project Document or to
the extent in the public domain (except for any Confidential Information in the
public domain as a result of this Confidentiality Agreement or Section 11.08 of
the Credit Agreement), or (ix) to the extent to which the Borrower gives its
prior written consent to the making of such disclosure. You agree that you will
notify the Agent as soon as practical in the event of any such disclosure (other
than as a result of an examination by any regulatory agency), unless such
notification shall be prohibited by applicable law or legal process.

 

In the event you do not become a Participant or Lender under the Credit
Agreement, you shall be obligated to return or destroy any materials furnished
to you (or furnished to you by any disclosee, as permitted by the paragraph
immediately above) pursuant to this Confidentiality Agreement, without retaining
any copies thereof unless prohibited from doing so by your internal policies and
procedures.

 

You shall have no obligation hereunder with respect to any Confidential
Information to the extent that such information (i) is or becomes generally
available to the public other than as a result of a disclosure by you, one of
your affiliates, or your respective representatives and agents, in violation of
this Confidentiality Agreement, (ii) was within your possession prior to its
being furnished to you pursuant hereto, provided that the source of such
information was not known by you to be bound by a confidentiality agreement with
or other contractual, legal or fiduciary obligation of confidentiality to the
Borrower, its affiliates or any other party with respect to such information or
(iii) is or becomes available to you on a non-confidential basis from a source
other than the Borrower, its affiliates and their respective representatives and
agents, provided that such source is not known by you to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Borrower, its affiliates or any other party
with respect to such information.

 

     - 2 -    EXHIBIT I           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Subject to the last sentence of this paragraph, [                    ] agrees to
indemnify us for any and all liabilities and breaches of this Confidentiality
Agreement. The Borrower is the intended beneficiary of this Confidentiality
Agreement. [                    ] agrees that money damages would not be a
sufficient remedy for any breaches under this Confidentiality Agreement by it or
its representatives or agents and the Agent shall be entitled to specific
performance and injunctive relief, without proof of actual damages, as remedies
for any such breach. Such remedies shall not be deemed to be the exclusive
remedies under this Confidentiality Agreement, but shall be in addition to all
other remedies available at law or in equity to the Agent. Neither the Agent nor
we shall be liable to you for any special, consequential or punitive damages in
respect of any claim for breach of contract or any other theory or liability
arising out of or relating to, or any act, omission or event occurring in
connection with this Confidentiality Agreement, and you hereby waive, release
and agree not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in your favor.

 

This Confidentiality Agreement contains the sole and entire agreement between
you and us with respect to Confidential Information. If any portion of this
Confidentiality Agreement is for any reason held to be invalid or illegal or
unenforceable by any court of competent jurisdiction, such portion will be
deemed to be separate, distinct and independent and the remainder of this
Confidentiality Agreement will be and remain in full force an effect and will
not be invalidated or rendered invalid or illegal or unenforceable or otherwise
affected by such holding or adjudication.

 

This Confidentiality Agreement may be executed in multiple counterparts, each of
which shall constitute an original, but all of which when taken together shall
constitute one and the same agreement.

 

This Confidentiality Agreement may be amended, modified or waived only by a
separate written instrument executed by you and us.

 

This Confidentiality Agreement shall terminate on the date occurring three years
from the date hereof unless and until you become a Participant or Lender under
the Credit Agreement, in which case the terms of the Credit Agreement shall
immediately supersede the terms of this Confidentiality Agreement.

 

This Confidentiality Agreement may be governed by and construed in accordance
with the laws of the State of New York.

 

     - 3 -    EXHIBIT I           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Please indicate your agreement to the foregoing by signing at the place provided
below the enclosed copy of this Confidentiality Agreement.

 

Very truly yours,

[NAME OF LENDER],

      as Lender under the Credit Agreement referred

      to above

By:  

 

--------------------------------------------------------------------------------

Name:     Title:     By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

The foregoing is agreed to

      as of the date of this letter:

[Name of prospective Participant or assignee]

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

     - 4 -    EXHIBIT I           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT J

to Credit Agreement

 

FORM OF SECURITY AGREEMENT

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT, dated as of February 25, 2005 (this “Agreement”), is
made among SABINE PASS LNG, L.P., a Delaware limited partnership (the
“Borrower”), SOCIÉTÉ GÉNÉRALE as administrative agent (the “Agent”) and HSBC
BANK USA, NATIONAL ASSOCIATION as collateral agent (the “Collateral Agent”) on
behalf of and for the benefit of the Secured Parties.

 

RECITALS

 

A. Pursuant to the Credit Agreement, dated as of February 25, 2005 (the “Credit
Agreement”), among the Borrower, each of the lenders that is or may from time to
time become a party thereto (collectively, the “Lenders”), SOCIÉTÉ GÉNÉRALE, in
its capacities as a Lender and as Agent for the Lenders (in such capacity, the
“Agent”), and HSBC BANK USA, NATIONAL ASSOCIATION, as Collateral Agent, the
Lenders have agreed to make certain Loans to the Borrower, on the terms and
subject to the conditions of the Credit Agreement. In addition, the Borrower
may, from time to time, be obligated to various of said Lenders (or their
Affiliates) in respect of Permitted Swap Agreements (as defined in the Credit
Agreement).

 

B. It is a requirement under the Credit Agreement and a condition precedent to
the making of the Loans that the Borrower shall have executed and delivered this
Agreement.

 

C. To induce the Lenders to enter into, and extend credit under, the Credit
Agreement and the Permitted Swap Agreements, the Borrower has agreed to pledge
and grant a security interest in the Collateral to the Collateral Agent as
collateral security for the Secured Obligations.

 

NOW THEREFORE, in consideration of the promises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

ARTICLE XVIII

 

DEFINITIONS AND INTERPRETATION

 

18.01 Certain Defined Terms.

 

(a) Unless otherwise defined herein, all capitalized terms used in this
Agreement that are defined in the Credit Agreement (including those terms
incorporated by reference) shall have the respective meanings assigned to them
in the Credit Agreement.

 

(b) The terms “Accounts”, “Chattel Paper”, “Commercial Tort Claims”, “Deposit
Account”, “Document”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”,
“General

 

    - 1 -   EXHIBIT J         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Intangibles”, “Goods”, “Instrument”, “Inventory”, “Investment Property”, “Letter
of Credit”, “Letter-of-Credit Rights”, “Payment Intangible”, “Proceeds”,
“Record” and “Software” shall have the respective meanings ascribed thereto in
Article 9 of the Uniform Commercial Code. In addition to the terms defined in
the preamble, recitals and the first sentence of this Section 1.01(b), the
following terms shall have the following respective meanings:

 

“Assigned Agreement” shall have the meaning assigned to that term in Section
2.01.

 

“Collateral” shall have the meaning assigned to that term in Section 2.01.

 

“Copyrights” shall mean, collectively, (a) all copyrights, copyright
registrations and applications for copyright registrations, (b) all renewals and
extensions of all copyrights, copyright registrations and applications for
copyright registration and (c) all rights, now existing or hereafter coming into
existence: (i) to all income, royalties, damages and other payments (including
in respect of all past, present or future infringements) now or hereafter due or
payable under or with respect to any of the foregoing, (ii) to sue for all past,
present and future infringements with respect to any of the foregoing and (iii)
otherwise accruing under or pertaining to any of the foregoing throughout the
world.

 

“Intellectual Property” shall mean all Copyrights, all Patents and all
Trademarks, together with (a) all inventions, processes, production methods,
proprietary information, know-how and trade secrets, (b) all licenses or user or
other agreements granted to the Borrower with respect to any of the foregoing,
in each case whether now or hereafter owned or used, (c) all information,
customer lists, identification of suppliers, data, plans, blueprints,
specifications, designs, drawings, recorded knowledge, surveys, engineering
reports, test reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery software and
programs, (d) all field repair data, sales data and other information relating
to sales or service of products now or hereafter manufactured, (e) all
accounting information and all media in which or on which any information or
knowledge or data or records may be recorded or stored and all computer programs
used for the compilation or printout of such information, knowledge, records or
data, (f) all licenses, consents, permits, variances, certifications and
approvals of governmental agencies now or hereafter held by the Borrower, in
each case, to the extent assignable and (g) all causes of action, claims and
warranties now owned or hereafter acquired by the Borrower in respect of any of
the foregoing.

 

“Motor Vehicles” means motor vehicles, tractors, trailers and other like
property, whether or not the title thereto is governed by a certificate of title
or ownership.

 

“Patents” shall mean, collectively, (a) all patents and patent applications, (b)
all reissues, divisions, continuations, renewals, extensions and
continuations-in-part of all patents or patent applications and (c) all rights,
now existing or hereafter coming into existence: (i) to all income, royalties,
damages, and other payments (including in respect of all past, present and
future infringements) now or hereafter due or payable under or with respect to
any of the foregoing, (ii) to sue for all past, present and future infringements
with respect to any of the foregoing and (iii) otherwise accruing under or
pertaining to any of the foregoing throughout the world, including all
inventions and improvements described or discussed in all such patents and
patent applications.

 

    - 2 -   EXHIBIT J         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

“Trademarks” shall mean, collectively, (a) all trade names, trademarks and
service marks, logos, trademark and service mark registrations and applications
for trademark and service mark registrations, (b) all renewals and extensions of
any of the foregoing and (c) all rights, now existing or hereafter coming into
existence: (i) to all income, royalties, damages and other payments (including
in respect of all past, present and future infringements) now or hereafter due
or payable under or with respect to any of the foregoing, (ii) to sue for all
past, present and future infringements with respect to any of the foregoing and
(iii) otherwise accruing under or pertaining to any of the foregoing throughout
the world, together, in each case, with the product lines and goodwill of the
business connected with the use of, or otherwise symbolized by, each such trade
name, trademark and service mark. Notwithstanding the foregoing, “Trademark”
does not and shall not include any Trademark that would be rendered invalid,
abandoned, void or unenforceable by reason of its being included as a Trademark
for the purposes of this Agreement.

 

“Uniform Commercial Code” or “UCC” shall mean the Uniform Commercial Code as in
effect in the State of New York from time to time; provided, that if by reason
of mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of any security interests hereunder in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than New
York, “UCC” shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for the purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

 

18.02 Interpretation. The principles of construction and interpretation set
forth in Sections 1.02 and 1.03 of the Credit Agreement shall apply to, and are
hereby incorporated by reference in, this Agreement.

 

ARTICLE XIX

 

THE COLLATERAL

 

19.01 Grant. As collateral security for the prompt payment in full when due
(whether at stated maturity, upon acceleration, on any optional or mandatory
prepayment date or otherwise) and performance of the Secured Obligations, the
Borrower hereby pledges and grants to the Collateral Agent, for the benefit of
the Secured Parties, a security interest in all of its right, title and interest
in and to the following property, assets and revenues, whether now owned or in
the future acquired by it and whether now existing or in the future coming into
existence and wherever located (collectively, the “Collateral”):

 

(a) the Collateral Accounts and all amendments, extensions, renewals, and
replacements thereof whether under the same or different account number,
together with all funds, cash, monies, credit balances, financial assets,
investments, Instruments, certificates of deposit, promissory notes, and any
other property (including any Permitted Investments) at any time on deposit
therein or credited to any of the foregoing, all rights to payment or withdrawal
therefrom, and all proceeds, accounts receivable arising in the ordinary course,
products, accessions, profits, gains, and interest thereon of or in respect of
any of the foregoing;

 

    - 3 -   EXHIBIT J         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(b) the agreements, contracts and documents listed in Annex A (including all
exhibits and schedules thereto) and each additional Project Document to which
the Borrower is or may from time to time be a party or of which it is or may
from time to time be a beneficiary, whether executed by the Borrower or by an
agent on behalf of the Borrower, as each such agreement, contract and document
may be amended, supplemented or modified and in effect from time to time (such
agreements, contracts and documents, being individually, an “Assigned
Agreement”, and collectively, the “Assigned Agreements”) including all rights of
the Borrower (i) to receive moneys thereunder, whether or not earned by
performance or for property that has been or is to be sold, leased, licensed,
assigned or otherwise disposed of pursuant thereto, (ii) to receive proceeds of
any performance or payment bond, liability or business interruption insurance,
indemnity, warranty, guaranty or letters of credit with respect thereto, (iii)
to all claims of the Borrower for damages arising out of, for breach of or
default thereunder by any party other than the Borrower and (iv) to take any
action to terminate, amend, supplement, modify or waive performance thereof, to
perform thereunder and to compel performance and otherwise exercise all remedies
thereunder;

 

(c) all Accounts, Deposit Accounts, Instruments, Documents, Chattel Paper
(including Electronic Chattel Paper), Letters of Credit and Letter-of-Credit
Rights, Inventory, Equipment, Fixtures (including, without limitation, those
located on or forming part of the Site), Investment Property, Payment
Intangibles, Software and, to the extent not already covered by the other
enumerated categories of Collateral described in this clause (c), all Goods and
General Intangibles; including, without limitation, all LNG and Gas owned by the
Borrower and the Project to be constructed on or near the Site pursuant to the
plans and specifications set forth in the EPC Contract, all other machinery,
apparatus, installation facilities, including all goods of the Borrower that are
spare parts and related supplies, and all goods obtained by the Borrower in
exchange for any such goods, all substances, if any, commingled with or added to
such goods, all upgrades and other improvements to such goods and all other
tangible personal property owned by the Borrower or in which the Borrower has
rights, and all fixtures and all parts thereof and accessions thereto;

 

(d) all Investment Property and “Financial Assets” and “Securities Account”
(each as defined in the UCC);

 

(e) all Commercial Tort Claims;

 

(f) all Government Approvals now or hereafter held in the name, or for the
benefit, of the Borrower or of the Project; provided, that any Government
Approval that by its terms (other than to the extent any such term would be
rendered ineffective pursuant to Section 9-406, 9-407, 9-408 or 9-409 of the
UCC) or by operation of law would be breached or become void, voidable,
terminable or revocable if mortgaged, pledged or assigned hereunder or if a
security interest therein was granted hereunder, are, in each case, expressly
excepted from the Collateral to the extent necessary so as to avoid such
voidness, avoidability, terminability or revocability;

 

    - 4 -   EXHIBIT J         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(g) all Records of the Borrower directly related to, or necessary for the use
of, the foregoing Collateral included in clauses (a) - (e);

 

(h) all Intellectual Property; and

 

(i) all other tangible and intangible personal Property whatsoever of the
Borrower and all cash, products, offspring, rents, revenues, issues, profits,
royalties, income, benefits, accessions, Equity Contribution Amounts, additions,
substitutions and replacements of and to any and all of the foregoing, including
all Proceeds of and to any of the Property the Borrower described in the
preceding paragraphs of this Section 2.01 (including, without limitation, any
Loss Proceeds or other Proceeds of insurance thereon (whether or not the
Collateral Agent is loss payee thereof), and any indemnity, warranty or
guarantee, payable by any reason of loss or damage to or otherwise with respect
to any of the foregoing, and all causes of action, claims and warranties now or
hereafter held by the Borrower in respect of any of the items listed above).

 

19.02 Perfection. Concurrently with the execution and delivery of this
Agreement, the Borrower shall (a) file such financing statements and other
documents in such offices as shall be necessary or as the Collateral Agent may
reasonably request to perfect and establish the priority of the Liens granted by
this Agreement, (b) subject to Section 2.05, deliver and pledge to the
Collateral Agent any and all Instruments comprising any part of the Collateral,
endorsed or accompanied by such instruments of assignment and transfer in such
form and substance as the Collateral Agent may request and (c) take all such
other actions as shall be necessary or as the Collateral Agent may reasonably
request to perfect and establish the priority of the Liens granted by this
Agreement.

 

19.03 Preservation and Protection of Security Interests. The Borrower shall:

 

(a) subject to Section 2.05, upon the acquisition after the date hereof by the
Borrower of any Instruments comprising any part of the Collateral, promptly
deliver and pledge to the Collateral Agent all such Instruments, endorsed or
accompanied by such instruments of assignment and transfer in such form and
substance as the Collateral Agent may reasonably request;

 

(b) give, execute, deliver, file or record any and all financing statements,
notices, contracts, agreements or other instruments, obtain any and all
Government Approvals and take any and all steps that may be necessary or as the
Collateral Agent may reasonably request to create, perfect, establish the
priority of, or to preserve the validity, perfection or priority of, the Liens
granted by this Agreement or to enable the Collateral Agent to exercise and
enforce its rights, remedies, powers and privileges under this Agreement with
respect to such Liens;

 

(c) maintain, hold and preserve full and accurate Records concerning the
Collateral, and stamp or otherwise mark such Records in such manner as may
reasonably be required in order to reflect the Liens granted by this Agreement;
and

 

    - 5 -   EXHIBIT J         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(d) at any time upon request of the Collateral Agent, cause the Collateral Agent
to be listed as the lienholder on any certificate of title or ownership covering
any Motor Vehicle (other than Motor Vehicles constituting Inventory) and within
120 days of such request deliver evidence of the same to the Agent.

 

19.04 Attorney-in-Fact. Subject to the rights of the Borrower under Sections
2.05 and 2.06, the Borrower hereby appoints the Collateral Agent as its
attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and, following the occurrence and during the continuation of an Event
of Default, taking any action and executing any instruments which the Collateral
Agent may deem necessary or reasonably advisable to accomplish the purposes of
this Agreement, to preserve the validity, perfection and priority of the Liens
granted by this Agreement and to exercise its rights, remedies, powers and
privileges under Article VI of this Agreement. This appointment as
attorney-in-fact is irrevocable and coupled with an interest. Without limiting
the generality of the foregoing, the Collateral Agent shall be entitled under
this Agreement, following the occurrence and during the continuation of an Event
of Default (a) to ask, demand, collect, sue for, recover, receive and give
receipt and discharge for amounts due and to become due under and in respect of
all or any part of the Collateral, (b) to receive, endorse and collect any
Instruments or other drafts, documents and Chattel Paper in connection with
clause (a) above (including any draft or check representing the proceeds of
insurance or the return of unearned premiums), (c) to file any claims or take
any action or proceeding that the Collateral Agent may deem necessary or
reasonably advisable for the collection of all or any part of the Collateral,
including the collection of any compensation due and to become due under any
contract or agreement with respect to all or any part of the Collateral and (d)
to execute, in connection with any sale or disposition of the Collateral under
Article VI, any endorsements, assignments, bills of sale or other instruments of
conveyance or transfer with respect to all or any part of the Collateral.

 

19.05 Instruments. So long as no Event of Default shall have occurred and be
continuing, the Borrower may retain for collection in the ordinary course of
business any Instruments comprising any part of the Collateral obtained by it in
the ordinary course of business, and the Collateral Agent shall, promptly upon
the request, and at the expense, of the Borrower make appropriate arrangements
for making any Instruments pledged by the Borrower available to the Borrower for
purposes of presentation, collection or renewal. Any such arrangement shall be
effected, to the extent deemed appropriate by the Collateral Agent, against
trust receipt or like document. Proceeds of Instruments shall be applied by the
Borrower in accordance with the terms and provisions of the Collateral Agency
Agreement.

 

19.06 Use of Collateral. So long as no Event of Default shall have occurred and
be continuing, the Borrower shall, in addition to its rights under Section 2.05
in respect of the Collateral, be entitled, subject to the rights, remedies,
powers and privileges of the Collateral Agent under Articles III and VI, to use
and possess the Collateral and to exercise its rights, title and interests
therein in any lawful manner not prohibited by this Security Agreement, the
Credit Agreement, or the other Financing Documents.

 

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19.07 Rights and Obligations.

 

(a) The Borrower shall remain liable to perform its duties and obligations under
the contracts and agreements included in the Collateral in accordance with their
respective terms to the same extent as if this Agreement had not been executed
and delivered. The exercise by the Collateral Agent or any Lender of any right,
remedy, power or privilege in respect of this Agreement shall not release the
Borrower from any of its duties and obligations under such contracts and
agreements. Neither the Collateral Agent nor any Lender shall have a duty,
obligation or liability under such contracts and agreements or in respect to any
Government Approval included in the Collateral by reason of this Agreement or
any other Financing Document, nor shall the Collateral Agent or any Lender be
obligated to perform any of the duties or obligations of the Borrower under any
such contract or agreement or any such Government Approval or to take any action
to collect or enforce any claim (for payment) under any such contract or
agreement or Government Approval.

 

(b) No Lien granted by this Agreement in the Borrower’s right, title and
interest in any contract, agreement or Government Approval shall be deemed to be
a consent by the Collateral Agent or any Lender to any such contract, agreement
or Government Approval.

 

(c) No reference in this Agreement to proceeds or to the sale or other
disposition of Collateral shall authorize the Borrower to sell or otherwise
dispose of any Collateral except to the extent otherwise expressly permitted by
the terms of any Financing Document.

 

(d) Neither the Collateral Agent nor any Lender shall be required to take steps
necessary to preserve any rights against prior parties to any part of the
Collateral.

 

19.08 Continuing Security Interest; Termination. This Agreement shall create a
continuing assignment of and security interest in the Collateral and shall (a)
remain in full force and effect until the Termination Date, (b) be binding upon
the Borrower, its successors and assigns and (c) inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent and the other Secured Parties and their respective successors, transferees
and assigns. Upon the occurrence of the Termination Date, this Agreement and
each provision hereof (including any provision providing for the appointment of
the Collateral Agent as attorney-in-fact for the Borrower) shall terminate, and
upon receipt of written notice from the Agent that the Termination Date has
occurred, the Collateral Agent shall forthwith cause to be assigned, transferred
and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect of the Collateral, to or on the order of the Borrower. The Collateral
Agent shall also execute and deliver to the Borrower, at the Borrower’s expense,
upon receipt of written notice from the Agent of such Termination Date, such
Uniform Commercial Code termination statements and such other documentation as
shall be reasonably requested by the Borrower to effect the termination and
release of the Liens granted by this Agreement.

 

19.09 Partial Release. Any distributions, payments or other releases from the
Collateral Accounts (whether in the form of cash, Instruments or otherwise)
properly made to or on behalf of the Borrower in accordance with the terms and
conditions of the Collateral Agency

 

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Agreement and the other Financing Documents, including Restricted Payments, and
any property comprising part of the Collateral sold or otherwise disposed of as
permitted by, and in accordance with, Section 8.11(a) of the Credit Agreement
shall, in each case, be released from the Liens granted hereunder and shall no
longer be part of the Collateral. With respect to any property disposed of in
accordance with Section 8.11(a) of the Credit Agreement, upon written
confirmation from the Agent, which confirmation shall not be unreasonably
withheld or delayed, the Collateral Agent shall execute such documents as the
Borrower may reasonably request evidencing the release of the Lien created by
any of the Financing Documents upon such property.

 

19.10 Intellectual Property. For the purpose of enabling the Collateral Agent to
exercise its rights, remedies, powers and privileges under Article VI at that
time or times as the Collateral Agent is lawfully entitled to exercise those
rights, remedies, powers and privileges, and for no other purpose, the Borrower
hereby grants to the Collateral Agent, to the extent assignable, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
compensation to the Borrower) to use, assign, license or sublicense any
Intellectual Property of the Borrower which is directly related to, or necessary
and incidental to the use of, any of the Collateral, together with reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer programs used for the compilation or printout of those
items.

 

ARTICLE XX

 

COLLATERAL ACCOUNTS

 

The Borrower agrees and confirms that (a) pursuant to the Collateral Agency
Agreement, it has caused to be established at the Collateral Agent each of the
Construction Account, Construction Payment Subaccount, Punchlist Retention
Subaccount, the Operating Account, the Debt Service Reserve Account, the Debt
Service Accrual Account, the Insurance Proceeds Account, the Income Tax Reserve
Account, the Distribution Account and the Revenue Account, in each case in the
name of the Collateral Agent and (b) it has instructed (or, on or before the
effectiveness of each Project Document that is entered into after the date
hereof, will instruct) each of the other parties to the Project Documents that
all payments constituting Project Revenues due or to become due to the Borrower
under or in connection with each such Project Document shall be made directly to
the Collateral Agent for deposit to the Revenue Account in accordance with the
terms of the Collateral Agency Agreement. If, notwithstanding the foregoing, any
such payment or proceeds are remitted directly to the Borrower, the Borrower
shall hold such funds in trust for the Collateral Agent and shall promptly remit
such payments for deposit to the Revenue Account in accordance with the
Collateral Agency Agreement. In addition to the foregoing, the Borrower agrees
that if the proceeds of any Collateral hereunder (including the payments made in
respect of the Collateral Accounts) shall be received by it, the Borrower shall
as promptly as possible transfer such Proceeds to the Collateral Agent for
deposit to the Reserve Account. Until so deposited, all such proceeds shall be
held in trust by the Borrower for and as the property of the Collateral Agent
and shall not be commingled with any other funds or property of the Borrower.

 

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ARTICLE XXI

 

REPRESENTATIONS AND WARRANTIES

 

As of and on the date hereof, and as of and on the date of each extension of
credit by the Lenders pursuant to the Credit Agreement, the Borrower represents
and warrants to the Collateral Agent for the benefit of the Secured Parties as
follows:

 

21.01 Title. The Borrower is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Section 2, and such
Collateral is free and clear of all Liens, except for Permitted Liens.

 

21.02 No Other Financing Statements. The Borrower has not executed and is not
aware of any currently effective financing statement or other instrument similar
in effect that is on file in any recording office covering all or any part of
the Borrower’s interest in the Collateral, except such as may have been filed
pursuant to this Agreement and the other Financing Documents evidencing
Permitted Liens, and so long as any portion of the Commitments have not been
terminated or any of the Secured Obligations remain unpaid, the Borrower will
not execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration under the law of
any jurisdiction) or statements relating to the Collateral, except for (i)
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by the Borrower, (ii) financing statements
filed or to be filed in respect of Permitted Liens or (iii) precautionary
financing statements filed or to be filed in respect of operating leases of
equipment entered into by the Borrower. The Borrower has not assigned any of its
rights under the Instruments referred to in Section 2.01(c) except as expressly
permitted under the Financing Documents. The Borrower has not consented to, and
is not otherwise aware of, any Person, other than the Collateral Agent and
Securities Intermediary, having either control (within the meaning of common law
applicable to this Agreement), sole dominion, or “control” (within the meaning
of the Uniform Commercial Code) over any interest in any Collateral Accounts or
any funds or other property deposited therein.

 

21.03 Perfection Representations.

 

(a) The name of the Borrower shown on the signature pages to this Agreement is
the exact legal name of the Borrower. The Borrower’s “location” (within the
meaning of the Uniform Commercial Code) is Delaware. The offices where the
Borrower keeps Records concerning the Collateral and a set of the original
counterparts of the Assigned Agreements are located at the addresses specified
for the Borrower in Section 10.02, or such other location as specified in the
most recent notice delivered pursuant to Section 5.01.

 

(b) The Borrower has not (1) within the period of four months prior to the date
hereof, changed its “location” (within the meaning of the UCC), (2) changed its
name, or (3) heretofore become a “new debtor” (within the meaning of the UCC)
with respect to a currently effective security agreement previously entered into
by any other Person.

 

21.04 Other Perfection Matters. Upon the filing of financing statements or other
appropriate instruments pursuant to the Uniform Commercial Code in the offices
set forth on

 

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Schedule 4.04 attached hereto, the Collateral Agent’s Liens in the Collateral
granted hereunder shall be valid, continuing (subject to any requirement of the
Uniform Commercial Code with respect to the filing of continuation statements),
and perfected to the extent any such Lien may be perfected by the filing of a
financing statement or other appropriate instrument. Upon the execution and
delivery of the Collateral Agency Agreement and the establishment of the
Collateral Accounts, the Collateral Agent’s Liens in the Collateral Accounts and
in any funds or other property from time to time deposited therein shall be
valid, continuing, and perfected to the extent any such Lien may be perfected by
“control” (within the meaning of the Uniform Commercial Code). All other action
necessary or reasonably requested by the Collateral Agent to protect and perfect
the Liens in the Collateral has been duly taken with respect to any Collateral
that the Borrower now owns or in which the Borrower now has a right. The Liens
granted by this Agreement in favor of the Collateral Agent for the benefit of
the Secured Parties are subject to no other Liens, except Permitted Liens.

 

21.05 Fair Labor Standards Act. Any goods now or hereafter produced by the
Borrower or any of its Subsidiaries included in the Collateral have been and
will be produced in compliance with the requirements of the Fair Labor Standards
Act, as amended.

 

ARTICLE XXII

 

COVENANTS

 

22.01 Books and Records. The Borrower shall (a) stamp or otherwise mark the
Records in its possession that relate to the Collateral in such manner as the
Collateral Agent may reasonably require in order to reflect the Liens granted by
this Agreement and (b) give the Collateral Agent at least thirty (30) calendar
days’ notice before it changes the office where the Borrower keeps the Records.

 

22.02 Legal Status. The Borrower shall not change its type of organization or
jurisdiction of organization without the Collateral Agent’s prior written
consent, not to be unreasonably withheld. The Borrower shall not change the name
under which it does business from the name shown on the signature pages to this
Agreement without giving the Collateral Agent thirty (30) days’ prior written
notice.

 

22.03 Sales and Other Liens. The Borrower shall not (a) dispose of any
Collateral (except as expressly permitted pursuant to any of the Financing
Documents), (b) create, incur, assume or suffer to exist any Lien (other than
Permitted Liens) upon any Collateral or (c) file or suffer to be on file or
authorize to be filed, in any jurisdiction, any financing statement or like
instrument with respect to all or any part of the Collateral in which the
Collateral Agent is not named as the sole secured party for the benefit of the
Secured Parties (except for financing statements related to Permitted Liens and
precautionary financing statements filed or to be filed in respect of operating
leases of equipment entered into by the Borrower).

 

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22.04 Further Assurances.

 

(a) The Borrower agrees that, from time to time upon the written request of the
Collateral Agent, the Borrower will execute and deliver such further documents
and do such other acts and things as the Collateral Agent may reasonably request
in order fully to effect the purposes of this Agreement.

 

(b) The Borrower hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of the Borrower where permitted
by law. Copies of any such statement or amendment thereto shall be promptly
delivered to the Borrower.

 

(c) The Borrower shall pay all filing, registration and recording fees or
re-filing, re-registration and re-recording fees, and all other expenses
incident to the execution and acknowledgment of this Agreement, any agreement
supplemental hereto and any instruments of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Agreement, any agreement supplemental hereto and any
instruments of further assurance.

 

ARTICLE XXIII

 

REMEDIES

 

23.01 Events of Default, Etc. Subject to the provisions of Section 10.05 hereof,
if any Event of Default shall have occurred and be continuing:

 

(a) the Collateral Agent in its sole discretion may require the Borrower to, and
the Borrower shall, assemble the Collateral owned by it at such place or places,
reasonably convenient to both the Collateral Agent and the Borrower, designated
in the Collateral Agent’s request;

 

(b) the Collateral Agent in its sole discretion may make any reasonable
compromise or settlement it deems desirable with respect to any of the
Collateral and may extend the time of payment, arrange for payment in
installments, or otherwise modify the terms of all or any part of the
Collateral;

 

(c) the Collateral Agent in its sole discretion may, in its name or in the name
of the Borrower or otherwise, demand, sue for, collect or receive any money or
property at any time payable or receivable on account of or in exchange for all
or any part of the Collateral, but shall be under no obligation to do so;

 

(d) the Collateral Agent in its sole discretion may, upon ten (10) Business
Days’ prior written notice to the Borrower of the time and place, with respect
to all or any part of the Collateral which shall then be or shall thereafter
come into the possession, custody or control of the Collateral Agent or any
other Secured Party or any of their respective agents, sell, lease or otherwise
dispose of all or any part of such Collateral, at such place or places and at
such time or times as the Collateral Agent deems best, for cash, on credit or
for future delivery (without thereby assuming any credit risk) and at

 

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public or private sale, without demand of performance or notice of intention to
effect any such disposition of or time or place of any such sale (except such
notice as is required above or by applicable statute and cannot be waived), and
the Collateral Agent or any other Secured Party or any other Person may be the
purchaser, lessee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of
the Borrower, any such demand, notice and right or equity being hereby expressly
waived and released to the extent permitted by applicable Government Rule. The
Collateral Agent shall not be obligated to make any sale pursuant to any such
notice. The Collateral Agent may, in its sole discretion, at any such sale
restrict the prospective bidders or purchasers as to their number, nature of
business and investment intention to the extent necessary to comply with
applicable Government Rule. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the sale may be so
adjourned. In case of any sale of all or any part of the Collateral on credit or
for future delivery, the Collateral so sold may be retained by the Collateral
Agent until the full selling price is paid by the purchaser thereof, but neither
the Collateral Agent nor any other Secured Party shall incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold, and, in case of any such failure, such Collateral may again be sold
pursuant to the provisions hereof; and

 

(e) the Collateral Agent shall have, and in its sole discretion may exercise,
all of the rights, remedies, powers and privileges with respect to the
Collateral of a secured party under the Uniform Commercial Code (whether or not
the Uniform Commercial Code is in effect in the jurisdiction where such rights,
remedies, powers and privileges are asserted) and such additional rights,
remedies, powers and privileges to which a secured party is entitled under the
laws in effect in any jurisdiction where any rights, remedies, powers and
privileges in respect of this Agreement or the Collateral may be asserted,
including the right, to the maximum extent permitted by applicable Government
Rule, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Collateral Agent were the sole and
absolute owner of the Collateral (and the Borrower agrees to take all such
action as may be appropriate to give effect to such right).

 

The proceeds of, and other realization upon, the Collateral by virtue of the
exercise of remedies under this Section 6.01 shall be applied in accordance with
Section 6.04.

 

23.02 Deficiency. If the proceeds of, or other realization upon, the Collateral
by virtue of the exercise of remedies under Section 6.01 are insufficient to
cover the costs and expenses of such exercise and the payment in full of the
other Secured Obligations, the Borrower shall remain liable for any deficiency.

 

23.03 Private Sale. The Collateral Agent and the Lenders shall incur no
liability as a result of the sale, lease or other disposition of all or any part
of the Collateral at any private sale pursuant to Section 6.01 conducted in a
commercially reasonable manner. To the extent

 

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permitted by applicable Government Rule, the Borrower hereby waives any claims
against the Collateral Agent or any Lender arising by reason of the fact that
the price at which the Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale or was less
than the aggregate amount of the Secured Obligations, even if the Collateral
Agent accepts the first offer received and does not offer the Collateral to more
than one offeree.

 

23.04 Application of Proceeds. Except as otherwise expressly provided in this
Agreement, the proceeds of, or other realization upon, all or any part of the
Collateral by virtue of the exercise of remedies under Section 6.01, and any
other cash at the time held by the Collateral Agent under Article III or this
Article VI at the time of the exercise of such remedies, shall be applied by the
Collateral Agent in accordance with the terms of the Collateral Agency
Agreement.

 

As used in this Article VI, “proceeds” of Collateral shall mean cash, securities
and other property realized in respect of, and distributions in kind of,
Collateral, including any property received under any bankruptcy, reorganization
or other similar proceeding as to the Borrower or any issuer of, or account
debtor or other Borrower on, any of the Collateral.

 

ARTICLE XXIV

 

COLLATERAL AGENT MAY PERFORM

 

If the Borrower fails to perfect or maintain the Liens created hereunder, or
fails to maintain the required priority of the Liens created hereunder, the
Collateral Agent may, but shall not be obligated to, (after three (3) Business
Days’ notice to the Borrower), unless the Borrower is diligently pursuing a cure
for such failure that cannot be obtained more quickly by the Collateral Agent’s
performance as specified herein, itself perform, or cause the performance of,
such obligations, and the expenses of the Collateral Agent incurred in
connection therewith shall be payable by the Borrower.

 

ARTICLE XXV

 

REINSTATEMENT

 

This Agreement and the Lien created hereunder shall automatically be reinstated
if and to the extent that for any reason any payment by or on behalf of the
Borrower in respect of the Secured Obligations is rescinded or must otherwise be
restored by any holder of the Secured Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise.

 

ARTICLE XXVI

 

EXCULPATORY PROVISIONS

 

26.01 Exculpation of Collateral Agent. Notwithstanding anything herein to the
contrary, the liability of the Collateral Agent shall be limited, and the
Collateral Agent shall be entitled to indemnification and other protections as
provided in Article VI of the Collateral Agency Agreement, which provisions are
incorporated by reference as if set forth in full herein.

 

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ARTICLE XXVII

 

MISCELLANEOUS

 

27.01 No Waiver; Remedies Cumulative. No failure or delay by any Secured Party
in exercising any remedy, right, power or privilege under this Agreement or any
other Financing Document shall operate as a waiver of that remedy, right, power
or privilege, nor shall any single or partial exercise of that remedy, right,
power or privilege preclude any other or further exercise of that remedy, right,
power or privilege or the exercise of any other remedy, right, power or
privilege. The remedies, rights, powers and privileges provided by this
Agreement are cumulative and not exclusive of any remedies, rights, powers or
privileges provided by the other Financing Documents or by applicable Government
Rule.

 

27.02 Notices. All notices, requests and other communications provided for in
this Agreement shall be given or made in writing (including by telecopy) and
delivered to the intended recipient at the address specified below or, as to any
party, at such other address as is designated by that party in a notice to each
other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopy or personally delivered or, in the case of a mailed notice or notice
sent by courier, upon receipt, in each case given or addressed as provided in
this Section 10.02.

 

If to the Borrower:

 

Sabine Pass LNG, L.P.

717 Texas Ave.

Ste 3100

Houston, TX 77002

Attn: Don Turkleson

 

If to the Collateral Agent:

 

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.

 

27.03 Expenses. The Borrower hereby agrees to reimburse each of the Secured
Parties for all reasonable costs and expenses incurred by them (including,
without limitation, the fees and expenses of legal counsel) in connection with
(a) any Default and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (i) performance by the Agent of any obligations of the

 

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Borrower in respect of the Collateral that the Borrower has failed or refused to
perform, (ii) bankruptcy, insolvency, receivership, foreclosure, winding up or
liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Agent in respect thereof, by litigation or otherwise,
including expenses of insurance, (iii) judicial or regulatory proceedings and
(iv) workout, restructuring or other negotiations or proceedings (whether or not
the workout, restructuring or transaction contemplated thereby is consummated)
and (b) the enforcement of this Section 10.03, and all such costs and expenses
shall be Secured Obligations entitled to the benefits of the collateral security
provided pursuant to Article II.

 

27.04 Amendments, Etc. No provision of this Agreement may be waived, modified or
supplemented except by an instrument in writing signed by the Borrower, the
Agent and the Collateral Agent. Any modification, supplement or waiver shall be
for such period and subject to such conditions as shall be specified in the
written instrument effecting the same and shall be binding upon the Borrower and
each of the Secured Parties, and any such waiver shall be effective only in the
specific instance and for the purpose for which given.

 

27.05 Successors and Assigns. This Agreement, together with the other Financing
Documents, shall be binding upon and inure to the benefit of the Borrower, the
Secured Parties, and each of their respective successors and permitted assigns.
The Borrower shall not assign or transfer its rights or obligations under this
Agreement without the prior written consent of the Collateral Agent.

 

27.06 Actions Taken by Collateral Agent. All actions taken by the Collateral
Agent shall be at the direction of the Agent with the consent of such Lenders as
may be required by Section 9.01 or 10.09 of the Credit Agreement, as applicable.

 

27.07 Survival. Each representation and warranty made, or deemed to be made, in
or pursuant to this Agreement shall survive the making or deemed making of that
representation and warranty, and no Secured Party shall be deemed to have
waived, by reason of making any extension of credit, any Default that may arise
by reason of that representation or warranty proving to have been false or
misleading, notwithstanding that such or any other Secured Party may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time that extension of credit was made.

 

27.08 Agreements Superseded. This Agreement, together with the other Financing
Documents, constitutes the entire agreement and understanding among the parties
to this Agreement with respect to the matters covered by this Agreement and
supersedes any and all prior agreements and understandings, written or oral,
with respect to such matters.

 

27.09 Severability. Any provision of this Agreement that is held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions of this Agreement, and the invalidity, illegality or unenforceability
of a particular provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

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27.10 Captions. The table of contents, captions and section headings appearing
in this Agreement are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

 

27.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party to this Agreement may execute this Agreement by
signing any such counterpart; signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signatures are physically attached to the same counterpart. Delivery of an
executed counterpart of a signature page to this Agreement by hand or by
telecopy shall be effective as the delivery of a fully executed counterpart of
this Agreement.

 

27.12 Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE. THE BORROWER
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT AND STATE COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE GOVERNMENT RULE, ANY OBJECTION THAT IT MAY NOW OR
IN THE FUTURE HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

27.13 Certain Matters Relating to Collateral Located in the State of Louisiana.
With respect to Collateral which is located in the state of Louisiana,
notwithstanding anything contained herein to the contrary:

 

(a) Acceleration Upon Default, Executory Process; Confession of Judgment. When
an Event of Default has occurred and is continuing, the Collateral Agent may, at
its option, declare the Secured Obligations at once due and payable without
further demand, notice or putting the Borrower in default, and cause all and
singular the Collateral to be seized and sold under executory or other legal
process, issued by any court of competent jurisdiction, with or without
appraisement, at the option of the Collateral Agent, to the highest bidder, for
cash.

 

(b) Confession of Judgment. For purposes of foreclosure by executory process,
the Borrower hereby confesses judgment in favor of the Collateral Agent for the
full amount of the Secured Obligations, including principal and interest,
together with all attorney’s fees and costs, and any and all monies that may
become due to the Collateral Agent under the terms hereof or secured hereby.

 

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(c) Borrower’s Waiver of Rights. To the fullest extent permitted by law, the
Borrower hereby waives:

 

(i) the benefit of appraisement provided for in Articles 2332, 2336, 2723 and
2724 of the Louisiana Code of Civil Procedure, to the extent applicable, and all
other laws conferring the same;

 

(ii) the demand and three (3) days notice of demand as provided in Articles 2639
and 2721 of the Louisiana Code of Civil Procedure;

 

(iii) the notice of seizure provided by Articles 2293 of the Louisiana Code of
Civil Procedure; and

 

(iv) the three (3) days delay provided for in Articles 2331 and 2722 of the
Louisiana Code of Civil Procedure.

 

(d) Special Appointment of Collateral Agent as Agent. In addition to all of the
rights and remedies of the Collateral Agent hereunder, so long as this Agreement
remains in effect, the Collateral Agent is, pursuant to Louisiana R.S. 9:5388,
hereby appointed by the Borrower as agent and attorney-in-fact of the Borrower,
coupled with an interest, to carry out and enforce all or any specified portion
of the incorporeal rights comprising part of the Collateral.

 

(e) Civil Law Terminology. All references in this Agreement to “real property”,
“personal property”, “easements” and “receiver” shall mean and include
“immovable property”, “movable property”, “servitudes” and “keeper”
respectively.

 

27.14 Waiver of Jury Trial. THE BORROWER AND THE COLLATERAL AGENT (ON BEHALF OF
ITSELF AND EACH OTHER SECURED PARTY) HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE GOVERNMENT RULE, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

 

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

 

SABINE PASS LNG, L.P. By:   Sabine Pass LNG – G.P., Inc.     its General Partner
By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

 

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HSBC BANK USA, NATIONAL ASSOCIATION,     as Collateral Agent By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

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SOCIÉTÉ GÉNÉRALE,

    as Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

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ANNEX A

 

Project Documents

 

1. Material Project Documents.

 

2. Other Project Documents.

 

3. Non-Material Project Documents.

 

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Schedule 4.04

UCC Filing Offices

 

1. Secretary of State of the State of Delaware

 

2. Clerk of Court of Cameron Parish, Louisiana, for inclusion in the Louisiana
Secretary of State Master UCC Index

 

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EXHIBIT K

to Credit Agreement

 

FORM OF COLLATERAL AGENCY AGREEMENT

 

AGREEMENT

 

COLLATERAL AGENCY AGREEMENT (the “Agreement”), dated as of February 25, 2005
among SABINE PASS LNG, L.P., a Delaware limited partnership (the “Borrower”),
HSBC BANK USA, NATIONAL ASSOCIATION, in its capacity as Collateral Agent (the
“Collateral Agent”) and Securities Intermediary (the “Securities Intermediary”),
and SOCIÉTÉ GÉNÉRALE, in its capacity as Administrative Agent (the
“Administrative Agent”).

 

RECITALS

 

A. The Borrower has entered into that certain Credit Agreement, dated as of
February 25, 2005 (as amended, modified and supplemented from time to time, the
“Credit Agreement”), among the Borrower, the financial institutions from time to
time parties thereto (collectively, “Lenders”), HSBC Bank USA, National
Association, as Collateral Agent, and Société Générale, as Administrative Agent,
pursuant to which the Lenders have agreed to make certain Loans to the Borrower
in the amounts specified and on the terms and subject to the conditions set
forth therein.

 

B. It is a condition precedent to the effectiveness of the Credit Agreement that
the parties hereto shall have executed and delivered this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing and other good and valid
consideration, the receipt and adequacy of which is hereby expressly
acknowledged, the parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS AND OTHER MATTERS

 

1.01 Definitions. Unless otherwise defined herein, terms defined in Section 1.01
of the Credit Agreement are used herein (including the introductory paragraph
and recitals of this Agreement) as defined therein. In addition, for purposes of
this Agreement, the following terms shall have the following meanings:

 

“Agents” means, collectively, the Administrative Agent and the Collateral Agent.

 

“Agreement” has the meaning assigned to such term in the introductory paragraph
hereof.

 

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“Capacity Reservation Fees” shall have the meaning assigned to such term in the
Omnibus Agreements.

 

“Collateral Accounts” means the Collateral Accounts set out in Section 2.02.

 

“Committed Available Amounts” means (a) cash actually deposited into the
Insurance Proceeds Account or the Construction Account, respectively, by any
Person or (b) irrevocable commitments to deposit cash into the Insurance
Proceeds Account or the Construction Account, respectively, in the form of cash
equity contributions to the Borrower by such a Person.

 

“Construction Account” has the meaning assigned to such term in Section
2.02(a)(i).

 

“Construction Payment Subaccount” has the meaning assigned to such term in
Section 2.02(a)(x).

 

“Debt Service Accrual Account” has the meaning assigned to such term in Section
2.02(a)(v).

 

“Debt Service Reserve Account” has the meaning assigned to such term in Section
2.02(a)(iv).

 

“Depository Collateral” has the meaning assigned to such term in Section 2.03.

 

“Distribution Account” has the meaning assigned to such term in Section
2.02(a)(vii).

 

“Distribution Certificate” means a certificate substantially in the form of
Exhibit B and delivered by the Borrower pursuant to Section 3.02(c)(ii).

 

“Executed Withdrawal/Transfer Certificate” has the meaning assigned to such term
in Section 3.02(b).

 

“Income Tax Reserve Account” has the meaning assigned to such term in Section
2.02(a)(vi).

 

“Insurance Proceeds Account” has the meaning assigned to such term in Section
2.02(a)(ix).

 

“Monthly Transfer Date” means the 26th day of each month or, if such day is not
a Business Day, the next succeeding Business Day.

 

“Operating Account” has the meaning assigned to such term in Section
2.02(a)(iii).

 

“Payment Instruction” means an irrevocable written instruction delivered by the
Borrower to the Collateral Agent directing that either: (a) a wire transfer be
made or (b) a check be issued by the Collateral Agent, in each case from amounts
available in cash and standing to the credit of a Collateral Account, such
Payment Instruction to specify the amount of funds to be transferred and the
Person or account to which such

 

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funds are to be transferred, which information and instructions shall be
consistent in all material respects with that set out in the Executed
Withdrawal/Transfer Certificate which transferred such amounts into such
Account.

 

“Permitted Distribution” has the meaning assigned to such term in Section
4.07(b).

 

“Punchlist” has the meaning assigned to such term in the EPC Contract.

 

“Punchlist Retention Subaccount” has the meaning assigned to such term in
Section 2.02(a)(ii).

 

“Remedies Direction” means a written notice and instruction to the Collateral
Agent from the Administrative Agent (acting on the direction of the
Supermajority Lenders directing the Administrative Agent) to take the actions
specified therein with respect to a Trigger Event which has occurred and is
continuing.

 

“Required Accrual Amount” means an amount equal to the product of (1) one-sixth
(1/6) of the Debt Service in respect of the Secured Obligations payable at the
next succeeding Semi-Annual Date or Principal Payment Date (as applicable),
multiplied by the number of months since the next preceding Semi-Annual Date or
Principal Payment Date, as applicable.

 

“Restoration Plan” has the meaning set forth in Section 4.08(b)(iii).

 

“Restoration Work” has the meaning set forth in Section 4.08(b)(iii).

 

“Revenue Account” has the meaning assigned to such term in Section
2.02(a)(viii).

 

“Secured Party Addition Agreement” means an agreement substantially in the form
of Exhibit C.

 

“Termination Date” means the date on which the Secured Parties have received
final and indefeasible payment in full of all Secured Obligations and all other
amounts owing to the Secured Parties under the Financing Documents.

 

“Trigger Event” means any Event of Default under the Credit Agreement which is
designated as a “Trigger Event” by the Administrative Agent in writing to the
Borrower and the Collateral Agent.

 

“Trigger Event Date” has the meaning assigned to such term in Section 3.04(a).

 

“Withdrawal Date” means any Monthly Transfer Date or any other date on which a
withdrawal of transfer is to be made from a Collateral Account.

 

“Withdrawal/Transfer Certificate” means a certificate substantially in the form
of Exhibit A and delivered by the Borrower pursuant to Section 3.02.

 

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1.02 Interpretation.

 

(a) Principles of Construction. The principles of construction and
interpretation set forth in Sections 1.02 and 1.03 of the Credit Agreement shall
apply to this Agreement as if set forth herein, mutatis mutandis.

 

(b) Withdrawals to Occur on a Business Day. In the event that any withdrawal,
transfer or payment to or from any Collateral Account contemplated under this
Agreement shall be required to be made on a day that is not a Business Day, such
withdrawal, transfer or payment shall be made on the next succeeding Business
Day.

 

1.03 Uniform Commercial Code. As used herein, the term “UCC” shall mean the
Uniform Commercial Code as in effect from time to time in the State of New York.
All terms defined in the UCC shall have the respective meanings given to those
terms in the UCC, except where the context otherwise requires.

 

ARTICLE II

 

THE COLLATERAL AGENT AND THE ESTABLISHMENT OF THE ACCOUNTS

 

2.01 Collateral Agent.

 

(a) Acceptance of Appointment of the Collateral Agent. The Collateral Agent is
hereby appointed to act as Collateral Agent and it hereby agrees to act as
Collateral Agent under the express terms of this Agreement. Each of the
Administrative Agent and the Borrower hereby acknowledges that the Collateral
Agent shall act solely as Collateral Agent under the express terms of this
Agreement. The Collateral Agent is, and shall act as, the “Securities
Intermediary” (within the meaning of Section 8-102(a)(14)(ii) of the UCC) with
respect to the Collateral Accounts and pursuant to this Agreement.

 

(b) Collateral Accounts Established. The Collateral Agent acknowledges, confirms
and agrees that it has established the Collateral Accounts as set out in Section
2.02(a), which shall be maintained in the name of the Borrower but under the
exclusive “control” (within the meaning of Section 8-106(d) of the UCC) of the
Collateral Agent at all times until the termination of this Agreement.

 

(c) Confirmation and Agreement. The Collateral Agent acknowledges, confirms and
agrees that, as of the Closing Date and as of each date on which any Collateral
Account is established pursuant to this Agreement:

 

(i) each Collateral Account is a “securities account” (within the meaning of
Section 8-501 of the UCC) in respect of which the Collateral Agent is a
securities intermediary and to the extent of any cash credited to such
Collateral Account is a “deposit account” (within the meaning of Section 9-102
of the UCC);

 

(ii) the Collateral Agent is the “entitlement holder” (within the meaning of
8-102(a)(7) of the UCC) of all “security entitlements” (within the meaning of
8-102(a)(17) of the UCC) carried in or credited to the Collateral Accounts;

 

     - 4 -    EXHIBIT K           TO CREDIT AGREEMENT

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(iii) all property delivered to the Collateral Agent pursuant to this Agreement
will be promptly credited to a Collateral Account;

 

(iv) all “financial assets” (within the meaning of Section 8-102(a)(9) of the
UCC) in registered form or payable to or to the order of and credited to any
Collateral Account shall be registered in the name of, payable to or to the
order of, or specially endorsed to, the Collateral Agent or in blank, or
credited to another securities account maintained in the name of the Collateral
Agent;

 

(v) the Collateral Agent shall promptly comply with all written instructions
(including instructions directing the disposition of funds or financial assets)
and/or “entitlement orders” (within the meaning of Section 8-102(a)(8) of the
UCC) originated by the Administrative Agent with respect to any Collateral
Account; and

 

(vi) the Collateral Agent shall not change the name or account number of any
Collateral Account without the prior written consent of the other Agents and the
Borrower.

 

(d) Financial Assets Election. The Collateral Agent agrees that each item of
property (whether cash, a security, an instrument or obligation, share,
participation, interest or other property whatsoever) credited to any Collateral
Account shall be treated as a financial asset under Article 8 of the UCC.

 

(e) Entitlement Orders; Control. The parties to this Agreement hereby agree that
until the Collateral Agent’s obligations under this Agreement shall terminate in
accordance with the terms hereof, the Collateral Agent shall have “control”
(within the meaning of Section 8-106(d) of the UCC) of the Borrower’s security
entitlements with respect to the financial assets credited to the Collateral
Accounts.

 

(f) Degree of Care; Liens. The Collateral Agent shall exercise the same degree
of care in administering the funds held in the Collateral Accounts and the
investments purchased from such funds in accordance with the terms of this
Agreement as the Collateral Agent exercises in the ordinary course of its
day-to-day business in administering other funds and investments for its own
account and as required by applicable law. The Collateral Agent shall perform
its obligations hereunder in accordance with generally accepted banking industry
standards. The Collateral Agent is not party to and shall not execute and
deliver, or otherwise become bound by, any agreement under which the Collateral
Agent agrees with any Person to comply with entitlement orders or instructions
originated by such Person relating to any of the Collateral Accounts or the
security entitlements that are the subject of this Agreement. The Collateral
Agent shall not grant or suffer to exist any lien, pledge or security interest
in any financial asset that is the subject of any security entitlement that is
the subject of this Agreement and shall, if any such lien, pledge or security
interest shall nevertheless be created, cause the prompt release or discharge of
the same.

 

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(g) Subordination of Lien; Waiver of Set-Off. The financial assets standing to
the credit of the Collateral Accounts will not be subject to deduction, set-off,
banker’s lien, or any other right in favor of any Person other than the
Collateral Agent (except to the extent of returned items and chargebacks either
for uncollected checks or other items of payment and transfers previously
credited to one or more of the Collateral Accounts, and the Borrower hereby
authorizes the Collateral Agent to debit the relevant Collateral Account(s) for
such amounts).

 

(h) No Other Agreements. Neither the Collateral Agent nor the Borrower have
entered or will enter into any agreement with respect to any Collateral Account
or any security entitlements or any financial assets carried in or credited to
any Collateral Account, other than this Agreement and the other Financing
Documents.

 

(i) Notice of Adverse Claims. The Collateral Agent hereby represents that,
except for the claims and interests of the Borrower in each of the Collateral
Accounts, the Collateral Agent, as of the Closing Date, has no knowledge of, and
has received no notice of any claim to, or interest in, any Collateral Account
or in any security entitlement or financial asset carried therein or credited
thereto. If any Person asserts any lien (including any writ, garnishment,
judgment, warrant of attachment, execution or similar process) against any
Collateral Account or in any security entitlement or financial asset carried
therein or credited thereto and if the Collateral Agent has notice of such
assertion, the Collateral Agent will promptly notify the other Agents and the
Borrower thereof.

 

(j) Rights and Powers of the Collateral Agent. The rights and powers granted to
the Collateral Agent by the Secured Parties have been granted in order to
perfect the lien of the Secured Parties in the Collateral Accounts and the
security entitlements and financial assets carried therein or credited thereto.

 

2.02 The Collateral Accounts.

 

(a) Establishment of Collateral Accounts. As of the Closing Date, the Collateral
Agent has established the following special, segregated and irrevocable
collateral accounts at its offices located in New York City bearing the names
and account numbers identified in Schedule I (such accounts, collectively, the
“Collateral Accounts”) (each such Collateral Account being a securities account)
each of which shall be maintained at all times by the Collateral Agent until the
termination of this Agreement in accordance with Section 7.13 (unless this
Agreement otherwise expressly contemplates closure of such Collateral Account
prior to the date of the termination of this Agreement):

 

(i) the Construction Account (the “Construction Account”);

 

(ii) the Punchlist Retention Subaccount (the “Punchlist Retention Subaccount”),
a sub-account of the Construction Account;

 

(iii) the Operating Account (the “Operating Account”);

 

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(iv) the Debt Service Reserve Account (the “Debt Service Reserve Account”);

 

(v) the Debt Service Accrual Account (the “Debt Service Accrual Account”);

 

(vi) the Income Tax Reserve Account (the “Income Tax Reserve Account”);

 

(vii) the Distribution Account (the “Distribution Account”);

 

(viii) the Revenue Account (the “Revenue Account”);

 

(ix) the Insurance Proceeds Account (the “Insurance Proceeds Account”); and

 

(x) the Construction Payment Subaccount (the “Construction Payment Subaccount”).

 

(b) Account Names and Numbers. The names and account numbers of the Collateral
Accounts established hereunder on or prior to the Closing Date are set out on
Schedule I. The Collateral Agent shall advise the Agent and the Borrower in
writing of the account name and number of any Collateral Account established
hereunder by the Collateral Agent and the Borrower, if any, after the Closing
Date.

 

(c) No Other Accounts. The Borrower shall not open or maintain or cause to be
opened or maintained with any bank or other financial institution any deposit,
savings or other account other than the Collateral Accounts, the account held by
the Borrower at JPMorgan Chase (f/k/a Bank One) with the account name of Sabine
Pass LNG, LP and account number 653519421, provided that such account shall be
closed by the Borrower and the remaining balance transferred to the Construction
Account upon the clearance of all checks issued in respect of such account as of
the Closing Date and any other accounts expressly permitted by the Financing
Documents or otherwise established with the consent of the Collateral Agent.

 

(d) Collateral Accounts Constitute Collateral.

 

(i) Each Collateral Account and all amounts from time to time held in such
Collateral Account shall be subject to the Lien of the Collateral Agent for the
benefit of the Secured Parties.

 

(ii) Each Collateral Account and all amounts from time to time held in such
Collateral Account shall be held in the custody of, and maintained by the
Collateral Agent for the purposes and on the express terms set out in this
Agreement. All such amounts shall constitute a part of the Depository Collateral
and shall not constitute payment of any Secured Obligations or any other
obligations of the Borrower until expressly applied thereto in accordance with
the provisions of this Agreement or the Credit Agreement.

 

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(e) Standing Instructions. The Borrower and the Administrative Agent hereby
irrevocably instruct and authorize the Collateral Agent to deposit funds
(promptly upon receipt thereof) into, and transfer and withdraw funds from, the
Collateral Accounts in accordance with the terms of this Agreement and the other
Financing Documents.

 

2.03 Grant of Lien on Collateral Accounts. As collateral security for the prompt
and complete payment and performance when due of the Secured Obligations, the
Borrower has, pursuant to the Security Agreement, assigned, granted and pledged
to the Collateral Agent on behalf of and for the benefit of the Secured Parties,
a security interest in (a) each Collateral Account and (b) all cash,
investments, investment property, securities or other property at any time on
deposit in or credited to any Collateral Account, including all income or gain
earned thereon and any proceeds thereof (the “Depository Collateral”).

 

ARTICLE III

 

PROVISIONS APPLICABLE TO COLLATERAL ACCOUNTS

 

3.01 Permitted Investments.

 

(a) Permitted Investments. Pending the application of funds in accordance with
Articles III and IV, funds held in any Collateral Account shall be invested and
reinvested by the Collateral Agent upon written direction of the Borrower (which
may be in the form of a standing instruction) only in Permitted Investments, and
with respect to those amounts next anticipated to be transferred or withdrawn,
having a scheduled maturity no later than such next anticipated cash withdrawal
or transfer from such Collateral Account; provided, however, that: (i) upon the
receipt by the Borrower of notice of a Trigger Event delivered by the
Administrative Agent pursuant to Section 3.04 and unless otherwise directed
therein, or (ii) in the event of any failure by the Borrower to so direct the
Collateral Agent in writing on or prior to the day on which any funds are (A)
received by the Collateral Agent or (B) transferred between Collateral Accounts
in accordance with this Agreement as to the investment of such funds, such
investments and reinvestments shall be made by the Collateral Agent in Permitted
Investments of the type referred to in clause (f) of the definition of
“Permitted Investments”. All funds in a Collateral Account that are invested
pursuant to this Section 3.01(a) shall be deemed to be held in such Collateral
Account for purposes of this Agreement and the other Financing Documents and
shall constitute part of the Collateral. The Borrower shall bear all risk of
loss of capital from investments in Permitted Investments.

 

(b) Liability of Collateral Agent.

 

(i) Other than with respect to Permitted Investments required to be invested by
the Collateral Agent in accordance with the proviso in Section 3.01(a), the
Collateral Agent shall not have any duty to determine whether any investment or
reinvestment of monies in any Collateral Account satisfies the criteria set out
in the definition of “Permitted Investment”.

 

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(ii) The Collateral Agent shall not be liable for any loss resulting from any
investment in any Permitted Investment or the sale, disposition, redemption or
liquidation of such investment or by reason of the fact that the proceeds
realized in respect of such sale, disposition, redemption or liquidation were
less than that which might otherwise have been obtained.

 

(c) Liquidation to Make Disbursements. If and when cash is required for the
making of any transfer, disbursement or withdrawal in accordance with Articles
III and IV, the Borrower shall cause Permitted Investments to be sold or
otherwise liquidated into cash (without regard to maturity) as and to the extent
necessary in order to make such transfers, disbursements or withdrawals required
pursuant to Articles III and IV by giving written notice of such sale or
liquidation to the Collateral Agent. In the event any such investments are
redeemed prior to the maturity thereof, the Collateral Agent shall not be liable
for any loss or penalties relating thereto.

 

(d) Income from Investments. The proceeds from the investment of monies in any
Collateral Account in Permitted Investments shall be deposited by the Collateral
Agent into the Revenue Account on or before the second Business Day following
the month in which such interest, gain or other amount is earned and received;
provided that for the avoidance of doubt, such proceeds shall consist of
interest, gain and other amounts received in respect of an investment of
principal and not the principal itself. Any interest, gain or other amount of
income earned on Permitted Investments shall be for the account of the Borrower
for income tax purposes.

 

3.02 Withdrawal and Transfer Procedure.

 

(a) Maintenance of Funds in Accounts; Withdrawals. Until withdrawn or
transferred pursuant to and in accordance with this Agreement, any amounts
deposited into a Collateral Account (other than income from investments
transferred to the Revenue Account pursuant to Section 3.01(d)) shall be held in
such Collateral Account. All withdrawals and transfers from any Collateral
Account shall be made in accordance with the provisions of Articles III and IV.

 

(b) Withdrawal/Transfer Certificate. Except as otherwise expressly provided
herein, the Borrower shall not be entitled to request withdrawals or transfers
of monies from any Collateral Account without having provided a
Withdrawal/Transfer Certificate authorizing such withdrawal and/or transfer.
Withdrawals or transfers from any Collateral Account (except as otherwise
expressly provided herein) shall be made by the Collateral Agent following
receipt of (and in accordance with) a Withdrawal/Transfer Certificate signed by
the Borrower and countersigned by the Administrative Agent (an “Executed
Withdrawal/Transfer Certificate”). Each Withdrawal/Transfer Certificate shall
request withdrawals and transfers to and from Collateral Accounts in the
amounts, at the times and in the order of priority set out in Article IV.

 

(c) Delivery to Agent and Form of Withdrawal/Transfer Certificate. On the
Funding Date and no later than five Business Days prior to each Monthly Transfer
Date, at least five Business Days prior to the Final Funding Date, the Borrower
shall deliver for

 

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purposes of any withdrawal or transfer on the next succeeding Withdrawal Date
(unless no withdrawal or transfer is anticipated in respect of such Withdrawal
Date):

 

(i) to each Agent a Withdrawal/Transfer Certificate signed by an Authorized
Officer of the Borrower specifying:

 

(A) each Collateral Account from which a withdrawal or transfer is requested
and, in the case of any transfer, the relevant Collateral Account(s) to which,
and/or other Person(s) to whom, such transfer is to be made;

 

(B) the amount requested to be withdrawn or transferred from each such
Collateral Account (and the calculation thereof, if required, in accordance with
the relevant provisions of Article IV);

 

(C) the relevant Withdrawal Date on which such withdrawal or transfer is to be
made;

 

(D) the purpose for which the amount so withdrawn or transferred is to be
applied (if not evident from the nature of the payment or identity of the
intended payee); and

 

(E) all other information required to be provided in such Withdrawal/Transfer
Certificate under, or to evidence compliance with, the relevant provisions of
Articles III and IV; and

 

(ii) to each Agent, in the event that the applicable Withdrawal/Transfer
Certificate shall request any transfers, payments or withdrawals constituting
Restricted Payments, a Distribution Certificate.

 

(d) Agents’ Review of Certificates; Delivery to Collateral Agent.

 

(i) In the event that, prior to the relevant Withdrawal Date, the Administrative
Agent shall determine that either or both: (A) any amounts specified in a
Withdrawal/Transfer Certificate (or an amended Withdrawal/Transfer Certificate,
as applicable) have been incorrectly calculated; and/or (B) such
Withdrawal/Transfer Certificate (or an amended Withdrawal/Transfer Certificate,
as applicable) is inconsistent with, or otherwise fails to satisfy the
requirements of, the provisions of this Agreement and the other Financing
Documents, the Administrative Agent shall notify the Collateral Agent and the
Borrower in writing promptly but in no case later than the third Business Day
following the Administrative Agent’s receipt of such Withdrawal/Transfer
Certificate and may either (I) return such Withdrawal/Transfer Certificate (or
such amended certificate, as applicable) to the Borrower with its determinations
noted thereon; or (II) in consultation with the Borrower, make such corrections
as it reasonably deems necessary to satisfy the requirements of this Agreement.
In the event that the Administrative Agent makes any revisions to a
Withdrawal/Transfer Certificate as described above, it shall promptly provide a

 

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copy of the same, as so revised, to the Collateral Agent and the Borrower. The
Administrative Agent and the Borrower will endeavor to agree and complete the
final form Withdrawal/Transfer Certificate (or any amended or corrected
certificate), and deliver such certificate to the Collateral Agent, no later
than the Business Day prior to the Withdrawal Date to which such certificate
relates.

 

(ii) The Administrative Agent and the Collateral Agent each shall countersign
any accepted Withdrawal/Transfer Certificate (or any amended or corrected
Withdrawal/Transfer Certificate, as applicable) (which acceptance or
counter-signature shall not be unreasonably withheld or delayed), and the
Collateral Agent shall implement such Executed Withdrawal/Transfer Certificate
(or such amended or corrected certificate, as applicable) in accordance with
Section 3.02(e) and the other provisions of this Agreement.

 

(iii) Nothing in this Section 3.02(d) shall preclude any Agent from consulting
with the Borrower, any Secured Party or any consultant or expert advisor in
making its determinations with respect to the accuracy of any
Withdrawal/Transfer Certificate (or any amended or corrected Withdrawal/Transfer
Certificate, as applicable).

 

(e) Implementation of Withdrawal/Transfer Certificate. Except as otherwise
provided in this Agreement, following receipt of an Executed Withdrawal/Transfer
Certificate, the Collateral Agent shall pay or transfer the amount(s) specified
in such Withdrawal/Transfer Certificate by initiating such payment or transfer
not later than 11:30 a.m. (New York time) on the Withdrawal Date set out in such
Withdrawal/Transfer Certificate for such payment or transfer (or if such
certificate is not received by the Collateral Agent at least one Business Day
prior to such Withdrawal Date, by 11:30 a.m. (New York time) on the next
succeeding Business Day following delivery of such Withdrawal/Transfer
Certificate to the Collateral Agent).

 

(f) Failure of the Borrower to Submit Withdrawal/Transfer Certificate.
Notwithstanding any other provision of this Agreement to the contrary, if at any
time the Borrower fails to timely submit or cause to be timely submitted an
Executed Withdrawal/Transfer Certificate to the Collateral Agent for the
withdrawal, transfer or payment of amounts to any Collateral Account or Person,
the Collateral Agent may (but shall not be obligated to) effect any withdrawal,
transfer or payment, as the case may be, of any amounts then due and payable or
required to be transferred pursuant to the terms of this Agreement or any other
Financing Document. The Collateral Agent shall, as soon as practicable, provide
written notice to the Borrower regarding any such withdrawals, transfer or
payments.

 

3.03 Transfer of Amounts. Amounts improperly or inadvertently deposited into any
Collateral Account shall be transferred by the Collateral Agent into the correct
Collateral Accounts. Any withdrawals and transfers hereunder shall only be made
to the extent that sufficient funds are then available (including as Permitted
Investments) in the Collateral Account from which such withdrawal is to be made.

 

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3.04 Trigger Event.

 

(a) The Trigger Event Date. Notwithstanding anything in this Agreement to the
contrary, on and after receipt by the Collateral Agent and the Borrower of
written notice from the Administrative Agent that a Trigger Event has occurred
and is continuing (the date of such notice, the “Trigger Event Date”): (i) no
transfer or withdrawal of funds from any Collateral Account shall be requested
by the Borrower or implemented by the Collateral Agent pursuant to any
Withdrawal/Transfer Certificate or otherwise, and (ii) such funds shall be
retained in the applicable Collateral Account for application by the Collateral
Agent in accordance with a Remedies Direction.

 

(b) Accounting. Promptly upon receipt of notice of the occurrence of (but no
later than two Business Days after) any Trigger Event Date, the Collateral Agent
shall render an accounting to the other Agents and the Borrower of all monies in
the Collateral Accounts as of the Trigger Event Date. Such accounting may be
satisfied by delivery to the other Agents and the Borrower of the most recently
available bank statement for such Collateral Account (including any
electronically available statement) and a transaction or activity report for
each Collateral Account covering the period from the closing date of the last
statement through the delivery date thereof.

 

3.05 Distribution of Collateral Proceeds.

 

(a) Priority of Payments. Upon the occurrence and during the continuation of a
Trigger Event and following delivery of a Remedies Direction to the Collateral
Agent in connection with the sale, disposition or other realization, collection
or recovery of any amounts in the Collateral Accounts or any other Collateral
(or any portion thereof), the Collateral Agent shall apply the proceeds of such
sale, disposition, or other realization, collection or recovery toward the
payment of the Secured Obligations in the following order of priority:

 

(i) first, to any fees, costs, charges and expenses then due and payable to the
Administrative Agent, the Collateral Agent and the Securities Intermediary under
any Financing Document pro rata based on such respective amounts then due to
such Persons;

 

(ii) second, to the respective outstanding fees, costs, charges and expenses
then due and payable to the Secured Parties under any Financing Document pro
rata based on such respective amounts then due to such Persons;

 

(iii) third, to any accrued but unpaid Interest Expense owed to the Secured
Parties on the Secured Obligations pro rata based on such respective amounts
then due to the Secured Parties;

 

(iv) fourth, to the respective overdue principal and other Debt Service with
respect to the Secured Obligations owed to the Secured Parties under the Credit
Agreement, pro rata based on such respective amounts then due to the Secured
Parties;

 

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(v) fifth, to the unpaid principal and other Debt Service with respect to the
Secured Obligations then due and payable to the Secured Parties under the Credit
Agreement, pro rata based on such respective amounts then due to the Secured
Parties; and

 

(vi) sixth, after final payment in full of the amounts described in this Section
3.05 and the Termination Date shall have occurred, in accordance with Section
3.07.

 

(b) Borrower Remains Liable for Deficiency. It is understood that the Borrower
shall remain liable to the extent of any deficiency between the amount of the
proceeds of the Depository Collateral and any other Collateral and the aggregate
of the sums referred to in clauses first through fifth of paragraph (a) above.

 

3.06 Closing of Collateral Accounts. At any point prior to the Termination Date
and subject to the other terms and conditions of this Agreement, if the Borrower
requests in writing (and the Administrative Agent consents thereto in writing)
at any time after the date on which a Collateral Account is no longer intended
to be utilized pursuant to this Agreement that such Collateral Account be
closed, the Administrative Agent shall direct the Collateral Agent to close such
Collateral Account and transfer any amount standing to the credit of that
Collateral Account (together with any accrued interest or profit on or income
from such amount) to the Revenue Account for application pursuant to Section
4.02(b).

 

3.07 Disposition of Collateral Accounts upon Termination Date. Upon the
Termination Date, the Collateral Agent shall pay any sums remaining in the
Collateral Accounts to the order of the Borrower or as otherwise required by
applicable law upon receipt of a certificate of an authorized officer of the
Borrower certifying that the Termination Date has occurred, which certificate
shall be acknowledged by the Administrative Agent and the Collateral Agent
(which acknowledgement shall not be unreasonably withheld or delayed).

 

ARTICLE IV

 

THE COLLATERAL ACCOUNTS

 

4.01 Construction Account and Punchlist Retention Subaccount.

 

(a) Deposits to Construction Account. The following amounts shall be deposited
into the Construction Account:

 

(i) the Equity Contribution Amount;

 

(ii) the proceeds of all Loans made pursuant to the Credit Agreement (other than
Loans used to pay Debt Service, which amounts shall be advanced directly to the
Secured Parties entitled thereto);

 

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(iii) Capacity Reservation Fees payable pursuant to the Omnibus Agreements
received between the Closing Date and the Final Funding Date;

 

(iv) each other contribution by any Person prior to the Term Conversion Date for
the purposes of paying Project Costs; and

 

(v) deposits from the Revenue Account pursuant to Section 4.02(b)(ii) below.

 

If any such amounts are remitted to the Borrower, the Borrower shall hold such
amounts in trust for the Collateral Agent and shall, as promptly as possible
after the receipt thereof, remit such amounts to the Collateral Agent for
deposit in the Construction Account, with any necessary endorsements.

 

(b) Transfers or Payments from the Construction Account Prior to the Final
Funding Date. Prior to the Final Funding Date, on each Monthly Transfer Date,
subject to Section 3.05, the Collateral Agent shall, provided that it has
received an Executed Withdrawal/Transfer Certificate in relation thereto, make
the following withdrawals and transfers of amounts to the extent then available
in the Construction Account as specified in and in accordance with such Executed
Withdrawal/Transfer Certificate in the following order of priority:

 

(i) First, to the account of the EPC Contractor or such other Person or account
specified therein, the amounts specified in the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to the Project Costs then due and
payable;

 

(ii) Second, after making the withdrawal and transfer above, to the Construction
Payment Subaccount, the amounts specified in the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to the Project Costs due and
payable within a 30-day period from the Withdrawal Date;

 

(iii) Third, on each Monthly Transfer Date prior to the Term Conversion Date,
after making the withdrawals and transfers above, to the Operating Account an
amount set forth on the Executed Withdrawal/Transfer Certificate (without
duplication of any amounts transferred pursuant to Section 4.02(b)(i)) and
certified therein to be equal to the Operation and Maintenance Expenses then due
and payable or to become due and payable within the next 30 days, net of any
surplus remaining in the Operating Account from prior deposit of funds therein;

 

(iv) Fourth, after making the withdrawals and transfers above, to pay to each
Secured Party entitled thereto, all Debt Service and all fees, costs,
indemnities and expenses then due and payable to such Person pursuant to the
Financing Documents; and

 

(v) Fifth, after making the withdrawals and transfers above, on the Funding
Date, to the Pledgors an amount equal to the portion of Project Costs reasonably
expended by or on behalf of the Borrower in excess of the Equity Contribution
Amount (including any Estimated Amounts).

 

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(c) Transfers or Payments from the Construction Account on and after the Final
Funding Date. Subject to Section 3.05, on the Final Funding Date and, in the
case of transfers pursuant to clause first, on each Monthly Transfer Date
thereafter, the Collateral Agent shall, provided that it has received an
Executed Withdrawal/Transfer Certificate in relation thereto, make the following
withdrawals and transfers of amounts to the extent then available in the
Construction Account as specified in and in accordance with such Executed
Withdrawal/Transfer Certificate in the following order of priority:

 

(i) First, if applicable, to the account of the EPC Contractor or such other
Person or account specified therein the amounts specified in the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the Project
Costs then due and payable;

 

(ii) Second, after making the withdrawal and transfer above, to the Construction
Payment Subaccount, the amounts specified in the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to the Project Costs due and
payable on or prior to Final Completion;

 

(iii) Third, after making the withdrawals and transfers above, if applicable, to
the Punchlist Retention Subaccount an amount specified in the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the total
cost of the Punchlist items as notified by the EPC Contractor to the Borrower
pursuant to Section 11.6B of the EPC Contract;

 

(iv) Fourth, after making the withdrawals and transfers above, to pay to each
Secured Party entitled thereto, all fees, costs, indemnities and expenses then
due and payable to such Person pursuant to the Financing Documents;

 

(v) Fifth, after making each applicable withdrawal and transfer above, to the
Debt Service Reserve Account, an amount necessary such that the balance in the
Debt Service Reserve Account is equal to the Required Debt Service Reserve
Amount; and

 

(vi) Sixth, after making each applicable withdrawal and transfer above, any
remaining amounts to the Pledgors until the Debt to Equity ratio, after giving
effect to the aggregate borrowings pursuant to the Credit Agreement, is no
greater than 80:20, and thereafter to the Pledgors and the Secured Parties (for
application to the principal amount of the Secured Obligations) in such
proportion as to maintain a Debt to Equity ratio of no greater than 80:20.

 

(d) Construction Payment Subaccount. Subject to Section 3.05, all amounts from
time to time on deposit in the Construction Payment Subaccount shall be
available at all times to the Borrower to be applied solely for the payment when
due of Project Costs. Upon the receipt of a Payment Instruction, the Collateral
Agent shall transfer funds from the Construction Payment Subaccount on the date
(provided that the date specified for payment must be at least one (1) Business
Day following receipt by the Collateral Agent), in the amount and to the Person
or account specified therein.

 

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(e) Punchlist Retention Subaccount. Subject to Section 3.05, funds on deposit in
the Punchlist Retention Subaccount may be withdrawn by the Borrower at any time
upon delivery to the Collateral Agent of an Executed Withdrawal/Transfer
Certificate to be applied in payment of all costs in connection with completion
of the Punchlist items to be completed under the EPC Contract after the Final
Funding Date.

 

(f) Excess Amounts. Upon Final Completion pursuant to the EPC Contract, any
amount remaining in the Construction Account, Construction Payment Subaccount or
the Punchlist Retention Subaccount shall be transferred by the Collateral Agent
upon receipt of an Executed Withdrawal/Transfer Certificate to the Revenue
Account for application as set forth in Section 4.02.

 

(g) Capacity Reservation Fees. Notwithstanding the foregoing provisions of this
Section 4.01, all Capacity Reservation Fees received by the Collateral Agent
from the Funding Date to the Final Funding Date, shall be transferred to the
Distribution Account.

 

4.02 Revenue Account.

 

(a) Deposits to the Revenue Account. The Borrower shall or shall cause the
following amounts to be deposited in the Revenue Account:

 

(i) all Project Revenues received at any time by or on behalf of the Borrower;

 

(ii) the proceeds of all Permitted Indebtedness other than the Loans under the
Credit Agreement; and

 

(iii) all other amounts received at any time by or on behalf of the Borrower
(including, without limitation, all payments in respect of Permitted Swap
Agreements and all proceeds of Collateral received by the Collateral Agent
pursuant to an exercise of remedies in accordance with the Financing Documents).

 

Notwithstanding the foregoing, in the event that any such payments, proceeds or
other amounts constituting Project Revenues are received by the Borrower, the
Borrower shall promptly pay, endorse, transfer and deliver the same to the
Collateral Agent for deposit to the Revenue Account, and, until such delivery,
the Borrower shall hold such payments and other amounts in trust for the
Collateral Agent.

 

(b) Transfers and Payments from the Revenue Account Prior to the Term Conversion
Date. Prior to the Term Conversion Date, on each Monthly Transfer Date, the
Collateral Agent shall, subject to Section 3.05, provided that it has received
an Executed Withdrawal/Transfer Certificate in relation thereto and in each case
without

 

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duplication of any amount transferred pursuant to Section 4.01(b), make the
following withdrawals and transfers of amounts to the extent then available in
the Revenue Account, as specified and in accordance with such Executed
Withdrawal/Transfer Certificate in the following order of priority:

 

(i) First, to the Operating Account an amount set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the amount
necessary to pay Operation and Maintenance Expenses then due and payable;

 

(ii) Second, after making the withdrawal and transfer above, to the Construction
Payment Subaccount Account to pay any Project Costs in an amount set forth on
the Executed Withdrawal/Transfer Certificate and certified therein to be equal
to Project Costs due or to become due and payable in the next succeeding 30-day
period and not otherwise funded from the Construction Account pursuant to
Section 4.01(b)(i);

 

  (iii) Third, after making each applicable withdrawal and transfer above, to
pay each Secured Party entitled thereto, all Debt Service and all fees, costs,
indemnities and expenses then due and payable to such Person pursuant to the
Financing Documents and not otherwise funded from the Construction Account
pursuant to Section 4.01(b)(iv); and

 

  (iv) Fourth, after making each applicable withdrawals and transfers above, to
the Punchlist Retention Subaccount, an amount, if any, set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the
difference between the proceeds of the final Loan under the Credit Agreement and
the cost of Punchlist items notified by the EPC Contractor to the Borrower
pursuant to Section 11.6B of the EPC Contract;

 

provided, that in the case of paragraphs (ii) and (iv) above, the Borrower shall
have (a) delivered to the Independent Engineer and the Administrative Agent all
invoices in relation thereto, and (b) received written approval of the
Administrative Agent (acting in consultation with the Independent Engineer) for
such withdrawal and transfer.

 

(c) Withdrawals from the Revenue Account following the Term Conversion Date.
Subject to Section 3.05, on each Monthly Transfer Date on or following the Term
Conversion Date, the Collateral Agent shall, provided that it has received an
Executed Withdrawal/Transfer Certificate in relation thereto, make the following
withdrawals and transfers of amounts to the extent then available in the Revenue
Account, as specified in and in accordance with such Executed
Withdrawal/Transfer Certificate in the following order of priority:

 

(i) First, to the Operating Account an amount set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the
Operation and Maintenance Expenses then due and payable or to become due and
payable within the next 30 days, net of any surplus remaining in the Operating
Account from prior deposits of funds therein;

 

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(ii) Second, after making the withdrawal and transfer above, to the Borrower in
an amount set forth on the Executed Withdrawal/Transfer Certificate and
certified therein to be equal to any Emergency Capital Expenditures, provided,
that the Borrower may request withdrawals from the Revenue Account for the
purposes of making Emergency Capital Expenditures on any date other than a
Monthly Transfer Date upon delivery of an Executed Withdrawal/Transfer
Certificate and receipt of the written approval of the Agent and the Independent
Engineer;

 

(iii) Third, after making each applicable withdrawal and transfer above, to each
Secured Party entitled thereto, all fees, costs, indemnities and expenses and
unscheduled payments (other than prepayments of principal (and interest thereon)
of Loans) then due and payable to such Person in accordance with the terms of
the Financing Documents;

 

(iv) Fourth, after making each applicable withdrawal and transfer above, to the
Debt Service Accrual Account, an amount set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to (A)
one-sixth (1/6th) of the Debt Service in respect of the Secured Obligations due
on the immediately succeeding Principal Payment Date and (B) all other regularly
scheduled Debt Service due or to become due and payable in the next succeeding
30-day period;

 

(v) Fifth, after making each applicable withdrawal and transfer above, to the
Debt Service Reserve Account, an amount set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to the amount
equal to the difference, if any, between the amount on deposit in the Debt
Service Reserve Account and the Required Debt Service Reserve Amount;

 

(vi) Sixth, after making each applicable withdrawal and transfer above, to the
Income Tax Reserve Account an amount set forth on the Executed
Withdrawal/Transfer Certificate and certified therein to be equal to one third
of the amount that would be due as a quarterly estimated payment in respect of
federal income tax and state income and franchise tax liability that would have
accrued if the Borrower were a corporation subject to federal income tax and
state income and franchise tax; provided that in the case of the fourth calendar
quarter, such estimated payment will be adjusted to take into account any
increase or decrease in the estimated federal and state income and franchise tax
liability of the immediately preceding annual tax reporting period;

 

(vii) Seventh, after making each applicable withdrawal and transfer above, to
the Borrower in the amount set forth on the Executed Withdrawal/Transfer
Certificate, any Permitted Capital Expenditures described in paragraph (b) of
the definition thereof; and

 

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(viii) Eighth, after making each applicable withdrawal and transfer above, to
the Distribution Account an amount set forth on the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to the full remaining amount on
deposit in the Revenue Account.

 

4.03 Operating Account.

 

(a) Deposits. There shall be deposited to the Operating Account the amounts
distributed from the Revenue Account pursuant to Sections 4.01(b)(iii),
4.02(b)(i) and Section 4.02(c)(i) above.

 

(b) Withdrawals from the Operating Account. Subject to Section 3.05, all amounts
from time to time on deposit in the Operating Account shall be available at all
times to the Borrower to be applied solely for the payment when due and payable
of Operation and Maintenance Expenses. Upon the receipt of a Payment
Instruction, the Collateral Agent shall transfer funds from the Operating
Account on the date (provided that the date specified for payment must be at
least one (1) Business Day following receipt by the Collateral Agent), in the
amount and to the Person or account specified therein.

 

4.04 Debt Service Accrual Account.

 

(a)Deposits to the Debt Service Accrual Account. There shall be deposited to the
Debt Service Accrual Account (i) the amounts distributed from the Revenue
Account pursuant to Section 4.02(c)(iv), (ii) the amounts transferred from time
to time from the Debt Service Reserve Account pursuant to Section 4.05(b), (iii)
any amounts contributed from time to time by the Borrower, any Pledgor or any
other Person for the purposes of paying Debt Service and (iv) all other amounts
from time to time paid to the Collateral Agent in respect of prepayments of the
Secured Obligations including, without limitation, the net available amount of
all sales of assets not otherwise permitted pursuant to Section 8.11(a) of the
Credit Agreement.

 

(b) Withdrawals from the Debt Service Accrual Account.

 

(i) On each Semi-Annual Date or Principal Payment Date as applicable, amounts on
deposit in the Debt Service Accrual Account shall be applied (to the extent then
available) by the Collateral Agent in payment of all Debt Service in respect of
the Secured Obligations due and payable as of such date;

 

(ii) On any date on which a prepayment in respect of the Secured Obligations
pursuant to the terms of this Agreement or the Credit Agreement is scheduled to
be made, amounts on deposit in the Debt Service Accrual Account in respect of
such prepayment shall be applied by the Collateral Agent in payment or
prepayment of all such Secured Obligations;

 

(iii) On each Monthly Transfer Date, the Collateral Agent shall, provided (A) it
has received an Executed Withdrawal/Transfer Certificate in

 

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relation thereto and (B) after giving effect to such withdrawal, amounts on
deposit in the Debt Service Accrual Account shall be equal to the Required
Accrual Amount, make the following withdrawals and transfers of amounts to the
extent then available in the Debt Service Accrual Account, as specified in and
in accordance with such Executed Withdrawal/Transfer Certificate in the
following order of priority:

 

(I) First, regularly scheduled payment to each counterparty to a Permitted Swap
Agreement an amount set forth in the Executed Withdrawal/Transfer Certificate
and certified therein to be equal to all amounts due and payable in respect of
the Permitted Swap Agreements;

 

(II) Second, after making the withdrawals and transfers above, for payment to
each provider thereof an amount set forth in the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to all amounts due and payable in
respect of all Permitted Indebtedness described in Section 8.16(a)(ii) of the
Credit Agreement;

 

(III) Third, after making the withdrawals and transfers above, for payment to
each provider thereof an amount set forth in the Executed Withdrawal/Transfer
Certificate and certified therein to be equal to all amounts due and payable in
respect of all other Permitted Indebtedness.

 

4.05 Debt Service Reserve Account.

 

(a) Deposits. There shall be deposited to the Debt Service Reserve Account the
amounts distributed pursuant to Section 4.01(c)(v) and Section 4.02(c)(v) above.

 

(b) Withdrawals from the Debt Service Reserve Account. If, on any date on which
the Debt Service in respect to Secured Obligations is due and payable, the
amounts on deposit in the Debt Service Accrual Account are not sufficient to pay
the full amount of such Debt Service then due and payable, the Collateral Agent
shall withdraw from the Debt Service Reserve Account an amount equal to such
deficiency and transfer such amounts to the Debt Service Accrual Account to be
applied in payment thereof.

 

4.06 Income Tax Reserve Account.

 

(a) Deposits to the Income Tax Reserve Account. There shall be deposited to the
Income Tax Reserve Account the amounts distributed from the Revenue Account
pursuant to Section 4.02(c)(vi) above.

 

(b) Withdrawals from the Income Tax Reserve Account. Subject to Section 3.05,
all amounts from time to time on deposit in the Income Tax Reserve Account shall
be available on a quarterly basis to the Borrower for distribution to the
Pledgors by delivery of an Executed Withdrawal/Transfer Certificate to the
Collateral Agent instructing that amounts be paid to the Pledgors entitled to
payment therefor.

 

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4.07 Distribution Account.

 

(a) Deposits to the Distribution Account. There shall be deposited in the
Distribution Account the amounts distributed from the Revenue Account pursuant
to Sections 4.01(g) and 4.02(c)(viii) above.

 

(b) Withdrawals from the Distribution Account. Subject to Section 3.05, all
amounts from time to time on deposit in the Distribution Account shall be
available to the Borrower on each Quarterly Date for distribution to the
Pledgors or for funding of Permitted Capital Expenditures, provided that (i)
such distribution is a permitted distribution pursuant to Section 8.12 of the
Credit Agreement (a “Permitted Distribution”) and (ii) the Borrower shall have
delivered to the Collateral Agent an Executed Withdrawal/Transfer Certificate
with respect to such amounts to the Collateral Agent together with a
Distribution Certificate in form and substance acceptable to the Administrative
Agent.

 

(c) Capacity Reservation Fees. Notwithstanding the foregoing provisions of this
Section 4.07, all amounts transferred to the Distribution Account pursuant to
Section 4.01(g) shall be available to the Borrower for distribution to the
Pledgors on any Monthly Transfer Date following the Funding Date, provided that
(i) no Event of Default has occurred and is continuing and (ii) the Borrower
shall have delivered to the Collateral Agent an Executed Withdrawal/Transfer
Certificate with respect to such amounts to the Collateral Agent together with a
Distribution Certificate in form and substance acceptable to the Administrative
Agent.

 

4.08 Insurance Proceeds Account.

 

(a)Deposits to the Insurance Proceeds Account. The Borrower shall deposit or
shall cause to be deposited in the Insurance Proceeds Account the Net Available
Amount of all Loss Proceeds in respect of any Event of Loss (including any
amounts, instruments or proceeds received in respect of any Event of Taking) to
which the Borrower or the Collateral Agent is entitled. If any such amounts are
remitted to the Borrower, the Borrower shall hold such amounts in trust for the
Collateral Agent and shall, as promptly as possible after the receipt thereof,
remit such amounts to the Collateral Agent for deposit in the Insurance Proceeds
Account, with any necessary endorsements.

 

(b) Withdrawals from the Insurance Proceeds Account. Subject to Section 3.05,
funds on deposit in the Insurance Proceeds Account shall be applied from time to
time by the Collateral Agent for payments in respect of mandatory prepayment of
the Loans, for Restoration or to the Borrower in the manner set forth in clauses
(i) through (vi) (inclusive) below.

 

(i) Compromise, Adjustment or Settlement.

 

(A) To the extent not inconsistent with the EPC Contract, the Administrative
Agent (in consultation with the Independent Engineer) shall be entitled at its
option to participate in any compromise, adjustment

 

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or settlement in connection with any Event of Loss under any policy or policies
of insurance or any proceeding with respect to any Condemnation of the Property
of the Borrower in excess of $5,000,000. The Borrower shall, within 30 days
after the request therefore, reimburse the Administrative Agent for all
reasonable out-of-pocket expenses (including reasonable attorneys’ and experts’
fees) incurred by the Administrative Agent in connection with such
participation.

 

(B) Unless the Administrative Agent notifies the Borrower of its intention not
to participate in any compromise, adjustment or settlement in accordance with
clause (A) above, the Borrower shall not make any compromise, adjustment or
settlement in connection with any Event of Loss under any policy or policies of
insurance or any proceeding with respect to any Condemnation of the Property of
the Borrower in excess of $5,000,000 without the approval of the Administrative
Agent (which shall not be unreasonably withheld or delayed). The Borrower shall
diligently pursue all claims and rights to compensation against all relevant
insurers and/or Government Authorities, as applicable, in respect of any Event
of Loss.

 

(ii) Occurrence of Event of Loss; Loss Proceeds.

 

(A) If an Event of Loss shall occur with respect to any Collateral, the Borrower
(I) shall diligently pursue all of its rights to compensation against any person
with respect to such Event of Loss and (II) shall not compromise, settle or
consent to the settlement of any claim against any Person with respect to such
Event of Loss except in accordance with the provisions of this Section 4.08(b).

 

(B) Subject to the other provisions of this Agreement, in the event that the Net
Available Amount of such Loss Proceeds in respect of any Event of Loss that
occurs following Substantial Completion is $25,000,000 or less, the Collateral
Agent shall, upon receipt of an Executed Withdrawal/Transfer Certificate with
respect thereto either (x) make such funds available to the Borrower for payment
directly from the Insurance Proceeds Account for the purpose of Restoring the
Affected Property or (y) (1) transfer such funds to the Debt Service Accrual
Account for prepayment of the Loans or (2) provided that the Borrower and the
Administrative Agent shall have received a certificate of the Independent
Engineer certifying that the failure to Restore the Affected Property could not
reasonably be expected to result in a Material Adverse Effect, to or as directed
by the Borrower for any purpose in its sole discretion; provided, further,
however, that, if the Borrower has not delivered an Executed Withdrawal/Transfer
Certificate with respect to such Loan Proceeds within 90 days of the receipt
thereof by the Collateral Agent, the Collateral Agent shall transfer such funds
to the Collateral Agent for prepayment of Secured Obligations in accordance with
Section 4.08(b)(vi).

 

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(C) Subject to Section 4.08(b)(iii) and the other provisions of this Agreement,
in the event that the Net Available Amount of such Loss Proceeds with respect to
any Event of Loss that (I) occurs prior to Substantial Completion is greater
than $5,000,000 or (II) occurs following Substantial Completion is greater than
$25,000,000, the Collateral Agent shall make such funds available to the
Borrower for payment directly from the Insurance Proceeds Account for the
purpose of Restoring the Affected Property in accordance with Section
4.08(b)(iii) below.

 

(iii) Restoration. Amounts to be made available to the Borrower from the
Insurance Proceeds Account to be applied to the Restoration of the Affected
Property of the Project following an Event of Loss (“Restoration Work”) shall,
be remitted to or as directed by the Borrower by the Collateral Agent, subject
to the satisfaction of the following conditions:

 

(A) the Borrower has delivered to the Independent Engineer, the Administrative
Agent and the Collateral Agent plans and specifications for the Restoration
Work, including reasonable estimates of the costs and time required to complete
such Restoration Work and copies of all proposed construction or other contracts
in connection therewith in form and substance reasonably acceptable to the
Administrative Agent (in consultation with the Independent Engineer) (the
“Restoration Plan”);

 

(B) the Restoration Plan shall provide for Restoration Work that is technically
feasible and that will reasonably be expected to, upon completion thereof,
result in the Project being financially viable and able to pay Operation and
Maintenance Expenses and Debt Service;

 

(C) the Restoration Plan shall provide for the Restoration Work to be completed
within the period covered by business interruption insurance, plus any
additional period agreed between the Borrower and the Administrative Agent
(after consultation with the Independent Engineer and the Insurance Advisor) for
a cost not to exceed the amount on deposit in the Insurance Proceeds Account in
respect of such Event of Loss together with any amounts previously paid directly
to the EPC Contractor pursuant to the EPC Contract and any other Committed
Available Amounts;

 

(D) the Independent Engineer shall have delivered to the Administrative Agent
and the Collateral Agent a certificate to the effect that the amount of Loss
Proceeds with respect to such Event of Loss, which has been deposited in the
Insurance Proceeds Account together with any business interruption proceeds
relating thereto, any amounts previously paid directly to the EPC Contractor
pursuant to the EPC

 

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Contract and any Committed Available Amounts in respect of the Insurance
Proceeds Account are sufficient during the period of time that is required, in
the opinion of the Independent Engineer, to Restore the Affected Property to (I)
Restore the Affected Property, (II) pay all Operation and Maintenance Expenses,
(III) pay all Debt Service and (IV) in the case of any Event of Loss prior to
Substantial Completion, achieve Substantial Completion in accordance with the
Construction Budget and Schedule and to perform the Borrower’s obligations under
the TUAs then in effect; provided, that if the Independent Engineer is unable to
provide such a certificate, consent of the Majority Lenders shall have been
received;

 

(E) no Default or Event of Default could reasonably be expected to occur during
Restoration as a consequence of Restoration Work, assuming that Restoration Work
on the Project proceeds in accordance with the Restoration Plan;

 

(F) the Property constituting the Restoration Work shall be subject to the Lien
of the Security Documents (whether by amendment to the Security Documents or
otherwise) free and clear of all Liens other than Permitted Liens;

 

(G) the Borrower has delivered a certificate of an Authorized Officer of the
Borrower certifying that the conditions set out in paragraphs (iii)(B), (E) and
(F) above have been satisfied;

 

(H) each request by the Borrower for a disbursement of funds from the Insurance
Proceeds Account shall be made on at least 10 days’ prior written notice to the
Collateral Agent and shall be accompanied by: (I) a certificate of each of an
Authorized Officer of the Borrower and of the Independent Engineer that: (w) all
of the Restoration Work theretofore completed has been done substantially in
compliance with the Restoration Plan therefor; (x) the sum requested is required
to pay for costs incurred in connection with such Restoration Work (giving a
brief description of the services and materials provided in connection with such
Restoration Work and attaching all invoices relating thereto); (y) the sum
requested, when added to the amount of funds previously paid out of the
Insurance Proceeds Account in respect of such Restoration Work and all funds
paid directly to the EPC Contractor pursuant to the EPC Contract, does not
exceed the cost of the Restoration Work done as of the date of such certificate;
and (z) the amount of funds remaining in the Insurance Proceeds Account in
respect of such Restoration Work together with all amounts previously paid
directly to the EPC Contractor pursuant to the EPC Contract and any Committed
Available Amounts in respect of the Insurance Proceeds Account will be
sufficient to complete the Restoration Work (giving an estimate of the remaining
cost of such completion in such reasonable detail as the Collateral Agent may
require); (II) a certificate of

 

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an Authorized Officer of the Borrower certifying that no Default or Event of
Default shall have occurred and is continuing at such date; (III) an Executed
Withdrawal/Transfer Certificate; and (IV) such other certificates, documents or
other information as the Collateral Agent shall reasonably require.

 

(iv) Completion of Restoration Work. Once such Restoration Work is complete
(such completion to be evidenced by a certificate of an Authorized Officer of
the Borrower and a certificate of the Independent Engineer delivered to the
Collateral Agent), any remaining relevant Loss Proceeds shall be deposited in
the Revenue Account for application in accordance with this Agreement.

 

(v) Abandonment of or Failure to Pursue Restoration Work. If any Secured Party
shall in good faith reasonably determine and notify the Collateral Agent in
writing that (A) the Borrower has ceased to carry on or has suspended all or
substantially all of its activities in connection with the Restoration Work or
has otherwise abandoned the Restoration Work for a period of 90 days or more,
other than where cessation or suspension is due to an event of force majeure and
the Borrower is using commercially reasonable efforts to commence or recommence
such Restoration Work, (B) the Borrower has otherwise failed to pursue the
Restoration Work substantially in accordance with the Restoration Plan for 90 or
more days or (C) the Borrower has failed to deliver to the Collateral Agent and
the Administrative Agent a Restoration Plan within 90 days of the deposit of the
Loss Proceeds in respect of an Event Loss, then the Collateral Agent shall
promptly prepay the Secured Obligations in accordance with clause (vi) below.

 

(vi) Application to Secured Obligations. In the event that funds on deposit in
the Insurance Proceeds Account are to be applied to the prepayment of Secured
Obligations pursuant to this Section 4.08(b), the Borrower shall prepay the
Loans on the date falling two Business Days after the date that such amounts are
to be so applied pursuant to this Section 4.08(b) (such date, the “Loss Proceeds
Prepayment Date”) in an amount equal to the Net Available Amount of the Loss
Proceeds received in respect of the applicable Event of Loss minus any amounts
withdrawn from the Insurance Proceeds Account in respect of such Event of Loss
prior to such date in accordance with clauses (i) through (v) of this Section
4.08(b). In accordance with the preceding sentence, the Borrower shall instruct
the Collateral Agent to withdraw, one Business Day prior to the Loss Proceeds
Prepayment Date, all funds on deposit in the Insurance Proceeds Account and
transfer such funds to the Secured Parties for payment of the Secured
Obligations in accordance with the relevant Financing Documents, ratably (based
on the outstanding principal amount of such Secured Obligations).

 

(vii) Cooperation. Each of the Administrative Agent and the Borrower hereto
hereby agrees to use commercially reasonable efforts to fulfill the conditions
set forth in Section 4.08(b)(iii) within the time periods set forth in
Attachment O of the EPC Contract.

 

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ARTICLE V

 

AGREEMENTS WITH AGENTS

 

5.01 Stamp and Other Similar Taxes. The Borrower shall pay at any time all stamp
duty, registration taxes, fees or charges and other duties, levies, charges and
fees which may be assessed, levied or collected by any jurisdiction in
connection with this Agreement, any other Financing Document or the attachment
or perfection of the Lien granted to the Collateral Agent in any Depository
Collateral and shall from time to time upon demand by the Administrative Agent
indemnify each of the Administrative Agent, the Collateral Agent, the Securities
Intermediary, each receiver appointed under this Agreement and each of the other
Secured Parties against any liabilities, costs, claims, expenses, penalties and
interest resulting from any failure to pay or any delay in paying any such duty
or tax (except to the extent that such liabilities, costs, claims, expenses,
penalties and interest result from the gross negligence or willful misconduct of
any such Person as finally determined by a court of competent jurisdiction).

 

5.02 Filing Fees, Excise Taxes, Etc. The Borrower agrees to pay or to reimburse
the Administrative Agent and the Collateral Agent on demand for any and all
amounts in respect of all search, filing and recording fees, taxes, excise
taxes, sales taxes and other similar imposts which may be payable or determined
to be payable in respect of the execution, delivery, performance and enforcement
of this Agreement and each other Financing Document to which either such Person
is a party and agrees to hold each such Person harmless from and against any and
all liabilities, costs, claims, expenses, penalties and interest with respect to
or resulting from any delay in paying or omission to pay such taxes and fees
(except to the extent that such liabilities, costs, claims, expenses, penalties
and interest result from the gross negligence or willful misconduct of any such
Person as finally determined by a court of competent jurisdiction).

 

ARTICLE VI

 

THE COLLATERAL AGENT

 

6.01 General. The provisions of this Article VI are solely for the benefit of
the Secured Parties, the Administrative Agent and the Collateral Agent and,
except to the extent expressly provided in this Article VI, the Borrower shall
have no rights or obligations under this Article VI against the Collateral
Agent, the Administrative Agent or any other Secured Party; provided that the
Collateral Agent shall be liable to the Borrower for the Collateral Agent’s
gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction. Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting the eligibility
of or affording protection to the Collateral Agent shall be subject to the
provision of this Article VI.

 

6.02 Reliance by the Collateral Agent. The Collateral Agent (to the extent
indicated in Section 2.01(c)) shall be entitled to rely upon any officer’s
certificate of an authorized officer of the Borrower, the Administrative Agent
or any other relevant certificate, notice or other document (including any
cable, telegram or telecopy) believed by it to be

 

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genuine and to have been signed or sent by or on behalf of the proper Person or
Persons, and shall have no liability for its actions taken thereupon, unless due
to the Collateral Agent’s willful misconduct or gross negligence as finally
determined by a court of competent jurisdiction. Without limiting the foregoing,
the Collateral Agent shall be required to make payments to the Agents, the
Secured Parties or other Persons only as set forth herein. The Collateral Agent
shall be fully justified in failing or refusing to take any action under this
Agreement (a) if such action would, in the opinion of the Collateral Agent, be
contrary to applicable law or the terms of this Agreement, (b) if such action is
not specifically provided for in this Agreement and it shall not have received
any such advice or concurrence of the Administrative Agent or the Borrower as it
deems appropriate or (c) if, in connection with the taking of any such action
that would constitute an exercise of remedies under this Agreement or the Credit
Agreement, it shall not first be indemnified to its satisfaction or as required
by this Agreement or the Credit Agreement against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement in accordance with
any Executed Withdrawal/Transfer Certificate, any Remedies Direction or other
instruction of the Borrower or the Administrative Agent (in each case to the
extent such Person is expressly authorized hereunder to direct the Collateral
Agent to take or refrain from taking such action), and such action taken or
failure to act pursuant thereto shall be binding upon the Borrower, the Agents
and the Secured Parties. In the event that the Collateral Agent is required to
perform any action on a particular date only following the delivery of an
officer’s certificate or other document, the Collateral Agent shall be fully
justified in failing to perform such action if it has not first received such
officer’s certificate or other document and shall be fully justified in
continuing to fail to perform such action until such time as it has received
such officer’s certificate or other document.

 

6.03 Court Orders. The Collateral Agent is hereby authorized to obey and comply
with all writs, orders, judgments or decrees issued by any court or
administrative agency affecting any money, documents or things held by the
Collateral Agent. The Collateral Agent shall not be liable to any of the parties
hereto or any other Secured Party, their successors, heirs or personal
representatives by reason of the Collateral Agent’s compliance with such writs,
orders, judgments or decrees, notwithstanding such writ, order, judgment or
decree is later reversed, modified, set aside or vacated.

 

6.04 Resignation or Removal. Subject to the appointment and acceptance of a
successor the Collateral Agent as provided below, the Collateral Agent may
resign at any time by giving notice thereof to the parties hereto, and the
Collateral Agent may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint, with the consent of the Borrower (unless a
Default or an Event of Default has occurred and is continuing), such consent not
to be unreasonably withheld or delayed, a successor Collateral Agent. Upon the
acceptance of any appointment as Collateral Agent hereunder by a successor
Collateral Agent, such successor Collateral Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall be discharged from its
duties and obligations

 

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hereunder. If no successor Collateral Agent shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within 30 days
following the delivery by the Collateral Agent of a notice of resignation, then
the retiring Collateral Agent, in its discretion, may tender into the custody of
a court of competent jurisdiction all assets then held by it hereunder, and
thereupon shall be discharged from its duties hereunder. After the retiring
Collateral Agent’s resignation or removal hereunder as the Collateral Agent, the
provisions of this Article VI shall continue in effect for its benefit in
respect of any actions taken, suffered or omitted while it was acting as
Collateral Agent. A retiring Collateral Agent shall also be deemed to retire as
the Securities Intermediary, and any successor Collateral Agent shall be deemed
to be the successor Securities Intermediary.

 

6.05 Exculpatory Provisions.

 

(a) Recitals; Value of Collateral; Etc. Neither the Collateral Agent nor any of
its affiliates shall be responsible to the Borrower, any other Agent or any
Secured Party for: (i) any recitals, statements, representations or warranties
made by the Borrower contained in this Agreement or any other Financing Document
or in any certificates or other document referred to or provided for in, or
received by any Secured Party under, this Agreement or any other Financing
Document; (ii) the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Financing Document or any other
document referred to or provided for herein or therein or the perfection,
priority or validity of any of the Liens created by the Financing Documents; or
(iii) any failure by the Borrower to perform its obligations hereunder or
thereunder.

 

(b) Performance by the Borrower. The Collateral Agent shall not be required to
ascertain or inquire as to the performance by the Borrower of any of its
obligations under any Financing Document or any other document or agreement
contemplated hereby or thereby.

 

(c) Initiation of Litigation, Etc. The Collateral Agent shall not be: (i)
required to initiate or conduct any litigation or collection proceeding
hereunder or under any other Financing Document; or (ii) responsible for any
action taken, suffered or omitted to be taken by it hereunder (except for its
own gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction).

 

(d) Insurance and Taxes on Depository Collateral. The Collateral Agent shall not
be liable or responsible for insuring the Depository Collateral or for the
payment of taxes, charges, assessments or liens upon the Depository Collateral
or otherwise as to the maintenance of the Depository Collateral.

 

(e) Personal Liability of the Collateral Agent. The Collateral Agent shall not
be liable for any action taken, suffered or omitted to be taken by it in
accordance with this Agreement or any other Financing Document or any
instruction or direction given to it in accordance with the terms or in
furtherance of this Agreement or any other Financing Document unless arising out
of its own gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction.

 

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(f) Limitation of Liability. No provision of this Agreement shall be construed
to relieve the Collateral Agent from liability for its own grossly negligent
action, its own grossly negligent failure to act, or its own willful misconduct
as finally determined by a court of competent jurisdiction. The Collateral Agent
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Administrative Agent and except to the
extent of income or other gain on investments that are deposits in or
certificates of deposits or other obligations of the Collateral Agent in its
commercial capacity and income or other gain actually received by the Collateral
Agent on Permitted Investments.

 

(g) Indemnification. The Borrower shall indemnify the Collateral Agent and the
Securities Intermediary against any liabilities, costs, claims, expenses,
penalties and interest by reason of any claims of third parties (other than the
Lenders) resulting from the execution, delivery, enforcement, performance or
administration of any transactions contemplated hereby (except to the extent
that such liabilities, costs, claims, expenses, penalties and interest result
from the gross negligence or willful misconduct of the Collateral Agent or the
Securities Intermediary as finally determined by a court of competent
jurisdiction).

 

6.06 Fees; Expenses. The Collateral Agent shall be compensated for its services
hereunder in accordance with the agreed fee schedule attached hereto as Schedule
II. The Borrower agrees to pay or reimburse all reasonable out-of-pocket
expenses of the Collateral Agent (including reasonable fees and expenses for
legal services) in respect of, or incident to, the preparation, delivery,
execution, administration or enforcement of any of the provisions of this
Agreement or in connection with any amendment, waiver or consent relating to
this Agreement.

 

6.07 Reports; Documents. The Collateral Agent shall provide to the Borrower and
the Administrative Agent, who in turn shall promptly provide to the Secured
Parties, a monthly statement of all deposits to, disbursements from and interest
and earnings credited to each Collateral Account. The Administrative Agent has
delivered to the Collateral Agent a true and correct copy of the Credit
Agreement (including Appendix A thereto) as in effect on the date hereof, and
from time to time shall deliver to the Collateral Agent any true and complete
copies of all amendments thereto.

 

ARTICLE VII

 

MISCELLANEOUS

 

7.01 No Waiver; Remedies Cumulative. No failure or delay on the part of any
party hereto or any Secured Party in exercising any right, power or privilege
hereunder and no course of dealing between parties hereto shall impair any such
right, power or privilege or operate as a waiver thereof. No single or partial
exercise by any party hereto or any Secured Party of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. The rights, powers
and remedies provided herein are cumulative and not exclusive of any fights,
powers or remedies which any party thereto would otherwise have. No notice to

 

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or demand by any party hereto or any Secured Party on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of any party hereto
or any Secured Party to any other or further action in any circumstances without
notice or demand.

 

7.02 Notices. All notices, payment instructions, Remedies Directions and other
communications required or permitted to be given hereunder shall be (a) in
writing and be considered as properly given and be deemed effective in
accordance with Section 11.02 of the Credit Agreement; and (b) sent to a party
hereto at its address and contact number specified in Section 11.02 of the
Credit Agreement, or at such other address and contact number as is designated
by any party in a written notice to the other parties hereto; provided, that
with respect to determining whether any notice, payment instruction, Remedies
Direction or other communication to the Administrative Agent or the Collateral
Agent has been given hereunder, unless otherwise expressly provided herein, such
notice shall be deemed effectively given and received on the actual day of
receipt by the Administrative Agent or the Collateral Agent, as the case may be,
of such notice, payment instruction, Remedies Direction or other communication
at its designated office for delivery of notices.

 

7.03 Amendments. This Agreement may be amended or modified only by an instrument
in writing signed by each of the parties hereto.

 

7.04 Benefit of Agreement; Successors and Assigns. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that the
Borrower may not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and all Lenders.

 

(b) In the event that any Person becomes a counterparty to a Permitted Swap
Agreement and such Person has not previously executed a Secured Party Addition
Agreement in its capacity as a counterparty to a Permitted Swap Agreement, such
Person shall execute and deliver to the Collateral Agent: (i) a Secured Party
Addition Agreement and (ii) such other documentation as the Collateral Agent may
reasonably request. Upon execution and delivery of a Secured Party Addition
Agreement, a counterparty to a Permitted Swap Agreement shall be deemed to be a
Secured Party for all purposes under the Financing Documents. In furtherance of
the foregoing, the counterparty to a Permitted Swap Agreement shall be deemed to
have agreed to be bound by the provisions of the Credit Agreement for the
limited purposes of indemnifying the Collateral Agent pursuant to Section 10.05
thereof (assuming for purposes of calculating such Person’s liability to make
payments on any indemnity claimed thereunder, that any net settlement amount
payable to such counterparty to a Permitted Swap Agreement is treated as such
Person’s outstanding principal amount of Loans).

 

7.05 Third-Party Beneficiaries. The covenants contained herein are made solely
for the benefit of the parties hereto, and successors and assigns of such
parties as specified herein, and shall not be construed as having been intended
to benefit any third-party not a party to this Agreement.

 

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7.06 Counterparts. This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which,
when executed and delivered, shall be effective for purposes of binding the
parties hereto, but all of which shall together constitute one and the same
instrument.

 

7.07 Effectiveness. This Agreement shall be effective on the date first above
written.

 

7.08 Entire Agreement. This Agreement and the other Financing Documents,
including the documents referred to herein, constitute the entire agreement and
understanding of the parties hereto, and supersede any and all prior agreements
and understandings, written or oral, of the parties hereto relating to the
subject matter hereof.

 

7.09 Severability. If any provision of this Agreement is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law:
(a) the other provisions of this Agreement shall remain in full force and effect
in such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (b) the
invalidity or unenforceability of any provision of this Agreement in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

 

7.10 Conflict with Other Agreements. Except as otherwise expressly provided
herein, the parties agree that in the event of any conflict between the
provisions of this Agreement (or any portion thereof) and the provisions of any
other Financing Document or any other agreement (other than the Credit
Agreement) now existing or hereafter entered into, the provisions of this
Agreement shall control. Except as otherwise expressly provided herein, the
event of any conflict between the provisions of this Agreement and the
provisions of the Credit Agreement, the provisions of the Credit Agreement shall
control. In the event that in connection with the establishment of any of the
Collateral Accounts with the Collateral Agent, the Borrower shall enter into any
agreement, instrument or other document with the Collateral Agent which has
terms that are in conflict with or inconsistent with the terms of this
Agreement, the terms of this Agreement shall control.

 

7.11 Dealings With the Borrower. Upon any application or demand (other than a
Payment Instruction) by the Borrower to the Collateral Agent to take or permit
any action under any of the provisions of this Agreement or any other Security
Document (including pursuant to a Withdrawal/Transfer Certificate), the Borrower
shall, furnish to the Collateral Agent a certificate (which may be part of the
Withdrawal/Transfer Certificate) signed by an authorized officer of the Borrower
stating that all conditions precedent, if any, provided for in this Agreement or
any other Security Document relating to the proposed action have been complied
with. In the case of any such application or demand as to which the furnishing
of specified documents is required by any provision of this Agreement or any
other Security Document relating to such particular application or demand, no
additional certificate or opinion need be furnished.

 

7.12 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial.
This Agreement shall be governed by, and construed in accordance with, the law
of the State of New York and the provisions of Section 11.18 and Section 11.19
of the Credit

 

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Agreement are hereby incorporated herein by reference, mutatis mutandis, as if
fully set out in this Agreement and each reference in any such Section of the
Credit Agreement to the “Agreement”, “herein”, “hereunder” and like terms shall
be deemed to refer to this Agreement, provided, however, that notwithstanding
anything in any Financing Document to the contrary, for purposes of the UCC, the
“security intermediary’s jurisdiction” (within the meaning of Section 8-110(e)
of the UCC) with respect to the Collateral Accounts is the State of New York.

 

7.13 Termination. Upon the Termination Date, this Agreement shall (except as
otherwise expressly set out herein) terminate and be of no further force and
effect; provided, that the obligations of the Borrower pursuant to Sections
6.05(e), (f) and (g), Section 6.06 and Section 7.12 shall survive the
Termination Date.

 

7.14 Reinstatement. This Agreement and the obligations of the Borrower hereunder
shall continue to be effective or be automatically reinstated, as the case may
be, if (and to the extent that) at any time payment and performance of the
Borrower’s obligations hereunder, or any part thereof, is rescinded or reduced
in amount, or must otherwise be restored or returned by any Agent or any other
Secured Party. In the event that any payment or any part thereof is so
rescinded, reduced, restored or returned, such obligations shall be reinstated
on the same terms and conditions applicable thereto prior to the payment of the
rescinded, reduced, restored or returned amount, and shall be deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

 

7.15 Attorney-In-Fact. For the purposes of allowing the Agents to exercise their
rights and remedies upon the occurrence and continuance of an Event of Default,
the Borrower irrevocably constitutes and appoints each Agent and any officer or
agent thereof, with full power of substitution as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Borrower and in the name of the Borrower or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any appropriate
action and to execute any document or instrument that may be necessary or
desirable to accomplish the purposes of this Agreement. Upon the occurrence and
continuance of an Event of Default, the Administrative Agent shall promptly
inform the Collateral Agent in writing that an Event of Default has occurred and
is continuing and that the Administrative Agent is exercising remedies under
this Section 7.15.

 

[SIGNATURES TO FOLLOW]

 

    - 32 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

SABINE PASS LNG, L.P. By:   Sabine Pass LNG – GP, Inc.,     its General Partner
By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

    - 33 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

HSBC BANK USA, NATIONAL

      ASSOCIATION,

      as Collateral Agent and Securities Intermediary By:  

 

--------------------------------------------------------------------------------

Name:     Title:     SOCIÉTÉ GÉNÉRALE,       as Administrative Agent By:  

 

--------------------------------------------------------------------------------

Name:     Title:    

 

    - 34 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE I

to Agreement

 

ACCOUNT NAMES AND NUMBERS

 

ACCOUNT NAME

--------------------------------------------------------------------------------

   ACCOUNT NO.

--------------------------------------------------------------------------------

(a)

   the Construction Account    10-878957      (i) the Construction Payment
Subaccount    10-878966      (ii) the Punchlist Retention Subaccount   
10-878958

(b)

   the Operating Account    10-878960

(c)

   the Debt Service Reserve Account    10-878962

(d)

   the Debt Service Accrual Account    10-878961

(e)

   the Income Tax Reserve Account    10-878963

(f)

   the Distribution Account    10-878964

(g)

   the Revenue Account    10-878959

(h)

   the Insurance Proceeds Account    10-878965

 

    - 35 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

SCHEDULE II

to Agreement

 

(Sabine Pass LNG, LP Project)

HSBC Bank USA, National Association as Collateral Agent

SCHEDULE OF FEES (Dated as of November 23, 2004)

 

Acceptance Fee                                        $10,000

 

This one-time fee covers the acceptance of our appointment, review and
consideration of all supporting documents, meetings with transaction parties,
consultation with attorney, and establishment of procedures required to perform
the services required by the governing documents.

 

This fee is payable at closing.

 

Annual Administrative Fee                                        $25,000

 

This fee covers the ordinary operational responsibilities of HSBC Bank USA,
National Association

 

This fee is payable at closing and annually thereafter.

 

Legal Fee   At cost, not to exceed $10,000

 

Out of Pocket                                       At Cost

 

These are expenses incurred by us on behalf of the Client to effectively service
this account on a day-to-day basis. If required, these include but are not
limited to: accountant and counsel fees, postage, stationery, express mail,
telephone and facsimile charges. These expenses are charged at cost. A detailed
explanation for each item will be included on all billing statements.

 

Bid Conditions

 

The fees set forth above are subject to change as circumstances warrant. The
Collateral Agent reserves the right to amend this Schedule of Fees or withdraw
as the proposed Collateral Agent pending review of the final documents and
agreement with respect to the duties, responsibilities and indemnification of
HSBC Bank USA. Any fees charged for services not specifically set forth in this
schedule will be assessed in amounts commensurate with services rendered. If the
transaction should fail to close, the Collateral Agent reserves the right to
charge its legal counsel fees and any out-of-pocket expenses. Notwithstanding
the foregoing, any changes to the fees set forth on this Schedule II shall be
made with the consent of the Borrower (which consent shall not be unreasonably
withheld).

 

    - 36 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT A

to Agreement

 

[Letterhead of the Company]

FORM OF WITHDRAWAL/TRANSFER CERTIFICATE

 

Date of this Withdrawal/Transfer Certificate: [                    ] Transfer
Date: [                    ]

 

HSBC Bank USA, National Association

    as Collateral Agent

452 Fifth Avenue

New York, NY 10018

Attn: Corporate Trust

 

Re: Sabine Pass LNG Project

 

Ladies and Gentlemen:

 

1. This Withdrawal/Transfer Certificate is delivered to you pursuant to the
Collateral Agency Agreement dated as of February 25, 2005 (as amended,
supplemented or modified and in effect from time to time, the “Collateral Agency
Agreement”) among HSBC Bank USA, National Association, in its capacity as
collateral agent (together with its successors and permitted assigns in such
capacity, the “Collateral Agent”) and securities intermediary, Société Générale,
in its capacity as administrative agent (the “Administrative Agent”) and Sabine
Pass LNG, L.P. (the “Company”). Reference is also made to Credit Agreement dated
as of February 25, 2005 (as amended, modified and supplemented and in effect
from time to time, the “Credit Agreement”) among the Company, each of the
lenders from time to time party to the Credit Agreement (the “Lenders”), the
Administrative Agent and the Collateral Agent. Capitalized terms used but not
defined herein shall have the respective meanings assigned thereto in the
Collateral Agency Agreement or, if not defined therein, in the Credit Agreement.

 

2. The undersigned has read and is familiar with the provisions of the
Collateral Agency Agreement and the other Financing Documents which are relevant
to the furnishing of this Withdrawal/Transfer Certificate. With respect to the
information in this Withdrawal/Transfer Certificate, the undersigned has made
such examination or investigation as was, in [his] [her] reasonable opinion,
necessary to enable [him] [her] to express an opinion as to the accuracy of such
information.

 

3. This Withdrawal/Transfer Certificate is being provided to you at least five
Business Days prior to the Transfer Date set out above (the “Proposed Transfer
Date”).

 

4. Construction Account; Cash Flow Waterfall

 

(a) The Company hereby requests that the amount set forth in column 1 of Annex
A-1 be transferred from the Construction Account to the applicable Collateral
Account or Person set forth on column 2 of Annex A-1 on the Proposed Transfer
Date (each such transfer, a “Construction Account Monthly Transfer”).

 

(b) On each date set forth in column 1 of Annex A-2 hereto (each such date, a
“Construction Secondary Withdrawal/Transfer Date”), the Company hereby requests
that the sum set forth in column 2 of Annex A-2 opposite such Construction
Account

 

    - 37 -   EXHIBIT K         TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Withdrawal/Transfer Date be withdrawn and transferred from the Collateral
Account identified in column 3 to the Collateral Account or Person set forth on
column 4 of Annex A-2 hereto on the applicable Construction Secondary
Withdrawal/Transfer Date (each such requested withdrawal and/or transfer as
described in any row appearing in Annex A-2 hereto, a “Construction Secondary
Withdrawal/Transfer”). Each Construction Secondary Withdrawal/Transfer marked
with an “*” constitutes a Payment Instruction as contemplated under the
Collateral Agency Agreement.

 

(c) Each Construction Account Monthly Transfer specified in Annex A-1 is to be
applied for the purpose described in column 3 of the row relating to such
Construction Account Monthly Transfer and each Construction Secondary
Withdrawal/Transfer specified in Annex A-2 is to be applied for the purpose
described in column 5 of the row relating to such Construction Secondary
Withdrawal/Transfer.

 

5. Revenue Account; Cash Flow Waterfall

 

(a) The Company hereby requests that the amount set forth in column 1 of Annex
A-3 be transferred from the Revenue Account to the applicable Collateral Account
or Person set forth on column 2 of Annex A-3 on the Proposed Transfer Date (each
such transfer, a “Revenue Account Monthly Transfer”).

 

(b) On each date set forth in column 1 of Annex A-4 hereto (each such date, a
“Revenue Account Secondary Withdrawal/Transfer Date”), the Company hereby
requests that the sum set forth in column 2 of Annex A-4 opposite such Revenue
Account Secondary Withdrawal/Transfer Date be withdrawn and transferred from the
Collateral Account identified in column 3 to the Collateral Account or Person
set forth on column 4 of Annex A-4 hereto on the applicable Revenue Account
Withdrawal/Transfer Date (each such requested withdrawal and/or transfer as
described in any row appearing in Annex A-4 hereto, a “Revenue Account Secondary
Withdrawal/Transfer”). Each Revenue Account Secondary Withdrawal/Transfer marked
with an “*” constitutes a Payment Instruction as contemplated under the
Collateral Agency Agreement.

 

(c) Each Revenue Account Monthly Transfer specified in Annex A-3 is to be
applied for the purpose described in column 3 of the row relating to such
Revenue Account Monthly Transfer and each Revenue Secondary Withdrawal/Transfer
specified in Annex A-4 is to be applied for the purpose described in column 5 of
the row relating to such Revenue Secondary Withdrawal/Transfer.

 

6. Payment of Project Costs

 

(a) The amount to be transferred from the Construction Account to the account of
[the EPC Contractor] [or specify other Person or account] on the Proposed
Transfer Date is $[            ], which amount [together with amounts to be
transferred to the Construction Payment Subaccount from the Revenue Account for
the payment of Project Costs on the proposed Withdrawal/Transfer Date]5 is equal
to the Project Costs then due and payable.

 

     - 38 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

[(b) The amount to be transferred from the Revenue Account to the Construction
Payment Subaccount on the Proposed Transfer Date is $[            ], which
amount is equal to the Project Costs that will become due and payable within a
30-day period from the Transfer Date stated above not otherwise funded from the
Construction Account pursuant to paragraph 6(a) above.]6

 

[(c) The amount to be transferred from the Construction Account to the
Construction Payment Subaccount on the Proposed Transfer Date is
$[            ], which amount is equal to the Project Costs that will become due
[within a 30-day period from the Transfer Date stated above]7 [on or prior to
Final Completion]8.

 

[(d) The amount to be transferred from the Construction Account to the Punchlist
Retention Subaccount on the Proposed Transfer Date is $[            ], which
amount [together with amounts to be transferred from the Revenue Account to the
Punchlist Retention Subaccount pursuant to paragraph 6(e) below] is equal to the
total cost of the Punchlist items owing to, and as notified by, the EPC
Contractor to the Company pursuant to Section 11.6B of the EPC Contract.]9

 

[(e) The amount to be transferred from the Revenue Account to the Punchlist
Retention Subaccount on the Proposed Transfer Date is $[            ], which
amount is equal to the difference between the proceeds of the final Loan under
the Credit Agreement and the cost of Punchlist items notified by the EPC
Contractor to the Borrower pursuant to Section 11.6B of the EPC Contract.]10

 

(f) The amount to be transferred from the Punchlist Retention Subaccount on the
Construction Secondary Withdrawal/Transfer Date is $[            ], which amount
is equal to the cost of punchlist items then due and payable.11

 

7. Payment of Operation and Maintenance Expenses

 

(a) The amount to be transferred from the Revenue Account to the Operating
Account on the Proposed Transfer Date is $[            ], which amount [together
with amounts to be transferred to the Operating Account from the Construction
Account for the payment of Operation and Maintenance Expenses on the Proposed
Transfer Date]12 is equal to the Operation and Maintenance Expenses then due and
payable or to become due

 

--------------------------------------------------------------------------------

5 Insert as applicable.

6 Insert only to the extent that amounts on deposit in Construction Account are
insufficient to cover all Project Costs due and payable on the proposed
Withdrawal/Transfer Date.

7 Insert only with respect to transfers occurring prior to Final Funding Date.

8 Insert only with respect to transfers occurring on or after Final Funding
Date.

9 Insert if applicable.

10 Insert if applicable.

11 Insert if applicable.

12 Insert as applicable.

 

     - 39 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

and payable within the next 30 days, net of any surplus remaining in the
Operating Account from prior deposits therein and [without duplication of any
amounts transferred pursuant to paragraph 7(b) below]13.

 

[(b) The amount to be transferred from the Construction Account to the Operating
Account on the Proposed Transfer Date is $[            ], which amount is equal
to the Operation and Maintenance Expenses then due and payable or to become due
and payable within the next 30 days not otherwise funded from the Revenue
Account pursuant to paragraph 7(a) above and net of any surplus remaining in the
Operating Account from prior deposits therein.]14

 

(c) The current balance on deposit in the Operating Account is $[            ].

 

8. Payments of Debt Service.

 

[(a) The amount to be transferred from the Revenue Account to the Debt Service
Accrual Account on the on the Proposed Transfer Date is $[            ], which
amount is equal to (I) one-sixth (1/6th) of the Debt Service in respect of the
Secured Obligations due on the immediately succeeding Principal Payment Date and
(II) all other regularly scheduled Debt Service due or to become due and payable
in the next succeeding 30-day period.]15

 

[(b) The amount to be transferred from the Debt Service Accrual Account on the
Proposed Transfer Date is $[            ], which amount is equal to amount due
and payable in respect of the Permitted Swap Agreements.]16

 

[(c) The amount to be transferred from the Debt Service Accrual Account on the
Proposed Transfer Date is $[            ], which amount is equal to amount due
and payable in respect of all Permitted Indebtedness described in Section
8.16(b) of the Credit Agreement.]17

 

[(d) The amount to be transferred from the Debt Service Accrual Account on the
Proposed Transfer Date is $[            ], which amount is equal to amount due
and payable in respect of all Permitted Indebtedness other than the Permitted
Indebtedness described in Sections 8.16(a) and 8.16(b) of the Credit
Agreement.]18

 

9. Debt Service Reserve Account. The amount to be transferred from the Revenue
Account to the Debt Service Reserve Account on the Proposed Transfer Date is
$[            ], which amount is equal to the excess of (i) the Required Debt
Service Reserve Amount minus amounts then on deposit in the Debt Service Reserve
Account on the Proposed Transfer Date.]19

 

--------------------------------------------------------------------------------

13 Insert as applicable prior to the Term Conversion Date.

14 Insert as applicable.

15 Insert if applicable.

16 Insert if applicable.

17 Insert if applicable.

18 Insert if applicable.

19 Insert if applicable.

 

     - 40 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

[10. Payment of Income Tax. The amount to be transferred from the Revenue
Account to the Income Tax Reserve Account on the Proposed Withdrawal/Transfer
Date is $[            ], which amount is equal to one third (1/3rd) of the
amount that would be due as a quarterly estimated payment in respect of federal
income tax and state income and franchise tax liability that would have accrued
if the Company were a corporation subject to federal income tax and state income
and franchise tax [plus the amount, if necessary, to take into account an
increase in the estimated federal and state income tax and franchise liability
of the immediately preceding annual tax reporting period] net of any surplus
then on deposit in the Income Tax Reserve Account.]20

 

 11. Emergency Capital Expenditures. The amount to be transferred from the
Revenue Account for the payment of Emergency Capital Expenditures on the
[Proposed Transfer Date] [Revenue Account Secondary Withdrawal/Transfer Date] is
$[            ].

 

[12. Permitted Capital Expenditures. The amount to be transferred from the
Revenue Account for the payment of Permitted Capital Expenditures on the
Proposed Withdrawal/Transfer Date is $[            ]. Such Permitted Capital
Expenditures have been incurred prior to the Final Maturity Date and are less
than $5,000,000 for the current fiscal year and less than $15,000,000 in the
aggregate.]21

 

[13. Insurance Proceeds. The amount to be transferred from the Insurance
Proceeds Account to [the Company for the purpose of Restoring the Affected
Property] [the Debt Service Accrual Account for prepayment of the Loans] [the
Company to use in its sole discretion] is $[            ]. [The Company and the
Agent and the Administrative Agent have received a certificate of the
Independent Engineer certifying that the failure to Restore the affected
Property could not reasonably be expected to result in a Material Adverse
Effect.]22]23

 

[14. Distributions.

 

(a) The amount to be transferred from the Revenue Account to the Distribution
Account on the Proposed Transfer Date is $[            ], which amount is equal
to the full remaining amount on deposit in the Revenue Account.]24

 

(b) The amount to be transferred from the Distribution Account to the Company on
the Revenue Secondary Withdrawal/Transfer Date (which date is also a Quarterly
Date) is $[            ]. Such distribution is a [Permitted Distribution
pursuant to Section 8.12 of the Credit Agreement] [distribution for the purposes
of funding Permitted Capital Expenditures of the type referred to in paragraph
(c) in the definition thereof].

 

--------------------------------------------------------------------------------

20 Insert if applicable.

21 Insert if applicable.

22 Insert if applicable.

23 Insert if applicable.

24 Insert if applicable.

 

     - 41 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

[(c) The amount to be transferred from the Distribution Account to the Company
with respect to Capacity Reservation Fees is $[            ].]25

 

15. Certifications. THE UNDERSIGNED, ON BEHALF OF THE COMPANY, HEREBY CERTIFIES
FOR THE BENEFIT OF EACH SECURED PARTY THAT, as of the date hereof:

 

(a) the Company is entitled, pursuant to the terms of Articles III and IV of the
Collateral Agency Agreement and [insert relevant sections of other applicable
Financing Documents], to request each Construction Account Monthly Transfer,
Revenue Account Monthly Transfer, Construction Secondary Withdrawal/Transfer and
Revenue Secondary Withdrawal/Transfer in the manner, in the amount and at the
times set out in this Withdrawal/Transfer Certificate;

 

(b) the Company certifies that each withdrawal and transfer requested herein is
for an amount required for, and shall solely be used for, the purpose set forth
herein and in the Annexes attached hereto in accordance with the Collateral
Agency Agreement and the other Financing Documents;

 

(c) the Company is in compliance with the procedures, conditions and
requirements set out in the Collateral Agency Agreement and all other applicable
Financing Documents in connection with each Construction Account Waterfall
Transfer, Revenue Account Waterfall Transfer, Construction Account
Withdrawal/Transfer and Revenue Account Withdrawal/Transfer requested herein;

 

(d) except to the extent previously disclosed by the Company to the Collateral
Agent in writing, no Trigger Event has occurred and is continuing; and

 

(e) attached hereto are all other documents and instruments which are required
to be annexed hereto pursuant to the Collateral Agency Agreement and any other
Financing Document, if any, in connection with the Construction Account
Withdrawal/Transfers and Revenue Account Withdrawal/Transfers requested
herein.26

 

Each of the foregoing certifications shall be deemed to be repeated on each
Construction Account Monthly Transfer Date, Construction Secondary
Withdrawal/Transfer Date, Revenue Account Monthly Transfer Date and Revenue
Secondary Withdrawal/Transfer Date to which this Withdrawal/Transfer Certificate
relates.

 

--------------------------------------------------------------------------------

25 Insert if applicable.

26 This may include a Distribution Certificate.

 

     - 42 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Withdrawal/Transfer
Certificate on this [    ] day of [            ], [        ].

 

By:

 

Sabine Pass LNG – GP, Inc.,

   

its General Partner

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

     - 43 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Annex A-1 to Withdrawal/Transfer Certificate

 

Withdrawals from the Construction Account

 

Amount to be
withdrawn/transferred

--------------------------------------------------------------------------------

  

Collateral Account or Person to be Transferred to

--------------------------------------------------------------------------------

  

Purpose

--------------------------------------------------------------------------------

     [EPC Contractor] [or specify other Person or account]          
Construction Payment Subaccount           [Punchlist Retention SubAccount]     
     Revenue Account           [Operating Account]           [Debt Service
Reserve Account]     

 

     - 44 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Annex A-2 to Withdrawal/Transfer Certificate

 

Withdrawals from Collateral Accounts

 

Withdrawal/Transfer Date

--------------------------------------------------------------------------------

  Amount to be
withdrawn/transferred

--------------------------------------------------------------------------------

  Collateral Accounts

--------------------------------------------------------------------------------

  Recipient

--------------------------------------------------------------------------------

  Purpose

--------------------------------------------------------------------------------

 

Entries marked with a “*” constitute irrevocable Payment Instructions.

 

     - 45 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Annex A-3 to Withdrawal/Transfer Certificate

 

Withdrawals from the Revenue Account

 

Collateral Amount to be
withdrawn/transferred

--------------------------------------------------------------------------------

  

Collateral Account or Person to be Transferred to

--------------------------------------------------------------------------------

  

Purpose

--------------------------------------------------------------------------------

     [Construction Payment Subaccount]           [Punchlist Retention
Subaccount]           Revenue Account           Operating Account           Debt
Service Accrual Account           [Debt Service Reserve Account]          
Income Tax Reserve Account           [Distribution Account]     

 

     - 46 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Annex A-4 to Withdrawal/Transfer Certificate

 

Withdrawals from Collateral Accounts

 

Withdrawal/Transfer Date

--------------------------------------------------------------------------------

  Amount to be
withdrawn/transferred

--------------------------------------------------------------------------------

  Collateral Accounts

--------------------------------------------------------------------------------

  Recipient

--------------------------------------------------------------------------------

  Purpose

--------------------------------------------------------------------------------

 

Entries marked with a “*” constitute irrevocable Payment Instructions.

 

     - 47 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT B

to Agreement

 

FORM OF DISTRIBUTION CERTIFICATE

[Pursuant to Section 4.07 of the Collateral Agency Agreement]

 

Date of this Distribution

Certificate:             

[Transfer Date/Disbursement

Date                     ]

 

HSBC Bank USA, National Association

  as Collateral Agent

452 Fifth Avenue

New York, NY 10018

Attn: Corporate Trust

 

Ladies and Gentlemen:

 

This Distribution Certificate is delivered to you pursuant to Section 4.07 of
the Collateral Agency Agreement (as amended, supplemented or modified and in
effect from time to time, the “Collateral Agency Agreement”) dated as of
February 25, 2005 among HSBC Bank USA, National Association, in its capacity as
collateral agent (together with its successors and permitted assigns in such
capacity, the “Collateral Agent”) and securities intermediary, Société Générale,
in its capacity as administrative agent (the “Administrative Agent”) and Sabine
Pass LNG, L.P. (the “Company”). Reference is also made to Credit Agreement dated
as of February 25, 2005 (as amended, modified and supplemented and in effect
from time to time, the “Credit Agreement”) among the Company, each of the
lenders from time to time party to the Credit Agreement (the “Lenders”), the
Administrative Agent and the Collateral Agent. Capitalized terms used but not
defined herein shall have the respective meanings assigned thereto in the
Collateral Agency Agreement (or if not defined therein, in the Credit
Agreement)..

 

The undersigned is an Authorized Officer of the Company and has read and is
familiar with the provisions of the Collateral Agency Agreement and the other
Financing Documents that are relevant to the furnishing of this Distribution
Certificate. With respect to the information herein, the undersigned has made
such examination or investigation as was, in the reasonable opinion of the
undersigned, necessary to enable the undersigned to express an opinion as to the
accuracy of such information.

 

The undersigned, on behalf of the Company, hereby certifies for the benefit of
each Secured Party as of the date hereof as to the matters set out in paragraphs
1 through 4 below.

 

1. This Distribution Certificate is being provided to you at least five Business
Days prior to the Disbursement Date set out above (the “Proposed Transfer
Date”).

 

2. Each of the following conditions have been satisfied and the Company has no
reason to believe that any such condition will not be satisfied both immediately
before and immediately after the making of the proposed Restricted Payment(s):

 

(a) the first Principal Payment Date has occurred or shall be concurrent with
the Proposed Transfer Date;

 

     - 48 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

(b) [no Default or Event of Default has occurred and is continuing or will occur
as a consequence of such Restricted Payment]27;

 

(c) the Debt Service Reserve Account is fully funded in an amount at least equal
to the Required Debt Service Reserve Amount;

 

(d) the Debt Service Coverage Ratio for the most recent calendar quarter is not
less than 1.25 to 1.0;

 

(e) the Company hereby certifies that:

 

(I) each of the foregoing conditions has been or shall be satisfied as of the
Proposed Transfer Date; and

 

(II) attached as Annex I are the detailed calculations for computing the Debt
Service Coverage Ratio referred to in clause 2(d) above and such calculations
were prepared in good faith and were based on reasonable assumptions.

 

3. The Company hereby agrees that if any event shall occur on or prior to the
Proposed Transfer Date that shall render the statement certified in paragraph 2
or 4 false or misleading, the Company shall give the Collateral Agent notice of
any such event on the same date as the date on which the Company knows or should
reasonably have known of such event.

 

4. The Company is in compliance with the procedures, conditions and requirements
set out in all the applicable Financing Documents in connection with the
proposed distribution requested herein.

 

--------------------------------------------------------------------------------

27 Note that this certification is the only certification required to be given
by the Company in connection with distributions under Section 4.07(c) of the
Credit Agreement.

 

     - 49 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned has executed this Withdrawal/Transfer
Certificate on this [    ] day of [            ], [        ].

 

By:

 

Sabine Pass LNG – GP, Inc.,

   

its General Partner

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

 

     - 50 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

Annex I

to Distribution Certificate

 

CALCULATION OF DEBT SERVICE COVERAGE RATIOS

 

     - 51 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT C

 

[FORM OF SECURED PARTY ADDITION AGREEMENT]

 

Reference is made to (i) that certain Collateral Agency Agreement, dated as of
February 25, 2005 (the “Collateral Agency Agreement”), among HSBC Bank USA,
National Association, in its capacity as Collateral Agent, Société Générale, in
its capacity as Administrative Agent and Sabine Pass LNG, LP, as Borrower and
(ii) that certain Security Agreement, dated as of February 25, 2005, among the
Collateral Agent, the Administrative Agent and the Borrower.

 

The undersigned hereby agrees to be bound by, and to benefit from, the Security
Agreement and the Collateral Agency Agreement as if a party thereof.

 

Date:                     

 

[Insert Name of Party to be Added]

   

By:

 

 

--------------------------------------------------------------------------------

   

Name:

       

Title:

   

 

Address for Notes:

 

Attention:

Tel. No.:

Fax No.:

 

     - 52 -    EXHIBIT K           TO CREDIT AGREEMENT

--------------------------------------------------------------------------------

EXHIBIT L

to Credit Agreement

 

FORM OF CONSENT AND AGREEMENT

 

THIS CONSENT AND AGREEMENT (this “Consent and Agreement”), dated as of [    ],
2005, is made among [                    ] (the “Obligor”), SABINE PASS LNG,
L.P., a Delaware limited partnership (the “Assignor”), and HSBC Bank USA,
National Association, in its capacity as collateral agent (in such capacity,
together with its successors in such capacity, the “Collateral Agent”).

 

The Assignor owns and is constructing a LNG receiving terminal in Cameron
Parish, Louisiana, featuring a regasification design capacity of 2.6 billion
cubic feet per day, two docks and three storage tanks (the “Project”). The
Obligor and the Assignor have entered into the [             Agreement] dated as
of [                    ], 2005 (the “Assigned Agreement”). The Assignor, the
Collateral Agent and certain other financial institutions are party to the
Credit Agreement dated as of February 25, 2005 (the “Credit Agreement”) pursuant
to which the financial institutions party thereto agreed to finance certain
costs of developing, constructing and operating the Project. The Assignor and
the Collateral Agent have entered into certain security documents in connection
with the execution of the Credit Agreement (the “Security Documents”), pursuant
to which the Assignor has pledged and assigned to the Collateral Agent a lien
on, and a security interest in, all of the Assignor’s right, title and interest
in the Assigned Agreement.

 

1. Consent and Agreement.

 

(a) The Obligor hereby acknowledges and irrevocably consents to the assignment
by the Assignor of all its right, title and interest in the Assigned Agreement
to the Collateral Agent as collateral security for the payment and performance
by the Assignor of its obligations under the Credit Agreement.

 

(b) The Obligor acknowledges the right of the Collateral Agent, upon the
occurrence and during the continuance of an event of default under the Credit
Agreement, to exercise and enforce all rights of the Assignor under the Assigned
Agreement in accordance with the terms of the Assigned Agreement.

 

(c) Upon the exercise by the Collateral Agent of any of the remedies set forth
in the Security Documents, the Collateral Agent may assign its rights and
interests and the rights and interests of the Assignor under the Assigned
Agreement to any Person that (i) is a purchaser or transferee of the Assignor or
the Project and (ii) assumes the obligations of the Assignor under the Assigned
Agreement.

 

(d) The Obligor acknowledges and agrees, notwithstanding anything to the
contrary contained in the Assigned Agreement, that neither of the following
events shall constitute a default by the Assignor under the Assigned Agreement
or require the consent of the Obligor: (i) the operation of the Project by or on
behalf of the Collateral Agent following the occurrence and continuance of an
event of default under the Credit Agreement and the related documents or (ii)
foreclosure or any other enforcement of the Security Documents by the Collateral
Agent; provided, that the actions taken pursuant to clauses (i) or (ii)
otherwise comply with applicable law.

 

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(e) Notwithstanding anything to the contrary in the Assigned Agreement, the
Obligor shall not, without the prior written consent of the Collateral Agent,
cancel, suspend performance under or terminate the Assigned Agreement unless the
Obligor shall have delivered to the Collateral Agent written notice stating that
it is entitled to do so under the Assigned Agreement and that it intends to
exercise such right on a date not less than 90 days after the date of such
notice. The Obligor’s notice shall specify the nature of the default giving rise
to its right to cancel, suspend performance under or terminate the Assigned
Agreement and the Obligor shall permit either the Assignor or the Collateral
Agent or both to cure such default. Nothing herein shall require the Collateral
Agent to cure any default of the Assignor under the Assigned Agreement or to
perform any act, duty or obligation of the Assignor under the Assigned
Agreement, but shall only give it the option to do so.

 

(f) In the event the Collateral Agent or its designee or assignee succeeds to
the Assignor’s interest under the Assigned Agreement, whether by foreclosure or
otherwise, the Collateral Agent or such designee or assignee shall assume
liability for all of the Assignor’s obligations under the Assigned Agreement;
provided, however, that such liability shall not include any liability for
claims of the Obligor against the Assignor arising from the Assignor’s failure
to perform during the period prior to the Collateral Agent’s or such designee’s
or assignee’s succession to the Assignor’s interest in and under the Assigned
Agreement. Except as set forth in the immediately preceding sentence, neither
the Collateral Agent, its designee or assignee nor any other party secured by
the Security Documents shall be liable for the performance or observance of any
of the obligations or duties of the Assignor under the Assigned Agreement,
including the performance of any cure of default permitted pursuant to paragraph
(e) above, and the assignment of the Assigned Agreement by the Assignor to the
Collateral Agent or its designee or assignee pursuant to the Security Documents
shall not give rise to any duties or obligations owing to the Obligor on the
part of any of the parties secured by the Security Documents.

 

(g) In the event that (i) the Assigned Agreement is rejected by a trustee or
debtor-in-possession in any bankruptcy or insolvency proceeding involving the
Assignor or (ii) the Assigned Agreement is terminated as a result of any
bankruptcy or insolvency proceeding involving the Assignor, and if within 90
days after such rejection or termination, the Collateral Agent or its designee
or assignee shall so request and shall certify in writing to the Obligor that it
intends to perform the obligations of the Assignor as and to the extent required
under the Assigned Agreement, the Obligor shall execute and deliver to the
Collateral Agent or such designee or assignee a new agreement (“new Assigned
Agreement”), (A) pursuant to which new Assigned Agreement the Obligor shall
agree to perform the obligations contemplated to be performed by the Obligor
under the original Assigned Agreement and the Collateral Agent or such designee
or assignee shall agree to perform the obligations contemplated to be performed
by the Assignor under the original Assigned Agreement, (B) which shall be for
the balance of the remaining term under the original Assigned Agreement before
giving effect to such

 

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rejection or termination and (C) which shall contain the same conditions,
agreements, terms, provisions and limitations as the original Assigned Agreement
(except for any requirements which have been fulfilled by the Assignor prior to
such rejection or termination). References in this Consent and Agreement to an
“Assigned Agreement” shall be deemed also to refer to the new Assigned
Agreement.

 

(h) The Obligor shall deliver to the Collateral Agent at the address set forth
on the signature pages hereof, or at such other address as the Collateral Agent
may designate in writing from time to time to the Obligor, concurrently with the
delivery thereof to the Assignor, a copy of each material notice, request or
demand (other than such notices delivered in the ordinary course of business)
given by the Obligor to the Assignor pursuant to the Assigned Agreement.

 

(i) In the event that the Collateral Agent or its designee(s), or any purchaser,
transferee, grantee or assignee of the interests of the Collateral Agent or its
designee(s) in the Project assumes or becomes liable under the Assigned
Agreement, liability in respect of any and all obligations of any such Person
under the Assigned Agreement shall be limited to such Person’s interest in the
Project (and no officer, director, employee, shareholder or agent thereof shall
have any liability with respect thereto).

 

2. Representations and Warranties. The Obligor hereby represents and warrants to
the Collateral Agent that:

 

(a) The Obligor is a corporation duly organized, validly existing and in good
standing under the laws of the state of its jurisdiction of organization and is
duly qualified to do business and is in good standing in all jurisdictions where
necessary in light of the business it conducts and the property its owns and
intends to conduct and own.

 

(b) The Obligor has the full corporate power, authority and right to execute,
deliver and perform its obligations hereunder and under the Assigned Agreement.
The execution, delivery and performance by the Obligor of this Consent and
Agreement and the Assigned Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate and shareholder action on the part of the Obligor. This Consent and
Agreement and the Assigned Agreement have been duly executed and delivered by
the Obligor and constitute the legal, valid and binding obligations of the
Obligor enforceable against the Obligor in accordance with their respective
terms, except as the enforceability thereof may be limited by (i) applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and (ii) the application of general
principles of equity or law (regardless of whether such enforceability is
considered in a proceeding at law or in equity).

 

(c) The execution, delivery and performance by the Obligor of this Consent and
Agreement and the Assigned Agreement do not and will not (i) require any consent
or approval of the board of directors of the Obligor or any shareholder of the
Obligor which has not been obtained, and each such consent or approval that has
been obtained is in full force and effect, (ii) violate any provision of any
law, rule, regulation, order, writ,

 

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judgment, decree, determination or award having applicability to the Obligor or
any provision of the certificate of incorporation or by-laws of the Obligor,
(iii) conflict with, result in a breach of or constitute a default under any
provision of the certificate of incorporation, by-laws or other organic
documents or any resolution of the board of directors or any other material
agreement, lease or instrument to which the Obligor is a party or by which the
Obligor or its properties and assets are bound or affected or (iv) result in, or
require the creation or imposition of, any lien upon or with respect to any of
the assets or properties of the Obligor now owned or hereafter acquired.

 

(d) This Consent and Agreement (assuming the due authorization, execution and
delivery by, and binding effect on, the Collateral Agent and the Assignor) and
the Assigned Agreement (assuming the due authorization, execution and delivery
by, and the binding effect on, the Assignor) are in full force and effect.

 

(e) There is no action, suit or proceeding at law or in equity by or before any
Governmental Authority, arbitral tribunal or other body now pending or to the
actual knowledge of the Obligor, threatened against the Obligor or any of its
properties, rights or assets that could reasonably be expected to (i) have a
material adverse effect on the Obligor or its ability to perform its obligations
hereunder or under the Assigned Agreement or (ii) question the validity, binding
effect or enforceability hereof or of the Assigned Agreement or any action taken
or to be taken pursuant hereto or thereto or any of the transactions
contemplated hereby or thereby.

 

(g) The Obligor is not, to its actual knowledge, in default under any covenant
or obligation hereunder or under the Assigned Agreement and to its actual
knowledge no such default has occurred prior to the date hereof. To the actual
knowledge of the Obligor, the Assignor is not in default under any covenant or
obligation of the Assigned Agreement and no such default has occurred prior to
the date hereof. To the actual knowledge of the Obligor, after giving effect to
the assignment by the Assignor to the Collateral Agent of the Assigned Agreement
pursuant to the Security Documents, and after giving effect to the
acknowledgment of and consent to such assignment by the Obligor (as constituted
by this Consent and Agreement), there exists no event or condition that would
constitute a default, or that would, with the giving of notice or lapse of time
or both, constitute a default under the Assigned Agreement.

 

(h) This Consent and Agreement and the Assigned Agreement, and any other
agreement specifically contemplated herein or therein, constitute and include
all agreements entered into by the Obligor and Assignor relating to, and
required for the consummation of, the transactions contemplated by this Consent
and Agreement and the Assigned Agreement.

 

3. Arrangements Regarding Payments. All payments to be made by the Obligor to
the Assignor under the Assigned Agreement shall be made in lawful money of the
United States of America in immediately available funds, directly to the
following account: [            ] (or to such other person or entity and at such
other address as the Collateral Agent may from time to time specify in writing
to the Obligor). The Assignor hereby authorizes and directs the Obligor to make
such payments as aforesaid and agrees that such payments shall satisfy the
Obligor’s obligations to pay such amounts to the Assignor under the Assigned
Agreements.

 

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4. Collateral Agent. The Collateral Agent represents and warrants to the Obligor
that it is acting on behalf of the Secured Parties and is authorized to bind and
does hereby bind the Secured Parties to the obligations of the Collateral Agent
herein.

 

5. Miscellaneous.

 

(a) This Consent and Agreement shall be binding upon the successors and assigns
of the Obligor.

 

(b) No amendment or waiver of any provisions of this Consent and Agreement or
consent to any departure by the Obligor from any provisions of this Consent and
Agreement shall in any event be effective unless the same shall be in writing
and signed by the parties hereto.

 

(c) No failure on the part of the Collateral agent or any of its agents or on
the part of the Obligor to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege hereunder shall operate
as a waiver thereof (subject to any statute of limitations), and no single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.

 

(d) THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK. EACH OF THE PARTIES HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
CONSENT AND AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

 

(e) EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS CONSENT AND AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

(f) This Consent and Agreement may be executed in one or more counterparts with
the same effect as if such signatures were upon the same instrument.

 

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(g) If any provision hereof is invalid and unenforceable in any jurisdiction,
then, to the fullest extent permitted by law, (i) the other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in favor of the Collateral Agent and the other Secured
Parties in order to carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.

 

(h) Headings appearing herein are used solely for convenience and are not
intended to affect the interpretation of any provision of this Consent and
Agreement.

 

(i) This Consent and Agreement shall terminate upon the indefeasible payment in
full of all amounts owed under the Credit Agreement or upon the assignment of
the Assigned Agreement by the Obligor in accordance with the terms of the
Assigned Agreement and this Consent and Agreement if the assignee executes and
delivers to the Collateral Agent a consent and agreement substantially similar
to this Consent and Agreement and in a form acceptable to the Collateral Agent.

 

 

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IN WITNESS WHEREOF, each of the undersigned by its officer duly authorized has
caused this Consent and Agreement to be duly executed and delivered as of the
first date written above.

 

[OBLIGOR]

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

Address for Notices:

SABINE PASS LNG, L.P.

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

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

Address for Notices:

[                                         ],

    as Collateral Agent

By:

 

 

--------------------------------------------------------------------------------

Name:

   

Title:

   

Address for Notices:

 

 

     - 7 -    EXHIBIT L           TO CREDIT AGREEMENT

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EXHIBIT M

to Credit Agreement

 

[FORM OF MORTGAGE]

 

STATE OF LOUISIANA

 

PARISH OF CAMERON

 

MULTIPLE INDEBTEDNESS MORTGAGE,

ASSIGNMENT OF LEASES AND RENTS, AND SECURITY AGREEMENT

 

by

 

SABINE PASS LNG, L.P.

 

as the Mortgagor,

in favor of

 

HSBC BANK USA, NATIONAL ASSOCIATION,

IN ITS CAPACITY AS COLLATERAL AGENT FOR THE SECURED PARTIES

 

as the Mortgagee

 

BE IT KNOWN, that on the date set forth below, to be effective February     ,
2005 (the “Effective Date”),

 

BEFORE ME, the undersigned Notary Public, duly commissioned and qualified in and
for the County and State hereinbelow set forth and in the presence of the
undersigned competent witnesses,

 

PERSONALLY CAME AND APPEARED:

 

SABINE PASS LNG, L.P., a Delaware limited partnership, whose mailing address is
717 Texas Avenue, Suite 3000, Houston, Texas 77002 (telecopy number
                    ), represented by its General Partner, Sabine Pass LNG-GP,
Inc., a Delaware corporation, appearing herein by and through its undersigned
duly authorized representative, authorized by virtue of resolutions of the board
of directors of said General Partner, a certified copy of which is annexed
hereto (“Mortgagor”);

 

     - 1 -    EXHIBIT M           TO CREDIT AGREEMENT

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who declared that:

 

RECITALS

 

WHEREAS, pursuant to a Credit Agreement, dated as of the Effective Date (as
amended, amended and restated, supplemented and/or modified and in effect from
time to time, the “Credit Agreement”), among the Mortgagor, each of the lenders
from time to time party to the Credit Agreement, the Mortgagee (as defined
below), as Collateral Agent, and Société Générale, as Agent, such lenders have
agreed to make loans and extend other credit in the aggregate principal amount
of $822,000,000.00 to the Mortgagor on the terms and subject to the conditions
set forth in the Credit Agreement;

 

WHEREAS, capitalized terms used herein but not defined herein shall have the
meanings assigned thereto in the Credit Agreement;

 

WHEREAS, the Mortgagor, the Agent, the Securities Intermediary and the Mortgagee
have entered into the Collateral Agency Agreement dated as of the date hereof,
pursuant to which the Secured Parties (excluding the Collateral Agent) have
appointed the Collateral Agent to act on their behalf in accordance with the
provisions of the Security Documents; and

 

WHEREAS, it is a condition precedent under the Credit Agreement to the making of
such loans and the extension of such credit that the Mortgagor shall have
executed and delivered this Multiple Indebtedness Mortgage, Assignment of Leases
and Rents, and Security Agreement (this “Mortgage”), as security for the Secured
Obligations (as defined below).

 

NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, and for the purpose of securing the Secured
Obligations (as defined below), the Mortgagor hereby irrevocably grants,
bargains, sells, releases, conveys, warrants, assigns, transfers, mortgages,
hypothecates, pledges, sets-over and confirms unto the Mortgagee, and grants a
security interest in favor of HSBC BANK USA, NATIONAL ASSOCIATION, a national
banking association, whose United States mailing address is 452 Fifth Avenue,
New York, New York 10018, Attn: Corporate Trust (telecopy number 212-525-1300),
appearing in its capacity as Collateral Agent for the Secured Parties (together
with its successors and assigns, the “Mortgagee”), in all of the following
described property (collectively, the “Mortgaged Property”):

 

(i) the leases (collectively, the “Leases”) more particularly described in
Schedule I, together with all of Mortgagor’s leasehold estate and other rights
arising under the Leases and its present and future rights, whether leasehold or
ownership, in the land and premises subject to the Leases and described on said
Schedule I (collectively, the “Properties”), together with all of Mortgagor’s
rights in and to any future supplement, modification, amendment, restatement or
replacement of any of the Leases;

 

(ii) all interests, estates or other claims, both in law and in equity, that the
Mortgagor now has or may hereafter acquire in (a) any of the Properties, (b) all
easements, servitudes, rights-of-way and rights used in connection therewith or
as a means of access thereto and (c) all

 

     - 2 -    EXHIBIT M           TO CREDIT AGREEMENT

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tenements, hereditaments and appurtenances in any manner belonging, relating or
appertaining thereto (all of the foregoing interests, estates and other claims
being hereinafter collectively called “Easements and Rights of Way”);

 

(iii) all estate, right, title and interest of the Mortgagor, now owned or
hereafter acquired, in and to any land lying within the right-of-way of any
streets, open or proposed, adjoining any of the Properties, and any and all
sidewalks, alleys and strips and gores of land adjacent to or used in connection
therewith (all of the foregoing estate, right, title and interest being
hereinafter called “Adjacent Rights”);

 

(iv) all estate, right, title and interest of the Mortgagor, now owned or
hereafter acquired, in and to any and all buildings, other constructions,
component parts and other improvements now or hereafter located on any of the
Properties and all building materials, building equipment and fixtures of every
kind and nature located on any of the Properties or attached to, contained in or
used in any such buildings and/or other improvements, and all appurtenances and
additions thereto and all betterments, substitutions and replacements of any
thereof (all of the foregoing estate, right, title and interest being
hereinafter collectively called “Improvements”);

 

(v) all estate, right, title and interest of the Mortgagor in and to all
tangible or corporeal, movable or personal property now owned or hereafter
acquired by the Mortgagor (including all machinery, apparatus, equipment,
fittings and other articles of personal or movable property) and now or
hereafter located on or at or attached to any of the Properties such that an
interest in such tangible or corporeal property arises under applicable
immovable property law, and any and all products and accessions to any such
property that may exist at any time (all of the foregoing estate, right, title
and interest, and products and accessions, being hereinafter called “Fixtures”);

 

(vi) all estate, right, title and interest of the Mortgagor now owned or
hereafter acquired in and to all rights, royalties and profits in connection
with all minerals, oil and gas, other hydrocarbon substances and other
as-extracted collateral on or in any of the Properties, development rights or
credits, air rights, water, water rights (whether riparian, appropriative, or
otherwise and whether or not appurtenant) and water stock (all of the foregoing
estate, right, title and interest being hereinafter collectively called
“Minerals and Related Rights”);

 

(vii) all rights of reversion in and to the Properties and Improvements and all
estate, right, title and interest of the Mortgagor as lessor or sublessor in and
to any and all present and future leases of space in any of the Properties
and/or Improvements (all of the foregoing reversionary rights and leases of
space being hereinafter collectively called the “Mortgagor Leases”), and all
rents, revenues, proceeds, issues, profits, royalties, income and other benefits
now or hereafter derived from any of the Properties, the Improvements and/or the
Fixtures, subject to the right, power and authority hereinafter given to the
Mortgagor to collect and apply the same prior to the occurrence of an Event of
Default (all of the foregoing rents, revenues, proceeds, issues, profits,
royalties, income and other benefits being hereinafter collectively called
“Rents”);

 

     - 3 -    EXHIBIT M           TO CREDIT AGREEMENT

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(viii) all estate, right, title and interest and other claim or demand that the
Mortgagor now has or may hereafter acquire with respect to any damage to the
Properties, the Improvements and/or the Fixtures and any and all proceeds of
insurance in effect with respect to any or all of the Improvements and/or the
Fixtures, and any and all awards made for the taking by eminent domain or
condemnation, or by any proceeding or purchase in lieu thereof, of any or all of
the Properties, the Improvements and/or the Fixtures, including, without
limitation, any awards resulting from a change of grade of streets or as the
result of any other damage to any or all of the Properties, the Improvements
and/or the Fixtures for which compensation shall be given by any Government
Authority or other Person having the power to expropriate (all of the foregoing
estate, right, title and interest and other claims or demand, and any such
proceeds or awards, being hereinafter collectively called “Damage Rights”);

 

(ix) all the estate, right, title, interest and other claim of the Mortgagor now
owned or hereafter acquired with respect to any parking facilities located other
than on any of the Properties and used or intended to be used in connection with
the operation, ownership or use of any of the Properties, any and all
replacements and substitutions for the same, and any other parking rights,
easements, servitudes, covenants and other interests in parking facilities
acquired by the Mortgagor for the use of tenants or occupants of any of the
Improvements (all of the foregoing estate, right, title, interest and other
claim being hereinafter collectively called “Parking Rights”);

 

(x) all estate, right, title and interest of the Mortgagor with respect to any
and all air rights, development rights, zoning rights, land use rights or other
similar rights or interests that benefit or are appurtenant to any of the
Properties or any of the Improvements (all of the foregoing estate, right, title
and interest being hereinafter collectively called “Air and Development
Rights”); and

 

(xi) all estate, right, title and interest of the Mortgagor, now owned or
hereafter acquired, in and to the permit described in Schedule I (all of the
foregoing estate, right, title and interest being hereinafter called “River
Permit”).

 

All of the foregoing Easements and Rights of Way, Adjacent Rights, Improvements,
Fixtures, Minerals and Related Rights, Mortgagor Leases, Rents, Damage Rights,
Parking Rights, Air and Development Rights, and River Permit being sometimes
hereinafter referred to collectively as the “Ancillary Rights and Properties”.

 

TO HAVE AND TO HOLD the Mortgaged Property with all privileges and appurtenances
thereunto belonging, unto the Mortgagee and its successors and assigns, forever,
upon the terms and conditions and for the uses hereinafter set forth.

 

This Mortgage is intended to encumber, affect and constitute a lien against all
of Mortgagor’s right, title and interest in and to the Properties, the
Improvements and the other Mortgaged Property, regardless of whether Mortgagor’s
interest therein is that of lessee, sublessee, owner or otherwise, and
regardless of whether the nature of such interest changes from time to time from
lessee to sublessee to owner or vice-versa in any combination, and in any such
event the lien of this Mortgage shall automatically extend to and cover any and
all right, title and interest of Mortgagor in the Properties, Improvements and
other Mortgaged Property without the need of any amendment, supplement, notice
or action of any kind by Mortgagee.

 

     - 4 -    EXHIBIT M           TO CREDIT AGREEMENT

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With respect to the proceeds attributable to the insurance loss of all or any
part of the Properties, Improvements and/or Fixtures referred to in (viii)
above, this Mortgage is a collateral assignment thereof pursuant to La. R.S.
9:5386, et seq., whether such proceeds or any of them now exist or arise in the
future, and Mortgagor does hereby irrevocably make, constitute and appoint
Mortgagee and the agents of Mortgagee as the true and lawful mandataries and
attorneys-in-fact of Mortgagor to carry out and enforce all of the proceeds
hereby collaterally assigned as provided in the Collateral Agency Agreement. The
mandatary and attorney-in-fact designation set forth in the preceding sentence
shall be coupled with an interest and may not be revoked by Mortgagor so long as
this Mortgage remains in effect. Such proceeds shall otherwise be included in
the term “Mortgaged Property” for all purposes of this Mortgage. The collateral
assignment herein made of the aforesaid proceeds shall not be construed as
imposing upon Mortgagee any obligations with respect thereto unless and until
Mortgagee shall become the absolute owner thereof and Mortgagor shall have been
wholly dispossessed thereof.

 

For purposes of this Mortgage, the term “Secured Obligations” shall have the
meaning ascribed to such term in the Credit Agreement, but also shall include,
without limitation, all indebtedness, obligations, liabilities and agreements of
any kind or character, arising out of documents or debt instruments intended to
refinance the Loans, of Mortgagor to Mortgagee and/or any other Secured Party
(or trustee, agent or other secured party with respect to obligations intended
to refinance the Loans), or any combination of Secured Parties, now existing or
hereafter arising, direct or indirect (including any participation or interest
of any Secured Party), acquired outright, conditionally or as collateral
security from another (whether by purchase from another Person, merger or
consolidation of a Secured Party with another Person to whom Mortgagor and/or
Borrower is obligated, or otherwise), absolute or contingent, joint, several or
solidary, secured or unsecured, due or not, liquidated or unliquidated, arising
by operation of law or otherwise, and of all agreements, documents and
instruments evidencing any of the foregoing or under which any of the foregoing
may have been issued, created, assumed, secured or guaranteed, whether evidenced
by promissory note, loan or credit agreement, reimbursement agreement, letter of
credit, guaranty, pledge, mortgage, assignment, other writing, open account or
otherwise.

 

For purposes of this Mortgage, the term “Financing Documents” shall have the
meaning ascribed to such term in the Credit Agreement, but shall also include,
without limitation, all other documents or instruments giving rise to Secured
Obligations, now existing or hereafter executed and delivered, and all
amendments thereto and/or substitutions therefor.

 

This Mortgage secures the prompt payment and performance of the Secured
Obligations, including, without limitation, the payment of all amounts owing
under the Credit Agreement, this Mortgage and the other Financing Documents, and
any amendments thereto and/or substitutions therefor, and any renewals,
extensions and refinancings thereof, whether presently existing, now arising or
incurred hereafter. Mortgagor and Mortgagee acknowledge and agree that this
Mortgage may secure Secured Obligations that have been or will be borrowed,
repaid and reborrowed from time to time, one or more times, and that this
Mortgage shall be effective, as to

 

     - 5 -    EXHIBIT M           TO CREDIT AGREEMENT

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all future advances, as of the date of execution and recordation hereof, it
being intended that this Mortgage be a mortgage to secure present and future
obligations to the fullest extent permitted by La. Civ. Code art. 3298.
NOTWITHSTANDING ANY PROVISION OF THIS MORTGAGE TO THE CONTRARY, THE MAXIMUM
AMOUNT OF THE SECURED OBLIGATIONS THAT MAY BE OUTSTANDING AT ANY TIME AND FROM
TIME TO TIME THAT THIS MORTGAGE SECURES, INCLUDING, WITHOUT LIMITATION, AS A
MORTGAGE AND AS AN ASSIGNMENT OF LEASES AND RENTS, INCLUDING ALL PRINCIPAL,
INTEREST AND ANY EXPENSES OR ADDITIONAL SECURED OBLIGATIONS INCURRED BY THE
MORTGAGEE AND ALL OTHER AMOUNTS INCLUDED WITHIN THE SECURED OBLIGATIONS IS ONE
BILLION FIVE HUNDRED MILLION AND NO/100 DOLLARS ($1,500,000,000.00).

 

Mortgagor and Mortgagee acknowledge that neither any promissory note or any
other written evidence of indebtedness has been paraphed for identification with
this Mortgage.

 

TO PROTECT THE SECURITY OF THIS MORTGAGE, THE MORTGAGOR HEREBY COVENANTS AND
AGREES AS FOLLOWS:

 

ARTICLE 1

PARTICULAR COVENANTS AND

AGREEMENTS OF THE MORTGAGOR

 

Section 1.1. Title, Etc.

 

(a) Leasehold Property. The Mortgagor represents and warrants that (i) each of
the Leases is in full force and effect and there are no defaults of any material
covenant or material obligation under any thereof and no event has occurred and
is continuing that with notice or lapse of time or both could reasonably be
expected to result in such a default and (ii) the Mortgagor owns a valid and
subsisting leasehold estate in and to all of the Properties and is the owner of
the related Ancillary Rights and Properties with respect to each of the Leases,
in each case subject to no mortgage, Lien, pledge, assignment, charge, security
interest or other encumbrance or adverse claim of any nature (including, without
limitation, any thereof affecting the ownership of the Properties), except
Permitted Liens.

 

(b) Transfers. The Mortgagor represents and warrants that it has the full
limited partnership power and legal rights to grant, bargain, sell, release,
convey, warrant, assign, transfer, mortgage, hypothecate, pledge, set-over and
confirm unto the Mortgagee, and grant a security interest in favor of Mortgagee
in, the Mortgaged Property as hereinabove provided and warrants that it will
forever defend the title to the Mortgaged Property and the validity and priority
of the Lien or estate hereof against the claims and demands of all Persons
whomsoever, subject only to Permitted Liens.

 

Section 1.2. Further Assurances.

 

(a) Further Instruments. The Mortgagor shall execute, acknowledge and deliver,
from time to time, one or more times, such further instruments as the Mortgagee
may reasonably require to accomplish the purposes of this Mortgage.

 

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(b) Filing and Refiling. The Mortgagor, immediately upon the execution and
delivery of this Mortgage, and thereafter from time to time, at its sole cost
and expense, shall cause this Mortgage, any security agreement, mortgage or
amendment supplemental hereto and each instrument of further assurance
reasonably required or requested by the Mortgagee to be filed, registered or
recorded and refiled, re-registered, re-recorded, continued or reinscribed, as
applicable, in such manner and in such places as may be required by any present
or future law in order to publish notice of and perfect the Lien of this
Mortgage upon the Mortgaged Property.

 

(c) Fees and Expenses. The Mortgagor shall pay all filing, registration and
recording fees, all refiling, re-registration, re-recording, continuation and
reinscription fees, and all expenses incident to the execution, filing,
recording and acknowledgment of this Mortgage, any security agreement, mortgage
or amendment supplemental hereto and any instrument of further assurance
reasonably required or requested by the Mortgagee, and all federal, state,
parish and municipal stamp and documentary taxes, if any, and other taxes,
duties, imposts, assessments and charges, if any, arising out of or in
connection with the execution, delivery, filing and recording of this Mortgage
or any of the other Financing Documents, any security agreement, mortgage or
amendment supplemental hereto or any instrument of further assurance reasonably
required or requested by the Mortgagee.

 

Section 1.3. Limitations of Use. The Mortgagor shall not initiate, join in or
consent to any change in any private restrictive covenant, zoning ordinance or
other public or private restrictions limiting or defining the uses that may be
made of any of the Properties and/or the Improvements or any part of any thereof
that would have a material adverse effect on the value or utility of any of the
Properties and/or the Improvements. The Mortgagor shall comply in all material
respects with the provisions of all Leases, Mortgagor Leases, other leases,
licenses, agreements and private covenants, conditions and restrictions that at
any time are applicable to any of the Mortgaged Property except in case of any
of the foregoing other than the Leases where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.

 

Section 1.4. Estoppel Certificates. The Mortgagor, within ten business days from
any request in person or within fifteen business days from any request by mail,
shall furnish to the Mortgagee a written statement, duly acknowledged, of the
amount of the Secured Obligations then secured by this Mortgage and whether any
offsets or defenses exist against any such Secured Obligations.

 

Section 1.5. Leasehold Interests.

 

(a) Right to Cure Defaults. If the Mortgagor shall fail promptly to perform or
observe any of the terms, covenants or conditions required to be performed by it
under this Mortgage or the Leases, including, without limitation, payment of all
rent and other charges due under each thereof, the Mortgagee may, without
obligation to do so, and upon reasonable prior notice to the Mortgagor (except
in an emergency), take such action as is appropriate to cause

 

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such terms, covenants or conditions to be promptly performed or observed on
behalf of the Mortgagor, but no such action by the Mortgagee shall release the
Mortgagor from any of its obligations under this Mortgage. To the maximum extent
permitted by law, all sums, including reasonable attorneys’ fees and
disbursements and court costs, so expended or expended to sustain the Lien or
estate of the Leases or of this Mortgage or its priority or to protect or
enforce any of the rights under any thereof or hereunder, or to recover any of
the Secured Obligations, shall be a Lien on the Mortgaged Property, shall be
deemed to be added to the Secured Obligations secured hereby, and shall be paid
by the Mortgagor to the Mortgagee within ten days after demand therefor,
together with interest thereon at the Post-Default Rate. Upon receipt by the
Mortgagee from the lessor under the Leases of any notice of default by the
Mortgagor thereunder, the Mortgagee may rely thereon and take any action as
aforesaid to cure such default even though the existence of such default or the
nature thereof be questioned or denied by the Mortgagor or by any party on
behalf of the Mortgagor.

 

(b) Release or Forbearance. No release or forbearance of any of the Mortgagor’s
obligations under any of the Leases, pursuant to the terms of any thereof or
otherwise, shall release the Mortgagor from any of its obligations under this
Mortgage.

 

(c) No Confusion of Interests. Neither the ownership of the Properties nor the
leasehold estate created by the Leases shall be confused, but shall always
remain separate and distinct, notwithstanding the union of the aforesaid estates
either in the lessor under the Leases or the Mortgagor under the Leases or in a
third party by purchase or otherwise, unless the Mortgagee shall, at its option,
execute and record a document evidencing its intent that such estates be
confused. If the Mortgagor acquires the ownership or any other estate, title or
interest in any of the Properties covered by any of the Leases, this Mortgage
shall attach to, be a Lien upon and encumber the ownership or such other estate
so acquired, and such ownership or other estate shall, without further
assignment, mortgage or conveyance, become and be subject to the Lien of this
Mortgage. The Mortgagor shall notify the Mortgagee of any such acquisition by
the Mortgagor and, on written request by the Mortgagee, shall cause to be
executed and recorded all such other and further assurances or other instruments
in writing as may in the reasonable opinion of the Mortgagee be required to
carry out the intent and meaning hereof.

 

(d) Renewals and Extensions. Unless the exercise of any option, now existing or
hereafter created, to renew or extend the term of any of the Leases would, in
the Mortgagor’s reasonable business judgment, be inadvisable, the Mortgagor
shall, at least ninety (90) days prior to the last day upon which the Mortgagor
may validly exercise such option, (i) exercise such option in such manner as
will cause the term of each of the Leases to be effectively renewed or extended
for the period provided by each such option and (ii) give immediate notice
thereof to the Mortgagee, it being understood that in the event of the failure
of the Mortgagor to do so, the Mortgagee shall have, and is hereby granted, the
irrevocable right to exercise any such option, either in its own name and
behalf, or in the name and behalf of the Mortgagor, as the Mortgagee shall in
its reasonable discretion determine.

 

(e) Notifications of Changes in Rent. The Mortgagor shall promptly notify the
Mortgagee of any change in the rent or other charges payable under any of the
Leases, except for changes made pursuant to the provisions of any such Lease.

 

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(f) Notifications Concerning Proceeds. In the event that any proceeds of
insurance on any part of the Mortgaged Property, or any proceeds from the
Condemnation of any part of the Mortgaged Property, shall be deposited with any
Person pursuant to the requirements of any of the Leases, the Mortgagor shall
promptly notify the Mortgagee of the name and address of the Person with whom
such proceeds have been deposited and of the amount so deposited.

 

ARTICLE 2

ASSIGNMENT OF RENTS, ISSUES AND PROFITS

 

Section 2.1. Assignment of Rents, Issues and Profits. FOR THE PURPOSE OF
SECURING the Secured Obligations, up to a maximum amount outstanding at any one
time, from time to time, equal to ONE BILLION FIVE HUNDRED MILLION AND NO/100
DOLLARS ($1,500,000,000.00), the Mortgagor hereby assigns and transfers to the
Mortgagee all of the Mortgagor Leases, whether presently existing or hereafter
arising, and all Rents due under each thereof or otherwise attributable to any
thereof, and hereby gives to and confers upon the Mortgagee the right, power and
authority to collect all such Rents. The Mortgagor irrevocably appoints the
Mortgagee as its true and lawful attorney-in-fact, at its option at any time and
from time to time following the occurrence and during the continuance of an
Event of Default, to demand, receive and enforce payment, to give receipts,
releases and satisfactions, and to sue, in the name of the Mortgagor or
otherwise, for Rents and apply the same to the Secured Obligations as provided
in paragraph (a) of Section 4.2; provided however, that the Mortgagor shall have
the right to collect Rents at any time prior to the occurrence of an Event of
Default (but not more than one month in advance, except in the case of security
deposits).

 

Section 2.2. Collection Upon Default. To the fullest extent permitted by
applicable law, upon the occurrence of any Event of Default, the Mortgagee may,
at any time and without notice, either in person, by agent or by a receiver or
keeper appointed by a court, and without regard to the adequacy of any security
for the Secured Obligations or the solvency of the Mortgagor, enter upon and
take possession of the Properties, the Improvements and the Fixtures or any part
of any thereof, in its own name, sue for or otherwise collect Rents, including,
without limitation, those past due and unpaid, and, apply the same, less
reasonable costs and expenses of operation and collection, including reasonable
attorneys’ fees and disbursements, court costs and reasonable keeper or receiver
fees and expenses, to the payment of the Secured Obligations as provided in
paragraph (a) of Section 4.2, and in such order as the Mortgagee may determine.
The collection of Rents or the entering upon and taking possession of the
Properties, the Improvements and the Fixtures or any part of any thereof, or the
application thereof as aforesaid, shall not cure or waive any Event of Default
or notice thereof or invalidate any act done in response to such Event of
Default or pursuant to notice thereof.

 

ARTICLE 3

SECURITY AGREEMENT

 

Section 3.1. Creation of Security Interest. The Mortgagor hereby grants to the
Mortgagee a security interest in the Fixtures and all other Mortgaged Property
upon or against which a security interest may be created under Chapter 9 of
Title 10 of the Louisiana Revised

 

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Statutes as in effect from time to time in the State of Louisiana for the
purpose of securing the Secured Obligations. The Mortgagee shall have, in
addition to all rights and remedies provided herein and in the other Financing
Documents, all of the rights and remedies of a secured party under the Uniform
Commercial Code of the state in which the applicable portion of the Fixtures and
other Mortgaged Property is located.

 

Section 3.2. Warranties, Representations and Covenants. The Mortgagor hereby
warrants, represents and covenants that: (i) the Fixtures will be kept on or at
the Properties and the Mortgagor will not remove any Fixtures from the
Properties, except such portions or items of the Fixtures that are consumed or
worn out in ordinary usage, or which must be removed temporarily for the purpose
of repair or improvement, all of which shall be promptly replaced by the
Mortgagor, except as otherwise permitted by the Credit Agreement, (ii) all
covenants and obligations of the Mortgagor contained herein relating to the
Mortgaged Property shall be deemed to apply to the Fixtures whether or not
expressly referred to herein, and (iii) this Mortgage constitutes a security
agreement as that term is used in the applicable Uniform Commercial Code.
Information relative to the security interest created hereby may be obtained by
application to the Mortgagee (secured party) c/o HSBC Bank USA National
Association, 452 Fifth Avenue, New York, New York 10018, Attention: Corporate
Trust. The mailing address of the Mortgagor is set forth on Page 1 hereof.

 

ARTICLE 4

 

DEFAULTS; REMEDIES

 

Section 4.1. Default Remedies.

 

(a) Remedies Generally. If an Event of Default shall have occurred and be
continuing, this Mortgage may, to the maximum extent permitted by applicable
law, be enforced, and the Mortgagee may exercise any right, power or remedy
permitted to it hereunder, under the Credit Agreement or under any of the other
Financing Documents or by law, and, without limiting the generality of the
foregoing, the Mortgagee may, personally or by its agents, to the maximum extent
permitted by applicable law:

 

(i) enter into and take possession of the Mortgaged Property or any part
thereof, exclude the Mortgagor and all Persons claiming under the Mortgagor
whose claims are junior to this Mortgage, wholly or partly therefrom, and use,
operate, manage and control the same either in the name of the Mortgagor or
otherwise as the Mortgagee shall deem best, and upon such entry, from time to
time at the expense of the Mortgagor and the Mortgaged Property, make all such
repairs, replacements, alterations, additions or improvements to the Mortgaged
Property or any part thereof as the Mortgagee may deem proper and, whether or
not the Mortgagee has so entered and taken possession of the Mortgaged Property
or any part thereof, collect and receive all Rents and apply the same to the
payment of all expenses that the Mortgagee may be authorized to make under this
Mortgage or the other Financing Documents, the remainder to be applied to the
payment of the Secured Obligations until the same shall have been repaid in
full; if the Mortgagee demands or attempts to take possession of the Mortgaged
Property or any portion thereof in the exercise of any rights hereunder, the
Mortgagor shall promptly turn over and deliver complete possession thereof to
the Mortgagee; and

 

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(ii) personally or by agents, with or without entry, if the Mortgagee shall deem
it advisable:

 

(A) sell the Mortgaged Property at a sale or sales held at such place or places
and time or times and upon such notice and otherwise in such manner as may be
required by law, or, in the absence of any such requirement, as the Mortgagee
may deem appropriate, and from time to time adjourn any such sale by
announcement at the time and place specified for such sale or for such adjourned
sale without further notice, except such as may be required by law;

 

(B) proceed to protect and enforce its rights under this Mortgage, by suit for
specific performance of any covenant contained herein or in any of the other
Financing Documents or in aid of the execution of any power granted herein or in
the other Financing Documents, or for the foreclosure of this Mortgage (as a
mortgage or otherwise) and the sale of the Mortgaged Property under the judgment
or decree of a court of competent jurisdiction, or for the enforcement of any
other right as the Mortgagee shall deem most effectual for such purpose,
provided, that in the event of a sale, by foreclosure or otherwise, of less than
all of the Mortgaged Property, this Mortgage shall continue as a Lien on, and
security interest in, the remaining portion of the Mortgaged Property; or

 

(C) exercise any or all of the remedies available to a secured party under the
applicable Uniform Commercial Code, including, without limitation:

 

(1) either personally or by means of a court appointed receiver or keeper, take
possession of all or any of the Fixtures and exclude therefrom the Mortgagor and
all Persons claiming by, through or under the Mortgagor, and thereafter hold,
store, use, operate, manage, maintain and control, make repairs, replacements,
alterations, additions and improvements to and exercise all rights and powers of
the Mortgagor in respect of the Fixtures or any part thereof; if the Mortgagee
demands or attempts to take possession of the Fixtures in the exercise of any
rights hereunder, the Mortgagor shall promptly turn over and deliver complete
possession thereof to the Mortgagee;

 

(2) without notice to or demand upon the Mortgagor, make such payments and do
such acts as the Mortgagee may deem necessary to protect its security interest
in the Fixtures, including, without limitation, paying, purchasing, contesting
or compromising any encumbrance or Lien that is prior to or superior to the
security interest granted hereunder, and in exercising any such powers or
authority paying all expenses incurred in connection therewith;

 

(3) require the Mortgagor to assemble the Fixtures or any portion thereof, at a
place designated by the Mortgagee and reasonably convenient to both parties, and
promptly to deliver the Fixtures to the Mortgagee, or an agent or representative
designated by it; the Mortgagee, and its agents and representatives, shall have
the right to enter upon the premises and property of the Mortgagor to exercise
the Mortgagee’s rights hereunder; and

 

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(4) sell, lease or otherwise dispose of the Fixtures, with or without having the
Fixtures at the place of sale, and upon such terms and in such manner as the
Mortgagee may determine (and the Mortgagee or any Lender may be a purchaser at
any such sale).

 

(b) Executory Process. For purposes of executory process under applicable
Louisiana law, Mortgagor does hereby acknowledge the Secured Obligations,
CONFESS JUDGMENT thereon and consent that judgment be rendered and signed,
whether during the court’s term or during vacation, in favor of the Mortgagee,
for the full amount of the Secured Obligations, including, but not limited to,
the Loans, the Credit Agreement and the other Financing Documents, in principal,
interest, costs and attorneys’ fees, together with all charges and expenses
whatsoever owing pursuant to this Mortgage. Upon the occurrence of an Event of
Default, and in addition to all of its rights, powers and remedies under this
Mortgage and applicable law, Mortgagee may, at its option, cause all or any part
of the Mortgaged Property to be seized and sold under executory process or under
writ of fieri facias issued in execution of an ordinary judgment obtained upon
the Secured Obligations, without appraisement to the highest bidder, for cash or
upon such terms as Mortgagee deems acceptable. Mortgagor hereby waives all and
every appraisement of the Mortgaged Property and waives and renounces the
benefit of appraisement and the benefit of all laws relative to the appraisement
of the Mortgaged Property seized and sold under executory or other legal
process. Mortgagor agrees to waive, and does hereby specifically waive:

 

(i) the benefit of appraisement provided for in Articles 2332, 2336, 2723 and
2724, Louisiana Code of Civil Procedure, and all other laws conferring such
benefits;

 

(ii) the demand and three (3) days’ delay accorded by Articles 2639 and 2721,
Louisiana Code of Civil Procedure;

 

(iii) the notice of seizure required by Article 2293, Louisiana Code of Civil
Procedure;

 

(iv) the three (3) days’ delay provided by Articles 2331 and 2722, Louisiana
Code of Civil Procedure;

 

(v) the benefit of the other provisions of Articles 2331, 2722 and 2723,
Louisiana Code of Civil Procedure;

 

(vi) the benefit of the provisions of any other articles of the Louisiana Code
of Civil Procedure not specifically mentioned above; and

 

(vii) all pleas of division and discussion with respect to the Secured
Obligations.

 

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(c) Appointment of Keeper. Pursuant to the authority contained in La. R.S.
9:5136 through 9:5140.2, as the same may hereafter be amended, Mortgagor and
Mortgagee do hereby expressly designate Mortgagee or its designee to be keeper
or receiver (a “Keeper”) for the benefit of Mortgagee or any assignee of
Mortgagee, such designation to take effect immediately upon any seizure of any
of the Mortgaged Property under writ of executory process or under writ of
sequestration or fieri facias as an incident to an action brought by Mortgagee.
The Keeper shall be entitled to a reasonable fee and to the reimbursement of all
expenses incurred by it as Keeper, and the payment of such fees and expenses
shall be secured by the mortgage, assignment, security interests and other Liens
against the Mortgaged Property granted in this Mortgage.

 

(d) Rents. If an Event of Default shall have occurred and be continuing, the
Mortgagor shall, to the maximum extent permitted by law, pay monthly in advance
to the Mortgagee, or to any receiver or Keeper appointed at the request of the
Mortgagee to collect Rents, the fair and reasonable rental value for the use and
occupancy of the Properties, the Improvements and the Fixtures or of such part
thereof as may be in the possession of the Mortgagor. Upon default in the
payment thereof, the Mortgagor shall vacate and surrender possession of the
Properties, the Improvements and the Fixtures to the Mortgagee or such receiver
or Keeper, and upon a failure so to, do may be evicted by summary proceedings.

 

(e) Sale. In any sale under any provision of this Mortgage or pursuant to any
judgment or decree of court, the Mortgaged Property, to the maximum extent
permitted by law, may be sold in one or more parcels or as an entirety and in
such order as the Mortgagee may elect, without regard to the right of the
Mortgagor or any Person claiming under the Mortgagor to the marshalling of
assets. The purchaser at any such sale shall take title to the Mortgaged
Property or the part thereof so sold free and discharged of the estate of the
Mortgagor therein, the purchaser being hereby discharged from all liability to
see to the application of the purchase money. Any Person, including the
Mortgagee or any Lender, may purchase at any such sale. Upon the completion of
any such sale by virtue of this Section 4.1, the seizing sheriff or the
Mortgagee, as applicable, shall execute and deliver to the purchaser an
appropriate instrument that shall effectively transfer all of the Mortgagor’s
estate, right, title, interest, property, claim and demand in and to the
Mortgaged Property or portion thereof so sold, but without any covenant or
warranty, express or implied. The Mortgagee is hereby irrevocably appointed the
mandatary and attorney-in-fact of the Mortgagor in its name and stead to make
all appropriate transfers and deliveries of the Mortgaged Property or any
portion thereof so sold and, for that purpose, the Mortgagee may execute all
appropriate instruments of transfer, and may substitute one or more Persons with
like power, the Mortgagor hereby ratifying and confirming all that said
attorneys or such substitute or substitutes shall lawfully do by virtue hereof.
Nevertheless, the Mortgagor shall ratify and confirm, or cause to be ratified
and confirmed, any such sale or sales by executing and delivering, or by causing
to be executed and delivered, to the Mortgagee or to such purchaser or
purchasers all such instruments as may be advisable, in the judgment of the
Mortgagee, for such purpose or otherwise requested by Mortgagee, and as may be
designated in such request. Any sale or sales made under or by virtue of this
Mortgage, to the extent not prohibited by law, shall operate to divest all the
estate, right, title, interest, property, claim and demand whatsoever, whether
at law or in equity, of the Mortgagor in, to and under the Mortgaged Property,
or any portions thereof so sold, and shall be a perpetual bar both at law and

 

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in equity against the Mortgagor and against any and all Persons claiming or who
may claim the same, or any part thereof, by, through or under the Mortgagor. The
powers and agency herein granted are coupled with an interest and are
irrevocable.

 

(f) Possession of Financing Documents Not Necessary. All rights of action under
this Mortgage and the other Financing Documents may be enforced by the Mortgagee
without the possession of the Financing Documents and without the production
thereof at any trial or other proceeding relative thereto.

 

Section 4.2. Application of Proceeds.

 

(a) Application of Proceeds Generally. The proceeds of any sale made either
under the power of sale hereby given or under a judgment, order or decree made
in any action to foreclose or to enforce this Mortgage, or of any monies held by
the Mortgagee hereunder shall, to the maximum extent permitted by law, be
applied:

 

(i) first to the payment of all costs and expenses of such sale, including the
Mortgagee’s attorneys’ fees and disbursements and all keeper’s fees and
disbursements;

 

(ii) then to the payment of all charges, expenses and advances incurred or made
by the Mortgagee in order to protect the Lien and estate of this Mortgage or the
security afforded hereby;

 

(iii) then to the payment in full of the Secured Obligations, in accordance with
the Collateral Agency Agreement; and after payment in full of all Secured
Obligations, any surplus remaining shall be paid to the Mortgagor or to
whomsoever may be lawfully entitled to receive the same.

 

(b) Liability for Deficiencies. No sale or other disposition of all or any part
of the Mortgaged Property pursuant to Section 4.1 shall be deemed to relieve the
Mortgagor of its obligations under the Credit Agreement or any of the other
Financing Documents except to the extent the proceeds thereof are applied to the
payment of such obligations. If the proceeds of sale, collection or other
realization of or upon the Mortgaged Property are insufficient to cover the
costs and expenses of such realization and the payment in full of the Secured
Obligations, the Mortgagor shall remain liable for any deficiency.

 

Section 4.3. Right to Sue. The Mortgagee shall have the right from time to time
to sue for any sums required to be paid by the Mortgagor under the terms of this
Mortgage or any of the other Financing Documents, as the same become due, and
without prejudice to the right of the Mortgagee thereafter to bring any action
or proceeding of foreclosure or any other action upon the occurrence of any
Event of Default existing at the time such earlier action was commenced.

 

Section 4.4. Powers of the Mortgagee. The Mortgagee may at any time or from time
to time in accordance with the Credit Agreement renew or extend this Mortgage or
(with the

 

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agreement of the Mortgagor) alter or modify the same in any way, or waive any of
the terms, covenants or conditions hereof or thereof, in whole or in part, and
may release any portion of the Mortgaged Property or any other security, and
grant such extensions and indulgences in relation to the Secured Obligations, or
release any Person liable therefor as the Mortgagee may determine without the
consent of any junior lien holder or encumbrancer, without any obligation to
give notice of any kind thereto, without in any manner affecting the priority of
the Lien and estate of this Mortgage on or in any part of the Mortgaged
Property, and without affecting the liability of any other Person liable for any
of the Secured Obligations.

 

Section 4.5. Remedies Cumulative.

 

(a) Remedies Cumulative. No right or remedy herein conferred upon or reserved to
the Mortgagee is intended to be exclusive of any other right or remedy, and each
and every right and remedy shall be cumulative and in addition to any other
right or remedy under this Mortgage or under applicable law, whether now or
hereafter existing; the failure of the Mortgagee to insist at any time upon the
strict observance or performance of any of the provisions of this Mortgage or to
exercise any right or remedy provided for herein or under applicable law, shall
not impair any such right or remedy nor be construed as a waiver or
relinquishment thereof.

 

(b) Other Security. To the maximum extent permitted by applicable law: (i) the
Mortgagee shall be entitled to enforce payment and performance of any of the
obligations of the Mortgagor and to exercise all rights and powers under this
Mortgage or under any of the other Financing Documents or any applicable law now
or hereafter in force, notwithstanding that some or all of the Secured
Obligations may now or hereafter be otherwise secured, whether by mortgage,
pledge, Lien, assignment or otherwise; (ii) neither the acceptance of this
Mortgage nor its enforcement, whether by court action or pursuant to the power
of sale or other powers herein contained, shall prejudice or in any manner
affect the Mortgagee’s right to realize upon or enforce any other security now
or hereafter held by the Mortgagee, it being stipulated that the Mortgagee shall
be entitled to enforce this Mortgage and any other security now or hereafter
held by the Mortgagee in such order and manner as the Mortgagee, in its sole
discretion, may determine; and (iii) every power or remedy given by the Credit
Agreement, this Mortgage or any of the other Financing Documents to the
Mortgagee, or to which the Mortgagee is otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by the Mortgagee, and the Mortgagee may pursue inconsistent remedies.

 

Section 4.6. Waiver of Stay; Extension; Moratorium Laws; Equity of Redemption.
To the maximum extent permitted by law, the Mortgagor shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take any benefit or
advantage of any applicable present or future stay, extension or moratorium law,
that may adversely affect the observance or performance of the provisions of
this Mortgage; nor claim, take or insist upon any benefit or advantage of any
present or future law providing for the valuation or appraisal of the Mortgaged
Property or any portion thereof prior to any sale or sales thereof that may be
made under or by virtue of Section 4.1; and the Mortgagor, to the extent that it
lawfully may do so, hereby waives all benefits or advantages of any such law or
laws. The Mortgagor for itself and all who may claim by, through or under it,
hereby waives, to the maximum extent permitted by applicable law, any and all
rights and equities of redemption from sale under the power of sale created

 

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hereunder or from sale under any order or decree of foreclosure of this Mortgage
and (if an Event of Default shall have occurred) all notice or notices of
seizure, and all right to have the Mortgaged Property marshalled upon any
foreclosure hereof. The Mortgagee shall not be obligated to pursue or exhaust
its rights or remedies as against any other part of the Mortgaged Property and
the Mortgagor hereby waives any right or claim of right to have the Mortgagee
proceed in any particular order.

 

ARTICLE 5

MISCELLANEOUS

 

Section 5.1. Release by the Mortgagee. Upon the Termination Date, the Mortgagee,
at the expense of Mortgagor, shall release the Lien of this Mortgage, or upon
the request of the Mortgagor, and at the Mortgagor’s expense, assign this
Mortgage without recourse to the Mortgagor’s designee, or to the Person or
Persons legally entitled thereto, by an instrument in form for recording.

 

Section 5.2. Notices. All notices, requests and other communications provided
for in this Mortgage (including any modifications of, or waivers or consents
under, this Mortgage) shall be given or made in writing (including by telecopy)
delivered to the intended recipient at the address for the recipient specified
in the appearance section on the first page of this Mortgage or the granting
clause on the second page of this Mortgage or at such other address as shall be
designated by such party in a notice to the other party. Except as otherwise
provided in this Mortgage, all such communications shall be deemed to have been
duly given when transmitted by facsimile transmittal (as confirmed by the
facsimile machine of sender) or personally delivered or, in the case of a mailed
notice or notice sent by courier, upon receipt, in each case given or addressed
as set forth in the appearances section on the first page of this Mortgage.

 

Section 5.3. Amendments; Waivers; Etc. No provision of this Mortgage may be
waived, modified or supplemented except by an instrument in writing signed by
the Mortgagor and the Mortgagee. Any modification, supplement or waiver shall be
for such period and subject to such conditions as shall be specified in the
written instrument effecting the same and shall be binding upon the Mortgagor
and each of the Secured Parties, and any such waiver shall be effective only in
the specific instance and for the purpose for which given.

 

Section 5.4. Successors and Assigns. This Mortgage applies to, inures to the
benefit of and binds the Mortgagor and the Mortgagee and their respective
successors and assigns.

 

Section 5.5. Severability. If any term or provision of this Mortgage or the
application thereof to any Person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Mortgage, or the application of such
term or provision to Persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Mortgage shall be valid and enforceable to the maximum extent
permitted by law. If any portion of the Secured Obligations shall for any reason
not be secured by a valid and enforceable Lien upon any part of the Mortgaged
Property, then any payments made in respect of the Secured Obligations (whether
voluntary or under foreclosure or other enforcement action or procedure or
otherwise) shall, for purposes of this

 

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Mortgage (except to the extent otherwise required by applicable law) be deemed
to be made (i) first, in respect of the portion of the Secured Obligations, if
any, not secured by the Lien of this Mortgage, (ii) second, in respect of the
portion of the Secured Obligations secured by the Lien of this Mortgage, but
which Lien is on less than all of the Mortgaged Property, and (iii) last, to the
portion of the Secured Obligations secured by the Lien of this Mortgage, and
which Lien is on all of the Mortgaged Property.

 

Section 5.6 Notice Regarding Special Flood Hazards. The Mortgagor hereby
acknowledges that it realizes that the Properties are in zones identified by the
Director of the Federal Emergency Management Agency as special flood hazard
zones described in 12 C.F.R. § 22.2 and that it has received, prior to the
making of the Loans and the incurrence of any other indebtedness constituting
part of the Secured Obligations, the notice regarding Federal disaster relief
assistance referred to in the Appendix to 12 C.F.R. Part 22.

 

Section 5.7 Acceptance by Mortgagee. In accordance with the provisions of
Article 3289, Louisiana Revised Civil Code, the acceptance of this Mortgage by
Mortgagee is established by presumption.

 

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STATE OF                                         

 

COUNTY OF                                     

 

THUS DONE AND PASSED, in the County of                         , State of New
York, on the      day of                                         , 2005, to be
effective between the parties as of the Effective Date, in the presence of the
undersigned competent witnesses, who hereunto sign their names with the said
Mortgagor and me, Notary, after due reading of the whole.

 

WITNESSES:   MORTGAGOR:         SABINE PASS LNG, L.P.         By:   Sabine Pass
LNG-GP, Inc.,             its General Partner

 

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By:

 

 

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Name:  

 

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  Name:  

 

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    Title:  

 

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        Name:  

 

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__________________________

NOTARY PUBLIC

 

Printed Name:                                    

 

My Commission Expires:                                        [NOTARY SEAL]

 

 

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Schedule I

Leases

 

Parcel A: Leasehold estate created by that certain Lease Agreement dated
effective January 15, 2005, by and between Crain Lands, L.L.C., as Lessor, and
Sabine Pass LNG, L.P., as Lessee, recorded on February     , 2005, under Entry
No.                      of the records of Cameron Parish, Louisiana, as amended
by that certain Amendment to Lease dated effective February 24, 2005, by and
between Crain Lands, L.L.C., as Lessor, and Sabine Pass LNG, L.P., as Lessee,
recorded on February     , 2005, under Entry No.                      of the
records of Cameron Parish, Louisiana, covering the lands described as “Parcel A”
on Schedule IA attached hereto and made a part hereof.

 

Parcel B: Leasehold estate created by that certain Lease Agreement dated
effective January 15, 2005, by and between Crain Brothers Ranch, Inc.,
Marguerite Domatti as Trustee of M.A. Domatti Management Trust, Eva L. Domatti
individually and as Trustee, Domatti Family Living Trust, Erika Domatti and
Renata Domatti, collectively, as Lessor, and Sabine Pass LNG, L.P., as Lessee,
recorded on February     , 2005, under Entry No.                      of the
records of Cameron Parish, Louisiana, as amended by that certain Amendment to
Lease dated effective February 24, 2005, by and between Crain Brothers Ranch,
Inc., Marguerite Domatti as Trustee of M.A. Domatti Management Trust, Eva L.
Domatti individually and as Trustee of Domatti Family Living Trust, Erika
Domatti and Renata Domatti, collectively, as Lessor, and Sabine Pass LNG, L.P.,
as Lessee, recorded on February     , 2005, under Entry No.                     
of the records of Cameron Parish, Louisiana, covering the lands described as
“Parcel B” on Schedule IB attached hereto and made a part hereof.

 

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Schedule IA

Description of Parcel A

 

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Schedule IB

Description of Parcel B

 

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