Exhibit 10.3

EXECUTION COPY

 

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

COLLATERAL TRUST AGREEMENT

dated as of September 14, 2007

by and between

CHENIERE MARKETING, INC.,

and

BNP PARIBAS,

as Collateral Trustee

 

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

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

TABLE OF CONTENTS

 

          Page ARTICLE 1 DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1

   Defined Terms    2

Section 1.2

   Rules of Interpretation    4 ARTICLE 2 THE TRUST ESTATES

Section 2.1

   Declaration of BNPP Trust    5

Section 2.2

   Declaration of Crest Trust    5

Section 2.3

   Priority of Liens    6

Section 2.4

   Discretion in Enforcement of Liens    6 ARTICLE 3 OBLIGATIONS AND POWERS OF
COLLATERAL TRUSTEE

Section 3.1

   Undertaking of the Collateral Trustee    7

Section 3.2

   Release or Subordination of Liens    7

Section 3.3

   Enforcement of Liens    8

Section 3.4

   Application of Proceeds    8

Section 3.5

   Powers of the Collateral Trustee    9

Section 3.6

   Documents and Communications    9

Section 3.7

   For Sole and Exclusive Benefit of Secured Parties    10 ARTICLE 4 OBLIGATIONS
ENFORCEABLE BY THE COMPANY

Section 4.1

   Release of Liens on Collateral    10

Section 4.2

   Collateral Trustee Not Required to Serve, File or Record    11 ARTICLE 5
IMMUNITIES OF THE COLLATERAL TRUSTEE

Section 5.1

   No Implied Duty    11

Section 5.2

   Appointment of Agents and Advisors    11

Section 5.3

   Other Agreements    11

Section 5.4

   Solicitation of Instructions    11

Section 5.5

   Limitation of Liability    11

 

-i-

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

Section 5.6

   Documents in Satisfactory Form    12

Section 5.7

   Entitled to Rely    12

Section 5.8

   Secured Obligation Default    12

Section 5.9

   Actions by Collateral Trustee    12

Section 5.10

   Security or Indemnity in Favor of the Collateral Trustee    12

Section 5.11

   Rights of the Collateral Trustee    12

Section 5.12

   Limitations on Duty of Collateral Trustee in Respect of Collateral    13

Section 5.13

   Assumption of Rights, Not Assumption of Duties    13

Section 5.14

   No Liability for Clean Up of Hazardous Materials    13

Section 5.15

   Additional Provisions Relating to the Collateral Trustee    14

Section 5.16

   Appointment of Co-Collateral Trustee    15 ARTICLE 6 RESIGNATION OR REMOVAL
OF THE COLLATERAL TRUSTEE

Section 6.1

   Resignation or Removal of Collateral Trustee    16

Section 6.2

   Appointment of Successor Collateral Trustee    16

Section 6.3

   Succession    16

Section 6.4

   Merger, Conversion or Consolidation of Collateral Trustee    17 ARTICLE 7
MISCELLANEOUS PROVISIONS

Section 7.1

   Amendment    17

Section 7.2

   Further Assurances; Insurance    18

Section 7.3

   Successors and Assigns    19

Section 7.4

   Delay and Waiver    19

Section 7.5

   Notices    19

Section 7.6

   Notice Following Discharge of Obligations    20

Section 7.7

   Entire Agreement    20

Section 7.8

   Compensation; Expenses    20

Section 7.9

   Indemnity    21

Section 7.10

   Severability    21

Section 7.11

   Headings    21

Section 7.12

   Obligations Secured    22

Section 7.13

   Governing Law    22

Section 7.14

   Consent to Jurisdiction    22

Section 7.15

   Waiver of Jury Trial    22

Section 7.16

   Counterparts    23

Section 7.17

   Effectiveness    23

Section 7.18

   Continuing Nature of this Agreement    23

Section 7.19

   Insolvency    23

Section 7.20

   Rights and Immunities of the Administrative Agent    23

Section 7.21

   Crest Obligation    23

 

-ii-

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

This Collateral Trust Agreement (this “Agreement”) is dated as of September 14,
2007 and is by and among CHENIERE MARKETING, INC., a Delaware corporation (the
“Company”) and BNP PARIBAS, a bank organized under the Laws of the Republic of
France, as collateral trustee hereunder (in such capacity and together with its
successors in such capacity, the “Collateral Trustee”).

RECITALS

WHEREAS, the Company on or about the date hereof will become a party to that
certain Credit Agreement, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the “BNPP Credit
Agreement”), among the Company, the several banks and other financial
institutions or entities from time to time parties thereto, and BNP Paribas, as
administrative agent (together with any successor Administrative Agent appointed
pursuant to the BNPP Credit Agreement, in such capacity, the “Administrative
Agent”). Unless otherwise defined herein, terms defined in the BNPP Credit
Agreement and used herein have the meanings given to them in the BNPP Credit
Agreement;

WHEREAS, it is a requirement under the BNPP Credit Agreement and a condition
precedent to the Extensions of Credit that the Company shall have executed and
delivered this Agreement;

WHEREAS, Cheniere Energy, Inc. (“Cheniere Energy”) is party to the Settlement
and Purchase Agreement dated as of June 14, 2001 (the “Crest Settlement
Agreement”) among Cheniere Energy, CXY Corporation (“CXY”), Crest Energy,
L.L.C., Crest Investment Company (“Crest”) and Freeport LNG Terminal, LLC,
whereby Cheniere Energy agreed, inter alia, that a royalty (the “Royalty”) on
the gross quantities of gas processed and produced through certain liquefied
natural gas receiving and regasification facilities of CXY would be paid to
Crest;

WHEREAS, Cheniere Energy agreed to cause any and all of its direct and indirect,
present and future affiliates, joint ventures and subsidiaries that are involved
in the liquefied natural gas business to assume and adopt the obligations of
Cheniere Energy and CXY under the Crest Settlement Agreement;

WHEREAS, the Company is a wholly-owned indirect subsidiary of Cheniere Energy
and as such will be obligated for the Royalty payment obligation as if it were a
party to the Crest Settlement Agreement;

WHEREAS, the Company intends to secure the BNPP Obligations (as defined below)
under the BNPP Credit Agreement on a priority basis with Liens on certain
Collateral (as defined below) to the extent that such Liens have been provided
for in the Security Documents (as defined below);

WHEREAS, pursuant to the Crest Settlement Agreement, the Company is prohibited
from creating, or allowing to be created, any lien, security interest or other
encumbrance on any of the Company’s assets for borrowing money that is senior to
or pari passu with the obligations of the Company to Crest, and therefore the
Company intends to secure the Crest Obligation (as defined below) under the
Crest Settlement Documents with a first priority Lien on all present and future
Collateral that is senior to the Lien granted by the Company to the Collateral
Trustee on behalf of and for the benefit of the BNPP Secured Parties;

WHEREAS, pursuant to the Crest Settlement Agreement, Crest is to be secured by
the Collateral only for so long as the BNPP Obligations are secured by the
Collateral; and

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

WHEREAS, this Agreement sets forth the terms on which each Secured Party has
appointed the Collateral Trustee to act as the collateral trustee for such
Secured Party and as such, to receive, hold, maintain, administer and distribute
the Collateral at any time delivered to the Collateral Trustee or the subject of
the Security Documents, and to enforce the Security Documents and all interests,
rights, powers and remedies of the Collateral Trustee with respect thereto or
thereunder and the proceeds thereof;

NOW, THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby agree as follows:

ARTICLE 1

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1 Defined Terms. The following terms will have the following meanings:

“Administrative Agent”: as defined in the Recitals.

“Affiliate”: as to any Person, any other Person (other than a Subsidiary) which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, “control” of a
Person (including, with its correlative meanings, “controlled by” and “under
common control with”) means the power, directly or indirectly, either to
(a) vote 30% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
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 Collateral Trustee, Administrative Agent or
any BNPP Secured Party solely in their capacity as such.

“Agreement”: as defined in the Preamble.

“BNPP Credit Agreement”: as defined in the Recitals.

“BNPP Loan Documents”: the “Loan Documents”, as defined in the BNPP Credit
Agreement.

“BNPP Notice of Default”: written notice delivered by the Administrative Agent
to the Collateral Trustee that an “Event of Default” (as defined in the BNPP
Credit Agreement) has occurred.

“BNPP Obligations”: the “Obligations”, as defined in the BNPP Credit Agreement.

“BNPP Secured Parties”: as defined in the BNPP Security Agreement.

“BNPP Security Agreement”: as defined in the Recitals.

“BNPP Trust Estate”: as defined in Section 2.1.

“Cheniere Energy”: as defined in the Recitals.

“Collateral”: those properties and assets of the Company now owned or hereafter
acquired in which Liens have been granted to the Collateral Trustee to secure
the Secured Obligations, excluding any properties and assets in which the
Collateral Trustee has released its Liens pursuant to

 

-2-

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

Section 3.2; provided, that, if such Liens are released as a result of the sale,
transfer or other disposition of any properties or assets of the Company, such
assets or properties will cease to be excluded from the Collateral if the
Company thereafter acquires or reacquires such assets or properties.

“Collateral Trustee”: as defined in the Preamble.

“Company”: as defined in the Preamble.

“Crest”: as defined in the Recitals.

“Crest Notice of Default”: written notice delivered by Crest to the Collateral
Trustee that Crest has not received current payments of the Royalty pursuant to
the Crest Settlement Documents.

“Crest Obligation”: as defined in the Security Agreement.

“Crest Settlement Agreement”: as defined in the Recitals.

“Crest Settlement Documents”: as defined in the BNPP Credit Agreement.

“Crest Trust Estate”: as defined in Section 2.2.

“CXY”: as defined in the Recitals.

“Discharge of Obligations”: the occurrence of all of the following:

(a) payment in full in cash of all BNPP Obligations that are outstanding and
unpaid at the time; and

(b) termination or expiration of all commitments to extend credit that would
constitute BNPP Obligations.

“Indemnified Liabilities”: as defined in Section 7.9(a).

“Indemnitee”: as defined in Section 7.9(a).

“Insolvency or Liquidation Proceeding”:

(a) any case commenced by or against the Company under Title 11, U.S. Code or
any similar federal or state law for the relief of debtors, any other proceeding
for the reorganization, recapitalization or adjustment or marshalling of the
assets or liabilities of the Company, any receivership or assignment for the
benefit of creditors relating to the Company or any similar case or proceeding
relative to the Company or its creditors, as such, in each case whether or not
voluntary;

(b) any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to the Company, in each case whether or not voluntary
and whether or not involving bankruptcy or insolvency; or

(c) any other proceeding of any type or nature in which substantially all claims
of creditors of the Company are determined and any payment or distribution is or
may be made on account of such claims.

 

-3-

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

“Person”: any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.

“Secured Obligation Default”: (i) in the case of the BNPP Credit Agreement, any
event or condition which, under the terms of the BNPP Loan Documents, causes, or
permits holders of BNPP Obligations outstanding thereunder (with or without the
giving of notice or lapse of time, or both, and whether or not notice has been
given or time has lapsed) to cause, the BNPP Obligations outstanding thereunder
to become immediately due and payable and (ii) in the case of the Crest
Obligations, the failure of Crest to timely receive payment owing to it in
respect of the Royalty.

“Secured Obligation Documents”: the BNPP Loan Documents and the Crest Settlement
Documents.

“Secured Obligations”: the BNPP Obligations and the Crest Obligation.

“Secured Parties”: the holders of Secured Obligations.

“Security Documents”: as defined in the BNPP Credit Agreement.

“Trust Estates” as defined in Section 2.2.

“UCC”: the Uniform Commercial Code as in effect in the State of New York or any
other applicable jurisdiction.

Section 1.2 Rules of Interpretation.

(a) All terms used in this Agreement that are defined in the UCC and not
otherwise defined herein have the meanings assigned to them in the UCC.

(b) Unless otherwise indicated, any reference to any agreement or instrument
will be deemed to include a reference to that agreement or instrument as
assigned, amended, supplemented, amended and restated, or otherwise modified and
in effect from time to time or replaced in accordance with the terms of this
Agreement.

(c) The use in this Agreement or any of the other Security Documents of the word
“include” or “including,” when following any general statement, term or matter,
will not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not non-limiting language (such as “without limitation”
or “but not limited to” or words of similar import) is used with reference
thereto, but will be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
The word “will” shall be construed to have the same meaning and effect as the
word “shall.”

(d) References to “Sections,” “clauses,” “Recitals” and the “Preamble” will be
to Sections, clauses, Recitals and the Preamble, respectively, of this Agreement
unless otherwise specifically provided. References to “Articles” will be to
Articles of this Agreement unless otherwise specifically provided. References to
“Schedules” will be to Schedules to this Agreement unless otherwise specifically
provided.

(e) Notwithstanding anything to the contrary in this Agreement, any references
contained herein to any section, clause, paragraph, definition or other
provision of the BNPP Credit Agreement (including any definition contained
therein) shall be deemed to be a reference to such section, clause, paragraph,
definition or other provision as in effect on the date of this Agreement.

 

-4-

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

ARTICLE 2

THE TRUST ESTATES

Section 2.1 Declaration of BNPP Trust.

(a) To secure the payment of the BNPP Obligations and in consideration of the
mutual agreements set forth in this Agreement, the Company hereby grants to the
Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to
hold, in trust under this Agreement for the benefit of the BNPP Secured Parties,
all of the Company’s right, title and interest in, to and under all Collateral
granted to the Collateral Trustee under any Security Document for the benefit of
the BNPP Secured Parties, together with all of the Collateral Trustee’s right,
title and interest in, to and under the Security Documents, and all interests,
rights, powers and remedies of the Collateral Trustee thereunder or in respect
thereof and all cash and non-cash proceeds thereof (collectively, the “BNPP
Trust Estate”).

(b) The Collateral Trustee and its successors and assigns under this Agreement
will hold the BNPP Trust Estate in trust for the benefit solely and exclusively
of the BNPP Secured Parties, as security for the payment of all present and
future BNPP Obligations, subject to the terms and conditions of this Agreement.

(c) Notwithstanding the foregoing, if at any time:

(1) all Liens securing the BNPP Obligations have been released as provided in
Section 4.1;

(2) the Collateral Trustee holds no other property in trust as part of the BNPP
Trust Estate;

(3) no monetary obligation (other than indemnification and other contingent
obligations not then due and payable) is outstanding and payable under this
Agreement to the Collateral Trustee or any of its co-trustees or agents (whether
in an individual or representative capacity); and

(4) the Company delivers to the Collateral Trustee an opinion of counsel to the
Company stating that all Liens of the Collateral Trustee securing the BNPP
Obligations have been released in compliance with all applicable provisions of
the BNPP Loan Documents and that the Company is not required by any BNPP Loan
Document to grant any Lien securing the BNPP Obligations upon any property,

then the BNPP Trust Estate will terminate, except that all provisions set forth
in Sections 7.8 and 7.9 that are enforceable by the Collateral Trustee or any of
its co-trustees or agents (whether in an individual or representative capacity)
will remain enforceable in accordance with their terms.

(d) The parties further declare and covenant that the BNPP Trust Estate will be
held and distributed by the Collateral Trustee subject to the further agreements
herein.

Section 2.2 Declaration of Crest Trust.

(a) To secure the payment of the Crest Obligation and in consideration of the
mutual agreements set forth in this Agreement, the Company hereby grants to the
Collateral Trustee, and the Collateral Trustee hereby accepts and agrees to
hold, in trust under this Agreement for the benefit of Crest, all of the
Company’s right, title and interest in, to and under all Collateral granted to
the Collateral

 

-5-

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

Trustee under any Security Document for the benefit of Crest, together with all
of the Collateral Trustee’s right, title and interest in, to and under the
Security Documents, and all interests, rights, powers and remedies of the
Collateral Trustee thereunder or in respect thereof and all cash and non-cash
proceeds thereof (collectively, the “Crest Trust Estate,” and together with the
BNPP Trust Estate, the “Trust Estates”).

(b) The Collateral Trustee and its successors and assigns under this Agreement
will hold the Crest Trust Estate in trust for the benefit solely and exclusively
of Crest as security for the payment of the present and future Crest Obligation,
subject to the terms and conditions of this Agreement.

(c) Notwithstanding the foregoing, if at any time all Liens securing the BNPP
Obligations or the Crest Obligation have been released as provided in
Section 4.1, then the Crest Trust Estate will terminate, it being agreed that
the Crest Trust Estate will terminate, ipso facto, upon the termination of the
BNPP Trust Estate.

(d) The parties further declare and covenant that the Crest Trust Estate will be
held and distributed by the Collateral Trustee subject to the further agreements
herein.

Section 2.3 Priority of Liens. Notwithstanding anything else contained herein or
in any other Security Document, it is the intent of the parties that:

(a) this Agreement and the other Security Documents create two separate and
distinct Trust Estates: (A) the Crest Trust Estate in respect of the Liens
granted to the Collateral Trustee in favor of Crest securing the payment and
performance of the Crest Obligation and (B) the BNPP Trust Estate in respect of
the Liens granted to the Collateral Trustee in favor of the BNPP Secured Parties
securing the payment and performance of the BNPP Obligations; and

(b) the Liens securing the BNPP Obligations are subject and subordinate to the
Liens securing the Crest Obligation, as, and to the extent, provided herein.

Section 2.4 Discretion in Enforcement of Liens. In exercising rights and
remedies with respect to the Collateral, the Collateral Trustee may enforce (or
refrain from enforcing) the provisions of the Security Documents and exercise
(or refrain from exercising) remedies thereunder or any such rights and
remedies, all in such order and in such manner as it may determine in the
exercise of its sole and exclusive discretion, including:

(a) the exercise or forbearance from exercise of all rights and remedies in
respect of the Collateral;

(b) the enforcement or forbearance from enforcement of any Lien in respect of
the Collateral;

(c) the acceptance of the Collateral in full or partial satisfaction of the
Secured Obligations; and

(d) the exercise or forbearance from exercise of all rights and remedies of a
secured lender under the UCC or any similar law of any applicable jurisdiction
or in equity.

 

-6-

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

ARTICLE 3

OBLIGATIONS AND POWERS OF COLLATERAL TRUSTEE

Section 3.1 Undertaking of the Collateral Trustee.

(a) Subject to, and in accordance with, this Agreement, the Collateral Trustee
will, as trustee, for the benefit solely and exclusively of the present and
future Secured Parties:

(1) accept, enter into, hold, maintain, administer and enforce all Security
Documents, including all Collateral subject thereto, and all Liens created
thereunder, perform its obligations under the Security Documents and protect,
exercise and enforce the interests, rights, powers and remedies granted or
available to it under, pursuant to or in connection with the Security Documents;

(2) take all lawful and commercially reasonable actions permitted under the
Security Documents that it may deem necessary or advisable to protect or
preserve its interest in the Collateral subject thereto and such interests,
rights, powers and remedies;

(3) deliver and receive notices pursuant to the Security Documents;

(4) sell, assign, collect, assemble, foreclose on, institute legal proceedings
with respect to, or otherwise exercise or enforce the rights and remedies of a
secured party (including a mortgagee, trust deed beneficiary and insurance
beneficiary or loss payee) with respect to the Collateral under the Security
Documents and its other interests, rights, powers and remedies;

(5) remit as provided in Section 3.4 all cash proceeds received by the
Collateral Trustee from the collection, foreclosure or enforcement of its
interest in the Collateral under the Security Documents or any of its other
interests, rights, powers or remedies;

(6) execute and deliver amendments to the Security Documents as from time to
time authorized pursuant to Section 7.1 accompanied by an opinion of counsel to
the Company to the effect that the amendment was permitted under Section 7.1;
and

(7) release any Lien granted to it by any Security Document upon any Collateral
if and as required by Section 4.1.

(b) Notwithstanding anything to the contrary contained in this Agreement, the
Collateral Trustee will not commence any exercise of remedies or any foreclosure
actions or otherwise take any action or proceeding against any of the Collateral
(other than actions that it may deem necessary or advisable to prove, protect or
preserve the Liens securing the Secured Obligations) unless and until it shall
have been directed by written notice from the Administrative Agent or Crest, and
then only in accordance with the provisions of this Agreement.

Section 3.2 Release or Subordination of Liens. The Collateral Trustee will not
release or subordinate any Lien of the Collateral Trustee or consent to the
release or subordination of any Lien of the Collateral Trustee, except:

(a) as directed by the Administrative Agent;

(b) as required by Article 4; or

 

-7-

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

(c) as ordered pursuant to applicable law under a final (after any applicable
appeals to the extent such order has been stayed) order or judgment of a court
of competent jurisdiction.

Section 3.3 Enforcement of Liens.

(a) Subject to Section 3.3(c), if the Collateral Trustee at any time receives
written notice that any event has occurred that constitutes a default under any
BNPP Loan Document entitling the Collateral Trustee to foreclose upon, collect
or otherwise enforce its Liens hereunder, the Collateral Trustee will promptly
deliver written notice thereof to the Administrative Agent.

(b) Following the delivery of written notice to the Administrative Agent
pursuant to Section 3.3(a), the Collateral Trustee shall await direction by the
Administrative Agent and, so long as the Collateral Agent shall not have also
received a Crest Notice of Default, will act, or decline to act, as directed by
the Administrative Agent, in the exercise and enforcement of the Collateral
Trustee’s interests, rights, powers and remedies in respect of the Collateral or
under the Security Documents or applicable law and, following the initiation of
such exercise of remedies, the Collateral Trustee will act, or decline to act,
with respect to the manner of such exercise of remedies as directed by the
Administrative Agent.

(c) If the Collateral Trustee has received a Crest Notice of Default from Crest,
the Collateral Trustee shall await direction by Crest and will act, or decline
to act, as directed by Crest, in the exercise and enforcement of the Collateral
Trustee’s interests, rights, powers and remedies in respect of the Collateral or
under the Security Documents or applicable law and, following the initiation of
such exercise of remedies, the Collateral Trustee will act, or decline to act,
with respect to the manner of such exercise of remedies as directed by Crest.

(d) Unless it has been directed to the contrary by the Administrative Agent or
Crest, the Collateral Trustee in any event may (but will not be obligated to)
take or refrain from taking such action with respect to the Collateral as it may
deem advisable and in the best interest of the Secured Parties.

(e) If the Collateral Trustee receives inconsistent directions from Crest and
the Administrative Agent, the Collateral Trustee shall follow the instructions
of Crest and so advise the Administrative Agent.

Section 3.4 Application of Proceeds.

(a) Prior to the delivery of a Crest Notice of Default to the Collateral Trustee
by Crest, upon delivery to the Collateral Trustee of a BNPP Notice of Default,
the Collateral Trustee will apply the proceeds of any collection, sale,
foreclosure or other realization upon any Collateral in the following order of
application:

First, to the payment of all reasonable legal fees and expenses and other
reasonable costs or expenses or other liabilities or amounts of any kind
incurred by, or owing to, the Collateral Trustee or any co-trustee or agent
under or in connection with any Security Document that secures the Secured
Obligations, including the reimbursement to the Collateral Trustee of any
amounts theretofore advanced by the Collateral Trustee for the payment of such
fees, costs and expenses, liabilities or amounts;

Second, to the Administrative Agent for application pursuant to the applicable
BNPP Loan Documents, until paid in full; and

 

-8-

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

Third, any surplus remaining after the payment in full in cash of amounts
described in the preceding clauses will be paid to the Company, as the case may
be, its successors or assigns, or as a court of competent jurisdiction may
direct.

(b) Following the delivery of a Crest Notice of Default to the Collateral
Trustee by Crest, the Collateral Trustee will apply the proceeds of any
collection, sale, foreclosure or other realization upon any Collateral in the
following order of application:

First, to the payment of all reasonable legal fees and expenses and other
reasonable costs or expenses or other liabilities or amounts of any kind
incurred by, or owing to, the Collateral Trustee or any co-trustee or agent
under or in connection with any Security Document that secures the Secured
Obligations, including the reimbursement to the Collateral Trustee of any
amounts theretofore advanced by the Collateral Trustee for the payment of such
fees, costs and expenses, liabilities or amounts;

Second, to the payment of any unpaid Crest Obligation (as such amount may have
been established by a court of competent jurisdiction);

Third, to the Administrative Agent for application pursuant to the applicable
BNPP Loan Documents, until paid in full; and

Fourth, any surplus remaining after the payment in full in cash of amounts
described in the preceding clauses will be paid to the Company, as the case may
be, its successors or assigns, or as a court of competent jurisdiction may
direct.

(c) This Section 3.4 is intended for the benefit of, and will be enforceable as
a third party beneficiary by, each present and future holder of Secured
Obligations, each present and future Administrative Agent and the Collateral
Trustee as holder of Liens securing the Secured Obligations.

(d) In connection with the application of proceeds pursuant to Section 3.4(a) or
Section 3.4(b), except as otherwise directed by the Administrative Agent, the
Collateral Trustee may sell any non-cash proceeds for cash prior to the
application of the proceeds thereof.

Section 3.5 Powers of the Collateral Trustee.

(a) The Collateral Trustee is irrevocably authorized and empowered to enter into
and perform its obligations and protect, perfect, exercise and enforce its
interest, rights, powers and remedies under the Security Documents and
applicable law and in equity and to act as set forth in this Article 3 or as
requested in any lawful directions given to it from time to time in respect of
any matter by the Administrative Agent.

(b) Neither any BNPP Secured Party nor Crest will have any liability whatsoever
for any act or omission of the Collateral Trustee.

Section 3.6 Documents and Communications. The Collateral Trustee will permit the
Administrative Agent upon reasonable written notice from time to time to inspect
and copy, at the cost and expense of the party requesting such copies, any and
all Security Documents and other documents, notices, certificates, instructions
or communications received by the Collateral Trustee in its capacity as such.

 

-9-

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

Section 3.7 For Sole and Exclusive Benefit of Secured Parties. The Collateral
Trustee will accept, hold, administer and enforce all Liens on the Collateral at
any time transferred or delivered to it and all other interests, rights, powers
and remedies at any time granted to or enforceable by the Collateral Trustee and
all other property of the BNPP Trust Estate solely and exclusively for the
benefit of the present and future holders of present and future BNPP Obligations
or, in the case of the Crest Trust Estate, Crest, and will distribute all
proceeds received by it in realization thereon or from enforcement thereof
solely and exclusively pursuant to the provisions of Section 3.4.

ARTICLE 4

OBLIGATIONS ENFORCEABLE BY THE COMPANY

Section 4.1 Release of Liens on Collateral.

(a) The Collateral Trustee’s Liens upon the Collateral will be released as
follows:

(1) in whole, upon the Discharge of the BNPP Obligations irrespective of the
existence, vel non, of any Crest Obligation at such time;

(2) as to a release of less than all or substantially all of the Collateral, if
(A) consent to the release of all Liens on such Collateral has been given by the
Administrative Agent and (B) such release has become effective in accordance
with the terms of such consent;

(3) as to (A) deposits in any cash collateral account that are to be applied to
fund any mandatory prepayment that becomes required as to any Secured
Obligations as a result of a sale of assets, concurrently with such application,
so long as effective provision is made for apportionment of such funding to all
holders of Secured Obligations entitled to participate in such mandatory
prepayment or purchase offer in accordance with their respective entitlements
under the Secured Obligation Documents; and (B) deposits in any cash collateral
account that constitute proceeds from an asset sale that are permitted under the
Secured Obligation Documents to be reinvested or otherwise are not required
under the Secured Obligation Documents to be reinvested or otherwise are not
required to be applied to a mandatory prepayment or purchase offer in respect of
any Secured Obligations, concurrently with such reinvestment in assets
constituting Collateral or other permitted use under the Secured Obligation
Documents;

(4) in accordance with the provisions of this Agreement and the other Security
Documents as in effect from time to time, as applicable;

(5) upon any sale, transfer or other disposition of Collateral if such sale,
transfer or other disposition is not prohibited by the terms of the BNPP Credit
Agreement or any other Secured Obligation Document; or

(6) as otherwise permitted by the BNPP Credit Agreement and each other Secured
Obligation Document.

(b) The Collateral Trustee hereby agrees that, in the case of any release
pursuant to clause (5) of Section 4.1(a), if the terms of any such sale,
transfer or other disposition require the payment of the purchase price to be
contemporaneous with the delivery of the applicable release, then, at the
written request of and at the expense of the Company, the Collateral Trustee
will either (A) be present at and deliver the release at the closing of such
transaction or (B) deliver the release under customary escrow arrangements that
permit such contemporaneous payment and delivery of the release.

 

-10-

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

Section 4.2 Collateral Trustee Not Required to Serve, File or Record. The
Collateral Trustee is not required to serve, file, register or record any
instrument releasing or subordinating its Liens on any Collateral; provided,
however, that if the Company shall make a written demand for a termination
statement under Section 9-513(c) of the UCC, the Collateral Trustee shall, at
the expense of the Company, comply with the written request of the Company to
comply with the requirements of such UCC provision; provided, further, that the
Collateral Trustee has first confirmed that the requirements of such UCC
provisions have been satisfied.

ARTICLE 5

IMMUNITIES OF THE COLLATERAL TRUSTEE

Section 5.1 No Implied Duty. The Collateral Trustee will not have any fiduciary
duties nor will it have responsibilities or obligations other than those
expressly assumed by it in this Agreement and the other Security Documents. The
Collateral Trustee will not be required to take any action that is contrary to
applicable law or any provision of this Agreement or the other Security
Documents.

Section 5.2 Appointment of Agents and Advisors. The Collateral Trustee may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, accountants, appraisers or
other experts or advisors selected by it in good faith as it may reasonably
require and will not be responsible for any misconduct or negligence on the part
of any of them.

Section 5.3 Other Agreements. The Collateral Trustee has accepted and is bound
by the Security Documents executed by the Collateral Trustee as of the date of
this Agreement and, as directed by the Administrative Agent, the Collateral
Trustee shall execute additional Security Documents delivered to it after the
date of this Agreement; provided, however, that such additional Security
Documents do not adversely affect the rights, privileges, benefits and
immunities of the Collateral Trustee or impose on the Collateral Trustee any
additional duties or obligations. The Collateral Trustee will not otherwise be
bound by, or be held obligated by, the provisions of any credit facility or
other agreement governing Secured Obligations (other than this Agreement and the
other Security Documents).

Section 5.4 Solicitation of Instructions.

(a) The Collateral Trustee may at any time solicit written confirmatory
instructions, in the form of a written confirmation from the Administrative
Agent, Crest or an order of a court of competent jurisdiction, as to any action
that it may be requested or required to take, or that it may propose to take, in
the performance of any of its obligations under this Agreement or the other
Security Documents.

(b) No written direction given to the Collateral Trustee by the Administrative
Agent or Crest that in the sole judgment of the Collateral Trustee imposes,
purports to impose or might reasonably be expected to impose upon the Collateral
Trustee any obligation or liability not set forth in or arising under this
Agreement and the other Security Documents will be binding upon the Collateral
Trustee unless the Collateral Trustee elects, at its sole option, to accept such
direction.

Section 5.5 Limitation of Liability. The Collateral Trustee will not be
responsible or liable for any action taken or omitted to be taken by it
hereunder or under any other Security Document, except for its own gross
negligence, unlawful acts, bad faith or willful misconduct as determined by a
court of competent jurisdiction in a final nonappealable judgment.

 

-11-

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

Section 5.6 Documents in Satisfactory Form. The Collateral Trustee will be
entitled to require that all agreements, certificates, opinions, instruments and
other documents at any time submitted to it, including those expressly provided
for in this Agreement, be delivered to it in a form and with substantive
provisions reasonably satisfactory to it.

Section 5.7 Entitled to Rely. The Collateral Trustee may seek and rely upon, and
shall be fully protected in relying upon, any judicial order or judgment, upon
any advice, opinion or statement of legal counsel (who may be counsel to the
Company), independent consultants and other experts selected by it in good faith
and upon any certification, instruction, notice or other writing delivered to it
by the Company in compliance with the provisions of this Agreement or delivered
to it by the Administrative Agent or Crest as to the holders of Secured
Obligations for whom it acts, without being required to determine the
authenticity thereof or the correctness of any fact stated therein or the
propriety or validity of service thereof. The Collateral Trustee may act in
reliance upon any instrument comporting with the provisions of this Agreement or
any signature reasonably believed by it to be genuine and may assume that any
Person purporting to give notice or receipt or advice or make any statement or
execute any document in connection with the provisions hereof or the other
Security Documents has been duly authorized to do so. To the extent an opinion
of counsel is required or permitted under this Agreement to be delivered to the
Collateral Trustee in respect of any matter, the Collateral Trustee may rely
conclusively on an opinion of counsel as to such matter and such opinion of
counsel shall be full warranty and protection to the Collateral Trustee for any
action taken, suffered or omitted by it under the provisions of this Agreement
and the other Security Documents.

Section 5.8 Secured Obligation Default. The Collateral Trustee will not be
required to inquire as to the occurrence or absence of any Secured Obligation
Default and will not be affected by or required to act upon any notice or
knowledge as to the occurrence of any Secured Obligation Default unless and
until it is directed by the Administrative Agent.

Section 5.9 Actions by Collateral Trustee. As to any matter not expressly
provided for by this Agreement or the other Security Documents, the Collateral
Trustee will act or refrain from acting as directed by the Administrative Agent
or Crest and will be fully protected if it does so, and any action taken,
suffered or omitted pursuant to hereto or thereto shall be binding on the
holders of Secured Obligations.

Section 5.10 Security or Indemnity in Favor of the Collateral Trustee. The
Collateral Trustee will not be required to advance or expend any funds or
otherwise incur any financial liability in the performance of its duties or the
exercise of its powers or rights hereunder unless it has been provided with
security or indemnity reasonably satisfactory to it against any and all
liability or expense which may be incurred by it by reason of taking or
continuing to take such action.

Section 5.11 Rights of the Collateral Trustee. In the event of any conflict
between any terms and provisions set forth in this Agreement and those set forth
in any other Security Document, the terms and provisions of this Agreement shall
supersede and control the terms and provisions of such other Security Document.
In the event there is any good faith disagreement between the other parties to
this Agreement or any of the other Security Documents resulting in adverse
claims being made in connection with Collateral held by the Collateral Trustee
and the terms of this Agreement or any of the other Security Documents do not
unambiguously mandate the action the Collateral Trustee is to take or not to
take in connection therewith under the circumstances then existing, or the
Collateral Trustee is in doubt as to what action it is required to take or not
to take hereunder or under the other Security Documents, it will be entitled to
refrain from taking any action (and will incur no liability for doing so) until
directed otherwise in writing by a request signed jointly by the parties hereto
entitled to give such direction or by order of a court of competent
jurisdiction.

 

-12-

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

Section 5.12 Limitations on Duty of Collateral Trustee in Respect of Collateral.

(a) Beyond the exercise of reasonable care in the custody of Collateral in its
possession, the Collateral Trustee will have no duty as to any Collateral in its
possession or control or in the possession or control of any agent or bailee or
any income thereon or as to preservation of rights against prior parties or any
other rights pertaining thereto and the Collateral Trustee will not be
responsible for filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any Liens on the Collateral. The
Collateral Trustee will be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property, and the
Collateral Trustee will not be liable or responsible for any loss or diminution
in the value of any of the Collateral by reason of the act or omission of any
carrier, forwarding agency or other agent or bailee selected by the Collateral
Trustee in good faith.

(b) The Collateral Trustee will not be responsible for the existence,
genuineness or value of any of the Collateral, for the validity, perfection,
priority or enforceability of the Liens in any of the Collateral, whether
impaired by operation of law or by reason of any action or omission to act on
its part hereunder, except to the extent such action or omission constitutes
gross negligence, bad faith or willful misconduct on the part of the Collateral
Trustee, for the validity or sufficiency of the Collateral or any agreement or
assignment contained therein, for the validity of the title of the Company to
the Collateral, for insuring the Collateral or for the payment of taxes,
charges, assessments or Liens upon the Collateral or otherwise as to the
maintenance of the Collateral. The Collateral Trustee hereby disclaims any
representation or warranty to the present and future holders of the Secured
Obligations concerning the perfection of the Liens granted hereunder or in the
value of any of the Collateral.

Section 5.13 Assumption of Rights, Not Assumption of Duties. Notwithstanding
anything to the contrary contained herein:

(1) each of the parties thereto will remain liable under each of the Security
Documents (other than this Agreement) to the extent set forth therein to perform
all of their respective duties and obligations thereunder to the same extent as
if this Agreement had not been executed;

(2) the exercise by the Collateral Trustee of any of its rights, remedies or
powers hereunder will not release such parties from any of their respective
duties or obligations under the other Security Documents; and

(3) the Collateral Trustee will not be obligated to perform any of the
obligations or duties of any of the parties thereunder other than the Collateral
Trustee.

Section 5.14 No Liability for Clean Up of Hazardous Materials. In the event that
the Collateral Trustee is requested to acquire title to, or any interest in, an
asset for any reason, or take any managerial or other action of any kind in
regard thereto, in order to carry out any obligation for the benefit of another,
which in the Collateral Trustee’s sole discretion may cause the Collateral
Trustee to be considered an “owner or operator” under any environmental laws or
otherwise cause the Collateral Trustee to incur, or be exposed to, any
environmental liability or any liability under any other federal, state or local
law, the Collateral Trustee shall not be required to acquire such title or
interest therein and reserves the right, instead of taking such action, either
to resign as Collateral Trustee or to arrange for the transfer of the title,
interest or control of the asset to a court appointed receiver. The Collateral
Trustee will not be liable to any Person for any environmental liability or any
environmental claims or contribution actions under any federal, state or local
law, rule or regulation by reason of the Collateral

 

-13-

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

Trustee’s actions and conduct as authorized, empowered and directed hereunder or
relating to any kind of discharge or release or threatened discharge or release
of any hazardous materials into the environment.

Section 5.15 Additional Provisions Relating to the Collateral Trustee.

(a) The Collateral Trustee may refuse to follow any direction that conflicts
with law or this Agreement, the BNPP Credit Agreement, the Crest Settlement
Agreement or any of the Security Documents or that would involve the Collateral
Trustee in personal liability; provided that, the Collateral Trustee may take
any other action deemed proper by the Collateral Trustee that is not
inconsistent with such direction. Prior to taking any action under this
Agreement or any of the Security Documents, the Collateral Trustee shall be
entitled to indemnification reasonably satisfactory to it against all losses and
expenses caused by taking or not taking such action.

(b) The Collateral Trustee shall be accountable only for amounts that it
actually receives as a result of the exercise of its powers hereunder and under
any Security Document, and neither it nor any of its officers, directors,
employees or agents shall have any duty or liability or be responsible to the
Company for any act or failure to act hereunder, except for its own gross
negligence, unlawful acts, bad faith or willful misconduct. Nothing contained in
this Agreement shall be construed as requiring or obligating the Collateral
Trustee, and the Collateral Trustee shall not, absent a written request by the
Administrative Agent or Crest, be required or obligated, to (i) present or file
any claim or notice or take any action with respect to any Collateral or in
connection therewith or (ii) notify the Company of any decline in the value of
any Collateral.

(c) Neither the Collateral Trustee nor any of its directors, officers, employees
or agents shall be liable for failure to demand, collect or realize upon all or
any part of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Company.

(d) No provision of this Agreement or any Security Document shall be deemed to
impose any duty or obligation on the Collateral Trustee to perform any act or
acts, receive or obtain any interest in property or exercise any interest in
property, or exercise any right, power, duty or obligation conferred or imposed
on it in any jurisdiction in which it shall be illegal, or in which the
Collateral Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, to receive or obtain any such
interest in property or to exercise any such right, power, duty or obligation;
and no permissive or discretionary power or authority available to the
Collateral Trustee shall be construed to be a duty.

(e) In no event shall the Collateral Trustee be liable for any failure or delay
in the performance of its obligations hereunder or under any of the other
Security Documents because of circumstances beyond the Collateral Trustee’s
control, including, acts of God, flood, war (whether declared or undeclared),
terrorism, fire, riot, strikes or work stoppages for any reason, embargo,
government action, including any laws, ordinances, regulations or the like which
restrict or prohibit the providing of the services contemplated by this
Agreement, or the failure of equipment or interruption of communications or
computer facilities, and other, causes beyond the Collateral Trustee’s control
whether or not of the same class or kind as specifically named above.

(f) The Collateral Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement or any of the other Security Documents.

 

-14-

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

(g) Notwithstanding anything to the contrary contained in this Agreement or any
of the other Security Documents, under no circumstances shall the Collateral
Trustee be liable for any special, punitive, exemplary or consequential damages.

(h) The Collateral Trustee shall have no liability to the Company for interest
on any money received by it under this Agreement or any of the other Security
Documents except as otherwise agreed in writing with the Company.

Section 5.16 Appointment of Co-Collateral Trustee.

(a) Solely for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located, the Collateral
Trustee shall have the power and may execute and deliver all instruments
necessary to appoint one or more Persons to act as a co-collateral trustee or
separate collateral trustee or separate collateral trustees, of all or any part
of the Collateral, and to vest in such Person or Persons, in such capacity and
for the benefit of the Secured Parties, such title to the Collateral, or any
part hereof, and subject to the other provisions of this Section, such powers,
duties, obligations, and rights as the Collateral Trustee may consider necessary
or desirable. No co-collateral trustee or separate collateral trustee hereunder
shall be required to meet the terms of eligibility as a successor Collateral
Trustee under Section 6.2 and no notice to the Secured Parties of the
appointment of any co-collateral trustee or separate collateral trustee shall be
required under this Agreement or any of the other Security Documents.

(b) Every separate collateral trustee and co-collateral trustee shall, to the
extent permitted by law, be appointed and act subject to the following
provisions and conditions:

(1) all rights, powers, duties and obligations conferred or imposed upon the
Collateral Trustee shall be conferred or imposed upon and exercised or performed
by the Collateral Trustee and such separate collateral trustee or co-collateral
trustee jointly (it being understood that such separate collateral trustee or
co-collateral trustee is not authorized to act separately without the Collateral
Trustee joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Collateral Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the
holding of title to the Collateral or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such separate
collateral trustee or co-collateral trustee, but solely at the direction of the
Collateral Trustee;

(2) no collateral trustee shall be personally liable by reason of any act or
omission of any other collateral trustee under the Security Documents; and

(3) the Collateral Trustee may at any time accept the resignation of or remove
any separate collateral trustee or co-collateral trustee.

(c) Any notice, request or other writing given to the Collateral Trustee shall
be deemed to have been given to each of the then separate collateral trustees
and co-collateral trustees, as effectively as if given to each of them. Every
instrument appointing any separate collateral trustee or co-collateral trustee
shall refer to this Agreement and the conditions of this Section 5.16. Each
separate collateral trustee and co-collateral trustee, upon its acceptance of
the obligations conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Collateral
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
or rights (including the rights to compensation, reimbursement and
indemnification hereunder) to, the Collateral Trustee. Every such instrument
shall be filed with the Collateral Trustee.

 

-15-

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

(d) Any separate collateral trustee or co-collateral trustee may at any time
constitute the Collateral Trustee its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
collateral trustee or co-collateral trustee shall die, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and obligations shall vest in and be exercised by the Collateral Trustee, to the
extent permitted by law, without the appointment of a new or successor
collateral trustee.

ARTICLE 6

RESIGNATION OR REMOVAL OF THE COLLATERAL TRUSTEE

Section 6.1 Resignation or Removal of Collateral Trustee. Subject to the
appointment of a successor Collateral Trustee as provided in Section 6.2 and the
acceptance of such appointment by the successor Collateral Trustee:

(a) the Collateral Trustee may resign at any time by giving not less than
30 days’ notice of resignation to the Administrative Agent and the Company; and

(b) the Collateral Trustee may be removed at any time, with or without cause, by
the Administrative Agent.

Section 6.2 Appointment of Successor Collateral Trustee.

(a) Upon any such resignation or removal, a successor Collateral Trustee may be
appointed by the Administrative Agent. If no successor Collateral Trustee has
been so appointed and accepted such appointment within 30 days after the
predecessor Collateral Trustee gave notice of resignation or was removed, the
retiring Collateral Trustee may (at the expense of the Company), at its option,
appoint a successor Collateral Trustee, or petition a court of competent
jurisdiction for appointment of a successor Collateral Trustee, which must be a
bank or trust company:

(1) authorized to exercise corporate trust powers;

(2) having a combined capital and surplus of at least $500,000,000; and

(3) maintaining an office in New York, New York.

(b) The Collateral Trustee will fulfill its obligations hereunder until a
successor Collateral Trustee meeting the requirements of this Section 6.2 has
accepted its appointment as Collateral Trustee and the provisions of Section 6.3
have been satisfied.

Section 6.3 Succession.

(a) When the Person so appointed as successor Collateral Trustee accepts such
appointment:

(1) such Person will succeed to and become vested with all the rights, powers,
privileges and duties of the predecessor Collateral Trustee, and the predecessor
Collateral Trustee will be discharged from its duties and obligations hereunder;
and

 

-16-

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

(2) the predecessor Collateral Trustee will (at the expense of the Company)
promptly transfer all Liens and collateral security and other property of the
Trust Estates within its possession or control to the possession or control of
the successor Collateral Trustee and will execute instruments and assignments as
may be necessary or desirable or reasonably requested by the successor
Collateral Trustee to transfer to the successor Collateral Trustee all Liens,
interests, rights, powers and remedies of the predecessor Collateral Trustee in
respect of the Security Documents or the Trust Estates.

(b) Thereafter, the predecessor Collateral Trustee will remain entitled to
enforce the immunities granted to it in Article 5 and the provisions of
Sections 7.8 and 7.9.

Section 6.4 Merger, Conversion or Consolidation of Collateral Trustee. Any
Person into which the Collateral Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Collateral Trustee shall be a party, or
any Person succeeding to all or substantially all of the corporate trust
business of the Collateral Trustee shall be the successor of the Collateral
Trustee pursuant to Section 6.3, provided that without the execution or filing
of any paper with any party hereto or any further act on the part of any of the
parties hereto, except where an instrument of transfer or assignment is required
by law to effect such succession, anything herein to the contrary
notwithstanding, such Person satisfies the eligibility requirements specified in
clauses (1) through (3) of Section 6.2.

ARTICLE 7

MISCELLANEOUS PROVISIONS

Section 7.1 Amendment.

(a) No amendment or supplement to the provisions of any Security Document will
be effective without the approval of the Collateral Trustee acting as directed
by the Administrative Agent, except that:

(1) any amendment or supplement that has the effect solely of (i) adding or
maintaining Collateral, securing additional Secured Obligations that were
otherwise permitted by the terms of the Secured Obligation Documents to be
secured by the Collateral or preserving, perfecting or establishing the Liens
thereon or the rights of the Collateral Trustee therein; (ii) curing any
ambiguity, defect or inconsistency; (iii) providing for the assumption of the
Company’s obligations under any Security Document in the case of a merger or
consolidation or sale of all or substantially all of the Company’s assets, as
applicable; (iv) releasing the Company from a Security Document and the
termination of such Security Document, all in accordance with the provisions of
the BNPP Credit Agreement governing such release and termination; (v) making any
change that would provide any additional rights or benefits to the Secured
Parties or the Collateral Trustee or that does not adversely affect the legal
rights under the BNPP Credit Agreement or any other Secured Obligation Document
of any Lender, any other Secured Party or the Collateral Trustee; or (vi) adding
any Security Document, will, in each case, become effective when executed and
delivered by the Company and the Collateral Trustee; and

(2) no amendment or supplement that imposes any obligation upon the Collateral
Trustee or the Administrative Agent or adversely affects the rights of the
Collateral Trustee or the Administrative Agent will become effective without the
additional consent of the Collateral Trustee or the Administrative Agent.

 

-17-

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

(b) The Collateral Trustee will not enter into any amendment or supplement
unless it has received an opinion of counsel to the Company to the effect that
such amendment or supplement will not result in a breach of any provision or
covenant contained in any of the Secured Obligation Documents. Prior to
executing any amendment or supplement pursuant to this Section 7.1, the
Collateral Trustee will be entitled to receive an opinion of counsel of the
Company to the effect that the execution of such document is authorized or
permitted hereunder, and with respect to amendments adding Collateral, an
opinion of counsel of the Company addressing customary perfection, and if such
additional Collateral consists of equity interests of any Person, priority
matters with respect to such additional Collateral.

Section 7.2 Further Assurances; Insurance.

(a) The Company will do or cause to be done all acts and things that may be
required, or that the Collateral Trustee from time to time may reasonably
request, to assure and confirm that the Collateral Trustee holds, for the
benefit of the holders of Secured Obligations, duly created and enforceable and
perfected Liens upon the Collateral (including any property or assets that are
acquired or otherwise become Collateral after the date hereof), in each case as
contemplated by, and with the Lien priority required under, the Secured
Obligation Documents.

(b) Upon the reasonable request of the Collateral Trustee or the Administrative
Agent at any time and from time to time, the Company will promptly execute,
acknowledge and deliver such security documents, instruments, certificates,
notices and other documents, and take such other actions as may be reasonably
required, or that the Collateral Trustee may reasonably request, to create,
perfect, protect, assure or enforce the Liens and benefits intended to be
conferred, in each case as contemplated by the Secured Obligation Documents for
the benefit of holders of Secured Obligations.

(c) The Company will maintain insurance as may be required by the BNPP Credit
Agreement or any other Secured Obligation Document or by law. Upon request of
the Collateral Trustee, the Company will furnish to the Collateral Trustee full
information as to their property and liability insurance carriers.

(d) All insurance policies required by Section 7.2(c) will:

(1) provide that, with respect to third party liability insurance, the
Collateral Trustee, for the benefit of the Secured Parties, shall be named as an
additional insured, with a waiver of subrogation;

(2) name the Collateral Trustee, for the benefit of the Secured Parties, as a
loss payee and additional insured for amounts in excess of $5,000,000; and

(3) provide that (x) no cancellation or termination of such insurance shall be
effective until 30 days after written notice is given by the insurers to the
Collateral Trustee of such cancellation or termination, (provided that only
10 days written notice is required if such cancellation or termination is as a
result of the non-payment of premiums).

(e) Upon the request of the Collateral Trustee, the Company will permit the
Collateral Trustee or any of its agents or representatives, at reasonable times
and intervals upon reasonable prior notice, to visit their offices and sites and
inspect any of the Collateral and to discuss matters relating to the Collateral
with their respective officers and independent public accountants. The Company
shall, at any reasonable time and from time to time upon reasonable prior
notice, permit the Collateral Trustee or any of its agents or representatives to
examine and make copies of and abstracts from the records and books of account
of the Company and its Subsidiaries, all at the Company’s expense.

 

-18-

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

Section 7.3 Successors and Assigns.

(a) Except as provided in Section 5.2 and 5.16, the Collateral Trustee may not,
in its capacity as such, delegate any of its duties or assign any of its rights
hereunder, and any attempted delegation or assignment of any such duties or
rights shall be null and void.

(b) All obligations of the Collateral Trustee hereunder will inure to the sole
and exclusive benefit of, and be enforceable by, the Administrative Agent, on
its own behalf and on behalf of each present and future holder of Secured
Obligations, who will be entitled to enforce this Agreement as a third-party
beneficiary hereof, and all of their respective successors and assigns.

(c) The Company may not delegate any of its duties, except in accordance with
the BNPP Credit Agreement or assign any of its rights hereunder, and any
attempted delegation or assignment of any such duties or rights will be null and
void. All obligations of the Company hereunder will inure to the sole and
exclusive benefit of, and be enforceable by, the Collateral Trustee and the
Administrative Agent, on behalf of itself and on behalf of each present and
future holder of Secured Obligations, whom will be entitled to enforce this
Agreement as a third-party beneficiary hereof, and all of their respective
successors and assigns.

Section 7.4 Delay and Waiver. No failure to exercise, no course of dealing with
respect to the exercise of, and no delay in exercising, any right, power or
remedy arising under this Agreement or any of the other Security Documents will
impair any such right, power or remedy or operate as a waiver thereof. No single
or partial exercise of any such right, power or remedy will preclude any other
or future exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.

Section 7.5 Notices. Any communications, including notices and instructions,
between the parties hereto or notices provided herein to be given, shall be in
writing and shall be given to the following addresses:

 

  If to the Collateral Trustee:   

BNP Paribas

787 Seventh Avenue, 30th Floor

New York, New York 10019

Attn: Meredith Cook

Fax: (212) 841-2536

 

If to the Company:

  

Cheniere Marketing, Inc.

700 Milam Street, Suite 800

Houston, Texas 77022

Attn: Robert M. Flavin

Fax: (713) 375-5000

All notices and communications will be mailed by first class mail, certified or
registered, return receipt requested, or by overnight air courier guaranteeing
next day delivery, to the relevant address set forth above. To the extent
applicable, any notice or communication will also be so mailed to any Person
described in § 313(c) of the Trust Indenture Act of 1939, as amended, to the
extent required thereunder. Failure to mail a notice or communication to a
holder of the Secured Obligations or any defect in it will not affect its
sufficiency with respect to other holders of the Secured Obligations.

If a notice or communication is mailed in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee receives it;
provided that, no notice or communication to the Collateral Trustee or the
Administrative Agent shall be deemed received by it unless such notice or
communication is actually received by it at its address (including via fax) set
forth above.

 

-19-

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

Section 7.6 Notice Following Discharge of Obligations. Promptly following the
Discharge of the BNPP Obligations, the Administrative Agent will provide written
notice of such discharge to the Collateral Trustee.

Section 7.7 Entire Agreement. This Agreement states the complete agreement of
the parties relating to the undertaking of the Collateral Trustee set forth
herein and supersedes all oral negotiations and prior writings in respect of
such undertaking.

Section 7.8 Compensation; Expenses. The Company agrees to pay, promptly upon
demand:

(1) such compensation to the Collateral Trustee and its agents as the Company
and the Collateral Trustee may agree in writing from time to time;

(2) all reasonable costs and expenses incurred by the Collateral Trustee and its
agents in the preparation, execution, delivery, filing, recordation,
administration or enforcement of this Agreement or any other Security Document
or any consent, amendment, waiver or other modification relating hereto or
thereto;

(3) all reasonable fees, expenses and disbursements of legal counsel and any
auditors, accountants, consultants or appraisers or other professional advisors
and agents engaged by the Collateral Trustee or the Administrative Agent
incurred in connection with the negotiation, preparation, closing,
administration, performance or enforcement of this Agreement and the other
Security Documents or any consent, amendment, waiver or other modification
relating hereto or thereto and any other document or matter requested by the
Company;

(4) all reasonable costs and expenses incurred by the Collateral Trustee and its
agents in creating, perfecting, preserving, releasing or enforcing the
Collateral Trustee’s Liens on the Collateral, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, and title
insurance premiums;

(5) all other reasonable costs and expenses incurred by the Collateral Trustee
and its agents in connection with the negotiation, preparation and execution of
the Security Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby or the exercise
of rights or performance of obligations by the Collateral Trustee thereunder;

(6) after the occurrence of any Secured Obligation Default, all costs and
expenses incurred by the Collateral Trustee, its agents and the Administrative
Agent in connection with the preservation, collection, foreclosure or
enforcement of the Collateral subject to the Security Documents or any interest,
right, power or remedy of the Collateral Trustee or in connection with the
collection or enforcement of any of the Secured Obligations or the proof,
protection, administration or resolution of any claim based upon the Secured
Obligations in any Insolvency or Liquidation Proceeding, including all fees and
disbursements of attorneys, accountants, auditors, consultants, appraisers and
other professionals engaged by the Collateral Trustee, its agents or the
Administrative Agent; and

(7) all filing and recordation fees, expenses and taxes.

 

-20-

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

The agreements in this Section 7.8 will survive repayment of all other Secured
Obligations and the removal or resignation of the Collateral Trustee.

Section 7.9 Indemnity.

(a) The Company agrees to defend, indemnify, pay and hold harmless the
Collateral Trustee, the Administrative Agent, each holder of Secured Obligations
and each of their respective Affiliates and each and all of the directors,
officers, partners, trustees, employees, attorneys and agents, and (in each
case) their respective heirs, representatives, successors and assigns (each of
the foregoing, an “Indemnitee”) from and against any and all liabilities,
obligations, losses, damagers, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the satisfaction of the
BNPP Obligations and the Crest Obligation) be imposed on, incurred by or
asserted against such Indemnitee in any way relating to or arising out of this
Agreement, any of the Secured Obligation Documents or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any Indemnitee under or in connection
with any of the foregoing (the “Indemnified Liabilities”); provided that, the
Company shall not be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from an Indemnitee’s gross
negligence, unlawful acts, bad faith or willful misconduct. The agreements in
this Section 7.9 shall survive the payment of the BNPP Obligations and the Crest
Obligation and the termination of this Agreement.

(b) All amounts due under this Section 7.9 will be payable upon demand.

(c) To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in Section 7.9(a) may be unenforceable in whole or in part
because they violate any law or public policy, the Company will contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.

(d) The Company will not assert any claim against any Indemnitee, on any theory
of liability, for any lost profits or special, indirect or consequential damages
or (to the fullest extent a claim for punitive damages may lawfully be waived)
any punitive damages arising out of, in connection with, or as a result of, this
Agreement or any other Secured Obligation Document or any agreement or
instrument or transaction contemplated hereby or relating in any respect to any
Indemnified Liability, and the Company hereby forever waives, releases and
agrees not to sue upon any claim for any such lost profits or special, indirect,
consequential or (to the fullest extent lawful) punitive damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

(e) The agreements in this Section 7.9 will survive repayment of all other
Secured Obligations and the removal or resignation of the Collateral Trustee.

Section 7.10 Severability. If any provision of this Agreement is invalid,
illegal or unenforceable in any respect or in any jurisdiction, the validity,
legality and enforceability of such provision in all other respects and of all
remaining provisions, and of such provision in all other jurisdictions, will not
in any way be affected or impaired thereby.

Section 7.11 Headings. Section headings herein have been inserted for
convenience of reference only, are not to be considered a part of this Agreement
and will in no way modify or restrict any of the terms or provisions hereof.

 

-21-

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

Section 7.12 Obligations Secured. All obligations of the Company set forth in or
arising under this Agreement will be Secured Obligations and are secured by all
Liens granted by the Security Documents.

Section 7.13 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL
GOVERN AND BE USED TO CONSTRUE THIS AGREEMENT WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

Section 7.14 Consent to Jurisdiction. All judicial proceedings brought against
any party hereto arising out of or relating to this Agreement or any of the
other Security Documents may be brought in any state or federal court of
competent jurisdiction in the State, County and City of New York. By executing
and delivering this Agreement, the Company, for itself and in connection with
its properties, irrevocably:

(1) accepts generally and unconditionally the nonexclusive jurisdiction and
venue of such courts;

(2) waives any defense of forum non conveniens;

(3) agrees that service of all process in any such proceeding in any such court
may be made by registered or certified mail, return receipt requested, to such
party at its address provided in accordance with Section 7.5;

(4) agrees that service as provided in clause (3) above is sufficient to confer
personal jurisdiction over such party in any such proceeding in any such court
and otherwise constitutes effective and binding service in every respect; and

(5) agrees each party hereto retains the right to serve process in any other
manner permitted by law or to bring proceedings against any party in the courts
of any other jurisdiction.

Section 7.15 Waiver of Jury Trial. Each party to this Agreement waives its
rights to a jury trial of any claim or cause of action based upon or arising
under this Agreement or any of the other Security Documents or any dealings
between them relating to the subject matter of this Agreement or the intents and
purposes of the other Security Documents. The scope of this waiver is intended
to be all-encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this Agreement and the other Security
Documents, including contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. Each party to this Agreement acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each party hereto has already relied on this waiver in entering into this
Agreement, and that each party hereto will continue to rely on this waiver in
its related future dealings. Each party hereto further warrants and represents
that it has reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation with legal
counsel. This waiver is irrevocable, meaning that it may not be modified either
orally or in writing (other than by a mutual written waiver specifically
referring to this Section 7.15 and executed by each of the parties hereto), and
this waiver will apply to any subsequent amendments, renewals, supplements or
modifications of or to this Agreement or any of the other Security Documents or
to any other documents or agreements relating thereto. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

 

-22-

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

Section 7.16 Counterparts. This Agreement may be executed in any number of
counterparts (including by facsimile), each of which when so executed and
delivered will be deemed an original, but all such counterparts together will
constitute but one and the same instrument.

Section 7.17 Effectiveness. This Agreement will become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
each party of written notification of such execution and written or telephonic
authorization of delivery thereof.

Section 7.18 Continuing Nature of this Agreement. This Agreement, including the
subordination provisions hereof, will be reinstated if at any time any payment
or distribution in respect of any of the Secured Obligations is rescinded or
must otherwise be returned in an Insolvency or Liquidation Proceeding or
otherwise by any holder of the Secured Obligations or the Collateral Trustee or
any representative of any such party (whether by demand, settlement, litigation
or otherwise).

Section 7.19 Insolvency. This Agreement will be applicable both before and after
the commencement of any Insolvency or Liquidation Proceeding by or against the
Company. The relative rights, as provided for in this Agreement, will continue
after the commencement of any such Insolvency or Liquidation Proceeding on the
same basis as prior to the date of the commencement of any such case, as
provided in this Agreement.

Section 7.20 Rights and Immunities of the Administrative Agent. The
Administrative Agent will be entitled to all of the rights, protections,
immunities and indemnities set forth in the BNPP Credit Agreement and any future
Administrative Agent will be entitled to all of the rights, protections,
immunities and indemnities set forth in any credit facility, indenture or other
agreement governing the BNPP Secured Obligations. In no event will the
Administrative Agent be liable for any act or omission on the part of the
Company or the Collateral Trustee hereunder.

[SIGNATURE PAGE FOLLOWS]

 

-23-

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

IN WITNESS WHEREOF, the parties hereto have caused this Collateral Trust
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.

 

CHENIERE MARKETING, INC. By:   /s/ Robert M. Flavin  

Robert M. Flavin

 

Senior Vice President and

Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Collateral Trust Agreement

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

BNP PARIBAS, not individually but solely in its capacity as Collateral Trustee
By:   /s/ Richard J. Wernli   Name:   Richard J. Wernli   Title:   Director By:
  /s/ Sally Haswell   Name:   Sally Haswell   Title:   Managing Director

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature Page to Collateral Trust Agreement