THIRD AMENDED AND RESTATED MULTIPLE INDEBTEDNESS MORTGAGE, ASSIGNMENT OF RENTS AND LEASES AND SECURITY AGREEMENT

Exhibit 10.3

RECORDING REQUESTED BY AND

WHEN RECORDED, RETURN TO:

Latham & Watkins LLP

885 Third Avenue Suite 1000

New York, New York 10022

Attn: Betsy J. Mukamal, Esq.

 

THIRD AMENDED AND RESTATED MULTIPLE INDEBTEDNESS MORTGAGE,

ASSIGNMENT OF RENTS AND LEASES

AND SECURITY AGREEMENT

Dated as of November 9, 2006

by

SABINE PASS LNG, L.P.

a Delaware limited partnership,

Mortgagor

to and for the benefit of

THE BANK OF NEW YORK

Collateral Trustee as Mortgagee

 

TABLE OF CONTENTS

 

 

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THIRD AMENDED AND RESTATED MULTIPLE INDEBTEDNESS MORTGAGE,

ASSIGNMENT OF RENTS AND LEASES

AND SECURITY AGREEMENT

BE IT KNOWN , that on the 9th day of November, 2006, before me, the undersigned Notary Public, duly commissioned and qualified in and for the State and County set forth below, and in the presence of the undersigned competent witnesses:

PERSONALLY CAME AND APPEARED:

Sabine Pass LNG, L.P. (the “ Mortgagor ”) (TIN 20-0466069) a Delaware limited partnership, domiciled at 717 Texas Avenue, Suite 3100, Houston, Texas 77002, organized pursuant to a Certificate of Limited Partnership dated October 20, 2003, filed in the office of the Secretary of State, State of Delaware on October 20, 2003 which filed partnership documents and registered to do business in Louisiana on December 16, 2003; whose chief executive office is declared to be at 717 Texas Avenue, Suite 3000, Houston, Texas 77002;

who declared as follows:

Mortgagor does hereby enter into this Third Amended and Restated Multiple Indebtedness Mortgage, Assignment of Leases and Rents and Security Agreement (as modified, supplemented, amended, consolidated or extended from time to time, this “ Mortgage ”) effective as of November 9 ^th , 2006, in favor of THE BANK OF NEW YORK as Collateral Trustee for the benefit of, the Secured Parties, (together with its successors and assigns, in such capacities, the “ Collateral Trustee ” and “ Mortgagee ”). Capitalized terms used in this Mortgage and not otherwise defined herein shall have the meanings ascribed to them in the Collateral Trust Agreement.

Recitals

 

A.

Mortgagor (a) on the date hereof, will issue senior secured notes due November 30, 2013 and senior secured notes due November 30, 2016 (together, the “ Initial Notes ” ) under an indenture, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Indenture ” ), between Mortgagor and The Bank of New York as trustee (together with its successors and assigns, in such capacity, the “ Trustee ”), and (b) in the future may issue additional senior secured notes (together with the Initial Notes, the “ Notes ” ) under the Indenture and/or may otherwise incur additional secured indebtedness ranking pari passu with the Notes (such other secured indebtedness together with the Notes, the “ Parity Secured Debt ” ).

 

B.

Mortgagor may, from time to time, incur additional future Parity Secured Debt that will be secured Equally and Ratably with the Notes by Liens on all present and future Collateral.

C.

Mortgagor and the other Pledgors have entered into a collateral trust arrangement pursuant to the Collateral Trust Agreement, dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “ Collateral Trust Agreement ” ) among the Company, the Pledgors, the Trustee, the other Secured Debt Representatives party thereto from time to time and the Collateral Trustee.

 

D.

Pursuant to the Crest Settlement Documents (as defined herein), the Mortgagor is prohibited from creating or allowing to be created any lien, security interest or other encumbrance on any of Mortgagor’s assets that is senior to or pari passu with the obligations of the Mortgagor under the Crest Settlement Documents; therefore, the Mortgagor hereby grants in favor of the Mortgagee for the benefit of Crest, a secured lien and security interest with respect to the Mortgaged Property which such lien shall be senior to the liens and security interests of the holders of the Parity Lien Obligations.

 

E.

Mortgagor, Société Générale, as agent, and HSBC Bank USA, National Association, as collateral agent thereunder (in such capacity, the “ Prior Collateral Agent ” ), were parties to a security agreement, dated as of February 25, 2005 (as amended, restated, supplemented and otherwise modified from time to time, the “ Prior Security Agreement ” ) pursuant to which Mortgagor granted a secured interest in all of its assets to the Prior Collateral Agent. Pursuant to an instrument dated as of the date hereof, the Prior Collateral Agent has assigned all of its rights under the Prior Security Agreement to the Collateral Trustee.

 

F.

Mortgagor, Société Générale, as agent, and HSBC Bank USA, National Association, as collateral agent thereunder were parties to Multiple Indebtedness Mortgage, Assignment of Leases and Rents and Security Agreement dated as of February 25, 2005 (the “ Original Mortgage ”), as amended by that certain First Amendment to Multiple Indebtedness Mortgage, Assignment of Leases and Rents and Security Agreement dated as of January 19, 2006 (the “ First Amendment ”) and by that certain Second Amendment to Multiple Indebtedness Mortgage, Assignment of Leases and Rents and Security Agreement (the “ Second Amendment ” and together with the Original Mortgage and the First Amendment, the “ Assigned Mortgage ”) pursuant to which Mortgagor granted a secured interest in the Property to the Prior Collateral Agent.

 

G.

Pursuant to an instrument dated as of the date hereof, the Prior Collateral Agent has assigned all of its rights under the Assigned Mortgage to the Collateral Trustee. The Assigned Mortgage is hereunder declared amended and restated as the Agreement.

 

H.

It is a requirement under the Indenture and a condition precedent to the issuance of the Notes that the Mortgagor shall have executed and delivered this Agreement.

 

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As set forth more fully below, Mortgagor intends to secure its payment and performance of the Secured Obligations by and with the Mortgaged Property (as defined below) owned by Mortgagor and other Real Property, the ownership and other real right in which of Mortgagor may not be evidenced in the official records of the parish in which the Real Property is situated as of the date of this act. This Mortgage is being granted to establish a mortgage affecting the Real Property owned by Mortgagor as of the date of this act and,

 

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pursuant to Louisiana Civil Code Article 3292, to establish a mortgage affecting the other Real Property if and when the ownership of, or other real right in, the other Real Property is subsequently acquired by or otherwise evidenced in Mortgagor.

Agreement

NOW, THEREFORE, to secure the prompt and complete payment and performance, when and as required, due and/or payable, of all of the Secured Obligations, by acceleration or otherwise, or arising out of or in connection therewith, and in consideration of the covenants herein contained and in the Collateral Trust Agreement and intending to be legally bound, does hereby specially mortgage, affect, hypothecate, and grant a continuing security interest, assign and pledge unto Mortgagee, for the benefit of the Secured Parties as set forth in the Collateral Trust Agreement, all of Mortgagor’s estate, right, title, interest, property, claim and demand, now or hereafter arising, in and to the following property and rights (herein collectively called the “ Mortgaged Property ”):

(a) the lands and premises more particularly described in Exhibit A hereto (which such lands and premises shall include all property interests in those certain leases described on Exhibit A , as the same may be amended, restated, renewed or extended in the future in compliance with this Mortgage, including any options to purchase, extend or renew provided for in such leases (collectively, the “ Subject Lease ”) and any estoppel, nondisturbance, attornment and recognition agreement benefiting Mortgagor with respect to the Subject Lease, together with all credits, deposits, privileges, rights, estates, title and interest of Mortgagor as tenant under the Subject Lease (including all rights of Mortgagor to treat the Subject Lease as terminated under Section 365(h) (a “ 365(h) Election ”) of the Bankruptcy Code, or any other state or federal insolvency, reorganization, moratorium or similar law for the relief of debtors (a “ Bankruptcy Law ”), or any comparable right provided under any other Bankruptcy Law, together with all rights, remedies and privileges related thereto), and all books and records that contain records or other evidence of payments of rent or security made under the Subject Lease and all of Mortgagor’s claims and rights to the payment of damages that may arise from a lessor’s failure to perform under the Subject Lease, or rejection of the Subject Lease under any Bankruptcy Law (a “ Lease Damage Claim ”), Mortgagee having the right, at any time and from time to time, to notify such lessor of the rights of Mortgagee hereunder), (all such lands and premises collectively, the “ Site ”);

(b) any and all servitudes, easements, leases, licenses, option rights, rights-of-way and other rights used in connection with the Site or as a means of ingress and egress thereto and therefrom, all servitudes or easements for ingress and egress and easements for water, natural gas and sewage pipelines, running in favor of Mortgagor, or appurtenant to the Site, and any and all sidewalks, alleys, strips and gores of land adjacent thereto or used in connection therewith together with all and singular the appurtenances thereto, and with any land lying within the right-of-way of any streets, open or proposed, adjoining the same (collectively, the “ Easements ”; and the Site and the Easements collectively referred to herein as the “ Real Property ”);

 

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(c) all buildings, structures, fixtures and other improvements now or hereafter constructed, placed or erected on the Real Property (collectively, the “ Improvements ”);

(d) all machinery, apparatus, equipment, fittings, fixtures, generators, boilers, turbines and other articles of personal property, including all goods and all goods which become fixtures, now owned or hereafter acquired by Mortgagor and now or hereafter located on, attached to or used in the operation of or in connection with the Real Property and/or the Improvements, and all replacements thereof, additions thereto and substitutions therefor, to the fullest extent permitted by applicable law (all of the foregoing being hereinafter collectively called the “ Equipment ”);

(e) all raw materials, work in process and other materials used or consumed in the construction of, or now or hereafter located on or used in connection with, the Real Property, the Improvements and/or the Equipment, (including, without limitation, fuel and fuel deposits, now or hereafter located on the Real Property or elsewhere or otherwise owned by Mortgagor) (the above items, together with the Equipment, being hereinafter collectively called the “ Tangible Collateral ”);

(f) all rights, powers, privileges and other benefits of Mortgagor (to the extent assignable) now or hereafter obtained by Mortgagor from any Governmental Authority (as such term is defined in the Indenture), including, without limitation, all licenses, certificates, permits and other similar instruments and documents, issued in the name of Mortgagor, governmental actions relating to the ownership, operation, management and use of the Real Property, Improvements, Equipment or Tangible Collateral, and any improvements, modifications or additions thereto;

(g) all the lands and interests in lands hereafter acquired by Mortgagor in connection with or appurtenant to the Site, and all income, rents, rent equivalents, issues, profits, revenues (including all oil and gas or other mineral royalties and bonuses), deposits and other benefits from the Site and the Improvements (including all receivables and other obligations now existing or hereafter arising or created out of the sale, lease, sublease, license, concession or other grant of the right of the use and occupancy of property or rendering of services by Mortgagor or any operator or manager of the Mortgaged Property or the commercial space located in the Improvements or acquired from others) (collectively, the “ Rents ”) and all proceeds from the sale or other disposition of the Leases (as defined herein) and the right to receive and apply the Rents and/or any other property or rights subject to the lien hereof, including (without limitation) all interests of Mortgagor, whether as lessor or lessee, in any leases of land hereafter made and all rights of Mortgagor thereunder;

(h) any and all other property in any way associated or used in connection with or appurtenant to the Real Property, Improvements, Equipment or Tangible Collateral that may from time to time, by delivery or by writing of any kind, be subjected to the lien hereof by Mortgagor or by anyone on its behalf or with its consent, or which may come into the possession or be subject to the control of Mortgagee pursuant to this Mortgage, being hereby collaterally assigned to Mortgagee and subjected or added to the lien or estate created by this

 

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Mortgage forthwith upon the acquisition thereof by Mortgagor, as fully as if such property were now owned by Mortgagor and were specifically described in this Mortgage and subjected to the lien and security interest hereof; and Mortgagee is hereby authorized to receive any and all such property as and for additional security hereunder;

(i) all the remainder or remainders, reversion or reversions, Rents, revenues, issues, profits, royalties, income, proceeds and other benefits derived from any of the foregoing, all of which are hereby assigned to Mortgagee, who is hereby authorized to collect and receive the same, to give proper receipts and acquittances therefor and to apply the same in accordance with the provisions of this Mortgage;

(j) all Proceeds, as defined in the UCC (defined below), including all proceeds, products, offspring, Rents, profits or receipts, in whatever form, arising from the Mortgaged Property, including (i) cash, instruments and other property received, receivable or otherwise distributed in respect of or in exchange for any or all of the Mortgaged Property, (ii) the collection, sale, lease, sublease, concession, exchange, assignment, licensing or other disposition of, or realization upon, any item or portion of the Mortgaged Property (including all claims of Mortgagor against third parties for loss of, damage to, destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any the Mortgaged Property now existing or hereafter arising), (iii) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to Mortgagor from time to time with respect to any of the Mortgaged Property, (iv) any and all payments (in any form whatsoever) made or due and payable to Mortgagor from time to time in connection with the requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Mortgaged Property by any Governmental Authority (or any person acting under color of Governmental Authority) and (v) any and all other amounts from time to time paid or payable under or in connection with any of the Mortgaged Property;

(k) all agreements to which Mortgagor is a party or which are assigned to Mortgagor in any management agreement or any other document and which are executed in connection with the construction, operation and management of the Improvements located on the Mortgaged Property (including agreements for the sale, lease or exchange of goods or other property and/or the performance of services by it, in each case whether now in existence or hereafter arising or acquired) as any such agreements have been or may be from time to time amended, supplemented or otherwise modified;

(l) all general intangibles, now owned or hereafter acquired by Mortgagor, including (i) all obligations or indebtedness owing to Mortgagor from whatever source arising, (ii) all unearned premiums accrued or to accrue under all insurance policies for the Mortgaged Property obtained by Mortgagor, all proceeds of the conversion, voluntary or involuntary, of any of the foregoing into cash or liquidated claims (including proceeds of insurance, condemnation awards, and all rights of Mortgagor to refunds of real estate taxes and assessments), (iii) all royalties and license fees, (iv) all rights or claims in respect of refunds for taxes paid, and (v) all judgments, awards of damages and settlements which may result from any damage to all or any portion of the Real Property

 

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or Improvements or any part thereof or to any rights appurtenant thereto, together with the right to receive proceeds attributable to the insurance loss of the Real Property or Improvements, as provided in La. R.S. 9:5386;

(m) all instruments, chattel paper or letters of credit, evidencing, representing, arising from or existing in respect of, relating to, securing or otherwise supporting the payment of, any of the Mortgaged Property (including promissory notes, drafts, bills of exchange and trade acceptances) and chattel paper obtained by Mortgagor in connection with the Mortgaged Property (including all ledger sheets, computer records and printouts, databases, programs, books of account and files of Mortgagor relating thereto) and such notes or other obligations of indebtedness owing to Mortgagor from whatever source arising, in each case now owned or hereafter acquired by Mortgagor and relating to the Mortgaged Property;

(n) all inventory, whether now or hereafter existing or acquired, and which arises out of or is used in connection with, directly or indirectly, the ownership and operation of the Mortgaged Property, all documents representing the same and all Proceeds and products of the same, including all goods, merchandise, raw materials, work in process and other personal property, wherever located, now or hereafter owned or held by Mortgagor for manufacture, processing, the providing of services or sale, use or consumption in the operation of the Mortgaged Property (including fuel, supplies and similar items and all substances commingled therewith or added thereto) and rights and claims of Mortgagor against anyone who may store or acquire the same for the account of Mortgagor, or from whom Mortgagor may purchase the same; and

(o) all Permits used in connection with the ownership, operation, use or occupancy of the Mortgaged Property, but excluding any of the Permits which by their terms or by operation of law prohibit or do not allow assignment or which would become void solely by virtue of a security interest being granted therein.

The Rents and Leases are pledged on a parity with the Land and Improvements and not secondarily. This Mortgage has been executed by Mortgagor pursuant to Article 3298 of the Louisiana Civil Code for the purpose of securing Secured Obligations that may now be existing and/or that may arise in the future as provided herein, with the preferences and priorities provided under applicable Louisiana law. The assignment of Leases and the Rents therefrom is given to the fullest extent allowed by La. R.S. 9:4401 to secure Secured Obligations up to a maximum amount outstanding at any time and from time to time of $3,000,000,000.

ANYTHING TO THE CONTRARY CONTAINED HEREIN NOTWITHSTANDING, THE MAXIMUM AMOUNT OF INDEBTEDNESS SECURED OR THAT UNDER ANY CONTINGENCY MAY BE SECURED HEREBY AT ANY TIME AND FROM TIME TO TIME IS THREE BILLION AND NO/100 DOLLARS ($3,000,000,000).

The Mortgaged Property to remain so specially mortgaged, affected and hypothecated, unto and in favor of the Mortgagee and any future holder or holders of the Secured Obligations until the full and final payment of the Parity Lien Obligations thereof, Mortgagor being hereby

 

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obligated not to sell, alienate, deteriorate or otherwise encumber the Mortgaged Property to the prejudice of this act except as may be permitted under the Indenture and not to permit or suffer the same to be so sold, alienated, deteriorated or encumbered except as may be permitted under the Secured Debt Documents.

PROVIDED ALWAYS, that when and as set forth in the Collateral Trust Agreement and upon the observance and performance by Mortgagor of its covenants and agreements set forth herein and therein, then Mortgagee shall execute and deliver a release and cancellation of this Mortgage as provided herein below.

ARTICLE 1- DEFINITIONS

1.1 Defined Terms . Any term defined by reference to an agreement, instrument or other document shall have the meaning so assigned to it whether or not such document is in effect. In addition, for purposes of this Mortgage, the following definitions shall apply:

“ Actionable Default ” means either a Secured Debt Default (as defined in the Collateral Trust Agreement or a Crest Default Remedy Instruction.

“ Bankruptcy Law ” has the meaning ascribed to it in the Granting Clauses.

“ Cheniere ” means Cheniere Energy, Inc., a Delaware corporation.

“ Collateral Trust Agreement ” has the meaning ascribed to it in the recitals hereof.

“ Collateral Trustee ” has the meaning ascribed to it in the preamble hereof.

“ Crest ” means Crest Investment Company, a Texas corporation.

“ Crest Cheniere Indemnity ” means any indemnity arrangement heretofore or hereafter provided by Cheniere in favor of any of its subsidiaries pursuant to the Crest Settlement Documents.

“ Crest Default Remedy Instruction ” means any instruction by Crest to the Mortgagee in writing to exercise remedies under the this Mortgage as a result of the Mortgagor’s failure to make any payment in respect of the Crest Obligations after written demand by Crest.

“ Crest Obligations ” means all obligations of the Mortgagor under the Crest Settlement Documents.

“ Crest Settlement Documents ” means collectively (a) that certain Settlement and Purchase Agreement, dated as of June 14, 2001 (the “ Settlement Agreement ”), by and among Cheniere, Cheniere FLNG, L.P., Crest, Crest Energy, L.L.C., and Freeport LNG Terminal, LLC, (b) that certain assumption and adoption document, dated May 9, 2005,

 

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executed by the Mortgagor among others, pursuant to the Settlement Agreement, (c) that certain Indemnification Agreement, dated May 9, 2005, executed by Cheniere, relating thereto and (d) any and all other agreements and documents heretofore or hereafter entered into by any subsidiary of Cheniere pursuant to Section 1.07 of the Settlement Agreement.

“ Easements ” has the meaning ascribed to it in the Granting Clauses.

“ Equipment ” has the meaning ascribed to it in the Granting Clauses.

“ Improvements ” has the meaning ascribed to it in the Granting Clauses.

“ Land ” means the real property described on Exhibit A.

“ Lease Damage Claim ” has the meaning ascribed to it in the Granting Clauses.

“ Leases ” has the meaning ascribed to it in the Section 2.5 .

“ Legal Requirements ” has the meaning ascribed to it in Section 2.3 .

“ Mortgaged Property ” has the meaning ascribed to it in the Granting Clauses.

“ Permitted Encumbrances ” has the meaning ascribed to it in Section 2.2 .

“ Proceeds ” has the meaning ascribed to it in the Granting Clauses.

“ Real Property ” has the meaning ascribed to it in the Granting Clauses.

“ Secured Obligations ” shall mean all Parity Lien Obligations as defined in the Collateral Trust Agreement together with all Crest Obligations.

“ Site ” has the meaning ascribed to it in the Granting Clauses.

“ State ” has the meaning ascribed to it in Section 2.13 .

“ Subject Lease ” has the meaning ascribed to it in the Granting Clauses

“ Tangible Collateral ” has the meaning ascribed to it in the Granting Clauses.

“ Tenant Leases ” has the meaning ascribed to it in Section 2.5 .

“ Trustee ” has the meaning ascribed to it in the preamble hereof.

“ UCC ” has the meaning ascribed to it in Section 2.13 .

“ 365(h) Election ” has the meaning ascribed to it in the Granting Clauses.

 

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1.1 Accounting Terms . As used herein and in any certificate or other document made or delivered pursuant hereto, accounting terms not defined herein shall have the respective meanings given to them under GAAP.

1.2 The Rules of Interpretation . The rules of interpretation as set forth in the Collateral Trust Agreement shall govern the terms, conditions and provisions hereof. In the event of any conflict between those set forth in this Mortgage and the Collateral Trust Agreement, the latter shall be deemed controlling and shall preempt the former.

1.3 Priority . The relative priority of the liens granted hereunder shall be as set forth in the Collateral Trust Agreement.

ARTICLE 2- GENERAL COVENANTS AND PROVISIONS

2.1 Mortgagor Performance of the Collateral Trust Agreement . Mortgagor shall perform, observe and comply with each and every provision hereof, and with each and every provision contained in the Collateral Trust Agreement and shall promptly pay to Mortgagee, when payment shall become due, the amounts provided for thereunder with interest thereon, if any, and all other sums required to be paid by Mortgagor under this Mortgage and the Indenture, at the time and in the manner provided herein and therein.

2.2 General Representations, Covenants and Warranties . Mortgagor, to the best of its knowledge, represents, covenants and warrants that as of the date hereof: (a) Mortgagor has good and marketable title to that portion of the Real Property which constitutes real property interests, free and clear of all encumbrances except the permitted encumbrances set forth on Schedule B of the applicable title policy, if any (“ Permitted Encumbrances ”); (b) Mortgagor has the right to hold, occupy and enjoy its interest in the Real Property, and has good right, full power and lawful authority to mortgage the same as provided herein and, subsequent to the occurrence and continuance of an Actionable Default, Mortgagee may at all times peaceably and quietly enter upon, hold, occupy and enjoy the Real Property in accordance with the terms hereof; (c) all costs arising from construction of any improvements, the performance of any labor and the purchase of all Mortgaged Property have been or shall be paid when due; (d) the Site has access for ingress and egress to dedicated street(s); and (e) no material part of the Mortgaged Property has been damaged, destroyed, condemned or abandoned.

2.3 Compliance with Legal Requirements . Mortgagor shall promptly comply in all material respects with all governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting either the Mortgaged Property or any part thereof or the construction, use, alteration or operation thereof, or any part thereof (whether now or hereafter enacted and in force), and all permits, licenses and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, at any time in force affecting such Mortgaged Property or any part thereof (collectively “ Legal Requirements ”) relating to its use and occupancy of the Mortgaged Property, whether or not such compliance requires work or remedial measures that are ordinary or

 

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extraordinary, foreseen or unforeseen, structural or nonstructural, or that interfere with the use or enjoyment of the Mortgaged Property.

2.4 Insurance; Application of Insurance Proceeds; Application of Eminent Domain Proceeds .

2.4.1 Mortgagor shall at its sole expense obtain for, deliver to (or deliver certificates evidencing), assign and maintain for the benefit of Mortgagee, during the term of this Mortgage, insurance policies insuring the Mortgaged Property (to the extent insurable) and liability insurance policies, all in accordance with the requirements of the Indenture. Mortgagor shall pay promptly when due any premiums on such insurance policies and on any renewals thereof. In the event of the foreclosure of this Mortgage or any other transfer of the Mortgaged Property in extinguishment of the indebtedness and other sums secured hereby, all right, title and interest of Mortgagor in and to all casualty insurance policies, and renewals thereof then in force, shall pass to the purchaser or grantee in connection therewith.

2.4.2 All insurance proceeds and all awards payable with respect to any taking of the Real Property or Improvements shall be paid and/or shall be applied in accordance with the provisions of the Collateral Trust Agreement.

2.5 Assignment of Rents . Mortgagor unconditionally and absolutely assigns to Mortgagee all of Mortgagor’s right, title and interest in and to: all leases, subleases, occupancy agreements, licenses, rental contracts and other similar agreements now or hereafter existing relating to the use or occupancy of the Mortgaged Property, together with all guarantees, modifications, extensions and renewals thereof; and all Rents, issues, profits, income and proceeds due or to become due from tenants of the Mortgaged Property (the “ Tenant Leases ”), including rentals and all other payments of any kind under any Tenant Leases now existing or hereafter entered into, together with all deposits (including security deposits) of tenants thereunder. Subject to the provisions below, Mortgagee shall have the right, power and authority to: notify any person that the Tenant Leases have been assigned to Mortgagee and that all Rents and other obligations are to be paid directly to Mortgagee, whether or not Mortgagee has commenced or completed foreclosure or taken possession of the Mortgaged Property; settle compromise, release, extend the time of payment of, and make allowances, adjustments and discounts of any Rents or other obligations under the Tenant Leases; enforce payment of Rents and other rights under the Tenant Leases, prosecute any action or proceeding, and defend against any claim with respect to Rents and Tenant Leases; enter upon, take possession of and operate the Mortgaged Property; lease all or any part of the Mortgaged Property; and/or perform any and all obligations of Mortgagor under the Leases and exercise any and all rights of Mortgagor therein contained to the full extent of Mortgagor’s rights and obligations thereunder, with or without the bringing of any action or the appointment of a receiver. At Mortgagee’s request, Mortgagor shall deliver a copy of this Mortgage to each tenant under a Tenant Lease. Mortgagor irrevocably directs any tenant, without any requirement for notice to or consent by Mortgagor, to comply with all demands of Mortgagee under this Section and to turn over to Mortgagee on demand all Rents which it receives. Mortgagee shall have the right, but not the obligation, to use and apply all Rents received hereunder in such order and such manner as Mortgagee may determine in accordance with the Collateral Trust Agreement. Notwithstanding that this is an absolute assignment of the Rents and Tenant Leases and not merely the collateral

 

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assignment of, or the grant of a lien or security interest in the Rents and Tenant Leases, Mortgagee grants to Mortgagor a revocable license to collect and receive the Rents and to retain, use and enjoy such Rents. Such license may be revoked by Mortgagee only upon the occurrence and during the continuance of any Actionable Default. Mortgagor shall apply any Rents which it receives to the payment due under the Secured Obligations, taxes, assessments, water charges, sewer Rents and other governmental charges levied, assessed or imposed against the Mortgaged Property, insurance premiums, and other obligations of lessor under the Tenant Leases before using such proceeds for any other purpose.

2.6 Mortgagee Assumes No Obligations . It is expressly agreed that, anything herein contained to the contrary notwithstanding, Mortgagor shall remain obligated under all agreements which are included in the definition of “Mortgaged Property” and shall perform all of its obligations thereunder in accordance with the provisions thereof, and neither Mortgagee nor any of the Secured Parties shall have any obligation or liability with respect to such obligations of Mortgagor, nor shall Mortgagee or any of the Secured Parties be required or obligated in any manner to perform or fulfill any obligations or duties of Mortgagor under such agreements, or to make any payment or to make any inquiry as to the nature or sufficiency of any payment received by it, or to present or file any claim or take any action to collect or enforce the payment of any amounts which have been assigned to Mortgagee hereunder or to which Mortgagee or the Secured Parties may be entitled at any time or times.

2.7 Further Assurances . Mortgagor shall, from time to time, at its expense, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or that Mortgagee may reasonably request, in order to perfect and continue the lien and security interest granted hereby and to enable Mortgagee to obtain the full benefits of the lien and security interest granted or intended to be granted hereby. Mortgagor shall keep the Mortgaged Property free and clear of all Liens, other than Permitted Encumbrances and Permitted Prior Liens (as defined in the Collateral Trust Agreement). Without limiting the generality of the foregoing, Mortgagor shall execute and record or file this Mortgage and each amendment hereto, and such financing or continuation statements, or amendments thereto, and such other instruments, endorsements or notices, as may be necessary, or as Mortgagee may reasonably request, in order to perfect and preserve the lien and security interest granted or purported to be granted hereby. Mortgagor hereby authorizes Mortgagee to file one or more financing statements or continuation statements, and amendments thereto, relative to all or any part of the Mortgaged Property necessary to preserve or protect the lien and security interest granted hereby without the signature of Mortgagor where permitted by law.

2.8 Acts of Mortgagor . Mortgagor hereby represents and warrants that it has not mortgaged, hypothecated, assigned or pledged and hereby covenants that it will not mortgage, hypothecate, assign or pledge, so long as this Mortgage shall remain in effect, any of its right, title or interest in and to the Mortgaged Property or any part thereof, to anyone other than Mortgagee.

2.9 After-Acquired Property . Any and all of the Mortgaged Property which is hereafter acquired shall immediately, without any further conveyance, assignment or act on the part of Mortgagor or Mortgagee, become and be subject to the lien and security interest of this Mortgage as fully and completely as though specifically described herein, all as and to the extent contemplated

 

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by Article 3292 of the Louisiana Civil Code. If and whenever from time to time Mortgagor shall hereafter acquire any real property or interest therein which constitutes or is intended to constitute part of the Mortgaged Property hereunder, Mortgagor shall promptly give notice thereof to Mortgagee and Mortgagor shall forthwith execute, acknowledge and deliver to Mortgagee a supplement to this Mortgage in form and substance reasonably satisfactory to Mortgagee subjecting the property so acquired to the lien and security interest of this Mortgage. At the same time, if Mortgagee so requests, Mortgagor shall deliver to Mortgagee either (i) an endorsement to the lender’s policy of title insurance issued to Mortgagee insuring the lien of this Mortgage, or (ii) a new lender’s title policy (which shall include tie in coverage relating to the lender’s policy described in (i), above), in each case which shall insure to Mortgagee in form and substance reasonably satisfactory to Mortgagee that the lien and security interest of this Mortgage as insured under such title insurance policy or policies encumbers such later acquired property and that Mortgagor’s title to such property meets all of the applicable requirements of the Secured Debt Documents with respect to title to Mortgagor’s real property interests.

2.10 Mortgaged Property . Mortgagor shall observe all applicable covenants, easements and other restrictions of record with respect to the Site, the Easements or to any other part of the Mortgaged Property, in all material respects.

2.11 Power of Attorney . Mortgagor does hereby irrevocably constitute and appoint Mortgagee its true and lawful attorney (which appointment is coupled with an interest), with full power of substitution, for Mortgagor and in the name, place and stead of Mortgagor or in Mortgagee’s own name, for so long as any of the Parity Lien Obligations are outstanding, to ask, demand, collect, receive, receipt for and sue for any and all Rents, income and other sums which are assigned hereunder with full power to endorse the name of Mortgagor on all instruments given in payment or in part payment thereof, to settle, adjust or compromise any claims thereunder as fully as Mortgagor itself could do and in its discretion file any claim or take any action or proceeding, either in its own name or in the name of Mortgagor or otherwise, which Mortgagee may deem necessary or appropriate to protect and preserve the right, title and interest of Mortgagee in and to such Rents, income and other sums and the security intended to be afforded hereby; provided that Mortgagee shall not exercise such rights unless an Actionable Default has occurred and is continuing.

2.12 Covenant to Pay . If an Actionable Default has occurred and is continuing, then Mortgagee, among its other rights and remedies, shall have the right, but not the obligation, to pay, observe or perform the obligations of Mortgagor herein, in whole or in part, and with such modifications as Mortgagee reasonably shall deem advisable. All sums, including, without limitation, reasonable attorneys fees’, so expended or incurred by Mortgagee by reason of the default of Mortgagor, or by reason of the bankruptcy or insolvency of Mortgagor, as well as, without limitation, sums expended or incurred to sustain the lien or estate of this Mortgage or its priority, or to protect or enforce any rights of Mortgagee hereunder, or to recover any of the Secured Obligations, or for repairs, maintenance, alterations, replacements or improvements thereto or for the protection thereof, or for real estate taxes or other governmental assessments or charges against any part of the Mortgaged Property, or premiums for insurance of the Mortgaged Property, shall be entitled to the benefit of the lien on the Mortgaged Property as of the date of the recording of this Mortgage, shall be deemed to be added to and be part of the Secured Obligations secured hereby,

 

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whether or not the result thereof causes the total amount of the Secured Obligations to exceed the stated amount set forth in the first and second introductory paragraphs of the Recitals of this Mortgage.

2.13 Security Agreement .

2.13.1 This Mortgage shall also be a security agreement between Mortgagor and Mortgagee covering the Mortgaged Property constituting personal property or fixtures (hereinafter collectively called “ UCC Collateral ”) governed by the Uniform Commercial Code (“ UCC ”) of the state in which the Real Property is located (the “ State ”) as such UCC Collateral may be more specifically set forth in any financing statement delivered in connection with this Mortgage, and, as further security for the payment and performance of the Secured Obligations, Mortgagor hereby grants to Mortgagee a continuing security interest in such portion of the Mortgaged Property to the full extent that the Mortgaged Property may be subject to the UCC. In addition to Mortgagee’s other rights hereunder, Mortgagee shall have all rights of a secured party under the UCC, as is in effect in the relevant jurisdiction, or other applicable laws or in equity. Mortgagor hereby authorizes the filing of, and if requested by Mortgagee, Mortgagor shall execute and deliver to Mortgagee, all financing statements and such further assurances that may be reasonably required by Mortgagee to establish, create, perfect (to the extent the same can be achieved by the filing of a financing statement) and maintain the validity and priority of Mortgagee’s security interests, and Mortgagor shall bear all reasonable costs thereof, including all UCC searches. If Mortgagee should dispose of any of the Mortgaged Property comprising the UCC Collateral pursuant to the UCC, ten (10) days’ prior written notice by Mortgagee to Mortgagor shall be deemed to be reasonable notice; provided, however , that Mortgagee may dispose of such property in accordance with the foreclosure procedures of this Mortgage in lieu of proceeding under the UCC. Mortgagee may from time to time execute and deliver at Mortgagor’s expense all continuation statements, termination statements, amendments, partial releases, or other instruments relating to all financing statements by and between Mortgagor and Mortgagee. Except as otherwise provided in the Collateral Trust Agreement, but otherwise subject to the provisions thereof, if an Actionable Default shall occur and be continuing, (a) Mortgagee, in addition to any other rights and remedies which it may have, may exercise immediately and without demand to the extent permitted by law, any and all rights and remedies granted to a secured party under the UCC, as in effect in any relevant jurisdiction, including, without limiting the generality of the foregoing, the right to take possession of the UCC Collateral or any part thereof, and to take such other measures as Mortgagee may deem necessary for the care, protection and preservation of such collateral and (b) upon request or demand of Mortgagee, Mortgagor shall at its expense, assemble the UCC Collateral and make it available to Mortgagee at a convenient place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand any and all expenses, including reasonable attorneys’ fees and disbursements incurred or paid by Mortgagee in protecting the interest in the UCC Collateral and in enforcing Mortgagee’s rights hereunder with respect to such UCC Collateral.

ARTICLE 3- REMEDIES

3.1 Acceleration of Maturity . The Parity Lien Obligations may be accelerated in accordance with the terms and conditions of the applicable Secured Debt Documents. Upon such

 

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acceleration, that portion of the Parity Lien Obligations so accelerated shall become immediately become due and payable.

3.2 Protective Advances . If an Actionable Default shall have occurred and is continuing, then without thereby limiting Mortgagee’s other rights or remedies, waiving or releasing any of Mortgagor’s obligations, or imposing any obligation on Mortgagee, Mortgagee for the benefit of the Secured Parties may either advance any amount owing or perform any or all actions that Mortgagee considers necessary or appropriate to cure such default. All such advances shall constitute “Protective Advances.” No sums advanced or performance rendered by Mortgagee shall cure, or be deemed a waiver of, any Actionable Default.

3.3 Institution of Equity Proceedings . If an Actionable Default occurs and is continuing, Mortgagee for the benefit of the Secured Parties, may institute an action, suit or proceeding in equity for specific performance of this Mortgage which shall be specifically enforceable by injunction or other equitable remedy.

3.4 Mortgagee’s Power of Enforcement .

(a) If an Actionable Default occurs and is continuing, Mortgagee for the benefit of the Secured Parties shall be entitled, at its option and in its sole and absolute discretion, to institute a proceeding or proceedings for the complete foreclosure of this Mortgage in which case the Mortgaged Property or any interest therein may be sold for cash or upon credit in one or more parcels or in several interests or portions and in any order or manner in accordance with the laws of the jurisdiction in which such Mortgaged Property is located, and sell for cash or upon credit the Mortgaged Property or any part thereof and all estate, claim, demand, right, title and interest of Mortgagor therein and rights of redemption thereof, pursuant to the provisions contained herein or as otherwise permitted in accordance with the laws of the jurisdiction in which such Mortgaged Property is located, at one or more sales, as an entity or in parcels, at such time and place, upon such terms and after such notice thereof as may be required or permitted by the laws of the State. Mortgagee for the benefit of the Secured Parties may require Mortgagor to pay monthly in advance to Mortgagee for the benefit of the Secured Parties, or any receiver appointed to collect the Rents, the fair and reasonable rental value for the use and occupation of any portion of the Mortgaged Property occupied by Mortgagor and require Mortgagor to vacate and surrender possession to Mortgagee of the Mortgaged Property or to such receiver and, in default thereof, evict Mortgagor by summary proceedings or otherwise. It shall be a condition precedent to any sale or transfer of the Mortgaged Property or any part thereof to any purchaser or transferee, that such purchaser or transferee enter into an assumption agreement substantially in the form of the assumption and adoption dated May 9, 2005 which is one of the Crest Settlement Documents unless, at the time of each such transfer, Cheniere or any of its direct or indirect affiliates, joint ventures, and subsidiaries that are involved in the LNG business have under contract at one or more LNG facilities it retains, the right and obligation to process and receive a tariff for processing at least one Bcf of gas per day, for a period of at least five years following such transfer of assets. To the extent any purchaser or transferee is required to enter into any such assumption agreement, it shall be assigned the benefits of the Crest Cheniere Indemnity.

 

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(b) If any Actionable Default occurs and is continuing, Mortgagee for the benefit of the Secured Parties may, either with or without entry or taking possession of the Mortgaged Property, and without regard to whether or not the indebtedness and other sums secured hereby shall be due and without prejudice to the right of Mortgagee thereafter to bring an action or proceeding to foreclose or any other action for any default existing at the time such earlier action was commenced, proceed by any appropriate action or proceeding: (a) to enforce payment of the Secured Obligations, to the extent permitted by law, or the performance of any term hereof or any other right; (b) to foreclose this Mortgage in any manner provided by law for the foreclosure of mortgages or deeds of trust on real property and to sell, as an entirety or in separate lots or parcels, the Mortgaged Property or any portion thereof pursuant to the laws of the State or under the judgment or decree of a court or courts of competent jurisdiction, and Mortgagee shall be entitled to recover in any such proceeding all costs and expenses incident thereto, including reasonable attorneys’ fees in such amount as shall be awarded by the court; (c) to the extent not prohibited by the laws of the State, to exercise any or all of the rights and remedies available to it under the Secured Debt Documents; and (d) to pursue any other remedy available to it. Mortgagee shall take action either by such proceedings or by the exercise of its powers with respect to entry or taking possession, or both, as Mortgagee may determine.

(c) The remedies described in this Section may be exercised with respect to all or any portion of the UCC Collateral, either simultaneously with the sale of any real property encumbered hereby or independent thereof. Mortgagee for the benefit of the Secured Parties shall at any time be permitted to proceed with respect to all or any portion of the UCC Collateral in any manner permitted by the UCC. Mortgagor agrees that Mortgagee’s inclusion of all or any portion of the UCC Collateral in a sale or other remedy exercised with respect to the real property encumbered hereby, as permitted by the UCC, is a commercially reasonable disposition of such property.

3.5 Mortgagee’s Right to Enter and Take Possession, Operate and Apply Income .

(a) If an Actionable Default occurs and is continuing, Mortgagor, upon demand of Mortgagee, shall forthwith surrender to Mortgagee for the benefit of the Secured Parties the actual possession and, if and to the extent permitted by law, Mortgagee itself, or by such officers or agents as it may appoint, may enter and take possession of all of the Mortgaged Property, including the Tangible Collateral, without liability for trespass, damages or otherwise, and may exclude Mortgagor and its agents and employees wholly therefrom and may have joint access with Mortgagor to the books, papers and accounts of Mortgagor.

(b) If an Actionable Default has occurred and is continuing and Mortgagor shall for any reason fail to surrender or deliver the Mortgaged Property or any part thereof after Mortgagee’s demand, Mortgagee for the benefit of the Secured Parties may obtain a judgment or decree conferring on Mortgagee for the benefit of the Secured Parties the right to immediate possession or requiring Mortgagor to deliver immediate possession of all or part of such property to Mortgagee for the benefit of the Secured Parties and Mortgagor hereby specifically consents to the entry of such judgment or decree. Mortgagor shall pay to Mortgagee for the benefit of the Secured Parties, upon demand, all costs and expenses of obtaining such judgment or decree and reasonable

 

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compensation to Mortgagee for the benefit of the Secured Parties, their attorneys and agents, and all such costs, expenses and compensation shall, until paid, be secured by the lien of this Mortgage.

(c) Upon every such entering upon or taking of possession, Mortgagee for the benefit of the Secured Parties may hold, store, use, operate, manage and control the Mortgaged Property and conduct the business thereof, and, from time to time in its sole and absolute discretion and without being under any duty to so act:

(1) make all necessary and proper maintenance, repairs, renewals and replacements thereto and thereon, and all necessary additions, betterments and improvements thereto and thereon and purchase or otherwise acquire fixtures, personalty and other property in connection therewith;

(2) insure or keep the Mortgaged Property insured;

(3) manage and operate the Mortgaged Property and exercise all the rights and powers of Mortgagor in their name or otherwise with respect to the same;

(4) enter into agreements with others to exercise the powers herein granted Mortgagee, all as Mortgagee from time to time may determine; and shall apply the monies so received by Mortgagee in such priority as provided by the Collateral Trust Agreement; and/or

(5) rent or sublet the Mortgaged Property or any portion thereof for any purpose permitted by this Mortgage.

Mortgagee shall surrender possession of the Mortgaged Property to Mortgagor (i) as may be required by law or court order, or (ii) when all amounts under any of the terms of the Secured Debt Documents, including this Mortgage, shall have been paid current and all Actionable Defaults have been cured or waived. The same right of taking possession, however, shall exist if any subsequent Actionable Default shall occur and be continuing.

3.6 Separate Sales . To the extent permitted by law or Legal Requirements upon and during the continuation of an Actionable Default, the Mortgaged Property may be sold in one or more parcels and in such manner and order as Mortgagee, in its sole discretion, may elect, it being expressly understood and agreed that the right of sale arising out of any Actionable Default shall not be exhausted by any one or more sales and shall not affect the lien or security interest of this Mortgage on the remaining portion of the Mortgaged Property.

3.7 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and Redemption Laws . Mortgagor agrees to the full extent permitted by law that ,if an Actionable Default occurs and is continuing, neither Mortgagor nor anyone claiming through or under it shall or will set up, claim or seek to take advantage of any appraisement, moratorium, valuation, stay, extension or redemption laws now or hereafter in force, in order to prevent or hinder the enforcement or foreclosure of this Mortgage or the absolute sale of the Mortgaged Property or any portion thereof or the final and absolute putting into possession thereof, immediately after such sale, of the purchasers thereof, and Mortgagor for itself and all who may at any time claim through or under it,

 

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hereby waives, to the full extent that it may lawfully so do, the benefit of all such laws, and any and all right to have the assets comprising the Mortgaged Property marshaled upon any foreclosure of the lien and security interest hereof and agrees that Mortgagee or any court having jurisdiction to foreclose such lien may sell the Mortgaged Property in part or as an entirety.

3.8 Keeper . If an Actionable Default occurs and is continuing, Mortgagee for the benefit of the Secured Parties, to the extent permitted by law, and without regard to the value, adequacy or occupancy of the security for the indebtedness and other sums secured hereby, shall be entitled as a matter of right if it so elects to the appointment of a keeper to enter upon and take possession of the Mortgaged Property and to collect all earnings, revenues and receipts and apply the same as the court may direct, and such keeper may be appointed by any court of competent jurisdiction upon application by Mortgagee. To the extent permitted by law or Legal Requirement, Mortgagee for the benefit of the Secured Parties may have a keeper appointed without notice to Mortgagor or any third party, and Mortgagee may waive any requirement that the keeper post a bond. To the extent permitted by law or Legal Requirement, Mortgagee for the benefit of the Secured Parties shall have the power to designate an