EXHIBIT 10.5
Execution
Version
SABINE CONSENT AND
AGREEMENT
[Management Services
Agreement]
THIS CONSENT AND AGREEMENT (this
“ Consent and Agreement ”), dated as of
August 15, 2008, is made by and among CHENIERE LNG TERMINALS,
INC., a Delaware corporation (“ Manager ”),
SABINE PASS LNG, L.P., a Delaware limited partnership (“
Sabine ”), and The BANK OF NEW YORK MELLON, in its
capacity as Collateral Agent (in such capacity, together with its
successors in such capacity, the “ Collateral Agent
”).
W I T N E S S E T
H
WHEREAS, Sabine owns and is
constructing a LNG receiving terminal in Cameron Parish, Louisiana,
featuring a regasification design capacity of approximately
4.0 billion cubic feet per day, two docks and five storage
tanks (the “ Project ”);
WHEREAS, on or about the date
hereof, Cheniere Common Units Holding, LLC (“ Borrower
”), an affiliate of Manager, will enter into a $250,000,000
secured Credit Agreement, dated on or about the date hereof (as
amended, restated, supplemented or otherwise modified from time to
time, the “ Credit Agreement ”), between
Borrower, the loan parties signatory thereto and The Bank of New
York Mellon, in its capacity as Administrative Agent and Collateral
Agent;
WHEREAS, Manager (as assignee of
Sabine Pass LNG-GP, Inc.) and Sabine have entered into that certain
Management Services Agreement dated as of February 25, 2005
(as amended, restated, supplemented or otherwise modified from time
to time, the “ Assigned Agreement ”) pursuant to
which the Manager agrees to provide certain services in connection
with the management of the Project; and
WHEREAS, as security for the
obligations under the Credit Agreement, Manager has assigned,
pursuant to the security documents entered into among Manager,
certain affiliates of Manager and the Collateral Agent (as amended,
restated, supplemented or otherwise modified from time to time, the
“ Security Documents ”), all of its right, title
and interest in, to and under, and granted a security interest in,
the Assigned Agreement to the Collateral Agent on behalf of the
secured parties identified therein (the “ Secured
Parties ”).
NOW THEREFORE, as an inducement to
the lenders to make the loans under the Credit Agreement, and in
consideration of other good and valuable consideration, the receipt
and adequacy of which is hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
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Consent and
Agreement .
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(a) Sabine hereby acknowledges and
irrevocably consents in all respects to the assignment by Manager
of all its right, title and interest in the Assigned Agreement to
the Collateral Agent as collateral security for the payment and
performance by the Borrower of the Borrower’s obligations
under the Credit Agreement and the performance of Manager’s
obligations under the Security Documents.
(b) Sabine hereby acknowledges and
irrevocably consents in all respects to the right of the Collateral
Agent, upon the occurrence and during the continuance of an Event
of Default under the Credit Agreement, to exercise and enforce all
rights of Manager under the Assigned Agreement in accordance with
the terms of the Assigned Agreement.
(c) Upon the exercise by the
Collateral Agent of any of the remedies set forth in and in
accordance with the terms of the Credit Agreement and the Security
Documents, the Collateral Agent may assign its rights and interests
and the rights and interests of Manager under the Assigned
Agreement, subject to clause (h) hereof. Upon such assignment,
the Collateral Agent shall be released from any further liability
under the Assigned Agreement or such new agreement to the extent of
the interest assigned.
(d) Sabine acknowledges and agrees
that, notwithstanding anything to the contrary contained in the
Assigned Agreement, neither of the following events shall
constitute a default by Manager under the Assigned Agreement or
require the consent of Sabine: (i) the provision of the
Services (as defined in the Assigned Agreement) by a suitable
operator by or on behalf of the Collateral Agent following the
occurrence and continuance of an event of default under the Credit
Agreement; or (ii) foreclosure or any other enforcement of the
rights of the lenders under the Credit Agreement or the Security
Documents by the Collateral Agent; provided that the actions
taken pursuant to clauses (i) or (ii) otherwise comply
with applicable law.
(e) Notwithstanding anything to the
contrary in the Assigned Agreement, Sabine shall not, without the
prior written consent of the Collateral Agent, cancel, suspend
performance under or terminate the Assigned Agreement unless Sabine
shall have delivered to the Collateral Agent written notice stating
that it is entitled to do so under the Assigned Agreement and that
it intends to exercise such right on a date no fewer than 30 days
after the date of such notice in the case of a payment default or
60 days after the date of such notice in the case of any other
default; provided that (i) such cure period shall be
extended to such longer period as may be reasonably required to
cure such default if the Collateral Agent or its assignee or
designee has commenced and is diligently pursuing appropriate
action to cure such default ( provided , however ,
that in no event shall such extended period exceed an additional 30
days in the case of a payment default or 60 days in the case of any
other default) and (ii) if the Collateral Agent or its
designee or assignee is prohibited from curing any such default by
any process, stay or injunction issued by any governmental
authority or pursuant to any bankruptcy or insolvency proceeding or
other similar proceeding involving Manager, then such cure period
shall be extended for the period of such prohibition.
Sabine’s notice shall specify the nature of the default
giving rise to its right to cancel, suspend performance under or
terminate the Assigned Agreement and Sabine shall permit Manager
and/or the Collateral Agent to cure such default. Nothing herein
shall require the Collateral Agent to cure any default of Manager
under the Assigned Agreement or to perform any act, duty or
obligation of Manager under the Assigned Agreement, but shall only
give it the option to do so. It being understood that, in the event
the Collateral Agent cures any default of
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Manager under the Assigned
Agreement, the Collateral Agent shall have no further obligation to
cure any subsequent default or to perform any act, duty or
obligation of Manager under the Assigned Agreement.
(f) Neither Sabine nor Manager
shall, without the prior written consent of the Required Lenders
(as defined in the Credit Agreement), (i) enter into any
novation, material amendment or other material modification of the
Assigned Agreement, (ii) sell, assign or otherwise transfer
any of its rights under the Assigned Agreement,
(iii) terminate, cancel or suspend its performance under the
Assigned Agreement (unless the applicable parties have given the
Collateral Agent notice and an opportunity to cure in accordance
with clause (e) hereof), (iv) consent to any assignment
or other transfer by any other party of its respective rights under
the Assigned Agreement, except in connection with a refinancing of
the Loans made pursuant to the Credit Agreement or, to the extent
such assignment or transfer does not adversely affect the Lenders
under the Credit Agreement, a refinancing of the indebtedness
created under the Sabine Indenture or the issuance of Additional
Notes (as defined in the Sabine Indenture), or (v) consent to
any voluntary termination, cancellation or suspension of
performance by any party under the Assigned Agreement.
(g) Sabine shall perform and comply
with all material terms and provisions of the Assigned Agreement to
be performed or complied with by it for the benefit of the
Collateral Agent.
(h) Sabine acknowledges and agrees
that the Collateral Agent shall not have any liability or
obligation under the Assigned Agreement as a result of this Consent
and Agreement, the Security Documents or otherwise, nor shall the
Collateral Agent be obligated or required to (i) perform
Manager’s obligations under the Assigned Agreement, except
during any period in which the Collateral Agent has assumed
Manager’s rights and obligations under the Assigned Agreement
pursuant to clause (b) above, or (ii) take any action to
collect or enforce any claim for payment assigned under the
Security Documents. For the avoidance of doubt, Manager and Sabine
agree that the payments to be made by Sabine to Manager under the
Assigned Agreement, or as otherwise provided for in this Consent
and Agreement, are conditioned upon the performance of
Manager’s obligations under the Assigned Agreement. Except as
set forth above, neither the Collateral Agent, its designee or
assignee nor any other party secured by the Security Documents
shall be liable for the performance or observance of any of the
obligations or duties of Manager under the Assigned Agreement,
including the performance by the Collateral Agent or its
