Exhibit 10.31
LIEN SUBORDINATION AGREEMENT
THIS LIEN SUBORDINATION AGREEMENT is entered into this 4th day of January,
2000, by and among EnCap Energy Capital Fund III, L.P. ("Subordinated
Creditor"), Schlumberger Technology Corporation ("Senior Creditor"), and
Cheniere Energy, Inc. ("Debtor").
WHEREAS, each of Senior Creditor and Subordinated Creditor has heretofore
extended credit to Debtor; and
WHEREAS, in order to secure the payment and performance of its obligations
to Senior Creditor under that certain promissory note made by Debtor in the
principal amount of $1,117,569.84 to the order to Senior Creditor of even date
herewith (the "Senior Note"), Debtor has granted liens and security interests
encumbering certain of its real and personal property (the "Collateral") to
Senior Creditor pursuant to that certain (i) Mortgage, Assignment, Security
Agreement, Fixture Filing and Financing Statement ("Mortgage") by Debtor of even
date herewith in favor of Senior Creditor (the liens and security interests
created by such Mortgage are herein referred to as the "Senior Liens"), and (ii)
Debt Restructure Agreement between Senior Creditor and Debtor of even date
herewith; and
WHEREAS, in order to secure the payment and performance of its obligations
to Subordinated Creditor, Debtor has granted liens and security interests
encumbering the Collateral to Subordinated Creditor pursuant to that certain
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing Statement
recorded in Cameron Parish, Louisiana on September 3, 1999 in Mortgage Book 245,
File No. 261733, as amended by that certain First Amendment to Mortgage,
Assignment, Security Agreement, Fixture Filing and Financing Statement recorded
in Cameron Parish, Louisiana on September 9, 1999 in Mortgage Book 245, File No.
2618017, and as amended by that certain Second Supplement and Amendment to
Mortgage, Assignment, Security Agreement, Fixture Filing and Financing Statement
recorded in Cameron Parish, Louisiana on October 26, 1999 in Mortgage Book 246,
File No. 262290 (such Mortgage, Assignment, Security Agreement, Fixture Filing
and Financing Statement, as from time to time amended, is herein referred to as
the "Subordinated Mortgage" and the liens and security interests created by
Subordinated Mortgage are herein referred to as the "Subordinated Liens"); and
WHEREAS, Senior Creditor has asked Subordinated Creditor to, and
Subordinated Creditor has agreed to, subordinate the Subordinated Liens to the
Senior Liens;
NOW THEREFORE, Senior Creditor, Subordinated Creditor, and Debtor hereby
agree as follows:
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1. Subordinated Creditor hereby subordinates the Subordinated Liens to the
Senior Liens to the same extent as if the Senior Liens had been properly
recorded, filed, and otherwise perfected prior to the Subordinated Liens
regardless of the relative priority of the Subordinated Liens without
regard to this Lien Subordination Agreement.
2. Each party hereto agrees that the subordination contained herein shall
become null and void upon the date on which all obligations owing by Debtor
to Senior Creditor under the Senior Note have been satisfied in full.
3. Upon any sale, transfer or other disposition of any Collateral by either
Senior Creditor or Subordinated Creditor in exercise of their respective
rights as a lienholder, secured party or mortgagee, Subordinated Creditor
shall have no right to any proceeds of such sale, transfer or other
disposition until all obligations owing by Debtor to Senior Creditor under
the Senior Note have been satisfied in full.
4. If Subordinated Creditor receives any payment or distribution of any kind
(whether in cash, securities or other property) in contravention of either
(i) this Lien Subordination Agreement, or (ii) the Three Party Agreement by
and between Debtor, Senior Creditor and Subordinated Creditor of even date
herewith, it shall hold such payment or distribution in trust for Senior
Creditor, shall segregate the same from other cash or assets it holds and
shall immediately deliver the same to Senior Creditor in the form received
by Subordinated Creditor (together with any necessary endorsement).
5. If any term or provision of this Lien Subordination Agreement shall be
determined to be illegal or unenforceable all other terms and provisions
shall nevertheless remain effective and shall be enforced to the fullest
extent permitted by applicable law.
6. This Lien Subordination Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Louisiana. This Lien
Subordination Agreement may be separately executed in counterparts, each of
which shall be deemed to constitute one and the same agreement. Facsimiles
of executed documents shall be deemed original documents.
7. Debtor hereby consents to the terms of this Lien Subordination Agreement.
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IN WITNESS WHEREOF, this Agreement is executed and delivered by the parties
hereto as of date first written above.
WITNESSES CHENIERE ENERGY, INC.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxxxx, Vice Chairman
of the Board of Directors
Name:
Notary Public
ENCAP ENERGY CAPITAL FUND III, L.P.
By: EnCap Investments L.C., General Partner
Name:
By:
--------------------------------------
D. Xxxxxx Xxxxxxxx, Managing Director
Name:
Notary Public
SCHLUMBERGER TECHNOLOGY CORPORATION
Name: By:
------------------------------
Name:
Title:
Name:
Notary Public
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ACKNOWLEDGMENT
STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
On this date before me, the undersigned authority, personally came and
appeared Xxxxxx X. Xxxxxxxx, to me personally known and known by me to be the
person whose genuine signature is affixed to the foregoing document as the Vice
Chairman of the Board of Directors of Cheniere Energy, Inc., a Delaware
corporation, who signed said document before me in the presence of the two
witnesses, whose names are thereto subscribed as such, being competent
witnesses, and who acknowledged, in my presence and in the presence of said
witnesses, that he signed the above and foregoing document as his own free act
and deed on behalf of such corporation by authority of its board of directors
and as the free act and deed of such corporation and for the uses and purposes
therein set forth and apparent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the
City of Houston, Xxxxxx County, Texas, on the day and year first above written.
______________________________________
NOTARY PUBLIC, State of Texas
______________________________________
(printed name)
My commission expires:
[SEAL]
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STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
On this date before me, the undersigned authority, personally came and
appeared D. Xxxxxx Xxxxxxxx, to me personally known and known by me to be the
person whose genuine signature is affixed to the foregoing document as the
Managing Director of EnCap Investments L.C., General Partner of EnCap Energy
Capital Fund III, L.P., a Texas limited partnership, who signed said document
before me in the presence of the two witnesses, whose names are thereto
subscribed as such, being competent witnesses, and who acknowledged, in my
presence and in the presence of said witnesses, that he signed the above and
foregoing document as his own free act and deed on behalf of such general
partner acting on behalf of said limited partnership by proper authority and as
the free act and deed of such general partner acting of behalf of said limited
partnership and for the uses and purposes therein set forth and apparent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the
City of Houston, Xxxxxx County, Texas, on the day and year first above written.
______________________________________
NOTARY PUBLIC, State of Texas
______________________________________
(printed name)
My commission expires:
[SEAL]
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STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
On this date before me, the undersigned authority, personally came and
appeared ___________________________________________, to me personally known and
known by me to be the person whose genuine signature is affixed to the foregoing
document as the __________________________________________of Schlumberger
Technology Corporation, a Texas corporation, who signed said document before me
in the presence of the two witnesses, whose names are thereto subscribed as
such, being competent witnesses, and who acknowledged, in my presence and in the
presence of said witnesses, that he signed the above and foregoing document as
his own free act and deed on behalf of such corporation by authority of its
board of directors and as the free act and deed of such corporation and for the
uses and purposes therein set forth and apparent.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal in the
City of Houston, Xxxxxx County, Texas, on the day and year first above written.
______________________________________
NOTARY PUBLIC, State of Texas
______________________________________
(printed name)
My commission expires:
[SEAL]
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