Exhibit 10.11
STOCK TRANSFER AGREEMENT
by and among
GRYPHON EXPLORATION COMPANY
CHENIERE-GRYPHON MANAGEMENT, INC.
and
CHENIERE ENERGY, INC.
Dated as of March 19, 2002
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS..............................................................................1
Section 1.1. Definitions..........................................................................1
Section 1.2. Accounting Terms and Determinations..................................................1
ARTICLE II. THE SALE OF THE SHARES AND ASSUMPTION OF ASSUMED LIABILITIES.............................1
Section 2.1. Sale of Shares.......................................................................1
Section 2.2. Purchase Price; Assumption of the Assumed Liabilities................................2
ARTICLE III. THE STOCK OPTION.........................................................................2
Section 3.1. The Option...........................................................................2
Section 3.2. Exercise of the Option...............................................................3
Section 3.3. The Option Closing...................................................................3
Section 3.4. Adjustment of Option Shares and Per Share Exercise Price.............................4
Section 3.5. No Rights as Stockholder; No Beneficial Ownership Prior to the
Option Closing for Purposes of the Contribution Agreement
and the Stockholders Agreement....................................................4
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF HOLDER.................................................4
Section 4.1. Organization of Holder...............................................................4
Section 4.2. Authority and Binding Effect.........................................................5
Section 4.3. No Conflict or Violation; Consents...................................................5
Section 4.4. Status of Assumed Liabilities........................................................6
Section 4.5. Title to the Shares..................................................................6
Section 4.6. Litigation...........................................................................6
Section 4.7. Investment Representations...........................................................6
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................................7
Section 5.1. Organization of the Company..........................................................7
Section 5.2. Authority and Binding Effect.........................................................7
Section 5.3. No Conflict or Violation; Consents...................................................8
Section 5.4. Litigation...........................................................................8
Section 5.5. Option Shares........................................................................9
ARTICLE VI. CONDITIONS TO THE COMPANY'S OBLIGATIONS..................................................9
Section 6.1. Representations and Warranties.......................................................9
Section 6.2. Compliance with Agreement............................................................9
Section 6.3. Certificate..........................................................................9
Section 6.4. No Governmental Restraints...........................................................9
(i)
TABLE OF CONTENTS
(continued)
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ARTICLE VII. MISCELLANEOUS PROVISIONS.................................................................9
Section 7.1. Notices..............................................................................9
Section 7.2. Amendments..........................................................................10
Section 7.3. Assignment and Parties in Interest..................................................10
Section 7.4. Expenses............................................................................10
Section 7.5. Entire Agreement....................................................................10
Section 7.6. Descriptive Headings................................................................11
Section 7.7. Counterparts........................................................................11
Section 7.8. Governing Law; Jurisdiction; Expenses...............................................11
Section 7.9. Construction........................................................................11
Section 7.10. Severability........................................................................11
Section 7.11. Survival............................................................................11
Section 7.12. Announcements; Confidentiality......................................................12
Section 7.13. Waiver of Stockholders Agreement....................................................12
(ii)
SCHEDULE
NUMBER SCHEDULE NAME
AL Assumed Liabilites
4.4 Status of Assumed Liabilities
4.6 Litigation
EXHIBIT EXHIBIT NAME
A Definitions
B Form of Exercise Notice
C Form of Settlement Agreement and Mutual Release
(iii)
STOCK TRANSFER AGREEMENT
This STOCK TRANSFER AGREEMENT, dated as of March 19, 2002 (this
"Agreement"), is made and entered into by and between, Gryphon Energy Company, a
Delaware corporation (the "Company"), Cheniere-Gryphon Management, Inc., a
Delaware corporation ("CGMI") and Cheniere Energy, Inc., a Delaware corporation
("CHEX" and together with CGMI, the "Holder").
WHEREAS, Holder contributed certain assets to the Company pursuant to
that certain Contribution and Subscription Agreement, dated as of September 15,
2000 (the "Contribution Agreement") in exchange for 145,590 shares of Common
Stock (the "Contribution");
WHEREAS, in connection with the Contribution, Holder agreed to pay
certain transfer fees, consent payments, and continuing royalties to certain
third parties;
WHEREAS, the Holder desires that the Company assume certain of those
payment obligations in exchange for the surrender of 51,400 shares of Common
Stock subject to a repurchase option on the terms and subject to the condition
set forth herein, and the Company is willing to assume such payment obligations
on the terms and subject to the obligations set forth herein;
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. In addition to the terms defined elsewhere
herein, the terms defined in the introductory paragraph and the Recitals to this
Agreement shall have the respective meanings specified therein, and the terms
set forth in Exhibit A hereto shall have the meanings specified in Exhibit A
when used herein with initial capital letters.
Section 1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles as in effect in the U.S.
ARTICLE II.
THE SALE OF THE SHARES AND ASSUMPTION OF ASSUMED LIABILITIES
Section 2.1. Sale of Shares. On the terms and subject to the
conditions set forth in this Agreement, concurrent with the execution of this
Agreement:
(a) The Company shall purchase from Holder, and Holder shall sell,
transfer, assign, convey and deliver to the Company, 51,400 shares of
Common Stock (the "Shares") free and clear of all Liabilities and Liens.
(b) Holder shall deliver to the Company or its designees certificates
representing the Shares, duly endorsed in blank for transfer or accompanied
by appropriate powers duly executed in blank. To the extent the certificate
delivered by Holder is for a greater number of shares of Common Stock than
the Shares, the Company shall return to Holder a certificate for the shares
of Common Stock not being transferred pursuant to the terms of this
Agreement.
Section 2.2. Purchase Price; Assumption of the Assumed Liabilities.
(a) The purchase price for the Shares shall be the assumption by the
Company of the Assumed Liabilities.
(b) On the terms and subject to the conditions set forth in this
Agreement, concurrent with the execution of this Agreement the Company
shall assume and become responsible for all of the Assumed Liabilities and
agrees to be bound by the provisions of the Assumed Liabilities Contract
relating to the Assumed Liabilities as if it were named as a party thereto
in the place of Holder, excluding the Excluded Liabilities.
(c) From and after the date hereof, the Company shall have the sole
and exclusive power to direct the payment, satisfaction, settlement or
compromise of the Assumed Liabilities; provided that such payment,
satisfaction, settlement or compromise does not increase any of Holder's
other obligations or liabilities under the applicable agreement, and Holder
shall cooperate with any reasonable direction of the Company with respect
thereto, including, executing a settlement agreement and mutual release of
the obligee of the Assumed Liability described in Item 1 of Schedule AL
(which may be in the form of Exhibit C hereto) in exchange for a release of
Holder from such Assumed Liability. To the extent any Assumed Liability is
subject to, or conditioned upon, the acceptance of any data, the Company
shall have the sole and exclusive right to accept or reject such data,
which decision shall be binding upon Holder. Without limiting the
foregoing, Holder shall not enter into or waive, amend, terminate or
otherwise modify any arrangement, agreement, understanding, or contract,
whether written or oral, relating to the Assumed Liabilities (an "Assumed
Liabilities Contract").
ARTICLE III.
THE STOCK OPTION
Section 3.1. The Option.
(a) At any time, and from time to time, from the date hereof through
and including March 16, 2003 (the "Expiration Date"), Holder shall have the
right (the "Option") to purchase from the Company, upon the terms and
subject to the conditions of this Agreement, up to 51,400 shares of Common
Stock (the "Option Shares") for a per
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share purchase price, in cash, equal to the Per Share Exercise Price on the
Option Closing Date.
(b) The "Per Share Exercise Price" as of any Option Closing Date shall
be calculated as follows:
(i) For any Option Closing Date occurring from the date hereof
through, but not including July 18, 2002 (the "Flipover Date"), an
amount per share of Common Stock equal to $50.00.
(ii) For any Option Closing Date occurring on the Flipover Date
an amount per share of Common Stock equal to $55.8443.
(iii) For any Option Closing Date occurring after the Flipover
Date an amount per share of Common Stock equal to the sum of (x)
$55.8443, and (y) the product of (A) $.0483, and (B) the number of
days elapsed since the Flipover Date.
Section 3.2. Exercise of the Option. Holder may exercise the Option by
delivering an exercise notice at least (10) Business Days prior to the proposed
Option Closing Date (which may be no later than the Expiration Date)
substantially in the form of Exhibit B hereto (an "Exercise Notice"). Each
Exercise Notice shall constitute a representation and warranty by Holder that
all of the conditions to the Company's obligation to issue the Option Shares set
forth in Article VI hereof (other than the delivery of the Certificate required
by Section 6.3) have been satisfied.
Section 3.3. The Option Closing.
(a) Subject to the satisfaction of the conditions set forth in Article
VI, the closing of the purchase of the Option Shares (the "Option Closing")
shall occur at 10:00 a.m. local time on the date set forth in the Exercise
Notice or at such other time as the parties hereto shall mutually agree
(the "Option Closing Date"). The Option Closing shall occur at the offices
of the Company's counsel or at such other location as the parties hereto
shall mutually agree.
(b) On the Option Closing Date, the Company shall deliver to Holder a
certificate for the Option Shares so purchased, free and clear of all
Liens, other than the restrictions imposed by the Company's Stockholders
Agreement, dated as of October 11, 2000, as the same may be amended in
accordance with its terms (the "Stockholders Agreement") and restrictions
on transfer arising under federal and state securities laws. Holder
acknowledges that any Option Shares acquired shall be subject to the
restrictions of the Stockholders Agreement.
(c) On the Option Closing Date, Holder shall deliver to the Company,
by wire transfer of immediately available funds, an amount equal to product
of the number of Option Shares purchased and the Per Share Exercise Price.
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Section 3.4. Adjustment of Option Shares and Per Share Exercise Price.
(a) In case the Company shall at any time subdivide its outstanding
shares of Common Stock into a greater number of shares (by stock dividend
on the Common Stock or otherwise), the Per Share Exercise Price shall be
proportionately reduced and the number of Option Shares shall be
proportionately increased such that on the Option Closing Date the Holder
shall receive the number of shares of Common Stock for an aggregate Per
Share Exercise Price as the Holder would have received if such subdivision
had occurred immediately after the Option Closing. In case the Company
shall at any time combine its outstanding shares of Common Stock into a
smaller number of shares, the Per Share Exercise Price shall be
proportionately increased and the number of Option Shares shall be
proportionately reduced such that on the Option Closing Date the Holder
shall receive the number of shares of Common Stock for an aggregate Per
Share Exercise Price as the Holder would have received if such combination
had occurred immediately after the Option Closing.
(b) If any capital reorganization or reclassification of the capital
stock of the Company, or consolidation or merger of the Company with
another entity shall be effected in such a way that holders of Common Stock
shall be entitled to receive stock, securities, cash or other property with
respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provision shall be made whereby Holder shall have the right to
acquire and receive upon exercise of the Option for each Option Share such
shares of stock, securities, cash or other property issuable or payable (as
part of the reorganization, reclassification, consolidation, merger or
sale) as would have been received if the Holder had held such Option Share
immediately prior to such transaction.
Section 3.5. No Rights as Stockholder; No Beneficial Ownership Prior
to the Option Closing for Purposes of the Contribution Agreement and the
Stockholders Agreement. Holder shall have no rights as a stockholder and shall
not be deemed to beneficially own any of the Option Shares prior to the Option
Closing with respect to such shares of Common Stock for all purposes, including
the Stockholders Agreement and the Contribution Agreement. For the avoidance of
doubt, in calculating the "Pro Rata Portion" pursuant to the Contribution
Agreement and the "Fully-Diluted Common Stock" pursuant to the Stockholders
Agreement, the Option Shares shall be disregarded and not be deemed to be
outstanding or beneficially owned until after the Option Closing with respect to
such Option Shares shall have occurred.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF HOLDER
Each of CGMI and CHEX, jointly and severally represents and warrants
to the Company as of the date hereof and as of each Option Closing Date as
follows:
Section 4.1. Organization of Holder. Each of CGMI and CHEX is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of
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Delaware. Each of CGMI and CHEX has the requisite corporate power and authority
to own its properties and to conduct its business as presently conducted.
Section 4.2. Authority and Binding Effect.
(a) The execution and delivery of this Agreement by each of CGMI and
CHEX, the performance by each of CGMI and CHEX of its obligations hereunder
and the consummation by each of CGMI and CHEX of the transactions
contemplated hereby (the "Transactions") have been duly authorized by the
board of directors of each of CGMI and CHEX, and no other corporate
proceedings on the part of each of CGMI and CHEX are necessary to authorize
this Agreement or the Transactions.
(b) This Agreement has been duly executed and delivered by each of
CGMI and CHEX, and (assuming due authorization, execution and delivery by
the Company) this Agreement constitutes a legal, valid and binding
obligation of each of CGMI and CHEX enforceable against each of CGMI and
CHEX in accordance with its terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, moratorium, or similar laws from time to
time in effect which affect creditors' rights generally and by legal and
equitable limitations on the enforceability of specific remedies.
Section 4.3. No Conflict or Violation; Consents. Neither the execution
and delivery of this Agreement nor the consummation or performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with, or result in a violation of (i) any
provision of the certificate of incorporation or by-laws of either of CGMI
or CHEX, or (ii) any resolution adopted by the board of directors or the
stockholders of either of CGMI or CHEX;
(b) contravene, conflict with, or result in a violation of, or give
any Governmental Agency or other Person the right to challenge the
Transactions or to exercise any remedy or obtain any relief under, any
Legal Requirement to which either of CGMI or CHEX or any of the assets
owned or used by either of CGMI or CHEX, may be subject;
(c) contravene, conflict with, or result in a violation of any of the
terms or requirements of, or give any Governmental Agency the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Permit that is
held by either of CGMI or CHEX or that otherwise relates to the business
of, or any of the assets owned or used by, either of CGMI or CHEX;
(d) contravene, conflict with, or result in a violation or breach of
any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, or to receive any additional
consideration under any contract or Permit to which either of CGMI or CHEX
is a party or subject; or
(e) require the consent, approval, or authorization of, or
registration or filing with, any Governmental Agency or any other Person.
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Section 4.4. Status of Assumed Liabilities.
(a) Schedule 4.4 sets forth a list of all of the Assumed Liabilities
Contracts.
(b) Except as set forth in Schedule 4.4, as of the date hereof:
(i) each of CGMI and CHEX has performed all material obligations
required to be performed by it to date under each of the Assumed
Liabilities Contracts and with respect to each of the Assumed
Liabilities.
(ii) Neither CGMI, CHEX nor, to each of their knowledge, any
other party thereto is in material breach of or default under any
Assumed Liabilities Contract.
(c) CGMI and CHEX have delivered to the Company a true, correct, and
complete copy of each Assumed Liabilities Contract, and any notice or other
communication received with respect to, the Assumed Liabilities.
Section 4.5. Title to the Shares. As of the date hereof, CGMI is the
sole record owner and CGMI and CHEX are the sole beneficial owners of the
Shares, free and clear of any Liabilities or Liens, other than the restrictions
imposed by the Stockholders Agreement and restrictions on transfer arising under
federal and state securities laws.
Section 4.6. Litigation. Except as set forth in Schedule 4.6, there
are no claims, actions, suits, proceedings, or investigations pending or to
Holder's knowledge threatened before any Governmental Agency brought by or
against the Holder or any of its officers, directors, employees, agents or
Affiliates either (a) involving, affecting or relating to the Assumed
Liabilities or the Shares or (b) which if adversely determined would reasonably
be expected to have a material adverse effect on the ability of Holder to
perform its obligations under this Agreement.
Section 4.7. Investment Representations. As of the date hereof:
(a) Holder is familiar with the business and financial condition,
properties, operations and prospects of the Company.
(b) Holder and its advisors have had an opportunity to ask questions
of, and to receive information from, the Company and persons acting on its
behalf concerning the terms and conditions of the investment in the Option
Shares, and to obtain any additional information necessary to verify the
accuracy of the information and data received by Holder. Holder has
received all the information concerning the condition, properties,
operations and prospects of the Company it considers necessary or
appropriate for deciding whether to purchase the Option Shares.
(c) Holder has made, either alone or together with its advisors, such
independent investigation of the Company, its management, and related
matters as Holder deems to be, or Holder's advisors have advised to be,
necessary or advisable in connection with the investment in the Option
Shares.
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(d) Holder understands that the purchase of the Option Shares involves
various risks, including, among others, that it is unlikely that any market
will exist for any resale of the Option Shares and that the Option Shares
will be subject to the provisions of the Stockholders Agreement.
(e) Holder has carefully reviewed all documents furnished to it in
connection with the investment in the Option Shares contemplated hereby,
and acknowledges that no representations or warranties have been made to
Holder or its representatives by the Company or its Affiliates,
representatives or advisors concerning the Option Shares, the Company, its
Affiliates or their prospects or other related matters except as set forth
in this Agreement.
(f) Holder has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the
investment represented by the Option Shares. Holder is able to bear the
economic risk of the purchase of the Option Shares made pursuant to this
Agreement (including the complete loss of its investment). Holder has
determined that this investment is suitable for it in light of its
financial circumstances and available investment opportunities, and any
legal restrictions applicable to it. Holder has reviewed, to the extent it
deemed advisable, the merits of an investment in the Option Shares with tax
and legal counsel and with an investment advisor. Holder is an "accredited
investor" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").
(g) It is acquiring the Option Shares for its own account for
investment and not with a view towards the resale, transfer or distribution
thereof, nor with any present intention of distributing the Option Shares,
but subject, nevertheless, to any requirement of law that the disposition
of the Holder's property shall at all times be within the Holder's control,
and without prejudice to Holder's right at all times to sell or otherwise
dispose of all or any part of such securities under a registration under
the Securities Act or under an exemption from said registration available
under the Securities Act.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Holder as of the date hereof
and as of each Option Closing Date as follows:
Section 5.1. Organization of the Company. The Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. The Company has the requisite corporate power and authority
to own its properties and to conduct its business as presently conducted.
Section 5.2. Authority and Binding Effect.
(a) The execution and delivery of this Agreement by the Company, the
performance by the Company of its obligations hereunder and the
consummation by the Company of the Transactions have been duly authorized
by the board of directors of the
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Company, and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or the Transactions.
(b) This Agreement has been duly executed and delivered by the
Company, and (assuming due authorization, execution and delivery by Holder)
this Agreement constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, or similar laws from time to time in effect which affect
creditors' rights generally and by legal and equitable limitations on the
enforceability of specific remedies.
Section 5.3. No Conflict or Violation; Consents. Neither the execution
and delivery of this Agreement nor the consummation or performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with, or result in a violation of (i) any
provision of the certificate of incorporation or by-laws of the Company, or
(ii) any resolution adopted by the board of directors or the stockholders
of the Company;
(b) contravene, conflict with, or result in a violation of, or give
any Governmental Agency or other Person the right to challenge the
Transactions or to exercise any remedy or obtain any relief under, any
Legal Requirement to which the Company or any of the assets owned or used
by the Company, may be subject;
(c) contravene, conflict with, or result in a violation of any of the
terms or requirements of, or give any Governmental Agency the right to
revoke, withdraw, suspend, cancel, terminate, or modify, any Permit that is
held by the Company or that otherwise relates to the business of, or any of
the assets owned or used by, the Company;
(d) contravene, conflict with, or result in a violation or breach of
any provision of, or give any Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, or to receive any additional
consideration under any contract or Permit to which the Company is a party
or subject; or
(e) require the consent, approval, or authorization of, or
registration or filing with, any Governmental Agency or any other Person.
Section 5.4. Litigation. There are no claims, actions, suits,
proceedings, or investigations pending or to the Company's knowledge threatened
before any Governmental Agency brought by or against the Company which if
adversely determined would reasonably be expected to have a material adverse
effect on the ability of the Company to perform its obligations under this
Agreement.
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Section 5.5. Option Shares.
(a) The Company has reserved sufficient shares for issuance to Holder
pursuant to the terms of this Agreement (including upon any adjustment
pursuant to Section 3.4).
(b) Upon issuance, sale and delivery as contemplated by this
Agreement, the Option Shares will be duly authorized, validly issued, fully
paid and non-assessable shares of the Company, free of (i) preemptive
rights, and (ii) all Liens created by the Company other than the
restrictions of the Stockholders Agreement.
ARTICLE VI.
CONDITIONS TO THE COMPANY'S OBLIGATIONS
The obligation of the Company to issue the Option Shares is subject to
the satisfaction (unless waived in writing by the Company) of each of the
following conditions on or prior to the Option Closing Date:
Section 6.1. Representations and Warranties. The representations and
warranties of Holder contained in this Agreement shall be true and correct on
and as of the Option Closing Date as though such representations and warranties
were made anew on and as of the Option Closing Date (except to the extent such
representations and warranties speak as of a specified date, in which case, such
representations and warranties shall be true and correct as of such specified
date).
Section 6.2. Compliance with Agreement. Holder shall have performed
and complied with all covenants to be performed or complied with by it under
this Agreement and under each other agreement to which Holder, on the one hand,
and the Company or any stockholder of the Company, on the other hand, is party,
on or prior to the Option Closing Date.
Section 6.3. Certificate. Holder shall have delivered to the Company a
certificate of its President or a Vice President, dated the Option Closing Date,
as to the satisfaction of the conditions set forth in Sections 6.1 and 6.2.
Section 6.4. No Governmental Restraints. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the purchase and sale of the Option Shares shall be threatened
or shall be in effect.
ARTICLE VII.
MISCELLANEOUS PROVISIONS
Section 7.1. Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given (a) when delivered
personally to the recipient, (b) one Business Day after the date when sent to
the recipient by reputable express courier service
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(charges prepaid), or (c) seven Business Days after the date when mailed to the
recipient by certified or registered mail, return receipt requested and postage
prepaid. Such notices, demands and other communications shall be sent to the
Company and to Holder at the addresses indicated below:
If to the Company: Gryphon Exploration Company
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention:
Facsimile Number: (000) 000-0000
If to Holder: Cheniere Energy, Inc.
Three Xxxxx Center
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxx
Facsimile Number: (000) 000-0000
or to such other address as either party hereto may, from time to time,
designate in writing delivered pursuant to the terms of this Section.
Section 7.2. Amendments. The terms, provisions and conditions of this
Agreement may not be changed, modified, waived or amended in any manner except
by an instrument in writing duly executed by the Company and Holder.
Section 7.3. Assignment and Parties in Interest. Neither this
Agreement nor any of the rights, duties, or obligations of any party hereunder
may be assigned or delegated (by operation of law or otherwise) by any party
hereto except with the prior written consent of the other party hereto. This
Agreement shall not confer any rights or remedies upon any person or entity
other than the parties hereto and their respective permitted successors and
assigns.
Section 7.4. Expenses. Except as expressly set forth in this
Agreement, each party to this Agreement shall bear all of its legal and other
expenses incurred by it or on its behalf in connection with the Transactions,
whether or not such transactions are consummated.
Section 7.5. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
supersedes and is in full substitution for any and all prior agreements and
understandings among them relating to such subject matter, and no party shall be
liable or bound to the other parties hereto in any manner with respect to such
subject matter by any warranties, representations, indemnities, covenants, or
agreements except as specifically set forth herein. The Exhibits and Schedules
to this Agreement are hereby incorporated and made a part hereof and are an
integral part of this Agreement.
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Section 7.6. Descriptive Headings. The descriptive headings of the
several sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 7.7. Counterparts. For the convenience of the parties, any
number of counterparts of this Agreement may be executed by any one or more
parties hereto, and each such executed counterpart shall be, and shall be deemed
to be, an original, but all of which shall constitute, and shall be deemed to
constitute, in the aggregate but one and the same instrument.
Section 7.8. Governing Law; Jurisdiction; Expenses. This Agreement and
the legal relations between the parties hereto shall be governed by and
construed in accordance with the laws of the State of Delaware, applicable to
contracts made and performed therein. Any action or proceeding seeking to
enforce any provision of, or based on any right arising out of, this Agreement
may only be brought against any of the parties in the courts of the State of New
York, County of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of
the parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any party anywhere in the world. In any
action based upon a breach of this Agreement, the prevailing party shall be
entitled to recover all reasonable attorney's fees and litigation costs expended
in connection with such litigation from the party in breach of the Agreement.
Section 7.9. Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction will be applied against any party. Any
references to any federal, state, local or foreign statute or law will also
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. Unless the context otherwise requires: (a) a term has the
meaning assigned to it by this Agreement; (b) including means "including but not
limited to"; (c) "or" is disjunctive but not exclusive; (d) words in the
singular include the plural, and in the plural include the singular; and (e) "$"
or "dollars" means the currency of the United States of America; all amounts
payable under this Agreement shall be paid in dollars.
Section 7.10. Severability. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument. Furthermore, in lieu of any such invalid
or unenforceable term or provision, the parties hereto intend that there shall
be added as a part of this Agreement a provision as similar in terms to such
invalid or unenforceable provision as may be possible and be valid and
enforceable.
Section 7.11. Survival. All of the representations, warranties,
covenants and agreements of the Company and Holder contained in this Agreement
or in any certificate delivered by Holder shall survive the Transactions and
each Option Closing.
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Section 7.12. Announcements; Confidentiality. Holder shall not
publicly disclose the terms of this Agreement, except (a) to the obligees of the
Assumed Liabilities and (b) that Holder may disclose and publicly file the
Agreement, but not the Schedules; provided, however, that Holder may disclose or
publicly file the Schedules to the extent Holder believes in good faith that
such disclosure or filing of the Schedules is required by law, regulation or
rule of any stock exchange on which its securities are traded (in which case
Holder shall use reasonable efforts to advise the Company prior to making such
disclosure and to provide the Company a reasonable opportunity to review the
proposed disclosure).
Section 7.13. Waiver of Stockholders Agreement. Holder and the Company
agree to waive the provisions of Sections 2.2, 2.4, 3.3 and 3.4 of the
Stockholders Agreement to the extent that such provisions would be applicable to
the Transactions. The Company represents and warrants that it has obtained a
corresponding waiver from the Group A Holders who own at least a majority of the
Fully-Diluted Common Stock held by all Group A Holders (as such terms are
defined in the Stockholders Agreement).
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the day and year first written above.
GRYPHON EXPLORATION COMPANY
By:
-----------------------------------
Name:
Title:
CHENIERIE-GRYPHON MANAGEMENT, INC.
By:
-----------------------------------
Name:
Title:
CHENIERIE ENERGY, INC.
By:
-----------------------------------
Name:
Title:
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