EXHIBIT 10
THE UNITS (AND THE SHARES OF COMMON STOCK AND THE WARRANTS COMPRISING THE UNITS)
WHICH ARE THE SUBJECT OF THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR
OTHERWISE DISPOSED OF FOR VALUE UNLESS A REGISTRATION STATEMENT HAS BECOME
EFFECTIVE WITH RESPECT TO SUCH SECURITIES UNDER THE SECURITIES ACT AND SUCH
STATE SECURITIES LAWS OR PURSUANT TO AN OPINION OF COUNSEL REASONABLY ACCEPTABLE
TO THE COMPANY THAT THERE IS AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
SUBSCRIPTION AGREEMENT
(Regulation "D" Offering)
THIS SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of the date of
acceptance set forth on the signature page hereto, is by and between CHENIERE
ENERGY, INC., a Delaware corporation, with offices located at 0000 Xxxxx Xxxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxx 00000 (the "Company"), and the undersigned (the
"Buyer").
WITNESSETH:
WHEREAS, the Buyer wishes to subscribe for and purchase Units (the "Units")
each consisting of one share of Common Stock, par value $.003 per share (the
"Common Stock") and one warrant (the "Warrants") to purchase one share of Common
Stock, upon the terms and subject to the conditions of this Agreement, subject
to acceptance of this Agreement by the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO SUBSCRIBE; SUBSCRIPTION PRICE.
a). Subscription. The Buyer, intending to be legally bound, hereby irrevocably
agrees to purchase from the Company the number of Units set forth on the
signature page of this Agreement. This Agreement is submitted in
accordance with and subject to the terms and conditions described in this
Agreement.
b). Acceptance of Subscription; Closing Date. The Company has the right to
accept or reject this Agreement, in whole or in part, in the Company's sole
discretion. The Company shall have 30 days from the date of the execution
and delivery of this Agreement by the undersigned to the Company in which
to accept this Agreement.
Payment for the Units shall be in accordance with Paragraph (c), and the
Units shall be delivered to a place of Buyer's designation upon payment.
c) Subscription Price. The subscription price of the Units (the "Subscription
Price") to be paid to the Company shall be U.S. $1.10 per Unit payable by a
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cashier's or certified check or by a wire transfer to: Bank One, Texas,
N.A., Houston, Texas: ABA No. 000000000; Cheniere Energy, Inc. Account No.
1820759908.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION; INDEPENDENT
INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees with, the
Company as follows:
a) The Buyer is purchasing the Units for its own account for investment only
and not with a view towards the public sale or distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act"),
and with no present intention of dividing or allowing others to participate
in this investment.
b) If the Buyer is an individual, the Buyer is an "accredited investor" as
that term is defined in Rule 501(a)(5) or (6) of Regulation D promulgated
under the Securities Act by reason that the Buyer is an individual (i)
having an individual net worth, or a joint net worth with the Buyer's
spouse, at the time of the purchase that exceeds $1,000,000, or (ii) who
had an individual income in excess of $200,000 in each of the two most
recent years or joint income with the Buyer's spouse in excess of $300,000
in each of those years and has a reasonable expectation of reaching the
same income level in the current year; or if the Buyer is a corporation or
other entity, the Buyer is an "accredited investor" as that term is defined
in Rule 501(a)(1), (2), (3), (7) or (8) of Regulation D promulgated under
the Securities Act.
c) If the Buyer is a corporation or other entity, it was not organized for the
specific purpose of acquiring the Units.
d) The Buyer has such knowledge, sophistication and experience in business,
tax and financial matters that the Buyer is capable of evaluating, and is
familiar with, the merits and risks of an investment in the Units, can bear
the substantial economic risk of an investment in the Units for an
indefinite period of time and can afford a complete loss of such
investment.
e) The Buyer represents that its overall commitment to investments which are
not readily marketable is not disproportionate to the Buyer's net worth,
and the Buyer's investment in the Units will not cause such overall
commitment to become excessive.
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f) If the Buyer is an individual, the Buyer has adequate means of providing
for his current needs and personal and family contingencies and has no need
for liquidity in his investment in the Units.
g) All subsequent offers and sales of the Units by the Buyer shall be made
pursuant to registration of such securities under the Securities Act and
applicable state securities laws or pursuant to a valid exemption from such
registration requirements.
h) The Buyer understands that the Units are being offered and sold to it in
reliance on specific exemptions from the registration requirements of
United States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Buyer's compliance with,
the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire
the Units. The Buyer agrees that, if any of the representations,
warranties, agreements, acknowledgments or understandings deemed to have
been made by it in connection with its investment in the Units is no longer
accurate, it shall promptly notify the Company and consult with the Company
in order to determine an appropriate course of action.
i) The Buyer has carefully read this Agreement and, to the extent that the
Buyer believed necessary, has discussed the representations, warranties and
agreements which the Buyer makes by signing this Agreement and the
applicable limitations upon the Buyer's resale of the Units with the
Buyer's counsel.
j) The Buyer and its advisors have been afforded the opportunity to ask
questions of the Company, and have received complete and satisfactory
answers to any and all such inquiries and has had access to such financial
and other information concerning the Company and the Shares as it has
deemed necessary in connection with its decision as to whether to make its
investment. Without limiting the generality of the foregoing, the Buyer
has been furnished with and has read the Company's Private Placement
Memorandum dated August 24, 1999 (the "Private Placement Memorandum") which
contains, in addition to other information, a section captioned "Risk
Factors" and "Description of Securities" and the following documents as
filed by the Company with the United States Securities and Exchange
Commission: (a) Annual Report on Form 10-K for the year ended December 31,
1998; (b) Quarterly Reports on Form 10-Q for the periods ended March 31,
1999 and June 30, 1999 and (c) Proxy Statement of the Company dated April
30, 1999. The Buyer specifically acknowledges that it does not require and
has not requested to see any information with respect to the Company or
this investment other than the information described in the Private
Placement Memorandum.
K) The Buyer acknowledges that (i) none of the Company, any affiliate thereof
or any person representing the Company or any affiliate thereof has made
any representation to it with respect to the Company or the offering or
sale of the Units, other than the information concerning the Company and
the offering contained in the Private Placement Memorandum, (ii) in making
its investment decision the Buyer is not relying upon any information given
by the Company or any affiliate thereof or any person representing the
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Company or any affiliate thereof other than the information concerning the
Company and the Offering contained in the Private Placement Memorandum and
(iii) no representation has been made, and no information has been
furnished, to the Buyer in connection with the offering or sale of the
Units that was in any way inconsistent with any other information with
which the Buyer has been provided.
l) The Buyer understands that no United States federal or state agency or any
other government or governmental agency has passed on or made any
recommendation or endorsement of the Units.
m) The address shown under the Buyer's signature at the end of this Agreement
is the principal residence of the Buyer, if the Buyer is an individual, or
the principal business address of the Buyer, if the Buyer is a corporation
or other entity.
n) The Buyer has full power and authority to enter into this Agreement and
consummate the transactions contemplated by this Agreement, and the Buyer,
if an individual, is at least 21 years of age. This Agreement has been
duly and validly authorized, executed and delivered by or on behalf of the
Buyer and is a valid and binding agreement of the Buyer enforceable in
accordance with its terms, subject as to enforceability to general
principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally.
o) The Buyer understands that its investment in the Units involves a high
degree of risk including those risks described in the section of the
Private Placement Memorandum captioned "Risk Factors," a copy of which has
been provided to Buyer. The Buyer is relying solely upon its own knowledge
and experience in business, tax and financial matters in making its
decision to purchase the Units.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
a) Organization and Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in the states in which
such qualification is required based on the nature and scope of the
Company's operations.
b) Concerning the Units. The shares of Common Stock, when issued, delivered
and paid for in accordance with this Agreement, will be duly and validly
authorized and issued, fully paid and nonassessable. The Warrants, when
issued, will be binding obligations of the Company, enforceable against it
in accordance with the terms of the warrants. The Common Stock issuable
upon exercise of each Warrant, when issued and paid for in accordance with
this Agreement, will be duly and validly authorized and issued, fully paid
and nonassessable.
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c) Subscription Agreement. The Company has full power and authority to enter
into this Agreement and consummate the transactions contemplated by this
Agreement. This Agreement, when accepted by the Company, shall have been
duly and validly authorized, executed and delivered on behalf of the
Company and shall be a valid and binding agreement of the Company
enforceable in accordance with its terms, subject as to enforceability to
general principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally.
d) Non-Contravention. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the issuance of the Units
and the other transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by the Company of any of the terms
or provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Company, or any indenture, mortgage, deed of
trust or other material agreement or instrument to which the Company is a
party or by which it or any of its properties or assets are bound, or any
existing applicable law, rule or regulation or any applicable decree,
judgment or order of any court, United States federal or state regulatory
body, administrative agency or other governmental body having jurisdiction
over the Company or any of its properties or assets.
e) Approvals. The Company is not aware of any authorization, approval or
consent of any governmental body which is required to be obtained by the
Company for the issuance and sale of the Units to the Buyer as contemplated
by this Agreement that has not been obtained.
f) Advertising. The Units are not being offered or sold by any form of
general solicitation or general advertising.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
a) Transfer Restrictions. The Buyer acknowledges that (i) the Units to be
issued to it hereunder have not been and are not being registered under the
provisions of the Securities Act or any applicable state securities laws
(except as provided in the Registration Procedures set forth in Section 5
of this Agreement), and may not be offered, sold, pledged or otherwise
transferred unless (A) the Units are subsequently registered under the
Securities Act and all applicable state securities laws or (B) the Buyer
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect
that the Units may be sold or transferred pursuant to a valid exemption
from such registration requirements; (ii) the Units are and will be
"restricted securities" (as defined in Rule 144 promulgated under the
Securities Act); (iii) any sale of the Units, made in reliance on Rule 144
promulgated under the Securities Act may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any
resale of the Units, under circumstances in which the seller, or the person
through whom the sale is made, may be deemed to be an underwriter, as that
term is used in the Securities Act, may require compliance with some other
exemption under the Securities Act or the rules and regulations of the
Securities and
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Exchange Commission (the "SEC") thereunder; and (iv) neither the Company
nor any other person is under any obligation to register the Units (other
than pursuant to the Registration Procedures set forth in Section 5 of this
Agreement) under the Securities Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.
b) Restrictive Legend. The Buyer acknowledges and agrees that "stop transfer"
instructions shall be placed against the Common Stock, the Warrants and the
shares of Common Stock issuable upon the exercise of the Warrants on the
transfer books of the Company, and that the certificate(s) evidencing the
foregoing securities shall bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("THE SECURITIES ACT"), OR ANY APPLICABLE STATE SECURITIES
LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
DISPOSED OF FOR VALUE UNLESS A REGISTRATION STATEMENT HAS
BECOME EFFECTIVE WITH RESPECT TO SUCH SECURITIES UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO
THE CORPORATION THAT THERE IS AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS."
c) Form D. The Company agrees to file a Form D with respect to the Units if
and as required under Regulation D of the Securities Act.
5. REGISTRATION PROCEDURES.
a) Within 90 days after the issuance of the Units, the Company shall prepare
and file or cause to be filed with the SEC a registration statement (the
"Registration Statement") with respect to the shares of Common Stock issued
in connection with the sale of Units and the shares of Common Stock
issuable upon the exercise of the Warrants (collectively, the "Shares").
The Company shall thereafter use diligence in attempting to cause the
Registration Statement to be declared effective by the SEC and shall
thereafter use diligence to maintain the effectiveness of the Registration
Statement until the earlier to occur of (i) the date which is one year from
the effective date of the Registration Statement, (ii) the date on which
all of the Units (or the securities underlying the Units) have been sold by
the Buyer or (iii) the date on which the Shares can be resold pursuant to
SEC Rule 144.
Should the Registration Statement not be declared effective by the SEC
within 120 days from the date of the Agreement, the Company, as liquidated
damages, shall issue to the Buyer an additional number of Units (equal to
2% times the number of Units purchased
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by the Buyer pursuant to this Agreement) each month thereafter
until the Registration Statement is declared effective.
b) Following effectiveness of the Registration Statement, the Company shall
furnish to the Buyer a prospectus as well as such other documents as the
Buyer may reasonably request.
c) The Company shall use diligent efforts to (i) register or otherwise qualify
the Common Stock covered by the Registration Statement for sale under the
securities laws of such jurisdictions as the Buyer may reasonably request,
(ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements as may be required, (iii) take
such other actions as may be necessary to maintain such registrations
and/or qualifications in effect at all times while the Registration
Statement is likewise maintained effective and (iv) take all other actions
reasonably necessary or advisable to qualify the Shares for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (I) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 5(c), (II) subject itself to general taxation
in any such jurisdiction, (III) file a general consent to service of
process in any such jurisdiction, (IV) provide any undertakings that cause
more than nominal expense or burden to the Company or (V) make any change
in its certificate of incorporation or bylaws, which in each case the Board
of Directors of the Company determines to be contrary to the best interests
of the Company and its stockholders.
d) The Company shall, following effectiveness of the Registration Statement,
as promptly as practicable after becoming aware of any such event, notify
the Buyer of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement,
as then in effect, includes an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and use its best efforts promptly to prepare a
supplement or amendment to the Registration Statement to correct such
untrue statement or omission, and deliver a number of copies of such
supplement or amendment to the Buyer or as the Buyer may reasonably
request. The Company may voluntarily suspend the effectiveness of such
Registration Statement for a limited time, which in no event shall be
longer than 90 days, if the Company has been advised by legal counsel that
the offering of Common Stock pursuant to the Registration Statement would
adversely affect, or would be improper in view of (or improper without
disclosure in a prospectus), a proposed financing, a reorganization,
recapitalization, merger, consolidation, or similar transaction involving
the Company or its subsidiaries, in which event the one year period
referred to in clause (i) of Section 5(a) shall be extended for an
additional period of time beyond such one year period equal to the number
of days the effectiveness thereof has been suspended pursuant to this
sentence.
e) Following effectiveness of the Registration Statement, the Company, as
promptly as practicable after becoming aware of any such event, will notify
the Buyer of the issuance
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by the SEC of any stop order or other suspension of effectiveness
of the Registration Statement at the earliest possible time.
f) Following effectiveness of the Registration Statement, the Company will use
diligence either to (i) cause all the Common Stock covered by the
Registration Statement to be listed on each national securities exchange on
which similar securities issued by the Company are then listed, if any, if
the listing of such Common Stock is then permitted under the rules of such
exchange, or (ii) secure the quotation of all the Common Stock covered by
the Registration Statement on The Nasdaq SmallCap Market, if the listing of
such Common Stock is then permitted under the rules of such The Nasdaq
SmallCap Market, or (iii) if, despite the Company's best efforts to satisfy
the preceding clause (i) or (ii), the Company is unsuccessful in satisfying
the preceding clause (i) or (ii) and without limiting the generality of the
foregoing, to use its best efforts to arrange for at least two market
makers to register with the National Association of Securities Dealers,
Inc. as such with respect to such Common Stock.
g) Provide a transfer agent and registrar, which may be a single entity, for
the Common Stock not later than the effective date of the Registration
Statement.
h) It shall be a condition precedent to the obligations of the Company to take
any action pursuant to this Section 5 that the Buyer shall furnish to the
Company such information regarding itself as the Company may reasonably
request to effect the registration of the Common Stock and shall execute
such documents in connection with such registration as the Company may
reasonably request.
i) The Buyer agrees to cooperate with the Company in any manner reasonably
requested by the Company in connection with the preparation and filing of
the Registration Statement hereunder.
j) The Buyer agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(d) or 5(e), the
Buyer will immediately discontinue disposition of Shares pursuant to the
Registration Statement until the Buyer's receipt of notice from the Company
that sales may resume and copies of the supplemented or amended prospectus
and, if so directed by the Company, shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Buyer's possession of the
prospectus covering such Common Stock current at the time of receipt of
such notice.
k) All expenses, other than (i) underwriting discounts and commissions, (ii)
other fees and expenses of investment bankers and (iii) brokerage
commissions, incurred in connection with registrations, filings or
qualifications pursuant to this Section 5, including, without limitation,
all registration, listing and qualification fees, printers and accounting
fees and the fees and disbursements of counsel to the Company, shall be
borne by the Company.
l) To the extent permitted by law, the Company will indemnify and
hold harmless the Buyer, the directors, if any, of the Buyer, the
officers, if any, of the Buyer, each person, if
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any, who controls the Buyer within the meaning of the Securities Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), any
underwriter (as defined in the Securities Act) for the Buyer, the
directors, if any, of such underwriter and the officers, if any, of such
underwriter, and each person, if any, who controls any such underwriter
within the meaning of the Securities Act or the Exchange Act (each, an
"Indemnified Person"), against any losses, claims, damages, expenses or
liabilities (joint or several) (collectively, "Claims") to which any of
them may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations in the
Registration Statement, or any post effective amendment thereof, or any
prospectus included therein: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post effective amendment thereof or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement
thereto with the SEC) or the omission or alleged omission to state therein
any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company of
the Securities Act, any state securities law or any rule or regulation
under the Securities Act, the Exchange Act or any state securities law (the
matters in the foregoing clauses (i) through (iii) are hereinafter
collectively referred to as the "Violations"). Subject to the restrictions
set forth in Section 5(n) with respect to the number of legal counsel, the
Company shall reimburse the Buyer and each such underwriter or controlling
person, promptly as such expenses are incurred and are due and payable, for
any reasonable legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnity contained in this
Section 5(l) (I) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by any Indemnified Person or
underwriter for such Indemnified Person expressly for use in connection
with the preparation of the Registration Statement or any such amendment
thereof or supplement thereto; (II) with respect to any preliminary
prospectus shall not inure to the benefit of any person from whom the
person asserting any Claim purchased the Shares that are the subject
thereof (or to the benefit of any person controlling such person) if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected in the prospectus, as then amended or
supplemented, if such final prospectus was timely made available by the
Company; and (III) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall
survive the transfer of the Units by the Buyer.
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m) The Buyer agrees to indemnify and hold harmless, to the same extent and in
the same manner set forth in Section 5(l), the Company, each of its
directors, each of its officers who signs the Registration Statement, each
person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act, any underwriter and any other
stockholder selling securities pursuant to the Registration Statement or
any of its directors or officers or any person who controls such
stockholder or underwriter within the meaning of the Securities Act or the
Exchange Act (each such person and each Indemnified Person, an "Indemnified
Party"), against any Claim to which any of them may become subject, under
the Securities Act, the Exchange Act or otherwise, insofar as such Claim
arises out of or is based upon any Violation by the Buyer, in each case to
the extent (and only to the extent) that (I) such Violation occurs in
reliance upon and in conformity with written information furnished to the
Company by the Buyer expressly for use in connection with such Registration
Statement or such prospectus or (II) is a result of the breach of federal
or state securities laws pertaining to the transfer by the Buyer of the
Units or the securities underlying the Units; and the Buyer will reimburse
any reasonable legal or other expenses reasonably incurred by any
Indemnified Party in connection with investigating or defending any such
Claim; provided, however, that the indemnity contained in this Section 5(m)
shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Buyer,
which consent shall not be unreasonably withheld; provided, further, that
the Buyer shall be liable under this Section 5(m) for only that amount of a
Claim as does not exceed the net proceeds to the Buyer as a result of the
sale of Units pursuant to such Registration Statement or such prospectus.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Units (or underlying securities) by the Buyer.
Notwithstanding anything to the contrary contained herein the indemnity
contained in this Section 5(m) with respect to any preliminary prospectus
shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then
amended or supplemented.
n) Promptly after receipt by an Indemnified Person or Indemnified Party under
Section 5(l) or 5(m) of notice of the commencement of any action (including
any governmental action), such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is made against any indemnifying party
under this Section 5, deliver to the indemnifying party a written notice of
the commencement thereof, and the indemnifying party shall have the right
to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, assume control
of the defense thereof with counsel mutually satisfactory to the
indemnifying parties; provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. Except as provided in the preceding sentence, the Company
shall
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pay for only one separate legal counsel for the Indemnified Persons. The
failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve
such indemnifying party of any liability to the Indemnified Person or
Indemnified Party under this Section 5, except to the extent that the
indemnifying party is prejudiced in its ability to defend such action. The
indemnity required by this Section 5 shall be made by periodic payments of
the amount thereof during the course of the investigation or defense, as
such expense, loss, damage or liability is incurred and is due and payable.
o) Piggyback Registration. After the registration under Section 5(a) hereof,
and for a period ending three years from the date hereof, if the Company at
any time proposes to register any of its securities under the Securities
Act (other than a registration effected solely to implement an employee
benefit plan, a transaction to which Rule 145 of the SEC is applicable or
any other form or type of registration in which the Buyer's Units cannot be
included pursuant to SEC rule or practice), it will give written notice to
the Buyer of its intention to do so. If such registration is proposed to
be of Common Stock on a form which permits inclusion of the Shares, upon
the written request (stating the intended method of disposition of such
securities) of the Buyer given within thirty (30) days after transmittal by
the Company to the Buyer of such notice, the Company will, subject to the
limits contained in this Agreement, use its best efforts to cause all such
Shares of the Buyer to be registered under the Securities Act and qualified
for sale under any state securities law, all to the extent requisite to
permit such sale or other disposition by the Buyer, except that if the
Company receives a written opinion of a managing underwriter that the
inclusion of any or all of such Shares would adversely affect the marketing
of the securities to be sold pursuant to such registration statement the
Company shall not be required to register any or all of such Shares.
Sections 5(b) through 5(n) hereof shall apply to any registration in which
the Buyer participates, and in such event, the term "Registration
Statement" shall mean the registration statement filed in connection with
such registration.
6. TRANSFER AGENT INSTRUCTIONS.
Promptly following the delivery by the Buyer of the aggregate Subscription
Price for the Units in accordance with Sections 1(b) and (c) hereof, the
Company's transfer agent will be instructed by the Company to issue one or more
certificates representing the Common Stock and the Warrants comprising the Units
purchased, bearing the restrictive legend specified in Section 4(b) of this
Agreement, registered in the name of the Buyer or its nominee and in such
denominations as shall be specified by the Buyer prior to the Closing Date. The
Company warrants that no instruction other than such instructions referred to in
this Section 6 and stop transfer instructions to give effect to Section 4(a) and
(b) hereof will be given by the Company to the transfer agent and that the Units
shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement. Nothing in this Section shall
affect in any way the Buyer's obligations and agreement to comply with all
applicable federal and state securities laws upon resale of the Units or the
securities underlying the Units. If the Buyer provides the Company with an
opinion of counsel reasonably satisfactory in form, scope and substance to the
Company that registration of a resale by the Buyer of any of the Units
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in accordance with Section 4(a) is not required under the Securities Act or
applicable state securities laws, the Company shall permit the transfer agent to
issue one or more share certificates in such name and in such denominations as
specified by the Buyer.
7. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell the Shares to
the Buyer pursuant to this Agreement is conditioned upon:
a) The receipt and acceptance by the Company in its sole and absolute
discretion of this Agreement, as evidenced solely by delivery by the
Company to the Buyer of this Agreement duly executed by the Company;
b) The receipt by the Company of a completed Form W-8 or W-9, attached to this
Agreement, for the Buyer;
c) Delivery by the Buyer to the Company of good funds as payment in full of an
amount equal to the Subscription Price for the Units in accordance with
Sections l(b) and (c) hereof; and
d) The accuracy on the Closing Date of the representations and warranties of
the Buyer contained in this Agreement and the performance by the Buyer on
or before the Closing Date of all covenants and agreements of the Buyer
required to be performed on or before such Closing Date.
8. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to purchase the Shares
from the Company is conditioned upon:
a) Delivery by the Company to the Buyer of this Agreement duly executed by the
Company in acceptance thereof and delivery of the Units to the Buyer; and
b) The accuracy on the Closing Date of the representations and warranties of
the Company contained in this Agreement and the performance by the Company
on or before the Closing Date of all covenants and agreements of the
Company required to be performed on or before such Closing Date.
9. NO OFFER TO SELL.
This Agreement shall not be construed or interpreted as any offer by the
Company to sell the Units. The Company shall have no obligation to accept this
Agreement if offered by the Buyer and may in the Company's sole discretion elect
to reject this Agreement. The Company shall have no obligation or liability to
the Buyer or to any other party if the Company in its sole and absolute
discretion determines not to accept this Agreement.
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10. GOVERNING LAW; JURISDICTION.
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware (without giving effect to principles of conflicts
of law). The Buyer hereby consents to and agrees to submit to the jurisdiction
in the United States of America of the District Court of the State of Texas
located in Xxxxxx County or of the United States District Court for the Southern
District of Texas for any action or proceeding brought by the Company arising
under or by reason of this Agreement or relating to the sale of the Units and to
the venue of such action or proceeding in such courts.
11. WAIVER OF TRIAL BY JURY.
The Buyer hereby waives trial by jury in any action or proceeding
involving, directly or indirectly, any matter (whether sounding in tort,
contract, fraud or otherwise) in any way arising out of or in connection with
this Agreement, or the Units issued hereunder.
12. MISCELLANEOUS.
A facsimile transmission of this signed agreement shall be legal and
binding on all parties hereto. This Agreement and the rights and obligations
hereunder are not transferable or assignable by the Buyer. The headings of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. If any provision of this Agreement shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by mail or delivered personally or by
courier and shall be effective five (5) days after being placed in the mail, if
mailed, or upon receipt, if delivered personally or by courier, in each case
addressed to a party at such party's address shown in the introductory paragraph
or on the signature page of this Agreement or such other address as may be
provided by a party in accordance with this Section 12.
13. ENTIRE UNDERSTANDING.
This Agreement (including any attachments hereto) constitutes the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes any and all prior agreements, whether written or oral. This
Agreement may be amended only in a written document duly executed by both
parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer or
one of its officers thereunto duly authorized as of September 20, 1999.
Name of Buyer
(please print): BSR Investments
Signature: By:/s/ Xxxxxx Xxxxx
(and if corporation or other entity:)
Name: Xxxxxx Xxxxx
Title: President
Address: 00 Xxxxxx Xxxxx Xxxxxx
00000 Xxxxx, Xxxxxx
Address for Delivery
Of Units ______________________________
(if different): ______________________________
______________________________
IRS Taxpayer No: ______________________________
Number of Units: 110,000
Subscription Price (per Unit): US $1.10
Subscription Amount: US$121,000
This Agreement has been accepted by the Company as of September 30, 1999.
CHENIERE ENERGY, INC.
By:/s/ Xxx X. Xxxxxxxxx
Name: Xxx X. Xxxxxxxxx
Title: Chief Financial Officer
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