EXHIBIT 10.24
CHENIERE ENERGY, INC.
TWO XXXXX CENTER
0000 XXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXX 00000-0000
September ___, 1998
Lender Name
Address
Re: (Form of) Third Amendment to Securities Purchase Agreement ("Third
Amendment")
Dear Lender:
Reference is made to the Securities Purchase Agreement dated as of December
15, 1997 (the "Agreement"), between Cheniere Energy, Inc., a Delaware
corporation ("Borrower"), and Lender. Unless otherwise indicated, all
capitalized terms herein are used as defined in the Agreement.
The purpose of this amendment to the Agreement is to extend the maturity
date from September ___, 1998 to December 15, 1998, subject to the right of the
Borrower to extend such maturity date to January 15, 1999 in its sole
discretion. In consideration therefor, the exercise price per share of the
Warrants previously issued to Lender shall be reduced, and certain provisions of
the Agreement shall be amended, all as described below.
For good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Borrower and Lender agree as follows:
1. Restate Prior Amendments. This Third Amendment restates the First Amendment
dated as of December 18, 1997 and the Second Amendment dated April 3, 1998, and
as such supercedes such amendments, which are hereby agreed to be null and void.
2. Amendment of Terms of Payment. Section 2 of the Agreement is hereby amended
by replacing paragraph (c) in its entirety and adding a new paragraph (d), which
together read as follows:
"(c) In addition to prepayments under clause (b) above, Borrower
shall make prepayments of principal of the Term Loan equal to net cash
proceeds received by Borrower from any private placement of Borrower's
equity securities or from any sale by Borrower of seismic data or
other assets as permitted by Section 6(d), less up to $5,000,000 which
may be retained by Borrower; provided, however, that no more than an
aggregate of $2,000,000 of proceeds received by Borrower from the sale
by Borrower of seismic data or other assets as permitted by Section
6(d), in one or more transactions, shall be retained by Borrower;
(d) All payments on the Senior Notes shall be applied pro rata to the
then due and outstanding principal amounts or interest obligations, as
the case may be, under each of the Senior Notes."
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3. Amendment Regarding Extension and Additional Lender Warrants. Section 3
of the Agreement is hereby amended by replacing such Section in its
entirety with the following:
"As a result of having extended the maturity of the Term Loan through
180 days after the original maturity date, Borrower shall issue to
Lender additional warrants ("Additional Lender Warrants") with an
exercise price equal to the Exercise Price which expire on the
Expiration Date in the form of EXHIBIT A to purchase _________ shares of
Common Stock. The Additional Lender Warrants shall be issued within 10
days after September ___, 1998 and shall have an expiration date of
September 15, 2002."
4. Amendment to Certain Negative Covenants. Section 6(d) of the Agreement
is hereby amended by replacing such Section in its entirety with the
following:
"(d) sell, lease or otherwise dispose of all or any substantial portion
of its assets; provided that Borrower will be permitted to sell
seismic data, interests in the seismic project and/or all prospects
defined to date, working interests in individual prospects,
overriding royalty interests, and other partnering arrangements
involving total consideration paid to Borrower not to exceed
$2,000,000;"
Section 6 of the Agreement is hereby amended by deleting the word "or" at
the end of clause (e), replacing the period at the end of clause (f) with
"; or" and adding to such Section a new clause (g), which reads as
follows:
"(g) incur any indebtedness subsequent to September __, 1998 unless such
indebtedness by its terms is expressly made subordinate to the Term
Loan."
5. Amendment to Rights and Remedies. Section 11 of the Agreement is hereby
amended by replacing the word "two-thirds of the aggregate principal
amount then outstanding under" in the first sentence with the words
"$750,000 in aggregate original principal amount of ".
6. Amendment of Maturity Date. The definition of Maturity Date in Section
12 shall be hereby amended by replacing the paragraph captioned MATURITY
DATE in its entirety with the following paragraph:
"MATURITY DATE means the earlier of (a) subject to the extension
provided for below, December 15, 1998 and (b) the date that the Senior
Notes are declared immediately due and payable pursuant to SECTION 11
in the event of a Default; provided that Lender's rights continue
until the Obligation has been paid and performed in full. If no
Default or Potential Default exists, Borrower may extend the Maturity
Date until January 15, 1999 by notifying Lender of such extension
prior to the original Maturity Date."
7. Registration Procedures. By December 15, 1998, Borrower shall prepare
and file or cause to be filed with the SEC a Registration Statement with
respect to the Common Stock underlying the Additional Lender Warrants.
All provisions of Section 9 of the Agreement with respect to
registration shall apply to such additional registration statements.
8. Reduction of Exercise Price on Existing Warrants. As of the date hereof,
the exercise price per share of the aggregate of _________ Lender
Warrants and Additional Lender Warrants previously issued to Lender
shall be reduced from $2.375 to $1.50, and the "Exercise Price" of such
warrants is hereby agreed to be amended to reflect such reduction.
9. Interest Payment Provisions. Commencing with October 15, 1998, interest
on the Senior Notes shall be due and payable monthly on the 15th of each
month, and the third paragraph of
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the Senior Notes is hereby agreed to be amended to reflect that such
payments shall be monthly rather than quarterly.
10. Representations and Warranties. Borrower represents and warrants that
it possesses all requisite power and authority to execute, deliver and
comply with the terms of this instrument, which has been duly
authorized and approved by all necessary corporate action and for which
no consent of any person is required.
11. Fees and Expenses. Borrower agrees to pay the reasonable fees and
expenses of counsel to Lender for services rendered in connection with
the negotiation and execution of this instrument.
12. Loan Paper; Effect. This instrument is a Loan Paper and, therefore, is
subject to the applicable provisions of Section 13 of the Agreement,
all of which are incorporated herein by reference the same as if set
forth herein verbatim. Except as amended in this instrument, the Loan
Papers are and shall be unchanged and shall remain in full force and
effect. In the event of any inconsistency between the terms of the
Agreement as hereby modified (the "Amended Agreement") and any other
Loan Papers, the terms of the Amended Agreement shall control and such
other document shall be deemed to be amended hereby to conform to the
terms of the Amended Agreement.
13. No Waiver of Defaults. This instrument does not constitute a waiver
of, or a consent to any present or future violation of or default
under, any provision of the Loan Papers, or a waiver of Lender's right
to insist upon future compliance with each term, covenant, condition
and provision of the Loan Papers, and the Loan Papers shall continue to
be binding upon, and inure to the benefit of, Borrower, Lender and
their respective successors and assigns.
14. Final Agreement. THE LOAN PAPERS, AS AMENDED HEREBY, REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
If the foregoing terms and conditions are acceptable to Lender, Lender
should indicate its acceptance by signing in the space provided below and
returning an executed copy hereof to Borrower, whereupon this letter shall
become an agreement binding upon and inuring to the benefit of Borrower and
Lender and their respective successors and assigns.
Sincerely,
CHENIERE ENERGY, INC.
By:
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Xxx X. Xxxxxxxxx
Chief Financial Officer
Accepted and agreed to as of the day
and year first set forth in this Third
Amendment.
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Lender
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