EXHIBIT 8
CHENIERE ENERGY, INC.
TWO XXXXX CENTER
0000 XXXXX XXXXXX, XXXXX 0000
XXXXXXX, XXXXX 00000-0000
September 14, 0000
XXX Xxxxxxxxxxx, Ltd.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxx 00000
Re: Third Amendment to Term Note with Warrant ("Third Amendment")
Dear Lender:
Reference is made to the Term Note with Warrants 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 14, 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."
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, Arabella S.A., and Alba Limited 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 400,000 shares, 380,000 shares and 20,000
shares, respectively, of Common Stock. The Additional Lender Warrants
shall be issued within 10 days after September 14, 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 11, 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 566,667,
855,000 and 45,000 Lender Warrants and Additional Lender Warrants
previously issued to Lender, Arabella S.A. and Alba Limited,
respectively, 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 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.
(signature page follows)
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: /s/ Xxx X. Xxxxxxxxx
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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.
/s/ Xxxxxx Xxxxx
----------------
BSR Investments, Ltd.
