EXHIBIT 5
CHENIERE ENERGY, INC.
Two Xxxxx Center
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
December 15, 0000
XXX Xxxxxxxxxxx, Ltd.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxx, Xxxxxx 00000
Re: TERM NOTE WITH WARRANTS
Cheniere Energy, Inc., a Delaware corporation ("BORROWER"), and the
undersigned, a Lender ("LENDER"), in consideration of the mutual covenants
contained herein, agree as follows:
1. COMMITMENT. In accordance with the terms and conditions set forth
herein and upon receipt by Lender of the items listed on Schedule 1, Lender
agrees to make a term loan hereunder to Borrower in the amount of $2,000,000
(the "TERM LOAN"). As additional consideration for the Term Loan Borrower will
issue to Lender warrants in the form of EXHIBIT A (the "LENDER WARRANTS") to
purchase 166,667 shares of Borrower's common stock, par value $.003 per share
(the "COMMON STOCK") at an exercise price of $2.375 per share (the "EXERCISE
PRICE").
2. TERMS OF PAYMENT.
(a) The Term Loan shall be evidenced by, and payable in accordance
with the terms of, a promissory note (the "NOTE") executed by Borrower, payable
to the order of Lender, in substantially the form of EXHIBIT B.
(b) Borrower may prepay the Note, in whole or in part, without premium
or penalty, at any time.
(c) In addition to prepayments under clause (b) above, Borrower shall
make prepayments of principal of the Term Loan equal to the net cash proceeds
received by Borrower from any private placement of Borrower's equity securities
or from any sale by Borrower of seismic data, less up to $1,000,000 which may be
retained by Borrower.
3. EXTENSION OF MATURITY DATE. If no Default or Potential Default
exists, Borrower may extend the Maturity Date for a period of up to 180 days by
notifying Lender of such extension prior to the original Maturity Date. If
Borrower extends the Maturity Date hereunder, Borrower shall issue to Lender
additional warrants (the "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 66,667 shares of Common Stock for each 30 day period after
the original Maturity Date during which any amount of the Term Loan is
outstanding and unpaid until the date (the "FINAL REPAYMENT DATE") that is the
earlier of (x) the date of repayment of the Term Loan in full and (y) 180 days
after the original Maturity Date. The Additional Lender Warrants shall be
issued within 10 days after the Final Repayment Date.
4. CERTAIN REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to Lender that:
(a) Borrower is a corporation duly organized, validly existing and in
good standing under the laws of Delaware, is duly qualified to transact business
as a foreign corporation in each jurisdiction where the nature and extent of its
business require the same (except where the failure to do so would not
constitute a Material Adverse Event), and possesses all requisite authority,
powers, licenses, permits and franchises to conduct its business and execute,
deliver and comply with the terms of the Loan Papers executed or to be executed
by it, all of which have been duly authorized and approved by all requisite
corporate action and for which no approval or consent of any person, entity or
governmental authority is required that has not been obtained;
(b) Borrower is not, and the execution, delivery and performance of
the Loan Papers will not cause it to be, in violation of any law, regulation or
agreement (to the extent such violation is a Material Adverse Event) or its
corporate charter or bylaws;
(c) upon execution and delivery by all parties thereto, each Loan
Paper will constitute a legal and binding obligation of Borrower, enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable Debtor Relief Laws and general principles of equity;
(d) Borrower is not involved in or aware of the threat of any
litigation which, if determined adversely to it, would be a Material Adverse
Event, and there are no outstanding or unpaid judgments against Borrower;
(e) all financial statements (or any replacements thereto) of Borrower
and related information concerning Borrower delivered to Lender by Borrower were
true and correct in all material respects as of the date thereof, were (in the
case of financial statements) prepared in accordance with generally accepted
accounting principles in the United States ("GAAP") and fairly present the
financial condition, results of operations and all material liabilities of
Borrower, and, except as previously disclosed to Lender, there have been no
material adverse changes in the financial condition of Borrower since the date
of such financial statements;
(f) the Lender Warrants and Additional Lender Warrants (collectively,
the "WARRANTS") when issued, will be binding obligations of Borrower,
enforceable against it in accordance with the terms of the Warrants, except as
enforceability may be limited by applicable Debtor Relief Laws and general
principles of equity; the Common Stock issuable upon exercise of each Warrant
will, when issued and paid for in accordance with such Warrant, be duly and
validly authorized and issued, fully paid and nonassessable; and
(g) the Note and the Warrants are not being offered or sold by any
form of general solicitation or general advertising.
5. CERTAIN AFFIRMATIVE COVENANTS. Borrower shall:
(a) use the proceeds of the Term Loan only for working capital and
general corporate purposes (including, without limitation, payments to Zydeco
Exploration, Inc., a subsidiary of Zydeco Energy, Inc., under Borrower's
Exploration Agreement with them);
(b) deliver to Lender each filing made by Borrower during the term of
the Term Loan pursuant to the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT");
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(c) promptly pay when due all taxes due by Borrower, except taxes
being contested in good faith by appropriate legal proceedings, for which
adequate reserves in accordance with GAAP have been established.
6. CERTAIN NEGATIVE COVENANTS. Borrower will not, directly or
indirectly:
(a) use the proceeds of any advance hereunder (i) to acquire any other
entity, (ii) to purchase or carry (or to extend credit to another for the
purpose of purchasing or carrying) "margin stock" (as defined in Regulation U of
the Federal Reserve System), (iii) to pay any wages (unless a payment to or
deposit with the United States of all amounts of tax required to be deducted and
withheld with respect thereto has been made), or (iv) for any unlawful purpose;
(b) merge or consolidate with any entity, or dissolve;
(c) declare, make or pay any distribution or dividend to its owners;
(d) sell, lease or otherwise dispose of all or any substantial portion
of its assets;
(e) engage in any business other than that in which it is presently
engaged; or
(f) pledge any of its assets, including its interest in seismic data.
7. LENDER ACKNOWLEDGMENTS.
(a) TRANSFER RESTRICTIONS. Lender acknowledges that (i) the Term
Note, Warrants and the Common Stock underlying the Warrants (collectively, the
"RESTRICTED SECURITIES") to be issued to it hereunder have not been and are not
being registered under the provisions of the Securities Act of 1933, as amended
(the "SECURITIES ACT"), or any applicable state securities laws (except as
provided in SECTION 9), and may not be offered, sold, pledged or otherwise
transferred unless (A) the Restricted Securities are subsequently registered
under the Securities Act and all applicable state securities laws or (B) the
holder of the Restricted Securities shall have delivered to Borrower an opinion
of counsel, reasonably satisfactory in form, scope and substance to Borrower, to
the effect that the Restricted Securities may be sold or transferred pursuant to
a valid exemption from such registration requirements; (ii) the Restricted
Securities are and will be "restricted securities" (as defined in Rule 144
promulgated under the Securities Act); (iii) any sale of the Restricted
Securities, as the case may be, 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 Restricted
Securities, as the case may be, 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 Exchange Commission (the "SEC") thereunder; and (iv) neither
Borrower nor any other person is under any obligation to register the Restricted
Securities (other than as set forth in SECTION 9) under the Securities Act or
any state securities laws or to comply with the terms and conditions of any
exemption thereunder.
(b) RESTRICTIVE LEGEND. Lender acknowledges and agrees that "stop
transfer" instructions shall be given regarding the Restricted Securities on the
transfer books of Borrower, and that the certificate(s) evidencing the
Restricted 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
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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."
8. LENDER REPRESENTATIONS, WARRANTIES AND COVENANTS.
Lender represents and warrants to, and covenants and agrees with, Borrower
as follows:
(a) Lender is purchasing the Restricted Securities 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, and with no present
intention of dividing or allowing others to participate in this investment.
(b) If Lender is an individual, Lender 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 Lender is an individual (i) having an
individual net worth, or a joint net worth with Lender'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
Lender'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 Lender is a corporation or other business entity, the Lender 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 and Lender was not
organized for the specific purpose of acquiring the Restricted Securities.
(c) Lender has such knowledge, sophistication and experience in
business, tax and financial matters that Lender is capable of evaluating, and is
familiar with, the merits and risks of an investment in the Restricted
Securities, can bear the substantial economic risk of an investment in the
Restricted Securities for an indefinite period of time and can afford a complete
loss of such investment.
(d) Lender represents that its overall commitment to investments which
are not readily marketable is not disproportionate to Lender's net worth, and
Lender's investment in the Restricted Securities will not cause such overall
commitment to become excessive.
(e) All subsequent offers and sales of the Restricted Securities by
Lender 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.
(f) Lender understands that the Restricted Securities 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
Borrower is relying upon the truth and accuracy of, and Lender's compliance
with, the representations, warranties, agreements, acknowledgments and
understandings of Lender set forth herein in order to determine the availability
of such exemptions and the eligibility of Lender to acquire the Restricted
Securities. Lender 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 Restricted Securities is no longer
accurate, it shall promptly notify Borrower and consult with Borrower in order
to determine an appropriate course of action.
(g) Lender has carefully read the terms and provisions hereof and, to
the extent that Lender believed necessary, has discussed the representations,
warranties and agreements which Lender
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makes herein and the applicable limitations upon Lender's resale of the
Restricted Securities with Lender's counsel.
(h) Lender and its advisors have been afforded the opportunity to ask
questions of Borrower, and have received complete and satisfactory answers to
any and all such inquiries and has had access to such financial and other
information concerning Borrower and the Restricted Securities as it has deemed
necessary in connection with its decision as to whether to make its investment.
(i) Lender 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 Restricted Securities.
9. REGISTRATION PROCEDURES.
(a) Within 120 days after the issuance of the Note, Borrower 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 underlying
the Warrants (collectively, the "REGISTRABLE SHARES"). Borrower shall
thereafter use diligence in attempting to cause the Registration Statement to be
declared effective by the SEC and shall thereafter use reasonable efforts 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 Warrants and
Registrable Shares are no longer held by Lender or (iii) the date on which no
warrants are held by Lender and the Registrable Shares held by Lender can be
resold pursuant to Rule 144.
(b) Following effectiveness of the Registration Statement, Borrower
shall furnish to Lender a prospectus as well as such other documents as Lender
may reasonably request.
(c) Borrower shall use reasonable efforts to (i) register or otherwise
qualify the Registrable Shares for sale under the securities laws of such
jurisdictions as Lender 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
Registrable Shares for sale in such jurisdictions; provided, however, that
Borrower 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 9(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 Borrower or (V) make any change in its
certificate of incorporation or bylaws, which in each case the Board of
Directors of Borrower determines to be contrary to the best interests of
Borrower and its stockholders.
(d) Borrower shall, following effectiveness of the Registration
Statement, as promptly as practicable after becoming aware of any such event,
notify Lender of the happening of any event of which Borrower 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 reasonable 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
Lender or as Lender may reasonably request. Borrower may voluntarily suspend
the effectiveness of such Registration Statement for a limited time, which in no
event shall be longer
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than 90 days, if Borrower 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 Borrower or its subsidiaries, and, during such
suspension, Lender and its affiliates shall not sell or otherwise dispose for
value any Registered Shares, in which event the one year period referred to in
clause (i) of SECTION 9(A) shall be extended for an additional period of time
beyond such one year period for an additional period of time equal to the number
of days the effectiveness thereof has been suspended pursuant to this sentence.
(e) Following effectiveness of the Registration Statement, Borrower,
as promptly as practicable after becoming aware of any such event, will notify
Lender of the issuance 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, Borrower
will use reasonable efforts either to (i) cause all the Registrable Shares to be
listed on each national securities exchange on which similar securities issued
by Borrower are then listed, if any, if the listing of the Registrable Shares is
then permitted under the rules of such exchange, or (ii) secure the quotation of
the Registrable Shares on the Nasdaq Stock Market, Inc. ("NASDAQ"), if the
listing of the Registrable Shares is then permitted under the rules of Nasdaq,
or (iii) if, despite Borrower's reasonable efforts to satisfy the preceding
clause (i) or (ii), Borrower is unsuccessful in satisfying the preceding clause
(i) or (ii) and without limiting the generality of the foregoing, to use
reasonable 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 Registrable Shares not later than the effective date of the
Registration Statement.
(h) It shall be a condition precedent to the obligations of Borrower
to take any action pursuant to this SECTION 9 that Lender shall furnish to
Borrower such information regarding itself as Borrower may reasonably request to
effect the registration of the Registrable Shares and shall execute such
documents in connection with such registration as Borrower may reasonably
request.
(i) Lender agrees to cooperate with Borrower in any manner reasonably
requested by Borrower in connection with the preparation and filing of the
Registration Statement hereunder.
(j) Lender agrees that, upon receipt of any notice from Borrower of
the happening of any event of the kind described in SECTION 9(D) or 9(E), Lender
will immediately discontinue disposition of Shares pursuant to the Registration
Statement until Lender receives notice from Borrower that sales may resume and
copies of the supplemented or amended prospectus and, if so directed by
Borrower, shall deliver to Borrower (at the expense of Borrower) or destroy (and
deliver to Borrower a certificate of destruction) all copies in Lender's
possession of the prospectus covering the Registrable Shares 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 9, including, without limitation, all
registration, listing and qualification fees, printers and accounting fees and
the fees and disbursements of counsel to Borrower, shall be borne by Borrower.
(l) To the extent permitted by law, Borrower will indemnify and hold
harmless Lender, the directors, if any, of Lender, the officers, if any, of
Lender, each person, if any, who controls Lender
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within the meaning of the Securities Act or the Exchange Act, any underwriter
(as defined in the Securities Act) for Lender, 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 Borrower 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 Borrower 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 9(N) with respect to the number
of legal counsel, Borrower shall reimburse Lender 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 9(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 Borrower 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 Restricted Securities 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 Borrower; (III) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of Borrower, 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 Restricted Securities by Lender; and (IV) shall not apply to a Claim arising
out of or based upon the failure of an Indemnified Person to deliver a final
prospectus to purchasers of Registrable Securities if Borrower provided such
final prospectus to the Indemnified Person.
(m) Lender agrees to indemnify and hold harmless, to the same extent
and in the same manner set forth in SECTION 9(L), Borrower, each of its
directors, each of its officers who signs the Registration Statement, each
person, if any, who controls Borrower 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
Lender, 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 Borrower by Lender expressly for use in connection with such
Registration Statement or such prospectus or (II) is a result of the breach of
federal
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or state securities laws pertaining to the transfer by Lender of the Restricted
Securities or the securities underlying the Restricted Securities; and Lender
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 9(M) shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of Lender, which consent shall not be
unreasonably withheld; provided, further, that Lender shall be liable under this
SECTION 9(M) for only that amount of a Claim as does not exceed the net proceeds
to Lender as a result of the sale of Shares 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 Restricted Securities (or underlying
securities) by Lender. Notwithstanding anything to the contrary contained herein
the indemnity contained in this SECTION 9(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 9(L) or 9(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 9, 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 conflicts of interest 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, Borrower shall 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 9,
except to the extent that the indemnifying party is prejudiced in its ability to
defend such action. The indemnity required by this SECTION 9 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.
10. DEFAULT. "DEFAULT" means the occurrence of any one or more of the
following (and "POTENTIAL DEFAULT" means the occurrence of any event which, with
notice or lapse of time or both, would become a Default):
(a) the failure or refusal of Borrower (i) to pay any principal,
interest or other part of the Obligation when due, (ii) to punctually and
properly comply with any covenant in SECTION 6, or (iii) to punctually and
properly comply with any other covenant in any Loan Paper and such failure
continues for a period of 10 days after Borrower has notice thereof;
(b) Borrower becomes a party to (other than as a claimant or creditor)
or is made the subject of any proceeding provided by any Debtor Relief Law which
is not stayed or dismissed within 60 days;
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(c) Borrower fails to have discharged, within a period of 60 days
after commencement, any judgment, warrant of attachment, sequestration or
similar proceeding against its assets with a value in excess of $400,000; and
(d) a default exists in respect of any other Senior Note.
11. REMEDIES AND RIGHTS. If a Default exists, then the holders of Senior
Notes evidencing at least two-thirds of the aggregate principal amount then
outstanding under the Senior Notes may exercise any and all legal and equitable
rights and remedies afforded by the Loan Papers, applicable laws, or otherwise,
including, without limitation, declaring the Senior Notes immediately due and
payable. All rights available to the holders of the Senior Notes under the Loan
Papers are cumulative of and in addition to all other rights at law or in
equity. Any sums spent by Lender to exercise any right provided herein become
part of the Obligation and bear interest from the date spent until the date
repaid by Borrower at LIBOR plus 4% per annum. The obligations of Borrower and
the rights of Lender under the Loan Papers continue in full force and effect
until the Obligation is paid and performed in full.
12. DEFINITIONS.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, suspension
of payments or similar laws affecting creditors' rights.
LIBOR means, initially, the three-month London InterBank Offered Rate, as
published in the "Money Rates" column of The Wall Street Journal on the date of
this agreement. With respect to any extension period under SECTION 3, "LIBOR"
means the London InterBank Offered Rate, as published in such column on the
original Maturity Date, for the period closest in length to such extension
period.
LOAN PAPERS means this agreement, the Note, any and all other agreements,
instruments and documents ever delivered pursuant hereto, and all renewals,
extensions or restatements of, or amendments or supplements to, all or any part
of the foregoing.
MATERIAL ADVERSE EVENT means any set of one or more circumstances or events
which, individually or collectively, could result in any (a) material adverse
effect upon the validity or enforceability of any material Loan Paper, (b)
material adverse effect upon the financial condition or business operations of
Borrower, or (c) Default.
MATURITY DATE means the earlier of (a) subject to the extension provisions
of SECTION 3, March 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.
NOTE is defined in SECTION 2.
OBLIGATION means all debt now or hereafter owed to Lender by Borrower
pursuant to any Loan Paper, together with all interest accruing thereon and
costs, expenses and attorneys' fees incurred in the enforcement or collection
thereof.
SENIOR NOTES means the Note issued under this agreement and each of the
other promissory notes of similar tenor issued by Borrower under loan agreements
of even date herewith, in an aggregate principal amount of $4,000,000.
9
TERM LOAN is defined in SECTION 1.
13. MISCELLANEOUS.
(a) All financial terms shall be determined in accordance with GAAP,
and the accounting principles applied in a current period shall be comparable in
all respects to those applied during the preceding comparable period.
(b) THE LAWS XX XXX XXXXX XX XXXXX XXX XXX XXXXXX XXXXXX SHALL GOVERN
THE RIGHTS AND DUTIES OF THE PARTIES HERETO AND THE VALIDITY, CONSTRUCTION,
ENFORCEMENT AND INTERPRETATION OF THE LOAN PAPERS. Where appropriate, words of
any number shall include the plural and singular or of any gender shall include
each other gender. Headings and captions may not be used in interpreting
provisions in the Loan Papers. References to monetary amounts and payments are
to United States currency. Any action that is due on a non-Texas banking
business day may be delayed until the next succeeding Texas banking business
day, but interest accrues on any payment until made. Unless specifically
otherwise provided, any communication under the Loan Papers to any party must be
in writing (which may be by facsimile transmission if a facsimile number is
provided herein for such party and if, without affecting the date such facsimile
transmission was actually made, subsequently confirmed by delivery or mailing in
accordance with this paragraph) to be effective and shall be deemed to have been
given on the day actually delivered or, if mailed, on the third Texas banking
business day after it is enclosed in an envelope, addressed to the party to be
notified, properly stamped, sealed and deposited in the appropriate postal
service. Until changed by notice pursuant hereto, the address for each party is
set forth after its name on the first page of this agreement. The form,
substance and number of counterparts of each writing to be furnished under any
Loan Paper must be satisfactory to Lender. An exception to a covenant does not
permit violation of any other covenant. All provisions in any Loan Paper shall
survive all closings under the Loan Papers and shall not be affected by any
investigation made by any party. If any provision in any Loan Paper is
unenforceable, the remaining provisions thereof shall remain in full force and
effect. The Loan Papers may be amended only by an instrument in writing
executed jointly by Borrower and Lender, and supplemented only by documents
delivered or to be delivered in accordance with the express terms thereof. If
any payment is ever rescinded or must be restored or returned for any reason,
then all rights and obligations are automatically reinstated as though the
payment had not been made. Any conflict or ambiguity between the terms and
provisions herein and terms and provisions in any other Loan Paper shall be
controlled by the terms and provisions herein. Any Loan Paper may be executed
in any number of counterparts, with the same effect as if all signatories had
signed the same document, and all of those counterparts constitute,
collectively, one agreement.
14. ENTIRETY. THE LOAN PAPERS REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
10
15. ACCEPTANCE; PARTIES BOUND. This agreement binds and inures to the
benefit of Lender and Borrower, and their respective successors and assigns;
provided that Borrower may not, without the prior written consent of Lender,
assign any rights, duties, or obligations hereunder, and any purported
assignment without such consent is void.
Very truly yours,
CHENIERE ENERGY, INC.
By: /s/ XXX X. XXXXXXXXX
------------------------------
Name: Xxx X. Xxxxxxxxx
----------------------------
Title: Chief Financial Officer
---------------------------
The foregoing is accepted and agreed to in all respects.
LENDER:
BSR Investments, Ltd.
By: /s/ XXXXXX XXXXX
------------------------------
Name: Xxxxxx Xxxxx
----------------------------
Title: Director
---------------------------
11
SCHEDULE 1
CLOSING DOCUMENTS
1. LOAN AGREEMENT between Borrower and Lender.
2. TERM NOTE executed by Borrower.
3. WARRANT AGREEMENT representing the Lender Warrants.
EXHIBIT A
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED ("ACT"), OR
UNDER ANY APPLICABLE STATE SECURITIES LAWS, AND THEY CANNOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED, PLEDGED OR OTHERWISE HYPOTHECATED EXCEPT IN ACCORDANCE WITH
THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE LAWS OR UPON DELIVERY TO
THE COMPANY OF AN OPINION OF LEGAL COUNSEL SATISFACTORY TO THE COMPANY THAT AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
Form of
WARRANT TO PURCHASE COMMON STOCK
OF
CHENIERE ENERGY, INC.
This Warrant to Purchase Common Stock (this "Warrant") is issued
__________________, 1997, by Cheniere Energy, Inc., a Delaware corporation (the
"Company"), to __________________ (the "Holder").
1. Issuance of Warrant; Term. The Company hereby grants to Holder,
subject to the provisions hereinafter set forth, the right to purchase
_________________ shares of common stock $.003 par value per share, of the
Company (the "Common Stock"). The shares of Common Stock issuable upon exercise
of this Warrant are hereinafter referred to as the "Shares." This Warrant shall
be exercisable at any time before 5:00 p.m. (Houston, Texas time) on December
31, 2001.
2. Exercise Price. This exercise price per share for which all or any of
the Shares may be purchased pursuant to the terms of this Warrant shall be
$_____________ (the "Exercise Price").
3. Exercise
(a) This Warrant may be exercised by Holder in whole or in part, upon
delivery of written notice of intent to the Company at the address of the
Company set forth below its signature below or such other address as the Company
shall designate in written notice to Holder, together with this Warrant and
payment (in the manner described in Section 3(b) below) for the aggregate
Exercise Price of the Shares so purchased. Upon exercise of this Warrant as
aforesaid, the Company shall as promptly as practicable execute and deliver to
Holder a certificate or certificates for the total number of whole Shares for
which this Warrant is being exercised in such names and denominations as are
requested by Holder. If this Warrant shall be exercised with respect to less
than all of the Shares, Holder shall be entitled to receive a new Warrant
covering the number of Shares in respect of which this Warrant shall not have
been exercised, which new Warrant shall in all other respects be identical to
this Warrant.
(b) Payment for the Shares to be purchased upon exercise of this
Warrant may be made by the delivery of a certified or cashier's check payable to
the Company for the aggregate Exercise Price of the Shares to be purchased.
4. Covenants and Conditions. The above provisions are subject to the
following:
(a) Neither this Warrant not the Shares have been registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws
("Blue Sky Laws"). This Warrant and the Shares have been acquired for
investment purposes and not with a view to distribution or resale, and the
Shares may not be made subject to a security interest, pledged, hypothecated,
sold or otherwise transferred without an effective registration statement
therefor under the Act and such applicable Blue Sky Laws or an opinion of
counsel (which opinion and counsel rendering same shall be reasonably acceptable
to the Company) that registration is not required under the Act and under any
applicable Blue Sky Laws. The certificates representing the Shares shall bear
substantially the following legend:
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
QUALIFIED UNDER ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN
ACQUIRED FOR THE PRIVATE INVESTMENT OF THE HOLDER HEREOF AND MAY NOT BE
OFFERED, SOLD OR TRANSFERRED UNTIL (I) A REGISTRATION STATEMENT UNDER THE
ACT OR SUCH APPLICABLE STATE SECURITIES LAWS SHALL HAVE BECOME EFFECTIVE
WITH REGARD THERETO, OR (II) IN THE OPINION OF COUNSEL (WHICH OPINION AND
COUNSEL SHALL BE REASONABLY SATISFACTORY TO THE COMPANY) REGISTRATION UNDER
THE LAW OR SUCH APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN
CONNECTION WITH SUCH PROPOSED OFFER, SALE OR TRANSFER.
Other legends as required by applicable federal and state laws may be
placed on such certificates. Holder and the Company agree to execute such
documents and instruments as counsel for the Company reasonably deems necessary
to effect compliance of the issuance of this Warrant and any Shares issued upon
exercise hereof with applicable federal and state securities laws.
(b) The Company covenants and agrees that all Shares which may be
issued upon exercise of this Warrant will, upon issuance and payment therefor,
be legally and validly issued and outstanding, fully paid and nonassessable.
5. Warrantholder not Stockholder. This Warrant does not confer upon
Holder any voting rights or other rights as a stockholder of the Company.
6. Certain Adjustments.
6.1 Capital Reorganizations, Mergers, Consolidations or Sales of
Assets. If at any time there shall be a capital reorganization (other than a
combination or subdivision of Common Stock otherwise provided for herein), a
share exchange (subject to and duly approved by the stockholders of the Company)
or a merger or consolidation of the Company with or into another corporation, or
the sale of the Company's properties and assets as, or substantially as, an
entirety to any other person, then, as a part of such reorganization, share
exchange, merger, consolidation or sale, lawful provision shall be made so that
Holder shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified in this Warrant and upon payment of the Exercise
Price, the number of shares of stock or other securities or property of the
Company or the successor corporation resulting from such reorganization, share,
exchange, merger, consolidation or sale, to which Holder would have been
entitled under the provisions of the agreement in such reorganization, share
exchange, merger, consolidation or sale if this Warrant had been exercised
immediately before that reorganization, share exchange, merger, consolidation or
sale. In any such case, appropriate adjustment (as determined in good faith by
the Company's Board of Directors) shall be made in the application of the
provisions of this Warrant with respect to the rights and interests of Holder
after the reorganization, share exchange, merger, consolidation or sale to the
end that the provisions of this Warrant (including adjustment of the Exercise
Price then in effect and the number of the Shares) shall be applicable after
that event, as near as reasonably may be, in relation to any shares or other
property deliverable after that event upon exercise of this Warrant.
6.2 Splits and Subdivisions. If the Company at any time or from time
to time fixes a record date for the effectuation of a split or subdivision of
the outstanding shares of Common Stock or the determination of the holders of
Common Stock entitled to receive a dividend or other distribution payable
2
in additional shares of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as the "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or Common Stock Equivalents, then, as of such
record date (or the date of such distribution, split or subdivision if no record
date is fixed), the Exercise Price shall (i) in the case of a split or
subdivision, be appropriately decreased and the number of the Shares shall be
appropriately increased in proportion to such increase of outstanding shares and
(ii) in the case of a dividend or other distribution, the holder of the warrant
shall have the right to acquire without additional consideration, upon exercise
of the warrant, such property or cash as would have been distributed in respect
of the shares of Common Stock for which the warrant was exercisable had such
shares of Common Stock been outstanding on the date of such distribution.
6.3 Combination of Shares. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination or
reverse stock split of the outstanding shares of Common Stock, the Exercise
Price shall be appropriately increased and the number of the Shares shall be
appropriately decreased in proportion to such decrease in outstanding shares.
6.4 Adjustments for Other Distributions. In the event the Company
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by the Company or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section 6.2, upon exercise of
this Warrant, Holder shall be entitled to a proportionate share of any such
distribution as though Holder was the holder of the number of shares of Common
Stock of the Company into which this Warrant may be exercised as of the record
date fixed for the determination of the holders of Common Stock of the Company
entitled to receive such distribution.
6.5 Certificate as to Adjustments. In the case of each adjustment or
readjustment of the Exercise Price pursuant to this Section 6, the Company will
promptly compute such adjustment or readjustment in accordance with the terms
hereof and cause a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based
to be delivered to Holder. The Company will, upon the written request at any
time of Holder, furnish or cause to be furnished to Holder a certificate setting
forth:
(a) Such adjustment and readjustments;
(b) The Exercise Price at the time in effect; and
(c) The number of Shares and the amount, if any, of other
property at the time receivable upon the exercise of the Warrant.
6.6 Notices of Record Date, etc. In the event of:
(a) Any taking by the Company of a record of the holders of any
class of securities of the Company for the purpose of determining the holders
thereof who are entitled to receive any dividends or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right; or
(b) Any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets of the Company to any other
person or any consolidation, share exchange or merger involving the Company; or
3
(c) Any voluntary or involuntary dissolution, liquidation or
winding up of the Company, the Company will mail to Holder at least 20 days
prior to the earliest date specified herein, a notice specifying:
(i) The date on which any such record is to be taken for
the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right; and
(ii) The date on which any such reorganization,
reclassification, transfer, consolidation, share exchange, merger,
dissolution, liquidation or winding up is expected to become effective and
the record date for determining stockholders entitled to vote thereon.
7. Call of Warrant. This Warrant may be called and canceled by the
Company at its election at any time following the date upon which the closing
price of the Common Stock on its principal trading market has been 200% or more
of the Exercise Price for a period of 20 consecutive trading days (all as
determined in good faith by the Company's Board of Directors) at a price equal
to $.01 per share of Common Stock for which this Warrant shall be exercisable on
the Call Date (as defined below). The Company shall give the holder of this
Warrant at least 30 days prior written notice of any such call of this Warrant,
which notice shall certify the foregoing condition for such call and set forth
the date upon which the call shall occur (the "Call Date"). The holder of this
Warrant shall, however, be entitled to exercise this Warrant, in whole or in
part, prior to the Call Date and, in that event, the Company's right to call
this Warrant shall be limited to the extent to which the Warrant remains
unexercised on the Call Date.
8. Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of effecting the exercise of this Warrant, such number of
its shares of Common Stock as shall from time to time be sufficient to effect
the exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of the entire Warrant, in addition to such other remedies as shall be available
to the holder of this Warrant, the Company will use commercially reasonable
efforts to take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
9. Split-Up, Combination, Exchange and Transfer of Warrants. Subject to
and limited by the provisions of Section 4(a) hereof, this Warrant may be split
up, combined or exchanged for another Warrant or Warrants containing the same
terms and entitling the Holder to purchase a like aggregate number of Shares.
If the Holder desires to split up, combine or exchange this Warrant, the Holder
shall make such request in writing delivered to the Company and shall surrender
to the Company this Warrant and any other Warrants to be so split up, combined
or exchanged. Upon any such surrender for a split-up, combination or exchange,
the Company shall execute and deliver to the person entitled thereto a Warrant
or Warrants, as the case may be, as so requested. The Company shall not be
required to effect any split-up, combination or exchange which will result in
the issuance of a Warrant entitled the Warrantholder to purchase upon exercise a
fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Holder to pay a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any split-up, combination or
exchange of Warrants.
10. Successors and Assigns. All the covenants and provisions of this
Warrant shall bind and inure to the benefit of the Company's successors and
assigns, and the heirs, legatees, devisees, executors, administrators, personal
and legal representatives, and successors and permitted assigns of Holder.
4
11. Governing Law. This Warrant shall be governed by and construed in
accordance with the laws, and not the laws of conflicts, of the State of
Delaware. The Holder hereby consents and agrees to submit to the jurisdiction
in the United States 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 this
Warrant and to the venue of such action or proceeding in such courts.
CHENIERE ENERGY, INC.
By:___________________________
Name:_________________________
Title:________________________
5
EXHIBIT B
FORM OF SENIOR TERM NOTE
$________________ December __, 1997
FOR VALUE RECEIVED, the undersigned ("MAKER") hereby promises to pay to the
order of ______________________ ("PAYEE"), at its offices at
____________________________, the principal sum of ___________________ DOLLARS,
together with interest, as hereinafter described.
This note is executed and delivered pursuant to the Agreement (as renewed,
extended, and amended from time to time, the "AGREEMENT") dated as of December
15, 1997, between Maker and Payee. Unless indicated otherwise, capitalized
terms in this note are used as defined in the Agreement. This note is one of the
Loan Papers referred to in the Agreement and is therefore subject to the
applicable provisions of the Agreement (including, without limitation, SECTION
13 thereof).
The principal of this note is due and payable on the Maturity Date.
Interest on this note shall be due and payable quarterly as it accrues and at
maturity.
The principal from day to day unpaid shall, except as stated below, bear
interest at a rate per annum which shall from day to day be equal to the lesser
of (a) the Maximum Rate (hereinafter defined) and (b) the sum of 4% plus LIBOR.
At the option of the holder of this note and to the extent permitted by
applicable law, all past-due principal of this note and accrued and past-due
interest on this note shall bear interest from the date due and payable (stated
or by acceleration) until paid at a rate per annum which shall from day to day
be equal to the lesser of (a) the Maximum Rate and (b) the sum of 4% plus LIBOR,
regardless of whether such payment is made before or after entry of a judgment.
Each change in the Maximum Rate will become effective, without notice to Maker
or any other person or entity, upon the effective date of such change.
If at any time the rate determined under either clause (b) in the foregoing
paragraph (the "CONTRACT RATE") exceeds the Maximum Rate, the rate of interest
on this note shall be limited to the Maximum Rate, but any subsequent reductions
in the Contract Rate shall not reduce the rate of interest below the Maximum
Rate until the total amount of interest accrued equals the amount of interest
which would have accrued if the Contract Rate applicable from time to time had
at all times been in effect. If at maturity (stated or by acceleration), or at
final payment of this note, the total amount of interest paid or accrued is less
than the amount of interest which would have accrued if the Contract Rate
applicable from time to time had at all times been in effect, then, at such time
and to the extent permitted by applicable law, Maker shall pay to the holder
hereof an amount equal to the sum of (a) the lesser of the amount of interest
which would have accrued if the Contract Rate applicable from time to time had
at all times been in effect and the amount of interest which would have accrued
if the Maximum Rate had at all times been in effect minus (b) the amount of
interest actually paid or accrued on this note.
Interest shall be calculated on the basis of actual days (including the
first day but excluding the last day) elapsed but computed as if each calendar
year consisted of 360 days (unless the result would exceed the Maximum Amount,
in which event such interest shall be calculated on the basis of a year of 365
or 366 days, as the case may be).
As used herein, the terms "MAXIMUM AMOUNT" and "MAXIMUM RATE" mean,
respectively, the maximum amount and the maximum rate of interest which, under
applicable law, the holder hereof is
Page 1 of 2
permitted to contract for, charge, take, reserve or receive on this note.
Regardless of any provision in the Loan Papers, the holder hereof shall never be
entitled to contract for, charge, take, reserve, receive, or apply, as interest
on this note any amount in excess of the Maximum Amount, and, if the holder
hereof ever contracts for, charges, takes, reserves, receives or applies as
interest any such excess, it shall be deemed a partial prepayment of principal
and treated hereunder as such and any remaining excess shall be refunded to
Maker. In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Maximum Amount, Maker and the holder hereof
shall, to the maximum extent permitted under applicable law, (a) treat all
advances as but a single extension of credit (and the holder hereof and Maker
agree that such is the case and that any provision herein for multiple advances
is for convenience only), (b) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (c) exclude voluntary
prepayments and the effects thereof, and (d) "spread" the total amount of
interest throughout the entire contemplated term of this note; provided that if
this note is paid in full prior to the end of the full contemplated term hereof,
and if the interest received for the actual period of existence hereof exceeds
the Maximum Amount, the holder hereof shall refund such excess, and, in such
event, the holder hereof shall not to the extent permitted by applicable law, be
subject to any penalties provided by any laws for contracting for, charging,
taking, reserving or receiving interest in excess of the Maximum Amount. To the
extent the laws of the State of Texas are applicable for purposes of determining
the "Maximum Rate" or the "Maximum Amount," such term shall mean the "indicated
rate ceiling" from time to time in effect under Article 1.04, Title 79, Revised
Civil Statutes of Texas, as amended.
Maker and each surety, endorser, guarantor and other party ever liable for
payment of any part hereof jointly and severally waive presentment and demand
for payment, protest, notice of intention to accelerate, notice of acceleration
and notice of protest and nonpayment, and agree that their liability on this
note shall not be affected by, and hereby consent to, any renewal or extension
in the time of payment hereof, any indulgences, or any release or change in any
security for the payment of this note.
CHENIERE ENERGY, INC.
By:_____________________
Name:___________________
Title:__________________
Page 2 of 2
