THE SHARES 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 CORPORATION THAT THERE IS AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS.
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of the date of
acceptance set forth below, 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 shares of Common
Stock of the Company, par value $.003 per share (the "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 undersigned, intending to be legally bound, hereby
irrevocably agrees to purchase from the Company the number of shares of Common
Stock of the Company (the "Shares") set forth on the signature page of this
Agreement. This Agreement is submitted to you 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 10 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 Shares to be issued to the undersigned shall be
made and the Shares shall be delivered in accordance with the provisions of an
Escrow Agreement (the "Escrow Agreement") to be entered into among United
1
States Trust Company of New York (the "Escrow Agent"), the Company and the
undersigned, the form of which is attached hereto as Exhibit A. The effective
date for the issuance and sale of the Shares (the "Closing Date") shall be the
first business day following the date on which the Escrow Agent distributes the
Escrow Property (as defined in the Escrow Agreement) to the Company and the
Buyer.
(c) SUBSCRIPTION PRICE. The subscription price of the Shares (the
"Subscription Price") to be paid to the Company shall be U.S. $2.00 per Share.
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 Shares 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) or (7) 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 Shares.
(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 Shares and can
bear the substantial economic risk of an investment in the Shares 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 Shares will not cause such overall commitment to
become excessive.
(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 Shares.
2
(g) All subsequent offers and sales of the Shares by the Buyer shall be
made pursuant to registration of the Shares 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 Shares 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 Shares. The Buyer agrees that, if any
of the representations, warranties, agreements, acknowledgements or
understandings deemed to have been made by it in connection with its investment
in the Shares 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 Shares 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 had the opportunity to
obtain and has reviewed (i) the Annual Report on Form 10-KSB for the year ended
August 31, 1995 of Bexy Communications, Inc., the Company's predecessor
("Bexy"), (ii) the Proxy Statement of Bexy dated June 13, 1996 relating to the
special meeting of Bexy's shareholders held on July 2, 1996 and (iii) the
Current Report on Form 8-K of the Company dated July 26, 1996. 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 clauses (i), (ii) and (iii) of this Section 2(j). The
Buyer understands that its investment in the Shares involves a high degree of
risk, and the Buyer is relying solely upon its own knowledge and experience in
business, tax and financial matters in making its decision to purchase the
Shares.
(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 Shares, other than the information concerning the Company contained the
documents described in clauses (i), (ii) and (iii) of Section 2(j) above, (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
Company or any affiliate thereof other than the information concerning the
Company contained in clauses (i), (ii) and (iii) of Section 2(j) above and (iii)
no representation has been made, and no information has
3
been furnished, to the Buyer in connection with the offering or sale of the
Shares 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 Shares.
(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.
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 SHARES. The Shares, when issued, delivered and paid for
in accordance with this Agreement and the Escrow Agreement, will be duly and
validly authorized and issued, fully paid and nonassessable. There are no
preemptive rights of any stockholder of the Company, as such, to acquire the
Shares.
(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 Shares 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
4
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 Shares to the Buyer as contemplated by this
Agreement.
(f) ADVERTISING. The Shares 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 Shares 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 Shares 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 Shares may be sold or
transferred pursuant to a valid exemption from such registration requirements;
(ii) the Shares are and will be "restricted securities" (as defined in Rule 144
promulgated under the Securities Act); (iii) any sale of the Shares 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 such Shares 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 the
Company nor any other person is under any obligation to register the Shares
(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 Shares on the transfer books
of the Company and that the certificate(s) evidencing the Shares 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
5
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 Shares
if and as required under Regulation D of the Securities Act.
5. REGISTRATION PROCEDURES.
(a) Within 90 days after the issuance of the Shares, the Company shall
prepare and file or cause to be filed with the SEC a registration statement (the
"Registration Statement") with respect to all of the Shares (such Shares shall
be referred to as "Registrable 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 two years from the effective date of the Registration
Statement, or (ii) the date on which all of the Registrable Shares have been
sold by the Buyer.
(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 Registrable Shares 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 Registrable 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
6
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.
(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 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 Registrable Shares covered by the
Registration Statement to be listed on a national securities exchange and on
each additional national securities exchange on which similar securities issued
by the Company are then listed, if any, if the listing of such Registrable
Shares is then permitted under the rules of such exchange, or (ii) secure the
quotation of all the Registrable Shares covered by the Registration Statement on
the Nasdaq Market, if the listing of such Registrable Shares is then permitted
under the rules of such 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 arrange for at least two market makers to register with the
National Association of Securities Dealers, Inc. as such with respect to such
Registrable Shares.
(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) Take all other reasonable actions necessary to expedite and facilitate
disposition by the Buyer of the Registrable Shares pursuant to the Registration
Statement.
(i) 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 Registrable Shares and shall execute such
documents in connection with such registration as the Company may reasonably
request.
(j) 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.
(k) 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 Registrable Shares pursuant to
the Registration Statement covering such Registrable Shares until the Buyer's
receipt of the 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 Registrable
Shares current at the time of receipt of such notice.
7
(l) 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.
(m) 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 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(o) 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(m) (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 Registrable 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 prospectus was timely made
available by the Company; and (III) shall not
8
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 Registrable Shares by the Buyer.
(n) The Buyer agrees to indemnify and hold harmless, to the same extent and
in the same manner set forth in Section 5(m), 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,
in each case to the extent (and only to the extent) that 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; 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(n) 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(n) for
only that amount of a Claim as does not exceed the net proceeds to the Buyer as
a result of the sale of Registrable 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 Registrable Shares by the Buyer.
Notwithstanding anything to the contrary contained herein the indemnity
contained in this Section 5(n) 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.
(o) Promptly after receipt by an Indemnified Person or Indemnified Party
under Section 5(m) or 5(n) 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
9
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 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.
(p) PIGGYBACK REGISTRATION. After the registration under Section 5(a)
hereof, and for a period ending two 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 Registrable Shares 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 on a
form which permits inclusion of the Buyer's Registrable 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 Registrable 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 Registrable
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 Registrable Shares. Sections 5(b) through 5(o)
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 Shares 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 in total the Shares, 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 Shares 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 Shares. 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
10
of the Shares 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) Delivery by the Buyer to the Escrow Agent of good funds as payment in
full of an amount equal to the Subscription Price for the Shares in accordance
with Sections l(b) and (c) hereof; and
(c) 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 Shares to the Escrow
Agent; 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 Shares. 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 New York (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 Supreme Court of the State
of New York located in New York County or of the United States District Court
for the Southern District of New York for any action or proceeding brought by
the Company arising under or by reason of this Agreement or relating to the sale
of the Shares and to the venue of such action or proceeding in such courts.
11. 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 Shares 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 ______________________,
1996.
Name of Buyer: _______________________________
Signature (if Buyer
is an individual): _______________________________
Signature (if Buyer
is a corporation or By: ___________________________
other entity): Name:
Title:
Address: _______________________________
_______________________________
_______________________________
Number of Shares: _______________________________
Price per Share: US $ __________________________
Aggregate Subscription
Price: US $ __________________________
IRS Taxpayer No.: _______________________________
This Agreement has been accepted by the Company as of ______________,
1996.
CHENIERE ENERGY, INC.
By: _________________________________
Name: _______________________________
Title: ______________________________
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