EXHIBIT 10.5
WARRANT AGREEMENT
WARRANT AGREEMENT (this "Agreement") is made as of July 3, 1996 by and
between CHENIERE ENERGY, INC. (f/k/a BEXY Communications, Inc.), a Delaware
corporation ("the Company"), and _________________ (the "Holder").
PRELIMINARY RECITALS
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A. Pursuant to a certain Agreement and Plan of Reorganization dated as of
April 16, 1996 (the "Reorganization Agreement") among Cheniere Energy Operating
Co., Inc. ("Cheniere"), the stockholders of Cheniere (the "Cheniere
Stockholders"), the Company and Xxxxx Xxxxx, the Cheniere Stockholders have
agreed with the Company to exchange all of the issued and outstanding shares of
common stock, no par value, of Cheniere (the "Cheniere Stock") in consideration
for the issuance to the Cheniere Stockholders of shares of the common stock,
$.01 par value per share, of the Company (the "Common Stock") equal to
approximately 93% of the issued and outstanding shares of Common Stock.
B. In addition, it is contemplated by the Reorganization Agreement that the
holders (collectively, the "Cheniere Warrantholders") of all of the issued and
outstanding warrants (collectively, the "Cheniere Warrants") to purchase shares
of Cheniere Stock will exchange their Cheniere Warrants for warrants exercisable
for shares of the common stock $.01 par value, of the Company (collectively, the
"BEXY Warrants").
X. Xxxxxx is a holder of a Cheniere Warrant and desires to exchange the
Cheniere Warrant and the Company is willing to accept the Cheniere Warrant as
consideration for the issuance to Holder of a BEXY Warrant, on the terms and
subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and Holder agree as follows:
1. EXCHANGE FOR CHENIERE WARRANTS. Holder agrees to exchange the Cheniere
Warrant owned by him and to accept in consideration therefor the Warrant, which
is one of the BEXY Warrants contemplated by the Reorganization Agreement.
Pursuant to this Agreement and the Warrant, Holder shall be entitled to purchase
one (1) share of Common Stock for each ten thousand (10,000) shares of Cheniere
Stock for which the Cheniere Warrant may be exercised. Other than the Purchase
Price, the terms of the Warrant are substantially the same as the Cheniere
Warrant.
2. GRANT OF WARRANT. The Company hereby grants to Holder a warrant to
purchase up to ____________ shares of Common Stock (the "Warrant Shares") at the
purchase price of $3 per share (the "Warrant"), such Warrant to be exercisable
as hereinafter
provided, evidenced by a warrant certificate in the form attached as Exhibit A
hereto (the "Warrant Certificate").
3. EXERCISE PERIOD. Subject to the other terms of this Agreement regarding
the exercisability of the Warrant, the Warrant shall be exercisable during the
period (the "Exercise Period") commencing on the date hereof and expiring on
June 14, 1999.
4. EXERCISE OF WARRANT
(a) This Warrant may be exercised, from time to time, in whole or in part, at
any time prior to the expiration thereof. Any exercise shall be accompanied by
written notice to the Company specifying the number of shares as to which this
Warrant is being exercised, in the form attached to the Warrant Certificate.
Notations of any partial exercise or instalment exercise, shall be made by the
Company and attached as a schedule hereto.
(b) The Company shall issue the Warrant Certificate or certificates
evidencing the Warrant Shares within fifteen (15) days after receipt of such
notice and payment as hereinafter provided.
5. PAYMENT OF PURCHASE PRICE UPON EXERCISE. At the time of any exercise of
the Warrant the purchase price for the Warrant Shares shall be paid in full to
the Company by check or other immediately available funds.
6. PURCHASE FOR INVESTMENT; RESALE RESTRICTIONS. The Holder hereby
represents, and each assignee of Holder as a condition to transfer shall
represent, that he is acquiring or will acquire the Warrant and the Warrant
Shares for his own account, for investment only with no present intention of
distributing or reselling such securities or any part thereof. Unless at the
time of the acquisition of the Warrant or the exercise of the Warrant, as the
case may be, there shall be, in the opinion of counsel for the Company, a valid
and effective registration statement under the Securities Xxx 0000 ("1933 Act")
and appropriate qualification and registration under applicable state securities
laws relating to the Warrant or the Warrant Shares, as the case may be, the
Holder shall, prior to the assignment of the Warrant or upon exercise of the
Warrant or any portion thereof, as the case may be, give a representation that
he is acquiring such Warrant or Warrant Shares, as the case may be, for his own
account, only for investment and not with the view to the resale or distribution
of any of such securities. In the absence of such registration statement, the
Holder shall execute a written affirmation, in form reasonably satisfactory to
the Company, of such investment intent. The Holder further agrees that he will
not sell or transfer the Warrant or any Warrant Shares, as the case may be,
until he requests and receives an opinion from the Company's counsel, or other
counsel reasonably satisfactory to the Company, to the effect that such proposed
sale or transfer will not result in a violation of the 1933 Act or a
registration statement covering the sale or transfer of the Warrant or Warrant
Shares, as the case may be, has been declared effective by the Securities and
Exchange Commission ("SEC"), or he obtains a no action letter from the SEC with
respect to the
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proposed transfer. There shall be stamped on the certificate(s) representing
the Warrant or Warrant Shares, as the case may be, an appropriate legend giving
notice of the acquisition of such Warrant or Warrant Shares, as the case may be,
for investment and the restriction on their transfer by reason thereof.
7. ADJUSTMENTS. In the event of any change in the outstanding Common Stock
of the Company by reason of any stock recapitalization, merger, consolidation,
combination or exchange of shares, the kind of shares subject to the Warrant and
their purchase price per share (but not the number of shares) shall be
appropriately adjusted consistent with such change in such manner as the Board
of Directors of the Company may deem equitable. In the event of a stock
dividend or stock split, the kind of shares, the purchase price per share and
number of shares shall be appropriately adjusted, consistent with such change in
such manner as the Board of Directors may deem equitable. Any adjustments that
are made by the Board of Directors shall be final and binding on the Holder.
8. NO RIGHTS OF STOCKHOLDER. The Holder shall have no rights as a
stockholder with respect to any Warrant Shares prior to the date of purchase
thereof and issuance to him of a certificate or certificates for such shares.
9. COMPLIANCE WITH LAW AND REGULATIONS. This Agreement and the obligation
of the Company to sell and deliver the Warrant and the Warrant Shares shall be
subject to all applicable federal and state laws, rules and regulations and to
such approvals by any government or regulatory agency as may be required. If,
at any time, the Board of Directors of the Company shall determine that (a) the
listing, registration or qualification of the Warrant Shares upon any securities
exchange or under any state or federal law or (b) the consent or approval of any
government regulatory body, is necessary or desirable as a condition to, or in
connection with, the offer, sale and issuance of the Warrant Shares, the Warrant
shall not be exercised by the Holder in whole or in part unless such listing,
registration, qualification, consent, approval or agreement shall have been
effected or obtained, free of any conditions not acceptable to the Board of
Directors of the Company.
10. TAX WITHHOLDING REQUIREMENTS. The Company shall have the right to
require the Holder to remit to the Company an amount sufficient to satisfy any
federal, state or local withholding or other tax requirements applicable to the
sale of the Warrant or the issuance and sale of the Warrant Shares prior to the
delivery of any Warrant Certificate or Certificates for the Warrant Shares.
11. FRACTIONAL SHARES. To the extent required, fractional shares of stock
shall be issued upon the exercise of this Warrant up to but not more than the
nearest thousandth of a share (.001). The Company shall not be under any
obligation to compensate the Holder in any way for fractional shares in less
than such amounts.
12. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law,
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such provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement.
13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
party, but all of such counterparts taken together will constitute one and the
same Agreement.
14. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience only and do not constitute a part of this Agreement and
shall not be used in the interpretation hereof.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon any and
all successors and assigns of the parties.
16. AMENDMENTS. This Agreement may not be modified, amended, altered, or
supplemented except upon the execution and delivery of a written agreement
executed by Holder and the Company.
17. GOVERNING LAW. This Agreement shall be construed according to the laws
of the State of Delaware without giving effect to the conflict of law provisions
thereof, and all provisions hereof shall be administered according to and its
validity shall be determined under, the laws of such state, except where
preempted by federal laws.
18. NOTICES. Any notices or other communications required or permitted
hereunder shall be sufficiently given if delivered personally or three (3) days
after being sent by registered or certified mail, return receipt requested,
postage prepaid, or transmitted by telecopy with oral confirmation, addressed as
follows or to such other address of which the parties may have given notice in
accordance with this Section 18:
If to Holder at the address set forth on the signature page of this
Agreement.
If to the Company:
Cheniere Energy, Inc.
(f/k/a BEXY Communications, Inc.)
Two Xxxxx Center
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Breed Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx X. Brighton, Jr., Esq.
Fax: (000) 000-0000
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IN WITNESS WHEREOF the parties have executed this Agreement as the date first
written above.
CHENIERE ENERGY, INC.
(f/k/a BEXY Communications, Inc.)
By:______________________________________
Name: Xxxxxxx X. Xxxxxxx
Title: President
HOLDER
By:______________________________________
Name:
Address:
tel:
fax:
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EXHIBIT A
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 OR THE SECURITIES LAW OF ANY STATE AND MAY NOT BE
SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
CHENIERE ENERGY, INC.
(f/k/a BEXY Communications, Inc.)
WARRANT TO PURCHASE SHARES OF COMMON STOCK
The transferability of this Warrant is restricted as set forth in the
related Warrant Agreement, a copy of which may be obtained from the Company
at its principal office.
No. WA-___ Up to ________ Shares
THIS CERTIFIES THAT for value received ________________ (the "Holder")
or registered assigns is the owner of a Warrant to purchase during the period
expiring no later than 5:00 p.m. New York time on June 14, 1999, the number of
fully paid and non-assessable shares of Common Stock, no par value per share
(the "Common Stock"), of Cheniere Energy, Inc. (f/k/a BEXY Communications,
Inc.), a Delaware corporation (hereinafter called the "Company"), specified
above upon payment of the Warrant Price (as defined below) set forth in the
warrant agreement between the Company and the Holder (the "Warrant Agreement").
As provided in the Warrant Agreement, certain adjustments may be made
in the sole discretion of the Board of Directors of the Company in the number of
shares of Common Stock issuable upon exercise of this Warrant in the event of
the change in the number of shares of Common Stock of the Company outstanding by
reason a stock split, combination of stock or stock dividend in such manner as
the Board of Directors may deem equitable.
Reference is made to that certain Agreement and Plan of Reorganization
dated as of April 16, 1996 (the "Reorganization Agreement") among Cheniere
Energy Operating Co., Inc. ("Cheniere), the stockholders of Cheniere listed on
Schedule A to the Reorganization Agreement, the Company and Xxxxx Xxxxx and the
Warrant Agreement. Capitalized terms used herein without definition shall have
the same meanings as ascribed to them in the Reorganization Agreement. Pursuant
to Section 1.2.2 of the Reorganization
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Agreement and Section 1 of the Warrant Agreement, each Cheniere Warrant shall be
exchanged at the Closing for a BEXY Warrant pursuant to a formula whereby the
right to purchase one (1) Cheniere Share at a purchase price of $30,000 per
share shall be exchanged for the right to purchase ten thousand (10,000) shares
of BEXY Stock at a purchase price of $3 per share.
The warrant price per share (hereinafter called the "Warrant Price")
shall be $3. As provided in the Warrant Agreement, the Warrant Price is payable
upon the exercise of this Warrant, in cash by check or other immediately
available funds.
Upon the exercise of this Warrant, the form of election to purchase
attached hereto must be properly completed and executed and surrendered to the
Company or its transfer agent. In the event that this Warrant is exercised in
respect of fewer than all of such shares, a new Warrant for the remaining number
of such shares, substantially in the form hereof, will be issued on such
surrender.
This Warrant is issued under, and the rights represented hereby are
subject to, the terms and provisions contained in the Warrant Agreement. By
acceptance of an assignment of this Warrant any assignee agrees and assents to
all the terms and provisions of the Warrant Agreement. Reference is hereby made
to terms and conditions of the Warrant Agreement for a more complete statement
of the rights and limitations of rights of the registered holder hereof and the
rights and obligations of the Company thereunder, which terms and conditions are
incorporated herein by reference. Copies of the Warrant Agreement are on file
at the principal office of the Company.
The Company shall be required upon the exercise of this Warrant to
issue fractions of shares only up to the nearest thousandth of a share (.001).
This Warrant is transferable at the office of the Company (or of its
transfer agent) by the registered holder hereof in person or by attorney-in-fact
duly authorized in writing, but only in the manner and subject to the
limitations provided in the Warrant Agreement, and upon surrender of this
Warrant, proper completion and delivery of an assignment in the form attached
hereto and the payment of any transfer taxes. Upon any such transfer, a new
Warrant, or new Warrants of different denominations, of like tenor and
representing in the aggregate the right to purchase a like number of shares of
Common Stock will be issued to the transferee in exchange for this Warrant.
This Warrant when surrendered at the office of the Company (or of its
transfer agent) by the registered holder hereof, in person or by attorney duly
authorized in writing, may be exchanged, in the manner and subject to the
limitations provided in the Warrant Agreement for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of shares of Common Stock.
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If this Warrant shall be surrendered for exercise within any period
during which the transfer books for shares of the Common Stock of the Company or
other securities purchasable upon the exercise of this Warrant are closed for
any purpose, the Company shall not be required to make delivery of certificates
for the securities purchasable upon such exercise until the date of the
reopening of said transfer books.
The Holder of this Warrant shall not be entitled to any of the rights
of a stockholder of the Company prior to the exercise hereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its representative, thereunto duly authorized, as of this 3rd day of July,
1996.
CHENIERE ENERGY, INC.
By: ____________________________
Xxxxxxx X. Xxxxxxx
President
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Annex 1
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PURCHASE FORM
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Dated ________________
The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing __________ shares of Common Stock and hereby
makes payment in full by check or other immediately available funds totaling
$_______.
INSTRUCTIONS FOR REGISTRATION OF STOCK
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Name____________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
Signature______________________________________________________________________
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Annex 2
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ASSIGNMENT FORM
---------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
Name___________________________________________________________________________
(Please typewrite or print in block letters)
Address________________________________________________________________________
the right to purchase Common Stock represented by this Warrant to the extent of
________ shares as to which such right is exercisable and does hereby
irrevocably constitute and appoint _______________, Attorney-in-Fact, to
transfer the same on the books of the Company with full power of substitution in
the premises.
Date________________, 19__
Signature___________________________________________________
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