Exhibit 4.1
$300,000,000
Cheniere Energy,
Inc.
2.25% Convertible Senior Notes
due 2012
PURCHASE
AGREEMENT
July 22, 2005
C REDIT S UISSE F IRST B OSTON LLC,
As Sole
Purchaser,
Eleven
Madison Avenue,
New
York, N.Y. 10010-3629
Dear Sirs:
1. Introductory . Cheniere
Energy, Inc., a Delaware corporation (the “ Company
”), proposes, subject to the terms and conditions stated
herein, to issue and sell to Credit Suisse First Boston LLC (the
“ Purchaser ”) U.S. $300,000,000 principal
amount of its 2.25% Convertible Senior Notes due 2012 (the “
Firm Securities ”) which are convertible into cash or
a combination of cash and shares of common stock, $.003 par value,
of the Company (the “ Underlying Shares ”) and,
at the election of the Purchaser, an aggregate of up to an
additional $25,000,000 principal amount of its 2.25% Convertible
Senior Notes due 2012 (“ Optional Securities ”)
(the Firm Securities and the Optional Securities which the
Purchaser may elect to purchase pursuant to Section 3 hereof are
herein collectively called the “ Offered Securities
”), each to be issued under an indenture dated as of July 27,
2005 (the “ Indenture ”), between the Company
and The Bank of New York as Trustee, on a private placement basis
pursuant to an exemption under Section 4(2) of the United States
Securities Act of 1933 (the “ Securities Act ”),
and hereby agrees with the Purchaser as follows:
The Offered Securities will be
convertible into shares of common stock, par value $0.003 per
share, of the Company (the “ Common Stock ”) in
accordance with the terms of the Offered Securities and the
Indenture, at the initial conversion rate specified in Schedule
A hereto.
The holders of the Offered
Securities will be entitled to the benefits of a Registration
Rights Agreement to be dated on July 27, 2005 among the Company and
the Purchaser (the “ Registration Rights Agreement
”), pursuant to which the Company agrees to file a
registration statement with the Securities and Exchange Commission
(the “ Commission ”) registering the resale of
the Offered Securities and the Underlying Shares, as hereinafter
defined, under the Securities Act.
2. Representations and Warranties
of the Company . The Company represents and warrants to, and
agrees with, the Purchaser that:
(a) A preliminary offering circular
and an offering circular relating to the Offered Securities has
been prepared by the Company. Such preliminary offering circular
(the “ Preliminary Offering Circular ”) and
offering circular (the “ Offering Circular ”)
together with the documents incorporated by reference therein, as
amended or supplemented as of the date of this Agreement are
hereinafter collectively referred to as the “ Offering
Document ”. The Offering Document, as of the date hereof,
and as of the Closing Date, does not and will not include any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading. The preceding sentence does
not apply to statements in or omissions
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from the Offering Document based upon written
information furnished to the Company by any Purchaser through
Credit Suisse First Boston LLC (“ CSFB ”)
specifically for use therein, it being understood and agreed that
the only such information is that described as such in Section 7(b)
hereof. Except as disclosed in the Offering Document, on the date
of this Agreement, the Company’s Annual Report on Form 10-K
most recently filed with the Commission and all subsequent reports
which have been filed by the Company with the Commission or sent to
stockholders pursuant to the Securities Exchange Act of 1934 (the
“ Exchange Act ”) do not include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such
documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.
(b) The financial statements and the
related notes thereto of the Company and its consolidated
subsidiaries included or incorporated by reference in the
Preliminary Offering Circular and the Offering Circular comply in
all material respects with the applicable requirements of the
Securities Act and the Exchange Act, as applicable, and present
fairly the consolidated financial position of the Company and its
subsidiaries as of the dates indicated and the results of their
operations and the changes in their cash flows for the periods
specified; such financial statements have been prepared in
conformity with generally accepted accounting principles in the
United States applied on a consistent basis throughout the periods
covered thereby; the other financial information included or
incorporated by reference in the Preliminary Offering Circular and
the Offering Circular has been derived from the accounting records
of the Company and its subsidiaries and presents fairly the
information shown thereby; and the “ Selected consolidated
financial data ” set forth in the Preliminary Offering
Circular and the Offering Circular is accurately presented in all
material respects and prepared on a basis consistent with the
audited and unaudited historical consolidated financial statements
from which it has been derived.
(c) Since the date of the most
recent financial statements of the Company included or incorporated
by reference in the Preliminary Offering Circular and the Offering
Circular, (i) there has not been any change in the capital stock
(other than the issuance of shares of Common Stock upon exercise of
options) or long-term debt of the Company or any of its
subsidiaries, or any dividend or distribution of any kind declared,
set aside for payment, paid or made by the Company on any class of
capital stock, or any material adverse change, or any development
involving a prospective material adverse change, in or affecting
the business, properties, management, financial position,
stockholders’ equity, results of operations or prospects of
the Company and its subsidiaries taken as a whole; (ii) neither the
Company nor any of its subsidiaries has entered into any
transaction or agreement that is material to the Company and its
subsidiaries taken as a whole or incurred any liability or
obligation, direct or contingent, that is material to the Company
and its subsidiaries taken as a whole; and (iii) neither the
Company nor any of its subsidiaries has sustained any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
disturbance or dispute or any action, order or decree of any court
or arbitrator or governmental or regulatory authority that is
material to the Company and its subsidiaries, taken as a whole,
except in the case of each of clauses (i), (ii) and (iii) as
otherwise disclosed in or incorporated by reference in the
Preliminary Offering Circular or the Offering Circular.
(d) The Company is subject to the
reporting requirements of either Section 13 or Section 15(d) of the
Exchange Act and files reports with the Commission on the
Electronic Data Gathering, Analysis, and Retrieval (EDGAR)
system.
(e) The Company and each of its
subsidiaries have been duly organized and are validly existing and
in good standing under the laws of their respective states of
organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority
(corporate and other) necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged
as described in the Offering Circular except where the failure to
be so qualified or have such power or authority would not,
individually or in the aggregate, have a material adverse effect on
the business, properties, management, financial position,
stockholders’ equity, results of operations or prospects of
the Company and its subsidiaries taken as a whole or on the
performance by the Company of its obligations with respect to the
Offered Securities (a “ Material Adverse Effect
”). The subsidiaries listed in Schedule B to this
Agreement are the only subsidiaries of the Company. The
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Company does not own, directly or indirectly,
equity securities of any entity other than (i) its interests in
such subsidiaries and (ii) as disclosed in the Offering Document,
minority interests in Freeport LNG Development, L.P., J & S
Cheniere S.A., Gryphon Exploration Company and Air Tower
LLC.
(f) The Company has an authorized
capitalization as set forth in the Offering Document under the
heading “Capitalization”; and all the outstanding
shares of capital stock or other equity interests (including
general and limited partnership interests) of each subsidiary of
the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description
thereof contained in the Offering Document under the heading
“Description of Capital Stock”, except as otherwise
described in the Offering Document or otherwise herein, are owned
directly or indirectly by the Company, free and clear of any lien,
charge, encumbrance, security interest, restriction on voting or
transfer or any other claim of any third party.
(g) The Company has full right,
power and authority to execute and deliver this Agreement, the
Offered Securities, the Indenture, the Registration Rights
Agreement and the Issuer Call Spread (the “ Issuer Call
Spread ” and, together with this Agreement, the Offered
Securities, the Indenture and the Registration Rights Agreement,
the “ Transaction Documents ”) and to perform
its obligations hereunder and thereunder; and all action required
to be taken for the due and proper authorization, execution and
delivery of each of the Transaction Documents and the consummation
of the transactions contemplated thereby has been duly and validly
taken.
(h) The Indenture has been duly
authorized by the Company and, when duly executed and delivered in
accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency or similar laws affecting the enforcement of
creditors’ rights generally or by equitable principles
relating to enforceability (collectively, the “
Enforceability Exceptions ”); and on the First Closing
Date (as defined in Section 3 hereof), the Indenture will conform
in all material respects to the requirements of the Trust Indenture
Act of 1939, as amended (the “ Trust Indenture Act
”), and the rules and regulations of the Commission
applicable to an indenture that is qualified thereunder.
(i) The Offered Securities have been
duly authorized by the Company and, when duly executed,
authenticated, issued and delivered as provided in the Indenture
and paid for as provided herein, will be duly and validly issued
and outstanding and will constitute valid and legally binding
obligations of the Company enforceable against the Company in
accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the
Indenture.
(j) When the Offered Securities are
delivered and paid for pursuant to this Agreement on the Closing
Date, such Offered Securities will be convertible into shares of
Common Stock of the Company in accordance with the terms of the
Indenture; the Underlying Shares issuable upon conversion of such
Offered Securities have been duly authorized and reserved for
issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and non-assessable;
the Underlying Shares have been duly authorized and validly issued,
are fully paid and non-assessable and conform to the description
thereof contained in the Offering Document; and the stockholders of
the Company have no preemptive rights with respect to the Offered
Securities or the Underlying Shares.
(k) Except as disclosed in the
Offering Document and for amounts payable by Cheniere to an NASD
member investment banking firm pursuant to the terms of an
engagement letter, there are no contracts, agreements or
understandings between the Company and any person that would give
rise to a valid claim against the Company or any Purchaser for a
brokerage commission, finder’s fee or other like
payment.
(l) This Agreement has been duly
authorized, executed and delivered by the Company and the
Registration Rights Agreement will have been duly authorized,
executed and delivered by the Company on the First Closing Date
and, when duly executed and delivered in accordance with its terms
by each of the other parties thereto, will constitute a valid and
legally binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the Enforceability
Exceptions, and except that rights to indemnity and contribution
thereunder may be limited by applicable law and public
policy.
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(m) Each Transaction Document,
Terminal Use Agreement and Engineering, Procurement and
Construction contract referred to in the Offering Document conforms
in all material respects to the descriptions thereof contained in
the Offering Document.
(n) Except as disclosed in the
Offering Document, neither the Company nor any of its subsidiaries
is (i) in violation of its charter, by-laws or similar
organizational documents; (ii) in default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of
its subsidiaries is subject; or (iii) in violation of any law or
statute or any judgment, order, rule or regulation of any court or
arbitrator or governmental or regulatory authority, except, in the
case of clauses (ii) and (iii) above, for any such default or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(o) The execution, delivery and
performance by the Company of each of the Transaction Documents to
which the Company is a party, the issuance and sale of the Offered
Securities, the issuance and delivery from time to time of the
Underlying Shares by the Company upon conversion of the Offered
Securities in accordance with the terms of the Offered Securities
and the provisions of the Indenture and compliance by the Company
with the terms thereof and the consummation of the transactions
contemplated by the Transaction Documents will not (i) conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries
pursuant to, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, (ii) result in
any violation of the provisions of the charter, by-laws or similar
organizational documents of the Company or any of its subsidiaries
or (iii) result in the violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of
clauses (i) and (iii) above, for any such conflict, breach or
violation that would not, individually or in the aggregate, have a
Material Adverse Effect.
(p) No consent, approval,
authorization, order, registration or qualification of or with any
court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company
of each of the Transaction Documents to which the Company is a
party, the issuance and sale of the Offered Securities and
compliance by the Company with the terms thereof and the
consummation of the transactions contemplated by the Transaction
Documents, except for such consents, approvals, authorizations,
orders and registrations or qualifications as may be required (i)
under applicable state securities laws in connection with the
purchase and resale of the Offered Securities by the Purchaser,
(ii) that, if not obtained or made, would not, individually or in
the aggregate, have a Material Adverse Effect and (iii) with
respect to the Offered Securities under the Securities Act and
applicable state securities laws as contemplated by the
Registration Rights Agreement.
(q) There are no legal, governmental
or regulatory investigations, actions, suits or proceedings pending
to which the Company or any of its subsidiaries is or may be a
party or to which any property of the Company or any of its
subsidiaries is or may be the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its
subsidiaries, could reasonably be expected to have a Material
Adverse Effect; to the Company’s knowledge, no such
investigations, actions, suits or proceedings are threatened or
contemplated by any governmental or regulatory authority or
threatened by others; and (i) there are no current or pending
legal, governmental or regulatory actions, suits or proceedings
that would be required under the Securities Act to be described in
a prospectus that are not so described in the Offering Document and
(ii) there are no contracts or other documents that are required
under the Securities Act to be filed as exhibits to a registration
statement or described in a registration statement or a prospectus
that are not filed with the Commission or described in the Offering
Document.
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(r) Each of (i) UHY Mann Frankfort
Stein & Lipp, CPAs, LLP, who have certified certain financial
statements of the Company and its subsidiaries and are an
independent registered public accounting firm with respect to the
Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Company
Accounting Oversight Board (“ PCAOB ”), (ii)
KPMG LLP, who certified the financial statements of Gryphon
Exploration Company and are an independent registered public
accounting firm with respect to Gryphon Exploration Company within
the applicable rules and regulations adopted by the Commission and
PCAOB and (iii) Hein & Associates LLP, who certified the
financial statements of Freeport LNG Development, L.P. and are an
independent registered public accounting firm with respect to
Freeport LNG Development, L.P. within the applicable rules and
regulations adopted by the Commission and PCAOB, are, in each case,
independent public accountants within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of
Certified Public Accountants and its interpretations and rulings
thereunder.
(s) The Company and its subsidiaries
have good and indefeasable title in fee simple to, have valid
rights to lease or otherwise use, or have options to acquire, all
items of real and personal property that are material to the
respective businesses of the Company and its subsidiaries, in each
case free and clear of all liens, encumbrances, claims and defects
and imperfections of title except those that (i) do not materially
interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries or (ii) could not
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(t) The Company and its subsidiaries
own, possess or can acquire on reasonable terms, adequate rights to
use all material patents, patent applications, trademarks, service
marks, trade names, trademark registrations, service mark
registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the
conduct of their respective businesses; and the conduct of their
respective businesses will not conflict in any material respect
with any such rights of others, and the Company and its
subsidiaries have not received any notice of any claim of
infringement of or conflict with any such rights of
others.
(u) Neither the Company nor any of
its subsidiaries is, and after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds
thereof as described in the Offering Document none of them will be,
an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder (collectively, “
Investment Company Act ”), in each case that is or is
required to be registered under Section 8 of the Investment Company
Act.
(v) Neither the Company nor any of
its subsidiaries is a “holding company” or a
“subsidiary company” of a holding company or an
“affiliate” thereof within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(w) Except as set forth in the
Offering Document, the Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate
federal, state, local or foreign governmental or regulatory
authorities that are necessary for the ownership or lease of their
respective properties, the conduct of their respective businesses
as described in the Offering Document or as are currently required
to develop their proposed LNG receiving terminals, given the
current state of such development, except where the failure to
possess or make the same would not, individually or in the
aggregate, have a Material Adverse Effect or, in the case of
development of their proposed LNG receiving terminals, as described
in the Offering Document; and except as described in the Offering
Document, neither the Company nor any of its subsidiaries has
received notice of any revocation or modification of any such
license, certificate, permit or authorization or has any reason to
believe that any such license, certificate, permit or authorization
will not be renewed in the ordinary course.
(x) No material labor disturbance by
or material dispute with employees of the Company or any of its
subsidiaries exists or, to the Company’s knowledge, is
contemplated or threatened.
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(y) The Company and its subsidiaries
(i) are in compliance with any and all applicable federal, state,
local and foreign laws, rules, regulations, decisions and orders
relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants
or contaminants (collectively, “ Environmental Laws
”), (ii) have received and are in compliance with all
permits, licenses or other approvals currently required of them
under applicable Environmental Laws to conduct their respective
businesses, (iii) own or operate any real property contaminated
with any substance that is subject to any Environmental Laws, or is
subject to any claim relating to any Environmental Laws, and (iv)
have not received notice of any actual or potential liability for
the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or
contaminants, except in any such case as described in the
Preliminary Offering Circular and the Offering Circular or for any
such failure to comply, failure to receive required permits,
licenses or approvals, or contamination, claim or liability as
would not, individually or in the aggregate, have a Material
Adverse Effect.
(z) Each employee benefit plan,
within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (“ ERISA
”), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees
of the Company and its affiliates has been maintained in all
material respects in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the “ Code ”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section
4975 of the Code, has occurred with respect to any such plan
excluding transactions effected pursuant to a statutory or
administrative exemption; and for each such plan that is subject to
the funding rules of Section 412 of the Code or Section 302 of
ERISA, no “accumulated funding deficiency” as defined
in Section 412 of the Code has been incurred, whether or not
waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions)
exceeds the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions.
(aa) The Company and its
subsidiaries maintain systems of internal accounting controls
sufficient to provide reasonable assurance that in all material
respects (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(bb) The Company and its
subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, which insurance is in amounts
and insures against such losses and risks as are reasonably
adequate for the conduct by the Company and its subsidiaries of
their respective businesses; and neither the Company nor any of its
subsidiaries has received notice from any insurer or agent of such
insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such
insurance.
(cc) Neither the Company nor any of
its subsidiaries nor, to the Company’s knowledge, any
director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any of its subsidiaries has
(i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political
activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate
funds; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
(dd) On and immediately after the
Closing Date, the Company (after giving effect to the issuance of
the Offered Securities and the other transactions related thereto
as described in the Offering Document) will be Solvent. As used in
this paragraph, the term “ Solvent ” means, with
respect to a particular date, that on such date (i) the present
fair market value (or present fair saleable value) of the assets of
the Company is not less than the total amount required to pay the
liabilities of the Company on its total existing debts and
liabilities (including contingent liabilities) as they become
absolute and matured;
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(ii) the Company is able to realize upon its
assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the
normal course of business; (iii) assuming consummation of the
issuance of the Offered Securities as contemplated by this
Agreement and the Offering Document, the Company is not incurring
debts or liabilities beyond its ability to pay as such debts and
liabilities mature; (iv) the Company is not engaged in any business
or transaction, and does not propose to engage in any business or
transaction, for which its property would constitute unreasonably
small capital after giving due consideration to the prevailing
practice in the industry in which the Company is engaged; and (v)
the Company is not a defendant in any civil action that would
result in a judgment that the Company is or would become unable to
satisfy.
(ee) Except as disclosed in the
Offering Document, no subsidiary of the Company is currently
prohibited, directly or indirectly, under any agreement or other
instrument to which it is a party or is subject, from paying any
dividends to the Company, from making any other distribution on
such subsidiary’s capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary’s properties or assets to
the Company or any other subsidiary of the Company.
(ff) On the Closing Date, the
Offered Securities will not be of the same class as securities
listed on a national securities exchange registered under Section 6
of the Exchange Act or quoted in an automated inter-dealer
quotation system; and each of the Preliminary Offering Circular and
the Offering Circular, as of its respective date, contains or will
contain all the information that, if requested by a prospective
purchaser of the Offered Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4)
under the Securities Act.
(gg) Neither the Company nor any of
its affiliates (as defined in Rule 501(b) of Regulation D) has,
directly or through any agent, sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security
(as defined in the Securities Act), that is or will be integrated
with the sale of the Offered Securities in a manner that would
require registration of the Offered Securities under the Securities
Act.
(hh) None of the Company or any of
its affiliates or any other person acting on its or their behalf
(other than the Purchaser, as to which no representation is made)
has (i) solicited offers for, or offered or sold, the Offered
Securities by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) of Regulation D or in
any manner involving a public offering within the meaning of
Section 4(2) of the Securities Act or (ii) engaged in any directed
selling efforts within the meaning of Regulation S under the
Securities Act (“ Regulation S ”), and all such
persons have complied with the offering restrictions requirement of
Regulation S. The Company has not entered and will not enter into
any contractual arrangement with respect to the distribution of the
Offered Securities except for this Agreement.
(ii) Assuming the accuracy of the
representations and warranties of the Purchaser contained in
Section 4 and their compliance with their agreements set forth
therein, it is not necessary, in connection with the issuance and
sale of the Offered Securities to the Purchaser and the offer,
resale and delivery of the Offered Securities by the Purchaser in
the manner contemplated by this Agreement and the Offering
Circular, to register the Offered Securities under the Securities
Act or to qualify the Indenture under the United States Trust
Indenture Act of 1939, as amended.
(jj) The Company has not taken,
directly or indirectly, any action designed to or that could
reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Offered Securities.
(kk) Neither the issuance, sale and
delivery of the Offered Securities nor the application of the
proceeds thereof by the Company as described in the Offering
Document will violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of
such Board of Governors.
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(ll) No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Offering Document
has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith. The statements and financial
information (including the assumptions described therein) included
in the Offering Document described under the heading
“Business—Our LNG Receiving Terminals—Freeport
LNG—Our Expectations Regarding Freeport LNG,” in the
second paragraph under the heading “Business—Our LNG
Receiving Terminals—Sabine Pass LNG—Total TUA”
and in the second paragraph under the heading
“Business—Our LNG Receiving Terminals—Chevron USA
TUA” were made by the Company with a reasonable basis and in
good faith and reflect the Company’s good faith best estimate
of the matters described therein; all assumptions material to such
statements and financial information are set forth in the Offering
Document; the assumptions used in the preparation of the projected
information are reasonable; and none of the Company or its
subsidiaries are aware of any business, economic or industry
developments inconsistent with the assumptions underlying such
statements and financial information.
(mm) Nothing has come to the
attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the
Offering Document is not based on or derived from sources that are
reliable and accurate in all material respects.
(nn) No relationship, direct or
indirect, exists between or among the Company or any of its
subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its
subsidiaries, on the other, that is required by the Securities Act
to be described in a prospectus that is not described in the
Offering Document and that is not so described therein.
(oo) The information included in the
Offering Document regarding the Company’s estimated proved
reserves is based on the reports generated by Sharp Petroleum
Engineering, Inc. and Ryder Scott Company, as independent petroleum
engineers with respect to the Company (the “ Engineers
”). The information underlying the estimates of the reserves
of the Company supplied by the Company to the Engineers, for the
purposes of preparing the reserve reports of the Company referenced
in the Offering Document (the “ Reserve Reports
”), was true and correct in all material respects on the date
of each such Reserve Report; the estimates of future capital
expenditures and other future exploration and development costs
supplied to the Engineers were prepared in good faith and with a
reasonable basis; the information provided to the Engineers for
purposes of preparing the Reserve Reports was prepared in all
material respects in accordance with customary industry practices;
the Engineers were, as of the date of each of the Reserve Reports
prepared by them, and are, as of the date hereof, independent
petroleum engineers with respect to the Company; other than normal
production of reserves and intervening spot market product price
fluctuations, and except as disclosed in the Offering Document, the
Company is not aware of any facts or circumstances that would
result in a material decline in the reserves in the aggregate, or
the aggregate present value of future net cash flows therefrom, as
included in the Offering Document and as reflected in the Reserve
Reports; estimates of such reserves and the present value of the
future net cash flows therefrom as included in the Offering
Document and reflected in the Reserve Reports comply in all
material respects with the Securities Act.
(pp) There is and has been no
failure on the part of the Company or any of the Company’s
directors or officers, in their capacities as such, to comply in
all material respects with any provision of the Sarbanes-Oxley Act
of 2002 and the rules and regulations promulgated in connection
therewith (the “ Sarbanes-Oxley Act ”),
including Section 402 related to loans and Sections 302 and 906
related to certifications.
(qq) Except as set forth in the
Offering Document, the proceeds to the Company from the offering of
the Offered Securities will not be used to purchase or carry any
security.
3. Purchase, Sale and Delivery of
Offered Securities . On the basis of the representations,
warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell
to the Purchaser, and the Purchaser agrees to purchase from the
Company, at a purchase price of 97.25% of $300,000,000 principal
amount of the Firm Securities.
8
The Company will deliver against
payment of the purchase price the Firm Securities in the form of
one or more permanent global securities in definitive form (the
“ Firm Global Securities ”) deposited with the
Trustee as custodian for The Depository Trust Company (“
DTC ”) and registered in the name of Cede & Co.,
as nominee for DTC. Interests in any permanent global securities
will be held only in book-entry form through DTC, except in the
limited circumstances described in the Offering Document. Payment
for the Firm Securities shall be made by the Purchaser in Federal
(same day) funds by official check or checks or wire transfer to an
account at a bank acceptable to CSFB at the office of Shearman
& Sterling LLP, 599 Lexington Ave., New York, NY 10022 at 10
A.M. (New York time), on July 27, 2005, or at such other time not
later than seven full business days thereafter as CSFB and the
Company determine, such time being herein referred to as the
“ First Closing Date, ” against delivery to the
Trustee as custodian for DTC of the Firm Global Securities
representing all of the Firm Securities. The Firm Global Securities
will be made available for checking at the above office of Shearman
& Sterling LLP at least 24 hours prior to the First Closing
Date.
In addition, upon written notice
from CSFB given to the Company from time to time not more than 30
days subsequent to the date of this Agreement, the Purchaser may
purchase all or less than all of the Optional Securities at the
purchase price of 97.25% of $25,000,000 principal amount of the
Optional Securities (including any accrued interest thereon to the
related Optional Closing Date). The Company agrees to sell to the
Purchaser the principal amount of Optional Securities specified in
such notice and the Purchaser agrees to purchase such Optional
Securities. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously
are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to
time and to the extent not previously exercised may be surrendered
and terminated at any time upon notice by CSFB to the
Company.
The time for the delivery of and
payment for the Optional Securities, being herein referred to as
the “ Optional Closing Date ”, which may be the
First Closing Date (the First Closing Date and the Optional Closing
Date, if any, being sometimes referred to as a “ Closing
Date ”), shall be determined by CSFB on behalf of the
Purchaser but shall not be later than seven full business days
after written notice of election to purchase Optional Securities is
given.
The Company will deliver against
payment of the purchase price the Optional Securities being
purchased on the Optional Closing Date in the form of one or
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