EXHIBIT 10.1

EXPLORATION AGREEMENT

BETWEEN

ZYDECO EXPLORATION, INC.

AND

FX ENERGY, INC.

DATED

APRIL 4, 1996

1.   USE OF THE SEISMIC FUNDS..............................................  2

2.   SEISMIC FUNDS.........................................................  3

3.   EXCESS SEISMIC COSTS DUE TO TURNKEY CONTRACTS.........................  4

4.   DAMAGES TO THE STATE OF LOUISIANA UNDER THE EXCLUSIVE SEISMIC PERMIT..  4

5.   DISCONTINUANCE OF SEISMIC FUND PAYMENTS...............................  4

6.   PROSPECTS.............................................................  6

7.   PROSPECT DEVELOPMENT..................................................  6

9.   PROSPECT TEST WELL....................................................  8

10.  NON-PROPOSING PARTY'S ELECTION TO PARTICIPATE.........................  8

11.  ZEI'S OBLIGATIONS.....................................................  9

12.  ACCOUNTING OF SEISMIC FUNDS...........................................  9

13.  RECORD TITLE.......................................................... 10

14.  AREA OF MUTUAL INTEREST............................................... 10

15.  SEISMIC DATA.......................................................... 11

16.  GENERAL PROVISIONS.................................................... 12

EXPLORATION AGREEMENT

This Exploration Agreement is made and entered into this 4th day of April, 1996, by and between Zydeco Exploration, Inc. ("ZEI") and FX Energy, Inc. ("FX").

W I T N E S S E T H :

WHEREAS, ZEI has considerable expertise in exploration and production activities in the formerly seismically-blind trends of southern Louisiana; and

WHEREAS, ZEI utilizes advanced seismic imaging and comprehensive well log analysis and integration to identify new drilling opportunities in an attempt to minimize the risk in each of the prospects so identified; and

WHEREAS, FX desires to acquire and explore for oil and gas reserves in the on- and off-shore area of coastal Louisiana; and

WHEREAS, FX and ZEI desire to work together to generate, develop, and exploit oil and gas exploration prospects in the coastal Louisiana area; and

WHEREAS, the parties desire to establish an area of mutual interest within which to develop exploration and drilling prospects to be shared by them; and

WHEREAS, the parties desire to delegate to ZEI the responsibility of managing the acquisition of seismic options and/or permits, managing the acquisition, processing, and reprocessing of seismic data, identifying potential prospects, acquiring leases and farmouts, interpreting geological and geophysical data, making drilling recommendations, and managing the exploration process, including selecting and monitoring a production operator, or alternately, acting itself as production operator; and

WHEREAS, ZEI will contribute to the exploration program for costs a State of Louisiana exclusive seismic survey permit obtained at the State of Louisiana tender on February 14, 1996 (the "Exclusive Seismic Permit"), a copy of which is attached hereto as Exhibit "A," and all overhead costs associated with the development and interpretation of drillable prospects except for the costs of processing and re-processing seismic data and well logs; and

WHEREAS, FX will pay 100% of Seismic Costs, as hereafter defined, up to $13,500,000 and 50% of Seismic Costs thereafter; and

WHEREAS, the parties memorialize their undertakings pursuant to the terms hereinafter set forth;

NOW, THEREFORE, in consideration of the foregoing, and of the mutual and dependent covenants hereinafter set forth, and other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

ZEI shall obtain seismic data (the "Program Data") covering the lands depicted on Exhibit "B" and modified by Exhibit "B-1" (the "Initial Prospect Lands") using funds ("Seismic Funds") contributed by FX, subject to the understanding that should Seismic Costs, as defined herein, exceed $13,500,000 (the "Target Costs"), ZEI and FX shall jointly bear all Seismic Costs in excess of Target Costs. The Seismic Funds shall be advanced by FX according to the schedule described in Section 2.

The Seismic Funds shall be applied by ZEI as follows:

a. To ZEI as reimbursement for the expenses, including bonus, incurred to date in acquisition of the Exclusive Seismic Permit; then

b. toward costs incurred by ZEI in acquiring and processing Program Data, including:

i. acquisition of proprietary seismic data, including, without limitation, the seismic data required under the Exclusive Seismic Permit, including quality control expenses and feasibility tests prior to commencement of acquisition of seismic data;

ii. obtaining permits to acquire seismic data;

iii. payments for options to obtain seismic data, and out of pocket costs incident thereto, including the state permit for 51,350 acres, (to the extent such permit is not reimbursed under the other provisions hereof);

iv. seismic processing and reprocessing costs;

v. licensing of seismic data owned by third parties;

vi. third party legal and professional expenses relating to the Exclusive Seismic Permit, or the acquisition or processing of Program Data;

vii. weather insurance, as applicable for non-turnkey agreements;

viii. turnkey contracts;

ix. damages paid by ZEI to landowners for damages to lands or possessions;

x. the cost of legal defense, judgments, and settlements relating to any claim or cause of action brought by a land or mineral owner relating to or arising out of the acquisition of seismic data hereunder;

xi. the cost of transmission or transportation of data from field to office and insurance costs associated therewith;

xii. any other third party expense reasonably incurred by ZEI in connection with the items enumerated under this Section.

c. toward costs incurred by ZEI in acquiring permits, options to lease lands within the AMI, and leases of lands within the AMI when necessary including:

i. bonus and other payments made to parties for such options;

ii. out-of-pocket costs incurred by ZEI in obtaining such options, e.g., landman costs, broker expenses, abstract charges, etc.;

iii. third party legal, accounting, and professional expenses incurred in obtaining such options, both in examination of title and in negotiating options;

iv. any other third party expense reasonably incurred by ZEI in connection with the items enumerated under this Section.

The term "Seismic Costs" shall include all items referred to in this
Section 1.

DATE             AMOUNT
----             ------

1996-05-15    $3,000,000.00

1996-06-30     1,000,000.00

1996-07-30     1,000,000.00

1996-08-30     1,000,000.00

1996-09-30     2,000,000.00

1996-10-30     1,000,000.00

1996-11-30     1,000,000.00

1996-12-30     1,000,000.00

1997-01-30     1,000,000.00

1997-02-28     1,500,000.00

Should FX fail to make the initial advance by May 15, 1996, this agreement shall terminate and be of no further force or effect.

The parties anticipate that ZEI may enter into one or more turnkey contracts. The parties estimate that the premium required for turnkey contracts may bring total Seismic Costs to $15,000,000. Should turnkey costs cause Seismic Costs to exceed the Target Costs, the parties agree:

(i) In lieu of FX bearing 100% of Seismic Costs up to $13,500,000, FX shall bear 100% of Seismic Costs up to $13,000,000.

(ii) FX and ZEI shall bear Seismic Costs between $13,000,000 and $15,000,000 equally; and

(iii) Any Seismic Costs in excess of $15,000,000 shall be borne equally.

The Exclusive Seismic Permit requires the payment of liquidated and other damages in certain situations. Should such be required, the parties agree that such damages shall be borne equally by FX and ZEI.

a. Should FX fail to make a Seismic Fund payment within thirty days of the date due (a "Discontinuance"), the parties shall proceed as follows:

i. The obligation of FX to make additional Seismic Fund payments shall terminate, as well as the right of FX to make such payments.

ii. ZEI shall, individually, or with the cooperation or assistance of one or more companies, complete acquiring or processing Program Data; provided however, it shall incur no liability to FX for failing to do so.

iii. At such time as ZEI acquires an interest in a lease covering a portion of the Initial Prospect Lands (which may be acquired by direct lease, assignment from an existing lease, or acquiring a farmout), ZEI shall determine the aggregate amount of Seismic Costs incurred to that date.

iv. FX shall be entitled to a prospect ownership interest (the "FX Prospect Interest") which, expressed as a percentage, is equal to the Seismic Funds FX paid divided by twice the total Seismic Funds expended. Thus a contribution of $3.0 of Seismic Funds by FX when total Seismic Costs were $12.0 million entitle FX to a FX Prospect Interest equal to 12.5%.

b. Where ZEI itself, following a Discontinuance, contributes funds that otherwise would be provided by FX under the terms hereof, ZEI shall be entitled to receive back such funds, together with interest thereon at the prime interest rate, from revenues

attributable to the FX Prospect Interest (including, without limitation, any working interest or overriding royalty interest revenues from production or front end proceeds attributable to such interest when owned by FX under the applicable operating agreement or proceeds from the sale or license of seismic data).

c. Subject to the provision immediately below, if a Discontinuance occurs, and ZEI does not itself fund the deficient Seismic Costs, ZEI may sell, trade, farm-out, lease, sublease or otherwise trade (collectively, a "Trade") the aggregate (i.e., both that of ZEI and FX) prospect interests to any party on arms' length terms. For this purpose the aggregate prospect interests includes all seismic data acquired hereunder, and revenues from a Trade include seismic data sale or license proceeds. Any revenues accruing from a Trade shall be applied toward the cost of completing the project contemplated hereunder.

d. Should ZEI do a Trade and FX have funded $8,000,000 or more prior to the Discontinuance, then the parties shall treat FX as having earned a vested prospect ownership interest of 25%, which shall be treated under the applicable operating agreement and not subject to any Trade, and any revenues from a Trade, which would in this instance cover a 75% prospect ownership interest, shall be shared 33-1/3% by FX and 66-2/3% by ZEI.

As used herein, "prospect" shall mean a block of acreage suitable for exploration, including leasehold, operating, nonoperating, mineral and royalty interests, licenses, permits, and contract rights relating thereto.

Upon acquisition of the Program Data, ZEI shall evaluate such data for prospects. Prospects found during the initial review of such seismic data are hereinafter referred to as the "Prospects."

a. Prospect Preparation

ZEI will prepare the Prospects for evaluation, which shall include, among other things, the following:

i. examination of land and lease titles to determine lands and leases available for lease or farmout;

ii. leasing of lands within the Prospect perimeters, and, where such lands are under lease, acquiring farmouts;

iii. geological and geophysical interpretation;

iv. mapping; and

v. permitting.

b. Operating Agreement for Prospects

Each Prospect will be drilled and operated under an operating agreement in the form of that attached hereto as Exhibit "C" (the "Default Operating Agreement"). Each such operating agreement shall cover the Prospect Lands for the applicable Prospect. The parties acknowledge that for one or more of the Prospects, third parties may participate in the drilling of wells. Such parties may request changes in the applicable operating agreement. ZEI and FX agree to negotiate changes as may be requested in good faith. On one or more Prospects, ZEI may itself not wish to act as operator. In such event ZEI may designate a qualified third party to act as operator of the Prospect.

In the event of any inconsistency or conflict between the terms and provisions of this Agreement and of the operating agreement covering any Prospect or other prospect developed hereunder, the terms and provisions of this Agreement shall prevail.

c. Notice to FX of Completion of Prospect Assembly and Development

ZEI will notify FX when a Prospect's assembly and development is complete. Subject to any applicable restrictions imposed in confidentiality agreements or license agreements, ZEI will make available to FX in ZEI's office all seismic materials, maps, geological reports leases, farmout agreements or other materials in its possession reasonably relevant to a decision to participate in the drilling of the Prospect test well and prospect. ZEI shall give FX access to ZEI's 3D work stations during normal business hours as necessary or appropriate to allow FX to evaluate 3D seismic data relevant to the prospect.

a. Program expenses ("Prospect Expenses") are to be borne equally by ZEI and FX and include the following costs of preparing the Prospects for evaluation, development, and drilling:

i. lease bonuses and brokerage for additional leases wholly or partly within the Prospect Lands;

ii. delay or shut in rental payments on leases or interests acquired hereunder;

iii. third party legal and professional expenses relating to the acquisition or maintenance of leases or farmouts;

iv. any other third party expense reasonably incurred by ZEI in connection with the items enumerated under this Section or in Section 7;

v. engineering costs

provided, however, if FX fails to pay the full amount of the Target Costs, FX shall bear a percentage of the Prospect Expenses equal to its FX Prospect Interest. FX shall have the opportunity to participate for a working interest in Prospect leases and farmouts equal to its FX Prospect Interest.

b. Should FX fail to pay Prospect Expenses within thirty days of receipt of a billing therefor, and ZEI demand payment of such Prospect Expenses by written demand delivered by certified mail, return receipt requested, and FX not pay the delinquent Prospect Expenses within fifteen (15) days of receipt of the certified mail demand; then

i. FX shall have no liability for such Prospect Expenses;

ii. FX shall be deemed to have declined to participate in the Prospect in question; and

iii. FX shall promptly, upon request, quitclaim to ZEI any interest it has or might have in the Prospect in question.

For a period of ninety days following ZEI's delivery of the notice provided in Section 7.c advising that a Prospect's assembly and development is complete, ZEI shall have the exclusive right to propose a well. Thereafter, either party may propose a well. The proposing party shall include the following information with its notice:

a. the spud date scheduled for the initial test well on the Prospect, which shall not be less than 90 days from the date of notice (subject to rig availability) unless a farmout requirement or lease termination necessitates a shorter period;

b. the target formation;

c. an AFE for the test well, with dry hole and completion costs shown;

d. whether the well is recommended to be drilled on a turnkey, daywork, or footage basis;

e. an estimated economic evaluation of the Prospect; and

f. the Default Operating Agreement for signature, revised to include the legal description of the Prospect in question.

Within 30 days of its receipt of the notice described in Section 9 above, the non-proposing party shall advise the proposing party of the working interest, if any, with which the non-proposing party will either take itself or sell to a third party. If the aggregate working interest for which the non- proposing party will either itself participate or sell to a third party is less than the working interest owned by the non-proposing party, the non-proposing party shall assign the balance of its working interest to proposing party or its designee. Such assignment shall be in the form of that attached hereto as Exhibit "D" (the "Assignment"). As provided in the Assignment, the non- proposing party will reserve a 2% of 8/8ths overriding royalty until payout, as therein defined, together with an option to convert said overriding royalty interest to a 20% of 8/8ths working interest at payout, both the overriding royalty and working interest to be proportionately reduced to reflect the working interest assigned.

Any consideration received by a party for the sale or farming out of a portion of its working interest shall be solely for such party's account.

Should a non-proposing party fail to assign its excess interest under the Assignment prior to ten days before the scheduled spud date, the excess interest will be drilled subject to the non-consent provisions of the Default Operating Agreement, which provides for a forfeiture of interest on Exploratory Operations, as defined therein.

Without further consideration, ZEI shall undertake the following:

a. to provide all management and administration necessary to prepare the Prospects for drilling, as more fully described under Section 7.a;

b. all bonding requirements necessary to maintain leases acquired pursuant hereto;

c. geophysical and geological evaluations of the Prospects; and

d. estimated economic evaluations of the Prospects.

Notwithstanding the foregoing, FX shall reimburse ZEI for one-half the cost of bonding a Lease at the time ZEI delivers an assignment of an interest in the Lease to FX.

ZEI shall have the sole authority to determine the specifications of acquiring, processing, and reprocessing seismic data and well logs. Further, ZEI has the option of performing all or partial sequencing of the seismic data or well log processing utilizing its own facilities.

a. Segregated Account

For ease of accounting, ZEI shall segregate the Seismic Funds into a separate account (the "Seismic Fund Account"). Such account shall be styled to put third parties on notice that the funds are held for the joint account of FX and ZEI. Except where impractical, all Seismic Costs shall be withdrawn directly from the Seismic Fund Account.

b. Accounting

Not less than 45 days after the end of each calendar quarter, ZEI shall give FX a detailed accounting of all funds withdrawn from the Seismic Fund Account. ZEI shall furnish documentation supporting Seismic Fund expenditures to FX upon request.

c. Right to Audit

FX shall have such rights of audit as are available to a non-operator under the Default Operating Agreement.

d. Internally Generated Statements

Prior to the end of each month ZEI shall forward to FX internally prepared statements for the prior month showing revenues and expenses charged to the Seismic Fund Account.

e. Joint Signature Account

Should the timing of Seismic Costs and payment of the Seismic Funds be such that the Seismic Fund Account would have in excess of $2,000,000 at one time, ZEI and FX shall jointly deposit the excess funds (i.e., those over $2,000,000) into a joint signature account.

a. ZEI shall obtain title to leases acquired pursuant hereto (the "Leases"). ZEI shall assign to FX its leasehold interest in a Lease utilizing the form of assignment provided herein. Such assignment shall be delivered after FX has paid all Prospect Expenses billed to it hereunder and:

i. a well is ready for drilling; or

ii. front end costs have been paid to ZEI by a third party working interest owner, or

iii. a farmout of the prospect has been signed.

b. Each of ZEI and FX agree not to pledge, mortgage, or hypothecate any Lease without the consent of the other prior to the time a well is spudded on such Lease or a unit containing

such Lease. Each of ZEI and FX further agree not to pledge, mortgage or hypothecate any seismic data obtained hereunder.

The parties hereby designate an Area of Mutual Interest ("AMI"). The AMI shall encompass the Initial Prospect Lands. Should ZEI acquire as a Seismic Cost data covering lands outside the Initial Prospect Lands, the AMI shall be deemed enlarged to cover all lands covered by such seismic data. Any interest taken by either party after May 16, 1996 and prior to May 15, 2001 in an oil and gas lease, exploration option, operating agreement, farm-in, deed coupled with mineral interest, or any similar agreement which creates or effects an interest in hydrocarbons in lands within the AMI (an "Interest"), or acquisition of a contractual right to acquire an Interest, shall be deemed taken for development under this agreement. The party acquiring an Interest shall, within thirty (30) days of the time of such acquisition, notify, in writing, the non-acquiring party. The notice shall describe the interest and set forth the terms of such acquisition, the consideration paid, any other acquisition costs, and other obligations assumed. The non-acquiring party will then have the right, within thirty (30) days of the receipt of such notice, to elect in writing to receive an assignment of one half (or, if smaller, its working interest ownership determined by the FX Prospect Interest, as applicable) of each such acquired Interest and the obligations connected therewith. If the non-acquiring party elects to take such an assignment, the non-acquiring party shall tender to the acquiring party, at the time it gives notice of its election, its share of the consideration and acquisition costs actually paid by the acquiring party, and in consideration thereof, shall receive an assignment of its share of the Interest with covenants of special warranty. The failure to make such election and to tender its share of the consideration and costs within such thirty (30) day period shall constitute a waiver of the non-acquiring party's right to receive such an interest. During such thirty (30) day notice period, the non-acquiring party shall have the right to inspect all leases, documents, title information, and contracts reflecting the interest to be acquired.

a. Licensed Data

When licensing data for use in evaluation of the Prospects, ZEI shall endeavor to secure a joint license which would allow FX and ZEI to use the licensed data independently. However, if a joint license can be obtained only by the payment of an additional premium, ZEI shall license such data with only itself as the licensee.

b. Marketing of Proprietary Data

ZEI will acquire proprietary seismic data in its prospect development program. Absent the agreement of both parties, such data shall not be marketed to third parties. FX shall own an interest in such seismic data equal to the FX Prospect Interest and ZEI the own the remaining interest in such data.

Notwithstanding the ownership in the seismic data described above, if FX funds the entire seismic acquisition program contemplated hereunder, then until such time, if any, as proceeds from the sale or license of proprietary seismic data equal Seismic Funds advanced by FX, FX shall receive all proceeds from any license or sale of proprietary seismic data. After such proceeds equal the Seismic Funds advanced by FX, any further proceeds shall be shared equally by ZEI and FX.

a. Additional Documents

The parties agree to execute such further documents as may be necessary or appropriate to more fully reflect the agreements and understandings reflected herein.

b. Amendment.

This Agreement may be amended only by an instrument signed by the party against whom such amendment is sought to be enforced.

c. Arbitration.

Subject to any restriction imposed by law on agreements for compulsory arbitration, the parties agree that any controversy or dispute arising out of, in connection with, or related to this Agreement, any provision or breach thereof, or any transaction contemplated hereby shall be submitted to and settled by binding and conclusive arbitration before a panel of three (3) arbitrators in Houston, Texas in accordance with the applicable rules of the American Arbitration Association (or any other form of arbitration agreed to by the parties) then in effect; provided, however, that only actual damages and attorney fees of the prevailing party reasonably incurred in connection with the arbitration proceeding shall be awarded in connection therewith. Judgment on any award rendered pursuant to any such arbitration proceeding may be entered in any court, Federal or state, having jurisdiction thereof, and

the parties shall be deemed to have waived their right to any form of appeal of such award to the extent permitted by law.

d. Assignment

This agreement may be assigned in whole or part by FX with the approval of ZEI, which approval shall not be unreasonably denied.

e. Successors and Assigns.

Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors and administrators of the parties hereto.

f. Consequential Damages.

Neither party hereto shall be liable to the other for special, indirect, consequential or incidental damages resulting from or arising out of this Agreement or the obligations contemplated hereunder, including, but not limited to, loss of production, loss of anticipated profits or business interruptions, however same may be caused.

g. Contractual Liabilities

Should ZEI incur a contractual liability to a third party in performing its undertakings hereunder, such contractual liability shall be treated as a Prospect Expense. Should ZEI incur a tort liability to a third party in performing its undertakings hereunder, and such liability be a result of gross negligence or willful malfeasance, such liability, and all attorneys fees and expenses relating thereto, shall be solely for ZEI's account. Should ZEI incur a tort liability to a third party in performing its undertakings hereunder, and such liability not be a result of gross negligence or willful malfeasance, such liability, and all attorneys fees and expenses relating thereto, shall be borne equally by FX (or its assigns) and ZEI.

h. Counterparts.

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

(Texas Deceptive Trade Practices Act)

It is the belief of the parties that this agreement is exempt from the provisions of the Texas Deceptive Trade Practices-Consumer Protection Act (the "Act"). Should, however, the Act be construed to not exempt this transaction, the following waiver shall apply. For the purpose of the following waiver, ZEI is deemed the Seller and FX the Purchaser:

PURCHASER REPRESENTS AND STIPULATES TO SELLER THAT:

(I) THE PURCHASER IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING POSITION;

(II) THE PURCHASER IS REPRESENTED BY LEGAL COUNSEL IN SEEKING OR ACQUIRING THE GOODS OR SERVICES WHICH IT ACQUIRES UNDER THIS AGREEMENT; AND

(III) CONSUMER'S LEGAL COUNSEL WAS NOT DIRECTLY OR INDIRECTLY IDENTIFIED, SUGGESTED, OR SELECTED BY SELLER OF AN AGENT OF THE SELLER.

(IV) I (THE PURCHASER) WAIVE MY RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT, SECTION 17.41 ET SEQ., BUSINESS & COMMERCE CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY OF MY OWN SELECTION, I VOLUNTARILY CONSENT TO THIS WAIVER."

j. Due Authorization.

Each party hereto represents that the execution, delivery and performance of this Agreement by such party has been duly authorized by all necessary corporate action.

k. Entire Agreement.

This Agreement, including the schedules and exhibits hereto constitutes the entire Agreement, and supersedes all other prior

agreements, understandings, representations and warranties both written and oral, among the parties, with respect to the subject matter hereto.

l. Force Majeure

In the event that any party is rendered unable, in whole or in part, by force majeure to carry out its obligations under this Agreement (other than the obligation to make payments of money due), upon such party giving notice and reasonably full particulars of such force majeure in writing to the other party within a reasonable time after the occurrence of the cause relied upon, the obligations of the party giving such notice, so far as they are affected by such force majeure, shall be suspended during the continuance of any inability so caused, but for no longer period; and the cause of the force majeure as far as possible shall be remedied with all reasonable dispatch. The term "force majeure" as employed herein shall mean an act of God, strike, lockout or other industrial disturbance, war, blockade, riot, lightning, fire, storm, flood, explosion, governmental restraint and any other cause whether of the kind herein enumerated, or otherwise, not reasonably within the control of the party claiming suspension. The settlement of strikes, lockouts and other labor difficulties shall be entirely within the discretion of the party having the difficulty. The above requirement that any force majeure shall be remedied with all reasonable dispatch shall not require the settlement of labor difficulties by acceding to the demands of opponents therein when such course is inadvisable in the discretion of the party having the difficulty.

m. Governing Law

Except as otherwise required by mandatory provisions of applicable law, this Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without reference to principles of conflicts of law.

n. Headings.

Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

o. Relationship of the parties

The parties to this Agreement are independent contractors. There is no relationship of agency, partnership, joint venture, employment, or franchise between the parties in any way. Neither party

nor its employees has the authority to bind or commit the other party in any way or to incur any obligation on its behalf.

p. Notices

Any notice or report herein required or permitted to be given shall be addressed to the parties as follows:

If to FX:

FX Energy, Inc.
237 Park Avenue, Suite 2100
New York, NY 10017

Tel: 212 551 3550
Fax: 212 490 0131

If to ZEI:

Zydeco Exploration, Inc.
Suite 1160
333 North Sam Houston Parkway East Houston, Texas 77060-2403

Tel: 713 820 2481
Fax: 713 820 6054

Any notice required to be given hereunder shall be sufficient if in writing, and sent by nationally recognized overnight courier service, hand delivery, telecopy or registered mail (return receipt requested and first-class postage prepaid), addressed to the address first set forth above for each party (or to such other address as any party shall specify by written notice so given), and shall be deemed to have been delivered as of the date sent.

q. Performance Standards

In performing their duties or exercising their rights hereunder, one party shall be liable to the other only for gross negligence or willful malfeasance. It is not the intent that either party have a fiduciary obligation to the other, any such obligation being expressly waived and disclaimed.

r. Severability

If any part of this Agreement is found invalid or unenforceable, that part will be amended to achieve as nearly as possible the same economic effect as the original provision and the remainder of this Agreement will remain in full force.

s. Statute of limitations.

No action arising under this Agreement may be brought at any time more than thirty six (36) months after discovery or acquisition of knowledge of the facts upon which the cause of action is based occurred.

t. Tax Matters

As to all operations hereunder, the parties hereto shall be subject to and shall comply and abide with the tax election provisions set out in Exhibit "E" attached hereto and made a part hereof for all purposes.

u. Third Party Beneficiary.

This Agreement is not intended to benefit or to create any obligations to, or rights in respect of, any persons other than the parties hereto, and their respective legal representatives, heirs or estates.

v. Time

Time is of the essence in all matters pertaining to this Agreement.

w. Titles

The parties acknowledge that the determination of adequate or marketable title to Louisiana lands and leases is, to a great extent, subjective. As to any option, permit, or land or lease acquired hereunder, ZEI shall make all title materials in its possession available to FX upon request. ZEI makes no warranty or representation that the title of any party granting any option, permit, land or lease hereunder is adequate, good, or marketable. Further, ZEI shall have no liability to FX of any nature upon the total or partial failure of title to any option, permit, land or lease acquired hereunder.

IN WITNESS WHEREOF, this Exploration Agreement is executed as of the date first above written.

ZYDECO EXPLORATION, INC.

By:  /s/ Sam Myers
     ----------------------------------
      Sam Myers, President

FX ENERGY, INC.

By:   /s/ William D. Forster
      ---------------------------------
Its:  President

EXHIBIT "B"

INITIAL PROSPECT LANDS

EXHIBIT "D"

PARTIAL ASSIGNMENT OF OIL AND GAS LEASE

STATE OF LOUISIANA (S)

PARISH OF _______________ (S)

This Assignment, from _______________, a __________ corporation whose address is ____________________________ (hereinafter called "Assignor") to ____________________, a _______ corporation whose address is _______________________ (hereinafter called "Assignee");

Assignor, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, does hereby SELL, TRANSFER, ASSIGN, SET OVER AND CONVEY unto Assignee, subject to the terms and provisions set forth herein, an undivided _______________ interest in and to the Oil and Gas Lease (the "Lease") described below:

[Lease Description]

ASSIGNOR hereby reserves unto itself, its successors and assigns, and saves and excepts from this assignment an undivided 2% of 8/8ths overriding royalty interest in all oil, gas or other hydrocarbons or minerals produced, saved, and sold from the lands subject to the Lease. Such reserved overriding royalty (the "Overriding Royalty") is subject to the following terms and conditions:

(a) The Overriding Royalty shall be free and clear of all cost and expense of production.

(b) The Overriding Royalty shall be paid at the same time as provided for payment of royalties under the Lease.

(c) The Overriding Royalty may be pooled and unitized with other lands and leases without the consent or joinder of the owner or owners of said overriding royalty.

(d) The Overriding Royalty is based on the assumption that the Lease covers the full and entire mineral interest in the lands described therein. In the event that it shall be found that the Lease covers less than the entirety of the minerals in said lands, the Overriding Royalty shall be reduced proportionately.

(e) To the extent that Assignor is assigning less than 100% of the working interest in the Lease, the Overriding Royalty shall be reduced proportionately.

(f) The Overriding Royalty shall not apply to nor be payable upon oil, gas or other hydrocarbons used for recycling, repressuring or similar operations benefiting the Lease or any portion thereof or other lands and leases pooled therewith or unavoidably lost. If the Lease provides that shut-in gas payments shall be made as royalty rather than as rental, Assignor shall not be entitled to any such royalty interest.

(g) "Project Payout" as used herein, is the first day of the next calendar month at the point when the net value of the total production from or attributable to the Lease (i.e., the gross income from such production, less operating expenses, lease royalties, production and/or other applicable taxes unless reimbursed to Assignee by the purchaser of such production, and less the hereinabove reserved overriding royalty to be paid by Assignee to Assignor) equals the total costs of drilling, testing and completing all Lease wells for production, including but not limited to costs associated with each well's separator, line heater, dehydrator, measuring equipment, flowlines, and facilities located on the Lands and utilized with such Lease production, and other equipment individually associated with Lease wells and not part of a processing plant or an existing central tank battery. Gross income shall include any prepayment from a purchaser. Total costs shall not include any costs associated with any facility which services, or is designed to service, in whole or part, off lease production.

Upon Project Payout, Assignor shall have the option (the "Option") to convert all of the Overriding Royalty into an undivided twenty percent (20%) working interest in the Lease proportionately reduced to reflect that Assignor is converting less than a 2% of 8/8ths overriding royalty, together with a like interest in all personal property and equipment on the Lease lands (including platforms and pipelines to the extent then owned by Assignee) used or obtained in connection with wells located thereon. At such time as Project Payout occurs, Assignee shall so notify Assignor. Notification shall be by certified mail, return receipt requested, as well as by telecopy. Assignor shall have thirty (30) days in which to exercise the Option. If Assignor exercises the Option, Assignee shall assign to Assignor the described working interest. Such assignment shall be effective as of the first day of the month next following the time in which Project Payout has occurred. The assignment shall be with warranty of title by, through and under the assignor, but not otherwise.

This Assignment is made by Assignor and accepted by Assignee subject to the following:

a. the terms, provisions and conditions of the Lease and any limitation on or contained in the Lease;

b. the terms, conditions and burdens imposed by or contained in instruments appearing in Assignor's chain of title, or appearing in instruments referenced in instruments appearing in Assignor's chain of title, or amendments thereto; and

c. the term, obligations, and burdens contained in that certain Agreement between Assignor and Assignee dated ____________ (the "Agreement"). Should the terms of this Assignment conflict with the terms of the Agreement, the terms of the Agreement shall control.

TO HAVE AND TO HOLD the Lease unto Assignee, its successors and assigns forever. This Assignment is given without warranty, express or implied, except for a limited warranty by Assignor that Assignor has not previously conveyed or encumbered or agreed to convey or encumber the Lease in favor of any other party.

With respect to the Overriding Royalty reserved by Assignor, Assignee shall, upon request, furnish Assignor with monthly reports showing the number of producing wells and producing days, lease stocks and runs.

The terms and conditions of this Assignment shall extend to and be binding upon the successors and assigns of the parties.

The covenants, obligations and agreements contained herein shall be construed as covenants running with the land.

This assignment is made effective ____________.

IN WITNESS WHEREOF, the parties have executed this instrument on the dates acknowledged below.

WITNESSES                         ASSIGNOR:



Name:  _______________________
       Witness
                                  By:
                                  Its:

Name:  _______________________
       Witness



WITNESSES                         ASSIGNEE:



Name:  _______________________
       Witness                    By:
                                  Its:


Name:  _______________________
       Witness

State of                 (S)
                         (S)
County of                (S)

     On this ___  day of ________, 199_, before me appeared ______________, to

me personally known, who, being by me duly sworn, did say that he is the _____ president, of FX Energy, Inc., a Delaware corporation, and that said instrument was signed and sealed on behalf of said corporation, and said appearer acknowledged that he executed the same as the free act and deed of said corporation.

State of Texas       (S)
                     (S)
County of Harris     (S)

     On this ___  day of ________, 199_, before me appeared Stephen W. Knecht,

to me personally known, who, being by me duly sworn, did say that he is the Vice President, of ZYDECO EXPLORATION, INC., a Texas corporation, and that said instrument was signed and sealed on behalf of said corporation by authority of its Board of Directors, and said appearer acknowledged that he executed the same as the free act and deed of said corporation.

IN WITNESS WHEREOF, I have hereunto set my official hand and seal on the date hereinabove written.

My Commission Expires:_______________

EXHIBIT "D"

1. RELATIONSHIP OF THE PARTIES.

This agreement shall not create any mining partnership, commercial partnership or other partnership relations or joint venture, and the liabilities of each of the Parties hereto shall be several and not joint. However, solely for the United States federal income tax purposes, this Agreement shall be considered as a partnership, but such relationship shall not be a partnership to any other extent or for any other purposes.

2. ELECTION TO REMAIN WITHIN SUBCHAPTER K.

Notwithstanding anything to the contrary herein or in the Operating Agreement (the "Operating Agreement") to which this is also to be considered an Exhibit, the Parties hereto agree with respect to all operations conducted hereunder:

Each Party, now having or hereinafter acquiring an interest under this Agreement, agrees not to elect to be excluded from the application of Subchapter K of Chapter 1 of Subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and each party agrees to join in the execution of such additional documents and elections as may be required by the Internal Revenue Service in order to effectuate the foregoing. In addition, if the income tax laws of any state in which the Parties conduct operations pursuant to the terms of this Exhibit or the Operating Agreement, contain provisions similar to those contained in Subchapter R of Chapter 1 of Subtitle A of the Code, the Parties hereby agree not to elect to be excluded from the application of such provisions.

3. INCOME TAX COMPLIANCE AND CAPITAL ACCOUNTS.

The Operator shall prepare and file all federal and state partnership income tax returns. In preparing such returns Operator shall use its best efforts and in doing so shall incur no liability to any other Party with regard to such returns. Not less than two weeks prior to the due date (including extensions) Operator shall submit to each Party a copy of the return as proposed for review.

The Operator shall establish and maintain fair market ("FMV") capital accounts and tax basis capital accounts for each Party. Operator shall submit to each Party, along with a copy of any proposed partnership income tax return, an accounting of its respective capital accounts as of the end of the tax return period.

Each Party agrees to furnish to Operator not later than 30 days before the return due date (including extensions) such information relating to the operations conducted under this Agreement as may be required for the proper preparation of such returns and capital accounts.

4. TAX MATTERS PARTNER.

4.1 Operator is Tax Matters Partner. Operator is designated tax matters partner ("TMP") as defined in Internal Revenue Code (Code) Section 6231 (a)
(7). In the event of any change in Operator, the Party serving as TMP for a given taxable year shall continue as TMP with respect to all matters concerning such year. The TMP and other Parties shall use their beat efforts to comply with the responsibilities outlined in this Section and in Code Sections 6222 through 6233 and 6050(K) (including any Treasury Regulations promulgated thereunder) and in doing so shall incur no liability to any other Party. Notwithstanding TMP's obligation to use its best efforts in the fulfillment of its responsibilities, TMP shall not be required to incur any expenses for the preparation for, or pursuance of administrative, or judicial proceedings, unless the Parties agree on a method for sharing such expenses.

4.2 Information Request by TMP. The Parties shall furnish TMP within two weeks from the receipt of the request with such information including information[ specified in Code Sections 6230(e) and 6050(K)] as TMP may reasonably request to permit it to provide the Internal Revenue Service with sufficient information for purposes of Code Sections 6230(e) and 6050(K).

4.3 TMP Agreements with IRS. The TMP shall not agree to any extension of the statue of limitations for making assessments on behalf of any other Party without first obtaining the written consent of that Party. The TMP shall not bind any other Party to a settlement agreement in tax audits without obtaining the concurrence of any such Party.

Any such Party who enters into a settlement agreement with the Secretary of the Treasury with respect to any partnership items, as defined by Code Section 6231(a)(3), shall notify the other Parties of such settlement agreement and its terms within 90 days from the date of settlement.

4.4 Inconsistent Treatment of Partnership Item. If any party intends to file a notice of inconsistent treatment under code Section 6222(b), such Party shall, prior to filing such notice, notify the TMP of such intent and the manner in which the Party's intended treatment of a partnership item is (or may be) inconsistent with the treatment of that item by the partnership. Within one week of receipt, the TMP shall remit copies of such notification to other Parties to the Partnership. If an inconsistency notice is filed solely because of the

Party not having received a Schedule K-1 in time for filing of its income tax return, the TMP need not be notified.

4.5 Request for Administrative Adjustment. No Party shall file a request pursuant to Code section 6227 for an administrative adjustment of partnership items for any Partnership taxable year without first notifying all other Parties. If all other Parties agree with the requested adjustment, the TMP shall file the request for administrative adjustment on behalf of the Partnership. If unanimous consent is not obtained within 30 days from such notice, or within the period required to timely file the request for administrative adjustment, if shorter, any Party, including the TMP, may file a request for administrative adjustment on its own behalf.

4.6 Judicial Proceedings. Any Party intending to file a petition under Code Sections 6226, 6228, or any other Code Section with respect to any partnership item, or other tax matters involving the Partnership, shall notify the other Parties of such intention and the nature of the contemplated proceedings. In the case where the TMP is the Party intending to file such petition, such notice shall be given within a reasonable time to allow the other Parties to participate in the choosing of the forum, then the appropriate forum shall be decided by majority vote. Each Party shall have a vote in accordance with its percentage interest in the Partnership for the year under audit. If a majority cannot agree, the TMP shall choose the forum. If a Party intends to seek review of any court decision rendered as a result of such a proceeding, such Party shall notify the other Parties.

4.7 Windfall Profit Tax. The parties agree to take appropriate action under Code Section 6232(c) and any Treasury Regulations thereunder to assure that items required to compute the Windfall Profit Tax as imposed by Chapter 45 of the Code not be treated as partnership items.

5. ELECTIONS.

5.1 General Elections. For both income tax return and capital account purposes, the Partnership shall elect (a) to deduct currently intangible drilling and development costs ("IDC"), (b) to use maximum allowable accelerated tax method and the shortest permissible tax life for depreciation purposes, (c) to use the accrual method of accounting, (d) to report income on a calendar year basis or other "required" year-end in accordance with the regulations under Code Section 706(b), and (e) dispositions of depreciable assets be accounted for under the General Asset account method to the extent permitted by Code Section 168(i)(4).

5.2 Depletion. Solely for FMV capital account purposes, depletion shall be calculated by using simulated percentage depletion within the meaning of the Treasury Regulation Section 1.704-l(b)(2)(iv)(2).

5.3 Other Elections. Any other elections must be approved by the affirmative vote of two (2) or more Parties owning a majority interest based on the post payout ownership as shown in Exhibit "A".

6. CAPITAL CONTRIBUTIONS AND FMV CAPITAL ACCOUNTS.

6.1 Capital Contributions. The respective capital contributions of each party to the Partnership shall be (a) each Party's interest in the oil and gas leases committed to the Partnership, and all properties associated with the leases, and (b) all amounts paid by each Party in connection with acquisition, exploration, development and operation of the leases and all other costs characterized as contributions or expenses borne by such Party under this Partnership. The contribution of the leases and other properties committed to this Partnership shall be made by each Party's agreement to hold legal title to its interest in such leases or any other properties as nominee for this Partnership.

6.2 FMV Capital Accounts. The FMV capital accounts shall be increased and decreased as follows:

(a) The FMV capital accounts shall be increased by: (i) the amount of money and the fair market value of any property contributed by each Party, respectively, to the Partnership (net of liabilities assumed by the partnership or to which the contributed property is subject); (ii) that Party is Sec. 7.1 allocated share of Partnership income and gains, or items thereof; (iii) any basis increases required by Code Sections 48(q) and 1016(a)(22); and
(iv) that Party's share of Code Section 705(a)(1)(8) and (C) items.

(b) The FMV capital accounts shall be decreased by: (i) the amount of money and the fair market value of property distributed to each Party (net of liabilities assumed by such Party which the property is subject); (ii) that Party is Sec. 7.1 allocated share of Partnership loss and deductions, or items thereof; (iii) any basis decreases required by Code Sections 48(q) and 1016(a)(22); and (iv) that Party is share of Code Section 705 (a)(2)(B) items and Code Section 709 non-deductible and non-amortizable items.

"Fair Market Value" when it applies to property contributed by a Party to the Partnership, shall be assumed to equal the adjusted basis, as defined in Code

Section 1011, of that property unless the Parties agree otherwise in a separate written agreement.

7. PARTNERSHIP ALLOCATIONS.

7.1 FMV Capital Account Allocations. Each item of income, gain, loss or deduction shall be allocated to each Party as follows:

(a) Actual or deemed income from the sale, exchange, distribution or other disposition of production shall be allocated to the Party entitled to such production or the proceeds from the sale of such production. In the event that deemed income arising from the inkind distribution of production equals that fair market value of the production distributed to a Party, the Parties recognize that the corresponding adjustments would be a net zero adjustment and accordingly, may be omitted from the FMV capital accounts;

(b) Exploration cost, IDC, operating and maintenance costs shall be allocated to each Party in accordance with its respective contribution to such cost;

(c) Depreciation shall be allocated to each Party in accordance with its contribution to the FMV capital account adjusted basis of the underlying asset;

(d) Simulated depletion shall be allocated to each Party in accordance with its FMV capital account adjusted basis in each oil and gas property;

(e) Loss (or simulated logs) upon the sale, exchange, distribution, abandonment or other disposition of depreciable or depletable property, shall be allocated to the Parties in the ratio of their respective FMV capital account adjusted basis in the depreciable or depletable property;

(f) Gain (or simulated gain) upon the sale, exchange, distribution or other disposition of depreciable or depletable property, shall be allocated to the Parties so that the FMV capital account balances of the Parties, with respect to such property, will most closely reflect their respective percentages or fractional interest under the Agreement;

(g) Costs or expenses of any kind shall be allocated to and accounted for by each Party in accordance with its respective contribution to such costs or expenses; and,

(h) Any other income item shall be allocated to the Parties in accordance with the allocation of realization.

(a) Unless otherwise expressly provided herein the allocations of Partnership items of income, gain, loss or deduction for tax return and tax basis capital account purposes shall be the same as those contained in Section 7.1

(b) If all the Parties consent, any money or an undivided interest in each and every property shall be distributed to one or more Parties as necessary for the purpose of balancing the FMV capital accounts:

(c) Unless (b) above applies, an undivided interest in each and every property shall be distributed to one or more Parties in accordance with the ratios of their FMV capital accounts:

(d) If a property is to be valued under (a) above or distributed pursuant to (b) or (c) above, the fair market value of the property shall be agreed to by the parties. In the event all of the parties do not reach agreement as to the fair market value of property, the Operator shall cause a nationally recognized independent engineering firm to prepare an evaluation of fair market value of such property.

8.4 Final Distribution. Third, after the FMV capital accounts of the Parties have been adjusted, pursuant to Sec. 8.3 above, all other or remaining property and interest then held by the Partnership shall be distributed to the Parties in accordance with their FMV capital account balances.

9. TRANSFERS, SURVIVORSHIP AND CORRESPONDENCE.

9.1 Transfers. These Partnership provisions shall inure to the benefit of and be binding upon the Parties hereto and their successors and assigns. The Parties agree that if any one of them makes a sale or assignment of its interest under this Agreement such sale or assignment will be structured, if possible, so as not to cause a termination under Code Section
708(b)(1)(B).

9.2 Survivorship. Any Termination of the Agreement shall not affect the continuing application of the Tax Partnership provisions as necessary for the termination and liquidation of the Tax Partnership.

9.3 Correspondence. All correspondence relating to the preparation and filing of the Partnership's income tax return and capital accounts shall be forwarded to the Tax Manager of the TMP at the address provided in the Operating Agreement-1.

333 N. Sam Houston Pkwy. E.

Suite 1160
Houston, Texas 77060
(713) 820-2481
Fax (713) 820-6054

May 15, 1996

Cheniere Energy Operating Co., Inc.
237 Park Avenue, Suite 2100
New York, NY 10017

Re: First Amendment

Gentlemen:

I am writing with respect to that certain Exploration Agreement dated April 4, 1996 by and between FX Energy, Inc. and Zydeco Exploration, Inc. (the "Agreement"). For convenience, terms defined therein shall have the same meaning when used herein.

The Agreement in Section 2 provides that FX shall deposit $3,000,000 to the segregated account on May 15, 1996. You have represented to us that you had instructed your bank today to wire $2,250,000 to the segregated account. You have requested an extension until the end of the business day on Friday, June 14, 1996 to wire the balance of $750,000. Based on your representations, ZEI agrees to your requested extension.

We both agree that a failure by FX to make the $750,000 contribution by June 14, 1996 shall be treated as a Discontinuance under Section 5. The Seismic Funds paid, in this instance, would be $2,250.000.

If I have correctly set forth our understandings, kindly so indicate by executing one counterpart of this letter and returning it to the undersigned.

Yours very truly,

ZYDECO EXPLORATION, INC.

By:  /s/ Sam B. Myers
     ---------------------------------------
Its:  President and Chief Executive Officer

ACCEPTED AND AGREED TO THIS
15th DAY OF MAY, 1996.

Cheniere Energy Operating Co., Inc., formerly FX Energy, Inc.

By:  /s/ William D. Foster
     ----------------------------------------
Its: President

EXHIBIT 10.3

333 N. Sam Houston Pkwy. E.

Suite 1160
Houston, Texas 77060
(713) 820-2481
Fax (713) 820-6054

August 5, 1996

Cheniere Energy Operating Co., Inc.
237 Park Avenue, Suite 2100
New York, NY 10017

Re: Second Amendment

Gentlemen:

I am writing with respect to that certain Exploration Agreement dated April 4, 1996, by and between FX Energy, Inc. and Zydeco Exploration, Inc., as amended by that certain First Amendment dated May 15, 1996 (the "Agreement"). For convenience, terms defined therein shall have the same meaning when used herein. FX Energy, Inc. has changed its name to Cheniere Energy Operating Co., Inc. ("FX"). We desire to amend the Agreement as follows:

1. FX did not make the payment of $1,000,000 to the segregated account which was due on June 30, 1996 under Section 2 of the Agreement. FX shall make the $1,000,000 payment originally due June 30, 1996 to the segregated account on or before August 9, 1996. A failure to make such a payment by such date shall, notwithstanding anything in the Agreement to the contrary, be treated as a Discontinuance under Section 5.

2. FX did not make the payment of $1,000,000 to the segregated account which was due on July 30, 1996. FX shall make the $1,000,000 payment originally due July 30, 1996 to the segregated account on or before October 31,1996. A failure to make such a payment by such date shall, notwithstanding anything in the Agreement to the contrary, be treated as a Discontinuance under
Section 5.

Cheniere Energy Operting Co., Inc.
August 5, 1996

3. It is the intent of the parties that no grace period apply to the payments required under this letter to be paid on August 9, 1996 and October 31, 1996.

4. The parties agree that the agreements by Zydeco to defer payments under Section 2 do not obligate Zydeco to grant further waivers nor waive the rights of Zydeco to have payments made at the times provided in the Agreement, as modified hereby.

If I have correctly set forth our agreements, kindly so indicate by executing one counterpart of this letter and returning it to the undersigned.

Yours very truly,

ZYDECO EXPLORATION, INC.

By:  /s/ Sam B. Myers, Jr.
     --------------------------------
Its:  Sam B. Myers, Jr., President

ACCEPTED AND AGREED TO THIS
8th DAY OF AUGUST, 1996.

Cheniere Energy Operating Co., Inc., formerly FX Energy, Inc.

By:  /s/ William D. Foster
     -----------------------------------
Its: President

EXHIBIT 10.4

CHENIERE ENERGY OPERATING CO., INC.
Two Allen Center
1200 Smith Street, 17th Floor
Houston, Texas 77002

As of June 14, 1996

To Each of the Purchasers Named on
Schedule A Hereto:

Ladies and Gentlemen:

Cheniere Energy Operating Co., Inc., a Delaware corporation (the "Company"), hereby agrees with you as follows:

SECTION 1. PURCHASE AND SALE OF SECURITIES

1.1 Description of Securities. The undersigned Purchasers hereby severally agree to purchase from the Company, and the Company agrees to sell to the Purchasers for a purchase price set forth on Schedule A hereto, totalling an aggregate purchase price of Four Hundred Twenty-Five Thousand Dollars ($425,000), such amount of the following securities (collectively, the "Securities") as set forth on Schedule A:

(a) $425,000 aggregate principal amount of promissory notes of the Company (individually, a "Note" and collectively, the "Notes"); and

(b) common stock purchase warrants (individually, a "Warrant" and collectively, the "Warrants") exercisable for an aggregate of 14.166667 shares of common stock, no par value, of the Company (the "Common Stock") and exchangeable for common stock purchase warrants exercisable for an aggregate of 141,666.67 shares of common stock, $.003 par value per share, of BEXY Communications, Inc. ("BEXY"), assuming consummation of the transactions contemplated by that certain Agreement and Plan of Reorganization dated as of April 16, 1996 by and among the Company and the stockholders of the Company, on the one hand, and BEXY and Buddy Young, on the other hand.

1.2 Terms of the Notes. The Company shall pay the principal amount of each Note plus interest on the unpaid principal balance in accordance with the terms and conditions of the Note, a form of which is attached as Exhibit A hereto.

1.3 Terms of the Warrants. Each Warrant shall be governed by a Warrant Agreement, a form of which is attached as Exhibit B hereto (the "Warrant Agreement").

SECTION 2. REPRESENTATIONS

2.1 Purchaser's Representations. Each Purchaser represents to the Company that you are authorized to enter into this Agreement and the Warrant Agreement, to perform your obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby. You further represent that you are purchasing the Securities to be purchased by you for your own account and with no intention of distributing or reselling such Securities or any part thereof, or any interest therein, in any transaction that would be in violation of the securities laws of the United States of America, or the securities laws of any applicable state thereof, without prejudice, however, to your right at all times to sell or otherwise dispose of all or any part of such Securities pursuant to an effective registration statement under the Securities Act of 1933 (the "Securities Act") and applicable state securities laws, or under an exemption from such registration available under the Securities Act and applicable state securities laws, and subject, nevertheless, to the disposition of your property being at all times within your control.

You further represent that either (i) you are an "accredited investor" within the meaning of Rule 501 under the Securities Act or (ii) by reason of your business and financial experience and the business and financial experience of those retained by you to advise you with respect to your investment in the Securities, you, together with such advisors, have such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment, and are able to bear the economic risk of such investment and, at the present time are able to afford a complete loss of such investment.

2.2 Company's Representations. The Company represents and warrants to you as follows:

(a) The Company is a corporation, duly organized and existing and in good standing under the laws of the State of Delaware and has full power and authority to enter into and to perform its obligations under this Agreement, the Warrant Agreements, the Warrants and the Notes and to issue the Securities (and any shares of Common Stock issuable upon exercise of the Warrants).

(b) The Company has taken all actions necessary to authorize it to enter into and perform its obligations under this Agreement, the Warrant Agreement, the Warrant and the Note and to consummate the transactions contemplated hereby and thereby. This Agreement, the Warrant Agreement, the Warrant and the Note are legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, subject, as to enforcement only, to bankruptcy, insolvency, reorganization, moratorium or similar laws at the time in effect affecting the enforceability of the rights of creditors generally.

(c) The authorized capital stock of the Company is 2,000 shares of Common Stock of which 825 shares of Common Stock is issued and outstanding. The Company has reserved twenty one (21) shares of Common Stock for issuance upon exercise of the Warrants. The shares of Common Stock issuable upon exercise of the Warrants have been duly authorized for issuance by the Company and, when issued and delivered against payment therefor as

contemplated by the Warrant Agreement to be executed by each Purchaser, will be validly issued, fully paid and non-assessable, free and clear of all liens, claims and other encumbrances.

(d) The offer and sale of the Securities hereunder is exempt from the registration requirements of the Securities Act either pursuant to Section 4(2) thereof or Regulation D promulgated thereunder.

SECTION 3. EVENTS OF DEFAULT

3.1 The term "Event of Default" shall mean any of the following events:

(a) The Company shall default in the payment when due of any principal of or interest on any Note; or

(b) The Company shall (x) become insolvent or generally fail to pay, or admit in writing its inability to pay, its debts as they become due, (y) apply for, consent to or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for a substantial part of the property of the Company and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days or (z) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and if such case or proceeding is not commenced by the Company or shall result in the entry of an order for relief or shall remain for 60 days undismissed.

3.2 If any Event of Default described in clause (a) shall occur and be continuing, the holders of the Notes may, upon notice or demand, declare all or any portion of the outstanding principal amount of the Notes to be due and payable and if any Event of Default described in clause (b) shall occur, the outstanding principal amount of all outstanding Notes shall automatically be and become immediately due and payable, without notice or demand.

SECTION 4. PENALTIES FOR NON-PAYMENT

If the Company shall not have paid all principal and accrued and unpaid interest on the Notes on the date on which such is due, the holders of Notes shall be entitled to receive, in addition to all amounts otherwise payable with respect to the Notes, a late charge equal to five percent (5%) per annum of the total amount due and shall be entitled to receive additional Warrants to purchase three (3) additional shares of Common Stock for each month or partial month in which payment in full is not made up to a total additional amount of twelve (12) shares of Common Stock, having the same exercise period measured from the date of issuance of each Warrant and the same exercise price as set forth in the Warrant Agreement. The additional Warrants shall be allocated pro rata to the holders of Notes in accordance with the percentage (rounded to the nearest ten thousandth) that the principal amount of the Note(s) held by each holder bears to the total principal amount of all outstanding Notes.

SECTION 5. MISCELLANEOUS

5.1 All notices and other communications provided for or permitted hereunder shall be made by hand delivery, first class mail postage prepaid or telecopier:

(a) if to a Purchaser at the address set forth on Schedule A hereto;

(b) if to the Company at its address set forth on the first page of this Agreement with a copy to Whitman Breed Abbott & Morgan, 200 Park Avenue, New York, New York, Attention: Robert C. Brighton, Jr., Esq.

All such notices and communications shall be deemed to have been duly given: when delivered, if personal delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied.

5.2 This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties.

5.3 This Agreement and the Warrant Agreements, Warrants and Notes may be amended, modified or supplemented with the consent of each of the parities to the respective agreements, instruments or other documents.

5.4 This Agreement may be signed in counterparts, each of which shall be deemed and original and all of which taken together shall be deemed one and the same agreement.

5.5 This Agreement shall be governed by and construed in accordance with the laws of the State of New York (without giving effect to the conflict of law provisions thereof).

5.6 This Agreement, together with the Warrant Agreements, Warrants and Notes, are intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.

5.7 If any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affect, it being intended by the parties that the rights and privileges of the parties hereunder shall be enforceable to the fullest extent permitted by law.

If this Agreement is satisfactory to you, please complete and sign Schedule A to indicate your acceptance, which Schedule A shall constitute a counterpart of this Agreement, and returning such counterpart to the Company whereupon this Agreement will become binding between us in accordance with its terms.

Very truly yours,

CHENIERE ENERGY OPERATING CO., INC.

By: ______________________________________
Name: William D. Forster
Title: President

SCHEDULE A

NAME AND ADDRESS OF PRINCIPAL NO. OF PURCHASE
PURCHASERS AMOUNT OF NOTE WARRANTS PRICE

Name:
Address:

Fax No.:
Tel. No.:

Signature

Date: June 14, 1996

EXHIBIT A

PROMISSORY NOTE

$______________

FOR VALUE RECEIVED, the undersigned, CHENIERE ENERGY OPERATING CO., INC., a corporation, organized under the laws of Delaware (hereinafter called the "Maker"), promises to pay to the order of _________________ (the "Lender"), or its successors or assigns, by payment to Lender, at ________________________ ____________________________________________________________ or at such other place as the holder hereof may from time to time designate in writing, the principal sum of ______________________________________ ($______________), plus interest on the principal balance thereof from time to time outstanding at a rate which is at all times eight percent (8%) per annum, on that date which is ninety (90) days from the date hereof, when the entire principal balance hereof, all accrued and unpaid interest thereon and all other applicable fees, costs and charges, if any, shall be due and payable in full. Interest hereon shall be calculated on the basis of the actual number of days elapsed in a 360-day year. All payments of principal and/or interest hereon shall be payable in lawful money of the United States and in immediately available funds.

In the event that any payment of principal and/or interest is not actually received by the holder hereof within ten (10) days of the date such payment is due, the Maker agrees to pay a late charge of an amount equal to five percent (5%) per annum of the outstanding principal amount, calculated on the basis of the actual number of days elapsed in a 360-day year, in addition to interest as set forth above.

All payments received hereon shall be applied first to late charges, if any, then to interest and then to principal.

This Note may be prepaid, in whole or in part, at any time without penalty. Any partial prepayments shall not, however, relieve the Maker of the obligation to pay principal and/or interest hereunder as and when the same would otherwise fall due.

Maker hereby (i) waives presentment, demand, protest and notice of presentment, notice of protest and notice of dishonor of this debt and each and every other notice of any kind respecting this Note, (ii) agrees that the holder hereof, at any time or times, with notice to it and its consent, may grant extensions of time, without limit as to the number or the aggregate period of such extensions, for the payment of any principal and/or interest due hereon, and (iii) to the extent not prohibited by law, waives the benefit of any law or rule of law intended for its advantage or protection as an obligor hereunder or providing for its release or discharge from

liability hereon, in whole or in part, on account of any facts or circumstances other than full and complete payment of all amounts due hereunder.

The Maker promises to pay all costs of collection, including reasonable attorneys' fees, upon default in the payment of the principal of this Note or interest hereon when due, whether at maturity, as herein provided, or by reason of acceleration of maturity under the terms hereof, whether suit be brought or not.

This Note is one of the Notes contemplated by that certain agreement dated as of June 14, 1996 (the "Agreement") between the Maker and the holder. This Note incorporates by reference the terms of the Agreement, including, but not limited to, the terms thereof relating to Events of Default.

In the event any one or more of the provisions contained in this Note or the Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Note, but this Note shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.

This Note may not be changed orally, but only by an agreement in writing signed by the parties against whom enforcement of any waiver, change, modification or discharge is sought.

The Maker warrants and represents that the loan evidenced hereby is being made for business or investment purposes.

This Note shall be governed in all respects by the laws of the State of New York and shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns (without giving effect to the conflict of law provisions thereof).

Any judicial proceeding brought against Maker on any dispute arising out of this Note or any matter related hereto may be brought in the courts of the State of New York in New York City, or in the United States District Court of the Southern District of New York, and, by execution and delivery of this Note, Maker accepts for itself the exclusive jurisdiction of the aforesaid courts, waives any objections to such jurisdiction on the grounds of venue of forum non conveniens and any similar grounds, consents to service of process by mail or in any other manner permitted by law, and irrevocably agrees to be bound by any judgment rendered thereby in connection with this Note.

Maker waives all right to trial by jury in any action, suit or proceeding brought to enforce or defend any right or remedies under this Note, whether sounding in contract or tort or otherwise.

[Corporate Seal]

ATTEST:                             By:___________________________
                                      Name:  William D. Forster
                                      Title:  President

By:________________________________

EXHIBIT B

WARRANT AGREEMENT

WARRANT AGREEMENT (this "Agreement") is made as of June 14, 1996 by and between CHENIERE ENERGY OPERATING CO., INC., a Delaware corporation ("the Company"), and _____________________ (the "Holder").

PRELIMINARY RECITALS

A. The Company desires to issue to Holder a right to purchase shares of common stock, no par value per share (the "Common Stock"), of the Company in consideration of value received by the Company from Holder, as set forth in that certain agreement dated as of June 14, 1996 (the "Purchase Agreement") between the Company and the Holder with respect to the purchase by Holder of a promissory note and common stock purchase warrant of the Company.

B. Holder desires to participate in the future growth prospects of the Company and is willing to accept and receive a right to purchase shares of Common Stock of the Company, 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. GRANT OF WARRANT. The Company hereby grants to Holder a warrant to purchase up to ____________ shares of Common Stock at the purchase price of ________ 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").

2. 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.

3. 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.

4. 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.

5. 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 Act 1933 ("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 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.

6. EXCHANGE FOR BEXY WARRANTS. Holder agrees to exchange this Warrant for a warrant to purchase shares of common stock, $.003 par value per share ("BEXY Stock"), of BEXY Communications, Inc. ("BEXY") at the closing (the "Closing") of the reorganization of BEXY contemplated by that certain Agreement and Plan of Reorganization dated as of April 16, 1996 ("Reorganization Agreement") among the Company, the stockholders of the Company, BEXY and Buddy Young. At the Closing, Holder shall present and deliver the Warrant, together with a properly completed assignment, to BEXY and, upon execution and delivery of a warrant agreement between Holder and BEXY, receive a warrant to purchase BEXY Stock (the "BEXY Warrant"). The BEXY Warrant received by Holder shall be exercisable for ten thousand (10,000) shares of BEXY Stock for each share of Common Stock for which the Warrant may be exercised. The purchase price for each share of BEXY stock shall be $3 per share and shall have the same Exercise Period as the Warrant and other terms that are substantially the same as the Warrant.

7. 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.

8. 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.

9. 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.

10. 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 one millionth of a share (.000001). The Company shall not be under any obligation to compensate the Holder in any way for fractional shares in less than such amounts.

11. 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, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

12. 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.

13. 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.

14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon any and all successors and assigns of the parties.

15. 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.

16. 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.

17. NOTICES. Any notices or other communications required or permitted hereunder shall be given in the manner set forth in the Purchase Agreement.

IN WITNESS WHEREOF the parties have executed this Agreement as the date first written above.

CHENIERE ENERGY OPERATING CO., INC.

By__________________________________
Name: William D. Forster
Title: President

HOLDER

By:_________________________________
Name:

Exhibit A (to Cheniere Energy Operating Co., Inc. Warrant Agreement)

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 OPERATING CO., 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.: Up to ___ Share

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 Operating Co., 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 the Company, the Stockholders of the Company listed on Schedule A to the Reorganization Agreement, BEXY Communications, Inc. ("BEXY") and Buddy Young 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 Agreement and Section 7 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 (l) 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. Upon exchange for a BEXY Warrant, the form of assignment attached hereto must be properly completed and executed and surrendered to BEXY.

The warrant price per share (hereinafter called the "Warrant Price") shall be $30,000. 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 one millionth of a share (.000001).

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.

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 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, hereunto duly authorized, as of this 14th day of June, 1996.

CHENIERE ENERGY OPERATING CO., INC.

By:______________________________________
William D. Forster
President

Annex 1

PURCHASE FORM

Dated _____________, 19_____

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

Name________________________________________________________

(Please typewrite or print in block letters)

Address_____________________________________________________

Signature___________________________________________________

Annex 2

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, to transfer the same on the books of the Company with full power of substitution in the premises.

Date______________, 19__

Signature___________________________________________________

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, to transfer the same on the books of the Company with full power of substitution in the premises.

Date June 14, 1996

Signature _____________________________________________________

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

Address 16661 Venture Boulevard, Suite 214, Encino, California

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, to transfer the same on the books of the Company with full power of substitution in the premises.

Date July 3, 1996

Signature________________________________________________

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").

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 Buddy Young, 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").

C. Holder 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 Act 1933 ("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

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,

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 Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002
Attn: Mr. William D. Forster
Fax: (713) 659-5459

with a copy to:

Whitman Breed Abbott & Morgan
200 Park Avenue
New York, NY 10166
Attn: Robert C. Brighton, Jr., Esq.
Fax: (212) 351-3131

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: William D. Forster
Title: President

HOLDER

By:______________________________________
Name:

Address:

tel:
fax:

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 Buddy Young 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

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.

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: ____________________________
William D. Forster
President

EXHIBIT 10.6

ASSET TRANSFER, ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSET TRANSFER, ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") is made and entered into the 16th day of April, 1996, by and between Bexy Communications, Inc. a Delaware corporation ("Assignor"), and Mar Ventures Inc., a Delaware corporation ("Assignee").

RECITALS

WHEREAS, Assignor is a company engaged in the media business (the "Business");

WHEREAS, Assignor has entered into a certain Agreement and Plan of Reorganization dated as of April 16, 1996 (the "Reorganization Agreement") by and among Assignor, Cheniere Energy Operation Co., Inc. ("Cheniere"), the stockholders of Cheniere and Buddy Young, pursuant to which Assignor will effect a reorganization (the "Reorganization") of the management, business, capital structure and operations of Assignor;

WHEREAS, in connection with the Reorganization, Assignor contemplates acquiring the business of a company engaged in the oil and gas exploration business;

WHEREAS, it is contemplated by the Reorganization Agreement, that Assignor transfer all of its assets to Assignee and that Assignee assume all of the liabilities of Assignor, including but not limited to, its obligations under the Reorganization Agreement;

WHEREAS, Assignor has formed Assignee to receive the transfer of and hold Assignor's assets (the "Assets") and operate the Business; and

WHEREAS, the parties desire to set forth the terms of the transfer and assumption herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1.1 Transfer and Assignment of Assets. Assignor hereby grants, conveys, assigns and transfers to Assignee all of its right, title and interest in and to all of the Assets, including, but not limited to, the following:

1.1.1 Intellectual Property. All of those trademarks' trade names, copyrights, service marks, licenses or patents listed in the Schedule of Patents, Copyrights and Trademarks attached hereto as Exhibit A and incorporated herein by referenced (the "Intellectual Property");

1.1.2 Personal Property. All of those items of furniture, fixtures, all associated production equipment and other equipment, computer equipment, hardware and other tangible personal property listed on the Schedule of Personal Property attached hereto as Exhibit B and incorporated herein by reference (the "Personal Property");

1.1.3 Program Agreements. All of the Assignor's right, title and interest in and to those certain production and distribution agreements and contracts (the "Agreements") related to the attached hereto as Exhibit C and incorporated herein by reference;

1.1.4 Equipment Leases. All of Assignor's right, title and interest as lessee in and to those certain equipment leases for leased equipment owned by Assignor listed on the Schedule of Equipment Leases attached hereto as Exhibit D and incorporated herein by reference (the "Equipment Leases");

1.1.5 Contracts, Accounts Receivable and Inventory. Any contracts, accounts receivable and inventory of Assignor relating exclusively to the Business attached hereto as Exhibit E (the "Contracts");

1.1.6 All Other Assets. All of the other assets of Assignor described in Exhibit F and incorporated herein by reference whether or not specifically referred to in any of the preceding paragraphs of this Section 1.

1.2 Assumption of Liabilities. Assignee accepts the grant, conveyance, assignment and transfer of the Assets as provided in Section 1.1 and in exchange for Assignor's transfer of Assets, the Assignee agrees to irrevocably and unconditionally assume all of the liabilities (including taxes) of Assignor with respect to the Business or any of the Assets, including, but not limited to, each of those liabilities described on the list attached as Exhibit G and incorporated herein by reference (the "Assumed Liabilities"). The Assignor does not have in effect:

1.2.1 any collective bargaining agreements; or

1.2.2 any employee benefit plan as defined in ERISA.

2. CONSIDERATION. In consideration for the transfer of the Assets and the assumption of Assumed Liabilities of the Business, Assignee shall issue 452,000 of its shares of common stock to Assignor.

3. NO FURTHER CONVEYANCE NECESSARY. This Agreement shall effectively assign, transfer and convey all of the interest in the Assets from Assignor to Assignee without any further documents of conveyance. Likewise, this Agreement shall fully evidence the assumption of all of the Assumed Liabilities by Assignee without any further instrument of conveyance or assumption.

4. REPRESENTATIONS OF ASSIGNOR. Assignor represents and warrants as follows as of the date hereof:

4.1 Organization, etc. Assignor is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the corporate powers necessary to own its property and to carry on its business as now conducted and as proposed to be conducted.

4.2 Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Assignor. This Agreement constitutes the valid and binding obligation of Assignor, enforceable against it in accordance with its terms.

4.3 No Breach. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not violate, result in any breach of, or constitute a default under (i) Assignor's Certificate of Incorporation or Bylaws, (ii) any material agreement to which Assignor is a party or by which Assignor is bound, (iii) any order, judgment, injunction or decree of any court, arbitrator or governmental agency binding upon Assignor or by which any of its material assets are bound or (iv) any law, rule or regulation applicable to Assignor.

4.4 Tax and Other Returns and Reports. Except as set forth in Schedule of Assumed Liabilities in Exhibit G, delivered concurrently herewith,
(i) all tax returns and tax reports required to be filed by Assignor have been filed with the appropriate governmental agencies in all jurisdictions in which such returns and reports are required to be filed and where failure to file would materially and adversely effect Assignor, (ii) all

government income, franchise, property and other taxes paid or chargeable to the operation of Assignor in accordance with its normal initial accounting and operational procedure (including interest and penalties) (x) have been fully paid or (y) are being contested in good faith by appropriate proceedings and are not material to Assignor and (iii) no issues have been raised or are currently pending by the IRS or any other governmental taxing authority in connection with any of the returns and reports referred to in the foregoing clause (i) which, individually or in the aggregate, might have a material adverse effect on Assignor and (iv) no waivers of the applicable statue of limitations have been executed.

4.5 Title to Property. Assignor will transfer to Assignee on the date hereof good and marketable title to the Assets, free and clear of mortgages, pledges, charges, encumbrances, equities, claims, covenants, conditions or reclaims, except for matters that, in the aggregate are not substantial in amount and do not materially detract from or interfere with the present or intended use of any of the Assets, or materially impair the Business (other than the Assumed Liabilities).

4.6 Effect of Representations. The representations and warranties of Assignor set forth in Section 3 are made solely for the purpose of this Agreement and shall not (i) survive the consummation of the transactions contemplated by this Agreement, (ii) inure to the benefit of, or be enforceable by or against, either the successors or permitted assigns of the parties hereto or any other person, or (iii) give rise to any action or claim against Assignor, including, without limitation, any action for negligent misrepresentation.

5. INDEMNIFICATION. The Assignor and Assignee agree to indemnify and hold harmless each other as follows:

5.1 Assignor shall indemnify, defend and hold harmless Assignee from any and all loss, cost, expense and liability (including attorneys' fees) incurred in connection with any claim or asserted claim which may be made against Assignee and which arises directly or indirectly from any breach of this Agreement by Assignor.

5.2 Assignee shall indemnify, defend and hold harmless Assignor from any and all loss, cost, expense and liability (including attorneys' fees) incurred in connection with any claim or asserted claim which may be made against Assignor and which arises directly or indirectly from any breach of this Agreement by Assignee.

5.3 Promptly after receipt of notice of the commencement of any action in respect of which indemnity may be sought against either party hereunder, the indemnified party will notify the other party in writing of the commencement thereof and the other party shall, subject to the provisions stated below, assume the defense of such action (including the employment of counsel, who shall be counsel reasonably satisfactory to the indemnified party and shall not be counsel to the other party), and the payment of expenses insofar as such action shall relate to any alleged liability in respect of which indemnity as available. The indemnified party shall have the right to employ separate counsel in any action and to participate in the defense thereof, but the fees and expenses of its counsel shall not be at the expense of the other party unless the employment of that counsel has been specifically authorized by the other party.

6. ACCESS TO INFORMATION. Assignor and Assignee and each of their counsel, accountants and other representatives shall have full access during normal business hours to all properties, books, accounts, records, contracts and documents of or relating to the business of each other, and each of Assignor and Assignee shall furnish to each other and his representatives all information concerning the business, finances and properties of the other, that may reasonably be requested in connection with the transactions contemplated hereby. Assignor and Assignee will treat all information so obtained as confidential and preparation to this Agreement.

7. DISTRIBUTION OF ASSIGNEE SHARES. It is contemplated that such shares shall be distributed by Assignor to its stockholders or record as of May 15, 1996, subject to approval of such distribution by the stockholders of Assignor at a special meeting of stockholders to be called to approve the Reorganization and the Closing as described in the Reorganization Agreement.

8. REPRESENTATIONS OF ASSIGNEE. Assignee represents and warrants as follows:

8.1 Organization, etc. Assignee is a corporation duly organized and validly existing under the laws of the State of Delaware and has the corporate powers necessary to own its property and carry on its business as proposed to be conducted.

8.2 Authorization. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Assignee. This Agreement constitutes the valid and binding

obligation of Assignee, enforceable against it in accordance with its terms.

8.3 No Breach. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not violate
(i) the Certificate of Incorporation or Bylaws of Assignee, (ii) any material agreement to which Assignee is a party or by which Assignee is bound, (iii) any order, judgment, injunction or decree of any court, arbitrator or governmental agency binding upon Assignee or by which any of its material assets are bound or
(iv) any law, rule or regulation applicable to Assignee.

8.4 Effect of Representations. The representations and warranties of Assignee set forth in paragraphs 8.1, 8.2 and 8.3 are made solely for the purpose of this Agreement and shall survive the consummation of the transactions contemplated by this Agreement, and inure to the benefit of, or be enforceable by, either the successors or permitted assigns of Assignor.

9. MISCELLANEOUS.

9.1 Assignment. No assignment or transfer of any interest, right or obligation of any party hereunder shall be allowed without the prior written consent of all parties to this Agreement.

9.2 Amendments. This Agreement may not be amended, supplemented or otherwise modified except in writing signed by or on behalf of each party hereto.

9.3 Severability. In the event that any provision of this Agreement shall be held to be invalid, illegal or unenforceable, in whole or in part, such invalidity, illegality or unenforceability shall not in any way whatsoever affect the validity of the other provisions of this Agreement and such other provisions shall remain in full force and effect.

9.4 Further Assurances. Each of the parties hereto agrees that, from and after the date hereof upon the reasonable request of the other party hereto and without further consideration, such party shall execute and deliver to such other party such documents and shall take such other actions as such other party may reasonably request in order to carry out the purposes and intentions of this Agreement, including, without limitation, the vesting in Assignee of the title to the Assets in accordance with such terms of this Agreement and the correction of related errors and defects.

9.5 Governing Law. This Agreement shall be governed by the laws of the State of Delaware.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

ASSIGNOR:

BEXY COMMUNICATIONS, INC.,
a Delaware corporation

By:  /s/Buddy Young
     ---------------------
Its:  President

ASSIGNEE:

MAR VENTURES, INC.,
a Delaware corporation

By:  /s/ Buddy Young
     ---------------------
Its:  President

SCHEDULE OF PATENTS, COPYRIGHTS AND TRADEMARKS

SCHEDULE OF PROGRAM AGREEMENTS

SCHEDULE OF EQUIPMENT LEASES

CONTRACTS

SCHEDULE OF OTHER ASSETS

SCHEDULE OF ASSUMED LIABILITIES

1. ALL LIABILITIES AS SHOWN ON BEXY'S FEBRUARY 29, 1996, FORM 10-QSB.

2. ALL ACCOUNTS PAYABLE, OBLIGATIONS AND ACCRUED COSTS RELATING TO THE OPERATION OF BEXY'S BUSINESS DURING THE PERIOD OF MARCH 1, 1996, THROUGH THE CLOSING (AS DEFINED IN THE REORGANIZATION AGREEMENT).

3. ALL OBLIGATIONS OF BEXY UNDER THAT CERTAIN AGREEMENT AND PLAN OF REORGANIZATION.

EXHIBIT 10.7

INDEMNIFICATION AGREEMENT (this "Agreement") made as of July 3, 1996, by BUDDY YOUNG, an individual having an address at 16661 Ventura Boulevard, Suite 214, Encino, California 91436 ("Young"), in favor of Cheniere Energy Operating Co., Inc. ("Cheniere"), a corporation formed and existing under the laws of the State of Delaware, having an address at Two Allen Center, 1200 Smith Street, Suite 1710, Houston, Texas 77002; the Stockholders of Cheniere listed on Schedule A attached to the Reorganization Agreement (as defined below) (collectively, the "Cheniere Stockholders"); and Cheniere Energy, Inc. (f/k/a BEXY Communications, Inc.), a corporation formed and existing under the laws of the State of Delaware (the "Company"), having an address at Two Allen Center, 1200 Smith Street, Suite 1710, Houston, Texas 77002. Capitalized terms used herein without definition shall have the same meanings as ascribed to them in the Reorganization Agreement (as defined below).

WHEREAS, the parties have entered into a certain Agreement and Plan of Reorganization dated April 16, 1996 (the "Reorganization Agreement"), pursuant to which, prior to or concurrently with the execution and delivery of this Agreement, among other things, (i) the Company has assigned and transferred substantially all of the assets and business of the Company, subject to liabilities, to Mar Ventures, Inc. ("Newco") and distributed the shares of Newco to its stockholders (the "Divestiture") and (ii) the Cheniere Stockholders have exchanged their Cheniere Shares for shares of the BEXY Stock; and

WHEREAS, in order to obtain the approval of the stockholders of the Company to the Reorganization and to register the stock of Newco under the Securities Exchange Act of 1934 (the "Exchange Act"), the Company has caused to be prepared and filed with the Securities and Exchange Commission (the "SEC") the Proxy Materials and the Registration Statement, respectively; and

WHEREAS, in order to induce Cheniere and the Cheniere Stockholders to enter into the Reorganization Agreement, Young has agreed to indemnify the Company, Cheniere and the Cheniere Stockholders from and against certain Claims (as hereinafter defined) described below; and

WHEREAS, it is in the interest and to the direct or indirect benefit of Young and the stockholders of the Company for Cheniere and the Cheniere Stockholders to enter into the Reorganization Agreement and consummate the Acquisition and the other transactions contemplated by the Reorganization Agreement.

NOW, THEREFORE, in consideration of TEN DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Young agrees as follows:

1. INDEMNIFICATION. (a) Young unconditionally and irrevocably indemnifies and agrees to indemnify and hold harmless the Company, Cheniere and the Cheniere Stockholders and their respective officers, directors, attorneys and other agents (the "Cheniere Indemnified Parties") from and against all Claims (as hereinafter defined) which any Cheniere Indemnified Party may suffer, incur, or pay arising under or incurred in connection with (i) the operation of the business of the Company prior to the Closing, (ii) any error or omission with respect to a material fact stated or required to be stated in the Proxy Materials or the Registration Statement with respect to the Company prior to the Closing and (iii) any Taxes (as defined below) (individually, a "Claim" and collectively, the "Claims").

(b) The indemnity given by the Indemnitor is a guaranty to pay fully and promptly all sums due with respect to any and all Claims and is not a guaranty of collection only. None of the Company, Cheniere and the Cheniere Stockholders shall be required to exhaust any right or remedy or take any action against any other person or any collateral. All suretyship defenses that Young has or may have under applicable law are hereby expressly waived and relinquished by Young. Without limiting any of the foregoing, Young hereby waives presentment, notice of dishonor, nonperformance or nonpayment, protest and notice of protest, any other notice of every kind or nature and diligence in bringing suit or taking any other action on account of nonpayment of any Claim, and consents to any modification, amendment or addition to the Reorganization Agreement and agrees that notwithstanding any such modification, amendment or addition, this Agreement shall remain in full force and effect in all respects. Further, and without limiting any of the foregoing, Young further waives the benefit of any statute of limitations affecting Young's liability under this Agreement or the enforcement thereof for so long as the underlying obligation is subject to being enforced, and Young agrees that any payment of any amounts due with respect to any Claims or other act which shall toll any statute of limitations applicable thereto shall similarly operate to toll the statute of limitations applicable to Young's liability under this Agreement. Young warrants and agrees that each of the foregoing waivers are made with Young's full knowledge of their significance and consequences, and that under the circumstances, the waivers are reasonable and not contrary to public policy or law. If any of said waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by law. Young hereby agrees to the jurisdiction of any court in which jurisdiction is obtained against Young with respect to any Claim. Young acknowledges that there are no conditions precedent to the effectiveness of this Agreement, and this Agreement is in full force and effect and is binding on Young as of the date hereof.

(c) For purposes of this Agreement, "Tax" or "Taxes" means all United States federal, state, local or foreign income, profits, franchise, sales, property, excise, value added, estimated, stamp, alternative or add-on minimum, environmental, withholding, and other taxes, assessments, duties, fees and governmental charges or impositions of each and every kind, together with all interest, penalties, and additions imposed with respect to such amounts, arising as the result of or incurred in connection with the consummation of the transactions contemplated by the Divestiture, including, without limitation, the assignment

and transfer of any asset to, or assumption of any liability by, Newco or the distribution of any shares of Newco or the business of the Company prior to the Closing Date or Newco after the Closing Date.

(d) Notwithstanding the foregoing, the estate of Buddy Young shall have no liability under this Agreement.

2. FURTHER ASSURANCES. Young shall take such actions and sign and deliver such other instruments and documents as may be reasonable, necessary or appropriate to effectuate its fulfillment of the obligations described in this Agreement.

3. AMENDMENT. No modification, waiver or termination of this Agreement, or any part hereof, shall be effective unless made in writing and signed by Young, the Company, Cheniere and the Cheniere Stockholders in each instance. Receipt by any party of any money or other consideration due under this Agreement, with or without knowledge, shall not constitute a waiver of any provision of this Agreement.

4. ENTIRE AGREEMENT. This Agreement, together with any Exhibits and Schedules hereto, constitutes the entire agreement between Young, the Company, Cheniere and the Cheniere Stockholders with respect to the subject matter hereof and supersedes all prior agreements or understandings, or communications of Young, the Company, Cheniere and the Cheniere Stockholders relating thereto.

5. WAIVER; REMEDIES. No delay on the part of the Company, Cheniere, the Cheniere Stockholders or Young in exercising any right, power, privilege, or remedy hereunder shall operate as a waiver thereof or as a waiver of any other right, power, privilege, or remedy hereunder, nor shall any single or partial exercise of any right, power, privilege or remedy hereunder preclude any other or future exercise hereunder. The rights and remedies herein provided are cumulative and are not exclusive of any rights or remedies which Cheniere, the Cheniere Stockholders, the Company or Young hereto may otherwise have at law or in equity.

6. 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 paragraph 7:

If to Young:

c/o BEXY Communications, Inc.
16661 Ventura Boulevard, Suite 214 Encino, CA 91436
Attn: Mr. Buddy Young, President & CEO Fax: (818) 784-8660

With a copy to:

Hand & Hand
24901 Dana Point
Harbor Drive, Suite 200
Dana Point, CA 92629
Attn: Jehu Hand, Esq.
Fax: (714) 489-0034

If to the Company, Cheniere or the Cheniere Stockholders:

Cheniere Energy, Inc.
Two Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002
Attn: Mr. William D. Forster
Fax: (713) 659-5459

with a copy to:

Whitman Breed Abbott & Morgan
200 Park Avenue
New York, NY 10166
Attn: Robert C. Brighton, Jr., Esq. Fax: (212) 351-3131

7. CAPTIONS. Paragraph titles or captions contained in this Agreement are listed only as a matter of convenience and for reference, and shall not be construed in any way to define, limit, extend or describe the scope of this Agreement or the intention of the provisions thereof.

8. SEVERABILITY. The invalidity of any one or more provisions hereof or of the Reorganization Agreement shall not affect the remaining portions of this Agreement or of the Reorganization Agreement, all of which are inserted conditionally on their being held valid in law; and if one or more of the provisions contained herein or therein should be valid, or should operate to render this or the Agreement invalid, this Agreement and Reorganization Agreement shall be construed as if such invalid provisions had not been inserted.

9. SURVIVAL. The obligations of Young hereunder shall survive the consummation of the transactions contemplated by the Reorganization Agreement for a period of three years.

IN WITNESS WHEREOF, Young has executed this Agreement as of the date set forth on the first page of this Agreement.

By:/s/ Buddy Young
   ------------------------------
   Buddy Young

ACKNOWLEDGED AND ACCEPTED:

CHENIERE ENERGY OPERATING CO., INC.

By:/s/ William D. Forster
   ------------------------------
 Name:   William D. Forster
 Title:  President

CHENIERE ENERGY, INC.
(F/K/A BEXY COMMUNICATIONS, INC.)

By:/s/ William D. Forster
   ------------------------------
 Name:   William D. Forster
 Title:  President

EXHIBIT 10.8

WARRANT AGREEMENT

WARRANT AGREEMENT (this "Agreement") is made as of August 21, 1996 by and between CHENIERE ENERGY, INC., a Delaware corporation ("the Company"), and BLAIR FOSTER & CO., INC. (the "Holder").

A. In consideration for investment advisory and other services provided to the Company, the Company has agreed to grant to Holder a common stock purchase warrant entitling Holder and its permitted assigns to purchase, on the terms and subject to the conditions set forth below, shares of the common stock, $.003 par value per share, of the Company (the "Common Stock").

B. Holder is willing to accept the Warrant (as hereinafter defined) as consideration for its services to the Company, 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. GRANT OF WARRANT. The Company hereby grants to Holder a warrant to purchase up to 13,600 shares (the "Warrant Shares") of Common Stock 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").

2. 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 May 15, 1999.

3. 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.

4. 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.

5. 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 Act 1933 ("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 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

12. 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.

13. 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.

14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon any and all successors and assigns of the parties.

15. 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.

16. 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.

17. 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 17:

If to Holder at the address set forth on the signature page of this Agreement.

If to the Company:

Cheniere Energy, Inc.
Two Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002
Attn: Mr. William D. Forster
Fax: (713) 659-5459

IN WITNESS WHEREOF the parties have executed this Agreement as the date first written above.

CHENIERE ENERGY, INC.

By:__________________________________ Name: William D. Forster Title: President

BLAIR FOSTER & CO., INC.

By:__________________________________
Name:
Title:

Address: ____________________________

Tel: ________________________________

Fax: ________________________________

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.

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-12 Up to 13,600 Shares

THIS CERTIFIES THAT for value received BLAIR FOSTER & CO., INC. (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 May 15, 1999, the number of fully paid and non-assessable shares of Common Stock, $.003 par value per share (the "Common Stock"), of Cheniere Energy, 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.

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.

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 21st day of August, 1996.

CHENIERE ENERGY, INC.

By: ______________________________
William D. Forster
President

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 $_______.

Name________________________________________________________

(Please typewrite or print in block letters)

Address_____________________________________________________

Signature___________________________________________________

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___________________________________________________

WARRANT AGREEMENT

WARRANT AGREEMENT (this "Agreement") is made as of August 21, 1996 by and between CHENIERE ENERGY, INC., a Delaware corporation ("the Company"), and REDLIW CORP. (the "Holder").

C. In consideration for investment advisory and other services provided to the Company, the Company has agreed to grant to Holder a common stock purchase warrant entitling Holder and its permitted assigns to purchase, on the terms and subject to the conditions set forth below, shares of the common stock, $.003 par value per share, of the Company (the "Common Stock").

D. Holder is willing to accept the Warrant (as hereinafter defined) as consideration for its services to the Company, 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. GRANT OF WARRANT. The Company hereby grants to Holder a warrant to purchase up to 54,400 shares (the "Warrant Shares") of Common Stock 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").

2. 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 May 15, 1999.

3. 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.

4. 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.

5. 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 Act 1933 ("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 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.

6. 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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Agreement.

12. 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.

13. 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.

14. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon any and all successors and assigns of the parties.

15. 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.

16. 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.

17. 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 17:

If to Holder at the address set forth on the signature page of this Agreement.

If to the Company:

Cheniere Energy, Inc.
Two Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002
Attn: Mr. William D. Forster
Fax: (713) 659-5459

IN WITNESS WHEREOF the parties have executed this Agreement as the date first written above.

CHENIERE ENERGY, INC.

By:___________________________________ Name: William D. Forster Title: President

REDLIW CORP.

By:___________________________________
Name:
Title:

Address:______________________________

Tel:__________________________________

Fax:__________________________________

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.

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-13 Up to 54,400 Shares

THIS CERTIFIES THAT for value received REDLIW CORP. (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 May 15, 1999, the number of fully paid and non-assessable shares of Common Stock, $.003 par value per share (the "Common Stock"), of Cheniere Energy, 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.

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.

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 21st day of August, 1996.

CHENIERE ENERGY, INC.

By:______________________________
William D. Forster
President

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 $_______.

Name________________________________________________________

(Please typewrite or print in block letters)

Address_____________________________________________________

Signature___________________________________________________

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___________________________________________________

EXHIBIT 10.9

CONSULTING AGREEMENT (this "Agreement"), made as of the 3rd day of July, 1996, by and between CHENIERE ENERGY, INC. (f/k/a BEXY Communications, Inc.), a Delaware corporation (the "Company"), and BUDDY YOUNG, an individual ("Consultant").

WHEREAS, Consultant is experienced in the management and operation of a public companies; and

WHEREAS, the Company desires to engage the Consultant to provide management of the Company with certain advice regarding the management and business of the Company, upon the terms and subject to the conditions set forth below.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

The Company hereby agrees to retain Consultant as a consultant to the management of the Company and Consultant hereby accepts and agrees to serve in such capacity, for a period of two (2) years commencing as of the date hereof unless sooner terminated as herein provided (the "Term").

(a) Consultant shall make himself available for consultation with the management of the Company concerning the business and operation of the Company and shall agree to provide consultation and advice with respect to such other matters as the Company may request. Such services shall be performed by Consultant only after the Company has made a specific request therefor.

(b) Consultant may perform his duties hereunder by use of telephone, telefax or other means of telecommunication. Consultant shall not be required to maintain a physical presence at the Company's offices, but shall be required to use his reasonable best efforts to attend meetings of the Board of Directors of the Company in person or by telephone and upon reasonable prior notice.

(a) For and in consideration of and in full payment for the services to be rendered by Consultant to the Company during the Term, the Company agrees to pay Consultant a consulting fee of $75,000 per annum payable in monthly installments on the first day of each month during the Term or in such other installments as the parties may mutually agree upon.

(a) It is understood and agreed that Consultant is, and shall at all times during the Term be deemed to be an independent contractor, and nothing in this Agreement shall in any way be deemed or construed to constitute Consultant as an agent or employee of the Company nor shall Consultant have the right or authority to act as, incur, assume or create any obligation, responsibility or liability, express or implied, in the name of or on behalf of the Company or to bind the Company in any manner whatsoever or sign any documents on its behalf. Subject to Sections 2 and 3(b) hereof, Consultant shall determine in its sole discretion the method, details and means of performing its duties hereunder, and the Company shall have no right to control or direct the foregoing.

(b) The consulting services to be rendered hereunder will not be exclusive to either party. Consultant may engage in such other activities, consulting or otherwise, as consultant in its sole discretion deems appropriate. Similarly, the Company may retain other consultants in its sole discretion.

The Company shall not be responsible for withholding from any payments made to Consultant hereunder any contributions levied by any state or federal statutes relating to social security or similar benefits.

Consultant's services hereunder may be terminated by the Company only under the following circumstances:

(a) DEATH. In the event Consultant dies during the Term; the Term shall terminate upon his death.

(b) CAUSE. The Company may, at any time, terminate this Agreement for cause upon thirty (30) days' written notice of termination to Consultant. "Cause" shall mean that their has been a final, non-appealable determination by a court of competent jurisdiction that Consultant has committed civil or criminal embezzlement, theft or other dishonest or fraudulent acts, materially adversely affecting the Company.

If this Agreement shall be terminated for Cause, the Company shall have no further obligations to Consultant as of the date of termination.

This Agreement constitutes the entire agreement between the parties with respect to Consultant's consultancy with the Company during the Term, including, but not limited to, any agreement with respect to remuneration, fees, payments or benefits of any kind payable to Consultant with respect to such consultancy, and, other than Article XVII of the Purchase Agreement relating to arbitration of disputes, there is no other agreement between the parties with respect to the subject matter hereof, written or oral, other than as provided hereby. This Agreement may not be amended, modified, supplemented or discharged except by a writing duly executed by the parties hereto.

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 6.4:

If to Consultant:

16661 Ventura Boulevard, Suite 214
Encino, CA 91436

Attn: Mr. Buddy Young, President & CEO Fax: (818) 784-8660

With a copy to:

Hand & Hand
24901 Dana Point
Harbor Drive, Suite 200
Dana Point, CA 92629
Attn: Jehu Hand, Esq.
Fax: (714) 489-0034

If to the Company:

Cheniere Energy, Inc.
Two Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002
Attn: Mr. William D. Forster
Fax: (713) 659-5459

With a copy to:

Whitman Breed Abbott & Morgan
200 Park Avenue
New York, NY 10166
Attn: Robert C. Brighton, Jr., Esq. Fax: (212) 351-3131

The waiver by either party hereto of the breach of any provision of this Agreement by the other party hereto shall not operate or be construed as a waiver or any other provision hereof or of any subsequent breach by such other party.

If any provision of this Agreement shall be held to be invalid or unenforceable, the other provisions of this Agreement shall not be affected thereby and this Agreement shall be construed as if the provision held to be invalid or unenforceable had never been contained herein and such provision shall be reformed and redrawn only to the extent necessary so as to be valid and enforceable under applicable law.

This Agreement shall be binding upon and shall inure to the benefit of the Company and any successor of the Company, and any such successor shall be deemed substituted for the Company under the provisions of this Agreement. As used herein, the term "successor" shall mean any person, firm, corporation or other business entity which at any time, whether by merger, purchase, liquidation or otherwise, acquires all or substantially all of the assets or business at the Company. Consultant may assign its rights and delegate its obligations hereunder to a consulting corporation wholly-owned by Consultant and otherwise reasonably acceptable to the Company.

This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to the conflict of law provisions thereof.

IN WITNESS WHEREOF, the parties hereto have signed and delivered this Agreement on the date first above written.

THE COMPANY:

CHENIERE ENERGY, INC.

By:/s/ William D. Forster
   ------------------------------------
William D. Forster, President

CONSULTANT:

/s/ Buddy Young
---------------------------------------
Buddy Young, individually

EXHIBIT 10.10

CHENIERE ENERGY, INC.
Two Allen Center
1200 Smith Street, Suite 1710
Houston, Texas 77002

July 3, 1996

Mr. Buddy Young
16661 Ventura Boulevard, Suite 214
Encino, California 91436

Dear Buddy:

Reference is made to that certain Agreement and Plan of Reorganization dated as of April 16, 1996 (the "Agreement") among Cheniere Energy, Inc. (f/k/a BEXY Energy, Inc.) and you, and Cheniere Energy Operating Co., Inc. and the Stockholders of Cheniere. Capitalized terms used herein without definition shall have the same meanings as ascribed to them in the Agreement.

Reference is further made to Section 3.6 of the Agreement pursuant to which we have agreed to enter into this letter agreement confirming our understanding and agreement with respect to the reverse split of the common stock of Cheniere Energy, Inc. (f/k/a BEXY Communications, Inc.) (the "Company").

Accordingly, in consideration of the benefits accruing to us under the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, for a period of eighteen months from the date hereof, we agree not to engage in any reverse stock split or any transaction that has the effect of a reverse stock split, resulting in the combination of shares of outstanding common stock of the Company, other than the Reverse Split as described in the Agreement, without your prior written consent.

Please sign and return the enclosed copy of this letter to indicate your acknowledgement of and consent to the foregoing. This letter may be signed in counterparts and facsimile signatures shall be treated as originals.

Very truly yours,

CHENIERE ENERGY, INC.

By: /s/ William D. Forster
    ---------------------------
    William D. Forster
    President

ACCEPTED AND ACKNOWLEDGED
this 2nd day of July, 1996

 /s/ Buddy Young
- --------------------------
Buddy Young, individually