Exhibit 10.4


 


CENAQ Energy Corp.


4550 Post Oak Place Drive, Suite 300


Houston, Texas 77027


 


December 31, 2020


 


CENAQ Sponsor LLC


4550 Post Oak Place Drive, Suite 300


Houston, Texas 77027


 


RE: Securities Subscription Agreement


 


Ladies and Gentlemen:


 


This agreement (the
“Agreement”) is entered into on December 31, 2020 by and between CENAQ Sponsor LLC, a Delaware limited liability
company (the “Subscriber” or “you”), and CENAQ Energy Corp., a Delaware corporation (the
“Company”, “we” or “us”). Pursuant to the terms hereof, the Company hereby
accepts the offer the Subscriber has made to purchase 4,312,500 shares (the “Shares”) of Class B common stock,
$0.0001 par value per share (the “Class B Common Stock”), up to 562,500 of which are subject to complete or
partial forfeiture by you if the underwriters of the Company’s initial public offering (“IPO”) of units
(“Units”) of the Company, do not fully exercise their over-allotment option (the “Over-allotment Option”).
Pursuant to the Company’s certificate of incorporation, as amended to the date hereof (the “Charter”),
shares of Class B Common Stock will convert into shares of Class A common stock, par value $0.0001 per share (the “Class
A Common Stock”) on a one-for-one basis, subject to adjustment, upon the terms and conditions set forth in the Charter.
Unless the context otherwise requires, as used herein “Shares” shall refer to the Shares and shall be deemed
to include any shares of Class A Common Stock issued upon conversion of the Shares. The Company and the Subscriber’s agreements
regarding such Shares are as follows:


 


ARTICLE I.


PURCHASE OF SECURITIES


 


Section 1.01 Purchase
of Shares. For the sum of $25,000 (the “Purchase Price”), which the Company acknowledges receiving in cash,
the Company hereby issues the Shares to the Subscriber, and the Subscriber hereby purchases the Shares from the Company, subject
to forfeiture, on the terms and subject to the conditions set forth in this Agreement. Concurrently with the Subscriber’s
execution of this Agreement, the Company shall, at its option, deliver to the Subscriber a certificate registered in the Subscriber’s
name representing the shares (the “Original Certificate”), or effect such delivery in book-entry form.



 






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ARTICLE II.


REPRESENTATIONS, WARRANTIES AND AGREEMENTS


 


Section 2.01 Subscriber’s
Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber, the Subscriber hereby
represents and warrants to the Company and agrees with the Company as follows:


 


(a) No
Government Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon or made any
recommendation or endorsement of the offering of the Shares.


 


(b) No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the transactions
contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing documents of the
Subscriber, (ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any law, statute, rule or regulation
to which the Subscriber is subject, or any agreement, order, judgment or decree to which the Subscriber is subject.


 


(c) Organization
and Authority. The Subscriber is a Delaware limited liability company, validly existing and in good standing under the laws
of Delaware and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.
Upon execution and delivery by you, this Agreement is a legal, valid and binding agreement of Subscriber, enforceable against Subscriber
in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance
or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).


 


(d) Experience,
Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is able to evaluate the risks
and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment in the Shares for an indefinite
period of time because the Shares have not been registered under the Securities Act (as defined below) and therefore cannot be
sold unless subsequently registered under the Securities Act or an exemption from such registration is available. Subscriber is
capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests.
Subscriber must bear the economic risk of this investment until the Shares are sold pursuant to: (i) an effective registration
statement under the Securities Act or (ii) an exemption from registration available with respect to such sale. Subscriber is able
to bear the economic risks of an investment in the Shares and to afford a complete loss of Subscriber’s investment in the
Shares.


 


(e) Access
to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the opportunity
to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as
the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify
the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely on Subscriber’s
own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence investigation and
the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized to give any information
or to make any representations which were not furnished pursuant to this Article II and Subscriber has not relied on any other
representations or information in making its investment decision, whether written or oral, relating to the Company, its operations
and/or its prospects.


 






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(f) Section
4(a)(2) Offering. Subscriber acknowledges the sale contemplated hereby is being made in reliance on a private placement exemption
under Section 4(a)(2) of the Securities Act and similar exemptions under state law.


 


(g) Investment
Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s own account and
not for the account or benefit of any other person, and not with a view towards the distribution or dissemination thereof in violation
of the Securities Act. The Subscriber did not decide to enter into this Agreement as a result of any general solicitation or general
advertising within the meaning of Rule 502 under the Securities Act.


 


(h) Restrictions
on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving a public offering
within the meaning of the Securities Act. Subscriber understands the Shares will be “restricted securities” within
the meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the certificates or book-entries representing
the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides to offer, resell, pledge
or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred only pursuant to: (i) registration
under the Securities Act, or (ii) an available exemption from registration. Subscriber agrees that if any transfer of its Shares
or any interest therein is proposed to be made, as a condition precedent to any such transfer, Subscriber may be required to deliver
to the Company an opinion of counsel satisfactory to the Company. Absent registration or an exemption, the Subscriber agrees not
to resell the Shares. Subscriber further acknowledges that because the Company is a shell company, Rule 144 may not be available
to the Subscriber for the resale of the Shares until one year following consummation of the initial business combination of the
Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.


 


(i) No
Governmental Consents. No governmental, administrative or other third party consents or approvals are required, necessary or
appropriate on the part of Subscriber in connection with the transactions contemplated by this Agreement.


 


Section 2.02 Company’s Representations,
Warranties and Agreements. To induce the Subscriber to purchase the Shares, the Company hereby represents and warrants to the
Subscriber and agrees with the Subscriber as follows:


 


(a) Organization
and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the laws of the
State of Delaware. The Company possesses all requisite corporate power and authority necessary to carry out the transactions contemplated
by this Agreement.


 






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(b) No
Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions
contemplated hereby do not violate, conflict with or constitute a default under (i) the Charter or Bylaws of the Company, (ii)
any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute, rule or regulation to which the
Company is subject, or any agreement, order, judgment or decree to which the Company is subject, except, with respect to clauses
(ii) and (iii) above, where such violation, conflict or default would not reasonably be expected to have a material adverse effect
on the financial condition, operating results or assets of the Company.


 


(c) Title
to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Charter, the Shares will
be duly and validly issued, fully paid and nonassessable. Upon issuance in accordance with, and payment pursuant to, the terms
hereof and the Charter, the Subscriber will have or receive good title to the Shares, free and clear of all liens, claims and encumbrances
of any kind, other than (i) transfer restrictions hereunder and other agreements to which the Shares may be subject which have
been notified to the Subscriber in writing, (ii) transfer restrictions under federal and state securities laws, and (iii) liens,
claims or encumbrances imposed due to the actions of the Subscriber.


 


(d) No
Adverse Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting the Company
which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated by this Agreement
or (ii) question the validity or legality of any transactions or seeks to recover damages or to obtain other relief in connection
with any transactions.


 


ARTICLE III.


FORFEITURE OF SHARES


 


Section 3.01 Partial
or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the underwriters of the IPO
is not exercised in full, the Subscriber acknowledges and agrees that it (or, if applicable, it and any transferees of Shares)
shall forfeit any and all rights to such number of Shares (up to an aggregate of 562,500 Shares and pro rata based upon the percentage
of the Over-allotment Option exercised) such that immediately following such forfeiture, the Subscriber (and all other initial
stockholders prior to the IPO, if any) will own an aggregate number of Shares, not including any shares of the Company’s
Class A Common Stock (and, together with the Class B Common Stock, the “Common Stock”), issuable upon exercise
of any warrants or any shares of Class A Common Stock purchased by Subscriber in the IPO or in the aftermarket, equal to twenty
percent (20%) of the issued and outstanding shares of Common Stock immediately following the IPO.


 


Section 3.02 Termination
of Rights as Stockholder. If any of the Shares are forfeited in accordance with this Article III, then after such time
the Subscriber (or successor in interest), shall no longer have any rights as a holder of such forfeited Shares, and the Company
shall take such action as is appropriate to cancel such forfeited Shares.


 


Section 3.03 Share
Certificates. In the event an adjustment to the Original Certificates, if any, is required pursuant to this Article III,
then the Subscriber shall return such Original Certificates to the Company or its designated agent as soon as practicable upon
its receipt of notice from the Company advising Subscriber of such adjustment, following which a new certificate (the “New
Certificate”), if any, shall be issued in such amount representing the adjusted number of Shares held by the Subscriber.
The New Certificate, if any, shall be returned to the Subscriber as soon as practicable. Any such adjustment for any uncertificated
securities held by the Subscriber shall be made in book-entry form.


 






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ARTICLE IV.


WAIVER OF LIQUIDATION DISTRIBUTIONS; REDEMPTION
RIGHTS


 


In connection with
the Shares purchased pursuant to this Agreement, the Subscriber hereby waives any and all right, title, interest or claim of any
kind in or to any distributions by the Company from the trust account which will be established for the benefit of the Company’s
public stockholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”),
in the event of a liquidation of the Company upon the Company’s failure to timely complete an initial business combination.
For purposes of clarity, in the event the Subscriber purchases any shares of Class A Common Stock in the IPO or in the aftermarket,
any such shares so purchased shall be eligible to receive any liquidating distributions by the Company. However, in no event will
the Subscriber have the right to redeem any Shares into funds held in the Trust Account upon the successful completion of an initial
business combination.


 


ARTICLE V.


RESTRICTIONS ON TRANSFER


 


Section 5.01 Securities
Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly known as an “Insider
Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company, Subscriber agrees not to
sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior thereto (a) a registration
statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Shares proposed
to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the
Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and
the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws.


 


Section 5.02 Lock-up. Subscriber
acknowledges that the Shares will be subject to lock-up provisions (the “Lock-up”) contained in the Insider
Letter.


 






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Section 5.03 Restrictive Legends.
Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:


 


“THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL,
IS AVAILABLE.”


 


“THE SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM
OF THE LOCKUP.”


 


Section 5.04 Additional
Shares or Substituted Securities. In the event of the declaration of a share dividend, the declaration of an extraordinary
dividend payable in a form other than Common Stock, a spin-off, a share split, an adjustment in conversion ratio, a recapitalization
or a similar transaction affecting the Company’s outstanding Common Stock without receipt of consideration, any new, substituted
or additional securities or other property which are by reason of such transaction distributed with respect to any Common Stock
subject to this Article V or into which such Shares thereby become convertible shall immediately be subject to this Article V and
Article III. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number and/or
class of Shares subject to this Article V and Article III.


 


Section 5.05 Registration
Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration requirements
of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to
a registration rights agreement to be entered into with the Company prior to the closing of the IPO (the “Registration
Rights Agreement”).


 


ARTICLE VI.


OTHER AGREEMENTS


 


Section 6.01 Further Assurances.
Subscriber agrees to execute such further instruments and to take such further action as may reasonably be necessary to carry out
the intent of this Agreement.


 


Section 6.02 Notices.
All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered
personally or sent by first class registered or certified mail, overnight courier service or facsimile or electronic transmission
to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address
or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently
provided to such party or such other electronic mail address as may be designated in writing by such party. Any notice or other
communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business
day following receipt of written confirmation, if sent by facsimile or electronic transmission, one (1) business day after delivery
to an overnight courier service or five (5) days after mailing if sent by mail.


 






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Section 6.03 Entire
Agreement. This Agreement, together with the Insider Letter and the Registration Rights Agreement, each substantially in the
form to be filed as an exhibit to the Registration Statement on Form S-1 associated with the Company’s IPO, embodies the
entire agreement and understanding between the Subscriber and the Company with respect to the subject matter hereof and supersedes
all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty,
covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict,
the express terms and provisions of this Agreement.


 


Section 6.04 Modifications
and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by
all parties hereto.


 


Section 6.05 Waivers
and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only
by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall
be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether
or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was
given, and shall not constitute a continuing waiver or consent.


 


Section 6.06 Assignment.
The rights and obligations under this Agreement may not be assigned by either party hereto without the prior written consent of
the other party.


 


Section 6.07 Benefit.
All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on the parties hereto
and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing in this Agreement
shall be construed to create any rights or obligations except among the parties hereto, and no person or entity shall be regarded
as a third-party beneficiary of this Agreement.


 


Section 6.08 Governing
Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed
by the laws of the State of Texas applicable to contracts wholly performed within the borders of such state, without giving effect
to the conflict of law principles thereof.


 


Section 6.09 Severability.
In the event that any court of competent jurisdiction shall determine that any provision, or any portion thereof, contained in
this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed limited to the extent
that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect. In the event that
such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions of this Agreement
shall nevertheless remain in full force and effect.


 


Section 6.10 No
Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy under
this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or remedy
of such party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any abandonment
or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or further exercise
thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto shall not constitute
a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party not expressly required
under this Agreement shall entitle the party receiving such notice or demand to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any other or further action
in any circumstances without such notice or demand.


 






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Section 6.11 Survival
of Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement or in any
other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery hereof
and any investigations made by or on behalf of the parties.


 


Section 6.12 No
Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other financial
consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such a way as to
create any liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from any claim or
demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming to have been
employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such claim.


 


Section 6.13 Headings
and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only
and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.


 


Section 6.14 Counterparts.
This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being
understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.


 


Section 6.15 Construction.
The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption
or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement.
The words “include,” “includes,” and “including” will be deemed to be followed by “without
limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words
in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this
Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar
import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto
intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto
has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto
has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty,
or covenant.


 






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Section 6.16 Mutual
Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has been subject
to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.


 


ARTICLE VII.


VOTING AND TENDER OF SHARES


 


Subscriber agrees to
vote the Shares in favor of an initial business combination that the Company negotiates and submits for approval to the Company’s
stockholders and shall not seek redemption with respect to such Shares. Additionally, the Subscriber agrees not to tender any Shares
in connection with a tender offer presented to the Company’s stockholders in connection with an initial business combination
negotiated by the Company.


 


ARTICLE VIII.


INDEMNIFICATION


 


Each party shall indemnify
the other against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of such
party’s breach of any representation, warranty, covenant or agreement in this Agreement.


 


[Signature Page Follows]


 




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If the foregoing accurately sets forth our understanding and
agreement, please sign the enclosed copy of this Agreement and return it to us.


 


	 	Very truly yours,
	 	 	 
	 	CENAQ Energy Corp.
	 	 	 
	 	By:	      
	 	Name: 	 Michael J. Mayell
	 	Title:	President


 





	Accepted and agreed as of the date first written above.
	 	 	 
	CENAQ Sponsor LLC	 
	 	 	 
	By:	      	 
	Name: 	Michael J. Mayell	 
	Title:	President	 


 


[Signature Page to Securities Subscription
Agreement]


 


 


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