EXHIBIT 2
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("AGREEMENT"), dated as of December
21, 2004, is made and entered into by and among Far East Energy Corporation
("COMPANY") and Sofaer Capital Global Fund, Sofaer Capital Asian Fund,
Restructuring Investors Limited and Persistency, (individually and collectively,
the "INVESTOR") for the benefit of Investor.
PRELIMINARY STATEMENTS
A. The Company has entered into that certain Subscription Agreement
with the Investors dated December 21, 2004 (the "SUBSCRIPTION AGREEMENT"),
pursuant to which the Investors purchased an aggregate of 12,500,000 shares of
the common stock, par value $0.001 per share, of the Company (the "COMPANY
COMMON STOCK") and received Warrants dated December 21, 2004 (the "WARRANT") to
purchase an aggregate of 6,250,000 shares of Company Common Stock. The shares of
Company Common Stock purchased pursuant to the Subscription Agreement, together
with the shares of Company Common Stock issuable upon exercise of the Warrant
from time to time, and any shares of Company Common Stock issued as a dividend
or other distribution with respect to, or in exchange for, or in replacement of,
such shares, are hereinafter referred to as the "REGISTRABLE SECURITIES."
B. Pursuant to the terms of the Subscription Agreement, the Company has
agreed to provide the Investors with certain registration rights with respect to
the Registrable Securities.
AGREEMENT
The parties, intending to be legally bound, agree as follows:
ARTICLE 1
REGISTRATION RIGHTS AND PROCEDURES
1.1 FILING OF REGISTRATION STATEMENT.
(a) Subject to the terms and conditions of this Agreement, the Company
shall prepare a Registration Statement on Form S-2, or other applicable form if
Form S-2 is not available or has been rescinded or replaced (the "REGISTRATION
STATEMENT"), with respect to the Registrable Securities and use commercially
reasonable efforts to cause the Registration Statement to be initially filed
with the Securities and Exchange Commission (the "SEC") within 45 days following
the Registration Date but in no event prior to April 30, 2005. The Company shall
provide Investor and counsel for the Investor an opportunity to review and
comment on the Registration Statement at least five Business Days prior to
filing and prepare and file with the SEC and all other amendments thereto within
a reasonable number of days prior to its filing with the SEC. For purposes of
this Agreement, (a) the term "REGISTRATION DATE" shall mean the date on which
the Company's Registration Statement on Form S-2 (File No. 333-117635), filed
with the SEC on July 23, 2004, is declared effective by the SEC and (b) the term
"BUSINESS DAY" shall mean, with respect to any act to be performed hereunder,
each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in New York, New York or other applicable place where such
act is to occur are authorized or obligated by applicable law, regulation or
order to close.
(b) Notwithstanding anything contained herein to the contrary, if the
Company has an effective registration statement under the Securities Act of
1933, as amended (the "SECURITIES ACT")
covering the Registrable Securities and becomes eligible to use Form S-3 or such
other short-form registration statement form under the Securities Act, the
Company may, upon 20 days prior notice to all holders of Registrable Securities
included in the "Selling Security Holders" section of such registration
statement, register any Registrable Securities registered but not yet
distributed under such effective registration statement on a short-form
registration statement under the Securities Act and, once such short-form
registration statement is declared effective, de-register such shares under the
previous registration statement, transfer the filing fees from the previous
registration statement (such transfer pursuant to Rule 429 under the Securities
Act, if applicable), or file a post-effective amendment converting the previous
registration statement to a short-form registration statement.
1.2 EFFECTIVENESS OF REGISTRATION STATEMENT. The Company shall use
commercially reasonable efforts to (a) have the Registration Statement declared
effective by the SEC; (b) subject to Section 1.3, prepare and file with the SEC
such amendments and supplements to the Registration Statement and the prospectus
used in connection therewith as may be necessary to keep the Registration
Statement effective with respect to any Registrable Securities, until the
earlier of (i) such Registrable Securities covered by the Registration Statement
have been sold by the Investor, (ii) the date on which either such Registrable
Securities are distributed to the public pursuant to Rule 144 promulgated by the
SEC pursuant to the Securities Act (or any similar provision then in effect) or
are saleable pursuant to Rule 144(k) promulgated by the SEC pursuant to the
Securities Act, (iii) the eighteen month anniversary of the effective date of
such Registration Statement (provided, however, that such eighteen-month period
will be extended for a period of time equal to the period any Investor refrains
from selling such Registrable Securities at the request of the underwriter, if
any, with respect to the offering of such Registrable Securities, or otherwise
is required to suspend sales of such Registrable Securities pursuant to the
terms of this Agreement) or (iv) the date on which such Registrable Securities
are sold to the Company (but not before the expiration of the applicable
prospectus delivery requirements); and (c) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in the Registration
Statement. The Company shall further (x) use commercially reasonable efforts to
register and qualify the Registrable Securities covered by such Registration
Statement under such other securities or "blue sky" laws of such jurisdictions
as shall be reasonably requested by a seller, provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business, where not otherwise required, or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required by
the Securities Act and (y) to the extent not already provided for holders of
Company Common Stock, provide a transfer agent and registrar for all Registrable
Securities registered pursuant to this Agreement and a CUSIP number for all such
Registrable Securities, in each case not later than the effective date of the
Registration Statement.
1.3 INFORMATION AND COPIES.
(a) The Company shall furnish to each seller of Registrable Securities
such number of copies of the Registration Statement, each amendment and
supplement thereto, the prospectus included in the Registration Statement
(including each preliminary prospectus), and such other documents as such seller
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller.
(b) The Company shall promptly notify each seller of Registrable
Securities promptly of the happening of any event as a result of which the
prospectus included in the Registration Statement contains an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing and shall use commercially reasonable efforts to
prepare and file with the SEC, and promptly notify each
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holder of Registrable Securities of the filing of, a supplement to such
prospectus or an amendment to the Registration Statement so that, as thereafter
delivered to the purchasers of Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances under which they were made and in
the case of an amendment to the Registration Statement, use reasonable best
efforts to cause it to become effective as soon as possible. Upon receipt of any
notice from the Company of the happening of any event of the kind described
above, each seller of Registrable Securities will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until such seller's receipt of the copies of the supplemented or amended
prospectus, or until it is advised in writing by the Company that the use of the
prospectus may be resumed.
(c) The Company shall make available for inspection by any seller of
Registrable Securities, any underwriter participating in any disposition
pursuant to the Registration Statement, and any attorney, accountant, or other
agent retained by any such seller or underwriter, all financial and other
records of the Company (reasonably requested), the Company's applicable
corporate documents and contracts as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company's
officers, directors, employees, and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant, or agent in connection with the Registration Statement; provided,
however, that each seller of Registrable Securities agrees that information
obtained by it as a result of such inspections which is deemed confidential
shall not be used by it as the basis for any market transaction in the Company's
securities unless and until such information is made generally available to the
public and each such seller shall cause any attorney, accountant, or agent
retained by such seller or underwriter to keep confidential any such
information.
(d) In the event of the issuance of any stop order suspending the
effectiveness of the Registration Statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Company Common Stock included in the Registration Statement for sale in any
jurisdiction, the Company will promptly notify each seller of such and will use
reasonable efforts to obtain the withdrawal of such order.
(e) The Company reserves the right to postpone for a reasonable period
of time, not to exceed in the aggregate 90 days from the date notification of
such delay is sent to the holders of Registrable Securities during any 365 day
period, the filing or the effectiveness of the Registration Statement if the
Company's Board of Directors in good faith determines that (i) such registration
might have a material adverse effect on any of the Company's plans or proposals
with respect to any financing, acquisition, recapitalization, reorganization, or
other material transaction, or (ii) it would be seriously detrimental to the
Company and its stockholders for such registration to be effected at such time.
1.4 LISTING OF REGISTRABLE SECURITIES. The Company shall cause all
Registrable Securities to be listed on each securities exchange or other
quotation service on which the Company Common Stock is then listed.
1.5 UNDERWRITTEN OFFERING.
(a) If the offering is to be underwritten, the Company shall enter into
any necessary agreements in connection therewith (including an underwriting
agreement containing customary representations, warranties, and agreements).
(b) To the extent either the Company or the holders of a majority in
interest of the Registrable Securities (the "INITIATING PARTY") intends to
distribute the Registrable Securities covered by
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the Registration Statement by means of a firm commitment underwritten public
offering under the Securities Act, the ultimate decision of the identity of the
underwriter will be made by the Company. In such event, the right of any holder
to include its Registrable Securities in such registration shall be conditioned
upon such holder's participation in such underwriting and the inclusion of such
holder's Registrable Securities in the underwriting (unless otherwise mutually
agreed by a majority in interest of the Registrable Securities that are
Initiating Parties and such holder) to the extent provided herein. All holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such underwriting. Notwithstanding any other provision
of this Agreement, if the underwriter advises an Initiating Party in writing
that marketing factors require a limitation on the number of shares to be
underwritten, then the Initiating Party shall so advise all holders of
Registrable Securities which would otherwise be underwritten pursuant hereto,
and the number of shares of Registrable Securities that may be included in the
underwriting shall be allocated among all holders thereof, including the
Initiating Party, in proportion (as nearly as practicable) to the amount of
Registrable Securities owned by each holder and to be included in the
underwriting; PROVIDED, HOWEVER, that the number of shares of Registrable
Securities to be included in such underwriting shall not be reduced unless all
other securities, if any, including without limitation securities proposed to be
registered and issued by the Company are first entirely excluded from the
underwriting.
1.6 EXPENSES OF REGISTRATION. All expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to this Article 1, including, without limitation, all
registration, filing and qualification fees (including "blue sky" fees),
printers' and accounting fees, fees and disbursements of counsel for the Company
shall be borne by the Company.
1.7 SUBSEQUENT RIGHTS. From and after the date of this Agreement, the
Company shall not, without the prior written consent of the Investors, enter
into any agreement with any holder or prospective holder of any securities of
the Company that would allow such holder or prospective holder to include such
securities in any registration in which Registrable Securities of an Investor
have been included pursuant to this Agreement, unless such holder or prospective
holder may include such securities in any such registration only to the extent
that the inclusion of such securities will not reduce the amount of the
Registrable Securities of the holders that are included.
1.8 MARKET STAND OFF AGREEMENT. By electing to include Registrable
Securities in any registration pursuant to Section 1.1, the holder of
Registrable Securities making such election shall be deemed to have agreed not
to effect any public sale or distribution of securities of the Company of the
same or similar class or classes of the securities included in the Registration
Statement or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, following the filing of a registration statement by the Company
with the SEC in connection with a public offering of its securities and
continuing until 90 days following the date such registration statement is
declared effective by the SEC.
1.9 NATURE OF SALE. Notwithstanding any other provision of this
Agreement, Company Common Stock shall be treated as Registrable Securities only
if and so long as it has not been (a) sold to or through a broker or dealer or
underwriter in a public distribution or a public securities transaction, or (b)
sold in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act under Section 4(1) thereof so that all
transfer restrictions, and restrictive legends with respect thereto, if any, are
removed upon the consummation of such sale.
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ARTICLE 2
RIGHTS AND UNDERTAKINGS OF
HOLDERS OF REGISTRABLE SECURITIES
2.1 RIGHTS OF HOLDERS. Each holder of Registrable Securities shall have
the absolute right to exercise or refrain from exercising any right or rights
that such holder may have by reason of this Agreement, including, without
limitation, the right to consent to the waiver or modification of any obligation
under this Agreement, and such holder shall not incur any liability to any other
holder of any of the Company's securities as a result of exercising or
refraining from exercising any such right or rights.
2.2 SUSPENSION OF SALES; NOTICE OF SALES. If any Registrable Securities
are included in a Registration Statement pursuant to the terms of this
Agreement, the holder thereof will not (until further notice) effect sales
thereof after receipt of written notice from the Company of the occurrence of an
event specified in order to permit the Company to correct or update the
Registration Statement or prospectus. Each holder of Registrable Securities
shall notify the Company of the sale of any Registrable Securities within a
reasonable period of time prior to such sale.
2.3 COMPLIANCE. If any Registrable Securities are being registered in
any registration pursuant to this Agreement, the holder thereof will comply with
all anti-stabilization, manipulation, and similar provisions of Section 10 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and any
rules promulgated thereunder by the SEC and, at the Company's request, will
execute and deliver to the Company and to any underwriter participating in such
offering an appropriate agreement to such effect.
2.4 TERMINATION OF EFFECTIVENESS. Following the end of the period
during which the Company is obligated to keep the Registration Statement current
and effective as described herein, each holder of Registrable Securities
included in the Registration Statement shall discontinue sales thereof pursuant
to such Registration Statement, unless such holder has received written notice
from the Company of its intention to continue the effectiveness of such
Registration Statement with respect to any of such securities which remain
unsold.
2.5 FURNISH INFORMATION. It shall be a condition precedent to the
Company's obligations to take any action pursuant to this Agreement with respect
to the Registrable Securities of any selling holder that such holder shall
furnish to the Company such information regarding itself, the Registrable
Securities held by it, and the intended method of disposition of such securities
as shall be required to effect the registration of such holder's Registrable
Securities or as the Company shall otherwise reasonably request. The obligations
of the Company under this Agreement shall be suspended as to any holder of
Registrable Securities unless and until such holder complies with the preceding
sentence.
2.6 UNDERWRITTEN REGISTRATION. No holder of Registrable Securities may
participate in any registration hereunder which is underwritten unless such
holder (a) agrees to sell such holder's securities on the basis provided in any
underwriting arrangements approved by the Company; (b) completes and executes
all customary questionnaires, powers of attorney, indemnities, underwriting
agreements, and other documents reasonably required under the terms of such
underwriting arrangements; and (c) agrees to pay its pro rata share of all
underwriting discounts and commissions and its own expenses (including, without
limitation, counsel fees).
2.7 DELAY OF REGISTRATION. No holder of Registrable Securities shall
have any right to obtain or seek an injunction restraining or otherwise delaying
the preparation of, or declaration of the effectiveness of, any Registration
Statement initiated in accordance with the terms of this Agreement if
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such injunction is the result of any controversy that might arise with respect
to the interpretation or implementation of these provisions.
ARTICLE 3
INDEMNIFICATION
3.1 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify and
hold harmless, with respect to any Registration Statement filed by it pursuant
to this Agreement, to the fullest extent permitted by law, each holder of
Registrable Securities covered by such Registration Statement, as well as such
holder's officers, directors, employees, agents, and general or limited partners
(and the directors, officers, employees, and agents thereof) and each other
person, if any, who controls such holder within the meaning of the Securities
Act (collectively, the "HOLDER INDEMNIFIED PARTIES") against all losses, claims,
damages, liabilities, and expenses joint or several (including reasonable fees
of counsel and any amounts paid in settlement effected with the Company's
consent, which consent shall not be unreasonably withheld) (collectively,
"LOSSES") to which any such Holder Indemnified Party may become subject under
the Securities Act, the Exchange Act, any other federal law, any state or common
law, any rule or regulation promulgated thereunder, or otherwise, insofar as
such Losses (or actions or proceedings, whether commenced or threatened, in
respect thereof) are caused by (a) any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement in which
such Registrable Securities were included as contemplated hereby or the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, (b) any
untrue statement or alleged untrue statement of a material fact contained in any
preliminary, final, or summary prospectus, together with the documents
incorporated by reference therein (as amended or supplemented if the Company
shall have filed with the SEC any amendment thereof or supplement thereto), or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or (c)
any violation by the Company of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities laws; PROVIDED, HOWEVER, that the
Company shall not be liable to any such Holder Indemnified Party in any such
case to the extent that any such Loss (or action or proceeding, whether
commenced or threatened, in respect thereof) arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendment thereof or supplement thereto
or in any such preliminary, final, or summary prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any such Holder Indemnified Party relating to such Holder Indemnified Party for
use in the preparation thereof; and PROVIDED FURTHER, that the Company shall not
be liable to any such Holder Indemnified Party with respect to any preliminary
prospectus to the extent that any such Loss of such Holder Indemnified Party
results from the fact that such Holder Indemnified Party sold Registrable
Securities to a person to whom there was not sent or given, at or before the
written confirmation of such sale, a copy of the prospectus (excluding documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Company previously
furnished copies thereof to such Holder Indemnified Party in compliance with
this Agreement and the Loss of such Holder Indemnified Party results from an
untrue statement or omission of a material fact contained in such preliminary
prospectus which was corrected in the prospectus (or the prospectus as amended
or supplemented). Such indemnity and reimbursement of expenses and obligations
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Holder Indemnified Parties and shall survive the transfer of
such securities by such Holder Indemnified Parties.
3.2 INDEMNIFICATION BY HOLDERS. Each holder of Registrable Securities
participating in any registration hereunder shall severally and not jointly,
indemnify and hold harmless, to the fullest extent permitted by law, the
Company, its directors, officers, employees, and agents, and each person who
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controls the Company (within the meaning of the Securities Act) (collectively,
"COMPANY INDEMNIFIED PARTIES") against all Losses to which any Company
Indemnified Party may become subject under the Securities Act, the Exchange Act,
any other federal law, any state or common law, or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) are caused by (a) any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement in which such holder's
Registrable Securities were included or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (b) any untrue statement or alleged
untrue statement of a material fact contained in any preliminary, final, or
summary prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if the Company shall have filed with the SEC
any amendment thereof or supplement thereto), or the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and in the cases
described in clauses (a) and (b) of this Section 3.2, to the extent, but only to
the extent, that such untrue statement or omission is contained in any
information furnished in writing by such holder relating to such holder for use
in the preparation of the documents described in such clauses (a) and (b), (c)
any violation by such holder of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities laws, and (d) with respect to any
preliminary prospectus, the fact that such holder sold Registrable Securities to
a person to whom there was not sent or given, at or before the written
confirmation of such sale, a copy of the prospectus (excluding the documents
incorporated by reference) or of the prospectus as then amended or supplemented
(excluding documents incorporated by reference) if the Company has previously
furnished copies thereof to such holder in compliance with this Agreement and
the Loss of such Company Indemnified Party results from an untrue statement or
omission of a material fact relating to information provided by such holder
contained in such preliminary prospectus which was corrected in the prospectus
(or the prospectus as amended or supplemented). Such indemnity obligation shall
remain in full force and effect regardless of any investigation made by or on
behalf of Company Indemnified Parties and shall survive the transfer of such
securities by such holder. Notwithstanding the foregoing, in no event will any
indemnity under this Section 3.2 exceed the net proceeds from the arms-length
sale of Registrable Securities received by such holder.
3.3 CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly after receipt by
an identified party hereunder of written notice of the commencement of any
action, suit, proceeding, investigation, or threat thereof with respect to which
a claim for indemnification may be made pursuant hereto, such indemnified party
shall, if a claim in respect thereto is to be made against an indemnifying
party, give written notice to the indemnifying party of the threat or
commencement thereof; PROVIDED, HOWEVER, that the failure to so notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. If any such claim or action
referred to hereunder is brought against any indemnified party and it then
notifies the indemnifying party of the threat or commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other indemnifying party similarly notified, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party (which counsel shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party). The indemnifying party
shall not be liable to an indemnified party hereunder for any legal expenses of
counsel or any other expenses incurred by such indemnified party in connection
with the defense thereof, unless the indemnifying party has failed to assume the
defense of such claim or action or to employ counsel reasonably satisfactory to
such indemnified party. Notwithstanding the foregoing, the indemnified party
shall have the right to retain its own counsel, with the fees and expenses to be
paid by the indemnified party, if representation of such indemnified party by
the counsel retained by the indemnifying party would be inappropriate due to
actual or potential differing interests between such indemnified party and any
other party represented by such counsel in such action. The indemnifying
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party shall not be required to indemnify the indemnified party with respect to
any amounts paid in settlement of any action, proceeding, or investigation
entered into without the written consent of the indemnifying party, which
consent shall not be unreasonably withheld. No indemnifying party shall consent
to the entry of any judgment or enter into any settlement without the consent of
the indemnified party unless (a) such judgment or settlement does not impose any
obligation or liability upon the indemnified party other than the execution,
delivery, or approval thereof, and (b) such judgment or settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a full release and discharge from all liability in respect
of such claim and a full release of all persons that may be entitled to or
obligated to provide indemnification or contribution under this Article.
3.4 CONTRIBUTION. If the indemnification provided for herein is
unavailable to or insufficient to hold harmless an indemnified party hereunder,
then each indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of the Losses (or actions or proceedings in
respect thereof) referred to herein in such proportion as is appropriate to
reflect the relative fault of and the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the other in
connection with the statements, omissions, actions, or inactions which resulted
in such Losses. The relative fault of the indemnifying party and the indemnified
party shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or the indemnified party, any action or inaction by any such
party, and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement, omission, action, or inaction.
The relative benefits received by the indemnifying party and the indemnified
party will be determined by reference to the net proceeds from an arms-length
sale of Registrable Securities and underwriting discounts and commissions from
the offering received by each such party. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Promptly after receipt by an indemnified party
hereunder of written notice of the commencement of any action, suit, proceeding,
investigation, or threat thereof with respect to which a claim for contribution
may be made against an indemnifying party hereunder, such indemnified party
shall, if a claim for contribution in respect thereto is to be made against an
indemnifying party, give written notice to the indemnifying party of the
commencement thereof (if the notice specified herein has not been given with
respect to such action); PROVIDED, HOWEVER, that the failure to so notify the
indemnifying party shall not relieve it from any obligation to provide
contribution which it may have to any indemnified party hereunder, except to the
extent that the indemnifying party is actually prejudiced by the failure to give
notice. The parties hereto agree that it would not be just and equitable if
contribution pursuant hereto were determined by pro rata allocation or by any
other method of allocation which does not take account of equitable
considerations referred to herein.
If indemnification is available hereunder, the indemnifying parties
shall indemnify each indemnified party to the fullest extent provided herein,
without regard to the relative fault of said indemnifying party or indemnified
party or any other equitable consideration provided for herein. The provisions
hereof shall be in addition to any other rights to indemnification or
contribution which any indemnified party may have pursuant to law or contract,
shall remain in full force and effect regardless of any investigation made by or
on behalf of any indemnified party, and shall survive the transfer of securities
by any such party.
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ARTICLE 4
MISCELLANEOUS
4.1 TERMINATION. The obligations under ARTICLE 1 shall terminate on the
date on which is the earlier of (a) the date on which the Company's obligations
under Section 1.2 terminate or (b) the date on which all Registrable Securities
covered by the Registration Statement have been sold.
4.2 ASSIGNMENT; SUCCESSORS AND ASSIGNS. Investor may assign its rights
hereunder to any permitted transferee of all or any portion of the Registrable
Securities provided that (a) the Company is furnished with written notice of the
name and address of the assignee and the securities with respect to which such
rights are being assigned, and (b) the Company shall have the right to require
any holder of Registrable Securities to execute a counterpart of this Agreement
as a condition to such holder's claim to any rights hereunder. This Agreement
and all provisions thereof shall be binding upon, inure to the benefit of, and
are enforceable by the parties hereto and their respective successors and
permitted assigns.
4.3 NOTICES. All notices, requests, and other communications hereunder
shall be in writing and will be deemed to have been duly given and received (a)
when personally delivered, (b) when sent by facsimile upon confirmation of
receipt, (c) two Business Days after the day on which the same has been
delivered prepaid to a nationally recognized courier service, or (d) five
Business Days after the deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid, in each case addressed as
follows:
(a) if to the Company, then at 000 X. Xxx Xxxxxxx Xxxxxxx X., Xxxxx
000, Xxxxxxx, Xxxxx 00000, Attn: Chief Executive Officer, facsimile number,
(000) 000-0000, with a copy to Xxxx Xxxxxxxx, Esq., Xxxxx & XxXxxxxx, LLP, 2300
Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, facsimile number,
(000) 000-0000; or
(b) if to an Investor, then at the address and facsimile number set
forth below such Investor's signature on the last page of this Agreement.
The Investor and the Company may each agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures reasonably approved by it; provided that approval of such procedures
may be limited to particular notices or communications. Any party hereto from
time to time may change its address, facsimile number, or other information for
the purpose of notices to that party by giving notice specifying such change to
the other parties hereto.
4.4 PUBLIC ANNOUNCEMENTS. Except as otherwise required by law, Investor
shall not issue any press release or make any other public announcement with
respect to the transactions contemplated hereby without the approval of the
Company, which approval shall not be unreasonably withheld or delayed.
4.5 GOVERNING LAW; JURISDICTION.
(a) This Agreement, and the provisions, rights, obligations, and
conditions set forth herein, and the legal relations between the parties hereto,
including all disputes and claims, whether arising in contract, tort, or under
statute, shall be governed by and construed in accordance with the laws of the
State of New York without giving effect to its conflict of law provisions.
(b) Any and all disputes arising out of, or in connection with, the
interpretation, performance, or nonperformance of this Agreement or any and all
disputes arising out of, or in connection with, transactions in any way related
to this Agreement and/or the relationship between the parties shall be
9
litigated solely and exclusively before the United States District Court for the
Southern District of New York. The parties consent to the in personam
jurisdiction of said court for the purposes of any such litigation, and waive,
fully and completely, any right to dismiss and/or transfer any action pursuant
to 28 U.S.C. ss.1404 or 1406 (or any successor statute). In the event the United
States District Court for the Southern District of New York does not have
subject matter jurisdiction of said matter, then such matter shall be litigated
solely and exclusively before the appropriate state court of competent
jurisdiction located in the State of New York.
4.6 NO THIRD PARTY BENEFICIARY. This Agreement shall not confer any
rights or remedies upon any person other than the parties hereto and their
respective successors and permitted assigns.
4.7 SEVERABILITY. In the event that any provision of this Agreement or
the application of any provision hereof is declared to be illegal, invalid, or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid, or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
4.8 HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction, or effect.
4.9 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.
4.10 ENTIRE AGREEMENT. This Agreement embodies the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to the
subject matter hereof.
4.11 AMENDMENT; WAIVER. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be
given, without the written consent of the Company and Sellers of Registrable
Securities beneficially owning not less than seventy-five percent (75%) of the
then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver
or consent to or departure from the provisions hereof with respect to a matter
that relates exclusively to the rights of Investor and that does not directly or
indirectly affect, impair, limit or compromise the rights of other Sellers of
Registrable Securities may be given by such Sellers of Registrable Securities;
provided that the provisions of this sentence may not be amended, modified or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
4.12 FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
[SIGNATURE PAGE FOLLOWS]
10
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by the undersigned, thereto duly authorized, as of the date first set forth
above.
COMPANY:
FAR EAST ENERGY CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
INVESTOR:
SOFAER CAPITAL GLOBAL FUND
By: Caledonian Bank and Trust, Ltd.,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Caledonian Bank and Trust, Ltd.
Caledonian House
Xxxxxx Town
Grand Cayman
Cayman Islands
Facsimile No:
--------------------------
SOFAER CAPITAL ASIAN FUND
By: Caledonian Bank and Trust, Ltd.,
as Trustee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Caledonian Bank and Trust, Ltd.
Caledonian House
Xxxxxx Town
Grand Cayman
Cayman Islands
Facsimile No:
--------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
RESTRUCTURING INVESTORS LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Restructuring Investors Limited
Xxx Xxxxxxx 0
XX0000
Xxxxxx, Xxxxxxxxxxx
Attention: Xxxxx Xxxxxxx
Facsimile No: 00 41 22 908 1191
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
PERSISTENCY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Persistency
Xxxxxx House
PO Box 309
Xxxxxx Town
Cayman Islands
British West Indies
Facsimile No:
--------------------------
[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
PASSLAKE LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: Passlake Limited
XX Xxx 000
Xxxxxx Xxxx
Xxxxx Xxxxxx
Xxxxxx Xxxxxxx
BWI
Facsimile No:
-----------------
with a copy to: Cavamont Services SA
00 xxx xx Xxxxx
0000 Xxxxxx
Xxxxx Xxxxxx
Xxxxxxxxxxx
Attention: Xxxxxxxxxx
Xxxxxxxxxxxxx
Facsimile No:
-----------------
15
