Exhibit 4.3
REGISTRATION RIGHTS
AGREEMENT
This REGISTRATION RIGHTS AGREEMENT
(this “ Agreement ”), dated as of March 13,
2009, is made and entered into by and between Far East Energy
Corporation, a Nevada corporation (the “ Company
”), and Arrow Energy International Pte Ltd, a company
organized under the laws of the Republic of Singapore (the “
Investor ”), for the benefit the Investor in
conjunction with its purchase of certain securities of the
Company.
Recitals
A. The Company and Far East Energy
(Bermuda), Ltd., a wholly-owned subsidiary of the Company (“
FEEB ”) have entered into a Securities Purchase
Agreement with the Investor dated March 13, 2009 (the “
Securities Purchase Agreement ”), pursuant to which
the Investor purchased an Exchangeable Note (the “
Note ”) of FEEB US$10,000,000 principal amount,
exchangeable for up to 21,052,632 shares (subject to adjustment) of
the Company’s common stock, par value $0.001 (the “
Company Common Stock ”), and received a Warrant (the
“ Warrant ”) to purchase up to 7,420,000 shares
(subject to adjustment) of Company Common Stock.
B. The Note and the Warrant are
exchangeable and exercisable, respectively, for an aggregate of
28,472,632 shares (subject to adjustment pursuant to the terms of
the Note and the Warrant) of Company Common Stock (the “
Registrable Securities ”).
C. Pursuant to the terms of the
Securities Purchase Agreement, the Company has agreed to provide
the Investor 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 . Subject to the terms and conditions of this
Agreement, the Company shall prepare a Registration Statement on
Form S-1, or Form S-3 if the Company is eligible to use such form
(the “ Registration Statement ”), with respect
to the Registrable Securities and shall file the Registration
Statement with the Securities and Exchange Commission (the “
SEC ”) within 90 days following the date of execution
of the Securities Purchase Agreement (the “ Filing
Date ”); provided , however , that at least
four (4) business days before filing a Registration Statement
or prospectus or any amendments or supplements thereto, including
documents incorporated by reference after the initial filing of the
Registration Statement and prior to effectiveness thereof, the
Company shall furnish to one firm of counsel for the Investor
copies of all such documents in the form substantially as proposed
to be filed with the SEC for review and comment by such counsel,
and the Company shall not and shall not be required to file any
such Registration Statement or prospectus or any amendments or
supplements thereto if such counsel to the Investor reasonably
objects in good faith to such filing.
1.2 Effectiveness of Registration
Statement . The Company shall use its commercially reasonable
efforts to (a) have the Registration Statement declared
effective by the SEC as soon as reasonably practicable following
the Filing Date, (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 comply with the provisions of the
Securities Act and rules thereunder with respect to the disposition
of all securities covered by such registration statement or to keep
the Registration Statement effective with respect to any
Registrable Securities, until the earlier of (i) the date on
which 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 of 1933, as amended (the “ Securities
Act ”) (or any similar provision then in effect), or are
saleable pursuant to Rule 144 promulgated by the SEC pursuant to
the Securities Act, (iii) the second anniversary of the Filing
Date, or (iv) the date on which such Registrable Securities
are sold to the Company or one of its subsidiaries (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 Investor as set forth in the
Registration Statement. The Company shall further 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 the Investor, 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.
1.3 Other Obligations
.
(a) The Company shall furnish to the
Investor, without charge, such number of copies of the Registration
Statement, each amendment and supplement thereto, the prospectus
included in the Registration Statement (including each preliminary
prospectus), in each case in conformity with the requirements of
the Securities Act and the rules thereunder, and such other
documents as the Investor may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by
the Investor.
(b) The Company shall promptly
notify the Investor 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 the
Investor 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
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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 commercially
reasonable 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, the Investor
will forthwith use its commercially reasonable efforts to
discontinue disposition of Registrable Securities pursuant to the
Registration Statement until the Investor’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) 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 of the
securities included in the Registration Statement pursuant to this
Agreement for sale in any jurisdiction, the Company will promptly
notify the Investor of such and will use its commercially
reasonable efforts to obtain the withdrawal of such
order.
(d) The Company reserves the right
to suspend for a reasonable period of time not to exceed 60 days
(from the date notification of such delay is sent to the Investor)
during any 90 day period and, in the aggregate, 90 days during any
365 day period, the use or 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) the
Company is in possession of material non-public information that,
if publicly disclosed, could result in a material disruption of a
major corporate development or transaction then pending or in
progress or in other material adverse consequences to the
Company.
(e) In the event of any underwritten
or agented offering, the Company shall enter into and perform its
obligations under an underwriting or agency agreement (including
indemnification and contribution obligations of underwriters or
agents), in usual and customary form reasonably acceptable to the
Company, with the managing underwriter or underwriters of or agents
for such offering. The Company shall also cooperate with the
Investor and the underwriters’ representative or agent for
such offering in the marketing of the Registrable Securities,
including making available the Company’s officers,
accountants, counsel, premises, books and records for such
purpose.
(f) In the event that the Investor
reasonably concludes and represents to the Company that it is an
“underwriter” as defined by Section 2(a)(11) of
the Securities Act, the Company shall use its commercially
reasonable efforts to obtain a so-called “comfort
letter” from its independent public accountants, and legal
opinions of counsel to the Company addressed to the Investor, in
customary form and covering such matters of the type customarily
covered by such letters, and in a form that shall be reasonably
satisfactory to the Investor. The Company shall furnish to the
Investor a signed counterpart of any such comfort letter or legal
opinion. Delivery of any such opinion or comfort letter shall be
subject to the recipient furnishing such written representations or
acknowledgements as are customarily provided by selling
shareholders who receive such comfort letters or
opinions.
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(g) The Company shall cause all
Registrable Securities registered pursuant hereunder to be listed
on each securities exchange on which similar securities issued by
the Company are then listed.
(h) The Company shall provide a
transfer agent and registrar for all Registrable Securities
registered pursuant hereunder and a CUSIP number for all such
Registrable Securities, in each case not later than the effective
date of such registration.
(i) The Company shall take such
other actions as are reasonably required in order to expedite or
facilitate the disposition of Registrable Securities included in
each such registration.
1.4 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 (and any rules and
regulations promulgated thereunder) so that all transfer
restrictions, and restrictive legends with respect thereto, if any,
are removed upon the consummation of such sale.
1.5 Reports Under the Exchange
Act . With a view to making available to the Investor the
benefits of Rule 144 of the Securities Act and any other rule or
regulation of the SEC that may at any time permit the Investor to
sell Registrable Securities to the public without registration or
pursuant to a registration on Form S-3, the Company
shall:
(a) make and keep available adequate
current public information, as those terms are understood and
defined in Rule 144 under the Securities Act, at all times
following the Closing Date (as defined in the Securities Purchase
Agreement) so long as the Company is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended
(“ Exchange Act ”);
(b) file with or submit to, as
applicable, the SEC in a timely manner all reports and other
documents required to be filed or submitted by the Company under
the Securities Act and the Exchange Act (at all times it is subject
to such reporting requirements); and
(c) furnish to the Investor, so long
as the Investor owns any Registrable Securities, forthwith upon
request (i) a written statement by the Company that it has
complied with the reporting requirements of Rule 144 of the
Securities Act, the Securities Act, and the Exchange Act (so long
as the Company is subject to the reporting requirements of the
Exchange Act), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time the
Company so qualifies); (ii) a copy of the most recent annual
or quarterly report of the Company and such other reports and
documents so filed by the Company; and (iii) such other
information as may be reasonably requested in availing the Investor
of any rule or regulation of the SEC that permits the selling of
any such securities without registration or pursuant to Form S-3
(at any time the Company so qualifies to use such form).
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ARTICLE 2
RIGHTS AND UNDERTAKINGS
OF
THE INVESTOR
2.1 Rights of Investor . The
Investor shall have the absolute right to exercise or refrain from
exercising any right or rights that it 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.
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
Investor 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. The
Investor shall use its commercially reasonable efforts to 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 Investor will comply with all
anti-stabilization, manipulation, and similar provisions of
Section 10 of 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, the Investor shall discontinue
sales thereof pursuant to such Registration Statement, unless the
Investor 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
Investor’s Registrable Securities that the Investor 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 the Investor’s Registrable Securities and as
the Company shall otherwise reasonably request in connection with
Investor’s status as a selling stockholder. If the Investor
desires to include in the Registration Statement all or part of the
Registrable Securities held by it, then the Investor shall, within
five (5) business days after receipt of the notice from or on
beha
