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EXHIBIT 10.47
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of
September
20th, 2005, is made and entered into by and
between Far East Energy Corporation
("Company") and Morgan Keegan &
Company, Inc. ("Morgan Keegan") for the benefit
of the purchasers of the Company's common
stock, par value $0.001 per share
("Company Common Stock") as investors (the
"Investors") in the private placement
by the Company of Company Common Stock.
PRELIMINARY STATEMENTS
A. The Company has entered into Subscription Agreements with
the
Investors dated on or about September 20th,
2005 (collectively, the
"Subscription Agreements"), pursuant to
which the Investors purchased an
aggregate 12,111,111 shares of Company
Common Stock (the "Registrable
Securities").
B. Pursuant to the terms of the Subscription Agreements, the
Company
has agreed to provide the Investors with
certain registration rights with
respect to the shares of Company Common
Stock purchased pursuant to the
Subscription Agreements.
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rescinded or replaced (the "Registration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 shall file the
Registration Statement with the Securities
and Exchange Commission (the "SEC")
within 60 days following the Subscription
Date (as defined in the Subscription
Agreements).
(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 Stockholders" 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 within 120 days
following the Subscription Date (as defined
in the Subscription Agreements); (b)
subject to Section 1.4, 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
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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 Investors, (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 second
anniversary of the Subscription Date, as such
term is defined in the Subscription
Agreements (provided, however, that such
two-year period will be extended for a
period of time equal to the period any
Investor 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 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.
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 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 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
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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) 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.
1.4 Listing of Company Common Stock. The Company will use
reasonable
efforts to list or include the Company
Common Stock on The American Stock
Exchange within 180 days following the
Subscription Date (as defined in the
Subscription Agreements). The Company shall
not be required to apply for the
Company's Common Stock to be listed or
included on any other exchange at any
time.
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 a majority of the holders
of
the Registrable Securities ("Initiating
Party") intends to distribute the
Registrable Securities covered by the
Registration Statement by means of a firm
commitment underwritten public offering
under the Securities Act, the ultimate
decision of whether to obtain an
underwriter and 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
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limitation securities proposed to be
registered and issued by the Company are
first entirely excluded from the
underwriting.
1.6 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.
1.7 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.
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 ("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
