-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MzMHijUXM7HRQe/N5KKSX1onW7up0ixSS7bZ+T7J9EQxvz30eFK2tESA7DJ29FUD 2uQIfxZpeMYR0JDnYC6tMA== 0000930413-05-000012.txt : 20050103 0000930413-05-000012.hdr.sgml : 20041231 20050103171007 ACCESSION NUMBER: 0000930413-05-000012 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20050103 DATE AS OF CHANGE: 20050103 GROUP MEMBERS: PASSLAKE LIMITED GROUP MEMBERS: RESTRUCTURING INVESTORS LIMITED GROUP MEMBERS: SOFAER CAPITAL ASIAN FUND GROUP MEMBERS: SOFAER CAPITAL GLOBAL FUND GROUP MEMBERS: SOFAER CAPITAL INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FAR EAST ENERGY CORP CENTRAL INDEX KEY: 0001124024 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 880459590 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-78318 FILM NUMBER: 05503202 BUSINESS ADDRESS: STREET 1: 400 N. SAM HOUSTON PARKWAY E. STREET 2: SUITE 205 CITY: HOUSTON STATE: TX ZIP: 77060 BUSINESS PHONE: 7135861900 MAIL ADDRESS: STREET 1: 400 N. SAM HOUSTON PARKWAY E. STREET 2: SUITE 205 CITY: HOUSTON STATE: TX ZIP: 77060 FORMER COMPANY: FORMER CONFORMED NAME: EZFOODSTOP COM DATE OF NAME CHANGE: 20010306 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PERSISTENCY CENTRAL INDEX KEY: 0001309425 IRS NUMBER: 000000000 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: P.O. BOX 309 CITY: GEORGE TOWN STATE: E9 ZIP: 00000 BUSINESS PHONE: 212-582-3276 MAIL ADDRESS: STREET 1: P.O. BOX 309 CITY: GEORGE TOWN STATE: E9 ZIP: 00000 SC 13D 1 c34938_sc13d.txt NY2-514181 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULES 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a) Far East Energy Corporation - -------------------------------------------------------------------------------- (Name of Issuer) - -------------------------------------------------------------------------------- Common Stock, $.001 par value (Title of Class of Securities) 307325100 - -------------------------------------------------------------------------------- (CUSIP Number) Kristian Wiggert Morrison & Foerster LLP 21 Garlick Hill London EC4V 2AU England +44-20-7815-1150 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) - -------------------------------------------------------------------------------- December 21, 2004 (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1 (e), 13d-1(f) or 13d-1 (g), check the following box. |_| (Continued on following pages) (Page 1 of 15 Pages) *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the NOTES). - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 2 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SOFAER CAPITAL ASIAN FUND - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 19,518,750 (includes 300,000 shares of common stock issuable upon exercise of warrants issued to Soafer Capital Inc., an affiliate of Sofaer Capital Asian Fund and Sofaer Capital Global Fund as a finders fee over which only Sofaer Capital Inc., Sofaer Capital Asian Fund and Sofaer Capital Global Fund have shared voting power) -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON 7,800,000 WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,800,000 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 3 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SOFAER CAPITAL GLOBAL FUND - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 19,518,750 (includes 300,000 shares of common stock issuable upon exercise of warrants issued to Soafer Capital Inc., an affiliate of Sofaer Capital Asian Fund and Sofaer Capital Global Fund as a finders fee over which only Sofaer Capital Inc., Sofaer Capital Asian Fund and Sofaer Capital Global Fund have shared voting power) -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON 7,800,000 WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,800,000 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 4 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) SOFAER CAPITAL INC. - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* SC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 19,518,750 (includes 300,000 shares of common stock issuable upon exercise of warrants issued to Soafer Capital Inc., an affiliate of Sofaer Capital Asian Fund and Sofaer Capital Global Fund as a finders fee over which only Sofaer Capital Inc., Sofaer Capital Asian Fund and Sofaer Capital Global Fund have shared voting power) -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON 7,800,000 WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,800,000 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 10.1% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 5 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) RESTRUCTURING INVESTORS LIMITED - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION British Virgin Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 19,368,750 (includes 150,000 shares of Common Stock issuable upon exercise of warrants issued to Restructuring Investors Limited as a finders fee) OWNED BY -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH 3,900,000 REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,900,000 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 5.2% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 6 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PASSLAKE LIMITED - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 19,218,750 OWNED BY -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH 468,750 REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 468,750 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.1% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- - ------------------------------- -------------------------- CUSIP NO. 307325100 13D PAGE 7 OF 15 PAGES - ------------------------------- -------------------------- - ---------- --------------------------------------------------------------------- 1 NAME OF REPORTING PERSONS --------------------------------------------------------------------- I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) PERSISTENCY - ---------- --------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) |X| (b) |_| - ---------- --------------------------------------------------------------------- 3 SEC USE ONLY - ---------- --------------------------------------------------------------------- 4 SOURCE OF FUNDS* WC - ---------- --------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) |-| - ---------- --------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Cayman Islands -------- --------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF SHARES -------- --------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY 19,218,750 OWNED BY -------- --------------------------------------------------- 9 SOLE DISPOSITIVE POWER EACH 7,500,000 REPORTING -------- --------------------------------------------------- 10 SHARED DISPOSITIVE POWER PERSON WITH - ---------- --------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,500,000 - ---------- --------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |-| - ---------- --------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.8% - ---------- --------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* CO - ---------- --------------------------------------------------------------------- SCHEDULE 13D 1. SECURITY AND ISSUER. This statement on Schedule 13D (this "Statement") relates to the common stock, par value $0.001 per share (the "Common Stock"), of Far East Energy Corporation (the "Issuer"). The principal executive offices of the Issuer are located at 400 N. Sam Houston Parkway East, Suite 205, Houston, Texas, 77060. 2. IDENTITY AND BACKGROUND. A. This statement is filed by each of the following persons (the "Reporting Persons"): (i) Sofaer Capital Global Fund ("SCGF") and an affiliate of SCAF (as defined below); (ii) Sofaer Capital Asian Fund ("SCAF") and an affiliate of SCGF; (iii) Sofaer Capital Inc. ("Sofaer") and an affiliate of SCGF and SCAF; (iv) Restructuring Investors Limited, a British Virgin Islands Limited Liability Company ("Restructuring"); (v) Passlake Limited, a Cayman Islands investment holding company ("Passlake"); and (vi) Persistency, a Cayman Islands limited company ("Persistency"). B. Set forth below is certain information as specified in Instruction 2 to Schedule 13D with respect to each of the Reporting Persons. - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Name of Reporting Person Jurisdiction of Principal Business of Address of Principal Business Address of Organization of Reporting Person of Reporting Person Principal Office of Reporting Person Reporting Person, if different - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- SOFAER CAPITAL GLOBAL CAYMAN ISLANDS C/O CALEDONIAN BANK AND TRUST, FUND LTD. CALEDONIAN HOUSE GEORGE TOWN, GRAND CAYMAN, CAYMAN ISLANDS - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- SOFAER CAPITAL INC. - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- SOFAER CAPITAL ASIAN FUND CAYMAN ISLANDS C/O CALEDONIAN BANK AND TRUST, LTD. CALEDONIAN HOUSE GEORGE TOWN, GRAND CAYMAN, CAYMAN ISLANDS - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- RESTRUCTURING INVESTORS BRITISH VIRGIN INVESTMENT HOLDING C/O SILEX MANAGEMENT LIMITED P.O. BOX 173 LIMITED ISLANDS COMPANY RUE KLEBERG 6 KINGSTON CHAMBERS CH1201 ROAD TOWN GENEVA TORTOLA SWITZERLAND BRITISH VIRGIN ISLANDS - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Silex Trust Company Jersey Trust f/b/o Julien Stuart House Limited, as Trustee of Andre Treger 84 Cadogan Square the Treger Family Trust London SW1X OD2 United Kingdom - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Silex Management Limited British Virgin Sole Director of Rue Kleberg 6 P.O. Box 173 Islands Silex Trust Company CH1201 Kingston Chambers Limited Geneva Road Town Switzerland Tortola British Virgin Islands - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Silex Holdings Limited British Virgin Parent of Silex Trust Rue Kleberg 6 P.O. Box 173 Islands Company Limited and CH1201 Kingston Chambers Silex Management Geneva Road Town Limited Switzerland Tortola British Virgin Islands - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Klaus Biedermann Liechtenstein Director of Silex Gschind 865 Trust Company Limited 9497 Friesenberg and Silex Management Liechtenstein Limited (Professional Trustee) - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Mario Staggl Liechtenstein Director of Silex Gschind 865 Trust Company Limited 9497 Friesenberg and Silex Management Liechtenstein Limited (Professional Trustee) - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Brian Padgett Switzerland Director of Silex Route de Corniere 3 trust Company Limited 1241 Puplinge and Silex Management Switzerland Limited (Funds Manager and Chartered Accountant) - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Leonard O'Brien Switzerland Director of Silex Chemin Villa Rose 3B trust Company Limited 1291 Commugny and Silex Management Switzerland Limited (Funds Manager and Chartered Accountant) - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- PASSLAKE LIMITED CAYMAN ISLANDS P.O. BOX 309 SOUTH CHURCH STREET GEORGE TOWN GRAND CAYMAN CAYMAN ISLANDS - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Gregor McIntosh Switzerland Director of Passlake c/o Limited Cavamont Services SA 40 Rue du Rhone 1204 Geneva Switzerland - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Constantine G. Switerland Director of Passlake c/o Papadimitriou Limited Cavamont Services SA 40 Rue du Rhone 1204 Geneva Switzerland - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Passlake Foundation Liechtenstein Family Foundation Heiligkreuz 6 controlling Passlake PO Box 484 Limited 9490 Vaduz Liechtenstein - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Dr. Peter Marxer Liechtenstein Member of Foundation c/o Marxer & Partner Council Rechtsanwalte Heiligkreuz 6 9490 Vaduz Liechtenstein - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Dulkara Anstalt Liechtenstein Member of Foundation Stadtle 36 Council 9490 Vaduz Liechtenstein - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- PERSISTENCY CAYMAN ISLANDS INVESTMENT FUND UGLAND HOUSE P.O. BOX 309 GEORGE TOWN GRAND CAYMAN BRITISH WEST INDIES - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Luca Padulli United Kingdom Director/Investor Barton Berdish Hall Barton Berdish Norfolk, PE 33 PDL United Kingdom - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Andrew Morris United Kingdom Director/Business Top Flat Manager 40 Parma Crescent London SW11 1LT United Kingdom - -------------------------- ------------------- ----------------------- --------------------------------- --------------------- Viscount Alex Bridport Switzerland Director/Broker Ch. De Beau Soleil 8 1206 Geneva Switzerland - -------------------------- ------------------- ----------------------- --------------------------------- ---------------------
During the last five years, none of the Reporting Persons or, to the best of their knowledge, any of their directors, managers or executive officers, if any, have been convicted of any criminal proceeding (excluding traffic violations or similar misdemeanors) or have been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to federal or state securities laws or finding any violation with respect to such laws. 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The Reporting Persons acquired the shares to which this Statement relates pursuant to a private placement transaction that occurred on December 21, 2004. The Issuer sold to each of the Reporting Persons units consisting of two shares of Common Stock and one warrant to purchase one share of Common Stock (the "Units"). The purchase price per Unit paid by the Purchasers was $1.60 for an aggregate purchase price of $10,250,000. Each of the warrants has an exercise price of $2.50. Funds for the purchase of the Units were derived from available capital of the Reporting Persons. Certain of the Reporting Persons or their affiliates received warrants from the Issuer as a finders fee in connection with the transaction. 4. PURPOSES OF TRANSACTION. The shares of Common Stock have been acquired by the Reporting Persons for investment purposes. Except for the actions referred to in the preceding sentence, none of the persons on behalf of whom this Statement is filed currently has other plans or proposals that relate to or would result in any of the consequences listed in paragraphs (a) through (j) of Item 4 of the Special Instructions for Schedule 13D. Each of the Reporting Persons intends to review on a continuing basis the investments it has in the Issuer and based on such continuing review, and all other factors deemed relevant, such Reporting Person may sell or seek the sale of all or part of the shares or to increase their holdings of shares of Common Stock. 5. INTEREST IN SECURITIES OF THE ISSUER. A. The responses set forth on each of the cover pages with respect to the Reporting Persons are hereby incorporated by reference herein. The aggregate number of shares of Common Stock of the Issuer outstanding as of December 16, 2004 was 67,873,535. As a group, the Reporting Persons currently own 19,668,750 shares (6,856,250 of which may be acquired pursuant to exercise of the warrants), or 22.5%, of the Common Stock. Each Reporting Person declares that the filing of this Statement shall not be construed as an admission that such Reporting Person is, for the purposes of Section 13(d) of the Act, the beneficial owner of any securities owned by any other Reporting Person and covered by this Statement and disclaims any such beneficial ownership. B. The Reporting Persons have shared power to vote 19,218,750 shares of Common Stock. Sofaer, SCGF and SCAF have shared power to vote 300,000 shares of Common Stock and shared dispositive power over 7,800,000 shares of Common Stock. Restructuring has sole dispostive power over 3,900,000 shares of Common Stock, Passlake has sole dispositive power over 468,750 shares of Common Stock and Persistency has sole dispositive power over 7,500,000 shares of Common Stock. C. Not applicable. D. Not applicable. E. Not applicable. 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. In connection with the private placement transaction, each of the Reporting Persons (or their representative) entered into a Stock Subscription Agreement, dated as of December 21, 2004 by and between the Issuer, the Reporting Persons and Tim Whyte as initial representative of the Reporting Persons, a Registration Rights Agreement with the Issuer, dated as of December 21, 2004 with respect to the registration of the shares of Common Stock and the shares of Common Stock underlying the warrants, and an Investor Group Agreement, dated December 23, 2004, among the Reporting Persons which governs certain interactions among the Reporting Persons with respect to the Common Stock held by them. Certain of the Reporting Persons entered into a letter agreement dated as of December 21, 2004 with respect to the payment of finders fees. The information included in response to Items 3 and 4 is incorporated into this response. Except as set forth in this Schedule 13D, to the best knowledge of the Reporting Persons, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between the Reporting Persons and any person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any of the securities of the Issuer, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, or a pledge or contingency the occurrence of which would give another person voting power or investment power over the securities of the Issuer. 7. MATERIAL TO BE FILED AS EXHIBITS. EXHIBIT NO. Exhibit 1. Stock Subscription Agreement dated as of December 21, 2004, by and among the Issuer, the Reporting Persons and Tim Whyte, as initial representative of the Reporting Persons. Exhibit 2. Form of Registration Rights Agreement dated as of December 21, 2004, by and among the Issuer and the Reporting Persons. Exhibit 3. Investor Group Agreement dated as of December 23, 2004, by and among Chasm Lake Management Services LLC (for itself and as representative of Peristency), Sofaer Capital Inc. (as agent for Caledonian Bank and Trust, Ltd., as trustee for SCGF and SCAF), Restructuring and Passlake. Exhibit 4. Joint Filing Agreement and Power of Attorney dated as of December 23, 2004 by and among the Reporting Persons. SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. December 31, 2004 SOFAER CAPITAL GLOBAL FUND By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact SOFAER CAPITAL ASIAN FUND By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact SOFAER CAPITAL INC. By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact RESTRUCTURING INVESTORS LIMITED By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact PERSISTENCY By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact PASSLAKE LIMITED By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact EX-99.1 2 c34938_ex99-1.txt EXHIBIT 1 EXECUTION COPY STOCK SUBSCRIPTION AGREEMENT This STOCK SUBSCRIPTION AGREEMENT ("AGREEMENT") is made and entered into as of the Subscription Date by and between Far East Energy Corporation, a Nevada corporation (the "COMPANY"), the individuals or entities whose names appear on the last page of this Agreement (individually, a "PURCHASER" and collectively, the "PURCHASERS") and Tim Whyte, as the initial Representative of the Purchasers. PRELIMINARY STATEMENT The Purchasers desire to purchase and the Company desires to offer and sell to the Purchasers units, each consisting of two shares of the Company's common stock, par value $0.001 per share (the "COMPANY COMMON STOCK"), and a warrant to purchase one share of Company Common Stock (each, a "UNIT" and collectively, the "UNITS"). AGREEMENT The parties, intending to be legally bound, agree as follows: ARTICLE 1 SALE OF SHARES AND WARRANT 1.1 SALE OF UNITS. Each Purchaser will purchase from the Company the number of Units set forth opposite such Purchaser's signature on the last page of this Agreement, each consisting of two shares of Company Common Stock (such shares the "SHARES"), and a warrant to purchase one share of Company Common Stock in the form of EXHIBIT A attached hereto (the "WARRANT") at a price of U.S. $1.60 per Unit (the "PURCHASE PRICE") in cash (the total price paid for such Units the "TOTAL PURCHASE PRICE"). ARTICLE 2 CLOSING; DELIVERY 2.1 CLOSING. The closing (the "CLOSING") of the purchase and sale of the Units to the Purchasers hereunder shall be held at 9 Upper Belgrave Street, London, on the date upon which the Company accepts and signs this Agreement (such date, the "SUBSCRIPTION DATE"), or at such other time and place as the Company and the Purchasers mutually agree upon. 2.2 DELIVERY. At the Closing, the Company shall execute and deliver to each Purchaser this Agreement, the Warrant covering the number of shares of Company Common Stock applicable to such Purchaser and the Registration Rights Agreement in the form attached hereto as EXHIBIT B (the "REGISTRATION RIGHTS AGREEMENT"). On or before the date ending ten business days after the date of the Closing, the Company shall deliver or cause the delivery to each Purchaser of a stock certificate representing the number of Shares purchased by such Purchaser. At the Closing, the Purchasers shall pay the Company the Total Purchase Price in immediately available funds. ARTICLE 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY The Company represents and warrants to, and covenants with, the Purchasers as follows: 3.1 ORGANIZATION AND STANDING. The Company and each of its Subsidiaries, if any, is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization. The Company and each of its Subsidiaries, if any, has all requisite power and authority to own and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted. The Company and each of its Subsidiaries, if any, is qualified to do business as a foreign entity in every jurisdiction in which the failure to be so qualified would have a Material Adverse Effect. "MATERIAL ADVERSE EFFECT" means any material adverse effect on the business, operations, assets, or financial condition of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. "SUBSIDIARY" means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any more than fifty percent of equity or other ownership interest. 3.2 POWER. The Company has all requisite power to execute and deliver this Agreement, the Warrant and the Registration Rights Agreement (collectively, the "TRANSACTION DOCUMENTS"), to sell and issue the Shares hereunder and pursuant to the Warrant, and to carry out and perform its obligations under the terms of the Transaction Documents. 3.3 AUTHORIZATION. The execution, delivery, and performance of this Agreement by the Company has been duly authorized by all requisite action, and each of the Transaction Documents constitutes the legal, valid, and binding obligation of the Company enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights. 3.4 CONSENTS AND APPROVALS. The Company need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by the Transaction Documents. 3.5 NON-CONTRAVENTION. The execution, delivery and performance of each of the Transaction Documents by the Company, and the consummation by the Company of the transactions contemplated thereby, will not (a) conflict with or result in a violation of any provision of the Articles of Incorporation or Bylaws of the Company, (b) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party or (c) result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is in violation of its Articles of Incorporation, Bylaws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted in violation of any law, rule, regulation, order, judgment or decree applicable to the Company or any of its Subsidiaries or their respective properties or assets, ordinance or regulation of any governmental entity, except for such violations as would not, individually or in the aggregate, have a Material Adverse Effect. 3.6 SHARES. The Shares, when issued, sold and delivered in accordance with the terms of this Agreement, will be (a) duly and validly issued, fully paid and nonassessable, (b) free of restrictions on transfer other than restrictions on transfer under the Transaction Documents and applicable securities laws, (c) free of any liens, mortgages, claims, charges, security interests, restrictions or encumbrances of any kind ("LIENS") other than as may be created by a Purchaser, and (d) not subject to any rights of first refusal, preemptive or similar rights existing prior to the issuance thereof. The shares of Company Common Stock underlying the Warrant have been duly and validly reserved in sufficient amount for issuance and, upon issuance, will be (i) duly and validly issued, fully paid and nonassessable, (ii) free of restrictions on transfer other than restrictions on transfer under the Transaction Documents and applicable securities laws, (iii) free of Liens other than as may be created by a Purchaser, and (iv) not subject to any rights of first refusal, preemptive or similar rights other than as set forth in the Transaction Documents. 3.7 CAPITALIZATION. The authorized capital stock of the Company is as described in the section entitled "Description of Capital Stock" in the Company's Registration Statement on Form S-2, No. 333-117635, as amended through the date hereof (the "FORM S-2"). As of December 16, 2004, 61,467,285 shares of Company Common Stock are issued and outstanding and 18,318,472 shares of Company Common Stock are issuable upon the exercise of outstanding options or warrants. All of such shares of Company Common Stock are, or upon issuance will be, duly authorized, validly issued, fully paid and nonassessable. Except as contemplated by the Transaction Documents or listed on Schedule 3.7, no shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the stockholders of the Company. Except as set forth in this Section 3.7 or listed on Schedule 3.7, there are no outstanding options, warrants, rights (including, without limitation, rights of first refusal, anti-dilution, conversion, preemptive or similar rights) or agreements for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or ultimately exchangeable or exercisable for any shares of its capital stock other than as provided in the Transaction Documents. 3.8 OFFERING. Subject in part to the truth and accuracy of each Purchaser's representations set forth in Article 3 of this Agreement and in the Warrant, the offer, sale and issuance of the Shares and the Warrant as contemplated by the Transaction Documents, and of the shares of Company Common Stock issuable pursuant to the Warrant are (or in the case of the shares of Company Common Stock issuable pursuant to the Warrant, will be) exempt from the registration requirements of the Securities Act of 1933, as amended (the "SECURITIES ACT"), and will not result in a violation of the qualification or registration requirements of any applicable securities laws of any U.S. state or any jurisdiction outside the U.S., and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. 3.9 REPORTS AND FINANCIAL STATEMENTS; ABSENCE OF CERTAIN CHANGES. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company with the Securities and Exchange Commission (the "SEC") pursuant to the Securities Act and the reporting requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT") as of the Subscription Date (such documents, together with any documents otherwise filed by the Company with the SEC, the "SEC DOCUMENTS"), and has previously furnished or made available to each of the Purchasers true and complete copies of such SEC Documents and shall promptly deliver or make available to each of the Purchasers any SEC Documents filed between the date hereof and the Subscription Date. None of such SEC Documents, as of their respective dates (and as amended through the date hereof), contained or, with respect to SEC Documents filed after the date hereof, will contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except as disclosed on Schedule 3.9 to this Agreement. Since September 30, 2004, there has been no event that would have a Material Adverse Effect, except as disclosed herein and in the SEC Documents. 3.10 LITIGATION. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company, or their officers or directors in their capacity as such, that could have a Material Adverse Effect, except as disclosed in the SEC Documents. 3.11 REGISTRATION RIGHTS. As of the date hereof, the Company has not granted or agreed to grant any registration rights, including piggyback rights, to any person or entity except as disclosed in the SEC Documents, as provided in the Registration Rights Agreement or listed in Schedule 3.11 of this Agreement. 3.12 APPOINTMENT TO BOARD OF DIRECTORS. On or before the date ending thirty days after the date of the Closing, the Company agrees to appoint Tim Whyte as a member of the Company's Board of Directors to serve until the next meeting of the stockholders of the Company called for the purpose of electing directors of the Company, provided that such appointment shall be subject to the terms and conditions of clause (b) of this Section 3.12. The Company further agrees to nominate Tim Whyte or such other person designated by the Representative to the Company's Board of Directors ("PURCHASERS' DESIGNEE") for election by the stockholders of the Company to the Board of Directors at each meeting of the Company's stockholders called for the purpose of electing directors of the Company, provided that at the time of such appointment and nomination (a) the Purchasers, in the aggregate, "beneficially own" (within the meaning of Rule 13d-3 under the Exchange Act) at least 10% of the outstanding shares of the Company Common Stock, and (b) such Purchasers' Designee is satisfactory to the Nomination and Corporate Governance Committee of the Company's Board of Directors (the "NOMINATION COMMITTEE"), acting reasonably, after the Nomination Committee's consideration of, among other things, the standards pertaining to the nomination of directors of the Company as set forth in the Nomination Committee's Charter and all relevant disclosures that may be required by reason of such appointment and nomination under Regulation S-K promulgated under the Securities Act. 3.13 SUBSEQUENT OFFERINGS. (a) For a period of eighteen months following the Subscription Date, if the Company's Board of Directors determines to pursue an offering of debt or equity securities of the Company in a capital raising transaction (a "PROPOSED OFFERING"), then prior to its commencement, the Company will notify the Representative of such Proposed Offering (a "CAPITAL RAISING NOTICE"). The Capital Raising Notice shall include the type of debt or equity securities to be offered, the aggregate amount intended to be raised in the Proposed Offering or a range thereof and such other terms as the Board of Directors may reasonably determine to be necessary or appropriate taking into account prevailing market conditions (the "OFFERED SECURITIES"). The Representative shall have the exclusive right during the forty-five (45) day period following the date of the Company's issuance of the Capital Raising Notice (the "EXCLUSIVITY PERIOD") to consummate the purchase of all or a part of the Offered Securities by one or more of the Purchasers or a syndicate of investors arranged by the Representative, in each case, subject to the terms and conditions set forth in the Capital Raising Notice. Notwithstanding anything contained herein to the contrary, during the Exclusivity Period, the Company shall have the right to discuss the terms of the Proposed Offering with placement agents, financial advisors, underwriters and finders ("FUNDRAISERS"); provided that in no event may the Company enter into an agreement binding upon the Company with respect to the Proposed Offering (other than confidentiality agreements) with such Fundraisers during the Exclusivity Period. (b) During the Exclusivity Period, if the Representative shall provide the Company with a proposal to purchase all or a portion of the Offered Securities upon similar terms as contained in the Capital Raising Notice, then the Representative shall notify the Company, which notice shall describe the terms of such proposal in reasonable detail, including any and all fees required to be incurred in connection with the issuance and sale of the Offered Securities (the "PURCHASER PROPOSAL"). As soon as reasonably practical following the Company's notice of such Purchaser Proposal, the Company's Board of Directors shall review and consider in good faith the Purchaser Proposal and make a determination as to whether to approve the Purchaser Proposal, which determination shall consider whether the terms of, and all fees that may be incurred by the Company in connection with, the issuance and sale of the Offered Securities are customary for a transaction of this nature. Any such determination by the Company's Board of Directors shall also be subject to the fiduciary duties and obligations of the Company's Board of Directors. If the Representative fails to submit, fails to close or the Company's Board of Directors fails to approve the Purchaser Proposal on or before the expiration of the Exclusivity Period in accordance with the terms and conditions of this Section 3.9, then the Company may offer and sell the Offered Securities to one or more third parties upon similar terms specified in the Capital Raising Notice without any obligation to submit another Capital Raising Notice to the Representative. (c) The Company agrees that if the Company receives a bona fide offer for the issuance and sale of Company's debt or equity securities in a capital raising transaction during the period commencing on the Subscription Date and ending on June 30, 2005 (a "THIRD PARTY OFFER"), and such Third Party Offer, when aggregated with all other sales of the Company's debt or equity securities in a capital raising transaction during such period, exceeds $1,000,000, then the Representative shall have the right, but not the obligation, to submit a proposal to purchase the Company's debt or equity securities by the Representative or syndicate of investors arranged by the Representative on terms and conditions more favorable to the Company than contained in the Third Party Offer. Any such proposal by the Representative shall be submitted to the Company within a reasonable period of time after the Company notifies the Representative of the Third Party Offer. The Company's Board of Directors shall review and consider in good faith any such proposal submitted by the Representative and make a determination as to whether to approve such proposal. (d) The Purchasers' and the Representative's rights and the Company's obligations under this Section 3.13 shall be subject to, and may be exercised only to the extent not in conflict with or violation of, the rights of Westminster Securities Corp. pursuant to the Company's agreement with Westminster Securities Corp. in effect as of the Subscription Date. The Purchasers and the Representative understand and agree that this Section 3.13 shall in no event apply to (i) the private placement of securities with proceeds to the Company of up to $10,000,000 pursuant to which Bathgate Capital Partners LLC acts a placement agent, (ii) any determination to seek, negotiate or enter into a loan or credit facility (with no associated rights to receive, upon conversion of outstanding balances or otherwise, any securities of the Company) with a commercial bank or lender or (iii) the exercise or conversion of any securities of the Company outstanding as of the Subscription Date. 3.14 LISTING. The Company will use its commercially reasonable efforts to list or include the Company Common Stock on a recognized exchange, such as, The Nasdaq National Market, the Hong Kong Stock Exchange or AIM on or before June 30, 2005. During the period between the Subscription Date and February 28, 2005, the Company shall consult with the Representative regarding an appropriate choice of exchange and the Company shall consider in good faith its consultation with the Representative in its determination of the appropriate exchange for any listing or inclusion of the Company Common Stock. The Company shall not be required to apply on more than one exchange at any time and during any period in which an application on another exchange is under review by that exchange. ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS Each Purchaser represents and warrants to, and covenants with, the Company with respect to this purchase as follows: 4.1 ORGANIZATION AND STANDING. Such Purchaser is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its organization. 4.2 POWER. Such Purchaser has all requisite power to execute and deliver this Agreement and the other Transaction Documents and to carry out and perform its obligations under the terms of this Agreement and the other Transaction Documents. 4.3 AUTHORIZATION. The execution, delivery, and performance of each of the Transaction Documents by such Purchaser has been duly authorized by all requisite action, and each of the Transaction Documents constitutes the legal, valid, and binding obligation of such Purchaser enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, or similar laws relating to or affecting the enforcement of creditors' rights. 4.4 CONSENTS AND APPROVALS. Such Purchaser need not give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order to consummate the transactions contemplated by the Transaction Documents, except as contemplated by the Transaction Documents or in order to comply with applicable security laws. 4.5 NON-CONTRAVENTION. Neither the execution and the delivery of the Transaction Documents, nor the consummation of the transactions contemplated thereby, will violate in any material respect any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which such Purchaser is subject. No approval, waiver, or consent by such Purchaser under any instrument, contract, or agreement to which such Purchaser or any of its affiliates is a party is necessary to consummate the transactions contemplated by the Transaction Documents. 4.6 RECEIPT OF INFORMATION. Such Purchaser has had an opportunity to review the SEC Documents. Such Purchaser has been advised that on November 9, 2004, the Company filed with the SEC Amendment No. 1 to the Form S-2 and amendments to its periodic filings under the Securities Exchange Act of 1934, as amended, including its Form 10-KSB for the year ended December 31, 2003 and its Form 10-Q for the period ended September 30, 2004. Such Purchaser further understands that the SEC is currently reviewing the Form S-2 and the Company's periodic filings. Such Purchaser acknowledges that it can obtain and has had the opportunity to review the Company's SEC filings over the Internet at the SEC's website at http://www.sec.gov. Such Purchaser has received all such information that such Purchaser deems necessary and appropriate to enable such Purchaser to evaluate the financial risk inherent in making an investment in the Shares. Such Purchaser has received all information requested by such Purchaser concerning the business and financial condition of the Company in response to such Purchaser's inquiries. 4.7 RISK OF INVESTMENT; ACCREDITED INVESTOR. Such Purchaser realizes that the purchase of the Units and the underlying securities subject thereto will be a highly speculative investment. Such Purchaser is able, without impairing such Purchaser's financial condition, to hold such securities for an indefinite period of time and to suffer a complete loss of such Purchaser's investment. Such Purchaser understands all of the risks related to the purchase of the Units. By virtue of such Purchaser's experience in evaluating and investing in private placement transactions of securities in companies similar to the Company, such Purchaser is capable of evaluating the merits and risks of such Purchaser's investment in the Company and has the capacity to protect such Purchaser's own interests. Furthermore, such Purchaser qualifies as an "accredited investor" as defined in Rule 501(a) of Regulation D under the Securities Act. 4.8 ADVISORS. Such Purchaser has reviewed with its own tax advisors the federal, state, and local tax consequences of this investment and the transactions contemplated by this Agreement. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents and the transactions contemplated thereby with such Purchaser's own legal counsel. Such Purchaser is relying solely on its legal counsel and tax advisors and not on any statements or representations of the Company or any of the Company's agents for legal or tax advice with respect to this investment or the transactions contemplated by this Agreement. 4.9 FINDER. Such Purchaser is not obligated and will not be obligated to pay any broker commission, finders' fee, success fee, or commission in connection with the transactions contemplated by the Transaction Documents. 4.10 RESTRICTED SHARES. Such Purchaser understands that the Shares and the shares of Company Common Stock subject to the Warrant must be held indefinitely unless subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. Moreover, such Purchaser understands that except as set forth in the Registration Rights Agreement, the Company is under no obligation to register the Shares or the shares of Company Common Stock subject to the Warrant. Such Purchaser is aware of Rule 144 promulgated under the Securities Act that permits limited resales of securities purchased in a private placement subject to the satisfaction of certain conditions. 4.11 LEGEND. It is understood by such Purchaser that any certificate representing any Units and each certificate representing the Shares shall be endorsed with the following legend: "THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THESE SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION S OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE PURCHASER WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTION IS AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT." The Company need not register a transfer of Shares unless the conditions specified in the foregoing legend are satisfied. The Company may also instruct its transfer agent not to register the transfer of any of the Shares unless the conditions specified in the foregoing legend are satisfied. 4.12 REMOVAL OF LEGEND AND TRANSFER RESTRICTIONS. It is understood by such Purchaser that the legend relating to the Securities Act endorsed on a stock certificate pursuant to Section 4.11 of this Agreement and the stop transfer instructions with respect to the Shares represented by such certificate shall not be removed until such Shares are sold pursuant to an effective registration statement, or the holder of such Shares provides to the Company an opinion of counsel for such holder of the Shares reasonably satisfactory to the Company or a no-action letter or interpretive opinion of the staff of the SEC to the effect that a public sale, transfer, or assignment of such Shares may be made in compliance with, and without registration under, the Securities Act. Any legend imposed by state securities laws will be removed if the state agency imposing such legend has consented to its removal. Each Purchaser acknowledges that the Company reserves the right prior to any offer, sale or other transfer of the Shares prior to the end of the Restricted Period (as defined below) to require the delivery of a letter from the transferee satisfactory to the Company, which shall provide, as applicable, among other things, that the transferee is an institution that, at the time the buy order was originated, was outside the United States and was not a U.S. person (whenever such term is used herein, it shall have the meaning given in Regulation S) within the meaning of Regulation S under the Securities Act. 4.13 OFFSHORE TRANSACTION. (a) Such Purchaser is not a U.S. person and Rules 901 through 903 of Regulation S govern this transaction. (b) At the time such Purchaser executed and delivered this Agreement, such Purchaser was outside the United States and is outside of the United States as of the date of the execution and delivery of this Agreement. (c) Each distributor participating in the offering of the Units, if any, has agreed in writing that all offers and sales of the Units and the Shares and Warrants underlying the Units prior to the expiration of a period commencing on the date of the Closing and ending one year thereafter, unless adjusted as hereinafter provided (the "RESTRICTED PERIOD"), shall only be made in compliance with the safe harbor contained in Regulation S, pursuant to registration of the Units under the Securities Act or pursuant to an exemption from registration under the Securities Act. (d) All offers and sales of the Units and the Shares and Warrants underlying the Units by such Purchaser prior to the expiration of the Restricted Period shall only be made in compliance with the safe harbor contained in Regulation S, pursuant to registration under the Securities Act or pursuant to an exemption from registration under the Securities Act, and all offers and sales after the Restricted Period shall be made only pursuant to such a registration or to such exemption from registration. (e) Such Purchaser acknowledges and agrees that all agreements, certificates, documents and instruments received by such Purchaser shall include statements to the effect that the Units and the Shares and Warrants underlying the Units have not been registered under the Securities Act and may not be offered or sold in the United States or to or for the account or benefit of a U.S. person (other than distributors as defined in Regulation S) during the Restricted Period unless the Units and the Shares and Warrants underlying the Units are registered under the Securities Act or an exemption from the registration requirements is available. (f) Such Purchaser will not engage in any hedging transactions as precluded by Regulation S under the Securities Act. 4.14 PURCHASE FOR INVESTMENT ONLY. Such Purchaser acknowledges that, in the view of the SEC, the statutory exemption claimed for this transaction would not be present if the offering of the Units and the Shares and Warrants underlying the Units, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the Act. Such Purchaser is purchasing the Units for its own account for investment purposes only and not on behalf of any U.S. person. Such Purchaser has no present intention to sell the stock in the United States or to a U.S. person or for the account or benefit of a U.S. person either now or promptly after the expiration of the Restricted Period. By executing this Agreement, such Purchaser further represents that it does not have any contract, undertaking, agreement, or arrangement with any person to sell, transfer, or grant participation to such person or to any third person, with respect to any of the Units or any of the underlying securities subject thereto. Such Purchaser understands that neither the Units nor the underlying securities subject thereto have not been registered under the Act or any applicable state securities laws by reason of a specific exemption therefrom that depends upon, among other things, the bona fide nature of the investment intent as expressed herein. 4.15 RELIANCE UPON REPRESENTATIONS. Such Purchaser understands that the Units and the Shares and Warrants underlying the Units are being offered and sold to it in reliance on an exemption from the registration requirements of federal and state securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and undertakings of such Purchaser set forth herein in order to determine the applicability of such exemption and the suitability of such Purchaser to acquire the Units. ARTICLE 5 PARTICIPATION RIGHT 5.1 GRANT OF RIGHT. Subject to the terms and conditions of this Article 5, the Company hereby grants to each Purchaser the right to purchase a PRO RATA share of New Securities (as defined below), which the Company may, from time to time, sell and issue. Each Purchaser's PRO RATA share, for purposes of this Article 5, is the ratio of the number of shares of Company Common Stock owned by such Purchaser immediately prior to the issuance of New Securities, assuming full exercise and conversion of all outstanding rights, options and warrants to acquire shares of Company Common Stock held by such Purchaser, to the total number of shares of Company Common Stock outstanding immediately prior to the issuance of New Securities, assuming full exercise and conversion of all outstanding rights, options and warrants to acquire shares of Company Common Stock. In the event a Purchaser exercises its rights under and pursuant to the terms and conditions of this Article 5, then the Company, in its discretion, shall have the right to either permit such Purchaser to purchase such New Securities from the Company in the transaction involving the issuance of such New Securities or purchase such New Securities from the Company separate and apart from such transaction. The right to acquire New Securities granted under this Article 5 shall expire upon the eighteen-month anniversary of the Subscription Date. For the avoidance of doubt, the rights and obligations of the Purchasers and the Company, respectively, set forth in this Article 5 are separate and distinct from any other rights and obligations in respect of the issuance of securities of the Company, including without limitation the provisions of Section 3.13 hereof. Any right of a Purchaser to exercise its right to purchase any New Securities under this Article 5 shall be subject to the compliance thereof with the Securities Act and any other applicable securities laws and the receipt by the Company of such representations and agreements relating thereto from such Purchaser as given by the other purchasers of New Securities or as otherwise customary for a transaction involving the New Securities and reasonably requested by the Company. 5.2 NOTICE; EXERCISE. In the event the Company proposes to undertake an issuance of New Securities, it shall give each Purchaser written notice of its intention, describing the type of New Securities, and their price and the general terms upon which the Company proposes to issue the same. Such Purchaser shall have fifteen days after any such notice is received to agree to purchase such Purchaser's PRO RATA share of such New Securities for the price (or anticipated price or price range, if applicable) and upon the terms specified in the notice by giving written notice to the Company and stating therein the quantity of New Securities to be purchased. A Purchaser's failure to respond within the fifteen day period shall be deemed a waiver of its right to acquire New Securities. 5.3 NEW SECURITIES. For purposes of this Article 5, the term "NEW SECURITIES" shall mean any capital stock of the Company at the time entitled to vote in the election of the Company's Board of Directors (including Company Common Stock and/or preferred stock) whether now authorized or not, and rights, options or warrants to purchase such capital stock, and securities of any type whatsoever that are, or may become, convertible into or exchangeable for capital stock, in each case sold by the Company in a capital raising transaction; provided that the term "New Securities" shall not include (a) securities issued pursuant to the acquisition of another business entity or business segment of any such entity by the Company by merger, consolidation, conversion, purchase of substantially all the assets or other reorganization, (b) securities issued upon conversion of convertible notes or securities, upon exercise of warrants, options or other rights to acquire securities or as dividends, stock splits or distributions and (c) securities issued pursuant to a private placement with proceeds to the Company of up to $10,000,000 pursuant to which Bathgate Capital Partners LLC acts a placement agent. ARTICLE 6 RIG CONSTRUCTION RIGHT 6.1 GRANT OF RIGHT. The Company agrees to consult with the Representative and consider, in good faith, a proposal, if any, from a Contractor (as defined below) relating to a joint venture, partnership or other arrangement or undertaking providing for the manufacture, production or construction of drilling rigs for the drilling of coalbed methane gas with respect to the Company's acreage holdings and rights in the People's Republic of China (the "SUBJECT ACREAGE"). The Purchasers' and Representative's rights and the Company's obligations under this Article 6 shall be subject to (a) the receipt by the Company, the Contractor and each other person party to such agreement, arrangement or undertaking receiving all permits, concessions and licenses required or necessary to participate in the construction of such rigs, (b) the approval of such agreement, arrangement or undertaking and the Contractor by all partners and venturers of the Company in the exploration and production of coalbed methane gas with respect to the Subject Acreage, including, without limitation, ConocoPhillips and China United Coalbed Methane Company and (c) the approval of such agreement, arrangement or undertaking by the Company's Board of Directors. Any proposal submitted by the Representative under this Section 6.1 shall be subject to a confidentiality agreement with the venture formed in respect of such joint venture, partnership or other arrangement or undertaking, which confidentiality agreement shall be reasonably satisfactory to such venture, the Company and the Representative. For purposes of this Agreement, the "CONTRACTOR" shall mean a person in which the Representative has a relationship that is qualified and experienced in the construction of oil and gas drilling rigs in the People's Republic of China. 6.2 RIG CONSTRUCTION. The Company and its subsidiaries agree not to enter into any venture relating to the manufacture, production or construction of any drilling rigs for the use of third parties for the drilling of coalbed methane gas in China. The Purchasers and its subsidiaries agree not to enter into commercial joint venture relating to the construction of any drilling rigs for the use of third parties for the drilling of coalbed methane gas in China. Nothing contained in this Article 6 shall be deemed to prohibit or restrict the Company from negotiating, discussing or entering into a lease, rental or service arrangement or similar undertaking with any third party relating provision and operation of any rig for the drilling of coalbed methane gas with respect to the Subject Acreage. 6.3 DURATION. All rights and obligations under this Article 6 shall commence upon the six month anniversary of the Subscription Date and shall expire upon the second anniversary of the Subscription Date. ARTICLE 7 REPRESENTATIVE 7.01. REPRESENTATIVE OF THE PURCHASERS; POWER OF ATTORNEY. With respect to Section 3.12, Section 3.13, Section 3.14 and Article 6, as of the Subscription Date, and without further act of any party, Tim Whyte shall be appointed as agent and attorney-in-fact (the "REPRESENTATIVE") for each Purchaser, for and on behalf of the Purchasers, to give and receive notices and communications, to agree to, and consult and negotiate with, the Company and such third parties deemed to be appropriate by the Representative with respect to any action or undertaking required or deemed necessary by the Representative to perform its rights and obligation under Section 3.12, Section 3.13, Section 3.14 and Article 6, and to take all actions necessary or appropriate in the judgment of the Representative for the accomplishment of the foregoing. Such agency may be changed by the Purchasers from time to time upon not less than thirty (30) days prior written notice to the Company; provided that the Representative may not be removed unless holders of at least a majority-in-interest of the outstanding Shares and shares of the Company Common Stock then held by the Purchasers (the "SECURITIES") agree to such removal and to the identity of the substituted agent. Any vacancy in the position of the Representative may be filled by approval of the holders of a majority-in-interest of the Securities. No bond shall be required of the Representative, and the Representative shall not receive compensation for his or her services. Notices or communications to or from the Representative relating to Section 3.12, Section 3.13, Section 3.14 and Article 6 shall constitute notice to or from each of the Purchasers. 7.2. ACTIONS OF THE REPRESENTATIVE. A decision, act, consent or instruction of the Representative relating to the Section 3.12, Section 3.13, Section 3.14 and Article 6 shall constitute a decision of all Purchasers, and shall be final, binding and conclusive upon each of such Purchasers and the Company may rely upon any such decision, act, consent or instruction of the Representative as being the decision, act, consent or instruction of each such Purchaser. The Company is hereby relieved from any liability to any person for any acts done by them in accordance with such decision, act, consent or instruction of the Representative. ARTICLE 8 MISCELLANEOUS 8.1 SURVIVAL. The representations and warranties contained herein shall survive the execution and delivery of this Agreement and the sale of the Units. 8.2 ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement may not be assigned by either party without the prior written consent of the other party. 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. 8.3 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 to the Company at 400 N. Sam Houston Parkway E., Suite 205, Houston, Texas 77060, Attn: Chief Executive Officer, facsimile number, (832) 598-0479 with a copy to Amar Budarapu, Esq., Baker & McKenzie, LLP, 2300 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, facsimile number, (214) 978-3099, as to a Purchaser at the address and facsimile number set forth below such Purchaser's signature on the last page of this Agreement and as to a Representative at the address and facsimile number set forth below the Representative's signature on the last page of this Agreement. 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. 8.4 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 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 New York, New York. 8.5 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. 8.6 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. 8.7 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. 8.8 ENTIRE AGREEMENT. This Agreement, including the Registration Rights Agreement and the Warrant attached as Exhibits hereto, 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. 8.9 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, the Purchasers beneficially owning (within the meaning of Rule 13d-3 under the Exchange Act of 1934, as amended) not less than seventy-five percent (75%) of the then outstanding Securities and, in the case of Section 3.8, Section 3.9, Article 6 and this Article 8, the Representative. 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 a Purchaser and that does not directly or indirectly affect, impair, limit or compromise the rights of other Purchasers may be given by such Purchaser; 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. [SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the Purchasers and the Representative have caused this Agreement to be signed by the undersigned, thereto duly authorized, as of the Subscription Date. PURCHASERS: U.S. $3,000,000 SOFAER CAPITAL GLOBAL FUND - -------------------- Amount of Investment By: Caledonian Bank and Trust Ltd., (U.S. $1.60 per Unit) as Trustee By: /s/ Michael Sofaer ----------------------------------------- 1,875,000 Name: - ----------------- --------------------------------------- (Number of Units) Title: -------------------------------------- Address: Caledonian Bank and Trust, Ltd. Caledonian House George Town Grand Cayman Cayman Islands Facsimile No: ------------------------------- U.S. $1,000,000 SOFAER CAPITAL ASIAN FUND - -------------------- Amount of Investment By: Caledonian Bank and Trust Ltd., (U.S. $1.60 per Unit) as Trustee By: /s/ Michael Sofaer ----------------------------------------- 625,000 Name: - ----------------- --------------------------------------- (Number of Units) Title: -------------------------------------- Address: Caledonian Bank and Trust, Ltd. Caledonian House George Town Grand Cayman Cayman Islands Facsimile No: ------------------------------- U.S. $ 2,000,000 RESTRUCTURING INVESTORS LIMITED --------------- Amount of Investment By: /s/ Leonard O'Brien (U.S. $1.60 per Unit) ----------------------------------------- 1,250,000 Name: Leonard O'Brien - ----------------- --------------------------------------- (Number of Units) Title: Sole Director -------------------------------------- Address: Restructuring Investors Limited Rue Kleberg 6 CH1201 Geneva, Switzerland Attention: Brian Padgett Facsimile No: 00 41 22 908 1191 U.S. $4,000,000 PERSISTENCY - -------------------- Amount of Investment By: /s/ L. Padulli (U.S. $1.60 per Unit) ------------------------------------------ 2,500,000 Name: L. Padulli - ----------------- --------------------------------------- (Number of Units) Title: Director -------------------------------------- Address: Persistency Ugland House PO Box 309 George Town Cayman Islands British West Indies Facsimile No: ------------------------------- U.S. $250,000 PASSLAKE LIMITED - -------------------- Amount of Investment By: /s/ C.G. Papadimitriou (U.S. $1.60 per Unit) ----------------------------------------- 156,250 Name: C.G. Papadimitriou - ----------------- --------------------------------------- (Number of Units) Title: Director ------------------------------------- Address: Passlake Limited PO Box 309 George Town Grand Cayman Cayman Islands BWI Facsimile No: 44-208-408-7007 with a copy to: Cavamont Services SA 40 rue du Rhone 1204 Geneva Grand Cayman Switzerland Attention: Constantin Papadimitriou Facsimile No: ---------------------- This Agreement is hereby confirmed and accepted by the Representative as of December 20, 2004. REPRESENTATIVE: By: /s/ Tim Whyte --------------------------- Tim Whyte EX-99.2 3 c34938_ex99-2.txt 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 2 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 3 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. 4 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 5 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 6 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 7 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. 8 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 400 N. Sam Houston Parkway E., Suite 205, Houston, Texas 77060, Attn: Chief Executive Officer, facsimile number, (832) 598-0479, with a copy to Amar Budarapu, Esq., Baker & McKenzie, LLP, 2300 Trammell Crow Center, 2001 Ross Avenue, Dallas, Texas 75201, facsimile number, (214) 987-3099; 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 George 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 George Town Grand Cayman Cayman Islands Facsimile No: -------------------------- [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] RESTRUCTURING INVESTORS LIMITED By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Address: Restructuring Investors Limited Rue Kleberg 6 CH1201 Geneva, Switzerland Attention: Brian Padgett Facsimile No: 00 41 22 908 1191 [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] PERSISTENCY By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Address: Persistency Ugland House PO Box 309 George Town Cayman Islands British West Indies Facsimile No: -------------------------- [SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT] PASSLAKE LIMITED By: ------------------------------------ Name: ---------------------------------- Title: --------------------------------- Address: Passlake Limited PO Box 309 George Town Grand Cayman Cayman Islands BWI Facsimile No: ----------------- with a copy to: Cavamont Services SA 40 rue du Rhone 1204 Geneva Grand Cayman Switzerland Attention: Constantin Papadimitriou Facsimile No: ----------------- 15 EX-99.3 4 c34938_ex99-3.txt EXHIBIT 3 DATED 23 DECEMBER 2004 ---------------------- CHASM LAKE MANAGEMENT SERVICES, LLC - and - SOFAER CAPITAL INC. - and - RESTRUCTURING INVESTORS LIMITED - and - PASSLAKE LIMITED ------------------------------------------------- INVESTOR GROUP AGREEMENT in respect of Far East Energy Corporation ------------------------------------------------- Morrison & Foerster MNP 21 Garlick Hill London EC4V 2AU United Kingdom Tel:- 020 7815 1150 Fax:- 020 7815 1159 INVESTOR GROUP AGREEMENT THIS AGREEMENT is made on 23 December 2004. BETWEEN: (1) CHASM LAKE MANAGEMENT SERVICES, LLC with its office address at 850 Seventh Avenue, Suite 701, New York, NY 10019, USA ("CLMS"), which is entering into this Agreement for itself and as representative for Persistency, a Cayman Islands limited company; (2) SOFAER CAPITAL INC. with its office address at 9 Upper Belgrave Street, London SW1X 8BD, United Kingdom ("SOFAER"), which is entering into this Agreement for itself and as agent for Caledonian Bank and Trust, Ltd. as trustee for the Sofaer Capital Global Fund and Caledonian Bank and Trust, Ltd. as trustee for the Sofaer Capital Asian Fund; (3) RESTRUCTURING INVESTORS LIMITED with its office address at Rue Kleberg 6, CH1201, Geneva, Switzerland ("RIL"); and (4) PASSLAKE LIMITED with its office address at P.O. Box 309, George Town, Grand Cayman, Cayman Islands, British West Indies ("PASSLAKE"). RECITALS: (A) CLMS, Sofaer, RIL and Passlake has each agreed to invest in the Company and to receive the benefit of the Warrant and has each entered into, inter alia, the Stock Subscription Agreement and Registration Rights Agreement (as such terms are defined below). (B) As co-investors in the Company, the parties now wish to enter into this Agreement (on the terms and conditions set out below), in consideration of the mutual and respective agreements contained herein, in order to regulate the basis upon which they will exercise their rights in relation to the Company and their dealing with each other. THE PARTIES HAVE AGREED as follows: 1. DEFINITIONS 1.1. In this Agreement and the Recitals, the following words shall have the meanings set forth below except where specified to the contrary: "AFFILIATE" means: (i) any individual, corporation, partnership, limited liability company, limited liability partnership, practice, association, joint stock company, trust, fund, unincorporated organisation or other venture or business vehicle (each an "ENTITY") in which a party owns a fifty percent (50%) or greater equity interest; or (ii) any Entity which, directly or indirectly, is in Control of, is Controlled by, is under common Control with or is managed by a party to this Agreement. For the purposes of this definition, "CONTROL" means the possession by a person (or persons acting in concert) directly or indirectly of the power to direct or cause the direction or the management and policies of 1 that party, whether through the ownership of voting securities, partnership or equity, by contract or otherwise; "BOARD" means the board of directors from time to time of the Company; "BOARD VOTES" means all voting rights exercisable at Board meetings (or pursuant to a written consent or resolution in lieu of a Board meeting); "COMPANY" means Far East Energy Corporation, a corporation organised and existing under the laws of the State of Nevada, USA; "FUNDRAISING" means an offering of debt or equity securities of the Company in a capital raising transaction, as described in Section 3.13 of the Stock Subscription Agreement; "INVESTOR DIRECTOR" means the director appointed to the Board by the Investors and nominated in accordance with Clause 4.1 hereof and Section 3.12 of the Stock Subscription Agreement; "INVESTOR MAJORITY" means a decision made by the holders from time to time of more than 50% of the Investor Shares; "INVESTOR SHARES" means the 12,812,500 shares of common stock, par value $0.001 per share, of the Company issued to the Investors pursuant to the Stock Subscription Agreement or such number of the aforesaid shares (adjusted to take into account disposals to Third Parties) held from time to time by the Investors and/or their Affiliates; "INVESTORS" means CLMS, Sofaer, RIL and Passlake and the investing entities represented by them together, and "Investor" means any one of them; "PRO RATA" means in proportion to the Investors' and/or their Affiliates' holding of Investor Shares, being initially in the proportion of: CLMS 39.025% Sofaer 39.025% RIL 19.51% Passlake 2.44% TOTAL 100% subject to any Investor(s) and/or Affiliate(s) having disposed of any of its or their initial holding of Investor Shares in which event "Pro Rata" shall be adjusted to reflect such dispositions from time to time. "Pro Rata" shall not be adjusted as a result of dilution resulting from fresh issues of shares by the Company; "REGISTRATION RIGHTS means the Registration Rights Agreement dated as AGREEMENT" of December 21, 2004 entered into between (1) the Company and (2) the Investors; 2 "SHAREHOLDER VOTES" means all voting rights exercisable at shareholders' meetings of the Company (or pursuant to a written consent or resolution in lieu of a shareholders' meeting); "SPECIAL MAJORITY" means a decision made by the holders from time to time of more than 85% of the Investor Shares; "STOCK SUBSCRIPTION means the Stock Subscription Agreement entered AGREEMENT" into on December 21, 2004 between (1) the Company and (2) the Investors pursuant to which the Investors agreed to subscribe for and purchase in aggregate 12,812,500 shares of common stock, par value $0.001 per share, of the Company; "TAKEOVER OFFER" means any proposal to effect an acquisition of or change in control of the Company, including without limitation by means of (i) a reorganisation, merger or consolidation, (ii) a transaction or series of related transactions in which the Company's shareholders of record as constituted immediately prior to such transaction or series of related transactions will, immediately after such transaction or series of related transactions (by virtue of securities issued in such transaction or series of related transactions) fail to hold at least 50% of the voting power of the resulting or surviving corporation following such transaction or series of related transactions or (iii) a sale of all or substantially all of the assets of the Company; "TENDER OFFER" means an offer, including without limitation an offer by the Company, to acquire all or a portion of the capital stock of the Company, whether or not for purposes of effecting a change in control of the Company, that is made to the Investors or any member thereof, or to shareholders of the Company generally; "THIRD PARTY" means a person other than an Investor and/or their Affiliates; "VOTING RIGHTS" means Board Votes and/or Shareholder Votes; "WARRANT" means the Warrant entered into by the Company on December 21, 2004 in favour of the Investors. 1.2. In this Agreement: (a) the contents and clause headings are for convenience only and do not affect its construction; (b) words denoting the singular include the plural and vice versa; (c) words denoting one gender include each gender and all genders; and (d) general words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words or introduced by the word other and preceded by words indicating a particular class of acts, matters or things and accordingly the rule known as the ejusdem generis rule shall not apply to this Agreement. 3 1.3. In this Agreement, unless otherwise specified or the context otherwise requires, a reference to: (a) a person is to be construed to include a reference to any individual, firm, partnership, company, corporation, association, organisation, trust or fund (in each case whether or not having a separate legal personality); (b) a document, instrument or agreement (including, without limitation, this Agreement) is a reference to any such document, instrument or agreement as modified, amended, varied, supplemented or novated from time to time; (c) a Recital or Clause is a reference to a recital to this Agreement or a clause of this Agreement; and (d) a statutory provision is to be construed as a reference to such provision as amended, consolidated or re-enacted from time to time and to any orders, regulations, instruments or other subordinate legislation made under the relevant statute. 2. VOTING RIGHTS AND FURTHER ASSURANCE 2.1. The Investors severally agree to exercise all Voting Rights and powers available to them in relation to the Company and shall do everything necessary to procure (so far as they are each able to do so) that full effect is given to the terms of this Agreement, and their rights under the Stock Subscription Agreement, Registration Rights Agreement and Warrant. 2.2. Where the Investors are required under this Agreement to exercise their powers in relation to the Company to procure a particular matter or thing, such obligation shall be deemed to include an obligation to exercise their powers jointly with the other Investors and any Affiliates who hold shares in the Company to procure such matter or thing. 2.3. The Investors agree that: (a) they will co-operate with each other and execute and deliver to each other such other instruments and documents and take such other actions as may be reasonably requested from time to time in order to carry out, evidence and confirm their rights and the intended purpose of this Agreement; (b) they will act in good faith towards each other at all times in fulfilment of their obligations hereunder and in relation to the Company and this Agreement; and (c) any matters to be dealt with between the Investors as a group and any particular Investor will be dealt with on arm's length normal commercial terms. 3. INVESTOR MEETINGS AND DECISIONS 3.1. The Investors shall meet at least two times a year and at not more than six monthly intervals. Ten (10) clear days' written notice shall be given to each of the Investors of all Investor meetings (except if the Investor Majority agree to shorter notice). 3.2. Each notice of an Investor meeting shall: 4 (a) specify a reasonably detailed agenda; (b) be accompanied by any relevant papers; and (c) be sent by courier or facsimile transmission to the address or facsimile number specified in Clause 14.11. 3.3. The quorum at an Investor meeting shall be: (i) in the case of a meeting dealing with the matters referred to in Clause 5.2, a Special Majority; and (ii) in the case of a meeting dealing with any other matter, an Investor Majority; in each case present at the time when the relevant business is transacted. If a quorum is not present within half an hour of the time appointed for the meeting or ceases to be present, the Investors present shall adjourn the meeting to a specified place and time. Notice of the adjourned meeting shall be given as soon as possible following the adjournment. 3.4. Investor meetings shall be chaired by the Investor Director save in the case of meetings dealing with the appointment, removal or replacement of the Investor Director, in which case the Investors present may appoint any one of their number to act as chairman for the meeting. 3.5. All business arising at any Investor meeting shall be determined by resolution passed by Investor Majority, save in the case of any of the matters referred to in Clause 5.2, in which case such matter shall be determined by resolution passed by Special Majority. 3.6. Each Investor shall use its reasonable endeavours to ensure that at least one authorised representative nominated by it attends Investor meetings. 3.7. Investor meetings may be held by telephone or video conference or an Investor may attend an Investor meeting by telephone or video conference. Notice of the dial-in details for the telephone or video conference shall be given to Investors together with notice of an Investor meeting. 3.8. A resolution in writing signed by or on behalf of all the Investors shall be as valid and effectual as if it had been passed at a meeting of Investors duly convened and held and may consist of several documents in the like form each signed by one or more Investors. 3.9. Minutes of all Investor meetings shall be prepared and distributed by the chairman of the relevant meeting to all Investors as soon as reasonably possible after each meeting (and in any case, within one month of such meeting). 4. INVESTOR DIRECTOR 4.1. The nomination of an Investor Director shall be by Investor Majority. The first Investor Director shall be Tim Whyte. 4.2. The Investor Director shall vote at board meetings as directed by the Investors, such directions being decided by Investor Majority. 4.3. The Investors shall procure (so far as they are each able to do so and so far as the Investor Director is permitted to do so) that the Investor Director: 5 (a) provides each of the Investors with a copy of the agenda proposed for any Board meetings and all the related documents as soon as possible after they are available and takes instructions as to the directions of the Investors by Investor Majority; (b) provides each of the Investors with a summary or the minutes of each Board meeting as soon as possible after such Board meeting is held; (c) provides each of the Investors with regular updates on the operating and financial performance on the Company; (d) provides each of the Investors with such financial or other information in relation to the Company as the Investors may from time to time reasonably require; PROVIDED ALWAYS THAT the Investor Director shall not be in breach of its obligations by doing any of the aforesaid. 5. SHAREHOLDER VOTES, TAKEOVER OFFERS, TENDER OFFERS 5.1. The Investors shall pre-agree and vote uniformly on Shareholder Votes. The Investors' approach to Shareholder Votes shall be determined by Investor Majority and the Investors agree to be bound by the will of the Investor Majority to act accordingly. 5.2. The Investors shall pre-agree and confirm uniformly their acceptance or rejection of any Takeover Offer, Tender Offer and similar such offers. The Investors' approach to the aforesaid matters referred to in this Clause 5.2 shall be determined by Special Majority and the Investors agree to be bound by the will of the Special Majority to act accordingly. 6. FINANCING REPRESENTATIVE 6.1. The Investors shall, prior to a Fundraising, appoint one of their number to be their Financing Representative; such appointment being determined by Investor Majority. 6.2. The Financing Representative shall be responsible for liaison between the Investors and the Company and shall have other responsibilities and authority as determined by Investor Majority. 7. PRE-EMPTION RIGHTS Each Investor shall have the right to participate Pro Rata in Fundraisings, either with its own money or from third parties introduced by such Investor. 8. PROFESSIONALS AND OTHER THIRD PARTIES 8.1. Professionals, agents and other such third parties shall be engaged and terminated by the Investor Director, subject to Investor Majority approval. The terms of such engagements shall be determined by the Investor Director, subject to Investor Majority approval. 8.2. Persons engaged by individual Investors, for instance to secure funding, shall be determined freely by such Investor and shall be at own cost ("INDIVIDUAL APPOINTMENTS"). 6 9. FUNDRAISING FEE FROM COMPANY 9.1. In the event of a Fundraising, the Investors shall have 45 days from the date of the Company's issuance of a capital raising notice (the "PERIOD") in accordance with Section 3.13 of the Stock Subscription Agreement to raise or procure funding for the Company. If any Investor cannot or reasonably believes it may not raise its due proportion of the funds required by the Company either in full or at all, such Investor shall give notice (the "NOTICE") to the other Investors as soon as practicable, but not less than 10 business days prior to the expiry of the Period. The other Investors shall then be able to fund or procure funding for the balance of said funds, subject to the Investor actually not being able to procure funding. The Investor which has served the Notice shall have priority until the expiry of the Period to fund, or procure funding for, the Company. 9.2. The fee and/or commission payable by the Company to the Investors in relation to their assistance on a Fundraising (the "FEE"), shall be dealt with as follows: (a) 40% shall be paid to the Investors proportionately to the funds raised by the Investors (whether from such Investor or third parties introduced by such Investor) (the "COMMISSION"); (b) after the Commission is paid in full, the Expenses (as defined in Clause 11.1) shall be deducted from the Fee; (c) the balance shall then shared between the Investors Pro Rata. 9.3. It is expressly understood and agreed that any fees and/or commission payable to CLMS will be solely payable to CLMS itself and not to Persistency. 10. RIG CONSTRUCTION BUSINESS 10.1. The Investors shall have the right to participate Pro Rata in the ownership of any joint venture company, body corporate or other vehicle ("JVCO") formed between the Investors and the Company pursuant to Article 6 of the Stock Subscription Agreement relating to the Rig Construction Business ("RCB"). 10.2. If any Investor does not take up such rights or a proportion thereof, the rights or such proportion shall transfer to the other Investor(s) Pro Rata. 10.3. The Investors shall appoint a representative to JVCo to represent the Investors, such appointment being made by Investor Majority. 11. FUNDRAISING EXPENSES 11.1. Investor management time, fees, costs, charges (including all professional fees such as legal, accounting, travel, accommodation) ("EXPENSES") shall be borne Pro Rata. Expenses shall not include fees and costs of Individual Appointments (as defined in Clause 8.2). 11.2. Expenses shall accrue and be settled as set out in Clause 9.2 from the Fee. 11.3. Management time of the Investors shall be charged at rates reasonably agreed by Investor Majority from time to time. 7 12. US SECURITIES LAW COMPLIANCE; INDEMNITY 12.1. So long as they are required to do so under the United States Securities Exchange Act of 1934, as amended, (the "1934 ACT"), including, without limitation, Section 16 thereof, each Investor agrees to provide the information necessary to make timely and accurate filings thereunder and that it will comply with the 1934 Act requirements. 12.2. Notwithstanding the generality of Clause 12.1, an Investor or an Affiliate which carries out any trading activity in the Investor Shares or any other shares in the capital of the Company shall report such trading activity to the other Investors on the day such trading activity occurs. 12.3. So long as the Investors are obliged to file reports pursuant to the requirements of the 1934 Act, each Investor shall indemnify and keep indemnified on demand the other Investors, on an after-tax basis, against any and all claims, losses, damages, liabilities, compensation, awards, penalties, costs and/or expenses reasonably incurred or suffered by the other Investors arising from or in connection with any failure by such Investor to comply with the requirements of the 1934 Act. 13. DURATION OF AGREEMENT AND ADHERENCE 13.1. This Agreement shall commence with effect from the date hereof and shall continue in full force and effect until the first to occur of the following events: (a) the express written agreement of all of the parties that this Agreement should cease; or (b) a party transfers all of its Investor Shares such that neither such party nor any of its Affiliates holds any Investor Shares, in which case this Agreement ceases to apply only in relation to such party who ceases to hold any Investor Shares; PROVIDED THAT the terms of this Agreement shall nevertheless continue to bind the parties thereafter to such extent and for so long as may be necessary to give effect to the rights and obligations embodied herein. 13.2. In the event that a party to this Agreement wishes to transfer its Shares and/or Warrants (or any part thereof) to an Affiliate, such party shall procure that the transferee executes a Deed of Adherence in or substantially in the form set out in Schedule 1 pursuant to which the transferee agrees to be bound by the terms of this Agreement. 13.3. Save for a transferee of Shares and/or Warrants pursuant to Clause 13.2, the inclusion of additional persons as Investors under this Agreement shall require a recommendation by one of the Investors and the admission of such person shall be determined by Investor Majority. If the parties determine to admit such person as an Investor, the nominee shall execute a Deed of Adherence in or substantially in the form set out in Schedule 1 pursuant to which the nominee agrees to be bound by the terms of this Agreement. 14. GENERAL PROVISIONS 14.1. CONFIDENTIALITY. This Agreement and its contents and any confidential information disclosed by one Investor to the others in furtherance of or pursuant to this Agreement shall be kept 8 confidential and shall not be disclosed to third parties without the prior written consent of the other parties, save as required by law, regulation or the rules of any relevant recognised investment exchange. 14.2. CONFLICT WITH OTHER DOCUMENTS. In the event of any ambiguity or conflict arising between the terms of this Agreement and those of the Stock Subscription Agreement, Registration Rights Agreement and Warrants, the terms of this Agreement shall prevail vis-a-vis the Investors. 14.3. ASSIGNMENT. Save as permitted by Clause 13.2, neither this Agreement nor any rights hereunder may be assigned, transferred or otherwise disposed of by a party without the prior written agreement of all parties to this Agreement. 14.4. THIRD PARTIES. Save in respect of the persons on behalf of whom CLMS and Sofaer are entering into this Agreement (who shall also be able to enforce this Agreement), a third party who is not a party to this Agreement has no right under the Contract (Rights of Third Parties) Act 1999 (the "Act") to enforce any term of this Agreement but this does not affect any right or remedy of a third party which exists or is available apart from the Act. Each of CLMS and Sofaer severally represent and warrant that it respectively is able to bind the respective persons it purports to execute this Agreement on behalf of and also severally agree to, if requested to do so by any other Investor, procure that such persons adhere to this Agreement by entering into a Deed of Adherence in or substantially in the form set out in Schedule 1. 14.5. ENTIRE AGREEMENT. This Agreement and any documents referred to in it, together constitute the entire agreement and understanding between the parties relating to its subject matter and supersedes and extinguishes any prior drafts, agreements and undertakings, whether in writing or oral, relating to such subject matter except to the extent the same are repeated in this Agreement. Each of the parties acknowledges that it has not been induced to enter into this Agreement by any representation, statement, warranty, promise or assurance by the other (or any other person) other than those expressly set out in this Agreement. 14.6. VARIATION. No variation of this Agreement shall be effective unless made in writing and signed by all parties to this Agreement. 14.7. RIGHTS ETC CUMULATIVE AND OTHER MATTERS. (a) The rights, powers, privileges and remedies provided in this Agreement are cumulative and are not exclusive of any rights, powers, privileges or remedies provided by law or otherwise. (b) No failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or operate as a waiver thereof in whole or in part. (c) No single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any other right, power, privilege or remedy. 14.8. INVALIDITY. If any provision or term of this Agreement is held or rendered illegal, invalid or unenforceable under any applicable law, such provision or term shall, insofar as it is severable from the remaining provisions or terms, be deemed omitted from this Agreement and shall not adversely affect the remaining provisions or terms. Any such illegal, invalid or unenforceable provision or term shall be considered not severable if and to the extent that its omission from this Agreement would or may materially alter or affect the commercial intent or effect of this Agreement. In such event, the parties shall use their best endeavours to replace any such illegal, invalid or unenforceable provision or term with provisions and terms which most closely reflect their commercial intent and effect. 9 14.9. COUNTERPARTS. This Agreement may be executed in any number of counterparts which shall together constitute one Agreement. Any party may enter into this Agreement by signing any such counterpart. 14.10. COSTS. Except as otherwise expressly provided herein or otherwise agreed in writing between the Investors, the parties shall bear the costs and expenses arising out of or in connection with the preparation, negotiation and implementation of this Agreement. 14.11. NOTICES. Any notice to be given under this Agreement shall be either delivered personally or sent by first class recorded delivery (airmail if overseas) or by facsimile. The address for service of each party is as follows: (a) if to CLMS to: Address: Chasm Lake Management Services, LLC 850 Seventh Avenue Suite 701 New York, NY 10019 U.S.A. Attention: Andrew Morris Facsimile No: +1 212 582 0559 with a copy to: Persistency Ugland House P.O. Box 309 George Town Cayman Islands British West Indies (b) if to Sofaer to: Address: Sofaer Capital Inc. 9 Upper Belgrave Street London SW1X 8BD United Kingdom Attention: Tim Whyte Facsimile No: +44 20 7259 4409 with a copy to: Caledonian Bank and Trust, Ltd. Caledonian House George Town Grand Cayman Cayman Islands 10 (c) if to RIL to: Address: Restructuring Investors Limited Rue Kleberg 6 CH1201 Geneva Switzerland Attention: Brian Padgett Facsimile No: +41 22 908 11 91 (d) if to Passlake to: Address: Passlake Limited P.O. Box 309 George Town Grand Cayman Cayman Islands British West Indies with a copy to: Cavamont Services SA 40 rue du Rhone 1204 Geneva Switzerland Facsimile No: +41 22 817 04 88 or any other address for service previously notified to the other parties. A notice is deemed to have been served as follows: (i) if personally delivered, at the time of delivery; (ii) if posted, at the expiration of 48 hours or (in the case of airmail) 5 business days after the envelope containing it is delivered into the custody of the postal authorities; or (iii) if sent by facsimile, on receipt of an acknowledgement of the completion of its transmission. In proving service it is sufficient to prove that personal delivery was made, or that the envelope containing the notice was properly addressed and delivered into the custody of the postal authority as a prepaid first class recorded delivery or airmail letter (as appropriate). 14.12. NOT A PARTNERSHIP/AGENCY. Nothing in this Agreement shall, nor shall it be deemed to, constitute a partnership between the parties, or any of them. Nothing in this Agreement shall authorise any party to act as agent or representative of the others (or any of them) or to authorise any such party to assume or create an obligation on behalf of the other (or others), except as expressly provided in this Agreement. 15. GOVERNING LAW AND JURISDICTION The construction, validity and performance of this Agreement shall be governed in all respects by English law and the parties hereby agree to refer their disputes under this Agreement to the exclusive jurisdiction of the English courts. IN WITNESS of which the parties have caused this Agreement to be executed on the day and year first above written. 11 SCHEDULE 1 DEED OF ADHERENCE THIS DEED OF ADHERENCE is made on [ DATE ] by [ NAME ] (the "COVENANTOR") SUPPLEMENTAL to an Investor Group Agreement dated December __, 2004 and made between (1) Chasm Lake Management Services, LLC, (2) Sofaer Capital Inc., (3) Restructuring Investors Limited and (4) Passlake Limited (the "AGREEMENT"). Words and expressions defined in the Agreement shall have the same meaning in this Deed. The Covenantor covenants as follows: 1 The Covenantor hereby confirms that it has been supplied with a copy of the Agreement and hereby covenants with each of the Investors to observe, perform and be bound by all the terms of the Agreement which are capable of applying to the Covenantor and which have not been performed at the date of this Deed as if Covenantor had been named as an Investor in that Agreement. 2 This Deed shall be governed by and construed in accordance with English law. IN WITNESS WHEREOF this Deed has been duly executed the date first above written. 12
EXECUTED for and on behalf of CHASM LAKE ) MANAGEMENT SERVICES, LLC (acting for itself ) and as representative for Persistency, a ) Signature: Andrew J. Morris Cayman Islands limited company) acting by its ) duly authorised representative: ) ) Name / Position: ANDREW MORRIS / ) MANAGING DIRECTOR EXECUTED for and on behalf of SOFAER CAPITAL ) INC. (acting for itself and as agent for ) Caledonian Bank and Trust, Ltd. as trustee ) Signature: T. Whyte for the Sofaer Capital Global Fund and ) Caledonian Bank and Trust, Ltd. as trustee ) for the Sofaer Capital Asian Fund) acting by ) Name / Position: TIM WHYTE / its duly authorised representative: ) INVESTMENT ADVISER ) EXECUTED for and on behalf of RESTRUCTURING ) INVESTORS LIMITED acting by its duly ) Signature: Leonard O'Brien authorised representative: ) ) Name / Position: LEONARD O'BRIEN FOR SILEX MANAGEMENT LTD SOLE DIRECTOR EXECUTED for and on behalf of PASSLAKE ) LIMITED acting by its duly authorised ) Signature: Christophe Braun representative: ) Name / Position: CHRISTOPHE BRAUN / POWER OF ATTORNEY
13 EX-99.4 5 c34938_ex99-4.txt EXHIBIT 4 JOINT FILER AGREEMENT AND POWER OF ATTORNEY In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended (the "1934 Act"), the undersigned hereby agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any amendments thereto) with respect to the common stock, par value $0.001 per share, of Far East Energy Corporation, a Nevada corporation. The undersigned further consent and agree to the inclusion of this Agreement as an Exhibit to such Schedule 13D. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Each of the undersigned hereby irrevocably constitute and appoint Kristian Wiggert (the "Attorney-in-Fact") as agent and attorney-in-fact, with full power of substitution, with respect to the power and authority on behalf of each of the undersigned to execute and file or cause to be executed or filed any documents required to be filed by Section 13 of the 1934 Act or to execute any documents in required in connection with such required documents as a result of or in connection with each of the undersigned's purchase of the securities to which the Statement on Schedule 13D relates. IN WITNESS WHEREOF, the undersigned have executed this agreement as of the 23rd day of December 2004. SOFAER CAPITAL GLOBAL FUND By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact SOFAER CAPITAL ASIAN FUND By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact SOFAER CAPITAL INC. By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact RESTRUCTURING INVESTORS LIMITED By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact PERSISTENCY By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact PASSLAKE LIMITED By: /s/ Kristian Wiggert Name: Kristian Wiggert Title: Attorney-In-Fact -----END PRIVACY-ENHANCED MESSAGE-----