Document:

Registration Rights Agreement dated October 7, 2004

 EXHIBIT 10.2 
  
 REGISTRATION RIGHTS AGREEMENT 
  
 This Registration Rights Agreement (this “Agreement”) is made and entered into as of this 7th day of October, 2004 by and among HARKEN ENERGY CORPORATION, a corporation organized under the laws of Delaware (the
“Company”), and the persons identified as Purchasers pursuant to that certain Purchase Agreement of even date herewith by and among the Company and such Purchasers (the “Purchase Agreement”). 
  
 The parties hereby agree as follows: 
  
 1. Definitions. 
  
 Capitalized terms used herein but not otherwise defined shall
have the meaning ascribed thereto in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: 
  
 “Additional Registrable Securities” shall mean any shares of Common Stock which are included within the definition of
Registrable Securities but not included in any Registration Statement filed pursuant to Section 2(a)(i) below. 
  
 “Common Stock” shall mean the Company’s Common Stock $0.01 per share. 
  
 “Conversion Price” shall have the meaning
set forth in the Certificate. 
  
 “Filing
Date” shall mean the date which is forty-five (45) days following Closing Date. 
  
 “Prospectus” shall mean the prospectus included in any Registration Statement, as amended or supplemented by any
prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities or Additional Registrable Securities covered by such Registration Statement and by all other amendments and supplements to the prospectus,
including post-effective amendments and all material incorporated by reference in such prospectus. 
  
 “Purchasers” shall mean the purchasers identified in the Purchase Agreement and any subsequent holder of any Preferred
Shares, Warrants, Registrable Securities or Additional Registrable Securities as a result of a transfer of such securities. 
  
 “Register,” “registered” and “registration” refer to a registration made by preparing
and filing a registration statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such registration statement or document. 
  
 “Registrable Securities” shall mean (i) the
Underlying Shares, the Warrant Shares and any other shares of Common Stock issued or issuable (a) upon conversion of, or payment of dividends on, or redemption of, or otherwise pursuant to, the Preferred 

 Shares, and upon the exercise of the Warrants and the warrants (“May Warrants”) issued to the
Purchasers on or about May 28, 2004, or (b) upon any distribution with respect to, any exchange for or any replacement of such Preferred Shares, Warrants or May Warrants, or (c) upon any conversion, exercise or exchange of any securities issued in
connection with any such distribution, exchange or replacement; (ii) securities issued or issuable upon any stock split, stock dividend, recapitalization or similar event with respect to such shares of Common Stock; and (iii) any other security
issued as a dividend or other distribution with respect to, in exchange for, or in replacement of, the securities referred to in the preceding clauses. 
  
 “Registration Statement” shall mean any registration statement of the Company filed under the 1933 Act that covers the
resale of any of the Registrable Securities or Additional Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration Statement, including post-effective amendments, all exhibits and all
material incorporated by reference in such Registration Statement. 
  
 “SEC” means the U.S. Securities and Exchange Commission. 
  
 “1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

  
 “1934 Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
  
 2. Registration. 
  
 (a) Registration Statements. 
  
 (i) Registrable Securities. The Company shall use its best efforts to prepare and file with the SEC a Registration Statement on
Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the Registrable Securities, subject to the Purchasers’ consent), covering the
resale of the Registrable Securities in an amount equal to 130% of the number of Underlying Shares issuable upon full conversion of the Preferred Shares at the Conversion Price as of the filing date plus 100% of the number of shares of Common Stock
necessary to permit the exercise in full of the Warrants (in each case without regard to any restrictions on beneficial ownership), as soon as practicable following the Closing Date (but no later than the Filing Date). Such Registration Statement
also shall cover, to the extent allowable under the 1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. The Registration Statement (and each amendment or supplement thereto) shall be provided in accordance with Section 3(c) to the Purchasers and their counsel prior to its filing or other
submission. 
  
 (ii) Additional Registrable
Securities. At any time and from time to time upon the written demand of any Purchaser following the existence of any 
  

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 Additional Registerable Securities, and in any event within forty-five (45) days following such demand,
the Company shall prepare and file with the SEC one Registration Statement on Form S-3 (or, if Form S-3 is not then available to the Company, on such form of registration statement as is then available to effect a registration for resale of the
Additional Registrable Securities) covering the resale of the Additional Registrable Securities in an amount equal to the number of Additional Registrable Securities. Such Registration Statement also shall cover, to the extent allowable under the
1933 Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Additional Registrable
Securities. The Registration Statement (and each amendment or supplement thereto) shall be provided in accordance with Section 3(c) to the Purchaser and its counsel prior to its filing or other submission. 
  
 (b) Expenses. The Company will pay all expenses
associated with each registration, including the Purchasers’ reasonable expenses (including reasonable attorneys fees), in connection with the registration but excluding discounts, commissions, fees of underwriters, selling brokers, dealer
managers or similar securities industry professionals. 
  
 (c) Effectiveness. 
  
 (i) The
Company shall use its best efforts to have each Registration Statement declared effective as soon as possible after filing. If (A) the Registration Statement covering Registrable Securities is not declared effective by the SEC within 150 days
following the Closing Date (or if the Company fails to file an acceleration request within the fifth day following the date on which the Company is notified by the SEC that such Registration Statement will not be reviewed or is no longer subject to
further review and comments seeking to have the SEC declare the Registration Statement effective), (the “Registration Date”), (B) after a Registration Statement has been declared effective by the SEC, sales cannot be made pursuant to such
Registration Statement for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement) but except as excused pursuant to subparagraph (ii) below, (C) the Registrable
Securities (or Additional Registrable Securities after issuance and registration) specifically are not listed or included for quotation on the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market System or the Nasdaq
Small-Cap Market (each an “Approved Market”) or trading of the Common Stock is suspended or halted thereon, or (D) the Company fails, refuses or is otherwise unable to timely issue Underlying Shares upon conversion of the Preferred Shares
or Warrant Shares upon exercise of the Warrants, in accordance with the terms of the Certificate and Warrants, unlegended certificates for the Underlying Shares or Warrant Shares as required under the Agreements, in each case within ten (10) days
following the Purchaser’s written demand for issuance of such Underlying Shares or Warrant Shares or certificates (any such event under clause (A), (B), (C) or (D) constituting a “Registration Default”), then the Conversion Price
shall be automatically reduced by 2% as of the occurrence of such Registration Default. The aforementioned 2% reduction shall only be applied once regardless of the reoccurrence of any Registration Default. The Company shall promptly confirm in
writing the adjusted 
  

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 Conversion Price, provided that any failure to do so shall not affect such automatic adjustment.

  
 (ii) For not more than five (5) consecutive
trading days or for a total of not more than twenty (20) trading days in any consecutive twelve (12) month period, the Company may delay the disclosure of material non-public information concerning the Company, by terminating or suspending
effectiveness of any registration contemplated by this Section, the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an “Allowed Delay”); provided, that the Company
shall promptly (a) notify the Purchasers in writing of the existence of (but in no event, without the prior written consent of a Purchaser, shall the Company disclose to such Purchaser any of the facts or circumstances regarding) material non-public
information giving rise to an Allowed Delay, and (b) advise the Purchasers in writing to cease all sales under the Registration Statement until the end of the Allowed Delay. 
  
 (d) Underwritten Offering. If any offering pursuant to a Registration Statement pursuant to Section
2(a) hereof involves an underwritten offering, the Company shall have the right to select an investment banker and manager to administer the offering, which investment banker or manager shall be reasonably satisfactory to the Purchasers. 

 
 3. Company Obligations. The Company will use its best efforts to
effect the registration of the Registrable Securities and Additional Registrable Securities in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible: 
  
 (a) use its best efforts to cause such Registration
Statement to become effective and to remain continuously effective for a period (the “Registration Period”) that will terminate upon the earlier of (i) the date on which all Registrable Securities or Additional Registrable Securities have
been sold (and no Preferred Shares or Warrants remain outstanding), and (ii) the date on which all Registrable Securities or Additional Registrable Securities, as the case may be, may be sold pursuant to Rule 144(k) (and no Preferred Shares or
Warrants remain outstanding). 
  
 (b) prepare and
file with the SEC such amendments and post-effective amendments to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the period specified in Section 3(a) and to comply with the
provisions of the 1933 Act and the 1934 Act with respect to the distribution of all Registrable Securities and Additional Registrable Securities; provided that, at a time reasonably prior to the filing of a Registration Statement or Prospectus, or
any amendments or supplements thereto, the Company will furnish to the Purchasers copies of all documents proposed to be filed, which documents will be subject to the comments of the Purchasers; 
  
 (c) at least ten (10) business days prior to the first
anticipated filing date of any Registration Statement, notify each Purchaser of the information the 
  

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 Company requires from such Purchaser if such Purchaser elects to have any of the Registrable Securities
or Additional Registrable Securities included in the Registration Statement and permit counsel designated by the Purchasers to review each Registration Statement and all amendments and supplements thereto no fewer than five (5) business days prior
to their filing with the SEC and not file any document to which such counsel reasonably objects; 
  
 (d) furnish to the Purchasers and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company, one copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC
or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought
confidential treatment), and (ii) such number of copies of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as each Purchaser may reasonably request in order to facilitate the
disposition of the Registrable Securities and Additional Registrable Securities owned by such Purchaser; 
  
 (e) in the event the Company selects an underwriter for the offering, the Company shall enter into and perform its reasonable obligations
under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the underwriter of such offering; 
  
 (f) if required by the underwriter, or if any Purchaser is
described in the Registration Statement as an underwriter, the Company shall furnish, on the effective date of the Registration Statement, on the date that Registrable Securities or Additional Registrable Securities, as applicable, are delivered to
an underwriter, if any, for sale in connection with the Registration Statement and at periodic intervals thereafter from time to time on request, (i) an opinion, dated as of such date, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the underwriter and any such Purchaser and (ii) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriter and any such Purchaser; 

 
 (g) make effort to prevent the issuance of any stop order
or other suspension of effectiveness and, if such order is issued, obtain the withdrawal of any such order at the earliest possible moment; 
  
 (h) prior to any public offering of Registrable Securities or Additional Registrable Securities, use its best efforts to register or
qualify or cooperate with the Purchasers and their counsel in connection with the registration or qualification of such Registrable Securities or Additional Registrable Securities, as applicable, for 
  

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 offer and sale under the securities or blue sky laws of such jurisdictions requested by the Purchaser and
do any and all other reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities or Additional Registrable Securities covered by the Registration Statement, provided however, the
Company shall not be obligated to take any action pursuant to this Section 3(h) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or
cooperation unless the Company is already subject to service in such jurisdiction and except as may be required by the 1933 Act; 
  
 (i) cause all Registrable Securities or Additional Registrable Securities covered by a Registration Statement to be listed on each
securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed; 
  
 (j) immediately notify the Purchasers, at any time when a Prospectus relating to the Registrable Securities or Additional Registrable
Securities is required to be delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in such Registration Statement, as then in effect, includes 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 the light of the circumstances then existing, and at the request of any such holder, promptly prepare and
furnish to such holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities or Additional Registrable Securities, as
applicable, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then
existing; and 
  
 (k) otherwise use its best
efforts to comply with all applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act, take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities and Additional
Registrable Securities, if applicable, hereunder. 
  
 4. Due
Diligence Review; Information. The Company shall make available, during normal business hours, for inspection and review by the Purchasers who may be deemed an underwriter, advisors to and representatives of such Purchasers (who may or may not
be affiliated with the Purchasers and who are reasonably acceptable to the Company), and any underwriter participating in any disposition of Common Stock on behalf of the Purchasers pursuant to the Registration Statement or amendments or supplements
thereto or any blue sky, NASD or other filing, all financial and other records, all SEC Filings and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary for the purpose of
establishing a due diligence defense under applicable securities laws and such other reasonable purposes, and cause the Company’s officers, directors and employees, within a reasonable time period, to supply all such information reasonably
requested by 
  

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 such Purchasers or any such representative, advisor or underwriter in connection with such Registration Statement
(including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement for the sole purpose of
enabling such Purchasers and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of the Registration Statement.

  
 The Company shall not disclose material nonpublic information
to the Purchasers, or to advisors to or representatives of the Purchasers, unless prior to disclosure of such information the Company identifies such information as being material nonpublic information and provides the Purchasers, such advisors and
representatives with the opportunity to accept or refuse to accept such material nonpublic information for review. The Company may, as a condition to disclosing any material nonpublic information hereunder, require the Purchasers’ advisors and
representatives to enter into a confidentiality agreement (including an agreement with such advisors and representatives prohibiting them from trading in Common Stock during such period of time as they are in possession of material nonpublic
information) in form reasonably satisfactory to the Company and the Purchasers. Nothing herein shall require the Company to disclose material nonpublic information to the Purchasers or their advisors or representatives. 
  
 5. Obligations of the Purchasers. 
  
 (a) Each Purchaser shall furnish in writing to the Company
such information regarding itself, the Registrable Securities or Additional Registrable Securities, as applicable, held by it and the intended method of disposition of the Registrable Securities or Additional Registrable Securities, as applicable,
held by it, as shall be reasonably required to effect the registration of such Registrable Securities or Additional Registrable Securities, as applicable, and shall execute such documents in connection with such registration as the Company may
reasonably request. 
  
 (b) Each Purchaser, by
its acceptance of the Registrable Securities and Additional Registrable Securities, if any, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement
hereunder, unless such Purchaser has notified the Company in writing of its election to exclude all of its Registrable Securities or Additional Registrable Securities, as applicable, from the Registration Statement. Each Purchaser agrees to comply
with the applicable prospectus delivery requirements under the 1933 Act in connection with any resales of Registrable Securities pursuant to the Registration Statement. 
  
 (c) In the event the Company determines to engage the services of an underwriter which engagement is
reasonably acceptable to the Purchasers, each Purchaser agrees to enter into and perform its obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution
obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or 
  

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 facilitate the dispositions of the Registrable Securities or Additional Registrable Securities, as
applicable. 
  
 (d) Each Purchaser agrees that,
upon receipt of any notice from the Company of the happening of any event rendering a Registration Statement no longer effective, such Purchaser will immediately discontinue disposition of Registrable Securities or Additional Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities or Additional Registrable Securities, until the Purchaser’s receipt of the copies of the supplemented or amended prospectus filed with the SEC and declared effective
and, if so directed by the Company, the Purchaser shall deliver to the Company (at the expense of the Company) or destroy all copies in the Purchaser’s possession of the prospectus covering the Registrable Securities or Additional Registrable
Securities, as applicable, current at the time of receipt of such notice. 
  
 (e) No Purchaser may participate in any third party underwritten registration hereunder unless it (i) agrees to sell the Registrable Securities or Additional Registrable Securities, as applicable, on the basis
provided in any underwriting arrangements in usual and customary form entered into by the Company, (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under
the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and commissions and any expenses in excess of those payable by the Company pursuant to the terms of this Agreement. 
  
 6. Indemnification. 
  
 (a) Indemnification by Company. The Company agrees to
indemnify and hold harmless, to the fullest extent permitted by law, the Purchasers, each of their officers, directors, partners and employees and each person who controls the Purchasers (within the meaning of the 1933 Act) against all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable attorney’s fees) and expenses imposed on such person caused by (i) any untrue or alleged untrue statement of a material fact contained in any Registration Statement,
Prospectus or any preliminary prospectus or any amendment or supplement thereto or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except
insofar as the same are based upon any information furnished in writing to the Company by such Purchasers, expressly for use therein, or (ii) any violation by the Company of any federal, state or common law, rule or regulation applicable to the
Company in connection with any Registration Statement, Prospectus or any preliminary prospectus, or any amendment or supplement thereto, and shall reimburse in accordance with subparagraph (c) below, each of the foregoing persons for any legal and
any other expenses reasonably incurred in connection with investigating or defending any such claims. The foregoing is subject to the condition that, insofar as the foregoing indemnities relate to any untrue statement, alleged untrue statement,
omission or alleged omission made in any preliminary prospectus or Prospectus that is eliminated or remedied in any Prospectus or amendment or supplement thereto, the above indemnity 
  

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 obligations of the Company shall not inure to the benefit of any indemnified party if a copy of such
corrected Prospectus or amendment or supplement thereto had been provided to such indemnified party and was not sent or given by such indemnified party at or prior to the time such action was required of such indemnified party by the 1933 Act and if
delivery of such Prospectus or amendment or supplement thereto would have eliminated (or been a sufficient defense to) any liability of such indemnified party with respect to such statement or omission. Indemnity under this Section 5(a) shall remain
in full force and effect regardless of any investigation made by or on behalf of any indemnified party and shall survive the permitted transfer of the Registrable Securities and Additional Registrable Securities. 
  
 (b) Indemnification by Holder. In connection with any
registration pursuant to the terms of this Agreement, each Purchaser will furnish to the Company in writing such information as the Company reasonably requests concerning the holders of Registrable Securities and Additional Registrable Securities or
the proposed manner of distribution for use in connection with any Registration Statement or Prospectus and agrees, severally but not jointly, to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors,
officers, employees, stockholders and each person who controls the Company (within the meaning of the 1933 Act) against any losses, claims, damages, liabilities and expense (including reasonable attorney’s fees) resulting from any untrue
statement of a material fact or any omission of a material fact required to be stated in the Registration Statement or Prospectus or preliminary prospectus or amendment or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Purchaser to the Company specifically for inclusion in such Registration Statement or Prospectus or
amendment or supplement thereto and that such information was substantially relied upon by the Company in preparation of the Registration Statement or Prospectus or any amendment or supplement thereto. In no event shall the liability of a Purchaser
be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Purchaser and the amount of any damages such holder has otherwise been required to pay by reason of such untrue statement or omission) received by such
Purchaser upon the sale of the Registrable Securities or Additional Registrable Securities included in the Registration Statement giving rise to such indemnification obligation. 
  
 (c) Conduct of Indemnification Proceedings. Any person entitled to indemnification hereunder shall
(i) give prompt notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party;
provided that any person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such person unless
(a) the indemnifying party has agreed to pay such fees or expenses, or (b) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such person or (c) in the reasonable judgment of
any such person, based upon written advice of its counsel, a conflict of interest exists between 
  

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 such person and the indemnifying party with respect to such claims (in which case, if the person notifies
the indemnifying party in writing that such person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such person); and
provided, further, that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure to give notice shall materially adversely
affect the indemnifying party in the defense of any such claim or litigation. It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one
separate firm of attorneys at any time for all such indemnified parties. No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. 
  
 (d) Contribution. If for any reason the indemnification provided for in the preceding paragraphs (a)
and (b) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No person guilty of fraudulent
misrepresentation within the meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any person not guilty of such fraudulent misrepresentation. In no event shall the contribution obligation of a holder of Registrable
Securities or Additional Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such holder and the amount of any damages such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities or Additional Registrable Securities giving rise to such contribution obligation. 
  
 7. Miscellaneous. 
  
 (a) Amendments and Waivers. This Agreement may be
amended only by a writing signed by the parties hereto. The Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such
amendment, action or omission to act, of the Purchasers affected by such amendment, action or omission to act. 
  
 (b) Notices. All notices and other communications provided for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement. 
  
 (c) Assignments
and Transfers by Purchasers. This Agreement and all the rights and obligations of any Purchaser hereunder may be assigned or transferred to any transferee or assignee of the Preferred Shares, Warrants or Registrable 
  

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 Securities. A Purchaser may make such assignment or transfer to any transferee or assignee of any Note,
Warrant, Registrable Securities or Additional Registrable Securities, provided that (i) such transfer is made expressly subject to this Agreement and the transferee agrees in writing to be bound by the terms and conditions hereof, and (ii)
the Company is provided with written notice of such assignment. 
  
 (d) Assignments and Transfers by the Company. This Agreement may not be assigned by the Company without the prior written consent of the Purchasers, but after notice duly given, the Company shall assign its
rights and delegate its duties hereunder to any successor-in-interest corporation, and such successor-in-interest shall assume such rights and duties, in the event of a merger or consolidation of the Company with or into another corporation or the
sale of all or substantially all of the Company’s assets (and it shall be a condition to any such merger, consolidation or sale that such successor-in-interest assume in writing all obligations hereunder). 
  
 (e) Benefits of the Agreement. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. 
  
 (f) Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed by facsimile. 
  
 (g) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be
considered in construing or interpreting this Agreement. 
  
 (h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms to the fullest extent permitted by law. 
  
 (i) Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other
actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained. 
  
 (j) Entire Agreement. This Agreement, together with the Purchase Agreement, Certificate and Warrants and documents contemplated
thereby, is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. This
Agreement, together with 
  

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 the Purchase Agreement, and Warrants and documents contemplated thereby, supersedes all prior agreements
and understandings between the parties with respect to such subject matter. 
  
 (k) Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law. 
  
  
 [Signature Page Follows] 
  

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 IN WITNESS WHEREOF, the parties have duly executed this Registration Rights Agreement as of the date
first written above. 
  

			
	 THE COMPANY:
  
 HARKEN ENERGY CORPORATION

		
	By:	 	 /s/ Elmer A. Johnston

	 Name:
	 	 Elmer A. Johnston

	 Title:
	 	 Vice President

  

			
	 THE PURCHASERS:
  
 THE TAIL WIND FUND LTD.
 By:   TAIL WIND ADVISORY AND
 MANAGEMENT LTD., as
 investment manager

		
	By:	 	 /s/ David Crook

	 Name:
	 	 David Crook

	 Title:
	 	 CEO

  

			
	 SOLOMON STRATEGIC HOLDINGS, INC.

		
	By:	 	 /s/ Andrew P. MacKellar

	 Name:
	 	 Andrew P. MacKellar

	 Title:
	 	 Director

  

 13Conversion/Redemption Agreement dated October 7, 2004

 EXHIBIT 10.3 
  
 CONVERSION/REDEMPTION AGREEMENT 
  
 This CONVERSION/REDEMPTION AGREEMENT (“Agreement”) is made as of this 7th day of October, 2004 by and between HARKEN ENERGY CORPORATION, a Delaware corporation (the “Company”), THE TAIL WIND FUND LTD and
SOLOMON STRATEGIC HOLDINGS, INC. (collectively with The Tail Wind Fund Ltd., “Holders”, and each a “Holder”). 
  
 WITNESSETH: 
  
 WHEREAS, pursuant to that certain Preferred Stock Purchase Agreement (“Purchase Agreement”) dated as of May
28, 2004 by and between the Company and the Holders, the Company sold and issued to the Holders on May 28, 2004, among other securities, an aggregate of 50,000 shares (“Preferred Shares”) of the Company’s Series L Cumulative
Convertible Preferred Stock, liquidation preference $100 per share, having the rights, designations and preferences set forth in the Certificate of Designations for such Preferred Shares filed with the Secretary of State of the State of Delaware on
May 28, 2004 (the “Designation”), which Preferred Shares are convertible into shares of the Company’s Common Stock (the “Underlying Shares”), in accordance with the terms of the Designation; capitalized terms
used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Purchase Agreement or Designation, as applicable; 
  
 WHEREAS, the Holders still own all of the originally issued Preferred Shares; 
  
 WHEREAS, the Underlying Shares are registered for resale pursuant to a registration statement originally filed with the SEC
under the Securities Act of 1933, as amended (“Securities Act”), on July 22, 2004 and declared effective August 17, 2004 (“Registration Statement”); and 
  
 WHEREAS, in order to induce the Holders to convert their Preferred Shares as set forth herein, the Company wishes to reduce
the Conversion Price under the Designation pursuant to Section 5(c)(vii) of the Designation for a limited time in consideration for the terms and conditions contained herein; 
  
 NOW THEREFORE, in consideration of the foregoing premises and the mutual covenants set forth in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 1. Agreement to Convert. Subject to a redemption of such Preferred Shares pursuant to Section 2 below, each Holder hereby agrees to
convert on the following dates (each an “Installment Date”) at least 20% of the Preferred Shares originally issued to such Holder: the date which is one (1) Trading Day following the date hereof, November 2, 2004, December 1, 2004,
December 30, 2004 and February 1, 2005, provided that on such applicable Installment Date there exists Effective Registration. “Effective Registration” means (i) the resale of all Registrable Securities (as defined in the
Registration Rights Agreement) is covered by an effective registration statement in accordance with the terms of the Registration Rights Agreement which registration statement is not subject to any suspension or stop orders; (ii) the resale of such
Registrable Securities may be effected pursuant to a current and deliverable prospectus (including any applicable prospectus supplements) that is not subject at the time to 
  

 1 

 any blackout or similar circumstance; (iii) such Registrable Securities are listed, or approved for listing prior to
issuance, on the Nasdaq National or Small-Cap Market, the New York Stock Exchange or the American Stock Exchange, and are not subject to any trading suspension (nor shall trading generally have been suspended on such exchange or market), and the
Company shall not have been notified of any pending or threatened proceeding or other action to delist or suspend the Common Stock on any of such markets on which the Common Stock is then traded or listed; (iv) the requisite number of shares of
Common Stock has been duly authorized and reserved for issuance as required by the terms of the Purchase Agreement; and (v) the average of the VWAPs for the twenty (20) consecutive Trading Days immediately preceding the Conversion Date is greater
than $0.25. For clarification, the terms and conditions relating to any conversion pursuant to this Section 1 are governed by the Designation (at the reduced Conversion Price as provided in Section 3 (below). Section 5(i) of the Designation shall
not be deemed to restrict or in any way limit the Holder’s obligation to convert the Preferred Shares pursuant to this Section 1, provided that no Holder shall have the right to obtain shares of Common Stock under the Designation to the
extent same would cause the Restricted Ownership Percentage to be exceeded. 
  
 2. Redemption by Company. In lieu of forcing any conversion pursuant to Section 1 above, the Company shall have the right to redeem for cash on each Installment Date 20% of the Preferred Shares
originally issued to such Holder at a redemption price (“Installment Redemption Price”) equal to the Liquidation Value of such Preferred Shares on such Installment Date, provided that the Company shall deliver to the Holders written
notice electing to so redeem in cash at least twenty (20) Trading Days prior to each such Installment Date on which the Company is electing to so redeem in cash. Each Holder shall be treated proportionately with respect to the Company’s
election to redeem in cash. To the extent that any Holder elects not to convert any Preferred Shares pursuant to Section 1 above as of any Installment Date due to a lack of Effective Registration, then the Company shall redeem for cash on such
Installment Date 20% of the Preferred Shares originally issued to such Holder at a redemption price equal to the Installment Redemption Price. In the event that the Company fails to timely issue Underlying Shares to any Holder following a conversion
pursuant to Section 1 above, such Holder shall have the right to elect to have such Preferred Shares redeemed at the Installment Redemption Price instead. Any payment of the Installment Redemption Price pursuant to this Section 2 shall be paid on
the applicable Installment Date, or if pursuant to the preceding sentence, within three (3) Trading Days following demand therefore. If the Installment Redemption Price is not paid within three (3) Trading Days of the due date, such amount shall
bear interest at the lower of 18% or the highest rate permitted by law. 
  
 3. Conversion Price Reduction. Notwithstanding anything contained in the Designation, pursuant to Section 5(c)(vii) of the Designation, the Company hereby irrevocably reduces the Conversion Price as defined in the
Designation for the period commencing on the day following the date hereof and ending on April 30, 2005 to a price equal to $0.52 for the first Installment Date and thereafter the average of the VWAPs for the twenty (20) consecutive Trading Days
immediately preceding the applicable Conversion Date (“Pricing Period”). Each VWAP during the Pricing Period shall be appropriately and equitably adjusted in the event of any stock split, stock dividend, distribution or similar
event consistent with Section 5(c) of the Designation. Contemporaneously with the execution of this Agreement the Company shall execute and deliver to the Holders by facsimile and mail, first class, postage prepaid a notice of such reduction in the
form of notice attached hereto as Exhibit A. 
  

 2 

 4. Registration Rights.  
  
 (a) Certain Representations. The Company represents that (i) up to
12,704,250 Underlying Shares issuable upon conversion of the Preferred Shares (whether pursuant to Section 2 above or otherwise), are registered for resale by the Holders, (ii) the Registration Statement is effective, and (iii) the resale of such
Underlying Shares may be effected pursuant to the prospectus contained therein which is not subject to any blackout or similar circumstance. In addition, the Company shall file a current report on Form 8-K concerning the facts and material terms of
this Agreement within (2) business days of the date hereof. 
  
 (b) New Registration Statement for Underlying Shares. If at any time the number of Underlying Shares issued and issuable upon full conversion of all Preferred Shares (without regard to any restrictions on beneficial ownership)
exceeds 90% of the number of shares of Common Stock registered under the Registration Statement, then the Company shall (1) within five (5) Trading Days prepare a new registration statement on Form S-3 (or, if Form S-3 is not then available to the
Company, on such form of registration statement as is then available to effect a registration for resale of such additional Registrable Securities) covering the resale of additional Underlying Shares in an amount equal to 130% of the number of
Underlying Shares issued and issuable upon full conversion of the Preferred Shares at the Conversion Price as of the filing date (without regard to any restrictions on beneficial ownership), (2) use its best efforts to file such new registration
statement with the SEC as soon as practicable, and (3) cause such new registration statement to be declared effective as soon as practicable following such filing. For clarification, the terms and conditions of the Registration Rights Agreement
(including without limitation Section 2(c)(i) thereof) shall apply to such new registration statement, which shall constitute a “Registration Statement” thereunder, with the term “Closing Date” referring to the date on which such
90% threshold is exceeded. 
  
 (c) New Registration Statement
for Warrants. The Company shall register for resale 130% of the Warrant Shares underlying the Warrants (without regard to any restrictions on beneficial ownership) in the registration statement that the Company will be filing pursuant to that
certain registration rights agreement entered into on or about the date hereof between the Company and the Holders in connection with the Holders’ purchase of the Company’s Series M Cumulative Convertible Preferred Stock. The terms and
conditions of such registration rights agreement (including without limitation Section 2(c)(i) thereof) shall apply to the registration of such Warrant Shares, and the Warrant Shares shall constitute “Registrable Securities” thereunder.

  
 5. Miscellaneous. 
  
 (a) Full Force and Effect. Except as otherwise expressly provided
herein, each of the Purchase Agreement, the Registration Rights Agreement, the Designation and the Warrants and the other agreements and transactions contemplated thereby shall remain in full force and effect. 
  
 (b) Warrants Clarification. In Section 3(a) of the Warrants the words
“Exercise Date” mean the issuance date thereof, and such words shall therefore be replaced with “issuance hereof”. 
  

 3 

 (c) Consent to Jurisdiction Etc. Each of the Company and each Holder agree that any legal action
or proceeding relating to or arising out of or under this Agreement may be brought in the state or federal courts in the State of New York, County of New York, and each party accepts with regard to any such action or proceeding for itself and in
respect to its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each party further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified U.S. mail, postage prepaid, to it at its addresses provided in the Purchase Agreement, such service to become effective upon receipt or five (5) days after such mailing, whichever shall first
occur. To the fullest extent permitted by applicable law, each party hereby waives, and agrees not to assert, by way of motion, defense, counterclaim or otherwise, in any such suit, action or proceeding any claim that (i) it is not personally
subject to the jurisdiction of any of the above-named courts by reason of any immunity or otherwise, (ii) its properties are exempt or immune from setoff, execution or attachment, either prior to judgment or in aid of execution or (iii) any suit,
action or proceeding so brought is in an inconvenient forum or that the venue of the suit, action or proceeding is improper or that the subject matter hereof may not be enforced in or by such courts. 
  
 (d) Authority. Each party hereto hereby represents and warrants to the
other party that the execution and delivery by such party of this Agreement, and the performance by such party of its obligations hereunder, have been duly and validly authorized by such party, with no other action on the part of such party being
necessary. This Agreement has been duly and validly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party enforceable against such party in accordance with its terms. 
  
 (e) Indemnification. Each party hereto hereby agrees to indemnify and
hold harmless the other party against all losses, claims, damages, liabilities, costs (including without limitation reasonable attorney’s fees) and expenses imposed or incurred in connection with any breach or misrepresentation hereunder by
such party or any enforcement of this indemnification. 
  
 (f)
Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 
  
 (g) Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if
delivered personally, by courier or by facsimile transmission or mailed (first class postage prepaid) to the parties at the addresses or facsimile numbers set forth in the Purchase Agreement. 
  
 (h) Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 
  

 4 

 (i) Further Assurances. Each party shall do and perform, or cause to be done and performed, all
such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement
and the consummation of the transactions contemplated hereby. 
  
 ***Signatures Appear on the Next Page*** 
  

 5 

 IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be duly executed as of the
date first written above. 
  

			
	HARKEN ENERGY CORPORATION
		
	By:	 	/s/ Elmer A. Johnston
	 Name:
 Title:
	 	 Elmer A. Johnston
 Vice President

  

			
	 THE TAIL WIND FUND LTD.
 By:   TAIL WIND ADVISORY AND MANAGEMENT LTD., as investment manager

  

			
		
	By:	 	/s/ David Crook
	 Name:
 Title:
	 	 David Crook
 CEO

  

			
	SOLOMON STRATEGIC HOLDINGS, INC.
		
	By:	 	/s/ Andrew P. MacKellar
	 Name:
 Title:
	 	 Andrew P. MacKellar
 Director

  

 6 

 EXHIBIT A 
  
 Conversion Price Reduction Notice 
  
 HARKEN ENERGY CORPORATION 
 180 State Street, Suite 200 
 Southlake, TX 76092 
  
 VIA FACSIMILE AND FIRST CLASS MAIL 
  
 October 7, 2004 
  
 The Tail Wind Fund Ltd. 
 c/o Tail Wind Advisory
and Management Ltd. 
 Attn: David Crook 
 1st Floor, No. 1 Regent
Street 
 London, SW1Y 4NS UK 
 Facsimile: +011 (44) 207-468-7657

  
 Solomon Strategic Holdings, Inc. 
 c/o Andrew P. MacKellar (Director) 
 Greenlands, The Red Gap 
 Castletown, IM9 1HB 
 British Isles 
 Facsimile: +011 (44) 1624 824191 
  

	Re:	Shares of Series L Cumulative Convertible Preferred Stock (“Preferred Shares”) of Harken Energy Corporation, a Delaware corporation (the “Company”);
Conversion/Redemption Agreement dated as of the date hereof between The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc. (“Agreement”)  

  
 Dear Sirs: 
  
 The Company hereby notifies The Tail Wind Fund Ltd. and Solomon Strategic Holdings, Inc., constituting all the holders of Preferred Shares, that, pursuant to Section
5(c)(vii) of the Certificate of Designation for the Preferred Shares filed with the Secretary of State of the State of Delaware on May 28, 2004 (“Designation”), the Company hereby irrevocably reduces the Conversion Price as defined in the
Designation for the period commencing tomorrow and ending on April 30, 2005 to a price equal to $0.52 for the first Installment Date (as defined in the Agreement) and thereafter the average of the VWAPs for the twenty (20) consecutive Trading Days
immediately preceding the applicable Conversion Date (“Pricing Period”). Each VWAP during the Pricing Period shall be appropriately and equitably adjusted in the event of any stock split, stock dividend, distribution or similar event
consistent with Section 5(c) of the Designation. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed thereto in the Designation. 
  

			
	 Sincerely,
  
 HARKEN ENERGY CORPORATION

		
	By:	 	/s/ Michael Faulkner
	 Name:
 Title:
	 	 Michael Faulkner
 President and
CEO

  
 Cc: Peter J. Weisman, Esq.

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