Document:

Exhibit 10.1

 

THIRD EXTENSION AGREEMENT

This AGREEMENT (this “Agreement”) is dated as of September 12, 2014 and made between:

	(1)	FAR EAST ENERGY (BERMUDA), LTD., a company incorporated in Bermuda with its registered office at Clarendon House, 2 Church Street, Hamilton HM II, Bermuda with registration number 36700 (the “Borrower”);

	(2)	FAR EAST ENERGY CORPORATION, a company incorporated in the State of Nevada, United States of America, with its registered office at 711 S. Carson Street, Suite 4, Carson City, Nevada with registration number NV20001201882 (the “Guarantor”); and

	(3)	STANDARD CHARTERED BANK as lender (the “Lender”).

PRELIMINARY STATEMENTS:

	(A)	The Borrower, the Guarantor and the Lender are parties to that certain Facility Agreement dated as of November 28, 2011 as amended by an Amendment Letter Agreement dated as of May 21, 2012, as further amended by a Second Amendment to Facility Agreement dated as of November 28, 2012, as further amended by a Third Amendment to Facility Agreement dated as of December 18, 2012, as further amended by a Fourth Amendment to Facility Agreement dated as of January 8, 2013, as further amended by a Fifth Amendment to Facility Agreement dated as of January 15, 2013, and as further amended as of December 31, 2013 and extended by Extension Agreement dated as of March 31, 2014 and Second Extension Agreement dated as of July 9, 2014 (the “Second Extension Agreement”), providing for a secured term loan facility for the purposes described therein (collectively, the “Facility Agreement”).

	(B)	The Facility is fully drawn in the amount of U.S $21,000,000.00.

	(C)	The Loans made under the Facility are due to be repaid on the Termination Date of September 15, 2014.

	(D)	Accrued interest on each Loan in the aggregate amount of U.S.$183,645.29 is due on September 15, 2014.

	(E)	A payment of $175,000 (the “Additional Payment”) is due the Lender on September 15, 2014 pursuant to Clause 4.2 of the Second Extension Agreement.

	(F)	The Borrower has requested that the Termination Date under the Facility Agreement be extended to October 31, 2014, and that the Additional Payment be deferred to the same date.

	(G)	As a condition precedent to the extension of maturity of the Loans the Borrower shall, among other things, pay to the Lender all interest accrued and payable under the Facility Agreement as of the Effective Date.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements contained herein, it is agreed as follows:

	1.	INTERPRETATION

	1.1	Definitions

In this Agreement:

“Effective Date” means the date on which the Lender confirms to the Borrower that it has received all of the documents and other evidence required under Clause 2 (Conditions Precedent and Effectiveness) of this Agreement in form and substance satisfactory to the Lender.

	1.2	Interpretation

		(a)	Capitalized terms used and not defined in this Agreement have the meaning ascribed to them in the Facility Agreement.

		(b)	The provisions of clause 1.2 (Construction) of the Facility Agreement apply to this Agreement as if they were set out in full in this Agreement, except that references therein to ‘this Agreement’ are to be construed as references to this Agreement.

	2.	CONDITIONS PRECEDENT AND EFFECTIVENESS

It shall be a condition precedent to the effectiveness of this Agreement that the Lender has received all of the following documents and other evidence in form and substance satisfactory to the Lender:

	2.1	The following documents in respect of the Obligors:

		(a)	A copy of the constitutional documents of each Obligor.

		(b)	A copy of a resolution of the board of directors of each Obligor:

		(i)	approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute this Agreement;

		(ii)	authorizing a specified person or persons to execute this Agreement on its behalf;

		(iii)	authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices to be signed and/or dispatched by it under or in connection with this Agreement; and

		(iv)	in the case of a Guarantor, resolving that it is in the best interests of the relevant guarantor to enter into the transactions contemplated by this Agreement.

		(c)	A specimen of the signature of each person authorized by the resolution referred to in paragraph (b) above.

		(d)	A certificate of an authorized signatory of the relevant Obligor certifying that each copy document relating to it specified in this Clause 2 (Conditions Precedent and Effectiveness) is correct, complete and in full force and effect as at a date no earlier than the Effective Date.

		(e)	A certificate as to the existence and good standing (including verification of tax status, if available) of each Obligor from the appropriate governmental authorities in such Guarantor’s jurisdiction of organization, in form and substance satisfactory to the Lender and its legal advisors.

	2.2	A duly executed original of this Agreement.

	2.3	Evidence that any interest payable by the Borrower under the Facility Agreement has been paid.

	2.4	Legal opinion of Baker & McKenzie LLP, legal advisors to the Borrower and the Guarantor, in respect of New York law in substantially the form distributed to the Lender prior to signing this Agreement.

	2.5	Evidence that all costs and expenses of the Lender (including professional fees) incurred prior to the Effective Date in connection with the Group, the Finance Documents and this Agreement have been paid by the Borrower.

	2.6	A copy of any other Authorization or other document, opinion or assurance which the Lender considers to be necessary in connection with the entry into and performance of the transactions contemplated by any Finance Document.

	3.	REPRESENTATIONS AND WARRANTIES

Each Obligor jointly and severally represents and warrants to the Lender on the date of this Agreement and on the Effective Date that:

		(a)	The obligations expressed to be assumed by it in this Agreement are (subject to applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of creditors rights generally) legal, valid, binding and enforceable obligations.

		(b)	All of the representations and warranties contained in clauses 18.1 – 18.29 (Representations) of the Facility Agreement are true and correct.

	4.	EXTENSION OF MATURITY OF THE LOANS

	4.1	Subject to the conditions set forth in Clause 2 hereof, effective as of the Effective Date the Lender hereby agrees to extend the Termination Date under the Facility Agreement to October 31, 2014 (except that, if the Termination Date would otherwise fall on a day which is not a Business Day, it will instead be the immediately preceding Business Day).

	4.2	It is further agreed that the Additional Payment due pursuant to Clause 4.2 of the Second Extension Agreement shall be due on the Termination Date and if not made when due shall constitute an Unpaid Sum (as defined in the Facility Agreement) accruing default interest at the rate set forth in Clause 3.8 and shall be subject to the provisions set forth therein.

	5.	RELEASE OF LENDER AND RELATED PARTIES

	5.1	Each Obligor voluntarily and knowingly releases, holds harmless, and forever discharges the Lender and each of the Lender’s predecessors, agents, shareholders, partners, directors, officers, employees, representatives, professionals and their respective successors and assigns (the “Released Parties”) from all possible claims, demands, actions, causes of action, damages, costs or expenses, and liabilities whatsoever, known or unknown, anticipated or unanticipated, suspected or unsuspected, fixed, contingent, or conditional, at law or in equity, originating in whole or in part on or before the Effective Date which any Obligor may now or hereafter have against any of the Released Parties and irrespective of whether any such claims arise out of contract, tort, violation of law or regulations, or otherwise, including, without limitation, the exercise of any rights and remedies under, and all other matters relating to, the Finance Documents, and the negotiation and execution of this Agreement.

	6.	MISCELLANEOUS

	6.1	Limited Waiver

Without limiting the generality of the provisions of Clause 33 (Amendments and Waivers) of the Facility Agreement, the consent set forth herein shall be limited precisely as written and is provided solely for the purpose of extending the maturity of the Loans, and this Agreement does not constitute, nor should it be construed as, a waiver of compliance by the Obligors of any other term, provision or condition of the Facility Agreement or any other instrument or agreement referred to therein.

	6.2	Finance Document

This Agreement is a Finance Document.

	6.3	Costs and expenses

The Borrower agrees that the provisions of clause 16 (Costs and Expenses) of the Facility Agreement shall apply to this Agreement.

	6.4	Counterparts

This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

	6.5	Reservation of rights

The Parties reserve all rights with respect to any continuing or future Default.

	6.6	Confirmations

		(a)	The Guarantor hereby acknowledges that it has read this Agreement and consents to its terms, and hereby confirms and agrees that, notwithstanding the effectiveness of this Agreement, its guarantee of the Borrower’s obligations under the Finance Documents (the “Guaranteed Obligations”) shall not be impaired or affected and such guarantee is, and shall continue to be, in full force and effect and is hereby confirmed and ratified in all respects.

		(b)	The Obligors acknowledge and agree that (i) all liens evidenced by the Facility Agreement and the Security Documents are hereby ratified, confirmed and continued, (ii) the extension of maturity of the Loans pursuant to this Agreement, the other agreements set forth herein and the execution of this Agreement shall not constitute a re-grant of any existing Security granted in connection with the Facility Agreement (the “Existing Security”), (iii) the Existing Security shall remain in full force and effect after giving effect to this Agreement, and (iv) the Existing Security extends to the Guaranteed Obligations as amended pursuant to this Agreement.

	6.7	Governing law

THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS APPLICABLE IN THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES).

[Signature page follows]

This Agreement has been entered into as of the date stated at the beginning hereof.

SIGNATORIES

	
BORROWER:

	
 

	
 

	
 

	
 

	
FAR EAST ENERGY (BERMUDA), LTD.

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Michael R. McElwrath

	
 

	
Name: Michael R. McElwrath

Title: Chairman

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
GUARANTOR:

	
 

	
 

	
 

	
 

	
FAR EAST ENERGY CORPORATION

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Michael R. McElwrath

	
 

	
Name: Michael R. McElwrath

	
 

	
Title: Chief Executive Officer and President

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
LENDER:

	
 

	
 

	
 

	
 

	
STANDARD CHARTERED BANK

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Marc Chait

	
 

	
Name: Marc Chait

	
 

	
Title: Director

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:

	
/s/ Philip Rees

	
 

	
Name: Philip Rees

	
 

	
Title: Senior Manager

	
 

Signature page to Extension Agreement2014-09-12 S-3 Exhibit 4.4

		

			 

		

		
			Exhibit 4.4
		

		
			FORM OF WARRANT 
		

		
			 
		

		
			NEITHER THIS WARRANT, NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “SECURITIES”), HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES OR BLUE SKY LAWS, PURSUANT TO REGISTRATION OR QUALIFICATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES OR BLUE SKY LAWS. THIS WARRANT IS SUBJECT TO TRANSFER RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT, DATED AS OF MAY 8, 2013, COPIES OF WHICH ARE AVAILABLE WITH THE SECRETARY OF THE ISSUER. 
		

		
			VERMILLION, INC. 
		

		
			WARRANT 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Warrant No. [    ]

					
					
						 

					
					
						Date of Issuance: May 13, 2013

				

		
			Vermillion, Inc., a Delaware corporation (the “Company”), hereby certifies that, for value received, [—], a [—], or its registered assign (the “Holder”), is entitled to purchase from the Company [•] shares (as adjusted from time to time as provided in Section 12) of common stock, par value $0.001 per share, of the Company (the “Common Stock”) (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”), at an exercise price determined pursuant to Section 3 (the “Exercise Price”), at any time and from time to time from and after the 90TH day following the date hereof through and including the date that is three (3) years following the date of issuance set forth above (the “Expiration Date”), and subject to the following terms and conditions: 
		

		
			1. Purchase Agreement. This Warrant is one of a series of Warrants (collectively, the “Warrants”) issued by the Company in connection with that certain Securities Purchase Agreement, entered into on May 8, 2013 (the “Purchase Agreement”), by and among the Company and Holder and certain other Purchasers, and is subject to, and the Company and the Holder shall be bound by, all the applicable terms, conditions and provisions of the Purchase Agreement. 
		

		
			2. Definitions. In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein shall have the meanings assigned to such terms in the Purchase Agreement. 
		

		
			3. Exercise Price. This Warrant may be exercised for a price per Warrant Share equal to $1.46, subject to adjustment from time to time pursuant to Section 12.  
		

		
			4. Registration of Warrant. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary. 
		

		

		

		 

		

			 

		

 

		

			 

		

		5. Registration of Transfers. Subject to the Holder’s appropriate compliance with the restrictive legend on this Warrant, the Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment substantially in the form attached hereto as Attachment B duly completed and signed, to the Company at its address specified herein. Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant. 
		

		
			6. Exercise and Duration of Warrants. This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the date hereof to and including the Expiration Date. At 6:30 p.m., New York City time, on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value. The Company may not call or redeem all or any portion of this Warrant without the prior written consent of the Holder. 
		

		
			7. Delivery of Warrant Shares.  
		

		
			(a) To effect conversions hereunder, the Holder shall not be required to physically surrender this Warrant unless the aggregate number of Warrant Shares represented by this Warrant is being exercised. Upon delivery of an Exercise Notice substantially in the form attached hereto as Attachment A (an “Exercise Notice”) to the Company at its address for notice determined as set forth herein, and upon payment of the applicable Exercise Price multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder, the Company shall promptly (but in no event later than five (5) trading days after the Date of Exercise (as defined below)) issue and deliver, or cause its transfer agent to issue and deliver, to the Holder a certificate for the Warrant Shares issuable upon such exercise registered in the name of the Holder or its designee. A “Date of Exercise” means the date on which the Holder shall have delivered to the Company: (i) an Exercise Notice, appropriately completed and duly signed, and (ii) payment of the Exercise Price (by certified or official bank check, intra-bank account transfer or wire transfer) for the number of Warrant Shares so indicated by the Holder to be purchased. 
		

		
			(b) If by the fifth trading day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 7(a), the Holder will have the right to rescind such exercise. 
		

		
			(c) The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof. 
		

		
			8. Charges, Taxes and Expenses. Issuance and delivery of certificated or uncertificated shares of Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee, or other incidental tax or expense in respect of the issuance of such shares, all of which taxes and expenses shall be paid by the Company; provided,  however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof. 
		

		

		

		 

		

			 

		

 

		

			 

		

		9. Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a new warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe. If a new warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver this mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the new warrant. 
		

		
			10. Reservation of Warrant Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from Liens or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 12). The Company covenants and warrants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable. 
		

		
			11. Notice of Certain Corporate Action. In case the Company shall propose (a) to offer to the holders of its Common Stock rights to subscribe for or to purchase any shares of Common Stock or shares of stock of any class or any other securities, rights or options, or (b) to effect any reclassification of its Common Stock (other than a reclassification involving only the subdivision, or combination, of outstanding shares of Common Stock), or (c) to effect any capital reorganization, or (d) to effect any Fundamental Transaction (as defined below), or (e) to effect the liquidation, dissolution or winding up of the Company or (f) to offer to the holders of its Common Stock the right to have their shares of Common Stock repurchased or redeemed or otherwise acquired by the Company, or (g) to take any other action which would require the adjustment of the Exercise Price and/or the number of Warrant Shares issuable upon exercise of this Warrant, then in each such case (but without limiting the provisions of Section 12), the Company shall give to the Holder, a notice of such proposed action, which shall specify the date on which a record is to be taken for purposes of such dividend, distribution of offer of rights, or the date on which such reclassification, reorganization, Fundamental Transaction, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed and shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Common Stock. Such notice shall be so given at least ten (10) Business Days prior to the record date for determining holders of the Common Stock for purposes of participating in or voting on such action, or at least ten (10) Business Days prior to the date of the taking of such proposed action or the date of participation therein by the holders of Common Stock, whichever shall be the earlier. Such notice shall specify, in the case of any subscription or repurchase rights, the date on which the holders of Common Stock shall be entitled thereto, or the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon any reorganization, reclassification, Fundamental Transaction or other action, as the case may be. Such notice shall also state whether the action in question or the record date is subject to the effectiveness of a registration statement under the Securities Act or to a favorable vote of security holders, if either is required, and the adjustment in Exercise Price and/or number of Warrant Shares issuable upon exercise of this Warrant as a result of such reorganization, reclassification, Fundamental Transaction or other action, to the extent then determinable. No such notice shall be given if the Company reasonably determines that the giving of such notice would require disclosure of material information which the Company has a bona fide purpose for preserving as confidential or the disclosure of which would not be in the best interests of the Company. 
		

		
			12. Certain Adjustments. The number of Warrant Shares issuable upon exercise of this Warrant is subject to adjustment from time to time as set forth in this Section 12.  
		

		
			(a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of any Warrants), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by 
		

		 

		

			 

		

 

		

			 

		

		way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of Common Stock any shares of capital stock of the Company; then in each such case (A) the Exercise Price will be adjusted by multiplying the Exercise Price then in effect by a fraction, the numerator of which equals the number of shares of Common Stock outstanding immediately prior to such event (excluding treasury shares, if any), and the denominator of which equals the number of shares of Common Stock outstanding immediately after such event, and (B) the number of Warrant Shares issuable hereunder shall be concurrently adjusted by multiplying such number by the reciprocal of such fraction. Such adjustments will take effect (i) if a record date shall have been fixed for determining the stockholders or security holders, as applicable, of the Company entitled to receive such dividend, distribution or issuance by reclassification, as the case may be, immediately after such record date, (ii) otherwise, immediately after the effective date of such dividend, distribution, subdivision, combination, or issuance by reclassification, as the case may be. 
		

		
			(b) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or a series of related transactions, (A) effects any merger or consolidation of the Company with or into another Person, (B) effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets, (C) effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (except for issuances by reclassification contemplated by Section 12(a)(iv)), or (D) consummates a stock or share purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or group making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (ii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person or group of Persons) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property (each transaction or series of transactions referred to in clause (i) or (ii) above, a “Fundamental Transaction”); then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, (1) the number of shares of common stock of the successor or acquiring corporation or, if it is the surviving corporation, of the Company, and (2) any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount and components of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Board shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration (substituting the most appropriate market-based measure for the Trading Market in determining the daily VWAP from time to time for each component of the Alternate Consideration or, if no market-based measure is reasonably available for any such component, fixing the daily VWAP of such component at the value determined by such apportionment, but subject to further adjustment as provided in this Section 11). If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant of like tenor to this Warrant but adjusted to be consistent with the foregoing provisions and evidencing the Holder’s right to exercise such warrant for the appropriate number of shares of capital stock and Alternate Consideration, if any, in exchange for this Warrant. The Company shall ensure that the terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 12(b) and ensuring that this Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction or series of related transactions analogous to a Fundamental Transaction. “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (A) if the Common Stock is then listed or quoted on a trading market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the principal trading market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. 
		

		 

		

			 

		

 

		

			 

		

		(based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (B) if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported during trading hours, or (C) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Company’s Board of Directors and reasonably acceptable to the Holder, the fees and expenses of which shall be paid by the Company. 
		

		
			(c) Notice of Adjustment. Upon any adjustment of the Exercise Price, and from time to time upon the request of the Holder, the Company shall furnish to the Holder the Exercise Price resulting from such adjustment or otherwise in effect and the number of Warrant Shares then available for purchase under this Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. 
		

		
			13. No Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise of this Warrant. In lieu of any fractional shares which would otherwise be issuable, the Company shall pay the Holder an amount of cash equal to the product of such fraction multiplied by the closing price of one share of Common Stock as reported on the principal trading market for the Common Stock on the Date of Exercise. 
		

		
			14. No Impairment. The Company shall not by any action including, without limitation, amending its Certificate of Incorporation, any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but shall at all times in good faith assist in the carrying out of all such terms and in the taking of all such action, as may be necessary or appropriate to protect the rights of the Holder against impairment. Without limiting the generality of the foregoing, the Company shall take all such action as may be necessary or appropriate in order that the Company may validly issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant at the then Exercise Price therefor. 
		

		
			15. No Rights as a Stockholder; Notice to Holder. Nothing contained in this Warrant shall be construed as conferring upon the Holder the right to vote or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Company or any other matter, or any rights whatsoever as a stockholder of the Company. 
		

		
			16. Warrant Agent. The Company shall serve as warrant agent under this Warrant. Upon thirty (30) days notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholders services business shall be a successor warrant agent under this Warrant without any further act. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register. 
		

		
			17. Miscellaneous.  
		

		
			(a) Notices. Any and all notices or other communications or deliveries hereunder (including any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number pursuant to this Section 17(a) prior to 6:30 p.m. (New York City time) on a trading day, (ii) the next trading day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified pursuant to this Section 17(a) on a day that is not a trading day or later than 6:30 p.m. (New York City time) on any trading day, (iii) the trading day following the date of mailing, if sent by nationally recognized overnight courier service to the street address specified pursuant to this Section 17(a), or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall be as follows: 
		

		

		

		 

		

			 

		

 

		

			 

		

		
		

		
			(i) if to the Company, to: 
		

		
			Vermillion, Inc. 
		

		
			12117 Bee Caves Road, Building 3, Suite 100 
		

		
			Austin, Texas 78738 
		

		
			Attn: Chief Executive Officer 
		

		
			Facsimile: 512-439-6980 
		

		
			with a copy to (which shall not constitute notice to the Company): 
		

		
			Paul Hastings LLP 
		

		
			1117 S. California Ave. 
		

		
			Palo Alto, CA 94304 
		

		
			Attn: Robert Claassen 
		

		
			Facsimile: 650-320-1984 
		

		
			 
		

		
			 
		

		
			(ii) if to the Holder, to the address, facsimile number or email or street address appearing on the Warrant Register (which shall initially be the facsimile number and email and street address set forth for the initial Holder in the Purchase Agreement); 
		

		
			or to such other address, facsimile number or email address as the Company or the Holder may provide to the other in accordance with this Section 17(a).  
		

		
			(b) Assignment. Subject to the restrictions on transfer described herein, the rights and obligations of the Company and the Holder shall be binding upon, and inure to the benefit of, the successors, assigns, heirs, administrators and transferees of the parties. The Company shall not have the right directly or indirectly to assign or transfer this Warrant without the prior written consent of the Holder, which may be withheld in the Holder’s sole discretion, or as part of a Fundamental Transaction. 
		

		
			(c) No Third Party Beneficiaries. Nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. 
		

		
			(d) Amendments; Waiver. This Warrant may be amended only in writing signed by the Company and the Holder, and any amendment so effected shall amend each Warrant issued pursuant to the Purchase Agreement and be binding upon each holder of such Warrants (provided,  however, that any such amendment that adversely affects any holder or class of holders of such Warrants in a manner that does not apply uniformly to all holders of such Warrants, as applicable, shall require the written consent of such adversely affected holders or class). Any provision of this Warrant may be waived, but only if in writing by the party against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement of this Warrant shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. 
		

		
			(e) Governing Law. This Warrant shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflict of laws. 
		

		
			(f) Severability. If one or more provisions of this Warrant are held to be unenforceable under applicable law in any respect, such provision shall be excluded from this Warrant and the balance of this Warrant shall be construed and interpreted as if such provision were so excluded and shall be enforceable in accordance with its remaining terms. 
		

		
			[Remainder of Page Intentionally Left Blank; Signature Page Follows]  
		

		
			 
		

		
			IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above. 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				

		 

		

			 

		

 

		

			 

		

			
					
						VERMILLION, INC., a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						By:

					
					
						 

					
					
						 

				
	
					
						Name:

				
	
					
						Its:

				

		
			[Signature Page – Warrant] 
		

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		
		

		
			ATTACHMENT A 
		

		
			EXERCISE NOTICE 
		

		
			To Vermillion, Inc.: 
		

		
			The undersigned hereby irrevocably elects to purchase shares (the “Shares”) of common stock, par value $0.001 per share (“Common Stock”), of Vermillion, Inc., a Delaware corporation, pursuant to Warrant No.     , originally issued on             , 2013 (the “Warrant”). The undersigned elects to utilize the following manner of exercise: 
		

		
			Shares: 
		

		
			                     Full Exercise of Warrant 
		

		
			                     Partial Exercise of Warrant (in the amount of                  Shares) 
		

		
			Exercise Price: $             
		

		
			Manner of Exercise: 
		

		
			                     Certified or Official Bank Check 
		

		
			                     Intra-Bank Account Transfer 
		

		
			                     Wire Transfer 
		

		
			[Please issue a new Warrant for the unexercised portion of the attached Warrant in the name of the [undersigned]/[the undersigned’s nominee as is specified below].] 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Full Name of Holder*:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Signature of Holder or Authorized Representative:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Name and Title of Authorized Representative†:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Additional Signature of Holder (if jointly held):

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Social Security or Tax Identification Number:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Address of Holder:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Full Name of Nominee of Holder†:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Address of Nominee of Holder†:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				

		
			 
		

			
					
						* 

					
					
						Must conform in all respects to name of holder as specified on the face of the Warrant. 

				

			
					
						† 

					
					
						If applicable. 

				

		
			 
		

		

		

		 

		

			 

		

 

		

			 

		

		 
		

		
			ATTACHMENT B 
		

		
			FORM OF ASSIGNMENT 
		

		
			[To be completed and signed only upon transfer of Warrant]  
		

		
			FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                          the right represented by the attached Warrant to purchase              shares of Common Stock of Vermillion, Inc., a Delaware corporation (the “Company”), to which the Warrant relates and appoints                      as attorney to transfer said right on the books of the Company with full power of substitution in the premises. 
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Date:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Full Name of Holder*:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Signature of Holder or Authorized Representative:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Name and Title of Authorized Representative†:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Additional Signature of Holder (if jointly held):

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Address of Holder:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Full Name of Transferee:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						Address of Transferee:

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						In the presence of:

					
					
						 

					
					
						 

				

		
			 
		

		
			 
		

			
					
						 

					
						* 

					
					
						Must conform in all respects to name of holder as specified on the face of the Warrant. 

				

			
					
						† 

					
					
						If applicable.

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