Document:

ex10-5.htm

    
      

    

    EXHIBIT 10.5

    
       

      Confidential Treatment

       

    

    SUPPLY
AND DISTRIBUTION AGREEMENT

     

    This
SUPPLY AND DISTRIBUTION AGREEMENT (this “Agreement”), is made
as of September 16, 2009 (“Effective Date”) by
and between Printcolor Screen
Ltd., a Swiss company with its principal place of business at Welschloh
299 CH-8965 Berikon, Switzerland (“SUPPLIER”), and Applied DNA Sciences, Inc., a
Delaware corporation its principal place of business at 25 Health Sciences Drive
Suite 113, Stony Brook, New York 11790 (“BUYER”, and together
with SUPPLIER, the “Parties”).

     

    RECITALS

     

    WHEREAS,
the Parties desire to enter into this Supply and Distribution Agreement whereby
SUPPLIER will manufacture and supply certain products for BUYER under the terms
and conditions set forth in this Agreement, and BUYER will purchase and sell
such products to its customers.

     

    NOW,
THEREFORE, and in consideration of the mutual promises, covenants,
representations and good and valuable consideration set forth herein, the
adequacy of which is hereby acknowledged, the Parties hereto agree as
follows:

     

    ARTICLE
1.                         PRODUCTS,
ORDERS AND PRICING.

     

    1.1                 Manufacturing
Services.  During the term of this Agreement, SUPPLIER shall
manufacture and supply to BUYER on an exclusive basis (except as set forth in
Section 8.1 of this Agreement) and BUYER shall purchase
and acquire from SUPPLIER, those quantities of the AzSure formulation or any
derivatives thereof (the “Products”) as are
ordered by BUYER from time to time under, and subject to the terms and
conditions of, this Agreement.  Notwithstanding anything herein to the
contrary, BUYER shall not be obligated to utilize SUPPLIER’s manufacturing or
supply services with respect to any minimum amount of the Products or at
all.

     

    1.2                 Purchase
Price.  Prices for the Products sold under, and for the term
of, this Agreement shall be as set forth on the price list that appears as Schedule A to this
Agreement (the “Purchase Price”),
except for permitted adjustments made from time to time by written agreement of
the Parties (in which case an amended Schedule A shall
replace the old Schedule A and shall
be attached to this Agreement).

     

    1.3                 Payment; Payment Terms;
Payment Currency.  BUYER shall pay the amounts invoiced by
SUPPLIER for the Products ordered by BUYER.  In case of any dispute or
question, SUPPLIER shall first contact BUYER and attempt in good faith to
resolve the dispute/question.  Payments by BUYER shall be made
directly to SUPPLIER on or before the date which is sixty (60) days after the
date of receipt of such invoice.  All payments required to be made by
BUYER hereunder shall be made in Euros.

     

    1.4                 Compliance with
Law.  All of the Products to be manufactured or supplied
hereunder shall be made in accordance with all applicable laws and regulations
and shall be shipped with an MSDS.  In addition, SUPPLIER represents
and warrants that: (i) the Products, when received, shall meet
specifications and shall be of merchantable quality, fit and safe and free from
defects in material, design and workmanship; (ii) it possesses all licenses
and permits required by any governmental jurisdiction in which it or its
employees operate pursuant to this Agreement that may be required to manufacture
and sell the Products; (iii) the Products are manufactured and labeled in
compliance with all applicable environmental, health and safety laws and
regulations; (iv) the Products are fit for a particular purpose intended;
and (v) SUPPLIER and its customers shall have good title to all Products
sold to BUYER free and clear of all liens, claims and encumbrances.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    1.5                 Placing of
Orders.  During the Term or any Renewal Term of this Agreement,
BUYER shall submit written purchase orders to SUPPLIER clearly setting forth the
amounts of Product to be purchased by BUYER and requested shipping dates for the
ordered Products.  All purchase orders shall be in accordance with the
terms and conditions of this Agreement.  In the event of any conflict
between the terms of this Agreement and the terms of any purchase order issued
by BUYER, the terms of this Agreement will govern.

     

    ARTICLE
2.                         TERM
AND TERMINATION.

     

    2.1                 Term.  The
term of this Agreement shall continue from the Effective Date until the earlier
of (i) five (5) years after the Effective Date and (ii) the date this Agreement
is otherwise terminated in accordance with its terms (the “Initial
Term”).

     

    2.2                 Termination.  This
Agreement may be immediately terminated by either party upon (i) failure of the
other party to comply with laws and regulations which materially affect such
party’s contracting rights or reputation and where such failure is not cured
within thirty (30) days of receipt of written notice thereof; (ii) any material
breach of this Agreement by the other party which is not cured within thirty
(30) days of receipt of written notice thereof or (iii) the mutual agreement of
the Parties.

     

    2.3                 Renewal
Term.  This Agreement will automatically renew for consecutive
one (1) year terms under the same terms and conditions set forth herein (each a
“Renewal Term”)
unless terminated by either party upon delivering written notice to the other
party at least ninety (90) days but not more than one hundred twenty (120) days
prior to the end of the then existing term.  The Renewal Term(s), if
any, and the Initial Term are collectively referred to herein as the
“Term.”

     

    2.4                 Rights on Termination or
Expiration.  In the event of the termination or expiration of
this Agreement, in addition to all other remedies available at law or in equity,
the Parties shall have the following rights and obligations:

     

    
      	 
      	
              (a)

            	
              Within
      ten (10) days after the termination or expiration of this Agreement, each
      party shall return to the other any and all proprietary and Confidential
      Information of such party then in its possession or under its
      control.

            
	 	 	 
	 
      	
              (b)

            	
              Termination
      or expiration of this Agreement shall not release any party from the
      obligation to make payment to the other party of all amounts then and
      thereafter due and payable under this Agreement within thirty (30) days of
      termination or expiration, as the case may be.

            
	 	 	 
	 
      	
              (c)

            	
              Unless
      BUYER otherwise instructs SUPPLIER in writing, SUPPLIER shall fulfill all
      outstanding purchase orders submitted by BUYER in accordance with Section
      1.5 of this Agreement.

            
	 	 	 
	 
      	
              (d)

            	
              BUYER
      will have the option of requiring SUPPLIER to continue to supply the
      Products for a period up to six (6) months under the same terms applicable
      to this Agreement in order to maintain a continuity of supply in the
      transition.

            

    

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    ARTICLE
3.                        Delivery.  BUYER
shall provide SUPPLIER with reasonable lead time for the fulfillment and
delivery of purchase orders and SUPPLIER shall timely fulfill orders for
purchases received from BUYER and shall deliver the products wherever so
instructed by BUYER as follows:

     

    3.1.                  
Ex works (incoterms) Berikon, Switzerland.  SUPPLIER shall supply
shipping documents and the safety label.

     

    3.2.                 
SUPPLIER shall supply a batch identification number/barcode and MSDS with each
shipment, the content of the MSDS in accordance with applicable laws and
regulations, containing the AzSure product name.

     

    3.3.          
BUYER shall supply product labels printed at its own expense to
SUPPLIER.  The product labels will conform to the AzSure style and
contain a product code issued by SUPPLIER.

     

    ARTICLE
4.                        Time of
essence.  Time is of the essence as to the obligations of
SUPPLIER under each purchase order issued by BUYER in accordance with Section
1.5 of this Agreement.  The agreed upon lead times for the product
will be indicated on each such purchase order.  SUPPLIER agrees to
operate within the lead times agreed to by the parties as indicated on each such
purchase order.

     

    ARTICLE
5.                        Quality
Control.  The quality of the products, including, among other
things, the specifications in manufacturing the products, shall meet the quality
requirements of BUYER’s customers that are provided to SUPPLIER or otherwise
reasonably understood by SUPPLIER prior to acceptance of any purchase order
solely to the extent the foregoing relate to the products.

     

    ARTICLE
6.                        Risk of
Loss.  BUYER shall bear the risk of loss of, or damage to, any
of the products after the products have been placed on trucks at the loading
dock at SUPPLIER’s plant located at Berikon, Switzerland (the “Plant”) for transport
to BUYER’s customers or other place designated by BUYER.  SUPPLIER
shall bear the risk of loss for the products prior to such time (fob SUPPLIER’s
Plant).

     

    ARTICLE
7.                        Inspection of the
products.  BUYER and its representatives may, upon reasonable
notice and during regular business hours, inspect the manufacture of products
and conduct related quality control; provided, that such right of inspection
shall  be limited to one inspection per quarter of each
year.  In connection therewith, SUPPLIER shall provide reasonable
assistance and access to SUPPLIER’s facilities, personnel and
materials.  SUPPLIER shall comply with BUYER’s reasonable quality and
inspection procedures.

     

    ARTICLE
8.                        
MUTUAL REPRESENTATIONS AND WARRANTIES.

     

    8.1                 Each
party represents and warrants to the other that it has the right and authority
to enter into this Agreement and to perform all of its respective obligations
and undertakings herein.  Each party further represents and warrants
to the other that (i) the rights and privileges granted or to be granted
hereunder are and will at all times be free and clear of any liens, claims,
charges or encumbrances; and (ii) neither party has done or omitted to do, nor
will do or omit to do, any act or thing that would or might impair, encumber, or
diminish the other party’s full enjoyment of the rights and privileges granted
and to be granted under this Agreement.

     

    8.2                 Each
party represents and warrants that it is duly organized and existing in good
standing under the laws of the jurisdiction in which it is organized, is duly
qualified and in good standing as a foreign corporation in every state in which
the character of its business requires such qualifications, and has the power to
own its property and to carry on its business as now being
conducted.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    ARTICLE
9.                        COVENANTS.

     

    9.1                 BUYER
recognizes that SUPPLIER is currently manufacturing and/or supplying and may
manufacture and/or supply the AzSure formulation (without marking the product or
literature as “AzSure”) to Villiger in Switzerland.  SUPPLIER will not
sell to Villiger the “AzSure” formulation in the azure
color.  SUPPLIER agrees that it will not enter into any agreement for
the manufacture of Products that would impair its ability to perform its
obligations hereunder on a timely basis.

     

    9.2                 BUYER
agrees to source AzSure or similar formulations only from SUPPLIER during the
term of this Agreement.

     

    9.3                 The
Parties agree that BUYER owns the rights to the pending trademark for “AzSure”
and its associated art except for the chemical composition of the ink, which is
SUPPLIER’s intellectual property.

     

    9.4                 BUYER
agrees to make commercially reasonable efforts to sell AzSure to the cash in
transit (CViT) industry globally.  After an initial business
development phase of no more than 12 months, BUYER will make commercially
reasonable efforts to target an annual sales volume of approximately 10 tons of
the Product.  BUYER will develop marketing collaterals at its own
expense.  SUPPLIER will be mentioned as the “development partner” for
AzSure in BUYER’s sales and marketing literature.

     

    9.5                 BUYER
reserves the right to appoint sales agents and to offer exclusive supply within
specific markets.

     

    9.6                 SUPPLIER
agrees to supply BUYER with the methods of quality assurance required for
testing each batch of the Product.  SUPPLIER agrees to provide BUYER with a
quality control report for each batch of the Product.  SUPPLIER will
not alter the yet to be agreed upon formulation for the Product without the
approval of BUYER.

     

    ARTICLE
10.                      CONFIDENTIAL
INFORMATION.

     

    10.1               Each
party acknowledges and agrees that it may have access to information, including,
but not limited to, intellectual property, trade secrets, business information,
ideas and expressions, which are proprietary to and/or embody the substantial
creative efforts of the other party (“Confidential
Information”).  The Parties agree that Confidential Information
will remain the sole and exclusive property of the disclosing party (“Disclosing Party”),
and the receiving party (“Receiving Party”)
agrees to maintain and preserve the confidentiality of such information,
including, but without limitation, taking such steps to protect and preserve the
confidentiality of the Confidential Information as it takes to preserve and
protect the confidentiality of its own confidential information.  All
materials and information disclosed by either party to the other will be
presumed to be Confidential Information and will be so regarded by the Receiving
Party unless, the Receiving Party can prove that the materials or information
are not Confidential Information.  For the purposes of this
Section:

     

    10.2               The
Parties agree that the Confidential Information will be disclosed for use by the
Receiving Party only for the limited and sole purpose of carrying out the terms
of this Agreement.

     

    10.3               The
Receiving Party agrees not to disclose or permit any other person or entity
access to the Confidential Information, except that such disclosure will be
permitted to an employee, agent, representative or independent contractor of the
Receiving Party requiring access to the same.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    10.4               The
Receiving Party agrees: (i) not to alter or remove any identification of any
copyright, trademark or other proprietary rights notice which indicates the
ownership of any part of the Confidential Information, and (ii) to notify the
Disclosing Party of the circumstances surrounding any possession, use or
knowledge of the Confidential Information by any person or entity other than
those authorized by this Agreement.

     

    10.5               Confidential
Information will exclude any information that (i) has been or is obtained by the
Receiving Party from a source independent of the Disclosing Party and not
receiving such information from the Disclosing Party, (ii) is or becomes
generally available to the public other than as a result of an unauthorized
disclosure by the Disclosing Party or its personnel, or (iii) is independently
developed by the Receiving Party without reliance in any way on the Confidential
Information provided by the Disclosing Party; or (iv) the Receiving Party is
required to disclose under judicial order, regulatory requirement, or statutory
requirement, provided that the Receiving Party provides written notice and an
opportunity for the Disclosing Party to take any available protective action
prior to such disclosure.

     

    ARTICLE
11.                       INDEMNIFICATION;
LIMITATION ON DAMAGES.

     

    11.1               SUPPLIER’s
Indemnification.  SUPPLIER hereby agrees to indemnify, defend,
and hold BUYER harmless from any and all third party claims, losses,
liabilities, causes of action and costs (including reasonable attorneys’ fees)
arising from, or on account of, or related to any breach by SUPPLIER of its
obligations, representations and warranties hereunder.

     

    11.2               BUYER’s
Indemnification.  BUYER hereby agrees to indemnify, defend, and
hold SUPPLIER harmless from any and all third party claims, losses, liabilities,
causes of action and costs (including reasonable attorneys’ fees) arising from,
or on account of, or related to any breach by BUYER of its obligations,
representations and warranties hereunder.

     

    11.3               Limitation on
Damages.  NEITHER PARTY NOR ANY OF ITS RESPECTIVE AFFILIATES,
SHALL BE LIABLE TO THE OTHER PARTY OR TO ANY OTHER INDIVIDUAL OR ENTITY FOR ANY
INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, CONSEQUENTIAL, OR INCIDENTAL LOSS OR
DAMAGE OF ANY KIND OR NATURE, RELATING TO OR ARISING OUT OF THIS AGREEMENT
INCLUDING BUT NOT LIMITED TO ANY LOSS OF REVENUES, ANTICIPATED PROFITS OR
SAVINGS, OR LOSS BY REASON OF SHUTDOWN IN OPERATION OR FOR INCREASED EXPENSES OF
OPERATION.

     

    ARTICLE
12.                       GENERAL.

     

    12.1               Governing
Law.  This Agreement shall be interpreted in accordance with
the laws of the State of New York, without regard to the conflicts of laws
principles thereof.  The Parties agree that jurisdiction over and
venue in any legal proceeding arising out of or relating to this Agreement will
exclusively be in the state or federal courts located in New York County, New
York.

     

    12.2               Entire
Agreement.  This Agreement, including the Exhibit(s) attached
hereto, constitutes the entire agreement and understanding between the Parties
and integrates all prior discussions between them related to its subject
matter.  No modification of any of the terms of the agreement will be
valid unless in writing and signed by an authorized representative of each
party.

     

    12.3               Assignment.  This
Agreement may not be assigned by any party hereto to any other person, firm, or
entity without the express written approval of the other party hereto and any
attempt at assignment in violation of this Section will be null and void;
provided, that, notwithstanding the foregoing, BUYER may assign this Agreement,
and grant a security interest in this Agreement, to any senior lender to BUYER
without being required to obtain the consent of SUPPLIER, and SUPPLIER shall
have the right to assign this Agreement to an affiliate of SUPPLIER upon written
notice to BUYER, without being required to obtain the consent or approval of
BUYER.  Without limiting the foregoing, SUPPLIER shall not,
voluntarily or by operation of law (including, without limitation, by transfer
of the stock of SUPPLIER), assign or transfer, this Agreement or any interest
herein, or any right or obligation hereunder, without first obtaining the
written consent of BUYER, which consent shall not be unreasonably
withheld.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

     

    12.4               Notices.  All
legal notices required or permitted hereunder will be given in writing addressed
to the respective Parties as set forth below and will either be (i) personally
delivered, (ii) transmitted by postage prepaid certified mail, return receipt
requested, or (iii) transmitted by nationally recognized private express
courier, and will be deemed to have been given on the date of receipt if
delivered personally, or three (3) days after deposit in mail or express
courier.  Either party may change its address for purposes hereof by
written notice to the other in accordance with the provisions of this
Subsection.  The addresses for the Parties are as
follows:

     

    
      	
              SUPPLIER

            	
              BUYER

            
	 	 
	
              Printcolor
      Screen Ltd.

              Attn:                     

              Welschloh
      299

              CH-8965
      Bericon

              Switzerland

            	
              Applied
      DNA Sciences, Inc.

              Attn:
      Kurt Jensen

              25
      Health Sciences Dr., Suite 113

              Stony
      Brook, NY 11790

              USA

            

    

     

    12.5               Rights to Injunctive
Relief.  The Parties acknowledge that remedies at law may be
inadequate to provide full compensation in the event of a material breach
relating to either party’s obligations, representations, and warranties
hereunder, and the non-breaching party will therefore be entitled to seek
injunctive relief in the event of any such material breach.

     

    12.6               Force
Majeure.  No party will be liable for, or will be considered to
be in breach of or default under this Agreement on account of, any delay or
failure to perform as required by this Agreement as a result of any causes or
conditions that are beyond such party’s reasonable control (such as war, riot,
attack of terror, insurrection, rebellion, strike, lockout, unavoidable
casualty, or damage to personnel, material or equipment, fire, flood, storm,
earthquake, tornado, or any act of God) and that such party is unable to
overcome through the exercise of commercially reasonable
diligence.  If any force majeure event occurs, the affected party will
give prompt written notice to the other party and will use commercially
reasonable efforts to minimize the impact of the event.  However, if a
force majeure event prevents a party’s performance of a material covenant set
forth herein, the other party can immediately terminate this
Agreement.

     

    12.7               Waiver.  The
waiver, express or implied, by any party of any breach of or right
under  this Agreement by another party will not waive any subsequent
breach or right by such party of the same or a different kind.

     

    12.8               Headings.  The
headings to the Sections and Schedules of this Agreement are included merely for
convenience of reference and will not affect the meaning of the language
included therein.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    12.9               Independent
Contractors.  The Parties acknowledge and agree that they are
dealing with each other hereunder as independent contractors.  Nothing
contained in this Agreement will be interpreted as constituting either party the
joint venturer, employee or partner of the other party or as conferring upon
either party the power of authority to bind the other party in any transaction
with third parties.

     

    12.10             Severability.  In
the event any provision of this Agreement is held by a court or other tribunal
of competent jurisdiction to be unenforceable, such provision will be reformed
only to the extent necessary to make it enforceable, and the other provisions of
this Agreement will remain in full force and effect.

     

    12.11             Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be
deemed an original, but all of which together will constitute one and the same
instrument.  For purposes hereof, a facsimile copy of this Agreement,
including the signature pages hereto, will be deemed to be an
original.  Notwithstanding the foregoing, the Parties will deliver
original execution copies of this Agreement to one another as soon as
practicable following execution thereof.

     

    12.12             Cooperation in
Drafting.  The Parties have cooperated in the drafting and
preparation of this Agreement, and it will not be construed more favorably for
or against any party.

     

    12.13             Attorney’s
Fees.  Should any party hereto initiate a legal or
administrative action or arbitration proceeding (an “Action”) to enforce
any of the terms or conditions of this Agreement, the prevailing party (as
determined by the court, arbitrator or other fact-finder) will be entitled to
recover from the losing party all reasonable costs of the Action, including
without limitation, reasonable attorneys’ fees and costs.

     

    [Signature Page
Follows]

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    
      EXHIBIT 10.5

       

      Confidential Treatment

       

    

    IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

    

    
      	 
      	
              SUPPLIER

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              Printcolor
      Screen Ltd.

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Dieter
Hermann__________

            	 
      
	 
      	 
      	
              Name:

            	
              Dieter
      Hermann

            	 
      
	 
      	 
      	
              Title:

            	
              CEO

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              BUYER

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              APPLIED
      DNA SCIENCES, INC.

            	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ James A. Hayward_______

            	 
      
	 
      	 
      	
              Name:

            	
              James
      A. Hayward

            	 
      
	 
      	 
      	
              Title:

            	
              CEO

            	 
      

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      EXHIBIT
10.5

      

      Confidential
Treatment

    SCHEDULE
A

     

    
      
        
          	
                  
AzSure Pricing Scheme From
      PrintColor to APDN

                

        

         

        
          	 
      	
                  Ship
      in 200 liter Drums

                	
                  Ship
      in 20, 30 or 50 liter

                  Pourer
      Cans

                
	 	
                  60
      day

                  terms

                	
                  Prepay

                  (2)

                	
                  60
      day

                  terms
      (1)

                	
                  Prepay

                  (2)

                
	      
                  Total
      Volume Per

                	 	 
	
                  Order
      (liters)

                	
                  Price
      Per Liter

                	
                  Price
      Per Liter

                
	 
      	 
      	 
      	 
      	 
      
	
                  200

                	
                  €
      ***

                	 
      	
                  €
      ***

                	 
      
	 
      	 
      	 
      	 
      	 
      
	
                  1,000

                	
                  €
      ***

                	 
      	
                  €
      ***

                	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                  Blanket
      Orders (3)

                
	 
      	 
      	 
      	 
      	 
      
	
                  3,000

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                
	 
      	 
      	 
      	 
      	 
      
	
                  6,000

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                
	 
      	 
      	 
      	 
      	 
      
	
                  10,000

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                	
                  €
      ***

                
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      

        

      

       

      	
              (1)
      7% Increase in Price Per Liter

            
	 
      
	
              (2)
      5% Decrease if APDN Prepays Blanket Order

            
	 
      
	
              (3)
      Blanket orders: minimum 3,000 liters or above per
  orderWarrant Agreement

 Exhibit 4.1 
 WARRANT AGREEMENT 
 THIS WARRANT AGREEMENT (this
“Agreement”) made as of December 22, 2009 (the “Effective Date”) by and between Far East Energy Corporation, a Nevada corporation, with offices at 363 North Sam Houston Parkway East, Suite 380, Houston, Texas
77060 (“Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, NY 10004 (“Warrant Agent”). 
 WHEREAS, the Company has engaged in a public offering of shares of common stock, par value $0.001 per share, of the Company (“Common
Stock”) and warrants (“Warrants”) to certain investors, each such Warrant evidencing the right of the holder thereof to purchase two shares of Common Stock for $1.25 per share of Common Stock, subject to adjustment as
described herein; and 
 WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement on
Form S-3, No. 333-162019 (“Registration Statement”), for the registration, under the Securities Act of 1933, as amended (“Securities Act”), of, among other securities, the Warrants and the Common Stock issuable
upon exercise of the Warrants (the “Warrant Stock”); and 
 WHEREAS, the Company desires the Warrant Agent to
act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants; and 
 WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and
exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and 
 WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as
provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement. 
 NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: 
 1. Definitions. For the purposes of this Agreement: 
 1.1
“Closing Price” shall mean, with respect to each share of Common Stock for any day, (a) the last reported sale price regular way or, in case no such sale takes place on such day, the average of the closing bid and asked prices
regular way, in either case as reported on the principal national securities exchange on which the Common Stock is listed or admitted for trading or (b) if the Common Stock is not listed or admitted for trading on any national securities
exchange, the last reported sale price or, in case no such sale takes place on such day, the average of the highest reported bid and the lowest reported asked quotation for the Common Stock, in either case as quoted on the NASDAQ Global Market or
the NASDAQ Capital Market or (c) if the Common Stock is not listed or admitted for trading on any national securities exchange or quoted on the NASDAQ Global Market or the NASDAQ Capital Market, the last reported sale price or, in case no such
sale takes place on such day, the average of the highest reported bid and the lowest reported asked quotation for the Common Stock, in either case as reported on NASDAQ or a similar service if NASDAQ is no longer reporting such information.

 1.2 “Convertible Securities” means stock or other
securities convertible into shares of Common Stock. 
 1.3 “Current Market Price Per Share”
means the average of the daily Closing Prices for the five (5) consecutive Trading Days preceding the date in question. 
 1.4 “Required Holders” means the holders of the Warrants representing at least a majority of shares of Common Stock underlying the Warrants then outstanding. 
 1.5 “Trading Day” means, with respect to any security, each Monday, Tuesday, Wednesday, Thursday and Friday,
other than any day on which the principal exchange or market in which such security is traded are required or authorized by law to be closed and, if no such exchange or market exists, any day on which banks in New York, New York are not required or
authorized by law to be closed. 
 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the
Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement. 
 3. Warrants. 
 3.1 Form of Warrant. The Warrants
shall (a) be issued in registered form only, (b) be in the form of Exhibit A hereto (the “Warrant Certificate”), the provisions of which are incorporated herein, (c) be signed by, or bear the facsimile
signature of, the Chairman of the Board or Chief Executive Officer and Chief Financial Officer, Treasurer, Secretary or Assistant Secretary of the Company and (d) shall bear a facsimile of the Company’s seal. In the event the person whose
facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at
the date of issuance. 
 3.2 Effect of Countersignature. Unless and until countersigned by the Warrant
Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof. 
 3.3 Registration. 
 (a) Warrant Register. The Warrant
Agent shall maintain books (“Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall countersign and register
the Warrants in the names of the holder or holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. 
 (b) Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the
Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (“registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby
(notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary. 
  

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 4. Terms and Exercise of Warrants. 
 4.1 Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof,
subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $1.25 per share, subject to the adjustments provided in Section 5 hereof and the
last sentence of this Section 4.1. The term “Warrant Price” as used in this Agreement refers to the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion
may lower the Warrant Price at any time prior to the Expiration Date (as defined in Section 4.2) for a period of not less than ten (10) days. 
 4.2 Duration of Warrants. The Warrants may be exercised only during the period (“Exercise Period”) commencing on the date of issuance, and terminating at 5:00 p.m., New York City
time on the earlier to occur of (a) December 22, 2014 or (b) the date fixed for redemption of the Warrant as provided in Section 7 of this Agreement (“Expiration Date”). Except with respect to the right to
receive the Redemption Price (as set forth in Section 7) in accordance with the terms of Section 7, each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof
under this Agreement shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide notice to
registered holder or holders of the Warrants of such extension of not less than 10 days. 
 4.3 Exercise of
Warrants. 
 (a) Payment. Subject to the provisions of the Warrant and this Agreement, each Warrant,
when countersigned by the Warrant Agent, may be exercised on any Trading Day during the Exercise Period by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or at the office of its successor as Warrant Agent, in
the Borough of Manhattan, City and State of New York by delivering the following: (i) the subscription form, as set forth in the Warrant, duly executed, and (ii) payment in full in lawful money of the United States, in cash, good certified
check or good bank draft payable to the order of the Company (or as otherwise agreed to by the Company), the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection
with the exercise of the Warrant, and (iii) the original Warrant Certificate; provided, however, that the Warrant shall not be exercisable and the Company shall not be obligated to issue Common Stock unless, at the time the holder seeks to
exercise the Warrant, a prospectus relating to the Warrant Stock is current and the Common Stock has been registered or qualified or deemed to be exempt under the securities laws of the United States and the state of residence of the holder of the
Warrant. 
 (b) Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the
clearance of the funds in payment of the Warrant Price and the delivery to the Warrant Agent of the original Warrant Certificate, the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which he is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such
Warrant shall not have been exercised. Subject to Section 8.3 and notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant and shall have no obligation to settle such
Warrant exercise unless a registration statement under the Securities Act with respect to the Common Stock is effective and such securities are qualified for sale or exempt from qualification under applicable securities laws of the state or other
jurisdiction in which the registered holder reside. In no event will the Company be required to net cash settle the warrant exercise. Warrants

  

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may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful. Except as otherwise provided in the Warrant, each certificate for
Warrant Stock initially issued upon the exercise of a Warrant pursuant to an exemption from qualification or registration under any applicable securities laws, and each certificate for Warrant Stock issued to any subsequent transferee of any such
certificate, shall (if required by law or issued pursuant to any exemption from registration) be stamped or otherwise imprinted with a legend in form and substance satisfactory to the Company. 
 (c) Valid Issuance. All Warrant Stock issued upon the proper exercise of the Warrant in conformity with this Agreement
shall be validly issued, fully paid and non-assessable. 
 (d) Date of Issuance. Each person in whose name
any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of
the date of delivery of such certificate, except that, if the date of such surrender and payment is not a Trading Day, such person shall be deemed to have become a holder of such shares at the close of business on the next succeeding Trading Day.

 5. Adjustments and Anti-Dilution Provisions. 
 5.1 Common Stock Distributions, etc. In case the Company shall (a) pay a dividend or make a distribution on its
Common Stock in shares of Common Stock, (b) split or otherwise subdivide its outstanding Common Stock into a greater number of shares or (c) combine its outstanding Common Stock into a smaller number of shares, the Warrant Price in effect
immediately prior thereto shall be adjusted so that the price shall equal the price determined by multiplying the Warrant Price in effect immediately prior to such event by a fraction, of which (i) the numerator shall be the number of shares of
Common Stock outstanding immediately prior to such event and (ii) the denominator shall be the number of shares of Common Stock outstanding immediately after such event. An adjustment made pursuant to this Section 5.1 shall become
effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of subdivision or combination. 
 5.2 Rights, Options or Warrants Issuances. In case the Company shall issue rights, options or warrants to all or
substantially all holders of its Common Stock entitling them (for a period commencing no earlier than the record date described below and expiring not more than 60 days after such record date) to subscribe for or purchase shares of Common Stock
(or Convertible Securities) at a price per share (or having an initial conversion price per share) less than the Current Market Price Per Share on the record date for the determination of stockholders entitled to receive such rights or warrants, the
Warrant Price in effect immediately prior thereto shall be adjusted so that the same shall equal the price determined by multiplying the Warrant Price in effect immediately prior to such record date by a fraction, of which (a) the numerator
shall be the number of shares of Common Stock outstanding on such record date plus the number of shares of Common Stock that the aggregate offering price of the total number of shares of Common Stock so offered (or the aggregate initial conversion
price of the Convertible Securities so offered, which shall be determined by multiplying the number of shares of Common Stock issuable upon exercise of such Convertible Securities by the initial conversion price per share of Common Stock pursuant to
the terms of such Convertible Securities) would purchase at the Current Market Price Per Share on such record date, and (b) the denominator shall be the number of shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered (or into which the Convertible Securities so offered are convertible); provided, however, that no adjustment shall be made if the Company issues or distributes to the holder the rights, options or warrants
which the holder would have been entitled

  

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to receive had this Warrant been exercised prior to the record date. Any such adjustment shall be made successively whenever any such rights, options or warrants are issued, and shall become
effective immediately after the applicable record date therefor unless such rights, options or warrants are not immediately exercisable, in which case, any such adjustments shall be made at the time such rights, options or warrants become
exercisable. 
 5.3 Distributions Other Than Common Stock. If the Company after the date hereof shall
distribute to all or substantially all holders of any class of Common Stock evidences of its indebtedness, cash or other assets, shares of capital stock of any class or any other securities or rights, options or warrants to subscribe therefor
(excluding (a) shares of Common Stock, rights, options or warrants referred to in Section 5.1 and (b) the distribution of rights to all holders of Common Stock pursuant to the adoption of a stockholders’ rights plan or the
detachment of such rights under the terms of such stockholders’ rights plan), then in each such case the Warrant Price shall be determined by multiplying the Warrant Price in effect immediately before the record date of such distribution by a
fraction (i) the numerator of which shall be such closing bid price per share of Common Stock on the last Trading Day of the Common Stock immediately prior to such record date, less the then fair market value (as determined in good faith by the
Board of Directors) of the portion of the assets or evidences of indebtedness so distributed or of such shares of capital stock, subscription rights or warrants applicable to one share of the Common Stock and (ii) the denominator of which shall
be the closing bid price per share of Common Stock per share of the Common Stock on the last Trading Day of the Common Stock immediately prior to such record date; provided, however, that no adjustment need be made for any transaction referred to in
this Section 5.3 if the registered holders of the Warrants are entitled to participate in the transaction on the same basis as holders of Common Stock participate in the transaction. 
 5.4 Effect of Reclassification, Consolidation, Merger or Sale on Exercise Privilege. If any of the following shall
occur, namely: (a) any reclassification or change of shares of Common Stock issuable upon exercise of the Warrants (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a
subdivision or combination, or any other change for which an adjustment is provided in this Section 5); (b) any consolidation or merger or combination to which the Company is a party other than a merger or consolidation in which the
Company is the continuing corporation and which does not result in any reclassification of, or change (other than in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination) in,
outstanding shares of Common Stock; or (c) any sale, conveyance, transfer or lease of all or substantially all of the property or assets of the Company, directly or indirectly, to any person (any such event being called a “Capital
Reorganization”), upon the effective date of such Capital Reorganization, the holder shall have the right to receive, upon exercise of the Warrant, the kind and amount of shares of stock and/or other securities and/or property (including
cash) which the holder would have owned or have been entitled to receive in connection with such Capital Reorganization if the Warrant had been exercised immediately prior to such Capital Reorganization, assuming the holder (i) is not a person
with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or conveyance was made, as the case may be (“Constituent Person”), or an affiliate of a Constituent Person
and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash or other property receivable upon such Capital Reorganization. The provisions of this Section 5.4 shall similarly apply to successive
Capital Reorganizations. The Company shall not consummate any transaction that effects or permits any such event or occurrence unless each person whose shares of stock, securities or assets will be issued, delivered or paid to the stockholders,
prior to or simultaneously with the consummation of the transaction, expressly assumes, or in the case of the Company, acknowledges, by a subsequent Warrant or other document in a form substantially similar hereto, executed and

  

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delivered to the holder hereof, the obligation to deliver to such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions of this Section 5.4, such
holder is entitled to purchase, and all other obligations and liabilities under the Warrant, including obligations and liabilities in respect of subsequent adjustments that are required under the Warrant. 
 5.5 Notice of Adjustment. Whenever the Warrant Price, exercise privilege or number of Warrant Stock shall be adjusted
pursuant to the terms of any of Section 5.1 through 5.4 hereof, the Company shall promptly mail to the holder a notice of the adjustment and an officer’s certificate briefly stating the facts requiring the adjustment and the manner of
computing it. Unless and until the holder shall receive an officer’s certificate setting forth an adjustment of the Warrant Price or the number of Warrant Stock, the holder may assume without inquiry that the Warrant Price and the number of
Warrant Stock have not been adjusted and that the last Warrant Price and number of Warrant Stock of which it has knowledge remain in effect. 
 5.6 Notice of Certain Transactions. In the event that: (a) the Company consolidates or merges with or into, or transfers substantially all of its assets to, another corporation or another
corporation merges into the Company and, in each case, stockholders of the Company must approve the transaction, or (b) there is a dissolution or liquidation of the Company, then the Company shall mail to the holder a notice in accordance with
Section 10.2 stating the proposed record or effective date. Failure to mail such notice or any defect therein shall not affect the validity of any transaction referred to in this Section 5.6. 
 5.7 Deferral of Issuance. In any case in which this Section 5 shall require that an adjustment be made following
a record date established for purposes of this Section 5, the Company may elect to defer (but only until five (5) Trading Days following the filing by the Company with the holder of the certificate described in Section 5.4) issuing to
the holder of any Warrant exercised after such record date the shares of Common Stock and other capital stock of the Company issuable upon such exercise over and above the shares of Common Stock and other capital stock of the Company issuable upon
such exercise only on the basis of the Warrant Price prior to adjustment; and, in lieu of the shares the issuance of which is so deferred, the Company shall issue or cause its transfer agent to issue due bills or other appropriate evidence prepared
by the Company of the right to receive such shares. If any distribution in respect of which an adjustment to the Warrant Price is required to be made as of the record date therefor is not thereafter made or paid by the Company for any reason, the
Warrant Price shall be readjusted to the Warrant Price which would then be in effect if such record date had not been fixed or such effective date had not occurred. 
 5.8 Company Determination Final. Any determination that the Company or the Board of Directors must make pursuant to
this Agreement is conclusive absent manifest error. 
 5.9 No Adjustment. No adjustment in the Warrant
Price shall be required under Sections 5.1 through 5.4 until the adjustment would require an increase or decrease of at least one percent (1%) in the Warrant Price as last adjusted. Any adjustments which by reason of this Section 5.10 are
not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 5.9 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.

 5.10 Adjustment for Tax Purposes. The Company shall be entitled to make such reductions in the Warrant
Price, in addition to those required by this Section 5, as it in its discretion shall determine to be advisable in order that any stock dividends, subdivisions of shares, distributions of rights to purchase stock or securities or distributions
of securities convertible into or exchangeable for stock hereafter made by the Company to its stockholders shall not be taxable. 
  

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 5.11 Adjustment of Number of Shares Purchasable. Upon any adjustment
of the Warrant Price as provided in Section 5, the number of shares subject to the Warrant shall be adjusted so that the holder shall thereafter be entitled to purchase, at the Warrant Price resulting from such adjustment, the number of shares
of Common Stock (calculated to the nearest 1/100th of a share) obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of Warrant Stock purchasable hereunder (whether or not the Exercise Period has
commenced) immediately prior to such adjustment and dividing the product thereof by the Warrant Price resulting from such adjustment 
 5.12 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants. If, by reason of any
adjustment made pursuant to this Section 5, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round up or down to the nearest
whole number the number of the shares of Common Stock to be issued to the Warrant holder. 
 5.13 Form of
Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 5, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant
thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed 
 5.14 No Dilution or Impairment. The Company will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of the Warrant. Without limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of
stock receivable on the exercise of the Warrant above the amount payable therefor on such exercise, (b) will at all times reserve and keep available the maximum number of its authorized shares of Common stock, free from all preemptive rights
therein, which will be sufficient to permit the full exercise of the Warrant, and (c) will take all such action as may be reasonably necessary or appropriate in order that all Common Stock issued upon exercise of a Warrant will be duly and
validly issued, fully paid and non-assessable, and free from all taxes, liens, and charges. 
 6. Transfer and Exchange of Warrants. 

 6.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any
outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

 6.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together
with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number
of Warrants. 
  

 7 

 6.3 Fractional Warrants. The Warrant Agent shall not be required to
effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant. 
 6.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants. 
 6.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in
accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 6, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose. 
 7. Redemption. 
 7.1 Redemption. The Company shall have the right, at any time after the one year anniversary of the Effective Date, to
require the holder to either (a) exercise all or any portion of the Warrant outstanding and unexercised or (b) relinquish all or any portion of the Warrant outstanding and unexercised upon forty-five (45) days’ written notice in
the event that the Trading Price of the Company’s Common Stock has equaled or exceeded $1.875 per share (the “Trigger Price”) for fifteen (15) or more consecutive Trading Days. On each occasion that the Company elects to
exercise its rights of redemption under this Section 7.1, the Company must mail such written notice within ten (10) days following the satisfaction of all of the foregoing conditions. If the Warrant or any portion thereof is redeemed in
accordance with this Section 7.1, the Holder shall have the right to exercise the Warrant in respect of the shares of Warrant Stock subject to redemption until the close of business on the date next preceding the date fixed for redemption. On
or after the date fixed for redemption, the Holder shall have no rights with respect to the Warrant to the extent redeemed, except the right to receive $0.01 per share (the “Redemption Price”) of outstanding and unexercised and
issuable upon exercise of the Warrant upon surrender of the Warrant. The Trigger Price shall be subject to adjustment, as the Board of Directors determines to be fair and appropriate, for any combination, subdivision, split, reclassification, stock
dividend, or any similar change affecting the Common Stock. “Trading Price” means (a) if the Common Stock is actively traded on any national securities exchange or any NASDAQ quotation or market system, then the highest price
at which sales of a share of Common Stock shall have been sold during such Trading Day and (b) if the shares of Common Stock are not actively traded on any such exchange or system, then the highest sale price of a share of Common Stock during
such Trading Day. 
 7.2 Exercise After Notice of Redemption. The Warrants may be exercised for cash at
any time after notice of redemption shall have been given by the Company pursuant to Section 7.1 hereof and prior to the time and date fixed for redemption. On and after the redemption date, the record holder of the Warrants shall have no
further rights except to receive, upon surrender of the Warrants, the Redemption Price. 
 8. Other Provisions Relating to Rights of Holders
of Warrants. 
 8.1 No Rights as Stockholder. A Warrant does not entitle the registered holder thereof
to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the
meetings of stockholders or the election of directors of the Company or any other matter. 
  

 8 

 8.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is
lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may upon receipt from the holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of the Warrant and an indemnity
reasonably satisfactory to it and, in case of mutilation, upon surrender and cancellation hereof, the Company will execute and deliver in lieu hereof a new Warrant of like tenor to the Holder; provided, however, in the case of mutilation, no
indemnity shall be required if the Warrant in identifiable form is surrendered to the Company for cancellation. 
 8.3 Registration of Common Stock. Until the expiration of the Warrants in accordance with the provisions of this Agreement, the Company agrees to use its reasonable best efforts to maintain the effectiveness of the Registration
Statement or file with the Securities and Exchange Commission a new registration statement, for the registration, under the Securities Act, of, and it shall use its best efforts to take such action as is necessary to qualify for sale, in those
states in which the Warrants were initially offered by the Company, the Warrant Stock. The Warrants shall not be exercisable and the Company shall not be obligated to issue Common Stock unless, at the time a holder seeks to exercise the Warrants, a
prospectus relating to Warrant Stock is current and the Common Stock has been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Warrants. 
 9. Concerning the Warrant Agent and Other Matters. 
 9.1 Payment of Taxes. The issuance of a certificate or certificates for shares of Common Stock upon exercise of the Warrant shall be made without charge for any stamp or other similar tax in
respect of such issuance. However, if any such certificate is to be issued in a name other than that of the Warrant holder, the person or persons requesting the issuance thereof shall pay to the Company the amount of any tax which may be payable in
respect of any transfer involved in such issuance or shall establish to the satisfaction of the Company that such tax has been paid. 
 9.2 Resignation, Consolidation, or Merger of Warrant Agent. 
 (a) Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving sixty
(60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent.
If the Company shall fail to make such appointment within a period of thirty (30) days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation authorized to exercise banking or corporate trust powers and shall be subject to supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; provided that, if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the
authority, powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations. 
  

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 (b) Notice of Successor Warrant Agent. In the event a successor
Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent, the transfer agent for the Common Stock and International Finance Corporation not later than the effective date of any such appointment.

 (c) Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be
merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act. 
 9.3 Fees and Expenses of Warrant Agent. 
 (a) Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant
Agent hereunder and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. 
 (b) Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed,
executed, acknowledged, and delivered all such further and other acts, instruments, and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement. 
 9.4 Liability of Warrant Agent. 
 (a) Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent
shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a statement signed by the Chairman of the Board, the Chief Executive Officer or the Chief Financial Officer of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon
such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement. 
 (b) Indemnity. The Warrant Agent shall be liable hereunder only for its own gross negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities,
including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s, the Warrant Agent’s representative’s,
employees’ or agent’s gross negligence, willful misconduct, or bad faith. 
 (c) Exclusions. The
Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of
any covenant or condition contained in this Agreement or in the Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 5 hereof or responsible for the manner, method, or amount of any such
adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable. 
  

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 9.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency
established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the
Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants. 
 10.
Miscellaneous Provisions. 
 10.1 Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns. 
 10.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given
when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the
Warrant Agent), as follows 
 Far East Energy Corporation. 
 363 N. Sam Houston Parkway East, Suite 380 
 Houston, Texas 77060 
 Attn: Chief Executive Officer 
 with a copy in each case to: 
 Baker & McKenzie LLP 
 2300 Trammell Crow Center 
 2001 Ross Avenue 
 Dallas, TX 75201 
 Facsimile: 214-978-3099 
 Attn: Amar Budarapu 
 Any notice,
statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified
mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows: 
 Continental Stock Transfer & Trust Company 
 17 Battery Place 
 New York, NY 10004 
 Facsimile: (212) 616-7616 
 Attn: Michael Mullings 
 with a copy in each case to the holder or holders at the
address or addresses as set forth in the records of the Company. 
  

 11 

 10.3 Applicable Law. This Agreement, and the provisions, rights,
obligations, and conditions set forth herein, and the legal relations between the parties hereto, including all disputes and claims, whether arising in contract, tort, or under statute, shall be governed by and construed in accordance with the laws
of the State of New York without giving effect to its conflict of law provisions that would cause the application of any other law (other than Section 5-1401 of the New York General Obligations Law). 
 10.4 Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied
from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of
this Agreement or of any covenant, condition, stipulation, promise, or agreement hereof. All covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto
and their successors and assigns and of the registered holders of the Warrants. 
 10.5 Examination of the
Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant. The
Warrant Agent may require any such holder to submit his Warrant for inspection by it. 
 10.6
Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and
the same instrument. 
 10.7 Effect of Headings. The Section headings herein are for convenience only and
are not part of this Agreement and shall not affect the interpretation thereof. 
 10.8 Amendments. This
Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other
provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. In furtherance of the foregoing,
the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 4.1 and 4.2, respectively, without the consent of the registered holders. 
 10.9 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be
added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible and be valid and enforceable. 
 [Signature page follows] 
  

 12 

 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first
above written. 
  

					
	FAR EAST ENERGY CORPORATION
		
	By:	 	 /s/ Andrew Lai

		 	Name:	 	Andrew Lai
		 	Title:	 	Chief Financial Officer
	
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent
		
	By:	 	 /s/ Michael G. Mullings

		 	Name:	 	Michael G. Mullings
		 	Title:	 	Vice President, Compliance

 [Signature Page to Warrant Agreement] 
  

 13 

 Exhibit A 
  

					
	NUMBER     	 	 THIS WARRANT WILL BE
 VOID IF NOT EXERCISED
 PRIOR TO
 5:00 P.M. NEW YORK CITY
 TIME, DECEMBER 22, 2014
	 	[            ] WARRANTS

 FAR EAST ENERGY CORPORATION 
 FORM OF WARRANT 
 THIS
CERTIFIES THAT, for value received, [                            ] is the registered holder of a Warrant or
Warrants (the “Warrant”) to purchase two fully paid and non-assessable shares of common stock (the “Common Stock”), par value $0.001 per share (the “Shares”), of Far East Energy Corporation, a
Nevada corporation (the “Company”), for each Warrant evidenced by this Warrant Certificate. The Warrant entitles the holder thereof to purchase from the Company, commencing on the date of issuance and terminating at 5:00 p.m., New
York City time on the earlier to occur of (a) December 22, 2014 or (b) the date fixed for redemption of this Warrant pursuant to Section 7 of the Agreement (as defined below) (the “Exercise Period”),
[                    ] Shares of the Company Common Stock at the price of $1.25 per share (the “Warrant Stock”), upon surrender of
this Warrant Certificate and payment of the Warrant Price at the office or agency of Continental Stock Transfer & Trust Company, a New York corporation (the “Warrant Agent”), but only subject to the conditions set forth
herein and in the Warrant Agreement dated December 22, 2009 (the “Effective Date”) between the Company and the Warrant Agent (the “Agreement”). Capitalized terms used herein but not defined shall have the
meaning ascribed to them in the Agreement. 
 The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration
Date for a period of not less than ten (10) days. The Company in its sole discretion may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company will provide notice to registered holder or
holders of the Warrants of such extension of not less than ten (10) days. 
 Subject to the Agreement, the Company shall not be obligated
to deliver any securities pursuant to the exercise of a Warrant and shall have no obligation to settle such Warrant exercise unless a registration statement under the Securities Act with respect to the Common Stock is effective and such securities
are qualified for sale or exempt from qualification under applicable securities laws of the state or other jurisdiction in which the registered holder resides. In no event will the Company be required to net cash settle the warrant exercise. The
Agreement provides that upon the occurrence of certain events the Warrant Price and the Warrant Stock purchasable hereunder, set forth on the face hereof, may, subject to certain conditions, be adjusted. No fraction of a Share will be issued upon
any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise of a Warrant, the Company shall, upon such exercise, round up or down to the nearest whole number the number of Shares to be
issued to such holder. 
  

 14 

 Upon any exercise of the Warrant for less than the total number of Shares provided for herein, there shall
be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised. 
 Warrant Certificates, when surrendered at the office of the Warrant Agent by the registered holder hereof in person or by attorney duly authorized in writing, may be exchanged in the manner and subject to
the limitations provided in the Agreement, but without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants. 
 Upon due presentment for registration of transfer of the Warrant Certificate at the office of the Warrant Agent, a new Warrant Certificate or Warrant
Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, subject to the limitations provided in the Agreement, without charge except for any
applicable tax or other governmental charge. 
 The Company and the Warrant Agent may deem and treat the registered holder as the absolute owner
of this Warrant Certificate (notwithstanding any notation of ownership or other writing hereon made by anyone), for the purpose of any exercise hereof, of any distribution to the registered holder, and for all other purposes, and neither the Company
nor the Warrant Agent shall be affected by any notice to the contrary. 
 This Warrant does not entitle the registered holder to any of the
rights of a stockholder of the Company. 
 The Company shall have the right, at any time after the one year anniversary of the Effective Date,
to require the holder to either (a) exercise all or any portion of this Warrant outstanding and unexercised or (b) relinquish all or any portion of this Warrant outstanding and unexercised upon forty-five (45) days’ written
notice in the event that the Trading Price of the Company’s Common Stock has equaled or exceeded the Trigger Price for fifteen (15) or more consecutive Trading Days. On each occasion that the Company elects to exercise this right of
redemption, the Company must mail such written notice within ten (10) days following the satisfaction of all of the foregoing conditions. If this Warrant or any portion thereof is redeemed in accordance with the Agreement, the holder shall have
the right to exercise this Warrant in respect of the Warrant Stock subject to redemption until the close of business on the date next preceding the date fixed for redemption. On or after the date fixed for redemption, the holder shall have no rights
with respect to this Warrant to the extent redeemed, except the right to receive $0.01 per share outstanding and unexercised that is issuable upon exercise of this Warrant, upon surrender of this Warrant. The Trigger Price shall be subject to
adjustment, as the Board of Directors determines to be fair and appropriate, for any combination, subdivision, split, reclassification, stock dividend, or any similar change affecting the Common Stock. 
 This Warrant is subject to the terms and conditions of the Agreement. To the extent the provisions of this Warrant conflict with the terms and
conditions of the Agreement, the terms and conditions of the Agreement shall control. 
 The validity, interpretation, and performance of this
Agreement and of the Warrants shall be governed in all respects by the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.

  

 15 

 IN WITNESS WHEREOF, this Warrant has been duly executed by the Chairman of the Board or Chief Executive
Officer and Chief Financial Officer, Treasurer, Secretary or Assistant Secretary of the Company as of the day and year first above written. 
  

									
	FAR EAST ENERGY CORPORATION	  		 		 	
					
	By:	  	  
	  		 	By:	 	  

		  	Michael R. McElwrath	  		 		 	Andrew Lai
		  	Chief Executive Officer	  		 		 	Chief Financial Officer
				
	Countersigned:	  		 		 	
				
	CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent	  		 		 	
					
	By:	  	  
	  		 		 	
		  	Authorized Signature	  		 		 	

  

 16 

 SUBSCRIPTION FORM 
 To Be Executed by the Registered Holder in Order to Exercise Warrants 
 The
undersigned registered holder irrevocably elects to exercise                      Warrants represented by this Warrant Certificate, and to
purchase the shares of Common Stock issuable upon the exercise of such Warrants, and requests that certificates for such shares shall be issued in the name of 
  

					
		 	  
	 	
	(PLEASE TYPE OR PRINT NAME AND ADDRESS)

  

					
		 	  
	 	
	(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  

					
	and be delivered to	 	  
	 	
	(PLEASE PRINT OR TYPE NAME AND ADDRESS)

 and, if such number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate,
that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the registered holder at the address stated below: 
  

							
	Dated:	 	  
	 		 	  

		 		 		 	(SIGNATURE)
		 		 		 	  

		 		 		 	  

		 		 		 	(ADDRESS)
		 		 		 	  

		 		 		 	(TAX IDENTIFICATION NUMBER)

  

 17 

 ASSIGNMENT 
 To Be Executed by the Registered Holder in Order to Assign Warrants 
 For
Value Received,                      hereby sell, assign, and transfer unto 
  

					
		 	  
	 	
	(PLEASE TYPE OR PRINT NAME AND ADDRESS)

  

					
		 	  
	 	
	(SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)

  

					
	and be delivered to	 	  
	 	
	(PLEASE PRINT OR TYPE NAME AND ADDRESS)

                     of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitute and appoint
                         Attorney to transfer this Warrant Certificate on the books of the Company, with full power of
substitution in the premises. 
  

							
	Dated:	 	  
	 		  	  

		 		 		  	(SIGNATURE)

 THE SIGNATURE TO THE ASSIGNMENT OF THE SUBSCRIPTION FORM MUST CORRESPOND TO THE NAME WRITTEN UPON THE
FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER. THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15).

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