FORM
OF WARRANT
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR
THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
(I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL,
IN A
GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, SUBJECT TO COMPLIANCE WITH APPLICABLE SECURITIES
LAWS, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY
TRANSFEREE OF THIS WARRANT SHOULD CAREFULLY REVIEW THE TERMS OF THIS WARRANT,
INCLUDING SECTION 6(d) HEREOF.
COMANCHE
CLEAN ENERGY CORPORATION
WARRANT
TO
PURCHASEORDINARY
SHARES
Warrant
No.: ____________
Number
of
Ordinary Shares, par value $.001 per Share
Date
of
Issuance: ____ ____, 2007 ("Issuance
Date")
Comanche
Clean Energy Corporation, a Cayman Islands corporation (the "Company"),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, [BUYER], the registered holder
hereof or its permitted assigns (the "Holder"),
is
entitled, subject to the terms set forth below, to purchase from the Company,
at
the Exercise Price (as defined below) then in effect, upon surrender of this
Warrant to Purchase Ordinary Shares (including any Warrants to Purchase Ordinary
Shares issued in exchange, transfer or replacement hereof, the "Warrant"),
at
any time or times on or after the Issuance Date, but not after 11:59 P.M.,
New
York time, on the Expiration Date (as defined below) fully paid nonassessable
Ordinary Shares (as defined below) (the
"Warrant
Shares").
Except as otherwise defined herein, capitalized terms in this Warrant shall
have
the meanings set forth in Section 15. This Warrant is one of the Warrants to
purchase Ordinary Shares (the "Shares
Warrants")
issued
pursuant to that certain Securities Purchase Agreement (Shares and Warrants),
dated as of March 30, 2007 (the "Subscription
Date"),
by
and among the Company and the buyers (the "Buyers")
referred to therein (the "Securities
Purchase Agreement (Shares and Warrants)").
1. EXERCISE
OF WARRANT.
(a)
Mechanics
of Exercise.
Subject
to the terms and conditions hereof (including, without limitation, the
limitations set forth in Section 1(f)), this Warrant may be exercised by the
Holder on any day on or after the Issuance Date, in whole or in part, by
(i) delivery of a written notice, in the form attached hereto as
Exhibit
A
(the
"Exercise
Notice"),
of
the Holder's election to exercise this Warrant and (ii) (A) payment to the
Company of an amount equal to the applicable Exercise Price multiplied by the
number of Warrant Shares as to which this Warrant is being exercised (the
"Aggregate
Exercise Price")
in
cash or by wire transfer of immediately available funds or (B) by notifying
the
Company that this Warrant is being exercised pursuant to a Cashless Exercise
(as
defined in Section 1(d)). The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Execution and
delivery of the Exercise Notice with respect to less than all of the Warrant
Shares shall have the same effect as cancellation of the original Warrant and
issuance of a new Warrant evidencing the right to purchase the remaining number
of Warrant Shares. On or before the first Business Day following the date on
which the Company has received each of the Exercise Notice and the Aggregate
Exercise Price (or notice of a Cashless Exercise) (the "Exercise
Delivery Documents"),
the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company's transfer
agent (the "Transfer
Agent").
On or
before the third Business Day following the date on which the Company has
received all of the Exercise Delivery Documents (the "Share
Delivery Date"),
the
Company shall (X) if legends are not required to be placed on certificates
for
Shares pursuant to the Securities Purchase Agreement (Shares and Warrants),
provided that the Transfer Agent is participating in The Depository Trust
Company ("DTC")
Fast
Automated Securities Transfer Program, and provided, further, that the Holder
is
eligible to receive shares through DTC, credit such aggregate number of Ordinary
Shares to which the Holder is entitled pursuant to such exercise to the Holder's
or its designee's balance account with DTC through its Deposit Withdrawal Agent
Commission System, or (Y) if the Transfer Agent is not participating in the
DTC
Fast Automated Securities Transfer Program or the Holder is not eligible to
receive shares through DTC, issue and dispatch by overnight courier to the
address as specified in the Exercise Notice, a certificate, registered in the
Company's share register in the name of the Holder or its designee, for the
number of Ordinary Shares to which the Holder is entitled pursuant to such
exercise. The Holder undertakes that whenever the Company credits securities
as
set forth in clause (X) of the preceding sentence, upon receipt of notice from
the Company that the applicable registration statement is not, or no longer
is,
effective in respect of the resale of such securities, the Holder will not
transfer such securities (other than (I) in connection with a transfer, wherein
the Holder provides the Company with an opinion of counsel, in a generally
acceptable form, to the effect that such transfer may be made without
registration under the applicable requirements of the 1933 Act, or (II) the
Holder provides the Company with reasonable assurances that the transfer may
be
effected pursuant to Rule 144 or Rule 144A) until the Company notifies the
Holder that the applicable registration statement becomes effective (again).
Upon delivery of the Exercise Delivery Documents or notification to the Company
of a Cashless Exercise referred to in Section 1(d), the Holder shall be deemed
for all corporate purposes to have become the holder of record of the Warrant
Shares in respect of which this Warrant has been exercised, irrespective of
the
date such Warrant Shares are credited to the Holder's DTC account or the date
of
delivery of the certificates evidencing such Warrant Shares, as the case may
be.
If this Warrant is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as practicable and
in
no event later than three (3) Business Days after any exercise (the
"Warrant
Delivery Date")
and at
its own expense, issue a new Warrant (in accordance with Section 6(d))
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares in respect of which this Warrant is exercised. No fractional
Ordinary Shares are to be issued upon the exercise of this Warrant, but rather
the number of Ordinary Shares to be issued shall be rounded up to the nearest
whole number. The Company shall pay any and all taxes, including without
limitation, all documentary stamp, transfer or similar taxes, or other
incidental expense that may be payable with respect to the issuance and delivery
of Warrant Shares upon exercise of this Warrant.
(b)
Exercise
Price.
For
purposes of this Warrant, "Exercise
Price"
means
$5.30 per Ordinary Share, as adjusted as provided herein.
(c)
Company's
Failure to Timely Deliver Securities.
If
within three (3) Trading Days after the Company's receipt of the facsimile
copy
of Exercise Delivery Documents, the Company fails to (x) issue and deliver
a
certificate for that number of Ordinary Shares to which the Holder is entitled
and register such Ordinary Shares on the Company's share register or to credit
the Holder's balance account with DTC for the number of Ordinary Shares to
which
the Holder is entitled upon such Holder's exercise of this Warrant or (y) issue
and deliver to the Holder by the Warrant Delivery Date a new Warrant for the
number of Ordinary Shares to which such Holder is entitled pursuant to Section
2(a) hereof, and if on or after such Trading Day the Holder purchases (in an
open market transaction or otherwise) Ordinary Shares to deliver in satisfaction
of a sale by the Holder of Ordinary Shares issuable upon such exercise that
the
Holder anticipated receiving from the Company (a "Buy-In"),
then
the Company shall, within three (3) Business Days after the Holder's request
and
in the Holder's discretion, either (i) pay cash to the Holder in an amount
equal
to the Holder's total purchase price (including brokerage commissions, if any)
for the Ordinary Shares so purchased (the "Buy-In
Price"),
at
which point the Company's obligation to deliver such certificate (and to issue
such Ordinary Shares) shall terminate, or (ii) promptly honor its obligation
to
deliver to the Holder a certificate or certificates representing such Ordinary
Shares or if legends are not required to be placed on certificates for Ordinary
Shares pursuant to the Securities Purchase Agreement (Shares and Warrants),
provided that the Transfer Agent is participating in DTC Fast Automated
Securities Transfer Program, upon the request of the Holder, credit such
aggregate number of Warrant Shares to which the Holder is entitled pursuant
to
such exercise to the Holder's or its designee's balance account with DTC through
its Deposit Withdrawal Agent Commission system and pay cash to the Holder in
an
amount equal to the excess (if any) of the Buy-In Price over the product of
(A)
such number of Ordinary Shares, times (B) the Closing Bid Price on the date
of
exercise.
(d)
Cashless
Exercise.
Notwithstanding
anything contained herein to the contrary, if within 210 days of the Issuance
Date a Registration Statement (as defined in the Registration Rights Agreement)
covering the Warrant Shares that are the subject of the Exercise Notice (the
"Unavailable
Warrant Shares")
is not
available for the resale of such Unavailable Warrant Shares, the Holder may,
in
its sole discretion, exercise this Warrant in whole or in part and, in lieu
of
making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the "Net Number" of Ordinary Shares determined
according to the following formula (a "Cashless
Exercise"):
Net
Number = (A
x
B) - (A x C)
B
For
purposes of the foregoing formula:
A=
the
total number of Ordinary Shares in respect of which this Warrant is then being
exercised.
B=
the
Closing Sale Price of the Ordinary Shares (as reported by Bloomberg) on the
Trading Day immediately preceding the date of the Exercise Notice.
C=
the
Exercise Price then in effect for the applicable Warrant Shares at the time
of
such exercise.
(e)
Disputes.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the Holder the number of Warrant Shares that are not disputed and resolve
such dispute in accordance with Section 12.
(f)
Limitations
on Exercises
(i)
Beneficial
Ownership.
The
Company shall not effect the exercise of this Warrant, and the Holder shall
not
have the right to exercise this Warrant, to the extent that after giving effect
to such exercise, such Person (together with such Person's affiliates) would
beneficially own in excess of 9.99% (the "Maximum
Percentage")
of the
number of Ordinary Shares outstanding immediately after giving effect to such
exercise. For purposes of the foregoing sentence, the aggregate number of
Ordinary Shares beneficially owned by such Person and its affiliates shall
include the number of Ordinary Shares issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but
shall exclude the number of Ordinary Shares which would be issuable upon (i)
exercise of the remaining, unexercised portion of this Warrant beneficially
owned by such Person and its affiliates and (ii) exercise or conversion of
the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by such Person and its affiliates (including, without
limitation, any convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein. Except as set forth in the preceding sentence, for purposes
of
this paragraph, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange
Act").
For
purposes of this Warrant, in determining the number of outstanding Ordinary
Shares, the Holder may rely on the number of outstanding Ordinary Shares as
reflected in (1) the Company's most recent periodic report under the Exchange
Act or other public filing with the Securities and Exchange Commission, as
the
case may be, (2) a more recent public announcement by the Company or (3) any
other written notice by the Company or the Transfer Agent setting forth the
number of Ordinary Shares outstanding. For any reason at any time, upon the
written or oral request of the Holder, the Company shall within one Business
Day
confirm orally and in writing to the Holder the number of Ordinary Shares then
outstanding. In any case, the number of outstanding Ordinary Shares shall be
determined after giving effect to the conversion or exercise of securities
of
the Company, including the Convertible Notes issued pursuant to the Securities
Purchase Agreement (Notes and Warrants), dated as of March 30, 2007 among the
Company and certain investors (the “Securities
Purchase Agreement (Notes and Warrants)”), the
Warrants to Purchase Ordinary Shares issued
pursuant to the Securities Purchase Agreement (Notes and Warrants) (the
“SPA
(Notes) Warrants” and
collectively with the Shares Warrants, the “SPA Warrants”)
and the
other Shares Warrants, by the Holder and its affiliates since the date as of
which such number of outstanding Ordinary Shares was reported. By written notice
to the Company, the Holder may from time to time increase or decrease the
Maximum Percentage to any other percentage not in excess of 9.99% specified
in
such notice (except such percentage may be exceeded with respect to a Holder
who
has made a written request for a waiver of such limitation); provided that
(i)
any such increase will not be effective until the sixty-first (61st)
day
after such notice is delivered to the Company, and (ii) any such increase or
decrease will apply only to the Holder and not to any other holder of SPA
Warrants.
(ii)
Principal
Market Regulation.
The
Company shall not be obligated to issue any Ordinary Shares upon exercise of
this Warrant, and the Holder of this Warrant shall not have the right to receive
upon exercise of this Warrant any Ordinary Shares, if the issuance of such
Ordinary Shares would exceed the aggregate number of Ordinary Shares which
the
Company may issue upon conversion or exercise, as applicable, of the SPA Notes
and the SPA Warrants without breaching the Company's obligations under the
rules
or regulations of the applicable Eligible Market (the number of shares which
may
be issued without violating such rules and regulations, the "Exchange
Cap"),
except that such limitation shall not apply in the event that the Company
(A) obtains the approval of its stockholders as required by the applicable
rules of such Eligible Market for issuances of Ordinary Shares in excess of
such
amount or (B) obtains a written opinion from outside counsel to the Company
that
such approval is not required, which opinion shall be reasonably satisfactory
to
the Required Holders. Unless and until such approval or written opinion is
obtained, no Buyer shall be issued in the aggregate, upon conversion or exercise
or otherwise, as applicable, of SPA Notes and SPA Warrants, Ordinary Shares
in
an amount greater than the difference of (A) the product of the Exchange Cap
multiplied by a fraction the numerator of which is the total number of Ordinary
Shares issuable to such Buyer upon the exercise of all such Buyer's SPA Warrants
and the conversion or all such Buyer's SPA Notes and the denominator of which
is
the total number of Ordinary Shares issuable upon the exercise of all the SPA
Warrants and conversion of all the SPA Notes minus (B)(ii) the aggregate number
of (x) Conversion Shares that have been issued to such Holder prior to such
time
upon conversion of any SPA Notes and (y) Warrant Shares that have been issued
to
such Holder prior to such time upon exercise of any SPA Warrants (in respect
of
each Buyer, the "Exchange
Cap Allocation").
In
the event that any Buyer shall sell or otherwise transfer any of such Buyer's
SPA Warrants, the transferee shall be allocated a pro rata portion of such
Buyer's Exchange Cap Allocation, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange
Cap
Allocation allocated to such transferee. In the event that any holder shall
exercise all of such holder's SPA Warrants into a number of Ordinary Shares
which, in the aggregate, is less than such holder's Exchange Cap Allocation,
then the difference between such holder's Exchange Cap Allocation and the number
of Ordinary Shares actually issued to such holder shall be allocated to the
respective Exchange Cap Allocations of the remaining holders of SPA Warrants
on
a pro rata basis in proportion to the aggregate number of Warrant Shares and
Conversion Shares issuable upon exercise of the SPA Warrants and conversion
of
the SPA Notes (at the then prevailing conversion price), if any, then held
by
each such holder.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.
The
Exercise Price and the number of Warrant Shares shall be adjusted from time
to
time as follows:
(a)
Adjustment
upon Issuance of Ordinary Shares.
If and
whenever on or after the Subscription Date, the Company issues or sells, or
in
accordance with this Section 2(a) is deemed to have issued or sold, any
Ordinary
Shares
(including, without limitation, the issuance or sale of Ordinary
Shares
owned or
held by or for the account of the Company and the issuance of any Ordinary
Shares, Options or Convertible Securities in exchange for any non-convertible
security such as a non-convertible note, but excluding Ordinary
Shares
deemed
to have been issued or sold by the Company in connection with any Excluded
Securities) for a consideration per share (the "New
Issuance Price")
less
than a price (the "Applicable
Price")
equal
to the Exercise Price in effect immediately prior to such issue or sale or
deemed issuance or sale (the foregoing a "Dilutive
Issuance"),
then,
(x) in the event of a Dilutive Issuance on or prior to the first anniversary
of
the Issuance Date, the Exercise Price in effect at the opening of business
on
the day next following such Dilutive Issuance shall be adjusted to equal the
New
Issuance Price, and (y) in the event of a Dilutive Issuance anytime following
the first anniversary of the Issuance Date, the Exercise Price in effect at
the
opening of business on the day next following such Dilutive Issuance shall
be
reduced to an amount equal to the
product of (A) the Exercise Price in effect immediately prior to such
Dilutive Issuance and (B) the quotient determined by dividing (1) the
sum of (I) the product derived by multiplying the Exercise Price in effect
immediately prior to such Dilutive Issuance and the number of Ordinary Shares
Deemed Outstanding immediately prior to such Dilutive Issuance plus
(II) the consideration, if any, received by the Company upon such Dilutive
Issuance, by (2) the product derived by multiplying (I) the Exercise Price
in effect immediately prior to such Dilutive Issuance by (II) the number of
Ordinary Shares Deemed Outstanding immediately after such Dilutive Issuance.
Upon
each
such adjustment of the Exercise Price hereunder, the number of Warrant Shares
shall be adjusted to the number of Ordinary Shares determined by multiplying
the
Exercise Price in effect immediately prior to such adjustment by the number
of
Warrant Shares acquirable upon exercise of this Warrant immediately prior to
such adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment. For purposes of determining the adjusted Exercise Price
under this Section 2(a), the following shall be applicable:
(i)
Issuance
of Options.
If the
Company in any manner grants any Options whether or not immediately exercisable
and the lowest price per share for which one Ordinary Share is issuable upon
the
exercise of any such Option or upon conversion, exercise or exchange of any
Convertible Securities issuable upon exercise of any such Option is less than
the Applicable Price, then such Ordinary Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the granting
or
sale of such Option for such price per share. For purposes of this Section
2(a)(i), the "lowest price per share for which one Ordinary Share is issuable
upon the exercise of any such Options or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option" shall
be equal to the sum of the lowest amounts of consideration (if any) received
or
receivable (but excluding any contingency amounts) by the Company with respect
to any one Ordinary Share upon the granting or sale of the Option, upon exercise
of the Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option. No further adjustment of the
Exercise Price or number of Warrant Shares shall be made upon the actual
issuance of such Ordinary Shares or of such Convertible Securities upon the
exercise of such Options or upon the actual issuance of such Ordinary Shares
upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance
of Convertible Securities.
If the
Company in any manner issues or sells any Convertible Securities whether or
not
immediately convertible and the lowest price per share for which one Ordinary
Share is issuable upon the conversion, exercise or exchange thereof is less
than
the Applicable Price, then such Ordinary Share shall be deemed to be outstanding
and to have been issued and sold by the Company at the time of the issuance
or
sale of such Convertible Securities for such price per share. For the purposes
of this Section 2(a)(ii), the "lowest price per share for which one Ordinary
Share is issuable upon the conversion, exercise or exchange thereof" shall
be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable (but excluding any contingency amounts) by the Company with respect
to one Ordinary Share upon the issuance or sale of the Convertible Security
and
upon conversion, exercise or exchange of such Convertible Security. No further
adjustment of the Exercise Price or number of Warrant Shares shall be made
upon
the actual issuance of such Ordinary Shares upon conversion, exercise or
exchange of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of this Warrant has been or is to be made pursuant to other provisions of this
Section 2(a), no further adjustment of the Exercise Price or number of Warrant
Shares shall be made by reason of such issue or sale.
(iii)
Change
in Option Price or Rate of Conversion.
If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible
into
or exercisable or exchangeable for Ordinary Shares increases or decreases at
any
time, the Exercise Price and the number of Warrant Shares in effect at the
time
of such increase or decrease shall be adjusted to the Exercise Price and the
number of Warrant Shares which would have been in effect at such time had such
Options or Convertible Securities provided for such increased or decreased
purchase price, additional consideration or increased or decreased conversion
rate, as the case may be, at the time initially granted, issued or sold. For
purposes of this Section 2(a)(iii), if the terms of any Option or Convertible
Security that was outstanding as of the date of issuance of this Warrant are
increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 2(a) shall be made if such adjustment would
result in an increase of the Exercise Price then in effect or a decrease in
the
number of Warrant Shares.
(iv)
Calculation
of Consideration Received.
In case
any Option is issued in connection with the issue or sale of other securities
of
the Company, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $0.001. For avoidance
of doubt, such $0.001 consideration will be added to any consideration received
upon exercise of the Option to determine the "lowest price per share for which
one Ordinary Share issuable upon the exercise of any such Options or upon
conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option" pursuant to clause (i) above. If any Ordinary
Shares, Options or Convertible Securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefor will be deemed
to be the net amount received by the Company therefor. If any Ordinary Shares,
Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company will be
the
fair value of such consideration, except where such consideration consists
of
securities, in which case the amount of consideration received by the Company
will be the Closing Sale Price of such security on the date of receipt. If
any
Ordinary Shares, Options or Convertible Securities are issued to the owners
of
the non-surviving entity in connection with any merger in which the Company
is
the surviving entity, the amount of consideration therefor will be deemed to
be
the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such Ordinary Shares, Options or
Convertible Securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and
the
Required Holders. If such parties are unable to reach agreement within ten
(10)
days after the occurrence of an event requiring valuation (the "Valuation
Event"),
the
fair value of such consideration will be determined within ten (10) Business
Days after the tenth day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon all parties
absent manifest error and the fees and expenses of such appraiser shall be
borne
by the Company.
(v)
Record
Date.
If the
Company takes a record of the holders of shares of Common Stock for the purpose
of entitling them (A) to receive a dividend or other distribution payable
in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible
Securities, then such record date will be deemed to be the date of the issue
or
sale of the shares of Common Stock deemed to have been issued or sold upon
the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case
may
be.
(b) Adjustment
upon Subdivision or Combination of Common Stock.
If and
whenever on or after the Subscription Date, the Company (A) pays a dividend
or makes a distribution in either case payable in Ordinary Shares on any class
of shares of capital stock of the Company, (B) subdivides its outstanding
Ordinary Shares into a greater number of shares, (C) combines its outstanding
Ordinary Shares into a smaller number of shares or (D) issues any shares of
capital stock by reclassification of its Ordinary Shares, then, and in each
such
case, (X) the aggregate number of Warrant Shares for which this Warrant is
exercisable (the "Warrant
Share Number")
immediately prior to such event shall be adjusted (and any other appropriate
actions shall be taken by the Company) so that the Warrant Holder shall be
entitled to receive upon exercise of this Warrant the number of Ordinary Shares
or other securities of the Company that it would have owned or would have been
entitled to receive upon or by reason of any of the events described above,
had
this Warrant been exercised immediately prior to the occurrence of such event
and (Y) the Exercise Price payable upon the exercise of this Warrant shall
be
adjusted by multiplying such Exercise Price immediately prior to such adjustment
by a fraction, the numerator of which shall be the number of Warrant Shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
and the denominator of which shall be the number of Warrant Shares issuable
immediately thereafter. An adjustment made pursuant to this Section 2 shall
become effective immediately upon the opening of business on the day next
following the record date (subject to Section 2(f) below) in the case of a
dividend or distribution and shall become effective immediately upon the opening
of business on the day next following the effective date in the case of a
subdivision, combination or reclassification.
(c)
Other
Events.
If any
event occurs of the type contemplated by the provisions of this Section 2 but
not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Board of Directors will make an appropriate
adjustment in the Exercise Price and the number of Warrant Shares so as to
protect the rights of the Holder; provided that no such adjustment pursuant
to
this Section 2(d) will increase the Exercise Price or decrease the number of
Warrant Shares as otherwise determined pursuant to this Section 2.
(d)
Notice
of Adjustment.
Upon
the occurrence of any event which requires any adjustment or readjustment of
the
Exercise Price or change in number or type of stock, securities and/or other
property issuable upon exercise of this Warrant, then, and in each such case,
the Company shall promptly (i) file with the Transfer Agent an officer's
certificate setting forth the adjusted Exercise Price after such adjustment
and
setting forth a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error, (ii) make a public announcement of such adjustment
or readjustment and (iii) give notice thereof to the holder hereof, which
notice shall state the adjusted Exercise Price, any change in the number or
type
of stock, securities and/or other property issuable upon exercise of this
Warrant, setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based and the effective date of such
adjustment.
(e)
No
adjustment in the Exercise Price shall be required unless such adjustment would
require a cumulative decrease of at least $0.01 in such price; provided,
however,
that
any adjustments that by reason of this Section 2 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment
until made. All calculations under this Section 2(f) shall be made to the
nearest cent (with $0.005 being rounded upward) or to the nearest one-tenth
of a
share (with $0.05 of a share being rounded upward), as the case may
be.
(f)
In
any case in which Section 2 provides that an adjustment shall become effective
on the day next following the record date for an event, the Company may without
penalty defer until the occurrence of such event issuing to the Holders of
any
SPA Warrants exercised after such record date and before the occurrence of
such
event the additional Ordinary Shares issuable upon such exercise by reason
of
the adjustment required by such event over and above the Ordinary Shares
issuable upon such conversion before giving effect to such
adjustment.
(g)
If
any action or transaction would require adjustment of the Exercise Price
pursuant to more than one subsection of this Section 2, only one adjustment
shall be made, and such adjustment shall be the amount of adjustment that that
results in the lowest Exercise Price.
3. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase
Rights.
In
addition to any adjustments pursuant to Section 2 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights
to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Ordinary Shares (the "Purchase
Rights"),
then
the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of Ordinary Shares acquirable upon
complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is
taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of Ordinary Shares are to
be
determined for the grant, issue or sale of such Purchase Rights.
(b)
Fundamental
Transactions.
If, at
any time while this Warrant is outstanding there is a Fundamental Transaction,
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the same amount and kind of securities, cash or property as it
would have been entitled to receive upon the occurrence of such Fundamental
Transaction if it had been, immediately prior to such Fundamental Transaction,
the holder of the number of Warrant Shares then issuable upon exercise in full
of this Warrant (the "Alternate
Consideration").
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 of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company 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. 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. At the Holder's option and request made prior to the consummation
of a Fundamental Transaction, any successor to the Company or surviving entity
in such Fundamental Transaction shall, either (1) issue to the Holder a new
warrant substantially in the form of this Warrant and consistent with the
foregoing provisions and evidencing the Holder's right to purchase the Alternate
Consideration for the aggregate Exercise Price upon exercise thereof, or (2)
in
the event that the amount of the Alternate Consideration issuable per Ordinary
Share in such Fundamental Transaction is less than or equal to 120% of the
Exercise Price, purchase the Warrant from the Holder for a purchase price,
payable in cash within five Trading Days after such request (or, if later,
on
the effective date of the Fundamental Transaction), equal to the Black Scholes
Value of the remaining unexercised portion of this Warrant on the date of such
request. 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 paragraph (b) and insuring that the
Warrant (or any such replacement security) will be similarly adjusted upon
any
subsequent transaction analogous to a Fundamental Transaction.
4. Representations,
Warranties And Covenants of the Company. The
Company hereby covenants and agrees that the Company will not, by amendment
of
its Articles of Association, Memorandum of Association or through any
reorganization, transfer of assets, consolidation, merger, scheme of
arrangement, 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, and will at all times in good faith carry out all the
provisions of this Warrant and take all action as may be required to protect
the
rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any Ordinary Shares
receivable upon the exercise of this Warrant above the Exercise Price then
in
effect, (ii) shall take all such actions as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and
nonassessable Ordinary Shares upon the exercise of this Warrant, and (iii)
shall, so long as any of the Shares Warrants are outstanding, take all action
necessary to reserve and keep available out of its authorized and unissued
Ordinary Shares, solely for the purpose of effecting the exercise of the Shares
Warrants, 125% of the number of Ordinary Shares as shall from time to time
be
necessary to effect the exercise of the Shares Warrants then outstanding
(without regard to any limitations on exercise).
(b)
This
Warrant is, and any Shares Warrants issued in substitution for or replacement
of
this Warrant will upon issuance be, duly authorized and validly
issued.
(c)
All
Warrant Shares that may be issued upon the exercise of the rights represented
by
this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes and Liens with respect to the issuance
thereof.
(d)
So
long
as any of the Shares Warrants are outstanding, the Company will, and will cause
each of its subsidiaries to (i) conduct its operations in the ordinary course
of
business consistent with past practice, (ii) maintain its corporate existence
and (iii) maintain and protect all material Intellectual Property used in the
business of the Company and its subsidiaries.
(e)
This
Warrant will be binding upon any entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the assets of the
Company and it shall be a condition to the closing of any of the foregoing
transactions that such successor entity (i) complies with the terms of, and
satisfies the conditions in, Section 3(b) above and (ii) is a publicly traded
corporation whose common stock is listed for trading or quoted on an Eligible
Market.
(f)
Insufficient
Authorized Shares.
From
the date of this Warrant until the date the rights represented by this Warrant
may no longer be exercised, the Company will at all times have authorized and
reserved at least 125% of the number of Ordinary Shares needed to provide for
the exercise of the rights then represented by this Warrant (without regard
to
any limitations on exercises) (the "Required
Reserve Amount").
The
initial number of Ordinary Shares reserved for exercises of the Shares Warrants
and each increase in the number of Ordinary Shares so reserved shall be
allocated pro rata among the Holders of the Shares Warrants based on the number
of Shares Warrants then held by each Holder of the Shares Warrants or increase
in the number of reserved Ordinary Shares, as the case may be. In the event
any
Holder of the Shares Warrants shall sell or otherwise transfer any of such
Holder's Shares Warrants, each transferee shall be allocated a pro rata portion
of the number of Ordinary Shares reserved for such transferor. Any Ordinary
Shares reserved and allocated to any Person that ceases to hold any Shares
Warrants shall be allocated to the remaining Holders of the Shares Warrants,
pro
rata based on the number of Shares Warrants then held by such Holders. If at
any
time while any of the Shares Warrants remain outstanding the Company does not
have the Required Reserve Amount authorized and reserved (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary to
increase the Company's authorized Ordinary Shares to an amount sufficient to
allow the Company to reserve the Required Reserve Amount for the Shares Warrants
then outstanding. Without limiting the generality of the foregoing sentence,
promptly after the date of the occurrence of an Authorized Share Failure, but
in
no event later than fifteen (15) days after the occurrence of such, the Company
shall take all action necessary to increase the Company's Authorized Ordinary
Shares to an amount sufficient to allow the Company to reserve the Required
Reserved Amount for the Warrants then outstanding, including obtaining the
approval of its Shareholders as required by the applicable rules of the
Principal Market. In connection with such actions, the Company shall provide
each Shareholder with a proxy statement and shall use its best efforts to
solicit its stockholders' approval of such increase in authorized Ordinary
Shares and to cause its board of directors to recommend to the stockholders
that
they approve such proposal.
(g)
Listing.
The
Company shall promptly secure the listing or quotation of the Ordinary Shares
issuable upon the exercise of this Warrant upon the Initial Principal Market
or
upon such other Eligible Market, if any, upon which Ordinary Shares are then
listed or quoted (subject to official notice of issuance upon exercise of this
Warrant) and shall maintain, so long as any other Ordinary Shares shall be
so
listed or quoted, such listing or quotation of all Ordinary Shares from time
to
time issuable upon the exercise of this Warrant; and the Company shall so list
or apply for quotation on each Eligible Market, and shall maintain such listing
or quotation of, any other shares of capital stock of the Company issuable
upon
the exercise of this Warrant if and so long as any shares of the same class
shall be listed or quoted on such Eligible Market.
(h)
Blue
Sky Laws.
The
Company shall, on or before the date of issuance of any Warrant Shares, take
such actions as the Company shall reasonably determine are necessary to qualify
the Warrant Shares for, or obtain exemption for the Warrant Shares for, sale
to
the holder of this Warrant upon the exercise hereof under applicable securities
or "blue sky" laws of the states of the United States, and shall provide
evidence of any such action so taken to the holder of this Warrant prior to
such
date; provided,
however,
that
the Company shall not be required in connection therewith or as a condition
thereto to (i) qualify to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 4(h)(i),
(ii) subject itself to general taxation in any such jurisdiction or
(iii) file a general consent to service of process in any such
jurisdiction.
5. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER.
Except
as otherwise specifically provided herein, the Holder, solely in such Person's
capacity as a holder of this Warrant, shall not be entitled to vote or receive
dividends or be deemed the holder of share capital of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in such Person's capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give
or
withhold consent to any corporate action (whether any reorganization, issue
of
stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares
which such Person is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed
as
imposing any liabilities on the Holder to purchase any securities (upon exercise
of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 5, the Company shall provide the Holder with copies
of the same notices and other information given to the stockholders of the
Company generally, contemporaneously with the giving thereof to the
stockholders.
6. REISSUANCE
OF WARRANTS.
(a)
Transfer of Warrant.
(i)
The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to the Holder), a
register for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as
the
name and address of each transferee. The Company may treat the person in whose
name any Warrant is registered on the register as the owner and Holder thereof
for all purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this
Warrant.
(ii)
The
Holder may assign or transfer some or all of its rights hereunder, subject
to
compliance with the 1933 Act and the provisions of Section 2 of the
Securities Purchase Agreement (Shares and Warrants) without the consent of
the
Company.
(iii)
The
Company is obligated to register the Warrant Shares for resale under the 1933
Act pursuant to the Registration Rights Agreement. The Ordinary Shares issuable
upon exercise of this Warrant shall constitute Registrable Securities (as such
term is defined in the Registration Rights Agreement). Each Holder of this
Warrant shall be entitled to all the benefits afforded to a Holder of any such
Registrable Securities under the Registration Rights Agreement and such Holder,
by its acceptance of this Warrant, agrees to be bound by and to comply with
the
terms and conditions of the Registration Rights Agreement applicable to such
Holder as a Holder of such Registrable Securities.
(b)
Lost,
Stolen or Mutilated Warrant.
Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the
loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder
to
the Company in customary form and, in the case of mutilation, upon surrender
and
cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant (in accordance with Section 6(d)) representing the right
to
purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable
for Multiple Warrants.
This
Warrant is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Warrant or Warrants (in accordance
with Section 6(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant
will represent the right to purchase such portion of such Warrant Shares as
is
designated by the Holder at the time of such surrender; provided,
however,
that no
Warrants for fractional Ordinary Shares shall be given.
(d)
Book
Entry.
Notwithstanding anything to the contrary set forth herein, upon exercise of
this
Warrant in accordance with the terms hereof, the Holder shall not be required
to
physically surrender this Warrant to the Company unless it is being exercised
for all of the Warrant Shares represented by the Warrant. The Holder and the
Company shall each maintain records showing the number of Warrant Shares
exercised and issued and the dates of such exercises or shall use such other
method, reasonably satisfactory to the other, so as not to require physical
surrender of this Warrant upon each such exercise. In the event of any dispute
or discrepancy, such records of the Holder establishing the number of Warrant
Shares to which the Holder is entitled shall be controlling and determinative
in
the absence of demonstrable error. In the event the Company disputes such
records of the Holder, the terms and provisions of Section 12 hereof shall
apply. Notwithstanding the foregoing, if this Warrant is exercised as aforesaid,
the Holder may not transfer this Warrant unless the holder first physically
surrenders this Warrant to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Warrant of like tenor,
registered as the Holder may request, representing in the aggregate the
remaining number of Warrant Shares represented by this Warrant. The Holder
and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following exercises of any portion
of this Warrant, the number of Warrant Shares represented by this Warrant may
be
less than the number stated on the face hereof.
7. NOTICES.
Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Warrant must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If
to the
Company:
Comanche
Clean Energy Corporation
Comanche
Clean Energy Corporation
c/o
Maples & Calder Corporate Services Ltd.
PO
Box
309 GT
Ugland
House
South
Church Street
George
Town
Grand
Cayman, Cayman Islands
Tel:
345-949-8066
Fax:
345-949-8080
Attention:
Graham Lockington
Email:
Graham.Lockington@MAPLESANDCALDER.com
With
a
copy to:
Comanche
Clean Energy Corporation
c/o
FondElec
One
Dock
Street
Stamford,
Ct. 06902 USa
Tel:
203-326-4570
Fax:
203-326-4578
Attention:
Thomas Cauchois
Email:
tcauchois@fondelec.com
If
to a
Holder of this Warrant, to it at the address and facsimile number set forth
on
the Schedule of Buyers to the Securities Purchase Agreement (Shares and
Warrants), with copies to such holder’s representatives as set forth on such
Schedule of Buyers, or, in the case of the holder or any other Person named
above, at such other address and/or facsimile number and/or to the attention
of
such other person as the recipient party has specified by written notice to
the
other party in accordance with this Section 7 at least five (5) Business
Days prior to the effectiveness of such change. Written confirmation of receipt
(A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and
an
image of the first page of such transmission or (C) provided by a
nationally recognized overnight delivery service shall be rebuttable evidence
of
personal service, receipt by facsimile or deposit with a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii)
above, respectively.
8. AMENDMENT
AND WAIVER.
Except
as otherwise provided herein, the provisions of this Warrant may be amended
and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the Required Holders; provided that no such action may
increase the exercise price of any Shares Warrant or decrease the number of
shares or class of stock obtainable upon exercise of any Shares Warrant without
the written consent of the Holder. No such amendment shall be effective to
the
extent that it applies to less than all of the holders of the SPA (Notes)
Warrants then outstanding. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of
this
Warrant unless the same consideration also is offered to all of the Holders
of
the Shares Warrants.
9. GOVERNING
LAW; JURISDICTION.
This
Warrant shall be governed by and construed and enforced in accordance with,
and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the
State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than
the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is
improper. Each party hereby irrevocably waives personal service of process
and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it
under
this Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by
law.
10. CONSTRUCTION;
HEADINGS.
This
Warrant shall be deemed to be jointly drafted by the Company and all the Buyers
and shall not be construed against any person as the drafter hereof. The
headings of this Warrant are for convenience of reference and shall not form
part of, or affect the interpretation of, this Warrant.
11. SEVERABILITY.
If any
provision of this Warrant or the application thereof becomes or is declared
by a
court of competent jurisdiction to be illegal, void or unenforceable, the
remainder of the terms of this Warrant will continue in full force and effect.
12. DISPUTE
RESOLUTION.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations via facsimile within two
Business Days of receipt of the Exercise Notice giving rise to such dispute,
as
the case may be, to the Holder. If the Holder and the Company are unable to
agree upon such determination or calculation of the Exercise Price or the
Warrant Shares within three Business Days of such disputed determination or
arithmetic calculation being submitted to the Holder, then the Company shall,
promptly, and in any event within two (2) Business Days submit via facsimile
(a)
the disputed determination of the Exercise Price to an independent, reputable
investment bank agreed to by the Company and the Holder or (b) the disputed
arithmetic calculation of the Warrant Shares to the Company's independent,
outside accountant. The Company shall cause at its expense the investment bank
or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the Holder of the results no later
than
five (5) Business Days from the time it receives the disputed determinations
or
calculations. If such investment bank or accountant agrees with the Company’s
determination or calculations (as the case may be), then the Holder shall
reimburse the Company for the expense it incurred to cause the investment
bank/accountant to perform such determination or calculation (the “Evaluation
Expense”).
If
Exercise Price or the Warrant Shares as determined or calculated (as the case
may be) by such investment bank or accountant (the “Third
Party Determination”)
falls
in between the Exercise Price or Warrant Shares as determined or calculated
(as
the case may be) by the Company (the “Company
Determination”)
and
the Exercise Price or the Warrant Shares as determined or calculated (as the
case may be) by the Holder (the “Holder
Determination”),
then
the Holder shall reimburse the Company for a fraction of the Evaluation Expense
of which the denominator shall be the absolute difference between the Company
Determination and the Holder Determination and of which the numerator shall
be
the absolute difference between the Holder Determination and the Third Party
Determination. If the Third Party Determination of the Exercise Price is
greater than the Company Determination of the Exercise Price or the Third Party
Determination of the number of Warrant Shares is less than the Company
Determination of the Warrant Shares, then the Holder shall reimburse the Company
for the entire Evaluation Expense. If the Third Party Determination of the
Exercise Price is lower than the Holder Determination of the Exercise Price
or
the Third Party Determination of the number of Warrant Shares is greater than
the Holder Determination of the number of Warrant Shares, then the Holder shall
not reimburse the Company for any Evaluation Expense. Such investment bank's
or
accountant's determination or calculation, as the case may be, shall be binding
upon all parties absent demonstrable error.
13. REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.
The
remedies provided in this Warrant shall be cumulative and in addition to all
other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), and nothing herein shall limit the right of the Holder
to
pursue actual damages for any failure by the Company to comply with the terms
of
this Warrant. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holder and that the remedy at
law
for any such breach may be inadequate. The Company therefore agrees that, in
the
event of any such breach or threatened breach, the holder of this Warrant shall
be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.
14. NOTICE
OF CERTAIN EVENTS.
The
Company will give written notice to the Holder of this Warrant at least ten
(10)
Business Days prior to the date on which the Company closes its books or takes
a
record (A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any pro rata subscription offer to Holders of Shares or
(C)
for determining rights to vote in respect of any Fundamental Transaction,
dissolution or liquidation, provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to
such
Holder to the extent it is material non-public information. The Company will
also give written notice to the Holder of this Warrant at least ten (10)
Business Days prior to the date on which any Fundamental Transaction,
dissolution or liquidation will take place, provided that such information
shall
be made known to the public prior to or in conjunction with such notice being
provided to such Holder to the extent it is material non-public
information.
15. CERTAIN
DEFINITIONS.
For
purposes of this Warrant, the following terms shall have the following
meanings:
(i)
"Black
Scholes Value"
means
the value of this Warrant based on the Black and Scholes Option Pricing Model
obtained from the "OV" function on Bloomberg determined as of the day
immediately following the public announcement of the applicable Fundamental
Transaction and reflecting (i) a risk-free interest rate corresponding to the
U.S. Treasury rate for a period equal to the remaining term of this Warrant
as
of such date of request and (ii) an expected volatility of the Common Stock
equal to the greater of 60% and the 100 day volatility obtained from the HVT
function on Bloomberg..
(ii) "Bloomberg"
means
Bloomberg Financial Markets.
(ii) "Business
Day"
means
any day other than Saturday, Sunday or other day on which commercial banks
in
The City of New York are authorized or required by law to remain
closed.
(iv) "Closing
Bid Price"
and
"Closing
Sale Price"
means,
for any security as of any date, the last closing bid price and last closing
trade price, respectively, for such security on the Principal Market, as
reported by Bloomberg, or, if the Principal Market begins to operate on an
extended hours basis and does not designate the closing bid price or the closing
trade price, as the case may be, then the last bid price or last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as reported
by Bloomberg, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the last closing bid price or
last
trade price, respectively, of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or
last
trade price, respectively, of such security in the over-the-counter market
on
the electronic bulletin board for such security as reported by Bloomberg, or,
if
no closing bid price or last trade price, respectively, is reported for such
security by Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the "pink
sheets" by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).
If
the Closing Bid Price or the Closing Sale Price cannot be calculated for a
security on a particular date on any of the foregoing bases, the Closing Bid
Price or the Closing Sale Price, as the case may be, of such security on such
date shall be the fair market value as mutually determined by the Company and
the Holder. If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved pursuant
to
Section 12. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during
the
applicable calculation period.
(i)
"Convertible
Securities"
means
any stock or securities (other than Options) directly or indirectly convertible
into or exercisable or exchangeable for Ordinary Shares.
(ii)
"Eligible
Market"
means
the Initial Principal Market, The New York Stock Exchange, Inc., the American
Stock Exchange, The NASDAQ Global Select Market, The NASDAQ Global Market or
The
NASDAQ Capital Market.
(iii)
"Excluded
Securities"
has the
meaning set forth in the SPA Notes.
(iv)
"Expiration
Date"
means
the date that is sixty months after the Issuance Date; provided that if such
date falls on a day other than a Business Day or on which trading does not
take
place on the applicable Eligible Market (a "Holiday"),
the
next date that is not a Holiday.
(v)
"Fundamental
Transaction"
means
that the Company shall, directly or indirectly, in one or more related
transactions effected after the Issuance Date, (i) consolidate or merge with
or
into (whether or not the Company is the surviving corporation) another Person,
or (ii) sell, assign, transfer, convey or otherwise dispose of all or
substantially all of the properties or assets of the Company to another Person,
or (iii) be the subject of a purchase, tender or exchange offer by another
Person that is accepted by the holders of more than 50% of the outstanding
shares of Voting Shares (not including any shares of Voting Shares held by
the
Person or Persons making or party to, or associated or affiliated with the
Persons making or party to, such purchase, tender or exchange offer), or (iv)
consummate a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme
of
arrangement) with another Person whereby such other Person acquires more than
the 50% of the outstanding Ordinary Shares (not including any Ordinary Shares
held by the other Person or other Persons making or party to, or associated
or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), or (v) reclassify or change the
outstanding Ordinary Shares (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 (vi) any "person" or "group" (as these terms
are
used for purposes of Sections 13(d) and 14(d) of the Exchange Act) is or shall
become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act),
directly or indirectly, of 50% of the aggregate ordinary voting power
represented by issued and outstanding Shares.
(vi)
"Initial
Principal Market"
means
the National Association of Securities Dealers Inc.'s OTC Bulletin
Board.
(vii)
"Options"
means
any rights, warrants or options to subscribe for or purchase Ordinary Shares
or
Convertible Securities.
(viii)
"Ordinary
Shares"
means
(i) the Company's Ordinary Shares, par value $0.001 per share, and
(ii) any share capital into which such Ordinary Shares shall have been
changed or any share capital resulting from a reclassification of such Ordinary
Shares.
(ix)
"Ordinary
Shares Deemed Outstanding"
means,
at any given time, the number of Ordinary Shares actually outstanding at such
time, plus the number of Ordinary Shares deemed to be outstanding pursuant
to
Section 2(a) hereof regardless of whether the Options or Convertible Securities
are actually exercisable at such time, but excluding any Ordinary Shares owned
or held by or for the account of the Company or issuable upon conversion of
the
SPA Notes and exercise of the SPA Warrants.
(x)
"Parent
Entity"
of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.
(xi)
"Person"
means
an individual, a limited liability company, a partnership, a joint venture,
a
corporation, a trust, an unincorporated organization, any other entity and
a
government or any department or agency thereof.
(xii)
"Principal
Market"
means,
from time to time, the Eligible Market upon which the Common Stock is admitted
or listed and principally trades.
(xiii)
"Registration
Rights Agreement"
means
that certain registration rights agreement by and among the Company and the
Buyers.
(xiv)
"Required
Holders"
means
the holders of the SPA Warrants representing at least a majority of Ordinary
Shares issuable upon exercise of the SPA Warrants then outstanding (without
regard to any limitations on exercise thereof); provided, that any SPA Warrant
that is held by an Affiliate of the Company shall not be deemed to be
outstanding for purposes of the determination of “Required
Holders.”
(xv)
"SPA
Notes"
means
those certain Secured Convertible Notes due _____, 2012 issued pursuant to
the
Securities Purchase Agreement (Notes and Warrants) dated as of March 30, 2007
among the Company and the buyers listed on the Schedule of Buyers
thereto.
(xvi)
"Successor
Entity"
means
the Person (or, if so elected by the Required Holders, the Parent Entity) formed
by, resulting from or surviving any Fundamental Transaction or the Person (or,
if so elected by the Required Holders, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.
(xvii)
"Trading
Day"
means
any day on which trading the Ordinary Shares is reported on the Initial
Principal Market, or, if the Initial Principal Market is not the principal
trading market for the Common Stock, then on the Eligible Market that is the
principal securities exchange or securities market on which the Ordinary Shares
are then traded; provided that "Trading Day" shall not include any day on which
the Ordinary Shares are scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Ordinary Shares are suspended from trading
during the final hour of trading on such exchange or market (or if such exchange
or market does not designate in advance the closing time of trading on such
exchange or market, then during the hour ending at 4:00:00 p.m., New York
Time).
(xviii)
"Voting
Shares"
of a
Person means capital stock of such Person of the class or classes pursuant
to
which the holders thereof have the general voting power to elect, or the general
power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital
stock of any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
[Signature
Page Follows]
IN
WITNESS WHEREOF,
the
Company has caused this Warrant to Purchase Ordinary Shares to be duly executed
as of the Issuance Date set out above.
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COMANCHE
CLEAN ENERGY CORPORATION
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By: |
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Name: Thomas
Cauchois
Title:
Chairman
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT
TO PURCHASE ORDINARY SHARES
COMANCHE
CLEAN ENERGY CORPORATION
The
undersigned holder hereby exercises the right to purchase _________________
of
the Ordinary Shares of Comanche Clean Energy Corporation (the “Ordinary
Shares”),
a
Cayman Islands corporation (the "Company"),
pursuant to the Warrant to Purchase Ordinary Shares (Warrant No: ______________)
(as adjusted by all the partial exercises thereof prior to the date hereof,
the
"Warrant";
The
total number of Ordinary Shares issuable upon exercise of the Warrant, the
“Warrant
Shares”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
1.
Form
of Exercise Price. The Holder intends that payment of the Exercise Price shall
be made as:
___________ a
"Cash
Exercise" in respect of ___________ Warrant Shares; and/or
When
available pursuant to the terms of the Warrant, ___________ a
"Cashless Exercise" in respect of ___________ Warrant Shares.
2.
Cash
Exercise. In the event that the holder has elected a Cash Exercise in respect
of
some or all of the Warrant Shares to be issued pursuant hereto, the undersigned
holder hereby exercises the right to purchase _________________ of the Ordinary
Shares ("Warrant
Shares")
of
Comanche Clean Energy Corporation, a Cayman Islands corporation (the
"Company"),
evidenced by the attached Warrant to Purchase Ordinary Shares (the "Warrant").
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant.
3.
Payment of Exercise Price. The holder shall pay the Aggregate Exercise Price
in
the sum of $___________________ to the Company in accordance with the terms
of
the Warrant.
4.
Delivery of Warrant Shares. The Company shall deliver to the holder __________
Warrant Shares in accordance with the terms of the Warrant.
Issue
to:
___________________________________________________
Address: ___________________________________________________________
Facsimile
Number: ____________________________________________________
Authorization: _______________________
By: _______________________________
Title: _____________________________
Dated: ____________________________
DTC
Participant Number and Name (if electronic book entry transfer):
____________________________
Account
Number (if electronic book entry transfer):
____________________________
The
undersigned holder hereby acknowledges that the execution and delivery of this
Exercise Notice with respect to less than all of Warrant Shares shall have
the
same effect as cancellation of the Warrant and issuance of a new warrant
evidencing the right to purchase the remaining number of Warrant Shares.
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs Interwest
Transfer Company Inc. to issue the above indicated number of Ordinary Shares
in
accordance with the Transfer Agent Instructions dated ____________________,
2007
from the Company and acknowledged and agreed to by Interwest Transfer Company
Inc.
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COMANCHE
CLEAN ENERGY CORPORATION
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By: |
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Name:
Title:
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