SECURITIES
PURCHASE AGREEMENT
THIS
SECURITIES PURCHASE AGREEMENT (“Agreement”) is made
and entered into as of March 16, 2010 between Global Clean Energy Holdings,
Inc., a Utah corporation (“Corporation”), and
the purchasers listed on the signature page of this Agreement (each and “Investor” and
collectively, the “Investors”). Capitalized
terms used herein but not otherwise defined shall have the meanings ascribed to
them in Section 5.5 of this Agreement.
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act (as defined below) and Rule 506 promulgated
thereunder, the Corporation desires to borrow certain sums from each of the
Investors and, in consideration thereof issue certain convertible notes and
warrants to each of the Investors, and each Investor, severally and not jointly,
desires to make a loan to the Corporation and accept such notes and warrants
from the Corporation, all pursuant to the terms set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereby agree as follows:
1.Purchase
and Sale. Subject to the terms and conditions of this
Agreement, at the Closing (as defined below), the Corporation agrees to issue
and sell to Investors, and Investors hereby agree to purchase from the
Corporation, the Notes and the Warrants set forth under the Investor’s name on
the signature page hereof. The obligations of each of the Investors
hereunder are several and not joint, and the sale of the Securities to each of
the Investors is a separate transaction; provided, however, that the
Corporation shall not be obligated to consummate the sale of any of the
Securities unless all of the Securities are sold.
2.Closing. The
consummation of the purchase and sale of the Securities provided for herein
(“Closing”)
will take place at the offices of the Corporation at 6033 W. Century Boulevard,
Suite 895, Los Angeles, CA 90045 on March 16, 2010, or at such other date, time
and place upon which the Corporation and the Investors shall agree (“Closing
Date”). At the Closing, the Corporation will deliver to each
Investor certificates or other instruments evidencing the Securities being
purchased by that Investor hereunder against delivery to the Corporation by each
Investor of the full amount of the purchase price of such Securities by a check
payable to the Corporation’s order or in cash.
3.Representations,
Warranties and Agreements of Investor. As a material inducement
to the Corporation to sell and issue the Securities to Investors, each
Investor hereby represents and warrants on its own behalf to the Corporation,
and agrees with the Corporation, as follows:
3.1 Authorization;
Enforceability. Such Investor has all requisite power and
authority to enter into this Agreement and to purchase the Securities listed
under the Investor’s name on the signature page of this
Agreement. This Agreement has been duly executed and delivered by
such Investor.
3.2 Purchase for Own
Account. Such Investor is acquiring the Securities (including
the Note Shares and Warrant Shares, as such terms are defined in Section 5.5
hereof) solely for
its own account, for investment purposes only and not with a view to, or for
resale in connection with, any distribution or public offering of the
Securities, the Note Shares or the Warrant Shares within the meaning of the
Securities Act of 1933, as amended (the “Securities
Act”). Such Investor has no present intention to sell, offer
to sell, or otherwise dispose of or distribute any of the Securities, the Note
Shares or the Warrant Shares. Such Investor will hold the entire
legal and beneficial interest in and to the Securities and does not presently
intend to divide or share such interest with any other person or
entity.
3.3 Restrictions on
Transfer. Such Investor understands and has been advised by
the Corporation that the Securities (including the Note Shares and Warrant
Shares) have not been registered under the Securities Act or qualified under the
California Corporate Securities Law of 1968, as amended (the “Law”), in reliance on
exemptions from the registration and/or qualification requirements of such laws,
and that consequently the Securities (including the Note Shares and Warrant
Shares) cannot be offered, sold or otherwise transferred, and must be held
indefinitely by the Investor, unless and until they are registered with the U.S.
Securities and Exchange Commission (the “SEC”) under the
Securities Act, qualified under the Law, or until exemptions from such
registration and qualification requirements are available.
3.4 Rule
144. Such Investor is familiar with SEC Rule 144 promulgated
under the Securities Act, which permits certain limited sales of unregistered
securities in specified circumstances, and, in any event, requires that the
Securities (including the Note Shares and Warrant Shares) be held for a minimum
of six months (and in some cases longer) after they have been purchased and paid
for (within the meaning of Rule 144) before they may be resold under Rule
144.
3.5 Legends. Such
Investor understands and agrees that all certificate(s) evidencing the
Investor’s Securities, Note Shares and Warrant Shares (and any additional
securities issued in respect of such securities upon any stock split, stock
dividend, merger, reorganization or recapitalization) will be imprinted with a
legend that reads substantially as set forth below, together with any other
legends that, in the opinion of legal counsel to the Corporation, are required
by the Securities Act or by other federal or state securities laws:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.
3.6 Stop Transfer
Instructions. Such Investor agrees that, in order to ensure
compliance with and to enforce the restrictions on transfer referred to in this
Agreement the Corporation may refuse to transfer the Securities, Note Shares and
Warrant Shares and may issue appropriate “stop transfer” instructions to its
transfer agent, if any.
3.7 Suitability and Investment
Experience. Such Investor is an “accredited investor” as
defined in SEC Rule 501 and has: (a) a pre-existing personal and/or
business relationship with the Corporation, or its officers or directors, such
that Investor is aware of the character, business acumen and general business
and financial circumstances of such persons; and/or (b) such knowledge and
experience in business and financial matters that it is capable of evaluating
the merits and risks of this investment in the Securities and is capable of
protecting its own interests in connection with this investment in the
Securities.
3.8 Access to
Data. Such Investor has had an opportunity to discuss the
Corporation’s business, management and financial affairs with the Corporation’s
management and has received or has had full access to all the information it
considers necessary to make an informed investment decision with respect to the
Securities to be purchased. The Investor understands that such
discussions, as well as any written information issued by the Corporation, were
intended to describe certain aspects of the Corporation’s business and prospects
but were not a thorough or exhaustive description.
3.9 Brokers or
Finders. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Investors, or
their respective agents, in connection with the transactions contemplated by
this Agreement, and no Investor nor any of their respective agents has incurred
any obligation (on behalf of any of the Investors or the Corporation) to pay any
brokerage or finder’s fee or other commission in connection with the
transactions contemplated by this Agreement.
4.Representations, Warranties
and Agreements of the Corporation. As a material inducement to
the Investors to purchase the Securities, the Corporation hereby represents and
warrants to each Investor, and agrees with each Investor, as
follows:
4.1 Authorization;
Enforceability. The Corporation has all requisite power and
authority to enter into this Agreement and to sell and issue the
Securities. This Agreement has been duly executed and delivered by
the Corporation, and constitutes the legal, valid and binding obligations of the
Corporation, enforceable against the Corporation in accordance with its
terms. The Corporation has authorized the issuance of the Securities
and the Note Shares and Warrant Shares issuable thereunder.
4.2 Organization and
Standing. The Corporation is a corporation duly organized and
existing under, and by virtue of, the laws of the State of Utah and is in good
standing under such laws. The Corporation has requisite corporate
power and authority to own and operate its properties and assets and to carry on
its business as presently conducted and proposed to be
conducted.
4.3 Validity of
Securities. The Securities have been duly authorized and, when
issued and paid for in accordance with the terms hereof, will be duly and
validly issued, and free of any liens or encumbrances, other than any liens or
encumbrances created by or imposed upon the holders; provided, however, that the
Securities will be subject to restrictions on transfer under state or federal
securities laws. The Corporation has reserved from its duly
authorized capital stock the number of shares of Common Stock issuable upon
conversion of the Notes and upon exercise of the Warrants, in order to issue the
Note Shares and the Warrant Shares.
4.4 SEC Reports; Financial
Statements. The Corporation has filed all reports, forms or
other information required to be filed by it under the Securities Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 24
months preceding the date hereof (the foregoing materials being collectively
referred to herein as the “SEC
Reports”). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act
and the Exchange Act and the rules and regulations of the SEC promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The
financial statements of the Corporation included in the SEC Reports comply in
all material respects with applicable accounting requirements and the rules and
regulations of the SEC with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with GAAP applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the
Corporation and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end
audit adjustments.
4.5
Material
Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a material adverse effect
on the results of operations, assets, business or condition (financial or
otherwise) of the Corporation or any of its subsidiaries (“Material Adverse
Effect”), (ii) the Corporation has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables, accrued expenses and
other liabilities incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the
Corporation's financial statements pursuant to GAAP or required to be disclosed
in filings made with the SEC, (iii) the Corporation has not altered its method
of accounting or the identity of its auditors, (iv) the Corporation has not
declared or made any dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, (v) the Corporation has not sold any assets,
individually or in the aggregate, in excess of $100,000 outside of the ordinary
course of its business, and (vi) the Corporation has not issued any equity
securities to any officer, director or Affiliate, except pursuant to existing
Corporation stock option plans and consistent with past practice. The
Corporation does not have pending before the SEC any request for confidential
treatment of information.
4.6
Litigation. There
is no action or proceeding pending which (i) adversely affects or challenges the
legality, validity or enforceability of any of this Agreement, or (ii) except as
specifically disclosed in the SEC Reports, would, if there were an unfavorable
decision, individually or in the aggregate, have or reasonably be expected to
result in a Material Adverse Effect. Neither the Corporation nor any
of its subsidiaries, nor any director or officer thereof (in his or her capacity
as such), is or has been the subject of any action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty, except as specifically disclosed in the SEC
Reports. There has not been, and to the knowledge of the Corporation,
there is not pending any investigation by the SEC involving the Corporation or
any current or former director or officer of the Corporation (in his or her
capacity as such). The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the
Corporation or any subsidiary under the Exchange Act or the Securities
Act.
4.7 Brokers or
Finders. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Corporation, or
its agents, in connection with the transactions contemplated by this Agreement,
and neither the Corporation nor any of its agents has incurred any
obligation (on behalf of any of the Investors or the Corporation) to pay any
brokerage or finder’s fee or other commission in connection with the
transactions contemplated by this Agreement.
5
Miscellaneous
Provisions.
5.1 Modification;
Waiver. No modification or waiver of any provision of this
Agreement or consent to departure therefrom shall be effective unless executed
in writing by all of the parties hereto.
5.2 Successors and
Assigns. Except as otherwise stated herein, all covenants and
agreements of the parties contained in this Agreement shall be binding upon and
inure to the benefit of their respective successors and
assigns.
5.3 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, excluding that body of law
pertaining to conflict of laws or choice of law.
5.4 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
5.5 Certain
Definitions. The terms below used herein shall have the
following meanings:
(a)“Common Stock” means
shares of the Corporation’s common stock, no par value per share.
(b)“Notes” means the
convertible promissory notes issuable by the Corporation to the Investors under
this Agreement in the form attached hereto as Exhibit
A.
(c)“Note Shares” means
the Common Stock issuable upon conversion of the Notes, as contemplated in this
Agreement.
(d)“Securities” means,
collectively, the Notes and the Warrants.
(e)“Warrants” means the
common stock purchase warrants issuable by the Corporation to the Investors
under this Agreement in the form attached hereto as Exhibit
B.
(f)“Warrant Shares” means
the Common Stock issuable upon exercise of the Warrants, as contemplated in this
Agreement.
5.6 Entire
Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes any
and all prior agreements or understandings, whether oral or written, with
respect to such subject matter.
[Signature page
follows]
IN WITNESS WHEREOF, the
parties have caused this Agreement to be executed by their duly authorized
representatives effective as of the date and year first above
written.
|
INVESTOR:
By___________________________________
Amount
of Notes:_______________________
Number
of Warrants:_____________________
|
COMPANY:
GLOBAL
CLEAN ENERGY HOLDINGS, INC.
a
Utah corporation
By_/s/ RICHARD
PALMER
Its
President and Chief Executive Officer
|
|
INVESTOR:
By___________________________________
Amount
of Notes:________________________
Number
of Warrants:______________________
|
|
Exhibit
A
Form of
Note
(See
attached)
NEITHER
THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES
HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.
Original
Issue Date: March [ ], 2010
GLOBAL
CLEAN ENERGY HOLDINGS, INC.
SENIOR
UNSECURED CONVERTIBLE PROMISSORY NOTE
THIS NOTE
is one of a series of duly authorized and issued notes of Global Clean Energy
Holdings, Inc., a Utah corporation (the “Company”), designated as its
“Convertible Promissory Notes,” in the original aggregate principal amount of up
to [$_______] (collectively, the “Notes” and each Note
comprising the Notes, a “Note”).
FOR VALUE
RECEIVED, the Company promises to pay to the order of [______________ ] or its
registered assigns (the “Investor”), the principal sum
of [_____] dollars ($[]) (as reduced pursuant to the terms hereof pursuant to
conversion or otherwise) in accordance with the provisions hereof, and to pay
interest to the Investor on the principal amount of this Note outstanding from
time to time in accordance with the provisions hereof. All holders of
Notes are referred to collectively, as the “Investors.” This
Note is subject to the following additional provisions:
1. Definitions. In
addition to the terms defined elsewhere in this Note: (a) capitalized terms that
are used but not otherwise defined herein have the meanings given to such terms
in the Securities Purchase Agreement, dated as of March ___, 2010, among the
Company and the Investors identified therein (the “Purchase Agreement”), and (b)
the following terms have the meanings indicated below:
“Bankruptcy Code” means Title
11 of the United States Code (11 U.S.C. 101 et seq.), as amended from time to
time (including any successor statute) and all rules and regulations promulgated
thereunder.
“Bankruptcy Event” means any
of the following events: (a) the Company commences a case or other
proceeding under any bankruptcy, reorganization, arrangement, adjustment of
debt, relief of debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction relating to the Company; (b) there is commenced against the
Company any such case or proceeding that is not dismissed within 60 days after
commencement; (c) the Company is adjudicated by a court of competent
jurisdiction insolvent or bankrupt or any order of relief or other order
approving any such case or proceeding is entered; (d) the Company suffers any
appointment of any custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 days; (e) under
applicable law the Company makes a general assignment for the benefit of
creditors; (f) the Company fails to pay, or states that it is unable to pay or
is unable to pay, its debts generally as they become due; (g) the Company calls
a meeting of its creditors with a view to arranging a composition, adjustment or
restructuring of its debts; or (h) the Company, by any act or failure to act,
expressly indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of effecting
any of the foregoing.
“Bankruptcy Law” means the
Bankruptcy Code of the United States and all other liquidation, conservatorship,
bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, fraudulent conveyance or transfer, reorganization, or
similar state or Federal debtor relief laws, statutes, rules, regulations,
orders, or ordinances of the United States or other applicable jurisdictions
from time to time in effect and affecting the rights of creditors
generally.
“Common Stock” means the
common stock of the Company, no par value per share, and any securities into
which such common stock may hereafter be reclassified.
“Conversion Date” means the
date a Conversion Notice together with the Note is delivered to the Company in
accordance with Sections 5 and 6.
“Conversion Notice” means a
written notice in the form attached hereto as Exhibit
A.
“Conversion Price” means $0.03
subject to adjustment from time to time pursuant to Section 9.
“Default” means any event or
condition which constitutes an Event of Default or that upon notice, lapse of
time or both would, unless cured or waived, become an Event of Default.
“Event of Default” means any
one of the following events (whatever the reason and whether it shall be
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or regulation of any
administrative or governmental body):
(i) any
default in the payment, when the same becomes due and payable (whether by
acceleration or prepayment or otherwise), of principal under or interest in
respect of this Note.
(ii) the
occurrence and continuance of an Event of Default under any other
Note.
(iii) any
of the Company’s representations and warranties set forth in the Purchase
Agreement shall be incorrect in any material respect as of the date made or as
of the Original Issue Date.
(iv) the
occurrence of a Bankruptcy Event.
(v) one
or more judgments for the payment of money in an aggregate amount in excess of
$100,000 shall be rendered against the Company (which shall not be fully covered
by insurance without taking into account any applicable deductibles) and which
shall remain undischarged or unbonded for a period of 30 consecutive days during
which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the Company to
enforce any such judgment.
(vi) the
Company fails to deliver a stock certificate evidencing Underlying Shares to an
Investor within five Trading Days after a Conversion Date or in the case of
exercises under a Warrant, within five Trading days after a Date of Exercise
under, and as such term is defined in, such Warrant, or the conversion or
exercise rights of the Investors pursuant to the terms hereof or the terms of
the Warrants are otherwise suspended for any reason.
(vii) the
Company fails to have available a sufficient number of authorized but unissued
and otherwise unreserved shares of Common Stock available to issue Underlying
Shares upon conversion in full of all Notes or issue Warrant Shares upon
exercise in full of all Warrants.
“Indebtedness” of any Person
shall mean, without duplication, (a) all obligations of such Person for borrowed
money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services (other than unsecured accounts
payable incurred in the ordinary course of business and no more than ninety (90)
days past the date of the invoice therefor), and (e) all Indebtedness secured by
any Lien on property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed.
“Original Issue Date” has the
meaning set forth on the face of this Note.
“Person” means an individual
or corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or subdivision thereof) or other entity of any kind.
“Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.
“Trading Day” means (i) a
Business Day on which the Common Stock is listed or quoted on a Trading Market
(other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed
or quoted on a Trading Market (other than the OTC Bulletin Board), a Business
Day on which the Common Stock is traded in the over-the-counter market, as
reported by the OTC Bulletin Board, or (iii) if the Common Stock is not listed
or quoted on any Trading Market, a Business Day on which the Common Stock is
quoted in the over-the-counter market as reported by the Pink Sheets LLC (or any
similar organization or agency succeeding to its functions of reporting prices);
provided, that in the event that the Common Stock is not listed or quoted as set
forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business
Day.
“Trading Market” means
whichever of the New York Stock Exchange, the NYSE Amex Equities, the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC
Bulletin Board on which the Common Stock is listed or quoted for trading on the
date in question.
“Transaction Documents” means
this Note, the Purchase Agreement and the Warrants.
“Underlying Shares” means the
shares of Common Stock issuable upon conversion of the Notes and payment of
interest thereunder.
“VWAP” means, with respect to
any date of determination, the daily volume weighted average price (as reported
by Bloomberg using the VAP function) of the Common Stock on such date of
determination, or if there is no such price on such date of determination, then
the daily volume weighted average price on the date nearest preceding Trading
Day.
“Warrants” means the common
stock purchase warrants that are issuable to the Investors under the Purchase
Agreement concurrently with the issuance of this Note.
2. Principal and
Interest.
(a) Maturity
Date. Subject to Section 5 hereof, this Note is due and
payable (a) on March 16, 2012 (the “Maturity Date”); provided,
however, that the Maturity Date may be extended by written notice, made by the
holders of all of the then outstanding Notes at any time prior to the Maturity
Date, or (b) on demand by written notice following an Event of
Default. Subject to any prior conversions pursuant to Section 5
hereof, the Company shall, on the Maturity Date or, if earlier, pay the
outstanding principal and all accrued and unpaid interest on this Note as of the
Maturity Date.
(b) Interest. The
Company shall pay interest to the Investor on the aggregate unconverted and then
outstanding principal amount of this Note at the rate of 5.971% per annum, payable quarterly in cash, in arrears on each
three month anniversary of the Original Issue Date (each, an “Interest Payment Date”),
except if such date is not a Trading Day, in which case such interest shall be
payable on the next succeeding Trading Day. Interest shall be
calculated on the basis of a 365-day year for the actual number of days elapsed
and shall accrue daily commencing on the Original Issue Date. In lieu
of paying interest in cash the Company may, at its option, on each Interest
Payment Date, pay accrued interest on this Note by delivering a number of
unregistered shares of Common Stock equal to the quotient obtained by dividing
the amount of such interest by the arithmetic average of the VWAP for each of
the five consecutive Trading Days immediately preceding (but not including) such
Interest Payment Date. Interest payable in respect of the Notes on any
Interest Payment Date must be paid in the same manner to all
Investors.
1 A number
equal to like term Treasuries + 5%
3. Registration of
Notes. The Company shall register the Notes upon records
maintained by the Company for that purpose (the “Note Register”) in the name
of each record Investor thereof from time to time. The Company may deem and
treat the registered Investor of this Note as the absolute owner hereof for the
purpose of any conversion hereof or any payment of interest hereon, and for all
other purposes, absent actual notice to the contrary from such record
Investor.
4. Registration of Transfers
and Exchanges. The Company shall register the transfer of any
portion of this Note in the Note Register upon surrender of this Note to the
Company at its address for notice set forth herein. Upon any such registration
or transfer, a new Note, in substantially the form of this Note (any such new
debenture, a “New
Note”), evidencing the portion of this Note so transferred shall be
issued to the transferee and a New Note evidencing the remaining portion of this
Note not so transferred, if any, shall be issued to the transferring Investor.
The acceptance of the New Note by the transferee thereof shall be deemed the
acceptance by such transferee of all of the rights and obligations of a holder
of a Note. Notwithstanding the foregoing, the Company shall not be required to
consent to any transfer of this Note, or any portion of this Note, unless the
Company shall receive reasonable assurance, including an opinion of counsel
reasonably acceptable to the Company, that such transfer complies with
applicable federal and state securities laws.
5. Conversion. All
or any portion of the principal amount of this Note then outstanding together
with any accrued and unpaid interest hereunder shall be convertible into shares
of Common Stock at the Conversion Price, at the option of the Investor, at any
time and from time to time from and after the first anniversary of the Original
Issue Date. The Investor may effect conversions under this Section 5
by delivering to the Company a Conversion Notice together with the originally
executed Note. If the Investor is converting less than all of the principal
amount represented by this Note, the Company shall honor such conversion and
shall promptly deliver to the Investor a new Note in the principal amount of
this Note which has not been converted.
6. Mechanics of
Conversion.
(a) The
number of Underlying Shares issuable upon any conversion hereunder shall equal
the outstanding principal amount of this Note to be converted, divided by the
Conversion Price on the Conversion Date, plus (if indicated in the applicable
Conversion Notice) the amount of any accrued but unpaid interest on this Note
through the Conversion Date, divided by the Conversion Price on the Conversion
Date.
(b) The
Company shall, by the third Trading Day following each Conversion Date, issue or
cause to be issued and cause to be delivered to or upon the written order of the
Investor and in such name or names as the Investor may designate a certificate
for the Underlying Shares issuable upon such conversion, free of restrictive
legends if at such time such Underlying Shares are eligible to be issued without
any restrictive legends under Rule 144. The Investor shall be deemed
to have become holder of record of such Underlying Shares as of such Conversion
Date.
(c) The
Investor shall be required to deliver the original Note to the Company in order
to effect a conversion hereunder.
(d) Issuance
of certificates for Underlying Shares upon conversion of (or otherwise in
respect of) this Note shall be made without charge to the Investor for any issue
or transfer tax, withholding tax, transfer agent fee or other incidental tax or
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company.
7. Ranking. This
Note ranks senior to all Indebtedness of the Company outstanding as of the date
of the Original Issue Date. After the Original Issue Date, this Note
shall remain senior to, or pari passu with, all accounts payable and other
similar liabilities incurred by the Company in the ordinary course of
business.
8. Reservation of Underlying
Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, solely for the purpose of enabling it to
issue Underlying Shares as required hereunder, the number of Underlying Shares
which are then issuable and deliverable upon the conversion of this entire Note
(taking into account the adjustments of Section 9), free from preemptive rights
or any other contingent purchase rights of persons other than the Investor. The
Company covenants that all Underlying Shares so issuable and deliverable shall,
upon issuance in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
9. Certain
Adjustments. The Conversion Price is subject to adjustment
from time to time as set forth in this Section 9.
(a) Stock Dividends and
Splits. If the Company, at any time while this Note is
outstanding: (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the
denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause
(i) of this paragraph shall become effective immediately after the record date
for the determination of shareholders entitled to receive such dividend or
distribution, and any adjustment pursuant to clause (ii) or (iii) of this
paragraph shall become effective immediately after the effective date of such
subdivision or combination.
(b) Pro Rata
Distributions. If the Company, at any time while this Note is
outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by the preceding paragraph), (iii) rights or warrants to subscribe for
or purchase any security, or (iv) any other asset (in each case, “Distributed Property”), then
upon any conversion of this Note that occurs after such record date, the
Investor shall be entitled to receive, in addition to the Underlying Shares
otherwise issuable upon such conversion, the Distributed Property that the
Investor would have been entitled to receive in respect of such number of
Underlying Shares had the Investor been the record holder of such Underlying
Shares immediately prior to such record date.
(c) Fundamental
Transactions. If, at any time while this Note is outstanding,
(i) the Company effects any merger or consolidation of the Company with or into
another Person, (ii) the Company effects any sale of all or substantially all of
its assets in one or a series of related transactions, (iii) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock tender or exchange their shares for other
securities, cash or property, (iv) the Company effects any reclassification of
the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or
property (other than as a result of a subdivision or combination of shares of
Common Stock covered by Section 9(a) above), or (v) the Company engages in any
type of going-private transaction (in any such case, a “Fundamental Transaction”),
then upon any subsequent conversion of this Note, the Investor shall have the
right to: (x) declare an Event of Default pursuant to clause (iii) thereunder,
(y) receive, for each Underlying Share that would have been issuable upon such
conversion absent such Fundamental Transaction, the same kind and amount 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 one share of Common Stock (the “Alternate Consideration”) or
(z) require the surviving entity to issue to the Investor an instrument
identical to this Note (with an appropriate adjustments to the conversion
price). For purposes of any such conversion, the Company shall apportion the
Conversion 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 Investor shall be given the same choice as to the Alternate Consideration it
receives upon any conversion of this Note following such Fundamental
Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction (or, if different, the ultimate parent of such successor or entity
or the entity issuing the Alternate Consideration) shall issue to the Investor a
new debenture consistent with the foregoing provisions and evidencing the
Investor's right to convert such debenture into Alternate Consideration. 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 (c) and insuring that this Note (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.
(d) Reclassifications; Share
Exchanges. In case of any reclassification of the Common
Stock, or any compulsory share exchange pursuant to which the Common Stock is
converted into other securities, cash or property (other than compulsory share
exchanges which constitute a Fundamental Transaction), the Investors of the
Notes then outstanding shall have the right thereafter to convert such shares
only into the shares of stock and other securities, cash and property receivable
upon or deemed to be held by holders of Common Stock following such
reclassification or share exchange, and the Investors shall be entitled upon
such event to receive such amount of securities, cash or property as a holder of
the number of shares of Common Stock of the Company into which such shares of
Notes could have been converted immediately prior to such reclassification or
share exchange would have been entitled. This provision shall similarly apply to
successive reclassifications or share exchanges.
(e) Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
(f) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant
to this Section 9, the Company at its expense will promptly compute such
adjustment in accordance with the terms hereof and prepare a certificate
describing in reasonable detail such adjustment and the transactions giving rise
thereto, including all facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Investor.
(g) Notice of Corporate
Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company, (ii) authorizes and
publicly approves, or enters into any agreement contemplating or solicits
shareholder approval for any Fundamental Transaction or (iii) publicly
authorizes the voluntary dissolution, liquidation or winding up of the affairs
of the Company, then the Company shall deliver to the Investor a notice
describing the material terms and conditions of such transaction, at least 10
calendar days prior to the applicable record or effective date on which a Person
would need to hold Common Stock in order to participate in or vote with respect
to such transaction, and the Company will take all steps reasonably necessary in
order to insure that the Investor is given the practical opportunity to convert
this Note prior to such time so as to participate in or vote with respect to
such transaction; provided, however, that the failure to deliver such notice or
any defect therein shall not affect the validity of the corporate action
required to be described in such notice.
10. Fractional
Shares. The Company shall not be required to issue or cause to
be issued fractional Underlying Shares on conversion of this Note. If any
fraction of an Underlying Share would, except for the provisions of this
Section, be issuable upon conversion of this Note or payment of interest hereon,
the number of Underlying Shares to be issued will be rounded up to the nearest
whole share.
11. No
Prepayment. This Note may not be prepaid without the consent
of the Investor.
12. Notices. Any
and all notices or other communications or deliveries hereunder (including
without limitation any Conversion Notice) shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified in this Section prior to 5:30 p.m. (New York City time) on a Trading
Day, (ii) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number specified in
this Section on a day that is not a Trading Day or later than 5:30 p.m. (New
York City time) on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.
The addresses for such communications shall be: (i) if to the Company, to 6033
W. Century Boulevard, #895, Los Angeles, CA 90045, facsimile: (310) 641-4300,
attention: Chief Financial Officer, (ii) if to the Investor, to the address or
facsimile number appearing on the Company's shareholder records or such other
address or facsimile number as the Investor may provide to the Company in
accordance with this Section.
13. Reissuance of
Note.
(a) Transfer. If
this Note is to be transferred, the Investor shall surrender this Note to the
Company, whereupon the Company will, subject to the satisfaction of the transfer
provisions of the Purchase Agreement, forthwith issue and deliver upon the order
of the Investor a new Note to the Investor representing the outstanding
principal not being transferred.
(b) Lost, Stolen or Mutilated
Note. Upon receipt by the Company of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Note, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the Investor to the Company in customary form
and, in the case of mutilation, upon surrender and cancellation of this Note,
the Company shall execute and deliver to the Investor a new Note representing
the outstanding principal.
(c) Issuance of New
Notes. Whenever the Company is required to issue a new Note
pursuant to the terms of this Note, such new Note (i) shall be of like tenor
with this Note, (ii) shall represent, as indicated on the face of such new Note,
the principal remaining outstanding, (iii) shall have an issuance date, as
indicated on the face of such new Note, which is the same as the Original Issue
Date of this Note, (iv) shall have the same rights and conditions as this Note,
and (v) shall represent accrued and unpaid interest and late charges on the
principal and interest of this Note, from the Original Issue Date.
14. Miscellaneous.
(a) This
Note shall be binding on and inure to the benefit of the parties hereto and
their respective successors and assigns.
(b) Nothing
in this Note shall be construed to give to any person or corporation other than
the Company and the Investor any legal or equitable right, remedy or cause under
this Note. This Note shall inure to the sole and exclusive benefit of the
Company and the Investor.
(c) All
questions concerning the construction, validity, enforcement and interpretation
of this Note shall be governed by and construed and enforced in accordance with
the internal laws of the State of California, without regard to the principles
of conflicts of law thereof. Each party agrees that all Proceedings
shall be commenced exclusively in the state and federal courts sitting in the
City of Los Angeles (the “California
Courts”). Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the California Courts for any Proceeding, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim that
it is not personally subject to the jurisdiction of any California Court or that
a California Court is an inconvenient forum for such Proceeding. Each
party hereto hereby irrevocably waives personal service of process and consents
to process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Note 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. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal Proceeding. The prevailing party in a Proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such Proceeding.
(d) The
headings herein are for convenience only, do not constitute a part of this Note
and shall not be deemed to limit or affect any of the provisions
hereof.
(e) In
case any one or more of the provisions of this Note shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Note shall not in any way be affected or impaired
thereby and the parties will attempt in good faith to agree upon a valid and
enforceable provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute provision in
this Note.
(f) No
provision of this Note may be waived or amended except in a written instrument
signed, in the case of an amendment, by the Company and the Investor or, in the
case of a waiver, by the party against whom enforcement of any such waiver is
sought. No waiver of any default with respect to any provision, condition or
requirement of this Note shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right.
(g) To
the extent it may lawfully do so, the Company hereby agrees not to insist upon
or plead or in any manner whatsoever claim, and will resist any and all efforts
to be compelled to take the benefit or advantage of, usury laws wherever
enacted, now or at any time hereafter in force, in connection with any claim,
action or Proceeding that may be brought by any Investor in order to enforce any
right or remedy under the Notes. Notwithstanding any provision to the contrary
contained in the Notes, it is expressly agreed and provided that the total
liability of the Company under the Notes for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the
“Maximum Rate”), and,
without limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the Notes
exceed such Maximum Rate. It is agreed that if the maximum contract rate of
interest allowed by law and applicable to the Notes is increased or decreased by
statute or any official governmental action subsequent to the date hereof, the
new maximum contract rate of interest allowed by law will be the Maximum Rate of
interest applicable to the Notes from the effective date forward, unless such
application is precluded by applicable law. If under any circumstances
whatsoever, interest in excess of the Maximum Rate is paid by the Company to any
Investor with respect to indebtedness evidenced by the Notes, such excess shall
be applied by such Investor to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling such excess
to be at such Investor’s election.
(h) Whenever
any payment of cash is to be made by the Company to any Person pursuant to this
Note, such payment shall be made in lawful money of the United States of America
by a check drawn on the account of the Company and sent via overnight courier
service to such Person at such address as previously provided to the Company in
writing; provided that the Investor may elect to receive a payment of cash via
wire transfer of immediately available funds by providing the Company with prior
written notice setting out such request and the Investor's wire transfer
instructions. Whenever any amount expressed to be due by the terms of
this Note is due on any day which is not a Business Day and, in the case of any
Interest Payment Date which is not the date on which this Note is paid in full,
the same shall instead be due on the next succeeding day which is a Business
Day. Any amount of principal or other amounts due under the
Transaction Documents, other than interest, which is not paid when due shall
result in a late charge being incurred and payable by the Company in an amount
equal to interest on such amount at the rate of ten percent (10%) per annum from
the date such amount was due until the same is paid in full.
(i) The
remedies provided in this Note shall be cumulative and in addition to all other
remedies available under this Note and any of 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 Investor's right to
pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Note. Amounts set forth or provided for herein
with respect to payments, conversion and the like (and the computation thereof)
shall be the amounts to be received by the Investor and shall not, except as
expressly provided herein, be subject to any other obligation of the Company (or
the performance thereof). The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the Investor 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 Investor 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.
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly
authorized officer as of the date first above indicated.
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GLOBAL CLEAN
ENERGY HOLDINGS, INC. |
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By:
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Name:
Richard Palmer
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Title:
President and Chief Executive Officer
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Exhibit
B
Form of
Warrant
(See
attached)
THIS
WARRANT AND THE SECURITIES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND ANY APPLICABLE STATE
SECURITIES LAWS OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER SUCH
ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
WARRANT
TO PURCHASE COMMON STOCK
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Number
of Shares:
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Up
to _______ (subject to adjustment)
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Warrant
Price:
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$
0.03 per share
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Issuance
Date:
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March
___, 2010
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Expiration
Date:
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March
____, 2013 [3 Years]
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THIS WARRANT CERTIFIES
THAT for value received, ________________________ or its registered
assigns (hereinafter called the “Holder”)
is entitled to purchase from Global Clean Energy Holdings, Inc., a Utah
corporation (hereinafter called the “Company”),
the above referenced number of fully paid and nonassessable shares (the
“Shares”)
of common stock, no par value (the “Common
Stock”) of Company, at the Warrant Price per Share referenced
above; the number of shares purchasable upon exercise of this Warrant
referenced above being subject to adjustment from time to time as
described herein. The exercise of this Warrant shall be subject to the
provisions, limitations and restrictions contained herein.
1. Term and
Exercise.
1.1 Term. This
Warrant is exercisable in whole or in part (but not as to any fractional
share of Common Stock), at any time and from time to time after the date
hereof prior to 6:00 p.m. on the Expiration Date set forth
above.
1.2 Warrant
Price. The Warrant
shall be exercisable at the Warrant Price described above.
1.3 Maximum
Number of Shares. The maximum number of
Shares of Common Stock exercisable pursuant to this Warrant is _________
Shares.
1.4 Procedure
for Exercise of Warrant. Holder may exercise this
Warrant by delivering the following to the principal office of the Company
in accordance with Section 5.1 hereof: (i) a duly executed
Notice of Exercise in substantially the form attached as Schedule A,
(ii) payment of the Warrant Price then in effect for each of the
Shares being purchased, as designated in the Notice of Exercise, and (iii)
this Warrant. Payment of the Warrant Price may be in cash,
certified or official bank check payable to the order of the Company, wire
transfer of funds to the Company’s account (or any combination of any of
the foregoing) in the amount of the Warrant Price for each share being
purchased.
1.5 Delivery
of Certificate and New Warrant. In the event of any
exercise of the rights represented by this Warrant, a certificate or
certificates for the shares of Common Stock so purchased, registered in
the name of the Holder or such other name or names as may be designated by
the Holder, together with any other securities or other property which the
Holder is entitled to receive upon exercise of this Warrant, shall be
delivered to the Holder hereof, at the Company’s expense, within a
reasonable time, not exceeding seven (7) calendar days, after the rights
represented by this Warrant shall have been so exercised; and, unless this
Warrant has expired, a new Warrant representing the number of Shares
(except a remaining fractional share), if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the
Holder hereof within such time. The person in whose name any
certificate for shares of Common Stock is issued upon exercise of this
Warrant 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 received by the Company, irrespective of
the date of delivery of such certificate, except that, if the date of such
surrender and payment is on a date when the stock transfer books of the
Company are closed, such person shall be deemed to
have become the holder of such Shares at the close of business on the next
succeeding date on which the stock transfer books are open.
1.6 Restrictive
Legend. Each certificate for Shares shall bear a
restrictive legend in substantially the form as follows, together with any
additional legend required by (i) any applicable state securities
laws and (ii) any securities exchange upon which such Shares may, at
the time of such exercise, be listed:
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“The shares of stock evidenced by
this certificate have not been registered under the Securities Act of
1933, as amended, and may not be offered, sold, pledged or otherwise
transferred ("transferred") in the absence of such registration or an
applicable exemption therefrom. In the absence of such registration, such
shares may not be transferred unless, if the Company requests, the Company
has received a written opinion from counsel in form and substance
satisfactory to the Company stating that such transfer is being made in
compliance with all applicable federal and state securities
laws.”
Any
certificate issued at any time in exchange or substitution for any
certificate bearing such legend shall also bear such legend unless, in the
opinion of counsel for the Holder thereof (which counsel shall be
reasonably satisfactory to the Company), the securities represented
thereby are not, at such time, required by law to bear such
legend.
1.7 Fractional
Shares. No fractional Shares shall be issuable upon
exercise or conversion of the Warrant and the number of Shares to be
issued shall be rounded up to the nearest whole Share. If a
fractional share interest arises upon any exercise or conversion of the
Warrant, the Company shall eliminate such fractional share interest by
paying to Holder an amount computed by multiplying the fractional interest
by the Warrant Price of a full Share then in effect.
2. Ownership and
Transfer.
2.1 Ownership
of This Warrant. The Company may deem and treat the
person in whose name this Warrant is registered as the holder and owner
hereof (notwithstanding any notations of ownership or writing hereon made
by anyone other than the Company) for all purposes and shall not be
affected by any notice to the contrary until presentation of this Warrant
for registration of transfer as provided in this Section 4.
2.2 Transfer
and Replacement. This Warrant and all rights hereunder are
transferable in whole or in part upon the books of the Company by the
Holder hereof in person or by duly authorized attorney, and a new Warrant
or Warrants, of the same tenor as this Warrant but registered in the name
of the transferee or transferees (and in the name of the Holder, if a
partial transfer is effected) shall be made and delivered by the Company
upon surrender of this Warrant duly endorsed, at the office of the Company
in accordance with Section 5.1 hereof. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft or
destruction, and, in such case, of indemnity or security reasonably
satisfactory to it, and upon surrender of this Warrant if mutilated, the
Company will make and deliver a new Warrant of like tenor, in lieu of this
Warrant; provided that if the Holder hereof is an instrumentality of a
state or local government or an institutional holder or a nominee for such
an instrumentality or institutional holder an irrevocable agreement of
indemnity by such Holder shall be sufficient for all purposes of this
Warrant, and no evidence of loss or theft or destruction shall be
necessary. This Warrant shall be promptly cancelled by the
Company upon the surrender hereof in connection with any transfer or
replacement. Except as otherwise provided above, in the case of
the loss, theft or destruction of a Warrant, the Company shall pay all
expenses, taxes and other charges payable in connection with any transfer
or replacement of this Warrant, other than income taxes and stock transfer
taxes (if any) payable in connection with a transfer of this Warrant,
which shall be payable by the Holder. Holder will not transfer
this Warrant and the rights hereunder except in compliance with federal
and state securities laws and except after providing evidence of such
compliance reasonably satisfactory to the
Company.
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3. Issuance
of Shares. The Company covenants and agrees that all
shares of Common Stock 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, liens and charges with
respect to the issue thereof. The Company further covenants and
agrees that it will pay when due and payable any and all federal and state
taxes which may be payable in respect of the issue of this Warrant or any
Common Stock or certificates therefore issuable upon the exercise of this
Warrant excluding the Holder's income and other taxes not directly
relating to the issuance of the Warrant or Common Stock. The
Company further covenants and agrees that the Company will at all times
have authorized and reserved, free from preemptive rights, a sufficient
number of shares of Common Stock to provide for the exercise in full of
the rights represented by this Warrant. If at any time the
number of authorized but unissued shares of Common Stock of the Company
shall not be sufficient to effect the exercise of the Warrant in full,
then the Company will take all such corporate action as may, in the
opinion of counsel to the Company, be necessary or advisable to increase
the number of its authorized shares of Common Stock as shall be sufficient
to permit the exercise of the Warrant in full, including without
limitation, using its best efforts to obtain any necessary stockholder
approval of such increase. The Company further covenants and
agrees that if any shares of capital stock to be reserved for the purpose
of the issuance of shares upon the exercise of this Warrant require
registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued or delivered
upon exercise, then the Company will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the case may
be.
4. Other
Adjustments.
4.1 Subdivision
or Combination of Shares. In case the Company shall at
any time subdivide its outstanding Common Stock into a greater number of
shares, the Warrant Price in effect immediately prior to such subdivision
shall be proportionately reduced, and the number of Shares subject to this
Warrant shall be proportionately increased, and conversely, in case the
outstanding Common Stock of the Company shall be combined into a smaller
number of shares, the Warrant Price in effect immediately prior to such
combination shall be proportionately increased, and the number of Shares
subject to this Warrant shall be proportionately decreased.
4.2 Dividends
in Common Stock, Other Stock or Property. If at any time
or from time to time the holders of Common Stock (or any shares of stock
or other securities at the time receivable upon the exercise of this
Warrant) shall have received or become entitled to receive, without
payment therefore:
(a) Common
Stock, options or any shares or other securities which are at any time
directly or indirectly convertible into or exchangeable for Common Stock,
or any rights or options to subscribe for, purchase or otherwise acquire
any of the foregoing by way of dividend or other
distribution;
(b) any
cash paid or payable otherwise than as a regular cash dividend;
or
(c) Common
Stock or additional shares or other securities or property (including
cash) by way of spin-off, split-up, reclassification, combination of
shares or similar corporate rearrangement (other than Common Stock issued
as a stock split or adjustments in respect of which shall be covered by
the terms of Section 4.1 above) or additional shares, other securities or
property issued in connection with a Change (as defined below) (which
shall be covered by the terms of Section 4.3 below), then and in each such
case, the Holder hereof shall, upon the exercise of this Warrant, be
entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefore, the amount of stock and other securities and property
(including cash in the cases referred to in clause (b) above and this
clause (c)) which such Holder would hold on the date of such exercise had
such Holder been the holder of record of such Common Stock as of the date
on which holders of Common Stock received or became entitled to receive
such shares or all other additional stock and other securities and
property.
4.3 Reorganization,
Reclassification, Consolidation, Merger or Sale. If any
recapitalization, reclassification or reorganization of the share capital
of the Company, or any consolidation or merger of the Company with another
corporation, or the sale of all or substantially all of its shares and/or
assets or other transaction (including, without limitation, a sale of
substantially all of its assets followed by a liquidation) shall be
effected in such a way that holders of Common Stock shall be entitled to
receive shares, securities or other assets or property (a “Change”),
then, as a condition of such Change, lawful and adequate provisions shall
be made by the Company whereby the Holder hereof shall thereafter have the
right to purchase and receive (in lieu of the Common Stock of the Company
immediately theretofore purchasable and receivable upon the exercise of
the rights represented hereby) such shares, securities or other assets or
property as may be issued or payable with respect to or in exchange for
the number of outstanding Common Stock which such Holder would have been
entitled to receive had such Holder exercised this Warrant immediately
prior to the consummation of such Change. The Company or its
successor shall promptly issue to Holder a new Warrant for such new
securities or other property. The new Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to
give effect to the adjustments provided for in this Section 4 including,
without limitation, adjustments to the Warrant Price and to the number of
securities or property issuable upon exercise of the new
Warrant. The provisions of this Section 4.3 shall similarly
apply to successive Changes.
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5. Miscellaneous
Provisions.
5.1 Notices.
Any notice or other document required or permitted to be given or
delivered to the Holder shall be delivered or forwarded to the Holder at
____________________________________ or to such other address or number as
shall have been furnished to the Company in writing by the
Holder. Any notice or other document required or permitted to
be given or delivered to the Company shall be delivered or forwarded to
the Company at Global Clean Energy Holdings, Inc. 6033 W. Century Blvd.,
#895 Los Angeles, CA 90045 (Facsimile No. 310/641-4230), or to such other
address or number as shall have been furnished to Holder in writing by the
Company or to the Company by Holder, with copy to Troy Gould PC, 1801
Century Park East, Suite 1600, Los Angeles, CA 90067,
Attention: Istvan Benko, Esq. (Facsimile No.
310/789-1426).
5.2 All
notices, requests and approvals required by this Warrant shall be in
writing and shall be conclusively deemed to be given (i) when
hand-delivered to the other party, (ii) when received if sent by facsimile
at the address and number set forth above; provided that notices given by
facsimile shall not be effective, unless either (a) a duplicate copy of
such facsimile notice is promptly given by depositing the same in the
mail, postage prepaid and addressed to the party as set forth below or (b)
the receiving party delivers a written confirmation of receipt for such
notice by any other method permitted under this paragraph; and further
provided that any notice given by facsimile received after 5:00 p.m.
(recipient’s time) or on a non-business day shall be deemed received on
the next business day; (iii) five (5) business days after deposit in the
United States mail, certified, return receipt requested, postage prepaid,
and addressed to the party as set forth below; or (iv) the next business
day after deposit with an international overnight delivery service,
postage prepaid, addressed to the party as set forth below with next
business day delivery guaranteed; provided that the sending party receives
confirmation of delivery from the delivery service provider.
5.3 No
Rights as Shareholder; Limitation of Liability. This
Warrant shall not entitle the Holder to any of the rights of a shareholder
of the Company except upon exercise in accordance with the terms
hereof. No provision hereof, in the absence of affirmative
action by the Holder to purchase shares of Common Stock, and no mere
enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the Holder for the Warrant Price hereunder or as
a shareholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
5.4 Governing
Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California as applied to
agreements among California residents made and to be performed entirely
within the State of California, without giving effect to the conflict of
law principles thereof.
5.5 Binding
Effect on Successors. This Warrant shall be binding upon
any corporation succeeding the Company by merger, consolidation or
acquisition of all or substantially all of the Company’s assets and/or
securities. All of the obligations of the Company relating to
the Shares issuable upon the exercise of this Warrant shall survive the
exercise and termination of this Warrant. All of the covenants
and agreements of the Company shall inure to the benefit of the successors
and assigns of the Holder.
5.6 Waiver,
Amendments and Headings. This Warrant and any provision
hereof may be changed, waived, discharged or terminated only by an
instrument in writing signed by both parties (either generally or in
a particular instance and either retroactively or
prospectively). The headings in this Warrant are for purposes
of reference only and shall not affect the meaning or construction of any
of the provisions hereof.
5.7 Jurisdiction.
Each of the parties irrevocably agrees that any and all suits or
proceedings based on or arising under this Agreement may be brought only
in and shall be resolved in the federal or state courts located in the
City of Los Angeles, California and consents to the jurisdiction of such
courts for such purpose. Each of the parties irrevocably waives
the defense of an inconvenient forum to the maintenance of such suit or
proceeding in any such court. Each of the parties further
agrees that service of process upon such party mailed by first class mail
to the address set forth in Section 5.1 shall be deemed in every respect
effective service of process upon such party in any such suit or
proceeding. Nothing herein shall affect the right of a Holder
to serve process in any other manner permitted by law. Each of
the parties agrees that a final non-appealable judgment in any such suit
or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on such judgment or in any other lawful
manner.
5.8 Attorneys'
Fees and Disbursements. If any action at law or in
equity is necessary to enforce or interpret the terms of this Agreement,
the prevailing party or parties shall be entitled to receive from the
other party or parties reasonable attorneys’ fees and disbursements in
addition to any other relief to which the prevailing party or parties may
be entitled.
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IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed by its duly authorized officer this
____ day of March 2010.
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COMPANY:
_________________________________
By ___________________________________________________
Print
Name:_____________________________________
Title:
___________________________________________
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GLOBAL
CLEAN ENERGY HOLDINGS, INC.
By
____________________________
Print
Name: Richard Palmer
Title:
Chief Executive Officer
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SCHEDULE
A
FORM
OF NOTICE OF EXERCISE
[To
be signed only upon exercise of the Warrant]
TO
BE EXECUTED BY THE REGISTERED HOLDER
TO
EXERCISE THE WITHIN WARRANT
The
undersigned hereby elects to purchase _______ shares of Common Stock (the
“Shares”) of Global Clean Energy Holdings, Inc. under the Warrant to Purchase
Common Stock dated __________, 2010, which the undersigned is entitled to
purchase pursuant to the terms of such Warrant, and the undersigned has
delivered $_______, the aggregate Warrant Price for _____ Shares purchased
herewith, in full in cash or by certified or official bank check or wire
transfer.
Please
issue a certificate or certificates representing such shares of Common Stock in
the name of the undersigned or in such other name as is specified below and in
the denominations as is set forth below:
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[Type Name of Holder as it should appear on the
stock certificate] |
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[Requested
Denominations – if no denomination is specified, a single certificate will
be issued]
The
initial address of such Holder to be entered on the books of Company shall
be:
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The
undersigned hereby represents and warrants that the undersigned is acquiring
such shares for his own account for investment purposes only, and not for resale
or with a view to distribution of such shares or any part
thereof.
By:
Print
Name:
Title:
Dated:
FORM
OF ASSIGNMENT
(ENTIRE)
[To
be signed only upon transfer of entire Warrant]
TO
BE EXECUTED BY THE REGISTERED HOLDER
TO
TRANSFER THE WITHIN WARRANT
FOR VALUE RECEIVED
___________________________ hereby sells, assigns and transfers unto
_______________________________ all rights of the undersigned under and pursuant
to the within Warrant, and the undersigned does hereby irrevocably constitute
and appoint _____________________ Attorney to transfer the said Warrant on the
books of ________ _________, with full power of substitution.
[Type
Name of Holder]
By:
Title:
Dated:
NOTICE
The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.
FORM
OF ASSIGNMENT
(PARTIAL)
[To
be signed only upon partial transfer of Warrant]
TO
BE EXECUTED BY THE REGISTERED HOLDER
TO
TRANSFER THE WITHIN WARRANT
FOR
VALUE RECEIVED ___________________________ hereby sells, assigns and transfers
unto ____________________________ (i) the rights of the undersigned to
purchase ____________________ shares of Common Stock under and pursuant to the
within Warrant, and (ii) on a non-exclusive basis, all other rights of the
undersigned under and pursuant to the within Warrant, it being understood that
the undersigned shall retain, severally (and not jointly) with the transferee(s)
named herein, all rights assigned on such non-exclusive basis. The
undersigned does hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said Warrant on the books of
Global Clean Energy Holdings, Inc., with full power of
substitution.
[Type
Name of Holder]
By:
Title:
Dated:
NOTICE
The
signature to the foregoing Assignment must correspond exactly to the name as
written upon the face of the within Warrant, without alteration or enlargement
or any change whatsoever.
EXHIBIT
A
CONVERSION
NOTICE
(To
be Executed by the Registered Investor
in order
to convert Notes)
The
undersigned hereby elects to convert the principal amount of Note indicated
below, into shares of Common Stock of Global Clean Energy Holdings, Inc., as of
the date written below. If shares are to be issued in the name of a Person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Company in accordance therewith. No fee will be
charged to the Investor for any conversion, except for such transfer taxes, if
any. All terms used in this notice shall have the meanings set forth in the
Note.
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Date
to Effect Conversion
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Principal
amount of Note owned prior to
conversion
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Principal
amount of Note to be Converted
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Principal
amount of Note remaining after
Conversion
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Number
of shares of Common Stock to be
Issued
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Applicable
Conversion Price
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13