Unassociated Document


     

    Exhibit
10.6

    


    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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), 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, THE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

    


    
      	 
      	
              Right
      to Purchase ________ shares of Common Stock of Clear Skies Solar, Inc.
      (subject to adjustment as provided
herein)

            


    

    


    FORM
OF COMMON STOCK PURCHASE WARRANT

    
      
        	
                No.
      _____  

              	
                Issue
      Date: May
      ___,
      2009

              


      

    

     

    CLEAR
SKIES SOLAR, INC., a corporation organized under the laws of the State of
Delaware (the “Company”), hereby certifies
that, for value received, _________ or its assigns (the “Holder”), is entitled, subject
to the terms set forth below, to purchase from the Company at any time after the
Issue Date until 5:00 p.m., E.S.T on the third anniversary of the Issue Date
(the “Expiration Date”),
up to ______ fully paid and non-assessable shares of Common Stock at a per share
purchase price of $0.15.  The aforedescribed purchase price per share,
as adjusted from time to time as herein provided, is referred to herein as the
“Purchase
Price."  The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein.  The Company may reduce the Purchase Price for some or all of
the Warrants, temporarily or permanently, provided such reduction is made as to
all outstanding Warrants for all Holders of such
Warrants.  Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in that certain Subscription Agreement (the
“Subscription
Agreement”), dated as of May ___, 2009, entered into by the Company, the
Holder and the other signatories thereto.

    


    As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:

     

    (a)           The
term “Company” shall
mean Clear Skies Solar, Inc., a Delaware corporation, and any corporation which
shall succeed or assume the obligations of Clear Skies Solar, Inc.
hereunder.

     

    (b)           The
term “Common Stock”
includes (i) the Company's Common Stock, $0.001 par value per share, as
authorized on the date of the Subscription Agreement, and (ii) any other
securities into which or for which any of the securities described in
(i) may be converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c)           The
term “Other Securities”
refers to any stock (other than Common Stock) and other securities of the
Company or any other person (corporate or otherwise) which the holder of the
Warrant at any time shall be entitled to receive, or shall have received, on the
exercise of the Warrant, in lieu of or in addition to Common Stock, or which at
any time shall be issuable or shall have been issued in exchange for or in
replacement of Common Stock or Other Securities pursuant to Section 4 or
otherwise.

     

    (d)           The term “Warrant
Shares” shall mean the Common Stock issuable
upon exercise of this Warrant.

     

    1.           Exercise of
Warrant.

     

    1.1.           Number of Shares Issuable
upon Exercise.  From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of Section 1.2 or
upon exercise of this Warrant in part in accordance with Section 1.3,
shares of Common Stock of the Company, subject to adjustment pursuant to Section 4 below
and Sections
11.4 and 12(b) of the
Subscription Agreement.

     

    1.2.           Full
Exercise.  This Warrant may be
exercised in full by the Holder hereof by delivery to the Company of an original or facsimile copy of the
form of subscription attached as Exhibit A hereto (the “Subscription
Form”) duly executed by such Holder and
delivery within two days
thereafter of payment, in cash, wire transfer or by certified or official bank
check payable to the order of the Company, in the amount obtained by multiplying
the number of shares of Common Stock for which this Warrant is then exercisable
by the Purchase Price then in
effect.  The original Warrant is not required to be surrendered to the
Company until it has been fully exercised.

     

    1.3.           Partial
Exercise.  This
Warrant may be exercised in part (but not for a fractional share) by delivery of
a Subscription Form in the
manner and at the place provided in Section 1.2, except that the amount payable by the
Holder on such partial exercise shall be the amount obtained by multiplying
(a) the number of whole shares of Common Stock designated by the Holder in
the Subscription Form by
(b) the Purchase Price then in effect.  On any such partial
exercise, provided the Holder has surrendered the
original Warrant, the Company, at its expense, will forthwith issue and deliver
to or upon the order of the Holder hereof a new Warrant of like tenor, in the
name of the Holder hereof or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may request, the whole number of shares of Common
Stock for which such Warrant may still be exercised.

     

    1.4.           Fair Market
Value.  For purposes of this Warrant, the Fair Market Value of a share
of Common Stock as of a particular date (the "Determination Date") shall
mean:

     

    (a)           If
the Company's Common Stock is traded on an exchange or is quoted on the NASDAQ
Global Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New
York Stock Exchange or the American Stock Exchange, LLC, then the average of the closing sale prices of
the Common Stock for the
five (5) Trading Days
immediately prior to (but not including) the Determination
Date;

     

    (b)           If
the Company's Common Stock is not traded on an exchange or on the NASDAQ Global
Market, NASDAQ Global Select Market, the NASDAQ Capital Market, the New York
Stock Exchange or the American Stock Exchange, Inc., but is traded on the OTC
Bulletin Board or in the over-the-counter market or Pink Sheets, then the
average of the closing bid and ask prices reported for the five (5) Trading Days immediately prior to (but
not including) the Determination Date;

     

    (c)           Except
as provided in clause (d) below and Section 3.1, if the
Company's Common Stock is not publicly traded, then as the Holder and the
Company agree, or in the absence of such an agreement, by arbitration in
accordance with the rules then standing of the American Arbitration Association,
before a single arbitrator to be chosen from a panel of persons qualified by
education and training to pass on the matter to be decided; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (d)           If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.

     

    1.5.           Company
Acknowledgment.  The Company will, at the time of the exercise
of the Warrant, upon the request of the Holder hereof, acknowledge in writing
its continuing obligation to afford to such Holder any rights to which such
Holder shall continue to be entitled after such exercise in accordance with the
provisions of this Warrant. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

     

    1.6.           Delivery of
Stock Certificates, etc. on Exercise. The Company agrees that, provided the
full purchase price listed in the Subscription Form is received as specified in
Section
1.2, the shares of Common
Stock purchased upon exercise of this Warrant shall be deemed to be issued
to the Holder hereof as the record owner of such shares as of the close of
business on the date on which delivery of a Subscription Form shall have
occurred and payment made for such shares as aforesaid. As soon as practicable after the exercise of this
Warrant in full or in part, and in any event within three (3)
business days thereafter
(“Warrant Share
Delivery Date”), the Company at its expense (including
the payment by it of any applicable issue taxes) will cause to be issued in the name of and
delivered to the Holder hereof, or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may direct in compliance with applicable
securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and
non-assessable shares of Common Stock (or Other Securities) to which such Holder
shall be entitled on such exercise, plus, in lieu of any fractional share to
which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.  The Company
understands that a delay in the delivery of the Warrant Shares after the Warrant
Share Delivery Date could result in economic loss to the Holder.  As
compensation to the Holder for such loss, the Company agrees to pay (as
liquidated damages and not
as a penalty) to the Holder for late issuance of Warrant Shares upon exercise of
this Warrant the proportionate amount of $100 per business day after the Warrant
Share Delivery Date for each $10,000 of Purchase Price of Warrant Shares for which this Warrant is exercised
which are not timely delivered.  The Company shall pay any payments
incurred under this Section in immediately available funds upon
demand.  Furthermore, in addition to any other remedies which may be
available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Warrant Shares by the Warrant
Share Delivery Date, the Holder may revoke all or part of the relevant Warrant
exercise by delivery of a notice to such effect to the Company, whereupon the Company and the Holder
shall each be restored to their respective positions immediately prior to the
exercise of the relevant portion of this Warrant, except that the liquidated
damages described above shall be payable through the date notice of revocation or rescission is
given to the Company.

     

    1.7.           Buy-In.   In addition to any other rights
available to the Holder, if the Company fails to deliver to a Holder the Warrant
Shares as required pursuant to this Warrant, within seven (7)
business days after the
Warrant Share Delivery Date and the Holder or a broker on the Holder’s behalf, purchases (in an open market
transaction or otherwise) shares of common stock to deliver in satisfaction of a
sale by such Holder of the Warrant Shares which the Holder was entitled to receive from
the Company (a "Buy-In"), then the Company shall pay in cash
to the Holder (in addition to any remedies available to or elected by the
Holder) the amount by which (A) the Holder's total purchase price (including
brokerage commissions, if
any) for the shares of common stock so purchased exceeds (B) the aggregate
Purchase Price of the Warrant Shares required to have been delivered
together with interest thereon at a rate of 15% per annum, accruing until
such amount and any accrued interest thereon is paid in full (which amount shall
be paid as liquidated damages and not as a penalty).  For example, if a Holder purchases
shares of Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to $10,000 of Purchase Price of Warrant Shares to
have been received upon exercise of this Warrant, the Company shall be required
to pay the Holder $1,000,
plus interest. The Holder
shall provide the Company written notice indicating the amounts payable to the
Holder in respect of the
Buy-In.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.           Cashless
Exercise.

     

    (a)           Payment
upon exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with
Section (b) below or (iii) by a combination of any of the
foregoing methods, for the number of Common Stock specified in such form (as
such exercise number shall be adjusted to reflect any adjustment in the total
number of shares of Common Stock issuable to the holder per the terms of this
Warrant) and the holder shall thereupon be entitled to receive the number of
duly authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided
herein.  Notwithstanding the immediately preceding sentence, payment
upon exercise may be made in the manner described in Section 2(b) below
commencing ninety-one (91) days after the Issue Date, only with respect to
Warrant Shares not included for
unrestricted public resale in an effective Registration Statement on the date
notice of exercise is given by the Holder.

     

    (b)           Subject
to the provisions herein to the contrary, if the Fair Market Value of one share
of Common Stock is greater than the Purchase Price (at the date of calculation
as set forth below), in lieu of exercising this Warrant for cash, the holder may
elect to receive shares equal to the value (as determined below) of this Warrant
(or the portion thereof being cancelled) by delivery of a properly endorsed
Subscription Form delivered to the Company by any means described in Section 13, in which
event the Company shall issue to the holder a number of shares of Common Stock
computed using the following formula:

     

    X=Y (A-B)

              A

    
      


      
        	
                        Where  

              	
                X=

              	
                the
      number of shares of Common Stock to be issued to the
  Holder

              


      

    

    


    
      	
               
      

            	
              Y=

            	
              the
      number of shares of Common Stock purchasable under the Warrant or, if only
      a portion of the Warrant is being exercised, the portion of the Warrant
      being exercised (at the date of such
  calculation)

            


    

     

    
      	
               
      

            	
              A=

            	
              Fair Market
      Value

            


    

     

    
      	
               
      

            	
              B=

            	
              Purchase
      Price (as adjusted to the date of such
  calculation)

            


    

     

    For
purposes of Rule 144 promulgated under the 1933 Act, it is intended, understood
and acknowledged that the Warrant Shares issued in a cashless exercise
transaction in the manner described above shall be deemed to have been acquired
by the Holder, and the holding period for the Warrant Shares shall be deemed to
have commenced, on the date this Warrant was originally issued pursuant to the
Subscription Agreement.

     

    3.           Adjustment for
Reorganization, Consolidation, Merger, etc.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.1.           Fundamental Transaction. 
If, at any time while this Warrant is outstanding, (A) the Company 
effects any merger or  consolidation  of the Company with or into
another entity, (B) the Company effects any sale of all or
substantially all of its assets in one or
a series of related transactions,  (C)
any tender offer or exchange offer (whether by the
Company or another entity) is completed pursuant to which holders of Common
Stock are permitted to tender or exchange their
shares for other securities, cash or property, (D) the Company
consummates a stock purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, or spin-off) with one or
more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any "person"
or "group" (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Company, or (F) 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 (in any such
case, a "Fundamental 
Transaction"), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder, (a) upon
exercise of this Warrant, the number of shares of Common Stock of the
successor or acquiring corporation or of the Company, if it is the
surviving corporation, and any additional consideration (the "Alternate
Consideration") receivable upon or as a result of
such reorganization, reclassification, merger,
consolidation or disposition of assets by a Holder of the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is
acquired in (1) a transaction where the consideration paid to the holders
of the Common Stock consists solely of cash, (2) a “Rule 13e-3 transaction” as
defined in Rule 13e-3 under the 1934 Act, or (3) a transaction involving a
person or entity not traded on a national securities exchange, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Nasdaq Capital
Market, cash equal to the Black-Scholes Value. 
For purposes of any such exercise, the determination of the
Purchase 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 Purchase 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.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall issue to the Holder a
new warrant consistent with
the foregoing provisions and evidencing the
Holder's right to exercise such warrant 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 Section
3.1 and insuring that this Warrant (or any such replacement
security) will be similarly adjusted upon any subsequent transaction
analogous to a Fundamental Transaction.  “Black-Scholes Value” shall be
determined in accordance with the Black-Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg L.P. using (i) a price per share of Common
Stock equal to the VWAP of the Common Stock for the Trading Day immediately
preceding the date of consummation of the applicable Fundamental Transaction,
(ii) 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 the date of such
request and (iii) an expected volatility equal to the 100 day volatility
obtained from the HVT function on Bloomberg L.P. determined as of the Trading
Day immediately following the public announcement of the applicable Fundamental
Transaction.

    


    3.2.           Continuation of
Terms.  Upon any reorganization, consolidation, merger or
transfer (and any dissolution following any transfer) referred to in this Section 3, this
Warrant shall continue in full force and effect and the terms hereof shall be
applicable to the Other Securities and property receivable on the exercise of
this Warrant after the consummation of such reorganization, consolidation or
merger or the effective date of dissolution following any such transfer, as the
case may be, and shall be binding upon the issuer of any Other Securities,
including, in the case of any such transfer, the person acquiring all or
substantially all of the properties or assets of the Company, whether or not
such person shall have expressly assumed the terms of this Warrant as provided
in Section 4.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.3           Share
Issuance.  Until
the Expiration Date, if the Company shall issue any Common Stock except for the
Excepted Issuances (as defined in the Subscription Agreement), prior to the complete exercise of
this Warrant for a consideration less than the Purchase Price that would be in
effect at the time of such issuance, then, and thereafter successively upon
each such issuance, the Purchase Price shall be reduced to
such other lower price for
then outstanding Warrants.  For purposes of this adjustment, the
issuance of any security or debt instrument of the Company carrying the right to
convert such security or debt instrument into Common Stock or of any warrant,
right or option to purchase Common Stock shall
result in an adjustment to the Purchase Price upon the issuance of the
above-described security, debt instrument, warrant, right, or option if such
issuance is at a price lower than the Purchase Price in effect upon
such issuance and again at any time upon
any actual, permitted,
optional, or allowed issuances of shares of Common Stock upon
any actual, permitted,
optional, or allowed exercise of such conversion or purchase
rights if such issuance is at a price lower than the Purchase Price in effect
upon any actual, permitted,
optional, or allowed such
issuance.  Common Stock issued or issuable by the Company for no
consideration will be deemed issuable or to have been issued for $0.001 per
share of Common Stock.

     

    4.           Extraordinary Events
Regarding Common Stock.  In the event that the Company shall
(a) issue additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of Common Stock, then, in each such event,
the Purchase Price shall, simultaneously with the happening of such event, be
adjusted by multiplying the then Purchase Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Purchase Price then in effect. The Purchase
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof, be entitled to receive shall be adjusted to
a number determined by multiplying the number of shares of Common Stock that
would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Purchase Price that would otherwise (but for the provisions of this Section 4) be in
effect, and (b) the denominator is the Purchase Price in effect on the date of
such exercise.

     

    5.           Certificate as to
Adjustments.  In each case of any adjustment or readjustment in
the shares of Common Stock (or Other Securities) issuable on the exercise of the
Warrants, the Company at its expense will promptly cause its Chief Financial
Officer or other appropriate designee to compute such adjustment or readjustment
in accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock (or Other Securities) issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock (or Other Securities)
outstanding or deemed to be outstanding, and (c) the Purchase Price and the
number of shares of Common Stock to be received upon exercise of this Warrant,
in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Warrant. The Company will forthwith mail a
copy of each such certificate to the Holder of the Warrant and any Warrant Agent
of the Company (appointed pursuant to Section 11
hereof).

     

    6.           Reservation of Stock, etc.
Issuable on Exercise of Warrant; Financial
Statements.   The Company will at all times reserve and
keep available, solely for issuance and delivery on the exercise of the
Warrants, all shares of Common Stock (or Other Securities) from time to time
issuable on the exercise of the Warrant.  This Warrant entitles the
Holder hereof, upon written request, to receive copies of all financial and
other information distributed or required to be distributed to the holders of
the Company's Common Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    7.           Assignment; Exchange of
Warrant.  Subject to compliance with applicable securities
laws, this Warrant, and the rights evidenced hereby, may be transferred by any
registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the “Transferor Endorsement Form")
and together with an opinion of counsel reasonably satisfactory to the Company
that the transfer of this Warrant will be in compliance with applicable
securities laws, the Company will issue and deliver to or on the order of the
Transferor thereof a new Warrant or Warrants of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a "Transferee"), calling in the
aggregate on the face or faces thereof for the number of shares of Common Stock
called for on the face or faces of the Warrant so surrendered by the
Transferor.

     

    8.           Replacement of
Warrant.  On receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and, in
the case of any such loss, theft or destruction of this Warrant, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Warrant, the Company at its expense, twice only, will
execute and deliver, in lieu thereof, a new Warrant of like tenor.

     

    9.           Registration
Rights.  The Holder of this Warrant has been granted certain
registration rights by the Company.  These registration rights are set
forth in the Subscription Agreement.  The terms of the Subscription
Agreement are incorporated herein by this reference.

     

    10.           Maximum
Exercise.  The
Holder shall not be entitled to exercise this Warrant on an exercise
date, in connection with
that number of shares of Common Stock which would be in excess of the sum of
(i) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates on an exercise date, and (ii) the number of shares of
Common Stock issuable upon the exercise of this Warrant with respect to which
the determination of this limitation is being made on an exercise date, which
would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock on such date.  For the purposes of
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the 1934 Act and Rule 13d-3
thereunder.  Subject to the foregoing, the Holder shall
not be limited to aggregate exercises which would result in the issuance of more
than 4.99%.  The restriction described in this
paragraph may be waived, in whole or in part, upon sixty-one (61) days
prior notice from the Holder to the Company to increase such percentage to up to
9.99%, but not in excess of 9.99%.  The Holder may decide whether to
convert a Convertible Note or exercise this Warrant to achieve an actual 4.99%
or up to 9.99% ownership position as described above, but not in excess of
9.99%.

     

    11.           Warrant
Agent.  The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the
purpose of issuing Common Stock (or Other Securities) on the exercise of this
Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and
replacing this Warrant pursuant to Section 8, or
any of the foregoing, and thereafter any such issuance, exchange or replacement,
as the case may be, shall be made at such office by such Warrant
Agent.

     

    12.           Transfer on the Company's
Books.  Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.

     

    13.           Notices.   All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur.  The
addresses for such communications shall be:  if to the Company, to:
Clear Skies Solar, Inc., 200 Old Country Road, Suite 610,
Mineola, New York 11501,
Attn: Ezra
Green, CEO, facsimile: (516) 281-7150, with
a copy by fax only to:  Harvey Kesner, Sichenzia Ross Friedman Ference
LLP, 61 Broadway, 32nd Floor, New York, NY 10006, facsimile: (212) 930-9725, and
(ii) if to the Holder, to the address and facsimile number listed on the first
paragraph of this Warrant, with a copy by fax only to: Grushko & Mittman,
P.C., 551 Fifth Avenue, Suite 1601, New York, New York 10176, facsimile: (212)
697-3575.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    14.           Law Governing This
Warrant.  This Warrant shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.  Any action brought by either party against the
other concerning the transactions contemplated by this Warrant shall be brought
only in the state courts of New York or in the federal courts located in the
state and county of New York.  The parties to this Warrant hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The Company and Holder waive trial by
jury.  The prevailing party shall be entitled to recover from the
other party its reasonable attorney's fees and costs.  In the event
that any provision of this Warrant or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law.  Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement.   Each party hereby
irrevocably waives personal service of process and consents to process being
served in any suit, action or proceeding in connection with this Agreement or
any other Transaction Document 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 Agreement 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 other manner permitted by law.

     

    


     

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

     

    
      
        	 	
                CLEAR
      SKIES SOLAR, INC.

              	 
	 	 	 	 
	
              	
                By:
      

              	/s/ 	 
	 	 	Name:  Ezra
      Green	 
	 	 	Title:  Chief
      Executive Officer	 


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    


    FORM OF
SUBSCRIPTION

    (to be
signed only on exercise of Warrant)

     

    TO:  CLEAR
SKIES SOLAR, INC.

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):

     

    
      
        	
                 

              	 
      	
                ________
      shares of the Common Stock covered by such Warrant; or

              
	
                ___

              	 
      	
                the
      maximum number of shares of Common Stock covered by such Warrant pursuant
      to the cashless exercise procedure set forth in Section 2 of the
      Warrant.

              
	 
      	 
      	 
      
	
                The
      undersigned herewith makes payment of the full purchase price for such
      shares at the price per share provided for in such Warrant, which is
      $___________.  Such payment takes the form of (check applicable
      box or boxes):

              
	 
      	 
      	 
      
	
                 

              	 
      	
                $__________
      in lawful money of the United States; and/or

              
	
                ___

              	 
      	
                the
      cancellation of such portion of the attached Warrant as is exercisable for
      a total of _______ shares of Common Stock (using a Fair Market Value of
      $_______ per share for purposes of this calculation);
    and/or

              
	 
      	 
      	 
      
	
                ___

              	 
      	
                the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2 of the Warrant, to
      exercise this Warrant with respect to the maximum number of shares of
      Common Stock purchasable pursuant to the cashless exercise procedure set
      forth in Section 2.

              


      

       

      
        The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to                                                                                     
whose address is___________________________________________________                                                                                                    
       
          

                       


        

      

    

    The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.

     

    
      
        	
                Date:___________________

              	
              	
              
	 	 	

                (Signature
      must conform to name of holder as specified on the face of the
      Warrant)

              
	 	 	
              	 
	 	 	 
	 	 	 
	 	 	

                (Address) 

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Exhibit B

     

    FORM OF
TRANSFEROR ENDORSEMENT

    (To be
signed only on transfer of Warrant)

     

    For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading "Transferees" the right represented by
the within Warrant to purchase the percentage and number of shares of Common
Stock of CLEAR SKIES SOLAR, INC. to which the within Warrant relates specified
under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of CLEAR SKIES
SOLAR, INC. with full power of substitution in the premises.

     

    


    
      	
              Transferees

            	
              Percentage
      Transferred

            	
              Number
      Transferred

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      


    

    


    
       

      
        
          	
                  Date:___________,________

                	 	
                	 
	 	 	 	

                  (Signature
      must conform to name of holder as specified on the face of the
      Warrant)

                
	 	 	 	
                
	Signed
      in the presence of: 	 	 	 
	                  
    	 	 	   
      
	
                  (Name)

                	 	 	 
      
	 	 	 	

                  (Address) 

                
	 	 	 	 
	 	 	 	 
	ACCEPTED
      AND AGREED:	 	 	 
	[TRANSFEREE]	 	 	 
	 	 	 	
                  (Address) 

                
	 	 	 	 
	 	 	 	 
	
                  (Name)