EX-10.67






Exhibit 10.67



     THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS UNDER SUCH ACT OR LAWS.



	 	 	 
	No. W-6

	 	Warrant to Purchase 15,000 Preferred Shares
or Equivalent Ordinary Shares, as Applicable
pursuant to Section 1 hereof.






WARRANT TO PURCHASE

PREFERRED SHARES OR ORDINARY SHARES, AS APPLICABLE,

OF

CHINA HYDROELECTRIC CORPORATION




     This Warrant (the “Warrant”) is issued to Morgan Joseph & Co. Inc. or its permitted assigns
(the “Holder”) by CHINA HYDROELECTRIC CORPORATION, a Cayman Islands corporation (the “Company”),
on January 28, 2008 for agreed upon consideration, receipt of which is hereby acknowledged.



     1. Purchase Shares. Subject to the terms and conditions hereinafter set forth, the
Holder is entitled, upon surrender of this Warrant at the principal office of the Company (or at
such other place as the Company shall notify the Holder in writing), to purchase from the Company
at the applicable Exercise Price (as defined below): (i) until such time as the Company’s Series A
Preferred Shares, par value $0.001 per share (the “Preferred Shares”), are, in accordance with
their terms, automatically converted into the Company’s Ordinary Shares, par value $0.001 per share
(the “Ordinary Shares”), up to 15,000 Preferred Shares, subject to adjustment as provided in
Section 8 hereof, and (ii) after such time as the Preferred Shares are, in accordance with their
terms, automatically converted into the Ordinary Shares, up to such number of the Ordinary Shares
as 15,000 Preferred Shares were so converted into (in either case, the “Warrant Shares”), subject
to adjustment as provided in Section 8 hereof.



     2. Exercise Price. The purchase price for the Warrant Shares shall be: (i) in the case
of the Preferred Shares, $1,100 per share, or (ii) in the case of the Ordinary Shares, the then-in-effect Conversion Price as defined in the Company’s Articles of Association for each Preferred
Share (the “Conversion Price”) multiplied by 110% (in either case, the “Exercise Price”), subject
to adjustment as provided in Section 8 hereof.



     3. Exercise Period. This Warrant may be exercised at any time after the date hereof
until the close of business on January 28, 2013.



 









 





     4. Method of Exercise. While this Warrant remains outstanding and exercisable in
accordance with Section 3 above, the Holder may exercise, in whole or in part, this Warrant by:



          (a) the surrender of the Warrant, together with a duly executed copy of the form of Notice of
Exercise attached hereto, to the Secretary of the Company at its principal executive offices in the
United States of America; and




          (b) the payment of the aggregate Exercise Price, which payment shall be payable by (i) cash,
or a certified or bank cashier’s check payable to the order of the Company, or wire transfer of
immediately available funds to such account as shall be designated by the Company, in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares for which this Warrant is
being exercised, or (ii) the surrender of this Warrant, without the payment of the aggregate
Exercise Price as provided in clause (i) immediately above, in return for the delivery to the
Holder of such number of Warrant Shares equal to the number of Warrant Shares for which this
Warrant is being exercised (if the Exercise Price were being paid as provided in clause (i)
immediately above) reduced by that number of Warrant Shares equal to the quotient obtained by
dividing (x) the Exercise Price multiplied by the number of Warrant Shares for which this Warrant
is being exercised by (y) the Market Price (as defined below) of one Preferred Share or Ordinary
Share, as applicable, on the business day which immediately precedes the day of exercise of this
Warrant. The exercise of this Warrant pursuant to clause (ii) immediately above is hereinafter
referred to as “Cashless Exercise”.




          As used herein, the “Market Price” at any date shall mean:




               (i) in the case of the Preferred Shares, (x) if the Ordinary Shares are publicly traded, the
Conversion Ratio (as defined below) multiplied by the last sale price of the Ordinary Shares in
the principal trading market for the Ordinary Shares as reported by such principal trading market,
or, if such last sale price is not reported, the average of the reporting closing bid and asked
prices of the Ordinary Shares, or (y) if the Ordinary Shares are not publicly traded, the market
price per Preferred Share as determined in good faith by the board of directors of the Company.
The “Conversion Ratio” as of any date shall mean $1,000 divided by the Conversion Price
then in effect.



               (ii) in the case of the Ordinary Shares, (x) if the Ordinary Shares are publicly traded, the
last sale price of the Ordinary Shares in the principal trading market for the Ordinary Shares as
reported by such principal trading market, or, if such last sale price is not reported, the
average of the reporting closing bid and asked prices of the Ordinary Shares, or (y) if the
Ordinary Shares are not publicly traded, the market price per Ordinary Share as determined in good
faith by the board of directors of the Company.



     5. No Redemption. The Company shall not have any right to redeem this Warrant in whole
or in part.



     6. Certificates for Shares. Upon the exercise of the purchase rights evidenced by
this Warrant, one or more certificates for the number of Warrant Shares so purchased shall be



 









 




issued as soon as practicable thereafter (with appropriate restrictive legends, if
applicable), and in any event within ten (10) business days of the delivery of the Notice of
Exercise.




     7. Issuance of Shares. The Company covenants that the Warrant Shares, when issued
pursuant to the exercise of this Warrant, will be duly and validly issued, fully paid and
nonassessable and free from all liens and charges with respect to the issuance thereof.



     8. Adjustment of Exercise Price and Kind and Number of Shares. The number and kind of
securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time as follows:



          (a)
Subdivisions, Combinations and Other Issuances. If the Company
shall at any time
prior to the expiration of this Warrant (i) subdivide its Preferred Shares or Ordinary Shares, by
split-up or otherwise, or combine its Preferred Shares or Ordinary Shares, or (ii) issue additional
Preferred Shares (other than any Preferred Shares issued in lieu of cash dividends on the Preferred
Shares), Ordinary Shares or other equity securities as a dividend with respect to such equity
securities, the number of Warrant Shares issuable on the exercise of this Warrant shall forthwith
be proportionately increased in the case of a subdivision (by stock split, stock dividend or
otherwise), or proportionately decreased in the case of a combination. Appropriate adjustments
shall also be made to the Exercise Price payable per share, but the aggregate Exercise Price
payable for the total number of Warrant Shares purchasable under this Warrant (as adjusted) shall
remain the same. Any adjustment under this Section 8(a) shall become effective at the close of
business on the date the subdivision or combination becomes effective, or as of the record date of
such dividend, or in the event that no record date is fixed, upon the making of such dividend.




          (b) Reclassification, Reorganization and Consolidation. In case of any
reclassification, capital reorganization, or change in the Preferred Shares or Ordinary Shares of
the Company (other than as a result of a subdivision, combination, or stock dividend provided for
in Section 8(a) above), then, as a condition of such reclassification, reorganization, or change,
lawful provision shall be made, and duly executed documents evidencing the same from the Company or
its successor shall be delivered to the Holder, so that the Holder shall have the right at any time
prior to the expiration of this Warrant to purchase, at a total price equal to that payable upon
the exercise of this Warrant (subject to adjustment of the Exercise Price as provided in Section
8), the kind and amount of shares of stock and other securities and property receivable in
connection with such reclassification, reorganization, or change by a holder of the same number of
the Preferred Shares or Ordinary Shares as were purchasable by the Holder immediately prior to
such reclassification, reorganization, or change. In any such case appropriate provisions shall
be made with respect to the rights and interest of the Holder so that the provisions hereof shall
thereafter be applicable with respect to any shares of stock or other securities and property
deliverable upon exercise hereof, and appropriate adjustments shall be made to the purchase price
per share payable hereunder, provided the aggregate Exercise Price shall remain the same.




          (c) Notice of Adjustment. When any adjustment is required to be made in the number or
kind of shares purchasable upon exercise of the Warrant, or in the Exercise Price, the Company
shall promptly notify the Holder of such event and of the number of the Preferred




 









 






Shares, Ordinary Shares or other securities or property thereafter purchasable upon
exercise of this Warrant.




          (d) Issuance of New Warrant. Upon the occurrence of any of the events listed in this
Section 8 that results in an adjustment of the type, number or exercise price of the securities
underlying this Warrant, the Holder shall have the right to receive a new warrant reflecting such
adjustment upon the Holder tendering this Warrant in exchange. The new warrant shall otherwise
have terms identical to this Warrant.




     9. No Impairment. Pursuant to the terms and conditions of this Warrant, Company
shall: (i) reserve an appropriate number of the Preferred Shares or Ordinary Shares to facilitate
the issuance of shares to the Holder pursuant to this Warrant, (ii) not amend its Articles of
Association or take any other action that would materially impair Company’s ability to comply with
the terms of the Warrant, and (iii) provide the Holder with at least ten (10) days prior written
notice of the record date for any proposed dividend or distribution by the Company.



     10. No Fractional Shares or Scrip. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but in lieu of such fractional
shares the Company shall make a cash payment therefor on the basis of the Exercise Price then in
effect, unless such cash payment is less than one dollar ($1.00).



     11. No Stockholder Rights. Prior to exercise of this Warrant, the Holder shall not be
entitled to any rights of a stockholder with respect to the Preferred Shares or Ordinary Shares
issuable on the exercise hereof, including (without limitation) the right to vote such shares,
receive dividends or other distributions thereon, exercise preemptive rights or be notified of
stockholder meetings, and such holder shall not be entitled to any notice or other communication
concerning the business or affairs of the Company. However, nothing in this Section 11 shall limit
the right of the Holder to be provided the notices required under this Warrant.



     12. Board Observer. Notwithstanding any other provisions hereof, for so long as the
Holder or any of its affiliates, taken together, hold any Ordinary Shares, Preferred Shares or
other securities of the Company that are convertible or exchangeable into the Ordinary Shares
representing at least 5% in the aggregate of the then outstanding Ordinary Shares on a converted
basis, the Holder shall be entitled to designate a board observer to attend all meetings of the
board of directors of the Company in a non-voting observer capacity. All of the notification,
background information, resolution, plans and schedules relating to the board meetings shall be
delivered to the board observer under the same notification requirements as applicable to the
members of the board of directors of the Company; provided, however, that the board
observer shall agree to hold in confidence and trust and to act in a fiduciary manner with respect
to all information so provided.



     13. Transfer.



          (a) General Restrictions. The Holder of this Warrant, by its acceptance hereof,
agrees that it will not sell, transfer, assign, pledge or hypothecate this Warrant for a period of
one year following the date hereof to anyone other than a bona fide officer, employee or partner
or an affiliate of the Holder. On and after the first anniversary of the date hereof, transfers to
others




 









 




may be made, subject to compliance with or exemptions from applicable securities laws. In order to
make any permitted assignment, the Holder must deliver to the Company a duly completed and
executed assignment form attached hereto, together with the Warrant and payment of all transfer
taxes, if any, payable in connection therewith. The Company shall within five (5) business days
transfer this Warrant on the books of the Company and shall execute and deliver a new Warrant or
Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase
the aggregate number of Warrant Shares purchasable hereunder or such portion of such number as
shall be contemplated by any such assignment.




          (b) Restrictions Imposed by the Securities Act. The securities evidenced by this
Warrant shall not be transferred unless and until (i) the Company has received the opinion of
counsel for the Holder that the securities may be transferred pursuant to an exemption from
registration under the Securities Act and applicable state securities laws, the availability of
which is established to the reasonable satisfaction of the Company, or (ii) a registration
statement or a post-effective amendment to the registration statement relating to such securities
have been filed by the Company and declared effective by the Securities and Exchange Commission and
compliance with applicable state securities laws has been established.




     14. New Warrants to be Issued.



          (a) Partial Exercise or Transfer. Subject to the restrictions in Section 12 hereof,
this Warrant may be exercised or assigned in whole or in part. In the event of the exercise or
assignment hereof in part only, upon surrender of this Warrant for cancellation, together with the
duly executed exercise or assignment form and payment of the Exercise Price and/or transfer tax,
the Company shall cause to be delivered to the Holder without charge a new Warrant of like tenor to
this Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of
Warrant Shares purchasable hereunder as to which this Warrant has not been exercised or assigned.




          (b) Lost Certificate. Upon receipt by the Company of evidence satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant and of reasonably satisfactory
indemnification or the posting of a bond, the Company shall execute and deliver a new Warrant of
like tenor and date. Any such new Warrant executed and delivered as a result of such loss, theft,
mutilation or destruction shall constitute a substitute contractual obligation on the part of the
Company.




     15. Successors and Assigns. The terms and provisions of this Warrant shall inure to the
benefit of, and be binding upon, the Company and the Holder and their respective successors and
assigns.



     16. Amendments and Waivers. Any term of this Warrant may be amended and the observance
of any term of this Warrant may be waived (either generally or in a particular instance and either
retroactively or prospectively), with the written consent of the Company and the Holder. Any
waiver or amendment effected in accordance with this Section 16 shall be binding upon each holder
of any Warrant Shares purchased under this Warrant at the time outstanding (including securities
into which such shares have been converted), each future holder of all such Warrant Shares, and the
Company.



 









 





     17. Notices. All notices required under this Warrant and shall be deemed to have been
given or made for all purposes (i) upon personal delivery, (ii) upon confirmation receipt that the
communication was successfully sent to the applicable number if sent by facsimile; (iii) one day
after being sent, when sent by professional overnight courier service, or (iv) five days after posting when sent by registered or certified mail. Notices to the Company shall be
sent to the principal office of the Company (or at such other place as the Company shall notify the
Holder hereof in writing). Notices to the Holder shall be sent to the address of the Holder on the
books of the Company (or at such other place as the Holder shall notify the Company hereof in
writing).



     17. Attorneys’ Fees. If any action of law or equity is necessary to enforce or
interpret the terms of this Warrant, the prevailing party shall be entitled to its reasonable
attorneys’ fees, costs and disbursements in addition to any other relief to which it may be
entitled.



     18. Captions. The section and subsection headings of this Warrant are inserted for
convenience only and shall not constitute a part of this Warrant in construing or interpreting any
provision hereof.



     19. Governing Law. This Warrant shall be governed by the laws of the State of New
York, without regard to the provisions thereof relating to conflict of laws.



[Signature Page Follows]




 









 





     IN WITNESS WHEREOF, CHINA HYDROELECTRIC CORPORATION caused this Warrant to be executed by an
officer thereunto duly authorized.



	 	 	 	 	 
	 	CHINA HYDROELECTRIC CORPORATION

 	 
	 	By:  	/s/ John Kuhns
 	 
	 	 	Name:  	John Kuhns  	 
	 	 	Title:  	President and CEO 	 
	 




 









 





NOTICE OF EXERCISE




	 	 	 
	To:

	 	CHINA HYDROELECTRIC CORPORATION
	Attn:

	 	Corporate Secretary






     The undersigned hereby elects to purchase                      [Preferred] [Ordinary]
Shares of CHINA HYDROELECTRIC CORPORATION, pursuant to the terms of the attached Warrant and
payment of the aggregate Exercise Price as follows:



     (mark the applicable one)



     [  ] in cash, or by a certified or bank cashier’s check, or by wire transfer as provided
in the Warrant; or



     [  ] by Cashless Exercise as provided in the Warrant.



     The undersigned hereby represents and warrants that the undersigned is acquiring such shares
for its own account for investment purposes only, and not for resale or with a view to distribution
of such shares or any part thereof.



	 	 	 
	 

	 	HOLDER:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	Address:






Date:




Name in which shares should be registered:





 









 








FORM OF ASSIGNMENT




	 	 	 
	To:

	 	CHINA HYDROELECTRIC CORPORATION
	Attn:

	 	Corporate Secretary






     The undersigned hereby assigns and transfers this Warrant Certificate to                      whose social security number or tax identification number is                     
and whose record address is                     , and irrevocably appoints                      as agent to transfer this Warrant Certificate on the books of the
Company. Such agent may substitute another to act for such agent.



	 	 	 
	 

	 	HOLDER:
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	Address:






Date: