Document:

Exhibit 4.6

 

CLEAN ENERGY FUELS CORP.

 

WARRANT TO PURCHASE ADDITIONAL SHARES OF COMMON STOCK

 

Warrant No.:

Number of Shares of Common Stock: Up to

Date
of Issuance: October [      ], 2008 (“Issuance Date”)

 

Clean Energy Fuels Corp., a Delaware
corporation (the “Company”),
hereby certifies that, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
[                                        ],
in the event that California Proposition 10 is not approved by the voters in
the State of California during the election to be held on November 4,
2008, the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company, at the Exercise Price (as
defined below) then in effect, upon surrender of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in
exchange, transfer or replacement hereof, this “Warrant”), at any time or times on or after the date which is
five Trading days after November 4, 2008 (the “Exercisability
Date”), but not after 11:59 p.m., New York time, on the
Expiration Date (as defined below) (the period between the Exercisability Date
and the Expiration Date, the “Exercise Period”),
up to such number of fully paid nonassessable shares of Common Stock (as
defined below)  (the “Warrant Shares”), as determined in Section 1(b) below.  In the event that the result of the vote with
respect to California Proposition 10 is not declared by 9:00 a.m., New
York time, on November 5, 2008, then the Exercisability Date shall be
extended one Trading Day for each Trading Day that such result is not
declared.  Except as otherwise defined
herein, capitalized terms in this Warrant shall have the meanings set forth in Section 15.  This Warrant is the Warrant to purchase
Additional Shares of Common Stockissued pursuant to Section 2 of that
certain Subscription Agreement (the “Subscription Agreement”),
dated as of October [    ], 2008 (the “Subscription Date”), by and among the
Company and the Holder (the “Subscription
Agreement”) pursuant to the Company’s Registration Statement on Form S-3
(File number 333-152306) (the “Registration Statement”).

 

1.               EXERCISE
OF WARRANT.

 

(a)          Mechanics of Exercise.  Subject to the terms and conditions hereof,
in the event that California Proposition 10 is not approved by the voters in
the State of California during the election to be held on November 4,
2008, this Warrant may be exercised by the Holder on any day on or after the
Exercisability Date but prior to the Expiration Date, in whole or in part, by
delivery of a written notice, in the form attached hereto as Exhibit A
(the “Exercise Notice”), of the Holder’s election to exercise this Warrant.  The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder, but shall
deliver the original Warrant within five (5) Business Days
thereafter.  Execution and delivery of
the Exercise Notice with respect to less than all of the Warrant Shares shall have
the same effect as cancellation of the original Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of Warrant
Shares.  On or before the first (1st) Business Day following the date on which the Company has
received the Exercise Notice, the Company shall transmit by facsimile an
acknowledgment of confirmation of receipt of the Exercise Notice to the Holder
and 

 

 

the
Company’s transfer agent, Computershare Trust Company, N.A. (the “Transfer Agent”).  On or before the third (3rd)
Business Day following the date on which the Company has received the Exercise
Notice (the “Share Delivery Date”), the Company shall (X) provided that the Transfer
Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder,
credit such aggregate number of Warrant Shares to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account
with DTC through its Deposit Withdrawal Agent Commission system, or (Y) if
the Transfer Agent is not participating in the DTC Fast Automated Securities
Transfer Program, issue and dispatch by overnight courier to the address as
specified in the Exercise Notice, a certificate, registered in the Company’s
share register in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder is entitled pursuant to such
exercise.  Upon delivery of the Exercise
Notice, the Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which this Warrant
has been exercised, irrespective of the date such Warrant Shares are credited
to the Holder’s DTC account or the date of delivery of the certificates evidencing
such Warrant Shares, as the case may be. 
If this Warrant is submitted in connection with any exercise pursuant to
this Section 1(a) and the number of Warrant Shares represented by
this Warrant submitted for exercise is greater than the number of Warrant
Shares being acquired upon an exercise, then the Company shall as soon as
practicable and in no event later than three (3) Business Days after any
exercise and at its own expense, issue a new Warrant (in accordance with Section 7(d))
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised.  No fractional shares of Common Stock are to
be issued upon the exercise of this Warrant, but rather the number of shares of
Common Stock to be issued shall be rounded down to the nearest whole
number.  The Company shall pay any and
all taxes, as well as all fees of the Transfer Agent and DTC, which may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.

 

Upon exercise of this Warrant, the
Company shall promptly issue or cause to be issued and cause to be delivered to
or upon the written order of the Holder and in such name or names as the Holder
may designate, a certificate for the Warrant Shares issuable upon such
exercise, free of restrictive legends. 
The Holder, or any Person so designated by the Holder to receive Warrant
Shares, shall be deemed to have become the holder of record of such Warrant
Shares as of the Exercise Date.

 

(b)         Exercise Price and Number of Warrant Shares.  For purposes of
this Warrant, “Exercise Price” means $0.01 per share, subject to adjustment as provided
herein.  This Warrant shall be exercisable
for such number of Warrant Shares as shall be equal to (i) the quotient of
(A) the aggregate purchase price paid by the Holder for the purchase of
Units pursuant to the Subscription Agreement divided by (B) 85% of the
Weighted Average Price per share of Common Stock during the five Trading Days
beginning November 5, 2008, provided that such resulting price shall not
be less than $6.30, (ii) minus the number of shares of Common Stock
purchased by the Holder pursuant to the Subscription Agreement on the Issuance
Date.

 

 

(c)          Company’s Failure to Timely Deliver Securities.  If the Company
shall fail for any reason or for no reason to issue to the Holder within three (3) Business
Days of receipt of the Exercise Notice in compliance with the terms of this Section 1,
a certificate for the number of shares of Common Stock to which the Holder is
entitled and register such shares of Common Stock on the Company’s share
register or to credit the Holder’s balance account with DTC for such number of
shares of Common Stock to which the Holder is entitled upon the Holder’s
exercise of this Warrant, and if on or after such Trading Day the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of shares of Common Stock
issuable upon such exercise that the Holder anticipated receiving from the
Company (a “Buy-In”), then the Company shall, within three (3) Business
Days after the Holder’s request and in the Holder’s discretion, either (i) pay
cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so
purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such
certificate (and to issue such Warrant Shares) shall terminate, or (ii) promptly
honor its obligation to deliver to the Holder a certificate or certificates
representing such Warrant Shares and pay cash to the Holder in an amount equal
to the excess (if any) of the Buy-In Price over the product of (A) such
number of shares of Common Stock, times (B) the Closing Bid Price on the
date of exercise.

 

(d)         Payment of Exercise Price; Cashless Exercise.  The Holder shall pay the Exercise
Price by means of a “cashless exercise,” in which event the Company shall issue
to the Holder the number of Warrant Shares determined as follows:

 

	
   

  	
  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 this Warrant or, if only a portion of
this Warrant is being exercised, the portion of this Warrant being canceled (at
the date of such calculation)

 

A =                          the fair market
value of one share of the Company’s Common Stock (at the date of such calculation)

 

B =                            Exercise Price
(as adjusted to the date of such calculation)

 

For purposes of the above calculation,
the “fair market value” of one share of Common Stock shall mean (i) the
average of the closing sales prices for the shares of Common Stock on the
Nasdaq Global Market or other trading market where such security is listed or
traded as reported by Bloomberg Financial Markets (or a comparable reporting
service of national reputation selected by the Company and reasonably
acceptable to the Holder if Bloomberg Financial Markets is not then reporting
sales prices of such security) (collectively, “Bloomberg”) for the ten (10) consecutive trading days
immediately preceding such date, or (ii) if the Nasdaq Global Market is
not the principal trading market for the shares of Common Stock, the average of
the reported sales prices reported by Bloomberg on the principal trading market

 

 

for
the Common Stock during the same period, or, if there is no sales price for
such period, the last sales price reported by Bloomberg for such period, or (iii) if
neither of the foregoing applies, the last sales price of such security in the
over-the-counter market on the pink sheets or bulletin board for such security
as reported by Bloomberg, or if no sales price is so reported for such
security, the last bid price of such security as reported by Bloomberg or (iv) if
fair market value cannot be calculated as of such date on any of the foregoing
bases, the fair market value shall be as determined by the Board of Directors
of the Company in the exercise of its good faith judgment.

 

(e)          Disputes.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly issue to the Holder the number of Warrant
Shares that are not disputed.

 

(f)            Beneficial Ownership.  The Holder shall not have the right to
exercise this Warrant, to the extent that after giving effect to such exercise,
such Person (together with such Person’s affiliates) would beneficially own in
excess of 4.99% (the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to
such exercise.  The Company shall be
entitled to rely on Holder’s exercise notice as an indication that Holder will
not, pursuant to such exercise, exceed the Maximum Percentage.  For purposes of the foregoing sentence, the
aggregate number of shares of Common Stock beneficially owned by such Person
and its affiliates shall include the number of shares of Common Stock issuable
upon exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (i) exercise of the remaining, unexercised portion of this
Warrant beneficially owned by such Person and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein..  Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended. 
For purposes of this Warrant, in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares
of Common Stock as reflected in (1) the Company’s most recent Form 10-K,
Form 10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission, as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by the Company
or the Transfer Agent setting forth the number of shares of Common Stock
outstanding.  For any reason at any time,
upon the written or oral request of the Holder, the Company shall within two (2) Business
Days confirm orally and in writing to the Holder the number of shares of Common
Stock then outstanding.  In any case, the
number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder and its affiliates since the date as of which such
number of outstanding shares of Common Stock was reported.  By written notice to the Company, the Holder
may from time to time increase or decrease the Maximum Percentage to any other
percentage not in excess of 4.99% specified in such notice; provided that (i) any
such increase will not be effective until the sixty-first (61st) day after such notice is delivered to the Company, and (ii) any
such increase or decrease will apply only to the Holder.  The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 1(h) to correct this 

 

 

paragraph
(or any portion hereof) which may be defective or inconsistent with the
intended beneficial ownership limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.

 

(g)         Termination if California Proposition 10 is Approved.  In the event that
California Proposition 10 is approved by the voters in the State of California
during the election to be held on November 4, 2008, then this Warrant
shall terminate in its entirety and be of no further force or effect.

 

2.               ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant
Shares issuable upon exercise of this Warrant shall be adjusted from time to
time as follows:

 

(a)          Adjustment upon Issuance of Shares of Common Stock.  If and whenever on
or after the Subscription Date, the Company issues or sells, or in accordance
with this Section 2 is deemed to have issued or sold, any shares of
Common Stock other than Exempted Securities (including the issuance or sale of
shares of Common Stock owned or held by or for the account of the Company) for
a consideration per share (the “New Issuance
Price”) less than a price (the “Applicable
Price”) equal to the Exercise Price in effect immediately prior to
such issue or sale or deemed issuance or sale (the foregoing a “Dilutive Issuance”), then immediately after
such Dilutive Issuance, the Exercise Price then in effect shall be reduced to
an amount equal to the product of (A) the Exercise Price in effect
immediately prior to such Dilutive Issuance and (B) the quotient
determined by dividing (1) the sum of (I) the product derived by
multiplying the Exercise Price in effect immediately prior to such Dilutive
Issuance and the number of shares of Common Stock Deemed Outstanding
immediately prior to such Dilutive Issuance plus (II) the consideration,
if any, received by the Company upon such Dilutive Issuance, by (2) the
product derived by multiplying (I) the Exercise Price in effect
immediately prior to such Dilutive Issuance by (II) the number of shares
of Common Stock Deemed Outstanding immediately after such Dilutive
Issuance.  Upon each such adjustment of
the Exercise Price hereunder, the number of Warrant Shares shall be adjusted to
the number of shares of Common Stock determined by multiplying the Exercise
Price in effect immediately prior to such adjustment by the number of Warrant
Shares acquirable upon exercise of this Warrant immediately prior to such
adjustment and dividing the product thereof by the Exercise Price resulting
from such adjustment.  For purposes of
determining the adjusted Exercise Price under this Section 2(a), the
following shall be applicable:

 

(i)                                     Issuance of Options.  If
the Company in any manner grants any Options and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option is less than the Applicable Price,
then such share of Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the granting or sale of such
Option for such price per share.  For
purposes of this Section 2(a)(i), the “lowest price per share for
which one share of Common Stock is issuable upon exercise of such Options or
upon conversion, exercise or exchange of such Convertible Securities issuable
upon exercise of any 

 

 

such
Option” shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of Common
Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon
exercise of such Option.  No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of
such shares of Common Stock upon conversion, exercise or exchange of such Convertible
Securities.

 

(ii)                                  Issuance of Convertible Securities.  If the Company in any manner issues or sells
any Convertible Securities and the lowest price per share for which one share
of Common Stock is issuable upon the conversion, exercise or exchange thereof
is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the
time of the issuance or sale of such Convertible Securities for such price per
share.  For the purposes of this Section 2(a)(ii),
the “lowest price per share for which one share of Common Stock is issuable
upon the conversion, exercise or exchange thereof” shall be equal to the sum of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance or sale of
the Convertible Security and upon conversion, exercise or exchange of such
Convertible Security.  No further
adjustment of the Exercise Price or number of Warrant Shares shall be made upon
the actual issuance of such shares of Common Stock upon conversion, exercise or
exchange of such Convertible Securities, and if any such issue or sale of such
Convertible Securities is made upon exercise of any Options for which adjustment
of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a),
no further adjustment of the Exercise Price or number of Warrant Shares shall
be made by reason of such issue or sale.

 

(iii)                               Change in Option Price or Rate of Conversion.  If the purchase price provided for in any
Options, the additional consideration, if any, payable upon the issue,
conversion, exercise or exchange of any Convertible Securities, or the rate at
which any Convertible Securities are convertible into or exercisable or
exchangeable for shares of Common Stock increases or decreases at any time,
then the Exercise Price and the number of Warrant Shares in effect at the time
of such increase or decrease shall be adjusted to the Exercise Price and the number
of Warrant Shares which would have been in effect at such time had such Options
or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as
the case may be, at the time initially granted, issued or sold.  For purposes of this Section 2(a)(iii),
if the terms of any Option or Convertible Security that was outstanding as of
the date of issuance of this Warrant are 

 

 

increased or decreased in
the manner described in the immediately preceding sentence, then such Option or
Convertible Security and the shares of Common Stock deemed issuable upon
exercise, conversion or exchange thereof shall be deemed to have been issued as
of the date of such increase or decrease. 
No adjustment pursuant to this Section 2(a) shall be made if
such adjustment would result in an increase of the Exercise Price then in
effect or a decrease in the number of Warrant Shares.

 

(iv)                              Calculation of Consideration Received.  In
case any Option is issued in connection with the issue or sale of other
securities of the Company, together comprising one integrated transaction, (x) the
Options will be deemed to have been issued for a value determined by use of the
Black Scholes Option Pricing Model (the “Option Value”) and (y) the other securities issued
or sold in such integrated transaction shall be deemed to have been issued for
the difference of (I) the aggregate consideration received by the Company,
less (II) the Option Value.  If any
shares of Common Stock, Options or Convertible Securities are issued or sold or
deemed to have been issued or sold for cash, the consideration received
therefor will be deemed to be the net amount received by the Company
therefor.  If any shares of Common Stock,
Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company will be the
fair value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the Company
will be the Weighted Average Price of such security on the date of
receipt.  If any shares of Common Stock,
Options or Convertible Securities are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving
entity, the amount of consideration therefor will be deemed to be the fair
value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock, Options or
Convertible Securities, as the case may be. 
The fair value of any consideration other than cash or securities will
be determined jointly by the Company and the Holder.  If such parties are unable to reach agreement
within ten (10) days after the occurrence of an event requiring valuation
(the “Valuation Event”), the
fair value of such consideration will be determined within five (5) Business
Days after the tenth (10th) day following the Valuation Event by an
independent, reputable appraiser jointly selected by the Company and the
Holder.  The determination of such
appraiser shall be final and binding upon all parties absent manifest error and
the fees and expenses of such appraiser shall be borne by the Company.

 

(v)                                 Record Date.  If the
Company takes a record of the holders of shares of Common Stock for the purpose
of entitling them (A) to receive a dividend or other distribution payable
in shares of Common Stock,

 

 

Options or
in Convertible Securities or (B) to subscribe for or purchase shares of
Common Stock, Options or Convertible Securities, then such record date will be
deemed to be the date of the issue or sale of the shares of Common Stock deemed
to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of
subscription or purchase, as the case may be.

 

(b)   Adjustment upon Subdivision or Combination of Common
Stock.  If the Company at
any time on or after the Subscription Date subdivides (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. 
If the Company at any time on or after the Subscription Date combines
(by any stock split, stock dividend, recapitalization, reorganization, scheme,
arrangement or otherwise) one or more classes of its outstanding shares of
Common Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination will be proportionately increased and the
number of Warrant Shares will be proportionately decreased.  Any adjustment under this Section 2(b) shall
become effective at the close of business on the date the subdivision or
combination becomes effective.

 

(c)   Other
Events.  If any event occurs of the
type contemplated by the provisions of this Section 2 but not
expressly provided for by such provisions, then the Company’s Board of
Directors will make an appropriate adjustment in the Exercise Price and the number
of Warrant Shares so as to protect the rights of the Holder; provided that no
such adjustment pursuant to this Section 2(a) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2.

 

3.     RIGHTS
UPON DISTRIBUTION OF ASSETS.  If the
Company shall declare or make any dividend or other distribution of its assets
(or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of
a dividend, stock split, spin off, subdivision, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the
issuance of this Warrant, then, in each such case:

 

(a)   any
Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the
close of business on such record date, to a price determined by multiplying
such Exercise Price by a fraction of which (i) the numerator shall be the
Closing Bid Price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined
in good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the Closing Bid Price of
the shares of Common Stock on the Trading Day immediately preceding such record
date; and

 

 

(b)   the
number of Warrant Shares shall be increased or decreased to a number of shares
equal to the number of shares of Common Stock obtainable immediately prior to
the close of business on the record date fixed for the determination of holders
of shares of Common Stock entitled to receive the Distribution multiplied by
the reciprocal of the fraction set forth in the immediately preceding paragraph
(a); provided that in the event that the
Distribution is of shares of Common Stock (or common stock) (“Other Shares of Common Stock”) of a company whose common
shares are traded on a national securities exchange or a national automated
quotation system, then the Holder may elect to receive a warrant to purchase
Other Shares of Common Stock in lieu of an adjustment in the number of Warrant
Shares, the terms of which shall be identical to those of this Warrant, except
that such warrant shall be exercisable into the number of shares of Other
Shares of Common Stock that would have been payable to the Holder pursuant to
the Distribution had the Holder exercised this Warrant immediately prior to
such record date and with an aggregate exercise price equal to the product of the
amount by which the exercise price of this Warrant was decreased with respect
to the Distribution pursuant to the terms of the immediately preceding
paragraph (a) and the number of Warrant Shares calculated in accordance
with the first part of this paragraph (b).

 

4.     PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)   Purchase
Rights.  In addition to any
adjustments pursuant to Section 2 above, if at any time the Company
grants, issues or sells any rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of shares of Common
Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is
taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares of Common
Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

 

(b)   In connection with any Fundamental Transaction, the
Company shall make appropriate provision so that this Warrant shall thereafter
be exercisable for shares of the Successor Entity based upon the conversion
ratio or other consideration payable in the Fundamental Transaction. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations
on the exercise of this Warrant.  Without
limiting the foregoing, in connection with a Fundamental Transaction that
constitutes a Change of Control, at the request of the Holder delivered before
the 90th day after such Fundamental Transaction, the Company (or the Successor
Entity) shall purchase this Warrant from the Holder by paying to the Holder,
within five Business Days after such request (or, if later, on the effective
date of the Fundamental Transaction), cash in an amount equal to the Black
Scholes Value of the remaining unexercised portion of this Warrant on the date
of such Fundamental Transaction.

 

In the event that any
person becomes a Parent Entity of the Company, such person shall assume all of
the obligations of the Company under this Warrant with the same effect as if
such person had been named as the Company herein.

 

 

5.     NON-CIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation, Bylaws
or through any reorganization, transfer of assets, consolidation, merger,
scheme of arrangement, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms of this Warrant, and will at all times in good faith carry out all
the provisions of this Warrant and take all action as may be required to
protect the rights of the Holder. 
Without limiting the generality of the foregoing, the Company (i) shall
not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, (ii) shall
take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable shares of
Common Stock upon the exercise of this Warrant, and (iii) shall, so long
as this Warrant is outstanding, take all action necessary to reserve and keep
available out of its authorized and unissued shares of Common Stock, solely for
the purpose of effecting the exercise of this Warrant, 100% of the number of
shares of Common Stock issuable upon exercise of this Warrant then outstanding
(without regard to any limitations on exercise).

 

6.     WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. 
Except as otherwise specifically provided herein, the Holder, solely in
such Person’s capacity as a holder of this Warrant, shall not be entitled to
vote or receive dividends or be deemed the holder of share capital of the
Company for any purpose, nor shall anything contained in this Warrant be
construed to confer upon the Holder, solely in such Person’s capacity as the
Holder of this Warrant, any of the rights of a stockholder of the Company or
any right to vote, give or withhold consent to any corporate action (whether
any reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the Holder of
the Warrant Shares which such Person is then entitled to receive upon the due
exercise of this Warrant.  In addition,
nothing contained in this Warrant shall be construed as imposing any
liabilities on the Holder to purchase any securities (upon exercise of this
Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

 

7.     REISSUANCE
OF WARRANTS.

 

(a)   Transfer
of Warrant.  If this Warrant is to be
transferred, the Holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of the Holder a new
Warrant (in accordance with Section 7(d)), registered as the Holder
may request, representing the right to purchase the number of Warrant Shares
being transferred by the Holder and, if less then the total number of Warrant
Shares then underlying this Warrant is being transferred, a new Warrant (in
accordance with Section 7(d)) to the Holder representing the right
to purchase the number of Warrant Shares not being transferred.

 

(b)   Lost,
Stolen or Mutilated Warrant.  Upon
receipt by the Company of evidence reasonably satisfactory to the Company of
the loss, theft, destruction or mutilation of this Warrant, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary form and, in the case of mutilation, upon surrender
and cancellation of this Warrant, the Company shall execute and deliver to the
Holder a new Warrant 

 

 

(in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this
Warrant.

 

(c)   Exchangeable
for Multiple Warrants.  This Warrant
is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d))
representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent
the right to purchase such portion of such Warrant Shares as is designated by
the Holder at the time of such surrender; provided, however, that no Warrants
for fractional shares of Common Stock shall be given.

 

(d)   Issuance
of New Warrants.  Whenever the
Company is required to issue a new Warrant pursuant to the terms of this
Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall
represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new
Warrant being issued pursuant to Section 7(a) or Section 7(c),
the Warrant Shares designated by the Holder which, when added to the number of
shares of Common Stock underlying the other new Warrants issued in connection
with such issuance, does not exceed the number of Warrant Shares then
underlying this Warrant), (iii) shall have an issuance date, as indicated
on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall
have the same rights and conditions as this Warrant.

 

8.     NOTICES.  Whenever notice is required to be given under
this Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 7 of Annex I to the Subscription Agreement.  The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including
in reasonable detail a description of such action and the reason therefore.

 

9.     AMENDMENT
AND WAIVER.  Except as otherwise
provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the Holder.

 

10.   GOVERNING
LAW.  This Warrant shall be governed
by and construed and enforced in accordance with, and all questions concerning
the construction, validity, interpretation and performance of this Warrant
shall be governed by, the internal laws of the State of New York, without
giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York.

 

11.   CONSTRUCTION;
HEADINGS.  This Warrant shall be
deemed to be jointly drafted by the Company and the Holder and shall not be
construed against any person as the drafter hereof.  The headings of this Warrant are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.

 

 

12.   DISPUTE
RESOLUTION.  In the case of a dispute
as to the determination of the Exercise Price or the arithmetic calculation of
the Warrant Shares, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within two (2) Business Days of
receipt of the Exercise Notice giving rise to such dispute, as the case may be,
to the Holder.  If the Holder and the
Company are unable to agree upon such determination or calculation of the
Exercise Price or the Warrant Shares within three Business Days of such
disputed determination or arithmetic calculation being submitted to the Holder,
then the Company shall, within two (2) Business Days submit via facsimile (a) the
disputed determination of the Exercise Price to an independent, reputable
investment bank selected by the Company and approved by the Holder or (b) the
disputed arithmetic calculation of the Warrant Shares to the Company’s
independent, outside accountant.  The
Company shall cause at its expense the investment bank or the accountant, as
the case may be, to perform the determinations or calculations and notify the
Company and the Holder of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations.  Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.

 

13.   REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this
Warrant, at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual damages for any failure by the Company to comply with
the terms of this Warrant.

 

14.   TRANSFER.  Subject to applicable laws, this Warrant may
be offered for sale, sold, transferred or assigned without the consent of the
Company.  This Warrant and all rights
hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto as Exhibit B to any transferee designated by Holder.  Any purported transfer of all or any portion
of this Warrant in violation of the provisions of this Warrant shall be null
and void.

 

15.   CERTAIN
DEFINITIONS.  For purposes of this
Warrant, the following terms shall have the following meanings:

 

(a)   “Black Scholes Value” means the value of
this Warrant based on the Black and Scholes Option Pricing Model obtained from
the “OV” function on Bloomberg (i) a price per share of Common Stock equal
to the Weighted Average Price 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 consummation of the applicable Fundemental Transaction and (iii) an
expected volatility equal to the 30 day volatility obtained from the HVT
function on Bloomberg determined as of the Trading Day immediately following
the public announcement of the applicable Fundamental Transaction.

 

(b)   “Bloomberg” means Bloomberg Financial
Markets.

 

(c)   “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.

 

 

(d)   “California Proposition 10” means the
California Alternative Fuels and Renewable Energy Initiative.

 

(e)   “Change of Control” means any Fundamental
Transaction other than (A) any reorganization, recapitalization or
reclassification of the Common Stock, in which holders of the Company’s voting
power immediately prior to such reorganization, recapitalization or
reclassification continue after such reorganization, recapitalization or
reclassification to hold publicly traded securities and, directly or
indirectly, the voting power of the surviving entity or entities necessary to
elect a majority of the members of the board of directors (or their equivalent
if other than a corporation) of such entity or entities, or (B) pursuant
to a migratory merger effected solely for the purpose of changing the
jurisdiction of incorporation of the Company.

 

(f)    “Closing Bid Price” and “Closing Sale Price” means, for any security as of
any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or the last trade price,
respectively, of such security prior to 4:00:00 p.m., New York time, as
reported by Bloomberg, or, if the Principal Market is not the principal
securities exchange or trading market for such security, the last closing bid
price or last trade price, respectively, of such security on the principal
securities exchange or trading market where such security is listed or traded
as reported by Bloomberg, or if the foregoing do not apply, the last closing
bid price or last trade price, respectively, of such security in the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg, or, if no closing bid price or last trade price,
respectively, is reported for such security by Bloomberg, the average of the
bid prices, or the ask prices, respectively, of any market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). 
If the Closing Bid Price or the Closing Sale Price cannot be calculated
for a security on a particular date on any of the foregoing bases, the Closing
Bid Price or the Closing Sale Price, as the case may be, of such security on
such date shall be the fair market value as mutually determined by the Company
and the Holder.  All such determinations
to be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation
period.

 

(g)   “Common Stock” means (i) the Company’s
shares of Common Stock, par value $0.0001 per share, and (ii) any share
capital into which such Common Stock shall have been changed or any share
capital resulting from a reclassification of such Common Stock.

 

(h)   “Eligible Market” means the Principal Market,
The New York Stock Exchange, Inc., The American Stock Exchange, The NASDAQ
Global Select Market or The NASDAQ Capital Market.

 

(i)    “Exempted Securities” means  (i) shares of Common Stock or options to
employees, officers or directors of the Company pursuant to any existing stock
or option plan, or any stock or option plan duly adopted by a majority of the
non-employee members of the Board of Directors of the Company or a majority of
the members of a committee of non-employee directors established for such
purpose, (b) securities issued upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or securities exercisable or
exchangeable for or

 

 

convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that such
securities have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the exercise, exchange or
conversion price of any such securities, and (c) securities issued
pursuant to acquisitions or strategic transactions, provided any such issuance
shall only be to a Person which is, itself or through its subsidiaries, an
operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities.

 

(j)             “Expiration Date” means November 14, 2008.  In the event that the result of the vote with
respect to California Proposition 10 is not declared by 9:00 a.m., New
York time, on November 5, 2008, then the Expiration Date shall be extended
one Trading Day for each Trading Day that such result is not declared.

 

(k)          “Fundamental Transaction” means that the Company shall, directly or indirectly,
in one or more related transactions, (i) consolidate or merge with or into
(whether or not the Company is the surviving corporation) another Person, or (ii) sell,
assign, transfer, convey or otherwise dispose of all or substantially all of
the properties or assets of the Company to another Person, or (iii) allow another Person to make a
purchase, tender or exchange offer that is accepted by the holders of more than
the 50% of the outstanding shares of Common Stock (not
including any shares of Common Stock held by the Person or Persons making or
party to, or associated or affiliated with the Persons making or party to, such
purchase, tender or exchange offer), or (iv) consummate a stock purchase
agreement or other
business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another
Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other
Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock purchase agreement or other business combination),
(v) reorganize,
recapitalize or reclassify its Common Stock, or (vi) any “person” or “group”
(as these terms are used for purposes of Sections 13(d) and 14(d) of
the Exchange Act) is or shall become the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Common Stock; provided, however, that with respect to T. Boone Pickens or
any Affiliate of T. Boone Pickens, such percentage shall not apply until the
Common Stock of the Company is no longer publicly traded, upon which date a
Fundamental Transaction shall be deemed to have occurred.

 

(l)             “Parent Entity” of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market,
or, if there is more than one such Person or Parent Entity, the Person or
Parent Entity with the largest public market capitalization as of the date of
consummation of the Fundamental Transaction.

 

(m)       “Person”
means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other
entity and a government or any department or agency thereof.

 

 

(n)         “Principal Market”
means The NASDAQ Global Market.

 

(o)         “Successor Entity”
means the Person (or, if so elected by the Holder, the Parent
Entity) formed by, resulting from or surviving any Fundamental Transaction or
the Person (or, if so elected by the Holder, the Parent Entity) with which such
Fundamental Transaction shall have been entered into.

 

(p)         “Trading Day”
means any day on which the Common Stock are traded on the Principal Market, or,
if the Principal Market is not the principal trading market for the Common
Stock, then on the principal securities exchange or securities market on which
the Common Stock are then traded; provided that “Trading Day” shall not include
any day on which the Common Stock are scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock are suspended
from trading during the final hour of trading on such exchange or market (or if
such exchange or market does not designate in advance the closing time of
trading on such exchange or market, then during the hour ending at 4:00:00 p.m.,
New York time).

 

(q)         “Weighted Average Price”
means, for any security as of any date, the dollar volume-weighted average
price for such security on the Principal Market during the period beginning at
9:30:01 a.m., New York City time, and ending at 4:00:00 p.m., New
York City time, as reported by Bloomberg through its “Volume at Price” function
or, if the foregoing does not apply, the dollar volume-weighted average price
of such security in the over-the-counter market on the electronic bulletin
board for such security during the period beginning at 9:30:01 a.m., New York
City time, and ending at 4:00:00 p.m., New York City time, as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the “pink sheets” by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). 
If the Weighted Average Price cannot be calculated for such security on
such date on any of the foregoing bases, the Weighted Average Price of such
security on such date shall be the fair market value as mutually determined by
the Company and the Required Holders.  If
the Company and the Required Holders are unable to agree upon the fair market value
of such security, then such dispute shall be resolved pursuant to Section 12
with the term “Weighted Average Price” being substituted for the term “Exercise
Price.” All such determinations shall be appropriately adjusted for any share
dividend, share split or other similar transaction during such period.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly
executed as of the Issuance Date set out above.

 

 

	
   

  	
  CLEAN ENERGY FUELS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE
THIS

WARRANT TO PURCHASE COMMON STOCK

 

CLEAN ENERGY FUELS CORP.

 

The undersigned holder
hereby exercises the right to purchase
                                  
of the shares of Common Stock (“Warrant
Shares”) of Clean Energy Fuels Corp., a Delaware corporation (the “Company”), evidenced by the attached
Warrant to Purchase Common Stock (the “Warrant”).  Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.

 

1.               Form of Exercise Price. The Holder intends that payment of the
Exercise Price shall be made as a “Cashless Exercise” with respect to
                              
Warrant Shares.

 

2.               Delivery of Warrant Shares.  The
Company shall deliver to the holder
                    
Warrant Shares in accordance with the terms of the Warrant.

 

	
  Date:

  	
                                              ,                      

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Name of Registered Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
				

 

 

ACKNOWLEDGMENT

 

The Company
hereby acknowledges this Exercise Notice and hereby directs Computershare Trust
Company, N.A. to issue the above indicated number of shares of Common Stock in
accordance with the Transfer Agent Instructions dated
            , 2008
from the Company and acknowledged and agreed to by Computershare Trust Company,
N.A.

 

 

	
   

  	
  CLEAN ENERGY FUELS CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply the
required information.  Do not use this
form to purchase shares.)

 

FOR GOOD AND VALUABLE CONSIDERATION, the
receipt and sufficiency of which are hereby acknowledged, the foregoing Warrant
and all rights evidenced thereby are hereby assigned to:

 

 

	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  (Please Print)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  	
  (Please Print)

  

 

 

Dated:
                              ,
    

 

 

	
  Holder’s Signature:

  	
   

  	
   

  

 

Holder’s Address:

 

 

[NOTE:  The signature to this
Assignment Form must correspond with the name as it appears on the face of
the foregoing Warrant, without alteration or enlargement or any change
whatsoever.  Officers of corporations and
those acting in a fiduciary or other representative capacity should file proper
evidence of authority to assign the foregoing Warrant.]Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

Clean Energy Fuels Corp.

3020 Old Ranch Parkway, Suite 200

Seal Beach, California 90740

 

Gentlemen:

 

The undersigned (the “Investor”) hereby confirms its agreement
with you as follows:

 

1.             This Subscription Agreement, including the
Terms and Conditions For Purchase of the Shares and the Warrants attached
hereto as Annex I (collectively, this “Agreement”)
is made as of the date set forth below between Clean Energy Fuels Corp., a Delaware corporation (the “Company”), and the Investor.

 

2.             The
Company has authorized the sale and issuance to certain investors of (i) up
to an aggregate of 4,419,192 shares (each a “Share,”
and collectively, the “Shares”) of its
common stock, par value $0.0001 per share (the “Common Stock”),
(ii) warrants (the “Series I Warrants”)
to purchase up to an aggregate of 3,314,394 shares of Common Stock in the ratio
of 0.75 shares per share of Common Stock, in substantially the form attached
hereto as Exhibit B, and (iii) warrants (the “Series II Warrants”) to purchase up to an aggregate of
1,136,364 shares of Common Stock, in the ratio of up to 0.257143 shares per
share of Common Stock, in substantially the form attached hereto as Exhibit C,
subject to adjustment by the Company’s Board of Directors, or a committee
thereof, for a purchase price of $7.92 per unit (the “Purchase
Price”).  The Series I
Warrants, together with the Series II Warrants, are collectively referred
to herein as the “Warrants.”  The Shares issuable upon exercise of the
Warrants are referred to herein as the “Warrant Shares”
and, together with the Shares and the Warrants, are referred to herein as the “Securities”.  The
fractional amount of each of the Series I Warrants and the Series II
Warrants are referred to herein as  the “Applicable  Warrant Ratio”

 

3.             The offering and sale of the Shares and the
Warrants (the “Offering”) are
being made pursuant to (1) an effective Registration Statement on Form S-3
(including the Prospectus contained therein (the “Base
Prospectus”), File No. 333-152306, the “Registration Statement”) filed by the
Company with the Securities and Exchange Commission (the “Commission”), (2) if applicable,
certain “free writing prospectuses” (as that term is defined in Rule 405
the Securities Act of 1933, as amended (the “Act”)),
that have been or will be filed, if required, with the Commission and delivered
to the Investor on or prior to the date hereof, (3) a Prospectus
Supplement (the “Prospectus Supplement”
and together with the Base Prospectus, the “Prospectus”)
containing certain supplemental information regarding the Shares and terms of
the Offering that will be filed with the Commission and delivered to the
Investor (or made available to the Investor by the filing by the Company of an
electronic version thereof with the Commission), along with the Company’s
counterpart to this Agreement, and (4) if the Company has filed an
abbreviated registration statement to register additional securities pursuant
to Rule 462(b) (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration Statement.

 

4.             The Company and the Investor agree that the
Investor will purchase from the Company and the Company will issue and sell to
the Investor the Shares and the Warrants set forth below for the 

 

 

aggregate purchase price set
forth below.  The Shares and the Warrants
shall be purchased pursuant to the Terms and Conditions for Purchase of Shares
and Warrants attached hereto as Annex I and incorporated herein by this
reference as if fully set forth herein. 
The Investor acknowledges that the Offering is not being underwritten by
the placement agents (the “Placement Agents”)
named in the Prospectus Supplement and that there is no minimum offering amount.

 

5.             The manner of settlement of the Shares
included in the Shares and the Warrants purchased by the Investor shall be as
follows:

 

Delivery versus payment (“DVP”) through the Depository Trust Company (“DTC”) (i.e., at
closing, the Company shall issue Shares registered in the Investor’s name and
address as set forth below and released by Computershare Trust Company, N.A.
(the “Transfer Agent”) directly to the account(s) at
Lazard Capital Markets LLC (“LCM”)
identified by the Investor; upon receipt of such Shares, LCM shall promptly
electronically deliver such shares to the Investor, and simultaneously
therewith payment shall be made by LCM 
by wire transfer to the Company)  NO LATER THAN ONE (1) BUSINESS DAY AFTER THE
EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR
SHALL:

 

	
   

  	
  (I)

  	
  NOTIFY
  LCM OF THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING
  PURCHASED BY SUCH INVESTOR, AND

  
	
   

  	
   

  	
   

  
	
   

  	
  (II)

  	
  CONFIRM
  THAT THE ACCOUNT OR ACCOUNTS AT LCM TO BE CREDITED WITH THE SHARES BEING
  PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE
  PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE INVESTOR.

  

 

IT IS THE
INVESTOR’S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR
CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR
SETTLEMENT BY WAY OF DVP IN A TIMELY MANNER. 
IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE PURCHASE PRICE FOR THE
SHARES AND THE WARRANTS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT IN
A TIMELY MANNER, THE SHARES AND THE WARRANTS MAY NOT BE DELIVERED AT
CLOSING TO THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE OFFERING
ALTOGETHER.

 

6.             The
executed Warrants shall be delivered in accordance with the respective terms
thereof.

 

7.             The
Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years
with the Company or persons known to it to be affiliates of the Company, (b) it
is not a FINRA member or an Associated Person (as such term is defined under
the FINRA Membership and Registration Rules Section 1011) as of the
Closing, and (c) neither the Investor nor any group of Investors, if any
(as identified in a public filing made with the Commission) of which the
Investor is a part in connection with the Offering, acquired, or obtained the
right to acquire, 20% or more of the Common Stock (or securities convertible
into or exercisable for Common Stock) or the voting power of the Company on a
post-transaction basis.  Exceptions:

 

 

(If no exceptions, write “none.”
If left blank, response will be deemed to be “none.”)

 

8.             The Investor represents that it has
received (or otherwise had made available to it by the filing by the Company of
an electronic version thereof with the Commission) the Base Prospectus, dated July 29,
2008, which is a part of the Company’s Registration Statement, the documents
incorporated by reference therein, the Prospectus Supplement, dated October 28,
2008 and any free writing prospectus (collectively, the “Disclosure Package”), prior to or in
connection with the receipt of this Agreement. 
The Investor acknowledges that, prior to the delivery of this Agreement
to the Company, the Investor will receive certain additional information regarding
the Offering, including pricing information (the “Offering Information”). Such information may be provided to
the Investor by any means permitted under the Act, including the Prospectus
Supplement, a free writing prospectus and oral communications.

 

9.             No offer by the Investor to buy the
Shares and the Warrants will be accepted and no part of the Purchase Price will
be delivered to the Company until the Investor has received the Offering
Information and the Company has accepted such offer by countersigning a copy of
this Agreement, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to the Company (or LCM
on behalf of the Company) sending (orally, in writing or by electronic mail)
notice of its acceptance of such offer. 
An indication of interest will involve no obligation or commitment of
any kind until the Investor has been delivered the Offering Information and
this Agreement is accepted and countersigned by or on behalf of the Company.

 

10.          For so long
as any Warrants remain outstanding, the Company shall not, in any manner, issue
or sell any rights, warrants or options to subscribe for or purchase Common
Stock, or directly or indirectly convertible into or exchangeable for Common
Stock at a price which resets as a function of market price of the Common
Stock, unless the conversion, exchange or exercise price of any such security
cannot be less than the then applicable Exercise Price (as defined in the
Warrants) with respect to the Common Stock into which any Warrant is
exercisable.

 

 

	
  Number of Shares:

  	
   

  	
   

  
	
  Number of Series I
  Warrants:

  	
   

  	
   

  
	
  Number of Series II
  Warrants:

  	
   

  	
   

  
	
  Purchase Price Per Share:
  $

  	
  7.92

  	
   

  
	
  Aggregate Purchase Price:
  $

  	
   

  	
   

  
							

 

Please confirm that the
foregoing correctly sets forth the agreement between us by signing in the space
provided below for that purpose.

 

 

	
   

  	
  Dated as of:
  October 28, 2008

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INVESTOR

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Print Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
   

  
						

 

 

Agreed and Accepted

this      day of October,
2008:

 

 

CLEAN
ENERGY FUELS CORP.

 

 

	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  

 

 

ANNEX I

 

TERMS AND CONDITIONS FOR PURCHASE OF THE SHARES AND THE
WARRANTS

 

1.             Authorization
and Sale of the Shares and the Warrants. 
Subject to the
terms and conditions of this Agreement, the Company has authorized the sale of
the Shares and the Warrants.

 

2.             Agreement
to Sell and Purchase the Shares and the Warrants; Placement Agents.

 

2.1          At the Closing (as defined in Section 3.1),
the Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the respective number
of Shares and Warrants set forth on the last page of the Agreement to
which these Terms and Conditions for Purchase of Shares and Warrants are
attached as Annex I (the “Signature
Page”) for the aggregate purchase price therefor set forth on the
Signature Page.

 

2.2          The Company proposes to enter into
substantially this same form of Subscription Agreement with certain other
investors (the “Other Investors”)
and expects to complete sales of Securities to them.  The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the “Investors,” and this Agreement and the
Subscription Agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the “Agreements.”

 

2.3          Investor
acknowledges that the Company has agreed to pay Lazard Capital Markets
LLC (“LCM”)
and W.R. Hambrecht + Co., LLC (“WRHCo” together
with LCM, the “Placement Agents”) a fee (the “Placement Fee”) in respect of the sale of
the Shares and the Warrants to the Investor.

 

2.4          The Company has entered into a
Placement Agent Agreement, dated the date hereof (the “Placement Agreement”), with the Placement
Agents that contains certain representations, warranties, covenants and
agreements of the Company that, subject to Section 5 hereof, may be relied
upon by the Investor, which shall be a third party beneficiary thereof.  The Company confirms that neither it nor any
other Person acting on its behalf has provided the Investor with any information
that constitutes or could reasonably be expected to constitute material,
nonpublic information, except as will be disclosed in the Prospectus and the
Company’s Form 8-K filed with the Commission in connection with the
Offering.  The Company understands and
confirms that the Investor will rely on the foregoing representations in
effecting transactions in securities of the Company.

 

3.             Closings
and Delivery of the Shares, Warrants and Funds.

 

3.1          Closing.  The completion of the purchase and sale of the Shares and the Warrants
(the “Closing”) shall occur at a
place and time (the “Closing Date”)
to be specified by the Company and the Placement Agents, and of which the
Investor will be notified in advance by the Placement Agents, in accordance
with Rule 15c6-1 promulgated under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”).  At the Closing, (a) the Company shall
cause the Transfer Agent to deliver to the Investor the number of Shares set
forth on the Signature Page registered in the name of the Investor or, if
so indicated on the Investor Questionnaire attached hereto as Exhibit A,
in the name of a nominee designated by the Investor, (b) the Company shall
cause to be delivered to the Investor each of the Series I Warrant and the
Series II Warrant to purchase a number of whole Warrant Shares determined
by multiplying the number of Shares set forth on the signature page by the

 

 

Applicable Warrant Ratio and rounding down to
the nearest whole number and (c) the aggregate purchase price for the
Shares and the Warrants being purchased by the Investor will be delivered by or
on behalf of the Investor to the Company.

 

3.2          Conditions
to the Company’s Obligations. 
(a)  The Company’s obligation to issue and sell the Shares and
the Warrants to the Investor shall be subject to: (i) the receipt by the
Company of the purchase price for the Shares and the Warrants being purchased
hereunder as set forth on the Signature Page and (ii) the accuracy of
the representations and warranties made by the Investor and the fulfillment of
those undertakings of the Investor to be fulfilled prior to the Closing Date.

 

(b)           Conditions to the
Investor’s Obligations.  The
Investor’s obligation to purchase the Shares and the Warrants will be subject to the condition that the Placement
Agents shall not have: (a) terminated the Placement Agreement pursuant to
the terms thereof or (b) determined that the conditions to the closing in
the Placement Agreement have not been satisfied.  The
Investor’s obligations are expressly not conditioned on the purchase by any or
all of the Other Investors of the Shares that they have agreed to purchase from
the Company.

 

3.3          Delivery of
Funds.

 

Delivery Versus Payment through The Depository Trust Company.  The Investor has elected to settle the Shares
purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the
execution of this Agreement by the Investor and the Company, and
the Investor shall confirm that the account or accounts at LCM to be
credited with the Shares being purchased by the Investor have a minimum balance
equal to the aggregate purchase price for the Shares and the Warrants being purchased by the
Investor.

 

3.4          Delivery of
Shares.

 

Delivery
Versus Payment through The Depository Trust Company.  The
Investor has elected to settle the
Shares purchased by such Investor by delivery versus payment through DTC, no later than one (1) business day after the
execution of this Agreement by the Investor and the Company, and
the Investor shall notify LCM of the account or accounts at LCM to be credited
with the Shares being purchased by such Investor.  On the Closing Date, the Company shall
deliver the Shares to the Investor through DTC directly to the account(s) at
LCM identified by Investor and simultaneously therewith payment shall be made
by LCM by wire transfer to the Company.

 

4.             Representations,
Warranties and Covenants of the Investor.

 

The Investor
acknowledges, represents and warrants to, and agrees with, the Company and the
Placement Agents that:

 

4.1          The
Investor (a) is knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions
with respect to, investments in securities presenting an investment decision
like that involved in the purchase of the Shares and the Warrants, including investments in securities issued by the
Company and investments in comparable companies, (b) has answered all
questions on the Signature Page and the Investor Questionnaire and the
answers thereto are true and correct as of the date hereof and will be true and
correct as of the Closing Date and (c) in connection 

 

 

with its decision to purchase
the respective number of Shares and Warrants set forth on the Signature Page,
has received and is relying solely upon (i) the Disclosure Package and the
documents incorporated by reference therein and (ii) the Offering
Information.

 

4.2          (a) No action has been or will be
taken in any jurisdiction outside the United States by the Company or the
Placement Agents that would permit an offering of the Shares and the Warrants,
or possession or distribution of offering materials in connection with the
issue of the Securities in any jurisdiction outside the United States where
action for that purpose is required, (b) if the Investor is outside the
United States, it will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers the
Shares and the Warrants or has in its possession or distributes any offering
material, in all cases at its own expense and (c) the Placement Agents are
not authorized to make and have not made any representation, disclosure or use
of any information in connection with the issue, placement, purchase and sale
of the Shares and the Warrants, except as set forth or incorporated by
reference in the Base Prospectus or the Prospectus Supplement.

 

4.3          (a) The Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (b) this
Agreement constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as to the
enforceability of any rights to indemnification or contribution that may be
violative of the public policy underlying any law, rule or regulation
(including any federal or state securities law, rule or regulation).

 

4.4          The Investor understands that nothing
in this Agreement, the Prospectus, the Disclosure Package, the Offering
Information or any other materials presented to the Investor in connection with
the purchase and sale of the Shares and the Warrants constitutes legal, tax or
investment advice.  The Investor has
consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of the Shares and the Warrants.  The
Investor also understands that there is no established public trading market
for the Warrants being offered in the Offering, and that the Company does not
expect such a market to develop.  In
addition, the Company does not intend to apply for listing the Warrants on any
securities exchange.  Without an active
market, the liquidity of the Warrants will be limited.

 

4.5          Since the date on which the Placement
Agents first contacted such Investor about the Offering, the Investor has not
engaged in any purchases or sales of the securities of the Company (including,
without limitation, any Short Sales (as defined herein) involving the Company’s
securities), and has not violated its obligations of confidentiality.  The Investor covenants that it will not
engage in any purchases or sales of the securities of the Company (including
Short Sales) or disclose any information about the Offering (other than to its
advisors that are under a legal obligation of confidentiality) prior to the
time that the transactions contemplated by this Agreement are publicly
disclosed.  Each Investor agrees that it
will not use any of the Securities acquired pursuant to this Agreement to cover
any short position in the Common Stock if doing so would be in violation of applicable
securities laws.  For purposes hereof, “Short
Sales” include, without limitation, all “short sales” as defined in Rule 200
promulgated under Regulation SHO under the Exchange Act, whether or not against
the box, and all types of direct and indirect stock pledges, forward sales
contracts, options, 

 

 

puts,
calls, short sales, swaps, “put equivalent positions” (as defined in Rule 16a-1(h) under
the Exchange Act) and similar arrangements (including on a total return basis),
and sales and other transactions through non-US broker dealers or foreign
regulated brokers.

 

5.             Acknowledgement
Regarding Investors’ Trading Activity.  Anything in this Agreement or elsewhere herein
to the contrary notwithstanding, but subject to compliance by the Investors
with applicable law and the provisions of this Agreement, it is understood and
acknowledged by the Company (i) that none of the Investors have been asked
by the Company to agree, nor has any Investor agreed with the Company, to
desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company
or to hold the Securities for any specified term; (ii) that past or future
open market or other transactions by any Investor, including, without
limitation, short sales or “derivative” transactions, before or after the
closing of this or future private placement transactions, may negatively impact
the market price of the Company’s publicly-traded securities; (iii) that
any Investor, and counter-parties in “derivative” transactions to which any
such Investor is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iv) that each Investor shall not be
deemed to have any affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. 
The Company further understands and acknowledges that (a) one or
more Investors may engage in hedging and/or trading activities at various times
during the period that the Securities are outstanding, including, without
limitation, during the periods that the value of the Warrant Shares deliverable
with respect to the Warrants are being determined and (b) such hedging
and/or trading activities, if any, can reduce the value of the existing shareholders’
equity interest in the Company both at and after the time the hedging and/or
trading activities are being conducted. 
The Company acknowledges that such aforementioned hedging and/or trading
activities do not constitute a breach of this Agreement, the Warrants or any of
the documents executed in connection herewith.

 

6.             Survival of Representations,
Warranties and Agreements; Third Party Beneficiary.  Notwithstanding any investigation made by any party to this Agreement
or by the Placement Agents, all covenants, agreements, representations and
warranties made by the Company and the Investor herein will survive the
execution of this Agreement, the delivery to the Investor of the Shares
and the Warrants being purchased and the payment
therefor.  The Placement Agents and
Lazard Fréres & Co. shall be third party beneficiaries with respect to
the representations, warranties and agreements of the Investor in Section 4
hereof.

 

7.             Notices.  All notices, requests, consents and other communications hereunder will
be in writing, will be mailed (a) if within the domestic United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile or (b) if delivered from
outside the United States, by International Federal Express or facsimile, and
will be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if
delivered by nationally recognized overnight carrier, one business day after so
mailed, (iii) if delivered by International Federal Express, two business
days after so mailed and (iv) if delivered by facsimile, upon electronic
confirmation of receipt and will be delivered and addressed as follows:

 

 

	
   

  	
  (a)

  	
  if to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Clean Energy
  Fuels Corp.

  
	
   

  	
   

  	
  3020 Old
  Ranch Parkway, Suite 200

  
	
   

  	
   

  	
  Seal Beach,
  California 90740

  
	
   

  	
   

  	
  Attention:
  Harrison Clay, Esq.

  
	
   

  	
   

  	
  Facsimile:
  (562) 493-4532

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with copies to (which
  shall not constitute notice):

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Morrison &
  Foerster LLP

  
	
   

  	
   

  	
  425 Market
  Street

  
	
   

  	
   

  	
  San
  Francisco, California 94105-2482

  
	
   

  	
   

  	
  Attention:
  Andrew D. Thorpe, Esq.

  
	
   

  	
   

  	
  Facsimile:
  (415) 268-7522

  

 

(b)       if to the Investor, at its address on the Signature Page hereto,
or at such other address or addresses as may have been furnished to the Company
in writing.

 

8.             Changes.  This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

 

9.             Headings.  The headings of the various sections of this Agreement have been
inserted for convenience of reference only and will not be deemed to be part of
this Agreement.

 

10.          Severability.  In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein will not in any way
be affected or impaired thereby.

 

11.          Governing
Law.  This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of New York, without
giving effect to the principles of conflicts of law that would require the
application of the laws of any other jurisdiction.

 

12.          Counterparts.  This Agreement may be executed in two or more counterparts, each of
which will constitute an original, but all of which, when taken together, will
constitute but one instrument, and will become effective when one or more
counterparts have been signed by each party hereto and delivered to the other
parties.  The Company and the Investor
acknowledge and agree that the Company shall deliver its counterpart to the
Investor along with the Prospectus Supplement (or the filing by the Company of
an electronic version thereof with the Commission).

 

13.          Confirmation
of Sale.  The Investor acknowledges and agrees that such
Investor’s receipt of the Company’s counterpart to this Agreement, together
with the Prospectus Supplement (or the filing by the Company of an electronic
version thereof with the Commission), shall constitute written confirmation of
the Company’s sale of Shares and Warrants to such Investor.

 

14.          Press
Release.  The Company and the Investor agree that the
Company shall issue a press release announcing the Offering and disclosing all
material terms and conditions of the 

 

 

Offering prior to the opening of the financial markets in New York City
on the business day immediately after the date hereof.

 

15.          Termination.  In
the event that the Placement Agreement is terminated by the Placement Agents
pursuant to the terms thereof, this Agreement shall terminate without any
further action on the part of the parties hereto.

 

 

EXHIBIT A

 

CLEAN ENERGY FUELS CORP.

 

INVESTOR QUESTIONNAIRE

 

	
   

  	
   

  	
  Pursuant to Section 3
  of Annex I to the Agreement, please provide us with the following
  information:  

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  The exact name that your
  Shares and Warrants are to be registered in. You may use a nominee name if
  appropriate:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The relationship between
  the Investor and the registered holder listed in response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  The mailing address of the
  registered holder listed in response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  The Social Security Number
  or Tax Identification Number of the registered holder listed in the response
  to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Name of DTC Participant
  (broker-dealer at which the account or accounts to be credited with the
  Shares are maintained):

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  DTC Participant Number:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Name of Account at DTC
  Participant being credited with the Shares:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Account Number at DTC
  Participant being credited with the Shares:

  	
   

  

 

 

EXHIBIT B

 

SERIES I WARRANT

 

 

EXHIBIT C

 

SERIES II WARRANT

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