Document:

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                                                                  Exhibit 10.1

                                                                EXECUTION COPY
                                                                --------------

                           INDEMNIFICATION AGREEMENT
                           -------------------------

         THIS AGREEMENT ("Agreement") is made and entered into as of this
_____ day of October, 2008 between K-V Pharmaceutical Company, a Delaware
corporation (the "Company"), and ________________________ ("Indemnitee").

                                   RECITALS
                                   --------

                  WHEREAS, Indemnitee is serving as a director of the Company,
and as such is performing a valuable service for the Company; and

                  WHEREAS, competent and experienced persons are becoming
increasingly reluctant to serve publicly-held corporations as directors unless
they are provided with adequate protection through liability insurance and
adequate company indemnification against risks of claims and actions against
them arising out of their service to the corporation; and

                  WHEREAS, the Board of Directors has determined that the
ability to attract and retain qualified persons to serve as directors is in
the best interests of the Company and its stockholders, and that the Company
should act to assure such persons that there will be adequate certainty of
protection through insurance and indemnification against risks of claims and
actions against them arising out of their service to and activities on behalf
of the Company; and

                  WHEREAS, Section 145 of the General Corporation Law of the
State of Delaware (the "General Corporation Law") permits the Company to
indemnify and advance expenses to its officers and directors and to indemnify
and advance expenses to persons who serve at the request of the Company as
directors, officers, employees, or agents of other corporations or
enterprises; and

                  WHEREAS, the Company has adopted provisions in its Bylaws
addressing indemnification and advancement of expenses to its officers and
directors, and providing that the Company may enter into indemnification
agreements which specify the rights and obligations of the Company and such
persons with respect to indemnification, advancement of expenses and related
matters; and

                  WHEREAS, the Company desires to have Indemnitee continue to
serve in an Official Capacity (as defined below), and Indemnitee desires to
continue so to serve the Company, provided, and on the express condition, that
Indemnitee is furnished with the indemnity and other rights set forth in this
Agreement.

                                   AGREEMENT
                                   ---------

                  Now, therefore, in consideration of Indemnitee's continued
service to the Company in Indemnitee's Official Capacity, the parties hereto
agree as follows:

         1.       Definitions. For purposes of this Agreement:
                  -----------
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         (a)      "Change of Control" means a change in control of the Company
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 1.01 of Current Report on Form 8-K (or in
response to any similar item on any similar schedule or form) promulgated
under the Securities Exchange Act of 1934, as amended (the "Act"), whether or
not the Company is then subject to such reporting requirement; provided,
                                                               ---------
however, that, without limitation, such a Change of Control shall be deemed to
-------
have occurred if after the Effective Date (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Act) (other than any one or more of
the direct descendants by blood of Victor M. Hermelin and Minette Hermelin,
together) becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company representing thirty
percent (30%) or more of the combined voting power of the Company's then
outstanding securities without the prior approval of at least two-thirds of
the members of the Board of Directors in office immediately prior to such
person attaining such percentage; (ii) the Company is a party to a merger,
consolidation, liquidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a majority
of the Board of Directors thereafter; or (iii) during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors, and any new director (other than a director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in Section 1(a)(i) or (ii)) whose election by the Board
of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously approved by such vote,
cease for any reason to constitute at least a majority of the Board of
Directors.

         (b)      "Disinterested Director" means a director of the Company
who is not and was not a party to the Proceeding in respect of which
indemnification or advancement of expenses is sought by Indemnitee.

         (c)      "Effective Date" means the date first written above.

         (d)      "Expenses" shall include all direct and indirect costs
including, but not limited to, reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, advisory fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with investigating, prosecuting,
defending (or preparing to investigate, prosecute or defend) a Proceeding, or
being or preparing to be a witness in a Proceeding. Notwithstanding the
foregoing, Expenses incurred in connection with investigating, prosecuting,
defending (or preparing to investigate, prosecute or defend) a Proceeding
shall not include any fees, costs, or expenses of more than two firms of
attorneys with respect to such Proceeding (other than one additional firm
serving as local counsel if the Indemnitee is required to retain local counsel
under applicable local law or rules of any jurisdiction in which such
Proceeding is brought), and in no event shall the Company be required to
indemnify, or advance expenses to, Indemnitee with respect to any fees, costs,
or expenses for more than two such firms (and local counsel as provided
above). Any counsel engaged by Indemnitee with respect to which Indemnitee
seeks advancement from or indemnification by the Company shall agree to abide
by any guidelines established by the Company covering the retention of counsel
by the Company,

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such agreement being a condition precedent to advancement or indemnification
with respect to the fees, costs, or expenses of any such counsel.

         (e)      "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither presently
is, nor in the past five (5) years has been, retained to represent: (i) the
Company or Indemnitee in any matter material to either such party, or (ii) any
other party to the Proceeding giving rise to a claim for indemnification
hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall
not include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine Indemnitee's rights
under this Agreement. Notwithstanding the foregoing, a law firm or a member of
a law firm may serve as Independent Counsel for more than one indemnitee in
relation to a single Proceeding or a series of related Proceedings.

         (f)      "Official Capacity" means Indemnitee's corporate status as
an officer and/or director and any other fiduciary capacity in which
Indemnitee serves the Company, its subsidiaries and affiliates, its employee
benefit plans, and any other entity which Indemnitee serves in such capacity
at the request of the Company's CEO, its Board of Directors or any committee
of its Board of Directors. "Official Capacity" also refers to all actions
which Indemnitee takes or does not take while serving in such capacity.

         (g)      "Proceeding" includes any actual, threatened, pending or
completed inquiry, investigation, action, suit, arbitration, or any other such
actual or threatened action or occurrence, whether civil, criminal,
administrative or investigative, including any appeal or petition resulting
from such action or occurrence, whether or not initiated prior to the
Effective Date, except a proceeding initiated by an Indemnitee pursuant to
Section 8 of this Agreement to enforce his or her rights under this Agreement.

         2.       Service by Indemnitee. Indemnitee will serve and/or continue
                  ---------------------
to serve in Indemnitee's Official Capacity faithfully and to the best of
Indemnitee's ability so long as Indemnitee has or holds such Official
Capacity. Indemnitee may at any time and for any reason resign from
Indemnitee's Official Capacity (subject to any other contractual obligation or
any obligation imposed by operation of law).

         3.       Indemnification.
                  ---------------

         (a)      General. Except as otherwise provided in this Agreement, the
                  -------
Company shall indemnify Indemnitee to the fullest extent permitted by the
General Corporation Law as such law may from time to time be amended if
Indemnitee is or was a party or is or was threatened to be made a party to any
Proceeding by reason of his or her Official Capacity or by reason of anything
done or not done by Indemnitee in his or her Official Capacity. The Company
shall indemnify Indemnitee against all costs, judgments, penalties, fines,
liabilities, amounts paid in settlement by or on behalf of Indemnitee in any
Proceeding, and Expenses actually and reasonably incurred by Indemnitee in
connection with such Proceeding, if Indemnitee is determined to have met the
standard of conduct set forth in Section 7(a).

         (b)      Exceptions. Indemnitee shall receive no indemnification of
                  ----------
Expenses:

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                  (i)   to the extent such indemnification of Expenses is
                  finally determined by a Court of competent jurisdiction
                  (including through the expiration of applicable appeals
                  processes) to be expressly prohibited by Delaware law or
                  the public policies of Delaware;

                  (ii)  to the extent payment is actually made to Indemnitee
                  for the amount to which Indemnitee would otherwise have been
                  entitled under this Agreement pursuant to an insurance
                  policy, or another indemnity agreement or arrangement from
                  the Company or other person or entity;

                  (iii) for an accounting of profits made from the purchase
                  and sale (or sale and purchase) by Indemnitee of securities
                  of the Company within the meaning of Section 16(b) of the
                  Act, or similar provisions of state statutory law or common
                  law;

                  (iv)  in connection with any Proceeding, or part thereof
                  (including claims and permissive counterclaims) initiated by
                  Indemnitee, except a judicial proceeding pursuant to Section
                  8 to enforce rights under this Agreement, unless the
                  Proceeding (or part thereof) was authorized by the Board of
                  Directors of the Company; and

                  (v)   with respect to any claim, issue, or matter as to which
                  Delaware law expressly prohibits such indemnification by
                  reason of any adjudication of liability of Indemnitee to the
                  Company, unless and only to the extent that the Delaware
                  Court of Chancery, or the court in which such action or suit
                  was brought, shall determine upon application that, despite
                  an adjudication of liability but in view of all the
                  circumstances of the case, Indemnitee is entitled to
                  indemnification for such Expenses as such court shall deem
                  proper.

         4.       Advancement of Expenses.
                  -----------------------

         (a)      General. Except as otherwise provided in Section 3(b)(iv) of
                  -------
this Agreement, the Company shall advance Expenses to Indemnitee to the
fullest extent permitted by the General Corporation Law as such law may from
time to time be amended if Indemnitee is or was a party or is or was
threatened to be made a party to any Proceeding by reason of his or her
Official Capacity or by reason of anything done or not done by Indemnitee in
his or her Official Capacity. The Company shall advance to Indemnitee Expenses
actually and reasonably incurred by Indemnitee in connection with such
Proceeding within 15 business days after Indemnitee provides a statement to
Company requesting an advance and describing in reasonable detail the Expenses
incurred.

         (b)      Undertaking In Connection With Request For Advancement. As a
                  ------------------------------------------------------
condition precedent to the Company's advancement of Expenses to Indemnitee,
Indemnitee shall provide the Company, in substantially the form attached as
Exhibit 1, with (i) a written affirmation by such person of his or her good
---------
faith belief that he or she has met the standard of conduct necessary for
indemnification under this Agreement and Section 145 of the General
Corporation Law, and (ii) an undertaking by or on behalf of Indemnitee to
reimburse such amount if it is

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finally determined by a court of competent jurisdiction after all appeals that
Indemnitee is not entitled to be indemnified against such Expenses by the
Company as provided by this Agreement or otherwise. Indemnitee's undertaking
to reimburse any such amounts is not required to be secured.

         5.       Indemnification for Expenses of Successful Party.
                  ------------------------------------------------

         Notwithstanding the limitations of any other provisions of this
Agreement, to the extent that Indemnitee is successful on the merits or
otherwise in defense of any Proceeding, or in defense of any claim, issue or
matter therein, including, without limitation, the dismissal of any action
without prejudice, or if it is ultimately determined that Indemnitee is
otherwise entitled to be indemnified against Expenses, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred in
connection therewith. If Indemnitee is partially successful on the merits or
otherwise in defense of any Proceeding, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred in connection with each
claim, issue, or matter that is successfully resolved on the merits or
otherwise to the fullest extent permitted by law.

         6.       Indemnification for Expenses Incurred in Serving as a Witness.
                  -------------------------------------------------------------
Notwithstanding any other provisions of this Agreement, Indemnitee shall be
entitled to indemnification for and advancement of all Expenses reasonably
incurred for serving as a witness by reason of Indemnitee's Official Capacity
in any Proceeding with respect to which Indemnitee is not a party.

         7.       Determination of Entitlement to Indemnification.
                  -----------------------------------------------

         (a)      Standard of Conduct. Except as provided in Section 5 above,
                  -------------------
Indemnitee shall be entitled to indemnification pursuant to this Agreement
only upon a determination that Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests
of the Company, and with respect to any criminal action or proceeding, had no
reasonable cause to believe that Indemnitee's conduct was unlawful.

         (b)      Manner of Determining Eligibility. Upon written request of
                  ---------------------------------
the Indemnitee for indemnification, the entitlement of Indemnitee to such
requested indemnification shall be determined by:

                  (i)   the Board of Directors by a majority vote of
                  Disinterested Directors, whether or not such majority
                  constitutes a quorum; or

                  (ii)  a committee of Disinterested Directors designated by
                  majority vote of such Disinterested Directors, whether or
                  not such majority constitutes a quorum; or

                  (iii) Independent Counsel in a written opinion to the Board
                  of Directors, or designated committee of the Board of
                  Directors, with a copy to Indemnitee, which Independent
                  Counsel shall be selected by majority vote of the Company's
                  directors at a meeting at which a quorum is present, or a
                  majority vote of the Disinterested Directors, or Committee
                  of Disinterested Directors; or

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                  (iv)  in the event that a Change of Control has occurred, at
                  the option of Indemnitee, by Independent Counsel (selected
                  by Indemnitee) in a written opinion to the Board of
                  Directors of the Company, a copy of which shall be delivered
                  to the Indemnitee.

         (c)      Change of Control. The Company agrees that if there is a
                  -----------------
Change of Control (other than a Change of Control which has been approved by a
majority of the Board of Directors who were directors immediately prior to
such Change of Control) then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnification under this
Agreement or any other document now or hereafter in effect relating to such
indemnification, the Company shall seek legal advice only from Independent
Counsel selected by Indemnitee. The Company agrees to pay the reasonable fees
of the Independent Counsel referred to above and to indemnify fully such
counsel against any and all expenses (including attorneys' fees), claims,
liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

         (d)      Payment of Costs of Determining Eligibility. The Company
                  -------------------------------------------
shall pay all costs associated with its determination of Indemnitee's
eligibility for indemnification.

         (e)      Presumptions and Effect of Certain Proceedings. The
                  ----------------------------------------------
Secretary or the Assistant Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise in writing the
Board of Directors or such other person or persons empowered to make the
determination requested in Section 7(b), and the Company shall thereafter
promptly make such determination or initiate the appropriate process for
making such determination.

                  (i)   In making a determination with respect to entitlement
                  to indemnification hereunder, the person or persons or entity
                  making such determination shall, to the fullest extent not
                  prohibited by law, presume that Indemnitee is entitled to
                  indemnification under this Agreement if Indemnitee has
                  submitted a request for indemnification in accordance with
                  Section 7 of this Agreement, and the Company shall, to the
                  fullest extent not prohibited by law, have the burden of
                  proof to overcome that presumption in connection with the
                  making by any person, persons or entity of any determination
                  contrary to that presumption. Neither the failure of the
                  Company (including by its directors or independent legal
                  counsel) to have made a determination prior to the
                  commencement of any action pursuant to this Agreement that
                  indemnification is proper in the circumstances because
                  Indemnitee has met the applicable standard of conduct, nor
                  an actual determination by the Company (including by its
                  directors or independent legal counsel) that Indemnitee has
                  not met such applicable standard of conduct, shall be a
                  defense to the action or create a presumption that
                  Indemnitee has not met the applicable standard of conduct.

                  (ii)  Subject to Section 8(f), if the person, persons or
                  entity empowered or selected under Section 7(b) of this
                  Agreement to determine whether Indemnitee is entitled to
                  indemnification shall not have made a determination within
                  sixty (60) days after receipt by the Company of the request
                  therefor, the requisite

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                  determination of entitlement to indemnification shall, to
                  the fullest extent not prohibited by law, be deemed to have
                  been made and Indemnitee shall be entitled to such
                  indemnification, absent (A) a misstatement by Indemnitee of
                  a material fact, or an omission of a material fact necessary
                  to make Indemnitee's statement not materially misleading, in
                  connection with the request for indemnification, or (B) a
                  prohibition of such indemnification under applicable law;
                  provided, however, that such 60-day period may be extended
                  for a reasonable time, not to exceed an additional thirty
                  (30) days, if the person, persons or entity making the
                  determination with respect to entitlement to indemnification
                  in good faith requires such additional time for the
                  obtaining or evaluating of documentation and/or information
                  relating thereto; and provided, further, that the foregoing
                  provisions of this Section 7(e) shall not apply if the
                  determination of entitlement to indemnification is to be
                  made by Independent Counsel pursuant to Section 7(b)(iv) of
                  this Agreement.

                  (iii) The termination of any Proceeding or of any claim,
                  issue or matter therein, by judgment, order, settlement or
                  conviction, or upon a plea of nolo contendere or its
                                                ---- ----------
                  equivalent, shall not (except as otherwise expressly
                  provided in this Agreement) of itself adversely affect the
                  right of Indemnitee to indemnification or create a
                  presumption that Indemnitee did not act in good faith and in
                  a manner which Indemnitee reasonably believed to be in or
                  not opposed to the best interests of the Company or, with
                  respect to any criminal Proceeding, that Indemnitee had
                  reasonable cause to believe that Indemnitee's conduct was
                  unlawful. The Company acknowledges that a settlement or
                  other disposition short of final judgment may be successful
                  if it permits a party to avoid expense, delay, distraction,
                  disruption and uncertainty. In the event that any action,
                  claim or proceeding to which Indemnitee is a party is
                  resolved in any manner other than by adverse judgment
                  against Indemnitee (including, without limitation,
                  settlement of such action, claim or proceeding with or
                  without payment of money or other consideration) it shall be
                  presumed that Indemnitee has been successful on the merits
                  or otherwise in such action, suit or proceeding. Anyone
                  seeking to overcome this presumption shall have the burden
                  of proof and the burden of persuasion by clear and
                  convincing evidence.

         8.       Remedies of Indemnitee.
                  ----------------------

         (a)      In the event that (i) a determination is made pursuant to
Section 7 of this Agreement that Indemnitee is not entitled to indemnification
under this Agreement, (ii) advancement of Expenses, to the fullest extent
permitted by applicable law, is not timely made pursuant to Section 4 of this
Agreement, (iii) no determination of entitlement to indemnification shall have
been made pursuant to Section 7(b) or (c) of this Agreement within ninety (90)
days after receipt by the Company of the request for indemnification, (iv)
payment of indemnification is not made pursuant to Section 5 or 6 of this
Agreement within fifteen (15) business days after receipt by the Company of
written request therefor, or (v) payment of indemnification pursuant to
Section 3 of this Agreement is not made within fifteen (15) business days
after a determination has been made that Indemnitee is entitled to
indemnification, Indemnitee shall be entitled to seek an adjudication by the
Court of Chancery of Indemnitee's right to such indemnification or

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advancement of Expenses, with any costs associated therewith to be paid by the
Company to the extent permitted by law. The Company shall not oppose
Indemnitee's right to seek any such adjudication.

         (b)      In the event that a determination shall have been made
pursuant to Section 7 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding commenced pursuant to this Section 8
shall be conducted in all respects as a de novo trial on the merits and
                                        -- ----
Indemnitee shall not be prejudiced by reason of that adverse determination. In
any judicial proceeding commenced pursuant to this Section 8, Indemnitee shall
be presumed to be entitled to indemnification under this Agreement and the
Company shall, to the fullest extent not prohibited by law, have the burden of
proof to overcome that presumption in connection with the making by any
person, persons or entity of any determination contrary to that presumption,
as the case may be, and the Company may not refer to or introduce into
evidence any determination pursuant to Section 7 of this Agreement adverse to
Indemnitee for any purpose. If Indemnitee commences a judicial proceeding
pursuant to this Section 8, Indemnitee shall not be required to reimburse the
Company for any advances pursuant to Section 4 until a final determination is
made with respect to Indemnitee's entitlement to indemnification (as to which
all rights of appeal have been exhausted or lapsed).

         (c)      Neither the failure of the Company (including by its
directors or Independent Counsel) to have made a determination prior to the
commencement of any action pursuant to this Agreement that indemnification is
proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Company (including by its
directors or Independent Counsel) that Indemnitee has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that Indemnitee has not met the applicable standard of conduct. If a
determination shall have been made pursuant to Section 7 of this Agreement
that Indemnitee is entitled to indemnification, the Company shall be bound by
such determination in any judicial proceeding commenced pursuant to this
Section 8, absent (i) a misstatement by Indemnitee of a material fact, or an
omission of a material fact necessary to make Indemnitee's statement not
materially misleading, in connection with the request for indemnification, or
(ii) a prohibition of such indemnification under applicable law.

         (d)      The Company shall be precluded from asserting in any
judicial proceeding commenced pursuant to this Section 8 that the procedures
and presumptions of this Agreement are not valid, binding and enforceable and
shall stipulate in any such court or before any such arbitrator that the
Company is bound by all the provisions of this Agreement.

         (e)      The Company shall indemnify and hold harmless Indemnitee to
the fullest extent permitted by law against all expenses (of the type that
would be considered "Expenses" if incurred in connection with a Proceeding)
and, if requested by Indemnitee, shall (within ten (10) days after the
Company's receipt of such written request) advance to Indemnitee, to the
fullest extent permitted by applicable law, such expenses that are incurred by
Indemnitee in connection with any judicial proceeding brought by Indemnitee
(i) to enforce Indemnitee's rights under, or to recover damages for breach of,
this Agreement or any other indemnification agreement or provision of the
Certificate of Incorporation or the Company's By-laws now or hereafter in
effect; or (ii) for recovery or advances under any insurance policy maintained
by any person for

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the benefit of Indemnitee, to the full extent Indemnitee ultimately is
determined to be entitled to such indemnification, advance or insurance
recovery, as the case may be.

         (f)      Notwithstanding anything in this Agreement to the contrary,
no determination as to entitlement to indemnification under this Agreement
shall be required to be made prior to the final termination or disposition of
the Proceeding.

         9.       Non-exclusivity; No Effect on Other Agreements; Survival of
                  -----------------------------------------------------------
Rights; Insurance; Subrogation.
------------------------------

         (a)      The rights of indemnification and to receive advancement of
Expenses as provided by this Agreement shall not be deemed exclusive of any
other rights to which Indemnitee may at any time be entitled under applicable
law, the Certificate of Incorporation, the Company's By-laws, any other
agreement, a vote of stockholders or a resolution of directors, or otherwise.
The entry by Indemnitee into this Agreement, and the terms of this Agreement,
shall not be deemed to change, limit or affect in any respect, or terminate,
any other agreements between Indemnitee and the Company. Except as otherwise
provided by Section 12 hereof, no amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Official Capacity prior to such amendment, alteration
or repeal. To the extent that a change in the General Corporation Law, whether
by statute or judicial decision, permits greater indemnification or
advancement of Expenses than would be afforded currently under the Certificate
of Incorporation, the Company's By-laws or this Agreement, it is the intent of
the parties hereto that Indemnitee shall enjoy by this Agreement the greater
benefits so afforded by such change. No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other right or
remedy.

         (b)      The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable (or for which advancement is
provided hereunder) hereunder if and to the extent that Indemnitee has
otherwise actually received such payment under any insurance policy, contract,
agreement or otherwise.

         (c)      The Company's obligation to indemnify or advance Expenses
hereunder to Indemnitee who is or was serving at the request of the Company as
a director, officer, employee or agent of any other corporation, limited
liability company, partnership, joint venture, trust, employee benefit plan or
other enterprise shall be reduced by any amount Indemnitee has actually
received as indemnification or advancement of Expenses from such other
corporation, limited liability company, partnership, joint venture, trust,
employee benefit plan or other enterprise.

         10.      Notification and Settlement of Claim. Promptly after receipt
                  ------------------------------------
by Indemnitee of notice of any Proceeding, Indemnitee will notify the Company
in writing of the commencement thereof; but the omission so to notify the
Company will not relieve the Company from any liability that it may have to
Indemnitee, except to the extent the Company is actually prejudiced

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thereby. The Company shall not be liable to indemnify Indemnitee under this
Agreement for any amounts paid in settlement of any Proceeding effected
without the Company's written consent, and the Company shall not settle any
Proceeding in any manner that would impose any penalty or limitation on, or
require any payment from, Indemnitee without Indemnitee's written consent.
Neither the Company nor Indemnitee will unreasonably withhold its consent to
any proposed settlement.

         11.      Separability. If any provision of this Agreement shall be
                  ------------
held to be invalid, illegal or unenforceable for any reason whatsoever (a) the
validity, legality and enforceability of the remaining provisions of this
Agreement (including without limitation, all portions of any paragraphs of
this Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not by themselves invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby, and (b) to the fullest
extent possible, the provisions of this Agreement (including, without
limitation, all portions of any paragraph of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent of the parties that the Company provide protection to
Indemnitee to the fullest enforceable extent provided for in this Agreement.

         12.      Duration of Agreement. This Agreement shall continue until
                  ---------------------
and terminate upon the later of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director of the Company or (b) one
(1) year after the final termination of any Proceeding then pending in respect
of which Indemnitee is granted rights of indemnification or advancement of
Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 8 of this Agreement relating thereto. All agreements and obligations
of the Company contained in this Agreement shall continue during the period of
Indemnitee's Official Capacity. This Agreement shall be binding upon all
successors and assigns of the Company (including any transferee of all or
substantially all of its assets and any successor by merger or operation of
law) and shall inure to the benefit of Indemnitee's heirs, personal
representatives and estate.

         13.      Non-attribution of Actions of Any Indemnitee to Any Other
                  ---------------------------------------------------------
Indemnitee. For purposes of determining whether Indemnitee is entitled to
----------
indemnification or advancement of Expenses by the Company under this Agreement
or otherwise, the actions or inactions of any other indemnitee or group of
indemnitees shall not be attributed to Indemnitee.

         14.      Insurance and Subrogation.
                  -------------------------

         (a)      The Company shall purchase and maintain insurance on behalf
of Indemnitee who is or was or has agreed to serve at the request of the
Company as a director or officer of the Company against any liability asserted
against, and incurred by, Indemnitee or on Indemnitee's behalf in any such
capacity, or arising out of Indemnitee's status as such, whether or not the
Company would have the power to indemnify Indemnitee against such liability
under the provisions of this Agreement, provided that such insurance is
available on commercially reasonable terms. If the Company has such insurance
in effect at the time the Company receives from Indemnitee any notice of the
commencement of a proceeding, the Company shall give prompt notice of the
commencement of a proceeding to the insurers in accordance with the procedures
set forth in the policy. The Company shall thereafter take all necessary or
desirable

                                      10

<PAGE>
<PAGE>

action to cause such insurers to pay, on behalf of the Indemnitee, all amounts
payable as a result of such proceeding in accordance with the terms of such
policy.

         (b)      In the event of any payment by the Company under this
Agreement, the Company shall be subrogated to the extent of such payment to
all of the rights of recovery of Indemnitee with respect to any insurance
policy, who shall execute all papers required and take all action necessary to
secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights in accordance with the
terms of such insurance policy. The Company shall pay or reimburse all
expenses actually and reasonably incurred by Indemnitee in connection with
such subrogation.

         (c)      The Company shall not be liable under this Agreement to make
any payment of amounts otherwise indemnifiable hereunder (including, but not
limited to, judgments, fines, ERISA excise taxes or penalties, and amounts
paid in settlement), if and to the extent that Indemnitee has otherwise
actually received such payment under this Agreement or any insurance policy,
contract, agreement or otherwise.

         15.      Notices. All notices, requests, demands and other
                  -------
communications under this Agreement shall be in writing and shall be deemed to
have been duly given if (a) delivered by hand and receipted for by the party
to whom said notice or other communication shall have been directed, (b)
mailed by certified or registered mail with postage prepaid, on the third
business day after the date on which it is so mailed, (c) mailed by reputable
overnight courier and receipted for by the party to whom said notice or other
communication shall have been directed or (d) sent by facsimile transmission,
with receipt of confirmation that such transmission has been received.

         16.      Headings; References; Pronouns. The headings of the sections
                  ------------------------------
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.
References herein to section numbers are to sections of this Agreement. All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as appropriate.

         17.      Other Provisions.
                  ----------------

         (a)      This Agreement shall be interpreted and enforced in
accordance with the laws of Delaware.

         (b)      This Agreement may be executed in one or more counterparts,
each of which shall for all purposes be deemed to be an original but all of
which together shall constitute one and the same Agreement. Only one such
counterpart signed by the party against whom enforceability is sought needs to
be produced as evidence of the existence of this Agreement.

         (c)      This Agreement shall not be deemed an employment contract
between the Company and Indemnitee, and the Company shall not be obligated to
continue Indemnitee in Indemnitee's Official Capacity by reason of this
Agreement.

         (d)      No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by both parties hereto. No waiver
of any of the provisions of this

                                      11

<PAGE>
<PAGE>

Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

         (e)      The Company agrees to stipulate in any such court or before
any such arbitrator that the Company is bound by all the provisions of this
Agreement and is precluded from making any assertions to the contrary.

         (f)      Indemnitee's rights under this Agreement shall extend to
Indemnitee's spouse, members of Indemnitee's immediate family, and
Indemnitee's representative(s), guardian(s), conservator(s), estate,
executor(s), administrator(s), and trustee(s), (all of whom are referred to as
"Related Parties"), as the case may be, to the extent a Related Party or a
Related Party's property is subject to a Proceeding by reason of Indemnitee's
Official Capacity.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on and as of the day and year first above written.

                                       K-V PHARMACEUTICAL COMPANY

                                       By
                                         -------------------------------------

                                         Its
                                            ----------------------------------

                                       ---------------------------------------
                                       Indemnitee

                                      12

<PAGE>
<PAGE>

                                   EXHIBIT 1

         AFFIRMATION AND UNDERTAKING TO REPAY INDEMNIFICATION EXPENSES

         Reference is made to that Indemnification Agreement (the
"Agreement"), dated as of ______, 20__, by and between the undersigned and K-V
Pharmaceutical Company, a Delaware corporation (the "Company"). Unless
otherwise defined, capitalized terms used herein shall have the respective
meanings ascribed to them in the Agreement.

         Pursuant to Section 4(b) of the Agreement:

         1. The undersigned hereby affirms my good faith belief that I have
met the standard of conduct necessary for indemnification under the Agreement,
that I acted in good faith and in a manner I reasonably believed to be in or
not opposed to the best interests of the Company, and with respect to any
criminal action or proceeding, had no reasonable cause to believe that my
conduct was unlawful; and

         2. The undersigned hereby agrees to reimburse the Company all
Expenses advanced to me if it is finally determined by a court of competent
jurisdiction after all appeals that I am not entitled to be indemnified
against such Expenses by the Company as provided by the Agreement or
otherwise.

                                        Signature
                                                 -----------------------------

                                        Typed Name
                                                  ----------------------------

                                        Office
                                              --------------------------------

                                      13Exhibit 4.5

 

CLEAN ENERGY FUELS CORP.

 

WARRANT TO PURCHASE COMMON STOCK

 

Warrant No.:         

Number of Shares of Common Stock:       

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,
[                                          ],
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 six (6) months
from the date hereof (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”),
[                    ]
([              ])
fully paid nonassessable shares of Common Stock (as defined below)  (the “Warrant
Shares”).  Except as otherwise
defined herein, capitalized terms in this Warrant shall have the meanings set
forth in Section 15.  This
Warrant is the Warrant to purchase Common Stock issued 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, this Warrant may be exercised by the Holder on any
day on or after the Exercisability 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, including any
cashless exercise under Section 1(d), 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 unless a registration statement covering the issuance of or
resale of the Warrant Shares is not then effective or the Warrant Shares are
not freely transferable without volume restrictions pursuant to Rule 144
under the Securities Act.  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.  For purposes of
this Warrant, “Exercise Price”
means $13.50 per share, subject to adjustment as provided herein.

 

(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 

 

2

 

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 in immediately available funds; provided, however, that if at any time during the Exercise
Period the Registration Statement covering the Warrant Shares is not effective
on such exercise date or the registration statement is not otherwise available
for the resale of the shares of Common Stock issuable hereunder, the Holder may
satisfy its obligation to pay the Exercise Price through 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.

 

3

 

(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.

 

4

 

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.  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, 

 

5

 

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 

 

6

 

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.  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.

 

7

 

(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(b) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2.

 

(d)   Adjustment
One Year and Two Years from the Date Hereof.  (a) Upon the date one year from the date
hereof (the “First  Reset Date”), the Exercise Price of this
Warrant, if then-outstanding, shall be reset to an exercise price equal to
one-hundred twenty percent (120%) of the closing price of the Company’s Common
Stock as listed on the NASDAQ Global Market (or such other Eligible Market if
the Warrants Shares are no longer listed on the Nasdaq Global Market) on such
date; (b) upon the date two years from the date hereof (the “Second Reset Date”), the Exercise Price of
this Warrant, if then-outstanding, shall be reset to an exercise price equal to
one-hundred twenty percent (120%) of the closing price of the Company’s Common
Stock as listed on the NASDAQ Global Market (or such other Eligible Market if
the Warrants Shares are no longer listed on the Nasdaq Global Market) on such
date; provided, however, that no such
adjustment pursuant to this Section 2(d) will increase the
Exercise Price of this Warrant above the then current Exercise Price at the
time of such reset.

 

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 

 

8

 

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 

 

9

 

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.

 

10

 

(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 

 

11

 

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)  “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.

 

12

 

(e)  “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.

 

(f)  “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.

 

(g)  “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.

 

(h)  “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 planduly 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.

 

13

 

(i)  “Expiration Date” means the date seven (7) years after the
Exercisability Date or, if such date falls on a day other than a Business Day
or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a
Holiday.

 

(j)  “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.

 

(k)  “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.

 

(l)  “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.

 

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

 

(n)  “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.

 

(o)  “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 

 

14

 

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).

 

(p)  “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 Holders.  If the Company and the
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]

 

15

 

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 “Cash Exercise”
with respect to
                                  
Warrant Shares; and/or

 

a “Cashless Exercise”
with respect to
                              
Warrant Shares.

 

2.   Payment
of Exercise Price.  In the event that
the holder has elected a Cash Exercise with respect to some or all of the
Warrant Shares to be issued pursuant hereto, the holder shall pay the Aggregate
Exercise Price in the sum of
$                                      
to the Company in accordance with the terms of the Warrant.

 

3.   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.]

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