Document:

EXHIBIT
10.56

THIS WARRANT AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAW, AND MAY
NOT BE OFFERED FOR SALE OR SOLD UNLESS A REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS SHALL BE EFFECTIVE WITH RESPECT THERETO,
OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS IS AVAILABLE IN CONNECTION WITH SUCH OFFER OR SALE OR TRANSFER.

WARRANT

TO PURCHASE COMMON STOCK

OF

EARTH
BIOFUELS, INC.

	
  Issue Date: July 11, 2006

  	
  Warrant
  No. 2

  

 

THIS
CERTIFIES that COWEN AND COMPANY, LLC or any subsequent holder hereof (the “Holder”), has the
right to purchase from EARTH BIOFUELS, INC.,
a Delaware corporation (the “Company”), up to 15,000 fully paid and
nonassessable shares of the Company’s common stock, par value $0.001 per share
(the “Common Stock”),
subject to adjustment as provided herein, at a price per share equal to the
Exercise Price (as defined below), at any time and from time to time beginning
on the date on which this Warrant is issued (the “Issue Date”) and ending at 5:00 p.m.,
eastern time, on the fifth (5th) anniversary of the Issue Date or, if such day is not a
Business Day, on the next succeeding Business Day (the “Expiration Date”).  This Warrant is issued pursuant to a
Securities Purchase Agreement, dated as of July 10, 2006 (the “Securities Purchase Agreement”).  Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the
Securities Purchase Agreement.

1.    EXERCISE.

(a)   Right to Exercise; Exercise Price.  The Holder shall have the right to exercise
this Warrant at any time and from time to time during the period beginning on
the Issue Date and ending on the Expiration Date as to all or any part of the
shares of Common Stock covered hereby (the “Warrant Shares”).  The “Exercise Price” for each Warrant Share
purchased by the Holder upon the exercise of this Warrant shall be $2.50,
subject to adjustment for the events specified in Section 6 below.

 

 

(b)  Exercise Notice.  In order to exercise this Warrant, the Holder
shall (i) send by facsimile transmission, at any time prior to 5:00 p.m.,
eastern time, on the Business Day on which the Holder wishes to effect such
exercise (the “Exercise
Date”), to the Company an executed copy of the notice of
exercise in the form attached hereto as Exhibit A (the “Exercise Notice”), (ii) deliver the
original Warrant or a copy thereof, and (iii) in the case of a Cash Exercise
(as defined below), the Exercise Price to the Company.  The Exercise Notice shall also state the name
or names in which the Warrant Shares issuable on such exercise shall be issued.  In the case of a dispute as to the
calculation of the Exercise Price or the number of Warrant Shares issuable
hereunder (including, without limitation, the calculation of any adjustment
pursuant to Section 6 below),
the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and shall submit the disputed calculations to a certified
public accounting firm of national recognition (other than the Company’s
independent accountants) within two (2) Business Days following the date on which
the Exercise Notice is delivered to the Company. The Company shall use its best
efforts to cause such accountant to calculate the Exercise Price and/or the
number of Warrant Shares issuable hereunder and to notify the Company and the
Holder of the results in writing no later than two (2) Business Days following
the day on which such accountant received the disputed calculations (the “Dispute Procedure”).
Such accountant’s calculation shall be deemed conclusive absent manifest
error.  The fees of any such accountant
shall be borne by the party whose calculations were most at variance with those
of such accountant.

(c)   Holder
of Record.  The Holder shall, for all
purposes, be deemed to have become the holder of record of the Warrant Shares
specified in an Exercise Notice on the Exercise Date specified therein,
irrespective of the date of delivery of such Warrant Shares. Except as
specifically provided herein, nothing in this Warrant shall be construed as
conferring upon the Holder hereof any rights as a stockholder of the Company
prior to the Exercise Date.

(d)  Cancellation of Warrant.  This Warrant shall be canceled upon its
exercise and, if this Warrant is exercised in part, the Company shall, at the
time that it delivers Warrant Shares to the Holder pursuant to such exercise as
provided herein, issue a new warrant, and deliver to the Holder a certificate
representing such new warrant, with terms identical in all respects to this
Warrant (except that such new warrant shall be exercisable into the number of
shares of Common Stock with respect to which this Warrant shall remain
unexercised); provided, however,
that the Holder shall be entitled to exercise all or any portion of such new
warrant at any time following the time at which this Warrant is exercised,
regardless of whether the Company has actually issued such new warrant or
delivered to the Holder a certificate therefor.

(e)   Charter Amendment.  In the event there are insufficient shares of
Common Stock authorized, unreserved and available for issuance upon exercise of
this Warrant, the Company shall use its best efforts to effect an amendment of
its certificate of incorporation so as to increase the authorized shares of
Common Stock to accommodate such exercise.

(f)   Principal Market Regulation.  The
Company shall not be obligated to issue any shares of Common Stock upon
exercise of this Warrant if the issuance of such shares of Common Stock would
exceed that number of shares of Common Stock which the Company may issue upon
exercise of this Warrant without breaching the Company’s obligations under the
rules

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or regulations of the Principal Market (the “Exchange
Cap”), except that such limitation shall not apply in the event that the
Company (A) obtains the approval of its shareholders as required by the
applicable rules of the Principal Market for issuances of shares of Common
Stock in excess of such amount or (B) obtains a written opinion from outside
counsel to the Company that such approval is not required, which opinion shall
be reasonably satisfactory to the holders of the Warrant representing at least
a majority of the shares of Common Stock underlying the Warrants then
outstanding issued under the Securities Purchase Agreement.  Until such
approval or written opinion is obtained, no Purchaser shall be issued, upon
exercise of any Warrants, shares of Common Stock in an amount greater than the
product of the Exchange Cap multiplied by a fraction, the numerator of which is
the total number of shares of Common Stock issued to such Purchaser pursuant to
the Securities Purchase Agreement on the Issuance Date and the denominator of
which is the aggregate number of shares of Common Stock issued to the
Purchasers pursuant to the Securities Purchase Agreement on the Issuance Date
(with respect to each Purchaser, the “Exchange Cap Allocation”“).  In the
event that any Purchaser shall sell or otherwise transfer any of such Purchaser’s
Warrants, the transferee shall be allocated a pro rata portion of such
Purchaser’s Exchange Cap Allocation, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange Cap
Allocation allocated to such transferee.  In the event that any holder of
Warrants shall exercise all of such holder’s Warrants into a number of shares
of Common Stock which, in the aggregate, is less than such holder’s Exchange
Cap Allocation, then the difference between such holder’s Exchange Cap
Allocation and the number of shares of Common Stock actually issued to such
holder shall be allocated to the respective Exchange Cap Allocations of the
remaining holders of Warrants on a pro rata basis in proportion to the shares
of Common Stock underlying the Warrants then held by each such holder.  In
the event that the Company is prohibited from issuing any Warrant Shares for
which an Exercise Notice has been received as a result of the operation of this
Section 1(f), the Company shall pay cash in exchange for cancellation of such
Warrant Shares, at a price per Warrant Share equal to the difference between
the closing sale price and the Exercise Price as of the date of the attempted
exercise.

2.    DELIVERY OF WARRANT SHARES UPON EXERCISE.

Upon receipt of an Exercise Notice pursuant to Section 1 above, the
Company shall, (A) in the case of a Cash Exercise (as defined below) no later
than the close of business on the later to occur of (i) the third (3rd)
Business Day following the Exercise Date set forth in such Exercise Notice and
(ii) the date on which the Company has received payment of the Exercise Price,
(B) in the case of a Cashless Exercise (as defined below), no later than the
close of business on the third (3rd) Business Day following the Exercise Date
set forth in such Exercise Notice, and (C) with respect to Warrant Shares that
are the subject of a Dispute Procedure, the close of business on the third (3rd) Business Day following the
determination made pursuant to Section 1(b) (each of the dates specified in (A), (B) or
(C) being referred to as a “Delivery Date”), issue and deliver or cause to be
delivered to the Holder the number of Warrant Shares as shall be determined as
provided herein. The Company shall effect delivery of Warrant Shares to the
Holder, as long as the Company’s designated transfer agent or co-transfer agent
in the United States for the Common Stock (the “Transfer Agent”) participates in the
Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program (“FAST”), by crediting the account of the
Holder or its nominee at DTC (as specified in the applicable Exercise Notice)
with the number of Warrant

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Shares required to be delivered, no later than the
close of business on such Delivery Date. In the event that the Transfer Agent
is not a participant in FAST, or if the Holder so specifies in an Exercise
Notice or otherwise in writing on or before the Exercise Date, the Company
shall effect delivery of Warrant Shares by delivering to the Holder or its
nominee physical certificates representing such Warrant Shares, no later than
the close of business on such Delivery Date.  If any exercise would create a fractional
Warrant Share, such fractional Warrant Share shall be disregarded and the
number of Warrant Shares issuable upon such exercise, in the aggregate, shall
be the nearest whole number of Warrant Shares. 
Warrant Shares delivered to the Holder shall not contain any restrictive
legend unless such legend is required pursuant to the terms of the Securities
Purchase Agreement.

3.    FAILURE TO DELIVER WARRANT SHARES.

(a)           In the event that the Company fails
for any reason (other than as a result of the Holder’s failure, in the case of
a Cash Exercise (as defined below), to pay the aggregate Exercise Price for the
Warrant Shares being purchased) to deliver to the Holder the number of Warrant
Shares specified in the applicable Exercise Notice (without any restrictive
legend to the extent permitted by the terms of the Securities Purchase
Agreement) on or before the second (2nd) Business Day following the Delivery
Date therefor (an “Exercise
Default”), the Holder shall have the right to receive from the Company
an amount equal to (i) (N/365) multiplied by (ii) the aggregate Exercise
Price of the Warrant Shares which are the subject of such Exercise Default multiplied
by (iii) the lower of sixteen percent (16%) and the maximum rate permitted
by applicable law or by the applicable rules or regulations of any Governmental
Agency (the “Default
Interest Rate”), where “N” equals the number of days elapsed
between the original Delivery Date of such Warrant Shares and the date on which
such Exercise Default has been cured.  In
the event that shares of Common Stock are purchased by or on behalf of the
Holder in order to make delivery on
a sale effected in anticipation of receiving Warrant Shares upon an exercise,
the Holder shall have the right to receive from the Company, in addition to the
foregoing amounts, (i) the aggregate amount paid by or on behalf of the Holder
for such shares of Common Stock minus (ii) the aggregate amount of net
proceeds, if any, received by the Holder from the sale of the Warrant Shares
issued by the Company pursuant to such exercise.  Amounts
payable under this Section
3(a)  shall be paid to
the Holder in immediately available funds on or before the fifth (5th) Business
Day following written notice from the Holder to the Company specifying the
amount owed to it by the Company pursuant to this Section 3(a).

(b)           In addition to its rights under Section 3(a) above,
upon an Exercise Default, the Exercise Price applicable to the applicable exercise
shall be automatically be adjusted to the lower of (i) the Exercise Price in
effect on the Exercise Date and (ii) the lowest Exercise Price occurring from
the first date of such Exercise Default through the date on which all Warrant
Shares to which the Holder is entitled have been delivered in accordance with
the terms of this Warrant.  The Holder
shall have the right to pursue all other remedies available to it at law or in
equity (including, without limitation, a decree of specific performance and/or
injunctive relief).

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4.    EXERCISE LIMITATION.

In no event shall the Holder be permitted to exercise
this Warrant, or part thereof, if, upon such exercise, the number of shares of
Common Stock beneficially owned by the Holder (other than shares which may be
deemed beneficially owned except for being subject to a limitation on exercise
or exercise analogous to the limitation contained in this Section 4), would
exceed 4.99% of the number of shares of Common Stock then issued and
outstanding, it being the intent of the Company and the Holder that the Holder
not be deemed at any time to have the power to vote or dispose of greater than
4.99% of the number of shares of Common Stock issued and outstanding at any
time. Nothing contained herein shall be deemed to restrict the right of the
Holder to exercise this Warrant at such time as such exercise will not violate
the provisions of this Section
4.  As used herein, beneficial ownership shall be
determined in accordance with Section 13(d) of (i) Securities Exchange Act of
1934, as amended, and the rules thereunder. 
To the extent that the limitation contained in this Section 4 applies (and without limiting any rights the
Company may otherwise have), the Company may rely on the Holder’s determination
of whether this Warrant is exercisable pursuant to the terms hereof, the Company shall have no obligation whatsoever
to verify or confirm the accuracy of such determination, and the submission of
an Exercise Notice by the Holder shall be deemed to be the Holder’s
representation that this Warrant is exercisable pursuant to the terms
hereof. 
The Company shall have no liability to any person if the Holder’s
determination of whether this Warrant is exercisable pursuant to the terms
hereof is incorrect.

5.                                       PAYMENT OF THE EXERCISE PRICE; CASHLESS EXERCISE.

The Holder may pay the Exercise Price in either of the
following forms or, at the election of Holder, a combination thereof:

(a)  through a
cash exercise (a “Cash
Exercise”) by delivering immediately available funds, or

(b)  through a cashless exercise (a “Cashless Exercise”) if,
following the one-year anniversary of the Issue Date, an effective Registration
Statement is not available for the resale of all of the Warrant Shares issuable
hereunder at the time an Exercise Notice is delivered to the Company, or if the
Company otherwise consents in writing. 
The Holder shall effect a Cashless Exercise by surrendering this Warrant
to the Company and noting on the Exercise Notice that the Holder wishes to
effect a Cashless Exercise, upon which the Company shall issue to the Holder a number
of Warrant Shares determined as follows:

	
  

  	
  X = Y x (A-B)/A

  
	
   

  	
   

  
	
  where:

  	
  X = the number of Warrant Shares to be issued to the
  Holder;

  
	
   

  	
   

  
	
   

  	
  Y = the number of Warrant Shares with respect to
  which this Warrant is being exercised;

  

 

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  A = the Market Price as of the Exercise Date; and

  
	
   

  	
   

  
	
   

  	
  B = the Exercise Price.

  

 

It is intended and
acknowledged that the Warrant Shares issued in a Cashless Exercise transaction
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares required by Rule 144 shall be deemed to have been commenced,
on the Issue Date.

6.    ANTI-DILUTION
ADJUSTMENTS; DISTRIBUTIONS; OTHER EVENTS.

The Exercise Price
and the number of Warrant Shares issuable hereunder shall be subject to
adjustment from time to time as provided in this Section 6.

(a)           Stock Splits, Stock Interests, Etc.  If, at any time on or after the Issue Date,
the number of outstanding shares of Common Stock is increased by a stock split,
stock dividend, combination, reclassification or other similar event, the Exercise
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a reverse stock split, combination,
reclassification or other similar event, the Exercise Price shall be
proportionately increased. In such event, the Company shall notify the Company’s
transfer agent of such change on or before the effective date thereof.

(b)           Major Transactions.  If, at any time after the Issue Date, any Major
Transaction shall occur, then the Holder shall thereafter have the right to
receive upon exercise, in lieu of the shares of Common Stock otherwise
issuable, such shares of publicly traded stock, securities and/or other
property as would have been issued or payable upon such Major Transaction with
respect to or in exchange for the number of shares of Common Stock which would
have been issuable upon exercise had such Major Transaction not taken place
(without giving effect to any limitations on such exercise contained in this Warrant
or the Securities Purchase Agreement). Notwithstanding the foregoing, following
a Major Transaction in which all or substantially all of the outstanding Common
Stock of the Company is exchanged for, converted into, acquired for or
constitutes the right to receive solely cash (a “Triggering Event”), at the
written request of the Holder delivered before the 30th day after such
Triggering Event, the Company (or the successor entity) shall purchase this
Warrant from the Holder by paying to the Holder, within five days after such
request, cash in an amount equal to the Black-Scholes Value (as defined below)
of the remaining unexercised portion of this Warrant.  “Black-Scholes Value” means the value of the
unexercised portion of this Warrant calculated using the Black-Scholes Option
Pricing Model determined as of the day immediately following the public
announcement of the applicable Triggering Event and reflecting (i) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of such request and (ii) an
expected volatility equal to the lesser of (a) the 100 day volatility obtained
from the HVT function on Bloomberg or (b) a volatility of 60.  The Company shall not effect any Major
Transaction unless (i) the Holder has received written notice of such
transaction at least thirty (30) days prior thereto (which period shall be
increased to sixty one (61) days if, at such time, without giving effect to the
limitation on exercise contained in Section 4 hereof, the Holder would
beneficially own more than 4.9% of the Common Stock then outstanding, and the

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Holder has
notified the Company in writing of such circumstance) but in no event later
than fifteen (15) days prior to the record date for the determination of
stockholders entitled to vote with respect thereto; provided, however,
that the Company shall publicly disclose the material terms of any such Major
Transaction on or before the date on which it delivers notice of a Major
Transaction to the Holder, and (ii) the resulting successor or acquiring entity
(if not the Company) assumes by written instrument (in form and substance
reasonable satisfactory to the Holder) the obligations of the Company under
this Warrant.  The above provisions shall
apply regardless of whether or not there would have been a sufficient number of
shares of Common Stock authorized and available for issuance upon exercise of
this Warrant as of the date of such transaction, and shall similarly apply to
successive Major Transactions.

(c)           Distributions.  If, at any time after the Issue Date, the
Company declares or makes any distribution of cash or any other assets (or
rights to acquire such assets) to holders of Common Stock, including without
limitation any dividend or distribution to the Company’s stockholders in shares
(or rights to acquire shares) of capital stock of a subsidiary) (a “Distribution”), the
Company shall deliver written notice of such Distribution (a “Distribution Notice”)
to the Holder at least fifteen (15) days prior to the earlier to occur of (i)
the record date for determining stockholders entitled to such Distribution (the
“Record Date”)
and (ii) the date on which such Distribution is made (the “Distribution Date”)(the
earlier of such dates being referred to as the “Determination Date”).  Upon receipt of the Distribution Notice, the
Holder shall promptly (but in no event later than three (3) Business Days)
notify the Company whether it has elected (A) to receive the same amount and
type of assets (including, without limitation, cash) being distributed as
though the Holder were, on the Determination Date, a holder of a number of
shares of Common Stock into which this Warrant is exercisable as of such
Determination Date (such number of shares to be determined without giving
effect to any limitations on such exercise) or (B) upon any exercise of this Warrant
on or after the Distribution Date, to reduce the Exercise Price applicable to
such exercise by reducing the Exercise Price in effect on the Business Day
immediately preceding the Record Date by an amount equal to the fair market
value of the assets to be distributed divided by the number of shares of
Common Stock as to which such Distribution is to be made, such fair market value
to be reasonably determined in good faith by the independent members of the
Company’s Board of Directors.  Upon
receipt of such election notice from the Holder, the Company shall timely effectuate
the transaction or adjustment contemplated in the foregoing clause (A) or (B), as
applicable.  If the Holder does not notify the Company of
its election pursuant to the preceding sentence on or prior to the
Determination Date, the Holder shall be deemed to have elected clause (A) of
the preceding sentence.

(d)           Convertible Securities; Options.  If, at any time after the Issue Date, the
Company issues Convertible Securities or Options to the record holders of the
Common Stock, whether or not such Convertible Securities or Options are
immediately convertible, exercisable or exchangeable, then the Holders shall be
entitled, upon any exercise of this Warrant after the date of record for
determining stockholders entitled to receive such Convertible Securities or
Options (or if no such record is taken, the date on which such Convertible
Securities or Options are issued), to receive the aggregate number of
Convertible Securities or Options which the Holder would have received with
respect to the shares of Common Stock issuable upon such exercise (without
giving effect to any limitations on such exercise contained in this Warrant or

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the Securities Purchase
Agreement) had the Holder been the holder of such shares of Common Stock on the
record date for the determination of stockholders entitled to receive such
Convertible Securities or Options (or if no such record is taken, the date on
which such Convertible Securities or Options were issued).

(e)           Dilutive Issuances.

(i)            Adjustment Upon Dilutive Issuance.  If, at any time after the Issue Date, the
Company issues or sells, or in accordance with Section 6(e)(ii) is deemed to have
issued or sold, any shares of Common Stock for no consideration or for a
consideration per share less than the Exercise Price on the date of such
issuance or sale (or deemed issuance or sale) (a “Dilutive Issuance”), then the Exercise
Price shall be adjusted as follows:

(A)          if such Dilutive Issuance occurs on or
prior to the eighteen (18) month anniversary of the Issue Date, then effective
immediately upon such Dilutive Issuance, the Exercise Price shall be adjusted
so as to equal the consideration received or receivable by the Company (on a
per share basis) for the additional shares of Common Stock so issued, sold or
deemed issued or sold in such Dilutive Issuance (which, in the case of a deemed
issuance or sale, shall be calculated in accordance with Section 6(e)(ii)
below).  Notwithstanding the foregoing,
no adjustment shall be made pursuant to this Section 6(e)(i)(A) if such adjustment
would result in an increase in the Exercise Price.

(B)           if such Dilutive Issuance occurs
after the eighteen (18) month anniversary of the Issue Date, then effective
immediately upon the Dilutive Issuance, the Exercise Price shall be adjusted so
as to equal an amount determined by multiplying such Exercise Price by the following
fraction:

N0 + N1

N0 + N2

where:

N0 = the number of shares of Common Stock outstanding
immediately prior to such Dilutive Issuance (without taking into account any
Convertible Securities or Options, including the Notes and Warrants);

N1 = the number of
shares of Common Stock which the aggregate consideration, if any, received or
receivable by the Company for the total number of such additional shares of
Common Stock so issued, sold or deemed issued or sold in such Dilutive Issuance
(which, in the case of a deemed issuance or sale, shall be calculated in
accordance with Section
6(e)(ii) below) would purchase at the Exercise Price in effect
immediately prior to such Dilutive Issuance; and

N2 = the number of such additional shares of Common Stock
so issued,

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sold or deemed issued or sold in such Dilutive
Issuance.

Notwithstanding the
foregoing, no adjustment shall be made pursuant hereto if such adjustment would
result in an increase in the Exercise Price.

(ii)           Effect On Exercise Price Of
Certain Events.  For purposes of
determining the adjusted Exercise Price under Section 6(e)(i), the following will be
applicable:

(A)          Issuance Of Options.  If the Company issues or sells any Options,
whether or not immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such Options (and the price of
any conversion of Convertible Securities, if applicable) is less than the Exercise
Price in effect on the date of issuance or sale of such Options, then the
maximum total number of shares of Common Stock issuable upon the exercise of
all such Options (assuming full conversion, exercise or exchange of Convertible
Securities, if applicable) shall, as of the date of the issuance or sale of
such Options, be deemed to be outstanding and to have been issued and sold by
the Company for such price per share. For purposes of the preceding sentence,
the “price per share for which Common Stock is issuable upon the exercise of
such Options” shall be determined by dividing (x) the total amount, if any,
received or receivable by the Company as consideration for the issuance or sale
of all such Options, plus the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the exercise of all such
Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion, exercise or exchange thereof
(determined in accordance with the calculation method set forth in Section 6(e)(ii)(B)
below) at the time such Convertible Securities first become convertible,
exercisable or exchangeable, by (y) the maximum total number of shares of
Common Stock issuable upon the exercise of all such Options (assuming full
conversion, exercise or exchange of Convertible Securities, if applicable). No
further adjustment to the Exercise Price shall be made upon the actual issuance
of such Common Stock upon the exercise of such Options or upon the conversion,
exercise or exchange of Convertible Securities issuable upon exercise of such
Options.

(B)           Issuance Of Convertible Securities.  If the Company issues or sells any
Convertible Securities, whether or not immediately convertible, exercisable or
exchangeable, and the price per share for which Common Stock is issuable upon
such conversion, exercise or exchange is less than the Exercise Price in effect
on the date of issuance or sale of such Convertible Securities, then the
maximum total number of shares of Common Stock issuable upon the conversion,
exercise or exchange of all such Convertible Securities shall, as of the date
of the issuance or sale of such Convertible Securities, be deemed to be
outstanding and to have been issued and sold by the Company for such price per
share. If the Convertible Securities so issued or sold do not have a
fluctuating conversion or exercise price or exchange ratio, then for the
purposes of the immediately preceding sentence, the “price per share for which
Common Stock is issuable upon such conversion, exercise or exchange” shall be
determined by dividing (A) the total amount, if any, received or receivable by
the Company as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate

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amount of additional consideration, if any, payable to
the Company upon the conversion, exercise or exchange thereof (determined in
accordance with the calculation method set forth in this Section 6(e)(ii)(B))
at the time such Convertible Securities first become convertible, exercisable
or exchangeable, by (B) the maximum total number of shares of Common Stock
issuable upon the exercise, conversion or exchange of all such Convertible
Securities. If the Convertible Securities so issued or sold have a fluctuating
conversion or exercise price or exchange ratio (a “Variable Rate Convertible Security”),
then for purposes of the first sentence of this Section 6(e)(ii)(B), the “price per
share for which Common Stock is issuable upon such conversion, exercise or
exchange” shall be deemed to be the lowest price per share which would be
applicable (assuming all holding period and other conditions to any discounts
contained in such Variable Rate Convertible Security have been satisfied) if
the conversion price of such Variable Rate Convertible Security on the date of
issuance or sale thereof were equal to the actual conversion price on such date
(or such higher minimum conversion price if such Variable Rate Convertible
Security is subject to a minimum conversion price) (the “Assumed Variable Market Price”),
and, further, if the conversion price of such Variable Rate Convertible
Security at any time or times thereafter is less than or equal to the Assumed
Variable Market Price last used for making any adjustment under this Section 6(e) with
respect to any Variable Rate Convertible Security, the Exercise Price in effect
at such time shall be readjusted to equal the Exercise Price which would have
resulted if the Assumed Variable Market Price at the time of issuance of the
Variable Rate Convertible Security had been equal to the actual conversion
price of such Variable Rate Convertible Security existing at the time of the
adjustment required by this sentence; provided,
however, that if the conversion or exercise price or exchange ratio
of a Convertible Security may fluctuate solely as a result of provisions
designed to protect against dilution, such Convertible Security shall not be
deemed to be a Variable Rate Convertible Security.  No further adjustment to the Exercise Price
shall be made upon the actual issuance of such Common Stock upon conversion,
exercise or exchange of such Convertible Securities.

(C)           Change In Option Price Or
Conversion Rate.  If there is a
change at any time in (x) the amount of additional consideration payable to the
Company upon the exercise of any Options; (y) the amount of additional
consideration, if any, payable to the Company upon the conversion, exercise or
exchange of any Convertible Securities; or (z) the rate at which any
Convertible Securities are convertible into or exercisable or exchangeable for
Common Stock (in each such case, other than under or by reason of provisions
designed to protect against dilution), the Exercise Price in effect at the time
of such change shall be readjusted to the Exercise Price which would have been
in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed additional consideration or changed
conversion, exercise or exchange rate, as the case may be, at the time
initially issued or sold.

(D)          Calculation Of Consideration
Received.  If any Common Stock,
Options or Convertible Securities are issued or sold for cash, the
consideration received therefor will be the amount received by the Company
therefor. In case any Common Stock, Options or Convertible Securities are
issued or sold for a consideration part or all of which shall be other than
cash, including in the case of a strategic or similar arrangement in which the
other entity will provide services to the Company, purchase

 10
 

 

 

services from the Company or otherwise provide
intangible consideration to the Company, the amount of the consideration other
than cash received by the Company (including the net present value of the
consideration expected by the Company for the provided or purchased services)
shall be the fair market value of such consideration. In case any Common Stock,
Options or Convertible Securities are issued in connection with any merger or
consolidation in which the Company is the surviving corporation, the amount of
consideration therefor will be deemed to be the fair market value of such
portion of the net assets and business of the non-surviving corporation as is
attributable to such Common Stock, Options or Convertible Securities, as the
case may be. The independent members of the Company’s Board of Directors shall
calculate reasonably and in good faith, using standard commercial valuation
methods appropriate for valuing such assets, the fair market value of any
consideration.

(iii)          Exceptions To Adjustment Of Exercise
Price.  Notwithstanding the
foregoing, no adjustment to the Exercise Price shall be made pursuant to this Section 6(e) upon the
issuance of any Excluded Securities.

 (iv)         Notice
Of Adjustments.  Upon the occurrence
of each adjustment or readjustment of the Exercise Price pursuant to this Section 6(e)
resulting in a change in the Exercise Price by more than one percent (1%), or
any change in the number or type of stock, securities and/or other property
issuable upon exercise of this Warrant, the Company, at its expense, shall
promptly compute such adjustment, readjustment or change and prepare and
furnish to the Holder a certificate setting forth such adjustment, readjustment
or change and showing in detail the facts upon which such adjustment,
readjustment or change is based.  The
Company shall, upon the written request at any time of the Holder, furnish to
the Holder a like certificate setting forth (i) such adjustment, readjustment
or change, (ii) the Exercise Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or
property which at the time would be received upon exercise of this Warrant.

(v)           Adjustments; Additional Shares,
Securities or Assets.  In the event
that at any time, as a result of an adjustment made pursuant to this Section 6, the Holder
of this Warrant shall, upon exercise of this Warrant, become entitled to
receive securities or assets (other than Common Stock) then, wherever
appropriate, all references herein to shares of Common Stock shall be deemed to
refer to and include such shares and/or other securities or assets; and
thereafter the number of such shares and/or other securities or assets shall be
subject to adjustment from time to time in a manner and upon terms as nearly
equivalent as practicable to the provisions of this Section 6.  Any adjustment made herein that results in a
decrease in the Exercise Price shall also effect a proportional increase in the
number of shares of Common Stock into which this Warrant is exercisable.

7.    MISCELLANEOUS.

(a)           Failure to Exercise Rights not
Waiver.  No failure or delay on the
part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any

 11
 

 

 

such power, right
or privilege preclude any other or further exercise thereof. All rights and
remedies of the Holder hereunder are cumulative and not exclusive of any rights
or remedies otherwise available. In the event that the Company breaches any of
its obligations hereunder to issue Warrant Shares or pay any amounts as and
when due, the Company shall bear all costs incurred by the Holder in collecting
such amount, including without limitation reasonable legal fees and expenses.

(b)         Notices. Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Warrant must be in writing and will be deemed to have been
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
Business Day after deposit with an overnight courier service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

	
  if to the Company:

  	
   

  
	
   

  	
   

  
	
  Earth Biofuels,
  Inc.

  	
   

  
	
  3001 Knox
  Street, Suite 403,

  	
   

  
	
  Dallas, Texas
  75205

  
	
  Telephone:

  	
  214.389.9800

  
	
  Facsimile:

  	
  214.389.9806

  
	
  Attention:

  	
  Dennis McLaughlin

  
	
   

  	
   

  
	
  with a copy (for informational purposes only) to:

  
	
   

  
	
  Scheef &
  Stone, LLP

  
	
  Telephone:

  	
  214.706.4200

  
	
  Facsimile:

  	
  214.706.4242

  
	
  Attention:

  	
  Roger A. Crabb, Esq.

  
					

 

and if to the
Holder, to the address and facsimile number as to which the Holder has notified
the Company in writing. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender’s facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by an overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from an overnight courier service in accordance with clause (i), (ii) or (iii)
above, respectively.

(c)           Amendments.  No amendment, modification or other change
to, or waiver of any provision of, this Warrant may be made unless such
amendment, modification or change is set forth in writing and is signed by the
Company and the Holder.

(d)           Transfer of Warrant.  The Holder may sell, transfer or otherwise
dispose of all or any part of this Warrant (including without limitation
pursuant to a pledge) to any person or entity as long as such sale, transfer or
disposition is the subject of an effective registration statement under the
Securities Act of 1933, as amended, and applicable state securities laws, or is
exempt from registration thereunder, and is otherwise made in accordance

 12
 

 

 

with the
applicable provisions of the Securities Purchase Agreement.  From and after the date of any such sale,
transfer or disposition, the transferee hereof shall be deemed to be the holder
of the portion of this Warrant acquired by such transferee, and the Company
shall, as promptly as practicable, issue and deliver to such transferee a new Warrant
identical in all respects to this Warrant, in the name of such transferee. The
Company shall be entitled to treat the original Holder as the holder of this
entire Warrant unless and until it receives written notice of the sale,
transfer or disposition hereof.

(e)           Lost or Stolen Warrant.  Upon receipt by the Company of evidence of
the loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of indemnity or security reasonably satisfactory to
the Company, and upon surrender and cancellation of this Warrant, if mutilated,
the Company shall execute and deliver to the Holder a new Warrant identical in
all respects to this Warrant.

(f)            Governing Law.  This Warrant shall be governed by and
construed in accordance with the laws of the State of New York applicable to contracts made and to be performed
entirely within the State of New York.

(g)           Successors
and Assigns.  The terms and
conditions of this Warrant shall inure to the benefit of and be binding upon
the respective successors (whether by merger or otherwise) and permitted
assigns of the Company and the Holder. The Company may not assign its rights or
obligations under this Warrant except as specifically required or permitted
pursuant to the terms hereof.

(h)           Taxes.  The issue of stock certificates on exercises
of this Warrant shall be made without charge to the exercising Holder for any
tax in respect of the issue thereof.  The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of stock in any name
other than that of the Holder of any Warrant exercised, and the Company shall
not be required to issue or deliver any such stock certificate unless and until
the person or persons requesting the issue thereof shall have paid to the
Company the amount of such tax or shall have established to the reasonable
satisfaction of the Company that such tax has been paid.

[Signature Page to Follow]

 

 13

 

 

IN WITNESS WHEREOF, the Company has duly executed and delivered this
Warrant as of the Issue Date.

 

	
  

  	
   

  	
  EARTH BIOFUELS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Dennis G. McLaughlin, III

  
	
   

  	
   

  	
   

  	
  Name: Dennis G. McLaughlin, III

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  

 

 

 

EXHIBIT A to WARRANT

 

EXERCISE NOTICE

 

The undersigned Holder hereby irrevocably exercises
the right to purchase                      of
the shares of Common Stock (“Warrant Shares”) of EARTH BIOFUELS, INC.
evidenced by the attached Warrant (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, as permitted by Section 5(b) of the attached Warrant.

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 sum of $                                    
to the Company in accordance with the terms of the Warrant.

 

	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name of
  Registered Holder

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

By tendering this Exercise Notice, the Holder
represents to the Company that it is an “accredited
investor” as that term is defined in Rule 501 of Regulation D, and that it is
acquiring the Warrants Shares solely for its own account, and not with a
present view to the public resale or distribution of all or any part thereof,
except pursuant to sales that are registered under the Securities Act or are
exempt from the registration requirements of the Securities Act; provided,
however, that, in making such representation, the Holder does not agree to hold the Warrants Shares for
any minimum or specific term and reserves the right to sell, transfer or
otherwise dispose of the Warrants Shares at any time in accordance with the
provisions of the Warrant and with Federal and state securities laws applicable
to such sale, transfer or disposition.EXHIBIT 10.57

REGISTRATION RIGHTS AGREEMENT

THIS
REGISTRATION RIGHTS AGREEMENT (“Agreement”) is made and entered into as of the 21st
day of July, 2006, by and between APOLLO
RESOURCES INTERNATIONAL, INC.,
a Utah corporation having its principal place of business at 3001 Knox Street —
Suite 403, Dallas, Texas 75205-7305 (the “Company”), and GREENWICH
POWER, L.L.C., a Dela­ware limited liability company having its
principal place of business at 537 Steamboat Road, Greenwich, Connecticut
06830-7153 (the “Holder”).

RECITALS:

A.
Contemporaneously with the execution hereof, the Holder is purchasing from the
Company (i) $8,000,000 principal amount of the Company’s 7% notes, which notes
are exchangeable into common stock, $0.001 par value (the “Common Stock”) of
Earth Biofuels, Inc. (“Earth”) as therein provided, and (ii) an option
agreement to purchase 8,000,000 (subject to adjustment) shares of Earth Common
Stock from the Company (the shares of Common Stock deliverable upon conversion
of the said notes and upon exercise of the said option agreement are
hereinafter referred to as the “Shares”).

B.
The Holder has requested, and the Company has agreed, as a condition to the
Holder’s obligation to acquire the said notes and option agreement, to cause
Earth to register the Shares under the Securities Act, upon the terms, and
subject to the conditions, hereinafter set forth.

NOW,
THEREFORE, in consideration of the premises and the mutual covenants and
agreements contained herein and other good, valuable and sufficient
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:

1. Demand Registration. The Company agrees that
the Company will, not later than sixty (60) days following the date on which it
receives a request therefor by the Holder, cause Earth to file a registration
statement (the “Registration Statement”) with the Securities and Exchange
Commission (“Commission”) relating to the Shares. Such Registration Statement may,
at the election of the Holder, be in connection with an underwritten public
offering of the Shares and in appropriate form therefor. The Company shall use
its best efforts, and cause Earth to do likewise, to cause such Registration
Statement promptly to become effective under the Securities Act and to qualify
the same under the blue sky laws of such states as may be requested. Provided
that such registration enables the Holder to dispose of substantially all of
the Shares, the Company shall be obligated to effect registration and qualification
pursuant to a request of the Holder no more than once; in the event that such
registration does not enable the Holder to dispose of substantially all of the
Shares, the Company shall cause Earth to effectuate not less than one
additional such registration upon like request by the Holder. 

2. Incidental Registration. If at any time Earth
proposes to register any equity securities under the Securities Act for its own
account or for the account of any of its stockholders,

 

the Company shall, each such time, give the Purchaser not less than
twenty (20) days’ written notice of such proposed registration. Upon the
written request of the Holder, given within twenty (20) days after receipt of
any such notice from the Company, the Company shall cause to be included in
such registration all of the Shares the Holder requests be registered in such
registration. There shall be no restriction with respect to the number of times
the Holder may request such incidental registration.

3. Expenses. All of its costs and expenses of
the registration and qualifications pursuant to this Agreement shall be borne
by the Company and/or by Earth, as determined by the Company and Earth. Such
costs and expenses shall include, without limitation, the fees and expenses of
counsel for Earth and of its accountants, one counsel for the Holder and all
other costs, fees and expenses of the Earth and Company incident to the
preparation, printing and filing under the Securities Act of the registration statement
and all amendments and supplements thereto, the cost of furnishing copies of
each preliminary prospectus, each final prospectus and each amendment or
supplement thereto to underwriters, dealers and other purchasers of the Shares
and the costs and expenses (including fees and disbursements of counsel)
incurred in connection with the qualification of the Shares under the blue sky
laws of various jurisdictions. Neither the Company nor Earth shall, however,
pay any underwriting discount or commissions to the extent related to the sale
of Shares sold in any registration and qualification.

4. Procedures. 

(a)
The Company will cause to keep the Holder advised in writing as to the initiation
of proceedings for such registration and qualification and as to the completion
thereof, and will cause Earth to advise the Holder, upon request, of the
progress of such proceedings.

(b)
The Company will cause Earth to keep the registration and qualifications under
this Agreement effective (and in compliance with the Securities Act) by such
action as may be necessary or appropriate until such time, if any as the Shares
shall have been sold. The Company’s obligations under this Section 4(b) shall include,
without limitation, to cause Earth to file of post-effective amendments and
supplements to any registration statement or prospectus necessary to keep the
Registration Statement current and the further qualification under any
applicable blue sky or other state securities laws to permit such sale or
distribution, all as requested by the Holder. The Company will cause Earth immediately
to notify the Holder at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

(c)
Without limiting any other provision hereof, in connection with any
registration of Shares under this Agreement, the Company will use its best
efforts, and will cause Earth to do likewise, to comply with the Securities
Act, the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and
all applicable rules and regulations of the Commission.

 2
 

 

(d)
In connection with any registration of Shares under this Agreement, the Company
will cause Earth to provide, if appropriate, a transfer agent and registrar for
the Shares not later than the effective date of such Registration Statement.

(e)
In connection with any registration of Shares under this Agreement, the Company
will, if requested by the underwriters for any Shares included in such registration,
cause Earth to enter into an underwriting agreement with such underwriters for
such offering, such agreement to contain such representations and warranties by
Earth and/or the Company and such other terms and provisions as are customarily
contained in underwriting agreements with respect to secondary distributions,
including, without limitation, provisions relating to indemnification and contribution.

5. Indemnification. The Company will, and will
cause Earth to, indemnify and hold harmless the Holder and each person, if any,
who controls the Holder within the meaning of the Securities Act against any
losses, claims, damages or liabilities, joint or several, and expenses
(including reasonable attorneys’ fees and expenses and reasonable costs of
investigation) to which the Holder or such controlling person may be subject,
under the Securities Act or otherwise, insofar as any thereof arise out of or
are based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in (A) the Registration Statement under which the
Holder’s Shares were registered under the Securities Act pursuant to this
Agreement, any prospectus or preliminary prospectus contained therein, or any
amendment or supplement thereto or (B) any other document incident to the
registration of the Shares under the Securities Act or the qualification of the
Shares under any state securities laws applicable to the Company, (ii) the
omission or alleged omission to state in any item referred to in the preceding clause
(i) a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act or any other federal or
state securities law, rule or regulation applicable to Earth or the Company and
relating to action or inaction by Earth or the Company in connection with any
such registration or qualification, except insofar as such losses, claims,
damages, liabilities or expenses arise out of or are based upon any untrue
statement or alleged untrue statement or omission or alleged omission based
upon information furnished to Earth or the Company in writing by the Holder expressly
for use therein (with respect to which information the Holder shall so
indemnify and hold harmless Earth, the Company, any underwriter for the Company
or Earth, and each person, if any, who controls the Company or such underwriter
within the meaning of the Securities Act).

6. Notices. Any notice or demand required or
permitted to be made or given hereunder shall be deemed sufficiently made and
given if given by personal service or by the mailing of such notice or demand
by certified or registered mail, return receipt requested, or by overnight
courier service providing for proof of delivery, addressed, if to the Company,
at the Company’s address first above written, with a copy to Roger A. Crabb,
Esq., Scheef & Stone, L.L.P., 5956 Sherry Lane — Suite 1400, Dallas, Texas
75225-8031; or if to the Holder, at the Holder’s address first above written,
with a copy in like manner to Hilary B. Miller, Esq.,

 3
 

 

112 Parsonage Road, Greenwich, Connecticut 06830-3942. Either party may
change its address by like notice to the other party.

7. Governing Law; Forum. This Agreement shall
be construed and enforced in accordance with the substantive laws of the State
of New York without regard to conflict of law principles. Each party hereby
consents and submits to the exclusive personal and subject matter jurisdiction
of the state and federal courts located in New York County, New York for
purposes of any action or proceeding related to this Agreement. Trial by jury
in any action arising, proceeding or counterclaim arising hereunder is hereby
waived.

8. Binding Effect; Assignment; Third Party
Beneficiaries. This Agreement shall be binding upon the parties and their
respective successors and assigns and shall inure to the benefit of the parties
and their respective successors and assigns. No person (including, without
limitation, any employee of a party) shall be, or be deemed to be, a third
party beneficiary of this Agreement.

9. Miscellaneous. This Agreement constitutes
the entire contract between the parties with respect to the subject matter
hereof and cancels and supersedes all of the previous contracts, commitments,
representations, warranties and understandings (whether oral or written) by,
between or among the parties with respect to the subject matter hereof. No
addition to, and no cancellation, renewal, extension, modification or amendment
of, this Agreement shall be binding upon a party unless such addition,
cancellation, renewal, extension, modification or amendment is set forth in a
written instrument which states that it adds to, amends, cancels, renews,
extends or modifies this Agreement and has been approved by all of the parties
hereto. No waiver of any provision of this Agreement shall be binding upon a
party unless such waiver is expressly set forth in a written instrument which
is executed and delivered by such party or on behalf of such party by an
officer of, or attorney-in-fact for, such party. Such waiver shall be effective
only to the extent specifically set forth in such written instrument. Neither
the exercise (from time to time and at any time) by a party of, nor the delay
or failure (at any time or for any period of time) to exercise, any right,
power or remedy shall constitute a waiver of the right to exercise, or impair,
limit or restrict the exercise of, such right, power or remedy or any other
right, power or remedy at any time and from time to time thereafter. No waiver
of any right, power or remedy of a party shall be deemed to be a waiver of any
other right, power or remedy of such party or shall, except to the extent so
waived, impair, limit or restrict the exercise of such right, power or remedy.
If any provision of this Agreement shall hereafter be held to be invalid,
unenforceable or illegal, in whole or in part, in any jurisdiction under any
circumstances for any reason, (i) such provision shall be reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal while preserving the intent of the parties as expressed in, and the benefits
to the parties provided by, this Agreement or (ii) if such provision cannot be
so reformed, such provision shall be severed from this Agreement and an
equitable adjustment shall be made to this Agreement (including, without
limitation, addition of necessary further provisions to this Agreement) so as
to give effect to the intent as so expressed and the benefits so provided. Such
holding shall not affect or impair the validity, enforceability or legality of
such provision in any other jurisdiction or under any other circumstances.
Neither such holding

 4
 

 

nor such reformation or severance shall affect or impair the legality,
validity or enforceability of any other provision of this Agreement.

10. Remedies. The rights, powers and remedies of
the parties set forth herein for a breach of or default under this Agreement
are cumulative and in addition to, and not in lieu of, any rights or remedies
that any party may otherwise have under this Agreement, at law or in equity. The
parties acknowledge that the Shares are unique, and that any violation of this
Agreement cannot be compensated for by damages alone. Accordingly, in addition
to all of the other remedies which may be available hereunder or under
applicable law, any party shall have the right to any equitable relief which
may be appropriate to remedy a breach or threatened breach by any other party hereunder,
including, without limitation, the right to enforce specifically the terms of
this Agreement by obtaining injunctive relief in respect of any violation or
non-performance hereof, and any party shall have the right to seek recovery of
and be awarded attorneys’ fees and expenses in any proceeding with respect to
this Agreement as reasonably determined by the court in which such proceeding
is brought.

11. Headings; Counterparts. The headings set
forth in this Agreement have been inserted for convenience of reference only,
shall not be considered a part of this Agreement and shall not limit, modify or
affect in any way the meaning or interpretation of this Agreement. This
Agreement may be signed in any number of counterparts, each of which (when
executed and delivered) shall constitute an original instrument, but all of
which together shall constitute one and the same instrument. It shall not be
necessary when making proof of this Agreement to account for any counterparts
other than a sufficient number of counterparts which, when taken together,
contain signatures of all of the parties. A photocopy or electronic facsimile
of this Agreement or any signature hereon shall be valid as an original.

 5
 

 

IN
WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as
of the date first above written.

	
  APOLLO RESOURCES INTERNATIONAL,
  INC.

  	
   

  	
  GREENWICH POWER, L.L.C.

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/  DENNIS G.
  MCLAUGHLIN, III

  	
   

  	
   

  	
  By:

  	
  /s/  LANCE A. BAKROW

  	
   

  	 

	
  Dennis G. McLaughlin, III

  	
   

  	
   

  	
  Lance A. Bakrow

  	
   

  	 

	
  Its President

  	
   

  	
   

  	
  Its Managing
  Member

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  The undersigned
  agrees to comply with

  the provisions of this Agreement:

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  EARTH
  BIOFUELS,  INC.

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
  By:

  	
  /s/  DENNIS G.
  MCLAUGHLIN, III

  	
   

  	
   

  
	
   

  	
  Dennis G. McLaughlin, III

  	
   

  	
   

  
	
   

  	
  Its President

  	
   

  	
   

  
									

 

 6

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