LOCKUP AGREEMENT
THIS
LOCKUP AGREEMENT (the "Agreement") is entered into as of this 3rd day of April,
2007 (the "Effective Date") by and between each shareholder listed on Exhibit
A
(each a “Shareholder” and collectively, the "Shareholders") and Comanche Clean
Energy Corporation, a Cayman Islands corporation (the "Company").
WITNESSETH
WHEREAS,
each Shareholder has acquired Ordinary Shares, par value $.001 per share, of
the
Company (the "Shares"), all of which Shares shall be subject to this Agreement
(such Shares are sometimes also hereinafter referred to as the "Restricted
Shares"); and
WHEREAS,
the Company has, concurrently with the execution of this Agreement, issued
approximately $ 44,752,545 in face amount of Convertible Notes (the
"Convertible Notes"); and
WHEREAS,
it was a condition precedent to the consummation of certain capital raising
transactions by the Company as of the date hereof (including the issuance
of the Convertible Notes) that the Shareholder agree to refrain from selling
the
Restricted Shares until the occurrence of certain events and/or the passage
of
certain dates (all as provided in this Agreement);
NOW,
THEREFORE, in consideration of the foregoing premises, and for other
good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1.
LOCKUP
OF SHARES. Each Shareholder hereby agrees that such Shareholder will not,
except
as provided herein, prior to the earlier of (a) the first anniversary of
the
date that the Company’s Registration Statement under the Securities Act of 1933,
as amended, covering the resale of all of the Company’s Shares by the purchasers
of the Convertible Notes is declared effective or (b) the third anniversary
of
the date hereof, sell (including without limitation, in a short sale), transfer,
assign or dispose of (by gift or otherwise) (collectively, "Transfer"), other
than Permitted Transfers, any of the Restricted Shares (the "Transfer
Restriction"). Notwithstanding the foregoing, the Restricted Shares shall
cease
to be subject to the Transfer Restriction in accordance with the following
provisions:
(a)
CHANGE
OF CONTROL. All of the Restricted Shares shall immediately cease to be subject
to the Transfer Restriction upon a Change of Control. For purposes of this
Agreement, a “Change of Control” shall mean any Fundamental Transaction other
than (i) any reorganization, recapitalization or reclassification of Shares,
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 (ii) pursuant to a migratory merger effected solely for the
purpose
of changing the jurisdiction of incorporation of the Company. “Fundamental
Transaction” means that the Company shall, directly or indirectly, in one or
more related transactions, after the date hereof (i) be dissolved or liquidated
or be the subject of a plan of dissolution or liquidation adopted by its
stockholders; (ii) consolidate or merge with or into (whether or not the
Company
is the surviving corporation) another person or persons; (iii) sell, assign,
transfer, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company to another person; (iv) 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 voting Shares (not including any voting
Shares 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), (v) 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 50% of the outstanding voting Shares (not including any
voting Shares 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); (vi) any "person" or "group"
(as these terms are used for purposes of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (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 Shares; or (vii) cease to have during any period of
two
(2) years, as the majority of its Board of Directors individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose nomination for election was approved
by a
vote of at least a majority of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved).
(b)
DEATH
OR INCAPACITY. Upon the death or incapacity of a Shareholder,
all of the Restricted Shares held by such Shareholder shall immediately
cease to
be subject to the Transfer Restriction.
2.
PERMITTED TRANSFERS TO TRUSTS. Notwithstanding the Transfer Restriction,
Transfers of Restricted Shares by a Shareholder shall be permitted to:
(i) any
member or members of the Shareholder’s immediate family, including the spouse,
sibling, child, step child, grandchild and/or parent of such Shareholder
and/or
the spouse of any such person (collectively, “Immediate Families”); (ii) any
corporation, partnership, limited liability company, trust or other entity
or
company, all of the equity or beneficial ownership interests of which are
owned
by one or more of the Shareholders; (iii) employees of the Company or any
of its
direct or indirect subsidiaries and their Immediate Families; (iv) directors
of
the Company; and (v) charitable foundations formed by the Shareholder at
any
time; PROVIDED, HOWEVER, that (y) Restricted Shares transferred pursuant
to this
Section 2 shall remain Restricted Shares subject to the Transfer Restriction,
except as provided in Section 1, and (z) no transfer under this Section
2 shall
be permitted or be recorded in the records of the Company, unless and until
the
transferee of such Restricted Shares agrees by notice in writing to the
Company
to be bound by the terms of this Agreement.
3.
REGISTRATION RIGHTS.
(a)
Certain
Definitions.
As used
in this Section 3, the following terms shall have the following respective
meanings:
"Holders"
shall mean the holders of Registrable Securities.
"Initiating
Holders" shall mean any persons who in the aggregate are Holders of at
least a
majority of the voting power held by all outstanding Registrable
Securities.
"Registrable
Securities" shall mean all of the Shares held by the Shareholders on the
date of
this Agreement and (ii) any Shares issued in respect thereof upon any stock
split, stock dividend, recapitalization or similar event.
The
terms
"register," "registered" and "registration" shall refer to a registration
effected by preparing and filing a registration statement in compliance
with the
Securities Act and applicable rules and regulations thereunder, and the
declaration or ordering of the effectiveness of such registration
statement.
"Registration
Expenses" shall mean all expenses incurred by the Company in compliance
with
this Sections 3, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the Company,
blue
sky fees and expenses, reasonable fees and disbursements of one counsel
for all
the selling Holders for a "due diligence" examination of the Company, and
the
expense of any special audits incident to or required by any such registration
(but excluding the compensation of regular employees of the Company, which
shall
be paid in any event by the Company).
“Securities
Act” shall mean the Securities Act of 1933, as amended.
"Selling
Expenses" shall mean all underwriting discounts and selling commissions
applicable to the sale of Registrable Securities and all fees and disbursements
of counsel for any Holder, except as otherwise provided herein.
"Underwritten
Offering" shall mean the offering and sale of Registrable Securities in
a
registration pursuant to a firm commitment underwriting to an underwriter
at a
fixed price for reoffering or pursuant to agency or best efforts arrangements
with a placement agent or underwriter.
(b) Right
to Piggyback.
At any
time after the first anniversary of the date the Company’s Registration
Statement on Form F-1 covering the resale of Shares issuable upon conversion
of
the Convertible Notes is declared effective, the Company proposes to register
any of its securities under the Securities Act and the registration form
to be
used may be used for the registration and contemplated disposition of
Registrable Securities (a "Piggyback Registration"), the Company will give
prompt written notice to all Holders of Registrable Securities of its intention
to effect such a registration so that such notice is received by each Holder
at
least twenty (20) days before the anticipated filing date. The Company
will
include in such registration all Registrable Securities with respect to
which
the Company has received written requests for inclusion therein within
ten (10)
days after the receipt of the Company's notice.
(c) Piggyback
Expenses.
In
connection with each Piggyback Registration, all of the Registration Expenses
of
the Holders of Registrable Securities will be paid by the Company and such
Holders shall pay all of the Selling Expenses attributable to the sale
of their
securities pursuant to the Piggyback Registration, including their pro
rata
share of all fees and disbursements of counsel for the Holders in connection
with such Piggyback Registration.
(d) Priority
on Primary Registrations.
If a
Piggyback Registration is an underwritten primary registration on behalf
of the
Company, and the managing underwriters advise the Company in writing that
in
their opinion the distribution of the Registrable Securities to be included
concurrently with the securities being registered on behalf of the Company
would
materially adversely affect the distribution of such securities by the
Company,
the Company will include in such registration (i) first, the securities
the
Company proposes to sell, (ii) second, the Registrable Securities and securities
of the Company with respect to which similar registration rights have heretofore
been granted and requested to be included in such registration, pro rata
in
accordance with the amounts of Registrable Securities and such securities
requested to be so included by the respective Holders and holders of such
securities of the Company; and (iii) third, any other securities requested
to be
included in such registration.
(e) Priority
on Secondary Registrations.
If a
Piggyback Registration is an underwritten secondary registration on behalf
of
holders of the Company's securities, and the managing underwriters advise
the
Company in writing that in their opinion the distribution of the Registrable
Securities to be included concurrently with the securities being registered
on
behalf of the Company would materially adversely affect the distribution
of such
securities by the Company, the Company will include in such registration
(i)
first, the securities requested to be included therein by the holders requesting
such registration, (ii) second, the Registrable Securities and securities
of the
Company with respect to which similar registration rights have heretofore
been
granted and requested to be included in such registration, pro rata in
accordance with the amounts of Registrable Securities and such securities
requested to be so included by the respective Holders and holders of such
securities of the Company, and (iii) third, other securities requested
to be
included in such registration.
4.
THIRD
PARTY BENEFICIARIES. Each Shareholder acknowledges and agrees that pursuant
to
that certain Securities Purchase Agreement dated as of March 30, 2007 in
respect
of the issuance of Convertible Notes and warrants of the Company ("Warrants")
and that certain Securities Purchase Agreement dated as of March 30, 2007
in
respect of the issuance of Shares and Warrants, such Shareholder’s accepting to
be bound by the terms and conditions of this Agreement is a condition precedent
to the consummation of such transactions. Consequently, the Company agrees
that
it will not amend this Agreement without the written consent of (x) the
holders
of a majority of the outstanding principal amount of the Convertible Notes
and
(y) the holders of a majority of the Shares of the Company, not including
for
such purpose any Shareholder which is a party to this Agreement. Except
as set
forth above, this Agreement is solely for the benefit of the Company and
the
Shareholders, and nothing contained in any agreement shall be deemed to
confer
upon anyone other than the holders of Convertible Notes and Shares and
the
Company and Shareholders any right to insist upon or to enforce the performance
or observance of any of the obligations contained herein.
5.
GOVERNING LAW/VENUE. This Agreement shall be governed by applicable U.S.
federal securities laws and the internal laws of the State of New York
(without
regard to any conflict of law provisions). The sole and exclusive venue
for any
legal proceeding involving this Agreement shall be the courts located in
the
State of New York.
6.
COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7.
AMENDMENTS AND WAIVERS. Subject to the terms and provisions of Section
4 hereof,
this Agreement may only be amended with the written consent of the Company
and
each Shareholder.
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date
first above written.
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COMANCHE
CLEAN ENERGY CORPORATION
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Print
Name: ▇▇▇▇▇▇
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Print
Title: Chairman
Duly
authorized
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SHAREHOLDERS
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NETOIL
INTERMEDIACAO
DE
NEGOCIOS LTDA
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CASTANHERA
ACQUISITION
COMPANY,
LLC
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By:
/s/
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▇▇▇▇▇▇ Vilhena
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By:
/s/
Alexandre
▇▇▇▇▇ ▇▇▇▇▇ Kume
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Name:
▇▇▇▇▇ ▇▇▇▇▇▇ Vilhena
Title:
Director
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Name:
Alexandre ▇▇▇▇▇ ▇▇▇▇▇ Kume
Title:
Director
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OURO
VERDE PARTICIPACOES S/A
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By:
/s/
Alexandre
▇▇▇▇▇ ▇▇▇▇▇ Kume
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By:
/s/
Alexandre
▇▇▇▇▇ ▇▇▇▇▇ Kume
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Name:
Alexandre ▇▇▇▇▇ ▇▇▇▇▇ Kume
Title:
Director
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Name:
Francisco ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:
Director
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EXHIBIT
A
LIST
OF
SHAREHOLDER PARTIES TO AGREEMENT
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Netoil
Intermediacao Negocios Ltda
Castanhera
Acquisition Company, LLC
Ouro
Verde Participaçoes S/A