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Waiver and Consent
Reference
is made to that certain Securities Purchase Agreement, dated
as of June 13, 2007 (the “
SPA ”),
by and among China Solar & Clean Energy, Inc., a Nevada
corporation (the “
Company ”),
and the investors listed on the schedule attached thereto (the
“
Investors ”)
.
Capitalized
terms used but not otherwise defined herein shall have the
meanings ascribed to such terms in the SPA and the
Registration Rights Agreement (as defined below), as the case
may be.
WHEREAS,
the Company is contemplating raising capital in the amount of
approximately $11,260,000 through the issuance of 4,691,667
shares of the Company’s common stock (“
New Common ”)
at a purchase price of $2.40 per share (collectively, the
“
Proposed Financing ”)
with a number of investors (the “
New Investors ”)
in accordance with the terms of a Securities Purchase Agreement
(“
New SPA ”)
to be entered into with such New Investors.
WHEREAS,
pursuant to Section 6.13 of the SPA, each Investor has the
right to participate in any subsequent funding by the Company
on a pro rata basis, based on the percentage that (a) the
number of such Investor’s Percentage Shares (without
regard to the 4.9% Limitation but excluding shares of Common
Stock issuable upon exercise of Warrants) bears to (b) the
total number of shares of Common Stock outstanding plus the
number of Shares issuable upon conversion of the Series A
Preferred Stock and any other series of convertible preferred
stock or debt securities (without regard to the 4.9%
Limitations any other limitations on exercise such other
convertible preferred stock or debt securities). The term
“
Percentage Shares ”
shall mean the number of Total Shares less the number of shares of
Common Stock issuable upon exercise of outstanding Warrants.
Section 6.13 applies to each such offering based on the total
purchase price of the securities being offered by the
Company.
Each
of the Investors hereby expressly agrees that any right of
participation of any Investor provided under the SPA shall not
apply to any issuance of New Common to the New Investors in
the Proposed Financing. Each of the Investors also waives any
other rights such Investor may have under the SPA that may be
triggered by the Proposed Financing and hereby consents to the
Proposed Financing.
Reference
is also made to that certain Registration Rights Agreement,
dated as of June 13, 2007 (the “
Registration Rights Agreement ),
by and among the Company and the Investors entered into in
connection with the SPA
.
Under
the Registration Rights Agreement, the Company was required to
prepare and file a registration statement covering the sale of
the “Registrable Securities” as defined in the
Registration Rights Agreement. “
Registrable Securities ”
are defined to mean and include the Shares issuable upon conversion
of the Series A Preferred Stock and upon exercise of the Warrants
issued pursuant to the Securities Purchase Agreement. As to any
particular Registrable Securities, such securities cease to be
Registrable Securities when (a) they have been effectively
registered under the 1933 Act and disposed of in accordance with
the registration statement covering them, or (b) they are or may be
freely traded without registration pursuant to Rule 144. On
February 7, 2008 a registration statement with respect to
certain
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