REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
(this “Agreement”), made as
of February ___, 2010 (the “Effective Date”), by
and between New Generation Biofuels Holdings, Inc., a Florida corporation (the
“Company”), and
each of the persons and entities listed on Exhibit A attached
hereto (the “Holders”).
RECITALS
WHEREAS, simultaneously with
the execution and delivery of this Agreement, the Holders have agreed to
purchase, pursuant to a Subscription Agreement between the Company and each
Holder (the “Subscription
Agreement”), up to 3,000,000 shares (the “Shares”) of common
stock of the Company, $0.001 par value per share (the “Common Stock”) and
each Holder has been granted the option (the “Option”) to purchase
additional shares of Common Stock during a specified exercise period (the “Option Shares”), all
as described more fully in the Subscription Agreement; and
WHEREAS, the Subscription
Agreement requires the Company to grant registration rights with respect to the
Shares and the Option Shares as set forth herein.
AGREEMENT
NOW, THEREFORE, for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Definitions. As used in this
Agreement, the following capitalized terms have the following respective
meanings:
“Business Day” means a
day other than a Saturday or Sunday or any day on which banking institutions in
New York City, New York are authorized or obligated by law or executive order to
close.
“Common Stock” means
the Common Stock of the Company, par value $.001 per share.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, or any similar federal statute
then in effect, and a reference to a particular section thereof is deemed to
include a reference to the comparable section, if any, of any such similar
federal statute.
“Majority of Holders”
means Holders holding more than 50% in aggregate principal amount of the
Registrable Securities outstanding at the time of any determination in
question.
“Person” means any
individual, corporation, partnership, limited partnership, limited liability
company, syndicate, trust, association or other entity.
Prospectus” means the
prospectus included in any Shelf Registration Statement, as amended or
supplemented by any Prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by such Shelf
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference in such Prospectus.
“Registrable
Securities” means any Shares and Option Shares issued or issuable to a
Holder, and any shares of Common Stock that may be issued or distributed in
respect thereof by way of stock dividend or stock split or other distribution,
recapitalization or reclassification and any shares of Common Stock described in
Section 2(c) of
this Agreement. Any particular Registrable Securities that are issued will cease
to be Registrable Securities when (i) a registration statement with respect to
the sale by the Holder of such securities becomes effective under the Securities
Act and such securities have been disposed of in accordance with such
registration statement, (ii) such securities have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the Securities Act,
(iii) all of the Registrable Securities then owned by such Holder could be sold
pursuant to Rule 144(b), or (iv) such securities have ceased to be outstanding.
For the avoidance of doubt, the Company is under no obligation to register the
Common Stock underlying any Warrants granted in connection with the Shares or
Option Shares.
“Registration
Expenses” means any and all expenses incident to performance of or
compliance with this Agreement, including, without limitation, (i) all SEC and
stock exchange or National Association of Securities Dealers, Inc. (the “NASD”) registration
and filing fees (including, if applicable, the fees and expenses of any
“qualified independent underwriter,” as such term is defined in NASD conduct
rule 2720, and of its counsel), (ii) all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of counsel for the
underwriters in connection with blue sky qualifications of the Registrable
Securities), (iii) all printing, messenger and delivery expenses, (iv) all fees
and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange, (v) the fees and disbursements of counsel
for the Company and of its independent public accountants, including the
expenses of any special audits and/or “cold comfort” letters required by or
incident to such performance and compliance, and (vi) the reasonable fees and
disbursements of counsel selected pursuant to Section 4(b)
hereof.
“Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute then in
effect, and a reference to a particular section thereof will be deemed to
include a reference to the comparable section, if any, of any such similar
federal statute.
“SEC” means the
Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act or the Exchange Act.
“Selling Expenses”
means underwriting or brokerage discounts, fees and commissions and transfer
taxes, if any, applicable to the sale of Registrable Securities.
“Underwritten
Offering” means an offering pursuant to the Shelf Registration Statement
in which Registrable Securities are sold to an underwriter for reoffering to the
public.
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2. Shelf
Registration.
(a) The
Company shall:
(i) use
its best efforts to file, not later than 10 days after the Effective Date, or as
soon thereafter as practicable, a registration statement on an appropriate form
pursuant to Rule 415 (or any successor rule) under the Securities Act (together
with any amendments thereto, and including any documents incorporated by
reference therein if permitted by such form, the “Shelf Registration
Statement”), which Shelf Registration Statement shall provide for resales
of all Registrable Securities held by Holders that have provided the information
required pursuant to the terms of Section 2(b)
hereof;
(ii) use
its commercially reasonable efforts to cause the Shelf Registration Statement to
be declared effective by the SEC as promptly as is practicable after the date it
is first filed with the SEC, but in no event later than 180 days after the
Effective Date (the “Effectiveness Target
Date”); and
(iii) use
its commercially reasonable efforts to keep the Shelf Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 3
hereof to the extent necessary to ensure that: (A) it is available for resales
by the Holders of Registrable Securities entitled to the benefit of this
Agreement and (B) conforms with the requirements of this Agreement and the
Securities Act, in each case, for a period (the “Effectiveness
Period”)
that will terminate when all Registrable Securities cease to be Registrable
Securities in accordance with this Agreement.
(b) To
have its Registrable Securities included in the Shelf Registration Statement
pursuant to this Agreement, each Holder shall complete the Selling Shareholder
Notice and Questionnaire, the form of which is contained in Exhibit B to this
Agreement (the “Questionnaire”). Holders
that do not complete and deliver the Questionnaire will not be named as selling
shareholders in the Prospectus. In addition, upon receipt of written
request for additional information from the Company, each Holder who intends to
be named as a selling shareholder in the Shelf Registration Statement shall
furnish to the Company in writing, within 3 Business Days after such Holder’s
receipt of such request, such additional information regarding such Holder and
the proposed distribution by such Holder of its Registrable Securities, in
connection with the Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein and in any application to be filed with or under
state securities law, as the Company may reasonably request. Each Holder agrees
to furnish promptly to the Company all information required to be disclosed in
order to make any information previously furnished to the Company by such Holder
not materially misleading.
(c) The
Company shall be entitled to include in the Shelf Registration Statement other
shares of Common Stock (i) to be sold for its own account or (ii) which the
Company is obligated to register for resale by others, and such shares shall be
Registrable Securities for all purposes hereof.
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(d) Notwithstanding
anything contained herein to the contrary, the Company shall be entitled to
exclude from any Shelf Registration Statement such Registrable Securities as the
Company determines is reasonably necessary for the offering to qualify as a
secondary (rather than a primary) offering pursuant to Rule 415 under the
Securities Act in response to comments from the staff of the SEC.
3. Registration
Procedures.
(a) In
connection with the Shelf Registration Statement, the Company shall use its
reasonable best efforts to effect such registration to permit the sale of the
Registrable Securities being sold in accordance with the intended method or
methods of distribution thereof, and pursuant thereto, shall expeditiously
prepare and file with the SEC a Shelf Registration Statement relating to the
registration on any appropriate form under the Securities Act.
(b) In
connection with the Shelf Registration Statement and any Prospectus required by
this Agreement to permit the sale or resale of Registrable Securities, the
Company shall:
(i) Use
its best efforts to keep the Shelf Registration Statement continuously effective
during the Effectiveness Period; upon the occurrence of any event that would
cause the Shelf Registration Statement or the Prospectus contained therein (A)
to contain a material misstatement or omission or (B) not be effective and
usable for the resale of Registrable Securities during the Effectiveness Period,
the Company shall file promptly an appropriate amendment to the Shelf
Registration Statement, a supplement to the Prospectus or a report filed with
the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in
the case of clause (A), correcting any such misstatement or omission, and, in
the case of either clause (A) or (B), use its best efforts to cause any such
amendment to be declared effective and the Shelf Registration Statement and the
related Prospectus to become usable for their intended purposes as soon as
practicable thereafter. Notwithstanding anything to the contrary contained
herein, the Company may delay the filing or declaration of effectiveness, and/or
suspend the effectiveness, of the Shelf Registration Statement by written notice
to the Holders for a period (each such period, a “Suspension
Period”)
not to exceed an aggregate of 45 days in any 90-day period, and not to exceed an
aggregate of 180 days in any 360-day period, if:
(x) an
event occurs and is continuing as a result of which the Shelf Registration
Statement would, in the Company’s reasonable judgment, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
and
(y) the
Company reasonably determines that the disclosure of such event at such time
would be seriously detrimental to the Company or its business;
provided, that in the
event that the disclosure relates to a previously undisclosed proposed or
pending material business transaction, the disclosure of which would impede the
Company’s ability to consummate such transaction, the Company may extend a
Suspension Period from 45 days to 60 days during any 90-day
period.
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(ii) Notify
each selling Holder of the effectiveness of the Shelf Registration Statement and
prepare and file with the SEC such amendments and post-effective amendments to
the Shelf Registration Statement as may be necessary to keep the Shelf
Registration Statement continuously effective during the Effectiveness Period;
cause the Prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 under the Securities
Act, and to comply fully with the applicable provisions of Rules 424 and 430A
under the Securities Act in a timely manner; and comply with the provisions of
the Securities Act with respect to the disposition of all securities covered by
the Shelf Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof set forth
in the Shelf Registration Statement or supplement to the
Prospectus.
(iii) Advise
the selling Holders (and the underwriter(s), if any):
(A) of
the issuance by the SEC of any stop order suspending the effectiveness of the
Shelf Registration Statement under the Securities Act or of the suspension by
any state securities commission of the qualification of the Registrable
Securities for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, or
(B) of
the existence of any fact or the happening of any event, during the
Effectiveness Period, that makes any statement of a material fact made in the
Shelf Registration Statement, the Prospectus, any amendment or supplement
thereto, or any document incorporated by reference therein, untrue, or that
requires the making of any additions to or changes in the Shelf Registration
Statement or the Prospectus in order to make the statements therein not
misleading. Each Holder of Registrable Securities, by accepting the same, agrees
to hold any communication from the Company pursuant to this Section 3(b)(iii) in
confidence.
If at any
time the SEC shall issue any stop order suspending the effectiveness of the
Shelf Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Registrable Securities under state
securities or “blue sky” laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time and will
provide to the each Holder who is named in the Shelf Registration Statement
prompt notice of the withdrawal of any such order.
(iv) Furnish
to each selling Holder (and to each underwriter(s), if any), and their
respective counsel, if any, before filing with the SEC, a copy of the Shelf
Registration Statement (including any amendments thereto) and copies of any
Prospectus (including any supplements thereto) included therein or any
amendments or supplements to the Shelf Registration Statement or Prospectus
(other than documents incorporated by reference after the initial filing of the
Shelf Registration Statement), which documents shall reflect such comments as
the Holders (and their counsel) may reasonably and timely propose.
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(v) Make
reasonably available for inspection by one or more representatives of the
selling Holders designated in writing by a Majority of Holders whose Registrable
Securities are included in the Shelf Registration Statement, any underwriter
participating in any distribution pursuant to the Shelf Registration Statement,
and any attorney or accountant retained by such selling Holders or any of the
underwriter(s), all relevant financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s officers,
directors and employees to supply all information reasonably requested by any
such representative or representatives of the selling Holders, underwriter,
attorney or accountant in connection with the Shelf Registration Statement as
shall be reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, provided, however, that any
information designated by the Company as confidential at the time of delivery of
such information shall be kept confidential by the recipient thereof; and provided, further, that in no
event shall the Company be required to furnish any material nonpublic
information pursuant to this subsection (v).
(vi) If
requested by any selling Holders or the underwriter(s), if any, promptly
incorporate in the Shelf Registration Statement or Prospectus, pursuant to a
supplement or post-effective amendment if necessary, such information as such
selling Holders and underwriter(s), if any, may reasonably request to have
included therein and to which the Company does not reasonably object, including,
without limitation: (A) information relating to the “Plan of Distribution” of
the Registrable Securities, (B) information with respect to the number of
Registrable Securities being sold, (C) the purchase price being paid therefor
and (D) any other terms of the offering of the Registrable Securities to be sold
in such offering; provided, however, that with
respect to any information requested for inclusion by a selling Holder, this
clause (vi) shall apply only to such information that relates to the Registrable
Securities to be sold by such selling Holder; and make all required filings of
such prospectus supplement or post-effective amendment as soon as reasonably
practicable after the Company is notified of the matters to be incorporated in
such prospectus supplement or post-effective amendment.
(vii)
If an underwriting agreement is entered into in connection with the
registration, the Company shall:
(A) upon
reasonable request, furnish to each selling Holder and each underwriter, in such
substance and scope as are customarily made by issuers to underwriters in
primary underwritten offerings for selling security holders, upon the date of
closing of any sale of Registrable Securities in an Underwritten
Offering:
(1) opinions,
each dated the date of such closing, of counsel to the Company covering such of
the matters as are customarily covered in legal opinions to underwriters in
connection with underwritten offerings of securities; and
(2) customary
comfort letters, dated the date of such closing, from the Company’s independent
accountants, in the customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with primary
underwritten offerings of securities;
(B) set
forth in full in the underwriting agreement, if any, indemnification provisions
and procedures which provide rights no less protective than those set forth in
Section 5
hereof with respect to all parties to be indemnified; and
(C) deliver
such other documents and certificates as may be reasonably requested by such
parties to evidence compliance with clause (A) above and with any customary
conditions contained in the underwriting agreement or other agreement entered
into by the selling Holders pursuant to this clause (vii).
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(viii) Before
any public offering of Registrable Securities, use its best efforts to register
or qualify the Registrable Securities under the securities or Blue Sky laws of
such jurisdictions in the United States as the selling Holders or
underwriter(s), if any, may reasonably request and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the Shelf Registration Statement; provided, however, that the
Company shall not be required (A) to register or qualify as a foreign
corporation or a dealer of securities where it is not now so qualified or to
take any action that would subject it to the service of process in any
jurisdiction where it is not now so subject or (B) to subject itself to taxation
in any such jurisdiction if it is not now so subject.
(ix) Cooperate
with the selling Holders and the underwriter(s), if any, to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends (unless required
by applicable securities laws) and enable such Registrable Securities to be in
such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least three Business Days before any sale
of Registrable Securities.
(x) Subject
to Section
3(b)(i) hereof, if any fact or event contemplated by Section 3(b)(iii)(B)
hereof shall exist or have occurred, use its reasonable best efforts to prepare
a supplement or post-effective amendment to the Shelf Registration Statement or
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
Registrable Securities, the Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
(xi) Provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of the Shelf Registration Statement.
(xii) Cooperate
and assist in any filings required to be made with the NASD and in the
performance of any due diligence investigation that is required to be retained
in accordance with the rules and regulations of the NASD.
(xiii) Otherwise
use its commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC and all reporting requirements of the Exchange
Act.
(xiv) Enter
into such customary agreements (including underwriting agreements in customary
form) and take all such other lawful actions as a Majority of Holders or the
underwriters, if any, reasonably request in order to expedite or facilitate the
disposition of Registrable Securities (including effecting a stock split or
combination of shares).
(xv)
Cause all Registrable Securities covered by the Shelf Registration Statement to
be listed or quoted, as the case may be, on each securities exchange or
automated quotation system on which similar securities issued by the Company are
then listed or quoted.
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(c) Each
Holder agrees that, upon receipt of any notice (a “Suspension
Notice”)
from the Company of the existence of any fact of the kind described in Section 4(b)(x) or
Section
4(b)(iii)(B) hereof, such Holder will, and will use its reasonable
efforts to cause any underwriter(s) in an Underwritten Offering to, forthwith
discontinue disposition of Registrable Securities pursuant to the Shelf
Registration Statement until:
(i) such
Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 4(b)(xiii)
hereof; or
(ii) such
Holder is advised in writing by the Company that the use of the Prospectus may
be resumed, and has received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus.
If so
directed by the Company, each Holder will deliver to the Company all copies,
other than permanent file copies then in such Holder’s possession, of the
Prospectus covering such Registrable Securities that was current at the time of
receipt of such notice of suspension.
(d) If
a Holder is identified in the Shelf Registration Statement as an “underwriter”
(any such Holder, an “Identified Holder”),
then at the request of such Identified Holder the Company shall furnish to such
Identified Holder, on the date of the effectiveness of the Shelf Registration
Statement and thereafter from time to time on such dates as such Identified
Holder may reasonably request, (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to such Identified Holder, and (ii) an
opinion, dated as of such date, of counsel representing the Company for purposes
of the Shelf Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to such
Identified Holder.
4. Registration
Expenses.
(a) The
Company shall pay all Registration Expenses incident to the Company’s
performance of or compliance with this Agreement. The Company shall bear its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal, accounting or other duties), the
expenses of any annual audit or quarterly review, the expense of any liability
insurance and the fees and expenses of any Person, including special experts,
retained by the Company.
(b) In
connection with the Shelf Registration Statement required by this Agreement,
including any amendment or supplement thereto, and any other documents delivered
to any Holders, the Company shall reimburse the Holders of Registrable
Securities being registered pursuant to the Shelf Registration Statement, as
applicable, for the reasonable fees and disbursements of not more than one
counsel (including local counsel), which shall be chosen by a Majority of
Holders for whose benefit the Shelf Registration Statement is being prepared.
The Company shall not be required to pay any underwriting discount, commission
or similar fee related to the sale of any securities.
(c) Each
Holder shall bear its Selling Expenses.
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5. Indemnification and
Contribution.
(a) The
Company shall indemnify and hold harmless, to the fullest extent permitted by
law, each Holder, such Holder’s officers, directors, members, agents, partners
and employees and each person, if any, who controls such Holder within the
meaning of the Securities Act (each, an “Indemnified Holder”),
from and against any loss, claim, damage, liability or expense, joint or
several, or any action in respect thereof (including, but not limited to, any
loss, claim, damage, liability, expense, or action relating to resales of the
Registrable Securities), together with reasonable costs and expenses (including
reasonable attorney’s fees) to which such Indemnified Holder may become subject,
insofar as any such loss, claim, damage, liability, expense or action arises out
of, or is based upon:
(i) any
untrue statement or alleged untrue statement of a material fact contained in (A)
the Shelf Registration Statement or Prospectus or any amendment or supplement
thereto or (B) any blue sky application or other document or any amendment or
supplement thereto prepared or executed by the Company (or based upon written
information furnished by or on behalf of the Company expressly for use in such
blue sky application or other document or amendment on supplement) filed in any
jurisdiction specifically for the purpose of qualifying any or all of the
Registrable Securities under the securities law of any state or other
jurisdiction (such application or document being hereinafter called a “Blue Sky
Application”); or
(ii) the
omission or alleged omission to state therein any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and shall promptly
reimburse each Indemnified Holder promptly upon demand for any legal or other
expenses reasonably incurred by such Indemnified Holder in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability, expense or action as such expenses are incurred; provided, however, that the
Company shall not be liable in any such case to the extent that any such loss,
claim, damage, liability, expense or action arises out of, or is based upon, (A)
any untrue statement or alleged untrue statement or omission or alleged omission
made in the Shelf Registration Statement or Prospectus or amendment or
supplement thereto or Blue Sky Application or other document referred to in
Section 5(a)(i)
hereof in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Holder (or its related Indemnified Holder)
specifically for use therein or (B) the failure by the Holder or Indemnified
Holder to deliver to any purchaser of its Registrable Securities the Prospectus
and any supplement or amendment thereto after the Company has furnished such
Holder or Indemnified Holder with a sufficient number of copies of the same. The
foregoing indemnity agreement is in addition to any liability that the Company
may otherwise have to any Indemnified Holder.
(b) Each
Holder, severally and not jointly, shall indemnify and hold harmless, to the
fullest extent permitted by law, the Company, each other Holder, their
respective officers, directors, agents and employees and each person, if any,
who controls the Company or such other Holder within the meaning of the
Securities Act, from and against any loss, claim, damage, liability or expense,
joint or several, or any action in respect thereof, to which the Company, such
other Holder or any such officer, director, agent, employee or controlling
person may become subject, insofar as any such loss, claim, damage, liability,
expense or action arises out of, or is based upon:
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(i) any
untrue statement or alleged untrue statement of any material fact contained in
the Shelf Registration Statement or Prospectus or any amendment or supplement
thereto or any Blue Sky Application or other document referred to in Section 5(a)(i)
hereof; or
(ii) the
omission or the alleged omission to state therein any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that such untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information prepared and furnished to the Company by or on behalf of such Holder
(or its related Indemnified Holder) specifically for use therein, and shall
reimburse the Company and any such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by the
Company or any such officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability, expense or action as such expenses are incurred, provided
that the obligation to indemnify will be individual, not joint and several, for
each Holder and shall be limited to the net amount of proceeds received by such
Holder from the sale of Registrable Securities pursuant to the Shelf
Registration Statement.
(c) Promptly
after receipt by an indemnified party under this Section 5 of notice
of any claim or the commencement of any action, the indemnified party shall, if
a claim in respect thereof is to be made against the indemnifying party under
this Section 5,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the
failure to notify the indemnifying party shall not relieve the indemnifying
party from any liability which it may have under this Section 5 except to
the extent the indemnifying party has been prejudiced by such failure. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 5 for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that a
Majority of Holders shall have the right to employ at the expense of such
Holders a single counsel to represent jointly the Holders and their respective
directors, officers, members, agents, partners, employees and controlling
persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by Holders against the Company under this Section 5; and
provided, further, that if a Majority of Holders shall have reasonably concluded
that there may be one or more legal defenses available to them and their
respective officers, employees and controlling persons that are different from
or additional to those available to the Company and its officers, directors,
employees and controlling persons, then the fees and expenses of such single
separate counsel shall be paid for by the indemnifying party. No indemnifying
party shall:
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(i) without
the prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld or delayed) settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or
(ii) be
liable for any settlement of any such action effected without its written
consent (which consent shall not be unreasonably withheld or delayed), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d)
If the indemnification provided for in this Section 5 shall for
any reason be unavailable or insufficient to hold harmless an indemnified party
under Section
5(a) or 5(b) in respect of
any loss, claim, damage, liability or expense (or action in respect thereof)
referred to therein, each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability (or action in respect
thereof):
(i) in
such proportion as is appropriate to reflect the relative fault of the Company
on the one hand and the Holders on the other, or
(ii) if
the allocation provided by clause 5(d)(i) is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative fault referred to in clause 5(d)(i) but
also the relative benefits received by the Company from the offering and sale of
the Registrable Securities on the one hand and a Holder with respect to the sale
by such Holder of the Registrable Securities on the other in connection with the
statements or omissions or alleged statements or alleged omissions that resulted
in such loss, claim, damage or liability (or action in respect thereof), as well
as any other relevant equitable considerations.
The
relative benefits received by the Company on the one hand and a Holder on the
other with respect to such offering and such sale shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Registrable
Securities (before deducting expenses) received by the Company, on the one hand,
bear to the total proceeds received by such Holder (before deducting expenses)
with respect to its sale of Registrable Securities on the other. The relative
fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Holders on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission.
11
The
Company and each Holder agree that it would not be just and equitable if the
amount of contribution pursuant to this Section 5(d) were
determined by pro rata
allocation (even if the selling Holders were treated as one entity for
such purpose) or by any other method of allocation that does not take into
account the equitable considerations referred to in the first sentence of this
paragraph (d). The amount paid or payable by an indemnified party as a result of
the loss, claim, damage, liability or expense, or action in respect thereof,
referred to above in this Section 5 shall be
deemed to include, for purposes of this Section 5 and subject
to the limitations set forth above, any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
or preparing to defend any such action or claim.
Notwithstanding
the provisions of this Section 5, no Holder
shall be required to contribute any amount in excess of the amount by which net
proceeds received by such Holder from the sale of Registrable Securities covered
by the Shelf Registration Statement exceeds the amount of any damages which such
Holder has otherwise been required to pay by reason of any untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders’ obligations to contribute as provided
in this Section 5(d)
are several and not joint.
6. Participation in
Underwritten Offerings.
No Holder may participate in any
Underwritten Offering hereunder unless such Holder:
(a) agrees
to sell such Holder’s Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements; and
(b) completes
and executes all reasonable and customary questionnaires, powers of attorney,
custody agreements, indemnities, underwriting agreements, lock-up letters and
other documents required under the terms of such underwriting arrangements,
provided that no Holder shall be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding such Holder and such Holder’s intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters with respect thereto, except as otherwise provided in Section 5
hereof.
7. Selection of
Underwriters.
The
Holders of Registrable Securities covered by the Shelf Registration Statement
who desire to do so may sell such Registrable Securities in an Underwritten
Offering. In any such Underwritten Offering, the investment banking firm or
firms and manager or managers that will administer the offering will be selected
by a Majority of Holders whose Registrable Securities are included in such
offering; provided, that such
investment banking firms must be reasonably satisfactory to the
Company.
8. Miscellaneous.
(a) Amendments and
Waivers. This Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of a Majority of
Holders.
12
(b) Notices. All notices
and other communications provided for or permitted hereunder shall be made in
writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telex, telecopier, or air courier guaranteeing overnight
delivery:
(i) if
to a Holder, at the address set forth on the records Company of or the transfer
agent of the Registrable Securities, as the case may be; and
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(ii)
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if
to the Company:
New
Generation Biofuels Holdings,
Inc.
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0000
Xxxxxxxx Xxxx, Xxxxx 000
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Xxxxxxxx,
Xxxxxxxx 00000
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Phone:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxx X. Xxxxxxxxx
All such
notices and communications shall be deemed to have been duly given at: the time
delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged, if transmitted by facsimile; and on the next
Business Day, if timely delivered to an air courier guaranteeing overnight
delivery.
(d) Successors and
Assigns. This Agreement shall inure to the benefit of and be binding upon
the successors and assigns of each of the parties, including without limitation
subsequent Holders of Registrable Securities; provided, however, that (i)
this Agreement shall not inure to the benefit of or be binding upon a successor
or assign of a Holder unless and to the extent such successor or assign acquired
Registrable Securities from such Holder and agreed in writing to be bound by the
terms of this Agreement and (ii) nothing contained herein shall be deemed to
permit any assignment, transfer or other disposition of Registrable Securities
in violation of any Subscription Agreement or other agreement with the Company
which restricts the sale or disposition of Registrable Securities. If any
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement.
(e) Counterparts. This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.
(f)
Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(g) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York without regard to its principles of conflict of laws that
would cause the laws of another jurisdiction to apply.
13
(h) Severability. If any
one or more of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be affected or impaired
thereby.
(i) Entire Agreement.
This Agreement is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein, with respect to
the registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
[THE
REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written
above.
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By:
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Name:
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Title:
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[Holder
Signature Page Follows]
15
The
foregoing Agreement is hereby confirmed and accepted as of the date first
written above.
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Name
of Holder
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By:
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Name:
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Title:
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EXHIBIT
A
HOLDERS
[Names of
each Holder shall be inserted upon the Closing]
EXHIBIT
B
NOTICE AND
QUESTIONNAIRE
(TIME
SENSITIVE MATERIAL)
THIS
NOTICE AND QUESTIONNAIRE MUST BE RETURNED TO NEW GENERATION BIOFUELS HOLDINGS,
INC. (AT THE ADDRESS LISTED BELOW) ON OR BEFORE THE 15TH BUSINESS DAY FOLLOWING
DELIVERY OF THE NOTICE AND QUESTIONNAIRE BY NEW GENERATION BIOFUELS HOLDINGS,
INC. TO THE REGISTERED HOLDER.
Capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Registration Rights Agreement, dated as of February ___, 2010 (the “Registration Rights
Agreement”), between the Company and Holders named therein.
Form of Selling
Securityholder Notice and Questionnaire
The
undersigned Holder of the Registrable Securities of the Company understands that
the Company has filed, or intends to file, with the SEC a Shelf Registration
Statement for the registration and resale under Rule 415 of the Securities Act,
Registrable Securities in accordance with the terms of the Registration Rights
Agreement. A copy of the Registration Rights Agreement is available from the
Company upon request at the address set forth below.
Each
beneficial owner of Registrable Securities that has agreed in writing to be
bound by the Registration Rights Agreement is entitled to the benefits of the
Registration Rights Agreement. In order to sell or otherwise dispose of any
Registrable Securities pursuant to the Shelf Registration Statement, a
beneficial owner of Registrable Securities generally will be required to be
named as a selling securityholder in the related Prospectus, deliver a
Prospectus either to purchasers of Registrable Securities or, if relying on Rule
172 of the Securities Act, confirm that a current prospectus is deemed delivered
in connection with the sale of Registrable Securities, and be bound by those
provisions of the Registration Rights Agreement applicable to such beneficial
owner (including certain indemnification provisions, as described below).
Beneficial owners are encouraged to complete and deliver this Notice and
Questionnaire prior to the effectiveness of the Shelf Registration Statement so
that such beneficial owners may be named as selling securityholders in the
related prospectus.
Certain
legal consequences arise from being named as a selling securityholder in the
Shelf Registration Statement and the related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and the
related Prospectus.
B-1
NOTICE
The
undersigned Holder (the “Selling
Securityholder”) of Registrable
Securities hereby gives notice to the Company of its intention to sell or
otherwise dispose of Registrable Securities beneficially owned by it and listed
below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf
Registration Statement. The undersigned, by signing and returning this Notice
and Questionnaire, understands that it will be bound by the terms and conditions
of this Notice and Questionnaire and the Registration Rights
Agreement.
Pursuant
to Section 5(b) of the Registration Rights Agreement, the undersigned has agreed
to indemnify and hold harmless the Company and certain other persons, from and
against certain losses arising in connection with statements concerning the
undersigned made in the Shelf Registration Statement or the related Prospectus
in reliance upon the information provided in this Notice and
Questionnaire.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate and
complete:
QUESTIONNAIRE
1. Information
Regarding Selling Securityholder
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(a)
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Full
legal name of Selling Securityholder:
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(b)
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Full
legal name of registered holder (if not the same as (a) above) through
which Registrable Securities listed in Item (3) below are
held:
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(c)
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Full
legal name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose
of the securities covered by the questionnaire):
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(d)
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Is
the Selling Securityholder an SEC-reporting company? If the Selling
Securityholder is not an SEC-reporting company, list below the individual
or individuals who exercise the voting and/or dispositive powers with
respect to the Securities:
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(e)
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Are
you a broker-dealer registered pursuant to Section 15 of the Exchange
Act?
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¨
Yes.
B-2
¨
No.
Note: If yes, the SEC’s staff
has indicated that you should be identified as an underwriter in the Shelf
Registration Statement.
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(f)
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If
your response to Item 1(e) above is “no,” are you an “affiliate” of a
broker-dealer registered pursuant to Section 15 of the Exchange
Act?
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¨
Yes.
¨
No.
For
purposes of this Item 1(f), an “affiliate” of a registered broker-dealer shall
include any company that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such broker-dealer, and does not include any individuals employed by such
broker-dealer or its affiliates.
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(g)
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If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities to be resold, and at the time of the purchase
of the Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to distribute the
Registrable Securities?
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¨
Yes.
¨
No.
Note: If no, the SEC’s staff
has indicated that you should be identified as an underwriter in the Shelf
Registration Statement.
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(h)
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Full
legal name of person through which you hold the Registrable Securities –
(i.e. name of your broker or the DTC participant, if applicable, through
which your Registrable Securities are
held):
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Name of
broker:________________________________________________________________________
DTC
No:______________________________________________________________________________
Contact
person:_________________________________________________________________________
Telephone
No. (including area
code):________________________________________________________
E-mail
address:_________________________________________________________________________
B-3
2.
Address
for Notices to Selling Securityholder
Telephone:____________________________________________________________________________
Fax:_________________________________________________________________________________
Contact
Person:________________________________________________________________________
Email
address:________________________________________________
3. Beneficial
Ownership of Registrable Securities
Number of
shares of Registrable Securities of the Company beneficially owned:
____________________________________________________________________________________
CUSIP
No(s). of such Registrable Securities beneficially owned:
____________________________________________________________________________________
4. Nature
of Beneficial Ownership
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(a)
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Check
if the Selling Securityholder set forth in your response to Item 1(a) is
any of the below:
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(A)
A reporting company under the
Exchange Act.¨
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(B)
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A
majority owned subsidiary of a reporting company under the Exchange
Act.¨
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(C)
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A
registered investment fund under the Investment Company Act of 1940.o
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(b)
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If
the Selling Securityholder set forth in your response to Item 1(a) above
is a limited partnership, state the names of the general partners of such
limited partnership:
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B-4
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(A)
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With
respect to each general partner listed in Item 4(b) above who is not a
natural person, and is not publicly-held, name each shareholder (or holder
of partnership interests, if applicable) of such general partner. If any
of these named shareholders are not natural persons or publicly-held
entities, please provide the same information. This process should be
repeated until you reach natural persons or a publicly-held
entity.
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(c)
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Name
your controlling shareholder(s) (the “Controlling Entity”). If the
Controlling Entity is not a natural person and is not a publicly-held
entity, name each shareholder of such Controlling Entity. If any of these
named shareholders are not natural persons or publicly-held entities,
please provide the same information. This process should be repeated until
you reach natural persons or a publicly-held
entity.
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(A)
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(i)
Full
legal name of Controlling Entity(ies) or natural person(s) who have sole
or shared voting or dispositive power over the Registrable
Securities:
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(ii) Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
Address:
Telephone
No.:
Fax
No.:
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(B)
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(i)
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Full
legal name of Controlling Entity(ies):
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(ii) Business
address (including street address) (or residence if no business address),
telephone number and facsimile number of such person(s):
Address:
Telephone
No.:
Fax
No.:
(iii) Name
of shareholders:
B-5
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5.
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Beneficial
Ownership of the Company’s Securities Owned by the Selling
Securityholder
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Except as
set forth below in this Item (5), the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item (3) (“Other
Securities”).
Type and
amount of Other Securities beneficially owned by the Selling
Securityholder:
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CUSIP
No(s). of such Other Securities beneficially owned:
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6.
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Relationship
with the Company
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Except as
set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (5% or more) has held any position or
office or has had any other material relationship with the Company (or its
predecessors or affiliates) during the past three years.
State any
exceptions here:
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7.
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Plan
of Distribution
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Except as
set forth below, the undersigned (including its donees or pledgees) intends to
distribute the Registrable Securities listed above in Item (3) pursuant to the
Shelf Registration Statement only as follows (if at all). Such Registrable
Securities may be sold from time to time directly by the undersigned or,
alternatively, through underwriters, broker-dealers or agents. If the
Registrable Securities are sold through underwriters or broker-dealers, the
Selling Securityholder will be responsible for underwriting discounts or
commissions or agent’s commissions. Such Registrable Securities may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of sale, at varying prices determined at the time of sale, or at negotiated
prices. Such sales may be effected in transactions (which may involve crosses or
block transactions):
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(a)
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on
any national securities exchange or quotation service on which the
Registrable Securities may be listed or quoted at the time of
sale;
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(b)
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in
the over-the-counter market;
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(c)
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in
transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
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B-6
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(d)
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through
the writing of options.
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In
connection with sales of the Registrable Securities or otherwise, the
undersigned may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Registrable Securities and deliver
Registrable Securities to close out such short positions, or loan or pledge
Registrable Securities to broker-dealers that in turn may sell such
securities.
State any
exceptions here:
Note: In no event will such
method(s) of distribution take the form of an underwritten offering of the
Registrable Securities without the prior agreement of the Company.
8. Acknowledgments
The
undersigned acknowledges that it understands its obligation to comply with the
provisions of the Exchange Act and the rules thereunder relating to stock
manipulation, particularly Regulation M thereunder (or any successor rules or
regulations), in connection with any offering of Registrable Securities pursuant
to the Shelf Registration Statement. The undersigned agrees that neither it nor
any person acting on its behalf will engage in any transaction in violation of
such provisions.
The
Selling Securityholder hereby acknowledges its obligations under the
Registration Rights Agreement to indemnify and hold harmless certain persons as
set forth therein. Pursuant to the Registration Rights Agreement, the Company
has agreed under certain circumstances to indemnify the Selling Securityholders
against certain liabilities.
In
accordance with the undersigned’s obligation under the Registration Rights
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing at the address set forth
below.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to items (1) through (7) above and the inclusion
of such information in the Shelf Registration Statement and the related
Prospectus. The undersigned understands that such information will be relied
upon by the Company in connection with the preparation or amendment of the Shelf
Registration Statement and the related Prospectus.
B-7
Once this
Notice and Questionnaire is executed by the undersigned and received by the
Company, the terms of this Notice and Questionnaire, and the representations and
warranties contained herein, shall be binding on, shall inure to the benefit of
and shall be enforceable by the respective successors, heirs, personal
representatives and assigns of the Company and the undersigned with respect to
the Registrable Securities beneficially owned by the undersigned and listed in
Item (3) above.
This
Notice and Questionnaire shall be governed in all respects by the laws of the
State of New York.
B-8
IN WITNESS WHEREOF, the
undersigned, by authority duly given, has caused this Notice and Questionnaire
to be executed and delivered either in person or by its duly authorized
agent.
| Beneficial Owner | ||
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By:
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Name:
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Title:
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Dated:
PLEASE RETURN THE COMPLETED AND
EXECUTED NOTICE AND QUESTIONNAIRE TO NEW GENERATION BIOFUELS HOLDINGS, INC. NOT
LATER THAN THE 3RD BUSINESS DAY AFTER THIS NOTICE AND QUESTIONNAIRE HAVE BEEN
DELIVERED TO THE REGISTERED HOLDER AT:
0000
Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx,
Xxxxxxxx 00000
Phone:
(000) 000-0000
Fax:
(000) 000-0000
Attn:
Xxxx X. Xxxxxxxxx
B-9
