Contract
EXHIBIT
4.2
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
IN
ADDITION, THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT
BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF
ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT
IN THE EFFECTIVE ECONOMIC DISPOSITION OF SUCH SECURITIES BY ANY PERSON, UNTIL
JUNE __, 2010, EXCEPT IN ACCORDANCE WITH FINRA RULE 5110(G)(2).
WARRANT
TO
PURCHASE COMMON STOCK
Issue
Date: December
, 2009 (the “Issue
Date”)
THIS WARRANT IS TO CERTIFY
THAT, JESUP & XXXXXX SECURITIES CORP. or its permitted assigns (the
“Holder”), is
entitled, subject to the terms set forth below, to purchase from New Generation
Biofuels Holdings, Inc., a Florida corporation (the “Company”), ________
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at
$0.90 per share, as adjusted from time to time pursuant to Section 2 hereof (the
“Exercise
Price”). Subject to the terms and conditions hereof, this
Warrant may be exercised by the Holder at any time after the six month
anniversary of the Issue Date but prior to the fifth anniversary of the Issue
Date (as further defined herein, the “Expiration Date”), in
whole or in part.
Section
1. Exercise of Warrant.
(a) Mechanics of
Exercise. (i) This Warrant may be exercised by the
Holder, in whole or in part, by delivering to the Company at its office
identified in Section
15 hereof (i) a written notice of exercise, in the form attached hereto
as Exhibit A
(the “Notice of
Exercise”), including the number of Warrant Shares to be delivered
pursuant to such exercise, (ii) this Warrant and (iii) (A) payment to the
Company of an amount equal to the Exercise Price multiplied by the number of
Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise
Price”) in cash or wire transfer of immediately available funds or (B) by
notifying the Company that this Warrant is being exercised pursuant to a
Cashless Exercise (as defined in Section 1(c)).
(ii) The Holder shall not
be required to surrender this Warrant in order to effect an exercise hereunder,
provided that this Warrant is surrendered to the Company by the second Business
Day following the date on which the Company has received each of the Notice of
Exercise and the Aggregate Exercise Price (the “Exercise Delivery
Documents”). On or before the first Business Day following the
date on which the Company has received the Exercise Delivery Documents, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (the “Transfer
Agent”). The Company shall deliver any objection to the
Exercise Delivery Documents on or before the second Business Day following the
date on which the Company has received all of the Exercise Delivery
Documents. In the event of any discrepancy or dispute, the records of
the Company shall be controlling and determinative in the absence of manifest
error. On or before the third Business Day following the date on
which the Company has received all of the Exercise Delivery Documents and after
the Company has received this Warrant (the “Share Delivery
Date”), the Company shall, (A) provided that the Transfer Agent is
participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program (the “FAST Program”) and so
long as the certificates therefor are not required to bear a legend regarding
restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (B) if the
Transfer Agent is not participating in the FAST Program or if the certificates
are required to bear a legend regarding restriction on transferability, issue
and dispatch by overnight courier to the address as specified in the Notice of
Exercise, a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise. Upon delivery of
the Exercise Delivery Documents and surrender of this Warrant, the Holder shall
be deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such
Warrant Shares are credited to the Holder’s DTC account or the date of delivery
of the certificates evidencing such Warrant Shares, as the case may
be.
(iii) If this Warrant is
submitted in connection with any exercise pursuant to this Section 1(a) and the
number of Warrant Shares represented by this Warrant submitted for exercise is
greater than the number of Warrant Shares being acquired upon an exercise, then
the Company shall as soon as practicable and in no event later than five (5)
Business Days after any exercise and at its own expense, issue a new Warrant
representing the right to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant, less the number of
Warrant Shares with respect to which this Warrant is exercised. The
Company shall pay any and all taxes that may be payable with respect to the
issuance and delivery of Warrant Shares upon exercise of this
Warrant.
(b) Limitations on
Exercises. (i) The Company shall not effect the
exercise of this Warrant, and the Holder shall not have the right to exercise
this Warrant, to the extent that after giving effect to such exercise, such
Person (together with such Person’s affiliates) would beneficially own in excess
of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after
giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of shares of Common Stock beneficially owned by
such Person and its affiliates shall include the number of shares of Common
Stock issuable upon exercise of this Warrant with respect to which the
determination of such sentence is being made, but shall exclude shares of Common
Stock which would be issuable upon (A) exercise of the remaining, unexercised
portion of this Warrant beneficially owned by such Person and its affiliates and
(B) exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company beneficially owned by such Person and its
affiliates (including, without limitation, any convertible notes or convertible
preferred stock or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein. Except as set forth in
the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange
Act. For purposes of this Warrant, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (1) the Company’s most recent
Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the
Securities and Exchange Commission (the “SEC”), as the case
may be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or the transfer agent setting forth the number of shares
of Common Stock outstanding. For any reason at any time, upon the
written or oral request of the Holder, where such request indicates that it is
being made pursuant to this Warrant, the Company shall within two Business Days
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
exercise of securities of the Company by the Holder and its affiliates since the
date as of which such number of outstanding shares of Common Stock was
reported. By written notice to the Company, the Holder may increase
or decrease the Maximum Percentage to any other percentage not in excess of
4.99% specified in such notice; provided, that any
such increase will not be effective until the 61st day
after such notice is delivered to the Company.
(ii) This Warrant may not
be exercised to acquire Warrant Shares to the extent that when added to those
already beneficially owned by the Holder, for purposes of any shareholder rights
plan or agreement that may be adopted by the Company in the future, such Warrant
Shares would cause such Holder to acquire beneficial ownership of the percentage
of shares of the outstanding Common Stock of the Company which would make the
Holder (or any group including the Holder) an “Acquiring Person”
thereunder.
(c) Cashless
Exercise. The Holder may, in its sole discretion and at any
time during the term hereof, exercise this Warrant in
whole or in part and, in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such exercise in payment of the Aggregate
Exercise Price, elect instead to receive upon such exercise the “net number” of
shares of Common Stock determined according to the following formula (a “Cashless
Exercise”):
(X) = Y (A-B)
A
|
Where
|
(X)
=
|
the
net number of Warrant Shares to be issued to the
Holder;
|
|
(Y)
=
|
the
number of Warrant Shares issuable upon exercise of thisWarrant in
accordance with the terms of this Warrant by means of a cashexercise
rather than a cashless exercise;
|
|
|
(A)
=
|
the
Market Price (as defined below); and
|
|
|
(B)
=
|
the
Exercise Price of this Warrant, as adjusted from time to
time.
|
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Solely
for the purposes of this paragraph, Market Price shall be calculated as of the
Trading Day (defined for this purpose as any day on which the NASDAQ Capital
Market, or any other national securities exchange, automated system or Over the
Counter Bulletin on which the Company’s Common Stock is then listed or admitted
to trade, is open for trading) immediately preceding the date which the Notice
of Exercise is deemed to have been sent to the Company pursuant to Section 15 hereof
(such preceding date, the “Valuation Date”). As
used herein, the phrase “Market Price” shall
mean (i) if the Warrant Shares is listed or admitted for trading on a national
securities exchange, an automated quotation system or the Over the Counter
Bulletin Board, the last reported sale price per share of the Warrant Shares on
the Valuation Date, or, in case no such reported sale takes place on such day or
is reported, then the average of the last reported per share bid and ask prices
for the Warrant Shares on such date (or if such bid and ask prices are not
available on such date, the most recent preceding date), in either case as
officially reported by such securities exchange, quotation system or Bulletin
Board on which the Common Stock is listed or admitted to trading, (ii) if not so
listed or admitted for trading, the fair market value of a share of the Warrant
Shares as determined by the Company’s board of directors in good faith, or (iii)
if such exercise is in connection with a merger or consolidation of the Company
in which the Company is not the survivor or in which the Warrant Shares are
exchanged for cash or other securities or a sale of all or substantially all of
the assets of the Company (collectively, a “Sale”), the implied
price per share of the Warrant Shares resulting from such Sale.
For
purposes of Rule 144(d) promulgated under the Securities Act, as in effect
on the date hereof, assuming the Holder is not an affiliate of the Company, it
is intended that the Warrant Shares issued in a Cashless Exercise shall be
deemed to have been acquired by the Holder, and the holding period for the
Warrant Shares shall be deemed to have commenced, on the closing date of the
offering pursuant to which the Company was obligated to issue this
Warrant.
(d) The
stock certificate or certificates for the Warrant Shares to be delivered in
accordance with this Section 1 shall be in
such denominations as may be specified in said notice of exercise and shall be
registered in the name of the Holder or such other name or names as shall be
designated in said notice. Such certificate or certificates shall be deemed to
have been issued and the Holder or any other person so designated to be named
therein shall be deemed to have become the holder of record of such shares,
including to the extent permitted by law the right to vote such shares or to
consent or to receive notice as shareholders, as of the time said notice is
delivered to the Company as aforesaid.
(e) The
Company shall pay all expenses payable in connection with the preparation, issue
and delivery of stock certificates under this Section 1; provided, however, that the
Holder shall be responsible for all transfer taxes resulting from the fact that
any certificate issued in respect of the Warrant Shares is not in the name of
the Holder.
(f) All
Warrant Shares issuable upon the exercise of this Warrant in accordance with the
terms hereof shall be validly issued, fully paid and nonassessable, and free
from all liens and other encumbrances thereon, other than liens or other
encumbrances created by the Holder or restrictions upon transfer under federal
or state securities laws.
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(g) In
no event shall the warrant be exercised for less than one whole share of
the Company except in the case of the final exercise of the warrant, and in such
event the Company shall deliver in cash to such holder an amount equal to such
fractional interest.
Section
2. Adjustment of Warrant Shares and Exercise Price.
If the
Company at any time on or after the Issue Date subdivides (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the number of Warrant Shares will be proportionately
increased and the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time on or after the
Issue Date combines (by any stock split, stock dividend, recapitalization,
reorganization, scheme, arrangement or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the number
of Warrant Shares will be proportionately decreased and the Exercise Price in
effect immediately prior to such combination will be proportionately increased.
Any adjustment under this Section 2 shall become effective at the close of
business on the date the subdivision or combination becomes
effective.
Section
3. Rights Upon Distribution of Assets.
If the
Company shall declare or make any dividend or other distribution of its assets
or rights to acquire its assets (but not including distributions subject to
Section 4) to
the record holders of shares of Common Stock, by way of return of capital or
otherwise (including, without limitation, any distribution of cash, stock or
other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other
similar transaction) (a “Distribution”), then
any Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the weighted
average price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in
good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the weighted average price of
the shares of Common Stock on the Trading Day immediately preceding such record
date.
Section
4. Purchase Rights.
In
addition to any adjustments pursuant to Section 2 above, if at any time prior to
the Expiration Date the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of shares of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase
Rights.
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Section
5. Fundamental Transaction.
Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein. Upon consummation of the Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Warrant at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property purchasable upon the exercise of the
Warrant prior to such Fundamental Transaction), such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had this Warrant
been converted immediately prior to such Fundamental Transaction, as adjusted in
accordance with the provisions of this Warrant. In addition to and
not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this Warrant within 90
days after the consummation of the Fundamental Transaction but, in any event,
prior to the Expiration Date, in lieu of the shares of the Common Stock (or
other securities, cash, assets or other property) purchasable upon the exercise
of the Warrant prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had the Warrant
been exercised immediately prior to such Fundamental Transaction. The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.
Section
6. Reservation and Authorization of Capital Stock.
The
Company shall, at all times on and after the date hereof, reserve and keep
available for issuance such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants.
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Section
7. Registration and
Listing.
(a) Definition of Registrable
Securities. As used herein, the term “Registrable
Securities” means any shares of Common Stock issuable upon the exercise
of this Warrant, until the date (if any) on which such shares are eligible to be
sold all immediately without registration under the Securities Act and without
restrictions pursuant to Rule 144 under the Securities Act and subsequent
disposition of them shall not require registration or qualification of them
under the Securities Act or any similar state law then in force. If
requested by the Holder and the Holder furnishes to the Company such
certifications as it may reasonably request confirming that the shares of Common
Stock issuable upon the exercise of this Warrant will be sold in accordance with
Rule 144, the Company will provide new certificates not bearing a legend
restricting further transfer for all shares eligible to be sold all immediately
without registration under the Securities Act and without restrictions pursuant
to Rule 144.
(b) Incidental Registration
Rights. So long as the Holder is holding Registrable
Securities, if the Company, at any time on or after June __, 2010 and on or
before the five (5) year anniversary of the Issue Date, proposes to file a
“shelf” registration statement (a “Shelf Registration
Statement”) to register any of its securities under the Securities Act
(other than in connection with a registration on Form S-4 or S-8 or any
successor forms) whether for its own account or for the account of any holder or
holders of its shares other than Registrable Securities (any shares of such
holder or holders (but not those of the Company and not Registrable Securities)
with respect to any registration are referred to herein as, “Other Shares”), the
Company shall give prompt (but not less than twenty (20) days prior to the
anticipated effectiveness thereof) written notice to the holders of Registrable
Securities of its intention to do so. Upon the written request of any
such holder of Registrable Securities made within fifteen (15) days after the
receipt of any such notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), except as set forth in
Section 7(b)(ii), the Company will include in the Shelf Registration Statement
all of the Registrable Securities, to the extent requisite to permit the
disposition of the Registrable Securities so to be registered; provided, however, that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the Shelf Registration Statement,
the Company shall determine for any reason in its sole discretion either to not
register, to delay or to withdraw registration of such securities, the Company
may, at its election, give written notice of such determination to such holder
and, thereupon: (A) in the case of a determination not to register, shall be
relieved of its obligation to register any Registrable Securities in connection
with such registration (but not from its obligation to pay the Registration
Expenses in connection therewith), without prejudice, however, to the rights of
the holders of Registrable Securities hereunder, (B) in the case of a
determination to delay registration, shall be permitted to delay registering any
Registrable Securities for the same period as the delay in registering such
other securities (including the Other Shares), without prejudice, however, to
the rights of the holders of Registrable Securities hereunder and (C) in the
case of a determination to withdraw registration, shall be permitted to withdraw
registration, without prejudice, however, to the rights of the holders of
Registrable Securities hereunder. The Company will pay all Registration Expenses
in connection with each registration of Registrable Securities pursuant to this
Section 7(b).
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(c) Registration
Procedures. Whenever the holders of Registrable Securities
have properly requested that any Registrable Securities be registered pursuant
to the terms of this Warrant, the Company shall use its reasonable best efforts
to:
(i) prepare
and file with the SEC the Shelf Registration Statement and use its reasonable
best efforts to cause the Shelf Registration Statement to become effective
(subject, in each case, to the Company’s rights under Section 7(b) hereof to not
register, delay or withdraw the applicable registration of such
securities);
(ii) notify
such holders of the effectiveness of each Shelf Registration Statement filed
hereunder and prepare and file with the SEC such amendments and supplements to
such Shelf Registration Statement and the prospectus used in connection
therewith as may be necessary to (A) keep such Shelf Registration Statement
effective and the prospectus included therein usable for a period commencing on
the date that such Shelf Registration Statement is initially declared effective
by the SEC and ending on the date when all Registrable Securities covered by
such Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement or cease to be Registrable Securities (subject to the
reasonable right of the Company to suspend sales under the Shelf Registration
Statement during other offerings or at times when the Company reasonably
believes that sales of Common Stock thereunder would not be in compliance with
the Securities Act), and (B) comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Shelf
Registration Statement during such period;
(iii) furnish
to such holders such number of copies of such Shelf Registration Statement, each
amendment and supplement thereto, the prospectus included in such Shelf
Registration Statement (including each preliminary prospectus) and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such holders;
(iv) use
its reasonable best efforts to register or qualify such Registrable Securities
under such other securities or blue sky laws of such jurisdictions as such
holders reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
holders; provided,
however, that the Company shall not be required to: (A) qualify generally
to do business in any jurisdiction where it would not otherwise be required to
qualify but for this subparagraph; (B) subject itself to taxation in any such
jurisdiction; or (C) consent to general service of process in any such
jurisdiction;
(v) notify
such holders, 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 Shelf Registration Statement contains an
untrue statement of a material fact or omits any material fact necessary to make
the statements therein, in light of the circumstances in which they are made,
not materially misleading, and, at the reasonable request of the Company, such
holders shall not sell any shares of Common Stock under the Shelf Registration
Statement until the Company is able to advise such holders that such prospectus
shall not contain an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances in which they are made, not materially misleading (subject, in
each case, to the Company’s rights under Section 7(c)(ii) hereof to suspend
sales under the Shelf Registration Statement, it being agreed that upon such
occurrence, the Company shall undertake reasonable efforts under the
circumstances to correct, by appropriate filing with the SEC, such untrue
statements or omissions);
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(vi) provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such Shelf Registration Statement;
(vii) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement of the Company, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and, at the option of the Company, Rule 158 thereunder;
(viii) in
the event of the issuance of any stop order suspending the effectiveness of a
Shelf Registration Statement, or of any order suspending or preventing the use
of any related prospectus or suspending the qualification of any Registrable
Securities included in such Shelf Registration Statement for sale in any
jurisdiction, the Company shall use its reasonable best efforts promptly to
obtain the withdrawal of such order;
(ix) use
its reasonable best efforts to cause any Registrable Securities covered by such
Shelf Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
and
(d) Listing. The
Company shall use its Reasonable Best Efforts to secure the listing of the
Common Stock underlying this Warrant upon each national securities exchange or
automated quotation system upon which shares of Common Stock are then listed or
quoted (subject to official notice of issuance) and shall maintain such listing
of shares of Common Stock.
(e) Expenses. The
Company shall pay all Registration Expenses relating to the registration and
listing obligations set forth in this Section 7. For purposes of this
Warrant, the term “Registration
Expenses” means: (a) all SEC and other registration and filing fees and
fees, as applicable, of the Financial Industry Regulatory Authority, Inc.
(“FINRA”), (b)
all reasonable fees and expenses of complying with securities or blue sky laws,
(c) all word processing, duplicating and printing expenses, (d) the fees and
disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or “cold comfort”
letters required by or incident to such performance and compliance and (e)
premiums and other costs of policies of insurance (if any) against liabilities
arising out of the public offering of the Registrable Securities being
registered if the Company desires such insurance, if any.
(f) Information Provided by
Holders. Any holder of Registrable Securities included in any
registration shall furnish to the Company such information as the Company may
reasonably request in writing to enable the Company to comply with the
provisions hereof in connection with any registration referred to in this
Warrant.
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(g) FINRA CobraDesk
Filings. In the event that a Shelf Registration Statement
covering the Registrable Securities is filed and a filing of such Shelf
Registration Statement for review by FINRA via the FINRA’s CobraDesk filing
system (“CobraDesk
Filing”) is required pursuant to the rules and regulations of FINRA, the
Company will prepare and make a COBRADesk Filing of the selling shareholder
resale offering described in such Shelf Registration Statement for review by
FINRA for the purpose of having the prospectus contained within such Shelf
Registration Statement treated as a “base prospectus” in connection with such
resale offering. If the CobraDesk Filing is required, the Company
will use its reasonable best efforts to have the CobraDesk Filing approved by
FINRA within thirty (30) days of the filing date of the Shelf Registration
Statement. The Company shall bear all expenses of the CobraDesk
Filing, if any, including fees and expenses of counsel or other advisors to the
Holder. In all circumstances, the Company shall pay for all FINRA
filing fees associated with any CobraDesk Filing.
(h) Effectiveness
Period. The Company shall use its reasonable best efforts to
keep each Shelf Registration Statement contemplated hereunder continuously
effective under the Securities Act (subject to the reasonable right of the
Company to suspend sales under the Shelf Registration Statement during other
offerings or at times when the Company reasonably believes that sales of Common
Stock thereunder would not be in compliance with the Securities Act) until the
date which is the earlier date of when (A) all Registrable Securities covered by
such Shelf Registration Statement have been sold or (B) all Registrable
Securities covered by such Shelf Registration Statement may be sold immediately
without registration under the Securities Act and without restrictions pursuant
to Rule 144 under the Securities Act, as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
reasonably acceptable to the Company’s transfer agent and the affected holders
of Registrable Securities.
Section
8. Noncircumvention.
The
Company hereby covenants and agrees that the Company will not, by amendment of
its Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
Holder. Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall use all reasonable efforts to take all such actions as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on exercise).
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Section
9. Rights of Shareholders.
Nothing
contained herein shall be construed to confer upon the holder of this Warrant,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value or change of stock to no par value, consolidation,
merger, conveyance, or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until the Warrant shall
have been exercised and the certificates representing the Warrant Shares shall
have been issued, as provided herein.
Section
10. Stock and Warrant Books.
The
Company will not at any time, except upon dissolution, liquidation or winding
up, close its stock books or warrant books so as to result in preventing or
delaying the exercise of any Warrant.
Section
11. Limitation of Liability.
No
provisions hereof, in the absence of affirmative action by the Holder to
purchase Warrant Shares hereunder, shall give rise to any liability of the
Holder to pay the Exercise Price or as a shareholder of the Company (whether
such liability is asserted by the Company or creditors of the
Company).
Section
12. Transfer, Division and Combination.
This
Warrant may be transferred without the written consent of the Company. Any
Warrants issued upon the transfer of this Warrant shall be numbered and shall be
registered in a Warrant Register as they are issued. The Company shall be
entitled to treat the registered holder of any Warrant on the Warrant Register
as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such Warrant on the
part of any other person, and shall not be liable for any registration of
transfer of Warrants that are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. Notwithstanding the
foregoing, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
and the rules and regulations thereunder. This Warrant may be divided or
combined with other warrants of like tenor and representing in the aggregate a
like amount, upon presentation at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney. The
Company shall pay all expenses in connection with the preparation, issue and
delivery of Warrants under this Section 12. The
Company agrees to maintain at its aforesaid office books for the registration of
the Warrants.
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Section
13. Loss, Destruction of Warrant Certificates.
Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity and/or security satisfactory to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company will make and deliver, in lieu of such lost,
stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of Warrant
Shares.
Section
14. Amendment and Waiver.
Except as
otherwise provided herein, the provisions of this Warrant may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if (but only if) the Company has obtained the
written consent from the majority of the holders of the Warrant Series; provided, that no
such action (other than those contemplated by Sections 3 or 5) may increase the
exercise price of this Warrant or decrease the number of shares or class of
stock obtainable upon exercise of this Warrant without the written consent of
the Holder. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the Warrant Series then
outstanding.
Section
15. Notices Generally.
Any
notice, request, consent, other communication or delivery pursuant to the
provisions hereof shall be in writing and shall be sent by one of the following
means: (i) by registered or certified first class mail, postage prepaid, return
receipt requested; (ii) by facsimile transmission with confirmation of receipt;
(iii) by overnight courier service; or (iv) by personal delivery, and shall be
properly addressed to the Holder at the last known address or facsimile number
appearing on the books of the Company, or, except as herein otherwise expressly
provided, to the Company at its principal executive office at New Generation
Biofuels Holdings, Inc., 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx
00000, (Fax: 000-000-0000), Attention: Xxxx X. Xxxxxxxxx, or such other address
or facsimile number as shall have been furnished to the party giving or making
such notice, demand or delivery.
Section
16. Successors and Assigns.
This
Warrant shall bind and inure to the benefit of and be enforceable by the parties
hereto and their respective permitted successors and assigns.
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Section
17. Governing Law.
This
Warrant shall be governed by and construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.
Section
18. Dispute Resolution Regarding Exercise Price and Warrant
Shares.
In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations within two Business Days of
receipt of the Exercise Notice giving rise to such dispute, as the case may be,
to the Holder. If the Holder and the Company are unable to agree upon
such determination or calculation of the Exercise Price or the Warrant Shares
within five Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
Business Days submit the disputed arithmetic calculation of the Warrant Shares
to the Company’s independent, outside accountant. The Company shall
cause the accountant to perform the determinations or calculations and notify
the Company and the Holder of the results no later than ten Business Days from
the time it receives the disputed determinations or
calculations. Such accountant’s determination or calculation shall be
binding upon all parties absent demonstrable error. The expenses of
the accountant will be borne by the Company unless the accountant determines
that the determination of the Exercise Price or the arithmetic calculation of
the Warrant Shares by the Holder was demonstrably in error, in which case the
expenses of the accountant will be borne by the Holder.
Section
19. Certain Definitions.
As used
in this Warrant, unless the context otherwise requires:
“Business Day” shall
mean any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized by law to remain closed.
“Convertible
Securities” shall mean evidence of indebtedness, preferred stock or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.
“Eligible Market”
shall mean the NYSE Amex, The New York Stock Exchange, Inc., The NASDAQ Global
Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, or the OTC
Bulletin Board.®
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
“Expiration Date”
shall mean the fifth anniversary of the Issuance Date or, if such date falls on
a day other than a Business Day, the next date that is a Business
Day.
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“Fundamental
Transaction” shall mean that the Company shall, directly or indirectly,
in one or more related transactions, (i) consolidate or merge with or into
another Person, (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company to another
Person, (iii) allow another Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the Person or
Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), (iv) consummate a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reclassify its Common Stock or
(vi) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock.
“Options” shall mean
options to subscribe for, purchase or otherwise acquire Common Stock or
Convertible Securities granted or issued by the Company, but excluding Employee
Awards.
“Parent Entity” of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.
“Person” shall mean an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.
“Registration
Statement” shall mean the Company’s Registration Statement on Form S-3
(No. 333-156449).
“Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Successor Entity”
shall mean the Person formed by, resulting from or surviving any Fundamental
Transaction or the Person (or Parent Entity of such Person, if the Successor
Entity does not have common stock or equivalent equity security is quoted or
listed on an Eligible Market) with which such Fundamental Transaction shall have
been entered into.
“Warrant” shall mean
this Warrant and all additional or new warrants issued upon division or
combination of, or in substitution for, this Warrant. All such additional or new
warrants shall at all times be identical as to terms and conditions and date,
except as to the number of Warrant Shares for which they may be
exercised.
“Warrant Shares” shall
mean the shares of the Company’s Common Stock purchasable by the holder of this
Warrant upon the exercise of this Warrant.
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“Warrant Series” shall
mean all warrants substantial identical to this Warrant other than the identity
of the Holder issued on or about the Issue Date.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed in its name by its duly authorized
officer as of the date first written above.
EXHIBIT A
NOTICE
OF EXERCISE
(to be
executed only upon exercise of Warrant)
0000 Xxxxxxxx Xxxx, Xxxxx
000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxx
or such other address notified by the
Company to the Holder.
The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock (“Warrant Shares”) of
New Generation Biofuels Holdings, Inc., a Florida corporation (the “Company”), evidenced
by the attached Warrant to Purchase Common Stock (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.
1. Form of Exercise
Price. The
Holder intends that payment of the Exercise Price shall be made
as:
£ a
“Cash Exercise”
with respect to _______________ Warrant Shares.
o
a
“Cashless
Exercise” with respect to _______________ Warrant
Shares.
2. Payment of Exercise
Price. In the
event that the holder has elected a Cash Exercise with respect to some or all of
the Warrant Shares to be issued pursuant hereto, the holder shall pay the
Aggregate Exercise Price in the sum of $_____________ to the Company in
accordance with the terms of the Warrant.
3. Delivery of Warrant
Shares. The Company shall deliver to the holder _____________
Warrant Shares in accordance with the terms of the Warrant.
4. Representations and
Warranties. By its
delivery of this Exercise Notice, the undersigned represents and warrants to the
Company that in giving effect to the exercise evidenced hereby the holder will
not beneficially own in excess of the number of shares of Common Stock
(determined in accordance with Section 13(d) of the Securities Exchange Act of
1934) permitted to be owned under Section 2(b) of this Warrant to which this
notice relates.
5. Delivery. The
shares of Warrant Shares shall be delivered to the following:
______________________
______________________
______________________
[SIGNATURE
OF HOLDER]
| Name of Investing Entity: |
| Signature of Authorized Signatory of Investing Entity: |
|
Name
of Authorized Signatory:
|
|
Title
of Authorized Signatory:
|
| Date: ________________________________ |
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