Contract
Exhibit
4.1
THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT COVERING THIS NOTE, OR THE MAKER RECEIVES
AN OPINION OF COUNSEL SATISFACTORY TO THE MAKER THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
SECURED
CONVERTIBLE PROMISSORY NOTE
AND
SECURITY AGREEMENT
|
Number:
[_____]
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Columbia,
Maryland
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|
$[_____]
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April
[_], 2010
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FOR VALUE
RECEIVED, the
undersigned, New Generation Biofuels Holdings, Inc., a Florida corporation
having its principal office located at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxx 00000 (“Maker”
or “Company”) or its
permitted assign, promises to pay to [INSERT NAME OF NOTE HOLDER],
(“Holder”),
on ,
2010 (the “Maturity
Date”), the lesser of (i) the principal sum of [INSERT AMOUNT IN WORDS]
($[____]) plus interest on the outstanding principal balance and (ii) the
aggregate unpaid and unconverted principal amount hereunder plus interest on the
outstanding principal balance.
1. Rate of
Interest. The outstanding principal amount of this Note from
the date hereof until such principal amount is paid in full or converted as
provided herein, shall bear simple interest at a rate of Ten Percent (10%) per
annum. Interest shall be payable on the earlier of the Maturity Date
or on the date the principal amount is paid in full (including on the Conversion
Date, as defined below, if applicable), or at the election of the Holder,
interest on the portion of the principal amount being converted shall be paid on
the applicable Conversion Date, as provided in Section 4. Interest
shall be calculated on a year of 360 days based upon the actual number of days
elapsed.
2. Method of
Payment. Principal and interest shall be paid in lawful money
of the United States of America to the account of Holder at such account as
Holder may from time to time designate to the Maker in writing.
3. Prepayment.
(a) Optional
Prepayment. The outstanding principal amount of this Note,
together with any unpaid interest accrued thereon, may be prepaid in its
entirety without penalty at the option of the Maker.
(b) Mandatory
Prepayment.
(i) Upon
the occurrence of an Event of Default (as defined in Section 6), the outstanding
principal of and all accrued interest on this Note shall be accelerated and
shall automatically become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by the
Maker, notwithstanding anything contained herein to the
contrary.
(ii) The
Holder shall, at its sole option, have the right to require the Maker to pay the
outstanding principal of and all accrued interest on this Note upon the
occurrence of any of the following events: (1)
Maker closing on an agreement to effectuate any sale or other
disposition of all or substantially all of its assets, in one transaction or in
a series of transactions, (2) the Maker closing on an agreement to
effectuate any consolidation or merger into another entity, or (3) any sale of a
majority of the outstanding equity of the Maker (or any other event that
constitutes a Change of Control of the Maker (as defined below)), in one
transaction or in a series of transactions other than a transaction triggering
the conversion. Immediately upon the occurrence of either of the
events set forth in clauses (1) or (2) above, or immediately upon obtaining
knowledge that any person has entered into an agreement to effectuate, the event
set forth in clause (3) above, the Maker shall give written notice of such event
to the Holder. “Change of Control” means any
person or “group” (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 (the “Exchange Act”)) that is not currently a beneficial
owner of Maker’s stock, becoming the beneficial owner, directly or indirectly,
of outstanding shares of stock of Maker entitling such person or persons to
exercise 50% or more of the total votes entitled to be cast at a regular or
special meeting of the shareholders of the Company in the election of directors
(the term “beneficial owner” shall be determined in accordance with Rule 13d-3
of the Exchange Act), but excluding unexercised warrants with an exercise price
in excess of the then most recent closing sale price of the Company’s Common
Stock (as hereinafter defined).
4. Conversion. At
any time prior to the Maturity Date, at the election of the Holder, all or any
portion of the outstanding principal amount due under the Note and/or accrued
and unpaid interest thereon shall be converted into that number of shares of
common stock of the Company (“Common Stock”) equal to the
quotient resulting from the division of (i) the amount being converted
(principal and interest) by (ii) $0.90 per
share, as adjusted as provided herein (the “Conversion
Price”). Should the Holder so elect, any accrued but unpaid
interest on the portion of the Note being converted may be paid in cash at the
time of, and in lieu of, conversion of such interest into Common
Stock.
(a) Conversion
shall be effected by the surrender of this Note by the Holder, marked
“canceled,” at the principal corporate office of the Maker together with
Holder’s written notice to the Maker stating the amount to be converted (or the
entire outstanding balance, as applicable) and the name or names in which the
certificate or certificates for the Common Stock (the “Conversion Stock”) are to be
issued. At the time of such conversion, the Maker shall issue and
deliver to the Holder a certificate or certificates for the number of shares of
Conversion Stock to which the Holder is entitled. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date the Maker receives the cancelled Note and the Holder’s conversion
notice (the “Conversion
Date”), and the persons entitled to receive the Conversion Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such Conversion Stock as of such date. No further interest
shall accrue after the Conversion Date. No fractional shares shall be
issued upon conversion of this Note and the number of shares of Conversion Stock
to be issued shall be rounded down to the nearest whole share. If
less than the entire outstanding balance is converted, the Company shall issue a
new Note for the remaining balance outstanding following
conversion.
(b) This
Note is one of an authorized issue of the Maker’s Convertible Promissory Notes,
due [_____] [_], 2010 (herein collectively called the “Notes”) issued in varying
denominations pursuant to the Note and Warrant Purchase Agreement between the
Maker and the holders of the Notes, dated as of April 30, 2010 (the “Purchase Agreement”), numbered
consecutively and limited to the maximum aggregate principal amount of Two
Million Dollars ($2,000,000). All rights and priorities of the registered owner
of this Note and the indebtedness evidenced hereby shall rank pari passu in all
respects with the rights and priorities accorded the registered owners of the
Notes and the indebtedness evidenced thereby.
(c) The
Company shall not effect the conversion of this Note, and the Holder shall not
have the right to conversion this Note, to the extent that after giving effect
to such conversion, such Holder (together with such Holder’s affiliates) would
beneficially own in excess of 9.99% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such
conversion. 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
conversion of this Note 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) conversion of the remaining, unconverted portion of this Note
beneficially owned by such Person and its affiliates and (B) conversion or
conversion of the unconverted 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
Notes) subject to a limitation on conversion or conversion 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 Note, 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 (“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 Note, 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
conversion 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
9.99% 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.
(d) All
shares of Conversion Stock issuable upon the conversion of this Note in
accordance with the terms hereof will not be registered with the SEC and will
not be transferable or resalable by any subscribers except as permitted pursuant
to registration or exemption under the Securities Act. Rule 144
provides that all non-affiliates who have held restricted securities of an SEC
reporting company for at least six months and have not had an affiliate
relationship with the issuer during the preceding three months may sell their
securities without restriction or limitation, other than that the issuer must be
in compliance with the rule’s current public information requirements during the
six months following satisfaction of the six-month holding period
requirement. It also provides that all non-affiliates who have held
restricted shares of an SEC reporting company for more than one year, may freely
sell the securities without regard to any Rule 144 conditions. The
Company will undertake all reasonable efforts to comply with Rule 144’s current
information requirement, including compliance with the filing and reporting
requirements of section 13 or 15(d) of the Exchange Act.
(e) The
Company shall pay all expenses payable in connection with the preparation, issue
and delivery of stock certificates under this section; provided, however, that the
Holder shall be responsible for all transfer taxes resulting from the fact that
any certificate issued in respect of Conversion Stock is not in the name of the
Holder.
(f) All
shares of Conversion Stock issuable upon the conversion of this Note 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.
(g)
If, at any time prior to the repayment in full of this
Note, the number of outstanding shares of Common Stock is (i) increased by a
stock dividend payable in shares of Common Stock or by a subdivision or split-up
of shares of Common Stock, or (ii) decreased by a combination of shares of
Common Stock, then, following the record date fixed for the determination of
holders of Common Stock entitled to receive the benefits of such stock dividend,
subdivision, split-up, or combination, the Conversion Price shall be adjusted to
a new amount equal to the product of (A) the Conversion Price in effect on such
record date, and (B) the quotient obtained by dividing (x) the number of shares
of Conversion Stock into which this Note would be exercisable on such record
date (without giving effect to the event referred to in the foregoing clause (i)
or (ii)), by (y) the number of shares of Conversion Stock which would be
outstanding immediately after the event referred to in the foregoing clause (i)
or (ii), if this Note had been converted immediately prior to such record
date.
(h) In
case of any reclassification, reorganization or change of the outstanding Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend), or in case of any consolidation of the Company with, or merger
of the Company into, another corporation or other business organization (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
outstanding Common Stock of the Company) at any time prior to the repayment in
full of this Note, then, as a condition of such reclassification,
reorganization, change, consolidation or merger, lawful provision shall be made,
and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Holder, so that the Holder shall have the
right prior to the repayment in full of this Note to convert amounts outstanding
under this Note into the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, reorganization, change,
consolidation or merger by a holder of the number of shares of Conversion Stock
of the Company which might have been purchased by the Holder immediately prior
to such reclassification, reorganization, change, consolidation or merger, and
in any such case appropriate provisions shall be made with respect to the rights
and interest of the Holder to the end that the provisions hereof (including
provisions for the adjustment of the Conversion Price and of the number of
shares purchasable upon conversion of this Note) shall thereafter be applicable
in relation to any shares of stock and other securities and property thereafter
deliverable upon conversion hereof.
(i) 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 conversion in full of this
Note.
(j) Nothing
contained herein shall be construed to confer upon the holder of this Note, 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 Note shall have been
converted and the certificates representing the Conversion Stock shall have been
issued, as provided herein.
(k) The
Company will not at any time, except upon dissolution, liquidation or winding
up, close its stock books so as to result in preventing or delaying the
conversion of any Note.
(l) The
Holder, by accepting this Note, covenants and agrees that, at the time of
conversion hereof, and at the time of any proposed transfer of Conversion Stock
acquired upon conversion hereof, unless a current registration statement under
the Securities Act shall be in effect with respect to the Conversion Stock to be
issued upon conversion of this Note, such Holder will deliver to the Company a
written statement that the securities acquired by the Holder upon conversion
hereof are for the account of the Holder or are being held by the Holder as
trustee, investment manager, investment advisor or as any other fiduciary for
the account of the beneficial owner or owners for investment and are not
acquired with a view to, or for sale in connection with, any distribution
thereof (or any portion thereof) and with no present intention (at any such
time) of offering and distributing such securities (or any portion thereof). The
Holder agrees that certificates representing Conversion Stock may bear a legend
substantially as follows:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN
EFFECT AS TO THESE SECURITIES OR (2) THERE IS AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS
AVAILABLE.
5. Security
Agreement.
(a)
This Note shall constitute a security agreement as that
term is used in the Uniform Commercial Code (the “UCC”) and Maker hereby grants
to Holder, in order to secure Maker’s obligations under this Note, a security
interest in the equipment and other assets of the Maker located at its biofuels
plant with an address of 0000 Xxxxxxxxxx Xxx., Xxxxxxxxx, Xxxxxxxx (the “Plant”) and the proceeds
thereof, excluding fuel sold in the ordinary course of business (collectively,
the “Secured
Property”). Terms used in this paragraph that are defined in
the UCC shall have the meanings assigned thereto in Article 9 of the UCC of the
State of Maryland.
(b) Maker
shall take all actions as may be required to ensure that the security interest
maintained hereunder constitutes a first priority perfected security
interest. Maker will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to Holder from time to time such financing
statements, certificates and other assurances or instruments and take such
further steps relating to the Secured Property which Holder, upon written
discretion, deems reasonably appropriate or advisable to perfect, preserve or
protect its security interest in the Secured Property. Without
limiting the foregoing, Maker hereby authorizes Holder to file any such
financing statements as Holder shall determine to be necessary or advisable to
perfect the security interest granted hereunder, without the signature of
Maker.
(c) Maker
represents and warrants that (i) it is a Florida corporation, (ii)
its organizational identification number is _________, (iii) its full legal name
is New Generation Biofuels Holdings, Inc. and (iv) its chief executive office is
located at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx
00000. Maker shall not change any of the information described in
this clause (c) without 30 days prior written notice to Holder and completing
such action as Holder may reasonably request to protect and perfect the security
interest granted hereunder. Maker further represents and warrants
that except for the liens granted hereunder, it has not granted any other liens
on the Secured Property or authorized the filing of any UCC financing statement
with respect thereto.
(d) In
addition to all other rights, options, and remedies granted to Holder under this
Note, upon the occurrence of an Event of Default, Holder may exercise all other
rights granted to it under this Note and all rights under the UCC in effect in
the applicable jurisdiction(s) and under any other applicable law, and exercise
the following rights and remedies (which list is given by way of example and is
not intended to be an exhaustive list of all such rights and
remedies):
(i) the
right to take possession of, send notices regarding, and collect directly the
Secured Property, with or without judicial process, and to exercise all rights
and remedies available to Holder with respect to the Secured Property under the
UCC in effect in the applicable jurisdiction(s);
(ii) the
right to (by its own means or with judicial assistance) enter the Plant
(provided, however, that if the Secured Property is relocated to any other
premises, this subclause (ii) shall also apply to such premises) and take
possession of the Secured Property, or dispose of the Secured Property on such
premises in compliance with subsection (e) below, without any liability for
rent, storage, utilities, or other sums, and Maker shall not resist or interfere
with such action; and
(iii) the
right to require Maker at Maker’s expense to assemble all or any part of the
Secured Property and make it available to Holder at any place designated by
Holder.
(e) In
the case of such an Event of Default, Holder shall give the Maker not less than
10 business days prior written notice of its intended disposition of the Secured
Property; provided, however, if Maker cures such an Event of Default prior to
expiration of such notice period, an Event of Default will be not deemed to have
occurred and Holder shall have no rights to accelerate repayment or enforce the
Secured Property. Maker agrees that a notice received by it at least ten (10)
business days before the time of any intended public sale, or the time after
which any private sale or other disposition of the Secured Property is to be
made, shall be deemed to be reasonable notice of such sale or other
disposition. If permitted by applicable law, any perishable Secured
Property that threatens to decline rapidly in value or that is sold on a
recognized market may be sold immediately by Holder without prior notice to
Maker. At any sale or disposition of Secured Property, Holder may (to
the extent permitted by applicable law) purchase all or any part of the Secured
Property, free from any right of redemption by Maker, which right is hereby
waived and released. Maker covenants and agrees not to interfere with
or impose any obstacle to Holder’s exercise of its rights and remedies with
respect to the Secured Property following an Event of Default.
(f) Holder
shall have the right to proceed against all or any portion of the Secured
Property to satisfy the liabilities and obligations of Maker to Holder in any
order. All rights and remedies granted Holder under this Note and
under any other agreement referred to in this Note, or otherwise available at
law or in equity, shall be deemed concurrent and cumulative, and not alternative
remedies, and Holder may proceed with any number of remedies at the same time
until the principal, all interest, costs, expenses and other charges due under,
and all other existing and future liabilities and obligations of Maker to Holder
under this Note are satisfied in full. The exercise of any one right
or remedy shall not be deemed a waiver or release of any other right or remedy,
and Holder, upon the occurrence of an Event of Default, may proceed against
Maker, and/or the Secured Property, at any time, under any agreement, with any
available remedy and in any order.
(g) Maker
hereby irrevocably appoints Holder as its attorney-in-fact with right of
substitution, so that Holder or any other Person empowered by Holder shall be
authorized, without need of further authorization from the Maker, at any time
upon the occurrence of and during the continuation of an Event of Default, in
Holder’s discretion to take any and all actions authorized or permitted to be
taken by Holder under this Note or by law which Holder may deem necessary or
advisable to accomplish the purposes of this Note. Maker hereby
confirms and ratifies any and all actions and things performed or done by Holder
as Maker’s attorney-in-fact or any of its representatives in each case pursuant
to the powers granted hereunder. This special power of attorney shall be deemed
coupled with an interest, and cannot be revoked by Maker until all of the
obligations under this Note have been paid in full.
(h) Maker
shall permit representatives of Holder to visit and inspect the Plant and to
discuss Maker’s affairs, finances and accounts with Maker’s directors and
officers at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to Maker.
(i) Maker
shall maintain, with financially sound and reputable insurance companies not
affiliates of Maker, insurance with respect to the assets located at the Plant
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons, which
insurance shall in any event be reasonably satisfactory to
Holder. In the event that any proceeds relating to a casualty
event are received from the insurer in respect of the insurance policies
described in this subsection (i), such proceeds shall be promptly applied by
Maker to repair or replace the assets that were the subject of such casualty
event.
(j) Holder
acknowledges that its rights under this Section 5 are subject to the lease with
respect to the Plant (a copy of which shall be made available to Holder upon
written request to the Company) and the rights of the lessor thereunder,
including any liens that may arise due to nonpayment of rent, mechanics’ liens
for work performed or otherwise.
6. Events of
Default. An “Event of Default” shall occur
if:
(a) The
Maker shall default in the payment of the principal of or interest payable on
this Note, when and as the same shall become due and payable, whether at
maturity or at a date fixed for prepayment or by acceleration or otherwise and
such default shall continue un-remedied for ten (10) business days;
(b) The
Maker shall fail, in any material respect, to observe or perform any covenant or
agreement contained in this Note or the Note and Warrant Purchase Agreement
issued pursuant thereto and such failure shall continue for ten (10) business
days after the Maker receives notice of such failure;
(c) Any
material representation, warranty, certification or statement made by or on
behalf of the Maker in this Note or the Purchase Agreement or in any
certificate, writing or other document delivered pursuant hereto or thereto
shall prove to have been incorrect in any material respect when made, taking
into consideration any applicable cure period thereunder;
(d) An
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (a) relief in respect of
Maker or of a substantial part of Maker’s respective property or assets, under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law
(any such law, a “Bankruptcy
Law”), (B) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for a substantial part of the
property or assets of the Maker, or (C) the winding up or liquidation of the
Maker, and such proceeding or petition shall continue un-dismissed for 60 days,
or an order or decree approving or ordering any of the foregoing shall be
entered;
(e) the
Maker shall (A) voluntarily commence any proceeding or file any petition seeking
relief under a Bankruptcy Law, (B) consent to the institution of or the entry of
an order for relief against it, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition thereof, (C) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for a substantial part of the property or assets
of the Maker, (D) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) make a general assignment
for the benefit of creditors, (F) become unable, admit in writing its inability
or fail generally to pay its debts as they become due or (G) take any action for
the purpose of effecting any of the foregoing; or
(f) any
material provisions of this Note or the Purchase Agreement shall become void or
unenforceable or the Maker shall so assert in writing.
7. Suits for
Enforcement.
Upon the
occurrence of any one or more Events of Default, the holder of this Note may
proceed to protect and enforce its rights by suit in equity, action at law or by
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in the Purchase Agreement or in aid of the
exercise of any power granted in this Note, or may proceed to enforce the
payment of this Note, or to enforce any other legal or equitable right it may
have as a holder of this Note.
8. Legal
Holiday. If any payment pursuant to this Note shall be due on
a Saturday, a Sunday or a day which is a legal holiday in Baltimore, Maryland,
such payment shall be made without default on the next succeeding day which is a
business day, but any interest-bearing portions of the payment shall continue to
accrue interest until payment during the extension.
9. No
Waiver. The rights and remedies of Holder hereunder shall be
cumulative and concurrent and may be pursued singularly, successively or
together at the sole discretion of Holder, and may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same or any
other right or remedy.
10. Use of
Proceeds. Maker hereby declares, represents, and warrants that
the indebtedness evidenced hereby is made for the purpose of acquiring or
carrying on a business, professional, or commercial activity.
11. Assignment; Successors and
Assigns. Except with the prior written consent of Maker in its
sole and absolute discretion, this Note may be not be assigned by Holder to any
person or entity; provided, however, that nothing herein shall limit the
transferability of Common Stock received upon conversion of all or any part of
this Note. This Note shall inure to the benefit of and be enforceable
by Holder and Holder’s successors and permitted assigns, and shall be binding
and enforceable against Maker and Maker’s successors and assigns.
12. Governing Law;
Amendments. This Note shall be governed by and construed under
and in accordance with the laws of the State of New York. This Note
may be amended, supplemented or modified only by written instruction duly
executed by or on behalf of the Holders of 50% of the total Outstanding Balances
under the Notes.
13. Accredited Investor
Status. Holder hereby represents that Holder (as appropriate)
is an “accredited investor” as such term is defined in Rule 501 under the Act,
and understands that the Maker is relying on such representations in issuing
this Note pursuant to an exemption from registration under the Act.
14. Venue. Maker
irrevocably consents to the non-exclusive jurisdiction of the federal and state
courts located in the State of Maryland. Maker agrees that venue
shall be proper in any federal court located in the State of Maryland selected
by Holder and waives any right to object to the maintenance of a suit in any of
the state or federal courts located in the State of Maryland on the basis of
improper venue or of inconvenience of forum.
15. Waiver of Jury
Trial. Maker (by execution of this Note) and Holder (by
acceptance of this Note) agree that any suit, action, or proceeding, whether
claim or counterclaim, brought or instituted by or against Maker or Holder, or
any successor or assign of Maker or Holder, on or with respect to this Note, or
which in any way relates, directly or indirectly, to the obligations of Maker to
Holder under this Note, or the dealings of the parties with respect thereto,
shall be tried only by a court and not by a jury. MAKER AND HOLDER
HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING. Maker and Holder acknowledge and agree that this
provision is a specific and material aspect of the agreement between the parties
and that Holder would not enter into the transaction contemplated hereby with
Maker if this provision were not part of their agreement.
16. Counterparts. This
Note may be executed in two counterparts, both of which together constitute one
instrument. This Note may be executed by delivery of an original
executed counterpart signature page by facsimile transmission.
[SIGNATURE
PAGE FOLLOWS]
IN
WITNESS WHEREOF, the undersigned have duly executed this Note, or have caused
this Note to be duly executed on their behalf, as of the day and year first
hereinabove set forth.
| MAKER: | ||
| NEW GENERATION BIOFUELS HOLDINGS, INC. | ||
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By:
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Name:
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Title:
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ACKNOWLEDGED
AND AGREED:
HOLDER:
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Name
of Individual or Entity
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By:
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Name:
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