Attached files
| file | filename |
|---|---|
| 8-K - New Generation Biofuels Holdings, Inc | v210296_8k.htm |
| EX-4.3 - New Generation Biofuels Holdings, Inc | v210296_ex4-3.htm |
| EX-4.2 - New Generation Biofuels Holdings, Inc | v210296_ex4-2.htm |
| EX-1.1 - New Generation Biofuels Holdings, Inc | v210296_ex1-1.htm |
| EX-99.1 - New Generation Biofuels Holdings, Inc | v210296_ex99-1.htm |
| EX-10.1 - New Generation Biofuels Holdings, Inc | v210296_ex10-1.htm |
| EX-10.2 - New Generation Biofuels Holdings, Inc | v210296_ex10-2.htm |
NEITHER THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE
SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE
SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
|
Principal
Amount: $___________
|
Issue
Date: January ___, 2011
|
SECURED CONVERTIBLE
PROMISSORY NOTE
FOR VALUE
RECEIVED, NEW GENERATION
BIOFUELS HOLDINGS, INC., a Florida corporation (hereinafter called “Borrower”), hereby promises to
pay to the order of [____________________] (the
“Holder”), address at
[__________________________________________________________], without demand,
the sum of up to [_________________________] Dollars
($___________) (“Principal Amount”), with
interest accruing thereon, on July ___, 2011 (the “Maturity Date”), if not sooner
paid or modified as described herein.
This Note
has been entered into pursuant to the terms of a subscription agreement by and
among the Borrower, the Holder and certain other holders (the “Other Holders”) of convertible
promissory notes (the “Other
Notes”), dated of even date herewith (the “Subscription Agreement”) for
an aggregate Principal Amount of up to $1,000,000. Unless otherwise
separately defined herein, each capitalized term used in this Note shall have
the same meaning as set forth in the Subscription Agreement. The
following terms shall apply to this Note:
ARTICLE
I
GENERAL
PROVISIONS
1.1 Bridge
Note. As
of the date hereof, the parties hereto agree that (i) all amounts outstanding
under that certain promissory note (the “Bridge
Note”), dated January 25,
2011, shall be treated as Principal Amount and accrued interest, as the case may
be, under this Note and shall as of the date hereof be subject to the terms and
conditions of this Note; and (ii) the Bridge Note shall hereby terminate and be
of no further force and effect.
1.2 Interest
Rate. Subject to Sections
1.3 and 6.7 hereof, interest payable on this Note shall accrue on the
outstanding Principal Amount at a rate per annum (the "Interest Rate") of eight
percent (8%). Interest on the outstanding Principal Amount shall
accrue from the date of this Note, shall compound monthly and, unless paid
earlier as described in the Note, shall be paid on the Maturity Date, whether by acceleration or
otherwise.
1.3 Minimum Monthly Principal
Payments. Amortizing payments of the outstanding
Principal Amount of this Note and accrued interest shall commence on the second
month anniversary date of this Note and on the same day of each month thereafter
(each a “Repayment
Date”) until the Principal Amount and accrued interest have been paid in
full, whether by the payment of cash or by the conversion of such Principal
Amount and interest into Common Stock pursuant to the terms
hereof. Subject to Article II and Article III below, on each
Repayment Date, the Borrower shall make payments to the Holder in an amount
equal to one-fifth (1/5th) of the
initial Principal Amount, the amount of accrued but unpaid or unconverted
interest on the entire Principal Amount outstanding prior to and as of such
Repayment Date, and any other amounts which are then owing under this Note that
have not been paid (collectively, the “Monthly Amount”).
1.4 Payment Grace
Period. The Borrower shall not have any grace period to pay
any monetary amounts due under this Note. After the Maturity Date and
during the pendency of an Event of Default, (as defined in Article IV) a default
interest rate of fifteen percent (15%) per annum shall be in
effect. Such interest shall be immediately due and
payable.
1.5 Conversion
Privileges. The Conversion Rights set forth in Article II and Article III shall
remain in full force and effect immediately from the date hereof and until the
Note is paid in full regardless of the occurrence of an Event of
Default.
1.6 Pari
Passu. All payments made on this Note and the Other
Notes and the manner of such payments and except as otherwise set forth herein,
all actions taken by the Borrower with respect to this Note and the Other Notes,
including but not limited to the optional conversions and elections pursuant to
Section 2.1 below, shall be made and taken pari passu with respect to
this Note and the Other Notes.
1.7 Application of
Payments. Payments made by Borrower to Holder, whether by
conversion or in cash, unless otherwise designated by Holder shall be applied
(i) first against amounts owed by Borrower to Holder other than Principal Amount
or interest, then (ii) to accrued interest, and lastly (iii) to Principal
Amounts of not yet due Monthly Amounts commencing with the last payable Monthly
Amount and thereafter to Monthly Amounts in reverse chronological
order. The foregoing notwithstanding, timely payments of Monthly
Amounts made pursuant to Section 2 shall be applied (i) first against any
amounts owed by Borrower to Holder other than Principal Amount or interest, then
(ii) to accrued interest, and lastly (iii) to the Principal Amount of such
timely made payment of Monthly Amount. Any Principal Amount, interest
and any other sum arising under this Note and the Transaction Documents that
remains outstanding as of the Maturity Date shall be due and payable on the
Maturity Date.
1.8 Miscellaneous. Interest
on this Note shall be calculated on the basis of a 360-day year and the actual
number of days elapsed. Principal and interest on this Note and other
payments in connection with this Note shall be payable at the Holder’s offices
as designated above in lawful money of the United States of America in
immediately available funds or as permitted hereby with shares of Common Stock,
without set-off, deduction or counterclaim. Upon assignment of the
interest of Holder in this Note, Borrower shall instead make its payment
pursuant to the assignee’s instructions upon receipt of written notice
thereof.
ARTICLE
II
CONVERSION
REPAYMENT
2.1 Payment of Monthly Amount in
Cash or Common Stock. Subject to Section 3.3 hereof, the
Borrower, at the Borrower’s election, shall pay the Monthly Amount, not later
than ten (10) business days after the relevant Repayment Date (i) in cash in an
amount equal to the Monthly Amount, or (ii) in Common Stock at an applied
conversion rate equal to the lesser of (A) $0.10, or (B) eighty-five percent
(85%) of the average of the closing price of the common stock as reported by
Bloomberg L.P. for the Principal Market for the ten (10) trading days preceding
the relevant Repayment Date, or (iii) a
combination of the foregoing (i) and (ii) in amounts designated by
Holder. The Borrower must contemporaneously with such payment deliver
to Holder supporting calculation for the amount of cash paid or shares of Common
Stock delivered. Amounts paid with shares of Common Stock must be
delivered to the Holder as described in Section 3.1(a). Borrower must
give Holder notice of its election of option (i), (ii) or (iii) above not later
than ten (10) business days before each
Repayment Date. Unless notice otherwise is given by Borrower prior to
such date, then notice will be deemed to have been given that the option set
forth in (ii) has been selected by Borrower. After receiving such
notice from Borrower, Holder must provide the Borrower with notice, if
applicable, that it is unable to accept shares of Common Stock due to the
limitations set forth in Section 3.3 hereof prior to the Repayment
Date. The foregoing notwithstanding, in the event delivery by the
Borrower of the Monthly Amount in Common Stock shall violate the restrictions of
Section 3.3 hereof, the delivery by the Borrower of such shares of Common Stock
will be deferred until three (3) days after the Holder notifies the Borrower
that such Holder may receive the shares of Common Stock representing the Monthly
Amount in compliance with Section 3.3 hereof.
ARTICLE
III
CONVERSION
RIGHTS
The
Holder shall have the right to convert the principal and any interest due under
this Note into Shares of the Borrower’s Common Stock, $0.001 par value per share
(“Common Stock”) as set
forth below.
3.1. Conversion into the
Borrower’s Common Stock.
(a) The
Holder shall have the right from and after the date of the issuance of this Note
and then at any time until this Note is fully paid, to convert any outstanding
and unpaid principal portion of this Note, and accrued but unpaid interest, at
the election of the Holder (the date of giving of such notice of conversion
being a “Conversion
Date”) into fully paid and non-assessable shares of Common Stock as such
stock exists on the date of issuance of this Note, or any shares of capital
stock of Borrower into which such Common Stock shall hereafter be changed or
reclassified, at the conversion price as defined in Section 3.1(b)
hereof, determined as provided herein. Upon delivery to the Borrower
of a completed Notice of Conversion, a form of which is annexed hereto as Exhibit A, Borrower shall
issue and deliver to the Holder within three (3) business days after the
Conversion Date (such third day being the “Delivery Date”) that number of
shares of Common Stock for the portion of the Note converted in accordance with
the foregoing. The Holder will not be required to surrender the Note
to the Borrower until the Note has been fully converted or
satisfied. The number of shares of Common Stock to be issued upon
each conversion of this Note shall be determined by dividing that portion of the
principal of the Note and interest, if any, to be converted, by the Conversion
Price.
Subject
to adjustment as provided in Section 3.1(c)
hereof, the conversion price (“Conversion Price”) per share
shall be $0.10.
(c) The
Conversion Price and number and kind of shares or other securities to be issued
upon conversion determined pursuant to Section 3.1(a), shall
be subject to adjustment from time to time upon the happening of certain events
while this conversion right remains outstanding, as follows:
A. Merger, Sale of Assets,
etc. If (A) the Borrower effects any merger
or consolidation of the Borrower with or into another entity, (B) the
Borrower effects any sale of all or substantially all of its assets in one or a
series of related transactions, (C) any tender offer or exchange
offer (whether by the Borrower or another entity) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, (D) the Borrower consummates a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one
or more persons or entities whereby such other persons or entities acquire more
than the 50% of the outstanding shares of Common Stock (not including any shares
of Common Stock held by such other persons or entities making or party to, or
associated or affiliated with the other persons or entities making or party to,
such stock purchase agreement or other business combination), (E) any “person”
or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of
the 1934 Act) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
Common Stock of the Borrower), or (F) the Borrower effects any reclassification
of the Common Stock or any compulsory share exchange pursuant to which the
Common Stock is effectively converted into or exchanged for other securities,
cash or property (other than a reverse merger) (in any such case, a
“Fundamental Transaction”),
this Note, as to the unpaid principal portion thereof and accrued interest
thereon, if any, shall thereafter be deemed to evidence the right to convert
into such number and kind of shares or other securities and property as would
have been issuable or distributable on account of such Fundamental Transaction,
upon or with respect to the securities subject to the conversion right
immediately prior to such Fundamental Transaction. The foregoing
provision shall similarly apply to successive Fundamental Transactions of a
similar nature by any such successor or purchaser. Without limiting
the generality of the foregoing, the anti-dilution provisions of this Section
shall apply to such securities of such successor or purchaser after any such
Fundamental Transaction.
B. Reclassification,
etc. If the Borrower at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes that may be issued or outstanding, this Note,
as to the unpaid principal portion thereof and accrued interest thereon, shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock immediately prior to such
reclassification or other change.
C. Stock Splits, Combinations
and Dividends. If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock in shares of Common Stock, the Conversion
Price shall be proportionately reduced in case of subdivision of shares or stock
dividend or proportionately increased in the case of combination of shares, in
each such case by the ratio which the total number of shares of Common Stock
outstanding immediately after such event bears to the total number of shares of
Common Stock outstanding immediately prior to such event.
D.
Share
Issuance. So long as this Note is outstanding, if the
Borrower shall issue any Common Stock except for the Excepted Issuances (as
defined in Section 12(a) of the Subscription Agreement), prior to the complete
conversion or payment of this Note, for a consideration per share that is less
than the Conversion Price that would be in effect at the time of such issue,
then, and thereafter successively upon each such issuance, the Conversion Price
shall be reduced to such other lower issue price. For purposes of
this adjustment, the issuance of any security or debt instrument of the Borrower
carrying the right to convert such security or debt instrument into Common Stock
or of any warrant, right or option to purchase Common Stock shall result in an
adjustment to the Conversion Price upon the issuance of the above-described
security, debt instrument, warrant, right, or option and again upon the issuance
of shares of Common Stock upon exercise of such conversion or purchase rights if
such issuance is at a price lower than the then applicable Conversion Price.
Common Stock issued or issuable by the Borrower for no consideration will be
deemed issuable or to have been issued for $0.001 per share of Common
Stock. Notwithstanding the foregoing, no adjustment to the Conversion
Price shall be made pursuant to this subsection (D) as a result of the issuance
of shares of Common Stock pursuant to Section 2.1(ii)(B) hereof. The
reduction of the Conversion Price described in this paragraph is in addition to
the other rights of the Holder described in the Subscription
Agreement.
(d) Whenever
the Conversion Price is adjusted pursuant to Section 3.1(c) above,
the Borrower shall promptly, but not later than the fifth (5th)
business day after the effectiveness of the adjustment, provide notice to the
Holder setting forth the Conversion Price after such adjustment and setting
forth a statement of the facts requiring such adjustment. Failure to
provide the foregoing notice is an Event of Default under this
Note.
(e) From
and after the Reservation Approval (as described in Section 9(w) of the
Subscription Agreement), Borrower will reserve from its authorized and unissued
Common Stock not less than an amount of Common Stock equal to 150% of the amount
of shares of Common Stock issuable upon the full conversion of this
Note. Thereafter, if additional shares of Common Stock are issuable
upon conversion of the Note or as a result of the application of the provisions
of Section 12(b) of the Subscription Agreement and Section 3.1(c)(D) of this
Note, the Borrower will not be in default of its reservation obligations
provided that at all times not less than 100% of the amount of Common Stock
necessary to allow each holder of a Note to be able to convert all such
outstanding Note, interest and Warrant Shares are reserved. Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. Borrower agrees that its issuance of
this Note shall constitute full authority to its officers, agents, and transfer
agents who are charged with the duty of executing and issuing stock certificates
to execute and issue the necessary certificates for shares of Common Stock upon
the conversion of this Note.
3.2 Method of
Conversion. This Note may be converted by the Holder in whole
or in part as described in Section 3.1(a) hereof
and the Subscription Agreement. Upon partial conversion of this Note,
a new Note containing the same date and provisions of this Note shall, at the
request of the Holder, be issued by the Borrower to the Holder for the principal
balance of this Note and interest which shall not have been converted or paid,
upon surrender of the existing Note. 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 up to the nearest whole share.
3.3. Maximum
Conversion. The Holder shall not be entitled to convert on a
Conversion Date that amount of the Note in connection with that number of shares
of Common Stock which would be in excess of the sum of (i) the number of shares
of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, (ii) any Common Stock issuable in connection with the
unconverted portion of the Note, and (iii) the number of shares of Common Stock
issuable upon the conversion of the Note with respect to which the determination
of this provision is being made on a Conversion Date, which would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock of the Borrower on such Conversion
Date. For the purposes of the provision to the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended, and Regulation 13d-3
thereunder. Subject to the foregoing, the Holder shall not be limited
to aggregate conversions of 4.99%. The Holder shall have the
authority to determine whether the restriction contained in this Section 3.3 will
limit any conversion hereunder and the extent such limitation applies and to
which convertible or exercisable instrument or part thereof such limitation
applies. The Holder may waive the conversion limitation described in
this Section
3.3, in whole or in part, upon and effective after 61 days prior written
notice to the Borrower. The determination of the beneficial ownership
by the Holder and its affiliates shall be made by the Holder, in its sole and
absolute discretion, and the Holder shall hold the Borrower harmless against any
and all damages arising out of or in connection with any conversion of this Note
in violation of this Section 3.3. Notwithstanding anything in this
Agreement or the Transaction Documents to the contrary, if Holder elects to
convert all or a portion of this Note into shares of Common Stock that, when
issued, would violate the restrictions described in this paragraph and either
(i) the Borrower issues shares of Common Stock as exercised by Holder in excess
of 4.99%, or (ii) Holder does not waive the restrictions described in this
paragraph and the Borrower complies with the restrictions described in this
paragraph, neither action by the Borrower shall be considered an Event of
Default under this Note or any other Transaction Document or otherwise give to
Holder any additional rights whether contemplated herein or
otherwise.
Notwithstanding
anything herein to the contrary, if Holder does not waive the restrictions
described in this Paragraph and Holder attempts to convert all or a portion of
this Note in excess of the amount permitted above, the Borrower’s compliance
with the above restriction shall not be considered an Event of Default under
this Note or otherewise give to Holder any additional rights.
3.4. Optional Redemption of
Principal Amount. Provided an Event of Default or an event
which with the passage of time or the giving of notice could become an Event of
Default has not occurred, unless such Event of Default has been timely cured,
the Borrower will have the option of prepaying the outstanding Principal amount
of this Note (“Optional
Redemption”), in whole or in part, by paying to the Holder a sum of money
equal to one hundred percent (100%) of the Principal amount to be redeemed,
together with accrued but unpaid interest thereon and any and all other sums
due, accrued or payable to the Holder arising under this Note or any Transaction
Document through the Redemption Payment Date as defined below (the “Redemption
Amount”). Borrower’s election to exercise its right to prepay
must be by notice in writing (“Notice of
Redemption”). The Notice of Redemption shall specify the date
for such Optional Redemption (the “Redemption Payment Date”),
which date shall be at least thirty (30) business days after the date of the
Notice of Redemption (the “Redemption
Period”). A Notice of Redemption shall not be effective with
respect to any portion of the Principal Amount for which the Holder has
previously delivered an election to convert for conversions initiated or made by
the Holder during the Redemption Period. On the Redemption Payment
Date, the Redemption Amount, less any portion of the Redemption Amount against
which the Holder has permissibly exercised its conversion rights, shall be paid
in immediately available funds to the Holder. In the event the Borrower fails to
pay the Redemption Amount on the Redemption Payment Date as set forth herein,
then (i) such Notice of Redemption will be null and void, (ii) Borrower will
have no right to deliver another Notice of Redemption, and (iii) Borrower’s
failure may be deemed by Holder to be a non-curable Event of
Default. A Notice of Redemption may be cancelled by the Holder during
the Redemption Period, if at any time during the Redemption Period an Event of
Default, or an event which with the passage of time or giving of notice could
become an Event of Default (whether or not such Event of Default has been
cured), has occurred. During the Optional Redemption Period, the
Borrower must abide by all of its obligations to the Note Holder.
ARTICLE
IV
EVENT
OF DEFAULT
The
occurrence of any of the following events of default (“Event of Default”) shall, at
the option of the Holder hereof, make all sums of principal and interest then
remaining unpaid hereon and all other amounts payable hereunder immediately due
and payable, upon demand, without presentment or grace period, all of which
hereby are expressly waived, except as set forth below:
4.1 Failure to Pay Principal or
Interest. The Borrower fails to pay any principal or interest
under this Note when due.
4.2 Breach of
Covenant. The Borrower or any Subsidiary breaches any material
covenant or other material term or condition of the Subscription Agreement,
Transaction Documents or this Note, except for a breach of payment (which shall
be applicable pursuant to Section 4.1), in any material respect and such breach,
if subject to cure, continues for a period of twenty (20) days.
4.3 Breach of Representations
and Warranties. Any material representation or warranty of the
Borrower made herein, in the Subscription Agreement, or the Transaction
Documents shall be false or misleading in any material respect as of the date
made and the Closing Date.
4.4 Liquidation. Any
dissolution, liquidation or winding up by Borrower or a Subsidiary of a
substantial portion of their business.
4.5 Cessation of
Operations. Any cessation of operations by Borrower or a
Subsidiary unless such Subsidiary’s operations are transferred to Borrower or an
Affiliate.
4.6 Maintenance of
Assets. The failure by Borrower or any Subsidiary to
maintain any material intellectual property rights, personal, real property,
equipment, leases or other assets which are necessary to conduct its business
(whether now or in the future) and such breach is not cured with fifteen (15)
days after written notice to the Borrower from the Holder.
4.7 Receiver or
Trustee. The Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.
4.8 Judgments. Any
money judgment, writ or similar final process shall be entered or made in a
non-appealable adjudication against Borrower or any Subsidiary or any of its
property or other assets for more than $100,000 in excess of the Borrower’s
insurance coverage, unless stayed vacated or satisfied within thirty (30)
days.
4.9 Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law, or the issuance of any notice in
relation to such event, for the relief of debtors shall be instituted by or
against the Borrower or any Subsidiary and not discharged within forty-five (45)
days.
4.10 Delisting. From
and after the initial trading, listing or quotation of the Common Stock on a
Principal Market, an event resulting in the Common Stock no longer being traded,
listed or quoted on a Principal Market; failure to comply with the requirements
for continued quotation on a Principal Market; or notification from a Principal
Market that the Borrower is not in compliance with the conditions for such
continued quotation and such non-compliance continues for thirty (30) days
following such notification.
4.11 Non-Payment. A
default by the Borrower or any Subsidiary under any one or more obligations in
an aggregate monetary amount in excess of $250,000 for more than thirty (30)
days after the due date, unless the Borrower or such Subsidiary is contesting
the validity of such obligation in good faith; provided, however, that any
such default not in excess of $50,000 shall not be counted for purposes of
calculating the $250,000 aggregate amount.
4.12 Stop
Trade. An SEC or judicial stop trade order or Principal Market
suspension that lasts for ten (10) or more consecutive trading
days.
4.13 Failure to Deliver Common
Stock or Replacement Note. Borrower’s failures to timely
deliver Common Stock to the Holder pursuant to and in the form required by this
Note, Sections 7 and 11 of the Subscription Agreement, and the Warrant or, if
required, a replacement Note following a partial conversion.
4.14 Reservation
Default. Failure by the Borrower to have reserved for
issuance upon conversion of the Note or upon exercise of the Warrants, the
number of shares of Common Stock as required in the Subscription Agreement, this
Note and the Warrants, and such failure continues for a period of thirty (30)
business days.
4.15 Financial Statement
Restatement. The restatement after the date hereof of any
financial statements filed by the Borrower with the Securities and Exchange
Commission or delivered to Holder for any date or period from two years prior to
the Issue Date of this Note and until this Note is no longer outstanding, if the
result of such restatement would, by comparison to the unrestated financial
statements, have constituted a Material Adverse Effect. For the
avoidance of doubt, any restatement related to new accounting pronouncements,
including without limitation, for derivative accounting shall not constitute a
default under this Section
4.15.
4.16
Event Described in
Subscription Agreement. The occurrence of an Event of Default
as described in the Subscription Agreement or any other Transaction Document
that, if susceptible to cure, is not cured during any designated cure
period.
4.17 Notification
Failure. A failure by Borrower to notify Holder of any
material event of which Borrower is obligated to notify Holder pursuant to the
terms of this Note or any other Transaction Document.
4.18 Cross
Default. A default by the Borrower of a material term,
covenant, warranty or undertaking of any other agreement to which the Borrower
and Holder are parties, or the occurrence of an event of default under any such
other agreement to which Borrower and Holder are parties which is not cured
after any required notice and/or cure period.
4.19
Other Note
Default. The occurrence of an Event of Default under any
Other Note.
ARTICLE
V
SECURITY
INTEREST
5.
Security
Interest. Subject to Section 14 of the Security
Agreement, this Note is secured by a security interest granted to the Holder
pursuant to a Security Agreement, as delivered by Borrower to
Holder.
ARTICLE
VI
MISCELLANEOUS
6.1 Failure or Indulgence Not
Waiver. No failure or delay on the part of the parties hereto
in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
6.2 Notices. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the first business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be: (i) if to the Borrower to: New
Generation Biofuels Holdings, Inc., 5850 Waterloo Road, Suite 140, Columbia, MD
21045, attention Dane Saglio, facsimile: (443) 638-0277, with a copy by fax only
to (which shall not constitute notice) to: Fredrikson & Byron, P.A. 200
South Sixth Street, Suite 4000, Minneapolis, MN 55402, facsimile: (612)
492-7077, and (ii) if to the Holder, to the name, address and facsimile number
set forth on the front page of this Note, with a copy (which shall not
constitute notice) by fax only to Grushko & Mittman, P.C., 515 Rockaway
Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.
6.3 Amendment
Provision. The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or
supplemented.
6.4 Assignability. This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns. The Borrower may not assign its obligations under this
Note.
6.5 Cost of
Collection. If default is made in the payment of this Note,
Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.
6.6 Governing
Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to conflicts of
laws principles that would result in the application of the substantive laws of
another jurisdiction. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement must be brought
only in the civil or state courts of New York or in the federal courts located
in the State and county of New York. Both parties and the individual
signing this Agreement on behalf of the Borrower agree to submit to the
jurisdiction of such courts. The prevailing party shall be entitled
to recover from the other party its reasonable attorney’s fees and
costs. In the event that any provision of this Note is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or unenforceability of any other provision of this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Borrower in any other
jurisdiction to collect on the Borrower’s obligations to Holder, to realize on
any collateral or any other security for such obligations, or to enforce a
judgment or other decision in favor of the Holder. This Note shall be deemed an
unconditional obligation of Borrower for the payment of money and, without
limitation to any other remedies of Holder, may be enforced against Borrower by
summary proceeding pursuant to New York Civil Procedure Law and Rules Section
3213 or any similar rule or statute in the jurisdiction where enforcement is
sought. For purposes of such rule or statute, any other document or
agreement to which Holder and Borrower are parties or which Borrower delivered
to Holder, which may be convenient or necessary to determine Holder’s rights
hereunder or Borrower’s obligations to Holder are deemed a part of this Note,
whether or not such other document or agreement was delivered together herewith
or was executed apart from this Note.
6.7 Waiver of Jury
Trial. Borrower (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 Borrower or Holder,
or any successor or assign of Borrower or Holder, on or with respect to this
Note, or which in any way relates, directly or indirectly, to the obligations of
Borrower 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. BORROWER
AND HOLDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT,
ACTION, OR PROCEEDING. Borrower 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 Borrower if this provision were not part of their agreement.
6.8 Maximum
Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum rate permitted by applicable law. In the event
that the rate of interest required to be paid or other charges hereunder exceed
the maximum rate permitted by applicable law, any payments in excess of such
maximum rate shall be credited against amounts owed by the Borrower to the
Holder and thus refunded to the Borrower.
6.9 Non-business
Days. Whenever any payment or any action to be made
shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of New York, such payment may be due or action shall be required on the
next succeeding business day and, for such payment, such next succeeding day
shall be included in the calculation of the amount of accrued interest payable
on such date.
6.10 Facsimile
Signature. In the event that the Borrower’s signature is
delivered by facsimile transmission, PDF, electronic signature or other similar
electronic means, such signature shall create a valid and binding obligation of
the Borrower with the same force and effect as if such signature page were an
original thereof.
6.11 Shareholder
Status. The Holder shall not have rights as a shareholder of
the Borrower with respect to unconverted portions of this
Note. However, the Holder will have the rights of a shareholder of
the Borrower with respect to the shares of Common Stock to be received after
delivery by the Holder of a Conversion Notice to the Borrower.
[THE
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by an authorized officer as of the
_____ day of January, 2011.
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NEW
GENERATION BIOFUELS
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HOLDINGS,
INC.
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By:
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Name:
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Title:
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WITNESS:
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[Signature Page to
Note]
EXHIBIT A - NOTICE OF
CONVERSION
(To be
executed by the Registered Holder in order to convert the Note)
The
undersigned hereby elects to convert $_________ of the principal and $_________
of the interest due on the Note issued by NEW GENERATION BIOFUELS HOLDINGS, INC.
on January___, 2011 into Shares of Common Stock of NEW GENERATION BIOFUELS
HOLDINGS, INC. (the “Borrower”) according to the
conditions set forth in such Note, as of the date written below.
Date of
Conversion:____________________________________________________________________
Conversion
Price:______________________________________________________________________
Number of Shares of Common Stock Beneficially Owned on
the Conversion Date: Less than 5% of the outstanding Common Stock of NEW
GENERATION BIOFUELS HOLDINGS, INC.
Shares To
Be
Delivered:_________________________________________________________________
Signature:____________________________________________________________________________
Print
Name:__________________________________________________________________________
Address:_____________________________________________________________________________
____________________________________________________________________________
The
undersigned represents that the representations and warranties contained in
Section 4 of the Subscription Agreement are true and accurate as of the Date of
Conversion above set forth.
________________________________________
Print
Name