Document:

STOCK
PURCHASE AGREEMENT

     

    This
STOCK PURCHASE AGREEMENT (“Agreement”) is
entered into on April 28, 2009, by and among Paramount Trading Ltd., a Nevada
corporation (the “Buyer”), and Minn
Shares Inc., a Minnesota corporation (the “Company”), and solely
for the purpose of agreeing with Sections 2.4, 2.8, 2.9, 2.10, 2.14, 2.15, 2.18
and 6.5 hereof, Cecilia M. Denning (f/k/a Cecilia M. Luikens) (the “Liquidating
Agent”).

     

    Recitals

     

    1.           On
September 11, 2001, shareholders of the Company approved a Plan of Liquidation
and Dissolution of the Company (the “Plan of
Liquidation”). Under a Liquidating Agent Agreement dated September 11,
2001 between the Company and the Liquidating Agent (the “Liquidating Agent
Agreement”), the Liquidating Agent is conducting the liquidation of the
Company’s assets and the distribution of net assets to the shareholders of the
Company. The Company filed a Notice of Intent to Dissolve with the Minnesota
Secretary of State on September 13, 2001, but as of the date hereof has not
filed Articles of Dissolution with the Minnesota Secretary of
State.

     

    2.           The
Company desires to sell, and the Buyer desires to purchase, upon the terms and
conditions stated in this Agreement an aggregate of 5,950,000 shares of common
stock, par value $0.01 per share (the “Common Stock”), of
the Company, constituting approximately 51% of the issued and outstanding Common
Stock of the Company on a fully diluted basis as of and immediately after the
Closing (as defined in Section 1).

     

    3.           Prior
to the Closing, the Company will hold a meeting of the shareholders of the
Company (the “Shareholder Meeting”)
at which it will ask the shareholders to abandon the Plan of Liquidation,
terminate the Liquidating Agent Agreement, revoke the dissolution proceedings of
the Company, and approve the sale of stock to the Buyer.

     

    4.           If
any assets remain for distribution to shareholders (“distributable
assets”), then prior to the Closing the Company will make a final
distribution of distributable assets to its shareholders, completing the role
and duties of the Liquidating Agent under the Liquidating Agent
Agreement.

     

    Agreement

     

    In
consideration of the representations, warranties and agreements contained herein
and for other good and valuable consideration, the adequacy and sufficiency of
which is hereby acknowledged, the parties agree as follows:

     

    1.      
    Purchase and Sale of Shares; Closing.

     

    1.1      
  Purchase
and Sale. Subject to the terms and conditions of this Agreement, the
Buyer agrees to purchase at the Closing, and the Company agrees to sell and
issue to the Buyer at the Closing, 5,950,000 shares of Common Stock (the “Shares”) at an
aggregate purchase price of $20,000.

     

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    
       

      1.2        
Closing. The
purchase and sale of the Shares shall take place at the offices of Messerli
& Kramer, 1400 Fifth Street Towers, 100 South Fifth Street, Minneapolis, MN
55402, at 10:00 a.m. on or before the second business day after the Shareholder
Meeting, or at such other time or place as the parties may mutually agree upon
(the “Closing”). At the
Closing, the Buyer will deliver to the Company the purchase price by certified
check or wire transfer, and the Company will deliver to the Buyer a certificate
representing
the Shares the Buyer is purchasing. In addition, at the Closing, the Company
will deliver to the Buyer (i) evidence of the election of Richard E. Gilbert,
Aaron W. Soderberg and Joseph H. Whitney as directors of the Company effective
on the Closing Date, (ii) a letter of resignation of Lawrence P. Grady as the
sole director and officer of the Company effective on the Closing Date, (iii)
evidence as of a recent date of the good standing and corporate existence of the
Company issued by the Minnesota Secretary of State and (iv) a certificate signed
by the Liquidating Agent to the effect that the Company has made a final
distribution of distributable assets to its shareholders.

    

     

    2.          
Representations and Warranties of the Company.
The Company hereby represents and warrants to the Buyer as
follows:

     

    2.1         Organization, Good Standing
and Qualification. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Minnesota. The
Company has delivered to the Buyer true and complete copies of the Articles of
Incorporation of Company as now in effect (the “Company Charter”) and
the Bylaws of the Company as now in effect (the “Company Bylaws”).
Subject to the abandonment of the Plan of Liquidation, termination of the
Liquidating Agent Agreement and revocation of the Company’s dissolution
proceedings, the Company has all requisite corporate power and authority to own
and operate its properties and assets, to execute and deliver this Agreement,
and to carry on its business as presently conducted. The Company is duly
qualified to do business and is in good standing in each jurisdiction in which
the nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
be so qualified would not have a material adverse effect on the Company, or its
business or properties, taken as a whole. Except as disclosed in Schedule 2.1,
the Company does not own, directly or indirectly, any capital stock, membership
interest, partnership interest, joint venture interest or other equity interest
in any person.

     

    2.2         Capitalization. The
authorized capital stock of the Company consists of 5,000,000 shares of
undesignated stock, par value $0.01 per share, none of which are issued and
outstanding; and 15,000,000 shares of Common Stock, of which 5,713,455 shares
are issued and outstanding. The Company has no outstanding options, warrants or
other rights to acquire any capital stock, or securities convertible or
exchangeable or exercisable for capital stock of the Company (together, “Convertible
Securities”). The Company has no agreement or commitment to sell or issue
any shares of capital stock or Convertible Securities, except as contemplated by
this Agreement, and the Company has no outstanding contractual obligations to
repurchase, redeem or otherwise acquire any shares of capital stock or
convertible securities of the Company. All issued and outstanding shares of the
Company’s capital stock (i) have been duly authorized and validly issued, (ii)
are fully paid and nonassessable, (iii) are not subject to or issued in
violation of any option, preemptive right, right of first refusal or other
similar right and (iv) were issued pursuant to valid exemptions under federal
and state securities laws. There are no voting trusts, proxy or shareholder
agreements or other agreements or understandings of any kind relating to the
Company’s securities to which the Company or any of its executive officers and
directors is a party or as to which the Company otherwise has knowledge. There
are not any bonds, debentures, notes or other indebtedness of the Company having
the right to vote on any matters on which holders of the Company’s Common Stock
may vote. The Shares that are being purchased by the Buyer hereunder will be
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances, other than restrictions on transfer under applicable state and
federal securities laws.

     

    2.3         Authorization; Binding
Obligations. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization of this
Agreement and the performance of all obligations of the Company hereunder at the
Closing has been taken or will be taken prior to the Closing, subject to
approval by the shareholders at the Shareholder Meeting of the abandonment of
the Plan of Liquidation, the termination of the Liquidating Agent Agreement and
the revocation of the Company’s
dissolution proceedings. This Agreement, when executed and delivered, will be a
valid and binding obligation of the Company enforceable in accordance with its
terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors’ rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.

     

    
      
        
        

      

      
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    2.4         Financial Statements;
Liabilities. The unaudited balance sheet as of December 31, 2008 and
unaudited statement of receipts and disbursements for the period ended December
31, 2008, as delivered to the Buyer, are based on information contained in the
books and records of the Company. The Company has no material liability or
obligation, absolute or contingent, other than its (i) obligations under the
Liquidating Agent Agreement and (ii) liability for costs incurred or to be
incurred in connection with this Agreement and the transactions contemplated
hereby (excluding the final distribution of distributable assets, if any) and
the Shareholders Meeting (“Transaction Costs”).
The Company has no indebtedness for borrowed money that the Company has directly
or indirectly created, incurred, assumed or guaranteed or with respect to which
the Company has become directly or indirectly liable.

     

    2.5     
   Obligations of or to Related
Parties. There are no obligations of the Company to officers, directors
or employees of the Company or, to the Company’s knowledge, to any members of
their immediate families or other affiliates. To the Company’s knowledge, none
of the officers, directors or employees of the Company or, to the Company’s
knowledge, any members of their immediate families or other affiliates, are
indebted to the Company or have any direct or indirect ownership interest in any
firm, corporation or other entity with which the Company is affiliated or with
which the Company has a business relationship, or any firm, corporation or other
entity that competes with the Company. Except as disclosed in Schedule 2.5, no
officer, director or employee of the Company or, to the Company’s knowledge, any
member of their immediate families or other affiliates, is, directly or
indirectly, interested in or a party to any contract with the Company. The
Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.

     

    2.6         Title to Properties and
Assets; Liens. The Company does not own any real property. The Company
has good and marketable title to all of its properties and assets used in the
conduct of its business, in each case subject to no mortgage, pledge, lien,
lease, encumbrance or charge, other than (i) those resulting from taxes that
have not yet become delinquent, (ii) liens and encumbrances that do not
materially detract from the value of the property subject thereto or materially
impair the operations of the Company and (iii) those that have otherwise arisen
in the ordinary course of business. With respect to the property and assets it
leases, the Company is in compliance with such leases in all material respects
and, to the Company’s knowledge, holds a valid leasehold interest free of any
liens, claims or encumbrances.

     

    2.7         Patents and
Trademarks. The Company does not own, use or license any patents, patent
applications, trademarks, service marks, trade names, copy rights, trade
secrets, licenses and rights with respect to the foregoing in its business as
presently conducted.

     

    2.8         Compliance with Other
Instruments. The Company is not in violation or default of any term of
the Company Charter, Company Bylaws or Liquidating Agent Agreement, or in any
material respect of any mortgage, indenture, contract, agreement, instrument or
contract to which it is party or by which it is bound or of any judgment,
decree, order, writ or, to its knowledge, any statute, rule or regulation
applicable to the Company that would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects of
the Company. The execution and delivery of, and the performance of and
compliance with the transactions contemplated by, this Agreement will not, with
or without the passage of time or giving of notice, result in any such material
violation, or be in conflict with or constitute a default under any such term,
or result in the creation of any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company or the suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to the Company, the business or operations
of the Company or any of the assets or properties of the Company, except for
such results that would not materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company.

    
      
         

      

      
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    2.9         Litigation. There is
no action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or the Liquidating Agent
that questions the validity or enforceability of this Agreement or the right of
the Company to consummate the transactions contemplated hereby. There is no
action, suit, proceeding or investigation pending or, to the Company’s
knowledge, currently threatened against the Company or the Liquidating Agent
that might result, either individually or in the aggregate, in any material
adverse change in the assets, condition, affairs or prospects of the Company,
financial or otherwise, or any change in the current equity ownership of the
Company. Except as set forth in the Company’s filings with the SEC, neither the
Company nor any director or officer (in such capacity) of the Company is a party
or subject to the provisions of any order, writ, injunction, judgment or decree
of any court or government agency or instrumentality.

     

    2.10       Tax Returns and
Payments. The Company has timely filed all tax returns (federal, state
and local) required to be filed by it. All taxes shown to be due and payable on
such returns, any assessments imposed, and, to the Company’s knowledge, all
other taxes due and payable by the Company on or before the Closing have been
paid or will be paid prior to the time they become delinquent. The Company has
not been advised (i) that any of the tax returns of the Company have been or are
being audited as of the date hereof or (ii) of any deficiency in assessment or
proposed judgment to its federal, state or other taxes. The Company has no
knowledge of any liability of any tax to be imposed upon the properties or
assets of the Company as of the date of this Agreement that is not adequately
provided for.

     

    2.11       Employees. The
Company has no employees, independent contractors or other persons providing
services to it, other than the Liquidating Agent pursuant to the Liquidating
Agent Agreement. There is no collective bargaining agreement or other labor
union agreement to which the Company is a party or by which it is bound. No
employee has any agreement or contract, written or verbal, regarding his
employment. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan, incentive
plan, profit sharing or defined benefit plan, retirement agreement or other
employee compensation plan or agreement.

     

    2.12       Registration
Rights. The Company is presently not under any obligation, and has not
granted any rights, to register any of the Company’s presently outstanding
securities or any of its securities that may hereafter be issued under the
Securities Act of 1933, as amended (the “Securities
Act”).

     

    2.13       Compliance with Laws;
Consents. The Company is in compliance with all applicable laws,
statutes, ordinances, rules, regulations, orders or restriction, including those
relating to occupational health and safety and the environment, except for
instances of noncompliance that have not and would not materially and adversely
affect the business, assets, liabilities, financial condition, operations or
prospects of the Company. The Company has not received any written communication
during the past three years from a governmental entity or agency that alleges
that the Company is not in compliance in any material respect with any
applicable law, statute, regulation or order. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of, and the performance of the transactions
contemplated by, this Agreement, except such as has been duly and validly
obtained or filed.

     

    2.14       Full Disclosure. All
disclosures provided to the Buyer regarding the Company, its business and the
transactions contemplated hereby, furnished by or on behalf of the Company
(including the
Company’s representations and warranties set forth herein) are true and correct
and do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.

    
      
         

      

      
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    2.15      
Absence of
Changes. Since December 31, 2008, the Company has not engaged in any
business activities other than for the purpose of collecting and distributing it
assets, paying, satisfying and discharging any existing debts and obligations
and doing all other acts required to liquidate and wind up its business and
affairs. Since December 31, 2008, there have not been any changes in the assets
and liabilities of the Company, except for the incurrence of Transaction Costs
or as disclosed in Schedule 2.15.

     

    2.16       SEC Reporting; Investment
Company. The Company is not subject to the reporting requirements under
the Securities Act or the Securities Exchange Act of 1934. The Company is not an
“investment company,” or a company “controlled” by an “investment company,”
within the meaning of the Investment Company Act of 1940, as
amended.

     

    2.17       Minute Books. The
copy of the minute books of the Company provided to the Buyer contains minutes
of all meetings of directors and shareholders and all actions by written consent
without a meeting by the directors and shareholders since the date of
incorporation and accurately reflects all actions by the directors and
shareholders with respect to all transactions referred to in such minutes in all
material respects.

     

    2.18       Shareholders.
Schedule 2.18 hereto contains a true and complete list of the names of the
record holders of all of the outstanding shares of Common Stock, together with
the number of shares held, and the addresses last provided to the Company by
such record holders.

     

    2.19       Foreign Corrupt
Practices. Neither the Company, nor to the knowledge of the Company, any
agent or other person acting on behalf of the Company, has (i) directly or
indirectly, used any corporate funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political
parties or campaigns from corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of
which the Company is aware) which is in violation of law, or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

     

    2.20       Finder’s Fee. The
Company has not incurred nor will incur, directly or indirectly, any liability
for any broker’s, finder’s or agent’s fees or commissions (whether payable in
cash, in equity securities or by a combination thereof) in connection with this
Agreement.

     

    2.21       Application of Takeover
Protections. The Company has taken all necessary action, if any, in order
to render inapplicable any control share acquisition, poison pill or other
similar anti-takeover provisions under the Company Charter, Company Bylaws or
the laws of its State of incorporation that is or could become applicable to the
Buyers as a result of the issuance and ownership of the Shares, except that the
Company has not taken action to render inapplicable the business combination
provisions of the Minnesota Business Corporations Act, Chapter 302A, Minnesota
Statutes.

     

    2.22       Shareholder Approval.
The transactions contemplated by this Agreement are subject to approval of the
Company’s shareholders. A Shareholder Meeting will be convened to obtain such
approval as provided in Section 4.1.

    
      
         

      

      
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    3.           Investment Representations of Buyer.
The Buyer acknowledges and represents as follows:

     

    3.1    
    Receipt of
Information. The Buyer has been given access to full and complete
information regarding the Company and has utilized such access to his
satisfaction for the purpose of obtaining information regarding the Company. The
Buyer has met with or been given reasonable opportunity to meet with
representatives of the Company for the purpose of obtaining all information
concerning the Company that he deems necessary to make an informed investment
decision. The foregoing, however, does not limit the representations and
warranties of the Company in Section 2 of this Agreement or the right of the
Buyer to rely thereon.

     

    3.2         Investment
Experience. The Buyer has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment in the Shares. The Buyer is in a financial position to
hold the Shares for an indefinite period of time and is able to bear the
economic risk and withstand a complete loss of his investment in the
Shares.

     

    3.3         High Degree of Risk.
The Buyer recognizes that an investment in the Shares is highly speculative and
involves a high degree of risk, including, but not limited to, the risk of
economic losses from operations of the Company and the loss of his entire
investment in the Company.

     

    3.4         Restricted
Securities. The Buyer understands that there are substantial restrictions
on the transfer of the Shares. The Buyer represents and agrees that he will not
sell or otherwise transfer the Shares without registration under the Securities
Act or an exemption therefrom.

     

    3.5         Purchase Entirely for Own
Account. The Buyer is acquiring the Shares for his own account and for
investment, and has made no agreement with others regarding the resale or
distribution of the Shares.

     

    3.6         Accredited Investor.
The Buyer is an accredited investor as defined in Rule 501 of Regulation D under
Securities Act.

     

    3.7         Reliance Upon Buyers’
Representations. The Buyer understands that the Shares are not being
registered under the Securities Act or state securities laws pursuant to
exemptions from the Securities Act and such laws, and that the Company’s
reliance upon such exemptions is predicated on the representations of Buyer
contained herein.

     

    3.8         Finder’s Fee. The
Buyer has not incurred nor will incur, directly or indirectly, any liability for
any broker’s, finder’s or agent’s fees or commissions (whether payable in cash,
in equity securities or by a combination thereof) in connection with this
Agreement.

     

    4. 
         Additional
Agreements.

     

    4.1    
    Shareholder Meeting.
The Company will take all action necessary to call, convene and hold a meeting
of its shareholders to consider and vote upon (i) the abandonment of the Plan of
Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement so as to permit the consummation of the
transactions contemplated hereby. The Shareholder Meeting shall be held as
promptly as practicable after mailing of the Company’s proxy statement relating
to the Shareholder Meeting to its shareholders. The Board of Directors of
Company shall recommend that its shareholders approve and adopt each of such
proposals and shall use commercially reasonable efforts to obtain the requisite
affirmative vote of the shareholders.

    
      
         

      

      
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    4.2         Board of Directors.
At the Closing, the Company shall increase the size of the Board of Directors to
3 directors and cause Richard E. Gilbert, Aaron W. Soderberg and Joseph H.
Whitney to be elected to the Board of Directors of the Company and accept the
resignation of the sole director and officer of the Company as provided in
Section 1.2.

     

    4.3         Notice of Revocation.
Immediately after shareholder approval of the revocation of the Company’s
dissolution proceedings, the Company shall file a notice of revocation with the
Minnesota Secretary of State, in accordance with the relevant provisions of the
Minnesota Business Corporation Act.

     

    5.          Conditions
to Closing.

     

    5.1       
 Conditions to
the Buyer’s Obligations. The obligation of the Buyer to purchase the
Shares is subject to satisfaction of the following conditions at or before the
Closing:

     

    5.1.1           The
Company shall have performed and complied with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.

     

    5.1.2           The
representations and warranties of the Company contained in Section 2 shall be
true and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

     

    5.1.3           Prior
to the Closing, the Company shall have completed the sale of all of its
remaining portfolio securities and the final distribution of its distributable
assets to the shareholders.

     

    5.1.4           The
shareholders of the Company shall have approved (i) the abandonment of the Plan
of Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement.

     

    5.1.5           Robins,
Kaplan, Miller & Ciresi LLP, legal counsel to the Company, shall have
delivered an opinion to the Buyer with respect to the following matters (which
opinion may contain customary exclusions and limitations that are reasonably
acceptable to counsel for the Purchasers):

     

    5.1.5.1     The
Company is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Minnesota. The Company has all corporate
power and authority necessary to own its properties and to conduct its business
as, to the knowledge of such counsel, it is presently conducted.

     

    5.1.5.2     The
Company has the requisite corporate power and authority to execute, deliver and
perform its obligations under the Agreement. The Agreement has been duly
authorized by all necessary corporate action on the part of the
Company.

     

    5.1.5.3     The
Agreement, when executed and delivered by the Company, will constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with its terms.

    
      
         

      

      
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    5.1.5.4      The
authorized capital stock of the Company consists of 5,000,000 shares of
undesignated stock, none of which, as of the Closing, are issued and
outstanding; and 15,000,000 shares of Common Stock, of which, as of the Closing,
5,713,455 shares are issued and outstanding. To the knowledge of such counsel,
except as described in the Agreement (including the schedules and exhibits
thereto), there are no outstanding options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or issuance from
the Company of any shares of the capital stock of the Company.

     

    5.1.5.5      The
Shares, when issued and paid for in accordance with this Agreement, will be
validly issued, fully paid and nonassessable, and will be free of any liens or
encumbrances; provided, however, that the Shares may be subject to restrictions
on transfer under applicable state and federal securities laws.

     

    5.1.5.6      The
execution and delivery of the Agreement by the Company will not result in (i) a
violation of the Company Charter or Company Bylaws (in each case, as amended or
restated) or (ii) to the knowledge of such counsel, a violation or default under
any agreement known to such counsel to which the Company is a party or by which
any of its properties or assets are bound.

     

    5.1.5.7      To
the knowledge of such counsel, there is no other action, suit, proceeding or
investigation pending against the Company before any court or administrative
agency, and the Company has not received any written threat
thereof.

     

    5.2     
    Conditions to the Company’s
Obligations. The obligation of the Company to sell the Shares to the
Buyer is subject to satisfaction of the following conditions at or before the
Closing:

     

    5.2.1       The
representations and warranties of the Buyer contained in Section 3 shall be true
and correct on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

     

    5.2.2       The
shareholders of the Company shall have approved (i) the abandonment of the Plan
of Liquidation and the termination of the Liquidating Agent Agreement, (ii) the
revocation of the Company’s dissolution proceedings, and (iii) the sale of
Shares to the Buyer under this Agreement.

     

    6.        
   Miscellaneous.

     

    6.1           Amendment and Waiver.
No amendment to this Agreement or waiver of the rights or obligations of the
parties shall be effective unless in writing signed by the parties.

     

    6.2           Governing Law. This
Agreement is governed by the laws of Minnesota without regard to conflicts of
laws principles. Any legal proceeding related to this Agreement shall be brought
in an appropriate Minnesota court, and each of the parties hereto hereby
consents to the exclusive jurisdiction of the courts of the State of Minnesota
for this purpose.

     

    6.3           Severability. If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

    
      
         

      

      
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    6.4           Entire Agreement.
This Agreement contains the entire agreement and understanding of the parties
concerning the subject matter of this Agreement and supersedes any prior
agreements or representations, whether oral or written.

     

    6.5           Survival of
Warranties. The warranties, representations and agreements of the parties
contained in or made pursuant to this Agreement shall survive the execution and
deliver of this Agreement and the Closing.

     

    6.6           Counterparts. This
Agreement may be executed by facsimile signature and in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

     

    [signature
page follows]

    
      
         

      

      
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    IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first written above.

     

    The
Company: 

     

    MINN
SHARES INC.

     

    
      	
              By: 

            	
              /s/ Lawrence P. Grady

            	 
      
	 
      	
              Lawrence
      P. Grady

            	 
      
	 
      	
              President

            	 
      

    

     

    
      
        	
                The
      Buyer:

              	 
      
	 
      	 
      
	
                PARAMOUNT
      TRADING LTD.

              	 
      
	 
      	 
      	 
      
	
                By: 

              	
                /s/
      Joseph Whitney

              	 
      
	 
      	
                Joseph
      Whitney

              	 
      
	 
      	
                Chairman
      and Chief Executive Officer

              	 
      

      

    

     

    The
undersigned executes and delivers this Agreement for the sole purpose of
agreeing with the terms of Sections 2.4, 2.8, 2.9, 2.10, 2.14, 2.15, 2.18 and
6.5.

    

    
      
        	
                The
      Liquidating Agent:

              	 
      
	 
      	 
      	 
      
	
                By: 

              	
                /s/
      Cecilia M. Denning

              	 
      
	 
      	
                Cecilia
      M. Denning

              	 
      

      

    

     

    
      
         

      

      
        -10-Unassociated Document

    Exhibit
4.1

    AMERICAN
DG ENERGY INC.

     

    WARRANT
TO PURCHASE COMMON STOCK

     

    To
Purchase [_______] Shares of Common Stock

     

    Date of
Issuance: December 14, 2010

     

    VOID AFTER DECEMBER_14,
2015

     

    THIS
CERTIFIES THAT, for value received, [______________], or permitted registered
assigns (the “Holder”),
is entitled to subscribe for and purchase at the Exercise Price (defined below)
from American DG Energy Inc., a Delaware corporation (the “Company”), up to
[____________] shares of the common stock of the Company, par value $0.001 per
share (the “Common
Stock”).  This warrant is one of a series of warrants issued by
the Company as of the date hereof (individually a “Warrant”; collectively, the
“Warrants”) pursuant to
those certain subscription agreements between the Company and the investors
identified therein, dated as of December 9, 2010 (collectively, the “Subscription
Agreement”).

     

    1.           DEFINITIONS.  Capitalized
terms used herein but not otherwise defined herein shall have their respective
meanings as set forth in the Subscription Agreement.  As used herein,
the following terms shall have the following respective meanings:

     

    (A)           “Eligible Market” means any of
the New York Stock Exchange, the NYSE Amex, The NASDAQ Global Market, The NASDAQ
Global Select Market or The NASDAQ Capital Market.

     

    (B)           “Exercise Period” shall mean
the period commencing six (6) months after the date hereof and ending 5:00 P.M.
New York City time on December 14, 2010, unless sooner terminated as provided
below.

     

    (C)           “Exercise Price” shall mean
$3.25 per share, subject to adjustment pursuant to Section 4
below.

     

    (D)           “Exercise Shares” shall mean
the shares of Common Stock issuable upon exercise of this Warrant.

     

    (E)           “Trading Day” shall mean (a)
any day on which the Common Stock is listed or quoted and traded on its primary
Trading Market, (b) if the Common Stock is not then listed or quoted and traded
on any Eligible Market, then a day on which trading occurs on the OTC Bulletin
Board (or any successor thereto), or (c) if trading does not occur on the OTC
Bulletin Board (or any successor thereto), any Business Day.

     

    (F)           “Trading Market” shall mean the
NYSE Amex or any other Eligible Market, or any national securities exchange,
market or trading or quotation facility on which the Common Stock is then listed
or quoted.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           EXERCISE OF
WARRANT.  The rights represented by this Warrant may be
exercised in whole or in part at any time during the Exercise Period, by
delivery of the following to the Company at its address set forth on the
signature page hereto (or at such other address as it may designate by notice in
writing to the Holder):

     

    (A)           An
executed Notice of Exercise in the form attached hereto;

     

    (B)           Payment
of the Exercise Price either (i) in cash or by check, or (ii) pursuant to Section 2.1 below;
and

     

    (C)           This
Warrant.

     

    Execution
and delivery of the Notice of Exercise shall have the same effect as
cancellation of the original Warrant and issuance of a new Warrant evidencing
the right to purchase the remaining number of Exercise Shares, if
any.

     

    Certificates
for Exercise Shares purchased hereunder shall be transmitted by the Company’s
transfer agent (the “Transfer
Agent”) to the Holder by crediting the account of the Holder’s prime
broker with the Depository Trust & Clearing Corporation through its Deposit
Withdrawal Agent Commission system if the Company is a participant in such
system, and otherwise by physical delivery to the address specified by the
Holder in the Notice of Exercise within three (3) business days from the
delivery to the Company of the Notice of Exercise, surrender of this Warrant and
payment of the aggregate Exercise Price as set forth above.  This
Warrant shall be deemed to have been exercised on the date the latest of the
Warrant, Notice of Exercise and Exercise Price are received by the
Company.

     

    The
person in whose name any certificate or certificates for Exercise Shares are to
be issued upon exercise of this Warrant shall be deemed to have become the
holder of record of such shares on the date on which this Warrant was
surrendered and payment of the Exercise Price was made, irrespective of the date
of delivery of such certificate or certificates, except that, if the date of
such surrender and payment is a date when the stock transfer books of the
Company are closed, such person shall be deemed to have become the holder of
such shares at the close of business on the next succeeding date on which the
stock transfer books are open.

     

    Subject
to Section 2.4,
to the extent permitted by law, the Company’s obligations to issue and deliver
Exercise Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any person or entity or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by the Holder or any other person or entity of any
obligation to the Company or any violation or alleged violation of law by the
Holder or any other person or entity, and irrespective of any other circumstance
which might otherwise limit such obligation of the Company to the Holder in
connection with the issuance of Exercise Shares.  Nothing herein shall
limit a Holder’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver Exercise Shares upon exercise of this Warrant as required
pursuant to the terms hereof.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.1           NET
EXERCISE.  If during the Exercise Period, the Holder is not
permitted to sell Exercise Shares pursuant to the Registration Statement (as
defined in the Subscription Agreement) or pursuant to another registration
statement that has been declared effective under Securities Act of 1933, as
amended, and the fair market value of one share of the Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in lieu
of exercising this Warrant by payment of cash or by check, the Holder may elect
to receive shares equal to the value (as determined below) of this Warrant (or
the portion thereof being canceled) by surrender of this Warrant at the
principal office of the Company together with the properly endorsed Notice of
Exercise in which event the Company shall issue to the Holder a number of shares
of Common Stock computed using the following formula:

     

    
      
        	
                X =
      Y (A-B)

              
	
                    
      ——

              
	
                A

              

      

       

    

    
      	
              Where

            	
              X =
      the number of Exercise Shares to be issued to the
  Holder

            

    

     

    
      	
               
      

            	
              Y
      =

            	
              the
      number of shares of Common Stock purchasable under this Warrant or, if
      only a portion of this Warrant is being exercised, the portion of this
      Warrant being canceled (at the date of such
  calculation)

            

    

     

    
      	
               
      

            	
              A
      =

            	
              the
      fair market value of one share of the Company’s Common Stock (at the date
      of such calculation)

            

    

     

    
      	
               
      

            	
              B
      =

            	
              Exercise
      Price (as adjusted to the date of such
  calculation)

            

    

     

    For
purposes of the above calculation, the “fair market value” of one share of
Common Stock shall mean (i) the average of the closing sales prices for the
shares of Common Stock on the NYSE Amex or other Eligible Market where the
Common Stock is listed or traded as reported by Bloomberg Financial Markets (or
a comparable reporting service of national reputation selected by the Company
and reasonably acceptable to the Holder if Bloomberg Financial Markets is not
then reporting sales prices of such security) (collectively, “Bloomberg”) for the five (5)
consecutive trading days immediately prior to the Exercise Date, or (ii) if the
NYSE Amex is not the principal Trading Market for the shares of Common Stock,
the average of the reported sales prices reported by Bloomberg on the principal
Trading Market for the Common Stock during the same period, or, if there is no
sales price for such period, the last sales price reported by Bloomberg for such
period, or (iii) if neither of the foregoing applies, the last sales price of
such security in the over-the-counter market on the pink sheets or bulletin
board for such security as reported by Bloomberg, or if no sales price is so
reported for such security, the last bid price of such security as reported by
Bloomberg or (iv) if fair market value cannot be calculated as of such date on
any of the foregoing bases, the fair market value shall be as determined by the
Board of Directors of the Company in the exercise of its good faith
judgment.

     

    2.2           ISSUANCE OF NEW
WARRANTS.  Upon any partial exercise of this Warrant, the
Company, at its expense, will forthwith and, in any event within five business
days, issue and deliver to the Holder a new warrant or warrants of like tenor,
registered in the name of the Holder, exercisable during the balance of the
Exercise Period, in the aggregate, for the balance of the number of shares of
Common Stock remaining available for purchase under this
Warrant.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    2.3           PAYMENT OF TAXES AND
EXPENSES.  The Company shall pay any recording, filing, stamp
or similar tax which may be payable in respect of any transfer involved in the
issuance of, and the preparation and delivery of certificates (if applicable)
representing, (i) any Exercise Shares purchased upon exercise of this Warrant
and/or (ii) new or replacement warrants in the Holder’s name or the name of any
transferee of all or any portion of this Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance, delivery or registration of any
certificates for Exercise Shares or Warrants in a name other than that of the
Holder.  The Holder shall be responsible for all other tax liability
that may arise as a result of holding or transferring this Warrant or receiving
Exercise Shares upon exercise hereof.

     

    2.4           EXERCISE LIMITATIONS;
HOLDER’S RESTRICTIONS.  A Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance after
exercise, such Holder (together with such Holder’s affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 9.9% of
the number of shares of the Common Stock outstanding immediately after giving
effect to such issuance.  For purposes of this Section 2.4, the
number of shares of Common Stock beneficially owned by such Holder 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 the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by such Holder or any of its affiliates and
(B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other shares
of Common Stock or Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder
or any of its affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 2.4,
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith.  To the extent
that the limitation contained in this Section 2.4 applies,
the determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder) and of which a portion of this Warrant is
exercisable shall be in the sole discretion of a Holder, and the submission of a
Notice of Exercise shall be deemed to be each Holder’s  determination
of whether this Warrant is exercisable (in relation to other securities owned by
such Holder) and of which portion of this Warrant is exercisable, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such
determination.  For purposes of this Section 2.4, in
determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company’s Transfer Agent setting forth the number of shares of Common
Stock outstanding.  Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing to such
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,
including this Warrant, by such Holder or its affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.  The provisions of this Section 2.4 may be
waived by such Holder, at the election of such Holder, upon not less than 61
days’ prior notice to the Company, and the provisions of this Section 2.4 shall
continue to apply until such 61st day (or such later date, as determined by such
Holder, as may be specified in such notice of waiver).

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    3.           COVENANTS OF THE
COMPANY.

     

    3.1           COVENANTS AS TO EXERCISE
SHARES.  The Company covenants and agrees that all Exercise
Shares that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding, fully paid and
nonassessable, and free from all taxes, liens (other than those imposed by the
Holder) and charges with respect to the issuance thereof.  The Company
further covenants and agrees that the Company will at all times during the
Exercise Period, have authorized and reserved, free from preemptive rights, a
sufficient number of shares of Common Stock to provide for the exercise of the
rights represented by this Warrant.  If at any time during the
Exercise Period the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.

     

    3.2           NO
IMPAIRMENT.  Except and to the extent as waived or consented to
by the holder of the Warrants representing at least a majority of the number of
shares of Common Stock then subject to outstanding Warrants, the Company will
not, by amendment of its Certificate of Incorporation or through any
reorganization, transfer of assets, consolidation, merger, 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 to be observed or performed
hereunder by the Company, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may be necessary or appropriate in order to protect the exercise
rights of the Holder against impairment.

     

    3.3           NOTICES OF RECORD DATE AND
CERTAIN OTHER EVENTS.  In the event of any taking by the
Company of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, the Company shall mail to the Holder, at least twenty (20)
days prior to the date on which any such record is to be taken for the purpose
of such dividend or distribution, a notice specifying such date.  In
the event of any voluntary dissolution, liquidation or winding up of the
Company, the Company shall mail to the Holder, at least twenty (20) days prior
to the date of the occurrence of any such event, a notice specifying such
date.  In the event the Company authorizes or approves, enters into
any agreement contemplating, or solicits stockholder approval for any
Fundamental Transaction, as defined in Section 6 herein, the
Company shall mail to the Holder, at least twenty (20) days prior to the date of
the occurrence of such event, a notice specifying such date.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    4.           ADJUSTMENT OF EXERCISE PRICE
AND SHARES.

     

    (A)          In
the event of changes in the outstanding Common Stock of the Company by reason of
stock dividends, split-ups, recapitalizations, reclassifications, combinations
or exchanges of shares, separations, reorganizations, liquidations,
consolidation, acquisition of the Company (whether through merger or acquisition
of substantially all the assets or stock of the Company), or the like, the
number, class and type of shares available under this Warrant in the aggregate
and the Exercise Price shall be correspondingly adjusted to give the Holder of
this Warrant, on exercise for the same aggregate Exercise Price, the total
number, class, and type of shares or other property as the Holder would have
owned had this Warrant been exercised prior to the event and had the Holder
continued to hold such shares until the event requiring
adjustment.  The form of this Warrant need not be changed because of
any adjustment in the number of Exercise Shares subject to this
Warrant.

     

    (B)           If
at any time or from time to time the holders of all outstanding shares of Common
Stock of the Company (or any shares of stock or other securities at the time
receivable upon the exercise of this Warrant) pursuant to a dividend or
distribution declared by the Company (other than a dividend or distribution
covered in Section
4(A) above), shall have received or become entitled to receive, without
payment therefor:

     

    (I)           Common
Stock or any shares of stock or other securities which are at any time directly
or indirectly convertible into or exchangeable for Common Stock, or any rights
or options to subscribe for, purchase or otherwise acquire any of the foregoing
by way of dividend or other distribution;

     

    (II)         any
cash paid or payable otherwise than as a cash dividend; or

     

    (III)       
Common Stock or additional stock or other securities or property (including
cash) by way of spinoff, split-up, reclassification, combination of shares or
similar corporate rearrangement, then and in each such case, the Holder hereof
will, upon the exercise of this Warrant, be entitled to receive, in addition to
the number of shares of Common Stock receivable thereupon, and without payment
of any additional consideration therefor, the amount of stock and other
securities and property (including cash in the cases referred to in clauses (II)
and (III) above) which such Holder would hold on the date of such exercise had
such Holder been the holder of record of such Common Stock as of the date on
which holders of Common Stock received or became entitled to receive such shares
or all other additional stock and other securities and property.

     

    (C)          Upon
the occurrence of each adjustment pursuant to this Section 4, the
Company at its expense will, at the written request of the Holder, promptly
compute such adjustment in accordance with the terms of this Warrant and prepare
a certificate setting forth such adjustment, including a statement of the
adjusted Exercise Price and adjusted number or type of Exercise Shares or other
securities issuable upon exercise of this Warrant (as applicable), describing
the transactions giving rise to such adjustments and showing in detail the facts
upon which such adjustment is based.  Upon written request, the
Company will promptly deliver a copy of each such certificate to the Holder and
to the transfer agent for the Warrants, if other than  the
Company.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    5. 
          FRACTIONAL
SHARES.  No fractional shares shall be issued upon the exercise
of this Warrant as a consequence of any adjustment pursuant
hereto.  All Exercise Shares (including fractions) issuable upon
exercise of this Warrant may be aggregated for purposes of determining whether
the exercise would result in the issuance of any fractional
share.  If, after aggregation, the exercise would result in the
issuance of a fractional share, the Company shall, in lieu of issuance of any
fractional share, pay the Holder otherwise entitled to such fraction a sum in
cash equal to the product resulting from multiplying the then current fair
market value of an Exercise Share by such fraction.

     

    6.   
        FUNDAMENTAL
TRANSACTIONS.  If, at any time while this Warrant is
outstanding, (i) the Company effects any merger of the Company with or into
another entity and the Company is not the surviving entity, (ii) the Company
effects any sale of all or substantially all of its assets in one or a series of
related transactions, (iii) any tender offer or exchange offer (whether by the
Company or by another individual or entity and approved by the Company) is
completed pursuant to which holders of Common Stock are permitted to tender or
exchange their shares of Common Stock for other securities, cash or property or
(iv) the Company 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
as a result of a subdivision or combination of shares of Common Stock covered by
Section 4
above) (in any such case, a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the
right to receive the number of shares of Common Stock of the successor or
acquiring corporation or of the Company and any additional consideration (the
“Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event (disregarding any limitation on exercise
contained herein solely for the purpose of such determination).  For
purposes of any such exercise, the determination of the Exercise Price shall be
appropriately adjusted to apply to such Alternate Consideration based on the
amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the
Exercise Price among the Alternate Consideration in a reasonable manner
reflecting the relative value of any different components of the Alternate
Consideration.  If holders of Common Stock are given any choice as to
the securities, cash or property to be received in a Fundamental Transaction,
then the Holder shall be given the same choice as to the Alternate Consideration
it receives upon any exercise of this Warrant following such Fundamental
Transaction.  To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new warrant consistent with the
foregoing provisions and evidencing the Holder’s right to exercise such warrant
into Alternate Consideration.  Notwithstanding anything to the
contrary, in the event of a Fundamental Transaction, then the Company or any
successor entity shall at the Holder’s option, exercisable at any time
concurrently with or within thirty (30) days after the consummation of the
Fundamental Transaction, purchase this Warrant from the Holder by paying to the
Holder an amount of cash equal to the value of this Warrant as determined in
accordance with the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg L.P. using (i) a price per share of Common Stock equal to
the Volume-Weighted Average Price of the Common Stock for the Trading Day
immediately preceding the date of consummation of the applicable Fundamental
Transaction, (ii) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the remaining term of this Warrant as of the date of
consummation of the applicable Fundamental Transaction and (iii) an expected
volatility equal to the lesser of (1) the thirty (30) day volatility obtained
from the “HVT” function on Bloomberg L.P. determined as of the end of the
Trading Day immediately following the public announcement of the applicable
Fundamental Transaction or (2) 70%. The terms of any agreement pursuant to which
a Fundamental Transaction is effected shall include terms requiring any such
successor or surviving entity to comply with the provisions of this Section 6 and
ensuring that this Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    7.       
    NO STOCKHOLDER
RIGHTS.  Other than as provided in Section 3.3 or
otherwise herein, this Warrant in and of itself shall not entitle the Holder to
any voting rights or other rights as a stockholder of the Company.

     

    8.     
      TRANSFER OF
WARRANT.  Subject to applicable laws and the restriction on
transfer set forth in the Subscription Agreement, this Warrant and all rights
hereunder are transferable, by the Holder in person or by duly authorized
attorney, upon delivery of this Warrant and the form of assignment attached
hereto to any transferee designated by Holder.  The transferee shall
sign an investment letter in form and substance reasonably satisfactory to the
Company and its counsel. Any proposed transfer of all or any portion of this
Warrant in violation of the provisions of this warrant or the Subscription
Agreement shall be null and void.  Upon surrender of this Warrant and
delivery of an assignment, the Company shall execute and deliver a new Warrant
or Warrants in the name of the transferee or transferees, as applicable, and in
the denomination or denominations specified in such instrument of assignment,
and shall issue to the transferor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled.

     

    9.       
    LOST, STOLEN, MUTILATED OR
DESTROYED WARRANT.  If this Warrant is lost, stolen, mutilated
or destroyed, the Company may, on such terms as to indemnity or otherwise as it
may reasonably impose (which shall, in the case of a mutilated Warrant, include
the surrender thereof), issue a new Warrant of like denomination and tenor as
this Warrant so lost, stolen, mutilated or destroyed. Any such new Warrant shall
constitute an original contractual obligation of the Company.

     

    10.          NOTICES,
ETC.  All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt.  All communications shall be sent to
the Company at the address listed on the signature page hereto and to Holder at
the  applicable address set forth on the applicable signature page to
the Subscription Agreement or at such other address as the Company or Holder may
designate by ten (10) days advance written notice to the other parties
hereto.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    11.          ACCEPTANCE.  Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.

     

    12.          GOVERNING
LAW.  This Warrant and all rights, obligations and liabilities
hereunder shall be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.

     

    13.          AMENDMENT OR
WAIVER.  Any term of this Warrant may be amended or waived
(either generally or in a particular instance and either retroactively or
prospectively) with the written consent of the Company and the holders of the
Warrants representing at least two-thirds of the number of shares of Common
Stock then subject to outstanding Warrants.  Notwithstanding the
foregoing, (a) this Warrant may be amended and the observance of any term
hereunder may be waived without the written consent of the Holder only in a
manner which applies to all Warrants in the same fashion and (b) the number of
Exercise Shares subject to this Warrant and the Exercise Price of this Warrant
may not be amended, and the right to exercise this Warrant may not be waived,
without the written consent of the Holder.  The Company shall give
prompt written notice to the Holder of any amendment hereof or waiver hereunder
that was effected without the Holder’s written consent.  No waivers of
any term, condition or provision of this Warrant, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such term, condition or provision.

     

    [REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly
authorized officer as of December __, 2010.

     

    
      
        
          
            
              
                
                  	
                          AMERICAN
      DG ENERGY INC.

                        
	 
	
                          By:

                        	
                           
        

                        
	 
      	
                          Name:

                        
	 
      	
                          Title:

                        
	 
	
                          45
      First Avenue

                        
	
                          Waltham,
      Massachusetts
02451

                        

                

              

            

          

        

      

    

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    

    NOTICE OF
EXERCISE

     

    TO:         AMERICAN
DG ENERGY INC.

     

    (1)           [_]           The
undersigned hereby elects to purchase [__________] shares of the common stock,
par value $0.001 (the “Common
Stock”), of AMERICAN DG ENERGY INC. (the “Company”) pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.

     

    [_]           The
undersigned hereby elects to purchase [___________] shares of Common Stock of
the Company pursuant to the terms of the net exercise provisions set forth in
Section 2.1 of
the attached Warrant, and shall tender payment of all applicable transfer taxes,
if any.

     

    (2)           Please
issue the certificate for shares of Common Stock in the name of, and pay any
cash for any fractional share to:

     

    
      
        

      

    

     

    Print or
type name

     

    
      
 

    Social
Security or other Identifying Number

     

    
      
 

    Street
Address

     

    
      
        
 

    

    City
State Zip Code

     

    (3)           If
such number of shares shall not be all the shares purchasable upon the exercise
of the Warrants evidenced by this Warrant, a new warrant certificate for the
balance of such Warrants remaining unexercised shall be registered in the name
of and delivered to:

     

    Please
insert social security or other identifying
number:  ____________________

     

    
      
        

      

    

     

     (Please
print name and address)

     

    
      
 

    Dated:

     

    
      
        
          
            
              
                	 
      	
                             
  

                      
	 
      	
                        (Signature)

                      
	 
      	
                             
  

                      
	 
      	
                        (Print
      name)

                      

              

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ASSIGNMENT
FORM

     

    (To
assign the foregoing Warrant, execute this form and supply required
information.  Do not use this form to purchase shares.)

     

    FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Name:

                                	
                                   
        

                                
	 
      	
                                  (Please
      Print)

                                
	 	 
	
                                  Address:

                                	
                                      

                                
	 
      	
                                  (Please
      Print)

                                
	 	 
	
                                  Dated:  ____________________

                                	 
      
	 	 
	
                                  Holder’s
      Signature:                                                                

                                	 
      
	 	 
	
                                  Holder’s
      Address:                                                                

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatever.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.

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