Document:

Unassociated Document

    
      Exhibit
4.1

      

      THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT COVERING THIS NOTE, OR THE MAKER RECEIVES
AN OPINION OF COUNSEL SATISFACTORY TO THE MAKER THAT AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.

      

      SECURED
CONVERTIBLE PROMISSORY NOTE

       AND
SECURITY AGREEMENT

      

      
        	
                Number:
[_____]

              	
                Columbia,
      Maryland

              
	
                $[_____]

              	
                April
      [_], 2010

              

      

      

      FOR VALUE
RECEIVED, the
undersigned, New Generation Biofuels Holdings, Inc., a Florida corporation
having its principal office located at 5850 Waterloo Road, Suite 140, Columbia,
Maryland 21045 (“Maker”
or “Company”) or its
permitted assign, promises to pay to [INSERT NAME OF NOTE HOLDER],
(“Holder”),
on               ,
2010 (the “Maturity
Date”), the lesser of (i) the principal sum of [INSERT AMOUNT IN WORDS]
($[____]) plus interest on the outstanding principal balance and (ii) the
aggregate unpaid and unconverted principal amount hereunder plus interest on the
outstanding principal balance.

      

      1.           Rate of
Interest.  The outstanding principal amount of this Note from
the date hereof until such principal amount is paid in full or converted as
provided herein, shall bear simple interest at a rate of Ten Percent (10%) per
annum.  Interest shall be payable on the earlier of the Maturity Date
or on the date the principal amount is paid in full (including on the Conversion
Date, as defined below, if applicable), or at the election of the Holder,
interest on the portion of the principal amount being converted shall be paid on
the applicable Conversion Date, as provided in Section 4.  Interest
shall be calculated on a year of 360 days based upon the actual number of days
elapsed.

       

      2.           Method of
Payment.  Principal and interest shall be paid in lawful money
of the United States of America to the account of Holder at such account as
Holder may from time to time designate to the Maker in writing.

       

      3.           Prepayment.

       

      (a)           Optional
Prepayment.  The outstanding principal amount of this Note,
together with any unpaid interest accrued thereon, may be prepaid in its
entirety without penalty at the option of the Maker.

       

      (b)           Mandatory
Prepayment.

       

      (i)           Upon
the occurrence of an Event of Default (as defined in Section 6), the outstanding
principal of and all accrued interest on this Note shall be accelerated and
shall automatically become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are expressly waived by the
Maker, notwithstanding anything contained herein to the
contrary.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (ii)           The
Holder shall, at its sole option, have the right to require the Maker to pay the
outstanding principal of and all accrued interest on this Note upon the
occurrence of any of the following events:  (1)
Maker  closing on an agreement to effectuate any sale or other
disposition of all or substantially all of its assets, in one transaction or in
a series of transactions, (2) the Maker  closing on an agreement to
effectuate any consolidation or merger into another entity, or (3) any sale of a
majority of the outstanding equity of the Maker (or any other event that
constitutes a Change of Control of the Maker (as defined below)), in one
transaction or in a series of transactions other than a transaction triggering
the conversion.  Immediately upon the occurrence of either of the
events set forth in clauses (1) or (2) above, or immediately upon obtaining
knowledge that any person has entered into an agreement to effectuate, the event
set forth in clause (3) above, the Maker shall give written notice of such event
to the Holder.  “Change of Control” means any
person or “group” (within the meaning of Section 13(d)(3) of the Securities
Exchange Act of 1934 (the “Exchange Act”)) that is not currently a beneficial
owner of Maker’s stock, becoming the beneficial owner, directly or indirectly,
of outstanding shares of stock of Maker entitling such person or persons to
exercise 50% or more of the total votes entitled to be cast at a regular or
special meeting of the shareholders of the Company in the election of directors
(the term “beneficial owner” shall be determined in accordance with Rule 13d-3
of the Exchange Act), but excluding unexercised warrants with an exercise price
in excess of the then most recent closing sale price of the Company’s Common
Stock (as hereinafter defined).

       

      4.           Conversion.  At
any time prior to the Maturity Date, at the election of the Holder, all or any
portion of the outstanding principal amount due under the Note and/or accrued
and unpaid interest thereon shall be converted into that number of shares of
common stock of the Company (“Common Stock”) equal to the
quotient resulting from the division of (i) the amount being converted
(principal and interest) by (ii) $0.90 per
share, as adjusted as provided herein (the “Conversion
Price”).  Should the Holder so elect, any accrued but unpaid
interest on the portion of the Note being converted may be paid in cash at the
time of, and in lieu of, conversion of such interest into Common
Stock.

       

      (a)           Conversion
shall be effected by the surrender of this Note by the Holder, marked
“canceled,” at the principal corporate office of the Maker together with
Holder’s written notice to the Maker stating the amount to be converted (or the
entire outstanding balance, as applicable) and the name or names in which the
certificate or certificates for the Common Stock (the “Conversion Stock”) are to be
issued.  At the time of such conversion, the Maker shall issue and
deliver to the Holder a certificate or certificates for the number of shares of
Conversion Stock to which the Holder is entitled.  Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date the Maker receives the cancelled Note and the Holder’s conversion
notice (the “Conversion
Date”), and the persons entitled to receive the Conversion Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such Conversion Stock as of such date.  No further interest
shall accrue after the Conversion Date.  No fractional shares shall be
issued upon conversion of this Note and the number of shares of Conversion Stock
to be issued shall be rounded down to the nearest whole share.  If
less than the entire outstanding balance is converted, the Company shall issue a
new Note for the remaining balance outstanding following
conversion.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (b)           This
Note is one of an authorized issue of the Maker’s Convertible Promissory Notes,
due [_____] [_], 2010 (herein collectively called the “Notes”) issued in varying
denominations pursuant to the Note and Warrant Purchase Agreement between the
Maker and the holders of the Notes, dated as of April 30, 2010 (the “Purchase Agreement”), numbered
consecutively and limited to the maximum aggregate principal amount of Two
Million Dollars ($2,000,000). All rights and priorities of the registered owner
of this Note and the indebtedness evidenced hereby shall rank pari passu in all
respects with the rights and priorities accorded the registered owners of the
Notes and the indebtedness evidenced thereby.

       

      (c)           The
Company shall not effect the conversion of this Note, and the Holder shall not
have the right to conversion this Note, to the extent that after giving effect
to such conversion, such Holder (together with such Holder’s affiliates) would
beneficially own in excess of 9.99% (the “Maximum Percentage”) of the
shares of Common Stock outstanding immediately after giving effect to such
conversion.  For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which the determination of such sentence
is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) conversion of the remaining, unconverted portion of this Note
beneficially owned by such Person and its affiliates and (B) conversion or
conversion of the unconverted or unconverted portion of any other securities of
the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
Notes) subject to a limitation on conversion or conversion analogous to the
limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act.  For
purposes of this Note, in determining the number of outstanding shares of Common
Stock, the Holder may rely on the number of outstanding shares of Common Stock
as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q, Current
Report on Form 8-K or other public filing with the Securities and Exchange
Commission (“SEC”), as
the case may be, (2) a more recent public announcement by the Company or (3) any
other notice by the Company or the transfer agent setting forth the number of
shares of Common Stock outstanding.  For any reason at any time, upon
the written or oral request of the Holder, where such request indicates that it
is being made pursuant to this Note, the Company shall within two business days
confirm orally and in writing to the Holder the number of shares of Common Stock
then outstanding.  In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the conversion or
conversion of securities of the Company by the Holder and its affiliates since
the date as of which such number of outstanding shares of Common Stock was
reported.  By written notice to the Company, the Holder may increase
or decrease the Maximum Percentage to any other percentage not in excess of
9.99% specified in such notice; provided, that any
such increase will not be effective until the 61st day
after such notice is delivered to the Company.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (d)          All
shares of Conversion Stock issuable upon the conversion of this Note in
accordance with the terms hereof will not be registered with the SEC and will
not be transferable or resalable by any subscribers except as permitted pursuant
to registration or exemption under the Securities Act.  Rule 144
provides that all non-affiliates who have held restricted securities of an SEC
reporting company for at least six months and have not had an affiliate
relationship with the issuer during the preceding three months may sell their
securities without restriction or limitation, other than that the issuer must be
in compliance with the rule’s current public information requirements during the
six months following satisfaction of the six-month holding period
requirement.  It also provides that all non-affiliates who have held
restricted shares of an SEC reporting company for more than one year, may freely
sell the securities without regard to any Rule 144 conditions.  The
Company will undertake all reasonable efforts to comply with Rule 144’s current
information requirement, including compliance with the filing and reporting
requirements of section 13 or 15(d) of the Exchange Act.

       

      (e)           The
Company shall pay all expenses payable in connection with the preparation, issue
and delivery of stock certificates under this section; provided, however, that the
Holder shall be responsible for all transfer taxes resulting from the fact that
any certificate issued in respect of Conversion Stock is not in the name of the
Holder.

       

      (f)           All
shares of Conversion Stock issuable upon the conversion of this Note in
accordance with the terms hereof shall be validly issued, fully paid and
nonassessable, and free from all liens and other encumbrances thereon, other
than liens or other encumbrances created by the Holder or restrictions upon
transfer under federal or state securities laws.

       

      (g)     
    If, at any time prior to the repayment in full of this
Note, the number of outstanding shares of Common Stock is (i) increased by a
stock dividend payable in shares of Common Stock or by a subdivision or split-up
of shares of Common Stock, or (ii) decreased by a combination of shares of
Common Stock, then, following the record date fixed for the determination of
holders of Common Stock entitled to receive the benefits of such stock dividend,
subdivision, split-up, or combination, the Conversion Price shall be adjusted to
a new amount equal to the product of (A) the Conversion Price in effect on such
record date, and (B) the quotient obtained by dividing (x) the number of shares
of Conversion Stock into which this Note would be exercisable on such record
date (without giving effect to the event referred to in the foregoing clause (i)
or (ii)), by (y) the number of shares of Conversion Stock which would be
outstanding immediately after the event referred to in the foregoing clause (i)
or (ii), if this Note had been converted immediately prior to such record
date.

       

      (h)          In
case of any reclassification, reorganization or change of the outstanding Common
Stock of the Company (other than as a result of a subdivision, combination or
stock dividend), or in case of any consolidation of the Company with, or merger
of the Company into, another corporation or other business organization (other
than a consolidation or merger in which the Company is the continuing
corporation and which does not result in any reclassification or change of the
outstanding Common Stock of the Company) at any time prior to the repayment in
full of this Note, then, as a condition of such reclassification,
reorganization, change, consolidation or merger, lawful provision shall be made,
and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Holder, so that the Holder shall have the
right prior to the repayment in full of this Note to convert amounts outstanding
under this Note into the kind and amount of shares of stock and other securities
and property receivable upon such reclassification, reorganization, change,
consolidation or merger by a holder of the number of shares of Conversion Stock
of the Company which might have been purchased by the Holder immediately prior
to such reclassification, reorganization, change, consolidation or merger, and
in any such case appropriate provisions shall be made with respect to the rights
and interest of the Holder to the end that the provisions hereof (including
provisions for the adjustment of the Conversion Price and of the number of
shares purchasable upon conversion of this Note) shall thereafter be applicable
in relation to any shares of stock and other securities and property thereafter
deliverable upon conversion hereof.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (i)           The
Company shall, at all times on and after the date hereof, reserve and keep
available for issuance such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the conversion in full of this
Note.

       

      (j)           Nothing
contained herein shall be construed to confer upon the holder of this Note, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger,
conveyance, or otherwise) or to receive notice of meetings, or to receive
dividends or subscription rights or otherwise until the Note shall have been
converted and the certificates representing the Conversion Stock shall have been
issued, as provided herein.

       

      (k)          The
Company will not at any time, except upon dissolution, liquidation or winding
up, close its stock books so as to result in preventing or delaying the
conversion of any Note.

       

      (l)           The
Holder, by accepting this Note, covenants and agrees that, at the time of
conversion hereof, and at the time of any proposed transfer of Conversion Stock
acquired upon conversion hereof, unless a current registration statement under
the Securities Act shall be in effect with respect to the Conversion Stock to be
issued upon conversion of this Note, such Holder will deliver to the Company a
written statement that the securities acquired by the Holder upon conversion
hereof are for the account of the Holder or are being held by the Holder as
trustee, investment manager, investment advisor or as any other fiduciary for
the account of the beneficial owner or owners for investment and are not
acquired with a view to, or for sale in connection with, any distribution
thereof (or any portion thereof) and with no present intention (at any such
time) of offering and distributing such securities (or any portion thereof). The
Holder agrees that certificates representing Conversion Stock may bear a legend
substantially as follows:

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN
EFFECT AS TO THESE SECURITIES OR (2) THERE IS AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS
AVAILABLE.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      5.           Security
Agreement.

       

      (a)      
    This Note shall constitute a security agreement as that
term is used in the  Uniform Commercial Code (the “UCC”) and Maker hereby grants
to Holder, in order to secure Maker’s obligations under this Note, a security
interest in the equipment and other assets of the Maker located at its biofuels
plant with an address of 5501 Pennington Ave., Baltimore, Maryland (the “Plant”) and the proceeds
thereof, excluding fuel sold in the ordinary course of business (collectively,
the “Secured
Property”).  Terms used in this paragraph that are defined in
the UCC shall have the meanings assigned thereto in Article 9 of the UCC of the
State of Maryland.

       

      (b)           Maker
shall take all actions as may be required to ensure that the security interest
maintained hereunder constitutes a first priority perfected security
interest.  Maker will, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to Holder from time to time such financing
statements, certificates and other assurances or instruments and take such
further steps relating to the Secured Property which Holder, upon written
discretion, deems reasonably appropriate or advisable to perfect, preserve or
protect its security interest in the Secured Property.  Without
limiting the foregoing, Maker hereby authorizes Holder to file any such
financing statements as Holder shall determine to be necessary or advisable to
perfect the security interest granted hereunder, without the signature of
Maker.

       

      (c)           Maker
represents and warrants that (i)  it is a Florida corporation, (ii)
its organizational identification number is _________, (iii) its full legal name
is New Generation Biofuels Holdings, Inc. and (iv) its chief executive office is
located at 5850 Waterloo Road, Suite 140, Columbia, Maryland
21045.  Maker shall not change any of the information described in
this clause (c) without 30 days prior written notice to Holder and completing
such action as Holder may reasonably request to protect and perfect the security
interest granted hereunder.  Maker further represents and warrants
that except for the liens granted hereunder, it has not granted any other liens
on the Secured Property or authorized the filing of any UCC financing statement
with respect thereto.

      

      (d)           In
addition to all other rights, options, and remedies granted to Holder under this
Note, upon the occurrence of an Event of Default, Holder may exercise all other
rights granted to it under this Note and all rights under the UCC in effect in
the applicable jurisdiction(s) and under any other applicable law, and exercise
the following rights and remedies (which list is given by way of example and is
not intended to be an exhaustive list of all such rights and
remedies):

       

      (i)           the
right to take possession of, send notices regarding, and collect directly the
Secured Property, with or without judicial process, and to exercise all rights
and remedies available to Holder with respect to the Secured Property under the
UCC in effect in the applicable jurisdiction(s);

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      (ii)           the
right to (by its own means or with judicial assistance) enter the Plant
(provided, however, that if the Secured Property is relocated to any other
premises, this subclause (ii) shall also apply to such premises) and take
possession of the Secured Property, or dispose of the Secured Property on such
premises in compliance with subsection (e) below, without any liability for
rent, storage, utilities, or other sums, and Maker shall not resist or interfere
with such action; and

       

      (iii)           the
right to require Maker at Maker’s expense to assemble all or any part of the
Secured Property and make it available to Holder at any place designated by
Holder.

       

      (e)           In
the case of such an Event of Default, Holder shall give the Maker not less than
10 business days prior written notice of its intended disposition of the Secured
Property; provided, however, if Maker cures such an Event of Default prior to
expiration of such notice period, an Event of Default will be not deemed to have
occurred and Holder shall have no rights to accelerate repayment or enforce the
Secured Property. Maker agrees that a notice received by it at least ten (10)
business days before the time of any intended public sale, or the time after
which any private sale or other disposition of the Secured Property is to be
made, shall be deemed to be reasonable notice of such sale or other
disposition.  If permitted by applicable law, any perishable Secured
Property that threatens to decline rapidly in value or that is sold on a
recognized market may be sold immediately by Holder without prior notice to
Maker.  At any sale or disposition of Secured Property, Holder may (to
the extent permitted by applicable law) purchase all or any part of the Secured
Property, free from any right of redemption by Maker, which right is hereby
waived and released.  Maker covenants and agrees not to interfere with
or impose any obstacle to Holder’s exercise of its rights and remedies with
respect to the Secured Property following an Event of Default.

       

      (f)           Holder
shall have the right to proceed against all or any portion of the Secured
Property to satisfy the liabilities and obligations of Maker to Holder in any
order.  All rights and remedies granted Holder under this Note and
under any other agreement referred to in this Note, or otherwise available at
law or in equity, shall be deemed concurrent and cumulative, and not alternative
remedies, and Holder may proceed with any number of remedies at the same time
until the principal, all interest, costs, expenses and other charges due under,
and all other existing and future liabilities and obligations of Maker to Holder
under this Note are satisfied in full.  The exercise of any one right
or remedy shall not be deemed a waiver or release of any other right or remedy,
and Holder, upon the occurrence of an Event of Default, may proceed against
Maker, and/or the Secured Property, at any time, under any agreement, with any
available remedy and in any order.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (g)          Maker
hereby irrevocably appoints Holder as its attorney-in-fact with right of
substitution, so that Holder or any other Person empowered by Holder shall be
authorized, without need of further authorization from the Maker, at any time
upon the occurrence of and during the continuation of an Event of Default, in
Holder’s discretion to take any and all actions authorized or permitted to be
taken by Holder under this Note or by law which Holder may deem necessary or
advisable to accomplish the purposes of this Note.  Maker hereby
confirms and ratifies any and all actions and things performed or done by Holder
as Maker’s attorney-in-fact or any of its representatives in each case pursuant
to the powers granted hereunder. This special power of attorney shall be deemed
coupled with an interest, and cannot be revoked by Maker until all of the
obligations under this Note have been paid in full.

       

      (h)          Maker
shall permit representatives of Holder to visit and inspect the Plant and to
discuss Maker’s affairs, finances and accounts with Maker’s directors and
officers at such reasonable times during normal business hours and as often as
may be reasonably desired, upon reasonable advance notice to Maker.

       

      (i)           Maker
shall maintain, with financially sound and reputable insurance companies not
affiliates of Maker, insurance with respect to the assets located at the Plant
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons, which
insurance shall in any event be reasonably satisfactory to
Holder.   In the event that any proceeds relating to a casualty
event are received from the insurer in respect of the insurance policies
described in this subsection (i), such proceeds shall be promptly applied by
Maker to repair or replace the assets that were the subject of such casualty
event.

       

      (j)           Holder
acknowledges that its rights under this Section 5 are subject to the lease with
respect to the Plant (a copy of which shall be made available to Holder upon
written request to the Company) and the rights of the lessor thereunder,
including any liens that may arise due to nonpayment of rent, mechanics’ liens
for work performed or otherwise.

       

      6.           Events of
Default.  An “Event of Default” shall occur
if:

       

      (a)          The
Maker shall default in the payment of the principal of or interest payable on
this Note, when and as the same shall become due and payable, whether at
maturity or at a date fixed for prepayment or by acceleration or otherwise and
such default shall continue un-remedied for ten (10) business days;

       

      (b)          The
Maker shall fail, in any material respect, to observe or perform any covenant or
agreement contained in this Note or the Note and Warrant Purchase Agreement
issued pursuant thereto and such failure shall continue for ten (10) business
days after the Maker receives notice of such failure;

       

      (c)          Any
material representation, warranty, certification or statement made by or on
behalf of the Maker in this Note or the Purchase Agreement or in any
certificate, writing or other document delivered pursuant hereto or thereto
shall prove to have been incorrect in any material respect when made, taking
into consideration any applicable cure period thereunder;

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      (d)          An
involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (a) relief in respect of
Maker or of a substantial part of Maker’s respective property or assets, under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal or state bankruptcy, insolvency, receivership or similar law
(any such law, a “Bankruptcy
Law”), (B) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for a substantial part of the
property or assets of the Maker, or (C) the winding up or liquidation of the
Maker, and such proceeding or petition shall continue un-dismissed for 60 days,
or an order or decree approving or ordering any of the foregoing shall be
entered;

       

      (e)          the
Maker shall (A) voluntarily commence any proceeding or file any petition seeking
relief under a Bankruptcy Law, (B) consent to the institution of or the entry of
an order for relief against it, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition thereof, (C) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for a substantial part of the property or assets
of the Maker, (D) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) make a general assignment
for the benefit of creditors, (F) become unable, admit in writing its inability
or fail generally to pay its debts as they become due or (G) take any action for
the purpose of effecting any of the foregoing; or

       

      (f)          any
material provisions of this Note or the Purchase Agreement shall become void or
unenforceable or the Maker shall so assert in writing.

       

      7.           Suits for
Enforcement.

       

      Upon the
occurrence of any one or more Events of Default, the holder of this Note may
proceed to protect and enforce its rights by suit in equity, action at law or by
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in the Purchase Agreement or in aid of the
exercise of any power granted in this Note, or may proceed to enforce the
payment of this Note, or to enforce any other legal or equitable right it may
have as a holder of this Note.

       

      8.           Legal
Holiday.  If any payment pursuant to this Note shall be due on
a Saturday, a Sunday or a day which is a legal holiday in Baltimore, Maryland,
such payment shall be made without default on the next succeeding day which is a
business day, but any interest-bearing portions of the payment shall continue to
accrue interest until payment during the extension.

       

      9.           No
Waiver.  The rights and remedies of Holder hereunder shall be
cumulative and concurrent and may be pursued singularly, successively or
together at the sole discretion of Holder, and may be exercised as often as
occasion therefor shall occur, and the failure to exercise any such right or
remedy shall in no event be construed as a waiver or release of the same or any
other right or remedy.

       

      10.         Use of
Proceeds.  Maker hereby declares, represents, and warrants that
the indebtedness evidenced hereby is made for the purpose of acquiring or
carrying on a business, professional, or commercial activity.

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      11.         Assignment; Successors and
Assigns.  Except with the prior written consent of Maker in its
sole and absolute discretion, this Note may be not be assigned by Holder to any
person or entity; provided, however, that nothing herein shall limit the
transferability of Common Stock received upon conversion of all or any part of
this Note.  This Note shall inure to the benefit of and be enforceable
by Holder and Holder’s successors and permitted assigns, and shall be binding
and enforceable against Maker and Maker’s successors and assigns.

       

      12.         Governing Law;
Amendments.  This Note shall be governed by and construed under
and in accordance with the laws of the State of New York.  This Note
may be amended, supplemented or modified only by written instruction duly
executed by or on behalf of the Holders of 50% of the total Outstanding Balances
under the Notes.

       

      13.         Accredited Investor
Status.  Holder hereby represents that Holder (as appropriate)
is an “accredited investor” as such term is defined in Rule 501 under the Act,
and understands that the Maker is relying on such representations in issuing
this Note pursuant to an exemption from registration under the Act.

       

      14.         Venue.  Maker
irrevocably consents to the non-exclusive jurisdiction of the federal and state
courts located in the State of Maryland.  Maker agrees that venue
shall be proper in any federal court located in the State of Maryland selected
by Holder and waives any right to object to the maintenance of a suit in any of
the state or federal courts located in the State of Maryland on the basis of
improper venue or of inconvenience of forum.

       

      15.         Waiver of Jury
Trial.  Maker (by execution of this Note) and Holder (by
acceptance of this Note) agree that any suit, action, or proceeding, whether
claim or counterclaim, brought or instituted by or against Maker or Holder, or
any successor or assign of Maker or Holder, on or with respect to this Note, or
which in any way relates, directly or indirectly, to the obligations of Maker to
Holder under this Note, or the dealings of the parties with respect thereto,
shall be tried only by a court and not by a jury.  MAKER AND HOLDER
HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR
PROCEEDING.  Maker and Holder acknowledge and agree that this
provision is a specific and material aspect of the agreement between the parties
and that Holder would not enter into the transaction contemplated hereby with
Maker if this provision were not part of their agreement.

       

      16.         Counterparts.  This
Note may be executed in two counterparts, both of which together constitute one
instrument.  This Note may be executed by delivery of an original
executed counterpart signature page by facsimile transmission.

       

      [SIGNATURE
PAGE FOLLOWS]

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the undersigned have duly executed this Note, or have caused
this Note to be duly executed on their behalf, as of the day and year first
hereinabove set forth.

       

      
        
          
            
              
                
                  
                    
                      
                        	MAKER:
	 
	NEW
      GENERATION BIOFUELS HOLDINGS, INC.
	 	 
      
	
                                By:

                              	
                                 

                              
	 	
                                Name:

                              	
                                   

                              
	 	
                                Title:

                              	
                                   

                              

                      

                    

                  

                

              

            

          

        

      

      

      ACKNOWLEDGED
AND AGREED:

      

      HOLDER:

      

      
        
          	
                     

                
	
                  Name
      of Individual or Entity

                
	 
      	 
      
	
                  By:

                	
                     

                
	 
      	
                  Name:

                	
                     

                
	 
      	
                  Title:

                	
                     

                

        

      

       

      Address:Unassociated Document

    Exhibit
4.2

    

    FORM
OF WARRANT

     

    THIS
WARRANT AND THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO
THESE SECURITIES OR (2) THERE IS AN OPINION OF COUNSEL, SATISFACTORY TO THE
CORPORATION, THAT AN EXEMPTION THEREFROM IS AVAILABLE.

     

    NEW
GENERATION BIOFUELS HOLDINGS, INC.

    WARRANT

    TO
PURCHASE COMMON STOCK

     

    Issue
Date:       ____________, 2010

    

    THIS WARRANT IS TO CERTIFY
THAT, (the “Purchaser”), is
entitled to purchase from New Generation Biofuels Holdings, Inc., a Florida
corporation (the “Company”), ________ shares of the Company’s common stock, par
value $.001 per share (the “Common Stock”), at
the Exercise Price (as defined below).

    

    Section
1.            Certain
Definitions.

    

    As used
in this Warrant, unless the context otherwise requires:

    

    “Business Day” shall
mean any day other than Saturday, Sunday or other day on which commercial banks
in The City of New York are authorized by law to remain closed.

     

    “Exercise Price” shall
mean $0.90 per share, as adjusted from time to time pursuant to Section 3
hereof.

     

    “Person” shall mean an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization, any other entity and a
government or any department or agency thereof.

     

    “Securities Act” shall
mean the Securities Act of 1933, as amended.

     

    “Warrant” shall mean
this Warrant and all additional or new warrants issued upon division or
combination of, or in substitution for, this Warrant. All such additional or new
warrants shall at all times be identical as to terms and conditions and date,
except as to the number of shares of Warrant Stock for which they may be
exercised.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Warrantholder” shall
mean the Purchaser, as the initial holder of this Warrant, and its nominees,
successors or assigns, including any subsequent holder of this Warrant to whom
it has been legally transferred.

     

    “Warrant Stock” shall
mean the shares of the Company’s Common Stock purchasable by the holder of this
Warrant upon the exercise of this Warrant.

     

    Section
2.        
    Exercise of Warrant.

     

    (a)           At
any time after the six month anniversary of the Issue Date but prior to the
fifth anniversary of the Issue Date (the “Expiration Date”),
the Purchaser may at any time and from time to time exercise this Warrant, in
whole or in part.

     

    (b)           (i)           The
Warrantholder shall exercise this Warrant by means of delivering to the Company
at its office identified in Section 14 hereof (i)
a written notice of exercise, including the number of shares of Warrant Stock to
be delivered pursuant to such exercise, (ii) this Warrant and (iii) payment
equal to the Exercise Price in accordance with Section 2(b)(ii). In
the event that any exercise shall not be for all shares of Warrant Stock
purchasable hereunder, a new Warrant registered in the name of the
Warrantholder, of like tenor to this Warrant and for the remaining shares of
Warrant Stock purchasable hereunder, shall be delivered to the Warrantholder
within ten (10) days after any such exercise. Such notice of exercise shall be
in the Subscription Form set out at the end of this Warrant.

     

    (ii)          The
Warrantholder shall pay the Exercise Price to the Company either by cash,
certified check to the order of the Company or wire transfer to an account
specified by the Company.  At any time after the six month anniversary
of the Issue Date, in addition to the method of payment set forth in the
immediately preceding sentence and in lieu of any cash payment required thereby,
this Warrant may also be exercised at such time by means of a “cashless
exercise” in which the Warrantholder shall be entitled to receive a certificate
for the number of shares of Warrant Stock computed using the following
formula:

     

    X = Y (A-B)

     A

    

    Where  
 (X) =      the number of shares of Warrant
Stock to be issued to the Warrantholder;

     

    (Y)
=      the number of shares of Warrant Stock
issuable upon exercise of this Warrant in accordance with the terms of this
Warrant by means of a cash exercise rather than a cashless
exercise;

     

    (A)
=      the Market Price (as defined below);
and

     

    (B)
=      the Exercise Price of this Warrant, as
adjusted from time to time.

     

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

    Solely
for the purposes of this paragraph, Market Price shall be calculated as of the
Trading Day (defined for this purpose as any day on which the equity securities
markets are generally open for trading) immediately preceding the date which the
subscription form attached hereto is deemed to have been sent to the Company
pursuant to Section
14 hereof (such preceding date, the “Valuation Date”). As
used herein, the phrase “Market Price” shall
mean (i) if the Warrant Stock is listed or admitted for trading on a national
securities exchange, an automated quotation system or the Over the Counter
Bulletin Board, the last reported sale price per share of the Warrant Stock on
the Valuation Date, or, in case no such reported sale takes place on such day or
is reported, then the average of the last reported per share bid and ask prices
for shares of the Warrant Stock on such date (or if such bid and ask prices are
not available on such date, the most recent preceding date), in either case as
officially reported by such securities exchange, quotation system or Bulletin
Board on which the Common Stock is listed or admitted to trading, (ii) if not so
listed or admitted for trading, the fair market value of a share of the Warrant
Stock as determined by the Company’s board of directors in good faith, or (iii)
if such exercise is in connection with a merger or consolidation of the Company
in which the Company is not the survivor or in which the Warrant Stock is
exchanged for cash or other securities or a sale of all or substantially all of
the assets of the Company (collectively, a “Sale”), the implied
price per share of the Warrant Stock resulting from such Sale.

     

    (c)           The
Company shall not effect the exercise of this Warrant, and the Warrantholder
shall not have the right to exercise this Warrant, to the extent that after
giving effect to such exercise, such Person (together with such Person’s
affiliates) would beneficially own in excess of 9.99% (the “Maximum Percentage”)
of the shares of Common Stock outstanding immediately after giving effect to
such exercise.  For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Person and its
affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which the determination of such
sentence is being made, but shall exclude shares of Common Stock which would be
issuable upon (A) exercise of the remaining, unexercised portion of this Warrant
beneficially owned by such Person and its affiliates and (B) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company beneficially owned by such Person and its affiliates (including,
without limitation, any convertible notes or convertible preferred stock or
warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein.  Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act.  For
purposes of this Warrant, in determining the number of outstanding shares of
Common Stock, the Warrantholder may rely on the number of outstanding shares of
Common Stock as reflected in (1) the Company’s most recent Form 10-K, Form 10-Q,
Current Report on Form 8-K or other public filing with the Securities and
Exchange Commission (“SEC”), as the case
may be, (2) a more recent public announcement by the Company or (3) any other
notice by the Company or the transfer agent setting forth the number of shares
of Common Stock outstanding.  For any reason at any time, upon the
written or oral request of the Warrantholder, where such request indicates that
it is being made pursuant to this Warrant, the Company shall within two Business
Days confirm orally and in writing to the Warrantholder the number of shares of
Common Stock then outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company by the Warrantholder and its affiliates
since the date as of which such number of outstanding shares of Common Stock was
reported.  By written notice to the Company, the Warrantholder may
increase or decrease the Maximum Percentage to any other percentage not in
excess of 9.99% specified in such notice; provided, that any
such increase will not be effective until the 61st day
after such notice is delivered to the Company.

     

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    (d)           Upon
exercise of this Warrant and delivery of the Subscription Form with proper
payment relating thereto, the Company shall cause to be executed and delivered
to the Warrantholder a certificate or certificates representing the aggregate
number of fully-paid and nonassessable shares of Warrant Stock issuable upon
such exercise.

     

    (e)           All
shares of Warrant Stock issuable upon the exercise of this Warrant in accordance
with the terms hereof will not be registered with the SEC and will not be
transferable or resalable by any subscribers except as permitted pursuant to
registration or exemption under the Securities Act.  Rule 144 provides
that all non-affiliates who have held restricted securities of an SEC reporting
company for at least six months and have not had an affiliate relationship with
the issuer during the preceding three months may sell their securities without
restriction or limitation, other than that the issuer must be in compliance with
the rule’s current public information requirements during the six months
following satisfaction of the six-month holding period
requirement.  It also provides that all non-affiliates who have held
restricted shares of an SEC reporting company for more than one year, may freely
sell the securities without regard to any Rule 144 conditions.  The
Company will undertake all reasonable efforts to comply with Rule 144’s current
information requirement, including compliance with the filing and reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, (the “Exchange
Act”).

     

    (f)           The
stock certificate or certificates for Warrant Stock to be delivered in
accordance with this Section 2 shall be in
such denominations as may be specified in said notice of exercise and shall be
registered in the name of the Warrantholder or such other name or names as shall
be designated in said notice. Such certificate or certificates shall be deemed
to have been issued and the Warrantholder or any other person so designated to
be named therein shall be deemed to have become the holder of record of such
shares, including to the extent permitted by law the right to vote such shares
or to consent or to receive notice as shareholders, as of the time said notice
is delivered to the Company as aforesaid.

     

    (g)           The
Company shall pay all expenses payable in connection with the preparation, issue
and delivery of stock certificates under this Section 2; provided, however, that the
Warrantholder shall be responsible for all transfer taxes resulting from the
fact that any certificate issued in respect of Warrant Stock is not in the name
of the Warrantholder.

     

    (h)           All
shares of Warrant Stock issuable upon the exercise of this Warrant in accordance
with the terms hereof shall be validly issued, fully paid and nonassessable, and
free from all liens and other encumbrances thereon, other than liens or other
encumbrances created by the Warrantholder or restrictions upon transfer under
federal or state securities laws.

     

    (i)           In
no event shall any fractional share of Warrant Stock of the Company be issued
upon any exercise of this Warrant. If, upon any exercise of this Warrant, the
Warrantholder would, except as provided in this paragraph, be entitled to
receive a fractional share of Warrant Stock, then the Company shall deliver in
cash to such holder an amount equal to such fractional interest.

     

    
      
         

      

      
        - 4
-

        
          

        

      

      
         

      

    

     

    Section
3.            Adjustment
of Exercise Price and Warrant Stock.

     

    (a)           If,
at any time prior to the Expiration Date, the number of outstanding shares of
Common Stock is (i) increased by a stock dividend payable in shares of Warrant
Stock or by a subdivision or split-up of shares of Common Stock, or (ii)
decreased by a combination of shares of Common Stock, then, following the record
date fixed for the determination of holders of Common Stock entitled to receive
the benefits of such stock dividend, subdivision, split-up, or combination, the
Exercise Price shall be adjusted to a new amount equal to the product of (A) the
Exercise Price in effect on such record date, and (B) the quotient obtained by
dividing (x) the number of shares of Warrant Stock into which this Warrant would
be exercisable on such record date (without giving effect to the event referred
to in the foregoing clause (i) or (ii)), by (y) the number of shares of Warrant
Stock which would be outstanding immediately after the event referred to in the
foregoing clause (i) or (ii), if this Warrant had been exercised immediately
prior to such record date.

     

    (b)           Upon
each adjustment of the Exercise Price as provided in Section 3(a),
the Warrantholder shall thereafter be entitled to subscribe for and purchase, at
the Exercise Price resulting from such adjustment, the number of shares of
Warrant Stock equal to the product of (i) the number of shares of Warrant Stock
into which this Warrant would be exercisable prior to such adjustment and (ii)
the quotient obtained by dividing (A) the Exercise Price existing prior to such
adjustment by (B) the new Exercise Price resulting from such
adjustment.

     

    Section
4.            Division
and Combination.

     

    This
Warrant may be divided or combined with other Warrants upon presentation at the
aforesaid office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
Warrantholder or its agent or attorney. The Company shall pay all expenses in
connection with the preparation, issue and delivery of Warrants under this Section 4. The
Company agrees to maintain at its aforesaid office books for the registration of
the Warrants.

     

    Section
5.            Reclassification,
Etc.

     

    In case
of any reclassification or change of the outstanding Warrant Stock of the
Company (other than as a result of a subdivision, combination or stock
dividend), or in case of any consolidation of the Company with, or merger of the
Company into, another corporation or other business organization (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification or change of the outstanding
Common Stock of the Company) at any time prior to the Expiration Date, then, as
a condition of such reclassification, reorganization, change, consolidation or
merger, lawful provision shall be made, and duly executed documents evidencing
the same from the Company or its successor shall be delivered to the
Warrantholder, so that the Warrantholder shall have the right prior to the
Expiration Date to purchase, at a total price not to exceed that payable upon
the exercise of this Warrant, the kind and amount of shares of stock and other
securities and property receivable upon such reclassification, reorganization,
change, consolidation or merger by a holder of the number of shares of Warrant
Stock of the Company which might have been purchased by the Warrantholder
immediately prior to such reclassification, reorganization, change,
consolidation or merger, and in any such case appropriate provisions shall be
made with respect to the rights and interest of the Warrantholder to the end
that the provisions hereof (including provisions for the adjustment of the
Exercise Price and of the number of shares purchasable upon exercise of this
Warrant) shall thereafter be applicable in relation to any shares of stock and
other securities and property thereafter deliverable upon exercise
hereof.

     

    
      
         

      

      
        - 5
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    Section
6.            Reservation
and Authorization of Capital Stock.

     

    The
Company shall, at all times on and after the date hereof, reserve and keep
available for issuance such number of its authorized but unissued shares of
Common Stock as will be sufficient to permit the exercise in full of all
outstanding Warrants.

     

    Section
7.            Rights
of Shareholders.

     

    Nothing
contained herein shall be construed to confer upon the holder of this Warrant,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action
(whether upon any recapitalization, issuance of stock, reclassification of
stock, change of par value or change of stock to no par value, consolidation,
merger, conveyance, or otherwise) or to receive notice of meetings, or to
receive dividends or subscription rights or otherwise until the Warrant shall
have been exercised and the certificates representing the Warrant Stock shall
have been issued, as provided herein.

     

    Section
8.            Stock
and Warrant Books.

     

    The
Company will not at any time, except upon dissolution, liquidation or winding
up, close its stock books or warrant books so as to result in preventing or
delaying the exercise of any Warrant.

     

    Section
9.            Limitation
of Liability.

     

    No
provisions hereof, in the absence of affirmative action by the Warrantholder to
purchase Warrant Stock hereunder, shall give rise to any liability of the
Warrantholder to pay the Exercise Price or as a shareholder of the Company
(whether such liability is asserted by the Company or creditors of the
Company).

     

    Section
10.          Transfer

     

    This
Warrant may be transferred only upon the written consent of the Company, which
approval shall not be unreasonably withheld or delayed. Any Warrants issued upon
the transfer of this Warrant shall be numbered and shall be registered in a
Warrant Register as they are issued. The Company shall be entitled to treat the
registered holder of any Warrant on the Warrant Register as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to, or interest in, such Warrant on the part of any other person,
and shall not be liable for any registration of transfer of Warrants that are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration or transfer, or
with the knowledge of such facts that its participation therein amounts to bad
faith. This Warrant shall be transferable only on the books of the Company upon
delivery thereof duly endorsed by the Holder or by his duly authorized attorney
or representative, or accompanied by proper evidence of succession, assignment,
or authority to transfer. In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his or its authority shall be produced. Upon any registration of
transfer, the Company shall deliver a new Warrant or Warrants to the person
entitled thereto. This Warrant may be exchanged, at the option of the Holder
thereof, for another Warrant, or other Warrants of different denominations, of
like tenor and representing in the aggregate a like amount, upon surrender to
the Company or its duly authorized agent. Notwithstanding the foregoing, the
Company shall have no obligation to cause Warrants to be transferred on its
books to any person if, in the opinion of counsel to the Company, such transfer
does not comply with the provisions of the Securities Act and the rules and
regulations thereunder.

     

    
      
         

      

      
        - 6
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    Section
11.          Investment
Representations; Restrictions on Warrant Stock.

     

    The
Warrantholder, by accepting this Warrant, covenants and agrees that, at the time
of exercise hereof, and at the time of any proposed transfer of Warrant Stock
acquired upon exercise hereof, unless a current registration statement under the
Securities Act shall be in effect with respect to the Warrant Stock to be issued
upon exercise of this Warrant, such Warrantholder will deliver to the Company a
written statement that the securities acquired by the Warrantholder upon
exercise hereof are for the account of the Warrantholder or are being held by
the Warrantholder as trustee, investment manager, investment advisor or as any
other fiduciary for the account of the beneficial owner or owners for investment
and are not acquired with a view to, or for sale in connection with, any
distribution thereof (or any portion thereof) and with no present intention (at
any such time) of offering and distributing such securities (or any portion
thereof). The Warrantholder agrees that certificates representing Warrant Stock
may bear a legend substantially as follows:

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES HAVE
BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE
DISTRIBUTION THEREOF. THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR
TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT IS IN
EFFECT AS TO THESE SECURITIES OR (2) THERE IS AN OPINION OF COUNSEL,
SATISFACTORY TO THE CORPORATION, THAT AN EXEMPTION THEREFROM IS
AVAILABLE.

     

    Section
12.          Loss, Destruction
of Warrant Certificates.

     

    Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of any warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity and/or security satisfactory to the
Company or, in the case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company will make and deliver, in lieu of such lost,
stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of shares of
Warrant Stock.

     

    
      
         

      

      
        - 7
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    Section
13.          Amendments.

     

    The terms
of this Warrant may be amended, and the observance of any term herein may be
waived, but only with the written consent of the Company and the
Warrantholder.

     

    Section
14.          Notices
Generally.

     

    Any
notice, request, consent, other communication or delivery pursuant to the
provisions hereof shall be in writing and shall be sent by one of the following
means: (i) by registered or certified first class mail, postage prepaid, return
receipt requested; (ii) by facsimile transmission with confirmation of receipt;
(iii) by overnight courier service; or (iv) by personal delivery, and shall be
properly addressed to the Warrantholder at the last known address or facsimile
number appearing on the books of the Company, or, except as herein otherwise
expressly provided, to the Company at its principal executive office at New
Generation Biofuels Holdings, Inc., 15850 Waterloo Road, Suite 140, Columbia,
Maryland 21045 (Fax: (443) 638-0277), Attention: Cary J. Claiborne,
President and Chief Executive Officer, or such other address or facsimile number
as shall have been furnished to the party giving or making such notice, demand
or delivery.

     

    Section
15.          Successors and
Assigns.

     

    This
Warrant shall bind and inure to the benefit of and be enforceable by the parties
hereto and their respective permitted successors and assigns.

     

    Section
16.          Governing
Law.

     

    In all
respects, including all matters of construction, validity and performance, this
Warrant and the obligations arising hereunder shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York
applicable to contracts made and performed in such State.

     

    
      
         

      

      
        - 8
-

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
Company has caused this Warrant to be signed in its name by its duly authorized
officer as of the date first written above.

     

    
      
        	 
      	
                NEW
      GENERATION BIOFUELS HOLDINGS, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                  

              	 
      

      

    

     

    
      
         

      

      
        - 9
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    SUBSCRIPTION
FORM

     

    (to be
executed only upon exercise of Warrant)

    

    
      	
              To:

            	
              New
      Generation Biofuels Holdings, Inc.

            

    

    5850 Waterloo Road, Suite
140

    Columbia, Maryland 21045

    
      	
               
      

            	
              Attn:
      Cary J. Claiborne

            

    

    

    or such other address notified by the
Company to the Holder.

    

    (1) The undersigned hereby elects to
purchase _______ shares of Warrant Stock of 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.

    

    (2) Payment shall take the form of
(check applicable box):

     

    
      [ ]in
lawful money of the United States; or

      

      [ ] the
cancellation of such number of shares of Warrant Stock as is necessary, in
accordance with the formula set forth in subsection 2(b), to exercise this
Warrant with respect to the shares of Warrant Stock set forth above pursuant to
the cashless exercise procedure set forth in subsection 2(b).

    

     

    (3) Please issue a certificate or
certificates representing said shares of Warrant Stock in the name of the
undersigned or in such other name as is specified below:

     

    _____________________________

     

    The
shares of Warrant Stock shall be delivered to the following:

    

    _____________________________

     

    _____________________________

     

    _____________________________

     

    (4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [SIGNATURE
OF HOLDER]

     

    Name of
Investing Entity:

     

    
      

    

    Signature
of Authorized Signatory of Investing Entity:

     

    
      

    

    
      Name
of Authorized Signatory:

       

      
        
          

        

      

      Title
of Authorized Signatory:

       

      
        

      

       

      
        
          	
                  Date:

                	
                    

                	 
      

        

      

      

        
          
             

          

          
            - 2
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