Document:

Exhibit
10.2

      

    
    

    SUBSCRIPTION
AGREEMENT

     

    THIS SUBSCRIPTION AGREEMENT
(this “Agreement”), is
dated as of August 13, 2010, by and between American Antiquities Incorporated,
an Illinois corporation (the “Company”), and
________________________________ (the “Subscriber”).

     

    RECITALS:

     

    WHEREAS, the Company and the
Subscriber are executing and delivering this Agreement in reliance upon an
exemption from securities registration afforded by the provisions of Section
4(2), Section 4(6), Regulation D (“Regulation D”) as promulgated
by the United States Securities and Exchange Commission (the “Commission”) under the
Securities Act of 1933, as amended (the “1933 Act”).

     

    WHEREAS, the Company has
engaged in a private offering (the “Offering”) in which the
Subscriber agrees to purchase and the Company agrees to offer and sell (i) its
8% Debenture (the “Debentures”) convertible into
shares of its common stock (the “Conversion Shares”) for
aggregate gross proceeds of up to $___________________ (the “Purchase Price”) and (ii)
share purchase warrants (the “Warrants”) in the form
attached hereto as Exhibit A,
to purchase shares of the Company’s Common Stock (the “Warrant Shares”).

     

    WHEREAS, the Company desires
to enter into this Agreement to issue and sell the Debentures and the Subscriber
desires to purchase that principal amount of Debentures set forth on the
signature page hereto on the terms and conditions set forth herein.

     

    AGREEMENT:

     

    NOW, THEREFORE, in
consideration of the mutual covenants and other agreements contained in this
Agreement, the Company and the Subscriber hereby agree as follows:

     

    1.           Purchase and Sale of
Debentures and Warrants.

     

    (a)  Subject
to the satisfaction or waiver of the terms and conditions of this Agreement, on
the Closing Date (as defined below), each Subscriber shall purchase and the
Company shall sell to each Subscriber the Debentures for the portion of the
Purchase Price designated on the signature pages hereto.

    
      
         

      

      
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    (b)  On
the Closing Date, the Company will issue and deliver Warrants to each
Subscriber.  One Warrant will be issued for each Conversion Share that
would be issued to the Subscriber if the Subscriber had converted its Debenture
on the Closing Date.  The exercise price to acquire a Warrant Share
upon exercise of a Warrant shall be $1.00.  The Warrants shall be
exercisable until five years after the issue date of the Warrants.

    

    2.           Closing.  The
issuance and sale of the Debentures and Warrants shall occur on the closing date
(the “Closing Date”),
which shall be the date that Subscriber funds representing the net amount due to
the Company from the Purchase Price of the Offering is transmitted by wire
transfer or otherwise to or for the benefit of the Company.  The
consummation of the transactions contemplated herein (the “Closing”) shall take place at
the offices of The Crone Law Group on such date and time as the Subscriber and
the Company may agree upon; provided, that all of
the conditions set forth in Section 11 hereof and applicable to the Closing
shall have been fulfilled or waived in accordance herewith. 

     

    3.           Subscriber Representations,
Warranties and Covenants.  The Subscriber hereby represents and
warrants to and agrees with the Company that:

    

    (a)           Organization
and Standing of the Subscriber.   If such Subscriber is an
entity, such Subscriber is a corporation, partnership or other entity duly
incorporated or organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization.

    

    (b)           Authorization
and Power.   Such Subscriber has the requisite power and
authority to enter into and perform this Agreement and the other Transaction
Documents (as defined in Section 4(c)) and to purchase the Debentures being sold
to it hereunder.  The execution, delivery and performance of this
Agreement and the other Transaction Documents by such Subscriber and the
consummation by it of the transactions contemplated hereby and thereby have been
duly authorized by all necessary corporate or partnership action, and no further
consent or authorization of such Subscriber or its Board of Directors,
stockholders, partners, members, as the case may be, is
required.  This Agreement and the other Transaction Documents have
been duly authorized, executed and delivered by such Subscriber and constitutes,
or shall constitute when executed and delivered, a valid and binding obligation
of such Subscriber enforceable against such Subscriber in accordance with the
terms thereof.

    

    (c)           No
Conflicts.   The execution, delivery and performance of this
Agreement and the other Transaction Documents and the consummation by such
Subscriber of the transactions contemplated hereby and thereby or relating
hereto do not and will not (i) result in a violation of such Subscriber’s
charter documents or bylaws or other organizational documents or (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument or obligation to which such Subscriber is a party or by which its
properties or assets are bound, or result in a violation of any law, rule, or
regulation, or any order, judgment or decree of any court or governmental agency
applicable to such Subscriber or its properties (except for such conflicts,
defaults and violations as would not, individually or in the aggregate, have a
material adverse effect on such Subscriber).  Such Subscriber is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of its obligations under this Agreement and the other
Transaction Documents or to purchase the Debentures in accordance with the terms
hereof, provided that for purposes of the representation made in this sentence,
such Subscriber is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.

    
      
         

      

      
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    (d)           Acquisition for
Investment. The Subscriber is acquiring the Debentures solely for its own
account for the purpose of investment and not with a view to or for resale in
connection with a distribution.  The Subscriber does not have a
present intention to sell the Debentures, nor a present arrangement (whether or
not legally binding) or intention to effect any distribution of the Debentures
to or through any person or entity.  The Subscriber acknowledges that
it is able to bear the financial risks associated with an investment in the
Debentures and that it has been given full access to such records of the Company
and the subsidiaries and to the officers of the Company and the subsidiaries and
received such information as it has deemed necessary or appropriate to conduct
its due diligence investigation and has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company’s stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company.  The Subscriber further acknowledges that the
Subscriber understands the risks of investing in development stage companies and
that the purchase of the Debentures involves substantial risks.

    

    (e)           Information on
Company.    Such Subscriber has been furnished with
or has had access to the EDGAR Website of the Commission and to the Company’s
filings made with the Commission available at the EDGAR website (hereinafter
referred to collectively as the “Reports”).  In
addition, such Subscriber has received in writing from the Company such other
information concerning its operations, financial condition and other matters as
such Subscriber has requested in writing, identified thereon as OTHER WRITTEN
INFORMATION (such other information is collectively, the “Other Written Information”),
and considered all factors such Subscriber deems material in deciding on the
advisability of investing in the Debentures.  Such Subscriber has
relied on the Reports and Other Written Information in making its investment
decision.

    

    (f)           Opportunities for Additional
Information.  The Subscriber acknowledges that the Subscriber
has had the opportunity to ask questions of and receive answers from, or obtain
additional information from, the executive officers of the Company concerning
the financial and other affairs of the Company.

    
      
         

      

      
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    (g)           Information on
Subscriber.   Subscriber is, and will be on the Closing
Date, an “accredited
investor”, as such term is defined in Regulation D promulgated by the
Commission under the 1933 Act, is experienced in investments and business
matters, has made investments of a speculative nature and has purchased shares
or debt of United States publicly-owned companies in private placements in the
past and, with its representatives, has such knowledge and experience in
financial, tax and other business matters as to enable such Subscriber to
utilize the information made available by the Company to evaluate the merits and
risks of and to make an informed investment decision with respect to the
proposed purchase, which represents a speculative investment.  Such
Subscriber has the authority and is duly and legally qualified to purchase and
own the Debentures.  Such Subscriber is able to bear the risk of such
investment for an indefinite period and to afford a complete loss
thereof.  The information set forth on the signature page hereto
regarding such Subscriber is accurate.

    

    (h)           Compliance
with 1933 Act.   Such Subscriber understands and agrees that the
Debentures have not been registered under the 1933 Act or any applicable state
securities laws, by reason of their issuance in a transaction that does not
require registration under the 1933 Act (based in part on the accuracy of the
representations and warranties of the Subscriber contained herein), and that
such Debentures must be held indefinitely unless a subsequent disposition is
registered under the 1933 Act or any applicable state securities laws or is
exempt from such registration.  The Subscriber acknowledges that the
Subscriber is familiar with Rule 144 of the rules and regulations of the
Commission, as amended, promulgated pursuant to the Securities Act (“Rule 144”), and that such
person has been advised that Rule 144 permits resales only under certain
circumstances. The Subscriber understands that to the extent that Rule 144 is
not available, the Subscriber will be unable to sell any Debentures without
either registration under the 1933 Act or the existence of another exemption
from such registration requirement.

    

    (i)           Debentures
Legend.  The Debentures shall bear the following or similar
legend:

    

    “THE ISSUANCE AND SALE OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE
STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE
HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR  PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT, OR
OTHERWISE.  NOTWITHSTANDING.”

     

     (j)   Communication of
Offer.  The offer to sell the Debentures was directly
communicated to such Subscriber by the Company.  At no time was such
Subscriber presented with or solicited by any leaflet, newspaper or magazine
article, radio or television advertisement, or any other form of general
advertising or solicited or invited to attend a promotional meeting otherwise
than in connection and concurrently with such communicated
offer.
 

    
      
         

      

      
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    (k)           Restricted
Securities.   Such Subscriber understands that the
Debentures have not been registered under the 1933 Act and such Subscriber will
not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any
of the Debentures unless pursuant to an effective registration statement under
the 1933 Act, or unless an exemption from registration is
available.  Notwithstanding anything to the contrary contained in this
Agreement, such Subscriber may transfer (without restriction and without the
need for an opinion of counsel) the Debentures to its Affiliates (as defined
below) provided that each such Affiliate is an “accredited investor” under
Regulation D and such Affiliate agrees to be bound by the terms and conditions
of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or
entity means any other person or entity directly or indirectly controlling,
controlled by or under direct or indirect common control with such person or
entity.  Affiliate includes each Subsidiary of the Company.  For
purposes of this definition, “control” means the power to
direct the management and policies of such person or firm, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise.

    

    (l)           No Governmental
Review.   Such Subscriber understands that no United
States federal or state agency or any other governmental or state agency has
passed on or made recommendations or endorsement of the Debentures or the
suitability of the investment in the Debentures nor have such authorities passed
upon or endorsed the merits of the offering of the Debentures.

    

    (m)           Correctness of
Representations.  Such Subscriber represents that the foregoing
representations and warranties are true and correct as of the date hereof and,
unless such Subscriber otherwise notifies the Company prior to the Closing Date,
shall be true and correct as of the Closing Date.  The Subscriber
understands that the Debentures are being offered and sold in reliance on a
transactional exemption from the registration requirement of Federal and state
securities laws and the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings of
the Subscriber set forth herein in order to determine the applicability of such
exemptions and the suitability of the Subscriber to acquire the
Debentures.

     

    (n)           No
Brokers.  Such Subscriber has taken any action which would give
rise to any claim by any person for brokerage commissions, finder’s fees or
similar payments relating to this Agreement or the transactions contemplated
hereby.

     

    4.           Company Representations and
Warranties.  The Company represents and warrants to and agrees
with each Subscriber that:

    
      
         

      

      
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    (a)  Due
Incorporation.  The Company is a corporation or other entity
duly incorporated or organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has the
requisite corporate power to own its properties and to carry on its business as
presently conducted.  The Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where
the nature of the business conducted or property owned by it makes such
qualification necessary, other than those jurisdictions in which the failure to
so qualify would not have a Material Adverse Effect.  For purposes of
this Agreement, a “Material
Adverse Effect” means any material adverse effect on the business,
operations, properties, or financial condition of the Company and its
Subsidiaries individually, or in the aggregate and/or any condition,
circumstance, or situation that would prohibit or otherwise materially interfere
with the ability of the Company to perform any of its obligations under this
Agreement in any material respect. For purposes of this Agreement, “Subsidiary” means, with
respect to any entity at any date, any corporation, limited or general
partnership, limited liability company, trust, estate, association, joint
venture or other business entity of which more than 30% of (i) the
outstanding capital stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such entity, (ii) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (iii) in the case of a trust, estate, association,
joint venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination,
owned or controlled directly or indirectly through one or more intermediaries,
by such entity.

     

    (b)           Outstanding
Stock.  All issued and outstanding shares of capital stock and
equity interests in the Company have been duly authorized and validly issued and
are fully paid and non-assessable.

     

    (c)           Authority;
Enforceability.  This Agreement, the Debentures, and any other
agreements delivered together with this Agreement or in connection herewith
(collectively, the “Transaction
Documents”) have been duly authorized, executed and delivered by the
Company and are valid and binding agreements of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights generally and to general principles
of equity.  The Company has full corporate power and authority
necessary to enter into and deliver the Transaction Documents and to perform its
obligations thereunder.

     

    (d)           Consents.  No
consent, approval, authorization or order of any court, governmental agency or
body or arbitrator having jurisdiction over the Company, or any of its
Affiliates, the Over The Counter Bulletin Board (the “Bulletin Board”) or the
Company’s shareholders is required for the execution by the Company of the
Transaction Documents and compliance and performance by the Company of its
obligations under the Transaction Documents, including, without limitation, the
issuance and sale of the Debentures.  The Transaction Documents and
the Company’s performance of its obligations thereunder have been approved by
the Company’s Board of Directors.  No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority in the world, including without
limitation, the United States, or elsewhere is required by the Company or any
Affiliate of the Company in connection with the consummation of the transactions
contemplated by this Agreement, except as would not otherwise have a Material
Adverse Effect or the consummation of any of the other agreements, covenants or
commitments of the Company or any Subsidiary contemplated by the other
Transaction Documents. Any such qualifications and filings will, in the case of
qualifications, be effective on the Closing and will, in the case of filings, be
made within the time prescribed by law.

    
      
         

      

      
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    (f)           No Violation or
Conflict.  Assuming the representations and warranties of the
Subscriber in Section 3 are true and correct, neither the issuance nor sale of
the Debentures nor the performance of the Company’s obligations under this
Agreement and all other Transaction Documents entered into by the Company
relating thereto will:

     

    (i)  
violate, conflict with, result in a breach of, or constitute a default (or an
event which with the giving of notice or the lapse of time or both would be
reasonably likely to constitute a default) under (A) the articles or certificate
of incorporation, charter or bylaws of the Company, or (B) to the Company’s
knowledge, any decree, judgment, order, law, treaty, rule, regulation or
determination applicable to the Company of any court, governmental agency or
body, or arbitrator having jurisdiction over the Company or over the properties
or assets of the Company or any of its Affiliates; or

     

    (ii)           result
in the creation or imposition of any lien, charge or encumbrance upon the
Debentures or any of the assets of the Company or any of its
Subsidiaries.

     

    (g)          The Debentures.  The
Debentures upon issuance:

     

    (i)           are,
or will be, free and clear of any security interests, liens, claims or other
encumbrances, subject only to restrictions upon transfer under the 1933 Act and
any applicable state securities laws;

    

    (ii)          have
been, or will be, duly and validly authorized and on the date of issuance of the
Conversion Shares, the Conversion Shares will be duly and validly issued, fully
paid and nonassessable;

     

    (iii)         will
not have been issued or sold in violation of any preemptive or other similar
rights of the holders of any securities of the Company or rights to acquire
securities of the Company; and

     

    (iv)         will
not subject the holders thereof to personal liability by reason of being such
holders.

     

    (h)           Litigation.  There
is no pending or, to the best knowledge of the Company, threatened action, suit,
proceeding or investigation before any court, governmental agency or body, or
arbitrator having jurisdiction over the Company, or any of its Affiliates that
would affect the execution by the Company or the complete and timely performance
by the Company of its obligations under the Transaction
Documents.  

     

    (i)           Information Concerning
Company.  The Reports contain all material information relating
to the Company and its operations and financial condition as of their respective
dates which information is required to be disclosed
therein.   The Reports, including the financial statements
included therein do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, taken as a whole, not misleading in light of the
circumstances and when made.

    
      
         

      

      
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    (k)           No General
Solicitation.  Neither the Company, nor any of its Affiliates,
nor to its knowledge, any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Debentures.

    

    (l)           Reporting
Company.  The Company is a publicly-held company subject to
reporting obligations pursuant to Section 13 of the Securities Exchange Act of
1934, as amended (the “1934
Act”).  Pursuant to the provisions of the 1934 Act, the Company
has filed all reports and other materials required to be filed thereunder with
the Commission during the preceding twelve months.

     

    (m)         Survival.  The
foregoing representations and warranties shall survive for a period of one year
after the Closing Date.

     

    (n)          No
Brokers.  Neither the Company nor any Subsidiary has taken any
action which would give rise to any claim by any person for brokerage
commissions, finder’s fees or similar payments relating to this Agreement or the
transactions contemplated hereby.

     

    5.           Registration
Rights.

     

    (a)   Registration Statement
Requirements.  The Company shall file with the Commission a
Form S-1 registration statement (the “Registration Statement”) (or
such other form that it is eligible to use) in order to register all or such
portion of the Registrable Shares as permitted by the Commission (provided that
the Company shall use diligent efforts to advocate with the Commission for the
registration of all of the Registrable Shares) pursuant to Rule 415 for resale
and distribution under the 1933 Act as soon as practicable after the Closing
Date, and use its reasonable efforts to cause the Registration Statement to be
declared effective.  The Company will register not less than 100% of
the Conversion Shares in the Registration Statement (the “Registrable
Shares”).

     

      
(b)           Registration
Procedures. If and whenever the Company is required by the provisions of
Section 5(a) to effect the registration of any Registrable Shares under the 1933
Act, the Company will, as expeditiously as possible:

     

    (i)  
prepare and file with the Commission a registration statement with respect to
such securities and use it commercially reasonable efforts to cause such
registration statement to become and remain effective for the period of the
distribution contemplated thereby;

     

    (ii)  prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective until such registration
statement has been effective for the earlier of (a) a period of one (1) year,
and (b) the date on which the Registrable Shares can been sold by the
Subscriber pursuant to Rule 144 without volume restrictions;

     

    
      
         

      

      
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    (iii)  notify
the Subscriber within twenty-four hours of the Company’s becoming aware that a
prospectus relating thereto is required to be delivered under the 1933 Act, of
the happening of any event of which the Company has knowledge as a result of
which the prospectus contained in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing or which
becomes subject to a Commission, state or other governmental order suspending
the effectiveness of the registration statement covering any of the Registrable
Shares. Each Subscriber hereby covenants that it will not sell any Registrable
Shares pursuant to such prospectus during the period commencing at the time at
which the Company gives such Subscriber notice of the suspension of the use of
such prospectus and ending at the time the Company gives such Subscriber notice
that such Subscriber may thereafter effect sales pursuant to the prospectus, or
until the Company delivers to such Subscriber or files with the Commission an
amended or supplemented prospectus.

     

    (c)           Provision of
Documents.  It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Shares of a particular Subscriber that
such Subscriber shall furnish to the Company in writing such information and
representation letters, including a completed form of the selling securityholder
questionnaire, with respect to itself and the proposed distribution by it as the
Company may reasonably request to assure compliance with federal and applicable
state securities laws.

     

    (d)           Expenses.  All
expenses incurred by the Company in complying with Section 5, including, without
limitation, all registration and filing fees, printing expenses (if required),
fees and disbursements of counsel and independent public accountants for the
Company, fees and expenses (including reasonable counsel fees) incurred in
connection with complying with state securities or “blue sky” laws, fees of the
FINRA, transfer taxes, and fees of transfer agents and registrars, are called
“Registration Expenses.”
The Company will pay all Registration Expenses in connection with any
registration statement described in Section 5.

    
      
         

      

      
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               (e)           Indemnification and
Contribution.

     

    (i)  In
the event of a registration of any Registrable Shares under the 1933 Act
pursuant to Section 5, the Company will, to the extent permitted by law,
indemnify and hold harmless the Subscriber, each of the officers, directors,
agents, Affiliates, members, managers, control persons, and principal
shareholders of the Subscriber, each underwriter of such Registrable Shares
thereunder and each other person, if any, who controls such Subscriber or
underwriter within the meaning of the 1933 Act, against any losses, claims,
damages or liabilities, joint or several, to which the Subscriber, or such
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Registrable Shares was registered under the 1933 Act pursuant
to Section 5, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances when made, and will subject to the provisions of
Section 5(e)(iii) reimburse the Subscriber, each such underwriter and each such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
the Subscriber to the extent that any such damages arise out of or are based
upon an untrue statement or omission made in any preliminary prospectus if (i)
the Subscriber failed to send or deliver a copy of the final prospectus
delivered by the Company to the Subscriber with or prior to the delivery of
written confirmation of the sale by the Subscriber to the person asserting the
claim from which such damages arise, and the final prospectus would have
corrected such untrue statement or alleged untrue statement or such omission or
alleged omission, or (ii) to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such Subscriber in writing specifically for use in such
registration statement or prospectus.

     

    (ii) 
In the event of a registration of any of the Registrable Shares under the 1933
Act pursuant to Section 5, each Subscriber severally but not jointly will, to
the extent permitted by law, indemnify and hold harmless the Company, and each
person, if any, who controls the Company within the meaning of the 1933 Act,
each officer of the Company who signs the registration statement, each director
of the Company, each underwriter and each person who controls any underwriter
within the meaning of the 1933 Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such officer, director,
underwriter or controlling person may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the registration statement
under which such Registrable Shares were registered under the 1933 Act pursuant
to Section 5, any preliminary prospectus or final prospectus contained therein,
or any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Subscriber will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such Subscriber, as such,
furnished in writing to the Company by such Subscriber specifically for use in
such registration statement or prospectus.

    
      
         

      

      
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    (iii)  Promptly
after receipt by an indemnified party hereunder of notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party other
than under this Section 5(e)(iii) and shall only relieve it from any liability
which it may have to such indemnified party under this Section 5(e)(iii), except
and only if and to the extent the indemnifying party is prejudiced by such
omission. In case any such action shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 5(e)(iii) for any legal expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation and of liaison with counsel so selected,
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnifying party shall
have reasonably concluded that there may be reasonable defenses available to
indemnified party which are different from or additional to those available to
the indemnifying party or if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of the indemnifying party, the
indemnified parties, as a group, shall have the right to select one separate
counsel, reasonably satisfactory to the indemnified and indemnifying party, and
to assume such legal defenses and otherwise to participate in the defense of
such action, with the reasonable expenses and fees of such separate counsel and
other expenses related to such participation to be reimbursed by the
indemnifying party as incurred.

     

    6.      Closing
Conditions.

     

    (a)   The
obligation hereunder of the Subscriber to acquire and pay for the Debentures is
subject to the satisfaction or waiver, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Subscriber’s sole
benefit and may be waived by the Subscriber at any time in its sole
discretion.

       

    (i)  The
representations and warranties of the Company contained in this Agreement shall
have been true and correct on the date of this Agreement and shall be true and
correct on the Closing Date as if given on and as of the Closing Date (except
for representations given as of a specific date, which representations shall be
true and correct as of such date), and on or before the Closing Date the Company
shall have performed all covenants and agreements of the Company contained
herein or in any of the other Transaction Documents required to be performed by
the Company on or before the Closing Date; and

     

    (ii) The
Transaction Documents have been duly executed and delivered by the Company to
the Subscriber.

     

    (b)  The
obligation hereunder of the Company to issue and sell the Debentures to the
Purchaser is subject to the satisfaction or waiver, at or before the Closing, of
each of the conditions set forth below. These conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole
discretion.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (i)   The
representations and warranties of the Subscriber in this Agreement and each of
the other Transaction Documents to which the Subscriber is a party shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct in all material respects as of such date;

     

    (ii)  The
Purchase Price for the Debentures has been delivered to the Company;
and

     

    (iii) The
Transaction Documents to which the Subscriber is a party have been duly executed
and delivered by the Subscriber to the Company.

    
       

    

    7.           Miscellaneous.

     

    (a)  Notices.  All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice.  Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:

    

    If to the
Company, to:

    Pet
Airways, Inc.

    777 E.
Atlantic Ave, #C2-264

    Delray Beach, FL
33483

    
 

    If to the
Subscriber:

    To the
address and facsimile number listed on the signature page of this
Agreement

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)  Entire Agreement;
Amendment. This Agreement and the other Transaction Documents contain the
entire understanding and agreement of the parties with respect to the matters
covered hereby and, except as specifically set forth herein or in the
Transaction Documents, neither the Company nor the Subscriber makes any
representations, warranty, covenant or undertaking with respect to such matters
and they supersede all prior understandings and agreements with respect to said
subject matter, all of which are merged herein. No provision of this Agreement
nor any of the Transaction Documents may be waived or amended other than by a
written instrument signed by the Company and the Subscriber, and no provision
hereof may be waived other than by a written instrument signed by the party
against whom enforcement of any such waiver is sought.

     

     (c)  Counterparts/Execution.  This
Agreement may be executed in any number of counterparts and by the different
signatories hereto on separate counterparts, each of which, when so executed,
shall be deemed an original, but all such counterparts shall constitute but one
and the same instrument.  This Agreement may be executed by facsimile
transmission, PDF, electronic signature or other similar electronic means with
the same force and effect as if such signature page were an original
thereof.

     

    (d)   Law Governing this
Agreement.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of laws. Any action brought by either party against the
other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the state and county of New York.  The parties to this Agreement
hereby irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non
conveniens.  The parties executing this Agreement
and other agreements referred to herein or delivered in connection herewith on
behalf of the Company agree to submit to the in personam jurisdiction of such
courts and hereby irrevocably waive trial by jury.  The
prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs.  In the event that any provision
of this Agreement or any other agreement delivered in connection herewith is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision of any agreement.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction
Documents by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall be deemed to limit in any way
any right to serve process in any other manner permitted by law.

     

    (e)    Consent to
Jurisdiction.  The Company and the Subscriber hereby
irrevocably waive, and agree not to assert in any such suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction in
New York of such court, that the suit, action or proceeding is brought in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper.  Nothing in this Section shall affect or limit any right to
serve process in any other manner permitted by law.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    (f)  Captions: Certain
Definitions.  The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes of
convenience; such captions are not a part of this Agreement and shall not be
deemed in any manner to modify, explain, enlarge or restrict any of the
provisions of this Agreement.  As used in this Agreement the term
“person” shall mean and
include an individual, a partnership, a joint venture, a corporation, a limited
liability company, a trust, an unincorporated organization and a government or
any department or agency thereof.

     

    (j)   Severability.  In
the event that any term or provision of this Agreement shall be finally
determined to be superseded, invalid, illegal or otherwise unenforceable
pursuant to applicable law by an authority having jurisdiction and venue, that
determination shall not impair or otherwise affect the validity, legality or
enforceability: (i) by or before that authority of the remaining terms and
provisions of this Agreement, which shall be enforced as if the unenforceable
term or provision were deleted, or (ii) by or before any other authority of any
of the terms and provisions of this Agreement.

     

    [Signature
Pages Follow]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SIGNATURE PAGE TO
SUBSCRIPTION AGREEMENT

       

    Please
acknowledge your acceptance of the foregoing Subscription Agreement
with _____________________________
by signing and returning a copy to the Company whereupon it shall become a
binding agreement.

    

    PRINCIPAL
AMOUNT OF DEBENTURES =   ______________  (the “Purchase
Price”)

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 
      	 
      	 
      
	
                                                        Signature

                                                      	 
      	
                                                        Signature
      (if purchasing jointly)

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Name
      Typed or Printed

                                                      	 
      	
                                                        Name
      Typed or Printed

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Entity
      Name

                                                      	 
      	
                                                        Entity
      Name

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Address

                                                      	 
      	
                                                        Address

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        City,
      State and Zip Code

                                                      	 
      	
                                                        City,
      State and Zip Code

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Telephone
      - Business

                                                      	 
      	
                                                        Telephone
      - Business

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Telephone
      – Residence

                                                      	 
      	
                                                        Telephone
      – Residence

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Facsimile
      – Business

                                                      	 
      	
                                                        Facsimile
      - Business

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Facsimile
      – Residence

                                                      	 
      	
                                                        Facsimile
      – Residence

                                                      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                                                        Tax
      ID # or Social Security #

                                                      	 
      	
                                                        Tax
      ID # or Social Security
#

                                                      

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    Name in
which securities should be issued:  
_________________________________

     

    Dated:                         __,
2010

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    This
Subscription Agreement is agreed to and accepted as
of              __,
2010.

     

    
      
        
          
            	
                    AMERICAN
      ANTIQUITIES INCORPORATED

                  
	 
      
	
                    By:  

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

    

     

    
      
         

      

      
        16NEW
GENERATION BIOFUELS HOLDINGS, INC.

    WARRANT

    TO
PURCHASE COMMON STOCK

     

    Issue
Date:          August ___,
2010 (the “Issue
Date”)

    

    THIS WARRANT IS TO CERTIFY
THAT, the registered holder hereof or its permitted assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from New Generation
Biofuels Holdings, Inc., a Florida corporation (the “Company”), ________
shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at
$0.30 per share, as adjusted from time to time pursuant to Section 2 hereof (the
“Exercise
Price”). Subject to the terms and conditions hereof, this Warrant may be
exercised by the Holder at any time after the six month anniversary of the Issue
Date but prior to the fifth anniversary of the Issue Date (as further defined
herein, the “Expiration Date”), in
whole or in part.

    

    Section
1.            Exercise
of Warrant.

     

    (a)           Mechanics of
Exercise.  (i)  This Warrant may be exercised by the
Holder, in whole or in part, by delivering to the Company at its office
identified in Section
14 hereof (i) a written notice of exercise, in the form attached hereto
as Exhibit A
(the “Notice of
Exercise”), including the number of Warrant Shares to be delivered
pursuant to such exercise, (ii) this Warrant and (iii) payment to the Company of
an amount equal to the Exercise Price multiplied by the number of Warrant Shares
as to which this Warrant is being exercised (the “Aggregate Exercise
Price”) in cash or wire transfer of immediately available
funds.

     

    (ii)           The
Holder shall not be required to surrender this Warrant in order to effect an
exercise hereunder, provided that this Warrant is surrendered to the Company by
the second Business Day following the date on which the Company has received
each of the Notice of Exercise and the Aggregate Exercise Price (the “Exercise Delivery
Documents”).  On or before the first Business Day following the
date on which the Company has received the Exercise Delivery Documents, the
Company shall transmit by facsimile an acknowledgment of confirmation of receipt
of the Exercise Delivery Documents to the Holder and the Company’s transfer
agent (the “Transfer
Agent”).  The Company shall deliver any objection to the
Exercise Delivery Documents on or before the second Business Day following the
date on which the Company has received all of the Exercise Delivery
Documents.  In the event of any discrepancy or dispute, the records of
the Company shall be controlling and determinative in the absence of manifest
error.  On or before the third Business Day following the date on
which the Company has received all of the Exercise Delivery Documents and after
the Company has received this Warrant (the “Share Delivery
Date”), the Company shall, (A) provided that the Transfer Agent is
participating in The Depository Trust Company (“DTC”) Fast Automated
Securities Transfer Program (the “FAST Program”) and so
long as the certificates therefor are not required to bear a legend regarding
restriction on transferability, upon the request of the Holder, credit such
aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with
DTC through its Deposit Withdrawal Agent Commission system, or (B) if the
Transfer Agent is not participating in the FAST Program or if the certificates
are required to bear a legend regarding restriction on transferability, issue
and dispatch by overnight courier to the address as specified in the Notice of
Exercise, a certificate, registered in the Company’s share register in the name
of the Holder or its designee, for the number of shares of Common Stock to which
the Holder is entitled pursuant to such exercise.  Upon delivery of
the Exercise Delivery Documents and surrender of this Warrant, the Holder shall
be deemed for all corporate purposes to have become the holder of record of the
Warrant Shares with respect to which this Warrant has been exercised,
irrespective of the date such Warrant Shares are credited to the Holder’s DTC
account or the date of delivery of the certificates evidencing such Warrant
Shares, as the case may be.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (iii)           If
this Warrant is submitted in connection with any exercise pursuant to this
Section 1(a) and the number of Warrant Shares represented by this Warrant
submitted for exercise is greater than the number of Warrant Shares being
acquired upon an exercise, then the Company shall as soon as practicable and in
no event later than five (5) Business Days after any exercise and at its own
expense, issue a new Warrant representing the right to purchase the number of
Warrant Shares purchasable immediately prior to such exercise under this
Warrant, less the number of Warrant Shares with respect to which this Warrant is
exercised.  The Company shall pay any and all taxes that may be
payable with respect to the issuance and delivery of Warrant Shares upon
exercise of this Warrant.

     

    (b)          Payment
upon exercise of this Warrant must be made in cash at anytime the Warrant Shares
are included for resale in a then effective registration statement filed with
the Securities and Exchange Commission.  Payment upon exercise may be made
at the option of the Holder either in (i) cash, wire transfer or by certified or
official bank check payable to the order of the Company equal to the applicable
aggregate Purchase Price, (ii) by delivery of Common Stock issuable upon
exercise of the Warrants in accordance with Section (b) below or
(iii) by a combination of any of the foregoing methods, for the number of
Common Stock specified in such form (as such exercise number shall be adjusted
to reflect any adjustment in the total number of shares of Common Stock issuable
to the holder per the terms of this Warrant) and the holder shall thereupon be
entitled to receive the number of duly authorized, validly issued, fully-paid
and non-assessable shares of Common Stock (or Other Securities) determined as
provided herein.  Notwithstanding the immediately preceding sentence,
payment upon exercise may be made in the manner described in Section 2(b) below
commencing one hundred and eighty (180) days after the Issue Date, only with
respect to Warrant Shares not included for
unrestricted public resale in an effective Registration Statement on the date
notice of exercise is given by the Holder.

     

    (1)       
Subject to the provisions herein to the contrary, if the Fair Market Value of
one share of Common Stock is greater than the Purchase Price (at the date of
calculation as set forth below), in lieu of exercising this Warrant for cash,
the holder may elect to receive shares equal to the value (as determined below)
of this Warrant (or the portion thereof being cancelled) by delivery of a
properly endorsed Subscription Form delivered to the Company by any means
described in XXX 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 shares of
Common Stock to be issued to the Holder

     

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

     

    A=      
Fair Market Value

     

    B=       
Purchase Price (as adjusted to the date of such calculation)

     

    For purposes of Rule 144 promulgated
under the 1933 Act, it is intended, understood and acknowledged that the Warrant
Shares issued in a cashless exercise transaction in the manner described above
shall be deemed to have been acquired by the Holder, and the holding period for
the Warrant Shares shall be deemed to have commenced, on the date this Warrant
was originally issued pursuant to the Subscription Agreement.

     

    (c)          The
stock certificate or certificates for the Warrant Shares to be delivered in
accordance with this Section 1 shall be in
such denominations as may be specified in said notice of exercise and shall be
registered in the name of the Holder or such other name or names as shall be
designated in said notice. Such certificate or certificates shall be deemed to
have been issued and the Holder or any other person so designated to be named
therein shall be deemed to have become the holder of record of such shares,
including to the extent permitted by law the right to vote such shares or to
consent or to receive notice as shareholders, as of the time said notice is
delivered to the Company as aforesaid.

    
      
         

      

      
        - 2
-

        
          

        

      

      
         

      

    

     

    (d)           The
Company shall pay all expenses payable in connection with the preparation, issue
and delivery of stock certificates under this Section 1; provided, however, that the
Holder shall be responsible for all transfer taxes resulting from the fact that
any certificate issued in respect of the Warrant Shares is not in the name of
the Holder.

     

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

     

    (f)           In
no event shall the warrant be exercised for less than one whole share of
the Company except in the case of the final exercise of the warrant, and in such
event the Company shall deliver in cash to such holder an amount equal to such
fractional interest.

     

    Section
2.            Adjustment
of Warrant Shares and Exercise Price.

     

    If the
Company at any time on or after the Issue Date subdivides (by any stock split,
stock dividend, recapitalization, reorganization, scheme, arrangement or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the number of Warrant Shares will be proportionately
increased and the Exercise Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Company at any time on or after the
Issue Date combines (by any stock split, stock dividend, recapitalization,
reorganization, scheme, arrangement or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the number
of Warrant Shares will be proportionately decreased and the Exercise Price in
effect immediately prior to such combination will be proportionately increased.
Any adjustment under this Section 2 shall become effective at the close of
business on the date the subdivision or combination becomes
effective.

     

    Section
3.            Rights
Upon Distribution of Assets.

     

    If the
Company shall declare or make any dividend or other distribution of its assets
or rights to acquire its assets to the record holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any
distribution of cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement, scheme of
arrangement or other similar transaction) (a “Distribution”), then
any Exercise Price in effect immediately prior to the close of business on the
record date fixed for the determination of holders of shares of Common Stock
entitled to receive the Distribution shall be reduced, effective as of the close
of business on such record date, to a price determined by multiplying such
Exercise Price by a fraction of which (i) the numerator shall be the weighted
average price of the shares of Common Stock on the Trading Day immediately
preceding such record date minus the value of the Distribution (as determined in
good faith by the Company’s Board of Directors) applicable to one share of
Common Stock, and (ii) the denominator shall be the weighted average price of
the shares of Common Stock on the Trading Day immediately preceding such record
date.

    
      
         

      

      
        - 3
-

        
          

        

      

      
         

      

    

     

    Section
4.            Fundamental
Transaction.

     

    Upon the
occurrence of any Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Warrant referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Warrant with the same effect as if such Successor Entity had been named as the
Company herein.  Upon consummation of the Fundamental Transaction, the
Successor Entity shall deliver to the Holder confirmation that there shall be
issued upon exercise of this Warrant at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of the Common Stock (or other
securities, cash, assets or other property purchasable upon the exercise of the
Warrant prior to such Fundamental Transaction), such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had this Warrant
been converted immediately prior to such Fundamental Transaction, as adjusted in
accordance with the provisions of this Warrant.  In addition to and
not in substitution for any other rights hereunder, prior to the consummation of
any Fundamental Transaction pursuant to which holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in
exchange for shares of Common Stock (a “Corporate Event”),
the Company shall make appropriate provision to insure that the Holder will
thereafter have the right to receive upon an exercise of this Warrant within 90
days after the consummation of the Fundamental Transaction but, in any event,
prior to the Expiration Date, in lieu of the shares of the Common Stock (or
other securities, cash, assets or other property) purchasable upon the exercise
of the Warrant prior to such Fundamental Transaction, such shares of stock,
securities, cash, assets or any other property whatsoever (including warrants or
other purchase or subscription rights) which the Holder would have been entitled
to receive upon the happening of such Fundamental Transaction had the Warrant
been exercised immediately prior to such Fundamental Transaction.  The
provisions of this Section shall apply similarly and equally to successive
Fundamental Transactions and Corporate Events and shall be applied without
regard to any limitations on the exercise of this Warrant.

     

    Section
5.            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, subject to the provisions of Section 2.

     

    Section
6.            Noncircumvention.

     

    The
Company hereby covenants and agrees that the Company will not, by amendment of
its Articles of Incorporation, Bylaws or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all
action as may be required to protect the rights of the
Holder.  Without limiting the generality of the foregoing, the Company
(i) shall not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the Exercise Price then in
effect, (ii) shall use all reasonable efforts to take all such actions as
may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable shares of Common Stock upon the
exercise of this Warrant and (iii) shall, so long as any of the Warrants are
outstanding, take all action necessary to reserve and keep available out of its
authorized and unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, the number of shares of Common Stock as
shall from time to time be necessary to effect the exercise of the Warrants then
outstanding (without regard to any limitations on exercise).

     

    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 Shares shall
have been issued, as provided herein.

    
      
         

      

      
        - 4
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    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 Holder to
purchase Warrant Shares hereunder, shall give rise to any liability of the
Holder to pay the Exercise Price or as a shareholder of the Company (whether
such liability is asserted by the Company or creditors of the
Company).

     

    Section
10.          Transfer,
Division and Combination.

     

    This
Warrant may be transferred without the written consent of the Company. Any
Warrants issued upon the transfer of this Warrant shall be numbered and shall be
registered in a Warrant Register as they are issued. The Company shall be
entitled to treat the registered holder of any Warrant on the Warrant Register
as the owner in fact thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such Warrant on the
part of any other person, and shall not be liable for any registration of
transfer of Warrants that are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with the actual knowledge
that a fiduciary or nominee is committing a breach of trust in requesting such
registration or transfer, or with the knowledge of such facts that its
participation therein amounts to bad faith. This Warrant shall be transferable
only on the books of the Company upon delivery thereof duly endorsed by the
Holder or by his duly authorized attorney or representative, or accompanied by
proper evidence of succession, assignment, or authority to transfer. In all
cases of transfer by an attorney, executor, administrator, guardian, or other
legal representative, duly authenticated evidence of his or its authority shall
be produced. Upon any registration of transfer, the Company shall deliver a new
Warrant or Warrants to the person entitled thereto. Notwithstanding the
foregoing, the Company shall have no obligation to cause Warrants to be
transferred on its books to any person if, in the opinion of counsel to the
Company, such transfer does not comply with the provisions of the Securities Act
and the rules and regulations thereunder. This Warrant may be divided or
combined with other warrants of like tenor and representing in the aggregate a
like amount, upon presentation at the aforesaid office of the Company, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney. The
Company shall pay all expenses in connection with the preparation, issue and
delivery of Warrants under this Section 10. The
Company agrees to maintain at its aforesaid office books for the registration of
the Warrants.

     

    Section
11.          Loss, Destruction
of Warrant Certificates.

     

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

     

    Section
12.          Amendment and
Waiver.

     

    Except as
otherwise provided herein, the provisions of this Warrant may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if (but only if) the Company has obtained the
written consent from the majority of the holders of the Warrant Series; provided, that no
such action (other than those contemplated by Sections 3 or 4) may increase the
exercise price of this Warrant or decrease the number of shares or class of
stock obtainable upon exercise of this Warrant without the written consent of
the Holder.  No such amendment shall be effective to the extent that
it applies to less than all of the holders of the Warrant Series then
outstanding.

    
      
         

      

      
        - 5
-

        
          

        

      

      
         

      

    

     

    Section
13.          Notices
Generally.

     

    Any
notice, request, consent, other communication or delivery pursuant to the
provisions hereof shall be in writing and shall be sent by one of the following
means: (i) by registered or certified first class mail, postage prepaid, return
receipt requested; (ii) by facsimile transmission with confirmation of receipt;
(iii) by overnight courier service; or (iv) by personal delivery, and shall be
properly addressed to the Holder at the last known address or facsimile number
appearing on the books of the Company, or, except as herein otherwise expressly
provided, to the Company at its principal executive office at New Generation
Biofuels Holdings, Inc., 5850 Waterloo Road, Suite 140, Columbia, Maryland
21045, (Fax: 443-638-0277), Attention: Cary J. Claiborne, or such other address
or facsimile number as shall have been furnished to the party giving or making
such notice, demand or delivery.

     

    Section
14.          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
15.          Governing
Law.

     

    This
Warrant shall be governed by and construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and
performance of this Warrant shall be governed by, the internal laws of the State
of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York.

     

    Section
16.          Dispute
Resolution Regarding Exercise Price and Warrant Shares.

     

    In the
case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the Warrant Shares, the Company shall submit the
disputed determinations or arithmetic calculations within two Business Days of
receipt of the Exercise Notice giving rise to such dispute, as the case may be,
to the Holder.  If the Holder and the Company are unable to agree upon
such determination or calculation of the Exercise Price or the Warrant Shares
within five Business Days of such disputed determination or arithmetic
calculation being submitted to the Holder, then the Company shall, within two
Business Days submit the disputed arithmetic calculation of the Warrant Shares
to the Company’s independent, outside accountant.  The Company shall
cause the accountant to perform the determinations or calculations and notify
the Company and the Holder of the results no later than ten Business Days from
the time it receives the disputed determinations or
calculations.  Such accountant’s determination or calculation shall be
binding upon all parties absent demonstrable error.  The expenses of
the accountant will be borne by the Company unless the accountant determines
that the determination of the Exercise Price or the arithmetic calculation of
the Warrant Shares by the Holder was demonstrably in error, in which case the
expenses of the accountant will be borne by the Holder.

     

    Section
17.          Certain
Definitions.

    

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

    

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

     

    “Convertible
Securities” shall mean evidence of indebtedness, preferred stock or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.

    
      
         

      

      
        - 6
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    “Eligible Market”
shall mean the NYSE Amex, The New York Stock Exchange, Inc., The NASDAQ Global
Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, or the OTC
Bulletin Board.®

     

    “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.

     

    “Expiration Date”
shall mean the fifth anniversary of the Issuance Date or, if such date falls on
a day other than a Business Day, the next date that is a Business
Day.

     

    “Fundamental
Transaction” shall mean that the Company shall, directly or indirectly,
in one or more related transactions, (i) consolidate or merge with or into
another Person, (ii) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company to another
Person, (iii) allow another Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the Person or
Persons making or party to, or associated or affiliated with the Persons making
or party to, such purchase, tender or exchange offer), (iv) consummate a stock
purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with
another Person whereby such other Person acquires more than 50% of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or
affiliated with the other Persons making or party to, such stock purchase
agreement or other business combination), (v) reclassify its Common Stock or
(vi) any “person” or “group” (as these terms are used for purposes of Sections
13(d) and 14(d) of the Exchange Act) is or shall become the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock.

     

    “Options” shall mean
shall mean options to subscribe for, purchase or otherwise acquire Common Stock
or Convertible Securities granted or issued by the Company, but excluding
Employee Awards.

    

    “Parent Entity” of a
Person means an entity that, directly or indirectly, controls the applicable
Person and whose common stock or equivalent equity security is quoted or listed
on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market
capitalization as of the date of consummation of the Fundamental
Transaction.

     

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

     

    “Registration
Statement” shall mean the Company’s Registration Statement on Form S-3
(No. 333-156449).

     

    “Securities Act” shall
mean the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

     

    “Successor Entity”
shall mean the Person formed by, resulting from or surviving any Fundamental
Transaction or the Person (or Parent Entity of such Person, if the Successor
Entity does not have common stock or equivalent equity security is quoted or
listed on an Eligible Market) with which such Fundamental Transaction shall have
been entered into.

     

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

    
      
         

      

      
        - 7
-

        
          

        

      

      
         

      

    

     

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

     

    “Warrant Series” shall
mean all warrants substantial identical to this Warrant other than the identity
of the Holder issued on or about the Issue Date.

     

    [Signature
Page Follows]

    
      
         

      

      
        - 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: 

                	 
      
	 
      	
                  Name:
      Cary J. Claiborne

                
	 
      	
                  Title:
      President, Chief Executive Officer and Chief

                  Financial
      Officer

                

        

      

    
  

    
      
         

      

      
        - 9
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      EXHIBIT
A

    

     

    NOTICE
OF EXERCISE

     

    (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.

    

    The
undersigned holder hereby exercises the right to purchase _________________ of
the shares of Common Stock (“Warrant Shares”) of
New Generation Biofuels Holdings, Inc., a Florida corporation (the “Company”), evidenced
by the attached Warrant to Purchase Common Stock (the “Warrant”).  Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Warrant.

    

    1.           Exercise
Price.  The Holder intends that payment of the Exercise Price
shall be with respect to                                       Warrant
Shares.

    

    2.           Payment of Exercise
Price.  The Holder shall pay the Aggregate Exercise Price in
the sum of $                               
to the Company in accordance with the terms of the Warrant.

    

    3.           Delivery of Warrant
Shares.  The Company shall deliver to the holder                              Warrant
Shares in accordance with the terms of the Warrant.

    

    4.           Delivery.  The
shares of Warrant Shares shall be delivered to the
following: 

    
      
        
          	
                    

                
	
                    

                
	
                    

                

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    [SIGNATURE
OF HOLDER]

      

    
      
        
          
            	
                    Name
      of Investing Entity:

                  
	 

          

        

      

    

    
      	Signature
      of Authorized Signatory of Investing Entity: 
	 
	
               Name
      of Authorized Signatory:

            
	 
	
              Title
      of Authorized Signatory: 

            
	 

    

    
      
        
        

      

    

      

    
      
        
          
            	
                    Date: 

                  	 
      

          

        

      

       

    

    
      
         

      

      
        - 2
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