Document:

Unassociated Document

    FORBEARANCE

    TO

    LOAN
AND SECURITY AGREEMENT

     

    This
FORBEARANCE to Loan and
Security Agreement (this “Forbearance”) is
entered into this 20th day of September, 2010 by and between Silicon Valley Bank
(“Bank”) and US DATAWORKS, INC., a
Nevada corporation (“Borrower”) whose address is One Sugar Creek Center
Blvd., 5th Floor, Sugar
Land, TX 77478.

     

    Recitals

     

    1.           Bank and Borrower have entered into that
certain Loan and Security Agreement dated as of February 9, 2010, as
amended by that certain First Amendment to Loan and Security Agreement dated as
of March 5, 2010 and that certain Second Amendment to Loan and Security
Agreement dated as of April 23, 2010 (as the same may from time to time be
further amended, modified, supplemented or restated, the “Loan
Agreement”).  Bank has extended credit to Borrower for the purposes
permitted in the Loan Agreement.

     

    2.           Borrower
is currently in default of the Loan Agreement for (I) failing to comply
with the covenants set forth in (i) Section 6.7(a) of the Loan Agreement for the
April, May, June and July 2010 measuring periods and (ii) Section 6.7(b) of the
Loan Agreement for the May, June and July 2010 measuring periods and (II) making
payments with respect to Subordinated Debt in violation of Section 7.9 of the
Loan Agreement and Section 3 of the Subordination Agreement (collectively, the
“Existing Defaults”).

     

    3.           Borrower
has requested that Bank forbear from exercising its rights and remedies against
Borrower from the date hereof through September 30, 2010 (the “Forbearance
Period”).  Although Bank is under no obligation to do so, Bank is
willing to forbear from exercising its rights and remedies against Borrower
through the Forbearance Period on the terms and conditions set forth in this
Forbearance, so long as Borrower complies with the terms, covenants and
conditions set forth in this Forbearance in a timely manner.

     

    Agreement

     

    Now,
Therefore, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

     

    1.           Definitions.  Capitalized
terms used but not defined in this Forbearance shall have the meanings given to
them in the Loan Agreement.

     

    2.           Forbearance.

     

    2.1           Forbearance
Period.  So long as no Event of Default, other than the
Existing Defaults, occurs, subject to the terms and conditions set forth herein,
Bank shall forbear from filing any legal action or instituting or enforcing any
rights and remedies it may have against Borrower through the Forbearance
Period.  Except as expressly provided herein, this Forbearance does
not constitute a waiver or release by Bank of any Obligations or of any existing
Event of Default other than the Existing Defaults or Event of Default which may
arise in the future after the date of execution of this
Forbearance.  If Borrower does not comply with the terms of this
Forbearance, Bank shall have no further obligations under this Forbearance and
shall be permitted to exercise at such time any rights and remedies against
Borrower as it deems appropriate in its sole and absolute
discretion.  Borrower understands that Bank has made no commitment and
is under no obligation whatsoever to grant any additional extensions of time at
the end of the Forbearance Period.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    2.2           Forbearance
Terms.  Repayment and performance of all obligations of
Borrower to Bank under the Loan Agreement and this Forbearance shall be secured
by the Collateral.  Borrower shall not be permitted to request and
Bank shall not make any Credit Extensions until the Existing Defaults have been
waived in writing by Bank.

     

    3.           Limitation
of Forbearance.

     

    3.1           This
Forbearance is effective for the purposes set forth herein and shall be limited
precisely as written and shall not be deemed to (a) be a consent to any
amendment, waiver or modification of any other term or condition of any Loan
Document, or (b) otherwise prejudice any right or remedy which Bank may now
have or may have in the future under or in connection with any Loan
Document.

     

    3.2           This
Forbearance shall be construed in connection with and as part of the Loan
Documents and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Loan Documents are hereby ratified and confirmed and
shall remain in full force and effect.

     

    4.           Representations and
Warranties.  To induce Bank to enter into this Forbearance,
Borrower hereby represents and warrants to Bank as follows:

     

    4.1           Immediately
after giving effect to this Forbearance and the delivery of the updates to the
Perfection Certificate (which Bank acknowledges it has received and hereby
consents to), (a) the representations and warranties contained in the Loan
Documents are true, accurate and complete in all material respects as of the
date hereof (except to the extent such representations and warranties relate to
an earlier date, in which case they are true and correct as of such date), and
(b) no Event of Default other than the Existing Defaults has occurred and is
continuing;

     

    4.2           Borrower
has the power and authority to execute and deliver this Forbearance and to
perform its obligations under the Loan Agreement;

     

    4.3           The
organizational documents of Borrower delivered to Bank on the Effective Date as
supplemented by the additional organizational documents subsequently delivered
to Bank (which Bank acknowledges it has received) remain true, accurate and
complete and have not been amended, supplemented or restated and are and
continue to be in full force and effect;

     

    4.4           The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement have been duly authorized
by all necessary action on the part of Borrower;

     

    4.5           The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement do not and will not
contravene (a) any law or regulation binding on or affecting Borrower,
(b) any contractual restriction with a Person binding on Borrower,
(c) any order, judgment or decree of any court or other governmental or
public body or authority, or subdivision thereof, binding on Borrower, or
(d) the organizational documents of Borrower;

     

    4.6           The
execution and delivery by Borrower of this Forbearance and the performance by
Borrower of its obligations under the Loan Agreement do not require any order,
consent, approval, license, authorization or validation of, or filing, recording
or registration with, or exemption by any governmental or public body or
authority, or subdivision thereof, binding on either Borrower, except as already
has been obtained or made; and

     

    4.7           This
Forbearance has been duly executed and delivered by Borrower and is the binding
obligation of Borrower, enforceable against Borrower in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium or other similar laws of general
application and equitable principles relating to or affecting creditors’
rights.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    5.           Prior
Agreement.  The Loan Documents are hereby ratified and
reaffirmed and shall remain in full force and effect.  This
Forbearance is not a novation and the terms and conditions of this Forbearance
shall be in addition to and supplemental to all terms and conditions set forth
in the Loan Documents.  In the event of any conflict or inconsistency
between this Forbearance and the terms of such documents, the terms of this
Forbearance shall be controlling, but such document shall not otherwise be
affected or the rights therein impaired.

     

    6.           Release by
Borrower.

     

    6.1           FOR GOOD AND VALUABLE
CONSIDERATION, Borrower hereby forever relieves, releases, and discharges
Bank and its present or former employees, officers, directors, agents,
representatives, attorneys, and each of them, from any and all claims, debts,
liabilities, demands, obligations, promises, acts, agreements, costs and
expenses, actions and causes of action, of every type, kind, nature, description
or character whatsoever, whether known or unknown, suspected or unsuspected,
absolute or contingent, arising out of or in any manner whatsoever connected
with or related to facts, circumstances, issues, controversies or claims
existing or arising from the beginning of time through and including the date of
execution of this Forbearance (collectively “Released
Claims”).  Without limiting the foregoing, the Released Claims
shall include any and all liabilities or claims arising out of or in any manner
whatsoever connected with or related to the Loan Documents, the Recitals hereto,
any instruments, agreements or documents executed in connection with any of the
foregoing or the origination, negotiation, administration, servicing and/or
enforcement of any of the foregoing.

     

    6.2           In
furtherance of this release, Borrower expressly acknowledges and waives any and
all rights under Section 1542 of the California Civil Code, which provides as
follows:

     

    “A general release does not
extend to claims which the creditor does not know or expect to exist in his
favor at the time of executing the release, which if known by him must have
materially affected his settlement with the debtor.” (Emphasis
added.)

     

    6.3           By
entering into this release, Borrower recognizes that no facts or representations
are ever absolutely certain and it may hereafter discover facts in addition to
or different from those which it presently knows or believes to be true, but
that it is the intention of Borrower hereby to fully, finally and forever settle
and release all matters, disputes and differences, known or unknown, suspected
or unsuspected; accordingly, if Borrower should subsequently discover that any
fact that it relied upon in entering into this release was untrue, or that any
understanding of the facts was incorrect, Borrower shall not be entitled to set
aside this release by reason thereof, regardless of any claim of mistake of fact
or law or any other circumstances whatsoever.  Borrower acknowledges
that it is not relying upon and has not relied upon any representation or
statement made by Bank with respect to the facts underlying this release or with
regard to any of such party’s rights or asserted rights.

     

    6.4           This
release may be pleaded as a full and complete defense and/or as a
cross-complaint or counterclaim against any action, suit, or other proceeding
that may be instituted, prosecuted or attempted in breach of this
release.  Borrower acknowledges that the release contained herein
constitutes a material inducement to Bank to enter into this Forbearance, and
that Bank would not have done so but for Bank’s expectation that such release is
valid and enforceable in all events.

     

    6.5           Borrower
hereby represents and warrants to Bank, and Bank is relying thereon, as
follows:

     

    (a)           Except
as expressly stated in this Forbearance, neither Bank nor any agent, employee or
representative of Bank has made any statement or representation to Borrower
regarding any fact relied upon by Borrower in entering into this
Forbearance.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (b)           Borrower
has made such investigation of the facts pertaining to this Forbearance and all
of the matters appertaining thereto, as it deems necessary.

     

    (c)           The
terms of this Forbearance are contractual and not a mere recital.

     

    (d)           This
Forbearance has been carefully read by Borrower, the contents hereof are known
and understood by Borrower, and this Forbearance is signed freely, and without
duress, by Borrower.

     

    (e)           Borrower
represents and warrants that it is the sole and lawful owner of all right, title
and interest in and to every claim and every other matter which it releases
herein, and that it has not heretofore assigned or transferred, or purported to
assign or transfer, to any person, firm or entity any claims or other matters
herein released.  Borrower shall indemnify Bank, defend and hold it
harmless from and against all claims based upon or arising in connection with
prior assignments or purported assignments or transfers of any claims or matters
released herein.

     

    7.           Counterparts.  This
Forbearance may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.

     

    8.           Effectiveness.  This
Forbearance shall be deemed effective upon (a) the due execution and delivery to
Bank of this Forbearance by each party hereto, (b) Borrower’s repayment of all
Obligations owing to Bank under the Revolving Line in excess of One Hundred
Thousand Dollars ($100,000), (c) Borrower’s payment of forbearance fee in
an amount equal to Two Thousand Five Hundred Dollars ($2,500) and (d) the due execution and delivery to Bank
of completed Borrowing Resolutions for Borrower.

     

    9.           Governing Law.  This
Forbearance and the rights and obligations of the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.

     

    [Signature
page follows.]

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    In Witness
Whereof, the parties hereto have caused this Forbearance to be duly
executed and delivered as of the date first written above.

     

    
      
        	
                BANK

                 

                SILICON
      VALLEY BANK

                 

                 

                By:
      /s/ Phillip A.
      Wright

                Name:  Phillip A.
      Wright

                Title:
      Relationship
      Manager

              	
                BORROWER

                 

                US
      DATAWORKS, INC.

                 

                 

                By:
      /s/ Randall J.
      Frapart

                Name:  Randall J.
      Frapart

                Title:
      Chief Financial
      OfficerNEW
GENERATION BIOFUELS HOLDINGS, INC.

    WARRANT

    TO
PURCHASE COMMON STOCK

     

    Issue
Date:         September ___, 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
$0.15 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
-

        
          

        

      

      
         

      

    

     

    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
-

        
          

        

      

      
         

      

    

     

    “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
-

        
          

        

      

      
         

      

    

    
      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
-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00178-of-00352.parquet"}]]