Document:

AMERICAN
        ETHANOL, INC.

      

      2007
        STOCK PLAN

      

      

      1. Purposes
        of the Plan.
        The
        purposes of this Plan are to attract and retain the best available personnel
        for
        positions of substantial responsibility, to provide additional incentive
        to
        Employees, Directors and Consultants and to promote the success of the Company’s
        business. Options granted under the Plan may be Incentive Stock Options or
        Nonstatutory Stock Options, as determined by the Administrator at the time
        of
        grant. Stock Purchase Rights may also be granted under the Plan.

      

      2. Definitions.
        As used
        herein, the following definitions shall apply:

      

      (a) “Administrator”
means
        the Board or any of its Committees as shall be administering the Plan in
        accordance with Section 4 hereof.

      

      (b) “Applicable
        Laws”
means
        the requirements relating to the administration of stock option plans under
        U.S.
        state corporate laws, U.S. federal and state securities laws, the Code, any
        stock exchange or quotation system on which the Common Stock is listed or
        quoted
        and the applicable laws of any other country or jurisdiction where Options
        or
        Stock Purchase Rights are granted under the Plan.

      

      (c) “Board”
means
        the Board of Directors of the Company.

      

      (d) “Change
        in Control”
means
        the occurrence of any of the following events:

      

      (i) Any
        “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
        becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
        directly or indirectly, of securities of the Company representing fifty percent
        (50%) or more of the total voting power represented by the Company’s then
        outstanding voting securities; or

      

      (ii) The
        consummation of the sale or disposition by the Company of all or substantially
        all of the Company’s assets; or

      

      (iii) The
        consummation of a merger or consolidation of the Company with any other
        corporation, other than a merger or consolidation which would result in the
        voting securities of the Company outstanding immediately prior thereto
        continuing to represent (either by remaining outstanding or by being converted
        into voting securities of the surviving entity or its parent) at least fifty
        percent (50%) of the total voting power represented by the voting securities
        of
        the Company or such surviving entity or its parent outstanding immediately
        after
        such merger or consolidation.

      

      (e) “Code”
means
        the Internal Revenue Code of 1986, as amended.

      

      (f) “Committee”
means
        a
        committee of Directors or of other individuals satisfying Applicable Laws
        appointed by the Board in accordance with Section 4 hereof.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (g) “Common
        Stock”
means
        the Common Stock of the Company.

      

      (h) “Company”
means
        American Ethanol, Inc., a Nevada corporation.

      

      (i) “Consultant”
means
        any person who is engaged by the Company or any Parent or Subsidiary to render
        consulting or advisory services to such entity.

      

      (j) “Director”
means
        a
        member of the Board.

      

      (k) “Disability”
means
        total and permanent disability as defined in Section 22(e)(3) of the
        Code.

      

      (l) “Employee”
means
        any person, including officers and Directors, employed by the Company or
        any
        Parent or Subsidiary of the Company. Neither service as a Director nor payment
        of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.

      

      (m) “Exchange
        Act”
means
        the Securities Exchange Act of 1934, as amended.

      

      (n) “Fair
        Market Value”
means,
        as of any date, the value of Common Stock determined as follows:

      

      (i) If
        the
        Common Stock is listed on any established stock exchange or a national market
        system, including without limitation the Nasdaq National Market or The Nasdaq
        SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be
        the
        closing sales price for such stock (or the closing bid, if no sales were
        reported) as quoted on such exchange or system on the day of determination,
        as
        reported in The
        Wall Street Journal
        or such
        other source as the Administrator deems reliable;

      

      (ii) If
        the
        Common Stock is regularly quoted by a recognized securities dealer but selling
        prices are not reported, its Fair Market Value shall be the mean between
        the
        high bid and low asked prices for the Common Stock on the day of determination;
        or

      

      (iii) In
        the
        absence of an established market for the Common Stock, the Fair Market Value
        thereof shall be determined in good faith by the Administrator.

      

      (o) “Incentive
        Stock Option”
means
        an Option intended to qualify as an incentive stock option within the meaning
        of
        Section 422 of the Code.

      

      (p) “Nonstatutory
        Stock Option”
means
        an Option not intended to qualify as an Incentive Stock Option.

      

      (q) “Option”
means
        a
        stock option granted pursuant to the Plan.

      

      (r) “Option
        Agreement”
means
        a
        written or electronic agreement between the Company and an Optionee evidencing
        the terms and conditions of an individual Option grant. The Option Agreement
        is
        subject to the terms and conditions of the Plan.

       

      
        
           

        

        
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      (s) “Optioned
        Stock”
means
        the Common Stock subject to an Option or a Stock Purchase Right.

      

      (t) “Optionee”
means
        the holder of an outstanding Option or Stock Purchase Right granted under
        the
        Plan.

      

      (u) “Parent”
means
        a
“parent corporation,” whether now or hereafter existing, as defined in
        Section 424(e) of the Code.

      

      (v) “Plan”
means
        this 2007 Stock Plan.

      

      (w) “Restricted
        Stock”
        means
        Shares issued pursuant to a Stock Purchase Right or Shares of restricted
        stock
        issued pursuant to an Option.

      

      (x) “Restricted
        Stock Purchase Agreement”
means
        a
        written agreement between the Company and the Optionee evidencing the terms
        and
        restrictions applying to Shares purchased under a Stock Purchase Right. The
        Restricted Stock Purchase Agreement is subject to the terms and conditions
        of
        the Plan and the notice of grant. 

      

      (y) “Service
        Provider”
means
        an Employee, Director or Consultant.

      

      (z) “Share”
means
        a
        share of the Common Stock, as adjusted in accordance with Section 13
        below.

      

      (aa) “Stock
        Purchase Right”
means
        a
        right to purchase Common Stock pursuant to Section 11 below. 

      

      (bb) “Subsidiary”
means
        a
“subsidiary corporation,” whether now or hereafter existing, as defined in
        Section 424(f) of the Code.

      

      3. Stock
        Subject to the Plan.
        Subject
        to the provisions of Section 13 of the Plan, the maximum aggregate number
        of Shares that may be subject to Options or Stock Purchase Rights and sold
        under
        the Plan is 4,000,000 Shares. The Shares may be authorized but unissued,
        or
        reacquired Common Stock.

      

      If
        an
        Option or Stock Purchase Right expires or becomes unexercisable without having
        been exercised in full, the unpurchased Shares that were subject thereto
        shall
        become available for future grant or sale under the Plan (unless the Plan
        has
        terminated). However, Shares that have actually been issued under the Plan,
        upon
        exercise of either an Option or Stock Purchase Right, shall not be returned
        to
        the Plan and shall not become available for future distribution under the
        Plan,
        except that if unvested Shares of Restricted Stock are repurchased by the
        Company at their original purchase price, such Shares shall become available
        for
        future grant under the Plan.

      

      4. Administration
        of the Plan.

      

      (a) Administrator.
        The
        Plan shall be administered by the Board or a Committee appointed by the Board,
        which Committee shall be constituted to comply with Applicable
        Laws.

       

      
        
           

        

        
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      (b) Powers
        of the Administrator.
        Subject
        to the provisions of the Plan and, in the case of a Committee, the specific
        duties delegated by the Board to such Committee, and subject to the approval
        of
        any relevant authorities, the Administrator shall have the authority in its
        discretion:

      

      (i) to
        determine the Fair Market Value;

      

      (ii) to
        select
        the Service Providers to whom Options and Stock Purchase Rights may from
        time to
        time be granted hereunder;

      

      (iii) to
        determine the number of Shares to be covered by each such award granted
        hereunder;

      

      (iv) to
        approve forms of agreement for use under the Plan;

      

      (v) to
        determine the terms and conditions of any Option or Stock Purchase Right
        granted
        hereunder. Such terms and conditions include, but are not limited to, the
        exercise price, the time or times when Options or Stock Purchase Rights may
        be
        exercised (which may be based on performance criteria), any vesting acceleration
        or waiver of forfeiture restrictions, and any restriction or limitation
        regarding any Option or Stock Purchase Right or the Common Stock relating
        thereto, based in each case on such factors as the Administrator, in its
        sole
        discretion, shall determine;

      

      (vi) to
        prescribe, amend and rescind rules and regulations relating to the Plan,
        including rules and regulations relating to sub-plans established for the
        purpose of satisfying applicable foreign laws;

      

      (vii) to
        allow
        Optionees to satisfy withholding tax obligations by electing to have the
        Company
        withhold from the Shares to be issued upon exercise of an Option or Stock
        Purchase Right that number of Shares having a Fair Market Value equal to
        the
        minimum amount required to be withheld. The Fair Market Value of the Shares
        to
        be withheld shall be determined on the date that the amount of tax to be
        withheld is to be determined. All elections by Optionees to have Shares withheld
        for this purpose shall be made in such form and under such conditions as
        the
        Administrator may deem necessary or advisable; and

      

      (viii) to
        construe and interpret the terms of the Plan and Options granted pursuant
        to the
        Plan.

      

      (c) Effect
        of Administrator’s Decision.
        All
        decisions, determinations and interpretations of the Administrator shall
        be
        final and binding on all Optionees.

      

      5. Eligibility.
        Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service
        Providers. Incentive Stock Options may be granted only to
        Employees.

      

      6. Limitations.

      

      (a) Incentive
        Stock Option Limit.
        Each
        Option shall be designated in the Option Agreement as either an Incentive
        Stock
        Option or a Nonstatutory Stock Option. However, notwithstanding such
        designation, to the extent that the aggregate Fair Market Value of the Shares
        with respect to which Incentive Stock Options are exercisable for the first
        time
        by the Optionee during any calendar year (under all plans of the Company
        and any
        Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
        Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
        Stock Options shall be taken into account in the order in which they were
        granted. The Fair Market Value of the Shares shall be determined as of the
        time
        the Option with respect to such Shares is granted.

       

      
        
           

        

        
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      (b) At-Will
        Employment.
        Neither
        the Plan nor any Option or Stock Purchase Right shall confer upon any Optionee
        any right with respect to continuing the Optionee’s relationship as a Service
        Provider with the Company, nor shall it interfere in any way with his or
        her
        right or the Company’s right to terminate such relationship at any time, with or
        without cause, and with or without notice.

      

      7. Term
        of Plan.
        Subject
        to stockholder approval in accordance with Section 19, the Plan shall
        become effective upon its adoption by the Board. Unless sooner terminated
        under
        Section 15, it shall continue in effect for a term of ten (10) years from
        the later of (i) the effective date of the Plan, or (ii) the earlier
        of the most recent Board or stockholder approval of an increase in the number
        of
        Shares reserved for issuance under the Plan.

      

      8. Term
        of Option.
        The
        term of each Option shall be stated in the Option Agreement; provided, however,
        that the term shall be no more than ten (10) years from the date of grant
        thereof. In the case of an Incentive Stock Option granted to an Optionee
        who, at
        the time the Option is granted, owns stock representing more than ten percent
        (10%) of the voting power of all classes of stock of the Company or any Parent
        or Subsidiary, the term of the Option shall be five (5) years from the date
        of
        grant or such shorter term as may be provided in the Option
        Agreement.

      

      9. Option
        Exercise Price and Consideration.

      

      (a) Exercise
        Price.
        The per
        share exercise price for the Shares to be issued upon exercise of an Option
        shall be such price as is determined by the Administrator, but shall be subject
        to the following:

      

      (i) In
        the
        case of an Incentive Stock Option

      

      (A) granted
        to an Employee who, at the time of grant of such Option, owns stock representing
        more than ten percent (10%) of the voting power of all classes of stock of
        the
        Company or any Parent or Subsidiary, the exercise price shall be no less
        than
        110% of the Fair Market Value per Share on the date of grant.

      

      (B) granted
        to any other Employee, the per Share exercise price shall be no less than
        100%
        of the Fair Market Value per Share on the date of grant.

      

      (ii) In
        the
        case of a Nonstatutory Stock Option, the per Share exercise price shall be
        determined by the Administrator.

      

      (iii) Notwithstanding
        the foregoing, Options may be granted with a per Share exercise price other
        than
        as required above pursuant to a merger or other corporate
        transaction.

       

      
        
           

        

        
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      (b) Forms
        of Consideration.
        The
        consideration to be paid for the Shares to be issued upon exercise of an
        Option,
        including the method of payment, shall be determined by the Administrator
        (and,
        in the case of an Incentive Stock Option, shall be determined at the time
        of
        grant). Such consideration may consist of, without limitation, (i) cash,
        (ii) check, (iii) promissory note, (iv) other Shares, provided
        Shares that were acquired directly from the Company (x) have been owned by
        the Optionee for more than six months on the date of surrender, and
        (y) have a Fair Market Value on the date of surrender equal to the
        aggregate exercise price of the Shares as to which such Option shall be
        exercised, (v) consideration received by the Company under a cashless
        exercise program implemented by the Company in connection with the Plan,
        or
        (vi) any combination of the foregoing methods of payment. In making its
        determination as to the type of consideration to accept, the Administrator
        shall
        consider if acceptance of such consideration may be reasonably expected to
        benefit the Company. 

      

      10. Exercise
        of Option.

      

      (a) Procedure
        for Exercise; Rights as a Stockholder.
        Any
        Option granted hereunder shall be exercisable according to the terms hereof
        at
        such times and under such conditions as determined by the Administrator and
        set
        forth in the Option Agreement. An Option may not be exercised for a fraction
        of
        a Share.

      

      An
        Option
        shall be deemed exercised when the Company receives: (i) written or
        electronic notice of exercise (in accordance with the Option Agreement) from
        the
        person entitled to exercise the Option, and (ii) full payment for the
        Shares with respect to which the Option is exercised. Full payment may consist
        of any consideration and method of payment authorized by the Administrator
        and
        permitted by the Option Agreement and the Plan. Shares issued upon exercise
        of
        an Option shall be issued in the name of the Optionee or, if requested by
        the
        Optionee, in the name of the Optionee and his or her spouse. Until the Shares
        are issued (as evidenced by the appropriate entry on the books of the Company
        or
        of a duly authorized transfer agent of the Company), no right to vote or
        receive
        dividends or any other rights as a stockholder shall exist with respect to
        the
        Shares, notwithstanding the exercise of the Option. The Company shall issue
        (or
        cause to be issued) such Shares promptly after the Option is exercised. No
        adjustment will be made for a dividend or other right for which the record
        date
        is prior to the date the Shares are issued, except as provided in
        Section 13 of the Plan.

      

      Exercise
        of an Option in any manner shall result in a decrease in the number of Shares
        thereafter available for sale under the Option, by the number of Shares as
        to
        which the Option is exercised.

      

      (b) Termination
        of Relationship as a Service Provider.
        If an
        Optionee ceases to be a Service Provider, such Optionee may exercise his
        or her
        Option within such period of time as is specified in the Option Agreement
        to the
        extent that the Option is vested on the date of termination (but in no event
        later than the expiration of the term of the Option as set forth in the Option
        Agreement). In the absence of a specified time in the Option Agreement, the
        Option shall remain exercisable for three (3) months following the Optionee’s
        termination. If, on the date of termination, the Optionee is not vested as
        to
        his or her entire Option, the Shares covered by the unvested portion of the
        Option shall revert to the Plan. If, after termination, the Optionee does
        not
        exercise his or her Option within the time specified by the Administrator,
        the
        Option shall terminate, and the Shares covered by such Option shall revert
        to
        the Plan.

       

      
        
           

        

        
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      (c) Disability
        of Optionee.
        If an
        Optionee ceases to be a Service Provider as a result of the Optionee’s
        Disability, the Optionee may exercise his or her Option within such period
        of
        time as is specified in the Option Agreement to the extent the Option is
        vested
        on the date of termination (but in no event later than the expiration of
        the
        term of such Option as set forth in the Option Agreement). In the absence
        of a
        specified time in the Option Agreement, the Option shall remain exercisable
        for
        twelve (12) months following the Optionee’s termination. If, on the date of
        termination, the Optionee is not vested as to his or her entire Option, the
        Shares covered by the unvested portion of the Option shall revert to the
        Plan.
        If, after termination, the Optionee does not exercise his or her Option within
        the time specified herein, the Option shall terminate, and the Shares covered
        by
        such Option shall revert to the Plan.

      

      (d) Death
        of Optionee.
        If an
        Optionee dies while a Service Provider, the Option may be exercised within
        such
        period of time as is specified in the Option Agreement (but in no event later
        than the expiration of the term of such Option as set forth in the Option
        Agreement), by the Optionee’s designated beneficiary, provided such beneficiary
        has been designated prior to Optionee’s death in a form acceptable to the
        Administrator. If no such beneficiary has been designated by the Optionee,
        then
        such Option may be exercised by the personal representative of the Optionee’s
        estate or by the person(s) to whom the Option is transferred pursuant to
        the
        Optionee’s will or in accordance with the laws of descent and distribution. In
        the absence of a specified time in the Option Agreement, the Option shall
        remain
        exercisable for twelve (12) months following the Optionee’s termination. If, at
        the time of death, the Optionee is not vested as to his or her entire Option,
        the Shares covered by the unvested portion of the Option shall immediately
        revert to the Plan. If the Option is not so exercised within the time specified
        herein, the Option shall terminate, and the Shares covered by such Option
        shall
        revert to the Plan.

      

      (e) Leaves
        of Absence.
        

      

      (i) Unless
        the Administrator provides otherwise, vesting of Options granted hereunder
        shall
        be suspended during any unpaid leave of absence. 

      

      (ii) A
        Service
        Provider shall not cease to be an Employee in the case of (A) any leave of
        absence approved by the Company or (B) transfers between locations of the
        Company or between the Company, its Parent, any Subsidiary, or any successor.
        

      

      (iii) For
        purposes of Incentive Stock Options, no such leave may exceed ninety (90)
        days,
        unless reemployment upon expiration of such leave is guaranteed by statute
        or
        contract. If reemployment upon expiration of a leave of absence approved
        by the
        Company is not so guaranteed, then three (3) months following the 91st
        day of
        such leave, any Incentive Stock Option held by the Optionee shall cease to
        be
        treated as an Incentive Stock Option and shall be treated for tax purposes
        as a
        Nonstatutory Stock Option.

       

      
        
           

        

        
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      11. Stock
        Purchase Rights.

      

      (a) Rights
        to Purchase.
        Stock
        Purchase Rights may be issued either alone, in addition to, or in tandem
        with
        other awards granted under the Plan and/or cash awards made outside of the
        Plan.
        After the Administrator determines that it will offer Stock Purchase Rights
        under the Plan, it shall advise the offeree in writing or electronically
        of the
        terms, conditions and restrictions related to the offer, including the number
        of
        Shares that such person shall be entitled to purchase, the price to be paid,
        and
        the time within which such person must accept such offer. The offer shall
        be
        accepted by execution of a Restricted Stock Purchase Agreement in the form
        determined by the Administrator. 

      

      (b) Repurchase
        Option.
        Unless
        the Administrator determines otherwise, the Restricted Stock Purchase Agreement
        shall grant the Company a repurchase option exercisable within 90 days of
        the
        voluntary or involuntary termination of the purchaser’s service with the Company
        for any reason (including death or disability). The purchase price for Shares
        repurchased pursuant to the Restricted Stock Purchase Agreement shall be
        the
        original price paid by the purchaser and may be paid by cancellation of any
        indebtedness of the purchaser to the Company. The repurchase option shall
        lapse
        at such rate as the Administrator may determine.

      

      (c) Other
        Provisions.
        The
        Restricted Stock Purchase Agreement shall contain such other terms, provisions
        and conditions not inconsistent with the Plan as may be determined by the
        Administrator in its sole discretion. 

      

      (d) Rights
        as a Stockholder.
        Once
        the Stock Purchase Right is exercised, the purchaser shall have rights
        equivalent to those of a stockholder and shall be a stockholder when his
        or her
        purchase is entered upon the records of the duly authorized transfer agent
        of
        the Company. No adjustment shall be made for a dividend or other right for
        which
        the record date is prior to the date the Stock Purchase Right is exercised,
        except as provided in Section 13 of the Plan.

      

      12. Transferability
        of Options and Stock Purchase Rights.
        Unless
        determined otherwise by the Administrator, Options and Stock Purchase Rights
        may
        not be sold, pledged, assigned, hypothecated, transferred, or disposed of
        in any
        manner other than by will or the laws of descent and distribution, and may
        be
        exercised during the lifetime of the Optionee, only by the Optionee.

      

      13. Adjustments;
        Dissolution or Liquidation; Merger or Change in Control.

      

      (a) Adjustments.
        In the
        event that any dividend or other distribution (whether in the form of cash,
        Shares, other securities, or other property), recapitalization, stock split,
        reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
        combination, repurchase, or exchange of Shares or other securities of the
        Company, or other change in the corporate structure of the Company affecting
        the
        Shares occurs, the Administrator, in order to prevent diminution or enlargement
        of the benefits or potential benefits intended to be made available under
        the
        Plan, may (in its sole discretion) adjust the number and class of Shares
        that
        may be delivered under the Plan and/or the number, class, and price of Shares
        covered by each outstanding Option or Stock Purchase Right.

      

      (b) Dissolution
        or Liquidation.
        In the
        event of the proposed dissolution or liquidation of the Company, the
        Administrator shall notify each Optionee as soon as practicable prior to
        the
        effective date of such proposed transaction. To the extent it has not been
        previously exercised, an Option or Stock Purchase Right will terminate
        immediately prior to the consummation of such proposed action.

       

      
        
           

        

        
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      (c) Merger
        or Change in Control.
        In the
        event of a merger of the Company with or into another corporation, or a Change
        in Control, each outstanding Option and Stock Purchase Right shall be assumed
        or
        an equivalent option substituted by the successor corporation or a Parent
        or
        Subsidiary of the successor corporation. In the event that the successor
        corporation in a merger or Change in Control refuses to assume or substitute
        for
        the Option or Stock Purchase Right, then the Optionee shall fully vest in
        and
        have the right to exercise the Option or Stock Purchase Right as to all of
        the
        Optioned Stock, including Shares as to which it would not otherwise be vested
        or
        exercisable. If an Option or Stock Purchase Right becomes fully vested and
        exercisable in lieu of assumption or substitution in the event of a merger
        or
        Change in Control, the Administrator shall notify the Optionee in writing
        or
        electronically that the Option or Stock Purchase Right shall be fully
        exercisable for a period of fifteen (15) days from the date of such notice,
        and
        the Option or Stock Purchase Right shall terminate upon expiration of such
        period. For the purposes of this paragraph, the Option or Stock Purchase
        Right
        shall be considered assumed if, following the merger or Change in Control,
        the
        option or right confers the right to purchase or receive, for each Share
        of
        Optioned Stock subject to the Option or Stock Purchase Right immediately
        prior
        to the merger or Change in Control, the consideration (whether stock, cash,
        or
        other securities or property) received in the merger or Change in Control
        by
        holders of Common Stock for each Share held on the effective date of the
        transaction (and if holders were offered a choice of consideration, the type
        of
        consideration chosen by the holders of a majority of the outstanding Shares);
        provided, however, that if such consideration received in the merger or Change
        in Control is not solely common stock of the successor corporation or its
        Parent, the Administrator may, with the consent of the successor corporation,
        provide for the consideration to be received upon the exercise of the Option
        or
        Stock Purchase Right, for each Share of Optioned Stock subject to the Option
        or
        Stock Purchase Right, to be solely common stock of the successor corporation
        or
        its Parent equal in fair market value to the per share consideration received
        by
        holders of common stock in the merger or Change in Control.

      

      14. Time
        of Granting Options and Stock Purchase Rights.
        The
        date of grant of an Option or Stock Purchase Right shall, for all purposes,
        be
        the date on which the Administrator makes the determination granting such
        Option
        or Stock Purchase Right, or such later date as is determined by the
        Administrator. Notice of the determination shall be given to each Service
        Provider to whom an Option or Stock Purchase Right is so granted within a
        reasonable time after the date of such grant.

      

      15. Amendment
        and Termination of the Plan.

      

      (a) Amendment
        and Termination.
        The
        Board may at any time amend, alter, suspend or terminate the Plan.

      

      (b) Stockholder
        Approval.
        The
        Board shall obtain stockholder approval of any Plan amendment to the extent
        necessary and desirable to comply with Applicable Laws.

      

      (c) Effect
        of Amendment or Termination.
        No
        amendment, alteration, suspension or termination of the Plan shall impair
        the
        rights of any Optionee, unless mutually agreed otherwise between the Optionee
        and the Administrator, which agreement must be in writing and signed by the
        Optionee and the Company. Termination of the Plan shall not affect the
        Administrator’s ability to exercise the powers granted to it hereunder with
        respect to Options granted under the Plan prior to the date of such
        termination.

       

      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

       

      16. Conditions
        Upon Issuance of Shares.

      

      (a) Legal
        Compliance.
        Shares
        shall not be issued pursuant to the exercise of an Option or Stock Purchase
        Right unless the exercise of such Option or Stock Purchase Right and the
        issuance and delivery of such Shares shall comply with Applicable Laws and
        shall
        be further subject to the approval of counsel for the Company with respect
        to
        such compliance.

      

      (b) Investment
        Representations.
        As a
        condition to the exercise of an Option or Stock Purchase Right, the
        Administrator may require the person exercising such Option to represent
        and
        warrant at the time of any such exercise that the Shares are being purchased
        only for investment and without any present intention to sell or distribute
        such
        Shares if, in the opinion of counsel for the Company, such a representation
        is
        required.

      

      17. Inability
        to Obtain Authority.
        The
        inability of the Company to obtain authority from any regulatory body having
        jurisdiction, which authority is deemed by the Company’s counsel to be necessary
        to the lawful issuance and sale of any Shares hereunder, shall relieve the
        Company of any liability in respect of the failure to issue or sell such
        Shares
        as to which such requisite authority shall not have been obtained.

      

      18. Reservation
        of Shares.
        The
        Company, during the term of this Plan, shall at all times reserve and keep
        available such number of Shares as shall be sufficient to satisfy the
        requirements of the Plan.

      

      19. Stockholder
        Approval.
        The
        Plan shall be subject to approval by the stockholders of the Company within
        twelve (12) months after the date the Plan is adopted. Such stockholder approval
        shall be obtained in the degree and manner required under Applicable
        Laws.

       

      
        
           

        

        
          -10-AMERICAN
      ETHANOL, INC.

     

    
      2007
        STOCK PLAN

       

      STOCK
        OPTION AGREEMENT

      

      

      Unless
        otherwise defined herein, the terms defined in the 2007 Stock Plan shall
        have
        the same defined meanings in this Stock Option Agreement.

      

      I. NOTICE
        OF STOCK OPTION GRANT

      

      Name:

      

      Address:

      

      The
        undersigned Optionee has been granted an Option to purchase Common Stock
        of the
        Company, subject to the terms and conditions of the Plan and this Option
        Agreement, as follows:

      

        
          	
                  Date
                    of Grant

                	 	 
	 	 	 	 	 
	
                  Vesting
                    Commencement Date

                	 	 
	 	 	 	 	 
	
                  Exercise
                    Price per Share

                	
                  $

                	 	 
	 	 	 	 	 
	
                  Total
                    Number of Shares Granted

                	 	 
	 	 	 	 	 
	
                  Total
                    Exercise Price 

                	
                  $

                	 	 
	 	 	 	 	 
	
                  Type
                    of Option:

                	
                          
                    

                	
                  Incentive
                    Stock Option

                	 
	 	 	 	 	 
	 	
                   

                	
                  Nonstatutory
                    Stock Option

                	 
	 	 	 	 	 
	
                  Term/Expiration
                    Date:

                	 	 

        

      

      

      Vesting
        Schedule:

      

      This
        Option shall be exercisable, in whole or in part, according to the following
        vesting schedule:

      

      [25%
        of the Shares subject to the Option shall vest on the one (1) year anniversary
        of the Vesting Commencement Date, and 1/48 of the Option shall vest each
        month
        thereafter, subject to Optionee continuing to be a Service Provider on such
        dates.]

      

      Termination
        Period:

      

      This
        Option shall be exercisable for [three
        (3) months]
        after
        Optionee ceases to be a Service Provider. Upon Optionee’s death or Disability,
        this Option may be exercised for [one
        (1) year] after
        Optionee ceases to be a Service Provider. In no event may Optionee exercise
        this
        Option after the Term/Expiration Date as provided above.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      II. AGREEMENT

      

      1. Grant
        of Option.
        The
        Plan Administrator of the Company hereby grants to the Optionee named in
        the
        Notice of Grant (the “Optionee”), an option (the “Option”) to purchase the
        number of Shares set forth in the Notice of Grant, at the exercise price
        per
        Share set forth in the Notice of Grant (the “Exercise Price”), and subject to
        the terms and conditions of the Plan, which is incorporated herein by reference.
        Subject to Section 15(c) of the Plan, in the event of a conflict between
        the terms and conditions of the Plan and this Option Agreement, the terms
        and
        conditions of the Plan shall prevail.

      

      If
        designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
        Option is intended to qualify as an Incentive Stock Option as defined in
        Section 422 of the Code. Nevertheless, to the extent that it exceeds the
        $100,000 rule of Code Section 422(d), this Option shall be treated as a
        Nonstatutory Stock Option (“NSO”).

      

      2. Exercise
        of Option.

      

      (a) Right
        to Exercise.
        This
        Option shall be exercisable during its term in accordance with the Vesting
        Schedule set out in the Notice of Grant and with the applicable provisions
        of
        the Plan and this Option Agreement.

      

      (b) Method
        of Exercise.
        This
        Option shall be exercisable by delivery of an exercise notice in the form
        attached as Exhibit A
        (the
“Exercise Notice”) which shall state the election to exercise the Option, the
        number of Shares with respect to which the Option is being exercised, and
        such
        other representations and agreements as may be required by the Company. The
        Exercise Notice shall be accompanied by payment of the aggregate Exercise
        Price
        as to all Exercised Shares. This Option shall be deemed to be exercised upon
        receipt by the Company of such fully executed Exercise Notice accompanied
        by the
        aggregate Exercise Price.

      

      No
        Shares
        shall be issued pursuant to the exercise of an Option unless such issuance
        and
        such exercise complies with Applicable Laws. Assuming such compliance, for
        income tax purposes the Shares shall be considered transferred to the Optionee
        on the date on which the Option is exercised with respect to such
        Shares.

      

      3. Optionee’s
        Representations.
        In the
        event the Shares have not been registered under the Securities Act of 1933,
        as
        amended, at the time this Option is exercised, the Optionee shall, if required
        by the Company, concurrently with the exercise of all or any portion of this
        Option, deliver to the Company his or her Investment Representation Statement
        in
        the form attached hereto as Exhibit B.

      

      4. Lock-Up
        Period.
        Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract
        to
        sell, sell any option or contract to purchase, purchase any option or contract
        to sell, grant any option, right or warrant to purchase, lend, or otherwise
        transfer or dispose of, directly or indirectly, any Common Stock (or other
        securities) of the Company or enter into any swap, hedging or other arrangement
        that transfers to another, in whole or in part, any of the economic consequences
        of ownership of any Common Stock (or other securities) of the Company held
        by
        Optionee (other than those included in the registration) for a period specified
        by the representative of the underwriters of Common Stock (or other securities)
        of the Company not to exceed one hundred eighty (180) days following the
        effective date of any registration statement of the Company filed under the
        Securities Act. 

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      Optionee
        agrees to execute and deliver such other agreements as may be reasonably
        requested by the Company or the underwriter which are consistent with the
        foregoing or which are necessary to give further effect thereto. In addition,
        if
        requested by the Company or the representative of the underwriters of Common
        Stock (or other securities) of the Company, Optionee shall provide, within
        ten
        (10) days of such request, such information as may be required by the Company
        or
        such representative in connection with the completion of any public offering
        of
        the Company’s securities pursuant to a registration statement filed under the
        Securities Act. The obligations described in this Section shall not apply
        to a
        registration relating solely to employee benefit plans on Form S-1 or Form
        S-8
        or similar forms that may be promulgated in the future, or a registration
        relating solely to a Commission Rule 145 transaction on Form S-4 or similar
        forms that may be promulgated in the future. The Company may impose
        stop-transfer instructions with respect to the shares of Common Stock (or
        other
        securities) subject to the foregoing restriction until the end of said one
        hundred eighty (180) day period. Optionee agrees that any transferee of the
        Option or shares acquired pursuant to the Option shall be bound by this
        Section.

      

      5. Method
        of Payment.
        Payment
        of the aggregate Exercise Price shall be by any of the following, or a
        combination thereof, at the election of the Optionee:

      

      (a) cash
        or
        check;

      

      (b) consideration
        received by the Company under a formal cashless exercise program adopted
        by the
        Company in connection with the Plan; or 

      

      (c) surrender
        of other Shares which, (i) in the case of Shares acquired from the Company,
        either directly or indirectly, have been owned by the Optionee for more than
        six (6) months on the date of surrender, and (ii) have a Fair Market Value
        on the date of surrender equal to the aggregate Exercise Price of the Exercised
        Shares.

      

      6. Restrictions
        on Exercise.
        This
        Option may not be exercised until such time as the Plan has been approved
        by the
        stockholders of the Company, or if the issuance of such Shares upon such
        exercise or the method of payment of consideration for such shares would
        constitute a violation of any Applicable Law.

      

      7. Non-Transferability
        of Option.
        This
        Option may not be transferred in any manner otherwise than by will or by
        the
        laws of descent or distribution and may be exercised during the lifetime
        of
        Optionee only by Optionee. The terms of the Plan and this Option Agreement
        shall
        be binding upon the executors, administrators, heirs, successors and assigns
        of
        the Optionee.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      8. Term
        of Option.
        This
        Option may be exercised only within the term set out in the Notice of Grant,
        and
        may be exercised during such term only in accordance with the Plan and the
        terms
        of this Option.

      

      9. Tax
        Obligations.

      

      (a) Withholding
        Taxes.
        Optionee agrees to make appropriate arrangements with the Company (or the
        Parent
        or Subsidiary employing or retaining Optionee) for the satisfaction of all
        Federal, state, local and foreign income and employment tax withholding
        requirements applicable to the Option exercise. Optionee acknowledges and
        agrees
        that the Company may refuse to honor the exercise and refuse to deliver Shares
        if such withholding amounts are not delivered at the time of
        exercise.

      

      (b) Notice
        of Disqualifying Disposition of ISO Shares.
        If the
        Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
        disposes of any of the Shares acquired pursuant to the ISO on or before the
        later of (1) the date two years after the Date of Grant, or (2) the
        date one year after the date of exercise, the Optionee shall immediately
        notify
        the Company in writing of such disposition. Optionee agrees that Optionee
        may be
        subject to income tax withholding by the Company on the compensation income
        recognized by the Optionee.

      

      10. Entire
        Agreement; Governing Law.
        The
        Plan is incorporated herein by reference. The Plan and this Option Agreement
        constitute the entire agreement of the parties with respect to the subject
        matter hereof and supersede in their entirety all prior undertakings and
        agreements of the Company and Optionee with respect to the subject matter
        hereof, and may not be modified adversely to the Optionee’s interest except by
        means of a writing signed by the Company and Optionee. This agreement is
        governed by the internal substantive laws but not the choice of law rules
        of
[STATE].

      

      11. No
        Guarantee of Continued Service.
        OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE
        VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER
        AT
        THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED
        THIS
        OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND
        AGREES
        THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING
        SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE
        OF
        CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY
        PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR
        THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER
        AT ANY TIME, WITH OR WITHOUT CAUSE.

      

      Optionee
        acknowledges receipt of a copy of the Plan and represents that he or she
        is
        familiar with the terms and provisions thereof, and hereby accepts this Option
        subject to all of the terms and provisions thereof. Optionee has reviewed
        the
        Plan and this Option in their entirety, has had an opportunity to obtain
        the
        advice of counsel prior to executing this Option and fully understands all
        provisions of the Option. Optionee hereby agrees to accept as binding,
        conclusive and final all decisions or interpretations of the Administrator
        upon
        any questions arising under the Plan or this Option. Optionee further agrees
        to
        notify the Company upon any change in the residence address indicated
        below.

       

      
        
           

        

        
          -4-

          
            

          

        

        
           

        

      

       

      

        
          	
                  OPTIONEE

                	 	
                  AMERICAN
                    ETHANOL, INC.

                
	 	 	 
	 
	 	  

	
                  Signature

                	 	
                  By

                
	 	 	 
	  
	 	  

	
                  Print
                    Name

                	 	
                  Title

                
	 	 	 
	  
	 	 
	  
	 	 
	
                  Residence
                    Address

                	 	 

        

         

        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

         

      

      EXHIBIT
        A

       

      2007
        STOCK PLAN

       

      EXERCISE
        NOTICE

       

      AMERICAN
        ETHANOL, INC.

      Address:______________

       

      Attention:
        _____________

      

      1. Exercise
        of Option.
        Effective as of today, _____________, _____, the undersigned (“Optionee”) hereby
        elects to exercise Optionee’s option to purchase _________ shares of the Common
        Stock (the “Shares”) of AMERICAN
        ETHANOL, INC. (the
        “Company”) under and pursuant to the 2007 Stock Plan (the “Plan”) and the
        Stock Option Agreement dated ____________, ____ (the “Option
        Agreement”).

      

      2. Delivery
        of Payment.
        Optionee herewith delivers to the Company the full purchase price of the
        Shares,
        as set forth in the Option Agreement, and any and all withholding taxes due
        in
        connection with the exercise of the Option.

      

      3. Representations
        of Optionee.
        Optionee acknowledges that Optionee has received, read and understood the
        Plan
        and the Option Agreement and agrees to abide by and be bound by their terms
        and
        conditions.

      

      4. Rights
        as Stockholder.
        Until
        the issuance of the Shares (as evidenced by the appropriate entry on the
        books
        of the Company or of a duly authorized transfer agent of the Company), no
        right
        to vote or receive dividends or any other rights as a stockholder shall exist
        with respect to the Optioned Stock, notwithstanding the exercise of the Option.
        The Shares shall be issued to the Optionee as soon as practicable after the
        Option is exercised in accordance with the Option Agreement. No adjustment
        shall
        be made for a dividend or other right for which the record date is prior
        to the
        date of issuance except as provided in Section 13 of the Plan.

      

      5. Company’s
        Right of First Refusal
        Before
        any Shares held by Optionee or any transferee (either being sometimes referred
        to herein as the “Holder”) may be sold or otherwise transferred (including
        transfer by gift or operation of law), the Company or its assignee(s) shall
        have
        a right of first refusal to purchase the Shares on the terms and conditions
        set
        forth in this Section (the “Right of First Refusal”).

      

      (a) Notice
        of Proposed Transfer.
        The
        Holder of the Shares shall deliver to the Company a written notice (the
“Notice”) stating: (i) the Holder’s bona fide intention to sell or
        otherwise transfer such Shares; (ii) the name of each proposed purchaser or
        other transferee (“Proposed Transferee”); (iii) the number of Shares to be
        transferred to each Proposed Transferee; and (iv) the bona fide cash price
        or other consideration for which the Holder proposes to transfer the Shares
        (the
“Offered Price”), and the Holder shall offer the Shares at the Offered Price to
        the Company or its assignee(s).

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      (b) Exercise
        of Right of First Refusal.
        At any
        time within thirty (30) days after receipt of the Notice, the Company
        and/or its assignee(s) may, by giving written notice to the Holder, elect
        to
        purchase all, but not less than all, of the Shares proposed to be transferred
        to
        any one or more of the Proposed Transferees, at the purchase price determined
        in
        accordance with subsection (c) below.

      

      (c) Purchase
        Price.
        The
        purchase price (“Purchase Price”) for the Shares purchased by the Company or its
        assignee(s) under this Section shall be the Offered Price. If the Offered
        Price
        includes consideration other than cash, the cash equivalent value of the
        non-cash consideration shall be determined by the Board of Directors of the
        Company in good faith.

      

      (d) Payment.
        Payment
        of the Purchase Price shall be made, at the option of the Company or its
        assignee(s), in cash (by check), by cancellation of all or a portion of any
        outstanding indebtedness of the Holder to the Company (or, in the case of
        repurchase by an assignee, to the assignee), or by any combination thereof
        within thirty (30) days after receipt of the Notice or in the manner and at
        the times set forth in the Notice.

      

      (e) Holder’s
        Right to Transfer.
        If all
        of the Shares proposed in the Notice to be transferred to a given Proposed
        Transferee are not purchased by the Company and/or its assignee(s) as provided
        in this Section, then the Holder may sell or otherwise transfer such Shares
        to
        that Proposed Transferee at the Offered Price or at a higher price, provided
        that such sale or other transfer is consummated within 120 days after the
        date
        of the Notice, that any such sale or other transfer is effected in accordance
        with any applicable securities laws and that the Proposed Transferee agrees
        in
        writing that the provisions of this Section shall continue to apply to the
        Shares in the hands of such Proposed Transferee. If the Shares described
        in the
        Notice are not transferred to the Proposed Transferee within such period,
        a new
        Notice shall be given to the Company, and the Company and/or its assignees
        shall
        again be offered the Right of First Refusal before any Shares held by the
        Holder
        may be sold or otherwise transferred.

      

      (f) Exception
        for Certain Family Transfers.
        Anything to the contrary contained in this Section notwithstanding, the transfer
        of any or all of the Shares during the Optionee’s lifetime or on the Optionee’s
        death by will or intestacy to the Optionee’s immediate family or a trust for the
        benefit of the Optionee’s immediate family shall be exempt from the provisions
        of this Section. “Immediate Family” as used herein shall mean spouse, lineal
        descendant or antecedent, father, mother, brother or sister. In such case,
        the
        transferee or other recipient shall receive and hold the Shares so transferred
        subject to the provisions of this Section, and there shall be no further
        transfer of such Shares except in accordance with the terms of this
        Section.

      

      (g) Termination
        of Right of First Refusal.
        The
        Right of First Refusal shall terminate as to any Shares upon the earlier
        of (i)
        the first sale of Common Stock of the Company to the general public, or (ii)
        a
        Change in Control in which the successor corporation has equity securities
        that
        are publicly traded. 

       

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

       

      6. Tax
        Consultation.
        Optionee understands that Optionee may suffer adverse tax consequences as
        a
        result of Optionee’s purchase or disposition of the Shares. Optionee represents
        that Optionee has consulted with any tax consultants Optionee deems advisable
        in
        connection with the purchase or disposition of the Shares and that Optionee
        is
        not relying on the Company for any tax advice.

      

      7. Restrictive
        Legends and Stop-Transfer Orders.

      

      (a) Legends.
        Optionee understands and agrees that the Company shall cause the legends
        set
        forth below or legends substantially equivalent thereto, to be placed upon
        any
        certificate(s) evidencing ownership of the Shares together with any other
        legends that may be required by the Company or by state or federal securities
        laws:

      

      THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
        ACT
        OF 1933 (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
        PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN
        THE
        OPINION OF COMPANY COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
        SUCH
        OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
        THEREWITH.

      

      THE
        SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
        ON
        TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S)
        AS
        SET FORTH IN THE EXERCISE NOTICE BETWEEN THE ISSUER AND THE ORIGINAL HOLDER
        OF
        THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
        THE
        ISSUER. SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING
        ON
        TRANSFEREES OF THESE SHARES.

      

      THE
        SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER
        FOR A PERIOD NOT TO EXCEED 180 DAYS FOLLOWING THE EFFECTIVE DATE OF THE
        UNDERWRITTEN PUBLIC OFFERING OF THE COMPANY’S SECURITIES AND MAY NOT BE SOLD OR
        OTHERWISE DISPOSED OF BY THE HOLDER WITHOUT THE CONSENT OF THE COMPANY OR
        THE
        MANAGING UNDERWRITER.

      

      (b) Stop-Transfer
        Notices.
        Optionee agrees that, in order to ensure compliance with the restrictions
        referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
        its own securities, it may make appropriate notations to the same effect in
        its own records.

      

      (c) Refusal
        to Transfer.
        The
        Company shall not be required (i) to transfer on its books any Shares that
        have been sold or otherwise transferred in violation of any of the provisions
        of
        this Exercise Notice or (ii) to treat as owner of such Shares or to accord
        the right to vote or pay dividends to any purchaser or other transferee to
        whom
        such Shares shall have been so transferred.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

       

      8. Successors
        and Assigns.
        The
        Company may assign any of its rights under this Exercise Notice to single
        or
        multiple assignees, and this Exercise Notice shall inure to the benefit of
        the
        successors and assigns of the Company. Subject to the restrictions on transfer
        herein set forth, this Exercise Notice shall be binding upon Optionee and
        his or
        her heirs, executors, administrators, successors and assigns.

      

      9. Interpretation.
        Any
        dispute regarding the interpretation of this Exercise Notice shall be submitted
        by Optionee or by the Company forthwith to the Administrator which shall
        review
        such dispute at its next regular meeting. The resolution of such a dispute
        by
        the Administrator shall be final and binding on all parties.

      

      10. Governing
        Law; Severability.
        This
        Exercise Notice is governed by the internal substantive laws but not the
        choice
        of law rules, of [STATE].
        In the
        event that any provision hereof becomes or is declared by a court of competent
        jurisdiction to be illegal, unenforceable or void, this Option Agreement
        will
        continue in full force and effect.

      

      11. Entire
        Agreement.
        The
        Plan and Option Agreement are incorporated herein by reference. This Exercise
        Notice, the Plan, the Option Agreement and the Investment Representation
        Statement constitute the entire agreement of the parties with respect to
        the
        subject matter hereof and supersede in their entirety all prior undertakings
        and
        agreements of the Company and Optionee with respect to the subject matter
        hereof, and may not be modified adversely to the Optionee’s interest except by
        means of a writing signed by the Company and Optionee.

       

      
        
          	
                  Submitted
                    by:

                	 	
                  Accepted
                    by:

                
	
                  OPTIONEE

                	 	
                  AMERICAN
                    ETHANOL, INC.

                
	 	 	 
	  
	 	  

	
                  Signature

                	 	
                  By

                
	 	 	 
	  
	 	    

	
                  Print
                    Name

                	 	
                  Title

                
	 	 	 
	
                  Address:

                	 	
                  Address:

                
	  
	 	 
	  
	 	  

	  
	 	 
	 	 	 
	 	 	  

	 	 	
                  Date
                    Received

                

 

        
          
             

          

          
            -4-

            
              

            

          

          
             

          

        

      

       

      EXHIBIT
        B

       

      INVESTMENT
        REPRESENTATION STATEMENT

       

      

        
          	
                  OPTIONEE:

                	 
	 	 
	
                  COMPANY:

                	
                  AMERICAN
                    ETHANOL, INC.

                
	 	 
	
                  SECURITY:

                	
                  COMMON
                    STOCK

                
	 	 
	
                  AMOUNT:

                	 
	 	 
	
                  DATE:

                	 

        

      

      

      In
        connection with the purchase of the above-listed Securities, the undersigned
        Optionee represents to the Company the following:

      

      (a) Optionee
        is aware of the Company’s business affairs and financial condition and has
        acquired sufficient information about the Company to reach an informed and
        knowledgeable decision to acquire the Securities. Optionee is acquiring these
        Securities for investment for Optionee’s own account only and not with a view
        to, or for resale in connection with, any “distribution” thereof within the
        meaning of the Securities Act of 1933, as amended (the “Securities
        Act”).

      

      (b) Optionee
        acknowledges and understands that the Securities constitute “restricted
        securities” under the Securities Act and have not been registered under the
        Securities Act in reliance upon a specific exemption therefrom, which exemption
        depends upon, among other things, the bona fide nature of Optionee’s investment
        intent as expressed herein. In this connection, Optionee understands that,
        in
        the view of the Securities and Exchange Commission, the statutory basis for
        such
        exemption may be unavailable if Optionee’s representation was predicated solely
        upon a present intention to hold these Securities for the minimum capital
        gains
        period specified under tax statutes, for a deferred sale, for or until an
        increase or decrease in the market price of the Securities, or for a period
        of
        one year or any other fixed period in the future. Optionee further understands
        that the Securities must be held indefinitely unless they are subsequently
        registered under the Securities Act or an exemption from such registration
        is
        available. Optionee further acknowledges and understands that the Company
        is
        under no obligation to register the Securities. Optionee understands that
        the
        certificate evidencing the Securities will be imprinted with any legend required
        under applicable state securities laws.

      

      (c) Optionee
        is familiar with the provisions of Rule 701 and Rule 144, each
        promulgated under the Securities Act, which, in substance, permit limited
        public
        resale of “restricted securities” acquired, directly or indirectly from the
        issuer thereof, in a non-public offering subject to the satisfaction of certain
        conditions. Rule 701 provides that if the issuer qualifies under
        Rule 701 at the time of the grant of the Option to the Optionee, the
        exercise will be exempt from registration under the Securities Act. In the
        event
        the Company becomes subject to the reporting requirements of Section 13 or
        15(d) of the Securities Exchange Act of 1934, ninety (90) days thereafter
        (or such longer period as any market stand-off agreement may require) the
        Securities exempt under Rule 701 may be resold, subject to the satisfaction
        of certain of the conditions specified by Rule 144, including: (1) the
        resale being made through a broker in an unsolicited “broker’s transaction” or
        in transactions directly with a market maker (as said term is defined under
        the Securities Exchange Act of 1934); and, in the case of an affiliate,
        (2) the availability of certain public information about the Company,
        (3) the amount of Securities being sold during any three month period not
        exceeding the limitations specified in Rule 144(e), and (4) the timely
        filing of a Form 144, if applicable.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      In
        the
        event that the Company does not qualify under Rule 701 at the time of grant
        of the Option, then the Securities may be resold in certain limited
        circumstances subject to the provisions of Rule 144, which
        requires the resale to occur not less than one year after the later of the
        date the Securities were sold by the Company or the date the Securities were
        sold by an affiliate of the Company, within the meaning of Rule 144; and,
        in the case of acquisition of the Securities by an affiliate, or by a
        non-affiliate who subsequently holds the Securities less than two years,
        the
        satisfaction of the conditions set forth in sections (1), (2), (3) and (4)
        of the paragraph immediately above.

      

      (d) Optionee
        further understands that in the event all of the applicable requirements
        of
        Rule 701 or 144 are not satisfied, registration under the Securities Act,
        compliance with Regulation A, or some other registration exemption will be
        required; and that, notwithstanding the fact that Rules 144 and 701 are not
        exclusive, the Staff of the Securities and Exchange Commission has expressed
        its
        opinion that persons proposing to sell private placement securities other
        than
        in a registered offering and otherwise than pursuant to Rules 144 or 701
        will have a substantial burden of proof in establishing that an exemption
        from
        registration is available for such offers or sales, and that such persons
        and
        their respective brokers who participate in such transactions do so at their
        own
        risk. Optionee understands that no assurances can be given that any such
        other
        registration exemption will be available in such event.

       

      
        
          	 	
                  Signature
                    of Optionee:

                
	 	 	 	 	 
	 	 	 	 	 
	 	  

	 	 	 	 	 
	 	
                  Date: 
                    

                	  
	
                  ,

                	 

        

      

       

      
        
           

        

        
          -2-

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