Unassociated Document


     

    BIOGOLD
      FUELS CORPORATION

     

    SENIOR
      SECURED NOTE

    PURCHASE
      AGREEMENT

     

    This
      Senior Secured Note Purchase Agreement (the “Agreement”)
      is
      made as of the 3rd
      day of
      March, 2008, by and between BioGold Fuels Corporation, a Nevada corporation
      (the “Company”),
      and
      Heritage Holding Group, LLC, a California limited liability company (the
“Purchaser”).

     

    RECITALS

     

    The
      Company desires to issue and sell, and the Purchaser desires to purchase (i)
      a
      senior secured promissory
      note in substantially the form attached as Exhibit
      A
      (the
“Note”
or
      “Securities”). Any capitalized term not defined herein shall have the meaning
      ascribed to it in the Note, or the Security Agreement (taken together, the
      “Ancillary
      Agreements”).
      This
      Agreement and the Ancillary Agreements shall be referred to collectively as
      the
“Transaction
      Documents”.

     

    AGREEMENT

     

    In
      consideration of the mutual promises contained herein and other good and
      valuable consideration, receipt of which is hereby acknowledged, the parties
      to
      this Agreement agree as follows:

     

    1. Purchase
      and Sale of Note.

     

    (a) Sale
      and Issuance of Note.
      Subject
      to the terms and conditions of this Agreement, the Purchaser agrees to purchase
      at the Closing (as defined below) and the Company agrees to sell and issue
      to
      the Purchaser the Note in the principal amount of $550,000.

     

    (b) Closing;
      Delivery.

     

    (i) The purchase
      and sale of the Note shall take place at the offices of BioGold Fuels
      Corporation, 1800 Century Park E, Suite 600, Los Angeles, CA 90067, on March
      3,
      2008, or at such other time and place as the Company and the Purchaser mutually
      agree upon, orally or in writing, in three separate Closings (which time and
      place are designated as the “Closing”).
      

     

    (ii) Subject
      to the satisfactory completion of the Closing Conditions at each Closing, the
      Company shall deliver to Purchaser the executed Note along with signed copies
      of
      the Ancillary Agreements against (1) payment of the Purchase Price in three
      separate installations (as defined herein) as applicable to the specific
      Closing, therefor by check payable to the Company or by wire transfer to a
      bank
      designated by the Company, and (2) delivery of counterpart signature pages
      to
      this Agreement and the Ancillary Agreements.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    (iii) The
      total
      aggregate “Purchase
      Price”
shall
      equal $550,000 minus the Loan Arrangement Fee. The “Loan
      Arrangement Fee”
shall
      equal 10% of the Principal amount of the Note funded ($50,000 for Aggregate
      Purchase Price). The parties hereto agree that the “Loan Arrangement Fee” has
      been fully earned by Purchaser and is non-refundable. Purchaser, in its sole
      discretion, may off-set the Loan Arrangement Fee from any amounts provided
      under
      the Note. The Purchase Price shall be delivered in three separate installation
      in accordance with the terms and conditions contained herein and in the
      following amounts: (x) the “First Closing Amount”
shall
      equal $110,000 minus the Loan Arrangement Fee of 10% of the Principal amount
      of
      the Note funded ($10,000 for First Closing Amount”); (y) the “Second Closing
Amount”
shall
      equal $165,000 minus the Loan Arrangement Fee of 10% of the Principal amount
      of
      the Note funded ($15,000 for Second Closing Amount”); (z) and the “Third Closing
Amount”
shall
      equal $275,000 minus the Loan Arrangement Fee of 10% of the Principal amount
      of
      the Note funded ($25,000 for Third Closing Amount”).

     

    2. Security
      Interest.
      The
      indebtedness represented by the Note shall be secured by Collateral of the
      Company in accordance with the provisions of a Security Agreement between the
      Company and the Purchaser in the form attached to this Agreement as Exhibit
      B
      (the
“Security
      Agreement”).

     

    3. Representations
      and Warranties of the Company.
      The
      Company hereby represents and warrants to each Purchaser that:

     

    (a) Organization,
      Good Standing and Qualification.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada and has all requisite corporate power
      and
      authority to carry on its business as now conducted and as proposed to be
      conducted (the “Business”).
      The
      Company is duly qualified to transact business and is in good standing in each
      jurisdiction in which the failure so to qualify would have a material adverse
      effect on its Business or properties. 

     

    (b) Authorization.
      All
      corporate action required on the part of the Company, its officers, directors
      and stockholders necessary for the authorization, execution and delivery of
      this
      Agreement and the Ancillary Agreements and the authorization, sale, issuance
      and
      delivery of the Note, and the performance of all obligations of the Company
      hereunder and under the Ancillary Agreements has been taken or will be taken
      prior to the Closing. All
      corporate action required to authorize the issuance of the Securities will
      be
      taken prior to the issuance thereof. The Agreement, and each of the Ancillary
      Agreements, when executed and delivered by the Company, shall constitute valid
      and legally binding obligations of the Company, enforceable against the Company
      in accordance with their respective terms except as limited by applicable
      bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
      and
      other laws of general application affecting enforcement of creditors’ rights
      generally, and as limited by laws relating to the availability of specific
      performance, injunctive relief, or other equitable remedies.

     

    
      
        
        

      

      
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    (c) Issuance
      of the Securities.
      The
      Securities are duly authorized and, when issued and paid for in accordance
      with
      the Transaction Documents, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all liens. 

     

    (d) Litigation.
      Except
      as set forth on Schedule 3.(d), attached hereto, there is no claim, action,
      suit, proceeding, arbitration, complaint, charge or investigation pending with
      respect to which the Company has been notified or is aware, to the Company’s
      knowledge, currently threatened against the Company that, if successful, would
      reasonably be expected to have, either individually or in the aggregate, a
      material adverse effect on its Business or properties, or any change in the
      current equity ownership of the Company, nor is the Company aware that there
      is
      any basis for the foregoing. 

     

    (e) SEC
      Reports; Financial Statements.
      To the
      best of its knowledge, the Company has filed all material reports required
      to be
      filed by it under the Securities Act and the Exchange Act for the two years
      preceding (collectively, the “SEC
      Reports”)
      on a
      timely basis. As of their respective dates, to the Company’s knowledge, the SEC
      Reports complied in all material respects with the requirements of the
      Securities Act and the Exchange Act and the rules and regulations of the
      Commission promulgated thereunder, and none of the SEC Reports, when filed,
      contained any untrue statement of a material fact or omitted to state a material
      fact required to be stated therein or necessary in order to make the statements
      therein, in light of the circumstances under which they were made, not
      misleading.

     

    4. Representations
      and Warranties of the Purchaser.
      The
      Purchaser hereby represents and warrants to the Company that:

     

    (a) Authorization.
      The
      Purchaser has full power and authority to enter into this Agreement. This
      Agreement, when executed and delivered by the Purchaser, will constitute a
      valid
      and legally binding obligation of the Purchaser, enforceable in accordance
      with
      its terms, except as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium, fraudulent conveyance, and any other laws of general
      application affecting enforcement of creditors’ rights generally, and as limited
      by laws relating to the availability of a specific performance, injunctive
      relief, or other equitable remedies.

     

    (b) Purchase
      Entirely for Own Account.
      This
      Agreement is made with the Purchaser in reliance upon the Purchaser’s
      representation to the Company, which by the Purchaser’s execution of this
      Agreement, the Purchaser hereby confirms, that the Securities to be acquired
      by
      the Purchaser will be acquired for investment for the Purchaser’s own account,
      not as a nominee or agent, and not with a view to the resale or distribution
      of
      any part thereof, and that the Purchaser has no present intention of selling,
      granting any participation in, or otherwise distributing the same. By executing
      this Agreement, the Purchaser further represents that the Purchaser does not
      presently have any contract, undertaking, agreement or arrangement with any
      person to sell, transfer or grant participations to such person or to any third
      person, with respect to any of the Securities. 

     

    
      
        
        

      

      
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    (c) Knowledge.
      The
      Purchaser 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. The Purchaser has had the
      opportunity to request and review any business materials, marketing
      documentation, financial statements, corporate books and records, and accounting
      records that it deems necessary to acquire sufficient information about the
      Company to be knowledgeable about the Securities and the Company.

     

    (d) Restricted
      Securities.
      The
      Purchaser understands that the Securities have not been, and will not be,
      registered under the Securities Act of 1933, as amended (the “Securities
      Act”),
      by
      reason of a specific exemption from the registration provisions of the
      Securities Act which depends upon, among other things, the bona fide nature
      of
      the investment intent and the accuracy of the Purchaser’s representations as
      expressed herein. The Purchaser understands that the Securities are “restricted
      securities” under applicable U.S. federal and state securities laws and that,
      pursuant to these laws, the Purchaser must hold the Securities indefinitely
      unless they are registered with the Securities and Exchange Commission and
      qualified by state authorities, or an exemption from such registration and
      qualification requirements is available. The Purchaser acknowledges that the
      Company has no obligation to register or qualify the Securities for resale.
      The
      Purchaser further acknowledges that if an exemption from registration or
      qualification is available, it may be conditioned on various requirements
      including, but not limited to, the time and manner of sale, the holding period
      for the Securities, and on requirements relating to the Company which are
      outside of the Purchaser’s control, and which the Company is under no obligation
      and may not be able to satisfy.  

     

    (e) Legends.
      The
      Purchaser understands that the Securities may bear one or all of the following
      legends:

     

    (i) “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
      INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
      DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT
      AN
      EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN
      A
      FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
      THE SECURITIES ACT OF 1933.”

     

    (ii) Any
      other
      legend required by the Blue Sky laws of any state to the extent such laws are
      applicable to the shares represented by the certificate so
      legended.

     

    (f) Accredited
      Investor.
      The
      Purchaser is an accredited investor as defined in Rule 501(a) of Regulation
      D
      promulgated under the Securities Act.

    

      
        
          
          

        

        
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      5. Conditions
        of the Purchasers’ Obligations at Closing.
        The
        obligations of each Purchaser to the Company under this Agreement are subject
        to
        the fulfillment, on or before the Closing, of each of the following conditions,
        unless otherwise waived:

    

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Company contained in Section 3 shall
      be true on and as of the Closing with the same effect as though such
      representations and warranties had been made on and as of the date of the
      Closing.

     

    (b) Qualifications.
      All
      authorizations, approvals or permits, if any, of any governmental authority
      or
      regulatory body of the United States or of any state that are required in
      connection with the lawful issuance and sale of the Notes pursuant to this
      Agreement shall be obtained and effective as of the Closing.

     

    (c) Security
      Agreement.
      The
      Company and the Purchaser shall have executed the Security Agreement.


     

    (d) 
      Conditions of the Purchasers’ Obligations to fund First Closing
      Amount.
      The
      Company shall have successfully completed certain mutually agreeable milestones
      on or before March 3, 2008.

     

    (e) 
      Conditions of the Purchasers’ Obligations to fund Second Closing
      Amount.
      The
      Company shall have successfully completed certain mutually agreeable milestones
      on or before March 18, 2008.

     

    (f) 
      Conditions of the Purchasers’ Obligations to fund Third Closing
      Amount.
      The
      Company shall have successfully completed certain mutually agreeable milestones
      on or before April 1, 2008.

     

    6. Conditions
      of the Company’s Obligations at Closing.
      The
      obligations of the Company to each Purchaser under this Agreement are subject
      to
      the fulfillment, on or before the Closing, of each of the following conditions,
      unless otherwise waived:

     

    (a) Representations
      and Warranties.
      The
      representations and warranties of the Purchaser contained in Section 4
      shall be true on and as of the Closing with the same effect as though such
      representations and warranties had been made on and as of the
      Closing.

     

    (b) Qualifications.
      All
      authorizations, approvals or permits, if any, of any governmental authority
      or
      regulatory body of the United States or of any state that are required in
      connection with the lawful issuance and sale of the Note and Warrant pursuant
      to
      this Agreement shall be obtained and effective as of the Closing.

     

    (c) Ancillary
      Agreements.
      The
      Company and the Purchaser, and the other parties thereto, if any, shall have
      executed all of the Ancillary Agreements.


    
      
        
        

      

      
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    7. Additional
      Agreements

     

    (a) Indemnification
      of Purchaser.
      The
      Company hereby indemnifies and holds the Purchaser and its managers, members,
      affiliates and agents (each, a “Purchaser
      Party”)
      harmless from any and all losses, liabilities, obligations, claims,
      contingencies, damages, costs and expenses, including all judgments, amounts
      paid in settlements, court costs and reasonable attorneys’ fees and costs of
      investigation (collectively, “Losses”)
      that
      any such Purchaser Party may suffer or incur as a result of or relating to
      (a)
      any misrepresentation, breach or inaccuracy, or any allegation by a third party
      that, if true, would constitute a breach or inaccuracy, of any of the
      representations, warranties, covenants or agreements made by the Company in
      this
      Agreement or in the other Transaction Documents; or (b) any cause of action,
      suit or claim brought or made against such Purchaser Party and solely arising
      out of or solely resulting from the execution, delivery, performance or
      enforcement of this Agreement or any of the other Transaction Documents.
      Notwithstanding the above, the Company shall not be liable in any such case
      for
      any loss, liability, obligation, claim, contingency, damage, cost or expense
      to
      the extent that it arises out of or is based written information furnished,
      or
      any other act or omission, by any such Purchaser Party. The Company will
      reimburse such Purchaser for its reasonable legal and other expenses incurred
      in
      connection therewith, as such expenses are incurred. The Purchaser Party may
      not, without the prior written consent of the Company, agree to any settlement
      of any claim or action with respect to which the Company is required to
      indemnify the Purchaser Party pursuant to this Section 7(a). The obligations
      of
      the Company under this Section 7(a) shall survive the payment and performance
      of
      the Company’s obligations under the Transaction Documents.

     

    (b) Non-Public
      Information.
      The
      Company covenants and agrees that neither it nor any other Person acting on
      its
      behalf will provide any Purchaser or its agents or counsel with any information
      that the Company believes constitutes material non-public information, unless
      prior thereto such Purchaser shall have executed a written agreement regarding
      the confidentiality and use of such information. The Company understands and
      confirms that each Purchaser shall be relying on the foregoing representations
      in effecting transactions in securities of the Company.

     

    (c) Release.
      The
      Company, its subsidiaries, officers, directors, managers, employees,
      shareholders, creditors, agents, heirs, representatives and any permitted
      successors, and assigns (each a “Company
      Releasing Party”)
      hereby
      fully, finally, completely, and forever releases, discharges, acquits, and
      relinquishes the Purchaser, its managers, members and agents and the affiliates
      of each of the foregoing(the “Purchaser
      Released Parties”)
      from
      and against all loss, cost, damage, claim, liability, or expense, including
      reasonable attorneys’ fees and costs , in any way arising from or related to the
      sale and issuance of the Note and Warrant and the entering into by the parties
      of the remaining Ancillary Agreements. The Company (for and on behalf of each
      Company Releasing Party) hereby agrees (a) not to file any lawsuit or pursue
      any
      other action with respect to any of the foregoing matters and (b) to indemnify
      and hold harmless, jointly and severally, any and all of the Company Released
      Parties from any and all injuries, harm, damages, costs, losses, expenses and/or
      liability, including reasonable attorneys’ fees and court costs, as incurred and
      when incurred as a result of the filing of any such lawsuit or the pursuit
      of
      any other action with respect to any of the foregoing matters. The agreement
      and
      obligations of the Company under this Section 7(c) shall survive the payment
      and
      performance of the Company’s obligations under the Transaction
      Documents.

     


    
      
        
        

      

      
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    8. Miscellaneous.

     

    (a) Assignment;
      Successors and Assigns.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the respective successors and assigns of the parties. Nothing
      in
      this Agreement, express or implied, is intended to confer upon any party other
      than the parties hereto or their respective successors and assigns any rights,
      remedies, obligations, or liabilities under or by reason of this Agreement,
      except as expressly provided in this Agreement.

     

    (b) [reserved]

     

    (c) Governing
      Law.
      This
      Agreement and all acts and transactions pursuant hereto and the rights and
      obligations of the parties hereto shall be governed, construed and interpreted
      in accordance with the laws of the State of California, without giving effect
      to
      principles of conflicts of law.

     

    (d) Counterparts.
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original and all of which together shall constitute one
      instrument.

     

    (e) Titles
      and Subtitles.
      The
      titles and subtitles used in this Agreement are used for convenience only and
      are not to be considered in construing or interpreting this
      Agreement.

     

    (f) Notices.
      Any
      notice required or permitted by this Agreement shall be in writing and shall
      be
      deemed sufficient upon receipt, when delivered personally or by courier,
      overnight delivery service or confirmed facsimile, or 48 hours after being
      deposited in the U.S. mail as certified or registered mail with postage prepaid,
      if such notice is addressed to the party to be notified at such party’s address
      or facsimile number as
      set
      forth below or as subsequently modified by written notice.

     

    (g) Finder’s
      Fee.
      Each
      party represents that it neither is nor will be obligated for any finder’s fee
      or commission in connection with this transaction. Each Purchaser agrees to
      indemnify and to hold harmless the Company from any liability for any commission
      or compensation in the nature of a finder’s fee (and the costs and expenses
      of defending against such liability or asserted liability) for which each
      Purchaser or any of its officers, employees, or representatives is responsible.
      The Company agrees to indemnify and hold harmless each Purchaser from any
      liability for any commission or compensation in the nature of a finder’s
      fee (and the costs and expenses of defending against such liability or asserted
      liability) for which the Company or any of its officers, employees or
      representatives is responsible.

     

    (h) Amendments
      and Waivers.
      Any term
      of this Agreement may only be amended or waived with the written consent of
      the
      Company and the holders of at least a majority in interest of the Notes. Any
      amendment or waiver effected in accordance with this Section 8(h) shall be
      binding upon each Purchaser and each transferee of the Securities, each future
      holder of all such Securities, and the Company.

     

    
      
        
        

      

      
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    (i) Severability.
      If one
      or more provisions of this Agreement are held to be unenforceable
      under applicable law, the parties agree to renegotiate such provision in good
      faith, in order to maintain the economic position enjoyed by each party as
      close
      as possible to that under the provision rendered unenforceable. In the event
      that the parties cannot reach a mutually agreeable and enforceable replacement
      for such provision, then (i) such provision shall be excluded from this
      Agreement, (ii) the balance of the Agreement shall be interpreted as if
      such provision were so excluded and (iii) the balance of the Agreement
      shall be enforceable in accordance with its terms.

     

    (j) Entire
      Agreement.
      This
      Agreement, and the documents and agreements referred to herein constitute the
      entire agreement between the parties hereto pertaining to the subject matter
      hereof, and any and all other written or oral agreements existing between the
      parties hereto are expressly canceled. 

     

    


    [Signature
      Pages Follow]


    
      
        
        

      

      
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        The
      parties
      have executed this Senior Secured Note Purchase Agreement as of the date first
      written above.

     

    COMPANY

     

    BIOGOLD
      FUELS CORPORATION

     

    


    By:                         

     

    Name:                           
       
   

     

    Title:                             
      

    Address:
      1800 Century Park East, Suite 600

    Los
      Angeles, CA 90067

     

    


    PURCHASER:

     

    HERITAGE
      HOLDING GROUP, LLC

     

     

    By:
      _______________________________

    Name:                       
      

    Title:                        
        

    
 

    Address:                 


                            

                            

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBITS

     

    Exhibit A- Form
      of
      Senior Secured Promissory Note

     

    Exhibit
      B- Form
      of
      Security Agreement

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      A

     

     

    FORM
      OF SENIOR SECURED PROMISSORY NOTE

     

     

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    EXHIBIT
      B

     

    FORM
      OF SECURITY AGREEMENT

     

     

     


    
      
        
        

      

      
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    Schedule
      3(d)