**Exhibit10.81**

**REGISTRATIONRIGHTS AGREEMENT**

**REGISTRATIONRIGHTS AGREEMENT** (this “**Agreement**”),dated as of August 11, 2006, by and among Earth Biofuels, Inc., a Delawarecorporation, with headquarters located at 3001 Knox Street, Suite 403, Dallas,Texas 75205, (the “**Company**”), andthe undersigned buyers (each, a “**Buyer**”,and collectively, the “**Buyers**”).

**WHEREAS:**

A.            In connection with theSecurities Purchase Agreement, dated as of August 11, 2006, by and among theCompany and the Buyers (the “**Securities PurchaseAgreement**”), the Company has agreed, upon the terms and subject tothe conditions set forth in the Securities Purchase Agreement, to issue andsell to each Buyer (i) senior convertible notes of the Company (the “**Notes**”), which will, among other things, beconvertible into shares of the Company’s common stock, $0.001 par value pershare (the ”**Common Stock**”, asconverted, the “**Conversion Shares**”)in accordance with the terms of the Notes, and (ii) two series of warrants (the“**Warrants**”), which will be exercisableto purchase shares of Common Stock (as exercised collectively, the “**Warrant Shares**”).

B.            In accordance with theterms of the Securities Purchase Agreement, the Company has agreed to providecertain registration rights under the Securities Act of 1933, as amended, andthe rules and regulations thereunder, or any similar successor statute(collectively, the “**1933 Act**”),and applicable state securities laws.

**NOW,THEREFORE,** in consideration of the premises and the mutualcovenants contained herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the Company and eachof the Buyers hereby agree as follows:

# 1.             Definitions.

Capitalized terms usedherein and not otherwise defined herein shall have the respective meanings setforth in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the followingmeanings:

## a.             “**BusinessDay**” means any day otherthan Saturday, Sunday or any other day on which commercial banks in The City ofNew York are authorized or required by law to remain closed.

## b.             “**ClosingDate**” shall have the meaningset forth in the Securities Purchase Agreement.

## c.             “**EffectiveDate**” means the date theRegistration Statement has been declared effective by the SEC.

## d.             “**EffectivenessDeadline**” means the datewhich is (i) in the event that the Registration Statement is not subject to areview by the SEC, 60 calendar days after July 

----

## 24, 2006 or (ii) in theevent that the Registration Statement is subject to a review by the SEC, 120calendar days after July 24, 2006.

## e.             “**FilingDeadline**” means 30 calendardays after July 24, 2006.

## f.              “**Investor**” means a Buyer or any transferee or assigneethereof to whom a Buyer assigns its rights under this Agreement in accordancewith the requirements of the Transaction Documents and who agrees to becomebound by the provisions of this Agreement in accordance with Section 9 and anytransferee or assignee thereof to whom a transferee or assignee assigns itsrights under this Agreement in accordance with the requirements of theTransaction Documents and who agrees to become bound by the provisions of thisAgreement in accordance with Section 9.

## g.             “**Person**” means an individual, a limited liabilitycompany, a partnership, a joint venture, a corporation, a trust, anunincorporated organization and a government or any department or agencythereof.

## h.             “**register**,” “**registered**,” and “**registration**” refer to a registration effected bypreparing and filing one or more Registration Statements (as defined below) incompliance with the 1933 Act and pursuant to Rule 415 and the declaration orordering of effectiveness of such Registration Statement(s) by the SEC.

## i.              “**RegistrableSecurities**” means(i) the Conversion Shares issued or issuable upon conversion or redemptionof the Notes, (ii) the Warrant Shares issued or issuable upon exercise ofthe Warrants, (iii) any shares of Common Stock issuable upon exercise ofwarrants issued to any placement agent as compensation in connection with thefinancing that is the subject of the Securities Purchase Agreement, (iv) anyshares of Common Stock issuable upon payment of the Make-Whole Amount (as suchterm is defined in the Notes) pursuant to the Notes and (v) any capitalstock of the Company issued or issuable with respect to the Conversion Shares,the Notes, the Warrant Shares, or the Warrants as a result of any stock split,stock dividend, recapitalization, exchange or similar event or otherwise,without regard to any limitations on conversions of the Notes or exercises ofthe Warrants.

## j.              “**RegistrationStatement**” means aregistration statement or registration statements of the Company filed underthe 1933 Act covering the Registrable Securities.

## k.             “**RequiredHolders**” means the holdersof at least a majority of the Registrable Securities.

## l.              “**RequiredRegistration Amount**” means130% (or such lesser amount as the SEC may permit as evidenced in commentsreceived to a filed Registration Statement) of the sum of (i) the number ofConversion Shares issued and issuable pursuant to the Notes as of the tradingday immediately preceding the applicable date of determination, and (ii) thenumber of Warrant Shares issued and issuable pursuant to the Warrants as of thetrading day immediately preceding the applicable date of determination, allsubject to adjustment as provided in Section 2(e) (without regard to anylimitations on conversion of the Notes or exercise of the Warrants).

2

----

## m.            “**Rule415**” means Rule 415 underthe 1933 Act or any successor rule providing for offering securities on acontinuous or delayed basis.

## n.             “**SEC**” means the United States Securities andExchange Commission.

# 2.             Registration.

## a.             Mandatory Registration.  TheCompany shall prepare, and, as soon as practicable but in no event later thanthe Filing Deadline, file with the SEC the Registration Statement on Form S-3covering the resale of all of the Registrable Securities issuable upon thenoutstanding Securities.  In the eventthat Form S-3 is unavailable for such a registration, the Company shall usesuch other form as is available for such a registration on another appropriateform reasonably acceptable to the Required Holders, subject to the provisionsof Section 2(d).  The RegistrationStatement prepared pursuant hereto shall register for resale at least thenumber of shares of Common Stock equal to the Required Registration Amount asof date the Registration Statement is initially filed with the SEC.  The Registration Statement shall contain(except if otherwise directed by the Required Holders) the “SellingStockholders” and “Plan of Distribution” sections in substantiallythe form attached hereto as Exhibit B. The Company shall use its best efforts to have the RegistrationStatement declared effective by the SEC as soon as practicable, but in no eventlater than the Effectiveness Deadline. By 9:30 am on the date following the Effective Date, the Company shallfile with the SEC in accordance with Rule 424 under the 1933 Act the finalprospectus to be used in connection with sales pursuant to such RegistrationStatement.

## b.             Allocation of Registrable Securities.  Theinitial number of Registrable Securities included in any Registration Statementand any increase in the number of Registrable Securities included therein shallbe allocated pro rata among the Investors based on the number of RegistrableSecurities held by each Investor at the time the Registration Statementcovering such initial number of Registrable Securities or increase thereof isdeclared effective by the SEC.  In theevent that an Investor sells or otherwise transfers any of such Investor’sRegistrable Securities, each transferee shall be allocated a pro rata portionof the then remaining number of Registrable Securities included in suchRegistration Statement for such transferor. Any shares of Common Stock included in a Registration Statement andwhich remain allocated to any Person which ceases to hold any RegistrableSecurities covered by such Registration Statement shall be allocated to theremaining Investors, pro rata based on the number of Registrable Securitiesthen held by such Investors which are covered by such RegistrationStatement.  Other than as set forth in Schedule2(b), in no event shall the Company include any securities other thanRegistrable Securities on any Registration Statement without the prior writtenconsent of the Required Holders.

## c.             Legal Counsel. Subject to Section 5 hereof, the Required Holders shall have the rightto select one legal counsel to review and oversee any registration pursuant tothis Section 2 (“**LegalCounsel**”).  The Company and Legal Counsel shallreasonably cooperate with each other in performing the Company’s obligationsunder this Agreement.

3

----

## d.             Ineligibility for Form S-3.  Inthe event that Form S-3 is not  availablefor the registration of the resale of Registrable Securities hereunder, theCompany shall (i) register the resale of the Registrable Securities on anotherappropriate form reasonably acceptable to the Required Holders and (ii)undertake to register the Registrable Securities on Form S-3 as soon as suchform is available, provided that the Company shall maintain the effectivenessof the Registration Statement then in effect until such time as a RegistrationStatement on Form S-3 covering the Registrable Securities has been declaredeffective by the SEC.

## e.             Sufficient Number of Shares Registered.  Inthe event the number of shares available under a Registration Statement filedpursuant to Section 2(a) is insufficient to cover all of the RegistrableSecurities required to be covered by such Registration Statement or anInvestor’s allocated portion of the Registrable Securities pursuant to Section2(b), the Company shall amend the applicable Registration Statement, or file anew Registration Statement (on the short form available therefor, ifapplicable), or both, so as to cover at least the Required Registration Amountas of the trading day immediately preceding the date of the filing of suchamendment or new Registration Statement, in each case, as soon as practicable,but in any event not later than thirty (30) days after the necessity thereforarises.  The Company shall use its bestefforts to cause such amendment and/or new Registration Statement to becomeeffective as soon as practicable following the filing thereof.  For purposes of the foregoing provision, thenumber of shares available under a Registration Statement shall be deemed“insufficient to cover all of the Registrable Securities” if at any time thenumber of shares of Common Stock available for resale under the RegistrationStatement is less than the product determined by multiplying (i) the RequiredRegistration Amount as of such time by (ii) 0.90.  The calculation set forth in the foregoingsentence shall be made without regard to any limitations on the conversion ofthe Notes or the exercise of the Warrants and such calculation shall assumethat the Notes are then convertible into shares of Common Stock at the thenprevailing Conversion Rate (as defined in the Notes) and that the Warrants arethen exercisable for shares of Common Stock at the then prevailing ExercisePrice (as defined in the Warrants).

## f.              Effect of Failure to File and Obtain andMaintain Effectiveness of Registration Statement. Subject to Section 4(a), if (i) a Registration Statement covering all ofthe Registrable Securities required to be covered thereby and required to befiled by the Company pursuant to this Agreement is (A) not filed with the SECon or before the respective Filing Deadline (a “**Filing Failure**”) or(B) not declared effective by the SEC on or before the respective EffectivenessDeadline (an “**EffectivenessFailure**”) or (ii) on any dayafter the Effective Date sales of all of the Registrable Securities required tobe included on such Registration Statement cannot be made (other than during anAllowable Grace Period (as defined in Section 3(r)) pursuant to suchRegistration Statement or otherwise (including, without limitation, because ofa failure to keep such Registration Statement effective, to disclose suchinformation as is necessary for sales to be made pursuant to such RegistrationStatement, to register a sufficient number of shares of Common Stock or tomaintain the listing of the Common Stock) (a “**Maintenance Failure**”)then, as partial relief for the damages to any holder by reason of any suchdelay in or reduction of its ability to sell the underlying Shares of CommonStock (which remedy shall not be exclusive of any other remedies available atlaw or in equity), the Company shall pay to each holder of Registrable Securitiesrelating to such Registration Statement an amount in cash equal to one andone-half percent (1.5%) of the 

4

----

## aggregatePurchase Price (as such term is defined in the Securities Purchase Agreement)of such Investor’s Notes relating to the Registrable Securities included insuch Registration Statement on each of the following dates: (i) the day of aFiling Failure and on every thirtieth day (pro rated for periods totaling lessthan thirty days) after a Filing Failure until such Filing Failure is cured;(ii) the day of an Effectiveness Failure and on every thirtieth day (pro ratedfor periods totaling less than thirty days) after an Effectiveness Failureuntil such Effectiveness Failure is cured; and (iii) the initial day of aMaintenance Failure and on every thirtieth day (pro rated for periods totalingless than thirty days) after a Maintenance Failure until such MaintenanceFailure is cured; provided, however, that in no event shall the Company beliable for more than one and one-half percent (1.5%) of penalties during anythirty day period or for multiple events during any thirty day period.  The payments to which a holder shall beentitled pursuant to this Section 2(g) are referred to herein as “**Registration Delay Payments**.” Registration Delay Payments shall accrue on the day of the FilingFailure, Effectiveness Failure and the initial day of a Maintenance Failure, asapplicable, and thereafter shall accrue and be paid on the earlier of (I) thethirtieth day after the event or failure giving rise to the Registration DelayPayments has occurred and (II) the Business Day after the event or failuregiving rise to the Registration Delay Payments is cured.  In the event the Company fails to makeRegistration Delay Payments in a timely manner, such Registration DelayPayments shall bear interest at the rate of one and one-half percent (1.5%) permonth (prorated for partial months) until paid in full.  Notwithstanding anything herein to thecontrary, in no event shall the Registration Delay Payments exceed twelve andone-half percent (12.5%) of the aggregate Purchase Price for all Investors (the“**Registration Delay Payments Cap**”).  Any amount in excess of the RegistrationDelay Payments Cap (the “**Excess RegistrationDelay Payments**”) shall cause the Conversion Price of the Investor’sNotes to be lowered by an amount equal to the quotient of the amount of suchInvestors Excess Registration Delay Payments divided by the then outstandingamount of such Investor’s Notes. Notwithstanding anything to the contrary contained herein, in no eventshall the Company be liable for any damages in connection with the Warrant orWarrant Shares.

# 3.             RelatedObligations.

At such time as theCompany is obligated to file a Registration Statement with the SEC pursuant toSection 2(a), 2(d) or 2(e), the Company will use its best efforts to effect theregistration of the Registrable Securities in accordance with the intendedmethod of disposition thereof and, pursuant thereto, the Company shall have thefollowing obligations:

## a.     TheCompany shall promptly prepare and file with the SEC a Registration Statementwith respect to the Registrable Securities and use its reasonable best effortsto cause such Registration Statement relating to the Registrable Securities tobecome effective as soon as practicable after such filing (but in no eventlater than the Effectiveness Deadline). Subject to Allowable Grace Periods, the Company shall keep eachRegistration Statement effective pursuant to Rule 415 at all times until theearlier of (i) the date as of which the Investors may sell all of theRegistrable Securities covered by such Registration Statement withoutrestriction pursuant to Rule 144(k) (or any successor thereto) promulgatedunder the 1933 Act or (ii) the date on which the Investors shall have sold allof the Registrable Securities covered by such Registration Statement (the “**Registration Period**”). The Company shall ensure that each Registration Statement (including anyamendments or supplements thereto and prospectuses contained therein) shall notcontain any untrue statement of a material fact or omit 

5

----

## to state a material fact required to be stated therein, or necessary tomake the statements therein (in the case of prospectuses, in the light of thecircumstances in which they were made) not misleading other than suchinformation as provided in writing by Investors for use in such RegistrationStatement or prospectus.  The term “bestefforts” shall mean, among other things, that the Company shall submit to theSEC, within two (2) Business Days after the later of the date that (i) theCompany learns that no review of a particular Registration Statement will bemade by the staff of the SEC or that the staff has no further comments on aparticular Registration Statement, as the case may be, and (ii) the approval ofLegal Counsel (which shall not be unreasonably withheld or delayed) pursuant toSection 3(c) (which approval is immediately sought), a request for accelerationof effectiveness of such Registration Statement to a time and date not later thantwo (2) Business Days after the submission of such request.

## b.             The Company shall prepare and file with theSEC such amendments (including post-effective amendments) and supplements to aRegistration Statement and the prospectus used in connection with suchRegistration Statement, which prospectus is to be filed pursuant to Rule 424promulgated under the 1933 Act, as may be necessary to keep such RegistrationStatement effective at all times during the Registration Period, and, duringsuch period, comply with the provisions of the 1933 Act with respect to thedisposition of all Registrable Securities of the Company covered by suchRegistration Statement.  In the case ofamendments and supplements to a Registration Statement which are required to befiled pursuant to this Agreement (including pursuant to this Section 3(b)) byreason of the Company filing a report on Form 10-QSB, Form 10-KSB or anyanalogous report under the Securities Exchange Act of 1934, as amended (the “**1934 Act**”), the Company shall have incorporated suchreport by reference into such Registration Statement, if applicable, or shallfile such amendments or supplements with the SEC on the same day on which the1934 Act report is filed which created the requirement for the Company to amendor supplement such Registration Statement.

## c.             The Company shall (A) permit Legal Counseland the Investors to review and comment upon (i) a Registration Statement atleast three (3) Business Days prior to its filing with the SEC and (ii) allamendments and supplements to all Registration Statements (except for AnnualReports on Form 10-KSB, and Reports on Form 10-QSB and any similar or successorreports) within a reasonable number of days prior to their filing with the SEC,and (B) not file any Registration Statement or amendment or supplement theretoin a form to which Legal Counsel or any Investor reasonably objects; provided,however, that no liquidated damages under Section 2 shall be due to anyInvestor if Legal Counsel or any Investor shall have unnecessarily objected tothe filing or effectiveness of any Registration Statement such as to delay itsfiling or effectiveness.  The Companyshall furnish to Legal Counsel and the Investors, without charge, (i) copies ofany correspondence from the SEC or the staff of the SEC to the Company or itsrepresentatives relating to any Registration Statement, to the extentcontaining information which the Company believes does not constitute material,nonpublic information concerning the Company and (ii) promptly after the sameis prepared and filed with the SEC, one copy of any Registration Statement andany amendment(s) thereto, including financial statements and schedules, alldocuments incorporated therein by reference, if requested by an Investor (ifnot available pursuant to Rule 424(b)). The Company shall reasonably cooperate with Legal Counsel and theInvestors in performing the Company’s obligations pursuant to this Section 3.

6

----

## d.             The Company shall furnish to each Investorwhose Registrable Securities are included in any Registration Statement,without charge,  (i) promptly after thesame is prepared and filed with the SEC, at least one copy of such RegistrationStatement and any amendment(s) thereto, including financial statements andschedules, all documents incorporated therein by reference, if requested by anInvestor, all exhibits and each preliminary prospectus, (ii) upon theeffectiveness of any Registration Statement, ten (10) copies of the prospectusincluded in such Registration Statement and all amendments and supplementsthereto (or such other number of copies as such Investor may reasonablyrequest) and (iii) such other documents, including copies of any preliminary orfinal prospectus, as such Investor may reasonably request from time to time inorder to facilitate the disposition of the Registrable Securities owned by suchInvestor.

## e.             The Company shall use its best efforts to (i)register and qualify, unless an exemption from registration and qualificationapplies, the resale by Investors of the Registrable Securities covered by aRegistration Statement under such other securities or “blue sky” laws of allapplicable jurisdictions in the United States, (ii) prepare and file in thosejurisdictions, such amendments (including post-effective amendments) andsupplements to such registrations and qualifications as may be necessary tomaintain the effectiveness thereof during the Registration Period, (iii) takesuch other actions as may be necessary to maintain such registrations andqualifications in effect at all times during the Registration Period, and (iv)take all other actions reasonably necessary or advisable to qualify theRegistrable Securities for sale in such jurisdictions; provided, however, thatthe Company shall not be required in connection therewith or as a conditionthereto to (x) qualify to do business in any jurisdiction where it would nototherwise be required to qualify but for this Section 3(e), (y) subject itselfto general taxation in any such jurisdiction, or (z) file a general consent toservice of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor whoholds Registrable Securities of the receipt by the Company of any notificationwith respect to the suspension of the registration or qualification of any ofthe Registrable Securities for sale under the securities or “blue sky” laws ofany jurisdiction in the United States or its receipt of notice of theinitiation or threatening of any proceeding for such purpose.

## f.              The Company shall notify Legal Counsel andeach Investor in writing of the happening of any event, as promptly aspracticable after becoming aware of such event, as a result of which theprospectus included in a Registration Statement, as then in effect, includes anuntrue statement of a material fact or omission to state a material factrequired to be stated therein or necessary to make the statements therein, inthe light of the circumstances under which they were made, not misleading(provided that in no event shall such notice contain any material, nonpublicinformation), and, subject to Section 3(r), promptly prepare a supplement oramendment to such Registration Statement to correct such untrue statement oromission, and deliver ten (10) copies of such supplement or amendment to LegalCounsel and each Investor (or such other number of copies as Legal Counsel orsuch Investor may reasonably request). The Company shall also promptly notify Legal Counsel and each Investorin writing (i) when a prospectus or any prospectus supplement or post-effectiveamendment has been filed, and when a Registration Statement or anypost-effective amendment has become effective (notification of sucheffectiveness shall be delivered to Legal Counsel and each Investor byfacsimile or e-mail on the same day of such effectiveness), (ii) of any requestby the SEC for amendments or supplements to a Registration Statement or relatedprospectus or related information, and (iii) of 

7

----

## theCompany’s determination that a post-effective amendment to a RegistrationStatement would be appropriate.

## g.             The Company shall use its best efforts toprevent the issuance of any stop order or other suspension of effectiveness ofa Registration Statement, or the suspension of the qualification of any of theRegistrable Securities for sale in any jurisdiction and, if such an order orsuspension is issued, to obtain the withdrawal of such order or suspension atthe earliest possible moment and to notify Legal Counsel and each Investor whoholds Registrable Securities being sold of the issuance of such order and theresolution thereof or its receipt of notice of the initiation or threat of anyproceeding for such purpose.

## h.             If, after the execution of this Agreement, anInvestor believes, after consultation with its legal counsel, that it couldreasonably be deemed to be an underwriter of Registrable Securities, at therequest of such Investor, the Company shall furnish to such Investor, on thedate of the effectiveness of the Registration Statement and thereafter from timeto time on such dates as an Investor may reasonably request (i) a letter, datedsuch date, from the Company’s independent certified public accountants in formand substance as is customarily given by independent certified publicaccountants to underwriters in an underwritten public offering, addressed tothe Investors, and (ii) an opinion, dated as of such date, of counselrepresenting the Company for purposes of such Registration Statement, in form,scope and substance as is customarily given in an underwritten public offering,addressed to the Investors.

## i.              If after the execution of this Agreement anInvestor believes, after consultation with its legal counsel, that it couldreasonably be deemed to be an underwriter of Registrable Securities, at therequest of such Investor, the Company shall make available for inspection by(i) any Investor, (ii) Legal Counsel and (iii) one firm of accountants or otheragents retained by the Investors (collectively, the “**Inspectors**”), all pertinent financial and other records,and pertinent corporate documents and properties of the Company (collectively,the “**Records**”), as shall be reasonably deemed necessaryby each Inspector, and cause the Company’s officers, directors and employees tosupply all information which any Inspector may reasonably request; provided,however, that each Inspector shall agree to hold in strict confidence and shallnot make any disclosure (except to an Investor) or use of any Record or otherinformation which the Company determines in good faith to be confidential, andof which determination the Inspectors are so notified, unless (a) thedisclosure of such Records is necessary to avoid or correct a misstatement oromission in any Registration Statement or is otherwise required under the 1933Act, (b) the release of such Records is ordered pursuant to a final,non-appealable subpoena or order from a court or government body of competentjurisdiction, or (c) the information in such Records has been made generallyavailable to the public other than by disclosure in violation of thisAgreement.  Each Investor agrees that itshall, upon learning that disclosure of such Records is sought in or by a courtor governmental body of competent jurisdiction or through other means, giveprompt notice to the Company and allow the Company, at its expense, toundertake appropriate action to prevent disclosure of, or to obtain aprotective order for, the Records deemed confidential.  Nothing herein (or in any otherconfidentiality agreement between the Company and any Investor) shall be deemedto limit the Investors’ ability to sell Registrable Securities in a mannerwhich is otherwise consistent with applicable laws and regulations.

8

----

## j.              The Company shall hold in confidence and notmake any disclosure of information concerning an Investor provided to theCompany unless (i) disclosure of such information is necessary to comply withfederal or state securities laws or the rules and regulations of any applicabletrading market, (ii) the disclosure of such information is necessary to avoidor correct a misstatement or omission in any Registration Statement, (iii) therelease of such information is ordered pursuant to a subpoena or other finalorder from a court or governmental body of competent jurisdiction, or (iv) suchinformation has been made generally available to the public other than bydisclosure in violation of this Agreement or any other agreement.  The Company agrees that it shall, uponlearning that disclosure of such information concerning an Investor is soughtin or by a court or governmental body of competent jurisdiction or throughother means, give prompt written notice to such Investor and allow suchInvestor, at the Investor’s expense, to undertake appropriate action to preventdisclosure of, or to obtain a protective order for, such information.

## k.             The Company shall use its best efforts eitherto (i) cause all of the Registrable Securities covered by a RegistrationStatement to be listed on each securities exchange on which securities of thesame class or series issued by the Company are then listed, if any, if thelisting of such Registrable Securities is then permitted under the rules ofsuch exchange or (ii) secure the inclusion for quotation of all of theRegistrable Securities on the Nasdaq National Market or (iii) if, despite theCompany’s best efforts, the Company is unsuccessful in satisfying the precedingclauses (i) and (ii), to secure the inclusion for quotation of all of theRegistrable Securities on the American Stock Exchange for such Registrable Securitiesand, without limiting the generality of the foregoing, to use its best effortsto arrange for at least two market makers to register with the NationalAssociation of Securities Dealers, Inc. (“**NASD**”) as such withrespect to such Registrable Securities or (iv) if, despite the Company’s bestefforts, the Company is unsuccessful in satisfying the preceding clauses(i)-(iii), to secure the inclusion for quotation of all of the RegistrableSecurities on the NASD’s OTC Bulletin Board. The Company shall pay all fees and expenses in connection withsatisfying its obligation under this Section 3(k).

## l.              The Company shall cooperate with theInvestors who hold Registrable Securities being offered and, to the extentapplicable, facilitate the timely preparation and delivery of certificates (notbearing any restrictive legend) representing the Registrable Securities to beoffered pursuant to a Registration Statement and enable such certificates to bein such denominations or amounts, as the case may be, as the Investors mayreasonably request and registered in such names as the Investors may request.

## m.            If requested by an Investor, the Companyshall (i) as soon as practicable incorporate in a prospectus supplement orpost-effective amendment such information as an Investor reasonably requests tobe included therein relating to the sale and distribution of RegistrableSecurities, including, without limitation, information with respect to thenumber of Registrable Securities being offered or sold, the purchase pricebeing paid therefor and any other terms of the offering of the RegistrableSecurities to be sold in such offering; (ii) as soon as practicable make allrequired filings of such prospectus supplement or post-effective amendmentafter being notified of the matters to be incorporated in such prospectussupplement or post-effective amendment; and (iii) as soon as practicable,supplement or make amendments 

9

----

## toany Registration Statement if reasonably requested by an Investor holding anyRegistrable Securities.

## n.             The Company shall use its best efforts tocause the Registrable Securities covered by a Registration Statement to beregistered with or approved by such other governmental agencies or authoritiesas may be necessary to consummate the disposition of such RegistrableSecurities.

## o.             The Company shall make generally available toits security holders as soon as practical, but not later than ninety (90) daysafter the close of the period covered thereby, an earnings statement (in formcomplying with, and in the manner provided by, the provisions of Rule 158 underthe 1933 Act) covering a twelve-month period beginning not later than the firstday of the Company’s fiscal quarter next following the effective date of aRegistration Statement.

## p.             The Company shall otherwise use its bestefforts to comply with all applicable rules and regulations of the SEC inconnection with any registration hereunder.

## q.             Within two (2) Business Days after aRegistration Statement which covers Registrable Securities is declared effectiveby the SEC, the Company shall deliver, and shall cause legal counsel for theCompany to deliver, to the transfer agent for such Registrable Securities (withcopies to the Investors whose Registrable Securities are included in suchRegistration Statement) confirmation that such Registration Statement has beendeclared effective by the SEC in the form attached hereto as Exhibit A.

## r.              Notwithstanding anything to the contraryherein, at any time after the Effective Date, the Company may delay thedisclosure of material, non-public information concerning the Company thedisclosure of which at the time is not, in the good faith opinion of the Boardof Directors of the Company (following consultation with its counsel), in thebest interest of the Company (a “**GracePeriod**”); provided, that theCompany shall promptly (i) notify the Investors in writing that suchdetermination has been made (provided that in each notice the Company will notdisclose the content of such material, non-public information to the Investors)and the date on which the Grace Period will begin, and (ii) notify theInvestors in writing of the date on which the Grace Period ends; and, providedfurther, that during any three hundred sixty five (365) day period such GracePeriods shall not exceed an aggregate of thirty (30) days and the first day ofany Grace Period must be at least two (2) trading days after the last day ofany prior Grace Period (each, an “**AllowableGrace Period**”).  For purposes of determining the length of aGrace Period above, the Grace Period shall begin on and include the date theInvestors receive the notice referred to in clause (i) and shall end on andinclude the later of the date the Investors receive the notice referred to inclause (ii) and the date referred to in such notice.  The provisions of Section 3(g) hereof shallnot be applicable during the period of any Allowable Grace Period.  Upon expiration of the Grace Period, theCompany shall again be bound by the first sentence of Section 3(f) with respectto the information giving rise thereto unless such material, non-publicinformation is no longer applicable. Notwithstanding anything to the contrary, the Company shall cause itstransfer agent to deliver unlegended shares of Common Stock to a transferee ofan Investor in accordance with the terms of the Securities Purchase Agreementin connection with any sale of Registrable Securities with respect to which 

10

----

## anInvestor has entered into a contract for sale and delivered a copy of theprospectus included as part of the applicable Registration Statement (unless anexemption from such prospectus delivery requirement exists) prior to theInvestor’s receipt of the notice of a Grace Period and for which the Investorhas not yet settled.

# 4.             Obligations of theInvestors.

## a.             At least five (5) Business Days prior to thefirst anticipated filing date of a Registration Statement, the Company shallnotify each Investor in writing of the information the Company requires fromeach such Investor if such Investor elects to have any of such Investor’sRegistrable Securities included in such Registration Statement.  It shall be a condition precedent to theobligations of the Company to complete the registration pursuant to thisAgreement with respect to the Registrable Securities of a particular Investor(and to the Company’s liability for damages under Section 2(f) to suchInvestor) that such Investor shall furnish to the Company a completed andupdated “Selling Stockholder Questionnaire,” in the form attached hereto as ExhibitC, and such other information regarding itself, the Registrable Securitiesheld by it and the intended method of disposition of the Registrable Securitiesheld by it as shall be reasonably required to effect the effectiveness of theregistration of such Registrable Securities and shall execute such documents inconnection with such registration as the Company may reasonably request.

## b.             Each Investor, by such Investor’s acceptanceof the Registrable Securities, agrees to cooperate with the Company asreasonably requested by the Company in connection with the preparation andfiling of any Registration Statement hereunder, unless such Investor hasnotified the Company in writing of such Investor’s election to exclude all ofsuch Investor’s Registrable Securities from such Registration Statement.

## c.             Each Investor agrees that, upon receipt ofany notice from the Company of the happening of any event of the kind describedin Section 3(g) or the first sentence of 3(f), such Investor will immediatelydiscontinue disposition of Registrable Securities pursuant to any RegistrationStatement(s) covering such Registrable Securities until such Investor’s receiptof the copies of the supplemented or amended prospectus contemplated by Section3(g) or the first sentence of 3(f) or receipt of notice that no supplement oramendment is required.  Notwithstandinganything to the contrary, the Company shall cause its transfer agent to deliverunlegended shares of Common Stock to a transferee of an Investor in accordancewith the terms of the Securities Purchase Agreement in connection with any saleof Registrable Securities with respect to which an Investor has entered into acontract for sale prior to the Investor’s receipt of a notice from the Companyof the happening of any event of the kind described in Section 3(g) or thefirst sentence of 3(f) and for which the Investor has not yet settled.

## d.             EachInvestor covenants and agrees that it will comply with the prospectus deliveryrequirements of the 1933 Act as applicable to it or an exemption therefrom inconnection with sales of Registrable Securities pursuant to the RegistrationStatement.

11

----

# 5.             Expenses ofRegistration.

All reasonable expenses,other than underwriting discounts and commissions, incurred in connection withregistrations, filings or qualifications pursuant to Sections 2 and 3,including, without limitation, all registration, listing and qualificationsfees, printers and accounting fees, and fees and disbursements of counsel forthe Company shall be paid by the Company. The Company shall also reimburse the Investors for the fees anddisbursements of Legal Counsel in connection with registration, filing orqualification pursuant to Sections 2 and 3 of this Agreement which amount shallbe limited to $10,000.

# 6.             Indemnification.

In the event anyRegistrable Securities are included in a Registration Statement under thisAgreement:

## a.             To the fullest extent permitted by law, theCompany will, and hereby does, indemnify, hold harmless and defend eachInvestor, the directors, officers, members, partners, employees, agents,representatives of, and each Person, if any, who controls any Investor withinthe meaning of the 1933 Act or the 1934 Act (each, an “**Indemnified Person**”), against any losses, claims, damages,liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’fees, amounts paid in settlement or expenses, joint or several, (collectively,“**Claims**”) incurred in investigating, preparing ordefending any action, claim, suit, inquiry, proceeding, investigation or appealtaken from the foregoing by or before any court or governmental, administrativeor other regulatory agency, body or the SEC, whether pending or threatened,whether or not an indemnified party is or may be a party thereto (“**Indemnified Damages**”), to which any of them may become subjectinsofar as such Claims (or actions or proceedings, whether commenced orthreatened, in respect thereof) arise out of or are based upon:  (i) any untrue statement or alleged untruestatement of a material fact in a Registration Statement or any post-effectiveamendment thereto or in any filing made in connection with the qualification ofthe offering under the securities or other “blue sky” laws of any jurisdictionin which Registrable Securities are offered (“**Blue Sky Filing**”),or the omission or alleged omission to state a material fact required to bestated therein or necessary to make the statements therein not misleading, (ii)any untrue statement or alleged untrue statement of a material fact containedin any preliminary prospectus if used prior to the effective date of suchRegistration Statement, or contained in the final prospectus (as amended orsupplemented, if the Company files any amendment thereof or supplement theretowith the SEC) or the omission or alleged omission to state therein any materialfact necessary to make the statements made therein, in the light of thecircumstances under which the statements therein were made, not misleading,(iii) any violation or alleged violation by the Company of the 1933 Act, the1934 Act, any other law, including, without limitation, any state securitieslaw, or any rule or regulation thereunder relating to the offer or sale of theRegistrable Securities pursuant to a Registration Statement or (iv) anyviolation of this Agreement (the matters in the foregoing clauses (i) through(iv) being, collectively, “**Violations**”). Subject to Section 6(c), the Company shall reimburse the IndemnifiedPersons, promptly as such expenses are incurred and are due and payable, forany legal fees or other reasonable expenses incurred by them in connection withinvestigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, theindemnification agreement contained in this Section 6(a):  (i) shall not apply to a Claim by an 

12

----

## IndemnifiedPerson arising out of or based upon a Violation which occurs in reliance uponand in conformity with information furnished in writing to the Company by suchIndemnified Person for such Indemnified Person expressly for use in connectionwith the preparation of the Registration Statement or any such amendmentthereof or supplement thereto, if such prospectus was timely made available bythe Company pursuant to Section 3(d) and (ii) shall not apply to amounts paidin settlement of any Claim if such settlement is effected without the priorwritten consent of the Company, which consent shall not be unreasonablywithheld or delayed.  Such indemnityshall remain in full force and effect regardless of any investigation made byor on behalf of the Indemnified Person and shall survive the transfer of theRegistrable Securities by the Investors pursuant to Section 9.

## b.             In connection with any Registration Statementin which an Investor is participating, each such Investor agrees to severallyand not jointly indemnify, hold harmless and defend, to the same extent and inthe same manner as is set forth in Section 6(a), the Company, each of itsdirectors, each of its officers who signs the Registration Statement and eachPerson, if any, who controls the Company within the meaning of the 1933 Act orthe 1934 Act (each, an “**IndemnifiedParty**”), against any Claimor Indemnified Damages to which any of them may become subject, under the 1933Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damagesarise out of or are based upon any Violation, in each case to the extent, andonly to the extent, that such Violation occurs in reliance upon and inconformity with written information furnished to the Company by such Investorexpressly for use in connection with such Registration Statement; and, subjectto Section 6(c), such Investor will reimburse any legal or other expensesreasonably incurred by an Indemnified Party in connection with investigating ordefending any such Claim; provided, however, that the indemnity agreementcontained in this Section 6(b) and the agreement with respect to contributioncontained in Section 7 shall not apply to amounts paid in settlement of anyClaim if such settlement is effected without the prior written consent of suchInvestor, which consent shall not be unreasonably withheld or delayed;provided, further, however, that the Investor shall be liable under thisSection 6(b) for only that amount of a Claim or Indemnified Damages as does notexceed the net proceeds to such Investor as a result of the sale of RegistrableSecurities pursuant to such Registration Statement.  Such indemnity shall remain in full force andeffect regardless of any investigation made by or on behalf of such IndemnifiedParty and shall survive the transfer of the Registrable Securities by theInvestors pursuant to Section 9.

## c.             Promptly after receipt by an IndemnifiedPerson or Indemnified Party under this Section 6 of notice of the commencementof any action or proceeding (including any governmental action or proceeding)involving a Claim, such Indemnified Person or Indemnified Party shall, if aClaim in respect thereof is to be made against any indemnifying party underthis Section 6, deliver to the indemnifying party a written notice of thecommencement thereof, and the indemnifying party shall have the right toparticipate in, and, to the extent the indemnifying party so desires, jointlywith any other indemnifying party similarly noticed, to assume control of thedefense thereof with counsel mutually satisfactory to the indemnifying partyand the Indemnified Person or the Indemnified Party, as the case may be;provided, however, that an Indemnified Person or Indemnified Party shall havethe right to retain its own counsel with the fees and expenses of not more thanone counsel for such Indemnified Person or Indemnified Party to be paid by theindemnifying party, if, in the reasonable opinion of counsel retained by theindemnifying party, the representation by such counsel of the 

13

----

## IndemnifiedPerson or Indemnified Party and the indemnifying party would be inappropriatedue to actual or potential differing interests between such Indemnified Personor Indemnified Party and any other party represented by such counsel in suchproceeding.  In the case of anIndemnified Person, legal counsel referred to in the immediately precedingsentence shall be selected by the Investors holding at least a majority****in interest of the Registrable Securitiesincluded in the Registration Statement to which the Claim relates.  The Indemnified Party or Indemnified Personshall cooperate fully with the indemnifying party in connection with anynegotiation or defense of any such action or Claim by the indemnifying partyand shall furnish to the indemnifying party all information reasonablyavailable to the Indemnified Party or Indemnified Person which relates to suchaction or Claim.  The indemnifying partyshall keep the Indemnified Party or Indemnified Person reasonably apprised atall times as to the status of the defense or any settlement negotiations withrespect thereto.  No indemnifying partyshall be liable for any settlement of any action, claim or proceeding effectedwithout its prior written consent, provided, however, that the indemnifyingparty shall not unreasonably withhold, delay or condition its consent.  No indemnifying party shall, without theprior written consent of the Indemnified Party or Indemnified Person, consentto entry of any judgment or enter into any settlement or other compromise whichdoes not include as an unconditional term thereof the giving by the claimant orplaintiff to such Indemnified Party or Indemnified Person of a release from allliability in respect to such Claim or litigation, and such settlement shall notinclude any admission as to fault on the part of the Indemnified Party.  Following indemnification as provided forhereunder, the indemnifying party shall be subrogated to all rights of theIndemnified Party or Indemnified Person with respect to all third parties,firms or corporations relating to the matter for which indemnification has beenmade.  The failure to deliver writtennotice to the indemnifying party within a reasonable time of the commencementof any such action shall not relieve such indemnifying party of any liabilityto the Indemnified Person or Indemnified Party under this Section 6, except tothe extent that the indemnifying party is prejudiced in its ability to defendsuch action.

## d.             The indemnification required by this Section6 shall be made by periodic payments of the amount thereof during the course ofthe investigation or defense, as and when bills are received or IndemnifiedDamages are incurred.

## e.             The indemnity agreements contained hereinshall be in addition to  (i) any cause ofaction or similar right of the Indemnified Party or Indemnified Person againstthe indemnifying party or others, and (ii) any liabilities the indemnifyingparty may be subject to pursuant to the law.

# 7.             Contribution.

To the extent anyindemnification by an indemnifying party is prohibited or limited by law, theindemnifying party agrees to make the maximum contribution with respect to anyamounts for which it would otherwise be liable under Section 6 to the fullestextent permitted by law; provided, however, that:  (i) no contribution shall be made undercircumstances where the maker would not have been liable for indemnificationunder the fault standards set forth in Section 6 of this Agreement, (ii) noPerson involved in the sale of Registrable Securities, which Person is guiltyof fraudulent misrepresentation (within the meaning of Section 11(f) of the1933 Act) in connection with such sale, shall be entitled to 

14

----

contribution fromany Person involved in such sale of Registrable Securities who was not guiltyof fraudulent misrepresentation; and (iii) contribution by any seller ofRegistrable Securities shall be limited in amount to the net amount of proceedsreceived by such seller from the sale of such Registrable Securities pursuantto such Registration Statement.

# 8.             Reports Under the1934 Act.

With a view to makingavailable to the Investors the benefits of Rule 144 promulgated under the 1933Act or any other similar rule or regulation of the SEC that may at any timepermit the Investors to sell securities of the Company to the public withoutregistration (“**Rule 144**”), theCompany agrees to:

## a.             make and keep public information available,as those terms are understood and defined in Rule 144;

## b.             file with the SEC in a timely manner allreports and other documents required of the Company under the 1933 Act and the1934 Act so long as the Company remains subject to such requirements and thefiling of such reports and other documents is required for the applicableprovisions of Rule 144; and

## c.             furnish to each Investor so long as suchInvestor owns Registrable Securities, promptly upon request, (i) a writtenstatement by the Company, if true, that it has complied with the reportingrequirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of themost recent annual report of the Company and such other reports and documentsso filed by the Company (but only if such reports are not publicly available onthe EDGAR system), and (iii) such other information as may be reasonablyrequested to permit the Investors to sell such securities pursuant to Rule 144without registration.

# 9.             Assignment ofRegistration Rights.

The rights under thisAgreement shall be automatically assignable by the Investors to any transfereeof all or any portion of such Investor’s Registrable Securities if:  (i) the Investor agrees in writing with thetransferee or assignee to assign such rights, and a copy of such agreement isfurnished to the Company within a reasonable time after such assignment; (ii)the Company is, within a reasonable time after such transfer or assignment,furnished with written notice of (a) the name and address of such transferee orassignee, and (b) the securities with respect to which such registration rightsare being transferred or assigned; (iii) immediately following such transfer orassignment the further disposition of such securities by the transferee orassignee is restricted under the 1933 Act or applicable state securities laws;(iv) at or before the time the Company receives the written notice contemplatedby clause (ii) of this sentence the transferee or assignee agrees in writingwith the Company to be bound by all of the provisions contained herein; and (v)such transfer shall have been made in accordance with the applicablerequirements of the Securities Purchase Agreement.

# 10.           Amendment ofRegistration Rights.

Provisions of thisAgreement may be amended and the observance thereof may be waived (eithergenerally or in a particular instance and either retroactively orprospectively), only 

15

----

with the writtenconsent of the Company and the holders of at least two-thirds of theRegistrable Securities.  Any amendment orwaiver effected in accordance with this Section 10 shall be binding upon eachInvestor and the Company.  No suchamendment shall be effective to the extent that it applies to less than all ofthe holders of the Registrable Securities. No consideration shall be offered or paid to any Person to amend orconsent to a waiver or modification of any provision of any of this Agreementunless the same consideration also is offered to all of the parties to thisAgreement.

# 11.           Miscellaneous.

## a.             A Person is deemed to be a holder ofRegistrable Securities whenever such Person owns or is deemed to own of recordsuch Registrable Securities.  If theCompany receives conflicting instructions, notices or elections from two ormore Persons with respect to the same Registrable Securities, the Company shallact upon the basis of instructions, notice or election received from the recordowner of such Registrable Securities.

## b.             Any notices, consents, waivers or othercommunications required or permitted to be given under the terms of thisAgreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally;(ii) upon receipt, when sent by facsimile (provided confirmation oftransmission is mechanically or electronically generated and kept on file bythe sending party); or (iii) one Business Day after deposit with a nationallyrecognized overnight delivery service, in each case properly addressed to theparty to receive the same.  The addressesand facsimile numbers for such communications shall be:

If to the Company:
| Earth Biofuels, Inc.        |
|-----------------------------|
| 3001 Knox Street, Suite 403 |
| Dallas, Texas 75205         |
| Telephone:                  | (214) 389-9800 |
| Facsimile:                  | (214) 389-9806 |
| Attention:                  | Dennis McLaughlin |

 
| With a copy to:               |
|-------------------------------|
|                          |
| Scheef & Stone, LLP       |
| 5956 Sherry Lane, Suite  1400 |
| Dallas, Texas 75225           |
| Telephone:                    | (214) 706-4200 |
| Facsimile:                    | (214) 706-4242 |
| Attention:                    | Roger A. Crabb, Esq. |

 

If to a Buyer, to its address and facsimile number setforth on the Schedule of Buyers attached hereto, with copies to such Buyer’srepresentatives as set forth on the Schedule of Buyers, or to such otheraddress and/or facsimile number and/or to the attention of such other Person asthe 

16

----

recipient party has specified by written notice givento each other party five (5) days prior to the effectiveness of suchchange.  Written confirmation of receipt(A) given by the recipient of such notice, consent, waiver or othercommunication, (B) mechanically or electronically generated by the sender’sfacsimile machine containing the time, date, recipient facsimile number and animage of the first page of such transmission or (C) provided by a courier orovernight courier service shall be rebuttable evidence of personal service,receipt by facsimile or receipt from a nationally recognized overnight deliveryservice in accordance with clause (i), (ii) or (iii) above, respectively.

## c.             Failure of any party to exercise any right orremedy under this Agreement or otherwise, or delay by a party in exercisingsuch right or remedy, shall not operate as a waiver thereof.

## d.             All questions concerning the construction,validity, enforcement and interpretation of this Agreement shall be governed bythe internal laws of the State of New York, without giving effect to any choiceof law or conflict of law provision or rule (whether of the State of New Yorkor any other jurisdictions) that would cause the application of the laws of anyjurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction ofthe state and federal courts sitting in The City of New York, Borough ofManhattan, for the adjudication of any dispute hereunder or in connectionherewith or with any transaction contemplated hereby or discussed herein, andhereby irrevocably waives, and agrees not to assert in any suit, action orproceeding, any claim that it is not personally subject to the jurisdiction ofany such court, that such suit, action or proceeding is brought in aninconvenient forum or that the venue of such suit, action or proceeding isimproper.  Each party hereby irrevocablywaives personal service of process and consents to process being served in anysuch suit, action or proceeding by mailing a copy thereof to such party at theaddress for such notices to it under this Agreement and agrees that suchservice shall constitute good and sufficient service of process and noticethereof.  Nothing contained herein shallbe deemed to limit in any way any right to serve process in any mannerpermitted by law.  If any provision ofthis Agreement shall be invalid or unenforceable in any jurisdiction, suchinvalidity or unenforceability shall not affect the validity or enforceabilityof the remainder of this Agreement in that jurisdiction or the validity orenforceability of any provision of this Agreement in any otherjurisdiction.  **EACH PARTY HEREBY IRREVOCABLYWAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THEADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUTOF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.**

## e.             This Agreement, the other TransactionDocuments (as defined in the Securities Purchase Agreement) and the instrumentsreferenced herein and therein constitute the entire agreement among the partieshereto with respect to the subject matter hereof and thereof.  There are no restrictions, promises,warranties or undertakings, other than those set forth or referred to hereinand therein.  This Agreement, the otherTransaction Documents and the instruments referenced herein and thereinsupersede all prior agreements and understandings among the parties hereto withrespect to the subject matter hereof and thereof.

17

----

## f.              Subject to the requirements of Section 9,this Agreement shall inure to the benefit of and be binding upon the permittedsuccessors and assigns of each of the parties hereto.

## g.             The headings in this Agreement are forconvenience of reference only and shall not limit or otherwise affect themeaning hereof.

## h.             This Agreement may be executed in identicalcounterparts, each of which shall be deemed an original but all of which shallconstitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the otherparty hereto by facsimile transmission of a copy of this Agreement bearing thesignature of the party so delivering this Agreement.

## i.              Each party shall do and perform, or cause tobe done and performed, all such further acts and things, and shall execute anddeliver all such other agreements, certificates, instruments and documents, asany other party may reasonably request in order to carry out the intent andaccomplish the purposes of this Agreement and the consummation of thetransactions contemplated hereby.

## j.              All consents and other determinationsrequired to be made by the Investors pursuant to this Agreement shall be made,unless otherwise specified in this Agreement, by the Required Holders.

## k.             The language used in this Agreement will bedeemed to be the language chosen by the parties to express their mutual intentand no rules of strict construction will be applied against any party.

## l.              This Agreement is intended for the benefit ofthe parties hereto and their respective permitted successors and assigns, andis not for the benefit of, nor may any provision hereof be enforced by, anyother Person.

## m.            The obligations of each Buyer hereunder areseveral and not joint with the obligations of any other Buyer, and no provisionof this Agreement is intended to confer any obligations on any Buyer vis-à-visany other Buyer.  Nothing containedherein, and no action taken by any Buyer pursuant hereto, shall be deemed toconstitute the Buyers as a partnership, an association, a joint venture or anyother kind of entity, or create a presumption that the Buyers are in any wayacting in concert or as a group with respect to such obligations or thetransactions contemplated herein.

18

----

**INWITNESS WHEREOF**, each Buyer and the Company have caused theirrespective signature page to this Registration Rights Agreement to be dulyexecuted as of the date first written above.
|        | **COMPANY:**             |
|--------|--------------------------|
|   |                     |
|   | **EARTH BIOFUELS, INC.** |
|   |                     |
|   |                     |
|   | By:                      | /s/ Dennis G.  McLaughlin, III |   |
|   |                     | Name: | Dennis G. McLaughlin, III |
|   |                     | Title: | Chief Executive Officer |
|        |                          |  |  |  |

 

----

**INWITNESS WHEREOF**, each Buyer and the Company have caused theirrespective signature page to this Registration Rights Agreement to be dulyexecuted as of the date first written above.
|        | **BUYERS:**                       |
|--------|-----------------------------------|
|   |                              |
|   | **EXCALIBUR LIMITED PARTNERSHIP** |
|   |                              |
|   |                              |
|   | By:                               | /s/ William Hechter |   |
|   |                              | Name: | William Hechter |
|   |                              | Title: | President of [illegible] |
|        |                                   |  |  |  |

 

----

**INWITNESS WHEREOF,** each Buyer and the Company have caused theirrespective signature page to this Registration Rights Agreement to be dulyexecuted as of the date first written above.
|        | **WHALEHAVEN CAPITAL FUND LTD.** |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | By:                              |   |   |
|   |                             | Name: |
|   |                             | Title: |

 

----

**SCHEDULEOF BUYERS**
| Buyer                             | ** ** | **Buyer’s Address  and Facsimile Number**                                                                                                                                                   | ** ** | **Buyer’s Representative’s Address   and Facsimile Number** |
|-----------------------------------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------|
|                              |       |                                                                                                                                                                                             |       |                                                                  |
| **Excalibur Limited Partnership** |       | 33 Prince Arthur Avenue   Toronto, Ontario   Canada M5R 1B2   Attention: Will Hechter   Facsimile: (204) 848-4427 / (416) 964-8868  Telephone: (416) 964-9077   Residence: Canada                |       |                                                                  |
| ** **                        |       |                                                                                                                                                                                             |       |                                                                  |
| **Whalehaven Capital Fund Ltd.**  |       | 3rd Floor, 14 Par –  La Villa Road   PO Box HM 1027 Hamilton   HMDX - Bermuda   Attention: Evan Schemenauer   Facsimile:(441) 295-5224   Telephone:(441) 295-5262   Residence: Bermuda |       |                                                                  |

** **

----

**EXHIBIT A**

**FORMOF NOTICE OF EFFECTIVENESSOF REGISTRATION STATEMENT**

[Transfer Agent]

[Address]

Attention:

Re:      EARTHBIOFUELS, INC..

Ladies and Gentlemen:

[We are][I am]counsel to Earth Biofuels, Inc., a Delaware corporation (the “**Company**”), and have represented the Companyin connection with that certain Securities Purchase Agreement (the “**Securities PurchaseAgreement**”) entered into by and among the Company and the buyersnamed therein (collectively, the “**Holders**”)pursuant to which the Company issued to the Holders senior convertible notes(the “**Notes**”) convertible into theCompany’s common stock, $0.001 par value per share (the ”**Common Stock**”) and warrants exercisable forshares of Common Stock (the “**Warrants**”).  Pursuant to the Securities PurchaseAgreement, the Company also has entered into a Registration Rights Agreementwith the Holders (the “**Registration RightsAgreement**”) pursuant to which the Company agreed, among otherthings, to register the Registrable Securities (as defined in the RegistrationRights Agreement), including the shares of Common Stock issuable uponconversion of the Notes and the shares of Common Stock issuable upon exerciseof the Warrants, under the Securities Act of 1933, as amended (the “**1933 Act**”). In connection with the Company’s obligations under the RegistrationRights Agreement, on                             ,200     , the Company filed a Registration Statementon Form S-3 (File No.333-                              )(the “**Registration Statement**”)with the Securities and Exchange Commission (the “**SEC**”) relating to the Registrable Securities which names eachof the Holders as a selling stockholder thereunder.

In connection with theforegoing, [we][I] advise you that a member of the SEC’s staff has advised[us][me] by telephone that the SEC has entered an order declaring theRegistration Statement effective under the 1933 Act at **[**ENTER TIME OF EFFECTIVENESS**]** on **[**ENTERDATE OF EFFECTIVENESS**]** and [we][I]have no knowledge, after telephonic inquiry of a member of the SEC’s staff,that any stop order suspending its effectiveness has been 

----

issued or that anyproceedings for that purpose are pending before, or threatened by, the SEC andthe Registrable Securities are available for resale under the 1933 Act pursuantto the Registration Statement.

This letter shall serveas our standing opinion to you that the shares of Common Stock are freelytransferable by the Holders pursuant to the Registration Statement.  You need not require further letters from usto effect any future legend-free issuance or reissuance of shares of CommonStock to the Holders as contemplated by the Company’s Irrevocable TransferAgent Instructions dated July         ,2006.
|                                             | Very truly yours,               |
|--------------------------------------------------|---------------------------------|
|                                             |                            |
| ** **                                       | **[****ISSUER’S COUNSEL]** |
| ** **                                       | ** **                      |
|                                             | By:                             |   |   |
|                                             |                            |
| CC:   **[LIST NAMES OF HOLDERS]** | ** **                      |

 

----

**EXHIBIT B**

**SELLINGSTOCKHOLDERS**

The shares ofCommon Stock being offered by the selling stockholders are issuable uponconversion of the convertible notes and upon exercise of the warrants.  For additional information regarding theissuance of those convertible notes and warrants, see “Private Placement ofConvertible Notes and Warrants” above. We are registering the shares of Common Stock in order to permit the sellingstockholders to offer the shares for resale from time to time.  Except for the ownership of the ConvertibleNotes and the Warrants issued pursuant to the Securities Purchase Agreement,the selling stockholders have not had any material relationship with us withinthe past three years.

The table belowlists the selling stockholders and other information regarding the beneficialownership of the shares of Common Stock by each of the sellingstockholders.  The second column liststhe number of shares of Common Stock beneficially owned by each sellingstockholder, based on its ownership of the convertible notes and warrants, asof             ,200    , assuming conversion of all convertible notes andexercise of the warrants held by the selling stockholders on that date, withoutregard to any limitations on conversions or exercise.

The third columnlists the shares of Common Stock being offered by this prospectus by theselling stockholders.

In accordance withthe terms of a registration rights agreement with the selling stockholders,this prospectus generally covers the resale of at least 130% of the sum of (i)the number of shares of Common Stock issuable upon conversion of theconvertible notes as of the trading day immediately preceding the date the registrationstatement is initially filed with the SEC and (ii) the number of shares ofCommon Stock issuable upon exercise of the related warrants as of the tradingday immediately preceding the date the registration statement is initiallyfiled with the SEC**. **Because the conversion price ofthe convertible notes and the exercise price of the warrants may be adjusted,the number of shares that will actually be issued may be more or less than thenumber of shares being offered by this prospectus.  The fourth column assumes the sale of all ofthe shares offered by the selling stockholders pursuant to this prospectus.

Under the terms ofthe convertible notes and the warrants, a selling stockholder may not convertthe convertible notes or exercise the warrants to the extent such conversion orexercise would cause such selling stockholder, together with its affiliates, tobeneficially own a number of shares of Common Stock which would exceed 4.99% ofour then outstanding shares of Common Stock following such conversion orexercise, excluding for purposes of such determination shares of Common Stockissuable upon conversion of the convertible notes which have not been convertedand upon exercise of the warrants which have not been exercised.  The number of shares in the second columndoes not reflect this limitation.  Theselling stockholders may sell all, some or none of their shares in thisoffering.  See “Plan of Distribution.”

----

 
| **Name of Selling Stockholder**    | ** ** | **Number of Shares Owned  Prior to Offering** | ** ** | **Maximum Number of Shares  to be Sold Pursuant to this  Prospectus** | ** ** | **Number of Shares Owned  After Offering** |
|------------------------------------|------------|-----------------------------------------------|------------|-----------------------------------------------------------------------|------------|--------------------------------------------|
| ** **                         | ** ** | ** **                                    | ** ** | ** **                                                            | ** ** | ** **                                 |
| **Excalibur  Limited Partnership** |       |                                          |       |                                                                  |       |                                       |
| ** **                         |       |                                          |       |                                                                  |       |                                       |
| **Whalehaven  Capital Fund Ltd.**  |       |                                          |       |                                                                  |       |                                       |

** **

----

**PLAN OF DISTRIBUTION**

We are registeringthe shares of Common Stock issuable upon conversion of the convertible notesand upon exercise of the warrants to permit the resale of these shares ofCommon Stock by the holders of the convertible notes and warrants from time totime after the date of this prospectus. We will not receive any of the proceeds from the sale by the sellingstockholders of the shares of Common Stock. We will bear all fees and expenses incident to our obligation toregister the shares of Common Stock.

The sellingstockholders may sell all or a portion of the shares of Common Stockbeneficially owned by them and offered hereby from time to time directly orthrough one or more underwriters, broker-dealers or agents.  If the shares of Common Stock are soldthrough underwriters or broker-dealers, the selling stockholders will beresponsible for underwriting discounts or commissions or agent’scommissions.  The shares of Common Stockmay be sold in one or more transactions at fixed prices, at prevailing marketprices at the time of the sale, at varying prices determined at the time ofsale, or at negotiated prices.  Thesesales may be effected in transactions, which may involve crosses or blocktransactions,

·                  on any nationalsecurities exchange or quotation service on which the securities may be listedor quoted at the time of sale;

·                  in theover-the-counter market;

·                  in transactionsotherwise than on these exchanges or systems or in the over-the-counter market;

·                  through thewriting of options, whether such options are listed on an options exchange orotherwise;

·                  ordinarybrokerage transactions and transactions in which the broker-dealer solicitspurchasers;

·                  block trades inwhich the broker-dealer will attempt to sell the shares as agent but mayposition and resell a portion of the block as principal to facilitate thetransaction;

·                  purchases by abroker-dealer as principal and resale by the broker-dealer for its account;

·                  an exchangedistribution in accordance with the rules of the applicable exchange;

·                  privatelynegotiated transactions;

·                  to cover shortsales made after the date this Registration Statement is declared effective bythe SEC;

·                  sales pursuantto Rule 144;

----

·                  broker-dealersmay agree with the selling securityholders to sell a specified number of suchshares at a stipulated price per share;

·                  a combination ofany such methods of sale; and

·                  any other methodpermitted pursuant to applicable law.

If the sellingstockholders effect such transactions by selling shares of Common Stock to orthrough underwriters, broker-dealers or agents, such underwriters,broker-dealers or agents may receive commissions in the form of discounts,concessions or commissions from the selling stockholders or commissions frompurchasers of the shares of Common Stock for whom they may act as agent or towhom they may sell as principal (which discounts, concessions or commissions asto particular underwriters, broker-dealers or agents may be in excess of thosecustomary in the types of transactions involved).  In connection with sales of the shares ofCommon Stock or otherwise, the selling stockholders may enter into hedgingtransactions with broker-dealers, which may in turn engage in short sales ofthe shares of Common Stock in the course of hedging in positions theyassume.  The selling stockholders mayalso sell shares of Common Stock short and deliver shares of Common Stockcovered by this prospectus to close out short positions and to return borrowedshares in connection with such short sales. The selling stockholders may also loan or pledge shares of Common Stockto broker-dealers that in turn may sell such shares.

The sellingstockholders may pledge or grant a security interest in some or all of theconvertible notes, warrants or shares of Common Stock owned by them and, ifthey default in the performance of their secured obligations, the pledgees orsecured parties may offer and sell the shares of Common Stock from time to timepursuant to this prospectus or any amendment to this prospectus under Rule424(b)(3) or other applicable provision of the Securities Act of 1933, asamended, amending, if necessary, the list of selling stockholders to includethe pledgee, transferee or other successors in interest as selling stockholdersunder this prospectus.  The sellingstockholders also may transfer and donate the shares of Common Stock in othercircumstances in which case the transferees, donees, pledgees or othersuccessors in interest will be the selling beneficial owners for purposes ofthis prospectus.

The sellingstockholders and any broker-dealer participating in the distribution of theshares of Common Stock may be deemed to be “underwriters” within the meaning ofthe Securities Act, and any commission paid, or any discounts or concessionsallowed to, any such broker-dealer may be deemed to be underwriting commissionsor discounts under the Securities Act. At the time a particular offering of the shares of Common Stock is made,a prospectus supplement, if required, will be distributed which will set forththe aggregate amount of shares of Common Stock being offered and the terms ofthe offering, including the name or names of any broker-dealers or agents, anydiscounts, commissions and other terms constituting compensation from theselling stockholders and any discounts, commissions or concessions allowed orreallowed or paid to broker-dealers.

Under thesecurities laws of some states, the shares of Common Stock may be sold in suchstates only through registered or licensed brokers or dealers.  In addition, in some states the shares ofCommon Stock may not be sold unless such shares have been registered orqualified 

----

for sale in such state oran exemption from registration or qualification is available and is complied with.

There can be noassurance that any selling stockholder will sell any or all of the shares ofCommon Stock registered pursuant to the shelf registration statement, of whichthis prospectus forms a part.

The sellingstockholders and any other person participating in such distribution will besubject to applicable provisions of the Securities Exchange Act of 1934, asamended, and the rules and regulations thereunder, including, withoutlimitation, Regulation M of the Exchange Act, which may limit the timing ofpurchases and sales of any of the shares of Common Stock by the sellingstockholders and any other participating person.  Regulation M may also restrict the ability ofany person engaged in the distribution of the shares of Common Stock to engagein market-making activities with respect to the shares of Common Stock.  All of the foregoing may affect themarketability of the shares of Common Stock and the ability of any person orentity to engage in market-making activities with respect to the shares ofCommon Stock.

We will pay allexpenses of the registration of the shares of Common Stock pursuant to theregistration rights agreement, estimated to be$[     ] in total, including, without limitation,Securities and Exchange Commission filing fees and expenses of compliance withstate securities or “blue sky” laws; provided, however, that a sellingstockholder will pay all underwriting discounts and selling commissions, ifany.  We will indemnify the sellingstockholders against liabilities, including some liabilities under theSecurities Act, in accordance with the registration rights agreements, or theselling stockholders will be entitled to contribution.  We may be indemnified by the sellingstockholders against civil liabilities, including liabilities under theSecurities Act, that may arise from any written information furnished to us bythe selling stockholder specifically for use in this prospectus, in accordancewith the related registration rights agreement, or we may be entitled tocontribution.

Once sold underthe shelf registration statement, of which this prospectus forms a part, theshares of Common Stock will be freely tradable in the hands of persons otherthan our affiliates.

----

**EXHIBIT C**

**SELLINGSTOCKHOLDER QUESTIONNAIRE**

The undersignedhereby provides the following information to the Company and represents andwarrants that such information is accurate:

**1.****                                     ****Name.**

(a)           Full Legal Name of SellingSecurityholder

 

(b)                                 Full Legal Name of Registered Holder (ifnot the same as (a) above) through which Registrable Securities Listed in Item3 below are held:

 

(c)                                  Full Legal Name of Natural Control Person(which means a natural person who directly or indirectly alone or with othershas power to vote or dispose of the securities covered by the questionnaire):

 

 

**2.  Address for Notices to SellingSecurityholder:**

 

 

Telephone:

Fax:

Contact Person:

 

**3. Beneficial Ownership of Registrable Securities:**

Type and Principal Amount of Registrable Securitiesbeneficially owned:

----

**4. Broker-Dealer Status:**

(a)                                  Are you a broker-dealer?

Yes   o                                                    No   o

Note:                   If yes, the SEC’s staff has indicated that you shouldbe identified as an underwriter in the Registration Statement.

(b)                                 Are you an affiliate of a broker-dealer?

Yes   o                                                    No   o

(c)                                  If you are an affiliate of abroker-dealer, do you certify that you bought the Registrable Securities in theordinary course of business, and at the time of the purchase of the RegistrableSecurities to be resold, you had no agreements or understandings, directly orindirectly, with any person to distribute the Registrable Securities?

Yes   o                                                    No   o

Note:                   If no, the SEC’s staff has indicated that you shouldbe identified as an underwriter in the Registration Statement.

**5. Beneficial Ownership of Other Securities of the Company Owned by theSelling Securityholder.**

*Exceptas set forth below in this Item 5, the undersigned is not the beneficial orregistered owner of any securities of the Company other than the RegistrableSecurities listed above in Item 3.*

Type and Amount of Other Securities beneficially ownedby the Selling Securityholder:

 

**6. Relationships with the Company:**

*Exceptas set forth below, neither the undersigned nor any of its affiliates,officers, directors or principal equity holders (owners of 5% of more of theequity securities of the undersigned) has held any position or office or hashad any other material relationship with the Company (or its predecessors oraffiliates) during the past three years.*

State any exceptionshere:

 

----

The undersigned agrees to promptly notify the Companyof any inaccuracies or changes in the information provided herein that mayoccur subsequent to the date hereof and prior to the Effective Date for theRegistration Statement.

By signing below, the undersigned consents to thedisclosure of the information contained herein in its answers to Items 1through 6 and the inclusion of such information in the Registration Statementand the related prospectus.  Theundersigned understands that such information will be relied upon by theCompany in connection with the preparation or amendment of the RegistrationStatement and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority dulygiven, has caused this Questionnaire to be executed and delivered either inperson or by its duly authorized agent.
| Dated: |   |   | Beneficial Owner: |
|--------|--------|--------|-------------------|
|   |   |   |              |
|   | By:    |   |
|   |   | Name:  |
|   |   | Title: |

 

**PLEASEFAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURNTHE ORIGINAL BY OVERNIGHT MAIL, TO:**

[     ]

----